Office of the Revisor of Statutes
Minnesota Session Laws - 2003, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 127-S.F.No. 1505
An act relating to financing and operation of
government in this state; making changes to income,
corporate franchise, estate, property, sales and use,
motor vehicle sales, gross earnings, hazardous waste
generator, solid waste management, aggregate
materials, insurance premiums, taconite production,
and cigarette and tobacco taxes, and tax provisions;
changing, providing, or abolishing tax exemptions and
credits; changing property tax valuation, appraisal,
homestead, assessment, classification, levy, notice,
review, appeal, apportionment, distribution, and aid
provisions; conforming to certain changes in the
internal revenue code; modifying sales tax provisions
to comply with Streamlined Sales Tax Project
Agreement; providing for tax administration,
collection, compromise, compliance, liens, liability,
and enforcement; changing tax return, refund,
interest, and payment provisions; changing or imposing
certain requirements on assessors; changing provisions
relating to property tax refunds, tax increment
financing, border city development zones,
tax-forfeited land sales, recording or registration of
documents, revenue recapture, and sustainable forest
management incentives; clarifying commissioner of
revenue's rulemaking authority; changing taconite
production tax distribution provisions; authorizing
certain certificates of motor vehicle title;
authorizing certain sales by limited use vehicle
dealers; providing for public finance
instrumentalities and instruments; authorizing,
validating, expanding, limiting, and clarifying public
financing and economic development structures,
instruments, and procedures for local public entities;
imposing certain requirements for cigarettes shipped
for sale in another state; imposing a fee on
cigarettes produced by certain manufacturers;
authorizing a Central Lakes Region Sanitary District;
changing provisions relating to Cook county hospital
district; giving certain powers to the Iron Range
Resources and Rehabilitation Agency; giving certain
authority and powers to certain cities, towns, and
counties; authorizing actions by the metropolitan
mosquito control district; authorizing disclosure of
data and requiring access to certain records;
changing, clarifying, and imposing penalties; amending
Minnesota Statutes 2002, sections 8.30; 18B.07,
subdivision 2; 115B.24, subdivision 8; 168.27,
subdivision 4a; 168A.03; 168A.05, subdivision 1a;
216B.2424, subdivision 5; 270.059; 270.06; 270.10,
subdivision 1a; 270.67, subdivision 4; 270.69, by
adding a subdivision; 270.701, subdivision 2, by
adding a subdivision; 270.72, subdivision 2; 270A.03,
subdivision 2; 270B.12, by adding a subdivision;
272.02, subdivisions 31, 47, 53, by adding
subdivisions; 272.12; 273.01; 273.05, subdivision 1;
273.061, by adding subdivisions; 273.08; 273.11,
subdivision 1a; 273.124, subdivisions 1, 14; 273.13,
subdivisions 22, 23, 25; 273.1315; 273.134; 273.135,
subdivisions 1, 2; 273.1391, subdivision 2; 273.1398,
subdivisions 4b, 4d; 273.372; 273.42, subdivision 2;
274.01, subdivision 1; 274.13, subdivision 1; 275.025,
subdivisions 1, 3, 4; 276.10; 276.11, subdivision 1;
277.20, subdivision 2; 278.01, subdivision 4; 278.05,
subdivision 6; 279.06, subdivision 1; 281.17; 282.01,
subdivision 7a; 282.08; 289A.02, subdivision 7;
289A.10, subdivision 1; 289A.18, subdivision 4;
289A.19, subdivision 4; 289A.31, subdivisions 3, 4, by
adding a subdivision; 289A.36, subdivision 7, by
adding subdivisions; 289A.40, subdivision 2; 289A.50,
subdivision 2a, by adding subdivisions; 289A.56,
subdivisions 3, 4; 289A.60, subdivisions 7, 15, by
adding a subdivision; 290.01, subdivisions 19, 19a,
19b, 19c, 19d, 31; 290.06, subdivisions 2c, 24;
290.0671, subdivision 1; 290.0675, subdivisions 2, 3;
290.0679, subdivision 2; 290.0802, subdivision 1;
290A.03, subdivisions 8, 15; 290C.02, subdivisions 3,
7; 290C.03; 290C.07; 290C.09; 290C.10; 290C.11;
291.005, subdivision 1; 291.03, subdivision 1; 295.50,
subdivision 9b; 295.53, subdivision 1; 297A.61,
subdivisions 3, 7, 10, 12, 17, 30, 34, by adding
subdivisions; 297A.66, by adding a subdivision;
297A.665; 297A.668; 297A.67, subdivisions 2, 8, by
adding a subdivision; 297A.68, subdivisions 2, 5, 36,
by adding a subdivision; 297A.69, subdivisions 2, 3,
4; 297A.75, subdivision 4; 297A.81; 297A.85; 297A.99,
subdivisions 5, 10, 12; 297A.995, by adding a
subdivision; 297B.025, subdivisions 1, 2; 297B.035,
subdivision 1, by adding a subdivision; 297F.01,
subdivisions 21a, 23; 297F.05, subdivision 1; 297F.06,
subdivision 4; 297F.08, subdivision 7, by adding a
subdivision; 297F.09, subdivision 2; 297F.20,
subdivisions 1, 2, 3, 6, 9; 297H.06, subdivision 1;
297I.01, subdivision 9; 297I.20; 298.2211, subdivision
1; 298.27; 298.28, subdivision 4; 298.292, subdivision
2; 298.296, subdivision 4; 298.2961, by adding a
subdivision; 298.75, subdivision 1; 352.15,
subdivision 1; 353.15, subdivision 1; 354.10,
subdivision 1; 354B.30; 354C.165; 373.01, subdivision
3; 373.45, subdivision 1; 373.47, subdivision 1;
376.009; 376.55, subdivision 3, by adding a
subdivision; 376.56, subdivision 3; 410.32; 412.301;
469.1731, subdivision 3; 469.174, subdivisions 3, 6,
10, 25, by adding a subdivision; 469.175, subdivisions
1, 3, 4, 6; 469.176, subdivisions 1c, 2, 3, 7;
469.1763, subdivisions 1, 3, 6; 469.177, subdivisions
1, 12; 469.1771, subdivision 4, by adding a
subdivision; 469.178, subdivision 7; 469.1791,
subdivision 3; 469.1792, subdivisions 1, 2, 3;
469.1813, subdivision 8; 469.1815, subdivision 1;
473.39, by adding a subdivision; 473.702; 473.703,
subdivision 1; 473.704, subdivision 17; 473.705;
473.711, subdivision 2a; 473.714, subdivision 1;
473.898, subdivision 3; 473F.07, subdivision 4;
474A.061, subdivision 1; 475.58, subdivision 3b;
515B.1-116; Laws 1967, chapter 558, section 1,
subdivision 5, as amended; Laws 1989, chapter 211,
section 8, subdivisions 2, as amended, 4, as amended;
Laws 1997, chapter 231, article 10, section 25; Laws
2001, First Special Session chapter 5, article 3,
section 61; Laws 2001, First Special Session chapter
5, article 3, section 63; Laws 2001, First Special
Session chapter 5, article 9, section 12; Laws 2002,
chapter 377, article 6, section 4; Laws 2002, chapter
377, article 7, section 3; Laws 2002, chapter 377,
article 11, section 1; Laws 2002, chapter 377, article
12, section 17; proposing coding for new law in
Minnesota Statutes, chapters 37; 123A; 270; 273; 274;
275; 276; 290C; 297A; 297F; 410; 469; repealing
Minnesota Statutes 2002, sections 270.691, subdivision
8; 274.04; 290.0671, subdivision 3; 290.0675,
subdivision 5; 294.01; 294.02; 294.021; 294.03;
294.06; 294.07; 294.08; 294.09; 294.10; 294.11;
294.12; 297A.61, subdivisions 14, 15; 297A.69,
subdivision 5; 297A.72, subdivision 1; 297A.97;
298.24, subdivision 3; 473.711, subdivision 2b;
473.714, subdivision 2; 477A.065; Laws 1984, chapter
652, section 2; Laws 2002, chapter 377, article 9,
section 12; Minnesota Rules, parts 8007.0300, subpart
3; 8009.7100; 8009.7200; 8009.7300; 8009.7400;
8092.1000; 8106.0100, subparts 11, 15, 16; 8106.0200;
8125.1000; 8125.1300, subpart 1; 8125.1400; 8130.0800,
subparts 5, 12; 8130.1300; 8130.1600, subpart 5;
8130.1700, subparts 3, 4; 8130.4800, subpart 2;
8130.7500, subpart 5; 8130.8000; 8130.8300.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
SALES TAX
Section 1. Minnesota Statutes 2002, section 168.27,
subdivision 4a, is amended to read:
Subd. 4a. [LIMITED USED VEHICLE LICENSE.] A limited used
vehicle license shall be provided to a nonprofit charitable
organization that qualifies for tax exemption under section
501(c)(3) of the Internal Revenue Code whose primary business in
the transfer of vehicles is to raise funds for the corporation,
who acquires vehicles for sale through donation, and who uses a
licensed motor vehicle auctioneer to sell vehicles to retail
customers. This license does not apply to educational
institutions whose primary purpose is to train students in the
repair, maintenance, and sale of motor vehicles. A limited used
vehicle license allows the organization to accept assignment of
vehicles without the requirement to transfer title as provided
in section 168A.10 until sold to a retail customer or licensed
motor vehicle dealer. Limited used vehicle license holders are
not entitled to dealer plates, and shall report all vehicles
held for resale to the department of public safety in a manner
and time prescribed by the department.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2003.
Sec. 2. Minnesota Statutes 2002, section 168A.03, is
amended to read:
168A.03 [EXEMPT VEHICLES.]
Subdivision 1. The registrar shall not issue a certificate
of title for:
(1) a vehicle owned by the United States;
(2) a vehicle owned by a manufacturer or dealer and held
for sale, even though incidentally moved on the highway or used
pursuant to section 168.27 or 168.28, or a vehicle used by a
manufacturer solely for testing;
(3) a vehicle owned by a nonresident and not required by
law to be registered in this state;
(4) (3) a vehicle owned by a nonresident and regularly
engaged in the interstate transportation of persons or property
for which a currently effective certificate of title has been
issued in another state;
(5) (4) a vehicle moved solely by animal power;
(6) (5) an implement of husbandry;
(7) (6) special mobile equipment;
(8) (7) a self-propelled wheelchair or invalid tricycle;
(9) (8) a trailer (i) having a gross weight of 4,000 pounds
or less unless a secured party holds an interest in the trailer
or a certificate of title was previously issued by this state or
any other state or (ii) designed primarily for agricultural
purposes except recreational equipment or a manufactured home,
both as defined in section 168.011, subdivisions 8 and 25;
(10) (9) a snowmobile.
Subd. 2. [DEALERS.] No certificate of title need be
obtained for a vehicle owned by a manufacturer or dealer and
held for sale, even though incidentally moved on the highway or
used pursuant to section 168.27 or 168.28, or a vehicle used by
a manufacturer solely for testing.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2003.
Sec. 3. Minnesota Statutes 2002, section 289A.18,
subdivision 4, is amended to read:
Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use
tax returns must be filed on or before the 20th day of the month
following the close of the preceding reporting period, except
that annual use tax returns provided for under section 289A.11,
subdivision 1, must be filed by April 15 following the close of
the calendar year, in the case of individuals. Annual use tax
returns of businesses, including sole proprietorships, and
annual sales tax returns must be filed by February 5 following
the close of the calendar year.
(b) Returns for the June reporting period filed by
retailers required to remit their June liability under section
289A.20, subdivision 4, paragraph (b), are due on or before
August 20.
(c) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $500 per month in any
quarter of a calendar year, and has substantially complied with
the tax laws during the preceding four calendar quarters, the
retailer may request authorization to file and pay the taxes
quarterly in subsequent calendar quarters. The authorization
remains in effect during the period in which the retailer's
quarterly returns reflect sales and use tax liabilities of less
than $1,500 and there is continued compliance with state tax
laws.
(d) If a retailer has an average sales and use tax
liability, including local sales and use taxes administered by
the commissioner, equal to or less than $100 per month during a
calendar year, and has substantially complied with the tax laws
during that period, the retailer may request authorization to
file and pay the taxes annually in subsequent years. The
authorization remains in effect during the period in which the
retailer's annual returns reflect sales and use tax liabilities
of less than $1,200 and there is continued compliance with state
tax laws.
(e) The commissioner may also grant quarterly or annual
filing and payment authorizations to retailers if the
commissioner concludes that the retailers' future tax
liabilities will be less than the monthly totals identified in
paragraphs (c) and (d). An authorization granted under this
paragraph is subject to the same conditions as an authorization
granted under paragraphs (c) and (d).
(f) A taxpayer who is a materials supplier may report gross
receipts either on:
(1) the cash basis as the consideration is received; or
(2) the accrual basis as sales are made.
As used in this paragraph, "materials supplier" means a person
who provides materials for the improvement of real property; who
is primarily engaged in the sale of lumber and building
materials-related products to owners, contractors,
subcontractors, repairers, or consumers; who is authorized to
file a mechanics lien upon real property and improvements under
chapter 514; and who files with the commissioner an election to
file sales and use tax returns on the basis of this paragraph.
(g) Notwithstanding paragraphs (a) to (f), a seller that is
not a Model 1, 2, or 3 seller, as those terms are used in the
Streamlined Sales and Use Tax Agreement, that does not have a
legal requirement to register in Minnesota, and that is
registered under the agreement, must file a return by February 5
following the close of the calendar year in which the seller
initially registers, and must file subsequent returns on
February 5 on an annual basis in succeeding years.
Additionally, a return must be submitted on or before the 20th
day of the month following any month by which sellers have
accumulated state and local tax funds for the state in the
amount of $1,000 or more.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 4. Minnesota Statutes 2002, section 289A.40,
subdivision 2, is amended to read:
Subd. 2. [BAD DEBT LOSS.] If a claim relates to an
overpayment because of a failure to deduct a loss due to a bad
debt or to a security becoming worthless, the claim is
considered timely if filed within seven years from the date
prescribed for the filing of the return. A claim relating to an
overpayment of taxes under chapter 297A must be filed within
3-1/2 years from the date prescribed for filing the return, plus
any extensions granted for filing the return, but only if filed
within the extended time, or within one year from the date the
taxpayer's federal income tax return is timely filed claiming
the bad debt deduction, whichever period expires later. The
refund or credit is limited to the amount of overpayment
attributable to the loss. "Bad debt" for purposes of this
subdivision, has the same meaning as that term is used in United
States Code, title 26, section 166, except that the following
are excluded from the calculation of bad debt: financing
charges or interest; sales or use taxes charged on the purchase
price; uncollectible amounts on property that remain in the
possession of the seller until the full purchase price is paid;
expenses incurred in attempting to collect any debt; and
repossessed property.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 5. Minnesota Statutes 2002, section 289A.50, is
amended by adding a subdivision to read:
Subd. 2b. [CERTIFIED SERVICE PROVIDER; BAD DEBT CLAIM.] A
certified service provider, as defined in section 297A.995,
subdivision 2, may claim on behalf of a taxpayer that is its
client any bad debt allowance provided by section 297A.81. The
certified service provider must credit or refund to its client
the full amount of any bad debt allowance or refund received.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 6. Minnesota Statutes 2002, section 289A.50, is
amended by adding a subdivision to read:
Subd. 2c. [NOTICE FROM PURCHASER TO VENDOR REQUESTING
REFUND.] (a) If a vendor has collected from a purchaser a tax on
a transaction that is not subject to the tax imposed by chapter
297A, the purchaser may seek from the vendor a return of
over-collected sales or use taxes as follows:
(1) the purchaser must provide written notice to the
vendor;
(2) the notice to the vendor must contain the information
necessary to determine the validity of the request; and
(3) no cause of action against the vendor accrues until the
vendor has had 60 days to respond to the written notice.
(b) In connection with a purchaser's request from a vendor
of over-collected sales or use taxes, a vendor is presumed to
have a reasonable business practice, if in the collection of
such sales or use taxes, the vendor: (1) uses a certified
service provider as defined in section 297A.995, a certified
automated system, as defined in section 297A.995, or a
proprietary system that is certified by the state; and (2) has
remitted to the state all taxes collected less any deductions,
credits, or collection allowances.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 7. Minnesota Statutes 2002, section 289A.56,
subdivision 4, is amended to read:
Subd. 4. [CAPITAL EQUIPMENT AND CERTAIN BUILDING MATERIALS
REFUNDS; REFUNDS TO PURCHASERS.] Notwithstanding subdivision 3,
for refunds payable under section sections 297A.75, subdivision
1, clauses (1), (2), (3), and (5), interest is computed from the
date the refund claim is filed with the commissioner. For
refunds payable under section and 289A.50, subdivision 2a,
interest is computed from the 20th day of the month following
the month of the invoice date for the purchase which is the
subject of the refund, if the refund claim includes a detailed
schedule of purchases made during each of the periods in the
claim. If the refund claim submitted does not contain a
schedule reflecting purchases made in each period, interest is
computed from the date the claim was filed 90 days after the
refund claim is filed with the commissioner.
[EFFECTIVE DATE.] This section is effective for refund
claims filed on or after April 1, 2003.
Sec. 8. Minnesota Statutes 2002, 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 prewritten computer software whether delivered
electronically, by load and leave, or otherwise.
(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 onetime 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;
(5) delivery of aggregate materials and concrete block by a
third party if the delivery would be subject to the sales tax if
provided by the seller of the aggregate material or 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.
(k) A sale and a purchase includes the rental of a vehicle
by a motor vehicle dealer to a customer when (1) the vehicle is
rented by the customer for a consideration, or (2) the motor
vehicle dealer is reimbursed pursuant to a service contract as
defined in section 65B.29, subdivision 1, clause (1).
[EFFECTIVE DATE.] This section, paragraph (f), and the
changes made to paragraph (i) are effective for sales and
purchases made on or after January 1, 2004. This section,
paragraph (k), is effective for sales and purchases made on or
after July 1, 2003.
Sec. 9. Minnesota Statutes 2002, section 297A.61,
subdivision 7, is amended to read:
Subd. 7. [SALES PRICE.] (a) "Sales price" means the
measure subject to sales tax, and means the total amount of
consideration, including cash, credit, personal property, and
services, for which personal property or services are sold,
leased, or rented, valued in money, whether received in money or
otherwise, without any deduction for the following:
(1) the seller's cost of the property sold;
(2) the cost of materials used, labor or service cost,
interest, losses, all costs of transportation to the seller, all
taxes imposed on the seller, and any other expenses of the
seller;
(3) charges by the seller for any services necessary to
complete the sale, other than delivery and installation charges;
(4) delivery charges;
(5) installation charges; and
(6) the value of exempt property given to the purchaser
when taxable and exempt personal property have been bundled
together and sold by the seller as a single product or piece of
merchandise.
(b) Sales price does not include:
(1) discounts, including cash, terms, or coupons, that are
not reimbursed by a third party and that are allowed by the
seller and taken by a purchaser on a sale;
(2) interest, financing, and carrying charges from credit
extended on the sale of personal property or services, if the
amount is separately stated on the invoice, bill of sale, or
similar document given to the purchaser; and
(3) any taxes legally imposed directly on the consumer that
are separately stated on the invoice, bill of sale, or similar
document given to the purchaser.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 10. Minnesota Statutes 2002, section 297A.61,
subdivision 10, is amended to read:
Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible
personal property" means corporeal personal property of any
kind, including property that is to become real property as a
result of incorporation, attachment, or installation following
its acquisition.
(b) Tangible personal property includes, but is not limited
to:
(1) computer software, whether contained on tape, discs,
cards, or other devices; and
(2) prepaid telephone calling cards.
(c) personal property that can be seen, weighed, measured,
felt, or touched, or that is in any other manner perceptible to
the senses. "Tangible personal property" includes, but is not
limited to, electricity, water, gas, steam, prewritten computer
software, and prepaid calling cards.
(b) Tangible personal property does not include:
(1) large ponderous machinery and equipment used in a
business or production activity which at common law would be
considered to be real property;
(2) property which is subject to an ad valorem property
tax;
(3) property described in section 272.02, subdivision 9,
clauses (a) to (d); and
(4) property described in section 272.03, subdivision 2,
clauses (3) and (5).
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 11. Minnesota Statutes 2002, section 297A.61, is
amended by adding a subdivision to read:
Subd. 14a. [LEASE OR RENTAL.] (a) "Lease or rental" means
any transfer of possession or control of tangible personal
property for a fixed or indeterminate term for consideration. A
lease or rental may include future options to purchase or extend.
(b) Lease or rental does not include:
(1) a transfer of possession or control of property under a
security agreement or deferred payment plan that requires the
transfer of title upon completion of the required payments;
(2) a transfer of possession or control of property under
an agreement that requires the transfer of title upon completion
of required payments and payment of an option price does not
exceed the greater of $100 or one percent of the total required
payments; or
(3) providing tangible personal property along with an
operator for a fixed or indeterminate period of time. A
condition of this exclusion is that the operator is necessary
for the equipment to perform as designed. For the purpose of
this subdivision, an operator must do more than maintain,
inspect, or set up the tangible personal property.
(c) Lease or rental does include agreements covering motor
vehicles and trailers where the amount of consideration may be
increased or decreased by reference to the amount realized upon
sale or disposition of the property as defined in United States
Code, title 26, section 7701(h)(l).
(d) This definition must be used for sales and use tax
purposes regardless if a transaction is characterized as a lease
or rental under generally accepted accounting principles, the
Internal Revenue Code, chapter 336, or other provisions of
federal, state, or local law.
[EFFECTIVE DATE.] This section is effective for leases and
rentals entered into on or after January 1, 2004.
Sec. 12. Minnesota Statutes 2002, section 297A.61,
subdivision 17, is amended to read:
Subd. 17. [PREWRITTEN COMPUTER SOFTWARE.] "Prewritten
computer software" means a computer program, either in the form
of written procedures or contained on tapes, discs, cards, or
another device, or any required documentation or manuals
designed to facilitate the use of the computer program. computer
software, including prewritten upgrades, that is not designed
and developed by the author or other creator to the
specifications of a specific purchaser. The combining of two or
more "prewritten computer software" programs or prewritten
portions of the programs does not cause the combination to be
other than "prewritten computer software." "Prewritten computer
software" includes software designed and developed by the author
or other creator to the specifications of a specific purchaser
when it is sold to a person other than the purchaser. If a
person modifies or enhances computer software of which the
person is not the author or creator, the person is deemed to be
the author or creator only of such person's modifications or
enhancements. "Prewritten computer software" or a prewritten
portion of it that is modified or enhanced to any degree, if the
modification or enhancement is designed and developed to the
specifications of a specific purchaser, remains "prewritten
computer software"; provided, however, that if there is a
reasonable, separately stated charge or an invoice or other
statement of the price given to the purchaser for such
modification or enhancement, the modification or enhancement
does not constitute "prewritten computer software." For
purposes of this subdivision:
(1) "computer" does not include tape-controlled automatic
drilling, milling, or other manufacturing machinery or equipment
means an electronic device that accepts information in digital
or similar form and manipulates it for a result based on a
sequence of instructions; and
(2) "computer program" means information and directions
that dictate the function performed by data processing
equipment. It includes the complete plan for the solution of a
problem, such as the complete sequence of automatic data
processing equipment instructions necessary to solve a problem
and includes both systems and application programs and
subdivisions, such as assemblers, compilers, routines,
generators, and utility programs. Computer program includes a
"canned" or prewritten computer program that is held or existing
for general or repeated sale or lease, even if the prewritten or
"canned" program was initially developed on a custom basis or
for in-house use. "electronic" means relating to technology
having electrical, digital, magnetic, wireless, optical,
electromagnetic, or similar capabilities; and
(3) "computer software" means a set of coded instructions
designed to cause a "computer" or automatic data processing
equipment to perform a task.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 13. Minnesota Statutes 2002, section 297A.61, is
amended by adding a subdivision to read:
Subd. 17a. [DELIVERED ELECTRONICALLY.] "Delivered
electronically" means delivered to the purchaser by means other
than tangible storage media.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 14. Minnesota Statutes 2002, section 297A.61, is
amended by adding a subdivision to read:
Subd. 17b. [LOAD AND LEAVE.] "Load and leave" means
delivered to the purchaser by use of a tangible storage media
where the tangible storage media is not physically transferred
to the purchaser.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 15. Minnesota Statutes 2002, section 297A.61,
subdivision 30, is amended to read:
Subd. 30. [DELIVERY CHARGES.] "Delivery charges" means
charges by the seller of personal property or services for
preparation and delivery to a location designated by the
purchaser of personal property or services including, but not
limited to, transportation, shipping, postage, handling,
crating, and packing.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 16. Minnesota Statutes 2002, section 297A.61, is
amended by adding a subdivision to read:
Subd. 35. [DIRECT MAIL.] "Direct mail" means printed
material delivered or distributed by United States Mail or other
delivery service to a mass audience or to addressees on a
mailing list provided by the purchaser or at the direction of
the purchaser when the cost of the items is not billed directly
to the recipients. "Direct mail" includes tangible personal
property supplied directly or indirectly by the purchaser to the
direct mail seller for inclusion in the package containing the
printed material. "Direct mail" does not include multiple items
of printed material delivered to a single address.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 17. Minnesota Statutes 2002, section 297A.66, is
amended by adding a subdivision to read:
Subd. 5. [WITHDRAWAL FROM STREAMLINED SALES AND USE TAX
AGREEMENT.] If the state has withdrawn its membership or been
expelled from the streamlined sales and use tax agreement, it
shall not use a seller's registration with the central
registration system and the collection of sales and use taxes in
the state as a factor in determining whether the seller has
nexus with that state for any tax at any time.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 18. [297A.666] [AMNESTY FOR REGISTRATION.]
Subdivision 1. [AMNESTY PROVISIONS.] Subject to the
limitations of subdivision 2:
(1) this state shall provide amnesty for uncollected or
unpaid sales or use tax to a seller who registers to pay or to
collect and remit applicable sales or use tax on sales made to
purchasers in this state in accordance with the terms of the
streamlined sales and use tax agreement, provided that the
seller was not so registered in this state in the 12-month
period preceding the effective date of the state's participation
in the agreement; and
(2) the amnesty shall preclude assessment for uncollected
or unpaid sales or use tax together with penalty or interest for
sales made during the period the seller was not registered in
this state, provided registration occurs within 12 months of the
effective date of the state's participation in the agreement.
Subd. 2. [LIMITATIONS.] (a) The amnesty is not available
to a seller with respect to any matter or matters for which the
seller received notice of the commencement of an audit and the
audit is not yet finally resolved, including any related
administrative and judicial processes.
(b) The amnesty is not available for sales or use taxes
already paid or remitted to this state or to taxes collected by
the seller.
(c) The amnesty is fully effective, absent the seller's
fraud or intentional misrepresentation of a material fact, as
long as the seller continues registration and continues payment
or collection and remittance of applicable sales or use taxes
for a period of at least 36 months. The statute of limitations
provisions of chapter 289A applicable to asserting a sales or
use tax liability must be tolled during this 36-month period.
(d) The amnesty is applicable only to sales or use taxes
due from a seller in its capacity as a seller and not to sales
or use taxes due from a seller in its capacity as a buyer.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 19. Minnesota Statutes 2002, section 297A.668, is
amended to read:
297A.668 [SOURCING OF SALE; SITUS IN THIS STATE.]
Subdivision 1. [SOURCING RULES APPLICABILITY.] (a) The
following provisions of this section apply regardless of the
characterization of a product as tangible personal property, a
digital good, or a service; but do not apply to
telecommunications services, or the sales of motor vehicles,
watercraft, aircraft, modular homes, manufactured homes, or
mobile homes. These provisions only apply to determine a
seller's obligation to pay or collect and remit a sales or use
tax with respect to the seller's sale of a product. These
provisions do not affect the obligation of a seller as purchaser
to remit tax on the use of the product.
Subd. 2. [SOURCING RULES.] (a) The retail sale, excluding
lease or rental, of a product shall be sourced as required in
paragraphs (b) through (f).
(b) When the product is received by the purchaser at a
business location of the seller, the sale is sourced to that
business location.
(c) When the product is not received by the purchaser at a
business location of the seller, the sale is sourced to the
location where receipt by the purchaser or the donee designated
by the purchaser occurs, including the location indicated by
instructions for delivery to the purchasers or the purchaser's
donee, known to the seller.
(d) When paragraphs (b) and (c) do not apply, the sale is
sourced to the location indicated by an address for the
purchaser that is available from the business records of the
seller that are maintained in the ordinary course of the
seller's business, when use of this address does not constitute
bad faith.
(e) When paragraphs (b), (c), and (d) do not apply, the
sale is sourced to the location indicated by an address for the
purchaser obtained during the consummation of the sale,
including the address of a purchaser's payment instrument if no
other address is available, when use of this address does not
constitute bad faith.
(f) When paragraphs (b), (c), (d), and (e) do not apply,
including the circumstance where the seller is without
sufficient information to apply the previous paragraphs, then
the location is determined by the address from which tangible
personal property was shipped, from which the digital good or
the computer software delivered electronically was first
available for transmission by the seller, or from which the
service was provided. For purposes of this paragraph, the
seller must disregard any location that merely provided the
digital transfer of the product sold.
(g) For purposes of this subdivision, the terms "receive"
and "receipt" mean taking possession of tangible personal
property, making first use of services, or taking possession or
making first use of digital goods or the computer software
delivered electronically, whichever occurs first. The terms
receive and receipt do not include possession by a carrier for
hire on behalf of the purchaser.
Subd. 3. [LEASE OR RENTAL OF TANGIBLE PERSONAL
PROPERTY.] The lease or rental of tangible personal property,
other than property identified in subdivision 4 or 5, shall be
sourced as required in paragraphs (a) to (c).
(a) For a lease or rental that requires recurring periodic
payments, the first periodic payment is sourced the same as a
retail sale in accordance with the provisions of subdivision 6.
Periodic payments made subsequent to the first payment are
sourced to the primary property location for each period covered
by the payment. The primary property location must be as
indicated by an address for the property provided by the lessee
that is available to the lessor from its records maintained in
the ordinary course of business, when use of this address does
not constitute bad faith. The property location must not be
altered by intermittent use at different locations, such as use
of business property that accompanies employees on business
trips and service calls.
(b) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail
sale in accordance with the provisions of subdivision 2.
(c) This subdivision does not affect the imposition or
computation of sales or use tax on leases or rentals based on a
lump sum or accelerated basis, or on the acquisition of property
for lease.
Subd. 4. [LEASE OR RENTAL OF MOTOR VEHICLES, TRAILERS,
SEMITRAILERS, OR AIRCRAFT THAT DO NOT QUALIFY AS TRANSPORTATION
EQUIPMENT.] The lease or rental of motor vehicles, trailers,
semitrailers, or aircraft that do not qualify as transportation
equipment, as defined in subdivision 5, shall be sourced as
required in paragraphs (a) to (c).
(a) For a lease or rental that requires recurring periodic
payments, each periodic payment is sourced to the primary
property location. The primary property location must be as
indicated by an address for the property provided by the lessee
that is available to the lessor from its records maintained in
the ordinary course of business, when use of this address does
not constitute bad faith. This location must not be altered by
intermittent use at different locations.
(b) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail
sale in accordance with the provisions of subdivision 2.
(c) This subdivision does not affect the imposition or
computation of sales or use tax on leases or rentals based on a
lump sum or accelerated basis, or on the acquisition of property
for lease.
Subd. 5. [TRANSPORTATION EQUIPMENT.] (a) The retail sale,
including lease or rental, of transportation equipment shall be
sourced the same as a retail sale in accordance with the
provisions of subdivision 2, notwithstanding the exclusion of
lease or rental in subdivision 2.
(b) "Transportation equipment" means any of the following:
(1) locomotives and railcars that are utilized for the
carriage of persons or property in interstate commerce; and/or
(2) trucks and truck-tractors with a gross vehicle weight
rating (GVWR) of 10,001 pounds or greater, trailers,
semitrailers, or passenger buses that are:
(i) registered through the international registration plan;
and
(ii) operated under authority of a carrier authorized and
certified by the United States Department of Transportation or
another federal authority to engage in the carriage of persons
or property in interstate commerce.
Subd. 2. 6. [MULTIPLE POINTS OF USE.] (a) Notwithstanding
the provisions of subdivision 1 subdivisions 2 to 5, a business
purchaser that is not a holder of a direct pay permit that knows
at the time of its purchase of a digital good, computer software
delivered electronically, or a service that the digital good,
computer software delivered electronically, or service will be
concurrently available for use in more than one taxing
jurisdiction shall deliver to the seller in conjunction with its
purchase a multiple points of use exemption certificate
disclosing this fact.
(b) Upon receipt of the multiple points of use exemption
certificate, the seller is relieved of the obligation to
collect, pay, or remit the applicable tax and the purchaser is
obligated to collect, pay, or remit the applicable tax on a
direct pay basis.
(c) A purchaser delivering the multiple points of use
exemption certificate may use any reasonable, but consistent and
uniform, method of apportionment that is supported by the
purchaser's business records as they exist at the time of the
consummation of the sale.
(d) The multiple points of use exemption certificate
remains in effect for all future sales by the seller to the
purchaser until it is revoked in writing, except as to the
subsequent sale's specific apportionment that is governed by the
principle of paragraph (c) and the facts existing at the time of
the sale.
(e) A holder of a direct pay permit is not required to
deliver a multiple points or use exemption certificate to the
seller. A direct pay permit holder shall follow the provisions
of paragraph (c) in apportioning the tax due on a digital good,
computer software delivered electronically, or a service that
will be concurrently available for use in more than one taxing
jurisdiction.
Subd. 3. [DEFINITION OF TERMS.] For purposes of this
section, the terms "receive" and "receipt" mean taking
possession of tangible personal property, making first use of
services, or taking possession or making first use of digital
goods, whichever occurs first. The terms receive and receipt do
not include possession by a carrier for hire on behalf of the
purchaser.
Subd. 7. [DIRECT MAIL.] (a) Notwithstanding other
subdivisions of this section, a purchaser of direct mail that is
not a holder of a direct pay permit shall provide to the seller,
in conjunction with the purchase, either a direct mail form or
information to show the jurisdictions to which the direct mail
is delivered to recipients.
(1) Upon receipt of the direct mail form, the seller is
relieved of all obligations to collect, pay, or remit the
applicable tax and the purchaser is obligated to pay or remit
the applicable tax on a direct pay basis. A direct mail form
remains in effect for all future sales of direct mail by the
seller to the purchaser until it is revoked in writing.
(2) Upon receipt of information from the purchaser showing
the jurisdictions to which the direct mail is delivered to
recipients, the seller shall collect the tax according to the
delivery information provided by the purchaser. In the absence
of bad faith, the seller is relieved of any further obligation
to collect tax on any transaction for which the seller has
collected tax pursuant to the delivery information provided by
the purchaser.
(b) If the purchaser of direct mail does not have a direct
pay permit and does not provide the seller with either a direct
mail form or delivery information, as required by paragraph (a),
the seller shall collect the tax according to subdivision 2,
paragraph (f). Nothing in this paragraph limits a purchaser's
obligation for sales or use tax to any state to which the direct
mail is delivered.
(c) If a purchaser of direct mail provides the seller with
documentation of direct pay authority, the purchaser is not
required to provide a direct mail form or delivery information
to the seller.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 20. [297A.669] [TELECOMMUNICATION SOURCING.]
Subdivision 1. [CALL-BY-CALL BASIS SOURCING.] Except for
the defined telecommunication services in subdivision 3, the
sale of telecommunication service sold on a call-by-call basis
shall be sourced to (1) each level of taxing jurisdiction where
the call originates and terminates in that jurisdiction; or (2)
each level of taxing jurisdiction where the call either
originates or terminates and in which the service address is
also located.
Subd. 2. [OTHER THAN CALL-BY-CALL BASIS SOURCING.] Except
for the defined telecommunication services in subdivision 3, a
sale of telecommunications services sold on a basis other than a
call-by-call basis is sourced to the customer's place of primary
use.
Subd. 3. [DEFINED TELECOMMUNICATIONS SERVICES
SOURCING.] The sale of the following telecommunication services
shall be sourced to each level of taxing jurisdiction in
paragraphs (a) to (d).
(a) A sale of mobile telecommunications services, other
than air-to-ground radiotelephone service and prepaid calling
service, is sourced to the customer's place of primary use as
required by the Mobile Telecommunications Sourcing Act.
(b) A sale of postpaid calling service is sourced to the
origination point of the telecommunications signal as first
identified by either:
(1) the seller's telecommunications system; or
(2) information received by the seller from its service
provider, where the system used to transport such signals is not
that of the seller.
(c) A sale of prepaid calling service is sourced in
accordance with section 297A.668, subdivision 2. However, in
the case of a sale of mobile telecommunications service that is
a prepaid telecommunications service, the rule provided in
section 297A.668, subdivision 2, paragraph (f), shall include as
an option the location associated with the mobile telephone
number.
(d) A sale of a private communication service is sourced as
follows:
(1) service for a separate charge related to a customer
channel termination point is sourced to each level of
jurisdiction in which the customer channel termination point is
located;
(2) service where all customer termination points are
located entirely within one jurisdiction or levels of
jurisdiction is sourced in such jurisdiction in which the
customer channel termination points are located;
(3) service for segments of a channel between two customer
channel termination points located in different jurisdictions
and which segment of channel are separately charged is sourced
50 percent in each level of jurisdiction in which the customer
channel termination points are located; and
(4) service for segments of a channel located in more than
one jurisdiction or levels of jurisdiction and which segments
are not separately billed is sourced in each jurisdiction based
on the percentage determined by dividing the number of customer
channel termination points in the jurisdiction by the total
number of customer channel termination points.
Subd. 4. [AIR-TO-GROUND RADIOTELEPHONE
SERVICE.] "Air-to-ground radiotelephone service," for purposes
of this section, means a radio service, as that term is defined
in Code of Federal Regulations, title 47, section 22.99, in
which common carriers are authorized to offer and provide radio
telecommunications service for hire to subscribers in aircraft.
Subd. 5. [CALL-BY-CALL BASIS.] "Call-by-call basis," for
purposes of this section, means any method of charging for
telecommunications services where the price is measured by
individual calls.
Subd. 6. [COMMUNICATIONS CHANNEL.] "Communications
channel," for purposes of this section, means a physical or
virtual path of communications over which signals are
transmitted between or among customer channel termination points.
Subd. 7. [CUSTOMER.] "Customer," for purposes of this
section, means the person or entity that contracts with the
seller of telecommunications services. If the end user of
telecommunications services is not the contracting party, the
end user of the telecommunications service is the customer of
the telecommunication service, but this sentence applies only
for the purpose of sourcing sales of telecommunications services
under this section. Customer does not include a reseller of
telecommunications service or for mobile telecommunications
service of a serving carrier under an agreement to serve the
customer outside the home service provider's licensed service
area.
Subd. 8. [CUSTOMER CHANNEL TERMINATION POINT.] "Customer
channel termination point," for purposes of this section, means
the location where the customer either inputs or receives the
communications.
Subd. 9. [END USER.] "End user," for purposes of this
section, means the person who utilizes the telecommunication
service. In the case of an entity, end user means the
individual who utilizes the service on behalf of the entity.
Subd. 10. [HOME SERVICE PROVIDER.] "Home service provider,"
for purposes of this section, means the same as that term is
defined in Section 124(5) of Public Law 106-252 (Mobile
Telecommunications Sourcing Act).
Subd. 11. [MOBILE TELECOMMUNICATIONS SERVICE.] "Mobile
telecommunications service," for purposes of this section, means
the same as that term is defined in Section 124(1) of Public Law
106-252 (Mobile Telecommunications Sourcing Act).
Subd. 12. [PLACE OF PRIMARY USE.] "Place of primary use,"
for purposes of this section, means the street address
representative of where the customer's use of the
telecommunications service primarily occurs, which must be the
residential street address or the primary business street
address of the customer. In the case of mobile
telecommunications services, place of primary use must be within
the licensed service area of the home service provider.
Subd. 13. [POSTPAID CALLING SERVICE.] "Postpaid calling
service," for purposes of this section, means the
telecommunications service obtained by making a payment on a
call-by-call basis either through the use of a credit card or
payment mechanism such as a bank card, travel card, credit card,
or debit card, or by a charge made to a telephone number that is
not associated with the origination or termination of the
telecommunications service. A postpaid calling service includes
a telecommunications service that would be a prepaid calling
service except it is not exclusively a telecommunication service.
Subd. 14. [PREPAID CALLING SERVICE.] "Prepaid calling
service," for purposes of this section, means the right to
access exclusively telecommunications services, which must be
paid for in advance and which enables the origination of calls
using an access number or authorization code, whether manually
or electronically dialed, and that is sold in predetermined
units or dollars of which the number declines with use in a
known amount.
Subd. 15. [PRIVATE COMMUNICATION SERVICES.] "Private
communication services," for purposes of this section, means the
same as that term is defined in section 297A.61, subdivision 26.
Subd. 16. [SERVICE ADDRESS.] "Service address," for
purposes of this section, means:
(1) the location of the telecommunications equipment to
which a customer's call is charged and from which the call
originates or terminates, regardless of where the call is billed
or paid;
(2) if the location in paragraph (a) is not known, service
address means the origination point of the signal of the
telecommunications services first identified by either the
seller's telecommunications system or in information received by
the seller from its service provider, where the system used to
transport the signals is not that of the seller; or
(3) if the location in paragraphs (a) and (b) is not known,
the service address means the location of the customer's place
of primary use.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 21. Minnesota Statutes 2002, section 297A.67,
subdivision 8, is amended to read:
Subd. 8. [CLOTHING.] (a) Clothing is exempt. For purposes
of this subdivision, "clothing" means all human wearing apparel
suitable for general use.
(b) Clothing includes, but is not limited to, aprons,
household and shop; athletic supporters; baby receiving
blankets; bathing suits and caps; beach capes and coats; belts
and suspenders; boots; coats and jackets; costumes; children and
adult diapers, including disposable; ear muffs; footlets; formal
wear; garters and garter belts; girdles; gloves and mittens for
general use; hats and caps; hosiery; insoles for shoes; lab
coats; neckties; overshoes; pantyhose; rainwear; rubber pants;
sandals; scarves; shoes and shoe laces; slippers; sneakers;
socks and stockings; steel-toed boots; underwear; uniforms,
athletic and nonathletic; and wedding apparel.
(c) Clothing does not include the following:
(1) belt buckles sold separately;
(2) costume masks sold separately;
(3) patches and emblems sold separately;
(4) sewing equipment and supplies, including but not
limited to, knitting needles, patterns, pins, scissors, sewing
machines, sewing needles, tape measures, and thimbles;
(5) sewing materials that become part of clothing,
including but not limited to, buttons, fabric, lace, thread,
yarn, and zippers;
(6) clothing accessories or equipment;
(7) sports or recreational equipment; and
(8) protective equipment.
Clothing also does not include apparel made from fur if a
uniform definition of "apparel made from fur" is developed by
the member states of the Streamlined Sales and Use Tax Agreement.
For purposes of this subdivision, "clothing accessories or
equipment" means incidental items worn on the person or in
conjunction with clothing. Clothing accessories and equipment
include, but are not limited to, briefcases; cosmetics; hair
notions, including barrettes, hair bows, and hairnets; handbags;
handkerchiefs; jewelry; nonprescription sunglasses; umbrellas;
wallets; watches; and wigs and hairpieces. "Sports or
recreational equipment" means items designed for human use and
worn in conjunction with an athletic or recreational activity
that are not suitable for general use. Sports and recreational
equipment includes, but is not limited to, ballet and tap shoes;
cleated or spiked athletic shoes; gloves, including, but not
limited to, baseball, bowling, boxing, hockey, and golf gloves;
goggles; hand and elbow guards; life preservers and vests; mouth
guards; roller and ice skates; shin guards; shoulder pads; ski
boots; waders; and wetsuits and fins. "Protective equipment"
means items for human wear and designed as protection of the
wearer against injury or disease or as protection against damage
or injury of other persons or property but not suitable for
general use. Protective equipment includes, but is not limited
to, breathing masks; clean room apparel and equipment; ear and
hearing protectors; face shields; finger guards; hard hats;
helmets; paint or dust respirators; protective gloves; safety
glasses and goggles; safety belts; tool belts; and welders
gloves and masks.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 22. Minnesota Statutes 2002, section 297A.67, is
amended by adding a subdivision to read:
Subd. 31. [SERVICE LOANER VEHICLE COVERED BY
WARRANTY.] The loan of a vehicle by a motor vehicle dealer to a
customer as a replacement for a vehicle being serviced or
repaired is exempt if the vehicle is loaned pursuant to a
warranty included in the original purchase price of the vehicle
being serviced or repaired.
[EFFECTIVE DATE.] This section is effective for vehicle
loans made after June 30, 2003.
Sec. 23. Minnesota Statutes 2002, section 297A.68,
subdivision 2, is amended to read:
Subd. 2. [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.]
(a) Materials stored, used, or consumed in industrial production
of personal property intended to be sold ultimately at retail
are exempt, whether or not the item so used becomes an
ingredient or constituent part of the property produced.
Materials that qualify for this exemption include, but are not
limited to, the following:
(1) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(2) materials, including chemicals, fuels, and electricity
purchased by persons engaged in industrial production to treat
waste generated as a result of the production process;
(3) fuels, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating, cooling, or lighting is exempt if (i) it
is in excess of the average climate control or lighting for the
production area, and (ii) it is necessary to produce that
particular product;
(4) petroleum products and lubricants;
(5) packaging materials, including returnable containers
used in packaging food and beverage products;
(6) accessory tools, equipment, and other items that are
separate detachable units with an ordinary useful life of less
than 12 months used in producing a direct effect upon the
product; and
(7) the following materials, tools, and equipment used in
metalcasting: crucibles, thermocouple protection sheaths and
tubes, stalk tubes, refractory materials, molten metal filters
and filter boxes, degassing lances, and base blocks.
(b) This exemption does not include:
(1) machinery, equipment, implements, tools, accessories,
appliances, contrivances and furniture and fixtures, except
those listed in paragraph (a), clause (6); and
(2) petroleum and special fuels used in producing or
generating power for propelling ready-mixed concrete trucks on
the public highways of this state.
(c) Industrial production includes, but is not limited to,
research, development, design or production of any tangible
personal property, manufacturing, processing (other than by
restaurants and consumers) of agricultural products (whether
vegetable or animal), commercial fishing, refining, smelting,
reducing, brewing, distilling, printing, mining, quarrying,
lumbering, generating electricity and, the production of road
building materials, and the research, development, design, or
production of computer software. Industrial production does not
include painting, cleaning, repairing or similar processing of
property except as part of the original manufacturing process.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 24. Minnesota Statutes 2002, section 297A.68,
subdivision 5, is amended to read:
Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is
exempt. The tax must be imposed and collected as if the rate
under section 297A.62, subdivision 1, applied, and then refunded
in the manner provided in section 297A.75.
"Capital equipment" means machinery and equipment purchased
or leased, and used in this state by the purchaser or lessee
primarily for manufacturing, fabricating, mining, or refining
tangible personal property to be sold ultimately at retail if
the machinery and equipment are essential to the integrated
production process of manufacturing, fabricating, mining, or
refining. Capital equipment also includes machinery and
equipment used to electronically transmit results retrieved by a
customer of an online computerized data retrieval system.
(b) Capital equipment includes, but is not limited to:
(1) machinery and equipment used to operate, control, or
regulate the production equipment;
(2) machinery and equipment used for research and
development, design, quality control, and testing activities;
(3) environmental control devices that are used to maintain
conditions such as temperature, humidity, light, or air pressure
when those conditions are essential to and are part of the
production process;
(4) materials and supplies used to construct and install
machinery or equipment;
(5) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades
or modifications to machinery or equipment;
(6) materials used for foundations that support machinery
or equipment;
(7) materials used to construct and install special purpose
buildings used in the production process; and
(8) ready-mixed concrete trucks in which the ready-mixed
concrete is mixed as part of the delivery process; and
(9) machinery or equipment used for research, development,
design, or production of computer software.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 297B;
(2) machinery or equipment used to receive or store raw
materials;
(3) building materials, except for materials included in
paragraph (b), clauses (6) and (7);
(4) machinery or equipment used for nonproduction purposes,
including, but not limited to, the following: plant security,
fire prevention, first aid, and hospital stations; support
operations or administration; pollution control; and plant
cleaning, disposal of scrap and waste, plant communications,
space heating, cooling, lighting, or safety;
(5) farm machinery and aquaculture production equipment as
defined by section 297A.61, subdivisions 12 and 13;
(6) machinery or equipment purchased and installed by a
contractor as part of an improvement to real property; or
(7) any other item that is not essential to the integrated
process of manufacturing, fabricating, mining, or refining.
(d) For purposes of this subdivision:
(1) "Equipment" means independent devices or tools separate
from machinery but essential to an integrated production
process, including computers and computer software, used in
operating, controlling, or regulating machinery and equipment;
and any subunit or assembly comprising a component of any
machinery or accessory or attachment parts of machinery, such as
tools, dies, jigs, patterns, and molds.
(2) "Fabricating" means to make, build, create, produce, or
assemble components or property to work in a new or different
manner.
(3) "Machinery" means mechanical, electronic, or electrical
devices, including computers and computer software, that are
purchased or constructed to be used for the activities set forth
in paragraph (a), beginning with the removal of raw materials
from inventory through completion of the product, including
packaging of the product.
(4) "Machinery and equipment used for pollution control"
means machinery and equipment used solely to eliminate, prevent,
or reduce pollution resulting from an activity described in
paragraph (a).
(5) "Manufacturing" means an operation or series of
operations where raw materials are changed in form, composition,
or condition by machinery and equipment and which results in the
production of a new article of tangible personal property. For
purposes of this subdivision, "manufacturing" includes the
generation of electricity or steam to be sold at retail.
(6) "Mining" means the extraction of minerals, ores, stone,
or peat.
(7) "Online data retrieval system" means a system whose
cumulation of information is equally available and accessible to
all its customers.
(8) "Primarily" means machinery and equipment used 50
percent or more of the time in an activity described in
paragraph (a).
(9) "Refining" means the process of converting a natural
resource to a product, including the treatment of water to be
sold at retail.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 25. Minnesota Statutes 2002, section 297A.68,
subdivision 36, is amended to read:
Subd. 36. [DELIVERY OR DISTRIBUTION CHARGES; PRINTED
MATERIALS DIRECT MAIL.] Charges for the delivery or distribution
of printed materials, including individual account
information, direct mail 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 on an invoice or similar billing
document given to the purchaser.
[EFFECTIVE DATE.] This section is effective for purchases
and sales made on or after January 1, 2004.
Sec. 26. Minnesota Statutes 2002, section 297A.75,
subdivision 4, is amended to read:
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), (8), and (9) 90 days after the refund
claim is filed with the commissioner for taxes paid under
subdivision 1.
[EFFECTIVE DATE.] This section is effective for refund
claims filed on or after April 1, 2003.
Sec. 27. Minnesota Statutes 2002, section 297A.81, is
amended to read:
297A.81 [UNCOLLECTIBLE DEBTS; OFFSET AGAINST OTHER TAXES.]
Subdivision 1. [GENERAL.] The taxpayer may offset against
the taxes payable for any reporting period the amount of taxes
imposed by this chapter previously paid as a result of any
transaction the consideration for which became a debt owed to
the taxpayer that became uncollectible during the reporting
period, but only in proportion to the portion of the debt that
became uncollectible. Section 289A.40, subdivision 2, applies
to an offset under this section.
Subd. 2. [MANNER OF ALLOWING DEDUCTION FOR UNCOLLECTIBLE
DEBT.] (a) Uncollectible debt is allowed as a deduction in the
manner provided in this subdivision.
(b) If the uncollectible debt arose with respect to a sale
required to be included in gross receipts, subject to a tax
imposed under chapter 297A, the entire amount of the debt
remaining uncollected is allowed as a deduction.
(c) If the uncollectible debt arose with respect to a sale
partly subject to the tax imposed under chapter 297A and partly
exempt, the amount of the uncollectible debt allowed as a
deduction is the amount derived by multiplying the uncollectible
debt by the percentage that the taxable sale bears to the total
sales.
(d) If the uncollectible debt arose with respect to two or
more sales made at successive intervals, payments made before
the date the debt became uncollectible must be applied first to
the earliest sale upon which there is an unpaid balance, and to
following sales in successive order.
(e) If the books and records of the taxpayer claiming the
bad debt allowance support an allocation of the bad debts among
the member states of the streamlined sales and use tax
agreement, such an allocation shall be allowed.
Subd. 3. [CERTIFIED SERVICE PROVIDER.] A certified service
provider, as defined in section 297A.995, subdivision 2, on
behalf of a taxpayer who is its client, may offset against taxes
as provided by this section.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 28. Minnesota Statutes 2002, section 297A.99,
subdivision 5, is amended to read:
Subd. 5. [TAX RATE.] (a) The tax rate is as specified in
the special law authorization and as imposed by the political
subdivision.
(b) The full political subdivision rate applies to any
sales that are taxed at a state rate less than or more than the
state general sales and use tax rate., and the political
subdivision must not have more than one local sales tax rate or
more than one local use tax rate. This paragraph does not apply
to sales or use taxes imposed on electricity, piped natural or
artificial gas, or other heating fuels delivered by the seller,
or the retail sale or transfer of motor vehicles, aircraft,
watercraft, modular homes, manufactured homes, or mobile homes.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 29. Minnesota Statutes 2002, section 297A.99,
subdivision 10, is amended to read:
Subd. 10. [USE OF ZIP CODE IN DETERMINING LOCATION OF
SALE.] To determine whether to impose the local tax, the
retailer may use zip codes if the zip code area is entirely
within the political subdivision. When a zip code area is not
entirely within a political subdivision, the retailer shall not
collect the local tax if the purchaser notifies the retailer
that the purchaser's delivery address is outside of the
political subdivision, unless the retailer verifies that the
delivery address is in the political subdivision using a means
other than the zip code. The lowest combined tax rate imposed
in the zip code area applies if the area includes more than one
tax rate in any level of taxing jurisdictions. If a nine-digit
zip code designation is not available for a street address or if
a seller is unable to determine the nine-digit zip code
designation of a purchaser after exercising due diligence to
determine the designation, the seller may apply the rate for the
five-digit zip code area. For the purposes of this subdivision,
there is a rebuttable presumption that a seller has exercised
due diligence if the seller has attempted to determine the
nine-digit zip code designation by utilizing software approved
by the governing board that makes this designation from the
street address and the five-digit zip code of the purchaser.
Notwithstanding subdivision 13, this subdivision applies to all
local sales taxes without regard to the date of
authorization. This subdivision does not apply when the
purchased product is received by the purchaser at the business
location of the seller.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 30. Minnesota Statutes 2002, section 297A.99,
subdivision 12, is amended to read:
Subd. 12. [EFFECTIVE DATES; NOTIFICATION.] (a) A political
subdivision may impose a tax under this section starting only on
the first day of a calendar quarter. A political subdivision
may repeal a tax under this section stopping only on the last
day of a calendar quarter.
(b) The political subdivision shall notify the commissioner
of revenue at least 90 days before imposing, changing the rate
of, or repealing a tax under this section.
(c) The political subdivision shall change the rate of tax
imposed under this section starting only on the first day of a
calendar quarter, and only after the commissioner has notified
sellers at least 60 days prior to the change.
(d) The political subdivision shall apply the rate change
for sales tax imposed under this section to purchases from
printed catalogs, wherein the purchaser computed the tax based
upon local tax rates published in the catalog, starting only on
the first day of a calendar quarter, and only after the
commissioner has notified sellers at least 120 days prior to the
change.
(e) The political subdivision shall apply local
jurisdiction boundary changes to taxes imposed under this
section starting only on the first day of a calendar quarter,
and only after the commissioner has notified sellers at least 60
days prior to the change.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 31. Minnesota Statutes 2002, section 297A.995, is
amended by adding a subdivision to read:
Subd. 10. [RELIEF FROM CERTAIN LIABILITY.] Notwithstanding
subdivision 9, sellers and certified service providers are
relieved from liability to the state for having charged and
collected the incorrect amount of sales or use tax resulting
from the seller or certified service provider (1) relying on
erroneous data provided by this state on tax rates, boundaries,
or taxing jurisdiction assignments, or (2) relying on erroneous
data provided by the state in its taxability matrix concerning
the taxability of products and services.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after January 1, 2004.
Sec. 32. Minnesota Statutes 2002, section 297B.035, is
amended by adding a subdivision to read:
Subd. 5. [USE BY DEALER.] If a motor vehicle dealer uses a
vehicle, purchased for resale in the ordinary course of
business, other than for demonstration purposes, the dealer may
elect to pay the motor vehicle sales tax under this chapter or
the use tax under chapter 297A based on the reasonable rental
value of the vehicle. If the motor vehicle dealer fails to
report the use tax under chapter 297A, it is presumed that the
dealer elected to pay the motor vehicle sales tax under this
chapter.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2003.
Sec. 33. [CITY OF NEWPORT; LODGING TAX.]
Subdivision 1. [LODGING TAX.] Notwithstanding Minnesota
Statutes, section 477A.016, or any ordinance, city charter, or
other provision of law, the city of Newport may, by ordinance,
impose a tax of up to four percent upon the gross receipts from
the sale of lodging for periods of less than 30 days in hotels
and motels located in the city. The tax does not apply to the
furnishing of lodging by a business having less than 25 lodging
rooms. The total amount of taxes imposed under this section and
under Minnesota Statutes, section 469.190, shall not exceed four
percent.
Subd. 2. [USE OF PROCEEDS.] The proceeds of any tax
imposed in subdivision 1 shall be used by the city to fund
economic development and redevelopment of the city. Authorized
expenses include, but are not limited to, acquisition and
development costs of open space, parks, and trails.
Subd. 3. [ENFORCEMENT, COLLECTION, AND
ADMINISTRATION.] The tax shall be collected and administered in
the same manner as local lodging taxes under Minnesota Statutes,
section 469.190.
[EFFECTIVE DATE.] This section is effective upon approval
by the Newport city council and compliance with Minnesota
Statutes, section 645.021, subdivision 3.
Sec. 34. [REPEALER.]
(a) Minnesota Statutes 2002, section 297A.61, subdivisions
14 and 15, are repealed effective for sales and purchases made
on or after January 1, 2004.
(b) Minnesota Statutes 2002, section 297A.69, subdivision
5, is repealed effective January 1, 2006.
(c) Laws 2002, chapter 377, article 9, section 12, the
effective date, is repealed effective for sales and purchases
made on or after January 1, 2004.
ARTICLE 2
PROPERTY TAX
Section 1. [123A.455] [REALIGNING SPLIT RESIDENTIAL
PARCELS.]
Subdivision 1. [DEFINITIONS.] "Split residential property
parcel" means a parcel of real estate that is located within the
boundaries of more than one school district and that is
classified as residential property under:
(1) section 273.13, subdivision 22, paragraph (a) or (b);
(2) section 273.13, subdivision 25, paragraph (b), clause
(1); or
(3) section 273.13, subdivision 25, paragraph (c), clause
(1).
Subd. 2. [PETITION.] The owner of a split residential
property parcel may petition the auditor of the county where the
split parcel is located to transfer that part into the adjoining
school district so the entire property will be located in the
same school district. The petition must contain:
(1) a correct description of the split parcel to be
affected by the transfer including supporting data on location
and title to the land;
(2) a list of the school districts in which the split
parcels currently lie;
(3) the school district into which the petitioner desires
to have the whole split parcel transferred; and
(4) the district of attendance of any students currently
residing on the property.
Subd. 3. [AUDITOR'S ORDER.] Within 60 days of receipt of
the petition, the auditor of the county in which the petition
was filed under subdivision 2 shall issue an order to transfer
the affected parcel to the district determined by the county
board. Orders issued on or before July 1 will be effective for
taxes payable in the following year. The auditor must notify
the affected school districts and the commissioner of the change
in school district boundaries.
Subd. 4. [COMMISSIONER.] The commissioner shall modify the
records of school district boundaries to conform to the order.
Subd. 5. [TAXABLE PROPERTY.] Upon the effective date of
the order, the whole split property parcel is transferred into a
single school district. Beginning in the next subsequent taxes
payable year, all taxable property in the whole split parcel is:
(1) relieved of all school district taxes from the district
in which the parcel is no longer located; and
(2) subject to all school district taxes in the district in
which the whole split parcel is now located.
[EFFECTIVE DATE.] This section is effective for petitions
filed on or after the day following final enactment. Orders
issued under subdivision 3 on or before September 15, 2003, are
effective for taxes payable in 2004.
Sec. 2. Minnesota Statutes 2002, section 168A.05,
subdivision 1a, is amended to read:
Subd. 1a. [MANUFACTURED HOME; STATEMENT OF PROPERTY TAX
PAYMENT.] 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 manufactured home personal property
taxes levied on the unit that are due from in the name of 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, 2003.
Sec. 3. Minnesota Statutes 2002, section 216B.2424,
subdivision 5, is amended to read:
Subd. 5. [MANDATE.] (a) A public utility, as defined in
section 216B.02, subdivision 4, that operates a nuclear-powered
electric generating plant within this state must construct and
operate, purchase, or contract to construct and operate (1) by
December 31, 1998, 50 megawatts of electric energy installed
capacity generated by farm-grown closed-loop biomass scheduled
to be operational by December 31, 2001; and (2) by December 31,
1998, an additional 75 megawatts of installed capacity so
generated scheduled to be operational by December 31, 2002.
(b) Of the 125 megawatts of biomass electricity installed
capacity required under this subdivision, no more than 50
megawatts of this capacity may be provided by a facility that
uses poultry litter as its primary fuel source and any such
facility:
(1) need not use biomass that complies with the definition
in subdivision 1;
(2) must enter into a contract with the public utility for
such capacity, that has an average purchase price per megawatt
hour over the life of the contract that is equal to or less than
the average purchase price per megawatt hour over the life of
the contract in contracts approved by the public utilities
commission before April 1, 2000, to satisfy the mandate of this
section, and file that contract with the public utilities
commission prior to September 1, 2000; and
(3) must schedule such capacity to be operational by
December 31, 2002.
(c) Of the total 125 megawatts of biomass electric energy
installed capacity required under this section, no more than 75
megawatts may be provided by a single project.
(d) Of the 75 megawatts of biomass electric energy
installed capacity required under paragraph (a), clause (2), no
more than 25 megawatts of this capacity may be provided by a St.
Paul district heating and cooling system cogeneration facility
utilizing waste wood as a primary fuel source. The St. Paul
district heating and cooling system cogeneration facility need
not use biomass that complies with the definition in subdivision
1.
(e) The public utility must accept and consider on an equal
basis with other biomass proposals:
(1) a proposal to satisfy the requirements of this section
that includes a project that exceeds the megawatt capacity
requirements of either paragraph (a), clause (1) or (2), and
that proposes to sell the excess capacity to the public utility
or to other purchasers; and
(2) a proposal for a new facility to satisfy more than ten
but not more than 20 megawatts of the electrical generation
requirements by a small business-sponsored independent power
producer facility to be located within the northern quarter of
the state, which means the area located north of Constitutional
Route No. 8 as described in section 161.114, subdivision 2, and
that utilizes biomass residue wood, sawdust, bark, chipped wood,
or brush to generate electricity. A facility described in this
clause is not required to utilize biomass complying with the
definition in subdivision 1, but must have the capacity required
by this clause operational be under construction by December 31,
2002 2005.
(f) If a public utility files a contract with the
commission for electric energy installed capacity that uses
poultry litter as its primary fuel source, the commission must
do a preliminary review of the contract to determine if it meets
the purchase price criteria provided in paragraph (b), clause
(2), of this subdivision. The commission shall perform its
review and advise the parties of its determination within 30
days of filing of such a contract by a public utility. A public
utility may submit by September 1, 2000, a revised contract to
address the commission's preliminary determination.
(g) The commission shall finally approve, modify, or
disapprove no later than July 1, 2001, all contracts submitted
by a public utility as of September 1, 2000, to meet the mandate
set forth in this subdivision.
(h) If a public utility subject to this section exercises
an option to increase the generating capacity of a project in a
contract approved by the commission prior to April 25, 2000, to
satisfy the mandate in this subdivision, the public utility must
notify the commission by September 1, 2000, that it has
exercised the option and include in the notice the amount of
additional megawatts to be generated under the option
exercised. Any review by the commission of the project after
exercise of such an option shall be based on the same criteria
used to review the existing contract.
(i) A facility specified in this subdivision qualifies for
exemption from property taxation under section 272.02,
subdivision 43.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2002, section 270B.12, is
amended by adding a subdivision to read:
Subd. 13. [COUNTY ASSESSORS; CLASS 1B HOMESTEADS.] The
commissioner may disclose to a county assessor, and to the
assessor's designated agents or employees, a listing of parcels
of property qualifying for the class 1b property tax
classification under section 273.13, subdivision 22.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2002, section 272.02,
subdivision 31, is amended to read:
Subd. 31. [BUSINESS INCUBATOR PROPERTY.] Property owned by
a nonprofit charitable organization that qualifies for tax
exemption under section 501(c)(3) of the Internal Revenue Code
of 1986, as amended through December 31, 1997, that is intended
to be used as a business incubator in a high-unemployment
county, is exempt. As used in this subdivision, a "business
incubator" is a facility used for the development of nonretail
businesses, offering access to equipment, space, services, and
advice to the tenant businesses, for the purpose of encouraging
economic development, diversification, and job creation in the
area served by the organization, and "high-unemployment county"
is a county that had an average annual unemployment rate of 7.9
percent or greater in 1997. Property that qualifies for the
exemption under this subdivision is limited to no more than two
contiguous parcels and structures that do not exceed in the
aggregate 40,000 square feet. This exemption expires after
taxes payable in 2005 2011.
Sec. 6. Minnesota Statutes 2002, section 272.02,
subdivision 47, is amended to read:
Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY;
PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a),
attached machinery and other personal property which is part of
an electrical generating facility that meets the requirements of
this subdivision is exempt. At the time of construction, the
facility must:
(1) be designed to utilize poultry litter as a primary fuel
source; and
(2) be constructed for the purpose of generating power at
the facility that will be sold pursuant to a contract approved
by the public utilities commission in accordance with the
biomass mandate imposed under section 216B.2424.
Construction of the facility must be commenced after
January 1, 2000 2003, and before December 31, 2002 2003.
Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and
interconnections appurtenant to the property or the facility.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2004, payable in 2005, and thereafter.
Sec. 7. Minnesota Statutes 2002, section 272.02,
subdivision 53, is amended 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 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.
Sec. 8. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 56. [ELECTRIC GENERATION FACILITY; PERSONAL
PROPERTY.] (a) Notwithstanding subdivision 9, clause (a),
attached machinery and other personal property which is part of
a combined-cycle combustion-turbine electric generation facility
that exceeds 550 megawatts of installed capacity and that meets
the requirements of this subdivision is exempt. At the time of
construction, the facility must:
(1) be designed to utilize natural gas as a primary fuel;
(2) not be owned by a public utility as defined in section
216B.02, subdivision 4;
(3) be located within five miles of an existing natural gas
pipeline and within four miles of an existing electrical
transmission substation;
(4) be located outside the metropolitan area as defined
under section 473.121, subdivision 2; and
(5) be designed to provide energy and ancillary services
and have received a certificate of need under section 216B.243.
(b) Construction of the facility must be commenced after
January 1, 2004, and before January 1, 2007. 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 2005, taxes payable in 2006, and thereafter.
Sec. 9. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 67. [ELECTRIC GENERATION FACILITY; PERSONAL
PROPERTY.] (a) Notwithstanding subdivision 9, clause (a),
attached machinery and other personal property which is part of
a combined-cycle combustion-turbine electric generation facility
that exceeds 150 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 owned by an electric generation and transmission
cooperative;
(3) be located within ten miles of parallel existing
24-inch and 30-inch natural gas pipelines and a 345-kilovolt
high-voltage electric transmission line;
(4) be designed to provide intermediate energy and
ancillary services, and have received a certificate of need
under section 216B.243, demonstrating demand for its capacity;
and
(5) have received by resolution, the approval from the
governing body of the county and city in which the proposed
facility is to be located for the exemption of personal property
under this subdivision.
(b) Construction of the facility must be commenced after
January 1, 2004, and before January 1, 2009. 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.
(c) The exemption under this section will take effect only
if the owner of the facility enters into agreements with the
governing bodies of the county and the city in which the
facility is located. The agreements may include a requirement
that the facility must pay a host fee to compensate the county
and city for hosting the facility.
[EFFECTIVE DATE.] This section is effective for assessment
year 2005, taxes payable in 2006, and thereafter.
Sec. 10. Minnesota Statutes 2002, section 273.01, is
amended to read:
273.01 [LISTING AND ASSESSMENT, TIME.]
All real property subject to taxation shall be listed and
at least one-fourth one-fifth of the parcels listed shall be
appraised each year with reference to their value on January 2
preceding the assessment so that each parcel shall be
reappraised at maximum intervals of four five years. All real
property becoming taxable in any year shall be listed with
reference to its value on January 2 of that year. Except as
provided in this section and section 274.01, subdivision 1, all
real property assessments shall be completed two weeks prior to
the date scheduled for the local board of review or
equalization. No changes in valuation or classification which
are intended to correct errors in judgment by the county
assessor may be made by the county assessor after the board of
review or the county board of equalization has adjourned;
however, corrections of errors that are merely clerical in
nature or changes that extend homestead treatment to property
are permitted after adjournment until the tax extension date for
that assessment year. Any changes made by the assessor after
adjournment must be fully documented and maintained in a file in
the assessor's office and shall be available for review by any
person. A copy of any changes made during this period shall be
sent to the county board no later than December 31 of the
assessment year. In the event a valuation and classification is
not placed on any real property by the dates scheduled for the
local board of review or equalization the valuation and
classification determined in the preceding assessment shall be
continued in effect and the provisions of section 273.13 shall,
in such case, not be applicable, except with respect to real
estate which has been constructed since the previous
assessment. Real property containing iron ore, the fee to which
is owned by the state of Minnesota, shall, if leased by the
state after January 2 in any year, be subject to assessment for
that year on the value of any iron ore removed under said lease
prior to January 2 of the following year. Personal property
subject to taxation shall be listed and assessed annually with
reference to its value on January 2; and, if acquired on that
day, shall be listed by or for the person acquiring it.
[EFFECTIVE DATE.] This section is effective for assessments
on or after January 2, 2004.
Sec. 11. Minnesota Statutes 2002, section 273.08, is
amended to read:
273.08 [ASSESSOR'S DUTIES.]
The assessor shall actually view, and determine the market
value of each tract or lot of real property listed for taxation,
including the value of all improvements and structures thereon,
at maximum intervals of four five years and shall enter the
value opposite each description.
[EFFECTIVE DATE.] This section is effective for assessments
on or after January 2, 2004.
Sec. 12. Minnesota Statutes 2002, section 273.124,
subdivision 14, is amended to read:
Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.]
(a) Real estate of less than ten acres that is the homestead of
its owner must be classified as class 2a under section 273.13,
subdivision 23, paragraph (a), if:
(1) the parcel on which the house is located is contiguous
on at least two sides to (i) agricultural land, (ii) land owned
or administered by the United States Fish and Wildlife Service,
or (iii) land administered by the department of natural
resources on which in lieu taxes are paid under sections 477A.11
to 477A.14;
(2) its owner also owns a noncontiguous parcel of
agricultural land that is at least 20 acres;
(3) the noncontiguous land is located not farther than four
townships or cities, or a combination of townships or cities
from the homestead; and
(4) the agricultural use value of the noncontiguous land
and farm buildings is equal to at least 50 percent of the market
value of the house, garage, and one acre of land.
Homesteads initially classified as class 2a under the
provisions of this paragraph shall remain classified as class
2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same
ownership, the owner owns a noncontiguous parcel of agricultural
land that is at least 20 acres, and the agricultural use value
qualifies under clause (4). Homestead classification under this
paragraph is limited to property that qualified under this
paragraph for the 1998 assessment.
(b)(i) Agricultural property consisting of at least 40
acres shall be classified as the owner's homestead, to the same
extent as other agricultural homestead property, if all of the
following criteria are met:
(1) the owner, the owner's spouse, or the son or daughter
of the owner or owner's spouse, is actively farming the
agricultural property, either on the person's own behalf as an
individual or on behalf of a partnership operating a family
farm, family farm corporation, joint family farm venture, or
limited liability company of which the person is a partner,
shareholder, or member;
(2) both the owner of the agricultural property and the
person who is actively farming the agricultural property under
clause (1), are Minnesota residents;
(3) neither the owner nor the spouse of the owner claims
another agricultural homestead in Minnesota; and
(4) neither the owner nor the person actively farming the
property lives farther than four townships or cities, or a
combination of four townships or cities, from the agricultural
property, except that if the owner or the owner's spouse is
required to live in employer-provided housing, the owner or
owner's spouse, whichever is actively farming the agricultural
property, may live more than four townships or cities, or
combination of four townships or cities from the agricultural
property.
The relationship under this paragraph may be either by
blood or marriage.
(ii) Real property held by a trustee under a trust is
eligible for agricultural homestead classification under this
paragraph if the qualifications in clause (i) are met, except
that "owner" means the grantor of the trust.
(iii) Property containing the residence of an owner who
owns qualified property under clause (i) shall be classified as
part of the owner's agricultural homestead, if that property is
also used for noncommercial storage or drying of agricultural
crops.
(c) Noncontiguous land shall be included as part of a
homestead under section 273.13, subdivision 23, paragraph (a),
only if the homestead is classified as class 2a and the detached
land is located in the same township or city, or not farther
than four townships or cities or combination thereof from the
homestead. Any taxpayer of these noncontiguous lands must
notify the county assessor that the noncontiguous land is part
of the taxpayer's homestead, and, if the homestead is located in
another county, the taxpayer must also notify the assessor of
the other county.
(d) Agricultural land used for purposes of a homestead and
actively farmed by a person holding a vested remainder interest
in it must be classified as a homestead under section 273.13,
subdivision 23, paragraph (a). If agricultural land is
classified class 2a, any other dwellings on the land used for
purposes of a homestead by persons holding vested remainder
interests who are actively engaged in farming the property, and
up to one acre of the land surrounding each homestead and
reasonably necessary for the use of the dwelling as a home, must
also be assessed class 2a.
(e) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23,
paragraph (a), for the 1997 assessment shall remain classified
as agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of the April
1997 floods;
(2) the property is located in the county of Polk, Clay,
Kittson, Marshall, Norman, or Wilkin;
(3) the agricultural land and buildings remain under the
same ownership for the current assessment year as existed for
the 1997 assessment year and continue to be used for
agricultural purposes;
(4) the dwelling occupied by the owner is located in
Minnesota and is within 30 miles of one of the parcels of
agricultural land that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the
relocation was due to the 1997 floods, and the owner furnishes
the assessor any information deemed necessary by the assessor in
verifying the change in dwelling. Further notifications to the
assessor are not required if the property continues to meet all
the requirements in this paragraph and any dwellings on the
agricultural land remain uninhabited.
(f) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23,
paragraph (a), for the 1998 assessment shall remain classified
agricultural homesteads for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling
located on the agricultural homestead as a result of damage
caused by a March 29, 1998, tornado;
(2) the property is located in the county of Blue Earth,
Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice;
(3) the agricultural land and buildings remain under the
same ownership for the current assessment year as existed for
the 1998 assessment year;
(4) the dwelling occupied by the owner is located in this
state and is within 50 miles of one of the parcels of
agricultural land that is owned by the taxpayer; and
(5) the owner notifies the county assessor that the
relocation was due to a March 29, 1998, tornado, and the owner
furnishes the assessor any information deemed necessary by the
assessor in verifying the change in homestead dwelling. For
taxes payable in 1999, the owner must notify the assessor by
December 1, 1998. Further notifications to the assessor are not
required if the property continues to meet all the requirements
in this paragraph and any dwellings on the agricultural land
remain uninhabited.
(g) Agricultural property consisting of at least 40 acres
of a family farm corporation, joint family farm venture, family
farm limited liability company, or partnership operating a
family farm as described under subdivision 8 shall be classified
homestead, to the same extent as other agricultural homestead
property, if all of the following criteria are met:
(1) a shareholder, member, or partner of that entity is
actively farming the agricultural property;
(2) that shareholder, member, or partner who is actively
farming the agricultural property is a Minnesota resident;
(3) neither that shareholder, member, or partner, nor the
spouse of that shareholder, member, or partner claims another
agricultural homestead in Minnesota; and
(4) that shareholder, member, or partner does not live
farther than four townships or cities, or a combination of four
townships or cities, from the agricultural property.
Homestead treatment applies under this paragraph for
property leased to a family farm corporation, joint farm
venture, limited liability company, or partnership operating a
family farm if legal title to the property is in the name of an
individual who is a member, shareholder, or partner in the
entity.
(h) To be eligible for the special agricultural homestead
under this subdivision, an initial full application must be
submitted to the county assessor where the property is located.
Owners and the persons who are actively farming the property
shall be required to complete only a one-page abbreviated
version of the application in each subsequent year provided that
none of the following items have changed since the initial
application:
(1) the day-to-day operation, administration, and financial
risks remain the same;
(2) the owners and the persons actively farming the
property continue to live within the four townships or city
criteria and are Minnesota residents;
(3) the same operator of the agricultural property is
listed with the farm service agency;
(4) a Schedule F or equivalent income tax form was filed
for the most recent year;
(5) the property's acreage is unchanged; and
(6) none of the property's acres have been enrolled in a
federal or state farm program since the initial application.
The owners and any persons who are actively farming the
property must include the appropriate social security numbers,
and sign and date the application. If any of the specified
information has changed since the full application was filed,
the owner must notify the assessor, and must complete a new
application to determine if the property continues to qualify
for the special agricultural homestead. The commissioner of
revenue shall prepare a standard reapplication form for use by
the assessors.
[EFFECTIVE DATE.] This section is effective for
applications filed for the 2004 assessment and thereafter.
Sec. 13. Minnesota Statutes 2002, 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 who is blind as defined in section
256D.35, 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) (3)
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 revenue 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, or a member of a limited liability company that owns the
resort even if the title to the homestead is held by the
corporation or, partnership, or limited liability company. 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 property
taxes levied in 2003, payable in 2004, and thereafter, except
that the amendments to paragraph (b) are effective for taxes
payable in 2005 and thereafter.
Sec. 14. Minnesota Statutes 2002, section 273.13,
subdivision 23, is amended to read:
Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural
land including any improvements that is homesteaded. The market
value of the house and garage and immediately surrounding one
acre of land has the same class rates as class 1a property under
subdivision 22. The value of the remaining land including
improvements up to and including $600,000 market value has a net
class rate of 0.55 percent of market value. The remaining
property over $600,000 market value has a class rate of one
percent of market value.
(b) Class 2b property is (1) real estate, rural in
character and used exclusively for growing trees for timber,
lumber, and wood and wood products; (2) real estate that is not
improved with a structure and is used exclusively for growing
trees for timber, lumber, and wood and wood products, if the
owner has participated or is participating in a cost-sharing
program for afforestation, reforestation, or timber stand
improvement on that particular property, administered or
coordinated by the commissioner of natural resources; (3) real
estate that is nonhomestead agricultural land; or (4) a landing
area or public access area of a privately owned public use
airport. Class 2b property has a net class rate of one percent
of market value.
(c) Agricultural land as used in this section means
contiguous acreage of ten acres or more, used during the
preceding year for agricultural purposes. "Agricultural
purposes" as used in this section means the raising or
cultivation of agricultural products. "Agricultural purposes"
also includes or enrollment in the Reinvest in Minnesota program
under sections 103F.501 to 103F.535 or the federal Conservation
Reserve Program as contained in Public Law Number 99-198 if the
property was classified as agricultural (i) under this
subdivision for the assessment year 2002 or (ii) in the year
prior to its enrollment. Contiguous acreage on the same parcel,
or contiguous acreage on an immediately adjacent parcel under
the same ownership, may also qualify as agricultural land, but
only if it is pasture, timber, waste, unusable wild land, or
land included in state or federal farm programs. Agricultural
classification for property shall be determined excluding the
house, garage, and immediately surrounding one acre of land, and
shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same
ownership.
(d) Real estate, excluding the house, garage, and
immediately surrounding one acre of land, of less than ten acres
which is exclusively and intensively used for raising or
cultivating agricultural products, shall be considered as
agricultural land.
Land shall be classified as agricultural even if all or a
portion of the agricultural use of that property is the leasing
to, or use by another person for agricultural purposes.
Classification under this subdivision is not determinative
for qualifying under section 273.111.
The property classification under this section supersedes,
for property tax purposes only, any locally administered
agricultural policies or land use restrictions that define
minimum or maximum farm acreage.
(e) The term "agricultural products" as used in this
subdivision includes production for sale of:
(1) livestock, dairy animals, dairy products, poultry and
poultry products, fur-bearing animals, horticultural and nursery
stock described in sections 18.44 to 18.61, fruit of all kinds,
vegetables, forage, grains, bees, and apiary products by the
owner;
(2) fish bred for sale and consumption if the fish breeding
occurs on land zoned for agricultural use;
(3) the commercial boarding of horses if the boarding is
done in conjunction with raising or cultivating agricultural
products as defined in clause (1);
(4) property which is owned and operated by nonprofit
organizations used for equestrian activities, excluding racing;
(5) game birds and waterfowl bred and raised for use on a
shooting preserve licensed under section 97A.115;
(6) insects primarily bred to be used as food for animals;
(7) trees, grown for sale as a crop, and not sold for
timber, lumber, wood, or wood products; and
(8) maple syrup taken from trees grown by a person licensed
by the Minnesota department of agriculture under chapter 28A as
a food processor.
(f) If a parcel used for agricultural purposes is also used
for commercial or industrial purposes, including but not limited
to:
(1) wholesale and retail sales;
(2) processing of raw agricultural products or other goods;
(3) warehousing or storage of processed goods; and
(4) office facilities for the support of the activities
enumerated in clauses (1), (2), and (3),
the assessor shall classify the part of the parcel used for
agricultural purposes as class 1b, 2a, or 2b, whichever is
appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural
products for first sale is considered an agricultural purpose.
A greenhouse or other building where horticultural or nursery
products are grown that is also used for the conduct of retail
sales must be classified as agricultural if it is primarily used
for the growing of horticultural or nursery products from seed,
cuttings, or roots and occasionally as a showroom for the retail
sale of those products. Use of a greenhouse or building only
for the display of already grown horticultural or nursery
products does not qualify as an agricultural purpose.
The assessor shall determine and list separately on the
records the market value of the homestead dwelling and the one
acre of land on which that dwelling is located. If any farm
buildings or structures are located on this homesteaded acre of
land, their market value shall not be included in this separate
determination.
(g) To qualify for classification under paragraph (b),
clause (4), a privately owned public use airport must be
licensed as a public airport under section 360.018. For
purposes of paragraph (b), clause (4), "landing area" means that
part of a privately owned public use airport properly cleared,
regularly maintained, and made available to the public for use
by aircraft and includes runways, taxiways, aprons, and sites
upon which are situated landing or navigational aids. A landing
area also includes land underlying both the primary surface and
the approach surfaces that comply with all of the following:
(i) the land is properly cleared and regularly maintained
for the primary purposes of the landing, taking off, and taxiing
of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is
not included as a landing area;
(ii) the land is part of the airport property; and
(iii) the land is not used for commercial or residential
purposes.
The land contained in a landing area under paragraph (b), clause
(4), must be described and certified by the commissioner of
transportation. The certification is effective until it is
modified, or until the airport or landing area no longer meets
the requirements of paragraph (b), clause (4). For purposes of
paragraph (b), clause (4), "public access area" means property
used as an aircraft parking ramp, apron, or storage hangar, or
an arrival and departure building in connection with the airport.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 15. Minnesota Statutes 2002, section 273.1315, is
amended to read:
273.1315 [CERTIFICATION OF 1B PROPERTY.]
Any property owner seeking classification and assessment of
the owner's homestead as class 1b property pursuant to section
273.13, subdivision 22, paragraph (b), clause (2) or (3), shall
file with the commissioner of revenue for each assessment year a
1b homestead declaration, on a form prescribed by the
commissioner. The declaration shall contain the following
information:
(a) the information necessary to verify that the property
owner or the owner's spouse satisfies the requirements of
section 273.13, subdivision 22, paragraph (b), clause (2) or
(3), for 1b classification; and
(b) the property owner's household income, as defined in
section 290A.03, for the previous calendar year; and
(c) any additional information prescribed by the
commissioner.
The declaration shall must be filed on or before March
October 1 of each year to be effective for property taxes
payable during the succeeding calendar year. The declaration
and any supplementary information received from the property
owner pursuant to this section shall be subject to chapter
270B. If approved by the commissioner, the declaration remains
in effect until the property no longer qualifies under section
273.13, subdivision 22, paragraph (b). Failure to notify the
commissioner within 30 days that the property no longer
qualifies under that paragraph because of a sale, change in
occupancy, or change in the status or condition of an occupant
shall result in the penalty provided in section 273.124,
subdivision 13, computed on the basis of the class 1b benefits
for the property, and the property shall lose its current class
1b classification.
The commissioner shall provide to the assessor on or before
April November 1 a listing of the parcels of property qualifying
for 1b classification.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2005 and thereafter.
Sec. 16. [274.014] [LOCAL BOARDS; APPEALS AND EQUALIZATION
COURSE AND MEETING REQUIREMENTS.]
Subdivision 1. [HANDBOOK FOR LOCAL BOARDS.] By no later
than January 1, 2005, the commissioner of revenue must develop a
handbook detailing procedures, responsibilities, and
requirements for local boards of appeal and equalization. The
handbook must include, but need not be limited to, the role of
the local board in the assessment process, the legal and policy
reasons for fair and impartial appeal and equalization hearings,
local board meeting procedures that foster fair and impartial
assessment reviews and other best practices recommendations,
quorum requirements for local boards, and explanations of
alternate methods of appeal.
Subd. 2. [APPEALS AND EQUALIZATION COURSE.] By no later
than January 1, 2006, and each year thereafter, there must be at
least one member at each meeting of a local board of appeal and
equalization who has attended an appeals and equalization course
developed or approved by the commissioner within the last four
years, as certified by the commissioner. The course may be
offered in conjunction with a meeting of the Minnesota League of
Cities or the Minnesota Association of Townships. The course
content must include, but need not be limited to, a review of
the handbook developed by the commissioner under subdivision 1.
Subd. 3. [PROOF OF COMPLIANCE; TRANSFER OF DUTIES.] Any
city or town that does not provide proof to the county assessor
by December 1, 2006, and each year thereafter, that it is in
compliance with the requirements of subdivision 2, and that it
had a quorum at each meeting of the board of appeal and
equalization in the prior year, is deemed to have transferred
its board of appeal and equalization powers to the county under
section 274.01, subdivision 3, for the following year's
assessment.
The county shall notify the taxpayers when the board of
appeal and equalization for a city or town has been transferred
to the county under this subdivision and, prior to the meeting
time of the county board of equalization, the county shall make
available to those taxpayers a procedure for a review of the
assessments, including, but not limited to, open book meetings.
This alternate review process shall take place in April and May.
A local board whose powers are transferred to the county
under this subdivision may be reinstated by resolution of the
governing body of the city or town and upon proof of compliance
with the requirements of subdivision 2. The resolution and
proofs must be provided to the county assessor by December 1 in
order to be effective for the following year's assessment.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 17. [275.75] [CHARTER EXEMPTION FOR AID LOSS.]
Notwithstanding any other provision of a municipal charter
that limits ad valorem taxes to a lesser amount, or that would
require voter approval for any increase, the governing body of a
municipality may by resolution increase its levy for taxes
payable in 2004 and 2005 only by an amount equal to the
reduction in the amount of aid it is certified to receive under
sections 477A.011 to 477A.03 for that same payable year compared
to the amount certified for payment in 2003.
Sec. 18. Minnesota Statutes 2002, section 278.01,
subdivision 4, is amended to read:
Subd. 4. [FILING OF APPEAL DEADLINE; EXCEPTION.]
Notwithstanding the March 31 April 30 date in subdivision 1,
whenever the exempt status, valuation, or classification of real
or personal property is changed other than by an abatement or a
court decision, and the owner responsible for payment of the tax
is not given notice of the change until after January 31
February 28 of the year the tax is payable or after July 1 in
the case of property subject to section 273.125, subdivision 4,
an eligible petitioner, as defined and limited in subdivision 1,
has 60 days from the date of mailing of the notice to initiate
an appeal of the property's exempt status, classification, or
valuation change under this chapter.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2003 and thereafter.
Sec. 19. Minnesota Statutes 2002, section 278.05,
subdivision 6, is amended to read:
Subd. 6. [DISMISSAL OF PETITION; EXCLUSION OF CERTAIN
EVIDENCE.] (a) Information, including income and expense
figures, verified net rentable areas, and anticipated income and
expenses, for income-producing property must be provided to the
county assessor within 60 days after the petition has been filed
under this chapter no later than 60 days after the applicable
filing deadline contained in section 278.01, subdivision 1 or
4. Failure to provide the information required in this
paragraph shall result in the dismissal of the petition,
unless (1) the failure to provide it was due to the
unavailability of the evidence at that the time that the
information was due, or (2) the petitioner was not aware of or
informed of the requirement to provide the information.
If the petitioner proves that the requirements under clause (2)
are met, the petitioner has an additional 30 days to provide the
information from the time the petitioner became aware of or was
informed of the requirement to provide the information,
otherwise the petition shall be dismissed.
(b) Provided that the information as contained in paragraph
(a) is timely submitted to the county assessor, the county
assessor shall furnish the petitioner at least five days before
the hearing under this chapter with the property's appraisal, if
any, which will be presented to the court at the hearing. The
petitioner shall furnish to the county assessor at least five
days before the hearing under this chapter with the property's
appraisal, if any, which will be presented to the court at the
hearing. An appraisal of the petitioner's property done by or
for the county shall not be admissible as evidence if the county
assessor does not comply with the provisions in this paragraph.
The petition shall be dismissed if the petitioner does not
comply with the provisions in this paragraph.
[EFFECTIVE DATE.] This section is effective for petitions
filed on or after July 1, 2003.
Sec. 20. Minnesota Statutes 2002, section 290A.03,
subdivision 8, is amended to read:
Subd. 8. [CLAIMANT.] (a) "Claimant" means a person, other
than a dependent, as defined under sections 151 and 152 of the
Internal Revenue Code disregarding section 152(b)(3) of the
Internal Revenue Code, who filed a claim authorized by this
chapter and who was a resident of this state as provided in
chapter 290 during the calendar year for which the claim for
relief was filed.
(b) In the case of a claim relating to rent constituting
property taxes, the claimant shall have resided in a rented or
leased unit on which ad valorem taxes or payments made in lieu
of ad valorem taxes, including payments of special assessments
imposed in lieu of ad valorem taxes, are payable at some time
during the calendar year covered by the claim.
(c) "Claimant" shall not include a resident of a nursing
home, intermediate care facility, or long-term residential
facility, or a facility that accepts group residential housing
payments whose rent constituting property taxes is paid pursuant
to the supplemental security income program under title XVI of
the Social Security Act, the Minnesota supplemental aid program
under sections 256D.35 to 256D.54, the medical assistance
program pursuant to title XIX of the Social Security Act, or the
general assistance medical care program pursuant to section
256D.03, subdivision 3, or the group residential housing program
under chapter 256I.
If only a portion of the rent constituting property taxes is
paid by these programs, the resident shall be a claimant for
purposes of this chapter, but the refund calculated pursuant to
section 290A.04 shall be multiplied by a fraction, the numerator
of which is income as defined in subdivision 3, paragraphs (1)
and (2), reduced by the total amount of income from the above
sources other than vendor payments under the medical assistance
program or the general assistance medical care program and the
denominator of which is income as defined in subdivision 3,
paragraphs (1) and (2), plus vendor payments under the medical
assistance program or the general assistance medical care
program, to determine the allowable refund pursuant to this
chapter.
(d) Notwithstanding paragraph (c), if the claimant was a
resident of the nursing home, intermediate care facility or,
long-term residential facility, or facility for which the rent
was paid for the claimant by the group residential housing
program for only a portion of the calendar year covered by the
claim, the claimant may compute rent constituting property taxes
by disregarding the rent constituting property taxes from the
nursing home, intermediate care facility, or long-term
residential facility and use only that amount of rent
constituting property taxes or property taxes payable relating
to that portion of the year when the claimant was not in the
facility. The claimant's household income is the income for the
entire calendar year covered by the claim.
(e) In the case of a claim for rent constituting property
taxes of a part-year Minnesota resident, the income and rental
reflected in this computation shall be for the period of
Minnesota residency only. Any rental expenses paid which may be
reflected in arriving at federal adjusted gross income cannot be
utilized for this computation. When two individuals of a
household are able to meet the qualifications for a claimant,
they may determine among them as to who the claimant shall be.
If they are unable to agree, the matter shall be referred to the
commissioner of revenue whose decision shall be final. If a
homestead property owner was a part-year Minnesota resident, the
income reflected in the computation made pursuant to section
290A.04 shall be for the entire calendar year, including income
not assignable to Minnesota.
(f) If a homestead is occupied by two or more renters, who
are not husband and wife, the rent shall be deemed to be paid
equally by each, and separate claims shall be filed by each.
The income of each shall be each renter's household income for
purposes of computing the amount of credit to be allowed.
[EFFECTIVE DATE.] This section is effective for claims
based on rent paid in 2003 and thereafter.
Sec. 21. Laws 1989, chapter 211, section 8, subdivision 2,
as amended by Laws 2002, chapter 390, section 24, is amended to
read:
Subd. 2. [OPERATION OF DISTRICT.] (a) A hospital district
created under this section shall be subject to Minnesota
Statutes, sections 447.32, except subdivision 1, to 447.41, and
except as provided otherwise in this act.
(b) A hospital district created under this section is a
municipal corporation and a political subdivision of the state.
[EFFECTIVE DATE.] This section is effective upon compliance
with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of the Cook county hospital district.
Sec. 22. Laws 1989, chapter 211, section 8, subdivision 4,
as amended by Laws 2002, chapter 390, section 24, is amended to
read:
Subd. 4. [TAX LEVY.] The tax levied under Minnesota
Statutes, section 447.34, shall not exceed $300,000 in any year,
and its for taxes levied in 2002. For taxes levied in 2003 and
subsequent years, the tax must not exceed the lesser of:
(1) the product of the hospital district's property tax
levy limitation for the previous year determined under this
subdivision, multiplied by 103 percent; or
(2) the product of the hospital district's property tax
levy limitation for the previous year determined under this
subdivision multiplied by the ratio of the most recent available
annual medical care expenditure category of the revised Consumer
Price Index, U.S. citywide average, for all urban consumers
prepared by the United States Department of Labor to the same
annual index for the previous year.
The proceeds of the tax may be used for all purposes of the
hospital district.
[EFFECTIVE DATE.] This section is effective upon compliance
with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of the Cook county hospital district.
ARTICLE 3
DEPARTMENT INCOME, CORPORATE FRANCHISE, AND
ESTATE TAX INITIATIVES
Section 1. Minnesota Statutes 2002, 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, if:
(1) a federal estate tax return is required to be filed; or
(2) 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, 2002.
Sec. 2. Minnesota Statutes 2002, section 289A.19,
subdivision 4, is amended to read:
Subd. 4. [ESTATE TAX RETURNS.] When in the commissioner's
judgment good cause exists, the commissioner may extend the time
for filing an estate tax return for not more than six months.
When an extension to file the federal estate tax return has been
granted under section 6081 of the Internal Revenue Code, the
time for filing the estate tax return is extended for that
period.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2001.
Sec. 3. Minnesota Statutes 2002, section 289A.31, is
amended by adding a subdivision to read:
Subd. 8. [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If
an individual income tax refund resulting from claiming an
education credit under section 290.0674 is paid by means of
directly depositing the proceeds of the refund into a bank
account controlled by the vendor of the product or service upon
which the education credit is based, and the commissioner
subsequently disallows the credit, the commissioner may seek
repayment of the refund from the vendor. The amount of the
repayment must be assessed and collected in the same time and
manner as an erroneous refund under section 289A.37, subdivision
2.
[EFFECTIVE DATE.] This section is effective for refunds
paid to accounts controlled by a vendor on or after the day
following final enactment.
Sec. 4. Minnesota Statutes 2002, section 289A.56,
subdivision 3, is amended to read:
Subd. 3. [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX,
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE
TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for
overpayments of withholding tax, entertainer withholding tax, or
withholding from payments to out-of-state contractors, or estate
tax, interest is computed from the date of payment to the date
the refund is paid or credited. For purposes of this
subdivision, the date of payment is the later of the date the
tax was finally due or was paid.
For the purposes of computing interest on estate tax
refunds, interest is paid from the later of the date of
overpayment, the date the estate tax return is due, or the date
the original estate tax return is filed to the date the refund
is paid.
For purposes of computing interest on sales and use tax
refunds, interest is paid from the date of payment to the date
the refund is paid or credited, if the refund claim includes a
detailed schedule reflecting the tax periods covered in the
claim. If the refund claim submitted does not include a
detailed schedule reflecting the tax periods covered in the
claim, interest is computed from the date the claim was filed.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2003.
Sec. 5. Minnesota Statutes 2002, section 289A.60,
subdivision 7, is amended to read:
Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer
files what purports to be a tax return or a claim for refund but
which does not contain information on which the substantial
correctness of the purported return or claim for refund may be
judged or contains information that on its face shows that the
purported return or claim for refund is substantially incorrect
and the conduct is due to a position that is frivolous or a
desire that appears on the purported return or claim for refund
to delay or impede the administration of Minnesota tax laws,
then the individual shall pay a penalty of $500 the greater of
$1,000 or 25 percent of the amount of tax required to be shown
on the return. In a proceeding involving the issue of whether
or not a person is liable for this penalty, the burden of proof
is on the commissioner.
[EFFECTIVE DATE.] This section is effective for returns
filed after December 31, 2003.
Sec. 6. Minnesota Statutes 2002, 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;
(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. For purposes of
this clause, if the taxpayer has an activity that in the taxable
year generates a deduction for depreciation under section 168(k)
and the activity generates a loss for the taxable year that the
taxpayer is not allowed to claim for the taxable year, "the
depreciation allowed under section 168(k)" for the taxable year
is limited to excess of the depreciation claimed by the activity
under section 168(k) over the amount of the loss from the
activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year
are allowed, the depreciation under section 168(k) is allowed.
[EFFECTIVE DATE.] This section is effective for taxable
years ending after September 10, 2001.
Sec. 7. Minnesota Statutes 2002, 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) income as provided under section 290.0802;
(5) to the extent included in federal adjusted gross
income, income realized on disposition of property exempt from
tax under section 290.491;
(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);
(7) the exemption amount allowed under Laws 1995, chapter
255, article 3, section 2, subdivision 3;
(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;
(9) (7) 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;
(10) (8) 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;
(11) (9) 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) (10) 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 for tax years
beginning after December 31, 2003.
Sec. 8. Minnesota Statutes 2002, 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;
(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. For purposes of
this clause, if the taxpayer has an activity that in the taxable
year generates a deduction for depreciation under section 168(k)
and the activity generates a loss for the taxable year that the
taxpayer is not allowed to claim for the taxable year, "the
depreciation allowed under section 168(k)" for the taxable year
is limited to excess of the depreciation claimed by the activity
under section 168(k) over the amount of the loss from the
activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year
are allowed, the depreciation under section 168(k) is allowed.
[EFFECTIVE DATE.] This section is effective for taxable
years ending after September 10, 2001.
Sec. 9. Minnesota Statutes 2002, 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;
(17) for a corporation whose foreign sales corporation, as
defined in section 922 of the Internal Revenue Code, constituted
a foreign operating corporation during any taxable year ending
before January 1, 1995, and a return was filed by August 15,
1996, claiming the deduction under this section 290.21,
subdivision 4, 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 the day
following final enactment.
Sec. 10. Minnesota Statutes 2002, section 290.06,
subdivision 2c, is amended to read:
Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES,
AND TRUSTS.] (a) The income taxes imposed by this chapter upon
married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be
computed by applying to their taxable net income the following
schedule of rates:
(1) On the first $25,680, 5.35 percent;
(2) On all over $25,680, but not over $102,030, 7.05
percent;
(3) On all over $102,030, 7.85 percent.
Married individuals filing separate returns, estates, and
trusts must compute their income tax by applying the above rates
to their taxable income, except that the income brackets will be
one-half of the above amounts.
(b) The income taxes imposed by this chapter upon unmarried
individuals must be computed by applying to taxable net income
the following schedule of rates:
(1) On the first $17,570, 5.35 percent;
(2) On all over $17,570, but not over $57,710, 7.05
percent;
(3) On all over $57,710, 7.85 percent.
(c) The income taxes imposed by this chapter upon unmarried
individuals qualifying as a head of household as defined in
section 2(b) of the Internal Revenue Code must be computed by
applying to taxable net income the following schedule of rates:
(1) On the first $21,630, 5.35 percent;
(2) On all over $21,630, but not over $86,910, 7.05
percent;
(3) On all over $86,910, 7.85 percent.
(d) In lieu of a tax computed according to the rates set
forth in this subdivision, the tax of any individual taxpayer
whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in
accordance with tables prepared and issued by the commissioner
of revenue based on income brackets of not more than $100. The
amount of tax for each bracket shall be computed at the rates
set forth in this subdivision, provided that the commissioner
may disregard a fractional part of a dollar unless it amounts to
50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the
entire year must compute the individual's Minnesota income tax
as provided in this subdivision. After the application of the
nonrefundable credits provided in this chapter, the tax
liability must then be multiplied by a fraction in which:
(1) the numerator is the individual's Minnesota source
federal adjusted gross income as defined in section 62 of the
Internal Revenue Code and increased by the additions required
under section 290.01, subdivision 19a, clauses (1), (5), and
(6), and reduced by the Minnesota assignable portion of the
subtraction for United States government interest under section
290.01, subdivision 19b, clause (1), after applying the
allocation and assignability provisions of section 290.081,
clause (a), or 290.17; and
(2) the denominator is the individual's federal adjusted
gross income as defined in section 62 of the Internal Revenue
Code of 1986, increased by the amounts specified in section
290.01, subdivision 19a, clauses (1), (5), and (6), and reduced
by the amounts specified in section 290.01, subdivision 19b,
clause (1).
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 11. Minnesota Statutes 2002, section 290.0671,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT ALLOWED.] (a) An individual is
allowed a credit against the tax imposed by this chapter equal
to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code.
(b) For individuals with no qualifying children, the credit
equals 1.9125 percent of the first $4,620 of earned income. The
credit is reduced by 1.9125 percent of earned income or modified
adjusted gross income, whichever is greater, in excess of
$5,770, but in no case is the credit less than zero.
(c) For individuals with one qualifying child, the credit
equals 8.5 percent of the first $6,920 of earned income and 8.5
percent of earned income over $12,080 but less than $13,450.
The credit is reduced by 5.73 percent of earned income or
modified adjusted gross income, whichever is greater, in excess
of $15,080, but in no case is the credit less than zero.
(d) For individuals with two or more qualifying children,
the credit equals ten percent of the first $9,720 of earned
income and 20 percent of earned income over $14,860 but less
than $16,800. The credit is reduced by 10.3 percent of earned
income or modified adjusted gross income, whichever is greater,
in excess of $17,890, but in no case is the credit less than
zero.
(e) For a nonresident or part-year resident, the credit
must be allocated based on the percentage calculated under
section 290.06, subdivision 2c, paragraph (e).
(f) For a person who was a resident for the entire tax year
and has earned income not subject to tax under this chapter, the
credit must be allocated based on the ratio of federal adjusted
gross income reduced by the earned income not subject to tax
under this chapter over federal adjusted gross income.
(g) For tax years beginning after December 31, 2001, and
before December 31, 2004, the $5,770 in paragraph (b) is
increased to $6,770, the $15,080 in paragraph (c) is increased
to $16,080, and the $17,890 in paragraph (d) is increased to
$18,890, after being adjusted for inflation under subdivision 7,
are each increased by $1,000 for married taxpayers filing joint
returns.
(h) For tax years beginning after December 31, 2004, and
before December 31, 2007, the $5,770 in paragraph (b) is
increased to $7,770, the $15,080 in paragraph (c) is increased
to $17,080, and the $17,890 in paragraph (d) is increased to
$19,890, after being adjusted for inflation under subdivision 7,
are each increased by $2,000 for married taxpayers filing joint
returns.
(i) For tax years beginning after December 31, 2007, and
before December 31, 2010, the $5,770 in paragraph (b) is
increased to $8,770, the $15,080 in paragraph (c) is increased
to $18,080, and the $17,890 in paragraph (d) is increased to
$20,890, after being adjusted for inflation under subdivision 7,
are each increased by $3,000 for married taxpayers filing joint
returns. For tax years beginning after December 31, 2008, the
$3,000 is adjusted annually for inflation under subdivision 7.
(j) The commissioner shall construct tables showing the
amount of the credit at various income levels and make them
available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may
graduate the transition between income brackets.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 12. Minnesota Statutes 2002, section 290.0675,
subdivision 2, is amended to read:
Subd. 2. [CREDIT ALLOWED.] A married couple filing a joint
return is allowed a credit against the tax imposed under section
290.06.
The minimum taxable income for the married couple to be
eligible for the credit is $25,680, and the minimum earned
income in order for the couple to be eligible for the credit is
$14,250 for each spouse.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 13. Minnesota Statutes 2002, 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 and income levels in section
290.06, subdivision 2c, paragraph (a), as adjusted for the
taxable year by section 290.06, subdivision 2d, and the sum of
the tax under the rates and income levels of section 290.06,
subdivision 2c, paragraph (b), as adjusted for the taxable year
by section 290.06, subdivision 2d, on the earned income of the
lesser-earning spouse, and the tax under the rates and income
levels of section 290.06, subdivision 2c, paragraph (b), as
adjusted for the taxable year by section 290.06, subdivision 2d,
on the couple's joint Minnesota taxable income, minus the earned
income of the lesser-earning spouse.
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.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 14. Minnesota Statutes 2002, section 290.0679,
subdivision 2, is amended to read:
Subd. 2. [CONDITIONS FOR ASSIGNMENT.] A qualifying
taxpayer may assign all or part of an anticipated refund for the
current and future taxable years to a financial institution or a
qualifying organization. A financial institution or qualifying
organization accepting assignment must pay the amount secured by
the assignment to a third-party vendor. The commissioner of
children, families, and learning shall provide a list of
categories of, upon request from a third-party vendor, certify
that the vendor's products and services that qualify for the
education credit to financial institutions and qualifying
organizations. A denial of a certification is subject to the
contested case procedure under chapter 14. A financial
institution or qualifying organization that accepts assignments
under this section must verify as part of the assignment
documentation that the product or service to be provided by the
third-party vendor qualifies has been certified by the
commissioner of children, families, and learning as qualifying
for the education credit. The amount assigned for the current
and future taxable years may not exceed the maximum allowable
education credit for the current taxable year. Both the
taxpayer and spouse must consent to the assignment of a refund
from a joint return.
[EFFECTIVE DATE.] This section is effective for assignments
made on or after the day following final enactment.
Sec. 15. Minnesota Statutes 2002, section 290.0802,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given.
(a) "Adjusted gross income" means federal adjusted gross
income as used in section 22(d) of the Internal Revenue Code for
the taxable year, plus a lump sum distribution as defined in
section 402(e)(3) of the Internal Revenue Code, and less any
pension, annuity, or disability benefits included in federal
gross income but not subject to state taxation other than the
subtraction allowed under section 290.01, subdivision 19b,
clause (4).
(b) "Disability income" means disability income as defined
in section 22(c)(2)(B)(iii) of the Internal Revenue Code.
(c) "Nontaxable retirement and disability benefits" means
the amount of pension, annuity, or disability benefits that
would be included in the reduction under section 22(c)(3) of the
Internal Revenue Code and pension, annuity, or disability
benefits included in federal gross income but not subject to
state taxation other than the subtraction allowed under section
290.01, subdivision 19b, clause (4).
(d) "Qualified individual" means a qualified individual as
defined in section 22(b) of the Internal Revenue Code.
(e) "Social security benefits above the second federal
threshold" means the amount of social security benefits included
in federal taxable income due to the provisions of section 13215
of the Omnibus Budget Reconciliation Act of 1993, Public Law
Number 103-66.
[EFFECTIVE DATE.] This section is effective for tax years
beginning after December 31, 2002.
Sec. 16. Minnesota Statutes 2002, 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 2002.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2002.
Sec. 17. Minnesota Statutes 2002, 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 computed
under section 2011 of the Internal Revenue Code, as amended
through December 31, 2000, 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 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 federal estate tax computed under section 2001
of the Internal Revenue Code after the allowance of the federal
credits allowed under section 2010 of the Internal Revenue Code
of 1986, as amended through December 31, 2000. For the purposes
of this section, expenses which are deducted for federal income
tax purposes under section 642(g) of the Internal Revenue Code
as amended through December 31, 2002, are not allowable in
computing the tax under this chapter.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2002.
Sec. 18. Minnesota Statutes 2002, section 352.15,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money,
annuities, or other benefits mentioned in this chapter is
assignable either in law or in equity or subject to state estate
tax, or to execution, levy, attachment, garnishment, or other
legal process, except as provided in subdivision 1a or section
518.58, 518.581, or 518.6111.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2002.
Sec. 19. Minnesota Statutes 2002, section 353.15,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION; EXCEPTIONS.] No money, annuity,
or benefit provided for in this chapter is assignable or subject
to any state estate tax, or to execution, levy, attachment,
garnishment, or legal process, except as provided in subdivision
2 or section 518.58, 518.581, or 518.6111.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2002.
Sec. 20. Minnesota Statutes 2002, section 354.10,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION; EXCEPTIONS.] The right of a
teacher to take advantage of the benefits provided by this
chapter, is a personal right only and is not assignable. All
money to the credit of a teacher's account in the fund or any
money payable to the teacher from the fund belongs to the state
of Minnesota until actually paid to the teacher or a beneficiary
under this chapter. The association may acknowledge a properly
completed power of attorney form. An assignment or attempted
assignment of a teacher's interest in the fund, or of the
beneficiary's interest in the fund, by a teacher or a
beneficiary is void and exempt from taxation under chapter 291
and from garnishment or levy under attachment or execution,
except as provided in subdivision 2 or 3, or section 518.58,
518.581, or 518.6111.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2002.
Sec. 21. Minnesota Statutes 2002, section 354B.30, is
amended to read:
354B.30 [PROHIBITION ON LOANS OR PRETERMINATION
DISTRIBUTIONS.]
(a) No participant may obtain a loan from the plan or
obtain any distribution from the plan at a time before the
participant terminates the employment that gave rise to plan
coverage.
(b) No amounts to the credit of the plan are assignable
either in law or in equity, are subject to state estate tax, or
are subject to execution, levy, attachment, garnishment, or
other legal process, except as provided in section 518.58,
518.581, or 518.6111.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2002.
Sec. 22. Minnesota Statutes 2002, section 354C.165, is
amended to read:
354C.165 [PROHIBITION ON LOANS OR PRETERMINATION
DISTRIBUTIONS.]
(a) Except as provided in paragraph (c), no participant may
obtain a loan or any distribution from the plan before the
participant terminates the employment that gave rise to plan
coverage.
(b) No amounts to the credit of the plan are assignable
either in law or in equity, are subject to state estate tax, or
are subject to execution, levy, attachment, garnishment, or
other legal process, except as provided in section 518.58,
518.581, or 518.6111.
(c) Unless prohibited by or subject to a penalty under
federal law, a teacher who is a participant in the supplemental
retirement plan may request, in writing, a transfer of all or a
portion of the funds accumulated in the person's supplemental
plan account to the teachers retirement association to purchase
service credit under sections 354.53, 354.533, 354.534, 354.535,
354.536, 354.537, and 354.538 or to the teachers retirement fund
association to purchase service credit under sections 354A.097,
354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104.
Upon receipt of a valid request, the board shall execute the
transfer. The transfer must be a fund-to-fund transfer, and in
no event shall the participant directly receive any of the funds
while still employed by the board. In no event may the board
transfer more than the participant's account balance. The
board, in cooperation with the executive director of the
teachers retirement association, shall develop the forms for
requesting a transfer and the procedures for executing the
requested transfers.
[EFFECTIVE DATE.] This section is effective for estates of
decedents dying after December 31, 2002.
Sec. 23. Laws 2001, First Special Session chapter 5,
article 9, section 12, the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective for assignment
of refunds filed with the commissioner after December 31, 2001.
The time period for filing assignments expires December 31,
2003, but assignments filed on or before that date remain in
effect until satisfied or canceled.
Sec. 24. [REPEALER.]
(a) Minnesota Statutes 2002, sections 290.0671, subdivision
3; and 290.0675, subdivision 5, are repealed effective for tax
years beginning after December 31, 2002.
(b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100;
8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed
effective the day following final enactment.
ARTICLE 4
FEDERAL UPDATE
Section 1. Minnesota Statutes 2002, 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 March 15 December 31,
2002.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2002, 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 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.
The Internal Revenue Code of 1986, as amended through
December 31, 2002, shall be in effect for taxable years
beginning after December 31, 2002.
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. 3. Minnesota Statutes 2002, 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 March 15 December 31,
2002.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2002, 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 March 15 December 31, 2002.
[EFFECTIVE DATE.] This section is effective for refunds
payable for rents paid in 2003 and thereafter and property taxes
payable in 2004 and thereafter.
ARTICLE 5
DEPARTMENT PROPERTY TAX INITIATIVES
Section 1. Minnesota Statutes 2002, section 270.06, is
amended to read:
270.06 [POWERS AND DUTIES.]
The commissioner of revenue shall:
(1) have and exercise general supervision over the
administration of the assessment and taxation laws of the state,
over assessors, town, county, and city boards of review and
equalization, and all other assessing officers in the
performance of their duties, to the end that all assessments of
property be made relatively just and equal in compliance with
the laws of the state;
(2) confer with, advise, and give the necessary
instructions and directions to local assessors and local boards
of review throughout the state as to their duties under the laws
of the state;
(3) direct proceedings, actions, and prosecutions to be
instituted to enforce the laws relating to the liability and
punishment of public officers and officers and agents of
corporations for failure or negligence to comply with the
provisions of the laws of this state governing returns of
assessment and taxation of property, and cause complaints to be
made against local assessors, members of boards of equalization,
members of boards of review, or any other assessing or taxing
officer, to the proper authority, for their removal from office
for misconduct or negligence of duty;
(4) require county attorneys to assist in the commencement
of prosecutions in actions or proceedings for removal,
forfeiture and punishment for violation of the laws of this
state in respect to the assessment and taxation of property in
their respective districts or counties;
(5) require town, city, county, and other public officers
to report information as to the assessment of property,
collection of taxes received from licenses and other sources,
and such other information as may be needful in the work of the
department of revenue, in such form and upon such blanks as the
commissioner may prescribe;
(6) require individuals, copartnerships, companies,
associations, and corporations to furnish information concerning
their capital, funded or other debt, current assets and
liabilities, earnings, operating expenses, taxes, as well as all
other statements now required by law for taxation purposes;
(7) subpoena witnesses, at a time and place reasonable
under the circumstances, to appear and give testimony, and to
produce books, records, papers and documents for inspection and
copying relating to any matter which the commissioner may have
authority to investigate or determine;
(8) issue a subpoena which does not identify the person or
persons with respect to whose liability the subpoena is issued,
but only if (a) the subpoena relates to the investigation of a
particular person or ascertainable group or class of persons,
(b) there is a reasonable basis for believing that such person
or group or class of persons may fail or may have failed to
comply with any law administered by the commissioner, (c) the
information sought to be obtained from the examination of the
records (and the identity of the person or persons with respect
to whose liability the subpoena is issued) is not readily
available from other sources, (d) the subpoena is clear and
specific as to the information sought to be obtained, and (e)
the information sought to be obtained is limited solely to the
scope of the investigation. Provided further that the party
served with a subpoena which does not identify the person or
persons with respect to whose tax liability the subpoena is
issued shall have the right, within 20 days after service of the
subpoena, to petition the district court for the judicial
district in which lies the county in which that party is located
for a determination as to whether the commissioner of revenue
has complied with all the requirements in (a) to (e), and thus,
whether the subpoena is enforceable. If no such petition is
made by the party served within the time prescribed, the
subpoena shall have the force and effect of a court order;
(9) cause the deposition of witnesses residing within or
without the state, or absent therefrom, to be taken, upon notice
to the interested party, if any, in like manner that depositions
of witnesses are taken in civil actions in the district court,
in any matter which the commissioner may have authority to
investigate or determine;
(10) investigate the tax laws of other states and countries
and to formulate and submit to the legislature such legislation
as the commissioner may deem expedient to prevent evasions of
assessment and taxing laws, and secure just and equal taxation
and improvement in the system of assessment and taxation in this
state;
(11) consult and confer with the governor upon the subject
of taxation, the administration of the laws in regard thereto,
and the progress of the work of the department of revenue, and
furnish the governor, from time to time, such assistance and
information as the governor may require relating to tax matters;
(12) transmit to the governor, on or before the third
Monday in December of each even-numbered year, and to each
member of the legislature, on or before November 15 of each
even-numbered year, the report of the department of revenue for
the preceding years, showing all the taxable property in the
state and the value of the same, in tabulated form;
(13) inquire into the methods of assessment and taxation
and ascertain whether the assessors faithfully discharge their
duties, particularly as to their compliance with the laws
requiring the assessment of all property not exempt from
taxation;
(14) administer and enforce the assessment and collection
of state taxes and fees, including the use of any remedy
available to nongovernmental creditors, and, from time to time,
make, publish, and distribute rules for the administration and
enforcement of assessments and fees laws administered by the
commissioner and state tax laws. The rules have the force of
law;
(15) prepare blank forms for the returns required by state
tax law and distribute them throughout the state, furnishing
them subject to charge on application;
(16) prescribe rules governing the qualification and
practice of agents, attorneys, or other persons representing
taxpayers before the commissioner. The rules may require that
those persons, agents, and attorneys show that they are of good
character and in good repute, have the necessary qualifications
to give taxpayers valuable services, and are otherwise competent
to advise and assist taxpayers in the presentation of their case
before being recognized as representatives of taxpayers. After
due notice and opportunity for hearing, the commissioner may
suspend and bar from further practice before the commissioner
any person, agent, or attorney who is shown to be incompetent or
disreputable, who refuses to comply with the rules, or who with
intent to defraud, willfully or knowingly deceives, misleads, or
threatens a taxpayer or prospective taxpayer, by words,
circular, letter, or by advertisement. This clause does not
curtail the rights of individuals to appear in their own behalf
or partners or corporations' officers to appear in behalf of
their respective partnerships or corporations;
(17) appoint agents as the commissioner considers necessary
to make examinations and determinations. The agents have the
rights and powers conferred on the commissioner to subpoena,
examine, and copy books, records, papers, or memoranda, subpoena
witnesses, administer oaths and affirmations, and take
testimony. In addition to administrative subpoenas of the
commissioner and the agents, upon demand of the commissioner or
an agent, the court administrator of any district court shall
issue a subpoena for the attendance of a witness or the
production of books, papers, records, or memoranda before the
agent for inspection and copying. Disobedience of a court
administrator's subpoena shall be punished by the district court
of the district in which the subpoena is issued, or in the case
of a subpoena issued by the commissioner or an agent, by the
district court of the district in which the party served with
the subpoena is located, in the same manner as contempt of the
district court;
(18) appoint and employ additional help, purchase supplies
or materials, or incur other expenditures in the enforcement of
state tax laws as considered necessary. The salaries of all
agents and employees provided for in this chapter shall be fixed
by the appointing authority, subject to the approval of the
commissioner of administration;
(19) execute and administer any agreement with the
secretary of the treasury of the United States or a
representative of another state regarding the exchange of
information and administration of the tax laws;
(20) authorize the use of unmarked motor vehicles to
conduct seizures or criminal investigations pursuant to the
commissioner's authority; and
(21) exercise other powers and perform other duties
required of or imposed upon the commissioner of revenue by law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2002, section 270.10,
subdivision 1a, is amended to read:
Subd. 1a. [NOTIFICATION TO TAXPAYER.] At the same time
that notice of the assessment, determination, or order of the
commissioner is given to a taxpayer, the taxpayer must be
notified in writing of the right to appeal to the tax court, and
if applicable, to the small claims division. Except in the case
of mathematical or clerical errors, the notice must contain a
description of the basis for, including applicable law and other
factors considered in the determination, and a listing of the
amounts of tax due, interest, additions to tax, and penalties.
Failure to provide all the required information does not
invalidate the notice for purposes of satisfying statutory
notice requirements if the notice contains sufficient
information to advise the taxpayer that an assessment, order, or
other determination has been made. The taxpayer may request
further clarification within the time provided for appealing the
determination. In any notice of assessment, determination, or
order dealing with property valuation or assessment for property
tax purposes by the commissioner of revenue or a local unit of
government, the taxpayer must be notified in writing that a
taxpayer must appeal to the town or city board of equalization
and to the county board of equalization before appealing to the
small claims division of the tax court, except for those
taxpayers whose original assessments are determined by the
commissioner of revenue.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 57. [COMPREHENSIVE HEALTH ASSOCIATION.] All property
owned by the comprehensive health association is exempt to the
extent provided in section 62E.10, subdivision 1.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 58. [PRIVATE CEMETERIES.] All property owned by
private cemeteries is exempt to the extent provided in section
307.09.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 59. [WESTERN LAKE SUPERIOR SANITARY BOARD.] All
property owned, leased, controlled, used, or occupied for
public, governmental, and municipal purposes by the Western Lake
Superior Sanitary Board is exempt to the extent provided in
section 458D.23.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 60. [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished
sale or rental projects are exempt to the extent provided in
section 469.155, subdivision 17.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 61. [SKYWAYS.] The pedestrian skyway system,
underground pedestrian concourse, the people mover system, and
publicly owned parking structures are exempt to the extent
provided in section 469.127.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 8. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 62. [MUNICIPAL RECREATION FACILITIES.] All property
acquired and used by a city is exempt to the extent provided in
section 471.191, subdivision 4.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 9. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 63. [WATER AND WASTEWATER TREATMENT
FACILITIES.] Related facilities owned by water and wastewater
treatment providers who have contracted with a municipality to
provide capital intensive public services to the municipality
are exempt to the extent provided in section 471A.05.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 2002, section 272.12, is
amended to read:
272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.]
When:
(a) a deed or other instrument conveying land,
(b) a plat of any town site or addition thereto,
(c) a survey required pursuant to section 508.47,
(d) a condominium plat subject to chapter 515 or 515A or a
declaration that contains such a plat, or
(e) a common interest community plat subject to chapter
515B or a declaration that contains such a plat,
is presented to the county auditor for transfer, the auditor
shall ascertain from the records if there be taxes delinquent
upon the land described therein, or if it has been sold for
taxes. An assignment of a sheriff's or referee's certificate of
sale, when the certificate of sale describes real estate, and
certificates of redemption from mortgage or lien foreclosure
sales, when the certificate of redemption encompasses real
estate and is issued to a junior creditor, are considered
instruments conveying land for the purposes of this section and
section 272.121. If there are taxes delinquent, the auditor
shall certify to the same; and upon payment of such taxes, or in
case no taxes are delinquent, shall transfer the land upon the
books of the auditor's office, and note upon the instrument,
over official signature, the words, "no delinquent taxes and
transfer entered," or, if the land described has been sold or
assigned to an actual purchaser for taxes, the words "paid by
sale of land described within;" and, unless such statement is
made upon such instrument, the county recorder or the registrar
of titles shall refuse to receive or record the same; provided,
that sheriff's or referees' certificates of sale on execution or
foreclosure of a lien or mortgage, certificates of redemption
from mortgage or lien foreclosure sales issued to the redeeming
mortgagor or lienee, deeds of distribution made by a personal
representative in probate proceedings, decrees and judgments,
receivers receipts, patents, and copies of town or statutory
city plats, in case the original plat filed in the office of the
county recorder has been lost or destroyed, and the instruments
releasing, removing and discharging reversionary and forfeiture
provisions affecting title to land and instruments releasing,
removing or discharging easement rights in land or building or
other restrictions, may be recorded without such certificate;
and, provided that instruments conveying land and, as
appurtenant thereto an easement over adjacent tract or tracts of
land, may be recorded without such certificate as to the land
covered by such easement; and provided further, that any
instrument granting an easement made in favor of any public
utility or pipe line for conveying gas, liquids or solids in
suspension, in the nature of a right-of-way over, along, across
or under a tract of land may be recorded without such
certificate as to the land covered by such easement. Any
instrument amending or restating the declarations, bylaws,
plats, or other enabling Documents governing homeowners
associations of condominiums, townhouses, common interest
ownership communities, and other planned unit developments may
be recorded without the auditor's certificate to the extent
provided in section 515B.1-116(f).
A deed of distribution made by a personal representative in
a probate proceeding, a decree, or a judgment that conveys land
shall be presented to the county auditor, who shall transfer the
land upon the books of the auditor's office and note upon the
instrument, over official signature, the words, "transfer
entered", and the instrument may then be recorded. A decree or
judgment that affects title to land but does not convey land may
be recorded without presentation to the auditor.
A violation of this section by the county recorder or the
registrar of titles shall be a gross misdemeanor, and, in
addition to the punishment therefor, the recorder or registrar
shall be liable to the grantee of any instrument so recorded for
the amount of any damages sustained.
When, as a condition to permitting the recording of deed or
other instrument affecting the title to real estate previously
forfeited to the state under the provisions of sections 281.16
to 281.25, county officials, after such real estate has been
purchased or repurchased, have required the payment of taxes
erroneously assumed to have accrued against such real estate
after forfeiture and before the date of purchase or repurchase,
the sum required to be so paid shall be refunded to the persons
entitled thereto out of moneys in the funds in which the sum so
paid was placed. Delinquent taxes are those taxes deemed
delinquent under section 279.02.
[EFFECTIVE DATE.] This section is effective for deeds or
instruments accepted for recording or registration on or after
July 1, 2003.
Sec. 11. Minnesota Statutes 2002, section 273.05,
subdivision 1, is amended to read:
Subdivision 1. [APPOINTMENT OF TOWN AND CITY ASSESSORS.]
Notwithstanding any other provision of law all town assessors
shall be appointed by the town board, and notwithstanding any
charter provisions to the contrary, all city assessors shall be
appointed by the city council or other appointing authority as
provided by law or charter. Such assessors shall be residents
of the state but need not be a resident of the town or city for
which they are appointed. They shall be selected and appointed
because of their knowledge and training in the field of property
taxation. All town and statutory city assessors shall be
appointed for indefinite terms. A town or statutory city
assessor who is an employee may be dismissed by the appointing
authority for cause. The term of the town or city assessors may
be terminated at any time by the town board or city council on
charges by the commissioner of revenue of inefficiency or
neglect of duty. Vacancies in the office of town or city
assessor shall be filled within 90 days by appointment of the
respective appointing authority indicated above. If the vacancy
is not filled within 90 days, the office shall be terminated.
When a vacancy in the office of town or city assessor is not
filled by appointment, and it is imperative that the office of
assessor be filled, the county auditor shall appoint some
resident of the county as assessor for such town or city. The
county auditor may appoint the county assessor as assessor for
such town or city, in which case the town or city shall pay to
the county treasurer the amount determined by the county auditor
to be due for the services performed and expenses incurred by
the county assessor in acting as assessor for such town or
city. The term of any town or statutory city assessor in a
county electing in accordance with section 273.052 shall be
terminated as provided in section 273.055.
The commissioner of revenue may recommend to the state
board of assessors the nonrenewal, suspension, or revocation of
an assessor's license as provided in sections 270.41 to 270.53.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to every town or city
assessor whether that assessor was appointed before, on, or
after the effective date.
Sec. 12. Minnesota Statutes 2002, section 273.061, is
amended by adding a subdivision to read:
Subd. 1a. [COMPATIBLE OFFICES.] A person appointed as the
county assessor also may serve as the county auditor, county
treasurer, or county auditor-treasurer if those offices are
appointive, provided that the person in the combined appointed
office must not serve on the county board of appeal and
equalization under section 274.13. In a county in which the
functions of the county assessor are combined with those of the
county auditor or county auditor-treasurer, the county board may
not delegate any authority, power, or responsibility under
section 375.192, subdivision 4.
[EFFECTIVE DATE.] This section is effective January 2, 2004.
Sec. 13. Minnesota Statutes 2002, section 273.061, is
amended by adding a subdivision to read:
Subd. 1b. [COMPATIBLE OFFICES IN COUNTIES CHANGING TO
APPOINTED AUDITOR.] In a county in which the office of auditor,
treasurer, or auditor-treasurer is an elective position, a
person appointed as the county assessor also may serve as the
county auditor, county treasurer, or county auditor-treasurer if
a proposal to make the affected office appointive has been
approved as required by other law and will be effective within
five years.
[EFFECTIVE DATE.] This section is effective January 2, 2004.
Sec. 14. Minnesota Statutes 2002, section 273.061, is
amended by adding a subdivision to read:
Subd. 1c. [INCOMPATIBLE OFFICES.] The person appointed as
the county assessor must not also be the county attorney, a
county board member, an elected county auditor, an elected
county treasurer, an elected county auditor-treasurer, a town
board supervisor for a town in the same county, or a city mayor
or council member for a city in the same county. The person
appointed as the city assessor must not also be a city council
member or mayor for the same city. A person appointed as the
town assessor must not also be a town board supervisor for the
same town. Except as provided in subdivision 1b, an assessor
who accepts a position that is incompatible with the office of
assessor is deemed to have resigned from the assessor position.
[EFFECTIVE DATE.] This section is effective January 2, 2004.
Sec. 15. Minnesota Statutes 2002, section 273.11,
subdivision 1a, is amended to read:
Subd. 1a. [LIMITED MARKET VALUE.] In the case of all
property classified as agricultural homestead or nonhomestead,
residential homestead or nonhomestead, timber, or noncommercial
seasonal residential recreational residential, the assessor
shall compare the value with the taxable portion of the value
determined in the preceding assessment.
For assessment year 2002, the amount of the increase shall
not exceed the greater of (1) ten percent of the value in the
preceding assessment, or (2) 15 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2003, the amount of the increase shall
not exceed the greater of (1) 12 percent of the value in the
preceding assessment, or (2) 20 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2004, the amount of the increase shall
not exceed the greater of (1) 15 percent of the value in the
preceding assessment, or (2) 25 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2005, the amount of the increase shall
not exceed the greater of (1) 15 percent of the value in the
preceding assessment, or (2) 33 percent of the difference
between the current assessment and the preceding assessment.
For assessment year 2006, the amount of the increase shall
not exceed the greater of (1) 15 percent of the value in the
preceding assessment, or (2) 50 percent of the difference
between the current assessment and the preceding assessment.
This limitation shall not apply to increases in value due
to improvements. For purposes of this subdivision, the term
"assessment" means the value prior to any exclusion under
subdivision 16.
The provisions of this subdivision shall be in effect
through assessment year 2006 as provided in this subdivision.
For purposes of the assessment/sales ratio study conducted
under section 127A.48, and the computation of state aids paid
under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and
477A, market values and net tax capacities determined under this
subdivision and subdivision 16, shall be used.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. Minnesota Statutes 2002, section 273.124,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE.] (a) Residential real estate
that is occupied and used for the purposes of a homestead by its
owner, who must be a Minnesota resident, is a residential
homestead.
Agricultural land, as defined in section 273.13,
subdivision 23, that is occupied and used as a homestead by its
owner, who must be a Minnesota resident, is an agricultural
homestead.
Dates for establishment of a homestead and homestead
treatment provided to particular types of property are as
provided in this section.
Property held by a trustee under a trust is eligible for
homestead classification if the requirements under this chapter
are satisfied.
The assessor shall require proof, as provided in
subdivision 13, of the facts upon which classification as a
homestead may be determined. Notwithstanding any other law, the
assessor may at any time require a homestead application to be
filed in order to verify that any property classified as a
homestead continues to be eligible for homestead status.
Notwithstanding any other law to the contrary, the department of
revenue may, upon request from an assessor, verify whether an
individual who is requesting or receiving homestead
classification has filed a Minnesota income tax return as a
resident for the most recent taxable year for which the
information is available.
When there is a name change or a transfer of homestead
property, the assessor may reclassify the property in the next
assessment unless a homestead application is filed to verify
that the property continues to qualify for homestead
classification.
(b) For purposes of this section, homestead property shall
include property which is used for purposes of the homestead but
is separated from the homestead by a road, street, lot,
waterway, or other similar intervening property. The term "used
for purposes of the homestead" shall include but not be limited
to uses for gardens, garages, or other outbuildings commonly
associated with a homestead, but shall not include vacant land
held primarily for future development. In order to receive
homestead treatment for the noncontiguous property, the owner
must use the property for the purposes of the homestead, and
must apply to the assessor, both by the deadlines given in
subdivision 9. After initial qualification for the homestead
treatment, additional applications for subsequent years are not
required.
(c) Residential real estate that is occupied and used for
purposes of a homestead by a relative of the owner is a
homestead but only to the extent of the homestead treatment that
would be provided if the related owner occupied the property.
For purposes of this paragraph and paragraph (g), "relative"
means a parent, stepparent, child, stepchild, grandparent,
grandchild, brother, sister, uncle, aunt, nephew, or niece.
This relationship may be by blood or marriage. Property that
has been classified as seasonal residential recreational
residential property at any time during which it has been owned
by the current owner or spouse of the current owner will not be
reclassified as a homestead unless it is occupied as a homestead
by the owner; this prohibition also applies to property that, in
the absence of this paragraph, would have been classified as
seasonal residential recreational residential property at the
time when the residence was constructed. Neither the related
occupant nor the owner of the property may claim a property tax
refund under chapter 290A for a homestead occupied by a
relative. In the case of a residence located on agricultural
land, only the house, garage, and immediately surrounding one
acre of land shall be classified as a homestead under this
paragraph, except as provided in paragraph (d).
(d) Agricultural property that is occupied and used for
purposes of a homestead by a relative of the owner, is a
homestead, only to the extent of the homestead treatment that
would be provided if the related owner occupied the property,
and only if all of the following criteria are met:
(1) the relative who is occupying the agricultural property
is a son, daughter, grandson, granddaughter, father, or mother
of the owner of the agricultural property or a son, daughter,
grandson, or granddaughter of the spouse of the owner of the
agricultural property;
(2) the owner of the agricultural property must be a
Minnesota resident;
(3) the owner of the agricultural property must not receive
homestead treatment on any other agricultural property in
Minnesota; and
(4) the owner of the agricultural property is limited to
only one agricultural homestead per family under this paragraph.
Neither the related occupant nor the owner of the property
may claim a property tax refund under chapter 290A for a
homestead occupied by a relative qualifying under this
paragraph. For purposes of this paragraph, "agricultural
property" means the house, garage, other farm buildings and
structures, and agricultural land.
Application must be made to the assessor by the owner of
the agricultural property to receive homestead benefits under
this paragraph. The assessor may require the necessary proof
that the requirements under this paragraph have been met.
(e) In the case of property owned by a property owner who
is married, the assessor must not deny homestead treatment in
whole or in part if only one of the spouses occupies the
property and the other spouse is absent due to: (1) marriage
dissolution proceedings, (2) legal separation, (3) employment or
self-employment in another location, or (4) other personal
circumstances causing the spouses to live separately, not
including an intent to obtain two homestead classifications for
property tax purposes. To qualify under clause (3), the
spouse's place of employment or self-employment must be at least
50 miles distant from the other spouse's place of employment,
and the homesteads must be at least 50 miles distant from each
other. Homestead treatment, in whole or in part, shall not be
denied to the owner's spouse who previously occupied the
residence with the owner if the absence of the owner is due to
one of the exceptions provided in this paragraph.
(f) The assessor must not deny homestead treatment in whole
or in part if:
(1) in the case of a property owner who is not married, the
owner is absent due to residence in a nursing home, boarding
care facility, or an elderly assisted living facility property
as defined in section 273.13, subdivision 25a, and the property
is not otherwise occupied; or
(2) in the case of a property owner who is married, the
owner or the owner's spouse or both are absent due to residence
in a nursing home, boarding care facility, or an elderly
assisted living facility property as defined in section 273.13,
subdivision 25a, and the property is not occupied or is occupied
only by the owner's spouse.
(g) If an individual is purchasing property with the intent
of claiming it as a homestead and is required by the terms of
the financing agreement to have a relative shown on the deed as
a coowner, the assessor shall allow a full homestead
classification. This provision only applies to first-time
purchasers, whether married or single, or to a person who had
previously been married and is purchasing as a single individual
for the first time. The application for homestead benefits must
be on a form prescribed by the commissioner and must contain the
data necessary for the assessor to determine if full homestead
benefits are warranted.
(h) If residential or agricultural real estate is occupied
and used for purposes of a homestead by a child of a deceased
owner and the property is subject to jurisdiction of probate
court, the child shall receive relative homestead classification
under paragraph (c) or (d) to the same extent they would be
entitled to it if the owner was still living, until the probate
is completed. For purposes of this paragraph, "child" includes
a relationship by blood or by marriage.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 17. Minnesota Statutes 2002, 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 property;
(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; and
(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
property; 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 recreational 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 residential 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;
(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, (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 the day
following final enactment.
Sec. 18. Minnesota Statutes 2002, section 273.1398,
subdivision 4b, is amended to read:
Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a)
Until the costs of court administration as defined under section
480.183, subdivision 3, in a county have been transferred to the
state, each county in a judicial district transferring court
administration costs to state funding after July 1, 2001, shall
budget for the funding of these costs an amount at least equal
to the certified budget amount for calendar year 2001, increased
by six percent for each year from 2001 to 2003 and by eight
percent from 2004 to the year of the transfer. The county shall
budget, fund, and authorize expenditures not less than the
amount calculated under this paragraph plus the temporary aid
amount under subdivision 4c for maintenance of effort of
administrative costs.
(b) By July 15, 2001, the court shall certify to each
county in the judicial district its cost of court administration
as defined under section 480.183, subdivision 3, based on 2001
budgets. In making that determination, the court shall exclude
the budget costs of the county for the following categories:
(1) rent;
(2) examiner of titles;
(3) civil court appointed attorneys for civil matters;
(4) hospitalization costs; and
(5) cost of maintaining vital statistics.
The amount of funding provided by a county for courts that
is increased by the maintenance of effort requirement may not be
used by a county to pay the costs described in clauses (1) to
(5).
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 19. Minnesota Statutes 2002, section 273.1398,
subdivision 4d, is amended to read:
Subd. 4d. [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.]
For aid payable in 2004, each county's aid under subdivision 2
shall be permanently reduced by an amount equal to the county's
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
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, 2004
1, 2003. The aid reduction under this subdivision must 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 and thereafter.
Sec. 20. Minnesota Statutes 2002, section 273.372, is
amended to read:
273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD
VALUATIONS.]
An appeal by a utility or railroad company concerning the
exemption, valuation, or classification on of property for which
the commissioner of revenue has provided the city or county
assessor with commissioner's orders valuations by order, or for
which the commissioner has recommended values to the city or
county assessor, must be brought against the commissioner in tax
court or in district court of the county where the property is
located, and not against the county or taxing district where the
property is located. If the appeal to a court is of from an
order of the commissioner, it must be brought under chapter
271. If the appeal is from the exemption, valuation,
classification, or tax that results from implementation of the
commissioner's order or recommendation, it must be brought under
chapter 278, and the procedures provisions in that chapter
apply, except that service shall be on the commissioner only and
not on the county officials specified in section 278.01,
subdivision 1. This provision applies to the property contained
under described in sections 273.33, 273.35, 273.36, and 273.37,
but only if the appealed values have remained unchanged from
those provided to the city or county by the commissioner. If
the exemption, valuation, or classification being appealed has
been changed by the city or county, then the action must be
brought under chapter 278 in the county where the property is
located and proper service must be made upon the county
officials as specified in section 278.01, subdivision 1.
Upon filing of any appeal by a utility company or railroad
against the commissioner, the commissioner shall give notice by
first class mail to each county which would be affected by the
appeal.
Companies that submit the reports under section 270.82 or
273.371 by the date specified in that section, or by the date
specified by the commissioner in an extension, may appeal
administratively to the commissioner under the procedures in
section 270.11, subdivision 6, prior to bringing an action in
tax court or in district court, however, instituting an
administrative appeal with the commissioner does not change or
modify the deadline in section 271.06 for appealing an order of
the commissioner in tax court or the deadline in section 278.01
for bringing an action filing a property tax claim or objection
in tax court or district court.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 21. Minnesota Statutes 2002, section 273.42,
subdivision 2, is amended to read:
Subd. 2. Owners of land that is an agricultural or
nonagricultural homestead, nonhomestead agricultural land,
rental residential property, and both commercial and
noncommercial seasonal residential recreational property, as
those terms are defined in section 273.13 listed on records of
the county auditor or county treasurer over which runs a high
voltage transmission line as defined in section 116C.52,
subdivision 3 with a capacity of 200 kilovolts or more, except a
high voltage transmission line the construction of which was
commenced prior to July 1, 1974, shall receive a property tax
credit in an amount determined by multiplying a fraction, the
numerator of which is the length of high voltage transmission
line which runs over that parcel and the denominator of which is
the total length of that particular line running over all
property within the city or township by ten percent of the
transmission line tax revenue derived from the tax on that
portion of the line within the city or township pursuant to
section 273.36. In the case of property owners in unorganized
townships, the property tax credit shall be determined by
multiplying a fraction, the numerator of which is the length of
the qualifying high voltage transmission line which runs over
the parcel and the denominator of which is the total length of
the qualifying high voltage transmission line running over all
property within all the unorganized townships within the county,
by the total utility property tax credit fund amount available
within the county for that year pursuant to subdivision 1.
Where a right-of-way width is shared by more than one property
owner, the numerator shall be adjusted by multiplying the length
of line on the parcel by the proportion of the total width on
the parcel owned by that property owner. The amount of credit
for which the property qualifies shall not exceed 20 percent of
the total gross tax on the parcel prior to deduction of the
state paid agricultural credit and the state paid homestead
credit, provided that, if the property containing the
right-of-way is included in a parcel which exceeds 40 acres, the
total gross tax on the parcel shall be multiplied by a fraction,
the numerator of which is the sum of the number of acres in each
quarter-quarter section or portion thereof which contains a
right-of-way and the denominator of which is the total number of
acres in the parcel set forth on the tax statement, and the
maximum credit shall be 20 percent of the product of that
computation, prior to deduction of those credits. The auditor
of the county in which the affected parcel is located shall
calculate the amount of the credit due for each parcel and
transmit that information to the county treasurer. The county
auditor, in computing the credit received pursuant to section
273.135, shall reduce the gross tax by the amount of the credit
received pursuant to this section, unless the amount of the
credit would be less than $10.
If, after the county auditor has computed the credit to
those qualifying property owners in unorganized townships, there
is money remaining in the utility property tax credit fund, then
that excess amount in the fund shall be returned to the general
school fund of the county.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 22. Minnesota Statutes 2002, section 274.01,
subdivision 1, is amended to read:
Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES,
GRIEVANCES.] (a) The town board of a town, or the council or
other governing body of a city, is the board of appeal and
equalization except (1) in cities whose charters provide for a
board of equalization or (2) in any city or town that has
transferred its local board of review power and duties to the
county board as provided in subdivision 3. The county assessor
shall fix a day and time when the board or the board of
equalization shall meet in the assessment districts of the
county. Notwithstanding any law or city charter to the
contrary, a city board of equalization shall be referred to as a
board of appeal and equalization. On or before February 15 of
each year the assessor shall give written notice of the time to
the city or town clerk. Notwithstanding the provisions of any
charter to the contrary, the meetings must be held between April
1 and May 31 each year. The clerk shall give published and
posted notice of the meeting at least ten days before the date
of the meeting.
The board shall meet at the office of the clerk to review
the assessment and classification of property in the town or
city. No changes in valuation or classification which are
intended to correct errors in judgment by the county assessor
may be made by the county assessor after the board has adjourned
in those cities or towns that hold a local board of review;
however, corrections of errors that are merely clerical in
nature or changes that extend homestead treatment to property
are permitted after adjournment until the tax extension date for
that assessment year. The changes must be fully documented and
maintained in the assessor's office and must be available for
review by any person. A copy of the changes made during this
period in those cities or towns that hold a local board of
review must be sent to the county board no later than December
31 of the assessment year.
(b) The board shall determine whether the taxable property
in the town or city has been properly placed on the list and
properly valued by the assessor. If real or personal property
has been omitted, the board shall place it on the list with its
market value, and correct the assessment so that each tract or
lot of real property, and each article, parcel, or class of
personal property, is entered on the assessment list at its
market value. No assessment of the property of any person may
be raised unless the person has been duly notified of the intent
of the board to do so. On application of any person feeling
aggrieved, the board shall review the assessment or
classification, or both, and correct it as appears just. The
board may not make an individual market value adjustment or
classification change that would benefit the property in cases
where the owner or other person having control over the property
will not permit the assessor to inspect the property and the
interior of any buildings or structures.
(c) A local board may reduce assessments upon petition of
the taxpayer but the total reductions must not reduce the
aggregate assessment made by the county assessor by more than
one percent. If the total reductions would lower the aggregate
assessments made by the county assessor by more than one
percent, none of the adjustments may be made. The assessor
shall correct any clerical errors or double assessments
discovered by the board without regard to the one percent
limitation.
(d) A local board does not have authority to grant an
exemption or to order property removed from the tax rolls.
(e) A majority of the members may act at the meeting, and
adjourn from day to day until they finish hearing the cases
presented. The assessor shall attend, with the assessment books
and papers, and take part in the proceedings, but must not
vote. The county assessor, or an assistant delegated by the
county assessor shall attend the meetings. The board shall list
separately, on a form appended to the assessment book, all
omitted property added to the list by the board and all items of
property increased or decreased, with the market value of each
item of property, added or changed by the board, placed opposite
the item. The county assessor shall enter all changes made by
the board in the assessment book.
(e) (f) Except as provided in subdivision 3, if a person
fails to appear in person, by counsel, or by written
communication before the board after being duly notified of the
board's intent to raise the assessment of the property, or if a
person feeling aggrieved by an assessment or classification
fails to apply for a review of the assessment or classification,
the person may not appear before the county board of appeal and
equalization for a review of the assessment or classification.
This paragraph does not apply if an assessment was made after
the local board meeting, as provided in section 273.01, or if
the person can establish not having received notice of market
value at least five days before the local board meeting.
(f) (g) The local board must complete its work and adjourn
within 20 days from the time of convening stated in the notice
of the clerk, unless a longer period is approved by the
commissioner of revenue. No action taken after that date is
valid. All complaints about an assessment or classification
made after the meeting of the board must be heard and determined
by the county board of equalization. A nonresident may, at any
time, before the meeting of the board file written objections to
an assessment or classification with the county assessor. The
objections must be presented to the board at its meeting by the
county assessor for its consideration.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 23. Minnesota Statutes 2002, section 274.13,
subdivision 1, is amended to read:
Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING
ASSESSMENTS.] The county commissioners, or a majority of them,
with the county auditor, or, if the auditor cannot be present,
the deputy county auditor, or, if there is no deputy, the court
administrator of the district court, shall form a board for the
equalization of the assessment of the property of the county,
including the property of all cities whose charters provide for
a board of equalization. This board shall be referred to as the
county board of appeal and equalization. The board shall meet
annually, on the date specified in section 274.14, at the office
of the auditor. Each member shall take an oath to fairly and
impartially perform duties as a member. The board shall examine
and compare the returns of the assessment of property of the
towns or districts, and equalize them so that each tract or lot
of real property and each article or class of personal property
is entered on the assessment list at its market value, subject
to the following rules:
(1) The board shall raise the valuation of each tract or
lot of real property which in its opinion is returned below its
market value to the sum believed to be its market value. The
board must first give notice of intention to raise the valuation
to the person in whose name it is assessed, if the person is a
resident of the county. The notice must fix a time and place
for a hearing.
(2) The board shall reduce the valuation of each tract or
lot which in its opinion is returned above its market value to
the sum believed to be its market value.
(3) The board shall raise the valuation of each class of
personal property which in its opinion is returned below its
market value to the sum believed to be its market value. It
shall raise the aggregate value of the personal property of
individuals, firms, or corporations, when it believes that the
aggregate valuation, as returned, is less than the market value
of the taxable personal property possessed by the individuals,
firms, or corporations, to the sum it believes to be the market
value. The board must first give notice to the persons of
intention to do so. The notice must set a time and place for a
hearing.
(4) The board shall reduce the valuation of each class of
personal property that is returned above its market value to the
sum it believes to be its market value. Upon complaint of a
party aggrieved, the board shall reduce the aggregate valuation
of the individual's personal property, or of any class of
personal property for which the individual is assessed, which in
its opinion has been assessed at too large a sum, to the sum it
believes was the market value of the individual's personal
property of that class.
(5) The board must not reduce the aggregate value of all
the property of its county, as submitted to the county board of
equalization, with the additions made by the auditor under this
chapter, by more than one percent of its whole valuation. The
board may raise the aggregate valuation of real property, and of
each class of personal property, of the county, or of any town
or district of the county, when it believes it is below the
market value of the property, or class of property, to the
aggregate amount it believes to be its market value.
(6) The board shall change the classification of any
property which in its opinion is not properly classified.
(7) The board does not have the authority to grant an
exemption or to order property removed from the tax rolls.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 24. Minnesota Statutes 2002, section 275.025,
subdivision 1, is amended to read:
Subdivision 1. [LEVY AMOUNT.] The state general levy is
levied against commercial-industrial property and
seasonal residential recreational property, as defined in this
section. The state general levy base amount is $592,000,000 for
taxes payable in 2002. For taxes payable in subsequent years,
the levy base amount is increased each year by multiplying the
levy base amount for the prior year by the sum of one plus the
rate of increase, if any, in the implicit price deflator for
government consumption expenditures and gross investment for
state and local governments prepared by the Bureau of Economic
Analysts of the United States Department of Commerce for the
12-month period ending March 31 of the year prior to the year
the taxes are payable. The tax under this section is not
treated as a local tax rate under section 469.177 and is not the
levy of a governmental unit under chapters 276A and 473F.
Beginning in fiscal year 2004, and in each year thereafter, the
commissioner of finance shall deposit in an education reserve
account, which account is hereby established, the increased
amount of the state general levy received for deposit in the
general fund for that year over the amount of the state general
levy received for deposit in the general fund in fiscal year
2003. The amounts in the education reserve account do not lapse
or cancel each year, but remain until appropriated by law for
education aid or higher education funding.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter, except that the change from
"seasonal recreational property" to "seasonal residential
recreational property" is effective the day following final
enactment.
Sec. 25. Minnesota Statutes 2002, section 275.025,
subdivision 3, is amended to read:
Subd. 3. [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.]
For the purposes of this section, "seasonal residential
recreational tax capacity" means the tax capacity of all class
4c(1) property under section 273.13, subdivision 25, except that
the first $76,000 of market value of each noncommercial class
4c(1) property has a tax capacity for this purpose equal to 40
percent of its tax capacity under section 273.13.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 26. Minnesota Statutes 2002, section 275.025,
subdivision 4, is amended to read:
Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.]
The state general tax must be distributed among the counties by
applying a uniform rate to each county's commercial-industrial
tax capacity and its seasonal residential recreational tax
capacity. Within each county, the tax must be levied by
applying a uniform rate against commercial-industrial tax
capacity and seasonal residential recreational tax capacity. By
November On or before October 1 each year, the commissioner of
revenue shall certify the a preliminary state general levy rate
to each county auditor that must be used to prepare the notices
of proposed property taxes for taxes payable in the following
year. By January 1 of each year, the commissioner shall certify
the final state general levy rate to each county auditor that
shall be used in spreading taxes.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter, except that the change from
"seasonal recreational tax capacity" to "seasonal residential
recreational tax capacity" is effective the day following final
enactment.
Sec. 27. Minnesota Statutes 2002, section 276.10, is
amended to read:
276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.]
On the settlement day determined in section 276.09 for each
year, the county auditor and county treasurer shall distribute
all undistributed funds in the treasury. The funds must be
apportioned as provided by law, and credited to the state, town,
city, school district, special district and each county fund.
Within 20 days after the distribution is completed, the county
auditor shall report to the state auditor in the form prescribed
by the state auditor. The county auditor shall issue a warrant
for the payment of money in the county treasury to the credit of
the state, town, city, school district, or special districts on
application of the persons entitled to receive the payment. The
county auditor may apply the local tax rate from the year before
the year of distribution when apportioning and distributing
delinquent tax proceeds, if the composition of the previous
year's local tax rate between taxing districts is not
significantly different from the local tax rate that existed for
the year of the delinquency.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 28. Minnesota Statutes 2002, section 276.11,
subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] As soon as practical after the
settlement day determined in section 276.09, the county
treasurer shall pay to the state treasurer or the treasurer of a
town, city, school district, or special district, on the warrant
of the county auditor, all receipts of taxes levied by the
taxing district and deliver up all orders and other evidences of
indebtedness of the taxing district, taking triplicate receipts
for them. The treasurer shall file one of the receipts with the
county auditor, and shall return one by mail on the day of its
receipt to the clerk of the town, city, school district, or
special district to which payment was made. The clerk shall
keep the receipt in the clerk's office. Upon written request of
the taxing district, to the extent practicable, the county
treasurer shall make partial payments of amounts collected
periodically in advance of the next settlement and
distribution. A statement prepared by the county treasurer must
accompany each payment. It must state the years for which taxes
included in the payment were collected and, for each year, the
amount of the taxes and any penalties on the tax. Upon written
request of a taxing district, except school districts, the
county treasurer shall pay at least 70 percent of the estimated
collection within 30 days after the settlement date determined
in section 276.09. Within seven business days after the due
date, or 28 calendar days after the postmark date on the
envelopes containing real or personal property tax statements,
whichever is latest, the county treasurer shall pay to the
treasurer of the school districts 50 percent of the estimated
collections arising from taxes levied by and belonging to the
school district, unless the school district elects to receive 50
percent of the estimated collections arising from taxes levied
by and belonging to the school district after making a
proportionate reduction to reflect any loss in collections as
the result of any delay in mailing tax statements. In that
case, 50 percent of those adjusted, estimated collections shall
be paid by the county treasurer to the treasurer of the school
district within seven business days of the due date. The
remaining 50 percent of the estimated collections must be paid
to the treasurer of the school district within the next seven
business days of the later of the dates in the preceding
sentence, unless the school district elects to receive the
remainder of its estimated collections after a proportionate
reduction has been made to reflect any loss in collections as
the result of any delay in mailing tax statements. In that
case, the remaining 50 percent of those adjusted, estimated
collections shall be paid by the county treasurer to the
treasurer of the school district within 14 days of the due
date. The treasurer shall pay the balance of the amounts
collected to the state before June 30, or to a municipal
corporation or other body within 60 days after the settlement
date determined in section 276.09. After 45 days interest at an
annual rate of eight percent accrues and must be paid to the
taxing district. Interest must be paid upon appropriation from
the general revenue fund of the county. If not paid, it may be
recovered by the taxing district, in a civil action.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 29. [276.112] [STATE PROPERTY TAXES; COUNTY
TREASURER.]
On or before January 25 each year, for the period ending
December 31 of the prior year, and on or before June 29 each
year, for the period ending on the most recent settlement day
determined in section 276.09, and on or before December 2 each
year, for the period ending November 20, the county treasurer
must make full settlement with the county auditor according to
sections 276.09, 276.10, and 276.111 for all receipts of state
property taxes levied under section 275.025, and must transmit
those receipts to the commissioner of revenue by electronic
means.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 30. Minnesota Statutes 2002, section 277.20,
subdivision 2, is amended to read:
Subd. 2. [FILING OF LIEN FOR ENFORCEABILITY.] 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 until a notice of lien has been filed by the county
treasurer in the office of the county recorder of the county in
which the property is situated, or, in the case of personal
property belonging to an individual who is not a resident of
this state, or that is a corporation, partnership, or other
organization, in the office of the secretary of state. Priority
of a lien created under Laws 1991, chapter 291, article 15,
shall be determined in accordance with the provisions of section
507.34. Liens filed in the office of the county recorder shall
be filed with the state tax liens filed pursuant to section
270.69, and the index shall indicate the name of the county for
which the lien was filed. If the land is registered, the notice
of lien shall be filed in the office of the registrar of titles
of the county in which the property is registered.
Notwithstanding any other law to the contrary, the county
treasurer is exempt from the payment of fees when the lien is
offered for filing or recording; the fee for filing or recording
the lien must be paid at the time the release of lien is offered
for filing or recording. Notwithstanding any law to the
contrary, the fee for filing or recording the lien or the
release of lien is $15.
[EFFECTIVE DATE.] This section is effective for liens filed
on or after the day following final enactment.
Sec. 31. Minnesota Statutes 2002, section 279.06,
subdivision 1, is amended to read:
Subdivision 1. [LIST AND NOTICE.] Within five days after
the filing of such list, the court administrator shall return a
copy thereof to the county auditor, with a notice prepared and
signed by the court administrator, and attached thereto, which
may be substantially in the following form:
State of Minnesota )
) ss.
County of ............... )
District Court
.......... Judicial District.
The state of Minnesota, to all persons, companies, or
corporations who have or claim any estate, right, title, or
interest in, claim to, or lien upon, any of the several parcels
of land described in the list hereto attached:
The list of taxes and penalties on real property for the
county of ............................... remaining delinquent
on the first Monday in January, ......., has been filed in the
office of the court administrator of the district court of said
county, of which that hereto attached is a copy. Therefore,
you, and each of you, are hereby required to file in the office
of said court administrator, on or before the 20th day after the
publication of this notice and list, your answer, in writing,
setting forth any objection or defense you may have to the
taxes, or any part thereof, upon any parcel of land described in
the list, in, to, or on which you have or claim any estate,
right, title, interest, claim, or lien, and, in default thereof,
judgment will be entered against such parcel of land for the
taxes on such list appearing against it, and for all penalties,
interest, and costs. Based upon said judgment, the land shall
be sold to the state of Minnesota on the second Monday in May,
....... The period of redemption for all lands sold to the
state at a tax judgment sale shall be three years from the date
of sale to the state of Minnesota if the land is within an
incorporated area unless it is:
(a) nonagricultural homesteaded land as defined in section
273.13, subdivision 22;
(b) homesteaded agricultural land as defined in section
273.13, subdivision 23, paragraph (a);
(c) seasonal residential recreational land as defined in
section 273.13, subdivisions 22, paragraph (c), and 25,
paragraph (c) (d), clause (5) (1), in which event the period of
redemption is five years from the date of sale to the state of
Minnesota;
(d) abandoned property and pursuant to section 281.173 a
court order has been entered shortening the redemption period to
five weeks; or
(e) vacant property as described under section 281.174,
subdivision 2, and for which a court order is entered shortening
the redemption period under section 281.174.
The period of redemption for all other lands sold to the
state at a tax judgment sale shall be five years from the date
of sale.
Inquiries as to the proceedings set forth above can be made
to the county auditor of ..... county whose address is ..... .
(Signed) .............................................,
Court Administrator of the District Court of the County
of ....................................................
(Here insert list.)
The list referred to in the notice shall be substantially
in the following form:
List of real property for the county of
......................., on which taxes remain delinquent on the
first Monday in January, .......:
Town of (Fairfield),
Township (40), Range (20),
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who Have Filed
Their Addresses Tax
Pursuant to Subdivision of Parcel Total Tax
section 276.041 Section Section Number and Penalty
$ cts.
John Jones S.E. 1/4 of S.W. 1/4 10 23101 2.20
(825 Fremont
Fairfield, MN
55000)
Bruce Smith That part of N.E. 1/4
(2059 Hand of S.W. 1/4 desc. as
Fairfield, follows: Beg. at the
MN 55000) S.E. corner of said
and N.E. 1/4 of S.W. 1/4;
Fairfield thence N. along the E.
State Bank line of said N.E. 1/4
(100 Main of S.W. 1/4 a distance
Street of 600 ft.; thence W.
Fairfield, parallel with the S.
MN 55000) line of said N.E. 1/4
of S.W. 1/4 a distance
of 600 ft.; thence S.
parallel with said E.
line a distance of 600
ft. to S. line of said
N.E. 1/4 of S.W. 1/4;
thence E. along said S.
line a distance of 600
ft. to the point of
beg. ............... 21 33211 3.15
As to platted property, the form of heading shall conform
to circumstances and be substantially in the following form:
City of (Smithtown)
Brown's Addition, or Subdivision
Names (and
Current Filed
Addresses) for
the Taxpayers
and Fee Owners
and in Addition
Those Parties
Who have Filed
Their Addresses Tax
Pursuant to Parcel Total Tax
section 276.041 Lot Block Number and Penalty
$ cts.
John Jones 15 9 58243 2.20
(825 Fremont
Fairfield,
MN 55000)
Bruce Smith 16 9 58244 3.15
(2059 Hand
Fairfield,
MN 55000)
and
Fairfield
State Bank
(100 Main Street
Fairfield,
MN 55000)
The names, descriptions, and figures employed in
parentheses in the above forms are merely for purposes of
illustration.
The name of the town, township, range or city, and addition
or subdivision, as the case may be, shall be repeated at the
head of each column of the printed lists as brought forward from
the preceding column.
Errors in the list shall not be deemed to be a material
defect to affect the validity of the judgment and sale.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 32. Minnesota Statutes 2002, section 281.17, is
amended to read:
281.17 [PERIOD FOR REDEMPTION.]
Except for properties for which the period of redemption
has been limited under sections 281.173 and 281.174, the
following periods for redemption apply.
The period of redemption for all lands sold to the state at
a tax judgment sale shall be three years from the date of sale
to the state of Minnesota if the land is within an incorporated
area unless it is: (a) nonagricultural homesteaded land as
defined in section 273.13, subdivision 22; (b) homesteaded
agricultural land as defined in section 273.13, subdivision 23,
paragraph (a); or (c) seasonal residential recreational land as
defined in section 273.13, subdivision 22, paragraph (c), or 25,
paragraph (d), clause (1), for which the period of redemption is
five years from the date of sale to the state of Minnesota.
The period of redemption for homesteaded lands as defined
in section 273.13, subdivision 22, located in a targeted
neighborhood as defined in Laws 1987, chapter 386, article 6,
section 4, and sold to the state at a tax judgment sale is three
years from the date of sale. The period of redemption for all
lands located in a targeted neighborhood as defined in Laws
1987, chapter 386, article 6, section 4, except (1) homesteaded
lands as defined in section 273.13, subdivision 22, and (2) for
periods of redemption beginning after June 30, 1991, but before
July 1, 1996, lands located in the Loring Park targeted
neighborhood on which a notice of lis pendens has been served,
and sold to the state at a tax judgment sale is one year from
the date of sale.
The period of redemption for all real property constituting
a mixed municipal solid waste disposal facility that is a
qualified facility under section 115B.39, subdivision 1, is one
year from the date of the sale to the state of Minnesota.
The period of redemption for all other lands sold to the
state at a tax judgment sale shall be five years from the date
of sale, except that the period of redemption for nonhomesteaded
agricultural land as defined in section 273.13, subdivision 23,
paragraph (b), shall be two years from the date of sale if at
that time that property is owned by a person who owns one or
more parcels of property on which taxes are delinquent, and the
delinquent taxes are more than 25 percent of the prior year's
school district levy.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 33. Minnesota Statutes 2002, section 282.01,
subdivision 7a, is amended to read:
Subd. 7a. [CITY SALES; ALTERNATE PROCEDURES.] Land located
in a home rule charter or statutory city, or in a town which
cannot be improved because of noncompliance with local
ordinances regarding minimum area, shape, frontage or access may
be sold by the county auditor pursuant to this subdivision if
the auditor determines that a nonpublic sale will encourage the
approval of sale of the land by the city or town and promote its
return to the tax rolls. If the physical characteristics of the
land indicate that its highest and best use will be achieved by
combining it with an adjoining parcel and the city or town has
not adopted a local ordinance governing minimum area, shape,
frontage, or access, the land may also be sold pursuant to this
subdivision. If the property consists of an undivided interest
in land or land and improvements, the property may also be sold
to the other owners under this subdivision. The sale of land
pursuant to this subdivision shall be subject to any conditions
imposed by the county board pursuant to section 282.03. The
governing body of the city or town may recommend to the county
board conditions to be imposed on the sale. The county auditor
may restrict the sale to owners of lands adjoining the land to
be sold. The county auditor shall conduct the sale by sealed
bid or may select another means of sale. The land shall be sold
to the highest bidder but in no event shall the land be sold for
less than its appraised value. All owners of land adjoining the
land to be sold shall be given a written notice at least 30 days
prior to the sale.
This subdivision shall be liberally construed to encourage
the sale and utilization of tax-forfeited land, to eliminate
nuisances and dangerous conditions and to increase compliance
with land use ordinances.
[EFFECTIVE DATE.] This section is effective for sales
occurring on or after the day following final enactment.
Sec. 34. Minnesota Statutes 2002, section 282.08, is
amended to read:
282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.]
The net proceeds from the sale or rental of any parcel of
forfeited land, or from the sale of products from the forfeited
land, must be apportioned by the county auditor to the taxing
districts interested in the land, as follows:
(1) the amounts necessary to pay the state general tax levy
against the parcel for taxes payable in the year for which the
tax judgment was entered, and for each subsequent payable year
up to and including the year of forfeiture, must be apportioned
to the state;
(2) the portion required to pay any amounts included in the
appraised value under section 282.01, subdivision 3, as
representing increased value due to any public improvement made
after forfeiture of the parcel to the state, but not exceeding
the amount certified by the clerk of the municipality must be
apportioned to the municipal subdivision entitled to it;
(2) (3) the portion required to pay any amount included in
the appraised value under section 282.019, subdivision 5,
representing increased value due to response actions taken after
forfeiture of the parcel to the state, but not exceeding the
amount of expenses certified by the pollution control agency or
the commissioner of agriculture, must be apportioned to the
agency or the commissioner of agriculture and deposited in the
fund from which the expenses were paid;
(3) (4) the portion of the remainder required to discharge
any special assessment chargeable against the parcel for
drainage or other purpose whether due or deferred at the time of
forfeiture, must be apportioned to the municipal subdivision
entitled to it; and
(4) (5) any balance must be apportioned as follows:
(i) The county board may annually by resolution set aside
no more than 30 percent of the receipts remaining to be used for
timber development on tax-forfeited land and dedicated memorial
forests, to be expended under the supervision of the county
board. It must be expended only on projects approved by the
commissioner of natural resources.
(ii) The county board may annually by resolution set aside
no more than 20 percent of the receipts remaining to be used for
the acquisition and maintenance of county parks or recreational
areas as defined in sections 398.31 to 398.36, to be expended
under the supervision of the county board.
(iii) Any balance remaining must be apportioned as
follows: county, 40 percent; town or city, 20 percent; and
school district, 40 percent, provided, however, that in
unorganized territory that portion which would have accrued to
the township must be administered by the county board of
commissioners.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 35. Minnesota Statutes 2002, section 290C.02,
subdivision 3, is amended to read:
Subd. 3. [CLAIMANT.] "Claimant" means a person, as that
term is defined in section 290.01, subdivision 2, who owns
forest land in Minnesota and files an application authorized by
the Sustainable Forest Incentive Act. For purposes of section
290C.11, claimant also includes any person bound by the covenant
required in section 290C.04. No more than one claimant is
entitled to a payment under this chapter with respect to any
tract, parcel, or piece of land enrolled under this chapter that
has been assigned the same parcel identification number. When
enrolled forest land is owned by two or more persons, the owners
must determine between them which person may claim the payments
provided under sections 290C.01 to 290C.11.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 36. Minnesota Statutes 2002, section 290C.02,
subdivision 7, is amended to read:
Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management
plan" means a written document providing a framework for
site-specific healthy, productive, and sustainable forest
resources. A forest management plan must include at least the
following: (i) owner-specific forest management goals for the
property land; (ii) a reliable field inventory of the individual
forest cover types, their age, and density; (iii) a description
of the soil type and quality; (iv) an aerial photo and/or map of
the vegetation and other natural features of the property land
clearly indicating the boundaries of the property land and of
the forest land; (v) the proposed future conditions of the
property land; (vi) prescriptions to meet proposed future
conditions of the property land; (vii) a recommended timetable
for implementing the prescribed activities; and (viii) a legal
description of the parcels land encompassing the parcels
included in the plan. All management activities prescribed in a
plan must be in accordance with the recommended timber
harvesting and forest management guidelines. The commissioner
of natural resources shall provide a framework for plan content
and updating and revising plans.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 37. Minnesota Statutes 2002, section 290C.03, is
amended to read:
290C.03 [ELIGIBILITY REQUIREMENTS.]
(a) Property Land may be enrolled in the sustainable forest
incentive program under this chapter if all of the following
conditions are met:
(1) property the land consists of at least 20 contiguous
acres and at least 50 percent of the land must meet the
definition of forest land in section 88.01, subdivision 7,
during the enrollment;
(2) a forest management plan for the property land must be
prepared by an approved plan writer and implemented during the
period in which the land is enrolled;
(3) timber harvesting and forest management guidelines must
be used in conjunction with any timber harvesting or forest
management activities conducted on the land during the period in
which the land is enrolled;
(4) the property land must be enrolled for a minimum of
eight years;
(5) there are no delinquent property taxes on the property
land; and
(6) claimants enrolling more than 1,920 acres in the
sustainable forest incentive program must allow year-round,
nonmotorized access to fish and wildlife resources on enrolled
land except within one-fourth mile of a permanent dwelling or
during periods of high fire hazard as determined by the
commissioner of natural resources.
(b) Claimants required to allow access under paragraph (a),
clause (6), do not by that action:
(1) extend any assurance that the land is safe for any
purpose;
(2) confer upon the person the legal status of an invitee
or licensee to whom a duty of care is owed; or
(3) assume responsibility for or incur liability for any
injury to the person or property caused by an act or omission of
the person.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 38. Minnesota Statutes 2002, section 290C.07, is
amended to read:
290C.07 [CALCULATION OF INCENTIVE PAYMENT.]
An approved claimant under the sustainable forest incentive
program is eligible to receive an annual payment. The payment
shall equal the greater of:
(1) the difference between the property tax that would be
paid on the property land using the previous year's statewide
average total township tax rate and the class rate for class 2b
timberland under section 273.13, subdivision 23, paragraph (b),
if the property land were valued at (i) the average statewide
timberland market value per acre calculated under section
290C.06, and (ii) the average statewide timberland current use
value per acre calculated under section 290C.02, subdivision 5;
(2) two-thirds of the property tax amount determined by
using the previous year's statewide average total township tax
rate, the estimated market value per acre as calculated in
section 290C.06, and the class rate for 2b timberland under
section 273.13, subdivision 23, paragraph (b); or
(3) $1.50 per acre for each acre enrolled in the
sustainable forest incentive program.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 39. Minnesota Statutes 2002, section 290C.09, is
amended to read:
290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.]
The commissioner shall immediately remove any property land
enrolled in the sustainable forest incentive program for which
taxes are determined to be delinquent as provided in chapter 279
and shall notify the claimant of such action. Lands terminated
from the sustainable forest incentive program under this section
are not entitled to any payments provided in this chapter and
are subject to removal penalties prescribed in section 290C.11.
The claimant has 60 days from the receipt of notice from the
commissioner under this section to pay the delinquent taxes. If
the delinquent taxes are paid within this 60-day period, the
lands shall be reinstated in the program as if they had not been
withdrawn and without the payment of a penalty.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 40. Minnesota Statutes 2002, section 290C.10, is
amended to read:
290C.10 [WITHDRAWAL PROCEDURES.]
An approved claimant under the sustainable forest incentive
program for a minimum of four years may notify the commissioner
of the intent to terminate enrollment. Within 90 days of
receipt of notice to terminate enrollment, the commissioner
shall inform the claimant in writing, acknowledging receipt of
this notice and indicating the effective date of termination
from the sustainable forest incentive program. Termination of
enrollment in the sustainable forest incentive program occurs on
January 1 of the fifth calendar year that begins after receipt
by the commissioner of the termination notice. After the
commissioner issues an effective date of termination, a claimant
wishing to continue the property's land's enrollment in the
sustainable forest incentive program beyond the termination date
must apply for enrollment as prescribed in section 290C.04. A
claimant who withdraws a parcel of land from this program may
not reenroll the parcel for a period of three years. Within 90
days after the termination date, the commissioner shall execute
and acknowledge a document releasing the land from the covenant
required under this chapter. The document must be mailed to the
claimant and is entitled to be recorded. The commissioner may
allow early withdrawal from the Sustainable Forest Incentive Act
without penalty in cases of condemnation for a public purpose
notwithstanding the provisions of this section.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 41. Minnesota Statutes 2002, section 290C.11, is
amended to read:
290C.11 [PENALTIES FOR REMOVAL.]
(a) If the commissioner determines that property land
enrolled in the sustainable forest incentive program is in
violation of the conditions for enrollment as specified in
section 290C.03, the commissioner shall notify the claimant of
the intent to remove all enrolled land from the sustainable
forest incentive program. The claimant has 60 days to appeal
this determination. The appeal must be made in writing to the
commissioner, who shall, within 60 days, notify the claimant as
to the outcome of the appeal. Within 60 days after the
commissioner denies an appeal, or within 120 days after the
commissioner received a written appeal if the commissioner has
not made a determination in that time, the owner may appeal to
tax court under chapter 271 as if the appeal is from an order of
the commissioner.
(b) If the commissioner determines the property land is to
be removed from the sustainable forest incentive program, the
claimant is liable for payment to the commissioner in the amount
equal to the payments received under this chapter for the
previous four-year period, plus interest. The claimant has 90
days to satisfy the payment for removal of land from the
sustainable forest incentive program under this section. If the
penalty is not paid within the 90-day period under this
paragraph, the commissioner shall certify the amount to the
county auditor for collection as a part of the general ad
valorem real property taxes on the land in the following taxes
payable year.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 42. [290C.12] [DEATH OF CLAIMANT.]
Within one year after the death of the claimant, the
claimant's heir, devisee, or estate must either:
(1) notify the commissioner of election to terminate
enrollment in the sustainable forest incentive program; or
(2) make an application under this chapter to continue
enrollment of the land in the program.
Upon notification under clause (1), the commissioner shall
terminate the enrollment and issue a document releasing the land
from the covenant as provided in section 290C.04, paragraph
(c). Penalties under section 290C.11 shall not apply. If the
application under clause (2) is approved, the land is enrolled
in the program without a break. If the commissioner does not
receive notification within one year after the date of death,
enrollment in the program shall be terminated and penalties
under section 290C.11 shall not apply.
[EFFECTIVE DATE.] This section is effective the day
following final enactment, except in the case of claimants dying
prior to the day following final enactment, heirs, devisees, or
estates may make the election either six months after the
effective date of this provision or one year after the death of
the claimant, whichever is later.
Sec. 43. Minnesota Statutes 2002, section 469.1792,
subdivision 3, is amended to read:
Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a
district qualifying under this section may take either or both
of the following actions for any or all of its preexisting
districts:
(1) the authority may elect that the original local tax
rate under section 469.177, subdivision 1a, does not apply to
the district; and
(2) the authority may elect the fiscal disparities
contribution will be computed under section 469.177, subdivision
3, paragraph (a), regardless of the election that was made for
the district.
(b) The authority may take action under this subdivision
only after the municipality approves the action, by resolution,
after notice and public hearing in the manner provided under
section 469.175, subdivision 2. To be effective for taxes
payable in the following year, the resolution must be adopted
and the county auditor must be notified of the adoption on or
before July 1.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 44. Minnesota Statutes 2002, section 473F.07,
subdivision 4, is amended to read:
Subd. 4. [DISTRIBUTION NET TAX CAPACITY.] The
administrative auditor shall determine the proportion which the
index of each municipality bears to the sum of the indices of
all municipalities and shall then multiply this proportion in
the case of each municipality, by the areawide net tax capacity,
provided that if the distribution net tax capacity for a
municipality is less than 95 percent of the municipality's
previous year distribution net tax capacity, and more than ten
percent of the municipality's fiscal capacity consists of
manufactured home property, the municipality's distribution net
tax capacity will be increased to 95 percent of the previous
year net tax capacity and the distribution net tax capacity of
other municipalities in the area will be proportionately reduced.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and subsequent years.
Sec. 45. Minnesota Statutes 2002, section 515B.1-116, is
amended to read:
515B.1-116 [RECORDING.]
(a) A declaration, bylaws, any amendment to a declaration
or bylaws, and any other instrument affecting a common interest
community shall be entitled to be recorded. In those counties
which have a tract index, the county recorder shall enter the
declaration in the tract index for each unit affected. The
registrar of titles shall file the declaration in accordance
with section 508.351 or 508A.351.
(b) The recording officer shall upon request promptly
assign a number (CIC number) to a common interest community to
be formed or to a common interest community resulting from the
merger of two or more common interest communities.
(c) Documents recorded pursuant to this chapter shall in
the case of registered land be filed, and references to the
recording of documents shall mean filed in the case of
registered land.
(d) Subject to any specific requirements of this chapter,
if a recorded document relating to a common interest community
purports to require a certain vote or signatures approving any
restatement or amendment of the document by a certain number or
percentage of unit owners or secured parties, and if the
amendment or restatement is to be recorded pursuant to this
chapter, an affidavit of the president or secretary of the
association stating that the required vote or signatures have
been obtained shall be attached to the document to be recorded
and shall constitute prima facie evidence of the representations
contained therein.
(e) If a common interest community is located on registered
land, the recording fee for any document affecting two or more
units shall be the then-current fee for registering the document
on the certificates of title for the first ten affected
certificates and one-third of the then-current fee for each
additional affected certificate. This provision shall not apply
to recording fees for deeds of conveyance, with the exception of
deeds given pursuant to sections 515B.2-119 and 515B.3-112.
(f) Except as permitted under this subsection, a recording
officer shall not file or record a declaration creating a new
common interest community, unless the county treasurer has
certified that the property taxes payable in the current year
for the real estate included in the proposed common interest
community have been paid. This certification is in addition to
the certification for delinquent taxes required by section
272.12. In the case of preexisting common interest communities,
the recording officer shall accept, file, and record the
following instruments, without requiring a certification as to
the current or delinquent taxes on any of the units in the
common interest community: (i) a declaration subjecting the
common interest community to this chapter; (ii) a declaration
changing the form of a common interest community pursuant to
section 515B.2-123; or (iii) an amendment to or restatement of
the declaration, bylaws, or CIC plat. In order for the
instruments an instrument to be accepted and recorded under the
preceding sentence, the assessor must certify or otherwise
inform the recording officer that, for taxes payable in the
current year, the assessor has allocated taxable values to each
unit or has separately assessed each unit instrument must not
create or change unit or common area boundaries.
[EFFECTIVE DATE.] This section is effective for deeds or
instruments accepted for recording or registration on or after
July 1, 2003.
Sec. 46. Laws 2001, First Special Session chapter 5,
article 3, section 61, the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective August 1, 2001,
for deeds issued on or after August 1, 2001. This section is
effective August 1, 2006, for deeds issued before August 1, 2001.
Sec. 47. Laws 2001, First Special Session chapter 5,
article 3, section 63, the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective August 1, 2001,
for deeds issued on or after August 1, 2001. This section is
effective August 1, 2006, for deeds issued before August 1, 2001.
Sec. 48. Laws 2002, chapter 377, article 6, section 4, the
effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective for aids
payable in 2004 May 16, 2002, and thereafter.
Sec. 49. [PRE-1940 HOUSING PERCENTAGE.]
For the purposes of determining local government aid
payment amounts for aids payable in 2003, the "pre-1940 housing
percentage" factor shall be based upon the 1990 federal census,
notwithstanding Minnesota Statutes 2002, section 477A.011,
subdivision 30.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2003 only.
Sec. 50. [REPEALER.]
(a) Minnesota Statutes 2002, section 274.04, is repealed.
(b) Minnesota Statutes 2002, section 477A.065, is repealed
effective for aid payable in 2004 and thereafter.
(c) Minnesota Rules, parts 8106.0100, subparts 11, 15, and
16; and 8106.0200, are repealed effective the day following
final enactment.
ARTICLE 6
DEPARTMENT SALES AND USE TAX INITIATIVES
Section 1. Minnesota Statutes 2002, section 289A.50,
subdivision 2a, is amended to read:
Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] (a) If a
vendor has collected from a purchaser a tax on a transaction
that is not subject to the tax imposed by chapter 297A, the
purchaser may apply directly to the commissioner for a refund
under this section if:
(a) (1) the purchaser is currently registered or was
registered during the period of the claim, to collect and remit
the sales tax or to remit the use tax; and
(2) either
(b) (i) the amount of the refund to be applied for exceeds
$500, or
(ii) the amount of the refund to be applied for does not
exceed $500, but the purchaser also applies for a capital
equipment claim at the same time, and the total of the two
refunds exceeds $500.
(b) The purchaser may not file more than two applications
for refund under this subdivision in a calendar year.
[EFFECTIVE DATE.] This section is effective for claims
filed on or after the day following final enactment.
Sec. 2. Minnesota Statutes 2002, section 289A.60,
subdivision 15, is amended to read:
Subd. 15. [ACCELERATED PAYMENT OF JUNE SALES TAX
LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is required by
law to submit an estimation of June sales tax liabilities and 62
75 percent payment by a certain date, the vendor shall pay a
penalty equal to ten percent of the amount of actual June
liability required to be paid in June less the amount remitted
in June. The penalty must not be imposed, however, if the
amount remitted in June equals the lesser of 62 75 percent of
the preceding May's liability or 62 75 percent of the average
monthly liability for the previous calendar year.
[EFFECTIVE DATE.] This section is effective for payments
due after December 31, 2002.
Sec. 3. Minnesota Statutes 2002, section 289A.60, is
amended by adding a subdivision to read:
Subd. 25. [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES
TAX RETURN.] A person who fails to report local sales tax on a
sales tax return or who fails to report local sales tax on
separate tax lines on the sales tax return is subject to a
penalty of five percent of the amount of tax not properly
reported on the return. A person who files a consolidated tax
return but fails to report location information is subject to a
$500 penalty for each return not containing location
information. In addition, the commissioner may revoke the
privilege for a taxpayer to file consolidated returns and may
require the taxpayer to separately register each location and to
file a tax return for each location.
[EFFECTIVE DATE.] This section is effective for returns
filed after June 30, 2003.
Sec. 4. Minnesota Statutes 2002, 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) nonresidential 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 onetime 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;
(5) delivery of aggregate materials and concrete block by a
third party if the delivery would be subject to the sales tax if
provided by the seller of the aggregate material or 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 listed in clause (6), items (i) to (vi) and
(viii) and the provision of these 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 the preceding sentence, "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 telecommunications
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 telecommunications 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 telecommunications 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 the day
following final enactment.
Sec. 5. Minnesota Statutes 2002, section 297A.61,
subdivision 12, is amended to read:
Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new
or used machinery, equipment, implements, accessories, and
contrivances used directly and principally in the agricultural
production for sale, but not including the processing, of
livestock, dairy animals, dairy products, poultry and poultry
products, fruits, vegetables, trees and shrubs, plants, forage,
grains, and bees and apiary products.
(b) Farm machinery includes including, but not limited to:
(1) machinery for the preparation, seeding, or cultivation
of soil for growing agricultural crops and sod, for the
harvesting and threshing of agricultural products, or for the
harvesting or mowing of sod;
(2) barn cleaners, milking systems, grain dryers, feeding
systems including stationary feed bunks, and similar
installations, whether or not the equipment is installed by the
seller and becomes part of the real property; and
(3) irrigation equipment sold for exclusively agricultural
use, including pumps, pipe fittings, valves, sprinklers, and
other equipment necessary to the operation of an irrigation
system when sold as part of an irrigation system, whether or not
the equipment is installed by the seller and becomes part of the
real property;.
(4) logging equipment, including chain saws used for
commercial logging;
(5) fencing used for the containment of farmed cervidae, as
defined in section 17.451, subdivision 2;
(6) primary and backup generator units used to generate
electricity for the purpose of operating farm machinery, as
defined in this subdivision, or providing light or space heating
necessary for the production of livestock, dairy animals, dairy
products, or poultry and poultry products;
(7) aquaculture production equipment as defined in
subdivision 13; and
(8) equipment used for maple syrup harvesting.
(c) (b) Farm machinery does not include:
(1) repair or replacement parts;
(2) tools, shop equipment, grain bins, fencing material
except fencing material covered by paragraph (b), clause (5),
communication equipment, and other farm supplies;
(3) motor vehicles taxed under chapter 297B;
(4) snowmobiles or snow blowers; or
(5) lawn mowers except those used in the production of sod
for sale, or garden-type tractors or garden tillers; or
(6) machinery, equipment, implements, accessories, and
contrivances used directly in the production of horses not
raised for slaughter, fur-bearing animals, or research animals.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2003.
Sec. 6. Minnesota Statutes 2002, section 297A.61,
subdivision 34, is amended to read:
Subd. 34. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold
through vending machines" means food dispensed from a machine or
other mechanical device that accepts payment including honor
payments.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made on or after the day following final enactment.
Sec. 7. Minnesota Statutes 2002, section 297A.61, is
amended by adding a subdivision to read:
Subd. 36. [AGRICULTURAL PRODUCTION.] "Agricultural
production" includes, but is not limited to, horticulture,
silviculture, floriculture, maple syrup harvesting, and the
raising of pets, livestock as defined in section 17A.03,
subdivision 5, poultry, dairy and poultry products, bees and
apiary products, the raising and harvesting of agricultural
crops, sod, fur-bearing animals, research animals, and horses.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2003.
Sec. 8. Minnesota Statutes 2002, section 297A.665, is
amended to read:
297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.]
(a) For the purpose of the proper administration of this
chapter and to prevent evasion of the tax, until the contrary is
established, it is presumed that:
(1) all gross receipts are subject to the tax; and
(2) all retail sales for delivery in Minnesota are for
storage, use, or other consumption in Minnesota.
(b) The burden of proving that a sale is not a taxable
retail sale is on the seller. However, the seller may take from
the purchaser at the time of the sale an a fully completed
exemption certificate claiming that the property purchased is
for resale or that the sale is otherwise exempt from the tax
imposed by this chapter which conclusively relieves the seller
from collecting and remitting the tax. This relief from
liability does not apply to a seller who fraudulently fails to
collect the tax or solicits purchasers to participate in the
unlawful claim of an exemption. If a seller claiming that
certain sales are exempt, who does is not possess in possession
of the required exemption certificates, must acquire the
certificates within 60 days after receiving written notice from
the commissioner that the certificates are required, deductions
claimed by the seller that required delivery of the certificates
must be disallowed. If the certificates are not
obtained delivered to the commissioner within the 60-day period,
the sales are considered taxable sales under this
chapter. commissioner may verify the reason or basis for the
exemption claimed in the certificates before allowing any
deductions. A deduction must not be granted on the basis of
certificates delivered to the commissioner after the 60-day
period.
(c) A purchaser of tangible personal property or any items
listed in section 297A.63 that are shipped or brought to
Minnesota by the purchaser has the burden of proving that the
property was not purchased from a retailer for storage, use, or
consumption in Minnesota.
[EFFECTIVE DATE.] This section is effective for exemption
certificates received for sales occurring after June 30, 2003.
Sec. 9. Minnesota Statutes 2002, section 297A.67,
subdivision 2, is amended to read:
Subd. 2. [FOOD AND FOOD INGREDIENTS.] Food and food
ingredients are exempt. For purposes of this subdivision,
"food" and "food ingredients" mean substances, whether in
liquid, concentrated, solid, frozen, dried, or dehydrated form,
that are sold for ingestion or chewing by humans and are
consumed for their taste or nutritional value. Food and food
ingredients exempt under this subdivision do not include candy,
soft drinks, food sold through vending machines, and prepared
foods. Food and food ingredients do not include alcoholic
beverages, dietary supplements, and tobacco. For purposes of
this subdivision, "alcoholic beverages" means beverages that are
suitable for human consumption and contain one-half of one
percent or more of alcohol by volume. For purposes of this
subdivision, "tobacco" means cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco. For purposes
of this subdivision, "dietary supplements" means any product,
other than tobacco, intended to supplement the diet that:
(1) contains one or more of the following dietary
ingredients:
(i) a vitamin;
(ii) a mineral;
(iii) an herb or other botanical;
(iv) an amino acid;
(v) a dietary substance for use by humans to supplement the
diet by increasing the total dietary intake; and
(vi) a concentrate, metabolite, constituent, extract, or
combination of any ingredient described in items (i) to (v);
(2) is intended for ingestion in tablet, capsule, powder,
softgel, gelcap, or liquid form, or if not intended for
ingestion in such form, is not represented as conventional food
and is not represented for use as a sole item of a meal or of
the diet; and
(3) is required to be labeled as a dietary supplement,
identifiable by the supplement facts box found on the label and
as required pursuant to Code of Federal Regulations, title 21,
section 101.36.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 2002, section 297A.68,
subdivision 5, is amended to read:
Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is
exempt. The tax must be imposed and collected as if the rate
under section 297A.62, subdivision 1, applied, and then refunded
in the manner provided in section 297A.75.
"Capital equipment" means machinery and equipment purchased
or leased, and used in this state by the purchaser or lessee
primarily for manufacturing, fabricating, mining, or refining
tangible personal property to be sold ultimately at retail if
the machinery and equipment are essential to the integrated
production process of manufacturing, fabricating, mining, or
refining. Capital equipment also includes machinery and
equipment used to electronically transmit results retrieved by a
customer of an online computerized data retrieval system.
(b) Capital equipment includes, but is not limited to:
(1) machinery and equipment used to operate, control, or
regulate the production equipment;
(2) machinery and equipment used for research and
development, design, quality control, and testing activities;
(3) environmental control devices that are used to maintain
conditions such as temperature, humidity, light, or air pressure
when those conditions are essential to and are part of the
production process;
(4) materials and supplies used to construct and install
machinery or equipment;
(5) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades
or modifications to machinery or equipment;
(6) materials used for foundations that support machinery
or equipment;
(7) materials used to construct and install special purpose
buildings used in the production process; and
(8) ready-mixed concrete trucks equipment in which the
ready-mixed concrete is mixed as part of the delivery
process regardless if mounted on a chassis and leases of
ready-mixed concrete trucks.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 297B;
(2) machinery or equipment used to receive or store raw
materials;
(3) building materials, except for materials included in
paragraph (b), clauses (6) and (7);
(4) machinery or equipment used for nonproduction purposes,
including, but not limited to, the following: plant security,
fire prevention, first aid, and hospital stations; support
operations or administration; pollution control; and plant
cleaning, disposal of scrap and waste, plant communications,
space heating, cooling, lighting, or safety;
(5) farm machinery and aquaculture production equipment as
defined by section 297A.61, subdivisions 12 and 13;
(6) machinery or equipment purchased and installed by a
contractor as part of an improvement to real property; or
(7) any other item that is not essential to the integrated
process of manufacturing, fabricating, mining, or refining.
(d) For purposes of this subdivision:
(1) "Equipment" means independent devices or tools separate
from machinery but essential to an integrated production
process, including computers and computer software, used in
operating, controlling, or regulating machinery and equipment;
and any subunit or assembly comprising a component of any
machinery or accessory or attachment parts of machinery, such as
tools, dies, jigs, patterns, and molds.
(2) "Fabricating" means to make, build, create, produce, or
assemble components or property to work in a new or different
manner.
(3) "Integrated production process" means a process or
series of operations through which tangible personal property is
manufactured, fabricated, mined, or refined. For purposes of
this clause, (i) manufacturing begins with the removal of raw
materials from inventory and ends when the last process prior to
loading for shipment has been completed; (ii) fabricating begins
with the removal from storage or inventory of the property to be
assembled, processed, altered, or modified and ends with the
creation or production of the new or changed product; (iii)
mining begins with the removal of overburden from the site of
the ores, minerals, stone, peat deposit, or surface materials
and ends when the last process before stockpiling is completed;
and (iv) refining begins with the removal from inventory or
storage of a natural resource and ends with the conversion of
the item to its completed form.
(4) "Machinery" means mechanical, electronic, or electrical
devices, including computers and computer software, that are
purchased or constructed to be used for the activities set forth
in paragraph (a), beginning with the removal of raw materials
from inventory through completion of the product, including
packaging of the product.
(4) (5) "Machinery and equipment used for pollution control"
means machinery and equipment used solely to eliminate, prevent,
or reduce pollution resulting from an activity described in
paragraph (a).
(5) (6) "Manufacturing" means an operation or series of
operations where raw materials are changed in form, composition,
or condition by machinery and equipment and which results in the
production of a new article of tangible personal property. For
purposes of this subdivision, "manufacturing" includes the
generation of electricity or steam to be sold at retail.
(6) (7) "Mining" means the extraction of minerals, ores,
stone, or peat.
(7) (8) "Online data retrieval system" means a system whose
cumulation of information is equally available and accessible to
all its customers.
(8) (9) "Primarily" means machinery and equipment used 50
percent or more of the time in an activity described in
paragraph (a).
(9) (10) "Refining" means the process of converting a
natural resource to a an intermediate or finished product,
including the treatment of water to be sold at retail.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2003.
Sec. 11. Minnesota Statutes 2002, section 297A.68, is
amended by adding a subdivision to read:
Subd. 39. [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of
tangible personal property or services is exempt from tax for a
period of six months from the effective date of the law change
that results in the imposition of the tax under this chapter if:
(1) the act imposing the tax does not have transitional
effective date language for existing construction contracts and
construction bids; and
(2) the requirements of paragraph (b) are met.
(b) A sale is tax exempt under paragraph (a) if it meets
the requirements of either clause (1) or (2):
(1) For a construction contract:
(i) the goods or services sold must be used for the
performance of a bona fide written lump sum or fixed price
construction contract;
(ii) the contract must be entered into before the date the
goods or services become subject to the sales tax;
(iii) the contract must not provide for allocation of
future taxes; and
(iv) for each qualifying contract the contractor must give
the seller documentation of the contract on which an exemption
is to be claimed.
(2) For a bid:
(i) the goods or services sold must be used pursuant to an
obligation of a bid or bids;
(ii) the bid or bids must be submitted and accepted before
the date the goods or services became subject to the sales tax;
(iii) the bid or bids must not be able to be withdrawn,
modified, or changed without forfeiting a bond; and
(iv) for each qualifying bid, the contractor must give the
seller documentation of the bid on which an exemption is to be
claimed.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 12. Minnesota Statutes 2002, section 297A.69,
subdivision 2, is amended to read:
Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.]
(a) Materials stored, used, or consumed in agricultural
production of personal property intended to be sold ultimately
at retail are exempt, whether or not the item becomes an
ingredient or constituent part of the property produced.
Materials that qualify for this exemption include, but are not
limited to, the following:
(1) feeds, seeds, trees, fertilizers, and herbicides,
including when purchased for use by farmers in a federal or
state farm or conservation program;
(2) materials sold to a veterinarian to be used or consumed
in the care, medication, and treatment of agricultural
production animals and horses;
(3) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(4) materials, including chemicals, fuels, and electricity
purchased by persons engaged in agricultural production to treat
waste generated as a result of the production process;
(5) fuels, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating, cooling, or lighting is exempt if (i) it
is in excess of the average climate control or lighting for the
production area, and (ii) it is necessary to produce that
particular product;
(6) petroleum products and lubricants;
(7) packaging materials, including returnable containers
used in packaging food and beverage products; and
(8) accessory tools and equipment that are separate
detachable units with an ordinary useful life of less than 12
months used in producing a direct effect upon the product.
Machinery, equipment, implements, tools, accessories,
appliances, contrivances, and furniture and fixtures, except
those listed in this clause are not included within this
exemption.
(b) For purposes of this subdivision, "agricultural
production" includes, but is not limited to, horticulture,
floriculture, maple syrup harvesting, and the raising of pets,
fur-bearing animals, research animals, horses, farmed cervidae
as defined in section 17.451, subdivision 2, llamas as defined
in section 17.455, subdivision 2, and ratitae as defined in
section 17.453, subdivision 3.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after December 31, 2003.
Sec. 13. Minnesota Statutes 2002, section 297A.69,
subdivision 3, is amended to read:
Subd. 3. [FARM MACHINERY REPAIR AND REPLACEMENT PARTS.]
Repair and replacement parts, except tires, used for maintenance
or repair of farm machinery, logging equipment, and aquaculture
production equipment are exempt, if the part replaces a farm
machinery part assigned a specific or generic part number by the
manufacturer of the farm machinery.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2003.
Sec. 14. Minnesota Statutes 2002, section 297A.69,
subdivision 4, is amended to read:
Subd. 4. [FARM MACHINERY, EQUIPMENT, AND FENCING.] The
following machinery, equipment, and fencing is exempt:
(1) farm machinery is exempt.;
(2) logging equipment, including chain saws used for
commercial logging;
(3) fencing used for the containment of farmed cervidae, as
defined in section 17.451, subdivision 2;
(4) primary and backup generator units used to generate
electricity for the purpose of operating farm machinery,
aquacultural production equipment, or logging equipment, or
providing light or space heating necessary for the production of
livestock, dairy animals, dairy products, or poultry and poultry
products; and
(5) aquaculture production equipment.
[EFFECTIVE DATE.] This section is effective for sales and
purchases made after June 30, 2003.
Sec. 15. Minnesota Statutes 2002, section 297B.025,
subdivision 1, is amended to read:
Subdivision 1. [NONCOLLECTOR VEHICLE.] Purchase or use of
a passenger automobile as defined in section 168.011,
subdivision 7, shall be taxed pursuant to section 297B.02,
subdivision 2, if the passenger automobile is (1) is in the
tenth or subsequent year of vehicle life, and (2) is not an
above-market automobile as designated by the registrar of motor
vehicles does not have a resale value of $3,000 or more, as
determined using nationally recognized sources of information on
automobile resale values, as designated by the registrar of
motor vehicles.
The registrar of motor vehicles shall prepare, and
distribute to all deputy motor vehicle registrars by July 15,
1985, a listing by make, model, and year of above-market
automobiles. Except as provided by subdivision 2, the registrar
must include in the list all automobiles with a resale value of
$3,000 or more, as determined using nationally recognized
sources of information on automobile resale values. The
registrar shall revise the list by February 1 of each year. The
initial list and all subsequent revisions must include only
those automobiles which are in the tenth or subsequent year of
vehicle life.
[EFFECTIVE DATE.] This section is effective for vehicles
purchased after June 30, 2003.
Sec. 16. Minnesota Statutes 2002, section 297B.025,
subdivision 2, is amended to read:
Subd. 2. [COLLECTOR VEHICLE.] A passenger automobile that
is registered under section 168.10, subdivision 1a, 1b, 1c, 1d,
or 1h, or a fire truck registered under section 168.10,
subdivision 1c, shall be taxed under section 297B.02,
subdivision 3, and the registrar shall not designate as an
above-market automobile a passenger automobile or a fire truck
registered under those subdivisions. If the vehicle is
subsequently registered in another class not under section
168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of
the date of registration under those subdivisions, it shall be
subject to the full excise tax imposed under subdivision 1.
[EFFECTIVE DATE.] This section is effective for vehicles
purchased after December 31, 2003.
Sec. 17. Minnesota Statutes 2002, section 297B.035,
subdivision 1, is amended to read:
Subdivision 1. [ORDINARY COURSE OF BUSINESS.] Except as
provided in this section, motor vehicles purchased for resale in
the ordinary course of business or used by any motor vehicle
dealer, as defined in section 168.011, subdivision 21, who is
licensed under section 168.27, subdivision 2 or 3, which bear
dealer plates as authorized by section 168.27, subdivision 16,
shall be exempt from the provisions of this chapter.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 18. [REPEALER.]
(a) Minnesota Statutes 2002, section 297A.72, subdivision
1, is repealed effective for exemption certificates received for
sales occurring after June 30, 2003.
(b) Minnesota Statutes 2002, section 297A.97, is repealed
effective for sales and purchases occurring after December 31,
2003.
(c) Minnesota Rules, parts 8130.0800, subparts 5 and 12;
8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4;
8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and
8130.8300, are repealed effective the day following final
enactment.
ARTICLE 7
DEPARTMENT SPECIAL TAXES INITIATIVES
Section 1. Minnesota Statutes 2002, section 115B.24,
subdivision 8, is amended to read:
Subd. 8. [PENALTIES; ENFORCEMENT.] The audit, penalty and
enforcement provisions applicable to corporate franchise taxes
imposed under chapter 290 apply to the taxes imposed under
section 115B.22 and those provisions shall be administered by
the commissioner.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2002, section 295.50,
subdivision 9b, is amended to read:
Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means
inpatient and outpatient services and other goods and services
provided by hospitals, surgical centers, or health care
providers. They include the following health care goods and
services provided to a patient or consumer:
(1) bed and board;
(2) nursing services and other related services;
(3) use of hospitals, surgical centers, or health care
provider facilities;
(4) medical social services;
(5) drugs, biologicals, supplies, appliances, and
equipment;
(6) other diagnostic or therapeutic items or services;
(7) medical or surgical services;
(8) items and services furnished to ambulatory patients not
requiring emergency care;
(9) emergency services; and
(10) covered services listed in section 256B.0625 and in
Minnesota Rules, parts 9505.0170 to 9505.0475.
(b) "Patient services" does not include:
(1) services provided to nursing homes licensed under
chapter 144A; and
(2) examinations for purposes of utilization reviews,
insurance claims or eligibility, litigation, and employment,
including reviews of medical records for those purposes;
(3) services provided by community residential mental
health facilities licensed under Minnesota Rules, parts
9520.0500 to 9520.0690;
(4) services provided by community support programs and
family community support programs approved under Minnesota
Rules, parts 9535.1700 to 9535.1760;
(5) services provided by community mental health centers as
defined in section 245.62, subdivision 2;
(6) services provided by assisted living programs and
congregate housing programs; and
(7) hospice care services.
[EFFECTIVE DATE.] This section is effective for gross
revenues received after December 31, 2002.
Sec. 3. Minnesota Statutes 2002, 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 295.57 295.59:
(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) (17);
(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) (17);
(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 otherwise exempt under this chapter;
(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) (14) government payments received by a regional
treatment center;
(16) payments received for hospice care services;
(17) (15) payments received by a health care provider for
hearing aids and related equipment or prescription eyewear
delivered outside of Minnesota;
(18) (16) 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;
and
(19) payments received for services provided by: assisted
living programs and congregate housing programs; and
(20) (17) 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 gross
revenues received after December 31, 2002.
Sec. 4. Minnesota Statutes 2002, section 297F.01,
subdivision 21a, is amended to read:
Subd. 21a. [UNLICENSED SELLER.] "Unlicensed seller" means
anyone who is not licensed under section 297F.03 or 461.12 to
sell the particular product to the purchaser or possessor of the
product.
[EFFECTIVE DATE.] This section is effective July 1, 2003.
Sec. 5. Minnesota Statutes 2002, section 297F.01,
subdivision 23, is amended to read:
Subd. 23. [WHOLESALE SALES PRICE.] "Wholesale sales price"
means the established price stated on the price list in effect
at the time of sale for which a manufacturer or person sells a
tobacco product to a distributor, exclusive of any discount,
promotional offer, or other reduction. For purposes of this
subdivision, "price list" means the manufacturer's price at
which tobacco products are made available for sale to all
distributors on an ongoing basis.
[EFFECTIVE DATE.] This section is effective July 1, 2003.
Sec. 6. Minnesota Statutes 2002, section 297F.06,
subdivision 4, is amended to read:
Subd. 4. [TOBACCO PRODUCTS USE TAX.] The tobacco products
use tax does not apply to the possession, use, or storage of
tobacco products in quantities of: that have an aggregate cost
in any calendar month to the consumer of $100 or less.
(1) not more than 50 cigars;
(2) not more than ten ounces snuff or snuff powder;
(3) not more than one pound smoking or chewing tobacco or
any other tobacco product in the possession of any one consumer.
[EFFECTIVE DATE.] This section is effective July 1, 2003.
Sec. 7. Minnesota Statutes 2002, section 297F.20,
subdivision 1, is amended to read:
Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a)
A person or consumer required to file a return, report, or other
document with the commissioner who fails to do so is guilty of a
misdemeanor.
(b) A person or consumer required to pay or to collect and
remit a tax under this chapter, who fails to do so when
required, is guilty of a misdemeanor.
[EFFECTIVE DATE.] This section is effective for acts
committed on or after July 1, 2003.
Sec. 8. Minnesota Statutes 2002, section 297F.20,
subdivision 2, is amended to read:
Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.]
(a) A person or consumer required to file a return, report, or
other document with the commissioner, who knowingly, rather than
accidentally, inadvertently, or negligently, fails to file it
when required, is guilty of a gross misdemeanor.
(b) A person or consumer required to pay or to collect and
remit a tax under this chapter, who knowingly, rather than
accidentally, inadvertently, or negligently, fails to file it
when required, is guilty of a gross misdemeanor.
[EFFECTIVE DATE.] This section is effective for acts
committed on or after July 1, 2003.
Sec. 9. Minnesota Statutes 2002, section 297F.20,
subdivision 3, is amended to read:
Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A
person or consumer who files with the commissioner a return,
report, or other document, or who maintains or provides invoices
subject to review by the commissioner under this chapter, known
by the person or consumer to be fraudulent or false concerning a
material matter, is guilty of a felony.
(b) A person or consumer who knowingly aids or assists in,
or advises in the preparation or presentation of a return,
report, invoice, or other document that is fraudulent or false
concerning a material matter, whether or not the falsity or
fraud is committed with the knowledge or consent of the
person or consumer authorized or required to present the return,
report, invoice, or other document, is guilty of a felony.
[EFFECTIVE DATE.] This section is effective for acts
committed on or after July 1, 2003.
Sec. 10. Minnesota Statutes 2002, section 297F.20,
subdivision 6, is amended to read:
Subd. 6. [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.]
(a) A person, other than a licensed distributor or a consumer,
who possesses, receives, or transports more than 200 but fewer
than 5,000 unstamped cigarettes, or up to $100 $350 worth of
untaxed tobacco products is guilty of a misdemeanor.
(b) A person, other than a licensed distributor or a
consumer, who possesses, receives, or transports 5,000 or more,
but fewer than 20,001 unstamped cigarettes, or up to $500 more
than $350 but less than $1,400 worth of untaxed tobacco products
is guilty of a gross misdemeanor.
(c) A person, other than a licensed distributor or a
consumer, who possesses, receives, or transports more than
20,000 unstamped cigarettes, or $500 $1,400 or more worth of
untaxed tobacco products is guilty of a felony.
(d) For purposes of this subdivision, an individual in
possession of more than 4,999 unstamped cigarettes, or more than
$350 worth of untaxed tobacco products, is presumed not to be a
consumer.
[EFFECTIVE DATE.] This section is effective for acts
committed on or after July 1, 2003.
Sec. 11. Minnesota Statutes 2002, section 297F.20,
subdivision 9, is amended to read:
Subd. 9. [PURCHASES FROM UNLICENSED SELLERS.] (a) No
retailer or subjobber shall purchase cigarettes or tobacco
products from any person who is not licensed under section
297F.03 as a licensed distributor or subjobber.
(b) A retailer, or subjobber, or consumer who purchases
from an unlicensed seller more than 200 but fewer than 5,000
cigarettes or up to $100 $350 worth of tobacco products is
guilty of a misdemeanor.
(b) (c) A retailer, or subjobber, or consumer who
purchases from an unlicensed seller 5,000 or more, but fewer
than 20,001 cigarettes or up to $500 more than $350 but less
than $1,400 worth of untaxed tobacco products is guilty of a
gross misdemeanor.
(c) (d) A retailer, or subjobber, or consumer who
purchases from an unlicensed seller more than 20,000 cigarettes
or $500 $1,400 or more worth of tobacco products is guilty of a
felony.
[EFFECTIVE DATE.] This section is effective for acts
committed on or after July 1, 2003.
Sec. 12. Minnesota Statutes 2002, section 297I.01,
subdivision 9, is amended to read:
Subd. 9. [GROSS PREMIUMS.] "Gross premiums" means total
premiums paid by policyholders and applicants of policies,
whether received in the form of money or other valuable
consideration, on property, persons, lives, interests and other
risks located, resident, or to be performed in this state, but
excluding consideration and premiums for reinsurance assumed
from other insurance companies. The term "gross premiums"
includes the total consideration paid to bail bond agents for
bail bonds. For title insurance companies, "gross premiums"
means the charge for title insurance made by a title insurance
company or its agents according to the company's rate filing
approved by the commissioner of commerce without a deduction for
commissions paid to or retained by the agent. Gross premiums of
a title insurance company does not include any other charge or
fee for abstracting, searching, or examining the title, or
escrow, closing, or other related services. The term "gross
premiums" includes any workers' compensation special
compensation fund premium surcharge pursuant to section 176.129.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. Minnesota Statutes 2002, section 297I.20, is
amended to read:
297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSET OFFSETS
AGAINST PREMIUM TAXES.]
Subdivision 1. [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.]
(a) An insurance company may offset against its premium tax
liability to this state any amount paid for assessments made for
insolvencies which occur after July 31, 1994, under sections
60C.01 to 60C.22; and any amount paid for assessments made after
July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to
61B.16, or under sections 61B.18 to 61B.32 as follows:
(1) Each such assessment shall give rise to an amount of
offset equal to 20 percent of the amount of the assessment for
each of the five calendar years following the year in which the
assessment was paid.
(2) The amount of offset initially determined for each
taxable year is the sum of the amounts determined under clause
(1) for that taxable year.
(b)(1) Each year the commissioner shall compare total
guaranty association assessments levied over the preceding five
calendar years to the sum of all premium tax and corporate
franchise tax revenues collected from insurance companies,
without reduction for any guaranty association assessment offset
in the preceding calendar year, referred to in this subdivision
as "preceding year insurance tax revenues."
(2) If total guaranty association assessments levied over
the preceding five years exceed the preceding year insurance tax
revenues, insurance companies must be allowed only a
proportionate part of the premium tax offset calculated under
paragraph (a) for the current calendar year.
(3) The proportionate part of the premium tax offset
allowed in the current calendar year is determined by
multiplying the amount calculated under paragraph (a) by a
fraction. The numerator of the fraction equals the preceding
year insurance tax revenues, and its denominator equals total
guaranty association assessments levied over the preceding
five-year period.
(4) The proportionate part of the premium tax offset that
is not allowed must be carried forward to subsequent tax years
and added to the amount of premium tax offset calculated under
paragraph (a) prior to application of the limitation imposed by
this paragraph.
(5) Any amount carried forward from prior years must be
allowed before allowance of the offset for the current year
calculated under paragraph (a).
(6) The premium tax offset limitation must be calculated
separately for (i) insurance companies subject to assessment
under sections 60C.01 to 60C.22, and (ii) insurance companies
subject to assessment under Minnesota Statutes 1992, sections
61B.01 to 61B.16, or 61B.18 to 61B.32.
(7) When the premium tax offset is limited by this
provision, the commissioner shall notify affected insurance
companies on a timely basis for purposes of completing premium
and corporate franchise tax returns.
(8) The guaranty associations created under sections 60C.01
to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16,
and 61B.18 to 61B.32, shall provide the commissioner with the
necessary information on guaranty association assessments.
(c)(1) If the offset determined by the application of
paragraphs (a) and (b) exceeds the insurance company's premium
tax liability under this section prior to allowance of the
credit for premium taxes, then the insurance company may carry
forward the excess, referred to in this subdivision as the
"carryforward credit" to subsequent taxable years.
(2) The carryforward credit is allowed as an offset against
premium tax liability for the first succeeding year to the
extent that the premium tax liability for that year exceeds the
amount of the allowable offset for the year determined under
paragraphs (a) and (b).
(3) The carryforward credit must be reduced, but not below
zero, by the amount of the carryforward credit allowed as an
offset against the premium tax under this paragraph. The
remainder, if any, of the carryforward credit must be carried
forward to succeeding taxable years until the entire
carryforward credit has been credited against the insurance
company's liability for premium tax under this chapter if
applicable for that taxable year.
(d) When an insurer has offset against taxes its payment of
an assessment of the Minnesota life and health guaranty
association, and the association pays the insurer a refund with
respect to the assessment under Minnesota Statutes 1992, section
61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund
reduces the insurer's carryforward credit under paragraph (c).
If the refund exceeds the amount of the carryforward credit, the
excess amount must be repaid to the state by the insurers to the
extent of the offset in the manner the commissioner requires.
Subd. 2. [JOINT UNDERWRITING ASSOCIATION OFFSET.] An
assessment made pursuant to section 62I.06, subdivision 6, shall
be deductible by the member from past or future premium taxes
due the state.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. [REVISOR'S INSTRUCTION.]
In the next edition of Minnesota Rules, the revisor shall
delete any references to the sections repealed in section 15,
paragraph (a).
Sec. 15. [REPEALER.]
(a) Minnesota Statutes 2002, sections 294.01; 294.02;
294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11;
and 294.12, are repealed effective the day following final
enactment.
(b) Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1;
and 8125.1400, are repealed effective the day following final
enactment.
ARTICLE 8
DEPARTMENT COLLECTIONS AND COMPLIANCE INITIATIVES
Section 1. [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS
AGAINST DEPARTMENT OF REVENUE EMPLOYEES.]
Subdivision 1. [DEFINITIONS.] (a) "Recording office" means
a county recorder, registrar of titles, or secretary of state in
this state or another state.
(b) "Filing party" means the person or persons requesting
or causing another person to request that the recording office
accept documents or instruments for recording or filing.
Subd. 2. [INVALID DOCUMENTS NAMING THE COMMISSIONER OR
DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a
nonconsensual common law lien under section 514.99, that
purports to create a claim against the commissioner of revenue
or an employee of the department of revenue based on performance
or nonperformance of duties by the commissioner or employee is
invalid unless accompanied by a specific order from a court of
competent jurisdiction authorizing the filing of the document or
unless a specific statute authorizes the filing of the document.
Subd. 3. [CIVIL PENALTY.] If a filing party causes a
document described in subdivision 2 to be recorded in a
recording office, the commissioner may assess a penalty against
the filing party of $1,000 per document filed, payable to the
general fund. An order assessing a penalty under this section
is reviewable administratively under section 289A.65 and is
appealable to tax court under chapter 271. The penalty is
collected and paid in the same manner as income tax. The
penalty is in addition to any other remedy available to the
commissioner of revenue or to an employee of the department of
revenue against whom the document has been filed.
[EFFECTIVE DATE.] This section is effective for documents
filed on or after July 1, 2003.
Sec. 2. Minnesota Statutes 2002, section 270.69, is
amended by adding a subdivision to read:
Subd. 16. [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien
imposed under this section attaches to the proceeds of property
with the same priority that the lien has with respect to the
property itself. "Proceeds of property" means proceeds from the
sale, lease, license, exchange, or other disposition of the
property, including insurance proceeds arising from the loss or
destruction of the property.
[EFFECTIVE DATE.] This section is effective for all liens,
whether imposed prior to, on, or after the day following final
enactment.
Sec. 3. Minnesota Statutes 2002, section 270.701,
subdivision 2, is amended to read:
Subd. 2. [NOTICE OF SALE.] The commissioner shall as soon
as practicable after the seizure of the property give notice of
sale of the property to the owner, in the manner of service
prescribed in subdivision 1. In the case of personal property,
the notice shall be served at least 10 days prior to the sale.
In the case of real property, the notice shall be served at
least four weeks prior to the sale. The commissioner shall also
cause public notice of each sale to be made. In the case of
personal property, notice shall be posted at least 10 days prior
to the sale at the county courthouse for the county where the
seizure is made, and in not less than two other public
places. For purposes of this requirement, the Internet is a
public place for posting the information. In the case of real
property, six weeks' published notice shall be given prior to
the sale, in a newspaper published or generally circulated in
the county. The notice of sale provided in this subdivision
shall specify the property to be sold, and the time, place,
manner and conditions of the sale. Whenever levy is made
without regard to the 30-day period provided in section 270.70,
subdivision 2, public notice of sale of the property seized
shall not be made within the 30-day period unless section
270.702 (relating to sale of perishable goods) is applicable.
[EFFECTIVE DATE.] This section is effective for notices of
sales posted on or after the day following final enactment.
Sec. 4. Minnesota Statutes 2002, section 270.701, is
amended by adding a subdivision to read:
Subd. 7. [SALE OF SEIZED SECURITIES.] (a) At the time of
levy on securities, the commissioner shall provide notice to the
taxpayer that the securities may be sold after ten days from the
date of seizure.
(b) If the commissioner levies upon nonexempt publicly
traded securities and the value of the securities is less than
or equal to the total obligation for which the levy is done,
after ten days the person who possesses or controls the
securities shall liquidate the securities in a commercially
reasonable manner. After liquidation, the person shall transfer
the proceeds to the commissioner, less any applicable
commissions or fees, or both, which are charged in the normal
course of business.
(c) If the commissioner levies upon nonexempt publicly
traded securities and the value of the securities exceeds the
total amount of the levy, the owner of the securities may,
within seven days after receipt of the department's notice of
levy given pursuant to subdivision 1, instruct the person who
possesses or controls the securities which securities are to be
sold to satisfy the obligation. If the owner does not provide
instructions for liquidation, the person who possesses or
controls the securities shall liquidate the securities in an
amount sufficient to pay the obligation, plus any applicable
commissions or fees, or both, which are charged in the normal
course of business, beginning with the nonexempt securities
purchased most recently. After liquidation, the person who
possesses or controls the securities shall transfer to the
commissioner the amount of money needed to satisfy the levy.
[EFFECTIVE DATE.] This section is effective for sales of
securities seized on or after the day following final enactment.
Sec. 5. Minnesota Statutes 2002, section 270.72,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of this section, the
following terms have the meanings given.
(a) "Taxes" are mean all taxes payable to the commissioner
including penalties and interest due on the taxes.
(b) "Delinquent taxes" do not include a tax liability if
(i) an administrative or court action which contests the amount
or validity of the liability has been filed or served, (ii) the
appeal period to contest the tax liability has not expired, or
(iii) the applicant has entered into a payment agreement and is
current with the payments.
(c) "Applicant" means an individual if the license is
issued to or in the name of an individual or the corporation or
partnership if the license is issued to or in the name of a
corporation or partnership. "Applicant" also means an officer
of a corporation, a member of a partnership, or an individual
who is liable for delinquent taxes, either for the entity for
which the license is at issue or for another entity for which
the liability was incurred, or personally as a licensee. In the
case of a license transfer, "applicant" also means both the
transferor and the transferee of the license. "Applicant" also
means any holder of a license.
(d) "License" includes means any permit, registration,
certification, or other form of approval authorized by statute
or rule to be issued by the state or a political subdivision of
the state as a condition of doing business or conducting a
trade, profession, or occupation in Minnesota, specifically
including, but not limited to, a contract for space rental at
the Minnesota state fair and authorization to operate
concessions or rides at county and local fairs, festivals, or
events.
(e) "Licensing authority" includes the Minnesota state fair
board and county and local boards or governing bodies.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2002, section 270A.03,
subdivision 2, is amended to read:
Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any
state agency, as defined by section 14.02, subdivision 2, the
regents of the University of Minnesota, any district court of
the state, any county, any statutory or home rule charter city
presenting a claim for a municipal hospital or a public library
or a municipal ambulance service, a hospital district, a private
nonprofit hospital that leases its building from the county in
which it is located, any public agency responsible for child
support enforcement, any public agency responsible for the
collection of court-ordered restitution, and any public agency
established by general or special law that is responsible for
the administration of a low-income housing program, and the
Minnesota collection enterprise as defined in section 16D.02,
subdivision 8, for the purpose of collecting the costs imposed
under section 16D.11.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2002, section 289A.31,
subdivision 3, is amended to read:
Subd. 3. [TRANSFEREES AND FIDUCIARIES.] The amounts of the
following liabilities are, except as otherwise provided in
section 289A.38, subdivision 13, assessed, collected, and paid
in the same manner and subject to the same provisions and
limitations as a deficiency in a tax imposed by chapter 290,
including any provisions of law for the collection of taxes:
(1) the liability, at law or in equity, of a transferee of
property of a taxpayer for tax or overpayment of a refund,
including interest, additional amounts, and additions to the tax
or overpayment provided by law, imposed upon the taxpayer by
chapter 290 or provided for in chapter 290A; and
(2) the liability of a fiduciary under subdivision 4 for
the payment of tax from the estate of the taxpayer. The
liability may reflect the amount of tax shown on the return or
any deficiency in tax.
[EFFECTIVE DATE.] This section is effective for refunds
paid on or after the day following final enactment.
Sec. 8. Minnesota Statutes 2002, section 289A.31,
subdivision 4, is amended to read:
Subd. 4. [TAX AS A PERSONAL DEBT OF A FIDUCIARY.] The A
tax imposed by chapter 290 and an overpayment of a refund
provided for in chapter 290A, and interest and penalties, is a
personal debt of the taxpayer from the time the liability
arises, regardless of when the time for discharging the
liability by payment occurs. The debt is, in the case of the
personal representative of the estate of a decedent and in the
case of any fiduciary, that of the individual in the
individual's official or fiduciary capacity only, unless the
individual has voluntarily distributed the assets held in that
capacity without reserving sufficient assets to pay the tax,
interest, and penalties, in which event the individual is
personally liable for the deficiency.
[EFFECTIVE DATE.] This section is effective for taxes
imposed and property tax refunds claimed on or after the day
following final enactment.
Sec. 9. Minnesota Statutes 2002, section 289A.36,
subdivision 7, is amended to read:
Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF
SUBPOENA.] (a) Disobedience of subpoenas issued under this
section shall be punished by the district court of the district
in which the party served with the subpoena is located, in the
same manner as contempt of the district court.
(b) Disobedience of a subpoena issued under subdivision 9
shall be punished by the district court for Ramsey county in the
same manner as contempt of the district court. In addition to
contempt remedies, the court may issue any order the court deems
reasonably necessary to enforce compliance with the subpoena.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. Minnesota Statutes 2002, section 289A.36, is
amended by adding a subdivision to read:
Subd. 9. [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION
OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to
determine whether a business located outside the state of
Minnesota is required to file a return under this chapter, the
commissioner may examine the relevant records and files of the
business.
(b) To the full extent permitted by the Minnesota and
United States constitutions, the commissioner may compel
production of those relevant records and files by subpoena. The
subpoena may be served on the secretary of state along with the
address to which service of the subpoena is to be sent and a fee
of $50. The secretary of state shall forward a copy of the
subpoena to the business using the procedures for service of
process in section 5.25, subdivision 6.
(c) The commissioner shall pay the reasonable cost of
producing records subject to subpoena under this subdivision if:
(1) the subpoenaed party cannot produce the records without
undue burden; and
(2) the examination made pursuant to paragraph (a) shows
that the subpoenaed party is not required to file a return under
this chapter.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. Minnesota Statutes 2002, section 289A.36, is
amended by adding a subdivision to read:
Subd. 10. [PENALTY.] In addition to sanctions imposed
under subdivision 7, a penalty of $250 per day is imposed on any
business that is in violation of a court order to comply with a
subpoena that is seeking information necessary for the
commissioner to be able to determine whether the business is
required to file a return or pay a tax. The maximum penalty is
$25,000. Upon the request of the commissioner, the court shall
determine the amount of the penalty and enter it as a judgment
in favor of the commissioner. The penalty is not payable until
the judgment is entered.
[EFFECTIVE DATE.] This section is effective for violations
of court orders to enforce subpoenas issued on or after the day
following final enactment.
Sec. 12. Minnesota Statutes 2002, section 297A.85, is
amended to read:
297A.85 [CANCELLATION OF PERMITS.]
The commissioner may cancel a permit if one of the
following conditions occurs:
(1) the permit holder has not filed a sales or use tax
return for at least one year;
(2) the permit holder has not reported any sales or use tax
liability on the permit holder's returns for at least two years;
or
(3) the permit holder requests cancellation of the permit;
or
(4) the permit is subject to cancellation pursuant to
section 297A.86, subdivision 2, paragraph (a).
[EFFECTIVE DATE.] This section is effective for
cancellations of permits done on or after the day following
final enactment.
Sec. 13. [REPEALER.]
Minnesota Statutes 2002, section 270.691, subdivision 8, is
repealed effective the day following final enactment.
ARTICLE 9
CENTRAL LAKES REGION SANITARY DISTRICT
Section 1. [DEFINITIONS.]
Subdivision 1. [APPLICATION.] The terms defined in this
section shall have the meaning given them unless otherwise
provided or indicated by the context.
Subd. 2. [ACQUISITION AND BETTERMENT.] "Acquisition" and
"betterment" shall have the meanings given them in Minnesota
Statutes, section 475.51.
Subd. 3. [AGENCY.] "Agency" means the Minnesota pollution
control agency created and established by Minnesota Statutes,
chapter 116.
Subd. 4. [AGRICULTURAL PROPERTY.] "Agricultural property"
means land as is classified agricultural land within the meaning
of Minnesota Statutes, section 273.13, subdivision 23.
Subd. 5. [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND
DEBT SERVICE.] "Current costs of acquisition, betterment, and
debt service" means interest and principal estimated to be due
during the budget year on bonds issued to finance the
acquisition and betterment and all other costs of acquisition
and betterment estimated to be paid during the budget year from
funds other than bond proceeds and federal or state grants.
Subd. 6. [DISTRICT DISPOSAL SYSTEM.] "District disposal
system" means any and all of the interceptors or treatment works
owned, constructed, or operated by the board unless designated
by the board as local sanitary sewer facilities.
Subd. 7. [CENTRAL LAKES REGION SANITARY DISTRICT AND
DISTRICT.] "Central Lakes Region Sanitary District" and
"district" mean the area over which the sanitary sewer board has
jurisdiction, including those parts of the Douglas county
townships of Carlos, Brandon, La Grand, Leaf Valley, Miltona,
and Moe, as more particularly described by metes and bounds in
the comprehensive plan adopted under section 4.
Subd. 8. [INTERCEPTOR.] "Interceptor" means any sewer and
necessary appurtenances to it, including but not limited to,
mains, pumping stations, and sewage flow regulating and
measuring stations, that is designed for or used to conduct
sewage originating in more than one local government unit, or
that is designed or used to conduct all or substantially all the
sewage originating in a single local government unit from a
point of collection in that unit to an interceptor or treatment
works outside that unit, or that is determined by the board to
be a major collector of sewage used or designed to serve a
substantial area in the district.
Subd. 9. [LOCAL GOVERNMENT UNIT OR GOVERNMENT
UNIT.] "Local government unit" or "government unit" means any
municipal or public corporation or governmental or political
subdivision or agency located in whole or in part in the
district, authorized by law to provide for the collection and
disposal of sewage.
Subd. 10. [LOCAL SANITARY SEWER FACILITIES.] "Local
sanitary sewer facilities" means all or any part of any disposal
system in the district other than the district disposal system.
Subd. 11. [MUNICIPALITY.] "Municipality" means any
statutory or home rule charter city or town located in whole or
in part in the district.
Subd. 12. [PERSON.] "Person" means any individual,
partnership, corporation, limited liability company,
cooperative, or other organization or entity, public or private.
Subd. 13. [POLLUTION AND SEWER SYSTEM.] "Pollution" and
"sewer system" have the meanings given them in Minnesota
Statutes, section 115.01.
Subd. 14. [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer
board" or "board" means the sanitary sewer board established for
the Central Lakes Region Sanitary District as provided in
section 2.
Subd. 15. [SEWAGE.] "Sewage" means all liquid or
water-carried waste products from whatever sources derived,
together with the groundwater infiltration and surface water
that may be present.
Subd. 16. [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND
COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of
acquisition and betterment" and "costs of acquisition and
betterment" mean all acquisition and betterment expenses that
are permitted to be financed out of bond proceeds issued in
accordance with section 12, subdivision 4, whether or not the
expenses are in fact financed out of the bond proceeds.
Subd. 17. [TREATMENT WORKS AND DISPOSAL
SYSTEM.] "Treatment works" and "disposal system" have the
meanings given them in Minnesota Statutes, section 115.01.
Sec. 2. [SANITARY SEWER BOARD.]
Subdivision 1. [ESTABLISHMENT.] A sanitary sewer board
with jurisdiction in the Central Lakes Region Sanitary District
is established as a public corporation and political subdivision
of the state with perpetual succession and all the rights,
powers, privileges, immunities, and duties that may be validly
granted to or imposed upon a municipal corporation, as provided
in this article.
Subd. 2. [MEMBERS AND SELECTION.] The number of board
members and method by which they are selected is as follows:
The governing body of any municipality located in whole or part
within the district must each separately select one member.
Upon the board's ordering of a project to construct a sanitary
sewer, the governing body of any municipality must appoint one
additional member for each full 800 special assessments included
in the ordered project to be levied against property located in
the municipality. The term of each member is subject to the
approval of the voting members of the city council or town board.
Subd. 3. [TIME LIMIT; ALTERNATIVE APPOINTMENT.] The
initial board members must be selected as provided in
subdivision 2 within 60 days after this article is effective. A
successor must be selected at any time within 60 days before the
expiration of the predecessor's term in the same manner as the
predecessor was selected. Any vacancy on the board must be
filled within 60 days after it occurs. If a selection is not
made as provided within the time prescribed, the chief judge of
the seventh judicial district of the Minnesota district court,
on application by any interested person, shall appoint an
eligible person to the board.
Subd. 4. [VACANCIES.] If the office of any board member
becomes vacant, the vacancy shall be filled for the unexpired
term in the manner as provided for selection of the member who
vacated the office. The office shall be deemed vacant under the
conditions specified in Minnesota Statutes, section 351.02.
Subd. 5. [TERMS OF OFFICE.] The terms of all board members
shall be for one, two, three, or four calendar years to be
determined in accordance with subdivision 2 by the governing
body selecting such member. Terms shall expire on January 1 of
a calendar year, except that each member shall serve until a
successor has been duly selected and qualified.
Subd. 6. [REMOVAL.] A board member may be removed by the
unanimous vote of the appointing governing body with or without
cause.
Subd. 7. [QUALIFICATIONS.] Each board member may, but need
not be a resident of the district and may, but need not be an
elected public official.
Subd. 8. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A
certificate of selection to a seat of every board member,
stating the seat's term, must be made by the respective
municipal clerk. The certificate, with the approval attached by
other authority, if required, must be filed with the secretary
of state. A copy must be furnished to the board member and the
secretary of the board. Each member must qualify by taking and
subscribing to the oath of office prescribed by the Minnesota
Constitution, article V, section 6. The oath, duly certified by
the official administering the same, must be filed with the
secretary of state and the secretary of the board.
Subd. 9. [COMPENSATION OF BOARD MEMBERS.] Each board
member may be paid a per diem compensation to attend meetings
and for other services in an amount as may be specifically
authorized by the board from time to time. Per diem
compensation must not exceed $4,000 for any member in any one
year. All members of the board may be reimbursed for all
reasonable expenses incurred in the performance of their duties
as determined by the board.
Sec. 3. [GENERAL PROVISION FOR ORGANIZATION AND OPERATION
OF BOARD.]
Subdivision 1. [OFFICERS MEETINGS; SEAL.] A majority of
the members is a quorum at all meetings of the board, but a
lesser number may meet and adjourn from time to time and compel
the attendance of absent members. The board must meet regularly
at the time and place as the board by resolution designates.
Special meetings may be held at any time upon call of the chair
or any two members, upon written notice sent by mail to each
member at least three days before the meeting, or upon the
notice as the board by resolution may provide, or without notice
if each member is present or files with the secretary a written
consent to the meeting either before or after the meeting.
Except as otherwise provided in this article, any action within
the authority of the board may be taken by the affirmative vote
of a majority of the board at a regular or adjourned regular
meeting or at a duly held special meeting, but in any case only
if a quorum is present. All meetings of the board must be open
to the public as provided in Minnesota Statutes, chapter 13D.
Subd. 2. [CHAIR.] The board must elect a chair from its
membership. The term of the chair expires on January 1 of each
year. The chair presides at all meetings of the board, if
present, and must perform all other duties and functions usually
incumbent upon the officer, and all administrative functions
assigned to the chair by the board. The board must elect a
vice-chair from its membership to act for the chair during a
temporary absence or disability.
Subd. 3. [SECRETARY AND TREASURER.] The board must select
one or more persons who may, but need not be a member of the
board, to act as its secretary and treasurer. The secretary and
treasurer hold office at the pleasure of the board, subject to
the terms of any contract of employment that the board may enter
into with the secretary or treasurer. The secretary must record
the minutes of all meetings of the board, and is custodian of
all books and records of the board except those the board
entrusts to the custody of a designated employee. The board may
appoint a deputy to perform any and all functions of either the
secretary or the treasurer. A secretary or treasurer or a
deputy of either who is not a member of the board shall not have
any right to vote.
Subd. 4. [GENERAL MANAGER.] The board may appoint a
general manager who shall be selected solely upon the basis of
training, experience, and other qualifications. The general
manager serves at the pleasure of the board and at a
compensation to be determined by the board. The general manager
need not be a resident of the district and may also be selected
by the board to serve as either secretary or treasurer, or both,
of the board. The general manager must attend all meetings of
the board but must not vote. The general manager must:
(1) see that all resolutions, rules, regulations, or orders
of the board are enforced;
(2) appoint and remove, upon the basis of merit and
fitness, all subordinate officers and regular employees of the
board except the secretary and the treasurer and their deputies;
(3) present to the board plans, studies, and other reports
prepared for board purposes and recommend to the board for
adoption such measures as the general manager considers
necessary to enforce or carry out the powers and duties of the
board, or for the efficient administration of the affairs of the
board;
(4) keep the board fully advised as to its financial
condition, and prepare and submit to the board, and to the
governing bodies of the local government units, the board's
annual budget and other financial information the board
requests;
(5) recommend to the board for adoption rules recommended
as necessary for the efficient operation of a district disposal
system and all local sanitary sewer facilities over which the
board may assume responsibility as provided in section 17; and
(6) perform other duties as may be prescribed by the board.
Subd. 5. [PUBLIC EMPLOYEES.] The general manager and all
persons employed by the general manager and public employees,
and have all the rights and duties conferred on public employees
under the Minnesota Public Employment Labor Relations Act. The
compensation and conditions of employment of the employees is
not governed by any rule applicable to state employees in the
classified service or by Minnesota Statutes, chapter 15A, except
as specifically authorized by law.
Subd. 6. [PROCEDURES.] The board must adopt resolutions or
bylaws establishing procedures for board action, personnel
administration, record keeping, investment policy, approving
claims, authorizing or making disbursements, safekeeping funds,
and audit of all financial operations of the board.
Subd. 7. [SURETY BONDS AND INSURANCE.] The board may
procure surety bonds for its officers and employees in such
amounts as are considered necessary to assure proper performance
of their duties and proper accounting for funds in their custody.
It may buy insurance against risks to property and liability of
the board and its officers, agents, and employees for personal
injuries or death and property damage and destruction in the
amounts as it considers necessary or desirable, with the force
and effect stated in Minnesota Statutes, chapter 466.
Sec. 4. [COMPREHENSIVE PLAN.]
Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall
adopt a comprehensive plan for the collection, treatment, and
disposal of sewage in the district for designated periods that
the board considers proper and reasonable. The board must
prepare and adopt subsequent comprehensive plans for the
collection, treatment, and disposal of sewage in the district
for each succeeding designated period as the board considers
proper and reasonable. The plan must take into account the
preservation and best and most economic use of water and other
natural resources in the area; the preservation, use, and
potential for use of lands adjoining waters of the state to be
used for the disposal of sewage; and the impact such a disposal
system will have on present and future land use in the affected
area. The plans shall include the following:
(1) the exact legal description of the boundaries of the
district;
(2) the general location of needed interceptors and
treatment works;
(3) a description of the area that is to be served by the
various interceptors and treatment works;
(4) a long-range capital improvements program; and
(5) such other details as the board deems appropriate.
In developing the plans, the board shall consult with persons
designated by the governing bodies of any municipal or public
corporation or governmental or political subdivision or agency
within or without the district to represent such entities and
shall consider the data, resources, and input offered to the
board by such entities and any planning agency acting on behalf
of one or more such entities. Each plan, when adopted, must be
followed in the district and may be revised as often as the
board considers necessary.
Subd. 2. [REPORT TO DOUGLAS COUNTY.] Upon adoption of any
comprehensive plan that establishes or reestablishes the
boundaries of the district, the board must supply the
appropriate Douglas county offices with the boundaries of the
district.
Subd. 3. [COMPREHENSIVE PLANS; HEARING.] Before adopting
any later comprehensive plan, the board must hold a public
hearing on the proposed plan at the time and place in the
district it determines. The hearing may be continued from time
to time. Not less than 45 days before the hearing, the board
must publish notice of it in a newspaper or newspapers having
general circulation in the district stating the date, time, and
place of the hearing, and the place where the proposed plan may
be examined by any interested person. At the hearing, all
interested persons must be permitted to present their views on
the plan.
Subd. 4. [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH
BOARD'S RESPONSIBILITIES.] Before undertaking the construction
of new sewers or other disposal facilities or the substantial
alteration or improvement of any existing sewers or other
disposal facilities, each local government unit may, and must if
the construction or alteration of any sewage disposal facilities
is contemplated by the government unit, adopt a comprehensive
plan and program for the collection, treatment, and disposal of
sewage for which the local government unit is responsible,
coordinated with the board's comprehensive plan, and may revise
the plan as often as deemed necessary. Each local plan or
revision must be submitted to the board for review and is
subject to the approval of the board as to those features of the
plan affecting the board's responsibilities as determined by the
board. Any features disapproved by the board must be modified
in accordance with the board's recommendations. No construction
project involving those features may be undertaken by the local
government unit unless its governing body first finds the
project to be in accordance with the government unit's
comprehensive plan and program as approved by the board. Before
approval by the board of the comprehensive plan and program of
any local government unit in the district, no construction
project may be undertaken by the government unit unless approval
of the project is first gotten from the board as to those
features of the project affecting the board's responsibilities
as determined by the board.
Sec. 5. [SEWER SERVICE FUNCTION.]
Subdivision 1. [DUTY OF BOARD; ACQUISITION OF EXISTING
FACILITIES; NEW FACILITIES.] At any time after the board has
become organized, it must assume ownership of all existing
interceptors and treatment works that are needed to implement
the board's comprehensive plan for the collection, treatment,
and disposal of sewage in the district, in the manner and
subject to the conditions prescribed in subdivision 2, and must
design, acquire, construct, better, equip, operate, and maintain
all additional interceptors and treatment works that will be
needed for this purpose. The board must assume ownership of all
treatment works owned by a local government unit if any part of
those treatment works are so needed.
Subd. 2. [METHOD OF ACQUISITION; EXISTING DEBT.] The board
may require any local government unit to transfer to the board
all of its right, title, and interest in any interceptors or
treatment works and all necessary appurtenances to them owned by
the local government unit that will be needed for the purpose
stated in subdivision 1. Appropriate instruments of conveyance
for all the property must be executed and delivered to the board
by the proper officers of each local government unit concerned.
The board, upon assuming ownership of any of the interceptors or
treatment works, is obligated to pay to the local government
unit amounts sufficient to pay, when due, all remaining
principal of and interest on bonds issued by the local
government unit for the acquisition or betterment of the
interceptors or treatment works. The board must also assume the
same obligation with respect to any other existing disposal
system owned by a local government unit that the board
determines to have been replaced or rendered useless by the
district disposal system. The amounts to be paid under this
subdivision may be offset against any amount to be paid to the
board by the local government unit as provided in section 8.
The board is not obligated to pay the local government unit
anything in addition to the assumption of debt provided for in
this subdivision.
Subd. 3. [EXISTING JOINT POWERS BOARD.] Effective December
31, 2004, or an earlier date as determined by the board, the
corporate existence of the joint powers board created by
agreement among local government units under Minnesota Statutes,
section 471.59, to provide the financing, acquisition,
construction, improvement, extension, operation, and maintenance
of facilities for the collection, treatment, and disposal of
sewage is terminated. All persons regularly employed by the
joint powers board on that date become employees of the board,
and may at their option become members of the retirement system
applicable to persons employed directly by the board or may
continue as members of a public retirement association under any
other law, to which they belonged before that date, and retain
all pension rights that they may have the other law and all
other rights to which they are entitled by contract or law. The
board must make the employer's contributions to pension funds of
its employees. The employees must perform duties as may be
prescribed by the board. On December 31, 2004, or the earlier
date, all funds of the joint powers board and all later
collections of taxes, special assessments, or service charges,
or any other sums due the joint powers board, or levied or
imposed by or for the joint powers board, must be transferred to
or made payable to the sanitary sewer board and the county
auditor must remit the sums to the board. The local government
units otherwise entitled to the cash, taxes, assessments, or
service charges must be credited with the amounts, and the
credits must be offset against any amounts to be paid by them to
the board as provided in section 8. On December 31, 2004, or
the earlier chosen date, the board shall succeed to and become
vested with all right, title, and interest in and to any
property, real or personal, owned or operated by the joint
powers board. Before that date, the proper officers of the
joint powers board must execute and deliver to the sanitary
sewer board all deeds, conveyances, bills of sale, and other
documents or instruments required to vest in the board good and
marketable title to all the real or personal property, but this
article operates as the transfer and conveyance to the board of
the real or personal property, if not transferred, as may be
required under the law or under the circumstances. On December
31, 2004, or the earlier chosen date, the board is obligated to
pay or assume all outstanding bonds or other debt and all
contracts or obligations incurred by the joint powers board, and
all bonds, obligations, or debts of the joint powers board
outstanding on the date this article is effective, are validated.
Subd. 4. [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The
board may terminate, upon 60 days' mailed notice to the
contracting parties, any existing contract between or among
local government units requiring payments by a local government
unit to any other local government unit for the use of a
disposal system, or as reimbursement of capital costs of a
disposal system, all or part of which are needed to implement
the board's comprehensive plan. All contracts between or among
local government units for use of a disposal system entered into
after the date on which this article becomes effective must be
submitted to the board for approval as to those features
affecting the board's responsibilities as determined by the
board and are not effective until the approval is given.
Sec. 6. [SEWAGE COLLECTION AND DISPOSAL; POWERS.]
Subdivision 1. [POWERS.] In addition to all other powers
conferred upon the board in this article, the board has the
powers specified in this section.
Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may
discharge the effluent from any treatment works operated by it
into any waters of the state, subject to approval of the agency
if required and in accordance with any effluent or water quality
standards lawfully adopted by the agency, any interstate agency,
or any federal agency having jurisdiction.
Subd. 3. [USE OF DISTRICT SYSTEM.] The board may require
any person or local government unit to provide for the discharge
of any sewage, directly or indirectly, into the district
disposal system, or to connect any disposal system or a part of
it with the district disposal system wherever reasonable
opportunity is provided; may regulate the manner in which the
connections are made; may require any person or local government
unit discharging sewage into the disposal system to provide
preliminary treatment for it; may prohibit the discharge into
the district disposal system of any substance it determines will
or may be harmful to the system or any persons operating it; may
prohibit any extraneous flow into the system; and may require
any local government unit to discontinue the acquisition,
betterment, or operation of any facility for the unit's disposal
system wherever and so far as adequate service is or will be
provided by the district disposal system.
Sec. 7. [BUDGET.]
Except as otherwise specifically provided in this article,
the board is subject to Minnesota Statutes, section 275.065.
The board shall prepare and adopt, on or before September 15 of
each year, a budget showing for the following calendar year or
other fiscal year determined by the board, sometimes referred to
in this article as the budget year, estimated receipts of money
from all sources, including but not limited to, payments by each
local government unit, federal or state grants, taxes on
property, and funds on hand at the beginning of the year, and
estimated expenditures for:
(1) costs of operation, administration, and maintenance of
the district disposal system;
(2) cost acquisition and betterment of the district
disposal system; and
(3) debt service, including principal and interest, on
general obligation bonds and certificates issued under section
12, obligations and debts assumed under section 5, subdivisions
2 and 3, and any money judgments entered by a court of competent
jurisdiction. Expenditures within these general categories, and
others that the board may from time to time determine, must be
itemized in the detail the board prescribes. The board and its
officers, agents, and employees must not spend money for any
purpose other than debt service without having set forth the
expense in the budget, nor may they spend in excess of the
amount in the budget, and an excess expenditure or one for an
unauthorized purpose is enforceable except as the obligation of
the person incurring it; but the board may amend the budget at
any time by transferring from one budgetary purpose to another
any sums, except money for debt service and bond proceeds, or by
increasing expenditures in any amount by which cash receipts
during the budget year actually exceed the total amounts
designated in the original budget. The creation of any
obligation pursuant to section 12 or the receipts of any federal
or state grant is a sufficient budget designation of the
proceeds for the purpose for which it is authorized, and of the
tax or other revenue pledged to pay the obligation and interest
on it, whether or not specifically included in any annual budget.
Sec. 8. [ALLOCATION OF COSTS.]
Subdivision 1. [DEFINITION OF CURRENT COSTS.] The
estimated cost of administration, operation, maintenance, and
debt service of the district disposal system to be paid by the
board in each fiscal year and the estimated costs of acquisition
and betterment of the system that are to be paid during the year
from funds other than state or federal grants and bond proceeds
and all other previously unallocated payments made by the board
under this article in the fiscal year are referred to as current
costs.
Subd. 2. [COLLECTION OF CURRENT COSTS.] Current costs
shall be collected as described in paragraphs (a) and (b).
(a) Current costs may be allocated to local government
units in the district on an equitable basis as the board may
from time to time determine by resolution to be fair and
reasonable and in the best interests of the district. In making
the allocation, the board may provide for the deferment of
payment of all or part of current costs, the reallocation of
deferred costs, and the reimbursement of reallocated deferred
costs on an equitable basis as the board may from time to time
determine by resolution to be fair and reasonable and in the
best interests of the district. The adoption or revision of a
method of allocation, deferment, reallocation, or reimbursement
used by the board shall be made by the affirmative vote of at
least two-thirds of the members of the board.
(b) Upon approval of at least two-thirds of the members of
the board, the board may provide for direct collection of
current costs by monthly or other periodic billing of sewer
users.
Sec. 9. [GOVERNMENT UNITS; PAYMENTS TO BOARD.]
Subdivision 1. [OBLIGATIONS OF GOVERNMENT UNITS TO THE
BOARD.] Each government unit must pay to the board all sums
charged to it as provided in section 8, at the times and in the
manner determined by the board. The governing body of each
government unit must take all action necessary to provide the
funds required for the payments and to make the payments when
due.
Subd. 2. [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges
payable to the board by local government units may be made
payable at the times during each year as the board determines,
after it has taken into account the dates on which taxes,
assessments, revenue collections, and other funds become
available to the government unit required to pay such charges.
Subd. 3. [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX
LEVIES.] To accomplish any duty imposed on it by the board, the
governing body of every government unit may, in addition to the
powers granted in this article and in any other law or charter,
exercise the powers granted any municipality by Minnesota
Statutes, chapters 117, 412, 429, and 475, and sections 115.46,
444.075, and 471.59, with respect to the area of the government
unit located in the district. In addition, the governing body
of every government unit located in whole or in part within the
district may levy taxes upon all taxable property in that part
of the government unit located in this district for all or a
part of the amount payable to the board. If the levy is for
only part of the amount payable to the board, the governing body
of the government unit may levy additional taxes on the entire
net tax capacity of all taxable property of the government unit
for all or a part of the balance remaining payable. The taxes
levied under this subdivision must be assessed and extended as a
tax upon the taxable property by the county auditor for the next
calendar year, free from any limit of rate or amount imposed by
law or charter. The tax must be collected and remitted in the
same manner as other general taxes of the government unit.
Subd. 4. [ALTERNATE LEVY.] Instead of levying taxes on all
taxable property under subdivision 3, the governing body of the
government unit may elect to levy taxes upon the net tax
capacity of all taxable property, except agricultural property,
and upon only 25 percent of the net tax capacity of all
agricultural property, in that part of the government unit
located in the district for all or a part of the amount payable
to the board. If the levy is for only part of the amount
payable to the board, the governing body may levy additional
taxes on the entire net tax capacity of all the property,
including agricultural property, for all or a part of the
balance. The taxes must be assessed and extended as a tax upon
the taxable property by the county auditor for the next calendar
year, free from any limit of rate or amount imposed by law or
charter, and must be collected and remitted in the same manner
as other general taxes of the government unit. In computing the
tax capacity under this subdivision, the county auditor must
include only 25 percent of the net tax capacity of all taxable
agricultural property and 100 percent of the net tax capacity of
all other taxable property in that part of the government unit
located within the district and, in spreading the levy, the
auditor must apply the tax rate upon the same percentages of
agricultural and nonagricultural taxable property. If the
government unit elects to levy taxes under this subdivision and
any of the taxable agricultural property is reclassified so as
to no longer qualify as agricultural property, it is subject to
additional taxes. The additional taxes must be in an amount
which, together with any additional taxes previously levied and
the estimated collection of additional taxes subsequently levied
on any other reclassified property, is determined by the
governing body of the government unit to be at least sufficient
to reimburse each other government unit for any excess current
costs reallocated to it as a result of the board deferring any
current cost under section 8 on account of the difference
between the amount of the current costs initially allocated to
each government unit based on the total net tax capacity of all
taxable property in the district and the amount of the current
costs reallocated to each government unit based on 25 percent of
the net tax capacity of agricultural property and 100 percent of
the net tax capacity of all other taxable property in the
district. Any reimbursement must be made on terms which the
board determines to be just and reasonable. These additional
taxes may be levied in any greater amount as the governing body
of the government unit determines to be appropriate, but the
total amount of the additional taxes must not exceed the
difference between:
(1) the total amount of taxes that would have been levied
upon the reclassified property to help pay current costs charged
in each year to the government unit by the board if that part of
the costs, if any, initially allocated by the board solely on
the basis of 100 percent of the net tax capacity of all taxable
property in the district and then reallocated on the basis of
inclusion of only 25 percent of the net tax capacity of
agricultural property in the district was not reallocated and if
the amount of taxes levied by the government unit each year
under this subdivision to pay current costs had been based on
the initial allocation and had been imposed upon 100 percent of
the net tax capacity of all taxable property, including
agricultural property, in that part of the government unit
located in the district; and
(2) the amount of taxes levied each year under this
subdivision upon reclassified property, plus interest on the
cumulative amount of the difference accruing each year at the
approximate average annual rate borne by bonds issued by the
board and outstanding at the beginning of the year or, if no
bonds are then outstanding, at a rate of interest which may be
determined by the board, but not exceeding the maximum rate of
interest that may then be paid on bonds issued by the board.
The additional taxes are a lien upon the reclassified property
assessed in the same manner and for the same duration as all
other ad valorem taxes levied upon the property. The additional
taxes must be extended against the reclassified property on the
tax list for the current year and must be collected and remitted
in the same manner as other general taxes of the government
unit. No penalties or additional interest may be levied on the
additional taxes if timely paid.
Subd. 5. [DEBT LIMIT.] Any ad valorem taxes levied under
subdivision 3, by the governing body of a government unit to pay
any sums charged to it by the board pursuant to this article are
not subject to, or counted toward, any limit imposed by law on
the levy of taxes upon taxable property within any governmental
unit.
Subd. 6. [DEFICIENCY TAX LEVIES.] If the local government
unit fails to make a payment to the board when due, the board
may certify to the Douglas county auditor the amount required
for payment, with interest at not more than the maximum rate per
year authorized at that time on assessments under Minnesota
Statutes, section 429.061, subdivision 2. The auditor must levy
and extend the amount as a tax upon all taxable property in that
part of the government unit located in the district, for the
next calendar year, free from any limits imposed by law or
charter. The tax must be collected in the same manner as other
general taxes of the government unit, and the proceeds, when
collected, shall be paid by the county treasurer to the
treasurer of the board and credited to the government unit for
which the tax was levied.
Sec. 10. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.]
Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC
PROJECT.] Before the board orders any project involving the
acquisition or betterment of any interceptor or treatment works,
all or a part of the cost of which will be allocated to local
government units under section 8 as current costs, the board
must hold a public hearing on the proposed project following two
publications in a newspaper or newspapers having general
circulation in the district, stating the time and place of the
hearing, the general nature and location of the project, the
estimated total cost of acquisition and betterment, that portion
of costs estimated to be paid out of federal and state grants,
and that portion of costs estimated to be allocated to each
local government unit affected. The two publications must be a
week apart and the hearing must be at least three days after the
last publication. Not less than 45 days before the hearing,
notice must also be mailed to each clerk of all local government
units in the district, but failure to give mailed notice of any
defects in the notice does not invalidate the proceedings. The
project may include all or part of one or more interceptors or
treatment works. A hearing is not required with respect to a
project, no part of the costs of which are to be allocated to
local government units as the current cost of acquisition,
betterment, and debt service.
Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the
governing body of a local government unit in the district
proposes to assess against benefited property within units, all
or any part of the allocable costs of the project as provided in
subdivision 5, the governing body must, not less than ten days
before the hearing provided for in subdivision 1 mail a notice
of the hearing to the owner of each parcel within the area
proposed to be specially assessed and must also give one week's
published notice of the hearing. The notice of hearing must
contain the same information provided in the notice published by
the board under subdivision 1, and in addition, a description of
the area proposed to be assessed by the local government unit.
To give mailed notice, owners must be those shown to be on the
records of the county auditor or, in a county where tax
statements are mailed by the county treasurer, on the records of
the county treasurer; but other appropriate records may be used
for this purpose. However, for properties that are tax exempt
or subject to taxation on a gross earnings basis and are not
listed on the records of the county auditor or the county
treasurer, the owners may be ascertained by any practicable
means and mailed notice must be given to them. Failure to give
mailed notice or any defects in the notice does not invalidate
the proceedings of the board or the local governing body.
Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before
adoption of the resolution calling for the hearing, the board
shall get from the district engineer, or other competent person
of the board's selection, a preliminary report advising whether
the proposed project is feasible, necessary, and cost-effective,
and whether it should best be made as proposed or in connection
with another project, and the estimated costs of the project as
recommended. No error or omission in the report invalidates the
proceeding. The board may also take steps before the hearing
that will, in its judgment, provide helpful information in
determining the desirability and feasibility of the project
including, but not limited to, preparation of plans and
specifications and advertisement for bids. The hearing may be
adjourned from time to time and a resolution ordering the
project may be adopted at any time within six months after the
date of hearing. In ordering the project, the board may reduce
but not increase the extent of the project as stated in the
notice of hearing, unless another hearing is held, and must find
that the project as ordered is in accordance with the
comprehensive plan and program adopted by the board under
section 4.
Subd. 4. [EMERGENCY ACTION.] If the board by resolution
adopted by the affirmative vote of not less than two-thirds of
its members determines that an emergency exists requiring the
immediate purchase of materials or supplies or the making of
emergency repairs, it may order the purchase of the supplies and
materials and the making of the repairs before any hearing
required under this section. But the board must set as early a
date as practicable for that hearing at the time it declares the
emergency. All other provisions of this section must be
followed in giving notice of and conducting a hearing. This
subdivision does not prevent the board or its agents from
purchasing maintenance supplies or incurring maintenance costs
without regard to the requirements of this section.
Subd. 5. [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A
local government unit may specially assess all or part of the
costs of acquisition and betterment of any project ordered by
the board under this section. A special assessment must be
levied in accordance with Minnesota Statutes, sections 429.051
to 429.081, except as otherwise provided in this subdivision.
No other provisions of Minnesota Statutes, chapter 429, apply.
For purposes of levying special assessments, the hearing on the
project required in subdivision 1 must serve as the hearing on
the making of the original improvement provided for by Minnesota
Statutes, section 429.051. The area assessed may be less than
but must not exceed the area proposed to be assessed as stated
in the notice of hearing on the project provided for in
subdivision 2. To determine the allocable cost of the project
to the local government units, the government unit may adopt one
of the procedures in paragraph (a) or (b).
(a) At any time after a contract is let for the project,
the local government unit may get from the board a current
written estimate, on the basis of historical and reasonably
projected data, of that part of the total cost of acquisition
and betterment of the project or of some part of the project
that will be allocated to the local government unit and the
number of years over which such costs will be allocated as
current costs of acquisition, betterment, and debt service under
section 8. The board is not bound by this estimate for
allocating the costs of the project to local government units.
(b) The governing body may get from the board a written
statement showing, for the prior period that the governing body
designates, that part of the costs previously allocated to the
local government unit as current costs of acquisition,
betterment, and debt service only, of all or any part of the
project designated by the governing body. In addition to the
allocable costs, the local government unit may include in the
total expense, as a basis for levying assessments, all other
expenses incurred directly by the local government unit in
connection with the project. Special assessments levied by the
government unit with respect to previously allocated costs
ascertained under this paragraph are payable in equal annual
installments extending over a period not exceeding by more than
one year the number of years that the costs have been allocated
to the local government unit or the estimated useful life of the
project, or part of the project, whichever number of years is
the lesser. No limit is placed on the number of times the
governing body of a local government unit may assess the
previously allocated costs not previously assessed by the
government unit. The power to specially assess provided for in
this section is in addition and supplemental to all other powers
of local government units to levy special assessments.
Sec. 11. [INITIAL COSTS.]
Subdivision 1. [CONTRIBUTIONS OR ADVANCES FROM LOCAL
GOVERNMENT UNITS.] The board may, at the time it considers
necessary and proper, request from a local government unit
necessary money to defray the costs of any obligations assumed
under section 5 and the costs of administration, operation, and
maintenance. Before making a request, the board must, by formal
resolution, determine the necessity for the money, setting forth
the purposes for which the money is needed and the estimated
amount for each purpose. Upon receiving a request, the
governing body of each local government unit may provide for
payment of the amount requested as it considers fair and
reasonable. The money may be paid out of general revenue funds
or any other available funds of any local government unit and
its governing body thereof may levy taxes to provide funds, free
from any existing limit imposed by law or charter. Money may be
provided by government units with or without interest, but if
interest is charged it must not exceed five percent per year.
The board must credit the local government unit for the payments
in allocating current costs under section 8, on the terms and at
the times as are agreed to with the local government unit.
Subd. 2. [LIMITED TAX LEVY.] The board may levy ad valorem
taxes on all taxable property in the district to defray any of
the costs described in subdivision 1, provided the costs have
not been defrayed by contribution under subdivision 1. Before
certifying a levy to the county auditor, the board must
determine the need for the money to be derived from the levy by
formal resolution setting forth the purposes for which the tax
money will be used and the amount proposed to be used for each
purpose. In allocating current costs under section 8, the board
must credit the government units for taxes collected under the
levy made under this subdivision on the terms and at the time
the board considers fair and reasonable and on terms consistent
with section 8, subdivision 2.
Sec. 12. [BONDS CERTIFICATES AND OTHER OBLIGATIONS.]
Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF
INDEBTEDNESS.] (a) Before adopting its annual budget and in
anticipation of the collection of tax and other revenues
estimated and set forth by the board in the budget, the board
may by resolution, authorize the issuance, negotiation, and sale
in accordance with subdivision 5 in such form and manner and
upon such terms as it may determine of its negotiable general
obligation certificates of indebtedness in aggregate principal
amounts not exceeding 50 percent of the total amount of such tax
collections and other revenues and maturing not later than three
months after the close of the budget year in which issued.
Revenues listed in clauses (1) to (3) must not be anticipated
for this purpose:
(1) taxes already anticipated by the issuance of
certificates under subdivision 2;
(2) deficiency taxes levied pursuant to this subdivision;
and
(3) taxes levied for the payment of certificates issued
pursuant to subdivision 3.
(b) The proceeds of the sale of the certificates must be
used only for the purposes for which tax collections and other
revenues are to be expended under the budget.
(c) All tax collections and other revenues included in the
budget for the budget year, after the expenditures of tax
collections and other revenues in accordance with the budget,
must be irrevocably pledged and appropriated to a special fund
to pay the principal and interest on the certificates when due.
(d) If for any reason the tax collections and other
revenues are insufficient to pay the certificates and interest
when due, the board must levy a tax in the amount of the
deficiency on all taxable property in the district and must
appropriate this amount when received to the special fund.
Subd. 2. [TAX LEVY ANTICIPATION CERTIFICATES OF
INDEBTEDNESS.] After a tax is levied by the board under section
11, subdivision 2, and certified to the county auditors in
anticipation of the collection of the tax, if the tax has not
been anticipated by the issuance of certificates under
subdivision 1, the board may, by resolution, authorize the
issuance, negotiation, and sale in accordance with subdivision 5
in the form and manner and on the terms and conditions as it
determines its negotiable general obligation tax levy
anticipation certificates of indebtedness in aggregate principal
amounts not exceeding 50 percent of the uncollected tax for
which no penalty for nonpayment or delinquency has been
attached. The certificates must mature not later than April 1
in the year after the year in which the tax is collectible. The
proceeds of the tax in anticipation of which the certificates
were issued and other funds that may become available must be
applied to the extent necessary to repay the certificates.
Subd. 3. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in
any budget year the receipts of tax and other revenues for some
unforeseen cause become insufficient to pay the board's current
expenses, or if any calamity or other public emergency subjects
it to the necessity of making extraordinary expenditures, the
board may by resolution authorize the issuance, negotiation, and
sale in accordance with subdivision 5 in the form and manner and
on the terms and conditions as it may determine of its
negotiable general obligation certificates of indebtedness in an
amount sufficient to meet the deficiency, and the board must
levy on all taxable property in the district a tax sufficient to
pay the certificates and interest and shall appropriate all
collections of the tax to a special fund created for the payment
of the certificates and interest.
Subd. 4. [GENERAL OBLIGATION BONDS.] The board may by
resolution authorize the issuance of general obligation bonds
maturing serially in one or more annual or semiannual
installments for the acquisition or betterment of any part of
the district disposal system, including but not limited to, the
payment of interest during construction and for a reasonable
period thereafter, or for the refunding of outstanding bonds,
certificates of indebtedness, or judgments. The board must
pledge its full faith and credit and taxing power for the
payment of the bonds and shall provide for the issuance and sale
and for the security of the bonds in the manner provided in
Minnesota Statutes, chapter 475, and must have the same powers
and duties as a municipality issuing bonds under that law. An
election is not required to authorize the issuance of bonds and
the debt limit of Minnesota Statutes, chapter 475, do not apply
to the bonds. The board may also pledge for the payment of the
bonds and deduct from the amount of any tax levy required under
Minnesota Statutes, section 475.61, subdivision 1, any sums
receivable under section 9 or any state and federal grants
anticipated by the board and may covenant to refund the bonds if
and when and to the extent that for any reason the revenues,
together with other funds properly available and appropriated
for the purpose, are not sufficient to pay all principal and
interest due or about to become due; if the revenues have not
been anticipated by the issuance of certificates under
subdivision 1. All bonds that have been or shall hereafter be
issued and sold in conformity with the provisions of this
subdivision, and otherwise in conformity with law, are hereby
authorized, legalized, and validated.
Subd. 5. [MANNER OF SALE AND ISSUANCE OF
CERTIFICATES.] Certificates issued under subdivisions 1, 2, and
3 may be issued and sold by negotiation, without public sale,
and may be sold at a price equal to the percentage of their par
value, plus accrued interest, and bearing interest at the rate
or rates as may be determined by the board. No election is
required to authorize the issuance of certificates.
Certificates must bear the same rate of interest after maturity
as before and the full faith and credit and taxing power of the
board must be pledged to the payment of the certificates.
Sec. 13. [TAX LEVIES.]
The board may levy taxes to pay the bonds or other
obligations assumed by the district under section 5 and for debt
service of the district disposal system authorized in section 12
upon all taxable property within the district without limit of
rate or amount and without affecting the amount or rate of taxes
that may be levied by the board for other purposes or by any
local government unit in the district. No other provision of
law relating to debt limit shall restrict or in any way limit
the power of the board to issue the bonds and certificates
authorized in section 12. The board may also levy taxes as
provided in sections 9 and 11. The county auditor must annually
assess and extend upon the tax rolls the part of the taxes
levied by the board in each year that is certified to the
auditor by the board. The county treasurer must collect and
make settlement of the taxes with the treasurer of the board.
Sec. 14. [DEPOSITORIES.]
The board must from time to time designate one or more
national or state banks or trust companies authorized to do a
banking business as official depositories for money of the
board, and must require the treasurer to deposit all or a part
of the money in those institutions. The designation must be in
writing and must set forth all the terms and conditions on which
the deposits are made, and must be signed by the chair and
treasurer, and made a part of the minutes of the board. A
designated bank or trust company must qualify as a depository by
furnishing a corporate surety bond or collateral in the amount
required by Minnesota Statutes, section 118A.03. But, no bond
or collateral is required to secure any deposit insofar as it is
insured under federal law.
Sec. 15. [MONEY; ACCOUNTS AND INVESTMENTS.]
Subdivision 1. [RECEIPT AND APPLICATION.] All money
received by the board must be deposited or invested by the
treasurer and disposed of as the board directs in accordance
with its budget. But any money that has been pledged or
dedicated by the board to the payment of obligations or interest
on them or expenses incident to them, or for any other specific
purpose authorized by law, must be paid by the treasurer into
the fund to which they have been pledged.
Subd. 2. [FUNDS AND ACCOUNTS.] The board's treasurer must
establish funds and accounts as necessary or convenient to
handle the receipts and disbursements of the board in an orderly
fashion.
Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in
the board's funds and accounts may be deposited in the official
depositories of the board or invested as provided in this
subdivision. The amount not currently needed or required by law
to be kept in cash on deposit may be invested in obligations
authorized by law for the investment of municipal sinking
funds. The money may also be held under certificates of deposit
issued by any official depository of the board. All investments
by the board must conform to an investment policy adopted by the
board as amended from time to time.
Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds
issued by the board for the acquisition and betterment of the
district disposal system, and the use, other than investment, of
all money on hand in any sinking fund or funds of the board must
be governed by Minnesota Statutes, chapter 475, this article,
and the resolutions authorizing the issuance of the bonds. The
bond proceeds, when received, must be transferred to the
treasurer of the board for safekeeping, investment, and payment
of the costs for which they were issued.
Subd. 5. [AUDIT.] The board must provide for and pay the
cost of an independent annual audit of its official books and
records by the state auditor or a certified public accountant.
Sec. 16. [GENERAL POWERS OF BOARD.]
Subdivision 1. [ALL NECESSARY OR CONVENIENT POWERS.] The
board has powers necessary or convenient to discharge the duties
imposed upon it by law. The powers include those specified in
this article, but the express grant or enumeration of powers
does not limit the generality or scope of the grant of power in
this subdivision.
Subd. 2. [LAWSUITS.] The board may sue or be sued.
Subd. 3. [CONTRACTS.] The board may enter into any
contract necessary or proper for the exercise of its powers or
the accomplishment of its purposes.
Subd. 4. [RULES.] The board may adopt rules relating to
the board's responsibilities and may provide penalties not
exceeding the maximum penalty specified for a misdemeanor, and
the cost of prosecution may be added to the penalties imposed.
Any rule prescribing a penalty for violation must be published
at least once in a newspaper having general circulation in the
district. A violation may be prosecuted before any court in the
district having jurisdiction of misdemeanor, and every court has
jurisdiction of violations. A peace officer of any municipality
in the district may make arrests for violations committed
anywhere in the district in the manner and with the effect as
for violations of municipal ordinances or for statutory
misdemeanors. All fines collected must be deposited in the
treasury of the board, or may be allocated between the board and
the municipality in which the prosecution occurs on terms agreed
to by the board and the municipality.
Subd. 5. [GIFTS; GRANTS.] The board may accept gifts, may
apply for and accept grants or loans of money or other property
from the United States, the state, or any person for any of its
purposes, may enter into any agreement required to get the gift,
grant, loan, or other property; and may hold, use, and dispose
of money or property in accordance with the terms of the gift,
grant, loan or agreement. With respect to any loans or grants
of funds or real or personal property or other assistance from
any state or federal government or any agency or instrumentality
of the government, the board may contract to do and perform all
acts and things required as a condition or consideration under
state or federal law or rule or regulation, whether or not
included among the powers expressly granted to the board in this
article.
Subd. 6. [JOINT POWERS.] The board may act under Minnesota
Statutes, section 471.59, or any other appropriate law providing
for joint or cooperative action between government units.
Subd. 7. [RESEARCH; HEARINGS; INVESTIGATIONS; ADVISE.] The
board may conduct research studies and programs, collect and
analyze data, prepare reports, maps, charts, and tables, and
conduct all necessary hearings and investigations in connection
with the design, construction, and operation of the district
disposal system, and may advise and assist other government
units on system planning matters within the scope of its powers,
duties, and objectives, and may provide at the request of any
governmental unit other technical and administrative assistance
as the board considers appropriate for the government unit to
carry out the powers and duties vested in the government unit
under this article or imposed on or by the board.
Subd. 8. [EMPLOYEES; CONTRACTORS; INSURANCE.] The board
may employ on the terms it considers advisable, persons or firms
performing engineering, legal, or other services of a
professional nature; require any employee to get and file with
it an individual bond or fidelity insurance policy; and procure
insurance in the amounts it considers necessary against
liability of the board or its officers or both, for personal
injury or death and property damage or destruction, with the
force and effect stated in Minnesota Statutes, chapter 466, and
against risks of damage to or destruction of any of its
facilities, equipment, or other property as it considers
necessary.
Subd. 9. [PROPERTY.] The board may acquire by purchase,
lease, condemnation, gift, or grant, real or personal property
including positive and negative easements and water and air
rights, and it may construct, enlarge, improve, replace, repair,
maintain, and operate any interceptor, treatment works, or water
facility determined to be necessary or convenient for the
collection and disposal of sewage in the district. Any local
government unit and the commissioners of transportation and
natural resources may convey to or permit the use of these
facilities owned or controlled by the board, subject to the
rights of the holders of any bonds issued with respect to them
with or without compensation and without an election or approval
by any other government unit or agency. All powers conferred by
this subdivision may be exercised both within or outside the
district as may be necessary for the exercise by the board of
its powers or the accomplishment of its purposes. The board may
hold, lease, convey, or otherwise dispose of such property for
its purposes, upon the terms and in the manner it deems
advisable. Unless otherwise provided, the right to acquire
lands and property rights by condemnation must be exercised in
accordance with Minnesota Statutes, chapter 117, and must apply
to any property or interest in property owned by any local
government unit. Property devoted to an actual public use at
the time, or held to be devoted to such use within a reasonable
time, must not be so acquired unless a court of competent
jurisdiction determines that the use proposed by the board is
paramount. In case of property in actual public use, the board
may take possession of any property of which condemnation
proceedings have begun at any time after the issuance of a court
order appointing commissioners for its condemnation.
Subd. 10. [RIGHTS-OF-WAY.] The board may construct or
maintain its systems or facilities in, along, on, under, over,
or through public waters, streets, bridges, viaducts, and other
public right-of-way without first getting a franchise from any
county or local government unit having jurisdiction over them.
The facilities must be constructed and maintained in accordance
with the ordinances and resolutions of the county or government
unit relating to construction, installation, and maintenance of
similar facilities on public properties and must not
unnecessarily obstruct the public use of the rights-of-way.
Subd. 11. [DISPOSAL OF PROPERTY.] The board may sell,
lease, or otherwise dispose of any real or personal property
acquired by it that is no longer required to accomplish its
purposes. The property may be sold in the manner provided by
Minnesota Statutes, section 469.065, insofar as practical. The
board may give notice of sale it considers appropriate. When
the board determines that any property or any part of the
district disposal system that has been acquired from a local
government unit without compensation is no longer required, but
is required as a local facility by the government unit from
which is was acquired, the board may by resolution transfer it
to the government unit.
Subd. 12. [JOINT OPERATIONS.] The board may contract with
the United States or an agency of it, any state or agency of it,
or any regional public planning body in the state with
jurisdiction over any part of the district, or any other
municipal or public corporation, or governmental subdivision in
any state, for the joint use of any facility owned by the board
or the entity, for the operation by the entity of any system or
facility of the board, or for the performance on the board's
behalf of any service including, but not limited to, planning,
on the terms that may be agreed to by the contracting parties.
Unless designated by the board as a local sanitary sewer
facility, any treatment works or interceptor jointly used, or
operated on behalf of the board, as provided in this
subdivision, must be considered to be operated by the board to
include the facilities in the district disposal system.
Sec. 17. [LOCAL FACILITIES.]
Subdivision 1. [SANITARY SEWER FACILITIES.] Except as
otherwise provided in this article, local government units must
retain responsibility for the planning, design, acquisition,
betterment, operation, administration, and maintenance of all
local sanitary sewer facilities as provided by law.
Subd. 2. [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY
SEWER FACILITIES.] The board must upon request of any government
unit assume, either alone or jointly with the local government
unit, all or any part of the responsibility of the local
government unit described in subdivision 1. Except as provided
in subdivision 4 and to exercise the responsibility, the board
has all the powers and duties elsewhere conferred in this
article with the same force and effect as if the local sanitary
sewer facilities were a part of the district disposal system.
Subd. 3. [WATER AND STREET FACILITIES.] The board may, on
request of any governmental unit, enter into an agreement under
which the board may assume, either alone or jointly with such
unit, the responsibility to get and construct water and street
facilities in conjunction with any project for the acquisition
or betterment of the district disposal system or any project
undertaken by the board under subdivision 2. Except as provided
in subdivision 4, and to exercise any responsibilities under
this subdivision, the board has all the powers and duties
elsewhere conferred in this article with the same force and
effect as if the water or street facilities were a part of the
district disposal system.
Subd. 4. [ALLOCATION OF CURRENT COSTS.] All current costs
attributable to responsibilities assumed by the board over local
sanitary sewer facilities and water and street facilities as
provided in this section must be allocated solely to the local
unit for or with whom the responsibilities are assumed on the
terms and over a period as the board determines to be equitable
and in the best interest of the district. If two or more
government units form a region in accordance with this section
all or part of the current costs attributable to the region
must, at the request of its joint board, be allocated to the
region and provided in the agreement establishing the region.
Subd. 5. [PART OF DISTRICT SYSTEM.] This section or any
other part of this article does not prevent the board from
including, where appropriate, treatment works or interceptors,
previously designated or treated as local sanitary sewer
facilities, as a part of the district disposal system.
Sec. 18. [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE
DISTRICT.]
The board may contract with the United States or any agency
of it, any state or any agency of it, or any municipal or public
corporation, governmental subdivision or agency, or political
subdivision in any state, outside the jurisdiction of the board,
for furnishing to the entities any services which the board may
furnish to local government units in the district under this
article including, but not limited to, planning for and the
acquisition, betterment, operation, administration, and
maintenance of any or all interceptors, treatment works, and
local sanitary sewer facilities; if the board may further
include as one of the terms of the contract that the entity also
pay to the board an amount as may be agreed upon as a reasonable
estimate of the proportionate share properly allocable to the
entity of costs of acquisition, betterment, and debt service
previously allocated to local government units in the district.
When the payments are made by the entities to the board, they
must be applied in reduction of the total amount of costs
allocated after that to each local government unit in the
district, on the equitable basis the board considers to be in
the best interest of the district. Any municipality in the
state may enter into the contract and perform all acts and
things required as a condition or consideration for it
consistent with the purpose of this article, whether or not
included among the powers otherwise granted to the municipality
by law or charter.
Sec. 19. [CONSTRUCTION, MATERIALS, SUPPLIES, EQUIPMENT;
CONTRACTS.]
Subdivision 1. [PLANS AND SPECIFICATIONS.] When the board
orders a project involving the acquisition or betterment of a
part of the district disposal system, it must cause plans and
specifications of this project to be made, or if previously
made, to be modified, if necessary, and to be approved by the
agency if required, and after any required approval by the
agency, one or more contracts for work and materials called for
by the plans and specification may be awarded as provided in
this section.
Subd. 2. [UNIFORM MUNICIPAL CONTRACTING LAW.] All
contracts for work to be done or for purchases of materials,
supplies, or equipment must be done in accordance with Minnesota
Statutes, section 471.345.
Sec. 20. [ANNEXATION, WITHDRAWAL OF TERRITORY.]
Subdivision 1. [ANNEXATION.] Any municipality in Douglas
county, upon resolution adopted by a four-fifths vote of its
governing body, may petition the board for annexation to the
district of the area then comprising the municipality or any
part of it and, if accepted by the board, the area must be
considered annexed to the district and subject to the
jurisdiction of the board under the terms and provisions of this
article. The territory so annexed is subject to taxation and
assessment under this article and is subject to taxation by the
board like other property in the district for the payment of
principal and interest thereafter becoming due on general
obligations of the board, whether authorized or issued before or
after the annexation. The board may condition approval of the
annexation upon the contribution, by or on behalf of the
municipality petitioning for annexation, to the board of an
amount as may be agreed upon as being a reasonable estimate of
the proportionate share, properly allocable to the municipality,
of cost or acquisition, betterment, and debt service previously
allocated to local government units in the district, on the
terms as may be agreed upon and in place of or in addition to
further conditions as the board deems in the best interests of
the district. Notwithstanding any other provisions of this
article to the contrary, the conditions established for
annexation may include the requirement that the annexed
municipality pay for, contract for, and oversee the construction
of local sanitary sewer facilities and interceptor sewers. To
pay the contribution or satisfy any other condition established
by the board, the municipality petitioning annexation may
exercise the powers conferred in section 9. When the
contributions are made by the municipality to the board, they
must be applied to reduce the total amount of costs thereafter
allocated to each local government unit in the district, on the
equitable basis as the board considers to be in the best
interests of the district, applying so far as practicable and
appropriate the criteria set forth in section 8, subdivision 2.
On annexation of the territory, the secretary of the board must
certify to the auditor and treasurer of the county in which the
municipality is located the fact of the annexation and a legal
description of the territory annexed.
Subd. 2. [WITHDRAWALS.] A municipality may withdraw from
the district by resolution of its governing body. The
municipality must notify the board of the district of the
withdrawal by providing a copy of the resolution at least two
years in advance of the proposed withdrawal. Unless the
district and the withdrawing member agree otherwise by action of
their governing bodies, the taxable property of the withdrawing
member is subject to its required property tax levies under this
article for two taxes payable years following the notification
of the withdrawal and the withdrawing member retains any rights,
obligations, and liabilities obtained or incurred during its
participation.
Sec. 21. [PROPERTY EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased,
controlled, used, or occupied by the sanitary sewer board for
any purpose under this article are declared to be acquired,
owned, leased, controlled, used, and occupied for public,
governmental, and municipal purposes, and are exempt from
taxation by the state or any political subdivision of the state;
but the properties are subject to special assessments levied by
a political subdivision for a local improvement in amounts
proportionate to and not exceeding the special benefit received
by the properties from the improvement. No possible use of any
of the properties in any manner different from their use as part
of the disposal system at the time may be considered in
determining the special benefit received by the properties. All
of the assessments are subject to final approval by the board,
whose determination of the benefits is conclusive upon the
political subdivision levying the assessment.
Sec. 22. [RELATION TO EXISTING LAWS.]
This article prevails over any law or charter inconsistent
with it. The powers conferred on the board under this article
do not diminish or supersede the powers conferred on the agency
by Minnesota Statutes, chapters 115 and 116.
Sec. 23. [APPLICATION; EFFECTIVE DATE; LOCAL APPROVAL; OPT
IN OR OUT.]
Subdivision 1. [APPLICATION.] This article applies to the
townships of Brandon, Carlos, LaGrand, Leaf Valley, Miltona, and
Moe, all in Douglas county.
Subd. 2. [EFFECTIVE DATE; LOCAL APPROVAL.] This article is
effective the day after a fourth township of the six listed in
subdivision 1 has timely completed compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3. For any other
township listed in subdivision 1, the article is effective the
day after timely completing compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3. A township listed in
subdivision 1 that fails to timely complete compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3, may
petition for annexation to the district at a later time, as
provided in this article.
ARTICLE 10
TAX INCREMENT FINANCING
Section 1. Minnesota Statutes 2002, section 469.174,
subdivision 3, is amended to read:
Subd. 3. [BONDS.] (a) "Bonds" means any bonds, including
refunding bonds, notes, interim certificates, debentures,
interfund loans or advances, or other obligations issued:
(1) by an authority under section 469.178; or which were
issued
(2) in aid of a project under any other law, except revenue
bonds issued pursuant to sections 469.152 to 469.165, prior to
August 1, 1979.
(b) Bonds or other obligations include:
(1) refunding bonds;
(2) notes;
(3) interim certificates;
(4) debentures; and
(5) interfund loans or advances qualifying under section
469.178, subdivision 7.
[EFFECTIVE DATE.] This section is effective at the same
time as provided by Laws 2001, First Special Session chapter 5,
article 15, section 3.
Sec. 2. Minnesota Statutes 2002, section 469.174,
subdivision 6, is amended to read:
Subd. 6. [MUNICIPALITY.] "Municipality" means any the
city, however organized, and with respect to in which the
district is located, with the following exceptions:
(1) for a project undertaken pursuant to sections 469.152
to 469.165, "municipality" has the meaning given in sections
469.152 to 469.165, and with respect to; and
(2) for a project undertaken pursuant to sections 469.142
to 469.151, or a county or multicounty project undertaken
pursuant to sections 469.004 to 469.008, "municipality" also
includes any means the county in which the district is located.
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification was made after July 31,
1979.
Sec. 3. Minnesota Statutes 2002, section 469.174,
subdivision 10, is amended to read:
Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment
district" means a type of tax increment financing district
consisting of a project, or portions of a project, within which
the authority finds by resolution that one or more of the
following conditions, reasonably distributed throughout the
district, exists:
(1) parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, paved or
gravel parking lots, or other similar structures and more than
50 percent of the buildings, not including outbuildings, are
structurally substandard to a degree requiring substantial
renovation or clearance; or
(2) the property consists of vacant, unused, underused,
inappropriately used, or infrequently used railyards, rail
storage facilities, or excessive or vacated railroad
rights-of-way; or
(3) tank facilities, or property whose immediately previous
use was for tank facilities, as defined in section 115C.02,
subdivision 15, if the tank facilities:
(i) have or had a capacity of more than 1,000,000 gallons;
(ii) are located adjacent to rail facilities; and
(iii) have been removed or are unused, underused,
inappropriately used, or infrequently used.
(b) For purposes of this subdivision, "structurally
substandard" shall mean containing defects in structural
elements or a combination of deficiencies in essential utilities
and facilities, light and ventilation, fire protection including
adequate egress, layout and condition of interior partitions, or
similar factors, which defects or deficiencies are of sufficient
total significance to justify substantial renovation or
clearance.
(c) A building is not structurally substandard if it is in
compliance with the building code applicable to new buildings or
could be modified to satisfy the building code at a cost of less
than 15 percent of the cost of constructing a new structure of
the same square footage and type on the site. The municipality
may find that a building is not disqualified as structurally
substandard under the preceding sentence on the basis of
reasonably available evidence, such as the size, type, and age
of the building, the average cost of plumbing, electrical, or
structural repairs, or other similar reliable evidence. The
municipality may not make such a determination without an
interior inspection of the property, but need not have an
independent, expert appraisal prepared of the cost of repair and
rehabilitation of the building. An interior inspection of the
property is not required, if the municipality finds that (1) the
municipality or authority is unable to gain access to the
property after using its best efforts to obtain permission from
the party that owns or controls the property; and (2) the
evidence otherwise supports a reasonable conclusion that the
building is structurally substandard. Items of evidence that
support such a conclusion include recent fire or police
inspections, on-site property tax appraisals or housing
inspections, exterior evidence of deterioration, or other
similar reliable evidence. Written documentation of the
findings and reasons why an interior inspection was not
conducted must be made and retained under section 469.175,
subdivision 3, clause (1). Failure of a building to be
disqualified under the provisions of this paragraph is a
necessary, but not a sufficient, condition to determining that
the building is substandard.
(d) A parcel is deemed to be occupied by a structurally
substandard building for purposes of the finding under paragraph
(a) if all of the following conditions are met:
(1) the parcel was occupied by a substandard building
within three years of the filing of the request for
certification of the parcel as part of the district with the
county auditor;
(2) the substandard building was demolished or removed by
the authority or the demolition or removal was financed by the
authority or was done by a developer under a development
agreement with the authority;
(3) the authority found by resolution before the demolition
or removal that the parcel was occupied by a structurally
substandard building and that after demolition and clearance the
authority intended to include the parcel within a district; and
(4) upon filing the request for certification of the tax
capacity of the parcel as part of a district, the authority
notifies the county auditor that the original tax capacity of
the parcel must be adjusted as provided by section 469.177,
subdivision 1, paragraph (h) (f).
(e) For purposes of this subdivision, a parcel is not
occupied by buildings, streets, utilities, paved or gravel
parking lots, or other similar structures unless 15 percent of
the area of the parcel contains buildings, streets, utilities,
paved or gravel parking lots, or other similar structures.
(f) For districts consisting of two or more noncontiguous
areas, each area must qualify as a redevelopment district under
paragraph (a) to be included in the district, and the entire
area of the district must satisfy paragraph (a).
[EFFECTIVE DATE.] The amendment to Minnesota Statutes,
section 469.174, subdivision 10, paragraph (c), confirms the
intent of the legislature with regard to the original provisions
of the language contained in Minnesota Statutes 2002, section
469.174, subdivision 10, paragraph (c), and is retroactive to
the effective date of the original language. The amendment to
Minnesota Statutes, section 469.174, subdivision 10, paragraph
(d), is effective for districts for which the request for
certification was received by the county after June 30, 2002.
Sec. 4. Minnesota Statutes 2002, section 469.174,
subdivision 25, is amended to read:
Subd. 25. [INCREMENT.] "Increment," "tax increment," "tax
increment revenues," "revenues derived from tax increment," and
other similar terms for a district include:
(1) taxes paid by the captured net tax capacity, but
excluding any excess taxes, as computed under section 469.177;
(2) the proceeds from the sale or lease of property,
tangible or intangible, purchased by the authority with tax
increments;
(3) repayments of principal and interest received on loans
or other advances made by the authority with tax increments; and
(4) interest or other investment earnings on or from tax
increments.
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification was made after June 30,
1982, and payments of principal and interest received on loans
or other advances that were made after June 30, 1997.
Sec. 5. Minnesota Statutes 2002, section 469.174, is
amended by adding a subdivision to read:
Subd. 29. [QUALIFIED HOUSING DISTRICT.] "Qualified housing
district" means:
(1) a housing district for a residential rental project or
projects in which the only properties receiving assistance from
revenues derived from tax increments from the district meet the
rent restriction requirements and the low-income occupancy test
for a qualified low-income housing project under section 42(g)
of the Internal Revenue Code of 1986, as amended through
December 31, 2002, regardless of whether the project actually
receives a low-income housing credit; or
(2) a housing district for a single-family homeownership
project or projects, if 95 percent or more of the homes
receiving assistance from tax increments from the district are
purchased by qualified purchasers. A qualified purchaser means
the first purchaser of a home after the tax increment assistance
is provided whose income is at or below 85 percent of the median
gross income for a family of the same size as the purchaser.
Median gross income is the greater of (i) area median gross
income, or (ii) the statewide median gross income, as determined
by the secretary of Housing and Urban Development.
[EFFECTIVE DATE.] This section applies to all districts for
which the request for certification was made on or after January
1, 2002, and to all districts to which the definition of
qualified housing districts under Minnesota Statutes 2000,
section 273.1399, applied.
Sec. 6. Minnesota Statutes 2002, section 469.175,
subdivision 1, is amended to read:
Subdivision 1. [TAX INCREMENT FINANCING PLAN.] A tax
increment financing plan shall contain:
(1) a statement of objectives of an authority for the
improvement of a project;
(2) a statement as to the development program for the
project, including the property within the project, if any, that
the authority intends to acquire;
(3) a list of any development activities that the plan
proposes to take place within the project, for which contracts
have been entered into at the time of the preparation of the
plan, including the names of the parties to the contract, the
activity governed by the contract, the cost stated in the
contract, and the expected date of completion of that activity;
(4) identification or description of the type of any other
specific development reasonably expected to take place within
the project, and the date when the development is likely to
occur;
(5) estimates of the following:
(i) cost of the project, including administration
administrative expenses, except that if part of the cost of the
project is paid or financed with increment from the tax
increment financing district, the tax increment financing plan
for the district must contain an estimate of the amount of the
cost of the project, including administrative expenses, that
will be paid or financed with tax increments from the district;
(ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public
costs;
(iv) the most recent net tax capacity of taxable real
property within the tax increment financing district and within
any subdistrict;
(v) the estimated captured net tax capacity of the tax
increment financing district at completion; and
(vi) the duration of the tax increment financing district's
and any subdistrict's existence;
(6) statements of the authority's alternate estimates of
the impact of tax increment financing on the net tax capacities
of all taxing jurisdictions in which the tax increment financing
district is located in whole or in part. For purposes of one
statement, the authority shall assume that the estimated
captured net tax capacity would be available to the taxing
jurisdictions without creation of the district, and for purposes
of the second statement, the authority shall assume that none of
the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the district or
subdistrict;
(7) identification and description of studies and analyses
used to make the determination set forth in subdivision 3,
clause (2); and
(8) identification of all parcels to be included in the
district or any subdistrict.
[EFFECTIVE DATE.] This section applies to districts for
which the request for certification was made after July 31,
1979, and is effective for tax increment financing plans and
modifications approved after June 30, 2003.
Sec. 7. Minnesota Statutes 2002, section 469.175,
subdivision 3, is amended to read:
Subd. 3. [MUNICIPALITY APPROVAL.] (a) A county auditor
shall not certify the original net tax capacity of a tax
increment financing district until the tax increment financing
plan proposed for that district has been approved by the
municipality in which the district is located. If an authority
that proposes to establish a tax increment financing district
and the municipality are not the same, the authority shall apply
to the municipality in which the district is proposed to be
located and shall obtain the approval of its tax increment
financing plan by the municipality before the authority may use
tax increment financing. The municipality shall approve the tax
increment financing plan only after a public hearing thereon
after published notice in a newspaper of general circulation in
the municipality at least once not less than ten days nor more
than 30 days prior to the date of the hearing. The published
notice must include a map of the area of the district from which
increments may be collected and, if the project area includes
additional area, a map of the project area in which the
increments may be expended. The hearing may be held before or
after the approval or creation of the project or it may be held
in conjunction with a hearing to approve the project.
(b) Before or at the time of approval of the tax increment
financing plan, the municipality shall make the following
findings, and shall set forth in writing the reasons and
supporting facts for each determination:
(1) that the proposed tax increment financing district is a
redevelopment district, a renewal or renovation district, a
housing district, a soils condition district, or an economic
development district; if the proposed district is a
redevelopment district or a renewal or renovation district, the
reasons and supporting facts for the determination that the
district meets the criteria of section 469.174, subdivision 10,
paragraph (a), clauses (1) and (2), or subdivision 10a, must be
documented in writing and retained and made available to the
public by the authority until the district has been terminated;
(2) that the proposed development or redevelopment, in the
opinion of the municipality,:
(i) the proposed development or redevelopment would not
reasonably be expected to occur solely through private
investment within the reasonably foreseeable future; and that
(ii) the increased market value of the site that could
reasonably be expected to occur without the use of tax increment
financing would be less than the increase in the market value
estimated to result from the proposed development after
subtracting the present value of the projected tax increments
for the maximum duration of the district permitted by the plan.
The requirements of this clause item do not apply if the
district is a qualified housing district, as defined in section
273.1399, subdivision 1;
(3) that the tax increment financing plan conforms to the
general plan for the development or redevelopment of the
municipality as a whole;
(4) that the tax increment financing plan will afford
maximum opportunity, consistent with the sound needs of the
municipality as a whole, for the development or redevelopment of
the project by private enterprise;
(5) that the municipality elects the method of tax
increment computation set forth in section 469.177, subdivision
3, clause (b), if applicable.
(c) When the municipality and the authority are not the
same, the municipality shall approve or disapprove the tax
increment financing plan within 60 days of submission by the
authority. When the municipality and the authority are not the
same, the municipality may not amend or modify a tax increment
financing plan except as proposed by the authority pursuant to
subdivision 4. Once approved, the determination of the
authority to undertake the project through the use of tax
increment financing and the resolution of the governing body
shall be conclusive of the findings therein and of the public
need for the financing.
(d) For a district that is subject to the requirements of
paragraph (b), clause (2), item (ii), the municipality's
statement of reasons and supporting facts must include all of
the following:
(1) an estimate of the amount by which the market value of
the site will increase without the use of tax increment
financing;
(2) an estimate of the increase in the market value that
will result from the development or redevelopment to be assisted
with tax increment financing; and
(3) the present value of the projected tax increments for
the maximum duration of the district permitted by the tax
increment financing plan.
(e) For purposes of this subdivision, "site" means the
parcels on which the development or redevelopment to be assisted
with tax increment financing will be located.
[EFFECTIVE DATE.] This section is effective for
determinations made after June 30, 2003, except the provisions
of paragraph (e) apply to requests for certification of tax
increment districts made after June 30, 1995.
Sec. 8. Minnesota Statutes 2002, section 469.175,
subdivision 4, is amended to read:
Subd. 4. [MODIFICATION OF PLAN.] (a) A tax increment
financing plan may be modified by an authority, provided that.
(b) The authority may make the following modifications only
upon the notice and after the discussion, public hearing, and
findings required for approval of the original plan:
(1) any reduction or enlargement of geographic area of the
project or tax increment financing district, that does not meet
the requirements of paragraph (e);
(2) increase in amount of bonded indebtedness to be
incurred, including;
(3) a determination to capitalize interest on the debt if
that determination was not a part of the original plan, or to
increase or decrease the amount of interest on the debt to be
capitalized,;
(4) increase in the portion of the captured net tax
capacity to be retained by the authority,;
(5) increase in total estimated tax increment
expenditures the estimate of the cost of the project, including
administrative expenses, that will be paid or financed with tax
increment from the district; or
(6) designation of additional property to be acquired by
the authority shall be approved upon the notice and after the
discussion, public hearing, and findings required for approval
of the original plan; provided that.
(c) If an authority changes the type of district from
housing, redevelopment, or economic development to another type
of district, this change shall is not be considered a
modification but shall require requires the authority to follow
the procedure set forth in sections 469.174 to 469.179 for
adoption of a new plan, including certification of the net tax
capacity of the district by the county auditor.
(d) If a redevelopment district or a renewal and renovation
district is enlarged, the reasons and supporting facts for the
determination that the addition to the district meets the
criteria of section 469.174, subdivision 10, paragraph (a),
clauses (1) and (2), or subdivision 10a, must be documented.
(e) The requirements of this paragraph (b) do not apply if
(1) the only modification is elimination of parcels from the
project or district and (2)(A) the current net tax capacity of
the parcels eliminated from the district equals or exceeds the
net tax capacity of those parcels in the district's original net
tax capacity or (B) the authority agrees that, notwithstanding
section 469.177, subdivision 1, the original net tax capacity
will be reduced by no more than the current net tax capacity of
the parcels eliminated from the district. The authority must
notify the county auditor of any modification that reduces or
enlarges the geographic area of a district or a project area.
(b) (f) The geographic area of a tax increment financing
district may be reduced, but shall not be enlarged after five
years following the date of certification of the original net
tax capacity by the county auditor or after August 1, 1984, for
tax increment financing districts authorized prior to August 1,
1979.
[EFFECTIVE DATE.] This section applies to districts for
which the request for certification was made after June 30,
2003. The development authority may elect to have this section
apply to a tax increment financing plan or modification that was
approved before July 1, 2003, by adopting before January 1,
2004, a modification of the plan that states the amount of the
cost of the project, including administrative expenses, that
will be paid or financed with tax increments from the district.
Section 469.175, subdivision 4, paragraph (b), does not apply to
a modification adopted under this section if the modification is
exclusively for the purpose of stating the amount of the cost of
the project, including administrative expenses, that will be
paid or financed with tax increment from the district. For
districts for which the request for certification was made after
July 31, 1979, and for which this section is not effective, the
total estimated tax increment expenditures are determined by
considering all of the information in the tax increment
financing plan and exhibits to the plan about estimated sources
and uses of funds.
For districts for which certification was requested after
June 30, 1982, and before July 1, 2003, and for which the plan
has not been amended after July 1, 2003, the limit on
administrative expenses equals the greater of (1) nine percent
of the increments for the district or (2) the amount determined
under section 469.176, subdivision 3, and the tax increment
financing plan.
Sec. 9. Minnesota Statutes 2002, section 469.175,
subdivision 6, is amended to read:
Subd. 6. [ANNUAL FINANCIAL REPORTING.] (a) The state
auditor shall develop a uniform system of accounting and
financial reporting for tax increment financing districts. The
system of accounting and financial reporting shall, as nearly as
possible:
(1) provide for full disclosure of the sources and uses of
public funds in the district;
(2) permit comparison and reconciliation with the affected
local government's accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a
district, including a single district that is part of a
multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from
other districts or with other public money;
(4) be consistent with generally accepted accounting
principles.
(b) The authority must annually submit to the state auditor
a financial report in compliance with paragraph (a). Copies of
the report must also be provided to the county auditor and to
the governing body of the municipality, if the authority is not
the municipality. To the extent necessary to permit compliance
with the requirement of financial reporting, the county and any
other appropriate local government unit or private entity must
provide the necessary records or information to the authority or
the state auditor as provided by the system of accounting and
financial reporting developed pursuant to paragraph (a). The
authority must submit the annual report for a year on or before
August 1 of the next year.
(c) The annual financial report must also include the
following items:
(1) the original net tax capacity of the district and any
subdistrict under section 469.177, subdivision 1;
(2) the net tax capacity for the reporting period of the
district and any subdistrict;
(3) the captured net tax capacity of the district;
(4) any fiscal disparity deduction from the captured net
tax capacity under section 469.177, subdivision 3;
(5) the captured net tax capacity retained for tax
increment financing under section 469.177, subdivision 2,
paragraph (a), clause (1);
(6) any captured net tax capacity distributed among
affected taxing districts under section 469.177, subdivision 2,
paragraph (a), clause (2);
(7) the type of district;
(8) the date the municipality approved the tax increment
financing plan and the date of approval of any modification of
the tax increment financing plan, the approval of which requires
notice, discussion, a public hearing, and findings under
subdivision 4, paragraph (a);
(9) the date the authority first requested certification of
the original net tax capacity of the district and the date of
the request for certification regarding any parcel added to the
district;
(10) the date the county auditor first certified the
original net tax capacity of the district and the date of
certification of the original net tax capacity of any parcel
added to the district;
(11) the month and year in which the authority has received
or anticipates it will receive the first increment from the
district;
(12) the date the district must be decertified;
(13) for the reporting period and prior years of the
district, the actual amount received from, at least, the
following categories:
(i) tax increments paid by the captured net tax capacity
retained for tax increment financing under section 469.177,
subdivision 2, paragraph (a), clause (1), but excluding any
excess taxes;
(ii) tax increments that are interest or other investment
earnings on or from tax increments;
(iii) tax increments that are proceeds from the sale or
lease of property, tangible or intangible, purchased by the
authority with tax increments;
(iv) tax increments that are repayments of loans or other
advances made by the authority with tax increments;
(v) bond or loan proceeds;
(vi) special assessments;
(vii) grants; and
(viii) transfers from funds not exclusively associated with
the district;
(14) for the reporting period and for the prior years of
the district, the amount budgeted under the tax increment
financing plan, and the actual amount expended for, at least,
the following categories:
(i) acquisition of land and buildings through condemnation
or purchase;
(ii) site improvements or preparation costs;
(iii) installation of public utilities, parking facilities,
streets, roads, sidewalks, or other similar public improvements;
(iv) administrative costs, including the allocated cost of
the authority;
(v) public park facilities, facilities for social,
recreational, or conference purposes, or other similar public
improvements; and
(vi) transfers to funds not exclusively associated with the
district;
(15) for properties sold to developers, the total cost of
the property to the authority and the price paid by the
developer;
(16) the amount of any payments and the value of any
in-kind benefits, such as physical improvements and the use of
building space, that are paid or financed with tax increments
and are provided to another governmental unit other than the
municipality during the reporting period;
(17) the amount of any payments for activities and
improvements located outside of the district that are paid for
or financed with tax increments;
(18) the amount of payments of principal and interest that
are made during the reporting period on any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(19) the principal amount, at the end of the reporting
period, of any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(20) the amount of principal and interest payments that are
due for the current calendar year on any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(21) if the fiscal disparities contribution under chapter
276A or 473F for the district is computed under section 469.177,
subdivision 3, paragraph (a), the amount of increased property
taxes imposed on other properties in the municipality that
approved the tax increment financing plan as a result of the
fiscal disparities contribution;
(22) whether the tax increment financing plan or other
governing document permits increment revenues to be expended:
(i) to pay bonds, the proceeds of which were or may be
expended on activities outside of the district;
(ii) for deposit into a common bond fund from which money
may be expended on activities located outside of the district;
or
(iii) to otherwise finance activities located outside of
the tax increment financing district; and
(23) the estimate, if any, contained in the tax increment
financing plan of the amount of the cost of the project,
including administrative expenses, that will be paid or financed
with tax increment; and
(24) any additional information the state auditor may
require.
(d) The commissioner of revenue shall prescribe the method
of calculating the increased property taxes under paragraph (c),
clause (21), and the form of the statement disclosing this
information on the annual statement under subdivision 5.
(e) The reporting requirements imposed by this subdivision
apply to districts certified before, on, and after August 1,
1979.
[EFFECTIVE DATE.] This section is effective beginning with
the reports due in calendar year 2004.
Sec. 10. Minnesota Statutes 2002, section 469.176,
subdivision 1c, is amended to read:
Subd. 1c. [DURATION LIMITS; PRE-1979 DISTRICTS.] (a) For
tax increment financing districts created prior to August 1,
1979, no tax increment shall be paid to the authority after
April 1, 2001, or the term of a nondefeased bond or obligation
outstanding on April 1, 1990, secured by increments from the
district or project area, whichever time is greater, provided
that in no case will a tax increment be paid to an authority
after August 1, 2009, from such a district. If a district's
termination date is extended beyond April 1, 2001, because bonds
were outstanding on April 1, 1990, with maturities extending
beyond April 1, 2001, the following restrictions apply. No
increment collected from the district may be expended after
April 1, 2001, except to pay or defease (i) repay:
(1) bonds issued before April 1, 1990, or (ii);
(2) bonds issued to refund the principal of the outstanding
bonds and pay associated issuance costs, provided the average
maturity of the refunding bonds does not exceed the bonds
refunded;
(3) administrative expenses of the district required to be
paid under section 469.176, subdivision 4h, paragraph (a);
(4) transfers of increment permitted under section
469.1763, subdivision 6; and
(5) any advance or payment made by the municipality or the
authority after June 1, 2002, to pay any bonds listed in clause
(1) or (2).
(b) Each year, any increments from a district subject to
this subdivision must be first applied to pay obligations listed
under paragraph (a), clauses (1) and (2), and administrative
expenses under paragraph (a), clause (3). Any remaining
increments may be used for transfers of increments permitted
under section 469.1763, subdivision 6, and to make payments
under paragraph (a), clause (5).
(c) When sufficient money has been received to pay in full
or defease obligations under paragraph (a), clauses (1), (2),
and (5), the tax increment project or district must be
decertified.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to tax increment financing
districts for which the request for certification was made
before August 1, 1979.
Sec. 11. Minnesota Statutes 2002, section 469.176,
subdivision 2, is amended to read:
Subd. 2. [EXCESS TAX INCREMENTS.] In any year in which the
tax increment exceeds the amount necessary to pay the costs
authorized by the tax increment financing plan, including the
amount necessary to cancel any tax levy as provided in section
475.61, subdivision 3, (a) The authority shall annually
determine the amount of excess increments for a district, if
any. This determination must be based on the tax increment
financing plan in effect on December 31 of the year and the
increments and other revenues received as of December 31 of the
year.
(b) For purposes of this subdivision, "excess increments"
equals the excess of:
(1) total increments collected from the district since its
certification, reduced by any excess increments paid under
paragraph (c), clause (4), for a prior year, over
(2) the total costs authorized by the tax increment
financing plan to be paid with increments from the district,
reduced, but not below zero, by the sum of:
(i) the amounts of those authorized costs that have been
paid from sources other than tax increments from the district;
(ii) revenues, other than tax increments from the district,
that are dedicated for or otherwise required to be used to pay
those authorized costs and that the authority has received and
that are not included in item (i); and
(iii) the amount of principal and interest obligations due
on outstanding bonds after December 31 of the year and not
prepaid under paragraph (c) in a prior year.
(c) The authority shall use the excess amount to do any
of excess increment only to do one or more of the following:
(1) prepay any outstanding bonds,;
(2) discharge the pledge of tax increment therefor, for any
outstanding bonds;
(3) pay into an escrow account dedicated to the payment of
such bond, any outstanding bonds; or
(4) return the excess amount to the county auditor who
shall distribute the excess amount to the municipality city or
town, county, and school district in which the tax increment
financing district is located in direct proportion to their
respective local tax rates.
(d) The county auditor must report to the commissioner of
children, families, and learning the amount of any excess tax
increment distributed to a school district within 30 days of the
distribution.
[EFFECTIVE DATE.] This section is effective for all tax
increment financing districts, regardless of whether the request
for certification was made before, on, or after August 1, 1979,
and applies after August 1, 2003, except the amendment to
paragraph (c), clause (4), applies retroactively to August 1,
1979.
Sec. 12. Minnesota Statutes 2002, section 469.176,
subdivision 3, is amended to read:
Subd. 3. [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For
districts for which certification was requested before August 1,
1979, or after June 30, 1982 and before August 1, 2001, no tax
increment shall be used to pay any administrative expenses for a
project which exceed ten percent of the total estimated tax
increment expenditures authorized by the tax increment financing
plan or the total tax increment expenditures for the project,
whichever is less.
(b) For districts for which certification was requested
after July 31, 1979, and before July 1, 1982, no tax increment
shall be used to pay administrative expenses, as defined in
Minnesota Statutes 1980, section 273.73, for a district which
exceeds five percent of the total tax increment expenditures
authorized by the tax increment financing plan or the
total estimated tax increment expenditures for the district,
whichever is less.
(c) For districts for which certification was requested
after July 31, 2001, no tax increment may be used to pay any
administrative expenses for a project which exceed ten percent
of total estimated tax increment expenditures authorized by the
tax increment financing plan or the total tax increments, as
defined in section 469.174, subdivision 25, clause (1), from the
district, whichever is less.
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification was made before, on, or
after August 1, 1979.
Sec. 13. Minnesota Statutes 2002, section 469.176,
subdivision 7, is amended to read:
Subd. 7. [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The
authority may request inclusion in a tax increment financing
district and the county auditor may certify the original tax
capacity of a parcel or a part of a parcel that qualified under
the provisions of section 273.111 or 273.112 or chapter 473H for
taxes payable in any of the five calendar years before the
filing of the request for certification only for:
(1) a district in which 85 percent or more of the planned
buildings and facilities (determined on the basis of square
footage) are a qualified manufacturing facility or a qualified
distribution facility or a combination of both; or
(2) a qualified housing district as defined in section
273.1399, subdivision 1.
(b)(1) A distribution facility means buildings and other
improvements to real property that are used to conduct
activities in at least each of the following categories:
(i) to store or warehouse tangible personal property;
(ii) to take orders for shipment, mailing, or delivery;
(iii) to prepare personal property for shipment, mailing,
or delivery; and
(iv) to ship, mail, or deliver property.
(2) A manufacturing facility includes space used for
manufacturing or producing tangible personal property, including
processing resulting in the change in condition of the property,
and space necessary for and related to the manufacturing
activities.
(3) To be a qualified facility, the owner or operator of a
manufacturing or distribution facility must agree to pay and pay
90 percent or more of the employees of the facility at a rate
equal to or greater than 160 percent of the federal minimum wage
for individuals over the age of 20.
[EFFECTIVE DATE.] This section applies to all districts for
which the request for certification was made on or after January
1, 2002, and to all districts to which the definition of
qualified housing districts under Minnesota Statutes 2000,
section 273.1399, applied.
Sec. 14. Minnesota Statutes 2002, section 469.1763,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the following terms have the meanings given.
(b) "Activities" means acquisition of property, clearing of
land, site preparation, soils correction, removal of hazardous
waste or pollution, installation of utilities, construction of
public or private improvements, and other similar activities,
but only to the extent that tax increment revenues may be spent
for such purposes under other law.
(c) "Third party" means an entity other than (1) the person
receiving the benefit of assistance financed with tax
increments, or (2) the municipality or the development authority
or other person substantially under the control of the
municipality.
(d) "Revenues derived from tax increments paid by
properties in the district" means only tax increment as defined
in section 469.174, subdivision 25, clause (1), and does not
include tax increment as defined in section 469.174, subdivision
25, clauses (2), (3), and (4).
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification was made after April 30,
1990.
Sec. 15. Minnesota Statutes 2002, section 469.1763,
subdivision 3, is amended to read:
Subd. 3. [FIVE-YEAR RULE.] (a) Revenues derived from tax
increments are considered to have been expended on an activity
within the district under subdivision 2 only if one of the
following occurs:
(1) before or within five years after certification of the
district, the revenues are actually paid to a third party with
respect to the activity;
(2) bonds, the proceeds of which must be used to finance
the activity, are issued and sold to a third party before or
within five years after certification, the revenues are spent to
repay the bonds, and the proceeds of the bonds either are, on
the date of issuance, reasonably expected to be spent before the
end of the later of (i) the five-year period, or (ii) a
reasonable temporary period within the meaning of the use of
that term under section 148(c)(1) of the Internal Revenue Code,
or are deposited in a reasonably required reserve or replacement
fund;
(3) binding contracts with a third party are entered into
for performance of the activity before or within five years
after certification of the district and the revenues are spent
under the contractual obligation; or
(4) costs with respect to the activity are paid before or
within five years after certification of the district and the
revenues are spent to reimburse a party for payment of the
costs, including interest on unreimbursed costs; or
(5) expenditures are made for housing purposes as permitted
by subdivision 2, paragraph (b).
(b) For purposes of this subdivision, bonds include
subsequent refunding bonds if the original refunded bonds meet
the requirements of paragraph (a), clause (2).
[EFFECTIVE DATE.] This section is effective for
expenditures made after June 30, 2003.
Sec. 16. Minnesota Statutes 2002, 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) (2) 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 retroactively
to January 2, 2002, and thereafter.
Sec. 17. Minnesota Statutes 2002, section 469.177,
subdivision 1, is amended to read:
Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or
after adoption of a tax increment financing plan, the auditor of
any county in which the district is situated shall, upon request
of the authority, certify the original net tax capacity of the
tax increment financing district and that portion of the
district overlying any subdistrict as described in the tax
increment financing plan and shall certify in each year
thereafter the amount by which the original net tax capacity has
increased or decreased as a result of a change in tax exempt
status of property within the district and any subdistrict,
reduction or enlargement of the district or changes pursuant to
subdivision 4.
(b) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May
1, 1988, If the classification under section 273.13 of property
located in a district changes to a classification that has a
different assessment ratio, the original net tax capacity of
that property must be redetermined at the time when its use is
changed as if the property had originally been classified in the
same class in which it is classified after its use is changed.
(c) The amount to be added to the original net tax capacity
of the district as a result of previously tax exempt real
property within the district becoming taxable equals the net tax
capacity of the real property as most recently assessed pursuant
to section 273.18 or, if that assessment was made more than one
year prior to the date of title transfer rendering the property
taxable, the net tax capacity assessed by the assessor at the
time of the transfer. If improvements are made to tax exempt
property after certification of the district and before the
parcel becomes taxable, the assessor shall, at the request of
the authority, separately assess the estimated market value of
the improvements. If the property becomes taxable, the county
auditor shall add to original net tax capacity, the net tax
capacity of the parcel, excluding the separately assessed
improvements. If substantial taxable improvements were made to
a parcel after certification of the district and if the property
later becomes tax exempt, in whole or part, as a result of the
authority acquiring the property through foreclosure or exercise
of remedies under a lease or other revenue agreement or as a
result of tax forfeiture, the amount to be added to the original
net tax capacity of the district as a result of the property
again becoming taxable is the amount of the parcel's value that
was included in original net tax capacity when the parcel was
first certified. The amount to be added to the original net tax
capacity of the district as a result of enlargements equals the
net tax capacity of the added real property as most recently
certified by the commissioner of revenue as of the date of
modification of the tax increment financing plan pursuant to
section 469.175, subdivision 4.
(d) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May
1, 1988, If the net tax capacity of a property increases because
the property no longer qualifies under the Minnesota
Agricultural Property Tax Law, section 273.111; the Minnesota
Open Space Property Tax Law, section 273.112; or the
Metropolitan Agricultural Preserves Act, chapter 473H, or
because platted, unimproved property is improved or three years
pass after approval of the plat under section 273.11,
subdivision 1, the increase in net tax capacity must be added to
the original net tax capacity.
(e) The amount to be subtracted from the original net tax
capacity of the district as a result of previously taxable real
property within the district becoming tax exempt, or a reduction
in the geographic area of the district, shall be the amount of
original net tax capacity initially attributed to the property
becoming tax exempt or being removed from the district. If the
net tax capacity of property located within the tax increment
financing district is reduced by reason of a court-ordered
abatement, stipulation agreement, voluntary abatement made by
the assessor or auditor or by order of the commissioner of
revenue, the reduction shall be applied to the original net tax
capacity of the district when the property upon which the
abatement is made has not been improved since the date of
certification of the district and to the captured net tax
capacity of the district in each year thereafter when the
abatement relates to improvements made after the date of
certification. The county auditor may specify reasonable form
and content of the request for certification of the authority
and any modification thereof pursuant to section 469.175,
subdivision 4.
(f) If a parcel of property contained a substandard
building that was demolished or removed and if the authority
elects to treat the parcel as occupied by a substandard building
under section 469.174, subdivision 10, paragraph (b), the
auditor shall certify the original net tax capacity of the
parcel using the greater of (1) the current net tax capacity of
the parcel, or (2) the estimated market value of the parcel for
the year in which the building was demolished or removed, but
applying the class rates for the current year.
[EFFECTIVE DATE.] This section applies to all districts,
regardless of whether the request for certification was made
before, on, or after August 1, 1979, beginning for taxes payable
in 2004. This section requires adjustment of the original tax
capacity under Minnesota Statutes, section 469.177, subdivision
7, of all parcels for class rate changes enacted after May 1,
1988, regardless of whether the classification of the property
has changed after the certification of the district. This
section requires adjustment of original tax capacity for changes
in the classification of the property, only if the change in use
occurs after December 31, 2002.
Sec. 18. Minnesota Statutes 2002, section 469.177,
subdivision 12, is amended to read:
Subd. 12. [DECERTIFICATION OF TAX INCREMENT FINANCING
DISTRICT.] The county auditor shall decertify a tax increment
financing district when the earliest of the following times is
reached:
(1) the applicable maximum duration limit under section
469.176, subdivisions 1a to 1g;
(2) the maximum duration limit, if any, provided by the
municipality pursuant to section 469.176, subdivision 1;
(3) the time of decertification specified in section
469.1761, subdivision 4, if the commissioner of revenue issues
an order of noncompliance and the maximum duration limit for
economic development districts has been exceeded;
(4) upon completion of the required actions to allow
decertification under section 469.1763, subdivision 4; or
(5) upon the later of receipt by the county auditor of a
written request for decertification from the authority that
requested certification of the original net tax capacity of the
district or its successor or the decertification date specified
in the request.
[EFFECTIVE DATE.] This section is effective for all
districts regardless of whether the request for certification
was made before, on, or after August 1, 1979.
Sec. 19. Minnesota Statutes 2002, section 469.1771,
subdivision 4, is amended to read:
Subd. 4. [LIMITATIONS.] (a) If the increments are pledged
to repay bonds that were issued before the lawsuit was filed
under this section, the damages under this section may not
exceed the greater of (1) ten percent of the expenditures or
revenues derived from increment, or (2) the amount of available
revenues after paying debt services due on the bonds.
(b) The court may abate all or part of the amount if it
determines the unauthorized action or failure to perform the
required action was taken in good faith and the payment would
work an undue hardship on the authority or municipality.
[EFFECTIVE DATE.] This section is effective for violations
occurring after December 31, 1990.
Sec. 20. Minnesota Statutes 2002, section 469.1771, is
amended by adding a subdivision to read:
Subd. 7. [LIMITATIONS ON ACTIONS.] An action under
subdivision 1, paragraph (a), contesting the validity of a
determination by an authority under section 469.175, subdivision
3, must be commenced within the later of:
(1) 180 days after the municipality's approval under
section 469.175, subdivision 3; or
(2) 90 days after the request for certification of the
district is filed with the county auditor under section 469.177,
subdivision 1.
[EFFECTIVE DATE.] This section is effective for actions
filed after the day following final enactment.
Sec. 21. Minnesota Statutes 2002, section 469.178,
subdivision 7, is amended to read:
Subd. 7. [INTERFUND LOANS.] The authority or municipality
may advance or loan money to finance expenditures under section
469.176, subdivision 4, from its general fund or any other fund
under which it has legal authority to do so. The loan or
advance must be approved authorized, by resolution of the
governing body, before money is transferred, advanced, or spent,
whichever is earliest. The resolution may generally grant to
the authority the power to make interfund loans under one or
more tax increment financing plans or for one or more
districts. The terms and conditions for repayment of the loan
must be provided in writing and include, at a minimum, the
principal amount, the interest rate, and maximum term. The
maximum rate of interest permitted to be charged is limited to
the greater of the rates specified under section 270.75 or
549.09 as of the date or advance is made, unless the written
agreement states that the maximum interest rate will fluctuate
as the interest rates specified under section 270.75 or 549.09
are from time to time adjusted.
[EFFECTIVE DATE.] This section is effective for loans and
advances made after July 31, 2001, and for districts for which
the request for certification was made after July 31, 1979.
Sec. 22. Minnesota Statutes 2002, section 469.1791,
subdivision 3, is amended to read:
Subd. 3. [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city
may establish a special taxing district within a tax increment
financing district under this section only if the conditions
under paragraphs (b) and (c) are met or if the city elects to
exercise the authority under paragraph (d).
(b) The city has determined that:
(1) total tax increments from the district, including
unspent increments from previous years and increments
transferred under paragraph (c), will be insufficient to pay the
amounts due in a year on preexisting obligations; and
(2) this insufficiency of increments resulted from the
reduction in property tax class rates enacted in the 1997 and
1998 legislative sessions.
(c) The city has agreed to transfer any available
increments from other tax increment financing districts in the
city to pay the preexisting obligations of the district under
section 469.1763, subdivision 6. This requirement does not
apply to any available increments of a qualified housing
district, as defined in section 273.1399, subdivision 1.
(d) If a tax increment financing district does not qualify
under paragraphs (b) and (c), the governing body may elect to
establish a special taxing district under this section. If the
city elects to exercise this authority, increments from the tax
increment financing district and the proceeds of the tax imposed
under this section may only be used to pay preexisting
obligations and reasonable administrative expenses of the
authority for the tax increment financing district. The tax
increment financing district must be decertified when all
preexisting obligations have been paid.
[EFFECTIVE DATE.] This section applies to all districts for
which the request for certification was made on or after January
1, 2002, and to all districts to which the definition of
qualified housing districts under Minnesota Statutes 2000,
section 273.1399, applied.
Sec. 23. Minnesota Statutes 2002, 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) 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
(2)(i) the development authority has a binding contract,
entered into before August 1, 2001, 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
(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.
[EFFECTIVE DATE.] This section is effective retroactively
to the effective date of the original enactment of section
469.1792, subdivision 1, and applies to all districts for which
the request for certification was made after July 1, 1979.
Sec. 24. Minnesota Statutes 2002, section 469.1792,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Preexisting district" means a tax increment financing
district for which the request for certification was made before
August 1, 2001.
(c) "Preexisting obligation" means a bond or binding
contract that:
(1)(i) was issued or approved before August 1, 2001, or was
issued pursuant to a binding contract entered into before August
July 1, 2001; or
(ii) was issued to refinance an obligation under item (i),
if the refinancing does not increase the present value of the
debt service; and
(2) is secured by increments from a preexisting district.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to districts for which the
request for certification was made on, before, or after August
1, 1979, and before August 1, 2001.
Sec. 25. Minnesota Statutes 2002, section 469.1792,
subdivision 3, is amended to read:
Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a
district qualifying under this section may take either or both
of the following actions for any or all of its preexisting
districts:
(1) the authority may elect that the original local tax
rate under section 469.177, subdivision 1a, does not apply to
the district; and
(2) the authority may elect the fiscal disparities
contribution will be computed under section 469.177, subdivision
3, paragraph (a), regardless of the election that was made for
the district or if the district is an economic development
district for which the request for certification was made after
June 30, 1997.
(b) The authority may take action under this subdivision
only after the municipality approves the action, by resolution,
after notice and public hearing in the manner provided under
section 469.175, subdivision 2 3.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies to districts for which the
request for certification was made on, before, or after August
1, 1979, and before August 1, 2001.
Sec. 26. Minnesota Statutes 2002, section 469.1813,
subdivision 8, is amended to read:
Subd. 8. [LIMITATION ON ABATEMENTS.] In any year, the
total amount of property taxes abated by a political subdivision
under this section may not exceed (1) five percent of the
current levy, or (2) $100,000, whichever is greater. The limit
under this subdivision does not apply to an uncollected
abatement from a prior year that is added to the abatement levy.
[EFFECTIVE DATE.] This section is effective beginning with
property taxes levied in 2003, payable in 2004.
Sec. 27. Minnesota Statutes 2002, section 469.1815,
subdivision 1, is amended to read:
Subdivision 1. [INCLUSION IN PROPOSED AND FINAL LEVIES.]
The political subdivision must add to its levy amount for the
current year under sections 275.065 and 275.07 the total
estimated amount of all current year abatements granted. If all
or a portion of an abatement levy for a prior year was
uncollected, the political subdivision may add the uncollected
amount to its abatement levy for the current year. The tax
amounts shown on the proposed notice under section 275.065,
subdivision 3, and on the property tax statement under section
276.04, subdivision 2, are the total amounts before the
reduction of any abatements that will be granted on the property.
[EFFECTIVE DATE.] This section is effective beginning with
property taxes levied in 2003, payable in 2004.
Sec. 28. Laws 1997, chapter 231, article 10, section 25,
is amended to read:
Sec. 25. [EFFECTIVE DATE.]
Sections 1, 3 to 6, 7, and 10, are effective for districts
for which the requests for certification are made after June 30,
1997.
Section 2, clauses clause (1) and is effective for all
districts, regardless of whether the request for certification
was made before, on, or after August 1, 1979. Section 2,
clause (4), are is effective for districts for which the
requests for certification were made after July 31, 1979, and
for payments and investment earnings received after July 1,
1997. Section 2, clauses (2) and (3), are effective for
districts for which the request for certification was made after
June 30, 1982, and proceeds from sales and leases of properties
purchased by the authority after June 30, 1997, and repayments
of advances and loans that were made after June 30, 1997.
Sections 8 and 9 apply to all tax increment districts,
whenever certified, insofar as the underlying law applies to
them, and any uses of tax increment expended prior to the date
of enactment of this act which are in compliance with the
provisions of those sections are deemed valid.
Sections 12 and 13 are effective on the day the chief
clerical officer of the city of Columbia Heights complies with
Minnesota Statutes, sections 645.021, subdivision 3.
Sections 17 to 20 are effective the day following final
enactment and upon compliance by the governing body with
Minnesota Statutes, section 645.021, subdivision 3.
Section 24 is effective the day following final enactment.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 29. Laws 2002, chapter 377, article 7, section 3, the
effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective for increments
payable in 2002 deficits occurring in calendar year 2000 and
thereafter.
Sec. 30. Laws 2002, chapter 377, article 11, section 1, is
amended to read:
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 and increments from the district 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, and administrative
expenses. 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 2010.
[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. 31. [HOPKINS TAX INCREMENT FINANCING DISTRICT.]
Subdivision 1. [DISTRICT EXTENSION.] (a) The governing
body of the city of Hopkins may elect to extend the duration of
its redevelopment tax increment financing district 2-11 by up to
four additional years.
(b) Notwithstanding any law to the contrary, effective upon
approval of this subdivision, no increments may be spent on
activities located outside of the area of the district, other
than to pay administrative expenses.
Subd. 2. [FIVE-YEAR RULE.] The requirements of Minnesota
Statutes, section 469.1763, subdivision 3, that activities must
be undertaken within a five-year period from the date of
certification of tax increment financing district must be
considered to be met for the city of Hopkins redevelopment tax
increment district 2-11, if the activities are undertaken within
nine years from the date of certification of the district.
[EFFECTIVE DATE.] Subdivision 1 is effective upon
compliance with the provisions of Minnesota Statutes, sections
469.1782, subdivision 2, and 645.021. Subdivision 2 is
effective upon compliance by the governing body of the city of
Hopkins with the provisions of Minnesota Statutes, section
645.021.
ARTICLE 11
MINERALS TAXES
Section 1. Minnesota Statutes 2002, section 273.134, is
amended to read:
273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA;
DEFINITIONS.]
(a) For purposes of this section and section sections
273.135 and 273.1391, "municipality" means any city, however
organized, or town, and which meets the following qualifications:
(1) it is a municipality in which the assessed valuation of
unmined iron ore on May 1, 1941, was not less than 40 percent of
the assessed valuation of all real property; or
(2) it is a municipality in which, on January 1, 1977, or
the applicable assessment date, there is a taconite
concentrating plant or where taconite is mined or quarried or
where there is located an electric generating plant which
qualifies as a taconite facility.
"The applicable assessment date" is the date as of which
property is listed and assessed for the tax in question.
(b) For the purposes of section 273.135, "tax relief area"
means the geographic area contained within the boundaries of a
school district on January 2, 2000, which contains a
municipality which meets the following qualifications:
(1) it is a municipality school district in which the
assessed valuation of unmined iron ore on May 1, 1941, was not
less than 40 percent of the assessed valuation of all real
property and whose boundaries are within 20 miles of a taconite
mine or plant; or
(2) it is a municipality school district in which, on
January 1, 1977 or the applicable assessment date, there is a
taconite concentrating plant or where taconite is mined or
quarried or where there is located an electric generating plant
which qualifies as a taconite facility.
For purposes of this paragraph, a "tax relief area" does
not include a school district whose boundaries are more than 20
miles from a taconite mine or plant or in which the assessed
valuation of unmined iron ore on May 1, 1941, was less than 40
percent of the assessed valuation of all real property.
(b) For purposes of section 273.1391, subdivision 2,
paragraph (c), and chapter 298, "tax relief area" means the
geographic area contained within the boundaries of a school
district which contains a municipality that meets the following
qualifications:
(1) it is a municipality in which the assessed valuation of
unmined iron ore on May 1, 1941, was not less than 40 percent of
the assessed valuation of all real property; or
(2) it is a municipality in which, on January 1, 1977, or
the applicable assessment date, there is a taconite
concentrating plant or where taconite is mined or quarried or
where there is located an electric generating plant which
qualifies as a taconite facility.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 2. [273.1341] [TACONITE ASSISTANCE AREA.]
A "taconite assistance area" means the geographic area that
falls within the boundaries of a school district that contains a
municipality in which the assessed valuation of unmined iron ore
on May 1, 1941, was not less than 40 percent of the assessed
valuation of all real property.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 3. Minnesota Statutes 2002, section 273.135,
subdivision 1, is amended to read:
Subdivision 1. The property tax to be paid in respect to
property taxable within a tax relief area as defined in section
273.134, paragraph (a) (b), on homestead property, as otherwise
determined by law and regardless of the market value of the
property, for all purposes shall be reduced in the amount
prescribed by subdivision 2, subject to the limitations
contained therein.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 4. Minnesota Statutes 2002, section 273.135,
subdivision 2, is amended to read:
Subd. 2. The amount of the reduction authorized by
subdivision 1 shall be:
(a) In the case of property located within a tax relief
area municipality as defined under section 273.134, paragraph
(a), that is within the boundaries of a municipality which meets
the qualifications prescribed in section 273.134, paragraph (a),
66 percent of the tax, provided that the reduction shall not
exceed the maximum amounts specified in paragraph (c).
(b) In the case of property located within the boundaries
of a school district which qualifies as a tax relief area under
section 273.134, paragraph (a) (b), but which is outside the
boundaries of a municipality which meets the qualifications
prescribed in section 273.134, paragraph (a), 57 percent of the
tax, provided that the reduction shall not exceed the maximum
amounts specified in paragraph (c).
(c) The maximum reduction of the tax is $315.10 on property
described in paragraph (a) and $289.80 on property described in
paragraph (b).
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 5. Minnesota Statutes 2002, section 273.1391,
subdivision 2, is amended to read:
Subd. 2. The amount of the reduction authorized by
subdivision 1 shall be:
(a) In the case of property located within a school
district which does not meet the qualifications of section
273.134, paragraph (b), as a tax relief area, but which is
located in a county with a population of less than 100,000 in
which taconite is mined or quarried and wherein a school
district is located which does meet the qualifications of a tax
relief area, and provided that at least 90 percent of the area
of the school district which does not meet the qualifications of
section 273.134, paragraph (b), lies within such county, 57
percent of the tax on qualified property located in the school
district that does not meet the qualifications of section
273.134, paragraph (b), provided that the amount of said
reduction shall not exceed the maximum amounts specified in
paragraph (d). The reduction provided by this paragraph shall
only be applicable to property located within the boundaries of
the county described therein.
(b) In the case of property located within a school
district which does not meet the qualifications of section
273.134, paragraph (b), as a tax relief area, but which is
located in a school district in a county containing a city of
the first class and a qualifying municipality as defined in
section 273.134, paragraph (a), but not in a school district
containing a city of the first class or adjacent to a school
district containing a city of the first class unless the school
district so adjacent contains a qualifying municipality as
defined in section 273.134, paragraph (a), 57 percent of the
tax, but not to exceed the maximums specified in paragraph (d).
(c) In the case of property located within the boundaries
of a municipality that meets the qualifications in section
273.134, paragraph (b) (a), but not the qualifications of a tax
relief area in section 273.134, paragraph (a) (b), 66 percent of
the tax, provided that the reduction shall not exceed $315.10.
In the case of property located within the boundaries of a
school district which qualifies as a tax relief taconite
assistance area under section 273.134, paragraph (b) 273.1341,
but does not qualify as a tax relief area under section 273.134,
paragraph (a) (b), but which is outside the boundaries of a
municipality which meets the qualifications of the preceding
sentence, 57 percent of the tax, provided that the reduction
shall not exceed the maximum amounts specified in paragraph (d).
(d) Except as otherwise provided in this section, the
maximum reduction of the tax is $289.80.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 6. Minnesota Statutes 2002, section 298.2211,
subdivision 1, is amended to read:
Subdivision 1. [PURPOSE; GRANT OF AUTHORITY.] In order to
accomplish the legislative purposes specified in sections
469.142 to 469.165 and chapter 462C, within tax relief areas as
defined in section 273.134, the commissioner of iron range
resources and rehabilitation may exercise the following powers:
(1) all powers conferred upon a rural development financing
authority under sections 469.142 to 469.149; (2) all powers
conferred upon a city under chapter 462C; (3) all powers
conferred upon a municipality or a redevelopment agency under
sections 469.152 to 469.165; (4) all powers provided by sections
469.142 to 469.151 to further any of the purposes and objectives
of chapter 462C and sections 469.152 to 469.165; and (5) apply
for, borrow, receive, and expend grant and loan money made
available from federal sources and from federally funded
programs; and (6) all powers conferred upon a municipality or an
authority under sections 469.174 to 469.177, 469.178, except
subdivision 2 thereof, and 469.179, subject to compliance with
the provisions of section 469.175, subdivisions 1, 2, and 3;
provided that any tax increments derived by the commissioner
from the exercise of this authority may be used only to finance
or pay premiums or fees for insurance, letters of credit, or
other contracts guaranteeing the payment when due of net rentals
under a project lease or the payment of principal and interest
due on or repurchase of bonds issued to finance a project or
program, to accumulate and maintain reserves securing the
payment when due on bonds issued to finance a project or
program, or to provide an interest rate reduction program
pursuant to section 469.012, subdivision 7. Tax increments and
earnings thereon remaining in any bond reserve account after
payment or discharge of any bonds secured thereby shall be used
within one year thereafter in furtherance of this section or
returned to the county auditor of the county in which the tax
increment financing district is located. If returned to the
county auditor, the county auditor shall immediately allocate
the amount among all government units which would have shared
therein had the amount been received as part of the other ad
valorem taxes on property in the district most recently paid, in
the same proportions as other taxes were distributed, and shall
immediately distribute it to the government units in accordance
with the allocation.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2002, 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 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.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 8. Minnesota Statutes 2002, section 298.28,
subdivision 4, is amended to read:
Subd. 4. [SCHOOL DISTRICTS.] (a) 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) 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) 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 qualify as a tax relief area under section 273.134,
paragraph (b), or in which there is a qualifying municipality as
defined by section 273.134, paragraph (b) (a), 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 for the distribution in 2003 only, five
percent of the distributions to school districts under
paragraphs (b), (c), and (e); subdivision 6, paragraph (c);
subdivision 11; and section 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 northeast Minnesota economic
protection trust fund created in section 298.292. Fifty percent
of the amount distributed to the northeast Minnesota Douglas J.
Johnson 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.
[EFFECTIVE DATE.] This section is effective for
distributions in 2004 and thereafter.
Sec. 9. Minnesota Statutes 2002, section 298.292,
subdivision 2, is amended to read:
Subd. 2. [USE OF MONEY.] Money in the northeast Minnesota
economic protection trust fund may be used for the following
purposes:
(1) to provide loans, loan guarantees, interest buy-downs
and other forms of participation with private sources of
financing, but a loan to a private enterprise shall be for a
principal amount not to exceed one-half of the cost of the
project for which financing is sought, and the rate of interest
on a loan to a private enterprise shall be no less than the
lesser of eight percent or an interest rate three percentage
points less than a full faith and credit obligation of the
United States government of comparable maturity, at the time
that the loan is approved;
(2) to fund reserve accounts established to secure the
payment when due of the principal of and interest on bonds
issued pursuant to section 298.2211;
(3) to pay in periodic payments or in a lump sum payment
any or all of the interest on bonds issued pursuant to chapter
474 for the purpose of constructing, converting, or retrofitting
heating facilities in connection with district heating systems
or systems utilizing alternative energy sources; and
(4) to invest in a venture capital fund or enterprise that
will provide capital to other entities that are engaging in, or
that will engage in, projects or programs that have the purposes
set forth in subdivision 1. No investments may be made in a
venture capital fund or enterprise unless at least two other
unrelated investors make investments of at least $500,000 in the
venture capital fund or enterprise, and the investment by the
northeast Minnesota economic protection trust fund may not
exceed the amount of the largest investment by an unrelated
investor in the venture capital fund or enterprise. For
purposes of this subdivision, an "unrelated investor" is a
person or entity that is not related to the entity in which the
investment is made or to any individual who owns more than 40
percent of the value of the entity, in any of the following
relationships: spouse, parent, child, sibling, employee, or
owner of an interest in the entity that exceeds ten percent of
the value of all interests in it. For purposes of determining
the limitations under this clause, the amount of investments
made by an investor other than the northeast Minnesota economic
protection trust fund is the sum of all investments made in the
venture capital fund or enterprise during the period beginning
one year before the date of the investment by the northeast
Minnesota economic protection trust fund.
Money from the trust fund shall be expended only in or for
the benefit of the tax relief area defined in section 273.134,
paragraph (b).
[EFFECTIVE DATE.] This section is effective for loans
executed on or after the day following final enactment.
Sec. 10. Minnesota Statutes 2002, section 298.296,
subdivision 4, is amended to read:
Subd. 4. [TEMPORARY LOAN AUTHORITY.] (a) The board may
recommend that up to $7,500,000 from the corpus of the trust may
be used for loans, loan guarantees, grants, or equity
investments as provided in this subdivision. The money would be
available for loans for construction and equipping of facilities
constituting (1) a value added iron products plant, which may be
either a new plant or a facility incorporated into an existing
plant that produces iron upgraded to a minimum of 75 percent
iron content or any iron alloy with a total minimum metallic
content of 90 percent; or (2) a new mine or minerals processing
plant for any mineral subject to the net proceeds tax imposed
under section 298.015. A loan or loan guarantee under this
paragraph may not exceed $5,000,000 for any facility.
(b) Additionally, the board must reserve the first
$2,000,000 of the net interest, dividends, and earnings arising
from the investment of the trust after June 30, 1996, to be used
for additional grants, loans, loan guarantees, or equity
investments for the purposes set forth in paragraph (a). This
amount must be reserved until it is used for the grants as
described in this subdivision.
(c) Additionally, the board may recommend that up to
$5,500,000 from the corpus of the trust may be used for
additional grants, loans, loan guarantees, or equity investments
for the purposes set forth in paragraph (a).
(d) The board may require that it receive an equity
percentage in any project to which it contributes under this
section.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. Minnesota Statutes 2002, section 298.2961, is
amended by adding a subdivision to read:
Subd. 3. [REDISTRIBUTION.] (a) If a taconite production
facility is sold after operations at the facility had ceased,
any money remaining in the taconite environmental fund for the
former producer may be released to the purchaser of the facility
on the terms otherwise applicable to the former producer under
this section.
(b) Any portion of the taconite environmental fund that is
not released by the commissioner within three years of its
deposit in the taconite environmental fund shall be divided
between the taconite environmental protection fund created in
section 298.223 and the Douglas J. Johnson economic protection
trust fund created in section 298.292 for placement in their
respective special accounts. Two-thirds of the unreleased funds
must be distributed to the taconite environmental protection
fund and one-third to the Douglas J. Johnson economic protection
trust fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 12. [REVISOR INSTRUCTION.]
The revisor of statutes shall change the phrase "Northeast
Minnesota Economic Protection Trust Fund" or a similar phrase
referring to the fund, to the "Douglas J. Johnson Economic
Protection Trust Fund" wherever it appears in Minnesota Statutes.
Sec. 13. [REPEALER.]
Minnesota Statutes 2002, section 298.24, subdivision 3, is
repealed effective for concentrates produced after January 1,
2003.
ARTICLE 12
PUBLIC FINANCE
Section 1. [37.31] [ISSUANCE OF BONDS.]
Subdivision 1. [BONDING AUTHORITY.] The society may issue
negotiable bonds in a principal amount that the society
determines necessary to provide sufficient money for achieving
its purposes, including the payment of interest on bonds of the
society, the establishment of reserves to secure its bonds, the
payment of fees to a third party providing credit enhancement,
and the payment of all other expenditures of the society
incident to and necessary or convenient to carry out its
corporate purposes and powers. Bonds of the society may be
issued as bonds or notes or in any other form authorized by
law. The principal amount of bonds issued and outstanding under
this section at any time may not exceed $20,000,000, excluding
bonds for which refunding bonds or crossover refunding bonds
have been issued.
Subd. 2. [REFUNDING OF BONDS.] The society may issue bonds
to refund outstanding bonds of the society, to pay any
redemption premiums on those bonds, and to pay interest accrued
or to accrue to the redemption date next succeeding the date of
delivery of the refunding bonds. The society may apply the
proceeds of any refunding bonds to the purchase or payment at
maturity of the bonds to be refunded, or to the redemption of
outstanding bonds on the redemption date next succeeding the
date of delivery of the refunding bonds and may, pending the
application, place the proceeds in escrow to be applied to the
purchase, retirement, or redemption of the bonds. Pending use,
escrowed proceeds may be invested and reinvested in obligations
issued or guaranteed by the state or the United States or by any
agency or instrumentality of the state or the United States, or
in certificates of deposit or time deposits secured in a manner
determined by the society, maturing at a time appropriate to
assure the prompt payment of the principal and interest and
redemption premiums, if any, on the bonds to be refunded. The
income realized on any investment may also be applied to the
payment of the bonds to be refunded. After the terms of the
escrow have been fully satisfied, any balance of the proceeds
and any investment income may be returned to the society for use
by it in any lawful manner. All refunding bonds issued under
this subdivision must be issued and secured in the manner
provided by resolution of the society.
Subd. 3. [KIND OF BONDS.] Bonds issued under this section
must be negotiable investment securities within the meaning and
for all purposes of the Uniform Commercial Code, subject only to
the provisions of the bonds for registration. The bonds issued
must be limited obligations of the society not secured by its
full faith and credit and payable solely from specified sources
or assets.
Subd. 4. [RESOLUTION AND TERMS OF SALE.] The bonds of the
society must be authorized by a resolution or resolutions
adopted by the society. The bonds must bear the date or dates,
mature at the time or times, bear interest at a fixed or
variable rate, including a rate varying periodically at the time
or times and on the terms determined by the society, or any
combination of fixed and variable rates, be in the
denominations, be in the form, carry the registration
privileges, be executed in the manner, be payable in lawful
money of the United States, at the place or places within or
without the state, and be subject to the terms of redemption or
purchase before maturity as the resolutions or certificates
provide. If, for any reason existing at the date of issue of
the bonds or existing at the date of making or purchasing any
loan or securities from the proceeds or after that date, the
interest on the bonds is or becomes subject to federal income
taxation, this fact does not affect the validity or the
provisions made for the security of the bonds. The society may
make covenants and take or have taken actions that are in its
judgment necessary or desirable to comply with conditions
established by federal law or regulations for the exemption of
interest on its obligations. The society may refrain from
compliance with those conditions if in its judgment this would
serve the purposes and policies set forth in this chapter with
respect to any particular issue of bonds, unless this would
violate covenants made by the society. The maximum maturity of
a bond, whether or not issued for the purpose of refunding, must
be 30 years from its date. The bonds of the society may be sold
at public or private sale, at a price or prices determined by
the society; provided that:
(1) the aggregate price at which an issue of bonds is
initially offered by underwriters to investors, as stated in the
authority's official statement with respect to the offering,
must not exceed by more than three percent the aggregate price
paid by the underwriters to the society at the time of delivery;
(2) the commission paid by the society to an underwriter
for placing an issue of bonds with investors must not exceed
three percent of the aggregate price at which the issue is
offered to investors as stated in the society's offering
statement; and
(3) the spread or commission must be an amount determined
by the society to be reasonable in light of the risk assumed and
the expenses of issuance, if any, required to be paid by the
underwriters.
Subd. 5. [EXEMPTION.] The notes and bonds of the society
are not subject to sections 16C.03, subdivision 4, and 16C.05.
Subd. 6. [RESERVES; FUNDS; ACCOUNTS.] The society may
establish reserves, funds, or accounts necessary to carry out
the purposes of the society or to comply with any agreement made
by or any resolution passed by the society.
Subd. 7. [APPROVAL; COMMISSIONER OF FINANCE.] Before
issuing bonds under this section, the society must obtain the
approval, in writing, of the commissioner of finance.
Subd. 8. [EXPIRATION.] The authority to issue bonds, other
than bonds to refund outstanding bonds, under this section
expires July 1, 2009.
Sec. 2. [37.32] [TENDER OPTION.]
An obligation may be issued giving its owner the right to
tender or the society to demand tender of the obligation to the
society or another person designated by it, for purchase at a
specified time or times, if the society has first entered into
an agreement with a suitable financial institution obligating
the financial institution to provide funds on a timely basis for
purchase of bonds tendered. The obligation is not considered to
mature on any tender date and the purchase of a tendered
obligation is not considered a payment or discharge of the
obligation by the society. Obligations tendered for purchase
may be remarketed by or on behalf of the society or another
purchaser. The society may enter into agreements it considers
appropriate to provide for the purchase and remarketing of
tendered obligations, including:
(1) provisions under which undelivered obligations may be
considered tendered for purchase and new obligations may be
substituted for them;
(2) provisions for the payment of charges of tender agents,
remarketing agents, and financial institutions extending lines
of credit or letters of credit assuring repurchase; and
(3) provisions for reimbursement of advances under letters
of credit that may be paid from the proceeds of the obligations
or from tax and other revenues appropriated for the payment and
security of the obligations and similar or related provisions.
Sec. 3. [37.33] [BOND FUND.]
Subdivision 1. [CREATION AND CONTENTS.] The society may
establish a special fund or funds for the security of one or
more or all series of its bonds. The funds must be known as
debt service reserve funds. The society may pay into each debt
service reserve fund:
(1) the proceeds of sale of bonds to the extent provided in
the resolution or indenture authorizing the issuance of them;
(2) money directed to be transferred by the society to the
debt service reserve fund; and
(3) other money made available to the society from any
other source only for the purpose of the fund.
Subd. 2. [USE OF FUNDS.] Except as provided in this
section, the money credited to each debt service reserve fund
must be used only for the payment of the principal of bonds of
the society as they mature, the purchase of the bonds, the
payment of interest on them, or the payment of any premium
required when the bonds are redeemed before maturity. Money in
a debt service reserve fund must not be withdrawn at a time and
in an amount that reduces the amount of the fund to less than
the amount the society determines to be reasonably necessary for
the purposes of the fund. However, money may be withdrawn to
pay principal or interest due on bonds secured by the fund if
other money of the society is not available.
Subd. 3. [INVESTMENT.] Money in a debt service reserve
fund not required for immediate use may be invested in
accordance with section 37.07.
Subd. 4. [MINIMUM AMOUNT OF RESERVE AT ISSUANCE.] If the
society establishes a debt service reserve fund for the security
of any series of bonds, it shall not issue additional bonds that
are similarly secured if the amount of any of the debt service
reserve funds at the time of issuance does not equal or exceed
the minimum amount required by the resolution creating the fund,
unless the society deposits in each fund at the time of
issuance, from the proceeds of the bonds, or otherwise, an
amount that when added together with the amount then in the fund
will be at least the minimum amount required.
Subd. 5. [TRANSFER OF EXCESS.] To the extent consistent
with the resolutions and indentures securing outstanding bonds,
the society may at the close of a fiscal year transfer to any
other fund or account from any debt service reserve fund any
excess in that reserve fund over the amount determined by the
society to be reasonably necessary for the purpose of the
reserve fund.
Sec. 4. [37.34] [MONEY OF THE SOCIETY.]
The society may contract with the holders of any of its
bonds as to the custody, collection, securing, investment, and
payment of money of the society or money held in trust or
otherwise for the payment of bonds, and to carry out the
contract. Money held in trust or otherwise for the payment of
bonds or in any way to secure bonds and deposits of the money
may be secured in the same manner as money of the society, and
all banks and trust companies are authorized to give security
for the deposits.
Sec. 5. [37.35] [NONLIABILITY.]
Subdivision 1. [NONLIABILITY OF INDIVIDUALS.] No member of
the society or other person executing the bonds is liable
personally on the bonds or is subject to any personal liability
or accountability by reason of their issuance.
Subd. 2. [NONLIABILITY OF STATE.] The state is not liable
on bonds of the society issued under section 37.31 and those
bonds are not a debt of the state. The bonds must contain on
their face a statement to that effect.
Sec. 6. [37.36] [PURCHASE AND CANCELLATION BY SOCIETY.]
Subject to agreements with bondholders that may then exist,
the society may purchase out of money available for the purpose,
bonds of the society which shall then be canceled, at a price
not exceeding the following amounts:
(1) if the bonds are then redeemable, the redemption price
then applicable plus accrued interest to the next interest
payment date of the bonds; or
(2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase upon which the
bonds become subject to redemption plus accrued interest to that
date.
Sec. 7. [37.37] [STATE PLEDGE AGAINST IMPAIRMENT OF
CONTRACTS.]
The state pledges and agrees with the holders of bonds
issued under section 37.31 that the state will not limit or
alter the rights vested in the society to fulfill the terms of
any agreements made with the bondholders or in any way impair
the rights and remedies of the holders until the bonds, together
with interest on them, with interest on any unpaid installments
of interest, and all costs and expenses in connection with any
action or proceeding by or on behalf of the bondholders, are
fully met and discharged. The society may include this pledge
and agreement of the state in any agreement with the holders of
bonds issued under section 37.31.
Sec. 8. Minnesota Statutes 2002, section 373.01,
subdivision 3, is amended to read:
Subd. 3. [CAPITAL NOTES.] A county board may, by
resolution and without referendum, issue capital notes subject
to the county debt limit to purchase capital equipment useful
for county purposes that has an expected useful life at least
equal to the term of the notes. The notes shall be payable in
not more than five years and shall be issued on terms and in a
manner the board determines. A tax levy shall be made for
payment of the principal and interest on the notes, in
accordance with section 475.61, as in the case of bonds. For
purposes of this subdivision, "capital equipment" means public
safety, ambulance, road construction or maintenance, and medical
, and data processing equipment, and computer hardware and
original operating system software. The authority to issue
capital notes for original operating systems software expires on
July 1, 2005.
Sec. 9. Minnesota Statutes 2002, section 373.45,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) As used in this section,
the following terms have the meanings given.
(b) "Authority" means the Minnesota public facilities
authority.
(c) "Commissioner" means the commissioner of finance.
(d) "Debt obligation" means a general obligation bond
issued by a county, or a bond payable from a county lease
obligation under section 641.24, to provide funds for the
construction of:
(1) jails;
(2) correctional facilities;
(3) law enforcement facilities;
(4) social services and human services facilities; or
(5) solid waste facilities.
Sec. 10. Minnesota Statutes 2002, section 373.47,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORITY TO INCUR DEBT.] (a) Subject to
prior approval by the public safety radio system planning
committee under section 473.907, the governing body of a county
may finance the cost of designing, constructing, and acquiring
public safety communication system infrastructure and equipment
for use on the statewide, shared public safety radio system by
issuing:
(1) capital improvement bonds under section 373.40, as if
the infrastructure and equipment qualified as a "capital
improvement" within the meaning of section 373.40, subdivision
1, paragraph (b); and
(2) capital notes under the provisions of section 373.01,
subdivision 3, as if the equipment qualified as "capital
equipment" within the meaning of section 373.01, subdivision 3.
(b) For purposes of this section, "county" means the
following counties: Anoka, Benton, Carver, Chisago, Dakota,
Dodge, Fillmore, Freeborn, Goodhue, Hennepin, Houston, Isanti,
Mower, Olmsted, Ramsey, Rice, Scott, Sherburne, Steele, Wabasha,
Washington, Wright, and Winona.
(c) The authority to incur debt under this section is not
effective until July 1, 2003, for the following counties:
Benton, Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower,
Olmsted, Rice, Sherburne, Steele, Wabasha, Wright, and Winona.
Sec. 11. Minnesota Statutes 2002, section 376.009, is
amended to read:
376.009 [COUNTY HOSPITAL DEFINED; MAY HAVE MANY BUILDINGS,
SITES.]
For the purposes of sections 376.01 to 376.06, "county
hospital" means any hospital owned or operated by a county which
may consist of any number of buildings at one location or any
number of buildings at different locations within the
county. The county board of any county that has not established
a county hospital may by resolution authorize a statutory or
home rule charter city in the county and its city council to
exercise the powers of a county and the county board under
sections 376.01 to 376.07, in which case references in sections
376.01 to 376.07 to "county" and "county board" refer to the
city so designated and its governing body, respectively.
Sec. 12. Minnesota Statutes 2002, section 376.55,
subdivision 3, is amended to read:
Subd. 3. [FINANCING.] The county board may transfer
surplus funds from any fund except the road and bridge, sinking
or drainage ditch funds for the purpose of
establishing, acquiring, maintaining, enlarging, or adding to a
county nursing home. When surplus funds are not available for
transfer, a county board may issue bonds to pay the cost of
establishing, acquiring, equipping, furnishing, enlarging, or
adding to a county nursing home, subject to section 376.56.
Sec. 13. Minnesota Statutes 2002, section 376.55, is
amended by adding a subdivision to read:
Subd. 7. [CITY POWERS.] The county board of any county
that has not established a nursing home may by resolution
authorize a statutory or home rule charter city within the
county to exercise the powers of a county under sections 376.55
to 376.60. A city so designated may exercise within its
boundaries all the powers of a county under sections 376.55 to
376.60.
Sec. 14. Minnesota Statutes 2002, section 376.56,
subdivision 3, is amended to read:
Subd. 3. [CHAPTER 475 BONDS.] Bonds issued under section
376.55, subdivision 3, may be general obligations of the county
and may be issued and sold, and taxes levied for their payment
as provided under chapter 475. No election shall be required to
authorize the bond issue for acquiring, improving, remodeling,
or replacing an existing nursing home without increasing the
total number of accommodations for residents in all nursing
homes in the county. The revenues of the nursing home shall
also be pledged for the payment of the bonds and for any
interest and premium. Part of the proceeds may be deposited in
the debt service fund for the issue, to capitalize interest and
create a reserve to reduce or eliminate the tax otherwise
required by section 475.61 to be levied before issuing the
bonds. The remaining proceeds from the sale of the bonds and
any surplus funds transferred under section 376.55, subdivision
3 must be credited to and deposited in the county nursing home
building fund of the county in which the nursing home is located.
Sec. 15. Minnesota Statutes 2002, section 410.32, is
amended to read:
410.32 [CITIES MAY ISSUE CAPITAL NOTES TO BUY CAPITAL
EQUIPMENT.]
Notwithstanding any contrary provision of other law or
charter, a home rule charter city may, by resolution and without
public referendum, issue capital notes subject to the city debt
limit to purchase public safety equipment, ambulance and other
medical equipment, road construction and maintenance equipment,
and other capital equipment having and computer hardware and
original operating system software, provided the equipment or
software has an expected useful life at least as long as the
term of the notes. The authority to issue capital notes for
original operating system software expires on July 1, 2005. The
notes shall be payable in not more than five years and be issued
on terms and in the manner the city determines. The total
principal amount of the capital notes issued in a fiscal year
shall not exceed 0.03 percent of the market value of taxable
property in the city for that year. A tax levy shall be made
for the payment of the principal and interest on the notes, in
accordance with section 475.61, as in the case of bonds. Notes
issued under this section shall require an affirmative vote of
two-thirds of the governing body of the city. Notwithstanding a
contrary provision of other law or charter, a home rule charter
city may also issue capital notes subject to its debt limit in
the manner and subject to the limitations applicable to
statutory cities pursuant to section 412.301.
Sec. 16. [475.521] [CAPITAL IMPROVEMENT BONDS.]
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given.
(a) "Bonds" mean an obligation defined under section 475.51.
(b) "Capital improvement" means acquisition or betterment
of public lands, buildings or other improvements for the purpose
of a city hall, public safety facility, and public works
facility. An improvement must have an expected useful life of
five years or more to qualify. Capital improvement does not
include light rail transit or any activity related to it, or a
park, library, road, bridge, administrative building other than
a city hall, or land for any of those facilities.
(c) "City" means a home rule charter or statutory city.
Subd. 2. [ELECTION REQUIREMENT.] (a) Bonds issued by a
city to finance capital improvements under an approved capital
improvements plan are not subject to the election requirements
of section 475.58. The bonds are subject to the net debt limits
under section 475.53. The bonds must be approved by an
affirmative vote of three-fifths of the members of a five-member
city council. In the case of a city council having more than
five members, the bonds must be approved by a vote of at least
two-thirds of the city council.
(b) Before the issuance of bonds qualifying under this
section, the city must publish a notice of its intention to
issue the bonds and the date and time of the hearing to obtain
public comment on the matter. The notice must be published in
the official newspaper of the city or in a newspaper of general
circulation in the city. Additionally, the notice may be posted
on the official Web site, if any, of the city. The notice must
be published at least 14 but not more than 28 days before the
date of the hearing.
(c) A city may issue the bonds only after obtaining the
approval of a majority of the voters voting on the question of
issuing the obligations, if a petition requesting a vote on the
issuance is signed by voters equal to five percent of the votes
cast in the city in the last general election and is filed with
the city clerk within 30 days after the public hearing. The
commissioner of revenue shall prepare a suggested form of the
question to be presented at the election.
Subd. 3. [CAPITAL IMPROVEMENT PLAN.] (a) A city may adopt
a capital improvement plan. The plan must cover at least a
five-year period beginning with the date of its adoption. The
plan must set forth the estimated schedule, timing, and details
of specific capital improvements by year, together with the
estimated cost, the need for the improvement, and sources of
revenue to pay for the improvement. In preparing the capital
improvement plan, the city council must consider for each
project and for the overall plan:
(1) the condition of the city's existing infrastructure,
including the projected need for repair or replacement;
(2) the likely demand for the improvement;
(3) the estimated cost of the improvement;
(4) the available public resources;
(5) the level of overlapping debt in the city;
(6) the relative benefits and costs of alternative uses of
the funds;
(7) operating costs of the proposed improvements; and
(8) alternatives for providing services most efficiently
through shared facilities with other cities or local government
units.
(b) The capital improvement plan and annual amendments to
it must be approved by the city council after public hearing.
Subd. 4. [LIMITATIONS ON AMOUNT.] A city may not issue
bonds under this section if the maximum amount of principal and
interest to become due in any year on all the outstanding bonds
issued under this section, including the bonds to be issued,
will equal or exceed 0.05367 percent of taxable market value of
property in the county. Calculation of the limit must be made
using the taxable market value for the taxes payable year in
which the obligations are issued and sold. This section does
not limit the authority to issue bonds under any other special
or general law.
Subd. 5. [APPLICATION OF CHAPTER 475.] Bonds to finance
capital improvements qualifying under this section must be
issued under the issuance authority in chapter 475 and the
provisions of chapter 475 apply, except as otherwise
specifically provided in this section.
Sec. 17. Minnesota Statutes 2002, section 412.301, is
amended to read:
412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.]
The council may issue certificates of indebtedness or
capital notes subject to the city debt limits to purchase public
safety equipment, ambulance equipment, road construction or
maintenance equipment, and other capital equipment having and
computer hardware and original operating system software,
provided the equipment or software has an expected useful life
at least as long as the terms of the certificates or notes. The
authority to issue capital notes for original operating system
software expires on July 1, 2005. Such certificates or notes
shall be payable in not more than five years and shall be issued
on such terms and in such manner as the council may determine.
If the amount of the certificates or notes to be issued to
finance any such purchase exceeds 0.25 percent of the market
value of taxable property in the city, they shall not be issued
for at least ten days after publication in the official
newspaper of a council resolution determining to issue them; and
if before the end of that time, a petition asking for an
election on the proposition signed by voters equal to ten
percent of the number of voters at the last regular municipal
election is filed with the clerk, such certificates or notes
shall not be issued until the proposition of their issuance has
been approved by a majority of the votes cast on the question at
a regular or special election. A tax levy shall be made for the
payment of the principal and interest on such certificates or
notes, in accordance with section 475.61, as in the case of
bonds.
Sec. 18. [469.0772] [KOOCHICHING COUNTY; PORT AUTHORITY.]
Subdivision 1. [AUTHORITY TO ESTABLISH.] The governing
body of the county of Koochiching may establish a port authority
that has the same powers as a port authority established under
section 469.049. If the county establishes a port authority,
the governing body of the county shall exercise all powers
granted to a city by sections 469.048 to 469.068 or other law.
Any city in Koochiching county may participate in the activities
of the county port authority under terms jointly agreed to by
the city and county.
Subd. 2. [FOREIGN TRADE ZONE.] Koochiching county or any
city, town, or other political subdivision located in
Koochiching county may apply to the board defined in United
States Code, title 19, section 81a, for the right to use the
powers provided in United States Code, title 19, sections 81a
and 81u. If the right is granted the city, town, or other
political subdivision may use the powers within or outside of a
port district. The county, a city, town, or other political
subdivision may apply jointly with any other city, town, or
political subdivision located in Koochiching county.
Sec. 19. Minnesota Statutes 2002, section 469.1813,
subdivision 8, is amended to read:
Subd. 8. [LIMITATION ON ABATEMENTS.] In any year, the
total amount of property taxes abated by a political subdivision
under this section may not exceed (1) five ten percent of the
current levy, or (2) $100,000 $200,000, whichever is greater.
Sec. 20. Minnesota Statutes 2002, section 473.39, is
amended by adding a subdivision to read:
Subd. 1j. [OBLIGATIONS.] After July 1, 2003, in addition
to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, and
1i, the council may issue certificates of indebtedness, bonds,
or other obligations under this section in an amount not
exceeding $45,000,000 for capital expenditures as prescribed in
the council's regional transit master plan and transit capital
improvement program and for related costs, including the costs
of issuance and sale of the obligations.
[APPLICATION.] This section applies to the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 21. Minnesota Statutes 2002, section 473.898,
subdivision 3, is amended to read:
Subd. 3. [LIMITATIONS.] (a) The principal amount of the
bonds issued pursuant to subdivision 1, exclusive of any
original issue discount, shall not exceed the amount of
$10,000,000 plus the amount the council determines necessary to
pay the costs of issuance, fund reserves, debt service, and pay
for any bond insurance or other credit enhancement.
(b) In addition to the amount authorized under paragraph
(a), the council may issue bonds under subdivision 1 in a
principal amount of $3,306,300, plus the amount the council
determines necessary to pay the cost of issuance, fund reserves,
debt service, and any bond insurance or other credit
enhancement. The proceeds of bonds issued under this paragraph
may not be used to finance portable or subscriber radio sets.
(c) In addition to the amount authorized under paragraphs
(a) and (b), the council may issue bonds under subdivision 1 in
a principal amount of $12,000,000, plus the amount the council
determines necessary to pay the costs of issuance, fund
reserves, debt service, and any bond insurance or other credit
enhancement. The proceeds of bonds issued under this paragraph
must be used to pay up to 30 percent of the cost to a local
government unit of building a subsystem and may not be used to
finance portable or subscriber radio sets. The bond proceeds
may be used to make improvements to an existing 800 MHz radio
system that will interoperate with the regionwide public safety
radio communication system, provided that the improvements
conform to the board's plan and technical standards. The
council must time the sale and issuance of the bonds so that the
debt service on the bonds can be covered by the additional
revenue that will become available in the fiscal year ending
June 30, 2005, generated under section 403.11 and appropriated
under section 473.901.
Sec. 22. Minnesota Statutes 2002, section 474A.061,
subdivision 1, is amended to read:
Subdivision 1. [ALLOCATION APPLICATION.] (a) An issuer may
apply for an allocation under this section by submitting to the
department an application on forms provided by the department,
accompanied by (1) a preliminary resolution, (2) a statement of
bond counsel that the proposed issue of obligations requires an
allocation under this chapter and the Internal Revenue Code, (3)
the type of qualified bonds to be issued, (4) an application
deposit in the amount of one percent of the requested allocation
before the last Monday in July, or in the amount of two percent
of the requested allocation on or after the last Monday in July,
(5) a public purpose scoring worksheet for manufacturing project
and enterprise zone facility project applications, and (6) for
residential rental projects, a statement from the applicant or
bond counsel as to whether the project preserves existing
federally subsidized housing for residential rental project
applications and whether the project is restricted to persons
who are 55 years of age or older. The issuer must pay the
application deposit by a check made payable to the department of
finance. The Minnesota housing finance agency, the Minnesota
rural finance authority, and the Minnesota higher education
services office may apply for and receive an allocation under
this section without submitting an application deposit.
(b) An entitlement issuer may not apply for an allocation
from the housing pool or from the public facilities pool unless
it has either permanently issued bonds equal to the amount of
its entitlement allocation for the current year plus any amount
of bonding authority carried forward from previous years or
returned for reallocation all of its unused entitlement
allocation. An entitlement issuer may not apply for an
allocation from the housing pool unless it either has
permanently issued bonds equal to any amount of bonding
authority carried forward from a previous year or has returned
for reallocation all of its unused entitlement allocation. For
purposes of this subdivision, its entitlement allocation
includes an amount obtained under section 474A.04, subdivision
6. This paragraph does not apply to an application from the
Minnesota housing finance agency for an allocation under
subdivision 2a for cities who choose to have the agency issue
bonds on their behalf.
(c) If an application is rejected under this section, the
commissioner must notify the applicant and return the
application deposit to the applicant within 30 days unless the
applicant requests in writing that the application be
resubmitted. The granting of an allocation of bonding authority
under this section must be evidenced by a certificate of
allocation.
Sec. 23. Minnesota Statutes 2002, section 475.58,
subdivision 3b, is amended to read:
Subd. 3b. [STREET RECONSTRUCTION.] (a) A municipality may,
without regard to the election requirement under subdivision 1,
issue and sell obligations for street reconstruction, if the
following conditions are met:
(1) the streets are reconstructed under a street
reconstruction plan that describes the streets to be
reconstructed, the estimated costs, and any planned
reconstruction of other streets in the municipality over the
next five years, and the plan and issuance of the obligations
has been approved by a vote of all of the members of the
governing body following a public hearing for which notice has
been published in the official newspaper at least ten days but
not more than 28 days prior to the hearing; and
(2) if a petition requesting a vote on the issuance is
signed by voters equal to five percent of the votes cast in the
last municipal general election and is filed with the municipal
clerk within 30 days of the public hearing, the municipality may
issue the bonds only after obtaining the approval of a majority
of the voters voting on the question of the issuance of the
obligations.
(b) Obligations issued under this subdivision are subject
to the debt limit of the municipality and are not excluded from
net debt under section 475.51, subdivision 4.
For purposes of this subdivision, street reconstruction includes
utility replacement and relocation and other activities
incidental to the street reconstruction, but does not include
the portion of project cost allocable to widening a street or
adding curbs and gutters where none previously existed.
Sec. 24. Laws 1967, chapter 558, section 1, subdivision 5,
as amended by Laws 1979, chapter 135, section 1, and Laws 1985,
chapter 98, section 2, is amended to read:
Subd. 5. Promotion of tourist, agricultural and industrial
developments. The amount to be spent annually for the purposes
of this subdivision shall not exceed one dollar five dollars per
capita of the county's population.
[EFFECTIVE DATE; LOCAL APPROVAL.] This section is effective
the day after the governing body of Beltrami county and its
chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
Sec. 25. [BONDS ISSUANCE VALIDATED.]
The provisions of Minnesota Statutes, sections 373.47,
subdivision 1, and 473.907, subdivision 3, requiring prior
review and approval by the public radio safety planning
committee do not apply to the general obligation bonds issued by
Anoka county in a principal amount of $10,500,000 on November
20, 2002.
[EFFECTIVE DATE.] This section is effective upon compliance
by the governing body of Anoka county with the provisions of
Minnesota Statutes, section 645.021.
Sec. 26. [BUFFALO; CITY BONDS FOR HIGHWAY 55.]
The city of Buffalo may issue up to $1,300,000 of its
general obligation bonds to pay for the city's share of costs of
reconstruction and upgrading of that part of Minnesota trunk
highway marked 55 that lies within the city of Buffalo.
The bonds must be issued and sold in accordance with
Minnesota Statutes, chapter 475, except that the debt need not
be included within any limit on net debt imposed by Minnesota
Statutes, chapter 475, and no election is required to authorize
the bond issue.
Notwithstanding any other law, including any law enacted
during the 2003 legislative session whether enacted before or
after the enactment of this act, the debt or debt service on
bonds issued under this section is excluded from any levy or
other taxing limits and is not spending or revenue for purposes
of calculating local government aids or local government aids
reductions.
[EFFECTIVE DATE.] This section is effective the day after
the governing body of Buffalo and its chief clerical officer
timely complete their compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
Sec. 27. [CORPORATE STATUS FOR CERTAIN FEDERAL TAX LAW.]
For purposes of section 1.103-1 of the federal income tax
regulations, Lewis and Clark Rural Water System, Inc. is hereby
recognized as a corporation authorized to act on behalf of its
members, including its Minnesota member governmental units, to
provide drinking water to their communities and to issue debt
obligations in its own name on behalf of some or all of its
members, provided that Minnesota member governmental units are
not liable for the payment of principal of or interest on such
obligations.
Sec. 28. [NURSING HOME BONDS AUTHORIZED.]
Itasca county may issue bonds under Minnesota Statutes,
sections 376.55 and 376.56, to finance the construction of a
35-bed nursing home facility to replace an existing 35-bed
private facility located in the county. The bonds issued under
this section must be payable solely from revenues and may not be
general obligations of the county.
[EFFECTIVE DATE.] This section is effective the day after
the governing body of Itasca county and its chief clerical
officer timely complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
Sec. 29. [VALIDATION OF APPROVAL.]
Notwithstanding Minnesota Statutes, section 645.021,
subdivision 3, Laws 1980, chapter 569, sections 2 through 8,
approved by the board of directors of local government
information systems by resolution adopted on July 30, 1980, are
effective as of July 1, 1980, and apply to obligations issued by
local government information systems after April 1, 2003.
Sec. 30. [KANDIYOHI COUNTY AND CITY OF WILLMAR.]
Subdivision 1. [POWERS.] Notwithstanding Minnesota
Statutes, sections 469.090 and 469.1082, Kandiyohi county may
exercise the powers of a city under Minnesota Statutes, sections
469.090 to 469.107. Kandiyohi county and the city of Willmar
may enter into a joint powers agreement under Minnesota
Statutes, section 471.59, to jointly or cooperatively exercise
any of the powers common to both the county and the city under
Minnesota Statutes, sections 469.090 to 469.107, in a manner to
be determined by a majority of the Kandiyohi county board and
the Willmar city council.
Subd. 2. [SPECIAL TAXING DISTRICT.] A joint powers entity
created under subdivision 1 is a political subdivision of the
state and a special taxing district as defined by Minnesota
Statutes, section 275.066, clause (24), with the power to adopt
and certify a property tax levy to the county auditor. The
maximum allowable levy limit for this special taxing district is
the same levy limit as provided under Minnesota Statutes,
section 469.107, subdivision 1, and, to the extent levied, shall
replace the levy authorized under subdivision 1 for Kandiyohi
county and the city of Willmar.
Subd. 3. [EFFECTIVE DATE; NO LOCAL APPROVAL REQUIRED.]
This section is effective the day after final enactment.
Sec. 31. [MINNEAPOLIS COMMUNITY PLANNING AND ECONOMIC
DEVELOPMENT DEPARTMENT.]
Subdivision 1. Notwithstanding a contrary provision of
law, the charter of the city of Minneapolis, or its civil
service rules, the city council of the city of Minneapolis may,
by ordinance:
(1) establish a department of the city to be designated as
the community planning and economic development department, or
another name as the city designates by ordinance. The term "the
department" as used in sections 31 to 33 means the community
planning and economic development department established under
this subdivision;
(2) transfer to the department the community development
and planning duties and functions of any other department or
office of the city of Minneapolis, including the employees
performing those duties and functions. If the duties and
functions of the city planning department are transferred to the
department, the department must perform the administrative
duties that were formerly performed by the city's planning
department on behalf of or at the request of the city's planning
commission;
(3) transfer any positions of the Minneapolis community
development agency to the city of Minneapolis. The ordinance
may provide the process for establishing, classifying, and
describing the duties for the transferred positions. Employees
of the Minneapolis community development agency who are not in
the classified service of the city of Minneapolis may be
transferred to the city of Minneapolis, and the city council may
transfer the employees into the classified service of the city
of Minneapolis and into positions for which the employees are
qualified, as determined by the city council;
(4) establish the position of director of the department in
the unclassified service of the city, and establish other
unclassified positions as necessary. Unclassified positions,
other than the director, must meet the following criteria:
(i) the person occupying the position must report to the
director or a deputy director;
(ii) the person occupying the position must be part of the
director's management team;
(iii) the duties of the position must involve significant
discretion and substantial involvement in the development,
interpretation, or implementation of city or department policy;
(iv) the duties of the position must not primarily require
technical expertise where continuity in the position would be
significant; and
(v) the person occupying the position must be accountable
to, loyal to, and compatible with the mayor, the city council,
and the director; and
(5) establish the terms and conditions of employment for
employees of the department.
Subd. 2. The employees of the department are employees of
the city of Minneapolis for the purposes of membership in the
public employees retirement association. An employee
transferred from the Minneapolis community development agency to
the city of Minneapolis must elect within six months of the
effective date of the transfer to either continue as a member of
the retirement program in which the employee participated on the
date of the employee's transfer to the city of Minneapolis or to
become a member of the public employees retirement association.
This election is irrevocable. An employee who was a member of
the Minneapolis employees retirement fund on the date of the
employee's transfer to the city of Minneapolis may continue as a
member of that fund retaining all vested rights, constructive
time, and employee and employer contributions made on the
employee's behalf to that fund. The city of Minneapolis must
make the required employer contributions to the elected
retirement program. An employee electing to become a member of
the public employees retirement association may enroll in the
association with vested rights based upon the employee's current
tenure as an employee of the Minneapolis community development
agency, but that tenure does not constitute allowable service
for purposes of determining benefits.
Subd. 3. The terms of a collective bargaining agreement
that is in effect between the Minneapolis community development
agency and its employees, some or all of whom may be transferred
to the city of Minneapolis, are binding upon the city of
Minneapolis and the employees for the term of the contract.
Subd. 4. An employee electing under subdivision 2 to
become a member of the public employees retirement association
may purchase allowable service credit from the association by
paying to the association an amount calculated under Minnesota
Statutes, section 356.55. The service credit that is
purchasable is a period or periods of employment by the
Minneapolis community development agency that would have been
eligible service for coverage by the general employees
retirement plan of the public employees retirement association
if the service had been rendered after the effective date of
this article. A person electing to purchase service credit
under this subdivision must provide any documentation of prior
service required by the executive director of the public
employees retirement association. Notwithstanding any provision
of Minnesota Statutes, section 356.55, to the contrary, the
prior service credit purchase payment may be made in whole or in
part on an institution-to-institution basis from a plan
qualified under the federal Internal Revenue Code, section
401(a), 401(k), or 414(h), or from an annuity qualified under
the federal Internal Revenue Code, section 403, or from a
deferred compensation plan under the federal Internal Revenue
Code, section 457, to the extent permitted by federal law. In
no event may a prior service credit purchase transfer be paid
directly to the person purchasing the service.
Sec. 32. [AUTHORITY.]
Subdivision 1. Notwithstanding a contrary law or provision
of the Minneapolis city charter, the city council may exercise
the powers granted by Minnesota Statutes, sections 469.001 to
469.134, and 469.152 to 469.1799, and any other powers granted
to a city of the first class, except for powers relating to
public housing. In exercising the powers authorized by this
section, the city of Minneapolis shall be the authority, agency,
or redevelopment agency referred to in Minnesota Statutes,
sections 469.001 to 469.134, and 469.152 to 469.1799, and the
city council of the city of Minneapolis shall be the governing
body or board of commissioners of the authority, agency, or
redevelopment agency. The city council may exercise the powers
authorized by this subdivision; by Laws 1980, chapter 595, as
amended; by Laws 1990, chapter 604, article 7, section 29, as
amended by Laws 1991, chapter 291, article 10, section 20; and
may exercise any other development or redevelopment powers
authorized by law, independently, or in conjunction with each
other, as though all of the authorized powers had been granted
to a single entity. But a program, project, or district
authorized by the city under Minnesota Statutes, sections
469.001 to 469.134, and 469.152 to 469.l799, is subject to the
limitations of the program, project, or district imposed by
Minnesota Statutes, sections 469.001 to 469.134, and 469.152 to
469.1799.
Subd. 2. The city council may delegate to the department
any of the powers granted to the city of Minneapolis under
subdivision 1, except the power to tax and the power to issue
bonds, notes, or other obligations of the city of Minneapolis.
Subd. 3. Notwithstanding a contrary law or provision of
the Minneapolis city charter, money, investments, real property,
personal property, assets, programs, projects, districts,
developments, or obligations of the Minneapolis community
development agency may be transferred by resolution of the city
council to the city of Minneapolis and be made subject to the
control, authority, and operation of the department. If a
transfer is made, the city of Minneapolis is bound by the
contractual obligations of the Minneapolis community development
agency with respect to the money, investments, real estate,
personal property, assets, programs, projects, districts,
developments, or obligations, including the obligations of any
bonds, notes, or other debt obligations of the Minneapolis
community development agency. The pledge of the full faith and
credit of the Minneapolis community development agency to any
bonds, notes, or other debt obligations of the Minneapolis
community development agency that are transferred to the city of
Minneapolis shall not be secured by the full faith and credit of
the city of Minneapolis and shall not be secured by the taxing
powers of the city of Minneapolis but only by the assets pledged
by the Minneapolis community development agency to the payment
of the bonds, notes, or other debt obligations. The city
council is granted the powers necessary to perform the
contractual obligations transferred to the city of Minneapolis.
Subd. 4. The city council may pledge to the payment of
bonds, notes, or other obligations of the city of Minneapolis
revenues, assets, reserves, or other property transferred to the
city of Minneapolis under this section.
Subd. 5. The city council may pledge to the payment of
bonds, notes, or other obligations of the city of Minneapolis
the full faith and credit of the city of Minneapolis, or the
taxing power of the city of Minneapolis, to finance programs,
projects, districts, developments, facilities, or activities
undertaken by the department.
Subd. 6. Unless prohibited by other law or a contractual
obligation including a pledge to the owners of bonds, notes, or
other indebtedness, the money and investments of the Minneapolis
community development agency transferred to the city of
Minneapolis under this section may be deposited in any fund or
account of the city of Minneapolis.
Subd. 7. If all money, investments, real property,
personal property, assets, programs, projects, districts,
developments, or obligations of the Minneapolis community
development agency are transferred to the city of Minneapolis,
the city council may, by resolution, dissolve the Minneapolis
community development agency. Any rights, duties, claims,
awards, grants, or liabilities that may arise after the
dissolution of the Minneapolis community development agency
shall constitute rights, duties, claims, awards, grants, or
liabilities of the city of Minneapolis. The pledge of the full
faith and credit of the Minneapolis community development agency
to any bonds, notes, or other debt obligations of the
Minneapolis community development agency that are transferred to
the city of Minneapolis shall not be secured by the full faith
and credit or the taxing powers of the city of Minneapolis but
shall be secured only by the assets pledged by the Minneapolis
community development agency to the payment of the bonds, notes,
or other debt obligations.
Subd. 8. If the city of Minneapolis exercises its powers
for industrial development or establishes industrial development
districts under Minnesota Statutes, sections 469.048 to 469.068,
the term "industrial," when used in relation to industrial
development, includes economic and economic development and
housing and housing development.
Sec. 33. [LIMITATIONS.]
Subdivision 1. Bonds, notes, or other obligations issued
to finance or refinance a program, project, district,
development, facility, or activity of the department must be
issued by the city council, or, at the request of the city
council, by the board of estimate and taxation of the city of
Minneapolis. The limitations of this section must not be
applied in a manner that impairs the security of bonds, notes,
or other obligations issued before the imposition of the
limitations.
Subd. 2. Unless otherwise provided in sections 31 to 33,
all actions of the city council under sections 31 to 33 are
actions within chapter 3, section 1, of the charter of the city
of Minneapolis.
Sec. 34. [EFFECTIVE DATE; LOCAL APPROVAL.]
Sections 31 to 33 are effective the day after the governing
body of the city of Minneapolis and its chief clerical officer
timely complete their compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
Sec. 35. [DEFINITIONS.]
Subdivision 1. [DEFINITIONS.] For the purposes of sections
35 to 41, the terms defined in this section have the following
meanings.
Subd. 2. [LAKES AREA ECONOMIC DEVELOPMENT
AUTHORITY.] "Lakes area economic development authority" or
"authority" means the lakes area economic authority established
as provided in section 36.
Subd. 3. [PERSON.] "Person" means an individual,
partnership, corporation, cooperative, or other organization or
entity, public or private.
Subd. 4. [MEMBER.] "Member" means the city of Alexandria
or Garfield or the township of Alexandria or La Grand, or any
other municipality, the geographic area of which is included
within the jurisdiction of the authority.
Subd. 5. [MUNICIPALITY.] "Municipality" means a statutory
or home rule charter city or town located in Douglas county.
Sec. 36. [LAKES AREA ECONOMIC DEVELOPMENT AUTHORITY.]
Subdivision 1. [ESTABLISHMENT.] A lakes area economic
development authority with jurisdiction over the geographic area
of its members is established as a public corporation and
political subdivision of the state with perpetual succession and
all the rights, powers, privileges, immunities, and duties that
may be validly granted to or imposed upon a municipal
corporation, as provided in sections 35 to 41.
Subd. 2. [BOARD OF COMMISSIONERS.] The authority is
governed by a board of commissioners to be selected as follows:
the mayor of each member city, and the chair of the town board
of each member town shall appoint one commissioner, subject to
the approval of the respective city council or town board. The
terms of the commissioner are as provided in subdivision 5.
Subd. 3. [TIME LIMITS FOR SELECTION, ALTERNATIVE
APPOINTMENT BY DISTRICT JUDGE.] The initial appointment of
commissioners must be made no later than 60 days after sections
35 to 41 become effective. Subsequent appointments must be made
within 60 days before the expiration of a term in the same
manner as the predecessor was selected. A vacancy on the board
must be filled within 60 days after it occurs. If a selection
is not made within the prescribed time, the chief judge of the
seventh judicial district of the Minnesota district court on
application by an interested person shall appoint an eligible
person to the board.
Subd. 4. [VACANCIES.] If a vacancy occurs in the office of
commissioner, the vacancy must be filled for the unexpired term
in a like manner as provided for selection of the commissioner
who vacated the office. The office must be considered vacant
under the conditions specified in Minnesota Statutes, section
351.02.
Subd. 5. [TERMS OF OFFICE.] The terms of the initial
appointees to the board of commissioners are for three, four,
five, and six years and must be established by lot among the
initial four commissioners. The mayor or town board chair of
any new member added under section 39 shall designate the term,
not to exceed six years, of the first commissioner selected to
represent the member. Succeeding terms of all commissioners are
six years, except that each commissioner serves until a
successor has been duly selected and qualified.
Subd. 6. [REMOVAL.] A commissioner may be removed by the
unanimous vote of the appointing governing body, with or without
cause.
Subd. 7. [QUALIFICATIONS.] A commissioner may, but need
not, be a resident of the territory of the member appointing
that commissioner.
Subd. 8. [COMPENSATION.] A commissioner must be paid a per
diem compensation for attending a regular or special meeting in
an amount determined by the board. A commissioner must be
reimbursed for all reasonable expenses incurred in the
performance of the commissioner's duties as determined by the
board.
Sec. 37. [POWERS; APPLICATION OF EDA LAW.]
Subdivision 1. [USE OF EDA POWERS.] Except as otherwise
provided in sections 35 to 41, the authority may exercise any of
the powers of an economic development authority (EDA) provided
by Minnesota Statutes, sections 469.090 to 469.1082, and for
this purpose the term "city" means a member. Minnesota
Statutes, sections 469.096 to 469.101, 469.103 to 469.106, and
469.108 to 469.1081, apply to the authority, except that the
authority's fiscal year is the calendar year.
Subd. 2. [LAW THAT IS NOT APPLICABLE.] The provisions in:
(1) Minnesota Statutes, section 469.091, subdivision 1,
expressly relating to:
(i) the adoption of an enabling resolution;
(ii) Minnesota Statutes, section 469.092; or
(iii) housing and redevelopment authorities; and
(2) Minnesota Statutes, sections 469.093, 469.095, 469.102,
and 469.107;
do not apply to the authority.
Sec. 38. [MEMBERS MUST LEVY TAXES FOR AUTHORITY.]
(a) A member shall, at the request of the authority, levy a
tax in any year for the benefit of the authority. The tax is,
for each member, a pro rata portion of the total amount of tax
requested by the authority based on the taxable market value
within a member's jurisdiction, but in no event may the tax in
any year exceed 0.01813 percent of taxable market value. For
purposes of this section, "taxable market value" has the meaning
as given in Minnesota Statutes, section 273.032.
(b) The treasurer of each member city or town shall, within
15 days after receiving the property tax settlements from the
county treasurer, pay to the treasurer of the authority the
amount collected for this purpose. The money must be used by
the authority for the purposes provided by sections 35 to 41.
Sec. 39. [ADDITION AND WITHDRAWAL OF MEMBERS.]
Subdivision 1. [ADDITIONS.] A municipality upon a
resolution adopted by a four-fifths vote of all of its governing
body may petition the authority to be included within the
jurisdiction of the authority and, if approved by the authority,
the geographic area of the municipality must be included within
the jurisdiction of the authority and subject to the
jurisdiction of the authority under sections 35 to 41.
Subd. 2. [WITHDRAWALS.] A municipality may withdraw from
the authority by resolution of its governing body. The
municipality must notify the board of commissioners of the
authority of the withdrawal by providing a copy of the
resolution at least two years in advance of the proposed
withdrawal. Unless the authority and the withdrawing member
agree otherwise by action of their governing bodies, the taxable
property of the withdrawing member is subject to the property
tax levy under section 38 for two taxes payable years following
the notification of the withdrawal and the withdrawing member
retains any rights, obligations, and liabilities obtained or
incurred during its participation.
Sec. 40. [CONTRACTS WITH NONPROFIT CORPORATIONS.]
The authority may enter into contracts with one or more
nonprofit corporations to make, from funds of and under
guidelines set by the authority, loans or grants for projects
the authority may undertake under sections 35 to 41. Minnesota
Statutes, section 465.719, does not apply so long as the
nonprofit corporation is not described in Minnesota Statutes,
section 465.719, subdivision 1, paragraph (b), item (i), or (b),
item (ii).
Sec. 41. [RELATION TO EXISTING LAWS.]
Sections 35 to 41 must be given full effect notwithstanding
any law or charter that is inconsistent with them.
Sec. 42. [LOCAL APPROVAL; EFFECTIVE DATE.]
Sections 35 to 41 are only effective as to all affected
governing bodies on the day after the last of the governing
bodies or town boards of the cities of Alexandria and Garfield
and the towns of Alexandria and La Grand in Douglas county and
the chief clerical officer of each of them timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
ARTICLE 13
MOSQUITO CONTROL DISTRICT
Section 1. Minnesota Statutes 2002, section 18B.07,
subdivision 2, is amended to read:
Subd. 2. [PROHIBITED PESTICIDE USE.] (a) A person may not
use, store, handle, distribute, or dispose of a pesticide,
rinsate, pesticide container, or pesticide application equipment
in a manner:
(1) that is inconsistent with a label or labeling as
defined by FIFRA;
(2) that endangers humans, damages agricultural products,
food, livestock, fish, or wildlife; or
(3) that will cause unreasonable adverse effects on the
environment.
(b) A person may not direct a pesticide onto property
beyond the boundaries of the target site. A person may not
apply a pesticide resulting in damage to adjacent property.
(c) A person may not directly apply a pesticide on a human
by overspray or target site spray, except when:
(1) the pesticide is intended for use on a human;
(2) the pesticide application is for mosquito control
operations conducted before June 30, 2003, in compliance with
paragraph (d), clauses (1) and (2);
(3) the pesticide application is for control of gypsy moth,
forest tent caterpillar, or other pest species, as determined by
the commissioner, and the pesticide used is a biological agent;
or
(4) the pesticide application is for a public health risk,
as determined by the commissioner of health, and the
commissioner of health, in consultation with the commissioner of
agriculture, determines that the application is warranted based
on the commissioner's balancing of the public health risk with
the risk that the pesticide application poses to the health of
the general population, with special attention to the health of
children.
(d) For pesticide applications under paragraph (c), clause
(2), the following conditions apply:
(1) no practicable and effective alternative method of
control exists;
(2) the pesticide is among the least toxic available for
control of the target pest; and
(3) notification to residents in the area to be treated is
provided at least 24 hours before application through direct
notification, posting daily on the treating organization's Web
site, and by sending a broadcast e-mail to those persons who
request notification of such, of those areas to be treated by
adult mosquito control techniques during the next calendar day.
For control operations related to human disease, notice under
this paragraph may be given less than 24 hours in advance.
(e) For pesticide applications under paragraph (c), clauses
(3) and (4), the following conditions apply:
(1) no practicable and effective alternative method of
control exists;
(2) the pesticide is among the least toxic available for
control of the target pest; and
(3) notification of residents in the area to be treated is
provided by direct notification and through publication in a
newspaper of general circulation within the affected area.
(e) (f) For purposes of this subdivision, "direct
notification" may include mailings, public meetings, posted
placards, neighborhood newsletters, or other means of contact
designed to reach as many residents as possible.
(f) (g) A person may not apply a pesticide in a manner so
as to expose a worker in an immediately adjacent, open field.
Sec. 2. Minnesota Statutes 2002, section 473.702, is
amended to read:
473.702 [ESTABLISHMENT OF DISTRICT; PURPOSE; AREA;
GOVERNING BODY.]
A metropolitan mosquito control district is created to
control mosquitoes, disease vectoring ticks, and black gnats
(Simuliidae) in the metropolitan area. The area of the district
is the metropolitan area defined in section 473.121. The area
of the district is the metropolitan area excluding the part of
Carver county west of the west line of township 116N, range 24W,
township 115N, range 24W, and township 114N, range 24W. The
metropolitan mosquito control commission is created as the
governing body of the district, composed and exercising the
powers as prescribed in sections 473.701 to 473.716.
Sec. 3. Minnesota Statutes 2002, section 473.703,
subdivision 1, is amended to read:
Subdivision 1. [METRO COUNTY COMMISSIONERS.] The district
shall be operated by a commission which shall consist of three
members from Anoka county, one member two members from Carver
county, three members from Dakota county, three members from
Hennepin county, three members from Ramsey county, two members
from Scott county, and two members from Washington county.
Commissioners shall be members of the board of county
commissioners of their respective counties, and shall be
appointed by their respective boards of county commissioners.
Sec. 4. Minnesota Statutes 2002, section 473.704,
subdivision 17, is amended to read:
Subd. 17. [ENTRY TO PROPERTY.] (a) Members of the
commission, its officers, and employees, while on the business
of the commission, may enter upon any property within or outside
the district at reasonable times to determine the need for
control programs. They may take all necessary and proper steps
for the control programs on property within the district as the
director of the commission may designate. Subject to the
paramount control of the county and state authorities,
commission members and officers and employees of the commission
may enter upon any property and clean up any stagnant pool of
water, the shores of lakes and streams, and other breeding
places for mosquitoes within the district. The commission may
apply insecticides approved by the director to any area within
or outside the district that is found to be a breeding place for
mosquitoes. The commission shall give reasonable notification
to the governing body of the local unit of government prior to
applying insecticides outside of the district on land located
within the jurisdiction of the local unit of government. The
commission shall not enter upon private property if the owner
objects except to monitor for disease-bearing mosquitoes, ticks,
or black gnats or for control of disease bearing mosquito
encephalitis outbreaks mosquito species capable of carrying a
human disease in the local area of a human disease outbreak
regardless of whether there has been an occurrence of the
disease in a human being.
(b) The commissioner of natural resources must approve
mosquito control plans or make modifications as the commissioner
of natural resources deems necessary for the protection of
public water, wild animals, and natural resources before control
operations are started on state lands administered by the
commissioner of natural resources. Until July 1, 2002, approval
may, if the commissioner of natural resources considers it
necessary, be denied, modified, or revoked by the commissioner
of natural resources at any time upon written notice to the
commission.
Sec. 5. Minnesota Statutes 2002, section 473.705, is
amended to read:
473.705 [CONTRACTS FOR MATERIALS, SUPPLIES AND EQUIPMENT.]
No contract Contracts for the purchase of materials,
supplies, and equipment costing more than $5,000 shall be made
must comply with and be governed by the Minnesota uniform
municipal contracting law, section 471.345. A sealed bid
solicitation must not be done by the commission without
publishing the notice once in the official newspaper of each of
the counties in the district that bids or proposals will be
received. The notice shall be published at least ten days
before bids are opened. Such notice shall state the nature of
the work or purchase and the terms and conditions upon which the
contract is to be awarded, naming therein a time and place where
such bids will be received, opened, and read publicly. After
such bids have been duly received, opened, read publicly, and
recorded, the commission shall award such contract to the lowest
responsible bidder or it may reject all bids. Each contract
shall be duly executed in writing and the party to whom the
contract is awarded may be required to give sufficient bond to
the commission for the faithful performance of the contract. If
no satisfactory bid is received the commission may readvertise.
The commission shall have the right to set qualifications and
specifications and to require bids to meet such qualifications
and specifications before bids are accepted. If the commission
by an affirmative vote of five-sixths of the voting power of the
commission shall declare that an emergency exists requiring the
immediate purchase of materials or supplies at a cost in excess
of $5,000 but not to exceed $10,000 in amount, or in making
emergency repairs, it shall not be necessary to advertise for
bids, but such material, equipment, and supplies may be
purchased in the open market at the lowest price available
without securing formal competitive bids. An emergency as used
in this section shall be an unforeseen circumstance or condition
which results in placing life or property in jeopardy. All
contracts involving employment of labor shall stipulate terms
thereof and such conditions as the commission deems reasonable
as to hours and wages.
Sec. 6. Minnesota Statutes 2002, section 473.711,
subdivision 2a, is amended to read:
Subd. 2a. [TAX LEVY.] (a) The commission may levy a tax on
all taxable property in the district as defined in section
473.702 to provide funds for the purposes of sections 473.701 to
473.716. The tax shall not exceed the property tax levy
limitation determined in this subdivision. A participating
county may agree to levy an additional tax to be used by the
commission for the purposes of sections 473.701 to 473.716 but
the sum of the county's and commission's taxes may not exceed
the county's proportionate share of the property tax levy
limitation determined under this subdivision based on the ratio
of its total net tax capacity to the total net tax capacity of
the entire district as adjusted by section 270.12, subdivision 3.
The auditor of each county in the district shall add the amount
of the levy made by the district to other taxes of the county
for collection by the county treasurer with other taxes. When
collected, the county treasurer shall make settlement of the tax
with the district in the same manner as other taxes are
distributed to political subdivisions. No county shall levy any
tax for mosquito, disease vectoring tick, and black gnat
(Simuliidae) control except under this section. The levy shall
be in addition to other taxes authorized by law.
(b) The property tax levied by the metropolitan mosquito
control commission shall not exceed the following amount for the
years specified:
(1) for taxes payable in 1996, the product of (i) the
commission's property tax levy limitation for taxes payable in
1995 determined under this subdivision minus 50 percent of the
amount actually levied for taxes payable in 1995, multiplied by
(ii) an index for market valuation changes equal to the total
market valuation of all taxable property located within the
district for the current taxes payable year divided by the total
market valuation of all taxable property located within the
district for the previous taxes payable year;
(2) for taxes payable in 1997 and subsequent years, the
product of (i) the commission's property tax levy limitation for
the previous year determined under this subdivision multiplied
by (ii) an index for market valuation changes equal to the total
market valuation of all taxable property for the current tax
payable year located within the district for the current taxes
payable year plus any area that has been added to the district
since the previous year, divided by the total market valuation
of all taxable property located within the district for the
previous taxes payable year; and.
(3) (c) For the purpose of determining the commission's
property tax levy limitation under this subdivision, "total
market valuation" means the total market valuation of all
taxable property within the district without valuation
adjustments for fiscal disparities (chapter 473F), tax increment
financing (sections 469.174 to 469.179), and high voltage
transmission lines (section 273.425).
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 7. Minnesota Statutes 2002, section 473.714,
subdivision 1, is amended to read:
Subdivision 1. [COMPENSATION.] Except as provided in
subdivision 2, Each commissioner, including the officers of the
commission shall, may be reimbursed for actual and necessary
expenses incurred in the performance of duties. The chair shall
be paid a per diem for attending meetings, monthly, executive,
and special, and each commissioner shall be paid a per diem for
attending meetings, monthly, executive, and special, which per
diem shall be established by the commission. A commissioner who
receives a per diem from the commissioner's county shall not be
paid a per diem for the same day by the commission for attending
meetings of the commission. The annual budget of the commission
shall provide as a separate account anticipated expenditures for
per diem, travel and associated expenses for the chair and
members, and compensation or reimbursement shall be made to the
chair or members only when budgeted. No commissioner may be
paid a per diem.
Sec. 8. [TRANSITIONAL AUTHORITY.]
The metropolitan mosquito control district and the Carver
county board of commissioners may enter into an agreement for
the district to provide its services to the part of Carver
county added to the district by this article until the proceeds
of the levy from that part of Carver county are available for
those services. During this period the services may be provided
on the terms and for fees that are mutually agreed to by the
parties.
Sec. 9. [REPEALER.]
Minnesota Statutes 2002, sections 473.711, subdivision 2b,
and 473.714, subdivision 2, are repealed.
Sec. 10. [EFFECTIVE DATE.]
Sections 1 to 9 are effective the day following final
enactment.
ARTICLE 14
MISCELLANEOUS
Section 1. Minnesota Statutes 2002, section 8.30, is
amended to read:
8.30 [COMPROMISE OF TAX AND FEE CLAIMS.]
Notwithstanding any other provisions of law to the
contrary, the attorney general shall have authority to
compromise taxes, fees, surcharges, assessments, penalties, and
interest in any case referred to the attorney general by the
commissioner of revenue all cases, whether reduced to judgment
or not, where the debt is being reduced by an amount exceeding
$50,000 and, in the attorney general's opinion, it shall be in
the best interests of the state to do so. Such a compromise
must be in a form prescribed by the attorney general and shall
be in writing signed by the attorney general, the taxpayer or
taxpayer's representative, and the commissioner of
revenue. Compromises of such debts in cases where the debt is
being reduced by an amount of $50,000 or less are governed by
section 16D.15.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2002, section 270.059, is
amended to read:
270.059 [REVENUE DEPARTMENT SERVICE AND RECOVERY SPECIAL
REVENUE FUND.]
A revenue department service and recovery special revenue
fund is created for the purpose of recovering the costs of
furnishing public government data and related services or
products, as well as recovering costs associated with collecting
local taxes on sales. All money collected under this section is
deposited in the revenue department service and recovery special
revenue fund. Money in the fund is appropriated to the
commissioner of revenue to reimburse the department of revenue
for the costs incurred in administering the tax law or providing
the data, service, or product. Any monies paid to the
department as a criminal fine for a tax law violation that are
designated by the court to fund tax law enforcement are
appropriated to this fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2002, section 270.67,
subdivision 4, is amended to read:
Subd. 4. [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT
PROGRAM.] (a) In implementing the authority provided in
subdivision 2 or in section sections 8.30 and 16D.15 to accept
offers of installment payments or offers-in-compromise of tax
liabilities, the commissioner of revenue shall prescribe
guidelines for employees of the department of revenue to
determine whether an offer-in-compromise or an offer to make
installment payments is adequate and should be accepted to
resolve a dispute. In prescribing the guidelines, the
commissioner shall develop and publish schedules of national and
local allowances designed to provide that taxpayers entering
into a compromise or payment agreement have an adequate means to
provide for basic living expenses. The guidelines must provide
that the taxpayer's ownership interest in a motor vehicle, to
the extent of the value allowed in section 550.37, will not be
considered as an asset; in the case of an offer related to a
joint tax liability of spouses, that value of two motor vehicles
must be excluded. The guidelines must provide that employees of
the department shall determine, on the basis of the facts and
circumstances of each taxpayer, whether the use of the schedules
is appropriate and that employees must not use the schedules to
the extent the use would result in the taxpayer not having
adequate means to provide for basic living expenses. The
guidelines must provide that:
(1) an employee of the department shall not reject an
offer-in-compromise or an offer to make installment payments
from a low-income taxpayer solely on the basis of the amount of
the offer; and
(2) in the case of an offer-in-compromise which relates
only to issues of liability of the taxpayer:
(i) the offer must not be rejected solely because the
commissioner is unable to locate the taxpayer's return or return
information for verification of the liability; and
(ii) the taxpayer shall not be required to provide an
audited, reviewed, or compiled financial statement.
(b) The commissioner shall establish procedures:
(1) that require presentation of a counteroffer or a
written rejection of the offer by the commissioner if the amount
offered by the taxpayer in an offer-in-compromise or an offer to
make installment payments is not accepted by the commissioner;
(2) for an administrative review of any written rejection
of a proposed offer-in-compromise or installment agreement made
by a taxpayer under this section before the rejection is
communicated to the taxpayer;
(3) that allow a taxpayer to request reconsideration of any
written rejection of the offer or agreement to the commissioner
of revenue to determine whether the rejection is reasonable and
appropriate under the circumstances; and
(4) that provide for notification to the taxpayer when an
offer-in-compromise has been accepted, and issuance of
certificates of release of any liens imposed under section
270.69 related to the liability which is the subject of the
compromise.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 4. Minnesota Statutes 2002, section 290.06,
subdivision 24, is amended to read:
Subd. 24. [CREDIT FOR JOB CREATION.] (a) A corporation
that leases and operates a heavy maintenance base for aircraft
that is owned by the state of Minnesota or one of its political
subdivisions, or an engine repair facility described in section
116R.02, subdivision 6, or both, may take a credit against the
tax due under this chapter.
(b) For the first taxable year when the facility has been
in operation for at least three consecutive months, the credit
is equal to $5,000 multiplied by the number of persons employed
by the corporation on a full-time basis at the facility on the
last day of the taxable year, not to exceed the number of
persons employed by the corporation on a full-time basis at the
facility on the date 90 days before the last day of the taxable
year. For each of the succeeding four taxable years, the credit
is equal to $5,000 multiplied by the number of persons employed
by the corporation on a full-time basis at the facility on the
last day of the taxable year, not to exceed the number of
persons employed by the corporation on a full-time basis at the
facility on the date 90 days before the last day of the taxable
year.
(c) For the first taxable year in which the credit is
allowed for the facility, the credit must not exceed 80 percent
of the wages paid to or incurred for persons employed by the
taxpayer at the facility during the taxable year. For the
succeeding four taxable years, the credit must not exceed 20
percent of the wages paid to or incurred for persons employed by
the taxpayer at the facility during the taxable year. For
purposes of this section, "wages" has the meaning given under
section 3121(b) of the Internal Revenue Code, except the
limitation to the contribution and benefit base does not apply.
(d) If the credit provided under this subdivision exceeds
the tax liability of the corporation for the taxable year, the
excess amount of the credit may be carried over to each of the
ten 20 taxable years succeeding the taxable year. The entire
amount of the credit must be carried to the earliest taxable
year to which the amount may be carried. The unused portion of
the credit must be carried to the following taxable year. No
credit may be carried to a taxable year more than ten 20 years
after the taxable year in which the credit was earned.
(e) If an unused portion of the credit remains at the end
of the carryover period under paragraph (d), the commissioner
shall refund the unused portion to the taxpayer. The provisions
of this paragraph do not apply if the corporation that earned
the credit under this subdivision or a successor in interest to
the corporation filed for bankruptcy protection.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 5. Minnesota Statutes 2002, section 297F.05,
subdivision 1, is amended to read:
Subdivision 1. [RATES; CIGARETTES.] A tax is imposed upon
the sale of cigarettes in this state, upon having cigarettes in
possession in this state with intent to sell, upon any person
engaged in business as a distributor, and upon the use or
storage by consumers, at the following rates, subject to the
discount provided in this chapter:
(1) on cigarettes weighing not more than three pounds per
thousand, 24 mills on each such cigarette; and
(2) on cigarettes weighing more than three pounds per
thousand, 48 mills on each such cigarette.
[EFFECTIVE DATE.] This section is effective for sales of
stamps made after June 30, 2003.
Sec. 6. Minnesota Statutes 2002, section 297F.08,
subdivision 7, is amended to read:
Subd. 7. [PRICE OF STAMPS.] The commissioner shall sell
stamps to any person licensed as a distributor at a discount of
1.0 percent from the face amount of the stamps for the first
$1,500,000 of such stamps purchased in any fiscal year; and at a
discount of 0.6 percent on the remainder of such stamps
purchased in any fiscal year. The commissioner shall not sell
stamps to any other person. The commissioner may prescribe the
method of shipment of the stamps to the distributor as well as
the quantities of stamps purchased.
[EFFECTIVE DATE.] This section is effective for sales of
stamps made after June 30, 2003.
Sec. 7. Minnesota Statutes 2002, section 297F.08, is
amended by adding a subdivision to read:
Subd. 12. [CIGARETTES IN INTERSTATE COMMERCE.] (a) A
person may not transport or cause to be transported from this
state cigarettes for sale in another state without first
affixing to the cigarettes the stamp required by the state in
which the cigarettes are to be sold or paying any other excise
tax on the cigarettes imposed by the state in which the
cigarettes are to be sold.
(b) A person may not affix to cigarettes the stamp required
by another state or pay any other excise tax on the cigarettes
imposed by another state if the other state prohibits stamps
from being affixed to the cigarettes, prohibits the payment of
any other excise tax on the cigarettes, or prohibits the sale of
the cigarettes.
(c) Not later than 15 days after the end of each calendar
quarter, a person who transports or causes to be transported
from this state cigarettes for sale in another state shall
submit to the commissioner a report identifying the quantity and
style of each brand of the cigarettes transported or caused to
be transported in the preceding calendar quarter, and the name
and address of each recipient of the cigarettes.
(d) For purposes of this section, "person" has the meaning
given in section 297F.01, subdivision 12. Person does not
include any common or contract carrier, or public warehouse that
is not owned, in whole or in part, directly or indirectly by
such person.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 8. Minnesota Statutes 2002, section 297F.09,
subdivision 2, is amended to read:
Subd. 2. [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.]
On or before the 18th day of each calendar month, a distributor
with a place of business in this state shall file a return with
the commissioner showing the quantity and wholesale sales price
of each tobacco product:
(1) brought, or caused to be brought, into this state for
sale; and
(2) made, manufactured, or fabricated in this state for
sale in this state, during the preceding calendar month.
Every licensed distributor outside this state shall in like
manner file a return showing the quantity and wholesale sales
price of each tobacco product shipped or transported to
retailers in this state to be sold by those retailers, during
the preceding calendar month. Returns must be made in the form
and manner prescribed by the commissioner and must contain any
other information required by the commissioner. The return must
be accompanied by a remittance for the full tax liability shown,
less 1.5 percent of the liability as compensation to reimburse
the distributor for expenses incurred in the administration of
this chapter.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2003.
Sec. 9. [297F.24] [FEE IN LIEU OF SETTLEMENT.]
Subdivision 1. [FEE IMPOSED.] (a) A fee is imposed upon
the sale of nonsettlement cigarettes in this state, upon having
nonsettlement cigarettes in possession in this state with intent
to sell, upon any person engaged in business as a distributor,
and upon the use or storage by consumers of nonsettlement
cigarettes. The fee equals a rate of 1.75 cents per cigarette.
(b) The purpose of this fee is to:
(1) ensure that manufacturers of nonsettlement cigarettes
pay fees to the state that are comparable to costs attributable
to the use of the cigarettes;
(2) prevent manufacturers of nonsettlement cigarettes from
undermining the state's policy of discouraging underage smoking
by offering nonsettlement cigarettes at prices substantially
below the cigarettes of other manufacturers; and
(3) fund such other purposes as the legislature determines
appropriate.
Subd. 2. [NONSETTLEMENT CIGARETTES.] For purposes of this
section, a "nonsettlement cigarette" means a cigarette
manufactured by a person other than a manufacturer that:
(1) is making annual payments to the state of Minnesota
under a settlement of the lawsuit styled as State v. Philip
Morris Inc., No. C1-94-8565 (Minnesota District Court, Second
Judicial District), if the style of cigarettes is included in
computation of the payments under the agreement; or
(2) has voluntarily entered into an agreement with the
state of Minnesota, approved by the attorney general, agreeing
to terms similar to those contained in the settlement agreement,
identified in clause (1) including making annual payments to the
state, with respect to its national sales of the style of
cigarettes, equal to at least 75 percent of the payments that
would apply if the manufacturer was one of the four original
parties to the settlement agreement required to make annual
payments to the state.
Subd. 3. [COLLECTION AND ADMINISTRATION.] The commissioner
shall administer the fee under this section in the same manner
as the excise tax imposed under section 297F.05 and all of the
provisions of this chapter apply as if the fee were a tax
imposed under section 297F.05. The commissioner shall deposit
the proceeds of the fee in the general fund.
[EFFECTIVE DATE.] This section is effective for sales of
nonsettlement cigarettes made after June 30, 2003.
Sec. 10. Minnesota Statutes 2002, section 297H.06,
subdivision 1, is amended to read:
Subdivision 1. [CERTAIN SURCHARGES OR FEES.] The amount of
a surcharge, fee, or charge established pursuant to section
115A.919, 115A.921, 115A.923, 400.08, 473.811, or 473.843 is
exempt from the solid waste management tax. The amount shown on
a property tax statement as a county charge for solid waste
management service or as a surcharge, fee, or charge established
pursuant to section 400.08, subdivision 3, or section 473.811,
subdivision 3a, is exempt from the solid waste management tax.
The exemption does not apply to the tax imposed on market price
under section 297H.02, subdivision 1, paragraphs (b) and (c), or
section 297H.03, subdivision 1, paragraphs (b) and (c).
[EFFECTIVE DATE.] This section is effective April 1, 2003.
Sec. 11. Minnesota Statutes 2002, section 298.75,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] Except as may otherwise be
provided, the following words, when used in this section, shall
have the meanings herein ascribed to them.
(1) "Aggregate material" shall mean nonmetallic natural
mineral aggregate including, but not limited to sand, silica
sand, gravel, crushed rock, limestone, granite, and borrow, but
only if the borrow is transported on a public road, street, or
highway. Aggregate material shall not include dimension stone
and dimension granite. Aggregate material must be measured or
weighed after it has been extracted from the pit, quarry, or
deposit.
(2) "Person" shall mean any individual, firm, partnership,
corporation, organization, trustee, association, or other entity.
(3) "Operator" shall mean any person engaged in the
business of removing aggregate material from the surface or
subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a
marketable product or service.
(4) "Extraction site" shall mean a pit, quarry, or deposit
containing aggregate material and any contiguous property to the
pit, quarry, or deposit which is used by the operator for
stockpiling the aggregate material.
(5) "Importer" shall mean any person who buys aggregate
material produced from a county not listed in paragraph (6) or
another state and causes the aggregate material to be imported
into a county in this state which imposes a tax on aggregate
material.
(6) "County" shall mean the counties of Pope, Stearns,
Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson,
Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay,
Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone,
Sibley, Hennepin, Washington, Chisago, and Ramsey. County also
means any other county whose board has voted after a public
hearing to impose the tax under this section and has notified
the commissioner of revenue of the imposition of the tax.
(7) "Borrow" shall mean granular borrow, consisting of
durable particles of gravel and sand, crushed quarry or mine
rock, crushed gravel or stone, or any combination thereof, the
ratio of the portion passing the (#200) sieve divided by the
portion passing the (1 inch) sieve may not exceed 20 percent by
mass.
[EFFECTIVE DATE.] This section is effective for borrow
removed and transported on a public road, street, or highway on
or after July 1, 2003.
Sec. 12. Minnesota Statutes 2002, section 469.1731,
subdivision 3, is amended to read:
Subd. 3. [FILING.] The city must file a copy of the
resolution and development plan with the commissioner of trade
and economic development. The designation takes effect for the
first calendar year that begins more than 90 30 days after the
filing.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. Laws 2002, chapter 377, article 12, section 17,
is amended to read:
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. 14. [ADVANCE COLLECTION PROGRAM.]
Subdivision 1. [PROGRAM ESTABLISHED.] The commissioner of
revenue shall establish an advance collection program to collect
tax, interest, and penalty obligations that otherwise would not
be collected.
Subd. 2. [POLICIES.] The commissioner of revenue shall
implement and operate the program in a manner that:
(1) minimizes the impact of the program on the incentive
for taxpayers to comply with Minnesota taxes; and
(2) emphasizes collecting as large a portion of the
department's account receivables that are unlikely otherwise to
be collected.
Subd. 3. [AUTHORITY.] (a) The authority under this section
applies only to obligations on the department of revenue's
accounts receivable system for which the original debt was more
than two years old on the date of enactment of this section.
The commissioner of revenue shall select the debts on the
accounts receivable system to which this program applies and may
exclude any debt or debts as the commissioner deems appropriate,
because inclusion, in the sole opinion of the commissioner, may:
(1) adversely affect tax compliance;
(2) reduce the amount the state likely will collect in the
future;
(3) delay resolution of an issue of the meaning or
application of the tax or other law;
(4) be inconsistent with tax administration and collection
policies;
(5) not be justified because of the taxpayer's conduct or
past actions; or
(6) not be in the interest of the state for any reason the
commissioner solely determines.
(b) To implement this program, the commissioner shall
exercise authority under Minnesota Statutes, section 270.67, to
accept as a partial or discounted payment of the obligation as
full payment. The commissioner shall set the discount rate for
each debt at the level the commissioner determines appropriate,
given the provisions of this section. For obligations that are
four or more years old on the date of enactment, the
commissioner may offer a reduction or discount of up to 50
percent; for obligations that are more than two years old upon
the date of enactment, the commissioner may offer a reduction or
discount of up to 35 percent. The commissioner may apply the
appropriate discount to all or part of an obligation, regardless
of the age of the obligation, if the taxpayer has an obligation
that meets the minimum age requirement on the date of
enactment. The commissioner shall notify taxpayers or other
debtors qualifying under the program established under this
section in any way the commissioner determines appropriate.
(c) This section does not limit the commissioner's
authority under Minnesota Statutes, section 270.67.
Sec. 15. [CITY OF DULUTH; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [AUTHORIZATION.] Upon approval of the
governing body of the city of Duluth, the Duluth economic
development authority may create an economic development tax
increment financing district for aircraft related facilities.
The authority may establish a district only after entering a
development agreement, which provides for construction of an
aircraft maintenance facility with a minimum square footage of
150,000 and requires employment of a minimum of 200 individuals
with average annual compensation in excess of $30,000. Except
as otherwise provided in this section, the provisions of
Minnesota Statutes, sections 469.174 to 469.179 apply to the
district.
Subd. 2. [SPECIAL RULES.] (a) Notwithstanding the
provisions of Minnesota Statutes, section 469.176, subdivision
1b, paragraph (a), clause (3), no tax increment shall be paid to
the authority after 25 years after receipt by the authority of
the first tax increment for the district authorized by this
section.
(b) The development in the district authorized by this
section shall be deemed to be a purpose authorized under
Minnesota Statutes, section 469.176, subdivision 4c, paragraph
(a).
(c) For purposes of Minnesota Statutes, section 469.177,
subdivision 12, the applicable maximum duration limit of the
district authorized by this section shall be as set forth in
paragraph (a).
[EFFECTIVE DATE.] This section is effective upon compliance
with the requirements of Minnesota Statutes, sections 469.1782
and 645.021.
Sec. 16. [REPEALER.]
Laws 1984, chapter 652, section 2, is repealed.
[EFFECTIVE DATE.] This section is effective for Benton
county the day after the governing body of Benton county and its
chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
This section is effective for Stearns county the day after
the governing body of Stearns county and its chief clerical
officer timely complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
Presented to the governor May 24, 2003
Signed by the governor May 25, 2003, 10:49 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes