Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1999, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 243-H.F.No. 2420
An act relating to financing state and local
government; providing a sales tax rebate; reducing
individual income tax rates; making changes to income,
sales and use, property, excise, mortgage registry and
deed, health care provider, motor fuels, cigarette and
tobacco, liquor, insurance premiums, aircraft
registration, lawful gambling, taconite production,
solid waste, estate, and special taxes; conforming
with changes in federal income tax provisions;
authorizing certain cities to impose sales taxes and
issue bonds; establishing an agricultural homestead
credit; changing and allowing tax credits,
subtractions, and exemptions; changing property tax
valuation, assessment, levy, classification,
homestead, credit, aid, exemption, review, appeal,
abatement, and distribution provisions; extending levy
limits and changing levy authority; authorizing
property tax abatements; reducing the rate of health
care provider taxes; reducing tax rates on lawful
gambling; changing tax increment financing law and
providing special authority for certain cities;
authorizing water and sanitary sewer districts;
providing for the funding of courts in certain
judicial districts; changing tax forfeiture and
delinquency provisions; changing and clarifying tax
administration, collection, enforcement, and penalty
provisions; freezing the taconite production tax and
providing for its distribution; regulating state and
local business subsidies; authorizing issuance of
certain local obligations; requiring the metropolitan
airports commission to provide funding for airport
noise mitigation projects; modifying payment of
certain aids to local units of government; providing
for funding for border cities; changing fiscal note
requirements; providing for deposit of tobacco
settlement funds; requiring tax rebates when there is
a budget surplus; requiring a study; authorizing
requirements to use alternative dispute resolution
processes in annexation and similar proceedings;
transferring funds; appropriating money; amending
Minnesota Statutes 1998, sections 3.986, subdivision
2; 3.987, subdivision 1; 16D.09; 60A.19, subdivision
6; 92.51; 97A.065, subdivision 2; 204B.135, by adding
a subdivision; 270.07, subdivision 1; 270.65; 270.67,
by adding a subdivision; 270.78; 270A.03, subdivision
2; 270A.07, subdivision 2; 270A.08, subdivision 2;
271.01, subdivision 5; 271.21, subdivision 2; 272.02,
subdivision 1; 272.027; 272.03, subdivision 6; 273.11,
subdivisions 1a and 16; 273.111, by adding a
subdivision; 273.124, subdivisions 1, 7, 8, 13, 14,
and by adding a subdivision; 273.13, subdivisions 22,
23, 24, 25, 31, and by adding a subdivision; 273.1382;
273.1398, subdivisions 1a, 2, 8, and by adding a
subdivision; 273.1399, subdivision 6; 273.20; 274.01,
subdivision 1; 275.70, subdivision 5; 275.71,
subdivisions 2, 3, and 4; 276.131; 279.37,
subdivisions 1, 1a, and 2; 281.23, subdivisions 2, 4,
and 6; 282.01, subdivisions 1, 4, and 7; 282.04,
subdivision 2; 282.05; 282.08; 282.09; 282.241;
282.261, subdivision 4, and by adding a subdivision;
283.10; 287.01, subdivision 3, as amended; 287.05,
subdivisions 1, as amended, and 1a, as amended;
289A.02, subdivision 7; 289A.18, subdivision 4;
289A.20, subdivision 4; 289A.31, subdivision 2;
289A.40, subdivisions 1 and 1a; 289A.50, subdivision
7, and by adding a subdivision; 289A.55, subdivision
9; 289A.56, subdivision 4; 289A.60, subdivisions 3 and
21; 290.01, subdivisions 7, 19, 19a, 19b, 19f, 19g,
31, and by adding a subdivision; 290.06, subdivisions
2c, 2d, and by adding subdivisions; 290.0671,
subdivision 1; 290.0674, subdivisions 1 and 2;
290.091, subdivisions 1, 2, and 6; 290.0921,
subdivision 5; 290.095, subdivision 3; 290.17,
subdivisions 3, 4, and 6; 290.191, subdivisions 2 and
3; 290.9725; 290.9726, by adding a subdivision;
290A.03, subdivisions 3, 6, and 15; 290B.03,
subdivision 1; 290B.04, subdivisions 2, 3, and 4;
290B.05, subdivision 1; 291.005, subdivision 1;
295.50, subdivision 4; 295.52, subdivision 7; 295.53,
subdivision 1; 295.55, subdivisions 2 and 3; 295.57,
by adding a subdivision; 296A.16, by adding
subdivisions; 297A.15, subdivision 5; 297A.25,
subdivisions 9, 63, 73, and by adding subdivisions;
297A.48, by adding subdivisions; 297E.01, by adding a
subdivision; 297E.02, subdivisions 1, 3, 4, and 6;
297F.01, subdivision 23; 297F.17, subdivision 6;
297H.05; 297H.06, subdivision 2; 298.22, subdivision
7; 298.24, subdivision 1; 298.28, subdivisions 9a and
9b; 298.296, subdivision 4; 299D.03, subdivision 5;
357.021, subdivision 1a; 360.55, by adding a
subdivision; 373.40, subdivision 1; 375.18,
subdivision 12; 375.192, subdivision 2; 383C.482,
subdivision 1; 414.11; 462A.071, subdivision 2;
465.82, by adding a subdivision; 469.002, subdivision
10; 469.012, subdivision 1; 469.169, subdivision 12,
and by adding a subdivision; 469.1735, by adding a
subdivision; 469.176, subdivision 4g; 469.1763, by
adding a subdivision; 469.1771, subdivision 1, and by
adding a subdivision; 469.1791, subdivision 3;
469.1813, subdivisions 1, 2, 3, 6, and by adding
subdivisions; 469.1815, subdivision 2; 473.252,
subdivision 2; 475.52, subdivisions 1, 3, and 4;
477A.011, subdivision 36; 477A.03, subdivision 2;
477A.06, subdivision 1; 485.018, subdivision 5;
487.02, subdivision 2; 487.32, subdivision 3; 487.33,
subdivision 5; and 574.34, subdivision 1; Laws 1997,
chapter 231, article 1, section 19, subdivisions 1 and
3; article 2, section 68, subdivision 3, as amended;
article 3, section 9; Laws 1997, First Special Session
chapter 3, section 27; Laws 1997, Second Special
Session chapter 2, section 6; Laws 1998, chapter 389,
article 8, section 44, subdivisions 5, 6, and 7, as
amended; Laws 1998, chapter 645, section 3; and Laws
1999, chapter 112, section 1, subdivisions 1, 3, 4,
and 9; proposing coding for new law in Minnesota
Statutes, chapters 16A; 116J; 275; 290; 383D; 414; and
469; repealing Minnesota Statutes 1998, sections
92.22; 116J.991; 273.11, subdivision 10; 280.27;
281.13; 281.38; 284.01; 284.02; 284.03; 284.04;
284.05; 284.06; 297E.12, subdivision 3; 297F.19,
subdivision 4; 297G.18, subdivision 4; 473.252,
subdivisions 4 and 5; and 477A.05; Laws 1997, chapter
231, article 1, section 19, subdivision 2; and Laws
1998, chapter 389, article 3, section 45.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
SALES TAX REBATE
Section 1. [STATEMENT OF PURPOSE.]
(a) The state of Minnesota derives revenues from a variety
of taxes, fees, and other sources, including the state sales tax.
(b) It is fair and reasonable to refund the existing state
budget surplus in the form of a rebate of nonbusiness consumer
sales taxes paid by individuals in calendar year 1997.
(c) Information concerning the amount of sales tax paid at
various income levels is contained in the Minnesota tax
incidence report, which is written by the commissioner of
revenue and presented to the legislature according to Minnesota
Statutes, section 270.0682.
(d) It is fair and reasonable to use information contained
in the Minnesota tax incidence report to determine the
proportionate share of the sales tax rebate due each eligible
taxpayer since no effective or practical mechanism exists for
determining the amount of actual sales tax paid by each eligible
individual.
Sec. 2. [SALES TAX REBATE.]
(a) An individual who:
(1) was eligible for a credit under 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, and
Laws 1998, chapter 389, article 1, section 3, and who filed for
or received that credit on or before June 15, 1999; or
(2) filed a 1997 Minnesota income tax return on or before
June 15, 1999, and had a tax liability before refundable credits
on that return of at least $1 but did not file the claim for
credit authorized under Laws 1997, chapter 231, article 1,
section 16, as amended, and who was not allowed to be claimed as
a dependent on a 1997 federal income tax return filed by another
person; or
(3) had the property taxes payable on his or her homestead
abated to zero under Laws 1997, chapter 231, article 2, section
64,
shall receive a sales tax rebate.
(b) The sales tax rebate for taxpayers who qualify under
paragraph (a) as married filing joint or head of household must
be computed according to the following schedule:
Income Sales Tax Rebate
less than $2,500 $ 358
at least $2,500 but less than $5,000 $ 469
at least $5,000 but less than $10,000 $ 502
at least $10,000 but less than $15,000 $ 549
at least $15,000 but less than $20,000 $ 604
at least $20,000 but less than $25,000 $ 641
at least $25,000 but less than $30,000 $ 690
at least $30,000 but less than $35,000 $ 762
at least $35,000 but less than $40,000 $ 820
at least $40,000 but less than $45,000 $ 874
at least $45,000 but less than $50,000 $ 921
at least $50,000 but less than $60,000 $ 969
at least $60,000 but less than $70,000 $1,071
at least $70,000 but less than $80,000 $1,162
at least $80,000 but less than $90,000 $1,276
at least $90,000 but less than $100,000 $1,417
at least $100,000 but less than $120,000 $1,535
at least $120,000 but less than $140,000 $1,682
at least $140,000 but less than $160,000 $1,818
at least $160,000 but less than $180,000 $1,946
at least $180,000 but less than $200,000 $2,067
at least $200,000 but less than $400,000 $2,644
at least $400,000 but less than $600,000 $3,479
at least $600,000 but less than $800,000 $4,175
at least $800,000 but less than $1,000,000 $4,785
$1,000,000 and over $5,000
(c) The sales tax rebate for individuals who qualify under
paragraph (a) as single or married filing separately must be
computed according to the following schedule:
Income Sales Tax Rebate
less than $2,500 $ 204
at least $2,500 but less than $5,000 $ 249
at least $5,000 but less than $10,000 $ 299
at least $10,000 but less than $15,000 $ 408
at least $15,000 but less than $20,000 $ 464
at least $20,000 but less than $25,000 $ 496
at least $25,000 but less than $30,000 $ 515
at least $30,000 but less than $40,000 $ 570
at least $40,000 but less than $50,000 $ 649
at least $50,000 but less than $70,000 $ 776
at least $70,000 but less than $100,000 $ 958
at least $100,000 but less than $140,000 $1,154
at least $140,000 but less than $200,000 $1,394
at least $200,000 but less than $400,000 $1,889
at least $400,000 but less than $600,000 $2,485
$600,000 and over $2,500
(d) Individuals who were not residents of Minnesota for any
part of 1997 and who paid more than $10 in Minnesota sales tax
on nonbusiness consumer purchases in that year qualify for a
rebate under this paragraph only. Qualifying nonresidents must
file a claim for rebate on a form prescribed by the commissioner
before the later of June 15, 1999, or 30 days after the date of
enactment of this act. The claim must include receipts showing
the Minnesota sales tax paid and the date of the sale. Taxes
paid on purchases allowed in the computation of federal taxable
income or reimbursed by an employer are not eligible for the
rebate. The commissioner shall determine the qualifying taxes
paid and rebate the lesser of:
(1) 69.0 percent of that amount; or
(2) the maximum amount for which the claimant would have
been eligible as determined under paragraph (b) if the taxpayer
filed the 1997 federal income tax return as a married taxpayer
filing jointly or head of household, or as determined under
paragraph (c) for other taxpayers.
(e) "Income," for purposes of this section other than
paragraph (d), is taxable income as defined in section 63 of the
Internal Revenue Code of 1986, as amended through December 31,
1996, plus the sum of any additions to federal taxable income
for the taxpayer under Minnesota Statutes, section 290.01,
subdivision 19a, and reported on the original 1997 income tax
return including subsequent adjustments to that return made
within the time limits specified in paragraph (h). For an
individual who was a resident of Minnesota for less than the
entire year, the sales tax rebate equals the sales tax rebate
calculated under paragraph (b) or (c) multiplied by the
percentage determined pursuant to Minnesota Statutes, section
290.06, subdivision 2c, paragraph (e), as calculated on the
original 1997 income tax return including subsequent adjustments
to that return made within the time limits specified in
paragraph (h). For purposes of paragraph (d), "income" is
taxable income as defined in section 63 of the Internal Revenue
Code of 1986, as amended through December 31, 1996, and reported
on the taxpayer's original federal tax return for the first
taxable year beginning after December 31, 1996.
(f) Before payment, the commissioner of revenue shall
adjust the rebate as follows:
(1) the rebates calculated in paragraphs (b), (c), and (d)
must be proportionately reduced to account for 1997 income tax
returns that are filed on or after January 1, 1999, but before
July 1, 1999, so that the amount of sales tax rebates payable
under paragraphs (b), (c), and (d) does not exceed
$1,250,000,000; and
(2) the commissioner of finance shall certify by July 15,
1999, preliminary fiscal year 1999 general fund net nondedicated
revenues. The certification shall exclude the impact of any
legislation enacted during the 1999 regular session. If
certified net nondedicated revenues exceed the amount forecast
in February 1999, up to $50,000,000 of the increase shall be
added to the total amount rebated. The commissioner of revenue
shall adjust all rebates proportionally to reflect any
increases. The total amount of the rebate shall not exceed
$1,300,000,000.
The adjustments under this paragraph are not rules subject to
Minnesota Statutes, chapter 14.
(g) The commissioner of revenue may begin making sales tax
rebates by August 1, 1999. Sales tax rebates not paid by
October 1, 1999, bear interest at the rate specified in
Minnesota Statutes, section 270.75.
(h) A sales tax rebate shall not be adjusted based on
changes to a 1997 income tax return that are made by order of
assessment after June 15, 1999, or made by the taxpayer that are
filed with the commissioner of revenue after June 15, 1999.
(i) Individuals who filed a joint income tax return for
1997 shall receive a joint sales tax rebate. After the sales
tax rebate has been issued, but before the check has been
cashed, either joint claimant may request a separate check for
one-half of the joint sales tax rebate. Notwithstanding
anything in this section to the contrary, if prior to payment,
the commissioner has been notified that persons who filed a
joint 1997 income tax return are living at separate addresses,
as indicated on their 1998 income tax return or otherwise, the
commissioner may issue separate checks to each person. The
amount payable to each person is one-half of the total joint
rebate.
(j) The sales tax rebate is a "Minnesota tax law" for
purposes of Minnesota Statutes, section 270B.01, subdivision 8.
(k) The sales tax rebate is "an overpayment of any tax
collected by the commissioner" for purposes of Minnesota
Statutes, section 270.07, subdivision 5. For purposes of this
paragraph, a joint sales tax rebate is payable to each spouse
equally.
(l) If the commissioner of revenue cannot locate an
individual entitled to a sales tax rebate by July 1, 2001, or if
an individual to whom a sales tax rebate was issued has not
cashed the check by July 1, 2001, the right to the sales tax
rebate lapses and the check must be deposited in the general
fund.
(m) Individuals entitled to a sales tax rebate pursuant to
paragraph (a), but who did not receive one, and individuals who
receive a sales tax rebate that was not correctly computed, must
file a claim with the commissioner before July 1, 2000, in a
form prescribed by the commissioner. These claims must be
treated as if they are a claim for refund under Minnesota
Statutes, section 289A.50, subdivisions 4 and 7.
(n) The sales tax rebate is a refund subject to revenue
recapture under Minnesota Statutes, chapter 270A. The
commissioner of revenue shall remit the entire refund to the
claimant agency, which shall, upon the request of the spouse who
does not owe the debt, refund one-half of the joint sales tax
rebate to the spouse who does not owe the debt.
(o) The rebate is a reduction of fiscal year 1999 sales tax
revenues. The amount necessary to make the sales tax rebates
and interest provided in this section is appropriated from the
general fund to the commissioner of revenue in fiscal year 1999
and is available until June 30, 2001.
(p) If a sales tax rebate check is cashed by someone other
than the payee or payees of the check, and the commissioner of
revenue determines that the check has been forged or improperly
endorsed, the commissioner may issue an order of assessment for
the amount of the check against the person or persons cashing
it. The assessment must be made within two years after the
check is cashed, but if cashing the check constitutes theft
under Minnesota Statutes, section 609.52, or forgery under
Minnesota Statutes, section 609.631, the assessment can be made
at any time. The assessment may be appealed administratively
and judicially. The commissioner may take action to collect the
assessment in the same manner as provided by Minnesota Statutes,
chapter 289A, for any other order of the commissioner assessing
tax.
(q) Notwithstanding Minnesota Statutes, sections 9.031,
16A.40, 16B.49, 16B.50, and any other law to the contrary, the
commissioner of revenue may take whatever actions the
commissioner deems necessary to pay the rebates required by this
section, and may, in consultation with the commissioner of
finance and the state treasurer, contract with a private vendor
or vendors to process, print, and mail the rebate checks or
warrants required under this section and receive and disburse
state funds to pay those checks or warrants.
(r) The commissioner may pay rebates required by this
section by electronic funds transfer to individuals who
requested that their 1998 individual income tax refund be paid
through electronic funds transfer. The commissioner may make
the electronic funds transfer payments to the same financial
institution and into the same account as the 1998 individual
income tax refund.
Sec. 3. [APPROPRIATIONS.]
$1,257,000 is appropriated from the general fund to the
commissioner of revenue to administer the sales tax rebate for
fiscal year 1999. Any unencumbered balance remaining on June
30, 1999, does not cancel but is available for expenditure by
the commissioner of revenue until June 30, 2001. This is a
one-time appropriation and may not be added to the agency's
budget base.
Sec. 4. [EFFECTIVE DATE.]
Sections 1 to 3 are effective the day following final
enactment.
ARTICLE 2
INCOME AND FRANCHISE TAXES
Section 1. Minnesota Statutes 1998, section 16D.09, is
amended to read:
16D.09 [UNCOLLECTIBLE DEBTS.]
Subdivision 1. [GENERALLY.] When a debt is determined by a
state agency to be uncollectible, the debt may be written off by
the state agency from the state agency's financial accounting
records and no longer recognized as an account receivable for
financial reporting purposes. A debt is considered to be
uncollectible when (1) all reasonable collection efforts have
been exhausted, (2) the cost of further collection action will
exceed the amount recoverable, (3) the debt is legally without
merit or cannot be substantiated by evidence, (4) the debtor
cannot be located, (5) the available assets or income, current
or anticipated, that may be available for payment of the debt
are insufficient, (6) the debt has been discharged in
bankruptcy, (7) the applicable statute of limitations for
collection of the debt has expired, or (8) it is not in the
public interest to pursue collection of the debt. The
determination of the uncollectibility of a debt must be reported
by the state agency along with the basis for that decision as
part of its quarterly reports to the commissioner of finance.
Determining that the debt is uncollectible does not cancel the
legal obligation of the debtor to pay the debt, except in the
case of a debt related to a tax liability that is canceled by
the department of revenue.
Subd. 2. [NOTIFICATION OF ACTION BY DEPARTMENT OF
REVENUE.] When the department of revenue has determined that a
debt is uncollectible and has written off that debt as provided
in subdivision 1, the commissioner of revenue must make a
reasonable attempt to notify the debtor of that action and of
the release of any liens imposed under section 270.69 related to
that debt, within 30 days after the determination has been
reported to the commissioner of finance.
Sec. 2. Minnesota Statutes 1998, section 290.01,
subdivision 7, is amended to read:
Subd. 7. [RESIDENT.] The term "resident" means (1) any
individual domiciled in Minnesota, except that an individual is
not a "resident" for the period of time that the individual is a
"qualified individual" as defined in section 911(d)(1) of the
Internal Revenue Code, if the qualified individual notifies the
county within three months of moving out of the country that
homestead status be revoked for the Minnesota residence of the
qualified individual, and the property is not classified as a
homestead while the individual remains a qualified individual;
and (2) any individual domiciled outside the state who maintains
a place of abode in the state and spends in the aggregate more
than one-half of the tax year in Minnesota, unless the
individual or the spouse of the individual is in the armed
forces of the United States, or the individual is covered under
the reciprocity provisions in section 290.081.
For purposes of this subdivision, presence within the state
for any part of a calendar day constitutes a day spent in the
state. Individuals shall keep adequate records to substantiate
the days spent outside the state.
The term "abode" means a dwelling maintained by an
individual, whether or not owned by the individual and whether
or not occupied by the individual, and includes a dwelling place
owned or leased by the individual's spouse.
Neither the commissioner nor any court shall consider
charitable contributions made by an individual within or without
the state in determining if the individual is domiciled in
Minnesota.
Sec. 3. Minnesota Statutes 1998, 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(g) 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;
(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;
(8) (5) the amount of expense, interest, or taxes
disallowed pursuant to section 290.10; and
(9) (6) 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 1998, 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
qualifying child in grades kindergarten to 6 and $2,500 for each
dependent qualifying child in grades 7 to 12, for tuition,
textbooks, and transportation of each dependent qualifying child
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. For purposes of the subtraction
provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;
(4) contributions made in taxable years beginning after
December 31, 1981, and before January 1, 1985, 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, less any amount allowed to be
subtracted as a distribution under this subdivision or a
predecessor provision in taxable years that began before January
1, 2000. This subtraction applies only to contributions made in
a taxable year prior to 1985 for taxable years beginning after
December 31, 1999, and before January 1, 2001;
(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
124D.42 for volunteer service under United States Code, title
42, section 5011(d), as amended;
(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 an "S" corporation for state tax purposes under
section 290.9725.
(11) to the extent not deducted in determining federal
taxable income by an individual who does not itemize deductions
for federal income tax purposes for the taxable year, an amount
equal to 50 percent of the excess of charitable contributions
allowable as a deduction for the taxable year under section
170(a) of the Internal Revenue Code over $500; and
(12) to the extent included in federal taxable income,
holocaust victims' settlement payments for any injury incurred
as a result of the holocaust, if received by an individual who
was persecuted for racial or religious reasons by Nazi Germany
or any other Axis regime or an heir of such a person.
Sec. 5. Minnesota Statutes 1998, 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, 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 1998, section 290.01,
subdivision 19g, is amended to read:
Subd. 19g. [ACRS MODIFICATION FOR INDIVIDUALS.] (a) An
individual is allowed a subtraction from federal taxable income
for the amount of accelerated cost recovery system deductions
that were added to federal adjusted gross income in computing
Minnesota gross income for taxable year 1981, 1982, 1983, or
1984 and that were not deducted in a later taxable year
beginning before January 1, 2000. The deduction is
allowed beginning in the first taxable year after the entire
allowable deduction for the property has been allowed under
federal law or the first taxable year beginning after December
31, 1987, whichever is later 1999. The amount of the
deduction is computed by deducting equals the amount added to
federal adjusted gross income in computing Minnesota gross
income, (less any:
(1) deduction allowed allowable under Minnesota Statutes
1986, section 290.01, subdivision 20f) in equal annual amounts
over five years.; and
(2) amount allowable as a subtraction under this
subdivision in a taxable year beginning before January 1, 2000.
This paragraph does not apply to property that was sold or
exchanged in a taxable year beginning before January 1, 2001.
(b) In the event of a sale or exchange of the
property occurring during a taxable year beginning after
December 31, 1999, and before January 1, 2001, a deduction is
allowed equal to the lesser of (1) the remaining amount that
would be allowed as a deduction under paragraph (a) or (2) the
amount of capital gain recognized and the amount of cost
recovery deductions that were subject to recapture under
sections 1245 and 1250 of the Internal Revenue Code of 1986 for
the taxable year.
(c) In the case of a corporation treated as an "S"
corporation under section 290.9725, the amount of the
corporation's cost recovery allowances that have been deducted
in computing federal tax, but have been added to federal taxable
income or not deducted in computing tax under this chapter as a
result of the application of subdivision 19e, paragraphs (a) and
(c) or Minnesota Statutes 1986, section 290.09, subdivision 7,
is allowed as a deduction to the shareholders under the
provisions of paragraph (a).
Sec. 7. Minnesota Statutes 1998, section 290.01, is
amended by adding a subdivision to read:
Subd. 32. [HOLOCAUST SETTLEMENT PAYMENTS.] "Holocaust
victims' settlement payments" means:
(1) a payment received as a result of settlement of the
action entitled In re Holocaust Victims' Asset Litigation, in
United States district court for the eastern district of New
York, C.A. No. 96-4849;
(2) any amount received under the German Act Regulating
Unresolved Property Claims or any other foreign law providing
for payments for holocaust claims; and
(3) a payment received as a result of the settlement of a
holocaust claim not described in clause (1) or (2), including an
insurance claim, a claim relating to looted art or financial
assets, and a claim relating to slave labor wages.
Sec. 8. Minnesota Statutes 1998, 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 $25,220, 6 5.5 percent;
(2) On all over $19,910 $25,220, but not
over $79,120 $100,200, 8 7.25 percent;
(3) On all over $79,120 $100,200, 8.5 8 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 $17,250, 6 5.5 percent;
(2) On all over $13,620 $17,250, but not
over $44,750 $56,680, 8 7.25 percent;
(3) On all over $44,750 $56,680, 8.5 8 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 $21,240, 6 5.5 percent;
(2) On all over $16,770 $21,240, but not
over $67,390 $85,350, 8 7.25 percent;
(3) On all over $67,390 $85,350, 8.5 8 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
additions required under section 290.01, subdivision 19a,
clauses (1) and (9) (6), 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, increased by the amounts specified in section
290.01, subdivision 19a, clauses (1), (5), (6), (7), and
(9) (6), and reduced by the amounts specified in section 290.01,
subdivision 19b, clauses clause (1), (11), and (12).
Sec. 9. Minnesota Statutes 1998, section 290.06,
subdivision 2d, is amended to read:
Subd. 2d. [INFLATION ADJUSTMENT OF BRACKETS.] (a) For
taxable years beginning after December 31, 1991 1999, the
minimum and maximum dollar amounts for each rate bracket for
which a tax is imposed in subdivision 2c shall be adjusted for
inflation by the percentage determined under paragraph (b). For
the purpose of making the adjustment as provided in this
subdivision all of the rate brackets provided in subdivision 2c
shall be the rate brackets as they existed for taxable years
beginning after December 31, 1990 1998, and before January
1, 1992 2000. The rate applicable to any rate bracket must not
be changed. The dollar amounts setting forth the tax shall be
adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount.
If the rate bracket ends in $5, it must be rounded up to the
nearest $10 amount.
(b) The commissioner shall adjust the rate brackets and by
the percentage determined pursuant to the provisions of section
1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B) the word "1990 1998" shall be substituted for the
word "1987 1992." For 1991 2000, the commissioner shall then
determine the percent change from the 12 months ending on August
31, 1990 1998, to the 12 months ending on August 31, 1991 1999,
and in each subsequent year, from the 12 months ending on August
31, 1990 1998, to the 12 months ending on August 31 of the year
preceding the taxable year. The determination of the
commissioner pursuant to this subdivision shall not be
considered a "rule" and shall not be subject to the
Administrative Procedure Act contained in chapter 14.
No later than December 15 of each year, the commissioner
shall announce the specific percentage that will be used to
adjust the tax rate brackets.
Sec. 10. Minnesota Statutes 1998, section 290.06, is
amended by adding a subdivision to read:
Subd. 26. [BANK S CORPORATIONS.] A shareholder of an S
corporation subject to tax under section 290.9725, clause (2),
is allowed a credit against the tax imposed under this chapter.
The credit equals 80 percent of the tax apportioned to the
shareholder under section 290.9726, subdivision 7, for the
taxable year.
Sec. 11. Minnesota Statutes 1998, section 290.06, is
amended by adding a subdivision to read:
Subd. 27. [TAX PAID TO ANOTHER STATE; CORPORATIONS.] (a) A
credit is allowed against the tax imposed under subdivision 1
for tax paid to another state based on net income. The credit
must be claimed in a manner prescribed by the commissioner.
(b) The amount of the credit equals the amount of
qualifying tax paid to the other state for the taxable year,
multiplied by the taxpayer's apportionment percentage under
section 290.191. If the item of income or gain is assigned to
Minnesota as nonbusiness income, the entire amount of the
qualifying tax is allowed as a credit. The maximum amount of
the credit is limited to the tax liability under subdivision 1
for the taxable year and, in no case, may the credit exceed the
reduction in the amount of tax under subdivision 1 if the item
of income or gain were excluded from net income.
(c) For purposes of this subdivision, "qualifying tax"
means the amount of tax paid to another state on an item of
income or gain for the taxable year, if:
(1) the law of another state requires and the taxpayer
assigns the entire amount of the income or gain to one other
state; and
(2) the income or gain is included in the measure of the
exercise of the corporate franchise that is taxable under
subdivision 1.
(d) The amount of tax paid to another state on an item of
income or gain is the difference between the tax paid to the
state and the amount of tax that would have been paid to the
state if the item of income or gain had not been included in the
net income of that state.
(e) The taxpayer must report to the commissioner of revenue
any change in tax in the other state, the change in qualifying
tax, and a copy of the final determination of the tax by the
taxing authority of the other state. A taxpayer who claims the
credit consents to extend the period of limitation for the
commissioner to recompute the credit and reassess the tax due,
including a refund, for a period of one year following a report
by the taxpayer of a final determination of tax by the state in
which the entire amount of income or gain is reported,
notwithstanding any period of limitations to the contrary, or
within any applicable period of limitations, whichever is
longer. If a taxpayer fails to report as required by this
paragraph, the commissioner may recompute the tax, including a
refund, based on the information available to the commissioner.
The tax may be recomputed within six years after the report
should have been filed, notwithstanding any period of
limitations to the contrary.
Sec. 12. Minnesota Statutes 1998, 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 earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 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 7.45 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 5.13 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 8.8 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 9.38 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
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.
(g) The commissioner shall construct tables showing the
amount of the credit at various income levels and make them
available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may
graduate the transition between income brackets.
Sec. 13. Minnesota Statutes 1998, section 290.0674,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT ALLOWED.] An individual is allowed
a credit against the tax imposed by this chapter in an amount
equal to the amount paid for education-related expenses for
a dependent qualifying child in kindergarten through grade 12.
For purposes of this section, "education-related expenses" means:
(1) fees or tuition for instruction by an instructor under
section 120A.22, subdivision 10, clause (1), (2), (3), (4), or
(5), or by a member of the Minnesota music teachers association,
for instruction outside the regular school day or school year,
including tutoring, driver's education offered as part of school
curriculum, regardless of whether it is taken from a public or
private entity or summer camps, in grade or age appropriate
curricula that supplement curricula and instruction available
during the regular school year, that assists a dependent to
improve knowledge of core curriculum areas or to expand
knowledge and skills under the graduation rule under section
120B.02 and that do not include the teaching of religious
tenets, doctrines, or worship, the purpose of which is to
instill such tenets, doctrines, or worship;
(2) expenses for textbooks, including books and other
instructional materials and equipment used in elementary and
secondary schools in teaching only those subjects legally and
commonly taught in public elementary and secondary schools in
this state. "Textbooks" does not include instructional books
and materials used in the teaching of religious tenets,
doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship, nor does it include books or
materials for extracurricular activities including sporting
events, musical or dramatic events, speech activities, driver's
education, or similar programs;
(3) a maximum expense of $200 per family for personal
computer hardware, excluding single purpose processors, and
educational software that assists a dependent to improve
knowledge of core curriculum areas or to expand knowledge and
skills under the graduation rule under section 120B.02 purchased
for use in the taxpayer's home and not used in a trade or
business regardless of whether the computer is required by the
dependent's school; and
(4) the amount paid to others for transportation of a
dependent qualifying child 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 purposes of this section, "qualifying child" has the
meaning given in section 32(c)(3) of the Internal Revenue Code.
Sec. 14. Minnesota Statutes 1998, section 290.0674,
subdivision 2, is amended to read:
Subd. 2. [LIMITATIONS.] (a) For claimants with income not
greater than $33,500, the maximum credit allowed is $1,000 per
qualifying child and $2,000 per family. No credit is allowed
for education-related expenses for claimants with income greater
than $33,500 $37,500. The maximum credit per child is reduced
by $1 for each $4 of household income over $33,500, and the
maximum credit per family is reduced by $2 for each $4 of
household income over $33,500, but in no case is the credit less
than zero.
For purposes of this section "income" has the meaning given
in section 290.067, subdivision 2a. In the case of a married
claimant, a credit is not allowed unless a joint income tax
return is filed.
(b) For a nonresident or part-year resident, the credit
determined under subdivision 1 and the maximum credit amount in
paragraph (a) must be allocated using the percentage calculated
in section 290.06, subdivision 2c, paragraph (e).
Sec. 15. [290.0675] [MARRIAGE PENALTY CREDIT.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section the following terms have the meanings given.
(b) "Earned income" means earned income as defined in
section 32(c)(2) of the Internal Revenue Code.
(c) "Taxable income" means net income as defined in section
290.01, subdivision 19.
(d) "Earned income of lesser-earning spouse" means the
earned income of the spouse with the lesser amount of earned
income as defined in paragraph (b) for the taxable year.
Subd. 2. [CREDIT ALLOWED.] A married couple filing a joint
return is allowed a credit against the tax imposed under section
290.06.
The minimum taxable income for the married couple to be
eligible for the credit is $25,000, and the minimum earned
income in order for the couple to be eligible for the credit is
$14,000 for each spouse.
Subd. 3. [CREDIT AMOUNT.] The credit amount is as shown in
the table in this subdivision, based on the couple's taxable
income for the tax year and on the earned income of the
lesser-earning spouse.
Credit For Credit For
Earned Income of Taxable Income Taxable Income
Lesser Earning Spouse $25,000-$99,999 $100,000-over
$14,000 - $14,999 $9 $0
$15,000 - $15,999 $27 $0
$16,000 - $16,999 $44 $0
$17,000 - $17,999 $62 $0
$18,000 - $18,999 $79 $0
$19,000 - $19,999 $97 $0
$20,000 - $20,999 $114 $0
$21,000 - $21,999 $132 $0
$22,000 - $22,999 $149 $0
$23,000 - $23,999 $162 $0
$24,000 - $24,999 $162 $0
$25,000 - $25,999 $162 $0
$26,000 - $26,999 $162 $0
$27,000 - $27,999 $162 $0
$28,000 - $28,999 $162 $9
$29,000 - $29,999 $162 $16
$30,000 - $30,999 $162 $24
$31,000 - $31,999 $162 $31
$32,000 - $32,999 $162 $39
$33,000 - $33,999 $162 $46
$34,000 - $34,999 $162 $54
$35,000 - $35,999 $162 $61
$36,000 - $36,999 $162 $69
$37,000 - $37,999 $162 $76
$38,000 - $38,999 $162 $84
$39,000 - $39,999 $162 $91
$40,000 - $40,999 $162 $99
$41,000 - $41,999 $162 $106
$42,000 - $42,999 $162 $114
$43,000 - $43,999 $162 $121
$44,000 - $44,999 $162 $129
$45,000 - $45,999 $162 $136
$46,000 - $46,999 $162 $144
$47,000 - $47,999 $162 $151
$48,000 - $48,999 $162 $159
$49,000 - $49,999 $162 $166
$50,000 - $50,999 $162 $174
$51,000 - $51,999 $162 $181
$52,000 - $52,999 $162 $189
$53,000 - $53,999 $162 $196
$54,000 - $54,999 $162 $204
$55,000 - $55,999 $162 $211
$56,000 - $56,999 $162 $219
$57,000 - $57,999 $162 $226
$58,000 - $58,999 $162 $234
$59,000 - $59,999 $162 $241
$60,000 - $60,999 $162 $249
$61,000 - $61,999 $162 $256
$62,000 and over $162 $261
Subd. 4. [NONRESIDENTS AND PART-YEAR RESIDENTS.] For a
nonresident or part-year resident, the credit must be allocated
based on the percentage calculated under section 290.06,
subdivision 2c, paragraph (e).
Subd. 5. [INFLATION ADJUSTMENT.] The dollar amount of
earned income of the lesser-earning spouse, taxable income, and
marriage penalty credit in the table in subdivision 3 must be
adjusted for inflation. The commissioner shall adjust the
amounts by the percentage determined under section 290.06,
subdivision 2d, for the taxable year.
Sec. 16. Minnesota Statutes 1998, section 290.091,
subdivision 1, is amended to read:
Subdivision 1. [IMPOSITION OF TAX.] In addition to all
other taxes imposed by this chapter a tax is imposed on
individuals, estates, and trusts equal to the excess (if any) of
(a) an amount equal to seven 6.5 percent of alternative
minimum taxable income after subtracting the exemption amount,
over
(b) the regular tax for the taxable year.
Sec. 17. Minnesota Statutes 1998, 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;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled
person; and
(v) holocaust victims' settlement payments to the extent
allowed under section 290.01, subdivision 19b; and
(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 (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 6.5 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. 18. Minnesota Statutes 1998, 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 6.5 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),
(v) (iv) depletion as defined in section 57(a)(1),
determined without regard to the last sentence of paragraph (1),
of the Internal Revenue Code, less
(vi) (v) 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
(vii) (vi) 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. 19. Minnesota Statutes 1998, section 290.0921,
subdivision 5, is amended to read:
Subd. 5. [CHARITABLE CONTRIBUTIONS.] (a) A deduction from
alternative minimum taxable net income is allowed equal to
the contributions subject to the deduction for charitable
contributions under section 290.21, subdivision 3, without
application of the limitation in section 290.21, subdivision 3.
The deduction allowable for capital gain property is limited to
the adjusted basis of the property as defined in section 290.01,
subdivision 19f. The term capital gain property has the meaning
given by section 170(b)(1)(C)(iv) of the Internal Revenue Code,
but does not include property to which an election under section
170(b)(1)(C)(iii) of the Internal Revenue Code applies.
(b) The amount of the deduction may not exceed 15 percent
of alternative minimum taxable net income less the deduction
allowed under subdivision 6.
Sec. 20. Minnesota Statutes 1998, section 290.095,
subdivision 3, is amended to read:
Subd. 3. [CARRYOVER.] (a) A net operating loss incurred in
a taxable year: (i) beginning after December 31, 1986, shall be
a net operating loss carryover to each of the 15 taxable years
following the taxable year of such loss; (ii) beginning before
January 1, 1987, shall be a net operating loss carryover to each
of the five taxable years following the taxable year of such
loss subject to the provisions of Minnesota Statutes 1986,
section 290.095; and (iii) beginning before January 1, 1987,
shall be a net operating loss carryback to each of the three
taxable years preceding the loss year subject to the provisions
of Minnesota Statutes 1986, section 290.095.
(b) The entire amount of the net operating loss for any
taxable year shall be carried to the earliest of the taxable
years to which such loss may be carried. The portion of such
loss which shall be carried to each of the other taxable years
shall be the excess, if any, of the amount of such loss over the
sum of the taxable net income, adjusted by the modifications
specified in subdivision 4, for each of the taxable years to
which such loss may be carried.
(c) Where a corporation does business both within and
without Minnesota, and apportions its income under the
provisions of section 290.191, the net operating loss deduction
incurred in any taxable year shall be allowed to the extent of
the apportionment ratio of the loss year.
(d) The provisions of sections 381, 382, and 384 of the
Internal Revenue Code apply to carryovers in certain corporate
acquisitions and special limitations on net operating loss
carryovers. The limitation amount determined under section 382
shall be applied to net income, before apportionment, in each
post change year to which a loss is carried.
Sec. 21. Minnesota Statutes 1998, section 290.17,
subdivision 3, is amended to read:
Subd. 3. [TRADE OR BUSINESS INCOME; GENERAL RULE.] All
income of a trade or business is subject to apportionment except
nonbusiness income. Income derived from carrying on a trade or
business must be assigned to this state if the trade or business
is conducted wholly within this state, assigned outside this
state if conducted wholly without this state and apportioned
between this state and other states and countries under this
subdivision if conducted partly within and partly without this
state. For purposes of determining whether a trade or business
is carried on exclusively within or without this state:
(a) A trade or business physically located exclusively
within this state is nevertheless carried on partly within and
partly without this state if any of the principles set forth in
section 290.191 for the allocation of sales or receipts within
or without this state when applied to the taxpayer's situation
result in the allocation of any sales or receipts without this
state.
(b) A trade or business physically located exclusively
without this state is nevertheless carried on partly within and
partly without this state if any of the principles set forth in
section 290.191 for the allocation of sales or receipts within
or without this state when applied to the taxpayer's situation
result in the allocation of any sales or receipts without this
state. The jurisdiction to tax such a business under this
chapter must be determined in accordance with sections 290.014
and 290.015.
Sec. 22. Minnesota Statutes 1998, section 290.17,
subdivision 4, is amended to read:
Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or
business conducted wholly within this state or partly within and
partly without this state is part of a unitary business, the
entire income of the unitary business is subject to
apportionment pursuant to section 290.191. Notwithstanding
subdivision 2, paragraph (c), none of the income of a unitary
business is considered to be derived from any particular source
and none may be allocated to a particular place except as
provided by the applicable apportionment formula. The
provisions of this subdivision do not apply to farm income
subject to subdivision 5, paragraph (a), business income subject
to subdivision 5, paragraph (b) or (c), income of an insurance
company determined under section 290.35, or income of an
investment company determined under section 290.36.
(b) The term "unitary business" means business activities
or operations which are of mutual benefit, dependent upon, or
contributory to one another, individually or as a group result
in a flow of value between them. The term may be applied within
a single legal entity or between multiple entities and without
regard to whether each entity is a sole proprietorship, a
corporation, a partnership or a trust.
(c) Unity is presumed whenever there is unity of ownership,
operation, and use, evidenced by centralized management or
executive force, centralized purchasing, advertising,
accounting, or other controlled interaction, but the absence of
these centralized activities will not necessarily evidence a
nonunitary business. Unity is also presumed when business
activities or operations are of mutual benefit, dependent upon
or contributory to one another, either individually or as a
group.
(d) Where a business operation conducted in Minnesota is
owned by a business entity that carries on business activity
outside the state different in kind from that conducted within
this state, and the other business is conducted entirely outside
the state, it is presumed that the two business operations are
unitary in nature, interrelated, connected, and interdependent
unless it can be shown to the contrary.
(e) Unity of ownership is not deemed to exist when a
corporation is involved unless that corporation is a member of a
group of two or more business entities and more than 50 percent
of the voting stock of each member of the group is directly or
indirectly owned by a common owner or by common owners, either
corporate or noncorporate, or by one or more of the member
corporations of the group. For this purpose, the term "voting
stock" shall include membership interests of mutual insurance
holding companies formed under section 60A.077.
(f) The net income and apportionment factors under section
290.191 or 290.20 of foreign corporations and other foreign
entities which are part of a unitary business shall not be
included in the net income or the apportionment factors of the
unitary business. A foreign corporation or other foreign entity
which is required to file a return under this chapter shall file
on a separate return basis. The net income and apportionment
factors under section 290.191 or 290.20 of foreign operating
corporations shall not be included in the net income or the
apportionment factors of the unitary business except as provided
in paragraph (g).
(g) The adjusted net income of a foreign operating
corporation shall be deemed to be paid as a dividend on the last
day of its taxable year to each shareholder thereof, in
proportion to each shareholder's ownership, with which such
corporation is engaged in a unitary business. Such deemed
dividend shall be treated as a dividend under section 290.21,
subdivision 4.
Dividends actually paid by a foreign operating corporation
to a corporate shareholder which is a member of the same unitary
business as the foreign operating corporation shall be
eliminated from the net income of the unitary business in
preparing a combined report for the unitary business. The
adjusted net income of a foreign operating corporation shall be
its net income adjusted as follows:
(1) any taxes paid or accrued to a foreign country, the
commonwealth of Puerto Rico, or a United States possession or
political subdivision of any of the foregoing shall be a
deduction; and
(2) the subtraction from federal taxable income for
payments received from foreign corporations or foreign operating
corporations under section 290.01, subdivision 19d, clause (11),
shall not be allowed.
If a foreign operating corporation incurs a net loss,
neither income nor deduction from that corporation shall be
included in determining the net income of the unitary business.
(h) For purposes of determining the net income of a unitary
business and the factors to be used in the apportionment of net
income pursuant to section 290.191 or 290.20, there must be
included only the income and apportionment factors of domestic
corporations or other domestic entities other than foreign
operating corporations that are determined to be part of the
unitary business pursuant to this subdivision, notwithstanding
that foreign corporations or other foreign entities might be
included in the unitary business.
(i) Deductions for expenses, interest, or taxes otherwise
allowable under this chapter that are connected with or
allocable against dividends, deemed dividends described in
paragraph (g), or royalties, fees, or other like income
described in section 290.01, subdivision 19d, clause (11), shall
not be disallowed.
(j) Each corporation or other entity, except a sole
proprietorship, that is part of a unitary business must file
combined reports as the commissioner determines. On the
reports, all intercompany transactions between entities included
pursuant to paragraph (h) must be eliminated and the entire net
income of the unitary business determined in accordance with
this subdivision is apportioned among the entities by using each
entity's Minnesota factors for apportionment purposes in the
numerators of the apportionment formula and the total factors
for apportionment purposes of all entities included pursuant to
paragraph (h) in the denominators of the apportionment formula.
(k) If a corporation has been divested from a unitary
business and is included in a combined report for a fractional
part of the common accounting period of the combined report:
(1) its income includable in the combined report is its
income incurred for that part of the year determined by
proration or separate accounting; and
(2) its sales, property, and payroll included in the
apportionment formula must be prorated or accounted for
separately.
Sec. 23. Minnesota Statutes 1998, section 290.17,
subdivision 6, is amended to read:
Subd. 6. [NONBUSINESS INCOME.] For a trade or business for
which allocation of income within and without this state is
required, if the taxpayer has any income not connected with the
trade or business carried on partly within and partly without
this state that income must be allocated under subdivision 2.
Intangible property is employed in a trade or business if the
owner of the property holds it as a means of furthering the
trade or business. Nonbusiness income is income of the trade or
business that cannot be apportioned by this state because of the
United States Constitution or the constitution of the state of
Minnesota and includes income that cannot constitutionally be
apportioned to this state because it is derived from a capital
transaction that solely serves an investment function.
Nonbusiness income must be allocated under subdivision 2.
Sec. 24. Minnesota Statutes 1998, section 290.191,
subdivision 2, is amended to read:
Subd. 2. [APPORTIONMENT FORMULA OF GENERAL APPLICATION.]
Except for those trades or businesses required to use a
different formula under subdivision 3 or section 290.35 or
290.36, and for those trades or businesses that receive
permission to use some other method under section 290.20 or
under subdivision 4, a trade or business required to apportion
its net income must apportion its income to this state on the
basis of the percentage obtained by taking the sum of:
(1) 70 75 percent of the percentage which the sales made
within this state in connection with the trade or business
during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period;
(2) 15 12.5 percent of the percentage which the total
tangible property used by the taxpayer in this state in
connection with the trade or business during the tax period is
of the total tangible property, wherever located, used by the
taxpayer in connection with the trade or business during the tax
period; and
(3) 15 12.5 percent of the percentage which the taxpayer's
total payrolls paid or incurred in this state or paid in respect
to labor performed in this state in connection with the trade or
business during the tax period are of the taxpayer's total
payrolls paid or incurred in connection with the trade or
business during the tax period.
Sec. 25. Minnesota Statutes 1998, section 290.191,
subdivision 3, is amended to read:
Subd. 3. [APPORTIONMENT FORMULA FOR FINANCIAL
INSTITUTIONS.] Except for an investment company required to
apportion its income under section 290.36, a financial
institution that is required to apportion its net income must
apportion its net income to this state on the basis of the
percentage obtained by taking the sum of:
(1) 70 75 percent of the percentage which the receipts from
within this state in connection with the trade or business
during the tax period are of the total receipts in connection
with the trade or business during the tax period, from wherever
derived;
(2) 15 12.5 percent of the percentage which the sum of the
total tangible property used by the taxpayer in this state and
the intangible property owned by the taxpayer and attributed to
this state in connection with the trade or business during the
tax period is of the sum of the total tangible property,
wherever located, used by the taxpayer and the intangible
property owned by the taxpayer and attributed to all states in
connection with the trade or business during the tax period; and
(3) 15 12.5 percent of the percentage which the taxpayer's
total payrolls paid or incurred in this state or paid in respect
to labor performed in this state in connection with the trade or
business during the tax period are of the taxpayer's total
payrolls paid or incurred in connection with the trade or
business during the tax period.
Sec. 26. Minnesota Statutes 1998, section 290.9725, is
amended to read:
290.9725 [S CORPORATION.]
For purposes of this chapter, the term "S corporation"
means any corporation having a valid election in effect for the
taxable year under section 1362 of the Internal Revenue Code,
except that a corporation which either:
(1) is a financial institution to which either section 585
or section 593 of the Internal Revenue Code applies; or
(2) has a wholly owned subsidiary as described in section
1361(b)(3)(B) of the Internal Revenue Code which is a financial
institution as described above
is not an "S" corporation for the purposes of this chapter. An
S corporation shall not be subject to the taxes imposed by this
chapter, except:
(1) the taxes imposed under sections 290.0922, 290.92,
290.9727, 290.9728, and 290.9729; and
(2) the tax under sections 290.06, subdivision 1, and
290.0921 apply to a financial institution to which either
section 585 or 593 of the Internal Revenue Code applies or that
has a wholly owned subsidiary as described in section
1361(b)(3)(B) of the Internal Revenue Code which is a financial
institution under section 585 or 593 of the Internal Revenue
Code.
Sec. 27. Minnesota Statutes 1998, section 290.9726, is
amended by adding a subdivision to read:
Subd. 7. [FINANCIAL INSTITUTIONS.] An S corporation that
is subject to the tax under section 290.9725, clause (2), must
report to each shareholder an apportionment of the S
corporation's tax obligation for the taxable year for purposes
of the credit under section 290.06, subdivision 26. The
apportionment to a shareholder must be made in proportion to the
amount of taxable income of the S corporation apportioned to the
shareholder.
Sec. 28. Minnesota Statutes 1998, 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;
(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; or
(f) holocaust settlement payments as defined in section
290.01, subdivision 32.
(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. 29. [NONBUSINESS INCOME; PRE-1999 TAX YEARS.]
If all items of income, gain, or loss are reported by a
taxpayer as business income or loss on an original or amended
return for a tax year to which this section applies, the
commissioner of revenue shall not adjust the tax liability for
that tax year, or for any other tax year affected by a carryover
from that tax year, by treating any of the items as nonbusiness
income or loss under Minnesota Statutes, section 290.17,
subdivision 6. Any adjustment treating an item as nonbusiness
income or loss ordered by the commissioner before the effective
date of this section must be reversed if the order is subject to
administrative or judicial challenge on the effective date and
such a challenge is timely filed. The reporting of any item as
nonbusiness income, gain, or loss does not preclude the
application of this section if the taxpayer may not
constitutionally be required to treat the item as business
income, gain, or loss.
Sec. 30. [BANK S CORPORATION SHAREHOLDERS; ALTERNATIVE
MINIMUM TAX.]
For taxable years beginning after December 31, 1997, and
before January 1, 1999, a taxpayer is allowed a deduction in
computing alternative minimum taxable income under Minnesota
Statutes 1998, section 290.091, subdivision 2, paragraph (a),
equal to the amount of the subtraction under Minnesota Statutes
1998, section 290.01, subdivision 19b, clause (13).
Sec. 31. [APPROPRIATION.]
(a) $100,000 is appropriated from the general fund to the
commissioner of revenue to make grants to one or more nonprofit
organizations, qualifying under section 501(c)(3) of the
Internal Revenue Code of 1986, to coordinate, facilitate,
encourage, and aid in the provision of taxpayer assistance
services. In making grants under this appropriation, the
commissioner shall give preference to organizations that will
use the grants to attract new and train new and existing
volunteers to provide taxpayer assistance. This appropriation
is available for fiscal years 2000 and 2001 and does not become
a part of the base.
(b) "Taxpayer assistance services" means accounting and tax
preparation services provided by volunteers to low-income and
disadvantaged Minnesota residents to help them file federal and
state income tax returns and Minnesota property tax refund
claims and to provide personal representation before the
department of revenue and the Internal Revenue Service.
Sec. 32. [EFFECTIVE DATE.]
(a) Section 1 applies to claims written off after June 30,
1999.
(b) Section 2 is intended to clarify rather than to change
the definition of resident and is effective for all
examinations, claims for refund, administrative appeals, and
court proceedings that are pending or begin on or after the day
following final enactment.
(c) Except as otherwise provided, sections 3 to 5, 7 to 11,
13 to 18, 21, 22, the changes to clauses (b), (c), and (j), 23,
and 26 to 28 are effective for tax years beginning after
December 31, 1998. The provisions substituting qualifying child
for dependent in sections 4 and 13 are effective for taxable
years beginning after December 31, 1999.
(d) Section 4, clause (4), and section 6 are effective for
taxable years beginning after December 31, 1999.
(e) Section 12, clause (g), is effective for tax years
beginning after December 31, 1997. The rest of section 12 is
effective for taxable years beginning after December 31, 1998.
(f) Sections 19, 20, and 22, the changes to clause (a), are
effective for tax years beginning on or after the day following
final enactment.
(g) Sections 24 and 25 are effective for taxable years
beginning after December 31, 2000.
(h) Section 29 is effective on the day after final
enactment and applies to tax years beginning before January 1,
1999.
(i) Section 30 is effective for tax years after December
31, 1997, and beginning before January 1, 1999.
(j) Section 31 is effective the day following final
enactment.
ARTICLE 3
FEDERAL UPDATE
Section 1. Minnesota Statutes 1998, 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, 1997 1998.
Sec. 2. Minnesota Statutes 1998, 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(g) 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, 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, and the provisions of section
4004 of the Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999, Public Law Number 105-277 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, 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, 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, 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, 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, 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, the provisions of section 6010
of the Internal Revenue Service Restructuring and Reform Act of
1998, Public Law Number 105-206, and the provisions of section
4003 of the Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999, Public Law Number 105-277, 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, the provisions of sections 6004, 6005, 6012, 6013, 6015,
6016, 7002, and 7003 of the Internal Revenue Service
Restructuring and Reform Act of 1998, Public Law Number 105-206,
and the provisions of section 3001 of the Omnibus Consolidated
and Emergency Supplemental Appropriations Act, 1999, Public Law
Number 105-277, 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.
The provisions of sections 5002, 6009, 6011, and 7001 of
the Internal Revenue Service Restructuring and Reform Act of
1998, Public Law Number 105-206, the provisions of section 9010
of the Transportation Equity Act for the 21st Century, Public
Law Number 105-178, the provisions of sections 1004, 4002, and
5301 of the Omnibus Consolidation and Emergency Supplemental
Appropriations Act, 1999, Public Law Number 105-277, and the
provision of section 303 of the Ricky Ray Hemophilia Relief Fund
Act of 1998, Public Law Number 105-369, shall become effective
at the time they become effective for federal purposes.
The Internal Revenue Code of 1986, as amended through
December 31, 1998, shall be in effect for taxable years
beginning after December 31, 1998.
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 1998, 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
124D.42 for volunteer service under United States Code, title
42, section 5011(d), as amended;
(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 an "S" corporation for state tax purposes under
section 290.9725.
Sec. 4. Minnesota Statutes 1998, 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, 1997 1998.
Sec. 5. Minnesota Statutes 1998, 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, 1997 1998.
Sec. 6. Minnesota Statutes 1998, 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,
1997 1998.
Sec. 7. [EFFECTIVE DATES.]
Sections 1, 4, 5, and 6 are effective at the same time
federal changes made by the Internal Revenue Service
Restructuring and Reform Act of 1998, Public Law Number 105-206
and the Omnibus Consolidation and Emergency Supplemental
Appropriations Act, 1999, Public Law Number 105-277 which are
incorporated into Minnesota Statutes, chapters 289A, 290, 290A,
and 291 by these sections become effective for federal tax
purposes. Section 3 is effective for tax years beginning after
December 31, 1998.
ARTICLE 4
SALES AND USE TAXES
Section 1. Minnesota Statutes 1998, section 289A.18,
subdivision 4, is amended to read:
Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use
tax returns must be filed on or before the 20th day of the month
following the close of the preceding reporting period, except
that annual use tax returns provided for under section 289A.11,
subdivision 1, must be filed by April 15 following the close of
the calendar year, in the case of individuals. Annual use tax
returns of businesses, including sole proprietorships, and
annual sales tax returns must be filed by February 5 following
the close of the calendar year.
(b) Except for the return for the June reporting period,
which is due on the following August 25, returns filed by
retailers required to remit liabilities by means of funds
transfer under section 289A.20, subdivision 4, paragraph (d),
are due on or before the 25th day of the month following the
close of the preceding reporting period.
(c) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $500 per month in any
quarter of a calendar year, and has substantially complied with
the tax laws during the preceding four calendar quarters, the
retailer may request authorization to file and pay the taxes
quarterly in subsequent calendar quarters. The authorization
remains in effect during the period in which the retailer's
quarterly returns reflect sales and use tax liabilities of less
than $1,500 and there is continued compliance with state tax
laws.
(d) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $100 per month during a
calendar year, and has substantially complied with the tax laws
during that period, the retailer may request authorization to
file and pay the taxes annually in subsequent years. The
authorization remains in effect during the period in which the
retailer's annual returns reflect sales and use tax liabilities
of less than $1,200 and there is continued compliance with state
tax laws.
(e) The commissioner may also grant quarterly or annual
filing and payment authorizations to retailers if the
commissioner concludes that the retailers' future tax
liabilities will be less than the monthly totals identified in
paragraphs (c) and (d). An authorization granted under this
paragraph is subject to the same conditions as an authorization
granted under paragraphs (c) and (d).
(f) A taxpayer who is a materials supplier may report gross
receipts either on:
(1) the cash basis as the consideration is received; or
(2) the accrual basis as sales are made.
As used in this paragraph, "materials supplier" means a person
who provides materials for the improvement of real property; who
is primarily engaged in the sale of lumber and building
materials-related products to owners, contractors,
subcontractors, repairers, or consumers; who is authorized to
file a mechanics lien upon real property and improvements under
chapter 514; and who files with the commissioner an election to
file sales and use tax returns on the basis of this paragraph.
Sec. 2. Minnesota Statutes 1998, section 289A.20,
subdivision 4, is amended to read:
Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by
chapter 297A are due and payable to the commissioner monthly on
or before the 20th day of the month following the month in which
the taxable event occurred, or following another reporting
period as the commissioner prescribes or as allowed under
section 289A.18, subdivision 4, paragraph (f), except that use
taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the
close of the calendar year.
(b) A vendor having a liability of $120,000 or more during
a fiscal year ending June 30 must remit the June liability for
the next year in the following manner:
(1) Two business days before June 30 of the year, the
vendor must remit 75 percent of the estimated June liability to
the commissioner.
(2) On or before August 14 of the year, the vendor must pay
any additional amount of tax not remitted in June.
(c) A vendor 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 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 14th day of the month following the month in which
the taxable event occurred, or on or before the 14th day of the
month following the month in which the sale is reported under
section 289A.18, subdivision 4, except for 75 percent of the
estimated June liability, which is due two business days before
June 30. The remaining amount of the June liability is due on
August 14. 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) If the vendor required to remit by electronic funds
transfer as provided in paragraph (c) is unable due to
reasonable cause to determine the actual sales and use tax due
on or before the due date for payment, the vendor may remit an
estimate of the tax owed using one of the following options:
(1) 100 percent of the tax reported on the previous month's
sales and use tax return;
(2) 100 percent of the tax reported on the sales and use
tax return for the same month in the previous calendar year; or
(3) 95 percent of the actual tax due.
Any additional amount of tax that is not remitted on or
before the due date for payment, must be remitted with the
return. If a vendor fails to remit the actual liability or does
not remit using one of the estimate options by the due date for
payment, the vendor must remit actual liability as provided in
paragraph (c) in all subsequent periods. This paragraph does
not apply to the June sales and use tax liability.
Sec. 3. Minnesota Statutes 1998, section 289A.56,
subdivision 4, is amended to read:
Subd. 4. [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO
PURCHASERS.] Notwithstanding subdivision 3, for refunds payable
under section 297A.15, subdivision 5, interest is computed from
the date the refund claim is filed with the commissioner. For
refunds payable under section 289A.50, subdivision 2a, interest
is computed from the 20th day of the month following the month
of the invoice date for the purchase which is the subject of the
refund, if the refund claim includes a detailed schedule of
purchases made during each of the periods in the claim. If the
refund claim submitted does not contain a schedule reflecting
purchases made in each period, interest is computed from the
date the claim was filed.
Sec. 4. Minnesota Statutes 1998, 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. The following materials, tools, and equipment
used in metalcasting are exempt under this subdivision:
crucibles, thermocouple protection sheaths and tubes, stalk
tubes, refractory materials, molten metal filters and filter
boxes, and degassing lances. 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. 5. Minnesota Statutes 1998, section 297A.25,
subdivision 63, is amended to read:
Subd. 63. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a)
The gross receipts from the sale of tangible personal property
to, and the storage, use, or consumption of such property by, a
hospital are exempt, if the property purchased is to be used in
providing hospital services to human beings. For purposes of
this subdivision, "hospital" means a hospital organized and
operated for charitable purposes within the meaning of section
501(c)(3) of the Internal Revenue Code of 1986, as amended, and
licensed under chapter 144 or by any other jurisdiction. For
purposes of this subdivision, "hospital services" are means
services authorized or required to be performed by
a "hospital" hospital under chapter 144 and regulations rules
thereunder or under the applicable licensure law of any other
jurisdiction. This exemption does
(b) The gross receipts from the sale of tangible personal
property to, and the storage, use, or consumption of such
property by, an outpatient surgical center are exempt, if the
property purchased is to be used in providing outpatient
surgical services to human beings. For purposes of this
subdivision, "outpatient surgical center" means an outpatient
surgical center organized and operated for charitable purposes
within the meaning of section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, and licensed under chapter 144 or by
any other jurisdiction. For the purposes of this subdivision,
"outpatient surgical services" means: (1) services authorized
or required to be performed by an outpatient surgical center
under chapter 144 and rules thereunder or under the applicable
licensure law of any other jurisdiction; and (2) urgent care.
For purposes of this subdivision, "urgent care" means health
services furnished to a person whose medical condition is
sufficiently acute to require treatment unavailable through, or
inappropriate to be provided by, a clinic or physician's office,
but not so acute as to require treatment in a hospital emergency
room.
(c) These exemptions do not apply to purchases made by a
clinic, physician's office, or any other medical facility not
operating as a hospital or outpatient surgical center, even
though the clinic, office, or facility may be owned and operated
by a hospital or outpatient surgical center. Sales exempted by
this subdivision do not include sales under section 297A.01,
subdivision 3, paragraphs (c) and (e). This exemption
does These exemptions do not apply to building, construction, or
reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type
of contract with a guaranteed maximum price covering both labor
and materials for use in the construction, alteration, or repair
of a hospital or outpatient surgical center. This exemption
does These exemptions do not apply to construction materials to
be used in constructing buildings or facilities which will not
be used principally by a hospital or outpatient surgical
center. This exemption does These exemptions do not apply to
the leasing of a motor vehicle as defined in section 297B.01,
subdivision 5.
Sec. 6. Minnesota Statutes 1998, section 297A.25,
subdivision 73, is amended to read:
Subd. 73. [BIOSOLIDS PROCESSING EQUIPMENT.] (a) 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.
(b) The gross receipts from the sale of and the storage,
use, or consumption of materials used to construct buildings to
house the equipment in paragraph (a) are exempt if purchased
after June 30, 1998, and before July 1, 2001.
Sec. 7. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 79. [PRIZES.] The gross receipts from the sales of
tangible personal property which will be given as prizes to
players in games of skill or chance conducted at events such as
community festivals, fairs, and carnivals lasting less than six
days are exempt. This exemption shall not apply to property
awarded as prizes in connection with lawful gambling as defined
in section 349.12 or the state lottery.
Sec. 8. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 80. [CONSTRUCTION MATERIALS AND SUPPLIES;
AGRICULTURAL PROCESSING FACILITY.] Purchases of construction
materials, supplies, and equipment 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, and
the equipment is incorporated into, the expansion, remodeling,
or improvement of a facility used for cattle slaughtering;
(2) the cost of the project is expected to exceed
$15,000,000;
(3) the expansion, remodeling, or improvement of the
facility will be used to fabricate beef;
(4) the number of jobs at the facility are expected to
increase by at least 150 when the project is completed; and
(5) the project is expected to be completed by December 31,
2001.
Sec. 9. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 82. [TELEVISION COMMERCIALS.] The gross receipts
from the sale of and storage, use, or consumption of tangible
personal property which is primarily used or consumed in the
preproduction, production, or postproduction of any television
commercial and any such commercial, regardless of the medium in
which it is transferred, are exempt. "Preproduction" and
"production" include but are not limited to all activities
related to the preparation for shooting and the shooting of
television commercials, including film processing. Equipment
rented for the preproduction and production activities is
exempt. "Postproduction" includes but is not limited to all
activities related to the finishing and duplication of
television commercials. This exemption does not apply to
tangible personal property used primarily in administration,
general management, or marketing. Machinery and equipment
purchased for use in producing such commercials and fuel,
electricity, gas, or steam used for space heating or lighting
are not exempt under this subdivision.
Sec. 10. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 83. [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS
ELECTRICAL GENERATING FACILITY.] The gross receipts from the
purchases of materials and supplies used or consumed in, and
equipment incorporated into, the construction, improvement, or
expansion of a facility using biomass to generate electricity
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 facility exclusively utilizes residue wood,
sawdust, bark, chipped wood, or brush to generate electricity;
(2) the facility utilizes a reciprocated grate combination
system; and
(3) the total gross capacity of the facility is 15 to 21
megawatts.
Sec. 11. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 84. [WASTE MANAGEMENT CONTAINERS AND
COMPACTORS.] The gross receipts from the sale of and storage,
use, or consumption of compactors and waste collection
containers are exempt from the sales and use taxes imposed under
this chapter provided that they are purchased by a waste
management service provider, and are used in providing waste
management services as defined in section 297H.01, subdivision
12. A waste management service provider that does not remit tax
on customer charges or lease or rental payments for compactors
and waste collection containers under chapter 297H is ineligible
for this exemption.
Sec. 12. Minnesota Statutes 1998, section 297A.48, is
amended by adding a subdivision to read:
Subd. 1a. [RULES FOR ADOPTION, USE, TERMINATION.] (a)
Imposition of a local sales tax is subject to approval by voters
of the political subdivision at a general election.
(b) The proceeds of the tax must be dedicated exclusively
to payment of the cost of a specific capital improvement which
is designated at least 90 days before the referendum on
imposition of the tax is conducted.
(c) The tax must terminate after the improvement designated
under paragraph (b) has been completed.
(d) After a sales tax imposed by a political subdivision
has expired or been terminated, the political subdivision is
prohibited from imposing a local sales tax for a period of one
year. Notwithstanding subdivision 10, this paragraph applies to
all local sales taxes in effect at the time of or imposed after
the date of enactment of this section.
Sec. 13. Minnesota Statutes 1998, section 297A.48, is
amended by adding a subdivision to read:
Subd. 7a. [USE OF ZIP CODE IN DETERMINING LOCATION OF
SALE.] To determine whether to impose the local tax, the
retailer may use zip codes if the zip code area is entirely
within the political subdivision. When a zip code area is not
entirely within a political subdivision, the retailer shall not
collect the local tax if the purchaser notified the retailer
that their delivery address is outside of the political
subdivision, unless the retailer verifies that the delivery
address is in the political subdivision using a means other than
the zip code. Notwithstanding subdivision 10, this subdivision
applies to all local sales taxes without regard to the date of
authorization.
Sec. 14. Laws 1998, chapter 389, article 8, section 44,
subdivision 5, is amended to read:
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).
(c) If start of the Central Minnesota Events Center under
paragraph (a) is delayed, the cities may still impose the tax,
and use a portion of the revenue to fund the projects under
paragraph (b), provided that revenues are reserved to pay future
costs of the construction of the events center in paragraph (a)
as provided by a joint powers agreement or by a governing entity
in charge of administering the project. If a decision is made
not to proceed with the event center under paragraph (a) or
construction of the event center has not begun by December 31,
2007, the funds in the reserve account shall be distributed to
the cities based on the joint powers agreement to pay for other
projects permitted under paragraph (b). All revenues raised
from these taxes after December 31, 2008, must be used
exclusively to pay off bonds for the event center project under
paragraph (a) and to pay off bonds issued under subdivision 6.
Sec. 15. Laws 1998, chapter 389, article 8, section 44,
subdivision 6, is amended to read:
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
for the Central Minnesota Events Center, 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.
(e) The cities named in subdivision 1 may issue bonds for
the projects listed in subdivision 5, paragraph (b), under
regular bonding authority. Bonds for these projects, to be paid
from tax revenues under this section, may not be issued after
December 31, 2008.
Sec. 16. Laws 1998, chapter 389, article 8, section 44,
subdivision 7, as amended by Laws 1998, chapter 408, section 20,
is amended to read:
Subd. 7. [TERMINATION OF TAXES.] The taxes imposed by each
city under subdivisions 1 to 4 expire at the earlier of 30 years
or when sufficient funds have been received from the taxes to
finance the obligations under subdivisions 5, paragraph (a), and
6, 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 1 determine that the revenues raised from the sum
of all the taxes authorized by referendum under this subdivision
section will not be sufficient to fund the project in
subdivision 5, paragraph (a), none of the authorized taxes may
be imposed.
If the taxes are imposed, as allowed under subdivision 5,
paragraph (c), and the cities determine at a later date that
there are not sufficient funds to fund the Central Minnesota
Events Center under subdivision 5, paragraph (a), or the funding
for the event center has not been determined by December 31,
2008, the taxes will be terminated as soon as sufficient
revenues are raised to prepay or retire at maturity the
principal, interest, and premium due on bonds issued under
subdivision 6, paragraph (e).
Sec. 17. [CITY OF NEW ULM; 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 the first municipal general election held after the date of
final enactment of this act, the city of New Ulm 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 New Ulm 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 all ages, including 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, funding facilities
replacement reserves, 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 subdivision that may be paid with these
taxes are limited to $9,000,000, plus an amount equal to the
costs related to issuance of the bonds and funding facilities
replacement reserves.
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, sections 275.60 and 275.61.
(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 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 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 New
Ulm with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 18. [CITY OF PROCTOR; TAXES AUTHORIZED.]
Subdivision 1. [SALES AND USE TAX.] Notwithstanding
Minnesota Statutes, section 297A.48, subdivision 1a, 477A.016,
or any other provision of law, ordinance, or city charter, if
approved by the city voters at the first municipal general
election held after the date of final enactment of this act or
at a special election held November 2, 1999, the city of Proctor
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 Proctor 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 the following city facilities:
(1) streets; and
(2) constructing and equipping the Proctor community
activity center.
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, including lease
obligations, issued to finance the construction, expansion, or
improvement of an authorized facility. The capital expenses for
all projects authorized under this paragraph that may be paid
with these taxes is limited to $3,600,000, 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 described in subdivision
3. An election to approve the bonds under Minnesota Statutes,
section 475.58, is not required.
(b) The issuance of bonds under this subdivision is not
subject to Minnesota Statutes, sections 275.60 and 279.61.
(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.
(d) The aggregate principal amount of bonds, plus the
aggregate of the taxes used directly to pay eligible capital
expenditures and improvements, may not exceed $3,600,000, plus
an amount equal to the costs related to issuance of the bonds,
including interest on the bonds.
(e) The sales and use and excise taxes authorized in this
section 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 the amount described in subdivision 4, paragraph (d), has
been received from the taxes to finance the capital and
administrative costs for the acquisition, construction,
expansion, and improvement of facilities described in
subdivision 3, plus the additional amount needed to pay the
costs related to issuance of bonds 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
Proctor with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 19. [EFFECTIVE DATES.]
Sections 1, 2, 5, 7, 9, and 11 are effective for sales and
purchases made after June 30, 1999.
Section 3 is effective for amended returns and refund
claims filed on or after July 1, 1999.
Section 4 is effective the day following final enactment
and applies retroactively to all open tax years and to
assessments and appeals under Minnesota Statutes, sections
289A.38 and 289A.65, for which the time limits have not expired
on the date of final enactment of this act. The provisions of
Minnesota Statutes, section 289A.50, apply to refunds claimed
under section 4. Refunds claimed under section 4 must be filed
by the later of December 31, 1999, or the time limit under
Minnesota Statutes, section 289A.40, subdivision 1.
Section 6 is effective retroactively for sales and
purchases made after June 30, 1998.
Section 8 is effective for purchases and sales made after
the date of final enactment.
Section 10 is effective for purchases made after the date
of final enactment and before July 1, 2001.
Section 12 is effective the day after final enactment.
Section 12, paragraphs (a) to (c), apply to all local sales
taxes enacted after July 1, 1999. Section 12, paragraph (d),
applies to all local sales taxes in effect at the time of, or
imposed after the day of, the enactment of this section.
Section 13 is effective the day following final enactment.
ARTICLE 5
PROPERTY TAXES
Section 1. Minnesota Statutes 1998, section 271.01,
subdivision 5, is amended to read:
Subd. 5. [JURISDICTION.] The tax court shall have
statewide jurisdiction. Except for an appeal to the supreme
court or any other appeal allowed under this subdivision, the
tax court shall be the sole, exclusive, and final authority for
the hearing and determination of all questions of law and fact
arising under the tax laws of the state, as defined in this
subdivision, in those cases that have been appealed to the tax
court and in any case that has been transferred by the district
court to the tax court. The tax court shall have no
jurisdiction in any case that does not arise under the tax laws
of the state or in any criminal case or in any case determining
or granting title to real property or in any case that is under
the probate jurisdiction of the district court. The small
claims division of the tax court shall have no jurisdiction in
any case dealing with property valuation or assessment for
property tax purposes until the taxpayer has appealed the
valuation or assessment to the county board of equalization, and
in those towns and cities which have not transferred their
duties to the county, the town or city board of equalization,
except for: (i) those taxpayers whose original assessments are
determined by the commissioner of revenue; and (ii) those
taxpayers appealing a denial of a current year application for
the homestead classification for their property and the denial
was not reflected on a valuation notice issued in the year. The
tax court shall have no jurisdiction in any case involving an
order of the state board of equalization unless a taxpayer
contests the valuation of property. Laws governing taxes, aids,
and related matters administered by the commissioner of revenue,
laws dealing with property valuation, assessment or taxation of
property for property tax purposes, and any other laws that
contain provisions authorizing review of taxes, aids, and
related matters by the tax court shall be considered tax laws of
this state subject to the jurisdiction of the tax court. This
subdivision shall not be construed to prevent an appeal, as
provided by law, to an administrative agency, board of
equalization, review under section 274.13, subdivision 1c, or to
the commissioner of revenue. Wherever used in this chapter, the
term commissioner shall mean the commissioner of revenue, unless
otherwise specified.
Sec. 2. Minnesota Statutes 1998, section 271.21,
subdivision 2, is amended to read:
Subd. 2. [JURISDICTION.] At the election of the taxpayer,
the small claims division shall have jurisdiction only in the
following matters:
(a) in cases involving valuation, assessment, or taxation
of real or personal property, if the taxpayer has satisfied the
requirements of section 271.01, subdivision 5, and: (i) the
issue is a denial of a current year application for the
homestead classification for the taxpayer's property and the
denial was not reflected on a valuation notice issued in the
year; or (ii) in the case of nonhomestead property, the
assessor's estimated market value is less than $100,000; or
(b) any other case concerning the tax laws as defined in
section 271.01, subdivision 5, in which the amount in
controversy does not exceed $5,000, including penalty and
interest.
Sec. 3. Minnesota Statutes 1998, section 272.02,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPT PROPERTY DESCRIBED.] 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 (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 item (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.
(32) Notwithstanding clause (8), item (a), attached
machinery and other personal property which is part of a
simple-cycle combustion-turbine electric generation facility
that exceeds 250 megawatts of installed capacity and that meets
the requirements of this clause. At the time of construction,
the facility must:
(i) not be owned by a public utility as defined in section
216B.02, subdivision 4;
(ii) utilize natural gas as a primary fuel;
(iii) be located within 20 miles of the intersection of an
existing 42-inch (outside diameter) natural gas pipeline and a
345-kilovolt high-voltage electric transmission line; and
(iv) be designed to provide peaking, emergency backup, or
contingency services, and have received a certificate of need
pursuant to section 216B.243 demonstrating demand for its
capacity.
Construction of the facility must be commenced after July 1,
1999, and before July 1, 2003. Property eligible for this
exemption does not include electric transmission lines and
interconnections or gas pipelines and interconnections
appurtenant to the property or the facility.
Sec. 4. Minnesota Statutes 1998, section 272.027, is
amended to read:
272.027 [PERSONAL PROPERTY USED TO GENERATE ELECTRICITY FOR
PRODUCTION AND RESALE.]
Subdivision 1. [ELECTRICITY GENERATED TO PRODUCE GOODS AND
SERVICES.] Personal property used to generate electric power is
exempt from property taxation if the electric power is used to
manufacture or produce goods, products, or services, other than
electric power, by the owner of the electric generation
plant. Except as provided in subdivisions 2 and 3, the
exemption does not apply to property used to produce electric
power for sale to others and does not apply to real property.
In determining the value subject to tax, a proportionate share
of the value of the generating facilities, equal to the
proportion that the power sold to others bears to the total
generation of the plant, is subject to the general property tax
in the same manner as other property. Power generated in such a
plant and exchanged for an equivalent amount of power that is
used for the manufacture or production of goods, products, or
services other than electric power by the owner of the
generating plant is considered to be used by the owner of the
plant.
Subd. 2. [EXEMPTION FOR CUSTOMER OWNED PROPERTY
TRANSFERRED TO A UTILITY.] (a) Tools, implements, and machinery
of an electric generating facility are exempt if all the
following requirements are met:
(1) the electric generating facilities were operational and
met the requirements for exemption of personal property under
subdivision 1 on January 2, 1999; and
(2) the generating facility is sold to a Minnesota electric
utility.
(b) Any tools, implements, and machinery installed to
increase generation capacity are also exempt under this section
provided that the existing tools, implements, and machinery are
exempt under paragraph (a).
Subd. 3. [EXEMPTION ELECTRIC POWER PLANT PERSONAL
PROPERTY; TACONITE AND STEEL MILL.]
Tools, implements, and machinery of an electric generating
facility are exempt if all the following requirements are met:
(1) the electric generating facility, when completed, will
have a capacity of at least 450 megawatts;
(2) the electric generating facility is adjacent to a
taconite mine direct-reduction steel mill; and
(3) the electric generating facility supplied over 60
percent of its electricity generated in the prior year to the
adjacent direct-reduction plant and steel mill.
Sec. 5. Minnesota Statutes 1998, section 272.03,
subdivision 6, is amended to read:
Subd. 6. [TRACT, LOT, PARCEL, AND PIECE OR PARCEL.]
(a) "Tract," "lot," "parcel," and "piece or parcel" of land
means any contiguous quantity of land in the possession of,
owned by, or recorded as the property of, the same claimant or
person.
(b) Notwithstanding paragraph (a), property that is owned
by a utility, leased for residential or recreational uses for
terms of 20 years or longer, and separately valued by the
assessor, will be treated for property tax purposes as separate
parcels.
Sec. 6. Minnesota Statutes 1998, section 273.11,
subdivision 1a, is amended to read:
Subd. 1a. [LIMITED MARKET VALUE.] In the case of all
property classified as agricultural homestead or nonhomestead,
residential homestead or nonhomestead, or noncommercial seasonal
recreational residential, the assessor shall compare the value
with that determined in the preceding assessment. The amount of
the increase entered in the current assessment shall not exceed
the greater of (1) ten 8.5 percent of the value in the preceding
assessment, or (2) one-fourth 15 percent of the difference
between the current assessment and the preceding assessment.
This limitation shall not apply to increases in value due to
improvements. For purposes of this subdivision, the term
"assessment" means the value prior to any exclusion under
subdivision 16.
The provisions of this subdivision shall be in effect only
for assessment years 1993 through assessment year 2001.
For purposes of the assessment/sales ratio study conducted
under section 127A.48, and the computation of state aids paid
under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and
477A, market values and net tax capacities determined under this
subdivision and subdivision 16, shall be used.
Sec. 7. Minnesota Statutes 1998, section 273.11,
subdivision 16, is amended to read:
Subd. 16. [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.]
Improvements to homestead property made before January 2, 2003,
shall be fully or partially excluded from the value of the
property for assessment purposes provided that (1) the house is
at least 35 45 years old at the time of the improvement and (2)
either
(a) the assessor's estimated market value of the house on
January 2 of the current year is equal to or less than $150,000,
or $400,000.
(b) if the estimated market value of the house is over
$150,000 market value but is less than $300,000 on January 2 of
the current year, the property qualifies if
(i) it is located in a city or town in which 50 percent or
more of the owner-occupied housing units were constructed before
1960 based upon the 1990 federal census, and
(ii) the city or town's median family income based upon the
1990 federal census is less than the statewide median family
income based upon the 1990 federal census, or
(c) if the estimated market value of the house is $300,000
or more on January 2 of the current year, the property qualifies
if
(i) it is located in a city or town in which 45 percent or
more of the homes were constructed before 1940 based upon the
1990 federal census, and
(ii) it is located in a city or town in which 45 percent or
more of the housing units were rental based upon the 1990
federal census, and
(iii) the city or town's median value of owner-occupied
housing units based upon the 1990 federal census is less than
the statewide median value of owner-occupied housing units based
upon the 1990 federal census.
For purposes of determining this eligibility, "house" means
land and buildings.
The age of a residence is the number of years since the
original year of its construction. In the case of a residence
that is relocated, the relocation must be from a location within
the state and the only improvements eligible for exclusion under
this subdivision are (1) those for which building permits were
issued to the homeowner after the residence was relocated to its
present site, and (2) those undertaken during or after the year
the residence is initially occupied by the homeowner, excluding
any market value increase relating to basic improvements that
are necessary to install the residence on its foundation and
connect it to utilities at its present site. In the case of an
owner-occupied duplex or triplex, the improvement is eligible
regardless of which portion of the property was improved.
If the property lies in a jurisdiction which is subject to
a building permit process, a building permit must have been
issued prior to commencement of the improvement. Any
improvement The improvements for a single project or in any one
year must add at least $1,000 $5,000 to the value of the
property to be eligible for exclusion under this subdivision.
Only improvements to the structure which is the residence of the
qualifying homesteader or construction of or improvements to no
more than one two-car garage per residence qualify for the
provisions of this subdivision. If an improvement was begun
between January 2, 1992, and January 2, 1993, any value added
from that improvement for the January 1994 and subsequent
assessments shall qualify for exclusion under this subdivision
provided that a building permit was obtained for the improvement
between January 2, 1992, and January 2, 1993. Whenever a
building permit is issued for property currently classified as
homestead, the issuing jurisdiction shall notify the property
owner of the possibility of valuation exclusion under this
subdivision. The assessor shall require an application,
including documentation of the age of the house from the owner,
if unknown by the assessor. The application may be filed
subsequent to the date of the building permit provided that the
application must be filed within three years of the date the
building permit was issued for the improvement. If the property
lies in a jurisdiction which is not subject to a building permit
process, the application must be filed within three years of the
date the improvement was made. The assessor may require proof
from the taxpayer of the date the improvement was made.
Applications must be received prior to July 1 of any year in
order to be effective for taxes payable in the following year.
No exclusion for an improvement may be granted for an
improvement by a local board of review or county board of
equalization, and no abatement of the taxes for qualifying
improvements may be granted by the county board unless (1) a
building permit was issued prior to the commencement of the
improvement if the jurisdiction requires a building permit, and
(2) an application was completed.
The assessor shall note the qualifying value of each
improvement on the property's record, and the sum of those
amounts shall be subtracted from the value of the property in
each year for ten years after the improvement has been made, at
which time an amount equal to 20 percent of the qualifying value
shall be added back in each of the five subsequent assessment
years. After ten years the amount of the qualifying value shall
be added back as follows:
(1) 50 percent in the two subsequent assessment years if
the qualifying value is equal to or less than $10,000 market
value; or
(2) 20 percent in the five subsequent assessment years if
the qualifying value is greater than $10,000 market value.
If an application is filed after the first assessment date at
which an improvement could have been subject to the valuation
exclusion under this subdivision, the ten-year period during
which the value is subject to exclusion is reduced by the number
of years that have elapsed since the property would have
qualified initially. The valuation exclusion shall terminate
whenever (1) the property is sold, or (2) the property is
reclassified to a class which does not qualify for treatment
under this subdivision. Improvements made by an occupant who is
the purchaser of the property under a conditional purchase
contract do not qualify under this subdivision unless the seller
of the property is a governmental entity. The qualifying value
of the property shall be computed based upon the increase from
that structure's market value as of January 2 preceding the
acquisition of the property by the governmental entity.
The total qualifying value for a homestead may not exceed
$50,000. The total qualifying value for a homestead with a
house that is less than 70 years old may not exceed $25,000.
The term "qualifying value" means the increase in estimated
market value resulting from the improvement if the improvement
occurs when the house is at least 70 years old, or one-half of
the increase in estimated market value resulting from the
improvement otherwise. The $25,000 and $50,000 maximum
qualifying value under this subdivision may result from up to
three separate multiple improvements to the homestead. The
application shall state, in clear language, that If more than
three improvements are made to the qualifying property, a
taxpayer may choose which three improvements are eligible,
provided that after the taxpayer has made the choice and any
valuation attributable to those improvements has been excluded
from taxation, no further changes can be made by the taxpayer.
If 50 percent or more of the square footage of a structure
is voluntarily razed or removed, the valuation increase
attributable to any subsequent improvements to the remaining
structure does not qualify for the exclusion under this
subdivision. If a structure is unintentionally or accidentally
destroyed by a natural disaster, the property is eligible for an
exclusion under this subdivision provided that the structure was
not completely destroyed. The qualifying value on property
destroyed by a natural disaster shall be computed based upon the
increase from that structure's market value as determined on
January 2 of the year in which the disaster occurred. A
property receiving benefits under the homestead disaster
provisions under section 273.123 is not disqualified from
receiving an exclusion under this subdivision. If any
combination of improvements made to a structure after January 1,
1993, increases the size of the structure by 100 percent or
more, the valuation increase attributable to the portion of the
improvement that causes the structure's size to exceed 100
percent does not qualify for exclusion under this subdivision.
Sec. 8. Minnesota Statutes 1998, section 273.111, is
amended by adding a subdivision to read:
Subd. 15. [DISSECTED PARCELS; CONTINUED DEFERMENT.] Real
estate consisting of more than ten, but less than 15, acres
which has:
(1) been owned by the applicant or the applicant's parents
for at least 70 years;
(2) been dissected by two or more major parkways or
interstate highways; and
(3) qualified for the agricultural valuation and tax
deferment under this section through assessment year 1996, taxes
payable in 1997,
shall continue to qualify for treatment under this section until
the applicant's death or transfer or sale by the applicant of
the applicant's interest in the real estate. When the property
ceases to qualify for treatment under this section, the
recapture provisions of subdivision 9 will apply with respect to
the last ten years that the property has been valued and
assessed under this section.
Sec. 9. Minnesota Statutes 1998, section 273.124,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE.] (a) Residential real estate
that is occupied and used for the purposes of a homestead by its
owner, who must be a Minnesota resident, is a residential
homestead.
Agricultural land, as defined in section 273.13,
subdivision 23, that is occupied and used as a homestead by its
owner, who must be a Minnesota resident, is an agricultural
homestead.
Dates for establishment of a homestead and homestead
treatment provided to particular types of property are as
provided in this section.
Property of a trustee, beneficiary, or grantor of a trust
is not disqualified from receiving homestead benefits if the
homestead requirements under this chapter are satisfied.
The assessor shall require proof, as provided in
subdivision 13, of the facts upon which classification as a
homestead may be determined. Notwithstanding any other law, the
assessor may at any time require a homestead application to be
filed in order to verify that any property classified as a
homestead continues to be eligible for homestead status.
Notwithstanding any other law to the contrary, the department of
revenue may, upon request from an assessor, verify whether an
individual who is requesting or receiving homestead
classification has filed a Minnesota income tax return as a
resident for the most recent taxable year for which the
information is available.
When there is a name change or a transfer of homestead
property, the assessor may reclassify the property in the next
assessment unless a homestead application is filed to verify
that the property continues to qualify for homestead
classification.
(b) For purposes of this section, homestead property shall
include property which is used for purposes of the homestead but
is separated from the homestead by a road, street, lot,
waterway, or other similar intervening property. The term "used
for purposes of the homestead" shall include but not be limited
to uses for gardens, garages, or other outbuildings commonly
associated with a homestead, but shall not include vacant land
held primarily for future development. In order to receive
homestead treatment for the noncontiguous property, the owner
must use the property for the purposes of the homestead, and
must apply to the assessor, both by the deadlines given in
subdivision 9. After initial qualification for the homestead
treatment, additional applications for subsequent years are not
required.
(c) Residential real estate that is occupied and used for
purposes of a homestead by a relative of the owner is a
homestead but only to the extent of the homestead treatment that
would be provided if the related owner occupied the property.
For purposes of this paragraph and paragraph (g), "relative"
means a parent, stepparent, child, stepchild, grandparent,
grandchild, brother, sister, uncle, or aunt, nephew, or niece.
This relationship may be by blood or marriage. Property that
has been classified as seasonal recreational residential
property at any time during which it has been owned by the
current owner or spouse of the current owner will not be
reclassified as a homestead unless it is occupied as a homestead
by the owner; this prohibition also applies to property that, in
the absence of this paragraph, would have been classified as
seasonal recreational residential property at the time when the
residence was constructed. Neither the related occupant nor the
owner of the property may claim a property tax refund under
chapter 290A for a homestead occupied by a relative. In the
case of a residence located on agricultural land, only the
house, garage, and immediately surrounding one acre of land
shall be classified as a homestead under this paragraph, except
as provided in paragraph (d).
(d) Agricultural property that is occupied and used for
purposes of a homestead by a relative of the owner, is a
homestead, only to the extent of the homestead treatment that
would be provided if the related owner occupied the property,
and only if all of the following criteria are met:
(1) the relative who is occupying the agricultural property
is a son, daughter, father, or mother of the owner of the
agricultural property or a son or daughter of the spouse of the
owner of the agricultural property,
(2) the owner of the agricultural property must be a
Minnesota resident,
(3) the owner of the agricultural property must not receive
homestead treatment on any other agricultural property in
Minnesota, and
(4) the owner of the agricultural property is limited to
only one agricultural homestead per family under this paragraph.
Neither the related occupant nor the owner of the property
may claim a property tax refund under chapter 290A for a
homestead occupied by a relative qualifying under this
paragraph. For purposes of this paragraph, "agricultural
property" means the house, garage, other farm buildings and
structures, and agricultural land.
Application must be made to the assessor by the owner of
the agricultural property to receive homestead benefits under
this paragraph. The assessor may require the necessary proof
that the requirements under this paragraph have been met.
(e) In the case of property owned by a property owner who
is married, the assessor must not deny homestead treatment in
whole or in part if only one of the spouses occupies the
property and the other spouse is absent due to: (1) marriage
dissolution proceedings, (2) legal separation, (3) employment or
self-employment in another location, or (4) other personal
circumstances causing the spouses to live separately, not
including an intent to obtain two homestead classifications for
property tax purposes. To qualify under clause (3), the
spouse's place of employment or self-employment must be at least
50 miles distant from the other spouse's place of employment,
and the homesteads must be at least 50 miles distant from each
other. Homestead treatment, in whole or in part, shall not be
denied to the owner's spouse who previously occupied the
residence with the owner if the absence of the owner is due to
one of the exceptions provided in this paragraph.
(f) The assessor must not deny homestead treatment in whole
or in part if:
(1) in the case of a property owner who is not married, the
owner is absent due to residence in a nursing home or boarding
care facility and the property is not otherwise occupied; or
(2) in the case of a property owner who is married, the
owner or the owner's spouse or both are absent due to residence
in a nursing home or boarding care facility and the property is
not occupied or is occupied only by the owner's spouse.
(g) If an individual is purchasing property with the intent
of claiming it as a homestead and is required by the terms of
the financing agreement to have a relative shown on the deed as
a coowner, the assessor shall allow a full homestead
classification. This provision only applies to first-time
purchasers, whether married or single, or to a person who had
previously been married and is purchasing as a single individual
for the first time. The application for homestead benefits must
be on a form prescribed by the commissioner and must contain the
data necessary for the assessor to determine if full homestead
benefits are warranted.
(h) If residential or agricultural real estate is occupied
and used for purposes of a homestead by a child of a deceased
owner and the property is subject to jurisdiction of probate
court, the child shall receive relative homestead classification
under paragraph (c) or (d) to the same extent they would be
entitled to it if the owner was still living, until the probate
is completed. For purposes of this paragraph, "child" includes
a relationship by blood or by marriage.
Sec. 10. Minnesota Statutes 1998, section 273.124,
subdivision 7, is amended to read:
Subd. 7. [LEASED BUILDINGS OR LAND.] For purposes of class
1 determinations, homesteads include:
(a) buildings and appurtenances owned and used by the
occupant as a permanent residence which are located upon land
the title to which is vested in a person or entity other than
the occupant;
(b) all buildings and appurtenances located upon land owned
by the occupant and used for the purposes of a homestead
together with the land upon which they are located, if all of
the following criteria are met:
(1) the occupant is using the property as a permanent
residence;
(2) the occupant is paying the property taxes and any
special assessments levied against the property;
(3) the occupant has signed a lease which has an option to
purchase the buildings and appurtenances;
(4) the term of the lease is at least five years; and
(5) the occupant has made a down payment of at least $5,000
in cash if the property was purchased by means of a contract for
deed or subject to a mortgage.
(c) all buildings and appurtenances and the land upon which
they are located that are used for purposes of a homestead, if
all of the following criteria are met:
(1) the land is owned by a utility, which maintains
ownership of the land in order to facilitate compliance with the
terms of its hydroelectric project license from the federal
energy regulatory commission;
(2) the land is leased for a term of 20 years or more;
(3) the occupant is using the property as a permanent
residence; and
(4) the occupant is paying the property taxes and any
special assessments levied against the property.
Any taxpayer meeting all the requirements of this paragraph
must notify the county assessor, or the assessor who has the
powers of the county assessor pursuant to section 273.063, in
writing, as soon as possible after signing the lease agreement
and occupying the buildings as a homestead.
Sec. 11. Minnesota Statutes 1998, section 273.124,
subdivision 8, is amended to read:
Subd. 8. [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR
PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION OR
PARTNERSHIP.] (a) Each family farm corporation and each
partnership operating a family farm is entitled to class 1b
under section 273.13, subdivision 22, paragraph (b), or class 2a
assessment for one homestead occupied by a shareholder or
partner thereof who is residing on the land and actively engaged
in farming of the land owned by the corporation or partnership.
Homestead treatment applies even if legal title to the property
is in the name of the corporation or partnership and not in the
name of the person residing on it. "Family farm corporation"
and "family farm" have the meanings given in section 500.24,
except that the number of allowable shareholders or partners
under this subdivision shall not exceed 12.
(b) In addition to property specified in paragraph (a), any
other residences owned by corporations or partnerships described
in paragraph (a) which are located on agricultural land and
occupied as homesteads by shareholders or partners who are
actively engaged in farming on behalf of the corporation or
partnership must also be assessed as class 2a property or as
class 1b property under section 273.13, subdivision 22,
paragraph (b), but the property eligible is limited to the
residence itself and as much of the land surrounding the
homestead, not exceeding one acre, as is reasonably necessary
for the use of the dwelling as a home, and does not include any
other structures that may be located on it.
(c) Agricultural property owned by a shareholder of a
family farm corporation, as defined in paragraph (a), or by a
partner in a partnership operating a family farm and leased to
the family farm corporation by the shareholder or to the
partnership by the partner, is eligible for classification as
class 1b under section 273.13, subdivision 22, paragraph (b), or
class 2a under section 273.13, subdivision 23, paragraph (a), if
the owner is actually residing on the property and is actually
engaged in farming the land on behalf of the corporation or
partnership. This paragraph applies without regard to any legal
possession rights of the family farm corporation or partnership
operating a family farm under the lease.
Sec. 12. Minnesota Statutes 1998, section 273.124,
subdivision 13, is amended to read:
Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets
the homestead requirements under subdivision 1 must file a
homestead application with the county assessor to initially
obtain homestead classification.
(b) On or before January 2, 1993, each county assessor
shall mail a homestead application to the owner of each parcel
of property within the county which was classified as homestead
for the 1992 assessment year. The format and contents of a
uniform homestead application shall be prescribed by the
commissioner of revenue. The commissioner shall consult with
the chairs of the house and senate tax committees on the
contents of the homestead application form. The application
must clearly inform the taxpayer that this application must be
signed by all owners who occupy the property or by the
qualifying relative and returned to the county assessor in order
for the property to continue receiving homestead treatment. The
envelope containing the homestead application shall clearly
identify its contents and alert the taxpayer of its necessary
immediate response.
(c) Every property owner applying for homestead
classification must furnish to the county assessor the social
security number of each occupant who is listed as an owner of
the property on the deed of record, the name and address of each
owner who does not occupy the property, and the name and social
security number of each owner's spouse who occupies the
property. The application must be signed by each owner who
occupies the property and by each owner's spouse who occupies
the property, or, in the case of property that qualifies as a
homestead under subdivision 1, paragraph (c), by the qualifying
relative.
If a property owner occupies a homestead, the property
owner's spouse may not claim another property as a homestead
unless the property owner and the property owner's spouse file
with the assessor an affidavit or other proof required by the
assessor stating that the property qualifies as a homestead
under subdivision 1, paragraph (e).
Owners or spouses occupying residences owned by their
spouses and previously occupied with the other spouse, either of
whom fail to include the other spouse's name and social security
number on the homestead application or provide the affidavits or
other proof requested, will be deemed to have elected to receive
only partial homestead treatment of their residence. The
remainder of the residence will be classified as nonhomestead
residential. When an owner or spouse's name and social security
number appear on homestead applications for two separate
residences and only one application is signed, the owner or
spouse will be deemed to have elected to homestead the residence
for which the application was signed.
The social security numbers or affidavits or other proofs
of the property owners and spouses are private data on
individuals as defined by section 13.02, subdivision 12, but,
notwithstanding that section, the private data may be disclosed
to the commissioner of revenue, or, for purposes of proceeding
under the Revenue Recapture Act to recover personal property
taxes owing, to the county treasurer.
(d) If residential real estate is occupied and used for
purposes of a homestead by a relative of the owner and qualifies
for a homestead under subdivision 1, paragraph (c), in order for
the property to receive homestead status, a homestead
application must be filed with the assessor. The social
security number of each relative occupying the property and the
social security number of each owner who is related to an
occupant of the property shall be required on the homestead
application filed under this subdivision. If a different
relative of the owner subsequently occupies the property, the
owner of the property must notify the assessor within 30 days of
the change in occupancy. The social security number of a
relative occupying the property is private data on individuals
as defined by section 13.02, subdivision 12, but may be
disclosed to the commissioner of revenue.
(e) The homestead application shall also notify the
property owners that the application filed under this section
will not be mailed annually and that if the property is granted
homestead status for the 1993 assessment, or any assessment year
thereafter, that same property shall remain classified as
homestead until the property is sold or transferred to another
person, or the owners, the spouse of the owner, or the relatives
no longer use the property as their homestead. Upon the sale or
transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under
section 272.115. Failure to notify the assessor within 30 days
that the property has been sold, transferred, or that the owner,
the spouse of the owner, or the relative is no longer occupying
the property as a homestead, shall result in the penalty
provided under this subdivision and the property will lose its
current homestead status.
(f) If the homestead application is not returned within 30
days, the county will send a second application to the present
owners of record. The notice of proposed property taxes
prepared under section 275.065, subdivision 3, shall reflect the
property's classification. Beginning with assessment year 1993
for all properties, if a homestead application has not been
filed with the county by December 15, the assessor shall
classify the property as nonhomestead for the current assessment
year for taxes payable in the following year, provided that the
owner may be entitled to receive the homestead classification by
proper application under section 375.192.
(g) At the request of the commissioner, each county must
give the commissioner a list that includes the name and social
security number of each property owner and the property owner's
spouse occupying the property, or relative of a property owner,
applying for homestead classification under this subdivision.
The commissioner shall use the information provided on the lists
as appropriate under the law, including for the detection of
improper claims by owners, or relatives of owners, under chapter
290A.
(h) If the commissioner finds that a property owner may be
claiming a fraudulent homestead, the commissioner shall notify
the appropriate counties. Within 90 days of the notification,
the county assessor shall investigate to determine if the
homestead classification was properly claimed. If the property
owner does not qualify, the county assessor shall notify the
county auditor who will determine the amount of homestead
benefits that had been improperly allowed. For the purpose of
this section, "homestead benefits" means the tax reduction
resulting from the classification as a homestead under section
273.13, the taconite homestead credit under section 273.135, and
the supplemental homestead credit under section 273.1391.
The county auditor shall send a notice to the person who
owned the affected property at the time the homestead
application related to the improper homestead was filed,
demanding reimbursement of the homestead benefits plus a penalty
equal to 100 percent of the homestead benefits. The person
notified may appeal the county's determination by serving copies
of a petition for review with county officials as provided in
section 278.01 and filing proof of service as provided in
section 278.01 with the Minnesota tax court within 60 days of
the date of the notice from the county. Procedurally, the
appeal is governed by the provisions in chapter 271 which apply
to the appeal of a property tax assessment or levy, but without
requiring any prepayment of the amount in controversy. If the
amount of homestead benefits and penalty is not paid within 60
days, and if no appeal has been filed, the county auditor shall
certify the amount of taxes and penalty to the county
treasurer. The county treasurer will add interest to the unpaid
homestead benefits and penalty amounts at the rate provided in
section 279.03 for real property taxes becoming delinquent in
the calendar year during which the amount remains unpaid.
Interest may be assessed for the period beginning 60 days after
demand for payment was made.
If the person notified is the current owner of the
property, the treasurer may add the total amount of benefits,
penalty, interest, and costs to the ad valorem taxes otherwise
payable on the property by including the amounts on the property
tax statements under section 276.04, subdivision 3. The amounts
added under this paragraph to the ad valorem taxes shall include
interest accrued through December 31 of the year preceding the
taxes payable year for which the amounts are first added. These
amounts, when added to the property tax statement, become
subject to all the laws for the enforcement of real or personal
property taxes for that year, and for any subsequent year.
If the person notified is not the current owner of the
property, the treasurer may collect the amounts due under the
Revenue Recapture Act in chapter 270A, or use any of the powers
granted in sections 277.20 and 277.21 without exclusion, to
enforce payment of the benefits, penalty, interest, and costs,
as if those amounts were delinquent tax obligations of the
person who owned the property at the time the application
related to the improperly allowed homestead was filed. The
treasurer may relieve a prior owner of personal liability for
the benefits, penalty, interest, and costs, and instead extend
those amounts on the tax lists against the property as provided
in this paragraph to the extent that the current owner agrees in
writing. On all demands, billings, property tax statements, and
related correspondence, the county must list and state
separately the amounts of homestead benefits, penalty, interest
and costs being demanded, billed or assessed.
(i) Any amount of homestead benefits recovered by the
county from the property owner shall be distributed to the
county, city or town, and school district where the property is
located in the same proportion that each taxing district's levy
was to the total of the three taxing districts' levy for the
current year. Any amount recovered attributable to taconite
homestead credit shall be transmitted to the St. Louis county
auditor to be deposited in the taconite property tax relief
account. Any amount recovered that is attributable to
supplemental homestead credit is to be transmitted to the
commissioner of revenue for deposit in the general fund of the
state treasury. The total amount of penalty collected must be
deposited in the county general fund.
(j) If a property owner has applied for more than one
homestead and the county assessors cannot determine which
property should be classified as homestead, the county assessors
will refer the information to the commissioner. The
commissioner shall make the determination and notify the
counties within 60 days.
(k) In addition to lists of homestead properties, the
commissioner may ask the counties to furnish lists of all
properties and the record owners. The social security numbers
and federal identification numbers that are maintained by a
county or city assessor for property tax administration
purposes, and that may appear on the lists retain their
classification as private or nonpublic data; but may be viewed,
accessed, and used by the county auditor or treasurer of the
same county for the limited purpose of assisting the
commissioner in the preparation of microdata samples under
section 270.0681.
Sec. 13. Minnesota Statutes 1998, 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 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). Homestead classification under this
paragraph is limited to property that qualified under this
paragraph for the 1998 assessment.
(b) Agricultural property consisting of at least 40 acres
shall be classified homestead, to the same extent as other
agricultural homestead property, if all of the following
criteria are met:
(1) the owner is actively farming the agricultural
property;
(2) the owner of the agricultural property is a Minnesota
resident;
(3) neither the owner nor the spouse of the agricultural
property claims another agricultural homestead in Minnesota; and
(4) the owner does not live farther than four townships or
cities, or a combination of four townships or cities, from the
agricultural property.
(b) (c) Except as provided in paragraph (d) (e),
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 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) (d) 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) (e) 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 dwelling. 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.
(e) (f) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23,
paragraph (a), for the 1998 assessment shall remain classified
agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of damage
caused by a March 29, 1998, tornado;
(2) the property is located in the county of Blue Earth,
Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice;
(3) the agricultural land and buildings remain under the
same ownership for the current assessment year as existed for
the 1998 assessment year;
(4) the dwelling occupied by the owner is located in this
state and is within 50 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 a March 29, 1998, tornado, and the owner
furnishes the assessor any information deemed necessary by the
assessor in verifying the change in homestead dwelling. For
taxes payable in 1999, the owner must notify the assessor by
December 1, 1998. 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. 14. Minnesota Statutes 1998, section 273.124, is
amended by adding a subdivision to read:
Subd. 20. [ADDITIONAL REQUIREMENTS PROHIBITED.] No
political subdivision may impose any requirements not contained
in this chapter or chapter 272 to disqualify property from being
classified as a homestead if the property otherwise meets the
requirements for homestead treatment under this chapter and
chapter 272.
Sec. 15. Minnesota Statutes 1998, 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.
The first $75,000 $76,000 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 $76,000 has a class rate of 1.7 1.65 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 household income,
as defined in section 290A.03, subdivision 5, 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. 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 salable 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. 16. Minnesota Statutes 1998, 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 0.35 percent
of market value. The remaining value of class 2a property over
$115,000 of market value that does not exceed 320 acres up to
and including $600,000 market value has a net class rate of 0.8
percent of market value. The remaining property
over $115,000 $600,000 market value in excess of 320 acres has a
class rate of 1.25 1.20 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 1.25 1.20
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;
(6) insects primarily bred to be used as food for animals;
and
(7) trees, grown for sale as a crop, and not sold for
timber, lumber, wood, or wood products.
(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. 17. Minnesota Statutes 1998, 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 of real property has a class rate of 2.45 2.4
percent of the first tier of market value, and 3.5 3.4 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. Real property owned in fee by a utility for
transmission line right-of-way shall be classified at the class
rate for the higher tier. All personal property shall be
classified at the class rate for the higher tier. For purposes
of this subdivision "personal property" means 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.
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 3.5 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 rates for class 3b property are
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)(1) Subject to the limitations of clause (2), 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 to the lesser of 2.975 percent or 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. A class rate equal to 85
percent of the lesser of 2.975 percent or 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.
(2) This clause applies to any structure qualifying for the
transit zone reduced class rate under clause (1) on January 2,
1999, or any structure meeting any of the qualification criteria
in item (i) and otherwise qualifying for the transit zone
reduced class rate under clause (1). Such a structure continues
to receive the transit zone reduced class rate until the
occurrence of one of the events in item (ii). Property
qualifying under item (i)(D), that is located outside of a city
of the first class, qualifies for the transit zone reduced class
rate as provided in that item. Property qualifying under item
(i)(E) qualifies for the transit zone reduced class rate as
provided in that item.
(i) A structure qualifies for the rate in this clause if it
is:
(A) property for which a building permit was issued before
December 31, 1998; or
(B) 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) one of the following requirements is met:
the project proposer has submitted the completed data
portions of an environmental assessment worksheet by December
31, 1998; or
a notice of determination of adequacy of an environmental
impact statement has been published by April 1, 1999; or
an alternative urban areawide review has been completed by
April 1, 1999; or
(C) 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;
(D) property for which an irrevocable letter of credit with
a housing and redevelopment authority was signed before December
31, 1998. The structure shall receive the transit zone reduced
class rate during construction and for the duration of time that
the original tenants remain in the building. Any unoccupied net
leasable square footage that is not leased within 36 months
after the certificate of occupancy has been issued for the
building shall not be eligible to receive the reduced class
rate. This reduced class rate applies only if the entity that
constructed the structure continues to own the property;
(E) property, located in a city of the first class, and for
which the building permits for the excavation, the parking ramp,
and the office tower were issued prior to April 1, 1999, shall
receive the reduced class rate during construction and for the
first five assessment years immediately following its initial
occupancy provided that, when completed, at least 25 percent of
the net leasable square footage must be occupied by the entity
or the parent entity constructing the structure each year during
this time period. In order to receive the reduced class rate on
the structure in any subsequent assessment years, at least 50
percent of the rentable square footage must be occupied by the
entity or the parent entity that constructed the structure.
This reduced class rate applies only if the entity or the parent
entity that constructed the structure continues to own the
property.
(ii) A structure specified by this clause, other than a
structure qualifying under clause (i)(D) or (E), shall continue
to receive the transit zone reduced class rate until the
occurrence of one of the following events:
(A) if the structure upon initial occupancy will be owner
occupied by the entity initially constructing the structure or
an affiliated entity, the structure receives the reduced class
rate until the structure ceases to be at least 50 percent
occupied by the entity or an affiliated entity, provided, if the
portion of the structure occupied by that entity or an affiliate
of the entity is less than 85 percent, the transit zone class
rate reduction for the portion of structure not so occupied
terminates upon the leasing of such space to any nonaffiliated
entity; or
(B) if the structure is leased by a single entity or
affiliated entity at the time of initial occupancy, the
structure shall receive the reduced class rate until the
structure ceases to be at least 50 percent occupied by the
entity or an affiliated entity, provided, if the portion of the
structure occupied by that entity or an affiliate of the entity
is less than 85 percent, the transit zone class rate reduction
for the portion of structure not so occupied shall terminate
upon the leasing of such space to any nonaffiliated entity; or
(C) if the structure meets the criteria in item (i)(C), the
structure shall receive the reduced class rate until the
expiration of the initial lease term of the applicable tenants.
Percentages occupied or leased shall be determined based
upon net leasable square footage in the structure. The assessor
shall allocate the value of the structure in the same fashion as
provided in the general law for portions of any structure
receiving and not receiving the transit tax class reduction as a
result of this clause.
Sec. 18. Minnesota Statutes 1998, section 273.13, is
amended by adding a subdivision to read:
Subd. 24a. [TRANSIT ZONE PROPERTIES; PERSONAL PROPERTY
TAX.] (a) Notwithstanding the provisions of section 272.02 or
any other law to the contrary, a personal property tax is
imposed on the leasehold of a tenant of a structure described in
subdivision 24, paragraph (c), clause (2), item (i)(C).
(b) The tax equals the amount obtained by multiplying the
sum of the local tax rates by:
(1) the estimated market value of the structure multiplied
by
(2) the square footage of the structure under lease that
qualifies under subdivision 24, clause (c)(1), divided by
(3) the total square footage of the structure that
qualifies under subdivision 24, clause (c)(1), multiplied by
(4) the difference between the class rate under subdivision
24, paragraph (a), for the second tier and the class rate under
subdivision 24, paragraph (c), for the second tier for the
qualifying parts of a structure.
(c) The tax under this subdivision does not apply to a
lease that:
(1) was executed before May 1, 1999;
(2) was entered according to a binding written agreement
executed before May 1, 1999; or
(3) is a lease entered under an expansion option contained
in a lease or binding written agreement qualifying under clause
(1) or (2).
(d) The tax imposed under this subdivision is a personal
property tax and is imposed on the lessee or tenant and not on
the structure or the real property. The tax is an obligation of
the lessee or tenant and must be collected in the manner
provided for personal property taxes.
(e) The personal property tax applies only to a year in
which the leased structure qualifies for the transit zone class
rate.
Sec. 19. Minnesota Statutes 1998, section 273.13,
subdivision 25, is amended to read:
Subd. 25. [CLASS 4.] (a) Class 4a is residential real
estate containing four or more units and used or held for use by
the owner or by the tenants or lessees of the owner as a
residence for rental periods of 30 days or more. Class 4a also
includes hospitals licensed under sections 144.50 to 144.56,
other than hospitals exempt under section 272.02, and contiguous
property used for hospital purposes, without regard to whether
the property has been platted or subdivided. Class 4a property
in a city with a population of 5,000 or less, that is (1)
located outside of the metropolitan area, as defined in section
473.121, subdivision 2, or outside any county contiguous to the
metropolitan area, and (2) whose city boundary is at least 15
miles from the boundary of any city with a population greater
than 5,000 has a class rate of 2.15 percent of market value.
All other class 4a property has a class rate of 2.5 2.4 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 subdivision 33.
Class 4b property has a class rate of 1.7 1.65 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 1.25 1.2 percent on the
first $75,000 $76,000 of market value and a class rate of 1.7
1.65 percent of its market value that exceeds $75,000 $76,000.
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 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) 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
(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;
(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 1.8 1.65 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
1.25 percent, and the market value that exceeds $75,000 has a
class rate of 2.2 percent has the same class rates as class 4bb
property, (ii) manufactured home parks assessed under clause (5)
have a the same class rate of two percent as class 4b property,
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. 20. Minnesota Statutes 1998, 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) (2) all other property not otherwise classified.
Class 5 property has a class rate of 3.5 3.4 percent of
market value.
Sec. 21. Minnesota Statutes 1998, section 273.1382, is
amended to read:
273.1382 [EDUCATION HOMESTEAD CREDIT; EDUCATION
AGRICULTURAL CREDIT.]
Subdivision 1. [EDUCATION HOMESTEAD CREDIT TAX RATE.] Each
year, the respective county auditors shall determine the initial
tax rate for each school district for the general education levy
certified under section 126C.13, 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
Subd. 1a. [EDUCATION HOMESTEAD CREDIT.] Each county
auditor shall then determine a general education homestead
credit for each homestead within the county equal to 68 66.2
percent for taxes payable in 1999 and 69 83 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 $320
for taxes payable in 1999 and $335 $390 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.
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.
Subd. 1b. [EDUCATION AGRICULTURAL CREDIT.] Property
classified as class 2a agricultural homestead or class 2b
agricultural nonhomestead or timberland is eligible for
education agricultural credit. The credit is equal to 54
percent, in the case of agricultural homestead property, or 50
percent, in the case of agricultural nonhomestead property or
timberland, of the property's net tax capacity times the
education credit tax rate determined in subdivision 1. The net
tax capacity of class 2a property attributable to the house,
garage, and surrounding one acre of land is not eligible for the
credit under this subdivision.
Subd. 2. [CREDIT REIMBURSEMENTS.] (a) The commissioner of
revenue shall determine the tax reductions allowed under this
section for each taxes payable year, and for each school
district based upon a review of the abstracts of tax lists
submitted by the county auditors under section 275.29, and from
any other information which the commissioner deems relevant.
The commissioner of revenue shall generally compute the tax
reductions at the unique taxing jurisdiction level, however the
commissioner may compute the tax reductions at a higher
geographic level if that would have a negligible impact, or if
changes in the composition of unique taxing jurisdictions do not
permit computation at the unique taxing jurisdiction level. The
commissioner's determinations under this paragraph are not rules.
(b) The commissioner of revenue shall certify the total of
the tax reductions granted under this section for each taxes
payable year within each school district to the commissioner of
children, families, and learning after July 1 and on or before
August 1 of the taxes payable year. The commissioner of
children, families, and learning shall reimburse each affected
school district for the amount of the property tax reductions
allowed under this section as provided in section 273.1392. The
commissioner of children, families, and learning shall treat the
reimbursement payments as entitlements for the same state fiscal
year as certified, including with each district's initial
payment all amounts that would have been paid up to that date,
computed as if 90 percent of the annual reimbursement amount for
the district were being paid one-twelfth in each month of the
fiscal year.
Subd. 3. [APPROPRIATION.] An amount sufficient to make the
payments required by this section is annually appropriated from
the general fund to the commissioner of children, families, and
learning.
Sec. 22. Minnesota Statutes 1998, section 273.1398,
subdivision 1a, is amended to read:
Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in
2000, the tax base differential is:
(1) 0.45 percent of the assessment year 1998 taxable market
value of class 2a agricultural homestead property, excluding the
house, garage, and surrounding one acre of land, between
$115,000 and $600,000 and over 320 acres, minus the value over
$600,000 that is less than 320 acres; plus
(2) 0.5 percent of the assessment year 1998 taxable market
value of noncommercial seasonal recreational residential
property over $75,000 in value; plus
(3) for purposes of computing the fiscal disparity
adjustment only, the tax base differential is 0.2 percent of the
assessment year 1998 taxable market value of class 3
commercial-industrial property over $150,000.
(b) For the purposes of the distribution of homestead and
agricultural credit aid for aids payable in 2000, the
commissioner of revenue shall use the best information available
as of June 30, 1999, to make an estimate of the value described
in paragraph (a), clause (1). The commissioner shall adjust the
distribution of homestead and agricultural credit aid for aids
payable in 2001 and subsequent years if new information
regarding the value described in paragraph (a), clause (1),
becomes available after June 30, 1999.
Sec. 23. Minnesota Statutes 1998, section 273.1398,
subdivision 8, is amended to read:
Subd. 8. [APPROPRIATION.] (a) An amount sufficient to pay
the aids and credits provided under this section for school
districts, intermediate school districts, or any group of school
districts levying as a single taxing entity, is annually
appropriated from the general fund to the commissioner of
children, families, and learning. An amount sufficient to pay
the aids and credits provided under this section for counties,
cities, towns, and special taxing districts is annually
appropriated from the general fund to the commissioner of
revenue. A jurisdiction's aid amount may be increased or
decreased based on any prior year adjustments for homestead
credit or other property tax credit or aid programs.
(b) The commissioner of finance shall bill the commissioner
of revenue for the cost of preparation of local impact notes as
required by section 3.987 only to the extent to which those
costs exceed those costs incurred in fiscal year 1997 and for
any other new costs attributable to the local impact note
function required by section 3.987, not to exceed $100,000 in
fiscal year years 1998 and 1999 and $200,000 in fiscal year 1999
2000 and thereafter.
The commissioner of revenue shall deduct the amount billed
under this paragraph from aid payments to be made to cities and
counties under subdivision 2 on a pro rata basis. The amount
deducted under this paragraph is appropriated to the
commissioner of finance for the preparation of local impact
notes.
Sec. 24. Minnesota Statutes 1998, section 273.20, is
amended to read:
273.20 [ASSESSOR MAY ENTER DWELLINGS, BUILDINGS, OR
STRUCTURES.]
Any officer authorized by law to assess property for
taxation may, when necessary to the proper performance of
duties, enter any dwelling-house, building, or structure, and
view the same and the property therein.
Any officer authorized by law to assess property for ad
valorem tax purposes shall have reasonable access to land and
structures as necessary for the proper performance of their
duties. A property owner may refuse to allow an assessor to
inspect their property. This refusal by the property owner must
be either verbal or expressly stated in a letter to the county
assessor. If the assessor is denied access to view a property,
the assessor is authorized to estimate the property's estimated
market value by making assumptions believed appropriate
concerning the property's finish and condition.
Sec. 25. Minnesota Statutes 1998, section 274.01,
subdivision 1, is amended to read:
Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES,
GRIEVANCES.] (a) The town board of a town, or the council or
other governing body of a city, is the board of review except
(1) in cities whose charters provide for a board of equalization
or (2) in any city or town that has transferred its local board
of review power and duties to the county board as provided in
subdivision 3. The county assessor shall fix a day and time
when the board or the board of equalization shall meet in the
assessment districts of the county. On or before February 15 of
each year the assessor shall give written notice of the time to
the city or town clerk. Notwithstanding the provisions of any
charter to the contrary, the meetings must be held between April
1 and May 31 each year. The clerk shall give published and
posted notice of the meeting at least ten days before the date
of the meeting.
If in any county, at least 25 percent of the total net tax
capacity of a city or town is noncommercial seasonal residential
recreational property classified under section 273.13,
subdivision 25, the county must hold two countywide
informational meetings on Saturdays. The meetings will allow
noncommercial seasonal residential recreational taxpayers to
discuss their property valuation with the appropriate assessment
staff. These Saturday informational meetings must be scheduled
to allow the owner of the noncommercial seasonal residential
recreational property the opportunity to attend one of the
meetings prior to the scheduled board of review for their city
or town. The Saturday meeting dates must be contained on the
notice of valuation of real property under section 273.121.
The board shall meet at the office of the clerk to review
the assessment and classification of property in the town or
city. No changes in valuation or classification which are
intended to correct errors in judgment by the county assessor
may be made by the county assessor after the board of review has
adjourned in those cities or towns that hold a local board of
review; however, corrections of errors that are merely clerical
in nature or changes that extend homestead treatment to property
are permitted after adjournment until the tax extension date for
that assessment year. The changes must be fully documented and
maintained in the assessor's office and must be available for
review by any person. A copy of the changes made during this
period in those cities or towns that hold a local board of
review must be sent to the county board no later than December
31 of the assessment year.
(b) The board shall determine whether the taxable property
in the town or city has been properly placed on the list and
properly valued by the assessor. If real or personal property
has been omitted, the board shall place it on the list with its
market value, and correct the assessment so that each tract or
lot of real property, and each article, parcel, or class of
personal property, is entered on the assessment list at its
market value. No assessment of the property of any person may
be raised unless the person has been duly notified of the intent
of the board to do so. On application of any person feeling
aggrieved, the board shall review the assessment or
classification, or both, and correct it as appears just. The
board may not make an individual market value adjustment or
classification change that would benefit the property in cases
where the owner or other person having control over the property
will not permit the assessor to inspect the property and the
interior of any buildings or structures.
(c) A local board of review may reduce assessments upon
petition of the taxpayer but the total reductions must not
reduce the aggregate assessment made by the county assessor by
more than one percent. If the total reductions would lower the
aggregate assessments made by the county assessor by more than
one percent, none of the adjustments may be made. The assessor
shall correct any clerical errors or double assessments
discovered by the board of review without regard to the one
percent limitation.
(d) A majority of the members may act at the meeting, and
adjourn from day to day until they finish hearing the cases
presented. The assessor shall attend, with the assessment books
and papers, and take part in the proceedings, but must not
vote. The county assessor, or an assistant delegated by the
county assessor shall attend the meetings. The board shall list
separately, on a form appended to the assessment book, all
omitted property added to the list by the board and all items of
property increased or decreased, with the market value of each
item of property, added or changed by the board, placed opposite
the item. The county assessor shall enter all changes made by
the board in the assessment book.
(e) Except as provided in subdivision 3, if a person fails
to appear in person, by counsel, or by written communication
before the board after being duly notified of the board's intent
to raise the assessment of the property, or if a person feeling
aggrieved by an assessment or classification fails to apply for
a review of the assessment or classification, the person may not
appear before the county board of equalization for a review of
the assessment or classification. This paragraph does not apply
if an assessment was made after the board meeting, as provided
in section 273.01, or if the person can establish not having
received notice of market value at least five days before the
local board of review meeting.
(f) The board of review or the board of equalization must
complete its work and adjourn within 20 days from the time of
convening stated in the notice of the clerk, unless a longer
period is approved by the commissioner of revenue. No action
taken after that date is valid. All complaints about an
assessment or classification made after the meeting of the board
must be heard and determined by the county board of
equalization. A nonresident may, at any time, before the
meeting of the board of review file written objections to an
assessment or classification with the county assessor. The
objections must be presented to the board of review at its
meeting by the county assessor for its consideration.
Sec. 26. Minnesota Statutes 1998, section 276.131, is
amended to read:
276.131 [DISTRIBUTION OF PENALTIES, INTEREST, AND COSTS.]
The penalties, interest, and costs collected on special
assessments and real and personal property taxes must be
distributed as follows:
(1) all penalties and interest collected on special
assessments against real or personal property must be
distributed to the taxing jurisdiction that levied the
assessment;
(2) 50 percent of all penalties and interest collected on
real and personal property taxes must be distributed to the
county in which the property is located school districts within
the county, and the other remaining 50 percent must be
distributed to the school districts within the county. The
distribution to the school district must be in accordance with
the provisions of section 127A.34; and
(3) in the case of interest on taxes that have been
delinquent for a period of one year or less, (a) 50 percent of
the interest must be distributed to the school districts within
the county and (b) the remaining 50 percent shall be distributed
to the county;
(4) in the case of interest on taxes that have been
delinquent for a period of more than one year, (a) 50 percent of
the interest must be distributed to the school districts within
the county and (b) the remaining 50 percent must be distributed
as follows: (i) the city or town where the property is located
shall receive a share of the amount of interest equal to the
proportion that the city's or town's local tax rate for the year
that the interest was collected, is to the sum of the city's or
town's local tax rate and the county's local tax rate for the
year that the interest was collected and (ii) the balance must
be distributed to the county; and
(5) all costs collected by the county on special
assessments and on delinquent real and personal property taxes
must be distributed to the county in which the property is
located.
The distribution of all penalties and interest to the
school district must be in accordance with the provisions of
section 127A.34.
Sec. 27. Minnesota Statutes 1998, section 290A.03,
subdivision 6, is amended to read:
Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling
occupied as the claimant's principal residence and so much of
the land surrounding it, not exceeding ten acres, as is
reasonably necessary for use of the dwelling as a home and any
other property used for purposes of a homestead as defined in
section 273.13, subdivision 22, except for agricultural land
assessed as part of a homestead pursuant to section 273.13,
subdivision 23, "homestead" is limited to 320 acres the first
$600,000 of market value or, where the farm homestead is rented,
one acre. The homestead may be owned or rented and may be a
part of a multidwelling or multipurpose building and the land on
which it is built. A manufactured home, as defined in section
273.125, subdivision 8, or a park trailer taxed as a
manufactured home under section 168.012, subdivision 9, assessed
as personal property may be a dwelling for purposes of this
subdivision.
Sec. 28. Minnesota Statutes 1998, section 290B.03,
subdivision 1, is amended to read:
Subdivision 1. [PROGRAM QUALIFICATIONS.] The
qualifications for the senior citizens' property tax deferral
program are as follows:
(1) the property must be owned and occupied as a homestead
by a person 65 years of age or older. In the case of a married
couple, both of the spouses must be at least 65 years old at the
time the first property tax deferral is granted, regardless of
whether the property is titled in the name of one spouse or both
spouses, or titled in another way that permits the property to
have homestead status;
(2) the total household income of the qualifying
homeowners, as defined in section 290A.03, subdivision 5, for
the calendar year preceding the year of the initial application
may not exceed $30,000 $60,000;
(3) the homestead must have been owned and occupied as the
homestead of at least one of the qualifying homeowners for at
least 15 years prior to the year the initial application is
filed;
(4) there are no delinquent property taxes, penalties, or
interest on the homesteaded property;
(5) there are no delinquent special assessments on the
homesteaded property;
(6) there are no state or federal tax liens or judgment
liens on the homesteaded property;
(7) there are no mortgages or other liens on the property
that secure future advances, except for those subject to credit
limits that result in compliance with clause (8); and
(8) the total unpaid balances of debts secured by mortgages
and other liens on the property, including unpaid special
assessments, but not including property taxes payable during the
year, does not exceed 30 percent of the assessor's estimated
market value for the year.
Sec. 29. Minnesota Statutes 1998, section 290B.04,
subdivision 2, is amended to read:
Subd. 2. [APPROVAL; RECORDING.] The commissioner shall
approve all initial applications that qualify under this chapter
and shall notify qualifying homeowners on or before December 1.
The commissioner may investigate the facts or require
confirmation in regard to an application. The commissioner
shall record or file a notice of qualification for deferral,
including the names of the qualifying homeowners and a legal
description of the property, in the office of the county
recorder, or registrar of titles, whichever is applicable, in
the county where the qualifying property is located. The notice
must state that it serves as a notice of lien and that it
includes deferrals under this section for future years. The
homeowner shall pay the recording or filing fees for the notice,
which, notwithstanding section 357.18, shall be paid by the
homeowner at the time of satisfaction of the lien.
Sec. 30. Minnesota Statutes 1998, section 290B.04,
subdivision 3, is amended to read:
Subd. 3. [EXCESS-INCOME CERTIFICATION BY TAXPAYER.] A
taxpayer whose initial application has been approved under
subdivision 2 shall notify the commissioner of revenue in
writing by July 1 if the taxpayer's household income for the
preceding calendar year exceeded $30,000 $60,000. The
certification must state the homeowner's total household income
for the previous calendar year. No property taxes may be
deferred under this chapter 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. 31. Minnesota Statutes 1998, section 290B.04,
subdivision 4, is amended 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 $60,000 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 $60,000 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. 32. Minnesota Statutes 1998, 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 three 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 determine the
qualifying homeowner's "maximum allowable deferral." 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 $60,000. 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 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.
Sec. 33. Minnesota Statutes 1998, section 298.22,
subdivision 7, is amended to read:
Subd. 7. [GIANTS RIDGE RECREATION AREA.] (a) In addition
to the other powers granted in this section and other law, the
commissioner, for purposes of fostering economic development and
tourism within the Giants Ridge recreation area, may spend any
money made available to the agency under section 298.28 to
acquire real or personal property or interests therein by gift,
purchase, or lease and may convey by lease, sale, or other means
of conveyance or commitment any or all of those property
interests acquired.
(b) Notwithstanding any other law to the contrary, property
conveyed under this subdivision and used for residential
purposes is not eligible for property tax homestead
classification under section 273.124 or for a property tax
refund under chapter 290A.
(c) In furtherance of development of the Giants Ridge
recreation area, the commissioner may establish and participate
in charitable foundations and nonprofit corporations, including
a corporation within the meaning of section 317A.011,
subdivision 6.
(d) (c) The term "Giants Ridge recreation area" refers to
an economic development project area established by the
commissioner in furtherance of the powers delegated in this
section within St. Louis county in the western portions of the
town of White and in the eastern portion of the westerly,
adjacent, unorganized township.
Sec. 34. Minnesota Statutes 1998, section 373.40,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given.
(a) "Bonds" means an obligation as defined under section
475.51.
(b) "Capital improvement" means acquisition or betterment
of public lands, development rights in the form of conservation
easements under chapter 84C, buildings, or other improvements
within the county for the purpose of a county courthouse,
administrative building, health or social service facility,
correctional facility, jail, law enforcement center, hospital,
morgue, library, park, qualified indoor ice arena, and roads and
bridges. An improvement must have an expected useful life of
five years or more to qualify. "Capital improvement" does not
include light rail transit or any activity related to it or a
recreation or sports facility building (such as, but not limited
to, a gymnasium, ice arena, racquet sports facility, swimming
pool, exercise room or health spa), unless the building is part
of an outdoor park facility and is incidental to the primary
purpose of outdoor recreation.
(c) "Commissioner" means the commissioner of trade and
economic development.
(d) "Metropolitan county" means a county located in the
seven-county metropolitan area as defined in section 473.121 or
a county with a population of 90,000 or more.
(e) "Population" means the population established by the
most recent of the following (determined as of the date the
resolution authorizing the bonds was adopted):
(1) the federal decennial census,
(2) a special census conducted under contract by the United
States Bureau of the Census, or
(3) a population estimate made either by the metropolitan
council or by the state demographer under section 4A.02.
(f) "Qualified indoor ice arena" means a facility that
meets the requirements of section 373.43.
(g) "Tax capacity" means total taxable market value, but
does not include captured market value.
Sec. 35. Minnesota Statutes 1998, section 375.18,
subdivision 12, is amended to read:
Subd. 12. [LAND FOR PUBLIC USE.] Each county board may
acquire by gift or purchase and improve land within the county,
for use as a park, site for a building, or other public purpose,
and, when required by the public interest, sell and convey it.
The land may be paid for out of moneys in the county treasury
not otherwise appropriated, or by issuing bonds of the
county. The county board may acquire development rights in the
form of a conservation easement under chapter 84C. The holder
of the conservation easement may be determined by a governmental
body.
Sec. 36. Minnesota Statutes 1998, 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 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 housing
development fund.
Sec. 37. Minnesota Statutes 1998, section 469.002,
subdivision 10, is amended to read:
Subd. 10. [FEDERAL LEGISLATION.] "Federal legislation"
includes the United States Housing Act of 1937, United States
Code, title 42, sections 1401 to 1440, as amended through
December 31, 1989 1998; the National Housing Act, United States
Code, title 12, sections 1701 to 1750g, as amended through
December 31, 1989; and any other legislation of the Congress of
the United States relating to federal assistance for clearance
or rehabilitation of substandard or blighted areas, land
assembly, redevelopment projects, or housing.
Sec. 38. Minnesota Statutes 1998, section 469.012,
subdivision 1, is amended to read:
Subdivision 1. [SCHEDULE OF POWERS.] An authority shall be
a public body corporate and politic and shall have all the
powers necessary or convenient to carry out the purposes of
sections 469.001 to 469.047, except that the power to levy and
collect taxes or special assessments is limited to the power
provided in sections 469.027 to 469.033. Its powers include the
following powers in addition to others granted in sections
469.001 to 469.047:
(1) to sue and be sued; to have a seal, which shall be
judicially noticed, and to alter it; to have perpetual
succession; and to make, amend, and repeal rules consistent with
sections 469.001 to 469.047;
(2) to employ an executive director, technical experts, and
officers, agents, and employees, permanent and temporary, that
it requires, and determine their qualifications, duties, and
compensation; for legal services it requires, to call upon the
chief law officer of the city or to employ its own counsel and
legal staff; so far as practicable, to use the services of local
public bodies in its area of operation, provided that those
local public bodies, if requested, shall make the services
available;
(3) to delegate to one or more of its agents or employees
the powers or duties it deems proper;
(4) within its area of operation, to undertake, prepare,
carry out, and operate projects and to provide for the
construction, reconstruction, improvement, extension,
alteration, or repair of any project or part thereof;
(5) subject to the provisions of section 469.026, to give,
sell, transfer, convey, or otherwise dispose of real or personal
property or any interest therein and to execute leases, deeds,
conveyances, negotiable instruments, purchase agreements, and
other contracts or instruments, and take action that is
necessary or convenient to carry out the purposes of these
sections;
(6) within its area of operation, to acquire real or
personal property or any interest therein by gifts, grant,
purchase, exchange, lease, transfer, bequest, devise, or
otherwise, and by the exercise of the power of eminent domain,
in the manner provided by chapter 117, to acquire real property
which it may deem necessary for its purposes, after the adoption
by it of a resolution declaring that the acquisition of the real
property is necessary to eliminate one or more of the conditions
found to exist in the resolution adopted pursuant to section
469.003 or to provide decent, safe, and sanitary housing for
persons of low and moderate income, or is necessary to carry out
a redevelopment project. Real property needed or convenient for
a project may be acquired by the authority for the project by
condemnation pursuant to this section. This includes any
property devoted to a public use, whether or not held in trust,
notwithstanding that the property may have been previously
acquired by condemnation or is owned by a public utility
corporation, because the public use in conformity with the
provisions of sections 469.001 to 469.047 shall be deemed a
superior public use. Property devoted to a public use may be so
acquired only if the governing body of the municipality has
approved its acquisition by the authority. An award of
compensation shall not be increased by reason of any increase in
the value of the real property caused by the assembly, clearance
or reconstruction, or proposed assembly, clearance or
reconstruction for the purposes of sections 469.001 to 469.047
of the real property in an area;
(7) within its area of operation, and without the adoption
of an urban renewal plan, to acquire, by all means as set forth
in clause (6) but without the adoption of a resolution provided
for in clause (6), real property, and to demolish, remove,
rehabilitate, or reconstruct the buildings and improvements or
construct new buildings and improvements thereon, or to so
provide through other means as set forth in Laws 1974, chapter
228, or to grade, fill, and construct foundations or otherwise
prepare the site for improvements. The authority may dispose of
the property pursuant to section 469.029, provided that the
provisions of section 469.029 requiring conformance to an urban
renewal plan shall not apply. The authority may finance these
activities by means of the redevelopment project fund or by
means of tax increments or tax increment bonds or by the methods
of financing provided for in section 469.033 or by means of
contributions from the municipality provided for in section
469.041, clause (9), or by any combination of those means. Real
property with buildings or improvements thereon shall only be
acquired under this clause when the buildings or improvements
are substandard. The exercise of the power of eminent domain
under this clause shall be limited to real property which
contains, or has contained within the three years immediately
preceding the exercise of the power of eminent domain and is
currently vacant, buildings and improvements which are vacated
and substandard. Notwithstanding the prior sentence, in cities
of the first class the exercise of the power of eminent domain
under this clause shall be limited to real property which
contains, or has contained within the three years immediately
preceding the exercise of the power of eminent domain, buildings
and improvements which are substandard. For the purpose of this
clause, substandard buildings or improvements mean hazardous
buildings as defined in section 463.15, subdivision 3, or
buildings or improvements that are dilapidated or obsolescent,
faultily designed, lack adequate ventilation, light, or sanitary
facilities, or any combination of these or other factors that
are detrimental to the safety or health of the community;
(8) within its area of operation, to determine the level of
income constituting low or moderate family income. The
authority may establish various income levels for various family
sizes. In making its determination, the authority may consider
income levels that may be established by the Department of
Housing and Urban Development or a similar or successor federal
agency for the purpose of federal loan guarantees or subsidies
for persons of low or moderate income. The authority may use
that determination as a basis for the maximum amount of income
for admissions to housing development projects or housing
projects owned or operated by it;
(9) to provide in federally assisted projects any
relocation payments and assistance necessary to comply with the
requirements of the Federal Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970, and any
amendments or supplements thereto;
(10) to make an agreement with the governing body or bodies
creating the authority which provides exemption from all ad
valorem real and personal property taxes levied or imposed by
the body or bodies creating the authority. In the case of
low-rent public housing that received financial assistance under
the United States Housing Act of 1937, or successor federal
legislation, an authority may make an agreement with the
governing body or bodies creating the authority to provide
exemption from all real and personal property taxes levied or
imposed by the state, city, county, or other political
subdivision, for which the authority shall make payments in lieu
of taxes to the state, city, county, or other political
subdivisions as provided in section 469.040. The governing body
shall agree on behalf of all the applicable governing bodies
affected that local cooperation as required by the federal
government shall be provided by the local governing body or
bodies in whose jurisdiction the project is to be located, at no
cost or at no greater cost than the same public services and
facilities furnished to other residents;
(11) to cooperate with or act as agent for the federal
government, the state or any state public body, or any agency or
instrumentality of the foregoing, in carrying out any of the
provisions of sections 469.001 to 469.047 or of any other
related federal, state, or local legislation; and upon the
consent of the governing body of the city to purchase, lease,
manage, or otherwise take over any housing project already owned
and operated by the federal government;
(12) to make plans for carrying out a program of voluntary
repair and rehabilitation of buildings and improvements, and
plans for the enforcement of laws, codes, and regulations
relating to the use of land and the use and occupancy of
buildings and improvements, and to the compulsory repair,
rehabilitation, demolition, or removal of buildings and
improvements. The authority may develop, test, and report
methods and techniques, and carry out demonstrations and other
activities for the prevention and elimination of slums and
blight;
(13) to borrow money or other property and accept
contributions, grants, gifts, services, or other assistance from
the federal government, the state government, state public
bodies, or from any other public or private sources;
(14) to include in any contract for financial assistance
with the federal government any conditions that the federal
government may attach to its financial aid of a project, not
inconsistent with purposes of sections 469.001 to 469.047,
including obligating itself (which obligation shall be
specifically enforceable and not constitute a mortgage,
notwithstanding any other laws) to convey to the federal
government the project to which the contract relates upon the
occurrence of a substantial default with respect to the
covenants or conditions to which the authority is subject; to
provide in the contract that, in case of such conveyance, the
federal government may complete, operate, manage, lease, convey,
or otherwise deal with the project until the defaults are cured
if the federal government agrees in the contract to reconvey to
the authority the project as then constituted when the defaults
have been cured;
(15) to issue bonds for any of its corporate purposes and
to secure the bonds by mortgages upon property held or to be
held by it or by pledge of its revenues, including grants or
contributions;
(16) to invest any funds held in reserves or sinking funds,
or any funds not required for immediate disbursement, in
property or securities in which savings banks may legally invest
funds subject to their control or in the manner and subject to
the conditions provided in section 118A.04 for the deposit and
investment of public funds;
(17) within its area of operation, to determine where
blight exists or where there is unsafe, unsanitary, or
overcrowded housing;
(18) to carry out studies of the housing and redevelopment
needs within its area of operation and of the meeting of those
needs. This includes study of data on population and family
groups and their distribution according to income groups, the
amount and quality of available housing and its distribution
according to rentals and sales prices, employment, wages,
desirable patterns for land use and community growth, and other
factors affecting the local housing and redevelopment needs and
the meeting of those needs; to make the results of those studies
and analyses available to the public and to building, housing,
and supply industries;
(19) if a local public body does not have a planning agency
or the planning agency has not produced a comprehensive or
general community development plan, to make or cause to be made
a plan to be used as a guide in the more detailed planning of
housing and redevelopment areas;
(20) to lease or rent any dwellings, accommodations, lands,
buildings, structures, or facilities included in any project
and, subject to the limitations contained in sections 469.001 to
469.047 with respect to the rental of dwellings in housing
projects, to establish and revise the rents or charges therefor;
(21) to own, hold, and improve real or personal property
and to sell, lease, exchange, transfer, assign, pledge, or
dispose of any real or personal property or any interest
therein;
(22) to insure or provide for the insurance of any real or
personal property or operations of the authority against any
risks or hazards;
(23) to procure or agree to the procurement of government
insurance or guarantees of the payment of any bonds or parts
thereof issued by an authority and to pay premiums on the
insurance;
(24) to make expenditures necessary to carry out the
purposes of sections 469.001 to 469.047;
(25) to enter into an agreement or agreements with any
state public body to provide informational service and
relocation assistance to families, individuals, business
concerns, and nonprofit organizations displaced or to be
displaced by the activities of any state public body;
(26) to compile and maintain a catalog of all vacant, open
and undeveloped land, or land which contains substandard
buildings and improvements as that term is defined in clause
(7), that is owned or controlled by the authority or by the
governing body within its area of operation and to compile and
maintain a catalog of all authority owned real property that is
in excess of the foreseeable needs of the authority, in order to
determine and recommend if the real property compiled in either
catalog is appropriate for disposal pursuant to the provisions
of section 469.029, subdivisions 9 and 10;
(27) to recommend to the city concerning the enforcement of
the applicable health, housing, building, fire prevention, and
housing maintenance code requirements as they relate to
residential dwelling structures that are being rehabilitated by
low- or moderate-income persons pursuant to section 469.029,
subdivision 9, for the period of time necessary to complete the
rehabilitation, as determined by the authority;
(28) to recommend to the city the initiation of municipal
powers, against certain real properties, relating to repair,
closing, condemnation, or demolition of unsafe, unsanitary,
hazardous, and unfit buildings, as provided in section 469.041,
clause (5);
(29) to sell, at private or public sale, at the price or
prices determined by the authority, any note, mortgage, lease,
sublease, lease purchase, or other instrument or obligation
evidencing or securing a loan made for the purpose of economic
development, job creation, redevelopment, or community
revitalization by a public agency to a business, for-profit or
nonprofit organization, or an individual;
(30) within its area of operation, to acquire and sell real
property that is benefited by federal housing assistance
payments, other rental subsidies, interest reduction payments,
or interest reduction contracts for the purpose of preserving
the affordability of low- and moderate-income multifamily
housing;
(31) to apply for, enter into contracts with the federal
government, administer, and carry out a section 8 program.
Authorization by the governing body creating the authority to
administer the program at the authority's initial application is
sufficient to authorize operation of the program in its area of
operation for which it was created without additional local
governing body approval. Approval by the governing body or
bodies creating the authority constitutes approval of a housing
program for purposes of any special or general law requiring
local approval of section 8 programs undertaken by city, county,
or multicounty authorities; and
(32) to secure a mortgage or loan for a rental housing
project by obtaining the appointment of receivers or assignments
of rents and profits under sections 559.17 and 576.01, except
that the limitation relating to the minimum amounts of the
original principal balances of mortgages specified in sections
559.17, subdivision 2, clause (2); and 576.01, subdivision 2,
does not apply.
Sec. 39. Minnesota Statutes 1998, section 475.52,
subdivision 1, is amended to read:
Subdivision 1. [STATUTORY CITIES.] Any statutory city may
issue bonds or other obligations for the acquisition or
betterment of public buildings, means of garbage disposal,
hospitals, nursing homes, homes for the aged, schools,
libraries, museums, art galleries, parks, playgrounds, stadia,
sewers, sewage disposal plants, subways, streets, sidewalks,
warning systems; for any utility or other public convenience
from which a revenue is or may be derived; for a permanent
improvement revolving fund; for changing, controlling or
bridging streams and other waterways; for the acquisition and
betterment of bridges and roads within two miles of the
corporate limits for the acquisition of development rights in
the form of conservation easements under chapter 84C; and for
acquisition of equipment for snow removal, street construction
and maintenance, or fire fighting. Without limitation by the
foregoing the city may issue bonds to provide money for any
authorized corporate purpose except current expenses.
Sec. 40. Minnesota Statutes 1998, section 475.52,
subdivision 3, is amended to read:
Subd. 3. [COUNTIES.] Any county may issue bonds for the
acquisition or betterment of courthouses, county administrative
buildings, health or social service facilities, correctional
facilities, law enforcement centers, jails, morgues, libraries,
parks, and hospitals, for roads and bridges within the county or
bordering thereon and for road equipment and machinery and for
ambulances and related equipment for the acquisition of
development rights in the form of conservation easements under
chapter 84C, and for capital equipment for the administration
and conduct of elections providing the equipment is uniform
countywide, except that the power of counties to issue bonds in
connection with a library shall not exist in Hennepin county.
Sec. 41. Minnesota Statutes 1998, section 475.52,
subdivision 4, is amended to read:
Subd. 4. [TOWNS.] Any town may issue bonds for the
acquisition and betterment of town halls, town roads and
bridges, nursing homes and homes for the aged, and for
acquisition of equipment for snow removal, road construction or
maintenance, and fire fighting for the acquisition of
development rights in the form of conservation easements under
chapter 84C and for the acquisition and betterment of any
buildings to house and maintain town equipment.
Sec. 42. Minnesota Statutes 1998, section 477A.011,
subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as provided in
paragraphs (b), (c), and (d) to (k), "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.
(h) The city aid base for a city is increased by $150,000
for aids payable in 2000 and thereafter, and the maximum amount
of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $150,000 in calendar year
2000 only, provided that:
(1) the city has a population that is greater than 1,000
and less than 2,500;
(2) its commercial and industrial percentage for aids
payable in 1999 is greater than 45 percent; and
(3) the total market value of all commercial and industrial
property in the city for assessment year 1999 is at least 15
percent less than the total market value of all commercial and
industrial property in the city for assessment year 1998.
(i) The city aid base for a city is increased by $200,000
in 2000 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 2000 only,
provided that:
(1) the city had a population in 1997 of 2,500 or more;
(2) the net tax capacity of the city used in calculating
its 1999 aid under section 477A.013 is less than $650 per
capita;
(3) the pre-1940 housing percentage of the city used in
calculating 1999 aid under section 477A.013 is greater than 12
percent;
(4) the 1999 local government aid of the city under section
477A.013 is less than 20 percent of the amount that the formula
aid of the city would have been if the need increase percentage
was 100 percent; and
(5) the city aid base of the city used in calculating aid
under section 477A.013 is less than $7 per capita.
(j) The city aid base for a city is increased by $225,000
in calendar years 2000 to 2002 and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $225,000 in calendar year
2000 only, provided that:
(1) the city had a population of at least 5,000;
(2) its population had increased by at least 50 percent in
the ten-year period ending in 1997;
(3) the city is located outside of the Minneapolis-St. Paul
metropolitan statistical area as defined by the United States
Bureau of the Census; and
(4) the city received less than $30 per capita in aid under
section 477A.013, subdivision 9, for aids payable in 1999.
(k) The city aid base for a city is increased by $102,000
in 2000 and thereafter, and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $102,000 in calendar year 2000 only,
provided that:
(1) the city has a population in 1997 of 2,000 or more;
(2) the net tax capacity of the city used in calculating
its 1999 aid under section 477A.013 is less than $455 per
capita;
(3) the net levy of the city used in calculating 1999 aid
under section 477A.013 is greater than $195 per capita; and
(4) the 1999 local government aid of the city under section
477A.013 is less than 38 percent of the amount that the formula
aid of the city would have been if the need increase percentage
was 100 percent.
Sec. 43. Minnesota Statutes 1998, section 477A.06,
subdivision 1, is amended to read:
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 two 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.
Sec. 44. Laws 1997, chapter 231, article 2, section 68,
subdivision 3, as amended by Laws 1998, chapter 389, article 3,
section 36, is amended to read:
Subd. 3. [MORATORIUM ON CHANGES IN ELDERLY ASSISTED LIVING
FACILITIES; 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 1999 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, 1998, or 1999;
(2) a facility that was converted to an elderly assisted
living facility during calendar year 1997, 1998, or 1999; 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 1999 regular legislative
session December 31, 1999.
Sec. 45. Laws 1997, First Special Session chapter 3,
section 27, is amended to read:
Sec. 27. [TAXPAYER'S PERSONAL INFORMATION; DISCLOSURE.]
(a) An owner of property in Washington or Ramsey county
that is subject to property taxation must be informed in a clear
and conspicuous manner in writing on a form sent to property
taxpayers that the property owner's name, address, and other
information may be used, rented, or sold for business purposes,
including surveys, marketing, and solicitation.
(b) If the property owner so requests on the form provided,
then any such list generated by the county and sold for business
purposes must exclude the owner's name and address if the
business purpose is conducting surveys, marketing, or
solicitation.
(c) This section expires August 1, 1999 2001.
Sec. 46. [ABATEMENT OF TAXES.]
Subdivision 1. [PROPERTY DEFINED.] As used in this section
and section 47, "property" means property located in Lake county
that meets the following description:
All that part of Government Lot Two (2) of Section One (1)
in Township Fifty-two (52) North, Range Eleven (11) West of the
Fourth Principal Meridian, lying within the following described
lines:
Commencing at a point on the North-South quarter line of
said Section 1 which is 20 feet south of the center of said
Section 1 measured along said North-South quarter line;
thence easterly at a right angle to said North-South
quarter line a distance of 5 feet to the point of Beginning;
thence continuing in an easterly direction at a right angle
to said North-South quarter line a distance of 335 feet;
thence southerly at a right angle to the last described
line a distance of 80 feet;
thence easterly at a right angle to the last described line
a distance of 210 feet;
thence southerly at a right angle to the last described
line a distance of 255 feet;
thence southeasterly at an angle of 102 degrees to the last
described line to the ordinary low-water mark of Agate Bay;
thence easterly along said ordinary low-water mark to the
East boundary line of said Government Lot 2;
thence in a northerly direction along said East boundary
line to a point on said East boundary line which is 75 feet
distant in a northerly direction from the East-West quarter line
of said Section 1, extended, as measured along said East
boundary line;
thence in a northwesterly direction to a point which is 190
feet easterly measured at a right angle to the North-South
quarter line of said Section 1 from a point on the North-South
quarter line, which point is 725 feet northerly of the center of
said Section 1 when measured along said North-South quarter
line;
thence in a westerly direction at a right angle to said
North-South quarter line a distance of 185 feet;
thence southerly along a line parallel to and 5 feet
distant easterly from said North-South quarter line a distance
of 230 feet;
thence easterly at a right angle to the last described line
a distance of 130 feet;
thence southerly at a right angle to the last described
line a distance of 119.27 feet;
thence westerly at a right angle to the last described line
a distance of 130 feet;
thence southerly along a line parallel to and 5 feet
distant easterly from said North-South quarter line a distance
of 395.73 feet to the point of beginning.
Subd. 2. [AUTHORIZATION.] Upon a majority vote of its
members, the governing bodies of each of Lake county, the city
of Two Harbors, and Lake Superior independent school district
No. 381, may abate the taxes levied on the property described in
subdivision 1 in 1979 to 1990, payable in 1980 to 1991, as well
as any interest and penalties due on those taxes.
Sec. 47. [RECORDING OF CONVEYANCE AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 272.12, or any
other law to the contrary, if the governing bodies of Lake
county, the city of Two Harbors, and Lake Superior independent
school district No. 381 have all abated the taxes, interest, and
penalties as provided in section 46, subdivision 2, the county
auditor may record the conveyance of the property described in
section 46, subdivision 1.
Sec. 48. [LOCAL PERFORMANCE AID RECIPIENTS; OTHER AID
INCREASES.]
(a) If a county received local performance aid under
Minnesota Statutes, section 477A.05, in calendar year 1999, the
amount of homestead and agricultural credit aid determined and
payable to the county under Minnesota Statutes, section
273.1398, in 2000 and subsequent years is increased by the
amount of performance aid it received in 1999.
(b) If a city received local performance aid under
Minnesota Statutes, section 477A.05, in calendar year 1999, the
city aid base of the city under Minnesota Statutes, section
477A.011, subdivision 36, is increased for aid payable in 2000
and subsequent years by the amount of performance aid it
received in 1999, and the maximum amount of total aid it may
receive under Minnesota Statutes, section 477A.013, subdivision
9, paragraph (c), is also increased by that amount in calendar
year 2000 only.
(c) For purposes of determining the limitation on aid
increases under Minnesota Statutes, section 477A.013,
subdivision 9, paragraph (b), for aid payable in 2000, the sum
of the aid to all cities in 2000 does not include the aid
increase under paragraph (a) of this section.
Sec. 49. [RECOMMENDATIONS ON UTILITY TAX POLICY.]
The commissioner of revenue, upon consultation with the
commissioner of public service and other appropriate state
agencies, shall convene meetings of representatives from
utilities which pay personal property taxes on generation
facilities and local governments in which those facilities are
sited. These meetings shall assess policy issues related to the
taxation of Minnesota utility generation facilities in a
changing energy market, including:
(1) the effects of future restructuring of the electric
industry;
(2) impacts on revenue to local governments and debt
issuance;
(3) evolution of utility tax policy in Minnesota and other
states;
(4) sufficiency of Minnesota's future electric power
supply; and
(5) any other relevant issues, including environmental,
labor, and consumer issues.
The meetings shall be open to any interested parties. The
commissioner shall examine utility tax policy issues and make
recommendations, as warranted, on the future of the personal
property tax on generation facilities and the replacement of
revenues that would be lost to local units of government as a
result of a partial or full exemption of these personal property
taxes.
The commissioner shall report on the progress of these
meetings, including options being considered and a plan for
completing the report, to the chairs of the senate committees on
taxes and jobs, energy and community development, the house
committees on taxes and commerce, and the governor, by January
15, 2000, with a final report to those same officials by
December 1, 2000.
Sec. 50. [383D.74] [DAKOTA COUNTY; ADMINISTRATIVE
PENALTIES.]
Subdivision 1. [PENALTIES.] The Dakota county board may
impose an administrative penalty for violation of an ordinance
enacted under chapter 103F. No penalty may be imposed unless
the owner has received notice, served personally or by mail, of
the alleged violation and an opportunity for a hearing before a
person authorized by the county board to conduct the hearing. A
decision that a violation occurred must be in writing. The
amount of the penalty with interest may not exceed the amount
allowed for a single misdemeanor violation. A person aggrieved
by a decision under this section may have the decision reviewed
in the district court. If a penalty imposed under this section
is unpaid for more than 60 days after the date when payment is
due, the county board may certify the penalty to the county
auditor for collection to the same extent and in the same manner
provided by law for the assessment and collection of real estate
taxes.
Subd. 2. [EXPIRATION.] The authority to impose a penalty
under this section expires on December 31, 2000.
Sec. 51. [LEGISLATIVE INTENT.]
It is the intent of the legislature that one-half of the
actual property tax savings to the taxpayer as a result of the
class rate reduction under section 19, for manufactured home
parks, for taxes payable in 2000 to 2004, be reinvested by the
taxpayer in capital improvements of the manufactured home park
or used for direct assistance to homeowners for home
improvements.
Sec. 52. [2000 CHARITY CARE AID.]
Subdivision 1. [PURPOSE.] The purpose of charity care aid
is to prevent or reduce the reliance on county property taxes to
meet the cost of providing medical care to individuals who are
indigent and who do not reside in the county.
Subd. 2. [QUALIFICATION.] A county qualifies for payment
under this section in 2000 only if it contains a hospital that
has a medical assistance disproportionate population adjustment
as determined under section 256.969, subdivision 9, greater than
16 percent.
Subd. 3. [REPORTS BY HOSPITALS AND COUNTIES.] (a) By June
1, 1999, a hospital described in subdivision 2 must file a
report with the county in which it is located setting forth its
audited financial statements and a schedule setting forth the
aggregate amount of charity care for calendar year 1998 that
meets the following criteria:
(1) the patient is from a county other than the county in
which the hospital is located; and
(2) the hospital has made a preliminary determination that:
(i) the patient is not eligible for any public health care
program or it cannot be determined whether the person is
eligible for any public health care program; and
(ii) the person is uninsured or it cannot be determined if
the person is uninsured or the person has insufficient resources
to pay the cost of services delivered by the hospital.
(b) By July 1, 1999, each county must report to the
commissioner of revenue the total amount of charity care
reported to it by hospitals under this subdivision.
Subd. 4. [AMOUNT OF AID.] (a) Subject to the limitation in
paragraph (b), payment to a county under this section is equal
to the aggregate amount of charity care, as reported under
subdivision 3, for calendar year 1998.
(b) The total of all payments under this section may not
exceed $10,000,000. If the amounts reported under subdivision 3
for all counties exceeds $10,000,000, the distributions to each
county must be allocated in proportion to the total amount of
uncompensated care reported to the commissioner by the county so
that the total of the payments does not exceed $10,000,000.
Subd. 5. [PAYMENT DATES.] The aid amounts must be paid as
provided in section 477A.015.
Subd. 6. [USE OF FUNDS.] Each county that receives a
payment under this section must remit all charity care aid funds
to hospitals described in subdivision 2 that apply to the county
for reimbursement. If the aid a county receives is less than
the total amount of uncompensated care reported by eligible
hospitals in the county, the aid amounts remitted to the
hospitals must be proportional to the amounts reported.
Subd. 7. [REPORT TO THE COMMISSIONER.] By March 15, 2001,
each county that receives the aid must file a report with the
commissioner of revenue describing how charity care aids were
spent, and verifying that they were paid to hospitals described
in subdivision 2 for charity care purposes for individuals who
do not reside in the county.
Subd. 8. [NOTICE TO COUNTIES.] The commissioner of revenue
shall annually notify the governing body of each county,
providing information, to the extent available to the
commissioner, regarding the amount of reimbursements paid under
this section attributable to care provided to residents of that
county.
Subd. 9. [HENNEPIN COUNTY LEVY LIMIT ADJUSTMENT.] For
taxes levied in 1999 only, the levy limit for Hennepin county
under Minnesota Statutes, section 275.71, subdivision 4, is
reduced by an amount equal to the amount of charity aid
allocated to the Hennepin county medical center.
Subd. 10. [APPROPRIATION.] The amount sufficient to make
the payments under this section is appropriated from the general
fund to the commissioner of revenue.
Sec. 53. [PROPERTY TAX ABATEMENT; PROPERTY DAMAGED BY
TORNADO.]
Subdivision 1. [ABATEMENT AMOUNT.] The county auditor
shall grant an abatement for taxes payable in 1999 to any
property in a qualifying county, as defined in Laws 1998,
chapter 383, section 20, that contains a structure that has been
determined by the assessor to have lost over 50 percent of its
estimated market value due to wind damage sustained on March 29,
1998, excluding residential homestead property and the portion
of agricultural homestead property consisting of the house,
garage, and surrounding one acre of land. The abatement is
equal to 75 percent of the amount by which the net tax capacity
of the structure was reduced by the wind damage, multiplied by
the payable 1999 total local net tax capacity tax rate, plus 75
percent of the amount by which the referendum market value of
the structure was reduced by the wind damage, multiplied by the
payable 1999 total market value tax rate. If the amount of the
abatement exceeds the remaining tax due on the property for
taxes payable in 1999, a refund shall be issued to the taxpayer
by the county treasurer by June 30, 1999.
Subd. 2. [CERTIFICATION.] The amount of abatements granted
under this section shall be reported to the commissioner of
revenue by the county auditor by June 30, 1999, in a form
prescribed by the commissioner. The commissioner may require
the county to provide other information necessary to verify the
accuracy of the abatement amounts submitted.
Subd. 3. [PAYMENT.] The commissioner shall make payments
equal to the amount of abatements granted to each county by
August 30, 1999. The county treasurer shall distribute the
payments to the affected taxing jurisdictions equal to the
amount of the tax that was abated as part of the October 1999
regular settlement as provided in Minnesota Statutes, section
276.111.
Subd. 4. [APPROPRIATION.] The amount necessary to fund the
payments required under this section is appropriated from the
general fund to the commissioner of revenue in fiscal year 2000.
Sec. 54. [REPEALER.]
(a) Minnesota Statutes 1998, section 273.11, subdivision
10, is repealed.
(b) Minnesota Statutes 1998, section 477A.05, is repealed.
(c) Laws 1998, chapter 389, article 3, section 45, is
repealed.
Sec. 55. [EFFECTIVE DATES.]
Sections 1 and 2 are effective for petitions filed on or
after the day following final enactment.
Sections 3, 4, 5, 9, paragraph (c), 10, 11, 15, 16, 17,
paragraphs (a) and (b), 19, 20, 21, 22, 25, and 33 are effective
for taxes levied in 1999, payable in 2000, and thereafter.
Section 6 is effective for assessment years 1999 through
2001.
Section 7 is effective for improvements made on or after
July 1, 1999.
Section 8 is effective retroactively for property taxes
payable in 1998 and thereafter.
Section 9, paragraph (h), is effective for taxes payable in
1999 and subsequent years.
Section 13 is effective beginning with the 1999 assessment,
taxes payable in 2000 and thereafter. For eligibility for the
1999 assessment year under section 13, paragraph (b), the owner
or the person who is actively farming the property must notify
the county assessor by July 1, 1999, and furnish to the assessor
the information required by the assessor to determine whether
the qualifying criteria has been met for the 1999 assessment on
the agricultural property.
Sections 12, 14, 24, 29, 36 to 38, 44, and 53 are effective
the day following final enactment.
Sections 17, paragraph (c), 18, and 54, paragraph (c), are
effective for taxes levied in 2000, payable in 2001 and
thereafter.
Section 20, paragraph (f), is effective for the 2000
assessment and thereafter, for taxes payable in 2001 and
thereafter, except that for taxes payable in 2001, the date for
filing an application with the county assessor under section 20,
paragraph (f), clause (3), is September 1, 1999.
Section 26 is effective for penalties and interest on
property taxes collected after June 30, 1999.
Section 27 is effective for property tax refunds for claims
for property taxes payable filed in 2000 and thereafter for
taxes payable in 2000 and thereafter.
Sections 22, 48, and 54, paragraph (b), are effective for
aids payable in 2000 and thereafter.
Sections 28 and 30 to 32 are effective for deferrals of
property taxes payable in 2000 and thereafter. The changes in
the annual tax amount percentage and the maximum annual
household income in sections 28 and 30 to 32 apply to all
homeowners and all property taxes deferred beginning in payable
2000, including those homeowners who initially qualified under
this program for taxes payable in 1999.
Section 45 applies to Washington county only and is
effective the day after the chief clerical officer of Washington
county files a certificate of approval that complies with
Minnesota Statutes, section 645.021, subdivision 3.
Sections 46 and 47 are effective the day following final
enactment, upon approval by and compliance with Minnesota
Statutes, section 645.021, subdivision 3, by the governing
bodies of Lake county, the city of Two Harbors, and Lake
Superior independent school district No. 381.
ARTICLE 6
LEVY AUTHORIZATION AND LEVY LIMITS
Section 1. Minnesota Statutes 1998, section 204B.135, is
amended by adding a subdivision to read:
Subd. 5. [REDISTRICTING EXPENSES.] The county board may
levy a tax not to exceed $1 per capita in the year ending in "0"
to pay costs incurred in the year ending in "1" or "2" that are
reasonably related to the redistricting of election districts,
establishment of precinct boundaries, designation of polling
places, and the updating of voter records in the statewide
registration system. The county auditor shall distribute to
each municipality in the county on a per capita basis 25 percent
of the amount levied as provided in this subdivision, based on
the population of the municipality in the most recent census.
This levy is not subject to statutory levy limits.
Sec. 2. [275.078] [AUTHORIZATION; TAX RATE INCREASE.]
On or before October 1, 1999, and each subsequent year, the
county auditor shall certify to the governing body of each home
rule charter or statutory city in the county and to the county
board, the following information for the taxing jurisdiction:
(1) the taxing jurisdiction's certified levy under section
275.08 for the previous year, taxes payable in the current year,
excluding any amount levied to pay general obligation bonds,
less (i) the areawide portion of the levy under section 276A.06,
subdivision 3, or 473F.08, subdivision 3, if any, for taxes
payable in the following year; and (ii) the sum of the net tax
capacity adjustment amount and the fiscal disparities adjustment
amount under section 273.1398, subdivision 2, if any, for aids
payable in the following year;
(2) the taxing jurisdiction's taxable net tax capacity for
the current assessment year, for taxes payable in the following
year; and
(3) the tax rate obtained by dividing the amount in clause
(1) by the amount in clause (2), rounded to the nearest
hundredth percent.
In order to impose a tax rate for purposes other than to
pay general obligation bonds for taxes payable in the following
year that is higher than the tax rate certified by the county
auditor under clause (3), the governing body of the city or the
county board must adopt a resolution, after holding a public
hearing, authorizing a higher tax rate and file a copy of the
resolution with the county auditor on or before October 20,
1999, and each year thereafter. A county auditor is prohibited
from fixing a tax rate for purposes other than to pay general
obligation bonds for taxes payable in the following year that is
higher than the rate certified under clause (3) if a resolution
has not been filed, unless the higher rate is due solely to a
reduction in the taxing jurisdiction's net tax capacity
certified under clause (2) resulting from classification
changes, exemptions, tax court judgments, or clerical or
administrative errors made by the county. For purposes of this
section, "public hearing" includes, but is not limited to,
regularly scheduled city council hearings and county board
meetings.
Sec. 3. Minnesota Statutes 1998, 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;
(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.; and
(13) to pay the operating or maintenance costs of a county
jail as authorized in section 641.01 or 641.262, or of a
correctional facility as defined in section 241.021, subdivision
1, paragraph (5), to the extent that the county can demonstrate
to the commissioner of revenue that the amount has been included
in the county budget as a direct result of a rule, minimum
requirement, minimum standard, or directive of the department of
corrections. If the county utilizes this special levy, any
amount levied by the county in the previous levy year for the
purposes specified under this clause and included in the
county's previous year's levy limitation computed under section
275.71, shall be deducted from the levy limit base under section
275.71, subdivision 2, when determining the county's current
year levy limitation. The county shall provide the necessary
information to the commissioner of revenue for making this
determination.
Sec. 4. Minnesota Statutes 1998, 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 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.
(c) The levy limit base for a city with a population
greater than 2,500 for taxes levied in 1999 is limited to its
adjusted levy limit base in the previous year, subject to
adjustments under section 275.72.
(d) The levy limit base for a county for taxes levied in
1999 is limited to the difference between (1) its adjusted levy
limit base in the previous year subject to adjustments under
section 275.72, and (2) one-half of the county's share of the
net cost to the state for assumption of district court costs, as
reported by the supreme court to the commissioner of revenue
under section 273.1398, subdivision 4a, paragraph (a).
Sec. 5. Minnesota Statutes 1998, section 275.71,
subdivision 3, is amended to read:
Subd. 3. [ADJUSTED LEVY LIMIT BASE.] For taxes levied in
1998 and 1999, 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 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. 6. Minnesota Statutes 1998, section 275.71,
subdivision 4, is amended to read:
Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in
1998 and 1999, 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, (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. 7. Minnesota Statutes 1998, section 465.82, is
amended by adding a subdivision to read:
Subd. 4. [DIFFERENTIAL TAXATION.] The plan for cooperation
and combination adopted in accordance with subdivision 1 may
establish that the tax rate of the local government unit with
the lesser tax rate prior to the effective date of combination
shall be increased in substantially equal proportions over not
more than six years to equality with the tax rate on the
property already within the borders of the local unit of
government with the higher tax rate. The appropriate period of
time, if any, for transition to the higher tax rate shall be
based on the time reasonably required to effectively provide
equal municipal services to the residents of the local unit of
government with the lower tax rate.
Sec. 8. Minnesota Statutes 1998, section 473.252,
subdivision 2, is amended to read:
Subd. 2. [SOURCES OF FUNDS.] The council shall credit to
the tax base revitalization account within the fund the amount,
if any, provided for under subdivision 4, and the amount, if
any, distributed to the council under section 473F.08,
subdivision 3b.
Sec. 9. Laws 1988, chapter 645, section 3, is amended to
read:
Sec. 3. [TAX; PAYMENT OF EXPENSES.]
(a) The tax levied by the hospital district under Minnesota
Statutes, section 447.34, must not be levied at a rate that
exceeds 2 mills .0063 percent of taxable market value. The
proceeds
(b) .0048 percent of taxable market value of that tax in
paragraph (a) may be used only for acquisition, betterment, and
maintenance of the district's hospital and nursing home
facilities and equipment, and not for administrative or salary
expenses.
(c) .0015 percent of taxable market value of the tax in
paragraph (a) may be used solely for the purpose of capital
expenditures as it relates to ambulance acquisitions for the
Cook ambulance service and the Orr ambulance service and not for
administrative or salary expenses.
The part of the levy referred to in paragraph (c) must be
administered by the Cook Hospital and passed on directly to the
Cook area ambulance service board and the city of Orr to be held
in trust until funding for a new ambulance is needed by either
the Cook ambulance service or the Orr ambulance service.
Sec. 10. Laws 1997, chapter 231, article 3, section 9, is
amended to read:
Sec. 9. [EFFECTIVE DATE.]
Sections 1 and 3 to 7, as amended by Laws 1998, chapter
389, article 4, sections 1 to 6, are effective for taxes levied
in 1997 and 1998 through 1999, payable in 1998 and 1999 through
2000.
Upon compliance with Minnesota Statutes, section 645.021,
subdivision 3, by the governing body of Faribault county or the
city of Blue Earth, section 8 is effective for taxes levied in
1997 and 1998 through 1999 in the county or city that approves
it.
Sec. 11. [CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.]
Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding other
law to the contrary, the Carlton county board of commissioners
may levy in and for the unorganized township of Sawyer an amount
up to $1,000 annually for cemetery purposes, beginning with
taxes payable in 2000 and ending with taxes payable in 2009.
Subd. 2. [EFFECTIVE DATE.] This section is effective June
1, 1999, without local approval.
Sec. 12. [COUNTY OF GOODHUE; LEVY LIMITS AND AID
ADJUSTMENTS.]
Subdivision 1. [LEVY LIMIT BASE.] The levy limit base of
the county of Goodhue for taxes levied in 1999 under Minnesota
Statutes, section 275.71, subdivision 2, is increased by
$422,324.
Subd. 2. [TEMPORARY COUNTY AGRICULTURAL AND HOMESTEAD
CREDIT AID ADJUSTMENTS.] For aids paid in calendar year 1999
only, the county of Goodhue shall receive an additional aid
payment of $422,324 under the provisions of Minnesota Statutes,
section 273.1398. For aids paid in calendar years 2000 and
2001, the aid paid to the county of Goodhue under section
273.1398, subdivision 2, shall be reduced by $211,162. The
additional aid paid in 1999 shall not be included in calculating
any limitation on levies or expenditures in calendar year 1999
but the reductions in calendar years 2000 and 2001 shall be
included in calculating any limitation on levies or expenditures.
Subd. 3. [APPROPRIATION.] $422,324 is appropriated in
fiscal year 2000 to the commissioner of revenue from the general
fund to make the payment under subdivision 2.
Subd. 4. [EFFECTIVE DATE.] Subdivision 1 is effective for
taxes levied in 1999 upon compliance with the governing body of
the county of Goodhue with Minnesota Statutes, section 645.021,
subdivision 3. Subdivision 2 is effective for aids payable in
calendar years 1999 to 2001.
Sec. 13. [CITY OF GRANT; LEVY LIMITS.]
Subdivision 1. [LEVY LIMIT BASE INCREASE.] The levy limit
base for the city of Grant for taxes levied in 1999 under
Minnesota Statutes, section 275.71, subdivision 2, is increased
by an amount equal to the difference between (1) the amount the
city would have raised if it had imposed a tax rate equal to
one-third of the statewide average city tax effort rate for
taxes payable in 1999, as defined in Minnesota Statutes, section
477A.011, subdivision 35, on its net tax capacity for taxes
payable in 1999, as defined in Minnesota Statutes, section
477A.011, subdivision 20; and (2) the amount it levied for taxes
payable in 1999.
Subd. 2. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is
effective upon compliance by the governing body of the city of
Grant with Minnesota Statutes, section 645.021, subdivision 3,
for taxes levied in 1999, payable in 2000.
Sec. 14. [NORTH FORK CROW RIVER WATERSHED DISTRICT.]
Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding
Minnesota Statutes, section 103D.905, subdivision 3, the North
Fork Crow River watershed district may annually levy up to
.04836 percent of taxable market value, or $140,000, whichever
is less, for its administrative fund.
Subd. 2. [EFFECTIVE DATE.] This section is effective
without local approval beginning with taxes levied in 1999,
payable in 2000.
Sec. 15. [SAUK RIVER WATERSHED DISTRICT.]
Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding
Minnesota Statutes, section 103D.905, subdivision 3, the Sauk
river watershed district may annually levy up to $200,000 for
its administrative fund for taxes payable in 2000, 2001, 2002,
2003, and 2004.
Subd. 2. [EFFECTIVE DATE.] This section is effective the
day following final enactment.
Sec. 16. [CITY OF STILLWATER; DIVISION INTO URBAN AND
RURAL SERVICE DISTRICTS.]
Notwithstanding the provisions of Minnesota Statutes,
section 272.67, subdivisions 1 and 6, in order to carry out an
orderly annexation agreement entered into for the annexation of
a part or all of Stillwater township, the city of Stillwater may
divide its area into urban service districts and rural service
districts constituting separate taxing districts for the purpose
of all municipal property taxes including those levied for the
payment of bonds and judgments and interest on them.
Sec. 17. [REPEALER.]
Minnesota Statutes 1998, section 473.252, subdivisions 4
and 5, are repealed.
Sec. 18. [EFFECTIVE DATE.]
Sections 3 to 6 and 10 are effective for taxes levied in
1999, and payable in 2000. Section 7 is effective the day
following final enactment for taxes levied in 1999 and
thereafter. Sections 8 and 17 are effective for taxes levied in
1999, payable in 2000, and thereafter.
The .0015 percent of taxable market value levy described in
section 9, paragraph (c), is effective for the cities of Cook
and Orr and the counties of St. Louis and Koochiching for
affected parts of those counties on January 1, 2000, to be
requested in the year 2000, with the first payment to be
received in 2001.
ARTICLE 7
SPECIAL TAXES
Section 1. Minnesota Statutes 1998, section 60A.19,
subdivision 6, is amended to read:
Subd. 6. [RETALIATORY PROVISIONS.] (1) When by the laws of
any other state or country any taxes, fines, deposits,
penalties, licenses, or fees, other than assessments made by an
insurance guaranty association or similar organization, in
addition to or in excess of those imposed by the laws of this
state upon foreign insurance companies and their agents doing
business in this state, other than assessments by an insurance
guaranty association or similar organization organized under the
laws of this state, are imposed on insurance companies of this
state and their agents doing business in that state or country,
or when any conditions precedent to the right to do business in
that state are imposed by the laws thereof, beyond those imposed
upon these foreign companies by the laws of this state, the same
taxes, fines, deposits, penalties, licenses, fees, and
conditions precedent shall be imposed upon every similar
insurance company of that state or country and their agents
doing or applying to do business in this state so long as these
foreign laws remain in force. Special purpose obligations or
assessments, including assessments by an insurance guaranty
association, joint underwriting association or similar
organization, or assessments imposed in connection with
particular kinds of insurance, are not taxes, licenses, or fees
as these terms are used in this section.
(2) In the event that a domestic insurance company, after
complying with all reasonable laws and rulings of any other
state or country, is refused permission by that state or country
to transact business therein after the commissioner of commerce
of Minnesota has determined that that company is solvent and
properly managed and after the commissioner has so certified to
the proper authority of that other state or country, then, and
in every such case, the commissioner may forthwith suspend or
cancel the certificate of authority of every insurance company
organized under the laws of that other state or country to the
extent that it insures, or seeks to insure, in this state
against any of the risks or hazards which that domestic company
seeks to insure against in that other state or country. Without
limiting the application of the foregoing provision, it is
hereby determined that any law or ruling of any other state or
country which prescribes to a Minnesota domestic insurance
company the premium rate or rates for life insurance issued or
to be issued outside that other state or country shall not be
reasonable.
(3) This section does not apply to insurance companies
organized or domiciled in a state or country, the laws of which
do not impose retaliatory taxes, fines, deposits, penalties,
licenses, or fees or which grant, on a reciprocal basis,
exemptions from retaliatory taxes, fines, deposits, penalties,
licenses, or fees to insurance companies domiciled in this state.
Sec. 2. Minnesota Statutes 1998, section 296A.16, is
amended by adding a subdivision to read:
Subd. 4a. [UNDYED KEROSENE; REFUNDS.] Notwithstanding
subdivision 1, the commissioner shall allow a refund of the tax
paid on undyed kerosene used exclusively for a purpose other
than as fuel for a motor vehicle using the streets and
highways. To obtain a refund, the person making the sale to an
end user must meet the Internal Revenue Service requirements for
sales from a blocked pump. A claim for a refund may be filed as
provided in this section.
Sec. 3. Minnesota Statutes 1998, section 296A.16, is
amended by adding a subdivision to read:
Subd. 4b. [RACING GASOLINE; REFUNDS.] Notwithstanding
subdivision 1, the commissioner shall allow a licensed
distributor a refund of the tax paid on leaded gasoline of 110
octane or more that does not meet ASTM specification D4814 for
gasoline and that is sold in bulk for use in nonregistered motor
vehicles. A claim for a refund may be filed as provided for in
this section.
Sec. 4. Minnesota Statutes 1998, section 297E.01, is
amended by adding a subdivision to read:
Subd. 17a. [BUSINESS DAY.] "Business day" means Monday
through Friday, excluding any holidays as defined in section
645.44.
Sec. 5. Minnesota Statutes 1998, 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, pull-tab deals or games;
and (2) tipboards purchased and placed into inventory after June
30, 1988 tipboard deals or games; and (3) items listed in
section 297E.01, subdivision 8, clauses (4) and (5), at the rate
of 9.5 9 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. 6. Minnesota Statutes 1998, section 297E.02,
subdivision 3, is amended to read:
Subd. 3. [COLLECTION; DISPOSITION.] Taxes imposed by this
section other than in subdivision 4 are due and payable to the
commissioner when the gambling tax return is required to be
filed. Taxes imposed by subdivision 4 are due and payable to
the commissioner on or before the last business day of the month
following the month in which the taxable sale was made. Returns
covering the taxes imposed under this section must be filed with
the commissioner on or before the 20th day of the month
following the close of the previous calendar month. The
commissioner may require that the returns be filed via magnetic
media or electronic data transfer. The proceeds, along with the
revenue received from all license fees and other fees under
sections 349.11 to 349.191, 349.211, and 349.213, must be paid
to the state treasurer for deposit in the general fund.
Sec. 7. Minnesota Statutes 1998, 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 1.9 1.8 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 1.9 1.8 percent of the face value of the unsold
pull-tab or tipboard tickets, provided that the refund or credit
will be 1.95 1.85 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 2000 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. 8. Minnesota Statutes 1998, 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 1.9 1.8 percent of the
amount over $500,000, but
not over $700,000
Over $700,000, but not over
$900,000 $3,800 $3,600 plus 3.8
3.6 percent of the amount
over $700,000, but
not over $900,000
Over $900,000 $11,400 $10,800 plus 5.7
5.4 percent of the
amount over $900,000
Sec. 9. Minnesota Statutes 1998, section 297F.01,
subdivision 23, is amended to read:
Subd. 23. [WHOLESALE PRICE.] "Wholesale price" means the
established price for which a manufacturer or person sells a
tobacco product to a distributor, exclusive of any discount or
other reduction.
Sec. 10. Minnesota Statutes 1998, section 297F.17,
subdivision 6, is amended to read:
Subd. 6. [TIME LIMIT FOR BAD DEBT DEDUCTION REFUND.]
Claims for refund must be filed with the commissioner within one
year of during the one-year period beginning with the timely
filing date of the taxpayer's federal income tax return
containing the bad debt deduction that is being claimed.
Claimants under this subdivision are subject to the notice
requirements of section 289A.38, subdivision 7.
Sec. 11. Minnesota Statutes 1998, section 297H.05, is
amended to read:
297H.05 [SELF-HAULERS.]
(a) A self-hauler of mixed municipal solid waste shall pay
the tax to the operator of the waste management facility to
which the waste is delivered at the rate imposed under section
297H.03, based on the sales price of the waste management
services.
(b) A self-hauler of non-mixed-municipal solid waste shall
pay the tax to the operator of the waste management facility to
which the waste is delivered at the rate imposed under section
297H.04.
(c) The tax imposed on the self-hauler of
non-mixed-municipal solid waste may be based either on the
capacity of the container, the actual volume, or the
weight-to-volume conversion schedule in paragraph (d). However,
the tax must be calculated by the operator using the same method
for calculating the tipping fee so that both are calculated
according to container capacity, actual volume, or weight.
(d) The weight-to-volume conversion schedule for:
(1) construction debris as defined in section 115A.03,
subdivision 7, is one ton equals 3.33 cubic yards, or $2 per
ton;
(2) industrial waste as defined in section 115A.03,
subdivision 13a, is equal to 60 cents per cubic yard. The
commissioner of revenue, after consultation with the
commissioner of the pollution control agency, shall determine,
and may publish by notice, a conversion schedule for various
industrial wastes; and
(3) infectious waste as defined in section 116.76,
subdivision 12, and pathological waste as defined in section
116.76, subdivision 14, is 150 pounds equals one cubic yard, or
60 cents per 150 pounds.
(e) For mixed municipal solid waste the tax is imposed upon
the difference between the market price and the tip fee at a
processing or disposal facility if the tip fee is less than the
market price and the political subdivision subsidizes the cost
of service at the facility. The political subdivision is liable
for the tax.
Sec. 12. Minnesota Statutes 1998, section 297H.06,
subdivision 2, is amended to read:
Subd. 2. [MATERIALS.] The tax is not imposed upon charges
to generators of mixed municipal solid waste or upon the volume
of non-mixed-municipal solid waste for waste management services
to manage the following materials:
(1) mixed municipal solid waste and non-mixed-municipal
solid waste generated outside of Minnesota;
(2) recyclable materials that are separated for recycling
by the generator, collected separately from other waste, and
recycled, to the extent the price of the service for handling
recyclable material is separately itemized;
(3) recyclable non-mixed-municipal solid waste that is
separated for recycling by the generator, collected separately
from other waste, delivered to a waste facility for the purpose
of recycling, and recycled;
(4) industrial waste, when it is transported to a facility
owned and operated by the same person that generated it;
(5) mixed municipal solid waste from a recycling facility
that separates or processes recyclable materials and reduces the
volume of the waste by at least 85 percent, provided that the
exempted waste is managed separately from other waste;
(6) recyclable materials that are separated from mixed
municipal solid waste by the generator, collected and delivered
to a waste facility that recycles at least 85 percent of its
waste, and are collected with mixed municipal solid waste that
is segregated in leakproof bags, provided that the mixed
municipal solid waste does not exceed five percent of the total
weight of the materials delivered to the facility and is
ultimately delivered to a waste facility identified as a
preferred waste management facility in county solid waste plans
under section 115A.46;
(7) through December 31, 2002, source-separated compostable
waste, if the waste is delivered to a facility exempted as
described in this clause. To initially qualify for an
exemption, a facility must apply for an exemption in its
application for a new or amended solid waste permit to the
pollution control agency. The first time a facility applies to
the agency it must certify in its application that it will
comply with the criteria in items (i) to (v) and the
commissioner of the agency shall so certify to the commissioner
of revenue who must grant the exemption. For each subsequent
calendar year, by October 1 of the preceding year, the facility
must apply to the agency for certification to renew its
exemption for the following year. The application must be filed
according to the procedures of, and contain the information
required by, the agency. The commissioner of revenue shall
grant the exemption if the commissioner of the pollution control
agency finds and certifies to the commissioner of revenue that
based on an evaluation of the composition of incoming waste and
residuals and the quality and use of the product:
(i) generators separate materials at the source;
(ii) the separation is performed in a manner appropriate to
the technology specific to the facility that:
(A) maximizes the quality of the product;
(B) minimizes the toxicity and quantity of residuals; and
(C) provides an opportunity for significant improvement in
the environmental efficiency of the operation;
(iii) the operator of the facility educates generators, in
coordination with each county using the facility, about
separating the waste to maximize the quality of the waste stream
for technology specific to the facility;
(iv) process residuals do not exceed 15 percent of the
weight of the total material delivered to the facility; and
(v) the final product is accepted for use; and
(8) waste and waste by-products for which the tax has been
paid; and
(9) daily cover for landfills that has been approved in
writing by the Minnesota pollution control agency.
Sec. 13. [EFFECTIVE DATES.]
Section 1 is effective for taxable years beginning after
December 31, 1999. Section 2 is effective retroactively for
sales made after June 30, 1998. Section 3 is effective
retroactively for sales made after January 31, 1999. Section 4
is effective August 1, 1999. Sections 5, 7, and 8 are effective
July 1, 1999. Section 6 is effective for taxes first becoming
due on or after August 1, 1999. Sections 9 and 12 are effective
the day following final enactment. Section 10 is effective for
refund claims filed on or after July 1, 1999. Section 11 is
effective for services provided on or after July 1, 1999.
ARTICLE 8
MINNESOTACARE TAXES
Section 1. Minnesota Statutes 1998, section 295.50,
subdivision 4, is amended to read:
Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care
provider" means:
(1) a person whose health care occupation is regulated or
required to be regulated by the state of Minnesota furnishing
any or all of the following goods or services directly to a
patient or consumer: medical, surgical, optical, visual,
dental, hearing, nursing services, drugs, laboratory, diagnostic
or therapeutic services;
(2) a person who provides goods and services not listed in
clause (1) that qualify for reimbursement under the medical
assistance program provided under chapter 256B;
(3) a staff model health plan company;
(4) an ambulance service required to be licensed; or
(5) a person who sells or repairs hearing aids and related
equipment or prescription eyewear.
(b) Health care provider does not include: (1) hospitals;
medical supplies distributors, except as specified under
paragraph (a), clause (5); nursing homes licensed under chapter
144A or licensed in any other jurisdiction; pharmacies; surgical
centers; bus and taxicab transportation, or any other providers
of transportation services other than ambulance services
required to be licensed; supervised living facilities for
persons with mental retardation or related conditions, licensed
under Minnesota Rules, parts 4665.0100 to 4665.9900; residential
care homes licensed under chapter 144B; board and lodging
establishments providing only custodial services that are
licensed under chapter 157 and registered under section 157.17
to provide supportive services or health supervision services;
adult foster homes as defined in Minnesota Rules, part
9555.5105; day training and habilitation services for adults
with mental retardation and related conditions as defined in
section 252.41, subdivision 3; and boarding care homes, as
defined in Minnesota Rules, part 4655.0100.;
(c) For purposes of this subdivision, "directly to a
patient or consumer" includes goods and services provided in
connection with independent medical examinations under section
65B.56 or other examinations for purposes of litigation or
insurance claims.
(2) home health agencies as defined in Minnesota Rules,
part 9505.0175, subpart 15; a person providing personal care
services and supervision of personal care services as defined in
Minnesota Rules, part 9505.0335; a person providing private duty
nursing services as defined in Minnesota Rules, part 9505.0360;
and home care providers required to be licensed under chapter
144A;
(3) a person who employs health care providers solely for
the purpose of providing patient services to its employees; and
(4) an educational institution that employs health care
providers solely for the purpose of providing patient services
to its students if the institution does not receive fee for
service payments or payments for extended coverage.
Sec. 2. Minnesota Statutes 1998, section 295.52,
subdivision 7, is amended to read:
Subd. 7. [TAX REDUCTION.] (a) Notwithstanding subdivisions
1, 1a, 2, 3, and 4, the tax imposed under this section equals
for calendar years 1998 and, 1999 shall be equal to, 2000, and
2001, 1.5 percent of the gross revenues received on or after
January 1, 1998, and before January 1, 2000. The commissioner
shall extend the reduced tax rate of 1.5 percent for gross
revenues received on or after January 1, 2000, and before
January 1, 2002, if the commissioner of finance determines that
the health care access fund structural balance projected for
fiscal year 2001 will remain positive, prior to any increase of
the one percent premium tax under section 60A.15, subdivision 1,
paragraph (h), and prior to any tax expenditures related to the
increase in the maximum tax credit for research expenses under
section 295.53, subdivision 4a, as amended by Laws 1997, chapter
225 2002.
Sec. 3. Minnesota Statutes 1998, section 295.53,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTIONS.] (a) The following payments
are excluded from the gross revenues subject to the hospital,
surgical center, or health care provider taxes under sections
295.50 to 295.57:
(1) payments received for services provided under the
Medicare program, including payments received from the
government, and organizations governed by sections 1833 and 1876
of title XVIII of the federal Social Security Act, United States
Code, title 42, section 1395, and enrollee deductibles,
coinsurance, and copayments, whether paid by the Medicare
enrollee or by a Medicare supplemental coverage as defined in
section 62A.011, subdivision 3, clause (10). Payments for
services not covered by Medicare are taxable;
(2) medical assistance payments including payments received
directly from the government or from a prepaid plan;
(3) payments received for home health care services;
(4) payments received from hospitals or surgical centers
for goods and services on which liability for tax is imposed
under section 295.52 or the source of funds for the payment is
exempt under clause (1), (2), (7), (8), or (10), or (13);
(5) payments received from health care providers for goods
and services on which liability for tax is imposed under this
chapter or the source of funds for the payment is exempt under
clause (1), (2), (7), (8), or (10), or (13);
(6) amounts paid for legend drugs, other than nutritional
products, to a wholesale drug distributor who is subject to tax
under section 295.52, subdivision 3, reduced by reimbursements
received for legend drugs under clauses (1), (2), (7), and (8);
(7) payments received under the general assistance medical
care program including payments received directly from the
government or from a prepaid plan;
(8) payments received for providing services under the
MinnesotaCare program including payments received directly from
the government or from a prepaid plan and enrollee deductibles,
coinsurance, and copayments. For purposes of this clause,
coinsurance means the portion of payment that the enrollee is
required to pay for the covered service;
(9) payments received by a health care provider or the
wholly owned subsidiary of a health care provider for care
provided outside Minnesota to a patient who is not domiciled in
Minnesota;
(10) payments received from the chemical dependency fund
under chapter 254B;
(11) payments received in the nature of charitable
donations that are not designated for providing patient services
to a specific individual or group;
(12) payments received for providing patient services
incurred through a formal program of health care research
conducted in conformity with federal regulations governing
research on human subjects. Payments received from patients or
from other persons paying on behalf of the patients are subject
to tax;
(13) payments received from any governmental agency for
services benefiting the public, not including payments made by
the government in its capacity as an employer or insurer;
(14) payments received for services provided by community
residential mental health facilities licensed under Minnesota
Rules, parts 9520.0500 to 9520.0690, community support programs
and family community support programs approved under Minnesota
Rules, parts 9535.1700 to 9535.1760, and community mental health
centers as defined in section 245.62, subdivision 2;
(15) government payments received by a regional treatment
center;
(16) payments received for hospice care services;
(17) payments received by a health care provider for
hearing aids and related equipment or prescription eyewear
delivered outside of Minnesota;
(18) payments received by a post-secondary an educational
institution from student tuition, student activity fees, health
care service fees, government appropriations, donations, or
grants. Fee for service payments and payments for extended
coverage are taxable; and
(19) payments received for services provided by: assisted
living programs and congregate housing programs;
(20) payments received from nursing homes licensed under
chapter 144A for services provided to a nursing home; and
(21) payments received for examinations for purposes of
utilization reviews, insurance claims or eligibility,
litigation, and employment, including reviews of medical records
for those purposes.
(b) Payments received by wholesale drug distributors for
legend drugs sold directly to veterinarians or veterinary bulk
purchasing organizations are excluded from the gross revenues
subject to the wholesale drug distributor tax under sections
295.50 to 295.59.
Sec. 4. Minnesota Statutes 1998, section 295.55,
subdivision 2, is amended to read:
Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a)
Each hospital or surgical center must make estimated payments of
the taxes for the calendar year in monthly installments to the
commissioner within 15 days after the end of the month.
(b) Estimated tax payments are not required of hospitals or
surgical centers if: (1) the tax for the current calendar year
is less than $500; or (2) the tax for the previous calendar year
is less than $500, if the taxpayer had a tax liability and was
doing business the entire year; or (3) if a hospital has been
allowed a grant under section 144.1484, subdivision 2, for the
year.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270.75, from the due date of the
payment until paid or until the due date of the annual return at
the rate specified in section 270.75 whichever comes first. An
underpayment of an estimated installment is the difference
between the amount paid and the lesser of (1) 90 percent of
one-twelfth of the tax for the calendar year or (2) one-twelfth
of the total tax for the actual gross revenues received during
the month previous calendar year if the taxpayer had a tax
liability and was doing business the entire year.
Sec. 5. Minnesota Statutes 1998, section 295.55,
subdivision 3, is amended to read:
Subd. 3. [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each
taxpayer, other than a hospital or surgical center, must make
estimated payments of the taxes for the calendar year in
quarterly installments to the commissioner by April 15, July 15,
October 15, and January 15 of the following calendar year.
(b) Estimated tax payments are not required if: (1) the
tax for the current calendar year is less than $500; or (2) the
tax for the previous calendar year is less than $500, if the
taxpayer had a tax liability and was doing business the entire
year.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270.75, from the due date of the
payment until paid or until the due date of the annual return at
the rate specified in section 270.75 whichever comes first. An
underpayment of an estimated installment is the difference
between the amount paid and the lesser of (1) 90 percent of
one-quarter of the tax for the calendar year or (2) one-quarter
of the total tax for the actual gross revenues received during
the quarter previous calendar year if the taxpayer had a tax
liability and was doing business the entire year.
Sec. 6. Minnesota Statutes 1998, section 295.57, is
amended by adding a subdivision to read:
Subd. 4. [SAMPLING TECHNIQUES.] The commissioner may use
statistical or other sampling techniques consistent with
generally accepted auditing standards in examining returns or
records and making assessments.
Sec. 7. [HEALTH CARE ACCESS FUND TRANSFER.]
$27,000,000 is appropriated for fiscal year 2000;
$27,000,000 is appropriated for fiscal year 2001; and
$30,900,000 is appropriated for fiscal year 2002 from the
general fund to the commissioner of finance for deposit in the
health care access fund under Minnesota Statutes, section
16A.724.* (The preceding section was vetoed by the governor.)
Sec. 8. [EFFECTIVE DATE.]
The provisions of section 1, striking paragraph (c), and
section 3, clause (21), are effective for services provided
after December 31, 1998. The rest of section 1, the rest of
section 3 and sections 4 and 5 are effective for payments
received on or after January 1, 2000. Section 6 is effective
the day following final enactment.
ARTICLE 9
TACONITE TAXATION
Section 1. Minnesota Statutes 1998, section 298.24,
subdivision 1, is amended to read:
Subdivision 1. (a) For concentrate produced in 1997 and
1998 1999, 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 $2.141 per gross ton of
merchantable iron ore concentrate produced therefrom.
(b) For concentrates produced in 1999 2000 and subsequent
years, the tax rate shall be equal to the preceding year's tax
rate plus an amount equal to the preceding year's tax rate
multiplied by the percentage increase in the implicit price
deflator from the fourth quarter of the second preceding year to
the fourth quarter of the preceding year. "Implicit price
deflator" for the gross national product means the implicit
price deflator prepared by the bureau of economic analysis of
the United States Department of Commerce.
(c) 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 $2.141 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. 2. Minnesota Statutes 1998, 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, 1999, and 2000
and 20.4 cents per ton for distributions in 1997 shall, 2001,
and 2002 must 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. 3. Minnesota Statutes 1998, section 298.28,
subdivision 9b, is amended to read:
Subd. 9b. [TACONITE ENVIRONMENTAL FUND.] Five cents per
ton for distributions in 1998, 1999, and 2000 shall, 2001, and
2002 must 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. 4. Minnesota Statutes 1998, 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, grants, or equity investments 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, 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, 1999.
Sec. 5. [MINNESOTA MINERALS 21ST CENTURY FUND
APPROPRIATION.]
Subdivision 1. [APPROPRIATION.] $20,000,000 is
appropriated in fiscal year 2000 from the general fund to the
Minnesota minerals 21st century fund, if a bill styled as H.F.
No. 2390 is enacted in 1999 and creates such a fund.
Notwithstanding any other law enacted during the 1999 regular
legislative session, the maximum total appropriation authorized
for the purposes of the Minnesota minerals 21st century fund
under all laws enacted during the 1999 regular legislative
session is $20,000,000. Any amounts appropriated in any other
law enacted during the 1999 legislative session that would cause
the appropriation to exceed $20,000,000 are canceled. This
limitation does not apply to the appropriation transfer
contained in 1999 H.F. No. 2390, article 2, section 71.
Subd. 2. [MATCHING REQUIREMENT.] If a bill styled as H.F.
No. 2390 is enacted in 1999 and it provides for creation of the
Minnesota minerals 21st century fund, the commissioner of the
iron range resources and rehabilitation board shall, upon the
recommendation of the board, match the funds allocated under
subdivision 1 to the extent they are used for a loan or equity
investment meeting the requirements of the provision creating
the Minnesota minerals 21st century fund within H.F. No. 2390.
Notwithstanding Minnesota Statutes, section 645.33, this
subdivision supersedes any contrary provisions of H.F. No. 2390
that is enacted in 1999.
ARTICLE 10
TAX INCREMENT FINANCING
Section 1. Minnesota Statutes 1998, section 273.1399,
subdivision 6, is amended to read:
Subd. 6. [EXEMPT DISTRICTS.] (a) The provisions of this
section do not apply to exempt tax increment financing districts
as specified by this subdivision.
(b) A tax increment financing district for an ethanol
production facility that satisfies all of the following
requirements is exempt:
(1) The district is an economic development district, that
qualifies under section 469.176, subdivision 4c, paragraph (a),
clause (1).
(2) The facility is certified by the commissioner of
agriculture to qualify for state payments for ethanol
development under section 41A.09 to the extent funds are
available.
(3) Increments from the district are used only to finance
the qualifying ethanol development project located in the
district or to pay for administrative costs of the district.
(4) The district is located outside of the seven-county
metropolitan area, as defined in section 473.121.
(5) The tax increment financing plan was approved by a
resolution of the county board.
(6) The exemption provided by this paragraph applies until
the first year after the total amount of increment for the
district exceeds $1,500,000. The county auditor shall notify
the commissioner of revenue of the expiration of the exemption
by June 1 of the year in which the auditor projects the revenues
from increments will exceed $1,500,000. On or before the
expiration of the exemption, the municipality may elect to make
a qualifying local contribution under paragraph (d) in lieu of
the state aid reduction.
(c) A qualified housing district is exempt.
(d)(1) A district is exempt if the municipality elects at
the time of approving the tax increment financing plan for the
district to make a qualifying local contribution. To qualify
for the exemption in each year, the authority or the
municipality must make a qualifying local contribution equal to
the listed percentages of increment from the district or
subdistrict:
(A) for an economic development district, a housing
district, or a renewal and renovation district, ten percent;
(B) for a redevelopment district, a housing district, a
mined underground space district, a hazardous substance
subdistrict, or a soils condition district, five percent.
(2) If the municipality elects to make a qualifying
contribution and fails to make the required contribution for a
year, the state aid reduction applies for the year. The state
aid reduction equals the greater of (A) the required local
contribution or (B) the amount of the aid reduction that applies
under subdivision 3. For a district exempt under paragraph (b),
no qualifying local contribution is required for years in which
the district is exempt.
(3)(A) If the sum of required local contributions for all
districts in the municipality exceeds two percent of city net
tax capacity as defined in section 477A.011, subdivision 20, for
a year, the municipality's total required local contribution for
that year is limited to two percent of net tax capacity to
qualify for the exemption under this subdivision. The
municipality may allocate the contribution among the districts
on which it has made elections as it determines appropriate.
(B) If a municipality makes an election under this
subdivision for a district in a year in which item (A) applies,
a minimum annual qualifying contribution must be made for the
district equal to the lesser of 0.25 percent of city net tax
capacity or three percent of increment revenues. This minimum
contribution applies for the life of the district for each year
that the restriction in item (A) applies and is in addition to
the contribution required by item (A).
(4) The amount of the local contribution must be made out
of unrestricted money of the authority or municipality, such as
the general fund, a property tax levy, or a federal or a state
grant-in-aid which may be spent for general government
purposes. The local contribution may not be made, directly or
indirectly, with tax increments or developer payments as defined
under section 469.1766. The local contribution must be used to
pay project costs and cannot be used for general government
purposes or for improvements or costs that the authority or
municipality planned to incur absent the project. The authority
or municipality may request contributions from other local
government entities that will benefit from the district's
activities. These contributions reduce the local contribution
required of the municipality or authority by this paragraph.
Cities, counties, towns, and schools may contribute to paying
these costs, notwithstanding any other law to the contrary.
(5) The municipality may make a local contribution in
excess of the required contribution for a year. If it does so,
the municipality may credit the excess to a local contribution
account for the district. The balance in the account may be
used to meet the requirements for qualifying local contributions
for later years. No interest or investment earnings may be
credited or imputed to the account, except those (A) actually
paid by the municipality out of its unrestricted funds or by
another person or entity, other than a developer as used in
section 469.1766, and (B) used as required for a qualifying
local contribution.
(6) If the state contributes to the project costs through a
direct grant or similar incentive, the required local
contribution is reduced by one-half of the dollar amount of the
state grant or other similar incentive.
Sec. 2. Minnesota Statutes 1998, section 469.176,
subdivision 4g, is amended to read:
Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a) These
revenues shall not be used to circumvent existing levy limit
law. No revenues derived from tax increment from any district,
whether certified before or after August 1, 1979, shall be used
for the acquisition, construction, renovation, operation, or
maintenance of a building to be used primarily and regularly for
conducting the business of a municipality, county, school
district, or any other local unit of government or the state or
federal government or for a commons area used as a public park,
or a facility used for social, recreational, or conference
purposes. This provision shall not prohibit the use of revenues
derived from tax increments for the construction or renovation
of a parking structure, a commons area used as a public park, or
a facility used for social, recreational, or conference purposes
and not primarily for conducting the business of the
municipality or of a privately owned facility for conference
purposes.
(b) If any publicly owned facility used for social,
recreational, or conference purposes and financed in whole or in
part from revenues derived from a district is operated or
managed by an entity other than the authority, the operating and
management policies of the facility must be approved by the
governing body of the authority.
(c)(1) Tax increments may not be used to pay for the cost
of public improvements, equipment, or other items, if:
(i) the improvements, equipment, or other items are located
outside of the area of the tax increment financing district from
which the increments were collected; and
(ii) the improvements, equipment, or items that (i)
primarily serve a decorative or aesthetic purpose, or (ii) serve
a functional purpose, but their cost is increased by more than
100 percent as a result of the selection of materials, design,
or type as compared with more commonly used materials, designs,
or types for similar improvements, equipment, or items.
(2) The provisions of this paragraph do not apply to
expenditures related to the rehabilitation of historic
structures that are:
(i) individually listed on the National Register of
Historic Places; or
(ii) a contributing element to a historic district listed
on the National Register of Historic Places.
Sec. 3. Minnesota Statutes 1998, section 469.1763, is
amended by adding a subdivision to read:
Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This
subdivision applies only to districts for which the request for
certification was made before June 2, 1997.
(b) The municipality for the district may transfer
available increments from another tax increment financing
district located in the municipality, if the transfer is
necessary to eliminate a deficit in the district to which the
increments are transferred. A deficit in the district for
purposes of this subdivision means the lesser of the following
two amounts:
(1)(i) the amount due during the calendar year to pay
preexisting obligations of the district; minus
(ii) the total increments to be collected from properties
located within the district that are available for the calendar
year, plus
(iii) total increments from properties located in other
districts in the municipality that are available to be used to
meet the district's obligations under this section, excluding
this subdivision, or other provisions of law (but excluding a
special tax under section 469.1791 and the grant program under
Laws 1997, chapter 231, article 1, section 19); or
(2) the reduction in increments collected from properties
located in the district for the calendar year as a result of the
changes in class rates in Laws 1997, chapter 231, article 1;
Laws 1998, chapter 389, article 2; and this act.
(c) A preexisting obligation means bonds issued and sold
before June 2, 1997, and bonds issued to refund such bonds or to
reimburse expenditures made in conjunction with a signed
contractual agreement entered into before June 2, 1997, to the
extent that the bonds are secured by a pledge of increments from
the tax increment financing district. For purposes of this
subdivision, bonds exclude an obligation to reimburse or pay a
developer or owner of property located in the district for
amounts incurred or paid by the developer or owner.
(d) The municipality may require a development authority,
other than a seaway port authority, to transfer available
increments for any of its tax increment financing districts in
the municipality to make up an insufficiency in another district
in the municipality, regardless of whether the district was
established by the development authority or another development
authority. This authority applies notwithstanding any law to
the contrary, but applies only to a development authority that:
(1) was established by the municipality; or
(2) the governing body of which is appointed, in whole or
part, by the municipality or an officer of the municipality or
which consists, in whole or part, of members of the governing
body of the municipality.
(e) The authority under this subdivision to spend tax
increments outside of the area of the district from which the
tax increments were collected:
(1) may only be exercised after obtaining approval of the
use of the increments, in writing, by the commissioner of
revenue;
(2) is an exception to the restrictions under section
469.176, subdivision 4i, and the other provisions of this
section, and the percentage restrictions under subdivision 2
must be calculated after deducting increments spent under this
subdivision from the total increments for the district; and
(3) applies notwithstanding the provisions of the tax
increment financing act in effect for districts for which the
request for certification was made before June 30, 1982, or any
other law to the contrary.
Sec. 4. [469.1764] [PRE-1982 DISTRICTS; POOLING RULES.]
Subdivision 1. [SCOPE; APPLICATION.] (a) This section
applies to a tax increment financing district or area added to a
district, if the request for certification of the district or
the area added to the district was made after July 31, 1979, and
before July 1, 1982.
(b) This section, section 469.1763, subdivision 6, and any
special law applying to the district are the exclusive authority
to spend tax increments on activities located outside of the
geographic area of a tax increment financing district that is
subject to this section.
(c) This section does not apply to increments from a
district that is subject to the provisions of this section, if:
(1) the district was decertified before the enactment of
this section and all increments spent on activities located
outside of the geographic area of the district were repaid and
distributed as excess increments under section 469.176,
subdivision 2; or
(2) the use of increments on activities located outside of
the geographic area of the district consists solely of payment
of debt service on bonds under section 469.129, subdivision 2,
and any bonds issued to refund bonds issued under that
subdivision.
Subd. 2. [STATE AUDITOR NOTIFICATION.] By August 1, 1999,
the state auditor shall notify in writing each authority for
which the auditor has records that the authority has a district
subject to this section.
Subd. 3. [RATIFICATION OF PAST SPENDING.] (a) The
following expenditures of increments on activities located
outside of the geographic area of a district subject to this
section are permitted:
(1) expenditures made before the earlier of (i)
notification by the state auditor or (ii) December 31, 1999; and
(2) expenditures to pay preexisting outside district
obligations.
Subd. 4. [DECERTIFICATION REQUIRED.] (a) The provisions of
this subdivision apply to any tax increment financing district
subject to this section, if increments from the district were
used on activities located outside of the geographic area of the
district.
(b) After December 31, 1999, any tax increments received by
the authority from a district subject to this subdivision may be
expended only to pay:
(1) preexisting in-district obligations;
(2) preexisting outside district obligations; and
(3) administrative expenses.
After all preexisting obligations have been paid or
defeased, the district must be decertified and any remaining
increments distributed as excess increments under section
469.176, subdivision 2.
Subd. 5. [DEFINITIONS.] (a) "Notification by the state
auditor" means the receipt by the authority or the municipality
of the final written notification from the state auditor that
its expenditures of increments from the district on activities
located outside of the geographic area of the district were not
in compliance with state law.
(b) "Preexisting outside district obligations" means:
(1) bonds secured by increments from a district subject to
this section and used to finance activities outside the
geographic area of the district, if the bonds were issued and
the pledge of increment was made before the earlier of (i)
notification by the state auditor, or (ii) April 1, 1999;
(2) bonds issued to refund bonds qualifying under clause
(1), if the refunding bonds do not increase the total amount of
tax increments required to pay the refunded bonds; and
(3) binding written agreements secured by the increments
from the district subject to this section and used to finance
activities outside the geographic area of the district, if the
agreement was entered before the earlier of (i) notification by
the state auditor or (ii) May 1, 1999.
(c) "Preexisting in-district obligations" means:
(1) bonds secured by increments from a district subject to
this section and not used to finance activities outside of the
geographic area of the district, if the bonds were issued and
the pledge of increments was made before April 1, 1999;
(2) bonds issued to refund bonds qualifying under clause
(1), if the refunding bonds do not increase the total amount of
tax increments required to pay the refunded bonds; and
(3) binding written agreements secured by increments from a
district subject to this section and not used to finance
activities outside of the geographic area of the district, if
the agreements were entered into and the pledge of increments
was made before June 30, 1999.
Sec. 5. Minnesota Statutes 1998, section 469.1771,
subdivision 1, is amended to read:
Subdivision 1. [ENFORCEMENT.] (a) The owner of taxable
property located in the city, town, school district, or county
in which the tax increment financing district is located may
bring suit for equitable relief or for damages, as provided in
subdivisions 3 and 4, arising out of a failure of a municipality
or authority to comply with the provisions of sections 469.174
to 469.179, or related provisions of this chapter. The
prevailing party in a suit filed under the preceding sentence is
entitled to costs, including reasonable attorney fees.
(b) The state auditor may examine and audit political
subdivisions' use of tax increment financing. Without previous
notice, the state auditor may examine or audit accounts and
records on a random basis as the auditor deems to be in the
public interest. If the state auditor finds evidence that an
authority or municipality has violated a provision of the law
for which a remedy is provided under this section, the state
auditor shall forward the relevant information to the county
attorney. The county attorney may bring an action to enforce
the provisions of sections 469.174 to 469.179 or related
provisions of this chapter, for matters referred by the state
auditor or on behalf of the county. If the county attorney
determines not to bring an action or if the county attorney has
not brought an action within 12 months after receipt of the
initial notification by the state auditor of the violation, the
county attorney shall notify the state auditor in writing.
(c) If the state auditor finds an authority is not in
compliance with sections 469.174 to 469.179 or related
provisions of law, the auditor shall notify the governing body
of the municipality that approved the tax increment financing
district of its findings. The governing body of the
municipality must respond in writing to the state auditor within
60 days after receiving the notification. Its written response
must state whether the municipality accepts, in whole or part,
the auditor's findings. If the municipality does not accept the
findings, the statement must indicate the basis for its
disagreement. The state auditor shall annually summarize the
responses it receives under this section and send the summary
and copies of the responses to the chairs of the committees of
the legislature with jurisdiction over tax increment financing.
(d) The state auditor shall notify the attorney general in
writing and provide supporting materials for a violation found
by the auditor, if the:
(1) auditor receives notification from the county attorney
under paragraph (b) or receives no notification for a 12-month
period after initially notifying the county attorney and the
state auditor confirms with the county attorney or the
municipality that no action has been brought regarding the
matter; and
(2) municipality or development authority have not
eliminated or resolved the violation to the satisfaction of the
state auditor.
The auditor shall provide the municipality and development
authority a copy of the notification sent to the attorney
general.
Sec. 6. Minnesota Statutes 1998, section 469.1771, is
amended by adding a subdivision to read:
Subd. 2b. [ACTION TO SUSPEND TIF AUTHORITY.] (a) Upon
receipt of a notification from the state auditor under
subdivision 1, paragraph (d), the attorney general shall review
the materials submitted by the auditor and any materials
submitted by the municipality and development authority. If the
attorney general finds that the municipality or development
authority violated a provision of the law enumerated in
subdivision 1 and that the violation was substantial, the
attorney general shall file a petition in the tax court to
suspend the authority of the municipality and development
authority to exercise tax increment financing powers.
(b) Before filing a petition under this subdivision, the
attorney shall attempt to resolve the matter using appropriate
alternative dispute resolution procedures, such as those under
sections 572.31 to 572.40.
(c) If the tax court finds that the municipality or
development authority failed to comply with the law and that the
noncompliance was substantial, the court shall suspend the
authority of the municipality or development to exercise tax
increment financing powers. The court shall set the period of
the suspension for a period not to exceed five years. In
determining the length of the suspension, the court may consider:
(1) the substantiality of the violation or violations;
(2) the dollar amount of the violation or violations;
(3) the sophistication of the municipality or development
authority;
(4) the extent to which the municipality or development
authority violated a clear and unambiguous requirement of the
law;
(5) whether the municipality or development authority
continued to violate the law after receiving notification from
the state auditor that it was not in compliance with the law;
(6) the extent to which the municipality or development
authority engaged in a pattern of violations; and
(7) any other factors the court determines are relevant to
whether the municipality or development authority's authority to
exercise tax increment financing powers should be suspended.
(d) For purposes of this subdivision, the exercise of tax
increment financing powers means:
(1) the authority to request certification of a new tax
increment financing district or the addition of area to an
existing tax increment financing district;
(2) the authority to issue bonds under section 469.178;
(3) the authority to amend a tax increment financing plan
to authorize new activities or expenditures.
Sec. 7. Minnesota Statutes 1998, section 469.1791,
subdivision 3, is amended to read:
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 under
section 469.1763, subdivision 6. 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.
Sec. 8. Minnesota Statutes 1998, section 469.1813,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORITY.] The governing body of a
political subdivision may grant an abatement of the taxes
imposed by the political subdivision on a parcel of property, or
defer the payments of the taxes and abate the interest and
penalty that otherwise would apply, if:
(a) it expects the benefits to the political subdivision of
the proposed abatement agreement to at least equal the costs to
the political subdivision of the proposed agreement; and
(b) it finds that doing so is in the public interest
because it will:
(1) increase or preserve tax base;
(2) provide employment opportunities in the political
subdivision;
(3) provide or help acquire or construct public facilities;
(4) help redevelop or renew blighted areas; or
(5) help provide access to services for residents of the
political subdivision; or
(6) finance or provide public infrastructure.
Sec. 9. Minnesota Statutes 1998, section 469.1813, is
amended by adding a subdivision to read:
Subd. 1a. [USE OF TERM.] As used in this section and
sections 469.1814 and 469.1815, "abatement" includes a deferral
of taxes with abatement of interest and penalties unless the
context indicates otherwise.
Sec. 10. Minnesota Statutes 1998, section 469.1813,
subdivision 2, is amended to read:
Subd. 2. [ABATEMENT RESOLUTION.] (a) The governing body of
a political subdivision may grant an abatement only by adopting
an abatement resolution, specifying the terms of the abatement.
In the case of a town, the board of supervisors may approve the
abatement resolution. The resolution must also include a
specific statement as to the nature and extent of the public
benefits which the governing body expects to result from the
agreement. The resolution may provide that the political
subdivision will retain or transfer to another political
subdivision the abatement to pay for all or part of the cost of
acquisition or improvement of public infrastructure, whether or
not located on or adjacent to the parcel for which the tax is
abated. The abatement may reduce all or part of the property
tax levied by amount for the political subdivision on the
parcel. A political subdivision's maximum annual amount for a
parcel equals its total local tax rate multiplied by the total
net tax capacity of the parcel.
(b) The political subdivision may limit the abatement:
(1) to a specific dollar amount per year or in total;
(2) to the increase in property taxes resulting from
improvement of the property;
(3) to the increases in property taxes resulting from
increases in the market value or tax capacity of the
property; or
(4) in any other manner the governing body of the
subdivision determines is appropriate; or
(5) to the interest and penalty that would otherwise be due
on taxes that are deferred.
(c) The political subdivision may not abate tax
attributable to the value of the land or the areawide tax under
chapter 276A or 473F, except as provided in this subdivision.
Sec. 11. Minnesota Statutes 1998, section 469.1813, is
amended by adding a subdivision to read:
Subd. 6a. [DEFERMENT PAYMENT SCHEDULE.] When the tax is
deferred and the interest and penalty abated, the political
subdivision must set a schedule for repayments. The deferred
payment must be included with the current taxes due and payable
in the years the deferred payments are due and payable and must
be levied accordingly.
Sec. 12. Minnesota Statutes 1998, section 469.1813,
subdivision 3, is amended to read:
Subd. 3. [SCHOOL DISTRICT ABATEMENT PROCEDURE ABATEMENTS.]
Notwithstanding the amounts in subdivision 2, a school district
that grants an abatement under this section must limit the
abatement for any property to not more than an amount equal to
the product of: (1) the property's net tax capacity, and (2)
the difference between the district's total tax rate for that
year and one-half of the general education tax rate for that
year. An abatement granted under this section is not an
abatement for purposes of state aid or local levy under sections
127A.40 to 127A.51.
Sec. 13. Minnesota Statutes 1998, section 469.1813,
subdivision 6, is amended to read:
Subd. 6. [DURATION LIMIT.] (a) A political subdivision
other than a school district may grant an abatement for a period
no longer than ten years. The subdivision may specify in the
abatement resolution a shorter duration. If the resolution does
not specify a period of time, the abatement is for eight years.
If an abatement has been granted to a parcel of property and the
period of the abatement has expired, the political subdivision
that granted the abatement may not grant another abatement for
eight years after the expiration of the first abatement. This
prohibition does not apply to improvements added after and not
subject to the first abatement.
(b) A school district may grant an abatement for only one
year at a time. Once a school district has authorized an
abatement for a property, it may reauthorize the abatement in
any subsequent year for the next seven years, or nine years if
provided in the original abatement agreement. This prohibition
does not apply to improvements added after and not subject to
the original abatement agreement.
Sec. 14. Minnesota Statutes 1998, section 469.1813, is
amended by adding a subdivision to read:
Subd. 9. [CONSENT OF PROPERTY OWNER NOT REQUIRED.] A
political subdivision may abate the taxes on a parcel under
sections 469.1812 to 469.1815 without obtaining the consent of
the property owner.
Sec. 15. Minnesota Statutes 1998, section 469.1815,
subdivision 2, is amended to read:
Subd. 2. [PROPERTY TAXES; ABATEMENT PAYMENT.] The total
property taxes shall be levied on the property and shall be due
and payable to the county at the times provided under section
279.01. The political subdivision will pay the abatement to the
property owner, lessee, or a representative of the
bondholders or will retain the abatement to pay public
infrastructure costs, as provided by the abatement resolution.
Sec. 16. Laws 1997, chapter 231, article 1, section 19,
subdivision 1, is amended to read:
Subdivision 1. [TIF GRANTS.] (a) The commissioner of
revenue shall pay grants to municipalities for deficits in tax
increment financing districts caused by the changes in class
rates under this act. Municipalities must submit applications
for the grants in a form prescribed by the commissioner by no
later than March August 1 for grants payable during the calendar
year. The maximum grant equals the lesser of:
(1) for taxes payable in the year before the grant is paid,
the reduction in the tax increment financing district's revenues
derived from increment resulting from the class rate changes in
this article, Laws 1998, chapter 389, article 2, and those
enacted in the 1999 regular legislative session; or
(2) the municipality's total tax increments, including
unspent increments from previous years, less the amount due
during the calendar year to pay (i) bonds issued and sold before
the day following final enactment of this act and (ii) binding
contracts entered into before the day following final enactment
of this act.
(b) The commissioner of revenue may require applicants for
grants or pooling authority under this section to provide any
information the commissioner deems appropriate. The
commissioner shall calculate the amount under paragraph (a),
clause (2), based on the reports for the tax increment financing
district or districts filed with the state auditor on or before
July August 1 of the year before the year in which the grant is
to be paid.
(c) This subdivision applies only to deficits in tax
increment financing districts for which:
(1) the request for certification was made before the
enactment date of this act; and
(2) all timely reports have been filed with the state
auditor, as required by Minnesota Statutes, section 469.175.
(d) The commissioner shall pay the grants under this
subdivision by December 26 of the year.
(e) $2,000,000 is appropriated to the commissioner of
revenue to make grants under this section. This appropriation
is available until expended or this section expires under
subdivision 3, whichever is earlier. If the amount of grant
entitlements for a year exceed the appropriation, the
commissioner shall reduce each grant proportionately so the
total equals the amount available.
Sec. 17. Laws 1997, chapter 231, article 1, section 19,
subdivision 3, is amended to read:
Subd. 3. [EXPIRATION.] This section expires on January 1,
2001 2002.
Sec. 18. [CITY OF ONAMIA; USE OF TAX INCREMENT FINANCING.]
Subdivision 1. [APPLICATION OF TIME LIMIT.] For tax
increment financing district No. 1-1, established April 14,
1993, by the city of Onamia, Minnesota Statutes, section
469.1763, subdivision 3, applies to the qualified portion of the
district by permitting a period of ten years for commencement of
activities within the district. As used in this section,
"qualified portion of the district" means only that portion of
the district consisting of three parcels fronting on U.S. 169.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
approval by the governing body of the city of Onamia and
compliance with Minnesota Statutes, section 645.021, subdivision
3.
Sec. 19. [ST. CLOUD HOUSING AND REDEVELOPMENT AUTHORITY.]
Subdivision 1. [TAX INCREMENT POOLING.] Notwithstanding
the provisions of Minnesota Statutes, section 469.1763,
subdivision 2, and the provisions of the tax increment financing
act in effect for districts established by the St. Cloud housing
and redevelopment authority for which the request for
certification was made after August 1, 1979, and before June 30,
1982, revenue derived from tax increments paid by properties in
the districts may be expended through a development fund or
otherwise within other tax increment districts established by
the authority to finance the redevelopment of commercial
properties outside of tax increment financing districts which
were destroyed or impacted in a natural gas explosion on
December 11, 1998.
Subd. 2. [EFFECTIVE DATE.] This section is effective the
day after compliance with Minnesota Statutes, section 645.021,
subdivision 3.
Sec. 20. [CITY OF ST. PAUL.]
Subdivision 1. [DELAY OF DEEMED COMMENCEMENT OF TAX
INCREMENT FINANCING DISTRICT.] Notwithstanding Minnesota
Statutes, section 469.176, or any other law to the contrary, the
duration limit of the Williams Hill tax increment district in
the city of St. Paul is determined as if the date of receipt of
the first tax increment by the authority occurs when the
aggregate of all tax increments received from the district
reaches $2,000. In no case may the duration limit of the
district be extended by more than two years.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
approval by and compliance with Minnesota Statutes, sections
469.1782, subdivision 2, and 645.021, subdivision 3, by the
governing body of the city of St. Paul.
Sec. 21. [CITY OF JACKSON; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding
the provisions of Minnesota Statutes, section 469.176,
subdivision 1c, full tax increments from U.S. 71/I-90 tax
increment financing district in the city of Jackson must be paid
to and may be retained by the city of Jackson through taxes
payable in 2002. The amount to be retained by the city is
limited to $170,000. Any increments received during the
extension in excess of $170,000 must be returned as excess
increments under Minnesota Statutes, section 469.176,
subdivision 2.
Subd. 2. [EFFECTIVE DATE.] This section is effective the
day after compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 3.
Sec. 22. [CITY OF MINNEOTA; TAX INCREMENT FINANCING.]
Subdivision 1. [ACTIONS RATIFIED.] The expenditure of tax
increments on administrative expenses and public utility or
other improvements by the city of Minneota for its tax increment
financing district, adopted by city resolution 4-15-85A, are
ratified and deemed to be authorized by the tax increment
financing plan for the district.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance by the governing body of the city of Minneota with
Minnesota Statutes, section 645.021, subdivision 3.
Sec. 23. [CITY OF FRIDLEY, TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [EXTENSION OF TIME.] (a) Notwithstanding
the provisions of Minnesota Statutes, section 469.176,
subdivision 1b, upon approval of the governing body of the city
of Fridley, the Fridley housing and redevelopment authority may,
by resolution, extend the duration of tax increment financing
district No. 6 located in the city of Fridley. The housing and
redevelopment authority may not extend the duration beyond
December 31, 2025.
(b) The provisions of Minnesota Statutes, sections
273.1399, subdivision 8, and 469.1782, subdivision 1, apply to
this district if extended, except that the maximum state aid
reduction for a year may not exceed the least of the following
amounts:
(1) the amount under Minnesota Statutes, section 469.1782,
subdivision 1;
(2) $200,000, plus one-half of (the amount under Minnesota
Statutes, section 469.1782, subdivision 1, minus $200,000);
(3) 2.5 percent of the net tax capacity of the city; or
(4) five percent of the prior year's tax increment from the
district.
(c) Notwithstanding any law to the contrary, effective upon
approval of this section, no increments may be spent on
activities located outside of the area of the district, other
than for administrative expenses, sanitary sewer, and the costs
of trunk highway No. 65 and other road improvements that are a
direct result of development occurring within the area of the
district.
(d) In the taxes payable year that the district would be
terminated under general law, the original net tax capacity of
tax increment financing district No. 6 must be increased by the
net tax capacity of 200,000 square feet of building
improvements, exclusive of parking structures.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance with the requirements of Minnesota Statutes, sections
469.1782, subdivision 2, and 645.021.
Sec. 24. [CITY OF BROOKLYN CENTER; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [CHANGE OF FISCAL DISPARITIES
ELECTION.] Notwithstanding Minnesota Statutes, section 469.177,
subdivision 3, paragraph (c), the governing body of the city of
Brooklyn Center may change its election of the computation of
tax increment for tax increment district No. 4 under Minnesota
Statutes, section 469.177, subdivision 3, from the method of
computation in paragraph (b) to the method in paragraph (a) of
that provision.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
approval by the governing body of the city of Brooklyn Center
and compliance with Minnesota Statutes, section 645.021,
subdivision 3.
Sec. 25. [CITY OF DAWSON; TAX INCREMENT DISTRICT.]
Subdivision 1. [DISTRICT EXTENDED.] Notwithstanding
Minnesota Statutes, section 469.176, subdivision 1b, the Dawson
economic development authority may collect tax increments from
tax increment financing district No. 7 for a period of 18 years
after receipt by the authority of the first increment.
Subd. 2. [EFFECTIVE DATE; APPLICABILITY.] Subdivision 1 is
effective upon compliance with Minnesota Statutes, sections
469.1782, subdivision 2, and 645.021, subdivision 3.
Sec. 26. [MINNEAPOLIS; TAX INCREMENT FINANCING.]
Subdivision 1. [SOCIAL AND RECREATIONAL FACILITIES.] The
provisions of section 2 do not apply to the Mill Ruins Park and
Milwaukee Road Depot tax increment financing districts and to a
district designated in the future that contains the former
federal reserve bank building in the city of Minneapolis.
Subd. 2. [EFFECTIVE DATE.] This section is effective upon
compliance by the city of Minneapolis with the requirements of
Minnesota Statutes 1998, section 645.021, subdivision 3.
Sec. 27. [APPROPRIATION; TIF GRANTS.]
$4,000,000 is appropriated to the commissioner of revenue
for purposes of grants under Laws 1997, chapter 231, article 1,
section 19, to municipalities to offset deficits in tax
increment financing districts.
Sec. 28. [REPEALER.]
Laws 1997, chapter 231, article 1, section 19, subdivision
2, is repealed.
Sec. 29. [EFFECTIVE DATE.]
Section 1 is effective for requests for certification of a
new district or for the addition of geographic area to a
district made after June 30, 1999.
Section 2 is effective for all tax increment financing
districts, regardless of when the request for certification was
made, but does not apply to (1) expenditures made before January
1, 2000; (2) expenditures made under a binding contract entered
before January 1, 2000; or (3) expenditures made under a binding
contract entered pursuant to a letter of intent with the
developer or contractor if the letter of intent was entered
before January 1, 2000.
Section 3 is effective for all districts for which the
request for certification was made before June 2, 1997.
Section 4 is effective the day following final enactment
and applies to districts for which the request for certification
was made after July 31, 1979, and before July 1, 1982.
Sections 5 and 6 apply to all districts for which the
request for certification was made after August 1, 1979, but is
limited to final letters of noncompliance issued by the state
auditor after December 31, 1999.
Sections 8 to 17, and 28 are effective the day following
final enactment.
ARTICLE 11
STATE FUNDING OF DISTRICT COURTS
TRANSFER OF FINES, FEES, AND OTHER MONEY TO STATE
Section 1. Minnesota Statutes 1998, section 97A.065,
subdivision 2, is amended to read:
Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and
forfeited bail collected from prosecutions of violations of:
the game and fish laws; sections 84.091 to 84.15; sections 84.81
to 84.91; section 169.121, when the violation involved an
off-road recreational vehicle as defined in section 169.01,
subdivision 86; chapter 348; and any other law relating to wild
animals or aquatic vegetation, must be paid to the treasurer of
the county where the violation is prosecuted. The county
treasurer shall submit one-half of the receipts to the
commissioner and credit the balance to the county general
revenue fund except as provided in paragraphs (b), (c), and
(d). In a county in a judicial district under section 480.181,
subdivision 1, paragraph (b), as added in 1999 S.F. No. 2221,
article 7, section 26, the share that would otherwise go to the
county under this paragraph must be submitted to the state
treasurer for deposit in the state treasury and credited to the
general fund.
(b) The commissioner must reimburse a county, from the game
and fish fund, for the cost of keeping prisoners prosecuted for
violations under this section if the county board, by
resolution, directs: (1) the county treasurer to submit all
fines and forfeited bail to the commissioner; and (2) the county
auditor to certify and submit monthly itemized statements to the
commissioner.
(c) The county treasurer shall submit one-half of the
receipts collected under paragraph (a) from prosecutions of
violations of sections 84.81 to 84.91, and 169.121, except
receipts that are surcharges imposed under section 357.021,
subdivision 6, to the state treasurer and credit the balance to
the county general fund. The state treasurer shall credit these
receipts to the snowmobile trails and enforcement account in the
natural resources fund.
(d) The county treasurer shall indicate the amount of the
receipts that are surcharges imposed under section 357.021,
subdivision 6, and shall submit all of those receipts to the
state treasurer.
Sec. 2. Minnesota Statutes 1998, 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. 3. Minnesota Statutes 1998, section 273.1398, is
amended by adding a subdivision to read:
Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15,
1999, the supreme court shall determine and certify to the
commissioner of revenue for each county, other than counties
located in the eighth judicial district, the county's share of
the costs assumed under 1999 S.F. No. 2221, article 7, during
the fiscal year beginning July 1, 2000, less an amount equal to
the county's share of transferred fines collected by the
district courts in the county during calendar year 1998.
(b) Payments to a county under subdivision 2 or section
273.166 for calendar year 2000 must be permanently reduced by an
amount equal to 75 percent of the net cost to the state for
assumption of district court costs as certified in paragraph (a).
(c) Payments to a county under subdivision 2 or section
273.166 for calendar year 2001 must be permanently reduced by an
amount equal to 25 percent of the net cost to the state for
assumption of district court costs as certified in paragraph (a).
Sec. 4. Minnesota Statutes 1998, section 299D.03,
subdivision 5, is amended to read:
Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines
and forfeited bail money, from traffic and motor vehicle law
violations, collected from persons apprehended or arrested by
officers of the state patrol, shall be paid by the person or
officer collecting the fines, forfeited bail money or
installments thereof, on or before the tenth day after the last
day of the month in which these moneys were collected, to the
county treasurer of the county where the violation occurred.
Three-eighths of these receipts shall be credited to the general
revenue fund of the county, except that in a county in a
judicial district under section 480.181, subdivision 1,
paragraph (b), as added in 1999 S.F. No. 2221, article 7,
section 26, this three-eighths share must be transmitted to the
state treasurer for deposit in the state treasury and credited
to the general fund. The other five-eighths of these receipts
shall be transmitted by that officer to the state treasurer and
shall be credited as follows:
(1) In the fiscal year ending June 30, 1991, the first
$275,000 in money received by the state treasurer after June 4,
1991, must be credited to the transportation services fund, and
the remainder in the fiscal year credited to the trunk highway
fund.
(2) In fiscal year 1992, the first $215,000 in money
received by the state treasurer in the fiscal year must be
credited to the transportation services fund, and the remainder
credited to the trunk highway fund.
(3) In fiscal years 1993 and subsequent years, the entire
amount received by the state treasurer must be credited to the
trunk highway fund. If, however, the violation occurs within a
municipality and the city attorney prosecutes the offense, and a
plea of not guilty is entered, one-third of the receipts shall
be credited to the general revenue fund of the county, one-third
of the receipts shall be paid to the municipality prosecuting
the offense, and one-third shall be transmitted to the state
treasurer as provided in this subdivision. All costs of
participation in a nationwide police communication system
chargeable to the state of Minnesota shall be paid from
appropriations for that purpose.
(b) Notwithstanding any other provisions of law, all fines
and forfeited bail money from violations of statutes governing
the maximum weight of motor vehicles, collected from persons
apprehended or arrested by employees of the state of Minnesota,
by means of stationary or portable scales operated by these
employees, shall be paid by the person or officer collecting the
fines or forfeited bail money, on or before the tenth day after
the last day of the month in which the collections were made, to
the county treasurer of the county where the violation
occurred. Five-eighths of these receipts shall be transmitted
by that officer to the state treasurer and shall be credited to
the highway user tax distribution fund. Three-eighths of these
receipts shall be credited to the general revenue fund of the
county, except that in a county in a judicial district under
section 480.181, subdivision 1, paragraph (b), as added in 1999
S.F. No. 2221, article 7, section 26, this three-eighths share
must be transmitted to the state treasurer for deposit in the
state treasury and credited to the general fund.
Sec. 5. Minnesota Statutes 1998, section 357.021,
subdivision 1a, is amended to read:
Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a)
Every person, including the state of Minnesota and all bodies
politic and corporate, who shall transact any business in the
district court, shall pay to the court administrator of said
court the sundry fees prescribed in subdivision 2. Except as
provided in paragraph (d), the court administrator shall
transmit the fees monthly to the state treasurer for deposit in
the state treasury and credit to the general fund.
(b) In a county which has a screener-collector position,
fees paid by a county pursuant to this subdivision shall be
transmitted monthly to the county treasurer, who shall apply the
fees first to reimburse the county for the amount of the salary
paid for the screener-collector position. The balance of the
fees collected shall then be forwarded to the state treasurer
for deposit in the state treasury and credited to the general
fund. In a county in the eighth a judicial district under
section 480.181, subdivision 1, paragraph (b), as added in 1999
S.F. No. 2221, article 7, section 26, which has a
screener-collector position, the fees paid by a county shall be
transmitted monthly to the state treasurer for deposit in the
state treasury and credited to the general fund. A
screener-collector position for purposes of this paragraph is an
employee whose function is to increase the collection of fines
and to review the incomes of potential clients of the public
defender, in order to verify eligibility for that service.
(c) No fee is required under this section from the public
authority or the party the public authority represents in an
action for:
(1) child support enforcement or modification, medical
assistance enforcement, or establishment of parentage in the
district court, or child or medical support enforcement
conducted by an administrative law judge in an administrative
hearing under section 518.5511;
(2) civil commitment under chapter 253B;
(3) the appointment of a public conservator or public
guardian or any other action under chapters 252A and 525;
(4) wrongfully obtaining public assistance under section
256.98 or 256D.07, or recovery of overpayments of public
assistance;
(5) court relief under chapter 260;
(6) forfeiture of property under sections 169.1217 and
609.531 to 609.5317;
(7) recovery of amounts issued by political subdivisions or
public institutions under sections 246.52, 252.27, 256.045,
256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, and
260.251, or other sections referring to other forms of public
assistance;
(8) restitution under section 611A.04; or
(9) actions seeking monetary relief in favor of the state
pursuant to section 16D.14, subdivision 5.
(d) The fees collected for child support modifications
under subdivision 2, clause (13), must be transmitted to the
county treasurer for deposit in the county general fund. The
fees must be used by the county to pay for child support
enforcement efforts by county attorneys.
Sec. 6. Minnesota Statutes 1998, 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.
(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 $20,000,000 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. 7. Minnesota Statutes 1998, section 485.018,
subdivision 5, is amended to read:
Subd. 5. [COLLECTION OF FEES.] The court administrator of
district court shall charge and collect all fees as prescribed
by law and all such fees collected by the court administrator as
court administrator of district court shall be paid to the
county treasurer. Except for those portions of forfeited bail
paid to victims pursuant to existing law, the county treasurer
shall forward all revenue from fees and forfeited bail collected
under chapters 357, 487, and 574 to the state treasurer for
deposit in the state treasury and credit to the general fund,
unless otherwise provided in chapter 611A or other law, in the
manner and at the times prescribed by the state treasurer, but
not less often than once each month. If the defendant or
probationer is located after forfeited bail proceeds have been
forwarded to the state treasurer, the state treasurer shall
reimburse the county, on request, for actual costs expended for
extradition, transportation, or other costs necessary to return
the defendant or probationer to the jurisdiction where the bail
was posted, in an amount not more than the amount of forfeited
bail. All other money must be deposited in the county general
fund unless otherwise provided by law. The court administrator
of district court shall not retain any additional compensation,
per diem or other emolument for services as court administrator
of district court, but may receive and retain mileage and
expense allowances as prescribed by law.
Sec. 8. Minnesota Statutes 1998, section 487.02,
subdivision 2, is amended to read:
Subd. 2. Except as provided in this subdivision, the
county board shall levy taxes annually against the taxable
property within the county as necessary for the establishment,
operation and maintenance of the county court or courts within
the county. Any county in a judicial district under section
480.181, subdivision 1, paragraph (b), as added by 1999 S.F. No.
2221, article 7, section 26, is prohibited from levying property
taxes for these purposes, except for any amounts necessary to
pay the costs incurred in the first six months of calendar year
2000 with respect to counties in the fifth, seventh, and ninth
judicial districts.
Sec. 9. Minnesota Statutes 1998, section 487.32,
subdivision 3, is amended to read:
Subd. 3. A judge of a county court may order any sums
forfeited to be reinstated and the county state treasurer shall
then refund accordingly. The county state treasurer shall
reimburse the court administrator if the court administrator
refunds the deposit upon a judge's order and obtains a receipt
to be used as a voucher.
Sec. 10. Minnesota Statutes 1998, section 487.33,
subdivision 5, is amended to read:
Subd. 5. [ALLOCATION.] The court administrator shall
provide the county treasurer with the name of the municipality
or other subdivision of government where the offense was
committed which employed or provided by contract the arresting
or apprehending officer and the name of the municipality or
other subdivision of government which employed the prosecuting
attorney or otherwise provided for prosecution of the offense
for each fine or penalty and the total amount of fines or
penalties collected for each municipality or other subdivision
of government. On or before the last day of each month, the
county treasurer shall pay over to the treasurer of each
municipality or subdivision of government within the county all
fines or penalties for parking violations for which complaints
and warrants have not been issued and one-third of all fines or
penalties collected during the previous month for offenses
committed within the municipality or subdivision of government
from persons arrested or issued citations by officers employed
by the municipality or subdivision or provided by the
municipality or subdivision by contract. An additional
one-third of all fines or penalties shall be paid to the
municipality or subdivision of government providing prosecution
of offenses of the type for which the fine or penalty is
collected occurring within the municipality or subdivision,
imposed for violations of state statute or of an ordinance,
charter provision, rule or regulation of a city whether or not a
guilty plea is entered or bail is forfeited. Except as provided
in section 299D.03, subdivision 5, or as otherwise provided by
law, all other fines and forfeitures and all fees and statutory
court costs collected by the court administrator shall be paid
to the county treasurer of the county in which the funds were
collected who shall dispense them as provided by law. In a
county in a judicial district under section 480.181, subdivision
1, paragraph (b), as added in 1999 S.F. No. 2221, article 7,
section 26, all other fines, forfeitures, fees, and statutory
court costs must be paid to the state treasurer for deposit in
the state treasury and credited to the general fund.
Sec. 11. Minnesota Statutes 1998, section 574.34,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL.] Fines and forfeitures not
specially granted or appropriated by law shall be paid into the
treasury of the county where they are incurred, except in a
county in a judicial district under section 480.181, subdivision
1, paragraph (b), as added in 1999 S.F. No. 2221, article 7,
section 26, the fines and forfeitures must be deposited in the
state treasury and credited to the general fund.
Sec. 12. [APPROPRIATION.]
$18,731,000 is appropriated for fiscal year 2001 from the
general fund to the district courts for purposes of funding the
district court expenses under this article.
Sec. 13. [EFFECTIVE DATES; CONTINGENCY.]
(a) Sections 2 and 6 are effective for aids payable in
2000. The other provisions of this article providing for the
transfer of fees and fines to the state are effective January 1,
2000, with respect to counties in the eighth judicial district,
and July 1, 2000, with respect to counties in the fifth,
seventh, and ninth judicial districts.
(b) Notwithstanding paragraph (a), this article does not
take effect unless the state assumes the district court costs
under 1999 S.F. No. 2221, article 7.
ARTICLE 12
BUSINESS SUBSIDIES
Section 1. [116J.993] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For the purposes of sections
116J.993 to 116J.995, the terms defined in this section have the
meanings given them.
Subd. 2. [BENEFIT DATE.] "Benefit date" means the date
that the recipient receives the business subsidy. If the
business subsidy involves the purchase, lease, or donation of
physical equipment, then the benefit date begins when the
recipient puts the equipment into service. If the business
subsidy is for improvements to property, then the benefit date
refers to the earliest date of either:
(1) when the improvements are finished for the entire
project; or
(2) when a business occupies the property. If a business
occupies the property and the subsidy grantor expects that other
businesses will also occupy the same property, the grantor may
assign a separate benefit date for each business when it first
occupies the property.
Subd. 3. [BUSINESS SUBSIDY.] "Business subsidy" or
"subsidy" means a state or local government agency grant,
contribution of personal property, real property,
infrastructure, the principal amount of a loan at rates below
those commercially available to the recipient, any reduction or
deferral of any tax or any fee, any guarantee of any payment
under any loan, lease, or other obligation, or any preferential
use of government facilities given to a business.
The following forms of financial assistance are not a
business subsidy:
(1) a business subsidy of less than $25,000;
(2) assistance that is generally available to all
businesses or to a general class of similar businesses, such as
a line of business, size, location, or similar general criteria;
(3) public improvements to buildings or lands owned by the
state or local government that serve a public purpose and do not
principally benefit a single business or defined group of
businesses at the time the improvements are made;
(4) redevelopment property polluted by contaminants as
defined in section 116J.552, subdivision 3;
(5) assistance provided for the sole purpose of renovating
old or decaying building stock or bringing it up to code,
provided that the assistance is equal to or less than 50 percent
of the total cost;
(6) assistance provided to organizations whose primary
mission is to provide job readiness and training services if the
sole purpose of the assistance is to provide those services;
(7) assistance for housing;
(8) assistance for pollution control or abatement;
(9) assistance for energy conservation;
(10) tax reductions resulting from conformity with federal
tax law;
(11) workers' compensation and unemployment compensation;
(12) benefits derived from regulation;
(13) indirect benefits derived from assistance to
educational institutions;
(14) funds from bonds allocated under chapter 474A;
(15) assistance for a collaboration between a Minnesota
higher education institution and a business;
(16) assistance for a tax increment financing soils
condition district as defined under section 469.174, subdivision
19;
(17) redevelopment when the recipient's investment in the
purchase of the site and in site preparation is 70 percent or
more of the assessor's current year's estimated market value;
and
(18) general changes in tax increment financing law and
other general tax law changes of a principally technical nature.
Subd. 4. [GRANTOR.] "Grantor" means any state or local
government agency with the authority to grant a business subsidy.
Subd. 5. [LOCAL GOVERNMENT AGENCY.] "Local government
agency" includes a statutory or home rule charter city, housing
and redevelopment authority, town, county, port authority,
economic development authority, community development agency,
nonprofit entity created by a local government agency, or any
other entity created by or authorized by a local government with
authority to provide business subsidies.
Subd. 6. [RECIPIENT.] "Recipient" means any for-profit or
nonprofit business entity that receives a business subsidy.
Only nonprofit entities with at least 100 full-time equivalent
positions and with a ratio of highest to lowest paid employee,
that exceeds ten to one, determined on the basis of full-time
equivalent positions, are included in this definition.
Subd. 7. [STATE GOVERNMENT AGENCY.] "State government
agency" means any state agency that has the authority to award
business subsidies.
Sec. 2. [116J.994] [REGULATING LOCAL AND STATE BUSINESS
SUBSIDIES.]
Subdivision 1. [PUBLIC PURPOSE.] A business subsidy must
meet a public purpose other than increasing the tax base. Job
retention may only be used as a public purpose in cases where
job loss is imminent and demonstrable.
Subd. 2. [DEVELOPING A SET OF CRITERIA.] A business
subsidy may not be granted until the grantor has adopted
criteria after a public hearing for awarding business subsidies
that comply with this section. The criteria must include a
policy regarding the wages to be paid for the jobs created. The
commissioner of trade and economic development may assist local
government agencies in developing criteria.
Subd. 3. [SUBSIDY AGREEMENT.] (a) A recipient must enter
into a subsidy agreement with the grantor of the subsidy that
includes:
(1) a description of the subsidy, including the amount and
type of subsidy, and type of district if the subsidy is tax
increment financing;
(2) a statement of the public purposes for the subsidy;
(3) goals for the subsidy;
(4) a description of the financial obligation of the
recipient if the goals are not met;
(5) a statement of why the subsidy is needed;
(6) a commitment to continue operations at the site where
the subsidy is used for at least five years after the benefit
date;
(7) the name and address of the parent corporation of the
recipient, if any; and
(8) a list of all financial assistance by all grantors for
the project.
(b) Business subsidies in the form of grants must be
structured as forgivable loans. If a business subsidy is not
structured as a forgivable loan, the agreement must state the
fair market value of the subsidy to the recipient, including the
value of conveying property at less than a fair market price, or
other in-kind benefits to the recipient.
(c) If a business subsidy benefits more than one recipient,
the grantor must assign a proportion of the business subsidy to
each recipient that signs a subsidy agreement. The proportion
assessed to each recipient must reflect a reasonable estimate of
the recipient's share of the total benefits of the project.
(d) The state or local government agency and the recipient
must both sign the subsidy agreement and, if the grantor is a
local government agency, the agreement must be approved by the
local elected governing body, except for the St. Paul Port
Authority and a seaway port authority.
Subd. 4. [WAGE AND JOB GOALS.] The subsidy agreement, in
addition to any other goals, must include: (1) goals for the
number of jobs created, which may include separate goals for the
number of part-time or full-time jobs, or, in cases where job
loss is imminent and demonstrable, goals for the number of jobs
retained; and (2) wage goals for the jobs created or retained.
In addition to other specific goal time frames, the wage
and job goals must contain specific goals to be attained within
two years of the benefit date.
Subd. 5. [PUBLIC NOTICE AND HEARING.] (a) Before granting
a business subsidy that exceeds $500,000 for a state government
grantor and $100,000 for a local government grantor, the grantor
must provide public notice and a hearing on the subsidy. A
public hearing and notice under this subdivision is not required
if a hearing and notice on the subsidy is otherwise required by
law.
(b) Public notice of a proposed business subsidy under this
subdivision by a state government grantor must be published in
the State Register. Public notice of a proposed business
subsidy under this subdivision by a local government grantor
must be published in a local newspaper of general circulation.
The public notice must identify the location at which
information about the business subsidy, including a copy of the
subsidy agreement, is available. Published notice should be
sufficiently conspicuous in size and placement to distinguish
the notice from the surrounding text. The grantor must make the
information available in printed paper copies and, if possible,
on the Internet. The government agency must provide at least a
ten-day notice for the public hearing.
(c) The public notice must include the date, time, and
place of the hearing.
(d) The public hearing by a state government grantor must
be held in St. Paul.
Subd. 6. [FAILURE TO MEET GOALS.] The subsidy agreement
must specify the recipient's obligation if the recipient does
not fulfill the agreement. At a minimum, the agreement must
require a recipient failing to meet subsidy agreement goals to
pay back the assistance plus interest to the grantor provided
that repayment may be prorated to reflect partial fulfillment of
goals. The interest rate must be set at the implicit price
deflator defined under section 275.70, subdivision 2. The
grantor, after a public hearing, may extend for up to one year
the period for meeting the goals provided in a subsidy agreement.
A recipient that fails to meet the terms of a subsidy
agreement may not receive a business subsidy from any grantor
for a period of five years from the date of failure or until a
recipient satisfies its repayment obligation under this
subdivision, whichever occurs first.
Before a grantor signs a business subsidy agreement, the
grantor must check with the compilation and summary report
required by this section to determine if the recipient is
eligible to receive a business subsidy.
Subd. 7. [REPORTS BY RECIPIENTS TO GRANTORS.] (a) A
business subsidy grantor must monitor the progress by the
recipient in achieving agreement goals.
(b) A recipient must provide information regarding goals
and results for two years after the benefit date or until the
goals are met, whichever is later. If the goals are not met,
the recipient must continue to provide information on the
subsidy until the subsidy is repaid. The information must be
filed on forms developed by the commissioner in cooperation with
representatives of local government. Copies of the completed
forms must be sent to the commissioner and the local government
agency that provided the business subsidy. The report must
include:
(1) the type, public purpose, and amount of subsidies and
type of district, if the subsidy is tax increment financing;
(2) the hourly wage of each job created with separate bands
of wages;
(3) the sum of the hourly wages and cost of health
insurance provided by the employer with separate bands of wages;
(4) the date the job and wage goals will be reached;
(5) a statement of goals identified in the subsidy
agreement and an update on achievement of those goals;
(6) the location of the recipient prior to receiving the
business subsidy;
(7) why the recipient did not complete the project outlined
in the subsidy agreement at their previous location, if the
recipient was previously located at another site in Minnesota;
(8) the name and address of the parent corporation of the
recipient, if any;
(9) a list of all financial assistance by all grantors for
the project; and
(10) other information the commissioner may request.
A report must be filed no later than March 1 of each year for
the previous year and within 30 days after the deadline for
meeting the job and wage goals.
(c) Financial assistance that is excluded from the
definition of "business subsidy" by section 116J.993,
subdivision 3, clauses (4), (5), (8), and (16) is subject to the
reporting requirements of this subdivision, except that the
report of the recipient must include:
(1) the type, public purpose, and amount of the financial
assistance, and type of district if the subsidy is tax increment
financing;
(2) progress towards meeting goals stated in the subsidy
agreement and the public purpose of the assistance;
(3) the hourly wage of each job created with separate bands
of wages;
(4) the sum of the hourly wages and cost of health
insurance provided by the employer with separate bands of wages;
(5) the location of the recipient prior to receiving the
assistance; and
(6) other information the grantor requests.
(d) If the recipient does not submit its report, the local
government agency must mail the recipient a warning within one
week of the required filing date. If, after 14 days of the
postmarked date of the warning, the recipient fails to provide a
report, the recipient must pay to the grantor a penalty of $100
for each subsequent day until the report is filed. The maximum
penalty shall not exceed $1,000.
Subd. 8. [REPORTS BY GRANTORS.] (a) Local government
agencies of a local government with a population of more than
2,500 and state government agencies, regardless of whether or
not they have awarded any business subsidies, must file a report
by April 1 of each year with the commissioner. Local government
agencies of a local government with a population of 2,500 or
less are exempt from filing this report if they have not awarded
a business subsidy in the past five years. The local government
agency must include a list of recipients that did not complete
the report and of recipients that have not met their job and
wage goals within two years and the steps being taken to bring
them into compliance or to recoup the subsidy.
If the commissioner has not received the report by April 1
from an entity required to report, the commissioner shall issue
a warning to the government agency. If the commissioner has
still not received the report by June 1 of that same year from
an entity required to report, then that government agency may
not award any business subsidies until the report has been filed.
(b) The commissioner of trade and economic development must
provide information on reporting requirements to state and local
government agencies.
Subd. 9. [COMPILATION AND SUMMARY REPORT.] The department
of trade and economic development must publish a compilation and
summary of the results of the reports for the previous calendar
year by July 1 of each year. The reports of the government
agencies to the department and the compilation and summary
report of the department must be made available to the public.
The commissioner must coordinate the production of reports
so that useful comparisons across time periods and across
grantors can be made. The commissioner may add other
information to the report as the commissioner deems necessary to
evaluate business subsidies. Among the information in the
summary and compilation report, the commissioner must include:
(1) total amount of subsidies awarded in each development
region of the state;
(2) distribution of business subsidy amounts by size of the
business subsidy;
(3) distribution of business subsidy amounts by time
category, such as monthly or quarterly;
(4) distribution of subsidies by type and by public
purpose;
(5) percent of all business subsidies that reached their
goals;
(6) percent of business subsidies that did not reach their
goals by two years from the benefit date;
(7) total dollar amount of business subsidies that did not
meet their goals after two years from the benefit date;
(8) percent of subsidies that did not meet their goals and
that did not receive repayment;
(9) list of recipients that have failed to meet the terms
of a subsidy agreement in the past five years and have not
satisfied their repayment obligations;
(10) number of part-time and full-time jobs within separate
bands of wages; and
(11) benefits paid within separate bands of wages.
Sec. 3. [116J.995] [ECONOMIC GRANTS.]
An appropriation rider in an appropriation to the
department of trade and economic development that specifies that
the appropriation be granted to a particular business or class
of businesses must contain a statement of the expected benefits
associated with the grant. At a minimum, the statement must
include goals for the number of jobs created, wages paid, and
the tax revenue increases due to the grant.
Sec. 4. [REPEALER.]
Minnesota Statutes 1998, section 116J.991, is repealed.
Sec. 5. [EFFECTIVE DATE.]
Sections 1 to 4 are effective for business subsidies
entered into or state appropriations authorized on or after
August 1, 1999.
ARTICLE 13
TAX FORFEITURE AND DELINQUENCY PROCEDURES
Section 1. Minnesota Statutes 1998, section 92.51, is
amended to read:
92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.]
State lands sold by the director become taxable. A
description of the tract sold, with the name of the purchaser,
must be transmitted to the proper county auditor. The auditor
must extend the land for taxation like other land. Only the
interest in the land vested by the land sale certificate in its
holder may be sold for delinquent taxes. Upon production to the
county treasurer of the tax certificate given upon tax sale, in
case the lands have not been redeemed, the tax purchaser has the
right to pay the principal and interest then in default upon the
land sale certificate as its assignee. To redeem from a tax
sale, the person redeeming must pay the county treasurer, for
the holder and owner of the tax sale certificate, in addition to
all sums required to be paid in other cases, all amounts paid by
the holder and owner for interest and principal upon the land
sale certificate, with interest at 12 percent per year. When
the director receives the tax certificate with the county
auditor's certificate of the expiration of the time for
redemption, and the county treasurer's receipt for all
delinquent interest and penalty on the land sale certificate,
the director shall issue the holder and owner of the tax
certificate a special certificate with the same terms and the
same effect as the original land sale certificate.
Sec. 2. Minnesota Statutes 1998, section 279.37,
subdivision 1, is amended to read:
Subdivision 1. [COMPOSITION INTO ONE ITEM.] Delinquent
taxes upon any parcel of real estate may be composed into one
item or amount by confession of judgment at any time prior to
the forfeiture of the parcel of land to the state for taxes, for
the aggregate amount of all the taxes, costs, penalties, and
interest accrued against the parcel, as hereinafter provided in
this section. Taxes upon property which, for the previous
year's assessment, was classified as mineral property,
employment property, or commercial or industrial property shall
are only be eligible to be composed into any confession of
judgment under this section as provided in subdivision
1a. Delinquent taxes for property that has been reclassified
from 4bb to 4b under section 273.1319 may not be composed into a
confession of judgment under this subdivision. Delinquent taxes
on unimproved land are eligible to be composed into a confession
of judgment only if the land is classified as homestead,
agricultural, or timberland in the previous year or is eligible
for installment payment under subdivision 1a. The entire parcel
is eligible for the ten-year installment plan as provided in
subdivision 2 if 25 percent or more of the market value of the
parcel is eligible for confession of judgment under this
subdivision.
Sec. 3. Minnesota Statutes 1998, section 279.37,
subdivision 1a, is amended to read:
Subd. 1a. [CLASS 3A PROPERTY.] (a) The delinquent taxes
upon a parcel of property which was classified class 3a, for the
previous year's assessment and had a total market value of less
than $200,000 or less for that same assessment shall be eligible
to be composed into a confession of judgment. Property
qualifying under this subdivision shall be subject to the same
provisions as provided in this section except as herein provided
in paragraphs (b) to (d).
(a) (b) Current year taxes and penalty due at the time the
confession of judgment is entered must be paid.
(c) The down payment shall must include all special
assessments due in the current tax year, all delinquent special
assessments, and 20 percent of the ad valorem tax, penalties,
and interest accrued against the parcel. The balance
remaining shall be is payable in four equal annual installments;
and
(b) (d) The amounts entered in judgment shall bear interest
at the rate provided in section 279.03, subdivision 1a,
commencing with the date the judgment is entered. The interest
rate is subject to change each year on the unpaid balance in the
manner provided in section 279.03, subdivision 1a.
Sec. 4. Minnesota Statutes 1998, section 279.37,
subdivision 2, is amended to read:
Subd. 2. [INSTALLMENT PAYMENTS.] The owner of any such
parcel, or any person to whom the right to pay taxes has been
given by statute, mortgage, or other agreement, may make and
file with the county auditor of the county wherein in which the
parcel is located a written offer to pay the current taxes each
year before they become delinquent, or to contest the taxes
under Minnesota Statutes 1941, sections 278.01 to 278.13, and
agree to confess judgment for the amount hereinbefore provided,
as determined by the county auditor, and shall thereby waive.
By filing the offer, the owner waives all irregularities in
connection with the tax proceedings affecting the parcel and any
defense or objection which the owner may have to the
proceedings, and shall thereby waive also waives the
requirements of any notice of default in the payment of any
installment or interest to become due pursuant to the composite
judgment to be so entered, and shall tender therewith. With the
offer, the owner shall tender one-tenth of the amount of the
delinquent taxes, costs, penalty, and interest, and shall tender
all current year taxes and penalty due at the time the
confession of judgment is entered. In the offer, the owner
shall agree therein to pay the balance in nine equal
installments, with interest as provided in section 279.03,
payable annually on installments remaining unpaid from time to
time, on or before December 31 of each year following the year
in which judgment was confessed, which. The offer shall must be
substantially as follows:
"To the court administrator of the district court of
........... county, I, ....................., am the owner of
the following described parcel of real estate situate located in
.................... county, Minnesota, to-wit:
.............................. Upon which that real estate there
are delinquent taxes for the year ........., and prior years, as
follows: (here insert year of delinquency and the total amount
of delinquent taxes, costs, interest, and penalty) do hereby.
By signing this document I offer to confess judgment in the sum
of $...... and hereby waive all irregularities in the tax
proceedings affecting such these taxes and any defense or
objection which I may have thereto to them, and direct judgment
to be entered for the amount hereby confessed amount stated
above, less minus the sum of $............, hereby tendered to
be paid with this document, being which is one-tenth of the
amount of said the taxes, costs, penalty, and interest; stated
above. I agree to pay the balance of said the judgment in nine
equal, annual installments, with interest as provided in section
279.03, payable annually, on the installments remaining
unpaid from time to time, said. I agree to pay the installments
and interest to be paid on or before December 31 of each year
following the year in which this judgment is confessed and
current taxes each year before they become delinquent, or within
30 days after the entry of final judgment in proceedings to
contest such the taxes under Minnesota Statutes 1941, sections
278.01 to 278.13.
Dated this .............., ......."
Sec. 5. Minnesota Statutes 1998, section 281.23,
subdivision 2, is amended to read:
Subd. 2. [MAY COVER PARCELS BID IN AT SAME TAX SALE FORM.]
All parcels of land bid in at the same tax judgment sale and
having the same period of redemption shall be covered by a
single posted notice, but a separate notice may be posted for
any parcel which may be omitted. Such The notice of expiration
of redemption must contain the tax parcel identification numbers
and legal descriptions of parcels subject to notice of
expiration of redemption provisions prescribed under subdivision
1. The notice must also indicate the names of taxpayers and fee
owners of record in the office of the county auditor at the time
the notice is prepared and names of those parties who have filed
their addresses according to section 276.041 and the amount of
payment necessary to redeem as of the date of the notice. At
the option of the county auditor, the current filed addresses of
affected persons may be included on the notice. The notice
shall be is sufficient if substantially in the following form:
"NOTICE OF EXPIRATION OF REDEMPTION
Office of the County Auditor
County of ......................., State of Minnesota.
To all persons interested having an interest in the lands
hereinafter described in this notice:
You are hereby notified that the parcels of land
hereinafter described, situated in this notice and located in
the county of ................................, state of
Minnesota, were bid in for the state on the
......................... day of .......................,
......., at the tax judgment sale of land for delinquent taxes
for the year .......; that the legal descriptions and tax parcel
identification numbers of such parcels and names of the
taxpayers and fee owners and in addition those parties who have
filed their addresses pursuant to section 276.041, and the
amount necessary to redeem as of the date hereof and, at the
election of the county auditor, the current filed addresses of
any such persons, are as follows: are subject to forfeiture to
the state of Minnesota because of nonpayment of delinquent
property taxes, special assessments, penalties, interest, and
costs levied on those parcels. The time for redemption from
forfeiture expires if a redemption is not made by the later of
(1) 60 days after service of this notice on all persons having
an interest in the lands of record at the office of the county
recorder or registrar of titles, or (2) by the second Monday in
May. The redemption must be made in my office.
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who Have Filed Amount
Their Addresses Tax Necessary to
Pursuant to Legal Parcel Redeem as of
section 276.041 Description Number Date Hereof
of Notice
................ ........... ...... ............
................ ........... ...... ............
That the time for redemption of such lands from such sale
will expire 60 days after service of notice and the filing of
proof thereof in my office, as provided by law. The redemption
must be made in my office.
FAILURE TO REDEEM SUCH THE LANDS PRIOR TO THE EXPIRATION
OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND
FORFEITURE OF SAID LAND TO THE STATE OF MINNESOTA.
Inquiries as to the these proceedings set forth above can
be made to the County Auditor for the ............... County of
..............., whose address is set forth below.
Witness my hand and official seal this
............................ day of ................, .......
.........................
County Auditor
(OFFICIAL SEAL)
.........................
(Address)
.........................
(Telephone)."
Such The notice shall must be posted by the auditor in the
auditor's office, subject to public inspection, and shall must
remain so posted until at least one week after the date of the
last publication of notice, as hereinafter provided in this
section. Proof of such posting shall must be made by the
certificate of the auditor, filed in the auditor's office.
Sec. 6. Minnesota Statutes 1998, section 281.23,
subdivision 4, is amended to read:
Subd. 4. [PROOF OF PUBLICATION.] An affidavit establishing
proof of publication of such the notice affidavit, as provided
by law, shall must be filed in the office of the county
auditor. A single published notice shall be sufficient for all
may include parcels of land bid in at the same different tax
judgment sale sales, having the same period but included parcels
must have a common year for expiration of redemption, and
covered by a notice or notices kept posted during the time of
the publication, as hereinbefore provided.
Sec. 7. Minnesota Statutes 1998, section 281.23,
subdivision 6, is amended to read:
Subd. 6. [SERVICE OF NOTICE.] (a) Forthwith Immediately
after the commencement of such publication or mailing the county
auditor shall deliver to the sheriff of the county or any other
person not less than 18 years of age a sufficient number of
copies of such the notice of expiration of redemption for
service upon on the persons in possession of all parcels of such
land as are actually occupied, and documentation if the
certified mail notice was returned as undeliverable or the
notice was not mailed to the address associated with the
property. Within 30 days after receipt thereof of the notice,
the sheriff or other person serving the notice shall make such
investigation investigate as may be necessary to ascertain
whether or not the parcels covered by such the notice are
actually occupied parcels, and shall serve a copy of such the
notice of expiration of redemption upon the person in possession
of each parcel found to be an occupied parcel, in the manner
prescribed for serving summons in a civil action. If the
sheriff or another person serving the notice has made at least
two attempts to serve the notice of expiration of redemption,
one between the weekday hours of 8:00 a.m. and 5:00 p.m. and the
other on a different day and different time period, the sheriff
or another person serving the notice may accomplish this service
by posting a copy of the notice of expiration of redemption on a
conspicuous location on the parcel. The sheriff or other person
serving the notice shall make prompt return to the auditor as to
all notices so served and as to all parcels found vacant and
unoccupied and parcels served by posting. Such The return shall
must be made upon on a copy of such the notice and shall be
is prima facie evidence of the facts therein stated in it.
If the notice is served by the sheriff, the sheriff shall
receive from the county, in addition to other compensation
prescribed by law, such fees and mileage for service on persons
in possession as are prescribed by law for such service in other
cases, and shall also receive such compensation for making
investigation and return as to vacant and unoccupied lands as
the county board may fix, subject to appeal to the district
court as in case of other claims against the county. As to
either service upon persons in possession or return as to vacant
lands, the sheriff shall charge mileage only for one trip if the
occupants of more than two tracts are served simultaneously, and
in such case mileage shall must be prorated and charged
equitably against all such owners.
(b) The secretary of state shall receive sheriff's service
for all out-of-state interests.
Sec. 8. Minnesota Statutes 1998, section 282.01,
subdivision 1, is amended to read:
Subdivision 1. [CLASSIFICATION AS CONSERVATION OR
NONCONSERVATION.] It is the general policy of this state to
encourage the best use of tax-forfeited lands, recognizing that
some lands in public ownership should be retained and managed
for public benefits while other lands should be returned to
private ownership. Parcels of land becoming the property of the
state in trust under law declaring the forfeiture of lands to
the state for taxes shall must be classified by the county board
of the county in which the parcels lie as conservation or
nonconservation. In making the classification the board shall
consider the present use of adjacent lands, the productivity of
the soil, the character of forest or other growth, accessibility
of lands to established roads, schools, and other public
services, their peculiar suitability or desirability for
particular uses and the suitability of the forest resources on
the land for multiple use, sustained yield management. The
classification, furthermore, must encourage and foster a mode of
land utilization that will facilitate the economical and
adequate provision of transportation, roads, water supply,
drainage, sanitation, education, and recreation; facilitate
reduction of governmental expenditures; conserve and develop the
natural resources; and foster and develop agriculture and other
industries in the districts and places best suited to them.
In making the classification the county board may use
information made available by any office or department of the
federal, state, or local governments, or by any other person or
agency possessing pertinent information at the time the
classification is made. The lands may be reclassified from time
to time as the county board may consider considers necessary or
desirable, except for conservation lands held by the state free
from any trust in favor of any taxing district.
If the lands are located within the boundaries of an
organized town, with taxable valuation in excess of $20,000, or
incorporated municipality, the classification or
reclassification and sale must first be approved by the town
board of the town or the governing body of the municipality in
which the lands are located. The town board of the town or the
governing body of the municipality is considered to have
approved the classification or reclassification and sale if the
county board is not notified of the disapproval of the
classification or reclassification and sale within 90 60 days of
the date the request for approval was transmitted to the town
board of the town or governing body of the municipality. If the
town board or governing body desires to acquire any parcel lying
in the town or municipality by procedures authorized in this
section, it must file a written application with the county
board to withhold the parcel from public sale. The application
must be filed within 90 60 days of the request for
classification or reclassification and sale. The county board
shall then withhold the parcel from public sale for one year six
months. A municipality or governmental subdivision shall pay
maintenance costs incurred by the county during the six-month
period while the property is withheld from public sale, provided
the property is not offered for public sale after the six-month
period. A clerical error made by county officials does not
serve to eliminate the request of the town board or governing
body if the board or governing body has forwarded the
application to the county auditor.
Sec. 9. Minnesota Statutes 1998, section 282.01,
subdivision 4, is amended to read:
Subd. 4. [SALE: METHOD, REQUIREMENTS, EFFECTS.] The sale
shall must be conducted by the county auditor at the county seat
of the county in which the parcels lie, provided except that, in
St. Louis and Koochiching counties, the sale may be conducted in
any county facility within the county, and. The parcels shall
must be sold for cash only and at not less than the appraised
value, unless the county board of the county shall have has
adopted a resolution providing for their sale on terms, in which
event the resolution shall control controls with respect thereto
to the sale. When the sale is made on terms other than for cash
only (1) a payment of at least ten percent of the purchase price
must be made at the time of purchase, thereupon and the balance
shall must be paid in no more than ten equal annual
installments, or (2) the payments must be made in accordance
with county board policy, but in no event may the board require
more than 12 installments annually, and the contract term must
not be for more than ten years. No Standing timber or timber
products shall must not be removed from these lands until an
amount equal to the appraised value of all standing timber or
timber products on the lands at the time of purchase has been
paid by the purchaser; provided, that in case any. If a parcel
of land bearing standing timber or timber products is sold at
public auction for more than the appraised value, the amount bid
in excess of the appraised value shall must be allocated between
the land and the timber in proportion to the their respective
appraised values thereof, and no. In that case, standing timber
or timber products shall must not be removed from the land until
the amount of the excess bid allocated to timber or timber
products has been paid in addition to the appraised
value thereof of the land. The purchaser is entitled to
immediate possession, subject to the provisions of any existing
valid lease made in behalf of the state.
For sales occurring on or after July 1, 1982, the unpaid
balance of the purchase price is subject to interest at the rate
determined pursuant to section 549.09. The unpaid balance of
the purchase price for sales occurring after December 31, 1990,
is subject to interest at the rate determined in section 279.03,
subdivision 1a. The interest rate is subject to change each
year on the unpaid balance in the manner provided for rate
changes in section 549.09 or 279.03, subdivision 1a, whichever,
is applicable. Interest on the unpaid contract balance on sales
occurring before July 1, 1982, is payable at the rate applicable
to the sale at the time that the sale occurred.
Sec. 10. Minnesota Statutes 1998, section 282.01,
subdivision 7, is amended to read:
Subd. 7. [COUNTY SALES; NOTICE, PURCHASE PRICE,
DISPOSITION.] The sale herein provided for shall must commence
at such the time as determined by the county board of the county
wherein such in which the parcels lie, shall direct are
located. The county auditor shall offer the parcels of land in
order in which they appear in the notice of sale, and shall sell
them to the highest bidder, but not for a less sum less than the
appraised value, until all of the parcels of land shall have
been offered, and thereafter. Then the county auditor shall
sell any remaining parcels to anyone offering to pay the
appraised value thereof, except that if the person could have
repurchased a parcel of property under section 282.012 or
282.241, that person shall not be allowed to may not purchase
that same parcel of property at the sale under this subdivision
for a purchase price less than the sum of all delinquent taxes
and, assessments, penalties, interest, and costs due at the time
of forfeiture computed under section 282.251, together with
penalties, interest, and costs that accrued or would have
accrued if the parcel had not forfeited to the state and any
special assessments for improvements certified as of the date of
sale. Said The sale shall must continue until all such
the parcels are sold or until the county board shall order
orders a reappraisal or shall withdraw withdraws any or all such
of the parcels from sale. Such The list of lands may be added
to and the added lands may be sold at any time by publishing the
descriptions and appraised values of such. The added lands must
be: (1) parcels of land as shall that have become forfeited and
classified as nonconservation since the commencement of any
prior sale or such; (2) parcels as shall that have been
reappraised, or such; (3) parcels as shall that have been
reclassified as nonconservation; or such (4) other parcels as
that are subject to sale but were omitted from the existing list
for any reason. The descriptions and appraised values must be
published in the same manner as hereinafter provided for the
publication of the original list, provided that any. Parcels
added to such the list shall must first be offered for sale to
the highest bidder before they are sold at appraised value. All
parcels of land not offered for immediate sale, as well as
parcels of such lands as that are offered and not immediately
sold shall, continue to be held in trust by the state for the
taxing districts interested in each of said the parcels, under
the supervision of the county board, and such. Those parcels
may be used for public purposes until sold, as directed by the
county board may direct.
Sec. 11. Minnesota Statutes 1998, section 282.04,
subdivision 2, is amended to read:
Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE,
DEMOLITION.] Until after Before the sale of a parcel of
forfeited land the county auditor may, with the approval of the
county board of commissioners, provide for the repair and
improvement of any building or structure located upon such the
parcel, and may provide for maintenance of tax-forfeited lands,
if it is determined by the county board that such repairs or,
improvements, or maintenance are necessary for the operation,
use, preservation and safety thereof; and, of the building or
structure. If so authorized by the county board, the county
auditor may insure any such the building or structure against
loss or damage resulting from fire or windstorm, may purchase
workers' compensation insurance to insure the county against
claims for injury to the persons therein employed in the
building or structure by the county, and may insure the county,
its officers and employees against claims for injuries to
persons or property because of the management, use or operation
of such the building or structure. Such The county auditor may,
with the approval of the county board, provide for the
demolition of any such the building or structure, which has been
determined by the county board to be within the purview of
section 299F.10, and for the sale of salvaged
materials therefrom from the building or structure. Such The
county auditor, with the approval of the county board, may
provide for the sale of abandoned personal property under either
chapter 345 or 566, as appropriate. The net proceeds from any
sale of such the personal property, salvaged materials, of
timber or other products, or leases made under this law shall
must be deposited in the forfeited tax sale fund and shall must
be distributed in the same manner as if the parcel had been sold.
Such The county auditor, with the approval of the county
board, may provide for the demolition of any structure or
structures on tax-forfeited lands, if in the opinion of the
county board, the county auditor, and the land commissioner, if
there be is one, the sale of such the land with such the
structure or structures thereon on it, or the continued
existence of such the structure or structures by reason of age,
dilapidated condition or excessive size as compared with nearby
structures, will result in a material lessening of net tax
capacities of real estate in the vicinity of such the
tax-forfeited lands, or if the demolition of such the structure
or structures will aid in disposing of such the tax-forfeited
property.
Before the sale of a parcel of forfeited land located in an
urban area, the county auditor may with the approval of the
county board provide for the grading thereof of the land by
filling or the removal of any surplus material therefrom, and
where from it. If the physical condition of forfeited lands is
such that a reasonable grading thereof of the lands is necessary
for the protection and preservation of the property of any
adjoining owner, such the adjoining property owner or owners may
make application apply to the county board to have such the
grading done. If, after considering said the application, the
county board believes that such the grading will enhance the
value of such the forfeited lands commensurate with the cost
involved, it may approve the same it, and any such the work
shall must be performed under the supervision of the county or
city engineer, as the case may be, and the expense thereof paid
from the forfeited tax sale fund.
Sec. 12. Minnesota Statutes 1998, section 282.05, is
amended to read:
282.05 [PROCEEDS APPORTIONED.]
The net proceeds received from the sale or rental of
forfeited lands shall be apportioned to the general funds of the
state or municipal subdivision thereof, in the manner
hereinafter provided, and shall be first used by the municipal
subdivision to retire any indebtedness then existing in section
282.08.
Sec. 13. Minnesota Statutes 1998, section 282.08, is
amended to read:
282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.]
The net proceeds from the sale or rental of any parcel of
forfeited land, or from the sale of any products therefrom from
the forfeited land, shall must be apportioned by the county
auditor to the taxing districts interested therein in the land,
as follows:
(1) Such the portion as may be required to pay any amounts
included in the appraised value under section 282.01,
subdivision 3, as representing increased value due to any public
improvement made after forfeiture of such the parcel to the
state, but not exceeding the amount certified by the clerk of
the municipality, shall must be apportioned to the municipal
subdivision entitled thereto to it;
(2) Such the portion as may be required to pay any amount
included in the appraised value under section 282.019,
subdivision 5, representing increased value due to response
actions taken after forfeiture of such the parcel to the state,
but not exceeding the amount of expenses certified by the
pollution control agency or the commissioner of
agriculture, shall must be apportioned to the agency or the
commissioner of agriculture and deposited in the fund from which
the expenses were paid;
(3) Such the portion of the remainder as may be required to
discharge any special assessment chargeable against such the
parcel for drainage or other purpose whether due or deferred at
the time of forfeiture, shall must be apportioned to the
municipal subdivision entitled thereto to it; and
(4) any balance shall must be apportioned as follows:
(a) Any (i) The county board may annually by resolution set
aside no more than 30 percent of the receipts remaining to be
used for timber development on tax-forfeited land and dedicated
memorial forests, to be expended under the supervision of the
county board. It shall must be expended only on projects
approved by the commissioner of natural resources.
(b) Any (ii) The county board may annually by resolution
set aside no more than 20 percent of the receipts remaining to
be used for the acquisition and maintenance of county parks or
recreational areas as defined in sections 398.31 to 398.36, to
be expended under the supervision of the county board.
(c) If the board does not avail itself of the authority
under paragraph (a) or (b) (iii) Any balance remaining shall
must be apportioned as follows: county, 40 percent; town or
city, 20 percent; and school district, 40 percent, and if the
board avails itself of the authority under paragraph (a) or (b)
the balance remaining shall be apportioned among the county,
town or city, and school district in the proportions in this
paragraph above stated, provided, however, that in unorganized
territory that portion which should would have accrued to the
township shall must be administered by the county board of
commissioners.
Sec. 14. Minnesota Statutes 1998, section 282.09, is
amended to read:
282.09 [FORFEITED TAX SALE FUND.]
Subdivision 1. [MONEY PLACED IN FUND; FEES AND
DISBURSEMENTS.] The county auditor and county treasurer shall
place all money received through the operation of sections
282.01 to 282.13 in a fund to be known as the forfeited tax sale
fund, and all disbursements and costs shall must be charged
against that fund, when allowed by the county board. Members of
the county board may be paid a per diem pursuant to section
375.055, subdivision 1, and reimbursed for their necessary
expenses, and may receive mileage as fixed by law. The amount
of compensation of a land commissioner and assistants, if a land
commissioner is appointed, shall must be in the amount
determined by the county board. The county auditor shall must
receive 50 cents for each certificate of sale, each contract for
deed and each lease executed by the auditor, and, in counties
where no land commissioner is appointed, additional annual
compensation, not exceeding $300, as fixed by the county board.
The amount of compensation of any other clerical help that may
be needed by the county auditor or land commissioner shall must
be in the amount determined by the county board. All
compensation provided for herein shall be in this subdivision is
in addition to other compensation allowed by law. Fees so
charged in addition to the fee imposed in section 282.014 shall
must be included in the annual settlement by the county auditor
as hereinafter provided. On or before February 1 each year, the
commissioner of revenue shall certify to the commissioner of
finance, by counties, the total number of state deeds issued and
reissued during the preceding calendar year for which such fees
are charged and the total amount thereof of fees. On or before
March 1 each year, each county shall remit to the commissioner
of revenue, from the forfeited tax sale fund, the aggregate
amount of the fees imposed by section 282.014 in the preceding
calendar year. The commissioner of revenue shall deposit the
amounts received in the state treasury to the credit of the
general fund. When disbursements are made from the fund for
repairs, refunds, expenses of actions to quiet title, or any
other purpose which particularly affects specific parcels of
forfeited lands, the amount of such the disbursements shall must
be charged to the account of the taxing districts interested in
such parcels forfeited tax sale fund. The county auditor shall
make an annual settlement of the net proceeds received from
sales and rentals by the operation of sections 282.01 to 282.13,
on the settlement day determined in section 276.09, for the
preceding calendar year.
Subd. 2. [EXPENDITURES.] In all counties, from said
"Forfeited Tax Sale Fund," the authorities duly charged with the
execution of responsible for carrying out the duties imposed by
sections 282.01 to 282.13, at their discretion, may expend
moneys in repairing from the forfeited tax sale fund to repair
any sewer or water main either inside or outside of any curb
line situated along any property forfeited to the state for
nonpayment of taxes, to acquire and maintain equipment used
exclusively for the maintenance and improvement of tax-forfeited
lands, and to cut down, otherwise destroy or eradicate noxious
weeds on all tax-forfeited lands. In any year, the money to be
expended for the cutting down, destruction or eradication of
noxious weeds shall not exceed in amount more than ten percent
of the net proceeds of said "Forfeited Tax Sale Fund" during the
preceding calendar year, or $10,000, whichever is the lesser
sum, and to maintain tax-forfeited lands.
Sec. 15. Minnesota Statutes 1998, section 282.241, is
amended to read:
282.241 [REPURCHASE AFTER FORFEITURE.]
The owner at the time of forfeiture, or the owner's heirs,
devisees, or representatives, or any person to whom the right to
pay taxes was given by statute, mortgage, or other agreement,
may repurchase any parcel of land claimed by the state to be
forfeited to the state for taxes unless before the time
repurchase is made the parcel is sold under installment
payments, or otherwise, by the state as provided by law, or is
under mineral prospecting permit or lease, or proceedings have
been commenced by the state or any of its political subdivisions
or by the United States to condemn such the parcel of land. The
parcel of land may be repurchased for the sum of all delinquent
taxes and assessments computed under section 282.251, together
with penalties, interest, and costs, that accrued or would have
accrued if the parcel of land had not forfeited to the state.
Except for property which was homesteaded on the date of
forfeiture, such repurchase shall be is permitted during one
year only from the date of forfeiture, and in any case only
after the adoption of a resolution by the board of county
commissioners determining that thereby by repurchase undue
hardship or injustice resulting from the forfeiture will be
corrected, or that permitting such the repurchase will promote
the use of such the lands that will best serve the public
interest. If the county board has good cause to believe that a
repurchase installment payment plan for a particular parcel is
unnecessary and not in the public interest, the county board may
require as a condition of repurchase that the entire repurchase
price be paid at the time of repurchase. A repurchase shall
be is subject to any easement, lease, or other encumbrance
granted by the state prior thereto before the repurchase, and if
said the land is located within a restricted area established by
any county under Laws 1939, chapter 340, such the repurchase
shall must not be permitted unless said the resolution with
respect thereto approving the repurchase is adopted by the
unanimous vote of the board of county commissioners.
The person seeking to repurchase under this section shall
pay all maintenance costs incurred by the county auditor during
the time the property was tax-forfeited.
Sec. 16. Minnesota Statutes 1998, section 282.261,
subdivision 4, is amended to read:
Subd. 4. [SERVICE FEE.] The county auditor may collect a
service fee to cover administrative costs as set by the county
board for each repurchase contract approved application received
after July 1, 1985. The fee shall must be paid at the time of
repurchase application and shall must be credited to the county
general revenue fund.
Sec. 17. Minnesota Statutes 1998, section 282.261, is
amended by adding a subdivision to read:
Subd. 5. [COUNTY MAY IMPOSE CONDITIONS OF REPURCHASE.] The
county auditor, after receiving county board approval, may
impose conditions on repurchase of tax-forfeited lands limiting
the use of the parcel subject to the repurchase, including, but
not limited to, environmental remediation action plan
restrictions or covenants, or easements for lines or equipment
for telephone, telegraph, electric power, or telecommunications.
Sec. 18. Minnesota Statutes 1998, section 283.10, is
amended to read:
283.10 [APPLICATION MUST BE MADE WITHIN TWO YEARS.]
No such refundment refund shall be granted unless an
application therefor shall be duly for refund is approved and
presented to the commissioner of revenue within two years from
the date of such tax certificate or the state assignment
certificate.
Sec. 19. Minnesota Statutes 1998, section 375.192,
subdivision 2, is amended to read:
Subd. 2. [PROCEDURE, CONDITIONS.] Upon written application
by the owner of any property, the county board may grant the
reduction or abatement of estimated market valuation or taxes
and of any costs, penalties, or interest on them as the board
deems just and equitable and order the refund in whole or part
of any taxes, costs, penalties, or interest which have been
erroneously or unjustly paid. Except as provided in sections
469.1812 to 469.1815, no reduction or abatement may be granted
on the basis of providing an incentive for economic development
or redevelopment. Except as provided in section 375.194, the
county board is authorized to may consider and grant reductions
or abatements on applications only as they relate to taxes
payable in the current year and the two prior years; provided
that reductions or abatements for the two prior years shall be
considered or granted only for (i) clerical errors, or (ii) when
the taxpayer fails to file for a reduction or an adjustment due
to hardship, as determined by the county board. The application
must include the social security number of the applicant. The
social security number is private data on individuals as defined
by section 13.02, subdivision 12. All applications must be
approved by the county assessor, or, if the property is located
in a city of the first or second class having a city assessor,
by the city assessor, and by the county auditor before
consideration by the county board, except that the part of the
application which is for the abatement of penalty or interest
must be approved by the county treasurer and county auditor.
Approval by the county or city assessor is not required for
abatements of penalty or interest. No reduction, abatement, or
refund of any special assessments made or levied by any
municipality for local improvements shall be made unless it is
also approved by the board of review or similar taxing authority
of the municipality. Before taking action On any reduction or
abatement where when the reduction of taxes, costs, penalties,
and interest exceed $10,000, the county board shall give 20
days' notice within 20 days to the school board and the
municipality in which the property is located. The notice must
describe the property involved, the actual amount of the
reduction being sought, and the reason for the reduction. If
the school board or the municipality object to the granting of
the reduction or abatement, the county board must refer the
abatement or reduction to the commissioner of revenue with its
recommendation. The commissioner shall consider the abatement
or reduction under section 270.07, subdivision 1.
An appeal may not be taken to the tax court from any order
of the county board made in the exercise of the discretionary
authority granted in this section.
The county auditor shall notify the commissioner of revenue
of all abatements resulting from the erroneous classification of
real property, for tax purposes, as nonhomestead property. For
the abatements relating to the current year's tax processed
through June 30, the auditor shall notify the commissioner on or
before July 31 of that same year of all abatement applications
granted. For the abatements relating to the current year's tax
processed after June 30 through the balance of the year, the
auditor shall notify the commissioner on or before the following
January 31 of all applications granted. The county auditor
shall submit a form containing the social security number of the
applicant and such other information the commissioner prescribes.
Sec. 20. Minnesota Statutes 1998, section 383C.482,
subdivision 1, is amended to read:
Subdivision 1. [AUDITOR TO SEARCH RECORDS; CERTIFICATES.]
The St. Louis county auditor, upon written application of any
person, shall make search of the records of the auditor's office
and the county treasurer's office, and ascertain the amount of
current tax against any lot or parcel of land described in the
application and the existence of all tax liens and tax sales as
to such the lot or parcel of land, and certify the result of
such the search under the seal of office, giving the description
of the lot or parcel of land, the amount of the current tax, if
any, and all tax liens and tax sales shown by such records, and
the amount thereof of liens and tax sales, the year of tax
covered by such the lien, and the date of tax sale, and the name
of the purchaser at such tax sale. For the purpose of
ascertaining the current tax against such a lot or parcel of
land, the county auditor has the right of access to the records
of current taxes in the office of the county treasurer.
Sec. 21. [REPEALER.]
Minnesota Statutes 1998, sections 92.22; 280.27; 281.13;
281.38; 284.01; 284.02; 284.03; 284.04; 284.05; and 284.06, are
repealed.
Sec. 22. [EFFECTIVE DATES.]
This article is effective September 1, 1999, except that
sections 11 and 13 to 15 are effective beginning January 1,
2000, and except that section 12 is effective for net proceeds
received after the date of final enactment of this act.
ARTICLE 14
WATER AND SANITARY SEWER DISTRICTS
Section 1. [CEDAR LAKE AREA WATER AND SANITARY SEWER
DISTRICT; DEFINITIONS.]
Subdivision 1. [APPLICATION.] In sections 1 to 19, the
definitions in this section apply.
Subd. 2. [DISTRICT.] "Cedar lake area water and sanitary
sewer district" and "district" mean the area over which the
Cedar lake area water and sanitary sewer board has jurisdiction,
which includes the area within the city of New Prague and Helena
and Cedar Lake townships in Scott county. The district shall
precisely describe the area over which it has jurisdiction by a
metes and bounds description in the comprehensive plan adopted
pursuant to section 5. The territory may not be larger than the
area encompassed by the Cedar Lake improvement district, but it
may be smaller and the area may include a route along public
rights-of-way from Cedar Lake to the city of New Prague along
which the sewer main is laid.
Subd. 3. [BOARD.] "Water and sanitary sewer board" or
"board" means the Cedar lake area water and sanitary sewer board
established for the district as provided in subdivision 2.
Subd. 4. [PERSON.] "Person" means an individual,
partnership, corporation, limited liability company,
cooperative, or other organization or entity, public or private.
Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental
units" or "governmental units" means Scott county, the city of
New Prague, and Helena and Cedar Lake Townships in Scott county.
Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and
"betterment" have the meanings given in Minnesota Statutes,
section 475.51.
Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution
control agency created in Minnesota Statutes, section 116.02.
Subd. 8. [SEWAGE.] "Sewage" means all liquid or
water-carried waste products from whatever sources derived,
together with any groundwater infiltration and surface water as
may be present.
Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of
water" and "sewer system" have the meanings given in Minnesota
Statutes, section 115.01.
Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment
works" and "disposal system" have the meanings given in
Minnesota Statutes, section 115.01.
Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and
its necessary appurtenances, including but not limited to mains,
pumping stations, and sewage flow-regulating and -measuring
stations, that is:
(1) designed for or used to conduct sewage originating in
more than one local governmental unit;
(2) designed or used to conduct all or substantially all
the sewage originating in a single local governmental unit from
a point of collection in that unit to an interceptor or
treatment works outside that unit; or
(3) determined by the board to be a major collector of
sewage used or designed to serve a substantial area in the
district.
Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal
system" means any and all interceptors or treatment works owned,
constructed, or operated by the board unless designated by the
board as local water and sanitary sewer facilities.
Subd. 13. [MUNICIPALITY.] "Municipality" means any town or
home rule charter or statutory city.
Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and
betterment" and "costs of acquisition and betterment" mean all
acquisition and betterment expenses permitted to be financed out
of stopped bond proceeds issued in accordance with section 13,
whether or not the expenses are in fact financed out of the bond
proceeds.
Subd. 15. [CURRENT COSTS.] "Current costs of acquisition,
betterment, and debt service" means interest and principal
estimated to be due during the budget year on bonds issued to
finance said acquisition and betterment and all other costs of
acquisition and betterment estimated to be paid during the year
from funds other than bond proceeds and federal or state grants.
Subd. 16. [RESIDENT.] "Resident" means the owner of a
dwelling located in the district and receiving water or sewer
service.
Sec. 2. [WATER AND SANITARY SEWER BOARD.]
Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer
district is established in Helena and Cedar Lake townships and
the city of New Prague in Scott county, to be known as the Cedar
lake area water and sanitary sewer district. The water and
sewer district is under the control and management of the Cedar
lake area water and sanitary sewer board. The board is
established as a public corporation and political subdivision of
the state with perpetual succession and all the rights, powers,
privileges, immunities, and duties granted to or imposed upon a
municipal corporation, as provided in sections 1 to 19.
Subd. 2. [MEMBERS AND SELECTION.] The board is composed of
seven members selected as provided in this subdivision. Each of
the town boards of the townships shall meet to appoint two
residents to the water and sanitary sewer board. The township
appointees must live on Cedar lake and must be served by the
system. One member must be selected by the city of New Prague.
Two members must be selected by the Scott county board of
commissioners. Each member has one vote. The first terms are
as follows: two for one year, two for two years, and three for
three years, fixed by lot at the district's first meeting.
Thereafter, all terms are for three years.
Subd. 3. [TIME LIMITS FOR SELECTION.] The board members
must be selected as provided in subdivision 2 within 60 days
after sections 1 to 19 are effective. The successor to each
board member must be selected at any time within 60 days before
the expiration of the member's term in the same manner as the
predecessor was selected. A vacancy on the board must be filled
within 60 days after it occurs.
Subd. 4. [VACANCIES.] If the office of a board member
becomes vacant, the vacancy must be filled for the unexpired
term in the manner provided for selection of the member who
vacated the office. The office is deemed vacant under the
conditions specified in Minnesota Statutes, section 351.02.
Subd. 5. [REMOVAL.] A board member may be removed by the
unanimous vote of the governing body appointing the member, with
or without cause, or for malfeasance or nonfeasance in the
performance of official duties as provided by Minnesota
Statutes, sections 351.14 to 351.23.
Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A
certificate of selection of every board member selected under
subdivision 2 stating the term for which selected, must be made
by the respective town clerks. The certificates, with the
approval appended by other authority, if required, must be filed
with the secretary of state. Counterparts thereof must be
furnished to the board member and the secretary of the board.
Each member shall qualify by taking and subscribing the oath of
office prescribed by the Minnesota Constitution, article 5,
section 8. The oath, duly certified by the official
administering the same, must be filed with the secretary of
state and the secretary of the board.
Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member,
except the chair, may be paid a per diem compensation in
accordance with the board's bylaws for meetings and for other
services as are specifically authorized by the board, not to
exceed the per diem amount under Minnesota Statutes, section
15.0575, subdivision 3, and not to exceed $1,000 in any one year.
The chair may be paid a per diem compensation in accordance with
the board's bylaws for meetings and for other services
specifically authorized by the board, not to exceed the per diem
amount under Minnesota Statutes, section 15.0575, subdivision 3,
and not to exceed $1,500 in any one year. All members of the
board must be reimbursed for all reasonable and necessary
expenses actually incurred in the performance of duties.
Sec. 3. [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION
OF BOARD.]
Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS;
SEAL.] After the selection and qualification of all board
members, the board must meet to organize the board at the call
of any two board members, upon seven days' notice by registered
mail to the remaining board members, at a time and place within
the district specified in the notice. A majority of the members
is a quorum at that meeting and all other meetings of the board,
but a lesser number may meet and adjourn from time to time and
compel the attendance of absent members. At the first meeting
the board shall select its officers and conduct other
organizational business as may be necessary. Thereafter the
board shall meet regularly at the time and place that the board
designates by resolution. Special meetings may be held at any
time upon call of the chair or any two members, upon written
notice sent by mail to each member at least three days before
the meeting, or upon other notice as the board by resolution may
provide, or without notice if each member is present or files
with the secretary a written consent to the meeting either
before or after the meeting. Except as otherwise provided in
sections 1 to 19, any action within the authority of the board
may be taken by the affirmative vote of a majority of the board
and may be taken by regular or adjourned regular meeting or at a
duly held special meeting, but in any case only if a quorum is
present. Meetings of the board must be open to the public. The
board may adopt a seal, which must be officially and judicially
noticed, to authenticate instruments executed by its authority,
but omission of the seal does not affect the validity of any
instrument.
Subd. 2. [CHAIR.] The board shall elect a chair from its
membership. The term of the first chair of the board expires on
January 1, 2001, and the terms of successor chairs expire on
January 1 of each succeeding year. The chair shall preside at
all meetings of the board, if present, and shall perform all
other duties and functions usually incumbent upon such an
officer, and all administrative functions assigned to the chair
by the board. The board shall elect a vice-chair from its
membership to act for the chair during temporary absence or
disability.
Subd. 3. [SECRETARY AND TREASURER.] The board shall select
persons who may, but need not be, members of the board, to act
as its secretary and treasurer. The two offices may be combined.
The secretary and treasurer shall hold office at the pleasure of
the board, subject to the terms of any contract of employment
that the board may enter into with the secretary or treasurer.
The secretary shall record the minutes of all meetings of the
board, and be the custodian of all books and records of the
board except those that the board entrusts to the custody of a
designated employee. The treasurer is the custodian of all
money received by the board except as the board otherwise
entrusts to the custody of a designated employee. The board may
appoint a deputy to perform any and all functions of either the
secretary or the treasurer. A secretary or treasurer who is not
a member of the board or a deputy of either does not have the
right to vote.
Subd. 4. [PUBLIC EMPLOYEES.] The executive director and
other persons employed by the district are public employees and
have all the rights and duties conferred on public employees
under Minnesota Statutes, sections 179A.01 to 179A.25. The
board may elect to have employees become members of either the
public employees retirement association or the Minnesota state
retirement system. The compensation and conditions of
employment of the employees must be governed by rules applicable
to state employees in the classified service and to the
provisions of Minnesota Statutes, chapter 15A.
Subd. 5. [PROCEDURES.] The board shall adopt resolutions
or bylaws establishing procedures for board action, personnel
administration, keeping records, approving claims, authorizing
or making disbursements, safekeeping funds, and auditing all
financial operations of the board.
Subd. 6. [SURETY BONDS AND INSURANCE.] The board may
procure surety bonds for its officers and employees, in amounts
deemed necessary to ensure proper performance of their duties
and proper accounting for funds in their custody. It may
procure insurance against risks to property and liability of the
board and its officers, agents, and employees for personal
injuries or death and property damage and destruction, in
amounts deemed necessary or desirable, with the force and effect
stated in Minnesota Statutes, chapter 466.
Sec. 4. [GENERAL POWERS OF BOARD.]
Subdivision 1. [SCOPE.] The board has all powers necessary
or convenient to discharge the duties imposed upon it by law.
The powers include those specified in this section, but the
express grant or enumeration of powers does not limit the
generality or scope of the grant of powers contained in this
subdivision.
Subd. 2. [SUIT.] The board may sue or be sued.
Subd. 3. [CONTRACT.] The board may enter into any contract
necessary or proper for the exercise of its powers or the
accomplishment of its purposes.
Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept
gifts, apply for and accept grants or loans of money or other
property from the United States, the state, or any person for
any of its purposes, enter into any agreement required in
connection with them, and hold, use, and dispose of the money or
property in accordance with the terms of the gift, grant, loan,
or agreement relating to it. With respect to loans or grants of
funds or real or personal property or other assistance from any
state or federal government or its agency or instrumentality,
the board may contract to do and perform all acts and things
required as a condition or consideration for the gift, grant, or
loan pursuant to state or federal law or regulations, whether or
not included among the powers expressly granted to the board in
sections 1 to 19.
Subd. 5. [COOPERATIVE ACTION.] The board may act under
Minnesota Statutes, section 471.59, or any other appropriate law
providing for joint or cooperative action between governmental
units.
Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may
conduct research studies and programs, collect and analyze data,
prepare reports, maps, charts, and tables, and conduct all
necessary hearings and investigations in connection with the
design, construction, and operation of the district disposal
system.
Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms
it deems advisable, persons or firms performing engineering,
legal, or other services of a professional nature; require any
employee to obtain and file with it an individual bond or
fidelity insurance policy; and procure insurance in amounts it
deems necessary against liability of the board or its officers
or both, for personal injury or death and property damage or
destruction, with the force and effect stated in Minnesota
Statutes, chapter 466, and against risks of damage to or
destruction of any of its facilities, equipment, or other
property as it deems necessary.
Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire
by purchase, lease, condemnation, gift, or grant, any real or
personal property including positive and negative easements and
water and air rights, and it may construct, enlarge, improve,
replace, repair, maintain, and operate any interceptor,
treatment works, or water facility determined to be necessary or
convenient for the collection and disposal of sewage in the
district. Any local governmental unit and the commissioners of
transportation and natural resources are authorized to convey to
or permit the use of any of the above-mentioned facilities owned
or controlled by it, by the board, subject to the rights of the
holders of any bonds issued with respect to those facilities,
with or without compensation, without an election or approval by
any other governmental unit or agency. All powers conferred by
this subdivision may be exercised both within or without the
district as may be necessary for the exercise by the board of
its powers or the accomplishment of its purposes. The board may
hold, lease, convey, or otherwise dispose of the above-mentioned
property for its purposes upon the terms and in the manner it
deems advisable. Unless otherwise provided, the right to
acquire lands and property rights by condemnation may be
exercised only in accordance with Minnesota Statutes, sections
117.011 to 117.232, and applies to any property or interest in
the property owned by any local governmental unit. Property
devoted to an actual public use at the time, or held to be
devoted to such a use within a reasonable time, must not be so
acquired unless a court of competent jurisdiction determines
that the use proposed by the board is paramount to the existing
use. Except in the case of property in actual public use, the
board may take possession of any property on which condemnation
proceedings have been commenced at any time after the issuance
of a court order appointing commissioners for its condemnation.
Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may
construct or maintain its systems or facilities in, along, on,
under, over, or through public waters, streets, bridges,
viaducts, and other public rights-of-way without first obtaining
a franchise from a county or municipality having jurisdiction
over them. However, the facilities must be constructed and
maintained in accordance with the ordinances and resolutions of
the county or municipality relating to constructing, installing,
and maintaining similar facilities on public properties and must
not unnecessarily obstruct the public use of those rights-of-way.
Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell,
lease, or otherwise dispose of any real or personal property
acquired by it which is no longer required for accomplishment of
its purposes. The property may be sold in the manner provided
by Minnesota Statutes, section 469.065, insofar as practical.
The board may give notice of sale as it deems appropriate. When
the board determines that any property or any part of the
district disposal system acquired from a local governmental unit
without compensation is no longer required but is required as a
local facility by the governmental unit from which it was
acquired, the board may by resolution transfer it to that
governmental unit.
Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The
board may contract with the United States or any agency thereof,
any state or agency thereof, or any regional public planning
body in the state with jurisdiction over any part of the
district, or any other municipal or public corporation, or
governmental subdivision or agency or political subdivision in
any state, for the joint use of any facility owned by the board
or such entity, for the operation by that entity of any system
or facility of the board, or for the performance on the board's
behalf of any service, including but not limited to planning, on
terms as may be agreed upon by the contracting parties. Unless
designated by the board as a local water and sanitary sewer
facility, any treatment works or interceptor jointly used, or
operated on behalf of the board, as provided in this
subdivision, is deemed to be operated by the board for purposes
of including those facilities in the district disposal system.
Sec. 5. [COMPREHENSIVE PLAN.]
Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall
adopt a comprehensive plan for the collection, treatment, and
disposal of sewage in the district for a designated period the
board deems proper and reasonable. The board shall prepare and
adopt subsequent comprehensive plans for the collection,
treatment, and disposal of sewage in the district for each
succeeding designated period as the board deems proper and
reasonable. All comprehensive plans of the district shall be
subject to the planning and zoning authority of Scott county and
in conformance with all planning and zoning ordinances of Scott
county. The first plan, as modified by the board, and any
subsequent plan shall take into account the preservation and
best and most economic use of water and other natural resources
in the area; the preservation, use, and potential for use of
lands adjoining waters of the state to be used for the disposal
of sewage; and the impact the disposal system will have on
present and future land use in the area affected. In no case
shall the comprehensive plan provide for more than 325
connections to the disposal system. All connections must be
charged a full assessment. Connections made after the initial
assessment period ends must be charged an amount equal to the
initial assessment plus an adjustment for inflation and plus any
other charges determined to be reasonable and necessary by the
board. Deferred assessments may be permitted, as provided for
in Minnesota Statutes, chapter 429. The plans shall include the
general location of needed interceptors and treatment works, a
description of the area that is to be served by the various
interceptors and treatment works, a long-range capital
improvements program, and any other details as the board deems
appropriate. In developing the plans, the board shall consult
with persons designated for the purpose by governing bodies of
any governmental unit within the district to represent the
entities and shall consider the data, resources, and input
offered to the board by the entities and any planning agency
acting on behalf of one or more of the entities. Each plan,
when adopted, must be followed in the district and may be
revised as often as the board deems necessary.
Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting
any subsequent comprehensive plan, the board shall hold a public
hearing on the proposed plan at a time and place in the district
that it selects. The hearing may be continued from time to
time. Not less than 45 days before the hearing, the board shall
publish notice of the hearing in a newspaper having general
circulation in the district, stating the date, time, and place
of the hearing, and the place where the proposed plan may be
examined by any interested person. At the hearing, all
interested persons must be permitted to present their views on
the plan.
Sec. 6. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL
ASSESSMENTS.]
The Cedar lake area water and sanitary sewer board, in
order to implement the powers granted under sections 1 to 19 to
establish, maintain, and administer the Cedar lake area water
and sanitary sewer district, may issue obligations and impose
special assessments against benefited property within the limits
of the district benefited by facilities constructed under
sections 1 to 19 in the manner provided for local governments by
Minnesota Statutes, chapter 429.
Sec. 7. [SYSTEM EXPANSION; APPLICATION TO CITIES.]
The authority of the water and sanitary sewer board to
establish water or sewer or combined water and sewer systems
under this section extends to areas within the Cedar lake area
water and sanitary sewer district organized into cities when
requested by resolution of the governing body of the affected
city or when ordered by the Minnesota pollution control agency
after notice and hearing. For the purpose of any petition filed
or special assessment levied with respect to any system, the
entire area to be served within a city must be treated as if it
were owned by a single person, and the governing body shall
exercise all the rights and be subject to all the duties of an
owner of the area, and shall have power to provide for the
payment of all special assessments and other charges imposed
upon the area with respect to the system by the appropriation of
money, the collection of service charges, or the levy of taxes,
which shall be subject to no limitation of rate or amount.
Sec. 8. [SEWAGE COLLECTION AND DISPOSAL; POWERS.]
Subdivision 1. [POWERS.] In addition to all other powers
conferred upon the board in sections 1 to 19, it has the powers
specified in this section.
Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may
discharge the effluent from any treatment works operated by it
into any waters of the state, subject to approval of the agency
if required and in accordance with any effluent or water quality
standards lawfully adopted by the agency, any interstate agency,
or any federal agency having jurisdiction.
Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may
require any person or local governmental unit to provide for the
discharge of any sewage, directly or indirectly, into the
district disposal system, or to connect any disposal system or a
part of it with the district disposal system wherever reasonable
opportunity for connection is provided; may regulate the manner
in which the connections are made; may require any person or
local governmental unit discharging sewage into the disposal
system to provide preliminary treatment for it; may prohibit the
discharge into the district disposal system of any substance
that it determines will or may be harmful to the system or any
persons operating it; and may require any local governmental
unit to discontinue the acquisition, betterment, or operation of
any facility for the unit's disposal system wherever and so far
as adequate service is or will be provided by the district
disposal system.
Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH
APPLICABLE REGULATIONS.] Any charges, connection fees, or other
cost-recovery techniques imposed on persons discharging sewage
directly or indirectly into the district disposal system must
comply with applicable state and federal law, including state
and federal regulations governing grant applications.
Sec. 9. [BUDGET.]
(a) The board shall prepare and adopt, on or before October
1 in 2000 and each year thereafter, a budget showing for the
following calendar year or other fiscal year determined by the
board, sometimes referred to in sections 1 to 19 as the budget
year, estimated receipts of money from all sources, including
but not limited to payments by each local governmental unit,
federal or state grants, taxes on property, and funds on hand at
the beginning of the year, and estimated expenditures for:
(1) costs of operation, administration, and maintenance of
the district disposal system;
(2) cost of acquisition and betterment of the district
disposal system; and
(3) debt service, including principal and interest, on
general obligation bonds and certificates issued pursuant to
section 13, and any money judgments entered by a court of
competent jurisdiction.
(b) Expenditures within these general categories, and any
other categories as the board may from time to time determine,
must be itemized in detail as the board prescribes. The board
and its officers, agents, and employees must not spend money for
any purpose other than debt service without having set forth the
expense in the budget nor in excess of the amount set forth in
the budget for it. No obligation to make an expenditure of the
above-mentioned type is enforceable except as the obligation of
the person or persons incurring it. The board may amend the
budget at any time by transferring from one purpose to another
any sums except money for debt service and bond proceeds or by
increasing expenditures in any amount by which actual cash
receipts during the budget year exceed the total amounts
designated in the original budget. The creation of any
obligation under section 13, or the receipt of any federal or
state grant is a sufficient budget designation of the proceeds
for the purpose for which it is authorized, and of the tax or
other revenue pledged to pay the obligation and interest on it,
whether or not specifically included in any annual budget.
Sec. 10. [ALLOCATION OF COSTS.]
Subdivision 1. [DEFINITION OF CURRENT COSTS.] The
estimated cost of administration, operation, maintenance, and
debt service of the district disposal system to be paid by the
board in each fiscal year and the estimated costs of acquisition
and betterment of the system that are to be paid during the year
from funds other than state or federal grants and bond proceeds
and all other previously unallocated payments made by the board
pursuant to sections 1 to 19 to be allocated in the fiscal year
are referred to as current costs and must be allocated by the
board as provided in subdivision 2 in the budget for that year.
Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current
costs must be allocated in the district on an equitable basis as
the board may determine by resolution to be in the best
interests of the district. The adoption or revision of any
method of allocation used by the board must be by the
affirmative vote of at least two-thirds of the members of the
board.
Sec. 11. [TAX LEVIES.]
To accomplish any duty imposed on it the board may, in
addition to the powers granted in sections 1 to 19 and in any
other law or charter, exercise the powers granted any
municipality by Minnesota Statutes, chapters 117, 412, 429, 475,
sections 115.46, 444.075, and 471.59, with respect to the area
in the district. The board may levy taxes upon all taxable
property in the district for all or a part of the amount payable
to the board, pursuant to section 10, to be assessed and
extended as a tax upon that taxable property by the county
auditor for the next calendar year, free from any limit of rate
or amount imposed by law or charter. The tax must be collected
and remitted in the same manner as other general taxes.
Sec. 12. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.]
Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC
PROJECT.] Before the board orders any project involving the
acquisition or betterment of any interceptor or treatment works,
all or a part of the cost of which will be allocated pursuant to
section 10 as current costs, the board must hold a public
hearing on the proposed project. The hearing must be held
following two publications in a newspaper having general
circulation in the district, stating the time and place of the
hearing, the general nature and location of the project, the
estimated total cost of acquisition and betterment, that portion
of costs estimated to be paid out of federal and state grants,
and that portion of costs estimated to be allocated. The
estimates must be best available at the time of the meeting and
if costs exceed the estimate, the project cannot proceed until
an additional public hearing is held, with notice as required at
the initial meeting. The two publications must be a week apart
and the hearing at least three days after the last publication.
Not less than 45 days before the hearing, notice of the hearing
must also be mailed to each clerk of all local governmental
units in the district, but failure to give mailed notice or any
defects in the notice does not invalidate the proceedings. The
project may include all or part of one or more interceptors or
treatment works. A hearing must not be held on a project unless
the project is within the area covered by the comprehensive plan
adopted by the board under section 5, except that the hearing
may be held simultaneously with a hearing on a comprehensive
plan. A hearing is not required with respect to a project, no
part of the costs of which are to be allocated as the current
costs of acquisition, betterment, and debt service.
Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the
board proposes to assess against benefited property within the
district all or any part of the allocable costs of the project
as provided in subdivision 5, the board shall, not less than two
weeks before the hearing provided for in subdivision 1, cause
mailed notice of the hearing to be given to the owner of each
parcel within the area proposed to be specially assessed and
shall also give two weeks' published notice of the hearing. The
notice of hearing must contain the same information provided in
the notice published by the board pursuant to subdivision 1, and
a description of the area proposed to be assessed. For the
purpose of giving mailed notice, owners are those shown to be on
the records of the county auditor or, in any county where tax
statements are mailed by the county treasurer, on the records of
the county treasurer; but other appropriate records may be used
for this purpose. For properties that are tax exempt or subject
to taxation on a gross earnings basis and not listed on the
records of the county auditor or the county treasurer, the
owners must be ascertained by any practicable means and mailed
notice given them as herein provided. Failure to give mailed
notice or any defects in the notice does not invalidate the
proceedings of the board.
Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before
adoption of the resolution calling for a hearing under this
section, the board shall secure from the district engineer or
some other competent person of the board's selection a report
advising it in a preliminary way as to whether the proposed
project is feasible and whether it should be made as proposed or
in connection with some other project and the estimated costs of
the project as recommended. No error or omission in the report
invalidates the proceeding. The board may also take other steps
before the hearing, as will in its judgment provide helpful
information in determining the desirability and feasibility of
the project, including but not limited to preparation of plans
and specifications and advertisement for bids on them. The
hearing may be adjourned from time to time and a resolution
ordering the project may be adopted at any time within six
months after the date of hearing. In ordering the project the
board may reduce but not increase the extent of the project as
stated in the notice of hearing and shall find that the project
as ordered is in accordance with the comprehensive plan and
program adopted by the board pursuant to section 5.
Subd. 4. [EMERGENCY ACTION.] If the board by resolution
adopted by the affirmative vote of not less than two-thirds of
its members determines that an emergency exists requiring the
immediate purchase of materials or supplies or the making of
emergency repairs, it may order the purchase of those supplies
and materials and the making of the repairs before any hearing
required under this section. The board must set as early a date
as practicable for the hearing at the time it declares the
emergency. All other provisions of this section must be
followed in giving notice of and conducting the hearing.
Nothing in this subdivision prevents the board or its agents
from purchasing maintenance supplies or incurring maintenance
costs without regard to the requirements of this section.
Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The
board may specially assess all or any part of the costs of
acquisition and betterment as provided in this subdivision, of
any project ordered under this section. The special assessments
must 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, apply. For purposes of levying the special assessments,
the hearing on the project required in subdivision 1 serves as
the hearing on the making of the original improvement provided
for by Minnesota Statutes, section 429.051. The area assessed
may be less than but may not exceed the area proposed to be
assessed as stated in the notice of hearing on the project
provided for in subdivision 2.
Sec. 13. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.]
Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF
INDEBTEDNESS.] At any time after adoption of its annual budget
and in anticipation of the collection of tax and other revenues
estimated and set forth by the board in the budget, except in
the case of deficiency taxes levied under this subdivision and
taxes levied for the payment of certificates issued under
subdivision 2, the board may, by resolution, authorize the
issuance, negotiation, and sale, in accordance with subdivision
4 in the form and manner and upon terms it determines, of its
negotiable general obligation certificates of indebtedness in
aggregate principal amounts not exceeding 50 percent of the
total amount of tax collections and other revenues, and maturing
not later than three months after the close of the budget year
in which issued. The proceeds of the sale of the certificates
must be used solely for the purposes for which the tax
collections and other revenues are to be expended under the
budget.
All the tax collections and other revenues included in the
budget for the budget year, after the expenditure of the tax
collections and other revenues in accordance with the budget,
must be irrevocably pledged and appropriated to a special fund
to pay the principal and interest on the certificates when due.
If for any reason the tax collections and other revenues are
insufficient to pay the certificates and interest when due, the
board shall levy a tax in the amount of the deficiency on all
taxable property in the district and shall appropriate this
amount when received to the special fund.
Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in
any budget year the receipts of tax and other revenues should
for some unforeseen cause become insufficient to pay the board's
current expenses, or if any public emergency should subject it
to the necessity of making extraordinary expenditures, the board
may by resolution authorize the issuance, negotiation, and sale,
in accordance with subdivision 4 in the form and manner and upon
the terms and conditions it determines, of its negotiable
general obligation certificates of indebtedness in an amount
sufficient to meet the deficiency. The board shall levy on all
taxable property in the district a tax sufficient to pay the
certificates and interest on the certificates and shall
appropriate all collections of the tax to a special fund created
for the payment of the certificates and the interest on them.
Certificates issued under this subdivision mature not later than
April 1 in the year following the year in which the tax is
collectible.
Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by
resolution authorize the issuance of general obligation bonds
for the acquisition or betterment of any part of the district
disposal system, including but without limitation the payment of
interest during construction and for a reasonable period
thereafter, or for the refunding of outstanding bonds,
certificates of indebtedness, or judgments. The board shall
pledge its full faith and credit and taxing power for the
payment of the bonds and shall provide for the issuance and sale
and for the security of the bonds in the manner provided in
Minnesota Statutes, chapter 475. The board has the same powers
and duties as a municipality issuing bonds under that law,
except that no election is required and the debt limitations of
Minnesota Statutes, chapter 475, do not apply to the bonds. The
board may also pledge for the payment of the bonds and deduct
from the amount of any tax levy required under Minnesota
Statutes, section 475.61, subdivision 1, and any revenues
receivable under any state and federal grants anticipated by the
board and may covenant to refund the bonds if and when and to
the extent that for any reason the revenues, together with other
funds available and appropriated for that purpose, are not
sufficient to pay all principal and interest due or about to
become due, provided that the revenues have not been anticipated
by the issuance of certificates under subdivision 1.
Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.]
Certificates issued under subdivisions 1 and 2 may be issued and
sold by negotiation, without public sale, and may be sold at a
price equal to the percentage of the par value of the
certificates, plus accrued interest, and bearing interest at the
rate determined by the board. An election is not required to
authorize the issuance of the certificates. The certificates
must bear the same rate of interest after maturity as before and
the full faith and credit and taxing power of the board must be
pledged to the payment of the certificates.
Sec. 14. [DEPOSITORIES.]
The board shall designate one or more national or state
banks, or trust companies authorized to do a banking business,
as official depositories for money of the board, and shall
require the treasurer to deposit all or a part of the money in
those institutions. The designation must be in writing and set
forth all the terms and conditions upon which the deposits are
made, and must be signed by the chair and treasurer and made a
part of the minutes of the board.
Sec. 15. [MONEY, ACCOUNTS, AND INVESTMENTS.]
Subdivision 1. [RECEIPT AND APPLICATION.] Money received
by the board must be deposited or invested by the treasurer and
disposed of as the board may direct in accordance with its
budget; provided that any money that has been pledged or
dedicated by the board to the payment of obligations or interest
on the obligations or expenses incident thereto, or for any
other specific purpose authorized by law, must be paid by the
treasurer into the fund to which it has been pledged.
Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer
shall establish funds and accounts as may be necessary or
convenient to handle the receipts and disbursements of the board
in an orderly fashion.
(b) The funds and accounts must be audited annually by a
certified public accountant at the expense of the district.
Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in
those funds and accounts may be deposited in the official
depositories of the board or invested as provided in this
subdivision. Any amount not currently needed or required by law
to be kept in cash on deposit may be invested in obligations
authorized for the investment of municipal sinking funds by
Minnesota Statutes, section 475.66. The money may also be held
under certificates of deposit issued by any official depository
of the board.
Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds
issued by the board for the acquisition and betterment of the
district disposal system, and the use, other than investment, of
all money on hand in any sinking fund or funds of the board, is
governed by the provisions of Minnesota Statutes, chapter 475,
the provisions of sections 1 to 19, and the provisions of
resolutions authorizing the issuance of the bonds. When
received, the bond proceeds must be transferred to the treasurer
of the board for safekeeping, investment, and payment of the
costs for which they were issued.
Subd. 5. [AUDIT.] The board shall provide for and pay the
cost of an independent annual audit of its official books and
records by the state auditor or a public accountant authorized
to perform that function under Minnesota Statutes, chapter 6.
Sec. 16. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES
OUTSIDE THE JURISDICTION OF THE BOARD.]
(a) The board may contract with the United States or any
agency of the federal government, any state or its agency, or
any municipal or public corporation, governmental subdivision or
agency or political subdivision in any state, outside the
jurisdiction of the board, for furnishing services to those
entities, including but not limited to planning for and the
acquisition, betterment, operation, administration, and
maintenance of any or all interceptors, treatment works, and
local water and sanitary sewer facilities. The board may
include as one of the terms of the contract that the entity must
pay to the board an amount agreed upon as a reasonable estimate
of the proportionate share properly allocable to the entity of
costs of acquisition, betterment, and debt service previously
allocated in the district. When payments are made by entities
to the board, they must be applied in reduction of the total
amount of costs thereafter allocated in the district, on an
equitable basis as the board deems to be in the best interests
of the district, applying so far as practicable and appropriate
the criteria set forth in section 10, subdivision 2. A
municipality in the state of Minnesota may enter into a contract
and perform all acts and things required as a condition or
consideration therefor consistent with the purposes of sections
1 to 19, whether or not included among the powers otherwise
granted to the municipality by law or charter.
(b) The board shall contract with a qualified entity to
make necessary inspections of the district facilities, and to
otherwise process or assist in processing any of the work of the
district.
Sec. 17. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES,
AND EQUIPMENT.]
When the board orders a project involving the acquisition
or betterment of a part of the district disposal system, it
shall cause plans and specifications of the project to be made,
or if previously made, to be modified, if necessary, and to be
approved by the agency if required, and after any required
approval by the agency, one or more contracts for work and
materials called for by the plans and specification may be
awarded as provided in Minnesota Statutes, section 471.345.
Sec. 18. [PROPERTY EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased,
controlled, used, or occupied by the water and sanitary sewer
board for any purpose under sections 1 to 19 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. The properties are subject to special assessments levied
by a political subdivision for a local improvement in amounts
proportionate to and not exceeding the special benefit received
by the properties from the improvement.
Sec. 19. [RELATION TO EXISTING LAWS.]
Sections 1 to 19 must be given full effect notwithstanding
the provisions of any law or charter inconsistent with sections
1 to 19. The powers conferred on the board under sections 1 to
19 do not in any way diminish or supersede the powers conferred
on the agency by Minnesota Statutes, chapters 115 to 116.
Sec. 20. [BANNING JUNCTION AREA WATER AND SANITARY SEWER
DISTRICT; DEFINITIONS.]
Subdivision 1. [APPLICATION.] For the purposes of sections
20 to 38, the terms defined in this section have the meanings
given them.
Subd. 2. [DISTRICT.] "Banning Junction area water and
sanitary sewer district" and "district" mean the area over which
the Banning Junction area water and sanitary sewer board has
jurisdiction, including the town of Finlayson and the city of
Finlayson in Pine county and Banning state park, but only that
part of the township described in the comprehensive plan adopted
by the board pursuant to section 24.
Subd. 3. [BOARD.] "Water and sanitary sewer board" or
"board" means the Banning Junction area water and sanitary sewer
board established for the district as provided in subdivision 2.
Subd. 4. [PERSON.] "Person" means an individual,
partnership, corporation, limited liability company,
cooperative, or other organization or entity, public or private.
Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental
units" or "governmental units" means the town of Finlayson, the
department of natural resources, and the city of Finlayson.
Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and
"betterment" have the meanings given in Minnesota Statutes,
chapter 475.
Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution
control agency created in Minnesota Statutes, chapter 116.
Subd. 8. [SEWAGE.] "Sewage" means all liquid or
water-carried waste products from whatever sources derived,
together with any groundwater infiltration and surface water as
may be present.
Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of
water" and "sewer system" have the meanings given in Minnesota
Statutes, section 115.01.
Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment
works" and "disposal system" have the meanings given in
Minnesota Statutes, section 115.01.
Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and
its necessary appurtenances, including but not limited to mains,
pumping stations, and sewage flow-regulating and -measuring
stations, that is:
(1) designed for or used to conduct sewage originating in
more than one local governmental unit;
(2) designed or used to conduct all or substantially all
the sewage originating in a single local governmental unit from
a point of collection in that unit to an interceptor or
treatment works outside that unit; or
(3) determined by the board to be a major collector of
sewage used or designed to serve a substantial area in the
district.
Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal
system" means any and all interceptors or treatment works owned,
constructed, or operated by the board unless designated by the
board as local water and sanitary sewer facilities.
Subd. 13. [MUNICIPALITY.] "Municipality" means any home
rule charter or statutory city or town.
Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and
betterment" and "costs of acquisition and betterment" mean all
acquisition and betterment expenses permitted to be financed out
of stopped bond proceeds issued in accordance with section 32,
whether or not the expenses are in fact financed out of the bond
proceeds.
Subd. 15. [CURRENT COSTS.] "Current costs of acquisition,
betterment, and debt service" means interest and principal
estimated to be due during the budget year on bonds issued to
finance said acquisition and betterment and all other costs of
acquisition and betterment estimated to be paid during the year
from funds other than bond proceeds and federal or state grants.
Subd. 16. [RESIDENT.] "Resident" means the owner of a
dwelling located in the district and receiving water or sewer
service.
Sec. 21. [WATER AND SANITARY SEWER BOARD.]
Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer
district is established for the town of Finlayson, for the
Banning state park, under the jurisdiction of the Minnesota
department of natural resources, and for the city of Finlayson
in Pine county, to be known as the Banning Junction area water
and sanitary sewer district. The water and sewer district is
under the control and management of the Banning Junction area
water and sanitary sewer board. The board is established as a
public corporation and political subdivision of the state with
perpetual succession and all the rights, powers, privileges,
immunities, and duties that may be validly granted to or imposed
upon a municipal corporation, as provided in sections 20 to 38.
Subd. 2. [MEMBERS AND SELECTION.] The board is composed of
five members selected as follows: the town board shall meet to
appoint three members, one of whom shall be an elected township
officer, and two of whom shall be persons served by the system,
the city shall appoint one member, and the department of natural
resources shall appoint one member to the water and sanitary
sewer board and each board member shall have one vote. The
first terms must be as follows: one for one year, two for two
years, and two for three years, fixed by lot at the district's
first meeting. Thereafter, all terms are for three years.
Subd. 3. [TIME LIMITS FOR SELECTION.] The board members
must be selected as provided in subdivision 2 within 60 days
after sections 20 to 38 become effective. The successor to each
board member must be selected at any time within 60 days before
the expiration of the member's term in the same manner as the
predecessor was selected. A vacancy on the board must be filled
within 60 days after it occurs.
Subd. 4. [VACANCIES.] If the office of a board member
becomes vacant, the vacancy must be filled for the unexpired
term in the manner provided for selection of the member who
vacated the office. The office is deemed vacant under the
conditions specified in Minnesota Statutes, section 351.02.
Subd. 5. [REMOVAL.] A board member may be removed by the
unanimous vote of the governing body appointing the member, with
or without cause, or for malfeasance or nonfeasance in the
performance of official duties as provided by Minnesota
Statutes, sections 351.14 to 351.23.
Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A
certificate of selection of every board member selected under
subdivision 2 stating the term for which selected, must be made
by the respective town clerks, city administrator, and by the
commissioner of natural resources. The certificates, with the
approval appended by other authority, if required, must be filed
with the secretary of state. Counterparts thereof must be
furnished to the board member and the secretary of the board.
Each member shall qualify by taking and subscribing the oath of
office prescribed by the Minnesota Constitution, article V,
section 6. The oath, duly certified by the official
administering the same, must be filed with the secretary of
state and the secretary of the board.
Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member,
except the chair, may be paid a per diem compensation in
accordance with the board's bylaws for meetings and for other
services as are specifically authorized by the board, not to
exceed the per diem amount under Minnesota Statutes, section
15.0575, subdivision 3, and not to exceed $1,000 in any one
year. The chair may be paid a per diem compensation in
accordance with the board's bylaws for meetings and for other
services specifically authorized by the board, not to exceed the
per diem amount under Minnesota Statutes, section 15.0575,
subdivision 3, and not to exceed $1,500 in any one year. All
members of the board must be reimbursed for all reasonable and
necessary expenses actually incurred in the performance of
duties.
Sec. 22. [GENERAL PROVISIONS FOR ORGANIZATION AND
OPERATION OF BOARD.]
Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; SEAL.]
After the selection and qualification of all board members, they
shall meet to organize the board at the call of any two board
members, upon seven days' notice by registered mail to the
remaining board members, at a time and place within the district
specified in the notice. A majority of the members shall
constitute a quorum at that meeting and all other meetings of
the board, but a lesser number may meet and adjourn from time to
time and compel the attendance of absent members. At the first
meeting the board shall select its officers and conduct other
organizational business as may be necessary. Thereafter the
board shall meet regularly at the time and place that the board
designates by resolution. Special meetings may be held at any
time upon call of the chair or any two members, upon written
notice sent by mail to each member at least three days before
the meeting, or upon other notice as the board by resolution may
provide, or without notice if each member is present or files
with the secretary a written consent to the meeting either
before or after the meeting. Except as otherwise provided in
sections 20 to 38, any action within the authority of the board
may be taken by the affirmative vote of a majority of the board
and may be taken by regular or adjourned regular meeting or at a
duly held special meeting, but in any case only if a quorum is
present. Meetings of the board must be open to the public. The
board may adopt a seal, which must be officially and judicially
noticed, to authenticate instruments executed by its authority,
but omission of the seal does not affect the validity of any
instrument.
Subd. 2. [CHAIR.] The board shall elect a chair from its
membership. The term of the first chair of the board shall
expire on January 1, 2001, and the terms of successor chairs
expire on January 1 of each succeeding year. The chair shall
preside at all meetings of the board, if present, and shall
perform all other duties and functions usually incumbent upon
such an officer, and all administrative functions assigned to
the chair by the board. The board shall elect a vice-chair from
its membership to act for the chair during temporary absence or
disability.
Subd. 3. [SECRETARY AND TREASURER.] The board shall select
a person or persons who may, but need not be, a member or
members of the board, to act as its secretary and treasurer.
The secretary and treasurer shall hold office at the pleasure of
the board, subject to the terms of any contract of employment
that the board may enter into with the secretary or treasurer.
The secretary shall record the minutes of all meetings of the
board, and be the custodian of all books and records of the
board except those that the board entrusts to the custody of a
designated employee. The treasurer is the custodian of all
money received by the board except as the board otherwise
entrusts to the custody of a designated employee. The board may
appoint a deputy to perform any and all functions of either the
secretary or the treasurer. A secretary or treasurer who is not
a member of the board or a deputy of either does not have the
right to vote.
Subd. 4. [EXECUTIVE DIRECTOR.] The board may appoint an
executive director, selected solely upon the basis of training,
experience, and other qualifications and who shall serve at the
pleasure of the board and at a compensation to be determined by
the board. The executive director need not be a resident of the
district. The executive director may also be selected by the
board to serve as either secretary or treasurer, or both, of the
board. The executive director shall attend all meetings of the
board, but shall not vote, and shall have the following powers
and duties:
(1) to see that all resolutions, rules, regulations, or
orders of the board are enforced;
(2) to appoint and remove, upon the basis of merit and
fitness, all subordinate officers and regular employees of the
board except the secretary and the treasurer and their deputies;
(3) to present to the board plans, studies, and other
reports prepared for board purposes and recommend to the board
for adoption the measures the executive director deems necessary
to enforce or carry out the powers and the duties of the board,
or the efficient administration of the affairs of the board;
(4) to keep the board fully advised as to its financial
condition, and to prepare and submit to the board and to the
governing bodies of the local governmental units, the board's
annual budget and other financial information the board may
request;
(5) to recommend to the board for adoption rules and
regulations the executive director deems necessary for the
efficient operation of the district disposal system; and
(6) to perform other duties prescribed by the board.
Subd. 5. [PUBLIC EMPLOYEES.] The executive director and
other persons employed by the district are public employees and
have all the rights and duties conferred on public employees
under Minnesota Statutes, sections 179A.01 to 179A.25. The
board may elect to have employees become members of either the
public employees retirement association or the Minnesota state
retirement system. The compensation and conditions of
employment of the employees must be governed by rules applicable
to state employees in the classified service and to the
provisions of Minnesota Statutes, chapter 15A.
Subd. 6. [PROCEDURES.] The board shall adopt resolutions
or bylaws establishing procedures for board action, personnel
administration, keeping records, approving claims, authorizing
or making disbursements, safekeeping funds, and auditing all
financial operations of the board.
Subd. 7. [SURETY BONDS AND INSURANCE.] The board may
procure surety bonds for its officers and employees, in amounts
deemed necessary to ensure proper performance of their duties
and proper accounting for funds in their custody. It may
procure insurance against risks to property and liability of the
board and its officers, agents, and employees for personal
injuries or death and property damage and destruction, in
amounts deemed necessary or desirable, with the force and effect
stated in Minnesota Statutes, chapter 466.
Sec. 23. [GENERAL POWERS OF BOARD.]
Subdivision 1. [SCOPE.] The board has all powers necessary
or convenient to discharge the duties imposed upon it by law.
The powers include those specified in this section, but the
express grant or enumeration of powers does not limit the
generality or scope of the grant of powers contained in this
subdivision.
Subd. 2. [SUIT.] The board may sue or be sued.
Subd. 3. [CONTRACT.] The board may enter into any contract
necessary or proper for the exercise of its powers or the
accomplishment of its purposes.
Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept
gifts, apply for and accept grants or loans of money or other
property from the United States, the state, or any person for
any of its purposes, enter into any agreement required in
connection with them, and hold, use, and dispose of the money or
property in accordance with the terms of the gift, grant, loan,
or agreement relating to it. With respect to loans or grants of
funds or real or personal property or other assistance from any
state or federal government or its agency or instrumentality,
the board may contract to do and perform all acts and things
required as a condition or consideration for the gift, grant, or
loan pursuant to state or federal law or regulations, whether or
not included among the powers expressly granted to the board in
sections 20 to 38.
Subd. 5. [COOPERATIVE ACTION.] The board may act under
Minnesota Statutes, section 471.59, or any other appropriate law
providing for joint or cooperative action between governmental
units.
Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may
conduct research studies and programs, collect and analyze data,
prepare reports, maps, charts, and tables, and conduct all
necessary hearings and investigations in connection with the
design, construction, and operation of the district disposal
system.
Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms
it deems advisable, persons or firms performing engineering,
legal, or other services of a professional nature; require any
employee to obtain and file with it an individual bond or
fidelity insurance policy; and procure insurance in amounts it
deems necessary against liability of the board or its officers
or both, for personal injury or death and property damage or
destruction, with the force and effect stated in Minnesota
Statutes, chapter 466, and against risks of damage to or
destruction of any of its facilities, equipment, or other
property as it deems necessary.
Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire
by purchase, lease, condemnation, gift, or grant, any real or
personal property including positive and negative easements and
water and air rights, and it may construct, enlarge, improve,
replace, repair, maintain, and operate any interceptor,
treatment works, or water facility determined to be necessary or
convenient for the collection and disposal of sewage in the
district. Any local governmental unit and the commissioners of
transportation and natural resources are authorized to convey to
or permit the use of any of the above-mentioned facilities owned
or controlled by it, by the board, subject to the rights of the
holders of any bonds issued with respect to those facilities,
with or without compensation, without an election or approval by
any other governmental unit or agency. All powers conferred by
this subdivision may be exercised both within or without the
district as may be necessary for the exercise by the board of
its powers or the accomplishment of its purposes. The board may
hold, lease, convey, or otherwise dispose of the above-mentioned
property for its purposes upon the terms and in the manner it
deems advisable. Unless otherwise provided, the right to
acquire lands and property rights by condemnation may be
exercised only in accordance with Minnesota Statutes, sections
117.011 to 117.232, and shall apply to any property or interest
in the property owned by any local governmental unit. No
property devoted to an actual public use at the time, or held to
be devoted to such a use within a reasonable time, shall be so
acquired unless a court of competent jurisdiction determines
that the use proposed by the board is paramount to the existing
use. Except in the case of property in actual public use, the
board may take possession of any property on which condemnation
proceedings have been commenced at any time after the issuance
of a court order appointing commissioners for its condemnation.
Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may
construct or maintain its systems or facilities in, along, on,
under, over, or through public waters, streets, bridges,
viaducts, and other public rights-of-way without first obtaining
a franchise from a county or municipality having jurisdiction
over them. However, the facilities must be constructed and
maintained in accordance with the ordinances and resolutions of
the county or municipality relating to constructing, installing,
and maintaining similar facilities on public properties and must
not unnecessarily obstruct the public use of those rights-of-way.
Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell,
lease, or otherwise dispose of any real or personal property
acquired by it which is no longer required for accomplishment of
its purposes. The property may be sold in the manner provided
by Minnesota Statutes, section 469.065, insofar as practical.
The board may give notice of sale as it deems appropriate. When
the board determines that any property or any part of the
district disposal system acquired from a local governmental unit
without compensation is no longer required but is required as a
local facility by the governmental unit from which it was
acquired, the board may by resolution transfer it to that
governmental unit.
Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The
board may contract with the United States or any agency thereof,
any state or agency thereof, or any regional public planning
body in the state with jurisdiction over any part of the
district, or any other municipal or public corporation, or
governmental subdivision or agency or political subdivision in
any state, for the joint use of any facility owned by the board
or such entity, for the operation by that entity of any system
or facility of the board, or for the performance on the board's
behalf of any service, including but not limited to planning, on
terms as may be agreed upon by the contracting parties. Unless
designated by the board as a local water and sanitary sewer
facility, any treatment works or interceptor jointly used, or
operated on behalf of the board, as provided in this
subdivision, is deemed to be operated by the board for purposes
of including those facilities in the district disposal system.
Sec. 24. [COMPREHENSIVE PLAN.]
Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall
adopt a comprehensive plan for the collection, treatment, and
disposal of sewage in the district for a designated period the
board deems proper and reasonable. The board shall prepare and
adopt subsequent comprehensive plans for the collection,
treatment, and disposal of sewage in the district for each
succeeding designated period as the board deems proper and
reasonable. The first plan, as modified by the board, and any
subsequent plan shall take into account the preservation and
best and most economic use of water and other natural resources
in the area; the preservation, use, and potential for use of
lands adjoining waters of the state to be used for the disposal
of sewage; and the impact the disposal system will have on
present and future land use in the area affected. The plans
shall include the general location of needed interceptors and
treatment works, a description of the area that is to be served
by the various interceptors and treatment works, a long-range
capital improvements program, and any other details as the board
deems appropriate. In developing the plans, the board shall
consult with persons designated for the purpose by governing
bodies of any governmental unit within the district to represent
the entities and shall consider the data, resources, and input
offered to the board by the entities and any planning agency
acting on behalf of one or more of the entities. Each plan,
when adopted, must be followed in the district and may be
revised as often as the board deems necessary.
Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting
any subsequent comprehensive plan, the board shall hold a public
hearing on the proposed plan at a time and place in the district
that it selects. The hearing may be continued from time to
time. Not less than 45 days before the hearing, the board shall
publish notice of the hearing in a newspaper having general
circulation in the district, stating the date, time, and place
of the hearing, and the place where the proposed plan may be
examined by any interested person. At the hearing, all
interested persons must be permitted to present their views on
the plan.
Subd. 3. [GOVERNMENTAL UNIT PLANS AND PROGRAMS;
COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's
plan is adopted, no construction project involving the
construction of new sewers or other disposal facilities may be
undertaken by the local governmental unit unless its governing
body shall first find the project to be in accordance with the
governmental unit's comprehensive plan and program as approved
by the board. Before approval by the board of the comprehensive
plan and program of any local governmental unit in the district,
no water and sanitary sewer construction project may be
undertaken by the governmental unit unless approval of the
project is first secured from the board as to those features of
the project affecting the board's responsibilities as determined
by the board.
Sec. 25. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL
ASSESSMENTS.]
The Banning Junction area water and sanitary sewer board,
in order to implement the powers granted under sections 20 to 38
to establish, maintain, and administer the Banning Junction area
water and sanitary sewer district, may issue obligations and
impose special assessments against benefited property within the
limits of the district benefited by facilities constructed under
sections 20 to 38 in the manner provided for local governments
by Minnesota Statutes, chapter 429.
Sec. 26. [SYSTEM EXPANSION; APPLICATION TO CITIES.]
The authority of the water and sanitary sewer board to
establish water or sewer or combined water and sewer systems
under this section extends to areas within the Banning Junction
area water and sanitary sewer district organized into cities
when requested by resolution of the governing body of the
affected city or when ordered by the Minnesota pollution control
agency after notice and hearing. For the purpose of any
petition filed or special assessment levied with respect to any
system, the entire area to be served within a city must be
treated as if it were owned by a single person, and the
governing body shall exercise all the rights and be subject to
all the duties of an owner of the area, and shall have power to
provide for the payment of all special assessments and other
charges imposed upon the area with respect to the system by the
appropriation of money, the collection of service charges, or
the levy of taxes, which shall be subject to no limitation of
rate or amount.
Sec. 27. [SEWAGE COLLECTION AND DISPOSAL; POWERS.]
Subdivision 1. [POWERS.] In addition to all other powers
conferred upon the board in sections 20 to 38, it has the powers
specified in this section.
Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may
discharge the effluent from any treatment works operated by it
into any waters of the state, subject to approval of the agency
if required and in accordance with any effluent or water quality
standards lawfully adopted by the agency, any interstate agency,
or any federal agency having jurisdiction.
Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may
require any person or local governmental unit to provide for the
discharge of any sewage, directly or indirectly, into the
district disposal system, or to connect any disposal system or a
part of it with the district disposal system wherever reasonable
opportunity for connection is provided; may regulate the manner
in which the connections are made; may require any person or
local governmental unit discharging sewage into the disposal
system to provide preliminary treatment for it; may prohibit the
discharge into the district disposal system of any substance
that it determines will or may be harmful to the system or any
persons operating it; and may require any local governmental
unit to discontinue the acquisition, betterment, or operation of
any facility for the unit's disposal system wherever and so far
as adequate service is or will be provided by the district
disposal system.
Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH
APPLICABLE REGULATIONS.] Any charges, connection fees, or other
cost-recovery techniques imposed on persons discharging sewage
directly or indirectly into the district disposal system must
comply with applicable state and federal law, including state
and federal regulations governing grant applications.
Sec. 28. [BUDGET.]
The board shall prepare and adopt, on or before October 1
in 1999 and each year thereafter, a budget showing for the
following calendar year or other fiscal year determined by the
board, sometimes referred to in sections 20 to 38 as the budget
year, estimated receipts of money from all sources, including
but not limited to payments by each local governmental unit,
federal or state grants, taxes on property, and funds on hand at
the beginning of the year, and estimated expenditures for:
(1) costs of operation, administration, and maintenance of
the district disposal system;
(2) cost of acquisition and betterment of the district
disposal system; and
(3) debt service, including principal and interest, on
general obligation bonds and certificates issued pursuant to
section 32, and any money judgments entered by a court of
competent jurisdiction. Expenditures within these general
categories, and any other categories as the board may from time
to time determine, must be itemized in detail as the board
prescribes. The board and its officers, agents, and employees
shall not spend money for any purpose other than debt service
without having set forth the expense in the budget nor in excess
of the amount set forth in the budget for it. No obligation to
make an expenditure of the above-mentioned type is enforceable
except as the obligation of the person or persons incurring it.
The board may amend the budget at any time by transferring from
one purpose to another any sums except money for debt service
and bond proceeds or by increasing expenditures in any amount by
which actual cash receipts during the budget year exceed the
total amounts designated in the original budget. The creation
of any obligation under section 32 or the receipt of any federal
or state grant is a sufficient budget designation of the
proceeds for the purpose for which it is authorized, and of the
tax or other revenue pledged to pay the obligation and interest
on it, whether or not specifically included in any annual budget.
Sec. 29. [ALLOCATION OF COSTS.]
Subdivision 1. [DEFINITION OF CURRENT COSTS.] The
estimated cost of administration, operation, maintenance, and
debt service of the district disposal system to be paid by the
board in each fiscal year and the estimated costs of acquisition
and betterment of the system that are to be paid during the year
from funds other than state or federal grants and bond proceeds
and all other previously unallocated payments made by the board
pursuant to sections 20 to 38 to be allocated in the fiscal year
are referred to as current costs and must be allocated by the
board as provided in subdivision 2 in the budget for that year.
Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current
costs must be allocated in the district on an equitable basis as
the board may determine by resolution to be in the best
interests of the district. The adoption or revision of any
method of allocation used by the board must be by the
affirmative vote of at least two-thirds of the members of the
board.
Sec. 30. [TAX LEVIES.]
To accomplish any duty imposed on it the board may, in
addition to the powers granted in sections 20 to 38 and in any
other law or charter, exercise the powers granted any
municipality by Minnesota Statutes, chapters 117, 412, 429, 475,
sections 115.46, 444.075, and 471.59, with respect to the area
in the district. The board may levy taxes upon all taxable
property in the district for all or a part of the amount payable
to the board, pursuant to section 29, to be assessed and
extended as a tax upon that taxable property by the county
auditor for the next calendar year, free from any limitation of
rate or amount imposed by law or charter. The tax must be
collected and remitted in the same manner as other general taxes.
Sec. 31. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.]
Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC
PROJECT.] Before the board orders any project involving the
acquisition or betterment of any interceptor or treatment works,
all or a part of the cost of which will be allocated pursuant to
section 29 as current costs, the board shall hold a public
hearing on the proposed project. The hearing must be held
following two publications in a newspaper having general
circulation in the district, stating the time and place of the
hearing, the general nature and location of the project, the
estimated total cost of acquisition and betterment, that portion
of costs estimated to be paid out of federal and state grants,
and that portion of costs estimated to be allocated. The
estimates must be best available at the time of the meeting and
if costs exceed the estimate, the project cannot proceed until
an additional public hearing is held, with notice as required at
the initial meeting. The two publications must be a week apart
and the hearing at least three days after the last publication.
Not less than 45 days before the hearing, notice of the hearing
must also be mailed to each clerk of all local governmental
units in the district, but failure to give mailed notice or any
defects in the notice does not invalidate the proceedings. The
project may include all or part of one or more interceptors or
treatment works. No hearing may be held on any project unless
the project is within the area covered by the comprehensive plan
adopted by the board pursuant to section 24 except that the
hearing may be held simultaneously with a hearing on a
comprehensive plan. A hearing is not required with respect to a
project, no part of the costs of which are to be allocated as
the current costs of acquisition, betterment, and debt service.
Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the
board proposes to assess against benefited property within the
district all or any part of the allocable costs of the project
as provided in subdivision 5, the board shall, not less than two
weeks before the hearing provided for in subdivision 1, cause
mailed notice of the hearing to be given to the owner of each
parcel within the area proposed to be specially assessed and
shall also give two weeks' published notice of the hearing. The
notice of hearing must contain the same information provided in
the notice published by the board pursuant to subdivision 1, and
a description of the area proposed to be assessed. For the
purpose of giving mailed notice, owners are those shown to be on
the records of the county auditor or, in any county where tax
statements are mailed by the county treasurer, on the records of
the county treasurer; but other appropriate records may be used
for this purpose. For properties that are tax exempt or subject
to taxation on a gross earnings basis and not listed on the
records of the county auditor or the county treasurer, the
owners must be ascertained by any practicable means and mailed
notice given them as herein provided. Failure to give mailed
notice or any defects in the notice does not invalidate the
proceedings of the board.
Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before
adoption of the resolution calling for a hearing under this
section, the board shall secure from the district engineer or
some other competent person of the board's selection a report
advising it in a preliminary way as to whether the proposed
project is feasible and whether it should be made as proposed or
in connection with some other project and the estimated costs of
the project as recommended. No error or omission in the report
invalidates the proceeding. The board may also take other steps
before the hearing, as will in its judgment provide helpful
information in determining the desirability and feasibility of
the project, including but not limited to preparation of plans
and specifications and advertisement for bids on them. The
hearing may be adjourned from time to time and a resolution
ordering the project may be adopted at any time within six
months after the date of hearing. In ordering the project the
board may reduce but not increase the extent of the project as
stated in the notice of hearing and shall find that the project
as ordered is in accordance with the comprehensive plan and
program adopted by the board pursuant to section 24.
Subd. 4. [EMERGENCY ACTION.] If the board by resolution
adopted by the affirmative vote of not less than two-thirds of
its members determines that an emergency exists requiring the
immediate purchase of materials or supplies or the making of
emergency repairs, it may order the purchase of those supplies
and materials and the making of the repairs before any hearing
required under this section, provided that the board shall set
as early a date as practicable for the hearing at the time it
declares the emergency. All other provisions of this section
must be followed in giving notice of and conducting the
hearing. Nothing herein may be construed as preventing the
board or its agents from purchasing maintenance supplies or
incurring maintenance costs without regard to the requirements
of this section.
Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The
board may specially assess all or any part of the costs of
acquisition and betterment as herein provided, of any project
ordered pursuant to this section. The special assessments must
be levied in accordance with the provisions of Minnesota
Statutes, sections 429.051 to 429.081, except as otherwise
provided in this subdivision. No other provisions of Minnesota
Statutes, chapter 429, apply. For purposes of levying the
special assessments, the hearing on the project required in
subdivision 1 serves as the hearing on the making of the
original improvement provided for by Minnesota Statutes, section
429.051. The area assessed may be less than but may not exceed
the area proposed to be assessed as stated in the notice of
hearing on the project provided for in subdivision 2.
Sec. 32. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.]
Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF
INDEBTEDNESS.] At any time after adoption of its annual budget
and in anticipation of the collection of tax and other revenues
estimated and set forth by the board in the budget, except in
the case of deficiency taxes levied under this subdivision and
taxes levied for the payment of certificates issued under
subdivision 2, the board may, by resolution, authorize the
issuance, negotiation, and sale, in accordance with subdivision
4 in the form and manner and upon terms it determines, of its
negotiable general obligation certificates of indebtedness in
aggregate principal amounts not exceeding 50 percent of the
total amount of tax collections and other revenues, and maturing
not later than three months after the close of the budget year
in which issued. The proceeds of the sale of the certificates
must be used solely for the purposes for which the tax
collections and other revenues are to be expended pursuant to
the budget.
All the tax collections and other revenues included in the
budget for the budget year, after the expenditure of the tax
collections and other revenues in accordance with the budget,
must be irrevocably pledged and appropriated to a special fund
to pay the principal and interest on the certificates when due.
If for any reason the tax collections and other revenues are
insufficient to pay the certificates and interest when due, the
board shall levy a tax in the amount of the deficiency on all
taxable property in the district and shall appropriate this
amount when received to the special fund.
Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in
any budget year the receipts of tax and other revenues should
for some unforeseen cause become insufficient to pay the board's
current expenses, or if any public emergency should subject it
to the necessity of making extraordinary expenditures, the board
may by resolution authorize the issuance, negotiation, and sale,
in accordance with subdivision 4 in the form and manner and upon
the terms and conditions it determines, of its negotiable
general obligation certificates of indebtedness in an amount
sufficient to meet the deficiency. The board shall levy on all
taxable property in the district a tax sufficient to pay the
certificates and interest on the certificates and shall
appropriate all collections of the tax to a special fund created
for the payment of the certificates and the interest on them.
Certificates issued under this subdivision mature not later than
April 1 in the year following the year in which the tax is
collectible.
Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by
resolution authorize the issuance of general obligation bonds
for the acquisition or betterment of any part of the district
disposal system, including but without limitation the payment of
interest during construction and for a reasonable period
thereafter, or for the refunding of outstanding bonds,
certificates of indebtedness, or judgments. The board shall
pledge its full faith and credit and taxing power for the
payment of the bonds and shall provide for the issuance and sale
and for the security of the bonds in the manner provided in
Minnesota Statutes, chapter 475. The board has the same powers
and duties as a municipality issuing bonds under that law,
except that no election is required and the debt limitations of
Minnesota Statutes, chapter 475, do not apply to the bonds. The
board may also pledge for the payment of the bonds and deduct
from the amount of any tax levy required under Minnesota
Statutes, section 475.61, subdivision 1, and any revenues
receivable under any state and federal grants anticipated by the
board and may covenant to refund the bonds if and when and to
the extent that for any reason the revenues, together with other
funds available and appropriated for that purpose, are not
sufficient to pay all principal and interest due or about to
become due, provided that the revenues have not been anticipated
by the issuance of certificates under subdivision 1.
Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.]
Certificates issued under subdivisions 1 and 2 may be issued and
sold by negotiation, without public sale, and may be sold at a
price equal to the percentage of the par value of the
certificates, plus accrued interest, and bearing interest at the
rate determined by the board. No election is required to
authorize the issuance of the certificates. The certificates
must bear the same rate of interest after maturity as before and
the full faith and credit and taxing power of the board must be
pledged to the payment of the certificates.
Sec. 33. [DEPOSITORIES.]
The board shall designate one or more national or state
banks, or trust companies authorized to do a banking business,
as official depositories for money of the board, and shall
require the treasurer to deposit all or a part of the money in
those institutions. The designation must be in writing and must
set forth all the terms and conditions upon which the deposits
are made, and must be signed by the chair and treasurer and made
a part of the minutes of the board.
Sec. 34. [MONEY, ACCOUNTS, AND INVESTMENTS.]
Subdivision 1. [RECEIPT AND APPLICATION.] Money received
by the board must be deposited or invested by the treasurer and
disposed of as the board may direct in accordance with its
budget; provided that any money that has been pledged or
dedicated by the board to the payment of obligations or interest
on the obligations or expenses incident thereto, or for any
other specific purpose authorized by law, must be paid by the
treasurer into the fund to which it has been pledged.
Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer
shall establish funds and accounts as may be necessary or
convenient to handle the receipts and disbursements of the board
in an orderly fashion.
(b) The funds and accounts must be audited annually by a
certified public accountant at the expense of the district.
Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in
those funds and accounts may be deposited in the official
depositories of the board or invested as provided in this
subdivision. Any amount not currently needed or required by law
to be kept in cash on deposit may be invested in obligations
authorized for the investment of municipal sinking funds by
Minnesota Statutes, section 475.66. The money may also be held
under certificates of deposit issued by any official depository
of the board.
Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds
issued by the board for the acquisition and betterment of the
district disposal system, and the use, other than investment, of
all money on hand in any sinking fund or funds of the board, is
governed by the provisions of Minnesota Statutes, chapter 475,
the provisions of sections 20 to 38, and the provisions of
resolutions authorizing the issuance of the bonds. When
received, the bond proceeds must be transferred to the treasurer
of the board for safekeeping, investment, and payment of the
costs for which they were issued.
Subd. 5. [AUDIT.] The board shall provide for and pay the
cost of an independent annual audit of its official books and
records by the state auditor or a public accountant authorized
to perform that function under Minnesota Statutes, chapter 6.
Sec. 35. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES
OUTSIDE THE JURISDICTION OF THE BOARD.]
(a) The board may contract with the United States or any
agency of the federal government, any state or its agency, or
any municipal or public corporation, governmental subdivision or
agency or political subdivision in any state, outside the
jurisdiction of the board, for furnishing services to those
entities, including but not limited to planning for and the
acquisition, betterment, operation, administration, and
maintenance of any or all interceptors, treatment works, and
local water and sanitary sewer facilities. The board may
include as one of the terms of the contract that the entity must
pay to the board an amount agreed upon as a reasonable estimate
of the proportionate share properly allocable to the entity of
costs of acquisition, betterment, and debt service previously
allocated in the district. When payments are made by entities
to the board, they must be applied in reduction of the total
amount of costs thereafter allocated in the district, on an
equitable basis as the board deems to be in the best interests
of the district, applying so far as practicable and appropriate
the criteria set forth in section 29, subdivision 2. A
municipality in the state of Minnesota may enter into a contract
and perform all acts and things required as a condition or
consideration therefor consistent with the purposes of sections
20 to 38, whether or not included among the powers otherwise
granted to the municipality by law or charter.
(b) The board shall contract with a qualified entity to
make necessary inspections on the district facilities, and to
otherwise process or assist in processing any of the work of the
district.
Sec. 36. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES,
AND EQUIPMENT.]
When the board orders a project involving the acquisition
or betterment of a part of the district disposal system, it
shall cause plans and specifications of the project to be made,
or if previously made, to be modified, if necessary, and to be
approved by the agency if required, and after any required
approval by the agency, one or more contracts for work and
materials called for by the plans and specification may be
awarded as provided in Minnesota Statutes, section 471.345.
Sec. 37. [PROPERTY EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased,
controlled, used, or occupied by the water and sanitary sewer
board for any purpose under sections 20 to 38 are declared to be
acquired, owned, leased, controlled, used, and occupied for
public, governmental, and municipal purposes, and are exempt
from taxation by the state or any political subdivision of the
state, provided that the properties are subject to special
assessments levied by a political subdivision for a local
improvement in amounts proportionate to and not exceeding the
special benefit received by the properties from the
improvement. No possible use of any properties in any manner
different from their use as part of a disposal system at the
time may be considered in determining the special benefit
received by the properties. All assessments are subject to
final approval by the board, whose determination of the benefits
is conclusive upon the political subdivision levying the
assessment.
Sec. 38. [RELATION TO EXISTING LAWS.]
The provisions of sections 20 to 38 must be given full
effect notwithstanding the provisions of any law or charter
inconsistent with sections 20 to 38. The powers conferred on
the board under sections 20 to 38 do not in any way diminish or
supersede the powers conferred on the agency by Minnesota
Statutes, chapters 115 to 116.
Sec. 39. [EFFECTIVE DATE.]
Sections 1 to 19 are effective the day after a certificate
of approval under Minnesota Statutes, section 645.021,
subdivision 3, is filed by the last of the four local
governmental units subject to sections 1 to 19.
Sections 20 to 38 are effective as to the city and the town
of Finlayson separately the day after the certificate of
approval of the governing body of each is filed as provided in
Minnesota Statutes, section 645.021, subdivision 3.
ARTICLE 15
AUTOMATIC REBATE IN ENACTED BUDGET
Section 1. [16A.1522] [REBATE REQUIREMENTS.]
Subdivision 1. [FORECAST.] If, on the basis of a forecast
of general fund revenues and expenditures in November of an
even-numbered year or February of an odd-numbered year, the
commissioner projects a positive unrestricted budgetary general
fund balance at the close of the biennium that exceeds one-half
of one percent of total general fund biennial revenues, the
commissioner shall designate the entire balance as available for
rebate to the taxpayers of this state. In forecasting,
projecting, or designating the unrestricted budgetary general
fund balance or general fund biennial revenue under this
section, the commissioner shall not include any balance or
revenue attributable to settlement payments received after July
1, 1998, and before July 1, 2001, as defined in Section IIB of
the settlement document, filed May 18, 1998, in State v. Philip
Morris, Inc., No. C1-94-8565 (Minnesota District Court, Second
Judicial District).
Subd. 2. [PLAN.] If the commissioner designates an amount
for rebate in either forecast, the governor shall present a plan
to the legislature for rebating that amount. The plan must
provide for payments to begin no later than August 15 of the
odd-numbered year. By April 15 of each odd-numbered year, the
legislature shall enact, modify, or reject the plan presented by
the governor.
Subd. 3. [CERTIFICATION.] By July 15 of each odd-numbered
year, based on a preliminary analysis of the general fund
balance at the end of the fiscal year June 30, the commissioner
of finance shall certify to the commissioner of revenue the
amount available for rebate.
Subd. 4. [TRANSFER TO TAX RELIEF ACCOUNT.] Any positive
unrestricted budgetary general fund balance on June 30 of an
odd-numbered year is appropriated to the commissioner for
transfer to the tax relief account.
Subd. 5. [APPROPRIATION.] A sum sufficient to pay any
rebate due under the plan enacted under subdivision 2 is
appropriated from the general fund to the commissioner of
revenue.
Sec. 2. [ABOLISHING TAX REFORM AND REDUCTION ACCOUNT.]
The tax reform and reduction account created in Laws 1998,
chapter 389, article 9, section 2, subdivision 2, clause (2), is
abolished. The balance in the account shall revert to the
unrestricted general fund balance.
Sec. 3. [EFFECTIVE DATE.]
Section 1 is effective September 1, 1999. Section 2 is
effective the day following final enactment.
ARTICLE 16
MISCELLANEOUS
Section 1. Minnesota Statutes 1998, 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 December 31, 1998 1999:
(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 1998, 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 December 31, 1998 1999, 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 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. 3. [16A.77] [TOBACCO SETTLEMENT FUND.]
(a) A tobacco settlement fund is established in the state
treasury. Amounts in the fund are available only for purposes
authorized by appropriation by the legislature. The governor
shall make recommendations to the legislature regarding use of
the money in the fund.
(b) The commissioner of finance shall credit all settlement
payments received after July 1, 1998, and before July 1, 2001,
as defined in Section IIB of the settlement document, filed May
18, 1998, in the State of Minnesota et al. vs. Philip Morris et
al., to the tobacco settlement fund. All other payments to the
state resulting from the specified litigation shall be credited
to the general fund.
Sec. 4. Minnesota Statutes 1998, section 270.07,
subdivision 1, is amended to read:
Subdivision 1. [POWERS OF COMMISSIONER; APPLICATION FOR
ABATEMENT; ORDERS.] (a) The commissioner of revenue shall
prescribe the form of all blanks and books required under this
chapter and shall hear and determine all matters of grievance
relating to taxation. Except for matters delegated to the
various boards of county commissioners under section 375.192,
and except as otherwise provided by law, the commissioner shall
have power to grant such reduction or abatement of net tax
capacities or taxes and of any costs, penalties or interest
thereon as the commissioner may deem just and equitable, and to
order the refundment, in whole or in part, of any taxes, costs,
penalties or interest thereon which have been erroneously or
unjustly paid. Application therefor shall be submitted with a
statement of facts in the case and the favorable recommendation
of the county board or of the board of abatement of any city
where any such board exists, and the county auditor of the
county wherein such tax was levied or paid. In the case of taxes
other than gross earnings taxes, the order may be made only on
application and approval as provided in this paragraph. No
reduction, abatement, or refundment of any special assessments
made or levied by any municipality for local improvements shall
be made unless it is also approved by the board of review or
similar taxing authority of such municipality.
(b) The commissioner has the power to grant reductions or
abatements of gross earnings tax. An application for reduction
of gross earnings taxes may be made directly to the commissioner
without the favorable action of the county board and county
auditor. The commissioner shall direct that any gross earnings
taxes that may have been erroneously or unjustly paid be applied
against unpaid taxes due from the applicant.
(c) The commissioner shall forward to the county auditor a
copy of the order made by the commissioner in all cases in which
the approval of the county board is required.
(d) The commissioner may refer any question that may arise
in reference to the true construction of this chapter to the
attorney general, and the decision thereon shall be in force and
effect until annulled by the judgment of a court of competent
jurisdiction.
(e) The commissioner may by written order abate, reduce, or
refund any penalty or interest imposed by any law relating to
taxation, if in the commissioner's opinion the failure to timely
pay the tax or failure to timely file the return is due to
reasonable cause, or if the taxpayer is located in a
presidentially declared disaster area. The order shall be made
on application of the taxpayer to the commissioner.
(f) If an order issued under this subdivision is for an
abatement, reduction, or refund of over $5,000, it shall be
valid only if approved in writing by the attorney general.
(g) (f) An appeal may not be taken to the tax court from
any order of the commissioner of revenue made in the exercise of
the discretionary authority granted in paragraph (a) with
respect to the reduction or abatement of real or personal
property taxes in response to a taxpayer's application for an
abatement, reduction, or refund of taxes, net tax capacities,
costs, penalties, or interest.
Sec. 5. Minnesota Statutes 1998, section 270.65, is
amended to read:
270.65 [DATE OF ASSESSMENT; DEFINITION.]
For purposes of taxes administered by the commissioner, the
term "date of assessment" means the date a return was filed or
the date a return should have been filed, whichever is later;
or, in the case of taxes determined by the commissioner, "date
of assessment" means the date of the order assessing taxes; or,
in the case of an amended return filed by the taxpayer, the
assessment date is the date the return was filed with the
commissioner; or, in the case of a check from a taxpayer that is
dishonored and results in an erroneous refund being given to the
taxpayer, remittance of the check is deemed to be an assessment
and the "date of assessment" is the date the check was received
by the commissioner.
Sec. 6. Minnesota Statutes 1998, section 270.67, is
amended by adding a subdivision to read:
Subd. 4. [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT
PROGRAM.] (a) In implementing the authority provided in
subdivision 1 or in section 8.30 to accept offers of installment
payments or offers-in-compromise of tax liabilities, the
commissioner of revenue shall prescribe guidelines for employees
of the department of revenue to determine whether an
offer-in-compromise or an offer to make installment payments is
adequate and should be accepted to resolve a dispute. In
prescribing the guidelines, the commissioner shall develop and
publish schedules of national and local allowances designed to
provide that taxpayers entering into a compromise or payment
agreement have an adequate means to provide for basic living
expenses. The guidelines must provide that the taxpayer's
ownership interest in a motor vehicle, to the extent of the
value allowed in section 550.37, will not be considered as an
asset; in the case of an offer related to a joint tax liability
of spouses, that value of two motor vehicles must be excluded.
The guidelines must provide that employees of the department
shall determine, on the basis of the facts and circumstances of
each taxpayer, whether the use of the schedules is appropriate
and that employees must not use the schedules to the extent the
use would result in the taxpayer not having adequate means to
provide for basic living expenses. The guidelines must provide
that:
(1) an employee of the department shall not reject an
offer-in-compromise or an offer to make installment payments
from a low-income taxpayer solely on the basis of the amount of
the offer; and
(2) in the case of an offer-in-compromise which relates
only to issues of liability of the taxpayer:
(i) the offer must not be rejected solely because the
commissioner is unable to locate the taxpayer's return or return
information for verification of the liability; and
(ii) the taxpayer shall not be required to provide an
audited, reviewed, or compiled financial statement.
(b) The commissioner shall establish procedures:
(1) that require presentation of a counteroffer or a
written rejection of the offer by the commissioner if the amount
offered by the taxpayer in an offer-in-compromise or an offer to
make installment payments is not accepted by the commissioner;
(2) for an administrative review of any written rejection
of a proposed offer-in-compromise or installment agreement made
by a taxpayer under this section before the rejection is
communicated to the taxpayer;
(3) that allow a taxpayer to request reconsideration of any
written rejection of the offer or agreement to the commissioner
of revenue to determine whether the rejection is reasonable and
appropriate under the circumstances; and
(4) that provide for notification to the taxpayer when an
offer-in-compromise has been accepted, and issuance of
certificates of release of any liens imposed under section
270.69 related to the liability which is the subject of the
compromise.
Sec. 7. Minnesota Statutes 1998, section 270.78, is
amended to read:
270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC
FUNDS TRANSFER.]
(a) In addition to other applicable penalties imposed by
law, after notification from the commissioner of revenue to the
taxpayer that payments for a tax administered by the
commissioner are required to be made by means of electronic
funds transfer, and the payments are remitted by some other
means, there is a penalty in the amount of five percent of each
payment that should have been remitted electronically. The
penalty can be abated under the abatement procedures prescribed
in section 270.07, subdivision 6, if the failure to remit the
payment electronically is due to reasonable cause. The penalty
bears interest at the rate specified in section 270.75 from the
due date of the payment of the tax to the date of payment of the
penalty.
(b) The penalty under paragraph (a) does not apply if the
taxpayer pays by other means the amount due at least three
business days before the date the payment is due. This
paragraph does not apply after December 31, 1997.
Sec. 8. Minnesota Statutes 1998, section 270A.03,
subdivision 2, is amended to read:
Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any
state agency, as defined by section 14.02, subdivision 2, the
regents of the University of Minnesota, any district court of
the state, any county, any statutory or home rule charter city
presenting a claim for a municipal hospital or a public library,
a hospital district, a private nonprofit hospital that leases
its building from the county in which it is located, any public
agency responsible for child support enforcement, any public
agency responsible for the collection of court-ordered
restitution, and any public agency established by general or
special law that is responsible for the administration of a
low-income housing program.
Sec. 9. Minnesota Statutes 1998, section 270A.07,
subdivision 2, is amended to read:
Subd. 2. [SETOFF PROCEDURES.] (a) The commissioner, upon
receipt of notification, shall initiate procedures to detect any
refunds otherwise payable to the debtor. When the commissioner
determines that a refund is due to a debtor whose debt was
submitted by a claimant agency, the commissioner shall first
deduct the fee in subdivision 1 and then remit the refund or the
amount claimed, whichever is less, to the agency. In
transferring or remitting moneys to the claimant agency, the
commissioner shall provide information indicating the amount
applied against each debtor's obligation and the debtor's
address listed on the tax return.
(b) The commissioner shall remit to the debtor the amount
of any refund due in excess of the debt submitted for setoff by
the claimant agency. Notice of the amount setoff and address of
the claimant agency shall accompany any disbursement to the
debtor of the balance of a refund. The notice shall also advise
the debtor of the right to contest the validity of the claim,
other than a claim based upon child support under section
518.171, 518.54, 518.551, or chapter 518C at a hearing, subject
to the restrictions in this paragraph. The debtor must assert
this right by written request to the claimant agency, which
request the claimant agency must receive within 45 days of the
date of the notice. This right does not apply to (1) issues
relating to the validity of the claim that have been previously
raised at a hearing under this section or section 270A.09; (2)
issues relating to the validity of the claim that were not
timely raised by the debtor under section 270A.08, subdivision
2; or (3) issues relating to the validity of the claim that have
been previously raised at a hearing conducted under rules
promulgated by the United States Department of Housing and Urban
Development or any public agency that is responsible for the
administration of a low-income housing program, or that were not
timely raised by the debtor under those rules; or (4) issues
relating to the validity of the claim for which a hearing is
discretionary under section 270A.09.
Sec. 10. Minnesota Statutes 1998, section 270A.08,
subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS OF NOTICE.] (a) This written notice
shall clearly and with specificity set forth the basis for the
claim to the refund including the name of the benefit program
involved if the debt arises from a public assistance grant and
the dates on which the debt was incurred and, further, shall
advise the debtor of the claimant agency's intention to request
setoff of the refund against the debt.
(b) Except as provided in paragraph (c), the notice will
also advise the debtor that the debt can be setoff against a
refund unless the time period allowed by law for collecting the
debt has expired, and will advise the debtor of the right to
contest the validity of the claim at a hearing. The debtor must
assert this right by written request to the claimant agency,
which request the agency must receive within 45 days of the
mailing date of the original notice or of the corrected notice,
as required by subdivision 1. If the debtor has not received
the notice, the 45 days shall not commence until the debtor has
received actual notice. The debtor shall have the burden of
showing no notice and shall be entitled to a hearing on the
issue of notice as well as on the merits.
(c) If the claimant agency is a public agency that is
responsible for the administration of a low-income housing
program, the notice will also advise the debtor that the debt
can be set off against a refund unless the time period allowed
by law for collecting the debt has expired. If the public
agency has provided the debtor with the opportunity to contest
the issues relating to the validity of the claim at a hearing
under rules promulgated by the United States Department of
Housing and Urban Development or the public agency, the notice
will advise the debtor of that fact and advise the debtor that
no further hearing may be requested by the debtor to contest the
validity of the claim.
Sec. 11. Minnesota Statutes 1998, section 287.01,
subdivision 3, as amended by Laws 1999, chapter 31, section 1,
is amended to read:
Subd. 3. [DEBT.] "Debt" means the principal amount of an
obligation to pay money or to perform or refrain from performing
an act that is secured in whole or in part by a mortgage of an
interest in real property.
Sec. 12. Minnesota Statutes 1998, section 287.05,
subdivision 1, as amended by Laws 1999, chapter 31, section 5,
is amended to read:
Subdivision 1. [REAL PROPERTY OUTSIDE MINNESOTA.] (a) When
a multistate mortgage is intended to secure only a portion of a
debt amount recited or referred to in the mortgage, the mortgage
may contain the following statement, or its equivalent, on the
first page: "Notwithstanding anything to the contrary herein,
enforcement of this mortgage in Minnesota is limited to a debt
amount of $....... under chapter 287 of Minnesota Statutes." In
such case, the tax shall be imposed based only on the amount of
debt so stated to be secured by real property located in this
state; and, the effect of the mortgage, or any amendment or
extension, as evidence in any court in this state, or as notice
for any purpose in this state, shall be limited to the amount
contained in the statement and for which the tax has been
paid and additional amounts for accrued interest and advances
not subject to tax under section 287.035 or 287.05, subdivision
4.
(b) All multistate mortgages not taxed under paragraph (a)
shall be taxed under sections 287.01 to 287.13 as if the real
property identified in the mortgage secures payment of that
portion of the maximum debt amount referred to, or incorporated
by reference, in the mortgage that is equal to a fraction the
numerator of which is the value of the real property described
in the mortgage that is located in this state and the
denominator of which is the value of all the real property
described in the mortgage.
Sec. 13. Minnesota Statutes 1998, section 287.05,
subdivision 1a, as amended by Laws 1999, chapter 31, section 5,
is amended to read:
Subd. 1a. [REAL PROPERTY IN THIS STATE SECURES PORTION OF
DEBT.] (a) When the real property identified in a mortgage is
located entirely in this state and is intended to secure only a
portion of a debt amount recited or referred to in the mortgage,
the mortgage may contain the following statement, or its
equivalent, on the first page: "Notwithstanding anything to the
contrary herein, enforcement of this mortgage is limited to a
debt amount of $....... under chapter 287 of Minnesota
Statutes." In such case, the tax shall be imposed based only on
the amount of debt so stated to be secured by real property;
and, the effect of the mortgage, or any amendment or extension,
as evidence in any court in this state, or as notice for any
purpose in this state, shall be limited to the amount contained
in the statement and for which the tax has been paid and
additional amounts for accrued interest and advances not subject
to tax under section 287.035 or 287.05, subdivision 4.
(b) All mortgages that are not multistate mortgages and
that are not taxed under paragraph (a) shall be taxed under
sections 287.01 to 287.13 as if the real property identified in
the mortgage secures payment of the maximum debt amount referred
to, or incorporated by reference, in the mortgage.
Sec. 14. Minnesota Statutes 1998, section 289A.31,
subdivision 2, is amended to read:
Subd. 2. [JOINT INCOME TAX RETURNS.] (a) If a joint income
tax return is made by a husband and wife, the liability for the
tax is joint and several. A spouse who is relieved of qualifies
for relief from a liability attributable to a substantial an
underpayment under section 6013(e) 6015(b) of the Internal
Revenue Code is also relieved of the state income tax liability
on the substantial underpayment.
(b) In the case of individuals who were a husband and wife
prior to the dissolution of their marriage or their legal
separation, or prior to the death of one of the individuals, for
tax liabilities reported on a joint or combined return, the
liability of each person is limited to the proportion of the tax
due on the return that equals that person's proportion of the
total tax due if the husband and wife filed separate returns for
the taxable year. This provision is effective only when the
commissioner receives written notice of the marriage
dissolution, legal separation, or death of a spouse from the
husband or wife. No refund may be claimed by an ex-spouse,
legally separated or widowed spouse for any taxes paid more than
60 days before receipt by the commissioner of the written notice.
Sec. 15. Minnesota Statutes 1998, section 289A.40,
subdivision 1, is amended to read:
Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise
provided in this chapter, a claim for a refund of an overpayment
of state tax must be filed within 3-1/2 years from the date
prescribed for filing the return, plus any extension of time
granted for filing the return, but only if filed within the
extended time, or one year from the date of an order assessing
tax under section 289A.37, subdivision 1, or an order
determining an appeal under section 289A.65, subdivision 8, or
one year from the date of a return made by the commissioner
under section 289A.35, upon payment in full of the tax,
penalties, and interest shown on the order or return made by the
commissioner, whichever period expires later. Claims for
refund, except for taxes under chapter 297A, filed after the
3-1/2 year period but within the one-year period are limited to
the amount of the tax, penalties, and interest on the order or
return made by the commissioner and to issues determined by the
order or return made by the commissioner.
In the case of assessments under section 289A.38,
subdivision 5 or 6, claims for refund under chapter 297A filed
after the 3-1/2 year period but within the one-year period are
limited to the amount of the tax, penalties, and interest on the
order or return made by the commissioner that are due for the
period before the 3-1/2 year period.
Sec. 16. Minnesota Statutes 1998, section 289A.40,
subdivision 1a, is amended to read:
Subd. 1a. [INDIVIDUAL INCOME TAXES; REASONABLE
CAUSE SUSPENSION DURING PERIOD OF DISABILITY.] If the
taxpayer establishes reasonable cause for failing to timely file
the return required by section 289A.08, subdivision 1, files the
required return within ten years of the date specified in
section 289A.18, subdivision 1, and independently verifies that
an overpayment has been made, the commissioner shall grant a
refund claimed by the original return, notwithstanding the
limitations of subdivision 1 meets the requirements for
suspending the running of the time period to file a claim for
refund under section 6511(h) of the Internal Revenue Code, the
time period in subdivision 1 for the taxpayer to file a claim
for an individual income tax refund is suspended.
Sec. 17. Minnesota Statutes 1998, section 289A.50, is
amended by adding a subdivision to read:
Subd. 1a. [REFUND FORM.] On or before January 1, 2000, the
commissioner of revenue shall prepare and make available to
taxpayers a form for filing claims for refund of taxes paid in
excess of the amount due. If the commissioner fails to prepare
a form under this subdivision by January 1, 2000, any claims for
refund made after January 1, 2000, and up to ten days after the
form is made available to taxpayers are deemed to be made in
compliance with the requirement of the form.
Sec. 18. Minnesota Statutes 1998, section 289A.50,
subdivision 7, is amended to read:
Subd. 7. [REMEDIES.] (a) If the taxpayer is notified by
the commissioner that the refund claim is denied in whole or in
part, the taxpayer may:
(1) file an administrative appeal as provided in section
289A.65, or an appeal with the tax court, within 60 days after
issuance of the commissioner's notice of denial; or
(2) file an action in the district court to recover the
refund.
(b) An action in the district court on a denied claim for
refund must be brought within 18 months of the date of the
denial of the claim by the commissioner.
(c) No action in the district court or the tax court shall
be brought within six months of the filing of the refund claim
unless the commissioner denies the claim within that period.
(d) If a taxpayer files a claim for refund and the
commissioner has not issued a denial of the claim, the taxpayer
may bring an action in the district court or the tax court at
any time after the expiration of six months of the time the
claim was filed, but within four years of the date that the
claim was filed.
(e) The commissioner and the taxpayer may agree to extend
the period for bringing an action in the district court.
(f) An action for refund of tax by the taxpayer must be
brought in the district court of the district in which lies the
county of the taxpayer's residence or principal place of
business. In the case of an estate or trust, the action must be
brought at the principal place of its administration. Any
action may be brought in the district court for Ramsey county.
Sec. 19. Minnesota Statutes 1998, section 289A.55,
subdivision 9, is amended to read:
Subd. 9. [INTEREST ON PENALTIES.] (a) A penalty imposed
under section 289A.60, subdivision 1, 2, 3, 4, 5, or 6, or 21
bears interest from the date the return or payment was required
to be filed or paid, including any extensions, to the date of
payment of the penalty.
(b) A penalty not included in paragraph (a) bears interest
only if it is not paid within ten days from the date of notice.
In that case interest is imposed from the date of notice to the
date of payment.
Sec. 20. Minnesota Statutes 1998, section 289A.60,
subdivision 3, is amended to read:
Subd. 3. [COMBINED PENALTIES.] When penalties are imposed
under subdivisions 1 and 2, except for the minimum penalty under
subdivision 2, the penalties imposed under both subdivisions
combined must not exceed 38 percent.
Sec. 21. Minnesota Statutes 1998, section 289A.60,
subdivision 21, is amended to read:
Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY
ELECTRONIC FUNDS TRANSFER.] (a) In addition to other applicable
penalties imposed by this section, after notification from the
commissioner to the taxpayer that payments are required to be
made by means of electronic funds transfer under section
289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or
289A.26, subdivision 2a, and the payments are remitted by some
other means, there is a penalty in the amount of five percent of
each payment that should have been remitted electronically. The
penalty can be abated under the abatement procedures prescribed
in section 270.07, subdivision 6, if the failure to remit the
payment electronically is due to reasonable cause.
(b) The penalty under paragraph (a) does not apply if the
taxpayer pays by other means the amount due at least three
business days before the date the payment is due. This
paragraph does not apply after December 31, 1997.
Sec. 22. Minnesota Statutes 1998, section 297A.15,
subdivision 5, is amended to read:
Subd. 5. [REFUND; APPROPRIATION.] Notwithstanding the
provisions of sections 297A.02, subdivision 5, and 297A.25,
subdivision 42, the tax on sales of capital equipment, and
replacement capital equipment, shall be imposed and collected as
if the rate under section 297A.02, subdivision 1, applied. Upon
application by the purchaser, on forms prescribed by the
commissioner, a refund equal to the reduction in the tax due as
a result of the application of the exemption under section
297A.25, subdivision 42, and the rate under section 297A.02,
subdivision 5, shall be paid to the purchaser. The application
must include sufficient information to permit the commissioner
to verify the sales tax paid for the project. The application
shall include information necessary for the commissioner
initially to verify that the purchases qualified as capital
equipment under section 297A.25, subdivision 42, or replacement
capital equipment under section 297A.01, subdivision 20. No
more than two applications for refunds may be filed under this
subdivision in a calendar year. Unless otherwise specifically
provided by this subdivision, the provisions of section sections
289A.40 and 289A.50 apply to the refunds payable under this
subdivision. There is annually appropriated to the commissioner
of revenue the amount required to make the refunds.
The amount to be refunded shall bear interest at the rate
in section 270.76 from the date the refund claim is filed with
the commissioner.
Sec. 23. Minnesota Statutes 1998, section 360.55, is
amended by adding a subdivision to read:
Subd. 8. [AGRICULTURAL AIRCRAFT.] Aircraft registered with
the Federal Aviation Administration as restricted category
aircraft used for agricultural purposes must be listed for
taxation and registration upon filing by the owner a sworn
affidavit with the commissioner. The affidavit must state:
(1) the name and address of the owner;
(2) the name and address of the person from whom purchased;
(3) the aircraft's make, year, model number, federal
registration number, and manufacturer's identification number;
and
(4) that the aircraft is owned and operated solely for
agricultural operations and purposes.
The owner shall file the affidavit and pay an annual fee
established under sections 360.511 to 360.67, which must not
exceed $500. Should the aircraft be operated other than for
agricultural purposes, the owner shall list the aircraft for
taxation and registration under sections 360.511 to 360.67. If
the aircraft is sold, the new owner shall list the aircraft for
taxation and registration under this subdivision or under
sections 360.511 to 360.67, as applicable.
Sec. 24. Minnesota Statutes 1998, section 414.11, is
amended to read:
414.11 [MUNICIPAL BOARD SUNSET.]
The municipal board shall terminate on December 31 June 1,
1999, and all of its authority and duties under this chapter
shall be transferred to the office of strategic and long-range
planning according to section 15.039, and any money remaining
available on that date of the amount appropriated to the
municipal board for fiscal year 2000 is transferred and
appropriated to the director of the office of strategic and
long-range planning to be used for the purposes of this chapter.
Sec. 25. [414.12] [DIRECTOR'S POWERS.]
Notwithstanding anything to the contrary in sections 414.01
to 414.11, the director of the office of strategic and
long-range planning, upon consultation with affected parties and
considering the procedures and principles established in
sections 414.01 to 414.11, and Laws 1997, chapter 202, article
4, sections 1 to 13, may require alternative dispute resolution
processes, including those provided in chapter 14, in the
execution of the office's duties under this chapter.
Sec. 26. Minnesota Statutes 1998, section 469.169,
subdivision 12, is amended to read:
Subd. 12. [ADDITIONAL ZONE ALLOCATIONS.] (a) 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.
(b) The limit in the allocation in paragraph (a) for a
municipality may be waived by the commissioner if the
commissioner of revenue finds that the municipality must provide
an incentive under section 469.1732 or 469.1734 that, by itself
or when aggregated with all other tax reductions granted by the
municipality under those provisions, exceeds the municipality's
maximum allocation under paragraph (a), in order to obtain or
retain a business in the city that would not occur in the
municipality without the incentive. The limit may be waived
only if the commissioner finds that the business for which the
tax incentives are to be provided:
(1) requires a private capital investment of at least
$1,000,000 within the city;
(2) employs at least 25 new or additional full-time
equivalent employees within the city; and
(3) pays its employees at the location in the city wages
that, on the average, will exceed the average wage paid in the
county in which the municipality is located.
Sec. 27. Minnesota Statutes 1998, section 469.169, is
amended by adding a subdivision to read:
Subd. 14. [ADDITIONAL BORDER CITY ALLOCATIONS.] In
addition to tax reductions authorized in subdivisions 7 to 12,
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 subdivision 7, do not
apply to this allocation.
Sec. 28. Minnesota Statutes 1998, section 469.1735, is
amended by adding a subdivision to read:
Subd. 4. [APPROPRIATION; WAIVERS.] An amount sufficient to
fund any tax reductions under a waiver made by the commissioner
under section 469.169, subdivision 12, paragraph (b), is
appropriated to the commissioner of revenue from the general
fund. This appropriation may not be deducted from the dollar
limits under this section or section 469.169 or 469.1734.
Sec. 29. Laws 1997, Second Special Session chapter 2,
section 6, is amended to read:
Sec. 6. TRADE AND ECONOMIC
DEVELOPMENT 8,200,000
Notwithstanding the requirement in
Minnesota Statutes, section 469.169,
subdivision 11, as added by Laws 1997,
chapter 231, article 16, section 20, to
base allocations to zones in cities on
the state's western border on a per
capita basis, $1,200,000 is a one-time
appropriation from the general fund to
the commissioner of trade and economic
development for border city enterprise
competitiveness grants under Minnesota
Statutes, sections 469.166 to 469.173.
Funds shall be allocated to communities
with significant business losses that
are at risk of losing business tax base
due to noncompetitiveness with North
Dakota and South Dakota and shall be
available to communities for locally
administered measures to retain their
job base. Allocations made under this
paragraph may be used for tax
reductions as provided in Minnesota
Statutes, 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
Minnesota Statutes, section 469.169,
subdivision 7, do not apply to this
appropriation. Enterprise zones that
receive allocations under this
paragraph may continue in effect for
purposes of those allocations
through December 31, 1998 June 30, 1999.
$6,000,000 is a one-time appropriation
from the general fund to the Minnesota
investment fund for grants to local
units of government for locally
administered operating loan programs
for businesses directly and adversely
affected by the floods. Loan criteria
and requirements shall be locally
established with approval by the
department. For the purposes of this
appropriation, Minnesota Statutes,
sections 116J.8731, subdivisions 3, 4,
5, and 7, and 116J.991, are waived.
Businesses that receive grants or loans
from this appropriation shall set goals
for jobs retained and wages paid within
the area designated under Presidential
Declaration of Major Disaster, DR-1175.
$1,000,000 is a one-time appropriation
from the petroleum tank release cleanup
fund to the commissioner of trade and
economic development. Notwithstanding
Minnesota Statutes, section 115C.08,
subdivision 4, as amended by Laws 1997,
chapter 200, article 2, section 4,
these funds are to be used for grants
to buy out property substantially
damaged by a petroleum tank release.
Sec. 30. Laws 1999, chapter 112, section 1, subdivision 1,
is amended to read:
Subdivision 1. [DEFINITIONS.] (a) The definitions in this
subdivision apply to this section.
(b) "Acre" means an acre of effective agricultural use land
within the state of Minnesota as reported to the farm service
agency on form 156EZ for the purposes of this subdivision and
subdivisions 2 and 9.
(c) "Commissioner" means the commissioner of revenue.
(d) "Effective agricultural use land" means the land
suitable for growing an agricultural crop and excludes land
enrolled in the conservation reserve program established by
Minnesota Statutes, section 103F.515, or the water bank program
established by Minnesota Statutes, section 103F.601.
(e) "Farm" or "farm operation" means an agricultural
production operation with a unique farm number as reported on
form 156EZ to the farm service agency, which includes at least
40 acres of effective agricultural use land. "Farm" also
includes an agricultural production operation, which contains
less than 40 acres of effective agriculture use if the farm
operator operates another farm qualifying under this paragraph.
(f) "Farm operator" means a person who is identified as the
operator of a farm on form 156EZ filed with the farm service
agency.
(g) "Farm service agency" means the United States Farm
Service Agency.
(h) "Farmer" or "farmer at risk" means a person who
produces an agricultural crop or livestock and is reported to
the farm service agency as bearing a percentage of the risk for
the farm operation.
(i) "Livestock" means cattle, hogs, poultry, and sheep.
(j) "Livestock production facility" means a farm that has
produced at least $10,000 in sales of unprocessed livestock or
unprocessed dairy products as reported on schedule F or form
1065 or form 1120 or 1120S of the farmer's federal income tax
return for either taxable years beginning in calendar year 1997
or 1998.
(k) "Person" includes individuals, fiduciaries, estates,
trusts, partnerships, joint ventures, and corporations.
Sec. 31. Laws 1999, chapter 112, section 1, subdivision 3,
is amended to read:
Subd. 3. [LIVESTOCK PRODUCERS.] A farmer person who owns
or resides on property homesteaded under section 273.124,
subdivision 1, paragraph (c), and operates a livestock
production facility on 160 acres or less may elect the
agricultural property tax refund under subdivisions 4 to 8 in
lieu of the per acre payment under subdivision 2. To qualify,
the farmer person must apply for the refund as provided in
subdivisions 4 to 8. The 40 acre minimum farm size under
subdivision 1 does not apply to eligibility under subdivisions 4
to 8.
Sec. 32. Laws 1999, chapter 112, section 1, subdivision 4,
is amended to read:
Subd. 4. [REFUND.] The refund equals the full amount of
the property tax payment due and payable on May 15, 1999, on a
livestock production facility that is class 1b agricultural
homestead property or class 2a agricultural homestead property
as defined in Minnesota Statutes, section 273.13, excluding that
portion of the tax attributable to the house, garage, and
surrounding acre of land. If a portion of the property was
leased for the agricultural production year, the refund amount
shall be prorated so that only the portion of the property which
was not leased for the agricultural production year qualifies
for the refund reduced by $4 for each acre that was leased for
the agricultural production year.
Sec. 33. Laws 1999, chapter 112, section 1, subdivision 9,
is amended to read:
Subd. 9. [ALTERNATE QUALIFICATION.] (a) If an agricultural
production operation does not meet the definition of a farm
under subdivision 1 solely because (1) the farm operator had not
filed a form 156EZ with the farm service agency, (2) there was
an error in the farm service agency's records, or (3) an
operator operates more than one farm and the acres of effective
agricultural use land of each a farm is less than 40 acres, but
the combined acres of effective agricultural use land of all
land operated by that operator is at least 40 acres, the
commissioner may allow the farm operator to apply for payment
under subdivision 2 after providing such information as the
commissioner may require to determine the number of acres that
would be comparable to the effective agricultural use land
listed on form 156EZ.
(b) If the number of acres of effective agricultural use
land for crop year 1998 for a farm is greater than indicated in
the farm service agency's records, the commissioner may allow a
farm operator to apply for payment on the greater acreage after
providing such information as the commissioner may require.
(c) If a person who produced an agricultural crop or
livestock in 1998 and bore a portion of the risk for the farm
operation does not meet the definition of a farmer under
subdivision 1 solely because that information was not reported
to the farm service agency, or because there was an error in the
farm service agency's records, the commissioner may allow the
farmer to be included on an application for payment under
subdivision 2 after the farmer provides such information as the
commissioner may require to determine the farmer was at risk for
that farm.
Sec. 34. [COST ESTIMATES.]
Any waiver granted under Minnesota Statutes, section
469.169, subdivision 12, paragraph (b), must be reported within
60 days to the commissioner of finance and the chairs of the
house and senate tax committees.
Sec. 35. [CITY OF RICHFIELD; AIRPORT IMPACT ZONE;
FINANCING.]
Subdivision 1. [DESIGNATION OF AIRPORT IMPACT ZONE.] There
is established within the city of Richfield an airport impact
zone consisting of the real property described as follows:
commencing at the intersection of the north city limits with the
w'ly ROW line of trunk highway 77, thence south along the w'ly
ROW line of trunk highway 77 to the n'ly ROW line of interstate
highway 494, thence west along the n'ly ROW line of interstate
highway 494 to the center line of Bloomington Avenue, thence
north on the center line of Bloomington Avenue to the n'ly ROW
line of East 77th Street to a point 133.2 feet east of the e'ly
ROW line of Bloomington Avenue, thence north on a line parallel
with and 133.2 feet east of the e'ly ROW line of Bloomington
Avenue to the north city limits, thence east along the north
city limits to the point of beginning.
Subd. 2. [AIRPORT IMPACTS DEFINED.] The legislature finds
that:
(1) the area included within the airport impact zone
defined under this section will experience significant and
unique adverse environmental and socioeconomic impacts directly
associated with the operation of the Minneapolis-St. Paul
International Airport;
(2) whether funded directly by the metropolitan airports
commission or by other means, expenditures for mitigation of
those airport-created impacts involve an aspect of the airport's
capital and operating expenses and will be made for airport
purposes;
(3) appropriate measures to mitigate those adverse impacts
include but are not limited to housing replacement activities;
and
(4) the state legislature has authorized the expansion of
the Minneapolis-St. Paul International Airport in order to
accommodate the future economic growth of the state. The
environmental quality board has adopted findings that identify
the need to make land uses in the area identified in subdivision
1 compatible with airport uses.
Subd. 3. [METROPOLITAN AIRPORTS COMMISSION BONDS;
SECURITY.] The metropolitan airports commission shall issue and
sell its obligations in an aggregate principal amount not to
exceed $30,000,000, after deducting costs of issuance, discount,
and capitalized interest. The metropolitan airports commission
shall, not later than January 30, 2000, transfer $30,000,000 to
the city of Richfield to be used to finance the costs of land
and structure acquisition, demolition, relocation and site
clearance, and public improvements within the airport impact tax
zone established under subdivision 1, including, without
limitation, the following housing replacement activities
anywhere within the city: rehabilitation, acquisition,
demolition, relocation assistance, and relocation of existing
single-family or multifamily housing, and financing of new or
existing single-family or multifamily housing that replaces
housing units eliminated by redevelopment within the airport
impact zone.
Subd. 4. [TERMS.] The obligations must be secured by the
revenues and pledges from the metropolitan airports commission
in accordance with subdivision 5, and must be issued in
accordance with chapter 475, provided that no election is
required, net debt limits do not apply, and the obligations must
mature no later than 35 years from the date of issue of the
original obligations. The metropolitan airports commission may
issue obligations to refund any obligations issued under this
section, the principal amount of which shall not be included in
computing the limits on amount of obligations issuable by the
commission under this section.
Subd. 5. [SECURITY; METROPOLITAN AIRPORTS COMMISSION
PAYMENTS.] (a) Notwithstanding anything to the contrary in
Minnesota Statutes, sections 473.601 to 473.679, on or before
the due date of each principal and interest payment on
obligations issued under this section, the treasurer of the
metropolitan airports commission shall remit from any available
funds to the trustee or paying agent for the obligations an
amount sufficient for the payment, without further order from
the commission. The metropolitan airports commission shall be
obligated to the holders of obligations issued under this
section, to establish, revise from time to time, and collect
landing fees according to schedules such as to produce revenues,
together with other revenues not restricted by law or regulation
available to the metropolitan airport commission, at all times
sufficient to pay 105 percent of principal and interest on all
obligations issued under this section.
(b) Notwithstanding anything to the contrary in Minnesota
Statutes, sections 473.601 to 473.679, any obligations issued
under this section shall be further secured by the pledge of the
full faith and credit of the metropolitan airports commission,
which shall be obligated to levy upon all taxable property
within the metropolitan area a tax at the times and in the
amounts, if any, as may be required to provide funds sufficient
to pay all the obligations and interest thereon in the event
revenues pledged under paragraph (a), are insufficient for that
purpose. This tax, if ever required to be levied, shall not be
subject to any limitation of rate or amount.
(c) The pledges described in this section shall be made by
resolution of the metropolitan airports commission. The
security afforded by this section extends equally and ratably to
all bonds issued under this section and all bonds issued by the
metropolitan airports commission secured by similar pledges.
Subd. 6. [OBLIGATION DEFINED.] In subdivisions 1 to 5,
"obligation" has the meaning given in Minnesota Statutes,
section 475.51, subdivision 3. The term includes obligations
issued to refund prior obligations issued under this section.
Subd. 7. [COMPLIANCE WITH FEDERAL LAW; NO ADDITIONAL
COMMITMENTS.] (a) Nothing in this section shall require the
metropolitan airports commission to violate federal law or
regulation, including the Federal Aviation Administration
revenue diversion policy.
(b) If this section violates federal law or regulations,
including the Federal Aviation Administration revenue diversion
policy, the requirements imposed upon the metropolitan airports
commission under this section are terminated and shall not
become commitments of the state.
Subd. 8. [RELATIONSHIP TO REQUIREMENTS UNDER
AGREEMENT.] The requirements imposed upon the metropolitan
airports commission under this section are in addition to any
requirements imposed upon the commission under the
Richfield-metropolitan airports commission noise mitigation
agreement dated December 18, 1998.
Sec. 36. [EXTENSIONS FOR OPERATION ALLIED FORCE SERVICE
MEMBERS.]
The limitations of time provided by Minnesota Statutes,
chapter 289A relating to administration of taxes, chapter 290
relating to income taxes, chapter 271 relating to the tax court
for filing returns, paying taxes, claiming refunds, commencing
action thereon, appealing to the tax court from orders relating
to income taxes, and the filing of petitions under chapter 278,
and appealing to the Supreme Court from decisions of the tax
court relating to income taxes are extended, as provided in the
special rule for section 7508 of the Internal Revenue Code in
section 1, paragraph (c), of Public Law Number 106-21.
Sec. 37. [TRANSFER.]
The commissioner of finance shall transfer $2,000,000 from
the conservation fund under Minnesota Statutes, section 40A.151,
to the general fund on July 1, 1999.
Sec. 38. [APPROPRIATION.]
$143,000 is appropriated to the commissioner of revenue
from the general fund for the cost of administering this act.
This appropriation is for fiscal year 2000 and any unspent
amount may be carried over to fiscal year 2001. This is a
one-time appropriation and not part of the budget base for the
department.
Sec. 39. [REPEALER.]
Minnesota Statutes 1998, sections 297E.12, subdivision 3;
297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed.
Sec. 40. [EFFECTIVE DATES.]
Sections 4, 21, 22, 25, and 29 to 34 are effective the day
following final enactment.
Section 5 is effective for checks received on or after the
day following final enactment.
Section 6 is effective the day following final enactment,
and applies to offers-in-compromise submitted after June 30,
1999.
Sections 7 and 19 are effective for payments due on or
after the day following final enactment.
Sections 8, 9, and 10 are effective for claims for setoff
submitted to the commissioner of revenue by claimant agencies
after June 30, 1999.
Sections 11 to 13 are effective for documents executed,
recorded, or registered after June 30, 1999.
Section 14, paragraph (a), is effective at the same time
that section 6015(b) of the Internal Revenue Code is effective
for federal tax purposes. Section 14, paragraph (b), is
effective for claims for innocent spouse relief, requests for
allocation of joint income tax liability, and taxes filed or
paid on or after the day following final enactment.
Section 15 is effective for orders issued on or after the
day following final enactment.
Section 16 is effective for disabilities existing on or
after the date of enactment for which claims for refund have not
expired under the time limit in Minnesota Statutes, section
289A.40, subdivision 1. Claims based upon reasonable cause must
be filed prior to the expiration of the repealed ten-year period
or within one year after the date of enactment, whichever is
earlier.
Section 18 is effective for refund claims filed on or after
the day following final enactment.
Section 20 is effective for tax years ending on or after
the day following final enactment.
Section 23 is effective for aircraft registered after June
30, 1999.
Section 24 is effective June 1, 1999.
Section 36 is effective at the same time section 1,
paragraph (c), of Public Law Number 106-21 becomes effective.
Presented to the governor May 24, 1999
Signed by the governor May 25, 1999, 2:50 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes