Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 490-H.F.No. 4127
An act relating to financing state and local
government; providing a sales tax rebate; providing
agricultural assistance; extending the time to qualify
for and making certain other changes to the 1999 sales
tax rebate and 1999 agricultural assistance; providing
agricultural assistance; reducing individual income
tax rates; making changes to income, franchise,
withholding, sales and use, property, motor vehicle
sales and registration, mortgage registry, health care
provider, motor fuels, cigarette and tobacco, liquor,
insurance premiums, lawful gambling, taconite
production, estate, and special taxes; limiting
certain maximum motor vehicle registration tax
amounts; changing and allowing tax credits,
subtractions, and exemptions; conforming with changes
in federal income tax provisions; providing for
allocation and apportionment of income; changing
property tax valuation, assessment, levy,
classification, homestead, credit, aid, exemption,
deferral, review, appeal, abatement, and distribution
provisions; changing levy authority; reducing rates on
lawful gambling taxes; changing tax increment
financing and housing improvement area provisions;
providing special authority for certain political
subdivisions; transferring money to the Minnesota
Minerals 21st Century Fund; providing for a grant to
the city of Richfield to be used for acquisition of
certain residential property; changing and clarifying
tax administration, collection, enforcement, interest,
and penalty provisions; authorizing certain special
assessments; changing revenue recapture provisions;
modifying certain aids to local units of government;
changing county reporting requirements; providing
certain duties and powers to the commissioner of
revenue, the state auditor, and to the attorney
general; defining terms; classifying data; requiring
studies; transferring certain funds; appropriating
money; amending Minnesota Statutes 1998, sections
8.30; 16A.46; 60A.15, subdivision 1; 97A.061, by
adding subdivisions; 115A.557, subdivision 3; 168.013,
subdivision 1a; 270.063, by adding a subdivision;
270.072, subdivision 2, and by adding a subdivision;
270A.03, subdivision 7; 270A.07, subdivision 1;
272.115, subdivision 1; 273.111, subdivision 3;
273.124, by adding a subdivision; 273.125, subdivision
8; 273.1399, subdivision 1; 273.37, subdivision 3;
275.066; 276.19, subdivision 1; 289A.08, by adding a
subdivision; 289A.20, subdivision 2; 289A.26,
subdivision 1; 289A.35; 289A.60, subdivisions 1, 14,
and 15; 290.01, subdivisions 19c, 19d, and 19e;
290.015, subdivisions 1, 3, and 4; 290.06, subdivision
22, and by adding subdivisions; 290.0671, subdivision
6, and by adding a subdivision; 290.0672, subdivisions
1 and 2; 290.17, subdivision 2; 290.92, subdivisions
3, 19, 28, and 29; 290B.04, by adding a subdivision;
290B.05, subdivision 3; 290B.07; 290B.08, subdivisions
1 and 2; 290B.09, subdivision 2; 295.50, subdivision
9b; 295.58; 296A.03, subdivision 5; 296A.21,
subdivisions 2 and 3; 296A.22, subdivision 6; 297A.01,
subdivisions 13 and 15; 297A.15, by adding a
subdivision; 297A.25, subdivisions 5, 16, 34, and by
adding subdivisions; 297B.01, subdivision 7; 297B.03;
297B.09, subdivision 1; 297E.02, by adding a
subdivision; 297F.01, subdivisions 7, 14, 17, and by
adding subdivisions; 297F.08, subdivisions 2, 5, 8,
and 9; 297F.09, subdivisions 1 and 2; 297F.13,
subdivision 4; 297F.21, subdivisions 1 and 3; 428A.11,
by adding subdivisions; 428A.13, subdivisions 1 and 3;
428A.14, subdivision 1; 428A.15; 428A.16; 428A.17;
428A.19; 428A.21; 429.011, subdivisions 2a and 5;
429.021, subdivision 1; 429.031, subdivision 1;
469.040, by adding a subdivision; 469.115; 469.1734,
subdivision 4; 469.174, subdivisions 9, 10, 11, 12,
14, and 22; 469.175, subdivisions 1a, 2, 2a, 3, 5, and
6; 469.176, subdivision 1b, and by adding a
subdivision; 469.1761, subdivision 4; 469.1763,
subdivision 2; 469.177, subdivision 1; 469.1771,
subdivision 2a, and by adding a subdivision; 469.1813,
subdivision 4; 477A.06, subdivision 3; 477A.11,
subdivision 1; 477A.12; 477A.13; and 477A.14;
Minnesota Statutes 1999 Supplement, sections 16D.09,
subdivision 2; 168.012, subdivision 1; 270.65;
270A.03, subdivision 2; 270A.07, subdivision 2;
272.02, subdivision 39, and by adding a subdivision;
273.124, subdivisions 1, 8, and 14; 273.13,
subdivisions 24 and 25; 273.1382, subdivision 1b;
273.1398, subdivision 4a; 275.70, subdivision 5;
275.71, subdivision 4; 287.01, subdivision 2; 289A.02,
subdivision 7; 289A.20, subdivision 4; 289A.55,
subdivision 9; 290.01, subdivisions 19, 19b, and 31;
290.06, subdivisions 2c and 2d; 290.0671, subdivision
1; 290.0675, subdivisions 1, 2, and 3; 290.091,
subdivisions 1, 2, and 6; 290A.03, subdivision 15;
290B.03, subdivision 1; 290B.05, subdivision 1;
291.005, subdivision 1; 295.53, subdivision 1;
297A.25, subdivisions 9 and 11; 297E.02, subdivisions
1, 4, and 6; 297F.08, subdivision 8a; 298.24,
subdivision 1; 383D.74, subdivision 2; 469.1771,
subdivision 1; 469.1813, subdivisions 1 and 6;
477A.011, subdivision 36; 477A.03, subdivision 2; and
477A.06, subdivision 1; Laws 1987, chapter 402,
section 2, subdivisions 1, 4, and 5; Laws 1988,
chapter 645, section 3, as amended; Laws 1997, chapter
231, article 1, section 19; Laws 1999, chapter 112,
section 1, subdivisions 1, 2, and 7; Laws 1999,
chapter 112, section 2; Laws 1999, chapter 243,
article 1, section 2; Laws 1999, chapter 243, article
6, section 18; proposing coding for new law in
Minnesota Statutes, chapters 273; 278; and 477A;
repealing Minnesota Statutes 1998, sections 270.072,
subdivision 5; 270.075, subdivisions 3 and 4; 270.083;
273.127; 273.1316; 297F.09, subdivision 6; 297G.09,
subdivision 5; 469.055, subdivision 5; 469.101,
subdivision 21; 469.135; 469.136; 469.137; 469.138;
469.139; 469.140; 469.174, subdivision 13; 469.175,
subdivision 6a; and 469.176, subdivision 4a; Minnesota
Rules, part 8160.0300, subpart 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
2000 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 1998.
(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, updated to calendar year
1998, 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 1998, chapter 389,
article 1, section 1, and who filed for or received that credit
on or before November 30, 2000; or
(2) was a resident of Minnesota for any part of 1998, and
filed a 1998 Minnesota income tax return on or before November
30, 2000, 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 1998, chapter 389, article 1, section 1,
as amended, and who was not allowed to be claimed as a dependent
on a 1998 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 1998, chapter 383, section 20, 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 $168
at least $2,500 but less than $5,000 $217
at least $5,000 but less than $10,000 $231
at least $10,000 but less than $15,000 $253
at least $15,000 but less than $20,000 $275
at least $20,000 but less than $25,000 $299
at least $25,000 but less than $30,000 $312
at least $30,000 but less than $35,000 $338
at least $35,000 but less than $40,000 $369
at least $40,000 but less than $45,000 $396
at least $45,000 but less than $50,000 $417
at least $50,000 but less than $60,000 $444
at least $60,000 but less than $70,000 $476
at least $70,000 but less than $80,000 $523
at least $80,000 but less than $90,000 $562
at least $90,000 but less than $100,000 $620
at least $100,000 but less than $120,000 $671
at least $120,000 but less than $140,000 $735
at least $140,000 but less than $160,000 $795
at least $160,000 but less than $180,000 $851
at least $180,000 but less than $200,000 $904
at least $200,000 but less than $400,000 $1,157
at least $400,000 but less than $600,000 $1,522
at least $600,000 but less than $800,000 $1,826
at least $800,000 but less than $1,000,000 $2,093
$1,000,000 and over $2,400
(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 $95
at least $2,500 but less than $5,000 $116
at least $5,000 but less than $10,000 $137
at least $10,000 but less than $15,000 $184
at least $15,000 but less than $20,000 $210
at least $20,000 but less than $25,000 $228
at least $25,000 but less than $30,000 $238
at least $30,000 but less than $40,000 $259
at least $40,000 but less than $50,000 $290
at least $50,000 but less than $70,000 $342
at least $70,000 but less than $100,000 $435
at least $100,000 but less than $140,000 $524
at least $140,000 but less than $200,000 $632
at least $200,000 but less than $400,000 $857
at least $400,000 but less than $600,000 $1,128
$600,000 and over $1,200
(d) Individuals who were not residents of Minnesota for any
part of 1998 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
by November 30, 2000. 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) 29.7 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 1998 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,
1997, 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 1998 income tax
return, including subsequent adjustments to that return made
within the time limits specified in paragraph (l). 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 1998 income tax return, including subsequent
adjustments to that return made within the time limits specified
in paragraph (l). 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, 1997, and reported
on the taxpayer's original federal tax return for the first
taxable year beginning after December 31, 1997.
(f) Individuals who were residents of Minnesota for all of
1998, were not eligible for a rebate under paragraph (a),
attained the age of 18 on or before December 31, 1998, and
received in 1998 social security benefits as defined in section
86(d)(1) of the Internal Revenue Code of 1986, as amended
through December 31, 1999, are entitled to a rebate of $95. If
the Social Security Administration or Railroad Retirement Board
is paying benefits to a recipient by electronic funds transfers
in 2000, the rebate under this paragraph must be paid by the
commissioner through electronic funds transfer to the same
financial institution and into the same account into which the
Social Security Administration or Railroad Retirement Board
transfers social security benefits in calendar year 2000.
(g) An individual who:
(1) was allowed to be claimed as a dependent on a 1998
federal income tax return filed by another person;
(2) would have otherwise been eligible for a rebate under
clause (a)(2); and
(3) reported earned income as defined in section
32(c)(2)(A)(i) of the Internal Revenue Code,
is eligible for a rebate under this paragraph only. The
rebate under this paragraph equals 35 percent of the amount
allowed under the schedule in paragraph (c) based on the
individual's income. For an individual who was a resident of
Minnesota for less than the entire year, the sales tax rebate
equals the rebate calculated under this paragraph multiplied by
the percentage determined pursuant to Minnesota Statutes,
section 290.06, subdivision 2c, paragraph (e), as calculated on
the original 1998 income tax return.
(h) An individual who
(1) was a resident of Minnesota for any part of 1998;
(2) was not eligible for a rebate under paragraph (a) or
(f);
(3) was not allowed to be claimed as a dependent on a 1998
federal income tax return by another person; and
(4) filed a 1998 Minnesota income tax return before
November 30, 2000, in order to
(i) claim a credit under section 290.067, 290.0671, or
290.0674;
(ii) claim a refund of withheld taxes; or
(iii) claim a refund of estimated taxes,
is eligible for a rebate under this paragraph only. For married
couples filing joint returns and heads of households, the rebate
equals the minimum amount in paragraph (b). For single filers
and married individuals filing separate returns, the rebate
equals the minimum amount in paragraph (c). For an individual
who was a resident of Minnesota for less than the entire year,
the sales tax rebate equals the rebate calculated under this
paragraph multiplied by the percentage determined pursuant to
Minnesota Statutes, section 290.06, subdivision 2c, paragraph
(e), as calculated on the original 1998 income tax return.
(i) For a fiscal year taxpayer, the dates in paragraphs (a)
through (d) are extended one month for each month in calendar
year 1998 that occurred prior to the start of the individual's
1998 fiscal tax year.
(j) Before payment, the commissioner of revenue shall
adjust the rebate as follows:
the rebates calculated in paragraphs (b), (c), (d), (f),
(g), and (h) must be proportionately reduced to account for (i)
rebates under paragraphs (g) and (h), and (ii) 1998 income tax
returns that are filed on or after January 1, 2000, but before
June 1, 2000, so that the estimated amount of sales tax rebates
payable under paragraphs (b), (c), (d), (f), (g), and (h) on the
date the rebate is processed does not exceed $635,600,000. The
adjustment under this paragraph is not a rule subject to
Minnesota Statutes, chapter 14.
(k) The commissioner of revenue may begin making sales tax
rebates by July 1, 2000. Sales tax rebates not paid by January
1, 2001, bear interest at the rate specified in Minnesota
Statutes, section 270.75.
(l) A sales tax rebate shall not be adjusted based on
changes to a 1998 income tax return that are made by order of
assessment after the date the rebate is processed, or made by
the taxpayer that are filed with the commissioner of revenue
after that date.
(m) Individuals who filed a joint income tax return for
1998 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 1998 income tax return are living at separate addresses,
as indicated on their 1999 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.
(n) If a rebate is received by the estate of a deceased
individual after the probate estate has been closed, and if the
original rebate check is returned to the commissioner with a
copy of the decree of descent or final account of the estate,
social security numbers, and addresses of the beneficiaries, the
commissioner may issue separate checks in proportion to their
share in the residuary estate in the names of the residuary
beneficiaries of the estate.
(o) The sales tax rebate is a "Minnesota tax law" for
purposes of Minnesota Statutes, section 270B.01, subdivision 8.
(p) 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.
(q) If the commissioner of revenue cannot locate an
individual entitled to a sales tax rebate by July 1, 2002, or if
an individual to whom a sales tax rebate was issued has not
cashed the check by July 1, 2002, the right to the sales tax
rebate lapses and the check must be deposited in the general
fund.
(r) Individuals entitled to a sales tax rebate pursuant to
paragraph (a), (f), (g), or (h) 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, 2001, 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.
(s) 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.
(t) The rebate is a reduction of fiscal year 2000 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 2000
and is available until June 30, 2002.
(u) 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 or the commissioner determines that a rebate was
overstated or erroneously issued, the commissioner may issue an
order of assessment for the amount of the check or the amount
the check is overstated 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.
(v) 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.
(w) The commissioner may pay rebates required by this
section by electronic funds transfer to individuals who
requested that their 1999 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 1999 individual
income tax refund.
Sec. 3. [APPROPRIATIONS.]
(a) $1,730,600 is appropriated from the general fund to the
commissioner of revenue to administer the sales tax rebates in
this article and in article 3 for fiscal year 2000. Any
unencumbered balance remaining on June 30, 2000, does not cancel
but is available for expenditure by the commissioner of revenue
until June 30, 2001. Notwithstanding Minnesota Statutes,
section 16A.285, and except as provided in paragraph (b), the
commissioner of revenue may not use this appropriation for any
purpose other than administering the 1999 and 2000 sales tax
rebates. This is a one-time appropriation and may not be added
to the agency's budget base.
(b) Of the amount appropriated in paragraph (a), the
necessary amount is transferred from the commissioner of revenue
to the legislative auditor, not to exceed $50,000, for an audit
of the appropriations to the department of revenue for
administration of the property tax rebates in Laws 1997, chapter
231, article 16, section 29; and Laws 1998, chapter 389, article
1, section 4; and the appropriation for administration of the
sales tax rebate in Laws 1999, chapter 243, article 1, section
3. The purpose of this audit is to determine whether the funds
appropriated were expended consistent with the purpose of the
appropriations. The legislative auditor shall report the
findings of the audit to the legislature by January 1, 2001.
(c) $278,000 is appropriated from the general fund to the
state treasurer to pay the cost of clearing sales tax rebate
checks through commercial banks.
Sec. 4. [EFFECTIVE DATE.]
Sections 1 to 3 are effective the day following final
enactment.
ARTICLE 2
AGRICULTURAL ASSISTANCE
Section 1. 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.
(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.
(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 a total of $10,000 in sales of unprocessed
livestock or unprocessed dairy products or receipts from the
care of another farmer's livestock 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.
EFFECTIVE DATE: This section is effective retroactively to
April 23, 1999.
Sec. 2. Laws 1999, chapter 112, section 1, subdivision 2,
is amended to read:
Subd. 2. [PAYMENT TO FARMERS.] Every farm operator may
apply on a separate form for each farm that they operate to the
commissioner for payments as provided under this subdivision.
The payment shall be made to each farmer at risk for a farm
operation and shall equal $4, multiplied by the number of acres
of the farm operation, multiplied by the percentage of the risk
borne by that farmer for that farm operation. If total payments
for a farm to all farmers at risk for that farm would exceed
$5,600, the payment to each farmer at risk shall be prorated so
that the total payments to all farmers at risk for that farm do
not exceed $5,600.
Applications shall be based on information reported to the
farm service agency for crop year 1998 by December 31, 1998.
The applications shall include the social security number or
federal employer identification number or a producer number
assigned by the farm service agency for each farmer and the farm
service agency farm number from form 156EZ. The commissioner
shall prepare application forms for the payment and ensure that
they are available throughout the state. The commissioner shall
make payments by June 30, 1999, to each eligible farmer who
applies by May 31, 1999, or within 30 days of the application if
the application is received after May 31, 1999. In no case will
applications be accepted after September June 30, 1999 2000.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 3. Laws 1999, chapter 112, section 1, subdivision 7,
is amended to read:
Subd. 7. [CERTIFICATION AND PAYMENT.] Any person eligible
for the refund under subdivisions 4 to 8 shall send the
commissioner a copy of the certification that the taxpayer
received from the county auditor. In no case will applications
be accepted after November June 30, 1999 2000. The commissioner
shall issue a refund by July 15, 1999, to each qualifying
taxpayer who applied by June 15, 1999, or within 30 days of
receipt of the application if received after June 15, 1999.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 4. Laws 1999, chapter 112, section 2, is amended to
read:
Sec. 2. [APPROPRIATION.]
(a) The amount necessary to fund the payments required
under section 1, subdivisions 2 and 7, is appropriated in fiscal
year years 1999 and 2000 from the general fund to the
commissioner of revenue. This appropriation is available until
June 30, 2000 2001.
(b) $68,000 is appropriated in fiscal year 1999 to the
commissioner of revenue for distribution to counties for the
costs of administering section 1, subdivisions 4 to 8. This
appropriation is available until June 30, 2000. The
distribution to counties shall be based on the number of refunds
received under the provisions of section 1, subdivisions 4 to 8.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 5. [AGRICULTURAL ASSISTANCE IN 2000.]
Subdivision 1. [DEFINITIONS.] (a) The definitions in this
subdivision apply to this section.
(b) "Acre" means an acre of agricultural land within a
qualified county as reported on the schedule of crop insurance.
(c) "Commissioner" means the commissioner of agriculture.
(d) "Crop insurance" means federal multiple peril crop and
revenue insurance, hail and wind crop insurance, or catastrophic
crop insurance.
(e) "Person" includes individuals, fiduciaries, estates,
trusts, partnerships, joint farm ventures, and corporations.
(f) "Qualified counties" means the counties which were
declared as disaster counties in Minnesota by a 1999
presidential declaration or which are contiguous to any one of
the counties which was declared a disaster county in Minnesota
by a 1999 presidential declaration. The counties are: Aitkin,
Becker, Beltrami, Carlton, Cass, Clay, Clearwater, Cook, Crow
Wing, Hubbard, Itasca, Kanabec, Kittson, Koochiching, Lake, Lake
of the Woods, Mahnomen, Marshall, Mille Lacs, Morrison, Norman,
Otter Tail, Pennington, Pine, Polk, Red Lake, Roseau, St. Louis,
Todd, Wadena, and Wilkin.
Subd. 2. [PAYMENT.] Every person operating a farm in a
qualified county who has obtained crop insurance on that farm
may apply on a form prepared by the commissioner for payments as
provided under this subdivision. The payment equals $4,
multiplied by the number of acres covered under the crop
insurance. In no case shall total payments for any single acre
of land exceed $4.
Applications must be based on information for crop year
2000. The applications must include the applicant's social
security number or federal employer identification number and a
copy of the schedule of crop insurance for crop year 2000. In
the case of a married couple, the social security numbers or
federal employer identification numbers are required for both
spouses. The commissioner shall prepare application forms for
the payments and ensure that they are available in the qualified
counties. The commissioner shall make payments by October 1,
2000, to each eligible person who applies by August 15, 2000, or
within 45 days of the application if the application is received
after August 15, 2000. In no case will applications be accepted
after September 30, 2000.
Subd. 3. [LIMIT.] No individual or married couple may
receive total payments under this section in excess of $5,600
whether individually, through the person's pro rata ownership
share of another eligible farming entity, or both.
Subd. 4. [PENALTIES.] If the commissioner of agriculture
determines that claims for payments under subdivision 2 are or
were excessive or were filed with fraudulent intent, the claim
must be disallowed in full. If the claim has been paid, the
commissioner of agriculture shall notify the commissioner of
revenue of the relevant information, and the amount disallowed
must be recovered by assessment and collection under Minnesota
Statutes, chapters 270 and 289A. The assessment must be made
within two years after a check is cashed, but if cashing a check
constitutes theft under Minnesota Statutes, section 609.52, or
forgery under Minnesota Statutes, section 609.631, the
assessment may be made at any time. The assessment may be
appealed administratively and judicially.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 6. [APPROPRIATION.]
(a) The amount necessary to fund the payments under section
5 is appropriated in fiscal year 2001 from the general fund to
the commissioner of agriculture. This appropriation is
available until June 30, 2001.
(b) The amount necessary to administer the agricultural
assistance program under section 5 is appropriated from the
general fund to the commissioner of agriculture, provided that
amount shall not exceed $50,000.
EFFECTIVE DATE: This section is effective the day
following final enactment.
ARTICLE 3
1999 SALES TAX REBATE
Section 1. Laws 1999, chapter 243, article 1, section 2,
is amended to read:
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) was a resident of Minnesota for any part of 1997, and
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) An individual who would have been eligible for a rebate
under paragraph (a), clause (1) or (2), or (d) had the
individual filed a 1997 Minnesota income tax return or claim
form by June 15, 1999, who files the return or claim form by
June 30, 2000, is eligible for the rebate amount under paragraph
(b) as adjusted by paragraph (h) if the individual is married
filing joint or head of household and the rebate amount under
paragraph (c) as adjusted by paragraph (h) if the individual is
married filing separately or single.
(g) For a fiscal year taxpayer, the June 15, 1999, dates in
paragraphs (a) through (d) are extended one month for each month
in calendar year 1997 that occurred prior to the start of the
individual's 1997 fiscal tax year.
(h) 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) (i) 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. Sales tax rebates paid to
(1) taxpayers who file their original 1997 Minnesota income tax
return after June 15, 1999, and (2) qualifying nonresidents who
file a claim for rebate after June 15, 1999,
bear interest at the rate specified in Minnesota Statutes,
section 270.75, beginning October 1, 2000.
(h) (j) 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) (k) 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. If a rebate is received by the estate of a deceased
individual after the probate estate has been closed, and if the
original rebate check is returned to the commissioner with a
copy of the decree of descent or final account of the estate,
social security numbers, and addresses of the beneficiaries, the
commissioner may issue separate checks in proportion to their
share in the residuary estate in the names of the residuary
beneficiaries of the estate.
(j) (l) The sales tax rebate is a "Minnesota tax law" for
purposes of Minnesota Statutes, section 270B.01, subdivision 8.
(k) (m) 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) (n) 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) (o) 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. Taxpayers who file their
original 1997 Minnesota income tax return after June 15, 1999,
and qualifying nonresidents who file a claim for rebate after
June 15, 1999, and who do not receive it or who receive a sales
tax rebate that was not correctly computed, must file a claim
with the commissioner before July 1, 2001, 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) (p) 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) (q) 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) (r) 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 or the commissioner determines
that a rebate was overstated or erroneously issued, the
commissioner may issue an order of assessment for the amount of
the check or the amount the check is overstated 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) (s) 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) (t) 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.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 2. [APPLICATION OF LAW.]
The limitation on the total amount of rebates in Laws 1999,
chapter 243, article 1, section 2, paragraph (f), does not apply
to rebates issued under section 1. To the extent applicable,
all other provisions of Laws 1999, chapter 243, article 1,
section 2, apply to the rebates paid under section 1.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 3. [APPROPRIATION.]
The amount necessary to pay the rebates under section 1 is
appropriated from the general fund to the commissioner of
revenue for fiscal years 2000 and 2001.
EFFECTIVE DATE: This section is effective the day
following final enactment.
ARTICLE 4
INCOME AND FRANCHISE TAXES
Section 1. Minnesota Statutes 1998, section 289A.08, is
amended by adding a subdivision to read:
Subd. 16. [TAX REFUND OR RETURN PREPARERS.] (a) A "tax
refund or return preparer," as defined in section 289A.60,
subdivision 13, paragraph (g), who prepared more than 500
Minnesota individual income tax returns for the prior calendar
year must file all Minnesota individual income tax returns
prepared for the current calendar year by electronic means.
(b) For tax returns prepared for the tax year beginning in
2001, the "500" in paragraph (a) is reduced to 250.
(c) For tax returns prepared for tax years beginning after
December 31, 2001, the "500" in paragraph (a) is reduced to 100.
(d) Paragraph (a) does not apply to a return if the
taxpayer has indicated on the return that the taxpayer did not
want the return filed by electronic means.
EFFECTIVE DATE: This section is effective for tax returns
prepared for taxable years beginning after December 31, 1999.
Sec. 2. Minnesota Statutes 1998, section 289A.20,
subdivision 2, is amended to read:
Subd. 2. [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING,
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND
WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.]
(a) A tax required to be deducted and withheld during the
quarterly period must be paid on or before the last day of the
month following the close of the quarterly period, unless an
earlier time for payment is provided. A tax required to be
deducted and withheld from compensation of an entertainer and
from a payment to an out-of-state contractor must be paid on or
before the date the return for such tax must be filed under
section 289A.18, subdivision 2. Taxes required to be deducted
and withheld by partnerships and S corporations must be paid on
or before the date the return must be filed under section
289A.18, subdivision 2.
(b) An employer who, during the previous quarter, withheld
more than $1,500 of tax under section 290.92, subdivision 2a or
3, or 290.923, subdivision 2, must deposit tax withheld under
those sections with the commissioner within the time allowed to
deposit the employer's federal withheld employment taxes under
Treasury Regulation, section 31.6302-1, without regard to the
safe harbor or de minimis rules in subparagraph (f) or the
one-day rule in subsection (c), clause (3). Taxpayers must
submit a copy of their federal notice of deposit status to the
commissioner upon request by the commissioner.
(c) The commissioner may prescribe by rule other return
periods or deposit requirements. In prescribing the reporting
period, the commissioner may classify payors according to the
amount of their tax liability and may adopt an appropriate
reporting period for the class that the commissioner judges to
be consistent with efficient tax collection. In no event will
the duration of the reporting period be more than one year.
(d) If less than the correct amount of tax is paid to the
commissioner, proper adjustments with respect to both the tax
and the amount to be deducted must be made, without interest, in
the manner and at the times the commissioner prescribes. If the
underpayment cannot be adjusted, the amount of the underpayment
will be assessed and collected in the manner and at the times
the commissioner prescribes.
(e) If the aggregate amount of the tax withheld during a
fiscal year ending June 30 under section 290.92, subdivision 2a
or 3, is equal to or exceeds the amounts established for
remitting federal withheld taxes pursuant to the regulations
promulgated under section 6302(h) of the Internal Revenue Code,
the employer must remit each required deposit for wages paid in
the subsequent calendar year by means of a funds transfer as
defined in section 336.4A-104, paragraph (a). The funds
transfer payment date, as defined in section 336.4A-401, must be
on or before the date the deposit is due. If the date the
deposit is due is not a funds transfer business day, as defined
in section 336.4A-105, paragraph (a), clause (4), the payment
date must be on or before the funds transfer business day next
following the date the deposit is due.
(f) A third-party bulk filer as defined in section 290.92,
subdivision 30, paragraph (a), clause (2), who remits
withholding deposits must remit all deposits by means of a funds
transfer as provided in paragraph (e), regardless of the
aggregate amount of tax withheld during a fiscal year for all of
the employers.
EFFECTIVE DATE: This section is effective for wages paid
after December 31, 1999.
Sec. 3. Minnesota Statutes 1998, section 289A.26,
subdivision 1, is amended to read:
Subdivision 1. [MINIMUM LIABILITY.] A corporation subject
to taxation under chapter 290 (excluding section 290.92) or an
entity subject to taxation under section 290.05, subdivision 3,
must make payment of estimated tax for the taxable year if its
tax liability so computed can reasonably be expected to exceed
$500, or in accordance with rules prescribed by the commissioner
for an affiliated group of corporations electing to file filing
one return as permitted under section 289A.08, subdivision 3.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 1998, section 289A.60,
subdivision 1, is amended to read:
Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] (a) If a
tax other than a withholding or sales or use tax is not paid
within the time specified for payment, a penalty must be added
to the amount required to be shown as tax. The penalty is three
percent of the tax not paid on or before the date specified for
payment of the tax if the failure is for not more than 30 days,
with an additional penalty of three percent of the amount of tax
remaining unpaid during each additional 30 days or fraction of
30 days during which the failure continues, not exceeding 24
percent in the aggregate.
If an individual files a state individual income tax return
and pays all of the state individual income tax with the filing
of a return within six months of the date the return is due and
the amount paid by the due date of the return is at least 90
percent of the amount of tax due, as shown on the return, the
individual is presumed to have reasonable cause for the late
payment.
(b) If a withholding or sales or use tax is not paid within
the time specified for payment, a penalty must be added to the
amount required to be shown as tax. The penalty is five percent
of the tax not paid on or before the date specified for payment
of the tax if the failure is for not more than 30 days, with an
additional penalty of five percent of the amount of tax
remaining unpaid during each additional 30 days or fraction of
30 days during which the failure continues, not exceeding 15
percent in the aggregate.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 5. Minnesota Statutes 1999 Supplement, section
290.01, subdivision 19b, is amended to read:
Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For
individuals, estates, and trusts, there shall be subtracted from
federal taxable income:
(1) interest income on obligations of any authority,
commission, or instrumentality of the United States to the
extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the
United States;
(2) if included in federal taxable income, the amount of
any overpayment of income tax to Minnesota or to any other
state, for any previous taxable year, whether the amount is
received as a refund or as a credit to another taxable year's
income tax liability;
(3) the amount paid to others, less the credit allowed
under section 290.0674, not to exceed $1,625 for each qualifying
child in grades kindergarten to 6 and $2,500 for each qualifying
child in grades 7 to 12, for tuition, textbooks, and
transportation of each 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 a qualified
governmental pension plan, an individual retirement account,
simplified employee pension, or qualified plan covering a
self-employed person 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, 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 for taxable years
beginning after December 31, 1999, and before January 1, 2001.
If an individual's subtraction under this clause exceeds the
individual's taxable income, the excess may be carried forward
to taxable years beginning after December 31, 2000, and before
January 1, 2002;
(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 or used to claim the long-term care insurance
credit under section 290.0672, the amount paid for health
insurance of self-employed individuals as determined under
section 162(l) of the Internal Revenue Code, except that the
percent limit does not apply. If the taxpayer individual
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 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; and
(13) for taxable years beginning before January 1, 2008,
the amount of the federal small ethanol producer credit allowed
under section 40(a)(3) of the Internal Revenue Code which is
included in gross income under section 87 of the Internal
Revenue Code.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 6. Minnesota Statutes 1998, section 290.01,
subdivision 19c, is amended to read:
Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE
INCOME.] For corporations, there shall be added to federal
taxable income:
(1) the amount of any deduction taken for federal income
tax purposes for income, excise, or franchise taxes based on net
income or related minimum taxes, including but not limited to
the tax imposed under section 290.0922, paid by the corporation
to Minnesota, another state, a political subdivision of another
state, the District of Columbia, or any foreign country or
possession of the United States;
(2) interest not subject to federal tax upon obligations
of: the United States, its possessions, its agencies, or its
instrumentalities; the state of Minnesota or any other state,
any of its political or governmental subdivisions, any of its
municipalities, or any of its governmental agencies or
instrumentalities; the District of Columbia; or Indian tribal
governments;
(3) exempt-interest dividends received as defined in
section 852(b)(5) of the Internal Revenue Code;
(4) the amount of any net operating loss deduction taken
for federal income tax purposes under section 172 or 832(c)(10)
of the Internal Revenue Code or operations loss deduction under
section 810 of the Internal Revenue Code;
(5) the amount of any special deductions taken for federal
income tax purposes under sections 241 to 247 of the Internal
Revenue Code;
(6) losses from the business of mining, as defined in
section 290.05, subdivision 1, clause (a), that are not subject
to Minnesota income tax;
(7) the amount of any capital losses deducted for federal
income tax purposes under sections 1211 and 1212 of the Internal
Revenue Code;
(8) the amount of any charitable contributions deducted for
federal income tax purposes under section 170 of the Internal
Revenue Code;
(9) the exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal
Revenue Code;
(10) the amount of percentage depletion deducted under
sections 611 through 614 and 291 of the Internal Revenue Code;
(11) for certified pollution control facilities placed in
service in a taxable year beginning before December 31, 1986,
and for which amortization deductions were elected under section
169 of the Internal Revenue Code of 1954, as amended through
December 31, 1985, the amount of the amortization deduction
allowed in computing federal taxable income for those
facilities;
(12) the amount of any deemed dividend from a foreign
operating corporation determined pursuant to section 290.17,
subdivision 4, paragraph (g);
(13) the amount of any environmental tax paid under section
59(a) of the Internal Revenue Code; and
(14) the amount of a partner's pro rata share of net income
which does not flow through to the partner because the
partnership elected to pay the tax on the income under section
6242(a)(2) of the Internal Revenue Code.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 7. Minnesota Statutes 1998, section 290.01,
subdivision 19d, is amended to read:
Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL
TAXABLE INCOME.] For corporations, there shall be subtracted
from federal taxable income after the increases provided in
subdivision 19c:
(1) the amount of foreign dividend gross-up added to gross
income for federal income tax purposes under section 78 of the
Internal Revenue Code;
(2) the amount of salary expense not allowed for federal
income tax purposes due to claiming the federal jobs credit
under section 51 of the Internal Revenue Code;
(3) any dividend (not including any distribution in
liquidation) paid within the taxable year by a national or state
bank to the United States, or to any instrumentality of the
United States exempt from federal income taxes, on the preferred
stock of the bank owned by the United States or the
instrumentality;
(4) amounts disallowed for intangible drilling costs due to
differences between this chapter and the Internal Revenue Code
in taxable years beginning before January 1, 1987, as follows:
(i) to the extent the disallowed costs are represented by
physical property, an amount equal to the allowance for
depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7, subject to the modifications contained in
subdivision 19e; and
(ii) to the extent the disallowed costs are not represented
by physical property, an amount equal to the allowance for cost
depletion under Minnesota Statutes 1986, section 290.09,
subdivision 8;
(5) the deduction for capital losses pursuant to sections
1211 and 1212 of the Internal Revenue Code, except that:
(i) for capital losses incurred in taxable years beginning
after December 31, 1986, capital loss carrybacks shall not be
allowed;
(ii) for capital losses incurred in taxable years beginning
after December 31, 1986, a capital loss carryover to each of the
15 taxable years succeeding the loss year shall be allowed;
(iii) for capital losses incurred in taxable years
beginning before January 1, 1987, a capital loss carryback to
each of the three taxable years preceding the loss year, subject
to the provisions of Minnesota Statutes 1986, section 290.16,
shall be allowed; and
(iv) for capital losses incurred in taxable years beginning
before January 1, 1987, a capital loss carryover to each of the
five taxable years succeeding the loss year to the extent such
loss was not used in a prior taxable year and subject to the
provisions of Minnesota Statutes 1986, section 290.16, shall be
allowed;
(6) an amount for interest and expenses relating to income
not taxable for federal income tax purposes, if (i) the income
is taxable under this chapter and (ii) the interest and expenses
were disallowed as deductions under the provisions of section
171(a)(2), 265 or 291 of the Internal Revenue Code in computing
federal taxable income;
(7) in the case of mines, oil and gas wells, other natural
deposits, and timber for which percentage depletion was
disallowed pursuant to subdivision 19c, clause (11), a
reasonable allowance for depletion based on actual cost. In the
case of leases the deduction must be apportioned between the
lessor and lessee in accordance with rules prescribed by the
commissioner. In the case of property held in trust, the
allowable deduction must be apportioned between the income
beneficiaries and the trustee in accordance with the pertinent
provisions of the trust, or if there is no provision in the
instrument, on the basis of the trust's income allocable to
each;
(8) for certified pollution control facilities placed in
service in a taxable year beginning before December 31, 1986,
and for which amortization deductions were elected under section
169 of the Internal Revenue Code of 1954, as amended through
December 31, 1985, an amount equal to the allowance for
depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7;
(9) the amount included in federal taxable income
attributable to the credits provided in Minnesota Statutes 1986,
section 273.1314, subdivision 9, or Minnesota Statutes, section
469.171, subdivision 6;
(10) amounts included in federal taxable income that are
due to refunds of income, excise, or franchise taxes based on
net income or related minimum taxes paid by the corporation to
Minnesota, another state, a political subdivision of another
state, the District of Columbia, or a foreign country or
possession of the United States to the extent that the taxes
were added to federal taxable income under section 290.01,
subdivision 19c, clause (1), in a prior taxable year;
(11) 80 percent of royalties, fees, or other like income
accrued or received from a foreign operating corporation or a
foreign corporation which is part of the same unitary business
as the receiving corporation;
(12) income or gains from the business of mining as defined
in section 290.05, subdivision 1, clause (a), that are not
subject to Minnesota franchise tax;
(13) the amount of handicap access expenditures in the
taxable year which are not allowed to be deducted or capitalized
under section 44(d)(7) of the Internal Revenue Code;
(14) the amount of qualified research expenses not allowed
for federal income tax purposes under section 280C(c) of the
Internal Revenue Code, but only to the extent that the amount
exceeds the amount of the credit allowed under section 290.068;
(15) the amount of salary expenses not allowed for federal
income tax purposes due to claiming the Indian employment credit
under section 45A(a) of the Internal Revenue Code; and
(16) the amount of any refund of environmental taxes paid
under section 59A of the Internal Revenue Code; and
(17) for taxable years beginning before January 1, 2008,
the amount of the federal small ethanol producer credit allowed
under section 40(a)(3) of the Internal Revenue Code which is
included in gross income under section 87 of the Internal
Revenue Code.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 8. Minnesota Statutes 1998, section 290.01,
subdivision 19e, is amended to read:
Subd. 19e. [DEPRECIATION MODIFICATIONS FOR CORPORATIONS.]
In the case of corporations, a modification shall be made for
the accelerated cost recovery system. The allowable deduction
for the accelerated cost recovery system is the same amount as
provided in section 168 of the Internal Revenue Code with the
following modifications. The modifications apply to taxable
years beginning after December 31, 1986, and to property for
which deductions under the Tax Reform Act of 1986, Public Law
Number 99-514, are elected or apply. The modifications in
paragraphs (a) and (c) do not apply to taxable years beginning
after December 31, 2000.
(a) For property placed in service after December 31, 1980,
and before January 1, 1987, 40 percent of the allowance pursuant
to section 168 of the Internal Revenue Code of 1954, as amended
through December 31, 1985, for 15-, 18-, or 19-year real
property shall not be allowed and for all other property 20
percent shall not be allowed.
(b) For property placed in service after December 31, 1987,
no modification shall be made.
(c) For property placed in service after July 31, 1986, and
before January 1, 1987, for which the taxpayer elects the
deduction pursuant to section 203 of the Tax Reform Act of 1986,
Public Law Number 99-514, and for property placed in service
after December 31, 1986, and before January 1, 1988, 15 percent
of the allowance pursuant to section 168 of the Internal Revenue
Code shall not be allowed.
(d) For property placed in service after December 31, 1980,
and before January 1, 1987, for which the taxpayer elects to use
the straight line method provided in section 168(b)(3), (f)(12),
or (j)(1) or a method provided in section 168(e)(2) of the
Internal Revenue Code, as amended through December 31, 1986, but
excluding property for which the taxpayer elects the deduction
pursuant to section 203 of the Tax Reform Act of 1986, Public
Law Number 99-514, the modifications provided in paragraph (a)
do not apply.
(e) For taxable years beginning before January 1, 2001, for
property subject to the modifications contained in paragraphs
(a) and (c) and Minnesota Statutes 1986, section 290.09,
subdivision 7, clause (c), the following modification shall be
made after the entire amount of the allowable deduction has been
allowed for federal tax purposes for that property under the
provisions of section 168 of the Internal Revenue Code. The
remaining depreciable basis in those assets for Minnesota
purposes, including the amount of any basis reduction to reflect
the investment tax credit for federal purposes under sections
48(q) and 49(d) of the Internal Revenue Code, shall be a
depreciation allowance computed using the straight line method
over the following number of years:
(1) three-year property, one year;
(2) five-year and seven-year property, two years;
(3) ten-year property, five years; and
(4) all other property, seven years.
(f) For taxable years beginning after December 31, 2000,
the amount of any remaining modification made under paragraph
(a) or (c) or Minnesota Statutes 1986, section 290.09,
subdivision 7, clause (c), not previously deducted under
paragraph (e), including the amount of any basis reduction to
reflect the federal investment tax credit for federal purposes
under section 48(q) and 49(d) of the Internal Revenue Code, is a
depreciation allowance in the first taxable year after December
31, 2000.
(g) For taxable years beginning before January 1, 2001, and
for property placed in service after December 31, 1987, the
remaining depreciable basis for Minnesota purposes that is
attributable to the basis reduction for federal purposes to
reflect the investment tax credit under sections 48(q) and 49(d)
of the Internal Revenue Code, shall be allowed as a deduction in
the first taxable year after the entire amount of the allowable
deduction for that property under the provisions of section 168
of the Internal Revenue Code, has been allowed, except that
where the straight line method provided in section 168(b)(3) is
used, the deduction provided in this clause shall be allowed in
the last taxable year in which an allowance for depreciation is
allowed for that property.
(g) (h) For qualified timber property for which the
taxpayer made an election under section 194 of the Internal
Revenue Code, the remaining depreciable basis for Minnesota
purposes is allowed as a deduction in the first taxable year
after the entire allowable deduction has been allowed for
federal tax purposes.
(h) (i) The basis of property to which section 168 of the
Internal Revenue Code applies is its basis as provided in this
chapter including the modifications provided in this subdivision
and in Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c). The recapture tax provisions provided in
sections 1245 and 1250 of the Internal Revenue Code apply but
must be calculated using the basis provided in the preceding
sentence.
(i) (j) The basis of an asset acquired in an exchange of
assets, including an involuntary conversion, is the same as its
federal basis under the provisions of the Internal Revenue Code,
except that the difference in basis due to the modifications in
this subdivision and in Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c), is a deduction as provided in
paragraph (e).
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 2000.
Sec. 9. Minnesota Statutes 1998, section 290.015,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE.] (a) Except as provided in
subdivision 3, a person that conducts a trade or business that
has a place of business in this state, regularly has employees
or independent contractors conducting business activities on its
behalf in this state, or owns or leases real property that is
located in this state or tangible personal property located,
including but not limited to mobile property, that is present in
this state as defined in section 290.191, subdivision 6,
paragraph (e), is subject to the taxes imposed by this chapter.
(b) Except as provided in subdivision 3, a person that
conducts a trade or business not described in paragraph (a) is
subject to the taxes imposed by this chapter if the trade or
business obtains or regularly solicits business from within this
state, without regard to physical presence in this state.
(c) For purposes of paragraph (b), business from within
this state includes, but is not limited to:
(1) sales of products or services of any kind or nature to
customers in this state who receive the product or service in
this state;
(2) sales of services which are performed from outside this
state but the services are received in this state;
(3) transactions with customers in this state that involve
intangible property and result in income flowing to the person
from within receipts attributed to this state as provided in
section 290.191, subdivision 5 or 6;
(4) leases of tangible personal property that is located in
this state as defined in section 290.191, subdivision 5,
paragraph (g), or 6, paragraph (e); and
(5) sales and leases of real property located in this
state; and
(6) if a financial institution, deposits received from
customers in this state.
(d) For purposes of paragraph (b), solicitation includes,
but is not limited to:
(1) the distribution, by mail or otherwise, without regard
to the state from which such distribution originated or in which
the materials were prepared, of catalogs, periodicals,
advertising flyers, or other written solicitations of business
to customers in this state;
(2) display of advertisements on billboards or other
outdoor advertising in this state;
(3) advertisements in newspapers published in this state;
(4) advertisements in trade journals or other periodicals,
the circulation of which is primarily within this state;
(5) advertisements in a Minnesota edition of a national or
regional publication or a limited regional edition of which this
state is included of a broader regional or national publication
which are not placed in other geographically defined editions of
the same issue of the same publication;
(6) advertisements in regional or national publications in
an edition which is not by its contents geographically targeted
to Minnesota, but which is sold over the counter in Minnesota or
by subscription to Minnesota residents;
(7) advertisements broadcast on a radio or television
station located in Minnesota; or
(8) any other solicitation by telegraph, telephone,
computer database, cable, optic, microwave, or other
communication system.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 10. Minnesota Statutes 1998, section 290.015,
subdivision 3, is amended to read:
Subd. 3. [EXCEPTIONS.] (a) A person is not subject to tax
under this chapter if the person is engaged in the business of
selling tangible personal property and taxation of that person
under this chapter is precluded by Public Law Number 86-272,
United States Code, title 15, sections 381 to 384, or would be
so precluded except for the fact that the person stored tangible
personal property in a state licensed facility under chapter 231.
(b) Ownership of an interest in the following types of
property (including those contacts with this state reasonably
required to evaluate and complete the acquisition or disposition
of the property, the servicing of the property or the income
from it, the collection of income from the property, or the
acquisition or liquidation of collateral relating to the
property) shall not be a factor in determining whether the owner
is subject to tax under this chapter:
(1) an interest in a real estate mortgage investment
conduit, a real estate investment trust, a financial asset
securitization investment trust, or a regulated investment
company or a fund of a regulated investment company, as those
terms are defined in the Internal Revenue Code;
(2) an interest in money market instruments or securities
as defined in section 290.191, subdivision 6, paragraphs (c) and
(d);
(3) an interest in a loan-backed, mortgage-backed, or
receivable-backed security representing either: (i) ownership
in a pool of promissory notes, mortgages, or receivables or
certificates of interest or participation in such notes,
mortgages, or receivables, or (ii) debt obligations or equity
interests which provide for payments in relation to payments or
reasonable projections of payments on the notes, mortgages, or
receivables;
(4) an interest acquired from a person in assets described
in section 290.191, subdivision 11, paragraphs (e) to (l),
subject to the provisions of paragraph (c), clause (2)(A);
(5) an interest acquired from a person in the right to
service, or collect income from any assets described in section
290.191, subdivision 11, paragraphs (e) to (l), subject to the
provisions of paragraph (c), clause (2)(A);
(6) an interest acquired from a person in a funded or
unfunded agreement to extend or guarantee credit whether
conditional, mandatory, temporary, standby, secured, or
otherwise, subject to the provisions of paragraph (c), clause
(2)(A);
(7) an interest of a person other than an individual,
estate, or trust, in any intangible, tangible, real, or personal
property acquired in satisfaction, whether in whole or in part,
of any asset embodying a payment obligation which is in default,
whether secured or unsecured, the ownership of an interest in
which would be exempt under the preceding provisions of this
subdivision, provided the property is disposed of within a
reasonable period of time; or
(8) amounts held in escrow or trust accounts, pursuant to
and in accordance with the terms of property described in this
subdivision.
(c)(1) For purposes of paragraph (b), clauses (4) to (6),
an interest in the type of assets or credit agreements described
is deemed to exist at the time the owner becomes legally
obligated, conditionally or unconditionally, to fund, acquire,
renew, extend, amend, or otherwise enter into the credit
arrangement.
(2)(A) An owner has acquired an interest from a person in
paragraph (b), clauses (4) to (6), assets if:
(i) the owner at the time of the acquisition of the asset
does not own, directly or indirectly, 15 percent or more of the
outstanding stock or in the case of a partnership 15 percent or
more of the capital or profit interests of the person from whom
it acquired the asset;
(ii) the person from whom the owner acquired the asset
regularly sells, assigns, or transfers interests in paragraph
(b), clauses (4) to (6), assets during the 12 calendar months
immediately preceding the month of acquisition to three or more
persons; and
(iii) the person from whom the owner acquired the asset
does not sell, assign, or transfer 75 percent or more of its
paragraph (b), clauses (4) to (6), assets during the 12 calendar
months immediately preceding the month of acquisition to the
owner.
For purposes of determining indirect ownership under item (i),
the owner is deemed to own all stock, capital, or profit
interests owned by another person if the owner directly owns 15
percent or more of the stock, capital, or profit interests in
the other person. The owner is also deemed to own through any
intermediary parties all stock, capital, and profit interests
directly owned by a person to the extent there exists a 15
percent or more chain of ownership of stock, capital, or profit
interests between the owner, intermediary parties and the person.
(B) If the owner of the asset is a member of the a unitary
group business, paragraph (b), clauses (4) to (8), do not apply
to an interest acquired from another member of the unitary group
business. If the interest in the asset was originally acquired
from a nonunitary member and at that time qualified as a section
290.015, subdivision 3, paragraph (b), asset, the foregoing
limitation does not apply.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 11. Minnesota Statutes 1998, section 290.015,
subdivision 4, is amended to read:
Subd. 4. [LIMITATIONS.] (a) This section does not subject
a trade or business to any regulation, including any tax, of any
local unit of government or subdivision of this state if the
trade or business does not own or lease tangible or real
property located within this state and has no employees or
independent contractors present in this state to assist in the
carrying on of the business.
(b) The purchase of tangible personal property or
intangible property or services by a person that conducts a
trade or business with the principal place of business outside
of Minnesota, referred to as the "non-Minnesota person", from a
person within Minnesota shall not be taken into account in
determining whether the non-Minnesota person is subject to the
taxes imposed by this chapter, except for services involving
either the direct solicitation of Minnesota customers or
relationships with Minnesota customers after sales are made.
This paragraph is subject to the limitations contained in
subdivision 3, paragraph (b), clauses (4) to (6).
(c) No Contact with any Minnesota financial institution by
any financial institution with its principal place of business
outside Minnesota with respect to transactions described in
subdivision 3, or with respect to deposits received from or by a
Minnesota financial institution, shall not be taken into account
in determining whether such a financial institution is subject
to the taxes imposed by this chapter. The fact of Participation
by a Minnesota financial institution in a transaction which also
involves a borrower and a financial institution that conducts a
trade or business with its principal place of business outside
of Minnesota shall not be a factor in determining whether such
financial institution is subject to the taxes imposed by this
chapter. This paragraph does not apply to transactions between
or among members of the same unitary group business.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 12. Minnesota Statutes 1999 Supplement, 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 $25,220 $25,680, 5.5 5.35 percent;
(2) On all over $25,220 $25,680, but not over
$100,200 $102,030, 7.25 7.05 percent;
(3) On all over $100,200 $102,030, 8 7.85 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 $17,250 $17,570, 5.5 5.35 percent;
(2) On all over $17,250 $17,570, but not over
$56,680 $57,710, 7.25 7.05 percent;
(3) On all over $56,680 $57,710, 8 7.85 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 $21,240 $21,630, 5.5 5.35 percent;
(2) On all over $21,240 $21,630, but not
over $85,350 $86,910, 7.25 7.05 percent;
(3) On all over $85,350 $86,910, 8 7.85 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 and increased by the additions required
under section 290.01, subdivision 19a, clauses (1) and (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) and (6), and reduced by the
amounts specified in section 290.01, subdivision 19b, clause (1).
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 13. Minnesota Statutes 1999 Supplement, section
290.06, subdivision 2d, is amended to read:
Subd. 2d. [INFLATION ADJUSTMENT OF BRACKETS.] (a) For
taxable years beginning after December 31, 1999 2000, 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, 1998 1999, and before January
1, 2000 2001. 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 "1998 1999" shall be substituted for the
word "1992." For 2000 2001, the commissioner shall then
determine the percent change from the 12 months ending on August
31, 1998 1999, to the 12 months ending on August 31, 1999 2000,
and in each subsequent year, from the 12 months ending on August
31, 1998 1999, 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.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 14. Minnesota Statutes 1998, section 290.06,
subdivision 22, is amended to read:
Subd. 22. [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A
taxpayer who is liable for taxes on or measured by net income to
another state or province or territory of Canada, as provided in
paragraphs (b) through (f), upon income allocated or apportioned
to Minnesota, is entitled to a credit for the tax paid to
another state or province or territory of Canada if the tax is
actually paid in the taxable year or a subsequent taxable year.
A taxpayer who is a resident of this state pursuant to section
290.01, subdivision 7, clause (2), and who is subject to income
tax as a resident in the state of the individual's domicile is
not allowed this credit unless the state of domicile does not
allow a similar credit.
(b) For an individual, estate, or trust, the credit is
determined by multiplying the tax payable under this chapter by
the ratio derived by dividing the income subject to tax in the
other state or province or territory of Canada that is also
subject to tax in Minnesota while a resident of Minnesota by the
taxpayer's federal adjusted gross income, as defined in section
62 of the Internal Revenue Code, modified by the addition
required by section 290.01, subdivision 19a, clause (1), and the
subtraction allowed by section 290.01, subdivision 19b, clause
(1), to the extent the income is allocated or assigned to
Minnesota under sections 290.081 and 290.17.
(c) If the taxpayer is an athletic team that apportions all
of its income under section 290.17, subdivision 5, paragraph
(c), the credit is determined by multiplying the tax payable
under this chapter by the ratio derived from dividing the total
net income subject to tax in the other state or province or
territory of Canada by the taxpayer's Minnesota taxable income.
(d) The credit determined under paragraph (b) or (c) shall
not exceed the amount of tax so paid to the other state or
province or territory of Canada on the gross income earned
within the other state or province or territory of Canada
subject to tax under this chapter, nor shall the allowance of
the credit reduce the taxes paid under this chapter to an amount
less than what would be assessed if such income amount was
excluded from taxable net income.
(e) In the case of the tax assessed on a lump sum
distribution under section 290.032, the credit allowed under
paragraph (a) is the tax assessed by the other state or province
or territory of Canada on the lump sum distribution that is also
subject to tax under section 290.032, and shall not exceed the
tax assessed under section 290.032. To the extent the total
lump sum distribution defined in section 290.032, subdivision 1,
includes lump sum distributions received in prior years or is
all or in part an annuity contract, the reduction to the tax on
the lump sum distribution allowed under section 290.032,
subdivision 2, includes tax paid to another state that is
properly apportioned to that distribution.
(f) If a Minnesota resident reported an item of income to
Minnesota and is assessed tax in such other state or province or
territory of Canada on that same income after the Minnesota
statute of limitations has expired, the taxpayer shall receive a
credit for that year under paragraph (a), notwithstanding any
statute of limitations to the contrary. The claim for the
credit must be submitted within one year from the date the taxes
were paid to the other state or province or territory of
Canada. The taxpayer must submit sufficient proof to show
entitlement to a credit.
(g) For the purposes of this subdivision, a resident
shareholder of a corporation treated as an "S" corporation under
section 290.9725, must be considered to have paid a tax imposed
on the shareholder in an amount equal to the shareholder's pro
rata share of any net income tax paid by the S corporation to
another state. For the purposes of the preceding sentence, the
term "net income tax" means any tax imposed on or measured by a
corporation's net income.
(h) For the purposes of this subdivision, a resident
partner of an entity taxed as a partnership under the Internal
Revenue Code must be considered to have paid a tax imposed on
the partner in an amount equal to the partner's pro rata share
of any net income tax paid by the partnership to another state.
For purposes of the preceding sentence, the term "net income"
tax means any tax imposed on or measured by a partnership's net
income.
(i) For the purposes of this subdivision, "another state"
includes the District of Columbia, but does not include Puerto
Rico or the several territories organized by Congress.
(j) The limitations on the credit in paragraphs (b), (c),
and (d), are imposed on a state by state basis.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 15. Minnesota Statutes 1998, section 290.06, is
amended by adding a subdivision to read:
Subd. 22a. [NONRESIDENT'S CREDIT FOR TAXES PAID TO STATE
OF DOMICILE.] (a) Notwithstanding subdivision 22, a nonresident
who is subject to tax in this state on the gain on the sale of a
partnership interest, which is allocable to this state under
section 290.17, subdivision 2, paragraph (c), is allowed a
credit for the tax paid to the state of the individual's
domicile upon the gain in the taxable year or a subsequent
taxable year. This credit is only allowed if the state of
domicile does not allow a credit for the tax paid to Minnesota
on the gain.
(b) For purposes of this subdivision, the credit equals the
tax paid to the state of domicile multiplied by the ratio
derived by dividing the amount of gain on the sale of the
partnership interest subject to tax in the other state that is
also subject to tax in Minnesota by the taxpayer's federal
adjusted gross income, as defined in section 62 of the Internal
Revenue Code. The credit allowed may not reduce the taxes paid
under this chapter to an amount less than the tax that would
apply if the gain were excluded from taxable net income.
(c) If a nonresident taxpayer reported the gain to
Minnesota and is assessed tax in the state of domicile on that
same income after the Minnesota statute of limitations has
expired, the taxpayer is allowed a credit for that year,
notwithstanding any statute of limitations to the contrary. The
claim for the credit must be submitted within one year from the
date the taxes were paid to the state of domicile and the
taxpayer must submit sufficient proof to show entitlement to a
credit.
(d) For the purposes of this subdivision, "another state"
includes the District of Columbia, but does not include Puerto
Rico or the several territories organized by Congress.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 16. Minnesota Statutes 1998, section 290.06, is
amended by adding a subdivision to read:
Subd. 28. [CREDIT FOR TRANSIT PASSES.] A taxpayer may take
a credit against the tax due under this chapter equal to 30
percent of the expense incurred by the taxpayer to provide
transit passes, for use in Minnesota, to employees of the
taxpayer. As used in this subdivision, "transit pass" has the
meaning given in section 132(f)(5)(A) of the Internal Revenue
Code. If the taxpayer purchases the transit passes from the
transit system operator, and resells them to the employees, the
credit is based on the amount of the difference between the
price paid for the passes by the employer and the amount charged
to employees.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 17. Minnesota Statutes 1999 Supplement, section
290.0671, subdivision 1, is amended to read:
Subdivision 1. [CREDIT ALLOWED.] (a) An individual is
allowed a credit against the tax imposed by this chapter equal
to a percentage of 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 1.9125 percent of the first $4,460 of earned
income. The credit is reduced by 1.1475 1.9125 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 7.45 8.5 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 5.13 5.73 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 8.8 ten 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 9.38 10.3 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.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999, and is not contingent
on the enactment of sections 18 and 19.
Sec. 18. Minnesota Statutes 1998, section 290.0671,
subdivision 6, is amended to read:
Subd. 6. [APPROPRIATION.] An amount sufficient to pay the
refunds required by this section is appropriated to the
commissioner from the general fund. This amount includes any
amounts appropriated to the commissioner of human services from
the federal Temporary Assistance for Needy Families (TANF) block
grant funds for transfer to the commissioner of revenue.
Sec. 19. Minnesota Statutes 1998, section 290.0671, is
amended by adding a subdivision to read:
Subd. 6a. [TANF APPROPRIATION FOR WORKING FAMILY CREDIT
EXPANSION.] (a) On an annual basis the commissioner of revenue,
with the assistance of the commissioner of human services, shall
calculate the value of the refundable portion of the Minnesota
Working Family Credit provided under this section that qualifies
for payment with funds from the federal Temporary Assistance for
Needy Families (TANF) block grant. Of this total amount, the
commissioner of revenue shall estimate the portion entailed by
the expansion of the credit rates for individuals with
qualifying children over the rates provided in Laws 1999,
chapter 243, article 2, section 12.
(b) An amount sufficient to pay the refunds entailed by the
expansion of the credit rates for individuals with qualifying
children over the rates provided in Laws 1999, chapter 243,
article 2, section 12, as estimated in paragraph (a), is
appropriated to the commissioner of human services from the
federal Temporary Assistance for Needy Families (TANF) block
grant funds, for transfer to the commissioner of revenue for
deposit in the general fund.
Sec. 20. Minnesota Statutes 1998, section 290.0672,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the following terms have the meanings given.
(b) "Long-term care insurance" means a policy that:
(1) qualifies for a deduction under section 213 of the
Internal Revenue Code, disregarding the 7.5 percent income test;
or meets the requirements given in section 62A.46; or provides
similar coverage issued under the laws of another jurisdiction;
and
(2) does not have has a lifetime long-term care benefit
limit of not less than $100,000; and
(3) includes inflation protection that meets or exceeds has
been offered in compliance with the inflation protection
requirements of the long-term care insurance model regulation
cited under section 7702B(g)(2)(A)(i)(x) of the Internal Revenue
Code section 62S.23.
(c) "Qualified beneficiary" means the taxpayer or the
taxpayer's spouse.
(d) "Premiums deducted in determining federal taxable
income" means the lesser of (1) long-term care insurance
premiums that qualify as deductions under section 213 of the
Internal Revenue Code; and (2) the total amount deductible for
medical care under section 213 of the Internal Revenue Code.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 21. Minnesota Statutes 1998, section 290.0672,
subdivision 2, is amended to read:
Subd. 2. [CREDIT.] A taxpayer is allowed a credit against
the tax imposed by this chapter for long-term care insurance
policy premiums paid during the tax year. The credit for each
policy equals the lesser of (1) 25 percent of premiums paid to
the extent not deducted in determining federal taxable income;
or (2) $100. A taxpayer may claim a credit for only one policy
for each qualified beneficiary. Only one credit may be claimed
by any taxpayer for each policy. A maximum of $100 applies to
each qualified beneficiary. The maximum total credit allowed
per year is $200 for married couples filing joint returns and
$100 for all other filers. For a nonresident or part-year
resident, the credit determined under this section must be
allocated based on the percentage calculated under section
290.06, subdivision 2c, paragraph (e).
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 22. Minnesota Statutes 1999 Supplement, section
290.0675, subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section the following terms have the meanings given.
(b) "Earned income" means the sum of the following:
(1) earned income as defined in section 32(c)(2) of the
Internal Revenue Code;
(2) to the extent included in the Minnesota taxable income,
income received from a retirement pension, profit-sharing, stock
bonus, or annuity plan; and
(3) to the extent included in Minnesota taxable income,
social security benefits as defined in section 86(d)(1) 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.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 23. Minnesota Statutes 1999 Supplement, section
290.0675, subdivision 2, is amended to read:
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 $25,680, and the minimum
earned income in order for the couple to be eligible for the
credit is $14,000 $14,250 for each spouse.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 24. Minnesota Statutes 1999 Supplement, section
290.0675, subdivision 3, is amended to read:
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
Credit For Credit For
Earned Income of Taxable Income Taxable Income
Lesser Earning Spouse $25,680-$102,029 $102,030-over
$14,250 - $15,249 $7 $0
$15,250 - $16,249 $24 $0
$16,250 - $17,249 $41 $0
$17,250 - $18,249 $58 $0
$18,250 - $19,249 $75 $0
$19,250 - $20,249 $92 $0
$20,250 - $21,249 $109 $0
$21,250 - $22,249 $126 $0
$22,250 - $23,249 $143 $0
$23,250 - $24,249 $160 $0
$24,250 - $25,249 $161 $0
$25,250 - $26,249 $161 $0
$26,250 - $27,249 $161 $0
$27,250 - $28,249 $161 $0
$28,250 - $29,249 $161 $0
$29,250 - $30,249 $161 $0
$30,250 - $31,249 $161 $0
$31,250 - $32,249 $161 $6
$32,250 - $33,249 $161 $14
$33,250 - $34,249 $161 $22
$34,250 - $35,249 $161 $30
$35,250 - $36,249 $161 $38
$36,250 - $37,249 $161 $46
$37,250 - $38,249 $161 $54
$38,250 - $39,249 $161 $62
$39,250 - $40,249 $161 $70
$40,250 - $41,249 $161 $78
$41,250 - $42,249 $161 $86
$42,250 - $43,249 $161 $94
$43,250 - $44,249 $161 $102
$44,250 - $45,249 $161 $110
$45,250 - $46,249 $161 $118
$46,250 - $47,249 $161 $126
$47,250 - $48,249 $161 $134
$48,250 - $49,249 $161 $142
$49,250 - $50,249 $161 $150
$50,250 - $51,249 $161 $158
$51,250 - $52,249 $161 $166
$52,250 - $53,249 $161 $174
$53,250 - $54,249 $161 $182
$54,250 - $55,249 $161 $190
$55,250 - $56,249 $161 $198
$56,250 - $57,249 $161 $206
$57,250 - $58,249 $161 $214
$58,250 - $59,249 $161 $222
$59,250 - $60,249 $161 $230
$60,250 - $61,249 $161 $238
$61,250 - $62,249 $161 $246
$62,250 - $63,249 $161 $254
$63,250 - $64,249 $161 $262
$64,250 and over $161 $268
For taxable years beginning after December 31, 2000, the
commissioner shall update the table as necessary to provide a
credit that reflects the relationship between the marginal tax
rates imposed under section 290.06, subdivision 2c.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 25. Minnesota Statutes 1999 Supplement, 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 6.5 6.4 percent of alternative
minimum taxable income after subtracting the exemption amount,
over
(b) the regular tax for the taxable year.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 26. Minnesota Statutes 1999 Supplement, section
290.091, subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by
this section, the following terms have the meanings given:
(a) "Alternative minimum taxable income" means the sum of
the following for the taxable year:
(1) the taxpayer's federal alternative minimum taxable
income as defined in section 55(b)(2) of the Internal Revenue
Code;
(2) the taxpayer's itemized deductions allowed in computing
federal alternative minimum taxable income, but excluding:
(i) the Minnesota charitable contribution deduction;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction;
(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;
(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); and
(5) to the extent not included in federal alternative
minimum taxable income, the amount of interest income as
provided by section 290.01, subdivision 19a, clause (1);
less the sum of the amounts determined under the following:
(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 (4) and (6).
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 6.5 6.4 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).
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 27. Minnesota Statutes 1999 Supplement, section
290.091, subdivision 6, is amended to read:
Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit
is allowed against the tax imposed by this chapter on
individuals, trusts, and estates equal to the minimum tax credit
for the taxable year. The minimum tax credit equals the
adjusted net minimum tax for taxable years beginning after
December 31, 1988, reduced by the minimum tax credits allowed in
a prior taxable year. The credit may not exceed the excess (if
any) for the taxable year of
(1) the regular tax, over
(2) the greater of (i) the tentative alternative minimum
tax, or (ii) zero.
(b) The adjusted net minimum tax for a taxable year equals
the lesser of the net minimum tax or the excess (if any) of
(1) the tentative minimum tax, over
(2) 6.5 6.4 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) interest on specified private activity bonds, as
defined in section 57(a)(5) of the Internal Revenue Code, to the
extent not included under clause (ii),
(iv) depletion as defined in section 57(a)(1), determined
without regard to the last sentence of paragraph (1), of the
Internal Revenue Code, less
(v) 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)
of the second series of clauses, and
(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).
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 1999.
Sec. 28. Minnesota Statutes 1998, section 290.17,
subdivision 2, is amended to read:
Subd. 2. [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR
BUSINESS.] The income of a taxpayer subject to the allocation
rules that is not derived from the conduct of a trade or
business must be assigned in accordance with paragraphs (a) to
(f):
(a)(1) Subject to paragraphs (a)(2) and, (a)(3), and
(a)(4), income from labor or personal or professional services
wages as defined in section 3401(a) and (f) of the Internal
Revenue Code is assigned to this state if, and to the extent
that, the labor or services are work of the employee is
performed within it; all other income from such sources is
treated as income from sources without this state.
Severance pay shall be considered income from labor or
personal or professional services.
(2) In the case of an individual who is a nonresident of
Minnesota and who is an athlete or entertainer, income from
compensation for labor or personal services performed within
this state shall be determined in the following manner:
(i) The amount of income to be assigned to Minnesota for an
individual who is a nonresident salaried athletic team employee
shall be determined by using a fraction in which the denominator
contains the total number of days in which the individual is
under a duty to perform for the employer, and the numerator is
the total number of those days spent in Minnesota. For purposes
of this paragraph, off-season training activities, unless
conducted at the team's facilities as part of a team imposed
program, are not included in the total number of duty days.
Bonuses earned as a result of play during the regular season or
for participation in championship, play-off, or all-star games
must be allocated under the formula. Signing bonuses are not
subject to allocation under the formula if they are not
conditional on playing any games for the team, are payable
separately from any other compensation, and are nonrefundable;
and
(ii) The amount of income to be assigned to Minnesota for
an individual who is a nonresident, and who is an athlete or
entertainer not listed in clause (i), for that person's athletic
or entertainment performance in Minnesota shall be determined by
assigning to this state all income from performances or athletic
contests in this state.
(3) For purposes of this section, amounts received by a
nonresident as "retirement income" as defined in section (b)(1)
of the State Income Taxation of Pension Income Act, Public Law
Number 104-95, are not considered income derived from carrying
on a trade or business or from performing personal or
professional services wages or other compensation for work an
employee performed in Minnesota, and are not taxable under this
chapter.
(4) Wages, otherwise assigned to this state under clause
(1) and not qualifying under clause (3), are not taxable under
this chapter if the following conditions are met:
(i) The recipient was not a resident of this state for any
part of the taxable year in which the wages were received; and
(ii) The wages are for work performed while the recipient
was a resident of this state.
(b) Income or gains from tangible property located in this
state that is not employed in the business of the recipient of
the income or gains must be assigned to this state.
(c) Income or gains from intangible personal property not
employed in the business of the recipient of the income or gains
must be assigned to this state if the recipient of the income or
gains is a resident of this state or is a resident trust or
estate.
Gain on the sale of a partnership interest is allocable to
this state in the ratio of the original cost of partnership
tangible property in this state to the original cost of
partnership tangible property everywhere, determined at the time
of the sale. If more than 50 percent of the value of the
partnership's assets consists of intangibles, gain or loss from
the sale of the partnership interest is allocated to this state
in accordance with the sales factor of the partnership for its
first full tax period immediately preceding the tax period of
the partnership during which the partnership interest was sold.
Gain on the sale of goodwill or income from a covenant not
to compete that is connected with a business operating all or
partially in Minnesota is allocated to this state to the extent
that the income from the business in the year preceding the year
of sale was assignable to Minnesota under subdivision 3.
When an employer pays an employee for a covenant not to
compete, the income allocated to this state is in the ratio of
the employee's service in Minnesota in the calendar year
preceding leaving the employment of the employer over the total
services performed by the employee for the employer in that year.
(d) Income from winnings on Minnesota pari-mutuel betting
tickets, the Minnesota state lottery, and lawful gambling as
defined in section 349.12, subdivision 24, conducted within the
boundaries of the state of Minnesota shall be assigned to this
state.
(e) All items of gross income not covered in paragraphs (a)
to (d) and not part of the taxpayer's income from a trade or
business shall be assigned to the taxpayer's domicile.
(f) For the purposes of this section, working as an
employee shall not be considered to be conducting a trade or
business.
EFFECTIVE DATE: This section is effective for wages
received after the day following final enactment, except that to
the extent this section impacts an employer's requirement to
withhold Minnesota tax under section 290.92, subdivision 41, the
requirement to withhold is effective for wages paid after
December 31, 2000.
Sec. 29. Minnesota Statutes 1998, section 290.92,
subdivision 3, is amended to read:
Subd. 3. [WITHHOLDING, IRREGULAR PERIOD.] If payment of
wages is made to an employee by an employer
(a) With respect to a payroll period or other period, any
part of which is included in a payroll period or other period
with respect to which wages are also paid to such employees by
such employer, or
(b) Without regard to any payroll period or other period,
but on or prior to the expiration of a payroll period or other
period with respect to which wages are also paid to such
employee by such employer, or
(c) With respect to a period beginning in one and ending in
another calendar year, or
(d) Through an agent, fiduciary, or other person who also
has the control, receipt, custody, or disposal of or pays, the
wages payable by another employer to such employee.
The manner of withholding and the amount to be deducted and
withheld under subdivision 2a shall be determined in accordance
with rules prescribed by the commissioner under which the
withholding exemption allowed to the employee in any calendar
year shall approximate the withholding exemption allowable with
respect to an annual payroll period, except that if supplemental
wages are not paid concurrent with a payroll period the employer
shall withhold tax on the supplemental payment at the rate of
6.25 percent as if no exemption had been claimed.
EFFECTIVE DATE: This section is effective for wages paid
after December 31, 2000.
Sec. 30. Minnesota Statutes 1998, section 290.92,
subdivision 19, is amended to read:
Subd. 19. [EMPLOYEES INCURRING NO INCOME TAX LIABILITY.]
(a) Notwithstanding any other provision of this section, except
the provisions of subdivision 5a, an employer shall is not be
required to deduct and withhold any tax under this chapter upon
a payment of from wages paid to an employee if there is in
effect with respect to such payment:
(1) the employee furnished the employer with a withholding
exemption certificate, in such form and containing such other
information as the commissioner may prescribe, furnished to the
employer by the employee certifying that:
(i) certifies the employee (a) incurred no liability for
income tax imposed under this chapter for the employee's
preceding taxable year, and;
(b) (ii) certifies the employee anticipates incurring no
liability for income tax imposed under this chapter for the
current taxable year; and
(iii) is in a form and contains any other information
prescribed by the commissioner; or
(2)(i) the employee is not a resident of Minnesota when the
wages were paid; and
(ii) the employer reasonably expects that the employer will
not pay the employee enough wages assignable to Minnesota under
section 290.17, subdivision 2, clause (a)(1), to meet the
nonresident requirement to file a Minnesota individual income
tax return for the taxable year under section 289A.08,
subdivision 1, paragraph (a).
(b) The commissioner shall by rule provide for the
coordination of the provisions of this subdivision with the
provisions of subdivision 7.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 31. Minnesota Statutes 1998, section 290.92,
subdivision 28, is amended to read:
Subd. 28. [PAYMENTS TO HORSERACING LICENSE HOLDERS.]
Effective with payments made after April 1, 1988, any holder of
a license issued by the Minnesota racing commission who makes a
payment for personal or professional services to a holder of a
class C license issued by the commission, except an amount paid
as a purse, shall deduct from the payment and withhold seven
6.25 percent of the amount as Minnesota withholding tax when the
amount paid to that individual by the same person during the
calendar year exceeds $600. For purposes of the provisions of
this section, a payment to any person which is subject to
withholding under this subdivision must be treated as if the
payment was a wage paid by an employer to an employee. Every
individual who is to receive a payment which is subject to
withholding under this subdivision shall furnish the license
holder with a statement, made under the penalties of perjury,
containing the name, address, and social security account number
of the person receiving the payment. No withholding is required
if the individual presents a signed certificate from the
individual's employer which states that the individual is an
employee of that employer. A nonresident individual who holds a
class C license must be treated as an athlete for purposes of
applying the provisions of sections 290.17, subdivision
2(1)(b)(ii) and 290.92, subdivision 4a.
EFFECTIVE DATE: This section applies to payments made
after the date of final enactment.
Sec. 32. Minnesota Statutes 1998, section 290.92,
subdivision 29, is amended to read:
Subd. 29. [LOTTERY PRIZES.] Eight 7.25 percent of the
payment of Minnesota state lottery winnings which are subject to
withholding must be withheld as Minnesota withholding tax. For
purposes of this subdivision, the term "winnings which are
subject to withholding" has the meaning given in section
3402(q)(3) of the Internal Revenue Code. For purposes of the
provisions of this section, a payment to any person of winnings
which are subject to withholding must be treated as if the
payment was a wage paid by an employer to an employee. Every
individual who is to receive a payment of winnings which are
subject to withholding shall furnish the state lottery with a
statement, made under the penalties of perjury, containing the
name, address, and social security account number of the person
receiving the payment. The Minnesota state lottery is liable
for the payment of the tax required to be withheld under this
subdivision but is not liable to any person for the amount of
the payment.
EFFECTIVE DATE: This section applies to winnings paid
after the date of final enactment.
Sec. 33. Minnesota Statutes 1998, section 469.1734,
subdivision 4, is amended to read:
Subd. 4. [INCOME TAX.] (a) Upon application by the
qualifying business to the city, and approval of the city, a
qualifying business shall receive a credit against taxes imposed
under chapter 290, other than the tax imposed under section
290.92, based on the taxable net income of the qualified
business attributable to the border city, but outside the border
city development zone, multiplied by 9.8 percent in the case of
a taxpayer under section 290.02, and 8.5 7.85 percent in the
case of a taxpayer taxable under section 290.06, subdivision
2c. The attributable net income of a qualified business in the
border city is determined by multiplying the taxable net income
of the business entity, determined as if the business were a C
corporation, by a fraction:
(1) the numerator of which is:
(i) the ratio of the taxpayer's property factor under
section 290.191 located in the border city, but outside of the
border city development zone, for the taxable year over the
property factor numerator determined under section 290.191, plus
(ii) the ratio of the taxpayer's payroll factor under
section 290.191 located in the border city, but outside of the
border city development zone, for the taxable year over the
payroll factor numerator determined under section 290.191; and
(2) the denominator of which is two.
(b) The credit under this subdivision applies after any
credit allowed under subdivision 5.
(c) After any notice period required by subdivision 7, the
city council must determine whether granting the credit is in
the best interest of the city, and if it so determines, must
approve the granting of the credit and determine its amount.
(d) The credit under this subdivision may not exceed the
amount of the tax credit certificates received by the taxpayer
from the city, less any tax credit certificates used under
section 469.1732, subdivision 2, and subdivisions 5 and 6.
(e) No taxpayer may receive the credit under this
subdivision for more than five taxable years.
EFFECTIVE DATE: This section is effective for taxable
years beginning after December 31, 2000.
Sec. 34. [TAX INFORMATION SAMPLE DATA STUDY.]
(a) One of the goals of a reengineered income tax system is
to reduce the administrative burden for both taxpayers and tax
administrators. In order to reduce the cost of handling paper
returns and to explore electronic options for taxpayer filing of
tax data, the department of revenue will explore eliminating the
requirement of Minnesota Statutes, section 289A.08, subdivision
11, that the federal return be attached in filing a Minnesota
individual income tax return. This federal return information
is used for the purposes of ensuring the accurate calculation of
individuals' Minnesota income tax liabilities and for the
purposes of preparing the microdata samples under Minnesota
Statutes, section 270.0681.
(b) To ensure the continued reliability of income tax data
samples and to evaluate ways in which the quality of samples may
be improved, the commissioner shall study and evaluate
alternatives to requiring taxpayers to attach a copy of their
federal return when filing Minnesota state income tax. The
study must be prepared in consultation with the coordinating
committee established in Minnesota Statutes, section 270.0681,
subdivision 2. The study must:
(1) evaluate the quality of federal electronic data
compared to sample data prepared from returns filed with the
department;
(2) evaluate alternative sampling methodology, including
preselection of sampled returns, panel data, and other sampling
methods; and
(3) evaluate and test whether alternative methods can
(i) provide a data sample that is as accurate and reliable
as one prepared from federal returns that are filed with or
attached to Minnesota individual income tax returns; and
(ii) result in a data sample that will continue to be
available to staff of both the department of finance and the
legislature on the same basis as one prepared from returns
required to be attached to or filed with the Minnesota tax
returns.
(c) The commissioner of revenue shall report the findings
of the study to the house tax committee chair, the senate tax
committee chair, and the commissioner of finance.
(d) The commissioner of revenue shall, with the approval of
the commissioner of finance, prepare a bill for introduction in
the 2001 legislative session that eliminates, for some or all
taxpayers, the requirement that a copy of the federal return be
filed with the individual income tax return, if the commissioner
determines as a result of the study that:
(1) an alternative method would provide a data sample that
is as accurate and reliable as one prepared from federal returns
required to be filed with the Minnesota return; and
(2) the sample will continue to be available to the staff
of both the department of finance and the legislature on the
same basis as one prepared from returns required to be filed
with Minnesota tax returns.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 35. [COMMISSIONER OF REVENUE; TEMPORARY POWERS.]
Subdivision 1. [APPLICABILITY.] This section gives the
commissioner of revenue certain temporary powers. These powers
apply only to taxes imposed under Minnesota Statutes, sections
290.032, 290.06, and 290.091 administered by the commissioner
under Minnesota Statutes, chapters 289A and 290.
Subd. 2. [PAYMENT OF TAXES.] The commissioner may
establish additional due dates, applicable to certain groups of
taxpayers, for the payment of taxes. Unless the commissioner
has the written consent of the taxpayer, the additional payment
dates must not require the taxpayer to pay the tax earlier than
the payment dates provided by statute or rule. The commissioner
may accept various forms of payment, including, but not limited
to, financial transaction cards and electronic funds transfer.
Subd. 3. [FILING OF RETURN.] The commissioner may
establish additional due dates, applicable to certain groups of
taxpayers, for the filing of tax returns. Unless the
commissioner has the written consent of the taxpayer, the return
due date must not be earlier than the due date provided by
statute or rule. In conducting pilot studies, the commissioner
may use tax return forms with varying formats, accept electronic
filed returns, and waive the taxpayer signature requirements.
Subd. 4. [AGREEMENTS.] The commissioner may enter written
agreements with taxpayers that provide for the payment of taxes
or the filing of returns at dates earlier than provided by
statute or rule. The commissioner and the taxpayer may also
agree in writing to other changes from the statutory or rule
requirements related to the administration of these taxes. If
the taxpayer agrees to pay taxes at a date earlier than that
provided by statute, the commissioner may negotiate payments to
the taxpayer to compensate in part or in full for the loss
incurred as a result of the accelerated payment.
Subd. 5. [PROCEDURE; APPROVAL.] Pilot studies proposed
under these authorities must be presented to the chairs of the
house of representatives tax committee and the senate committee
on taxes and to the chairs of the committees on state government
finance of the house of representatives and the senate. No
study may be undertaken without the approval of both tax
committee chairs. If either chair fails to respond within 15
days after the proposal is presented, that chair is considered
to have approved the study. If the study is approved, the
commissioner shall initially seek participation on a voluntary
basis from within the targeted taxpayer group.
Subd. 6. [EXPIRATION DATE.] This section expires June 30,
2002, and all pilot projects under this section must be
completed by June 30, 2002.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 36. [STUDY OF TAXPAYER ASSISTANCE SERVICES.]
The commissioner of revenue shall study the availability of
taxpayer assistance services throughout the state and provide a
written report to the legislature, in compliance with Minnesota
Statutes, sections 3.195 and 3.197, by January 15, 2001.
"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. The
study must evaluate:
(1) ways of establishing a measure to evaluate the
effectiveness of volunteers in achieving the department's
mission of achieving compliance with the tax laws;
(2) the geographic distribution and number of volunteer tax
preparation sites throughout the state, in comparison to the
distribution of low-income, elderly, and nonnative English
speakers;
(3) the income, language skills, and age-related screening
criteria used at volunteer tax preparations sites in determining
Minnesota residents' eligibility for taxpayer assistance
services;
(4) the level of training, support, and coordination that
the department provides to volunteers and the optimal level of
training for volunteers to have an adequate understanding of
Minnesota's tax forms;
(5) the effectiveness of grants awarded under Laws 1999,
chapter 243, article 2, section 31; and
(6) the availability of volunteers to assist taxpayers in
preparing Minnesota property tax refund claims after April 15.
The commissioner must invite testimony from organizations
and government entities concerned with taxpayer assistance, both
paid and volunteer. Organizations receiving grants under Laws
1999, chapter 243, article 2, section 31, must provide
information necessary to the completion of the study to the
commissioner on request.
The study must consider the role of current economic
conditions, including the state unemployment rate, in training
and retaining qualified volunteers, the adequacy of current
taxpayer assistance services, the role of the department of
revenue in assisting low-income, elderly, and nonnative English
speakers, and must recommend ways for improving the availability
and the quality of taxpayer assistance services.
Sec. 37. [REPORT ON ELECTRONIC CHECKOFF.]
The commissioner of revenue must report by February 1,
2001, to the committees on taxes of the house of representatives
and the senate on implementing an electronic income tax checkoff
program. The program must be designed to allow an individual
who files an income tax return electronically to designate that
a portion of the individual's tax liability reported on the
return be deposited in one or more accounts established by law
and dedicated to particular programs or purposes.
EFFECTIVE DATE: This section is effective the day
following final enactment.
ARTICLE 5
PROPERTY TAXES
Section 1. Minnesota Statutes 1998, section 270.072,
subdivision 2, is amended to read:
Subd. 2. [ASSESSMENT OF FLIGHT PROPERTY.] The flight
property of all airline companies operating in Minnesota shall
be assessed and appraised annually by the commissioner with
reference to its value on January 2 of the assessment year in
the manner prescribed by sections 270.071 to 270.079. Aircraft
with a gross weight of less than 30,000 pounds and used on
intermittent or irregularly timed flights shall be excluded from
the provisions of sections 270.071 to 270.079.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter.
Sec. 2. Minnesota Statutes 1998, section 270.072, is
amended by adding a subdivision to read:
Subd. 6. [AIRFLIGHT PROPERTY TAX LIEN.] The tax imposed
under sections 270.071 to 270.079 is a lien on all real and
personal property within this state of the airline company in
whose name the property is assessed. For purposes of sections
270.65 and 270.69, the date of assessment for the tax imposed
under sections 270.071 to 270.079 is January 2 of each year for
the taxes payable in the following year.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter.
Sec. 3. Minnesota Statutes 1999 Supplement, section
272.02, subdivision 39, is amended to read:
Subd. 39. [ECONOMIC DEVELOPMENT; PUBLIC PURPOSE.] The
holding of property by a political subdivision of the state for
later resale for economic development purposes shall be
considered a public purpose in accordance with subdivision 8 for
a period not to exceed eight years, except that for property
located in a city of 5,000 population or under that is located
outside of the metropolitan area as defined in section 473.121,
subdivision 2, the period must not exceed 15 years.
The holding of property by a political subdivision of the
state for later resale (1) which is purchased or held for
housing purposes, or (2) which meets the conditions described in
section 469.174, subdivision 10, shall be considered a public
purpose in accordance with subdivision 8.
The governing body of the political subdivision which
acquires property which is subject to this subdivision shall
after the purchase of the property certify to the city or county
assessor whether the property is held for economic development
purposes or housing purposes, or whether it meets the conditions
of section 469.174, subdivision 10. If the property is acquired
for economic development purposes and buildings or other
improvements are constructed after acquisition of the property,
and if more than one-half of the floor space of the buildings or
improvements which is available for lease to or use by a private
individual, corporation, or other entity is leased to or
otherwise used by a private individual, corporation, or other
entity the provisions of this subdivision shall not apply to the
property. This subdivision shall not create an exemption from
section 272.01, subdivision 2; 272.68; 273.19; or 469.040,
subdivision 3; or other provision of law providing for the
taxation of or for payments in lieu of taxes for publicly held
property which is leased, loaned, or otherwise made available
and used by a private person.
EFFECTIVE DATE: This section is effective for taxes levied
in 2000, payable in 2001, and thereafter.
Sec. 4. Minnesota Statutes 1999 Supplement, section
272.02, is amended by adding a subdivision to read:
Subd. 44. [ELECTRIC GENERATION FACILITY PERSONAL
PROPERTY.] Notwithstanding subdivision 9, clause (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 subdivision is exempt. At the time of
construction, the facility must:
(1) utilize natural gas as a primary fuel;
(2) be located within 20 miles of parallel existing 16-inch
and 12-inch (outside diameter) natural gas pipelines and a
345-kilovolt high-voltage electric transmission line; and
(3) be designed to provide peaking, emergency backup, or
contingency services, and have received a certificate of need
under section 216B.243 demonstrating demand for its capacity.
Construction of the facility must be commenced after
January 1, 2000, and before January 1, 2004. 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.
EFFECTIVE DATE: This section is effective for assessment
year 2001 and thereafter.
Sec. 5. Minnesota Statutes 1998, section 272.115,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENT.] Except as otherwise provided
in subdivision 5, whenever any real estate is sold for a
consideration in excess of $1,000, whether by warranty deed,
quitclaim deed, contract for deed or any other method of sale,
the grantor, grantee or the legal agent of either shall file a
certificate of value with the county auditor in the county in
which the property is located when the deed or other document is
presented for recording. Contract for deeds are subject to
recording under section 507.235, subdivision 1. Value shall, in
the case of any deed not a gift, be the amount of the full
actual consideration thereof, paid or to be paid, including the
amount of any lien or liens assumed. The items and value of
personal property transferred with the real property must be
listed and deducted from the sale price. The certificate of
value shall include the classification to which the property
belongs for the purpose of determining the fair market value of
the property. The certificate shall include financing terms and
conditions of the sale which are necessary to determine the
actual, present value of the sale price for purposes of the
sales ratio study. The commissioner of revenue shall promulgate
administrative rules specifying the financing terms and
conditions which must be included on the certificate. Pursuant
to the authority of the commissioner of revenue in section
270.066, the certificate of value must include the social
security number or the federal employer identification number of
the grantors and grantees. The identification numbers of the
grantors and grantees are private data on individuals or
nonpublic data as defined in section 13.02, subdivisions 9 and
12, but, notwithstanding that section, the private or nonpublic
data may be disclosed to the commissioner of revenue for
purposes of tax administration. The information required to be
shown on the certificate of value is limited to the information
required as of the date of the acknowledgment on the deed or
other document to be recorded.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 1998, section 273.111,
subdivision 3, is amended to read:
Subd. 3. [REQUIREMENTS.] (a) Real estate consisting of ten
acres or more or a nursery or greenhouse, and qualifying for
classification as class 1b, 2a, or 2b under section 273.13,
subdivision 23, paragraph (d), shall be entitled to valuation
and tax deferment under this section only if it is primarily
devoted to agricultural use, and meets the qualifications in
subdivision 6, and either:
(1) is the homestead of the owner, or of a surviving
spouse, child, or sibling of the owner or is real estate which
is farmed with the real estate which contains the homestead
property; or
(2) has been in possession of the applicant, the
applicant's spouse, parent, or sibling, or any combination
thereof, for a period of at least seven years prior to
application for benefits under the provisions of this section,
or is real estate which is farmed with the real estate which
qualifies under this clause and is within two four townships or
cities or combination thereof from the qualifying real estate;
or
(3) is the homestead of a shareholder in a family farm
corporation as defined in section 500.24, notwithstanding the
fact that legal title to the real estate may be held in the name
of the family farm corporation; or
(4) is in the possession of a nursery or greenhouse or an
entity owned by a proprietor, partnership, or corporation which
also owns the nursery or greenhouse operations on the parcel or
parcels.
(b) Valuation of real estate under this section is limited
to parcels the ownership of which is in noncorporate entities
except for:
(1) family farm corporations organized pursuant to section
500.24; and
(2) corporations that derive 80 percent or more of their
gross receipts from the wholesale or retail sale of
horticultural or nursery stock.
Corporate entities who previously qualified for tax
deferment pursuant to this section and who continue to otherwise
qualify under subdivisions 3 and 6 for a period of at least
three years following the effective date of Laws 1983, chapter
222, section 8, will not be required to make payment of the
previously deferred taxes, notwithstanding the provisions of
subdivision 9. Special assessments are payable at the end of
the three-year period or at time of sale, whichever comes first.
(c) Land that previously qualified for tax deferment under
this section and no longer qualifies because it is not primarily
used for agricultural purposes but would otherwise qualify under
subdivisions 3 and 6 for a period of at least three years will
not be required to make payment of the previously deferred
taxes, notwithstanding the provisions of subdivision 9. Sale of
the land prior to the expiration of the three-year period
requires payment of deferred taxes as follows: sale in the year
the land no longer qualifies requires payment of the current
year's deferred taxes plus payment of deferred taxes for the two
prior years; sale during the second year the land no longer
qualifies requires payment of the current year's deferred taxes
plus payment of the deferred taxes for the prior year; and sale
during the third year the land no longer qualifies requires
payment of the current year's deferred taxes. Deferred taxes
shall be paid even if the land qualifies pursuant to subdivision
11a. When such property is sold or no longer qualifies under
this paragraph, or at the end of the three-year period,
whichever comes first, all deferred special assessments plus
interest are payable in equal installments spread over the time
remaining until the last maturity date of the bonds issued to
finance the improvement for which the assessments were levied.
If the bonds have matured, the deferred special assessments plus
interest are payable within 90 days. The provisions of section
429.061, subdivision 2, apply to the collection of these
installments. Penalties are not imposed on any such special
assessments if timely paid.
EFFECTIVE DATE: This section is effective for taxes
payable in 2000 and thereafter.
Sec. 7. Minnesota Statutes 1999 Supplement, section
273.124, subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE.] (a) Residential real estate
that is occupied and used for the purposes of a homestead by its
owner, who must be a Minnesota resident, is a residential
homestead.
Agricultural land, as defined in section 273.13,
subdivision 23, that is occupied and used as a homestead by its
owner, who must be a Minnesota resident, is an agricultural
homestead.
Dates for establishment of a homestead and homestead
treatment provided to particular types of property are as
provided in this section.
Property of held by a trustee, beneficiary, or grantor of
under a trust is not disqualified from receiving eligible for
homestead benefits classification 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, 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, grandson, granddaughter, father, or mother
of the owner of the agricultural property or a son, or daughter,
grandson, or granddaughter 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.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter.
Sec. 8. Minnesota Statutes 1999 Supplement, section
273.124, subdivision 8, is amended to read:
Subd. 8. [HOMESTEAD OWNED BY OR LEASED TO FAMILY FARM
CORPORATION, JOINT FARM VENTURE, LIMITED LIABILITY COMPANY, OR
PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION OR
PARTNERSHIP.] (a) Each family farm corporation, each joint farm
venture, each limited liability company, 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, member, or partner
thereof who is residing on the land except as provided in
subdivision 14, paragraph (g), and actively engaged in farming
of the land owned by the corporation, joint farm venture,
limited liability company, or partnership. Homestead treatment
applies even if legal title to the property is in the name of
the corporation, joint farm venture, limited liability company,
or partnership and not in the name of the person residing on it.
"Family farm corporation," and "family farm," and "farm
partnership" have the meanings given in section 500.24, except
that the number of allowable shareholders or partners under this
subdivision shall not exceed 12. "Limited liability company"
has the meaning contained in section 322B.03, subdivision 28.
"Joint farm venture" means a cooperative agreement among two or
more farm enterprises authorized to operate farm land under
section 500.24.
(b) In addition to property specified in paragraph (a), any
other residences owned by corporations, joint farm ventures,
limited liability companies, or partnerships described in
paragraph (a) which are located on agricultural land and
occupied as homesteads by shareholders, members, or partners who
are actively engaged in farming on behalf of the corporation,
joint farm venture, limited liability company, or partnership
must also be assessed as class 2a property or as class 1b
property under section 273.13, subdivision 22, paragraph (b).
(c) Agricultural property owned by a shareholder of a
family farm corporation or joint farm venture, as defined in
paragraph (a), or by a member of a limited liability company, or
by a partner in a partnership operating a family farm and leased
to the family farm corporation by the shareholder, or to a
member of a limited liability company, 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 except as provided in
subdivision 14, paragraph (g), and is actually engaged in
farming the land on behalf of the corporation, joint farm
venture, limited liability company, or partnership. This
paragraph applies without regard to any legal possession rights
of the family farm corporation, joint farm venture, limited
liability company, or partnership operating a family farm under
the lease.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter except that the references to a
limited liability company or a member of a limited liability
company are effective only if H.F. No. 3312 is enacted during
the 2000 session.
Sec. 9. Minnesota Statutes 1999 Supplement, section
273.124, subdivision 14, is amended to read:
Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.]
(a) Real estate of less than ten acres that is the homestead of
its owner must be classified as class 2a under section 273.13,
subdivision 23, paragraph (a), if:
(1) the parcel on which the house is located is contiguous
on at least two sides to (i) agricultural land, (ii) land owned
or administered by the United States Fish and Wildlife Service,
or (iii) land administered by the department of natural
resources on which in lieu taxes are paid under sections 477A.11
to 477A.14;
(2) its owner also owns a noncontiguous parcel of
agricultural land that is at least 20 acres;
(3) the noncontiguous land is located not farther than 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)(i) Agricultural property consisting of at least 40
acres shall be classified as the owner's homestead, to the same
extent as other agricultural homestead property, if all of the
following criteria are met:
(1) the owner, or the owner's son or daughter, is actively
farming the agricultural property;
(2) the owner of the agricultural property is a Minnesota
resident, and if the owner's son or daughter is actively farming
the agricultural property under clause (1), that person must
also be a Minnesota resident;
(3) neither the owner nor the spouse of the agricultural
property owner 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, and if the owner's son or daughter is
actively farming the agricultural property under clause (1),
that person must also live within the four townships or cities,
or combination of four townships or cities from the agricultural
property.
The relationship under this paragraph may be either by
blood or marriage.
(ii) Property containing the residence of an owner who owns
qualified property under clause (i) shall be classified as part
of the owner's agricultural homestead, if that property is also
used for noncommercial storage or drying of agricultural crops.
(c) Except as provided in paragraph (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.
(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.
(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.
(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.
(g) Agricultural property consisting of at least 40 acres
of a family farm corporation, joint farm venture, limited
liability company, or partnership as described under subdivision
8 shall be classified homestead, to the same extent as other
agricultural homestead property, if all of the following
criteria are met:
(1) the shareholder, member, or partner is actively farming
the agricultural property;
(2) the shareholder, member, or partner of the agricultural
property is a Minnesota resident;
(3) neither the shareholder, member, or partner, nor the
spouse of the shareholder, member, or partner claims another
agricultural homestead in Minnesota; and
(4) the shareholder, member, or partner does not live
farther than four townships or cities, or a combination of four
townships or cities, from the agricultural property.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter except that the references to a
limited liability company or a member of a limited liability
company are effective only if H.F. No. 3312 is enacted during
the 2000 session.
Sec. 10. Minnesota Statutes 1998, section 273.124, is
amended by adding a subdivision to read:
Subd. 21. [TRUST PROPERTY; HOMESTEAD.] Real property held
by a trustee under a trust is eligible for classification as
homestead property if:
(1) the grantor or surviving spouse of the grantor of the
trust occupies and uses the property as a homestead;
(2) a relative or surviving relative of the grantor who
meets the requirements of subdivision 1, paragraph (c), in the
case of residential real estate; or subdivision 1, paragraph
(d), in the case of agricultural property, occupies and uses the
property as a homestead;
(3) a family farm corporation, joint farm venture, limited
liability company, or partnership operating a family farm rents
the property held by a trustee under a trust, and a shareholder,
member, or partner of the corporation, joint farm venture,
limited liability company, or partnership occupies and uses the
property as a homestead, and is actively farming the property on
behalf of the corporation, joint farm venture, limited liability
company, or partnership; or
(4) a person who has received homestead classification for
property taxes payable in 2000 on the basis of an unqualified
legal right under the terms of the trust agreement to occupy the
property as that person's homestead and who continues to use the
property as a homestead.
For purposes of this subdivision, "grantor" is defined as
the person creating or establishing a testamentary, inter Vivos,
revocable or irrevocable trust by written instrument or through
the exercise of a power of appointment.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter except that the references to a
limited liability company or a member of a limited liability
company are effective only if H.F. No. 3312 is enacted during
the 2000 session.
Sec. 11. Minnesota Statutes 1998, section 273.125,
subdivision 8, is amended to read:
Subd. 8. [MANUFACTURED HOMES; SECTIONAL STRUCTURES.] (a)
In this section, "manufactured home" means a structure
transportable in one or more sections, which is built on a
permanent chassis, and designed to be used as a dwelling with or
without a permanent foundation when connected to the required
utilities, and contains the plumbing, heating, air conditioning,
and electrical systems in it. Manufactured home includes any
accessory structure that is an addition or supplement to the
manufactured home and, when installed, becomes a part of the
manufactured home.
(b) A manufactured home that meets each of the following
criteria must be valued and assessed as an improvement to real
property, the appropriate real property classification applies,
and the valuation is subject to review and the taxes payable in
the manner provided for real property:
(1) the owner of the unit holds title to the land on which
it is situated;
(2) the unit is affixed to the land by a permanent
foundation or is installed at its location in accordance with
the Manufactured Home Building Code in sections 327.31 to
327.34, and rules adopted under those sections, or is affixed to
the land like other real property in the taxing district; and
(3) the unit is connected to public utilities, has a well
and septic tank system, or is serviced by water and sewer
facilities comparable to other real property in the taxing
district.
(c) A manufactured home that meets each of the following
criteria must be assessed at the rate provided by the
appropriate real property classification but must be treated as
personal property, and the valuation is subject to review and
the taxes payable in the manner provided in this section:
(1) the owner of the unit is a lessee of the land under the
terms of a lease;
(2) the unit is affixed to the land by a permanent
foundation or is installed at its location in accordance with
the Manufactured Home Building Code contained in sections 327.31
to 327.34, and the rules adopted under those sections, or is
affixed to the land like other real property in the taxing
district; and
(3) the unit is connected to public utilities, has a well
and septic tank system, or is serviced by water and sewer
facilities comparable to other real property in the taxing
district.
(d) Sectional structures must be valued and assessed as an
improvement to real property if the owner of the structure holds
title to the land on which it is located or is a qualifying
lessee of the land under section 273.19. In this paragraph
"sectional structure" means a building or structural unit that
has been in whole or substantial part manufactured or
constructed at an off-site location to be wholly or partially
assembled on-site alone or with other units and attached to a
permanent foundation.
(e) The commissioner of revenue may adopt rules under the
Administrative Procedure Act to establish additional criteria
for the classification of manufactured homes and sectional
structures under this subdivision.
(f) A storage shed, deck, or similar improvement
constructed on property that is leased or rented as a site for a
manufactured home, sectional structure, park trailer, or travel
trailer is taxable as provided in this section. In the case of
property that is leased or rented as a site for a travel
trailer, a storage shed, deck, or similar improvement on the
site that is considered personal property under this paragraph
is taxable only if its total estimated market value is over
$500. The property is taxable as personal property to the
lessee of the site if it is not owned by the owner of the site.
The property is taxable as real estate if it is owned by the
owner of the site. As a condition of permitting the owner of
the manufactured home, sectional structure, park trailer, or
travel trailer to construct improvements on the leased or rented
site, the owner of the site must obtain the permanent home
address of the lessee or user of the site. The site owner must
provide the name and address to the assessor upon request.
EFFECTIVE DATE: This section is effective beginning with
the 2000 assessment.
Sec. 12. Minnesota Statutes 1999 Supplement, section
273.13, subdivision 24, is amended to read:
Subd. 24. [CLASS 3.] (a) Commercial and industrial
property and utility real and personal property is class 3a.
(1) Except as otherwise provided, each parcel of
commercial, industrial, or utility real property has a class
rate of 2.4 percent of the first tier of market value, and 3.4
percent of the remaining market value, except that. In the case
of contiguous parcels of 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, except
that contiguous parcels owned by the same person or entity shall
be eligible for the first-tier value class rate on each separate
business operated by the owner of the property, provided the
business is housed in a separate structure. For the purposes of
this subdivision, the first tier means the first $150,000 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 subdivision, 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. Connections between parcels that
consist of power lines or pipelines do not cause the parcels to
be contiguous. Property owners who have contiguous parcels of
property that constitute separate businesses that may qualify
for the first-tier class rate shall notify the assessor by July
1, for treatment beginning in the following taxes payable year.
(2) Personal property that is: (i) part of an electric
generation, transmission, or distribution system; or (ii) part
of a pipeline system transporting or distributing water, gas,
crude oil, or petroleum products; and (iii) not described in
clause (3), has a class rate as provided under clause (1) for
the first tier of market value and the remaining market value.
In the case of multiple parcels in one county that are owned by
one person or entity, only one first tier amount is eligible for
the reduced rate.
(3) The entire market value of personal property that is:
(i) tools, implements, and machinery of an electric generation,
transmission, or distribution system; (ii) tools, implements,
and machinery of a pipeline system transporting or distributing
water, gas, crude oil, or petroleum products; or (iii) the mains
and pipes used in the distribution of steam or hot or chilled
water for heating or cooling buildings, has a class rate as
provided under clause (1) for the remaining market value in
excess of the first tier.
(b) Employment property defined in section 469.166, during
the period provided in section 469.170, shall constitute class
3b. The class rates for class 3b property are determined under
paragraph (a).
(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 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 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 a qualifying
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 a
qualifying 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 a qualifying entity or
the parent entity that constructed the structure. This reduced
class rate applies only if the a qualifying 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.
(3) For purposes of paragraph (c), "qualifying entity"
means the entity owning the property on September 1, 2000, or an
affiliate of an entity that owned the property on September 1,
2000.
EFFECTIVE DATE: That portion of this section relating to
the definition of real and personal utility property is
effective for taxes payable in 2000 and thereafter. All other
changes in the section are effective for taxes payable in 2001
and thereafter.
Sec. 13. Minnesota Statutes 1999 Supplement, 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 2.4 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 1.65 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 1.2 percent on the first
$76,000 of market value and a class rate of 1.65 percent of its
market value that exceeds $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; and
(7) a leased or privately owned noncommercial aircraft
storage hangar not exempt under section 272.01, subdivision 2,
and the land on which it is located, provided that:
(i) the land is on an airport owned or operated by a city,
town, county, metropolitan airports commission, or group
thereof, and
(ii) the land lease, or any ordinance or signed agreement
restricting the use of the leased premise, prohibits commercial
activity performed at the hangar.
If a hangar classified under this clause is sold after June
30, 2000, a bill of sale must be filed by the new owner with the
assessor of the county where the property is located within 60
days of the sale.
Class 4c property has a class rate of 1.65 percent of
market value, except that (i) each parcel of seasonal
residential recreational property not used for commercial
purposes has the same class rates as class 4bb property, (ii)
manufactured home parks assessed under clause (5) have the same
class rate 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.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter.
Sec. 14. Minnesota Statutes 1999 Supplement, section
273.1382, subdivision 1b, is amended to read:
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 70
percent, in the case of agricultural homestead property up to
$600,000 in market value, or 50 63 percent, in the case of all
other 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 portion of
class 2a property attributable to consisting of the house,
garage, and surrounding one acre of land is not eligible for the
credit under this subdivision, nor does its market value count
towards the valuation threshold contained in this subdivision.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter.
Sec. 15. Minnesota Statutes 1998, section 273.37,
subdivision 3, is amended to read:
Subd. 3. Taxable wind energy conversion systems, as
defined in section 216C.06, subdivision 12, which are not owned,
operated, and exclusively controlled by the owner of the land
upon which the system is situated, must be listed and assessed
by the commissioner of revenue as personal property in the name
of the owner of the system in the taxing district where it is
situated.
EFFECTIVE DATE: This section is effective for the 2000
assessment and thereafter.
Sec. 16. [273.372] [PROCEEDINGS AND APPEALS; UTILITY
VALUATIONS.]
An appeal by a utility company concerning the exemption,
valuation, or classification on property for which the
commissioner of revenue has provided the county with
commissioner's orders or recommended values must be brought
against the commissioner in tax court or in district court of
the county where the property is located, and not against the
county or taxing district where the property is located. If the
appeal to a court is of an order of the commissioner, it must be
brought under chapter 271. If the appeal is brought under
chapter 278, the procedures in that chapter apply. This
provision applies to the property contained under sections
273.33, 273.35, 273.36, and 273.37, but only if the appealed
values have remained unchanged from those provided to the county
by the commissioner. If the exemption, valuation, or
classification being appealed has been changed by the county,
then the action must be brought under chapter 278 in the county
where the property is located.
Upon filing of any appeal by a utility company against the
commissioner, the commissioner shall give notice by first class
mail to each county which would be affected by the appeal.
Companies that submit the reports under section 273.371 by
the date specified in that section, or by the date specified by
the commissioner in an extension, may appeal administratively to
the commissioner under the procedures in section 270.11,
subdivision 6, prior to bringing an action in tax court or in
district court, however, instituting an administrative appeal
with the commissioner does not change or modify the deadline in
section 278.01 for bringing an action in tax court or district
court.
EFFECTIVE DATE: This section is effective for appeals made
on property for assessment year 1999 and thereafter.
Sec. 17. Minnesota Statutes 1998, section 275.066, is
amended to read:
275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.]
For the purposes of property taxation and property tax
state aids, the term "special taxing districts" includes the
following entities:
(1) watershed districts under chapter 103D;
(2) sanitary districts under sections 115.18 to 115.37;
(3) regional sanitary sewer districts under sections 115.61
to 115.67;
(4) regional public library districts under section
134.201;
(5) park districts under chapter 398;
(6) regional railroad authorities under chapter 398A;
(7) hospital districts under sections 447.31 to 447.38;
(8) St. Cloud metropolitan transit commission under
sections 458A.01 to 458A.15;
(9) Duluth transit authority under sections 458A.21 to
458A.37;
(10) regional development commissions under sections
462.381 to 462.398;
(11) housing and redevelopment authorities under sections
469.001 to 469.047;
(12) port authorities under sections 469.048 to 469.068;
(13) economic development authorities under sections
469.090 to 469.1081;
(14) metropolitan council under sections 473.123 to
473.549;
(15) metropolitan airports commission under sections
473.601 to 473.680;
(16) metropolitan mosquito control commission under
sections 473.701 to 473.716;
(17) Morrison county rural development financing authority
under Laws 1982, chapter 437, section 1;
(18) Croft Historical Park District under Laws 1984,
chapter 502, article 13, section 6;
(19) East Lake county medical clinic district under Laws
1989, chapter 211, sections 1 to 6;
(20) Floodwood area ambulance district under Laws 1993,
chapter 375, article 5, section 39; and
(21) Middle Mississippi river watershed management
organization under sections 103B.211 and 103B.241; and
(22) any other political subdivision of the state of
Minnesota, excluding counties, school districts, cities, and
towns, that has the power to adopt and certify a property tax
levy to the county auditor, as determined by the commissioner of
revenue.
EFFECTIVE DATE: This section is effective for taxes levied
in 2000, payable in 2001, and thereafter.
Sec. 18. Minnesota Statutes 1998, section 276.19,
subdivision 1, is amended to read:
Subdivision 1. [NOTICE OF OVERPAYMENT.] If an overpayment
of property tax arises on a parcel for any reason due to receipt
of a payment that exceeds the total amount of the tax required
to be paid on the property tax statement, the responsible county
official shall promptly notify the payer by regular mail that
the overpayment has occurred. The notice must state the amount
of overpayment and identify the parcel on which the overpayment
occurred. The notice must also instruct the payer how to claim
the overpayment and advise that the overpayment is subject to
forfeiture under this section. If the name or address of the
payer is not known, the notice of unclaimed overpayment must be
mailed to the taxpayer of record in the office of the county
auditor.
EFFECTIVE DATE: This section is effective for overpayment
of taxes made the day following final enactment and thereafter,
and applies only to taxes levied in 1999, payable in 2000, and
thereafter.
Sec. 19. [278.14] [REFUNDS OF MISTAKENLY BILLED TAXES.]
Subdivision 1. [APPLICABILITY.] A county must pay a refund
of a mistakenly billed tax as provided in this section. As used
in this section, "mistakenly billed tax" means an amount of
property tax that was billed, to the extent the amount billed
exceeds the accurate tax amount due to a misclassification of
the owner's property under section 273.13 or a mathematical
error in the calculation of the tax on the owner's property,
together with any penalty or interest paid on that amount. This
section applies only to taxes payable in the current year and
the two prior years. As used in this section, "mathematical
error" is limited to an error in:
(1) converting the market value of a property to tax
capacity or to a referendum market value;
(2) application of the tax rate as computed by the auditor
under sections 275.08, subdivisions 1b, 1c, and 1d; 276A.06,
subdivisions 4 and 5; and 473F.07, subdivisions 4 and 5, to the
property's tax capacity or referendum market value; or
(3) calculation of or eligibility for a credit.
The remedy provided under this section does not apply to a
misclassification under section 273.13 that is due to the
failure of the property owner to apply for the correct
classification as required by law.
Subd. 2. [PROCEDURE.] A refund of mistakenly billed tax
must be paid upon verification of a claim made in a written
application by the owner of the property or upon discovery of
the mistakenly billed tax by the county. Refunds of
overpayments will be made as provided in section 278.12.
Subd. 3. [APPEALS.] If the county rejects a claim by a
property owner under subdivision 2, it must notify the property
owner of that decision within 90 days of receipt of the claim.
The property owner may appeal that decision to the tax court
within 60 days after receipt of a notice from the county of the
decision. Relief granted by the tax court is limited to current
year taxes, and taxes in the two prior years.
EFFECTIVE DATE: This section is effective for overpayment
of taxes made the day following final enactment and thereafter,
and applies only to taxes levied in 1999, payable in 2000, and
thereafter.
Sec. 20. Minnesota Statutes 1999 Supplement, 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 $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) (5) 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) (6);
and
(8) (6) the total unpaid balances of debts secured by
mortgages and other liens on the property, including unpaid and
delinquent special assessments and interest and any delinquent
property taxes, penalties, and interest, but not including
property taxes payable during the year, does not exceed 30 75
percent of the assessor's estimated market value for the year.
Sec. 21. Minnesota Statutes 1998, section 290B.04, is
amended by adding a subdivision to read:
Subd. 7. [PAYMENT OF DELINQUENT TAXES AND SPECIAL
ASSESSMENTS.] Upon approval of a senior citizen's initial
application, the commissioner of revenue shall pay to the
treasurer of the county where the property is located the amount
of any delinquent property taxes, penalties, interest, and
delinquent special assessments and interest on the property
which is the subject of the application.
Sec. 22. Minnesota Statutes 1999 Supplement, section
290B.05, subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION BY COMMISSIONER.] The
commissioner shall determine each qualifying homeowner's "annual
maximum property tax amount" following approval of the
homeowner's initial application and following the receipt of a
resumption of eligibility certification. The "annual maximum
property tax amount" equals 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 $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 and delinquent special
assessments and interest and any delinquent property taxes,
penalties, and interest, but not including property taxes
payable during the year.
Sec. 23. Minnesota Statutes 1998, section 290B.05,
subdivision 3, is amended to read:
Subd. 3. [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.]
When final property tax amounts for the following year have been
determined, the county auditor shall calculate the "deferred
property tax amount." The deferred property tax amount is equal
to the lesser of (1) the maximum allowable deferral for the
year; or (2) the difference between the total amount of property
taxes levied upon the qualifying homestead by all taxing
jurisdictions and the maximum property tax amount. Any special
assessments levied by any local unit of government must not be
included in the total tax used to calculate the deferred tax
amount. No deferral of the current year's property taxes is
allowed if there are any delinquent property taxes or delinquent
special assessments for any previous year. Any tax attributable
to new improvements made to the property after the initial
application has been approved under section 290B.04, subdivision
2, must be excluded when determining any subsequent deferred
property tax amount. The county auditor shall annually, on or
before April 15, certify to the commissioner of revenue the
property tax deferral amounts determined under this subdivision
by property and by owner.
Sec. 24. Minnesota Statutes 1998, section 290B.07, is
amended to read:
290B.07 [LIEN; DEFERRED PORTION.]
(a) Payment by the state to the county treasurer
of property taxes, penalties, interest, or special assessments
and interest deferred under this section chapter is deemed a
loan from the state to the program participant. The
commissioner must compute the interest as provided in section
270.75, subdivision 5, but not to exceed five percent, and
maintain records of the total deferred amount and interest for
each participant. Interest shall accrue beginning September 1
of the payable year for which the taxes are deferred. Any
deferral made under this chapter shall not be construed as
delinquent property taxes.
The lien created under section 272.31 continues to secure
payment by the taxpayer, or by the taxpayer's successors or
assigns, of the amount deferred, including interest, with
respect to all years for which amounts are deferred. The lien
for deferred taxes and interest has the same priority as any
other lien under section 272.31, except that liens, including
mortgages, recorded or filed prior to the recording or filing of
the notice under section 290B.04, subdivision 2, have priority
over the lien for deferred taxes and interest. A seller's
interest in a contract for deed, in which a qualifying homeowner
is the purchaser or an assignee of the purchaser, has priority
over deferred taxes and interest on deferred taxes, regardless
of whether the contract for deed is recorded or filed. The lien
for deferred taxes and interest for future years has the same
priority as the lien for deferred taxes and interest for the
first year, which is always higher in priority than any
mortgages or other liens filed, recorded, or created after the
notice recorded or filed under section 290B.04, subdivision 2.
The county treasurer or auditor shall maintain records of the
deferred portion and shall list the amount of deferred taxes for
the year and the cumulative deferral and interest for all
previous years as a lien against the property. In any
certification of unpaid taxes for a tax parcel, the county
auditor shall clearly distinguish between taxes payable in the
current year, deferred taxes and interest, and delinquent
taxes. Payment of the deferred portion becomes due and owing at
the time specified in section 290B.08. Upon receipt of the
payment, the commissioner shall issue a receipt for it to the
person making the payment upon request and shall notify the
auditor of the county in which the parcel is located, within ten
days, identifying the parcel to which the payment applies. Upon
receipt by the commissioner of revenue of collected funds in the
amount of the deferral, the state's loan to the program
participant is deemed paid in full.
(b) If property for which taxes have been deferred under
this chapter forfeits under chapter 281 for nonpayment of a
nondeferred property tax amount, or because of nonpayment of
amounts previously deferred following a termination under
section 290B.08, the lien for the taxes deferred under this
chapter, plus interest and costs, shall be canceled by the
county auditor as provided in section 282.07. However,
notwithstanding any other law to the contrary, any proceeds from
a subsequent sale of the property under chapter 282 or another
law, must be used to first reimburse the county's forfeited tax
sale fund for any direct costs of selling the property or any
costs directly related to preparing the property for sale, and
then to reimburse the state for the amount of the canceled
lien. Within 90 days of the receipt of any sale proceed to
which the state is entitled under these provisions, the county
auditor must pay those funds to the commissioner of revenue by
warrant for deposit in the general fund. No other deposit, use,
distribution, or release of gross sale proceeds or receipts may
be made by the county until payments sufficient to fully
reimburse the state for the canceled lien amount have been
transmitted to the commissioner.
Sec. 25. Minnesota Statutes 1998, section 290B.08,
subdivision 1, is amended to read:
Subdivision 1. [TERMINATION.] (a) The deferral of taxes
granted under this chapter terminates when one of the following
occurs:
(1) the property is sold or transferred;
(2) the death of the all qualifying
homeowner(s) homeowners;
(3) the homeowner notifies the commissioner in writing that
the homeowner desires to discontinue the deferral; or
(4) the property no longer qualifies as a homestead.
(b) A property is not terminated from the program because
no deferred property tax amount is determined on the homestead
for any given year after the homestead's initial enrollment into
the program.
EFFECTIVE DATE: This section is effective for deferrals of
property taxes payable in 2001 and thereafter.
Sec. 26. Minnesota Statutes 1998, section 290B.08,
subdivision 2, is amended to read:
Subd. 2. [PAYMENT UPON TERMINATION.] Upon the termination
of the deferral under subdivision 1, the amount of deferred
taxes and, penalties, interest, and special assessments and
interest, plus the recording or filing fees under both section
290B.04, subdivision 2, and this subdivision becomes due and
payable to the commissioner within 90 days of termination of the
deferral for terminations under subdivision 1, paragraph (a),
clauses (1) and (2), and within one year of termination of the
deferral for terminations under subdivision 1, paragraph (a),
clauses (3) and (4). No additional interest is due on the
deferral if timely paid. On receipt of payment, the
commissioner shall within ten days notify the auditor of the
county in which the parcel is located, identifying the parcel to
which the payment applies and shall remit the recording or
filing fees under section 290B.04, subdivision 2, and this
subdivision to the auditor. A notice of termination of
deferral, containing the legal description and the recording or
filing data for the notice of qualification for deferral under
section 290B.04, subdivision 2, shall be prepared and recorded
or filed by the county auditor in the same office in which the
notice of qualification for deferral under section 290B.04,
subdivision 2, was recorded or filed, and the county auditor
shall mail a copy of the notice of termination to the property
owner. The property owner shall pay the recording or filing
fees. Upon recording or filing of the notice of termination of
deferral, the notice of qualification for deferral under section
290B.04, subdivision 2, and the lien created by it are
discharged. If the deferral is not timely paid, the penalty,
interest, lien, forfeiture, and other rules for the collection
of ad valorem property taxes apply.
Sec. 27. Minnesota Statutes 1998, section 290B.09,
subdivision 2, is amended to read:
Subd. 2. [APPROPRIATION.] An amount sufficient to pay the
total amount of property tax determined under subdivision 1,
plus any amounts paid under section 290B.04, subdivision 7, is
annually appropriated from the general fund to the commissioner
of revenue.
Sec. 28. Minnesota Statutes 1999 Supplement, section
383D.74, subdivision 2, is amended to read:
Subd. 2. [EXPIRATION.] The authority to impose a penalty
under this section expires on December 31, 2000 2005.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 29. Minnesota Statutes 1998, section 429.011,
subdivision 2a, is amended to read:
Subd. 2a. [MUNICIPALITY.] "Municipality" also includes a
county in the case of construction, reconstruction, or
improvement of a county state-aid highway or county highway as
defined in section 160.02 including curbs and gutters and storm
sewers and includes; a county exercising its powers and duties
under section 444.075, subdivision 1; and a county for expenses
not paid for under section 403.113, subdivision 3, paragraph
(b), clause (3).
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 30. Minnesota Statutes 1998, section 429.011,
subdivision 5, is amended to read:
Subd. 5. [IMPROVEMENT.] "Improvement" means any type of
improvement made under authority granted by section 429.021, and
in the case of a county is limited to the construction,
reconstruction, or improvement of a county state-aid highway or
county highway including curbs and gutters and storm sewers, and
to the purchase, installation, or maintenance of signs, posts,
and markers for addressing related to the operation of enhanced
911 telephone service.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 31. Minnesota Statutes 1998, section 429.021,
subdivision 1, is amended to read:
Subdivision 1. [IMPROVEMENTS AUTHORIZED.] The council of a
municipality shall have power to make the following improvements:
(1) To acquire, open, and widen any street, and to improve
the same by constructing, reconstructing, and maintaining
sidewalks, pavement, gutters, curbs, and vehicle parking strips
of any material, or by grading, graveling, oiling, or otherwise
improving the same, including the beautification thereof and
including storm sewers or other street drainage and connections
from sewer, water, or similar mains to curb lines.
(2) To acquire, develop, construct, reconstruct, extend,
and maintain storm and sanitary sewers and systems, including
outlets, holding areas and ponds, treatment plants, pumps, lift
stations, service connections, and other appurtenances of a
sewer system, within and without the corporate limits.
(3) To construct, reconstruct, extend, and maintain steam
heating mains.
(4) To install, replace, extend, and maintain street lights
and street lighting systems and special lighting systems.
(5) To acquire, improve, construct, reconstruct, extend,
and maintain water works systems, including mains, valves,
hydrants, service connections, wells, pumps, reservoirs, tanks,
treatment plants, and other appurtenances of a water works
system, within and without the corporate limits.
(6) To acquire, improve and equip parks, open space areas,
playgrounds, and recreational facilities within or without the
corporate limits.
(7) To plant trees on streets and provide for their
trimming, care, and removal.
(8) To abate nuisances and to drain swamps, marshes, and
ponds on public or private property and to fill the same.
(9) To construct, reconstruct, extend, and maintain dikes
and other flood control works.
(10) To construct, reconstruct, extend, and maintain
retaining walls and area walls.
(11) To acquire, construct, reconstruct, improve, alter,
extend, operate, maintain, and promote a pedestrian skyway
system. Such improvement may be made upon a petition pursuant
to section 429.031, subdivision 3.
(12) To acquire, construct, reconstruct, extend, operate,
maintain, and promote underground pedestrian concourses.
(13) To acquire, construct, improve, alter, extend,
operate, maintain, and promote public malls, plazas or
courtyards.
(14) To construct, reconstruct, extend, and maintain
district heating systems.
(15) To construct, reconstruct, alter, extend, operate,
maintain, and promote fire protection systems in existing
buildings, but only upon a petition pursuant to section 429.031,
subdivision 3.
(16) To acquire, construct, reconstruct, improve, alter,
extend, and maintain highway sound barriers.
(17) To improve, construct, reconstruct, extend, and
maintain gas and electric distribution facilities owned by a
municipal gas or electric utility.
(18) To purchase, install, and maintain signs, posts, and
other markers for addressing related to the operation of
enhanced 911 telephone service.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 32. Minnesota Statutes 1998, section 429.031,
subdivision 1, is amended to read:
Subdivision 1. [PREPARATION OF PLANS, NOTICE OF HEARING.]
(a) Before the municipality awards a contract for an improvement
or orders it made by day labor, or before the municipality may
assess any portion of the cost of an improvement to be made
under a cooperative agreement with the state or another
political subdivision for sharing the cost of making the
improvement, the council shall hold a public hearing on the
proposed improvement following two publications in the newspaper
of a notice stating the time and place of the hearing, the
general nature of the improvement, the estimated cost, and the
area proposed to be assessed. The two publications must be a
week apart, and the hearing must be at least three days after
the second publication. Not less than ten days before the
hearing, notice of the hearing must also be mailed to the owner
of each parcel within the area proposed to be assessed and must
contain a statement that a reasonable estimate of the impact of
the assessment will be available at the hearing, but failure to
give mailed notice or any defects in the notice does not
invalidate the proceedings. For the purpose of giving mailed
notice, owners are those shown as owners 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 are not listed on the records of the county
auditor or the county treasurer, the owners may be ascertained
by any practicable means, and mailed notice must be given them
as provided in this subdivision.
(b) Before the adoption of a resolution ordering the
improvement, the council shall secure from the city engineer or
some other competent person of its selection a report advising
it in a preliminary way as to whether the proposed improvement
is necessary, cost-effective, and feasible and as to whether it
should best be made as proposed or in connection with some other
improvement. The report must also include the estimated cost of
the improvement as recommended. A reasonable estimate of the
total amount to be assessed, and a description of the
methodology used to calculate individual assessments for
affected parcels, must be available at the hearing. No error or
omission in the report invalidates the proceeding unless it
materially prejudices the interests of an owner.
(c) If the report is not prepared by an employee of a
municipality, the compensation for preparing the report under
this subdivision must be based on the following factors:
(1) the time and labor required;
(2) the experience and knowledge of the preparer;
(3) the complexity and novelty of the problems involved;
and
(4) the extent of the responsibilities assumed.
(d) The compensation must not be based primarily on a
percentage of the estimated cost of the improvement.
(e) The council may also take other steps prior to the
hearing, including, among other things, the preparation of plans
and specifications and the advertisement for bids that will in
its judgment provide helpful information in determining the
desirability and feasibility of the improvement.
(f) The hearing may be adjourned from time to time, and a
resolution ordering the improvement may be adopted at any time
within six months after the date of the hearing by vote of a
majority of all members of the council when the improvement has
been petitioned for by the owners of not less than 35 percent in
frontage of the real property abutting on the streets named in
the petition as the location of the improvement. When there has
been no such petition, the resolution may be adopted only by
vote of four-fifths of all members of the council; provided that
if the mayor of the municipality is a member of the council but
has no vote or votes only in case of a tie, the mayor is not
deemed to be a member for the purpose of determining a
four-fifths majority vote.
(g) The resolution ordering the improvement may reduce, but
not increase, the extent of the improvement as stated in the
notice of hearing.
EFFECTIVE DATE: This section is effective for mailed
notices and hearings held June 1, 2000, and thereafter.
Sec. 33. Minnesota Statutes 1998, section 469.040, is
amended by adding a subdivision to read:
Subd. 5. [DESIGNATED HOUSING CORPORATION.] Property
located within the exterior boundaries of the White Earth Indian
Reservation that is owned by the tribe's designated housing
entity as defined in United States Code, title 25, section
4103(21), and that is a housing project or a housing development
project, as defined in section 469.002, subdivisions 13 and 15,
is exempt from all real and personal property taxes of the city,
the county, the state, or any political subdivision thereof, but
the property is subject to subdivision 3. A copy of those
portions of the annual reports submitted on behalf of the
housing entity to the Secretary of the United States Department
of Housing and Urban Development for the project that contain
information sufficient to determine the amount due under
subdivision 3 satisfies the reporting requirements of
subdivision 3 for the project.
EFFECTIVE DATE: This section is effective for the 2000
assessment, taxes payable in 2001, and thereafter.
Sec. 34. Laws 1987, chapter 402, section 2, subdivision 1,
is amended to read:
Subdivision 1. [AGREEMENT.] The city of Moose Lake and one
or more of the towns of Moose Lake, Silver, and Windemere may by
action of their city council and town boards establish the Moose
Lake fire protection district. The town of Silver may provide
that only a described part of its territory be included within
the district. The district shall provide fire protection
services throughout its territory and may exercise all the
powers of the city and towns that relate to fire protection
anywhere within its territory. Any other contiguous town or
home rule charter or statutory city may join the district with
the agreement of the cities and towns that comprise the district
at the time of its application to join. Action to join the
district may be taken by the city council or town board of the
city or town.
EFFECTIVE DATE: Pursuant to Minnesota Statutes, section
645.023, subdivision 1, clause (a), this section is effective
without local approval the day following final enactment.
Sec. 35. Laws 1987, chapter 402, section 2, subdivision 4,
is amended to read:
Subd. 4. [TAX.] The district may impose a property tax on
real property in the district in an amount sufficient to
discharge its operating expenses and debt payable in each year.
The tax shall be disregarded in the calculation of any levies or
limits on levies provided by Minnesota Statutes, chapter 275, or
other law. A city or town that joins the district may not incur
expenses or debt for fire protection services for territory
included in the district and may not impose taxes for that
purpose. The town of Silver may impose a property tax on
territory not included in the district to discharge costs or
debt incurred to provide fire protection services to that
territory.
EFFECTIVE DATE: Pursuant to Minnesota Statutes, section
645.023, subdivision 1, clause (a), this section is effective
without local approval the day following final enactment.
Sec. 36. Laws 1987, chapter 402, section 2, subdivision 5,
is amended to read:
Subd. 5. [PUBLIC INDEBTEDNESS.] The district may incur
debt in the manner provided for a municipality by Minnesota
Statutes, chapter 475, when necessary to accomplish a duty
charged to it. The district may also issue certificates of
indebtedness subject to debt limits for the district to purchase
capital equipment having an expected useful life at least as
long as the terms of the certificates. The certificates must be
payable in not more than five years and must be issued on the
terms and in the manner as the board may determine. Before
issuing certificates in an amount exceeding .25 percent of the
taxable property of the district, the board shall publish a
resolution indicating its intent to issue the certificates in a
newspaper of general circulation in the district. The
certificates may be issued without an election unless within ten
days of the publication a petition signed by the sum of at least
ten percent of the voters in the member towns voting in the last
regular town election and ten percent of the voters of the city
voting in the last city general election requesting an election
on their issuance is filed with the board. If a petition is
filed, the certificates may not be issued unless their issuance
is approved by a majority of the voters at a general or special
election in which all the residents of the city and member towns
are eligible to vote. A tax levy shall be made against all
property in the district to pay the principal and interest on
the certificates, in accordance with Minnesota Statutes, section
475.61, as in the case of bonds.
EFFECTIVE DATE: Pursuant to Minnesota Statutes, section
645.023, subdivision 1, clause (a), this section is effective
without local approval the day following final enactment.
Sec. 37. [EVELETH-GILBERT JOINT RECREATION BOARD TAX.]
The cities and towns who participate in the Eveleth-Gilbert
joint recreation board may levy a tax on the taxable property
within their taxing jurisdictions situated within the boundaries
of independent school district No. 2154, Eveleth-Gilbert, as
provided in this section. The maximum amount that may be levied
by all participating cities and towns combined shall not exceed
a total of $125,000 per year, for a maximum of eight years.
Property within the school district may be made subject to the
tax permitted by this section by the agreement of the governing
body or town board of the city or town where the property is
located. The agreement may be by resolution of a governing body
or town board or by a joint powers agreement under Minnesota
Statutes, section 471.59. If levied, this tax is in addition to
all other taxes permitted to be levied for park and recreation
purposes by the participating cities and towns. It shall be
disregarded in the calculation of all tax levy limitations
imposed by charter and any general overall levy limitations. A
city or town may withdraw its agreement to future taxes by
notice to the recreation board and the county auditor unless
provided otherwise by a joint powers agreement. The tax shall
be collected by the St. Louis county treasurer and paid directly
to the Eveleth-Gilbert joint recreation board.
This section applies in the cities of Eveleth, Gilbert,
Leonidas, McKinley, and Iron Junction, and in the towns of
Biwabik, Clinton, and Fayal, all located in St. Louis county.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 through taxes payable in 2008.
Sec. 38. [STUDY OF TAXATION OF FOREST LAND.]
Subdivision 1. [STUDY.] The commissioner of revenue, in
cooperation with the Minnesota forest resources council, shall
study the taxation of forest land in this state. The study
shall include a review of the current application of property
taxes to these lands and a review and comparison with other
forest land tax policies. It shall also include recommendations
for changes in tax policy:
(1) to encourage forest productivity;
(2) to maintain land in forest cover;
(3) to encourage the application of sustainable site level
forest management guidelines;
(4) to address impacts on local government revenues; and
(5) for changes in tax rates.
The study shall be completed and transmitted to the chairs of
the house and senate tax committees by December 1, 2000.
Subd. 2. [APPROPRIATION.] $50,000 is appropriated from the
general fund in fiscal year 2000 to the commissioner of revenue
for completion of the study required in this section. This
appropriation is available until December 31, 2000.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 39. [APPROPRIATION.]
Notwithstanding section 16A.1521, the balance of the
property tax reform account as of July 1, 2000, is transferred
to the general fund and any additional funds appropriated to the
property tax reform account as a result of the November, 1999,
forecast are canceled and the appropriation remains in the
general fund.
Sec. 40. [REPEALER.]
(a) Minnesota Statutes 1998, sections 270.072, subdivision
5; and 270.075, subdivisions 3 and 4; are repealed.
(b) Minnesota Statutes 1998, section 273.127, is repealed.
(c) Minnesota Statutes 1998, section 273.1316, is repealed.
EFFECTIVE DATE: Paragraph (a) is effective for taxes
payable in 2001 and thereafter. Paragraph (b) is effective for
taxes payable in 2000 and thereafter. Paragraph (c) is
effective the day following final enactment.
Sec. 41. [EFFECTIVE DATE.]
Sections 20 to 24, 26, and 27 apply to all homeowners and
all property taxes deferred beginning in payable 2001, including
those homeowners who initially qualified under this program for
taxes payable in 1999 or 2000, except that if a homeowner did
not qualify for any property tax deferral for payable 2000
because of the percentage threshold in Minnesota Statutes,
section 290B.03, subdivision 1, paragraph (6), or the
prohibition on qualification of owners of property with
delinquent taxes or delinquent special assessments, and now
qualifies for the program with the changes in those provisions,
the homeowner may apply to the commissioner by July 1, 2000, and
request a retroactive qualification into the program for taxes
payable in 2000. The commissioner of revenue shall notify the
county auditor of such eligible taxpayers. The commissioner
shall make payment to the county for the appropriate amount due
for taxes payable in 2000, and the county treasurer shall refund
the taxpayer for any excess tax amount that the taxpayer has
paid to the county.
ARTICLE 6
LEVY LIMITS AND AIDS TO LOCAL GOVERNMENT
Section 1. Minnesota Statutes 1998, section 97A.061, is
amended by adding a subdivision to read:
Subd. 4. [OFFSET OF PAYMENTS.] Payments to a county or
town under this section must be reduced by the amount of payment
to that county or town under section 477A.12 for the same lands
in the same year.
EFFECTIVE DATE: This section is effective for payments
made in calendar year 2001 and thereafter.
Sec. 2. Minnesota Statutes 1998, section 97A.061, is
amended by adding a subdivision to read:
Subd. 5. [ALLOCATION OF PAYMENTS.] Notwithstanding section
477A.14, the amounts paid to a county under section 477A.14 for
lands that are also subject to payment under this section shall
be allocated within the county in accordance with subdivision 2.
EFFECTIVE DATE: This section is effective for payments
made in calendar year 2001 and thereafter.
Sec. 3. Minnesota Statutes 1999 Supplement, section
273.1398, subdivision 4a, is amended 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 Laws 1999, chapter 216, 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).
(d) Payments to a county under subdivision 2 for calendar
year 2001 are permanently increased by an amount equal to 7.5
percent of the county's share of transferred fines collected by
the district courts in the county during calendar year 1998, as
determined under paragraph (a). If the amount determined in
paragraph (a) exceeds the amount of aid a county is scheduled to
be paid under subdivision 2 in 2000, then the county shall not
receive an aid increase under this paragraph.
EFFECTIVE DATE: This section is effective for aids payable
in 2001 and thereafter.
Sec. 4. Minnesota Statutes 1999 Supplement, section
275.70, subdivision 5, is amended to read:
Subd. 5. [SPECIAL LEVIES.] "Special levies" means those
portions of ad valorem taxes levied by a local governmental unit
for the following purposes or in the following manner:
(1) to pay the costs of the principal and interest on
bonded indebtedness or to reimburse for the amount of liquor
store revenues used to pay the principal and interest due on
municipal liquor store bonds in the year preceding the year for
which the levy limit is calculated;
(2) to pay the costs of principal and interest on
certificates of indebtedness issued for any corporate purpose
except for the following:
(i) tax anticipation or aid anticipation certificates of
indebtedness;
(ii) certificates of indebtedness issued under sections
298.28 and 298.282;
(iii) certificates of indebtedness used to fund current
expenses or to pay the costs of extraordinary expenditures that
result from a public emergency; or
(iv) certificates of indebtedness used to fund an
insufficiency in tax receipts or an insufficiency in other
revenue sources;
(3) to provide for the bonded indebtedness portion of
payments made to another political subdivision of the state of
Minnesota;
(4) to fund payments made to the Minnesota state armory
building commission under section 193.145, subdivision 2, to
retire the principal and interest on armory construction bonds;
(5) for unreimbursed expenses related to flooding that
occurred during the first half of calendar year 1997, as allowed
by the commissioner of revenue under section 275.74, paragraph
(b);
(6) for local units of government located in an area
designated by the Federal Emergency Management Agency pursuant
to a major disaster declaration issued for Minnesota by
President Clinton after April 1, 1997, and before June 11, 1997,
for the amount of tax dollars lost due to abatements authorized
under section 273.123, subdivision 7, and Laws 1997, chapter
231, article 2, section 64, to the extent that they are related
to the major disaster and to the extent that neither the state
or federal government reimburses the local government for the
amount lost;
(7) property taxes approved by voters which are levied
against the referendum market value as provided under section
275.61;
(8) to fund matching requirements needed to qualify for
federal or state grants or programs to the extent that either
(i) the matching requirement exceeds the matching requirement in
calendar year 1997, or (ii) it is a new matching requirement
that didn't exist prior to 1998;
(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;
(12) to pay an abatement under section 469.1815;
(13) to pay the employer contribution to the local
government correctional service retirement plan under section
353E.03, subdivision 2, to the extent that the employer
contribution exceeds 5.49 percent of total salary; and
(14) 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, or to pay the operating or maintenance costs of a
regional jail as authorized in section 641.262. For purposes of
this clause, a district court order is not 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; and
(15) to repay a state or federal loan used to fund the
direct or indirect required spending by the local government due
to a state or federal transportation project or other state or
federal capital project. This authority may only be used if the
project is not a local government initiative.
EFFECTIVE DATE: Minnesota Statutes, section 275.70,
subdivision 5, as amended by this section, is effective
beginning with taxes levied in 2000, payable in 2001 and
thereafter, for any year in which general levy limits are
imposed, notwithstanding Laws 1997, chapter 231, article 3,
section 9, as amended by Laws 1999, chapter 243, article 6,
section 10.
Sec. 5. Minnesota Statutes 1999 Supplement, 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 but excluding
amounts allocated under section 298.28, subdivision 2, paragraph
(b), (5) flood loss aid under section 273.1383, and (6)
low-income housing aid under sections 477A.06 and 477A.065.
EFFECTIVE DATE: This section is effective for taxes levied
in 1999, payable in 2000.
Sec. 6. Minnesota Statutes 1999 Supplement, section
477A.011, subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as provided in
paragraphs (b) to (k) (n), "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.
(l) The city aid base for a city is increased by $32,000 in
2001 and thereafter, and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $32,000 in calendar year 2001 only, provided
that:
(1) the city has a population in 1998 that is greater than
200 but less than 500;
(2) the city's revenue need used in calculating aids
payable in 2000 was greater than $200 per capita;
(3) the city net tax capacity for the city used in
calculating aids available in 2000 was equal to or less than
$200 per capita;
(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $65 per capita; and
(5) the city's formula aid for aids payable in 2000 was
greater than zero.
(m) The city aid base for a city is increased by $7,200 in
2001 and thereafter, and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $7,200 in calendar year 2001 only, provided
that:
(1) the city had a population in 1998 that is greater than
200 but less than 500;
(2) the city's commercial industrial percentage used in
calculating aids payable in 2000 was less than ten percent;
(3) more than 25 percent of the city's population was 60
years old or older according to the 1990 census;
(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $15 per capita; and
(5) the city's formula aid for aids payable in 2000 was
greater than zero.
(n) The city aid base for a city is increased by $45,000 in
2001 and thereafter, and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $45,000 in calendar year 2001 only, provided
that:
(1) the net tax capacity of the city used in calculating
its 2000 aid under section 477A.013 is less than $810 per
capita;
(2) the population of the city declined more than two
percent between 1988 and 1998;
(3) the net levy of the city used in calculating 2000 aid
under section 477A.013 is greater than $240 per capita; and
(4) the city received less than $36 per capita in aid under
section 477A.013, subdivision 9, for aids payable in 2000.
EFFECTIVE DATE: This section is effective beginning with
aids payable in 2001 and thereafter.
Sec. 7. Minnesota Statutes 1999 Supplement, 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 $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 in subdivision
3, and increased by the amount necessary to effectuate Laws
1999, chapter 243, article 5, section 48, paragraph (b). For
aids payable in 2001 through 2003, 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 2004, 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 2003 under section 477A.06.
For aids payable in 2003 2005 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.
EFFECTIVE DATE: This section is effective for aids payable
in 2000 and thereafter.
Sec. 8. Minnesota Statutes 1999 Supplement, section
477A.06, subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY.] (a) For assessment years
1998, 1999, and 2000, 2001, and 2002, 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, 2002, and 2003,
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 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. 9. Minnesota Statutes 1998, section 477A.06,
subdivision 3, is amended to read:
Subd. 3. [APPROPRIATION; PAYMENT.] (a) The commissioner
shall pay each city its qualifying aid amount on or before July
20 of each year. An amount sufficient to pay the aid authorized
under this section is appropriated to the commissioner of
revenue from the property tax reform account in fiscal years
2000 and 2001, and from the general fund in fiscal year years
2002, 2003, and 2004.
(b) For fiscal years 2001 and 2002 through 2004, the amount
of aid appropriated under this section may not exceed $1,500,000
each year.
(c) If the total amount of aid that would otherwise be
payable under the formula in this section exceeds the maximum
allowed under paragraph (b), the amount of aid for each city is
reduced proportionately to equal the limit.
Sec. 10. Minnesota Statutes 1998, section 477A.11,
subdivision 1, is amended to read:
Subdivision 1. [TERMS.] For the purpose of Laws 1979,
Chapter 303, Article 8, Sections 1 to 5 sections 477A.11 to
477A.145, the terms defined in this section have the meanings
given them.
EFFECTIVE DATE: This section applies to payments made in
calendar year 2001 and thereafter.
Sec. 11. Minnesota Statutes 1998, section 477A.12, is
amended to read:
477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE;
CERTIFICATION OF ACREAGE.]
(a) There is As an offset for expenses incurred by counties
and towns in support of natural resources lands, the following
amounts are annually appropriated to the commissioner of natural
resources from the general fund for payment to counties within
the state an amount equal to transfer to the commissioner of
revenue. The commissioner of revenue shall pay the transferred
funds to counties as required by sections 477A.11 to 477A.145.
The amounts are:
(1) for acquired natural resources land, $3, as adjusted
for inflation under section 477A.145, multiplied by the total
number of acres of acquired natural resources land or, beginning
July 1, 1996, at the county's option three-fourths of one
percent of the appraised value of all acquired natural resources
land in the county, whichever is greater;
(2) 75 cents, as adjusted for inflation under section
477A.145, multiplied by the number of acres of
county-administered other natural resources land; and
(3) 37.5 cents, as adjusted for inflation under section
477A.145, multiplied by the number of acres of
commissioner-administered other natural resources land located
in each county as of July 1 of each year prior to the payment
year.
(b) Lands for which payments in lieu are made pursuant to
section 97A.061, subdivision 3, and Laws 1973, chapter 567,
shall not be eligible for payments under this section. Each
county auditor shall certify to the department of natural
resources during July of each year prior to the payment year the
number of acres of county-administered other natural resources
land within the county. The department of natural resources
may, in addition to the certification of acreage, require
descriptive lists of land so certified. The commissioner of
natural resources shall determine and certify to the
commissioner of revenue by March 1 of the payment year:
(1) the number of acres and most recent appraised value of
acquired natural resources land and within each county;
(2) the number of acres of commissioner-administered
natural resources land within each county; and
(3) the number of acres of county-administered other
natural resources land within each county, based on the reports
filed by each county auditor with the commissioner of natural
resources.
The commissioner of revenue shall determine the
distributions provided for in this section using the number of
acres and appraised values certified by the commissioner of
natural resources by March 1 of the payment year.
(c) For the purposes of this section, the appraised value
of acquired natural resources land is the purchase price for the
first five years after acquisition. The appraised value of
acquired natural resources land received as a donation is the
value determined for the commissioner of natural resources by a
licensed appraiser, or the county assessor's estimated market
value if no appraisal is done. The appraised value must be
determined by the county assessor every five years after the
land is acquired.
EFFECTIVE DATE: This section applies to payments made in
calendar year 2001 and thereafter.
Sec. 12. Minnesota Statutes 1998, section 477A.13, is
amended to read:
477A.13 [TIME OF PAYMENT, DEDUCTIONS.]
Payments to the counties shall of the amounts determined
under section 477A.12 must be made by the commissioner of
revenue from the general fund during the month of July of the
year next following certification. There shall be deducted from
amounts paid any amounts paid to a county or township during the
preceding year pursuant to sections 97A.061, subdivisions 1 and
2, and 272.68, subdivision 3, with respect to the lands
certified pursuant to section 477A.12 at the time provided in
section 477A.015 for the first installment of local government
aid.
EFFECTIVE DATE: This section applies to payments made in
calendar year 2001 and thereafter.
Sec. 13. Minnesota Statutes 1998, section 477A.14, is
amended to read:
477A.14 [USE OF FUNDS.]
Forty Except as provided in section 97A.061, subdivision 5,
40 percent of the total payment to the county shall be deposited
in the county general revenue fund to be used to provide
property tax levy reduction. The remainder shall be distributed
by the county in the following priority:
(a) 37.5 cents, as adjusted for inflation under section
477A.145, for each acre of county-administered other natural
resources land shall be deposited in a resource development fund
to be created within the county treasury for use in resource
development, forest management, game and fish habitat
improvement, and recreational development and maintenance of
county-administered other natural resources land. Any county
receiving less than $5,000 annually for the resource development
fund may elect to deposit that amount in the county general
revenue fund;
(b) From the funds remaining, within 30 days of receipt of
the payment to the county, the county treasurer shall pay each
organized township 30 cents per, as adjusted for inflation under
section 477A.145, for each acre of acquired natural resources
land and 7.5 cents per, as adjusted for inflation under section
477A.145, for each acre of other natural resources land located
within its boundaries. Payments for natural resources lands not
located in an organized township shall be deposited in the
county general revenue fund. Payments to counties and townships
pursuant to this paragraph shall be used to provide property tax
levy reduction, except that of the payments for natural
resources lands not located in an organized township, the county
may allocate the amount determined to be necessary for
maintenance of roads in unorganized townships. Provided that,
if the total payment to the county pursuant to section 477A.12
is not sufficient to fully fund the distribution provided for in
this clause, the amount available shall be distributed to each
township and the county general revenue fund on a pro rata
basis; and
(c) Any remaining funds shall be deposited in the county
general revenue fund. Provided that, if the distribution to the
county general revenue fund exceeds $35,000, the excess shall be
used to provide property tax levy reduction.
EFFECTIVE DATE: This section applies to payments made in
calendar year 2001 and thereafter.
Sec. 14. [477A.145] [INFLATION ADJUSTMENT.]
In 2001 and each year thereafter, the amounts required to
be adjusted for inflation in sections 477A.12 and 477A.14 shall
be increased to an amount equal to: (1) the amount before the
inflation adjustment multiplied by (2) one plus the percentage
increase in the implicit price deflator for government
consumption expenditures and gross investment for state and
local governments prepared by the Bureau of Economic Analysis of
the United States Department of Commerce for the period
indicated below:
(i) the period starting with the first quarter of 1994 and
ending with the third quarter of the calendar year prior to the
year in which aid is paid, provided that lands acquired by the
state under chapter 84A that are designated as state parks,
state recreation areas, scientific and natural areas, or
wildlife management areas are included in the definition of
acquired natural resource land under section 477A.11 for
calculating payments in calendar year 2001 and thereafter;
(ii) otherwise the period starting with the first quarter
of 1987 and ending with the third quarter of the calendar year
prior to the year in which the aid is paid.
These adjusted amounts must be rounded to the nearest one-tenth
of a cent.
EFFECTIVE DATE: This section applies to payments made in
calendar year 2001 and thereafter.
Sec. 15. Laws 1988, chapter 645, section 3, as amended by
Laws 1999, chapter 243, article 6, section 9, 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 .0063 0.063 percent of taxable market value.
(b) .0048 0.048 percent of taxable market value of 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 0.015 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.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 16. Laws 1999, chapter 243, article 6, section 18, is
amended to read:
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 0.063 percent of market value levy described in
section 9, paragraph (a), and the 0.015 percent of taxable
market value levy described in section 9, paragraph (c), is are
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 for levies certified in the
year 2000, with the first payment to be received and taxes
payable in 2001 and thereafter. The 0.048 percent market value
levy described in section 9, paragraph (b), is effective for the
cities of Cook and Orr and the counties of St. Louis and
Koochiching for the affected parts of those counties on January
1, 1999, for levies certified in 1999 and taxes payable in 2000
and thereafter.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 17. [CAPITOL REGION WATERSHED DISTRICT LEVY LIMIT.]
The capitol region watershed district managers may levy an
annual ad valorem tax of 0.02418 percent of taxable market value
or $200,000, whichever is less, under Minnesota Statutes,
section 103D.905, subdivision 3, notwithstanding the maximum
dollar limit for the administrative fund in that subdivision.
EFFECTIVE DATE: This section is effective for taxes levied
in 2000, payable in 2001 and thereafter.
Sec. 18. [ADDITIONAL AID; LINCOLN COUNTY.]
Subdivision 1. [AID INCREASE.] For aids payable in 2000,
Lincoln county shall receive an aid payment of up to $150,000
under this section. The entire amount of this additional aid
shall be paid from the appropriation for reimbursement for
court-ordered counsel under section 477A.0121, subdivision 4,
with the December 26 payment of other aids paid under Minnesota
Statutes, section 477A.015, and shall be equal to the estimated
amount of the appropriation under Minnesota Statutes, section
477A.0121, subdivision 4, up to $150,000, that will not be spent
for public defender costs under Minnesota Statutes, section
611.27, in fiscal year 2000.
For aids payable in 2001, Lincoln county shall receive an
additional payment under this section of up to the difference
between $150,000 and what the county received under this
provision in the previous year. The entire amount of this
additional aid shall be paid from the appropriation for
reimbursement for court-ordered counsel under section 477A.0121,
subdivision 4, with the December 26 payment of other aids paid
under Minnesota Statutes, section 477A.015, and shall be equal
to the estimated amount of the appropriation under Minnesota
Statutes, section 477A.0121, subdivision 4, up to the limit
determined in this paragraph, that will not be spent for public
defender costs under Minnesota Statutes, section 611.27, in
fiscal year 2001.
The county is not limited to the purposes listed in
Minnesota Statutes, section 477A.015, for spending this aid and
may pay a portion of this aid to Lake Benton township to
reimburse the township for losses due to the Wind Tower lawsuit
settlement. The aid under this section must not be included in
calculating any aids or any limitations on levies or
expenditures under law.
EFFECTIVE DATE: This section is effective the day after
timely compliance by the governing body of Lincoln county and
its chief clerical officer with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
Sec. 19. [LOCAL GOVERNMENT AID TO CITIES; THE CITY OF ST.
CLOUD AND ST. AUGUSTA TOWNSHIP (THE CITY OF VENTURA).]
Subdivision 1. [ADDITIONAL LOCAL GOVERNMENT AID.] For aids
payable in 2001 only, an additional payment of $32,000 shall be
paid to the city of St. Cloud and an additional aid payment of
$75,000 shall be paid to St. Augusta township or its succeeding
municipal government (the city of Ventura). This aid shall be
paid out of the city aid appropriation under Minnesota Statutes,
section 477A.03, subdivision 2, paragraph (d). The aid under
this section must not be included in calculating aid paid under
Minnesota Statutes, section 477A.013, subdivision 9, or any
other law, or of any limitations on levies or expenditures.
EFFECTIVE DATE: This section is effective for aids payable
in calendar year 2001 only for the city of St. Cloud, upon
timely compliance by its governing body and its chief clerical
officer with Minnesota Statutes, section 645.021, subdivisions 2
and 3. This section is effective for aids payable in calendar
year 2001 only for St. Augusta township (city of Ventura), upon
timely compliance by its governing body and its chief clerical
officer with Minnesota Statutes, section 645.021, subdivisions 2
and 3.
Sec. 20. [LAKE OF THE WOODS AND KOOCHICHING COUNTIES;
EXPENDITURES FOR ROAD AND BRIDGE PURPOSES.]
(a) Notwithstanding Minnesota Statutes, section 163.06,
subdivisions 4 and 5, the county board of Lake of the Woods
county, by resolution, may expend the proceeds of the levy under
Minnesota Statutes, section 163.06, in any organized or
unorganized township or portion thereof in the county.
(b) Notwithstanding Minnesota Statutes, section 163.06,
subdivisions 4 and 5, the county board of Koochiching county, by
resolution, may expend the proceeds of the levy under Minnesota
Statutes, section 163.06, in any organized or unorganized
township or portion thereof in the county.
EFFECTIVE DATES: This section is effective for Lake of the
Woods county upon approval by and compliance with Minnesota
Statutes, section 645.021, subdivision 3. This section is
effective for Koochiching county upon approval by and compliance
with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 21. [ST. LOUIS COUNTY; CAPITAL IMPROVEMENT PLAN
DEFINITION.]
For St. Louis county, the St. Louis county heritage and
arts center is included in the definition of "capital
improvement" in Minnesota Statutes, section 373.40, subdivision
1, but only with respect to bonds issued before July 1, 2002.
EFFECTIVE DATE: This section is effective upon approval by
the governing body of St. Louis county, and compliance with
Minnesota Statutes, section 645.021, subdivision 3.
ARTICLE 7
MOTOR VEHICLE REGISTRATION TAX
Section 1. Minnesota Statutes 1998, section 168.013,
subdivision 1a, is amended to read:
Subd. 1a. [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger
automobiles as defined in section 168.011, subdivision 7, and
hearses, except as otherwise provided, the tax shall be $10 plus
an additional tax equal to 1.25 percent of the base value.
(b) Subject to the classification provisions herein, "base
value" means the manufacturer's suggested retail price of the
vehicle including destination charge using list price
information published by the manufacturer or determined by the
registrar if no suggested retail price exists, and shall not
include the cost of each accessory or item of optional equipment
separately added to the vehicle and the suggested retail price.
(c) If the manufacturer's list price information contains a
single vehicle identification number followed by various
descriptions and suggested retail prices, the registrar shall
select from those listings only the lowest price for determining
base value.
(d) If unable to determine the base value because the
vehicle is specially constructed, or for any other reason, the
registrar may establish such value upon the cost price to the
purchaser or owner as evidenced by a certificate of cost but not
including Minnesota sales or use tax or any local sales or other
local tax.
(e) The registrar shall classify every vehicle in its
proper base value class as follows:
FROM TO
$ 0 $199.99
200 399.99
and thereafter a series of classes successively set in brackets
having a spread of $200 consisting of such number of classes as
will permit classification of all vehicles.
(f) The base value for purposes of this section shall be
the middle point between the extremes of its class.
(g) The registrar shall establish the base value, when new,
of every passenger automobile and hearse registered prior to the
effective date of Extra Session Laws 1971, chapter 31, using
list price information published by the manufacturer or any
nationally recognized firm or association compiling such data
for the automotive industry. If unable to ascertain the base
value of any registered vehicle in the foregoing manner, the
registrar may use any other available source or method. The tax
on all previously registered vehicles shall be computed upon the
base value thus determined taking into account the depreciation
provisions of paragraph (h).
(h) Except as provided in paragraph (i), the annual
additional tax computed upon the base value as provided herein,
during the first and second years of vehicle life shall be
computed upon 100 percent of the base value; for the third and
fourth years, 90 percent of such value; for the fifth and sixth
years, 75 percent of such value; for the seventh year, 60
percent of such value; for the eighth year, 40 percent of such
value; for the ninth year, 30 percent of such value; for the
tenth year, ten percent of such value; for the 11th and each
succeeding year, the sum of $25.
In no event shall the annual additional tax be less than
$25. The total tax under this subdivision shall not exceed $189
for the first renewal period and shall not exceed $99 for
subsequent renewal periods. The total tax under this
subdivision on any vehicle filing its initial registration in
Minnesota in the second year of vehicle life shall not exceed
$189 and shall not exceed $99 for subsequent renewal periods.
The total tax under this subdivision on any vehicle filing its
initial registration in Minnesota in the third or subsequent
year of vehicle life shall not exceed $99 and shall not exceed
$99 in any subsequent renewal period.
(i) The annual additional tax under paragraph (h) on a
motor vehicle on which the first annual tax was paid before
January 1, 1990, must not exceed the tax that was paid on that
vehicle the year before.
EFFECTIVE DATE: This section is effective for taxes first
due after June 30, 2000.
Sec. 2. Minnesota Statutes 1998, section 297B.09,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL FUND SHARE.] (a) Money collected
and received under this chapter must be deposited in the state
treasury and credited to the general fund. The amounts
collected and received shall be credited as provided in this
subdivision,. and transferred from the general fund on July 15
and February 15 of each fiscal year. The commissioner of
finance must make each transfer based upon the actual receipts
of the preceding six calendar months and include the interest
earned during that six-month period. The commissioner of
finance may establish a quarterly or other schedule providing
for more frequent payments to the transit assistance fund if the
commissioner determines it is necessary or desirable to provide
for the cash flow needs of the recipients of money from the
transit assistance fund.
(b) Twenty-five Thirty-two percent of the money collected
and received under this chapter after June 30, 1990, and before
July 1, 1991, must be transferred to the highway user tax
distribution fund and the transit assistance fund for
apportionment as follows: 75 percent must be transferred to
deposited in the highway user tax distribution fund for
apportionment in the same manner and for the same purposes as
other money in that fund, and the remaining 25 68 percent of the
money must be transferred to the transit assistance fund to be
appropriated to the commissioner of transportation for transit
assistance within the state and to the metropolitan
council deposited in the general fund.
(c) The distributions under this subdivision to the highway
user tax distribution fund until June 30, 1991, and to the trunk
highway fund thereafter, must be reduced by the amount necessary
to fund the appropriation under section 41A.09, subdivision 1.
For the fiscal years ending June 30, 1988, and June 30, 1989,
the commissioner of finance, before making the transfers
required on July 15 and January 15 of each year, shall estimate
the amount required to fund the appropriation under section
41A.09, subdivision 1, for the six-month period for which the
transfer is being made. The commissioner shall then reduce the
amount transferred to the highway user tax distribution fund by
the amount of that estimate. The commissioner shall reduce the
estimate for any six-month period by the amount by which the
estimate for the previous six-month period exceeded the amount
needed to fund the appropriation under section 41A.09,
subdivision 1, for that previous six-month period. If at any
time during a six-month period in those fiscal years the amount
of reduction in the transfer to the highway user tax
distribution fund is insufficient to fund the appropriation
under section 41A.09, subdivision 1, for that period, the
commissioner shall transfer to the general fund from the highway
user tax distribution fund an additional amount sufficient to
fund the appropriation for that period, but the additional
amount so transferred to the general fund in a six-month period
may not exceed the amount transferred to the highway user tax
distribution fund for that six-month period.
EFFECTIVE DATE: This section is effective for money
collected and received after June 30, 2002.
Sec. 3. [APPROPRIATION.]
For fiscal year 2001, $149,804,000 is appropriated from the
general fund to the highway user tax distribution fund. For
fiscal year 2002, $161,723,000 is appropriated from the general
fund to the highway user tax distribution fund.
ARTICLE 8
SALES AND USE TAXES
Section 1. Minnesota Statutes 1999 Supplement, 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 62 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 on
returns due for periods beginning 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 62 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.
EFFECTIVE DATE: The portion of this section related to the
percent of the June liability that must be filed by two business
days before the end of June is effective beginning with the June
2002 liability. The remainder of this section is effective the
day following final enactment.
Sec. 2. Minnesota Statutes 1998, section 289A.60,
subdivision 14, is amended to read:
Subd. 14. [PENALTY FOR USE OF SALES TAX EXEMPTION
CERTIFICATES TO EVADE TAX.] A person who uses an exemption
certificate to buy property or purchase services that will be
used for purposes other than the exemption claimed, with the
intent to evade payment of sales tax to the seller, is subject
to a penalty of $100 for each transaction where that use of an
exemption certificate has occurred.
EFFECTIVE DATE: This section is effective for exemption
certificates used on or after July 1, 2000.
Sec. 3. Minnesota Statutes 1998, section 289A.60,
subdivision 15, is amended to read:
Subd. 15. [ACCELERATED PAYMENT OF JUNE SALES TAX
LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is required by
law to submit an estimation of June sales tax liabilities and 75
62 percent payment by a certain date, the vendor shall pay a
penalty equal to ten percent of the amount of actual June
liability required to be paid in June less the amount remitted
in June. The penalty must not be imposed, however, if the
amount remitted in June equals the lesser of 75 62 percent of
the preceding May's liability or 75 62 percent of the average
monthly liability for the previous calendar year.
EFFECTIVE DATE: This section is effective beginning with
the June 2002 liability.
Sec. 4. Minnesota Statutes 1998, section 297A.01,
subdivision 13, is amended to read:
Subd. 13. "Agricultural production," as used in section
297A.25, subdivision 9, includes, but is not limited to,
horticulture; floriculture; maple syrup harvesting; raising of
pets, fur bearing animals, research animals, farmed cervidae, as
defined in section 17.451, subdivision 2, llamas, as defined in
section 17.455, subdivision 2, ratitae, as defined in section
17.453, subdivision 3, and horses.
EFFECTIVE DATE: This section is effective for sales and
purchases made after June 30, 2000.
Sec. 5. Minnesota Statutes 1998, section 297A.01,
subdivision 15, is amended to read:
Subd. 15. "Farm machinery" means new or used machinery,
equipment, implements, accessories, and contrivances used
directly and principally in the production for sale, but not
including the processing, of livestock, dairy animals, dairy
products, poultry and poultry products, fruits,
vegetables, trees and shrubs, forage, grains and bees and apiary
products. "Farm machinery" includes:
(1) machinery for the preparation, seeding or cultivation
of soil for growing agricultural crops and sod, harvesting and
threshing of agricultural products, harvesting or mowing of sod,
and certain machinery for dairy, livestock and poultry farms;
(2) barn cleaners, milking systems, grain dryers, automatic
feeding systems and similar installations, whether or not the
equipment is installed by the seller and becomes part of the
real property;
(3) irrigation equipment sold for exclusively agricultural
use, including pumps, pipe fittings, valves, sprinklers and
other equipment necessary to the operation of an irrigation
system when sold as part of an irrigation system, whether or not
the equipment is installed by the seller and becomes part of the
real property;
(4) logging equipment, including chain saws used for
commercial logging;
(5) fencing used for the containment of farmed cervidae, as
defined in section 17.451, subdivision 2;
(6) primary and backup generator units used to generate
electricity for the purpose of operating farm machinery, as
defined in this subdivision, or providing light or space heating
necessary for the production of livestock, dairy animals, dairy
products, or poultry and poultry products; and
(7) aquaculture production equipment as defined in
subdivision 19; and
(8) equipment used for maple syrup harvesting.
Repair or replacement parts for farm machinery shall not be
included in the definition of farm machinery.
Tools, shop equipment, grain bins, feed bunks, fencing
material except fencing material covered by clause (5),
communication equipment and other farm supplies shall not be
considered to be farm machinery. "Farm machinery" does not
include motor vehicles taxed under chapter 297B, snowmobiles,
snow blowers, lawn mowers except those used in the production of
sod for sale, garden-type tractors or garden tillers and the
repair and replacement parts for those vehicles and machines.
EFFECTIVE DATE: This section is effective for sales and
purchases made after June 30, 2000.
Sec. 6. Minnesota Statutes 1998, section 297A.15, is
amended by adding a subdivision to read:
Subd. 8. [REFUND; APPROPRIATION; AGRICULTURAL PROCESSING
FACILITIES.] The tax on the gross receipts from the sale of
items exempt under section 297A.25, subdivision 87 or 90, must
be imposed and collected as if the sale were taxable and the
rate under section 297A.02, subdivision 1, applied.
Upon application by the owner of the property on forms
prescribed by the commissioner, a refund equal to the tax paid
on the gross receipts of the building materials and equipment
must be paid to the owner. In the case of materials and
equipment in which the tax was paid by a contractor, application
must be made by the owner for the sales tax paid by the
contractor. The application must include sufficient information
to permit the commissioner to verify the sales tax paid for the
project. The contractor must furnish to the owner a statement
of the cost of building materials and equipment and the sales
taxes paid on these items. The amount required to make the
refunds is annually appropriated to the commissioner. Interest
must be paid on the refund at the rate in section 270.76 from 60
days after the date the refund claim is filed with the
commissioner.
EFFECTIVE DATE: This section is effective for applications
for refund made after June 30, 2000.
Sec. 7. Minnesota Statutes 1998, section 297A.25,
subdivision 5, is amended to read:
Subd. 5. [OUTSTATE TRANSPORT OR DELIVERY.] The gross
receipts from the following sales of, and storage, use, or
consumption of, tangible personal property are exempt:
(1) property which, without intermediate use, is shipped or
transported outside Minnesota by the purchaser and thereafter
used in a trade or business or is stored, processed, fabricated
or manufactured into, attached to or incorporated into other
tangible personal property transported or shipped outside
Minnesota and thereafter used in a trade or business outside
Minnesota, and which is not thereafter returned to a point
within Minnesota, except in the course of interstate commerce
(storage shall not constitute intermediate use); provided that
the property is not subject to tax in that state or country to
which it is transported for storage or use and provided further
that sales of tangible personal property to be used in other
states or countries as part of a maintenance contract shall be
specifically exempt; or
(2) property which the seller delivers to a common carrier
for delivery outside Minnesota, places in the United States mail
or parcel post directed to the purchaser outside Minnesota, or
delivers to the purchaser outside Minnesota by means of the
seller's own delivery vehicles, and which is not thereafter
returned to a point within Minnesota, except in the course of
interstate commerce; or
(3) aircraft, as defined in section 360.511 and approved by
the Federal Aviation Administration, and which the seller
delivers to a purchaser outside Minnesota or which, without
intermediate use, is shipped or transported outside Minnesota by
the purchaser, but only if the purchaser is not a resident of
Minnesota and provided that the aircraft is not thereafter
returned to a point within Minnesota, except in the course of
interstate commerce or isolated and occasional use and will be
registered in another state or country upon its removal from
Minnesota; this exemption applies even if the purchaser takes
possession of the aircraft in Minnesota and uses the aircraft in
the state exclusively for training purposes for a period not to
exceed ten days prior to removing the aircraft from this state.
EFFECTIVE DATE: This section is effective for purchases
made after the date of final enactment.
Sec. 8. Minnesota Statutes 1999 Supplement, section
297A.25, subdivision 9, is amended to read:
Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross
receipts from the sale of and the storage, use, or consumption
of all materials, including chemicals, fuels, petroleum
products, lubricants, packaging materials, including returnable
containers used in packaging food and beverage products, feeds,
seeds, fertilizers, electricity, gas and steam, used or consumed
in agricultural or industrial production of personal property
intended to be sold ultimately at retail, whether or not the
item so used becomes an ingredient or constituent part of the
property produced are exempt. Seeds, trees, fertilizers, and
herbicides purchased for use by farmers in the Conservation
Reserve Program under United States Code, title 16, section
590h, as amended through December 31, 1991, the Integrated Farm
Management Program under section 1627 of Public Law Number
101-624, the Wheat and Feed Grain Programs under sections 301 to
305 and 401 to 405 of Public Law Number 101-624, and the
conservation reserve program under sections 103F.505 to
103F.531, are included in this exemption. Sales to a
veterinarian of materials used or consumed in the care,
medication, and treatment of horses and agricultural production
animals are exempt under this subdivision. Chemicals used for
cleaning food processing machinery and equipment are included in
this exemption. Materials, including chemicals, fuels, and
electricity purchased by persons engaged in agricultural or
industrial production to treat waste generated as a result of
the production process are included in this exemption. Such
production shall include, but is not limited to, research,
development, design or production of any tangible personal
property, manufacturing, processing (other than by restaurants
and consumers) of agricultural products whether vegetable or
animal, commercial fishing, refining, smelting, reducing,
brewing, distilling, printing, mining, quarrying, lumbering,
generating electricity and the production of road building
materials. Such production shall not include painting,
cleaning, repairing or similar processing of property except as
part of the original manufacturing process. Machinery,
equipment, implements, tools, accessories, appliances,
contrivances, furniture and fixtures, used in such production
and fuel, electricity, gas or steam used for space heating or
lighting, are not included within this exemption; however,
accessory tools, equipment and other short lived items, which
are separate detachable units used in producing a direct effect
upon the product, where such items have an ordinary useful life
of less than 12 months, are included within the exemption
provided herein. 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, and base blocks. 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.
EFFECTIVE DATE: This section is effective for sales and
purchases made after June 30, 2000.
Sec. 9. Minnesota Statutes 1999 Supplement, section
297A.25, subdivision 11, is amended to read:
Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from
all sales, including sales in which title is retained by a
seller or a vendor or is assigned to a third party under an
installment sale or lease purchase agreement under section
465.71, of tangible personal property to, and all storage, use
or consumption of such property by, the United States and its
agencies and instrumentalities, the University of Minnesota,
state universities, community colleges, technical colleges,
state academies, the Perpich center for arts education, an
instrumentality of a political subdivision that is accredited as
an optional/special function school by the North Central
Association of Colleges and Schools, school districts, public
libraries, public library systems, multicounty, multitype
library systems as defined in section 134.001, county law
libraries under chapter 134A, state agency libraries, the state
library under section 480.09, and the legislative reference
library are exempt.
As used in this subdivision, "school districts" means
public school entities and districts of every kind and nature
organized under the laws of the state of Minnesota, including,
without limitation, school districts, intermediate school
districts, education districts, service cooperatives, secondary
vocational cooperative centers, special education cooperatives,
joint purchasing cooperatives, telecommunication cooperatives,
regional management information centers, and any instrumentality
of a school district, as defined in section 471.59.
Sales exempted by this subdivision include sales under
section 297A.01, subdivision 3, paragraph (f).
Sales to hospitals and nursing homes owned and operated by
political subdivisions of the state are exempt under this
subdivision.
Sales of supplies and equipment used in the operation of an
ambulance service owned and operated by a political subdivision
of the state are exempt under this subdivision provided that the
supplies and equipment are used in the course of providing
medical care. Sales to a political subdivision of repair and
replacement parts for emergency rescue vehicles and fire trucks
and apparatus are exempt under this subdivision.
Sales to a political subdivision of machinery and
equipment, except for motor vehicles, used directly for mixed
municipal solid waste management services at a solid waste
disposal facility as defined in section 115A.03, subdivision 10,
are exempt under this subdivision.
Sales to political subdivisions of chore and homemaking
services to be provided to elderly or disabled individuals are
exempt.
Sales to a town of gravel and of machinery, equipment, and
accessories, except motor vehicles, used exclusively for road
and bridge maintenance, and leases of motor vehicles exempt from
tax under section 297B.03, clause (10), are exempt.
Sales of telephone services to the department of
administration that are used to provide telecommunications
services through the intertechnologies revolving fund are exempt
under this subdivision.
This exemption shall not apply to building, construction or
reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type
of contract with a guaranteed maximum price covering both labor
and materials for use in the construction, alteration, or repair
of a building or facility. This exemption does not apply to
construction materials purchased by tax exempt entities or their
contractors to be used in constructing buildings or facilities
which will not be used principally by the tax exempt entities.
This exemption does not apply to the leasing of a motor
vehicle as defined in section 297B.01, subdivision 5, except for
leases entered into by the United States or its agencies or
instrumentalities.
The tax imposed on sales to political subdivisions of the
state under this section applies to all political subdivisions
other than those explicitly exempted under this subdivision,
notwithstanding section 115A.69, subdivision 6, 116A.25,
360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2,
469.127, 473.448, 473.545, or 473.608 or any other law to the
contrary enacted before 1992.
Sales exempted by this subdivision include sales made to
other states or political subdivisions of other states, if the
sale would be exempt from taxation if it occurred in that state,
but do not include sales under section 297A.01, subdivision 3,
paragraphs (c) and (e).
EFFECTIVE DATE: This section is effective for sales and
purchases occurring after June 30, 2000.
Sec. 10. Minnesota Statutes 1998, section 297A.25,
subdivision 16, is amended to read:
Subd. 16. [SALES TO NONPROFIT GROUPS.] The gross receipts
from the sale of tangible personal property to, and the storage,
use or other consumption of such property by, any corporation,
society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational
purposes if the property purchased is to be used in the
performance of charitable, religious, or educational functions,
or any senior citizen group or association of groups that in
general limits membership to persons who are either (1) age 55
or older, or (2) physically disabled, and is organized and
operated exclusively for pleasure, recreation, and other
nonprofit purposes, no part of the net earnings of which inures
to the benefit of any private shareholders, are exempt. For
purposes of this subdivision, charitable purpose includes the
maintenance of a cemetery owned by a religious organization.
Sales exempted by this subdivision include sales pursuant to
section 297A.01, subdivision 3, paragraphs (d) and (f). This
exemption shall not apply to building, construction, or
reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type
of contract with a guaranteed maximum price covering both labor
and materials for use in the construction, alteration, or repair
of a building or facility. This exemption does not apply to
construction materials purchased by tax exempt entities or their
contractors to be used in constructing buildings or facilities
which will not be used principally by the tax exempt entities.
This exemption does not apply applies to the leasing of a motor
vehicle as defined in section 297B.01, subdivision 5, only if
the vehicle is:
(1) a truck, as defined in section 168.011, a bus, as
defined in section 168.011, or a passenger automobile, as
defined in section 168.011, if the automobile is designed and
used for carrying more than nine persons including the driver;
and
(2) intended to be used primarily to transport tangible
personal property or individuals, other than employees, to whom
the organization provides service in performing its charitable,
religious, or educational purpose.
EFFECTIVE DATE: This section is effective for sales and
purchases occurring after June 30, 2000.
Sec. 11. Minnesota Statutes 1998, section 297A.25,
subdivision 34, is amended to read:
Subd. 34. [MOTOR VEHICLES.] The gross receipts from the
sale or use of any motor vehicle taxable under the provisions of
the sales tax on motor vehicles laws of Minnesota shall be
exempt from taxation under this chapter. Notwithstanding
subdivision 11, the exemption provided under this subdivision
remains in effect for motor vehicles purchased or leased by
political subdivisions of the state if the vehicles are exempt
from registration under section 168.012, subdivision 1,
paragraph (b), or exempt from taxation under section 473.448.
EFFECTIVE DATE: This section is retroactively effective
July 1, 1997.
Sec. 12. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 84. [MATERIALS USED TO MAKE RESIDENTIAL PROPERTY
HANDICAPPED ACCESSIBLE.] The gross receipts from the sale to,
and the storage, use, or consumption of building materials and
equipment to a nonprofit organization is exempt if:
(1) the materials and equipment are used or incorporated
into modifying an existing residential structure to make it
handicapped accessible; and
(2) the materials and equipment used in the modification
would qualify for an exemption under either subdivision 20 or 43
if made by the current owner of the residence.
For purposes of this subdivision, "nonprofit organization"
means any nonprofit corporation, society, association,
foundation, or institution organized and operated exclusively
for charitable, religious, educational, or civic purposes; or a
veterans' group exempt from federal taxation under section
501(c), clause (19), of the Internal Revenue Code.
EFFECTIVE DATE: This section is effective for sales and
purchases occurring after June 30, 2000.
Sec. 13. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 85. [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and
related services used in the maintenance of cemetery grounds are
exempt. For purposes of this subdivision, "lawn care and
related services" means the services listed in section 297A.01,
subdivision 3, paragraph (i), clause (vi), and "cemetery" means
a cemetery for human burial.
EFFECTIVE DATE: This section is effective for sales and
purchases occurring after June 30, 2000.
Sec. 14. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 86. [PATENT, TRADEMARK, AND COPYRIGHT DRAWINGS AND
DOCUMENTS.] The gross receipts from the sale of, and use,
storage, distribution, or consumption of a drawing, diagram, or
similar or related document or a copy of such a document are
exempt if the document:
(1) is produced and sold by a patent drafter; and
(2) is for use in:
(i) a patent, trademark, or copyright application to be
filed with government agencies;
(ii) an application to the federal Food and Drug
Administration for approval of a medical device; or
(iii) a judicial or quasi-judicial proceeding, including
mediation and arbitration, relating to the validity of or legal
rights under a patent, trademark, or copyright.
For purposes of this subdivision, a "patent drafter" is a
person who prepares illustrative documents required in the
preparation of intellectual property applications.
EFFECTIVE DATE: This section is effective for sales, use,
storage, distribution, or consumption occurring after June 30,
2000.
Sec. 15. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 88. [MACHINERY AND EQUIPMENT FOR SKI AREAS.] The
gross receipts from the sale, storage, use, or consumption of
tangible personal property used or consumed primarily and
directly for tramways at ski areas or in snowmaking and
snow-grooming operations at ski hills, ski slopes, or ski
trails, including machinery, equipment, fuel, electricity, and
water additives used in the production and maintenance of
machine-made snow, are exempt.
EFFECTIVE DATE: This section is effective for sales and
purchases made after June 30, 2000.
Sec. 16. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 89. [FEED FOR POULTRY RAISED FOR HUMAN CONSUMPTION.]
The gross receipts from the sale of, and storage, use, or
consumption of poultry feed is exempt if the poultry is raised
for human consumption.
EFFECTIVE DATE: This section is effective for sales and
purchases made after June 30, 2000.
Sec. 17. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 90. [CONSTRUCTION MATERIALS AND EQUIPMENT;
AGRICULTURAL PROCESSING FACILITY.] Materials, supplies, and
equipment used or consumed in the construction and initial
equipping of an agricultural pork processing facility are exempt
from the tax imposed under this chapter provided that the
following conditions are met:
(1) the construction and equipping of the facility will be
at least $4,000,000;
(2) the facility is owned and operated by a cooperative
organized under chapter 308A; and
(3) the facility will have a maximum daily processing
capacity of at least 400 hogs.
The exemption applies regardless of whether the materials,
supplies, and equipment are purchased by the owner or by a
contractor, subcontractor, or builder. The tax must be
calculated and paid at the time of purchase and a refund applied
for in the manner prescribed in section 297A.15, subdivision 8.
EFFECTIVE DATE: This section is effective for sales and
purchases made after January 1, 2000, and before December 31,
2000.
Sec. 18. Minnesota Statutes 1998, section 297A.25, is
amended by adding a subdivision to read:
Subd. 87. [CONSTRUCTION MATERIALS AND EQUIPMENT; PORK AND
BEEF AGRICULTURAL PROCESSING FACILITY.] Materials, supplies, and
equipment used or consumed in the construction and initial
equipping of an agricultural processing facility are exempt from
the tax imposed under this chapter provided that the following
conditions are met:
(1) the construction and equipping of the facility will be
at least $1,500,000;
(2) the facility is owned and operated by a C corporation,
as defined in section 1361(a)(2) of the Internal Revenue Code of
1986, with fewer than 20 shareholders of which at least one-half
of them are full-time or part-time farmers;
(3) the facility will have a weekly processing capacity of
at least 50 hogs and 30 beef animals. The exemption applies
regardless of whether the materials, supplies, and equipment are
purchased by the owner or by a contractor, subcontractor, or
builder. The tax must be calculated and paid at the time of
purchase and a refund applied for in the manner prescribed in
section 297A.15, subdivision 8.
EFFECTIVE DATE: This section is effective for sales and
purchases made after December 1, 1999, and before December 31,
2000.
Sec. 19. Minnesota Statutes 1998, section 297B.01,
subdivision 7, is amended to read:
Subd. 7. [SALE, SELLS, SELLING, PURCHASE, PURCHASED, OR
ACQUIRED.] "Sale," "sells," "selling," "purchase," "purchased,"
or "acquired" means any transfer of title of any motor vehicle,
whether absolutely or conditionally, for a consideration in
money or by exchange or barter for any purpose other than resale
in the regular course of business. Any motor vehicle utilized
by the owner only by leasing such vehicle to others or by
holding it in an effort to so lease it, and which is put to no
other use by the owner other than resale after such lease or
effort to lease, shall be considered property purchased for
resale. The terms also shall include any transfer of title or
ownership of a motor vehicle by way of gift or by any other
manner or by any other means whatsoever, for or without
consideration, except that these terms shall not include:
(a) the acquisition of a motor vehicle by inheritance from
or by bequest of, a decedent who owned it;
(b) the transfer of a motor vehicle which was previously
licensed in the names of two or more joint tenants and
subsequently transferred without monetary consideration to one
or more of the joint tenants;
(c) the transfer of a motor vehicle by way of gift between
a husband and wife or parent and child individuals, when the
transfer is with no monetary or other consideration or
expectation of consideration and the parties to the transfer
submit an affidavit to that effect at the time the title
transfer is recorded;
(d) the voluntary or involuntary transfer of a motor
vehicle between a husband and wife in a divorce proceeding; or
(e) the transfer of a motor vehicle by way of a gift to an
organization that is exempt from federal income taxation under
section 501(c)(3) of the Internal Revenue Code, as amended
through December 31, 1996, when the motor vehicle will be used
exclusively for religious, charitable, or educational purposes.
EFFECTIVE DATE: This section is effective for
registrations after June 30, 2000.
Sec. 20. Minnesota Statutes 1998, section 297B.03, is
amended to read:
297B.03 [EXEMPTIONS.]
There is specifically exempted from the provisions of this
chapter and from computation of the amount of tax imposed by it
the following:
(1) Purchase or use, including use under a lease purchase
agreement or installment sales contract made pursuant to section
465.71, of any motor vehicle by the United States and its
agencies and instrumentalities and by any person described in
and subject to the conditions provided in section 297A.25,
subdivision 18.
(2) Purchase or use of any motor vehicle by any person who
was a resident of another state at the time of the purchase and
who subsequently becomes a resident of Minnesota, provided the
purchase occurred more than 60 days prior to the date such
person began residing in the state of Minnesota.
(3) Purchase or use of any motor vehicle by any person
making a valid election to be taxed under the provisions of
section 297A.211.
(4) Purchase or use of any motor vehicle previously
registered in the state of Minnesota when such transfer
constitutes a transfer within the meaning of section 118, 331,
332, 336, 337, 338, 351 or, 355, 368, 721, 731, 1031, 1033, or
1563(a) of the Internal Revenue Code of 1986, as amended through
December 31, 1988 1999.
(5) Purchase or use of any vehicle owned by a resident of
another state and leased to a Minnesota based private or for
hire carrier for regular use in the transportation of persons or
property in interstate commerce provided the vehicle is titled
in the state of the owner or secured party, and that state does
not impose a sales tax or sales tax on motor vehicles used in
interstate commerce.
(6) Purchase or use of a motor vehicle by a private
nonprofit or public educational institution for use as an
instructional aid in automotive training programs operated by
the institution. "Automotive training programs" includes motor
vehicle body and mechanical repair courses but does not include
driver education programs.
(7) Purchase of a motor vehicle for use as an ambulance by
an ambulance service licensed under section 144E.10.
(8) Purchase of a motor vehicle by or for a public library,
as defined in section 134.001, subdivision 2, as a bookmobile or
library delivery vehicle.
(9) Purchase of a ready-mixed concrete truck.
(10) Purchase or use of a motor vehicle by a town for use
exclusively for road maintenance, including snowplows and dump
trucks, but not including automobiles, vans, or pickup trucks.
(11) Purchase or use of a motor vehicle by a corporation,
society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational
purposes, but only if the vehicle is:
(i) a truck, as defined in section 168.011, a bus, as
defined in section 168.011, or a passenger automobile, as
defined in section 168.011, if the automobile is designed and
used for carrying more than nine persons including the driver;
and
(ii) intended to be used primarily to transport tangible
personal property or individuals, other than employees, to whom
the organization provides service in performing its charitable,
religious, or educational purpose.
EFFECTIVE DATE: This section is effective for sales and
purchases occurring after June 30, 2000, except that the new
language in clause (4) is effective the day following final
enactment.
Sec. 21. [LOCAL TAXES ON MOTOR VEHICLES.]
Subdivision 1. [SALES TAX PROHIBITED; PHASE-OUT.] (a)
Except as provided in paragraph (b), after June 30, 2000, no
home rule charter or statutory city, county, or other political
subdivision may impose a tax on the sale, transfer, or use of a
motor vehicle that exceeds the tax authorized under subdivision
2.
(b) If, on March 8, 2000, a tax was in effect in a home
rule charter or statutory city, county, or other political
subdivision that exceeded the limit imposed under subdivision 2,
the rate of that tax is reduced as follows:
(1) for sales or transfers after December 31, 2000, and
before January 1, 2002, the tax rate in effect on March 8, 2000,
is reduced by 25 percent;
(2) for sales or transfers after December 31, 2001, and
before January 1, 2003, the tax rate in effect on March 8, 2000,
is reduced by 50 percent; and
(3) for sales or transfers after December 31, 2002, and
before January 1, 2004, the tax rate in effect on March 8, 2000,
is reduced by 75 percent.
For sales or transfers after December 31, 2003, the political
subdivision may impose no tax except as authorized under
subdivision 2.
Subd. 2. [EXCISE TAX ON MOTOR VEHICLES AUTHORIZED.]
Notwithstanding Minnesota Statutes, section 477A.016, or any
other provision of law, ordinance, or city charter, if a sales
and use tax on motor vehicles that was imposed by a political
subdivision is terminated under subdivision 1, the political
subdivision may impose by ordinance an excise tax of up to $20
per motor vehicle, as defined by ordinance, that was purchased
or acquired from any person engaged within the territory of the
political subdivision in the business of selling motor vehicles
at retail. The proceeds of the tax must be used for the
purposes for which the tax terminated under subdivision 1 was
used.
EFFECTIVE DATE: This section is effective July 1, 2000.
Sec. 22. [DEVELOPMENT OF SALES AND USE TAX COLLECTION
SYSTEM.]
Subdivision 1. [AUTHORIZATION TO ENTER INTO MULTISTATE
DISCUSSIONS.] The commissioner of revenue may enter into
discussions with states regarding development of a multistate,
voluntary, streamlined system for sales and use tax collection
and administration. These discussions will focus on development
of a system that is capable of determining whether a transaction
is taxable or exempt, the appropriate tax rate applied to the
transaction, and the total tax due on the transaction, and shall
provide a method for collecting and remitting sales and use
taxes to the state. The system may provide compensation for the
costs of collecting and remitting sales and use taxes.
Discussions between the department and other states may result
in developing and issuing a joint request for information from
public and private potential parties. The commissioner must
publish the notices in the State Register.
Subd. 2. [LIMITED TEST AUTHORIZATION.] (a) The
commissioner may participate in a sales tax pilot project with
other states and selected businesses to test a means for
simplifying sales and use tax administration, and may enter into
joint agreements for that purpose.
(b) Agreements to participate in the test will establish
provisions for the administration, imposition, and collection of
sales and use taxes resulting in revenues paid by the taxpayer
that are the same as would be paid under existing law.
(c) Parties to the agreements are excused from complying
with the provisions of Minnesota Statutes, chapters 289A and
297A, except for provisions setting tax rates and providing for
tax exemptions, to the extent a different procedure is required
by the agreements.
(d) Agreements authorized under this section terminate no
later than December 31, 2001.
Subd. 3. [DISCLOSURE.] Any agreements entered into under
subdivision 1 or 2 are subject to the provisions of Minnesota
Statutes, chapter 270B.
Subd. 4. [REPORT ON PROJECT.] By March 1, 2002, the
commissioner shall report to the chairs of the house of
representatives tax committee and the senate committee on
taxes. The report must describe the status of multistate
discussions conducted under subdivision 1 and, if a proposed
system has been agreed upon by participating states, must also
recommend whether the state should participate in the system.
EFFECTIVE DATE: This section is effective the day
following final enactment.
ARTICLE 9
HEALTH CARE TAXES
Section 1. Minnesota Statutes 1998, section 60A.15,
subdivision 1, is amended to read:
Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or
before April 1, June 1, and December 1 of each year, every
domestic and foreign company, including town and farmers' mutual
insurance companies, domestic mutual insurance companies, marine
insurance companies, health maintenance organizations, community
integrated service networks, and nonprofit health service plan
corporations, shall pay to the commissioner of revenue
installments equal to one-third of the insurer's total estimated
tax for the current year. Except as provided in paragraphs (d),
(e), (h), and (i), installments must be based on a sum equal to
two percent of the premiums described in paragraph (b).
(b) Installments under paragraph (a), (d), or (e) are
percentages of gross premiums less return premiums on all direct
business received by the insurer in this state, or by its agents
for it, in cash or otherwise, during such year.
(c) Failure of a company to make payments of at least
one-third of either (1) the total tax paid during the previous
calendar year or (2) 80 percent of the actual tax for the
current calendar year shall subject the company to the penalty
and interest provided in this section, unless the total tax for
the current tax year is $500 or less.
(d) For health maintenance organizations, nonprofit health
service plan corporations, and community integrated service
networks, the installments must be based on an amount determined
under paragraph (h) or (i).
(e) For purposes of computing installments for town and
farmers' mutual insurance companies and for mutual property
casualty companies with total assets on December 31, 1989, of
$1,600,000,000 or less, the following rates apply:
(1) for all life insurance, two percent;
(2) for town and farmers' mutual insurance companies and
for mutual property and casualty companies with total assets of
$5,000,000 or less, on all other coverages, one percent; and
(3) for mutual property and casualty companies with total
assets on December 31, 1989, of $1,600,000,000 or less, on all
other coverages, 1.26 percent.
(f) If the aggregate amount of premium tax payments under
this section and the fire marshal tax payments under section
299F.21 made during a calendar year is equal to or exceeds
$120,000, all tax payments in the subsequent calendar year must
be paid by means of a funds transfer as defined in section
336.4A-104, paragraph (a). The funds transfer payment date, as
defined in section 336.4A-401, must be on or before the date the
payment is due. If the date the payment is due is not a funds
transfer business day, as defined in section 336.4A-105,
paragraph (a), clause (4), the payment date must be on or before
the funds transfer business day next following the date the
payment is due.
(g) Premiums under medical assistance, general assistance
medical care, the MinnesotaCare program, and the Minnesota
comprehensive health insurance plan and all payments, revenues,
and reimbursements received from the federal government for
Medicare-related coverage as defined in section 62A.31,
subdivision 3, paragraph (e), are not subject to tax under this
section.
(h) For calendar years 1997, 1998, and 1999, the
installments for health maintenance organizations, community
integrated service networks, and nonprofit health service plan
corporations must be based on an amount equal to one percent of
premiums described under paragraph (b). Health maintenance
organizations, community integrated service networks, and
nonprofit health service plan corporations that have met the
cost containment goals established under section 62J.04 in the
individual and small employer market for calendar year 1996 are
exempt from payment of the tax imposed under this section for
premiums paid after March 30, 1997, and before April 1, 1998.
Health maintenance organizations, community integrated service
networks, and nonprofit health service plan corporations that
have met the cost containment goals established under section
62J.04 in the individual and small employer market for calendar
year 1997 are exempt from payment of the tax imposed under this
section for premiums paid after March 30, 1998, and before April
1, 1999. Health maintenance organizations, community integrated
service networks, and nonprofit health service plan corporations
that have met the cost containment goals established under
section 62J.04 in the individual and small employer market for
calendar year 1998 are exempt from payment of the tax imposed
under this section for premiums paid after March 30, 1999, and
before January 1, 2000 Health maintenance organizations,
community integrated service networks, and nonprofit health
service plan corporations are exempt from the tax imposed under
this section on premiums received in calendar years 2001 and
2002.
(i) For calendar years after 1999 2002, the commissioner of
finance shall determine the balance of the health care access
fund on September 1 of each year beginning September 1, 1999.
If the commissioner determines that there is no structural
deficit for the next fiscal year, no tax shall be imposed under
paragraph (d) for the following calendar year. If the
commissioner determines that there will be a structural deficit
in the fund for the following fiscal year, then the
commissioner, in consultation with the commissioner of revenue,
shall determine the amount needed to eliminate the structural
deficit and a tax shall be imposed under paragraph (d) for the
following calendar year. The commissioner shall determine the
rate of the tax as either one-quarter of one percent, one-half
of one percent, three-quarters of one percent, or one percent of
premiums described in paragraph (b), whichever is the lowest of
those rates that the commissioner determines will produce
sufficient revenue to eliminate the projected structural
deficit. The commissioner of finance shall publish in the State
Register by October 1 of each year the amount of tax to be
imposed for the following calendar year. In determining the
structural balance of the health care access fund for fiscal
years 2000 and 2001, the commissioner shall disregard the
transfer amount from the health care access fund to the general
fund for expenditures associated with the services provided to
pregnant women and children under the age of two enrolled in the
MinnesotaCare program a rate of one percent applies to premiums
of health maintenance organizations, community-integrated
service networks, and nonprofit health service plan corporations.
(j) In approving the premium rates as required in sections
62L.08, subdivision 8, and 62A.65, subdivision 3, the
commissioners of health and commerce shall ensure that any
exemption from the tax as described in paragraphs (h) and (i) is
reflected in the premium rate.
EFFECTIVE DATE: This section is effective for taxes on
premiums received after December 31, 2000.
Sec. 2. Minnesota Statutes 1998, section 295.50,
subdivision 9b, is amended to read:
Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means
inpatient and outpatient services and other goods and services
provided by hospitals, surgical centers, or health care
providers. They include the following health care goods and
services provided to a patient or consumer:
(1) bed and board;
(2) nursing services and other related services;
(3) use of hospitals, surgical centers, or health care
provider facilities;
(4) medical social services;
(5) drugs, biologicals, supplies, appliances, and
equipment;
(6) other diagnostic or therapeutic items or services;
(7) medical or surgical services;
(8) items and services furnished to ambulatory patients not
requiring emergency care;
(9) emergency services; and
(10) covered services listed in section 256B.0625 and in
Minnesota Rules, parts 9505.0170 to 9505.0475.
(b) "Patient services" does not include:
(1) services provided to nursing homes licensed under
chapter 144A; and
(2) examinations for purposes of utilization reviews,
insurance claims or eligibility, litigation, and employment,
including reviews of medical records for those purposes.
EFFECTIVE DATE: This section is effective for payments
received on or after January 1, 2000.
Sec. 3. Minnesota Statutes 1999 Supplement, 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), (10), or (13), or (20);
(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), (10), or (13), or (20);
(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;
(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 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;
(19) payments received for services provided by: assisted
living programs and congregate housing programs; and
(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.
(20) payments received under the federal Employees Health
Benefits Act, United States Code, title 5, section 8909(f), as
amended by the Omnibus Reconciliation Act of 1990.
(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.
EFFECTIVE DATE: This section is effective for payments
received on or after January 1, 2000.
Sec. 4. Minnesota Statutes 1998, section 295.58, is
amended to read:
295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.]
The commissioner shall deposit all revenues, including
penalties and interest, derived from the taxes imposed by
sections 295.50 to 295.57 and from the insurance premiums tax on
health maintenance organizations, community integrated service
networks, and nonprofit health service plan corporations in the
health care access fund in the state treasury. Refunds of
overpayments must be paid from the health care access fund in
the state treasury. There is annually appropriated from the
health care access fund to the commissioner of revenue the
amount necessary to make any refunds required under section
295.54 this chapter.
EFFECTIVE DATE: This section is effective for refunds made
on or after January 1, 1999.
ARTICLE 10
SPECIAL TAXES
Section 1. Minnesota Statutes 1998, section 115A.557,
subdivision 3, is amended to read:
Subd. 3. [ELIGIBILITY TO RECEIVE MONEY.] (a) To be
eligible to receive money distributed by the director under this
section, a county shall within one year of October 4, 1989:
(1) create a separate account in its general fund to credit
the money; and
(2) set up accounting procedures to ensure that money in
the separate account is spent only for the purposes in
subdivision 2.
(b) In each following year, each county shall also:
(1) have in place an approved solid waste management plan
or master plan including a recycling implementation strategy
under section 115A.551, subdivision 7, and a household hazardous
waste management plan under section 115A.96, subdivision 6, by
the dates specified in those provisions;
(2) submit a report by April 1 of each year to the director
detailing for the previous calendar year:
(i) how the money was spent including, but not limited to,
specific information on the number of employees performing SCORE
planning, oversight, and administration; the percentage of those
employees' total work time allocated to SCORE planning,
oversight, and administration; the specific duties and
responsibilities of those employees; and the amount of staff
salary for these SCORE duties and responsibilities of the
employees; and (ii) the resulting gains achieved in solid waste
management practices during the previous calendar year; and
(3) provide evidence to the director that local revenue
equal to 25 percent of the money sought for distribution under
this section will be spent for the purposes in subdivision 2.
(c) The director shall withhold all or part of the funds to
be distributed to a county under this section if the county
fails to comply with this subdivision and subdivision 2.
Sec. 2. Minnesota Statutes 1999 Supplement, section
287.01, subdivision 2, is amended to read:
Subd. 2. [AMENDMENT.] "Amendment" means generally a
document that alters an existing mortgage without securing a new
debt, or increasing the amount of an existing debt; and, that
does not, in the case of a multistate mortgage described in
section 287.05, subdivision 1, paragraph (b), result in an
increased percentage of the real property encumbered by the
mortgage being located in this state. Specifically, A document
is considered an amendment to the extent it merely does if it
meets the definition in this subdivision, including documents
that do any one or any combination more of the following:
(i) extends the time for payment of the unpaid portion of
the original debt;
(ii) changes the rate of interest applicable to the unpaid
portion of the original debt;
(iii) adds additional real property as security for the
unpaid portion of the original debt;
(iv) releases some but not all of the real property serving
as security for the unpaid portion of the debt;
(v) replaces all the real property serving as security for
the unpaid portion of the debt with other real property
regardless of value;
(vi) replaces a party previously bound by the mortgage with
a new party who becomes bound by the same amended mortgage; or
(vii) reduces the amount of the debt secured by real
property located in this state, or in the case of a multistate
mortgage described in section 287.05, subdivision 1, paragraph
(b), reduces the percentage of real property encumbered by the
mortgage that is located in this state.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 1999 Supplement, section
297E.02, subdivision 1, is amended to read:
Subdivision 1. [IMPOSITION.] A tax is imposed on all
lawful gambling other than (1) pull-tab deals or games; (2)
tipboard deals or games; and (3) items listed in section
297E.01, subdivision 8, clauses (4) and (5), at the rate of 9
8.5 percent on the gross receipts as defined in section 297E.01,
subdivision 8, less prizes actually paid. The tax imposed by
this subdivision is in lieu of the tax imposed by section
297A.02 and all local taxes and license fees except a fee
authorized under section 349.16, subdivision 8, or a tax
authorized under subdivision 5.
The tax imposed under this subdivision is payable by the
organization or party conducting, directly or indirectly, the
gambling.
EFFECTIVE DATE: This section is effective July 1, 2000.
Sec. 4. Minnesota Statutes 1998, section 297E.02, is
amended by adding a subdivision to read:
Subd. 2a. [TAX CREDIT FOR CERTAIN RAFFLES.] An
organization may claim a credit equal to the tax reported under
subdivision 1 resulting from a raffle the net proceeds of which
have been used exclusively for the purposes of section 349.12,
subdivision 25, paragraph (a), clause (2). The organization
claiming the credit must do so on the monthly gambling tax
return on which the raffle activity is reported under
subdivision 1.
EFFECTIVE DATE: This section is effective August 1, 2000.
Sec. 5. Minnesota Statutes 1999 Supplement, 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 1.8 1.7 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 1.8 1.7 percent of the face value of the unsold
pull-tab or tipboard tickets, provided that the refund or credit
will be 1.85 1.75 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 2000 2001 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.
EFFECTIVE DATE: This section is effective July 1, 2000.
Sec. 6. Minnesota Statutes 1999 Supplement, 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 1.8 1.7 percent of the
amount over $500,000, but
not over $700,000
Over $700,000, but not over
$900,000 $3,600 $3,400 plus 3.6
3.4 percent of the amount
over $700,000, but
not over $900,000
Over $900,000 $10,800 $10,200 plus 5.4
5.1 percent of the
amount over $900,000
EFFECTIVE DATE: This section is effective July 1, 2000.
Sec. 7. Minnesota Statutes 1998, section 297F.01,
subdivision 7, is amended to read:
Subd. 7. [CONSUMER.] "Consumer" means any person an
individual who has title to or possession of cigarettes or
tobacco products in storage, for use or other personal
consumption in this state rather than for sale.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 8. Minnesota Statutes 1998, section 297F.01, is
amended by adding a subdivision to read:
Subd. 9a. [INVOICE.] "Invoice" means a detailed list of
cigarettes and tobacco products purchased or sold in this state
that contains the following information:
(1) name of seller;
(2) name of purchaser;
(3) date of sale;
(4) invoice number;
(5) itemized list of goods sold including brands of
cigarettes and number of cartons of each brand, unit price, and
identification of tobacco products by name, quantity, and unit
price; and
(6) any rebates, discounts, or other reductions.
EFFECTIVE DATE: This section is effective July 1, 2000.
Sec. 9. Minnesota Statutes 1998, section 297F.01,
subdivision 14, is amended to read:
Subd. 14. [RETAILER.] "Retailer" means a person required
to be licensed under chapter 461 engaged in this state in the
business of selling, or offering to sell, cigarettes or tobacco
products to consumers.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 1998, section 297F.01,
subdivision 17, is amended to read:
Subd. 17. [STAMP.] "Stamp" means the adhesive stamp
supplied by the commissioner of revenue for use on cigarette
packages or any other indicia adopted by the commissioner to
indicate that the tax has been paid.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 11. Minnesota Statutes 1998, section 297F.01, is
amended by adding a subdivision to read:
Subd. 21a. [UNLICENSED SELLER.] "Unlicensed seller" means
anyone who is not licensed under section 297F.03 or 461.12 to
sell the particular product to the purchaser or possessor of the
product.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 12. Minnesota Statutes 1998, section 297F.08,
subdivision 2, is amended to read:
Subd. 2. [TAX DUE; CIGARETTES.] Notwithstanding any other
provisions of this chapter, the tax due on the return is based
upon actual heat-applied stamps purchased during the reporting
period.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 13. Minnesota Statutes 1998, section 297F.08,
subdivision 5, is amended to read:
Subd. 5. [DEPOSIT OF PROCEEDS.] The commissioner shall use
the amounts appropriated by law to purchase heat-applied stamps
for resale. The commissioner shall charge the purchasers for
the costs of the stamps along with the tax value plus shipping
costs. The costs recovered along with shipping costs must be
deposited into the general fund.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 14. Minnesota Statutes 1998, section 297F.08,
subdivision 8, is amended to read:
Subd. 8. [SALE OF STAMPS.] The commissioner may sell
heat-applied stamps on a credit basis under conditions
prescribed by the commissioner. The commissioner shall sell the
stamps at a price which includes the tax after giving effect to
the discount provided in subdivision 7. The commissioner shall
recover the actual costs of the stamps from the distributor.
The commissioner shall annually establish the maximum amount of
heat-applied stamps that may be purchased each month.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 15. Minnesota Statutes 1999 Supplement, section
297F.08, subdivision 8a, is amended to read:
Subd. 8a. [REVOLVING ACCOUNT.] A heat-applied cigarette
tax stamp revolving account is created. The commissioner shall
use the amounts in this fund to purchase heat-applied stamps for
resale. The commissioner shall charge distributors for the tax
value of the stamps they receive along with the commissioner's
cost to purchase the stamps and ship them to the distributor.
The stamp purchase and shipping costs recovered must be credited
to the revolving account and are appropriated to the
commissioner for the further purchases and shipping costs. The
revolving account is initially funded by a $40,000 transfer from
the department of revenue.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 16. Minnesota Statutes 1998, section 297F.08,
subdivision 9, is amended to read:
Subd. 9. [TAX STAMPING MACHINES.] The commissioner shall
require any person licensed as a distributor to stamp packages
with a heat-applied tax stamping machine, approved by the
commissioner, which shall be provided by the distributor. The
commissioner shall also supervise and check the operation of the
machines and shall provide for the payment of the tax on any
package so stamped, subject to the discount provided in
subdivision 7. If the commissioner finds that a stamping
machine is not affixing a legible stamp on the package, the
commissioner may order the distributor to immediately cease the
stamping process until the machine is functioning properly.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 17. Minnesota Statutes 1998, section 297F.09,
subdivision 1, is amended to read:
Subdivision 1. [MONTHLY RETURN; CIGARETTE DISTRIBUTOR.] On
or before the 18th day of each calendar month, a distributor
with a place of business in this state shall file a return with
the commissioner showing the quantity of cigarettes manufactured
or brought in from outside the state or purchased during the
preceding calendar month and the quantity of cigarettes sold or
otherwise disposed of in this state and outside this state
during that month. A licensed distributor outside this state
shall in like manner file a return showing the quantity of
cigarettes shipped or transported into this state during the
preceding calendar month. Returns must be made in the form and
manner prescribed by the commissioner and must contain any other
information required by the commissioner. The return must be
accompanied by a remittance for the full unpaid tax liability
shown by it. The return for the May liability and 75 percent of
the estimated June liability is due on the date payment of the
tax is due.
EFFECTIVE DATE: This section is effective beginning with
the June 2002 liability.
Sec. 18. Minnesota Statutes 1998, section 297F.09,
subdivision 2, is amended to read:
Subd. 2. [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.]
On or before the 18th day of each calendar month, a distributor
with a place of business in this state shall file a return with
the commissioner showing the quantity and wholesale sales price
of each tobacco product:
(1) brought, or caused to be brought, into this state for
sale; and
(2) made, manufactured, or fabricated in this state for
sale in this state, during the preceding calendar month.
Every licensed distributor outside this state shall in like
manner file a return showing the quantity and wholesale sales
price of each tobacco product shipped or transported to
retailers in this state to be sold by those retailers, during
the preceding calendar month. Returns must be made in the form
and manner prescribed by the commissioner and must contain any
other information required by the commissioner. The return must
be accompanied by a remittance for the full tax liability shown,
less 1.5 percent of the liability as compensation to reimburse
the distributor for expenses incurred in the administration of
this chapter. The return for the May liability and 75 percent
of the estimated June liability is due on the date payment of
the tax is due.
EFFECTIVE DATE: This section is effective beginning with
the June 2002 liability.
Sec. 19. Minnesota Statutes 1998, section 297F.13,
subdivision 4, is amended to read:
Subd. 4. [RETAILER AND SUBJOBBER TO PRESERVE PURCHASE
INVOICES.] Every retailer and subjobber shall procure itemized
invoices of all cigarettes or tobacco products purchased. The
invoices shall show the name and address of the seller and the
date of purchase.
The retailer and subjobber shall preserve a legible copy of
each invoice for one year from the date of purchase the invoice.
The retailer and subjobber shall preserve copies of the invoices
at each retail location or at a central location provided that
the invoice must be produced and made available at a retail
location within one hour when requested by the commissioner or
duly authorized agents and employees. Copies should be numbered
and kept in chronological order.
To determine whether the business is in compliance with the
provisions of this chapter and sections 325D.30 to 325D.42, at
any time during usual business hours, the commissioner, or duly
authorized agents and employees, may enter any place of business
of a retailer or subjobber without a search warrant and inspect
the premises, the records required to be kept under this
chapter, and the packages of cigarettes, tobacco products, and
vending devices contained on the premises.
EFFECTIVE DATE: This section is effective July 1, 2000.
Sec. 20. Minnesota Statutes 1998, section 297F.21,
subdivision 1, is amended to read:
Subdivision 1. [CONTRABAND DEFINED.] The following are
declared to be contraband and therefore subject to civil and
criminal penalties under this chapter:
(a) Cigarette packages which do not have stamps affixed to
them as provided in this chapter, including but not limited to
(i) packages with illegible stamps and packages with stamps that
are not complete or whole even if the stamps are legible, and
(ii) all devices for the vending of cigarettes in which packages
as defined in item (i) are found, including all contents
contained within the devices.
(b) A device for the vending of cigarettes and all packages
of cigarettes, where the device does not afford at least partial
visibility of contents. Where any package exposed to view does
not carry the stamp required by this chapter, it shall be
presumed that all packages contained in the device are unstamped
and contraband.
(c) A device for the vending of cigarettes to which the
commissioner or authorized agents have been denied access for
the inspection of contents. In lieu of seizure, the
commissioner or an agent may seal the device to prevent its use
until inspection of contents is permitted.
(d) A device for the vending of cigarettes which does not
carry the name and address of the owner, plainly marked and
visible from the front of the machine.
(e) A device including, but not limited to, motor vehicles,
trailers, snowmobiles, airplanes, and boats used with the
knowledge of the owner or of a person operating with the consent
of the owner for the storage or transportation of more than
5,000 cigarettes which are contraband under this subdivision.
When cigarettes are being transported in the course of
interstate commerce, or are in movement from either a public
warehouse to a distributor upon orders from a manufacturer or
distributor, or from one distributor to another, the cigarettes
are not contraband, notwithstanding the provisions of clause (a).
(f) Cigarette packages or tobacco products obtained from an
unlicensed seller.
(g) Cigarette packages offered for sale or held as
inventory in violation of section 297F.20, subdivision 7.
(h) Tobacco products on which the tax has not been paid by
a licensed distributor.
(i) Any cigarette packages or tobacco products offered for
sale or held as inventory for which there is not an invoice from
a licensed seller as required under section 297F.13, subdivision
4.
EFFECTIVE DATE: This section is effective July 1, 2000.
Sec. 21. Minnesota Statutes 1998, section 297F.21,
subdivision 3, is amended to read:
Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the
seizure of any alleged contraband, the person making the seizure
shall make available an inventory of the property seized to the
person from whom the seizure was made, if known, and file a copy
with the commissioner. Within ten days after the date of
service of the inventory, the person from whom the property was
seized or any person claiming an interest in the property may
file with the commissioner a demand for a judicial determination
of the question as to whether the property was lawfully subject
to seizure and forfeiture. The commissioner, within 60 days,
shall institute an action in the district court of the county
where the seizure was made to determine the issue of
forfeiture. The court shall decide whether the alleged
contraband is contraband, as defined in subdivision 1.
(b) The action must be brought in the name of the state and
must be prosecuted by the county attorney or by the attorney
general. The court shall hear the action without a jury and
shall try and determine the issues of fact and law involved.
(c) When a judgment of forfeiture is entered, the
commissioner may, unless the judgment is stayed pending an
appeal, either:
(1) deliver the forfeited property to the commissioner of
human services for use by patients in state institutions;
(2) cause it to be destroyed; or
(3) cause it to be sold at public auction as provided by
law.
(d) If a demand for judicial determination is made and no
action commenced as provided in this subdivision, the property
must be released by the commissioner and returned to the person
entitled to it. If no demand is made, the property seized is
considered forfeited to the state by operation of law and may be
disposed of by the commissioner as provided in the case of a
judgment of forfeiture. When the commissioner is satisfied that
a person from whom property is seized was acting in good faith
and without intent to evade the tax imposed by this chapter, the
commissioner shall release the property seized without further
legal proceedings.
EFFECTIVE DATE: This section is effective for alleged
contraband seized on or after the day following final enactment.
Sec. 22. [REPEALER.]
(a) Minnesota Statutes 1998, section 270.083, is repealed.
(b) Minnesota Statutes 1998, sections 297F.09, subdivision
6; and 297G.09, subdivision 5, are repealed.
EFFECTIVE DATE: This section, paragraph (a), is effective
the day following final enactment. This section, paragraph (b)
is effective beginning with the June 2002 liability.
ARTICLE 11
LOCAL DEVELOPMENT
Section 1. Minnesota Statutes 1998, section 273.1399,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given.
(a) "Qualifying captured net tax capacity" means the
following amounts:
(1) The captured net tax capacity of a new or the expanded
part of an existing economic development tax increment financing
district, for which certification was requested after April 30,
1990.
(2) The captured net tax capacity of a new or the expanded
part of an existing tax increment financing district, other than
an economic development district, for which certification was
requested after April 30, 1990, multiplied by the following
percentage based on the number of years that have elapsed since
the assessment year of the original net tax capacity. In no
case may the final amounts be less than zero or greater than the
total captured net tax capacity of the district.
Number of Renewal and All other
years Renovation Districts
Districts
0 to 5 0 0
6 12.5 6.25
7 25 12.5
8 37.5 18.75
9 50 25
10 62.5 31.25
11 75 37.5
12 87.5 43.75
13 100 50
14 100 56.25
15 100 62.5
16 100 68.75
17 100 75
18 100 81.25
19 100 87.5
20 100 93.75
21 or more 100 100
(3) The following rules apply to a hazardous substance
subdistrict. The applicable percentage under clause (2) must be
determined under the "all other districts" category. The number
of years must be measured from the date of certification of the
subdistrict for purposes of the additional captured net tax
capacity resulting from the reduction in the subdistrict's or
site's original net tax capacity. After termination of the
overlying district, captured net tax capacity includes the full
amount that is captured by the subdistrict.
(4) Qualified captured tax capacity does not include the
captured tax capacity of exempt districts under subdivisions 6
and 7.
(b) The terms defined in section 469.174 have the meanings
given in that section.
(c) "Qualified housing district" means:
(1) a housing district for a residential rental project or
projects in which the only properties receiving assistance from
revenues derived from tax increments from the district meet all
of the requirements for a low-income housing credit under
section 42 of the Internal Revenue Code of 1986, as amended
through December 31, 1992, regardless of whether the project
actually receives a low-income housing credit; or
(2) a housing district for a single-family homeownership
project or projects, if 95 percent or more of the homes
receiving assistance from tax increments from the district are
purchased by qualified purchasers. A qualified purchaser means
the first purchaser of a home after the tax increment assistance
is provided whose income is at or below 70 percent of the median
gross income for a family of the same size as the purchaser.
Median gross income is the greater of (i) area median gross
income, or (ii) the statewide median gross income, as determined
by the secretary of Housing and Urban Development.
EFFECTIVE DATE: This section is effective the day
following final enactment, and applies to all districts that are
subject to the underlying law.
Sec. 2. Minnesota Statutes 1998, section 428A.11, is
amended by adding a subdivision to read:
Subd. 7. [AUTHORITY.] "Authority" means an economic
development authority or housing and redevelopment authority
created pursuant to section 469.003, 469.004, or 469.091 or
another entity authorized by law to exercise the powers of an
authority created pursuant to one of those sections.
Sec. 3. Minnesota Statutes 1998, section 428A.11, is
amended by adding a subdivision to read:
Subd. 8. [IMPLEMENTING ENTITY.] "Implementing entity"
means the city or authority designated in the enabling ordinance
as responsible for implementing and administering the housing
improvement area.
Sec. 4. Minnesota Statutes 1998, section 428A.13,
subdivision 1, is amended to read:
Subdivision 1. [ORDINANCE.] The governing body of the city
may adopt an ordinance establishing a one or more housing
improvement area areas. The ordinance must specifically
describe the portion of the city to be included in the area, the
basis for the imposition of the fees, and the number of years
the fee will be in effect. In addition, the ordinance must
include findings that without the housing improvement area, the
proposed improvements could not be made by the condominium
associations or housing unit owners, and the designation is
needed to maintain and preserve the housing units within the
housing improvement area. The ordinance shall designate the
implementing entity. The ordinance may not be adopted until a
public hearing has been held regarding the ordinance. The
ordinance may be amended by the governing body of the city,
provided the governing body complies with the public hearing
notice provisions of subdivision 2. Within 30 days after
adoption of the ordinance under this subdivision, the governing
body shall send a copy of the ordinance to the commissioner of
revenue.
Sec. 5. Minnesota Statutes 1998, section 428A.13,
subdivision 3, is amended to read:
Subd. 3. [PROPOSED HOUSING IMPROVEMENTS.] At the public
hearing held under subdivision 2, the city proposed implementing
entity shall provide a preliminary listing of the housing
improvements to be made in the area. The listing shall identify
those improvements, if any, that are proposed to be made to all
or a portion of the common elements of a condominium. The
listing shall also identify those housing units that have
completed the proposed housing improvements and are proposed to
be exempted from a portion of the fee. In preparing the list
the city proposed implementing entity shall consult with the
residents of the area and the condominium associations.
Sec. 6. Minnesota Statutes 1998, section 428A.14,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORITY.] Fees may be imposed by the
city implementing entity on the housing units within the housing
improvement area at a rate, term, or amount sufficient to
produce revenue required to provide housing improvements in the
area to reimburse the implementing entity for advances made to
pay for the housing improvements or to pay principal of,
interest on, and premiums, if any, on bonds issued by the
implementing entity under section 428A.16. The fee can be
imposed on the basis of the tax capacity of the housing unit, or
the total amount of square footage of the housing unit, or a
method determined by the council and specified in the resolution.
Before the imposition of the fees, a hearing must be held and
notice must be published in the official newspaper at least
seven days before the hearing and shall be mailed at least seven
days before the hearing to any housing unit owner subject to a
fee. For purposes of this section, the notice must also include:
(1) a statement that all interested persons will be given
an opportunity to be heard at the hearing regarding a proposed
housing improvement fee;
(2) the estimated cost of improvements including
administrative costs to be paid for in whole or in part by the
fee imposed under the ordinance;
(3) the amount to be charged against the particular
property;
(4) the right of the property owner to prepay the entire
fee;
(5) the number of years the fee will be in effect; and
(6) a statement that the petition requirements of section
428A.12 have either been met or do not apply to the proposed fee.
Within six months of the public hearing, the city
implementing entity may adopt a resolution imposing a fee within
the area not exceeding the amount expressed in the notice issued
under this section.
Prior to adoption of the resolution approving the fee, the
condominium associations located in the housing improvement area
shall submit to the city implementing entity a financial plan
prepared by an independent third party, acceptable to the city
implementing entity and associations, that provides for the
associations to finance maintenance and operation of the common
elements in the condominium and a long-range plan to conduct and
finance capital improvements.
Sec. 7. Minnesota Statutes 1998, section 428A.15, is
amended to read:
428A.15 [COLLECTION OF FEES.]
The city implementing entity may provide for the collection
of the housing improvement fees according to the terms of
section 428A.05.
Sec. 8. Minnesota Statutes 1998, section 428A.16, is
amended to read:
428A.16 [BONDS.]
At any time after a contract for the construction of all or
part of an improvement authorized under sections 428A.11 to
428A.20 has been entered into or the work has been ordered, the
governing body of the city implementing entity may issue
obligations in the amount it deems necessary to defray in whole
or in part the expense incurred and estimated to be incurred in
making the improvement, including every item of cost from
inception to completion and all fees and expenses incurred in
connection with the improvement or the financing.
The obligations are payable primarily out of the proceeds
of the fees imposed under section 428A.14, or from any other
special assessments or revenues available to be pledged for
their payment under charter or statutory authority, or from two
or more of those sources. The governing body of the city, or if
the governing bodies are the same or consist of identical
membership, the authority may, by resolution adopted prior to
the sale of obligations, pledge the full faith, credit, and
taxing power of the city to assure bonds issued by it to ensure
payment of the principal and interest if the proceeds of the
fees in the area are insufficient to pay the principal and
interest. The obligations must be issued in accordance with
chapter 475, except that an election is not required, and the
amount of the obligations are not included in determination of
the net debt of the city under the provisions of any law or
charter limiting debt.
Sec. 9. Minnesota Statutes 1998, section 428A.17, is
amended to read:
428A.17 [ADVISORY BOARD.]
The governing body of the city implementing entity may
create and appoint an advisory board for the housing improvement
area in the city to advise the governing body implementing
entity in connection with the planning and construction of
housing improvements. In appointing the board, the council
implementing entity shall consider for membership members of
condominium associations located in the housing improvement
area. The advisory board shall make recommendations to
the governing body implementing entity to provide improvements
or impose fees within the housing improvement area. Before the
adoption of a proposal by the governing body implementing entity
to provide improvements within the housing improvement area, the
advisory board of the housing improvement area shall have an
opportunity to review and comment upon the proposal.
Sec. 10. Minnesota Statutes 1998, section 428A.19, is
amended to read:
428A.19 [ANNUAL REPORTS.]
Each condominium association located within the housing
improvement area must, by August 15 annually, submit a copy of
its audited financial statements to the city implementing entity.
The city may also, as part of the enabling ordinance, require
the submission of other relevant information from the
associations.
Sec. 11. Minnesota Statutes 1998, section 428A.21, is
amended to read:
428A.21 [SUNSET.]
No new housing improvement areas may be established under
sections 428A.11 to 428A.20 after June 30, 2001 2005. After
June 30, 2001 2005, a city may establish a housing improvement
area, provided that it receives enabling legislation authorizing
the establishment of the area.
Sec. 12. Minnesota Statutes 1998, section 469.115, is
amended to read:
469.115 [POWERS OF AGENCIES.]
A local agency shall have all the powers necessary or
convenient to carry out the purposes of sections 469.109 to
469.123; except that the agencies shall not levy and collect
taxes or special assessments, nor exercise the power of eminent
domain unless the governing body of the municipality or
municipalities, in the case of a joint exercise of power, shall
by resolution have expressly conferred that power on the
agency. A local agency shall also have the following powers in
addition to others granted in sections 469.109 to 469.123:
(1) to sue and be sued, to have a seal, which shall be
judicially noticed, and to alter the same at pleasure; to have
perpetual succession; and to make, amend, and repeal rules and
regulations not inconsistent with these sections;
(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 service it may require, to call upon the
chief law officer of the municipality or to employ its own
counsel and legal staff; so far as practical, to use the
services of local public bodies, in its area of operation.
Those local 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) upon proper application by a public body or private
applicant, and after determining that the purpose of sections
469.109 to 469.123 will be accomplished by the establishment of
the project in the redevelopment area to approve a redevelopment
project;
(5) to 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 gift, grant,
purchase, exchange, lease, transfer, bequest, devise, or
otherwise. An agency may acquire real property which it deems
necessary for its purposes by exercise of the power of eminent
domain in the manner provided in chapter 117, after adoption 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 469.111,
subdivision 1;
(7) to designate redevelopment areas;
(8) to cooperate with industrial development corporations,
state and federal agencies, and private persons or corporations
in efforts to promote the expansion of recreational, commercial,
industrial, and manufacturing activity in a redevelopment area;
(9) upon proper application by any public body or private
applicant, to determine whether the declared public purpose of
these sections has been accomplished or will be accomplished by
the establishment of a redevelopment project in a redevelopment
area;
(10) to obtain information necessary to the designation of
a redevelopment area and the establishment of a redevelopment
project therein;
(11) to cooperate with or act as agent for the federal
government, the state, or any state public body or any agency or
instrumentality thereof in carrying out the provisions of these
sections or of any other related federal, state, or local
legislation;
(12) to borrow money or other property and accept
contributions, grants, gifts, services, or other assistance from
the federal or state government to accomplish the purposes of
sections 469.109 to 469.123;
(13) to conduct mined underground space development
pursuant to sections 469.135 to 469.141;
(14) to include in any contract for financial assistance
with the federal government any conditions which the federal
government may attach to its financial aid of a redevelopment
project;
(15) (14) to issue bonds, notes, or other evidences of
indebtedness as hereinafter provided, for any of its purposes
and to secure them by mortgages upon property held or to be held
by it, or by pledge of its revenues, including grants or
contributions; and
(16) (15) to invest any funds held in reserve 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.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 13. Minnesota Statutes 1998, section 469.174,
subdivision 9, is amended to read:
Subd. 9. [TAX INCREMENT FINANCING DISTRICT.] "Tax
increment financing district" or "district" means a contiguous
or noncontiguous geographic area within a project delineated in
the tax increment financing plan, as provided by section
469.175, subdivision 1, for the purpose of financing
redevelopment, mined underground space development, housing or
economic development in municipalities through the use of tax
increment generated from the captured net tax capacity in the
tax increment financing district.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 14. Minnesota Statutes 1998, section 469.174,
subdivision 10, is amended to read:
Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment
district" means a type of tax increment financing district
consisting of a project, or portions of a project, within which
the authority finds by resolution that one or more of the
following conditions, reasonably distributed throughout the
district, exists:
(1) parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, or other
improvements and more than 50 percent of the buildings, not
including outbuildings, are structurally substandard to a degree
requiring substantial renovation or clearance; or
(2) the property consists of vacant, unused, underused,
inappropriately used, or infrequently used railyards, rail
storage facilities, or excessive or vacated railroad
rights-of-way; or
(3) tank facilities, or property whose immediately previous
use was for tank facilities, as defined in section 115C.02,
subdivision 15, if the tank facilities:
(i) have or had a capacity of more than 1,000,000 gallons;
(ii) are located adjacent to rail facilities; and
(iii) have been removed or are unused, underused,
inappropriately used, or infrequently used.
(b) For purposes of this subdivision, "structurally
substandard" shall mean containing defects in structural
elements or a combination of deficiencies in essential utilities
and facilities, light and ventilation, fire protection including
adequate egress, layout and condition of interior partitions, or
similar factors, which defects or deficiencies are of sufficient
total significance to justify substantial renovation or
clearance.
(c) A building is not structurally substandard if it is in
compliance with the building code applicable to new buildings or
could be modified to satisfy the building code at a cost of less
than 15 percent of the cost of constructing a new structure of
the same square footage and type on the site. The municipality
may find that a building is not disqualified as structurally
substandard under the preceding sentence on the basis of
reasonably available evidence, such as the size, type, and age
of the building, the average cost of plumbing, electrical, or
structural repairs, or other similar reliable evidence. The
municipality may not make such a determination without an
interior inspection of the property, but need not have an
independent, expert appraisal prepared of the cost of repair and
rehabilitation of the building. An interior inspection of the
property is not required, if the municipality finds that (1) the
municipality or authority is unable to gain access to the
property after using its best efforts to obtain permission from
the party that owns or controls the property; and (2) the
evidence otherwise supports a reasonable conclusion that the
building is structurally substandard. Items of evidence that
support such a conclusion include recent fire or police
inspections, on-site property tax appraisals or housing
inspections, exterior evidence of deterioration, or other
similar reliable evidence. Written documentation of the
findings and reasons why an interior inspection was not
conducted must be made and retained under section 469.175,
subdivision 3, clause (1).
(d) A parcel is deemed to be occupied by a structurally
substandard building for purposes of the finding under paragraph
(a) if all of the following conditions are met:
(1) the parcel was occupied by a substandard building
within three years of the filing of the request for
certification of the parcel as part of the district with the
county auditor;
(2) the substandard building was demolished or removed by
the authority or the demolition or removal was financed by the
authority or was done by a developer under a development
agreement with the authority;
(3) the authority found by resolution before the demolition
or removal that the parcel was occupied by a structurally
substandard building and that after demolition and clearance the
authority intended to include the parcel within a district; and
(4) upon filing the request for certification of the tax
capacity of the parcel as part of a district, the authority
notifies the county auditor that the original tax capacity of
the parcel must be adjusted as provided by section 469.177,
subdivision 1, paragraph (h).
(e) For purposes of this subdivision, a parcel is not
occupied by buildings, streets, utilities, or other improvements
unless 15 percent of the area of the parcel contains
improvements.
(f) For districts consisting of two or more noncontiguous
areas, each area must qualify as a redevelopment district under
paragraph (a) to be included in the district, and the entire
area of the district must satisfy paragraph (a).
EFFECTIVE DATE: This section is effective for districts or
additions to the geographic area of an existing district for
which the request for certification was received by the county
auditor after June 30, 2000.
Sec. 15. Minnesota Statutes 1998, section 469.174,
subdivision 11, is amended to read:
Subd. 11. [HOUSING DISTRICT.] "Housing district" means a
type of tax increment financing district which consists of a
project, or a portion of a project, intended for occupancy, in
part, by persons or families of low and moderate income, as
defined in chapter 462A, Title II of the National Housing Act of
1934, the National Housing Act of 1959, the United States
Housing Act of 1937, as amended, Title V of the Housing Act of
1949, as amended, any other similar present or future federal,
state, or municipal legislation, or the regulations promulgated
under any of those acts. A project district does not qualify as
a housing district under this subdivision if the fair market
value of the improvements which are constructed in the district
for commercial uses or for uses other than low and moderate
income housing consists of more than 20 percent of the total
fair market value of the planned improvements in the development
plan or agreement. The fair market value of the improvements
may be determined using the cost of construction, capitalized
income, or other appropriate method of estimating market value.
Housing project means a project, or a portion of a project, that
meets all of qualifications of a housing district under this
subdivision, whether or not actually established as a housing
district.
EFFECTIVE DATE: This section is effective for districts
and amendments adding geographic area to an existing district
for which the request for certification was filed with the
county after May 1, 1988.
Sec. 16. Minnesota Statutes 1998, section 469.174,
subdivision 12, is amended to read:
Subd. 12. [ECONOMIC DEVELOPMENT DISTRICT.] "Economic
development district" means a type of tax increment financing
district which consists of any project, or portions of a
project, not meeting the requirements found in the definition of
redevelopment district, renewal and renovation district, soils
condition district, mined underground space development
district, or housing district, but which the authority finds to
be in the public interest because:
(1) it will discourage commerce, industry, or manufacturing
from moving their operations to another state or municipality;
or
(2) it will result in increased employment in the state; or
(3) it will result in preservation and enhancement of the
tax base of the state.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 17. Minnesota Statutes 1998, section 469.174,
subdivision 14, is amended to read:
Subd. 14. [ADMINISTRATIVE EXPENSES.] "Administrative
expenses" means all expenditures of an authority other than:
(1) amounts paid for the purchase of land or;
(2) amounts paid to contractors or others providing
materials and services, including architectural and engineering
services, directly connected with the physical development of
the real property in the district, project;
(3) relocation benefits paid to or services provided for
persons residing or businesses located in the district,
or project;
(4) amounts used to pay principal or interest on, fund a
reserve for, or sell at a discount bonds issued pursuant to
section 469.178; or
(5) amounts used to pay other financial obligations to the
extent those obligations were used to finance costs described in
clauses (1) to (3).
For districts for which the requests for certifications
were made before August 1, 1979, or after June 30, 1982,
"administrative expenses" includes amounts paid for services
provided by bond counsel, fiscal consultants, and planning or
economic development consultants.
EFFECTIVE DATE: This section is effective for all tax
increment financing districts, regardless of when the request
for certification was made.
Sec. 18. Minnesota Statutes 1998, section 469.174,
subdivision 22, is amended to read:
Subd. 22. [TOURISM FACILITY.] "Tourism facility" means
property that:
(1) is located in a county where the median income is no
more than 85 percent of the state median income;
(2) is located in a county in which, excluding the cities
of the first class in that county, the earnings on
tourism-related activities are 15 percent or more of the total
earnings in the county development region 2, 3, 4, or 5, as
defined in section 462.385;
(3) is located outside the metropolitan area defined in
section 473.121, subdivision 2;
(4) is not located in a city with a population in excess of
20,000; and
(5) (4) is acquired, constructed, or rehabilitated for use
as a convention and meeting facility that is privately
owned, amusement park, recreation facility, cultural facility,
marina, park, hotel, motel, lodging facility, or nonhomestead
dwelling unit that in each case is intended to serve primarily
individuals from outside the county.
EFFECTIVE DATE: This section is effective for districts
for which the request for certification was received by the
county auditor after June 30, 2000, but the new clause (4) does
not apply to (1) expenditures made under a binding contract
entered before January 1, 2000; or (2) 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.
Sec. 19. Minnesota Statutes 1998, section 469.175,
subdivision 1a, is amended to read:
Subd. 1a. [INCLUSION OF COUNTY ROAD COSTS.] (a) The county
board may require the authority to pay all or a portion of the
cost of county road improvements out of increment revenues, if
the following conditions occur:
(1) the proposed tax increment financing plan or an
amendment to the plan contemplates construction of a development
that will, in the judgment of the county, substantially increase
the use of county roads requiring construction of road
improvements or other road costs; and
(2) the road improvements or other road costs are not
scheduled for construction within five years under the county
capital improvement plan or other within five years under
another formally adopted county plan, and in the opinion of the
county, would not reasonably be expected to be needed within the
reasonably foreseeable future if the tax increment financing
plan were not implemented.
(b) If the county elects to use increments to finance the
road improvements, the county must notify the authority and
municipality within 30 45 days after receipt of the information
on the proposed tax increment district financing plan under
subdivision 2. The notice must include the estimated cost of
the road improvements and schedule for construction and payment
of the cost. The authority must include the improvements in the
tax increment financing plan. The improvements may be financed
with the proceeds of tax increment bonds or the authority and
the county may agree that the county will finance the
improvements with county funds to be repaid in installments,
with or without interest, out of increment revenues. If the
cost of the road improvements and other project costs exceed the
projected amount of the increment revenues, the county and
authority shall negotiate an agreement, modifying the
development plan or proposed road improvements that will permit
financing of the costs before the tax increment financing plan
may be approved.
EFFECTIVE DATE: This section, paragraph (a), is effective
for districts or expansions of the geographic area of districts,
for which certification is requested after the day following
final enactment of this act.
This section, paragraph (b), is effective for tax increment
financing plans or amendments to plans approved after July 1,
2000.
Sec. 20. Minnesota Statutes 1998, section 469.175,
subdivision 2, is amended to read:
Subd. 2. [CONSULTATIONS; COMMENT AND FILING.] Before
formation of a tax increment financing district, the authority
shall provide an opportunity to the members of the county boards
of commissioners of any county in which any portion of the
proposed district is located and the members of the school board
of any school district in which any portion of the proposed
district is located to meet with the authority. The authority
shall present to the members of the county boards of
commissioners and the school boards its the county auditor and
clerk of the school board with the proposed tax increment
financing plan for the district and the authority's estimate of
the fiscal and economic implications of the proposed tax
increment financing district. The authority must provide the
proposed tax increment financing plan and the information on the
fiscal and economic implications of the plan must be provided to
the county auditor and the clerk of the school district boards
board at least 30 days before the public hearing required by
subdivision 3. The information on the fiscal and economic
implications may be included in or as part of the tax increment
financing plan. The county auditor and clerk of the school
board shall provide copies to the members of the boards, as
directed by their respective boards. The 30-day requirement is
waived if the boards of the county and school district submit
written comments on the proposal and any modification of the
proposal to the authority after receipt of the information. The
members of the county boards of commissioners and the school
boards may present their comments at the public hearing on the
tax increment financing plan required by subdivision 3. Upon
adoption of the tax increment financing plan, the authority
shall file a copy of the plan with the commissioner of revenue.
The authority must also file with the commissioner a copy of the
development plan for the project area.
EFFECTIVE DATE: This section is effective for tax
increment financing plans approved after July 1, 2000.
Sec. 21. Minnesota Statutes 1998, section 469.175,
subdivision 2a, is amended to read:
Subd. 2a. [HOUSING DISTRICTS; REDEVELOPMENT DISTRICTS.] In
the case of a proposed housing district or redevelopment
district, in addition to the requirements of subdivision 2, at
least 30 days before the publication of the notice for public
hearing under subdivision 3, the authority shall deliver written
notice of the proposed district to each county commissioner who
represents part of the area proposed to be included in the
district. The notice must contain a general description of the
boundaries of the proposed district and the proposed activities
to be financed by the district, an offer by the authority to
meet and discuss the proposed district with the county
commissioner, and a solicitation of the commissioner's comments
with respect to the district. The commissioner may waive the
30-day requirement by submitting written comments on the
proposal and any modification of the proposal to the authority
after receipt of the information.
EFFECTIVE DATE: This section is effective for tax
increment financing districts for which the requests for
certification is made after May 31, 1993.
Sec. 22. Minnesota Statutes 1998, section 469.175,
subdivision 3, is amended to read:
Subd. 3. [MUNICIPALITY APPROVAL.] A county auditor shall
not certify the original net tax capacity of a tax increment
financing district until the tax increment financing plan
proposed for that district has been approved by the municipality
in which the district is located. If an authority that proposes
to establish a tax increment financing district and the
municipality are not the same, the authority shall apply to the
municipality in which the district is proposed to be located and
shall obtain the approval of its tax increment financing plan by
the municipality before the authority may use tax increment
financing. The municipality shall approve the tax increment
financing plan only after a public hearing thereon after
published notice in a newspaper of general circulation in the
municipality at least once not less than ten days nor more than
30 days prior to the date of the hearing. The published notice
must include a map of the area of the district from which
increments may be collected and, if the project area includes
additional area, a map of the project area in which the
increments may be expended. The hearing may be held before or
after the approval or creation of the project or it may be held
in conjunction with a hearing to approve the project. Before or
at the time of approval of the tax increment financing plan, the
municipality shall make the following findings, and shall set
forth in writing the reasons and supporting facts for each
determination:
(1) that the proposed tax increment financing district is a
redevelopment district, a renewal or renovation district, a
mined underground space development district, a housing
district, a soils condition district, or an economic development
district; if the proposed district is a redevelopment district
or a renewal or renovation district, the reasons and supporting
facts for the determination that the district meets the criteria
of section 469.174, subdivision 10, paragraph (a), clauses (1)
and (2), or subdivision 10a, must be documented in writing and
retained and made available to the public by the authority until
the district has been terminated.
(2) that the proposed development or redevelopment, in the
opinion of the municipality, would not reasonably be expected to
occur solely through private investment within the reasonably
foreseeable future and that the increased market value of the
site that could reasonably be expected to occur without the use
of tax increment financing would be less than the increase in
the market value estimated to result from the proposed
development after subtracting the present value of the projected
tax increments for the maximum duration of the district
permitted by the plan. The requirements of this clause do not
apply if the district is a qualified housing district, as
defined in section 273.1399, subdivision 1.
(3) that the tax increment financing plan conforms to the
general plan for the development or redevelopment of the
municipality as a whole.
(4) that the tax increment financing plan will afford
maximum opportunity, consistent with the sound needs of the
municipality as a whole, for the development or redevelopment of
the project by private enterprise.
(5) that the municipality elects the method of tax
increment computation set forth in section 469.177, subdivision
3, clause (b), if applicable.
When the municipality and the authority are not the same,
the municipality shall approve or disapprove the tax increment
financing plan within 60 days of submission by the authority, or
the plan shall be deemed approved. When the municipality and
the authority are not the same, the municipality may not amend
or modify a tax increment financing plan except as proposed by
the authority pursuant to subdivision 4. Once approved, the
determination of the authority to undertake the project through
the use of tax increment financing and the resolution of the
governing body shall be conclusive of the findings therein and
of the public need for the financing.
EFFECTIVE DATE: This section is effective for tax
increment financing plans approved after June 30, 2000.
Sec. 23. Minnesota Statutes 1998, section 469.175,
subdivision 5, is amended to read:
Subd. 5. [ANNUAL DISCLOSURE.] (a) The authority shall
annually submit to the county board, the county auditor, the
school board, state auditor and, if the authority is other than
the municipality, the governing body of the municipality, a
report of the status of the district. The report shall include
the following information: the amount and the source of revenue
in the account, the amount and purpose of expenditures from the
account, the amount of any pledge of revenues, including
principal and interest on any outstanding bonded indebtedness,
the original net tax capacity of the district and any
subdistrict, the captured net tax capacity retained by the
authority, the captured net tax capacity shared with other
taxing districts, the tax increment received, and any additional
information necessary to demonstrate compliance with any
applicable tax increment financing plan. The authority must
submit the annual report for a year on or before August 1 of the
next year.
(b) An annual statement showing the tax increment received
and expended in that year, the original net tax capacity,
captured net tax capacity, amount of outstanding bonded
indebtedness, the amount of the district's and any subdistrict's
increments paid to other governmental bodies, the amount paid
for administrative costs, the sum of increments paid, directly
or indirectly, for activities and improvements located outside
of the district, for each district the information required to
be reported under subdivision 6, paragraph (c), clauses (1),
(2), (3), (11), (12), (20), and (21); the amounts of tax
increment received and expended in the reporting period; and any
additional information the authority deems necessary shall must
be published in a newspaper of general circulation in the
municipality that approved the tax increment financing plan. If
the fiscal disparities contribution under chapter 276A or 473F
for the district is computed under section 469.177, subdivision
3, paragraph (a), the annual statement must disclose that fact
and indicate the amount of increased property tax imposed on
other properties in the municipality as a result of the fiscal
disparities contribution. The commissioner of revenue shall
prescribe the form of this statement and the method for
calculating the increased property taxes. The annual statement
must inform readers that additional information regarding each
district may be obtained from the authority, and must explain
how the additional information may be requested. The authority
must publish the annual statement for a year no later than
August 15 of the next year. The authority must identify the
newspaper of general circulation in the municipality to which
the annual statement has been or will be submitted for
publication and provide a copy of the annual statement to
the county board, the county auditor, the school board, the
state auditor, and, if the authority is other than the
municipality, the governing body of the municipality on or
before August 1 of the year in which the statement must be
published.
(c) The disclosure and reporting requirements imposed by
this subdivision apply to districts certified before, on, or
after August 1, 1979.
EFFECTIVE DATE: This section is effective for reports due
in 2001 and subsequent years.
Sec. 24. Minnesota Statutes 1998, section 469.175,
subdivision 6, is amended to read:
Subd. 6. [ANNUAL FINANCIAL REPORTING.] (a) The state
auditor shall develop a uniform system of accounting and
financial reporting for tax increment financing districts. The
system of accounting and financial reporting shall, as nearly as
possible:
(1) provide for full disclosure of the sources and uses of
public funds in the district;
(2) permit comparison and reconciliation with the affected
local government's accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a
district, including a single district that is part of a
multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from
other districts or with other public money;
(4) be consistent with generally accepted accounting
principles.
(b) The authority must annually submit to the state auditor
a financial report in compliance with paragraph (a). Copies of
the report must also be provided to the county and school
district boards auditor and to the governing body of the
municipality, if the authority is not the municipality. To the
extent necessary to permit compliance with the requirement of
financial reporting, the county and any other appropriate local
government unit or private entity must provide the necessary
records or information to the authority or the state auditor as
provided by the system of accounting and financial reporting
developed pursuant to paragraph (a). The authority must submit
the annual report for a year on or before August 1 of the next
year.
(c) The annual financial report must also include the
following items:
(1) the original net tax capacity of the district and any
subdistrict under section 469.177, subdivision 1;
(2) the net tax capacity for the reporting period of the
district and any subdistrict;
(3) the captured net tax capacity of the district,
including the amount of any captured net tax capacity shared
with other taxing districts;
(3) (4) any fiscal disparity deduction from the captured
net tax capacity under section 469.177, subdivision 3;
(5) the captured net tax capacity retained for tax
increment financing under section 469.177, subdivision 2,
paragraph (a), clause (1);
(6) any captured net tax capacity distributed among
affected taxing districts under section 469.177, subdivision 2,
paragraph (a), clause (2);
(7) the type of district;
(8) the date the municipality approved the tax increment
financing plan and the date of approval of any modification of
the tax increment financing plan, the approval of which requires
notice, discussion, a public hearing, and findings under
subdivision 4, paragraph (a);
(9) the date the authority first requested certification of
the original net tax capacity of the district and the date of
the request for certification regarding any parcel added to the
district;
(10) the date the county auditor first certified the
original net tax capacity of the district and the date of
certification of the original net tax capacity of any parcel
added to the district;
(11) the month and year in which the authority has received
or anticipates it will receive the first increment from the
district;
(12) the date the district must be decertified;
(13) for the reporting period and prior years of the
district, the actual amount received from, at least, the
following categories:
(i) tax increments paid by the captured net tax capacity
retained for tax increment financing under section 469.177,
subdivision 2, paragraph (a), clause (1), but excluding any
excess taxes;
(ii) tax increments that are interest or other investment
earnings on or from tax increments;
(iii) tax increments that are proceeds from the sale or
lease of property, tangible or intangible, purchased by the
authority with tax increments;
(iv) tax increments that are repayments of loans or other
advances made by the authority with tax increments;
(v) bond or loan proceeds;
(vi) special assessments;
(vii) grants; and
(viii) transfers from funds not exclusively associated with
the district;
(14) for the reporting period and for the duration prior
years of the district, the amount budgeted under the tax
increment financing plan, and the actual amount expended for, at
least, the following categories:
(i) acquisition of land and buildings through condemnation
or purchase;
(ii) site improvements or preparation costs;
(iii) installation of public utilities, parking facilities,
streets, roads, sidewalks, or other similar public improvements;
(iv) administrative costs, including the allocated cost of
the authority;
(v) public park facilities, facilities for social,
recreational, or conference purposes, or other similar public
improvements; and
(vi) transfers to funds not exclusively associated with the
district;
(4) (15) for properties sold to developers, the total cost
of the property to the authority and the price paid by the
developer; and
(5) the amount of increments rebated or paid to developers
or property owners for privately financed improvements or other
qualifying costs.
(16) the amount of any payments and the value of any
in-kind benefits, such as physical improvements and the use of
building space, that are paid or financed with tax increments
and are provided to another governmental unit other than the
municipality during the reporting period;
(17) the amount of any payments for activities and
improvements located outside of the district that are paid for
or financed with tax increments;
(18) the amount of payments of principal and interest that
are made during the reporting period on any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(19) the principal amount, at the end of the reporting
period, of any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(20) the amount of principal and interest payments that are
due for the current calendar year on any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(21) if the fiscal disparities contribution under chapter
276A or 473F for the district is computed under section 469.177,
subdivision 3, paragraph (a), the amount of increased property
taxes imposed on other properties in the municipality that
approved the tax increment financing plan as a result of the
fiscal disparities contribution;
(22) whether the tax increment financing plan or other
governing document permits increment revenues to be expended:
(i) to pay bonds, the proceeds of which were or may be
expended on activities outside of the district;
(ii) for deposit into a common bond fund from which money
may be expended on activities located outside of the district;
or
(iii) to otherwise finance activities located outside of
the tax increment financing district; and
(23) any additional information the state auditor may
require.
(d) The commissioner of revenue shall prescribe the method
of calculating the increased property taxes under paragraph (c),
clause (21), and the form of the statement disclosing this
information on the annual statement under subdivision 5.
(e) The reporting requirements imposed by this subdivision
apply to districts certified before, on, and after August 1,
1979.
EFFECTIVE DATE: This section is effective for reports due
in 2001 and subsequent years.
Sec. 25. Minnesota Statutes 1998, section 469.176,
subdivision 1b, is amended to read:
Subd. 1b. [DURATION LIMITS; TERMS.] (a) No tax increment
shall in any event be paid to the authority
(1) after 25 years from date of receipt by the authority of
the first tax increment for a mined underground space
development district,
(2) after 15 years after receipt by the authority of the
first increment for a renewal and renovation district,
(3) (2) after 20 years after receipt by the authority of
the first increment for a soils condition district,
(4) (3) after nine eight years from the date of the
after receipt, or 11 years from approval of the tax increment
financing plan, whichever is less, by the authority of the first
increment for an economic development district,
(5) (4) for a housing district or a redevelopment district,
after 20 years from the date of receipt by the authority of the
first tax increment by the authority pursuant to section
469.175, subdivision 1, paragraph (b); or, if no provision is
made under section 469.175, subdivision 1, paragraph (b), after
25 years from the date of receipt by the authority of the first
increment.
(b) For purposes of determining a duration limit under this
subdivision or subdivision 1e that is based on the receipt of an
increment, any increments from taxes payable in the year in
which the district terminates shall be paid to the authority.
This paragraph does not affect a duration limit calculated from
the date of approval of the tax increment financing plan or
based on the recovery of costs or to a duration limit under
subdivision 1c. This paragraph does not supersede the
restrictions on payment of delinquent taxes in subdivision 1f.
(c) Except as authorized by section 469.175, subdivision 1,
paragraph (b), an action by the authority to waive or decline to
accept an increment has no effect for purposes of computing a
duration limit based on the receipt of increment under this
subdivision or any other provision of law. The authority is
deemed to have received an increment for any year in which it
waived or declined to accept an increment, regardless of whether
the increment was paid to the authority.
EFFECTIVE DATE: This section is effective for districts
for which the request for certification was received by the
county auditor after June 30, 2000, and does not apply to
amendments adding geographic area to a district for which the
request for certification was received before July 1, 2000.
Sec. 26. Minnesota Statutes 1998, section 469.176, is
amended by adding a subdivision to read:
Subd. 4k. [ASSISTING HOUSING OUTSIDE PROJECT
AREA.] Notwithstanding the definition of a project under section
469.174, increments may be spent to assist housing that meets
the requirements under section 469.1763, subdivision 2,
paragraph (d), regardless of whether the housing is located
within the boundaries of the project area.
EFFECTIVE DATE: This section is effective for increments
spent after July 1, 2000, from districts for which certification
was requested after May 1, 1990.
Sec. 27. Minnesota Statutes 1998, section 469.1761,
subdivision 4, is amended to read:
Subd. 4. [NONCOMPLIANCE; ENFORCEMENT.] Failure to comply
with the requirements of this section results in application of
the duration limits for economic development districts to the
district. If at the time of the noncompliance the district has
exceeded the duration limits for an economic development
district, the district must be decertified effective for taxes
assessed in the next calendar year. The commissioner of revenue
shall enforce the provisions of this section is subject to
section 469.1771. The commissioner may waive insubstantial
violations. Appeal of the commissioner's orders of
noncompliance must be made to the tax court in the manner
provided in section 271.06.
EFFECTIVE DATE: This section is effective for violations
occurring after July 1, 2000.
Sec. 28. Minnesota Statutes 1998, section 469.1763,
subdivision 2, is amended to read:
Subd. 2. [EXPENDITURES OUTSIDE DISTRICT.] (a) For each tax
increment financing district, an amount equal to at least 75
percent of the revenue derived from tax increments paid by
properties in the district must be expended on activities in the
district or to pay bonds, to the extent that the proceeds of the
bonds were used to finance activities in the district or to pay,
or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the
request for certification was made after June 30, 1995, the
in-district percentage for purposes of the preceding sentence is
80 percent. Not more than 25 percent of the revenue derived
from tax increments paid by properties in the district may be
expended, through a development fund or otherwise, on activities
outside of the district but within the defined geographic area
of the project except to pay, or secure payment of, debt service
on credit enhanced bonds. For districts, other than
redevelopment districts for which the request for certification
was made after June 30, 1995, the pooling percentage for
purposes of the preceding sentence is 20 percent. The revenue
derived from tax increments for the district that are expended
on costs under section 469.176, subdivision 4h, paragraph (b),
may be deducted first before calculating the percentages that
must be expended within and without the district.
(b) In the case of a housing district, a housing project,
as defined in section 469.174, subdivision 11, is an activity in
the district.
(c) All administrative expenses are for activities outside
of the district.
(d) The authority may elect, in the tax increment financing
plan for the district, to increase by up to ten percentage
points the permitted amount of expenditures for activities
located outside the geographic area of the district under
paragraph (a). As permitted by section 469.176, subdivision 4k,
the expenditures, including the permitted expenditures under
paragraph (a), need not be made within the geographic area of
the project. To qualify for the increase under this paragraph,
the expenditures must:
(1) be used exclusively to assist housing that meets the
requirement for a qualified low-income building, as that term is
used in section 42 of the Internal Revenue Code;
(2) not exceed the qualified basis of the housing, as
defined under section 42(c) of the Internal Revenue Code, less
the amount of any credit allowed under section 42 of the
Internal Revenue Code; and
(3) be used to:
(i) acquire and prepare the site of the housing;
(ii) acquire, construct, or rehabilitate the housing; or
(iii) make public improvements directly related to the
housing.
EFFECTIVE DATE: This section is effective for increments
spent after July 1, 2000, from districts for which certification
was requested after May 1, 1990.
Sec. 29. Minnesota Statutes 1998, section 469.177,
subdivision 1, is amended to read:
Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or
after adoption of a tax increment financing plan, the auditor of
any county in which the district is situated shall, upon request
of the authority, certify the original net tax capacity of the
tax increment financing district and that portion of the
district overlying any subdistrict as described in the tax
increment financing plan and shall certify in each year
thereafter the amount by which the original net tax capacity has
increased or decreased as a result of a change in tax exempt
status of property within the district and any subdistrict,
reduction or enlargement of the district or changes pursuant to
subdivision 4.
(b) In the case of a mined underground space development
district the county auditor shall certify the original net tax
capacity as zero, plus the net tax capacity, if any, previously
assigned to any subsurface area included in the mined
underground space development district pursuant to section
272.04.
(c) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May
1, 1988, if the classification under section 273.13 of property
located in a district changes to a classification that has a
different assessment ratio, the original net tax capacity of
that property must be redetermined at the time when its use is
changed as if the property had originally been classified in the
same class in which it is classified after its use is changed.
(d) (c) The amount to be added to the original net tax
capacity of the district as a result of previously tax exempt
real property within the district becoming taxable equals the
net tax capacity of the real property as most recently assessed
pursuant to section 273.18 or, if that assessment was made more
than one year prior to the date of title transfer rendering the
property taxable, the net tax capacity assessed by the assessor
at the time of the transfer. If substantial taxable
improvements were made to a parcel after certification of the
district and if the property later becomes tax exempt, in whole
or part, as a result of the authority acquiring the property
through foreclosure or exercise of remedies under a lease or
other revenue agreement or as a result of tax forfeiture, the
amount to be added to the original net tax capacity of the
district as a result of the property again becoming taxable is
the amount of the parcel's value that was included in original
net tax capacity when the parcel was first certified. The
amount to be added to the original net tax capacity of the
district as a result of enlargements equals the net tax capacity
of the added real property as most recently certified by the
commissioner of revenue as of the date of modification of the
tax increment financing plan pursuant to section 469.175,
subdivision 4.
(e) (d) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May
1, 1988, if the net tax capacity of a property increases because
the property no longer qualifies under the Minnesota
Agricultural Property Tax Law, section 273.111; the Minnesota
Open Space Property Tax Law, section 273.112; or the
Metropolitan Agricultural Preserves Act, chapter 473H, or
because platted, unimproved property is improved or three years
pass after approval of the plat under section 273.11,
subdivision 1, the increase in net tax capacity must be added to
the original net tax capacity.
(f) Each year the auditor shall also add to the original
net tax capacity of each economic development district an amount
equal to the original net tax capacity for the preceding year
multiplied by the average percentage increase in the market
value of all property included in the economic development
district during the five years prior to certification of the
district. In computing the average percentage increase in
market value, the auditor shall exclude the market value, as
estimated by the assessor, that is attributable to new
construction; extension of sewer, water, roads, or other public
utilities; or platting of the land.
(g) (e) The amount to be subtracted from the original net
tax capacity of the district as a result of previously taxable
real property within the district becoming tax exempt, or a
reduction in the geographic area of the district, shall be the
amount of original net tax capacity initially attributed to the
property becoming tax exempt or being removed from the
district. If the net tax capacity of property located within
the tax increment financing district is reduced by reason of a
court-ordered abatement, stipulation agreement, voluntary
abatement made by the assessor or auditor or by order of the
commissioner of revenue, the reduction shall be applied to the
original net tax capacity of the district when the property upon
which the abatement is made has not been improved since the date
of certification of the district and to the captured net tax
capacity of the district in each year thereafter when the
abatement relates to improvements made after the date of
certification. The county auditor may specify reasonable form
and content of the request for certification of the authority
and any modification thereof pursuant to section 469.175,
subdivision 4.
(h) (f) If a parcel of property contained a substandard
building that was demolished or removed and if the authority
elects to treat the parcel as occupied by a substandard building
under section 469.174, subdivision 10, paragraph (b), the
auditor shall certify the original net tax capacity of the
parcel using the greater of (1) the current net tax capacity of
the parcel, or (2) the estimated market value of the parcel for
the year in which the building was demolished or removed, but
applying the class rates for the current year.
EFFECTIVE DATE: This section is effective for districts
for which the request for certification was received by the
county auditor after June 30, 2000, and does not apply to
amendments adding geographic area to a district for which the
request for certification was received before July 1, 2000.
Sec. 30. Minnesota Statutes 1999 Supplement, 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 2, 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.
EFFECTIVE DATE: This section is effective for violations
occurring after the date of final enactment.
Sec. 31. Minnesota Statutes 1998, section 469.1771,
subdivision 2a, is amended to read:
Subd. 2a. [SUSPENSION OF DISTRIBUTION OF TAX INCREMENT.]
(a) If an authority fails to make a disclosure or to submit a
report containing the information required by section 469.175,
subdivisions 5 and 6, regarding a tax increment financing
district within the time provided in section 469.175,
subdivisions 5 and 6, or if a municipality fails to submit a
report containing the information required of section 469.175,
subdivision 6a, regarding a tax increment financing district
within the time provided in section 469.175, subdivision 6a, the
state auditor shall mail to the authority a written notice that
it or the municipality has failed to make the required
disclosure or to submit a required report with respect to a
particular district. The state auditor shall mail the notice on
or before the third Tuesday of August of the year in which the
disclosure or report was required to be made or submitted. The
notice must describe the consequences of failing to disclose or
submit a report as provided in paragraph (b). If the state
auditor has not received a copy of a disclosure or a report
described in this paragraph on or before the third Tuesday of
November of the year in which the disclosure or report was
required to be made or submitted, the state auditor shall mail a
written notice to the county auditor to hold the distribution of
tax increment from a particular district.
(b) Upon receiving written notice from the state auditor to
hold the distribution of tax increment, the county auditor shall
hold:
(1) 25 percent of the amount of tax increment that
otherwise would be distributed, if the distribution is made
after the third Friday in November but during the year in which
the disclosure or report was required to be made or submitted;
or
(2) 100 percent of the amount of tax increment that
otherwise would be distributed, if the distribution is made
after December 31 of the year in which the disclosure or report
was required to be made or submitted.
(c) Upon receiving the copy of the disclosure and all of
the reports described in paragraph (a) with respect to a
district regarding which the state auditor has mailed to the
county auditor a written notice to hold distribution of tax
increment, the state auditor shall mail to the county auditor a
written notice lifting the hold and authorizing the county
auditor to distribute to the authority or municipality any tax
increment that the county auditor had held pursuant to paragraph
(b). The state auditor shall mail the written notice required
by this paragraph within five working days after receiving the
last outstanding item. The county auditor shall distribute the
tax increment to the authority or municipality within 15 working
days after receiving the written notice required by this
paragraph.
(d) Notwithstanding any law to the contrary, any interest
that accrues on tax increment while it is being held by the
county auditor pursuant to paragraph (b) is not tax increment
and may be retained by the county.
(e) For purposes of sections 469.176, subdivisions 1a to
1g, and 469.177, subdivision 11, tax increment being held by the
county auditor pursuant to paragraph (b) is considered
distributed to or received by the authority or municipality as
of the time that it would have been distributed or received but
for paragraph (b).
EFFECTIVE DATE: This section is effective for reports due
in 2001 and later years.
Sec. 32. Minnesota Statutes 1998, section 469.1771, is
amended by adding a subdivision to read:
Subd. 4a. [INCREMENTS RECEIVED AFTER DURATION LIMIT.] (a)
This subdivision applies to payments made by the county auditor
as tax increments that:
(1) were received by the authority before July 1, 2000, for
a tax increment financing district after the maximum duration
limit for the district; and
(2) were not permitted to be made under section 469.176,
subdivision 1f, or any other provision of law as tax increments
after the duration limit for the district.
(b) The authority or the municipality may enter an
agreement with the county to repay these amounts in
installments, without interest, over a period not to exceed
three years.
(c) If a repayment agreement is entered or the authority or
municipality otherwise voluntarily repays these amounts, then
distributions of these repayments under subdivision 5 must be
made to each of the taxing jurisdictions, including the
municipality.
EFFECTIVE DATE: This section is effective the day
following final enactment and applies to tax increment financing
districts, regardless of whether the request for certification
was made before, on, or after August 1, 1979.
Sec. 33. Minnesota Statutes 1999 Supplement, 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 or intends
the abatement to phase in a property tax increase, as provided
in clause (b)(7); 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;
(5) help provide access to services for residents of the
political subdivision; or
(6) finance or provide public infrastructure; or
(7) phase in a property tax increase on the parcel
resulting from an increase of 50 percent or more in one year on
the estimated market value of the parcel, other than increase
attributable to improvement of the parcel.
EFFECTIVE DATE: This section is effective beginning with
taxes payable in 2001.
Sec. 34. Minnesota Statutes 1998, section 469.1813,
subdivision 4, is amended to read:
Subd. 4. [PROPERTY LOCATED IN TAX INCREMENT FINANCING
DISTRICTS.] The governing body of a governmental political
subdivision may not enter into a property tax abatement
agreement under sections 469.1812 to 469.1815 if the property
that provides for abatement of taxes on a parcel, if the
abatement will occur while the parcel is located in a tax
increment financing district.
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and later years.
Sec. 35. Minnesota Statutes 1999 Supplement, section
469.1813, subdivision 6, is amended to read:
Subd. 6. [DURATION LIMIT.] (a) A political subdivision may
grant an abatement for a period no longer than ten years, except
as provided under paragraph (b). 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 political subdivision proposing to abate taxes for a
parcel may request, in writing, that the other political
subdivisions in which the parcel is located grant an abatement
for the property. If one of the other political subdivisions
declines, in writing, to grant an abatement or if 90 days pass
after receipt of the request to grant an abatement without a
written response from one of the political subdivisions, the
duration limit for an abatement for the parcel is increased to
15 years. If the political subdivision which declined to grant
an abatement later grants an abatement for the parcel, the
15-year duration limit is reduced by one year for each year that
the declining political subdivision grants an abatement for the
parcel during the period of the abatement granted by the
requesting political subdivision. The duration limit may not be
reduced below the limit under paragraph (a).
EFFECTIVE DATE: This section is effective for taxes
payable in 2001 and thereafter.
Sec. 36. Laws 1997, chapter 231, article 1, section 19, is
amended by adding a subdivision to read:
Subd. 2a. [DEFINITION OF INCREMENT.] For purposes of this
section, "tax increments" and "revenues derived from tax
increments" have the meaning given in Minnesota Statutes,
section 469.174, subdivision 25, except that the definition
applies to all tax increment financing districts, regardless of
when the request for certification was made and regardless of
when the revenues were received, notwithstanding the effective
date of Minnesota Statutes, section 469.174, subdivision 25.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 37. [BROOKLYN PARK EDA; TIF DISTRICT NO. 18.]
The 1998 amendments to Minnesota Statutes, section 469.176,
subdivision 7, as set forth in Laws 1998, chapter 389, article
11, section 6, apply to the Brooklyn Park economic development
authority's tax increment financing district No. 18,
notwithstanding the effective date of the amendments.
EFFECTIVE DATE: This section is effective the day after
the governing body of the city of Brooklyn Park and its chief
clerical officer timely complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
Sec. 38. [CITY OF FOUNTAIN; TIF DURATION EXTENSION.]
The governing body of the city of Fountain may extend the
duration of tax increment financing district 1-1 through
December 31, 2008, notwithstanding the provision of Minnesota
Statutes, section 469.176, subdivision 1b. The extension under
this section is intended to correct an error in calculation of
the increment after a division of a parcel in the tax increment
financing district. As a result, the provisions of Minnesota
Statutes, section 469.1782, subdivision 1, do not apply to the
district.
EFFECTIVE DATE: This section is effective the day after
the governing bodies of the city, county, and school district,
and their chief clerical officers, timely complete their
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivisions 2 and 3.
Sec. 39. [MENDOTA HEIGHTS TAX INCREMENT FINANCING
DISTRICT; CONTINUATION.]
Notwithstanding the provisions of Minnesota Statutes,
section 469.1764, or any other law, tax increment financing
district No. 1 established by the city of Mendota Heights in
1981 shall continue in effect for its original authorized
duration, subject to the condition that, except for expenditures
to pay preexisting obligations described in Minnesota Statutes,
section 469.1764, subdivision 5, paragraphs (b) and (c), all
future expenditures of tax increment shall not exceed $4,500,000
and shall be limited to the city's freeway road project
substantially as described in the city's application for a grant
from the livable communities demonstration account of the
metropolitan livable communities fund.
EFFECTIVE DATE: This section is effective the day after
approval by the governing body of the city of Mendota Heights
and compliance with Minnesota Statutes, section 645.021,
subdivision 3.
Sec. 40. [ST. PAUL HOUSING AND REDEVELOPMENT AUTHORITY;
HOUSING DISTRICT.]
Subdivision 1. [AUTHORIZATION.] The governing body of the
housing and redevelopment authority of the city of St. Paul may
create a tax increment financing housing district as provided in
this section for a development containing both owner-occupied
and residential rental units for mixed income occupancy.
Subd. 2. [AREA.] The housing district authorized in this
section may only be created in the northeast quadrant of
downtown St. Paul, which is defined as the approximately 15-acre
area bounded by Interstate 94 on the north and east, Jackson
Street on the west, and Seventh Street on the south, together
with the west side of Jackson Street to midblock between
Interstate 94 and Seventh Street.
Subd. 3. [INCOME REQUIREMENTS FOR COMBINED OWNER-OCCUPIED
AND RESIDENTIAL RENTAL DEVELOPMENT.] (a) Notwithstanding the
income requirements in Minnesota Statutes, section 469.174,
subdivision 11, or 469.1761, a housing district in the northeast
quadrant means a type of tax increment financing district that
consists of a project, or a portion of a project, intended for
occupancy, in part, by persons of low and moderate income as
defined in chapter 462A, Title II, of the National Housing Act
of 1934; the National Housing Act of 1959; the United States
Housing Act of 1937, as amended; Title V of the Housing Act of
1949, as amended; any other similar present or future federal,
state, or municipal legislation, or the regulations promulgated
under any of those acts, as further set forth in this section.
Twenty percent of the units in the development in the housing
district must be occupied by individuals whose family income is
equal to or less than 50 percent of area median gross income and
an additional 60 percent of the units in the development in the
housing district must be occupied by individuals whose family
income is equal to or less than 115 percent of area median gross
income. Twenty percent of the units in the development in the
housing district shall not be subject to any income limitations.
(b) For purposes of this section, family income means the
median gross income for the area as determined under section 42
of the Internal Revenue Code of 1986, as amended. The income
requirements of this subdivision shall be deemed to be satisfied
if the sum of qualified owner-occupied units and qualified
residential rental units equals the required total number of
qualified units. Owner-occupied units must be initially
purchased and occupied by individuals whose family income
satisfies the income requirements of this subdivision. For
residential rental property, the income requirements of this
subdivision apply for the duration of the tax increment district.
(c) The development in the housing district, but not the
project, does not qualify under this subdivision if the fair
market value of the improvements which are constructed for
commercial uses or for uses other than owner-occupied and rental
mixed-income housing consists of more than 20 percent of the
total fair market value of the planned improvements in the
development plan or agreement. The fair market value of the
improvements may be determined using the cost of construction,
capitalized income, or other appropriate method of estimating
market value.
EFFECTIVE DATE: This section is effective the day after
the governing body of the city of St. Paul and its chief
clerical officer timely comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
Sec. 41. [WINONA TAX INCREMENT FINANCING DISTRICT;
RATIFICATION OF EXPENDITURE.]
For tax increment financing district No. 2, approved by the
city of Winona on August 1, 1980, the expenditure of tax
increments before January 1, 1998, to finance, in part, the
construction of improvements to the existing municipal
wastewater treatment plant is ratified and deemed an expenditure
within the geographic area of the tax increment financing
district, and Minnesota Statutes, section 469.1764, does not
apply to the tax increment financing district.
EFFECTIVE DATE: This section is effective upon approval by
the Winona city council and compliance with Minnesota Statutes,
section 645.021.
Sec. 42. [REDEVELOPMENT GRANTS; RICHFIELD.]
(a) For fiscal year 2001, $5,000,000 is appropriated from
the general fund to the commissioner of trade and economic
development for a redevelopment grant or grants to the city of
Richfield under Minnesota Statutes, sections 116J.561 to
116J.566.
(b) Grants made under this authority may only be used for
acquisition and site preparation of residential property in the
city of Richfield, located within an area consisting of no more
than two blocks immediately to the west of trunk highway 77,
bounded on the north by trunk highway 62 and on the south by
77th street. A property qualifies as a residential property
only if the land is improved with a building and at least 75
percent of the square footage of the building is for single
family or multiunit residential uses.
(c) For purposes of this grant, the local match requirement
under Minnesota Statutes, section 116J.566, and the requirements
to repay sales proceeds under section 116J.567, do not apply.
(d) The city of Richfield must submit a report to the
chairs of the tax committees of the house of representatives and
senate by no later than December 15, 2000, on the redevelopment
plans. This report must include details on the plans for and,
to the extent available, the actual use of the grant money,
including, but not limited to, information on:
(1) residential units purchased or to be purchased, by
location and type of unit;
(2) the cost of acquisition or the estimated cost of
acquisition of the units;
(3) the cost of demolition or relocation of buildings,
including any offsetting savings from buildings to be relocated
or other salvage;
(4) the cost of relocation of utilities;
(5) the cost of any other site preparation for development;
(6) plans for sale and use of the cleared land, including
estimates of the value of the land after clearance and site
preparation; and
(7) the plans for the ultimate use of the properties
acquired or to be acquired.
Sec. 43. [MINNESOTA MINERALS 21ST CENTURY FUND.]
Subdivision 1. [TRANSFER.] $30,000,000 is appropriated in
fiscal year 2001 from the general fund for transfer to the
Minnesota Minerals 21st Century Fund.
Subd. 2. [INFRASTRUCTURE MUST BE MADE AVAILABLE.] Any
entity controlling the infrastructure created by an investment
from the Minnesota Minerals 21st Century Fund from money
transferred under this section shall make the infrastructure
available to be utilized by other businesses or public
authorities at costs reasonably designed to meet operating and
maintenance needs of the infrastructure. The utilization of
this infrastructure by others only pertains to the
infrastructure capacity not needed by the primary recipient of
the investments by the Minnesota Minerals 21st Century Fund.
Sec. 44. [REPEALER.]
(a) Minnesota Statutes 1998, sections 469.055, subdivision
5; 469.101, subdivision 21; 469.135; 469.136; 469.137; 469.138;
469.139; 469.140; 469.174, subdivision 13; and 469.176,
subdivision 4a, are repealed.
(b) Minnesota Statutes 1998, section 469.175, subdivision
6a, is repealed.
EFFECTIVE DATE: Paragraph (a) is effective the day
following final enactment. Paragraph (b) is effective for
reports due beginning in 2001.
ARTICLE 12
FEDERAL UPDATE
Section 1. Minnesota Statutes 1999 Supplement, section
289A.02, subdivision 7, is amended to read:
Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 1998 1999.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 1999 Supplement, section
290.01, subdivision 19, is amended to read:
Subd. 19. [NET INCOME.] The term "net income" means the
federal taxable income, as defined in section 63 of the Internal
Revenue Code of 1986, as amended through the date named in this
subdivision, incorporating any elections made by the taxpayer in
accordance with the Internal Revenue Code in determining federal
taxable income for federal income tax purposes, and with the
modifications provided in subdivisions 19a to 19f.
In the case of a regulated investment company or a fund
thereof, as defined in section 851(a) or 851(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, 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, and the provisions of section 3001 of the
Miscellaneous Trade and Technical Corrections Act of 1999,
Public Law Number 106-36, 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, and the provisions of
sections 532, 534, 536, 537, and 538 of the Ticket to Work and
Work Incentives Improvement Act of 1999, Public Law Number
160-170, 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.
The Internal Revenue Code of 1986, as amended through
December 31, 1999, shall be in effect for taxable years
beginning after December 31, 1999.
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.
EFFECTIVE DATE: This section is effective the day
following final enactment except that the striking of text is
effective for taxable years beginning after December 31, 1999.
Sec. 3. Minnesota Statutes 1999 Supplement, section
290.01, subdivision 31, is amended to read:
Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 1998 1999.
EFFECTIVE DATE: This section is effective for tax years
beginning after December 31, 1999.
Sec. 4. Minnesota Statutes 1999 Supplement, section
290A.03, subdivision 15, is amended to read:
Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code"
means the Internal Revenue Code of 1986, as amended through
December 31, 1998 1999.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 1999 Supplement, section
291.005, subdivision 1, is amended to read:
Subdivision 1. Unless the context otherwise clearly
requires, the following terms used in this chapter shall have
the following meanings:
(1) "Federal gross estate" means the gross estate of a
decedent as valued and otherwise determined for federal estate
tax purposes by federal taxing authorities pursuant to the
provisions of the Internal Revenue Code.
(2) "Minnesota gross estate" means the federal gross estate
of a decedent after (a) excluding therefrom any property
included therein which has its situs outside Minnesota and (b)
including therein any property omitted from the federal gross
estate which is includable therein, has its situs in Minnesota,
and was not disclosed to federal taxing authorities.
(3) "Personal representative" means the executor,
administrator or other person appointed by the court to
administer and dispose of the property of the decedent. If
there is no executor, administrator or other person appointed,
qualified, and acting within this state, then any person in
actual or constructive possession of any property having a situs
in this state which is included in the federal gross estate of
the decedent shall be deemed to be a personal representative to
the extent of the property and the Minnesota estate tax due with
respect to the property.
(4) "Resident decedent" means an individual whose domicile
at the time of death was in Minnesota.
(5) "Nonresident decedent" means an individual whose
domicile at the time of death was not in Minnesota.
(6) "Situs of property" means, with respect to real
property, the state or country in which it is located; with
respect to tangible personal property, the state or country in
which it was normally kept or located at the time of the
decedent's death; and with respect to intangible personal
property, the state or country in which the decedent was
domiciled at death.
(7) "Commissioner" means the commissioner of revenue or any
person to whom the commissioner has delegated functions under
this chapter.
(8) "Internal Revenue Code" means the United States
Internal Revenue Code of 1986, as amended through December 31,
1998 1999.
EFFECTIVE DATE: This section is effective the day
following final enactment.
ARTICLE 13
MISCELLANEOUS
Section 1. Minnesota Statutes 1998, section 8.30, is
amended to read:
8.30 [COMPROMISE OF TAX AND FEE CLAIMS.]
Notwithstanding any other provisions of law to the
contrary, the attorney general shall have authority to
compromise taxes, fees, surcharges, assessments, penalties, and
interest in any case referred to the attorney general by the
commissioner of revenue, whether reduced to judgment or not,
where, in the attorney general's opinion, it shall be in the
best interests of the state to do so. Such a compromise of a
tax debt shall must be in such a form as prescribed by the
attorney general shall prescribe and shall be in writing signed
by the attorney general, the taxpayer or taxpayer's
representative, and the commissioner of revenue.
EFFECTIVE DATE: This section is effective for compromises
entered into after the date of final enactment.
Sec. 2. Minnesota Statutes 1998, section 16A.46, is
amended to read:
16A.46 [LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.]
The commissioner may issue a duplicate to an owner if the
loss or destruction of an unpaid warrant is documented by
affidavit. When the duplicate is issued, the original is void.
The commissioner may require an indemnity bond from the
applicant to the state for double the amount of the warrant for
anyone damaged by the issuance of the duplicate. The
commissioner may refuse to issue a duplicate of an unpaid state
warrant. If the commissioner acts in good faith the
commissioner is not liable, whether the application is granted
or denied. For an unpaid refund or rebate issued under a tax
law administered by the commissioner of revenue that has been
lost or destroyed, an affidavit is not required for the
commissioner to issue a duplicate if the duplicate is issued to
the same name and social security number as the original warrant
and that information is verified on a tax return filed by the
recipient.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 1999 Supplement, section
16D.09, subdivision 2, is amended to read:
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. A lien imposed under
section 270.69 need not be released unless after the write-off
of uncollectible debt there is no remaining collectible
liability recorded on the lien.
EFFECTIVE DATE: This section is effective for debts
written off on or after the day following final enactment.
Sec. 4. Minnesota Statutes 1999 Supplement, section
168.012, subdivision 1, is amended to read:
Subdivision 1. [VEHICLES EXEMPT FROM TAX AND REGISTRATION
FEES.] (a) The following vehicles are exempt from the provisions
of this chapter requiring payment of tax and registration fees,
except as provided in subdivision 1c:
(1) vehicles owned and used solely in the transaction of
official business by the federal government, the state, or any
political subdivision;
(2) vehicles owned and used exclusively by educational
institutions and used solely in the transportation of pupils to
and from such institutions;
(3) vehicles used solely in driver education programs at
nonpublic high schools;
(4) vehicles owned by nonprofit charities and used
exclusively to transport disabled persons for educational
purposes;
(5) vehicles owned and used by honorary consul;
(6) ambulances owned by ambulance services licensed under
section 144E.10, the general appearance of which is
unmistakable; and
(7) vehicles owned by a commercial driving school licensed
under section 171.34, or an employee of a commercial driving
school licensed under section 171.34, and the vehicle is used
exclusively for driver education and training.
(b) Vehicles owned by the federal government, municipal
fire apparatuses including fire-suppression support vehicles,
police patrols and ambulances, the general appearance of which
is unmistakable, shall not be required to register or display
number plates.
(c) Unmarked vehicles used in general police work, liquor
investigations, arson investigations, and passenger automobiles,
pickup trucks, and buses owned or operated by the department of
corrections shall be registered and shall display appropriate
license number plates which shall be furnished by the registrar
at cost. Original and renewal applications for these license
plates authorized for use in general police work and for use by
the department of corrections must be accompanied by a
certification signed by the appropriate chief of police if
issued to a police vehicle, the appropriate sheriff if issued to
a sheriff's vehicle, the commissioner of corrections if issued
to a department of corrections vehicle, or the appropriate
officer in charge if issued to a vehicle of any other law
enforcement agency. The certification must be on a form
prescribed by the commissioner and state that the vehicle will
be used exclusively for a purpose authorized by this section.
(d) Unmarked vehicles used by the departments of revenue
and labor and industry, fraud unit, in conducting seizures or
criminal investigations must be registered and must display
passenger vehicle classification license number plates which
shall be furnished at cost by the registrar. Original and
renewal applications for these passenger vehicle license plates
must be accompanied by a certification signed by the
commissioner of revenue or the commissioner of labor and
industry. The certification must be on a form prescribed by the
commissioner and state that the vehicles will be used
exclusively for the purposes authorized by this section.
(e) Unmarked vehicles used by the division of disease
prevention and control of the department of health must be
registered and must display passenger vehicle classification
license number plates. These plates must be furnished at cost
by the registrar. Original and renewal applications for these
passenger vehicle license plates must be accompanied by a
certification signed by the commissioner of health. The
certification must be on a form prescribed by the commissioner
and state that the vehicles will be used exclusively for the
official duties of the division of disease prevention and
control.
(f) All other motor vehicles shall be registered and
display tax-exempt number plates which shall be furnished by the
registrar at cost, except as provided in subdivision 1c. All
vehicles required to display tax-exempt number plates shall have
the name of the state department or political subdivision,
nonpublic high school operating a driver education program, or
licensed commercial driving school, on the vehicle plainly
displayed on both sides thereof in letters not less than 2-1/2
inches high and one-half inch wide; except that each state
hospital and institution for the mentally ill and mentally
retarded may have one vehicle without the required
identification on the sides of the vehicle, and county social
service agencies may have vehicles used for child and vulnerable
adult protective services without the required identification on
the sides of the vehicle. Such identification shall be in a
color giving contrast with that of the part of the vehicle on
which it is placed and shall endure throughout the term of the
registration. The identification must not be on a removable
plate or placard and shall be kept clean and visible at all
times; except that a removable plate or placard may be utilized
on vehicles leased or loaned to a political subdivision or to a
nonpublic high school driver education program.
Sec. 5. Minnesota Statutes 1998, section 270.063, is
amended by adding a subdivision to read:
Subd. 4. [FEDERAL TAX REFUND OFFSET FEES.] For fees
charged by the department of the treasury of the United States
for the offset of federal tax refunds that are deducted from the
refund amounts remitted to the commissioner, the unpaid debts of
the taxpayers whose refunds are being offset to satisfy the
debts are reduced only by the actual amount of the refund
payments received by the commissioner.
EFFECTIVE DATE: This section is effective for offsets of
refunds made on or after the day following final enactment.
Sec. 6. Minnesota Statutes 1999 Supplement, 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 liability reported on
a return was filed entered into the records of the commissioner
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
date of the return made by the commissioner; or, in the case of
an amended return filed by the taxpayer, the assessment date is
the date additional liability reported on the return, if any,
was filed with entered into the records of 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.
EFFECTIVE DATE: This section is effective for assessments
made on or after the day following final enactment.
Sec. 7. Minnesota Statutes 1999 Supplement, 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 or a municipal ambulance service, 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.
EFFECTIVE DATE: This section is effective for claims
submitted after June 30, 2000.
Sec. 8. Minnesota Statutes 1998, section 270A.03,
subdivision 7, is amended to read:
Subd. 7. [REFUND.] "Refund" means an individual income tax
refund or political contribution refund, pursuant to chapter
290, or a property tax credit or refund, pursuant to chapter
290A.
For purposes of this chapter, lottery prizes, as set forth
in section 349A.08, subdivision 8, and amounts granted to
persons by the legislature on the recommendation of the joint
senate-house of representatives subcommittee on claims shall be
treated as refunds.
In the case of a joint property tax refund payable to
spouses under chapter 290A, the refund shall be considered as
belonging to each spouse in the proportion of the total refund
that equals each spouse's proportion of the total income
determined under section 290A.03, subdivision 3. In the case of
a joint income tax refund under chapter 289A, the refund shall
be considered as belonging to each spouse in the proportion of
the total refund that equals each spouse's proportion of the
total taxable income determined under section 290.01,
subdivision 29. The commissioner shall remit the entire refund
to the claimant agency, which shall, upon the request of the
spouse who does not owe the debt, determine the amount of the
refund belonging to that spouse and refund the amount to that
spouse. For court fines, fees, and surcharges and court-ordered
restitution under section 611A.04, subdivision 2, the notice
provided by the commissioner of revenue under section 270A.07,
subdivision 2, paragraph (b), serves as the appropriate legal
notice to the spouse who does not owe the debt.
EFFECTIVE DATE: This section is effective for notices
provided after June 30, 2000.
Sec. 9. Minnesota Statutes 1998, section 270A.07,
subdivision 1, is amended to read:
Subdivision 1. [NOTIFICATION REQUIREMENT.] Any claimant
agency, seeking collection of a debt through setoff against a
refund due, shall submit to the commissioner information
indicating the amount of each debt and information identifying
the debtor, as required by section 270A.04, subdivision 3.
For each setoff of a debt against a refund due, the
commissioner shall charge a fee of $10. The claimant agency may
add the fee to the amount of the debt.
The claimant agency shall notify the commissioner when a
debt has been satisfied or reduced by at least $200 within 30
days after satisfaction or reduction.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 1999 Supplement, 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, or shall be sent to the
debtor at the time of setoff if the entire refund is set off.
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; (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. The notice shall include an explanation of the right
of the spouse who does not owe the debt to request the claimant
agency to repay the spouse's portion of a joint refund.
EFFECTIVE DATE: This section is effective for notices
provided after June 30, 2000.
Sec. 11. Minnesota Statutes 1998, section 289A.35, is
amended to read:
289A.35 [ASSESSMENTS; COMMISSIONER FILED RETURNS.]
The commissioner shall has the authority to make
determinations, corrections, and assessments with respect to
state taxes, including interest, additions to taxes, and
assessable penalties. The commissioner may audit and adjust the
taxpayer's computation of federal taxable income, items of
federal tax preferences, or federal credit amounts to make them
conform with the provisions of chapter 290 or section 298.01.
If a taxpayer fails to file a required return, the commissioner,
from information in the commissioner's possession or obtainable
by the commissioner, may make a return for the taxpayer. The
return will be prima facie correct and valid. If a return has
been filed, the commissioner shall examine enter the liability
reported on the return and may make any audit or investigation
that is considered necessary. The commissioner may use
statistical or other sampling techniques consistent with
generally accepted auditing standards in examining returns or
records and making assessments.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 12. Minnesota Statutes 1999 Supplement, 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, 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 60 days from the date of
notice. In that case interest is imposed from the date of
notice to the date of payment.
EFFECTIVE DATE: This section is effective for penalties
assessed after the date of final enactment.
Sec. 13. Minnesota Statutes 1998, section 296A.03,
subdivision 5, is amended to read:
Subd. 5. [FORM OF APPLICATION; BOND.] (a) A written
application shall be made in the form and manner prescribed by
the commissioner.
(b) The commissioner shall also require the applicant or
licensee to deposit with the state treasurer securities of the
United States government or the state of Minnesota or to execute
and file a bond, with a corporate surety approved by the
commissioner, to the state of Minnesota in an amount to be
determined by the commissioner and in a form to be fixed by the
commissioner and approved by the attorney general, and which
shall be conditioned for the payment when due of all excise
taxes, inspection fees, penalties, and accrued interest arising
in the ordinary course of business or by reason of any
delinquent money which may be due the state. The bond shall
cover all places of business within the state where petroleum
products are received by the licensee. The applicant or
licensee shall designate and maintain an agent in this state
upon whom service may be made for all purposes of this section.
(c) An initial applicant for a distributor's license shall
furnish a bond in a minimum sum of $3,000 for the first year.
(d) The commissioner, on reaching the opinion that the bond
given by a licensee is inadequate in amount to fully protect the
state, shall require an additional bond in such amount as the
commissioner deems sufficient.
(e) A licensee who desires to be exempt from depositing
securities or furnishing such bond shall furnish to the
commissioner an itemized financial statement showing the assets
and the liabilities of the applicant. If it appears to the
commissioner, from the financial statement or otherwise, that
the applicant is financially responsible, then the commissioner
may exempt the applicant from depositing such securities or
furnishing such bond until the commissioner otherwise orders.
(f) When the surety upon any bond issued under the
provisions of this chapter have fulfilled the conditions of such
bond and compensated the state for any loss occasioned by any
act or omission of any licensee under this chapter, such surety
shall be subrogated to all the rights of the state in connection
with the transaction where such loss occurred.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 14. Minnesota Statutes 1998, section 296A.21,
subdivision 2, is amended to read:
Subd. 2. [COLLECTION.] No action shall be brought for the
collection of delinquent taxes and inspection fees under section
270.68 unless commenced within five years after the date of
assessment of the taxes and fees.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 15. Minnesota Statutes 1998, section 296A.21,
subdivision 3, is amended to read:
Subd. 3. [FALSE OR FRAUDULENT REPORT.] In the case of a
false or fraudulent report with intent to evade tax taxes or
inspection fee fees or of a failure to file a report, the taxes
or fees may be assessed at any time, and a proceeding in court
for their collection must be begun within five years after the
assessment.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 16. Minnesota Statutes 1998, section 296A.22,
subdivision 6, is amended to read:
Subd. 6. [SALE PROHIBITED UNDER CERTAIN CONDITIONS.] No
petroleum product shall be unloaded or sold by any person or
distributor whose tax and inspection fees are the basis for
collection action under subdivision 2.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 17. Minnesota Statutes 1999 Supplement, section
298.24, subdivision 1, is amended to read:
Subdivision 1. (a) For concentrate produced in 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 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 for
the gross domestic product 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.
EFFECTIVE DATE: This section is effective for concentrates
produced in 2000 and thereafter.
Sec. 18. [ITASCA AND CASS COUNTIES; DISTRIBUTION OF CASINO
TAX REVENUES.]
Notwithstanding any contrary provision of law, in the case
of one tribal government that operates three casinos, two of
which are located in Cass county, and one of which is located in
Itasca county, the payments to the counties under Minnesota
Statutes, section 270.60, subdivision 4, attributable to
agreements with that tribe, must be distributed, two-thirds to
Cass county, and one-third to Itasca county. This section
applies to distributions in 2001, 2002, and 2003.
EFFECTIVE DATE: This section is effective upon approval by
the governing bodies of both Itasca county and Cass county, and
compliance by both of them with Minnesota Statutes, section
645.021, subdivision 3.
Sec. 19. [MINNESOTA WORKERS' COMPENSATION ASSIGNED RISK
PLAN SURPLUS TRANSFER.]
On or before July 15, 2000, the commissioner of finance
must transfer $110,000,000 of assets of the assigned risk plan
to the general fund.
EFFECTIVE DATE: This section is effective the day
following final enactment.
Sec. 20. [INSTRUCTION TO REVISOR.]
Notwithstanding any law to the contrary, if a section of
Minnesota Statutes repealed and recodified by Laws 2000, chapter
394, is amended by this act, the amendment supersedes the
provisions of chapter 394, and the revisor shall codify the
amendment consistent with the recodification of the affected
section by Laws 2000, chapter 394.
Sec. 21. [REPEALER.]
Minnesota Rules, part 8160.0300, subpart 4, is repealed.
EFFECTIVE DATE: This section is effective for assessments
made on or after the day following final enactment.
Presented to the governor May 11, 2000
Signed by the governor May 15, 2000, 11:25 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes