Office of the Revisor of Statutes
Minnesota Session Laws - 2001, 1st Special Session
Key: (1) language to be deleted (2) new language
CHAPTER 5-H.F.No. 1
An act relating to the financing and operation of
government in this state; providing for payment of a
sales tax rebate; providing for education finance;
providing property tax reform; making changes to
income, corporate franchise, sales and use, property,
motor vehicle sales, motor vehicle registration,
mortgage registry, deed, insurance premiums,
MinnesotaCare, motor fuels, cigarette and tobacco,
liquor, lawful gambling, minerals, estate, and special
taxes; changing and allowing tax credits,
subtractions, and exemptions; conforming with changes
in federal income tax provisions; providing for
allocation of income; changing property tax valuation,
assessment, levy, classification, credit, aid,
homestead, exemption, review, appeal, and distribution
provisions; imposing a state property tax levy on
certain property and providing for use of the
proceeds; providing a property tax homestead credit;
imposing levy limits; changing certain property tax
notice and hearing provisions and authorizing waivers;
abolishing certain tax levies for metropolitan
transit, establishing a transit fund, and dedicating
certain tax proceeds to the fund; providing for local
government aids; changing certain provisions relating
to biomass facilities; providing for utility
pass-through of certain property tax reductions;
allowing utility rate adjustments for lowering
emissions; providing for uniform sales and use tax
administration; providing for taxation and incentive
payments on forest lands; providing for state takeover
of certain costs of district court administration and
out-of-home placements; reducing taconite production
tax rates and providing for state aid; providing for
the distribution of certain taconite production tax
payments; providing for electronic filing and payment
of taxes; changing procedures for disposition of
seized contraband; changing tax increment financing
provisions; providing for biomedical innovation
initiative grants; changing budget reserve provisions;
providing for payments in lieu of taxes; changing
provisions relating to property tax refunds;
authorizing special taxing districts; changing and
clarifying tax administration, collection,
enforcement, interest, and penalty provisions;
transferring administration and enforcement of the
Unfair Cigarette Sales Act from the commissioner of
revenue to the commissioner of commerce; changing
revenue recapture provisions; authorizing abatements
and waivers of fees and certain taxes in disaster
areas; changing and imposing fees; changing debt
collection provisions for student loans; providing
certain powers to certain political subdivisions;
providing certain duties and powers to the
commissioner of revenue; authorizing publication of
names of certain delinquent taxpayers; authorizing
border city allocations; changing provisions relating
to tax-forfeited lands and providing for tax-forfeited
lands transfers; defining a lottery and other terms;
classifying data; requiring studies and reports;
imposing penalties; appropriating money; amending
Minnesota Statutes 2000, sections 16A.152,
subdivisions 1a, 2; 16D.08, subdivision 2; 45.011,
subdivision 1; 69.021, subdivision 5; 84.922, by
adding a subdivision; 88.49, subdivisions 5, 9a;
88.491, subdivision 2; 97A.065, subdivision 2, as
amended; 103D.905, subdivision 3; 115B.24, subdivision
2; 116J.424; 123A.45, subdivisions 2, 6; 123B.42,
subdivision 3; 123B.53, subdivisions 2, 4, 5; 123B.54;
123B.75, subdivision 5; 123B.92, subdivision 9;
126C.01, subdivision 3; 126C.10, subdivisions 1, 2;
126C.13, subdivision 4; 126C.17, subdivisions 1, 2, 5,
6, 7, 8, by adding subdivisions; 126C.21, subdivision
4; 126C.48, subdivision 8; 126C.63, subdivision 8;
126C.69, subdivisions 2, 3, 9, 12, 15; 144.3831,
subdivision 2; 168.013, subdivision 1a; 168.017,
subdivision 3; 174.24, subdivision 3b; 179A.101,
subdivision 1; 179A.102, subdivision 6; 179A.103,
subdivision 1; 216B.2424, subdivision 5; 239.101,
subdivision 3; 256L.02, subdivision 3; 270.06; 270.07,
subdivision 3, by adding a subdivision; 270.271,
subdivisions 1, 3; 270.60, by adding a subdivision;
270.70, subdivision 13; 270.73, subdivision 1;
270.771; 270.78; 270A.03, subdivisions 5, 7; 270A.11;
270B.02, subdivisions 2, 3; 270B.03, subdivision 6;
271.01, subdivision 5; 271.21, subdivision 2; 272.02,
subdivisions 10, 22, by adding subdivisions; 273.061,
subdivisions 1, 2; 273.072, subdivision 1; 273.11,
subdivisions 1a, 14, by adding subdivisions; 273.1104,
subdivision 2; 273.111, subdivision 4; 273.121;
273.124, subdivisions 1, 8, 11, 13, 14; 273.13,
subdivisions 22, 23, 24, 25, 31; 273.134; 273.135,
subdivisions 1, 2; 273.136, subdivision 2; 273.1391,
subdivisions 2, 3; 273.1392; 273.1393; 273.1398,
subdivision 4a, by adding subdivisions; 273.166,
subdivisions 2, 3, 5; 273.42, by adding a subdivision;
274.01, subdivision 1; 274.13, subdivision 1; 275.02;
275.065, subdivisions 3, 5a, 6; 275.066; 275.07,
subdivision 1; 275.16; 275.28, subdivision 1; 275.61;
275.62, subdivision 1; 275.70, subdivision 5, by
adding subdivisions; 276.04, subdivision 2; 276.11,
subdivision 1; 276A.01, subdivisions 2, 3; 276A.06,
subdivision 3; 281.17; 282.01, subdivisions 1, 1b, 1c,
1d, 1e; 282.04, subdivision 2; 282.241; 287.035;
287.04; 287.08; 287.12; 287.13, by adding a
subdivision; 287.20, subdivisions 2, 9; 287.21,
subdivision 1; 287.28; 289A.02, subdivision 7, by
adding a subdivision; 289A.12, subdivision 3; 289A.18,
subdivision 4, as amended; 289A.20, subdivisions 1, 2,
4; 289A.26, subdivision 2a; 289A.31, subdivision 7;
289A.50, subdivisions 2, 2a; 289A.55, subdivision 9;
289A.60, subdivisions 1, 2, 7, 21, as amended, by
adding a subdivision; 290.01, subdivisions 6b, 7, 19,
19b, 19c, 19d, 22, 29, 31, by adding a subdivision;
290.014, subdivision 5; 290.05, subdivision 1; 290.06,
subdivisions 2c, 22, 23; 290.067, subdivisions 2, 2b;
290.0671, subdivisions 1, 1a, 7; 290.0674, subdivision
1; 290.0675, subdivisions 1, 3; 290.091, subdivision
2; 290.0921, subdivisions 1, 2, 3, 6; 290.0922,
subdivision 2; 290.093; 290.095, subdivision 2;
290.17, subdivisions 1, 4; 290.191, subdivision 2;
290.21, subdivision 4; 290.92, subdivision 23;
290.9725; 290A.03, subdivisions 6, 12, 13, 15;
290A.04, subdivisions 2, 2a, 2h, 4; 290A.15; 291.005,
subdivision 1; 295.50, subdivisions 3, 4, 15; 295.52,
subdivisions 4, 7; 295.55, subdivision 4; 295.57,
subdivision 1; 296A.07, subdivision 4; 296A.08,
subdivision 3; 296A.15, subdivisions 1, 7; 296A.16,
subdivision 2; 296A.21, subdivisions 1, 4; 296A.24,
subdivisions 1, 2; 297A.01, subdivision 5; 297A.07,
subdivision 3; 297A.25, subdivisions 3, 11, 28;
297A.61, subdivisions 2, 3, 4, 6, 7, 9, 10, 12, 14,
17, 19, 22, 23, by adding subdivisions; 297A.64,
subdivisions 3, 4; 297A.66, subdivisions 1, 3;
297A.67, subdivisions 2, 8, 23, 24, 25, by adding
subdivisions; 297A.68, subdivisions 2, 3, 5, 11, 13,
14, 18, 19, 25, by adding a subdivision; 297A.69,
subdivision 2; 297A.70, subdivisions 1, 2, 3, 4, 7, 8,
10, 13, 14; 297A.71, subdivision 6, by adding
subdivisions; 297A.72, subdivision 1; 297A.75;
297A.77, subdivision 1; 297A.80; 297A.82, subdivision
3, by adding a subdivision; 297A.86, subdivision 1;
297A.89, subdivision 1; 297A.90, subdivision 1;
297A.91; 297A.92, subdivision 2; 297A.94, as amended;
297A.99, subdivisions 7, 9, 11; 297B.03; 297B.09,
subdivision 1; 297E.02, subdivision 4; 297E.16,
subdivisions 1, 2; 297F.04, subdivision 1; 297F.09,
subdivision 7; 297F.13, subdivision 4; 297F.16,
subdivision 4; 297F.20, subdivision 3; 297F.21,
subdivisions 1, 2, 3; 297G.09, subdivision 6; 297G.15,
subdivision 4; 297G.16, subdivisions 5, 7; 297G.20,
subdivisions 3, 4; 297H.04, by adding a subdivision;
297H.06, by adding a subdivision; 297I.05, subdivision
5; 297I.20; 297I.35, subdivision 2; 297I.40,
subdivisions 1, 2, 7; 297I.85, subdivision 7; 298.01,
subdivisions 3b, 4c; 298.018, subdivisions 1, 2;
298.17; 298.22, subdivision 2, by adding a
subdivision; 298.2211, subdivision 2; 298.2213,
subdivision 3; 298.2214, subdivision 1; 298.223,
subdivision 1; 298.225, subdivision 1; 298.227;
298.24, subdivision 1; 298.28, subdivisions 3, 4, 6,
7, 9a, 10; 298.282, subdivision 1; 282.292,
subdivision 2; 298.293; 298.296, subdivision 2;
298.2961; 298.298; 298.75, subdivisions 1, 2; 299D.03,
subdivision 5; 325D.33, subdivision 8, by adding a
subdivision; 325D.405; 325D.415; 345.41; 349.19,
subdivision 2a; 357.021, subdivision 1a; 383A.80,
subdivision 1; 383B.80, subdivision 1; 461.12, by
adding a subdivision; 469.040, subdivision 5; 469.169,
by adding a subdivision; 469.1732, subdivision 1;
469.174, subdivisions 3, 10, 10a, 12; 469.175,
subdivisions 1, 6b, by adding a subdivision; 469.176,
subdivisions 1b, 1e, 3, 4g, by adding subdivisions;
469.1763, subdivision 6; 469.177, subdivisions 1, 11,
by adding a subdivision; 469.1771, subdivision 1;
469.178, by adding a subdivision; 469.1812,
subdivision 2; 469.1813, subdivision 6; 469.1814, by
adding a subdivision; 469.202, subdivision 2; 469.303;
471.58; 473.388, subdivisions 4, 7; 473.446,
subdivision 1; 473.843, subdivision 3; 473F.08,
subdivision 3; 475.53, subdivision 4; 475.58,
subdivision 1, as amended; 477A.011, subdivisions 35,
36; 477A.013, subdivisions 1, 9; 477A.03, subdivision
2; 477A.12; 477A.14; 480.181, subdivision 1; 487.33,
subdivision 5; 488A.03, by adding a subdivision;
488A.20, by adding a subdivision; 574.34, subdivision
1; 609.75, subdivision 1; Laws 1986, chapter 396,
section 5; Laws 1992, chapter 499, article 7, section
31, as amended; Laws 1997, chapter 231, article 1,
section 19, subdivision 3, as amended; Laws 1997,
chapter 231, article 1, section 22; Laws 1998, chapter
389, article 16, section 35, subdivision 1; Laws 1999,
chapter 243, article 4, section 19; Laws 2000, chapter
479, article 2, section 1; Laws 2000, chapter 490,
article 8, section 17; Laws 2000, chapter 490, article
11, section 26; proposing coding for new law in
Minnesota Statutes, chapters 12; 16A; 103B; 116J;
126C; 174; 216B; 270; 272; 273; 275; 290; 295; 296A;
297A; 297F; 297H; 383A; 469; 471; 477A; 480; 484;
proposing coding for new law as Minnesota Statutes,
chapters 144F; 290C; repealing Minnesota Statutes
2000, sections 16A.1521; 16A.76; 126C.10, subdivisions
9, 10, 11, 12, 19, 20, 21, 22; 126C.11; 126C.13,
subdivisions 1, 2, 3; 126C.30; 126C.31; 126C.32;
126C.33; 126C.34; 126C.35; 126C.36; 270.31; 270.32;
270.33; 270.34; 270.35; 270.36; 270.37; 270.38;
270.39; 273.126; 273.13, subdivision 24a; 273.1382;
273.1399; 275.078; 275.08, subdivision 1e; 289A.60,
subdivisions 3, 15; 290.06, subdivisions 25, 26;
290.0673; 290.095, subdivisions 1a, 7; 290.21,
subdivision 3; 290.23; 290.25; 290.31, subdivisions 2,
2a, 3, 4, 5, 19; 290.35; 290.9726, subdivision 7;
290A.04, subdivision 2j; 296A.16, subdivision 6;
296A.24, subdivision 3; 297A.61, subdivision 16;
297A.62, subdivision 2; 297A.64, subdivision 1;
297A.68, subdivision 21; 297A.71, subdivisions 2, 15,
16; 297B.032; 297E.16, subdivision 3; 297F.21,
subdivision 4; 297G.20, subdivision 5; 297I.05,
subdivision 8; 297I.30, subdivision 3; 325D.33,
subdivision 5; 462A.071; 469.1732, subdivision 2;
469.1734, subdivision 4; 469.1782, subdivision 1;
473.3915; 473.446, subdivisions 1a, 1b; Laws 1988,
chapter 426, section 1; Laws 1988, chapter 702,
section 16; Laws 1992, chapter 511, article 2, section
52, as amended; Laws 1996, chapter 471, article 8,
section 45; Laws 1999, chapter 243, article 6,
sections 14, 15; Laws 2000, chapter 490, article 6,
section 17; Minnesota Rules, parts 8120.0200;
8120.0500; 8120.0700; 8120.0900; 8120.1300; 8120.1600;
8120.2000; 8120.2100; 8120.2200; 8120.2300; 8120.2500;
8120.2700; 8120.2800; 8120.3000; 8120.3200; 8120.4300;
8120.4400; 8120.4500; 8120.4600; 8120.4900; 8120.5000;
8120.5100; 8120.5300.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
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 1999.
(c) Information concerning the amount of sales tax paid at
various income levels is contained in the Minnesota tax
incidence report, which is written by the commissioner of
revenue and presented to the legislature according to Minnesota
Statutes, section 270.0682.
(d) It is fair and reasonable to use information contained
in the Minnesota tax incidence report to determine the
proportionate share of the sales tax rebate due each eligible
taxpayer since no effective or practical mechanism exists for
determining the amount of actual sales tax paid by each eligible
individual.
Sec. 2. [SALES TAX REBATE.]
Subdivision 1. [ELIGIBILITY; REBATE BASED ON INCOME.] An
individual who was a resident of Minnesota for any part of 1999,
and filed a 1999 Minnesota income tax return on or before
November 30, 2001, and had a tax liability before refundable
credits on that return of at least $1 and who was not allowed to
be claimed as a dependent on a 1999 federal income tax return
filed by another person is eligible for a sales tax rebate based
on income under either subdivision 2 or 3.
Subd. 2. [MARRIED JOINT AND HEAD OF HOUSEHOLD FILERS.] The
sales tax rebate for taxpayers who qualify under subdivision 1
and are married filing joint or head of household filers is
computed according to the following schedule:
Income Sales Tax Rebate
less than $2,500 $233
at least $2,500 but less than $5,000 $289
at least $5,000 but less than $10,000 $303
at least $10,000 but less than $15,000 $334
at least $15,000 but less than $20,000 $379
at least $20,000 but less than $25,000 $409
at least $25,000 but less than $30,000 $436
at least $30,000 but less than $35,000 $474
at least $35,000 but less than $40,000 $516
at least $40,000 but less than $45,000 $560
at least $45,000 but less than $50,000 $595
at least $50,000 but less than $60,000 $609
at least $60,000 but less than $70,000 $636
at least $70,000 but less than $80,000 $692
at least $80,000 but less than $90,000 $748
at least $90,000 but less than $100,000 $809
at least $100,000 but less than $120,000 $877
at least $120,000 but less than $140,000 $960
at least $140,000 but less than $160,000 $1,038
at least $160,000 but less than $180,000 $1,111
at least $180,000 but less than $200,000 $1,181
at least $200,000 but less than $400,000 $1,510
at least $400,000 but less than $600,000 $1,987
at least $600,000 but less than $800,000 $2,384
at least $800,000 but less than $1,000,000 $2,733
$1,000,000 and over $3,250
Subd. 3. [SINGLE AND MARRIED SEPARATE FILERS.] The sales
tax rebate for individuals who qualify under subdivision 1 as
single or married filing separately must be computed according
to the following schedule:
Income Sales Tax Rebate
less than $2,500 $118
at least $2,500 but less than $5,000 $124
at least $5,000 but less than $10,000 $165
at least $10,000 but less than $15,000 $196
at least $15,000 but less than $20,000 $227
at least $20,000 but less than $25,000 $253
at least $25,000 but less than $30,000 $305
at least $30,000 but less than $40,000 $329
at least $40,000 but less than $50,000 $363
at least $50,000 but less than $70,000 $465
at least $70,000 but less than $100,000 $644
at least $100,000 but less than $140,000 $776
at least $140,000 but less than $200,000 $937
at least $200,000 but less than $400,000 $1,270
$400,000 and over $1,625
Subd. 4. [NONRESIDENTS.] Individuals who were not
residents of Minnesota for any part of 1999 and who paid more
than $10 in Minnesota sales tax under Minnesota Statutes,
chapter 297A, on nonbusiness consumer purchases in that year
qualify for a rebate under this subdivision only. Qualifying
nonresidents must file a claim for rebate on a form prescribed
by the commissioner by November 30, 2001. 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) 40.45 percent of that amount; or
(2) the maximum amount for which the claimant would have
been eligible as determined under subdivision 2 if the taxpayer
filed the 1999 federal income tax return as a married taxpayer
filing jointly or head of household, or as determined under
subdivision 3 for other taxpayers.
Subd. 5. [DEFINITION OF INCOME.] "Income," for purposes of
this section other than subdivision 4, is taxable income as
defined in section 63 of the Internal Revenue Code of 1986, as
amended through December 31, 1998, 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 1999 income tax return, including subsequent
adjustments to that return made within the time limits specified
in subdivision 12. 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 subdivision 2 or 3
multiplied by the percentage determined pursuant to Minnesota
Statutes, section 290.06, subdivision 2c, paragraph (e), as
calculated on the original 1999 income tax return, including
subsequent adjustments to that return made within the time
limits specified in subdivision 12. For purposes of subdivision
4, "income" is taxable income as defined in section 63 of the
Internal Revenue Code of 1986, as amended through December 31,
1998, and reported on the taxpayer's original federal tax return
for the first taxable year beginning after December 31, 1998.
Subd. 6. [SOCIAL SECURITY AND PUBLIC PENSION
RECIPIENTS.] (a) An individual qualifies for a rebate of $118
under this subdivision if the individual:
(1) was a resident of Minnesota for all of calendar year
1999;
(2) is not eligible for a rebate under subdivision 9;
(3) attained the age of 18 on or before December 31, 1999;
and
(4)(i) received social security benefits as defined in
section 86(d)(1) of the Internal Revenue Code of 1986, as
amended through December 31, 2000, in calendar year 1999; or
(ii) received federal, state or local public pension or
disability benefits in calendar year 1999.
(b) An individual or married couple who qualifies for a
rebate under both this subdivision and subdivision 1 is eligible
for the rebate under whichever subdivision provides a larger
amount.
(c) If the Social Security Administration, Railroad
Retirement Board, or the administrator of a public pension is
paying benefits to a recipient by electronic funds transfers in
calendar year 2001, the commissioner may pay the rebate under
this subdivision through electronic funds transfer to the same
financial institution and into the same account into which those
benefits are transferred in calendar year 2001.
(d) For purposes of this subdivision, "public pension plan
administrator" means (1) a state and local public pension
administrator, (2) the federal Civil Service Retirement System,
(3) the United States Department of Defense for the military
retirement and survivors benefit programs, and (4) the Federal
Employees Retirement System.
(e) A state and local public pension administrator is an
entity paying benefits under a pension plan enumerated in
Minnesota Statutes, section 356.20, subdivision 2. Each state
and local pension administrator shall provide to the
commissioner of revenue, in a form the commissioner prescribes,
a list of individuals to whom it pays benefits that meet the
requirements of paragraph (a), clauses (1) and (3).
Subd. 7. [DEPENDENTS.] An individual who:
(1) was allowed to be claimed as a dependent on a 1999
federal income tax return filed by another person;
(2) would have otherwise been eligible for a rebate under
subdivision 1; 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 subdivision only. The
rebate under this subdivision equals 35 percent of the amount
allowed under the schedule in subdivision 3 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 subdivision multiplied
by the percentage determined pursuant to Minnesota Statutes,
section 290.06, subdivision 2c, paragraph (e), as calculated on
the original 1999 income tax return.
Subd. 8. [CREDIT RECIPIENTS.] An individual who
(1) was a resident of Minnesota for any part of 1999;
(2) was not eligible for a rebate under subdivision 1, 6,
or 9;
(3) was not allowed to be claimed as a dependent on a 1999
federal income tax return by another person; and
(4)(i) claimed and was eligible for a refund under
Minnesota Statutes, chapter 290A, for property taxes paid in
2000 or rent constituting property taxes paid in 1999 on or
before November 30, 2001; or
(ii) filed 1999 Minnesota and federal income tax returns
before November 30, 2001, in order to
(A) claim a credit under Minnesota Statutes, section
290.067, 290.0671, or 290.0674;
(B) claim a refund of withheld taxes; or
(C) claim a refund of estimated taxes,
is eligible for a rebate under this subdivision only. For
married couples filing joint returns and heads of households,
the rebate equals the minimum amount in subdivision 2. For
single filers and married individuals filing separate returns,
the rebate equals the minimum amount in subdivision 3. For
individuals who qualify for a rebate under clause (4)(i), the
rebate equals the minimum amount in subdivision 3 unless the
property tax refund return is a joint return and neither of the
joint filers qualifies for a rebate under any of the other
rebate criteria in which case the rebate equals the minimum
amount in subdivision 2. 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 subdivision multiplied
by the percentage determined under Minnesota Statutes, section
290.06, subdivision 2c, paragraph (e), as calculated on the
original 1999 income tax return. Notwithstanding the provisions
of Minnesota Statutes, section 289A.60, subdivision 12, an
individual who files a property tax refund claim for property
taxes paid in 2000 or rent constituting property taxes paid in
1999 after August 15, 2001, and before November 30, 2001, is
eligible for a refund under Minnesota Statutes, chapter 290A,
and a rebate under this subdivision.
Subd. 9. [CLAIMS BASED ON FEDERAL LIABILITIES.] An
individual who:
(1) was a resident of Minnesota for any part of 1999;
(2) filed 1999 Minnesota and federal income tax returns on
or before November 30, 2001;
(3) had federal taxable income on the federal return of at
least $5; and
(4) does not qualify for a rebate under subdivision 1 or 7,
is eligible for a rebate under this subdivision only.
An individual who was allowed to be claimed as a dependent on a
1999 federal income tax return filed by another person is
eligible for a rebate under this subdivision only if the
individual had in 1999 earned income as defined in section
32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a
dependent eligible for a rebate under this subdivision equals 35
percent of the amount allowed under the schedule in subdivision
3 based on the individual's income. For all other individuals
who qualify under this subdivision, the rebate equals the amount
allowed based on the individual's income under the schedule in
subdivision 2 for married couples filing joint returns and heads
of household and the amount allowed based on the individual's
income under the schedule in subdivision 3 for single filers and
married individuals filing separately; provided, however, that
any rebate payable under this subdivision to an individual who
was a part-year resident of Minnesota in 1999 must be prorated
according to the formula applicable to part-year residents in
subdivision 5.
Subd. 10. [FISCAL YEAR TAXPAYERS.] For a fiscal year
taxpayer, the dates in subdivisions 1 through 4 are extended one
month for each month in calendar year 1999 that occurred prior
to the start of the individual's 1999 fiscal tax year.
Subd. 11. [PAYMENT DATES; INTEREST.] The commissioner of
revenue may begin paying sales tax rebates by July 1, 2001.
Sales tax rebates not paid by January 1, 2002, bear interest at
the rate specified in Minnesota Statutes, section 270.75.
Subd. 12. [NO ADJUSTMENTS AFTER PROCESSING.] A sales tax
rebate may not be adjusted based on changes to a 1999 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.
Subd. 13. [JOINT REBATE RULES.] Individuals who filed a
joint income tax return for 1999 must 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 1999 income tax return are living at
separate addresses, as indicated on their 2000 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.
Subd. 14. [DECEASED INDIVIDUALS.] 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.
Subd. 15. [APPLICATION OF OTHER LAW.] (a) The sales tax
rebate is a "Minnesota tax law" for purposes of Minnesota
Statutes, section 270B.01, subdivision 8.
(b) 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
subdivision, a joint sales tax rebate is payable to each spouse
equally.
(c) 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.
Subd. 16. [LAPSE OF ENTITLEMENT.] If the commissioner of
revenue cannot locate an individual entitled to a sales tax
rebate by July 1, 2003, or if an individual to whom a sales tax
rebate was issued has not cashed the check by July 1, 2003, the
right to the sales tax rebate lapses and the check must be
deposited in the general fund.
Subd. 17. [CLAIMS FOR UNPAID REBATES.] Individuals
entitled to a sales tax rebate pursuant to subdivision 1, 6, 7,
8, or 9 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, 2002, 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.
Subd. 18. [APPROPRIATION.] The rebate is a reduction of
fiscal year 2001 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 2001 and is available until June 30, 2003.
Subd. 19. [ILLEGALLY CASHED CHECKS.] 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.
Subd. 20. [AUTHORITY TO CONTRACT WITH VENDOR.]
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.
Subd. 21. [ELECTRONIC PAYMENT.] The commissioner may pay
rebates required by this section by electronic funds transfer to
individuals who requested that their 2000 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
2000 individual income tax refund.
Subd. 22. [ADJUSTMENTS.] A sales tax rebate of
$852,080,000 is authorized for fiscal year 2001. Before
payment, the commissioner of revenue shall adjust the rebate as
follows:
(1) the rebates calculated in subdivisions 2, 3, 4, 6, 7,
8, and 9 must be proportionately reduced to account for 1999
income tax returns that are filed on or after January 1, 2001,
but before June 1, 2001, so that the estimated amount of sales
tax rebates payable under subdivisions 2, 3, 4, 6, 7, 8, and 9
on the date the rebate is processed does not exceed the total
amount available for the rebate; and
(2) the commissioner of finance shall certify by July 15,
2001, the preliminary fiscal 2001 general fund net nondedicated
revenues. If certified net nondedicated revenues are less than
the amount forecast in February 2001, the commissioner of
revenue shall proportionally decrease all rebates under this
section to rebate the entire amount of the certified net
nondedicated revenues. The adjustments under this subdivision
are not a rule subject to Minnesota Statutes, chapter 14.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. [APPROPRIATIONS.]
(a) $1,750,000 is appropriated in fiscal year 2001 from the
general fund to the commissioner of revenue to administer the
sales tax rebates in section 2. Any unencumbered balance
remaining on June 30, 2001, does not cancel but is available for
expenditure by the commissioner of revenue until June 30, 2002.
Notwithstanding Minnesota Statutes, section 16A.285, the
commissioner of revenue may not use this appropriation for any
purpose other than administering the sales tax rebates. This is
a one-time appropriation and may not be added to the agency's
budget base.
(b) $401,000 is appropriated in fiscal year 2001 from the
general fund to the state treasurer to pay the cost of clearing
sales tax rebate checks through commercial banks. Any
unencumbered balance remaining on June 30, 2001, does not cancel
but is available for expenditure by the state treasurer until
June 30, 2002. Notwithstanding Minnesota Statutes, section
16A.285, the state treasurer may not use this appropriation for
any purpose other than paying the cost of clearing rebate checks.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 2
EDUCATION FINANCE
Section 1. Minnesota Statutes 2000, section 123B.42,
subdivision 3, is amended to read:
Subd. 3. [COST; LIMITATION.] (a) The cost per pupil of the
textbooks, individualized instructional or cooperative learning
materials, and standardized tests provided for in this section
for each school year must not exceed the statewide average
expenditure per pupil, adjusted pursuant to clause (b), by the
Minnesota public elementary and secondary schools for textbooks,
individualized instructional materials and standardized tests as
computed and established by the department by March February 1
of the preceding school year from the most recent public school
year data then available.
(b) The cost computed in clause (a) shall be increased by
an inflation adjustment equal to the percent of increase in the
formula allowance, pursuant to section 126C.10, subdivision 2,
from the second preceding school year to the current school year.
Notwithstanding the amount of the formula allowance for fiscal
years 2003 and 2004 in section 126C.10, subdivision 2, the
commissioner shall use the amount of the formula allowance for
the current year minus $415 in determining the inflation
adjustment for those fiscal years.
(c) The commissioner shall allot to the districts or
intermediary service areas the total cost for each school year
of providing or loaning the textbooks, individualized
instructional or cooperative learning materials, and
standardized tests for the pupils in each nonpublic school. The
allotment shall not exceed the product of the statewide average
expenditure per pupil, according to clause (a), adjusted
pursuant to clause (b), multiplied by the number of nonpublic
school pupils who make requests pursuant to this section and who
are enrolled as of September 15 of the current school year.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 2. Minnesota Statutes 2000, section 123B.53,
subdivision 2, is amended to read:
Subd. 2. [ELIGIBILITY.] (a) The following portions of a
district's debt service levy qualify for debt service
equalization:
(1) debt service for repayment of principal and interest on
bonds issued before July 2, 1992;
(2) debt service for bonds refinanced after July 1, 1992,
if the bond schedule has been approved by the commissioner and,
if necessary, adjusted to reflect a 20-year maturity schedule;
and
(3) debt service for bonds issued after July 1, 1992, for
construction projects that have received a positive review and
comment according to section 123B.71, if the commissioner has
determined that the district has met the criteria under section
126C.69, subdivision 3, except section 126C.69, subdivision 3,
paragraph (a), clause (2), and if the bond schedule has been
approved by the commissioner and, if necessary, adjusted to
reflect a 20-year maturity schedule.
(b) The criterion described in section 126C.69, subdivision
3, paragraph (a), clause (9), does not apply to bonds authorized
by elections held before July 1, 1992.
(c) For the purpose of this subdivision the department
shall determine the eligibility for sparsity at the location of
the new facility, or the site of the new facility closest to the
nearest operating school if there is more than one new facility.
(d) Notwithstanding paragraphs (a) to (c), debt service for
repayment of principal and interest on bonds issued after July
1, 1997, does not qualify for debt service equalization aid
unless the primary purpose of the facility is to serve students
in kindergarten through grade 12.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 3. Minnesota Statutes 2000, section 123B.53,
subdivision 4, is amended to read:
Subd. 4. [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt
service equalization revenue of a district equals the sum of the
first tier debt service equalization revenue and the second tier
debt service equalization revenue.
(b) The first tier debt service equalization revenue of a
district equals the greater of zero or the eligible debt service
revenue minus the amount raised by a levy of 12 15 percent times
the adjusted net tax capacity of the district minus the second
tier debt service equalization revenue of the district.
(c) The second tier debt service equalization revenue of a
district equals the greater of zero or the eligible debt service
revenue minus the amount raised by a levy of 25 percent times
the adjusted net tax capacity of the district.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 4. Minnesota Statutes 2000, section 123B.53,
subdivision 5, is amended to read:
Subd. 5. [EQUALIZED DEBT SERVICE LEVY.] To obtain debt
service equalization revenue, a district must levy an amount not
to exceed the district's debt service equalization revenue (a)
The equalized debt service levy of a district equals the sum of
the first tier equalized debt service levy and the second tier
equalized debt service levy.
(b) A district's first tier equalized debt service levy
equals the district's first tier debt service equalization
revenue times the lesser of one or the ratio of:
(1) the quotient derived by dividing the adjusted net tax
capacity of the district for the year before the year the levy
is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is
certified; to
(2) $4,000 $3,200.
(c) A district's second tier equalized debt service levy
equals the district's second tier debt service equalization
revenue times the lesser of one or the ratio of:
(1) the quotient derived by dividing the adjusted net tax
capacity of the district for the year before the year the levy
is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is
certified; to
(2) $8,000.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and revenue in fiscal year 2003, and thereafter.
Sec. 5. Minnesota Statutes 2000, section 123B.54, is
amended to read:
123B.54 [DEBT SERVICE APPROPRIATION.]
(a) $33,141,000 in fiscal year 2000, $29,400,000 in fiscal
year 2001, $26,934,000 in fiscal year 2002, and $24,540,000 in
fiscal year 2003 and each year thereafter is $31,787,000 in
fiscal year 2004 and $26,453,000 in fiscal years 2005 and later
are appropriated from the general fund to the commissioner of
children, families, and learning for payment of debt service
equalization aid under section 123B.53.
(b) The appropriations in paragraph (a) must be reduced by
the amount of any money specifically appropriated for the same
purpose in any year from any state fund.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 6. Minnesota Statutes 2000, section 123B.75,
subdivision 5, is amended to read:
Subd. 5. [LEVY RECOGNITION.] (a) "School district tax
settlement revenue" means the current, delinquent, and
manufactured home property tax receipts collected by the county
and distributed to the school district.
(b) In June of each year 2001, the school district must
recognize as revenue, in the fund for which the levy was made,
the lesser of:
(1) the sum of May, June, and July school district tax
settlement revenue received in that calendar year plus general
education aid according to section 126C.13, subdivision 4,
received in July and August of that calendar year; or
(2) the sum of:
(i) 31 percent of the referendum levy certified in the
prior calendar year according to section 126C.17, subdivision 9;
plus
(ii) the entire amount of the levy certified in the prior
calendar year according to sections 124D.86, subdivision 4, for
school districts receiving revenue under 124D.86, subdivision 3,
clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, and 3,
paragraphs (4), (5), and (6); 126C.43, subdivision 2; and
126C.48, subdivision 6.
(c) For fiscal year 2002 and later years, in June of each
year, the school district must recognize as revenue, in the fund
for which the levy was made, the lesser of:
(1) the sum of May, June, and July school district tax
settlement revenue received in that calendar year, plus general
education aid according to section 126C.13, subdivision 4,
received in July and August of that calendar year; or
(2) the sum of:
(i) 31 percent of the referendum levy certified according
to section 126C.17, in calendar year 2000; plus
(ii) the entire amount of the levy certified in the prior
calendar year according to section 124D.86, subdivision 4, for
school districts receiving revenue under sections 124D.86,
subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions
1, 2, and 3, paragraphs (4), (5), and (6); 126C.43, subdivision
2; and 126C.48, subdivision 6.
[EFFECTIVE DATE.] This section is effective June 30, 2001.
Sec. 7. Minnesota Statutes 2000, section 123B.92,
subdivision 9, is amended to read:
Subd. 9. [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A
district's nonpublic pupil transportation aid for the 1996-1997
and later school years for transportation services for nonpublic
school pupils according to sections 123B.88, 123B.84 to 123B.86,
and this section, equals the sum of the amounts computed in
paragraphs (b) and (c). This aid does not limit the obligation
to transport pupils under sections 123B.84 to 123B.87.
(b) For regular and excess transportation according to
subdivision 1, paragraph (b), clauses (1) and (2), an amount
equal to the product of:
(1) the district's actual expenditure per pupil transported
in the regular and excess transportation categories during the
second preceding school year; times
(2) the number of nonpublic school pupils residing in the
district who receive regular or excess transportation service or
reimbursement for the current school year; times
(3) the ratio of the formula allowance pursuant to section
126C.10, subdivision 2, for the current school year to the
formula allowance pursuant to section 126C.10, subdivision 2,
for the second preceding school year.
(c) For nonpublic nonregular transportation according to
subdivision 1, paragraph (b), clause (5), an amount equal to the
product of:
(1) the district's actual expenditure for nonpublic
nonregular transportation during the second preceding school
year; times
(2) the ratio of the formula allowance pursuant to section
126C.10, subdivision 2, for the current school year to the
formula allowance pursuant to section 126C.10, subdivision 2,
for the second preceding school year.
(d) Notwithstanding the amount of the formula allowance for
fiscal years 2000, 2001, and 2002 in section 126C.10,
subdivision 2, the commissioner shall use the amount of the
formula allowance for the current year plus $87 in determining
the nonpublic pupil transportation revenue in paragraphs (b) and
(c) for fiscal year 2000, and the amount of the formula
allowance less $110 in determining the nonpublic pupil
transportation revenue in paragraphs (b) and (c) for fiscal
years 2001 and 2002.
(e) Notwithstanding the amount of the formula allowance for
fiscal years 2003 and 2004 in section 126C.10, subdivision 2,
the commissioner shall use the amount of the formula allowance
for the current year minus $415 in determining the nonpublic
pupil transportation revenue in paragraphs (b) and (c) for those
fiscal years.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 8. Minnesota Statutes 2000, section 126C.01,
subdivision 3, is amended to read:
Subd. 3. [REFERENDUM MARKET VALUE.] "Referendum market
value" means the market value of all taxable property, except
that excluding property classified as class 2, noncommercial
4c(1), or 4c(4) under section 273.13. The portion of class 2a
property consisting of the house, garage, and surrounding one
acre of land of an agricultural homestead is included in
referendum market value. Any class of property, or any portion
of a class of property, with that is included in the definition
of referendum market value and that has a class rate of less
than one percent under section 273.13 shall have a referendum
market value equal to its net tax capacity multiplied by 100.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 9. Minnesota Statutes 2000, section 126C.10,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL EDUCATION REVENUE.] (a) For fiscal
year 2000 and thereafter 2002, the general education revenue for
each district equals the sum of the district's basic revenue,
basic skills revenue, training and experience revenue, secondary
sparsity revenue, elementary sparsity revenue, transportation
sparsity revenue, total operating capital revenue, equity
revenue, referendum offset adjustment, transition revenue, and
supplemental revenue.
(b) For fiscal year 2003 and later, the general education
revenue for each district equals the sum of the district's basic
revenue, basic skills revenue, training and experience revenue,
secondary sparsity revenue, elementary sparsity revenue,
transportation sparsity revenue, total operating capital
revenue, and equity revenue.
[EFFECTIVE DATE.] This section is effective for fiscal year
2002 and thereafter.
Sec. 10. Minnesota Statutes 2000, section 126C.10,
subdivision 2, is amended to read:
Subd. 2. [BASIC REVENUE.] The basic revenue for each
district equals the formula allowance times the adjusted
marginal cost pupil units for the school year. The formula
allowance for fiscal year 1998 is $3,581. The formula allowance
for fiscal year 1999 is $3,530. The formula allowance for
fiscal year 2000 is $3,740. The formula allowance for fiscal
year years 2001 and subsequent fiscal years 2002 is $3,964.
The formula allowance for fiscal year 2003 and subsequent fiscal
years is $4,379.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 11. Minnesota Statutes 2000, section 126C.13,
subdivision 4, is amended to read:
Subd. 4. [GENERAL EDUCATION AID.] A district's general
education aid is the sum of the following amounts:
(1) the product of (i) the difference between the general
education revenue, excluding transition revenue and supplemental
revenue, and the general education levy, times (ii) the ratio of
the actual amount levied to the permitted levy;
(2) transition aid according to section 126C.10,
subdivision 22;
(3) supplemental aid according to section 127A.49;
(4) shared time aid according to section 126C.01,
subdivision 7; and
(5) (3) referendum aid according to section 126C.17.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 12. Minnesota Statutes 2000, section 126C.17,
subdivision 1, is amended to read:
Subdivision 1. [REFERENDUM ALLOWANCE.] (a) For fiscal year
2002, a district's referendum revenue allowance equals
the referendum revenue authority for that year divided by its
resident marginal cost pupil units for that school year. sum of
the allowance under section 126C.16, subdivision 2, plus any
additional allowance per resident marginal cost pupil unit
authorized under subdivision 9 for fiscal year 2002.
(b) For fiscal year 2003 and later, a district's initial
referendum revenue allowance equals the sum of the allowance
under section 126C.16, subdivision 2, plus any additional
allowance per resident marginal cost pupil unit authorized under
subdivision 9 before May 1, 2001, for fiscal year 2002 and
later, plus the referendum conversion allowance approved under
subdivision 13, minus $415. For districts with more than one
referendum authority, the reduction must be computed separately
for each authority. The reduction must be applied first to the
referendum conversion allowance and next to the authority with
the earliest expiration date. A district's initial referendum
revenue allowance may not be less than zero.
(c) For fiscal year 2003 and later, a district's referendum
revenue allowance equals the initial referendum allowance plus
any additional allowance per resident marginal cost pupil unit
authorized under subdivision 9 after April 30, 2001, for fiscal
year 2003 and later.
[EFFECTIVE DATE.] This section is effective for fiscal year
2002 and thereafter.
Sec. 13. Minnesota Statutes 2000, section 126C.17,
subdivision 2, is amended to read:
Subd. 2. [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding
subdivision 1, for fiscal year 2002, a district's referendum
allowance must not exceed the greater of:
(1) the district's referendum allowance for fiscal year
1994;
(2) 25 percent of the formula allowance; or
(3) for a newly reorganized district created after July 1,
1994, the sum of the referendum revenue authority for the
reorganizing districts for the fiscal year preceding the
reorganization, divided by the sum of the resident marginal cost
pupil units of the reorganizing districts for the fiscal year
preceding the reorganization.
(b) Notwithstanding subdivision 1, for fiscal year 2003 and
later fiscal years, a district's referendum allowance must not
exceed the greater of:
(1) the sum of a district's referendum allowance for fiscal
year 1994 times 1.162 plus its referendum conversion allowance
for fiscal year 2003, minus $415;
(2) 18.2 percent of the formula allowance;
(3) for a newly reorganized district created on July 1,
2002, the referendum revenue authority for each reorganizing
district in the year preceding reorganization divided by its
resident marginal cost pupil units for the year preceding
reorganization, minus $415; or
(4) for a newly reorganized district created after July 1,
2002, the referendum revenue authority for each reorganizing
district in the year preceding reorganization divided by its
resident marginal cost pupil units for the year preceding
reorganization.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 14. Minnesota Statutes 2000, section 126C.17,
subdivision 5, is amended to read:
Subd. 5. [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal
year 2003 and later, a district's referendum equalization
revenue equals the sum of the first tier referendum equalization
revenue and the second tier referendum equalization revenue.
(b) A district's first tier referendum equalization revenue
equals the district's first tier referendum equalization
allowance times the district's resident marginal cost pupil
units for that year.
(b) The (c) A district's first tier referendum equalization
allowance equals $350 for fiscal year 2000 and $415 for fiscal
year 2001 and later.
(c) Referendum equalization revenue must not exceed a
district's total referendum revenue for that year the lesser of
the district's referendum allowance under subdivision 1 or $126.
(d) A district's second tier referendum equalization
revenue equals the district's second tier referendum
equalization allowance times the district's resident marginal
cost pupil units for that year.
(e) A district's second tier referendum equalization
allowance equals the lesser of the district's referendum
allowance under subdivision 1 or 18.2 percent of the formula
allowance, minus the district's first tier referendum
equalization allowance.
(f) Notwithstanding paragraph (e), the second tier
referendum allowance for a district qualifying for secondary
sparsity revenue under section 126C.10, subdivision 7, or
elementary sparsity revenue under section 126C.10, subdivision
8, equals the district's referendum allowance under subdivision
1 minus the district's first tier referendum equalization
allowance.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and revenue in fiscal year 2003, and thereafter.
Sec. 15. Minnesota Statutes 2000, section 126C.17,
subdivision 6, is amended to read:
Subd. 6. [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal
year 2003 and later, a district's referendum equalization levy
for a referendum levied against the referendum market value of
all taxable property as defined in section 126C.01, subdivision
3, equals the sum of the first tier referendum equalization levy
and the second tier referendum equalization levy.
(b) A district's first tier referendum equalization levy
equals the district's first tier referendum equalization revenue
times the lesser of one or the ratio of the district's
referendum market value per resident marginal cost pupil unit to
$476,000.
(b) A district's referendum equalization levy for a
referendum levied against the net tax capacity of all taxable
property equals the district's referendum equalization revenue
times the lesser of one or the ratio of the district's adjusted
net tax capacity per resident marginal cost pupil unit to $8,404.
(c) A district's second tier referendum equalization levy
equals the district's second tier referendum equalization
revenue times the lesser of one or the ratio of the district's
referendum market value per resident marginal cost pupil unit to
$270,000.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and revenue in fiscal year 2003, and thereafter.
Sec. 16. Minnesota Statutes 2000, section 126C.17,
subdivision 7, is amended to read:
Subd. 7. [REFERENDUM EQUALIZATION AID.] (a) A district's
referendum equalization aid equals the difference between its
referendum equalization revenue and levy.
(b) If a district's actual levy for first or second tier
referendum equalization revenue is less than its maximum levy
limit for that tier, aid shall be proportionately reduced.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and revenue in fiscal year 2003, and thereafter.
Sec. 17. Minnesota Statutes 2000, section 126C.17, is
amended by adding a subdivision to read:
Subd. 7a. [REFERENDUM TAX BASE REPLACEMENT AID.] For each
school district that had a referendum allowance for fiscal year
2002 exceeding $415, for each separately authorized referendum
levy, the commissioner of revenue, in consultation with the
commissioner of children, families, and learning, shall certify
the amount of the referendum levy in taxes payable year 2001
attributable to the portion of the referendum allowance
exceeding $415 levied against property classified as class 2
4c(1), or 4c(4), under section 273.13, excluding the portion of
the tax paid by the portion of class 2a property consisting of
the house, garage, and surrounding one acre of land. The
resulting amount must be used to reduce the district's
referendum levy amount otherwise determined, and must be paid to
the district each year that the referendum authority remains in
effect. The aid payable under this subdivision must be
subtracted from the district's referendum equalization aid under
subdivision 7. The referendum equalization aid after the
subtraction must not be less than zero.
For the purposes of this subdivision, the referendum levy
with the latest year of expiration is assumed to be at the
highest level of equalization, and the referendum levy with the
earliest year of expiration is assumed to be at the lowest level
of equalization.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 18. Minnesota Statutes 2000, section 126C.17,
subdivision 8, is amended to read:
Subd. 8. [UNEQUALIZED REFERENDUM LEVY.] Each year, a
district may levy an amount equal to the difference between its
total referendum revenue according to subdivision 5 4 and its
equalized referendum aid and levy according to subdivisions 6
and 7 referendum equalization revenue according to subdivision 5.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and revenue in fiscal year 2003, and thereafter.
Sec. 19. Minnesota Statutes 2000, section 126C.17, is
amended by adding a subdivision to read:
Subd. 13. [REFERENDUM CONVERSION ALLOWANCE.] A school
district that received supplemental or transition revenue in
fiscal year 2002 may convert its supplemental revenue conversion
allowance and transition revenue conversion allowance to
additional referendum allowance under subdivision 1 for fiscal
year 2003 and thereafter. A majority of the school board must
approve the conversion at a public meeting before November 1,
2001. For a district with other referendum authority, the
referendum conversion allowance approved by the board continues
until the portion of the district's other referendum authority
with the earliest expiration date after June 30, 2006, expires.
For a district with no other referendum authority, the
referendum conversion allowance approved by the board continues
until June 30, 2012.
Sec. 20. Minnesota Statutes 2000, section 126C.63,
subdivision 8, is amended to read:
Subd. 8. [MAXIMUM EFFORT DEBT SERVICE LEVY.] "Maximum
effort debt service levy" means the lesser of:
(1) a levy in whichever of the following amounts is
applicable:
(a) in any district receiving a debt service loan for a
debt service levy payable in 2002 and thereafter, or granted a
capital loan after January 1, 2001, a levy in total dollar
amount computed at a rate of 36 percent of adjusted net tax
capacity for taxes payable in 2002 and thereafter;
(b) in any district receiving a debt service loan for a
debt service levy payable in 1991 and thereafter, or granted a
capital loan after January 1, 1990, a levy in a total dollar
amount computed at a rate of 24 percent of adjusted net tax
capacity for taxes payable in 1991 and thereafter;
(b) (c) in any district granted a debt service loan after
July 31, 1981, or granted a capital loan which is approved after
July 31, 1981, a levy in a total dollar amount computed as a tax
rate of 21.92 percent on the adjusted net tax capacity for taxes
payable in 1991 and thereafter; or
(2) a levy in any district for which a capital loan was
approved prior to August 1, 1981, a levy in a total dollar
amount equal to the sum of the amount of the required debt
service levy and an amount which when levied annually will in
the opinion of the commissioner be sufficient to retire the
remaining interest and principal on any outstanding loans from
the state within 30 years of the original date when the capital
loan was granted.
The board in any district affected by the provisions of
clause (2) may elect instead to determine the amount of its levy
according to the provisions of clause (1). If a district's
capital loan is not paid within 30 years because it elects to
determine the amount of its levy according to the provisions of
clause (2), the liability of the district for the amount of the
difference between the amount it levied under clause (2) and the
amount it would have levied under clause (1), and for interest
on the amount of that difference, must not be satisfied and
discharged pursuant to Minnesota Statutes 1988, or an earlier
edition of Minnesota Statutes if applicable, section 124.43,
subdivision 4.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 21. Minnesota Statutes 2000, section 126C.69,
subdivision 2, is amended to read:
Subd. 2. [CAPITAL LOANS ELIGIBILITY.] Beginning July 1,
1999, a district is not eligible for a capital loan unless the
district's estimated net debt tax rate as computed by the
commissioner after debt service equalization aid would be more
than 24 36 percent of adjusted net tax capacity. The estimate
must assume a 20-year maturity schedule for new debt.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 22. Minnesota Statutes 2000, section 126C.69,
subdivision 3, is amended to read:
Subd. 3. [DISTRICT REQUEST FOR REVIEW AND COMMENT.] A
district or a joint powers district that intends to apply for a
capital loan must submit a proposal to the commissioner for
review and comment according to section 123B.71 by July 1 of an
odd-numbered year. The commissioner shall prepare a review and
comment on the proposed facility, regardless of the amount of
the capital expenditure required to construct the facility. In
addition to the information provided under section 123B.71,
subdivision 9, the commissioner shall require that predesign
packages comparable to those required under section 16B.335 be
prepared by the applicant school district. The predesign
packages must be sufficient to define the scope, cost, and
schedule of the project and must demonstrate that the project
has been analyzed according to appropriate space needs standards
and also consider the following criteria in determining whether
to make a positive review and comment.
(a) To grant a positive review and comment the commissioner
shall determine that all of the following conditions are met:
(1) the facilities are needed for pupils for whom no
adequate facilities exist or will exist;
(2) the district will serve, on average, at least 80 pupils
per grade or is eligible for elementary or secondary sparsity
revenue there is evidence to indicate that the facilities will
have a useful public purpose for at least the term of the bonds;
(3) no form of cooperation with another district would
provide the necessary facilities;
(4) the facilities are comparable in size and quality to
facilities recently constructed in other districts that have
similar enrollments;
(5) the facilities are comparable in size and quality to
facilities recently constructed in other districts that are
financed without a capital loan;
(6) the district is projected to maintain or increase its
average daily membership over the next five years or is eligible
for elementary or secondary sparsity revenue have adequate funds
in its general operating budget to support a quality education
for its students for at least the next five years;
(7) the current facility poses a threat to the life,
health, and safety of pupils, and cannot reasonably be brought
into compliance with fire, health, or life safety codes;
(8) the district has made a good faith effort, as evidenced
by its maintenance expenditures, to adequately maintain the
existing facility during the previous ten years and to comply
with fire, health, and life safety codes and state and federal
requirements for handicapped accessibility;
(9) the district has made a good faith effort to encourage
integration of social service programs within the new facility;
and
(10) evaluations by boards of adjacent districts have been
received; and
(11) the proposal includes a comprehensive technology plan
that assures information access for the students, parents, and
community.
(b) The commissioner may grant a negative review and
comment if:
(1) the state demographer has examined the population of
the communities to be served by the facility and determined that
the communities have not grown during the previous five years;
(2) the state demographer determines that the economic and
population bases of the communities to be served by the facility
are not likely to grow or to remain at a level sufficient,
during the next ten years, to ensure use of the entire facility;
(3) the need for facilities could be met within the
district or adjacent districts at a comparable cost by leasing,
repairing, remodeling, or sharing existing facilities or by
using temporary facilities;
(4) the district plans do not include cooperation and
collaboration with health and human services agencies and other
political subdivisions; or
(5) if the application is for new construction, an existing
facility that would meet the district's needs could be purchased
at a comparable cost from any other source within the area.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 23. Minnesota Statutes 2000, section 126C.69,
subdivision 9, is amended to read:
Subd. 9. [LOAN AMOUNT LIMITS.] (a) A loan must not be
recommended for approval for a district exceeding an amount
computed as follows:
(1) the amount requested by the district under subdivision
6;
(2) plus the aggregate principal amount of general
obligation bonds of the district outstanding on June 30 of the
year following the year the application was received, not
exceeding the limitation on net debt of the district in section
475.53, subdivision 4, or 363 540 percent of its adjusted net
tax capacity as most recently determined, whichever is less;
(3) less the maximum net debt permissible for the district
on December 1 of the year the application is received, under the
limitation in section 475.53, subdivision 4, or 363 540 percent
of its adjusted net tax capacity as most recently determined,
whichever is less;
(4) less any amount by which the amount voted exceeds the
total cost of the facilities for which the loan is granted.
(b) The loan may be approved in an amount computed as
provided in paragraph (a), clauses (1) to (3), subject to later
reduction according to paragraph (a), clause (4).
[EFFECTIVE DATE.] This section is effective for loan
applications submitted after July 1, 2001.
Sec. 24. Minnesota Statutes 2000, section 126C.69,
subdivision 12, is amended to read:
Subd. 12. [CONTRACT.] (a) Each capital loan must be
evidenced by a contract between the district and the state
acting through the commissioner. The contract must obligate the
state to reimburse the district, from the maximum effort school
loan fund, for eligible capital expenses for construction of the
facility for which the loan is granted, an amount computed as
provided in subdivision 9. The commissioner must receive from
the district a certified resolution of the board estimating the
costs of construction and reciting that contracts for
construction of the facilities for which the loan is granted
have been awarded and, that bonds of the district have been
issued and sold in the amount necessary to pay all estimated
costs of construction in excess of the amount of the loan, and
that all work, when completed, meets or exceeds standards
established in the state building code. The contract must
obligate the district to repay the loan out of the excesses of
its maximum effort debt service levy over its required debt
service levy, including interest at a rate equal to the weighted
average annual rate payable on Minnesota state school loan bonds
issued or reissued for the project and disbursed to the
districts on a reimbursement basis, but in no event less than
3-1/2 percent per year on the principal amount from time to time
unpaid.
(b) The district must each year, as long as it is indebted
to the state, levy for debt service (i) the amount of its
maximum effort debt service levy or (ii) the amount of its
required debt service levy, whichever is greater, except as the
required debt service levy may be reduced by a loan under
section 126C.68. The district shall remit payments to the
commissioner according to section 126C.71.
(c) The commissioner shall supervise the collection of
outstanding accounts due the fund and may, by notice to the
proper county auditor, require the maximum levy to be made as
required in this subdivision. Interest on capital loans must be
paid on December 15 of the year after the year the loan is
granted and annually in later years. By September 30, the
commissioner shall notify the county auditor of each county
containing taxable property situated within the district of the
amount of the maximum effort debt service levy of the district
for that year. The county auditor or auditors shall extend upon
the tax rolls an ad valorem tax upon all taxable property within
the district in the aggregate amount so certified.
[EFFECTIVE DATE.] This section is effective for loan
applications submitted after July 1, 2001.
Sec. 25. Minnesota Statutes 2000, section 126C.69,
subdivision 15, is amended to read:
Subd. 15. [BOND SALE LIMITATIONS.] (a) A district having
an outstanding state loan must not issue and sell any bonds on
the public market, except to refund state loans, unless it
agrees to make the maximum effort debt service levy in each
later year at the higher rate provided in section 126C.63,
subdivision 8, and unless it schedules the maturities of the
bonds according to section 475.54, subdivision 2. A district
that refunds bonds at a lower interest rate may continue to make
the maximum effort debt service levy in each later year at the
current rate provided in section 126C.63, subdivision 8, if the
district can demonstrate to the commissioner's satisfaction that
the district's repayments of the state loan will not be reduced
below the previous year's level. The district must report each
sale to the commissioner.
(b) For a capital loan issued prior to July 1, 2001, after
a the district's capital loan has been outstanding for 30 years,
the district must not issue bonds on the public market except to
refund the loan.
(c) For a capital loan issued on or after July 1, 2001,
after the district's capital loan has been outstanding for 20
years, the district must not issue bonds on the public market
except to refund the loan.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 26. Minnesota Statutes 2000, section 475.53,
subdivision 4, is amended to read:
Subd. 4. [SCHOOL DISTRICTS.] Except as otherwise provided
by law, no school district shall be subject to a net debt in
excess of ten 15 percent of the actual market value of all
taxable property situated within its corporate limits, as
computed in accordance with this subdivision. The county
auditor of each county containing taxable real or personal
property situated within any school district shall certify to
the district upon request the market value of all such
property. Whenever the commissioner of revenue, in accordance
with section 127A.48, subdivisions 1 to 6, has determined that
the net tax capacity of any district furnished by county
auditors is not based upon the market value of taxable property
in the district, the commissioner of revenue shall certify to
the district upon request the ratio most recently ascertained to
exist between such value and the actual market value of property
within the district. The actual market value of property within
a district, on which its debt limit under this subdivision is
based, is (a) the value certified by the county auditors, or (b)
this value divided by the ratio certified by the commissioner of
revenue, whichever results in a higher value.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 27. [SUPPLEMENTAL REVENUE CONVERSION ALLOWANCE.]
A district's supplemental revenue conversion allowance is
equal to the district's total fiscal year 2002 supplemental
revenue divided by its fiscal year 2002 resident marginal cost
pupil units.
[EFFECTIVE DATE.] This section is effective for revenue for
fiscal year 2003.
Sec. 28. [TRANSITION REVENUE CONVERSION ALLOWANCE.]
A district's transition revenue conversion allowance is
equal to the district's total fiscal year 2002 transition
revenue divided by its fiscal year 2002 resident marginal cost
pupil units.
[EFFECTIVE DATE.] This section is effective for revenue for
fiscal year 2003.
Sec. 29. [APPROPRIATIONS.]
Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND
LEARNING.] The sums indicated in this section are appropriated
from the general fund to the department of children, families,
and learning for the fiscal years designated.
Subd. 2. [REFERENDUM TAX BASE REPLACEMENT AID.] For
referendum tax base replacement aid according to Minnesota
Statutes, section 126C.17, subdivision 7a:
$7,851,000 ..... 2003
The 2003 appropriation includes $0 for 2002 and $7,851,000
for 2003.
Subd. 3. [DEBT SERVICE AID.] For debt service aid
according to Minnesota Statutes, section 123B.53, subdivision 6:
$25,989,000 ..... 2002
$35,163,000 ..... 2003
The 2002 appropriation includes $2,890,000 for 2001 and
$23,099,000 for 2002.
The 2003 appropriation includes $2,567,000 for 2002 and
$32,956,000 for 2003.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 30. [REPEALER.]
(a) Minnesota Statutes 2000, sections 126C.10, subdivisions
9, 10, 11, 12, 19, 20, 21, and 22; and 126C.11, are repealed
effective for revenue for fiscal year 2003.
(b) Minnesota Statutes 2000, section 126C.13, subdivisions
1, 2, and 3, are repealed effective for taxes payable in 2002.
ARTICLE 3
PROPERTY TAXES
Section 1. [16A.1523] [LOCAL GOVERNMENT AID REFORM
ACCOUNT.]
Subdivision 1. [ACCOUNT ESTABLISHED.] A local government
aid reform account is established in the general fund. Amounts
in this account are available for and may only be spent in
conjunction with reforming local government aids under chapter
477A. The reforms may include, but are not limited to:
(1) changes to the local government aid distribution
formula; and
(2) supplemental aids to address local government aid
disparity problems.
The balance in the account does not cancel and remains in
the account until appropriated for local government aid reform.
Subd. 2. [APPROPRIATION.] Beginning in fiscal year 2003,
and in each fiscal year thereafter, $14,000,000 is appropriated
from the general fund to the local government aid reform account
established in subdivision 1. In fiscal year 2004, and each
year thereafter, until the balance of the account is
appropriated by the legislature to local government aid reform,
an amount equal to the balance at the end of the fiscal year
times 2.5 percent is also appropriated from the general fund to
the account.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. [16A.88] [TRANSIT FUNDS.]
Subdivision 1. [GREATER MINNESOTA TRANSIT FUND.] The
greater Minnesota transit fund is established within the state
treasury. Money in the fund is annually appropriated to the
commissioner of transportation for assistance to transit systems
outside the metropolitan area under section 174.24.
Subd. 2. [METROPOLITAN AREA TRANSIT FUND.] The
metropolitan area transit fund is established within the state
treasury. All money in the fund is annually appropriated to the
metropolitan council for the funding of transit systems within
the metropolitan area under sections 473.384, 473.387, 473.388,
and 473.405 to 473.449.
Subd. 3. [METROPOLITAN AREA TRANSIT APPROPRIATION
ACCOUNT.] The metropolitan area transit appropriation account is
established within the general fund. Money in the account is to
be used for the funding of transit systems in the metropolitan
area, subject to legislative appropriation.
[EFFECTIVE DATE.] This section is effective July 1, 2002.
Sec. 3. [103B.253] [COUNTY LEVY AUTHORITY.]
Notwithstanding any other law to the contrary, a county
levying a tax under section 103B.241, 103B.245, or 103B.251
shall not include any taxes levied under those authorities in
the levy certified under section 275.07, subdivision 1,
paragraph (a). A county levying under section 103B.241,
103B.245, or 103B.251 shall separately certify that amount and
the auditor shall extend that levy as a special taxing district
levy under sections 275.066 and 275.07, subdivision 1, paragraph
(b).
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2001, payable in 2002, and thereafter.
Sec. 4. Minnesota Statutes 2000, section 103D.905,
subdivision 3, is amended to read:
Subd. 3. [ADMINISTRATIVE GENERAL FUND.] An administrative
A general fund, consisting of an ad valorem tax levy, may not
exceed 0.02418 0.048 percent of taxable market value, or
$125,000 $250,000, whichever is less. The money in the fund
shall be used for general administrative expenses and for the
construction or implementation and maintenance of projects of
common benefit to the watershed district. The managers may make
an annual levy for the administrative general fund as provided
in section 103D.911. In addition to the annual administrative
general levy, the managers may annually levy a tax not to exceed
0.00798 percent of taxable market value for a period not to
exceed 15 consecutive years to pay the cost attributable to the
basic water management features of projects initiated by
petition of a municipality of political subdivision within the
watershed district or by petition of at least 50 resident owners
whose property is within the watershed district.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2001, payable in 2002, and thereafter.
Sec. 5. Minnesota Statutes 2000, section 123A.45,
subdivision 2, is amended to read:
Subd. 2. [PETITION.] The petition must contain:
(a) A correct description of the area proposed for
detachment and annexation, including supporting data regarding
location and title to land to establish that the land is
adjoining a district.
(b) The reasons for the proposed change with facts showing
that the granting of the petition will not reduce the size of
any district to less than four sections, unless the district is
not operating a school within the district.
(c) Consent to the petition, if, at the time of the filing
of the petition, any part of the area proposed for detachment is
part of a district which maintains and operates a secondary
school within the district. Before the hearing, the consent of
the board of the district in which the area proposed for
detachment lies must be endorsed on the petition.
(d) An identification of the district to which annexation
is sought.
(e) Other information the petitioners may desire to affix.
(f) An acknowledgment by the petitioner.
(g) A description of whether bonded indebtedness will be
allocated according to subdivision 6, paragraph (b) or (c).
[EFFECTIVE DATE.] This section is effective the day
following final enactment for detachment and annexation requests
approved by a county board on or after that date.
Sec. 6. Minnesota Statutes 2000, section 123A.45,
subdivision 6, is amended to read:
Subd. 6. [TAXABLE PROPERTY.] (a) Upon the effective date
of the order, the detachment and annexation is effected. The
bonded indebtedness must be assigned to the detached and annexed
land under either paragraph (b) or (c).
(b) Unless specified separately under paragraph (c), all
taxable property in the area so detached and annexed remains
taxable for payment of any school purpose obligations already
authorized by or outstanding on the effective date of the order
against the district from which detached. The order does not
relieve such property from the obligation of any bonded debt
already incurred to which it was subject prior to the order.
All taxable property in the area so detached and annexed is
taxable for payment of any district obligations authorized on or
subsequent to the effective date of the order by the district to
which annexation is made.
(c) Alternatively, if the school board of the district in
which the area is proposed for detachment and the school board
of the district in which the area is proposed for annexation
agree, all taxable property in the area detached and annexed
shall be taxable by the school district to which the property is
annexed. Detached and annexed property is relieved from the
obligation of any bonded debt already incurred by the district
in which the area is detached and is obligated for any bonded
debt already incurred by the district to which the area is
annexed.
[EFFECTIVE DATE.] This section is effective the day
following final enactment for detachment and annexation requests
approved by a county board on or after that date.
Sec. 7. [126C.455] [SWIMMING POOL LEVY.]
Each year, a school district with its home office located
in a county that has (i) a population density of ten or fewer
persons per square mile according to the 2000 census of
population; (ii) an international border; and (iii) more than
one school district within its boundaries, may levy for the net
operational costs of a swimming pool. The levy may not exceed
the net actual costs of operation of the swimming pool for the
previous year. Net actual costs are defined as operating costs
less any operating revenues and less any payments from other
local governmental units.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and later.
Sec. 8. [144F.01] [EMERGENCY MEDICAL SERVICES SPECIAL
TAXING DISTRICTS.]
Subdivision 1. [POLITICAL SUBDIVISION DEFINED.] In this
section, "political subdivision" means a county, a statutory or
home rule charter city, or a township organized to provide town
government.
Subd. 2. [WHO MAY ESTABLISH.] Two or more political
subdivisions, or parts of them, may establish by resolution of
their governing bodies a special taxing district for emergency
medical services. The participating territory of a
participating political subdivision need not abut any other
participating territory to be in the special taxing district.
Subd. 3. [BOARD.] The special taxing district under this
section is governed by a board made up initially of
representatives of each participating political subdivision in
the proportions set out in the establishing resolution, subject
to change as provided in the district's charter, if any, or in
the district's bylaws. Each participant's representative serves
at the pleasure of that participant's governing body.
Subd. 4. [PROPERTY TAX LEVY AUTHORITY.] The district's
board may levy a tax on the taxable real and personal property
in the district. The ad valorem tax levy may not exceed 0.048
percent of the taxable market value of the district or $250,000,
whichever is less. The proceeds of the levy must be used as
provided in subdivision 5. The board shall certify the levy at
the times as provided under section 275.07. The board shall
provide the county with whatever information is necessary to
identify the property that is located within the district. If
the boundaries include a part of a parcel, the entire parcel
shall be included in the district. The county auditors must
spread, collect, and distribute the proceeds of the tax at the
same time and in the same manner as provided by law for all
other property taxes.
Subd. 5. [USE OF LEVY PROCEEDS.] The proceeds of property
taxes levied under this section must be used to support the
providing of out-of-hospital emergency medical services
including, but not limited to, first responder or rescue squads
recognized by the district, ambulance services licensed under
chapter 144E and recognized by the district, medical control
functions set out in chapter 144E, communications equipment and
systems, and programs of regional emergency medical services
authorized by regional boards described in section 144E.52.
Subd. 6. [ADVISORY COMMITTEE.] A special taxing district
board under this section must have an advisory committee to
advise the board on issues involving emergency medical services
and EMS communications. The committee's membership must be
comprised of representatives of first responders, ambulance
services, ambulance medical directors, and EMS communication
experts. The advisory committee members serve at the pleasure
of the appointing board.
Subd. 7. [POWERS.] (a) In addition to authority expressly
granted in this section, a special taxing district under this
section may exercise any power that may be exercised by any of
its participating political subdivisions, except that the board
may not incur debt. The special taxing district may only use
the power to do what is necessary or reasonable to support the
services set out in subdivision 5.
(b) Notwithstanding paragraph (a), the district may only
levy the taxes authorized in this section.
Subd. 8. [ADDITIONS AND WITHDRAWALS.] (a) Additional
eligible political subdivisions may be added to a special taxing
district under this section as provided by the board of the
district and agreed to in a resolution of the governing body of
the political subdivision proposed to be added.
(b) A political subdivision may withdraw from a special
taxing district under this section by resolution of its
governing body. The political subdivision must notify the board
of the special taxing district of the withdrawal by providing a
copy of the resolution at least one year in advance of the
proposed withdrawal. The taxable property of the withdrawing
member is subject to the property tax levy under subdivision 4
for the taxes payable year following the notice of the
withdrawal, unless the board and the withdrawing member agree
otherwise by action of their governing bodies.
(c) Notwithstanding subdivision 2, if the district is
comprised of only two political subdivisions and one of the
political subdivisions withdraws, the district can continue to
exist.
Subd. 9. [DISSOLUTION.] If the special taxing district is
dissolved, the assets and liabilities may be assigned to a
successor entity, if any, or otherwise disposed of for public
purposes as provided by law.
Subd. 10. [REPORTS.] On or before March 15, 2005, and
March 15, 2007, the special taxing district shall submit a levy
and expenditure report to the commissioner of revenue and to the
chairs of the house and senate committees with jurisdiction over
taxes. Each report must include the amount of the district's
levies for taxes payable for each of the two previous years and
its actual expenditures of those revenues. Expenditures must be
reported by general service category, as listed in subdivision
5, and include a separate category for administrative expenses.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, through taxes levied in 2007,
payable in 2008.
Sec. 9. Minnesota Statutes 2000, section 174.24,
subdivision 3b, is amended to read:
Subd. 3b. [OPERATING ASSISTANCE.] (a) The commissioner
shall determine the total operating cost of any public transit
system receiving or applying for assistance in accordance with
generally accepted accounting principles. To be eligible for
financial assistance, an applicant or recipient shall provide to
the commissioner all financial records and other information and
shall permit any inspection reasonably necessary to determine
total operating cost and correspondingly the amount of
assistance which may be paid to the applicant or recipient.
Where more than one county or municipality contributes
assistance to the operation of a public transit system, the
commissioner shall identify one as lead agency for the purpose
of receiving moneys money under this section.
(b) Prior to distributing operating assistance to eligible
recipients for any contract period, the commissioner shall place
all recipients into one of the following classifications: large
urbanized area service, urbanized area service, small urban area
service, rural area service, and elderly and handicapped
service. The commissioner shall distribute funds under this
section so that the percentage of total operating cost paid by
any recipient from local sources will not exceed the percentage
for that recipient's classification, except as provided in an
undue hardship case. The percentages shall must be: for large
urbanized area service, 50 percent; for urbanized area service
and small urban area service, 40 percent; for rural area
service, 35 percent; and for elderly and handicapped service, 35
percent. The remainder of the total operating cost will be paid
from state funds less any assistance received by the recipient
from any federal source. For purposes of this subdivision
"local sources" means payments under section 174.242 plus all
local sources of funds and includes all operating revenue, tax
levies, and contributions from public funds, except that the
commissioner may exclude from the total assistance contract
revenues derived from operations the cost of which is excluded
from the computation of total operating cost. Total operating
costs for the Duluth transit authority or a successor agency
shall not include costs related to the Superior, Wisconsin
service contract and the independent school district No. 709
service contract.
(c) If a recipient informs the commissioner in writing
after the establishment of these percentages but prior to the
distribution of financial assistance for any year that paying
its designated percentage of total operating cost from local
sources will cause undue hardship, the commissioner may reduce
the percentage to be paid from local sources by the recipient
and increase the percentage to be paid from local sources by one
or more other recipients inside or outside the classification,
provided that no recipient shall have its percentage thus
reduced or increased for more than two years successively. If
for any year the funds appropriated to the commissioner to carry
out the purposes of this section are insufficient to allow the
commissioner to pay the state share of total operating cost as
provided in this paragraph, the commissioner shall reduce the
state share in each classification to the extent necessary.
[EFFECTIVE DATE.] This section is effective for contracts
for service for calendar year 2002 and subsequent years.
Sec. 10. [174.242] [PROPERTY TAX REPLACEMENT AID.]
Subdivision 1. [REPORT OF PROPERTY TAX REVENUES.] By July
31, 2001, each system receiving assistance under section 174.24
must report the amount of its local share operating revenues for
2001 that are derived from property taxes to the commissioner of
transportation. The reported amounts must include property tax
revenues used to fund transit services in excess of the services
provided under contract with the department of transportation.
The reports shall separately identify the property tax revenues
by the taxing jurisdiction from which the revenues were
received. All general fund revenues provided by a local
government unit in Minnesota shall be considered property tax
revenues, except for revenues received from school districts.
The portion of the St. Cloud metropolitan area transit
commission's homestead and agricultural credit aid attributable
to transit operating expenses shall be considered property tax
revenues.
Subd. 2. [VERIFICATION BY COMMISSIONER.] The commissioner
shall examine the reports submitted under subdivision 1, and
adjust the revenue amounts reported if they are determined to be
in error. The commissioner may require a system to provide
whatever information is necessary to assist in determining the
accuracy of the reported amounts.
Subd. 3. [REPLACEMENT AID PAYMENTS.] Each system shall
receive property tax replacement aid payments in calendar years
2002-2003 equal to (i) the proportion that the system's property
tax amount determined under subdivision 2 is of the total amount
determined under subdivision 2 for all systems, times (ii) the
projected total revenues for the greater Minnesota transit fund
for the full fiscal year that begins in the calendar year in
which the aid is payable. A system's property tax replacement
aid for 2002 under this section may not exceed 106 percent of
its 2001 property tax amount determined under subdivision 2. A
system's property tax replacement aid for 2003 under this
section may not exceed 106 percent of its 2002 property tax
replacement aid under this section. The commissioner must
certify the replacement aid amounts for calendar years 2002-2003
to the commissioner of revenue by system and by taxing
jurisdiction by August 15 of the preceding year. The
commissioner of revenue shall deduct the certified amounts from
each jurisdiction's levy limit. Replacement aid amounts for the
St. Cloud metropolitan area transit commission and the Duluth
transit authority shall be deducted from the levy limit for each
of these jurisdictions as specified in chapter 458A. The annual
payments to each system shall be made in two equal installments
on July 20 and November 20.
Subd. 4. [REPORT TO THE LEGISLATURE.] By January 1, 2003,
the commissioner of transportation, in consultation with the
commissioner of revenue, shall make a report to the legislature
containing recommendations for integrating the grant program
under section 174.24 with the property tax replacement aid
program under this section. The recommendations shall attempt
to restructure the method of financing transit operations in
greater Minnesota in such a way as to minimize reliance on
property taxes, while allowing the necessary flexibility to
accommodate growth in service demands.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. [216B.1646] [RATE REDUCTION; PROPERTY TAX
REDUCTION.]
(a) The commission shall, by any method the commission
finds appropriate, reduce the amounts each electric utility
subject to rate regulation by the commission charges its
customers to reflect the amount by which each utility's property
tax on the personal property of its electric generation,
transmission, or distribution system from taxes payable in 2001
to taxes payable in 2002 is reduced. The commission must ensure
that, to the extent feasible, each dollar of property tax
reduction allocated to Minnesota consumers retroactive to
January 1, 2002, results in a dollar of savings to the utility's
customers.
(b) By April 10, 2002, each utility shall submit a filing
to the commission containing:
(1) certified information regarding the utility's property
tax savings allocated to Minnesota retail customers; and
(2) a proposed method of passing these savings on to
Minnesota retail customers.
The utility shall provide the information in clause (1) to
the commissioner of revenue at the same time. The commissioner
shall notify the commission within 30 days as to the accuracy of
the property tax data submitted by the utility.
(c) For purposes of this section, "personal property"
means tools, implements, and machinery of the generating plant.
It does not apply to transformers, transmission lines,
distribution lines, or any other tools, implements, and
machinery that are part of an electric substation, wherever
located.
Sec. 12. [216B.1692] [EMISSIONS REDUCTION RIDER.]
Subdivision 1. [QUALIFYING PROJECTS.] Projects that may be
approved for the emissions reduction rate rider allowed in this
section must:
(1) be installed on existing large electric generating
power plants, as defined in section 216B.2421, subdivision 2,
clause (1), that are located in the state and that are currently
not subject to emission limitations for new power plants under
the federal Clean Air Act;
(2) not increase the capacity of the existing electric
generating power plant more than ten percent or more than 100
megawatts, whichever is greater; and
(3) result in the existing plant either:
(i) complying with applicable new source review standards
under the federal Clean Air Act; or
(ii) emitting air contaminants at levels substantially
lower than allowed for new facilities by the applicable new
source performance standards under the federal Clean Air Act; or
(iii) reducing emissions from current levels at a unit to
the lowest cost effective level when, due to the age or
condition of the generating unit, the public utility
demonstrates that it would not be cost effective to reduce
emissions to the levels in (i) or (ii).
Subd. 2. [SUBMISSION.] A public utility that intends to
submit a proposal for an emissions reduction rider under this
section must submit to the commission, the department, the
pollution control agency, and interested parties its plans for
emissions reduction projects at its generating facilities. This
submission must be made at least 60 days in advance of a
petition for a rider and shall include:
(1) the priority order of emission reduction projects the
utility plans to pursue at its generating facilities;
(2) the planned schedule for implementation;
(3) the analysis and considerations relied on by the public
utility to develop that priority ranking;
(4) the alternative emission reduction projects considered,
including but not limited to applications of the best available
control technology and repowering with natural gas, and reasons
for not pursuing them;
(5) the emission reductions expected to be achieved by the
projects and their relation to applicable standards for new
facilities under the federal Clean Air Act; and
(6) the general rationale and conclusions of the public
utility in determining the priority ranking.
Subd. 3. [FILING.] A public utility may petition the
commission for approval of an emissions reduction rider to
recover the costs of a qualifying emission reduction project
outside of a general rate case proceeding under section
216B.16. In its filing, the public utility shall provide:
(1) a description of the planned emissions reduction
project;
(2) the activities involved in the project;
(3) a schedule for implementation;
(4) any analysis provided to the pollution control agency
regarding the project;
(5) an assessment of alternatives to the project, including
costs, environmental impact, and operational issues;
(6) the proposed method of cost recovery;
(7) any proposed recovery above cost; and
(8) the projected emissions reductions from the project.
Nothing in this section precludes a public utility or
interested party from seeking commission guidelines for
emissions reduction rider filings; however, commission
guidelines are not required as a prerequisite to a public
utility-initiated filing.
Subd. 4. [ENVIRONMENTAL ASSESSMENT.] The pollution control
agency shall evaluate the public utility's emission reduction
project filing and provide the commission with:
(1) verification that the emission reduction project
qualifies under subdivision 1;
(2) a description of the projected environmental benefits
of the proposed project; and
(3) its assessment of the appropriateness of the proposed
project.
Subd. 5. [APPROVAL.] After receiving the pollution control
agency's environmental assessment, the commission shall allow
opportunity for written and oral comment on the proposed
emissions reduction rate rider proposal. The commission must
assess the costs of an emission reduction project on a stand
alone basis and may approve, modify, or reject the proposed
emissions reduction rider. In making its determination, the
commission shall consider whether the project, proposed cost
recovery, and any proposed recovery above cost appropriately
achieves environmental benefits without unreasonable consumer
costs. The commission may approve a rider that:
(1) allows the utility to recover costs of qualifying
emission reduction projects net of revenues attributable to the
project;
(2) allows an appropriate return on investment associated
with qualifying emission reduction projects at the level
established in the public utility's last general rate case;
(3) allocates project costs appropriately between wholesale
and retail customers;
(4) provides a mechanism for recovery above cost, if
necessary to improve the overall economics of the qualifying
projects to ensure implementation;
(5) recovers costs from retail customer classes in
proportion to class energy consumption; and
(6) terminates recovery once the costs of qualifying
projects have been fully recovered.
The commission must not approve an emission reduction
project and its associated rate rider if:
(1) the emissions reduction project is needed to comply
with new state or federal air quality standards; or
(2) the emissions reduction project is required as a
corrective action as part of any state or federal enforcement
action.
The commission may not include any costs of a proposed
project in the emission reduction rider that are not directly
allocable to reduction of emissions.
Subd. 6. [IMPLEMENTATION.] Within 60 days of a final
commission order, the public utility shall notify the commission
and the pollution control agency whether it will proceed with
the project. Nothing in this section commits a public utility
to implementing a proposed emission reduction project if the
proposed project or terms of the emissions reduction rider have
been either modified or rejected by the commission. A public
utility implementing a project under this section will not be
required for a period of eight years after installation to
undertake additional investments to comply with a new state
requirement regarding pollutants addressed by the project at the
project generating facility. This section does not affect
requirements of federal law. The term of the rider shall extend
for the period approved by the commission regardless of any
subsequent state or federal requirement affecting any pollutant
addressed by the approved emission reduction project and
regardless of the sunset date in subdivision 8.
Subd. 7. [EVALUATION.] By January 15, 2005, the
commission, in consultation with the commissioner of commerce
and commissioner of the pollution control agency, shall report
to the legislature:
(1) the number of participating public utilities and
qualifying projects proposed and approved under this section;
(2) the total cost of each project and any associated
incentives;
(3) the reduction in air emissions achieved;
(4) rate impacts of the cost recovery mechanisms; and
(5) an assessment of the effectiveness of the cost recovery
mechanism in accomplishing power plant emissions reductions in
excess of those required by law.
Subd. 8. [SUNSET.] This section is effective until June
30, 2006.
Sec. 13. Minnesota Statutes 2000, section 216B.2424,
subdivision 5, is amended to read:
Subd. 5. [MANDATE.] (a) A public utility, as defined in
section 216B.02, subdivision 4, that operates a nuclear-powered
electric generating plant within this state must construct and
operate, purchase, or contract to construct and operate (1) by
December 31, 1998, 50 megawatts of electric energy installed
capacity generated by farm-grown closed-loop biomass scheduled
to be operational by December 31, 2001; and (2) by December 31,
1998, an additional 75 megawatts of installed capacity so
generated scheduled to be operational by December 31, 2002.
(b) Of the 125 megawatts of biomass electricity installed
capacity required under this subdivision, no more than 50
megawatts of this capacity may be provided by a facility that
uses poultry litter as its primary fuel source and any such
facility:
(1) need not use biomass that complies with the definition
in subdivision 1;
(2) must enter into a contract with the public utility for
such capacity, that has an average purchase price per megawatt
hour over the life of the contract that is equal to or less than
the average purchase price per megawatt hour over the life of
the contract in contracts approved by the public utilities
commission before April 1, 2000, to satisfy the mandate of this
section, and file that contract with the public utilities
commission prior to September 1, 2000; and
(3) such capacity must be scheduled to be operational by
December 31, 2002.
(c) Of the total 125 megawatts of biomass electric energy
installed capacity required under this section, no more than 75
megawatts may be provided by a single project.
(d) Of the 75 megawatts of biomass electric energy
installed capacity required under paragraph (a), clause (2), no
more than 25 megawatts of this capacity may be provided by a St.
Paul district heating and cooling system cogeneration facility
utilizing waste wood as a primary fuel source. The St. Paul
district heating and cooling system cogeneration facility need
not use biomass that complies with the definition in subdivision
1.
(e) The public utility must accept and consider on an equal
basis with other biomass proposals:
(1) a proposal to satisfy the requirements of this section
that includes a project that exceeds the megawatt capacity
requirements of either paragraph (a), clause (1) or (2), and
that proposes to sell the excess capacity to the public utility
or to other purchasers; and
(2) a proposal for a new facility to satisfy more than ten
but not more than 20 megawatts of the electrical generation
requirements by a small business-sponsored independent power
producer facility to be located within the northern quarter of
the state, which means the area located north of Constitutional
Route No. 8 as described in section 161.114, subdivision 2, and
that utilizes biomass residue wood, sawdust, bark, chipped wood,
or brush to generate electricity. A facility described in this
clause is not required to utilize biomass complying with the
definition in subdivision 1, but must have the capacity required
by this clause operational by December 31, 2002.
(e) (f) If a public utility files a contract with the
commission for electric energy installed capacity that uses
poultry litter as its primary fuel source, the commission must
do a preliminary review of the contract to determine if it meets
the purchase price criteria provided in paragraph (b), clause
(2), of this subdivision. The commission shall perform its
review and advise the parties of its determination within 30
days of filing of such a contract by a public utility. A public
utility may submit by September 1, 2000, a revised contract to
address the commission's preliminary determination.
(f) (g) The commission shall finally approve, modify, or
disapprove no later than July 1, 2001, all contracts submitted
by a public utility as of September 1, 2000, to meet the mandate
set forth in this subdivision.
(g) (h) If a public utility subject to this section
exercises an option to increase the generating capacity of a
project in a contract approved by the commission prior to April
25, 2000, to satisfy the mandate in this subdivision, the public
utility must notify the commission by September 1, 2000, that it
has exercised the option and include in the notice the amount of
additional megawatts to be generated under the option
exercised. Any review by the commission of the project after
exercise of such an option shall be based on the same criteria
used to review the existing contract.
(i) A facility specified in this subdivision qualifies for
exemption from property taxation under section 272.02,
subdivision 43.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. Minnesota Statutes 2000, section 271.01,
subdivision 5, is amended to read:
Subd. 5. [JURISDICTION.] The tax court shall have
statewide jurisdiction. Except for an appeal to the supreme
court or any other appeal allowed under this subdivision, the
tax court shall be the sole, exclusive, and final authority for
the hearing and determination of all questions of law and fact
arising under the tax laws of the state, as defined in this
subdivision, in those cases that have been appealed to the tax
court and in any case that has been transferred by the district
court to the tax court. The tax court shall have no
jurisdiction in any case that does not arise under the tax laws
of the state or in any criminal case or in any case determining
or granting title to real property or in any case that is under
the probate jurisdiction of the district court. The small
claims division of the tax court shall have no jurisdiction in
any case dealing with property valuation or assessment for
property tax purposes until the taxpayer has appealed the
valuation or assessment to the county board of equalization, and
in those towns and cities which have not transferred their
duties to the county, the town or city board of equalization,
except for: (i) those taxpayers whose original assessments are
determined by the commissioner of revenue; and (ii) those
taxpayers appealing a denial of a current year application for
the homestead classification for their property and the denial
was not reflected on a valuation notice issued in the year; and
(iii) any case dealing with property valuation, assessment, or
taxation for property tax purposes and meeting the
jurisdictional requirements of section 271.21, subdivision 2,
paragraph (c). The tax court shall have no jurisdiction in any
case involving an order of the state board of equalization
unless a taxpayer contests the valuation of property. Laws
governing taxes, aids, and related matters administered by the
commissioner of revenue, laws dealing with property valuation,
assessment or taxation of property for property tax purposes,
and any other laws that contain provisions authorizing review of
taxes, aids, and related matters by the tax court shall be
considered tax laws of this state subject to the jurisdiction of
the tax court. This subdivision shall not be construed to
prevent an appeal, as provided by law, to an administrative
agency, board of equalization, review under section 274.13,
subdivision 1c, or to the commissioner of revenue. Wherever
used in this chapter, the term commissioner shall mean the
commissioner of revenue, unless otherwise specified.
[EFFECTIVE DATE.] This section is effective for the 2002
assessment, and thereafter.
Sec. 15. Minnesota Statutes 2000, section 271.21,
subdivision 2, is amended to read:
Subd. 2. [JURISDICTION.] At the election of the taxpayer,
the small claims division shall have jurisdiction only in the
following matters:
(a) cases involving valuation, assessment, or taxation of
real or personal property, if the taxpayer has satisfied the
requirements of section 271.01, subdivision 5, and: (i) the
issue is a denial of a current year application for the
homestead classification for the taxpayer's property and the
denial was not reflected on a valuation notice issued in the
year; or (ii) in the case of nonhomestead property, the
assessor's estimated market value is less than $100,000; or
(b) any other case concerning the tax laws as defined in
section 271.01, subdivision 5, in which the amount in
controversy does not exceed $5,000, including penalty and
interest; or
(c) cases involving valuation, assessment, or taxation of
real or personal property if:
(i) the issue is a denial of a current year application for
the homestead classification for the taxpayer's property;
(ii) only one parcel is included in the petition, the
entire parcel is classified as homestead 1a or 1b pursuant to
section 273.13, and the parcel contains no more than one
dwelling unit; or
(iii) the assessor's estimated market value of the property
included in the petition is less than $300,000.
[EFFECTIVE DATE.] This section is effective for the 2002
assessment, and thereafter.
Sec. 16. Minnesota Statutes 2000, section 272.02,
subdivision 22, is amended to read:
Subd. 22. [WIND ENERGY CONVERSION SYSTEMS.] (a) Small
scale wind energy conversion systems installed after January 1,
1991, and used as an electric power source are exempt.
"Small scale wind energy conversion systems" are wind
energy conversion systems, as defined in section 216C.06,
subdivision 12, including the foundation or support pad, which
(i) are used as an electric power source; (ii) are located
within one county and owned by the same owner; and (iii) produce
two megawatts or less of electricity as measured by nameplate
ratings.
(b) Medium scale wind energy conversion systems installed
after January 1, 1991, are treated as follows: (i) the
foundation and support pad are taxable; (ii) the associated
supporting and protective structures are exempt for the first
five assessment years after they have been constructed, and
thereafter, 30 percent of the market value of the associated
supporting and protective structures are taxable; and (iii) the
turbines, blades, transformers, and its related equipment, are
exempt. "Medium scale wind energy conversion systems" are wind
energy conversion systems as defined in section 216C.06,
subdivision 12, including the foundation or support pad, which:
(i) are used as an electric power source; (ii) are located
within one county and owned by the same owner; and (iii) produce
more than two but equal to or less than 12 megawatts of energy
as measured by nameplate ratings.
(c) Large scale wind energy conversion systems installed
after January 1, 1991, are treated as follows: 25 percent of
the market value of all property is taxable, including (i) the
foundation and support pad; (ii) the associated supporting and
protective structures; and (iii) the turbines, blades,
transformers, and its related equipment. "Large scale wind
energy conversion systems" are wind energy conversion systems as
defined in section 216C.06, subdivision 12, including the
foundation or support pad, which (i) are used as an electric
power source; and (ii) produce more than 12 megawatts of energy
as measured by nameplate ratings.
(d) The total size of a wind energy conversion system under
this subdivision shall be determined according to this paragraph.
Unless the systems are interconnected with different
distribution systems, the nameplate capacity of one wind energy
conversion system shall be combined with the nameplate capacity
of any other wind energy conversion system that is:
(1) located within five miles of the wind energy conversion
system;
(2) constructed within the same calendar year as the wind
energy conversion system; and
(3) under common ownership.
In the case of a dispute, the commissioner of commerce
shall determine the total size of the system, and shall draw all
reasonable inferences in favor of combining the systems.
(e) In making a determination under paragraph (d), the
commissioner of commerce may determine that two wind energy
conversion systems are under common ownership when the
underlying ownership structure contains similar persons or
entities, even if the ownership shares differ between the two
systems. Wind energy conversion systems are not under common
ownership solely because the same person or entity provided
equity financing for the systems.
[EFFECTIVE DATE.] This section is effective for wind energy
conversion systems installed after January 1, 2001.
Sec. 17. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 46. [RESIDENTIAL BUILDINGS ON TEMPORARY SITES.] A
newly constructed building that is situated on real property is
exempt if it is:
(1) intended for future residential occupancy;
(2) on a temporary foundation and intended to be moved;
(3) not used as a model or for any other business purposes;
(4) not connected to any utilities; and
(5) located on land that will not be sold with the building.
The exemption under this subdivision is allowable for only
one assessment year after the date of the initial construction
of the building.
[EFFECTIVE DATE.] This section is effective for assessment
year 2001 and thereafter.
Sec. 18. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY;
PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a),
attached machinery and other personal property which is part of
an electrical generating facility that meets the requirements of
this subdivision is exempt. At the time of construction, the
facility must:
(1) be designed to utilize poultry litter as a primary fuel
source; and
(2) be constructed for the purpose of generating power at
the facility that will be sold pursuant to a contract approved
by the public utilities commission in accordance with the
biomass mandate imposed under section 216B.2424.
Construction of the facility must be commenced after
January 1, 2000, and before December 31, 2002. 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. 19. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 48. [WASTE TIRE COGENERATION FACILITY; PERSONAL
PROPERTY.] Notwithstanding subdivision 9, clause (a), attached
machinery and other personal property which is part of an
electric generating facility that meets the requirements of this
subdivision is exempt. At the time of construction, the
facility must:
(1) be designed to utilize waste tires as a primary fuel
source; and
(2) be a cogeneration electric generating facility of 15 to
25 megawatts of installed 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. 20. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 49. [AGRICULTURAL HISTORICAL SOCIETY
PROPERTY.] Property is exempt from taxation if it is owned by a
nonprofit charitable or educational organization that qualifies
for exemption under section 501(c)(3) of the Internal Revenue
Code of 1986, as amended through December 31, 2000, and meets
the following criteria:
(1) the property is primarily used for storing and
exhibiting tools, equipment, and artifacts useful in providing
an understanding of local or regional agricultural history.
Primary use is determined each year based on the number of days
the property is used solely for storage and exhibition purposes;
(2) the property is limited to a maximum of 20 acres per
owner per county, but includes the land and any taxable
structures, fixtures, and equipment on the land;
(3) the property is not used for a revenue-producing
activity for more than ten days in each calendar year; and
(4) the property is not used for residential purposes on
either a temporary or permanent basis.
[EFFECTIVE DATE.] This section is effective for assessment
year 2001 and thereafter.
Sec. 21. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 50. [BIOMASS ELECTRICAL GENERATION FACILITY;
PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a),
attached machinery and other personal property which is part of
an electrical generating facility that meets the requirements of
this subdivision is exempt. At the time of construction, the
facility must:
(1) be designed to utilize biomass as established in
section 216B.2424 as a primary fuel source; and
(2) be constructed for the purpose of generating power at
the facility that will be sold pursuant to a contract approved
by the public utilities commission in accordance with the
biomass mandate imposed under section 216B.2424.
Construction of the facility must be commenced after
January 1, 2000, and before December 31, 2002. Property
eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and
interconnections appurtenant to the property or facility.
[EFFECTIVE DATE.] This section is effective for assessment
year 2001 and thereafter.
Sec. 22. [272.028] [PAYMENT IN LIEU OF PERSONAL PROPERTY
TAX; WIND GENERATION FACILITIES.]
A developer of a new or existing medium or large scale wind
energy conversion system, as defined under section 272.02,
subdivision 22, paragraphs (b) and (c), may negotiate with the
city or town and the county where the wind energy conversion
system is located to establish a payment in lieu of tax on
personal property used to generate electric power. The in lieu
payment is to provide fees or compensation to the host
jurisdictions to maintain public infrastructure and services.
The payment in lieu of personal property tax may be based on
production capacity, historical production, or other factors
agreed upon by the parties. The payment in lieu of tax
agreement must be signed by the parties and filed with the
commissioner of revenue and the county recorder. Upon execution
and filing of the agreement, the personal property to which the
in lieu payment applies shall be deemed exempt from tax under
section 272.02, subdivision 22, paragraphs (b) and (c). This
exemption shall be effective for the assessment year in which
the in lieu payment is agreed upon and shall remain exempt for
the same duration as the in lieu payments are in effect.
Sec. 23. Minnesota Statutes 2000, section 273.11,
subdivision 1a, is amended to read:
Subd. 1a. [LIMITED MARKET VALUE.] In the case of all
property classified as agricultural homestead or nonhomestead,
residential homestead or nonhomestead, timber, or noncommercial
seasonal recreational residential, the assessor shall compare
the value with that the taxable portion of the value determined
in the preceding assessment. The amount of the increase entered
in the current assessment shall not exceed the greater of (1)
8.5 percent of the value in the preceding assessment, or (2) 15
percent of the difference between the current assessment and the
preceding assessment.
For assessment year 2002, the amount of the increase shall
not exceed the greater of (1) 10 percent of the value in the
preceding assessment, or (2) 15 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2003, the amount of the increase shall
not exceed the greater of (1) 12 percent of the value in the
preceding assessment, or (2) 20 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2004, the amount of the increase shall
not exceed the greater of (1) 15 percent of the value in the
preceding assessment, or (2) 25 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2005, the amount of the increase shall
not exceed the greater of (1) 15 percent of the value in the
preceding assessment, or (2) 33 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2006, the amount of the increase shall
not exceed the greater of (1) 15 percent of the value in the
preceding assessment, or (2) 50 percent of the difference
between the current assessment and the preceding assessment.
This limitation shall not apply to increases in value due
to improvements. For purposes of this subdivision, the term
"assessment" means the value prior to any exclusion under
subdivision 16.
The provisions of this subdivision shall be in effect only
through assessment year 2001 2006 as provided in this
subdivision.
For purposes of the assessment/sales ratio study conducted
under section 127A.48, and the computation of state aids paid
under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and
477A, market values and net tax capacities determined under this
subdivision and subdivision 16, shall be used.
[EFFECTIVE DATE.] This section is effective the day
following final enactment. The change to this section which
adds timber property is initially effective for the 2001
assessment.
Sec. 24. Minnesota Statutes 2000, section 273.11,
subdivision 14, is amended to read:
Subd. 14. [VACANT LAND PLATTED ON OR AFTER BEFORE AUGUST
1, 1991 2001.] (a) All land platted on or after before August 1,
1991 2001, and not improved with a permanent structure, shall be
assessed as provided in this subdivision. The assessor shall
determine the market value of each individual lot based upon the
highest and best use of the property as unplatted land. In
establishing the market value of the property, the assessor
shall consider the sale price of the unplatted land or
comparable sales of unplatted land of similar use and similar
availability of public utilities.
(b) The market value determined in paragraph (a) shall be
increased as follows for each of the three assessment years
immediately following the final approval of the plat: one-third
of the difference between the property's unplatted market value
as determined under paragraph (a) and the market value based
upon the highest and best use of the land as platted property
shall be added in each of the three subsequent assessment years.
(c) Any increase in market value after the first assessment
year following the plat's final approval shall be added to the
property's market value in the next assessment year.
Notwithstanding paragraph (b), if construction begins before the
expiration of the three years in paragraph (b), that lot shall
be eligible for revaluation in the next assessment year. The
market value of a platted lot determined under this subdivision
shall not exceed the value of that lot based upon the highest
and best use of the property as platted land.
[EFFECTIVE DATE.] This section is effective for land
platted before August 1, 2001.
Sec. 25. Minnesota Statutes 2000, section 273.11, is
amended by adding a subdivision to read:
Subd. 14a. [VACANT LAND PLATTED ON OR AFTER AUGUST 1,
2001; LOCATED IN METROPOLITAN COUNTIES.] (a) All land platted on
or after August 1, 2001, located in a metropolitan county, and
not improved with a permanent structure, shall be assessed as
provided in this subdivision. The assessor shall determine the
market value of each individual lot based upon the highest and
best use of the property as unplatted land. In establishing the
market value of the property, the assessor shall consider the
sale price of the unplatted land or comparable sales of
unplatted land of similar use and similar availability of public
utilities.
(b) The market value determined in paragraph (a) shall be
increased as follows for each of the three assessment years
immediately following the final approval of the plat: one-third
of the difference between the property's unplatted market value
as determined under paragraph (a) and the market value based
upon the highest and best use of the land as platted property
shall be added in each of the three subsequent assessment years.
(c) Any increase in market value after the first assessment
year following the plat's final approval shall be added to the
property's market value in the next assessment year.
Notwithstanding paragraph (b), if construction begins before the
expiration of the three years in paragraph (b), that lot shall
be eligible for revaluation in the next assessment year. The
market value of a platted lot determined under this subdivision
shall not exceed the value of that lot based upon the highest
and best use of the property as platted land.
(d) For purposes of this section, "metropolitan county"
means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
Scott, and Washington.
[EFFECTIVE DATE.] This section is effective for land
platted after July 31, 2001.
Sec. 26. Minnesota Statutes 2000, section 273.11, is
amended by adding a subdivision to read:
Subd. 14b. [VACANT LAND PLATTED ON OR AFTER AUGUST 1,
2001; LOCATED IN NONMETROPOLITAN COUNTIES.] (a) All land platted
on or after August 1, 2001, located in a nonmetropolitan county,
and not improved with a permanent structure, shall be assessed
as provided in this subdivision. The assessor shall determine
the market value of each individual lot based upon the highest
and best use of the property as unplatted land. In establishing
the market value of the property, the assessor shall consider
the sale price of the unplatted land or comparable sales of
unplatted land of similar use and similar availability of public
utilities.
(b) The market value determined in paragraph (a) shall be
increased as follows for each of the seven assessment years
immediately following the final approval of the plat:
one-seventh of the difference between the property's unplatted
market value as determined under paragraph (a) and the market
value based upon the highest and best use of the land as platted
property shall be added in each of the seven subsequent
assessment years.
(c) Any increase in market value after the first assessment
year following the plat's final approval shall be added to the
property's market value in the next assessment year.
Notwithstanding paragraph (b), if construction begins before the
expiration of the seven years in paragraph (b), that lot shall
be eligible for revaluation in the next assessment year. The
market value of a platted lot determined under this subdivision
shall not exceed the value of that lot based upon the highest
and best use of the property as platted land.
[EFFECTIVE DATE.] This section is effective for land
platted after July 31, 2001.
Sec. 27. Minnesota Statutes 2000, 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 held by a trustee under a trust is eligible for
homestead classification if the 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, 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, or an elderly assisted living facility property
as defined in section 273.13, subdivision 25a, 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, or an elderly
assisted living facility property as defined in section 273.13,
subdivision 25a, 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
levied in 2001, payable in 2002, and thereafter.
Sec. 28. Minnesota Statutes 2000, 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.] (a) Each family farm corporation, each
joint family 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 family farm corporation,
joint family farm venture, limited liability company, or
partnership operating a family farm. Homestead treatment
applies even if legal title to the property is in the name of
the family farm corporation, joint family farm venture, limited
liability company, or partnership operating the family farm, and
not in the name of the person residing on it.
"Family farm corporation," "family farm," and "farm
partnership operating a family farm" have the meanings given in
section 500.24, except that the number of allowable
shareholders, members, or partners under this subdivision shall
not exceed 12. "Limited liability company" has the meaning
contained in section sections 322B.03, subdivision 28, and
500.24, subdivision 2, paragraphs (l) and (m). "Joint family
farm venture" means a cooperative agreement among two or more
farm enterprises authorized to operate a family farm land under
section 500.24.
(b) In addition to property specified in paragraph (a), any
other residences owned by family farm corporations, joint family
farm ventures, limited liability companies, or
partnerships operating a family farm described in paragraph (a)
which are located on agricultural land and occupied as
homesteads by its shareholders, members, or partners who are
actively engaged in farming on behalf of the that 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 that is owned by a member,
partner, or shareholder of a family farm corporation or
joint family 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
operating a family farm, or joint farm venture, as defined in
paragraph (a), is eligible for classification as class 1b or
class 2a 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 that 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 family farm
venture, limited liability company, or partnership operating a
family farm under the lease.
[EFFECTIVE DATE.] This section is effective for the 2001
assessment, taxes payable in 2002, and thereafter.
Sec. 29. Minnesota Statutes 2000, section 273.124,
subdivision 11, is amended to read:
Subd. 11. [LIMITATION ON HOMESTEAD
CLASSIFICATION REDUCTIONS.] If the assessor has classified a
property as both homestead and nonhomestead, the greater of the
value attributable to the portion of the property classified as
class 1 or class 2a or the value of the first tier of net class
rates provided under section 273.13, subdivision 22, or 23,
paragraph (a), is entitled to assessment as a homestead under
section 273.13, subdivision 22 or 23. The limitation in this
subdivision does not apply to buildings containing fewer than
four residential units or to a single rented or leased dwelling
unit located within or attached to a private garage or similar
structure owned by the owner of a homestead and located on the
premises of that homestead.
If the assessor has classified a property as both homestead
and nonhomestead, the reductions in tax provided under sections
273.135 and 273.1391 apply to the value of both the homestead
and the nonhomestead portions of the property.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 30. Minnesota Statutes 2000, section 273.124,
subdivision 13, is amended to read:
Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets
the homestead requirements under subdivision 1 must file a
homestead application with the county assessor to initially
obtain homestead classification.
(b) On or before January 2, 1993, each county assessor
shall mail a homestead application to the owner of each parcel
of property within the county which was classified as homestead
for the 1992 assessment year. The format and contents of a
uniform homestead application shall be prescribed by the
commissioner of revenue. The commissioner shall consult with
the chairs of the house and senate tax committees on the
contents of the homestead application form. The application
must clearly inform the taxpayer that this application must be
signed by all owners who occupy the property or by the
qualifying relative and returned to the county assessor in order
for the property to continue receiving homestead treatment. The
envelope containing the homestead application shall clearly
identify its contents and alert the taxpayer of its necessary
immediate response.
(c) Every property owner applying for homestead
classification must furnish to the county assessor the social
security number of each occupant who is listed as an owner of
the property on the deed of record, the name and address of each
owner who does not occupy the property, and the name and social
security number of each owner's spouse who occupies the
property. The application must be signed by each owner who
occupies the property and by each owner's spouse who occupies
the property, or, in the case of property that qualifies as a
homestead under subdivision 1, paragraph (c), by the qualifying
relative.
If a property owner occupies a homestead, the property
owner's spouse may not claim another property as a homestead
unless the property owner and the property owner's spouse file
with the assessor an affidavit or other proof required by the
assessor stating that the property qualifies as a homestead
under subdivision 1, paragraph (e).
Owners or spouses occupying residences owned by their
spouses and previously occupied with the other spouse, either of
whom fail to include the other spouse's name and social security
number on the homestead application or provide the affidavits or
other proof requested, will be deemed to have elected to receive
only partial homestead treatment of their residence. The
remainder of the residence will be classified as nonhomestead
residential. When an owner or spouse's name and social security
number appear on homestead applications for two separate
residences and only one application is signed, the owner or
spouse will be deemed to have elected to homestead the residence
for which the application was signed.
The social security numbers or affidavits or other proofs
of the property owners and spouses are private data on
individuals as defined by section 13.02, subdivision 12, but,
notwithstanding that section, the private data may be disclosed
to the commissioner of revenue, or, for purposes of proceeding
under the Revenue Recapture Act to recover personal property
taxes owing, to the county treasurer.
(d) If residential real estate is occupied and used for
purposes of a homestead by a relative of the owner and qualifies
for a homestead under subdivision 1, paragraph (c), in order for
the property to receive homestead status, a homestead
application must be filed with the assessor. The social
security number of each relative occupying the property and the
social security number of each owner who is related to an
occupant of the property shall be required on the homestead
application filed under this subdivision. If a different
relative of the owner subsequently occupies the property, the
owner of the property must notify the assessor within 30 days of
the change in occupancy. The social security number of a
relative occupying the property is private data on individuals
as defined by section 13.02, subdivision 12, but may be
disclosed to the commissioner of revenue.
(e) The homestead application shall also notify the
property owners that the application filed under this section
will not be mailed annually and that if the property is granted
homestead status for the 1993 assessment, or any assessment year
thereafter, that same property shall remain classified as
homestead until the property is sold or transferred to another
person, or the owners, the spouse of the owner, or the relatives
no longer use the property as their homestead. Upon the sale or
transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under
section 272.115. Failure to notify the assessor within 30 days
that the property has been sold, transferred, or that the owner,
the spouse of the owner, or the relative is no longer occupying
the property as a homestead, shall result in the penalty
provided under this subdivision and the property will lose its
current homestead status.
(f) If the homestead application is not returned within 30
days, the county will send a second application to the present
owners of record. The notice of proposed property taxes
prepared under section 275.065, subdivision 3, shall reflect the
property's classification. Beginning with assessment year 1993
for all properties, if a homestead application has not been
filed with the county by December 15, the assessor shall
classify the property as nonhomestead for the current assessment
year for taxes payable in the following year, provided that the
owner may be entitled to receive the homestead classification by
proper application under section 375.192.
(g) At the request of the commissioner, each county must
give the commissioner a list that includes the name and social
security number of each property owner and the property owner's
spouse occupying the property, or relative of a property owner,
applying for homestead classification under this subdivision.
The commissioner shall use the information provided on the lists
as appropriate under the law, including for the detection of
improper claims by owners, or relatives of owners, under chapter
290A.
(h) If the commissioner finds that a property owner may be
claiming a fraudulent homestead, the commissioner shall notify
the appropriate counties. Within 90 days of the notification,
the county assessor shall investigate to determine if the
homestead classification was properly claimed. If the property
owner does not qualify, the county assessor shall notify the
county auditor who will determine the amount of homestead
benefits that had been improperly allowed. For the purpose of
this section, "homestead benefits" means the tax reduction
resulting from the classification as a homestead under section
273.13, the taconite homestead credit under section 273.135, the
residential homestead and agricultural homestead credits under
section 273.1384, and the supplemental homestead credit under
section 273.1391.
The county auditor shall send a notice to the person who
owned the affected property at the time the homestead
application related to the improper homestead was filed,
demanding reimbursement of the homestead benefits plus a penalty
equal to 100 percent of the homestead benefits. The person
notified may appeal the county's determination by serving copies
of a petition for review with county officials as provided in
section 278.01 and filing proof of service as provided in
section 278.01 with the Minnesota tax court within 60 days of
the date of the notice from the county. Procedurally, the
appeal is governed by the provisions in chapter 271 which apply
to the appeal of a property tax assessment or levy, but without
requiring any prepayment of the amount in controversy. If the
amount of homestead benefits and penalty is not paid within 60
days, and if no appeal has been filed, the county auditor shall
certify the amount of taxes and penalty to the county
treasurer. The county treasurer will add interest to the unpaid
homestead benefits and penalty amounts at the rate provided in
section 279.03 for real property taxes becoming delinquent in
the calendar year during which the amount remains unpaid.
Interest may be assessed for the period beginning 60 days after
demand for payment was made.
If the person notified is the current owner of the
property, the treasurer may add the total amount of homestead
benefits, penalty, interest, and costs to the ad valorem taxes
otherwise payable on the property by including the amounts on
the property tax statements under section 276.04, subdivision
3. The amounts added under this paragraph to the ad valorem
taxes shall include interest accrued through December 31 of the
year preceding the taxes payable year for which the amounts are
first added. These amounts, when added to the property tax
statement, become subject to all the laws for the enforcement of
real or personal property taxes for that year, and for any
subsequent year.
If the person notified is not the current owner of the
property, the treasurer may collect the amounts due under the
Revenue Recapture Act in chapter 270A, or use any of the powers
granted in sections 277.20 and 277.21 without exclusion, to
enforce payment of the homestead benefits, penalty, interest,
and costs, as if those amounts were delinquent tax obligations
of the person who owned the property at the time the application
related to the improperly allowed homestead was filed. The
treasurer may relieve a prior owner of personal liability for
the homestead benefits, penalty, interest, and costs, and
instead extend those amounts on the tax lists against the
property as provided in this paragraph to the extent that the
current owner agrees in writing. On all demands, billings,
property tax statements, and related correspondence, the county
must list and state separately the amounts of homestead
benefits, penalty, interest and costs being demanded, billed or
assessed.
(i) Any amount of homestead benefits recovered by the
county from the property owner shall be distributed to the
county, city or town, and school district where the property is
located in the same proportion that each taxing district's levy
was to the total of the three taxing districts' levy for the
current year. Any amount recovered attributable to taconite
homestead credit shall be transmitted to the St. Louis county
auditor to be deposited in the taconite property tax relief
account. Any amount recovered that is attributable to
supplemental homestead credit is to be transmitted to the
commissioner of revenue for deposit in the general fund of the
state treasury. The total amount of penalty collected must be
deposited in the county general fund.
(j) If a property owner has applied for more than one
homestead and the county assessors cannot determine which
property should be classified as homestead, the county assessors
will refer the information to the commissioner. The
commissioner shall make the determination and notify the
counties within 60 days.
(k) In addition to lists of homestead properties, the
commissioner may ask the counties to furnish lists of all
properties and the record owners. The social security numbers
and federal identification numbers that are maintained by a
county or city assessor for property tax administration
purposes, and that may appear on the lists retain their
classification as private or nonpublic data; but may be viewed,
accessed, and used by the county auditor or treasurer of the
same county for the limited purpose of assisting the
commissioner in the preparation of microdata samples under
section 270.0681.
[EFFECTIVE DATE.] This section is effective for homestead
applications submitted on or after the day following final
enactment.
Sec. 31. Minnesota Statutes 2000, 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, the owner's spouse, or the owner's son or
daughter of the owner or owner's spouse, is actively farming the
agricultural property, either on the person's own behalf as an
individual or on behalf of a partnership operating a family
farm, family farm corporation, joint family farm venture, or
limited liability company of which the person is a partner,
shareholder, or member;
(2) both the owner of the agricultural property is a
Minnesota resident, and if the owner's son or daughter person
who is actively farming the agricultural property under clause
(1), that person must also be a are Minnesota
resident residents;
(3) neither the owner nor the spouse of the owner claims
another agricultural homestead in Minnesota; and
(4) neither the owner does not live nor the person actively
farming the property lives farther than four townships or
cities, or a combination of four townships or cities, from the
agricultural property, and except that if the owner's son or
daughter is actively farming the agricultural property under
clause (1), that person must also live within the owner or the
owner's spouse is required to live in employer-provided housing,
the owner or owner's spouse, whichever is actively farming the
agricultural property, may live more than 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) Real property held by a trustee under a trust is
eligible for agricultural homestead classification under this
paragraph if the qualifications in clause (i) are met, except
that "owner" means the grantor of the trust.
(ii) (iii) 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 family farm venture, family
farm limited liability company, or partnership operating a
family farm 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 a shareholder, member, or partner of that entity is
actively farming the agricultural property;
(2) the that shareholder, member, or partner of who is
actively farming the agricultural property is a Minnesota
resident;
(3) neither the that shareholder, member, or partner, nor
the spouse of the that shareholder, member, or partner claims
another agricultural homestead in Minnesota; and
(4) the that 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.
Homestead treatment applies under this paragraph for
property leased to a family farm corporation, joint farm
venture, limited liability company, or partnership operating a
family farm if legal title to the property is in the name of an
individual who is a member, shareholder, or partner in the
entity.
[EFFECTIVE DATE.] This section is effective for the 2001
assessment, taxes payable in 2002, and thereafter.
Sec. 32. Minnesota Statutes 2000, section 273.13,
subdivision 22, is amended to read:
Subd. 22. [CLASS 1.] (a) Except as provided in subdivision
23 and in paragraphs (b) and (c), real estate which is
residential and used for homestead purposes is class 1 1a. The
market value of class 1a property must be determined based upon
the value of the house, garage, and land.
The first $76,000 $500,000 of market value of class 1a
property has a net class rate of one percent of its market
value; and the market value of class 1a property that
exceeds $76,000 $500,000 has a class rate of 1.65 1.25 percent
of its market value.
(b) Class 1b property includes homestead real estate or
homestead manufactured homes used for the purposes of a
homestead by
(1) any blind person, or the blind person and the blind
person's spouse; or
(2) any person, hereinafter referred to as "veteran," who:
(i) served in the active military or naval service of the
United States; and
(ii) is entitled to compensation under the laws and
regulations of the United States for permanent and total
service-connected disability due to the loss, or loss of use, by
reason of amputation, ankylosis, progressive muscular
dystrophies, or paralysis, of both lower extremities, such as to
preclude motion without the aid of braces, crutches, canes, or a
wheelchair; and
(iii) has acquired a special housing unit with special
fixtures or movable facilities made necessary by the nature of
the veteran's disability, or the surviving spouse of the
deceased veteran for as long as the surviving spouse retains the
special housing unit as a homestead; or
(3) any person who:
(i) is permanently and totally disabled and
(ii) receives 90 percent or more of total household income,
as defined in section 290A.03, subdivision 5, from
(A) aid from any state as a result of that disability; or
(B) supplemental security income for the disabled; or
(C) workers' compensation based on a finding of total and
permanent disability; or
(D) social security disability, including the amount of a
disability insurance benefit which is converted to an old age
insurance benefit and any subsequent cost of living increases;
or
(E) aid under the federal Railroad Retirement Act of 1937,
United States Code Annotated, title 45, section 228b(a)5; or
(F) a pension from any local government retirement fund
located in the state of Minnesota as a result of that
disability; or
(G) pension, annuity, or other income paid as a result of
that disability from a private pension or disability plan,
including employer, employee, union, and insurance plans and
(iii) has household income as defined in section 290A.03,
subdivision 5, of $50,000 or less; or
(4) any person who is permanently and totally disabled and
whose household income as defined in section 290A.03,
subdivision 5, is 275 percent or less of the federal poverty
level.
Property is classified and assessed under clause (4) only
if the government agency or income-providing source certifies,
upon the request of the homestead occupant, that the homestead
occupant satisfies the disability requirements of this paragraph.
Property is classified and assessed pursuant to clause (1)
only if the commissioner of economic security certifies to the
assessor that the homestead occupant satisfies the requirements
of this paragraph.
Permanently and totally disabled for the purpose of this
subdivision means a condition which is permanent in nature and
totally incapacitates the person from working at an occupation
which brings the person an income. The first $32,000 market
value of class 1b property has a net class rate of .45 percent
of its market value. The remaining market value of class 1b
property has a net class rate using the rates for class 1 1a or
class 2a property, whichever is appropriate, of similar market
value.
(c) Class 1c property is commercial use real property that
abuts a lakeshore line and is devoted to temporary and seasonal
residential occupancy for recreational purposes but not devoted
to commercial purposes for more than 250 days in the year
preceding the year of assessment, and that includes a portion
used as a homestead by the owner, which includes a dwelling
occupied as a homestead by a shareholder of a corporation that
owns the resort or a partner in a partnership that owns the
resort, even if the title to the homestead is held by the
corporation or partnership. For purposes of this clause,
property is devoted to a commercial purpose on a specific day if
any portion of the property, excluding the portion used
exclusively as a homestead, is used for residential occupancy
and a fee is charged for residential occupancy. The first
$500,000 of market value of class 1c property has a class rate
of one percent of total, and the remaining market value of class
1c property has a class rate of one percent, with the following
limitation: the area of the property must not exceed 100 feet
of lakeshore footage for each cabin or campsite located on the
property up to a total of 800 feet and 500 feet in depth,
measured away from the lakeshore. If any portion of the class
1c resort property is classified as class 4c under subdivision
25, the entire property must meet the requirements of
subdivision 25, paragraph (d), clause (1), to qualify for class
1c treatment under this paragraph.
(d) Class 1d property includes structures that meet all of
the following criteria:
(1) the structure is located on property that is classified
as agricultural property under section 273.13, subdivision 23;
(2) the structure is occupied exclusively by seasonal farm
workers during the time when they work on that farm, and the
occupants are not charged rent for the privilege of occupying
the property, provided that use of the structure for storage of
farm equipment and produce does not disqualify the property from
classification under this paragraph;
(3) the structure meets all applicable health and safety
requirements for the appropriate season; and
(4) the structure is not salable as residential property
because it does not comply with local ordinances relating to
location in relation to streets or roads.
The market value of class 1d property has the same class
rates as class 1a property under paragraph (a).
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 33. Minnesota Statutes 2000, section 273.13,
subdivision 23, is amended to read:
Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural
land including any improvements that is homesteaded. The market
value of the house and garage and immediately surrounding one
acre of land has the same class rates as class 1a property under
subdivision 22. The value of the remaining land including
improvements up to $115,000 has a net class rate of 0.35 percent
of market value. The value of class 2a property over $115,000
of market value up to and including $600,000 market value has a
net class rate of 0.8 0.55 percent of market value. The
remaining property over $600,000 market value has a class rate
of 1.20 one percent of market value.
(b) Class 2b property is (1) real estate, rural in
character and used exclusively for growing trees for timber,
lumber, and wood and wood products; (2) real estate that is not
improved with a structure and is used exclusively for growing
trees for timber, lumber, and wood and wood products, if the
owner has participated or is participating in a cost-sharing
program for afforestation, reforestation, or timber stand
improvement on that particular property, administered or
coordinated by the commissioner of natural resources; (3) real
estate that is nonhomestead agricultural land; or (4) a landing
area or public access area of a privately owned public use
airport. Class 2b property has a net class rate of 1.20 one
percent of market value.
(c) Agricultural land as used in this section means
contiguous acreage of ten acres or more, used during the
preceding year for agricultural purposes. "Agricultural
purposes" as used in this section means the raising or
cultivation of agricultural products or enrollment in the
Reinvest in Minnesota program under sections 103F.501 to
103F.535 or the federal Conservation Reserve Program as
contained in Public Law Number 99-198. Contiguous acreage on
the same parcel, or contiguous acreage on an immediately
adjacent parcel under the same ownership, may also qualify as
agricultural land, but only if it is pasture, timber, waste,
unusable wild land, or land included in state or federal farm
programs. Agricultural classification for property shall be
determined excluding the house, garage, and immediately
surrounding one acre of land, and shall not be based upon the
market value of any residential structures on the parcel or
contiguous parcels under the same ownership.
(d) Real estate, excluding the house, garage, and
immediately surrounding one acre of land, of less than ten acres
which is exclusively and intensively used for raising or
cultivating agricultural products, shall be considered as
agricultural land.
Land shall be classified as agricultural even if all or a
portion of the agricultural use of that property is the leasing
to, or use by another person for agricultural purposes.
Classification under this subdivision is not determinative
for qualifying under section 273.111.
The property classification under this section supersedes,
for property tax purposes only, any locally administered
agricultural policies or land use restrictions that define
minimum or maximum farm acreage.
(e) The term "agricultural products" as used in this
subdivision includes production for sale of:
(1) livestock, dairy animals, dairy products, poultry and
poultry products, fur-bearing animals, horticultural and nursery
stock described in sections 18.44 to 18.61, fruit of all kinds,
vegetables, forage, grains, bees, and apiary products by the
owner;
(2) fish bred for sale and consumption if the fish breeding
occurs on land zoned for agricultural use;
(3) the commercial boarding of horses if the boarding is
done in conjunction with raising or cultivating agricultural
products as defined in clause (1);
(4) property which is owned and operated by nonprofit
organizations used for equestrian activities, excluding racing;
(5) game birds and waterfowl bred and raised for use on a
shooting preserve licensed under section 97A.115;
(6) insects primarily bred to be used as food for
animals; and
(7) trees, grown for sale as a crop, and not sold for
timber, lumber, wood, or wood products; and
(8) maple syrup taken from trees grown by a person licensed
by the Minnesota department of agriculture under chapter 28A as
a food processor.
(f) If a parcel used for agricultural purposes is also used
for commercial or industrial purposes, including but not limited
to:
(1) wholesale and retail sales;
(2) processing of raw agricultural products or other goods;
(3) warehousing or storage of processed goods; and
(4) office facilities for the support of the activities
enumerated in clauses (1), (2), and (3),
the assessor shall classify the part of the parcel used for
agricultural purposes as class 1b, 2a, or 2b, whichever is
appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural
products for first sale is considered an agricultural purpose.
A greenhouse or other building where horticultural or nursery
products are grown that is also used for the conduct of retail
sales must be classified as agricultural if it is primarily used
for the growing of horticultural or nursery products from seed,
cuttings, or roots and occasionally as a showroom for the retail
sale of those products. Use of a greenhouse or building only
for the display of already grown horticultural or nursery
products does not qualify as an agricultural purpose.
The assessor shall determine and list separately on the
records the market value of the homestead dwelling and the one
acre of land on which that dwelling is located. If any farm
buildings or structures are located on this homesteaded acre of
land, their market value shall not be included in this separate
determination.
(g) To qualify for classification under paragraph (b),
clause (4), a privately owned public use airport must be
licensed as a public airport under section 360.018. For
purposes of paragraph (b), clause (4), "landing area" means that
part of a privately owned public use airport properly cleared,
regularly maintained, and made available to the public for use
by aircraft and includes runways, taxiways, aprons, and sites
upon which are situated landing or navigational aids. A landing
area also includes land underlying both the primary surface and
the approach surfaces that comply with all of the following:
(i) the land is properly cleared and regularly maintained
for the primary purposes of the landing, taking off, and taxiing
of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is
not included as a landing area;
(ii) the land is part of the airport property; and
(iii) the land is not used for commercial or residential
purposes.
The land contained in a landing area under paragraph (b), clause
(4), must be described and certified by the commissioner of
transportation. The certification is effective until it is
modified, or until the airport or landing area no longer meets
the requirements of paragraph (b), clause (4). For purposes of
paragraph (b), clause (4), "public access area" means property
used as an aircraft parking ramp, apron, or storage hangar, or
an arrival and departure building in connection with the airport.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2001, payable in 2002, and thereafter.
Sec. 34. Minnesota Statutes 2000, 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 1.5 percent of the first tier of market value,
and 3.4 2.0 percent of the remaining market value. 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.
For purposes of this subdivision, parcels are considered to
be contiguous even if they are separated from each other by a
road, street, 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 All railroad operating property and all
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 a qualifying
entity 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 a qualifying
entity 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 a qualifying entity. This reduced
class rate applies only if a qualifying entity 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.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 35. Minnesota Statutes 2000, 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. The market value
of 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 1.8 percent for taxes payable in 2002, 1.5 percent
for taxes payable in 2003, and 1.25 percent for taxes payable in
2004 and thereafter, except that class 4a property consisting of
a structure for which construction commenced after June 30,
2001, has a class rate of 1.25 percent of market value for taxes
payable in 2003 and subsequent years.
(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.
The market value of class 4b property has a class rate of
1.65 percent of market value 1.5 percent for taxes payable in
2002, and 1.25 percent for taxes payable in 2003 and thereafter.
(c) Class 4bb includes:
(1) nonhomestead residential real estate containing one
unit, other than seasonal residential, and recreational; and
(2) a single family dwelling, garage, and surrounding one
acre of property on a nonhomestead farm classified under
subdivision 23, paragraph (b).
Class 4bb property 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 the same class rates as
class 1a property under subdivision 22.
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;
(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 1.5 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) commercial-use
seasonal residential recreational property has a class rate of
one percent for the first $500,000 of market value, which
includes any market value receiving the one percent rate under
subdivision 22, and 1.25 percent for the remaining market value,
(iv) the market value of property described in clause (4) has a
class rate of one percent, and (v) the market value of property
described in clauses (2) and (6) has a class rate of 1.25
percent.
(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 0.9 percent for taxes payable in 2002, and one percent for
taxes payable in 2003 and 1.25 percent for taxes payable in 2004
and thereafter.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 36. Minnesota Statutes 2000, section 273.13,
subdivision 31, is amended to read:
Subd. 31. [CLASS 5.] Class 5 property includes:
(1) unmined iron ore and low-grade iron-bearing formations
as defined in section 273.14; and
(2) all other property not otherwise classified.
Class 5 property has a class rate of 3.4 2.0 percent of
market value.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 37. [273.1384] [MARKET VALUE HOMESTEAD CREDITS.]
Subdivision 1. [RESIDENTIAL HOMESTEAD MARKET VALUE
CREDIT.] Each county auditor shall determine a homestead credit
for each class 1a, 1b, 1c, and 2a homestead property within the
county equal to .4 percent of the market value of the property.
The amount of homestead credit for a homestead may not exceed
$304 and is reduced by .09 percent of the market value in excess
of $76,000. In the case of an agricultural or resort homestead,
only the market value of the house, garage, and immediately
surrounding one acre of land is eligible in determining the
property's homestead credit.
Subd. 2. [AGRICULTURAL HOMESTEAD MARKET VALUE
CREDIT.] Property classified as class 2a agricultural homestead
is eligible for an agricultural credit. The credit is equal to
0.2 percent of the first $115,000 of the property's market
value. The credit under this subdivision is limited to $230 for
each homestead.
Subd. 3. [CREDIT REIMBURSEMENTS.] The county auditor shall
determine the tax reductions allowed under this section within
the county for each taxes payable year and shall certify that
amount to the commissioner of revenue as a part of the abstracts
of tax lists submitted by the county auditors under section
275.29. Any prior year adjustments shall also be certified on
the abstracts of tax lists. The commissioner shall review the
certifications for accuracy, and may make such changes as are
deemed necessary, or return the certification to the county
auditor for correction. The credits under this section must be
used to proportionately reduce the net tax capacity-based
property tax payable to each local taxing jurisdiction as
provided in section 273.1393.
Subd. 4. [PAYMENT.] (a) The commissioner of revenue shall
reimburse each local taxing jurisdiction, other than school
districts, for the tax reductions granted under this section in
two equal installments on October 31 and December 26 of the
taxes payable year for which the reductions are granted,
including in each payment the prior year adjustments certified
on the abstracts for that taxes payable year. The
reimbursements related to tax increments shall be issued in one
installment each year on December 26.
(b) The commissioner of revenue shall certify the total of
the tax reductions granted under this section for each taxes
payable year within each school district to the commissioner of
the department of children, families, and learning and the
commissioner of children, families, and learning shall pay the
reimbursement amounts to each school district as provided in
section 273.1392.
Subd. 5. [APPROPRIATION.] An amount sufficient to make the
payments required by this section to taxing jurisdictions other
than school districts is annually appropriated from the general
fund to the commissioner of revenue. An amount sufficient to
make the payments required by this section for school districts
is annually appropriated from the general fund to the
commissioner of children, families, and learning.
[EFFECTIVE DATE.] This section is effective for taxes,
credits, and reimbursements payable in 2002 and thereafter.
Sec. 38. Minnesota Statutes 2000, section 273.1392, is
amended to read:
273.1392 [PAYMENT; SCHOOL DISTRICTS.]
The amounts of conservation tax credits under section
273.119; disaster or emergency reimbursement under section
273.123; attached machinery aid under section 273.138; homestead
credit under section 273.13 homestead and agricultural credits
under section 273.1384; aids and credits under section 273.1398;
wetlands reimbursement under section 275.295; enterprise zone
property credit payments under section 469.171; and metropolitan
agricultural preserve reduction under section 473H.10 for school
districts, shall be certified to the department of children,
families, and learning by the department of revenue. The
amounts so certified shall be paid according to section 127A.45,
subdivisions 9 and 13.
[EFFECTIVE DATE.] This section is effective for aids and
credits payable in 2002 and thereafter.
Sec. 39. Minnesota Statutes 2000, section 273.1393, is
amended to read:
273.1393 [COMPUTATION OF NET PROPERTY TAXES.]
Notwithstanding any other provisions to the contrary, "net"
property taxes are determined by subtracting the credits in the
order listed from the gross tax:
(1) disaster credit as provided in section 273.123;
(2) powerline credit as provided in section 273.42;
(3) agricultural preserves credit as provided in section
473H.10;
(4) enterprise zone credit as provided in section 469.171;
(5) disparity reduction credit;
(6) conservation tax credit as provided in section 273.119;
(7) education homestead credit and agricultural credits as
provided in section 273.1382 273.1384;
(8) taconite homestead credit as provided in section
273.135; and
(9) supplemental homestead credit as provided in section
273.1391.
The combination of all property tax credits must not exceed
the gross tax amount.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 40. Minnesota Statutes 2000, section 273.1398, is
amended by adding a subdivision to read:
Subd. 2e. [HOMESTEAD AND AGRICULTURAL AID FOR CITIES,
TOWNS, AND SPECIAL TAXING DISTRICTS.] Notwithstanding the
provisions of subdivision 2, the amount of homestead and
agricultural credit aid for a statutory or home rule charter
city, town, school district, or special taxing district for aid
payable in calendar year 2002 and thereafter is zero.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2002 and future years.
Sec. 41. Minnesota Statutes 2000, section 273.166,
subdivision 2, is amended to read:
Subd. 2. [MANUFACTURED HOME HOMESTEAD AND AGRICULTURAL
CREDIT AID.] For In calendar year 2002, and each calendar year
thereafter, the manufactured home homestead and agricultural
credit aid for each taxing jurisdiction equals the taxing
jurisdiction's shall be paid to each county under this section
in an amount equal to the county's manufactured home homestead
and agricultural credit aid determined under this subdivision
for the preceding aid payable year times the growth adjustment
factor for the jurisdiction plus the net tax capacity adjustment
for the jurisdiction county. Payment will not be made to
any taxing jurisdiction county that has ceased to levy a
property tax.
[EFFECTIVE DATE.] This section is effective for aid paid in
2002 and thereafter.
Sec. 42. Minnesota Statutes 2000, section 273.166,
subdivision 3, is amended to read:
Subd. 3. [AID CALCULATION.] The commissioner of revenue
shall make the calculation required in subdivision 2 and
annually pay manufactured home homestead and agricultural credit
aid to the local governments counties at the times provided in
section 473H.10 for local governments other than school
districts. Aid payments to the school districts must be
certified to the commissioner of children, families, and
learning and paid under section 273.1392.
[EFFECTIVE DATE.] This section is effective for aid paid in
2002 and thereafter.
Sec. 43. Minnesota Statutes 2000, section 273.166,
subdivision 5, is amended to read:
Subd. 5. [APPROPRIATION.] There is annually appropriated
from the general fund to the commissioner of children, families,
and learning a sum sufficient to pay the aids provided under
this section for school districts, intermediate school
districts, or any group of school districts levying as a single
taxing entity. There is annually appropriated from the general
fund to the commissioner of revenue a sum sufficient to pay the
aids provided under this section to counties, cities, towns, and
special taxing districts.
[EFFECTIVE DATE.] This section is effective for fiscal year
2003 and thereafter.
Sec. 44. Minnesota Statutes 2000, section 273.42, is
amended by adding a subdivision to read:
Subd. 3. [STATE TAX ON TRANSMISSION AND DISTRIBUTION
LINES.] Notwithstanding section 273.425, the entire tax capacity
of property taxed at the average local tax rate under
subdivision 1 is subject to the state tax rate provided in
section 275.025. Notwithstanding subdivisions 1 and 2, the
entire proceeds of the state tax levy for each such property
must be distributed to the state under the procedures provided
in chapter 276. No portion of the proceeds from the state levy
on such property is distributed within the county under
subdivision 1 or 2.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 45. Minnesota Statutes 2000, section 275.02, is
amended to read:
275.02 [STATE LEVY, EXCEPTIONS FOR BONDED DEBT;
CERTIFICATION OF TAX RATE.]
The A state tax for bonded debt pursuant to the Minnesota
Constitution, article XI, shall be levied on the tax capacity of
all taxable property in the state. The rate of the tax shall be
certified by the state auditor to each county auditor on or
before November 15 1 annually. The tax under this section is
not treated as a local tax rate under 469.177.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 46. [275.025] [STATE GENERAL TAX.]
Subdivision 1. [LEVY AMOUNT.] The state general levy is
levied against commercial-industrial property and seasonal
recreational property, as defined in this section. The state
general levy is $592,000,000 for taxes payable in 2002. For
taxes payable in subsequent years, the levy is increased each
year by multiplying the amount for the prior year by the sum of
one plus the rate of increase, if any, in the implicit price
deflator for government consumption expenditures and gross
investment for state and local governments prepared by the
Bureau of Economic Analysts of the United States Department of
Commerce for the 12-month period ending March 31 of the year
prior to the year the taxes are payable. The tax under this
section is not treated as a local tax rate under section 469.177
and is not the levy of a governmental unit under chapters 276A
and 473F. Beginning in fiscal year 2004, and in each year
thereafter, the commissioner of finance shall deposit in an
education reserve account, which account is hereby established,
the increased amount of the state general levy received for
deposit in the general fund for that year over the amount of the
state general levy received for deposit in the general fund in
fiscal year 2003. The amounts in the education reserve account
do not lapse or cancel each year, but remain until appropriated
by law for education aid or higher education funding.
Subd. 2. [COMMERCIAL-INDUSTRIAL TAX CAPACITY.] For the
purposes of this section, "commercial-industrial tax capacity"
means the tax capacity of all taxable property classified as
class 3 or class 5(1) under section 273.13, except for electric
generation attached machinery under class 3 and property
described in section 473.625. County commercial-industrial tax
capacity amounts are not adjusted for the captured net tax
capacity of a tax increment financing district under section
469.177, subdivision 2, the net tax capacity of transmission
lines deducted from a local government's total net tax capacity
under section 273.425, or fiscal disparities contribution and
distribution net tax capacities under chapter 276A or 473F.
Subd. 3. [SEASONAL RECREATIONAL TAX CAPACITY.] For the
purposes of this section, "seasonal recreational tax capacity"
means the tax capacity of all class 4c(1) property under section
273.13, subdivision 25, except that the first $76,000 of market
value of each noncommercial class 4c(1) property has a tax
capacity for this purpose equal to 40 percent of its tax
capacity under section 273.13.
Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL
TAX.] The state general tax must be distributed among the
counties by applying a uniform rate to each county's
commercial-industrial tax capacity and its seasonal recreational
tax capacity. Within each county, the tax must be levied by
applying a uniform rate against commercial-industrial tax
capacity and seasonal recreational tax capacity. By November 1
each year, the commissioner of revenue shall certify the state
general levy rate to each county auditor.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and subsequent years.
Sec. 47. Minnesota Statutes 2000, section 275.065,
subdivision 3, is amended to read:
Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The
county auditor shall prepare and the county treasurer shall
deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed
on the county's current year's assessment roll, a notice of
proposed property taxes.
(b) The commissioner of revenue shall prescribe the form of
the notice.
(c) The notice must inform taxpayers that it contains the
amount of property taxes each taxing authority proposes to
collect for taxes payable the following year. In the case of a
town, or in the case of the state determined portion of the
school district levy, the final tax amount will be its proposed
tax. In the case of taxing authorities required to hold a
public meeting under subdivision 6, the notice must clearly
state that each taxing authority, including regional library
districts established under section 134.201, and including the
metropolitan taxing districts as defined in paragraph (i), but
excluding all other special taxing districts and towns, will
hold a public meeting to receive public testimony on the
proposed budget and proposed or final property tax levy, or, in
case of a school district, on the current budget and proposed
property tax levy. It must clearly state the time and place of
each taxing authority's meeting, a telephone number for the
taxing authority that taxpayers may call if they have questions
related to the notice, and an address where comments will be
received by mail.
(d) The notice must state for each parcel:
(1) the market value of the property as determined under
section 273.11, and used for computing property taxes payable in
the following year and for taxes payable in the current year as
each appears in the records of the county assessor on November 1
of the current year; and, in the case of residential property,
whether the property is classified as homestead or
nonhomestead. The notice must clearly inform taxpayers of the
years to which the market values apply and that the values are
final values;
(2) the items listed below, shown separately by county,
city or town, state determined school tax net of the education
homestead credit under section 273.1382, voter approved school
levy, other local school levy, and the sum of the special taxing
districts, and as a total of all taxing authorities:
(i) the actual tax for taxes payable in the current year;
(ii) the tax change due to spending factors, defined as the
proposed tax minus the constant spending tax amount;
(iii) the tax change due to other factors, defined as the
constant spending tax amount minus the actual current year tax;
and
(iv) the proposed tax amount.
In the case of a town or the state determined school tax,
the final tax shall also be its proposed tax unless the town
changes its levy at a special town meeting under section
365.52. If a school district has certified under section
126C.17, subdivision 9, that a referendum will be held in the
school district at the November general election, the county
auditor must note next to the school district's proposed amount
that a referendum is pending and that, if approved by the
voters, the tax amount may be higher than shown on the notice.
In the case of the city of Minneapolis, the levy for the
Minneapolis library board and the levy for Minneapolis park and
recreation shall be listed separately from the remaining amount
of the city's levy. In the case of a parcel where tax increment
or the fiscal disparities areawide tax under chapter 276A or
473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide
tax must each be stated separately and not included in the sum
of the special taxing districts; and
(3) the increase or decrease between the total taxes
payable in the current year and the total proposed taxes,
expressed as a percentage.
For purposes of this section, the amount of the tax on
homesteads qualifying under the senior citizens' property tax
deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax
amount.
(e) The notice must clearly state that the proposed or
final taxes do not include the following:
(1) special assessments;
(2) levies approved by the voters after the date the
proposed taxes are certified, including bond referenda, school
district levy referenda, and levy limit increase referenda;
(3) amounts necessary to pay cleanup or other costs due to
a natural disaster occurring after the date the proposed taxes
are certified;
(4) amounts necessary to pay tort judgments against the
taxing authority that become final after the date the proposed
taxes are certified; and
(5) the contamination tax imposed on properties which
received market value reductions for contamination.
(f) Except as provided in subdivision 7, failure of the
county auditor to prepare or the county treasurer to deliver the
notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the
tax levy.
(g) If the notice the taxpayer receives under this section
lists the property as nonhomestead, and satisfactory
documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the
homestead classification in that assessment year, the assessor
shall reclassify the property to homestead for taxes payable in
the following year.
(h) In the case of class 4 residential property used as a
residence for lease or rental periods of 30 days or more, the
taxpayer must either:
(1) mail or deliver a copy of the notice of proposed
property taxes to each tenant, renter, or lessee; or
(2) post a copy of the notice in a conspicuous place on the
premises of the property.
The notice must be mailed or posted by the taxpayer by
November 27 or within three days of receipt of the notice,
whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of
the premises to which the notice must be mailed in order to
fulfill the requirements of this paragraph.
(i) For purposes of this subdivision, subdivisions 5a and
6, "metropolitan special taxing districts" means the following
taxing districts in the seven-county metropolitan area that levy
a property tax for any of the specified purposes listed below:
(1) metropolitan council under section 473.132, 473.167,
473.249, 473.325, 473.446, 473.521, 473.547, or 473.834;
(2) metropolitan airports commission under section 473.667,
473.671, or 473.672; and
(3) metropolitan mosquito control commission under section
473.711.
For purposes of this section, any levies made by the
regional rail authorities in the county of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy and
shall be discussed at that county's public hearing.
(j) If a statutory or home rule charter city or a town has
exercised the local levy option provided by section 473.388,
subdivision 7, it may include in the notice of its proposed
taxes the amount of its proposed taxes attributable to its
exercise of the option. In the first year of the city or town's
exercise of this option, the statement shall include an estimate
of the reduction of the metropolitan council's tax on the parcel
due to exercise of that option. The metropolitan council's levy
shall be adjusted accordingly.
[EFFECTIVE DATE.] This section is effective for notices of
proposed property taxes required in 2001 for taxes payable in
2002, and thereafter.
Sec. 48. Minnesota Statutes 2000, section 275.065,
subdivision 5a, is amended to read:
Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a
population of more than 2,500, county, a metropolitan special
taxing district as defined in subdivision 3, paragraph (i), a
regional library district established under section 134.201, or
school district shall advertise in a newspaper a notice of its
intent to adopt a budget and property tax levy or, in the case
of a school district, to review its current budget and proposed
property taxes payable in the following year, at a public
hearing, if a public hearing is required under subdivision 6.
The notice must be published not less than two business days nor
more than six business days before the hearing.
The advertisement must be at least one-eighth page in size
of a standard-size or a tabloid-size newspaper. The
advertisement must not be placed in the part of the newspaper
where legal notices and classified advertisements appear. The
advertisement must be published in an official newspaper of
general circulation in the taxing authority. The newspaper
selected must be one of general interest and readership in the
community, and not one of limited subject matter. The
advertisement must appear in a newspaper that is published at
least once per week.
For purposes of this section, the metropolitan special
taxing district's advertisement must only be published in the
Minneapolis Star and Tribune and the Saint Paul Pioneer Press.
In addition to other requirements, a county and a city
having a population of more than 2,500 must show in the public
advertisement required under this subdivision the current local
tax rate, the proposed local tax rate if no property tax levy
increase is adopted, and the proposed rate if the proposed levy
is adopted. For purposes of this subdivision, "local tax rate"
means the city's or county's net tax capacity levy divided by
the city's or county's taxable net tax capacity.
(b) The advertisement for school districts, metropolitan
special taxing districts, and regional library districts must be
in the following form, except that the notice for a school
district may include references to the current budget in regard
to proposed property taxes.
"NOTICE OF
PROPOSED PROPERTY TAXES
(School District/Metropolitan
Special Taxing District/Regional
Library District) of .........
The governing body of ........ will soon hold budget hearings
and vote on the property taxes for (metropolitan special taxing
district/regional library district services that will be
provided in (year)/school district services that will be
provided in (year) and (year)).
NOTICE OF PUBLIC HEARING:
All concerned citizens are invited to attend a public hearing
and express their opinions on the proposed (school
district/metropolitan special taxing district/regional library
district) budget and property taxes, or in the case of a school
district, its current budget and proposed property taxes,
payable in the following year. The hearing will be held on
(Month/Day/Year) at (Time) at (Location, Address)."
(c) The advertisement for cities and counties must be in
the following form.
"NOTICE OF PROPOSED
TOTAL BUDGET AND PROPERTY TAXES
The (city/county) governing body or board of commissioners will
hold a public hearing to discuss the budget and to vote on the
amount of property taxes to collect for services the
(city/county) will provide in (year).
SPENDING: The total budget amounts below compare
(city's/county's) (year) total actual budget with the amount the
(city/county) proposes to spend in (year).
(Year) Total Proposed (Year) Change from
Actual Budget Budget (Year)-(Year)
$....... $....... ...%
TAXES: The property tax amounts below compare that portion of
the current budget levied in property taxes in (city/county) for
(year) with the property taxes the (city/county) proposes to
collect in (year).
(Year) Property Proposed (Year) Change from
Taxes Property Taxes (Year)-(Year)
$....... $....... ...%
LOCAL TAX RATE COMPARISON: The current local tax rate, the
local tax rate if no tax levy increase is adopted, and the
proposed local tax rate if the proposed levy is adopted.
(Year) (Year) (Year)
Tax Rate Tax Rate if NO Proposed
Levy Increase Tax Rate
....... ....... .......
ATTEND THE PUBLIC HEARING
All (city/county) residents are invited to attend the public
hearing of the (city/county) to express your opinions on the
budget and the proposed amount of (year) property taxes. The
hearing will be held on:
(Month/Day/Year/Time)
(Location/Address)
If the discussion of the budget cannot be completed, a time and
place for continuing the discussion will be announced at the
hearing. You are also invited to send your written comments to:
(City/County)
(Location/Address)"
(d) For purposes of this subdivision, the budget amounts
listed on the advertisement mean:
(1) for cities, the total government fund expenditures, as
defined by the state auditor under section 471.6965, less any
expenditures for improvements or services that are specially
assessed or charged under chapter 429, 430, 435, or the
provisions of any other law or charter; and
(2) for counties, the total government fund expenditures,
as defined by the state auditor under section 375.169, less any
expenditures for direct payments to recipients or providers for
the human service aids listed below:
(i) Minnesota family investment program under chapters 256J
and 256K;
(ii) medical assistance under sections 256B.041,
subdivision 5, and 256B.19, subdivision 1;
(iii) general assistance medical care under section
256D.03, subdivision 6;
(iv) general assistance under section 256D.03, subdivision
2;
(v) emergency assistance under section 256J.48;
(vi) Minnesota supplemental aid under section 256D.36,
subdivision 1;
(vii) preadmission screening under section 256B.0911, and
alternative care grants under section 256B.0913;
(viii) general assistance medical care claims processing,
medical transportation and related costs under section 256D.03,
subdivision 4;
(ix) medical transportation and related costs under section
256B.0625, subdivisions 17 to 18a;
(x) group residential housing under section 256I.05,
subdivision 8, transferred from programs in clauses (iv) and
(vi); or
(xi) any successor programs to those listed in clauses (i)
to (x).
(e) A city with a population of over 500 but not more than
2,500 that is required to hold a public hearing under
subdivision 6 must advertise by posted notice as defined in
section 645.12, subdivision 1. The advertisement must be posted
at the time provided in paragraph (a). It must be in the form
required in paragraph (b).
(f) For purposes of this subdivision, the population of a
city is the most recent population as determined by the state
demographer under section 4A.02.
(g) The commissioner of revenue, subject to the approval of
the chairs of the house and senate tax committees, shall
prescribe the form and format of the advertisement
advertisements required under this subdivision.
[EFFECTIVE DATE.] This section is effective for public
advertisements required in 2001 for taxes payable in 2002, and
thereafter.
Sec. 49. Minnesota Statutes 2000, section 275.065,
subdivision 6, is amended to read:
Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.]
(a) For purposes of this section, the following terms shall have
the meanings given:
(1) "Initial hearing" means the first and primary hearing
held to discuss the taxing authority's proposed budget and
proposed property tax levy for taxes payable in the following
year, or, for school districts, the current budget and the
proposed property tax levy for taxes payable in the following
year.
(2) "Continuation hearing" means a hearing held to complete
the initial hearing, if the initial hearing is not completed on
its scheduled date.
(3) "Subsequent hearing" means the hearing held to adopt
the taxing authority's final property tax levy, and, in the case
of taxing authorities other than school districts, the final
budget, for taxes payable in the following year.
(b) Between November 29 and December 20, the governing
bodies of a city that has a population over 500, county,
metropolitan special taxing districts as defined in subdivision
3, paragraph (i), and regional library districts shall each hold
an initial public hearing to discuss and seek public comment on
its final budget and property tax levy for taxes payable in the
following year, and the governing body of the school district
shall hold an initial public hearing to review its current
budget and proposed property tax levy for taxes payable in the
following year. The metropolitan special taxing districts shall
be required to hold only a single joint initial public hearing,
the location of which will be determined by the affected
metropolitan agencies. A city, county, metropolitan special
taxing district as defined in subdivision 3, paragraph (i),
regional library district established under section 134.201, or
school district is not required to hold a public hearing under
this subdivision unless its proposed property tax levy for taxes
payable in the following year, as certified under subdivision 1,
has increased over its final property tax levy for taxes payable
in the current year by a percentage that is greater than 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
Analysts of the United States Department of Commerce for the
12-month period ending March 31 of the current year.
(c) The initial hearing must be held after 5:00 p.m. if
scheduled on a day other than Saturday. No initial hearing may
be held on a Sunday.
(d) At the initial hearing under this subdivision, the
percentage increase in property taxes proposed by the taxing
authority, if any, and the specific purposes for which property
tax revenues are being increased must be discussed. During the
discussion, the governing body shall hear comments regarding a
proposed increase and explain the reasons for the proposed
increase. The public shall be allowed to speak and to ask
questions. At the public hearing, the school district must also
provide and discuss information on the distribution of its
revenues by revenue source, and the distribution of its spending
by program area.
(e) If the initial hearing is not completed on its
scheduled date, the taxing authority must announce, prior to
adjournment of the hearing, the date, time, and place for the
continuation of the hearing. The continuation hearing must be
held at least five business days but no more than 14 business
days after the initial hearing. A continuation hearing may not
be held later than December 20 except as provided in paragraphs
(f) and (g). A continuation hearing must be held after 5:00
p.m. if scheduled on a day other than Saturday. No continuation
hearing may be held on a Sunday.
(f) The governing body of a county shall hold its initial
hearing on the first Thursday in December each year, and may
hold additional initial hearings on other dates before December
20 if necessary for the convenience of county residents. If the
county needs a continuation of its hearing, the continuation
hearing shall be held on the third Tuesday in December. If the
third Tuesday in December falls on December 21, the county's
continuation hearing shall be held on Monday, December 20.
(g) The metropolitan special taxing districts shall hold a
joint initial public hearing on the first Wednesday of
December. A continuation hearing, if necessary, shall be held
on the second Wednesday of December even if that second
Wednesday is after December 10.
(h) The county auditor shall provide for the coordination
of initial and continuation hearing dates for all school
districts and cities within the county to prevent conflicts
under clauses (i) and (j).
(i) By August 10, each school board and the board of the
regional library district shall certify to the county auditors
of the counties in which the school district or regional library
district is located the dates on which it elects to hold its
initial hearing and any continuation hearing. If a school board
or regional library district does not certify these dates by
August 10, the auditor will assign the initial and continuation
hearing dates. The dates elected or assigned must not conflict
with the initial and continuation hearing dates of the county or
the metropolitan special taxing districts.
(j) By August 20, the county auditor shall notify the
clerks of the cities within the county of the dates on which
school districts and regional library districts have elected to
hold their initial and continuation hearings. At the time a
city certifies its proposed levy under subdivision 1 it shall
certify the dates on which it elects to hold its initial hearing
and any continuation hearing. Until September 15, the first and
second Mondays of December are reserved for the use of the
cities. If a city does not certify its hearing dates by
September 15, the auditor shall assign the initial and
continuation hearing dates. The dates elected or assigned for
the initial hearing must not conflict with the initial hearing
dates of the county, metropolitan special taxing districts,
regional library districts, or school districts within which the
city is located. To the extent possible, the dates of the
city's continuation hearing should not conflict with the
continuation hearing dates of the county, metropolitan special
taxing districts, regional library districts, or school
districts within which the city is located. This paragraph does
not apply to cities of 500 population or less.
(k) The county initial hearing date and the city,
metropolitan special taxing district, regional library district,
and school district initial hearing dates must be designated on
the notices required under subdivision 3. The continuation
hearing dates need not be stated on the notices.
(l) At a subsequent hearing, each county, school district,
city over 500 population, and metropolitan special taxing
district may amend its proposed property tax levy and must adopt
a final property tax levy. Each county, city over 500
population, and metropolitan special taxing district may also
amend its proposed budget and must adopt a final budget at the
subsequent hearing. The final property tax levy must be adopted
prior to adopting the final budget. A school district is not
required to adopt its final budget at the subsequent hearing.
The subsequent hearing of a taxing authority must be held on a
date subsequent to the date of the taxing authority's initial
public hearing. If a continuation hearing is held, the
subsequent hearing must be held either immediately following the
continuation hearing or on a date subsequent to the continuation
hearing. The subsequent hearing may be held at a regularly
scheduled board or council meeting or at a special meeting
scheduled for the purposes of the subsequent hearing. The
subsequent hearing of a taxing authority does not have to be
coordinated by the county auditor to prevent a conflict with an
initial hearing, a continuation hearing, or a subsequent hearing
of any other taxing authority. All subsequent hearings must be
held prior to five working days after December 20 of the levy
year. The date, time, and place of the subsequent hearing must
be announced at the initial public hearing or at the
continuation hearing.
(m) The property tax levy certified under section 275.07 by
a city of any population, county, metropolitan special taxing
district, regional library district, or school district must not
exceed the proposed levy determined under subdivision 1, except
by an amount up to the sum of the following amounts:
(1) the amount of a school district levy whose voters
approved a referendum to increase taxes under section 123B.63,
subdivision 3, or 126C.17, subdivision 9, after the proposed
levy was certified;
(2) the amount of a city or county levy approved by the
voters after the proposed levy was certified;
(3) the amount of a levy to pay principal and interest on
bonds approved by the voters under section 475.58 after the
proposed levy was certified;
(4) the amount of a levy to pay costs due to a natural
disaster occurring after the proposed levy was certified, if
that amount is approved by the commissioner of revenue under
subdivision 6a;
(5) the amount of a levy to pay tort judgments against a
taxing authority that become final after the proposed levy was
certified, if the amount is approved by the commissioner of
revenue under subdivision 6a;
(6) the amount of an increase in levy limits certified to
the taxing authority by the commissioner of children, families,
and learning or the commissioner of revenue after the proposed
levy was certified; and
(7) the amount required under section 126C.55.
(n) This subdivision does not apply to towns and special
taxing districts other than regional library districts and
metropolitan special taxing districts.
(o) Notwithstanding the requirements of this section, the
employer is required to meet and negotiate over employee
compensation as provided for in chapter 179A.
[EFFECTIVE DATE.] This section is effective for hearings
required in 2001 for taxes payable in 2002 and thereafter.
Sec. 50. Minnesota Statutes 2000, 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;
(21) Middle Mississippi river watershed management
organization under sections 103B.211 and 103B.241; and
(22) emergency medical services special taxing districts
under section 144F.01;
(23) a county levying under the authority of section
103B.241, 103B.245, or 103B.251; and
(24) 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.] Clause (22) of this section is effective
for taxes levied in 2002, payable in 2003, through taxes levied
in 2007, payable in 2008. Clause (23) of this section is
effective for taxes levied in 2001, payable in 2002, and
thereafter.
Sec. 51. Minnesota Statutes 2000, section 275.07,
subdivision 1, is amended to read:
Subdivision 1. [CERTIFICATION OF LEVY.] (a) Except as
provided under paragraph (b), the taxes voted by cities,
counties, school districts, and special districts shall be
certified by the proper authorities to the county auditor on or
before five working days after December 20 in each year. A town
must certify the levy adopted by the town board to the county
auditor by September 15 each year. If the town board modifies
the levy at a special town meeting after September 15, the town
board must recertify its levy to the county auditor on or before
five working days after December 20. The taxes certified shall
not be reduced by the county auditor by the aid received under
section 273.1398, subdivision 2, but shall be reduced by the
county auditor by the aid received under section 273.1398,
subdivision 3. If a city, town, county, school district, or
special district fails to certify its levy by that date, its
levy shall be the amount levied by it for the preceding year.
(b)(i) The taxes voted by counties under sections 103B.241,
103B.245, and 103B.251 shall be separately certified by the
county to the county auditor on or before five working days
after December 20 in each year. The taxes certified shall not
be reduced by the county auditor by the aid received under
section 273.1398, subdivisions 2 and 3. If a county fails to
certify its levy by that date, its levy shall be the amount
levied by it for the preceding year.
(ii) For purposes of the proposed property tax notice under
section 275.065 and the property tax statement under section
276.04, for the first year in which the county implements the
provisions of this paragraph, the county auditor shall reduce
the county's levy for the preceding year to reflect any amount
levied for water management purposes under clause (i) included
in the county's levy.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2001, payable in 2002, and thereafter.
Sec. 52. Minnesota Statutes 2000, section 275.28,
subdivision 1, is amended to read:
Subdivision 1. [AUDITOR TO MAKE.] The county auditor shall
make out the tax lists according to the prescribed form, and to
correspond with the assessment districts. The rate percent
necessary to raise the required amount of the various taxes
shall be calculated on the net tax capacity of property as
determined by the state board of equalization, but, in
calculating such rates, no rate shall be used resulting in a
fraction other than a decimal fraction, or less than a gross
local tax rate of .01 percent or a net local tax rate of .01
percent; and, in extending any tax, whenever it amounts to the
fractional part of a cent, it shall be made one cent. The tax
lists shall also be made out to correspond with the assessment
books in reference to ownership and description of property,
with columns for the valuation and for the various items of tax
included in the total amount of all taxes set down opposite each
description. The auditor shall enter both the state tax
determined under sections 275.02 and 275.025, and the local
taxes determined under sections 275.08 and 275.083, on the tax
lists. The total ad valorem property tax for each description
of property before credits is the sum of the amounts of the
various local taxes that apply to the parcel plus the amount of
any applicable state tax. Opposite each description which has
been sold for taxes, and which is subject to redemption, but not
redeemed, shall be placed the words "sold for taxes." The
amount of all special taxes shall be entered in the proper
columns, but the general taxes may be shown by entering the rate
percent of each tax at the head of the proper columns, without
extending the same, in which case a schedule of the rates
percent of such taxes shall be made on the first page of each
tax list. If the auditor fails to enter on any such list before
its delivery to the treasurer any tax levied, the tax may be
subsequently entered. The tax lists shall be deemed completed,
and all taxes extended thereon, as of January 1 annually.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 53. Minnesota Statutes 2000, section 275.61, is
amended to read:
275.61 [VOTER APPROVED LEVY; MARKET VALUE.]
Subdivision 1. [MARKET VALUE.] For local governmental
subdivisions other than school districts, any levy, including
the issuance of debt obligations payable in whole or in part
from property taxes, required to be approved and approved by the
voters at a general or special election for taxes payable in
1993 and thereafter, shall be levied against the referendum
market value of all taxable property within the governmental
subdivision, as defined in section 126C.01, subdivision 3. Any
levy amount subject to the requirements of this section shall be
certified separately to the county auditor under section 275.07.
The ballot shall state the maximum amount of the increased
levy as a percentage of market value and the amount that will be
raised by the new referendum tax rate in the first year it is to
be levied.
Subd. 2. [CONVERSION TO NET TAX CAPACITY.] Any referendum
levy approved under subdivision 1 prior to January 1, 2001, may
be converted from a referendum market value basis to a net tax
capacity basis, provided that the proportion of the
jurisdiction's referendum market value exempted under article 2,
section 8, is at least ten percent for property taxes payable in
2001. A jurisdiction choosing to exercise the option to convert
the referendum tax to a net tax capacity basis must notify the
county auditor of its intent prior to October 1, 2001. A
decision to convert a referendum levy under this subdivision
shall be a permanent change affecting all future years. The
option to convert a levy under this subdivision shall cease
after October 1, 2001.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 54. Minnesota Statutes 2000, section 275.62,
subdivision 1, is amended to read:
Subdivision 1. [REPORT ON TAXES LEVIED.] The commissioner
of revenue shall establish procedures for the annual reporting
of local government levies. Each local governmental unit shall
submit a report to the commissioner by December 30 of the year
in which the tax is levied. The report shall include, but is
not limited to, information on the amount of the tax levied by
the governmental unit for the following purposes:
(1) debt, which includes taxes levied for the purposes
defined in Minnesota Statutes 1991 Supplement, section 275.50,
subdivision 5, clauses (b), (c), (d), and (e);
(2) social services and related programs, which include
taxes levied for the purposes defined in Minnesota Statutes 1991
Supplement, section 275.50, subdivision 5, clauses (a), (j), and
(v);
(3) libraries, which include taxes levied for the purposes
defined in Minnesota Statutes 1991 Supplement, section 275.50,
subdivision 5, clause (n);
(4) for counties only, the amount of levy needed to fund
increased county costs associated with the welfare reform under
Laws 1997, chapter 85, including increased administration and
program costs of the income maintenance programs and also
related support services as they relate directly to the welfare
reform (2) the amounts levied for each of the purposes listed in
section 275.70, subdivision 5; and
(5) (3) other levies, which include the taxes levied for
all purposes not included in clause (1), (2), or (3), or (4).
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 55. Minnesota Statutes 2000, section 276.04,
subdivision 2, is amended to read:
Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer
shall provide for the printing of the tax statements. The
commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The statement must contain a
tabulated statement of the dollar amount due to each taxing
authority and the amount of the state determined school tax from
the parcel of real property for which a particular tax statement
is prepared. The dollar amounts attributable to the county, the
state determined school tax, the voter approved school tax, the
other local school tax, the township or municipality, and the
total of the metropolitan special taxing districts as defined in
section 275.065, subdivision 3, paragraph (i), must be
separately stated. The amounts due all other special taxing
districts, if any, may be aggregated. The amount of the tax on
homesteads qualifying under the senior citizens' property tax
deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax
amount. The amount of the tax on contamination value imposed
under sections 270.91 to 270.98, if any, must also be separately
stated. The dollar amounts, including the dollar amount of any
special assessments, may be rounded to the nearest even whole
dollar. For purposes of this section whole odd-numbered dollars
may be adjusted to the next higher even-numbered dollar. The
amount of market value excluded under section 273.11,
subdivision 16, if any, must also be listed on the tax
statement. The statement shall include the following sentences,
printed in upper case letters in boldface print: "EVEN THOUGH
THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX
REVENUES, IT SETS THE AMOUNT OF THE STATE-DETERMINED SCHOOL TAX
LEVY. THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY
PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."
(b) The property tax statements for manufactured homes and
sectional structures taxed as personal property shall contain
the same information that is required on the tax statements for
real property.
(c) Real and personal property tax statements must contain
the following information in the order given in this paragraph.
The information must contain the current year tax information in
the right column with the corresponding information for the
previous year in a column on the left:
(1) the property's estimated market value under section
273.11, subdivision 1;
(2) the property's taxable market value after reductions
under section 273.11, subdivisions 1a and 16;
(3) the property's gross tax, calculated by adding the
property's total property tax to the sum of the aids enumerated
in clause (4);
(4) a total of the following aids:
(i) education aids payable under chapters 122A, 123A, 123B,
124D, 125A, 126C, and 127A;
(ii) local government aids for cities, towns, and counties
under chapter 477A;
(iii) disparity reduction aid under section 273.1398; and
(iv) homestead and agricultural credit aid under section
273.1398;
(5) for homestead residential and agricultural properties,
the education homestead credit credits under section 273.1382
273.1384;
(6) any credits received under sections 273.119; 273.123;
273.135; 273.1391; 273.1398, subdivision 4; 469.171; and
473H.10, except that the amount of credit received under section
273.135 must be separately stated and identified as "taconite
tax relief"; and
(7) the net tax payable in the manner required in paragraph
(a).
(d) If the county uses envelopes for mailing property tax
statements and if the county agrees, a taxing district may
include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget
deliberations for the current year, and encouraging taxpayers to
attend the hearings. If the county allows notices to be
included in the envelope containing the property tax statement,
and if more than one taxing district relative to a given
property decides to include a notice with the tax statement, the
county treasurer or auditor must coordinate the process and may
combine the information on a single announcement.
The commissioner of revenue shall certify to the county
auditor the actual or estimated aids enumerated in clause (4)
that local governments will receive in the following year. The
commissioner must certify this amount by January 1 of each year.
[EFFECTIVE DATE.] This section is effective July 1, 2001
and thereafter, for statements required in 2002 and thereafter.
Sec. 56. Minnesota Statutes 2000, section 276.11,
subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] As soon as practical after the
settlement day determined in section 276.09, the county
treasurer shall pay to the state treasurer or the treasurer of a
town, city, school district, or special district, on the warrant
of the county auditor, all receipts of taxes levied by the
taxing district and deliver up all orders and other evidences of
indebtedness of the taxing district, taking triplicate receipts
for them. The treasurer shall file one of the receipts with the
county auditor, and shall return one by mail on the day of its
receipt to the clerk of the town, city, school district, or
special district to which payment was made. The clerk shall
keep the receipt in the clerk's office. Upon written request of
the taxing district, to the extent practicable, the county
treasurer shall make partial payments of amounts collected
periodically in advance of the next settlement and
distribution. A statement prepared by the county treasurer must
accompany each payment. It must state the years for which taxes
included in the payment were collected and, for each year, the
amount of the taxes and any penalties on the tax. Upon written
request of a taxing district, except school districts, the
county treasurer shall pay at least 70 percent of the estimated
collection within 30 days after the settlement date determined
in section 276.09. Within seven business days after the due
date, or 28 calendar days after the postmark date on the
envelopes containing real or personal property tax statements,
whichever is latest, the county treasurer shall pay to the
treasurer of the school districts 50 percent of the estimated
collections arising from taxes levied by and belonging to the
school district, unless the school district elects to receive 50
percent of the estimated collections arising from taxes levied
by and belonging to the school district after making a
proportionate reduction to reflect any loss in collections as
the result of any delay in mailing tax statements. In that
case, 50 percent of those adjusted, estimated collections shall
be paid by the county treasurer to the treasurer of the school
district within seven business days of the due date. The
remaining 50 percent of the estimated collections must be paid
to the treasurer of the school district within the next seven
business days of the later of the dates in the preceding
sentence, unless the school district elects to receive the
remainder of its estimated collections after a proportionate
reduction has been made to reflect any loss in collections as
the result of any delay in mailing tax statements. In that
case, the remaining 50 percent of those adjusted, estimated
collections shall be paid by the county treasurer to the
treasurer of the school district within 14 days of the due
date. The treasurer shall pay the balance of the amounts
collected to the state before June 30, or to a municipal
corporation or other body within 60 days after the settlement
date determined in section 276.09. After 45 days interest at an
annual rate of eight percent accrues and must be paid to the
taxing district. Interest must be paid upon appropriation from
the general revenue fund of the county. If not paid, it may be
recovered by the taxing district, in a civil action.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and subsequent years.
Sec. 57. Minnesota Statutes 2000, section 276A.06,
subdivision 3, is amended to read:
Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall
apportion the levy of each governmental unit in the county in
the manner prescribed by this subdivision. The auditor shall:
(a) by August 20 of 1997 and each subsequent year,
determine the areawide portion of the levy for each governmental
unit by multiplying the local tax rate of the governmental unit
for the preceding levy year times the distribution value set
forth in subdivision 2, clause (b); and
(b) by September 5 of 1997 and each subsequent year,
determine the local portion of the current year's levy by
subtracting the resulting amount from clause (a) from the
governmental unit's current year's levy; and
(c) for determinations made under paragraph (a) in the case
of school districts, for taxes payable in 2002, exclude the
general education tax rate and the portion of the referendum tax
rate attributable to the first $415 per pupil unit from the
local tax rate for the preceding levy year.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 58. Minnesota Statutes 2000, section 281.17, is
amended to read:
281.17 [PERIOD FOR REDEMPTION.]
Except for properties for which the period of redemption
has been limited under sections 281.173 and 281.174, the
following periods for redemption apply.
The period of redemption for all lands sold to the state at
a tax judgment sale shall be three years from the date of sale
to the state of Minnesota if the land is within an incorporated
area unless it is: (a) nonagricultural homesteaded land as
defined in section 273.13, subdivision 22; (b) homesteaded
agricultural land as defined in section 273.13, subdivision 23,
paragraph (a); or (c) seasonal recreational land as defined in
section 273.13, subdivision 22, paragraph (c), or 25, paragraph
(c) (d), clause (5) (1), for which the period of redemption is
five years from the date of sale to the state of Minnesota.
The period of redemption for homesteaded lands as defined
in section 273.13, subdivision 22, located in a targeted
neighborhood as defined in Laws 1987, chapter 386, article 6,
section 4, and sold to the state at a tax judgment sale is three
years from the date of sale. The period of redemption for all
lands located in a targeted neighborhood as defined in Laws
1987, chapter 386, article 6, section 4, except (1) homesteaded
lands as defined in section 273.13, subdivision 22, and (2) for
periods of redemption beginning after June 30, 1991, but before
July 1, 1996, lands located in the Loring Park targeted
neighborhood on which a notice of lis pendens has been served,
and sold to the state at a tax judgment sale is one year from
the date of sale.
The period of redemption for all real property constituting
a mixed municipal solid waste disposal facility that is a
qualified facility under section 115B.39, subdivision 1, is one
year from the date of the sale to the state of Minnesota.
The period of redemption for all other lands sold to the
state at a tax judgment sale shall be five years from the date
of sale, except that the period of redemption for nonhomesteaded
agricultural land as defined in section 273.13, subdivision 23,
paragraph (b), shall be two years from the date of sale if at
that time that property is owned by a person who owns one or
more parcels of property on which taxes are delinquent, and the
delinquent taxes are more than 25 percent of the prior year's
school district levy.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 59. Minnesota Statutes 2000, section 282.01,
subdivision 1, is amended to read:
Subdivision 1. [CLASSIFICATION AS CONSERVATION OR
NONCONSERVATION.] It is the general policy of this state to
encourage the best use of tax-forfeited lands, recognizing that
some lands in public ownership should be retained and managed
for public benefits while other lands should be returned to
private ownership. Parcels of land becoming the property of the
state in trust under law declaring the forfeiture of lands to
the state for taxes must be classified by the county board of
the county in which the parcels lie as conservation or
nonconservation. In making the classification the board shall
consider the present use of adjacent lands, the productivity of
the soil, the character of forest or other growth, accessibility
of lands to established roads, schools, and other public
services, their peculiar suitability or desirability for
particular uses and the suitability of the forest resources on
the land for multiple use, sustained yield management. The
classification, furthermore, must encourage and foster a mode of
land utilization that will facilitate the economical and
adequate provision of transportation, roads, water supply,
drainage, sanitation, education, and recreation; facilitate
reduction of governmental expenditures; conserve and develop the
natural resources; and foster and develop agriculture and other
industries in the districts and places best suited to them.
In making the classification the county board may use
information made available by any office or department of the
federal, state, or local governments, or by any other person or
agency possessing pertinent information at the time the
classification is made. The lands may be reclassified from time
to time as the county board considers necessary or desirable,
except for conservation lands held by the state free from any
trust in favor of any taxing district.
If the lands are located within the boundaries of an
organized town, with taxable valuation in excess of $20,000, or
incorporated municipality, the classification or
reclassification and sale must first be approved by the town
board of the town or the governing body of the municipality in
which the lands are located. The town board of the town or the
governing body of the municipality is considered to have
approved the classification or reclassification and sale if the
county board is not notified of the disapproval of the
classification or reclassification and sale within 60 days of
the date the request for approval was transmitted to the town
board of the town or governing body of the municipality. If the
town board or governing body desires to acquire any parcel lying
in the town or municipality by procedures authorized in this
section, it must file a written application with the county
board to withhold the parcel from public sale. The application
must be filed within 60 days of the request for classification
or reclassification and sale. The county board shall then
withhold the parcel from public sale for six months. A
municipality or governmental subdivision shall pay maintenance
costs incurred by the county during the six-month period while
the property is withheld from public sale, provided the property
is not offered for public sale after the six-month period. A
clerical error made by county officials does not serve to
eliminate the request of the town board or governing body if the
board or governing body has forwarded the application to the
county auditor. If the town board or governing body of the
municipality fails to submit an application and a resolution of
the board or governing body to acquire the property within the
withholding period, the county may offer the property for sale
upon the expiration of the withholding period.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 60. Minnesota Statutes 2000, section 282.01,
subdivision 1b, is amended to read:
Subd. 1b. [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a)
Notwithstanding subdivision 1a, in the case of tax-forfeited
lands located in a targeted neighborhood, as defined in section
469.201, subdivision 10, outside the metropolitan area, as
defined in and section 473.121, subdivision 2, the commissioner
of revenue may shall convey by deed in the name of the state any
tract of tax-forfeited land held in trust in favor of the taxing
districts, to a political subdivision that submits an
application to the commissioner of revenue and the
recommendation of the county board.
(b) Notwithstanding subdivision 1a, in the case of
tax-forfeited lands located in a targeted neighborhood, as
defined in section 469.201, subdivision 10, in a county in the
metropolitan area, as defined in section 473.121, subdivision 2,
the commissioner of revenue shall convey by deed in the name of
the state any tract of tax-forfeited land held in trust in favor
of the taxing districts, to a political subdivision that submits
an application to the commissioner of revenue and the county
board.
(c) The application under paragraph (a) or (b) must include
a statement of facts as to the use to be made of the tract, the
need therefor, and a resolution, adopted by the governing body
of the political subdivision, finding that the conveyance of a
tract of tax-forfeited land to the political subdivision is
necessary to provide for the redevelopment of land as productive
taxable property. Deeds of conveyance issued under paragraph
(a) are not conditioned on continued use of the property for the
use stated in the application.
[EFFECTIVE DATE.] This section is effective for deeds
issued on or after August 1, 2001.
Sec. 61. Minnesota Statutes 2000, section 282.01,
subdivision 1c, is amended to read:
Subd. 1c. [DEED OF CONVEYANCE; FORM; APPROVALS.] The deed
of conveyance for property conveyed for a public use must be on
a form approved by the attorney general and must be conditioned
on continued use for the purpose stated in the application. If,
however, the governing body of the governmental subdivision by
resolution determines that some other public use should be made
of the lands, and the change of use is approved by the county
board and an application for change of use is made to, and
approved by, the commissioner, the changed use may be made
without conveying the lands back to the state and securing a new
conveyance for the new public use.
[EFFECTIVE DATE.] This section is effective for deeds
issued on or after August 1, 2001.
Sec. 62. Minnesota Statutes 2000, section 282.01,
subdivision 1d, is amended to read:
Subd. 1d. [REVERTER FOR FAILURE TO USE; CONVEYANCE TO
STATE.] When If after three years from the date of the
conveyance a governmental subdivision to which tax-forfeited
land has been conveyed for a specified public use as provided in
this section fails to put the land to that use, or to some other
authorized public use as provided in this section, or abandons
that use, the governing body of the subdivision shall may, with
the approval of the county board, purchase the property for an
authorized public purpose at the present appraised value as
determined by the county board. In that case, the commissioner
of revenue shall, upon proper written application approved by
the county board, issue an appropriate deed to the subdivisions
free of a use restriction and reverter. The governing body may
also authorize the proper officers to convey the land, or the
part of the land not required for an authorized public use, to
the state of Minnesota. The officers shall execute a deed of
conveyance immediately. The conveyance is subject to the
approval of the commissioner and its form must be approved by
the attorney general. A sale, lease, transfer, or other
conveyance of tax-forfeited lands by a housing and redevelopment
authority, a port authority, an economic development authority,
or a city as authorized by chapter 469 is not an abandonment of
use and the lands shall not be reconveyed to the state nor shall
they revert to the state. A certificate made by a housing and
redevelopment authority, a port authority, an economic
development authority, or a city referring to a conveyance by it
and stating that the conveyance has been made as authorized by
chapter 469 may be filed with the county recorder or registrar
of titles, and the rights of reverter in favor of the state
provided by subdivision 1e will then terminate. No vote of the
people is required for the conveyance.
[EFFECTIVE DATE.] This section is effective August 1, 2001.
For deeds existing on the effective date, the three-year
limitation begins on August 1, 2001, except no deed issued prior
to August 1, 2001, shall have a limitation of less than five
years.
Sec. 63. Minnesota Statutes 2000, section 282.01,
subdivision 1e, is amended to read:
Subd. 1e. [NOTICE AND DECLARATION OF REVERSION.] If the
tax-forfeited land is not either purchased or conveyed to the
state in accordance with subdivision 1d, the commissioner of
revenue shall by written instrument, in form approved by the
attorney general, declare the land to have reverted to the
state, and shall serve a notice of reversion, with a copy of the
declaration, by certified mail upon the clerk or recorder of the
governmental subdivision concerned. No declaration of reversion
under this subdivision shall be made earlier than five years
from the date of conveyance for failure to put land to the use
specified or from the date of abandonment of that use if the
lands have been put to that use 60 days after the expiration of
the three-year period described in subdivision 1d. The
commissioner shall file the original declaration in the
commissioner's office, with verified proof of service. The
governmental subdivision may appeal to the district court of the
county in which the land lies by filing with the court
administrator a notice of appeal, specifying the grounds of
appeal and the description of the land involved, mailing a copy
of the notice of appeal by certified mail to the commissioner of
revenue, and filing a copy for record with the county recorder
or registrar of titles, all within 30 days after the mailing of
the notice of reversion. The appeal shall be tried by the court
in like manner as a civil action. If no appeal is taken as
provided in this subdivision, the declaration of reversion is
final. The commissioner of revenue shall file for record with
the county recorder or registrar of titles, of the county within
which the land lies, a certified copy of the declaration of
reversion and proof of service.
[EFFECTIVE DATE.] This section is effective for deeds
issued on or after August 1, 2001.
Sec. 64. Minnesota Statutes 2000, section 282.241, is
amended to read:
282.241 [REPURCHASE AFTER FORFEITURE.]
Subdivision 1. [REPURCHASE REQUIREMENTS.] The owner at the
time of forfeiture, or the owner's heirs, devisees, or
representatives, or any person to whom the right to pay taxes
was given by statute, mortgage, or other agreement, may
repurchase any parcel of land claimed by the state to be
forfeited to the state for taxes unless before the time
repurchase is made the parcel is sold under installment
payments, or otherwise, by the state as provided by law, or is
under mineral prospecting permit or lease, or proceedings have
been commenced by the state or any of its political subdivisions
or by the United States to condemn the parcel of land. The
parcel of land may be repurchased for the sum of all delinquent
taxes and assessments computed under section 282.251, together
with penalties, interest, and costs, that accrued or would have
accrued if the parcel of land had not forfeited to the state.
Except for property which was homesteaded on the date of
forfeiture, repurchase is permitted during one year only from
the date of forfeiture, and in any case only after the adoption
of a resolution by the board of county commissioners determining
that by repurchase undue hardship or injustice resulting from
the forfeiture will be corrected, or that permitting the
repurchase will promote the use of the lands that will best
serve the public interest. If the county board has good cause
to believe that a repurchase installment payment plan for a
particular parcel is unnecessary and not in the public interest,
the county board may require as a condition of repurchase that
the entire repurchase price be paid at the time of repurchase.
A repurchase is subject to any easement, lease, or other
encumbrance granted by the state before the repurchase, and if
the land is located within a restricted area established by any
county under Laws 1939, chapter 340, the repurchase must not be
permitted unless the resolution approving the repurchase is
adopted by the unanimous vote of the board of county
commissioners.
The person seeking to repurchase under this section shall
pay all maintenance costs incurred by the county auditor during
the time the property was tax-forfeited.
Subd. 2. [ALTERNATIVE COMPUTATION OF REPURCHASE AMOUNT.] A
county board may by resolution establish an alternative method
of computing the repurchase amount under this subdivision for
property homesteaded at the time of forfeiture that has been in
forfeited status for more than ten years. Equivalent taxes,
penalties, interest, and costs for each year the property was in
forfeiture status must be computed using the simple average of
the assessor's estimated market value at forfeiture and the
assessor's current estimated market value multiplied by the
class rates under current law and applying the current tax,
penalty, and interest rates. Those amounts, plus any unpaid
special assessments reinstated and included in the purchase
price under section 282.251, including the penalties and
interest that accrued or would have accrued on the special
assessments, computed under current rates, are the repurchase
price. The county assessor shall determine the current market
value and classification of the property.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 65. Minnesota Statutes 2000, section 297B.09,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL FUND SHARE.] Money collected and
received under this chapter must be deposited as provided in
this subdivision.
Thirty-two percent of the money collected and received must
be deposited in the highway user tax distribution fund, and 20.5
percent must be deposited in the metropolitan area transit fund
under section 16A.88, and 1.25 percent must be deposited in the
greater Minnesota transit fund under section 16A.88. In fiscal
year 2004 and thereafter, two percent of the money collected and
received must be deposited in the metropolitan area transit
appropriation account under section 16A.88. The remaining 68
percent of the money must be deposited in the general fund.
[EFFECTIVE DATE.] This section is effective July 1, 2002.
Sec. 66. [383A.76] [TAX-FORFEITED LANDS.]
Subdivision 1. [SALE; VALUATION.] The Ramsey county board
may sell tax-forfeited lands in the county to an organized or
incorporated governmental subdivision of the state for any
public purpose for which the subdivision is authorized to
acquire property. In the case of tax-forfeited land in the
county which a governmental subdivision has requested for
housing purposes, the county board may sell that property to the
requesting subdivision for the specified housing use at a value,
which may be less than its appraised value, as determined by the
county board. Factors that may be considered by the county
board in determining value for lands to be held for a permitted
public purpose or redeveloped under chapter 469 include the
projected gap financing and public subsidy needed for a
redevelopment project, expected increases in property taxes,
before and after redevelopment appraised values, the potential
use of the property for affordable housing, environmental
contamination and pollution, site preparation and infrastructure
costs, and any other relevant factors. The commissioner of
revenue shall convey by deed in the name of the state a tract of
tax-forfeited land held in trust in favor of the taxing
districts to a governmental subdivision for an authorized public
use, if an application is submitted to the commissioner. The
application must include a statement of facts as to the use to
be made of the tract, the need for it, and the recommendation of
the county board. Property conveyed under this section for a
value that is less than its appraised value cannot be included
in a tax increment financing district. To the extent the
provisions of chapter 282 are not inconsistent with this
section, the provisions of chapter 282 apply to the sale of tax
forfeited land in Ramsey county.
Subd. 2. [USE OF LAND.] For lands located within Ramsey
county, the deed of conveyance of tax-forfeited land to an
organized or incorporated governmental subdivision of the state
for an authorized use must be on a form approved by the attorney
general and must be conditioned on continued use for the purpose
stated in the application. If the governing body of the
governmental subdivision determines by resolution after public
hearing that some other public use should be made of the lands,
the changed use may be made upon filing with the county recorder
or registrar of titles a certified copy of the resolution and
without conveying the lands back to the state and securing a new
conveyance for the new public use. Permitted public uses under
this section include street, storm water ponding, drainage,
parks, watershed, wetlands, library, fire and police stations,
utility easements, and public facilities.
Subd. 3. [REVERTER OF LAND.] When a subdivision to which
tax-forfeited land has been conveyed for a housing purpose at a
value of less than the appraised value, fails to pass a
resolution designating a developer or approving a redevelopment
contract within three years of the date of conveyance, the
Ramsey county board may by resolution declare the land to have
reverted to the state, and shall serve a notice of reversion,
with a copy of the declaration, by certified mail to the
subdivision and shall reimburse the subdivision for the
consideration for the lands from the tax-forfeited sale fund.
The Ramsey county board shall file for record with the Ramsey
county recorder or registrar of titles a certified copy of the
declaration of reversion and proof of service. A certificate
made by a subdivision referring to a conveyance made to it and
stating that it has passed a resolution designating a developer
or approving a redevelopment contract for a housing
redevelopment project may be filed with the Ramsey county
recorder or registrar of titles, and the right of reverter in
favor of the state under this section will then terminate.
Subd. 4. [REPORT BY SUBDIVISION.] Each subdivision to
which tax-forfeited lands have been conveyed under this section
for a value of less than its appraised value must file a report
with the commissioner of revenue by September 1, 2004, and by
September 1 of each third year thereafter. The report shall
contain a description of the lands conveyed to it, a status of
the development efforts for the lands, the intended or actual
uses being made of the lands, and the amount of property taxes
being paid on the lands. The commissioner shall retain each
report for a minimum of ten years. Failure of a subdivision to
file a report shall be cause for the commissioner to declare a
reversion of the parcel under section 282.01, subdivision 1e.
[EFFECTIVE DATE.] This section is effective only after its
approval by a majority of the governing body of Ramsey county
and upon compliance with the provisions of Minnesota Statutes,
section 645.021, subdivision 3.
Sec. 67. Minnesota Statutes 2000, section 469.040,
subdivision 5, is amended to read:
Subd. 5. [DESIGNATED HOUSING CORPORATION.] (a) To the
extent not exempt from taxation under section 272.01,
subdivision 1, property located within the exterior boundaries
of the White Earth an Indian reservation in the state 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.
(b) Property exempt from taxation under paragraph (a) 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 taxes
levied in 2001, payable in 2002, and thereafter.
Sec. 68. Minnesota Statutes 2000, section 469.202,
subdivision 2, is amended to read:
Subd. 2. [ELIGIBILITY REQUIREMENTS FOR TARGETED
NEIGHBORHOODS.] An area within a city is eligible for
designation as a targeted neighborhood if the area meets two of
the following three criteria:
(a) The area had an unemployment rate that was twice the
unemployment rate for the Minneapolis and Saint Paul standard
metropolitan statistical area as determined by the 1980 most
recent federal decennial census.
(b) The median household income in the area was no more
than half the median household income for the Minneapolis and
Saint Paul standard metropolitan statistical area as determined
by the 1980 most recent federal decennial census.
(c) The area is characterized by residential dwelling units
in need of substantial rehabilitation. An area qualifies under
this paragraph if 25 percent or more of the residential dwelling
units are in substandard condition as determined by the city, or
if 70 percent or more of the residential dwelling units in the
area were built before 1940 as determined by the 1980 most
recent federal decennial census.
[EFFECTIVE DATE.] This section is effective upon the
availability of the federal 2000 census data required to
determine eligibility requirements under this section.
Sec. 69. Minnesota Statutes 2000, section 469.303, is
amended to read:
469.303 [ELIGIBILITY REQUIREMENTS.]
An area within the city is eligible for designation as an
enterprise zone if the area (1) includes census tracts eligible
for a federal empowerment zone or enterprise community as
defined by the United States Department of Housing and Urban
Development under Public Law Number 103-66, notwithstanding the
maximum zone population standard under the federal empowerment
zone program for cities with a population under 500,000, (2) is
an area within a city of the second class that is designated as
an economically depressed area by the United States Department
of Commerce, or (3) includes property located in St. Paul in a
transit zone as defined in Minnesota Statutes 2000, section
473.3915, subdivision 3.
Sec. 70. Minnesota Statutes 2000, section 473.388,
subdivision 4, is amended to read:
Subd. 4. [FINANCIAL ASSISTANCE.] The council may must
grant the requested financial assistance if it determines that
the proposed service is intended to replace the service to the
applying city or town or combination thereof by the council and
that the proposed service will meet the needs of the applicant
at least as efficiently and effectively as the existing service.
The amount of assistance which the council may must provide
to a system under this section may not exceed the sum of be less
than the sum of the amounts determined for each municipality
comprising the system as follows:
(a) the portion of the available local transit funds which
the applicant proposes to use to subsidize the proposed service;
and transit operating assistance grants received under this
subdivision by the municipality in calendar year 2001 or the tax
revenues for transit services levied by the municipality for
taxes payable in 2001, including that portion of the levy
derived from the areawide pool under section 473F.08,
subdivision 3, clause (a), plus the portion of the
municipality's aid under section 273.1398, subdivision 2,
attributable to the transit levy; times
(b) an amount of financial assistance bearing an identical
proportional relationship to the amount under clause (a) as the
total amount of funds used by the council to fund its transit
operations bears to the total amount of taxes collected by the
council under section 473.446. the ratio of (i) the
appropriation from the transit fund to the council for nondebt
transit operations for the current fiscal year to (ii) the total
levy certified by the council under section 473.446 and the
opt-out municipalities under this section for taxes payable in
2001, including the portion of homestead and agricultural credit
aid under section 273.1398, subdivision 2, attributable to
nondebt transit levies, times
(c) the ratio of (i) the municipality's total taxable
market value for taxes payable in the most recent year for which
data is available divided by the municipality's total taxable
market value for taxes payable in 2001, to (ii) the total
taxable market value of all property in the metropolitan area
for taxes payable in the most recent year for which data is
available divided by the total taxable market value of all
property in the metropolitan area for taxes payable in 2001.
The council shall pay the amount to be provided to the recipient
from the funds the council would otherwise use to fund its
transit operations.
For purposes of this section, "available local transit
funds" means 90 percent of the tax revenues which would accrue
to the council from the tax it levies under section 473.446 in
the applicant city or town or combination thereof.
For purposes of this section, "tax revenues" in the city or
town means the sum of the following:
(1) the nondebt spread levy, which is the total of the
taxes extended by application of the local tax rate for nondebt
purposes on the taxable net tax capacity;
(2) the portion of the fiscal disparity distribution levy
under section 473F.08, subdivision 3, attributable to nondebt
purposes; and
(3) the portion of the homestead credit and agricultural
credit aid and disparity reduction aid amounts under section
273.1398, subdivisions 2 and 3, attributable to nondebt purposes.
Tax revenues do not include the state feathering
reimbursement under section 473.446.
[EFFECTIVE DATE.] This section is effective for calendar
year 2002 and subsequent years.
Sec. 71. Minnesota Statutes 2000, section 473.388,
subdivision 7, is amended to read:
Subd. 7. [LOCAL LEVY OPTION.] (a) A statutory or home rule
charter city or town that is eligible for assistance under this
section, in lieu of receiving the assistance, may levy a tax for
payment of the operating and capital expenditures for transit
and other related activities and to provide for payment of
obligations issued by the municipality for such purposes,
provided that the tax must be sufficient to maintain the level
of transit service provided in the municipality in the previous
year capital expenditures for transit and other related
activities, provided that property taxes were pledged to satisfy
the obligations, and provided that legislative appropriations
are insufficient to satisfy the obligations.
(b) The transit tax revenues derived by the municipality
may not exceed:
(1) for the first transit levy year and any subsequent
transit levy year immediately following a year in which the
municipality declines to make the levy, the maximum available
local transit funds for the municipality for taxes payable in
the current year under section 473.446, calculated as if the
percentage of transit tax revenues for the municipality were 88
percent instead of 90 percent, and multiplied by the
municipality's market value adjustment ratio; and
(2) for taxes levied in any year that immediately follows a
year in which the municipality elects to levy under this
subdivision, the maximum transit tax that the municipality may
have levied in the previous year under this subdivision,
multiplied by the municipality's market value adjustment ratio.
The commissioner of revenue shall certify the
municipality's levy limitation under this subdivision to the
municipality by June 1 of the levy year. The tax must be
accumulated and kept in a separate fund to be known as the
"replacement transit fund."
(c) To enable the municipality to receive revenues
described in clauses (2) and (3) of the definition of "tax
revenues" in subdivision 4, that would otherwise be lost if the
municipality's transit tax levy was not treated as a successor
levy to that made by the council under section 473.446:
(1) in the first transit levy year and any subsequent
transit levy year immediately following a year in which the
municipality declined to make the levy, 88 percent of the
council's nondebt spread levy for the current taxes payable year
shall be treated as levied by the municipality, and not the
council, for purposes of section 473F.08, subdivision 3, for the
purpose of determining its local tax rate for the preceding
year; and
(2) 88 percent of the revenues described in clause (3) of
the definition of "tax revenues" in subdivision 4, payable in
the first transit levy year, or payable in any subsequent
transit levy year following a year in which a municipality
declined to make the levy, shall be permanently transferred from
the council to the municipality. If a municipality levies a tax
under this subdivision in one year, but declines to levy in a
subsequent year, the aid transferred under this clause shall be
transferred back to the council.
(d) Any transit taxes levied under this subdivision are not
subject to, or counted towards, any limit hereafter imposed by
law on the levy of taxes upon taxable property within any
municipality unless the law specifically includes the transit
tax.
(e) This subdivision is consistent with the transit
redesign plan. Eligible municipalities opting to levy the
transit tax operate under this subdivision shall continue to
meet the regional performance standards established by the
council.
(f) (c) Within the designated Americans with Disabilities
Act area, metro mobility remains the obligation of the state.
(g) For purposes of this subdivision, "transit levy year"
is any year in which the municipality elects to levy under this
subdivision.
(h) A municipality may not levy taxes under this
subdivision in any year unless it notifies the council and the
commissioner of revenue of its intent to levy before July 1 of
the levy year. The notification must include the amount of the
municipality's proposed transit tax for the current levy year.
After June 30 in the levy year, a municipality's decision to
levy or not levy taxes under this subdivision is irrevocable for
that levy year.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and subsequent years.
Sec. 72. Minnesota Statutes 2000, section 473.446,
subdivision 1, is amended to read:
Subdivision 1. [WITHIN TRANSIT TAXING DISTRICT
METROPOLITAN AREA TRANSIT TAX.] For the purposes of sections
473.405 to 473.449 and the metropolitan transit system, except
as otherwise provided in this subdivision and subdivision 1b,
the council shall levy each year upon all taxable property
within the metropolitan transit taxing district area, defined in
section 473.121, subdivision 2, a transit tax consisting of:
(a) an amount which shall be used for payment of the
expenses of operating transit and paratransit service and to
provide for payment of obligations issued by the council under
section 473.436, subdivision 6;
(b) an additional amount, if any, the council determines to
be necessary to provide for the full and timely payment of its
certificates of indebtedness and other obligations outstanding
on July 1, 1985, to which property taxes under this section have
been pledged; and
(c) an additional amount necessary to provide full and
timely payment of certificates of indebtedness, bonds, including
refunding bonds or other obligations issued or to be issued
under section 473.39 by the council for purposes of acquisition
and betterment of property and other improvements of a capital
nature and to which the council has specifically pledged tax
levies under this clause.; and
The property tax levied by the council for general purposes
under paragraph (a) must not exceed the following amount for the
years specified:
(1) for taxes payable in 1995, the council's property tax
levy limitation for general transit purposes is equal to the
former regional transit board's property tax levy limitation for
general transit purposes under this subdivision, for taxes
payable in 1994, multiplied by an index for market valuation
changes equal to the total market valuation of all taxable
property located within the metropolitan transit taxing district
for the current taxes payable year divided by the total market
valuation of all taxable property located within the
metropolitan transit taxing district for the previous taxes
payable year; and
(2) for taxes payable in 1996 and subsequent years, the
product of (i) the council's property tax levy limitation for
general transit purposes for the previous year determined under
this subdivision before reduction by the amount levied by any
municipality in the previous year under section 473.388,
subdivision 7, multiplied by (ii) an index for market valuation
changes equal to the total market valuation of all taxable
property located within the metropolitan transit taxing district
for the current taxes payable year divided by the total market
valuation of all taxable property located within the
metropolitan transit taxing district for the previous taxes
payable year, minus the amount levied by any municipality in the
current levy year under section 473.388, subdivision 7.
The portion of the property tax levy for transit district
operating purposes attributable to a municipality that has
exercised a local levy option under section 473.388, subdivision
7, is the amount as determined under subdivision 1b. The
portion of the property tax levy for transit district operating
purposes attributable to the remaining municipalities within the
transit district is found by subtracting the portions
attributable to the municipalities that have exercised a local
levy option under section 473.388, subdivision 7.
For the taxes payable year 1995, the index for market
valuation changes shall be multiplied by an amount equal to the
sum of the regional transit board's property tax levy limitation
for the taxes payable year 1994 and $160,665. The $160,665
increase shall be a permanent adjustment to the levy limit base
used in determining the regional transit board's property tax
levy limitation for general purposes for subsequent taxes
payable years.
For the purpose of determining the council's property tax
levy limitation for general transit purposes under this
subdivision, "total market valuation" means the total market
valuation of all taxable property within the metropolitan
transit taxing district without valuation adjustments for fiscal
disparities (chapter 473F), tax increment financing (sections
469.174 to 469.179), and high voltage transmission lines
(section 273.425).
The county auditor shall reduce the tax levied pursuant to
this section and section 473.388 on all property within
statutory and home rule charter cities and towns that receive
full-peak service and limited off-peak service by an amount
equal to the tax levy that would be produced by applying a rate
of 0.510 percent of net tax capacity on the property. The
county auditor shall reduce the tax levied pursuant to this
section and section 473.388 on all property within statutory and
home rule charter cities and towns that receive limited peak
service by an amount equal to the tax levy that would be
produced by applying a rate of 0.765 percent of net tax capacity
on the property. The amounts so computed by the county auditor
shall be submitted to the commissioner of revenue as part of the
abstracts of tax lists required to be filed with the
commissioner under section 275.29. Any prior year adjustments
shall also be certified in the abstracts of tax lists. The
commissioner shall review the certifications to determine their
accuracy and may make changes in the certification as necessary
or return a certification to the county auditor for
corrections. The commissioner shall pay to the council and to
the municipalities levying under section 473.388, subdivision 7,
the amounts certified by the county auditors on the dates
provided in section 273.1398, apportioned between the council
and the municipality in the same proportion as the total transit
levy is apportioned within the municipality. There is annually
appropriated from the general fund in the state treasury to the
department of revenue the amounts necessary to make these
payments.
For the purposes of this subdivision, "full-peak and
limited off-peak service" means peak period regular route
service, plus weekday midday regular route service at intervals
longer than 60 minutes on the route with the greatest frequency;
and "limited peak period service" means peak period regular
route service only.
For the purposes of property taxes payable in the following
year, the council shall annually determine which cities and
towns qualify for the 0.510 percent or 0.765 percent tax
capacity rate reduction and shall certify this list to the
county auditor of the county wherein such cities and towns are
located on or before September 15. No changes may be made to
the annual list after September 15.
(b) an additional amount necessary to provide full and
timely payment of certificates of indebtedness issued by the
council, after consultation with the commissioner of finance, if
revenues to the metropolitan area transit fund in the fiscal
year in which the indebtedness is issued increase over those
revenues in the previous fiscal year by a percentage less than
the percentage increase for the same period in the revised
consumer price index for all urban consumers for the St.
Paul-Minneapolis metropolitan area prepared by the United States
Department of Labor.
Indebtedness to which property taxes have been pledged
under paragraph (b) that is incurred in any fiscal year may not
exceed the amount necessary to make up the difference between
(1) the amount that the council received or expects to receive
in that fiscal year from the metropolitan area transit fund and
(2) the amount the council received from that fund in the
previous fiscal year multiplied by the percentage increase for
the same period in the revised consumer price index for all
urban consumers for the St. Paul-Minneapolis metropolitan area
prepared by the United States Department of Labor.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and subsequent years.
Sec. 73. Minnesota Statutes 2000, section 473F.08,
subdivision 3, is amended to read:
Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall
apportion the levy of each governmental unit in the auditor's
county in the manner prescribed by this subdivision. The
auditor shall:
(a) by August 20, determine the areawide portion of the
levy for each governmental unit by multiplying the local tax
rate of the governmental unit for the preceding levy year times
the distribution value set forth in subdivision 2, clause (b);
and
(b) by September 5, determine the local portion of the
current year's levy by subtracting the resulting amount from
clause (a) from the governmental unit's current year's levy.;
(c) for determinations made under clause (a) in the case of
school districts, for taxes payable in 2002, exclude the general
education tax rate and the portion of the referendum tax rate
attributable to the first $415 per pupil unit from the local tax
rate for the preceding levy year;
(d) for determinations made under clause (a) in the case of
the metropolitan council, for taxes payable in 2002, exclude the
transit operating tax rate from the local tax rate for the
preceding levy year; and
(e) for determinations made under clause (a) in the case of
transit opt-out cities, for taxes payable in 2002, exclude the
opt-out transit rate from the local tax rate for the preceding
levy year.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 74. Minnesota Statutes 2000, section 477A.011,
subdivision 35, is amended to read:
Subd. 35. [TAX EFFORT RATE.] "Tax effort rate" means the
sum of (1) the net levy for all cities plus (2) for aid payable
in 2002 only, the total aid payments to all cities under section
273.1398 in the previous year; divided by the sum of the city
net tax capacity for all cities. For purposes of this section,
"net levy" means the city levy, after all adjustments, used for
calculating the local tax rate under section 275.08 for taxes
payable in the year prior to the aid distribution. The fiscal
disparity distribution levy under chapter 276A or 473F is
included in net levy.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2002 and future years.
Sec. 75. Minnesota Statutes 2000, section 477A.011,
subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as provided in
paragraphs (b) to (n) (o), "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 by an additional $50,000 in calendar
years 2002 to 2011, 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, and by
$50,000 in calendar year 2002 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.
(o) The city aid base for a city with a population of
10,000 or more which is located outside of the seven-county
metropolitan area is increased in 2002 and thereafter, and the
maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (b) or (c), is also increased
in calendar year 2002 only, by an amount equal to the lesser of:
(1)(i) the total population of the city, as determined by
the United States Bureau of the Census, in the 2000 census, (ii)
minus 5,000, (iii) times 60; or
(2) $2,500,000.
(p) The city aid base is increased by $50,000 in 2002 and
thereafter, and the maximum amount of total aid it may receive
under section 477A.013, subdivision 9, paragraph (c), is also
increased by $50,000 in calendar year 2002 only, provided that:
(1) the city is located in the seven-county metropolitan
area;
(2) its population in 2000 is between 10,000 and 20,000;
and
(3) its commercial industrial percentage, as calculated for
city aid payable in 2001, was greater than 25 percent.
(q) The city aid base for a city is increased by $150,000
in calendar years 2002 to 2011 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
2002 only, provided that:
(1) the city had a population of at least 3,000 but no more
than 4,000 in 1999;
(2) its home county is located within the seven-county
metropolitan area;
(3) its pre-1940 housing percentage is less than 15
percent; and
(4) its city net tax capacity per capita for taxes payable
in 2000 is less than $900 per capita.
[EFFECTIVE DATE.] This section is effective beginning with
aids payable in 2002.
Sec. 76. Minnesota Statutes 2000, section 477A.013,
subdivision 1, is amended to read:
Subdivision 1. [TOWNS.] In 1994 each town that had levied
for taxes payable in the prior year a local tax rate of at least
.008 shall receive a distribution equal to the amount it
received in 1993 under this section before any nonpermanent
reductions made under section 477A.0132. In 1995 each town that
had levied for taxes payable in 1993 a local tax rate of at
least .008 shall receive a distribution equal to 102 percent of
the amount it received in 1994 under this section before any
increases or reductions under sections 16A.711, subdivision 5,
and 477A.0132. In 1996 and subsequent years each town that had
levied for taxes payable in 1993 a local tax rate of at least
.008 shall receive a distribution equal to the amount it
received in the previous year under this section, adjusted for
inflation as provided under section 477A.03, subdivision 3 2002,
no town is eligible for a distribution under this subdivision.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2002 and subsequent years.
Sec. 77. Minnesota Statutes 2000, section 477A.013,
subdivision 9, is amended to read:
Subd. 9. [CITY AID DISTRIBUTION.] (a) In calendar year
1994 2002 and thereafter, each city shall receive an aid
distribution equal to the sum of (1) the city formula aid under
subdivision 8, and (2) its city aid base.
(b) The percentage increase for a first class city in
calendar year 1995 and thereafter, except for 2002, shall not
exceed the percentage increase in the sum of the aid to all
cities under this section in the current calendar year compared
to the sum of the aid to all cities in the previous year. For
aids payable in 2002 only, the amount of the aid paid to a first
class city shall not exceed the sum of its aid amount for
calendar year 2001 under this section and its aid payment in
calendar year 2001 under section 273.1398, subdivision 2, by
more than 2.5 percent.
(c) For aids payable in all years except 2002, the total
aid for any city, except a first class city, shall not exceed
the sum of (1) ten percent of the city's net levy for the year
prior to the aid distribution plus (2) its total aid in the
previous year before any increases or decreases under sections
16A.711, subdivision 5, and 477A.0132. For aids payable in 2002
only, the total aid for any city, except a first class city,
shall not exceed 40 percent of the sum of (1) the city's net
levy for taxes payable in the year prior to the aid distribution
plus (2) its total aid in the previous year under section
273.1398, subdivision 2, before any increases or decreases under
sections 16A.711, subdivision 5, and 477A.0132.
(d) Notwithstanding paragraph (c), in 1995 only, for cities
which in 1992 or 1993 transferred an amount from governmental
funds to their sewer and water fund in an amount greater than
their net levy for taxes payable in the year in which the
transfer occurred, the total aid shall not exceed the sum of (1)
20 percent of the city's net levy for the year prior to the aid
distribution plus (2) its total aid in the previous year before
any increases or decreases under sections 16A.711, subdivision
5, and 477A.0132.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2002 and future years.
Sec. 78. Minnesota Statutes 2000, 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 2002 under section
477A.013, subdivision 9, are limited to $380,565,489. For aids
payable in 2000, 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) $140,000,000. 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
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 2003 under
section 477A.06. For aids payable in 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 2002 and future years.
Sec. 79. [477A.07] [RENTAL HOUSING TAX BASE REPLACEMENT
AID.]
Subdivision 1. [AID AMOUNT.] (a) For aid payable in 2003,
each county and city is eligible for aid equal to the amount by
which (i) 0.3 percent of the assessment year 2001 taxable market
value of class 4a property, plus .25 percent of the assessment
year 2001 market value of class 4b property, as defined in
section 273.13, subdivision 25, exceeds (ii) 0.4 percent of the
jurisdiction's total taxable net tax capacity for taxes payable
in 2002, multiplied by the jurisdiction's average tax rate for
taxes payable in 2002.
(b) For aid payable in 2004, each county and city is
eligible for aid equal to the amount by which (i) 0.25 percent
of the assessment year 2002 taxable market value of class 4a
property, as defined in section 273.13, subdivision 25, exceeds
(ii) 0.4 percent of the jurisdiction's total taxable net tax
capacity for taxes payable in 2003, multiplied by the
jurisdiction's average tax rate for taxes payable in 2003.
Subd. 2. [COUNTY AID.] Each county's aid amount for 2003
determined under subdivision 1 must be permanently added to the
county's homestead and agricultural credit aid base under
section 273.1398 for aid payable in 2003. Each county's aid
amount for 2004 determined under subdivision 1 must be
permanently added to the county's homestead and agricultural
credit aid base for aid payable in 2004.
Subd. 3. [CITY AID.] Each city's 2003 aid amount
determined under subdivision 1 must be permanently added to its
city aid base under section 477A.011, subdivision 36, for aid
payable in 2003. Each city's 2004 aid amount determined under
subdivision 1 must be permanently added to its city aid base
under section 477A.011, subdivision 36, for aid payable in 2004.
Subd. 4. [APPROPRIATION INCREASE.] For aid payable in
2003, the total aid amount payable to cities under section
477A.03, subdivision 2, paragraph (d), is permanently increased
by the total amount payable to all cities under subdivision 3
for aid payable in 2003. For aid payable in 2004, the total aid
amount payable to cities under section 477A.03, subdivision 2,
paragraph (d), is permanently increased by the total amount
payable to all cities under subdivision 3 for aid payable in
2004.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2003 and subsequent years.
Sec. 80. Minnesota Statutes 2000, section 477A.12, is
amended to read:
477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE;
CERTIFICATION OF ACREAGE.]
Subdivision 1. [TYPES OF LAND; PAYMENTS.] (a) 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 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, 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) The amount determined under paragraph (a), clause (1),
is payable for land that is acquired from a private owner and
owned by the department of transportation for the purpose of
replacing wetland losses caused by transportation projects, but
only if the county contains more than 500 acres of such land at
the time the certification is made under subdivision 2.
Subd. 2. [PROCEDURE.] 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 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 transportation shall determine and
certify to the commissioner of revenue by March 1 of the payment
year the number of acres of land and the appraised value of the
land described in subdivision 1, paragraph (b), but only if it
exceeds 500 acres.
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 and the commissioner of transportation by
March 1 of the payment year.
(c) Subd 3. [DETERMINATION OF APPRAISED VALUE.] 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 is effective for payments in
2002 and thereafter.
Sec. 81. Minnesota Statutes 2000, section 477A.14, is
amended to read:
477A.14 [USE OF FUNDS.]
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, as adjusted for inflation under
section 477A.145, for each acre of acquired natural resources
land and each acre of land described in section 477A.12,
subdivision 1, paragraph (b), and 7.5 cents, 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 is effective for payments in
2002 and thereafter.
Sec. 82. Laws 1992, chapter 499, article 7, section 31, as
amended by Laws 1998, chapter 398, article 1, section 39, Laws
1999, chapter 241, article 1, section 54, and Laws 2000, chapter
489, article 2, section 28, is amended to read:
Sec. 31. [REPEALER.]
Minnesota Statutes 1990, sections 124A.02, subdivision 24;
124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3;
124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota
Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and
23; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i;
124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9;
124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision
1; and 124A.29, subdivision 1, are repealed effective June 30,
2004; Laws 1991, chapter 265, article 7, section 35, is repealed.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 83. [CONVEYANCE OF TAX-FORFEITED LAND; DAKOTA
COUNTY.]
(a) If special school district No. 6 conveys the land
described in paragraph (c) to the state according to Minnesota
Statutes, section 282.01, subdivision 1d, then, notwithstanding
any other provision of Minnesota Statutes, chapter 282, the
commissioner of revenue shall reconvey the land described in
paragraph (c) to special school district No. 6 for no
consideration.
(b) The conveyance must be in a form approved by the
attorney general. Notwithstanding Minnesota Statutes, chapter
282, or other law to the contrary, special school district No. 6
may use or sell the land for other than a public use.
Notwithstanding Minnesota Statutes, chapter 282, or other law to
the contrary, the state shall not retain a reversionary interest
and shall convey the land free of the trust in favor of the
taxing district.
(c) The land to be conveyed is in the city of South St.
Paul, Dakota county, and is described as:
(1) Lots 4, 5, 6, and 7, Block 1, Lookout Park Addition;
(2) Lots 25 and 26, Block 1, Lookout Park Addition;
(3) Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block
2, Lookout Park Addition;
(4) Lots 1, 2, 3, 4, and 5, Block 1, Bryants First Addition
to the city of South St. Paul; and
(5) Lot 21, Block 1, Bryants First Addition to the city of
South St. Paul, together with that part of the vacated alley and
vacated Stanley Place accruing thereto.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 84. [MINNEHAHA CREEK WATERSHED DISTRICT.]
Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding
Minnesota Statutes, section 103D.905, subdivision 3, the
Minnehaha Creek watershed district may annually levy an
additional amount up to $50,000 for enforcing rules and permits.
Subd. 2. [EFFECTIVE DATE.] This section is effective,
without local approval, beginning with taxes levied in 2001,
payable in 2002.
Sec. 85. [PRIVATE SALE OF TAX-FORFEITED LAND; ST. LOUIS
COUNTY.]
(a) Notwithstanding the public sale provisions of Minnesota
Statutes, chapter 282, or other law to the contrary, St. Louis
county may sell by private sale the tax-forfeited land described
in paragraph (c) to one or more of the owners at the time of
forfeiture.
(b) The conveyance must be in a form approved by the
attorney general for a consideration of taxes due on the
property and any penalties, interest, and costs.
(c) The land to be sold is located in St. Louis county and
is described as:
(1) Parcel 200-10-1720: Sec. 11, Twp. 61, Rge 19 NW 1/4 of
NW 1/4; and
(2) Parcel 200-10-280: Sec. 2, Twp. 61, Rge 19 SW 1/4 of
SW 1/4.
(d) The county has determined that the county's land
management interests would best be served if the lands were
returned to private ownership.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 86. [RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT IN
LIEU OF TAXES.]
(a) The Red River watershed management board may spend
money from its general fund to compensate counties and townships
for lost tax revenue from land that becomes tax exempt after it
is acquired by the board or a member watershed district for
flood damage reduction project. The amount that may be paid
under this section to a county or township must not exceed the
tax that was payable to that taxing jurisdiction on the land in
the last taxes payable year before the land became exempt due to
the acquisition, not to exceed $4 per acre, multiplied by 20.
This total amount may be paid in one payment, or in equal annual
installments over a period that does not exceed 20 years. A
member watershed district of the Red River management board may
spend money from its construction fund for the purposes
described in this section.
(b) For the purposes of this section, "Red River watershed
management board" refers to the board established by Laws 1976,
chapter 162, section 1, as amended by Laws 1982, chapter 474,
section 1, Laws 1983, chapter 338, section 1, Laws 1989 First
Special Session chapter 1, article 5, section 45, Laws 1991,
chapter 167, section 1, and Laws 1998, chapter 389, article 3,
section 29.
Sec. 87. [INDEPENDENT SCHOOL DISTRICT NO. 319,
NASHWAUK-KEEWATIN, ADDITIONAL LEVY.]
In addition to other levies, independent school district
No. 319, Nashwauk-Keewatin, may levy an amount up to $25,000
each year to finance the Nashwauk School-Community Library and
Community Service Project.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 88. [WYOMING TOWNSHIP; CITY OF CHISAGO CITY;
MUNICIPAL REIMBURSEMENT.]
Notwithstanding the limitation on duration or equality of
payment imposed under Minnesota Statutes, section 414.036, the
city of Chisago City may provide reimbursement for orderly
annexed property to the town of Wyoming for a period and in such
amounts agreed to by the city and the town under a joint powers
agreement entered into for the purposes of establishing a joint
commercial and business park in the annexed area.
[EFFECTIVE DATE.] This section is effective July 1, 2002.
Sec. 89. [FORGIVENESS OF PENALTY AND INTEREST.]
If the owner of record of property located in St. Louis
county that has parcel number 060-0030-03840 enters into an
agreement with the county by August 15, 2001, to make
installment payments over a ten-year period of the amount of
taxes and special assessments due on the property for the 1997
payable year and the owner makes the payments required under the
agreement when due, the amount of penalties, interest, and
related fees due as of August 15, 2001, with respect to the
delinquent taxes will not be required to be paid.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 90. [RENEWAL OF RULEMAKING AUTHORITY.]
Notwithstanding Minnesota Statutes, section 14.125, the
Minnesota housing finance agency may adopt administrative rules
under Minnesota Statutes, chapter 14, to carry out the
provisions of Minnesota Statutes, section 462A.071, and
determinations made under Minnesota Statutes, section 462A.071,
subdivision 11, paragraph (b), are valid until January 1, 2003.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 91. [PROPOSED NOTICES; PUBLIC HEARINGS; TAXES PAYABLE
2002 ONLY.]
Subdivision 1. [PUBLIC HEARINGS.] The public hearing
requirements contained in Minnesota Statutes, section 275.065,
are suspended for property taxes levied in 2001, payable in
2002. However, this does not prohibit a taxing authority from
holding a public hearing on its proposed levy if it so chooses.
The hearing requirements contained in Minnesota Statutes,
section 275.065, are reinstated beginning for taxes payable in
2003.
Subd. 2. [PROPOSED NOTICES.] (a) The parcel-specific
notice requirements contained in Minnesota Statutes, section
275.065, are suspended for property taxes levied in 2001,
payable in 2002, and are replaced by the requirements contained
in this section. The payable 2002 notice shall be
parcel-specific, unless waived by the commissioner in
extenuating circumstances as provided in subdivision 3. The
notice shall contain the amount of property taxes that each of
the taxing authorities propose to collect from the parcel for
taxes payable in 2002. The proposed amount shall be shown
separately for the county, city or town, school district, sum of
the special taxing districts, the state general tax, tax
increment, fiscal disparities, and the total tax of all taxing
authorities. In the case of school districts, the state
mandated school levy, which will show a zero levy due to the
state takeover, the voter approved levies, and the other levies
should be itemized separately, if possible. The amount of any
residential homestead market value credit and agricultural
homestead market value credit, and the resulting net tax shall
be listed.
(b) The parcel's total net tax for taxes payable in 2001
shall be listed on the notice. The notice shall also contain
the property classification and the taxable market value of the
parcel for taxes payable in 2001 and 2002.
(c) The commissioner of revenue shall prescribe the form of
the notice and may modify its contents as necessary, provided
that, to the extent possible, the information requested in this
section is contained in the notice. The notices shall be mailed
by December 14, 2001.
Subd. 3. [WAIVERS.] Based on information supplied by a
particular county, and at the request of the county board, the
commissioner may waive the requirement for parcel specific
notices or modify the form of the notices for a specific county
and may waive any procedure or deadline having to do with the
administration of the property tax, if the commissioner
determines that doing so will not materially prejudice the
rights of taxpayers in that county. This authority does not
extend to the provisions of Minnesota Statutes, chapters 279,
280, 281, 282, and 284.
Subd. 4. [SUPERSEDES.] This section supersedes the public
hearing and notice requirements in Minnesota Statutes, section
275.065, for taxes payable in 2002.
[EFFECTIVE DATE.] This section is effective only for
hearings in 2001 and parcel-specific notices and property tax
administration procedures and deadlines related only to taxes
levied in 2001, payable in 2002.
Sec. 92. [REPORT ON ASSESSMENT PRACTICES AND MARKET
VALUES.]
The department of revenue shall report to the legislature
each year by March 1, the following information on values and
assessment practices. The information should be provided by
major types of property on a statewide basis and at the most
disaggregate jurisdictional level that is useful and
appropriate. The information must include:
(1) recent market value trends and, to the extent possible,
projections of market value trends for up to five years;
(2) analysis of the effects of the limited market value
law;
(3) tax shift implications of market value trends and
limited market value;
(4) assessment quality indicators such as sales ratios and
coefficients of dispersion;
(5) to the extent possible, consideration should be given
to quality factors such as:
(i) number of sales;
(ii) time period;
(iii) geographical area; and
(iv) other;
(6) summary of state board orders; and
(7) percentage of parcels that change in value per year.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 93. [STATE AID CERTIFICATIONS.]
The commissioner of revenue is allowed until September 1,
2001, to certify to the various local units of government the
state aid or reimbursement amounts administered or paid by the
commissioner that such units are to receive in calendar year
2002.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 94. [CLASS 4D; TAXES PAYABLE IN 2003.]
If a parcel of property qualified under Minnesota Statutes,
section 273.126, for classification of all or part of its value
as class 4d for property taxes payable in 2002, the same
percentage of the value of the parcel qualifies for
classification as class 4d for taxes payable in 2003 as
qualified for taxes payable in 2002. The income restriction and
rent restriction agreement remain in effect for calendar year
2003, but no application for designation need be made under
Minnesota Statutes, section 462A.071. A property subject to a
rent restriction agreement may elect to terminate the agreement
for taxes payable in 2003 and cease to qualify as class 4d.
Sec. 95. [APPROPRIATION.]
$5,000,000 is appropriated from the general fund to the
metropolitan council in fiscal year 2002 for transition revenue
associated with the conversion of metropolitan area transit
services funding for calendar year 2002.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 96. [REPEALER.]
(a) Minnesota Statutes 2000, sections 273.13, subdivision
24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e;
473.446, subdivisions 1a and 1b; and 473.3915, are repealed
effective for taxes levied in 2001, payable in 2002, and
thereafter and aids or credits payable in 2002 and thereafter.
(b) Laws 1988, chapter 426, section 1; Laws 1988, chapter
702, section 16; Laws 1992, chapter 511, article 2, section 52,
as amended by Laws 1997, chapter 231, article 2, section 50, and
Laws 1998, chapter 389, article 3, section 32; Laws 1996,
chapter 471, article 8, section 45; Laws 1999, chapter 243,
article 6, section 14; Laws 1999, chapter 243, article 6,
section 15; and Laws 2000, chapter 490, article 6, section 17,
are repealed effective for taxes levied in 2001, payable in 2002
and thereafter.
(c) Minnesota Statutes 2000, sections 126C.30; 126C.31;
126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed
effective July 1, 2001.
(d) Minnesota Statutes 2000, section 273.126 and 462A.071,
are repealed effective for property taxes payable in 2004, and
any agreement entered into pursuant to the provisions of those
sections expires, effective January 1, 2004, regardless of the
term of the agreement.
ARTICLE 4
PROPERTY TAX REFUND
Section 1. Minnesota Statutes 2000, section 290A.03,
subdivision 6, is amended to read:
Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling
occupied as the claimant's principal residence and so much of
the land surrounding it, not exceeding ten acres, as is
reasonably necessary for use of the dwelling as a home and any
other property used for purposes of a homestead as defined in
section 273.13, subdivision 22, except for agricultural land
assessed as part of a homestead pursuant to section 273.13,
subdivision 23, "homestead" is limited to the first $600,000 of
market value or, where the farm homestead is rented, house and
garage and immediately surrounding one acre of land. The
homestead may be owned or rented and may be a part of a
multidwelling or multipurpose building and the land on which it
is built. A manufactured home, as defined in section 273.125,
subdivision 8, or a park trailer taxed as a manufactured home
under section 168.012, subdivision 9, assessed as personal
property may be a dwelling for purposes of this subdivision.
[EFFECTIVE DATE.] This section is effective beginning with
refunds based on property taxes payable in 2002.
Sec. 2. Minnesota Statutes 2000, section 290A.03,
subdivision 13, is amended to read:
Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes
payable" means the property tax exclusive of special
assessments, penalties, and interest payable on a claimant's
homestead after deductions made under sections 273.135,
273.1382, 273.1391, 273.42, subdivision 2, and any other state
paid property tax credits in any calendar year, and after any
refund claimed and allowable under section 290A.04, subdivision
2h, that is first payable in the year that the property tax is
payable. In the case of a claimant who makes ground lease
payments, "property taxes payable" includes the amount of the
payments directly attributable to the property taxes assessed
against the parcel on which the house is located. No
apportionment or reduction of the "property taxes payable" shall
be required for the use of a portion of the claimant's homestead
for a business purpose if the claimant does not deduct any
business depreciation expenses for the use of a portion of the
homestead in the determination of federal adjusted gross
income. For homesteads which are manufactured homes as defined
in section 273.125, subdivision 8, and for homesteads which are
park trailers taxed as manufactured homes under section 168.012,
subdivision 9, "property taxes payable" shall also include 19
percent of the gross rent paid in the preceding year for the
site on which the homestead is located. When a homestead is
owned by two or more persons as joint tenants or tenants in
common, such tenants shall determine between them which tenant
may claim the property taxes payable on the homestead. If they
are unable to agree, the matter shall be referred to the
commissioner of revenue whose decision shall be final. Property
taxes are considered payable in the year prescribed by law for
payment of the taxes.
In the case of a claim relating to "property taxes
payable," the claimant must have owned and occupied the
homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead
property pursuant to section 273.124, on or before December 15
of the assessment year to which the "property taxes payable"
relate; or (ii) the claimant must provide documentation from the
local assessor that application for homestead classification has
been made on or before December 15 of the year in which the
"property taxes payable" were payable and that the assessor has
approved the application.
[EFFECTIVE DATE.] This section is effective beginning with
refunds based on property taxes payable in 2002.
Sec. 3. Minnesota Statutes 2000, section 290A.04,
subdivision 2, is amended to read:
Subd. 2. [HOMEOWNERS.] A claimant whose property taxes
payable are in excess of the percentage of the household income
stated below shall pay an amount equal to the percent of income
shown for the appropriate household income level along with the
percent to be paid by the claimant of the remaining amount of
property taxes payable. The state refund equals the amount of
property taxes payable that remain, up to the state refund
amount shown below.
Percent Percent Maximum
Household Income of Income Paid by State
Claimant Refund
$0 to 1,029 1.2 percent 18 percent $440
$0 to 1,189 1.0 percent 15 percent $1,450
1,030 to 2,059 1.3 percent 18 percent $440
1,190 to 2,379 1.1 percent 15 percent $1,450
2,060 to 3,099 1.4 percent 20 percent $440
2,380 to 3,589 1.2 percent 15 percent $1,410
3,100 to 4,129 1.6 percent 20 percent $440
3,590 to 4,789 1.3 percent 20 percent $1,410
4,130 to 5,159 1.7 percent 20 percent $440
4,790 to 5,979 1.4 percent 20 percent $1,360
5,160 to 7,229 1.9 percent 25 percent $440
5,980 to 8,369 1.5 percent 20 percent $1,360
7,230 to 8,259 2.1 percent 25 percent $440
8,370 to 9,559 1.6 percent 25 percent $1,310
8,260 to 9,289 2.2 percent 25 percent $440
9,560 to 10,759 1.7 percent 25 percent $1,310
9,290 to 10,319 2.3 percent 30 percent $440
10,760 to 11,949 1.8 percent 25 percent $1,260
10,320 to 11,349 2.4 percent 30 percent $440
11,950 to 13,139 1.9 percent 30 percent $1,260
11,350 to 12,389 2.5 percent 30 percent $440
13,140 to 14,349 2.0 percent 30 percent $1,210
12,390 to 14,449 2.6 percent 30 percent $440
14,350 to 16,739 2.1 percent 30 percent $1,210
14,450 to 15,479 2.8 percent 35 percent $440
16,740 to 17,929 2.2 percent 35 percent $1,160
15,480 to 16,509 3.0 percent 35 percent $440
17,930 to 19,119 2.3 percent 35 percent $1,160
16,510 to 17,549 3.2 percent 40 percent $440
19,120 to 20,319 2.4 percent 35 percent $1,110
17,550 to 21,669 3.3 percent 40 percent $440
20,320 to 25,099 2.5 percent 40 percent $1,110
21,670 to 24,769 3.4 percent 45 percent $440
25,100 to 28,679 2.6 percent 40 percent $1,070
24,770 to 30,959 3.5 percent 45 percent $440
28,680 to 35,849 2.7 percent 40 percent $1,070
30,960 to 36,119 3.5 percent 45 percent $440
35,850 to 41,819 2.8 percent 45 percent $970
36,120 to 41,279 3.7 percent 50 percent $440
41,820 to 47,799 3.0 percent 45 percent $970
41,280 to 58,829 4.0 percent 50 percent $440
47,800 to 53,779 3.2 percent 45 percent $870
58,830 to 59,859 4.0 percent 50 percent $310
53,780 to 59,749 3.5 percent 50 percent $780
59,860 to 60,889 4.0 percent 50 percent $210
59,750 to 65,729 4.0 percent 50 percent $680
60,890 to 61,929 4.0 percent 50 percent $100
65,730 to 69,319 4.0 percent 50 percent $580
69,320 to 71,719 4.0 percent 50 percent $480
71,720 to 74,619 4.0 percent 50 percent $390
74,620 to 77,519 4.0 percent 50 percent $290
The payment made to a claimant shall be the amount of the
state refund calculated under this subdivision. No payment is
allowed if the claimant's household income is $61,930 $77,520 or
more.
[EFFECTIVE DATE.] This section is effective beginning with
refunds based on property taxes payable in 2002.
Sec. 4. Minnesota Statutes 2000, section 290A.04,
subdivision 2a, is amended to read:
Subd. 2a. [RENTERS.] A claimant whose rent constituting
property taxes exceeds the percentage of the household income
stated below must pay an amount equal to the percent of income
shown for the appropriate household income level along with the
percent to be paid by the claimant of the remaining amount of
rent constituting property taxes. The state refund equals the
amount of rent constituting property taxes that remain, up to
the maximum state refund amount shown below.
Percent Percent Maximum
Household Income of Income Paid by State
Claimant Refund
$ 0 to 3,099
0 to 3,589 1.0 percent 5 percent $1,030 $1,190
3,100 to 4,129
3,590 to 4,779 1.0 percent 10 percent $1,030 $1,190
4,130 to 5,159
4,780 to 5,969 1.1 percent 10 percent $1,030 $1,190
5,160 to 7,229
5,970 to 8,369 1.2 percent 10 percent $1,030 $1,190
7,230 to 9,289
8,370 to 10,759 1.3 percent 15 percent $1,030 $1,190
9,290 to 10,319
10,760 to 11,949 1.4 percent 15 percent $1,030 $1,190
10,320 to 11,349
11,950 to 13,139 1.4 percent 20 percent $1,030 $1,190
11,350 to 13,419
13,140 to 15,539 1.5 percent 20 percent $1,030 $1,190
13,420 to 14,449
15,540 to 16,729 1.6 percent 20 percent $1,030 $1,190
14,450 to 15,479
16,730 to 17,919 1.7 percent 25 percent $1,030 $1,190
15,480 to 17,549
17,920 to 20,319 1.8 percent 25 percent $1,030 $1,190
17,550 to 18,579
20,320 to 21,509 1.9 percent 30 percent $1,030 $1,190
18,580 to 19,609
21,510 to 22,699 2.0 percent 30 percent $1,030 $1,190
19,610 to 20,639
22,700 to 23,899 2.2 percent 30 percent $1,030 $1,190
20,640 to 21,669
23,900 to 25,089 2.4 percent 30 percent $1,030 $1,190
21,670 to 22,709
25,090 to 26,289 2.6 percent 35 percent $1,030 $1,190
22,710 to 23,739
26,290 to 27,489 2.7 percent 35 percent $1,030 $1,190
23,740 to 24,769
27,490 to 28,679 2.8 percent 35 percent $1,030 $1,190
24,770 to 25,799
28,680 to 29,869 2.9 percent 40 percent $1,030 $1,190
25,800 to 26,839
29,870 to 31,079 3.0 percent 40 percent $1,030 $1,190
26,840 to 27,869
31,080 to 32,269 3.1 percent 40 percent $1,030 $1,190
27,870 to 28,899
32,270 to 33,459 3.2 percent 40 percent $1,030 $1,190
28,900 to 29,929
33,460 to 34,649 3.3 percent 45 percent $ 930 $1,080
29,930 to 30,959
34,650 to 35,849 3.4 percent 45 percent $ 830 $ 960
30,960 to 31,999
35,850 to 37,049 3.5 percent 45 percent $ 720 $ 830
32,000 to 33,029
37,050 to 38,239 3.5 percent 50 percent $ 620 $ 720
33,030 to 34,059
38,240 to 39,439 3.5 percent 50 percent $ 520 $ 600
34,060 to 35,089
39,440 to 40,629 3.5 percent 50 percent $ 310 $ 360
35,090 to 36,119
40,630 to 41,819 3.5 percent 50 percent $ 100 $ 120
The payment made to a claimant is the amount of the state
refund calculated under this subdivision. No payment is allowed
if the claimant's household income is $36,120 $41,820 or more.
[EFFECTIVE DATE.] This section is effective beginning with
refunds based on rent constituting property taxes paid in 2001.
Sec. 5. Minnesota Statutes 2000, section 290A.04,
subdivision 2h, is amended to read:
Subd. 2h. [ADDITIONAL REFUND.] (a) Beginning with gross
property taxes payable in 2003, if the gross property taxes
payable on a homestead increase more than 12 percent over the
net property taxes payable in the prior year on the same
property that is owned and occupied by the same owner on January
2 of both years, and the amount of that increase is $100 or
more, a claimant who is a homeowner shall be allowed an
additional refund equal to 60 percent of the amount of the
increase over the greater of 12 percent of the prior year's net
property taxes payable or $100. This subdivision shall not
apply to any increase in the gross property taxes payable
attributable to improvements made to the homestead after the
assessment date for the prior year's taxes. This subdivision
shall not apply to any increase in the gross property taxes
payable attributable to the termination of valuation exclusions
under section 273.11, subdivision 16.
The maximum refund allowed under this subdivision is $1,000.
(b) For purposes of this subdivision, the following terms
have the meanings given:
(1) "Net property taxes payable" means property taxes
payable minus refund amounts for which the claimant qualifies
pursuant to subdivision 2 and this subdivision.
(2) "gross property taxes payable" means net property taxes
payable determined without regard to the refund allowed under
this subdivision.
(c) In addition to the other proofs required by this
chapter, each claimant under this subdivision shall file with
the property tax refund return a copy of the property tax
statement for taxes payable in the preceding year or other
documents required by the commissioner.
(d) Upon request, the appropriate county official shall
make available the names and addresses of the property taxpayers
who may be eligible for the additional property tax refund under
this section. The information shall be provided on a magnetic
computer disk. The county may recover its costs by charging the
person requesting the information the reasonable cost for
preparing the data. The information may not be used for any
purpose other than for notifying the homeowner of potential
eligibility and assisting the homeowner, without charge, in
preparing a refund claim.
[EFFECTIVE DATE.] This section is effective beginning with
refunds based on property taxes payable in 2002.
Sec. 6. Minnesota Statutes 2000, section 290A.04,
subdivision 4, is amended to read:
Subd. 4. [INFLATION ADJUSTMENT.] Beginning for property
tax refunds payable in calendar year 1996 2002, the commissioner
shall annually adjust the dollar amounts of the income
thresholds and the maximum refunds under subdivisions 2 and 2a
for inflation. The commissioner shall make the inflation
adjustments in accordance with section 290.06, subdivision 2d 1f
of the Internal Revenue Code, except that for purposes of this
subdivision the percentage increase shall be determined from the
year ending on June 30, 1994 2000, to the year ending on June 30
of the year preceding that in which the refund is payable. The
commissioner shall use the appropriate percentage increase to
annually adjust the income thresholds and maximum refunds under
subdivisions 2 and 2a for inflation without regard to whether or
not the income tax brackets are adjusted for inflation in that
year. The commissioner shall round the thresholds and the
maximum amounts, as adjusted to the nearest $10 amount. If the
amount ends in $5, the commissioner shall round it up to the
next $10 amount.
The commissioner shall annually announce the adjusted
refund schedule at the same time provided under section 290.06.
The determination of the commissioner under this subdivision is
not a rule under the Administrative Procedure Act.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 5
STATE TAKEOVER OF COUNTY SERVICES
Section 1. Minnesota Statutes 2000, section 97A.065,
subdivision 2, as amended by Laws 2001, chapter 185, section 23,
is amended to read:
Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and
forfeited bail collected from prosecutions of violations of:
the game and fish laws or rules adopted thereunder; sections
84.091 to 84.15 or rules adopted thereunder; sections 84.81 to
84.91 or rules adopted thereunder; section 169A.20, when the
violation involved an off-road recreational vehicle as defined
in section 169A.03, subdivision 16; chapter 348; and any other
law relating to wild animals or aquatic vegetation, must be paid
to the treasurer of the county where the violation is
prosecuted. The county treasurer shall submit one-half of the
receipts to the commissioner and credit the balance to the
county general revenue fund except as provided in paragraphs
(b), (c), and (d). In a county in a judicial district under
section 480.181, subdivision 1, paragraph (b), as added in Laws
1999, chapter 216, article 7, section 26, the share that would
otherwise go to the county under this paragraph must be
submitted to the state treasurer for deposit in the state
treasury and credited to the general fund.
(b) The commissioner must reimburse a county, from the game
and fish fund, for the cost of keeping prisoners prosecuted for
violations under this section if the county board, by
resolution, directs: (1) the county treasurer to submit all
fines and forfeited bail to the commissioner; and (2) the county
auditor to certify and submit monthly itemized statements to the
commissioner.
(c) The county treasurer shall submit one-half of the
receipts collected under paragraph (a) from prosecutions of
violations of sections 84.81 to 84.91 or rules adopted
thereunder, and 169A.20, except receipts that are surcharges
imposed under section 357.021, subdivision 6, to the
commissioner and credit the balance to the county general fund.
The commissioner shall credit these receipts to the snowmobile
trails and enforcement account in the natural resources fund.
(d) The county treasurer shall indicate the amount of the
receipts that are surcharges imposed under section 357.021,
subdivision 6, and shall submit all of those receipts to the
state treasurer.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 2. Minnesota Statutes 2000, section 179A.101,
subdivision 1, is amended to read:
Subdivision 1. [COURT EMPLOYEE UNITS.] (a) The state court
administrator shall meet and negotiate with the exclusive
representative of each of the units specified in this section.
The units provided in this section are the only appropriate
units for court employees. Court employees, unless otherwise
excluded, are included within the units which include the
classifications to which they are assigned for purposes of
compensation. Initial assignment of classifications to
bargaining units shall be made by the state court administrator
by August 15, 1999 of the year preceding the year in which the
state assumes the cost of court administration in the judicial
district in which the bargaining unit is located. An exclusive
representative may appeal the initial assignment decision of the
state court administrator by filing a petition with the
commissioner within 45 days of being certified as the exclusive
representative for a judicial district. The units in this
subdivision are the appropriate units of court employees.
(b) The judicial district unit consists of clerical,
administrative, and technical employees of a judicial district
under section 480.181, subdivision 1, paragraph (b), or of two
or more of these districts that are represented by the same
employee organization or one or more subordinate bodies of the
same employee organization. The judicial district unit includes
individuals, not otherwise excluded, whose work is typically
clerical or secretarial in nature, including nontechnical data
recording and retrieval and general office work, and
individuals, not otherwise excluded, whose work is not typically
manual and which requires specialized knowledge or skills
acquired through two-year academic programs or equivalent
experience or on-the-job training.
(c) The appellate courts unit consists of clerical,
administrative, and technical employees of the court of appeals
and clerical, administrative, and technical employees of the
supreme court. The appellate courts unit includes individuals,
not otherwise excluded, whose work is typically clerical or
secretarial in nature, including nontechnical data recording and
retrieval and general office work, and individuals, not
otherwise excluded, whose work is not typically manual and which
requires specialized knowledge or skills acquired through
two-year academic programs or equivalent experience or
on-the-job training.
(d) The court employees professional employee unit consists
of professional employees, not otherwise excluded, that are
employed by the supreme court, the court of appeals, or a
judicial district under section 480.181, subdivision 1,
paragraph (b).
(e) The court employees court reporter unit consists of
court reporters not otherwise excluded who are employed by a
judicial district under section 480.181, subdivision 1,
paragraph (a).
(f) Notwithstanding any provision of this chapter or any
other law to the contrary, judges may appoint and remove court
reporters at their pleasure.
(g) Copies of collective bargaining agreements entered into
under this section must be submitted to the legislative
coordinating commission for the commission's information.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 3. Minnesota Statutes 2000, section 179A.102,
subdivision 6, is amended to read:
Subd. 6. [CONTRACT AND REPRESENTATION RESPONSIBILITIES.]
(a) Notwithstanding the provisions of section 179A.101, the
exclusive representatives of units of court employees certified
prior to the effective date of the judicial district coming
under section 480.181, subdivision 1, paragraph (b), remain
responsible for administration of their contracts and for other
contractual duties and have the right to dues and fair share fee
deduction and other contractual privileges and rights until a
contract is agreed upon with the state court administrator for a
new unit established under section 179A.101 or until June 30,
2001, whichever is earlier. Exclusive representatives of court
employees certified after the effective date of this section in
the judicial district are immediately upon certification
responsible for bargaining on behalf of employees within the
unit. They are also responsible for administering grievances
arising under previous contracts covering employees included
within the unit which remain unresolved on June 30, 2001, or
upon agreement with the state court administrator on a contract
for a new unit established under section 179A.101, whichever is
earlier. Where the employer does not object, these
responsibilities may be varied by agreement between the outgoing
and incoming exclusive representatives. All other rights and
duties of representation begin on July 1, 2001 of the year in
which the state assumes the funding of court administration in
the judicial district, except that exclusive representatives
certified after the effective date of this section shall
immediately, upon certification, have the right to all employer
information and all forms of access to employees within the
bargaining unit which would be permitted to the current contract
holder, including the rights in section 179A.07, subdivision 6.
This section does not affect an existing collective bargaining
contract. Incoming exclusive representatives of court employees
from judicial districts that come under section 480.181,
subdivision 1, paragraph (b), are immediately, upon
certification, responsible for bargaining on behalf of all
previously unrepresented employees assigned to their units. All
other rights and duties of exclusive representatives begin on
July 1, 2001 of the year in which the state assumes the funding
of court administration in the judicial district.
(b) Nothing in this act or Laws 1999, chapter 216, article
7, sections 3 to 15, prevents an exclusive representative
certified after the effective date of sections 3 to 15 dates of
those provisions from assessing fair share or dues deductions
immediately upon certification for employees in a unit
established under section 179A.101 if the employees were
unrepresented for collective bargaining purposes before that
certification.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 4. Minnesota Statutes 2000, section 179A.103,
subdivision 1, is amended to read:
Subdivision 1. [CONTRACTS.] Contracts for the period
commencing July 1, 2000, of the year in which the state assumes
the cost of court administration in the judicial district for
the judicial district court employees of judicial districts that
are under section 480.181, subdivision 1, paragraph (b), must be
negotiated with the state court administrator. Negotiations for
those contracts may begin any time after July 1, 1999 of the
year before the state assumes the cost, and may be initiated by
either party notifying the other of the desire to begin the
negotiating process. Negotiations are subject to this chapter.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 5. Minnesota Statutes 2000, section 273.1398,
subdivision 4a, is amended to read:
Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15,
1999 of the year preceding the year in which the state assumes
the cost of court administration in the judicial district as
specified under section 480.183, 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 in the
judicial districts specified under Laws 1999, chapter 216,
article 7, section 480.183, subdivision 1, during the succeeding
fiscal year beginning July 1, 2000,.
(b) The amount certified in paragraph (a) shall be equal to
the following:
(1) 103 percent of the required court administration
expenditures as defined under section 480.183, subdivision 3,
for calendar year 2003, as determined under subdivision 4b,
paragraph (a); plus
(2) an adjustment for any cumulative percentage increase in
salary expenditures as defined under section 480.183,
subdivision 2, in excess of a maintenance of effort increase of
six percent; less
(3) an amount equal to the county's share of transferred
fines collected by the district courts in the county during the
calendar year 1998 preceding certification.
The court and the county may, if both parties agree,
negotiate and certify an amount higher than the amount
calculated under this paragraph.
(c) For purposes of this subdivision, the adjustment in
paragraph (b), clause (2), shall be equal to:
(1) the sum of the court administration expenditures as
defined under section 480.183, subdivision 3, required under
subdivision 4b, paragraph (a), plus the temporary aid payment
under subdivision 4c; multiplied by
(2) the difference between (i) the cumulative percentage
increase in actual and anticipated salary settlements for court
employees from July 1, 2001, until the date of the court
transfer and (ii) the percentage specified in subdivision 4b,
paragraph (a).
(b) (d) Payments to a county under subdivision 2 or section
273.166 for the calendar year 2000 in which the state assumes
the cost of court administration as defined under section
480.183, subdivision 3, in the judicial district 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) (e) Payments to a county under subdivision 2 or section
273.166 for the calendar year 2001 after the calendar year in
which the state assumes the cost of court administration as
defined under section 480.183, subdivision 3, in the judicial
district 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), provided that this
amount must be increased or decreased by an amount equal to the
positive or negative difference between the amount of fee and
fine revenue certified under paragraph (b), clause (3), and the
actual amount of fee and fine revenue of the county for the
calendar year when certification takes place.
(d) (f) 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.
(g) Payments to a county under subdivision 2 or section
273.166, for the cost of mandated services, as defined in
section 480.183, subdivision 4, in the judicial district, must
be permanently reduced in 2002 by an amount equal to the cost to
the state for assumption of mandated court services as defined
in section 480.183, subdivision 4. The supreme court shall
determine the amount for each county and certify it to the
commissioner of revenue by July 15, 2001.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2000, section 273.1398, is
amended by adding a subdivision to read:
Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a)
Until the costs of court administration as defined under section
480.183, subdivision 3, in a county have been transferred to the
state, each county in a judicial district transferring court
administration costs to state funding after July 1, 2001, shall
budget for the funding of these costs an amount at least equal
to the certified budget amount for calendar year 2001, increased
by six percent for each year from 2001 to 2003 and by eight
percent from 2004 to the year of the transfer. The county shall
budget, fund, and authorize expenditures not less than the
amount calculated under this paragraph plus the temporary aid
amount under subdivision 4c for maintenance of effort of
administrative costs.
(b) By July 15, 2001, the court shall certify to each
county in the judicial district its cost of court administration
as defined under section 480.183, subdivision 3, based on 2001
budgets. In making that determination, the court shall exclude
the budget costs of the county for the following categories:
(1) rent;
(2) examiner of titles;
(3) civil court appointed attorneys for civil matters;
(4) hospitalization costs; and
(5) cost of maintaining vital statistics.
The amount of funding provided by a county for courts that
is increased by the maintenance of effort requirement may not be
used by a county to pay the costs described in clauses (1) to
(5).
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2000, section 273.1398, is
amended by adding a subdivision to read:
Subd. 4c. [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For
calendar years 2004 and 2005, each county in a judicial district
that has not been transferred to the state by January 1 of that
year shall receive additional homestead and agricultural credit
aid. This amount is in addition to the amount calculated under
subdivision 2 and must not be included in the definition of
homestead and agricultural credit base under subdivision 1,
paragraph (j). The amount of additional aid is equal to the
difference between (1) the amount budgeted for court
administration costs in 2001 as determined under subdivision 4b,
paragraph (c), multiplied by the maintenance of effort percent
for the calendar year as determined under subdivision 4b,
paragraph (d), and (2) the amount calculated under subdivision
4b, paragraph (a), for calendar year 2003. This additional aid
must be used only to fund court administration expenditures as
defined in section 480.183, subdivision 3. This amount must be
added to the state court's base budget in the year when the
court in that judicial district in which the county is located
is transferred to the state.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 8. Minnesota Statutes 2000, section 273.1398, is
amended by adding a subdivision to read:
Subd. 4d. [AID OFFSET FOR OUT-OF-HOME PLACEMENT
COSTS.] For aid payable in 2003, each county's aid under
subdivision 2 shall be permanently reduced by an amount equal to
the county's 2003 reimbursement for nonfederal expenditures for
out-of-home placements, as provided in section 245.775, provided
that payments will be made under section 477A.0123 in calendar
year 2003. The counties shall provide all information requested
by the commissioner of human services necessary to allow the
commissioner to certify the previous three years' average
nonfederal costs to the commissioner of revenue by July 15,
2003. The aid reduction under this subdivision must be made
prior to any aid reductions for the state takeover of courts
contained in this article.
[EFFECTIVE DATE.] This section is effective the day after
final enactment, for aids payable beginning in 2003.
Sec. 9. Minnesota Statutes 2000, section 299D.03,
subdivision 5, is amended to read:
Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines
and forfeited bail money, from traffic and motor vehicle law
violations, collected from persons apprehended or arrested by
officers of the state patrol, shall be paid by the person or
officer collecting the fines, forfeited bail money or
installments thereof, on or before the tenth day after the last
day of the month in which these moneys were collected, to the
county treasurer of the county where the violation occurred.
Three-eighths of these receipts shall be credited to the general
revenue fund of the county, except that in a county in a
judicial district under section 480.181, subdivision 1,
paragraph (b), as added in Laws 1999, chapter 216, article 7,
section 26, this three-eighths share must be transmitted to the
state treasurer for deposit in the state treasury and credited
to the general fund. The other five-eighths of these receipts
shall be transmitted by that officer to the state treasurer
and shall be credited as follows:
(1) In the fiscal year ending June 30, 1991, the first
$275,000 in money received by the state treasurer after June 4,
1991, must be credited to the transportation services fund, and
the remainder in the fiscal year credited to the trunk highway
fund.
(2) In fiscal year 1992, the first $215,000 in money
received by the state treasurer in the fiscal year must be
credited to the transportation services fund, and the remainder
credited to the trunk highway fund.
(3) In fiscal year 1993 and subsequent years, the entire
amount received by the state treasurer must be credited to the
trunk highway fund. If, however, the violation occurs within a
municipality and the city attorney prosecutes the offense, and a
plea of not guilty is entered, one-third of the receipts shall
be credited to the general revenue fund of the county, one-third
of the receipts shall be paid to the municipality prosecuting
the offense, and one-third shall be transmitted to the state
treasurer as provided in this subdivision. All costs of
participation in a nationwide police communication system
chargeable to the state of Minnesota shall be paid from
appropriations for that purpose.
(b) Notwithstanding any other provisions of law, all fines
and forfeited bail money from violations of statutes governing
the maximum weight of motor vehicles, collected from persons
apprehended or arrested by employees of the state of Minnesota,
by means of stationary or portable scales operated by these
employees, shall be paid by the person or officer collecting the
fines or forfeited bail money, on or before the tenth day after
the last day of the month in which the collections were made, to
the county treasurer of the county where the violation
occurred. Five-eighths of these receipts shall be transmitted
by that officer to the state treasurer and shall be credited to
the highway user tax distribution fund. Three-eighths of these
receipts shall be credited to the general revenue fund of the
county, except that in a county in a judicial district under
section 480.181, subdivision 1, paragraph (b), as added in Laws
1999, chapter 216, article 7, section 26, this three-eighths
share must be transmitted to the state treasurer for deposit in
the state treasury and credited to the general fund.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 10. Minnesota Statutes 2000, section 357.021,
subdivision 1a, is amended to read:
Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a)
Every person, including the state of Minnesota and all bodies
politic and corporate, who shall transact any business in the
district court, shall pay to the court administrator of said
court the sundry fees prescribed in subdivision 2. Except as
provided in paragraph (d), the court administrator shall
transmit the fees monthly to the state treasurer for deposit in
the state treasury and credit to the general fund.
(b) In a county which has a screener-collector position,
fees paid by a county pursuant to this subdivision shall be
transmitted monthly to the county treasurer, who shall apply the
fees first to reimburse the county for the amount of the salary
paid for the screener-collector position. The balance of the
fees collected shall then be forwarded to the state treasurer
for deposit in the state treasury and credited to the general
fund. In a county in a judicial district under section 480.181,
subdivision 1, paragraph (b), as added in Laws 1999, chapter
216, article 7, section 26, which has a screener-collector
position, the fees paid by a county shall be transmitted monthly
to the state treasurer for deposit in the state treasury and
credited to the general fund. A screener-collector position for
purposes of this paragraph is an employee whose function is to
increase the collection of fines and to review the incomes of
potential clients of the public defender, in order to verify
eligibility for that service.
(c) No fee is required under this section from the public
authority or the party the public authority represents in an
action for:
(1) child support enforcement or modification, medical
assistance enforcement, or establishment of parentage in the
district court, or in a proceeding under section 484.702;
(2) civil commitment under chapter 253B;
(3) the appointment of a public conservator or public
guardian or any other action under chapters 252A and 525;
(4) wrongfully obtaining public assistance under section
256.98 or 256D.07, or recovery of overpayments of public
assistance;
(5) court relief under chapter 260;
(6) forfeiture of property under sections 169A.63 and
609.531 to 609.5317;
(7) recovery of amounts issued by political subdivisions or
public institutions under sections 246.52, 252.27, 256.045,
256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, 260B.331,
and 260C.331, or other sections referring to other forms of
public assistance;
(8) restitution under section 611A.04; or
(9) actions seeking monetary relief in favor of the state
pursuant to section 16D.14, subdivision 5.
(d) The fees collected for child support modifications
under subdivision 2, clause (13), must be transmitted to the
county treasurer for deposit in the county general fund. The
fees must be used by the county to pay for child support
enforcement efforts by county attorneys.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 11. [477A.0123] [REIMBURSEMENT OF COUNTY FOR CERTAIN
OUT-OF-HOME PLACEMENT.]
Subdivision 1. [AID PAYMENTS.] (a) In calendar year 2003
and thereafter, the commissioner of revenue shall reimburse each
county for a portion of the nonfederal share of the cost of
out-of-home placement provided the commissioner of human
services, in consultation with the commissioner of corrections,
certifies to the commissioner of revenue that accurate data is
available to make the aid determination under this section. The
amount of reimbursement is a percent of the county's average
nonfederal share of the cost for out-of-home placement for the
most recent three calendar years for which data is available.
The commissioner shall pay the aid under the schedule used for
local government aid payments under section 477A.015.
(b) For aids payable in calendar year 2003, the percent of
reimbursement in paragraph (a) shall be equal to the maximum
percentage possible, up to 30 percent, that does not cause the
payment to any county in the seven county metropolitan area to
exceed the difference between the amount of aid it is scheduled
to receive in calendar year 2003 under section 273.1398, prior
to the offset under section 273.1398, subdivision 4d, and any
aid offset under section 273.1398, subdivision 4a, that is
scheduled to occur after July 1, 2003. For aids payable in 2004
and thereafter, the percent of reimbursement under paragraph (a)
shall be equal to the percent of reimbursement determined for
calendar year 2003, adjusted so that the total payments under
this section do not exceed the appropriation under section
477A.03, subdivision 2, paragraph (e).
(c) For purposes of this section, "out-of-home placement"
means the placement of a child in a child caring institution or
shelter licensed under Minnesota Rules, parts 9545.0905 to
9545.1125, in a group home licensed under Minnesota Rules, parts
9545.1400 to 9545.1480, in family foster care or group family
foster care licensed under Minnesota Rules, parts 9545.0010 to
9545.0260, or a correctional facility pursuant to a court order
under which a county social services agency or a county
correctional agency has been assigned responsibility for the
placement.
Subd. 2. [DETERMINATION OF NONFEDERAL SHARE OF COSTS.] (a)
By January 1, 2002, each county shall report the following
information to the commissioners of human services and
corrections, the separate amounts paid out of its social service
agency budget and its corrections budget for out-of-home
placement in calendar years 1998, 1999, and 2000, along with the
number of case days associated with the expenditures from each
budget. By March 15, 2002, the commissioner of human services,
in consultation with the commissioner of corrections, shall
certify to the commissioner of revenue and to the legislative
committees responsible for local government aids and out-of-home
placement funding, whether the data reported under this
subdivision accurately reflects total expenditures by counties
for out-of-home placement costs.
(b) By January 1 of calendar year 2004 and thereafter, each
county shall report to the commissioners of human services and
corrections the separate amounts paid out of its social service
agency budget and its corrections budget for out-of-home
placement in the calendar years two years before the current
calendar year along with the number of case days associated with
the expenditures from each budget.
(c) Until either the commissioner of human services or
corrections develops another mechanism for collecting and
verifying data on out-of-home placements, and the legislature
authorizes the use of that data, the data collected under this
subdivision shall be used to calculate payments under
subdivision 1. The commissioner of human services shall certify
the information to the commissioner of revenue by July 1 of the
year prior to the aid payment.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2003 and thereafter except subdivision 2 is effective
the day after final enactment.
Sec. 12. Minnesota Statutes 2000, 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, 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 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 2003 under section 477A.06. For aids
payable in 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.
(e) Reimbursements made to counties under section 477A.0123
in calendar year 2004 and thereafter are limited to an amount
equal to the maximum allowed appropriation under this section in
the previous year, multiplied by a percent to be established by
law.
[EFFECTIVE DATE.] This section is effective for aids
payable in calendar year 2003 and thereafter.
Sec. 13. Minnesota Statutes 2000, section 480.181,
subdivision 1, is amended to read:
Subdivision 1. [STATE EMPLOYEES; COMPENSATION.] (a)
District court referees, judicial officers, court reporters, law
clerks, district administration staff, other than district
administration staff in the second and fourth judicial
districts, guardian ad litem program coordinators and
staff, staff court interpreters in the second judicial district,
court psychological services staff in the fourth judicial
district, and other court employees under paragraph (b), are
state employees and are governed by the judicial branch
personnel rules adopted by the supreme court. The supreme
court, in consultation with the conference of chief judges,
shall establish the salary range of these employees under the
judicial branch personnel rules. In establishing the salary
ranges, the supreme court shall consider differences in the cost
of living in different areas of the state.
(b) The court administrator and employees of the court
administrator who are in the fifth, seventh, eighth, or ninth
judicial district are state employees. The court administrator
and employees of the court administrator in the remaining
judicial districts become state employees as follows:
(1) effective July 1, 2003, for the second and fourth
judicial districts;
(2) effective July 1, 2004, for the first and third
judicial districts; and
(3) effective July 1, 2005, for the sixth and tenth
judicial districts.
[EFFECTIVE DATE.] The amendment to paragraph (a) for the
second district is effective July 1, 2001, and for the fourth
judicial district is effective July 1, 2003.
Sec. 14. [480.1811] [POST-RETIREMENT BENEFIT COSTS.]
Where court administration, guardian ad litem, or
interpreter employees elect to retain county insurance benefits
under section 480.181 after July 1, 2001, and the county
provides those employees post-retirement insurance benefits
prior to July 1, 2001, the county shall pay the post-retirement
cost of those benefits.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. [480.183] [JUDICIAL DISTRICTS; SCHEDULED DATES OF
STATE TRANSFER; DEFINITION OF SERVICES.]
Subdivision 1. [DATE OF STATE TRANSFER.] The court
administration expenditures as defined in this section for the
remaining judicial districts shall be transferred to the state
according to the following schedule:
(1) effective July 1, 2003, the second and fourth judicial
districts;
(2) effective July 1, 2004, the first and third judicial
districts; and
(3) effective July 1, 2005, the sixth and tenth judicial
districts.
Subd. 2. [DEFINITION; SALARY EXPENDITURES.] "Salary
expenditures" means the salary of court administration
employees, including salaries, related fringe benefits, and
insurance, granted to court and other county employees in
collective bargaining or county pay plans.
Subd. 3. [DEFINITION; COURT ADMINISTRATION
EXPENDITURES.] "Court administration expenditures" means the
total expenditures of (1) salary expenditures as defined under
subdivision 2 and (2) other related administrative operating
expenditures.
Subd. 4. [DEFINITION; MANDATED COURT SERVICES.] "Mandated
court services" means services for:
(1) guardian ad litem;
(2) interpreter;
(3) Minnesota Rules, parts 9525.0900 to 9525.1020 (rule
20);
(4) civil commitment examination, not including
hospitalization or treatment costs, for mental commitments and
related proceedings under chapter 253B; and
(5) in forma pauperis costs.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. [484.77] [FACILITIES.]
The county board in each county shall provide suitable
facilities for court purposes at the county seat, or at other
locations agreed upon by the district court and the county. The
county shall also be responsible for the costs of renting,
maintaining, operating, remodeling, insuring, and renovating
those facilities occupied by the court. The county board and
the district court must mutually agree upon relocation,
renovation, new construction, and remodeling decisions related
to court facility needs. The state court administrator shall
convene court and county representatives who shall develop
written model guidelines for facilities that may be adopted in
each county.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 17. Minnesota Statutes 2000, section 487.33,
subdivision 5, is amended to read:
Subd. 5. [ALLOCATION.] The court administrator shall
provide the county treasurer with the name of the municipality
or other subdivision of government where the offense was
committed which employed or provided by contract the arresting
or apprehending officer and the name of the municipality or
other subdivision of government which employed the prosecuting
attorney or otherwise provided for prosecution of the offense
for each fine or penalty and the total amount of fines or
penalties collected for each municipality or other subdivision
of government. On or before the last day of each month, the
county treasurer shall pay over to the treasurer of each
municipality or subdivision of government within the county all
fines or penalties for parking violations for which complaints
and warrants have not been issued and one-third of all fines or
penalties collected during the previous month for offenses
committed within the municipality or subdivision of government
from persons arrested or issued citations by officers employed
by the municipality or subdivision or provided by the
municipality or subdivision by contract. An additional
one-third of all fines or penalties shall be paid to the
municipality or subdivision of government providing prosecution
of offenses of the type for which the fine or penalty is
collected occurring within the municipality or subdivision,
imposed for violations of state statute or of an ordinance,
charter provision, rule or regulation of a city whether or not a
guilty plea is entered or bail is forfeited. Except as provided
in section 299D.03, subdivision 5, or as otherwise provided by
law, all other fines and forfeitures and all fees and statutory
court costs collected by the court administrator shall be paid
to the county treasurer of the county in which the funds were
collected who shall dispense them as provided by law. In a
county in a judicial district under section 480.181, subdivision
1, paragraph (b), as added in Laws 1999, chapter 216, article 7,
section 26, all other fines, forfeitures, fees, and statutory
court costs must be paid to the state treasurer for deposit in
the state treasury and credited to the general fund.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 18. Minnesota Statutes 2000, section 488A.03, is
amended by adding a subdivision to read:
Subd. 14. [REVENUES TO GENERAL FUND.] In a judicial
district under section 480.181, subdivision 1, paragraph (b),
the county's share of all fines, forfeitures, fees, and
statutory court costs must be paid to the state treasurer for
deposit in the state treasury and credited to the general fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 19. Minnesota Statutes 2000, section 488A.20, is
amended by adding a subdivision to read:
Subd. 8. [REVENUES TO GENERAL FUND.] In a judicial
district under section 480.181, subdivision 1, paragraph (b),
the county's share of all fines, forfeitures, fees, and
statutory court costs must be paid to the state treasurer for
deposit in the state treasury and credited to the general fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 20. Minnesota Statutes 2000, section 574.34,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL.] Fines and forfeitures not
specially granted or appropriated by law shall be paid into the
treasury of the county where they are incurred, except in a
county in a judicial district under section 480.181, subdivision
1, paragraph (b), as added in Laws 1999, chapter 216, article 7,
section 26, the fines and forfeitures must be deposited in the
state treasury and credited to the general fund.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 21. [TRANSITIONAL PROVISIONS.]
Subdivision 1. [TRANSFER OF PROPERTY.] The title to
personal property that is used by employees being transferred to
state employment under this article in the scope of their
employment is transferred to the state when they become state
employees.
Subd. 2. [RULES.] The supreme court, in consultation with
the conference of chief judges, may adopt rules to implement
this article.
Subd. 3. [BUDGETS.] Notwithstanding any law to the
contrary, the fiscal year budgets for the year in which the
state assumes the cost of court administration in the judicial
district for the court administrators' offices being transferred
to state employment under this article, including the number of
complement positions and salaries, must be submitted by the
court administrators to the supreme court. The budgets must
include the current levels of funding and positions at the time
of submission as well as any requests for increases in funding
and positions.
[EFFECTIVE DATE.] This section is effective July 1, 2003,
in the second and fourth districts; July 1, 2004, in the first
and third districts; and July 1, 2005, in the sixth and tenth
districts.
Sec. 22. [APPROPRIATION.]
(a) The supreme court general fund appropriation base is
increased by $39,240,000 in fiscal year 2004 and by an
additional $17,316,000 in fiscal year 2005. In fiscal years
2006 and 2007 the supreme court may request additional base
adjustments to reflect the transfer of the remaining judicial
districts.
(b) $8,701,253 is appropriated to the supreme court from
the general fund in each of fiscal years 2002 and 2003 to be
used to pay the costs of mandated court services assumed by the
state under Minnesota Statutes, section 480.183, subdivision 1.
(c) For each of fiscal years 2004 and 2005, $1,700,000 is
appropriated from the general fund to the supreme court to fund
court takeover equity adjustments. These amounts must be added
to the court base budget in subsequent fiscal years.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 6
MINERALS TAXES
Section 1. Minnesota Statutes 2000, section 116J.424, is
amended to read:
116J.424 [IRRRB CONTRIBUTION.]
The commissioner of the iron range resources and
rehabilitation board with approval of the board shall provide an
equal match for any loan or equity investment made for a
facility located in the tax relief area defined in section
273.134, paragraph (b), by the Minnesota minerals 21st century
fund created by section 116J.423. The match may be in the form
of a loan or equity investment, notwithstanding whether the fund
makes a loan or equity investment. The state shall not acquire
an equity interest because of an equity investment or loan by
the board and the board at its sole discretion shall decide what
interest it acquires in a project. The commissioner of trade
and economic development may require a commitment from the board
to make the match prior to disbursing money from the fund.
Sec. 2. Minnesota Statutes 2000, section 126C.21,
subdivision 4, is amended to read:
Subd. 4. [TACONITE DEDUCTIONS.] (1) Notwithstanding any
provisions of any other law to the contrary, the adjusted net
tax capacity used in calculating general education aid may
include only that property that is currently taxable in the
district.
(2) For districts that received payments under sections
298.018; 298.24 to 298.28; 298.34 to 298.39; 298.391 to 298.396;
and 298.405;, or any law imposing a tax upon severed mineral
values, or recognized revenue pursuant to section 477A.15; the
general education aid must be reduced in the final adjustment
payment by the difference between the dollar amount of the
payments received pursuant to those sections, or revenue
recognized pursuant to section 477A.15 in the fiscal year to
which the final adjustment is attributable and the amount that
was calculated, pursuant to section 126C.48, subdivision 8, as a
reduction of the levy attributable to the fiscal year to which
the final adjustment is attributable. If the final adjustment
of a district's general education aid for a fiscal year is a
negative amount because of this clause, the next fiscal year's
general education aid to that district must be reduced by this
negative amount in the following manner: there must be withheld
from each scheduled general education aid payment due the
district in such fiscal year, 15 percent of the total negative
amount, until the total negative amount has been withheld. The
amount reduced from general education aid pursuant to this
clause must be recognized as revenue in the fiscal year to which
the final adjustment payment is attributable.
[EFFECTIVE DATE.] This section is effective for aids
payable in the 2002-2003 school year.
Sec. 3. Minnesota Statutes 2000, section 126C.48,
subdivision 8, is amended to read:
Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1)
Reductions in levies pursuant to sections 126C.48, subdivision
1, and 273.138, must be made prior to the reductions in clause
(2).
(2) Notwithstanding any other law to the contrary,
districts which received payments pursuant to sections 298.018;
298.24 to 298.28, except an amount distributed under section
298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to
298.39; 298.391 to 298.396; 298.405; and any law imposing a tax
upon severed mineral values, or recognized revenue pursuant to
section 477A.15; must not include a portion of these aids in
their permissible levies pursuant to those sections, but instead
must reduce the permissible levies authorized by this chapter
and chapters 120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A
by the greater of the following:
(a) an amount equal to 50 percent of the total dollar
amount of the payments received pursuant to those sections or
revenue recognized pursuant to section 477A.15 in the previous
fiscal year; or
(b) an amount equal to the total dollar amount of the
payments received pursuant to those sections or revenue
recognized pursuant to section 477A.15 in the previous fiscal
year less the product of the same dollar amount of payments or
revenue times five percent.
(3) No reduction pursuant to this subdivision shall reduce
the levy made by the district pursuant to section 126C.13, to an
amount less than the amount raised by a levy of a net tax rate
of 6.82 percent times the adjusted net tax capacity for taxes
payable in 1990 and thereafter of that district for the
preceding year as determined by the commissioner. The amount of
any increased levy authorized by referendum pursuant to section
126C.17, subdivision 9, shall not be reduced pursuant to this
subdivision. The amount of any levy authorized by section
126C.43, to make payments for bonds issued and for interest
thereon, shall not be reduced pursuant to this subdivision.
(4) Before computing the reduction pursuant to this
subdivision of the health and safety levy authorized by sections
123B.57 and 126C.40, subdivision 5, the commissioner shall
ascertain from each affected school district the amount it
proposes to levy under each section or subdivision. The
reduction shall be computed on the basis of the amount so
ascertained.
(5) Notwithstanding any law to the contrary, any amounts
received by districts in any fiscal year pursuant to sections
298.018; 298.24 to 298.28; 298.34 to 298.39; 298.391 to 298.396;
298.405; or any law imposing a tax on severed mineral values;
and not deducted from general education aid pursuant to section
126C.21, subdivision 4, clause (2), and not applied to reduce
levies pursuant to this subdivision shall be paid by the
district to the St. Louis county auditor in the following amount
by March 15 of each year, the amount required to be subtracted
from the previous fiscal year's general education aid pursuant
to section 126C.21, subdivision 4, which is in excess of the
general education aid earned for that fiscal year. The county
auditor shall deposit any amounts received pursuant to this
clause in the St. Louis county treasury for purposes of paying
the taconite homestead credit as provided in section 273.135.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2001 for taxes payable in 2002.
Sec. 4. Minnesota Statutes 2000, section 273.134, is
amended to read:
273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA;
DEFINITIONS.]
(a) For purposes of this section and section 273.135,
"municipality" means any city, however organized, or town, and
the applicable assessment date is the date as of which property
is listed and assessed for the tax in question.
For the purposes of section 273.135, "tax relief area"
means the geographic area contained, within the boundaries of a
school district on January 2, 2000, which contains a
municipality which meets the following qualifications:
(1) it is a municipality in which the assessed valuation of
unmined iron ore on May 1, 1941, was not less than 40 percent of
the assessed valuation of all real property; or
(2) it is a municipality in which, on January 1, 1977 or
the applicable assessment date, there is a taconite
concentrating plant or where taconite is mined or quarried or
where there is located an electric generating plant which
qualifies as a taconite facility.
For purposes of this paragraph, a "tax relief area" does
not include a school district whose boundaries are more than 20
miles from a taconite mine or plant or in which the assessed
valuation of unmined iron ore on May 1, 1941, was less than 40
percent of the assessed valuation of all real property.
(b) For purposes of section 273.1391, subdivision 2,
paragraph (c), and chapter 298, "tax relief area" means the
geographic area contained within the boundaries of a school
district which contains a municipality that meets the following
qualifications:
(1) it is a municipality in which the assessed valuation of
unmined iron ore on May 1, 1941, was not less than 40 percent of
the assessed valuation of all real property; or
(2) it is a municipality in which, on January 1, 1977, or
the applicable assessment date, there is a taconite
concentrating plant or where taconite is mined or quarried or
where there is located an electric generating plant which
qualifies as a taconite facility.
[EFFECTIVE DATE.] This section is effective for taxes and
aids payable and expenditures authorized in 2002 and thereafter.
Sec. 5. Minnesota Statutes 2000, section 273.135,
subdivision 1, is amended to read:
Subdivision 1. The property tax to be paid in respect to
property taxable within a tax relief area as defined in section
273.134, paragraph (a), on homestead property, as otherwise
determined by law and regardless of the market value of the
property, for all purposes shall be reduced in the amount
prescribed by subdivision 2, subject to the limitations
contained therein.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 6. Minnesota Statutes 2000, section 273.135,
subdivision 2, is amended to read:
Subd. 2. The amount of the reduction authorized by
subdivision 1 shall be:
(a) In the case of property located within a tax relief
area as defined under section 273.134, paragraph (a), that is
within the boundaries of a municipality which meets the
qualifications prescribed in section 273.134, paragraph (a), 66
percent of the tax, provided that the reduction shall not exceed
the maximum amounts specified in clause paragraph (c).
(b) In the case of property located within the boundaries
of a school district which qualifies as a tax relief area under
section 273.134, paragraph (a), but which is outside the
boundaries of a municipality which meets the qualifications
prescribed in section 273.134, paragraph (a), 57 percent of the
tax, provided that the reduction shall not exceed the maximum
amounts specified in clause paragraph (c).
(c) The maximum reduction of the tax is $315.10 on property
described in clause paragraph (a) and $289.80 on property
described in clause paragraph (b).
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 7. Minnesota Statutes 2000, section 273.136,
subdivision 2, is amended to read:
Subd. 2. The commissioner of revenue shall determine, not
later than April 1 of each year, the amount of reduction
resulting from section 273.135 in each county containing a tax
relief area as defined by section 273.134, paragraph (b), basing
determinations on a review of abstracts of tax lists submitted
by the county auditors pursuant to section 275.29. The
commissioner may make changes in the abstracts of tax lists as
deemed necessary. The commissioner of revenue, after such
review, shall submit to the St. Louis county auditor, on or
before April 15, the amount of the first half payment payable
hereunder and on or before September 15 the amount of the second
half payment.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 8. Minnesota Statutes 2000, section 273.1391,
subdivision 2, is amended to read:
Subd. 2. The amount of the reduction authorized by
subdivision 1 shall be:
(a) In the case of property located within a school
district which does not meet the qualifications of section
273.134 as a tax relief area, but which is located in a county
with a population of less than 100,000 in which taconite is
mined or quarried and wherein a school district is located which
does meet the qualifications of a tax relief area, and provided
that at least 90 percent of the area of the school district
which does not meet the qualifications of section 273.134 lies
within such county, 57 percent of the tax on qualified property
located in the school district that does not meet the
qualifications of section 273.134, provided that the amount of
said reduction shall not exceed the maximum amounts specified in
clause (c) paragraph (d). The reduction provided by this clause
shall only be applicable to property located within the
boundaries of the county described therein.
(b) In the case of property located within a school
district which does not meet the qualifications of section
273.134 as a tax relief area, but which is located in a school
district in a county containing a city of the first class and a
qualifying municipality, but not in a school district containing
a city of the first class or adjacent to a school district
containing a city of the first class unless the school district
so adjacent contains a qualifying municipality, 57 percent of
the tax, but not to exceed the maximums specified in clause
(c) paragraph (d).
(c) In the case of property located within the boundaries
of a municipality that meets the qualifications in section
273.134, paragraph (b), but not the qualifications in section
273.134, paragraph (a), 66 percent of the tax, provided that the
reduction shall not exceed $315.10. In the case of property
located within the boundaries of a school district which
qualifies as a tax relief area under section 273.134, paragraph
(b), but does not qualify as a tax relief area under section
273.134, paragraph (a), but which is outside the boundaries of a
municipality which meets the qualifications of the preceding
sentence, 57 percent of the tax, provided that the reduction
shall not exceed the maximum amounts specified in paragraph (d).
(d) Except as otherwise provided in this section, the
maximum reduction of the tax is $289.80.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 9. Minnesota Statutes 2000, section 273.1391,
subdivision 3, is amended to read:
Subd. 3. Not later than December 1, each county auditor
having jurisdiction over one or more tax relief areas defined in
subdivision 2 shall certify to the commissioner of revenue an
estimate of the total amount of the reduction, determined under
subdivision 2, in taxes payable the next succeeding year with
respect to all tax relief areas in the auditor's county. The
commissioner shall make payments to the county by May 15 and
October 15 annually at the times provided in section 477A.015.
The county treasurer shall distribute as part of the May and
October settlements the funds received from the commissioner.
[EFFECTIVE DATE.] This section is effective for payments in
2002 and thereafter.
Sec. 10. Minnesota Statutes 2000, section 276A.01,
subdivision 2, is amended to read:
Subd. 2. [AREA.] "Area" means the territory included
within all tax relief areas defined in section 273.134,
paragraph (b).
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 11. Minnesota Statutes 2000, section 298.018,
subdivision 1, is amended to read:
Subdivision 1. [WITHIN TACONITE TAX RELIEF AREA.] The
proceeds of the tax paid under sections 298.015 to 298.017 on
minerals and energy resources mined or extracted within the
taconite tax relief area defined in section 273.134, paragraph
(b), shall be allocated as follows:
(1) five percent to the city or town within which the
minerals or energy resources are mined or extracted;
(2) ten percent to the taconite municipal aid account to be
distributed as provided in section 298.282;
(3) ten percent to the school district within which the
minerals or energy resources are mined or extracted;
(4) 20 percent to a group of school districts comprised of
those school districts wherein the mineral or energy resource
was mined or extracted or in which there is a qualifying
municipality as defined by section 273.134, paragraph (b), in
direct proportion to school district indexes as follows: for
each school district, its pupil units determined under section
126C.05 for the prior school year shall be multiplied by the
ratio of the average adjusted net tax capacity per pupil unit
for school districts receiving aid under this clause as
calculated pursuant to chapters 122A, 126C, and 127A for the
school year ending prior to distribution to the adjusted net tax
capacity per pupil unit of the district. Each district shall
receive that portion of the distribution which its index bears
to the sum of the indices for all school districts that receive
the distributions;
(5) 20 percent to the county within which the minerals or
energy resources are mined or extracted;
(6) 20 percent to St. Louis county acting as the counties'
fiscal agent to be distributed as provided in sections 273.134
to 273.136;
(7) five percent to the iron range resources and
rehabilitation board for the purposes of section 298.22;
(8) five percent to the northeast Minnesota economic
protection trust fund; and
(9) five percent to the taconite environmental protection
fund.
The proceeds of the tax shall be distributed on July 15
each year.
Sec. 12. Minnesota Statutes 2000, section 298.018,
subdivision 2, is amended to read:
Subd. 2. [OUTSIDE TACONITE TAX RELIEF AREA.] The proceeds
of the tax paid under sections 298.015 to 298.017 on minerals
and energy resources mined or extracted outside of the taconite
tax relief area defined in section 273.134, paragraph (b), shall
be deposited in the general fund.
Sec. 13. Minnesota Statutes 2000, section 298.17, is
amended to read:
298.17 [OCCUPATION TAXES TO BE APPORTIONED.]
All occupation taxes paid by persons, copartnerships,
companies, joint stock companies, corporations, and
associations, however or for whatever purpose organized, engaged
in the business of mining or producing iron ore or other ores,
when collected shall be apportioned and distributed in
accordance with the Constitution of the state of Minnesota,
article X, section 3, in the manner following: 90 percent shall
be deposited in the state treasury and credited to the general
fund of which four-ninths shall be used for the support of
elementary and secondary schools; and ten percent of the
proceeds of the tax imposed by this section shall be deposited
in the state treasury and credited to the general fund for the
general support of the university. Of the moneys apportioned to
the general fund by this section there is annually appropriated
and credited to the iron range resources and rehabilitation
board account in the special revenue fund an amount equal to
that which would have been generated by a 1.5 cent tax imposed
by section 298.24 on each taxable ton produced in the preceding
calendar year, to be expended for the purposes of section
298.22. The money appropriated pursuant to this section shall
be used (1) to provide environmental development grants to local
governments located within any county in region 3 as defined in
governor's executive order number 60, issued on June 12, 1970,
which does not contain a municipality qualifying pursuant to
section 273.134, paragraph (b), or (2) to provide economic
development loans or grants to businesses located within any
such county, provided that the county board or an advisory group
appointed by the county board to provide recommendations on
economic development shall make recommendations to the iron
range resources and rehabilitation board regarding the loans.
Payment to the iron range resources and rehabilitation board
account shall be made by May 15 annually.
Of the money allocated to Koochiching county, one-third
must be paid to the Koochiching county economic development
commission.
Sec. 14. Minnesota Statutes 2000, section 298.22,
subdivision 2, is amended to read:
Subd. 2. [IRON RANGE RESOURCES AND REHABILITATION BOARD.]
There is hereby created the iron range resources and
rehabilitation board, consisting of 13 members, five of whom are
state senators appointed by the subcommittee on committees of
the rules committee of the senate, and five of whom are
representatives, appointed by the speaker of the house of
representatives. The remaining members shall be appointed one
each by the senate majority leader, the speaker of the house of
representatives, and the governor and must be nonlegislators who
reside in a tax relief area as defined in section 273.134,
paragraph (b). The members shall be appointed in January of
every odd-numbered year, except that the initial nonlegislator
members shall be appointed by July 1, 1999, and shall serve
until January of the next odd-numbered year. Vacancies on the
board shall be filled in the same manner as the original members
were chosen. At least a majority of the legislative members of
the board shall be elected from state senatorial or legislative
districts in which over 50 percent of the residents reside
within a tax relief area as defined in section 273.134,
paragraph (b). All expenditures and projects made by the
commissioner of iron range resources and rehabilitation shall be
consistent with the priorities established in subdivision 8 and
shall first be submitted to the iron range resources and
rehabilitation board for approval by a majority of the board of
expenditures and projects for rehabilitation purposes as
provided by this section, and the method, manner, and time of
payment of all funds proposed to be disbursed shall be first
approved or disapproved by the board. The board shall
biennially make its report to the governor and the legislature
on or before November 15 of each even-numbered year. The
expenses of the board shall be paid by the state from the funds
raised pursuant to this section.
Sec. 15. Minnesota Statutes 2000, section 298.22, is
amended by adding a subdivision to read:
Subd. 8. [SPENDING PRIORITY.] In making or approving any
expenditures on programs or projects, the commissioner and the
board shall give the highest priority to programs and projects
that target relief to those areas of the taconite tax relief
area as defined in section 273.134, paragraph (b), that have the
largest percentages of job losses and population losses directly
attributable to the economic downturn in the taconite industry
since the 1980s. The commissioner and the board shall compare
the 1980 population and employment figures with the 2000
population and employment figures, and shall specifically
consider the job losses in 2000 and 2001 resulting from the
closure of LTV Steel Mining Company, in making or approving
expenditures consistent with this subdivision, as well as the
areas of residence of persons who suffered job loss for which
relief is to be targeted under this subdivision. This
subdivision supersedes any other conflicting provisions of law
and does not preclude the commissioner and the board from making
expenditures for programs and projects in other areas.
Sec. 16. Minnesota Statutes 2000, section 298.2211,
subdivision 2, is amended to read:
Subd. 2. [AREA OF OPERATION.] Projects undertaken,
developed, or financed pursuant to this section shall be located
within the tax relief area defined in section 273.134, paragraph
(b).
Sec. 17. Minnesota Statutes 2000, section 298.2213,
subdivision 3, is amended to read:
Subd. 3. [USE OF MONEY.] The money appropriated under this
section may be used to provide loans, loan guarantees, interest
buy-downs, and other forms of participation with private sources
of financing, provided that a loan to a private enterprise must
be for a principal amount not to exceed one-half of the cost of
the project for which financing is sought, and the rate of
interest on a loan must be no less than the lesser of eight
percent or the rate of interest that is three percentage points
less than a full faith and credit obligation of the United
States government of comparable maturity, at the time that the
loan is approved.
Money appropriated in this section must be expended only in
or for the benefit of the tax relief area defined in section
273.134, paragraph (b), and as otherwise provided in this
section.
Sec. 18. Minnesota Statutes 2000, section 298.2214,
subdivision 1, is amended to read:
Subdivision 1. [CREATION OF COMMITTEE; PURPOSE.] A
committee is created to advise the commissioner of iron range
resources and rehabilitation on providing higher education
programs in the taconite tax relief area defined in section
273.134, paragraph (b). The committee is subject to section
15.059.
Sec. 19. Minnesota Statutes 2000, section 298.223,
subdivision 1, is amended to read:
Subdivision 1. [CREATION; PURPOSES.] A fund called the
taconite environmental protection fund is created for the
purpose of reclaiming, restoring and enhancing those areas of
northeast Minnesota located within a tax relief area defined in
section 273.134, paragraph (b), that are adversely affected by
the environmentally damaging operations involved in mining
taconite and iron ore and producing iron ore concentrate and for
the purpose of promoting the economic development of northeast
Minnesota. The taconite environmental protection fund shall be
used for the following purposes:
(a) to initiate investigations into matters the iron range
resources and rehabilitation board determines are in need of
study and which will determine the environmental problems
requiring remedial action;
(b) reclamation, restoration, or reforestation of minelands
not otherwise provided for by state law;
(c) local economic development projects including
construction of sewer and water systems, and other public works
located within a tax relief area defined in section 273.134,
paragraph (b);
(d) monitoring of mineral industry related health problems
among mining employees.
Sec. 20. Minnesota Statutes 2000, section 298.225,
subdivision 1, is amended to read:
Subdivision 1. (a) The distribution of the taconite
production tax as provided in section 298.28, subdivisions 2 3
to 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the
following amounts:
(1) the amount distributed pursuant to this section and
section 298.28, with respect to 1983 production if the
production for the year prior to the distribution year is no
less than 42,000,000 taxable tons. If the production is less
than 42,000,000 taxable tons, the amount of the distributions
shall be reduced proportionately at the rate of two percent for
each 1,000,000 tons, or part of 1,000,000 tons by which the
production is less than 42,000,000 tons; or
(2)(i) for the distributions made pursuant to section
298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph
(c), 40.5 percent of the amount distributed pursuant to this
section and section 298.28, with respect to 1983 production;
(ii) for the distributions made pursuant to section 298.28,
subdivision 5, paragraphs (b) and (d), 75 percent of the amount
distributed pursuant to this section and section 298.28, with
respect to 1983 production.
(b) The distribution of the taconite production tax as
provided in section 298.28, subdivision 2, shall equal the
following amount:
(1) if the production for the year prior to the
distribution year is at least 42,000,000 taxable tons, the
amount distributed pursuant to this section and section 298.28
with respect to 1999 production; or
(2) if the production for the year prior to the
distribution year is less than 42,000,000 taxable tons, the
amount distributed pursuant to this section and section 298.28
with respect to 1999 production, reduced proportionately at the
rate of two percent for each 1,000,000 tons or part of 1,000,000
tons by which the production is less than 42,000,000 tons.
[EFFECTIVE DATE; RETROACTIVE APPLICATION.] This section is
effective for distributions in 2001 and thereafter. For the
distribution paid in February 2001 only, as soon as practicable
after the date of final enactment of this act, the commissioner
of iron range resources and rehabilitation shall pay two-thirds
of any additional amounts required under this section from the
taconite environmental protection fund and one-third of any
additional amounts required under this section from the
northeast Minnesota economic protection trust fund, as directed
by the commissioner of revenue.
Sec. 21. Minnesota Statutes 2000, section 298.227, is
amended to read:
298.227 [TACONITE ECONOMIC DEVELOPMENT FUND.]
An amount equal to that distributed pursuant to each
taconite producer's taxable production and qualifying sales
under section 298.28, subdivision 9a, shall be held by the iron
range resources and rehabilitation board in a separate taconite
economic development fund for each taconite and direct reduced
ore producer. Money from the fund for each producer shall be
released only on the written authorization of by the
commissioner after review by a joint committee consisting of an
equal number of representatives of the salaried employees and
the nonsalaried production and maintenance employees of that
producer. The district 11 director of the United States
Steelworkers of America, on advice of each local employee
president, shall select the employee members. In nonorganized
operations, the employee committee shall be elected by the
nonsalaried production and maintenance employees. Each
producer's joint committee may authorize release of The review
must be completed no later than six months after the producer
presents a proposal for expenditure of the funds to the
committee. The funds held pursuant to this section may be
released only for acquisition of equipment and facilities for
the producer or for research and development in Minnesota on new
mining, or taconite, iron, or steel production technology, but
only if the producer provides a matching expenditure to be used
for the same purpose of at least 50 percent of the distribution
based on 14.7 cents per ton beginning with distributions in
2002. Funds may be released only upon a majority vote of the
representatives of the committee. If a taconite production
facility is sold after operations at the facility had ceased,
any money remaining in the fund for the former producer may be
released to the purchaser of the facility on the terms otherwise
applicable to the former producer under this section. If a
producer fails to provide matching funds for a proposed
expenditure within six months after the commissioner approves
release of the funds, the funds are available for release to
another producer in proportion to the distribution provided and
under the conditions of this section. Any portion of the fund
which is not released by a joint committee the commissioner
within two years of its deposit in the fund shall be divided
between the taconite environmental protection fund created in
section 298.223 and the northeast Minnesota economic protection
trust fund created in section 298.292 for placement in their
respective special accounts. Two-thirds of the unreleased funds
shall be distributed to the taconite environmental protection
fund and one-third to the northeast Minnesota economic
protection trust fund.
Sec. 22. Minnesota Statutes 2000, section 298.24,
subdivision 1, is amended to read:
Subdivision 1. (a) For concentrate produced in 1999 2001,
2002, and 2003, 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 $2.103 per gross ton of
merchantable iron ore concentrate produced therefrom.
(b) For concentrates produced in 2000 2004 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" 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 $2.103 per gross ton of merchantable iron ore
concentrate produced shall be imposed.
(f) Consistent with the intent of this subdivision to
impose a tax based upon the weight of merchantable iron ore
concentrate, the commissioner of revenue may indirectly
determine the weight of merchantable iron ore concentrate
included in fluxed pellets by subtracting the weight of the
limestone, dolomite, or olivine derivatives or other basic flux
additives included in the pellets from the weight of the
pellets. For purposes of this paragraph, "fluxed pellets" are
pellets produced in a process in which limestone, dolomite,
olivine, or other basic flux additives are combined with
merchantable iron ore concentrate. No subtraction from the
weight of the pellets shall be allowed for binders, mineral and
chemical additives other than basic flux additives, or moisture.
(g)(1) Notwithstanding any other provision of this
subdivision, for the first two years of a plant's production of
direct reduced ore, no tax is imposed under this section. As
used in this paragraph, "direct reduced ore" is ore that results
in a product that has an iron content of at least 75 percent.
For the third year of a plant's production of direct reduced
ore, the rate to be applied to direct reduced ore is 25 percent
of the rate otherwise determined under this subdivision. For
the fourth such production year, the rate is 50 percent of the
rate otherwise determined under this subdivision; for the fifth
such production year, the rate is 75 percent of the rate
otherwise determined under this subdivision; and for all
subsequent production years, the full rate is imposed.
(2) Subject to clause (1), production of direct reduced ore
in this state is subject to the tax imposed by this section, but
if that production is not produced by a producer of taconite or
iron sulfides, the production of taconite or iron sulfides
consumed in the production of direct reduced iron in this state
is not subject to the tax imposed by this section on taconite or
iron sulfides.
Sec. 23. Minnesota Statutes 2000, section 298.28,
subdivision 3, is amended to read:
Subd. 3. [CITIES; TOWNS.] (a) 12.5 cents per taxable ton,
less any amount distributed under subdivision 8, and paragraph
(b), must be allocated to the taconite municipal aid account to
be distributed as provided in section 298.282.
(b) An amount must be allocated to towns or cities that is
annually certified by the county auditor of a county containing
a taconite tax relief area as defined in section 273.134,
paragraph (b), within which there is (1) an organized township
if, as of January 2, 1982, more than 75 percent of the assessed
valuation of the township consists of iron ore or (2) a city if,
as of January 2, 1980, more than 75 percent of the assessed
valuation of the city consists of iron ore.
(c) The amount allocated under paragraph (b) will be the
portion of a township's or city's certified levy equal to the
proportion of (1) the difference between 50 percent of January
2, 1982, assessed value in the case of a township and 50 percent
of the January 2, 1980, assessed value in the case of a city and
its current assessed value to (2) the sum of its current
assessed value plus the difference determined in (1), provided
that the amount distributed shall not exceed $55 per capita in
the case of a township or $75 per capita in the case of a city.
For purposes of this limitation, population will be determined
according to the 1980 decennial census conducted by the United
States Bureau of the Census. If the current assessed value of
the township exceeds 50 percent of the township's January 2,
1982, assessed value, or if the current assessed value of the
city exceeds 50 percent of the city's January 2, 1980, assessed
value, this paragraph shall not apply. For purposes of this
paragraph, "assessed value," when used in reference to years
other than 1980 or 1982, means the appropriate net tax
capacities multiplied by 10.2.
Sec. 24. Minnesota Statutes 2000, section 298.28,
subdivision 4, is amended to read:
Subd. 4. [SCHOOL DISTRICTS.] (a) 22.28 cents per taxable
ton plus the increase provided in paragraph (d) must be
allocated to qualifying school districts to be distributed,
based upon the certification of the commissioner of revenue,
under paragraphs (b) and (c), except as otherwise provided in
paragraph (f).
(b) 4.46 cents per taxable ton must be distributed to the
school districts in which the lands from which taconite was
mined or quarried were located or within which the concentrate
was produced. The distribution must be based on the
apportionment formula prescribed in subdivision 2.
(c)(i) 17.82 cents per taxable ton, less any amount
distributed under paragraph (e), shall be distributed to a group
of school districts comprised of those school districts in which
the taconite was mined or quarried or the concentrate produced
or in which there is a qualifying municipality as defined by
section 273.134, paragraph (b), in direct proportion to school
district indexes as follows: for each school district, its
pupil units determined under section 126C.05 for the prior
school year shall be multiplied by the ratio of the average
adjusted net tax capacity per pupil unit for school districts
receiving aid under this clause as calculated pursuant to
chapters 122A, 126C, and 127A for the school year ending prior
to distribution to the adjusted net tax capacity per pupil unit
of the district. Each district shall receive that portion of
the distribution which its index bears to the sum of the indices
for all school districts that receive the distributions.
(ii) Notwithstanding clause (i), each school district that
receives a distribution under sections 298.018; 298.23 to
298.28, exclusive of any amount received under this clause;
298.34 to 298.39; 298.391 to 298.396; 298.405; or any law
imposing a tax on severed mineral values that is less than the
amount of its levy reduction under section 126C.48, subdivision
8, for the second year prior to the year of the distribution
shall receive a distribution equal to the difference; the amount
necessary to make this payment shall be derived from
proportionate reductions in the initial distribution to other
school districts under clause (i).
(d) Any school district described in paragraph (c) where a
levy increase pursuant to section 126C.17, subdivision 9, is was
authorized by referendum for taxes payable in 2001, shall
receive a distribution from a fund that receives a distribution
in 1998 of 21.3 cents per ton. On July 15 of 1999, and each
year thereafter, the increase over the amount established for
the prior year shall be determined according to the increase in
the implicit price deflator as provided in section 298.24,
subdivision 1. Each district shall receive the product of:
(i) $175 times the pupil units identified in section
126C.05, subdivision 1, enrolled in the second previous year or
the 1983-1984 school year, whichever is greater, less the
product of 1.8 percent times the district's taxable net tax
capacity in the second previous year; times
(ii) the lesser of:
(A) one, or
(B) the ratio of the sum of the amount certified pursuant
to section 126C.17, subdivision 6, in the previous year, plus
the amount certified pursuant to section 126C.17, subdivision 8,
in the previous year, plus the referendum aid according to
section 126C.17, subdivision 7, for the current year, plus an
amount equal to the reduction under section 126C.17, subdivision
12, to the product of 1.8 percent times the district's taxable
net tax capacity in the second previous year.
If the total amount provided by paragraph (d) is
insufficient to make the payments herein required then the
entitlement of $175 per pupil unit shall be reduced uniformly so
as not to exceed the funds available. Any amounts received by a
qualifying school district in any fiscal year pursuant to
paragraph (d) shall not be applied to reduce general education
aid which the district receives pursuant to section 126C.13 or
the permissible levies of the district. Any amount remaining
after the payments provided in this paragraph shall be paid to
the commissioner of iron range resources and rehabilitation who
shall deposit the same in the taconite environmental protection
fund and the northeast Minnesota economic protection trust fund
as provided in subdivision 11.
Each district receiving money according to this paragraph
shall reserve $25 times the number of pupil units in the
district. It may use the money for early childhood programs or
for outcome-based learning programs that enhance the academic
quality of the district's curriculum. The outcome-based
learning programs must be approved by the commissioner of
children, families, and learning.
(e) There shall be distributed to any school district the
amount which the school district was entitled to receive under
section 298.32 in 1975.
(f) Effective with the distribution in 2003 and thereafter,
five percent of the distributions to school districts under
paragraphs (b), (c), and (e); subdivision 6, paragraph (c);
subdivision 11; and section 477A.15, shall be distributed to the
general fund. The remainder shall be distributed to the cities
and townships within each school district in the proportion that
their taxable net tax capacity within the school district bears
to the taxable net tax capacity of the school district for
property taxes payable in the year prior to distribution. No
city or township shall receive a distribution greater than its
levy for taxes payable in the year prior to distribution.
Sec. 25. Minnesota Statutes 2000, section 298.28,
subdivision 6, is amended to read:
Subd. 6. [PROPERTY TAX RELIEF.] (a) In 1999, 38.81 2002
and thereafter, 35.9 cents per taxable ton, less any amount
required to be distributed under paragraphs (b) and (c), and
less any amount required to be deducted under paragraph (d),
must be allocated to St. Louis county acting as the counties'
fiscal agent, to be distributed as provided in sections 273.134
to 273.136.
(b) If an electric power plant owned by and providing the
primary source of power for a taxpayer mining and concentrating
taconite is located in a county other than the county in which
the mining and the concentrating processes are conducted, .1875
cent per taxable ton of the tax imposed and collected from such
taxpayer shall be paid to the county.
(c) If an electric power plant owned by and providing the
primary source of power for a taxpayer mining and concentrating
taconite is located in a school district other than a school
district in which the mining and concentrating processes are
conducted, .7282 cent per taxable ton of the tax imposed and
collected from the taxpayer shall be paid to the school district.
(d) Two cents per taxable ton must be deducted from the
amount allocated to the St. Louis county auditor under paragraph
(a).
[EFFECTIVE DATE.] This section is effective for
distributions in 2002 and thereafter.
Sec. 26. Minnesota Statutes 2000, section 298.28,
subdivision 7, is amended to read:
Subd. 7. [IRON RANGE RESOURCES AND REHABILITATION BOARD.]
For the 1998 distribution, 6.5 cents per taxable ton shall be
paid to the iron range resources and rehabilitation board for
the purposes of section 298.22. That amount shall be increased
in 1999 and subsequent years in the same proportion as the
increase in the implicit price deflator as provided in section
298.24, subdivision 1. The amount distributed pursuant to this
subdivision shall be expended within or for the benefit of a tax
relief area defined in section 273.134, paragraph (b). No part
of the fund provided in this subdivision may be used to provide
loans for the operation of private business unless the loan is
approved by the governor.
Sec. 27. Minnesota Statutes 2000, section 298.28,
subdivision 9a, is amended to read:
Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a)
15.4 30.1 cents per ton for distributions in 1999, 2000, 2001,
and 2002 and thereafter must be paid to the taconite economic
development fund. No distribution shall be made under this
paragraph in any year in which total industry production falls
below 30 million tons.
(b) An amount equal to 50 percent of the tax under section
298.24 for concentrate sold in the form of pellet chips and
fines not exceeding 5/16 inch in size and not including crushed
pellets shall be paid to the taconite economic development
fund. The amount paid shall not exceed $700,000 annually for
all companies. If the initial amount to be paid to the fund
exceeds this amount, each company's payment shall be prorated so
the total does not exceed $700,000.
[EFFECTIVE DATE.] This section is effective for
distribution in 2002 and thereafter upon enactment of section 39.
Sec. 28. Minnesota Statutes 2000, section 298.28,
subdivision 10, is amended to read:
Subd. 10. [INCREASE.] Beginning with distributions in
2000, the amounts amount determined under subdivisions 6,
paragraph (a), and subdivision 9 shall be increased in the same
proportion as the increase in the implicit price deflator as
provided in section 298.24, subdivision 1. Beginning with
distributions in 2003, the amount determined under subdivision
6, paragraph (a), shall be increased in the same proportion as
the increase in the implicit price deflator as provided in
section 298.24, subdivision 1.
The distributions per ton determined under subdivisions 5,
paragraphs (b) and (d), and 6, paragraph (b), for distribution
in 1988 and subsequent years shall be the distribution per ton
determined for distribution in 1987. The distribution per ton
under subdivision 6, paragraph (c), for distribution in 2000 and
subsequent years shall be 81 percent of the distribution per ton
determined for distribution in 1987.
[EFFECTIVE DATE.] This section is effective for
distributions in 2002 and thereafter.
Sec. 29. Minnesota Statutes 2000, section 298.282,
subdivision 1, is amended to read:
Subdivision 1. The amount deposited with the county as
provided in section 298.28, subdivision 3, shall must be
distributed as provided by this section, among the
municipalities comprising a tax relief area under section
273.134, paragraph (b), as amended hereby, each being herein
referred to in this section as a qualifying municipality.
Sec. 30. Minnesota Statutes 2000, section 298.292,
subdivision 2, is amended to read:
Subd. 2. [USE OF MONEY.] Money in the northeast Minnesota
economic protection trust fund may be used for the following
purposes:
(1) to provide loans, loan guarantees, interest buy-downs
and other forms of participation with private sources of
financing, but a loan to a private enterprise shall be for a
principal amount not to exceed one-half of the cost of the
project for which financing is sought, and the rate of interest
on a loan shall be no less than the lesser of eight percent or
an interest rate three percentage points less than a full faith
and credit obligation of the United States government of
comparable maturity, at the time that the loan is approved;
(2) to fund reserve accounts established to secure the
payment when due of the principal of and interest on bonds
issued pursuant to section 298.2211;
(3) to pay in periodic payments or in a lump sum payment
any or all of the interest on bonds issued pursuant to chapter
474 for the purpose of constructing, converting, or retrofitting
heating facilities in connection with district heating systems
or systems utilizing alternative energy sources; and
(4) to invest in a venture capital fund or enterprise that
will provide capital to other entities that are engaging in, or
that will engage in, projects or programs that have the purposes
set forth in subdivision 1. No investments may be made in a
venture capital fund or enterprise unless at least two other
unrelated investors make investments of at least $500,000 in the
venture capital fund or enterprise, and the investment by the
northeast Minnesota economic protection trust fund may not
exceed the amount of the largest investment by an unrelated
investor in the venture capital fund or enterprise. For
purposes of this subdivision, an "unrelated investor" is a
person or entity that is not related to the entity in which the
investment is made or to any individual who owns more than 40
percent of the value of the entity, in any of the following
relationships: spouse, parent, child, sibling, employee, or
owner of an interest in the entity that exceeds ten percent of
the value of all interests in it. For purposes of determining
the limitations under this clause, the amount of investments
made by an investor other than the northeast Minnesota economic
protection trust fund is the sum of all investments made in the
venture capital fund or enterprise during the period beginning
one year before the date of the investment by the northeast
Minnesota economic protection trust fund.
Money from the trust fund shall be expended only in or for
the benefit of the tax relief area defined in section 273.134,
paragraph (b).
Sec. 31. Minnesota Statutes 2000, section 298.293, is
amended to read:
298.293 [EXPENDING FUNDS.]
The funds provided by section 298.28, subdivision 11,
relating to the northeast Minnesota economic protection trust
fund, except money expended pursuant to Laws 1982, Second
Special Session, chapter 2, sections 8 to 14, shall be expended
only in an amount that does not exceed the sum of the net
interest, dividends, and earnings arising from the investment of
the trust for the preceding 12 calendar months from the date of
the authorization plus, for fiscal year 1983, $10,000,000 from
the corpus of the fund. The funds may be spent only in or for
the benefit of those areas that are tax relief areas as defined
in section 273.134, paragraph (b). If during any year the
taconite property tax account under sections 273.134 to 273.136
does not contain sufficient funds to pay the property tax relief
specified in Laws 1977, chapter 423, article X, section 4, there
is appropriated from this trust fund to the relief account
sufficient funds to pay the relief specified in Laws 1977,
chapter 423, article X, section 4.
Sec. 32. Minnesota Statutes 2000, section 298.296,
subdivision 2, is amended to read:
Subd. 2. [EXPENDITURE OF FUNDS.] Before January 1,
2002 2003, funds may be expended on projects and for
administration of the trust fund only from the net interest,
earnings, and dividends arising from the investment of the trust
at any time, including net interest, earnings, and dividends
that have arisen prior to July 13, 1982, plus $10,000,000 made
available for use in fiscal year 1983, except that any amount
required to be paid out of the trust fund to provide the
property tax relief specified in Laws 1977, chapter 423, article
X, section 4, and to make school bond payments and payments to
recipients of taconite production tax proceeds pursuant to
section 298.225, may be taken from the corpus of the trust.
Additionally, upon recommendation by the board, up to
$13,000,000 from the corpus of the trust may be made available
for use as provided in subdivision 4, and up to $10,000,000 from
the corpus of the trust may be made available for use as
provided in section 298.2961. On and after January 1, 2002
2003, funds may be expended on projects and for administration
from any assets of the trust. Annual administrative costs, not
including detailed engineering expenses for the projects, shall
not exceed five percent of the net interest, dividends, and
earnings arising from the trust in the preceding fiscal year.
Principal and interest received in repayment of loans made
pursuant to this section, and earnings on other investments made
under section 298.292, subdivision 2, clause (4), shall be
deposited in the state treasury and credited to the trust.
These receipts are appropriated to the board for the purposes of
sections 298.291 to 298.298.
Sec. 33. Minnesota Statutes 2000, section 298.2961, is
amended to read:
298.2961 [PRODUCER GRANTS.]
Subdivision 1. [APPROPRIATION.] (a) $10,000,000 is
appropriated from the northeast Minnesota economic protection
trust fund to a special account in the taconite area
environmental protection fund for grants or loans to producers
on a project-by-project basis as provided in this section.
(b) The proceeds of the tax designated under section
298.28, subdivision 9b, are appropriated for grants and loans to
producers on a project-by-project basis as provided in this
section.
Subd. 2. [PROJECTS; APPROVAL.] (a) Projects funded must be
for:
(1) environmentally unique reclamation projects; or
(2) pit or plant repairs, expansions, or modernizations
other than for a value added iron products plant that extend the
life of the plant; or
(3) haulage trucks and equipment and mining shovels.
(b) To be proposed by the board, a project must be approved
by at least eight iron range resources and rehabilitation board
members. The money for a project may be spent only upon
approval of the project by the governor. The board may submit
supplemental projects for approval at any time.
(c) The board may require that it receive an equity
percentage in any project to which it contributes under this
section.
Sec. 34. Minnesota Statutes 2000, section 298.298, is
amended to read:
298.298 [LONG-RANGE PLAN.]
Consistent with the policy established in sections 298.291
to 298.298, the iron range resources and rehabilitation board
shall prepare and present to the governor and the legislature by
January 1, 1984 a long-range plan for the use of the northeast
Minnesota economic protection trust fund for the economic
development and diversification of the tax relief area defined
in section 273.134, paragraph (b). The iron range resources and
rehabilitation board shall, before November 15 of each even
numbered year, prepare a report to the governor and legislature
updating and revising this long-range plan and reporting on the
iron range resources and rehabilitation board's progress on
those matters assigned to it by law. After January 1, 1984, no
project shall be approved by the iron range resources and
rehabilitation board which is not consistent with the goals and
objectives established in the long-range plan.
Sec. 35. Minnesota Statutes 2000, section 298.75,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] Except as may otherwise be
provided, the following words, when used in this section, shall
have the meanings herein ascribed to them.
(1) "Aggregate material" shall mean nonmetallic natural
mineral aggregate including, but not limited to sand, silica
sand, gravel, building stone, crushed rock, limestone, and
granite, and borrow, but only if the borrow is transported on a
public road, street, or highway. Aggregate material shall not
include dimension stone and dimension granite. Aggregate
material must be measured or weighed after it has been extracted
from the pit, quarry, or deposit.
(2) "Person" shall mean any individual, firm, partnership,
corporation, organization, trustee, association, or other entity.
(3) "Operator" shall mean any person engaged in the
business of removing aggregate material from the surface or
subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a
marketable product or service.
(4) "Extraction site" shall mean a pit, quarry, or deposit
containing aggregate material and any contiguous property to the
pit, quarry, or deposit which is used by the operator for
stockpiling the aggregate material.
(5) "Importer" shall mean any person who buys aggregate
material produced from a county not listed in paragraph (6) or
another state and causes the aggregate material to be imported
into a county in this state which imposes a tax on aggregate
material.
(6) "County" shall mean the counties of Pope, Stearns,
Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson,
Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay,
Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone,
Sibley, Hennepin, Washington, Chisago, and Ramsey. County also
means any other county whose board has voted after a public
hearing to impose the tax under this section and has notified
the commissioner of revenue of the imposition of the tax.
[EFFECTIVE DATE.] This section is effective August 1, 2001.
Sec. 36. Minnesota Statutes 2000, section 298.75,
subdivision 2, is amended to read:
Subd. 2. A county shall impose upon every importer and
operator a production tax equal up to ten cents per cubic yard
or up to seven cents per ton of aggregate material removed
except that the county board may decide not to impose this tax
if it determines that in the previous year operators removed
less than 20,000 tons or 14,000 cubic yards of aggregate
material from that county. The tax shall be imposed on
aggregate material produced in the county when the aggregate
material is transported from the extraction site or sold. When
aggregate material is stored in a stockpile within the state of
Minnesota and a public highway, road or street is not used for
transporting the aggregate material, the tax shall be imposed
either when the aggregate material is sold, or when it is
transported from the stockpile site, or when it is used from the
stockpile, whichever occurs first. The tax shall be imposed on
an importer when the aggregate material is imported into the
county that imposes the tax.
If the aggregate material is transported directly from the
extraction site to a waterway, railway, or another mode of
transportation other than a highway, road or street, the tax
imposed by this section shall be apportioned equally between the
county where the aggregate material is extracted and the county
to which the aggregate material is originally transported. If
that destination is not located in Minnesota, then the county
where the aggregate material was extracted shall receive all of
the proceeds of the tax.
[EFFECTIVE DATE.] This section is effective for aggregate
material sold, imported, transported, or used from a stockpile
after July 31, 2001.
Sec. 37. Minnesota Statutes 2000, section 471.58, is
amended to read:
471.58 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS;
MEMBERSHIP.]
For the purpose of providing an areawide approach to
problems which demand coordinated and cooperative actions and
which are common to those areas of northeast Minnesota affected
by operations involved in mining iron ore and taconite and
producing concentrate therefrom, and for the purpose of
promoting the general welfare and economic development of the
cities, towns and school districts within the iron ranges area
of northeast Minnesota, any city, town or school district in
which the net tax capacity consists in part of iron ore, or
lands containing taconite or semitaconite or which is located in
whole or part in the tax relief area defined by section 273.134,
paragraph (b), may pay annual dues in the range association of
municipalities and schools. The association may sue, be sued,
intervene and act in a civil action in which the outcome of the
action will have an effect upon the interest of any of its
members.
Sec. 38. [SPECIAL MUNICIPAL AID FOR TAXES PAYABLE IN 2002
ONLY.]
Subdivision 1. [QUALIFYING MUNICIPALITIES.] Municipalities
wholly or partially contained within a school district within
the taconite tax relief area defined in Minnesota Statutes,
section 273.134, paragraph (b), whose levy for taxes payable in
2001 was reduced under Minnesota Statutes, section 126C.48,
subdivision 8, are eligible for supplemental aid in calendar
year 2002 under this section. Each qualifying municipality is
eligible for aid equal to (i) the amount of the district's levy
reduction times (ii) the portion of the municipality's taxable
net tax capacity within the boundaries of the school district,
divided by (iii) the district's total taxable net tax capacity,
with all computations based on taxes payable in 2001. The
commissioner of revenue, in consultation with the commissioner
of children, families, and learning, shall make all necessary
calculations to determine the aid amounts under this section.
Subd. 2. [APPROPRIATION.] The amounts necessary to make
the payments required under this section are appropriated from
the taconite property tax relief account to the commissioner of
revenue in fiscal year 2003. Payments to qualifying
municipalities shall be made on the dates prescribed in
Minnesota Statutes, section 477A.015.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2002 only.
Sec. 39. [APPROPRIATION.]
The commissioner of revenue shall determine a state aid
amount equal to a tax of 33 cents per taxable ton of iron ore
concentrates for production year 2001 and 22 cents per taxable
ton of iron ore concentrates for production years 2002 and
thereafter. There is appropriated from the general fund to the
commissioner an amount equal to the state aid determined under
this section. It must be distributed under Minnesota Statutes,
section 298.28, as if the aid were production tax revenues.
ARTICLE 7
TAX ADMINISTRATION
Section 1. Minnesota Statutes 2000, section 16D.08,
subdivision 2, is amended to read:
Subd. 2. [POWERS.] (a) In addition to the collection
remedies available to private collection agencies in this state,
the commissioner, with legal assistance from the attorney
general, may utilize any statutory authority granted to a
referring agency for purposes of collecting debt owed to that
referring agency. The commissioner may also delegate to the
enterprise the tax collection remedies in sections 270.06,
clauses (7) and (17), excluding the power to subpoena witnesses;
270.66; 270.69, excluding subdivisions 7 and 13; 270.70,
excluding subdivision 14; 270.7001 to 270.72; and 290.92,
subdivision 23, except that a continuous wage levy under section
290.92, subdivision 23, is only effective for 70 days, unless no
competing wage garnishments, executions, or levies are served
within the 70-day period, in which case a wage levy is
continuous until a competing garnishment, execution, or levy is
served in the second or a succeeding 70-day period, in which
case a continuous wage levy is effective for the remainder of
that period. A debtor who qualifies for cancellation of
collection costs under section 16D.11, subdivision 3, clause
(1), can apply to the commissioner for reduction or release of a
continuous wage levy, if the debtor establishes that the debtor
needs all or a portion of the wages being levied upon to pay for
essential living expenses, such as food, clothing, shelter,
medical care, or expenses necessary for maintaining employment.
The commissioner's determination not to reduce or release a
continuous wage levy is appealable to district court. The word
"tax" or "taxes" when used in the tax collection statutes listed
in this subdivision also means debts referred under this chapter.
(b) For debts other than state taxes or, child support, or
student loans, before any of the tax collection remedies listed
in this subdivision can be used, except for the remedies in
section 270.06, clauses (7) and (17), if the referring agency
has not already obtained a judgment or filed a lien, the
commissioner must first obtain a judgment against the debtor.
For student loans when the referring agency has not obtained a
judgment or filed a lien, before using the tax collection
remedies listed in this subdivision, except for the remedies in
section 270.06, clauses (7) and (17), the commissioner shall
give the debtor 30 days' notice in writing, which may be served
in any manner permitted in section 270.68 for service of a
summons and complaint. The notice must advise the debtor of the
debtor's right to request that the commissioner commence a court
action, and that if no such request is made within 30 days after
service of the notice, the commissioner may use these tax
collection remedies. If a timely request is made, the
commissioner shall obtain a judgment before using these tax
collection remedies.
[EFFECTIVE DATE.] This section is effective for student
loans referred to the commissioner for collection on or after
July 1, 2001.
Sec. 2. Minnesota Statutes 2000, section 84.922, is
amended by adding a subdivision to read:
Subd. 11. [PROOF OF SALES TAX PAYMENT.] A person applying
for initial registration in Minnesota of an all-terrain vehicle
shall provide a purchaser's certificate showing a complete
description of the all-terrain vehicle, the seller's name and
address, the full purchase price of the all-terrain vehicle, and
the trade-in allowance, if any. The certificate also must
include information showing either that (1) the sales and use
tax under chapter 297A was paid, or (2) the purchase was exempt
from tax under chapter 297A. The certificate is not required if
the applicant provides a receipt, invoice, or other document
that shows the all-terrain vehicle was purchased from a retailer
maintaining a place of business in this state as defined in
section 297A.66, subdivision 1.
[EFFECTIVE DATE.] This section is effective for
registrations occurring on or after August 1, 2001.
Sec. 3. Minnesota Statutes 2000, section 144.3831,
subdivision 2, is amended to read:
Subd. 2. [COLLECTION AND PAYMENT OF FEE.] The public water
supply described in subdivision 1 shall:
(1) collect the fees assessed on its service connections;
(2) pay the department of revenue health an amount
equivalent to the fees based on the total number of service
connections. The service connections for each public water
supply described in subdivision 1 shall be verified every four
years by the department of health; and
(3) pay one-fourth of the total yearly fee to the
department of revenue health each calendar quarter. The first
quarterly payment is due on or before September 30, 1992. In
lieu of quarterly payments, a public water supply described in
subdivision 1 with fewer than 50 service connections may make a
single annual payment by June 30 each year, starting in 1993.
The fees payable to the department of revenue health shall be
deposited in the state treasury as nondedicated state government
special revenue fund revenues.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2000, section 270.06, is
amended to read:
270.06 [POWERS AND DUTIES.]
The commissioner of revenue shall:
(1) have and exercise general supervision over the
administration of the assessment and taxation laws of the state,
over assessors, town, county, and city boards of review and
equalization, and all other assessing officers in the
performance of their duties, to the end that all assessments of
property be made relatively just and equal in compliance with
the laws of the state;
(2) confer with, advise, and give the necessary
instructions and directions to local assessors and local boards
of review throughout the state as to their duties under the laws
of the state;
(3) direct proceedings, actions, and prosecutions to be
instituted to enforce the laws relating to the liability and
punishment of public officers and officers and agents of
corporations for failure or negligence to comply with the
provisions of the laws of this state governing returns of
assessment and taxation of property, and cause complaints to be
made against local assessors, members of boards of equalization,
members of boards of review, or any other assessing or taxing
officer, to the proper authority, for their removal from office
for misconduct or negligence of duty;
(4) require county attorneys to assist in the commencement
of prosecutions in actions or proceedings for removal,
forfeiture and punishment for violation of the laws of this
state in respect to the assessment and taxation of property in
their respective districts or counties;
(5) require town, city, county, and other public officers
to report information as to the assessment of property,
collection of taxes received from licenses and other sources,
and such other information as may be needful in the work of the
department of revenue, in such form and upon such blanks as the
commissioner may prescribe;
(6) require individuals, copartnerships, companies,
associations, and corporations to furnish information concerning
their capital, funded or other debt, current assets and
liabilities, earnings, operating expenses, taxes, as well as all
other statements now required by law for taxation purposes;
(7) subpoena witnesses, at a time and place reasonable
under the circumstances, to appear and give testimony, and to
produce books, records, papers and documents for inspection and
copying relating to any matter which the commissioner may have
authority to investigate or determine;
(8) issue a subpoena which does not identify the person or
persons with respect to whose liability the subpoena is issued,
but only if (a) the subpoena relates to the investigation of a
particular person or ascertainable group or class of persons,
(b) there is a reasonable basis for believing that such person
or group or class of persons may fail or may have failed to
comply with any law administered by the commissioner, (c) the
information sought to be obtained from the examination of the
records (and the identity of the person or persons with respect
to whose liability the subpoena is issued) is not readily
available from other sources, (d) the subpoena is clear and
specific as to the information sought to be obtained, and (e)
the information sought to be obtained is limited solely to the
scope of the investigation. Provided further that the party
served with a subpoena which does not identify the person or
persons with respect to whose tax liability the subpoena is
issued shall have the right, within 20 days after service of the
subpoena, to petition the district court for the judicial
district in which lies the county in which that party is located
for a determination as to whether the commissioner of revenue
has complied with all the requirements in (a) to (e), and thus,
whether the subpoena is enforceable. If no such petition is
made by the party served within the time prescribed, the
subpoena shall have the force and effect of a court order;
(9) cause the deposition of witnesses residing within or
without the state, or absent therefrom, to be taken, upon notice
to the interested party, if any, in like manner that depositions
of witnesses are taken in civil actions in the district court,
in any matter which the commissioner may have authority to
investigate or determine;
(10) investigate the tax laws of other states and countries
and to formulate and submit to the legislature such legislation
as the commissioner may deem expedient to prevent evasions of
assessment and taxing laws, and secure just and equal taxation
and improvement in the system of assessment and taxation in this
state;
(11) consult and confer with the governor upon the subject
of taxation, the administration of the laws in regard thereto,
and the progress of the work of the department of revenue, and
furnish the governor, from time to time, such assistance and
information as the governor may require relating to tax matters;
(12) transmit to the governor, on or before the third
Monday in December of each even-numbered year, and to each
member of the legislature, on or before November 15 of each
even-numbered year, the report of the department of revenue for
the preceding years, showing all the taxable property in the
state and the value of the same, in tabulated form;
(13) inquire into the methods of assessment and taxation
and ascertain whether the assessors faithfully discharge their
duties, particularly as to their compliance with the laws
requiring the assessment of all property not exempt from
taxation;
(14) administer and enforce the assessment and collection
of state taxes and fees, including the use of any remedy
available to nongovernmental creditors, and, from time to time,
make, publish, and distribute rules for the administration and
enforcement of assessments and fees administered by the
commissioner and state tax laws. The rules have the force of
law;
(15) prepare blank forms for the returns required by state
tax law and distribute them throughout the state, furnishing
them subject to charge on application;
(16) prescribe rules governing the qualification and
practice of agents, attorneys, or other persons representing
taxpayers before the commissioner. The rules may require that
those persons, agents, and attorneys show that they are of good
character and in good repute, have the necessary qualifications
to give taxpayers valuable services, and are otherwise competent
to advise and assist taxpayers in the presentation of their case
before being recognized as representatives of taxpayers. After
due notice and opportunity for hearing, the commissioner may
suspend and disbar bar from further practice before the
commissioner any person, agent, or attorney who is shown to be
incompetent or disreputable, who refuses to comply with the
rules, or who with intent to defraud, willfully or knowingly
deceives, misleads, or threatens a taxpayer or prospective
taxpayer, by words, circular, letter, or by advertisement. This
clause does not curtail the rights of individuals to appear in
their own behalf or partners or corporations' officers to appear
in behalf of their respective partnerships or corporations;
(17) appoint agents as the commissioner considers necessary
to make examinations and determinations. The agents have the
rights and powers conferred on the commissioner to subpoena,
examine, and copy books, records, papers, or memoranda, subpoena
witnesses, administer oaths and affirmations, and take
testimony. In addition to administrative subpoenas of the
commissioner and the agents, upon demand of the commissioner or
an agent, the court administrator of any district court shall
issue a subpoena for the attendance of a witness or the
production of books, papers, records, or memoranda before the
agent for inspection and copying. Disobedience of a court
administrator's subpoena shall be punished by the district court
of the district in which the subpoena is issued, or in the case
of a subpoena issued by the commissioner or an agent, by the
district court of the district in which the party served with
the subpoena is located, in the same manner as contempt of the
district court;
(18) appoint and employ additional help, purchase supplies
or materials, or incur other expenditures in the enforcement of
state tax laws as considered necessary. The salaries of all
agents and employees provided for in this chapter shall be fixed
by the appointing authority, subject to the approval of the
commissioner of administration;
(19) execute and administer any agreement with the
secretary of the treasury of the United States or a
representative of another state regarding the exchange of
information and administration of the tax laws;
(20) administer and enforce the provisions of sections
325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act;
(21) authorize the use of unmarked motor vehicles to
conduct seizures or criminal investigations pursuant to the
commissioner's authority; and
(22) exercise other powers and perform other duties
required of or imposed upon the commissioner of revenue by law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2000, section 270.60, is
amended by adding a subdivision to read:
Subd. 5. [FEES; APPROPRIATION.] (a) The commissioner may
enter into an agreement with the governing body of any federally
recognized Indian reservation in Minnesota concerning fees
administered by the commissioner that are paid by the tribe,
members of the tribe, or persons who conduct business with the
tribe, or otherwise imposed on on-reservation activities. The
agreement may provide for the refund or sharing of the fee. The
commissioner may make any payments required by the agreement
from the fees collected.
(b) Each head of an agency, board, or other governmental
entity that administers a program that is funded by fees
administered by the commissioner may sign an agreement entered
into by the commissioner under this subdivision. An agreement
is not valid until signed by the head of each agency, board, or
other governmental entity that administers a program funded by
the particular fee covered in an agreement and by the
commissioner of revenue.
(c) There is annually appropriated to the commissioner of
revenue from the funds for which the fees are collected the
amounts necessary to make payments as provided in this
subdivision.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to all fees administered
by the commissioner of revenue for which timely claims for
refund have been, or can be, filed.
Sec. 6. Minnesota Statutes 2000, section 270.70,
subdivision 13, is amended to read:
Subd. 13. [LEVY AND SALE BY SHERIFF.] If any tax payable
to the commissioner of revenue or to the department of revenue
is not paid as provided in subdivision 2, the commissioner may,
within five years after the date of assessment of the
tax, within the time periods provided in subdivision 1 for
collection of taxes, delegate the authority granted by
subdivision 1, by means of issuing a warrant to the sheriff of
any county of the state commanding the sheriff, as agent for the
commissioner, to levy upon and sell the real and personal
property of the person liable for the payment or collection of
the tax and to levy upon the rights to property of that person
within the county, or to levy upon and seize any property within
the county on which there is a lien provided in section 270.69,
and to return the warrant to the commissioner and pay to the
commissioner the money collected by virtue thereof by a time to
be therein specified not less than 60 days from the date of the
warrant. The sheriff shall proceed thereunder to levy upon and
seize any property of the person and to levy upon the rights to
property of the person within the county (except the person's
homestead or that property which is exempt from execution
pursuant to section 550.37), or to levy upon and seize any
property within the county on which there is a lien provided in
section 270.69. For purposes of the preceding sentence, the
term "tax" shall include any penalty, interest and costs
properly payable. The sheriff shall then sell so much of the
property levied upon as is required to satisfy the taxes,
interest, and penalties, together with the sheriff's costs; but
the sales, and the time and manner of redemption therefrom,
shall, to the extent not provided in sections 270.701 to
270.709, be governed by chapter 550. The proceeds of the sales,
less the sheriff's costs, shall be turned over to the
commissioner, who shall then apply the proceeds as provided in
section 270.708.
[EFFECTIVE DATE.] This section is effective the day
following final enactment for all taxes for which issuance of a
warrant under this subdivision has not been barred as of that
date.
Sec. 7. Minnesota Statutes 2000, section 270.73,
subdivision 1, is amended to read:
Subdivision 1. [POSTING, NOTICE.] Pursuant to the
authority to disclose under section 270B.12, subdivision 4, the
commissioner shall, by the 15th of each month, submit to the
commissioner of public safety a list of all taxpayers who are
required to pay, withhold, or collect the tax imposed by section
290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or
297A.02, or local sales and use tax payable to the commissioner
of revenue, or a local option tax administered and collected by
the commissioner of revenue, and who are ten days or more
delinquent in either filing a tax return or paying the tax.
The commissioner of revenue is under no obligation to list
a taxpayer whose business is inactive. At least ten days before
notifying the commissioner of public safety, the commissioner of
revenue shall notify the taxpayer of the intended action.
The commissioner of public safety shall post the list in
the same manner as provided in section 340A.318, subdivision 3.
The list will prominently show the date of posting. If a
taxpayer previously listed files all returns and pays all taxes
then due, the commissioner shall notify the commissioner of
public safety within two business days.
[EFFECTIVE DATE.] This section is effective for lists
submitted to the commissioner of public safety on or after the
day following final enactment.
Sec. 8. Minnesota Statutes 2000, section 270A.03,
subdivision 5, is amended to read:
Subd. 5. [DEBT.] "Debt" means a legal obligation of a
natural person to pay a fixed and certain amount of money, which
equals or exceeds $25 and which is due and payable to a claimant
agency. The term includes criminal fines imposed under section
609.10 or 609.125 and restitution. A debt may arise under a
contractual or statutory obligation, a court order, or other
legal obligation, but need not have been reduced to judgment.
A debt includes any legal obligation of a current recipient
of assistance which is based on overpayment of an assistance
grant where that payment is based on a client waiver or an
administrative or judicial finding of an intentional program
violation; or where the debt is owed to a program wherein the
debtor is not a client at the time notification is provided to
initiate recovery under this chapter and the debtor is not a
current recipient of food stamps, transitional child care, or
transitional medical assistance.
A debt does not include any legal obligation to pay a
claimant agency for medical care, including hospitalization if
the income of the debtor at the time when the medical care was
rendered does not exceed the following amount:
(1) for an unmarried debtor, an income of $6,400 $8,800 or
less;
(2) for a debtor with one dependent, an income
of $8,200 $11,270 or less;
(3) for a debtor with two dependents, an income
of $9,700 $13,330 or less;
(4) for a debtor with three dependents, an income of
$11,000 $15,120 or less;
(5) for a debtor with four dependents, an income
of $11,600 $15,950 or less; and
(6) for a debtor with five or more dependents, an income of
$12,100 $16,630 or less.
The income amounts in this subdivision shall be adjusted
for inflation for debts incurred in calendar years 1991 2001 and
thereafter. The dollar amount of each income level that applied
to debts incurred in the prior year shall be increased in the
same manner as provided in section 290.06, subdivision 2d, for
the expansion of the tax rate brackets 1f of the Internal
Revenue Code of 1986, as amended through December 31, 2000,
except that for the purposes of this subdivision the percentage
increase shall be determined from the year starting September 1,
1999, and ending August 31, 2000, as the base year for adjusting
for inflation for debts incurred after December 31, 2000.
Debt also includes an agreement to pay a MinnesotaCare
premium, regardless of the dollar amount of the premium
authorized under section 256L.15, subdivision 1a.
[EFFECTIVE DATE.] This section is effective for debts
incurred after December 31, 2000.
Sec. 9. Minnesota Statutes 2000, section 270A.11, is
amended to read:
270A.11 [DATA PRIVACY.]
Private and confidential data on individuals may be
exchanged among the department, the taxpayer's rights advocate,
the attorney general, the claimant agency, and the debtor as
necessary to accomplish and effectuate the intent of sections
270A.01 to 270A.12, as provided by section 13.05, subdivision 4,
clause (b). The department may disclose to the claimant agency
only the debtor's name, address, social security number and the
amount of the refund, and in the case of a joint return, the
name of the debtor's spouse. Any person employed by, or
formerly employed by, a claimant agency who discloses any such
information for any other purpose, shall be subject to the civil
and criminal penalties of section 270B.18. Data collected by
the department from claimant agencies relating to claims filed
under this chapter are private data on individuals.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 2000, section 270B.02,
subdivision 2, is amended to read:
Subd. 2. [PROTECTED NONPUBLIC DATA.] The following are
protected nonpublic data as defined in section 13.02,
subdivision 13:
(1) criteria for determining which computer processed
returns are selected for audit;
(2) criteria for determining which returns are selected for
an in-depth audit; and
(3) criteria for determining which accounts receivable
balances below a stated amount are written off or canceled; and
(4) criteria or information used in determining which
alleged criminal violations of any law administered by the
commissioner are selected for criminal investigation.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. Minnesota Statutes 2000, section 270B.02,
subdivision 3, is amended to read:
Subd. 3. [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED
NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the
name or existence of an informer, informer letters, and other
unsolicited data, in whatever form, given to the department of
revenue by a person, other than the data subject, who informs
that a specific taxpayer is not or may not be in compliance with
tax laws, or nontax laws administered by the department of
revenue, including laws not listed in section 270B.01,
subdivision 8, are confidential data on individuals or protected
nonpublic data as defined in section 13.02, subdivisions 3 and
13.
(b) Data under paragraph (a) may be disclosed with the
consent of the informer or upon a written finding by a court
that the information provided by the informer was false and that
there is evidence that the information was provided in bad
faith. This subdivision does not alter disclosure
responsibilities or obligations under the rules of criminal
procedure.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 12. Minnesota Statutes 2000, section 270B.03,
subdivision 6, is amended to read:
Subd. 6. [INVESTIGATIVE DATA.] For purposes of any law
administered by the department of revenue, including laws not
listed in section 270B.01, subdivision 8, investigative data
collected or created by the department of revenue in order to
prepare a case against a person, whether known or unknown, for
the commission of a crime is confidential or protected nonpublic
during an investigation. When the investigation becomes
inactive, as defined in section 13.82, subdivision 5, the
classifications otherwise applicable under any other laws become
effective data is private or nonpublic.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. Minnesota Statutes 2000, section 272.02,
subdivision 10, is amended to read:
Subd. 10. [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.]
Personal property used primarily for the abatement and control
of air, water, or land pollution is exempt to the extent that it
is so used, and real property is exempt if it is used primarily
for abatement and control of air, water, or land pollution as
part of an agricultural operation, as a part of a centralized
treatment and recovery facility operating under a permit issued
by the Minnesota pollution control agency pursuant to chapters
115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730,
and 7045.0020 to 7045.1260, as a wastewater treatment facility
and for the treatment, recovery, and stabilization of metals,
oils, chemicals, water, sludges, or inorganic materials from
hazardous industrial wastes, or as part of an electric
generation system. For purposes of this subdivision, personal
property includes ponderous machinery and equipment used in a
business or production activity that at common law is considered
real property.
Any taxpayer requesting exemption of all or a portion of
any real property or any equipment or device, or part thereof,
operated primarily for the control or abatement of air or,
water, or land pollution shall file an application with the
commissioner of revenue. The equipment or device shall meet
standards, rules, or criteria prescribed by the Minnesota
pollution control agency, and must be installed or operated in
accordance with a permit or order issued by that agency. The
Minnesota pollution control agency shall upon request of the
commissioner furnish information or and advice to the
commissioner.
The information and advice furnished by the Minnesota
pollution control agency must include statements as to whether
the equipment, device, or real property meets a standard, rule,
criteria, guideline, policy, or order of the Minnesota pollution
control agency, and whether the equipment, device, or real
property is installed or operated in accordance with it. On
determining that property qualifies for exemption, the
commissioner shall issue an order exempting the property from
taxation. The equipment or, device, or real property shall
continue to be exempt from taxation as long as the permit order
issued by the Minnesota pollution control agency commissioner
remains in effect.
[EFFECTIVE DATE.] This section is effective for exemption
applications received on or after August 1, 2001.
Sec. 14. Minnesota Statutes 2000, section 273.061,
subdivision 1, is amended to read:
Subdivision 1. [OFFICE CREATED; APPOINTMENT,
QUALIFICATIONS.] Every county in this state shall have a county
assessor. The county assessor shall be appointed by the board
of county commissioners. The assessor shall be selected and
appointed because of knowledge and training in the field of
property taxation and appointment shall be approved by the
commissioner of revenue before the same shall become effective.
Upon receipt by the county commissioners of the commissioner of
revenue's refusal to approve an appointment, the term of the
appointee shall terminate at the end of that day.
The commissioner of revenue may grant approval on a
probationary basis for a period of two years. The commissioner
must base the decision to impose a probationary period on
objective and consistent criteria. At the end of the two-year
probationary period, the commissioner may either refuse to
approve the person's appointment for the remainder of the
person's four-year term, approve the person's appointment but
only for another two-year probationary period, or
unconditionally approve the person's appointment for the
remainder of the four-year term for which the person was
originally appointed by the county board. The criteria shall
not be considered rules and are not subject to the
Administrative Procedure Act.
Notwithstanding any law to the contrary, a county assessor
must have senior accreditation from the state board of assessors
by January 1, 1992, or within two years of the assessor's first
appointment under this section, whichever is later.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. Minnesota Statutes 2000, section 273.061,
subdivision 2, is amended to read:
Subd. 2. [TERM; VACANCY.] (a) The terms of county
assessors appointed under this section shall be four years. A
new term shall begin on January 1 of every fourth year after
1973. When any vacancy in the office occurs, the board of
county commissioners, within 30 90 days thereafter, shall fill
the same by appointment for the remainder of the term, following
the procedure prescribed in subdivision 1. The term of the
county assessor may be terminated by the board of county
commissioners at any time, on charges of inefficiency or neglect
of duty malfeasance, misfeasance, or nonfeasance by the
commissioner of revenue. If the board of county commissioners
does not intend to reappoint a county assessor who has been
certified by the state board of assessors, the board shall
present written notice to the county assessor not later than 90
days prior to the termination of the assessor's term, that it
does not intend to reappoint the assessor. If written notice is
not timely made, the county assessor will automatically be
reappointed by the board of county commissioners.
The commissioner of revenue may recommend to the state
board of assessors the nonrenewal, suspension, or revocation of
an assessor's license as provided in sections 270.41 to 270.53.
(b) In the event of a vacancy in the office of county
assessor, through death, resignation or other reasons, the
deputy (or chief deputy, if more than one) shall perform the
functions of the office. If there is no deputy, the county
auditor shall designate a person to perform the duties of the
office until an appointment is made as provided in clause (a).
Such person shall perform the duties of the office for a period
not exceeding 30 90 days during which the county board must
appoint a county assessor. Such 30-day 90-day period may,
however, be extended by written approval of the commissioner of
revenue.
(c) In the case of the first appointment under paragraph
(a) of a county assessor who is accredited but who does not have
senior accreditation, an approval of the appointment by the
commissioner shall be provisional, provided that a county
assessor appointed to a provisional term under this paragraph
must reapply to the commissioner at the end of the provisional
term. A provisional term may not exceed two years. The
commissioner shall not approve the appointment for the remainder
of the four-year term unless the assessor has obtained senior
accreditation.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. Minnesota Statutes 2000, section 273.072,
subdivision 1, is amended to read:
Subdivision 1. Any county and any city or town lying
wholly or partially within the county and constituting a
separate assessment district may, by agreement entered into
under section 471.59 and approved by the commissioner of
revenue, provide for the assessment of property in the
municipality or town by the county assessor. Any two or more
cities or towns constituting separate assessment districts,
whether their assessors are elective or appointive, may enter
into an agreement under section 471.59 for the assessment of
property in the contracting units by the assessor of one of the
units or by an assessor who is jointly employed.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 17. [273.0755] [TRAINING AND EDUCATION OF PROPERTY
TAX PERSONNEL.]
(a) Beginning with the four-year period starting on July 1,
2000, every person licensed by the state board of assessors at
the Accredited Minnesota Assessor level or higher, shall
successfully complete a week-long Minnesota laws course
sponsored by the department of revenue at least once in every
four-year period. An assessor need not attend the course if
they successfully pass the test for the course.
(b) The commissioner of revenue may require that each
county, and each city for which the city assessor performs the
duties of county assessor, have (i) a person on the assessor's
staff who is certified by the department of revenue in sales
ratio calculations, (ii) an officer or employee who is certified
by the department of revenue in tax calculations, and (iii) an
officer or employee who is certified by the department of
revenue in the proper preparation of abstracts of assessment.
The commissioner of revenue may require that each county have an
officer or employee who is certified by the department of
revenue in the proper preparation of abstracts of tax lists.
[EFFECTIVE DATE.] This section is effective July 1, 2001,
and thereafter.
Sec. 18. Minnesota Statutes 2000, section 273.1104,
subdivision 2, is amended to read:
Subd. 2. [NOTICE OF MARKET VALUE.] On or before May 1 in
each year, the commissioner shall send to each person subject to
the tax on unmined iron ores and to each taxing district
affected, a notice of the market value of the unmined ores as
determined by the commissioner prior to adjustment under
subdivision 1. Said notice shall be sent by mail directed to
such person at the address given in the report filed and the
assessor of such taxing district, but the validity of the tax
shall not be affected by the failure of the commissioner of
revenue to mail such notice or the failure of the person subject
to the tax to receive it.
On the first secular day following May 20, the commissioner
of revenue shall hold a hearing which may be adjourned from day
to day. All relevant and material evidence having probative
value with respect to the issues shall be submitted at the
hearing and such hearing shall not be a "contested case" within
the meaning of section 14.02, subdivision 3. Every person
subject to such tax may at such hearing present evidence and
argument on any matter bearing upon the validity or correctness
of the tax determined to be due, and the commissioner of revenue
shall review the determination of such tax.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 19. Minnesota Statutes 2000, section 273.111,
subdivision 4, is amended to read:
Subd. 4. [DETERMINATION OF VALUE.] The value of any real
estate described in subdivision 3 shall upon timely application
by the owner, in the manner provided in subdivision 8, be
determined solely with reference to its appropriate agricultural
classification and value notwithstanding sections 272.03,
subdivision 8, and 273.11. In determining the value for ad
valorem tax purposes, the assessor shall use sales data obtained
from for agricultural lands located outside the seven
metropolitan counties but within the region used for computing
the range of values under section 273.11, subdivision 10. The
sales shall have having similar soil types, number of degree
days, and other similar agricultural characteristics as
contained in section 273.11, subdivision 10. Furthermore, the
assessor shall not consider any added values resulting from
nonagricultural factors.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 20. Minnesota Statutes 2000, section 273.121, is
amended to read:
273.121 [VALUATION OF REAL PROPERTY, NOTICE.]
Any county assessor or city assessor having the powers of a
county assessor, valuing or classifying taxable real property
shall in each year notify those persons whose property is to be
assessed or reclassified included on the assessment roll that
year if the person's address is known to the assessor, otherwise
the occupant of the property. The notice shall be in writing
and shall be sent by ordinary mail at least ten days before the
meeting of the local board of review or appeal and equalization
under section 274.01 or the review process established under
section 274.13, subdivision 1c. It shall contain: (1) the
market value for the current and prior assessment, (2) the
limited market value under section 273.11, subdivision 1a for
the current and prior assessment, (3) the qualifying amount of
any improvements under section 273.11, subdivision 16 for the
current assessment, (4) the market value subject to taxation
after subtracting the amount of any qualifying improvements for
the current assessment, (5) the new classification of the
property for the current and prior assessment, (6) a note that
if the property is homestead and at least 35 years old,
improvements made to the property may be eligible for a
valuation exclusion under section 273.11, subdivision 16, (7)
the assessor's office address, and (8) the dates, places, and
times set for the meetings of the local board of review or
appeal and equalization, the review process established under
section 274.13, subdivision 1c, and the county board of appeal
and equalization. If the assessment roll is not complete, the
notice shall be sent by ordinary mail at least ten days prior to
the date on which the board of review has adjourned The
commissioner of revenue shall specify the form of the notice.
The assessor shall attach to the assessment roll a statement
that the notices required by this section have been mailed. Any
assessor who is not provided sufficient funds from the
assessor's governing body to provide such notices, may make
application to the commissioner of revenue to finance such
notices. The commissioner of revenue shall conduct an
investigation and, if satisfied that the assessor does not have
the necessary funds, issue a certification to the commissioner
of finance of the amount necessary to provide such notices. The
commissioner of finance shall issue a warrant for such amount
and shall deduct such amount from any state payment to such
county or municipality. The necessary funds to make such
payments are hereby appropriated. Failure to receive the notice
shall in no way affect the validity of the assessment, the
resulting tax, the procedures of any board of review or
equalization, or the enforcement of delinquent taxes by
statutory means.
[EFFECTIVE DATE.] This section is effective for notices
required to be mailed in 2002 and thereafter.
Sec. 21. Minnesota Statutes 2000, section 274.01,
subdivision 1, is amended to read:
Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES,
GRIEVANCES.] (a) The town board of a town, or the council or
other governing body of a city, is the board of review appeal
and equalization except (1) in cities whose charters provide for
a board of equalization or (2) in any city or town that has
transferred its local board of review power and duties to the
county board as provided in subdivision 3. The county assessor
shall fix a day and time when the board or the board of
equalization shall meet in the assessment districts of the
county. Notwithstanding any law or city charter to the
contrary, a city board of equalization shall be referred to as a
board of appeal and equalization. On or before February 15 of
each year the assessor shall give written notice of the time to
the city or town clerk. Notwithstanding the provisions of any
charter to the contrary, the meetings must be held between April
1 and May 31 each year. The clerk shall give published and
posted notice of the meeting at least ten days before the date
of the meeting.
If in any county, at least 25 percent of the total net tax
capacity of a city or town is noncommercial seasonal residential
recreational property classified under section 273.13,
subdivision 25, the county must hold two countywide
informational meetings on Saturdays. The meetings will allow
noncommercial seasonal residential recreational taxpayers to
discuss their property valuation with the appropriate assessment
staff. These Saturday informational meetings must be scheduled
to allow the owner of the noncommercial seasonal residential
recreational property the opportunity to attend one of the
meetings prior to the scheduled board of review for their city
or town. The Saturday meeting dates must be contained on the
notice of valuation of real property under section 273.121.
The board shall meet at the office of the clerk to review
the assessment and classification of property in the town or
city. No changes in valuation or classification which are
intended to correct errors in judgment by the county assessor
may be made by the county assessor after the board of review has
adjourned in those cities or towns that hold a local board of
review; however, corrections of errors that are merely clerical
in nature or changes that extend homestead treatment to property
are permitted after adjournment until the tax extension date for
that assessment year. The changes must be fully documented and
maintained in the assessor's office and must be available for
review by any person. A copy of the changes made during this
period in those cities or towns that hold a local board of
review must be sent to the county board no later than December
31 of the assessment year.
(b) The board shall determine whether the taxable property
in the town or city has been properly placed on the list and
properly valued by the assessor. If real or personal property
has been omitted, the board shall place it on the list with its
market value, and correct the assessment so that each tract or
lot of real property, and each article, parcel, or class of
personal property, is entered on the assessment list at its
market value. No assessment of the property of any person may
be raised unless the person has been duly notified of the intent
of the board to do so. On application of any person feeling
aggrieved, the board shall review the assessment or
classification, or both, and correct it as appears just. The
board may not make an individual market value adjustment or
classification change that would benefit the property in cases
where the owner or other person having control over the property
will not permit the assessor to inspect the property and the
interior of any buildings or structures.
(c) A local board of review may reduce assessments upon
petition of the taxpayer but the total reductions must not
reduce the aggregate assessment made by the county assessor by
more than one percent. If the total reductions would lower the
aggregate assessments made by the county assessor by more than
one percent, none of the adjustments may be made. The assessor
shall correct any clerical errors or double assessments
discovered by the board of review without regard to the one
percent limitation.
(d) A majority of the members may act at the meeting, and
adjourn from day to day until they finish hearing the cases
presented. The assessor shall attend, with the assessment books
and papers, and take part in the proceedings, but must not
vote. The county assessor, or an assistant delegated by the
county assessor shall attend the meetings. The board shall list
separately, on a form appended to the assessment book, all
omitted property added to the list by the board and all items of
property increased or decreased, with the market value of each
item of property, added or changed by the board, placed opposite
the item. The county assessor shall enter all changes made by
the board in the assessment book.
(e) Except as provided in subdivision 3, if a person fails
to appear in person, by counsel, or by written communication
before the board after being duly notified of the board's intent
to raise the assessment of the property, or if a person feeling
aggrieved by an assessment or classification fails to apply for
a review of the assessment or classification, the person may not
appear before the county board of appeal and equalization for a
review of the assessment or classification. This paragraph does
not apply if an assessment was made after the local board
meeting, as provided in section 273.01, or if the person can
establish not having received notice of market value at least
five days before the local board of review meeting.
(f) The local board of review or the board of equalization
must complete its work and adjourn within 20 days from the time
of convening stated in the notice of the clerk, unless a longer
period is approved by the commissioner of revenue. No action
taken after that date is valid. All complaints about an
assessment or classification made after the meeting of the board
must be heard and determined by the county board of
equalization. A nonresident may, at any time, before the
meeting of the board of review file written objections to an
assessment or classification with the county assessor. The
objections must be presented to the board of review at its
meeting by the county assessor for its consideration.
[EFFECTIVE DATE.] This section is effective January 1,
2002, and thereafter.
Sec. 22. Minnesota Statutes 2000, section 274.13,
subdivision 1, is amended to read:
Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING
ASSESSMENTS.] The county commissioners, or a majority of them,
with the county auditor, or, if the auditor cannot be present,
the deputy county auditor, or, if there is no deputy, the court
administrator of the district court, shall form a board for the
equalization of the assessment of the property of the county,
including the property of all cities whose charters provide for
a board of equalization. This board shall be referred to as the
county board of appeal and equalization. The board shall meet
annually, on the date specified in section 274.14, at the office
of the auditor. Each member shall take an oath to fairly and
impartially perform duties as a member. The board shall examine
and compare the returns of the assessment of property of the
towns or districts, and equalize them so that each tract or lot
of real property and each article or class of personal property
is entered on the assessment list at its market value, subject
to the following rules:
(1) The board shall raise the valuation of each tract or
lot of real property which in its opinion is returned below its
market value to the sum believed to be its market value. The
board must first give notice of intention to raise the valuation
to the person in whose name it is assessed, if the person is a
resident of the county. The notice must fix a time and place
for a hearing.
(2) The board shall reduce the valuation of each tract or
lot which in its opinion is returned above its market value to
the sum believed to be its market value.
(3) The board shall raise the valuation of each class of
personal property which in its opinion is returned below its
market value to the sum believed to be its market value. It
shall raise the aggregate value of the personal property of
individuals, firms, or corporations, when it believes that the
aggregate valuation, as returned, is less than the market value
of the taxable personal property possessed by the individuals,
firms, or corporations, to the sum it believes to be the market
value. The board must first give notice to the persons of
intention to do so. The notice must set a time and place for a
hearing.
(4) The board shall reduce the valuation of each class of
personal property that is returned above its market value to the
sum it believes to be its market value. Upon complaint of a
party aggrieved, the board shall reduce the aggregate valuation
of the individual's personal property, or of any class of
personal property for which the individual is assessed, which in
its opinion has been assessed at too large a sum, to the sum it
believes was the market value of the individual's personal
property of that class.
(5) The board must not reduce the aggregate value of all
the property of its county, as submitted to the county board of
equalization, with the additions made by the auditor under this
chapter, by more than one percent of its whole valuation. The
board may raise the aggregate valuation of real property, and of
each class of personal property, of the county, or of any town
or district of the county, when it believes it is below the
market value of the property, or class of property, to the
aggregate amount it believes to be its market value.
(6) The board shall change the classification of any
property which in its opinion is not properly classified.
[EFFECTIVE DATE.] This section is effective January 1,
2002, and thereafter.
Sec. 23. Minnesota Statutes 2000, section 282.04,
subdivision 2, is amended to read:
Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE,
DEMOLITION.] Before the sale of a parcel of forfeited land the
county auditor may, with the approval of the county board of
commissioners, provide for the repair and improvement of any
building or structure located upon the parcel, and may provide
for maintenance of tax-forfeited lands, if it is determined by
the county board that such repairs, improvements, or maintenance
are necessary for the operation, use, preservation and safety of
the building or structure. If so authorized by the county
board, the county auditor may insure the building or structure
against loss or damage resulting from fire or windstorm, may
purchase workers' compensation insurance to insure the county
against claims for injury to the persons employed in the
building or structure by the county, and may insure the county,
its officers and employees against claims for injuries to
persons or property because of the management, use or operation
of the building or structure. The county auditor may, with the
approval of the county board, provide for the demolition of the
building or structure, which has been determined by the county
board to be within the purview of section 299F.10, and for the
sale of salvaged materials from the building or structure. The
county auditor, with the approval of the county board, may
provide for the sale of abandoned personal property under either
chapter 345 or 566, as appropriate. The sale may be made by the
sheriff using the procedures for the sale of abandoned property
in section 345.15 or by the county auditor using the procedures
for the sale of abandoned property in section 504B.271. The net
proceeds from any sale of the personal property, salvaged
materials, timber or other products, or leases made under this
law must be deposited in the forfeited tax sale fund and must be
distributed in the same manner as if the parcel had been sold.
The county auditor, with the approval of the county board,
may provide for the demolition of any structure on tax-forfeited
lands, if in the opinion of the county board, the county
auditor, and the land commissioner, if there is one, the sale of
the land with the structure on it, or the continued existence of
the structure by reason of age, dilapidated condition or
excessive size as compared with nearby structures, will result
in a material lessening of net tax capacities of real estate in
the vicinity of the tax-forfeited lands, or if the demolition of
the structure or structures will aid in disposing of the
tax-forfeited property.
Before the sale of a parcel of forfeited land located in an
urban area, the county auditor may with the approval of the
county board provide for the grading of the land by filling or
the removal of any surplus material from it. If the physical
condition of forfeited lands is such that a reasonable grading
of the lands is necessary for the protection and preservation of
the property of any adjoining owner, the adjoining property
owner or owners may apply to the county board to have the
grading done. If, after considering the application, the county
board believes that the grading will enhance the value of the
forfeited lands commensurate with the cost involved, it may
approve it, and the work must be performed under the supervision
of the county or city engineer, as the case may be, and the
expense paid from the forfeited tax sale fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 24. Minnesota Statutes 2000, section 287.035, is
amended to read:
287.035 [IMPOSITION OF TAX.]
A tax of 23 cents is imposed upon each $100, or fraction
thereof, is imposed on the privilege of recording a mortgage.
The tax rate is .0023 of the debt or portion of a debt that is
secured by any recorded mortgage of real property located in
this state. The person liable for the tax is the mortgagee
mortgagor. The tax is not imposed on the lawful interest
amounts that may accrue with respect to a debt.
[EFFECTIVE DATE.] This section is effective for mortgages
acknowledged and recorded after July 31, 2001.
Sec. 25. Minnesota Statutes 2000, section 287.04, is
amended to read:
287.04 [EXEMPTIONS.]
The tax imposed by section 287.035 does not apply to:
(a) A decree of marriage dissolution or an instrument made
pursuant to it.
(b) A mortgage given to correct a misdescription of the
mortgaged property.
(c) A mortgage or other instrument that adds additional
security for the same debt for which mortgage registry tax has
been paid.
(d) A contract for the conveyance of any interest in real
property, including a contract for deed.
(e) A mortgage secured by real property subject to the
minerals production tax of sections 298.24 to 298.28.
(f) The principal amount of bonds or other obligations
issued by the St. Paul port authority under its common revenue
bond fund if each of the following conditions are met.
(1) The bonds or other obligations are secured by a
mortgage on property, title to which is held by the political
subdivision.
(2) The mortgage is recorded after May 19, 1993.
(3) The bonds or other obligations are either (i)
outstanding on May 19, 1993, or (ii) issued in exchange for or
to otherwise refund bonds or other obligations the original
series of which were issued before May 19, 1993 a mortgage loan
made under a low and moderate income or other affordable housing
program, if the mortgagee is a federal, state, or local
government agency.
(g) Mortgages taken in good faith by persons or granted
corporations whose property is expressly exempted from taxation
by section 272.02, subdivisions 2 to 8, or mortgagees that are
by fraternal benefit societies subject to section 64B.24.
(h) A mortgage amendment or extension, as defined in
section 287.01.
(i) An agricultural mortgage if the proceeds of the loan
secured by the mortgage are used to acquire or improve real
property classified under section 273.13, subdivision 23,
paragraph (a), or (b), clause (1), (2), or (3).
[EFFECTIVE DATE.] This section is effective for mortgages
acknowledged and recorded after July 31, 2001.
Sec. 26. Minnesota Statutes 2000, section 287.08, is
amended to read:
287.08 [TAX, HOW PAYABLE; RECEIPTS.]
(a) The tax imposed by sections 287.01 to 287.12 must be
paid to the treasurer of any county in this state in which the
real property or some part is located at or before the time of
filing the mortgage for record. The treasurer shall endorse
receipt on the mortgage and the receipt is conclusive proof that
the tax has been paid in the amount stated and authorizes any
county recorder or registrar of titles to record the mortgage.
Its form, in substance, shall be "registration tax hereon of
..................... dollars paid." If the mortgage is exempt
from taxation the endorsement shall, in substance, be "exempt
from registration tax." In either case the receipt must be
signed by the treasurer. In case the treasurer is unable to
determine whether a claim of exemption should be allowed, the
tax must be paid as in the case of a taxable mortgage.
(b) Upon written application of the taxpayer, The county
treasurer may refund in whole or in part any mortgage registry
tax that has been erroneously paid, or a person having paid a
mortgage registry tax amount may seek a refund of the tax, or
other appropriate relief, overpayment if a written application
by the taxpayer is submitted to the county treasurer within
three and one-half years from the date of the overpayment. If
the county has not issued a denial of the application, the
taxpayer may bring an action in tax court in the county in which
the tax was paid at any time after the expiration of six months
from the time that the application was submitted. A denial of
refund may be appealed within 60 days from the date of the
denial by bringing an action in tax court in the county in which
the tax was paid, within 60 days of the payment. The action is
commenced by the serving of a petition for relief on the county
treasurer, and by filing a copy with the court. The county
attorney shall defend the action. The county treasurer shall
notify the treasurer of each county that has or would receive a
portion of the tax as paid.
(c) If the county treasurer determines a refund should be
paid, or if a refund is ordered by the court, the county
treasurer of each county that actually received a portion of the
tax shall immediately pay a proportionate share of three percent
of the refund using any available county funds. The county
treasurer of each county that received, or would have received,
a portion of the tax shall also pay their county's proportionate
share of the remaining 97 percent of the court-ordered refund on
or before the 20th day of the following month using solely the
mortgage registry tax funds that would be paid to the
commissioner of revenue on that date under section 287.12. If
the funds on hand under this procedure are insufficient to fully
fund 97 percent of the court-ordered refund, the county
treasurer of the county in which the action was brought shall
file a claim with the commissioner of revenue under section
16A.48 for the remaining portion of 97 percent of the refund,
and shall pay over the remaining portion upon receipt of a
warrant from the state issued pursuant to the claim.
(d) When any mortgage covers real property located in more
than one county in this state the total tax must be paid to the
treasurer of the county where the mortgage is first presented
for recording, and the payment must be receipted as provided in
paragraph (a). If the principal debt or obligation secured by
such a multiple county mortgage exceeds $1,000,000, the nonstate
portion of the tax must be divided and paid over by the county
treasurer receiving it, on or before the 20th day of each month
after receipt, to the county or counties entitled in the ratio
that the market value of the real property covered by the
mortgage in each county bears to the market value of all the
real property in this state described in the mortgage. In
making the division and payment the county treasurer shall send
a statement giving the description of the real property
described in the mortgage and the market value of the part
located in each county. For this purpose, the treasurer of any
county may require the treasurer of any other county to certify
to the former the market valuation of any tract of real property
in any mortgage.
(e) The mortgagor must pay the tax imposed by sections
287.01 to 287.12. The mortgagee may undertake to collect and
remit the tax on behalf of the mortgagor. If the mortgagee
collects money from the mortgagor to remit the tax on behalf of
the mortgagor, the mortgagee has a fiduciary duty to remit the
tax on behalf of the mortgagor as to the amount of the tax
collected for that purpose and the mortgagor is relieved of any
further obligation to pay the tax as to the amount collected by
the mortgagee for this purpose.
[EFFECTIVE DATE.] The changes in paragraph (b) of this
section are effective for overpayments occurring after July 31,
2001, and the remaining changes are effective for documents
acknowledged and recorded after July 31, 2001.
Sec. 27. Minnesota Statutes 2000, section 287.13, is
amended by adding a subdivision to read:
Subd. 3. [PAYMENT TO MORTGAGEE.] If a mortgagee undertakes
to collect from the mortgagor the amount of the tax due under
sections 287.01 to 287.12 as provided in section 287.08,
paragraph (e), the mortgagor is not subject to the penalties
under this section and the mortgagee is subject to the
provisions of this section.
[EFFECTIVE DATE.] This section is effective for documents
acknowledged and recorded after July 31, 2001.
Sec. 28. Minnesota Statutes 2000, section 287.20,
subdivision 2, is amended to read:
Subd. 2. [CONSIDERATION.] (a) "Consideration" means
generally the total monetary value that is given in return for a
conveyance of real property in this state and includes all
lump-sum payments, all prior or future installment payments that
are required under the agreement between the parties, and the
fair market value of any property taken, or to be taken, in
exchange.
(b) Consideration does not include the reasonable and
lawful amounts of interest paid for the privilege of paying the
purchase price in installments and the fair market value of any
items of intangible personal property that are conveyed by the
taxable instrument.
(c) Consideration does not include the amount paid for the
personal property located on the real property being conveyed
and transferred as a part of the total consideration, except
that the amount paid for the personal property located on the
real property being conveyed must be included if the real
property being conveyed is a one-, two-, or three-unit
residential structure.
(d) When a conveyance of real property is made pursuant to
a contract for deed, the consideration is the price for the real
property reflected in the contract; except that, subject to the
limitations under section 287.221, when the conveyance is made
by a person engaged in the business of land sales or
construction of buildings and other improvements, or by an
affiliated person if the contract for deed, or other agreement
entered into as a condition to the seller executing the
contract, requires the property to be improved during the term
of the contract and the price of the real property as reflected
in the contract does not include the consideration for the
required improvements, then the consideration is the amount paid
for the land price for the real property as reflected in the
contract and the consideration for the required improvements
added during the term of the contract. By January 1, 2001, the
commissioner shall adopt rules that define the phrases "engaged
in the business of land sales or construction of buildings and
other improvements" and "affiliated person" as those phrases are
used in this paragraph.
(e) "Total consideration" has the same meaning as
consideration.
(f) "Consideration, exclusive of the value of any lien or
encumbrance remaining at the time of sale" or "net
consideration" means the amount of consideration as reduced by
the amount outstanding under any lien that attached to the real
property prior to the time of sale and that is not released or
satisfied as a result of the sale.
[EFFECTIVE DATE.] This section is effective for deeds
acknowledged and recorded after July 31, 2001.
Sec. 29. Minnesota Statutes 2000, section 287.20,
subdivision 9, is amended to read:
Subd. 9. [REORGANIZATION.] "Reorganization" means the
transfer of substantially all of the assets of a corporation, a
limited liability company, or a partnership not in the usual or
regular course of business if at the time of the transfer the
transfer qualifies as: (i) a corporate reorganization under
section 368(a) of the Internal Revenue Code of 1986, as amended
through December 31, 2000; or (ii) a transfer pursuant to the
continuation of an existing partnership under section 708 of the
Internal Revenue Code of 1986, as amended through December 31,
2000.
[EFFECTIVE DATE.] This section is effective for taxable
deeds acknowledged and recorded after July 31, 2001.
Sec. 30. Minnesota Statutes 2000, section 287.21,
subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION OF TAX.] (a) A tax is
imposed on each deed or instrument by which any real property in
this state is granted, assigned, transferred, or otherwise
conveyed. The tax applies against the net consideration.
(b) The tax is determined in the following manner: (1)
when transfers are made by instruments pursuant to mergers,
consolidations, sales, or transfers of substantially all of the
assets of the entities as defined in section 287.20, subdivision
9, pursuant to plans of reorganization, the tax is $1.65; (2)
when there is no consideration or when the consideration,
exclusive of the value of any lien or encumbrance remaining
thereon at the time of sale, is $500 or less, the tax is $1.65;
or (3) when the consideration, exclusive of the value of any
lien or encumbrance remaining at the time of sale, exceeds $500,
the tax is $1.65 plus $1.65 for each additional $500 or fraction
of that amount .0033 of the net consideration.
(c) The tax is due at the time a taxable deed or instrument
is presented for recording.
[EFFECTIVE DATE.] This section is effective for documents
acknowledged and recorded after July 31, 2001.
Sec. 31. Minnesota Statutes 2000, section 287.28, is
amended to read:
287.28 [REFUNDS OR REDEMPTION.]
(a) The county treasurer may refund in whole or in part any
tax which has been erroneously paid and may allow for or redeem
such of the stamps, issued under the authority of sections
287.20 to 287.31 as may that have been spoiled, destroyed, or
rendered useless or unfit for the purpose intended or for which
the owner may have no use or which through mistake may have been
improperly or unnecessarily used. Such order Redemption shall
be made only upon written application of the taxpayer.
(b) A person having paid a deed tax amount may seek a
refund of the tax, or other appropriate relief, The county
treasurer may refund any deed tax overpayment if a written
application by the taxpayer is submitted to the county treasurer
within three and one-half years from the date of the
overpayment. If the county has not issued a denial of the
application, the taxpayer may bring an action in tax court in
the county in which the tax was paid at any time after the
expiration of six months from the time that the application was
submitted. A denial of refund may be appealed within 60 days
from the date of the denial by commencing an action in tax court
in the county where the tax was paid, within 60 days of the
payment. The action is commenced by serving a petition for
relief on the county treasurer, and filing a copy with the
court. The county attorney shall defend the action. The county
treasurer shall notify the treasurer of each county that has, or
would receive a portion of the tax as paid. Any refund of deed
tax which the county treasurer determines should be made, and
any court ordered refund of deed tax, shall be accomplished
using the refund procedures in section 287.08.
[EFFECTIVE DATE.] This section is effective for
overpayments occurring after July 31, 2001.
Sec. 32. Minnesota Statutes 2000, section 289A.12,
subdivision 3, is amended to read:
Subd. 3. [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES,
AND S CORPORATIONS.] (a) Partnerships must file a return with
the commissioner for each taxable year. The return must conform
to the requirements of section 290.31 290.311, and must include
the names and addresses of the partners entitled to a
distributive share in their taxable net income, gain, loss, or
credit, and the amount of the distributive share to which each
is entitled. A partnership required to file a return for a
partnership taxable year must furnish a copy of the information
required to be shown on the return to a person who is a partner
at any time during the taxable year, on or before the day on
which the return for the taxable year was filed.
(b) The fiduciary of an estate or trust making the return
required to be filed under section 289A.08, subdivision 2, for a
taxable year must give a beneficiary who receives a distribution
from the estate or trust with respect to the taxable year or to
whom any item with respect to the taxable year is allocated, a
statement containing the information required to be shown on the
return, on or before the date on which the return was filed.
(c) An S corporation must file a return with the
commissioner for a taxable year during which an election under
section 290.9725 is in effect, stating specifically the names
and addresses of the persons owning stock in the corporation at
any time during the taxable year, the number of shares of stock
owned by a shareholder at all times during the taxable year, the
shareholder's pro rata share of each item of the corporation for
the taxable year, and other information the commissioner
requires. An S corporation required to file a return under this
paragraph for any taxable year must furnish a copy of the
information shown on the return to the person who is a
shareholder at any time during the taxable year, on or before
the day on which the return for the taxable year was filed.
(d) The partnership or S corporation return must be signed
by someone designated by the partnership or S corporation.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000.
Sec. 33. Minnesota Statutes 2000, section 289A.50,
subdivision 2a, is amended to read:
Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor
has collected from a purchaser a tax on a transaction that is
not subject to the tax imposed by chapter 297A, the purchaser
may apply directly to the commissioner for a refund under this
section if:
(a) the purchaser is currently registered to collect and
remit the sales and tax or to remit the use tax; and
(b) the amount of the refund applied for exceeds $500.
The purchaser may not file more than two applications for
refund under this subdivision in a calendar year.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 34. Minnesota Statutes 2000, 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 $25,680, 5.35 percent;
(2) On all over $25,680, but not over $102,030, 7.05
percent;
(3) On all over $102,030, 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 $17,570, 5.35 percent;
(2) On all over $17,570, but not over $57,710, 7.05
percent;
(3) On all over $57,710, 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 $21,630, 5.35 percent;
(2) On all over $21,630, but not over $86,910, 7.05
percent;
(3) On all over $86,910, 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), and
reduced by the Minnesota assignable portion of the subtraction
for United States government interest under section 290.01,
subdivision 19b, clause (1), after applying the allocation and
assignability provisions of section 290.081, clause (a), or
290.17; and
(2) the denominator is the individual's federal adjusted
gross income as defined in section 62 of the Internal Revenue
Code of 1986, 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, 2000.
Sec. 35. Minnesota Statutes 2000, section 290.06,
subdivision 23, is amended to read:
Subd. 23. [REFUND OF CONTRIBUTIONS TO POLITICAL PARTIES
AND CANDIDATES.] (a) A taxpayer may claim a refund equal to the
amount of the taxpayer's contributions made in the calendar year
to candidates and to a political party. The maximum refund for
an individual must not exceed $50 and for a married couple,
filing jointly, must not exceed $100. A refund of a
contribution is allowed only if the taxpayer files a form
required by the commissioner and attaches to the form a copy of
an official refund receipt form issued by the candidate or party
and signed by the candidate, the treasurer of the candidate's
principal campaign committee, or the chair or treasurer of the
party unit, after the contribution was received. The receipt
forms must be numbered, and the data on the receipt that are not
public must be made available to the campaign finance and public
disclosure board upon its request. A claim must be filed with
the commissioner no sooner than January 1 of the calendar year
in which the contribution was made and no later than April 15 of
the calendar year following the calendar year in which the
contribution was made. A taxpayer may file only one claim per
calendar year. Amounts paid by the commissioner after June 15
of the calendar year following the calendar year in which the
contribution was made must include interest at the rate
specified in section 270.76.
(b) No refund is allowed under this subdivision for a
contribution to a candidate unless the candidate:
(1) has signed an agreement to limit campaign expenditures
as provided in section 10A.322;
(2) is seeking an office for which voluntary spending
limits are specified in section 10A.25; and
(3) has designated a principal campaign committee.
This subdivision does not limit the campaign expenditures
of a candidate who does not sign an agreement but accepts a
contribution for which the contributor improperly claims a
refund.
(c) For purposes of this subdivision, "political party"
means a major political party as defined in section 200.02,
subdivision 7, or a minor political party qualifying for
inclusion on the income tax or property tax refund form under
section 10A.31, subdivision 3a.
A "major party" or "minor party" includes the aggregate of
that party's organization within each house of the legislature,
the state party organization, and the party organization within
congressional districts, counties, legislative districts,
municipalities, and precincts.
"Candidate" means a candidate as defined in section 10A.01,
subdivision 10, except a candidate for judicial office.
"Contribution" means a gift of money.
(d) The commissioner shall make copies of the form
available to the public and candidates upon request.
(e) The following data collected or maintained by the
commissioner under this subdivision are private: the identities
of individuals claiming a refund, the identities of candidates
to whom those individuals have made contributions, and the
amount of each contribution.
(f) The commissioner shall report to the campaign finance
and public disclosure board by each August 1 a summary showing
the total number and aggregate amount of political contribution
refunds made on behalf of each candidate and each political
party. These data are public.
(g) The amount necessary to pay claims for the refund
provided in this section is appropriated from the general fund
to the commissioner of revenue.
(h) For a taxpayer who files a claim for refund via the
Internet or other electronic means, the commissioner may accept
the number on the official receipt as documentation that a
contribution was made rather than the actual receipt as required
by paragraph (a).
[EFFECTIVE DATE.] This section is effective for refund
claims based on contributions made after December 31, 2001.
Sec. 36. Minnesota Statutes 2000, section 290.067,
subdivision 2, is amended to read:
Subd. 2. [LIMITATIONS.] The credit for expenses incurred
for the care of each dependent shall not exceed $720 in any
taxable year, and the total credit for all dependents of a
claimant shall not exceed $1,440 in a taxable year. The maximum
total credit shall be reduced according to the amount of the
income of the claimant and a spouse, if any, as follows:
income up to $13,350 $18,040, $720 maximum for one
dependent, $1,440 for all dependents;
income over $13,350 $18,040, the maximum credit for one
dependent shall be reduced by $18 for every $350 of additional
income, $36 for all dependents.
The commissioner shall construct and make available to
taxpayers tables showing the amount of the credit at various
levels of income and expenses. The tables shall follow the
schedule contained in this subdivision, except that the
commissioner may graduate the transitions between expenses and
income brackets.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 1999.
Sec. 37. Minnesota Statutes 2000, section 290.067,
subdivision 2b, is amended to read:
Subd. 2b. [INFLATION ADJUSTMENT.] The dollar amount of the
income threshold at which the maximum credit begins to be
reduced under subdivision 2 must be adjusted for inflation. The
commissioner shall adjust the threshold amount by the percentage
determined under section 290.06, subdivision 2d, for the taxable
year. make the inflation adjustments in accordance with section
1f of the Internal Revenue Code except that for the purposes of
this subdivision the percentage increase must be determined from
the year starting September 1, 1999, and ending August 31, 2000,
as the base year for adjusting for inflation for the tax year
beginning after December 31, 2000. The determination of the
commissioner under this subdivision is not a rule under the
Administrative Procedures Act.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000.
Sec. 38. Minnesota Statutes 2000, 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 1.9125 percent of the first $4,460 $4,620 of earned
income. The credit is reduced by 1.9125 percent of earned
income or modified adjusted gross income, whichever is greater,
in excess of $5,570 $5,770, but in no case is the credit less
than zero.
(c) For individuals with one qualifying child, the credit
equals 8.5 percent of the first $6,680 $6,920 of earned income
and 8.5 percent of earned income over $11,650 $12,080 but less
than $12,990 $13,450. The credit is reduced by 5.73 percent of
earned income or modified adjusted gross income, whichever is
greater, in excess of $14,560 $15,080, but in no case is the
credit less than zero.
(d) For individuals with two or more qualifying children,
the credit equals ten percent of the first $9,390 $9,720 of
earned income and 20 percent of earned income
over $14,350 $14,860 but less than $16,230 $16,800. The credit
is reduced by 10.3 percent of earned income or modified adjusted
gross income, whichever is greater, in excess
of $17,280 $17,890, 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.
Sec. 39. Minnesota Statutes 2000, section 290.0671,
subdivision 7, is amended to read:
Subd. 7. [INFLATION ADJUSTMENT.] The earned income amounts
used to calculate the credit and the income thresholds at which
the maximum credit begins to be reduced in subdivision 1 must be
adjusted for inflation. The commissioner shall adjust the
earned income and threshold amounts by the percentage determined
under section 290.06, subdivision 2d, for the taxable year. make
the inflation adjustments in accordance with section 1f of the
Internal Revenue Code except that for the purposes of this
subdivision the percentage increase shall be determined from the
year starting September 1, 1999, and ending August 31, 2000, as
the base year for adjusting for inflation for the tax year
beginning after December 31, 2000. The determination of the
commissioner under this subdivision is not a rule under the
Administrative Procedures Act.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000.
Sec. 40. Minnesota Statutes 2000, 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, to the
extent included in Minnesota taxable income:
(1) earned income as defined in section 32(c)(2) of the
Internal Revenue Code;
(2) to the extent included in 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, 2000.
Sec. 41. Minnesota Statutes 2000, 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 the difference between the tax on the
couple's joint Minnesota taxable income under the rates in
section 290.06, subdivision 2c, paragraph (a), and the sum of
the tax under the rates of section 290.06, subdivision 2c,
paragraph (b), on the earned income of the lesser-earning
spouse, and the tax under the rates of section 290.06,
subdivision 2c, paragraph (b), on the couple's joint Minnesota
taxable income, minus the earned income of the lesser-earning
spouse.
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, 2001, the
commissioner of revenue shall prepare and make available to
taxpayers a comprehensive table showing the credit under this
section at brackets of earnings of the lesser-earning spouse and
joint taxable income. The brackets of earnings shall not be
more than $2,000.
For taxable years beginning after December 31, 2000 2002,
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, 2000.
Sec. 42. Minnesota Statutes 2000, section 290.0921,
subdivision 3, is amended to read:
Subd. 3. [ALTERNATIVE MINIMUM TAXABLE INCOME.]
"Alternative minimum taxable income" is Minnesota net income as
defined in section 290.01, subdivision 19, and includes the
adjustments and tax preference items in sections 56, 57, 58, and
59(d), (e), (f), and (h) of the Internal Revenue Code. If a
corporation files a separate company Minnesota tax return, the
minimum tax must be computed on a separate company basis. If a
corporation is part of a tax group filing a unitary return, the
minimum tax must be computed on a unitary basis. The following
adjustments must be made.
(1) For purposes of the depreciation adjustments under
section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code,
the basis for depreciable property placed in service in a
taxable year beginning before January 1, 1990, is the adjusted
basis for federal income tax purposes, including any
modification made in a taxable year under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c).
For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c), not previously deducted is a
depreciation allowance in the first taxable year after December
31, 2000.
(2) The alternative tax net operating loss deduction under
sections 56(a)(4) and 56(d) of the Internal Revenue Code does
not apply.
(3) The special rule for certain dividends under section
56(g)(4)(C)(ii) of the Internal Revenue Code does not apply.
(4) The special rule for dividends from section 936
companies under section 56(g)(4)(C)(iii) does not apply.
(5) The tax preference for depletion under section 57(a)(1)
of the Internal Revenue Code does not apply.
(6) The tax preference for intangible drilling costs under
section 57(a)(2) of the Internal Revenue Code must be calculated
without regard to subparagraph (E) and the subtraction under
section 290.01, subdivision 19d, clause (4).
(7) The tax preference for tax exempt interest under
section 57(a)(5) of the Internal Revenue Code does not apply.
(8) The tax preference for charitable contributions of
appreciated property under section 57(a)(6) of the Internal
Revenue Code does not apply.
(9) For purposes of calculating the tax preference for
accelerated depreciation or amortization on certain property
placed in service before January 1, 1987, under section 57(a)(7)
of the Internal Revenue Code, the deduction allowable for the
taxable year is the deduction allowed under section 290.01,
subdivision 19e.
For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, not previously deducted is a depreciation or
amortization allowance in the first taxable year after December
31, 2000.
(10) For purposes of calculating the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code, the term "alternative minimum taxable income" as
it is used in section 56(g) of the Internal Revenue Code, means
alternative minimum taxable income as defined in this
subdivision, determined without regard to the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code.
(11) For purposes of determining the amount of adjusted
current earnings under section 56(g)(3) of the Internal Revenue
Code, no adjustment shall be made under section 56(g)(4) of the
Internal Revenue Code with respect to (i) the amount of foreign
dividend gross-up subtracted as provided in section 290.01,
subdivision 19d, clause (1), (ii) the amount of refunds of
income, excise, or franchise taxes subtracted as provided in
section 290.01, subdivision 19d, clause (10), or (iii) the
amount of royalties, fees or other like income subtracted as
provided in section 290.01, subdivision 19d, clause (11).
Items of tax preference must not be reduced below zero as a
result of the modifications in this subdivision.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 43. Minnesota Statutes 2000, section 290.92,
subdivision 23, is amended to read:
Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.]
(1) The commissioner may, within five years after the date of
assessment of the tax, or if a lien has been filed under section
270.69, within the statutory period for enforcement of the lien,
give notice to any employer deriving income which has a taxable
situs in this state regardless of whether the income is exempt
from taxation, that an employee of that employer is delinquent
in a certain amount with respect to any state taxes, including
penalties, interest, and costs. The commissioner can proceed
under this subdivision only if the tax is uncontested or if the
time for appeal of the tax has expired. The commissioner shall
not proceed under this subdivision until the expiration of 30
days after mailing to the taxpayer, at the taxpayer's last known
address, a written notice of (a) the amount of taxes, interest,
and penalties due from the taxpayer and demand for their
payment, and (b) the commissioner's intention to require
additional withholding by the taxpayer's employer pursuant to
this subdivision. The effect of the notice shall expire 180
days one year after it has been mailed to the taxpayer provided
that the notice may be renewed by mailing a new notice which is
in accordance with this subdivision. The renewed notice shall
have the effect of reinstating the priority of the original
claim. The notice to the taxpayer shall be in substantially the
same form as that provided in section 571.72. The notice shall
further inform the taxpayer of the wage exemptions contained in
section 550.37, subdivision 14. If no statement of exemption is
received by the commissioner within 30 days from the mailing of
the notice, the commissioner may proceed under this
subdivision. The notice to the taxpayer's employer may be
served by mail or by delivery by an employee of the department
of revenue and shall be in substantially the same form as
provided in section 571.75. Upon receipt of notice, the
employer shall withhold from compensation due or to become due
to the employee, the total amount shown by the notice, subject
to the provisions of section 571.922. The employer shall
continue to withhold each pay period until the notice is
released by the commissioner under section 270.709. Upon
receipt of notice by the employer, the claim of the state of
Minnesota shall have priority over any subsequent garnishments
or wage assignments. The commissioner may arrange between the
employer and the employee for withholding a portion of the total
amount due the employee each pay period, until the total amount
shown by the notice plus accrued interest has been withheld.
The "compensation due" any employee is defined in
accordance with the provisions of section 571.921. The maximum
withholding allowed under this subdivision for any one pay
period shall be decreased by any amounts payable pursuant to a
garnishment action with respect to which the employer was served
prior to being served with the notice of delinquency and any
amounts covered by any irrevocable and previously effective
assignment of wages; the employer shall give notice to the
department of the amounts and the facts relating to such
assignments within ten days after the service of the notice of
delinquency on the form provided by the department of revenue as
noted in this subdivision.
(2) If the employee ceases to be employed by the employer
before the full amount set forth in a notice of delinquency plus
accrued interest has been withheld, the employer shall
immediately notify the commissioner in writing of the
termination date of the employee and the total amount withheld.
No employer may discharge any employee by reason of the fact
that the commissioner has proceeded under this subdivision. If
an employer discharges an employee in violation of this
provision, the employee shall have the same remedy as provided
in section 571.927, subdivision 2.
(3) Within ten days after the expiration of such pay
period, the employer shall remit to the commissioner, on a form
and in the manner prescribed by the commissioner, the amount
withheld during each pay period under this subdivision.
(4) Clauses (1), (2), and (3), except provisions imposing a
liability on the employer for failure to withhold or remit,
shall apply to cases in which the employer is the United States
or any instrumentality thereof or this state or any municipality
or other subordinate unit thereof.
(5) The commissioner shall refund to the employee excess
amounts withheld from the employee under this subdivision. If
any excess results from payments by the employer because of
willful failure to withhold or remit as prescribed in clause
(3), the excess attributable to the employer's payment shall be
refunded to the employer.
(6) Employers required to withhold delinquent taxes,
penalties, interest, and costs under this subdivision shall not
be required to compute any additional interest, costs or other
charges to be withheld.
(7) The collection remedy provided to the commissioner by
this subdivision shall have the same legal effect as if it were
a levy made pursuant to section 270.70.
[EFFECTIVE DATE.] This section is effective for notices of
intent mailed on or after the day following final enactment.
Sec. 44. Minnesota Statutes 2000, section 290A.03,
subdivision 12, is amended to read:
Subd. 12. [GROSS RENT.] (a) "Gross rent" means rental paid
for the right of occupancy, at arms-length, of a homestead,
exclusive of charges for any medical services furnished by the
landlord as a part of the rental agreement, whether expressly
set out in the rental agreement or not.
(b) The gross rent of a resident of a nursing home or
intermediate care facility is $350 per month. The gross rent of
a resident of an adult foster care home is $550 per month.
Beginning for rent paid in 2002, the commissioner shall annually
adjust for inflation the gross rent amounts stated in this
paragraph. The adjustment must be made in accordance with
section 1f of the Internal Revenue Code, except that for
purposes of this paragraph the percentage increase shall be
determined from the year ending on June 30, 2001, to the year
ending on June 30 of the year in which the rent is paid. The
commissioner shall round the gross rents to the nearest $10
amount. If the amount ends in $5, the commissioner shall round
it up to the next $10 amount. The determination of the
commissioner under this paragraph is not a rule under the
Administrative Procedure Act.
(c) If the landlord and tenant have not dealt with each
other at arms-length and the commissioner determines that the
gross rent charged was excessive, the commissioner may adjust
the gross rent to a reasonable amount for purposes of this
chapter.
(d) Any amount paid by a claimant residing in property
assessed pursuant to section 273.124, subdivision 3, 4, 5, or 6
for occupancy in that property shall be excluded from gross rent
for purposes of this chapter. However, property taxes imputed
to the homestead of the claimant or the dwelling unit occupied
by the claimant that qualifies for homestead treatment pursuant
to section 273.124, subdivision 3, 4, 5, or 6 shall be included
within the term "property taxes payable" as defined in
subdivision 13, notwithstanding the fact that ownership is not
in the name of the claimant.
[EFFECTIVE DATE.] This section is effective for refunds
based on rent paid after December 31, 2000.
Sec. 45. Minnesota Statutes 2000, section 290A.15, is
amended to read:
290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.]
The amount of any claim otherwise payable under this
chapter may be applied by the commissioner against any
delinquent tax liability of the claimant or spouse of the
claimant payable to the department of revenue any member of the
household. If there are two members of the household, the
commissioner may apply only one-half of a refund to the separate
liability of either member of the household.
[EFFECTIVE DATE.] This section is effective beginning with
refunds paid on or after August 1, 2001.
Sec. 46. Minnesota Statutes 2000, section 296A.16,
subdivision 2, is amended to read:
Subd. 2. [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.]
Any person who shall buy buys and use uses gasoline for a
qualifying purpose other than use in motor vehicles, snowmobiles
except as provided in clause (2), or motorboats, or special fuel
for a qualifying purpose other than use in licensed motor
vehicles, and who shall have paid the tax directly or indirectly
through the amount of the tax being included in the price of the
gasoline or special fuel, or otherwise, shall be reimbursed and
repaid the amount of the tax paid upon filing with the
commissioner a claim for refund in the form and manner
prescribed by the commissioner, and containing the information
the commissioner shall require. By signing any such claim which
is false or fraudulent, the applicant shall be subject to the
penalties provided in this chapter for knowingly making a false
claim. The claim shall set forth the total amount of the
gasoline so purchased and used by the applicant other than in
motor vehicles, or special fuel purchased and used by the
applicant other than in licensed motor vehicles, and shall state
when and for what purpose it was used. When a claim contains an
error in computation or preparation, the commissioner is
authorized to adjust the claim in accordance with the evidence
shown on the claim or other information available to the
commissioner. The commissioner, on being satisfied that the
claimant is entitled to the payments, shall approve the claim
and transmit it to the commissioner of finance. The words
"gasoline" or "special fuel" as used in this subdivision do not
include aviation gasoline or special fuel for aircraft.
Gasoline or special fuel bought and used for a "qualifying
purpose" means:
(1) Gasoline or special fuel used in carrying on a trade or
business, used on a farm situated in Minnesota, and used for a
farming purpose. "Farm" and "farming purpose" have the meanings
given them in section 6420(c)(2), (3), and (4) of the Internal
Revenue Code of 1986, as amended through December 31, 1997.
(2) Gasoline or special fuel used for off-highway business
use. "Off-highway business use" means any use off the public
highway by a person in that person's trade, business, or
activity for the production of income. Off-highway business use
includes:
(i) use of a passenger snowmobile off the public highways
as part of the operations of a resort as defined in section
157.15, subdivision 11; and
(ii) use of gasoline or special fuel to operate a power
takeoff unit on a vehicle, but not including fuel consumed
during idling time.
Off-highway business use does not include:
(i) use as a fuel in a motor vehicle which, at the time of
use, is registered or is required to be registered for highway
use under the laws of any state or foreign country; or
(ii) use of a licensed motor vehicle fuel tank in lieu of a
separate storage tank for storing fuel to be used for a
qualifying purpose, as defined in this section. Fuel purchased
to be used for a qualifying purpose cannot be placed in the fuel
tank of a licensed motor vehicle and must be stored in a
separate supply tank.
(3) Gasoline or special fuel placed in the fuel tanks of
new motor vehicles, manufactured in Minnesota, and shipped by
interstate carrier to destinations in other states or foreign
countries.
By July 1, 1998, the commissioner shall adopt rules that
determine the rates and percentages necessary to develop
formulas for calculating the refund under clause (2), item (ii).
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 47. [296A.201] [ASSESSMENTS.]
Subdivision 1. [GENERAL RULE.] The commissioner may make
determinations, corrections, and assessments with respect to any
tax or fee under this chapter, including interest, additions to
taxes and fees, and assessable penalties.
Subd. 2. [COMMISSIONER FILED RETURNS.] 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 is prima facie
correct and valid. The commissioner may use statistical or
other sampling techniques consistent with generally accepted
auditing standards in examining returns or records and making
assessments.
Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO
TAXPAYER.] (a) If a return has been filed and the commissioner
determines that the tax or fee disclosed by the return is
different than the tax or fee determined by the examination, the
commissioner shall send an order of assessment to the taxpayer.
If no return has been filed, the commissioner may make a return
for the taxpayer under subdivision 2 or may send an order of
assessment under this subdivision. The order must explain the
basis for the assessment and must explain the taxpayer's appeal
rights. An order of assessment is final when made but may be
reconsidered by the commissioner under section 296A.25.
(b) Penalties under this chapter are not imposed and no
collection action can be taken, including the filing of liens
under section 270.69, if the amount shown on the order is paid
to the commissioner:
(1) within 60 days after notice of the amount and demand
for its payment have been mailed to the taxpayer by the
commissioner; or
(2) if an administrative appeal is filed under this
chapter, or a tax court appeal is filed under chapter 271,
within 60 days following final determination of the appeal if
the appeal is based upon a constitutional challenge to the tax
or fee, and if not, when the decision of the tax court is made.
Subd. 4. [ERRONEOUS REFUNDS.] An erroneous refund is
considered an underpayment of tax or fee on the date made. An
assessment of a deficiency arising out of an erroneous refund
may be made at any time within two years from the making of the
refund. If part of the refund was induced by fraud or
misrepresentation of a material fact, the assessment may be made
at any time.
Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or
assessment of tax or fee made by the commissioner is prima facie
correct and valid. The taxpayer has the burden of establishing
its incorrectness or invalidity in any related action or
proceeding.
Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The
commissioner, on examining returns of a taxpayer for more than
one year or period, may issue one order covering the period
under examination that reflects the aggregate refund or
additional tax or fee due.
Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment,
sent postage prepaid by United States mail to the taxpayer at
the taxpayer's last known address, is sufficient even if the
taxpayer is deceased or is under a legal disability, or, in the
case of a corporation, even if the corporation has terminated
its existence, unless the department has been provided with a
new address by a party authorized to receive notices of
assessment.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 48. Minnesota Statutes 2000, section 296A.21,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE RULES.] (a) The commissioner
shall make determinations, corrections, and assessments, and
refunds with respect to taxes and fees under this chapter,
including interest, additions to taxes, and assessable
penalties. Except as otherwise provided in this section, the
amount of taxes assessable must be assessed within 3-1/2 years
after the date the return is filed.
(b) A claim for a refund of an overpayment of state tax or
fees must be filed within 3-1/2 years from the date prescribed
for filing the return, plus any extension of time granted for
filing the return, but only if filed within the extended time;
or the claim must be filed within one year from the date of an
order assessing tax or fees, or from the date of a return filed
by the commissioner, upon payment in full of the tax, fees,
penalties, and interest shown on the order or return, whichever
period expires later.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 49. Minnesota Statutes 2000, section 296A.21,
subdivision 4, is amended to read:
Subd. 4. [TIME LIMIT FOR REPAYMENT CERTAIN REFUNDS.] No
repayment Notwithstanding subdivision 1, paragraph (b), no
refund under section 296A.16, subdivision 2, shall be made
unless the claim for refund and invoice shall be are filed with
the commissioner within one year from the date of purchase. The
postmark on the envelope in which a written claim is mailed
shall determine its date of filing.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 50. Minnesota Statutes 2000, section 297A.07,
subdivision 3, is amended to read:
Subd. 3. [NEW PERMITS AFTER REVOCATION.] The commissioner
shall not issue a new permit or reinstate a revoked permit after
revocation unless the taxpayer applies for a permit and provides
reasonable evidence of intention to comply with the sales and
use tax laws and rules. The commissioner may require the
applicant to supply security, in addition to that authorized by
section 297A.28, as is reasonably necessary to insure compliance
with the sales and use tax laws and rules. If the commissioner
issues or reinstates a permit not in conformance with the
requirements of this subdivision or applicable rules, the
commissioner may cancel the permit upon notice to the permit
holder. The notice must be served by first class and certified
mail at the permit holder's last known address. The
cancellation shall be effective immediately, subject to the
right of the permit holder to show that the permit was issued in
conformance with the requirements of this subdivision and
applicable rules. Upon such showing, the permit must be
reissued.
If a taxpayer has had a permit or permits revoked three
times in a five-year period, the commissioner shall not issue a
new permit or reinstate the revoked permit until 24 months have
elapsed after revocation and the taxpayer has satisfied the
conditions for reinstatement of a revoked permit or issuance of
a new permit imposed by this section and rules adopted hereunder.
For purposes of this subdivision, the term "taxpayer" means
an individual, if a revoked permit was issued to or in the name
of an individual, or a corporation or partnership, if a revoked
permit was issued to or in the name of a corporation or
partnership. Taxpayer also means an officer of a corporation, a
member of a partnership, or an individual who is liable for
delinquent sales taxes, either for the entity for which the new
or reinstated permit is at issue, or for another entity for
which a permit was previously revoked, or personally as a permit
holder.
[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section
is effective the day following final enactment.
(b) In the next edition of Minnesota Statutes, the revisor
shall codify the amendments to this section in Minnesota
Statutes, section 297A.86, subdivision 2.
Sec. 51. Minnesota Statutes 2000, section 297A.25,
subdivision 3, is amended to read:
Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts
from the sale of and storage, use, or consumption of prescribed
drugs, prescribed medicine and insulin, intended for use,
internal or external, in the cure, mitigation, treatment or
prevention of illness or disease in human beings are exempt,
together with prescription glasses, fever thermometers,
therapeutic, and prosthetic devices. "Prescribed drugs" or
"prescribed medicine" includes over-the-counter drugs or
medicine prescribed by a licensed physician health care
professional. "Therapeutic devices" includes reusable finger
pricking devices for the extraction of blood, blood glucose
monitoring machines, and other diagnostic agents used in
diagnosing, monitoring, or treating diabetes. Nonprescription
analgesics consisting principally (determined by the weight of
all ingredients) of acetaminophen, acetylsalicylic acid,
ibuprofen, ketoprofen, naproxen, and other nonprescription
analgesics that are approved by the United States Food and Drug
Administration for internal use by human beings, or a
combination thereof, are exempt.
Medical supplies purchased by a licensed health care
facility or licensed health care professional to provide medical
treatment to residents or patients are exempt. The exemption
does not apply to medical equipment or components of medical
equipment, laboratory supplies, radiological supplies, and other
items used in providing medical services. For purposes of this
subdivision, "medical supplies" means adhesive and nonadhesive
bandages, gauze pads and strips, cotton applicators,
antiseptics, nonprescription drugs, eye solution, and other
similar supplies used directly on the resident or patient in
providing medical services.
[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is
effective the day following final enactment. In the next
edition of Minnesota Statutes, the revisor of statutes shall
codify the amendment in this section in Minnesota Statutes,
section 297A.67, subdivision 7.
Sec. 52. Minnesota Statutes 2000, 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 of tangible personal
property and taxable services used at or by the hospitals and
nursing homes 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; INSTRUCTION TO REVISOR.] This section is
effective the day following final enactment. In the next
edition of Minnesota Statutes, the revisor of statutes shall
codify the amendment in this section in Minnesota Statutes,
section 297A.70, subdivision 2.
Sec. 53. Minnesota Statutes 2000, section 297A.82,
subdivision 3, is amended to read:
Subd. 3. [PAYMENT OF TAX TO COMMISSIONER.] If the an
aircraft is purchased from a person who is not the holder of a
valid sales and use tax permit under this chapter, the purchaser
shall pay the tax to the commissioner of revenue prior to
registering or licensing the aircraft in this state. The
commissioner of revenue shall issue a certificate stating that
the sales and use tax in respect to the transaction has been
paid.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after the day following final enactment.
Sec. 54. Minnesota Statutes 2000, section 297A.82, is
amended by adding a subdivision to read:
Subd. 7. [AGREEMENT WITH COMMISSIONER OF
TRANSPORTATION.] Notwithstanding subdivisions 1 to 4, the
commissioner may enter into an agreement with the commissioner
of transportation whereby, upon approval of both commissioners,
the commissioner of transportation will collect the sales tax on
aircraft from persons required to register or license aircraft
in this state. For purposes of collecting the tax, the
commissioner of transportation shall act as agent of the
commissioner of revenue and shall be subject to all rules not
inconsistent with the provisions of this chapter, that may be
prescribed by the commissioner.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 55. Minnesota Statutes 2000, 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 or country 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 and
the motor vehicle was registered in the person's name in the
other state or country;
(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, 355, 368, 721, 731, 1031, 1033, or
1563(a) of the Internal Revenue Code of 1986, as amended through
December 31, 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, except a public school, university, or library, 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 the day
following final enactment, except that the change to paragraph
(11) is effective for sales and purchases occurring after June
30, 2000.
Sec. 56. Minnesota Statutes 2000, section 297F.16,
subdivision 4, is amended to read:
Subd. 4. [ERRONEOUS REFUNDS OR CREDITS.] An erroneous
refund or credit is considered an underpayment of tax on the
date made. An assessment of a deficiency arising out of an
erroneous refund or credit must be made within 3-1/2 years from
the date prescribed for filing the return, plus any extension of
time granted for filing the return, but only if filed within the
extended time, or two years from the time the tax is paid in
full, whichever period expires later two years from the making
of the refund. If part of the refund was induced by fraud or
misrepresentation of a material fact, the assessment may be made
at any time.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 57. Minnesota Statutes 2000, section 297G.15,
subdivision 4, is amended to read:
Subd. 4. [ERRONEOUS REFUNDS OR CREDITS.] An erroneous
refund or credit is considered an underpayment of tax on the
date made. An assessment of a deficiency arising out of an
erroneous refund or credit must be made within 3-1/2 years from
the date prescribed for filing the return, plus any extension of
time granted for filing the return, but only if filed within the
extended time, or two years from the time the tax is paid in
full, whichever period expires later two years from the making
of the refund. If part of the refund was induced by fraud or
misrepresentation of a material fact, the assessment may be made
at any time.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 58. Minnesota Statutes 2000, section 297G.16,
subdivision 5, is amended to read:
Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise
provided in this chapter, a claim for a refund of an overpayment
of tax must be filed within 3-1/2 years from the date prescribed
for filing the return, plus any extension of time granted for
filing the return, but only if filed within the extended time,
or two years from the time the tax is paid in full, whichever
period expires later. Claimants under this section are subject
to the notice requirements of section 289A.38, subdivision 7 or
within one year from the date of an order assessing tax or from
the date of a return filed by the commissioner, upon payment in
full of the tax, penalties, and interest shown on the order or
return made by the commissioner, whichever period expires later.
[EFFECTIVE DATE.] This section is effective for returns
becoming due or orders assessing tax issued on or after the day
following final enactment.
Sec. 59. Minnesota Statutes 2000, section 297G.16,
subdivision 7, is amended to read:
Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for
refund must be filed with the commissioner within one year of
the filing of the taxpayer's income tax return containing the
bad debt deduction that is being claimed. Claimants under this
subdivision are subject to the notice requirements of section
289A.38, subdivision 7.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 60. [297H.115] [USE TAX.]
Subdivision 1. [IMPOSITION; LIABILITY OF GENERATORS AND
SELF-HAULERS.] (a) A use tax is imposed on the sales price of
mixed municipal solid waste management services received by a
residential generator at the rate imposed under section 297H.02,
unless the tax imposed under section 297H.02 was paid. The
residential generator is liable.
(b) A use tax is imposed on the sales price of mixed
municipal solid waste management services received by a
commercial generator at the rate imposed under section 297H.03,
unless the tax imposed under section 297H.03 was paid. The
commercial generator is liable.
(c) A use tax is imposed on the volume of nonmixed
municipal solid waste that is managed at the rate imposed under
section 297H.04, unless the tax imposed under section 297H.04
was paid. The generator is liable.
(d) A use tax is imposed on the sales price of mixed
municipal solid waste management services received by a
self-hauler at the rate imposed under section 297H.05, paragraph
(a), unless the tax imposed under section 297H.05, paragraph
(a), was paid. The self-hauler is liable.
(e) A use tax is imposed on the volume of nonmixed
municipal solid waste managed at the rate imposed under section
297H.05, paragraph (b), unless the tax imposed under section
297H.05, paragraph (b), was paid. The self-hauler is liable.
Subd. 2. [PAYMENT; REPORTING.] A generator or self-hauler
that is liable under subdivision 1 shall report the use tax on a
return prescribed by the commissioner of revenue, and shall
remit the tax with the return. The return and the tax must be
filed using the filing cycle and due dates provided for taxes
imposed under chapter 297A.
Subd. 3. [COMMISSIONER ASSESSMENT.] (a) The commissioner
of revenue may not assess the generator or self-hauler a use tax
on a transaction for which the waste management service provider
has paid the solid waste management tax, except as provided in
paragraph (b).
(b) If the waste management service provider who is an
accrual basis taxpayer remits a payment and thereafter offsets
the amount as a bad debt under section 297H.09, the commissioner
of revenue may assess the generator or self-hauler a use tax for
the offset amount.
[EFFECTIVE DATE.] This section is effective for services
received on or after August 1, 2001.
Sec. 61. Minnesota Statutes 2000, section 383A.80,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORITY TO IMPOSE; RATE.] (a) The
governing body of Ramsey county may impose a mortgage registry
and deed tax.
(b) The rate of the mortgage registry tax equals one cent
for each $100 or fraction .0001 of the principal.
(c) The rate of the deed tax equals five cents for each
$500 or fraction .0001 of the amount.
[EFFECTIVE DATE.] This section is effective for documents
acknowledged and recorded after July 31, 2001.
Sec. 62. Minnesota Statutes 2000, section 383B.80,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORITY TO IMPOSE; RATE.] (a) The
governing body of Hennepin county may impose a mortgage registry
and deed tax.
(b) The rate of the mortgage registry tax equals one cent
for each $100 or fraction .0001 of the principal.
(c) The rate of the deed tax equals five cents for each
$500 or fraction .0001 of the amount.
[EFFECTIVE DATE.] This section is effective for documents
acknowledged and recorded after July 31, 2001.
Sec. 63. Minnesota Statutes 2000, section 461.12, is
amended by adding a subdivision to read:
Subd. 8. [NOTICE TO COMMISSIONER.] The licensing authority
under this section shall, within 30 days of the issuance of a
license, inform the commissioner of revenue of the licensee's
name, address, trade name, and the effective and expiration
dates of the license. The commissioner of revenue must also be
informed of a license renewal, transfer, cancellation,
suspension, or revocation during the license period.
[EFFECTIVE DATE.] This section is effective for licenses
issued, renewed, transferred, canceled, suspended, or revoked on
or after January 1, 2002.
Sec. 64. [REPORT ON INCOME TAX RECIPROCITY WITH
WISCONSIN.]
By March 1, 2002, the commissioner of revenue must report
to house and senate committees dealing with taxes on the
advisability of terminating individual income tax reciprocity
with the state of Wisconsin under Minnesota Statutes, section
290.081.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 65. [APPROPRIATIONS.]
$462,000 is appropriated in each of fiscal years 2002 and
2003 from the general fund to the commissioner of revenue to
administer this article. In addition, there is a one-time
appropriation of $41,000 in fiscal year 2002, and a one-time
appropriation of $43,000 in fiscal year 2003, from the general
fund to the commissioner of revenue to administer this article.
Sec. 66. [REPEALER.]
(a) Minnesota Statutes 2000, section 296A.16, subdivision
6, is repealed effective the day following final enactment.
(b) Minnesota Statutes 2000, sections 290.095, subdivision
7; 290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and
19, are repealed effective for tax years beginning after
December 31, 2000.
(c) Minnesota Statutes 2000, section 297B.032, is repealed
effective the day following final enactment.
(d) Minnesota Statutes 2000, sections 290.06, subdivision
25, and 290A.04, subdivision 2j, are repealed effective for
taxable years beginning after December 31, 2001.
(e) Minnesota Rules, parts 8120.0200; 8120.0500;
8120.0700; 8120.0900; 8120.1300; 8120.1600; 8120.2000;
8120.2100; 8120.2200; 8120.2300; 8120.2500; 8120.2700;
8120.2800; 8120.3000; 8120.3200; 8120.4300; 8120.4400;
8120.4500; 8120.4600; 8120.4900; 8120.5000; 8120.5100; and
8120.5300, are repealed effective the day following final
enactment.
ARTICLE 8
SUSTAINABLE FOREST INCENTIVE ACT
Section 1. Minnesota Statutes 2000, section 88.49,
subdivision 5, is amended to read:
Subd. 5. [CANCELLATION.] Upon the failure of the owner
faithfully to fulfill and perform such contract or any provision
thereof, or any requirement of sections 88.47 to 88.53, or any
rule adopted by the commissioner thereunder, the commissioner
may cancel the contract in the manner herein provided. The
commissioner shall give to the owner, in the manner prescribed
in section 88.48, subdivision 4, 60 days' notice of a hearing
thereon at which the owner may appear and show cause, if any,
why the contract should not be canceled. The commissioner shall
thereupon determine whether the contract should be canceled and
make an order to that effect. Notice of the commissioner's
determination and the making of the order shall be given to the
owner in the manner provided in section 88.48, subdivision 4.
On determining that the contract should be canceled and no
appeal therefrom be taken, the commissioner shall send notice
thereof to the auditor of the county and to the town clerk of
the town affected and file with the recorder a certified copy of
the order, who shall forthwith note the cancellation upon the
record thereof, and thereupon the land therein described shall
cease to be an auxiliary forest and, together with the timber
thereon, become liable to all taxes and assessments that
otherwise would have been levied against it had it never been an
auxiliary forest from the time of the making of the contract,
any provisions of the statutes of limitation to the contrary
notwithstanding, less the amount of taxes paid under the
provisions of section 88.51, subdivision 1, together with
interest on such taxes and assessments at six percent per annum,
but without penalties.
The commissioner may in like manner and with like effect
cancel the contract upon written application of the owner.
The commissioner shall cancel any contract if the owner has
made successful application under sections 270.31 to 270.39
inclusive 290C.01 to 290C.11, the Minnesota Tree Growth Tax Law
Sustainable Forest Incentive Act, and has paid to the county
treasurer the difference between the amount which would have
been paid had the land under contract been subject to the
Minnesota Tree Growth Tax Law and the Sustainable Forest
Incentive Act from the date of the filing of the contract and
the amount actually paid under section 88.51, subdivisions 1 and
2. This tax difference must be calculated based on the years
the lands would have been taxed under the Tree Growth Tax Law
and the Sustainable Forest Incentive Act. The sustainable
forest tax difference is net of the incentive payment of section
290C.07. If the amount which would have been paid, had the land
under contract been under the Minnesota Tree Growth Tax Law and
the Sustainable Forest Incentive Act from the date of the filing
of the contract, is less than the amount actually paid under the
contract, the cancellation shall be made without further payment
by the owner.
When the execution of any contract creating an auxiliary
forest shall have been procured through fraud or deception
practiced upon the county board or the commissioner or any other
person or body representing the state, it may be canceled upon
suit brought by the attorney general at the direction of the
commissioner. This cancellation shall have the same effect as
the cancellation of a contract by the commissioner.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 2. Minnesota Statutes 2000, section 88.49,
subdivision 9a, is amended to read:
Subd. 9a. [LAND TRADES WITH GOVERNMENTAL UNITS.]
Notwithstanding subdivisions 6 and 9, or section 88.491,
subdivision 2, if an owner trades land under auxiliary forest
contract for land owned by a governmental unit and the owner
agrees to use the land received in trade from the governmental
unit for the production of forest products, upon resolution of
the county board, no taxes and assessments shall be levied
against the land traded, except that any current or delinquent
annual taxes or yield taxes due on that land while it was under
the auxiliary forest provision must be paid prior to the land
exchange. The land received from the governmental unit in the
land trade automatically qualifies for inclusion in the Tree
Growth Tax Law Sustainable Forest Incentive Act.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 3. Minnesota Statutes 2000, section 88.491,
subdivision 2, is amended to read:
Subd. 2. [EFFECT OF EXPIRED CONTRACT.] When auxiliary
forest contracts expire, or prior to expiration by mutual
agreement between the land owner and the appropriate county
office, the lands previously covered by an auxiliary forest
contract automatically qualify for inclusion in the Tree Growth
Tax Law under the provisions of the Sustainable Forest Incentive
Act; provided that when such lands are included in the Tree
Growth Tax Law Sustainable Forest Incentive Act prior to
expiration of the auxiliary forest contract they will be
transferred and a tax paid as provided in accordance with the
provisions of section 88.49, subdivision 5, upon application and
inclusion in the sustainable forest incentive program. The land
owner shall pay taxes in an amount equal to the difference
between:
(1) the sum of:
(i) the amount which would have been paid from the date of
the filing of the contract had the land under contract been
subject to the Minnesota Tree Growth Tax Law from the date of
the filing of the contract and; plus
(ii) beginning with taxes payable in 2003, the taxes that
would have been paid if the land had been enrolled in the
sustainable forest incentive program; and
(2) the amount actually paid under section 88.51,
subdivisions 1 and 2.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 4. Minnesota Statutes 2000, 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, or a sustainable forest tax payment to a claimant under
chapter 290C.
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 refunds in
2003 and thereafter.
Sec. 5. [290C.01] [PURPOSE.]
It is the policy of this state to promote sustainable
forest resource management on the state's public and private
lands. Recognizing that private forests comprise approximately
one-half of the state forest land resources, that healthy and
robust forest land provides significant benefits to the state of
Minnesota, and that ad valorem property taxes represent a
significant annual cost that can discourage long-term forest
management investments, this chapter, hereafter referred to as
the "Sustainable Forest Incentive Act," is enacted to encourage
the state's private forest landowners to make a long-term
commitment to sustainable forest management.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 6. [290C.02] [DEFINITIONS.]
Subdivision 1. [APPLICATION.] When used in sections
290C.01 to 290C.11, the terms in this section have the meanings
given them.
Subd. 2. [APPROVED PLAN WRITERS.] "Approved plan writers"
are natural resource professionals who are self-employed,
employed by private companies or individuals, nonprofit
organizations, local units of government, or public agencies,
and who are approved by the commissioner of natural resources.
Persons determined to be certified foresters by the Society of
American Foresters shall be deemed to meet the standards
required under this subdivision. The commissioner of natural
resources shall issue a unique identification number to each
approved planner.
Subd. 3. [CLAIMANT.] "Claimant" means a person, as that
term is defined in section 290.01, subdivision 2, who owns
forest land in Minnesota and files an application authorized by
the Sustainable Forest Incentive Act. No more than one claimant
is entitled to a payment under this chapter with respect to any
tract, parcel, or piece of land enrolled under this chapter.
When enrolled forest land is owned by two or more persons, the
owners must determine between them which person may claim the
payments provided under sections 290C.01 to 290C.11.
Subd. 4. [COMMISSIONER.] "Commissioner" means the
commissioner of revenue.
Subd. 5. [CURRENT USE VALUE.] "Current use value" means
the statewide average annual income per acre, multiplied by 90
percent and divided by the capitalization rate determined under
subdivision 9. The statewide net annual income shall be a
weighted average based on the most recent data as of July 1 of
the computation year on stumpage prices and annual tree growth
rates and acreage by cover type provided by the department of
natural resources and the United States Department of
Agriculture Forest Service North Central Research Station.
Subd. 6. [FOREST LAND.] "Forest land" means land
containing a minimum of 20 contiguous acres for which the owner
has implemented a forest management plan that was prepared or
updated within the past ten years by an approved plan writer.
For purposes of this subdivision, acres are considered to be
contiguous even if they are separated by a road, waterway,
railroad track, or other similar intervening property. At least
50 percent of the contiguous acreage must meet the definition of
forest land in section 88.01, subdivision 7. For the purposes
of sections 290C.01 to 209C.11, forest land does not include (i)
land used for residential or agricultural purposes, (ii) land
enrolled in the reinvest in Minnesota program, a state or
federal conservation reserve or easement reserve program under
sections 103F.501 to 103F.531, the Minnesota agricultural
property tax law under section 273.111, or land subject to
agricultural land preservation controls or restrictions as
defined in section 40A.02 or under the Metropolitan Agricultural
Preserves Act under chapter 473H, or (iii) land improved with a
structure, pavement, sewer, campsite, or any road, other than a
township road, used for purposes not prescribed in the forest
management plan.
Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management plan"
means a written document providing a framework for site-specific
healthy, productive, and sustainable forest resources. A forest
management plan must include at least the following: (i)
owner-specific forest management goals for the property; (ii) a
reliable field inventory of the individual forest cover types,
their age, and density; (iii) a description of the soil type and
quality; (iv) an aerial photo and/or map of the vegetation and
other natural features of the property clearly indicating the
boundaries of the property and of the forest land; (v) the
proposed future conditions of the property; (vi) prescriptions
to meet proposed future conditions of the property; (vii) a
recommended timetable for implementing the prescribed
activities; and (viii) a legal description of the parcels
encompassing the parcels included in the plan. All management
activities prescribed in a plan must be in accordance with the
recommended timber harvesting and forest management guidelines.
The commissioner of natural resources shall provide a framework
for plan content and updating and revising plans.
Subd. 8. [TIMBER HARVESTING AND FOREST MANAGEMENT
GUIDELINES.] "Timber harvesting and forest management guidelines"
means guidelines developed under section 89A.05 and adopted by
the Minnesota forest resources council in 1998.
Subd. 9. [CAPITALIZATION RATE.] By July 1 of each year,
the commissioner shall determine a statewide capitalization rate
for use under this chapter. The rate shall be the average
annual effective interest rate for St. Paul on new loans under
the Farm Credit Bank system calculated under section
2032A(e)(7)(A) of the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 7. [290C.03] [ELIGIBILITY REQUIREMENTS.]
(a) Property may be enrolled in the sustainable forest
incentive program under this chapter if all of the following
conditions are met:
(1) property consists of at least 20 contiguous acres and
at least 50 percent of the land must meet the definition of
forest land in section 88.01, subdivision 7, during the
enrollment;
(2) a forest management plan for the property must be
prepared by an approved plan writer and implemented during the
period in which the land is enrolled;
(3) timber harvesting and forest management guidelines must
be used in conjunction with any timber harvesting or forest
management activities conducted on the land during the period in
which the land is enrolled;
(4) the property must be enrolled for a minimum of eight
years;
(5) there are no delinquent property taxes on the property;
and
(6) claimants enrolling more than 1,920 acres in the
sustainable forest incentive program must allow year-round,
nonmotorized access to fish and wildlife resources on enrolled
land except within one-fourth mile of a permanent dwelling or
during periods of high fire hazard as determined by the
commissioner of natural resources.
(b) Claimants required to allow access under paragraph (a),
clause (6), do not by that action:
(1) extend any assurance that the land is safe for any
purpose;
(2) confer upon the person the legal status of an invitee
or licensee to whom a duty of care is owed; or
(3) assume responsibility for or incur liability for any
injury to the person or property caused by an act or omission of
the person.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 8. [290C.04] [APPLICATIONS.]
(a) A landowner may apply to enroll forest land for the
sustainable forest incentive program under this chapter. The
claimant must complete, sign, and submit an application to the
commissioner by September 30 in order for the land to become
eligible beginning in the next year. The application shall be
on a form prescribed by the commissioner and must include the
information the commissioner deems necessary. At a minimum, the
application must show the following information for the land and
the claimant: (i) the claimant's social security number or
state or federal business tax registration number and date of
birth, (ii) the claimant's address, (iii) the claimant's
signature, (iv) the county's parcel identification numbers for
the tax parcels that completely contain the claimant's forest
land that is sought to be enrolled, (v) the number of acres
eligible for enrollment in the program, (vi) the approved plan
writer's signature and identification number, and (vii) proof,
in a form specified by the commissioner, that the claimant has
executed and acknowledged in the manner required by law for a
deed, and recorded, a covenant that the land is not and shall
not be developed in a manner inconsistent with the requirements
and conditions of this chapter. The covenant shall state in
writing that the covenant is binding on the claimant and the
claimant's successor or assignee, and that it runs with the land
for a period of not less than eight years. The commissioner
shall specify the form of the covenant and provide copies upon
request. The covenant must include a legal description that
encompasses all the forest land that the claimant wishes to
enroll under this section or the certificate of title number for
that land if it is registered land.
(b) In all cases, the commissioner shall notify the
claimant within 90 days after receipt of a completed application
that either the land has or has not been approved for enrollment.
A claimant whose application is denied may appeal the denial as
provided in section 290C.11, paragraph (a).
(c) Within 90 days after the denial of an application, or
within 90 days after the final resolution of any appeal related
to the denial, the commissioner shall execute and acknowledge a
document releasing the land from the covenant required under
this chapter. The document must be mailed to the claimant and
is entitled to be recorded.
(d) The social security numbers collected from individuals
under this section are private data as provided in section 13.49.
The state or federal business tax registration number and date
of birth data collected under this section are also private data
but may be shared with county assessors for purposes of tax
administration and with county treasurers for purposes of the
revenue recapture under chapter 270A.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 9. [290C.05] [ANNUAL CERTIFICATION.]
On or before July 1 of each year, beginning with the year
after the claimant has received an approved application, the
commissioner shall send each claimant enrolled under the
sustainable forest incentive program a certification form. The
claimant must sign the certification, attesting that the
requirements and conditions for continued enrollment in the
program are currently being met, and must return the signed
certification form to the commissioner by August 15 of that same
year. Failure to return an annual certification form by the due
date shall result in removal of the lands from the provisions of
the sustainable forest incentive program, and the imposition of
any applicable removal penalty. The claimant may appeal the
removal and any associated penalty according to the procedures
and within the time allowed under this chapter.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 10. [290C.06] [CALCULATION OF AVERAGE ESTIMATED
MARKET VALUE; TIMBERLAND.]
The commissioner shall annually calculate a statewide
average estimated market value per acre for class 2b timberland
under section 273.13, subdivision 23, paragraph (b).
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 11. [290C.07] [CALCULATION OF INCENTIVE PAYMENT.]
An approved claimant under the sustainable forest incentive
program is eligible to receive an annual payment. The payment
shall equal the greater of:
(1) the difference between the property tax that would be
paid on the property using the previous year's statewide average
total township tax rate and the class rate for class 2b
timberland under section 273.13, subdivision 23, paragraph (b),
if the property were valued at (i) the average statewide
timberland market value per acre calculated under section
290C.06, and (ii) the average statewide timberland current use
value per acre calculated under section 290C.02, subdivision 5;
(2) two-thirds of the property tax amount determined by
using the previous year's statewide average total township tax
rate, the estimated market value per acre as calculated in
section 290C.06, and the class rate for 2b timberland under
section 273.13, subdivision 23, paragraph (b); or
(3) $1.50 per acre for each acre enrolled in the
sustainable forest incentive program.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 12. [290C.08] [ANNUAL INCENTIVE PAYMENT;
APPROPRIATION.]
Subdivision 1. [ANNUAL PAYMENT.] An incentive payment for
each acre of enrolled land will be made annually to each
claimant in the amount determined under section 290C.07. The
incentive payment shall be paid on or before October 1 each year
based on the certifications due August 15 of that year.
Interest at the annual rate determined under section 270.75
shall be included with any incentive payment not paid by the
later of October 1 of the year the certification was due, or 45
days after the completed certification was returned or filed if
the commissioner accepts a certification filed after August 15
of the taxes payable year as the resolution of an appeal.
Subd. 2. [APPROPRIATION.] The amount necessary to make the
payments under this section is annually appropriated to the
commissioner from the general fund.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 13. [290C.09] [REMOVAL FOR PROPERTY TAX DELINQUENCY.]
The commissioner shall immediately remove any property
enrolled in the sustainable forest incentive program for which
taxes are determined to be delinquent as provided in chapter 279
and shall notify the claimant of such action. Lands terminated
from the sustainable forest incentive program under this section
are not entitled to any payments provided in this chapter and
are subject to removal penalties prescribed in section 290C.11.
The claimant has 60 days from the receipt of notice from the
commissioner under this section to pay the delinquent taxes. If
the delinquent taxes are paid within this 60-day period, the
lands shall be reinstated in the program as if they had not been
withdrawn and without the payment of a penalty.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 14. [290C.10] [WITHDRAWAL PROCEDURES.]
An approved claimant under the sustainable forest incentive
program for a minimum of four years may notify the commissioner
of the intent to terminate enrollment. Within 90 days of
receipt of notice to terminate enrollment, the commissioner
shall inform the claimant in writing, acknowledging receipt of
this notice and indicating the effective date of termination
from the sustainable forest incentive program. Termination of
enrollment in the sustainable forest incentive program occurs on
January 1 of the fifth calendar year that begins after receipt
by the commissioner of the termination notice. After the
commissioner issues an effective date of termination, a claimant
wishing to continue the property's enrollment in the sustainable
forest incentive program beyond the termination date must apply
for enrollment as prescribed in section 290C.04. A claimant who
withdraws a parcel of land from this program may not reenroll
the parcel for a period of three years. Within 90 days after
the termination date, the commissioner shall execute and
acknowledge a document releasing the land from the covenant
required under this chapter. The document must be mailed to the
claimant and is entitled to be recorded. The commissioner may
allow early withdrawal from the Sustainable Forest Incentive Act
without penalty in cases of condemnation for a public purpose
notwithstanding the provisions of this section.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 15. [290C.11] [PENALTIES FOR REMOVAL.]
(a) If the commissioner determines that property enrolled
in the sustainable forest incentive program is in violation of
the conditions for enrollment as specified in section 290C.03,
the commissioner shall notify the claimant of the intent to
remove all enrolled land from the sustainable forest incentive
program. The claimant has 60 days to appeal this determination.
The appeal must be made in writing to the commissioner, who
shall, within 60 days, notify the claimant as to the outcome of
the appeal. Within 60 days after the commissioner denies an
appeal, or within 120 days after the commissioner received a
written appeal if the commissioner has not made a determination
in that time, the owner may appeal to tax court under chapter
271 as if the appeal is from an order of the commissioner.
(b) If the commissioner determines the property is to be
removed from the sustainable forest incentive program, the
claimant is liable for payment to the commissioner in the amount
equal to the payments received under this chapter for the
previous four-year period, plus interest. The claimant has 90
days to satisfy the payment for removal of land from the
sustainable forest incentive program under this section. If the
penalty is not paid within the 90-day period under this
paragraph, the commissioner shall certify the amount to the
county auditor for collection as a part of the general ad
valorem real property taxes on the land in the following taxes
payable year.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
Sec. 16. [APPROPRIATIONS.]
$194,000 is appropriated in fiscal year 2003 from the
general fund to the commissioner of revenue to administer this
article. This is a one-time appropriation. If the commissioner
determines that an appropriation is needed for this purpose in
fiscal year 2004 and beyond, it must be presented as a change
request.
Sec. 17. [REPEALER.]
Minnesota Statutes 2000, sections 270.31; 270.32; 270.33;
270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are repealed.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003, and thereafter.
ARTICLE 9
INCOME AND CORPORATE FRANCHISE TAX
Section 1. Minnesota Statutes 2000, section 290.01, is
amended by adding a subdivision to read:
Subd. 5b. [INSURANCE COMPANY.] The terms "insurance
company," "life insurance company," and "insurance company other
than life," have the meanings given in the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000.
Sec. 2. Minnesota Statutes 2000, section 290.01,
subdivision 7, is amended to read:
Subd. 7. [RESIDENT.] The term "resident" means (1) any
individual domiciled in Minnesota, except that an individual is
not a "resident" for the period of time that the individual
is either:
(1) on active duty stationed outside of Minnesota while in
the armed forces of the United States or the United Nations; or
(2) a "qualified individual" as defined in section
911(d)(1) of the Internal Revenue Code, if the qualified
individual notifies the county within three months of moving out
of the country that homestead status be revoked for the
Minnesota residence of the qualified individual, and the
property is not classified as a homestead while the individual
remains a qualified individual; and (2).
"Resident" also means any individual domiciled outside the
state who maintains a place of abode in the state and spends in
the aggregate more than one-half of the tax year in Minnesota,
unless:
(1) the individual or the spouse of the individual is in
the armed forces of the United States,; or
(2) the individual is covered under the reciprocity
provisions in section 290.081.
For purposes of this subdivision, presence within the state
for any part of a calendar day constitutes a day spent in the
state. Individuals shall keep adequate records to substantiate
the days spent outside the state.
The term "abode" means a dwelling maintained by an
individual, whether or not owned by the individual and whether
or not occupied by the individual, and includes a dwelling place
owned or leased by the individual's spouse.
Neither the commissioner nor any court shall consider
charitable contributions made by an individual within or without
the state in determining if the individual is domiciled in
Minnesota.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000.
Sec. 3. Minnesota Statutes 2000, 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 amount used to
claim 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 purchased or leased for use 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) (7) 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 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) (8) the exemption amount allowed under Laws 1995,
chapter 255, article 3, section 2, subdivision 3;
(10) (9) 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, sections 12601 to 12604;
(11) (10) 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;
(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) (11) 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; and
(12) for individuals who are allowed a federal foreign tax
credit for taxes that do not qualify for a credit under section
290.06, subdivision 22, an amount equal to the carryover of
subnational foreign taxes for the taxable year, but not to
exceed the total subnational foreign taxes reported in claiming
the foreign tax credit. For purposes of this clause, "federal
foreign tax credit" means the credit allowed under section 27 of
the Internal Revenue Code, and "carryover of subnational foreign
taxes" equals the carryover allowed under section 904(c) of the
Internal Revenue Code minus national level foreign taxes to the
extent they exceed the federal foreign tax credit.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2001, except that the amendment to
clause (3) is effective for tax years beginning after December
31, 2000.
Sec. 4. Minnesota Statutes 2000, 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) (8) the exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal
Revenue Code;
(10) (9) the amount of percentage depletion deducted under
sections 611 through 614 and 291 of the Internal Revenue Code;
(11) (10) 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) (11) the amount of any deemed dividend from a foreign
operating corporation determined pursuant to section 290.17,
subdivision 4, paragraph (g);
(13) (12) the amount of any environmental tax paid under
section 59(a) of the Internal Revenue Code; and
(14) (13) 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, 2000.
Sec. 5. Minnesota Statutes 2000, 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) (9) 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) (10) 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) (11) 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) (12) 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) (13) 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) (14) 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;
(16) (15) the amount of any refund of environmental taxes
paid under section 59A of the Internal Revenue Code; and
(17) (16) 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, 2000.
Sec. 6. Minnesota Statutes 2000, section 290.01,
subdivision 22, is amended to read:
Subd. 22. [TAXABLE NET INCOME.] For tax years beginning
after December 31, 1986, the term "taxable net income" means:
(1) for resident individuals the same as net income;
(2) for individuals who were not residents of Minnesota for
the entire year, the same as net income except that the tax is
imposed only on the Minnesota apportioned share of that income
as determined pursuant to section 290.06, subdivision 2c,
paragraph (e);
(3) for all other taxpayers, the part of net income that is
allocable to Minnesota by assignment or apportionment under one
or more of sections 290.17, 290.191, 290.20, 290.35, and 290.36.
For tax years beginning before January 1, 1987, the term
"taxable net income" means the net income assignable to this
state pursuant to sections 290.17 to 290.20. For corporations,
taxable net income is then reduced by the deductions contained
in section 290.21.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 7. Minnesota Statutes 2000, section 290.01,
subdivision 29, is amended to read:
Subd. 29. [TAXABLE INCOME.] For tax years beginning after
December 31, 1986, The term "taxable income" means:
(1) for individuals, estates, and trusts, the same as
taxable net income;
(2) for corporations, including insurance companies, the
taxable net income less
(i) the net operating loss deduction under section 290.095;
and
(ii) the dividends received deduction under section 290.21,
subdivision 4; and
(iii) the charitable contribution deduction under section
290.21, subdivision 3.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 8. Minnesota Statutes 2000, section 290.014,
subdivision 5, is amended to read:
Subd. 5. [CORPORATIONS.] Except as provided in section
290.015, corporations are subject to the return filing
requirements and to tax as provided in this chapter if the
corporation so exercises its franchise as to engage in such
contacts with this state as to cause part of the income of the
corporation to be:
(1) allocable to this state under section 290.17, 290.191,
290.20, 290.35, or 290.36;
(2) taxed to the corporation under the Internal Revenue
Code (or not taxed under the Internal Revenue Code by reason of
its character but of a character which is taxable under this
chapter) in its capacity as a beneficiary of an estate with
income allocable to this state under section 290.17, 290.191, or
290.20 and the income, taking into account the income character
provisions of section 662(b) of the Internal Revenue Code, would
be allocable to this state under section 290.17, 290.191, or
290.20 if realized by the corporation directly from the source
from which realized by the estate;
(3) taxed to the corporation under the Internal Revenue
Code (or not taxed under the Internal Revenue Code by reason of
its character but of a character which is taxable under this
chapter) in its capacity as a beneficiary or grantor or other
person treated as a substantial owner of a trust with income
allocable to this state under section 290.17, 290.191, or 290.20
and the income, taking into account the income character
provisions of section 652(b), 662(b), or 664(b) of the Internal
Revenue Code, would be allocable to this state under section
290.17, 290.191, or 290.20 if realized by the corporation
directly from the source from which realized by the trust; or
(4) taxed to the corporation under the Internal Revenue
Code (or not taxed under the Internal Revenue Code by reason of
its character but of a character which is taxable under this
chapter) in its capacity as a limited or general partner in a
partnership with income allocable to this state under section
290.17, 290.191, or 290.20 and the income, taking into account
the income character provisions of section 702(b) of the
Internal Revenue Code, would be allocable to this state under
section 290.17, 290.191, or 290.20 if realized by the
corporation directly from the source from which realized by the
partnership.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 9. Minnesota Statutes 2000, section 290.05,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPT ENTITIES.] The following
corporations, individuals, estates, trusts, and organizations
shall be exempted from taxation under this chapter, provided
that every such person or corporation claiming exemption under
this chapter, in whole or in part, must establish to the
satisfaction of the commissioner the taxable status of any
income or activity:
(a) corporations, individuals, estates, and trusts engaged
in the business of mining or producing iron ore and other ores
the mining or production of which is subject to the occupation
tax imposed by section 298.01; but if any such corporation,
individual, estate, or trust engages in any other business or
activity or has income from any property not used in such
business it shall be subject to this tax computed on the net
income from such property or such other business or activity.
Royalty shall not be considered as income from the business of
mining or producing iron ore within the meaning of this section;
(b) the United States of America, the state of Minnesota or
any political subdivision of either agencies or
instrumentalities, whether engaged in the discharge of
governmental or proprietary functions; and
(c) any insurance company that is domiciled in a state or
country other than Minnesota that imposes retaliatory taxes,
fines, deposits, penalties, licenses, or fees and that does not
grant, on a reciprocal basis, exemption from such retaliatory
taxes to insurance companies or their agents domiciled in
Minnesota. "Retaliatory taxes" means taxes imposed on insurance
companies organized in another state or country that result from
the fact that an insurance company organized in the taxing
jurisdiction and doing business in the other jurisdiction is
subject to taxes, fines, deposits, penalties, licenses, or fees
in an amount exceeding that imposed by the taxing jurisdiction
upon an insurance company organized in the other state or
country and doing business to the same extent in the taxing
jurisdiction; and
(d) town and farmers' mutual insurance companies and mutual
property and casualty insurance companies, other than those (1)
writing life insurance or (2) whose total assets on December 31,
1989, exceeded $1,600,000,000.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 10. Minnesota Statutes 2000, 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, 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":
(1) includes:
(i) the District of Columbia, but does not include; and
(ii) a province or territory of Canada; but
(2) excludes Puerto Rico or and 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.
(k) For a tax imposed by a province or territory of Canada,
the tax for purposes of this subdivision is the excess of the
tax over the amount of the foreign tax credit allowed under
section 27 of the Internal Revenue Code. In determining the
amount of the foreign tax credit allowed, the net income taxes
imposed by Canada on the income are deducted first. Any
remaining amount of the allowable foreign tax credit reduces the
provincial or territorial tax that qualifies for the credit
under this subdivision.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 11. Minnesota Statutes 2000, section 290.0674,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT ALLOWED.] An individual is allowed
a credit against the tax imposed by this chapter in an amount
equal to 75 percent of the amount paid for education-related
expenses for a qualifying child in kindergarten through grade
12. For purposes of this section, "education-related expenses"
means:
(1) fees or tuition for instruction by an instructor under
section 120A.22, subdivision 10, clause (1), (2), (3), (4), or
(5), or by a member of the Minnesota music teachers association,
and who is not a lineal ancestor or sibling of the dependent for
instruction outside the regular school day or school year,
including tutoring, driver's education offered as part of school
curriculum, regardless of whether it is taken from a public or
private entity or summer camps, in grade or age appropriate
curricula that supplement curricula and instruction available
during the regular school year, that assists a dependent to
improve knowledge of core curriculum areas or to expand
knowledge and skills under the graduation rule under section
120B.02, paragraph (e), clauses (1) to (7), (9), and (10), and
that do not include the teaching of religious tenets, doctrines,
or worship, the purpose of which is to instill such tenets,
doctrines, or worship;
(2) expenses for textbooks, including books and other
instructional materials and equipment used purchased or leased
for use in elementary and secondary schools in teaching only
those subjects legally and commonly taught in public elementary
and secondary schools in this state. "Textbooks" does not
include instructional books and materials used in the teaching
of religious tenets, doctrines, or worship, the purpose of which
is to instill such tenets, doctrines, or worship, nor does it
include books or materials for extracurricular activities
including sporting events, musical or dramatic events, speech
activities, driver's education, or similar programs;
(3) a maximum expense of $200 per family for personal
computer hardware, excluding single purpose processors, and
educational software that assists a dependent to improve
knowledge of core curriculum areas or to expand knowledge and
skills under the graduation rule under section 120B.02 purchased
for use in the taxpayer's home and not used in a trade or
business regardless of whether the computer is required by the
dependent's school; and
(4) the amount paid to others for transportation of a
qualifying child attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or
Wisconsin, wherein a resident of this state may legally fulfill
the state's compulsory attendance laws, which is not operated
for profit, and which adheres to the provisions of the Civil
Rights Act of 1964 and chapter 363.
For purposes of this section, "qualifying child" has the
meaning given in section 32(c)(3) of the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2001, except that the amendment to
clause (2) is effective for tax years beginning after December
31, 2000.
Sec. 12. [290.0679] [ASSIGNMENT OF REFUND.]
Subdivision 1. [DEFINITIONS.] (a) "Qualifying taxpayer"
means a resident who has a child in kindergarten through grade
12 in the current tax year and who met the income requirements
under section 290.0674, subdivision 2, for receiving the
education credit in the tax year preceding the assignment of the
taxpayer's refund.
(b) "Education credit" means the credit allowed under
section 290.0674.
(c) "Refund" means an individual income tax refund.
(d) "Financial institution" means a state or federally
chartered bank, savings bank, savings association, or credit
union.
(e) "Qualifying organization" means a tax-exempt
organization under section 501(c)(3) of the Internal Revenue
Code.
(f) "Assignee" means a financial institution or qualifying
organization that is entitled to receive payment of a refund
assigned under this section.
Subd. 2. [CONDITIONS FOR ASSIGNMENT.] A qualifying
taxpayer may assign all or part of an anticipated refund for the
current and future taxable years to a financial institution or a
qualifying organization. A financial institution or qualifying
organization accepting assignment must pay the amount secured by
the assignment to a third-party vendor. The commissioner of
children, families, and learning shall provide a list of
categories of products and services that qualify for the
education credit to financial institutions and qualifying
organizations. A financial institution or qualifying
organization that accepts assignments under this section must
verify as part of the assignment documentation that the product
or service to be provided by the third-party vendor qualifies
for the education credit. The amount assigned for the current
and future taxable years may not exceed the maximum allowable
education credit for the current taxable year. Both the
taxpayer and spouse must consent to the assignment of a refund
from a joint return.
Subd. 3. [CONSENT FOR DISCLOSURE.] When the taxpayer
applies to the financial institution or the qualifying
organization for a loan to be secured by the assignment under
subdivision 2, the taxpayer must sign a written consent on a
form prescribed by the commissioner. The consent must authorize
the commissioner to disclose to the financial institution or
qualifying organization the total amount of state taxes owed or
revenue recapture claims filed under chapter 270A against the
taxpayer, and the total amount of outstanding assignments made
by the taxpayer under this section. For a refund from a joint
return, the consent must also authorize the disclosure of taxes,
revenue recapture claims, and assignments relating to the
taxpayer's spouse, and must be signed by the spouse. The
financial institution or qualifying organization may request
that the taxpayer provide a copy of the taxpayer's previous
year's income tax return, if any, and may assist the taxpayer in
requesting a copy of the previous year's return from the
commissioner.
Subd. 4. [CONSUMER DISCLOSURE.] (a) A third-party vendor
that receives payment of the amount secured by an assignment
must comply with the requirements of this subdivision.
(b) The third-party vendor must disclose to the taxpayer,
in plain language:
(1) the cost of each product or service for which the
third-party vendor separately charges the taxpayer;
(2) any fees charged to the taxpayer for tax preparation
services; and
(3) for qualifying low-income taxpayers, information on the
availability of free tax preparation services.
(c) The third-party vendor must provide to the taxpayer
executed copies of any documents signed by the taxpayer.
Subd. 5. [FILING OF ASSIGNMENT.] The commissioner shall
prescribe the form of and manner for filing an assignment of a
refund under this section.
Subd. 6. [EFFECT OF ASSIGNMENT.] The taxpayer may not
revoke an assignment after it has been filed. The assignee must
notify the commissioner if the loan secured by the assignment
has been paid in full, in which case the assignment is
canceled. An assignment is in effect until the amount assigned
is refunded in full to the assignee, or until the assignee
cancels the assignment.
Subd. 7. [PAYMENT OF REFUND.] When a refund assigned under
this section is issued by the commissioner, the proceeds of the
refund, as defined in subdivision 1, paragraph (c), must be
distributed in the following order:
(1) to satisfy any delinquent tax obligations of the
taxpayer which are owed to the commissioner;
(2) to claimant agencies to satisfy any revenue recapture
claims filed against the taxpayer, in the order of priority of
the claims set forth in section 270A.10;
(3) to assignees to satisfy assignments under this section,
based on the order in time in which the commissioner received
the assignments; and
(4) to the taxpayer.
Subd. 8. [LEGAL ACTION.] If there is a dispute between the
taxpayer and the assignee after the commissioner has remitted
the taxpayer's refund to the assignee, the taxpayer's only
remedy is to bring an action against the assignee in court to
recover the refund. The action must be brought within two years
after the commissioner remits the refund to the assignee. The
commissioner may not be a party to the proceeding.
Subd. 9. [ASSIGNMENTS PRIVATE DATA.] Information regarding
assignments under this section is classified as private data on
individuals.
[EFFECTIVE DATE.] This section is effective for assignment
of refunds filed with the commissioner after December 31, 2001.
The time period for filing assignments expires December 31,
2003, but assignments filed on or before that date remain in
effect until satisfied or canceled.
Sec. 13. Minnesota Statutes 2000, 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;
(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 clause (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 6.4 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 Minnesota Statutes 2000, 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 Minnesota Statutes 2000, section 290.21,
subdivision 3, clauses (a) to (e).
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 14. Minnesota Statutes 2000, section 290.0921,
subdivision 1, is amended to read:
Subdivision 1. [TAX IMPOSED.] In addition to the taxes
computed under this chapter without regard to this section, the
franchise tax imposed on corporations includes a tax equal to
the excess, if any, for the taxable year of:
(1) 5.8 percent of Minnesota alternative minimum taxable
income less the credit allowed under section 290.35, subdivision
3; over
(2) the tax imposed under section 290.06, subdivision 1,
without regard to this section.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 15. Minnesota Statutes 2000, section 290.0921,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given them.
(b) "Alternative minimum taxable net income" is alternative
minimum taxable income,
(1) less the exemption amount, and
(2) apportioned or allocated to Minnesota under section
290.17, 290.191, or 290.20.
(c) The "exemption amount" is $40,000, reduced, but not
below zero, by 25 percent of the excess of alternative minimum
taxable income over $150,000.
(d) "Minnesota alternative minimum taxable income" is
alternative minimum taxable net income, less the deductions for
alternative tax net operating loss under subdivision 4;
charitable contributions under subdivision 5; and dividends
received under subdivision 6. The sum of the deductions under
this paragraph may not exceed 90 percent of alternative minimum
taxable net income. This limitation does not apply to a
deduction for dividends paid to or received from a corporation
which is subject to tax under section 290.35 or 290.36 and which
is a member of an affiliated group of corporations as defined by
the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 16. Minnesota Statutes 2000, section 290.0921,
subdivision 6, is amended to read:
Subd. 6. [DIVIDENDS RECEIVED.] (a) A deduction is allowed
from alternative minimum taxable net income equal to the
deduction for dividends received under section 290.21,
subdivision 4, for purposes of calculating taxable income under
section 290.01, subdivision 29.
(b) The amount of the deduction must not exceed 90 percent
of alternative minimum taxable net income. This limitation does
not apply to dividends paid to or received from a corporation
which is subject to tax under section 290.35 or 290.36 and which
is a member of an affiliated group of corporations as defined by
the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 17. Minnesota Statutes 2000, section 290.0922,
subdivision 2, is amended to read:
Subd. 2. [EXEMPTIONS.] The following entities are exempt
from the tax imposed by this section:
(1) corporations exempt from tax under section 290.05 other
than insurance companies exempt under subdivision 1, paragraph
(d);
(2) real estate investment trusts;
(3) regulated investment companies or a fund thereof; and
(4) entities having a valid election in effect under
section 860D(b) of the Internal Revenue Code;
(5) town and farmers' mutual insurance companies; and
(6) cooperatives organized under chapter 308A that provide
housing exclusively to persons age 55 and over and are
classified as homesteads under section 273.124, subdivision 3.
Entities not specifically exempted by this subdivision are
subject to tax under this section, notwithstanding section
290.05.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 18. Minnesota Statutes 2000, section 290.093, is
amended to read:
290.093 [TAX COMPUTATION FOR MUTUAL SAVINGS BANKS
CONDUCTING LIFE INSURANCE BUSINESS.]
Mutual savings banks as defined in section 594 of the
Internal Revenue Code are subject to a tax consisting of the sum
of the taxes determined under clauses (1) and (2):
(1) a tax computed on the taxable income determined without
regard to any items of gross income or deductions properly
allocable to the business of the life insurance department, at
the rates and in the manner as if this section did not apply;
and
(2) a tax computed on the income of the life insurance
department determined without regard to any items of gross
income or deductions not properly allocable to the department
computed in the manner provided in section 290.35 and at the
rate provided in section 290.06 for a corporation not engaged in
the business of issuing life insurance contracts.
This section applies only if the life insurance department
would, if it were treated as a separate corporation, qualify as
a life insurance company under section 816 of the Internal
Revenue Code.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 19. Minnesota Statutes 2000, section 290.095,
subdivision 2, is amended to read:
Subd. 2. [DEFINED AND LIMITED.] (a) The term "net
operating loss" as used in this section shall mean a net
operating loss as defined in section 172(c) or 810(a), in the
case of life insurance companies, of the Internal Revenue Code,
with the modifications specified in subdivision 4. The
deductions provided in section 290.21 and the modification
provided in section 290.01, subdivision 19d, clause (11) (10),
cannot be used in the determination of a net operating loss.
(b) The term "net operating loss deduction" as used in this
section means the aggregate of the net operating loss carryovers
to the taxable year, computed in accordance with subdivision 3.
The provisions of section 172(b) or 810(b), in the case of life
insurance companies, of the Internal Revenue Code relating to
the carryback of net operating losses, do not apply.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 20. Minnesota Statutes 2000, section 290.17,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE OF ALLOCATION RULES.] (a) The income
of resident individuals is not subject to allocation outside
this state. The allocation rules apply to nonresident
individuals, estates, trusts, nonresident partners of
partnerships, nonresident shareholders of corporations treated
as "S" corporations under section 290.9725, and all corporations
not having such an election in effect. If a partnership or
corporation would not otherwise be subject to the allocation
rules, but conducts a trade or business that is part of a
unitary business involving another legal entity that is subject
to the allocation rules, the partnership or corporation is
subject to the allocation rules.
(b) Expenses, losses, and other deductions (referred to
collectively in this paragraph as "deductions") must be
allocated along with the item or class of gross income to which
they are definitely related for purposes of assignment under
this section or apportionment under section 290.191, 290.20,
290.35, or 290.36. Deductions not definitely related to any
item or class of gross income are assigned to the taxpayer's
domicile.
(c) In the case of an individual who is a resident for only
part of a taxable year, the individual's income, gains, losses,
and deductions from the distributive share of a partnership, S
corporation, trust, or estate are not subject to allocation
outside this state to the extent of the distributive share
multiplied by a ratio, the numerator of which is the number of
days the individual was a resident of this state during the tax
year of the partnership, S corporation, trust, or estate, and
the denominator of which is the number of days in the taxable
year of the partnership, S corporation, trust, or estate.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 21. Minnesota Statutes 2000, section 290.17,
subdivision 4, is amended to read:
Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or
business conducted wholly within this state or partly within and
partly without this state is part of a unitary business, the
entire income of the unitary business is subject to
apportionment pursuant to section 290.191. Notwithstanding
subdivision 2, paragraph (c), none of the income of a unitary
business is considered to be derived from any particular source
and none may be allocated to a particular place except as
provided by the applicable apportionment formula. The
provisions of this subdivision do not apply to business income
subject to subdivision 5, income of an insurance company
determined under section 290.35, or income of an investment
company determined under section 290.36.
(b) The term "unitary business" means business activities
or operations which result in a flow of value between them. The
term may be applied within a single legal entity or between
multiple entities and without regard to whether each entity is a
sole proprietorship, a corporation, a partnership or a trust.
(c) Unity is presumed whenever there is unity of ownership,
operation, and use, evidenced by centralized management or
executive force, centralized purchasing, advertising,
accounting, or other controlled interaction, but the absence of
these centralized activities will not necessarily evidence a
nonunitary business. Unity is also presumed when business
activities or operations are of mutual benefit, dependent upon
or contributory to one another, either individually or as a
group.
(d) Where a business operation conducted in Minnesota is
owned by a business entity that carries on business activity
outside the state different in kind from that conducted within
this state, and the other business is conducted entirely outside
the state, it is presumed that the two business operations are
unitary in nature, interrelated, connected, and interdependent
unless it can be shown to the contrary.
(e) Unity of ownership is not deemed to exist when a
corporation is involved unless that corporation is a member of a
group of two or more business entities and more than 50 percent
of the voting stock of each member of the group is directly or
indirectly owned by a common owner or by common owners, either
corporate or noncorporate, or by one or more of the member
corporations of the group. For this purpose, the term "voting
stock" shall include membership interests of mutual insurance
holding companies formed under section 60A.077.
(f) The net income and apportionment factors under section
290.191 or 290.20 of foreign corporations and other foreign
entities which are part of a unitary business shall not be
included in the net income or the apportionment factors of the
unitary business. A foreign corporation or other foreign entity
which is required to file a return under this chapter shall file
on a separate return basis. The net income and apportionment
factors under section 290.191 or 290.20 of foreign operating
corporations shall not be included in the net income or the
apportionment factors of the unitary business except as provided
in paragraph (g).
(g) The adjusted net income of a foreign operating
corporation shall be deemed to be paid as a dividend on the last
day of its taxable year to each shareholder thereof, in
proportion to each shareholder's ownership, with which such
corporation is engaged in a unitary business. Such deemed
dividend shall be treated as a dividend under section 290.21,
subdivision 4.
Dividends actually paid by a foreign operating corporation
to a corporate shareholder which is a member of the same unitary
business as the foreign operating corporation shall be
eliminated from the net income of the unitary business in
preparing a combined report for the unitary business. The
adjusted net income of a foreign operating corporation shall be
its net income adjusted as follows:
(1) any taxes paid or accrued to a foreign country, the
commonwealth of Puerto Rico, or a United States possession or
political subdivision of any of the foregoing shall be a
deduction; and
(2) the subtraction from federal taxable income for
payments received from foreign corporations or foreign operating
corporations under section 290.01, subdivision 19d, clause
(11) (10), shall not be allowed.
If a foreign operating corporation incurs a net loss,
neither income nor deduction from that corporation shall be
included in determining the net income of the unitary business.
(h) For purposes of determining the net income of a unitary
business and the factors to be used in the apportionment of net
income pursuant to section 290.191 or 290.20, there must be
included only the income and apportionment factors of domestic
corporations or other domestic entities other than foreign
operating corporations that are determined to be part of the
unitary business pursuant to this subdivision, notwithstanding
that foreign corporations or other foreign entities might be
included in the unitary business.
(i) Deductions for expenses, interest, or taxes otherwise
allowable under this chapter that are connected with or
allocable against dividends, deemed dividends described in
paragraph (g), or royalties, fees, or other like income
described in section 290.01, subdivision 19d, clause (11) (10),
shall not be disallowed.
(j) Each corporation or other entity, except a sole
proprietorship, that is part of a unitary business must file
combined reports as the commissioner determines. On the
reports, all intercompany transactions between entities included
pursuant to paragraph (h) must be eliminated and the entire net
income of the unitary business determined in accordance with
this subdivision is apportioned among the entities by using each
entity's Minnesota factors for apportionment purposes in the
numerators of the apportionment formula and the total factors
for apportionment purposes of all entities included pursuant to
paragraph (h) in the denominators of the apportionment formula.
(k) If a corporation has been divested from a unitary
business and is included in a combined report for a fractional
part of the common accounting period of the combined report:
(1) its income includable in the combined report is its
income incurred for that part of the year determined by
proration or separate accounting; and
(2) its sales, property, and payroll included in the
apportionment formula must be prorated or accounted for
separately.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 22. Minnesota Statutes 2000, section 290.191,
subdivision 2, is amended to read:
Subd. 2. [APPORTIONMENT FORMULA OF GENERAL APPLICATION.]
Except for those trades or businesses required to use a
different formula under subdivision 3 or section 290.35 or
290.36, and for those trades or businesses that receive
permission to use some other method under section 290.20 or
under subdivision 4, a trade or business required to apportion
its net income must apportion its income to this state on the
basis of the percentage obtained by taking the sum of:
(1) 75 percent of the percentage which the sales made
within this state in connection with the trade or business
during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period;
(2) 12.5 percent of the percentage which the total tangible
property used by the taxpayer in this state in connection with
the trade or business during the tax period is of the total
tangible property, wherever located, used by the taxpayer in
connection with the trade or business during the tax period; and
(3) 12.5 percent of the percentage which the taxpayer's
total payrolls paid or incurred in this state or paid in respect
to labor performed in this state in connection with the trade or
business during the tax period are of the taxpayer's total
payrolls paid or incurred in connection with the trade or
business during the tax period.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 23. Minnesota Statutes 2000, section 290.21,
subdivision 4, is amended to read:
Subd. 4. (a)(1) Eighty percent of dividends received by a
corporation during the taxable year from another corporation, in
which the recipient owns 20 percent or more of the stock, by
vote and value, not including stock described in section
1504(a)(4) of the Internal Revenue Code when the corporate stock
with respect to which dividends are paid does not constitute the
stock in trade of the taxpayer or would not be included in the
inventory of the taxpayer, or does not constitute property held
by the taxpayer primarily for sale to customers in the ordinary
course of the taxpayer's trade or business, or when the trade or
business of the taxpayer does not consist principally of the
holding of the stocks and the collection of the income and gains
therefrom; and
(2)(i) The remaining 20 percent of dividends if the
dividends received are the stock in an affiliated company
transferred in an overall plan of reorganization and the
dividend is eliminated in consolidation under Treasury
Department Regulation 1.1502-14(a), as amended through December
31, 1989; or
(ii) The remaining 20 percent of dividends if the dividends
are received from a corporation which is subject to tax under
section 290.35 or 290.36 and which is a member of an affiliated
group of corporations as defined by the Internal Revenue Code
and the dividend is eliminated in consolidation under Treasury
Department Regulation 1.1502-14(a), as amended through December
31, 1989, or is deducted under an election under section 243(b)
of the Internal Revenue Code.
(b) Seventy percent of dividends received by a corporation
during the taxable year from another corporation in which the
recipient owns less than 20 percent of the stock, by vote or
value, not including stock described in section 1504(a)(4) of
the Internal Revenue Code when the corporate stock with respect
to which dividends are paid does not constitute the stock in
trade of the taxpayer, or does not constitute property held by
the taxpayer primarily for sale to customers in the ordinary
course of the taxpayer's trade or business, or when the trade or
business of the taxpayer does not consist principally of the
holding of the stocks and the collection of income and gain
therefrom.
(c) The dividend deduction provided in this subdivision
shall be allowed only with respect to dividends that are
included in a corporation's Minnesota taxable net income for the
taxable year.
The dividend deduction provided in this subdivision does
not apply to a dividend from a corporation which, for the
taxable year of the corporation in which the distribution is
made or for the next preceding taxable year of the corporation,
is a corporation exempt from tax under section 501 of the
Internal Revenue Code.
The dividend deduction provided in this subdivision applies
to the amount of regulated investment company dividends only to
the extent determined under section 854(b) of the Internal
Revenue Code.
The dividend deduction provided in this subdivision shall
not be allowed with respect to any dividend for which a
deduction is not allowed under the provisions of section 246(c)
of the Internal Revenue Code.
(d) If dividends received by a corporation that does not
have nexus with Minnesota under the provisions of Public Law
Number 86-272 are included as income on the return of an
affiliated corporation permitted or required to file a combined
report under section 290.34, subdivision 2, then for purposes of
this subdivision the determination as to whether the trade or
business of the corporation consists principally of the holding
of stocks and the collection of income and gains therefrom shall
be made with reference to the trade or business of the
affiliated corporation having a nexus with Minnesota.
(e) The deduction provided by this subdivision does not
apply if the dividends are paid by a FSC as defined in section
922 of the Internal Revenue Code.
(f) If one or more of the members of the unitary group
whose income is included on the combined report received a
dividend, the deduction under this subdivision for each member
of the unitary business required to file a return under this
chapter is the product of: (1) 100 percent of the dividends
received by members of the group; (2) the percentage allowed
pursuant to paragraph (a) or (b); and (3) the percentage of the
taxpayer's business income apportionable to this state for the
taxable year under section 290.191 or 290.20.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 24. Minnesota Statutes 2000, section 290.9725, is
amended to read:
290.9725 [S CORPORATION.]
For purposes of this chapter, the term "S corporation"
means any corporation having a valid election in effect for the
taxable year under section 1362 of the Internal Revenue Code.
An S corporation shall not be subject to the taxes imposed by
this chapter, except:
(1) the taxes imposed under sections 290.0922, 290.92,
290.9727, 290.9728, and 290.9729; and
(2) the tax under sections 290.06, subdivision 1, and
290.0921 apply to a financial institution to which either
section 585 or 593 of the Internal Revenue Code applies or that
has a wholly owned subsidiary as described in section
1361(b)(3)(B) of the Internal Revenue Code which is a financial
institution under section 585 or 593 of the Internal Revenue
Code.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 25. Minnesota Statutes 2000, section 297I.20, is
amended to read:
297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSET.]
(a) An insurance company may offset against its premium tax
liability to this state any amount paid for assessments made for
insolvencies which occur after July 31, 1994, under sections
60C.01 to 60C.22; and any amount paid for assessments made after
July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to
61B.16, or under sections 61B.18 to 61B.32 as follows:
(1) Each such assessment shall give rise to an amount of
offset equal to 20 percent of the amount of the assessment for
each of the five calendar years following the year in which the
assessment was paid.
(2) The amount of offset initially determined for each
taxable year is the sum of the amounts determined under clause
(1) for that taxable year.
(b)(1) Each year the commissioner shall compare total
guaranty association assessments levied over the preceding five
calendar years to the sum of all premium tax and corporate
franchise tax revenues collected from insurance companies,
without reduction for any guaranty association assessment offset
in the preceding calendar year, referred to in this subdivision
as "preceding year insurance tax revenues."
(2) If total guaranty association assessments levied over
the preceding five years exceed the preceding year insurance tax
revenues, insurance companies must be allowed only a
proportionate part of the premium tax offset calculated under
paragraph (a) for the current calendar year.
(3) The proportionate part of the premium tax offset
allowed in the current calendar year is determined by
multiplying the amount calculated under paragraph (a) by a
fraction. The numerator of the fraction equals the preceding
year insurance tax revenues, and its denominator equals total
guaranty association assessments levied over the preceding
five-year period.
(4) The proportionate part of the premium tax offset that
is not allowed must be carried forward to subsequent tax years
and added to the amount of premium tax offset calculated under
paragraph (a) prior to application of the limitation imposed by
this paragraph.
(5) Any amount carried forward from prior years must be
allowed before allowance of the offset for the current year
calculated under paragraph (a).
(6) The premium tax offset limitation must be calculated
separately for (i) insurance companies subject to assessment
under sections 60C.01 to 60C.22, and (ii) insurance companies
subject to assessment under Minnesota Statutes 1992, sections
61B.01 to 61B.16, or 61B.18 to 61B.32.
(7) When the premium tax offset is limited by this
provision, the commissioner shall notify affected insurance
companies on a timely basis for purposes of completing premium
and corporate franchise tax returns.
(8) The guaranty associations created under sections 60C.01
to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16,
and 61B.18 to 61B.32, shall provide the commissioner with the
necessary information on guaranty association assessments.
(c)(1) If the offset determined by the application of
paragraphs (a) and (b) exceeds the greater of the insurance
company's premium tax liability under this section or its
corporate franchise tax liability under chapter 290 prior to
allowance of the credit for premium taxes, then the insurance
company may carry forward the excess, referred to in this
subdivision as the "carryforward credit" to subsequent taxable
years.
(2) The carryforward credit is allowed as an offset against
premium tax liability for the first succeeding year to the
extent that the premium tax liability for that year exceeds the
amount of the allowable offset for the year determined under
paragraphs (a) and (b).
(3) The carryforward credit must be reduced, but not below
zero, by the greater of the amount of the carryforward credit
allowed as an offset against the premium tax under this
paragraph or the amount of the carryforward credit allowed as an
offset against the insurance company's corporate franchise tax
liability under section 290.35, subdivision 6, paragraph (d).
The remainder, if any, of the carryforward credit must be
carried forward to succeeding taxable years until the entire
carryforward credit has been credited against the insurance
company's liability for premium tax under this chapter and
corporate franchise tax under chapter 290 if applicable for that
taxable year.
(d) When an insurer has offset against taxes its payment of
an assessment of the Minnesota life and health guaranty
association, and the association pays the insurer a refund with
respect to the assessment under Minnesota Statutes 1992, section
61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund
reduces the insurer's carryforward credit under paragraph (c).
If the refund exceeds the amount of the carryforward credit, the
excess amount must be repaid to the state by the insurers to the
extent of the offset in the manner the commissioner requires.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 26. Minnesota Statutes 2000, section 298.01,
subdivision 3b, is amended to read:
Subd. 3b. [DEDUCTIONS.] (a) For purposes of determining
taxable income under subdivision 3, the deductions from gross
income include only those expenses necessary to convert raw ores
to marketable quality. Such expenses include costs associated
with refinement but do not include expenses such as
transportation, stockpiling, marketing, or marine insurance that
are incurred after marketable ores are produced, unless the
expenses are included in gross income.
(b) The provisions of section 290.01, subdivisions 19c,
clauses (7) (6) and (11) (10), and 19d, clauses (7) and
(12) (11), are not used to determine taxable income.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 27. Minnesota Statutes 2000, section 298.01,
subdivision 4c, is amended to read:
Subd. 4c. [SPECIAL DEDUCTIONS.] (a) For purposes of
determining taxable income under subdivision 4, the following
modifications are allowed:
(1) the provisions of section 290.01, subdivisions 19c,
clauses (7) (6) and (11) (10), and 19d, clauses (7) and
(12) (11), are not used to determine taxable income; and
(2) for assets placed in service before January 1, 1990,
the deduction for depreciation will be the same amount allowed
under chapter 290, except that after an asset has been fully
depreciated for federal income tax purposes any remaining
depreciable basis is allowed as a deduction using the
straight-line method over the following number of years:
(i) three-year property, one year;
(ii) five- and seven-year property, two years;
(iii) ten-year property, five years; and
(iv) all other property, seven years.
No deduction is allowed if an asset is fully depreciated
for occupation tax purposes before January 1990.
(b) For purposes of determining the deduction allowed under
paragraph (a), clause (2), the remaining depreciable basis of
property placed in service before January 1, 1990, is calculated
as follows:
(1) the adjusted basis of the property on December 31,
1989, which was used to calculate the hypothetical corporate
franchise tax under Minnesota Statutes 1988, section 298.40,
including salvage value; less
(2) deductions for depreciation allowed under section
290.01, subdivision 19e.
(c) The basis for determining gain or loss on sale or
disposition of assets placed in service before January 1, 1990,
is the basis determined under paragraph (b), less the deductions
allowed under paragraph (a), clause (2).
(d) The amount of net operating loss incurred in a taxable
year beginning before January 1, 1990, that may be carried over
to a taxable year beginning after December 31, 1989, is the
amount of net operating loss carryover determined in the
calculation of the hypothetical corporate franchise tax under
Minnesota Statutes 1988, sections 298.40 and 298.402.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 28. Minnesota Statutes 2000, section 469.1732,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORITY.] A business that conducts
business activity within a border city development zone
designated under section 469.1731 may qualify for the property
tax exemption under section 272.0212, the corporate franchise
tax credit under subdivision 2, and the sales tax exemption
under section 469.1734, subdivision 6.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 29. [APPROPRIATION; TAXPAYER ASSISTANCE.]
(a) $200,000 is appropriated for fiscal year 2002 from the
general fund to the commissioner of revenue to make grants to
one or more nonprofit organizations, qualifying under section
501(c)(3) of the Internal Revenue Code of 1986, to coordinate,
facilitate, encourage, and aid in the provision of taxpayer
assistance services. This appropriation is available for fiscal
years 2002 and 2003 and does not become a part of the base.
(b) For purposes of this section, "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 Internal
Revenue Service.
Sec. 30. [REPEALER.]
(a) Minnesota Statutes 2000, section 290.0673, is repealed
effective for tax years beginning after December 31, 2001.
(b) Minnesota Statutes 2000, sections 290.06, subdivision
26; 290.095, subdivision 1a; 290.21, subdivision 3; 290.35; and
290.9726, subdivision 7, are repealed effective for tax years
beginning after December 31, 2000.
(c) Minnesota Statutes 2000, sections 469.1732, subdivision
2; and 469.1734, subdivision 4, are repealed effective the day
following final enactment.
ARTICLE 10
FEDERAL UPDATE
Section 1. Minnesota Statutes 2000, 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, 1999 June
15, 2001.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2000, section 290.01,
subdivision 6b, is amended to read:
Subd. 6b. [FOREIGN OPERATING CORPORATION.] The term
"foreign operating corporation," when applied to a corporation,
means a domestic corporation with the following characteristics:
(1) it is part of a unitary business at least one member of
which is taxable in this state; and
(2) it is not a foreign sales corporation under section 922
of the Internal Revenue Code, as amended through December 31,
1999, for the taxable year; and
(3) either (i) the average of the percentages of its
property and payrolls assigned to locations inside the United
States and the District of Columbia, excluding the commonwealth
of Puerto Rico and possessions of the United States, as
determined under section 290.191 or 290.20, is 20 percent or
less; or (ii) it has in effect a valid election under section
936 of the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2001.
Sec. 3. Minnesota Statutes 2000, 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 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, and the
provisions of section 318 of the Consolidated Appropriation Act
of 2001, Public Law Number 106-554, 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, 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, and the provisions of section 316 of the Consolidated
Appropriation Act of 2001, Public Law Number 106-554, 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, 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
106-170, the provisions of the Installment Tax Correction Act of
2000, Public Law Number 106-573, and the provisions of section
309 of the Consolidated Appropriation Act of 2001, Public Law
Number 106-554, 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 provisions of the FSC Repeal and Extraterritorial
Income Exclusion Act of 2000, Public Law Number 106-519, shall
become effective at the time it became effective for federal
purposes.
The Internal Revenue Code of 1986, as amended through
December 31, 1999, shall be in effect for taxable years
beginning after December 31, 1999. The provisions of sections
306 and 401 of the Consolidated Appropriation Act of 2001,
Public Law Number 106-554, and the provision of section
632(b)(2)(A) of the Economic Growth and Tax Relief
Reconciliation Act of 2001, Public Law Number 107-16, shall
become effective at the same time it became effective for
federal purposes.
The Internal Revenue Code of 1986, as amended through
December 31, 2000, shall be in effect for taxable years
beginning after December 31, 2000. The provisions of sections
659a and 671 of the Economic Growth and Tax Relief
Reconciliation Act of 2001, Public Law Number 107-16, shall
become effective at the same time it became effective for
federal purposes.
The Internal Revenue Code of 1986, as amended through June
15, 2001, shall be in effect for taxable years beginning after
December 31, 2001.
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.
Sec. 4. Minnesota Statutes 2000, 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; and
(15) the amount of net income excluded under section 114 of
the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 5. Minnesota Statutes 2000, 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;
(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; and
(18) for a corporation whose foreign sales corporation, as
defined in section 922 of the Internal Revenue Code, constituted
a foreign operating corporation during the taxable years ending
during calendar year 1992 and a return was filed by August 15,
1996, claiming the deduction under this subdivision for income
received from the foreign operating corporation, an amount equal
to 1.23 multiplied by the amount of income excluded under
section 114 of the Internal Revenue Code, provided the income is
not income of a foreign operating company.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2000.
Sec. 6. Minnesota Statutes 2000, 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, 1999 June
15, 2001.
[EFFECTIVE DATE.] This section is effective at the same
time and in the same manner as the federal changes made by the
FSC Repeal and Extraterritorial Income Exclusion Act of 2000,
Public Law Number 106-519, and the Consolidated Appropriation
Act of 2001, Public Law Number 106-554, becomes effective.
Sec. 7. Minnesota Statutes 2000, 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 1.9125 percent of the first $4,460 of earned income. The
credit is reduced by 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 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 5.73 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 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 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) For tax years beginning after December 31, 2001, and
before December 31, 2004, the $5,770 in paragraph (b) is
increased to $6,770, the $15,080 in paragraph (c) is increased
to $16,080, and the $17,890 in paragraph (d) is increased to
$18,890 for married taxpayers filing joint returns.
(h) For tax years beginning after December 31, 2004, and
before December 31, 2007, the $5,770 in paragraph (b) is
increased to $7,770, the $15,080 in paragraph (c) is increased
to $17,080, and the $17,890 in paragraph (d) is increased to
$19,890 for married taxpayers filing joint returns.
(i) For tax years beginning after December 31, 2007, and
before December 31, 2010, the $5,770 in paragraph (b) is
increased to $8,770, the $15,080 in paragraph (c) is increased
to $18,080 and the $17,890 in paragraph (d) is increased to
$20,890 for married taxpayers filing joint returns.
(j) 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 tax years
beginning after December 31, 2001.
Sec. 8. Minnesota Statutes 2000, section 290.0671,
subdivision 1a, is amended to read:
Subd. 1a. [DEFINITIONS.] For purposes of this section, the
terms "qualifying child," "earned income," and "modified
adjusted gross income" have the meanings given in section 32(c)
of the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2001.
Sec. 9. Minnesota Statutes 2000, 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, 1999 June 15, 2001.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 2000, 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,
1999 2000.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 11
CIVIL AND CRIMINAL PENALTIES
Section 1. Minnesota Statutes 2000, 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, 2a, 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 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 tax years
beginning after December 31, 2000, and for estate tax returns
due after January 1, 2002.
Sec. 2. Minnesota Statutes 2000, 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 a corporate franchise, fiduciary
income, mining company, estate, partnership, S corporation, or
nonresident entertainer tax is not paid within the time
specified for payment, a penalty of six percent is added to the
unpaid tax, except that if a corporation or mining company meets
the requirements of section 289A.19, subdivision 2, the penalty
is not imposed.
(b) For the taxes listed in paragraph (a), in addition to
the penalty in that paragraph, whether imposed or not, if a
return or amended return is filed after the due date, without
regard to extensions, and any tax reported as remaining due is
not remitted with the return or amended return, a penalty of
five percent of the tax not paid is added to the tax. If the
commissioner issues an order assessing additional tax for a tax
listed in paragraph (a), and the tax is not paid within 60 days
after the mailing of the order or, if appealed, within 60 days
after final resolution of the appeal, a penalty of five percent
of the unpaid tax is added to the tax.
(c) 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. If an individual income tax is not paid
within the time specified for payment, a penalty of four percent
is added to the unpaid tax. There is a presumption of
reasonable cause for the late payment if the individual: (i)
pays by the due date of the return at least 90 percent of the
amount of tax, after credits other than withholding and
estimated payments, shown owing on the return; (ii) files the
return within six months after the due date; and (iii) pays the
remaining balance of the reported tax when the return is filed.
(d) If the commissioner issues an order assessing
additional individual income tax, and the tax is not paid within
60 days after the mailing of the order or, if appealed, within
60 days after final resolution of the appeal, a penalty of four
percent of the unpaid tax is added to the tax.
(b) (e) 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 tax years
beginning after December 31, 2000, and for estate tax returns
due after January 1, 2002.
Sec. 3. Minnesota Statutes 2000, section 289A.60,
subdivision 2, is amended to read:
Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If
a taxpayer fails to make and file a return other than an income
tax return of an individual, a withholding return, or sales or
use tax return, within the time prescribed or an extension, a
penalty is added to the tax. The penalty is three percent of
the amount of tax not paid on or before the date prescribed for
payment of the tax including any extensions if the failure is
for not more than 30 days, with an additional five percent of
the amount of tax remaining unpaid during each additional 30
days or fraction of 30 days, during which the failure continues,
not exceeding 23 percent in the aggregate.
If a taxpayer fails to file an individual income tax return
within six months after the date prescribed for filing of the
return, a penalty of ten percent of the amount of tax not paid
by the end of that six-month period is added to the tax.
If a taxpayer fails to file a withholding or sales or use
tax return within the time prescribed, including an extension, a
penalty of five percent of the amount of tax not timely paid by
the end of that period is added to the tax.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000, and for estate tax returns
due after January 1, 2002.
Sec. 4. Minnesota Statutes 2000, section 289A.60, is
amended by adding a subdivision to read:
Subd. 2a. [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an
individual income tax is not paid within 180 days after the date
of filing of a return or, in the case of taxes assessed by the
commissioner, within 180 days after the assessment date or, if
appealed, within 180 days after final resolution of the appeal,
an extended delinquency penalty of five percent of the tax
remaining unpaid is added to the amount due.
(b) If a corporate franchise, fiduciary income, mining
company, estate, partnership, S corporation, or nonresident
entertainer tax return is not filed within 30 days after written
demand for the filing of a delinquent return, an extended
delinquency penalty of five percent of the tax not paid prior to
the demand is added to the tax, or in the case of an individual
income tax return, a minimum penalty of $100 or the five percent
penalty is imposed, whichever amount is greater.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000, and for estate tax returns
due after January 1, 2002.
Sec. 5. Minnesota Statutes 2000, section 289A.60,
subdivision 7, is amended to read:
Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] If an individual
a taxpayer files what purports to be a tax return required by
chapter 290 or a claim for refund but which does not contain
information on which the substantial correctness of
the assessment purported return or claim for refund may be
judged or contains information that on its face shows that the
assessment purported return or claim for refund is substantially
incorrect and the conduct is due to a position that is frivolous
or a desire that appears on the purported return or claim for
refund to delay or impede the administration of Minnesota tax
laws, then the individual shall pay a penalty of $500. In a
proceeding involving the issue of whether or not a person is
liable for this penalty, the burden of proof is on the
commissioner.
[EFFECTIVE DATE.] This section is effective for returns or
claims for refunds filed on or after the day following final
enactment.
Sec. 6. Minnesota Statutes 2000, section 297F.20,
subdivision 3, is amended to read:
Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A
person who files with the commissioner a return, report, or
other document, or who maintains or provides invoices subject to
review by the commissioner under this chapter, known by the
person to be fraudulent or false concerning a material matter,
is guilty of a felony.
(b) A person who knowingly aids or assists in, or advises
in the preparation or presentation of a return, report, invoice,
or other document that is fraudulent or false concerning a
material matter, whether or not the falsity or fraud is
committed with the knowledge or consent of the person authorized
or required to present the return, report, invoice, or other
document, is guilty of a felony.
[EFFECTIVE DATE.] This section is effective for crimes
occurring on or after August 1, 2001.
Sec. 7. [APPROPRIATION.]
$545,000 in fiscal year 2003 is appropriated from the
general fund to the commissioner of revenue to implement
sections 2 to 4. $520,000 of the appropriation is for a
one-time expenditure related to system programming costs.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 8. [REPEALER.]
Minnesota Statutes 2000, section 289A.60, subdivision 3, is
repealed.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000, and for estate tax returns
due after January 1, 2002.
ARTICLE 12
SALES AND USE TAXES
Section 1. Minnesota Statutes 2000, 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) For a fiscal year ending before July 1, 2002, 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 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 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.
Sec. 2. Minnesota Statutes 2000, section 289A.31,
subdivision 7, is amended to read:
Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax
required to be collected by the retailer under chapter 297A
constitutes a debt owed by the retailer to Minnesota, and the
sums collected must be held as a special fund in trust for the
state of Minnesota.
A retailer who does not maintain a place of business within
this state as defined by section 297A.21, subdivision 1, shall
not be indebted to Minnesota for amounts of tax that it was
required to collect but did not collect unless the retailer knew
or had been advised by the commissioner of its obligation to
collect the tax.
(b) The use tax required to be paid by a purchaser is a
debt owed by the purchaser to Minnesota.
(c) The tax imposed by chapter 297A, and interest and
penalties, is a personal debt of the individual required to file
a return from the time the liability arises, irrespective of
when the time for payment of that liability occurs. The debt
is, in the case of the executor or administrator of the estate
of a decedent and in the case of a fiduciary, that of the
individual in an official or fiduciary capacity unless the
individual has voluntarily distributed the assets held in that
capacity without reserving sufficient assets to pay the tax,
interest, and penalties, in which case the individual is
personally liable for the deficiency.
(d) Liability for payment of sales and use taxes includes
any responsible person or entity described in the personal
liability provisions of section 270.101.
(e) Any amounts collected, even if erroneously or illegally
collected, from a purchaser under a representation that they are
taxes imposed under chapter 297A are state funds from the time
of collection and must be reported on a return filed with the
commissioner. The amounts collected are not subject to refund
unless the seller submits written evidence to the commissioner
that the tax and any interest earned on the tax has been or will
be refunded or credited to the purchaser by the seller.
(f) The tax imposed under chapter 297A on sales of tickets
to the premises of or events sponsored by the state agricultural
society and conducted on the state fairgrounds during the period
of the annual state fair may be retained by the state
agricultural society if the funds are used and matched as
required under section 37.13, subdivision 2.
[EFFECTIVE DATE.] This section is effective for amounts
collected after June 30, 2001.
Sec. 3. Minnesota Statutes 2000, section 289A.50,
subdivision 2, is amended to read:
Subd. 2. [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If
a vendor has collected from a purchaser and remitted to the
state a tax on a transaction that is not subject to the tax
imposed by chapter 297A, the tax is refundable to the vendor
only if and to the extent that it the tax and any interest
earned on the tax is credited to amounts due to the vendor by
the purchaser or returned to the purchaser by the vendor. In
addition to the requirements of subdivision 1, a claim for
refund under this subdivision must state in writing that the tax
and interest earned on the tax has been or will be refunded or
credited to the purchaser by the vendor.
[EFFECTIVE DATE.] This section is effective for claims for
refunds after June 30, 2001.
Sec. 4. [295.60] [SPECIAL FUR CLOTHING TAX.]
Subdivision 1. [IMPOSITION.] If clothing made of fur is
not subject to the sales tax under chapter 297A, a tax is
imposed on each furrier equal to 6.5 percent of gross revenues
from retail sales in Minnesota of clothing made from fur.
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Commissioner" means the commissioner of revenue.
(c) "Furrier" means a retailer that sells clothing made of
fur.
(d) "Clothing made of fur" means articles of clothing made
of fur on the hide or pelt, and articles of clothing of which
such fur is the component material of chief value, but only if
such value is more than three times the value of the next most
valuable material.
(e) "Retail sale" has the meaning given in section 297A.61,
subdivision 4.
Subd. 3. [PAYMENT.] (a) Each furrier shall make estimated
payments of the taxes for the calendar year in quarterly
installments to the commissioner by April 15, July 15, October
15, and January 15 of the following calendar year.
(b) Estimated tax payments are not required if:
(1) the tax for the current calendar year is less than
$500; or
(2) the tax for the previous calendar year is less than
$500, if the taxpayer had a tax liability and was doing business
the entire year.
(c) Underpayment of estimated installments bear interest at
the rate specified in section 270.75, from the due date of the
payment until paid or until the due date of the annual return,
whichever comes first. An underpayment of an estimated
installment is the difference between the amount paid and the
lesser of (1) 90 percent of one-quarter of the tax for the
calendar year or (2) one-quarter of the total tax for the
previous calendar year if the taxpayer had a tax liability and
was doing business the entire year.
Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer
with an aggregate tax liability of $120,000 or more during a
fiscal year ending June 30 must remit all liabilities by
electronic means.
Subd. 5. [ANNUAL RETURN.] The taxpayer must file an annual
return reconciling the estimated payments by March 15 of the
following calendar year.
Subd. 6. [FORM OF RETURNS.] The estimated payments and
annual return must contain the information and be in the form
prescribed by the commissioner.
Subd. 7. [APPLICATION OF OTHER CHAPTERS.] Unless
specifically provided otherwise by this section, the
enforcement, interest, and penalty provisions under chapter 294,
appeal provisions in sections 289A.43 and 289A.65, criminal
penalties in section 289A.63, refunds provisions in section
289A.50, and collection and rulemaking provisions under chapter
270, apply to a liability for the taxes imposed under this
section.
Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid
on an overpayment refunded or credited to the taxpayer from the
date of payment of the tax until the date the refund is paid or
credited. For purposes of this subdivision, the date of payment
is the due date of the return or the date of actual payment of
the tax, whichever is later.
Subd. 9. [DEPOSIT OF REVENUES.] The commissioner shall
deposit all revenues, including penalties and interest, derived
from the tax imposed by this section in the general fund.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2001.
Sec. 5. Minnesota Statutes 2000, section 297A.01,
subdivision 5, is amended to read:
Subd. 5. "Storage" includes any keeping or retention in
Minnesota for any purpose except sale in the regular course of
business or subsequent use solely outside Minnesota of tangible
personal property.
[EFFECTIVE DATE; INSTRUCTIONS TO REVISOR.] (a) This section
is effective for storage, use, or consumption occurring after
June 30, 2001, but refunds, based on claims that meet the
requirements of all other applicable provisions of law, shall be
issued for and tax not imposed on tangible personal property
stored in Minnesota after June 30, 1997, and before July 1,
2001, if (1) the property was kept or retained in a public
warehouse or in a common carrier's or for-hire carrier's storage
facility, (2) the property was shipped or brought into Minnesota
by common carrier or for-hire carrier for the purpose of
subsequently being transported outside Minnesota, and (3) the
property is thereafter used solely outside Minnesota or in the
course of interstate commerce.
(b) In the next edition of Minnesota Statutes, the revisor
shall codify the amendment to this section in Minnesota
Statutes, section 297A.61, subdivision 5.
Sec. 6. Minnesota Statutes 2000, section 297A.25,
subdivision 28, is amended to read:
Subd. 28. [WASTE PROCESSING EQUIPMENT.] The gross receipts
from the sale of and storage, use, or consumption of equipment
used for processing solid or hazardous waste at a resource
recovery facility, as defined in section 115A.03, subdivision
28, are exempt, including pollution control equipment at a
resource recovery facility that burns refuse-derived fuel or
mixed municipal solid waste as its primary fuel. An electric
generation facility that processes and utilizes waste tires as
its primary fuel is a resource recovery facility for the
purposes of this section.
[EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is
effective for purchases and sales made after the date of final
enactment. In the next edition of Minnesota Statutes, the
revisor of statutes shall codify the amendment to this section
in section 297A.68, subdivision 24.
Sec. 7. Minnesota Statutes 2000, section 297A.61,
subdivision 2, is amended to read:
Subd. 2. [PERSON.] (a) "Person" includes any individual,
and any or group or and any combination of individuals,
groups, or individuals and groups acting as a unit, and the
plural as well as the singular number.
(b) Person includes a firm, partnership, joint venture,
limited liability company, association, cooperative, social
club, fraternal organization, municipal or private corporation
whether or not organized for profit, estates, trusts, business
trusts estate, trust, business trust, receiver, trustee,
syndicate, the United States, and a state and its political
subdivisions.
(c) Person includes, but is not limited to, directors and
officers of corporations, governors and managers of a limited
liability company, or members of partnerships who, either
individually or jointly with others, have the control,
supervision, or responsibility of filing returns and making
payment of the amount of tax imposed by this chapter.
(d) Person also includes any agent or consignee of any
individual or organization enumerated listed in this subdivision.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 8. Minnesota Statutes 2000, section 297A.61,
subdivision 3, is amended to read:
Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase"
include, but are not limited to, each of the transactions listed
in this subdivision.
(b) Sale and purchase include:
(1) any transfer of title or possession, or both, of
tangible personal property, whether absolutely or conditionally,
for a consideration in money or by exchange or barter; and
(2) the leasing of or the granting of a license to use or
consume, for a consideration in money or by exchange or barter,
tangible personal property, other than a manufactured home used
for residential purposes for a continuous period of 30 days or
more.
(c) Sale and purchase include the production, fabrication,
printing, or processing of tangible personal property for a
consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication,
printing, or processing.
(d) Sale and purchase include the furnishing, preparing, or
serving for a consideration of food or drinks. Notwithstanding
section 297A.67, subdivision 2, taxable food or drinks
include includes, but are is not limited to, the following:
(1) prepared food or drinks sold by the retailer for
immediate consumption on the retailer's premises. Food and
drinks sold within a building or grounds that require an
admission charge for entrance are presumed to be sold for
consumption on the premises;
(2) food or drinks prepared by the retailer for immediate
consumption either on or off the retailer's premises. For
purposes of this subdivision, "food or drinks prepared for
immediate consumption" means any food product upon which an act
of preparation including, but not limited to, cooking, mixing,
sandwich making, blending, heating, or pouring has been
performed by the retailer so the food product may be immediately
consumed by the purchaser;
(3) ice cream, ice milk, frozen yogurt products, or frozen
novelties sold in single or individual servings including, but
not limited to, cones, sundaes, and snow cones;
(4) (2) soft drinks and other beverages, including all
carbonated and noncarbonated beverages or drinks sold in liquid
form, but not including beverages or drinks which contain milk
or milk products, beverages or drinks containing 15 or more
percent fruit juice, and noncarbonated and noneffervescent
bottled water sold in individual containers of one-half gallon
or more in size;
(5) gum, (3) candy, and candy products; and
(6) ice;
(7) (4) all food sold from through vending machines;.
(8) all food for immediate consumption sold from concession
stands and vehicles;
(9) party trays;
(10) all meals and single servings of packaged snack food
sold in restaurants and bars; and
(11) bakery products that are:
(i) prepared by the retailer for consumption on the
retailer's premises;
(ii) sold at a place that charges admission;
(iii) sold from vending machines; or
(iv) sold in single or individual servings from concession
stands, vehicles, bars, and restaurants.
For purposes of this paragraph, "single or individual
servings" does not include products when sold in bulk containers
or bulk packaging.
For purposes of this paragraph, "premises" means the total
space and facilities, including buildings, grounds, and parking
lots that are made available or that are available for use by
the retailer or customer for the purpose of sale or consumption
of prepared food and drinks. The premises of a caterer is the
place where the catered food or drinks are served.
(e) A sale and a purchase includes the furnishing for a
consideration of electricity, gas, water, or steam for use or
consumption within this state or local exchange telephone
service, intrastate toll service, and interstate toll service,
if that service originates from and is charged to a telephone
located in this state. Telephone service includes (1) paging
services, and (2) private communication service, as defined in
United States Code, title 26, section 4252(d), except for
private communication service purchased by an agent acting on
behalf of the state lottery. Telephone service does not include
services purchased with a prepaid telephone calling card. The
furnishing for a consideration of access to telephone services
by a hotel to its guests is a sale. The furnishing for a
consideration of items listed in this paragraph by a municipal
corporation is a sale.
(f) A sale and a purchase includes the transfer for a
consideration of computer software.
(g) A sale and a purchase includes the furnishing for a
consideration of taxable services as defined in subdivision
16. the following services:
(1) the privilege of admission to places of amusement,
recreational areas, or athletic events, and the making available
of amusement devices, tanning facilities, reducing salons, steam
baths, turkish baths, health clubs, and spas or athletic
facilities;
(2) lodging and related services by a hotel, rooming house,
resort, campground, motel, or trailer camp and the granting of
any similar license to use real property other than the renting
or leasing of it for a continuous period of 30 days or more;
(3) parking services, whether on a contractual, hourly, or
other periodic basis, except for parking at a meter;
(4) the granting of membership in a club, association, or
other organization if:
(i) the club, association, or other organization makes
available for the use of its members sports and athletic
facilities, without regard to whether a separate charge is
assessed for use of the facilities; and
(ii) use of the sports and athletic facility is not made
available to the general public on the same basis as it is made
available to members.
Granting of membership means both one-time initiation fees and
periodic membership dues. Sports and athletic facilities
include golf courses; tennis, racquetball, handball, and squash
courts; basketball and volleyball facilities; running tracks;
exercise equipment; swimming pools; and other similar athletic
or sports facilities; and
(5) services as provided in this clause:
(i) laundry and dry cleaning services including cleaning,
pressing, repairing, altering, and storing clothes, linen
services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry
cleaning services do not include services provided by coin
operated facilities operated by the customer;
(ii) motor vehicle washing, waxing, and cleaning services,
including services provided by coin operated facilities operated
by the customer, and rustproofing, undercoating, and towing of
motor vehicles;
(iii) building and residential cleaning, maintenance, and
disinfecting and exterminating services;
(iv) detective, security, burglar, fire alarm, and armored
car services; but not including services performed within the
jurisdiction they serve by off-duty licensed peace officers as
defined in section 626.84, subdivision 1, or services provided
by a nonprofit organization for monitoring and electronic
surveillance of persons placed on in-home detention pursuant to
court order or under the direction of the Minnesota department
of corrections;
(v) pet grooming services;
(vi) lawn care, fertilizing, mowing, spraying and sprigging
services; garden planting and maintenance; tree, bush, and shrub
pruning, bracing, spraying, and surgery; indoor plant care;
tree, bush, shrub, and stump removal; and tree trimming for
public utility lines. Services performed under a construction
contract for the installation of shrubbery, plants, sod, trees,
bushes, and similar items are not taxable;
(vii) massages, except when provided by a licensed health
care facility or professional or upon written referral from a
licensed health care facility or professional for treatment of
illness, injury, or disease; and
(viii) the furnishing of lodging, board, and care services
for animals in kennels and other similar arrangements, but
excluding veterinary and horse boarding services.
In applying the provisions of this chapter, the terms
"tangible personal property" and "sales at retail" include
taxable services and the provision of taxable services, unless
specifically provided otherwise. Services performed by an
employee for an employer are not taxable. Services performed by
a partnership or association for another partnership or
association are not taxable if one of the entities owns or
controls more than 80 percent of the voting power of the equity
interest in the other entity. Services performed between
members of an affiliated group of corporations are not taxable.
For purposes of this section, "affiliated group of corporations"
includes those entities that would be classified as members of
an affiliated group under United States Code, title 26, section
1504, and that are eligible to file a consolidated tax return
for federal income tax purposes.
(h) A sale and a purchase includes the furnishing for a
consideration of tangible personal property or taxable services
by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies,
instrumentalities, or political subdivisions.
(i) A sale and a purchase includes the furnishing for a
consideration of telecommunications services, including cable
television services and direct satellite services.
Telecommunications services are taxed to the extent allowed
under federal law if those services:
(1) either (i) originate and terminate in this state; or
(ii) originate in this state and terminate outside the state and
the service is charged to a telephone number customer located in
this state or to the account of any transmission instrument in
this state; or (iii) originate outside this state and terminate
in this state and the service is charged to a telephone number
customer located in this state or to the account of any
transmission instrument in this state; or
(2) are rendered by providing a private communications
service for which the customer has one or more locations within
Minnesota connected to the service and the service is charged to
a telephone number customer located in this state or to the
account of any transmission instrument in this state.
All charges for mobile telecommunications services, as
defined in United States Code, title 4, section 124, are deemed
to be provided by the customer's home service provider and
sourced to the customer's place of primary use and are subject
to tax based upon the customer's place of primary use in
accordance with the Mobile Telecommunications Sourcing Act,
United States Code, title 4, sections 116 to 126. All other
definitions and provisions of the Mobile Telecommunications
Sourcing Act as provided in United States Code, title 4, are
hereby adopted.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001, except that paragraph (d) is
effective for sales and purchases occurring after December 31,
2001, and paragraph (i) and the amendments to paragraph (e) are
effective for sales and purchases made after July 31, 2001.
Sec. 9. Minnesota Statutes 2000, section 297A.61,
subdivision 4, is amended to read:
Subd. 4. [RETAIL SALE.] (a) A "retail sale" means a any
sale, lease, or rental for any purpose other than resale in the
regular course of business, sublease, or subrent.
(b) A sale of property used by the owner only by leasing it
to others or by holding it in an effort to lease it, and put to
no use by the owner other than resale after the lease or effort
to lease, is a sale of property for resale.
(c) A sale of master computer software that is purchased
and used to make copies for sale or lease is a sale of property
for resale.
(d) A sale of building materials, supplies, and equipment
to owners, contractors, subcontractors, or builders for the
erection of buildings or the alteration, repair, or improvement
of real property is a retail sale in whatever quantity sold,
whether the sale is for purposes of resale in the form of real
property or otherwise.
(e) A sale of carpeting, linoleum, or similar floor
covering to a person who provides for installation of the floor
covering is a retail sale and not a sale for resale since a sale
of floor covering which includes installation is a contract for
the improvement of real property.
(f) A sale of shrubbery, plants, sod, trees, and similar
items to a person who provides for installation of the items is
a retail sale and not a sale for resale since a sale of
shrubbery, plants, sod, trees, and similar items that includes
installation is a contract for the improvement of real property.
(g) A sale of tangible personal property that is awarded as
prizes is a retail sale and is not considered a sale of property
for resale.
(h) A sale of tangible personal property utilized or
employed in the furnishing or providing of services under
subdivision 16 3, paragraph (b) (g), clause (1), including, but
not limited to, property given as promotional items, is a retail
sale and is not considered a sale of property for resale.
(i) A sale of tangible personal property used in conducting
lawful gambling under chapter 349 or the state lottery under
chapter 349A, including, but not limited to, property given as
promotional items, is a retail sale and is not considered a sale
of property for resale.
(j) A sale of machines, equipment, or devices that are used
to furnish, provide, or dispense goods or services, including,
but not limited to, coin-operated devices, is a retail sale and
is not considered a sale of property for resale.
(k) In the case of a lease, a retail sale occurs when an
obligation to make a lease payment becomes due under the terms
of the agreement or the trade practices of the lessor.
(l) In the case of a conditional sales contract, a retail
sale occurs upon the transfer of title or possession of the
tangible personal property.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001, except that paragraph (a) is
effective January 1, 2002.
Sec. 10. Minnesota Statutes 2000, section 297A.61,
subdivision 6, is amended to read:
Subd. 6. [USE.] (a) "Use" includes the exercise of a right
or power incident to the ownership of any interest in tangible
personal property, or taxable services, purchased from a
retailer, other than the sale of that property in the regular
course of business.
(b) Use includes the consumption of printed materials in
the creation of nontaxable advertising that is distributed,
either directly or indirectly, within Minnesota.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 11. Minnesota Statutes 2000, section 297A.61,
subdivision 7, is amended to read:
Subd. 7. [SALES PRICE.] (a) "Sales price" means the total
consideration for a retail sale, valued in money, whether paid
in money or by barter or exchange. the measure subject to sales
tax, and means the total amount of consideration, including
cash, credit, property, and services, for which personal
property or services are sold, leased, or rented, valued in
money, whether received in money or otherwise, without any
deduction for the following:
(1) the seller's cost of the property sold;
(2) the cost of materials used, labor or service cost,
interest, losses, all costs of transportation to the seller, all
taxes imposed on the seller, and any other expenses of the
seller;
(3) charges by the seller for any services necessary to
complete the sale, other than delivery and installation charges;
(4) delivery charges;
(5) installation charges; and
(6) the value of exempt property given to the purchaser
when taxable and exempt personal property have been bundled
together and sold by the seller as a single product or piece of
merchandise.
(b) Sales price includes:
(1) the cost of the property sold, cost of materials used,
labor or service cost, interest, or discount allowed after the
sale is consummated;
(2) the cost of transportation incurred prior to the time
of sale;
(3) any amount for which credit is given by the seller to
the purchaser;
(4) charges for services that are part of a sale; or
(5) any other expense whatsoever.
(c) (b) Sales price does not include the following:
(1) an amount allowed as credit for tangible personal
property taken in trade for resale discounts, including cash,
terms, or coupons that are not reimbursed by a third party and
that are allowed by the seller and taken by a purchaser on a
sale;
(2) charges of up to 15 percent in lieu of tips if the
charges are separately stated interest, financing, and carrying
charges from credit extended on the sale of personal property or
services, if the amount is separately stated on the invoice,
bill of sale, or similar document given to the purchaser; and
(3) interest, financing, or carrying charges if the charges
are separately stated; any taxes legally imposed directly on the
consumer that are separately stated on the invoice, bill of
sale, or similar document given to the purchaser.
(4) charges for labor or services used in installing or
applying the property sold if the charges are separately stated;
(5) transportation charges if the transportation occurs
after the retail sale of the property if the charges are
separately stated;
(6) cash discounts allowed and taken on sales or the amount
refunded either in cash or in credit for property returned by
purchasers;
(7) the rental motor vehicle tax imposed under section
297A.64; or
(8) the amount of any tax imposed by the United States on
communications services under United States Code, title 26,
section 4251(a).
(d) Notwithstanding paragraph (c), "sales price," for
purposes of sales of ready-mixed concrete sold from a
ready-mixed concrete truck, includes any transportation,
delivery, or other service charges, and no deduction is allowed
for those charges, whether or not the charges are separately
stated.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 12. Minnesota Statutes 2000, section 297A.61,
subdivision 9, is amended to read:
Subd. 9. [RETAILER AND SELLER.] "Retailer" and "seller"
means every any person engaged in making retail sales, leases,
or rentals of personal property or services.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 13. Minnesota Statutes 2000, section 297A.61,
subdivision 10, is amended to read:
Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible
personal property" means corporeal personal property of any
kind, including property that is to become real property as a
result of incorporation, attachment, or installation following
its acquisition.
(b) Tangible personal property includes, but is not limited
to:
(1) computer software, whether contained on tape, discs,
cards, or other devices; and
(2) prepaid telephone calling cards.
(c) Tangible personal property does not include:
(1) large ponderous machinery and equipment used in a
business or production activity which at common law would be
considered to be real property;
(2) property which is subject to an ad valorem property
tax;
(3) property described in section 272.02, subdivision 9,
clauses (a) to (d); and
(4) property described in section 272.03, subdivision 2,
clauses (3) and (5).
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 14. Minnesota Statutes 2000, section 297A.61,
subdivision 12, is amended to read:
Subd. 12. [FARM MACHINERY.] (a) "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, plants, forage, grains, and bees
and apiary products.
(b) Farm machinery includes:
(1) machinery for the preparation, seeding, or cultivation
of soil for growing agricultural crops and sod, for the
harvesting and threshing of agricultural products, or for the
harvesting or mowing of sod;
(2) barn cleaners, milking systems, grain dryers, automatic
feeding systems including stationary feed bunks, 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;
(7) aquaculture production equipment as defined in
subdivision 13; and
(8) equipment used for maple syrup harvesting.
(c) Farm machinery does not include:
(1) repair or replacement parts;
(2) tools, shop equipment, grain bins, feed bunks, fencing
material except fencing material covered by paragraph (b),
clause (5), communication equipment, and other farm supplies;
(3) motor vehicles taxed under chapter 297B;
(4) snowmobiles or snow blowers; or
(5) lawn mowers except those used in the production of sod
for sale, or garden-type tractors or garden tillers.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001.
Sec. 15. Minnesota Statutes 2000, section 297A.61,
subdivision 14, is amended to read:
Subd. 14. [LEASING; LEASE.] "Leasing" includes all
transfers of possession or the use of tangible personal property
by the lessee for a consideration, if title remains with the
lessor at the end of the lease. For purposes of this chapter, A
lease of tangible personal property is a series of sales
transactions that impose upon the lessee multiple payment
obligations. "Leasing" does not include a transaction defined
under subdivision 15.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 16. Minnesota Statutes 2000, section 297A.61,
subdivision 17, is amended to read:
Subd. 17. [COMPUTER SOFTWARE.] "Computer software" means a
computer program, either in the form of written procedures or in
the form of storage media on which, or in which, the program is
recorded contained on tapes, discs, cards, or another device, or
any required documentation or manuals designed to facilitate the
use of the computer program. For purposes of this subdivision:
(1) "Storage media" includes punched cards, tapes, discs,
diskettes, or drums on which computer programs may be embodied
or stored;
(2) "Computer" does not include tape-controlled automatic
drilling, milling, or other manufacturing machinery or
equipment; and
(3) (2) "Computer program" means information and directions
that dictate the function performed by data processing
equipment. It includes the complete plan for the solution of a
problem, such as the complete sequence of automatic data
processing equipment instructions necessary to solve a problem
and includes both systems and application programs and
subdivisions, such as assemblers, compilers, routines,
generators, and utility programs. Computer program includes a
"canned" or prewritten computer program that is held or existing
for general or repeated sale or lease, even if the prewritten or
"canned" program was initially developed on a custom basis or
for in-house use.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 17. Minnesota Statutes 2000, section 297A.61,
subdivision 19, is amended to read:
Subd. 19. [COMMON FOR-HIRE CARRIER.] "Common For-hire
carrier" means a person engaged in transportation for hire of
tangible personal property by motor vehicle, if the person:.
(1) has a certificate or permit or has completed a
registration process that authorizes for-hire transportation of
property from the United States Department of Transportation,
the transportation regulation board, or the department of
transportation;
(2) is transporting commodities defined as "exempt" in
for-hire transportation; or
(3) transports tangible personal property pursuant to a
contract with a person described in clause (1) or (2).
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 18. Minnesota Statutes 2000, section 297A.61,
subdivision 22, is amended to read:
Subd. 22. [INTERNAL REVENUE CODE.] Unless specifically
provided otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 1999 2000.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 19. Minnesota Statutes 2000, section 297A.61,
subdivision 23, is amended to read:
Subd. 23. [UNITED STATES CODE.] Unless specifically
provided otherwise, "United States Code" means the United States
Code as amended through December 31, 1999 2000.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 20. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 24. [TELECOMMUNICATIONS SERVICES.] (a)
"Telecommunications services" means the transmission,
conveyance, or routing of voice, data, audio, video, or any
other information or signals to a point, or between or among
points, by or through any electronic, satellite, optical,
microwave, or other medium or method now in existence or
hereafter devised, regardless of the protocol used for such
transmission, conveyance, or routing.
(b) Telecommunications services includes the furnishing for
consideration of access to telephone services by a hotel to its
guests.
(c) Telecommunications services do not include:
(1) services purchased with a prepaid telephone calling
card;
(2) private communication service purchased by an agent
acting on behalf of the state lottery;
(3) information services; and
(4) purchases of telecommunications when the purchaser uses
the purchased services as a component part of or integrates such
service into another telecommunications service that is sold by
the purchaser in the normal course of business.
(d) For purposes of this subdivision, "information
services" means the offering of the capability for generating,
acquiring, storing, transforming, processing, retrieving,
utilizing, or making available information.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after July 31, 2001.
Sec. 21. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 25. [CABLE TELEVISION SERVICE.] "Cable television
service" means the transmission of video, audio, or other
programming service to purchasers, and the subscriber
interaction, if any, required for the selection or use of the
programming service, regardless of whether the programming is
transmitted over facilities owned or operated by the cable
service provider or over facilities owned or operated by one or
more dealers of communications services. The term includes
point-to-multipoint distribution services by which programming
is transmitted or broadcast by microwave or other equipment
directly to the subscriber's premises. The term includes basic,
extended, premium, pay-per-view, digital, and music services.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after July 31, 2001.
Sec. 22. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 26. [PRIVATE COMMUNICATION SERVICE.] "Private
communication service" means a communication service furnished
to a subscriber which entitles the subscriber to:
(1) exclusive or priority use of any communication channel
or group of channels;
(2) the use of an intercommunication system for the
subscriber's stations, or regardless of whether the channel,
group of channels, or intercommunication system may be connected
through switching;
(3) the switching capacity, extension lines and stations,
or other associated services that are provided in connection
with, and are necessary or unique to the use of, channels or
systems described in clause (1); or
(4) any combination of tunneling, encryption,
authentication, and access control technologies and services
used to carry traffic over the Internet, a managed Internet
provider network or provider's backbone.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after July 31, 2001.
Sec. 23. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 27. [DIRECT SATELLITE SERVICE.] "Direct satellite
service" means programming transmitted or broadcast by satellite
directly to the subscriber's premises without the use of ground
receiving or distribution equipment, except at the subscriber's
premises or in the uplink process to the satellite.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after July 31, 2001.
Sec. 24. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 28. [PURCHASE PRICE.] "Purchase price" means the
measure subject to the use tax and has the same meaning as
"sales price."
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 25. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 29. [STATE.] Unless specifically provided otherwise,
"state" means any state of the United States and the District of
Columbia.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 26. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 30. [DELIVERY CHARGES.] "Delivery charges" means
charges by the seller for preparation and delivery to a location
designated by the purchaser of personal property or services
including, but not limited to, transportation, shipping,
postage, handling, crating, and packing.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 27. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 31. [PREPARED FOOD.] "Prepared food" means (i) food
sold in a heated state or heated by the seller; (ii) two or more
food ingredients mixed or combined by the seller for sale as a
single item; or (iii) food sold with eating utensils provided by
the seller, including plates, knives, forks, spoons, glasses,
cups, napkins, or straws. Prepared food does not include food
that is sliced, repackaged, or pasteurized by the seller.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 28. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 32. [SOFT DRINKS.] "Soft drinks" means nonalcoholic
beverages that contain natural or artificial sweeteners. Soft
drinks do not include beverages that contain milk or milk
products; soy, rice, or similar milk substitutes; or greater
than 50 percent vegetable or fruit juice by volume.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 29. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 33. [CANDY.] "Candy" means a preparation of sugar,
honey, or other natural or artificial sweeteners in combination
with chocolate, fruits, nuts, or other ingredients or flavorings
in the form of bars, drops, or pieces. Candy does not include
any preparation containing flour and must require no
refrigeration.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 30. Minnesota Statutes 2000, section 297A.61, is
amended by adding a subdivision to read:
Subd. 34. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold
through vending machines" means food dispensed from a machine or
other mechanical device that accepts payment.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 31. Minnesota Statutes 2000, section 297A.64,
subdivision 3, is amended to read:
Subd. 3. [ADMINISTRATION.] The retailer shall report and
pay the tax imposed in subdivision 1 to the commissioner of
revenue with the taxes imposed in this chapter. The tax imposed
in subdivision 1 and the fee imposed in subdivision 2 are is
subject to the same interest, penalty, and other provisions
provided for sales and use taxes under chapter 289A and this
chapter. The commissioner has the same powers to assess and
collect the tax and fee that are given the commissioner in
chapters 270 and 289A and this chapter to assess and collect
sales and use tax.
[EFFECTIVE DATE.] This section is effective for leases
entered into after December 31, 2005.
Sec. 32. Minnesota Statutes 2000, section 297A.64,
subdivision 4, is amended to read:
Subd. 4. [EXEMPTIONS.] (a) The tax and the fee imposed by
this section do does not apply to a lease or rental of (1) a
vehicle to be used by the lessee to provide a licensed taxi
service; (2) a hearse or limousine used in connection with a
burial or funeral service; or (3) a van designed or adapted
primarily for transporting property rather than passengers.
(b) The lessor may elect not to charge the fee imposed in
subdivision 2 if in the previous calendar year the lessor had no
more than 20 vehicles available for lease that would have been
subject to tax under this section, or no more than $50,000 in
gross receipts that would have been subject to tax under this
section.
[EFFECTIVE DATE.] This section is effective for leases
entered into after December 31, 2005.
Sec. 33. Minnesota Statutes 2000, section 297A.66,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) "Retailer maintaining a
place of business in this state," or a similar term, means a
retailer:
(1) having or maintaining within this state, directly or by
a subsidiary, an office, place of distribution, sales or sample
room or place, warehouse, or other place of business; or
(2) having a representative, agent, salesperson, canvasser,
or solicitor operating in this state under the authority of the
retailer or its subsidiary, for any purpose, including the
repairing, selling, delivering, installing, or soliciting of
orders for the retailer's goods or services, or the leasing of
tangible personal property located in this state, whether the
place of business or agent, representative, salesperson,
canvasser, or solicitor is located in the state permanently or
temporarily, or whether or not the retailer or subsidiary is
authorized to do business in this state.
(b) "Destination of a sale" means the location to which the
retailer makes delivery of the property sold, or causes the
property to be delivered, to the purchaser of the property, or
to the agent or designee of the purchaser. The delivery may be
made by any means, including the United States Postal Service, a
common carrier, or a contract for-hire carrier.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 34. Minnesota Statutes 2000, section 297A.66,
subdivision 3, is amended to read:
Subd. 3. [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN
THIS STATE.] (a) To the extent allowed by the United States
Constitution and the laws of the United States, a retailer
making retail sales from outside this state to a destination
within this state and not maintaining a place of business in
this state shall collect sales and use taxes and remit them to
the commissioner under section 297A.77, if the retailer engages
in the regular or systematic soliciting of sales from potential
customers in this state by:
(1) distribution, by mail or otherwise, 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 in which this
state is included as part 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 telegraphy, telephone,
computer database, cable, optic, microwave, or other
communication system.
This paragraph (a) must be construed without regard to the
state from which distribution of the materials originated or in
which they were prepared.
(b) The location within or without this state of
independent vendors independent of the retailer that provide
products or services to the retailer in connection with its
solicitation of customers within this state, including such
products and services as creation of copy, printing,
distribution, and recording, is not considered in determining
whether the retailer is required to collect tax.
(c) A retailer not maintaining a place of business in this
state is presumed, subject to rebuttal, to be engaged in regular
solicitation within this state if it engages in any of the
activities in paragraph (a) and:
(1) makes 100 or more retail sales from outside this state
to destinations in this state during a period of 12 consecutive
months; or
(2) makes ten or more retail sales totaling more than
$100,000 from outside this state to destinations in this state
during a period of 12 consecutive months.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 35. [297A.668] [SOURCING OF SALE; SITUS IN THIS
STATE.]
Subdivision 1. [SOURCING RULES.] (a) The following
provisions apply regardless of the characterization of a product
as tangible personal property, a digital good, or a service; but
do not apply to telecommunications services, or the sales of
motor vehicles, watercraft, aircraft, modular homes,
manufactured homes, or mobile homes. These provisions only
apply to determine a seller's obligation to pay or collect and
remit a sales or use tax with respect to the seller's sale of a
product. These provisions do not affect the obligation of a
seller as purchaser to remit tax on the use of the product.
(b) When the product is received by the purchaser at a
business location of the seller, the sale is sourced to that
business location.
(c) When the product is not received by the purchaser at a
business location of the seller, the sale is sourced to the
location where receipt by the purchaser or the donee designated
by the purchaser occurs, including the location indicated by
instructions for delivery to the purchasers or the purchaser's
donee, known to the seller.
(d) When paragraphs (b) and (c) do not apply, the sale is
sourced to the location indicated by an address for the
purchaser that is available from the business records of the
seller that are maintained in the ordinary course of the
seller's business, when use of this address does not constitute
bad faith.
(e) When paragraphs (b), (c), and (d) do not apply, the
sale is sourced to the location indicated by an address for the
purchaser obtained during the consummation of the sale,
including the address of a purchaser's payment instrument if no
other address is available, when use of this address does not
constitute bad faith.
(f) When paragraphs (b), (c), (d), and (e) do not apply,
including the circumstance where the seller is without
sufficient information to apply the previous paragraphs, then
the location is determined by the address from which tangible
personal property was shipped, from which the digital good was
first available for transmission by the seller, or from which
the service was provided.
Subd. 2. [MULTIPLE POINTS OF USE.] (a) Notwithstanding the
provisions of subdivision 1, a business purchaser that is not a
holder of a direct pay permit that knows at the time of its
purchase of a digital good or service that the digital good or
service will be concurrently available for use in more than one
taxing jurisdiction shall deliver to the seller in conjunction
with its purchase a multiple points of use exemption certificate
disclosing this fact.
(b) Upon receipt of the multiple points of use exemption
certificate, the seller is relieved of the obligation to
collect, pay, or remit the applicable tax and the purchaser is
obligated to collect, pay, or remit the applicable tax on a
direct pay basis.
(c) A purchaser delivering the multiple points of use
exemption certificate may use any reasonable, but consistent and
uniform, method of apportionment that is supported by the
purchaser's business records as they exist at the time of the
consummation of the sale.
(d) The multiple points of use exemption certificate
remains in effect for all future sales by the seller to the
purchaser until it is revoked in writing.
(e) A holder of a direct pay permit is not required to
deliver a multiple points or use exemption certificate to the
seller. A direct pay permit holder shall follow the provisions
of paragraph (c) in apportioning the tax due on a digital good
or a service that will be concurrently available for use in more
than one taxing jurisdiction.
Subd. 3. [DEFINITION OF TERMS.] For purposes of this
section, the terms "receive" and "receipt" mean taking
possession of tangible personal property, making first use of
services, or taking possession of making first use of digital
goods, whichever occurs first. The terms receive and receipt do
not include possession by a carrier for hire on behalf of the
purchaser.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2001.
Sec. 36. Minnesota Statutes 2000, section 297A.67,
subdivision 2, is amended to read:
Subd. 2. [FOOD PRODUCTS AND FOOD INGREDIENTS.]
Food products including, but not limited to, cereal and cereal
products, butter, cheese, milk and milk products, oleomargarine,
meat and meat products, fish and fish products, eggs and egg
products, vegetables and vegetable products, fruit and fruit
products, spices and salt, sugar and sugar products, coffee and
coffee substitutes, tea, and cocoa and cocoa products and food
ingredients are exempt. For purposes of this subdivision,
"food" and "food ingredients" mean substances, whether in
liquid, concentrated, solid, frozen, dried, or dehydrated form,
that are sold for ingestion or chewing by humans and are
consumed for their taste or nutritional value. Food and food
ingredients do not include candy, soft drinks, food sold through
vending machines, and prepared foods. Food and food ingredients
do not include alcoholic beverages, dietary supplements, and
tobacco. For purposes of this subdivision, "alcoholic
beverages" means beverages that are suitable for human
consumption and contain one-half of one percent or more of
alcohol by volume. For purposes of this subdivision, "tobacco"
means cigarettes, cigars, chewing or pipe tobacco, or any other
item that contains tobacco. For purposes of this subdivision,
"dietary supplements" means any product, other than tobacco,
intended to supplement the diet that:
(1) contains one or more of the following dietary
ingredients:
(i) a vitamin;
(ii) a mineral;
(iii) an herb or other botanical;
(iv) an amino acid;
(v) a dietary substance for use by humans to supplement the
diet by increasing the total dietary intake; and
(vi) a concentrate, metabolite, constituent, extract, or
combination of any ingredient described in items (i) to (v);
(2) is intended for ingestion in tablet, capsule, powder,
softgel, gelcap, or liquid form, or if not intended for
ingestion in such form, is not represented as conventional food
and is not represented for use as a sole item of a meal or of
the diet; and
(3) is required to be labeled as a dietary supplement,
identifiable by the supplement facts box found on the label and
as required pursuant to Code of Federal Regulations, title 21,
section 101.36.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2001.
Sec. 37. Minnesota Statutes 2000, section 297A.67,
subdivision 8, is amended to read:
Subd. 8. [CLOTHING.] (a) Clothing and wearing apparel,
including sewing materials to be directly incorporated into
wearing apparel, are is exempt. For purposes of this
subdivision, clothing and wearing apparel do not include the
following:
(1) articles designed primarily for use while engaging in a
specific sport or recreational activity that are not also worn
for general use;
(2) articles designed primarily to provide safety or
protection against injury while the user is engaged in
industrial or general job activities;
(3) all articles commonly or commercially known as jewelry
including, but not limited to, watches;
(4) nonprescription optical glasses of any sort;
(5) articles made entirely of fur on the hide or pelt, or
partially of such fur if the value of the fur is more than three
times the value of the next most valuable component material;
(6) perfume, lotions, creams, dyes, or other substances
that are applied to the skin or the hair; and
(7) luggage, bags, purses, wallets, or cases of any
sort. "clothing" means all human wearing apparel suitable for
general use.
(b) Clothing includes, but is not limited to, aprons,
household and shop; athletic supporters; baby receiving
blankets; bathing suits and caps; beach capes and coats; belts
and suspenders; boots; coats and jackets; costumes; children and
adult diapers, including disposable; ear muffs; footlets; formal
wear; garters and garter belts; girdles; gloves and mittens for
general use; hats and caps; hosiery; insoles for shoes; lab
coats; neckties; overshoes; pantyhose; rainwear; rubber pants;
sandals; scarves; shoes and shoe laces; slippers; sneakers;
socks and stockings; steel-toed boots; underwear; uniforms,
athletic and nonathletic; and wedding apparel.
(c) Clothing does not include the following:
(1) belt buckles sold separately;
(2) costume masks sold separately;
(3) patches and emblems sold separately;
(4) sewing equipment and supplies, including but not
limited to, knitting needles, patterns, pins, scissors, sewing
machines, sewing needles, tape measures, and thimbles;
(5) sewing materials that become part of clothing,
including but not limited to, buttons, fabric, lace, thread,
yarn, and zippers;
(6) clothing accessories or equipment;
(7) sports or recreational equipment; and
(8) protective equipment.
Clothing also does not include apparel made from fur if a
uniform definition of "apparel made from fur" is developed by
the member states of the Streamlined Sales and Use Tax Agreement.
For purposes of this subdivision, "clothing accessories or
equipment" means incidental items worn on the person or in
conjunction with clothing. Clothing accessories include, but
are not limited to, briefcases; cosmetics; hair notions,
including barrettes, hair bows, and hairnets; handbags;
handkerchiefs; jewelry; nonprescription sunglasses; umbrellas;
wallets; watches; and wigs and hairpieces. "Sports or
recreational equipment" means items designed for human use and
worn in conjunction with an athletic or recreational activity
that are not suitable for general use. Sports and recreational
equipment includes, but is not limited to, ballet and tap shoes;
cleated or spiked athletic shoes; baseball, bowling, boxing,
hockey, and golf gloves; goggles; hand and elbow guards; life
preservers and vests; mouth guards; roller and ice skates; shin
guards; shoulder pads; ski boots; waders; and wetsuits and
fins. "Protective equipment" means items for human wear and
designed as protection of the wearer against injury or disease
or as protection against damage or injury of other persons or
property but not suitable for general use. Protective equipment
includes, but is not limited to, breathing masks; clean room
apparel and equipment; ear and hearing protectors; face shields;
finger guards; hard hats; helmets; paint or dust respirators;
protective gloves; safety glasses and goggles; safety belts;
tool belts; and welders gloves and masks.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2001.
Sec. 38. Minnesota Statutes 2000, section 297A.67,
subdivision 23, is amended to read:
Subd. 23. [OCCASIONAL SALES.] Isolated and occasional
sales in Minnesota not made in the normal course of business,
and of selling that kind of property or service are exempt. The
storage, use, or consumption of property or services resulting
from such sales, are acquired as a result of such a sale is
exempt. This exemption does not apply to sales of tangible
personal property primarily used in a trade or business.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 39. Minnesota Statutes 2000, section 297A.67,
subdivision 24, is amended to read:
Subd. 24. [CONSTITUTIONAL PROHIBITIONS.] The gross
receipts from The sale of and the storage, use, or other
consumption in Minnesota of tangible personal property, tickets,
or admissions, electricity, gas, or local exchange telephone
service or services, that the state of Minnesota is prohibited
from taxing under the Constitution or laws of the United States
or under the Constitution of Minnesota, are exempt.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 40. Minnesota Statutes 2000, section 297A.67,
subdivision 25, is amended to read:
Subd. 25. [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.61,
subdivision 16 3, paragraph (g), clause (6) (5), item (vi),
and "cemetery" means a cemetery for human burial.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 41. Minnesota Statutes 2000, section 297A.67, is
amended by adding a subdivision to read:
Subd. 26. [TRADE ALLOWANCE.] The amount allowed as a
credit against the sales price for tangible personal property
taken in trade for resale is exempt.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2001.
Sec. 42. Minnesota Statutes 2000, section 297A.67, is
amended by adding a subdivision to read:
Subd. 27. [SEWING MATERIALS.] Sewing materials are exempt.
For purposes of this subdivision "sewing materials" mean fabric,
thread, zippers, interfacing, buttons, trim, and other items
that are usually directly incorporated into the construction of
clothing, regardless of whether it is actually used for making
clothing. It does not include batting, foam, or fabric
specifically manufactured for arts and craft projects, or other
materials for craft projects.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2001.
Sec. 43. Minnesota Statutes 2000, section 297A.67, is
amended by adding a subdivision to read:
Subd. 28. [AMBULANCE SUPPLIES, PARTS, AND EQUIPMENT.] The
following sales to or use by an ambulance service licensed under
section 144E.10 are exempt:
(1) supplies and equipment used to provide medical care;
and
(2) repair and replacement parts for ambulances.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001.
Sec. 44. Minnesota Statutes 2000, section 297A.67, is
amended by adding a subdivision to read:
Subd. 29. [ENERGY EFFICIENT PRODUCTS.] (a) A residential
lighting fixture or a compact fluorescent bulb is exempt if it
has an energy star label.
(b) The following products are exempt if they have an
energyguide label that indicates that the product meets or
exceeds the standards listed below:
(1) an electric heat pump hot water heater with an energy
factor of at least 1.9;
(2) a natural gas water heater with an energy factor of at
least 0.62; and
(3) a natural gas furnace with an annual fuel utilization
efficiency greater than 92 percent.
(c) A photovoltaic device is exempt. For purposes of this
subdivision, "photovoltaic device" means a solid-state
electrical device, such as a solar module, that converts light
directly into direct current electricity of voltage-current
characteristics that are a function of the characteristics of
the light source and the materials in and design of the device.
A "solar module" is a photovoltaic device that produces a
specified power output under defined test conditions, usually
composed of groups of solar cells connected in series, in
parallel, or in series-parallel combinations.
(d) For purposes of this subdivision, "energy star label"
means the label granted to certain products that meet United
States Environmental Protection Agency and United States
Department of Energy criteria for energy efficiency. For
purposes of this subdivision, "energyguide label" means the
label that the United State Federal Trade Commissioner requires
manufacturers to apply to certain appliances under United States
Code, title 16, part 305.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001, and before August 1, 2005.
Sec. 45. Minnesota Statutes 2000, section 297A.68,
subdivision 2, is amended to read:
Subd. 2. [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.]
(a) Materials stored, used, or consumed in industrial production
of personal property intended to be sold ultimately at retail
are exempt, whether or not the item so used becomes an
ingredient or constituent part of the property produced.
Materials that qualify for this exemption include, but are not
limited to, the following:
(1) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(2) materials, including chemicals, fuels, and electricity
purchased by persons engaged in industrial production to treat
waste generated as a result of the production process;
(3) fuels, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating, cooling, or lighting is exempt only if
(i) it is in excess of the average climate control or lighting
for the production area, and (ii) it is necessary to produce
that particular industrial product;
(4) petroleum products and lubricants;
(5) packaging materials, including returnable containers
used in packaging food and beverage products;
(6) accessory tools, equipment, and other items that are
separate detachable units with an ordinary useful life of less
than 12 months used in producing a direct effect upon the
product; and
(7) the following materials, tools, and equipment used in
metalcasting: crucibles, thermocouple protection sheaths and
tubes, stalk tubes, refractory materials, molten metal filters
and filter boxes, degassing lances, and base blocks.
(b) This exemption does not include:
(1) machinery, equipment, implements, tools, accessories,
appliances, contrivances and furniture and fixtures, except
those listed in paragraph (a), clause (6); and
(2) petroleum and special fuels used in producing or
generating power for propelling ready-mixed concrete trucks on
the public highways of this state.
(c) Industrial production includes, 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. Industrial production does not include
painting, cleaning, repairing or similar processing of property
except as part of the original manufacturing process.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 46. Minnesota Statutes 2000, section 297A.68,
subdivision 3, is amended to read:
Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE
SERVICES.] (a) Materials stored, used, or consumed in providing
a taxable service listed in section 297A.61, subdivision 16 3,
paragraph (g), clause (5), intended to be sold ultimately at
retail are exempt.
(b) This exemption includes, but is not limited to:
(1) chemicals, lubricants, packaging materials, seeds,
trees, fertilizers, and herbicides, if these items are used or
consumed in providing the taxable service;
(2) chemicals used to treat waste generated as a result of
providing the taxable service;
(3) accessory tools, equipment, and other items that are
separate detachable units used in providing the service and that
have an ordinary useful life of less than 12 months; and
(4) fuel, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating, cooling, or lighting is exempt only if
(i) it is in excess of average climate control or lighting, and
(ii) it is necessary to produce that particular taxable service.
(c) This exemption does not include machinery, equipment,
implements, tools, accessories, appliances, contrivances,
furniture, and fixtures used in providing the taxable service.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 47. Minnesota Statutes 2000, section 297A.68,
subdivision 5, is amended to read:
Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is
exempt. The tax must be imposed and collected as if the rate
under section 297A.62, subdivision 1, applied, and then refunded
in the manner provided in section 297A.75.
"Capital equipment" means machinery and equipment purchased
or leased, and used in this state by the purchaser or lessee
primarily for manufacturing, fabricating, mining, or refining
tangible personal property to be sold ultimately at retail.
Capital equipment means if the machinery and equipment is
essential to the integrated production process of manufacturing,
fabricating, mining, or refining. Capital equipment also
includes machinery and equipment used to electronically transmit
results retrieved by a customer of an online computerized data
retrieval system.
(b) Capital equipment includes, but is not limited to:
(1) machinery and equipment used to operate, control, or
regulate the production equipment;
(2) machinery and equipment used for research and
development, design, quality control, and testing activities;
(3) environmental control devices that are used to maintain
conditions such as temperature, humidity, light, or air pressure
when those conditions are essential to and are part of the
production process;
(4) materials and supplies used to construct and install
machinery or equipment;
(5) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades
or modifications to machinery or equipment;
(6) materials used for foundations that support machinery
or equipment;
(7) materials used to construct and install special purpose
buildings used in the production process; and
(8) ready-mixed concrete trucks in which the ready-mixed
concrete is mixed as part of the delivery process.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 297B;
(2) machinery or equipment used to receive or store raw
materials;
(3) building materials, except for materials included in
paragraph (b), clauses (6) and (7);
(4) machinery or equipment used for nonproduction purposes,
including, but not limited to, the following: plant security,
fire prevention, first aid, and hospital stations; support
operations or administration; pollution control; and plant
cleaning, disposal of scrap and waste, plant communications,
space heating, cooling, lighting, or safety;
(5) farm machinery and aquaculture production equipment as
defined by section 297A.61, subdivisions 12 and 13;
(6) machinery or equipment purchased and installed by a
contractor as part of an improvement to real property; or
(7) any other item that is not essential to the integrated
process of manufacturing, fabricating, mining, or refining.
(d) For purposes of this subdivision:
(1) "Machinery" means mechanical, electronic, or electrical
devices, including computers and computer software, that are
purchased or constructed to be used for the activities set forth
in paragraph (a), beginning with the removal of raw materials
from inventory through completion of the product, including
packaging of the product.
(2) "Equipment" means independent devices or tools separate
from machinery but essential to an integrated production
process, including computers and computer software, used in
operating, controlling, or regulating machinery and equipment;
and any subunit or assembly comprising a component of any
machinery or accessory or attachment parts of machinery, such as
tools, dies, jigs, patterns, and molds.
(3) "Primarily" means machinery and equipment used 50
percent or more of the time in an activity described in
paragraph (a).
(4) "Manufacturing" means an operation or series of
operations where raw materials are changed in form, composition,
or condition by machinery and equipment and which results in the
production of a new article of tangible personal property. For
purposes of this subdivision, "manufacturing" includes the
generation of electricity or steam to be sold at retail.
(5) "Fabricating" means to make, build, create, produce, or
assemble components or property to work in a new or different
manner.
(6) "Mining" means the extraction of minerals, ores, stone,
or peat.
(7) "Refining" means the process of converting a natural
resource to a product, including the treatment of water to be
sold at retail.
(8) "Integrated production process" means a process
beginning with the removal of raw materials from inventory
through the completion of the product, including packaging of
the product.
(9) "Online data retrieval system" means a system whose
cumulation of information is equally available and accessible to
all its customers.
(10) (9) "Machinery and equipment used for pollution
control" means machinery and equipment used solely to eliminate,
prevent, or reduce pollution resulting from an activity
described in paragraph (a).
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 48. Minnesota Statutes 2000, section 297A.68,
subdivision 11, is amended to read:
Subd. 11. [ADVERTISING MATERIALS.] Material Materials
designed to advertise and promote the sale of merchandise or
services is are exempt if the material is purchased and stored
for the purpose of subsequently shipping or otherwise
transferring outside the state by the purchaser for later these
materials are mailed or transferred to a person outside the
state for use solely outside the state of Minnesota. Mailing
and reply envelopes and cards used exclusively in connection
with these advertising and promotional materials are included in
this exemption. The exemption applies regardless of where the
mailing occurs. The storage of these materials in the state for
the purpose of subsequently shipping or otherwise transferring
the material out of state is also exempt if the other conditions
in this subdivision are met.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 49. Minnesota Statutes 2000, section 297A.68,
subdivision 13, is amended to read:
Subd. 13. [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible
personal property is exempt if the property, without
intermediate use, is all of the following conditions are met:
(1) the property, without intermediate use, is shipped or
transported outside Minnesota by the purchaser or is stored,
processed, fabricated or manufactured into, attached to or
incorporated into other tangible personal property that is
transported or shipped outside Minnesota; and
(2) the property is used in a trade or business outside
Minnesota after being shipped or transported outside of
Minnesota, and is not returned to Minnesota, except in the
course of interstate commerce; and
(3) the property is either (i) not subject to tax in the
state or country to which it is transported for storage or use,
or (ii) to be used in other states or countries as part of a
maintenance contract.
(b) For purposes of this subdivision, storage or
processing, fabricating, manufacturing, attaching to, or
incorporating into other property is not intermediate use.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 50. Minnesota Statutes 2000, section 297A.68,
subdivision 14, is amended to read:
Subd. 14. [TEMPORARY STORAGE PROPERTY IN TRANSIT.]
Tangible personal property is exempt if all of the following
conditions are met:
(1) it is shipped or brought into Minnesota by a common
for-hire carrier;
(2) without intermediate use, it is kept in a public
warehouse;
(3) it is kept for the purpose of being later transported
outside Minnesota; and
(4) after storage, it is used solely outside Minnesota,
except in the course of interstate commerce.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 51. Minnesota Statutes 2000, section 297A.68,
subdivision 18, is amended to read:
Subd. 18. [CUSTOM COMPUTER SOFTWARE.] The design,
development, writing, translation, fabrication, lease, or
transfer for a consideration of title or possession of a custom
computer program is exempt. "Custom computer program" means a
computer program prepared to the special order of the customer,
either in the form of written procedures or in the form of
storage media on which, or in which, the program is
recorded contained on tapes, discs, cards, or another device, or
any required documentation or manuals designed to facilitate the
use of the custom computer program transferred. It includes
those services represented by separately stated charges for
modifications to an existing prewritten program that are
prepared to the special order of the customer. It does not
include a "canned" or prewritten computer program that is held
or existing for general or repeated sale or lease, even if the
prewritten or "canned" program was initially developed on a
custom basis or for in-house use. Modification to an existing
prewritten program to meet the customer's needs is custom
computer programming only to the extent of the modification.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 52. Minnesota Statutes 2000, section 297A.68,
subdivision 19, is amended to read:
Subd. 19. [PETROLEUM PRODUCTS.] The following petroleum
products are exempt:
(1) products upon which a tax has been imposed and paid
under chapter 296A, and for which no refund has been or will be
allowed because the buyer used the fuel for nonhighway use;
(2) products that are used in the improvement of
agricultural land by constructing, maintaining, and repairing
drainage ditches, tile drainage systems, grass waterways, water
impoundment, and other erosion control structures;
(3) products purchased by a transit system receiving
financial assistance under section 174.24, 256B.0625,
subdivision 17, or 473.384;
(4) products purchased by an ambulance service licensed
under chapter 144E;
(5) products used in a passenger snowmobile, as defined in
section 296A.01, subdivision 39, for off-highway business use as
part of the operations of a resort as provided under section
296A.16, subdivision 2, clause (2); or
(5) (6) products purchased by a state or a political
subdivision of a state for use in motor vehicles exempt from
registration under section 168.012, subdivision 1, paragraph (b).
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001.
Sec. 53. Minnesota Statutes 2000, section 297A.68,
subdivision 25, is amended to read:
Subd. 25. [OCCASIONAL SALES SALE OF PROPERTY USED IN A
TRADE OR BUSINESS.] (a) Isolated or occasional sales of The sale
of tangible personal property in Minnesota primarily used in a
trade or business is exempt if the sale is not made in the
normal course of business of selling that kind of property are
exempt. The storage, use, or consumption of property acquired
as a result of such a sale is exempt.
(b) This exemption applies to a sale of tangible personal
property primarily used in a trade or business only and if one
of the following conditions is satisfied:
(1) the sale occurs in a transaction subject to or
described in section 118, 331, 332, 336, 337, 338, 351, 355,
368, 721, 731, 1031, or 1033 of the Internal Revenue Code;
(2) the sale is between members of a controlled group as
defined in section 1563(a) of the Internal Revenue Code;
(3) the sale is a sale of farm machinery;
(4) the sale is a farm auction sale;
(5) the sale is a sale of substantially all of the assets
of a trade or business; or
(6) the total amount of gross receipts from the sale of
trade or business property made during the calendar month of the
sale and the preceding 11 calendar months does not exceed $1,000.
The use, storage, distribution, or consumption of tangible
personal property acquired as a result of a sale exempt under
this subdivision is also exempt.
(c) (b) For purposes of this subdivision, the following
terms have the meanings given.
(1) A "farm auction" is a public auction conducted by a
licensed auctioneer if substantially all of the property sold
consists of property used in the trade or business of farming
and property not used primarily in a trade or business.
(2) "Trade or business" includes the assets of a separate
division, branch, or identifiable segment of a trade or business
if, before the sale, the income and expenses attributable to the
separate division, branch, or identifiable segment could be
separately ascertained from the books of account or record (the
lease or rental of an identifiable segment does not qualify for
the exemption).
(3) A "sale of substantially all of the assets of a trade
or business" must occur as a single transaction or a series of
related transactions within the 12-month period beginning on the
date of the first sale of assets intended to qualify for the
exemption provided in paragraph (b) (a), clause (5).
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 54. Minnesota Statutes 2000, section 297A.68, is
amended by adding a subdivision to read:
Subd. 35. [TELECOMMUNICATIONS EQUIPMENT.] (a)
Telecommunications machinery and equipment purchased or leased
for use directly by a telecommunications service provider
primarily in the provision of telecommunications services that
are ultimately to be sold at retail are exempt, regardless of
whether purchased by the owner, a contractor, or a subcontractor.
(b) For purposes of this subdivision, "telecommunications
machinery and equipment" includes, but is not limited to:
(1) machinery, equipment, and fixtures utilized in
receiving, initiating, amplifying, processing, transmitting,
retransmitting, recording, switching, or monitoring
telecommunications services, such as computers, transformers,
amplifiers, routers, bridges, repeaters, multiplexers, and other
items performing comparable functions;
(2) machinery, equipment, and fixtures used in the
transportation of telecommunications services, radio
transmitters and receivers, satellite equipment, microwave
equipment, and other transporting media, but not wire, cable,
fiber, poles, or conduit;
(3) ancillary machinery, equipment, and fixtures that
regulate, control, protect, or enable the machinery in clauses
(1) and (2) to accomplish its intended function, such as
auxiliary power supply, test equipment, towers, heating,
ventilating and air conditioning equipment necessary to the
operation of the telecommunications equipment; and software
necessary to the operation of the telecommunications equipment;
and
(4) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades
or modifications to qualified machinery or equipment.
(c) For purposes of this subdivision, "telecommunications
services" means telecommunications services as defined in
section 297A.61, subdivision 24, paragraph (a), only.
[EFFECTIVE DATE.] This section is effective for purchases
and lease payments, including payments made on existing leases,
made after July 31, 2001.
Sec. 55. Minnesota Statutes 2000, section 297A.69,
subdivision 2, is amended to read:
Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.]
(a) Materials stored, used, or consumed in agricultural
production of personal property intended to be sold ultimately
at retail are exempt, whether or not the item becomes an
ingredient or constituent part of the property produced.
Materials that qualify for this exemption include, but are not
limited to, the following:
(1) feeds, seeds, trees, fertilizers, and herbicides,
including when purchased for use by farmers in a federal or
state farm or conservation program;
(2) materials sold to a veterinarian to be used or consumed
in the care, medication, and treatment of agricultural
production animals and horses;
(3) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(4) materials, including chemicals, fuels, and electricity
purchased by persons engaged in agricultural production to treat
waste generated as a result of the production process;
(5) fuels, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating, cooling, or lighting is exempt only if
(i) it is in excess of the average climate control or lighting
for the production area, and (ii) it is necessary to produce
that particular agricultural product;
(6) petroleum products and lubricants;
(7) packaging materials, including returnable containers
used in packaging food and beverage products; and
(8) accessory tools and equipment that are separate
detachable units with an ordinary useful life of less than 12
months used in producing a direct effect upon the product.
Machinery, equipment, implements, tools, accessories,
appliances, contrivances, and furniture and fixtures, except
those listed in this clause are not included within this
exemption.
(b) For purposes of this subdivision, "agricultural
production" includes, but is not limited to, horticulture,
floriculture, maple syrup harvesting, and the raising of pets,
fur-bearing animals, research animals, horses, farmed cervidae
as defined in section 17.451, subdivision 2, llamas as defined
in section 17.455, subdivision 2, and ratitae as defined in
section 17.453, subdivision 3.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 56. Minnesota Statutes 2000, section 297A.70,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE.] (a) To the extent provided in this
section, the gross receipts from sales of items to or by, and
storage, distribution, use, or consumption of items by the
organizations listed in this section are specifically exempted
from the taxes imposed by this chapter.
(b) Notwithstanding any law to the contrary enacted before
1992, only sales to governments and political subdivisions
listed in this section are exempt from the taxes imposed by this
chapter.
(c) "Sales" includes purchases under an installment
contract or lease purchase agreement under section 465.71.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 57. Minnesota Statutes 2000, section 297A.70,
subdivision 2, is amended to read:
Subd. 2. [SALES TO GOVERNMENT.] (a) All sales, except
those listed in paragraph (b), to the following governments and
political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are
exempt:
(1) the United States and its agencies and
instrumentalities;
(2) school districts, the University of Minnesota, state
universities, community colleges, technical colleges, state
academies, the Perpich Minnesota center for arts education, and
an instrumentality of a political subdivision that is accredited
as an optional/special function school by the North Central
Association of Colleges and Schools;
(3) hospitals and nursing homes owned and operated by
political subdivisions of the state;
(4) the metropolitan council, for its purchases of
materials, supplies, and equipment to equip operations provided
for in section 473.4051.
(4) (5) other states or political subdivisions of other
states, if the sale would be exempt from taxation if it occurred
in that state; and
(5) (6) sales to 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.
(b) This exemption does not apply to the sales of the
following products and services:
(1) 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;
(2) 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;
(3) 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; or
(4) meals and lodging as defined under section 297A.61,
subdivisions subdivision 3, paragraph paragraphs (d), and 16
(g), paragraph (c) clause (2), except for meals and lodging
purchased directly by the United States or its agencies or
instrumentalities.
(c) 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, and any
instrumentality of a school district, as defined in section
471.59.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001, except that the amendments
to paragraph (b), clause (4), are effective for sales and
purchases made after June 30, 2001.
Sec. 58. Minnesota Statutes 2000, section 297A.70,
subdivision 3, is amended to read:
Subd. 3. [SALES OF CERTAIN GOODS AND SERVICES TO
GOVERNMENT.] (a) The following sales to or use by the specified
governments and political subdivisions of the state are exempt:
(1) supplies and equipment used to provide medical care in
the operation of an ambulance service owned and operated by a
political subdivision of the state;
(2) repair and replacement parts for emergency rescue
vehicles, fire trucks, and fire apparatus to a political
subdivision;
(3) (2) 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;
(4) (3) chore and homemaking services to a political
subdivision of the state to be provided to elderly or disabled
individuals;
(5) (4) telephone services to the department of
administration that are used to provide telecommunications
services through the intertechnologies revolving fund;
(6) (5) firefighter personal protective equipment as
defined in paragraph (b), if purchased or authorized by and for
the use of an organized fire department, fire protection
district, or fire company regularly charged with the
responsibility of providing fire protection to the state or a
political subdivision;
(7) (6) bullet-resistant body armor that provides the
wearer with ballistic and trauma protection, if purchased by a
law enforcement agency of the state or a political subdivision
of the state, or a licensed peace officer, as defined in section
626.84, subdivision 1;
(8) (7) 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 or exempt
from the motor vehicle sales tax under section 297B.03, clause
(12);
(9) (8) equipment designed to process, dewater, and
recycle biosolids for wastewater treatment facilities of
political subdivisions, and materials incidental to installation
of that equipment; and materials used to construct buildings to
house the equipment, if the materials are purchased after June
30, 1998, and before July 1, 2001; and
(10) (9) sales to a town of gravel and of machinery,
equipment, and accessories, except motor vehicles, used
exclusively for road and bridge maintenance, and leases by a
town of motor vehicles exempt from tax under section 297B.03,
clause (10).
(b) For purposes of this subdivision, "firefighters
personal protective equipment" means helmets, including face
shields, chin straps, and neck liners; bunker coats and pants,
including pant suspenders; boots; gloves; head covers or hoods;
wildfire jackets; protective coveralls; goggles; self-contained
breathing apparatus; canister filter masks; personal alert
safety systems; spanner belts; optical or thermal imaging search
devices; and all safety equipment required by the Occupational
Safety and Health Administration.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001.
Sec. 59. Minnesota Statutes 2000, section 297A.70,
subdivision 4, is amended to read:
Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales,
except those listed in paragraph (b), to the following
"nonprofit organizations" are exempt:
(1) an entity a corporation, society, association,
foundation, or institution organized and operated exclusively
for charitable, religious, or educational purposes if the item
purchased is used in the performance of charitable, religious,
or educational functions; and
(2) any senior citizen group or association of groups that:
(i) in general limits membership to persons who are either
age 55 or older, or physically disabled; and
(ii) 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; and.
(3) an entity organized and operated exclusively to
maintain
For purposes of this subdivision, charitable purpose includes
the maintenance of a cemetery owned by a religious organization.
(b) This exemption does not apply to the following sales:
(1) 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;
(2) construction materials purchased by tax-exempt entities
or their contractors to be used in constructing buildings or
facilities that will not be used principally by the tax-exempt
entities; and
(3) meals and lodging as defined under section 297A.61,
subdivisions subdivision 3, paragraph paragraphs (d), and
16 (g), paragraph (c) clause (2); and
(4) leasing of a motor vehicle as defined in section
297B.01, subdivision 5, except as provided in paragraph (c).
(c) This exemption 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.
(d) A limited liability company also qualifies for
exemption under this subdivision if (1) it consists of a sole
member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 60. Minnesota Statutes 2000, section 297A.70,
subdivision 7, is amended to read:
Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a)
Sales, except for those listed in paragraph (c), to a hospital
are exempt, if the items purchased are used in providing
hospital services. For purposes of this subdivision, "hospital"
means a hospital organized and operated for charitable purposes
within the meaning of section 501(c)(3) of the Internal Revenue
Code, and licensed under chapter 144 or by any other
jurisdiction, and "hospital services" are services authorized or
required to be performed by a "hospital" under chapter 144.
(b) Sales, except for those listed in paragraph (c), to an
outpatient surgical center are exempt, if the items purchased
are used in providing outpatient surgical services. For
purposes of this subdivision, "outpatient surgical center" means
an outpatient surgical center organized and operated for
charitable purposes within the meaning of section 501(c)(3) of
the Internal Revenue Code, and licensed under chapter 144 or by
any other jurisdiction. For the purposes of this subdivision,
"outpatient surgical services" means: (1) services authorized
or required to be performed by an outpatient surgical center
under chapter 144 or under the applicable licensure law of any
other jurisdiction; and (2) urgent care. For purposes of this
subdivision, "urgent care" means health services furnished to a
person whose medical condition is sufficiently acute to require
treatment unavailable through, or inappropriate to be provided
by, a clinic or physician's office, but not so acute as to
require treatment in a hospital emergency room.
(c) This exemption does not apply to the following products
and services:
(1) purchases made by a clinic, physician's office, or any
other medical facility not operating as a hospital or outpatient
surgical center, even though the clinic, office, or facility may
be owned and operated by a hospital or outpatient surgical
center;
(2) sales under section 297A.61, subdivisions 3, paragraph
(d), and 16, paragraph (c);
(3) building and construction materials used in
constructing buildings or facilities that will not be used
principally by the hospital or outpatient surgical center;
(4) building, construction, or reconstruction materials
purchased by a contractor or a subcontractor as a part of a
lump-sum contract or similar type of contract with a guaranteed
maximum price covering both labor and materials for use in the
construction, alteration, or repair of a hospital or outpatient
surgical center; or
(5) the leasing of a motor vehicle as defined in section
297B.01, subdivision 5.
(d) A limited liability company also qualifies for
exemption under this subdivision if (1) it consists of a sole
member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 61. Minnesota Statutes 2000, section 297A.70,
subdivision 8, is amended to read:
Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION
SYSTEM; PRODUCTS AND SERVICES.] Products and services including,
but not limited to, end user equipment used for construction,
ownership, operation, maintenance, and enhancement of the
backbone system of the regionwide public safety radio
communication system established under sections 473.891 to
473.905, are exempt. For purposes of this subdivision, backbone
system is defined in section 473.891, subdivision 9. This
subdivision is effective for purchases, sales, storage, use, or
consumption occurring before August 1, 2003, in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 62. Minnesota Statutes 2000, section 297A.70,
subdivision 10, is amended to read:
Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] (a) Tickets
or admissions to the premises of or events sponsored by an
organization that provides an event are exempt if all the gross
receipts are recorded as such, in accordance with generally
accepted accounting principles, on the books of one or more
organizations that provide an opportunity for citizens of the
state to participate in the creation, performance, or
appreciation of the arts are exempt if the, and provided that
each organization is either:
(1) a tax-exempt an organization within the meaning of
Minnesota Statutes 1980, section 290.05, subdivision 1, clause
(i), or described in section 501(c)(3) of the Internal Revenue
Code in which voluntary contributions make up at least the
following percent of the organization's annual revenue in its
most recently completed 12-month fiscal year, or in the current
year if the organization has not completed a 12-month fiscal
year:
(i) for a fiscal year completed in calendar year 2000,
three percent;
(ii) for a fiscal year completed in calendar year 2001,
four percent; and
(iii) for a fiscal year completed in calendar year 2002 or
thereafter, five percent; or
(2) a municipal board that promotes cultural and arts
activities. The exemption provided with respect to a municipal
board applies only to tickets and admissions to events sponsored
by the board.
The exemption only applies if the entire proceeds, after
reasonable expenses, are used solely to provide opportunities
for citizens of the state to participate in the creation,
performance, or appreciation of the arts.
(b) Tickets or admissions to the premises of the Minnesota
zoological garden are exempt, provided that the exemption under
this paragraph does not apply to tickets or admissions to
performances or events held on the premises unless the
performance or event is sponsored and conducted exclusively by
the Minnesota zoological board or employees of the Minnesota
zoological garden.
[EFFECTIVE DATE.] This section, paragraph (a), is effective
for tickets and admissions to events held after July 31, 2001,
but does not apply to events for which sales of tickets or
admissions were made prior to August 1, 2001. This section,
paragraph (b), is effective for sales made after July 31, 2001.
Sec. 63. Minnesota Statutes 2000, section 297A.70,
subdivision 13, is amended to read:
Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.]
(a) The following sales by the specified organizations for
fundraising purposes are exempt, subject to the limitations
listed in paragraph (b):
(1) all sales made by an organization that exists solely
for the purpose of providing educational or social activities
for young people primarily age 18 and under;
(2) all sales made by an organization that is a senior
citizen group or association of groups if (i) in general it
limits membership to persons age 55 or older; (ii) it is
organized and operated exclusively for pleasure, recreation, and
other nonprofit purposes; and (iii) no part of its net earnings
inures to the benefit of any private shareholders;
(3) the sale or use of tickets or admissions to a golf
tournament held in Minnesota if the beneficiary of the
tournament's net proceeds qualifies as a tax-exempt organization
under section 501(c)(3) of the Internal Revenue Code; and
(4) sales of gum, candy, and candy products sold for
fundraising purposes by a nonprofit organization that provides
educational and social activities primarily for young people age
18 years of age and under.
(b) The exemptions listed in paragraph (a) are limited in
the following manner:
(1) the exemption under paragraph (a), clauses (1) and (2),
applies only if the gross annual receipts of the organization
from fundraising do not exceed $10,000; and
(2) the exemption under paragraph (a), clause (1), does not
apply if the sales are derived from admission charges or from
activities for which the money must be deposited with the school
district treasurer under section 123B.49, subdivision 2, or be
recorded in the same manner as other revenues or expenditures of
the school district under section 123B.49, subdivision 4.
(c) Sales of tangible personal property are exempt if the
entire proceeds, less the necessary expenses for obtaining the
property, will be contributed to a registered combined
charitable organization described in section 309.501, to be used
exclusively for charitable, religious, or educational purposes,
and the registered combined charitable organization has given
its written permission for the sale. Sales that occur over a
period of more than 24 days per year are not exempt under this
paragraph.
(d) For purposes of this subdivision, a club, association,
or other organization of elementary or secondary school students
organized for the purpose of carrying on sports, educational, or
other extracurricular activities is a separate organization from
the school district or school for purposes of applying the
$10,000 limit.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001.
Sec. 64. Minnesota Statutes 2000, section 297A.70,
subdivision 14, is amended to read:
Subd. 14. [FUNDRAISING EVENTS SPONSORED BY NONPROFIT
GROUPS.] (a) Sales of tangible personal property at, and
admission charges for fundraising events sponsored by, a
nonprofit organization are exempt if the entire proceeds, less
the necessary expenses for the event, will be used solely and
exclusively for charitable, religious, or educational purposes.
Exempt sales include the sale of food, meals, and drinks, and
taxable services at the fundraising event.
(b) This exemption is limited in the following manner:
(1) it does not apply to admission charges for events
involving bingo or other gambling activities or to charges for
use of amusement devices involving bingo or other gambling
activities;
(2) all gross receipts are taxable if the profits are not
used solely and exclusively for charitable, religious, or
educational purposes;
(3) it does not apply unless the organization keeps a
separate accounting record, including receipts and disbursements
from each fundraising event that documents all deductions from
gross receipts with receipts and other records;
(4) it does not apply to any sale made by or in the name of
a nonprofit corporation as the active or passive agent of a
person that is not a nonprofit corporation;
(5) all gross receipts are taxable if fundraising events
exceed 24 days per year; and
(6) it does not apply to fundraising events conducted on
premises leased for more than five days but less than 30 days.
(c) For purposes of this subdivision, a "nonprofit
organization" means any unit of government, corporation,
society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic,
fraternal, and senior citizens' or veterans' purposes, no part
of the net earnings of which inures to the benefit of a private
individual.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 65. Minnesota Statutes 2000, section 297A.71,
subdivision 6, is amended to read:
Subd. 6. [BUSINESS INCUBATOR AND INDUSTRIAL PARK.]
Building materials and supplies for construction of a facility
that includes a business incubator and industrial park are
exempt if the facility:
(1) is owned and operated by a nonprofit charitable
organization that qualifies for tax exemption under section
501(c)(3) of the Internal Revenue Code;
(2) is used for the development of nonretail businesses,
offering access to equipment, space, services, and advice to the
tenant businesses, for the purpose of encouraging economic
development and job creation in the area served by the
organization, and emphasizes development of businesses that
manufacture products from materials found in the waste stream,
or manufacture alternative energy and conservation systems, or
make use of emerging environmental technologies;
(3) includes in its structure systems of material and
energy exchanges that use waste products from one industrial
process as sources of energy and material for other processes;
and
(4) makes use of solar and wind energy technology and
incorporates salvaged materials in its construction.
A limited liability company also qualifies for exemption
under this subdivision if (1) it consists of a sole member that
would qualify for the exemption, and (2) the items purchased
qualify for the exemption.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 66. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 24. [CONSTRUCTION MATERIALS AND EQUIPMENT;
AGRICULTURAL PROCESSING MATERIALS.] Materials and supplies used
or consumed in, and machinery and equipment incorporated into
the construction, improvement, or expansion of a soybean oilseed
processing facility are exempt if:
(1) the facility is owned and operated by a cooperative
organized under chapter 308A; and
(2) the facility is located in a county that has a
population of less than 21,000 according to the most recent
decennial census.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001, and before July 1, 2004.
Sec. 67. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 25. [POULTRY LITTER AND OTHER BIOMASS GENERATION
FACILITY CONSTRUCTION MATERIALS AND EQUIPMENT.] Materials and
supplies used or consumed in, and equipment incorporated into,
the construction, improvement, or expansion of a facility using
biomass to generate electricity are exempt if:
(1) the facility is designed to utilize poultry litter
biomass or other biomass as established in section 216B.2424, as
a primary fuel source; and
(2) the facility generates power that will be sold under a
contract approved by the public utilities commission in
accordance with the biomass mandate imposed under section
216B.2424.
[EFFECTIVE DATE.] This section is effective for purchases
and sales made after June 30, 2001, and before January 1, 2003.
Sec. 68. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 26. [DISASTER RELIEF; CONSTRUCTION MATERIALS; YELLOW
MEDICINE COUNTY FACILITY.] Materials and supplies used or
consumed in, and fixtures, furnishings, and equipment
incorporated into, the construction, improvement, or expansion
of the Yellow Medicine county law enforcement and family service
center are exempt. The tax must be imposed and collected as if
the rate under section 297A.62, subdivision 1, applied and then
refunded in the manner prescribed for refunds in section 297A.75.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2000, and before January 1, 2003.
Sec. 69. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 27. [CONSTRUCTION MATERIALS AND EQUIPMENT; WASTE
TIRES COGENERATION ELECTRIC GENERATING FACILITY.] Materials and
supplies used or consumed in, and equipment incorporated into,
the construction, improvement, or expansion of a facility using
waste tires to generate electricity are exempt if:
(1) the facility utilizes waste tires as a primary fuel in
generating electricity;
(2) the facility is a cogeneration facility; and
(3) the installed capacity of the facility is 1 to 25
megawatts.
[EFFECTIVE DATE.] This section is effective for purchases
and sales made on or after June 1, 2001, and before January 1,
2004.
Sec. 70. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 28. [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME
HOUSING PROJECTS.] (a) Purchases of materials and supplies used
or consumed in and equipment incorporated into the construction,
improvement, or expansion of qualified low-income housing
projects are exempt from the tax imposed under this chapter if
the owner of the qualified low-income housing project is:
(1) the public housing agency or housing and redevelopment
authority of a political subdivision;
(2) an entity exercising the powers of a housing and
redevelopment authority within a political subdivision;
(3) a limited partnership in which the sole general partner
is an authority under clause (1) or an entity under clause (2);
or
(4) a nonprofit corporation subject to the provisions of
chapter 317A, and qualifying under section 501(c)(3) or
501(c)(4) of the Internal Revenue Code of 1986, as amended.
This exemption applies regardless of whether the purchases
are made by the owner of the facility or a contractor.
(b) For purposes of this exemption, "qualified low-income
housing project" means:
(1) a housing or mixed use project in which at least 20
percent of the residential units are qualifying low-income
rental housing units as defined in section 273.126;
(2) a federally assisted low-income housing project
financed by a mortgage insured or held by the United States
Department of Housing and Urban Development under United States
Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or
1715z-1; United States Code, title 42, section 1437f; the Native
American Housing Assistance and Self-Determination Act, United
States Code, title 25, section 4101 et seq.; or any similar
successor federal low-income housing program;
(3) a qualified low-income housing project as defined in
United States Code, title 26, section 42(g), meeting all of the
requirements for a low-income housing credit under section 42 of
the Internal Revenue Code regardless of whether the project
actually applies for or receives a low-income housing credit; or
(4) a project that will be operated in compliance with
Internal Revenue Service revenue procedure 96-32.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after July 31, 2001.
Sec. 71. Minnesota Statutes 2000, section 297A.72,
subdivision 1, is amended to read:
Subdivision 1. [DUTY OF RETAILER.] An A fully completed
exemption certificate conclusively relieves the retailer from
collecting and remitting the tax only if taken in good faith
from the purchaser at the time of sale.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after December 31, 2001.
Sec. 72. Minnesota Statutes 2000, section 297A.75, is
amended to read:
297A.75 [REFUND; APPROPRIATION.]
Subdivision 1. [TAX COLLECTED.] The tax on the gross
receipts from the sale of the following exempt items must be
imposed and collected as if the sale were taxable and the rate
under section 297A.62, subdivision 1, applied. The exempt items
include:
(1) capital equipment exempt under section 297A.68,
subdivision 5;
(2) building materials for an agricultural processing
facility exempt under section 297A.71, subdivision 13;
(3) building materials for mineral production facilities
exempt under section 297A.71, subdivision 14;
(4) building materials for correctional facilities under
section 297A.71, subdivision 3;
(5) building materials used in a residence for disabled
veterans exempt under section 297A.71, subdivision 11; and
(6) chair lifts, ramps, elevators, and associated building
materials exempt under section 297A.71, subdivision 12;
(7) building materials for the Long Lake Conservation
Center exempt under section 297A.71, subdivision 17; and
(8) materials, supplies, fixtures, furnishings, and
equipment for a county law enforcement and family service center
under section 297A.71, subdivision 26.
Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on
forms prescribed by the commissioner, a refund equal to the tax
paid on the gross receipts of the exempt items must be paid to
the applicant. Only the following persons may apply for the
refund:
(1) for subdivision 1, clauses (1) to (3), the applicant
must be the purchaser;
(2) for subdivision 1, clause clauses (4), (7), and (8),
the applicant must be the governmental subdivision;
(3) for subdivision 1, clause (5), the applicant must be
the recipient of the benefits provided in United States Code,
title 38, chapter 21; and
(4) for subdivision 1, clause (6), the applicant must be
the owner of the homestead property.
Subd. 3. [APPLICATION.] (a) The application must include
sufficient information to permit the commissioner to verify the
tax paid. If the tax was paid by a contractor, subcontractor,
or builder, under subdivision 1, clause (4), (5), or (6), (7),
or (8), the contractor, subcontractor, or builder must furnish
to the refund applicant a statement including the cost of the
exempt items and the taxes paid on the items unless otherwise
specifically provided by this subdivision. The provisions of
sections 289A.40 and 289A.50 apply to refunds under this section.
(b) An applicant may not file more than two applications
per calendar year for refunds for taxes paid on capital
equipment exempt under section 297A.68, subdivision 5.
Subd. 4. [INTEREST.] Interest must be paid on the refund
at the rate in section 270.76 from the date the refund claim is
filed for taxes paid under subdivision 1, clauses (1) to (3),
and (5), and from 60 days after the date the refund claim is
filed with the commissioner for claims filed under subdivision
1, clauses (4) and, (6), (7), and (8).
Subd. 5. [APPROPRIATION.] The amount required to make the
refunds is annually appropriated to the commissioner.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 73. Minnesota Statutes 2000, section 297A.77,
subdivision 1, is amended to read:
Subdivision 1. [COLLECTION OF TAX AT TIME OF SALE.] The
tax must be stated and charged separately from the sales
price or charge for service insofar as practicable and must be
collected by the seller from the purchaser.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 74. Minnesota Statutes 2000, section 297A.80, is
amended to read:
297A.80 [TAXES IN OTHER STATES; OFFSET AGAINST USE TAX.]
If an article of tangible personal property or an item
listed in section 297A.63 has already been taxed by another
state and any subdivision thereof for its sale, storage, use, or
other consumption in an amount less than the tax imposed by this
chapter, then as to the person who paid the tax in the other
state or any subdivision thereof, section 297A.63 applies only
at a rate measured by the difference between the rate imposed
under section 297A.62 and the rate by which the previous tax was
computed. If the tax imposed in the other state or any
subdivision thereof is equal to or greater than the tax imposed
in this state, then no tax is due from that person under section
297A.63. The credit shall be applied first against the amount
of any use tax due the state, and any unused portion of the
credit shall then be applied against any use tax due a
subdivision.
[EFFECTIVE DATE.] This section is effective for sales and
purchases occurring after December 31, 2001.
Sec. 75. Minnesota Statutes 2000, section 297A.86,
subdivision 1, is amended to read:
Subdivision 1. [NOTICE OF REVOCATION; HEARINGS.] (a) If:
(1) a person fails to comply with this chapter or the sales and
use tax provisions of chapter 289A or the rules adopted under
either chapter related to sales tax, or (2) any retailer
purchases for resale from an unlicensed seller more than 20,000
cigarettes or $500 or more worth of tobacco products, without
reasonable cause, the commissioner may give the person 30 days'
notice in writing, specifying the violations, and stating that
based on the violations the commissioner intends to revoke the
person's permit. The notice must also advise the person of the
right to contest the revocation under this subdivision. It must
also explain the general procedures for a contested case hearing
under chapter 14. The notice may be served personally or by
mail in the manner prescribed for service of an order of
assessment.
(b) If the person does not request a hearing within 30 days
after the date of the notice of intent, the commissioner may
serve a notice of revocation of permit upon the person, and the
permit is revoked. If a hearing is timely requested, and held,
the permit is revoked after the commissioner serves an order of
revocation of permit under section 14.62, subdivision 1.
[EFFECTIVE DATE.] This section is effective for violations
occurring on or after August 1, 2001.
Sec. 76. Minnesota Statutes 2000, section 297A.89,
subdivision 1, is amended to read:
Subdivision 1. [COMMISSIONER MAY PERMIT.] The commissioner
may permit purchasers to pay taxes imposed by this chapter
directly to the commissioner. Any taxes paid by purchasers
under this section are considered use taxes, except for local
sales taxes when no corresponding local use tax is imposed.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 77. Minnesota Statutes 2000, section 297A.90,
subdivision 1, is amended to read:
Subdivision 1. [REGISTRATION; RECORDS.] (a) A person who
is engaged in interstate for-hire transportation of tangible
personal property or passengers by motor vehicle may, under
rules prescribed by the commissioner, register as a retailer and
pay the taxes imposed by this chapter in accordance with this
section. Any taxes paid under this section are use taxes,
except local sales taxes when no corresponding local use tax is
imposed.
(b) As used in this section, "person" means:
(1) one who possesses a certificate or permit or has
completed a registration process that authorizes for-hire
transportation of property or passengers from the United States
Department of Transportation, the transportation regulation
board, or the department of transportation;
(2) one who transports commodities defined as "exempt" in
for-hire transportation in interstate commerce; or
(3) one who transports tangible personal property in
interstate commerce, pursuant to contracts with persons
described in clause (1) or (2).
Persons qualifying under clause (2) or (3) must maintain on a
current basis the same type of mileage records that are required
by persons specified in clause (1) by the United States
Department of Transportation.
(c) Persons who in the course of their business are
transporting solely their own goods in interstate commerce may
also register as retailers under rules prescribed by the
commissioner and pay the taxes imposed by this chapter in
accordance with this section.
[EFFECTIVE DATE.] This section is effective for taxes paid
after June 30, 2001.
Sec. 78. Minnesota Statutes 2000, section 297A.91,
subdivision 1, is amended to read:
Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL
TRANSPORT.] (a) If the retailer does not have a sales or use tax
permit and has been engaging in transporting personal property
into the state without payment of the tax, the commissioner of
revenue or the commissioner's agents may seize in the name of
the state any truck, automobile, or means of transportation not
owned or operated by a common for-hire carrier, used in the
illegal importation and transportation of any tangible personal
property by a retailer or the retailer's agent or employee. The
commissioner may demand the forfeiture and sale of the truck,
automobile, or other means of transportation together with the
property being transported illegally, unless the owner
establishes to the satisfaction of the commissioner or the court
that the owner had no notice or knowledge or reason to believe
that the vehicle was used or intended to be used in any such
violation.
(b) Within two days after the seizure, the person making
the seizure shall deliver an inventory of the vehicle and
property seized to the person from whom the seizure was made, if
known, and to any person known or believed to have any right,
title, interest, or lien on the vehicle or property. The person
making the seizure shall also file a copy of the inventory with
the commissioner.
[EFFECTIVE DATE.] This section is effective for seizures
made after June 30, 2001.
Sec. 79. Minnesota Statutes 2000, section 297A.92,
subdivision 2, is amended to read:
Subd. 2. [AUCTIONS OF SECURITY.] The commissioner may sell
property deposited as security at public auction if necessary to
recover the amount required to be collected, including any
interest and penalties. Notice of the sale must be served upon
the person who deposited the security. It must be served
personally, or by mail as prescribed for the service of a notice
of a deficiency an order of assessment under section 289A.37,
subdivision 5. After a sale any surplus above the amount due
not required as security under this section must be returned to
the person who deposited the security.
[EFFECTIVE DATE.] This section is effective for auctions
held after June 30, 2001.
Sec. 80. Minnesota Statutes 2000, section 297A.94, as
amended by Laws 2001, chapter 185, section 33, is amended to
read:
297A.94 [DEPOSIT OF REVENUES.]
(a) Except as provided in this section, the commissioner
shall deposit the revenues, including interest and penalties,
derived from the taxes imposed by this chapter in the state
treasury and credit them to the general fund.
(b) The commissioner shall deposit taxes in the Minnesota
agricultural and economic account in the special revenue fund if:
(1) the taxes are derived from sales and use of property
and services purchased for the construction and operation of an
agricultural resource project; and
(2) the purchase was made on or after the date on which a
conditional commitment was made for a loan guaranty for the
project under section 41A.04, subdivision 3.
The commissioner of finance shall certify to the commissioner
the date on which the project received the conditional
commitment. The amount deposited in the loan guaranty account
must be reduced by any refunds and by the costs incurred by the
department of revenue to administer and enforce the assessment
and collection of the taxes.
(c) The commissioner shall deposit the revenues, including
interest and penalties, derived from the taxes imposed on sales
and purchases included in section 297A.61, subdivision 16,
paragraphs (b) and (f) 3, paragraph (g), clauses (1) and (4), in
the state treasury, and credit them as follows:
(1) first to the general obligation special tax bond debt
service account in each fiscal year the amount required by
section 16A.661, subdivision 3, paragraph (b); and
(2) after the requirements of clause (1) have been met, the
balance to the general fund.
(d) The commissioner shall deposit the revenues, including
interest and penalties, collected under section 297A.64,
subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall
transfer to the highway user tax distribution fund an amount
equal to the excess fees collected under section 297A.64,
subdivision 5, for the previous calendar year.
(e) For fiscal year 2001, 97 percent, and for fiscal year
2002 and thereafter, 87 percent of the revenues, including
interest and penalties, transmitted to the commissioner under
section 297A.65, must be deposited by the commissioner in the
state treasury as follows:
(1) 50 percent of the receipts must be deposited in the
heritage enhancement account in the game and fish fund, and may
be spent only on activities that improve, enhance, or protect
fish and wildlife resources, including conservation,
restoration, and enhancement of land, water, and other natural
resources of the state;
(2) 22.5 percent of the receipts must be deposited in the
natural resources fund, and may be spent only for state parks
and trails;
(3) 22.5 percent of the receipts must be deposited in the
natural resources fund, and may be spent only on metropolitan
park and trail grants;
(4) three percent of the receipts must be deposited in the
natural resources fund, and may be spent only on local trail
grants; and
(5) two percent of the receipts must be deposited in the
natural resources fund, and may be spent only for the Minnesota
zoological garden, the Como park zoo and conservatory, and the
Duluth zoo.
(f) The revenue dedicated under paragraph (e) may not be
used as a substitute for traditional sources of funding for the
purposes specified, but the dedicated revenue shall supplement
traditional sources of funding for those purposes. Land
acquired with money deposited in the game and fish fund under
paragraph (e) must be open to public hunting and fishing during
the open season, except that in aquatic management areas or on
lands where angling easements have been acquired, fishing may be
prohibited during certain times of the year and hunting may be
prohibited. At least 87 percent of the money deposited in the
game and fish fund for improvement, enhancement, or protection
of fish and wildlife resources under paragraph (e) must be
allocated for field operations.
[EFFECTIVE DATE.] This section is effective for revenues
deposited after June 30, 2001.
Sec. 81. Minnesota Statutes 2000, section 297A.99,
subdivision 7, is amended to read:
Subd. 7. [EXEMPTIONS.] (a) All goods or services that are
otherwise exempt from taxation under this chapter are exempt
from a political subdivision's tax.
(b) The gross receipts from the sale of tangible personal
property that meets the requirement of section 297A.68,
subdivision 13 or 14 15, are exempt, except the qualification
test applies based on the boundaries of the political
subdivision instead of the state of Minnesota.
(c) All mobile transportation equipment, and parts and
accessories attached to or to be attached to the equipment are
exempt, if purchased by a holder of a motor carrier direct pay
permit under section 297A.90.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2001.
Sec. 82. Minnesota Statutes 2000, section 297A.99,
subdivision 9, is amended to read:
Subd. 9. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.]
(a) The commissioner of revenue shall collect the taxes subject
to this section. The commissioner may collect the tax with the
state sales and use tax. All taxes under this section are
subject to the same penalties, interest, and enforcement
provisions as apply to the state sales and use tax.
(b) A request for a refund of state sales tax paid in
excess of the amount of tax legally due includes a request for a
refund of the political subdivision taxes paid on the goods or
services. The commissioner shall refund to the taxpayer the
full amount of the political subdivision taxes paid on exempt
sales or use.
(c) A political subdivision that is collecting and
administering its own sales and use tax before January 1, 1998,
may elect to be exempt from this subdivision and subdivision 11.
[EFFECTIVE DATE.] This section is effective January 1, 2003.
Sec. 83. Minnesota Statutes 2000, section 297A.99,
subdivision 11, is amended to read:
Subd. 11. [REVENUES; COST OF COLLECTION.] The commissioner
shall remit the proceeds of the tax, less refunds and a
proportionate share of the cost of collection, at least
quarterly, to the political subdivision. The commissioner shall
deduct from the proceeds remitted an amount that equals
(1) the direct and indirect costs of the department to
administer, audit, and collect the political subdivision's tax,
plus
(2) the political subdivision's proportionate share of the
indirect cost of administering all taxes under this section,
plus
(3) the cost of constructing and maintaining a zip code or
geo-code data base necessary for local sales tax collections
under the Streamlined Sales and Use Tax Agreement in section
297A.995.
The initial cost of constructing a data base under clause
(3) shall be distributed among the cities with a local sales tax
based on each city's population. The commissioner shall develop
a method for distributing the cost of maintaining the data base
among the cities with a local sales tax based on the number of
boundary changes for each city.
[EFFECTIVE DATE.] This section is effective for payments to
political subdivisions made after June 30, 2001, for costs
incurred after June 30, 2001.
Sec. 84. [297A.995] [UNIFORM SALES AND USE TAX
ADMINISTRATION ACT.]
Subdivision 1. [TITLE.] This section may be cited as the
Uniform Sales and Use Tax Administration Act.
Subd. 2. [DEFINITIONS.] As used in this section:
(a) "Agreement" means the Streamlined Sales and Use Tax
Agreement.
(b) "Certified automated system" means software certified
jointly by the states that are signatories to the agreement to
calculate the tax imposed by each jurisdiction on a transaction,
determine the amount of tax to remit to the appropriate state,
and maintain a record of the transaction.
(c) "Certified service provider" means an agent certified
jointly by the states that are signatories to the agreement to
perform all of the seller's sales tax functions.
Subd. 3. [LEGISLATIVE FINDING.] The legislature finds that
this state should enter into an agreement with one or more
states to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of
tax compliance for all sellers and for all types of commerce.
Subd. 4. [AUTHORITY TO ENTER AGREEMENT.] The commissioner
of revenue is authorized and directed to enter into the
agreement with one or more states to simplify and modernize
sales and use tax administration in order to substantially
reduce the burden of tax compliance for all sellers and for all
types of commerce. In furtherance of the agreement, the
commissioner is authorized to act jointly with other states that
are members of the agreement to establish standards for
certification of a certified service provider and certified
automated system and establish performance standards for
multistate sellers.
The commissioner is further authorized to take other
actions reasonably required to implement the provisions set
forth in this article. Other actions authorized by this section
include, but are not limited to, the adoption of rules and
regulations and the joint procurement, with other member states,
of goods and services in furtherance of the cooperative
agreement.
The commissioner or the commissioner's designee is
authorized to represent this state before the other states that
are signatories to the agreement.
Subd. 5. [RELATIONSHIP TO STATE LAW.] No provision of the
agreement authorized by this bill in whole or part invalidates
or amends any provision of the law of this state. Adoption of
the agreement by this state does not amend or modify any law of
this state. Implementation of any condition of the agreement in
this state, whether adopted before, at, or after membership of
this state in the agreement, must be by the action of this state.
Subd. 6. [AGREEMENT REQUIREMENTS.] The commissioner of
revenue shall not enter into the agreement unless the agreement
requires each state to abide by the following requirements:
(a) [UNIFORM STATE RATE.] The agreement must set
restrictions to achieve more uniform state rates through the
following:
(1) limiting the number of state rates;
(2) eliminating maximums on the amount of state tax that is
due on a transaction; and
(3) eliminating thresholds on the application of state tax.
(b) [UNIFORM STANDARDS.] The agreement must establish
uniform standards for the following:
(1) the sourcing of transactions to taxing jurisdictions;
(2) the administration of exempt sales;
(3) the allowances a seller can take for bad debts; and
(4) sales and use tax returns and remittances.
(c) [UNIFORM DEFINITIONS.] The agreement must require
states to develop and adopt uniform definitions of sales and use
tax terms. The definitions must enable a state to preserve its
ability to make policy choices not inconsistent with the uniform
definitions.
(d) [CENTRAL REGISTRATION.] The agreement must provide a
central, electronic registration system that allows a seller to
register to collect and remit sales and use taxes for all
signatory states.
(e) [NO NEXUS ATTRIBUTION.] The agreement must provide that
registration with the central registration system and the
collection of sales and use taxes in the signatory states will
not be used as a factor in determining whether the seller has
nexus with a state for any tax.
(f) [LOCAL SALES AND USE TAXES.] The agreement must provide
for reduction of the burdens of complying with local sales and
use taxes through the following:
(1) restricting and eliminating variances between the state
and local tax bases;
(2) requiring states to administer any sales and use taxes
levied by local jurisdictions within the state so that sellers
collecting and remitting these taxes will not have to register
or file returns with, remit funds to, or be subject to
independent audits from local taxing jurisdictions;
(3) restricting the frequency of changes in the local sales
and use tax rates and setting effective dates for the
application of local jurisdictional boundary changes to local
sales and use taxes; and
(4) providing notice of changes in local sales and use tax
rates and of changes in the boundaries of local taxing
jurisdictions.
(g) [MONETARY ALLOWANCES.] The agreement must outline any
monetary allowances that are to be provided by the states to
sellers or certified service providers.
(h) [STATE COMPLIANCE.] The agreement must require each
state to certify compliance with the terms of the agreement
prior to joining and to maintain compliance, under the laws of
the member state, with all provisions of the agreement while a
member.
(i) [CONSUMER PRIVACY.] The agreement must require each
state to adopt a uniform policy for certified service providers
that protects the privacy of consumers and maintains the
confidentiality of tax information.
(j) [ADVISORY COUNCILS.] The agreement must provide for the
appointment of an advisory council of private sector
representatives and an advisory council of nonmember state
representatives to consult with in the administration of the
agreement.
Subd. 7. [COOPERATING SOVEREIGNS.] The agreement
authorized by this bill is an accord among individual
cooperating sovereigns in furtherance of their governmental
functions. The agreement provides a mechanism among the member
states to establish and maintain a cooperative, simplified
system for the application and administration of sales and use
taxes under the duly adopted law of each member state.
Subd. 8. [LIMITED BINDING AND BENEFICIAL EFFECT.] (a) The
agreement authorized by this bill binds and inures only to the
benefit of this state and the other member states. No person,
other than a member state, is an intended beneficiary of the
agreement. Any benefit to a person other than a state is
established by the law of this state and the other member states
and not by the terms of the agreement.
(b) Consistent with paragraph (a), no person shall have any
cause of action or defense under the agreement or by virtue of
this state's approval of the agreement. No person may
challenge, in any action brought under any provision of law, any
action or inaction by any department, agency, or other
instrumentality of this state, or any political subdivision of
this state, on the ground that the action or inaction is
inconsistent with the agreement.
(c) No law of this state, or its application, may be
declared invalid as to any person or circumstance on the ground
that the provision or application is inconsistent with the
agreement.
Subd. 9. [SELLER AND THIRD-PARTY LIABILITY.] (a) A
certified service provider is the agent of a seller, with whom
the certified service provider has contracted, for the
collection and remittance of sales and use taxes. As the
seller's agent, the certified service provider is liable for
sales and use tax due each member state on all sales
transactions it processes for the seller except as set out in
this section.
A seller that contracts with a certified service provider
is not liable to the state for sales or use tax due on
transactions processed by the certified service provider unless
the seller misrepresented the type of items it sells or
committed fraud. In the absence of probable cause to believe
that the seller has committed fraud or made a material
misrepresentation, the seller is not subject to audit on the
transactions processed by the certified service provider. A
seller is subject to audit for transactions not processed by the
certified service provider. The member states acting jointly
may perform a system check of the seller and review the seller's
procedures to determine if the certified service provider's
system is functioning properly and the extent to which the
seller's transactions are being processed by the certified
service provider.
(b) A person that provides a certified automated system is
responsible for the proper functioning of that system and is
liable to the state for underpayments of tax attributable to
errors in the functioning of the certified automated system. A
seller that uses a certified automated system remains
responsible and is liable to the state for reporting and
remitting tax.
(c) A seller that has a proprietary system for determining
the amount of tax due on transactions and has signed an
agreement establishing a performance standard for that system is
liable for the failure of the system to meet the performance
standard.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 85. Minnesota Statutes 2000, 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, 355, 368, 721, 731, 1031, 1033, or
1563(a) of the Internal Revenue Code of 1986, as amended through
December 31, 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;
(12) purchase of a motor vehicle for use by a transit
provider exclusively to provide transit service is exempt if the
transit provider is either (i) receiving financial assistance or
reimbursement under section 174.24 or 473.384, or (ii) operating
under section 174.29, 473.388, or 473.405.
[EFFECTIVE DATE.] This section is effective for sales made
after July 31, 2001.
Sec. 86. [297F.185] [REVOCATION OF SALES AND USE TAX
PERMITS.]
If a retailer purchases for resale from an unlicensed
seller more than 20,000 cigarettes or $500 or more worth of
tobacco products, the commissioner may revoke the person's sales
and use tax permit as provided in section 297A.86.
[EFFECTIVE DATE.] This section is effective for violations
occurring on or after August 1, 2001.
Sec. 87. Laws 1986, chapter 396, section 5, is amended to
read:
Sec. 5. [LIQUOR, LODGING, AND RESTAURANT TAXES.]
The city may, by resolution, levy in addition to taxes
authorized by other law:
(1) a sales tax of not more than three percent on the gross
receipts on retail on-sales of intoxicating liquor and fermented
malt beverages described in section 473.592 occurring in the
downtown taxing area, provided that this tax may not be imposed
if sales of intoxicating liquor and fermented malt beverages are
exempt from taxation under chapter 297A;
(2) a sales tax of not more than three percent on the gross
receipts from the furnishing for consideration of lodging
described in section 473.592 by a hotel or motel which has more
than 50 rooms available for lodging; the tax imposed under this
clause shall be at a rate that, when added to the sum of the
rate of the sales tax imposed under Minnesota Statutes, chapter
297A, the rate of the sales tax imposed under section 4, and the
rate of any other taxes on lodging in the city of Minneapolis,
equals 12 13 percent; and
(3) a sales tax of not more than three percent on the gross
receipts on all sales of food primarily for consumption on or
off the premises by restaurants and places of refreshment as
defined by resolution of the city that occur within the downtown
taxing area.
These taxes shall be applied solely to pay costs of collection
and to pay or secure the payment of any principal of, premium
and interest on any bonds or any costs referred to in section 4,
subdivision 3. The commissioner of revenue may enter into
appropriate agreements with the city to provide for the
collection of these taxes by the state on behalf of the city.
The commissioner may charge the city a reasonable fee for its
collection from the proceeds of any taxes. These taxes shall be
subject to the same interest penalties and enforcement
provisions as the taxes imposed under section 473.592.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 88. Laws 1999, chapter 243, article 4, section 19, is
amended to read:
Sec. 19. [EFFECTIVE DATES.]
Sections 1, 2, 5, 7, 9, and 11 are effective for sales and
purchases made after June 30, 1999.
Section 3 is effective for amended returns and refund
claims filed on or after July 1, 1999.
Section 4 is effective the day following final enactment
and applies retroactively to all open tax years and to
assessments and appeals under Minnesota Statutes, sections
289A.38 and 289A.65, for which the time limits have not expired
on the date of final enactment of this act. The provisions of
Minnesota Statutes, section 289A.50, apply to refunds claimed
under section 4. Refunds claimed under section 4 must be filed
by the later of December 31, 1999, or the time limit under
Minnesota Statutes, section 289A.40, subdivision 1.
Section 6 is effective retroactively for sales and
purchases made after June 30, 1998.
Section 8 is effective for purchases and sales made after
the date of final enactment.
Section 10 is effective for purchases made after the date
of final enactment and before July 1, 2001 2003.
Section 12 is effective the day after final enactment.
Section 12, paragraphs (a) to (c), apply to all local sales
taxes enacted after July 1, 1999. Section 12, paragraph (d),
applies to all local sales taxes in effect at the time of, or
imposed after the day of, the enactment of this section.
Section 13 is effective the day following final enactment.
[EFFECTIVE DATE.] This section is effective the day after
final enactment.
Sec. 89. Laws 2000, chapter 490, article 8, section 17,
the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after January 1, 2000, and before December
31, 2000 2001.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies retroactively to sales and
purchases made on or after December 31, 2000.
Sec. 90. [PLAN FOR REPLACEMENT OF REVENUES RAISED BY
CURRENT TAXES ON ALCOHOL.]
The commissioner of revenue, in consultation with
interested parties from the alcohol beverage industry, shall
prepare a plan to replace the current higher sales tax on liquor
and beer under Minnesota Statutes, section 297A.62, subdivision
2, and the liquor tax under Minnesota Statutes, chapter 297G,
with a single tax on liquor. The commissioner shall report the
plan to the legislature by January 1, 2003. The plan should
include recommendations for tax rates, tax base, and tax
administration, and should be structured so that the revenue
raised is equivalent to the revenue lost from the repeal of the
current taxes. The plan should also, to the extent practical,
mirror the current incidence of the tax as it relates to
different types of liquor, and whether the liquor is consumed
on-site or off-site.
[EFFECTIVE DATE.] This section is effective the day after
final enactment.
Sec. 91. [PLAN FOR REPLACEMENT OF REVENUES RAISED BY TAXES
ON SHORT-TERM MOTOR VEHICLE RENTAL.]
The commissioner of revenue, in consultation with
interested parties from the industry, shall prepare a plan to
replace the current sales tax on short-term motor vehicle
rentals under Minnesota Statutes, section 297A.64, with a single
tax or fee on motor vehicle rentals. The commissioner shall
report the plan to the legislature by January 1, 2003. The plan
should include recommendations for tax rates, tax base, and tax
administration, and should be structured so that the state
revenue raised is equivalent to the state revenue lost from the
repeal of the current taxes.
[EFFECTIVE DATE.] This section is effective the day after
final enactment.
Sec. 92. [DIRECTIONS TO COMMISSIONER OF REVENUE.]
The commissioner of revenue shall request that the member
states of the Streamlined Sales and Use Tax Agreement adopt at
their earliest convenience a uniform definition of clothing made
from fur.
Sec. 93. [INSTRUCTIONS TO REVISOR.]
(a) In the next edition of Minnesota Statutes, the revisor
of statutes shall put the definitions in section 297A.68,
subdivision 5, paragraph (d), in alphabetical order and correct
any references to the reordered definitions.
(b) In the next edition of Minnesota Statutes, the revisor
of statutes shall renumber section 297A.68, subdivision 27, as
297A.67, subdivision 26, and correct any references to the
renumbered section.
Sec. 94. [APPROPRIATIONS.]
$1,701,500 is appropriated in fiscal year 2002 from the
general fund to the commissioner of revenue to administer this
article. $1,125,000 is appropriated in fiscal year 2003 from
the general fund to the commissioner of revenue to administer
this article. These are one-time appropriations. If the
commissioner determines that an appropriation is needed for this
purpose in fiscal year 2004 and beyond, it must be presented as
a change request.
Sec. 95. [REPEALER.]
(a) Minnesota Statutes 2000, sections 297A.61, subdivision
16; 297A.68, subdivision 21; and 297A.71, subdivisions 2 and 16,
are repealed effective for sales and purchases occurring after
June 30, 2001, except that the repeal of section 297A.61,
subdivision 16, paragraph (d), is effective for sales and
purchases occurring after July 31, 2001.
(b) Minnesota Statutes 2000, sections 297A.62, subdivision
2, and 297A.64, subdivision 1, are repealed effective for sales
and purchases made after December 31, 2005.
(c) Minnesota Statutes 2000, section 297A.71, subdivision
15, is repealed effective for sales and purchases made after
June 30, 2002.
(d) Minnesota Statutes 2000, section 289A.60, subdivision
15, is repealed effective for liabilities after January 1, 2003.
ARTICLE 13
SPECIAL TAXES
Section 1. Minnesota Statutes 2000, section 69.021,
subdivision 5, is amended to read:
Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of
fire state aid available for apportionment, before the addition
of the minimum fire state aid allocation amount under
subdivision 7, is equal to 107 percent of the amount of premium
taxes paid to the state upon the fire, lightning, sprinkler
leakage, and extended coverage premiums reported to the
commissioner by insurers on the Minnesota Firetown Premium
Report. This amount shall be reduced by the amount required to
pay the state auditor's costs and expenses of the audits or
exams of the firefighters relief associations.
The total amount for apportionment in respect to fire state
aid must not be less than two percent of the premiums reported
to the commissioner by insurers on the Minnesota Firetown
Premium Report after subtracting the following amounts:
(1) the amount required to pay the state auditor's costs
and expenses of the audits or exams of the firefighters relief
associations; and
(2) one percent of the premiums reported by town and
farmers' mutual insurance companies and mutual property and
casualty companies with total assets of $5,000,000 or less.
(b) The total amount for apportionment as police state aid
is equal to 104 percent of the amount of premium taxes paid to
the state on the premiums reported to the commissioner by
insurers on the Minnesota Aid to Police Premium Report, plus the
payment amounts received under section 60A.152 since the last
aid apportionment, and reduced by the amount required to pay the
costs and expenses of the state auditor for audits or exams of
police relief associations. The total amount for apportionment
in respect to the police state aid program must not be less than
two percent of the amount of premiums reported to the
commissioner by insurers on the Minnesota Aid to Police Premium
Report after subtracting the amount required to pay the state
auditor's cost and expenses of the audits or exams of the police
relief associations.
(c) The commissioner shall calculate the percentage of
increase or decrease reflected in the apportionment over or
under the previous year's available state aid using the same
premiums as a basis for comparison.
(d) The amount for apportionment in respect to peace
officer state aid under paragraph (b) must be further reduced by
$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,
and $2,404,000 in fiscal year 2001. These reductions in this
paragraph cancel to the general fund.
(e) The amount for apportionment of police state aid under
paragraph (b) is annually increased by an amount equal to the
revenues under the tax on automobile risk self-insurance under
Minnesota Statutes 2000, section 297I.05, subdivision 8, that
were collected in fiscal year 2001. An amount sufficient to pay
this increase is annually appropriated from the general fund.
[EFFECTIVE DATE.] This section is effective beginning with
fiscal year 2002.
Sec. 2. Minnesota Statutes 2000, 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. As used in sections 168.013,
subdivision 1a and 168.017, the following terms have the
meanings given: "initial registration" means the 12 consecutive
month calendar period from the day of first registration of a
vehicle in Minnesota; and "renewal periods" means the 12
consecutive calendar month periods following the initial
registration period.
[EFFECTIVE DATE.] This section is effective for first
registrations in Minnesota occurring on or after August 1, 2001,
and for renewals of registrations that have been assigned
expiration dates of September 2001 or later.
Sec. 3. Minnesota Statutes 2000, section 168.017,
subdivision 3, is amended to read:
Subd. 3. [EXCEPTIONS.] (a) The registrar shall register
all vehicles subject to registration under the monthly series
system for a period of 12 consecutive calendar months, unless:
(1) the application is an original rather than renewal
application; or
(2) the applicant is a licensed motor vehicle lessor under
section 168.27, in which case the applicant may apply for
original initial or renewed registration of a vehicle for a
period of four or more months, the month of expiration to be
designated by the applicant at the time of registration.
However, to qualify for this exemption, the applicant must
present the application to the registrar at St. Paul, or at
deputy registrar offices as the registrar may designate.
(b) In any instance except that of a licensed motor vehicle
lessor, the registrar shall not approve registering the vehicle
subject to the application for a period of less than three
months, except when the registrar determines that to do
otherwise will help to equalize the registration and renewal
work load of the department.
[EFFECTIVE DATE.] This section is effective for first
registrations in Minnesota occurring on or after August 1, 2001,
and for renewals of registrations that have been assigned
expiration dates of September 2001 or later.
Sec. 4. Minnesota Statutes 2000, section 239.101,
subdivision 3, is amended to read:
Subd. 3. [PETROLEUM INSPECTION FEE.] A person who owns
petroleum products held in storage at a pipeline terminal, river
terminal, or refinery shall pay a petroleum inspection fee of 85
cents for every 1,000 gallons sold or withdrawn from the
terminal or refinery storage An inspection fee is imposed on
petroleum products when received by the first licensed
distributor, and on petroleum products received and held for
sale or use by any person when the petroleum products have not
previously been received by a licensed distributor. The
petroleum inspection fee is 85 cents for every 1,000 gallons
received. The commissioner of revenue shall collect the fee.
The revenue from the fee must first be applied to cover the
amounts appropriated for petroleum product quality inspection
expenses, for the inspection and testing of petroleum product
measuring equipment, and for petroleum supply monitoring under
chapter 216C.
The commissioner of revenue shall credit a person for
inspection fees previously paid in error or for any material
exported or sold for export from the state upon filing of a
report as prescribed by the commissioner of revenue. The
commissioner of revenue may collect the inspection fee along
with any taxes due under chapter 296A.
[EFFECTIVE DATE.] This section is effective for petroleum
products received on or after August 1, 2001.
Sec. 5. Minnesota Statutes 2000, section 296A.07,
subdivision 4, is amended to read:
Subd. 4. [TRANSIT SYSTEM EXEMPT EXEMPTIONS.] The
provisions of subdivision 1 do not apply to gasoline purchased
by:
(1) a transit system or transit provider receiving
financial assistance or reimbursement under section 174.24,
256B.0625, subdivision 17, or 473.384; or
(2) an ambulance service licensed under chapter 144E.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001.
Sec. 6. Minnesota Statutes 2000, section 296A.08,
subdivision 3, is amended to read:
Subd. 3. [TRANSIT SYSTEM EXEMPT EXEMPTIONS.] The
provisions of subdivisions 1 and 2 do not apply to special fuel
or alternative fuels purchased by:
(1) a transit system or transit provider receiving
financial assistance or reimbursement under section 174.24,
256B.0625, subdivision 17, or 473.384; or
(2) an ambulance service licensed under chapter 144E.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after July 31, 2001.
Sec. 7. Minnesota Statutes 2000, section 296A.15,
subdivision 1, is amended to read:
Subdivision 1. [MONTHLY GASOLINE REPORT; SHRINKAGE
ALLOWANCE.] (a) Except as provided in paragraph (e), on or
before the 23rd day of each month, every person who is required
to pay a gasoline tax shall file with the commissioner a report,
in the form and manner prescribed by the commissioner, showing
the number of gallons of petroleum products received by the
reporter during the preceding calendar month, and other
information the commissioner may require. A written report is
deemed to have been filed as required in this subdivision if
postmarked on or before the 23rd day of the month in which the
tax is payable.
(b) The number of gallons of gasoline must be reported in
United States standard liquid gallons, 231 cubic inches, except
that the commissioner may upon written application and for cause
shown permit the distributor to report the number of gallons of
gasoline as corrected to a temperature of 60-degrees
Fahrenheit. If the application is granted, all gasoline covered
in the application and allowed by the commissioner must continue
to be reported by the distributor on the adjusted basis for a
period of one year from the date of the granting of the
application. The number of gallons of petroleum products other
than gasoline must be reported as originally invoiced. Each
report must show separately the number of gallons of aviation
gasoline received by the reporter during each calendar month.
(c) Each report must also include the amount of gasoline
tax on gasoline received by the reporter during the preceding
month. In computing the tax a deduction of three 2.5 percent of
the quantity of gasoline received by a distributor shall be made
for evaporation and loss. At the time of reporting, the
reporter shall submit satisfactory evidence that one-third of
the three 2.5 percent deduction has been credited or paid to
dealers on quantities sold to them.
(d) Each report shall contain a confession of judgment for
the amount of the tax shown due to the extent not timely paid.
(e) Under certain circumstances and with the approval of
the commissioner, taxpayers may be allowed to file reports
annually.
[EFFECTIVE DATE.] This section is effective for reports due
on or after August 1, 2001.
Sec. 8. Minnesota Statutes 2000, section 297H.04, is
amended by adding a subdivision to read:
Subd. 4. [DISPOSAL WITH MIXED WASTE; RATE.] Nonmixed
municipal solid waste that is separately collected or processed,
but is disposed of within the permitted boundaries of a land
disposal facility that is also actively accepting and disposing
of mixed municipal solid waste, shall be taxed at the rate for
mixed municipal solid waste, unless the facility owner and
operator can demonstrate a physical separation between the mixed
municipal solid waste disposal area and nonmixed municipal solid
waste disposal area, such that any air or liquid emissions being
collected from the disposal areas are collected separately.
[EFFECTIVE DATE.] This section is effective for waste
disposed of after July 31, 2001.
Sec. 9. Minnesota Statutes 2000, section 297H.06, is
amended by adding a subdivision to read:
Subd. 3. [CONSTRUCTION DEBRIS IN A DISASTER AREA.] The tax
is not imposed on construction debris generated from repair and
demolition activities caused by a disaster occurring in a
presidentially declared disaster area, provided that the
construction debris is disposed of in a waste management
facility designated by the commissioner of the pollution control
agency. To be exempt, the debris must be disposed of within 18
months following the presidential declaration.
[EFFECTIVE DATE.] This section is effective for disaster
areas declarations made after April 15, 2001.
Sec. 10. Minnesota Statutes 2000, section 297I.40,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENT TO PAY.] On or before April 1
March 15, June 1 15, September 15, and December 1 of each year
15 of the current year, every taxpayer subject to tax under
section 297I.05, subdivisions 1 to 6, and 12, paragraphs (a),
clauses (1) to (5), (b), and (e), must pay to the commissioner
an installment equal to one-third one-fourth of the insurer's
total estimated tax for the current year.
[EFFECTIVE DATE.] This section is effective for payments
required to be made after December 31, 2001.
Sec. 11. Minnesota Statutes 2000, section 297I.40,
subdivision 2, is amended to read:
Subd. 2. [AMOUNT OF REQUIRED INSTALLMENT.] The amount of
any required installment is one-third one-fourth of the lesser
of
(1) 80 percent of the tax imposed for the current year, or
(2) 100 percent of the tax paid for the previous year.
[EFFECTIVE DATE.] This section is effective for payments
required to be made after December 31, 2001.
Sec. 12. Minnesota Statutes 2000, section 297I.40,
subdivision 7, is amended to read:
Subd. 7. [APRIL MARCH ESTIMATED PAYMENT.] A taxpayer who
claims a refund of an overpayment on an original return may
elect to have all or any portion of the overpayment applied as a
credit to the April 1 March 15 estimated tax payment for the
year following the year of the return. The credit is considered
applied on April 1 March 15. Notwithstanding section 297I.80,
the amount credited does not bear interest.
[EFFECTIVE DATE.] This section is effective for payments
required to be made after December 31, 2001.
Sec. 13. Minnesota Statutes 2000, section 349.19,
subdivision 2a, is amended to read:
Subd. 2a. [TAX REFUND OR CREDIT.] (a) Each organization
that receives a refund or credit under section 297E.02,
subdivision 4, paragraph (d), must within four business days of
receiving a refund under that paragraph deposit the refund in
the organization's gambling account.
(b) In addition, each organization must annually calculate
5.26 percent of the sum of the amount of tax it paid under:
(1) section 297E.02, subdivision 1, on gross receipts, less
prizes paid, after August 1, 1998; and
(2) section 297E.02, subdivision 6, on combined receipts
received after August 1, 1998.
(c) The calculated amount must be reported to the board on
a form prescribed by the board by March 20 of the year after the
calendar year for which the calculated amount is made. The
calculated amount must be filed as part of the organization's
report of expenditure of profits from lawful gambling required
under section 349.19, subdivision 5.
(d) The organization may expend the tax refund or credit
issued under section 297E.02, subdivision 4, paragraph (d), plus
the amount calculated under paragraph (b), only for lawful
purposes, other than lawful purposes described in section
349.12, subdivision 25, paragraph (a), clauses (8), (9), and
(12). Amounts subject to this paragraph must be spent for
qualifying lawful purposes no later than one year after the
refund or credit is received or the tax savings calculated under
paragraph (b).
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 14. [APPROPRIATION.]
$140,000 for fiscal year 2002 is appropriated from the
highway user tax distribution fund to the commissioner of
revenue for systems modifications associated with petroleum tax
reform.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. [REPEALER.]
Minnesota Statutes 2000, sections 297I.05, subdivision 8;
and 297I.30, subdivision 3, are repealed effective for calendar
years beginning after December 31, 1999.
ARTICLE 14
MINNESOTACARE TAXES
Section 1. Minnesota Statutes 2000, section 256L.02,
subdivision 3, is amended to read:
Subd. 3. [FINANCIAL MANAGEMENT.] (a) The commissioner
shall manage spending for the MinnesotaCare program in a manner
that maintains a minimum reserve in accordance with section
16A.76. As part of each state revenue and expenditure forecast,
the commissioner must make an assessment of the expected
expenditures for the covered services for the remainder of the
current biennium and for the following biennium. The estimated
expenditure, including the reserve requirements described in
section 16A.76, shall be compared to an estimate of the revenues
that will be available in the health care access fund. Based on
this comparison, and after consulting with the chairs of the
house ways and means committee and the senate finance committee,
and the legislative commission on health care access, the
commissioner shall, as necessary, make the adjustments specified
in paragraph (b) to ensure that expenditures remain within the
limits of available revenues for the remainder of the current
biennium and for the following biennium. The commissioner shall
not hire additional staff using appropriations from the health
care access fund until the commissioner of finance makes a
determination that the adjustments implemented under paragraph
(b) are sufficient to allow MinnesotaCare expenditures to remain
within the limits of available revenues for the remainder of the
current biennium and for the following biennium.
(b) The adjustments the commissioner shall use must be
implemented in this order: first, stop enrollment of single
adults and households without children; second, upon 45 days'
notice, stop coverage of single adults and households without
children already enrolled in the MinnesotaCare program; third,
upon 90 days' notice, decrease the premium subsidy amounts by
ten percent for families with gross annual income above 200
percent of the federal poverty guidelines; fourth, upon 90 days'
notice, decrease the premium subsidy amounts by ten percent for
families with gross annual income at or below 200 percent; and
fifth, require applicants to be uninsured for at least six
months prior to eligibility in the MinnesotaCare program. If
these measures are insufficient to limit the expenditures to the
estimated amount of revenue, the commissioner shall further
limit enrollment or decrease premium subsidies.
Sec. 2. Minnesota Statutes 2000, section 295.50,
subdivision 3, is amended to read:
Subd. 3. [GROSS REVENUES.] "Gross revenues" are total
amounts received in money or otherwise by:
(1) a hospital for patient services;
(2) a surgical center for patient services;
(3) a health care provider, other than a staff model health
carrier, for patient services;
(4) a wholesale drug distributor for sale or distribution
of legend drugs that are delivered in Minnesota by the wholesale
drug distributor, by common carrier, or by mail, unless the
legend drugs are delivered to another wholesale drug distributor
who sells legend drugs exclusively at wholesale. Legend drugs
do not include nutritional products as defined in Minnesota
Rules, part 9505.0325; and
(5) a staff model health plan company as gross premiums for
enrollees, copayments, deductibles, coinsurance, and fees for
patient services covered under its contracts with groups and
enrollees.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2000, section 295.50,
subdivision 4, is amended to read:
Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care
provider" means:
(1) a person whose health care occupation is regulated or
required to be regulated by the state of Minnesota furnishing
any or all of the following goods or services directly to a
patient or consumer: medical, surgical, optical, visual,
dental, hearing, nursing services, drugs, laboratory, diagnostic
or therapeutic services;
(2) a person who provides goods and services not listed in
clause (1) that qualify for reimbursement under the medical
assistance program provided under chapter 256B;
(3) a staff model health plan company;
(4) an ambulance service required to be licensed; or
(5) a person who sells or repairs hearing aids and related
equipment or prescription eyewear.
(b) Health care provider does not include:
(1) hospitals; medical supplies distributors, except as
specified under paragraph (a), clause (5); nursing homes
licensed under chapter 144A or licensed in any other
jurisdiction; pharmacies; surgical centers; bus and taxicab
transportation, or any other providers of transportation
services other than ambulance services required to be licensed;
supervised living facilities for persons with mental retardation
or related conditions, licensed under Minnesota Rules, parts
4665.0100 to 4665.9900; residential care homes licensed under
chapter 144B; board and lodging establishments providing only
custodial services that are licensed under chapter 157 and
registered under section 157.17 to provide supportive services
or health supervision services; adult foster homes as defined in
Minnesota Rules, part 9555.5105; day training and habilitation
services for adults with mental retardation and related
conditions as defined in section 252.41, subdivision 3; and
boarding care homes, as defined in Minnesota Rules, part
4655.0100; and adult day care centers as defined in Minnesota
Rules, part 9555.9600;
(2) home health agencies as defined in Minnesota Rules,
part 9505.0175, subpart 15; a person providing personal care
services and supervision of personal care services as defined in
Minnesota Rules, part 9505.0335; a person providing private duty
nursing services as defined in Minnesota Rules, part 9505.0360;
and home care providers required to be licensed under chapter
144A;
(3) a person who employs health care providers solely for
the purpose of providing patient services to its employees; and
(4) an educational institution that employs health care
providers solely for the purpose of providing patient services
to its students if the institution does not receive fee for
service payments or payments for extended coverage.
[EFFECTIVE DATE.] This section is effective for gross
revenues received on or after January 1, 2002.
Sec. 4. Minnesota Statutes 2000, section 295.50,
subdivision 15, is amended to read:
Subd. 15. [LEGEND DRUG.] "Legend drug" means a legend drug
as defined in section 151.01, subdivision 17 that is required by
federal law to bear one of the following statements: "Caution:
Federal law prohibits dispensing without prescription" or "Rx
only".
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2000, section 295.52,
subdivision 4, is amended to read:
Subd. 4. [USE TAX; PRESCRIPTION DRUGS.] (a) A person that
receives prescription drugs for resale or use in Minnesota,
other than from a wholesale drug distributor that paid the is
subject to tax under subdivision 3, is subject to a tax equal to
the price paid to the wholesale drug distributor multiplied by
the tax percentage specified in this section. Liability for the
tax is incurred when prescription drugs are received or
delivered in Minnesota by the person.
(b) A person that receives prescription drugs for use in
Minnesota from a nonresident pharmacy required to be registered
under section 151.19 is subject to a tax equal to the price paid
by the nonresident pharmacy to the wholesale drug distributor or
the price received by the nonresident pharmacy, whichever is
lower, multiplied by the tax percentage specified in this
section. Liability for the tax is incurred when prescription
drugs are received in Minnesota by the person.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2000, section 295.52,
subdivision 7, is amended to read:
Subd. 7. [TAX REDUCTION.] Notwithstanding subdivisions 1,
1a, 2, 3, and 4, the tax imposed under this section equals for
calendar years 1998, 1999, 2000, and 2001 to 2003, 1.5 percent
of the gross revenues received on or after January 1, 1998, and
before January 1, 2002 2004.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2000, section 295.57,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION OF OTHER CHAPTERS.] Unless
specifically provided otherwise by sections 295.50 to 295.59,
the enforcement, interest, and penalty provisions under chapter
294, appeal provisions in sections 289A.43 and 289A.65, criminal
penalties in section 289A.63, and refunds provisions in section
289A.50 chapter 289A, civil penalty provisions applicable to
withholding and sales taxes under section 289A.60, and
collection and rulemaking provisions under chapter 270, apply to
a liability for the taxes imposed under sections 295.50 to
295.59.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 8. Minnesota Statutes 2000, section 297I.05,
subdivision 5, is amended to read:
Subd. 5. [HEALTH MAINTENANCE ORGANIZATIONS, NONPROFIT
HEALTH SERVICE PLAN CORPORATIONS, AND COMMUNITY INTEGRATED
SERVICE NETWORKS.] (a) Health maintenance organizations,
community integrated service networks, and nonprofit health care
service plan corporations are exempt from the tax imposed under
this section for premiums received in calendar years 2001 and
2002 to 2003.
(b) For calendar years after 2002 2003, a tax is imposed on
health maintenance organizations, community integrated service
networks, and nonprofit health care service plan corporations.
The rate of tax is equal to one percent of gross premiums less
return premiums received in the calendar year.
(c) 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 tax as described in paragraph (a) is reflected in
the premium rate.
(d) The commissioner shall deposit all revenues, including
penalties and interest, collected under this chapter from health
maintenance organizations, community integrated service
networks, and nonprofit health service plan corporations in the
health care access fund. Refunds of overpayments of tax imposed
by this subdivision must be paid from the health care access
fund. There is annually appropriated from the health care
access fund to the commissioner the amount necessary to make any
refunds of the tax imposed under this subdivision.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 9. [REPEALER; FEDERAL RESERVE.]
Minnesota Statutes 2000, section 16A.76, is repealed.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 15
LOCAL DEVELOPMENT
Section 1. Minnesota Statutes 2000, section 276A.01,
subdivision 3, is amended to read:
Subd. 3. [COMMERCIAL-INDUSTRIAL PROPERTY.]
"Commercial-industrial property" means the following categories
of property, as defined in section 273.13, excluding that
portion of the property (i) that may, by law, constitute the tax
base for a tax increment pledged pursuant to section 469.042 or
469.162 or sections 469.174 to 469.178, certification of which
was requested prior to May 1, 1996, to the extent and while the
tax increment is so pledged; or (ii) that is exempt from
taxation under section 272.02:
(1) that portion of class 5 property consisting of unmined
iron ore and low-grade iron-bearing formations as defined in
section 273.14, tools, implements, and machinery, except the
portion of high voltage transmission lines, the value of which
is deducted from net tax capacity under section 273.425; and
(2) that portion of class 3 and class 5 property which is
either used or zoned for use for any commercial or industrial
purpose, except for such property which is, or, in the case of
property under construction, will when completed be used
exclusively for residential occupancy and the provision of
services to residential occupants thereof. Property must be
considered as used exclusively for residential occupancy only if
each of not less than 80 percent of its occupied residential
units is, or, in the case of property under construction, will
when completed be occupied under an oral or written agreement
for occupancy over a continuous period of not less than 30 days.
If the classification of property prescribed by section
273.13 is modified by legislative amendment, the references in
this subdivision are to the successor class or classes of
property, or portions thereof, that include the kinds of
property designated in this subdivision.
[EFFECTIVE DATE.] This section is effective retroactive to
July 1, 1997, for taxes levied in 1997, payable in 1998, and
subsequent years.
Sec. 2. Minnesota Statutes 2000, section 469.169, is
amended by adding a subdivision to read:
Subd. 15. [ADDITIONAL BORDER CITY ALLOCATIONS.] In
addition to tax reductions authorized in subdivisions 7 to 14,
the commissioner shall allocate $1,500,000 for tax reductions to
border city enterprise zones in cities located on the western
border of the state. The commissioner shall make allocations to
zones in cities on the western border on a per capita basis.
Allocations made under this subdivision may be used for tax
reductions as provided in section 469.171, or for other offsets
of taxes imposed on or remitted by businesses located in the
enterprise zone, but only if the municipality determines that
the granting of the tax reduction or offset is necessary in
order to retain a business within or attract a business to the
zone. Any portion of the allocation provided in this section
may alternatively be used for tax reductions under section
469.1732 or 469.1734. If, at the end of the biennium, the total
amount allowable under this section has not been expended, a
city that has expended its allocation may submit a request for
an additional allocation for qualifying reductions from the
amount remaining. If more than one city exceeds their
allocation and the additional qualifying amounts exceed the
balance remaining, the commissioner shall allocate the amount
remaining to each qualifying city in proportion to its request
for additional allocation. Limitations on allocations under
subdivision 7 do not apply to this allocation.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2000, section 469.174,
subdivision 3, is amended to read:
Subd. 3. [BONDS.] "Bonds" means any bonds, including
refunding bonds, notes, interim certificates,
debentures, interfund loans or advances, or other obligations
issued by an authority under section 469.178 or which were
issued in aid of a project under any other law, except revenue
bonds issued pursuant to sections 469.152 to 469.165, prior to
August 1, 1979.
[EFFECTIVE DATE.] This section is effective for loans and
advances made after July 31, 2001, and to districts with
requests for certification made after July 31, 1979. Interfund
loans and advances made before August 1, 2001, are ratified and
approved, subject to the following restrictions: (1) the
interest accrued or paid after July 31, 2001, may not exceed the
limit in this section and (2) if there is no resolution or other
document created contemporaneously with the making of the loan
or advance that specifies the principal amount of the loan or
advance, the principal amount of the loan or advance is limited
to a maximum amount equal to the largest negative cash balance
that existed at any time in the fund that received the
undocumented loan or advance. An authority or municipality may
modify the terms of an interfund loan or advance made before
August 1, 2001, to comply with any of the requirements of this
section as the authority or municipality deems appropriate.
Sec. 4. Minnesota Statutes 2000, 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, paved or
gravel parking lots, or other improvements similar structures
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, paved or gravel
parking lots, or other improvements similar structures unless 15
percent of the area of the parcel contains improvements
buildings, streets, utilities, paved or gravel parking lots, or
other similar structures.
(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
for which the request for certification is made after July 31,
2001.
Sec. 5. Minnesota Statutes 2000, section 469.174,
subdivision 10a, is amended to read:
Subd. 10a. [RENEWAL AND RENOVATION DISTRICT.] (a) "Renewal
and renovation 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:
(1)(i) parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, paved or
gravel parking lots, or other improvements similar structures;
(ii) 20 percent of the buildings are structurally substandard;
and (iii) 30 percent of the other buildings require substantial
renovation or clearance to remove existing conditions such as:
inadequate street layout, incompatible uses or land use
relationships, overcrowding of buildings on the land, excessive
dwelling unit density, obsolete buildings not suitable for
improvement or conversion, or other identified hazards to the
health, safety, and general well-being of the community; and
(2) the conditions described in clause (1) are reasonably
distributed throughout the geographic area of the district.
(b) For purposes of determining whether a building is
structurally substandard, whether parcels are occupied by
buildings, streets, utilities, paved or gravel parking lots, or
other improvements similar structures, or whether noncontiguous
areas qualify, the provisions of subdivision 10,
paragraphs (b), (c), (e), and (d) (f) apply.
[EFFECTIVE DATE.] This section is effective for districts
for which the requests for certification are made after June 30,
1997, except the provision requiring parcels to be occupied by
structures is effective for districts for which the request for
certification is made after July 31, 2001.
Sec. 6. Minnesota Statutes 2000, 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, 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 for districts
for which the request for certification is made after July 31,
2001.
Sec. 7. Minnesota Statutes 2000, section 469.175,
subdivision 1, is amended to read:
Subdivision 1. [TAX INCREMENT FINANCING PLAN.] (a) A tax
increment financing plan shall contain:
(1) a statement of objectives of an authority for the
improvement of a project;
(2) a statement as to the development program for the
project, including the property within the project, if any, that
the authority intends to acquire;
(3) a list of any development activities that the plan
proposes to take place within the project, for which contracts
have been entered into at the time of the preparation of the
plan, including the names of the parties to the contract, the
activity governed by the contract, the cost stated in the
contract, and the expected date of completion of that activity;
(4) identification or description of the type of any other
specific development reasonably expected to take place within
the project, and the date when the development is likely to
occur;
(5) estimates of the following:
(i) cost of the project, including administration expenses;
(ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public
costs;
(iv) the most recent net tax capacity of taxable real
property within the tax increment financing district and within
any subdistrict;
(v) the estimated captured net tax capacity of the tax
increment financing district at completion; and
(vi) the duration of the tax increment financing district's
and any subdistrict's existence;
(6) statements of the authority's alternate estimates of
the impact of tax increment financing on the net tax capacities
of all taxing jurisdictions in which the tax increment financing
district is located in whole or in part. For purposes of one
statement, the authority shall assume that the estimated
captured net tax capacity would be available to the taxing
jurisdictions without creation of the district, and for purposes
of the second statement, the authority shall assume that none of
the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the district or
subdistrict;
(7) identification and description of studies and analyses
used to make the determination set forth in subdivision 3,
clause (2); and
(8) identification of all parcels to be included in the
district or any subdistrict.
(b) For a housing district, redevelopment district, or a
hazardous substance subdistrict, the authority may elect in the
tax increment financing plan to provide for the identification
of a minimum market value in the plan, development agreement, or
assessment agreement, and provide that increment is first
received by the authority when (1) the market value of the
improvements as determined by the assessor reaches or exceeds
the minimum market value, or (2) four years has elapsed from the
date of certification of the original net tax capacity of the
taxable real property in the district or subdistrict by the
county auditor, whichever is earlier.
[EFFECTIVE DATE.] This section is effective for requests
for certification of tax increment financing districts received
after July 31, 2001.
Sec. 8. Minnesota Statutes 2000, section 469.175, is
amended by adding a subdivision to read:
Subd. 4a. [FILING PLAN WITH STATE.] (a) The authority must
file a copy of the tax increment financing plan and amendments
to the plan with the commissioner of revenue. The authority
must also file a copy of the development plan or the project
plan for the project area with the commissioner of revenue. The
commissioner of revenue shall provide a copy of a plan to the
state auditor upon request.
(b) Filing under this subdivision must be made within 60
days after the latest of:
(1) the filing of the request for certification of the
district;
(2) approval of the plan by the municipality; or
(3) adoption of the plan by the authority.
[EFFECTIVE DATE.] This section is effective for plans and
amendments approved after July 1, 2000.
Sec. 9. Minnesota Statutes 2000, section 469.175,
subdivision 6b, is amended to read:
Subd. 6b. [DURATION OF DISCLOSURE AND REPORTING
REQUIREMENTS.] The disclosure and reporting requirements imposed
by subdivisions 5, and 6, and 6a apply with respect to a tax
increment financing district beginning with the annual
disclosure and reports for the year in which the original net
tax capacity of the district was certified and ending with the
annual disclosure and reports for the year in which both of the
following events have occurred:
(1) decertification of the district; and
(2) expenditure or return to the county auditor of all
remaining revenues derived from tax increments paid by
properties in the district.
[EFFECTIVE DATE.] This section is effective for reports
filed after December 31, 2000.
Sec. 10. Minnesota Statutes 2000, 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 15 years after receipt by the authority of the
first increment for a renewal and renovation district,
(2) after 20 years after receipt by the authority of the
first increment for a soils condition district,
(3) after eight years after receipt by the authority of the
first increment for an economic development district,
(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.
(d) Receipt by a hazardous substance subdistrict of an
increment as a result of a reduction in original net tax
capacity under section 469.174, subdivision 7, paragraph (b),
does not constitute receipt of increment by the overlying
district for purpose of calculating the duration limit under
this section.
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification is made after July 31,
2001.
Sec. 11. Minnesota Statutes 2000, section 469.176,
subdivision 1e, is amended to read:
Subd. 1e. [DURATION LIMITS; HAZARDOUS SUBSTANCE
SUBDISTRICTS.] If a parcel of a district is part of a designated
hazardous substance site or a hazardous substance subdistrict,
tax increment may be paid to the authority from the parcel for
longer than the period otherwise provided by subdivisions 1 to
1f for the overlying district. The extended period for
collection of tax increment begins on the date of receipt of the
first tax increment from the parcel that is more than any tax
increment received from the parcel before the date of the
certification under section 469.174, subdivision 7, paragraph
(b), and received after the date of certification to the county
auditor described in section 469.174, subdivision 7, paragraph
(b). The extended period for collection of tax increment is the
lesser of: (1) 25 years from the date of commencement of the
extended period or 20 years if the authority elects under
section 469.175, subdivision 1, paragraph (b), to defer receipt
of the first increment; or (2) the period necessary to recover
the costs of removal actions or remedial actions specified in a
development response action plan.
[EFFECTIVE DATE.] This section is effective for requests
for certification of subdistricts made after July 31, 2001.
Sec. 12. Minnesota Statutes 2000, section 469.176, is
amended by adding a subdivision to read:
Subd. 1h. [APPROVAL FOR EARLY DECERTIFICATION.] The
authority must obtain approval from the commissioner of revenue
to decertify a preexisting district, as defined in section
469.1792, before the required decertification date under section
469.177, subdivision 12, if there are outstanding preexisting
obligations, as defined in section 469.1792, secured by
increments from another preexisting district in the
municipality. The commissioner may approve early
decertification only if the commissioner determines that early
decertification is unlikely to increase the municipality's
entitlement to a grant under section 469.1799.
Sec. 13. Minnesota Statutes 2000, section 469.176,
subdivision 3, is amended to read:
Subd. 3. [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For
districts for which certification was requested before August 1,
1979, or after June 30, 1982, and before August 1, 2001, no tax
increment shall be used to pay any administrative expenses for a
project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment financing plan or
the total tax increment expenditures for the project, whichever
is less.
(b) For districts for which certification was requested
after July 31, 1979, and before July 1, 1982, no tax increment
shall be used to pay administrative expenses, as defined in
Minnesota Statutes 1980, section 273.73, for a project district
which exceeds five percent of the total tax increment
expenditures authorized by the tax increment financing plan or
the total tax increment expenditures for the project district,
whichever is less.
(c) For districts for which certification was requested
after July 31, 2001, no tax increment may be used to pay any
administrative expenses for a project which exceed ten percent
of total tax increment expenditures authorized by the tax
increment financing plan or the total tax increments from the
district, whichever is less.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to all districts
regardless of when the request for certification was made.
Sec. 14. Minnesota Statutes 2000, section 469.176,
subdivision 4g, is amended to read:
Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a) These
revenues shall Tax increments may not be used to circumvent
existing levy limit law.
(b) No revenues derived from tax increment from any
district, whether certified before or after August 1, 1979,
shall may be used for the acquisition, construction, renovation,
operation, or maintenance of a building to be used primarily and
regularly for conducting the business of a municipality, county,
school district, or any other local unit of government or the
state or federal government or for a commons area used as a
public park, or a facility used for social, recreational, or
conference purposes. This provision shall does not prohibit the
use of revenues derived from tax increments for the construction
or renovation of a parking structure or of a privately owned
facility for conference purposes.
(b) If any publicly owned facility used for social,
recreational, or conference purposes and financed in whole or in
part from revenues derived from a district is operated or
managed by an entity other than the authority, the operating and
management policies of the facility must be approved by the
governing body of the authority.
(c)(1) Tax increments may not be used to pay for the cost
of public improvements, equipment, or other items, if:
(i) the improvements, equipment, or other items are located
outside of the area of the tax increment financing district from
which the increments were collected; and
(ii) the improvements, equipment, or items that (A)
primarily serve a decorative or aesthetic purpose, or (B) serve
a functional purpose, but their cost is increased by more than
100 percent as a result of the selection of materials, design,
or type as compared with more commonly used materials, designs,
or types for similar improvements, equipment, or items.
(2) The provisions of this paragraph do not apply to
expenditures related to the rehabilitation of historic
structures that are:
(i) individually listed on the National Register of
Historic Places; or
(ii) a contributing element to a historic district listed
on the National Register of Historic Places.
[EFFECTIVE DATE.] This section is effective for
expenditures of increment made after July 31, 2001.
Sec. 15. Minnesota Statutes 2000, section 469.176, is
amended by adding a subdivision to read:
Subd. 41. [PROHIBITED FACILITIES.] (a) No tax increment
from any district may be used for:
(1) a commons area used as a public park; or
(2) a facility used for social, recreational, or conference
purposes.
(b) This subdivision does not apply to a privately owned
facility for conference purposes or a parking structure.
[EFFECTIVE DATE.] This section applies to all tax increment
financing districts, regardless of when the request for
certification was made, and is effective for expenditures of
increment made after June 30, 2001, but does not apply to (1)
expenditures made before January 1, 2000; (2) expenditures made
under a binding contract entered before January 1, 2000; or (3)
expenditures made under a binding contract entered pursuant to a
letter of intent with the developer or contractor or its assigns
if the letter of intent was entered before January 1, 2000.
Sec. 16. Minnesota Statutes 2000, section 469.1763,
subdivision 6, is amended to read:
Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This
subdivision applies only to districts for which the request for
certification was made before June 2, 1997 August 1, 2001, and
without regard to whether the request for certification was made
prior to August 1, 1979.
(b) The municipality for the district may transfer
available increments from another tax increment financing
district located in the municipality, if the transfer is
necessary to eliminate a deficit in the district to which the
increments are transferred. A deficit in the district for
purposes of this subdivision means the lesser of the following
two amounts:
(1)(i) the amount due during the calendar year to pay
preexisting obligations of the district; minus
(ii) the total increments to be collected from properties
located within the district that are available for the calendar
year; plus
(iii) total increments from properties located in other
districts in the municipality that are available to be used to
meet the district's obligations under this section, excluding
this subdivision, or other provisions of law (but excluding a
special tax under section 469.1791 and the grant program under
Laws 1997, chapter 231, article 1, section 19, or this act); or
(2) the reduction in increments collected from properties
located in the district for the calendar year as a result of the
changes in class rates in Laws 1997, chapter 231, article 1;
Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243,
and this act, or the elimination of the general education tax
levy under this act.
(c) A preexisting obligation means:
(1) bonds issued and sold before June 2, 1997 August 1,
2001, or bonds issued pursuant to a binding contract requiring
the issuance of bonds entered into before July 1, 2001, and
bonds issued to refund such bonds or to reimburse expenditures
made in conjunction with a signed contractual agreement entered
into before June 2, 1997 August 1, 2001, to the extent that the
bonds are secured by a pledge of increments from the tax
increment financing district. For purposes of this subdivision,
bonds exclude an obligation to reimburse or pay a developer or
owner of property located in the district for amounts incurred
or paid by the developer or owner; and
(2) binding contracts entered into before August 1, 2001,
to the extent that the contracts require payments secured by a
pledge of increments from the tax increment financing district.
(d) The municipality may require a development authority,
other than a seaway port authority, to transfer available
increments for any of its tax increment financing districts in
the municipality to make up an insufficiency in another district
in the municipality, regardless of whether the district was
established by the development authority or another development
authority. This authority applies notwithstanding any law to
the contrary, but applies only to a development authority that:
(1) was established by the municipality; or
(2) the governing body of which is appointed, in whole or
part, by the municipality or an officer of the municipality or
which consists, in whole or part, of members of the governing
body of the municipality. The municipality may use this
authority only after it has first used all available increments
of the receiving development authority to eliminate the
insufficiency and exercised any permitted action under section
469.1792, subdivision 3, for preexisting districts of the
receiving development authority to eliminate the insufficiency.
(e) The authority under this subdivision to spend tax
increments outside of the area of the district from which the
tax increments were collected:
(1) may only be exercised after obtaining approval of the
use of the increments, in writing, by the commissioner of
revenue;
(2) is an exception to the restrictions under section
469.176, subdivision 4i, and the other provisions of this
section, and the percentage restrictions under subdivision 2
must be calculated after deducting increments spent under this
subdivision from the total increments for the district; and
(3) applies notwithstanding the provisions of the Tax
Increment Financing Act in effect for districts for which the
request for certification was made before June 30, 1982, or any
other law to the contrary.
(f) If a preexisting obligation requires the development
authority to pay an amount that is limited to the increment from
the district or a specific development within the district and
if the obligation requires paying a higher amount to the extent
that increments are available, the municipality may determine
that the amount due under the preexisting obligation equals the
higher amount and may authorize the transfer of increments under
this subdivision to pay up to the higher amount. The authority
to transfer increments under this paragraph may only be used to
the extent that the payment of all other preexisting obligations
in the municipality due during the calendar year have been
satisfied.
[EFFECTIVE DATE.] This section is effective January 2,
2002, and thereafter.
Sec. 17. Minnesota Statutes 2000, 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) 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.
(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 improvements are made to tax exempt
property after certification of the district and before the
parcel becomes taxable, the assessor shall, at the request of
the authority, separately assess the estimated market value of
the improvements. If the property becomes taxable, the county
auditor shall add to original net tax capacity, the net tax
capacity of the parcel, excluding the separately assessed
improvements. 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.
(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.
(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.
(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 parcels
that become taxable after July 31, 2001, and applies to tax
increment financing districts, regardless of when the request
for certification was made.
Sec. 18. Minnesota Statutes 2000, section 469.177, is
amended by adding a subdivision to read:
Subd. 1b. [STATE TAX AND INCREMENT COMPUTATION.] The
original local tax rate and any other tax rate or amount used to
calculate the amount of tax increment does not include any rate
or amount attributable to a state levy, whether the state levy
is imposed by section 275.02 or another provision of law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment for all tax increment financing
districts and all geographic expansions of all tax increment
financing districts, regardless of the date of the request for
certification.
Sec. 19. Minnesota Statutes 2000, section 469.177,
subdivision 11, is amended to read:
Subd. 11. [DEDUCTION FOR ENFORCEMENT COSTS;
APPROPRIATION.] (a) The county treasurer shall deduct an amount
equal to 0.25 percent of any increment distributed to an
authority or municipality. The county treasurer shall pay the
amount deducted to the state treasurer for deposit in the state
general fund.
(b) The amounts deducted and paid under paragraph (a) are
appropriated to the state auditor for the cost of (1) the
financial reporting of tax increment financing information and
(2) the cost of examining and auditing of authorities' use of
tax increment financing as provided under section 469.1771,
subdivision 1. Notwithstanding section 16A.28 or any other law
to the contrary, this appropriation does not cancel and remains
available until spent.
(c) For taxes payable in 2002 and thereafter, the
commissioner of revenue shall increase the percent in paragraph
(a) to a percent equal to the product of the percent in
paragraph (a) and the amount that the statewide tax increment
levy for taxes payable in 2002 would have been without the class
rate changes in this act and the elimination of the general
education levy in this act divided by the statewide tax
increment levy for taxes payable in 2002.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 20. Minnesota Statutes 2000, 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 469.179 469.1798, 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 469.179 469.1798 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 469.179 469.1798 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 applies to violations
occurring after July 1, 2001.
Sec. 21. Minnesota Statutes 2000, section 469.178, is
amended by adding a subdivision to read:
Subd. 7. [INTERFUND LOANS.] The authority or municipality
may advance or loan money to finance expenditures under section
469.176, subdivision 4, from its general fund or any other fund
under which it has legal authority to do so. The loan or
advance must be approved, by resolution of the governing body,
before money is transferred, advanced, or spent, whichever is
earliest. The terms and conditions for repayment of the loan
must be provided in writing and include, at a minimum, the
principal amount, the interest rate, and maximum term. The
maximum rate of interest permitted to be charged is limited to
the greater of the rates specified under section 270.75 or
549.09.
[EFFECTIVE DATE.] This section is effective for loans and
advances made after July 31, 2001, and to districts with
requests for certification made after July 31, 1979. Interfund
loans and advances made before August 1, 2001, are ratified and
approved, subject to the following restrictions: (1) the
interest accrued or paid after July 31, 2001, may not exceed the
limit in this section and (2) if there is no resolution or other
document created contemporaneously with the making of the loan
or advance that specifies the principal amount of the loan or
advance, the principal amount of the loan or advance is limited
to a maximum amount equal to the largest negative cash balance
that existed at any time in the fund that received the
undocumented loan or advance. An authority or municipality may
modify the terms of an interfund loan or advance made before
August 1, 2001, to comply with any of the requirements of this
section as the authority or municipality deems appropriate.
Sec. 22. [469.1792] [SPECIAL DEFICIT AUTHORITY.]
Subdivision 1. [SCOPE.] This section applies only to an
authority with a preexisting district for which:
(1)(i) the increments from the district were insufficient
to pay preexisting obligations as a result of the class rate
changes or the elimination of the state-determined general
education property tax levy under this act, or both; or
(ii) the development authority has a binding contract with
a person requiring the authority to pay to the person an amount
that may not exceed the increment from the district or a
specific development within the district and as a result of the
reduction in increment because of the class rate changes or the
elimination of the state-determined general education property
tax levy under this act, or both, the authority is unable to pay
the full amount under the contract from the pledged increments
or other increments from the district; and
(2) the municipality exercised its full authority to pool
under section 469.1763, subdivision 6, and the transfer of
increments did not eliminate the insufficiency under clause (1),
item (i), or the inability to pay the full amount under clause
(1), item (ii).
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Preexisting district" means a tax increment financing
district for which the request for certification was made before
August 1, 2001.
(c) "Preexisting obligation" means a bond or binding
contract that:
(1) was issued or approved before August 1, 2001, or was
issued pursuant to a binding contract entered into before August
1, 2001;
(2) is secured by increments from a preexisting district.
Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a
district qualifying under this section may take either or both
of the following actions for any or all of its preexisting
districts:
(1) the authority may elect that the original local tax
rate under section 469.177, subdivision 1a, does not apply to
the district; and
(2) the authority may elect the fiscal disparities
contribution will be computed under section 469.177, subdivision
3, paragraph (a), regardless of the election that was made for
the district.
(b) The authority may take action under this subdivision
only after the municipality approves the action, by resolution,
after notice and public hearing in the manner provided under
section 469.175, subdivision 2.
[EFFECTIVE DATE.] This section is effective for all
districts for which the request for certification was made after
July 31, 1979.
Sec. 23. [469.1793] [DEVELOPER OBLIGATIONS CONTINUED.]
If a developer or other private entity agreed to make
payments to the authority or municipality to reimburse the
municipality for the state aid offset under Minnesota Statutes
2000, section 273.1399, the obligation continues in effect,
notwithstanding the repeal of section 273.1399. Payments
received by the development authority are increments for
purposes of the state grant program under section 469.1799.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to all districts for which
certification was requested after April 30, 1990.
Sec. 24. [469.1799] [TIF GRANTS; APPROPRIATIONS.]
Subdivision 1. [TIF GRANTS.] (a) In calendar year 2003 and
thereafter, the commissioner of revenue shall pay grants to
municipalities for deficits in tax increment financing districts
caused by the changes in class rates and the elimination of the
state-determined general education property tax levy under this
act. Municipalities must submit applications for the grants in
a form prescribed by the commissioner no later than August 1 for
grants payable during the calendar year. The maximum grant
equals the lesser of:
(1) for taxes payable in the year before the grant is paid,
the reduction in the tax increment financing district's revenues
derived from increment resulting from the class rate changes and
the elimination of the state-determined general education
property tax levy under this act; or
(2) the amount due during the calendar year to pay:
(i) a preexisting obligation as defined in Minnesota
Statutes, section 469.1763, subdivision 6, but excluding the
additional amount of a preexisting obligation that the
municipality elects to include under paragraph (f) of that
subdivision with respect to a preexisting obligation to a
developer or property owner in the district or an assignee or
successor in interest; less
(ii) the municipality's total tax increments, including
unspent increments from previous years;
(iii) the amount of any state aid reductions that would
have applied to any district in the municipality for the
calendar year, if Minnesota Statutes 2000, section 273.1399, had
not been repealed; and
(iv) the amount of any unpaid local contributions that the
municipality would have been required to make for the calendar
year under an election under Minnesota Statutes 2000, section
273.1399, subdivision 6, if that subdivision had not been
repealed.
(b) The commissioner of revenue may require applicants for
grants under this section to provide any information the
commissioner deems appropriate. The commissioner shall
calculate the amount under paragraph (a), clause (2), based on
the reports for the tax increment financing district or
districts filed with the state auditor on or before August 1 of
the year in which the grant is to be paid.
(c) This subdivision applies only to deficits in tax
increment districts for which:
(1) the request for certification of the district, or a
district transferred under special law, was made before August
1, 2001;
(2) all timely reports have been filed with the state
auditor, as required by Minnesota Statutes, section 469.175; and
(3) the authority and municipality have exercised any
permitted action under Minnesota Statutes, section 469.1792,
subdivision 3, to increase increments to pay preexisting
obligations as defined under this section.
(d) The commissioner shall pay the grants under this
section by December 26 of the year.
(e) For the purposes of this section, "tax increments" and
"revenues derived from tax increments" have the meanings given
in Minnesota Statutes, section 469.174, subdivision 25, except
that the definition applies to all tax increment 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. For purposes of this section, "bonds" and
"binding contracts" do not include interfund loans.
(f) If the district was authorized or certified pursuant to
a special law and the special law permitted original tax
capacity to be reduced to zero, the required dates under
paragraph (a), clause (2), and paragraph (c), clause (1), are
extended to December 31, 2001.
Subd. 2. [SCHOOL DISTRICT ABATEMENT LEVY AUTHORITY.] A
school district that adopted an abatement resolution under
Minnesota Statutes, sections 469.1812 to 469.1815, prior to
August 1, 2001, pursuant to which all or a portion of its
general education levy on a parcel was to be abated for taxes
payable in 2002 or later years and pledged to the payment of
bonds issued, or binding contracts entered into, prior to August
1, 2001, may annually levy an amount equal to the lesser of:
(1) the amount specified for these purposes in the resolution
for the taxes payable year; or (2) the amount of the general
education tax levied on the property for which the abatements
were granted for taxes payable in 2001. The levy authority in
this subdivision is in addition to any other levy of the
district, but this authority expires and may not be used for
taxes payable in the year following the termination or
expiration of the abatements under the resolution, without
giving any effect to an extension or modification of the
resolution made after August 1, 2001.
Subd. 3. [APPROPRIATION.] $91,000,000 in fiscal year 2002,
and $38,000,000 in each fiscal year thereafter is appropriated
to the commissioner of revenue from the general fund to make
grants under this section. The appropriated amounts do not
lapse at the end of a fiscal year. Each amount is available
until the later of when expended or when this section is
repealed. If the amount of grant entitlements under subdivision
1 for a year exceeds the amount available for grants, the
commissioner of revenue shall reduce each grant proportionately
so the total does not exceed the amount available.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 25. Minnesota Statutes 2000, section 469.1812,
subdivision 2, is amended to read:
Subd. 2. [GOVERNING BODY.] "Governing body" means, for a
city, the city council; for a school district, the school board;
for a county, the county board; and for a town, the annual
meeting of the town board of supervisors.
[EFFECTIVE DATE.] This section is effective retroactive to
May 26, 1999.
Sec. 26. Minnesota Statutes 2000, 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 by the requesting
political subdivision and any other participating political
subdivision 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 abatements
approved after the day following final enactment.
Sec. 27. Minnesota Statutes 2000, section 469.1814, is
amended by adding a subdivision to read:
Subd. 6. [LEVY TO OFFSET TAX CHANGES.] (a) This
subdivision applies only to abatements pledged to pay
preexisting obligations.
(b) For purposes of this subdivision, "preexisting
obligation" means a bond or binding contract that:
(1) was issued or approved before August 1, 2001;
(2) is secured by abatements approved before August 1,
2001; and
(3) is not a general obligation.
(c) If a political subdivision granted an abatement pledged
to pay a preexisting obligation and if the changes in the
property tax class rates enacted in calendar year 2001 reduce
the abatement by an amount sufficient to prevent payment in full
of the preexisting obligation, the political subdivision may add
to its levy under section 469.1815 an amount sufficient to
provide an abatement equal to the least of:
(1) the amount of the abatement using the political
subdivision's tax rate for the current year and the class rates
for property taxes payable in 2001;
(2) the amount required to pay the amount due on the
preexisting obligation for the year from the political
subdivision; or
(3) the maximum dollar amount of the political
subdivision's abatement, if any, under the abatement resolution.
[EFFECTIVE DATE.] This section is effective for abatement
levies payable beginning in 2002.
Sec. 28. Minnesota Statutes 2000, section 475.58,
subdivision 1, as amended by Laws 2001, chapter 214, section 43,
is amended to read:
Subdivision 1. [APPROVAL BY ELECTORS; EXCEPTIONS.]
Obligations authorized by law or charter may be issued by any
municipality upon obtaining the approval of a majority of the
electors voting on the question of issuing the obligations, but
an election shall not be required to authorize obligations
issued:
(1) to pay any unpaid judgment against the municipality;
(2) for refunding obligations;
(3) for an improvement or improvement program, which
obligation is payable wholly or partly from the proceeds of
special assessments levied upon property specially benefited by
the improvement or by an improvement within the improvement
program, or of taxes levied upon the increased value of property
within a district for the development of which the improvement
is undertaken, including obligations which are the general
obligations of the municipality, if the municipality is entitled
to reimbursement in whole or in part from the proceeds of such
special assessments or taxes and not less than 20 percent of the
cost of the improvement or the improvement program is to be
assessed against benefited property or is to be paid from the
proceeds of federal grant funds or a combination thereof, or is
estimated to be received from such taxes within the district;
(4) payable wholly from the income of revenue producing
conveniences;
(5) under the provisions of a home rule charter which
permits the issuance of obligations of the municipality without
election;
(6) under the provisions of a law which permits the
issuance of obligations of a municipality without an election;
(7) to fund pension or retirement fund liabilities pursuant
to section 475.52, subdivision 6;
(8) under a capital improvement plan under section 373.40;
and
(9) under sections 469.1813 to 469.1815 (property tax
abatement authority bonds), if the proceeds of the bonds are not
used for a purpose prohibited under section 469.176, subdivision
4g, paragraph (b).
[EFFECTIVE DATE.] This section is effective for bonds
issued or sold after the day following final enactment.
Sec. 29. Laws 1997, chapter 231, article 1, section 19,
subdivision 3, as amended by Laws 1999, chapter 243, article 10,
section 17, is amended to read:
Subd. 3. [EXPIRATION.] This section expires on January 1,
2002 2003.
Sec. 30. Laws 1997, chapter 231, article 1, section 22, is
amended to read:
Sec. 22. [EFFECTIVE DATES.]
Sections 1, 2, 5, 6, 7, 8, 9, 11, 12, 13, 14, 17, and 21,
paragraph (a), are effective for taxes levied in 1997, payable
in 1998 and subsequent years, except that the low-income housing
provisions in class 4c and 4d are effective for taxes payable in
1999 and thereafter and the provisions in sections 6 and 8
relating to class 1c and 4c seasonal residential property that
specify percentages of lodging receipts and bookings of at least
two consecutive nights are effective for taxes payable in 1999
and thereafter.
Sections 4, 15, and 21, paragraph (b), are effective for
taxes payable in 1999 and subsequent years.
Sections 3 and 20 are effective July 1, 1997.
Section 19 is effective for taxes payable in 1998, 1999,
and 2000, and 2001.
Sec. 31. Laws 2000, chapter 490, article 11, section 26,
the effective date, is amended to read:
EFFECTIVE DATE: This section is effective for increments
spent after July 1, 2000, from districts for which certification
was requested after May 1, 1990 June 30, 1982.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 32. [HOLLMAN DECREE HOUSING.]
To implement a federal court order or decree relating to
the provision of low-rent public housing finance, in whole or in
part, with federal financial assistance under section 5 of the
United States Housing Act, or any successor legislation, the
Minneapolis public housing authority or the metropolitan
council, acting under the powers of Minnesota Statutes, sections
469.001 to 469.047, may enter a cooperation agreement with the
governing body of any municipality or county within the
metropolitan area, as defined in Minnesota Statutes, section
473.121, subdivision 2, to provide exemption from all real and
personal taxes levied or imposed by the state, city, county, or
other political subdivision, for which the Minneapolis public
housing authority or the metropolitan council shall make, or
cause to be made, payments in lieu of taxes as provided under
Minnesota Statutes, section 469.040. This exemption and
obligation to make payments in lieu of taxes continues until the
housing is no longer subject to the provisions of section 5 of
the United States Housing Act, or any successor legislation.
[EFFECTIVE DATE.] This section is effective with respect to
any cooperation agreement entered into on or after November 1,
1997. Any owner of low-rent public housing acquired and
renovated or constructed under a cooperation agreement under
this section may apply for abatement of the real or personal
property taxes under Minnesota Statutes, section 375.192,
notwithstanding the time limitation for filing application under
section 375.192. This section applies in counties of Anoka,
Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 33. [CITY OF LUVERNE.]
Subdivision 1. [AUTHORIZATION.] The governing body of the
city of Luverne may designate between one and three areas of the
city as border city development zones. The total area of the
zones may not exceed 100 acres.
Subd. 2. [APPLICATION OF GENERAL LAW.] (a) The provisions
of Minnesota Statutes, sections 469.1731 to 469.1735, apply to
the border city development zones designated under this section.
The governing body of the city may exercise the powers granted
under Minnesota Statutes, sections 469.1731 to 469.1735,
including powers that apply outside of the zones.
(b) The allocation under subdivision 3 for purposes of
Minnesota Statutes, section 469.1735, subdivision 2, and the
necessary amount of the allocation is appropriated to the
commissioner of revenue.
Subd. 3. [ALLOCATION OF STATE TAX REDUCTIONS.] (a) The
cumulative total amount of tax reductions for all years of the
program under Minnesota Statutes, sections 469.1731 to 469.1735,
is limited to $175,000.
(b) This allocation may be used for tax reductions provided
in Minnesota Statutes, section 469.1732 or 469.1734, or for
reimbursements under Minnesota Statutes, section 469.1735,
subdivision 3, but only if the governing body of the city of
Luverne determines that the tax reduction or offset is necessary
to enable a business to expand within a city or to attract a
business to the city.
(c) The commissioner of revenue may waive the limit under
this subdivision using the same rules and standards provided in
Minnesota Statutes, section 469.169, subdivision 12, paragraph
(b).
Subd. 4. [EFFECTIVE DATE.] This section is effective upon
compliance by the governing body of the city of Luverne with the
requirements of Minnesota Statutes, section 645.021.
Sec. 34. [AURORA; TAX INCREMENT DISTRICT EXTENSION.]
Subdivision 1. [DISTRICT EXTENSION.] Notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
1c, upon approval of the governing body of the city of Aurora by
resolution, the housing and redevelopment authority in and for
the city of Aurora may extend to December 31, 2009, the duration
of its downtown tax increment financing district originally
certified in 1978.
Subd. 2. [SPECIAL RULES.] Increments permitted to be paid
to and retained by the authority by subdivision 1 may only be
used to:
(1) pay or defease bonds or other contractual obligations;
(2) fund public redevelopment costs within the
redevelopment project or costs provided for in the tax increment
financing plan; or
(3) pay or defease bonds issued to refund the bonds.
[EFFECTIVE DATE.] This section is effective the day after
compliance with Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021, subdivision 2.
Sec. 35. [GAYLORD; TIF DISTRICT EXTENSION.]
Notwithstanding the provisions of Minnesota Statutes,
section 469.176, subdivision 1c, or any other law, the city of
Gaylord may, by resolution, extend the duration of a tax
increment financing district originally certified in 1978. If
the city extends the district, the district is deemed to
continue to be in effect, beginning for taxes payable in 2002,
and notwithstanding the decertification of the district for
taxes payable in 2001. The city may not extend the duration
beyond December 31, 2008. Notwithstanding the provisions of
Minnesota Statutes, section 469.176, subdivision 1c, the city
may spend increments from the district on project costs other
than bonds issued before April 1, 1990.
[EFFECTIVE DATE.] This section is effective upon completion
with the requirements of Minnesota Statutes, sections 469.1782
and 645.021.
Sec. 36. [CITY OF NORTH ST. PAUL; TIF GRANT.]
Notwithstanding Laws 1997, chapter 231, article 1, sections
19 and 22, as amended by Laws 1997, First Special Session
chapter 5, section 36, Laws 1999, chapter 243, article 10,
sections 16, 17, 27, and 28, and Laws 2000, chapter 490, article
11, section 36, the commissioner of revenue shall pay to the
city of North St. Paul the amount of $12,800 as a tax increment
financing grant provided for under those laws. This amount
compensates the city for the aggregate amount of the calendar
year 1999 deficits in the tax increment financing districts
within the city, as determined under the laws cited in this
section using the accrual method of accounting. The amount
authorized to be paid under this section for the calendar year
1999 tax increment financing deficits may not also be paid under
any other provision of law. The commissioner shall pay the
amount authorized under this section to the city by warrant
issued on or before 60 days after the enactment of this
section. The warrant must be drawn on the state treasury from
the appropriations made in Laws 1997, chapter 231, article 1,
section 19, and Laws 1999, chapter 243, article 10, section 27.
[EFFECTIVE DATE.] This section is effective the day
following final enactment without local approval.
Sec. 37. [CITY OF PARK RAPIDS; EXTENSION OF TIME FOR
ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.]
The requirement in Minnesota Statutes, section 469.1763,
subdivision 3, that activities must be undertaken within a
five-year period from the date of certification of a tax
increment financing district must be considered to be met in the
case of redevelopment district No. 4 in the city of Park Rapids
if the activities are undertaken within six years from the date
of certification of the district.
[EFFECTIVE DATE.] This section is effective upon approval
by the governing body of the city of Park Rapids and compliance
with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 38. [EXTENSION OF LOCAL APPROVAL AUTHORITY.]
Notwithstanding the provisions of Minnesota Statutes,
section 645.021, subdivision 3, the period of time to approve
Laws 1998, chapter 389, article 11, section 19, and comply with
Minnesota Statutes, sections 645.021, subdivision 2, and
469.1782, subdivision 2, is extended through January 2, 2003.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 39. [WASHBURN CROSBY PROJECT; GRANT PROCEDURES.]
(a) The city of Minneapolis may apply to the commissioner
of revenue for a grant under Minnesota Statutes, section
469.1799, for a tax increment financing project that meets all
of the following requirements:
(1) the project is located in a tax increment financing
district the request for certification of which was made before
July 1, 2001;
(2) a public-private cooperation agreement provides for
development of a national historic landmark located in the tax
increment financing district; and
(3) the development has obtained public funding from both
the state of Minnesota and the National Park Service.
(b) In calculating the amount of the grant under this
section, the commissioner of revenue shall consider only the
increment that is available from the district. No requirement
to pool increments under Minnesota Statutes, section 469.1763,
subdivision 6, or to exercise the powers under Minnesota
Statutes, section 469.1792, subdivision 3, applies to the
grant. Increment from the district shall not be considered in
calculating entitlements to grants under Minnesota Statutes,
section 469.1799, for the preexisting obligations of any other
district in the city of Minneapolis. A binding contract to
issue bonds qualifies as a preexisting obligation if it is
entered into by August 1, 2001.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 40. [ST. LOUIS PARK; GRANT COMPUTATION.]
For a district subject to Laws 1996, chapter 464, article
1, section 11, the maximum grant under Minnesota Statutes,
section 469.1799, is determined as if the district would have
been subject to the local contribution requirement of Minnesota
Statutes 2000, section 273.1399, subdivision 6, instead of the
state aid reduction provisions of Minnesota Statutes 2000,
section 273.1399.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 41. [REPEALER.]
Minnesota Statutes 2000, sections 273.1399, and 469.1782,
subdivision 1, are repealed.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
ARTICLE 16
LEVY LIMITS
Section 1. Minnesota Statutes 2000, section 275.16, is
amended to read:
275.16 [COUNTY AUDITOR TO FIX AMOUNT OF LEVY.]
If any such municipality shall return to the county auditor
a levy greater than permitted by chapters 123A, 123B, 126C,
136C, and 136D and, sections 275.124 to 275.16, and 275.70 to
275.74, such county auditor shall extend only such amount of
taxes as the limitations herein prescribed will permit;
provided, if such levy shall include any levy for the payment of
bonded indebtedness or judgments, such levies for bonded
indebtedness or judgments shall be extended in full, and the
remainder of the levies shall be reduced so that the total
thereof, including levies for bonds and judgments, shall not
exceed such amount as the limitations herein prescribed will
permit.
Sec. 2. Minnesota Statutes 2000, section 275.70, is
amended by adding a subdivision to read:
Subdivision 1. [APPLICATION.] For the purposes of sections
275.70 to 275.74, the following terms have the meanings given
them, unless provided otherwise.
Sec. 3. Minnesota Statutes 2000, section 275.70, is
amended by adding a subdivision to read:
Subd. 2. [IMPLICIT PRICE DEFLATOR.] "Implicit price
deflator" means the implicit price deflator for government
consumption expenditures and gross investment for state and
local governments prepared by the bureau of economic analysis of
the United States Department of Commerce for the 12-month period
ending March 31 of the levy year.
Sec. 4. Minnesota Statutes 2000, section 275.70, is
amended by adding a subdivision to read:
Subd. 3. [LOCAL GOVERNMENTAL UNIT.] "Local governmental
unit" means a county, or a statutory or home rule charter city
with a population greater than 2,500.
Sec. 5. Minnesota Statutes 2000, section 275.70, is
amended by adding a subdivision to read:
Subd. 4. [POPULATION; NUMBER OF HOUSEHOLDS.] "Population"
or "number of households" means the population or number of
households for the local governmental unit as established by the
last federal census, by a census taken under section 275.14, or
by an estimate made by the metropolitan council or by the state
demographer under section 4A.02, whichever is most recent as to
the stated date of the count or estimate up to and including
June 1 of the current levy year.
Sec. 6. Minnesota Statutes 2000, 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) (6) 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 2001, or (ii) it is a new matching
requirement that didn't exist prior to 1998 2002;
(9) (7) 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) (8) 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) (9) to pay an abatement under section 469.1815;
(13) (10) 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 any costs
attributable to increases in the employer contribution rates
under chapter 353 that are effective after June 30, 2001;
(14) (11) 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;
(15) (12) to pay for operation of a lake improvement
district, as authorized under section 103B.555. 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
(16) (13) 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.;
(14) for counties only, to pay the costs reasonably
expected to be incurred in 2002 related to the redistricting of
election districts and establishment of election precincts under
sections 204B.135 and 204B.14, the notice required by section
204B.14, subdivision 4, and the reassignment of voters in the
statewide registration system, not to exceed $1 per capita,
provided that the county shall distribute a portion of the
amount levied under this clause equal to 25 cents times the
population of the city to all cities in the county with a
population of 30,000 or more; and
(15) to pay for court administration costs as required
under section 273.1398, subdivision 4b; however, for taxes
levied to pay for these costs in the year in which the court
financing is transferred to the state, the amount under this
section is limited to one-third of the aid reduction under
section 273.1398, subdivision 4a.
Sec. 7. [275.71] [LEVY LIMITS.]
Subdivision 1. [LIMIT ON LEVIES.] Notwithstanding any
other provision of law or municipal charter to the contrary
which authorize ad valorem taxes in excess of the limits
established by sections 275.70 to 275.74, the provisions of this
section apply to local governmental units for all purposes other
than those for which special levies and special assessments are
made.
Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a
local governmental unit for taxes levied in 2001 is equal to the
greater of:
(1) the sum of its adjusted levy limit base for taxes
levied in 1999 plus the amount it levied in 1999 under Minnesota
Statutes 1999 Supplement, section 275.70, subdivision 5, clauses
(8), and (13), multiplied by:
(i) one plus the percentage growth in the implicit price
deflator for the 12-month period ending March 30, 2000;
(ii) one plus a percentage equal to the annual percentage
increase in the estimated number of households, if any, for the
most recent 12-month period that was available on July 1, 2000;
and
(iii) one plus a percentage equal to 50 percent of the
percentage increase in the taxable market value of the
jurisdiction due to new construction of class 3 property, as
defined in section 273.13, subdivision 24, except for
state-assessed utility and railroad operating property, for the
most recent year for which data was available as of July 1,
2000; or
(2) an amount equal to:
(i) the sum of the amount it levied in 2000 plus the amount
of aids it was certified to receive in calendar year 2001 under
sections 273.1398, 298.282, 477A.011 to 477A.03, prior to any
aid reductions under section 273.1399, subdivision 5, 477A.06,
and 477A.065; less
(ii) the amount it levied in 2000 that would qualify as
special levies under section 275.70, subdivision 6, for taxes
levied in 2001. The local governmental unit shall provide the
commissioner of revenue with sufficient information to make this
calculation.
(b) If the governmental unit was not subject to levy limits
for taxes levied in 1999, its levy limit base for taxes levied
in 2001 is equal to the amount calculated under paragraph (a),
clause (2).
(c) The levy limit base for a local governmental unit for
taxes levied in 2002 is equal to its adjusted levy limit base in
the previous year, subject to any adjustments under section
275.72.
Subd. 3. [ADJUSTMENTS FOR STATE TAKEOVERS.] (a) The levy
limit base for each local unit of government shall be adjusted
to reflect the assumption by the state of financing for certain
government functions as indicated in this subdivision.
(b) For a county in a judicial district for which financing
has not been transferred to the state by January 1, 2001, the
levy limit base for 2001 is permanently reduced by the amount of
the county's 2001 budget for court administration costs, as
certified under section 273.1398, subdivision 4b, paragraph (b).
(c) For a governmental unit which levied a tax in 2000
under section 473.388, subdivision 7, the levy limit base for
2001 is permanently reduced by an amount equal to the sum of the
governmental unit's taxes payable 2001 nondebt transit services
levy plus the portion of its 2001 homestead and agricultural
credit aid under section 273.1398, subdivision 2, attributable
to nondebt transit services.
(d) For counties in a judicial district in which the state
assumed financing of mandated services costs as defined in
section 480.181, subdivision 4, on July 1, 2001, the levy limit
base for taxes levied in 2001 is permanently reduced by an
amount equal to one-half of the aid reduction under section
273.1398, subdivision 4a, paragraph (g).
Subd. 4. [ADJUSTED LEVY LIMIT BASE.] (a) For taxes levied
in 2001 and 2002, the adjusted levy limit base is equal to the
levy limit base computed under subdivisions 2 and 3 or section
275.72, multiplied by:
(1) one plus a percentage equal to the percentage growth in
the implicit price deflator;
(2) one plus a percentage equal to the percentage increase
in number of households, if any, for the most recent 12-month
period for which data is available; and
(3) one plus a percentage equal to 50 percent of the
percentage increase in the taxable market value of the
jurisdiction due to new construction of class 3 property, as
defined in section 273.13, subdivision 24, except for
state-assessed utility and railroad operating property, for the
most recent year for which data is available.
(b) For counties only, for taxes levied in 2001 and 2002,
the adjusted levy limit base is also reduced by any amount of
levy reduction required under section 275.07, subdivision 1,
paragraph (b), clause (ii).
Subd. 5. [PROPERTY TAX LEVY LIMIT.] Notwithstanding any
other provision of a municipal charter which limits ad valorem
taxes to a lesser amount, or which would require a separate
voter approval for any increase, for taxes levied in 2001 and
2002, the property tax levy limit for a local governmental unit
is equal to its adjusted levy limit base determined under
subdivision 4 plus any additional levy authorized under section
275.73, which is levied against net tax capacity, reduced by the
sum of (i) the total amount of aids and reimbursements that the
local governmental unit is certified to receive under sections
477A.011 to 477A.014, except for the increases in city aid bases
in calendar year 2002 under section 477A.011, subdivision 36,
paragraphs (n), (p), and (q), (ii) homestead and agricultural
aids it is certified to receive under section 273.1398, (iii)
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, (iv) low-income housing
aid under sections 477A.06 and 477A.065, and (v) property tax
replacement aids under section 174.242.
Subd. 6. [LEVIES IN EXCESS OF LEVY LIMITS.] If the levy
made by a city or county exceeds the levy limit provided in
sections 275.70 to 275.74, except when the excess levy is due to
the rounding of the rate in accordance with section 275.28, the
county auditor shall only extend the amount of taxes permitted
under sections 275.70 to 275.74, as provided for in section
275.16.
Sec. 8. [275.72] [LEVY LIMIT ADJUSTMENTS FOR CONSOLIDATION
AND ANNEXATION.]
Subdivision 1. [ADJUSTMENTS FOR CONSOLIDATION.] If all of
the area included in two or more local governmental units is
consolidated, merged, or otherwise combined to constitute a
single governmental unit, the levy limit base for the resulting
governmental unit in the first levy year in which the
consolidation is effective shall be equal to (1) the highest tax
rate in any of the merging governmental units in the previous
year multiplied by the net tax capacity of all the merging
governmental units in the previous year, minus (2) the sum of
all levies in the merging governmental units in the previous
year that qualify as special levies under section 275.70,
subdivision 5.
Subd. 2. [ADJUSTMENTS FOR ANNEXATION.] If a local
governmental unit increases its tax base through annexation of
an area which is not the area of an entire local governmental
unit and the area of annexation contains a population of 50 or
more, the levy limit base of the local governmental unit in the
first year in which the annexation is effective shall be equal
to its levy limit base established before the adjustment under
section 275.71, subdivision 3, for the current levy year
multiplied by the ratio of the net tax capacity in the local
governmental unit after the annexation compared to its net tax
capacity before the annexation.
Subd. 3. [ADJUSTMENTS FOR CHANGES IN SERVICE LEVELS.] If a
local governmental unit, as a result of an annexation agreement
prior to January 1, 1999, has different tax rates in various
parts of the jurisdiction due to different service levels, it
may petition the commissioner of revenue to adjust its levy
limits established under section 275.71. The commissioner shall
adjust the levy limits to reflect scheduled changes in tax rates
related to increasing service levels in areas currently
receiving less city services. The local governmental unit shall
provide the commissioner with any information the commissioner
deems necessary in making the levy limit adjustment.
Subd. 4. [TRANSFER OF GOVERNMENTAL FUNCTIONS.] If a
function or service of one local governmental unit is
transferred to another local governmental unit, the levy limits
established under section 275.71 must be adjusted by the
commissioner of revenue in such manner so as to fairly and
equitably reflect the reduced or increased property tax burden
resulting from the transfer. The aggregate of the adjusted
limitations must not exceed the aggregate of the limitations
prior to adjustment.
Subd. 5. [EFFECTIVE DATE FOR LEVY LIMITS PURPOSES.]
Annexations, mergers, and shifts in services and functional
responsibilities that are effective by June 30 of the levy year
are included in the calculation of the levy limit for that levy
year. Annexations, mergers, and shifts in services and
functional responsibilities that are effective after June 30 of
a levy year are not included in the calculation of the levy
limit until the subsequent levy year.
Sec. 9. [275.73] [ELECTIONS FOR ADDITIONAL LEVIES.]
Subdivision 1. [ADDITIONAL LEVY AUTHORIZATION.]
Notwithstanding the provisions of sections 275.70 to 275.72, but
subject to other law or charter provisions establishing other
limitations on the amount of property taxes a local governmental
unit may levy, a local governmental unit may levy an additional
levy in any amount which is approved by the majority of voters
of the governmental unit voting on the question at a general or
special election. Notwithstanding section 275.61, any levy
authorized under this section must be levied against net tax
capacity unless the levy required voter approval under another
general or special law or any charter provisions. When the
governing body of the local governmental unit resolves to
increase the levy pursuant to this section, it shall provide for
submission of the proposition of an additional levy at a general
or special election. Notice of the election must be given in
the manner required by law. The notice must state the purpose
and the maximum yearly amount of the additional levy.
Subd. 2. [LEVY EFFECTIVE DATE.] An additional levy
approved under subdivision 1 at a general or special election
held prior to September 1 in any levy year may be levied in that
same levy year and subsequent levy years. An additional levy
approved under subdivision 1 at a general or special election
held after August 31 in any levy year shall not be levied in
that same levy but may be levied in subsequent levy years.
Sec. 10. [275.74] [STATE REGULATION OF LEVIES.]
Subdivision 1. [CALCULATION AND NOTIFICATION.] The
commissioner of revenue shall make all necessary calculations
for determining levy limits for local governmental units and
notify the affected governmental units of their levy limits
directly by September 1 of each levy year. The local
governmental units shall, upon request, provide the commissioner
with any information needed to make the calculations. The local
governmental unit shall report by September 30, in a manner
prescribed by the commissioner, the maximum amount of taxes it
plans to levy for each of the purposes listed under special
levies and any additional levy authorized under section 275.73,
along with any necessary documentation. The commissioner shall
review the proposed special levies and make any adjustments
needed. The commissioner's decision is final. The final
allowed special levy amounts and any levy limit adjustments must
be certified back to the local governments by December 10. In
addition, the commissioner of revenue shall notify all county
auditors on or before five working days after December 20 of the
sum of the levy limit plus the total of allowed special levies
for each local governmental unit located within their boundaries
so that they may fix the levies as required in section 275.16.
The local governmental units shall provide the commissioner of
revenue with all information that the commissioner deems
necessary to make the calculations provided for in sections
275.70 to 275.73.
Subd. 2. [AUTHORIZATION FOR SPECIAL LEVIES.] A local
governmental unit may request authorization to levy for
unreimbursed costs for other natural disasters under section
275.70, subdivision 5, clause (6). The local governmental unit
shall submit a request to levy under section 275.70, subdivision
5, clause (6), to the commissioner of revenue by September 30 of
the levy year and the request must include information
documenting the estimated unreimbursed costs. The commissioner
of revenue may grant levy authority, up to the amount requested
based on the documentation submitted. All decisions of the
commissioner are final.
Subd. 3. [INFORMATION NECESSARY TO CALCULATE THE 2001 LEVY
LIMIT BASE.] A local governmental unit must provide the
commissioner with the information required to calculate the
alternative 2001 levy limit base under section 275.71,
subdivision 2, paragraph (a), clause (2), by July 20, 2001. If
the information is not received by the commissioner by that
date, or is not deemed sufficient to make the calculation under
that clause, the commissioner has the discretion to set the
local governmental unit's 2001 levy limit base equal to the
amount calculated under section 275.71, subdivision 2, paragraph
(a), clause (1).
ARTICLE 17
ELECTRONIC FILING AND PAYMENT
Section 1. Minnesota Statutes 2000, section 115B.24,
subdivision 2, is amended to read:
Subd. 2. [DECLARATIONS OF ESTIMATED TAX.] For 1983, every
generator of hazardous waste required to pay a tax pursuant to
section 115B.22 shall make a declaration of estimated hazardous
waste generated for the last six months of calendar year 1983 if
the tax can reasonably be estimated to exceed $500. The
declaration of the estimated tax shall be filed by October 15,
1983. The amount of estimated tax with respect to which a
declaration is required shall be paid in two equal installments
by October 15, 1983 and January 15, 1984. For 1984 and
subsequent years, every generator of hazardous waste required to
pay a tax pursuant to section 115B.22 shall make a declaration
of estimated hazardous waste generated for the calendar year if
the tax can reasonably be expected to be in excess of $1,000.
The declaration of estimated tax shall be filed by March 15.
The amount of estimated tax with respect to which a declaration
is required shall be paid in four equal installments on or
before the 15th day of March, June, September, and December.
An amendment of a declaration may be filed in any interval
between installment dates prescribed above but only one
amendment may be filed in each interval. If an amendment of a
declaration is filed, the amount of each remaining installment
shall be the amount which would have been payable if the new
estimate had been made when the first estimate for the calendar
year was made, increased or decreased, as the case may be, by
the amount computed by dividing
(1) the difference between (A) the amount of estimated tax
required to be paid before the date on which the amendment was
made, and (B) the amount of estimated tax which would have been
required to be paid before that date if the new estimate had
been made when the first estimate was made, by
(2) the number of installments remaining to be paid on or
after the date on which the amendment is made.
The commissioner of revenue may grant a reasonable
extension of time for filing any declaration but the extension
shall not be for more than six months.
If the aggregate amount of estimated tax payments made
during a fiscal year ending June 30 is equal to or exceeds
$80,000, all estimated tax payments in the subsequent calendar
year must be paid by electronic means of a funds transfer as
defined in section 336.4A-104, paragraph (a). The funds
transfer payment date, as defined in section 336.4A-401, must be
on or before the date the estimated tax payment is due. If the
date the estimated tax payment is due is not a funds transfer
business day, as defined in section 336.4A-105, paragraph (a),
clause (4), the payment date must be on or before the funds
transfer business day next following the date the estimated tax
payment is due.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2000, section 270.271,
subdivision 1, is amended to read:
Subdivision 1. [DATE OF DELIVERY.] When a document,
including a return, claim, or statement, is required to be
filed, or a payment is required to be made to the commissioner
within a prescribed period, or on or before a prescribed date,
and if the document or payment is delivered by electronic means
or by United States mail after the period or the date to the
place prescribed for filing or payment, then the date of
delivery or of payment is the date of the confirmation
time-and-date stamp of the transaction, if delivered by
electronic means, or the date of the United States postmark
stamped on the cover in which the document or payment is mailed,
if delivered by United States mail shall be considered the date
of delivery or of payment, as the case may be.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2000, section 270.271,
subdivision 3, is amended to read:
Subd. 3. [CONFIRMATION OF ELECTRONIC FILING AND PAYMENT
AND UNITED STATES POSTAL SERVICE POSTMARK.] The confirmation
numbers and confirmation time-and-date stamps received by the
taxpayer following electronic payment or filing is proof of the
payment authorization and filing dates. Only the postmark of
the United States Postal Service, rather than those of private
postage meters, qualifies as proof of timely mailing under this
section. If the document or payment is sent by United States
registered mail, the date of registration shall be treated as
the postmark date. If the document or payment is sent by United
States certified mail and the sender's receipt is postmarked by
the postal employee to whom the envelope containing such
document or payment is presented, the date of the United States
postmark on the receipt shall be treated as the postmark date of
the document or payment.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2000, section 270.771, is
amended to read:
270.771 [PAYMENTS REQUIRED TO BE MADE BY ELECTRONIC FUNDS
TRANSFER ELECTRONICALLY.]
(a) If a taxpayer is required to make payment of a tax to
the commissioner by electronic means of electronic funds
transfer as defined in section 336.4A-104, paragraph (a), the
taxpayer shall make all payments of all taxes and fees paid to
the commissioner by electronic means of electronic funds
transfer.
(b) Paragraph (a) does not apply to payments required to be
made for individual income taxes under section 289A.20,
subdivision 1, paragraph (a), or 289A.25.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2000, section 270.78, is
amended to read:
270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC
FUNDS TRANSFER PAY ELECTRONICALLY.]
In addition to other applicable penalties imposed by law,
after notification from the commissioner of revenue to the
taxpayer that payments for a tax administered by the
commissioner are required to be made by electronic means of
electronic funds transfer, and the payments are remitted by some
other means, there is a penalty in the amount of five percent of
each payment that should have been remitted electronically.
After the commissioner's initial notification to the taxpayer
that payments are required to be made by electronic means, the
commissioner is not required to notify the taxpayer in
subsequent periods if the initial notification specified the
amount of tax liability at which a taxpayer is required to remit
payments by electronic means. The penalty can be abated under
the abatement procedures prescribed in section 270.07,
subdivision 6, if the failure to remit the payment
electronically is due to reasonable cause. The penalty bears
interest at the rate specified in section 270.75 from the due
date of the payment of the tax to the date of payment of the
penalty.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2000, section 287.12, is
amended to read:
287.12 [TAXES, HOW APPORTIONED.]
(a) All taxes paid to the county treasurer under the
provisions of sections 287.01 to 287.12 must be apportioned, 97
percent to the general fund of the state, and three percent to
the county revenue fund.
(b) On or before the 20th day of each month the county
treasurer shall determine and pay to the commissioner of revenue
for deposit in the state treasury and credit to the general fund
the state's portion of the receipts from the mortgage registry
tax during the preceding month subject to the electronic funds
transfer payment requirements of section 270.771. The county
treasurer shall provide any related reports requested by the
commissioner of revenue.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2000, section 289A.02, is
amended by adding a subdivision to read:
Subd. 8. [ELECTRONIC MEANS.] "Electronic means" refers to
a method that is electronic, as defined in section 325L.02,
paragraph (e), and that is prescribed by the commissioner.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 8. Minnesota Statutes 2000, section 289A.18,
subdivision 4, as amended by Laws 2001, chapter 7, section 56,
is amended to read:
Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use
tax returns must be filed on or before the 20th day of the month
following the close of the preceding reporting period, except
that annual use tax returns provided for under section 289A.11,
subdivision 1, must be filed by April 15 following the close of
the calendar year, in the case of individuals. Annual use tax
returns of businesses, including sole proprietorships, and
annual sales tax returns must be filed by February 5 following
the close of the calendar year.
(b) Except for the return for the June reporting period,
which is due on the following August 25, Returns for the June
reporting period filed by retailers required to
remit liabilities by means of funds transfer their June
liability under section 289A.20, subdivision 4,
paragraph (c) (b), are due on or before the 25th day of the
month following the close of the preceding reporting
period August 20.
(c) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $500 per month in any
quarter of a calendar year, and has substantially complied with
the tax laws during the preceding four calendar quarters, the
retailer may request authorization to file and pay the taxes
quarterly in subsequent calendar quarters. The authorization
remains in effect during the period in which the retailer's
quarterly returns reflect sales and use tax liabilities of less
than $1,500 and there is continued compliance with state tax
laws.
(d) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $100 per month during a
calendar year, and has substantially complied with the tax laws
during that period, the retailer may request authorization to
file and pay the taxes annually in subsequent years. The
authorization remains in effect during the period in which the
retailer's annual returns reflect sales and use tax liabilities
of less than $1,200 and there is continued compliance with state
tax laws.
(e) The commissioner may also grant quarterly or annual
filing and payment authorizations to retailers if the
commissioner concludes that the retailers' future tax
liabilities will be less than the monthly totals identified in
paragraphs (c) and (d). An authorization granted under this
paragraph is subject to the same conditions as an authorization
granted under paragraphs (c) and (d).
(f) A taxpayer who is a materials supplier may report gross
receipts either on:
(1) the cash basis as the consideration is received; or
(2) the accrual basis as sales are made.
As used in this paragraph, "materials supplier" means a person
who provides materials for the improvement of real property; who
is primarily engaged in the sale of lumber and building
materials-related products to owners, contractors,
subcontractors, repairers, or consumers; who is authorized to
file a mechanics lien upon real property and improvements under
chapter 514; and who files with the commissioner an election to
file sales and use tax returns on the basis of this paragraph.
[EFFECTIVE DATE.] This section is effective for returns due
on or after July 1, 2001.
Sec. 9. Minnesota Statutes 2000, section 289A.20,
subdivision 1, is amended to read:
Subdivision 1. [INDIVIDUAL INCOME, FIDUCIARY INCOME,
MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.]
(a) Individual income, fiduciary, mining company, and corporate
franchise taxes must be paid to the commissioner on or before
the date the return must be filed under section 289A.18,
subdivision 1, or the extended due date as provided in section
289A.19, unless an earlier date for payment is provided.
Notwithstanding any other law, a taxpayer whose unpaid
liability for income or corporate franchise taxes, as reflected
upon the return, is $1 or less need not pay the tax.
(b) Entertainment taxes must be paid on or before the date
the return must be filed under section 289A.18, subdivision 1.
(c) If a fiduciary administers 100 or more trusts,
fiduciary income taxes for all trusts administered by the
fiduciary must be paid by 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 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 electronic means.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 2000, 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 electronic 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 electronic 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 the day
following final enactment.
Sec. 11. Minnesota Statutes 2000, 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 62 percent of the estimated June liability to
the commissioner.
(2) On or before August 14 20 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 electronic 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 20th day of the month following the month in which the
taxable event occurred, or on or before the 14th 20th day of the
month following the month in which the sale is reported under
section 289A.18, subdivision 4, except for 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 20. 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.] This section is effective for payments
due on or after July 1, 2001.
Sec. 12. Minnesota Statutes 2000, section 289A.26,
subdivision 2a, is amended to read:
Subd. 2a. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the
aggregate amount of estimated tax payments made during a
calendar year is equal to or exceeds $20,000, all estimated tax
payments in the subsequent calendar year must be paid
by electronic means of a funds transfer as defined in section
336.4A-104, paragraph (a). The funds transfer payment date, as
defined in section 336.4A-401, must be on or before the date the
estimated tax payment is due. If the date the estimated tax
payment is due is not a funds transfer business day, as defined
in section 336.4A-105, paragraph (a), clause (4), the payment
date must be on or before the funds transfer business day next
following the date the estimated tax payment is due.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. Minnesota Statutes 2000, section 289A.60,
subdivision 21, as amended by Laws 2001, chapter 7, section 60,
is amended to read:
Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY
ELECTRONIC FUNDS TRANSFER MEANS.] In addition to other
applicable penalties imposed by this section, after notification
from the commissioner to the taxpayer that payments are required
to be made by electronic means of electronic funds transfer
under section 289A.20, subdivision 2, paragraph (e), or 4,
paragraph (c), or 289A.26, subdivision 2a, and the payments are
remitted by some other means, there is a penalty in the amount
of five percent of each payment that should have been remitted
electronically. After the commissioner's initial notification
to the taxpayer that payments are required to be made by
electronic means, the commissioner is not required to notify the
taxpayer in subsequent periods if the initial notification
specified the amount of tax liability at which a taxpayer is
required to remit payments by electronic means. The penalty can
be abated under the abatement procedures prescribed in section
270.07, subdivision 6, if the failure to remit the payment
electronically is due to reasonable cause.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. Minnesota Statutes 2000, section 295.55,
subdivision 4, is amended to read:
Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer
with an aggregate tax liability of $120,000 or more during a
fiscal year ending June 30, must remit all liabilities by
electronic means of a funds transfer as defined in section
336.4A-104, paragraph (a), in the subsequent calendar year. The
funds transfer payment date, as defined in section 336.4A-401,
is 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 is on or
before the first funds-transfer business day after the date the
tax is due.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. Minnesota Statutes 2000, section 296A.15,
subdivision 7, is amended to read:
Subd. 7. [ELECTRONIC FUNDS TRANSFER PAYMENT REQUIRED.] All
remittances must be made by electronic means of electronic 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 remittance is due. If the
date the remittance 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 remittance is due.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. Minnesota Statutes 2000, 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 1.7 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 electronic means.
(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 1.7 percent of the face value of the unsold pull-tab or
tipboard tickets, provided that the refund or credit will be
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 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 the day
following final enactment.
Sec. 17. Minnesota Statutes 2000, section 297F.09,
subdivision 7, is amended to read:
Subd. 7. [ELECTRONIC FUNDS TRANSFER PAYMENT.] A cigarette
or tobacco products 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 electronic means
of a fund 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 day
immediately following the date the tax is due.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 18. Minnesota Statutes 2000, section 297G.09,
subdivision 6, is amended to read:
Subd. 6. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A licensed
brewer, importer, or wholesaler having an excise tax liability
of $120,000 or more during a fiscal year ending June 30 must
remit all excise tax liabilities in the subsequent calendar year
by electronic 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
excise tax is due. If the date the excise 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
excise tax is due.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 19. Minnesota Statutes 2000, section 297I.35,
subdivision 2, is amended to read:
Subd. 2. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the
aggregate amount of tax and surcharges due under this chapter
during a calendar year is equal to or exceeds $120,000, or if
the taxpayer is required to make payment of any other tax to the
commissioner by electronic means of electronic funds transfer as
defined in section 336.4A-104, paragraph (a), then all tax and
surcharge payments in the subsequent calendar year must be paid
by electronic 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-104, 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.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 20. Minnesota Statutes 2000, section 297I.85,
subdivision 7, is amended to read:
Subd. 7. [PENALTY FOR FAILURE TO MAKE PAYMENT BY
ELECTRONIC FUNDS TRANSFER PAY ELECTRONICALLY.] In addition to
other applicable penalties imposed by this section, if the
commissioner notifies the taxpayer that payments are required to
be made by electronic means of electronic funds transfer, and
the payments are made by some other means, a penalty is
imposed. The amount of the penalty is equal to five percent of
each payment that should have been paid electronically. After
the commissioner's initial notification to the taxpayer that
payments are required to be made by electronic means, the
commissioner is not required to notify the taxpayer in
subsequent periods if the initial notification specified the
amount of tax liability at which a taxpayer is required to remit
payments by electronic means. The penalty may be abated under
the abatement procedures prescribed in section 270.07,
subdivision 6, if the failure to pay electronically is due to
reasonable cause.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 21. Minnesota Statutes 2000, section 473.843,
subdivision 3, is amended to read:
Subd. 3. [PAYMENT OF FEE.] On or before the 20th day of
each month each operator shall pay the fee due under this
section for the previous month, using a form provided by the
commissioner of revenue.
An operator having a fee of $120,000 or more during a
fiscal year ending June 30 must pay all fees in the subsequent
calendar year by electronic 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 fee is due. If the date the fee 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 fee is due.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 18
SEIZURES OF CONTRABAND
Section 1. Minnesota Statutes 2000, section 296A.24,
subdivision 1, is amended to read:
Subdivision 1. [SEIZURE.] The commissioner or authorized
agents may seize gasoline or special fuel being transported for
delivery in violation of section 296A.03, subdivision 1, and any
vehicle or other method of conveyance used for transporting the
gasoline or special fuel. Any untaxed motor vehicle fuel that
is received by a person other than a licensee is subject to
seizure along with the vehicle or other means of transportation
used to transport the motor vehicle fuel. Any motor vehicle
fuel, along with the transporting vehicle, brought into the
state of Minnesota by a transporter for use, distribution,
storage, or sale that is not supported by a manifest, bill of
lading, or invoice, reflecting the licensed distributor
responsible for the tax and/or fees is subject to seizure by the
Minnesota department of revenue. Property seized under this
subdivision is subject to forfeiture as provided in subdivisions
subdivision 2 and 3.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 2. Minnesota Statutes 2000, section 296A.24,
subdivision 2, is amended to read:
Subd. 2. [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten
days after the seizure of gasoline or special fuel, the person
making the seizure shall deliver serve by certified mail an
inventory of the vehicle or property seized to on the person
from whom the seizure was made, if known, and on any person
known or believed to have any right, title, interest, or lien on
the vehicle or property, at the last known address, and file a
copy with the office of the commissioner. The notice must
include an explanation of the right to demand a judicial
forfeiture determination.
(b) Within ten 60 days after the date of service of the
inventory, which is the date of mailing, the person from whom
the vehicle or property was seized or any person claiming an
interest in the property it may file with the commissioner a
demand for a judicial determination of whether the vehicle or
property was lawfully subject to seizure and forfeiture. The
commissioner, within 60 days of demand for a judicial
determination, shall begin an action in the district court of
the county where the seizure was made to determine the issue of
forfeiture.
(b) The action must be brought in the name of the state and
prosecuted by the county attorney or by the attorney
general. The demand must be in the form of a civil complaint
and must be filed with the court administrator in the county in
which the seizure occurred, together with proof of service of a
copy of the complaint on the commissioner of revenue, and the
standard filing fee for civil actions unless the petitioner has
the right to sue in forma pauperis under section 563.01. If the
value of the seized property or vehicle is $7,500 or less, the
claimant may file an action in conciliation court for its
recovery. If the value of the seized property or vehicle is
less than $500, the claimant does not have to pay the
conciliation court filing fee.
(c) The complaint must be captioned in the name of the
claimant as plaintiff and the seized property or vehicle as
defendant, and must state with specificity the grounds on which
the claimant alleges the property or vehicle was improperly
seized and the plaintiff's interest in the property or vehicle
seized. No responsive pleading is required of the commissioner
and no court fees may be charged for the commissioner's
appearance in the matter. The proceedings are governed by the
Rules of Civil Procedure. Notwithstanding any law to the
contrary, an action for the return of property or a vehicle
seized under this section may not be maintained by or on behalf
of any person who has been served with an inventory unless the
person has complied with this subdivision. The court shall hear
the action without a jury and shall try and determine the issues
of fact and law involved.
(c) (d) When a judgment of forfeiture is entered, the
commissioner may, unless the judgment is stayed pending an
appeal, either:
(1) cause the forfeited property gasoline or special fuel
to be destroyed; or
(2) cause it the forfeited property in clause (1) or
vehicle to be sold at public auction as provided by
law. Proceeds of a sale, after deducting the expense of keeping
the gasoline or special fuel and costs of the sale, must be paid
into the state treasury. The commissioner shall reimburse
designees for costs incurred. After deducting the expense of
keeping the property and vehicle and the costs of the sale, the
commissioner shall pay from the funds collected all liens
according to their priority, which are established as being bona
fide and as existing without the lienor having any notice or
knowledge that the property or vehicle was being used or was
intended to be used for or in connection with any violation, and
shall pay the balance of the proceeds into the general fund.
(d) If a demand for judicial determination is made and no
action is commenced as provided in this subdivision, the
property must be released by the commissioner and redelivered to
the person entitled to it. (e) If no demand for judicial
determination is made, the property or vehicle seized must be
considered forfeited to the state by operation of law and may be
disposed of by the commissioner as provided where there has been
a judgment of forfeiture. When the commissioner is satisfied
that a person from whom property is seized under this chapter
was acting in good faith and without intent to evade the tax,
the commissioner shall release the property seized, without
further legal proceedings.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 3. Minnesota Statutes 2000, section 297A.91, is
amended to read:
297A.91 [SEIZURE; COURT REVIEW.]
Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL
TRANSPORT.] (a) If the retailer does not have a sales or use tax
permit and has been engaging in transporting personal property
into the state without payment of the tax, the commissioner of
revenue or the commissioner's agents may seize in the name of
the state any truck, automobile, or means of transportation not
owned or operated by a common carrier, used in the illegal
importation and transportation of any tangible personal property
by a retailer or the retailer's agent or employee. The
commissioner may demand the forfeiture and sale of the truck,
automobile, or other means of transportation together with the
property being transported illegally, unless the owner
establishes to the satisfaction of the commissioner or the court
that the owner had no notice or knowledge or reason to believe
that the vehicle was used or intended to be used in any such
violation.
(b) Within two ten days after the seizure, the person
making the seizure shall deliver serve by certified mail an
inventory of the vehicle and property seized to on the person
from whom the seizure was made, if known, and to on any person
known or believed to have any right, title, interest, or lien on
the vehicle or property, at the last known address. The person
making the seizure shall also file a copy of the inventory with
the commissioner. The notice must include an explanation of the
right to demand a judicial forfeiture determination.
Subd. 2. [COURT REVIEW OF FORFEITURE.] (a) Within ten 60
days after the date of service of the inventory, which is the
date of mailing, the person from whom the vehicle and property
were seized or any person claiming an interest in the vehicle or
property may file with the commissioner a demand for a judicial
determination of the question of whether the vehicle or property
was lawfully subject to seizure and forfeiture. The
commissioner, within 30 days, shall institute an action in the
district court of the county where the seizure was made to
determine the issue of forfeiture.
(b) The action must be brought in the name of the state and
prosecuted by the county attorney or the attorney general. The
demand must be in the form of a civil complaint and must be
filed with the court administrator in the county in which the
seizure occurred, together with proof of service or a copy of
the complaint on the commissioner of revenue, and the standard
filing fee for civil actions unless the petitioner has the right
to sue in forma pauperis under section 563.01. If the value of
the seized property or vehicle is $7,500 or less, the claimant
may file an action in conciliation court for its recovery. If
the value of the seized property or vehicle is less than $500,
the claimant does not have to pay the conciliation court filing
fee.
(c) The complaint must be captioned in the name of the
claimant as plaintiff and the seized property or vehicle as
defendant, and must state with specificity the grounds on which
the claimant alleges the property or vehicle was improperly
seized and the plaintiff's interest in the property or vehicle
seized. No responsive pleading is required of the commissioner,
and no court fees may be charged for the commissioner's
appearance in the matter. The proceedings are governed by the
Rules of Civil Procedure. Notwithstanding any law to the
contrary, an action for the return of property or a vehicle
seized under this subdivision may not be maintained by or on
behalf of any person who has been served with an inventory
unless the person has complied with this subdivision. The court
shall hear the action without a jury and shall determine the
issues of fact and law involved. If a judgment of forfeiture is
entered and is not stayed pending an appeal, the commissioner
may have the forfeited vehicle and property sold at public
auction as provided by law.
Subd. 3. [TREATMENT OF SEIZED PROPERTY.] If a demand for
judicial determination is made and no action is commenced as
provided in this subdivision, the vehicle and property must be
released by the commissioner and redelivered to the person
entitled to it. If no demand for judicial determination is
made, the vehicle and property seized are considered forfeited
to the state by operation of law and may be disposed of by the
commissioner as if there were a judgment of forfeiture. The
forfeiture and sale of the automobile, truck, or other means of
transportation, and of the property being transported illegally
in it, are a penalty for the violation of this chapter. After
deducting the expense of keeping the vehicle and property, the
fee for seizure, and the costs of the sale, the commissioner
shall pay liens from the funds collected. The commissioner
shall pay all liens, according to their priority, that are
established at the hearing as being bona fide and as existing
without the lienor having any notice or knowledge that the
vehicle or property was being used or was intended to be used
for or in connection with any such violation as specified in the
order of the court. The commissioner shall pay the balance of
the proceeds into the state treasury to be credited to the
general fund. The state is not liable for any liens in excess
of the proceeds from the sale after allowable deductions. A
sale under this section frees the vehicle and property sold from
all liens. The order of the district court may be appealed as
in other civil cases.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 4. Minnesota Statutes 2000, section 297E.16,
subdivision 1, is amended to read:
Subdivision 1. [SEIZURE.] Contraband may be seized by the
commissioner or by any sheriff or other police officer,
hereinafter referred to as the "seizing authority," with or
without process, and is subject to forfeiture as provided in
subdivisions subdivision 2 and 3.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 5. Minnesota Statutes 2000, section 297E.16,
subdivision 2, is amended to read:
Subd. 2. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the
seizure of alleged contraband described in section 349.2125,
subdivision 1, the person making the seizure shall make
available serve by certified mail an inventory of the property
seized to on the person from whom the property was seized, if
known, and on any person known or believed to have any right,
title, interest, or lien in the property, at the last known
address, and file a copy with the commissioner or the director
of alcohol and gambling enforcement. The notice must include an
explanation of the right to demand a judicial forfeiture
determination.
(b) Within ten 60 days after the date of service of the
inventory, which is the date of mailing, the person from whom
the property was seized or any person claiming an interest in
the property may file with the seizing authority a demand for
judicial determination of whether the property was lawfully
subject to seizure and forfeiture. Within 60 days after the
date of filing of the demand, the seizing authority must bring
an action in the district court of the county where seizure was
made to determine the issue of forfeiture. The action must be
brought in the name of the state and be prosecuted by the county
attorney or by the attorney general. The demand must be in the
form of a civil complaint and must be filed with the court
administrator in the county in which the seizure occurred,
together with proof of service of a copy of the complaint on the
commissioner of revenue or the director of alcohol and gambling
enforcement, and the standard filing fee for civil actions
unless the petitioner has the right to sue in forma pauperis
under section 563.01. If the value of the seized property is
$7,500 or less, the claimant may file an action in conciliation
court for recovery of the property. If the value of the seized
property is less than $500, the claimant does not have to pay
the conciliation court filing fee.
(c) The complaint must be captioned in the name of the
claimant as plaintiff and the seized property as defendant, and
must state with specificity the grounds on which the claimant
alleges the property was improperly seized and the plaintiff's
interest in the property seized. No responsive pleading is
required of the commissioner or director, and no court fees may
be charged for the commissioner's or director's appearance in
the matter. The proceedings are governed by the Rules of Civil
Procedure. Notwithstanding any law to the contrary, an action
for the return of property seized under this section may not be
maintained by or on behalf of any person who has been served
with an inventory unless the person has complied with this
subdivision. The court shall hear the action without a jury and
determine the issues of fact and law involved.
(d) If a judgment of forfeiture is entered, the seizing
authority may, unless the judgment is stayed pending an appeal,
either (1) cause the forfeited property, other than a vehicle,
to be destroyed; or (2) cause it to be sold at a public auction
as provided by law. The person making a sale, after deducting
the expense of keeping the property, the fee for seizure, and
the costs of the sale, shall pay all liens according to their
priority, which are established as being bona fide and as
existing without the lienor having any notice or knowledge that
the property was being used or was intended to be used for or in
connection with the violation. The balance of the proceeds must
be paid 70 percent to the seizing authority for deposit as a
supplement to its operating fund or similar fund for official
use, and 20 percent to the county attorney or other prosecuting
agency that handled the court proceeding, if there is one, for
deposit as a supplement to its operating fund or similar fund
for prosecutorial purposes. The remaining ten percent of the
proceeds must be forwarded within 60 days after resolution of
the forfeiture to the department of human services to fund
programs for the treatment of compulsive gamblers. If there is
no prosecuting authority involved in the forfeiture, the 20
percent of the proceeds otherwise designated for the prosecuting
authority must be deposited into the general fund.
If demand for judicial determination is made and no action
is commenced by the seizing authority as provided in this
subdivision, the property must be released by the seizing
authority and delivered to the person entitled to it. (e) If no
demand for judicial determination is made, the property seized
is considered forfeited to the seizing authority by operation of
law and may be disposed of by the seizing authority as provided
where there has been a judgment of forfeiture. When the seizing
authority is satisfied that a person from whom property is
seized was acting in good faith and without intent to evade the
tax imposed by section 297E.02, the seizing authority shall
release the property seized without further legal proceedings.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 6. Minnesota Statutes 2000, 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) 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
untaxed tobacco products intended for sale in Minnesota other
than those in the possession of a licensed distributor on or
before the due date for payment of the tax under section
297F.09, subdivision 2.
(g) Cigarette packages or tobacco products obtained from an
unlicensed seller.
(g) (h) Cigarette packages offered for sale or held as
inventory in violation of section 297F.20, subdivision 7.
(h) (i) Tobacco products on which the tax has not been paid
by a licensed distributor.
(i) (j) 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.
(j) (k) Cigarette packages which have been imported into
the United States in violation of United States Code, title 26,
section 5754. All cigarettes held in violation of that section
shall be presumed to have entered the United States after
December 31, 1999, in the absence of proof to the contrary.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 7. Minnesota Statutes 2000, section 297F.21,
subdivision 2, is amended to read:
Subd. 2. [SEIZURE.] Cigarettes, tobacco products, or other
property made contraband by subdivision 1 may be seized by the
commissioner or authorized agents or by any sheriff or other
police officer, with or without process, and are subject to
forfeiture as provided in subdivisions subdivision 3 and 4.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 8. Minnesota Statutes 2000, 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 serve by certified mail an inventory of the
property seized to on the person from whom the seizure was made,
if known, and on any person known or believed to have any right,
title, interest, or lien in the property, at the last known
address, and file a copy with the commissioner. The notice must
include an explanation of the right to demand a judicial
forfeiture determination.
(b) Within ten 60 days after the date of service of the
inventory, which is the date of mailing, 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 demand must be in the
form of a civil complaint and must be filed with the court
administrator in the county in which the seizure occurred,
together with proof of service of a copy of the complaint on the
commissioner of revenue, and the standard filing fee for civil
actions unless the petitioner has the right to sue in forma
pauperis under section 563.01. If the value of the seized
property is $7,500 or less, the claimant may file an action in
conciliation court for recovery of the property. If the value
of the seized property is less than $500, the claimant does not
have to pay the conciliation court filing fee.
(c) The complaint must be captioned in the name of the
claimant as plaintiff and the seized property as defendant, and
must state with specificity the grounds on which the claimant
alleges the property was improperly seized and the plaintiff's
interest in the property seized. No responsive pleading is
required of the commissioner, and no court fees may be charged
for the commissioner's appearance in the matter. The
proceedings are governed by the Rules of Civil Procedure.
Notwithstanding any law to the contrary, an action for the
return of property seized under this section may not be
maintained by or on behalf of any person who has been served
with an inventory unless the person has complied with this
subdivision. 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) (d) When a judgment of forfeiture is entered, the
commissioner may, unless the judgment is stayed pending an
appeal, either:
(1) deliver the forfeited property cigarette packages or
tobacco products to the commissioner of human services for use
by patients in state institutions;
(2) cause it the property in clause (1) to be destroyed; or
(3) cause it the forfeited property to be sold at public
auction as provided by law.
The person making a sale, after deducting the expense of keeping
the property, the fee for seizure, and the costs of the sale,
shall pay all liens according to their priority, which are
established as being bona fide and as existing without the
lienor having any notice or knowledge that the property was
being used or was intended to be used for or in connection with
the violation. The balance of the proceeds must be paid 75
percent to the department of revenue for deposit as a supplement
to its operating fund or similar fund for official use, and 25
percent to the county attorney or other prosecuting agency that
handled the court proceeding, if there is one, for deposit as a
supplement to its operating fund or similar fund for
prosecutorial purposes. If there is no prosecuting authority
involved in the forfeiture, the 25 percent of the proceeds
otherwise designated for the prosecuting authority must be
deposited into the general fund.
(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. (e) If no demand for judicial determination 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.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 9. Minnesota Statutes 2000, section 297G.20,
subdivision 3, is amended to read:
Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented
malt beverages, or other property made contraband by subdivision
1 may be seized by the commissioner of revenue or public safety
and their authorized agents or by any sheriff or other police
officer, with or without process, and are subject to forfeiture
as provided in subdivisions subdivision 4 and 5.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 10. Minnesota Statutes 2000, section 297G.20,
subdivision 4, is amended to read:
Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the
seizure of alleged contraband, the person making the seizure
shall make available serve by certified mail an inventory of the
property seized to on the person from whom the property was
seized, if known, and on any person known or believed to have
any right, title, interest, or lien in the property, at the last
known address, and file a copy with both the commissioners of
revenue and public safety. The notice must include an
explanation of the right to demand a judicial forfeiture
determination.
(b) Within ten 60 days after the date of service of the
inventory, which is the date of mailing, the person from whom
the property was seized or any person claiming an interest in
the property may file with the seizing authority a demand for
judicial determination of whether the property was lawfully
subject to seizure and forfeiture. Within 60 days after the
date of the filing of the demand, the seizing authority must
bring an action in the district court of the county where
seizure was made to determine the issue of forfeiture. The
demand must be in the form of a civil complaint and must be
filed with the court administrator in the county in which the
seizure occurred, together with proof of service of a copy of
the complaint on the commissioner of revenue or public safety,
and the standard filing fee for civil actions unless the
petitioner has the right to sue in forma pauperis under section
563.01. If the value of the seized property or vehicle is
$7,500 or less, the claimant may file an action in conciliation
court for recovery of the property. If the value of the seized
property is less than $500, the claimant does not have to pay
the conciliation court filing fee.
(c) The complaint must be captioned in the name of the
claimant as plaintiff and the seized property as defendant, and
must state with specificity the grounds on which the claimant
alleges the property was improperly seized and the plaintiff's
interest in the property seized. No responsive pleading is
required of the commissioner of revenue or public safety and no
court fees may be charged for either commissioner's appearance
in the matter. The proceedings are governed by the Rules of
Civil Procedure. Notwithstanding any law to the contrary, an
action for the return of property seized under this section may
not be maintained by or on behalf of any person who has been
served with an inventory unless the person has complied with
this subdivision.
(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
determine the issues of fact and law involved.
(c) (d) If a judgment of forfeiture is entered, the seizing
authority may, unless the judgment is stayed pending an appeal,
either:
(1) cause the forfeited property, other than a vehicle, to
be destroyed; or
(2) cause it to be sold at a public auction as provided by
law.
The person making a sale, after deducting the expense of
keeping the property, the fee for seizure, and the costs of the
sale, shall pay all liens according to their priority, which are
established as being bona fide and as existing without the
lienor having any notice or knowledge that the property was
being used or was intended to be used for or in connection with
the violation. The balance of the proceeds must be paid 75
percent to the seizing authority for deposit as a supplement to
its operating fund or similar fund for official use, and 25
percent to the county attorney or other prosecuting agency that
handled the court proceeding, if there is one, for deposit as a
supplement to its operating fund or similar fund for
prosecutorial purposes. If there is no prosecuting authority
involved in the forfeiture, the 25 percent of the proceeds
otherwise designated for the prosecuting authority must be
deposited into the general fund.
(d) If demand for judicial determination is made and no
action is commenced by the seizing authority as provided in this
subdivision, the property must be released by the seizing
authority and delivered to the person entitled to it. (e) If no
demand is made, the property seized is considered forfeited to
the seizing authority by operation of law and may be disposed of
by the seizing authority as provided for a judgment of
forfeiture. When the seizing authority 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
seizing authority shall release the property seized without
further legal proceedings.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
Sec. 11. [REPEALER.]
Minnesota Statutes 2000, sections 296A.24, subdivision 3;
297E.16, subdivision 3; 297F.21, subdivision 4; and 297G.20,
subdivision 5, are repealed.
[EFFECTIVE DATE.] This section is effective for seizures
made on or after August 1, 2001.
ARTICLE 19
BIOMEDICAL INNOVATION INITIATIVE
Section 1. [116J.885] [BIOMEDICAL INNOVATION AND
COMMERCIALIZATION INITIATIVE.]
Subdivision 1. [ESTABLISHED.] The commissioner of trade
and economic development shall establish the biomedical
innovation and commercialization initiative (BICI) as a
collaborative economic development initiative between the
University of Minnesota, Minnesota's medical technology
industry, and investors. BICI is not a state agency.
The board established in subdivision 2 shall organize and
operate BICI as a for-profit entity and in a manner and form
that the board determines best allows BICI to carry out its
objectives. Any distribution from BICI must be returned to all
investors, including the state, in the same proportion as funds
were contributed.
Subd. 2. [BOARD.] BICI is governed by a board of
directors, appointed to six-year terms, comprised of:
(1) a representative chosen by the governor;
(2) a representative chosen by the University of Minnesota;
and
(3) five representatives from the state's medical
technology industry, chosen by private sector investors.
The board may use up to five percent of its total
capitalization to establish a management and administrative
budget, including the hiring of staff and for professional
management expenses. Members of the staff are not state
employees.
Subd. 3. [DUTIES OF BICI.] BICI shall:
(1) add business and financial expertise to technologies
that are being developed by University of Minnesota faculty and
staff to enhance commercial value;
(2) promote the depth, breadth, and value of technologies
being developed by the biomedical academic community;
(3) catalyze the development of functional, mutually
advantageous relationships between industry, faculty, staff, the
university, and extended research community;
(4) provide a financial return on commercialization efforts
to the stakeholders in BICI; and
(5) directly commercialize technologies through the startup
of new Minnesota companies or enhance the marketing of
technologies to existing companies creating expanded economic
development opportunities.
Subd. 4. [STATEWIDE FOCUS.] BICI may contract and
collaborate with higher education and other research
institutions located throughout the state.
Subd. 5. [POWERS OF BOARD.] The board has the power to do
all things reasonable and necessary to carry out the duties of
BICI including, without limitation, the power to:
(1) enter into contracts for goods and services with
individuals and private and public entities;
(2) sue and be sued;
(3) acquire, hold, lease, and transfer any interest in real
and personal property;
(4) accept appropriations, gifts, grants, and bequests;
(5) hire employees for BICI; and
(6) delegate any of its powers.
Subd. 6. [BOARD COMPENSATION.] Compensation and expense
reimbursement of board members is as provided in section
15.0575, subdivision 1.
Sec. 2. [APPROPRIATION.]
$10,000,000 is appropriated from the general fund for the
2002-2003 biennium to the commissioner of trade and economic
development for the purposes of section 1. The appropriation is
contingent on a three-to-one match of money contributions from
other sources.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 20
MISCELLANEOUS
Section 1. [12.38] [STATE AGENCIES; TEMPORARY WAIVER OF
FEES.]
Notwithstanding any law to the contrary, a state agency as
defined in section 16B.01, subdivision 2, with the approval of
the governor, may waive fees that would otherwise be charged for
agency services. The waiver of fees must be confined to
geographic areas within a presidentially declared disaster area,
and to the minimum periods of time necessary to deal with the
emergency situation. The requirements of section 14.05,
subdivision 4, do not apply to a waiver made under this
section. The agency must promptly report the reasons for and
the impact of any suspended fees to the chairs of the
legislative committees that oversee the policy and budgetary
affairs of the agency.
[EFFECTIVE DATE.] This section is effective for disaster
declarations made after April 15, 2001.
Sec. 2. Minnesota Statutes 2000, section 16A.152,
subdivision 1a, is amended to read:
Subd. 1a. [BUDGET RESERVE.] A budget reserve account of
$653,000,000 is created in the general fund in the state
treasury. The commissioner of finance shall transfer to the
budget reserve account on July 1 of each odd-numbered year any
amounts specifically appropriated by law to the budget reserve.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2000, section 16A.152,
subdivision 2, is amended to read:
Subd. 2. [ADDITIONAL REVENUES; PRIORITY.] If on the basis
of a forecast of general fund revenues and expenditures after
November 1 in an odd-numbered year, the commissioner of finance
determines that there will be a positive unrestricted budgetary
general fund balance at the close of the biennium, the
commissioner of finance must allocate money as follows:
(1) first, to the budget reserve until the total amount in
the account equals $622,000,000; then
(2) 60 percent to the property tax reform account
established in section 16A.1521; and
(3) 40 percent is an unrestricted balance in the general
fund the amount set in this section.
The amounts necessary to meet the requirements of this
section are appropriated from the general fund within two weeks
after the forecast is released.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2000, section 45.011,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE.] As used in chapters 45 to 83,
155A, 309, 332, 345, and 359, and sections 325D.30 to 325D.42,
326.83 to 326.991, and 386.61 to 386.78, unless the context
indicates otherwise, the terms defined in this section have the
meanings given them.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2000, section 270.06, is
amended to read:
270.06 [POWERS AND DUTIES.]
The commissioner of revenue shall:
(1) have and exercise general supervision over the
administration of the assessment and taxation laws of the state,
over assessors, town, county, and city boards of review and
equalization, and all other assessing officers in the
performance of their duties, to the end that all assessments of
property be made relatively just and equal in compliance with
the laws of the state;
(2) confer with, advise, and give the necessary
instructions and directions to local assessors and local boards
of review throughout the state as to their duties under the laws
of the state;
(3) direct proceedings, actions, and prosecutions to be
instituted to enforce the laws relating to the liability and
punishment of public officers and officers and agents of
corporations for failure or negligence to comply with the
provisions of the laws of this state governing returns of
assessment and taxation of property, and cause complaints to be
made against local assessors, members of boards of equalization,
members of boards of review, or any other assessing or taxing
officer, to the proper authority, for their removal from office
for misconduct or negligence of duty;
(4) require county attorneys to assist in the commencement
of prosecutions in actions or proceedings for removal,
forfeiture and punishment for violation of the laws of this
state in respect to the assessment and taxation of property in
their respective districts or counties;
(5) require town, city, county, and other public officers
to report information as to the assessment of property,
collection of taxes received from licenses and other sources,
and such other information as may be needful in the work of the
department of revenue, in such form and upon such blanks as the
commissioner may prescribe;
(6) require individuals, copartnerships, companies,
associations, and corporations to furnish information concerning
their capital, funded or other debt, current assets and
liabilities, earnings, operating expenses, taxes, as well as all
other statements now required by law for taxation purposes;
(7) subpoena witnesses, at a time and place reasonable
under the circumstances, to appear and give testimony, and to
produce books, records, papers and documents for inspection and
copying relating to any matter which the commissioner may have
authority to investigate or determine;
(8) issue a subpoena which does not identify the person or
persons with respect to whose liability the subpoena is issued,
but only if (a) the subpoena relates to the investigation of a
particular person or ascertainable group or class of persons,
(b) there is a reasonable basis for believing that such person
or group or class of persons may fail or may have failed to
comply with any law administered by the commissioner, (c) the
information sought to be obtained from the examination of the
records (and the identity of the person or persons with respect
to whose liability the subpoena is issued) is not readily
available from other sources, (d) the subpoena is clear and
specific as to the information sought to be obtained, and (e)
the information sought to be obtained is limited solely to the
scope of the investigation. Provided further that the party
served with a subpoena which does not identify the person or
persons with respect to whose tax liability the subpoena is
issued shall have the right, within 20 days after service of the
subpoena, to petition the district court for the judicial
district in which lies the county in which that party is located
for a determination as to whether the commissioner of revenue
has complied with all the requirements in (a) to (e), and thus,
whether the subpoena is enforceable. If no such petition is
made by the party served within the time prescribed, the
subpoena shall have the force and effect of a court order;
(9) cause the deposition of witnesses residing within or
without the state, or absent therefrom, to be taken, upon notice
to the interested party, if any, in like manner that depositions
of witnesses are taken in civil actions in the district court,
in any matter which the commissioner may have authority to
investigate or determine;
(10) investigate the tax laws of other states and countries
and to formulate and submit to the legislature such legislation
as the commissioner may deem expedient to prevent evasions of
assessment and taxing laws, and secure just and equal taxation
and improvement in the system of assessment and taxation in this
state;
(11) consult and confer with the governor upon the subject
of taxation, the administration of the laws in regard thereto,
and the progress of the work of the department of revenue, and
furnish the governor, from time to time, such assistance and
information as the governor may require relating to tax matters;
(12) transmit to the governor, on or before the third
Monday in December of each even-numbered year, and to each
member of the legislature, on or before November 15 of each
even-numbered year, the report of the department of revenue for
the preceding years, showing all the taxable property in the
state and the value of the same, in tabulated form;
(13) inquire into the methods of assessment and taxation
and ascertain whether the assessors faithfully discharge their
duties, particularly as to their compliance with the laws
requiring the assessment of all property not exempt from
taxation;
(14) administer and enforce the assessment and collection
of state taxes and fees, including the use of any remedy
available to nongovernmental creditors, and, from time to time,
make, publish, and distribute rules for the administration and
enforcement of assessments and fees administered by the
commissioner and state tax laws. The rules have the force of
law;
(15) prepare blank forms for the returns required by state
tax law and distribute them throughout the state, furnishing
them subject to charge on application;
(16) prescribe rules governing the qualification and
practice of agents, attorneys, or other persons representing
taxpayers before the commissioner. The rules may require that
those persons, agents, and attorneys show that they are of good
character and in good repute, have the necessary qualifications
to give taxpayers valuable services, and are otherwise competent
to advise and assist taxpayers in the presentation of their case
before being recognized as representatives of taxpayers. After
due notice and opportunity for hearing, the commissioner may
suspend and disbar from further practice before the commissioner
any person, agent, or attorney who is shown to be incompetent or
disreputable, who refuses to comply with the rules, or who with
intent to defraud, willfully or knowingly deceives, misleads, or
threatens a taxpayer or prospective taxpayer, by words,
circular, letter, or by advertisement. This clause does not
curtail the rights of individuals to appear in their own behalf
or partners or corporations' officers to appear in behalf of
their respective partnerships or corporations;
(17) appoint agents as the commissioner considers necessary
to make examinations and determinations. The agents have the
rights and powers conferred on the commissioner to subpoena,
examine, and copy books, records, papers, or memoranda, subpoena
witnesses, administer oaths and affirmations, and take
testimony. In addition to administrative subpoenas of the
commissioner and the agents, upon demand of the commissioner or
an agent, the court administrator of any district court shall
issue a subpoena for the attendance of a witness or the
production of books, papers, records, or memoranda before the
agent for inspection and copying. Disobedience of a court
administrator's subpoena shall be punished by the district court
of the district in which the subpoena is issued, or in the case
of a subpoena issued by the commissioner or an agent, by the
district court of the district in which the party served with
the subpoena is located, in the same manner as contempt of the
district court;
(18) appoint and employ additional help, purchase supplies
or materials, or incur other expenditures in the enforcement of
state tax laws as considered necessary. The salaries of all
agents and employees provided for in this chapter shall be fixed
by the appointing authority, subject to the approval of the
commissioner of administration;
(19) execute and administer any agreement with the
secretary of the treasury of the United States or a
representative of another state regarding the exchange of
information and administration of the tax laws;
(20) administer and enforce the provisions of sections
325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act;
(21) authorize the use of unmarked motor vehicles to
conduct seizures or criminal investigations pursuant to the
commissioner's authority; and
(22) (21) exercise other powers and perform other duties
required of or imposed upon the commissioner of revenue by law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2000, section 270.07,
subdivision 3, is amended to read:
Subd. 3. [ADDITIONAL POWERS OF COMMISSIONER.]
Notwithstanding any other provision of law the commissioner of
revenue may,
(a) based upon the administrative costs of processing,
determine minimum standards for the determination of additional
tax for which an order shall be issued, and
(b) based upon collection costs as compared to the amount
of tax involved, determine minimum standards of collection, and
(c) based upon the administrative costs of processing,
determine the minimum amount of refunds for which an order shall
be issued and refund made where no claim therefor has been
filed, and
(d) cancel any amounts below these minimum standards
determined under (a) and (b) hereof, and
(e) based upon the inability of a taxpayer to pay a
delinquent tax liability, abate the liability if the taxpayer
agrees to perform uncompensated public service work for a state
agency, a political subdivision or public corporation of this
state, or a nonprofit educational, medical, or social service
agency. The department of corrections shall administer the work
program. No benefits under chapter 176 or 268 shall be
available, but a claim authorized under section 3.739 may be
made by the taxpayer. The state may not enter into any
agreement that has the purpose of or results in the displacement
of public employees by a delinquent taxpayer under this
section. The state must certify to the appropriate bargaining
agent or employees, as applicable, that the work performed by a
delinquent taxpayer will not result in the displacement of
currently employed workers or layoff from a substantially
equivalent position, including partial displacement such as
reduction in hours of nonovertime work, wages, or other
employment benefits, and
(f) based on a showing of reasonable cause reissue an
uncashed rebate or property tax refund warrant or check that has
lapsed under any provision of law relating to rebates or under
section 290A.18, subdivision 2. The authority to reissue
warrants or checks under this paragraph is limited to five years
after the date of issuance of the original warrant or check.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2000, section 270.07, is
amended by adding a subdivision to read:
Subd. 3a. [APPROPRIATION.] An amount sufficient for the
reissuance of rebate warrants authorized under this section is
appropriated to the commissioner from the general fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 8. [270.277] [NOTICES TO HOLDERS OF POWERS OF
ATTORNEY.]
If a taxpayer has executed a written power of attorney, in
a form prescribed by the commissioner, the commissioner shall
allow the taxpayer to elect, in writing, that all notices and
correspondence between the department of revenue and the
taxpayer will be sent to the holder of the power of attorney.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 9. [270.691] [PUBLICATION OF NAMES OF DELINQUENT
TAXPAYERS.]
Subdivision 1. [COMMISSIONER MAY PUBLISH.] (a)
Notwithstanding any other law, the commissioner may publish a
list or lists of taxpayers who owe delinquent taxes or fees
administered by the commissioner, and who meet the requirements
of paragraph (b).
(b) For purposes of this section, a taxpayer may be
included on a list if:
(1) the taxes or fees owed remain unpaid at least 180 days
after the dates they were due;
(2) the taxpayer's total liability for the taxes and fees,
including penalties, interest, and other charges, is at least
$5,000; and
(3) a tax lien has been filed or a judgment for the
liability has been entered against the taxpayer before notice is
given under subdivision 3.
(c) In the case of listed taxpayers that are business
entities, the commissioner may also list the names of
responsible persons assessed pursuant to section 270.101 for
listed liabilities, who are not protected from publication by
subdivision 2, and for whom the requirements of paragraph (b)
are satisfied with regard to the personal assessment.
(d) Before any list is published under this section, the
commissioner of revenue must certify in writing that each of the
conditions for publication as provided in this section has been
satisfied, and that procedures were followed to ensure the
accuracy of the list and notice was given to the affected
taxpayers.
Subd. 2. [REQUIRED AND EXCLUDED TAXPAYERS.] (a) The
commissioner may publish lists of some or all of the taxpayers
described in subdivision 1. A list must include the taxpayers
with the largest unpaid liabilities of the kind used to define
the list, subject to the limitations of paragraphs (b) and (c).
(b) For the purposes of this section, a tax or fee is not
delinquent if:
(1) an administrative or court action contesting the amount
or validity of the taxpayer's liability has been filed or served
and is unresolved at the time when notice would be given under
subdivision 3;
(2) an appeal period to contest the liability has not
expired; or
(3) the liability is subject to a payment agreement and
there is no delinquency in the payments required under the
agreement.
(c) Unpaid liabilities are not subject to publication if:
(1) the commissioner is in the process of reviewing or
adjusting the liability;
(2) the taxpayer is a debtor in a bankruptcy proceeding and
the automatic stay is in effect;
(3) the commissioner has been notified that the taxpayer is
deceased; or
(4) the time period for collecting the taxes or fees has
expired.
Subd. 3. [NOTICE TO TAXPAYER.] (a) At least 30 days before
publishing the name of a delinquent taxpayer, the commissioner
shall mail a written notice to the taxpayer, detailing the
amount and nature of each liability and the intended publication
of the information listed in subdivision 4 related to the
liability. The notice must be mailed by first class and
certified mail addressed to the last known address of the
taxpayer. The notice must include information regarding the
exceptions listed in subdivision 2 and must state that the
taxpayer's information will not be published if the taxpayer
pays the delinquent obligation, enters into an agreement to pay,
or provides information establishing that subdivision 2
prohibits publication of the taxpayer's name.
(b) After at least 30 days has elapsed since the notice was
mailed and the delinquent tax or fee has not been paid and the
taxpayer has not proved to the commissioner that subdivision 2
prohibits publication, the commissioner may publish in a list of
delinquent taxpayers the information about the taxpayer that is
listed in subdivision 4.
Subd. 4. [FORM OF LIST.] The list may be published by any
medium or method. The list must contain the name, address, type
of tax or fee, and period for which payment is due for each
liability, including penalties, interest, and other charges owed
by each listed delinquent taxpayer.
Subd. 5. [REMOVAL FROM LIST.] The commissioner shall
remove the name of a taxpayer from the list of delinquent
taxpayers after the commissioner receives written notice of and
verifies any of the following facts about the liability in
question:
(1) the taxpayer has contacted the commissioner and
arranged resolution of the liability;
(2) an active bankruptcy proceeding has been initiated for
the liability;
(3) a bankruptcy proceeding concerning the liability has
resulted in discharge of the liability; or
(4) the commissioner has written off the liability.
Subd. 6. [NAMES PUBLISHED IN ERROR.] If the commissioner
publishes a name under subdivision 1 in error, the taxpayer
whose name was erroneously published has a right to request a
retraction and apology. If the taxpayer so requests, the
commissioner shall publish a retraction and apology
acknowledging that the taxpayer's name was published in error.
The retraction and apology must appear in the same medium and
the same format as the original list that contained the name
listed in error.
Subd. 7. [PAYMENT OF DAMAGES.] Actions against the
commissioner of revenue or the state of Minnesota arising out of
the implementation of this program must be brought under section
270.276. If an action results in damages awarded to a taxpayer,
the damages must be paid out of the department of revenue
operating budget rather than in accordance with section 3.736,
subdivision 7.
Subd. 8. [EXPIRATION DATE.] The program authorized under
this section terminates on June 30, 2002.
[EFFECTIVE DATE.] This section is effective the day
following final enactment for all liabilities owing on that date
for which the statute of limitations for collection has not
expired, and all liabilities arising after that date.
Sec. 10. Minnesota Statutes 2000, section 297F.04,
subdivision 1, is amended to read:
Subdivision 1. [POWERS OF COMMISSIONER.] The commissioner
may revoke or suspend the license or licenses of any distributor
or subjobber for violation of this chapter, any other act
applicable to the sale of cigarettes or tobacco products, or any
rule promulgated by the commissioner, in furtherance of this
chapter. The commissioner may also revoke, cancel, or suspend
the license or licenses of any distributor or subjobber for
violation of sections 325D.30 to 325D.42.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. Minnesota Statutes 2000, 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 retailer and subjobber shall preserve a legible copy of
each invoice for one year from the date of 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 the day
following final enactment.
Sec. 12. Minnesota Statutes 2000, section 325D.33, is
amended by adding a subdivision to read:
Subd. 2a. [COMMISSIONER.] "Commissioner" means the
commissioner of commerce or the commissioner's designated
representative.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. Minnesota Statutes 2000, section 325D.33,
subdivision 8, is amended to read:
Subd. 8. [PENALTIES.] (a) A retailer who sells cigarettes
for less than a legal retail price may be assessed a penalty in
the full amount of three times the difference between the actual
selling price and a legal price under sections 325D.30 to
325D.42. This penalty may be collected by the commissioner
under the authorities given the commissioner of revenue in
chapters chapter 270 and 297F, and the penalty shall bear
interest at the rate prescribed by section 270.75, subdivision 5.
(b) A wholesaler who sells cigarettes for less than a legal
price may be assessed a penalty in the full amount of three
times the difference between the actual selling price and the
legal price under sections 325D.30 to 325D.42. This penalty may
be collected by the commissioner under the authorities given the
commissioner of revenue in chapters chapter 270 and 297F, and
the penalty shall bear interest at the rate prescribed by
section 270.75, subdivision 5.
(c) A retailer who engages in a plan, scheme, or device
with a wholesaler to purchase cigarettes at a price which the
retailer knows to be less than a legal price may be assessed a
penalty in the full amount of three times the difference between
the actual purchase price and the legal price under sections
325D.30 to 325D.42. A retailer that coerces or requires a
wholesaler to sell cigarettes at a price which the retailer
knows to be less than a legal price may be assessed a penalty in
the full amount of three times the difference between the actual
purchase price and the legal price. These penalties may be
collected by the commissioner under the authorities given the
commissioner of revenue in chapters chapter 270 and 297F, and
the penalties shall bear interest at the rate prescribed by
section 270.75, subdivision 5.
For purposes of this subdivision, a retailer is presumed to
know that a purchase price is less than a legal price if any of
the following have been done:
(1) the commissioner has published the legal price in the
Minnesota State Register;
(2) the commissioner has provided written notice to the
retailer of the legal price;
(3) the commissioner has provided written notice to the
retailer that the retailer is purchasing cigarettes for less
than a legal price;
(4) the commissioner has issued a written order to the
retailer to cease and desist from purchases of cigarettes for
less than a legal price; or
(5) there is evidence that the retailer has knowledge of,
or has participated in, efforts to disguise or misrepresent the
actual purchase price as equal to or more than a legal price,
when it is actually less than a legal price.
In any proceeding arising under this subdivision, the
commissioner shall have the burden of providing by a reasonable
preponderance of the evidence that the facts necessary to
establish the presumption set forth in this section exist, or
that the retailer had knowledge that a purchase price was less
than the legal price.
(d) The commissioner may not assess penalties against any
wholesaler, retailer, or combination of wholesaler and retailer,
which are greater than three times the difference between the
actual price and the legal price under sections 325D.30 to
325D.42.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. Minnesota Statutes 2000, section 325D.405, is
amended to read:
325D.405 [INVESTIGATIONS.]
The commissioner or duly authorized agents may conduct
investigations to determine compliance with the provisions of
sections 325D.30 to 325D.42 and, in connection with such
investigations, the commissioner and duly authorized agents have
all the powers conferred upon the commissioner by section 270.06
45.027.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. Minnesota Statutes 2000, section 325D.415, is
amended to read:
325D.415 [CIGARETTE DISTRIBUTOR FEES.]
A cigarette distributor as defined in section 297F.01,
subdivision 4, shall pay to the commissioner an annual fee as
follows:
(1) a fee of $2,500 is due from those distributors whose
annual cigarette tax collections exceed $2,000,000; and
(2) a fee of $1,200 is due from those distributors whose
annual cigarette tax collections are $2,000,000 or less.
The annual fee must be paid by December 31 of each year.
If the fee is not paid when due, the commissioner shall revoke
or refuse to issue or renew the license under chapter 297F. The
annual fee must be deposited into the general fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. Minnesota Statutes 2000, section 345.41, is
amended to read:
345.41 [REPORT OF ABANDONED PROPERTY.]
(a) Every person holding funds or other property, tangible
or intangible, presumed abandoned under sections 345.31 to
345.60 shall report annually to the commissioner with respect to
the property as hereinafter provided.
(b) The report shall be verified and shall include:
(1) except with respect to traveler's checks and money
orders, the name, if known, and last known address, if any, of
each person appearing from the records of the holder to be the
owner of any property of the value of $100 or more presumed
abandoned under sections 345.31 to 345.60;
(2) in case of unclaimed funds of life insurance
corporations, the full name of the policyholder, insured or
annuitant and that person's last known address according to the
life insurance corporation's records;
(3) the nature and identifying number, if any, or
description of the property and the amount appearing from the
records to be due, except that items of value under $100 each
may be reported in aggregate;
(4) the date when the property became payable, demandable
or returnable, and the date of the last transaction with the
owner with respect to the property; and
(5) other information which the commissioner prescribes by
rule as necessary for the administration of sections 345.31 to
345.60.
(c) If the person holding property presumed abandoned is a
successor to other persons who previously held the property for
the owner, or if the holder has changed a name while holding the
property, the holder shall file with the report all prior known
names and addresses of each holder of the property.
(d) The report shall be filed before November 1 of each
year as of June 30 next preceding, but the report of life
insurance corporations shall be filed before October 1 of each
year as of December 31 next preceding. The commissioner may
postpone the reporting date upon written request by any person
required to file a report.
(e) Not more than 120 days before filing the report
required by this section, the holder in possession of property
abandoned and subject to custody as unclaimed property under
this chapter shall send written notice to the presumed owner at
that owner's last known address informing the owner that the
holder is in possession of property subject to this chapter and
advising the owner of the steps necessary to prevent abandonment
if:
(1) the holder has in its records an address for the
presumed owner that the holder's records do not disclose to be
inaccurate;
(2) the claim of the apparent owner is not barred by the
statute of limitations; and
(3) the property has a value of $100 or more.
(f) Verification, if made by a partnership, shall be
executed by a partner; if made by an unincorporated association
or private corporation, by an officer, and if made by a public
corporation, by its chief fiscal officer.
(g) Holders of property described in section 345.32 shall
not impose any charges against property which is described in
section 345.32, clause (a), (b) or (c).
(h) Any person who has possession of property which the
person has reason to believe will be reportable in the future as
unclaimed property may, with the permission of the commissioner,
report and deliver such property prior to the date required for
reporting in accordance with this section.
(i) Before the last day of each calendar year, the
commissioner of revenue shall report to the commissioner as
unclaimed property under this section any uncashed checks or
warrants for overpayments of taxes that were issued more than
two years preceding the date of the report.
[EFFECTIVE DATE.] This section is effective August 1, 2001.
Sec. 17. [471.6995] [EXTENSION OF FINANCIAL REPORT FILING
TIME LIMITS; DISASTER AREAS.]
The time limit by which financial reports are required to
be filed under section 471.697 or 471.698, is extended by 90
days for any city or town located in whole or in part within a
presidentially declared disaster area, if the time period for
which the area is so designated includes at least one of the 30
days immediately preceding the time limit.
[EFFECTIVE DATE.] This section is effective for disaster
declarations made after April 15, 2001.
Sec. 18. Minnesota Statutes 2000, section 609.75,
subdivision 1, is amended to read:
Subdivision 1. [LOTTERY.] (a) A lottery is a plan which
provides for the distribution of money, property or other reward
or benefit to persons selected by chance from among participants
some or all of whom have given a consideration for the chance of
being selected. A participant's payment for use of a 900
telephone number or another means of communication that results
in payment to the sponsor of the plan constitutes consideration
under this paragraph.
(b) An in-package chance promotion is not a lottery if all
of the following are met:
(1) participation is available, free and without purchase
of the package, from the retailer or by mail or toll-free
telephone request to the sponsor for entry or for a game piece;
(2) the label of the promotional package and any related
advertising clearly states any method of participation and the
scheduled termination date of the promotion;
(3) the sponsor on request provides a retailer with a
supply of entry forms or game pieces adequate to permit free
participation in the promotion by the retailer's customers;
(4) the sponsor does not misrepresent a participant's
chances of winning any prize;
(5) the sponsor randomly distributes all game pieces and
maintains records of random distribution for at least one year
after the termination date of the promotion;
(6) all prizes are randomly awarded if game pieces are not
used in the promotion; and
(7) the sponsor provides on request of a state agency a
record of the names and addresses of all winners of prizes
valued at $100 or more, if the request is made within one year
after the termination date of the promotion.
(c) Except as provided by section 349.40, acts in this
state in furtherance of a lottery conducted outside of this
state are included notwithstanding its validity where conducted.
(d) The distribution of property, or other reward or
benefit by an employer to persons selected by chance from among
participants who have made a contribution through a payroll or
pension deduction campaign to a registered combined charitable
organization, within the meaning of section 309.501, as a
precondition to the chance of being selected, is not a lottery
if:
(1) all of the persons eligible to be selected are employed
by or retirees of the employer; and
(2) the cost of the property or other reward or benefit
distributed and all costs associated with the distribution are
borne by the employer; and
(3) the total amount actually expended by the employer to
obtain the property or other rewards or benefits distributed by
the employer during the calendar year does not exceed $500.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 19. Laws 1998, chapter 389, article 16, section 35,
subdivision 1, is amended to read:
Subdivision 1. [BAT STUDY.] $100,000 is appropriated from
the general fund for fiscal year 1999 to the legislative
coordinating commission to study alternative methods of taxing
business. The appropriations under this section and under Laws
1997, chapter 231, article 5, section 18, subdivision 3, are
available in fiscal years 2000 and 2001. Any portion of this
appropriation that cancels in 2001 is appropriated in 2002 and
is available until June 30, 2003.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 20. Laws 2000, chapter 479, article 2, section 1, is
amended to read:
Section 1. [PROHIBITION AGAINST APPROPRIATIONS FROM TRUNK
HIGHWAY FUND.]
To ensure compliance with the Minnesota Constitution,
article XIV, sections 2, 5, and 6, the commissioner of finance,
agency directors, and legislative commission personnel may not
include in the biennial budget for fiscal years 2002 and 2003,
or in any budget thereafter, expenditures from the trunk highway
fund for a nonhighway purpose as jointly determined by the
commissioner of finance and the attorney general. For purposes
of this section, an expenditure for a nonhighway purpose is any
expenditure not for construction, improvement, or maintenance of
highways, but does not include expenditures for payment of taxes
imposed under Minnesota Statutes, chapter 297A. At the time of
submission of the biennial budget proposal to the legislature,
the commissioner of finance and the attorney general shall
report to the senate and house of representatives transportation
committees concerning any expenditure that is proposed to be
appropriated from the trunk highway fund, if that expenditure is
similar to those reduced or eliminated in sections 5 to 20. The
report must explain the highway purpose of the proposed
expenditure.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 21. [TRANSFER OF RESPONSIBILITIES.]
Minnesota Statutes, section 15.039, subdivisions 1 to 6 and
8, apply to the transfer of responsibilities made by this
article. Consistent with Minnesota Statutes, section 15.039,
subdivision 6, the commissioner of finance shall transfer a
portion of the general fund appropriations in fiscal years 2002
and 2003 for the department of revenue to the department of
commerce for the enforcement and administration of Minnesota
Statutes, sections 325D.30 to 325D.42.
[EFFECTIVE DATE.] This section is effective following final
enactment.
Sec. 22. [BUDGET RESERVE INCREASE.]
The commissioner of finance shall transfer the amount
necessary to increase the budget reserve account in the general
fund to $653,000,000 on July 1, 2001. On July 1, 2003, the
commissioner of finance shall transfer $31,000,000 to the budget
reserve account in the general fund. The amounts necessary for
this purpose are appropriated from the general fund.
Sec. 23. [APPROPRIATION.]
$4,370,000 is appropriated to the commissioner of
transportation from the general fund for fiscal year 2002. This
appropriation is for sales tax on purchases made by the
commissioner.
[EFFECTIVE DATE.] This section is effective July 1, 2001.
Sec. 24. [REPEALER.]
(a) Minnesota Statutes 2000, section 16A.1521, is repealed
effective the day following final enactment.
(b) Minnesota Statutes 2000, section 325D.33, subdivision
5, is repealed effective the day following final enactment.
Sec. 25. [EFFECTIVE DATES.]
If a section in this act does not specify its effective
date, the section is effective July 1, 2001, unless the language
or context clearly indicates that a different effective date is
intended.
Presented to the governor June 29, 2001
Signed by the governor June 30, 2001, 12:15 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes