Office of the Revisor of Statutes
Minnesota Session Laws - 2002, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 377-H.F.No. 2498
An act relating to financing and operation of state
and local government; modifying provisions relating to
income, franchise, sales and use, property,
MinnesotaCare, gross receipts, liquor, insurance,
solid waste management, estate, minerals, and other
taxes, property tax refunds, tax liens, and tax
administration; imposing a wind energy production tax;
modifying property tax and other state aids and
credits; changing education aids and levies; modifying
tax court jurisdiction; authorizing local units of
government to levy, impose, or abate taxes, issue
debt, and exercise other powers; extending and
authorizing certain expenditures from the northeast
Minnesota economic protection trust fund; modifying
levy limits; providing powers to and imposing duties
on the commissioner of revenue and other officials;
clarifying utility rate reduction provisions mandated
by property tax reductions; modifying tax increment
financing and other economic development provisions;
providing a time limit for offset of federal tax
refunds; changing lawful purpose for purposes of
lawful gambling; providing for data privacy and
exchange of data; modifying certain debt limits;
repealing an annexation provision; making technical
corrections; providing for the transfer of funds;
providing for a budget reserve; appropriating money;
amending Minnesota Statutes 2000, sections 16A.152, by
adding a subdivision; 40A.151, subdivision 1; 40A.152,
subdivisions 1, 3; 69.77, by adding a subdivision;
126C.44; 168A.05, by adding subdivisions; 270.063,
subdivision 4; 270.60, subdivision 4; 270B.01,
subdivision 8; 270B.02, subdivision 4; 270B.14,
subdivision 8; 272.02, subdivision 15, by adding
subdivisions; 272.0212, subdivision 4; 273.125,
subdivisions 3, 4; 273.1398, subdivisions 1a, 2, 3;
278.01, subdivision 1; 279.01, subdivision 3; 289A.10,
subdivision 1; 289A.19, subdivision 1; 290.01,
subdivision 19a; 290.067, subdivisions 1, 2a; 290.081;
290.17, subdivisions 2, 3; 290.191, subdivision 4;
290A.03, subdivision 3; 291.03, subdivision 1; 295.53,
subdivision 1; 295.57, by adding a subdivision;
296A.18, subdivision 8; 297A.66, by adding a
subdivision; 297A.67, subdivision 5, by adding a
subdivision; 297A.68, by adding a subdivision;
297A.71, by adding subdivisions; 297A.96; 297G.07,
subdivision 1; 297H.06, subdivision 2; 297I.05,
subdivision 11; 298.27; 298.28, subdivisions 5, 9b,
11; 298.291; 469.1813, by adding a subdivision;
477A.011, subdivision 20; 477A.15; Minnesota Statutes
2001 Supplement, sections 69.021, subdivision 5;
124D.86, subdivision 3; 126C.17, subdivision 7a;
126C.21, subdivision 4; 126C.40, subdivision 1;
126C.43, subdivision 3; 126C.48, subdivision 8;
216B.1646; 270.69, subdivision 2; 270.691, subdivision
8; 270B.02, subdivision 3; 270B.08, subdivision 2;
271.01, subdivision 5; 271.21, subdivision 2; 272.02,
subdivision 22; 272.028; 273.121; 273.124, subdivision
11; 273.13, subdivisions 22, 24, 25; 273.1384,
subdivisions 1, 2; 273.1392; 273.1398, subdivisions
4c, 4d; 275.065, subdivision 3; 275.70, subdivision 5;
275.71, subdivisions 2, 3, 6; 275.74, subdivision 2;
276.04, subdivision 2; 289A.02, subdivision 7;
289A.20, subdivisions 2, 4; 289A.60, subdivision 2;
290.01, subdivisions 19, 19b, 19c, 19d, 31; 290.0675,
subdivisions 1, 3; 290.091, subdivision 2; 290.0921,
subdivisions 2, 3, 6; 290.21, subdivision 4; 290A.03,
subdivision 15; 290A.04, subdivision 2h; 291.005,
subdivision 1; 295.60, subdivisions 2, 7, by adding
subdivisions; 297A.61, subdivisions 3, 26, 31;
297A.66, subdivision 1; 297A.67, subdivisions 25, 29;
297A.68, subdivision 3; 297A.70, subdivisions 3, 10;
297A.71, subdivision 23; 297A.75; 297A.995,
subdivision 4; 298.01, subdivisions 3b, 4c; 298.225,
subdivision 1; 298.28, subdivisions 4, 6, 9a, 10;
298.296, subdivision 2; 349.12, subdivision 25;
469.1734, subdivision 6; 469.1763, subdivision 6;
469.1792, subdivision 1; 477A.011, subdivision 36;
477A.0123; 477A.013, subdivision 9; 477A.03,
subdivision 2; 477A.07, subdivisions 1, 2, 3; Laws
1990, chapter 604, article 6, section 9, subdivision
1, as amended; Laws 1993, chapter 375, article 5,
section 42; Laws 1995, chapter 264, article 5, section
45, subdivision 1, as amended; Laws 1998, chapter 389,
article 3, section 42; Laws 1998, chapter 389, article
8, section 37, subdivision 2; Laws 2001, First Special
Session chapter 5, article 9, section 3; Laws 2001,
First Special Session chapter 5, article 12, sections
11, 82, 95; Laws 2001, First Special Session chapter
6, article 1, section 53; Laws 2001, First Special
Session chapter 6, article 4, sections 25, 27,
subdivision 9; Laws 2001, First Special Session
chapter 6, article 5, section 12; proposing coding for
new law in Minnesota Statutes, chapters 126C; 272;
repealing Minnesota Statutes 2000, sections 272.02,
subdivision 40; 290.01, subdivisions 19g, 32;
290.0921, subdivision 5; 291.03, subdivision 2;
295.44; 297A.68, subdivision 26; Minnesota Statutes
2001 Supplement, sections 469.176, subdivision 1h;
Laws 2001, First Special Session chapter 5, article 3,
section 88; Minnesota Rules, parts 8130.1400;
8130.2100; 8130.2350; 8130.2600; 8130.3000; 8130.3850;
8130.5000.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
INCOME AND FRANCHISE TAXES
Section 1. Minnesota Statutes 2001 Supplement, 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) 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;
(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;
(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;
(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;
(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;
(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;
(15) the amount of any refund of environmental taxes paid
under section 59A of the Internal Revenue Code;
(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; and
(17) for a corporation whose foreign sales corporation, as
defined in section 922 of the Internal Revenue Code, constituted
a foreign operating corporation during the any taxable years
year ending during calendar year 1992 before January 1, 1995,
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. 2. Minnesota Statutes 2000, section 290.081, is
amended to read:
290.081 [INCOME OF NONRESIDENTS, RECIPROCITY.]
(a) The compensation received for the performance of
personal or professional services within this state by an
individual whose residence, place of abode, and place
customarily returned to at least once a month is in another
state, shall be excluded from gross income to the extent such
compensation is subject to an income tax imposed by the state of
residence; provided that such state allows a similar exclusion
of compensation received by residents of Minnesota for services
performed therein.
(b) When it is deemed to be in the best interests of the
people of this state, the commissioner may determine that the
provisions of clause paragraph (a) shall not apply. As long as
the provisions of clause paragraph (a) apply between Minnesota
and Wisconsin, the provisions of clause paragraph (a) shall
apply to any individual who is domiciled in Wisconsin.
(c) For the purposes of clause paragraph (a), whenever the
Wisconsin tax on Minnesota residents which would have been paid
Wisconsin without clause paragraph (a) exceeds the Minnesota tax
on Wisconsin residents which would have been paid Minnesota
without clause paragraph (a), or vice versa, then the state with
the net revenue loss resulting from clause paragraph (a) shall
receive from the other state the amount of such loss. This
provision shall be effective for all years beginning after
December 31, 1972. The data used for computing the loss to
either state shall be determined on or before September 30 of
the year following the close of the previous calendar year.
(d) Interest shall be is payable on all delinquent balances
amounts calculated under paragraph (c) relating to taxable years
beginning after December 31, 1977 December 31, 2000. Interest
accrues from July 1 of the taxable year. The commissioner of
revenue is authorized to enter into agreements with the state of
Wisconsin specifying the reciprocity payment due date,
conditions constituting delinquency, interest rates, and a
method for computing interest due on any delinquent amounts.
(e) If an agreement cannot be reached as to the amount of
the loss, the commissioner of revenue and the taxing official of
the state of Wisconsin shall each appoint a member of a board of
arbitration and these members shall appoint the third member of
the board. The board shall select one of its members as chair.
Such board may administer oaths, take testimony, subpoena
witnesses, and require their attendance, require the production
of books, papers and documents, and hold hearings at such places
as are deemed necessary. The board shall then make a
determination as to the amount to be paid the other state which
determination shall be final and conclusive.
(f) The commissioner may furnish copies of returns,
reports, or other information to the taxing official of the
state of Wisconsin, a member of the board of arbitration, or a
consultant under joint contract with the states of Minnesota and
Wisconsin for the purpose of making a determination as to the
amount to be paid the other state under the provisions of this
section. Prior to the release of any information under the
provisions of this section, the person to whom the information
is to be released shall sign an agreement which provides that
the person will protect the confidentiality of the returns and
information revealed thereby to the extent that it is protected
under the laws of the state of Minnesota.
[EFFECTIVE DATE.] This section is effective the day
following final enactment. Income tax reciprocity under
Minnesota Statutes, section 290.081, with the state of Wisconsin
is terminated effective for taxable years beginning after
December 31, 2002, unless the state of Wisconsin agrees, in
writing, by October 1, 2002, that interest will be included in
payments as required by this section, calculated from the date
specified under this section at a rate at least equal to the
rate under Minnesota Statutes, section 270.75, and beginning
with the payment due in December 2002. If income tax
reciprocity is terminated, the requirement under Minnesota
Statutes, section 136A.08, subdivision 3, that an income tax
reciprocity agreement be in effect as a condition for a higher
education reciprocity is suspended through the 2003-2004 school
year.
Sec. 3. Minnesota Statutes 2001 Supplement, 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:
(1) a deduction for dividends paid to or received from a
corporation which is subject to tax under section 290.36 and
which is a member of an affiliated group of corporations as
defined by the Internal Revenue Code; or
(2) a deduction for dividends received from a property and
casualty insurer as defined under section 60A.60, subdivision 8,
which is a member of an affiliated group of corporations as
defined by the Internal Revenue Code and either: (i) the
dividend is eliminated in consolidation under Treasury
Regulation 1.1502-14(a), as amended through December 31, 1989;
or (ii) the dividend is deducted under an election under section
243(b) of the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 4. Minnesota Statutes 2001 Supplement, 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:
(1) dividends paid to or received from a corporation which
is subject to tax under section 290.36 and which is a member of
an affiliated group of corporations as defined by the Internal
Revenue Code; or
(2) dividends received from a property and casualty insurer
as defined under section 60A.60, subdivision 8, which is a
member of an affiliated group of corporations as defined by the
Internal Revenue Code and either: (i) the dividend is
eliminated in consolidation under Treasury Regulation
1.1502-14(a), as amended through December 31, 1989; or (ii) the
dividend is deducted under an election under section 243(b) of
the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 5. Minnesota Statutes 2000, section 290.191,
subdivision 4, is amended to read:
Subd. 4. [APPORTIONMENT FORMULA FOR CERTAIN MAIL ORDER
BUSINESSES.] If the business of a corporation, partnership, or
proprietorship consists exclusively of the selling of tangible
personal property and services at retail, as defined in section
297A.61, subdivision 4, paragraph (a), in response to orders
received by United States mail, telephone, facsimile, or other
electronic media, and 99 percent of the taxpayer's property and
payroll is within Minnesota, then the taxpayer may apportion net
income to Minnesota based solely upon the percentage that the
sales made within this state in connection with its trade or
business during the tax period are of the total sales wherever
made in connection with the trade or business during the tax
period. Property and payroll factors are disregarded. In
determining eligibility for this subdivision:
(1) the sale not in the ordinary course of business of
tangible or intangible assets used in conducting business
activities must be disregarded; and
(2) property and payroll at a distribution center outside
of Minnesota are disregarded if the sole activity at the
distribution center is the filling of orders, and no
solicitation of orders occurs at the distribution center.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2001.
Sec. 6. Minnesota Statutes 2001 Supplement, 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 290.36 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; or
(iii) the remaining 20 percent of the dividends if the
dividends are received from a property and casualty insurer as
defined under section 60A.60, subdivision 8, which is a member
of an affiliated group of corporations as defined by the
Internal Revenue Code and either: (A) the dividend is
eliminated in consolidation under Treasury Regulation
1.1502-14(a), as amended through December 31, 1989; or (B) the
dividend 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 tax years
beginning after December 31, 2002.
ARTICLE 2
FEDERAL UPDATE
Section 1. Minnesota Statutes 2001 Supplement, section
289A.02, subdivision 7, is amended to read:
Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through June 15, 2001 March 15,
2002.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2001 Supplement, 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 Code of Federal Regulations, title 26,
section 31.6302-1, as amended through December 31, 2001, 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.
(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
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. 3. Minnesota Statutes 2001 Supplement, section
290.01, subdivision 19, is amended to read:
Subd. 19. [NET INCOME.] The term "net income" means the
federal taxable income, as defined in section 63 of the Internal
Revenue Code of 1986, as amended through the date named in this
subdivision, incorporating any elections made by the taxpayer in
accordance with the Internal Revenue Code in determining federal
taxable income for federal income tax purposes, and with the
modifications provided in subdivisions 19a to 19f.
In the case of a regulated investment company or a fund
thereof, as defined in section 851(a) or 851(g) of the Internal
Revenue Code, federal taxable income means investment company
taxable income as defined in section 852(b)(2) of the Internal
Revenue Code, except that:
(1) the exclusion of net capital gain provided in section
852(b)(2)(A) of the Internal Revenue Code does not apply;
(2) the deduction for dividends paid under section
852(b)(2)(D) of the Internal Revenue Code must be applied by
allowing a deduction for capital gain dividends and
exempt-interest dividends as defined in sections 852(b)(3)(C)
and 852(b)(5) of the Internal Revenue Code; and
(3) the deduction for dividends paid must also be applied
in the amount of any undistributed capital gains which the
regulated investment company elects to have treated as provided
in section 852(b)(3)(D) of the Internal Revenue Code.
The net income of a real estate investment trust as defined
and limited by section 856(a), (b), and (c) of the Internal
Revenue Code means the real estate investment trust taxable
income as defined in section 857(b)(2) of the Internal Revenue
Code.
The net income of a designated settlement fund as defined
in section 468B(d) of the Internal Revenue Code means the gross
income as defined in section 468B(b) of the Internal Revenue
Code.
The 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, 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, 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, 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, and the
provision of section 412 of the Job Creation and Worker
Assistance Act of 2002, Public Law Number 107-147, 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, and
provisions of sections 101 and 402 of the Job Creation and
Worker Assistance Act of 2002, Public Law Number 107-147, 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, the
provisions of sections 104, 105, and 111 of the Victims of
Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and
the provisions of sections 201, 403, 413, and 606 of the Job
Creation and Worker Assistance Act of 2002, Public Law Number
107-147, 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 March 15, 2002, shall be in effect for taxable years
beginning after December 31, 2001.
The provisions of sections 101 and 102 of the Victims of
Terrorism Tax Relief Act of 2001, Public Law Number 107-134,
shall become effective at the same time it becomes effective for
federal purposes.
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 19a, is amended to read:
Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For
individuals, estates, and trusts, there shall be added to
federal taxable income:
(1)(i) interest income on obligations of any state other
than Minnesota or a political or governmental subdivision,
municipality, or governmental agency or instrumentality of any
state other than Minnesota exempt from federal income taxes
under the Internal Revenue Code or any other federal statute,
and
(ii) exempt-interest dividends as defined in section
852(b)(5) of the Internal Revenue Code, except the portion of
the exempt-interest dividends derived from interest income on
obligations of the state of Minnesota or its political or
governmental subdivisions, municipalities, governmental agencies
or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to
all shareholders represents 95 percent or more of the
exempt-interest dividends that are paid by the regulated
investment company as defined in section 851(a) of the Internal
Revenue Code, or the fund of the regulated investment company as
defined in section 851(g) of the Internal Revenue Code, making
the payment; and
(iii) for the purposes of items (i) and (ii), interest on
obligations of an Indian tribal government described in section
7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe
is located;
(2) the amount of income taxes paid or accrued within the
taxable year under this chapter and income taxes paid to any
other state or to any province or territory of Canada, to the
extent allowed as a deduction under section 63(d) of the
Internal Revenue Code, but the addition may not be more than the
amount by which the itemized deductions as allowed under section
63(d) of the Internal Revenue Code exceeds the amount of the
standard deduction as defined in section 63(c) of the Internal
Revenue Code. For the purpose of this paragraph, the
disallowance of itemized deductions under section 68 of the
Internal Revenue Code of 1986, income tax is the last itemized
deduction disallowed;
(3) the capital gain amount of a lump sum distribution to
which the special tax under section 1122(h)(3)(B)(ii) of the Tax
Reform Act of 1986, Public Law Number 99-514, applies;
(4) the amount of income taxes paid or accrued within the
taxable year under this chapter and income taxes paid to any
other state or any province or territory of Canada, to the
extent allowed as a deduction in determining federal adjusted
gross income. For the purpose of this paragraph, income taxes
do not include the taxes imposed by sections 290.0922,
subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
(5) the amount of expense, interest, or taxes disallowed
pursuant to section 290.10; and
(6) the amount of a partner's pro rata share of net income
which does not flow through to the partner because the
partnership elected to pay the tax on the income under section
6242(a)(2) of the Internal Revenue Code; and
(7) 80 percent of the depreciation deduction allowed under
section 168(k) of the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
ending after September 10, 2001.
Sec. 5. Minnesota Statutes 2001 Supplement, section
290.01, subdivision 19b, is amended to read:
Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For
individuals, estates, and trusts, there shall be subtracted from
federal taxable income:
(1) interest income on obligations of any authority,
commission, or instrumentality of the United States to the
extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the
United States;
(2) if included in federal taxable income, the amount of
any overpayment of income tax to Minnesota or to any other
state, for any previous taxable year, whether the amount is
received as a refund or as a credit to another taxable year's
income tax liability;
(3) the amount paid to others, less the 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 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) (5) to the extent included in federal adjusted gross
income, income realized on disposition of property exempt from
tax under section 290.491;
(7) (6) 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);
(8) (7) the exemption amount allowed under Laws 1995,
chapter 255, article 3, section 2, subdivision 3;
(9) (8) 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;
(10) (9) 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;
(11) (10) 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) (11) 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; and
(12) in each of the five tax years immediately following
the tax year in which an addition is required under subdivision
19a, clause (7), an amount equal to one-fifth of the delayed
depreciation. For purposes of this clause, "delayed
depreciation" means the amount of the addition made by the
taxpayer under subdivision 19a, clause (7), minus the positive
value of any net operating loss under section 172 of the
Internal Revenue Code generated for the tax year of the
addition. The resulting delayed depreciation cannot be less
than zero.
[EFFECTIVE DATE.] This section is effective the day
following final enactment, except that clause (12) is effective
for tax years ending after September 10, 2001.
Sec. 6. Minnesota Statutes 2001 Supplement, section
290.01, subdivision 19c, is amended to read:
Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE
INCOME.] For corporations, there shall be added to federal
taxable income:
(1) the amount of any deduction taken for federal income
tax purposes for income, excise, or franchise taxes based on net
income or related minimum taxes, 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 exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal
Revenue Code;
(9) the amount of percentage depletion deducted under
sections 611 through 614 and 291 of the Internal Revenue Code;
(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;
(11) the amount of any deemed dividend from a foreign
operating corporation determined pursuant to section 290.17,
subdivision 4, paragraph (g);
(12) the amount of any environmental tax paid under section
59(a) of the Internal Revenue Code;
(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; and
(14) the amount of net income excluded under section 114 of
the Internal Revenue Code;
(15) any increase in subpart F income, as defined in
section 952(a) of the Internal Revenue Code, for the taxable
year when subpart F income is calculated without regard to the
provisions of section 614 of Public Law Number 107-147; and
(16) 80 percent of the depreciation deduction allowed under
section 168(k) of the Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
ending after September 10, 2001.
Sec. 7. Minnesota Statutes 2001 Supplement, 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) 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;
(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;
(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;
(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;
(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;
(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;
(15) the amount of any refund of environmental taxes paid
under section 59A of the Internal Revenue Code;
(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; and
(17) 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;
(18) any decrease in subpart F income, as defined in
section 952(a) of the Internal Revenue Code, for the taxable
year when subpart F income is calculated without regard to the
provisions of section 614 of Public Law Number 107-147; and
(19) in each of the five tax years immediately following
the tax year in which an addition is required under subdivision
19c, clause (16), an amount equal to one-fifth of the delayed
depreciation. For purposes of this clause, "delayed
depreciation" means the amount of the addition made by the
taxpayer under subdivision 19c, clause (16). The resulting
delayed depreciation cannot be less than zero.
[EFFECTIVE DATE.] This section is effective for tax years
ending after September 10, 2001.
Sec. 8. Minnesota Statutes 2001 Supplement, section
290.01, subdivision 31, is amended to read:
Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through June 15, 2001 March 15,
2002.
[EFFECTIVE DATE.] This section is effective at the same
time and in the same manner as the federal changes made by the
Victims of Terrorism Tax Relief Act of 2001, Public Law Number
107-134, and by the Job Creation and Worker Assistance Act of
2002, Public Law Number 107-147, become effective.
Sec. 9. Minnesota Statutes 2000, section 290.067,
subdivision 1, is amended to read:
Subdivision 1. [AMOUNT OF CREDIT.] (a) A taxpayer may take
as a credit against the tax due from the taxpayer and a spouse,
if any, under this chapter an amount equal to the dependent care
credit for which the taxpayer is eligible pursuant to the
provisions of section 21 of the Internal Revenue Code subject to
the limitations provided in subdivision 2 except that in
determining whether the child qualified as a dependent, income
received as a Minnesota family investment program grant or
allowance to or on behalf of the child must not be taken into
account in determining whether the child received more than half
of the child's support from the taxpayer, and the provisions of
section 32(b)(1)(D) of the Internal Revenue Code do not apply.
(b) If a child who has not attained the age of six years at
the close of the taxable year is cared for at a licensed family
day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child
is 16 months old or younger at the close of the taxable year,
the amount of expenses deemed to have been paid equals the
maximum limit for one qualified individual under section 21(c)
and (d) of the Internal Revenue Code. If the child is older
than 16 months of age but has not attained the age of six years
at the close of the taxable year, the amount of expenses deemed
to have been paid equals the amount the licensee would charge
for the care of a child of the same age for the same number of
hours of care.
(c) If a married couple:
(1) has a child who has not attained the age of one year at
the close of the taxable year;
(2) files a joint tax return for the taxable year; and
(3) does not participate in a dependent care assistance
program as defined in section 129 of the Internal Revenue Code,
in lieu of the actual employment related expenses paid for that
child under paragraph (a) or the deemed amount under paragraph
(b), the lesser of (i) the combined earned income of the couple
or (ii) $2,400 the amount of the maximum limit for one qualified
individual under section 21(c) and (d) of the Internal Revenue
Code will be deemed to be the employment related expense paid
for that child. The earned income limitation of section 21(d)
of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any
employment-related expenses have been paid.
(d) If the taxpayer is not required and does not file a
federal individual income tax return for the tax year, no credit
is allowed for any amount paid to any person unless:
(1) the name, address, and taxpayer identification number
of the person are included on the return claiming the credit; or
(2) if the person is an organization described in section
501(c)(3) of the Internal Revenue Code and exempt from tax under
section 501(a) of the Internal Revenue Code, the name and
address of the person are included on the return claiming the
credit.
In the case of a failure to provide the information required
under the preceding sentence, the preceding sentence does not
apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information required.
In the case of a nonresident, part-year resident, or a
person who has earned income not subject to tax under this
chapter, the credit determined under section 21 of the Internal
Revenue Code must be allocated based on the ratio by which the
earned income of the claimant and the claimant's spouse from
Minnesota sources bears to the total earned income of the
claimant and the claimant's spouse.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 10. Minnesota Statutes 2001 Supplement, section
290.091, subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by
this section, the following terms have the meanings given:
(a) "Alternative minimum taxable income" means the sum of
the following for the taxable year:
(1) the taxpayer's federal alternative minimum taxable
income as defined in section 55(b)(2) of the Internal Revenue
Code;
(2) the taxpayer's itemized deductions allowed in computing
federal alternative minimum taxable income, but excluding:
(i) the Minnesota charitable contribution deduction;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled
person; and
(v) holocaust victims' settlement payments to the extent
allowed under section 290.01, subdivision 19b;
(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); and
(6) the amount of addition required by section 290.01,
subdivision 19a, clause (7);
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, clause (4) (12).
In the case of an estate or trust, alternative minimum
taxable income must be computed as provided in section 59(c) of
the Internal Revenue Code.
(b) "Investment interest" means investment interest as
defined in section 163(d)(3) of the Internal Revenue Code.
(c) "Tentative minimum tax" equals 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 the day
following final enactment, except that clause (6) is effective
for tax years ending after September 10, 2001.
Sec. 11. Minnesota Statutes 2001 Supplement, 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 portion of the depreciation deduction allowed for
federal income tax purposes under section 168(k) of the Internal
Revenue Code that is required as an addition under section
290.01, subdivision 19c, clause (16), is disallowed in
determining alternative minimum taxable income.
(3) The subtraction for depreciation allowed under section
290.01, subdivision 19d, clause (19), is allowed as a
depreciation deduction in determining alternative minimum
taxable income.
(4) The alternative tax net operating loss deduction under
sections 56(a)(4) and 56(d) of the Internal Revenue Code does
not apply.
(3) (5) The special rule for certain dividends under
section 56(g)(4)(C)(ii) of the Internal Revenue Code does not
apply.
(4) (6) The special rule for dividends from section 936
companies under section 56(g)(4)(C)(iii) does not apply.
(5) (7) The tax preference for depletion under section
57(a)(1) of the Internal Revenue Code does not apply.
(6) (8) 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) (9) The tax preference for tax exempt interest under
section 57(a)(5) of the Internal Revenue Code does not apply.
(8) (10) The tax preference for charitable contributions of
appreciated property under section 57(a)(6) of the Internal
Revenue Code does not apply.
(9) (11) 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 2004.
(10) (12) 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) (13) 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 for tax years
ending after September 10, 2001.
Sec. 12. Minnesota Statutes 2001 Supplement, section
290A.03, subdivision 15, is amended to read:
Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code"
means the Internal Revenue Code of 1986, as amended through June
15, 2001 March 15, 2002.
[EFFECTIVE DATE.] This section is effective at the same
time and manner as the changes to federal adjusted gross income
made by the Victims of Terrorism Tax Relief Act of 2001, Public
Law Number 107-134, and by the Job Creation and Worker
Assistance Act of 2002, Public Law Number 107-147, become
effective.
ARTICLE 3
SALES AND USE TAXES
Section 1. Minnesota Statutes 2000, section 270.60,
subdivision 4, is amended to read:
Subd. 4. [PAYMENTS TO COUNTIES.] (a) The commissioner
shall pay to a county in which an Indian gaming casino is
located ten percent of the state share of all taxes generated
from activities on reservations and collected under a tax
agreement under this section with the tribal government for the
reservation located in the county. If the tribe has casinos
located in more than one county, the payment must be divided
equally among the counties in which the casinos are located.
(b) A county is a qualified county under this subdivision
if one of the following conditions is met:
(1) the county's per capita income is less than 80 percent
of the state per capita personal income, based on the most
recent estimates made by the United States Bureau of Economic
Analysis; or
(2) 30 percent or more of the total market value of real
property in the county is exempt from ad valorem taxation.
(c) The commissioner shall make the payments required under
this subdivision by February 28 of the year following the year
the taxes are collected.
(d) (c) An amount sufficient to make the payments
authorized by this subdivision, not to exceed $1,100,000 in any
fiscal year, is annually appropriated from the general fund to
the commissioner. If the authorized payments exceed the amount
of the appropriation, the commissioner shall first
proportionately reduce the payments to counties other than
qualified counties so that the total amount equals the
appropriation. If the authorized payments to qualified counties
also exceed the amount of the appropriation, the commissioner
shall then proportionately reduce the rate so that the total
amount to be paid to qualified counties equals the appropriation.
[EFFECTIVE DATE.] This section is effective for payments
made after December 31, 2002.
Sec. 2. Minnesota Statutes 2001 Supplement, section
289A.20, subdivision 4, is amended to read:
Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by
chapter 297A are due and payable to the commissioner monthly on
or before the 20th day of the month following the month in which
the taxable event occurred, or following another reporting
period as the commissioner prescribes or as allowed under
section 289A.18, subdivision 4, paragraph (f), except that use
taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the
close of the calendar year.
(b) 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 75 percent of the estimated June liability
to the commissioner.
(2) On or before August 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 on or before the 20th day of the month
following the month in which the taxable event occurred, or on
or before the 20th day of the month following the month in which
the sale is reported under section 289A.18, subdivision 4,
except for 62 75 percent of the estimated June liability, which
is due two business days before June 30. The remaining amount
of the June liability is due on August 20.
[EFFECTIVE DATE.] This section is effective for June 2002
and June 2003 tax liabilities.
Sec. 3. Minnesota Statutes 2001 Supplement, 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 preparing for a
consideration of food. Notwithstanding section 297A.67,
subdivision 2, taxable food includes, but is not limited to, the
following:
(1) prepared food sold by the retailer;
(2) soft drinks;
(3) candy; and
(4) all food sold through vending machines.
(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.
(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 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) delivery of aggregate materials and concrete block; and
(6) 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.
(j) A sale and a purchase includes the furnishing for a
consideration of installation if the installation charges would
be subject to the sales tax if the installation were provided by
the seller of the item being installed.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2002.
Sec. 4. Minnesota Statutes 2001 Supplement, section
297A.61, subdivision 31, is amended to read:
Subd. 31. [PREPARED FOOD.] "Prepared food" means (i) food
that meets either of the following conditions:
(1) the food is sold with eating utensils provided by the
seller, including plates, knives, forks, spoons, glasses, cups,
napkins, or straws; or
(2) the food is sold in a heated state or heated by the
seller; (ii) or two or more food ingredients are 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, except for:
(i) bakery items, including, but not limited to, bread,
rolls, buns, biscuits, bagels, croissants, pastries, donuts,
danish, cakes, tortes, pies, tarts, muffins, bars, cookies,
tortillas;
(ii) ready-to-eat meat and seafood in an unheated state
sold by weight;
(iii) eggs, fish, meat, poultry, and foods containing these
raw animal foods requiring cooking by the consumer as
recommended by the Food and Drug Administration in chapter 3,
part 401.11 of its food code so as to prevent food borne
illnesses; or
(iv) food that is only sliced, repackaged, or pasteurized
by the seller.
[EFFECTIVE DATE.] With the exception of clause (2), item
(ii), this section is effective for sales and purchases made
after June 30, 2002. Clause (2), item (ii), is effective for
sales and purchases made after June 30, 2002, and before January
1, 2006.
Sec. 5. Minnesota Statutes 2001 Supplement, section
297A.66, subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) To the extent allowed by
the United States Constitution and the laws of the United
States, "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 or an affiliate, an office, place of distribution,
sales or sample room or place, warehouse, or other place of
business; or
(2) having a representative, including, but not limited to,
an affiliate 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, affiliate, salesperson,
canvasser, or solicitor is located in the state permanently or
temporarily, or whether or not the retailer or, subsidiary, or
affiliate 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 or
a for-hire carrier.
[EFFECTIVE DATE.] (a) This section is effective the day
following final enactment and is intended to confirm the
original intent of the legislature in enacting Minnesota
Statutes, section 297A.66, and its predecessor provisions.
(b) A retailer may elect that the provisions of this
section apply only to sales it made after August 31, 2002, by
notifying the commissioner and by applying for a permit under
Minnesota Statutes, section 297A.84, by August 15, 2002, to
collect the tax imposed under Minnesota Statutes, chapter 297A.
A retailer qualifies under this paragraph only if it:
(1) did not maintain an office, place of distribution,
sales or sample room or place, warehouse, or other place of
business in Minnesota except through an affiliate or did not
have a representative, agent, salesperson, canvasser, or
solicitor in Minnesota except through an affiliate; and
(2) has not registered to collect tax under Minnesota
Statutes, chapter 297A, as of the date of enactment of this
section.
Sec. 6. Minnesota Statutes 2000, section 297A.66, is
amended by adding a subdivision to read:
Subd. 4. [AFFILIATED ENTITIES.] (a) An entity is an
"affiliate" of the retailer for purposes of subdivision 1,
paragraph (a), if:
(1) the entity uses its facilities or employees in this
state to advertise, promote, or facilitate the establishment or
maintenance of a market for sales of items by the retailer to
purchasers in this state or for the provision of services to the
retailer's purchasers in this state, such as accepting returns
of purchases for the retailer, providing assistance in resolving
customer complaints of the retailer, or providing other
services; and
(2) the retailer and the entity are related parties.
(b) Two entities are related parties under this section if
one of the entities meets at least one of the following tests
with respect to the other entity:
(1) one or both entities is a corporation, and one entity
and any party related to that entity in a manner that would
require an attribution of stock from the corporation to the
party or from the party to the corporation under the attribution
rules of section 318 of the Internal Revenue Code owns directly,
indirectly, beneficially, or constructively at least 50 percent
of the value of the corporation's outstanding stock;
(2) one or both entities is a partnership, estate, or trust
and any partner or beneficiary, and the partnership, estate, or
trust and its partners or beneficiaries own directly,
indirectly, beneficially, or constructively, in the aggregate,
at least 50 percent of the profits, capital, stock, or value of
the other entity or both entities; or
(3) an individual stockholder and the members of the
stockholder's family (as defined in section 318 of the Internal
Revenue Code) owns directly, indirectly, beneficially, or
constructively, in the aggregate, at least 50 percent of the
value of both entities' outstanding stock.
(c) An entity is an affiliate under the provisions of this
subdivision if the requirements of paragraphs (a) and (b) are
met during any part of the 12-month period ending on the first
day of the month before the month in which the sale was made.
[EFFECTIVE DATE.] (a) This section is effective the day
following final enactment and is intended to confirm the
original intent of the legislature in enacting Minnesota
Statutes, section 297A.66, and its predecessor provisions.
(b) A retailer may elect that the provisions of this
section apply only to sales it made after August 31, 2002, by
notifying the commissioner and by applying for a permit under
Minnesota Statutes, section 297A.84, by August 15, 2002, to
collect the tax imposed under Minnesota Statutes, chapter 297A.
A retailer qualifies under this paragraph only if it:
(1) did not maintain an office, place of distribution,
sales or sample room or place, warehouse, or other place of
business in Minnesota except through an affiliate or did not
have a representative, agent, salesperson, canvasser, or
solicitor in Minnesota except through an affiliate; and
(2) has not registered to collect tax under Minnesota
Statutes, chapter 297A, as of the date of enactment of this
section.
Sec. 7. Minnesota Statutes 2000, section 297A.67,
subdivision 5, is amended to read:
Subd. 5. [EXEMPT MEALS AT SCHOOLS.] Meals and lunches
served at public and private elementary, middle, or secondary
schools, universities, or colleges as defined in section 120A.05
are exempt. Meals and lunches served to students at a college,
university, or private career school under a board contract are
exempt. For purposes of this subdivision, "meals and lunches"
does not include sales from vending machines.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2002. However, for vending
machine contracts entered into by a school, as defined in
section 120A.05, prior to May 30, 2002, food sales from vending
machines continue to be exempt under this subdivision for one
year after the effective date of the contract.
Sec. 8. Minnesota Statutes 2000, section 297A.67, is
amended by adding a subdivision to read:
Subd. 13a. [INSTRUCTIONAL MATERIALS.] Instructional
materials, other than textbooks, that are prescribed for use in
conjunction with a course of study in a post-secondary school,
college, university, or private career school to students who
are regularly enrolled at such institutions are exempt. For
purposes of this subdivision, "instructional materials" means
materials required to be used directly in the completion of the
course of study, including, but not limited to, interactive CDs,
tapes, and computer software.
Instructional materials do not include general reference
works or other items incidental to the instructional process
such as pens, pencils, paper, folders, or computers. For
purposes of this subdivision, "school" and "private career
school" have the meanings given in subdivision 13.
[EFFECTIVE DATE.] This section is effective for sales after
June 30, 2003.
Sec. 9. Minnesota Statutes 2001 Supplement, 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 3, paragraph (g), clause (5) (6), item (vi), and
"cemetery" means a cemetery for human burial.
Sec. 10. Minnesota Statutes 2001 Supplement, section
297A.67, subdivision 29, is amended 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 propane gas or fuel oil water heater with an energy
factor of at least 0.62;
(4) a natural gas furnace with an annual fuel utilization
efficiency greater than 92 percent; and
(5) a propane gas or fuel oil 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 States 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 on or after the day following final enactment and
before August 1, 2005.
Sec. 11. Minnesota Statutes 2001 Supplement, 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 3,
paragraph (g), clause (5) (6), 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 if (i) it
is in excess of average climate control or lighting, and (ii) it
is necessary to produce that particular service.
(c) This exemption does not include machinery, equipment,
implements, tools, accessories, appliances, contrivances,
furniture, and fixtures used in providing the taxable service.
Sec. 12. Minnesota Statutes 2001 Supplement, section
297A.70, subdivision 10, is amended to read:
Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] (a) Tickets
or admissions to 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, and provided that each organization is either:
(1) an organization 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 sales made after July 31, 2001, and before July 1,
2002, for the organization's fiscal year completed in calendar
year 2000, three percent;
(ii) for sales made on or after July 1, 2002, and on or
before June 30, 2003, for the organization's fiscal year
completed in calendar year 2001, three percent;
(iii) for sales made on or after July 1, 2003, and on or
before June 30, 2004, for the organization's fiscal year
completed in calendar year 2002, four percent; and
(iv) for sales made in each 12-month period, beginning on
July 1, 2004, and each subsequent year, for the organization's
fiscal year completed in the preceding calendar year, five
percent; or
(2) a municipal board that promotes cultural and arts
activities; or
(3) the University of Minnesota, provided that the event is
held at a university-owned facility.
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 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.
Sec. 13. Minnesota Statutes 2001 Supplement, section
297A.71, subdivision 23, is amended to read:
Subd. 23. [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; or
(5) an owner entity, as defined in Code of Federal
Regulations, title 24, part 941.604, for a qualified low-income
housing project described in paragraph (b), clause (5).
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; or
(5) a housing or mixed use project in which all or a
portion of the residential units are subject to the requirements
of section 5 of the United States Housing Act of 1937.
(c) For a project, a portion of which is not used for
low-income housing units, the amount of purchases that are
exempt under this subdivision must be determined by multiplying
the total purchases, as specified in paragraph (a), by the ratio
of:
(1) the total gross square footage of units subject to the
income limits under section 273.126, the financing for the
project, the federal low-income housing tax credit, revenue
procedure 96-32, or section 5 of the United States Housing Act
of 1937, as applicable to the project; and
(2) the total gross square footage of all units in the
project.
(d) 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.
[EFFECTIVE DATE.] Paragraph (a), clause (5), and paragraph
(b), clause (5), are effective retroactive for sales and
purchases made after July 31, 2001. For sales and purchases
made after July 31, 2001, and before July 1, 2002, an owner
entity under this section must apply to the commissioner of
revenue for a refund of the tax paid on the exempt amount as
determined under this section. The rest of the section is
effective for sales made after June 30, 2002.
Sec. 14. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 28. [CONSTRUCTION MATERIALS AND EQUIPMENT;
REPLACEMENT AGRICULTURAL PROCESSING FACILITY.] Materials and
supplies used or consumed in, and machinery and equipment
incorporated into, the construction of a meat-packing or
meat-processing facility are exempt if:
(1) the cost of the project exceeds $75,000,000; and
(2) the facility replaces a facility that was destroyed by
fire.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after March 31, 2002, and before January 1, 2005.
Sec. 15. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 29. [HYDROELECTRIC GENERATING FACILITY.] Materials
and supplies used or consumed in the construction of a
hydroelectric generating facility that meets the requirements of
this subdivision are exempt. To qualify for the exemption under
this subdivision, a hydroelectric generating facility must:
(1) utilize two turbine generators at a dam site existing
on March 31, 1994;
(2) be located on publicly owned land and within 2,500 feet
of a 13.8 kilovolt distribution circuit; and
(3) be eligible to receive a renewable energy production
incentive payment under section 216C.41.
[EFFECTIVE DATE.] This section is effective for sales made
after August 31, 2002, and on or before December 31, 2003.
Sec. 16. Minnesota Statutes 2000, section 297A.71, is
amended by adding a subdivision to read:
Subd. 30. [NONPROFIT ARTS ORGANIZATION.] Materials,
equipment, and supplies incorporated into the construction or
renovation of a state bond financed facility funded in 2002
which is owned or operated by a nonprofit arts organization are
exempt.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made the day after final enactment and before July 1,
2007.
Sec. 17. Minnesota Statutes 2001 Supplement, 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;
(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; and
(9) materials and supplies for qualified low-income housing
under section 297A.71, subdivision 23.
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, 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; and
(5) for subdivision 1, clause (9), the owner of the
qualified low-income housing project.
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), (6),
(7), or (8), or (9), 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), (6), (7), and (8), and (9).
Subd. 5. [APPROPRIATION.] The amount required to make the
refunds is annually appropriated to the commissioner.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2002.
Sec. 18. Minnesota Statutes 2000, section 297A.96, is
amended to read:
297A.96 [LOCAL ADMISSIONS AND AMUSEMENT TAXES; EXEMPTION
FOR ARTS ORGANIZATIONS.]
If an event is sponsored by a nonprofit arts organization,
then Amounts charged for admission to the an event or to the
organization's premises described in section 297A.70,
subdivision 10, paragraph (a), are not subject to a tax imposed
by a local unit of government or imposed on sales taking place
in a single named local unit of government on sales of
admissions or amusements, under a law other than a general sales
tax law.
[EFFECTIVE DATE.] This section 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.
Sec. 19. Minnesota Statutes 2001 Supplement, section
297A.995, subdivision 4, is amended to read:
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 of revenue is further directed to
negotiate the agreement with the express intention of ensuring
uniform sales and use taxation as applied to like-kind
transactions.
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
following officials are authorized to represent this state
before the other states that are signatories to the agreement:
(1) the commissioner or the commissioner's designee;
(2) the chair of the house committee with jurisdiction over
taxes or the house chair's designee; and
(3) the chair of the senate committee with jurisdiction
over taxes or the senate chair's designee.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 20. Laws 1990, chapter 604, article 6, section 9,
subdivision 1, as amended by Laws 1991, chapter 291, article 8,
section 25, is amended to read:
Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota
Statutes, section 469.190, 477A.016, or other law, in addition
to the tax authorized in Laws 1986, chapter 391, section 4, the
governing body of the city of Bloomington may impose a tax of up
to one two percent on the gross receipts from the furnishing for
consideration of lodging at a hotel, motel, rooming house,
tourist court, or resort, other than the renting or leasing of
it for a continuous period of 30 days or more, located in the
city. The city may agree with the commissioner of revenue that
a tax imposed under this section shall be collected by the
commissioner together with the tax imposed by Minnesota
Statutes, chapter 297A, and subject to the same interest,
penalties, and other rules and that its proceeds, less the cost
of collection, shall be remitted to the city. The proceeds of
the tax must be used by the Bloomington convention bureau only
to market and promote the city as a tourist or convention
center. If the duties of the convention bureau as they existed
on January 1, 1991, are assigned to another agency, the tax
shall cease.
[EFFECTIVE DATE; LOCAL APPROVAL.] This section takes effect
the day after the governing body of the city of Bloomington
complies with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 21. Laws 1998, chapter 389, article 8, section 37,
subdivision 2, is amended to read:
Subd. 2. [APPOINTMENT OF MEMBERS.] The citizen review
panel must consist of 17 members, each of whom represents one of
the district councils consists of three residents from each of
the seven city council wards, for a total of 21 members. The
mayor must appoint the members, and the appointments are subject
to confirmation by a majority vote of the city council. Members
serve for a term of four years. Elected officials and employees
of the city are ineligible to serve as members of the panel.
[EFFECTIVE DATE.] This section is effective upon approval
by the governing body of the city of St. Paul and compliance
with Minnesota Statutes, section 645.021.
Sec. 22. Laws 2001, First Special Session chapter 5,
article 12, section 11, the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective January 1,
2002, however, for contracts entered into before January 1,
2002, the sale price for aggregate materials and concrete block
does not include delivery charges until January 1, 2005.
Sec. 23. Laws 2001, First Special Session chapter 5,
article 12, section 82, the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective January 1, 2003
for sales and purchases made after December 31, 2005.
Sec. 24. Laws 2001, First Special Session chapter 5,
article 12, section 95, is amended to read:
Sec. 95. [REPEALER.]
(a) Minnesota Statutes 2000, sections 297A.61, subdivision
16; 297A.68, subdivision 21; and 297A.71, subdivisions
subdivision 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 2004.
(e) Minnesota Statutes 2000, section 297A.71, subdivision
16, is repealed effective for sales and purchases occurring
after December 31, 2002.
[EFFECTIVE DATE.] Paragraph (d) is effective the day after
final enactment. Paragraphs (a) and (e) are effective for sales
and purchases made on or after June 30, 2001, for projects begun
prior to June 30, 2001.
Sec. 25. [ROCHESTER LODGING TAX.]
Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota
Statutes, section 469.190 or 477A.016, or any other law, the
city of Rochester may impose an additional tax of one percent on
the gross receipts from the furnishing for consideration of
lodging at a hotel, motel, rooming house, tourist court, or
resort, other than the renting or leasing of it for a continuous
period of 30 days or more.
Subd. 2. [DISPOSITION OF PROCEEDS.] The gross proceeds
from any tax imposed under subdivision 1 must be used by the
city to fund a local convention or tourism bureau for the
purpose of marketing and promoting the city as a tourist or
convention center.
[EFFECTIVE DATE.] This section is effective for lodging
furnished on or after July 1, 2002.
Sec. 26. [REPEALER.]
Minnesota Statutes 2000, section 297A.68, subdivision 26,
is repealed effective for sales and purchases made after June
30, 2002.
ARTICLE 4
PROPERTY TAXES
Section 1. Minnesota Statutes 2000, section 168A.05, is
amended by adding a subdivision to read:
Subd. 1a. [MANUFACTURED HOMES; PROPERTY TAXES MUST BE
PAID.] In the case of a manufactured home as defined in section
327.31, subdivision 6, the department shall not issue a
certificate of title unless the application under section
168A.04 is accompanied with a statement from the county auditor
or county treasurer where the manufactured home is presently
located, stating that all personal property taxes levied on the
unit that are due from the current owner at the time of transfer
for which the application applies, have been paid.
[EFFECTIVE DATE.] This section is effective for
certificates of title issued by the department on or after July
1, 2002.
Sec. 2. Minnesota Statutes 2000, section 168A.05, is
amended by adding a subdivision to read:
Subd. 1b. [EXEMPTION.] The provisions of subdivision 1a
shall not apply to: (i) a manufactured home which is sold or
otherwise disposed of pursuant to section 504B.271 by the owner
of a manufactured home park as defined in section 327.14,
subdivision 3, or (ii) a manufactured home which is sold
pursuant to section 504B.265 by the owner of a manufactured home
park.
[EFFECTIVE DATE.] This section is effective for
certificates of title issued by the department on or after July
1, 2002.
Sec. 3. Minnesota Statutes 2001 Supplement, section
216B.1646, is amended to read:
216B.1646 [RATE REDUCTION; PROPERTY TAX REDUCTION.]
(a) The commission shall, by any method the commission
finds appropriate, reduce the amounts rates each electric
utility subject to rate regulation by the commission charges its
customers to reflect, on an ongoing basis, 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 personal property tax reduction allocated to Minnesota
consumers retroactive to January 1, 2002, results in a dollar of
savings to the utility's customers. A utility may voluntarily
pass on any additional property tax savings in the same manner
as approved by the commission under this paragraph.
(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.
[EFFECTIVE DATE.] This section is effective retroactive to
July 1, 2001.
Sec. 4. Minnesota Statutes 2001 Supplement, 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; (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) only as provided in section 271.21, subdivision 2.
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 petitions
filed pertaining to the 2002 assessment, and thereafter.
Sec. 5. Minnesota Statutes 2001 Supplement, 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, only one parcel
is included in the petition, the entire parcel is classified as
homestead class 1a or 1b under section 273.13 and the parcel
contains no more than one dwelling unit;
(iii) the entire property is classified as agricultural
homestead class 2a or 1b under section 273.13; or
(iv) the assessor's estimated market value of the property
included in the petition is less than $100,000 $300,000; or
(b) any other case concerning the tax laws as defined in
section 271.01, subdivision 5, not involving valuation,
assessment, or taxation of real and personal property 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 petitions
filed pertaining to the 2002 assessment, and thereafter.
Sec. 6. Minnesota Statutes 2001 Supplement, 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. All real and personal
property of a wind energy conversion system as defined in
section 272.029, subdivision 2, is exempt from property tax
except that the land on which the property is located remains
taxable.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003 and thereafter.
Sec. 7. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 51. [ELECTRIC GENERATION FACILITY; PERSONAL
PROPERTY.] Notwithstanding subdivision 9, clause (a), attached
machinery and other personal property which is part of a
combined cycle natural gas turbine electric generation facility
of between 43 and 46 megawatts of installed capacity and that
meets the requirements of this subdivision is exempt. At the
time of construction, the facility must:
(1) utilize a combined cycle gas turbine generator fueled
by natural gas;
(2) be connected to an existing 115-kilovolt high-voltage
electric transmission line that is within one mile of the
facility;
(3) be located on an underground natural gas storage
aquifer;
(4) be designed as an intermediate load facility; and
(5) have received, by resolution, the approval from the
governing body of the county for the exemption of personal
property under this subdivision.
Construction of the facility must be commenced after
January 1, 2002, 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 2002 and thereafter.
Sec. 8. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 52. [ELECTRIC GENERATION FACILITY; PERSONAL
PROPERTY.] Notwithstanding subdivision 9, clause (a), attached
machinery and other personal property which is part of a
simple-cycle combustion-turbine electric generation facility of
more than 40 megawatts and less than 50 megawatts of installed
capacity and that meets the requirements of this subdivision is
exempt. At the time of construction, the facility must:
(1) utilize natural gas as a primary fuel;
(2) be located within two miles of parallel existing
36-inch natural gas pipelines and an existing 115-kilovolt
high-voltage electric transmission line;
(3) be designed to provide peaking, emergency backup, or
contingency services; and
(4) satisfy a resource deficiency identified in an approved
integrated resource plan filed under section 216B.2422.
Construction of the facility must be commenced after
January 1, 2001, and before January 1, 2005. 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 2002 and thereafter.
Sec. 9. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 53. [ELECTRIC GENERATION FACILITY; PERSONAL
PROPERTY.] Notwithstanding subdivision 9, clause (a), attached
machinery and other personal property which is part of a 3.2
megawatt run-of-the-river hydroelectric generation facility and
that meets the requirements of this subdivision is exempt. At
the time of construction, the facility must:
(1) utilize two turbine generators at a dam site existing
on March 31, 1994;
(2) be located on publicly owned land and within 1,500 feet
of a 13.8 kilovolt distribution substation; and
(3) be eligible to receive a renewable energy production
incentive payment under section 216C.41.
Construction of the facility must be commenced after
January 1, 2002, 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 2002 and thereafter.
Sec. 10. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 54. [SMALL BIOMASS ELECTRIC 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) have a generation capacity of less than 25 megawatts;
(2) provide process heating needs in addition to electrical
generation; and
(3) utilize agricultural by-products from the malting
process and other biomass fuels as its primary fuel source.
Construction of the facility must be commenced after
January 1, 2002, and before January 1, 2006. 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 2003 and thereafter.
Sec. 11. Minnesota Statutes 2000, section 272.02, is
amended by adding a subdivision to read:
Subd. 55. [ELECTRIC GENERATION 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 be sited on an energy park that (i) is located on
an active mining site, or on a former mining or industrial site
where mining or industrial operations have terminated, (ii) is
within a tax relief area as defined in section 273.134, (iii)
has on-site access to existing railroad infrastructure, (iv) has
direct rail access to a Great Lakes port, (v) has sufficient
private water resources on site, and (vi) is designed to host at
least 500 megawatts of electrical generation.
Construction of the first 250 megawatts of the facility
must be commenced after January 1, 2002, and before January 1,
2005. Construction of up to an additional 750 megawatts of
generation must be commenced before January 1, 2010. 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 2003 and thereafter.
Sec. 12. Minnesota Statutes 2001 Supplement, section
272.028, is amended to read:
272.028 [PAYMENT IN LIEU OF PERSONAL PROPERTY PRODUCTION
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), 272.029, subdivision 2,
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 wind energy production tax imposed under section
272.029. The in lieu payment is to provide fees or compensation
to the host jurisdictions to maintain public infrastructure and
services. A host jurisdiction includes a city or town and the
county in which a facility is located. The payment in lieu of
personal property the wind energy production 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 from the tax under section 272.029 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 under this section are in effect.
Sec. 13. [272.029] [WIND ENERGY PRODUCTION TAX.]
Subdivision 1. [PRODUCTION TAX.] A tax is imposed on the
production of electricity from a wind energy conversion system
installed after January 1, 1991, and used as an electric power
source.
Subd. 2. [DEFINITIONS.] (a) For the purposes of this
section, the term:
(1) "wind energy conversion system" has the meaning given
it in section 216C.06, subdivision 12;
(2) "large scale wind energy conversion system" means a
wind energy conversion system of more than 12 megawatts, as
measured by the nameplate capacity of the system or as combined
with other systems as provided in paragraph (b);
(3) "medium scale wind energy conversion system" means a
wind energy conversion system of over two and not more than 12
megawatts, as measured by the nameplate capacity of the system
or as combined with other systems as provided in paragraph (b);
and
(4) "small scale wind energy conversion system" means a
wind energy conversion system of two megawatts and under, as
measured by the nameplate capacity of the system or as combined
with other systems as provided in paragraph (b).
(b) For systems installed and contracted for after January
1, 2002, 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.
(c) In making a determination under paragraph (b), 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.
Subd. 3. [RATE OF TAX.] (a) The owner of a wind energy
conversion system shall pay a tax based on the following
schedule:
(1) for a large scale wind energy conversion system, .12
cents per kilowatt-hour of electricity produced by the system;
(2) for a medium scale wind energy conversion system, .036
cents per kilowatt-hour of electricity produced by the system;
and
(3) for a small scale wind energy conversion system of two
megawatts or less, but greater than .25 megawatts capacity, .012
cents per kilowatt-hour of electricity produced by the system.
(b) Small scale wind energy conversion systems with the
capacity of .25 megawatts or less, and small scale wind energy
conversion systems with a capacity of two megawatts or less that
are owned by a political subdivision, are exempt from the wind
energy production tax.
Subd. 4. [REPORTS.] (a) An owner of a wind energy
conversion system subject to tax under subdivision 3 shall file
a report with the commissioner of revenue annually on or before
March 1 detailing the amount of electricity in kilowatt-hours
that was produced by the wind energy conversion system for the
previous calendar year. The commissioner shall prescribe the
form of the report. The report must contain the information
required by the commissioner to determine the tax due to each
county under this section for the current year. If an owner of
a wind energy conversion system subject to taxation under this
section fails to file the report by the due date, the
commissioner of revenue shall determine the tax based upon the
nameplate capacity of the system multiplied by a capacity factor
of 40 percent.
(b) On or before March 31, the commissioner of revenue
shall notify the owner of the wind energy conversion systems of
the tax due to each county for the current year and shall
certify to the county auditor of each county in which the
systems are located the tax due from each owner for the current
year.
Subd. 5. [PAYMENT OF TAX; COLLECTION.] The amount of
production tax determined under subdivision 4 must be paid to
the county treasurer at the time and in the manner provided for
payment of property taxes under section 277.01, subdivision 3,
and, if unpaid, is subject to the same enforcement, collection,
and interest and penalties as delinquent personal property
taxes. Except to the extent inconsistent with this section, the
provisions of sections 277.01 to 277.24 and 278.01 to 278.13
apply to the taxes imposed under this section, and for purposes
of those provisions, the taxes imposed under this section are
considered personal property taxes.
Subd. 6. [DISTRIBUTION OF REVENUES.] Revenues from the
taxes imposed under subdivision 5 must be part of the settlement
between the county treasurer and the county auditor under
section 276.09. The revenue must be distributed by the county
auditor or the county treasurer to all taxing jurisdictions in
which the wind energy conversion system is located, in the same
proportion that each of the taxing jurisdiction's current year's
net tax capacity based tax rate is to the current year's total
net tax capacity based rate.
[EFFECTIVE DATE.] This section is effective for all energy
produced by wind energy conversion systems after December 31,
2002.
Sec. 14. Minnesota Statutes 2001 Supplement, section
273.124, subdivision 11, is amended to read:
Subd. 11. [LIMITATION ON HOMESTEAD REDUCTIONS
TREATMENT.] (a) For taxes payable in 2003 through 2005 only, if
the assessor has classified a property as both homestead and
nonhomestead, the greater of:
(1) the value attributable to the portion of the property
used as a homestead; or
(2) the homestead value amount determined under paragraph
(b), is entitled to assessment as a homestead under section
273.13, subdivision 22 or 23.
(b) For taxes payable in 2003 only, the homestead value
amount is $60,000. For taxes payable in 2004 only, the
homestead value amount is $45,000. For taxes payable in 2005
only, the homestead value amount is $30,000.
(c) 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.
Sec. 15. Minnesota Statutes 2000, section 273.125,
subdivision 3, is amended to read:
Subd. 3. [TAX STATEMENTS; PENALTIES; COLLECTIONS.] Not
later than July 15 in the year of assessment the county
treasurer shall mail to the taxpayer a statement of tax due on a
manufactured home. The taxes are due on the last day of August,
or 20 days after the postmark date on the envelope containing
the property tax statement, whichever is later, except that if
the tax exceeds $50, one-half of the amount due may be paid on
August 31, or 20 days after the postmark date on the envelope
containing the property tax statement, whichever is later, and
the remainder on November 15. Taxes remaining unpaid after the
due date are delinquent, and a penalty of eight percent must be
assessed and collected as part of the unpaid taxes. The tax
statement must contain a sentence notifying the taxpayer that
the title to the manufactured home cannot be transferred unless
the property taxes are paid.
[EFFECTIVE DATE.] This section is effective for tax
statements issued in 2003 and thereafter.
Sec. 16. Minnesota Statutes 2001 Supplement, 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 1a. In the
case of a duplex or triplex in which one of the units is used
for homestead purposes, the entire property is deemed to be used
for homestead purposes. The market value of class 1a property
must be determined based upon the value of the house, garage,
and land.
The first $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 $500,000 has a
class rate of 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 class rate using the rates for class 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, 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 2003 and subsequent years.
Sec. 17. Minnesota Statutes 2001 Supplement, section
273.13, subdivision 25, is amended to read:
Subd. 25. [CLASS 4.] (a) Class 4a is residential real
estate containing four or more units and used or held for use by
the owner or by the tenants or lessees of the owner as a
residence for rental periods of 30 days or more. Class 4a also
includes hospitals licensed under sections 144.50 to 144.56,
other than hospitals exempt under section 272.02, and contiguous
property used for hospital purposes, without regard to whether
the property has been platted or subdivided. The market value
of class 4a property has a class rate of 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
1.5 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 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; and
(8) residential real estate, a portion of which is used by
the owner for homestead purposes, and that is also a place of
lodging, if all of the following criteria are met:
(i) rooms are provided for rent to transient guests that
generally stay for periods of 14 or fewer days;
(ii) meals are provided to persons who rent rooms, the cost
of which is incorporated in the basic room rate;
(iii) meals are not provided to the general public except
for special events on fewer than seven days in the calendar year
preceding the year of the assessment; and
(iv) the owner is the operator of the property.
The market value subject to the 4c classification under this
clause is limited to five rental units. Any rental units on the
property in excess of five, must be valued and assessed as class
3a. The portion of the property used for purposes of a
homestead by the owner must be classified as class 1a property
under subdivision 22.
Class 4c property has a class rate of 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, (iii) 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, and (vi)
that portion of the market value of property in clause (8)
qualifying for class 4c property 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 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 assessment
year 2002 and thereafter, for taxes payable in 2003 and
thereafter.
Sec. 18. Minnesota Statutes 2001 Supplement, section
273.1384, subdivision 1, is amended to read:
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 0.4 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. In the case of a
property which is classified as part homestead and part
nonhomestead, the credit shall apply only to the homestead
portion of the property.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003 and subsequent years.
Sec. 19. Minnesota Statutes 2001 Supplement, section
273.1384, subdivision 2, is amended to read:
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
0.3 percent of the first $115,000 of the property's market
value. The credit under this subdivision is limited
to $230 $345 for each homestead. The credit is reduced by .05
percent of the market value in excess of $115,000, subject to a
maximum reduction of $115.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003 and thereafter.
Sec. 20. Minnesota Statutes 2000, section 273.1398,
subdivision 1a, is amended to read:
Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in
2000 2003, the tax base differential is:
(1) 0.45 percent of the assessment year 1998 taxable market
value of class 2a agricultural homestead property, excluding the
house, garage, and surrounding one acre of land, between
$115,000 and $600,000 and over 320 acres, minus the value over
$600,000 that is less than 320 acres 31 percent of the
assessment year 2000 net tax capacity of public utility property
reported by the county on the 2000 abstract of assessment as
public utility land and buildings valued up to $150,000; plus
(2) 0.5 percent of the assessment year 1998 taxable market
value of noncommercial seasonal recreational residential
property over $75,000 in value 34 percent of the assessment year
2000 net tax capacity of public utility property reported by the
county on the 2000 abstract of assessment as public utility land
and buildings valued over $150,000; plus
(3) for purposes of computing the fiscal disparity
adjustment only, 0.2 percent of the assessment year 1998 taxable
market value of class 3 commercial-industrial property over
$150,000 34 percent of the assessment year 2000 net tax capacity
of public utility property reported by the county on the 2000
abstract of assessment as public utility machinery, systems of
electric utilities-transmission, systems of electric
utilities-distribution, and systems of gas utilities.
(b) For the purposes of the distribution of homestead and
agricultural credit aid for aids payable in 2000, the
commissioner of revenue shall use the best information available
as of June 30, 1999, to make an estimate of the value described
in paragraph (a), clause (1). The commissioner shall adjust the
distribution of homestead and agricultural credit aid for aids
payable in 2001 and subsequent years if new information
regarding the value described in paragraph (a), clause (1),
becomes available after June 30, 1999 Notwithstanding the
computation in paragraph (a), the tax base differential shall be
zero in all counties in which the sum of the net tax capacities
of properties described in paragraph (a) does not exceed 40
percent of the total assessment year 2000 net tax capacity of
the county.
Sec. 21. Minnesota Statutes 2000, section 273.1398,
subdivision 2, is amended to read:
Subd. 2. [HOMESTEAD AND AGRICULTURAL CREDIT AID.] (a)
Homestead and agricultural credit aid for each unique taxing
jurisdiction equals the product of (1) the homestead and
agricultural credit aid base, and (2) the growth adjustment
factor, plus the net tax capacity adjustment and the fiscal
disparity adjustment.
(b) For the purposes of determining the net tax capacity
adjustment for aids payable in 2003, the "current local tax
rate" and the "previous net tax capacity" as defined under
subdivision 1 shall be determined using tax capacities and tax
rates in effect for taxes payable in 2001.
Sec. 22. Minnesota Statutes 2001 Supplement, section
275.065, subdivision 3, is amended to read:
Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The
county auditor shall prepare and the county treasurer shall
deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed
on the county's current year's assessment roll, a notice of
proposed property taxes.
(b) The commissioner of revenue shall prescribe the form of
the notice.
(c) The notice must inform taxpayers that it contains the
amount of property taxes each taxing authority proposes to
collect for taxes payable the following year. In the case of a
town, or in the case of the state determined portion of the
school district levy general tax, 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, and state determined school general tax, net of
the education residential and agricultural homestead credit
under section 273.1382 273.1384, 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.
If the county levy under clause (2) includes an amount for
a lake improvement district as defined under sections 103B.501
to 103B.581, the amount attributable for that purpose must be
separately stated from the remaining county levy amount.
In the case of a town or the state determined school
general 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 prepared in 2002, for taxes payable in
2003, and thereafter.
Sec. 23. Minnesota Statutes 2001 Supplement, section
276.04, subdivision 2, is amended to read:
Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer
shall provide for the printing of the tax statements. The
commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The statement must contain a
tabulated statement of the dollar amount due to each taxing
authority and the amount of the state tax from the parcel of
real property for which a particular tax statement is prepared.
The dollar amounts attributable to the county, the state 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. If the county levy under this paragraph includes an
amount for a lake improvement district as defined under sections
103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy
amount. 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.
(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 credits under section 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 for property
tax statements prepared in 2003 and thereafter.
Sec. 24. Laws 1998, chapter 389, article 3, section 42, is
amended to read:
Sec. 42. [TRANSFER OF PROPERTY; PAYMENT OF DEFERRED
TAXES.]
Subdivision 1. [ADDITIONAL TAX.] The assessor shall make a
separate determination of the market value and net tax capacity
of a property qualifying under section 38 as if sections 39 and
40 did not apply. The tax based upon the appropriate local tax
rate applicable to such property in the taxing district shall be
recorded on the property assessment records.
Subd. 2. [RECAPTURE.] (a) Property or any portion thereof
qualifying under section 38 is subject to additional taxes if:
(1) ownership of the property is transferred to anyone
other than the spouse or child of the current owner, or;
(2) the current owner or the spouse or child of the current
owner has not conveyed or entered into a contract before July 1,
2002 2007, to convey the property to a nonprofit foundation or
corporation created to own and operate operating the property as
an art park providing the services included in section 38,
clauses (2) to (5); or
(3) the nonprofit foundation or corporation to which the
property was transferred ceases to provide the services included
in section 38, clauses (2) to (5), earlier than ten years
following the effective date of the conveyance or of the
execution of the contract to convey.
(b) The additional taxes are imposed at the earlier of (1)
the year following transfer of ownership to anyone other than
the spouse or child of the current owner or a nonprofit
foundation or corporation created to own and operate operating
the property as an art park, or (2) for taxes payable in 2003
2008, or in the event the nonprofit foundation or corporation to
which the property was conveyed ceases to provide the required
services within ten years after the conveyance, for taxes
payable in the year following the year when it ceased to do so.
The additional taxes are equal to the difference between the
taxes determined under sections 39 and 40 and the amount
determined under subdivision 1 for all years that the property
qualified under section 38. The additional taxes must be
extended against the property on the tax list for the current
year; provided, however, that no interest or penalties may be
levied on the additional taxes if timely paid.
Subd. 3. [CURRENT OWNER.] For purposes of this section,
"current owner" means the owner of property qualifying under
section 38 on the date of final enactment of this act or that
owner's spouse or child.
Subd. 4. [NONPROFIT FOUNDATION OR CORPORATION.] For
purposes of this act, "nonprofit foundation or corporation"
means a nonprofit entity created to own and operate as defined
under section 501(c)(3) of the Internal Revenue Code that is
operating the property as an art park providing the services
included in section 38, clauses (2) to (5).
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 25. [COOK COUNTY; EXPENDITURE OF ROAD AND BRIDGE
LEVY.]
Notwithstanding Minnesota Statutes, section 163.06,
subdivisions 4 and 5, the county board of Cook county, by
resolution, may expend the proceeds of the levy under Minnesota
Statutes, section 163.06, in any organized or unorganized
township or portion thereof in the county.
[EFFECTIVE DATE.] This section is effective the day after
the governing body of Cook county and its chief clerical officer
timely complete their compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
Sec. 26. [REPEALER.]
Laws 2001, First Special Session chapter 5, article 3,
section 88, is repealed effective July 1, 2002.
ARTICLE 5
EDUCATION LEVIES AND REVENUES
Section 1. Minnesota Statutes 2001 Supplement, section
124D.86, subdivision 3, is amended to read:
Subd. 3. [INTEGRATION REVENUE.] Integration revenue equals
the following amounts:
(1) for independent school district No. 709, Duluth, $207
times the adjusted pupil units for the school year;
(2) for independent school district No. 625, St. Paul, and
for special school district No. 1, Minneapolis, $446 times the
adjusted pupil units for the school year;
(3) for special school district No. 1, Minneapolis, the sum
of $446 times the adjusted pupil units for the school year and
an additional $35 times the adjusted pupil units for the school
year that is provided entirely through a local levy;
(4) for a district not listed in clause (1) or, (2), or
(3), that must implement a plan under Minnesota Rules, parts
3535.0100 to 3535.0180, where the district's enrollment of
protected students, as defined under Minnesota Rules, part
3535.0110, exceeds 15 percent, the lesser of (i) the actual cost
of implementing the plan during the fiscal year minus the aid
received under subdivision 6, or (ii) $130 times the adjusted
pupil units for the school year;
(4) (5) for a district not listed in clause (1), (2),
or (3), or (4), that is required to implement a plan according
to the requirements of Minnesota Rules, parts 3535.0100 to
3535.0180, the lesser of
(i) the actual cost of implementing the plan during the
fiscal year minus the aid received under subdivision 6, or
(ii) $93 times the adjusted pupil units for the school year.
Any money received by districts in clauses (1) to (3) (4)
which exceeds the amount received in fiscal year 2000 shall be
subject to the budget requirements in subdivision 1a; and
(5) (6) for a member district of a multidistrict
integration collaborative that files a plan with the
commissioner, but is not contiguous to a racially isolated
district, integration revenue equals the amount defined in
clause (4) (5).
[EFFECTIVE DATE.] This section is effective the day
following final enactment for revenue for fiscal year 2003.
Sec. 2. Minnesota Statutes 2001 Supplement, section
126C.40, subdivision 1, is amended to read:
Subdivision 1. [TO LEASE BUILDING OR LAND.] (a) When a an
independent or a special school district or a group of
independent or special school districts finds it economically
advantageous to rent or lease a building or land for any
instructional purposes or for school storage or furniture
repair, and it determines that the operating capital revenue
authorized under section 126C.10, subdivision 13, is
insufficient for this purpose, it may apply to the commissioner
for permission to make an additional capital expenditure levy
for this purpose. An application for permission to levy under
this subdivision must contain financial justification for the
proposed levy, the terms and conditions of the proposed lease,
and a description of the space to be leased and its proposed use.
(b) The criteria for approval of applications to levy under
this subdivision must include: the reasonableness of the price,
the appropriateness of the space to the proposed activity, the
feasibility of transporting pupils to the leased building or
land, conformity of the lease to the laws and rules of the state
of Minnesota, and the appropriateness of the proposed lease to
the space needs and the financial condition of the district.
The commissioner must not authorize a levy under this
subdivision in an amount greater than the cost to the district
of renting or leasing a building or land for approved purposes.
The proceeds of this levy must not be used for custodial or
other maintenance services. A district may not levy under this
subdivision for the purpose of leasing or renting a
district-owned building or site to itself.
(c) For agreements finalized after July 1, 1997, a district
may not levy under this subdivision for the purpose of leasing:
(1) a newly constructed building used primarily for regular
kindergarten, elementary, or secondary instruction; or (2) a
newly constructed building addition or additions used primarily
for regular kindergarten, elementary, or secondary instruction
that contains more than 20 percent of the square footage of the
previously existing building.
(d) Notwithstanding paragraph (b), a district may levy
under this subdivision for the purpose of leasing or renting a
district-owned building or site to itself only if the amount is
needed by the district to make payments required by a lease
purchase agreement, installment purchase agreement, or other
deferred payments agreement authorized by law, and the levy
meets the requirements of paragraph (c). A levy authorized for
a district by the commissioner under this paragraph may be in
the amount needed by the district to make payments required by a
lease purchase agreement, installment purchase agreement, or
other deferred payments agreement authorized by law, provided
that any agreement include a provision giving the school
districts the right to terminate the agreement annually without
penalty.
(e) The total levy under this subdivision for a district
for any year must not exceed $100 times the resident pupil units
for the fiscal year to which the levy is attributable.
(f) For agreements for which a review and comment have been
submitted to the department of children, families, and learning
after April 1, 1998, the term "instructional purpose" as used in
this subdivision excludes expenditures on stadiums.
(g) The commissioner of children, families, and learning
may authorize a school district to exceed the limit in paragraph
(e) if the school district petitions the commissioner for
approval. The commissioner shall grant approval to a school
district to exceed the limit in paragraph (e) for not more than
five years if the district meets the following criteria:
(1) the school district has been experiencing pupil
enrollment growth in the preceding five years;
(2) the purpose of the increased levy is in the long-term
public interest;
(3) the purpose of the increased levy promotes colocation
of government services; and
(4) the purpose of the increased levy is in the long-term
interest of the district by avoiding over construction of school
facilities.
(h) A school district that is a member of an intermediate
school district may include in its authority under this section
the costs associated with leases of administrative and classroom
space for intermediate school district programs. This authority
must not exceed $25 times the adjusted marginal cost pupil units
of the member districts. This authority is in addition to any
other authority authorized under this section.
(i) In addition to the allowable capital levies in
paragraph (a), a district that is a member of the "Technology
and Information Education Systems" data processing joint board,
that finds it economically advantageous to enter into a lease
purchase agreement for a building for a group of school
districts or special school districts for staff development
purposes, may levy for its portion of lease costs attributed to
the district within the total levy limit in paragraph (e).
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003.
Sec. 3. Minnesota Statutes 2001 Supplement, section
126C.43, subdivision 3, is amended to read:
Subd. 3. [TAX LEVY FOR JUDGMENT.] A district may levy the
amounts necessary to pay judgments against the district under
section 123B.25 that became final after the date the district
certified its proposed levy in the previous year. With the
approval of the commissioner, a district may spread this levy
over a period not to exceed three years. Upon approval through
the adoption of a resolution by each of an intermediate
district's member school district boards, a member school
district may include its proportionate share of the costs of a
judgment against an intermediate school district that became
final under section 123B.25 after the date that the earliest
member school district certified its proposed levy in the
previous year. With the approval of the commissioner, an
intermediate school district member school district may spread
this levy over a period not to exceed three years.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003.
Sec. 4. Minnesota Statutes 2000, section 126C.44, is
amended to read:
126C.44 [CRIME-RELATED COSTS SAFE SCHOOLS LEVY.]
Each district may make a levy on all taxable property
located within the district for the purposes specified in this
section. The maximum amount which may be levied for all costs
under this section shall be equal to $11 $30 multiplied by the
district's adjusted marginal cost pupil units for the school
year. The proceeds of the levy must be used for directly
funding the following purposes or for reimbursing the cities and
counties who contract with the district for the following
purposes: (1) to pay the costs incurred for the salaries,
benefits, and transportation costs of peace officers and
sheriffs for liaison in services in the district's schools; (2)
to pay the costs for a drug abuse prevention program as defined
in section 609.101, subdivision 3, paragraph (e), in the
elementary schools; (3) to pay the costs for a gang resistance
education training curriculum in the district's schools; (4) to
pay the costs for security in the district's schools and on
school property; or (5) to pay the costs for other crime
prevention, drug abuse, student and staff safety, and violence
prevention measures taken by the school district. The district
must initially attempt to contract for services to be provided
by peace officers or sheriffs with the police department of each
city or the sheriff's department of the county within the
district containing the school receiving the services. If a
local police department or a county sheriff's department does
not wish to provide the necessary services, the district may
contract for these services with any other police or sheriff's
department located entirely or partially within the school
district's boundaries. The levy authorized under this section
is not included in determining the school district's levy
limitations.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003.
Sec. 5. Laws 2001, First Special Session chapter 6,
article 1, section 53, is amended to read:
Sec. 53. [REFERENDUM CONVERSION ADJUSTMENT FOR INTEREST
EARNED.]
(a) The commissioner of children, families, and learning
shall calculate the change in estimated net interest earnings
for each district attributable to the repeal of the general
education levy as provided in this section.
(b) The interest calculations must assume an annual
interest rate of five percent, and must be based on the amount
by which the district's cumulative net general education levy
receipts for taxes payable in 2000, based on the assumptions
specified in Minnesota Statutes, section 127A.45, subdivision 8,
exceeds the cumulative amount that would have been guaranteed
for each payment in fiscal year 2001, as defined in Minnesota
Statutes, section 127A.45, subdivisions 2 and 3, calculated
using data as of the June 20, 2001, payment, and assuming that
the repeal of the general education levy was effective for
fiscal year 2001. The commissioner shall divide the interest
revenue in fiscal year 2001 by the number of resident marginal
cost pupil units in fiscal year 2001. The interest calculations
must assume an annual interest rate of five percent, and must be
based on the difference between (1) the district's estimated aid
payments and levy receipts for fiscal year 2003, based upon the
payment schedule specified in Minnesota Statutes, section
127A.45, and (2) the amount that the district's estimated aid
payments and levy receipts for fiscal year 2003 would have been
had the general education levy for fiscal year 2003 been set at
the amount of the district's general education levy for taxes
payable in 2001. For the purposes of this section, the general
education levy must not include the education homestead credit
or the education agricultural credit.
(c) The amount calculated in paragraph (a) may be converted
to an additional referendum allowance according to Minnesota
Statutes, section 126C.17, subdivision 11. The amount
calculated in paragraph (b), less any interest conversion
revenue calculated for the district under Laws 2001, First
Special Session chapter 6, article 1, section 53, is added to
the district's levy limitation for taxes payable in 2003 through
2006.
(d) Any additional referendum allowance as a result of a
conversion under paragraph (b) shall be included in the
referendum conversion allowance used to determine the referendum
allowance limit under Minnesota Statutes, section 126C.17,
subdivision 2. If the state total levy under paragraph (c)
exceeds $3,000,000, the commissioner shall reduce the levy
authority proportionately for each eligible district such that
the state total levy equals $3,000,000.
(e) The commissioner must calculate an adjustment for taxes
payable in 2002 for each school district as though this section
were in effect for that tax year.
[EFFECTIVE DATE.] This section is effective for revenue for
taxes payable in 2003 and later.
Sec. 6. Laws 2001, First Special Session chapter 6,
article 4, section 25, is amended to read:
Sec. 25. [INTERACTIVE WEB-BASED AND INDEPENDENT STUDY
PROGRAMS.]
Subdivision 1. [PUPIL REVENUE.] (a) General education
revenue for an eligible pupil in an approved interactive
Web-based program offered by a school district or a charter
school, or an approved alternative program that has an
independent study component offered by a charter school, under
the supervision of a teacher with a Minnesota license, must be
paid for each hour of completed coursework needed for grade
progression, credit, or alignment with state graduation
standards. For purposes of this section, an eligible pupil is a
public school pupil concurrently enrolled in the district or
charter school or concurrently enrolled in another district or
charter school and participating in the program by agreement
with the district or charter school of enrollment. The course
of study must be approved by the commissioner of children,
families, and learning for alignment with the state graduation
standards and compliance with Minnesota Statutes, chapter 125A.
An alternative program that has an independent study component
must also meet the requirements of Minnesota Statutes, section
126C.05, subdivision 15, paragraph (b), clauses (i) and (iv).
Average daily membership for a pupil shall equal the number of
hours of coursework completed divided by the number of hours
required for a full-time student in the district or charter
school. Pupils enrolled in the program must not be counted as
more than 1.0 pupil in average daily membership. A school
district or charter school is not required to provide a pupil
enrolled in the program with access to a computer or to the
Internet.
(b) Notwithstanding paragraph (a), pupils enrolled in a
Web-based public alternative program approved by the
commissioner before June 1, 2001, are not required to be
concurrently enrolled in the district and may be counted as more
than 1.0 pupil in average daily membership under Minnesota
Statutes, section 126C.05, subdivision 15.
(c) Notwithstanding paragraph (a), pupils enrolled in a
charter school with a Web-based program, approved by the
commissioner before June 1, 2001, are not required to be
concurrently enrolled in the charter school.
(d) Notwithstanding paragraph (a), pupils enrolled in a
charter school with an alternative program that has an
independent study component, approved by the commissioner for
fiscal year 2001, may be counted as more than 1.0 pupil in
average daily membership under Minnesota Statutes, section
126C.05, subdivision 15, paragraph (b), clause (iii).
Subd. 2. [REIMBURSEMENT.] Notwithstanding Minnesota
Statutes, section 126C.19, subdivision 4, for fiscal year years
2002 and 2003 only, the commissioner shall establish a process
for providing additional revenue to school districts or charter
schools for:
(1) an eligible pupil in an approved interactive Web-based
program under subdivision 1, paragraph (a), that may be counted
as more than 1.0 pupil in average daily membership; or
(2) a nonpublic pupil in an approved interactive Web-based
program in a public school under subdivision 1, paragraph (a).
The commissioner may award additional general education revenue
to school districts and charter schools up to the amount
appropriated for this section. The amount of additional revenue
awarded to a school district under this section shall be based
on additional pupils in average daily membership that are
generated according to this subdivision with the prior approval
from the commissioner. The commissioner shall establish a
process to prioritize the awards under this subdivision based on
the estimated number of students the school district or charter
school expects to serve under this section.
[EFFECTIVE DATE.] This section is effective for revenue for
fiscal year 2003 only.
Sec. 7. Laws 2001, First Special Session chapter 6,
article 4, section 27, subdivision 9, is amended to read:
Subd. 9. [REIMBURSEMENT FOR WEB-BASED AND INDEPENDENT
STUDY COURSES.] For grants to school districts and charter
schools for additional pupils taking on-line courses according
to section 25:
$100,000 ..... 2002
This appropriation is available until June 30, 2003.
Sec. 8. [DISABLED ACCESS LEVY AUTHORITY; WESTBROOK-WALNUT
GROVE.]
Notwithstanding the time limit in Minnesota Statutes,
section 123B.58, subdivision 3, independent school district No.
2898, Westbrook-Walnut Grove, may levy its remaining disabled
access levy authority over five or fewer years.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 9. [DISABLED ACCESS LEVY AUTHORITY; PINE CITY.]
Notwithstanding the time limits in Minnesota Statutes,
section 123B.58, subdivision 3, independent school district No.
578, Pine City, may levy its remaining disabled access levy
authority over five or fewer years.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 6
AIDS AND LEVIES
Section 1. Minnesota Statutes 2000, section 69.77, is
amended by adding a subdivision to read:
Subd. 11a. [APPLICATION OF OTHER LAWS TO CONTRIBUTION
RATE.] In the absence of any specific provision to the contrary,
no general or special law previously enacted may be construed as
reducing the levy amount or rate of contribution to a police or
firefighters relief association to which subdivision 1a applies,
by a municipality or member of the association, which is
required as a condition for the use of public funds or the levy
of taxes for the support of the association. Each association,
the municipality in which it is organized, and the officers of
each, are authorized to do all things required by this section
as a condition for the use of public funds or the levy of taxes
for the support of the association.
Sec. 2. [126C.445] [TREE GROWTH REPLACEMENT REVENUE.]
For taxes payable in 2003 and later, a school district may
levy an amount not to exceed its miscellaneous revenue for tree
growth revenue for taxes payable in 2001.
[EFFECTIVE DATE.] This section is effective beginning with
taxes levied in 2002, payable in 2003.
Sec. 3. Minnesota Statutes 2000, section 273.1398,
subdivision 3, is amended to read:
Subd. 3. [DISPARITY REDUCTION AID.] (a) For taxes payable
in 1995, 2003 and subsequent years, the amount of disparity aid
certified for each taxing district within each unique taxing
jurisdiction for taxes payable in the prior year shall be
multiplied by the ratio of (1) the jurisdiction's tax capacity
using the class rates for taxes payable in the year for which
aid is being computed, to (2) its tax capacity using the class
rates for taxes payable in the year prior to that for which aid
is being computed, both based upon market values for taxes
payable in the year prior to that for which aid is being
computed. For the purposes of this aid determination, disparity
reduction aid certified for taxes payable in the prior year for
a taxing entity other than a town or school district is deemed
to be county government disparity reduction aid. For taxes
payable in 1992 and subsequent years, The amount of disparity
aid certified to each taxing jurisdiction shall be reduced by
any reductions required in the current year or permanent
reductions required in previous years under section 477A.0132.
(b) For aid payable in 2003, in each unique taxing
jurisdiction where the total tax rate for taxes payable in 2002
exceeds 135 percent of taxable net tax capacity, an amount shall
be permanently added to the unique taxing jurisdiction's aid
amount under paragraph (a) equal to the lesser of: (i) the
amount, if any, by which 87 percent of the aid certified for
2001 exceeds the amount certified for 2002, or (ii) the amount
that would be necessary to reduce the total payable 2002 tax
rate for the unique taxing jurisdiction to 135 percent of
taxable net tax capacity. The amount determined under this
paragraph must be added before the class rate adjustment
described in paragraph (a).
[EFFECTIVE DATE.] This section is effective for aids
payable in 2003 and subsequent years.
Sec. 4. Minnesota Statutes 2001 Supplement, section
273.1398, subdivision 4d, is amended to read:
Subd. 4d. [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.]
For aid payable in 2003 2004, each county's aid under
subdivision 2 shall be permanently reduced by an amount equal to
the county's 2003 2004 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 2004. 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 2004. The aid reduction under this
subdivision must be made prior to not exceed the difference
between (1) the amount of aid calculated for the county for
calendar year 2004 under subdivision 2, including any addition
under section 477A.07, and (2) the amount of any aid reductions
for the state takeover of courts contained in Laws 2001, First
Special Session chapter 5, article 5.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2004.
Sec. 5. Minnesota Statutes 2001 Supplement, section
275.70, subdivision 5, is amended to read:
Subd. 5. [SPECIAL LEVIES.] "Special levies" means those
portions of ad valorem taxes levied by a local governmental unit
for the following purposes or in the following manner:
(1) to pay the costs of the principal and interest on
bonded indebtedness or to reimburse for the amount of liquor
store revenues used to pay the principal and interest due on
municipal liquor store bonds in the year preceding the year for
which the levy limit is calculated;
(2) to pay the costs of principal and interest on
certificates of indebtedness issued for any corporate purpose
except for the following:
(i) tax anticipation or aid anticipation certificates of
indebtedness;
(ii) certificates of indebtedness issued under sections
298.28 and 298.282;
(iii) certificates of indebtedness used to fund current
expenses or to pay the costs of extraordinary expenditures that
result from a public emergency; or
(iv) certificates of indebtedness used to fund an
insufficiency in tax receipts or an insufficiency in other
revenue sources;
(3) to provide for the bonded indebtedness portion of
payments made to another political subdivision of the state of
Minnesota;
(4) to fund payments made to the Minnesota state armory
building commission under section 193.145, subdivision 2, to
retire the principal and interest on armory construction bonds;
(5) property taxes approved by voters which are levied
against the referendum market value as provided under section
275.61;
(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 2001, or (ii) it is a new matching requirement
that didn't exist prior to 2002;
(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);
(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;
(9) to pay an abatement under section 469.1815;
(10) to pay any costs attributable to increases in the
employer contribution rates under chapter 353 that are effective
after June 30, 2001;
(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;
(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;
(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, less the county's share
of transferred fines and fees collected by the district courts
in the county for calendar year 2001; 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; and
(16) to fund a police or firefighters relief association as
required under section 69.77 to the extent that the required
amount exceeds the amount levied for this purpose in 2001.
[EFFECTIVE DATE.] This section is effective for taxes
levied beginning in 2002.
Sec. 6. Minnesota Statutes 2001 Supplement, section
275.71, subdivision 2, is amended to read:
Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a
local governmental unit for taxes levied in 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, plus the amount of tree growth tax it
received in calendar year 2001 under sections 270.31 to 270.39,
and plus, in the case of a city, the amount it was certified to
receive in calendar year 2001 under section 273.166, subject to
any adjustments under section 275.72.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003.
Sec. 7. Minnesota Statutes 2001 Supplement, section
275.71, subdivision 3, is amended to read:
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),
net of the county's share of transferred fines and fees
collected by the district courts in the county for the same
budget period.
(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).
[EFFECTIVE DATE.] This section is effective retroactively
for taxes payable in 2002 and 2003.
Sec. 8. Minnesota Statutes 2001 Supplement, section
275.71, subdivision 6, is amended to read:
Subd. 6. [LEVIES IN EXCESS OF LEVY LIMITS.] (a) 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.
(b) For taxes levied in 2002, payable in 2003 only, if an
error was made in calculating the levy limit adjustment related
to a special levy for jails authorized under section 275.70,
subdivision 5, clause (11), in the previous year, the following
adjustments must be made:
(1) the county's levy limit base for taxes levied in 2002
must be based on the corrected adjusted levy limit base for
taxes levied in 2001; and
(2) the county's final levy limit for taxes levied in 2002,
payable in 2003, must also be temporarily reduced by an amount
equal to the amount of county levy spread in the previous year
in excess of the total recalculated levy limit plus authorized
special levies for taxes levied in 2001, payable in 2002.
(c) The commissioner of revenue shall inform counties
affected by paragraph (b) of the levy error and levy adjustments
required under this provision by June 15, 2002. The county may
provide additional information to the commissioner indicating
why these adjustments may be in error by July 15, 2002. The
commissioner shall certify the final levy adjustment to the
affected counties by August 1, 2002. The levy reduction imposed
under paragraph (b), clause (2), may be spread over a period not
to exceed three years, upon agreement between the county and the
commissioner.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2002, payable in 2003 only.
Sec. 9. Minnesota Statutes 2001 Supplement, section
477A.011, subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as otherwise
provided in paragraphs (b) to (o) this subdivision, "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 2004, the city aid base for a city is
equal to the sum of its city aid base in 2001 2003 and the
amount of additional aid it was certified to receive under
section 477A.06 in 2001 2003. For 2002 2004 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 2003.
(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.
(r) The city aid base for a city is increased by $200,000
beginning in calendar year 2003 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
2003 only, provided that the city qualified for an increase in
homestead and agricultural credit aid under Laws 1995, chapter
264, article 8, section 18.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2002 and thereafter, except that paragraph (r) is effective
beginning with aid payable in 2003.
Sec. 10. Minnesota Statutes 2001 Supplement, section
477A.0123, is amended to read:
477A.0123 [REIMBURSEMENT OF COUNTY FOR CERTAIN OUT-OF-HOME
PLACEMENT.]
Subdivision 1. [AID PAYMENTS.] (a) In calendar year 2003
2004 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 2004, 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 (1) the amount of aid it
is scheduled to receive calculated for the county in calendar
year 2003 2004 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 subdivision 2, including any addition
determined under section 477A.07, and (2) the amount of any aid
reductions for the state takeover of courts contained in Laws
2001, First Special Session chapter 5, article 5. For aids
payable in 2004 2005 and thereafter, the percent of
reimbursement under paragraph (a) shall be equal to the percent
of reimbursement determined for calendar year 2003 2004,
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 2003 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 year 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.
Sec. 11. Minnesota Statutes 2001 Supplement, section
477A.03, subdivision 2, is amended to read:
Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to
discharge the duties imposed by sections 477A.011 to 477A.014 is
annually appropriated from the general fund to the commissioner
of revenue.
(b) Aid payments to counties under section 477A.0121 are
limited to $20,265,000 in 1996. Aid payments to counties under
section 477A.0121 are limited to $27,571,625 in 1997. For aid
payable in 1998 and thereafter, the total aids paid under
section 477A.0121 are the amounts certified to be paid in the
previous year, adjusted for inflation as provided under
subdivision 3.
(c)(i) For aids payable in 1998 and thereafter, the total
aids paid to counties under section 477A.0122 are the amounts
certified to be paid in the previous year, adjusted for
inflation as provided under subdivision 3.
(ii) Aid payments to counties under section 477A.0122 in
2000 are further increased by an additional $20,000,000 in 2000.
(d) Aid payments to cities in 2002 under section 477A.013,
subdivision 9, are limited to the amounts certified to be paid
in the previous year, adjusted for inflation as provided in
subdivision 3, and increased by $140,000,000. For aids payable
in 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 2005 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. If no percent is established by law, the
appropriation is limited to the total amount appropriated for
this purpose in the previous year.
[EFFECTIVE DATE.] This section is effective beginning with
aids payable in 2004.
Sec. 12. Minnesota Statutes 2001 Supplement, section
477A.07, subdivision 2, is amended to read:
Subd. 2. [COUNTY AID.] Each county's aid amount for 2003
determined under subdivision 1 must be permanently added to the
county's 2003 homestead and agricultural credit aid base
determined under section 273.1398 for aid payable, subdivision
2, and paid in 2003 as part of the county's homestead and
agricultural credit aid. It then becomes a permanent part of
the county's homestead and agricultural credit aid base for aid
payable in 2004. Each county's aid amount for 2004 determined
under subdivision 1 must be permanently added to the county's
2004 homestead and agricultural credit aid base for aid payable
determined under section 273.1398, subdivision 2, and paid in
2004 as part of the county's homestead and agricultural credit
aid. It then becomes a permanent part of the county's homestead
and agricultural credit aid base for aid payable in 2005.
[EFFECTIVE DATE.] This section is effective beginning with
aids payable in 2003.
ARTICLE 7
ECONOMIC DEVELOPMENT
Section 1. Minnesota Statutes 2000, section 272.0212,
subdivision 4, is amended to read:
Subd. 4. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Qualified property" means class 3 and class 1, 3, 4,
and 5 property as defined in section 273.13 that is located in a
zone and is newly constructed after the zone was designated,
including the land that contains the improvements.
(c) "Zone" means a border city development zone designated
under the provisions of section 469.1731.
[EFFECTIVE DATE.] This section is effective beginning for
assessment year 2003.
Sec. 2. Minnesota Statutes 2001 Supplement, section
469.1734, subdivision 6, is amended to read:
Subd. 6. [SALES TAX EXEMPTION; EQUIPMENT; CONSTRUCTION
MATERIALS.] (a) The gross receipts from the sale of machinery
and equipment and repair parts are exempt from taxation under
chapter 297A, if the machinery and equipment:
(1) are used in connection with a trade or business;
(2) are placed in service in a city that is authorized to
designate a zone under section 469.1731, regardless of whether
the machinery and equipment are used in a zone; and
(3) have a useful life of 12 months or more.
(b) The gross receipts from the sale of construction
materials are exempt, if they are used to construct:
(1) a facility for use in a trade or business located in a
city that is authorized to designate a zone under section
469.1731, regardless of whether the facility is located in a
zone; or
(2) housing that is located in a zone.
The exemptions under this paragraph apply regardless of whether
the purchase is made by the owner, the user, or a contractor.
(c) A purchaser may claim an exemption under this
subdivision for tax on the purchases up to, but not exceeding:
(1) the amount of the tax credit certificates received from
the city, less
(2) any tax credit certificates used under the provisions
of subdivisions 4 and 5, and section 469.1732, subdivision 2.
(d) The tax on sales of items exempted under this
subdivision shall be imposed and collected as if the applicable
rate under section 297A.62 applied. Upon application by the
purchaser, on forms prescribed by the commissioner, a refund
equal to the tax paid shall be paid to the purchaser. The
application must include sufficient information to permit the
commissioner to verify the sales tax paid and the eligibility of
the claimant to receive the credit. No more than two
applications for refunds may be filed under this subdivision in
a calendar year. The provisions of section 289A.40 apply to the
refunds payable under this subdivision. There is annually
appropriated to the commissioner of revenue the amount required
to make the refunds, which must be deducted from the amount of
the city's allocation under section 469.169, subdivision 12,
that remains available and its limitation under section 469.1735.
The amount to be refunded shall bear interest at the rate in
section 270.76 from the date the refund claim is filed with the
commissioner.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2002.
Sec. 3. Minnesota Statutes 2001 Supplement, 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 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 Laws 2001,
First Special Session chapter 5); 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 Laws 2001, First Special Session chapter 5, or the
elimination of the general education tax levy under Laws 2001,
First Special Session chapter 5.
(c) A preexisting obligation means:
(1) bonds issued and sold before 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 August 1, 2001, to the extent that the bonds are secured
by a pledge of increments from the tax increment financing
district; 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 existence
of a guarantee of obligations by the individual or entity that
would receive the payment under this paragraph is disregarded in
the determination of eligibility to pool under this
subdivision. 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 for increments
payable in 2002 and thereafter.
Sec. 4. Minnesota Statutes 2001 Supplement, section
469.1792, subdivision 1, is amended to read:
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) (2)(i) 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,; and
(ii) the authority is unable to pay the full amount under
the contract from the pledged increments or other increments
from the district that would have been due if the class rate
changes or elimination of the state-determined general education
property tax levy or both had not been made under Laws 2001,
First Special Session chapter 5; 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).
[EFFECTIVE DATE.] This section is effective for actions
taken and resolutions approved after June 30, 2002.
Sec. 5. Minnesota Statutes 2000, section 469.1813, is
amended by adding a subdivision to read:
Subd. 6b. [EXTENDED DURATION LIMIT.] (a) Notwithstanding
the provisions of subdivision 6, a political subdivision may
grant an abatement for a period of up to 20 years, if the
abatement is for a qualified business.
(b) To be a qualified business for purposes of this
subdivision, at least 50 percent of the payroll of the
operations of the business that qualify for the abatement must
be for employees engaged in one of the following lines of
business or any combination of them:
(1) manufacturing;
(2) agricultural processing;
(3) mining;
(4) research and development;
(5) warehousing; or
(6) qualified high technology.
(c)(1) "Manufacturing" means the material staging and
production of tangible personal property by procedures commonly
regarded as manufacturing, processing, fabrication, or
assembling which changes some existing material into new shapes,
new qualities, or new combinations.
(2) "Mining" has the meaning given in section 613(c) of the
Internal Revenue Code of 1986.
(3) "Agricultural processing" means transforming,
packaging, sorting, or grading livestock or livestock products,
agricultural commodities, or plants or plant products into goods
that are used for intermediate or final consumption including
goods for nonfood use.
(4) "Research and development" means qualified research as
defined in section 41(d) of the Internal Revenue Code of 1986.
(5) "Qualified high technology" means one or more of the
following activities:
(i) advanced computing, which is any technology used in the
design and development of any of the following:
(A) computer hardware and software;
(B) data communications; and
(C) information technologies;
(ii) advanced materials, which are materials with
engineered properties created through the development of
specialized process and synthesis technology;
(iii) biotechnology, which is any technology that uses
living organisms, cells, macromolecules, microorganisms, or
substances from living organisms to make or modify a product,
improve plants or animals, or develop microorganisms for useful
purposes;
(iv) electronic device technology, which is any technology
that involves microelectronics, semiconductors, electronic
equipment, and instrumentation, radio frequency, microwave, and
millimeter electronics, and optical and optic-electrical
devices, or data and digital communications and imaging devices;
(v) engineering or laboratory testing related to the
development of a product;
(vi) technology that assists in the assessment or
prevention of threats or damage to human health or the
environment, including, but not limited to, environmental
cleanup technology, pollution prevention technology, or
development of alternative energy sources;
(vii) medical device technology, which is any technology
that involves medical equipment or products other than a
pharmaceutical product that has therapeutic or diagnostic value
and is regulated; or
(viii) advanced vehicles technology which is any technology
that involves electric vehicles, hybrid vehicles, or alternative
fuel vehicles, or components used in the construction of
electric vehicles, hybrid vehicles, or alternative fuel
vehicles. An electric vehicle is a road vehicle that draws
propulsion energy only from an on-board source of electrical
energy. A hybrid vehicle is a road vehicle that can draw
propulsion energy from both a consumable fuel and a rechargeable
energy storage system.
(d) The authority to grant new abatements under this
subdivision expires on July 1, 2004.
Sec. 6. Laws 1995, chapter 264, article 5, section 45,
subdivision 1, as amended by Laws 1996, chapter 471, article 7,
section 22, and Laws 1997, chapter 231, article 10, section 13,
is amended to read:
Subdivision 1. [CREATION OF PROJECTS.] (a) An authority
may create a housing replacement project under sections 44 to
47, as provided in this section.
(b) For the cities of Crystal, Fridley, Richfield, and
Columbia Heights, the authority may designate up to 50 parcels
in the city to be included in a housing replacement district.
No more than ten parcels may be included in year one of the
district, with up to ten additional parcels added to the
district in each of the following nine years. For the cities of
Minneapolis, St. Paul, and Duluth, each authority may designate
up to 100 not more than 200 parcels in the city to be included
in a housing replacement district over the life of the
district. The only parcels that may be included in a district
are (1) vacant sites, (2) parcels containing vacant houses, or
(3) parcels containing houses that are structurally substandard,
as defined in Minnesota Statutes, section 469.174, subdivision
10.
(c) The city in which the authority is located must pay at
least 25 percent of the housing replacement project costs from
its general fund, a property tax levy, or other unrestricted
money, not including tax increments.
(d) The housing replacement district plan must have as its
sole object the acquisition of parcels for the purpose of
preparing the site to be sold for market rate housing. As used
in this section, "market rate housing" means housing that has a
market value that does not exceed 150 percent of the average
market value of single-family housing in that municipality.
Sec. 7. [CITY OF ALBERT LEA; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [AUTHORIZATION.] The governing body of the
city of Albert Lea may create a redevelopment tax increment
financing district as provided in this section. The city or its
port authority may be the "authority" for the purposes of
Minnesota Statutes, sections 469.174 to 469.179.
Subd. 2. [DEFINITIONS.] (a) For the purposes of this
section, the terms defined in this subdivision have the meanings
given them.
(b) "Redevelopment parcel" means the property in the city
of Albert Lea bounded by Main Street, Garfield Avenue, Front
Street, the Union Pacific railway line, and Albert Lea lake.
(c) "Reconstruction parcel" means the property in the city
of Albert Lea described as lot 1, block 5, Habben First Addition.
Subd. 3. [SPECIAL RULES.] (a) The district established
under this section is subject to the provisions of Minnesota
Statutes, sections 469.174 to 469.179, except as provided in
this subdivision.
(b) The district may consist of the redevelopment parcel
and the reconstruction parcel.
(c) Minnesota Statutes, section 469.174, subdivision 10,
paragraph (f), does not apply to the district, and if the city
finds that the redevelopment parcel meets the criteria described
in Minnesota Statutes, section 469.174, subdivision 10,
paragraph (a), clause (1), then both the redevelopment parcel
and the reconstruction parcel and the district as a whole are
considered to meet those criteria.
(d) Expenditures for activities, as defined in Minnesota
Statutes, section 469.1763, subdivision 1, paragraph (b),
anywhere within the district are considered costs of correcting
conditions that allow designation of redevelopment districts
within the meaning of Minnesota Statutes, section 469.176,
subdivision 4j.
(e) For the purposes of Minnesota Statutes, section
469.1763, subdivision 3, expenditures on the redevelopment
parcel are considered to have been expended on an activity
within the district if a qualifying action occurs within ten
years after certification of the district.
[EFFECTIVE DATE.] This section is effective upon local
approval in compliance with the requirements of Minnesota
Statutes, section 645.021.
Sec. 8. [RUSHFORD TAX INCREMENT FINANCING EXTENSION.]
The governing body of the city of Rushford may elect to
extend the duration of its downtown redevelopment tax increment
financing district by up to two additional years.
[EFFECTIVE DATE.] This section is effective upon compliance
with the requirements of Minnesota Statutes, sections 469.1782,
subdivision 2; and 645.021.
Sec. 9. [CITY OF MINNEAPOLIS TAX INCREMENT DISTRICT;
DURATION EXTENSION.]
(a) Upon approval of the city council of the city of
Minneapolis, the Minneapolis community development agency may,
notwithstanding Minnesota Statutes, section 469.176, subdivision
1b, extend the duration of the east Hennepin and University tax
increment district for a period of up to seven years, or until
all amounts payable to the developers and to the agency to
reimburse the agency's provision of $1,100,000 of city of
Minneapolis HOME funds to assist low-income housing are repaid,
whichever is shorter.
(b) The amount of additional increment which may be paid to
the district as a result of this section may not exceed:
(1) the increment that would have been collected if the
class rate changes and elimination of the state-determined
general education property tax levy had not been made under Laws
2001, First Special Session chapter 5, for the term of the
district under general law and if the provisions of section 4
did not apply, less
(2) the actual increments collected for the term of the
district under general law.
(c) Notwithstanding any law to the contrary, effective upon
approval of this section, no increments may be spent on
activities located outside of the area of the district, other
than to pay administrative expenses.
(d) This section is effective upon compliance with the
requirements of Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021.
Sec. 10. [CITY OF MINNEAPOLIS TAX INCREMENT DISTRICT;
DURATION EXTENSION.]
(a) Upon approval of the city council of the city of
Minneapolis, the Minneapolis community development agency may,
with respect to the southeast Minneapolis industrial area
redevelopment area phase 4 tax increment financing district,
notwithstanding Minnesota Statutes, section 469.176, subdivision
1b, extend the duration of the district for a period of up to
six years.
(b) The amount of additional increment which may be paid to
the district as a result of this section may not exceed:
(1) the increment that would have been collected if the
class rate changes and elimination of the state-determined
general education property tax levy had not been made under Laws
2001, First Special Session chapter 5, for the term of the
district under general law and if the provisions of section 4
did not apply, less
(2) the actual increments collected for the term of the
district under general law.
(c) Notwithstanding any law to the contrary, effective upon
approval of this section, no increments may be spent on
activities located outside of the area of the district, other
than to pay administrative expenses.
(d) Upon payment in full of the Minneapolis community
development agency amended and restated tax increment revenue
note, in the original face amount of $1,000,000, issued December
4, 1997, the district terminates and the authority granted under
this section terminates.
(e) This section is effective upon compliance with the
requirements of Minnesota Statutes, sections 469.1782,
subdivision 2, and 645.021.
Sec. 11. [GRANT TO WASHBURN-CROSBY PROJECT.]
Notwithstanding the requirements of Minnesota Statutes,
section 469.1794, the commissioner of revenue shall pay a
one-time grant of $2,600,000 to the Minneapolis community
development agency for the Washburn-Crosby Mill City Museum
project of the historical society as described in Laws 2001,
First Special Session chapter 5, article 15, section 39. The
grant must be disbursed on July 1, 2002. $2,600,000 is
appropriated from the general fund to the commissioner of
revenue to make the grant under this section.
Sec. 12. [DAKOTA COUNTY TAX INCREMENT DISTRICT EXTENSION.]
(a) The governing body of Dakota county may elect to extend
the duration of its C.D.A. South Robert Street redevelopment tax
increment financing district number 4 by up to five additional
years.
(b) The amount of additional increment which may be paid to
the district as a result of this section may not exceed:
(1) the increment that would have been collected if the
class rate changes and elimination of the state-determined
general education property tax levy had not been made under Laws
2001, First Special Session chapter 5, for the term of the
district under general law and if the provisions of section 4
did not apply, less
(2) the actual increments collected for the term of the
district under general law.
[EFFECTIVE DATE.] This section is effective upon compliance
with Minnesota Statutes, sections 469.1782, subdivision 2, and
645.021.
Sec. 13. [REPEALER.]
Minnesota Statutes 2001 Supplement, section 469.176,
subdivision 1h, is repealed.
[EFFECTIVE DATE.] This section is effective retroactive to
July 1, 2001, and any early decertification of a tax increment
financing district made after July 1, 2001, is ratified.
ARTICLE 8
MINERALS TAXES
Section 1. Minnesota Statutes 2001 Supplement, 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; 298.225; 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 under 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 under
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.
Sec. 2. Minnesota Statutes 2001 Supplement, 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;
298.225; 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 under 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 under 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 under section 477A.15 in the previous fiscal year
less the product of the same dollar amount of payments or
revenue times five percent.
For levy year 2002 only, 77 percent of the amounts
distributed under section 298.225 and 298.28, and 100 percent of
the amounts distributed under sections 298.018; 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 under section
477A.15, shall be used for purposes of the calculations under
this paragraph. For levy year 2003 only, the levy reductions
under this subdivision must be calculated as if section 298.28,
subdivision 4, paragraph (f), did not apply for the 2003
distribution.
(3) The amount of any increased levy authorized by
referendum pursuant to section 126C.17, subdivision 9, voter
approved referendum, facilities down payment, and debt levies
shall not be reduced pursuant to by more than 50 percent under
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. In
administering this paragraph, the commissioner shall first
reduce the nonvoter approved levies of a district; then, if any
payments, severed mineral value tax revenue or recognized
revenue under paragraph (2) remains, the commissioner shall
reduce any voter approved referendum levies authorized under
section 126C.17; then, if any payments, severed mineral value
tax revenue or recognized revenue under paragraph (2) remains,
the commissioner shall reduce any voter approved facilities down
payment levies authorized under section 123B.63 and then, if any
payments, severed mineral value tax revenue or recognized
revenue under paragraph (2) remains, the commissioner shall
reduce any voter approved debt levies.
(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; 298.34 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. To the
extent the levy reduction calculated under paragraph (2) exceeds
the limitation in paragraph (3), an amount equal to the excess
must be distributed from the school district's distribution
under sections 298.225, 298.28, and 477A.15 in the following
year to the cities and townships within the 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. The commissioner of revenue shall certify the
distributions of cities and towns under this paragraph to the
county auditor by September 30 of the year preceding
distribution. The county auditor shall reduce the proposed and
final levies of cities and towns receiving distributions by the
amount of their distribution. Distributions to the cities and
towns shall be made at the times provided under section 298.27.
Sec. 3. Minnesota Statutes 2001 Supplement, 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 (6) and (10) (9), and 19d, clauses (7) and (11), are not
used to determine taxable income.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2001 Supplement, section
298.01, subdivision 4c, is amended to read:
Subd. 4c. [SPECIAL DEDUCTIONS; NET OPERATING LOSS.] (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 (6) and (10) (9), and 19d, clauses (7) and (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) (b) 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 taxes
payable May 1, 2002, and thereafter.
Sec. 5. Minnesota Statutes 2001 Supplement, 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 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 31.2 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.
Sec. 6. Minnesota Statutes 2000, section 298.27, is
amended to read:
298.27 [COLLECTION AND PAYMENT OF TAX.]
The taxes provided by section 298.24 shall be paid directly
to each eligible county and the iron range resources and
rehabilitation board. The commissioner of revenue shall notify
each producer of the amount to be paid each recipient prior to
February 15. Every person subject to taxes imposed by section
298.24 shall file a correct report covering the preceding year.
The report must contain the information required by the
commissioner. The report shall be filed by each producer on or
before February 1. A remittance equal to 50 percent of the
total tax required to be paid hereunder in 2003 and 100 percent
of the total tax required to be paid hereunder in 2004 and
thereafter shall be paid on or before February 24. A remittance
equal to the remaining total tax required to be paid hereunder
in 2003 shall be paid on or before August 24. On or before
February 25, and in 2003, August 25, the county auditor shall
make distribution of the payment payments previously received by
the county in the manner provided by section 298.28. Reports
shall be made and hearings held upon the determination of the
tax in accordance with procedures established by the
commissioner of revenue. The commissioner of revenue shall have
authority to make reasonable rules as to the form and manner of
filing reports necessary for the determination of the tax
hereunder, and by such rules may require the production of such
information as may be reasonably necessary or convenient for the
determination and apportionment of the tax. All the provisions
of the occupation tax law with reference to the assessment and
determination of the occupation tax, including all provisions
for appeals from or review of the orders of the commissioner of
revenue relative thereto, but not including provisions for
refunds, are applicable to the taxes imposed by section 298.24
except in so far as inconsistent herewith. If any person
subject to section 298.24 shall fail to make the report provided
for in this section at the time and in the manner herein
provided, the commissioner of revenue shall in such case, upon
information possessed or obtained, ascertain the kind and amount
of ore mined or produced and thereon find and determine the
amount of the tax due from such person. There shall be added to
the amount of tax due a penalty for failure to report on or
before February 1, which penalty shall equal ten percent of the
tax imposed and be treated as a part thereof.
If any person responsible for making a tax payment at the
time and in the manner herein provided fails to do so, there
shall be imposed a penalty equal to ten percent of the amount so
due, which penalty shall be treated as part of the tax due.
In the case of any underpayment of the tax payment required
herein, there may be added and be treated as part of the tax due
a penalty equal to ten percent of the amount so underpaid.
A person having a liability of $120,000 or more during a
calendar year must remit all liabilities by means of a funds
transfer as defined in section 336.4A-104, paragraph (a). The
funds transfer payment date, as defined in section 336.4A-401,
must be on or before the date the 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.
[EFFECTIVE DATE.] Except as otherwise provided, this
section is effective for years beginning after December 31, 2001.
Sec. 7. Minnesota Statutes 2001 Supplement, section
298.28, subdivision 4, is amended to read:
Subd. 4. [SCHOOL DISTRICTS.] (a) 22.28 17.15 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 3.43 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 13.72 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 after reduction for any
portion distributed to cities and towns under section 126C.48,
subdivision 8, paragraph (5), 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, 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 $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.
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 for the distribution in 2003 and
thereafter only, five percent of the distributions to school
districts under paragraphs (b), (c), and (e); subdivision 6,
paragraph (c); subdivision 11; and section 477A.15 298.225,
shall be distributed to the general fund. The remainder less
any portion distributed to cities and towns under section
126C.48, subdivision 8, paragraph (5), 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 northeast Minnesota economic protection trust fund
created in section 298.292. Fifty percent of the amount
distributed to the northeast Minnesota economic protection trust
fund shall be made available for expenditure under section
298.293 as governed by section 298.296. Effective in 2003 only,
100 percent of the distributions to school districts under
section 477A.15 less any portion distributed to cities and towns
under section 126C.48, subdivision 8, paragraph (5), shall be
distributed to the general fund.
Sec. 8. Minnesota Statutes 2000, section 298.28,
subdivision 5, is amended to read:
Subd. 5. [COUNTIES.] (a) 16.5 26.05 cents per taxable ton
is allocated to counties to be distributed, based upon
certification by the commissioner of revenue, under paragraphs
(b) to (d).
(b) 13 20.525 cents per taxable ton shall be distributed to
the county in which the taconite is mined or quarried or in
which the concentrate is produced, less any amount which is to
be distributed pursuant to paragraph (c). The apportionment
formula prescribed in subdivision 2 is the basis for the
distribution.
(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 county other than the county in which
the mining and the concentrating processes are conducted, one
cent per taxable ton of the tax distributed to the counties
pursuant to paragraph (b) and imposed on and collected from such
taxpayer shall be paid to the county in which the power plant is
located.
(d) 3.5 5.525 cents per taxable ton shall be paid to the
county from which the taconite was mined, quarried or
concentrated to be deposited in the county road and bridge
fund. If the mining, quarrying and concentrating, or separate
steps in any of those processes are carried on in more than one
county, the commissioner shall follow the apportionment formula
prescribed in subdivision 2.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 9. Minnesota Statutes 2001 Supplement, section
298.28, subdivision 6, is amended to read:
Subd. 6. [PROPERTY TAX RELIEF.] (a) In 2002 and
thereafter, 35.9 33.9 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 .4541 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 the day
following final enactment.
Sec. 10. Minnesota Statutes 2001 Supplement, section
298.28, subdivision 9a, is amended to read:
Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 30.1
cents per ton for distributions in 2002 and thereafter must be
paid to the taconite economic development fund. No distribution
shall be made under this paragraph in 2004 or any subsequent
year in which total industry production falls below 30 million
tons. Distribution shall only be made to a taconite producer's
fund under section 298.227 if the producer timely pays its tax
under section 298.24 by the dates provided under section 298.27,
or pursuant to the due dates provided by an administrative
agreement with the commissioner.
(b) An amount equal to 50 percent of the tax under section
298.24 for concentrate sold in the form of pellet chips and
fines not exceeding 5/16 inch in size and not including crushed
pellets shall be paid to the taconite economic development
fund. The amount paid shall not exceed $700,000 annually for
all companies. If the initial amount to be paid to the fund
exceeds this amount, each company's payment shall be prorated so
the total does not exceed $700,000.
Sec. 11. Minnesota Statutes 2000, section 298.28,
subdivision 9b, is amended to read:
Subd. 9b. [TACONITE ENVIRONMENTAL FUND.] Five cents per
ton for distributions in 1999, 2000, 2001, and 2002, and 2003
must be paid to the taconite environmental fund for use under
section 298.2961. No distribution may be made under this
paragraph in any year in which total industry production falls
below 30,000,000 tons.
Sec. 12. Minnesota Statutes 2001 Supplement, section
298.28, subdivision 10, is amended to read:
Subd. 10. [INCREASE.] Beginning with distributions in
2000, the amount determined under 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 the day
following final enactment.
Sec. 13. Minnesota Statutes 2000, section 298.28,
subdivision 11, is amended to read:
Subd. 11. [REMAINDER.] (a) The proceeds of the tax imposed
by section 298.24 which remain after the distributions and
payments in subdivisions 2 to 10a, as certified by the
commissioner of revenue, and paragraphs (b), (c), and (d), and
(e) have been made, together with interest earned on all money
distributed under this section prior to distribution, shall be
divided between the taconite environmental protection fund
created in section 298.223 and the northeast Minnesota economic
protection trust fund created in section 298.292 as follows:
Two-thirds to the taconite environmental protection fund and
one-third to the northeast Minnesota economic protection trust
fund. The proceeds shall be placed in the respective special
accounts.
(b) There shall be distributed to each city, town, and
county the amount that it received under section 294.26 in
calendar year 1977; provided, however, that the amount
distributed in 1981 to the unorganized territory number 2 of
Lake county and the town of Beaver Bay based on the
between-terminal trackage of Erie Mining Company will be
distributed in 1982 and subsequent years to the unorganized
territory number 2 of Lake county and the towns of Beaver Bay
and Stony River based on the miles of track of Erie Mining
Company in each taxing district.
(c) There shall be distributed to the iron range resources
and rehabilitation board the amounts it received in 1977 under
section 298.22. The amount distributed under this paragraph
shall be expended within or for the benefit of the tax relief
area defined in section 273.134.
(d) There shall be distributed to each school district 81
62 percent of the amount that it received under section 294.26
in calendar year 1977.
(e) In 2003 only, $100,000 must be distributed to a
township located in a taconite tax relief area as defined in
section 273.134, paragraph (a), that received $119,259 of
homestead and agricultural credit aid and $182,014 in local
government aid in 2001.
Sec. 14. Minnesota Statutes 2000, section 298.291, is
amended to read:
298.291 [CITATION.]
Sections 298.291 to 298.294 shall be known as the
"Northeast Minnesota Douglas J. Johnson Economic Protection
Trust Fund Act.
Sec. 15. Minnesota Statutes 2001 Supplement, section
298.296, subdivision 2, is amended to read:
Subd. 2. [EXPENDITURE OF FUNDS.] (a) Before January 1,
2003 2028, 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.
(b) 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.
(c) On and after January 1, 2003, Funds may be expended on
projects and for administration from any assets of the
trust. Additionally, an amount equal to 20 percent of the value
of the corpus of the trust on the date of enactment of this act,
not including the funds authorized in paragraph (b), plus the
amounts made available under sections 7 and 17, may be expended
on projects. Funds may be expended for projects under this
paragraph only if the project:
(1) is for the purposes established under section 298.292,
subdivision 1, clause (1) or (2); and
(2) is approved by the board upon an affirmative vote of at
least ten of its members.
No money made available under this paragraph or paragraph (d)
can be used for administrative or operating expenses of the iron
range resources and rehabilitation board or expenses relating to
any facilities owned or operated by the board on the effective
date of this act.
(d) Upon recommendation by a unanimous vote of all members
of the board, amounts in addition to those authorized under
paragraphs (a), (b), and (c) may be expended on projects
described in section 298.292, subdivision 1.
(e) 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.
(f) 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.
[EFFECTIVE DATE.] This section is effective January 1, 2003.
Sec. 16. Minnesota Statutes 2000, section 477A.15, is
amended to read:
477A.15 [TACONITE AID REIMBURSEMENT.]
Any school district in which is located property which had
been entitled to a reduction of tax pursuant to Minnesota
Statutes 1978, section 273.135, subdivision 2, clause (c), shall
receive in 1981 and subsequent years an amount equal to the
amount it received in 1980 pursuant to Minnesota Statutes 1978,
section 298.28, subdivision 1, clause (3)(b). Payments shall be
made pursuant to this section and section 126C.48, subdivision
8, paragraph (5), by the commissioner of revenue to the taxing
jurisdictions on the date in each calendar year when the first
installment is paid under section 477A.015.
[EFFECTIVE DATE.] This section is effective for payments in
2003 and subsequent years.
Sec. 17. [ADDITIONAL DISTRIBUTION.]
The difference between the distribution to school districts
under Minnesota Statutes, sections 298.225 and 298.28, as
amended by this act, and the amount the districts would have
received under Minnesota Statutes 2000, sections 298.225 and
298.28 for distributions in 2004 only, shall be added to the
sums available for expenditure under Minnesota Statutes, section
298.293, as governed by Minnesota Statutes, section 298.296.
Sec. 18. [INSTRUCTION TO THE REVISOR.]
In the next edition of Minnesota Statutes, the revisor of
statutes shall change the phrase "Northeast Minnesota Economic
Protection Trust Fund Act" to "Douglas J. Johnson Economic
Protection Trust Fund Act" wherever it appears in Minnesota
Statutes.
ARTICLE 9
DEPARTMENT OF REVENUE POLICY PROVISIONS
Section 1. Minnesota Statutes 2000, section 270.063,
subdivision 4, is amended to read:
Subd. 4. [FEDERAL TAX REFUND OFFSET FEES; TIME LIMIT FOR
SUBMITTING CLAIMS FOR OFFSET.] For fees charged by the
department of the treasury of the United States for the offset
of federal tax refunds that are deducted from the refund amounts
remitted to the commissioner, the unpaid debts of the taxpayers
whose refunds are being offset to satisfy the debts are reduced
only by the actual amount of the refund payments received by the
commissioner. Notwithstanding any other provision of law to the
contrary, a claim for the offset of a federal tax refund must be
submitted to the department of the treasury of the United States
within ten years after the date of the assessment of the tax
owed by the taxpayer whose refund is to be offset to satisfy the
debt.
[EFFECTIVE DATE.] This section is effective for claims for
offset that were submitted before and are pending on the date of
final enactment, and for claims submitted on or after the day
following final enactment.
Sec. 2. Minnesota Statutes 2001 Supplement, section
270.691, subdivision 8, is amended to read:
Subd. 8. [EXPIRATION DATE.] The program authorized under
this section terminates on June 30, 2002 2003.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2000, section 273.125,
subdivision 4, is amended to read:
Subd. 4. [PETITIONS OF GRIEVANCE.] A person who claims
that the person's manufactured home has been unfairly or
unequally assessed, or that the property has been assessed at a
valuation greater than its real or actual value, or that the tax
levied against it is illegal, in whole or in part, or has been
paid, or that the property is exempt from the tax so levied, may
have the validity of the claim, defense, or objection determined
in court. The determination must be made by the district court
of the county in which the tax is levied or by the tax court. A
person can request the determination by filing a petition for it
in the office of the court administrator of the district court
on or before September October 1 of the year in which the tax
becomes payable. A petition for determination under this
section may be transferred by the district court to the tax
court.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003 and thereafter.
Sec. 4. Minnesota Statutes 2000, section 278.01,
subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION OF VALIDITY.] (a) Any person
having personal property, or any estate, right, title, or
interest in or lien upon any parcel of land, who claims that
such property has been partially, unfairly, or unequally
assessed in comparison with other property in the (1) city, or
(2) county, or (3) in the case of a county containing a city of
the first class, the portion of the county excluding the first
class city, or that the parcel has been assessed at a valuation
greater than its real or actual value, or that the tax levied
against the same is illegal, in whole or in part, or has been
paid, or that the property is exempt from the tax so levied, may
have the validity of the claim, defense, or objection determined
by the district court of the county in which the tax is levied
or by the tax court by serving one copy of a petition for such
determination upon the county auditor, one copy on the county
attorney, one copy on the county treasurer, and three copies on
the county assessor. The county assessor shall immediately
forward one copy of the petition to the appropriate governmental
authority in a home rule charter or statutory city or town in
which the property is located if that city or town employs its
own certified assessor. A copy of the petition shall also be
forwarded by the assessor to the school board of the school
district in which the property is located.
(b) In counties where the office of county treasurer has
been combined with the office of county auditor, the county may
elect to require the petitioner to serve the number of copies as
determined by the county. The county assessor shall immediately
forward one copy of the petition to the appropriate governmental
authority in a home rule charter or statutory city or town in
which the property is located if that city or town employs its
own certified assessor. A list of petitioned properties,
including the name of the petitioner, the identification number
of the property, and the estimated market value, shall be sent
on or before the first day of July by the county
auditor/treasurer to the school board of the school district in
which the property is located.
(c) For all counties, the petitioner must file the copies
with proof of service, in the office of the court administrator
of the district court on or before March 31 April 30 of the year
in which the tax becomes payable. A petition for determination
under this section may be transferred by the district court to
the tax court. An appeal may also be taken to the tax court
under chapter 271 at any time following receipt of the valuation
notice required by section 273.121 but prior to April May 1 of
the year in which the taxes are payable.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003 and thereafter.
Sec. 5. Minnesota Statutes 2000, section 279.01,
subdivision 3, is amended to read:
Subd. 3. [AGRICULTURAL PROPERTY.] In the case of class 1b
agricultural homestead, class 2a agricultural homestead
property, and class 2b(3) agricultural nonhomestead property, no
penalties shall attach to the second one-half property tax
payment as provided in this section if paid by November 15.
Thereafter for class 1b agricultural homestead and class 2a
homestead property, on November 16 following, a penalty of six
percent shall accrue and be charged on all such unpaid taxes and
on December 1 following, an additional two percent shall be
charged on all such unpaid taxes. Thereafter for class 2b(3)
agricultural nonhomestead property, on November 16 following, a
penalty of eight percent shall accrue and be charged on all such
unpaid taxes and on December 1 following, an additional four
percent shall be charged on all such unpaid taxes.
If the owner of class 1b agricultural homestead, class 2a,
or class 2b(3) agricultural property receives a consolidated
property tax statement that shows only an aggregate of the taxes
and special assessments due on that property and on other
property not classified as class 1b agricultural homestead,
class 2a, or class 2b(3) agricultural property, the aggregate
tax and special assessments shown due on the property by the
consolidated statement will be due on November 15 provided that
at least 50 percent of the property's market value is classified
class 1b agricultural, class 2a, or class 2b(3) agricultural.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003 and thereafter.
Sec. 6. Minnesota Statutes 2000, section 289A.19,
subdivision 1, is amended to read:
Subdivision 1. [FIDUCIARY INCOME, ENTERTAINMENT TAX, AND
INFORMATION RETURNS.] When, in the commissioner's judgment, good
cause exists, the commissioner may extend the time for filing
entertainment tax returns for not more than six months. If an
extension to file the federal fiduciary income tax return or
information return has been granted under section 6081 of the
Internal Revenue Code, the time for filing the state return is
extended for that period. The commissioner may require the
taxpayer to file a tentative return when the regularly required
return is due, and to pay a tax on the basis of the tentative
return at the times required for the payment of taxes on the
basis of the regularly required return from the taxpayer. The
commissioner shall grant an automatic extension of six months to
file a partnership, "S" corporation, or fiduciary income tax
return if all of the taxes imposed on the entity for the year by
chapter 290 and section 289A.08, subdivision 7, have been paid
by the date prescribed by section 289A.18, subdivision 1.
[EFFECTIVE DATE.] This section is effective for returns due
after December 31, 2002.
Sec. 7. Minnesota Statutes 2000, section 295.53,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTIONS.] (a) The following payments
are excluded from the gross revenues subject to the hospital,
surgical center, or health care provider taxes under sections
295.50 to 295.57:
(1) payments received for services provided under the
Medicare program, including payments received from the
government, and organizations governed by sections 1833 and 1876
of title XVIII of the federal Social Security Act, United States
Code, title 42, section 1395, and enrollee deductibles,
coinsurance, and copayments, whether paid by the Medicare
enrollee or by a Medicare supplemental coverage as defined in
section 62A.011, subdivision 3, clause (10). Payments for
services not covered by Medicare are taxable;
(2) medical assistance payments including payments received
directly from the government or from a prepaid plan;
(3) payments received for home health care services;
(4) payments received from hospitals or surgical centers
for goods and services on which liability for tax is imposed
under section 295.52 or the source of funds for the payment is
exempt under clause (1), (2), (7), (8), (10), (13), or (20);
(5) payments received from health care providers for goods
and services on which liability for tax is imposed under this
chapter or the source of funds for the payment is exempt under
clause (1), (2), (7), (8), (10), (13), or (20);
(6) amounts paid for legend drugs, other than nutritional
products, to a wholesale drug distributor who is subject to tax
under section 295.52, subdivision 3, reduced by reimbursements
received for legend drugs under clauses (1), (2), (7), and
(8) otherwise exempt under chapter 295;
(7) payments received under the general assistance medical
care program including payments received directly from the
government or from a prepaid plan;
(8) payments received for providing services under the
MinnesotaCare program including payments received directly from
the government or from a prepaid plan and enrollee deductibles,
coinsurance, and copayments. For purposes of this clause,
coinsurance means the portion of payment that the enrollee is
required to pay for the covered service;
(9) payments received by a health care provider or the
wholly owned subsidiary of a health care provider for care
provided outside Minnesota;
(10) payments received from the chemical dependency fund
under chapter 254B;
(11) payments received in the nature of charitable
donations that are not designated for providing patient services
to a specific individual or group;
(12) payments received for providing patient services
incurred through a formal program of health care research
conducted in conformity with federal regulations governing
research on human subjects. Payments received from patients or
from other persons paying on behalf of the patients are subject
to tax;
(13) payments received from any governmental agency for
services benefiting the public, not including payments made by
the government in its capacity as an employer or insurer;
(14) payments received for services provided by community
residential mental health facilities licensed under Minnesota
Rules, parts 9520.0500 to 9520.0690, community support programs
and family community support programs approved under Minnesota
Rules, parts 9535.1700 to 9535.1760, and community mental health
centers as defined in section 245.62, subdivision 2;
(15) government payments received by a regional treatment
center;
(16) payments received for hospice care services;
(17) payments received by a health care provider for
hearing aids and related equipment or prescription eyewear
delivered outside of Minnesota;
(18) payments received by an educational institution from
student tuition, student activity fees, health care service
fees, government appropriations, donations, or grants. Fee for
service payments and payments for extended coverage are taxable;
(19) payments received for services provided by: assisted
living programs and congregate housing programs; and
(20) payments received under the federal Employees Health
Benefits Act, United States Code, title 5, section 8909(f), as
amended by the Omnibus Reconciliation Act of 1990.
(b) Payments received by wholesale drug distributors for
legend drugs sold directly to veterinarians or veterinary bulk
purchasing organizations are excluded from the gross revenues
subject to the wholesale drug distributor tax under sections
295.50 to 295.59.
[EFFECTIVE DATE.] This section is effective for payments
received after December 31, 2001.
Sec. 8. Minnesota Statutes 2000, section 295.57, is
amended by adding a subdivision to read:
Subd. 5. [EXEMPTION FOR AMOUNTS PAID FOR LEGEND DRUGS.] If
a hospital or health care provider cannot determine the actual
cost or reimbursement of legend drugs under the exemption
provided in section 295.53, subdivision 1, paragraph (a), clause
(6), the following method must be used:
A hospital or health care provider must determine the
amount paid for legend drugs used during the month or quarter
and multiply that amount by a ratio, the numerator of which is
the total amount received for taxable patient services, and the
denominator of which is the total amount received for all
patient services, including amounts exempt under section 295.53,
subdivision 1. The result represents the allowable exemption
for the monthly or quarterly cost of drugs.
[EFFECTIVE DATE.] This section is effective for payments
received on or after July 1, 2002.
Sec. 9. Minnesota Statutes 2001 Supplement, section
295.60, subdivision 2, is amended to read:
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.
(f) "Delivered outside of Minnesota" means fur clothing
which the furrier delivers to a common carrier for delivery
outside Minnesota, places in the United States mail or parcel
post directed to the purchaser outside Minnesota, or delivers to
the purchaser outside Minnesota by means of the seller's own
delivery vehicles, and which is not returned to a point within
Minnesota, except in the course of interstate commerce.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 10. Minnesota Statutes 2001 Supplement, section
295.60, is amended by adding a subdivision to read:
Subd. 2a. [EXEMPTIONS.] Payments received by a furrier for
clothing made of fur delivered outside of Minnesota are exempt
from gross revenues subject to the fur clothing tax.
[EFFECTIVE DATE.] This section is effective for payments
received on or after January 1, 2002.
Sec. 11. Minnesota Statutes 2001 Supplement, section
297A.61, subdivision 26, is amended to read:
Subd. 26. [PRIVATE COMMUNICATION SERVICE.] "Private
communication service" means a communication telecommunication
service furnished to a subscriber which that entitles the
subscriber customer to:
(1) exclusive or priority use of any a 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 between or among termination points, regardless of
the manner in which the channel or channels are connected, and
includes switching capacity, extension lines and, stations,
or and any other associated services that are provided in
connection with, and are necessary or unique to the use of, the
use of the channel or 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 retroactively
for sales and purchases occurring after July 31, 2001.
Sec. 12. Minnesota Statutes 2000, section 297A.68, is
amended by adding a subdivision to read:
Subd. 36. [DELIVERY OR DISTRIBUTION CHARGES; PRINTED
MATERIALS.] Charges for the delivery or distribution of printed
materials, including individual account information, are exempt
if (1) the charges are separately stated, (2) the delivery or
distribution is to a mass audience or to a mailing list provided
at the direction of the customer, and (3) the cost of the
materials is not billed directly to the recipients.
[EFFECTIVE DATE.] This section is effective retroactive to
delivery charges on sales and purchases made after December 31,
2001, and before January 1, 2006.
Sec. 13. Minnesota Statutes 2000, section 297G.07,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTIONS.] The following are not subject
to the excise tax:
(1) Sales by a manufacturer, brewer, or wholesaler for
shipment outside the state in interstate commerce.
(2) Alcoholic beverages sold or transferred between
Minnesota wholesalers.
(3) Sales to common carriers engaged in interstate
transportation of passengers, except as provided in this chapter.
(4) Malt beverages served by a brewery for on-premise
consumption at no charge, or distributed to brewery employees
for on-premise consumption under a labor contract.
(5) Shipments of wine to Minnesota residents under section
340A.417.
(6) Fruit juices naturally fermented or beer naturally
brewed in the home for family use.
(7) Sales of wine for sacramental purposes under section
340A.316.
(8) Alcoholic beverages sold to authorized manufacturers of
food products or pharmaceutical firms. The alcoholic beverage
must be used exclusively in the manufacture of food products or
medicines. For purposes of this clause, "manufacturer" means a
person who manufactures food products intended for sale to
wholesalers or retailers for ultimate sale to the consumer.
(9) Liqueur-filled candy.
(10) Sales to a federal agency, that the state of Minnesota
is prohibited from taxing under the constitution or laws of the
United States or under the constitution of Minnesota.
(11) Sales to Indian tribes as defined in section 297G.08.
(12) Shipments of intoxicating liquor from foreign
countries to diplomatic personnel of foreign countries assigned
to service in this state.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. Minnesota Statutes 2001 Supplement, 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 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 collected or to be collected from
properties located within the district that are available for
the calendar year including amounts collected in prior years
that are currently available; plus
(iii) total increments from properties located in other
districts in the municipality including amounts collected in
prior years 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 Laws 2001, First Special Session
chapter 5); 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 Laws 2001, First Special Session chapter 5, or the
elimination of the general education tax levy under Laws 2001,
First Special Session chapter 5.
(c) A preexisting obligation means:
(1) bonds issued and sold before 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 August 1, 2001, to the extent that the bonds are secured
by a pledge of increments from the tax increment financing
district; 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 including amounts collected in prior years that are
currently available 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 retroactively
to January 2, 2002, and thereafter.
ARTICLE 10
DEPARTMENT OF REVENUE TECHNICAL PROVISIONS
Section 1. Minnesota Statutes 2001 Supplement, 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 297I.05, subdivision 8,
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) In addition to 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, each
year $100,000 shall be apportioned for police state aid. An
amount sufficient to pay this increase is annually appropriated
from the general fund.
[EFFECTIVE DATE.] This section is effective beginning with
fiscal year 2003.
Sec. 2. Minnesota Statutes 2001 Supplement, section
126C.17, subdivision 7a, is amended 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,
noncommercial 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. 3. Minnesota Statutes 2001 Supplement, section
270.69, subdivision 2, is amended to read:
Subd. 2. [FILING OF LIENS NECESSARY FOR ENFORCEABILITY
AGAINST CERTAIN PERSONS; METHODS OF FILING; FEES.] (a) The lien
imposed by subdivision 1 is not enforceable against any
purchaser, mortgagee, pledgee, holder of a Uniform Commercial
Code security interest, mechanic's lienor, or judgment lien
creditor whose interest has been duly perfected or is a
conveyance or interest entitled to protection against judgments
and attachments under section 507.34 or under any other
applicable provisions of state law, until a notice of lien has
been filed by the commissioner of revenue in the office of the
county recorder of the county in which real property is
situated, or in the case of personal property belonging to an
individual who is not a resident of this state or to a
corporation, partnership, or other organization, in the office
of the secretary of state, or in the case of personal property
belonging to a resident individual, in the office of the county
recorder of the county of residence of the individual.
(b)(1) Notices of liens, and lien releases, transcriptions,
and renewals, in a form prescribed by the commissioner of
revenue, may be filed with the county recorder or the secretary
of state by mail, personal delivery, or by electronic
transmission by the commissioner or a delegate into the
computerized filing system of the secretary of state. The
secretary of state shall transmit the notice electronically to
the office of the county recorder, if that is the place of
filing, in the county or counties shown on the computer entry.
The filing officer, whether the county recorder or the secretary
of state, shall endorse and index a printout of the notice in
the same manner as if the notice had been mailed or delivered.
(2) County recorders and the secretary of state shall enter
information relative to lien notices, transcriptions, renewals,
and releases filed in their offices into the central database of
the secretary of state. For notices filed electronically with
the county recorders, the date and time of receipt of the notice
and county recorder's file number, and for notices filed
electronically with the secretary of state, the secretary of
state's recording information, must be entered by the filing
officer into the central database before the close of the
working day following the day of the original data entry by the
department of revenue.
The filing and indexing of all notices must be in
accordance with the filing and indexing of notices of federal
liens, certificates of release, and refiled notices under
section 272.483.
(c) Notwithstanding any other law to the contrary, the
department of revenue is exempt from payment of fees when a
lien, lien renewal, or lien transcription is offered for
recording. The recording fees must be paid along with the
release fee at the end of the month in which the release of lien
is recorded, after receipt of a monthly statement from a county
recorder or the secretary of state. The department of revenue
shall add the recording fees to the delinquent tax liability of
the taxpayer. Notwithstanding any other law to the contrary,
the fee for filing or recording a notice of lien, or lien
release, transcription, or renewal is $15.
(d) There is appropriated to the commissioner of revenue an
amount representing the cost of payment of recording fees to the
county recorders and the secretary of state. The commissioner
shall keep a separate accounting of the costs and of payments
for recording fees remitted by taxpayers, and make the records
available to the legislature upon request.
[EFFECTIVE DATE.] As to the protection of interests in
property of third parties, this section is effective for liens
of record and enforceable as of the day following final
enactment, and for liens filed thereafter. As to the place of
filing of liens against personal property, this section is
effective for liens filed on or after the day following final
enactment.
Sec. 4. Minnesota Statutes 2000, section 272.02,
subdivision 15, is amended to read:
Subd. 15. [PROPERTY USED TO GENERATE HYDROELECTRIC OR
HYDROMECHANICAL POWER.] To the extent provided by section 295.44
Notwithstanding the provisions of subdivision 39, and sections
272.01, subdivision 2, and 273.19, subdivision 1, real and
personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power on a site
owned by the federal government, the state, or a local
governmental unit which is and developed and operated pursuant
to the provisions of section 103G.535 is exempt from property
tax for all years during which the site is developed and
operated under the terms of a lease or agreement authorized by
section 103G.535.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2001 Supplement, 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
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 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
classification of the property for the current and prior
assessment, (6) a note that if the property is homestead and at
least 35 45 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 appeal and equalization, the review process established under
section 274.13, subdivision 1c, and the county board of appeal
and equalization. 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. 6. Minnesota Statutes 2001 Supplement, section
273.13, subdivision 24, is amended to read:
Subd. 24. [CLASS 3.] (a) Commercial and industrial
property and utility real and personal property is class 3a.
(1) Except as otherwise provided, each parcel of
commercial, industrial, or utility real property has a class
rate of 1.5 percent of the first tier of market value, and 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) All railroad operating property and All personal
property that is: (i) part of an electric generation,
transmission, or distribution system; or (ii) part of a pipeline
system transporting or distributing water, gas, crude oil, or
petroleum products; and (iii) not described in clause (3), and
all railroad operating property 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).
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and thereafter.
Sec. 7. Minnesota Statutes 2001 Supplement, 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
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. 8. Minnesota Statutes 2001 Supplement, section
273.1398, subdivision 4c, is amended 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) (b), multiplied by the maintenance of effort
percent for the calendar year as determined under subdivision
4b, paragraph (d) (a), 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 retroactively
to July 1, 2001, and thereafter.
Sec. 9. Minnesota Statutes 2001 Supplement, section
275.74, subdivision 2, is amended to read:
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) (7). The local governmental
unit shall submit a request to levy under section 275.70,
subdivision 5, clause (6) (7), 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.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2002 and 2003.
Sec. 10. Minnesota Statutes 2001 Supplement, 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 tax return within the time
prescribed, including an extension, or fails to file an
individual income tax return within six months after the due
date, a penalty of five percent of the amount of tax not paid by
the end of that period is added to the tax.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. Minnesota Statutes 2000, section 290.067,
subdivision 2a, is amended to read:
Subd. 2a. [INCOME.] (a) For purposes of this section,
"income" means the sum of the following:
(1) federal adjusted gross income as defined in section 62
of the Internal Revenue Code; and
(2) the sum of the following amounts to the extent not
included in clause (1):
(i) all nontaxable income;
(ii) the amount of a passive activity loss that is not
disallowed as a result of section 469, paragraph (i) or (m) of
the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal
Revenue Code;
(iii) an amount equal to the total of any discharge of
qualified farm indebtedness of a solvent individual excluded
from gross income under section 108(g) of the Internal Revenue
Code;
(iv) cash public assistance and relief;
(v) any pension or annuity (including railroad retirement
benefits, all payments received under the federal Social
Security Act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or
spouse, or which was funded exclusively by the claimant or
spouse and which funding payments were excluded from federal
adjusted gross income in the years when the payments were made;
(vi) interest received from the federal or a state
government or any instrumentality or political subdivision
thereof;
(vii) workers' compensation;
(viii) nontaxable strike benefits;
(ix) the gross amounts of payments received in the nature
of disability income or sick pay as a result of accident,
sickness, or other disability, whether funded through insurance
or otherwise;
(x) a lump sum distribution under section 402(e)(3) of the
Internal Revenue Code;
(xi) contributions made by the claimant to an individual
retirement account, including a qualified voluntary employee
contribution; simplified employee pension plan; self-employed
retirement plan; cash or deferred arrangement plan under section
401(k) of the Internal Revenue Code; or deferred compensation
plan under section 457 of the Internal Revenue Code; and
(xii) nontaxable scholarship or fellowship grants.
In the case of an individual who files an income tax return
on a fiscal year basis, the term "federal adjusted gross income"
means federal adjusted gross income reflected in the fiscal year
ending in the next calendar year. Federal adjusted gross income
may not be reduced by the amount of a net operating loss
carryback or carryforward or a capital loss carryback or
carryforward allowed for the year.
(b) "Income" does not include:
(1) amounts excluded pursuant to the Internal Revenue Code,
sections 101(a) and 102;
(2) amounts of any pension or annuity that were exclusively
funded by the claimant or spouse if the funding payments were
not excluded from federal adjusted gross income in the years
when the payments were made;
(3) surplus food or other relief in kind supplied by a
governmental agency;
(4) relief granted under chapter 290A; and
(5) child support payments received under a temporary or
final decree of dissolution or legal separation; and
(6) restitution payments received by eligible individuals
and excludable interest as defined in section 803 of the
Economic Growth and Tax Relief Reconciliation Act of 2001,
Public Law Number 107-16.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000.
Sec. 12. Minnesota Statutes 2001 Supplement, section
290.0675, subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section the following terms have the meanings given.
(b) "Earned income" means the sum of the following, to the
extent included in Minnesota taxable income:
(1) earned income as defined in section 32(c)(2) of the
Internal Revenue Code;
(2) income received from a retirement pension,
profit-sharing, stock bonus, or annuity plan; and
(3) 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 minus
the sum of (i) the amount for one exemption under section 151(d)
of the Internal Revenue Code and (ii) one-half the amount of the
standard deduction under section 63(c)(2)(A) and (4) of the
Internal Revenue Code.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2000.
Sec. 13. Minnesota Statutes 2001 Supplement, section
290.0675, subdivision 3, is amended to read:
Subd. 3. [CREDIT AMOUNT.] The credit amount is 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.
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, 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 tax years
beginning after December 31, 2000.
Sec. 14. Minnesota Statutes 2001 Supplement, 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 290.36 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, 2001.
Sec. 15. Minnesota Statutes 2000, section 290.17,
subdivision 2, is amended to read:
Subd. 2. [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR
BUSINESS.] The income of a taxpayer subject to the allocation
rules that is not derived from the conduct of a trade or
business must be assigned in accordance with paragraphs (a) to
(f):
(a)(1) Subject to paragraphs (a)(2), (a)(3), and (a)(4),
income from wages as defined in section 3401(a) and (f) of the
Internal Revenue Code is assigned to this state if, and to the
extent that, the work of the employee is performed within it;
all other income from such sources is treated as income from
sources without this state.
Severance pay shall be considered income from labor or
personal or professional services.
(2) In the case of an individual who is a nonresident of
Minnesota and who is an athlete or entertainer, income from
compensation for labor or personal services performed within
this state shall be determined in the following manner:
(i) The amount of income to be assigned to Minnesota for an
individual who is a nonresident salaried athletic team employee
shall be determined by using a fraction in which the denominator
contains the total number of days in which the individual is
under a duty to perform for the employer, and the numerator is
the total number of those days spent in Minnesota. For purposes
of this paragraph, off-season training activities, unless
conducted at the team's facilities as part of a team imposed
program, are not included in the total number of duty days.
Bonuses earned as a result of play during the regular season or
for participation in championship, play-off, or all-star games
must be allocated under the formula. Signing bonuses are not
subject to allocation under the formula if they are not
conditional on playing any games for the team, are payable
separately from any other compensation, and are nonrefundable;
and
(ii) The amount of income to be assigned to Minnesota for
an individual who is a nonresident, and who is an athlete or
entertainer not listed in clause (i), for that person's athletic
or entertainment performance in Minnesota shall be determined by
assigning to this state all income from performances or athletic
contests in this state.
(3) For purposes of this section, amounts received by a
nonresident as "retirement income" as defined in section (b)(1)
of the State Income Taxation of Pension Income Act, Public Law
Number 104-95, are not considered income derived from carrying
on a trade or business or from wages or other compensation for
work an employee performed in Minnesota, and are not taxable
under this chapter.
(4) Wages, otherwise assigned to this state under clause
(1) and not qualifying under clause (3), are not taxable under
this chapter if the following conditions are met:
(i) the recipient was not a resident of this state for any
part of the taxable year in which the wages were received; and
(ii) the wages are for work performed while the recipient
was a resident of this state.
(b) Income or gains from tangible property located in this
state that is not employed in the business of the recipient of
the income or gains must be assigned to this state.
(c) Income or gains from intangible personal property not
employed in the business of the recipient of the income or gains
must be assigned to this state if the recipient of the income or
gains is a resident of this state or is a resident trust or
estate.
Gain on the sale of a partnership interest is allocable to
this state in the ratio of the original cost of partnership
tangible property in this state to the original cost of
partnership tangible property everywhere, determined at the time
of the sale. If more than 50 percent of the value of the
partnership's assets consists of intangibles, gain or loss from
the sale of the partnership interest is allocated to this state
in accordance with the sales factor of the partnership for its
first full tax period immediately preceding the tax period of
the partnership during which the partnership interest was sold.
Gain on the sale of goodwill or income from a covenant not
to compete that is connected with a business operating all or
partially in Minnesota is allocated to this state to the extent
that the income from the business in the year preceding the year
of sale was assignable to Minnesota under subdivision 3.
When an employer pays an employee for a covenant not to
compete, the income allocated to this state is in the ratio of
the employee's service in Minnesota in the calendar year
preceding leaving the employment of the employer over the total
services performed by the employee for the employer in that year.
(d) Income from winnings on Minnesota pari-mutuel betting
tickets, the Minnesota state lottery, and lawful gambling as
defined in section 349.12, subdivision 24, conducted within the
boundaries of the state of Minnesota shall be assigned to this
state a bet made by an individual while in Minnesota is assigned
to this state. In this paragraph, "bet" has the meaning given
in section 609.75, subdivision 2, as limited by section 609.75,
subdivision 3, clauses (1), (2), and (3).
(e) All items of gross income not covered in paragraphs (a)
to (d) and not part of the taxpayer's income from a trade or
business shall be assigned to the taxpayer's domicile.
(f) For the purposes of this section, working as an
employee shall not be considered to be conducting a trade or
business.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2001.
Sec. 16. Minnesota Statutes 2000, section 290.17,
subdivision 3, is amended to read:
Subd. 3. [TRADE OR BUSINESS INCOME; GENERAL RULE.] All
income of a trade or business is subject to apportionment except
nonbusiness income. Income derived from carrying on a trade or
business must be assigned to this state if the trade or business
is conducted wholly within this state, assigned outside this
state if conducted wholly without this state and apportioned
between this state and other states and countries under this
subdivision if conducted partly within and partly without this
state. For purposes of determining whether a trade or business
is carried on exclusively within or without this state:
(a) A trade or business physically located exclusively
within this state is nevertheless carried on partly within and
partly without this state if any of the principles set forth in
section 290.191 for the allocation of sales or receipts within
or without this state when applied to the taxpayer's situation
result in the allocation of any sales or receipts without this
state.
(b) A trade or business physically located exclusively
without this state is nevertheless carried on partly within and
partly without this state if any of the principles set forth in
section 290.191 for the allocation of sales or receipts within
or without this state when applied to the taxpayer's situation
result in the allocation of any sales or receipts without within
this state. The jurisdiction to tax such a business under this
chapter must be determined in accordance with sections 290.014
and 290.015.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2001.
Sec. 17. Minnesota Statutes 2000, section 290A.03,
subdivision 3, is amended to read:
Subd. 3. [INCOME.] (1) "Income" means the sum of the
following:
(a) federal adjusted gross income as defined in the
Internal Revenue Code; and
(b) the sum of the following amounts to the extent not
included in clause (a):
(i) all nontaxable income;
(ii) the amount of a passive activity loss that is not
disallowed as a result of section 469, paragraph (i) or (m) of
the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal
Revenue Code;
(iii) an amount equal to the total of any discharge of
qualified farm indebtedness of a solvent individual excluded
from gross income under section 108(g) of the Internal Revenue
Code;
(iv) cash public assistance and relief;
(v) any pension or annuity (including railroad retirement
benefits, all payments received under the federal Social
Security Act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or
spouse, or which was funded exclusively by the claimant or
spouse and which funding payments were excluded from federal
adjusted gross income in the years when the payments were made;
(vi) interest received from the federal or a state
government or any instrumentality or political subdivision
thereof;
(vii) workers' compensation;
(viii) nontaxable strike benefits;
(ix) the gross amounts of payments received in the nature
of disability income or sick pay as a result of accident,
sickness, or other disability, whether funded through insurance
or otherwise;
(x) a lump sum distribution under section 402(e)(3) of the
Internal Revenue Code;
(xi) contributions made by the claimant to an individual
retirement account, including a qualified voluntary employee
contribution; simplified employee pension plan; self-employed
retirement plan; cash or deferred arrangement plan under section
401(k) of the Internal Revenue Code; or deferred compensation
plan under section 457 of the Internal Revenue Code; and
(xii) nontaxable scholarship or fellowship grants.
In the case of an individual who files an income tax return
on a fiscal year basis, the term "federal adjusted gross income"
shall mean federal adjusted gross income reflected in the fiscal
year ending in the calendar year. Federal adjusted gross income
shall not be reduced by the amount of a net operating loss
carryback or carryforward or a capital loss carryback or
carryforward allowed for the year.
(2) "Income" does not include:
(a) amounts excluded pursuant to the Internal Revenue Code,
sections 101(a) and 102;
(b) amounts of any pension or annuity which was exclusively
funded by the claimant or spouse and which funding payments were
not excluded from federal adjusted gross income in the years
when the payments were made;
(c) surplus food or other relief in kind supplied by a
governmental agency;
(d) relief granted under this chapter;
(e) child support payments received under a temporary or
final decree of dissolution or legal separation; or
(f) holocaust settlement payments as defined in section
290.01, subdivision 32 restitution payments received by eligible
individuals and excludable interest as defined in section 803 of
the Economic Growth and Tax Relief Reconciliation Act of 2001,
Public Law Number 107-16.
(3) The sum of the following amounts may be subtracted from
income:
(a) for the claimant's first dependent, the exemption
amount multiplied by 1.4;
(b) for the claimant's second dependent, the exemption
amount multiplied by 1.3;
(c) for the claimant's third dependent, the exemption
amount multiplied by 1.2;
(d) for the claimant's fourth dependent, the exemption
amount multiplied by 1.1;
(e) for the claimant's fifth dependent, the exemption
amount; and
(f) if the claimant or claimant's spouse was disabled or
attained the age of 65 on or before December 31 of the year for
which the taxes were levied or rent paid, the exemption amount.
For purposes of this subdivision, the "exemption amount"
means the exemption amount under section 151(d) of the Internal
Revenue Code for the taxable year for which the income is
reported.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 18. Minnesota Statutes 2001 Supplement, 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
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 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 "gross property taxes
payable" means 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 gross property taxes payable in 2002.
Sec. 19. Minnesota Statutes 2001 Supplement, section
295.60, is amended by adding a subdivision to read:
Subd. 1a. [USE TAX; CREDIT FOR TAXES PAID.] (a) A person
that receives fur clothing for use or storage in Minnesota,
other than from a furrier that paid the tax under subdivision 1,
is subject to tax at the rate imposed under subdivision 1.
Liability for the tax is incurred when the person has possession
of the fur clothing in Minnesota. The tax must be remitted to
the commissioner in the manner prescribed by subdivision 3.
(b) A person that has paid taxes to another jurisdiction on
the same transaction and is subject to tax under this section is
entitled to a credit for the tax legally due and paid to another
jurisdiction to the extent of the lesser of (1) the tax actually
paid to the other jurisdiction, or (2) the amount of tax imposed
by Minnesota on the transaction subject to tax in the other
jurisdiction.
[EFFECTIVE DATE.] This section is effective for fur
clothing purchased and brought into Minnesota on or after
January 1, 2002.
Sec. 20. Minnesota Statutes 2001 Supplement, section
295.60, is amended by adding a subdivision to read:
Subd. 1b. [TAX COLLECTION REQUIRED.] A furrier with nexus
in Minnesota, who is not subject to tax under subdivision 1, is
required to collect the tax imposed under subdivision 1a from
the purchaser of the clothing made from fur and give the
purchaser a receipt for the tax paid. The tax collected must be
remitted to the commissioner in the manner prescribed by
subdivision 3.
[EFFECTIVE DATE.] This section is effective for fur
clothing purchased and brought into Minnesota on or after
January 1, 2002.
Sec. 21. Minnesota Statutes 2001 Supplement, section
295.60, is amended by adding a subdivision to read:
Subd. 1c. [TAXES PAID TO ANOTHER JURISDICTION; CREDIT.] A
furrier that has paid taxes to another jurisdiction measured by
gross revenue and is subject to tax under this section on the
same gross revenues is entitled to a credit for the tax legally
due and paid to another jurisdiction to the extent of the lesser
of (1) the tax actually paid to the other jurisdiction, or (2)
the amount of tax imposed by Minnesota on the gross revenues
subject to tax in the other taxing jurisdictions.
[EFFECTIVE DATE.] This section is effective for gross
revenues received on or after January 1, 2002.
Sec. 22. Minnesota Statutes 2001 Supplement, section
295.60, subdivision 7, is amended to read:
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, 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 this section.
[EFFECTIVE DATE.] This section is effective January 1, 2002.
Sec. 23. Minnesota Statutes 2000, section 296A.18,
subdivision 8, is amended to read:
Subd. 8. [AVIATION FUEL TAX STATE AIRPORTS FUND.] The
revenues derived from the excise taxes on aviation gasoline and
on special fuel received, sold, stored, or withdrawn from
storage as substitutes for aviation gasoline, shall be paid into
the state treasury and credited to the aviation fuel tax state
airports fund. There is hereby appropriated such sums as are
needed to carry out the provisions of this subdivision.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 24. Minnesota Statutes 2001 Supplement, 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) repair and replacement parts for emergency rescue
vehicles, fire trucks, and fire apparatus to a political
subdivision;
(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;
(3) chore and homemaking services to a political
subdivision of the state to be provided to elderly or disabled
individuals;
(4) telephone services to the department of administration
that are used to provide telecommunications services through the
intertechnologies revolving fund;
(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;
(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;
(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), exempt from taxation under section 473.448, or exempt from
the motor vehicle sales tax under section 297B.03, clause (12);
(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
(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 the day
following final enactment.
Sec. 25. Minnesota Statutes 2000, section 297I.05,
subdivision 11, is amended to read:
Subd. 11. [RETALIATORY PROVISIONS.] (a) If any other state
or country imposes any taxes, fines, deposits, penalties,
licenses, or fees upon any insurance companies of this state and
their agents doing business in another state or country that are
in addition to or in excess of those imposed by the laws of this
state upon foreign insurance companies and their agents doing
business in this state, the same taxes, fines, deposits,
penalties, licenses, and fees are imposed upon every similar
insurance company of that state or country and their agents
doing or applying to do business in this state.
(b) If any conditions precedent to the right to do business
in any other state or country are imposed by the laws of that
state or country, beyond those imposed upon foreign companies by
the laws of this state, the same conditions precedent are
imposed upon every similar insurance company of that state or
country and their agents doing or applying to do business in
that state.
(c) For purposes of this subdivision, "taxes, fines,
deposits, penalties, licenses, or fees" means an amount of money
that is deposited in the general revenue fund of the state or
other similar fund in another state or country and is not
dedicated to a special purpose or use or money deposited in the
general revenue fund of the state or other similar fund in
another state or country and appropriated to the commissioner of
commerce or insurance for the operation of the department of
commerce or other similar agency with jurisdiction over
insurance. Taxes, fines, deposits, penalties, licenses, or fees
do not include:
(1) special purpose obligations or assessments imposed in
connection with particular kinds of insurance, including but not
limited to assessments imposed in connection with residual
market mechanisms; or
(2) assessments made by the insurance guaranty association,
life and health guarantee association, or similar association.
(d) This subdivision applies to taxes imposed under
subdivisions 1, 3, 4, 6, and 12, paragraph (a), clauses (1) and
(3) (2).
(e) This subdivision does not apply to insurance companies
organized or domiciled in a state or country, the laws of which
do not impose retaliatory taxes, fines, deposits, penalties,
licenses, or fees or which grant, on a reciprocal basis,
exemptions from retaliatory taxes, fines, deposits, penalties,
licenses, or fees to insurance companies domiciled in this state.
[EFFECTIVE DATE.] This section is effective retroactively
to tax years beginning on or after January 1, 2001.
Sec. 26. Minnesota Statutes 2000, section 477A.011,
subdivision 20, is amended to read:
Subd. 20. [CITY NET TAX CAPACITY.] "City net tax capacity"
means (1) the net tax capacity computed using the net tax
capacity rates in section 273.13 for taxes payable in the year
of the aid distribution, and the market values for taxes payable
in the year prior to the aid distribution plus (2) a city's
fiscal disparities distribution tax capacity under section
276A.06, subdivision 2, paragraph (b), or 473F.08, subdivision
2, paragraph (b), for taxes payable in the year prior to that
for which aids are being calculated. The market value utilized
in computing city net tax capacity shall be reduced by the sum
of (1) a city's market value of commercial industrial property
as defined in section 276A.01, subdivision 3, or 473F.02,
subdivision 3, multiplied by the ratio determined pursuant to
section 276A.06, subdivision 2, paragraph (a), or 473F.08,
subdivision 2, paragraph (a), (2) the market value of the
captured value of tax increment financing districts as defined
in section 469.177, subdivision 2, and (3) the market value of
transmission lines deducted from a city's total net tax capacity
under section 273.425. The city net tax capacity will be
computed using equalized market values.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2002 and thereafter.
Sec. 27. Minnesota Statutes 2001 Supplement, section
477A.013, subdivision 9, is amended to read:
Subd. 9. [CITY AID DISTRIBUTION.] (a) In calendar year
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) 40 percent of the
city's net levy for taxes payable in the year prior to the aid
distribution plus (2) 40 percent of 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 plus (3) its total aid in the previous year under
this section.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2002 and thereafter.
Sec. 28. Minnesota Statutes 2001 Supplement, section
477A.07, subdivision 1, is amended to read:
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 0.25 percent of the assessment
year 2001 market value of class 4b property, as defined in
section 273.13, subdivision 25, multiplied by the jurisdiction's
average tax rate for taxes payable in 2002, 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, multiplied by the jurisdiction's average tax rate for taxes
payable in 2003, 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.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2003 and thereafter.
Sec. 29. Minnesota Statutes 2001 Supplement, section
477A.07, subdivision 3, is amended to read:
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, and the
maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (b) or (c), is increased by
the same amount 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, and
the maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (b) or _(c), is increased by
the same amount for aid payable in 2004.
[EFFECTIVE DATE.] This section is effective for aids
payable in calendar years 2003 and 2004.
Sec. 30. Laws 1993, chapter 375, article 5, section 42, is
amended to read:
Sec. 42. [REPORT TO LEGISLATURE.]
By February March 1 of each year, the commissioner of
revenue shall make a report to the legislature on the use of
limited market value under section 273.13, subdivision 1a, and
the valuation exclusion under section 273.13, subdivision 16.
For the limited market value provision, the report shall include
the total value excluded from taxation by type of property for
each city and town. For the valuation exclusion provision, the
report shall include the total market value excluded from
taxation for each city and town, as well as a breakdown of the
excluded improvement amounts by age and value of the property
being improved and the amount of the qualifying improvement.
The county assessors shall provide the information necessary for
the commissioner to compile the report in a manner prescribed by
the commissioner.
Sec. 31. Laws 2001, First Special Session chapter 5,
article 9, section 3, the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2001, except that the amendment
to clause clauses (3) is and (12) are effective for tax years
beginning after December 31, 2000.
Sec. 32. [REPEALER.]
(a) Minnesota Statutes 2000, sections 272.02, subdivision
40; 290.01, subdivisions 19g and 32; and 295.44, are repealed
effective the day following final enactment.
(b) Minnesota Statutes 2000, section 290.0921, subdivision
5, is repealed effective for taxable years beginning after
December 31, 2001.
(c) Minnesota Rules, parts 8130.1400; 8130.2100; 8130.2350;
8130.2600; 8130.3000; 8130.3850; and 8130.5000, are repealed
effective the day following final enactment.
ARTICLE 11
LOCAL LAWS
Section 1. [CITY OF MOORHEAD; TAX LEVY AUTHORIZED.]
(a) Each year the city of Moorhead may impose a tax on all
class 3a and class 3b property located in the city in an amount
which the city determines is equal to the reduction in revenues
from increment from all tax increment financing districts in the
city resulting from the class rate changes and the elimination
of the state-determined general education property levy under
Laws 2001, First Special Session chapter 5. The proceeds of
this tax may only be used to pay preexisting obligations as
defined in Minnesota Statutes, section 469.1763, subdivision 6,
whether general obligations or payable wholly from tax
increments. The tax must be levied and collected in the same
manner and as part of the property tax levied by the city and is
subject to the same administrative, penalty, and enforcement
provisions. A tax imposed under this section is a special levy
and is not subject to levy limitations under Minnesota Statutes,
section 275.71.
(b) This section expires December 31, 2005.
[EFFECTIVE DATE.] This section is effective upon approval
by and compliance with Minnesota Statutes, section 645.021,
subdivision 3, by the governing body of the city of Moorhead.
Sec. 2. [ST. CLOUD AREA CITIES; TAXES AUTHORIZED.]
Subdivision 1. [SALES AND USE TAX.] (a) Notwithstanding
Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, the following cities may, by
ordinance, impose a sales and use tax of one-half of one percent
for the purposes specified in subdivision 2:
(1) the city of St. Cloud, pursuant to the approval of the
city voters at the general election held on November 7, 2000;
(2) the city of Sartell, pursuant to the approval of the
city voters at an election held in November 1999; and
(3) each of the cities of Sauk Rapids, Waite Park, St.
Joseph, and St. Augusta, pursuant to the approval of the voters
of that city at the next general election following the date of
final enactment of this act, as provided for in subdivision 3.
(b) The provisions of Minnesota Statutes, section 297A.99,
govern the imposition, administration, collection, and
enforcement of the taxes authorized under this subdivision.
(c) The tax in Sartell must be used for the purposes listed
in subdivision 2, notwithstanding other purposes listed in the
referendum, and are not subject to the requirements of Minnesota
Statutes, section 297A.99, subdivision 3.
Subd. 2. [USE OF REVENUES.] (a) Revenues received from the
taxes authorized under subdivision 1 must be used for the cost
of collecting and administering the taxes and to pay all or part
of the capital or administrative costs of the acquisition,
construction, and improvement of the main runway improvements to
the St. Cloud Regional Airport, as provided for in the city of
St. Cloud capital improvement program 2000 to 2005, adopted by
the St. Cloud planning commission on July 14, 1999. Authorized
expenses include, but are not limited to, acquiring property,
paying construction expenses related to the development of these
facilities, and securing and paying debt service on bonds or
other obligations issued to finance construction or improvement
of the authorized facility.
(b) If revenues collected from the taxes imposed under
subdivision 1 are greater than the amount needed to meet
obligations under paragraph (a) in any year, the surplus may be
returned to the cities in a manner agreed upon by the
participating cities under this section, to be used by the
cities for projects of regional significance, limited to: the
acquisition and improvement of park land and open space; the
purchase, renovation, and construction of public buildings and
land primarily used for the arts, libraries, and community
centers; major roadway improvements; and for debt service on
bonds issued for these purposes. Authorized expenses include,
but are not limited to, acquiring property, paying construction
expenses related to the development of these facilities, and
securing and paying debt service on bonds or other obligations
issued to finance construction or improvement of the authorized
facility. The distribution of surplus revenues raised by the
tax must be determined by an applicable joint powers agreement.
The revenues returned to each city may only be used to fund
projects that have been approved by voters at the referendum
authorizing the tax.
(c) Pursuant to the approval of the St. Cloud voters at the
general election held on November 7, 2000, the surplus returned
to St. Cloud under paragraph (b) must be used for the following
projects:
(1) intersection improvements to the 25th Avenue and trunk
highway No. 23, I-94 interchange at county road 75, 10th Street
South improvements, the West Metro corridor improvements, and
other regionally significant road projects; and
(2) park and nature land purchase, trail development, and
improvements and expansions of existing regional park
facilities, as provided for in the city of St. Cloud capital
improvement program 2000 to 2005, adopted by the St. Cloud
planning commission on July 14, 1999.
(d) Pursuant to approval of the Sartell voters at the
election held in November 1999, the surplus returned to the city
of Sartell under paragraph (b) must be used to fund
construction, expansion, and improvements to a community center
and for park land acquisition and improvement.
Subd. 3. [SEPARATE REFERENDA REQUIRED.] Notwithstanding
Minnesota Statutes, section 297A.99, subdivision 3, each city
listed in subdivision 1, clause (3), shall have a separate vote
on each project that it proposes to fund with the surplus tax
revenues it receives under subdivision 2, paragraph (b). For
these cities, the cost of each project to be funded by the taxes
authorized in subdivision 1 must be listed. Revenue may be used
to repay debt for a project that the city has already funded if
the project meets one of the authorized uses listed in
subdivision 2, paragraph (b), and the referenda states the
maximum amount of debt that will be repaid from the revenue.
The referendum must state that approval of using the tax
authorized in subdivision 1 for any project shall also indicate
approval to share the revenues collected from the tax with the
other cities in the area which have also passed a sales tax.
The sharing must be done in a manner agreed upon by all affected
cities under a joint powers agreement.
Subd. 4. [IMPOSITION AND TERMINATION OF TAX.] The tax
authorized by each city under subdivision 1 shall be imposed
beginning January 1, 2003, and shall expire December 31, 2005.
[EFFECTIVE DATE.] This section is effective July 1, 2002,
with respect to any city listed in subdivision 1, upon
compliance of the governing body of that city with Minnesota
Statutes, section 645.021, subdivision 3.
ARTICLE 12
MISCELLANEOUS
Section 1. Minnesota Statutes 2000, section 16A.152, is
amended by adding a subdivision to read:
Subd. 1b. [BUDGET RESERVE INCREASE.] On June 30, 2003, the
commissioner of finance shall transfer $3,900,000 to the budget
reserve account in the general fund. On June 30, 2004, the
commissioner of finance shall transfer $12,300,000 to the budget
reserve account in the general fund. On June 30, 2005, the
commissioner of finance shall transfer $12,000,000 to the budget
reserve account in the general fund. The amounts necessary for
this purpose are appropriated from the general fund.
Sec. 2. Minnesota Statutes 2000, section 40A.151,
subdivision 1, is amended to read:
Subdivision 1. [ESTABLISHMENT.] The Minnesota conservation
fund is established as an account in the state treasury. Money
from counties under section 40A.152 must be deposited in the
state treasury and credited one-half to the Minnesota
conservation fund account and one-half to the general fund.
[EFFECTIVE DATE.] This section is effective for money from
counties deposited in the state treasury after June 30, 2002.
Sec. 3. Minnesota Statutes 2000, section 40A.152,
subdivision 1, is amended to read:
Subdivision 1. [FEE.] A county that is a metropolitan
county under section 473.121, subdivision 4, has allowed
exclusive agricultural zones to be created under this chapter,
or has elected to become an agricultural land preservation pilot
county, shall impose an additional fee of $5 per transaction on
the recording or registration of a mortgage subject to the tax
under section 287.05 and an additional $5 on the recording or
registration of a deed subject to the tax under section 287.21.
One-half of the fee must be deposited in a special conservation
account to be created in the county general revenue fund and
one-half must be transferred to the commissioner of revenue for
deposit in the state treasury and credited to the Minnesota
conservation fund pursuant to section 40A.151, subdivision 1.
[EFFECTIVE DATE.] This section is effective July 1, 2002,
and thereafter.
Sec. 4. Minnesota Statutes 2000, section 40A.152,
subdivision 3, is amended to read:
Subd. 3. [TRANSFER TO STATE FUND.] Money in the county
conservation account that is not encumbered by the county within
one year of deposit in the account must be transferred to the
commissioner of revenue for deposit in the Minnesota
conservation fund state treasury pursuant to section 40A.151,
subdivision 1.
Sec. 5. Minnesota Statutes 2000, section 270B.01,
subdivision 8, is amended to read:
Subd. 8. [MINNESOTA TAX LAWS.] For purposes of this
chapter only, unless expressly stated otherwise, "Minnesota tax
laws" means the taxes, refunds, and fees administered by or paid
to the commissioner under chapters 115B (except taxes imposed
under sections 115B.21 to 115B.24), 289A (except taxes imposed
under sections 298.01, 298.015, and 298.24), 290, 290A,
291, 295, 297A, and 297H and sections 295.50 to 295.59, or any
similar Indian tribal tax administered by the commissioner
pursuant to any tax agreement between the state and the Indian
tribal government, and includes any laws for the assessment,
collection, and enforcement of those taxes, refunds, and fees.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2001 Supplement, 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
data, in whatever form, given to the department of revenue by a
person, other than the data subject, who informs that a specific
taxpayer person is not or may not be in compliance with tax
laws, or nontax laws administered by the department of revenue,
including laws other than those relating to property taxes 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. 7. Minnesota Statutes 2000, section 270B.02,
subdivision 4, is amended to read:
Subd. 4. [PUBLIC DATA.] Information required to be filed
by exempt individuals, corporations, organizations, estates, and
trusts under section 290.05, subdivisions 1 and 4, or that
relates to exempt status under section 290.05, subdivision 2, is
public data on individuals or public data not on individuals, as
defined in section 13.02, subdivisions 14 and 15. The
commissioner may publish a list of organizations exempt from
taxation under section 290.05, except that the name or address
of any contributor to any organization that is or was exempt, or
that has applied for tax exempt status, or any other information
that could not be disclosed under section 6104 of the Internal
Revenue Code of 1986, as amended through December 31, 1988, is
classified as private data on individuals or nonpublic data as
defined in section 13.02, subdivisions 9 and 12.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 8. Minnesota Statutes 2001 Supplement, section
270B.08, subdivision 2, is amended to read:
Subd. 2. [REVOCATION.] When a taxpayer's sales tax permit
has been revoked under section 297A.86, the commissioner may
disclose data identifying the holder of the revoked permit and,
stating the basis for the revocation, and stating whether the
permit has been reinstated.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 9. Minnesota Statutes 2000, section 270B.14,
subdivision 8, is amended to read:
Subd. 8. [EXCHANGE BETWEEN DEPARTMENTS OF LABOR AND
INDUSTRY AND REVENUE.] The departments of labor and industry and
revenue may exchange information as follows:
(1) data used in determining whether a business is an
employer or a contracting agent;
(2) taxpayer identity information relating to employers and
employees for purposes of supporting tax administration and
chapter chapters 176, 177, and 181; and
(3) data to the extent provided in and for the purpose set
out in section 176.181, subdivision 8.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 2000, section 289A.10,
subdivision 1, is amended to read:
Subdivision 1. [RETURN REQUIRED.] In the case of a
decedent who has an interest in property with a situs in
Minnesota, the personal representative must submit a Minnesota
estate tax return to the commissioner, on a form prescribed by
the commissioner, in instances in which a federal estate tax
return is required to be filed if the federal gross estate
exceeds $700,000 for estates of decedents dying after December
31, 2001, and before January 1, 2004; $850,000 for estates of
decedents dying after December 31, 2003, and before January 1,
2005; $950,000 for estates of decedents dying after December 31,
2004, and before January 1, 2006; and $1,000,000 for estates of
decedents dying after December 31, 2005.
The return must contain a computation of the Minnesota
estate tax due. The return must be signed by the personal
representative.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2001.
Sec. 11. Minnesota Statutes 2001 Supplement, section
291.005, subdivision 1, is amended to read:
Subdivision 1. Unless the context otherwise clearly
requires, the following terms used in this chapter shall have
the following meanings:
(1) "Federal gross estate" means the gross estate of a
decedent as valued and otherwise determined for federal estate
tax purposes by federal taxing authorities pursuant to the
provisions of the Internal Revenue Code.
(2) "Minnesota gross estate" means the federal gross estate
of a decedent after (a) excluding therefrom any property
included therein which has its situs outside Minnesota and
pensions exempt from tax under this chapter pursuant to section
352.15, subdivision 1; 353.15, subdivision 1; 354.10,
subdivision 1; 354B.30; or 354C.165, 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,
2000.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2001.
Sec. 12. Minnesota Statutes 2000, section 291.03,
subdivision 1, is amended to read:
Subdivision 1. [TAX AMOUNT.] The tax imposed shall be an
amount equal to the proportion of the maximum credit
allowable computed under section 2011 of the Internal Revenue
Code for state death taxes as the Minnesota gross estate bears
to the value of the federal gross estate. For a resident
decedent, the tax shall be the maximum credit allowable computed
under section 2011 of the Internal Revenue Code reduced by the
amount of the death tax paid the other state and credited
against the federal estate tax if this results in a larger
amount of tax than the proportionate amount of the credit. The
tax determined under this paragraph shall not be greater than
the maximum credit allowable under section 2011 of the Internal
Revenue Code federal estate tax computed under section 2001 of
the Internal Revenue Code after the allowance of the federal
credits allowed under sections 2010, 2012, 2013, and 2015 of the
Internal Revenue Code of 1986, as amended through December 31,
2000.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2001.
Sec. 13. Minnesota Statutes 2000, section 297H.06,
subdivision 2, is amended to read:
Subd. 2. [MATERIALS.] The tax is not imposed upon charges
to generators of mixed municipal solid waste or upon the volume
of non-mixed-municipal solid waste for waste management services
to manage the following materials:
(1) mixed municipal solid waste and non-mixed-municipal
solid waste generated outside of Minnesota;
(2) recyclable materials that are separated for recycling
by the generator, collected separately from other waste, and
recycled, to the extent the price of the service for handling
recyclable material is separately itemized;
(3) recyclable non-mixed-municipal solid waste that is
separated for recycling by the generator, collected separately
from other waste, delivered to a waste facility for the purpose
of recycling, and recycled;
(4) industrial waste, when it is transported to a facility
owned and operated by the same person that generated it;
(5) mixed municipal solid waste from a recycling facility
that separates or processes recyclable materials and reduces the
volume of the waste by at least 85 percent, provided that the
exempted waste is managed separately from other waste;
(6) recyclable materials that are separated from mixed
municipal solid waste by the generator, collected and delivered
to a waste facility that recycles at least 85 percent of its
waste, and are collected with mixed municipal solid waste that
is segregated in leakproof bags, provided that the mixed
municipal solid waste does not exceed five percent of the total
weight of the materials delivered to the facility and is
ultimately delivered to a waste facility identified as a
preferred waste management facility in county solid waste plans
under section 115A.46;
(7) through December 31, 2002, source-separated compostable
waste, if the waste is delivered to a facility exempted as
described in this clause. To initially qualify for an
exemption, a facility must apply for an exemption in its
application for a new or amended solid waste permit to the
pollution control agency. The first time a facility applies to
the agency it must certify in its application that it will
comply with the criteria in items (i) to (v) and the
commissioner of the agency shall so certify to the commissioner
of revenue who must grant the exemption. For each subsequent
calendar year, by October 1 of the preceding year, the facility
must apply to the agency for certification to renew its
exemption for the following year. The application must be filed
according to the procedures of, and contain the information
required by, the agency. The commissioner of revenue shall
grant the exemption if the commissioner of the pollution control
agency finds and certifies to the commissioner of revenue that
based on an evaluation of the composition of incoming waste and
residuals and the quality and use of the product:
(i) generators separate materials at the source;
(ii) the separation is performed in a manner appropriate to
the technology specific to the facility that:
(A) maximizes the quality of the product;
(B) minimizes the toxicity and quantity of residuals; and
(C) provides an opportunity for significant improvement in
the environmental efficiency of the operation;
(iii) the operator of the facility educates generators, in
coordination with each county using the facility, about
separating the waste to maximize the quality of the waste stream
for technology specific to the facility;
(iv) process residuals do not exceed 15 percent of the
weight of the total material delivered to the facility; and
(v) the final product is accepted for use;
(8) waste and waste by-products for which the tax has been
paid; and
(9) daily cover for landfills that has been approved in
writing by the Minnesota pollution control agency.
Sec. 14. Minnesota Statutes 2001 Supplement, section
349.12, subdivision 25, is amended to read:
Subd. 25. [LAWFUL PURPOSE.] (a) "Lawful purpose" means one
or more of the following:
(1) any expenditure by or contribution to a 501(c)(3) or
festival organization, as defined in subdivision 15a, provided
that the organization and expenditure or contribution are in
conformity with standards prescribed by the board under section
349.154, which standards must apply to both types of
organizations in the same manner and to the same extent;
(2) a contribution to an individual or family suffering
from poverty, homelessness, or physical or mental disability,
which is used to relieve the effects of that poverty,
homelessness, or disability;
(3) a contribution to an individual for treatment for
delayed posttraumatic stress syndrome or a contribution to a
program recognized by the Minnesota department of human services
for the education, prevention, or treatment of compulsive
gambling;
(4) a contribution to or expenditure on a public or private
nonprofit educational institution registered with or accredited
by this state or any other state;
(5) a contribution to a scholarship fund for defraying the
cost of education to individuals where the funds are awarded
through an open and fair selection process;
(6) activities by an organization or a government entity
which recognize humanitarian or military service to the United
States, the state of Minnesota, or a community, subject to rules
of the board, provided that the rules must not include mileage
reimbursements in the computation of the per occasion
reimbursement limit and must impose no aggregate annual limit on
the amount of reasonable and necessary expenditures made to
support:
(i) members of a military marching or color guard unit for
activities conducted within the state;
(ii) members of an organization solely for services
performed by the members at funeral services; or
(iii) members of military marching, color guard, or honor
guard units may be reimbursed for participating in color guard,
honor guard, or marching unit events within the state or states
contiguous to Minnesota at a per participant rate of up to $35
per occasion;
(7) recreational, community, and athletic facilities and
activities intended primarily for persons under age 21, provided
that such facilities and activities do not discriminate on the
basis of gender and the organization complies with section
349.154;
(8) payment of local taxes authorized under this chapter,
taxes imposed by the United States on receipts from lawful
gambling, the taxes imposed by section 297E.02, subdivisions 1,
4, 5, and 6, and the tax imposed on unrelated business income by
section 290.05, subdivision 3;
(9) payment of real estate taxes and assessments on
permitted gambling premises wholly owned by the licensed
organization paying the taxes, or wholly leased by a licensed
veterans organization under a national charter organized under
section 501(c)(19) of the Internal Revenue Code, not to exceed:
(i) for premises used for bingo, the amount that an
organization may expend under board rules on rent for bingo; and
(ii) $35,000 per year for premises used for other forms of
lawful gambling;
(10) a contribution to the United States, this state or any
of its political subdivisions, or any agency or instrumentality
thereof other than a direct contribution to a law enforcement or
prosecutorial agency;
(11) a contribution to or expenditure by a nonprofit
organization which is a church or body of communicants gathered
in common membership for mutual support and edification in
piety, worship, or religious observances;
(12) payment of the reasonable costs of an audit required
in section 297E.06, subdivision 4, provided the annual audit is
filed in a timely manner with the department of revenue;
(13) a contribution to or expenditure on a wildlife
management project that benefits the public at-large, provided
that the state agency with authority over that wildlife
management project approves the project before the contribution
or expenditure is made;
(14) expenditures, approved by the commissioner of natural
resources, by an organization for grooming and maintaining
snowmobile trails and all-terrain vehicle trails that are (1)
grant-in-aid trails established under section 85.019, or (2)
other trails open to public use, including purchase or lease of
equipment for this purpose; or
(15) conducting nutritional programs, food shelves, and
congregate dining programs primarily for persons who are age 62
or older or disabled; or
(16) a contribution to a community arts organization, or an
expenditure to sponsor arts programs in the community, including
but not limited to visual, literary, performing, or musical arts.
(b) Notwithstanding paragraph (a), "lawful purpose" does
not include:
(1) any expenditure made or incurred for the purpose of
influencing the nomination or election of a candidate for public
office or for the purpose of promoting or defeating a ballot
question;
(2) any activity intended to influence an election or a
governmental decision-making process;
(3) the erection, acquisition, improvement, expansion,
repair, or maintenance of real property or capital assets owned
or leased by an organization, unless the board has first
specifically authorized the expenditures after finding that (i)
the real property or capital assets will be used exclusively for
one or more of the purposes in paragraph (a); (ii) with respect
to expenditures for repair or maintenance only, that the
property is or will be used extensively as a meeting place or
event location by other nonprofit organizations or community or
service groups and that no rental fee is charged for the use;
(iii) with respect to expenditures, including a mortgage payment
or other debt service payment, for erection or acquisition only,
that the erection or acquisition is necessary to replace with a
comparable building, a building owned by the organization and
destroyed or made uninhabitable by fire or natural disaster,
provided that the expenditure may be only for that part of the
replacement cost not reimbursed by insurance; (iv) with respect
to expenditures, including a mortgage payment or other debt
service payment, for erection or acquisition only, that the
erection or acquisition is necessary to replace with a
comparable building a building owned by the organization that
was acquired from the organization by eminent domain or sold by
the organization to a purchaser that the organization reasonably
believed would otherwise have acquired the building by eminent
domain, provided that the expenditure may be only for that part
of the replacement cost that exceeds the compensation received
by the organization for the building being replaced; or (v) with
respect to an expenditure to bring an existing building into
compliance with the Americans with Disabilities Act under item
(ii), an organization has the option to apply the amount of the
board-approved expenditure to the erection or acquisition of a
replacement building that is in compliance with the Americans
with Disabilities Act;
(4) an expenditure by an organization which is a
contribution to a parent organization, foundation, or affiliate
of the contributing organization, if the parent organization,
foundation, or affiliate has provided to the contributing
organization within one year of the contribution any money,
grants, property, or other thing of value;
(5) a contribution by a licensed organization to another
licensed organization unless the board has specifically
authorized the contribution. The board must authorize such a
contribution when requested to do so by the contributing
organization unless it makes an affirmative finding that the
contribution will not be used by the recipient organization for
one or more of the purposes in paragraph (a); or
(6) a contribution to a statutory or home rule charter
city, county, or town by a licensed organization with the
knowledge that the governmental unit intends to use the
contribution for a pension or retirement fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. Laws 2001, First Special Session chapter 6,
article 5, section 12, is amended to read:
Sec. 12. [SCHOOL DISTRICT FORMULA ADJUSTMENTS.]
Subdivision 1. [TAX RATE ADJUSTMENT.] The commissioner of
children, families, and learning must adjust each tax rate
established under Minnesota Statutes, chapters 120A to 127A, by
multiplying the rate by the ratio of the statewide net tax
capacity as calculated using the class rates in effect for
assessment year 2000 to the statewide total net tax capacity as
calculated using the class rates in effect for assessment year
2001, in both cases using taxable market values for assessment
year 2000.
Subd. 2. [EQUALIZING FACTORS.] The commissioner of
children, families, and learning must adjust each equalizing
factor based upon adjusted net tax capacity per actual pupil
unit established under Minnesota Statutes, chapters 120A to
127A, by multiplying the equalizing factor by the ratio of the
statewide net tax capacity as calculated using the class rates
in effect for assessment year 2001 to the statewide total net
tax capacity as calculated using the class rates in effect for
assessment year 2000, in both cases using taxable market values
for assessment year 2000.
Subd. 3. [DEBT SERVICE TAX RATES AND EQUALIZING FACTORS.]
The provisions in subdivisions 1 and 2 do not apply to the
equalizing factors and tax rates of the debt service
equalization aid program under Minnesota Statutes, section
123B.53.
Subd. 4. [SCHOOL DISTRICT BONDS.] The commissioner of
children, families, and learning must adjust the net debt limit
percentage for special school district No. 1, Minneapolis, based
upon net tax capacity established under Minnesota Statutes,
section 128D.11, subdivision 8, by multiplying the net debt
limit percentage by the ratio of the district's net tax capacity
as calculated using the class rates in effect for assessment
year 2000 to the district's total net tax capacity as calculated
using the class rates in effect for assessment year 2001, in
both cases using taxable market values for assessment year 2000.
[EFFECTIVE DATE.] This section is effective retroactively
for bonds issued after July 1, 2001.
Sec. 16. [CITY OF THIEF RIVER FALLS; NONPROFIT
CORPORATION.]
Subdivision 1. [NONPROFIT CORPORATION MAY BE ESTABLISHED.]
The city of Thief River Falls may incorporate or authorize the
incorporation of a nonprofit corporation to operate a community
or regional center in the city.
Subd. 2. [BOARD OF DIRECTORS.] The corporation must be
governed by a board of five directors. The directors must be
named by the Thief River Falls city council. No more than three
of the directors may be persons currently serving on the Thief
River Falls city council. Board members must not be compensated
for their services but may be reimbursed for reasonable expenses
incurred in connection with their duties as board members.
Subd. 3. [ARTICLES AND BYLAWS.] The entity must be
incorporated under Minnesota Statutes, chapter 317A, and
otherwise must comply with Minnesota Statutes, chapter 317A,
except to the extent Minnesota Statutes, chapter 317A, is
inconsistent with this section.
Subd. 4. [EMPLOYEES.] Persons employed by the nonprofit
corporation are not public employees and must not participate in
retirement, deferred compensation, insurance, or other plans
that apply to public employees generally.
Subd. 5. [STATUTORY COMPLIANCE.] The nonprofit corporation
must comply with Minnesota Statutes, section 465.719,
subdivisions 9, 10, 11, 12, 13, and 14.
Sec. 17. [APPROPRIATION.]
(a) $585,000 in fiscal year 2002 and $7,015,000 in fiscal
year 2003 are appropriated to the commissioner of revenue from
the general fund for tax compliance activities, including
identification and collection of tax liabilities from
individuals and businesses that currently do not pay all taxes
owed, and audit and collection activity in the income tax, sales
tax, lawful gambling, insurance, and corporate areas. The base
funding for these activities in fiscal years 2004 and 2005 is
increased by $4,750,000 each year.
(b) The commissioner must include these tax compliance
activities in the report required by Laws 2001, First Special
Session chapter 10, article 1, section 16, subdivision 2,
paragraph (c).
(c) Laws 2002, chapter 220, article 10, section 38, does
not apply to the positions necessary to carry out the compliance
activities identified in this section.
(d) If the legislative auditor determines that:
(1) actual revenue collections generated from tax
compliance activities funded by Laws 2001, First Special Session
chapter 10, article 1, section 16, subdivision 2, paragraphs (a)
and (b), will not generate at least $52,000,000 in additional
general fund revenue for the biennium ending June 30, 2003; or
(2) actual revenue collections generated from new tax
compliance activities funded by the appropriation in this
section will not generate at least $7,600,000 in additional
general fund revenue for the biennium ending June 30, 2003;
then the commissioner of finance must cancel from the budget
reserve account to the general fund the difference between the
$52,000,000 or the $7,600,000 and the actual additional general
fund revenue. The legislative auditor's determination under
this paragraph must be made in the February 1, 2003, report to
the legislature required by Laws 2001, First Special Session
chapter 10, article 1, section 16.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 18. [REPEALER.]
Minnesota Statutes 2000, section 291.03, subdivision 2, is
repealed effective for estates of decedents dying after December
31, 2001.
Presented to the governor May 15, 2002
Became law without the governor's signature May 18, 2002
Official Publication of the State of Minnesota
Revisor of Statutes