Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2003, 1st Special Session
Key: (1) language to be deleted (2) new language
CHAPTER 21-H.F.No. 7
An act relating to the financing and operation of
state and local government; providing for job
opportunity building zones; providing for a
biotechnology and health sciences industry zone;
changing income, sales and use, motor vehicle sales,
motor vehicle registration, property, cigarette and
tobacco, liquor, mortgage registry and deed, and other
taxes; updating references to the Internal Revenue
Code; changing accelerated sales tax liability
provisions and extending the requirements to other
taxes; changing or providing property tax and sales
tax exemptions; requiring payment of certain lawful
gambling taxes; altering the computation and payments
of intergovernmental aids; imposing levy limits;
modifying truth in taxation requirements; providing
economic development incentives; changing tax
increment financing requirements; providing powers to
certain cities and counties; authorizing a special
taxing district; providing for collection of certain
debts and charges; providing for payments into and
transfers among certain funds and accounts; providing
for distribution of certain revenues and funds;
regulating limited used vehicle licenses; making
certain changes relating to the taconite assistance
area; authorizing municipalities to collect certain
charges as a special assessment; changing certain
requirements relating to the metropolitan mosquito
control district; regulating tax preparers; providing
for studies; providing penalties; appropriating money;
amending Minnesota Statutes 2002, sections 3.986,
subdivision 4; 4A.02; 16A.152, subdivisions 1, 1b, 2;
18B.07, subdivision 2, as amended; 62J.692,
subdivision 4, by adding a subdivision; 168.27,
subdivision 4a; 270.60, subdivision 4; 270A.03,
subdivision 2; 270A.07, subdivisions 1, 2; 272.02,
subdivision 25, by adding subdivisions; 272.029, by
adding a subdivision; 273.11, subdivision 13; 273.13,
subdivision 25; 273.1341, as added; 273.1398,
subdivisions 4a, 4c, 6, 8; 275.025, subdivision 1;
275.065, subdivision 3; 275.066; 275.70, subdivision
5; 275.71, subdivisions 2, 4, 5, 6; 275.72,
subdivision 3; 275.73, subdivision 2; 275.74,
subdivision 3; 276A.01, subdivision 2; 287.12; 287.29,
subdivision 1; 287.31, by adding a subdivision;
289A.02, subdivision 7, as amended; 289A.08,
subdivision 16, as amended; 289A.20, subdivision 4;
289A.31, subdivision 7; 289A.60, subdivision 15;
290.01, subdivisions 19, as amended, 19b, 29, 31, as
amended; 290.06, subdivision 2c, by adding
subdivisions; 290.067, subdivision 1; 290.0671,
subdivision 1; 290.091, subdivision 2; 290.0921,
subdivision 3; 290.0922, subdivisions 2, 3; 290A.03,
subdivision 15, as amended; 297A.68, by adding
subdivisions; 297A.70, subdivisions 8, 10, 14, 16;
297A.71, by adding a subdivision; 297B.01, subdivision
7; 297B.03; 297F.09, subdivisions 1, 2, by adding a
subdivision; 297F.10, subdivision 1, as amended;
297G.01, by adding a subdivision; 297G.03, subdivision
1; 297G.09, by adding a subdivision; 298.018,
subdivisions 1, 2; 298.22, subdivisions 2, 8;
298.2211, subdivisions 1, 2; 298.2213, subdivision 3;
298.2214, subdivisions 1, 3; 298.223, subdivision 1;
298.28, subdivisions 7, 11; 298.292, subdivision 2;
298.293; 298.298; 349.16, by adding a subdivision;
429.101, subdivision 1; 469.169, by adding a
subdivision; 469.174, subdivisions 6, as amended, 10,
by adding a subdivision; 469.1763, subdivisions 2, 4;
469.177, subdivision 1; 473.167, subdivision 3;
473.249, subdivision 1; 473.253, subdivision 1;
473.704, subdivision 17, as amended; 474A.061,
subdivision 1, as amended; 477A.011, subdivisions 34,
36, by adding subdivisions; 477A.013, subdivisions 8,
9; 477A.03, subdivision 2, by adding subdivisions;
611.27, subdivisions 13, 15; Laws 1980, chapter 511,
section 1, subdivision 2, as amended; Laws 1980,
chapter 511, section 2, as amended; Laws 1993, chapter
375, article 9, section 46, subdivision 2, as amended;
Laws 1998, chapter 389, article 16, section 35,
subdivision 1, as amended; Laws 1999, chapter 243,
article 4, section 19, as amended; Laws 2001, First
Special Session chapter 5, article 12, section 95, as
amended; Laws 2001, First Special Session chapter 5,
article 20, section 22; Laws 2002, chapter 377,
article 3, section 15; 2003 First Special Session H.
F. No. 1, article 2, section 118, subdivision 6;
proposing coding for new law in Minnesota Statutes,
chapters 270; 469; 477A; repealing Minnesota Statutes
2002, sections 37.13, subdivision 2; 272.02,
subdivision 26; 273.138, subdivisions 2, 3, 6;
273.1398, subdivisions 2, 2c, 4d; 273.166; 275.065,
subdivision 3a; 325E.112, subdivision 2a; 477A.011,
subdivision 37; 477A.0121; 477A.0122; 477A.0123;
477A.0132; 477A.03, subdivisions 3, 4; 477A.06;
477A.07.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
JOB OPPORTUNITY BUILDING ZONES
Section 1. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 64. [JOB OPPORTUNITY BUILDING ZONE PROPERTY.] (a)
Improvements to real property, and personal property, classified
under section 273.13, subdivision 24, and located within a job
opportunity building zone, designated under section 469.314, are
exempt from ad valorem taxes levied under chapter 275.
(b) Improvements to real property, and tangible personal
property, of an agricultural production facility located within
an agricultural processing facility zone, designated under
section 469.314, is exempt from ad valorem taxes levied under
chapter 275.
(c) For property to qualify for exemption under paragraph
(a), the occupant must be a qualified business, as defined in
section 469.310.
(d) The exemption applies beginning for the first
assessment year after designation of the job opportunity
building zone by the commissioner of trade and economic
development. The exemption applies to each assessment year that
begins during the duration of the job opportunity building zone
and to property occupied by July 1 of the assessment year by a
qualified business. This exemption does not apply to:
(1) the levy under section 475.61 or similar levy
provisions under any other law to pay general obligation bonds;
or
(2) a levy under section 126C.17, if the levy was approved
by the voters before the designation of the job opportunity
building zone.
[EFFECTIVE DATE.] This section is effective beginning for
property taxes assessed in 2004, payable in 2005.
Sec. 2. Minnesota Statutes 2002, section 272.029, is
amended by adding a subdivision to read:
Subd. 7. [EXEMPTION.] The tax imposed under this section
does not apply to electricity produced by wind energy conversion
systems located in a job opportunity building zone, designated
under section 469.314, for the duration of the zone. The
exemption applies beginning for the first calendar year after
designation of the zone and applies to each calendar year that
begins during the designation of the zone.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. 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) 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) 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) for individuals who are allowed a federal foreign tax
credit for taxes that do not qualify for a credit under section
290.06, subdivision 22, an amount equal to the carryover of
subnational foreign taxes for the taxable year, but not to
exceed the total subnational foreign taxes reported in claiming
the foreign tax credit. For purposes of this clause, "federal
foreign tax credit" means the credit allowed under section 27 of
the Internal Revenue Code, and "carryover of subnational foreign
taxes" equals the carryover allowed under section 904(c) of the
Internal Revenue Code minus national level foreign taxes to the
extent they exceed the federal foreign tax credit; and
(12) in each of the five tax years immediately following
the tax year in which an addition is required under subdivision
19a, clause (7), an amount equal to one-fifth of the delayed
depreciation. For purposes of this clause, "delayed
depreciation" means the amount of the addition made by the
taxpayer under subdivision 19a, clause (7), minus the positive
value of any net operating loss under section 172 of the
Internal Revenue Code generated for the tax year of the
addition. The resulting delayed depreciation cannot be less
than zero; and
(13) job opportunity building zone income as provided under
section 469.316.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 4. Minnesota Statutes 2002, section 290.01,
subdivision 29, is amended to read:
Subd. 29. [TAXABLE INCOME.] The term "taxable income"
means:
(1) for individuals, estates, and trusts, the same as
taxable net income;
(2) for corporations, the taxable net income less
(i) the net operating loss deduction under section 290.095;
and
(ii) the dividends received deduction under section 290.21,
subdivision 4; and
(iii) the exemption for operating in a job opportunity
building zone under section 469.317.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 5. 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) and (6), and
reduced by the subtraction under section 290.01, subdivision
19b, clause (13), and the Minnesota assignable portion of the
subtraction for United States government interest under section
290.01, subdivision 19b, clause (1), after applying the
allocation and assignability provisions of section 290.081,
clause (a), or 290.17; and
(2) the denominator is the individual's federal adjusted
gross income as defined in section 62 of the Internal Revenue
Code of 1986, increased by the amounts specified in section
290.01, subdivision 19a, clauses (1) and (6), and reduced by the
amounts specified in section 290.01, subdivision 19b, clause
clauses (1) and (13).
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 6. Minnesota Statutes 2002, section 290.06, is
amended by adding a subdivision to read:
Subd. 29. [JOB OPPORTUNITY BUILDING ZONE JOB CREDIT.] A
taxpayer that is a qualified business, as defined in section
469.310, subdivision 11, is allowed a credit as determined under
section 469.318 against the tax imposed by this chapter.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 7. Minnesota Statutes 2002, section 290.067,
subdivision 1, is amended to read:
Subdivision 1. [AMOUNT OF CREDIT.] (a) A taxpayer may take
as a credit against the tax due from the taxpayer and a spouse,
if any, under this chapter an amount equal to the dependent care
credit for which the taxpayer is eligible pursuant to the
provisions of section 21 of the Internal Revenue Code subject to
the limitations provided in subdivision 2 except that in
determining whether the child qualified as a dependent, income
received as a Minnesota family investment program grant or
allowance to or on behalf of the child must not be taken into
account in determining whether the child received more than half
of the child's support from the taxpayer, and the provisions of
section 32(b)(1)(D) of the Internal Revenue Code do not apply.
(b) If a child who has not attained the age of six years at
the close of the taxable year is cared for at a licensed family
day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child
is 16 months old or younger at the close of the taxable year,
the amount of expenses deemed to have been paid equals the
maximum limit for one qualified individual under section 21(c)
and (d) of the Internal Revenue Code. If the child is older
than 16 months of age but has not attained the age of six years
at the close of the taxable year, the amount of expenses deemed
to have been paid equals the amount the licensee would charge
for the care of a child of the same age for the same number of
hours of care.
(c) If a married couple:
(1) has a child who has not attained the age of one year at
the close of the taxable year;
(2) files a joint tax return for the taxable year; and
(3) does not participate in a dependent care assistance
program as defined in section 129 of the Internal Revenue Code,
in lieu of the actual employment related expenses paid for that
child under paragraph (a) or the deemed amount under paragraph
(b), the lesser of (i) the combined earned income of the couple
or (ii) the amount of the maximum limit for one qualified
individual under section 21(c) and (d) of the Internal Revenue
Code will be deemed to be the employment related expense paid
for that child. The earned income limitation of section 21(d)
of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any
employment-related expenses have been paid.
(d) If the taxpayer is not required and does not file a
federal individual income tax return for the tax year, no credit
is allowed for any amount paid to any person unless:
(1) the name, address, and taxpayer identification number
of the person are included on the return claiming the credit; or
(2) if the person is an organization described in section
501(c)(3) of the Internal Revenue Code and exempt from tax under
section 501(a) of the Internal Revenue Code, the name and
address of the person are included on the return claiming the
credit.
In the case of a failure to provide the information required
under the preceding sentence, the preceding sentence does not
apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information required.
In the case of a nonresident, part-year resident, or a
person who has earned income not subject to tax under this
chapter including earned income excluded pursuant to section
290.01, subdivision 19b, clause (13), the credit determined
under section 21 of the Internal Revenue Code must be allocated
based on the ratio by which the earned income of the claimant
and the claimant's spouse from Minnesota sources bears to the
total earned income of the claimant and the claimant's spouse.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 8. 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 including income excluded under section 290.01,
subdivision 19b, clause (13), the credit must be allocated based
on the ratio of federal adjusted gross income reduced by the
earned income not subject to tax under this chapter over federal
adjusted gross income.
(g) For tax years beginning after December 31, 2001, and
before December 31, 2004, the $5,770 in paragraph (b) is
increased to $6,770, the $15,080 in paragraph (c) is increased
to $16,080, and the $17,890 in paragraph (d) is increased to
$18,890 for married taxpayers filing joint returns.
(h) For tax years beginning after December 31, 2004, and
before December 31, 2007, the $5,770 in paragraph (b) is
increased to $7,770, the $15,080 in paragraph (c) is increased
to $17,080, and the $17,890 in paragraph (d) is increased to
$19,890 for married taxpayers filing joint returns.
(i) For tax years beginning after December 31, 2007, and
before December 31, 2010, the $5,770 in paragraph (b) is
increased to $8,770, the $15,080 in paragraph (c) is increased
to $18,080 and the $17,890 in paragraph (d) is increased to
$20,890 for married taxpayers filing joint returns.
(j) The commissioner shall construct tables showing the
amount of the credit at various income levels and make them
available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may
graduate the transition between income brackets.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 9. Minnesota Statutes 2002, section 290.091,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by
this section, the following terms have the meanings given:
(a) "Alternative minimum taxable income" means the sum of
the following for the taxable year:
(1) the taxpayer's federal alternative minimum taxable
income as defined in section 55(b)(2) of the Internal Revenue
Code;
(2) the taxpayer's itemized deductions allowed in computing
federal alternative minimum taxable income, but excluding:
(i) the charitable contribution deduction under section 170
of the Internal Revenue Code to the extent that the deduction
exceeds 1.3 percent of adjusted gross income, as defined in
section 62 of the Internal Revenue Code;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled
person;
(3) for depletion allowances computed under section 613A(c)
of the Internal Revenue Code, with respect to each property (as
defined in section 614 of the Internal Revenue Code), to the
extent not included in federal alternative minimum taxable
income, the excess of the deduction for depletion allowable
under section 611 of the Internal Revenue Code for the taxable
year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion
deduction for the taxable year);
(4) to the extent not included in federal alternative
minimum taxable income, the amount of the tax preference for
intangible drilling cost under section 57(a)(2) of the Internal
Revenue Code determined without regard to subparagraph (E);
(5) to the extent not included in federal alternative
minimum taxable income, the amount of interest income as
provided by section 290.01, subdivision 19a, clause (1); and
(6) the amount of addition required by section 290.01,
subdivision 19a, clause (7);
less the sum of the amounts determined under the following:
(1) interest income as defined in section 290.01,
subdivision 19b, clause (1);
(2) an overpayment of state income tax as provided by
section 290.01, subdivision 19b, clause (2), to the extent
included in federal alternative minimum taxable income;
(3) the amount of investment interest paid or accrued
within the taxable year on indebtedness to the extent that the
amount does not exceed net investment income, as defined in
section 163(d)(4) of the Internal Revenue Code. Interest does
not include amounts deducted in computing federal adjusted gross
income; and
(4) amounts subtracted from federal taxable income as
provided by section 290.01, subdivision 19b, clause clauses (12)
and (13).
In the case of an estate or trust, alternative minimum
taxable income must be computed as provided in section 59(c) of
the Internal Revenue Code.
(b) "Investment interest" means investment interest as
defined in section 163(d)(3) of the Internal Revenue Code.
(c) "Tentative minimum tax" equals 6.4 percent of
alternative minimum taxable income after subtracting the
exemption amount determined under subdivision 3.
(d) "Regular tax" means the tax that would be imposed under
this chapter (without regard to this section and section
290.032), reduced by the sum of the nonrefundable credits
allowed under this chapter.
(e) "Net minimum tax" means the minimum tax imposed by this
section.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 10. Minnesota Statutes 2002, section 290.0921,
subdivision 3, is amended to read:
Subd. 3. [ALTERNATIVE MINIMUM TAXABLE INCOME.]
"Alternative minimum taxable income" is Minnesota net income as
defined in section 290.01, subdivision 19, and includes the
adjustments and tax preference items in sections 56, 57, 58, and
59(d), (e), (f), and (h) of the Internal Revenue Code. If a
corporation files a separate company Minnesota tax return, the
minimum tax must be computed on a separate company basis. If a
corporation is part of a tax group filing a unitary return, the
minimum tax must be computed on a unitary basis. The following
adjustments must be made.
(1) For purposes of the depreciation adjustments under
section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code,
the basis for depreciable property placed in service in a
taxable year beginning before January 1, 1990, is the adjusted
basis for federal income tax purposes, including any
modification made in a taxable year under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c).
For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c), not previously deducted is a
depreciation allowance in the first taxable year after December
31, 2000.
(2) The portion of the depreciation deduction allowed for
federal income tax purposes under section 168(k) of the Internal
Revenue Code that is required as an addition under section
290.01, subdivision 19c, clause (16), is disallowed in
determining alternative minimum taxable income.
(3) The subtraction for depreciation allowed under section
290.01, subdivision 19d, clause (19), is allowed as a
depreciation deduction in determining alternative minimum
taxable income.
(4) The alternative tax net operating loss deduction under
sections 56(a)(4) and 56(d) of the Internal Revenue Code does
not apply.
(5) The special rule for certain dividends under section
56(g)(4)(C)(ii) of the Internal Revenue Code does not apply.
(6) The special rule for dividends from section 936
companies under section 56(g)(4)(C)(iii) does not apply.
(7) The tax preference for depletion under section 57(a)(1)
of the Internal Revenue Code does not apply.
(8) The tax preference for intangible drilling costs under
section 57(a)(2) of the Internal Revenue Code must be calculated
without regard to subparagraph (E) and the subtraction under
section 290.01, subdivision 19d, clause (4).
(9) The tax preference for tax exempt interest under
section 57(a)(5) of the Internal Revenue Code does not apply.
(10) The tax preference for charitable contributions of
appreciated property under section 57(a)(6) of the Internal
Revenue Code does not apply.
(11) For purposes of calculating the tax preference for
accelerated depreciation or amortization on certain property
placed in service before January 1, 1987, under section 57(a)(7)
of the Internal Revenue Code, the deduction allowable for the
taxable year is the deduction allowed under section 290.01,
subdivision 19e.
For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, not previously deducted is a depreciation or
amortization allowance in the first taxable year after December
31, 2004.
(12) For purposes of calculating the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code, the term "alternative minimum taxable income" as
it is used in section 56(g) of the Internal Revenue Code, means
alternative minimum taxable income as defined in this
subdivision, determined without regard to the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code.
(13) For purposes of determining the amount of adjusted
current earnings under section 56(g)(3) of the Internal Revenue
Code, no adjustment shall be made under section 56(g)(4) of the
Internal Revenue Code with respect to (i) the amount of foreign
dividend gross-up subtracted as provided in section 290.01,
subdivision 19d, clause (1), (ii) the amount of refunds of
income, excise, or franchise taxes subtracted as provided in
section 290.01, subdivision 19d, clause (10), or (iii) the
amount of royalties, fees or other like income subtracted as
provided in section 290.01, subdivision 19d, clause (11).
(14) Alternative minimum taxable income excludes the income
from operating in a job opportunity building zone as provided
under section 469.317.
Items of tax preference must not be reduced below zero as a
result of the modifications in this subdivision.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 11. Minnesota Statutes 2002, section 290.0922,
subdivision 2, is amended to read:
Subd. 2. [EXEMPTIONS.] The following entities are exempt
from the tax imposed by this section:
(1) corporations exempt from tax under section 290.05;
(2) real estate investment trusts;
(3) regulated investment companies or a fund thereof; and
(4) entities having a valid election in effect under
section 860D(b) of the Internal Revenue Code;
(5) town and farmers' mutual insurance companies; and
(6) cooperatives organized under chapter 308A that provide
housing exclusively to persons age 55 and over and are
classified as homesteads under section 273.124, subdivision 3;
and
(7) an entity, if for the taxable year all of its property
is located in a job opportunity building zone designated under
section 469.314 and all of its payroll is a job opportunity
building zone payroll under section 469.310.
Entities not specifically exempted by this subdivision are
subject to tax under this section, notwithstanding section
290.05.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 12. Minnesota Statutes 2002, section 290.0922,
subdivision 3, is amended to read:
Subd. 3. [DEFINITIONS.] (a) "Minnesota sales or receipts"
means the total sales apportioned to Minnesota pursuant to
section 290.191, subdivision 5, the total receipts attributed to
Minnesota pursuant to section 290.191, subdivisions 6 to 8,
and/or the total sales or receipts apportioned or attributed to
Minnesota pursuant to any other apportionment formula applicable
to the taxpayer.
(b) "Minnesota property" means total Minnesota tangible
property as provided in section 290.191, subdivisions 9 to 11,
and any other tangible property located in Minnesota, but does
not include property located in a job opportunity building zone
designated under section 469.314. Intangible property shall not
be included in Minnesota property for purposes of this section.
Taxpayers who do not utilize tangible property to apportion
income shall nevertheless include Minnesota property for
purposes of this section. On a return for a short taxable year,
the amount of Minnesota property owned, as determined under
section 290.191, shall be included in Minnesota property based
on a fraction in which the numerator is the number of days in
the short taxable year and the denominator is 365.
(c) "Minnesota payrolls" means total Minnesota payrolls as
provided in section 290.191, subdivision 12, but does not
include job opportunity building zone payrolls under section
469.310, subdivision 8. Taxpayers who do not utilize payrolls
to apportion income shall nevertheless include Minnesota
payrolls for purposes of this section.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 13. Minnesota Statutes 2002, section 297A.68, is
amended by adding a subdivision to read:
Subd. 37. [JOB OPPORTUNITY BUILDING ZONES.] (a) Purchases
of tangible personal property or taxable services by a qualified
business, as defined in section 469.310, are exempt if the
property or services are primarily used or consumed in a job
opportunity building zone designated under section 469.314.
(b) Purchase and use of construction materials and supplies
for construction of improvements to real property in a job
opportunity building zone are exempt if the improvements after
completion of construction are to be used in the conduct of a
qualified business, as defined in section 469.310. This
exemption applies regardless of whether the purchases are made
by the business or a contractor.
(c) The exemptions under this subdivision apply to a local
sales and use tax regardless of whether the local sales tax is
imposed on the sales taxable as defined under this chapter.
(d) This subdivision applies to sales, if the purchase was
made and delivery received during the duration of the zone.
[EFFECTIVE DATE.] This section is effective for sales made
on or after the day following final enactment.
Sec. 14. Minnesota Statutes 2002, section 297B.03, is
amended to read:
297B.03 [EXEMPTIONS.]
There is specifically exempted from the provisions of this
chapter and from computation of the amount of tax imposed by it
the following:
(1) purchase or use, including use under a lease purchase
agreement or installment sales contract made pursuant to section
465.71, of any motor vehicle by the United States and its
agencies and instrumentalities and by any person described in
and subject to the conditions provided in section 297A.67,
subdivision 11;
(2) purchase or use of any motor vehicle by any person who
was a resident of another state or country at the time of the
purchase and who subsequently becomes a resident of Minnesota,
provided the purchase occurred more than 60 days prior to the
date such person began residing in the state of Minnesota and
the motor vehicle was registered in the person's name in the
other state or country;
(3) purchase or use of any motor vehicle by any person
making a valid election to be taxed under the provisions of
section 297A.90;
(4) purchase or use of any motor vehicle previously
registered in the state of Minnesota when such transfer
constitutes a transfer within the meaning of section 118, 331,
332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or
1563(a) of the Internal Revenue Code of 1986, as amended through
December 31, 1999;
(5) purchase or use of any vehicle owned by a resident of
another state and leased to a Minnesota based private or for
hire carrier for regular use in the transportation of persons or
property in interstate commerce provided the vehicle is titled
in the state of the owner or secured party, and that state does
not impose a sales tax or sales tax on motor vehicles used in
interstate commerce;
(6) purchase or use of a motor vehicle by a private
nonprofit or public educational institution for use as an
instructional aid in automotive training programs operated by
the institution. "Automotive training programs" includes motor
vehicle body and mechanical repair courses but does not include
driver education programs;
(7) purchase of a motor vehicle for use as an ambulance by
an ambulance service licensed under section 144E.10;
(8) purchase of a motor vehicle by or for a public library,
as defined in section 134.001, subdivision 2, as a bookmobile or
library delivery vehicle;
(9) purchase of a ready-mixed concrete truck;
(10) purchase or use of a motor vehicle by a town for use
exclusively for road maintenance, including snowplows and dump
trucks, but not including automobiles, vans, or pickup trucks;
(11) purchase or use of a motor vehicle by a corporation,
society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational
purposes, except a public school, university, or library, but
only if the vehicle is:
(i) a truck, as defined in section 168.011, a bus, as
defined in section 168.011, or a passenger automobile, as
defined in section 168.011, if the automobile is designed and
used for carrying more than nine persons including the driver;
and
(ii) intended to be used primarily to transport tangible
personal property or individuals, other than employees, to whom
the organization provides service in performing its charitable,
religious, or educational purpose;
(12) purchase of a motor vehicle for use by a transit
provider exclusively to provide transit service is exempt if the
transit provider is either (i) receiving financial assistance or
reimbursement under section 174.24 or 473.384, or (ii) operating
under section 174.29, 473.388, or 473.405;
(13) purchase or use of a motor vehicle by a qualified
business, as defined in section 469.310, located in a job
opportunity building zone, if the motor vehicle is principally
garaged in the job opportunity building zone and is primarily
used as part of or in direct support of the person's operations
carried on in the job opportunity building zone. The exemption
under this clause applies to sales, if the purchase was made and
delivery received during the duration of the job opportunity
building zone. The exemption under this clause also applies to
any local sales and use tax.
[EFFECTIVE DATE.] This section is effective for sales made
after December 31, 2003.
Sec. 15. [469.310] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of sections 469.310
to 469.320, the following terms have the meanings given.
Subd. 2. [AGRICULTURAL PROCESSING FACILITY.] "Agricultural
processing facility" means one or more facilities or operations
that transform, package, sort, or grade livestock or livestock
products, agricultural commodities, or plants or plant products
into goods that are used for intermediate or final consumption
including goods for nonfood use, and surrounding property.
Subd. 3. [APPLICANT.] "Applicant" means a local government
unit or units applying for designation of an area as a job
opportunity building zone or a joint powers board, established
under section 471.59, acting on behalf of two or more local
government units.
Subd. 4. [COMMISSIONER.] "Commissioner" means the
commissioner of trade and economic development.
Subd. 5. [DEVELOPMENT PLAN.] "Development plan" means a
plan meeting the requirements of section 469.311.
Subd. 6. [JOB OPPORTUNITY BUILDING ZONE OR ZONE.] "Job
opportunity building zone" or "zone" means a zone designated by
the commissioner under section 469.314, and includes an
agricultural processing facility zone.
Subd. 7. [JOB OPPORTUNITY BUILDING ZONE PERCENTAGE OR ZONE
PERCENTAGE.] "Job opportunity building zone percentage" or "zone
percentage" means the following fraction reduced to a percentage:
(1) the numerator of the fraction is:
(i) the ratio of the taxpayer's property factor under
section 290.191 located in the zone for the taxable year over
the property factor numerator determined under section 290.191,
plus
(ii) the ratio of the taxpayer's job opportunity building
zone payroll factor under subdivision 8 over the payroll factor
numerator determined under section 290.191; and
(2) the denominator of the fraction is two.
When calculating the zone percentage for a business that is
part of a unitary business as defined under section 290.17,
subdivision 4, the denominator of the payroll and property
factors is the Minnesota payroll and property of the unitary
business as reported on the combined report under section
290.17, subdivision 4, paragraph (j).
Subd. 8. [JOB OPPORTUNITY BUILDING ZONE PAYROLL
FACTOR.] "Job opportunity building zone payroll factor" or "job
opportunity building zone payroll" is that portion of the
payroll factor under section 290.191 that represents:
(1) wages or salaries paid to an individual for services
performed in a job opportunity building zone; or
(2) wages or salaries paid to individuals working from
offices within a job opportunity building zone if their
employment requires them to work outside the zone and the work
is incidental to the work performed by the individual within the
zone.
Subd. 9. [LOCAL GOVERNMENT UNIT.] "Local government unit"
means a statutory or home rule charter city, county, town, iron
range resources and rehabilitation agency, regional development
commission, or a federally designated economic development
district.
Subd. 10. [PERSON.] "Person" includes an individual,
corporation, partnership, limited liability company,
association, or any other entity.
Subd. 11. [QUALIFIED BUSINESS.] (a) "Qualified business"
means a person carrying on a trade or business at a place of
business located within a job opportunity building zone.
(b) A person that relocates a trade or business from
outside a job opportunity building zone into a zone is not a
qualified business, unless the business:
(1)(i) increases full-time employment in the first full
year of operation within the job opportunity building zone by at
least 20 percent measured relative to the operations that were
relocated and maintains the required level of employment for
each year the zone designation applies; or
(ii) makes a capital investment in the property located
within a zone equivalent to ten percent of the gross revenues of
operation that were relocated in the immediately preceding
taxable year; and
(2) enters a binding written agreement with the
commissioner that:
(i) pledges the business will meet the requirements of
clause (1);
(ii) provides for repayment of all tax benefits enumerated
under section 469.315 to the business under the procedures in
section 469.319, if the requirements of clause (1) are not met
for the taxable year or for taxes payable during the year in
which the requirements were not met; and
(iii) contains any other terms the commissioner determines
appropriate.
Subd. 12. [RELOCATES.] (a) "Relocates" means that the
trade or business:
(1) ceases one or more operations or functions at another
location in Minnesota and begins performing substantially the
same operations or functions at a location in a job opportunity
building zone; or
(2) reduces employment at another location in Minnesota
during a period starting one year before and ending one year
after it begins operations in a job opportunity building zone
and its employees in the job opportunity building zone are
engaged in the same line of business as the employees at the
location where it reduced employment.
(b) "Relocate" does not include an expansion by a business
that establishes a new facility that does not replace or
supplant an existing operation or employment, in whole or in
part.
(c) "Trade or business" includes any business entity that
is substantially similar in operation or ownership to the
business entity seeking to be a qualified business under this
section.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. [469.311] [DEVELOPMENT PLAN.]
(a) An applicant for designation of a job opportunity
building zone must adopt a written development plan for the zone
before submitting the application to the commissioner.
(b) The development plan must contain, at least, the
following:
(1) a map of the proposed zone that indicates the
geographic boundaries of the zone, the total area, and present
use and conditions generally of the land and structures within
those boundaries;
(2) evidence of community support and commitment from local
government, local workforce investment boards, school districts,
and other education institutions, business groups, and the
public;
(3) a description of the methods proposed to increase
economic opportunity and expansion, facilitate infrastructure
improvement, reduce the local regulatory burden, and identify
job-training opportunities;
(4) current social, economic, and demographic
characteristics of the proposed zone and anticipated
improvements in education, health, human services, and
employment if the zone is created;
(5) a description of anticipated activity in the zone and
each subzone, including, but not limited to, industrial use,
industrial site reuse, commercial or retail use, and residential
use; and
(6) any other information required by the commissioner.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 17. [469.312] [JOB OPPORTUNITY BUILDING ZONES;
LIMITATIONS.]
Subdivision 1. [MAXIMUM SIZE.] A job opportunity building
zone may not exceed 5,000 acres. For a zone designated as an
agricultural processing facility zone, the zone also may not
exceed the size of a site necessary for the agricultural
processing facility, including ancillary operations and space
for expansion in the reasonably foreseeable future.
Subd. 2. [SUBZONES.] The area of a job opportunity
building zone may consist of one or more noncontiguous areas or
subzones.
Subd. 3. [OUTSIDE METROPOLITAN AREA.] The area of a job
opportunity building zone must be located outside of the
metropolitan area, as defined in section 473.121, subdivision 2.
Subd. 4. [BORDER CITY DEVELOPMENT ZONES.] (a) The area of
a job opportunity building zone may not include the area of a
border city development zone designated under section 469.1731.
The city may remove property from a border city development zone
contingent upon the area being designated as a job opportunity
building zone. Before removing a parcel of property from a
border city development zone, the city must obtain the written
consent to the removal from each recipient that is located on
the parcel and receives incentives under the border city
development zone. Consent of any other property owner or
taxpayer in the border city development zone is not required.
(b) A city may not provide tax incentives under section
469.1734 to individuals or businesses for operations or activity
in a job opportunity building zone.
Subd. 5. [DURATION LIMIT.] The maximum duration of a zone
is 12 years. The applicant may request a shorter duration. The
commissioner may specify a shorter duration, regardless of the
requested duration.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 18. [469.313] [APPLICATION FOR DESIGNATION.]
Subdivision 1. [WHO MAY APPLY.] One or more local
government units, or a joint powers board under section 471.59,
acting on behalf of two or more units, may apply for designation
of an area as a job opportunity building zone. All or part of
the area proposed for designation as a zone must be located
within the boundaries of each of the governmental units. A
local government unit may not submit or have submitted on its
behalf more than one application for designation of a job
opportunity building zone.
Subd. 2. [APPLICATION CONTENT.] The application must
include:
(1) a development plan meeting the requirements of section
469.311;
(2) the proposed duration of the zone, not to exceed 12
years;
(3) a resolution or ordinance adopted by each of the cities
or towns and the counties in which the zone is located, agreeing
to provide all of the local tax exemptions provided under
section 469.315;
(4) if the proposed zone includes area in a border city
development zone, written consent to removal of the property
from the border city development zone to the extent required by
section 469.312, subdivision 4;
(5) an agreement by the applicant to treat incentives
provided under the zone designation as business subsidies under
sections 116J.993 to 116J.995 and to comply with the
requirements of that law; and
(6) supporting evidence to allow the commissioner to
evaluate the application under the criteria in section 469.314.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 19. [469.314] [DESIGNATION OF JOB OPPORTUNITY
BUILDING ZONES.]
Subdivision 1. [COMMISSIONER TO DESIGNATE.] (a) The
commissioner, in consultation with the commissioner of revenue,
shall designate not more than ten job opportunity building
zones. In making the designations, the commissioner shall
consider need and likelihood of success to yield the most
economic development and revitalization of economically
distressed rural areas of Minnesota.
(b) In addition to the designations under paragraph (a),
the commissioner may, in consultation with the commissioners of
agriculture and revenue, designate up to five agricultural
processing facility zones.
(c) The commissioner may, upon designation of a zone,
modify the development plan, including the boundaries of the
zone or subzones, if in the commissioner's opinion a modified
plan would better meet the objectives of the job opportunity
building zone program. The commissioner shall notify the
applicant of the modification and provide a statement of the
reasons for the modifications.
Subd. 2. [NEED INDICATORS.] (a) In evaluating applications
to determine the need for designation of a job opportunity
building zone, the commissioner shall consider the following
factors as indicators of need:
(1) the percentage of the population that is below 200
percent of the poverty rate, compared with the state as a whole;
(2) the extent to which the area's average weekly wage is
significantly lower than the state average weekly wage;
(3) the amount of property in or near the proposed zone
that is deteriorated or underutilized;
(4) the extent to which the median sale price of housing
units in the area is below the state median;
(5) the extent to which the median household income of the
area is lower than the state median household income;
(6) the extent to which the area experienced a population
loss during the 20-year period ending the year before the
application is made;
(7) the extent to which an area has experienced sudden or
severe job loss as a result of closing of businesses or other
employers;
(8) the extent to which property in the area would remain
underdeveloped or nonperforming due to physical characteristics;
(9) the extent to which the area has substantial real
property with adequate infrastructure and energy to support new
or expanded development; and
(10) the extent to which the business startup or expansion
rates are significantly lower than the respective rate for the
state.
(b) In applying the need indicators, the best available
data should be used. If reported data are not available for the
proposed zone, data for the smallest area that is available and
includes the area of the proposed zone may be used. The
commissioner may require applicants to provide data to
demonstrate how the area meets one or more of the indicators of
need.
Subd. 3. [SUCCESS INDICATORS.] In determining the
likelihood of success of a proposed zone, the commissioner shall
consider:
(1) the strength and viability of the proposed development
goals, objectives, and strategies in the development plan;
(2) whether the development plan is creative and innovative
in comparison to other applications;
(3) local public and private commitment to development of
the proposed zone and the potential cooperation of surrounding
communities;
(4) existing resources available to the proposed zone;
(5) how the designation of the zone would relate to other
economic and community development projects and to regional
initiatives or programs;
(6) how the regulatory burden will be eased for businesses
operating in the proposed zone;
(7) proposals to establish and link job creation and job
training; and
(8) the extent to which the development is directed at
encouraging and that designation of the zone is likely to result
in the creation of high-paying jobs.
Subd. 4. [DESIGNATION SCHEDULE.] (a) The schedule in
paragraphs (b) to (f) applies to the designation of job
opportunity building zones.
(b) The commissioner shall publish the form for
applications and any procedural, form, or content requirements
for applications by no later than August 1, 2003. The
commissioner may publish these requirements on the Internet, in
the State Register, or by any other means the commissioner
determines appropriate to disseminate the information to
potential applicants for designation.
(c) Applications must be submitted by October 15, 2003.
(d) The commissioner shall designate the zones by no later
than December 31, 2003.
(e) The designation of the zones takes effect January 1,
2004.
(f) The commissioner may reserve one or more of the ten
authorized zones for a second round of designations in calendar
year 2004. If the commissioner chooses to reserve designations
for this purpose, the commissioner shall establish the schedule
for the second round of designations, notwithstanding the dates
in paragraphs (c), (d), and (e). The commissioner shall allow a
period of at least 90 days for submission of applications after
notification of the second round. A zone designated in the
second round takes effect on January 1, 2005.
Subd. 5. [GEOGRAPHIC DISTRIBUTION.] The commissioner shall
have as a goal the geographic distribution of zones around the
state.
Subd. 6. [RULEMAKING EXEMPTION.] The commissioner's
actions in establishing procedures, requirements, and making
determinations to administer sections 469.310 to 469.320 are not
a rule for purposes of chapter 14 and are not subject to the
Administrative Procedure Act contained in chapter 14 and are not
subject to section 14.386.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 20. [469.315] [TAX INCENTIVES AVAILABLE IN ZONES.]
Qualified businesses that operate in a job opportunity
building zone, individuals who invest in a qualified business
that operates in a job opportunity building zone, and property
located in a job opportunity building zone qualify for:
(1) exemption from individual income taxes as provided
under section 469.316;
(2) exemption from corporate franchise taxes as provided
under section 469.317;
(3) exemption from the state sales and use tax and any
local sales and use taxes on qualifying purchases as provided in
section 297A.68, subdivision 37;
(4) exemption from the state sales tax on motor vehicles
and any local sales tax on motor vehicles as provided under
section 297B.03;
(5) exemption from the property tax as provided in section
272.02, subdivision 64;
(6) exemption from the wind energy production tax under
section 272.029, subdivision 7; and
(7) the jobs credit allowed under section 469.318.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 21. [469.316] [INDIVIDUAL INCOME TAX EXEMPTION.]
Subdivision 1. [APPLICATION.] An individual operating a
trade or business in a job opportunity building zone, and an
individual making a qualifying investment in a qualified
business operating in a job opportunity building zone qualifies
for the exemptions from taxes imposed under chapter 290, as
provided in this section. The exemptions provided under this
section apply only to the extent that the income otherwise would
be taxable under chapter 290. Subtractions under this section
from federal taxable income, alternative minimum taxable income,
or any other base subject to tax are limited to the amount that
otherwise would be included in the tax base absent the exemption
under this section. This section applies only to taxable years
beginning during the duration of the job opportunity building
zone.
Subd. 2. [RENTS.] An individual is exempt from the taxes
imposed under chapter 290 on net rents derived from real or
tangible personal property located in a zone for a taxable year
in which the zone was designated a job opportunity building
zone. If tangible personal property was used both within and
outside of the zone, the exemption amount for the net rental
income must be multiplied by a fraction, the numerator of which
is the number of days the property was used in the zone and the
denominator of which is the total days.
Subd. 3. [BUSINESS INCOME.] An individual is exempt from
the taxes imposed under chapter 290 on net income from the
operation of a qualified business in a job opportunity building
zone. If the trade or business is carried on within and without
the zone and the individual is not a resident of Minnesota, the
exemption must be apportioned based on the zone percentage for
the taxable year. If the trade or business is carried on within
and without the zone and the individual is a resident of
Minnesota, the exemption must be apportioned based on the zone
percentage for the taxable year, except the ratios under section
469.310, subdivision 7, clause (1), items (i) and (ii), must use
the denominators of the property and payroll factors determined
under section 290.191. No subtraction is allowed under this
section in excess of 20 percent of the sum of the job
opportunity building zone payroll and the adjusted basis of the
property at the time that the property is first used in the job
opportunity building zone by the business.
Subd. 4. [CAPITAL GAINS.] (a) An individual is exempt from
the taxes imposed under chapter 290 on:
(1) net gain derived on a sale or exchange of real property
located in the zone and used by a qualified business. If the
property was held by the individual during a period when the
zone was not designated, the gain must be prorated based on the
percentage of time, measured in calendar days, that the real
property was held by the individual during the period the zone
designation was in effect to the total period of time the real
property was held by the individual;
(2) net gain derived on a sale or exchange of tangible
personal property used by a qualified business in the zone. If
the property was held by the individual during a period when the
zone was not designated, the gain must be prorated based on the
percentage of time, measured in calendar days, that the property
was held by the individual during the period the zone
designation was in effect to the total period of time the
property was held by the individual. If the tangible personal
property was used outside of the zone during the period of the
zone's designation, the exemption must be multiplied by a
fraction, the numerator of which is the number of days the
property was used in the zone during the time of the designation
and the denominator of which is the total days the property was
held during the time of the designation; and
(3) net gain derived on a sale of an ownership interest in
a qualified business operating in the job opportunity building
zone, meeting the requirements of paragraph (b). The exemption
on the gain must be multiplied by the zone percentage of the
business for the taxable year prior to the sale.
(b) A qualified business meets the requirements of
paragraph (a), clause (3), if it is a corporation, an S
corporation, or a partnership, and for the taxable year its job
opportunity building zone percentage exceeds 25 percent. For
purposes of paragraph (a), clause (3), the zone percentage must
be calculated by modifying the ratios under section 469.310,
subdivision 7, clause (1), items (i) and (ii), to use the
denominators of the property and payroll factors determined
under section 290.191. Upon the request of an individual
holding an ownership interest in the entity, the entity must
certify to the owner, in writing, the job opportunity building
zone percentage needed to determine the exemption.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 22. [469.317] [CORPORATE FRANCHISE TAX EXEMPTION.]
(a) A qualified business is exempt from taxation under
section 290.02, the alternative minimum tax under section
290.0921, and the minimum fee under section 290.0922, on the
portion of its income attributable to operations within the
zone. This exemption is determined as follows:
(1) for purposes of the tax imposed under section 290.02,
by multiplying its taxable net income by its zone percentage and
subtracting the result in determining taxable income;
(2) for purposes of the alternative minimum tax under
section 290.0921, by multiplying its alternative minimum taxable
income by its zone percentage and reducing alternative minimum
taxable income by this amount; and
(3) for purposes of the minimum fee under section 290.0922,
by excluding property and payroll in the zone from the
computations of the fee or by exempting the entity under section
290.0922, subdivision 2, clause (7).
(b) No subtraction is allowed under this section in excess
of 20 percent of the sum of the corporation's job opportunity
building zone payroll and the adjusted basis of the property at
the time that the property is first used in the job opportunity
building zone by the corporation.
(c) This section applies only to taxable years beginning
during the duration of the job opportunity building zone.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 23. [469.318] [JOBS CREDIT.]
Subdivision 1. [CREDIT ALLOWED.] A qualified business is
allowed a credit against the taxes imposed under chapter 290.
The credit equals seven percent of the:
(1) lesser of:
(i) zone payroll for the taxable year, less the zone
payroll for the base year; or
(ii) total Minnesota payroll for the taxable year, less
total Minnesota payroll for the base year; minus
(2) $30,000 multiplied by (the number of full-time
equivalent employees that the qualified business employs in the
job opportunity building zone for the taxable year, minus the
number of full-time equivalent employees the business employed
in the zone in the base year, but not less than zero).
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Base year" means the taxable year beginning during the
calendar year prior to the calendar year in which the zone
designation took effect.
(c) "Full-time equivalent employees" means the equivalent
of annualized expected hours of work equal to 2,080 hours.
(d) "Minnesota payroll" means the wages or salaries
attributed to Minnesota under section 290.191, subdivision 12,
for the qualified business or the unitary business of which the
qualified business is a part, whichever is greater.
(e) "Zone payroll" means wages or salaries used to
determine the zone payroll factor for the qualified business,
less the amount of compensation attributable to any employee
that exceeds $100,000.
Subd. 3. [INFLATION ADJUSTMENT.] For taxable years
beginning after December 31, 2004, the dollar amounts in
subdivision 1, clause (2), and subdivision 2, paragraph (e), are
annually adjusted for inflation. The commissioner of revenue
shall adjust the amounts by the percentage determined under
section 290.06, subdivision 2d, for the taxable year.
Subd. 4. [REFUNDABLE.] If the amount of the credit exceeds
the liability for tax under chapter 290, the commissioner of
revenue shall refund the excess to the qualified business.
Subd. 5. [APPROPRIATION.] An amount sufficient to pay the
refunds authorized by this section is appropriated to the
commissioner of revenue from the general fund.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 24. [469.319] [REPAYMENT OF TAX BENEFITS.]
Subdivision 1. [REPAYMENT OBLIGATION.] A business must
repay the amount of the total tax reduction listed in section
469.315 and any refund under section 469.318 in excess of tax
liability, received during the two years immediately before it
ceased to operate in the zone, if the business:
(1) received tax reductions authorized by section 469.315;
and
(2)(i) did not meet the goals specified in an agreement
entered into with the applicant that states any obligation the
qualified business must fulfill in order to be eligible for tax
benefits. The commissioner may extend for up to one year the
period for meeting any goals provided in an agreement. The
applicant may extend the period for meeting other goals by
documenting in writing the reason for the extension and
attaching a copy of the document to its next annual report to
the commissioner; or
(ii) ceased to operate its facility located within the job
opportunity building zone or otherwise ceases to be or is not a
qualified business.
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Business" means any person who received tax benefits
enumerated in section 469.315.
(c) "Commissioner" means the commissioner of revenue.
Subd. 3. [DISPOSITION OR REPAYMENT.] The repayment must be
paid to the state to the extent it represents a state tax
reduction and to the county to the extent it represents a
property tax reduction. Any amount repaid to the state must be
deposited in the general fund. Any amount repaid to the county
for the property tax exemption must be distributed to the local
governments with authority to levy taxes in the zone in the same
manner provided for distribution of payment of delinquent
property taxes. Any repayment of local sales taxes must be
repaid to the city or county imposing the local sales tax.
Subd. 4. [REPAYMENT PROCEDURES.] (a) For the repayment of
taxes imposed under chapter 290 or 297A or local taxes collected
pursuant to section 297A.99, a business must file an amended
return with the commissioner of revenue and pay any taxes
required to be repaid within 30 days after ceasing to do
business in the zone. The amount required to be repaid is
determined by calculating the tax for the period or periods for
which repayment is required without regard to the exemptions and
credits allowed under section 469.315.
(b) For the repayment of taxes imposed under chapter 297B,
a business must pay any taxes required to be repaid to the motor
vehicle registrar, as agent for the commissioner of revenue,
within 30 days after ceasing to do business in the zone.
(c) For the repayment of property taxes, the county auditor
shall prepare a tax statement for the business, applying the
applicable tax extension rates for each payable year and provide
a copy to the business. The business must pay the taxes to the
county treasurer within 30 days after receipt of the tax
statement. The taxpayer may appeal the valuation and
determination of the property tax to the tax court within 30
days after receipt of the tax statement.
(d) The provisions of chapters 270 and 289A relating to the
commissioner's authority to audit, assess, and collect the tax
and to hear appeals are applicable to the repayment required
under paragraphs (a) and (b). The commissioner may impose civil
penalties as provided in chapter 289A, and the additional tax
and penalties are subject to interest at the rate provided in
section 270.75, from 30 days after ceasing to do business in the
job opportunity building zone until the date the tax is paid.
(e) If a property tax is not repaid under paragraph (c),
the county treasurer shall add the amount required to be repaid
to the property taxes assessed against the property for payment
in the year following the year in which the treasurer discovers
that the business ceased to operate in the job opportunity
building zone.
(f) For determining the tax required to be repaid, a tax
reduction is deemed to have been received on the date that the
tax would have been due if the taxpayer had not been entitled to
the exemption or on the date a refund was issued for a
refundable tax credit.
(g) The commissioner may assess the repayment of taxes
under paragraph (d) any time within two years after the business
ceases to operate in the job opportunity building zone, or
within any period of limitations for the assessment of tax under
section 289A.38, whichever period is later.
Subd. 5. [WAIVER AUTHORITY.] The commissioner may waive
all or part of a repayment, if the commissioner, in consultation
with the commissioner of trade and economic development and
appropriate officials from the local government units in which
the qualified business is located, determines that requiring
repayment of the tax is not in the best interest of the state or
the local government units and the business ceased operating as
a result of circumstances beyond its control including, but not
limited to:
(1) a natural disaster;
(2) unforeseen industry trends; or
(3) loss of a major supplier or customer.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 25. [469.320] [ZONE PERFORMANCE; REMEDIES.]
Subdivision 1. [REPORTING REQUIREMENT.] An applicant
receiving designation of a job opportunity building zone under
section 469.314 must annually report to the commissioner on its
progress in meeting the zone performance goals under the
development plan for the zone and the applicant's compliance
with the business subsidy law under sections 116J.993 to
116J.995.
Subd. 2. [PROCEDURES.] For reports required by subdivision
1, the commissioner may prescribe:
(1) the required time or times by which the reports must be
filed;
(2) the form of the report; and
(3) the information required to be included in the report.
Subd. 3. [REMEDIES.] If the commissioner determines, based
on a report filed under subdivision 1 or other available
information, that a zone or subzone is failing to meet its
performance goals, the commissioner may take any actions the
commissioner determines appropriate, including modification of
the boundaries of the zone or a subzone or termination of the
zone or a subzone. Before taking any action, the commissioner
shall consult with the applicant and the affected local
government units, including notifying them of the proposed
actions to be taken. The commissioner shall publish any order
modifying a zone in the State Register and on the Internet. The
applicant may appeal the commissioner's order under the
contested case procedures of chapter 14.
Subd. 4. [EXISTING BUSINESSES.] (a) An action to remove
area from a zone or to terminate a zone under this section does
not apply to:
(1) the property tax on improvements constructed before the
first January 2 following publication of the commissioner's
order;
(2) sales tax on purchases made before the first day of the
next calendar month beginning at least 30 days after publication
of the commissioner's order; and
(3) individual income tax or corporate franchise tax
attributable to a facility that was in operation before the
publication of the commissioner's order.
(b) The tax exemptions specified in paragraph (a) terminate
on the date on which the zone expires under the original
designation.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 26. [477A.08] [JOB OPPORTUNITY BUILDING ZONE AID.]
Subdivision 1. [ELIGIBILITY.] (a) For each assessment year
that the exemption for job opportunity building zone property is
in effect under section 272.02, subdivision 64, the assessor
shall determine the difference between the actual net tax
capacity and the net tax capacity that would be determined for
the job opportunity building zone, including any property
removed from the zone that continues to qualify under section
469.320, subdivision 4, if the exemption were not in effect.
(b) Each city and county is eligible for aid equal to
one-half of:
(1) the amount by which the sum of the differences
determined in paragraph (a) for the corresponding assessment
year exceeds three percent of the city's or county's total
taxable net tax capacity for taxes payable in 2003, multiplied
by
(2) the city's or the county's, as applicable, average
local tax rate for taxes payable in 2003.
Subd. 2. [CERTIFICATION.] The county assessor shall notify
the commissioner of revenue of the amount determined under
subdivision 1, paragraph (b), clause (1), for any city or county
that qualifies for aid under this section by June 30 of the
assessment year, in a form prescribed by the commissioner. The
commissioner shall notify each city and county of its qualifying
aid amount by August 15 of the assessment year.
Subd. 3. [APPROPRIATION; PAYMENT.] The commissioner shall
pay each city and county its qualifying aid amount by July 20 of
the following year. An amount sufficient to pay the aid under
this section is appropriated to the commissioner of revenue from
the general fund.
[EFFECTIVE DATE.] This section is effective beginning for
aid based on property taxes assessed in 2004, payable in 2005.
Sec. 27. [APPROPRIATION; COST OF ADMINISTRATION.]
$100,000 in fiscal year 2004 and $30,000 in fiscal year
2005 are appropriated to the commissioner of trade and economic
development for the cost of designating job opportunity building
zones.
$53,000 in fiscal year 2004 and $29,000 in fiscal year 2005
are appropriated to the commissioner of revenue for the cost of
administering the tax provisions of this act.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 2
BIOTECHNOLOGY AND HEALTH SCIENCE ZONES
Section 1. [LEGISLATIVE FINDINGS.]
The legislature finds, as a matter of public policy, that
biotechnology and the health sciences hold immense promise in
improving the quality of our lives, including curing diseases,
making our foods safer and more abundant, reducing our
dependence on fossil fuels and foreign oil, making better use of
Minnesota agriculture products, and growing tens of thousands of
new, high-paying jobs.
The legislature further finds that there are hundreds of
discoveries made each year at the University of Minnesota, the
Mayo Clinic, and other research institutions that, if properly
commercialized, could help provide these benefits.
The legislature further finds that biotechnology and health
sciences companies benefit from location in proximity to these
research institutions and the many faculty, students, and other
intellectual and physical infrastructure these institutions
provide.
The legislature further finds that Minnesota's high-quality
workforce is attractive to biotechnology and health sciences
companies that would want to relocate, start up, or expand in
Minnesota.
The legislature further finds and declares that it is
appropriate and necessary, to improve our quality of life and as
a matter of economic development, that Minnesota take rapid and
affirmative steps to encourage the development of biotechnology
and the health sciences and the commercialization of important
discoveries, especially through expansion of business
opportunities in proximity to the research institutions where
those discoveries occur. This must include attention to the
ethical, legal, and societal impacts of the industry, including
risk assessment and environmental protection.
Sec. 2. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 65. [BIOTECHNOLOGY AND HEALTH SCIENCES INDUSTRY ZONE
PROPERTY.] (a) Improvements to real property, and personal
property, classified under section 273.13, subdivision 24, and
located within a biotechnology and health sciences industry zone
are exempt from ad valorem taxes levied under chapter 275, as
provided in this subdivision.
(b) For property to qualify for exemption under paragraph
(a), the occupant must be a qualified business, as defined in
section 469.330.
(c) The exemption applies beginning for the first
assessment year after designation of the biotechnology and
health sciences industry zone by the commissioner of trade and
economic development. The exemption applies to each assessment
year that begins during the duration of the biotechnology and
health sciences industry zone. This exemption does not apply to:
(1) a levy under section 475.61 or similar levy provisions
under any other law to pay general obligation bonds; or
(2) a levy under section 126C.17, if the levy was approved
by the voters before the designation of the biotechnology and
health sciences industry zone.
(d) The exemption does not apply to taxes imposed by a
city, town, or county, unless the governing body adopts a
resolution granting the exemption. A city, town, or county may
provide a complete property tax exemption, partial property tax
exemption, or no property tax exemption to qualified businesses
in the biotechnology and health sciences industry zone. "City"
includes a statutory or home rule charter city.
(e) For property located in a tax increment financing
district, the county shall not adjust the original net tax
capacity of the district under section 469.177, subdivision 1,
paragraph (a), upon the expiration of an exemption under this
subdivision.
[EFFECTIVE DATE.] This section is effective beginning for
property taxes assessed in 2004, payable in 2005.
Sec. 3. Minnesota Statutes 2002, section 290.01,
subdivision 29, is amended to read:
Subd. 29. [TAXABLE INCOME.] The term "taxable income"
means:
(1) for individuals, estates, and trusts, the same as
taxable net income;
(2) for corporations, the taxable net income less
(i) the net operating loss deduction under section 290.095;
and
(ii) the dividends received deduction under section 290.21,
subdivision 4; and
(iii) the exemption for operating in a biotechnology and
health sciences industry zone under section 469.337.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 4. Minnesota Statutes 2002, section 290.06, is
amended by adding a subdivision to read:
Subd. 30. [BIOTECHNOLOGY AND HEALTH SCIENCE INDUSTRY ZONE
JOB CREDIT.] A taxpayer that is a qualified business, as defined
in section 469.330, subdivision 11, is allowed a credit as
determined under section 469.338 against the franchise tax
imposed under section 290.06, subdivision 1, or the alternative
minimum tax imposed under section 290.0921.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 5. Minnesota Statutes 2002, section 290.06, is
amended by adding a subdivision to read:
Subd. 31. [BIOTECHNOLOGY AND HEALTH SCIENCE INDUSTRY ZONE
RESEARCH AND DEVELOPMENT CREDIT.] A taxpayer that is a qualified
business, as defined in section 469.330, subdivision 11, is
allowed a credit as determined under section 469.339 against the
franchise tax imposed under section 290.06, subdivision 1, or
the alternative minimum tax imposed under section 290.0921.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 6. Minnesota Statutes 2002, section 290.0921,
subdivision 3, is amended to read:
Subd. 3. [ALTERNATIVE MINIMUM TAXABLE INCOME.]
"Alternative minimum taxable income" is Minnesota net income as
defined in section 290.01, subdivision 19, and includes the
adjustments and tax preference items in sections 56, 57, 58, and
59(d), (e), (f), and (h) of the Internal Revenue Code. If a
corporation files a separate company Minnesota tax return, the
minimum tax must be computed on a separate company basis. If a
corporation is part of a tax group filing a unitary return, the
minimum tax must be computed on a unitary basis. The following
adjustments must be made.
(1) For purposes of the depreciation adjustments under
section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code,
the basis for depreciable property placed in service in a
taxable year beginning before January 1, 1990, is the adjusted
basis for federal income tax purposes, including any
modification made in a taxable year under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c).
For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c), not previously deducted is a
depreciation allowance in the first taxable year after December
31, 2000.
(2) The portion of the depreciation deduction allowed for
federal income tax purposes under section 168(k) of the Internal
Revenue Code that is required as an addition under section
290.01, subdivision 19c, clause (16), is disallowed in
determining alternative minimum taxable income.
(3) The subtraction for depreciation allowed under section
290.01, subdivision 19d, clause (19), is allowed as a
depreciation deduction in determining alternative minimum
taxable income.
(4) The alternative tax net operating loss deduction under
sections 56(a)(4) and 56(d) of the Internal Revenue Code does
not apply.
(5) The special rule for certain dividends under section
56(g)(4)(C)(ii) of the Internal Revenue Code does not apply.
(6) The special rule for dividends from section 936
companies under section 56(g)(4)(C)(iii) does not apply.
(7) The tax preference for depletion under section 57(a)(1)
of the Internal Revenue Code does not apply.
(8) The tax preference for intangible drilling costs under
section 57(a)(2) of the Internal Revenue Code must be calculated
without regard to subparagraph (E) and the subtraction under
section 290.01, subdivision 19d, clause (4).
(9) The tax preference for tax exempt interest under
section 57(a)(5) of the Internal Revenue Code does not apply.
(10) The tax preference for charitable contributions of
appreciated property under section 57(a)(6) of the Internal
Revenue Code does not apply.
(11) For purposes of calculating the tax preference for
accelerated depreciation or amortization on certain property
placed in service before January 1, 1987, under section 57(a)(7)
of the Internal Revenue Code, the deduction allowable for the
taxable year is the deduction allowed under section 290.01,
subdivision 19e.
For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, not previously deducted is a depreciation or
amortization allowance in the first taxable year after December
31, 2004.
(12) For purposes of calculating the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code, the term "alternative minimum taxable income" as
it is used in section 56(g) of the Internal Revenue Code, means
alternative minimum taxable income as defined in this
subdivision, determined without regard to the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code.
(13) For purposes of determining the amount of adjusted
current earnings under section 56(g)(3) of the Internal Revenue
Code, no adjustment shall be made under section 56(g)(4) of the
Internal Revenue Code with respect to (i) the amount of foreign
dividend gross-up subtracted as provided in section 290.01,
subdivision 19d, clause (1), (ii) the amount of refunds of
income, excise, or franchise taxes subtracted as provided in
section 290.01, subdivision 19d, clause (10), or (iii) the
amount of royalties, fees or other like income subtracted as
provided in section 290.01, subdivision 19d, clause (11).
(14) Alternative minimum taxable income excludes the income
from operating in a biotechnology and health sciences industry
zone as provided under section 469.337.
Items of tax preference must not be reduced below zero as a
result of the modifications in this subdivision.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 7. Minnesota Statutes 2002, section 290.0922,
subdivision 3, is amended to read:
Subd. 3. [DEFINITIONS.] (a) "Minnesota sales or receipts"
means the total sales apportioned to Minnesota pursuant to
section 290.191, subdivision 5, the total receipts attributed to
Minnesota pursuant to section 290.191, subdivisions 6 to 8,
and/or the total sales or receipts apportioned or attributed to
Minnesota pursuant to any other apportionment formula applicable
to the taxpayer.
(b) "Minnesota property" means total Minnesota tangible
property as provided in section 290.191, subdivisions 9 to 11,
and any other tangible property located in Minnesota, but does
not include property of a qualified business located in a
biotechnology and health sciences zone designated under section
469.334. Intangible property shall not be included in Minnesota
property for purposes of this section. Taxpayers who do not
utilize tangible property to apportion income shall nevertheless
include Minnesota property for purposes of this section. On a
return for a short taxable year, the amount of Minnesota
property owned, as determined under section 290.191, shall be
included in Minnesota property based on a fraction in which the
numerator is the number of days in the short taxable year and
the denominator is 365.
(c) "Minnesota payrolls" means total Minnesota payrolls as
provided in section 290.191, subdivision 12, but does not
include biotechnology and health sciences zone payroll under
section 469.330, subdivision 8. Taxpayers who do not utilize
payrolls to apportion income shall nevertheless include
Minnesota payrolls for purposes of this section.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 8. Minnesota Statutes 2002, section 297A.68, is
amended by adding a subdivision to read:
Subd. 38. [BIOTECHNOLOGY AND HEALTH SCIENCES INDUSTRY
ZONE.] (a) Purchases of tangible personal property or taxable
services by a qualified business, as defined in section 469.330,
are exempt if the property or services are primarily used or
consumed in a biotechnology and health sciences industry zone
designated under section 469.334.
(b) Purchase and use of construction materials and supplies
for construction of improvements to real property in a
biotechnology and health sciences industry zone are exempt if
the improvements after completion of construction are to be used
in the conduct of a qualified business, as defined in section
469.330. This exemption applies regardless of whether the
purchases are made by the business or a contractor.
(c) The exemptions under this subdivision apply to a local
sales and use tax regardless of whether the local sales tax is
imposed on the sales taxable as defined under this chapter.
(d)(1) The tax on sales of goods or services exempted under
this subdivision are imposed and collected as if the applicable
rate under section 297A.62 applied. Upon application by the
purchaser, on forms prescribed by the commissioner, a refund
equal to the tax paid must be paid to the purchaser. The
application must include sufficient information to permit the
commissioner to verify the sales tax paid and the eligibility of
the claimant to receive the credit. No more than two
applications for refunds may be filed under this subdivision in
a calendar year. The provisions of section 289A.40 apply to the
refunds payable under this subdivision.
(2) The amount required to make the refunds is annually
appropriated to the commissioner of revenue.
(3) The aggregate amount refunded to a qualified business
must not exceed the amount allocated to the qualified business
under section 469.335.
(e) This subdivision applies only to sales made during the
duration of the designation of the zone.
[EFFECTIVE DATE.] This section is effective for sales made
on or after the day following final enactment.
Sec. 9. [469.330] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of sections 469.330
to 469.341, the following terms have the meanings given.
Subd. 2. [APPLICANT.] "Applicant" means a local government
unit or units applying for designation of an area as a
biotechnology and health sciences industry zone or a joint
powers board, established under section 471.59, acting on behalf
of two or more local government units.
Subd. 3. [BIOTECHNOLOGY AND HEALTH SCIENCES INDUSTRY
FACILITY.] "Biotechnology and health sciences industry facility"
means one or more facilities or operations involved in:
(1) researching, developing, and/or manufacturing a
biotechnology product or service or a biotechnology-related
health sciences product or service;
(2) researching, developing, and/or manufacturing a
biotechnology medical device product or service or a
biotechnology-related medical device product or service; or
(3) promoting, supplying, or servicing a facility or
operation involved in clause (1) or (2), if the business derives
more than 50 percent of its gross receipts from those activities.
Subd. 4. [COMMISSIONER.] "Commissioner" means the
commissioner of trade and economic development.
Subd. 5. [DEVELOPMENT PLAN.] "Development plan" means a
plan meeting the requirements of section 469.331.
Subd. 6. [BIOTECHNOLOGY AND HEALTH SCIENCES INDUSTRY ZONE
OR ZONE.] "Biotechnology and health sciences industry zone" or
"zone" means a zone designated by the commissioner under section
469.334.
Subd. 7. [BIOTECHNOLOGY AND HEALTH SCIENCES INDUSTRY ZONE
PERCENTAGE OR ZONE PERCENTAGE.] "Biotechnology and health
sciences industry zone percentage" or "zone percentage" means
the following fraction reduced to a percentage:
(1) the numerator of the fraction is:
(i) the ratio of the taxpayer's property factor under
section 290.191 located in the zone for the taxable year over
the property factor numerator determined under section 290.191,
plus
(ii) the ratio of the taxpayer's biotechnology and health
sciences industry zone payroll factor under subdivision 8 over
the payroll factor numerator determined under section 290.191;
and
(2) the denominator of the fraction is two.
When calculating the zone percentage for a business that is
part of a unitary business as defined under section 290.17,
subdivision 4, the denominator of the payroll and property
factors is the Minnesota payroll and property of the unitary
business as reported on the combined report under section
290.17, subdivision 4, paragraph (j).
Subd. 8. [BIOTECHNOLOGY AND HEALTH SCIENCES INDUSTRY ZONE
PAYROLL FACTOR.] "Biotechnology and health sciences industry
zone payroll factor" or "biotechnology and health sciences
industry zone payroll" is that portion of the payroll factor
under section 290.191 that represents:
(1) wages or salaries paid to an individual for services
performed for a qualified business in a biotechnology and health
sciences industry zone; or
(2) wages or salaries paid to individuals working from
offices of a qualified business within a biotechnology and
health sciences industry zone if their employment requires them
to work outside the zone and the work is incidental to the work
performed by the individual within the zone.
Subd. 9. [LOCAL GOVERNMENT UNIT.] "Local government unit"
means a statutory or home rule charter city, county, town, or
school district.
Subd. 10. [PERSON.] "Person" includes an individual,
corporation, partnership, limited liability company,
association, or any other entity.
Subd. 11. [QUALIFIED BUSINESS.] (a) "Qualified business"
means a person carrying on a trade or business at a
biotechnology and health sciences industry facility located
within a biotechnology and health sciences industry zone.
(b) A person that relocates a biotechnology and health
sciences industry facility from outside a biotechnology and
health sciences industry zone into a zone is not a qualified
business, unless the business:
(1)(i) increases full-time employment in the first full
year of operation within the biotechnology and health sciences
industry zone by at least 20 percent measured relative to the
operations that were relocated and maintains the required level
of employment for each year the zone designation applies; or
(ii) makes a capital investment in the property located
within a zone equivalent to ten percent of the gross revenues of
operation that were relocated in the immediately preceding
taxable year; and
(2) enters a binding written agreement with the
commissioner that:
(i) pledges the business will meet the requirements of
clause (1);
(ii) provides for repayment of all tax benefits enumerated
under section 469.336 to the business under the procedures in
section 469.340, if the requirements of clause (1) are not met;
and
(iii) contains any other terms the commissioner determines
appropriate.
Subd. 12. [RELOCATES.] (a) "Relocates" means that the
trade or business:
(1) ceases one or more operations or functions at another
location in Minnesota and begins performing substantially the
same operations or functions at a location in a biotechnology
and health sciences industry zone; or
(2) reduces employment at another location in Minnesota
during a period starting one year before and ending one year
after it begins operations in a biotechnology and health
sciences industry zone and its employees in the biotechnology
and health sciences industry zone are engaged in the same line
of business as the employees at the location where it reduced
employment.
(b) "Relocate" does not include an expansion by a business
that establishes a new facility that does not replace or
supplant an existing operation or employment, in whole or in
part.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. [469.331] [DEVELOPMENT PLAN.]
(a) An applicant for designation of a biotechnology and
health sciences industry zone must adopt a written development
plan for the zone before submitting the application to the
commissioner.
(b) The development plan must contain, at least, the
following:
(1) a map of the proposed zone that indicates the
geographic boundaries of the zone, the total area, and present
use and conditions generally of the land and structures within
those boundaries;
(2) evidence of community support and commitment from local
government, local workforce investment boards, school districts,
and other education institutions, business groups, and the
public;
(3) a description of the methods proposed to increase
economic opportunity and expansion, facilitate infrastructure
improvement, reduce the local regulatory burden, and identify
job-training opportunities;
(4) current social, economic, and demographic
characteristics of the proposed zone and anticipated
improvements in education, health, human services, and
employment if the zone is created;
(5) a description of anticipated activity in the zone and
each subzone, including, but not limited to, industrial use and
industrial site reuse;
(6) a description of the tax exemptions under section
469.336 to be provided to each qualifying business based on a
development agreement between the applicant and each qualified
business. The development agreement must also state any
obligations the qualified business must fulfill in order to be
eligible for tax benefits; and
(7) any other information required by the commissioner.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. [469.332] [BIOTECHNOLOGY AND HEALTH SCIENCES
INDUSTRY ZONE; LIMITATIONS.]
Subdivision 1. [MAXIMUM SIZE.] A biotechnology and health
sciences industry zone may not exceed 5,000 acres.
Subd. 2. [SUBZONES.] The area of a biotechnology and
health sciences industry zone may consist of one or more
noncontiguous areas or subzones.
Subd. 3. [DURATION LIMIT.] The maximum duration of a zone
is 12 years. The applicant may request a shorter duration. The
commissioner may specify a shorter duration, regardless of the
requested duration.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 12. [469.333] [APPLICATION FOR DESIGNATION.]
Subdivision 1. [WHO MAY APPLY.] One or more local
government units, or a joint powers board under section 471.59,
acting on behalf of two or more units, may apply for designation
of an area as a biotechnology and health sciences industry
zone. All or part of the area proposed for designation as a
zone must be located within the boundaries of each of the
governmental units. A local government unit may not submit or
have submitted on its behalf more than one application for
designation of a biotechnology and health sciences industry zone.
Subd. 2. [APPLICATION CONTENT.] The application must
include:
(1) a development plan meeting the requirements of section
469.331;
(2) the proposed duration of the zone, not to exceed 12
years;
(3)(i) a resolution or ordinance adopted by each of the
cities or towns and the counties in which the zone is located,
agreeing to provide all of the local sales and use tax
exemptions provided under section 469.336; or (ii) a resolution
or ordinance adopted by each of the cities or towns and the
counties in which the zone is located that declares whether it
will provide property tax exemptions under section 469.336;
(4) an agreement by the applicant to treat incentives
provided under the zone designation as business subsidies under
sections 116J.993 to 116J.995 and to comply with the
requirements of that law; and
(5) supporting evidence to allow the commissioner to
evaluate the application under the criteria in section 469.334.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. [469.334] [DESIGNATION OF BIOTECHNOLOGY AND
HEALTH SCIENCES INDUSTRY ZONE.]
Subdivision 1. [COMMISSIONER TO DESIGNATE.] (a) The
commissioner, in consultation with the commissioner of revenue
and the director of the office of strategic and long-range
planning, shall designate not more than one biotechnology and
health sciences industry zone. Priority must be given to
applicants with a development plan that links a higher
education/research institution with a biotechnology and health
sciences industry facility.
(b) The commissioner may consult with the applicant prior
to the designation of the zone. The commissioner may modify the
development plan, including the boundaries of the zone or
subzones, if in the commissioner's opinion a modified plan would
better meet the objectives of the biotechnology and health
sciences industry zone program. The commissioner shall notify
the applicant of the modifications and provide a statement of
the reasons for the modifications.
Subd. 2. [NEED INDICATORS.] (a) In evaluating applications
to determine the need for designation of a biotechnology and
health sciences industry zone, the commissioner shall consider
the following factors as indicators of need:
(1) the extent to which land in proximity to a significant
scientific research institution could be developed as a higher
and better use for biotechnology and health sciences industry
facilities;
(2) the amount of property in or near the zone that is
deteriorated or underutilized; and
(3) the extent to which property in the area would remain
underdeveloped or nonperforming due to physical characteristics.
(b) The commissioner may require applicants to provide data
to demonstrate how the area meets one or more of the indicators
of need.
Subd. 3. [SUCCESS INDICATORS.] In determining the
likelihood of success of a proposed zone, the commissioner shall
consider:
(1) applicants that show a viable link between a higher
education/research institution, the biotechnology and/or medical
devices business sectors, and one or more units of local
government with a development plan;
(2) the extent to which the area has substantial real
property with adequate infrastructure and energy to support new
or expanded development;
(3) the strength and viability of the proposed development
goals, objectives, and strategies in the development plan;
(4) whether the development plan is creative and innovative
in comparison to other applications;
(5) local public and private commitment to development of a
biotechnology and health sciences industry facility or
facilities in the proposed zone and the potential cooperation of
surrounding communities;
(6) existing resources available to the proposed zone;
(7) how the designation of the zone would relate to other
economic and community development projects and to regional
initiatives or programs;
(8) how the regulatory burden will be eased for
biotechnology and health sciences industry facilities located in
the proposed zone;
(9) proposals to establish and link job creation and job
training in the biotechnology and health sciences industry with
research/educational institutions; and
(10) the extent to which the development is directed at
encouraging, and that designation of the zone is likely to
result in, the creation of high-paying jobs.
Subd. 4. [DESIGNATION SCHEDULE.] (a) The schedule in
paragraphs (b) to (e) applies to the designation of the
biotechnology and health sciences industry zone.
(b) The commissioner shall publish the form for
applications and any procedural, form, or content requirements
for applications by no later than August 1, 2003. The
commissioner may publish these requirements on the Internet, in
the State Register, or by any other means the commissioner
determines appropriate to disseminate the information to
potential applicants for designation.
(c) Applications must be submitted by October 15, 2003.
(d) The commissioner shall designate the zones by no later
than December 31, 2003.
(e) The designation of the zones takes effect January 1,
2004.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. [469.335] [APPLICATION FOR TAX BENEFITS.]
(a) To claim a tax credit or exemption against a state tax
under section 469.336, clauses (2) through (5), a business must
apply to the commissioner for a tax credit certificate. As a
condition of its application, the business must agree to furnish
information to the commissioner that is sufficient to verify the
eligibility for any credits or exemptions claimed. The total
amount of the state tax credits and exemptions allowed for the
specified period may not exceed the amount of the tax credit
certificates provided by the commissioner to the business. The
commissioner must verify to the commissioner of revenue the
amount of tax exemptions or credits for which each business is
eligible.
(b) A tax credit certificate issued under this section may
specify the particular tax exemptions or credits against a state
tax that the qualified business is eligible to claim under
section 469.336, clauses (2) through (5), and the amount of each
exemption or credit allowed.
(c) The commissioner may issue $1,000,000 of tax credits or
exemptions in fiscal year 2004. Any tax credits or exemptions
not awarded in fiscal year 2004 may be awarded in fiscal year
2005.
(d) A qualified business must use the tax credits or tax
exemptions granted under this section by the later of the end of
the state fiscal year or the taxpayer's tax year in which the
credits or exemptions are granted.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. [469.336] [TAX INCENTIVES AVAILABLE IN ZONES.]
Qualified businesses that operate in a biotechnology and
health sciences industry zone, individuals who invest in a
qualified business that operates in a biotechnology and health
sciences industry zone, and property of a qualified business
located in a biotechnology and health sciences industry zone
qualify for:
(1) exemption from the property tax as provided in section
272.02, subdivision 65;
(2) exemption from corporate franchise taxes as provided
under section 469.337;
(3) exemption from the state sales and use tax and any
local sales and use taxes on qualifying purchases as provided in
section 297A.68, subdivision 37;
(4) research and development credits as provided under
section 469.339;
(5) jobs credits as provided under section 469.338.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. [469.337] [CORPORATE FRANCHISE TAX EXEMPTION.]
(a) A qualified business is exempt from taxation under
section 290.02, the alternative minimum tax under section
290.0921, and the minimum fee under section 290.0922, on the
portion of its income attributable to operations of a qualified
business within the biotechnology and health sciences industry
zone. This exemption is determined as follows:
(1) for purposes of the tax imposed under section 290.02,
by multiplying its taxable net income by its zone percentage and
subtracting the result in determining taxable income;
(2) for purposes of the alternative minimum tax under
section 290.0921, by multiplying its alternative minimum taxable
income by its zone percentage and reducing alternative minimum
taxable income by this amount; and
(3) for purposes of the minimum fee under section 290.0922,
by excluding property and payroll in the zone from the
computations of the fee.
(b) No subtraction is allowed under this section in excess
of 20 percent of the sum of the corporation's biotechnology and
health sciences industry zone payroll and the adjusted basis of
the property at the time that the property is first used in the
biotechnology and health sciences industry zone by the
corporation.
(c) No reduction in tax is allowed in excess of the amount
allocated under section 469.335.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2003.
Sec. 17. [469.338] [JOBS CREDIT.]
Subdivision 1. [CREDIT ALLOWED.] A qualified business is
allowed a credit against the taxes imposed under chapter 290.
The credit equals seven percent of the:
(1) lesser of:
(i) zone payroll for the taxable year, less the zone
payroll for the base year; or
(ii) total Minnesota payroll for the taxable year, less
total Minnesota payroll for the base year; minus
(2) $30,000 multiplied by the number of full-time
equivalent employee positions that the qualified business
employs in the biotechnology and health sciences industry zone
for the taxable year, minus the number of full-time equivalent
employees the business employed in the zone in the base year,
but not less than zero.
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meaning given.
(b) "Base year" means the taxable year beginning during the
calendar year in which the commissioner designated the zone.
(c) "Full-time equivalent employee position" means the
equivalent of annualized expected hours of work equal to 2,080
hours.
(d) "Minnesota payroll" means the wages or salaries
attributed to Minnesota under section 290.191, subdivision 12,
for the qualified business or the unitary business of which the
qualified business is a part, whichever is greater.
(e) "Zone payroll" means wages or salaries used to
determine the zone payroll factor for the qualified business.
Subd. 3. [INFLATION ADJUSTMENT.] For taxable years
beginning after December 31, 2004, the dollar amount in
subdivision 1, clause (2), is annually adjusted for inflation.
The commissioner of revenue shall adjust the amount by the
percentage determined under section 290.06, subdivision 2d, for
the taxable year.
Subd. 4. [REFUNDABLE.] If the amount of the credit
calculated under this section and allocated to the qualified
business under section 14 exceeds the liability for tax under
chapter 290, the commissioner of revenue shall refund the excess
to the qualified business.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 18. [469.339] [CREDIT FOR INCREASING RESEARCH
ACTIVITIES IN A BIOTECHNOLOGY AND HEALTH SCIENCES ZONE.]
Subdivision 1. [CREDIT ALLOWED.] A corporation, other than
a corporation treated as an "S" corporation under section
290.9725, is allowed a credit against the portion of the
franchise tax computed under section 290.06, subdivision 1, for
the taxable year equal to:
(1) five percent of the first $2,000,000 of the excess (if
any) of (i) the qualified research expenses for the taxable
year, over (ii) the base amount; and
(2) 2.5 percent of all such excess expenses over $2,000,000.
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Qualified research expenses" means qualified research
expenses and basic research payments as defined in section 41(b)
and (e) of the Internal Revenue Code.
(c) "Qualified research" means activities in the fields of
biotechnology or health sciences that are "qualified research"
as defined in section 41(d) of the Internal Revenue Code, except
that the term does not include qualified research conducted
outside the biotechnology and health sciences industry zone.
(d) "Base amount" means base amount as defined in section
4(c) of the Internal Revenue Code, except that the average
annual gross receipts must be calculated using Minnesota sales
or receipts under section 290.191 and the definitions contained
in paragraphs (b) and (c) apply.
(e) "Liability for tax" for purposes of this section means
the tax imposed under this chapter for the taxable year reduced
by the sum of the nonrefundable credits allowed under this
chapter.
Subd. 3. [REFUNDABLE CREDIT.] If the credit determined
under this section and allocated to the taxpayer under section
469.335 for the taxable year exceeds the taxpayer's liability
for tax for the year, the commissioner shall refund the
difference to the taxpayer.
Subd. 4. [PARTNERSHIPS.] For partnerships, the credit is
allocated in the same manner provided by section 41(f)(2) of the
Internal Revenue Code.
Subd. 5. [ADJUSTMENTS; ACQUISITIONS AND DISPOSITIONS.] If
a taxpayer acquires or disposes of the major portion of a trade
or business or the major portion of a separate unit of a trade
or business in a transaction with another taxpayer, the
taxpayer's qualified research expenses and base amount are
adjusted in the same manner provided by section 41(f)(3) of the
Internal Revenue Code.
Subd. 6. [INTERACTION; REGULAR RESEARCH CREDIT.] Any
amount used to calculate a credit under this section may not be
used to generate a credit under section 290.068.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 19. [469.340] [REPAYMENT OF TAX BENEFITS.]
Subdivision 1. [REPAYMENT OBLIGATION.] A business must
repay the amount of the tax reduction listed in section 469.336
and any refunds under sections 469.338 and 469.339 in excess of
tax liability, received during the two years immediately before
it ceased to operate in the zone, if the business:
(1) received tax reductions authorized by section 469.336;
and
(2)(i) did not meet the goals specified in an agreement
entered into with the applicant that states any obligation the
qualified business must fulfill in order to be eligible for tax
benefits. The commissioner may extend for up to one year the
period for meeting any goals provided in an agreement. The
applicant may extend the period for meeting other goals by
documenting in writing the reason for the extension and
attaching a copy of the document to its next annual report to
the commissioner; or
(ii) ceased to operate its facility located within the
biotechnology and health sciences industry zone or otherwise
ceases to be or is not a qualified business.
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Business" means any person who received tax benefits
enumerated in section 469.336.
(c) "Commissioner" means the commissioner of revenue.
Subd. 3. [DISPOSITION OR REPAYMENT.] The repayment must be
paid to the state to the extent it represents a state tax
reduction and to the county to the extent it represents a
property tax reduction. Any amount repaid to the state must be
deposited in the general fund. Any amount repaid to the county
for the property tax exemption must be distributed to the local
governments with authority to levy taxes in the zone in the same
manner provided for distribution of payment of delinquent
property taxes. Any repayment of local sales taxes must be
repaid to the city or county imposing the local sales tax.
Subd. 4. [REPAYMENT PROCEDURES.] (a) For the repayment of
taxes imposed under chapter 290 or 297A or local taxes collected
pursuant to section 297A.99, a business must file an amended
return with the commissioner of revenue and pay any taxes
required to be repaid within 30 days after ceasing to do
business in the zone. The amount required to be repaid is
determined by calculating the tax for the period or periods for
which repayment is required without regard to the exemptions and
credits allowed under section 469.336.
(b) For the repayment of property taxes, the county auditor
shall prepare a tax statement for the business, applying the
applicable tax extension rates for each payable year and provide
a copy to the business. The business must pay the taxes to the
county treasurer within 30 days after receipt of the tax
statement. The taxpayer may appeal the valuation and
determination of the property tax to the tax court within 30
days after receipt of the tax statement.
(c) The provisions of chapters 270 and 289A relating to the
commissioner's authority to audit, assess, and collect the tax
and to hear appeals are applicable to the repayment required
under paragraph (a). The commissioner may impose civil
penalties as provided in chapter 289A, and the additional tax
and penalties are subject to interest at the rate provided in
section 270.75, from 30 days after ceasing to do business in the
biotechnology and health sciences industry zone until the date
the tax is paid.
(d) If a property tax is not repaid under paragraph (b),
the county treasurer shall add the amount required to be repaid
to the property taxes assessed against the property for payment
in the year following the year in which the treasurer discovers
that the business ceased to operate in the biotechnology and
health sciences industry zone.
(e) For determining the tax required to be repaid, a tax
reduction is deemed to have been received on the date that the
tax would have been due if the taxpayer had not been entitled to
the exemption, or on the date a refund was issued for a
refundable credit.
(f) The commissioner may assess the repayment of taxes
under paragraph (c) any time within two years after the business
ceases to operate in the biotechnology and health sciences
industry zone, or within any period of limitations for the
assessment of tax under section 289A.38, whichever period is
later.
Subd. 5. [WAIVER AUTHORITY.] The commissioner may waive
all or part of a repayment, if the commissioner, in consultation
with the commissioner of trade and economic development and
appropriate officials from the local government units in which
the business is located, determines that requiring repayment of
the tax is not in the best interest of the state or the local
government units and the business ceased operating as a result
of circumstances beyond its control including, but not limited
to:
(1) a natural disaster;
(2) unforeseen industry trends; or
(3) loss of a major supplier or customer.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 20. [469.341] [ZONE PERFORMANCE; REMEDIES.]
Subdivision 1. [REPORTING REQUIREMENT.] An applicant
receiving designation of a biotechnology and health sciences
industry zone under section 469.334 must annually report to the
commissioner on its progress in meeting the zone performance
goals under the development plan for the zone and the
applicant's compliance with the business subsidy law under
sections 116J.993 to 116J.995.
Subd. 2. [PROCEDURES.] For reports required by subdivision
1, the commissioner may prescribe:
(1) the required time or times by which the reports must be
filed;
(2) the form of the report; and
(3) the information required to be included in the report.
Subd. 3. [REMEDIES.] If the commissioner determines, based
on a report filed under subdivision 1 or other available
information, that a zone or subzone is failing to meet its
performance goals, the commissioner may take any actions the
commissioner determines appropriate, including modification of
the boundaries of the zone or a subzone or termination of the
zone or a subzone. Before taking any action, the commissioner
shall consult with the applicant and the affected local
government units, including notifying them of the proposed
actions to be taken. The commissioner shall publish any order
modifying a zone in the State Register and on the Internet. The
applicant may appeal the commissioner's order under the
contested case procedures of chapter 14.
Subd. 4. [EXISTING BUSINESSES.] (a) An action to remove
area from a zone or to terminate a zone under this section does
not apply to:
(1) the property tax on improvements constructed before the
first January 2 following publication of the commissioner's
order;
(2) sales tax on purchases made before the first day of the
next calendar month beginning at least 30 days after publication
of the commissioner's order; and
(3) individual income tax or corporate franchise tax
attributable to a facility that was in operation before the
publication of the commissioner's order.
(b) The tax exemptions specified in paragraph (a) terminate
on the date on which the zone expires under the original
designation.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
ARTICLE 3
FEDERAL UPDATE
Section 1. Minnesota Statutes 2002, section 289A.02,
subdivision 7, as amended by Laws 2003, chapter 127, article 4,
section 1, is amended to read:
Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 2002 June
15, 2003.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and is intended to adopt the
provisions of H.R. 2, the Jobs and Growth Tax Relief
Reconciliation Act of 2003, if it is enacted into law.
Sec. 2. Minnesota Statutes 2002, section 290.01,
subdivision 19, as amended by Laws 2003, chapter 127, article 4,
section 2, 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 June 15, 2003, shall be in effect for taxable
years beginning after December 31, 2002. The provisions of
section 201 of the Jobs and Growth Tax Relief and Reconciliation
Act of 2003, H.R. 2, if it is enacted into law, are effective at
the same time it became effective for federal purposes.
Except as otherwise provided, references to the Internal
Revenue Code in subdivisions 19a to 19g mean the code in effect
for purposes of determining net income for the applicable year.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and is intended to adopt the
provisions of H.R. 2, the Jobs and Growth Tax Relief
Reconciliation Act of 2003, if it is enacted into law.
Sec. 3. Minnesota Statutes 2002, section 290.01,
subdivision 31, as amended by Laws 2003, chapter 127, article 4,
section 3, is amended to read:
Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 2002 June
15, 2003.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and is intended to adopt the
provisions of H.R. 2, the Jobs and Growth Tax Relief
Reconciliation Act of 2003, if it is enacted into law.
Sec. 4. Minnesota Statutes 2002, section 290A.03,
subdivision 15, as amended by Laws 2003, chapter 127, article 4,
section 4, is amended to read:
Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code"
means the Internal Revenue Code of 1986, as amended
through December 31, 2002 June 15, 2003.
[EFFECTIVE DATE.] This section is effective for refunds
payable for rents paid in 2003 and thereafter and property taxes
payable in 2004 and thereafter and is intended to adopt the
provisions of H.R. 2, the Jobs and Growth Tax Relief
Reconciliation Act of 2003, if it is enacted into law.
Sec. 5. [EFFECTIVE DATE.]
This article is effective only after the state makes a
certification to the Secretary of the Treasury of the United
States that satisfies the requirements of section 601(e) of the
Jobs and Growth Tax Relief and Reconciliation Act of 2003, H.R.
2. The commissioner of finance shall certify to the
commissioner of revenue when the requirements of this section
have been met.
ARTICLE 4
PROPERTY TAXES
Section 1. Minnesota Statutes 2002, section 272.02,
subdivision 25, is amended to read:
Subd. 25. [ICE ARENAS; BASEBALL PARKS.] (a) Real and
personal property is exempt if it is owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used for an ice arena or ice rink, and used
primarily for youth and high school programs.
(b) Real property is exempt if it is owned and operated by
a private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), and primarily used as a baseball park by amateur
baseball players.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2003, payable in 2004, and thereafter.
Sec. 2. Minnesota Statutes 2002, section 272.02, is
amended by adding a subdivision to read:
Subd. 66. [ELDERLY LIVING FACILITY.] An elderly living
facility is exempt from taxation if it meets all of the
following requirements:
(1) the facility is located in a city of the first class
with a population of more than 350,000;
(2) the facility is owned and operated by a nonprofit
corporation organized under chapter 317A;
(3) the construction of the facility was commenced after
January 1, 2002, and before June 1, 2003;
(4) the facility consists of two buildings, which are
connected to a church that is exempt from taxation under
subdivision 6;
(5) the land for the facility was donated to the nonprofit
corporation by the church to which the facility is connected;
(6) the residents of the facility must be (i) at least 62
years of age or (ii) handicapped;
(7) the facility operates an on-site congregate dining
program in which participation by residents is mandatory, and
provides assisted living or similar social and physical support
services for residents; and
(8) at least 30 percent of the units in the facility are
occupied by persons whose annual income does not exceed 50
percent of median family income for the area.
The property is exempt under this subdivision for taxes
levied in each year or partial year of the term of the
facility's initial permanent financing or 25 years, whichever is
later.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 3. Minnesota Statutes 2002, section 273.11,
subdivision 13, is amended to read:
Subd. 13. [VALUATION OF INCOME-PRODUCING PROPERTY.]
Beginning with the 1995 assessment, only accredited assessors or
senior accredited assessors or other licensed assessors who have
successfully completed at least two income-producing property
appraisal courses may value income-producing property for ad
valorem tax purposes. "Income-producing property" as used in
this subdivision means the taxable property in class 3a and 3b
in section 273.13, subdivision 24; class 4a and 4c, except for
seasonal recreational property not used for commercial purposes,
and class 4d in section 273.13, subdivision 25; and class 5 in
section 273.13, subdivision 31. "Income-producing property"
includes any property in class 4e in section 273.13, subdivision
25, that would be income-producing property under the definition
in this subdivision if it were not substandard.
"Income-producing property appraisal course" as used in this
subdivision means a course of study of approximately 30
instructional hours, with a final comprehensive test. An
assessor must successfully complete the final examination for
each of the two required courses. The course must be approved
by the board of assessors.
[EFFECTIVE DATE.] This section is effective beginning with
the 2004 assessment for property taxes payable in 2005.
Sec. 4. 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;
(2) manufactured homes not classified under any other
provision;
(3) a dwelling, garage, and surrounding one acre of
property on a nonhomestead farm classified under subdivision 23,
paragraph (b) containing two or three units;
(4) unimproved property that is classified residential as
determined under subdivision 33.
The market value of class 4b property has a class rate of
1.5 percent for taxes payable in 2002, and 1.25 percent for
taxes payable in 2003 and thereafter.
(c) Class 4bb includes:
(1) nonhomestead residential real estate containing one
unit, other than seasonal residential, and recreational; and
(2) a single family dwelling, garage, and surrounding one
acre of property on a nonhomestead farm classified under
subdivision 23, paragraph (b).
Class 4bb property has the same class rates as class 1a
property under subdivision 22.
Property that has been classified as seasonal recreational
residential property at any time during which it has been owned
by the current owner or spouse of the current owner does not
qualify for class 4bb.
(d) Class 4c property includes:
(1) except as provided in subdivision 22, paragraph (c),
real property devoted to temporary and seasonal residential
occupancy for recreation purposes, including real property
devoted to temporary and seasonal residential occupancy for
recreation purposes and not devoted to commercial purposes for
more than 250 days in the year preceding the year of
assessment. For purposes of this clause, property is devoted to
a commercial purpose on a specific day if any portion of the
property is used for residential occupancy, and a fee is charged
for residential occupancy. In order for a property to be
classified as class 4c, seasonal recreational residential for
commercial purposes, at least 40 percent of the annual gross
lodging receipts related to the property must be from business
conducted during 90 consecutive days and either (i) at least 60
percent of all paid bookings by lodging guests during the year
must be for periods of at least two consecutive nights; or (ii)
at least 20 percent of the annual gross receipts must be from
charges for rental of fish houses, boats and motors,
snowmobiles, downhill or cross-country ski equipment, or charges
for marina services, launch services, and guide services, or the
sale of bait and fishing tackle. For purposes of this
determination, a paid booking of five or more nights shall be
counted as two bookings. Class 4c also includes commercial use
real property used exclusively for recreational purposes in
conjunction with class 4c property devoted to temporary and
seasonal residential occupancy for recreational purposes, up to
a total of two acres, provided the property is not devoted to
commercial recreational use for more than 250 days in the year
preceding the year of assessment and is located within two miles
of the class 4c property with which it is used. Class 4c
property classified in this clause also includes the remainder
of class 1c resorts provided that the entire property including
that portion of the property classified as class 1c also meets
the requirements for class 4c under this clause; otherwise the
entire property is classified as class 3. Owners of real
property devoted to temporary and seasonal residential occupancy
for recreation purposes and all or a portion of which was
devoted to commercial purposes for not more than 250 days in the
year preceding the year of assessment desiring classification as
class 1c or 4c, must submit a declaration to the assessor
designating the cabins or units occupied for 250 days or less in
the year preceding the year of assessment by January 15 of the
assessment year. Those cabins or units and a proportionate
share of the land on which they are located will be designated
class 1c or 4c as otherwise provided. The remainder of the
cabins or units and a proportionate share of the land on which
they are located will be designated as class 3a. The owner of
property desiring designation as class 1c or 4c property must
provide guest registers or other records demonstrating that the
units for which class 1c or 4c designation is sought were not
occupied for more than 250 days in the year preceding the
assessment if so requested. The portion of a property operated
as a (1) restaurant, (2) bar, (3) gift shop, and (4) other
nonresidential facility operated on a commercial basis not
directly related to temporary and seasonal residential occupancy
for recreation purposes shall not qualify for class 1c or 4c;
(2) qualified property used as a golf course if:
(i) it is open to the public on a daily fee basis. It may
charge membership fees or dues, but a membership fee may not be
required in order to use the property for golfing, and its green
fees for golfing must be comparable to green fees typically
charged by municipal courses; and
(ii) it meets the requirements of section 273.112,
subdivision 3, paragraph (d).
A structure used as a clubhouse, restaurant, or place of
refreshment in conjunction with the golf course is classified as
class 3a property;
(3) real property up to a maximum of one acre of land owned
by a nonprofit community service oriented organization; provided
that the property is not used for a revenue-producing activity
for more than six days in the calendar year preceding the year
of assessment and the property is not used for residential
purposes on either a temporary or permanent basis. For purposes
of this clause, a "nonprofit community service oriented
organization" means any corporation, society, association,
foundation, or institution organized and operated exclusively
for charitable, religious, fraternal, civic, or educational
purposes, and which is exempt from federal income taxation
pursuant to section 501(c)(3), (10), or (19) of the Internal
Revenue Code of 1986, as amended through December 31, 1990. For
purposes of this clause, "revenue-producing activities" shall
include but not be limited to property or that portion of the
property that is used as an on-sale intoxicating liquor or 3.2
percent malt liquor establishment licensed under chapter 340A, a
restaurant open to the public, bowling alley, a retail store,
gambling conducted by organizations licensed under chapter 349,
an insurance business, or office or other space leased or rented
to a lessee who conducts a for-profit enterprise on the
premises. Any portion of the property which is used for
revenue-producing activities for more than six days in the
calendar year preceding the year of assessment shall be assessed
as class 3a. The use of the property for social events open
exclusively to members and their guests for periods of less than
24 hours, when an admission is not charged nor any revenues are
received by the organization shall not be considered a
revenue-producing activity;
(4) post-secondary student housing of not more than one
acre of land that is owned by a nonprofit corporation organized
under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or
housing located within two miles of the border of a college
campus;
(5) manufactured home parks as defined in section 327.14,
subdivision 3;
(6) real property that is actively and exclusively devoted
to indoor fitness, health, social, recreational, and related
uses, is owned and operated by a not-for-profit corporation, and
is located within the metropolitan area as defined in section
473.121, subdivision 2;
(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 beginning with
the 2004 assessment, for property taxes payable in 2005.
Sec. 5. 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
recreational property, as defined in this section. The state
general levy is $592,000,000 for taxes payable in 2002. For
taxes payable in subsequent years, the levy is increased each
year by multiplying the amount for the prior year by the sum of
one plus the rate of increase, if any, in the implicit price
deflator for government consumption expenditures and gross
investment for state and local governments prepared by the
Bureau of Economic Analysts of the United States Department of
Commerce for the 12-month period ending March 31 of the year
prior to the year the taxes are payable. The tax under this
section is not treated as a local tax rate under section 469.177
and is not the levy of a governmental unit under chapters 276A
and 473F. Beginning in fiscal year 2004, and in each year
thereafter, the commissioner of finance shall deposit in an
education reserve account, which account is hereby established,
the increased amount of the state general levy received for
deposit in the general fund for that year over the amount of the
state general levy received for deposit in the general fund in
fiscal year 2003. The amounts in the education reserve account
do not lapse or cancel each year, but remain until appropriated
by law for education aid or higher education funding.
The commissioner shall increase or decrease the preliminary
or final rate for a year as necessary to account for errors and
tax base changes that affected a preliminary or final rate for
either of the two preceding years. Adjustments are allowed to
the extent that the necessary information is available to the
commissioner at the time the rates for a year must be certified,
and for the following reasons:
(1) an erroneous report of taxable value by a local
official;
(2) an erroneous calculation by the commissioner; and
(3) an increase or decrease in taxable value for
commercial-industrial or seasonal residential recreational
property reported on the abstracts of tax lists submitted under
section 275.29 that was not reported on the abstracts of
assessment submitted under section 270.11, subdivision 2, for
the same year.
The commissioner may, but need not, make adjustments if the
total difference in the tax levied for the year would be less
than $100,000.
[EFFECTIVE DATE.] This section is effective June 30, 2003.
Sec. 6. Minnesota Statutes 2002, section 275.065,
subdivision 3, is amended to read:
Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The
county auditor shall prepare and the county treasurer shall
deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed
on the county's current year's assessment roll, a notice of
proposed property taxes.
(b) The commissioner of revenue shall prescribe the form of
the notice.
(c) The notice must inform taxpayers that it contains the
amount of property taxes each taxing authority proposes to
collect for taxes payable the following year. In the case of a
town, or in the case of the state general tax, the final tax
amount will be its proposed tax. In the case of taxing
authorities required to hold a public meeting under subdivision
6, the notice must clearly state that each taxing authority,
including regional library districts established under section
134.201, and including the metropolitan taxing districts as
defined in paragraph (i), but excluding all other special taxing
districts and towns, will hold a public meeting to receive
public testimony on the proposed budget and proposed or final
property tax levy, or, in case of a school district, on the
current budget and proposed property tax levy. It must clearly
state the time and place of each taxing authority's meeting, a
telephone number for the taxing authority that taxpayers may
call if they have questions related to the notice, and an
address where comments will be received by mail.
(d) The notice must state for each parcel:
(1) the market value of the property as determined under
section 273.11, and used for computing property taxes payable in
the following year and for taxes payable in the current year as
each appears in the records of the county assessor on November 1
of the current year; and, in the case of residential property,
whether the property is classified as homestead or
nonhomestead. The notice must clearly inform taxpayers of the
years to which the market values apply and that the values are
final values;
(2) the items listed below, shown separately by county,
city or town, and state general tax, net of the residential and
agricultural homestead credit under section 273.1384, voter
approved school levy, other local school levy, and the sum of
the special taxing districts, and as a total of all taxing
authorities:
(i) the actual tax for taxes payable in the current year;
(ii) the tax change due to spending factors, defined as the
proposed tax minus the constant spending tax amount;
(iii) the tax change due to other factors, defined as the
constant spending tax amount minus the actual current year tax;
and
(iv) (ii) the proposed tax amount.
If the county levy under clause (2) includes an amount for
a lake improvement district as defined under sections 103B.501
to 103B.581, the amount attributable for that purpose must be
separately stated from the remaining county levy amount.
In the case of a town or the state general tax, the final
tax shall also be its proposed tax unless the town changes its
levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision
9, that a referendum will be held in the school district at the
November general election, the county auditor must note next to
the school district's proposed amount that a referendum is
pending and that, if approved by the voters, the tax amount may
be higher than shown on the notice. In the case of the city of
Minneapolis, the levy for the Minneapolis library board and the
levy for Minneapolis park and recreation shall be listed
separately from the remaining amount of the city's levy. In the
case of the city of St. Paul, the levy for the St. Paul library
agency must be listed separately from the remaining amount of
the city's levy. In the case of a parcel where tax increment or
the fiscal disparities areawide tax under chapter 276A or 473F
applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide
tax must each be stated separately and not included in the sum
of the special taxing districts; and
(3) the increase or decrease between the total taxes
payable in the current year and the total proposed taxes,
expressed as a percentage.
For purposes of this section, the amount of the tax on
homesteads qualifying under the senior citizens' property tax
deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax
amount.
(e) The notice must clearly state that the proposed or
final taxes do not include the following:
(1) special assessments;
(2) levies approved by the voters after the date the
proposed taxes are certified, including bond referenda, and
school district levy referenda, and;
(3) a levy limit increase referenda approved by the voters
by the first Tuesday after the first Monday in November of the
levy year as provided under section 275.73;
(3) (4) amounts necessary to pay cleanup or other costs due
to a natural disaster occurring after the date the proposed
taxes are certified;
(4) (5) amounts necessary to pay tort judgments against the
taxing authority that become final after the date the proposed
taxes are certified; and
(5) (6) the contamination tax imposed on properties which
received market value reductions for contamination.
(f) Except as provided in subdivision 7, failure of the
county auditor to prepare or the county treasurer to deliver the
notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the
tax levy.
(g) If the notice the taxpayer receives under this section
lists the property as nonhomestead, and satisfactory
documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the
homestead classification in that assessment year, the assessor
shall reclassify the property to homestead for taxes payable in
the following year.
(h) In the case of class 4 residential property used as a
residence for lease or rental periods of 30 days or more, the
taxpayer must either:
(1) mail or deliver a copy of the notice of proposed
property taxes to each tenant, renter, or lessee; or
(2) post a copy of the notice in a conspicuous place on the
premises of the property.
The notice must be mailed or posted by the taxpayer by
November 27 or within three days of receipt of the notice,
whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of
the premises to which the notice must be mailed in order to
fulfill the requirements of this paragraph.
(i) For purposes of this subdivision, subdivisions 5a and
6, "metropolitan special taxing districts" means the following
taxing districts in the seven-county metropolitan area that levy
a property tax for any of the specified purposes listed below:
(1) metropolitan council under section 473.132, 473.167,
473.249, 473.325, 473.446, 473.521, 473.547, or 473.834;
(2) metropolitan airports commission under section 473.667,
473.671, or 473.672; and
(3) metropolitan mosquito control commission under section
473.711.
For purposes of this section, any levies made by the
regional rail authorities in the county of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy and
shall be discussed at that county's public hearing.
(j) If a statutory or home rule charter city or a town has
exercised the local levy option provided by section 473.388,
subdivision 7, it may include in the notice of its proposed
taxes the amount of its proposed taxes attributable to its
exercise of the option. In the first year of the city or town's
exercise of this option, the statement shall include an estimate
of the reduction of the metropolitan council's tax on the parcel
due to exercise of that option. The metropolitan council's levy
shall be adjusted accordingly.
[EFFECTIVE DATE.] This section is effective for notices
prepared in 2003 for taxes payable in 2004, and thereafter.
Sec. 7. Minnesota Statutes 2002, section 275.066, is
amended to read:
275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.]
For the purposes of property taxation and property tax
state aids, the term "special taxing districts" includes the
following entities:
(1) watershed districts under chapter 103D;
(2) sanitary districts under sections 115.18 to 115.37;
(3) regional sanitary sewer districts under sections 115.61
to 115.67;
(4) regional public library districts under section
134.201;
(5) park districts under chapter 398;
(6) regional railroad authorities under chapter 398A;
(7) hospital districts under sections 447.31 to 447.38;
(8) St. Cloud metropolitan transit commission under
sections 458A.01 to 458A.15;
(9) Duluth transit authority under sections 458A.21 to
458A.37;
(10) regional development commissions under sections
462.381 to 462.398;
(11) housing and redevelopment authorities under sections
469.001 to 469.047;
(12) port authorities under sections 469.048 to 469.068;
(13) economic development authorities under sections
469.090 to 469.1081;
(14) metropolitan council under sections 473.123 to
473.549;
(15) metropolitan airports commission under sections
473.601 to 473.680;
(16) metropolitan mosquito control commission under
sections 473.701 to 473.716;
(17) Morrison county rural development financing authority
under Laws 1982, chapter 437, section 1;
(18) Croft Historical Park District under Laws 1984,
chapter 502, article 13, section 6;
(19) East Lake county medical clinic district under Laws
1989, chapter 211, sections 1 to 6;
(20) Floodwood area ambulance district under Laws 1993,
chapter 375, article 5, section 39;
(21) Middle Mississippi river watershed management
organization under sections 103B.211 and 103B.241;
(22) emergency medical services special taxing districts
under section 144F.01;
(23) a county levying under the authority of section
103B.241, 103B.245, or 103B.251; and
(24) Southern St. Louis County Special Taxing District;
Chris Jensen Nursing Home under section 12; and
(25) any other political subdivision of the state of
Minnesota, excluding counties, school districts, cities, and
towns, that has the power to adopt and certify a property tax
levy to the county auditor, as determined by the commissioner of
revenue.
Sec. 8. Minnesota Statutes 2002, section 473.167,
subdivision 3, is amended to read:
Subd. 3. [TAX.] The council may levy a tax on all taxable
property in the metropolitan area, as defined in section
473.121, to provide funds for loans made pursuant to
subdivisions 2 and 2a. This tax for the right-of-way
acquisition loan fund shall be certified by the council, levied,
and collected in the manner provided by section 473.13. The tax
shall be in addition to that authorized by section 473.249 and
any other law and shall not affect the amount or rate of taxes
which may be levied by the council or any metropolitan agency or
local governmental unit. The amount of the levy shall be as
determined and certified by the council, provided that the tax
levied by the metropolitan council for the right-of-way
acquisition loan fund shall not exceed the product of (1) the
metropolitan council's property tax levy under this subdivision
for taxes payable in 1997 multiplied by (2) an index for market
valuation changes equal to the total market valuation of all
taxable property located within the metropolitan area for the
current taxes payable year divided by the total market valuation
of all taxable property located within the metropolitan area for
taxes payable in 1997.
For the purpose of determining the metropolitan council's
property tax levy limitation for the right-of-way acquisition
loan fund, "total market valuation" means the total market
valuation of all taxable property within the metropolitan area
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) $2,828,379
for taxes payable in 2004 and $2,828,379 for taxes payable in
2005. The amount of the levy for taxes payable in 2006 and
subsequent years shall not exceed the product of (1) the
metropolitan council's property tax levy limitation under this
subdivision for the previous year, multiplied by (2) one plus a
percentage equal to the growth in the implicit price deflator as
defined in section 275.70, subdivision 2.
[EFFECTIVE DATE; APPLICATION.] This section is effective
the day following final enactment and applies in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 9. Minnesota Statutes 2002, section 473.249,
subdivision 1, is amended to read:
Subdivision 1. [INDEXED LIMIT.] (a) The metropolitan
council may levy a tax on all taxable property in the
metropolitan area defined in section 473.121 to provide funds
for the purposes of sections 473.121 to 473.249 and for the
purpose of carrying out other responsibilities of the council as
provided by law. This tax for general purposes shall be levied
and collected in the manner provided by section 473.13.
(b) The property tax levied by the metropolitan council for
general purposes shall not exceed $10,522,329 for taxes payable
in 2004 and $10,522,329 for taxes payable in 2005.
(c) The property tax levy limitation for general purposes
for taxes payable in 2006 and subsequent years shall not exceed
the product of: (1) the metropolitan council's property tax
levy limitation for general purposes for the previous year
determined under this subdivision multiplied by (2) the lesser
of
(i) an index for market valuation changes equal to the
total market valuation of all taxable property located within
the metropolitan area for the current taxes payable year divided
by the total market valuation of all taxable property located
within the metropolitan area for the previous taxes payable
year;
(ii) an index equal to the implicit price deflator for
government consumption expenditures and gross investment for
state and local governments for the most recent month for which
data are available divided by the same implicit price deflator
for the same month of the previous year; or
(iii) 103 percent.
(c) For the purpose of determining the metropolitan
council's property tax levy limitation for general purposes,
"total market valuation" means the total market valuation of all
taxable property within the metropolitan area 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) one plus a percentage equal
to the growth in the implicit price deflator as defined in
section 275.70, subdivision 2.
[EFFECTIVE DATE; APPLICATION.] This section is effective
the day following final enactment and applies in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 10. Minnesota Statutes 2002, section 473.253,
subdivision 1, is amended to read:
Subdivision 1. [SOURCES OF FUNDS.] The council shall
credit to the livable communities demonstration account the
revenues provided in this subdivision. This tax shall be levied
and collected in the manner provided by section 473.13. The
levy shall not exceed the following amount for the years
specified:
(a)(1) for taxes payable in 1996, 50 percent of (i) the
metropolitan mosquito control commission's property tax levy 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 metropolitan area for the
current taxes payable year divided by the total market valuation
of all taxable property located in the metropolitan area for the
previous taxes payable year; and
(2) for taxes payable in 1997 and subsequent years through
2003, the product of (i) the property tax levy limit under this
subdivision for the previous year multiplied by (ii) an index
for market valuation changes equal to the total market valuation
of all taxable property located within the metropolitan area for
the current taxes payable year divided by the total market
valuation of all taxable property located in the metropolitan
area for the previous taxes payable year;
(2) for taxes payable in 2004 and 2005, $8,259,070; and
(3) for taxes payable in 2006 and subsequent years, the
product of (i) the property tax levy limit under this
subdivision for the previous year multiplied by (ii) one plus a
percentage equal to the growth in the implicit price deflator as
defined in section 275.70, subdivision 2.
For the purposes of this subdivision, "total market
valuation" means the total market valuation of all taxable
property within the metropolitan area without valuation
adjustments for fiscal disparities under chapter 473F, tax
increment financing under sections 469.174 to 469.179, and high
voltage transmission lines under section 273.425.
(b) The metropolitan council, for the purposes of the fund,
is considered a unique taxing jurisdiction for purposes of
receiving aid pursuant to section 273.1398. For aid to be
received in 1996, the fund's homestead and agricultural credit
base shall equal 50 percent of the metropolitan mosquito control
commission's certified homestead and agricultural credit aid for
1995, determined under section 273.1398, subdivision 2, less any
permanent aid reduction under section 477A.0132. For aid to be
received under section 273.1398 in 1997 and subsequent years,
the fund's homestead and agricultural credit base shall be
determined in accordance with section 273.1398, subdivision 1.
[EFFECTIVE DATE; APPLICATION.] This section is effective
the day following final enactment and applies in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 11. 2003 First Special Session H.F. No. 1, article 2,
section 118, subdivision 6, if enacted, is amended to read:
Subd. 6. [OPERATING COSTS OF PHASES THREE TO SIX.] (a) The
ongoing costs of the commissioner in operating phases three to
six of the statewide public safety radio communication system
shall be allocated among and paid by the following users, all in
accordance with the statewide public safety radio communication
system plan developed by the planning committee under section
473.907:
(1) the state of Minnesota for its operations using the
system;
(2) all local government units using the system; and
(3) other eligible users of the system.
(b) Each local government and other eligible users of
phases three to six of the system shall pay to the commissioner
all sums charged under this section, at the times and in the
manner determined by the commissioner. The governing body of
each local government shall take all action that may be
necessary to provide the funds required for these payments and
to make the payments when due.
(c) If the governing body of any local government using
phase three, four, five, or six of the system fails to meet any
payment to the commissioner under this subdivision when due, the
commissioner may certify to the auditor of the county in which
the government unit is located the amount required for payment
of the amount due with interest at six percent per year. The
auditor shall levy and extend the amount due, with interest, as
a tax upon all taxable property in the government unit for the
next calendar year, free from any existing limitations imposed
by law or charter. This tax shall be collected in the same
manner as the general taxes of the government unit, and the
proceeds of the tax, when collected, shall be paid by the county
treasurer to the commissioner and credited to the government
unit for which the tax was levied.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 12. [SOUTHERN ST. LOUIS COUNTY SPECIAL TAXING
DISTRICT; CHRIS JENSEN NURSING HOME.]
Subdivision 1. [ESTABLISHED.] The Southern St. Louis
County Special Taxing District for purposes of the Chris Jensen
Nursing Home is established.
Subd. 2. [AREA.] The district in subdivision 1 includes
all that part of St. Louis county comprising the cities of
Duluth, Proctor, Hermantown, Brookston, Floodwood, and
Meadowlands, and the townships of Alborn, Alden, Arrowhead,
Brevator, Canosia, Culver, Duluth, Elmer, Fine Lakes, Floodwood,
Fredenberg, Gensen, Grand Lake, Halden, Industrial, Lakewood,
Meadowlands, Midway, Ness, New Independence, Normanna,
Northland, North Star, Pequaywan, Prairie Lake, Rice Lake,
Solway, Stoney Brook, and Van Buren, and unorganized
congressional townships of 52-21, 53-16, and 53-15.
Subd. 3. [PURPOSE.] The district established in
subdivision 1 is established to operate, maintain, and improve
the Chris Jensen Nursing Home.
Subd. 4. [LEVY AUTHORITY.] The district established under
subdivision 1 is a public corporation and political subdivision
of the state with all the powers, rights, privileges,
immunities, and duties that may be validly granted to or imposed
on a municipal corporation as provided in this section, 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 annual levy for this special taxing district must not
exceed 1.90 percent of the taxable tax capacity of the district
in the first year and 1.33 percent of the taxable tax capacity
of the district in the second year and thereafter.
Subd. 5. [MEMBERS; SELECTION; TERMS.] The nursing home
board is composed of nine members selected as follows:
(1) The mayor of the city of Duluth shall appoint three
members, subject to approval of the Duluth city council. Each
member appointed under this clause must live in the city of
Duluth and at least two must be Duluth city council members.
All three appointees serve at the pleasure of the mayor, except
that each member shall serve until a successor has been selected
and qualified.
(2) The St. Louis county board shall appoint three county
board members. Two appointees must reside in the city of Duluth
and one must reside in the district but outside the city of
Duluth. The members appointed under this clause serve at the
pleasure of the county board, except that each member shall
serve until a successor has been selected and qualified.
(3) The St. Louis county auditor must convene and preside
at a meeting of the mayors of the cities of Hermantown and
Proctor at which the mayors must appoint a city council member
from one of the two cities to serve on the nursing home board.
The member appointed under this clause serves at the pleasure of
each mayor and either mayor may require the member's resignation
at any time, except that the member shall serve until a
successor has been selected and qualified.
(4) The St. Louis county auditor must convene and preside
at a meeting of the chairs of the town board of supervisors from
each of the townships of Rice Lake, Grand Lake, Lakewood, and
Canosia at which the chairs must appoint a resident of one of
the townships to serve on the nursing home board. The term of
the first person appointed after the effective date of this
section shall expire December 31 of the third full year
following appointment. Thereafter, the term of the person
appointed under this clause is three years, except that the
member shall serve until a successor has been selected and
qualified.
(5) The St. Louis county auditor must convene and preside
at a meeting of the mayors of the cities of Brookston,
Floodwood, and Meadowlands, and the chairs of the town boards of
supervisors from all of the townships in the district not
included in clause (4), at which the mayors and town board
chairs must appoint a resident of one of the cities, townships,
or unorganized areas to serve on the nursing home board. The
term of the first person appointed after the effective date of
this section shall expire December 31 of the third full year
following appointment. Thereafter, the term of the person
appointed under this clause is three years, except that the
member shall serve until a successor has been selected and
qualified.
After the initial appointment of members under clauses (3)
to (5), the nursing home board must notify the St. Louis county
auditor whenever a member needs to be appointed under these
clauses, and the county auditor must convene one or more
meetings as necessary to fill the position. Meetings to make
appointments under clauses (3) to (5) are subject to the Open
Meeting Law, Minnesota Statutes, chapter 13D.
Subd. 6. [TIME LIMITS FOR SELECTION; ALTERNATIVE
APPOINTMENT BY DISTRICT JUDGE.] The appointing authorities must
make initial appointments to the nursing home board as soon as
practicable, but no later than 60 days after the effective date
of this section. A vacant position on the nursing home board
for which the member serves at the pleasure of the appointing
authority, must be filled as soon as practicable, but no later
than 60 days, after the vacancy occurs. For members who serve
terms, a successor must be appointed at any time within 60 days
before the expiration of the term. Each appointment for a
successor must be made in the same manner as the original
appointment. If any appointment is not made within the time
required, the chief judge of the state's sixth judicial district
shall appoint a person who meets the qualifications for
appointment to the particular nursing home board seat, if
notified in writing by any interested person residing in the
district. A person appointed by the chief judge serves as if
appointed by the regular appointing authority.
Subd. 7. [VACANCIES.] A position must be deemed vacant
under the conditions specified in Minnesota Statutes, section
351.02, or if the member fails to attend two consecutive regular
meetings of the board without the consent of the board. The
board may consent to a second consecutive absence up to 30 days
after it occurs. A vacancy must be filled in the same manner as
the original appointment.
Subd. 8. [OPEN MEETING LAW.] All meetings of the nursing
home board are subject to the Open Meeting Law, Minnesota
Statutes, chapter 13D.
Subd. 9. [PROPERTY.] All assets, liabilities, employees,
and property of the Chris Jensen Nursing Home shall be
transferred to the nursing home board from St. Louis county on
the first day of the year after the formation of the nursing
home board, but no later than January 1, 2005.
Subd. 10. [ORGANIZATION AND OPERATION OF THE BOARD.] The
nursing home board shall elect officers and establish bylaws at
its first meeting.
Subd. 11. [EFFECTIVE DATE; LOCAL APPROVAL.] This section
is effective the day after the governing body of St. Louis
county and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
If effective before September 1, 2003, the first levy is
the payable 2004 levy; if effective between September 1, 2003,
and September 1, 2004, the first levy is the payable 2005 levy;
if effective after August 31, 2004, the first levy is the
payable 2006 levy.
Sec. 13. [REPEALER.]
(a) Minnesota Statutes 2002, section 272.02, subdivision
26, is repealed.
(b) Minnesota Statutes 2002, section 275.065, subdivision
3a, is repealed.
[EFFECTIVE DATE.] Paragraph (a) is effective for the 2003
assessment and thereafter, for taxes payable in 2004 and
thereafter. Paragraph (b) is repealed beginning with proposed
notices prepared in 2003 for taxes payable in 2004.
ARTICLE 5
CITY AIDS
Section 1. Minnesota Statutes 2002, section 4A.02, is
amended to read:
4A.02 [STATE DEMOGRAPHER.]
(a) The director shall appoint a state demographer. The
demographer must be professionally competent in demography and
must possess demonstrated ability based upon past performance.
(b) The demographer shall:
(1) continuously gather and develop demographic data
relevant to the state;
(2) design and test methods of research and data
collection;
(3) periodically prepare population projections for the
state and designated regions and periodically prepare
projections for each county or other political subdivision of
the state as necessary to carry out the purposes of this
section;
(4) review, comment on, and prepare analysis of population
estimates and projections made by state agencies, political
subdivisions, other states, federal agencies, or nongovernmental
persons, institutions, or commissions;
(5) serve as the state liaison with the United States
Bureau of the Census, coordinate state and federal demographic
activities to the fullest extent possible, and aid the
legislature in preparing a census data plan and form for each
decennial census;
(6) compile an annual study of population estimates on the
basis of county, regional, or other political or geographical
subdivisions as necessary to carry out the purposes of this
section and section 4A.03;
(7) by January 1 of each year, issue a report to the
legislature containing an analysis of the demographic
implications of the annual population study and population
projections;
(8) prepare maps for all counties in the state, all
municipalities with a population of 10,000 or more, and other
municipalities as needed for census purposes, according to scale
and detail recommended by the United States Bureau of the
Census, with the maps of cities showing precinct boundaries;
(9) prepare an estimate of population and of the number of
households for each governmental subdivision for which the
metropolitan council does not prepare an annual estimate, and
convey the estimates to the governing body of each political
subdivision by May 1 of each year;
(10) direct, under section 414.01, subdivision 14, and
certify population and household estimates of annexed or
detached areas of municipalities or towns after being notified
of the order or letter of approval by the Minnesota municipal
board; and
(11) prepare, for any purpose for which a population
estimate is required by law or needed to implement a law, a
population estimate of a municipality or town whose population
is affected by action under section 379.02 or 414.01,
subdivision 14; and
(12) prepare an estimate of average household size for each
statutory or home rule charter city with a population of 2,500
or more by May 1 of each year.
(c) A governing body may challenge an estimate made under
paragraph (b) by filing their specific objections in writing
with the state demographer by June 10. If the challenge does
not result in an acceptable estimate by June 24, the governing
body may have a special census conducted by the United States
Bureau of the Census. The political subdivision must notify the
state demographer by July 1 of its intent to have the special
census conducted. The political subdivision must bear all costs
of the special census. Results of the special census must be
received by the state demographer by the next April 15 to be
used in that year's May 1 estimate to the political subdivision
under paragraph (b).
[EFFECTIVE DATE.] This section is effective beginning July
1, 2003.
Sec. 2. Minnesota Statutes 2002, section 477A.011,
subdivision 34, is amended to read:
Subd. 34. [CITY REVENUE NEED.] (a) For a city with a
population equal to or greater than 2,500, "city revenue need"
is the sum of (1) 3.462312 5.0734098 times the pre-1940 housing
percentage; plus (2) 2.093826 times the commercial industrial
percentage; plus (3) 6.862552 19.141678 times the population
decline percentage; plus (4) .00026 times the city
population (3) 2504.06334 times the road accidents factor;
plus (5) 152.0141 (4) 355.0547; minus (5) the metropolitan area
factor; minus (6) 49.10638 times the household size.
(b) For a city with a population less than 2,500, "city
revenue need" is the sum of (1) 1.795919 2.387 times the
pre-1940 housing percentage; plus (2) 1.562138 2.67591 times the
commercial industrial percentage; plus (3) 4.177568 3.16042
times the population decline percentage; plus (4) 1.04013 1.206
times the transformed population; minus (5) 107.475 62.772.
(c) The city revenue need cannot be less than zero.
(d) For calendar year 1998 2005 and subsequent years, the
city revenue need for a city, as determined in paragraphs (a) to
(c), is multiplied by the ratio of the annual implicit price
deflator for government consumption expenditures and gross
investment for state and local governments as prepared by the
United States Department of Commerce, for the most recently
available year to the 1993 2003 implicit price deflator for
state and local government purchases.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 3. Minnesota Statutes 2002, section 477A.011,
subdivision 36, is amended to read:
Subd. 36. [CITY AID BASE.] (a) Except as otherwise
provided in this subdivision, "city aid base" means, for each
city, the sum of the local government aid and equalization aid
it was originally certified to receive in calendar year 1993
under Minnesota Statutes 1992, section 477A.013, subdivisions 3
and 5, and the amount of disparity reduction aid it received in
calendar year 1993 under Minnesota Statutes 1992, section
273.1398, subdivision 3 is zero.
(b) For aids payable in 1996 and thereafter, a city that in
1992 or 1993 transferred an amount from governmental funds to
its sewer and water fund, which amount exceeded its net levy for
taxes payable in the year in which the transfer occurred, has a
"city aid base" equal to the sum of (i) its city aid base, as
calculated under paragraph (a), and (ii) one-half of the
difference between its city aid distribution under section
477A.013, subdivision 9, for aids payable in 1995 and its city
aid base for aids payable in 1995.
(c) The city aid base for any city with a population less
than 500 is increased by $40,000 for aids payable in calendar
year 1995 and thereafter, and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $40,000 for aids payable in calendar
year 1995 only, provided that:
(i) the average total tax capacity rate for taxes payable
in 1995 exceeds 200 percent;
(ii) the city portion of the tax capacity rate exceeds 100
percent; and
(iii) its city aid base is less than $60 per capita.
(d) (c) The city aid base for a city is increased by
$20,000 in 1998 and thereafter and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $20,000 in calendar year
1998 only, provided that:
(i) the city has a population in 1994 of 2,500 or more;
(ii) the city is located in a county, outside of the
metropolitan area, which contains a city of the first class;
(iii) the city's net tax capacity used in calculating its
1996 aid under section 477A.013 is less than $400 per capita;
and
(iv) at least four percent of the total net tax capacity,
for taxes payable in 1996, of property located in the city is
classified as railroad property.
(e) (d) The city aid base for a city is increased by
$200,000 in 1999 and thereafter and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year
1999 only, provided that:
(i) the city was incorporated as a statutory city after
December 1, 1993;
(ii) its city aid base does not exceed $5,600; and
(iii) the city had a population in 1996 of 5,000 or more.
(f) (e) The city aid base for a city is increased by
$450,000 in 1999 to 2008 and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $450,000 in calendar year 1999 only,
provided that:
(i) the city had a population in 1996 of at least 50,000;
(ii) its population had increased by at least 40 percent in
the ten-year period ending in 1996; and
(iii) its city's net tax capacity for aids payable in 1998
is less than $700 per capita.
(g) (f) Beginning in 2004, the city aid base for a city is
equal to the sum of its city aid base in 2003 and the amount of
additional aid it was certified to receive under section 477A.06
in 2003. For 2004 only, the maximum amount of total aid a city
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by the amount it was certified to receive
under section 477A.06 in 2003.
(h) (g) The city aid base for a city is increased by
$150,000 for aids payable in 2000 and thereafter, and the
maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (c), is also increased by
$150,000 in calendar year 2000 only, provided that:
(1) the city has a population that is greater than 1,000
and less than 2,500;
(2) its commercial and industrial percentage for aids
payable in 1999 is greater than 45 percent; and
(3) the total market value of all commercial and industrial
property in the city for assessment year 1999 is at least 15
percent less than the total market value of all commercial and
industrial property in the city for assessment year 1998.
(i) (h) The city aid base for a city is increased by
$200,000 in 2000 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year
2000 only, provided that:
(1) the city had a population in 1997 of 2,500 or more;
(2) the net tax capacity of the city used in calculating
its 1999 aid under section 477A.013 is less than $650 per
capita;
(3) the pre-1940 housing percentage of the city used in
calculating 1999 aid under section 477A.013 is greater than 12
percent;
(4) the 1999 local government aid of the city under section
477A.013 is less than 20 percent of the amount that the formula
aid of the city would have been if the need increase percentage
was 100 percent; and
(5) the city aid base of the city used in calculating aid
under section 477A.013 is less than $7 per capita.
(j) The city aid base for a city is increased by $225,000
in calendar years 2000 to 2002 and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $225,000 in calendar year
2000 only, provided that:
(1) the city had a population of at least 5,000;
(2) its population had increased by at least 50 percent in
the ten-year period ending in 1997;
(3) the city is located outside of the Minneapolis-St. Paul
metropolitan statistical area as defined by the United States
Bureau of the Census; and
(4) the city received less than $30 per capita in aid under
section 477A.013, subdivision 9, for aids payable in 1999.
(k) (i) The city aid base for a city is increased by
$102,000 in 2000 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $102,000 in calendar year
2000 only, provided that:
(1) the city has a population in 1997 of 2,000 or more;
(2) the net tax capacity of the city used in calculating
its 1999 aid under section 477A.013 is less than $455 per
capita;
(3) the net levy of the city used in calculating 1999 aid
under section 477A.013 is greater than $195 per capita; and
(4) the 1999 local government aid of the city under section
477A.013 is less than 38 percent of the amount that the formula
aid of the city would have been if the need increase percentage
was 100 percent.
(l) (j) The city aid base for a city is increased by
$32,000 in 2001 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $32,000 in calendar year
2001 only, provided that:
(1) the city has a population in 1998 that is greater than
200 but less than 500;
(2) the city's revenue need used in calculating aids
payable in 2000 was greater than $200 per capita;
(3) the city net tax capacity for the city used in
calculating aids available in 2000 was equal to or less than
$200 per capita;
(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $65 per capita; and
(5) the city's formula aid for aids payable in 2000 was
greater than zero.
(m) (k) The city aid base for a city is increased by $7,200
in 2001 and thereafter, and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $7,200 in calendar year 2001 only,
provided that:
(1) the city had a population in 1998 that is greater than
200 but less than 500;
(2) the city's commercial industrial percentage used in
calculating aids payable in 2000 was less than ten percent;
(3) more than 25 percent of the city's population was 60
years old or older according to the 1990 census;
(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $15 per capita; and
(5) the city's formula aid for aids payable in 2000 was
greater than zero.
(n) (l) The city aid base for a city is increased by
$45,000 in 2001 and thereafter and by an additional $50,000 in
calendar years 2002 to 2011, and the maximum amount of total aid
it may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $45,000 in calendar year 2001 only,
and by $50,000 in calendar year 2002 only, provided that:
(1) the net tax capacity of the city used in calculating
its 2000 aid under section 477A.013 is less than $810 per
capita;
(2) the population of the city declined more than two
percent between 1988 and 1998;
(3) the net levy of the city used in calculating 2000 aid
under section 477A.013 is greater than $240 per capita; and
(4) the city received less than $36 per capita in aid under
section 477A.013, subdivision 9, for aids payable in 2000.
(o) (m) The city aid base for a city with a population of
10,000 or more which is located outside of the seven-county
metropolitan area is increased in 2002 and thereafter, and the
maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (b) or (c), is also increased
in calendar year 2002 only, by an amount equal to the lesser of:
(1)(i) the total population of the city, as determined by
the United States Bureau of the Census, in the 2000 census, (ii)
minus 5,000, (iii) times 60; or
(2) $2,500,000.
(p) (n) The city aid base is increased by $50,000 in 2002
and thereafter, and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $50,000 in calendar year 2002 only, provided
that:
(1) the city is located in the seven-county metropolitan
area;
(2) its population in 2000 is between 10,000 and 20,000;
and
(3) its commercial industrial percentage, as calculated for
city aid payable in 2001, was greater than 25 percent.
(q) (o) The city aid base for a city is increased by
$150,000 in calendar years 2002 to 2011 and the maximum amount
of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $150,000 in calendar year
2002 only, provided that:
(1) the city had a population of at least 3,000 but no more
than 4,000 in 1999;
(2) its home county is located within the seven-county
metropolitan area;
(3) its pre-1940 housing percentage is less than 15
percent; and
(4) its city net tax capacity per capita for taxes payable
in 2000 is less than $900 per capita.
(r) (p) The city aid base for a city is increased by
$200,000 beginning in calendar year 2003 and the maximum amount
of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $200,000 in calendar year
2003 only, provided that the city qualified for an increase in
homestead and agricultural credit aid under Laws 1995, chapter
264, article 8, section 18.
(q) The city aid base for a city is increased by $200,000
in 2004 only and the maximum amount of total aid it may receive
under section 477A.013, subdivision 9, is also increased by
$200,000 in calendar year 2004 only, if the city is the site of
a nuclear dry cask storage facility.
(r) The city aid base for a city is increased by $10,000 in
2004 and thereafter and the maximum total aid it may receive
under section 477A.013, subdivision 9, is also increased by
$10,000 in calendar year 2004 only, if the city was included in
a federal major disaster designation issued on April 1, 1998 and
its pre-1940 housing stock was decreased by more than 40 percent
between 1990 and 2000.
[EFFECTIVE DATE.] This section is effective beginning with
aids payable in 2004.
Sec. 4. Minnesota Statutes 2002, section 477A.011, is
amended by adding a subdivision to read:
Subd. 38. [HOUSEHOLD SIZE.] "Household size" means the
average number of persons per household in the jurisdiction as
most recently estimated and reported by the state demographer as
of July 1 of the aid calculation year.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 5. Minnesota Statutes 2002, section 477A.011, is
amended by adding a subdivision to read:
Subd. 39. [ROAD ACCIDENTS FACTOR.] "Road accidents factor"
means the average annual number of vehicular accidents occurring
on public roads, streets, and alleys in the jurisdiction as
reported to the commissioner of revenue by the commissioner of
public safety by July 1 of the aid calculation year using the
most recent three-year period for which the commissioner of
public safety has complete information, divided by the
jurisdiction's population.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 6. Minnesota Statutes 2002, section 477A.011, is
amended by adding a subdivision to read:
Subd. 40. [METROPOLITAN AREA FACTOR.] "Metropolitan area
factor" means 35.20915 for cities located in the metropolitan
area.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 7. Minnesota Statutes 2002, section 477A.013,
subdivision 8, is amended to read:
Subd. 8. [CITY FORMULA AID.] In calendar year 1994 2004
and subsequent years, the formula aid for a city is equal to the
need increase percentage multiplied by the difference between
(1) the city's revenue need multiplied by its population, and
(2) the sum of the city's net tax capacity multiplied by the tax
effort rate, and the taconite aids under sections 298.28 and
298.282, multiplied by the following percentages:
(i) zero percent for aids payable in 2004;
(ii) 25 percent for aids payable in 2005;
(iii) 50 percent for aids payable in 2006;
(iv) 75 percent for aids payable in 2007; and
(v) 100 percent for aids payable in 2008 and thereafter.
No city may have a formula aid amount less than zero. The need
increase percentage must be the same for all cities.
Notwithstanding the prior sentence, in 1995 only, the need
increase percentage for a city shall be twice the need increase
percentage applicable to other cities if:
(1) the city, in 1992 or 1993, transferred an amount from
governmental funds to their sewer and water fund, and
(2) the amount transferred exceeded their net levy for
taxes payable in the year in which the transfer occurred.
The applicable need increase percentage or percentages must
be calculated by the department of revenue so that the total of
the aid under subdivision 9 equals the total amount available
for aid under section 477A.03 after the subtraction under
section 477A.014, subdivisions 4 and 5.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 8. Minnesota Statutes 2002, section 477A.013,
subdivision 9, is amended to read:
Subd. 9. [CITY AID DISTRIBUTION.] (a) In calendar year
2002 and thereafter, each city shall receive an aid distribution
equal to the sum of (1) the city formula aid under subdivision
8, and (2) its city aid base.
(b) The percentage increase aid for a first class city in
calendar year 1995 and thereafter, except for 2002, 2004 shall
not exceed the percentage increase in the sum of the aid to all
cities under this section in the current calendar year compared
to the sum of the aid to all cities in the previous year amount
of its aid in calendar year 2003 after the reductions under this
article. For aids payable in 2002 only, the amount of the aid
paid to a first class city shall not exceed the sum of its aid
amount for calendar year 2001 under this section and its aid
payment in calendar year 2001 under section 273.1398,
subdivision 2, by more than 2.5 percent.
(c) For aids payable in all years except 2002 2005 and
thereafter, the total aid for any city, except a first class
city, shall not exceed the sum of (1) ten percent of the city's
net levy for the year prior to the aid distribution plus (2) its
total aid in the previous year. For aids payable in 2002 only,
the total aid for any city, except a first class city, shall not
exceed the sum of (1) 40 percent of the city's net levy for
taxes payable in the year prior to the aid distribution plus (2)
40 percent of its total aid in the previous year under section
273.1398, subdivision 2, plus (3) its total aid in the previous
year under this section. For aids payable in 2005 and
thereafter, the total aid for any city with a population of
2,500 or more may not decrease from its total aid under this
section in the previous year by an amount greater than ten
percent of its net levy in the year prior to the aid
distribution.
(d) For aids payable in 2004 only, the total aid for a city
with a population less than 2,500 may not be less than the
amount it was certified to receive in 2003 minus the greater of
(1) the reduction to this aid payment in 2003 under this
article, or (2) five percent of its 2003 aid amount. For aids
payable in 2005 and thereafter, the total aid for a city with a
population less than 2,500 must not be less than the amount it
was certified to receive in the previous year minus five percent
of its 2003 certified aid amount.
[EFFECTIVE DATE.] This section is effective beginning with
aids payable in 2004.
Sec. 9. Minnesota Statutes 2002, section 477A.03,
subdivision 2, is amended to read:
Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to
discharge the duties imposed by sections 477A.011 to 477A.014 is
annually appropriated from the general fund to the commissioner
of revenue.
(b) Aid payments to counties under section 477A.0121 are
limited to $20,265,000 in 1996. Aid payments to counties under
section 477A.0121 are limited to $27,571,625 in 1997. For aid
payable in 1998 and thereafter, the total aids paid under
section 477A.0121 are the amounts certified to be paid in the
previous year, adjusted for inflation as provided under
subdivision 3.
(c)(i) For aids payable in 1998 and thereafter, the total
aids paid to counties under section 477A.0122 are the amounts
certified to be paid in the previous year, adjusted for
inflation as provided under subdivision 3.
(ii) Aid payments to counties under section 477A.0122 in
2000 are further increased by an additional $20,000,000 in 2000.
(d) Aid payments to cities in 2002 under section 477A.013,
subdivision 9, are limited to the amounts certified to be paid
in the previous year, adjusted for inflation as provided in
subdivision 3, and increased by $140,000,000. For aids payable
in 2003, the total aids paid under section 477A.013, subdivision
9, are the amounts certified to be paid in the previous year,
adjusted for inflation as provided under subdivision 3. For
aids payable in 2004, the total aids paid under section
477A.013, subdivision 9, are the amounts certified to be paid in
the previous year, adjusted for inflation as provided under
subdivision 3, and increased by the amount certified to be paid
in 2003 under section 477A.06. For aids payable in 2005 and
thereafter, the total aids paid under section 477A.013,
subdivision 9, are the amounts certified to be paid in the
previous year, adjusted for inflation as provided under
subdivision 3. The additional amount authorized under
subdivision 4 is not included when calculating the appropriation
limits under this paragraph.
(e) Reimbursements made to counties under section 477A.0123
in calendar year 2005 and thereafter are limited to an amount
equal to the maximum allowed appropriation under this section in
the previous year, multiplied by a percent to be established by
law. If no percent is established by law, the appropriation is
limited to the total amount appropriated for this purpose in the
previous year.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2004 and thereafter.
Sec. 10. Minnesota Statutes 2002, section 477A.03, is
amended by adding a subdivision to read:
Subd. 2a. [CITIES.] For aids payable in 2004, the total
aids paid under section 477A.013, subdivision 9, are limited to
$429,000,000. For aids payable in 2005 and thereafter, the
total aids paid under section 477A.013, subdivision 9, are
increased to $437,052,000.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2004 and thereafter.
Sec. 11. [DEFINITIONS.]
(a) For purposes of sections 11 to 13, the following terms
have the meanings given them in this section.
(b) The 2003 and 2004 "levy plus aid revenue base" for a
city is the sum of that city's certified property tax levy for
taxes payable in 2003, plus the sum of the amounts the city was
certified to receive in 2003 as:
(1) local government aid under Minnesota Statutes, section
477A.013;
(2) existing low-income housing aid under Minnesota
Statutes, section 477A.06;
(3) new construction low-income housing aid under Minnesota
Statutes, section 477A.065; and
(4) taconite aids under Minnesota Statutes, sections 298.28
and 298.282, including any aid which was required to be placed
in a special fund for expenditure in the next succeeding year.
(c) "Total revenue" for a city for calendar year 2003 is
the total revenue amount for that city, as reported by the state
auditor for calendar year 2000, excluding grants between
political subdivisions and amounts borrowed by the city but
including net transfers from an enterprise fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 12. [2003 CITY AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for each city for 2003 equal to 9.3 percent of the city's
levy plus aid revenue base for 2003.
The reduction amount is limited to 3.7 percent of the
city's total revenues for 2003 if a city has a population under
1,000 or if the city has a three-year levy plus aid revenue base
increase average of less than two percent. For all other
cities, the reduction amount is limited to 5.25 percent of the
city's total revenues for 2003.
The reduction is further limited to the sum of the city's
payable 2003 distribution pursuant to Minnesota Statutes,
section 477A.013, and related sections, and the city's payable
2003 reimbursement under Minnesota Statutes, section 273.1384.
The reduction is applied first to the city's distribution
pursuant to Minnesota Statutes, section 477A.013, and then if
necessary to the city's reimbursements pursuant to Minnesota
Statutes, section 273.1384.
To the extent that sufficient information is available on
each successive payment date within the year, the commissioner
of revenue shall pay any remaining 2003 distribution or
reimbursement amount reduced under this section in equal
installments on the payment dates provided in law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. [2004 CITY AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for 2004 for each city as provided in this section.
The initial aid reduction amount for each city is the
amount by which the city's aid distribution under Minnesota
Statutes, section 477A.013, and related provisions payable in
2003 exceeds the city's 2004 distribution under those provisions.
The minimum aid reduction amount for a city is the amount
of its reduction in 2003 under section 12. If a city receives
an increase to its city aid base under Minnesota Statutes,
section 477A.011, subdivision 36, its minimum aid reduction is
reduced by an equal amount.
The maximum aid reduction amount for a city is an amount
equal to 14 percent of the city's total 2004 levy plus aid
revenue base, except that if the city has a city net tax
capacity for aids payable in 2004, as defined in Minnesota
Statutes, section 477A.011, subdivision 20, of $700 per capita
or less, the maximum aid reduction shall not exceed an amount
equal to 13 percent of the city's total 2004 levy plus aid
revenue base.
If the initial aid reduction amount for a city is less than
the minimum aid reduction amount for that city, the final aid
reduction amount for the city is the sum of the initial aid
reduction amount and the lesser of the amount of the city's
payable 2004 reimbursement under Minnesota Statutes, section
273.1384, or the difference between the minimum and initial aid
reduction amounts for the city.
If the initial aid reduction amount for a city is greater
than the maximum aid reduction amount for the city, the city
receives an additional distribution under this section equal to
the result of subtracting the maximum aid reduction amount from
the initial aid reduction amount. This distribution shall be
paid in equal installments in 2004 on the dates specified in
Minnesota Statutes, section 477A.015. The amount necessary for
these additional distributions is appropriated to the
commissioner of revenue from the general fund in fiscal year
2005.
The initial aid reduction is applied to the city's
distribution pursuant to Minnesota Statutes, section 477A.013,
and any aid reduction in excess of the initial aid reduction is
applied to the city's reimbursements pursuant to Minnesota
Statutes, section 273.1384.
To the extent that sufficient information is available on
each payment date in 2004, the commissioner of revenue shall pay
the reimbursements reduced under this section in equal
installments on the payment dates provided in law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. [REPEALER.]
Minnesota Statutes 2002, sections 477A.011, subdivision 37;
477A.0132; 477A.03, subdivisions 3 and 4; 477A.06; and 477A.07,
are repealed effective for aids payable in 2004 and thereafter.
ARTICLE 6
OTHER INTERGOVERNMENTAL AIDS
Section 1. Minnesota Statutes 2002, section 273.1398,
subdivision 4a, is amended to read:
Subd. 4a. [TEMPORARY AID OFFSET FOR COURT COSTS.] (a) In
calendar years 2004 and 2005, the commissioner of revenue shall
pay the amounts determined in paragraph (d) to the eligible
counties on the dates specified in subdivision 6. By July 15 of
the year preceding the year in which the state assumes the cost
of court administration in the judicial district as specified
under section 480.183, 2003, the supreme court shall determine
and certify to the commissioner of revenue for each county the
county's share of the costs to be assumed in the judicial
districts specified under section 480.183, subdivision 1, during
each of the succeeding fiscal year years.
(b) The amount certified in paragraph (a) shall be equal to
the following:
(1) 103 percent of the required court administration
expenditures as defined under section 480.183, subdivision 3,
for calendar year 2003, as determined under subdivision 4b,
paragraph (a); plus
(2) an adjustment for any cumulative percentage increase in
salary expenditures as defined under section 480.183,
subdivision 2, in excess of a maintenance of effort increase of
six percent; less
(3) an amount equal to the county's share of transferred
fines collected by the district courts in the county during the
calendar year preceding certification 2002, increased by two
percent for counties in districts one and three, and by 4.04
percent for counties in districts six and ten.
The court and the county may, if both parties agree,
negotiate and certify an amount higher than the amount
calculated under this paragraph.
(c) For purposes of this subdivision, the adjustment in
paragraph (b), clause (2), shall be equal to:
(1) the sum of the court administration expenditures as
defined under section 480.183, subdivision 3, required under
subdivision 4b, paragraph (a), plus the temporary aid payment
under subdivision 4c; multiplied by
(2) the difference between (i) the cumulative percentage
increase in actual and anticipated salary settlements for court
employees from July 1, 2001, until the date of the court
transfer and (ii) the percentage specified in subdivision 4b,
paragraph (a).
(d) Payments to a county under subdivision 2 or section
273.166 for the calendar year in which the state assumes the
cost of court administration as defined under section 480.183,
subdivision 3, in the judicial district must be permanently
reduced by an amount equal to 75 percent of the net cost to the
state for assumption of district court costs as certified in
paragraph (a). For calendar year 2004, each county in judicial
districts one and three shall receive an amount equal to 25
percent of the amount certified under paragraph (b), and each
county in judicial districts six and ten shall receive an amount
equal to the amount certified under paragraph (b). For calendar
year 2005, each county in judicial districts six and ten shall
receive an amount equal to 25 percent of the amount certified
under paragraph (b), and each county in judicial districts one
and three receives zero.
(e) Payments to a county under subdivision 2 or section
273.166 for the calendar year after the calendar year in which
the state assumes the cost of court administration as defined
under section 480.183, subdivision 3, in the judicial district
must be permanently reduced by an amount equal to 25 percent of
the net cost to the state for assumption of district court costs
as certified in paragraph (a), provided that this amount must be
increased or decreased by an amount equal to the positive or
negative difference between the amount of fee and fine revenue
certified under paragraph (b), clause (3), and the actual amount
of fee and fine revenue of the county for the calendar year when
certification takes place.
(f) Payments to a county under subdivision 2 for calendar
year 2001 are permanently increased by an amount equal to 7.5
percent of the county's share of transferred fines collected by
the district courts in the county during calendar year 1998, as
determined under paragraph (a). If the amount determined in
paragraph (a) exceeds the amount of aid a county is scheduled to
be paid under subdivision 2 in 2000, then the county shall not
receive an aid increase under this paragraph.
(g) Payments to a county under subdivision 2 or section
273.166, for the cost of mandated services, as defined in
section 480.183, subdivision 4, in the judicial district, must
be permanently reduced in 2002 by an amount equal to the cost to
the state for assumption of mandated court services as defined
in section 480.183, subdivision 4. The supreme court shall
determine the amount for each county and certify it to the
commissioner of revenue by July 15, 2001.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and 2005.
Sec. 2. Minnesota Statutes 2002, section 273.1398,
subdivision 4c, is amended to read:
Subd. 4c. [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For
calendar years 2004 and 2005, each county in a judicial district
that has not been transferred to the state by January 1 of that
year shall receive additional homestead and agricultural
credit temporary court maintenance of effort cost aid. This
amount is in addition to the amount calculated under subdivision
2 and must not be included in the definition of homestead and
agricultural credit base under subdivision 1, paragraph (j).
The amount of additional aid is equal to the difference between
(1) the amount budgeted for court administration costs in 2001
as determined under subdivision 4b, paragraph (b), multiplied by
the maintenance of effort percent for the calendar year as
determined under subdivision 4b, paragraph (a), and (2) the
amount calculated under subdivision 4b, paragraph (a), for
calendar year 2003, except that the payment under this section
is reduced by 50 percent in the calendar year in which the
district is transferred to the state. This additional aid must
be used only to fund court administration expenditures as
defined in section 480.183, subdivision 3. This amount must be
added to the state court's base budget in the year when the
court in that judicial district in which the county is located
is transferred to the state.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and 2005 for counties in judicial districts one, three,
six, and ten.
Sec. 3. Minnesota Statutes 2002, section 273.1398,
subdivision 6, is amended to read:
Subd. 6. [PAYMENT.] The commissioner shall certify the
aids provided in subdivisions 2, 2b, 3, and 5 subdivision 3
before September 1 of the year preceding the distribution year
to the county auditor of the affected local government. The
aids provided in subdivisions 2, 2b, 3, 4a, and 5 4c must be
paid to local governments other than school districts at the
times provided in section 477A.015 for payment of local
government aid to taxing jurisdictions, except that the first
one-half payment of disparity reduction aid provided in
subdivision 3 must be paid on or before August 31. The
disparity reduction credit provided in subdivision 4 must be
paid to taxing jurisdictions other than school districts at the
time provided in section 473H.10, subdivision 3. Aids and
credit reimbursements to school districts must be certified to
the commissioner of children, families, and learning and paid
under section 273.1392. Payment shall not be made to any taxing
jurisdiction that has ceased to levy a property tax.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 4. Minnesota Statutes 2002, section 273.1398,
subdivision 8, is amended to read:
Subd. 8. [APPROPRIATION.] (a) An amount sufficient to pay
the aids and credits provided under this section for school
districts, intermediate school districts, or any group of school
districts levying as a single taxing entity, is annually
appropriated from the general fund to the commissioner of
children, families, and learning. An amount sufficient to pay
the aids and credits provided under this section for counties,
cities, towns, and special taxing districts is annually
appropriated from the general fund to the commissioner of
revenue. A jurisdiction's aid amount may be increased or
decreased based on any prior year adjustments for homestead
credit or other property tax credit or aid programs.
(b) The commissioner of finance shall bill the commissioner
of revenue for the cost of preparation of local impact notes as
required by section 3.987 only to the extent to which those
costs exceed those costs incurred in fiscal year 1997 and for
any other new costs attributable to the local impact note
function required by section 3.987, not to exceed $100,000 in
fiscal years 1998 and 1999 and $200,000 in fiscal year 2000 and
thereafter.
The commissioner of revenue shall deduct the amount billed
under this paragraph from aid payments to be made to cities and
counties under subdivision 2 on a pro rata basis. The amount
deducted under this paragraph is appropriated to the
commissioner of finance for the preparation of local impact
notes.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 5. [477A.0124] [COUNTY PROGRAM AID.]
Subdivision 1. [CALENDAR YEAR 2004.] In 2004, each county
shall receive program aid in an amount equal to the sum of:
(1) the amount of county attached machinery aid computed
for the county for payment in 2003 under section 273.138 prior
to any reduction under laws enacted in 2003;
(2) the amount of county homestead and agricultural credit
aid computed for the county for payment in 2003 under section
273.1398, subdivision 2, prior to any reduction under laws
enacted in 2003, minus the amount certified under section
273.1398, subdivision 4a, paragraph (b), for counties in
judicial districts one, three, six, and ten, and by 25 percent
of the amount certified under section 273.1398, subdivision 4a,
paragraph (b), for counties located in judicial districts two
and four;
(3) the amount of county manufactured home homestead and
agricultural credit aid computed for the county for payment in
2003 under section 273.166 prior to any reduction under laws
enacted in 2003;
(4) the amount of county criminal justice aid computed for
the county for payment in 2003 under section 477A.0121 prior to
any reduction under laws enacted in 2003; and
(5) the amount of county family preservation aid computed
for the county for payment in 2003 under section 477A.0122 prior
to any reduction under laws enacted in 2003.
Subd. 2. [DEFINITIONS.] (a) For the purposes of this
section, the following terms have the meanings given them.
(b) "County program aid" means the sum of "county need aid,"
"county tax base equalization aid," and "county transition aid."
(c) "Age-adjusted population" means a county's population
multiplied by the county age index.
(d) "County age index" means the percentage of the
population over age 65 within the county divided by the
percentage of the population over age 65 within the state,
except that the age index for any county may not be greater than
1.8 nor less than 0.8.
(e) "Population over age 65" means the population over age
65 established as of July 1 in an aid calculation year by the
most recent federal census, by a special census conducted under
contract with the United States Bureau of the Census, by a
population estimate made by the metropolitan council, or by a
population estimate of the state demographer made pursuant to
section 4A.02, whichever is the most recent as to the stated
date of the count or estimate for the preceding calendar year.
(f) "Part I crimes" means the three-year average annual
number of Part I crimes reported for each county by the
department of public safety for the most recent years available.
By July 1 of each year, the commissioner of public safety shall
certify to the commissioner of revenue the number of Part I
crimes reported for each county for the three most recent
calendar years available.
(g) "Households receiving food stamps" means the average
monthly number of households receiving food stamps for the three
most recent years for which data is available. By July 1 of
each year, the commissioner of human services must certify to
the commissioner of revenue the average monthly number of
households in the state and in each county that receive food
stamps, for the three most recent calendar years available.
(h) "County net tax capacity" means the net tax capacity of
the county, computed analogously to city net tax capacity under
section 477A.011, subdivision 20.
Subd. 3. [COUNTY NEED AID.] For 2005 and subsequent years,
the money appropriated to county need aid each calendar year
shall be allocated as follows: 40 percent based on each
county's share of age-adjusted population, 40 percent based on
each county's share of the state total of households receiving
food stamps, and 20 percent based on each county's share of the
state total of Part I crimes.
Subd. 4. [COUNTY TAX-BASE EQUALIZATION AID.] (a) For 2005
and subsequent years, the money appropriated to county tax-base
equalization aid each calendar year shall be apportioned among
the counties according to each county's tax-base equalization
aid factor.
(b) A county's tax-base equalization aid factor is equal to
the amount by which (i) $185 times the county's population,
exceeds (ii) 9.45 percent of the county's net tax capacity.
(c) In the case of a county with a population less than
10,000, the factor determined in paragraph (b) shall be
multiplied by a factor of three.
(d) In the case of a county with a population greater than
or equal to 10,000, but less than 12,500, the factor determined
in paragraph (b) shall be multiplied by a factor of two.
(e) In the case of a county with a population greater than
500,000, the factor determined in paragraph (b) shall be
multiplied by a factor of 0.25.
Subd. 5. [COUNTY TRANSITION AID.] (a) For 2005, a county
is eligible for transition aid equal to the amount, if any, by
which:
(1) the difference between:
(i) the aid the county received under subdivision 1 in
2004, divided by the total aid paid to all counties under
subdivision 1, multiplied by $205,000,000; and
(ii) the amount of aid the county is certified to receive
in 2005 under subdivisions 3 and 4;
exceeds:
(2) three percent of the county's adjusted net tax capacity.
A county's aid under this paragraph may not be less than zero.
(b) In 2006, a county is eligible to receive two-thirds of
the transition aid it received in 2005.
(c) In 2007, a county is eligible to receive one-third of
the transition aid it received in 2005.
(d) No county shall receive aid under this subdivision
after 2007.
[EFFECTIVE DATE.] This section is effective for aids
payable in 2004 and subsequent years.
Sec. 6. Minnesota Statutes 2002, section 477A.03, is
amended by adding a subdivision to read:
Subd. 2b. [COUNTIES.] (a) For aids payable in calendar
year 2005 and thereafter, the total aids paid to counties under
section 477A.0124, subdivision 3, are limited to $100,500,000.
Each calendar year, $500,000 shall be retained by the
commissioner of revenue to make reimbursements to the
commissioner of finance for payments made under section 611.27.
For calendar year 2004, the amount shall be in addition to the
payments authorized under section 477A.0124, subdivision 1. For
calendar year 2005 and subsequent years, the amount shall be
deducted from the appropriation under this paragraph. The
reimbursements shall be to defray the additional costs
associated with court-ordered counsel under section 611.27. Any
retained amounts not used for reimbursement in a year shall be
included in the next distribution of county need aid that is
certified to the county auditors for the purpose of property tax
reduction for the next taxes payable year.
(b) For aids payable in 2005 and thereafter, the total aids
under section 477A.0124, subdivision 4, are limited to
$105,000,000. The commissioner of finance shall bill the
commissioner of revenue for the cost of preparation of local
impact notes as required by section 3.987, not to exceed
$207,000 in fiscal year 2004 and thereafter. The commissioner
of children, families, and learning shall bill the commissioner
of revenue for the cost of preparation of local impact notes for
school districts as required by section 3.987, not to exceed
$7,000 in fiscal year 2004 and thereafter. The commissioner of
revenue shall deduct the amounts billed under this paragraph
from the appropriation under this paragraph. The amounts
deducted are appropriated to the commissioner of finance and the
commissioner of children, families, and learning for the
preparation of local impact notes.
[EFFECTIVE DATE.] This section is effective for aid payable
in 2004 and thereafter.
Sec. 7. Minnesota Statutes 2002, section 611.27,
subdivision 13, is amended to read:
Subd. 13. [PUBLIC DEFENSE SERVICES; CORRECTIONAL FACILITY
INMATES.] All billings for services rendered and ordered under
subdivision 7 shall require the approval of the chief district
public defender before being forwarded on a monthly basis to the
state public defender. In cases where adequate representation
cannot be provided by the district public defender and where
counsel has been appointed under a court order, the state public
defender shall forward to the commissioner of finance all
billings for services rendered under the court order. The
commissioner shall pay for services from county criminal justice
aid retained by the commissioner of revenue for that purpose
under section 477A.0121, subdivision 4, or from county program
aid retained by the commissioner of revenue for that purpose
under section 477A.0124, subdivision 1, clause (4), or 477A.03,
subdivision 2b, paragraph (a).
The costs of appointed counsel and associated services in
cases arising from new criminal charges brought against indigent
inmates who are incarcerated in a Minnesota state correctional
facility are the responsibility of the state board of public
defense. In such cases the state public defender may follow the
procedures outlined in this section for obtaining court-ordered
counsel.
[EFFECTIVE DATE.] This section is effective for payments in
2004 and subsequent years.
Sec. 8. Minnesota Statutes 2002, section 611.27,
subdivision 15, is amended to read:
Subd. 15. [COSTS OF TRANSCRIPTS.] In appeal cases and
postconviction cases where the state public defender's office
does not have sufficient funds to pay for transcripts and other
necessary expenses because it has spent or committed all of the
transcript funds in its annual budget, the state public defender
may forward to the commissioner of finance all billings for
transcripts and other necessary expenses. The commissioner
shall pay for these transcripts and other necessary expenses
from county criminal justice aid retained by the commissioner of
revenue under section 477A.0121, subdivision 4, or from county
program aid retained by the commissioner of revenue for that
purpose under section 477A.0124, subdivision 1, clause (4), or
477A.03, subdivision 2, paragraph (c).
[EFFECTIVE DATE.] This section is effective for payments in
2004 and subsequent years.
Sec. 9. [DEFINITIONS.]
(a) For purposes of sections 9 to 15, the following terms
have the meanings given them in this section.
(b) The 2003 and 2004 "levy plus aid revenue base" for a
county is the sum of that county's certified property tax levy
for taxes payable in 2003, plus the sum of the amounts the
county was certified to receive in the designated calendar year
as:
(1) homestead and agricultural credit aid under Minnesota
Statutes, section 273.1398, subdivision 2, plus any additional
aid under section 16, minus the amount calculated under section
273.1398, subdivision 4a, paragraph (b), for counties in
judicial districts one, three, six, and ten, and 25 percent of
the amount calculated under section 273.1398, subdivision 4a,
paragraph (b), for counties in judicial districts two and four;
(2) the amount of county manufactured home homestead and
agricultural credit aid computed for the county for payment in
2003 under section 273.166;
(3) criminal justice aid under Minnesota Statutes, section
477A.0121;
(4) family preservation aid under Minnesota Statutes,
section 477A.0122;
(5) taconite aids under Minnesota Statutes, sections 298.28
and 298.282, including any aid which was required to be placed
in a special fund for expenditure in the next succeeding year;
and
(6) county program aid under section 477A.0124.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. [2003 COUNTY AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for each county for 2003 equal to 3.21 percent of the
county's levy plus aid revenue base for 2003.
The reduction is limited to the sum of the county's payable
2003 distributions pursuant to Minnesota Statutes, sections
273.138; 273.1384; 273.1398, subdivision 2; 273.166; 477A.0121;
and 477A.0122.
The aid reduction is applied first to reduce the county's
2003 distribution pursuant to Minnesota Statutes, section
273.138, then to reduce, in this sequence, the aid payable in
2003 under Minnesota Statutes, sections 273.1398, subdivision 2;
273.166; 477A.0121; and 477A.0122. Then, if necessary, the
county's reimbursements pursuant to Minnesota Statutes, section
273.1384, are to be reduced.
To the extent that sufficient information is available on
each successive payment date within the year, the commissioner
of revenue shall pay any remaining 2003 distribution or
reimbursement amount reduced under this section in equal
installments on the payment dates provided in law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 11. [2003 TOWNSHIP AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for each township for 2003 equal to two percent of the
town's certified levy for taxes payable in 2003.
The reduction is limited to the amount of the town's
payable 2003 reimbursement pursuant to Minnesota Statutes,
section 273.1384.
To the extent that sufficient information is available on
each successive payment date within the year, the commissioner
of revenue shall pay any remaining 2003 reimbursement amount for
the town in equal installments on the payment dates provided in
law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 12. [2003 SPECIAL TAXING DISTRICT AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for each special taxing district for 2003 equal to 1.5
percent of the district's certified levy for taxes payable in
2003.
The reduction is limited to the amount of the district's
payable 2003 reimbursement pursuant to Minnesota Statutes,
section 273.1384.
To the extent that sufficient information is available on
each successive payment date within the year, the commissioner
of revenue shall pay any remaining 2003 reimbursement amount for
the district in equal installments on the payment dates provided
in law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 13. [2004 COUNTY AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for 2004 for each county as provided in this section.
The commissioner of revenue shall compute an aid reduction
amount for each county for 2004 equal to 5.689 percent of the
county's levy plus aid revenue base for 2004.
The reduction is further limited to the sum of the county's
payable 2004 distributions under Minnesota Statutes, sections
477A.0124 and 273.1384.
The aid reduction is applied first to the county's
distributions pursuant to Minnesota Statutes, section 477A.0124,
and then, if necessary, to reduce the county's reimbursements
pursuant to Minnesota Statutes, section 273.1384.
To the extent that sufficient information is available on
each payment date in 2004, the commissioner of revenue shall pay
any remaining 2004 distribution or reimbursement amount reduced
under this section in equal installments on the payment dates
provided in law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 14. [2004 TOWNSHIP AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for each township for 2004 equal to three percent of the
town's certified levy for taxes payable in 2003.
The reduction is limited to the amount of the town's
payable 2004 reimbursement pursuant to Minnesota Statutes,
section 273.1384.
To the extent that sufficient information is available on
each successive payment date within the year, the commissioner
of revenue shall pay any remaining 2004 reimbursement amount for
the town in equal installments on the payment dates provided in
law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. [2004 SPECIAL TAXING DISTRICT AID REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for each special taxing district for 2004 equal to two
percent of the district's certified levy for taxes payable in
2003.
The reduction is limited to the amount of the district's
payable 2004 reimbursement pursuant to Minnesota Statutes,
section 273.1384.
To the extent that sufficient information is available on
each successive payment date within the year, the commissioner
of revenue shall pay any remaining 2004 reimbursement amount for
the district in equal installments on the payment dates provided
in law.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 16. [HACA ADJUSTMENT; COURT TAKEOVER ERROR.]
In calendar years 2003 and 2004, any county whose 2002 aid
reduction, related to the state assumption of funding for
mandated court services, was based on costs not assumed by the
state shall receive the following aid adjustments;
(1) in calendar year 2003, a permanent increase of $50,000
in its aid payment under Minnesota Statutes, section 273.1398,
subdivision 2, above its certified 2003 aid amount; and
(2) in calendar year 2004, a permanent increase of an
additional $50,000 in its county program aid payment under
Minnesota Statutes, section 477A.0124, subdivision 1, clause (2).
[EFFECTIVE DATE.] This section is effective for aids
payable in 2003 and 2004.
Sec. 17. [REPEALER.]
(a) Minnesota Statutes 2002, sections 273.138, subdivision
2, and the parts of subdivisions 5 and 7 relating to counties;
273.1398, subdivisions 2, 2c, and 4d; 273.166; 477A.0121;
477A.0122; 477A.0123; 477A.0132; 477A.03, subdivision 3; and
477A.07, are repealed effective for aid payable in 2004 and
thereafter.
(b) Minnesota Statutes 2002, section 273.138, subdivisions
3 and 6, and the parts of subdivisions 5 and 7 relating to
school districts are repealed effective for calendar year 2003.
ARTICLE 7
LEVY LIMITS
Section 1. Minnesota Statutes 2002, section 275.70,
subdivision 5, is amended to read:
Subd. 5. [SPECIAL LEVIES.] "Special levies" means those
portions of ad valorem taxes levied by a local governmental unit
for the following purposes or in the following manner:
(1) to pay the costs of the principal and interest on
bonded indebtedness or to reimburse for the amount of liquor
store revenues used to pay the principal and interest due on
municipal liquor store bonds in the year preceding the year for
which the levy limit is calculated;
(2) to pay the costs of principal and interest on
certificates of indebtedness issued for any corporate purpose
except for the following:
(i) tax anticipation or aid anticipation certificates of
indebtedness;
(ii) certificates of indebtedness issued under sections
298.28 and 298.282;
(iii) certificates of indebtedness used to fund current
expenses or to pay the costs of extraordinary expenditures that
result from a public emergency; or
(iv) certificates of indebtedness used to fund an
insufficiency in tax receipts or an insufficiency in other
revenue sources;
(3) to provide for the bonded indebtedness portion of
payments made to another political subdivision of the state of
Minnesota;
(4) to fund payments made to the Minnesota state armory
building commission under section 193.145, subdivision 2, to
retire the principal and interest on armory construction bonds;
(5) property taxes approved by voters which are levied
against the referendum market value as provided under section
275.61;
(6) to fund matching requirements needed to qualify for
federal or state grants or programs to the extent that either
(i) the matching requirement exceeds the matching requirement in
calendar year 2001, or (ii) it is a new matching requirement
that did not exist prior to 2002;
(7) to pay the expenses reasonably and necessarily incurred
in preparing for or repairing the effects of natural disaster
including the occurrence or threat of widespread or severe
damage, injury, or loss of life or property resulting from
natural causes, in accordance with standards formulated by the
emergency services division of the state department of public
safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2;
(8) pay amounts required to correct an error in the levy
certified to the county auditor by a city or county in a levy
year, but only to the extent that when added to the preceding
year's levy it is not in excess of an applicable statutory,
special law or charter limitation, or the limitation imposed on
the governmental subdivision by sections 275.70 to 275.74 in the
preceding levy year;
(9) to pay an abatement under section 469.1815;
(10) to pay any costs attributable to increases in the
employer contribution rates under chapter 353 that are effective
after June 30, 2001;
(11) to pay the operating or maintenance costs of a county
jail as authorized in section 641.01 or 641.262, or of a
correctional facility as defined in section 241.021, subdivision
1, paragraph (5), to the extent that the county can demonstrate
to the commissioner of revenue that the amount has been included
in the county budget as a direct result of a rule, minimum
requirement, minimum standard, or directive of the department of
corrections, or to pay the operating or maintenance costs of a
regional jail as authorized in section 641.262. For purposes of
this clause, a district court order is not a rule, minimum
requirement, minimum standard, or directive of the department of
corrections. If the county utilizes this special levy, except
to pay operating or maintenance costs of a new regional jail
facility under sections 641.262 to 641.264 which will not
replace an existing jail facility, any amount levied by the
county in the previous levy year for the purposes specified
under this clause and included in the county's previous year's
levy limitation computed under section 275.71, shall be deducted
from the levy limit base under section 275.71, subdivision 2,
when determining the county's current year levy limitation. The
county shall provide the necessary information to the
commissioner of revenue for making this determination;
(12) to pay for operation of a lake improvement district,
as authorized under section 103B.555. If the county utilizes
this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause
and included in the county's previous year's levy limitation
computed under section 275.71 shall be deducted from the levy
limit base under section 275.71, subdivision 2, when determining
the county's current year levy limitation. The county shall
provide the necessary information to the commissioner of revenue
for making this determination;
(13) to repay a state or federal loan used to fund the
direct or indirect required spending by the local government due
to a state or federal transportation project or other state or
federal capital project. This authority may only be used if the
project is not a local government initiative;
(14) for counties only, to pay the costs reasonably
expected to be incurred in 2002 related to the redistricting of
election districts and establishment of election precincts under
sections 204B.135 and 204B.14, the notice required by section
204B.14, subdivision 4, and the reassignment of voters in the
statewide registration system, not to exceed $1 per capita,
provided that the county shall distribute a portion of the
amount levied under this clause equal to 25 cents times the
population of the city to all cities in the county with a
population of 30,000 or more;
(15) to pay for court administration costs as required
under section 273.1398, subdivision 4b, less the (i) county's
share of transferred fines and fees collected by the district
courts in the county for calendar year 2001 and (ii) the aid
amount certified to be paid to the county in 2004 under section
273.1398, subdivision 4c; however, for taxes levied to pay for
these costs in the year in which the court financing is
transferred to the state, the amount under this section clause
is limited to one-third of the aid reduction the amount of aid
the county is certified to receive under section 273.1398,
subdivision 4a; and
(16) (15) to fund a police or firefighters relief
association as required under section 69.77 to the extent that
the required amount exceeds the amount levied for this purpose
in 2001.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004 and thereafter.
Sec. 2. Minnesota Statutes 2002, section 275.71,
subdivision 2, is amended to read:
Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a
local governmental unit for taxes levied in 2001 is equal to the
greater of:
(1) the sum of its adjusted levy limit base for taxes
levied in 1999 plus the amount it levied in 1999 under Minnesota
Statutes 1999 Supplement, section 275.70, subdivision 5, clauses
(8) and (13), multiplied by:
(i) one plus the percentage growth in the implicit price
deflator for the 12-month period ending March 30, 2000;
(ii) one plus a percentage equal to the annual percentage
increase in the estimated number of households, if any, for the
most recent 12-month period that was available on July 1, 2000;
and
(iii) one plus a percentage equal to 50 percent of the
percentage increase in the taxable market value of the
jurisdiction due to new construction of class 3 property, as
defined in section 273.13, subdivision 24, except for
state-assessed utility and railroad operating property, for the
most recent year for which data was available as of July 1,
2000; or
(2) an amount equal to:
(i) the sum of the amount it levied in 2000 plus the amount
of aids it was certified to receive in calendar year 2001 under
sections 273.1398, 298.282, 477A.011 to 477A.03, prior to any
aid reductions under section 273.1399, subdivision 5, 477A.06,
and 477A.065; less
(ii) the amount it levied in 2000 that would qualify as
special levies under section 275.70, subdivision 6, for taxes
levied in 2001. The local governmental unit shall provide the
commissioner of revenue with sufficient information to make this
calculation.
(b) If the governmental unit was not subject to levy limits
for taxes levied in 1999, its levy limit base for taxes levied
in 2001 is equal to the amount calculated under paragraph (a),
clause (2).
(c) The levy limit base for a local governmental unit for
taxes levied in 2002 2003 is equal to its adjusted levy limit
base in the previous year, plus the amount of tree growth tax it
received in calendar year 2001 under sections 270.31 to 270.39,
and plus, in the case of a city, the amount it was certified to
receive in calendar year 2001 under section 273.166, subject to
any adjustments under section 275.72, plus any aid amounts
received in 2003 under section 273.138 or 273.166, minus the
difference between its levy limit under subdivision 5 for taxes
levied in 2002 and the amount it actually levied under that
subdivision in that year, and (3) certified property tax
replacement aid payable in 2003 under section 174.242.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2003.
Sec. 3. Minnesota Statutes 2002, section 275.71,
subdivision 4, is amended to read:
Subd. 4. [ADJUSTED LEVY LIMIT BASE.] (a) For taxes levied
in 2001 and 2002 2003, the adjusted levy limit base is equal to
the levy limit base computed under subdivisions 2 and 3 or
section 275.72, multiplied reduced by:
(1) one plus a percentage equal to the percentage growth in
the implicit price deflator;
(2) one plus a percentage equal to the percentage increase
in number of households, if any, for the most recent 12-month
period for which data is available; and
(3) one plus a percentage equal to 50 percent of the
percentage increase in the taxable market value of the
jurisdiction due to new construction of class 3 property, as
defined in section 273.13, subdivision 24, except for
state-assessed utility and railroad operating property, for the
most recent year for which data is available 40 percent of the
difference between (1) the sum of 2003 certified aid payments,
under sections 273.138, 273.1398 except for amounts certified
under subdivision 4a, paragraph (b), 273.166, 477A.011 to
477A.03, 477A.06, and 477A.07, before any reduction under
articles 5 and 6, and (2) the sum of the aids paid in 2004 under
those same sections, after any reductions in 2004 under articles
5 and 6.
(b) For counties only, for taxes levied in 2001 and 2002,
the adjusted levy limit base is also reduced by any amount of
levy reduction required under section 275.07, subdivision 1,
paragraph (b), clause (ii). For taxes levied in 2003 only, the
adjusted levy limit base is increased by 60 percent of the
difference between a jurisdiction's market value credit in 2003
before any reductions under articles 5 and 6, and its market
value credit in 2004 after reductions in articles 5 and 6.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004.
Sec. 4. Minnesota Statutes 2002, section 275.71,
subdivision 5, is amended to read:
Subd. 5. [PROPERTY TAX LEVY LIMIT.] Notwithstanding any
other provision of a municipal charter which limits ad valorem
taxes to a lesser amount, or which would require a separate
voter approval for any increase, For taxes levied in 2001 and
2002 2003, the property tax levy limit for a local governmental
unit is equal to its adjusted levy limit base determined under
subdivision 4 plus any additional levy authorized under section
275.73, which is levied against net tax capacity, reduced by the
sum of (i) the total amount of aids and reimbursements that the
local governmental unit is certified to receive under sections
477A.011 to 477A.014, except for the increases in city aid bases
in calendar year 2002 under section 477A.011, subdivision 36,
paragraphs (n), (p), and (q) (l), (n), and (o), (ii) homestead
and agricultural aids it is certified to receive under section
273.1398, (iii) taconite aids under sections 298.28 and 298.282
including any aid which was required to be placed in a special
fund for expenditure in the next succeeding year,
(iv) low-income housing aid under sections 477A.06 and
477A.065 temporary court aid under section 273.1398, subdivision
4a, and (v) property tax replacement aids under section
174.242 estimated payments to the local governmental unit under
section 272.029, adjusted for any error in estimation in the
preceding year.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004.
Sec. 5. Minnesota Statutes 2002, section 275.71,
subdivision 6, is amended to read:
Subd. 6. [LEVIES IN EXCESS OF LEVY LIMITS.] (a) If the
levy made by a city or county exceeds the levy limit provided in
sections 275.70 to 275.74, except when the excess levy is due to
the rounding of the rate in accordance with section 275.28, the
county auditor shall only extend the amount of taxes permitted
under sections 275.70 to 275.74, as provided for in section
275.16.
(b) For taxes levied in 2002, payable in 2003 only, if an
error was made in calculating the levy limit adjustment related
to a special levy for jails authorized under section 275.70,
subdivision 5, clause (11), in the previous year, the following
adjustments must be made:
(1) the county's levy limit base for taxes levied in 2002
must be based on the corrected adjusted levy limit base for
taxes levied in 2001; and
(2) the county's final levy limit for taxes levied in 2002,
payable in 2003, must also be temporarily reduced by an amount
equal to the amount of county levy spread in the previous year
in excess of the total recalculated levy limit plus authorized
special levies for taxes levied in 2001, payable in 2002.
(c) The commissioner of revenue shall inform counties
affected by paragraph (b) of the levy error and levy adjustments
required under this provision by June 15, 2002. The county may
provide additional information to the commissioner indicating
why these adjustments may be in error by July 15, 2002. The
commissioner shall certify the final levy adjustment to the
affected counties by August 1, 2002. The levy reduction imposed
under paragraph (b), clause (2), may be spread over a period not
to exceed three years, upon agreement between the county and the
commissioner.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004.
Sec. 6. Minnesota Statutes 2002, section 275.72,
subdivision 3, is amended to read:
Subd. 3. [ADJUSTMENTS FOR CHANGES IN SERVICE LEVELS.] If a
local governmental unit, as a result of an annexation
agreement prior to January 1, 1999, has different tax rates in
various parts of the jurisdiction due to different service
levels, it may petition the commissioner of revenue to adjust
its levy limits established under section 275.71. The
commissioner shall adjust the levy limits to reflect scheduled
changes in tax rates related to increasing service levels in
areas currently receiving less city services. The local
governmental unit shall provide the commissioner with any
information the commissioner deems necessary in making the levy
limit adjustment.
[EFFECTIVE DATE.] This section is effective for taxes
levied in 2003, payable in 2004.
Sec. 7. Minnesota Statutes 2002, section 275.73,
subdivision 2, is amended to read:
Subd. 2. [LEVY EFFECTIVE DATE.] An additional levy
approved under subdivision 1 at a general or special election
held prior to September 1 on or before the first Tuesday after
the first Monday in November in any levy year may be levied in
that same levy year and subsequent levy years. An additional
levy approved under subdivision 1 at a general or special
election held after August 31 the first Tuesday after the first
Monday in November in any levy year shall not be levied in that
same levy but may be levied in subsequent levy years.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004.
Sec. 8. Minnesota Statutes 2002, section 275.74,
subdivision 3, is amended to read:
Subd. 3. [INFORMATION NECESSARY TO CALCULATE THE 2001 LEVY
LIMIT BASE.] A local governmental unit must provide the
commissioner with the information required to calculate the
alternative 2001 levy limit base amount under section 275.71,
subdivision 2, paragraph (a), clause (2), by July 20, 2001 of
the levy year. If the information is not received by the
commissioner by that date, or is not deemed sufficient to make
the calculation under that clause, the commissioner has the
discretion to set the local governmental unit's 2001 levy limit
for all purposes including those purposes for which special
levies may be made, base equal to the amount calculated under
section 275.71, subdivision 2, paragraph (a), clause (1) of the
local governmental unit's certified levy for the prior year.
[EFFECTIVE DATE.] This section is effective for taxes
payable in 2004.
ARTICLE 8
SALES AND USE TAX
Section 1. Minnesota Statutes 2002, section 168.27,
subdivision 4a, is amended to read:
Subd. 4a. [LIMITED USED VEHICLE LICENSE.] (a) 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 individuals, or who sells and reassigns vehicles to a
licensed motor vehicle dealer. 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 or donated to a retail customer an individual.
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.
(b) A nonprofit charitable organization with a limited used
vehicle license shall, within 90 days after a vehicle donation,
send a donor a receipt for the donated vehicle which states its
model; age; level of use, including, but not limited to, the
mileage; its condition, and whether a visual inspection
disclosed any readily apparent defects that would materially
reduce the value of the property. The receipt must include the
date of the donation and must state whether the vehicle was
operable or inoperable at the time of the donation.
[EFFECTIVE DATE.] This section is effective for sales and
transfers made after June 30, 2003.
Sec. 2. Minnesota Statutes 2002, section 289A.20,
subdivision 4, is amended to read:
Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by
chapter 297A are due and payable to the commissioner monthly on
or before the 20th day of the month following the month in which
the taxable event occurred, or following another reporting
period as the commissioner prescribes or as allowed under
section 289A.18, subdivision 4, paragraph (f) or (g), except
that use taxes due on an annual use tax return as provided under
section 289A.11, subdivision 1, are payable by April 15
following the close of the calendar year.
(b) For a fiscal year ending before July 1, 2002, A vendor
having a liability of $120,000 or more during a fiscal year
ending June 30 must remit the June liability for the next year
in the following manner:
(1) Two business days before June 30 of the year, the
vendor must remit 75 85 percent of the estimated June liability
to the commissioner.
(2) On or before August 20 of the year, the vendor must pay
any additional amount of tax not remitted in June.
(c) A vendor having a liability of $120,000 or more during
a fiscal year ending June 30 must remit all liabilities on
returns due for periods beginning in the subsequent calendar
year by electronic means on or before the 20th day of the month
following the month in which the taxable event occurred, or on
or before the 20th day of the month following the month in which
the sale is reported under section 289A.18, subdivision 4,
except for 75 85 percent of the estimated June liability, which
is due two business days before June 30. The remaining amount
of the June liability is due on August 20.
[EFFECTIVE DATE.] This section, paragraph (a), is effective
for sales and purchases made on or after January 1, 2004. The
rest of this section is effective for payments made after
December 31, 2003.
Sec. 3. Minnesota Statutes 2002, section 289A.31,
subdivision 7, is amended to read:
Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax
required to be collected by the retailer under chapter 297A
constitutes a debt owed by the retailer to Minnesota, and the
sums collected must be held as a special fund in trust for the
state of Minnesota.
A retailer who does not maintain a place of business within
this state as defined by section 297A.66, subdivision 1, shall
not be indebted to Minnesota for amounts of tax that it was
required to collect but did not collect unless the retailer knew
or had been advised by the commissioner of its obligation to
collect the tax.
(b) The use tax required to be paid by a purchaser is a
debt owed by the purchaser to Minnesota.
(c) The tax imposed by chapter 297A, and interest and
penalties, is a personal debt of the individual required to file
a return from the time the liability arises, irrespective of
when the time for payment of that liability occurs. The debt
is, in the case of the executor or administrator of the estate
of a decedent and in the case of a fiduciary, that of the
individual in an official or fiduciary capacity unless the
individual has voluntarily distributed the assets held in that
capacity without reserving sufficient assets to pay the tax,
interest, and penalties, in which case the individual is
personally liable for the deficiency.
(d) Liability for payment of sales and use taxes includes
any responsible person or entity described in the personal
liability provisions of section 270.101.
(e) Any amounts collected, even if erroneously or illegally
collected, from a purchaser under a representation that they are
taxes imposed under chapter 297A are state funds from the time
of collection and must be reported on a return filed with the
commissioner.
(f) The tax imposed under chapter 297A on sales of tickets
to the premises of or events sponsored by the state agricultural
society and conducted on the state fairgrounds during the period
of the annual state fair may be retained by the state
agricultural society if the funds are used and matched as
required under section 37.13, subdivision 2.
[EFFECTIVE DATE.] This section is effective for sales taxes
collected on sales occurring after June 30, 2003.
Sec. 4. Minnesota Statutes 2002, section 289A.60,
subdivision 15, as amended by Laws 2003, chapter 127, article 6,
section 2, if enacted, is amended to read:
Subd. 15. [ACCELERATED PAYMENT OF JUNE SALES TAX
LIABILITY; PENALTY FOR UNDERPAYMENT.] (a) For payments made
after December 31, 2002, and before January 1, 2004, if a vendor
is required by law to submit an estimation of June sales tax
liabilities and 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 75 percent of
the preceding May's liability or 75 percent of the average
monthly liability for the previous calendar year.
(b) For payments made after December 31, 2003, if a vendor
is required by law to submit an estimation of June sales tax
liabilities and 85 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 85 percent of
the preceding May's liability or 85 percent of the average
monthly liability for the previous calendar year.
[EFFECTIVE DATE.] Paragraph (a) of this section is
effective for payments made after December 31, 2002, and before
January 1, 2004. Paragraph (b) of this section is effective for
payments made after December 31, 2003.
Sec. 5. Minnesota Statutes 2002, section 297A.70,
subdivision 8, is amended to read:
Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION
SYSTEM; PRODUCTS AND SERVICES.] Products and services including,
but not limited to, end user equipment used for construction,
ownership, operation, maintenance, and enhancement of the
backbone system of the regionwide public safety radio
communication system established under sections 473.891 to
473.905, are exempt. For purposes of this subdivision, backbone
system is defined in section 473.891, subdivision 9. This
subdivision is effective for purchases, sales, storage, use, or
consumption occurring before August 1, 2003 2005, in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 6. Minnesota Statutes 2002, section 297A.70,
subdivision 10, is amended to read:
Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] (a) Tickets
or admissions to an event are exempt if all the gross receipts
are recorded as such, in accordance with generally accepted
accounting principles, on the books of one or more organizations
that whose primary mission is to provide an opportunity for
citizens of the state to participate in the creation,
performance, or appreciation of the arts, and provided that each
organization is:
(1) an organization described in section 501(c)(3) of the
Internal Revenue Code in which voluntary contributions make up
at least the following percent of the organization's annual
revenue in its most recently completed 12-month fiscal year, or
in the current year if the organization has not completed a
12-month fiscal year:
(i) for sales made after July 31, 2001, and before July 1,
2002, for the organization's fiscal year completed in calendar
year 2000, three percent;
(ii) for sales made on or after July 1, 2002, and on or
before June 30, 2003, for the organization's fiscal year
completed in calendar year 2001, three percent;
(iii) for sales made on or after July 1, 2003, and on or
before June 30, 2004, for the organization's fiscal year
completed in calendar year 2002, four percent; and
(iv) for sales made in each 12-month period, beginning on
July 1, 2004, and each subsequent year, for the organization's
fiscal year completed in the preceding calendar year, five
percent;
(2) a municipal board that promotes cultural and arts
activities; or
(3) the University of Minnesota, provided that the event is
held at a university-owned facility.
The exemption only applies if the entire proceeds, after
reasonable expenses, are used solely to provide opportunities
for citizens of the state to participate in the creation,
performance, or appreciation of the arts.
(b) Tickets or admissions to the premises of the Minnesota
zoological garden are exempt, provided that the exemption under
this paragraph does not apply to tickets or admissions to
performances or events held on the premises unless the
performance or event is sponsored and conducted exclusively by
the Minnesota zoological board or employees of the Minnesota
zoological garden.
Sec. 7. Minnesota Statutes 2002, section 297A.70,
subdivision 14, is amended to read:
Subd. 14. [FUND-RAISING EVENTS SPONSORED BY NONPROFIT
GROUPS.] (a) Sales of tangible personal property at, and
admission charges for fund-raising events sponsored by, a
nonprofit organization are exempt if:
(1) all gross receipts are recorded as such, in accordance
with generally accepted accounting practices, on the books of
the nonprofit organization; and
(2) the entire proceeds, less the necessary expenses for
the event, will be used solely and exclusively for charitable,
religious, or educational purposes. Exempt sales include the
sale of food, meals, and drinks at the fund-raising event.
(b) This exemption is limited in the following manner:
(1) it does not apply to admission charges for events
involving bingo or other gambling activities or to charges for
use of amusement devices involving bingo or other gambling
activities;
(2) all gross receipts are taxable if the profits are not
used solely and exclusively for charitable, religious, or
educational purposes;
(3) it does not apply unless the organization keeps a
separate accounting record, including receipts and disbursements
from each fund-raising event that documents all deductions from
gross receipts with receipts and other records;
(4) it does not apply to any sale made by or in the name of
a nonprofit corporation as the active or passive agent of a
person that is not a nonprofit corporation;
(5) all gross receipts are taxable if fund-raising events
exceed 24 days per year; and
(6) it does not apply to fund-raising events conducted on
premises leased for more than five days but less than 30 days;
and
(7) it does not apply if the risk of the event is not borne
by the nonprofit organization and the benefit to the nonprofit
organization is less than the total amount of the state and
local tax revenues foregone by this exemption.
(c) For purposes of this subdivision, a "nonprofit
organization" means any unit of government, corporation,
society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic,
fraternal, and senior citizens' or veterans' purposes, no part
of the net earnings of which inures to the benefit of a private
individual.
Sec. 8. Minnesota Statutes 2002, section 297A.70,
subdivision 16, is amended to read:
Subd. 16. [CAMP FEES.] Camp Fees to camps or other
recreation facilities are exempt for:
(1) services primarily for children, adults accompanying
children, or persons with disabilities; or
(2) educational or religious activities;
and the camp or facilities are owned and operated by an exempt
organization under section 501(c)(3) of the Internal Revenue
Code are exempt if the camps or facilities provide educational
and social activities for young people primarily age 18 and
under.
Sec. 9. Minnesota Statutes 2002, section 297A.71, is
amended by adding a subdivision to read:
Subd. 32. [WALKER ART CENTER.] Materials, equipment, and
supplies used or consumed in construction of the Walker Art
Center are exempt if more than $70,000,000 is raised from
private sources to pay for a portion of the costs of the project.
[EFFECTIVE DATE.] This section is effective for purchases
made on or after June 1, 2003.
Sec. 10. Minnesota Statutes 2002, section 297B.01,
subdivision 7, is amended to read:
Subd. 7. [SALE, SELLS, SELLING, PURCHASE, PURCHASED, OR
ACQUIRED.] (a) "Sale," "sells," "selling," "purchase,"
"purchased," or "acquired" means any transfer of title of any
motor vehicle, whether absolutely or conditionally, for a
consideration in money or by exchange or barter for any purpose
other than resale in the regular course of business.
(b) Any motor vehicle utilized by the owner only by leasing
such vehicle to others or by holding it in an effort to so lease
it, and which is put to no other use by the owner other than
resale after such lease or effort to lease, shall be considered
property purchased for resale.
(c) The terms also shall include any transfer of title or
ownership of a motor vehicle by other means, for or without
consideration, except that these terms shall not include:
(1) the acquisition of a motor vehicle by inheritance from
or by bequest of, a decedent who owned it;
(2) the transfer of a motor vehicle which was previously
licensed in the names of two or more joint tenants and
subsequently transferred without monetary consideration to one
or more of the joint tenants;
(3) the transfer of a motor vehicle by way of gift between
individuals, or gift from a limited used vehicle dealer licensed
under section 168.27, subdivision 4a, to an individual, when the
transfer is with no monetary or other consideration or
expectation of consideration and the parties to the transfer
submit an affidavit to that effect at the time the title
transfer is recorded;
(4) the voluntary or involuntary transfer of a motor
vehicle between a husband and wife in a divorce proceeding; or
(5) the transfer of a motor vehicle by way of a gift to an
organization that is exempt from federal income taxation under
section 501(c)(3) of the Internal Revenue Code, as amended
through December 31, 1996, when the motor vehicle will be used
exclusively for religious, charitable, or educational purposes.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2007.
Sec. 11. Laws 1980, chapter 511, section 1, subdivision 2,
as amended by Laws 1991, chapter 291, article 8, section 22, and
Laws 1998, chapter 389, article 8, section 25, is amended to
read:
Subd. 2. Notwithstanding Minnesota Statutes, Section
477A.016, or any other law, ordinance, or city charter provision
to the contrary, the city of Duluth may, by ordinance, impose an
additional sales tax of up to one and one-half percent on sales
transactions which are described in Minnesota Statutes 2000,
Section 297A.01, Subdivision 3, Clause (c). When the city
council determines that the taxes imposed under this subdivision
and under section 26 at a rate of one-half of one percent have
produced revenue sufficient to pay (1) the debt service on bonds
in a principal amount of $8,000,000 issued for capital
improvements to the Duluth Entertainment and Convention Center,
and (2) debt service on outstanding bonds originally issued in
the principal amount of $4,970,000 to finance capital
improvements to the Great Lakes Aquarium since the imposition of
the taxes at the rate of one and one-half percent, the rate of
the tax under this subdivision is reduced to one percent. The
imposition of this tax shall not be subject to voter referendum
under either state law or city charter provisions.
[EFFECTIVE DATE.] This section is effective the day after
the governing body of the city of Duluth and its chief clerical
officer comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
Sec. 12. Laws 1980, chapter 511, section 2, as amended by
Laws 1998, chapter 389, article 8, section 26, is amended to
read:
Sec. 2. [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND
MOTELS.]
Notwithstanding Minnesota Statutes, Section 477A.016, or
any other law, or ordinance, or city charter provision to the
contrary, the city of Duluth may, by ordinance, impose an
additional tax of one and one-half 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. When the city
council determines that the taxes imposed under this section and
section 25 at a rate of one-half of one percent have produced
revenue sufficient to pay (1) the debt service on bonds in a
principal amount of $8,000,000 issued for capital improvements
for the Duluth Entertainment and Convention Center, and (2) the
debt service on outstanding bonds originally issued in the
principal amount of $4,970,000 to finance capital improvements
to the Great Lakes Aquarium since the imposition of the taxes at
the rate of one and one-half percent, the rate of the tax under
this section is reduced to one percent. The tax shall be
collected in the same manner as the tax set forth in the Duluth
city charter, section 54(d), paragraph one. The imposition of
this tax shall not be subject to voter referendum under either
state law or city charter provisions.
[EFFECTIVE DATE.] This section is effective the day after
the governing body of the city of Duluth and its chief clerical
officer comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
Sec. 13. Laws 1993, chapter 375, article 9, section 46,
subdivision 2, as amended by Laws 1997, chapter 231, article 7,
section 40, and Laws 1998, chapter 389, article 8, section 30,
is amended to read:
Subd. 2. [USE OF REVENUES.] Revenues received from the tax
authorized by subdivision 1 may only be used by the city to pay
the cost of collecting the tax, and to pay for the following
projects or to secure or pay any principal, premium, or interest
on bonds issued in accordance with subdivision 3 for the
following projects.
(a) To pay all or a portion of the capital expenses of
construction, equipment and acquisition costs for the expansion
and remodeling of the St. Paul Civic Center complex, including
the demolition of the existing arena and the construction and
equipping of a new arena.
(b) The remainder of the funds must be spent for:
(1) capital projects to further residential, cultural,
commercial, and economic development in both downtown St. Paul
and St. Paul neighborhoods. The amount apportioned under this
paragraph shall be no less than 60 percent of the revenues
derived from the tax each year, except to the extent that a
portion of that amount is required to pay debt service on (1)
bonds issued for the purposes of paragraph (a) prior to March 1,
1998; or (2) bonds issued for the purposes of paragraph (a)
after March 1, 1998, but only if the city council determines
that 40 percent of the revenues derived from the tax together
with other revenues pledged to the payment of the bonds,
including the proceeds of definitive bonds, is expected to
exceed the annual debt service on the bonds; and
(2) the capital and operating expenses of cultural
organizations in the city, provided that the amount spent under
this clause may not exceed must equal ten percent of the total
amount spent under this paragraph in any year.
(c) The amount apportioned under paragraph (b) shall be no
less than 60 percent of the revenues derived from the tax each
year, except to the extent that a portion of that amount is
required to pay debt service on (1) bonds issued for the
purposes of paragraph (a) prior to March 1, 1998; or (2) bonds
issued for the purposes of paragraph (a) after March 1, 1998,
but only if the city council determines that 40 percent of the
revenues derived from the tax together with other revenues
pledged to the payment of the bonds, including the proceeds of
definitive bonds, is expected to exceed the annual debt service
on the bonds.
(d) If in any year more than 40 percent of the revenue
derived from the tax authorized by subdivision 1 is used to pay
debt service on the bonds issued for the purposes of paragraph
(a) and to fund a reserve for the bonds, the amount of the debt
service payment that exceeds 40 percent of the revenue must be
determined for that year. In any year when 40 percent of the
revenue produced by the sales tax exceeds the amount required to
pay debt service on the bonds and to fund a reserve for the
bonds under paragraph (a), the amount of the excess must be made
available for capital projects to further residential, cultural,
commercial, and economic development in the neighborhoods and
downtown until the cumulative amounts determined for all years
under the preceding sentence have been made available under this
sentence. The amount made available as reimbursement in the
preceding sentence is not included in the 60 percent determined
under paragraph (b) (c).
(d) (e) By January 15 of each odd-numbered year, the mayor
and the city council must report to the legislature on the use
of sales tax revenues during the preceding two-year period.
[EFFECTIVE DATE.] This section is effective for
distributions after April 30, 2003.
Sec. 14. Laws 1999, chapter 243, article 4, section 19, as
amended by Laws 2001, First Special Session chapter 5, article
12, section 88, is amended to read:
Sec. 19. [EFFECTIVE DATES.]
Sections 1, 2, 5, 7, 9, and 11 are effective for sales and
purchases made after June 30, 1999.
Section 3 is effective for amended returns and refund
claims filed on or after July 1, 1999.
Section 4 is effective the day following final enactment
and applies retroactively to all open tax years and to
assessments and appeals under Minnesota Statutes, sections
289A.38 and 289A.65, for which the time limits have not expired
on the date of final enactment of this act. The provisions of
Minnesota Statutes, section 289A.50, apply to refunds claimed
under section 4. Refunds claimed under section 4 must be filed
by the later of December 31, 1999, or the time limit under
Minnesota Statutes, section 289A.40, subdivision 1.
Section 6 is effective retroactively for sales and
purchases made after June 30, 1998.
Section 8 is effective for purchases and sales made after
the date of final enactment.
Section 10 is effective for purchases made after the date
of final enactment and before July 1, 2003 2005.
Section 12 is effective the day after final enactment.
Section 12, paragraphs (a) to (c), apply to all local sales
taxes enacted after July 1, 1999. Section 12, paragraph (d),
applies to all local sales taxes in effect at the time of, or
imposed after the day of, the enactment of this section.
Section 13 is effective the day following final enactment.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 15. Laws 2001, First Special Session chapter 5,
article 12, section 95, as amended by Laws 2002, chapter 377,
article 3, section 24, is amended to read:
Sec. 95. [REPEALER.]
(a) Minnesota Statutes 2000, sections 297A.61, subdivision
16; 297A.68, subdivision 21; and 297A.71, subdivision 2, are
repealed effective for sales and purchases occurring after June
30, 2001, except that the repeal of section 297A.61, subdivision
16, paragraph (d), is effective for sales and purchases
occurring after July 31, 2001.
(b) Minnesota Statutes 2000, sections 297A.62, subdivision
2, and 297A.64, subdivision 1, are repealed effective for sales
and purchases made after December 31, 2005.
(c) Minnesota Statutes 2000, section 297A.71, subdivision
15, is repealed effective for sales and purchases made after
June 30, 2002.
(d) Minnesota Statutes 2000, section 289A.60, subdivision
15, is repealed effective for liabilities after January 1, 2004.
(e) Minnesota Statutes 2000, section 297A.71, subdivision
16, is repealed effective for sales and purchases occurring
after December 31, 2002.
Sec. 16. Laws 2002, chapter 377, article 3, section 15,
the effective date, is amended to read:
[EFFECTIVE DATE.] This section is effective for sales made
after August 31, 2002, and on or before December 31, 2003 2004.
Sec. 17. [STATE CONVENTION CENTER.]
Subdivision 1. [EXEMPTION.] Building materials, supplies,
or equipment used or consumed in constructing or equipping
improvements to a state convention center located in a city
outside the metropolitan area as defined in section 473.121,
subdivision 2, and governed by an 11-person board of which four
are appointed by the governor are exempt if the improvements are
financed in whole or in part by nonstate resources including,
but not limited to, revenue or general obligations issued by the
state convention center board of the city in which the center is
located. This exemption applies regardless of whether the items
are purchased by the owner or by a contractor, subcontractor, or
builder.
Subd. 2. [LEGISLATIVE INTENT.] This section is intended to
clarify the original intent of Minnesota Statutes, section
297A.71, subdivision 2.
[EFFECTIVE DATE.] This section is effective the day
following final enactment and applies retroactively to sales and
purchases made after June 30, 1995, and before July 1, 2001.
Sec. 18. [LODGING TAX; ITASCA COUNTY AUTHORITY.]
Notwithstanding Minnesota Statutes, section 469.190,
subdivisions 1 and 4, no town located in Itasca county may
impose the local lodging tax authorized in Minnesota Statutes,
section 469.190, but the county of Itasca may impose the local
lodging tax authorized in that section in all towns and
unorganized territories within the county. Any existing taxes
imposed by a town in that county will expire the day that a
county tax is imposed under this section.
If the county board exercises the authority under this
section, it must determine by resolution that imposition of the
tax is in the county's interest. The resolution is subject to
the same notice and reverse referendum requirements that would
apply under Minnesota Statutes, section 469.190, subdivision 5,
if the county was only imposing the tax in an unorganized
territory. The provisions of Minnesota Statutes, section
469.190, subdivisions 2, 3, 6, and 7, also apply to a tax
imposed under this section.
[EFFECTIVE DATE.] This section is effective the day after
the governing body of Itasca county and its chief clerical
officer comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
Sec. 19. [STUDY OF LOCAL SALES TAX.]
(a) The commissioner of revenue shall study the local sales
taxes in Minnesota and provide a written report and
recommendations to the legislature, in compliance with Minnesota
Statutes, sections 3.195 and 3.197, by February 1, 2004. The
study must report on:
(1) the authorized uses of revenue from local sales taxes
in effect, and the proposed uses of revenue from local sales
taxes recently proposed but not enacted;
(2) the local approval requirements for local sales taxes;
(3) the duration of local sales taxes and whether the full
duration authorized in law was necessary to provide sufficient
revenue for the authorized uses of the local sales tax;
(4) if the authorized uses of the local sales tax revenues
are regional in nature or limited in benefit to the jurisdiction
in which the tax is imposed;
(5) the estimated portion of revenue raised through the
local sales taxes that comes from (i) residents of the
jurisdiction in which the tax is imposed; (ii) Minnesota
residents who live outside the jurisdiction; and (iii)
non-Minnesota residents;
(6) the ability of jurisdictions to raise revenue by other
means, including the local property tax, and the extent to which
the jurisdictions assess property taxes in comparison to other
similar jurisdictions, and the state average, expressed in terms
of levy as a percent of adjusted net tax capacity;
(7) how jurisdictions that do not impose local sales taxes
raise revenue to fund projects similar to those funded through
local sales taxes; and
(8) the compatibility of local sales taxes with the
policies underlying the streamlined sales tax project.
(b) The study must make recommendations on:
(1) the appropriate role of local sales taxes as a part of
Minnesota's state and local revenue system, including:
(i) the appropriate uses of local sales taxes; and
(ii) whether local sales taxes should be limited to
jurisdictions that do not meet minimum thresholds of raising
revenue through other means, including local property tax;
(2) criteria to be used in evaluating local sales tax
proposals, designed to direct the use of local sales taxes
toward:
(i) projects that are regional in nature;
(ii) projects that require capital expenditures; and
(iii) projects in jurisdictions with inadequate fiscal
capacity to fund the projects through other means; and
(3) the feasibility of authorizing the commissioner of
revenue to approve or deny local sales taxes proposals based on
a uniform set of criteria, including the advisability of
requiring local approval by referendum or revocation by reverse
referendum, and if the referendum should be a criterion
necessary for a proposal to be considered for authorization or
should occur after authorization but as a condition of the tax
being implemented.
Sec. 20. [REPEALER.]
(a) Minnesota Statutes 2002, section 37.13, subdivision 2,
is repealed effective July 1, 2003, but the repealer does not
apply to sales taxes retained on sales occurring before July 1,
2003.
(b) Minnesota Statutes 2002, section 325E.112, subdivision
2a, is repealed effective July 1, 2003.
ARTICLE 9
SPECIAL TAXES
Section 1. Minnesota Statutes 2002, section 62J.692,
subdivision 4, is amended to read:
Subd. 4. [DISTRIBUTION OF FUNDS.] (a) The commissioner
shall annually distribute medical education funds to all
qualifying applicants based on the following criteria:
(1) total medical education funds available for
distribution;
(2) total number of eligible trainee FTEs in each clinical
medical education program; and
(3) the statewide average cost per trainee as determined by
the application information provided in the first year of the
biennium, by type of trainee, in each clinical medical education
program.
(b) Funds distributed shall not be used to displace current
funding appropriations from federal or state sources.
(c) Funds shall be distributed to the sponsoring
institutions indicating the amount to be distributed to each of
the sponsor's clinical medical education programs based on the
criteria in this subdivision and in accordance with the
commissioner's approval letter. Each clinical medical education
program must distribute funds to the training sites as specified
in the commissioner's approval letter. Sponsoring institutions,
which are accredited through an organization recognized by the
department of education or the Centers for Medicare and Medicaid
Services, may contract directly with training sites to provide
clinical training. To ensure the quality of clinical training,
those accredited sponsoring institutions must:
(1) develop contracts specifying the terms, expectations,
and outcomes of the clinical training conducted at sites; and
(2) take necessary action if the contract requirements are
not met. Action may include the withholding of payments under
this section or the removal of students from the site.
(d) Any funds not distributed in accordance with the
commissioner's approval letter must be returned to the medical
education and research fund within 30 days of receiving notice
from the commissioner. The commissioner shall distribute
returned funds to the appropriate training sites in accordance
with the commissioner's approval letter.
(e) The commissioner shall distribute by June 30 of each
year an amount equal to the funds transferred under section
62J.694, subdivision 2a, paragraph (b) subdivision 10, plus five
percent interest to the University of Minnesota board of regents
for the costs of the academic health center as specified under
section 62J.694, subdivision 2a, paragraph (a) instructional
costs of health professional programs at the academic health
center and for interdisciplinary academic initiatives within the
academic health center.
(f) A maximum of $150,000 of the funds dedicated to the
commissioner under section 297F.10, subdivision 1, paragraph
(b), clause (2), may be used by the commissioner for
administrative expenses associated with implementing this
section.
Sec. 2. Minnesota Statutes 2002, section 62J.692, is
amended by adding a subdivision to read:
Subd. 10. [TRANSFERS FROM UNIVERSITY OF MINNESOTA.] Of the
funds dedicated to the academic health center under section
297F.10, subdivision 1, paragraph (b), clause (1), $4,850,000
shall be transferred annually to the commissioner of health no
later than April 15 of each year for distribution under
subdivision 4, paragraph (e).
Sec. 3. Minnesota Statutes 2002, section 270.60,
subdivision 4, is amended to read:
Subd. 4. [PAYMENTS TO COUNTIES.] (a) The commissioner
shall pay to a county in which an Indian gaming casino is
located:
(1) ten percent of the state share of all taxes generated
from activities on reservations and collected under a tax
agreement under this section with the tribal government for the
reservation located in the county; or
(2) five percent of excise taxes collected by the state
that are determined by the department of revenue to have been
generated from activities on a reservation located in the
county, the tribal government of which does not have a tax
agreement under this section and did not have a tax agreement on
June 30, 2003.
If the tribe has casinos located in more than one county,
the payment must be divided equally among the counties in which
the casinos are located.
(b) The commissioner shall make the payments required under
this subdivision by February 28 of the year following the year
the taxes are collected.
(c) An amount sufficient to make the payments authorized by
this subdivision is annually appropriated from the general fund
to the commissioner.
[EFFECTIVE DATE.] This section is effective for taxes
collected after June 30, 2003.
Sec. 4. Minnesota Statutes 2002, section 287.12, is
amended to read:
287.12 [TAXES, HOW APPORTIONED.]
(a) All taxes paid to the county treasurer under the
provisions of sections 287.01 to 287.12 must be apportioned, 97
percent to the general fund of the state, and three percent to
the county revenue fund.
(b) On or before the 20th day of each month the county
treasurer shall determine and pay to the commissioner of revenue
for deposit in the state treasury and credit to the general fund
the state's portion of the receipts from the mortgage registry
tax during the preceding month subject to the electronic payment
requirements of section 270.771. The county treasurer shall
provide any related reports requested by the commissioner of
revenue.
(c) Counties must remit the state's portion of the June
receipts collected through June 25 and the estimated state's
portion of the receipts to be collected during the remainder of
the month to the commissioner of revenue two business days
before June 30 of each year. The remaining amount of the June
receipts is due on August 20.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
Sec. 5. Minnesota Statutes 2002, section 287.29,
subdivision 1, is amended to read:
Subdivision 1. [APPOINTMENT AND PAYMENT OF TAX PROCEEDS.]
(a) The proceeds of the taxes levied and collected under
sections 287.21 to 287.39 must be apportioned, 97 percent to the
general fund of the state, and three percent to the county
revenue fund.
(b) On or before the 20th day of each month, the county
treasurer shall determine and pay to the commissioner of revenue
for deposit in the state treasury and credit to the general fund
the state's portion of the receipts for deed tax from the
preceding month subject to the electronic transfer requirements
of section 270.771. The county treasurer shall provide any
related reports requested by the commissioner of revenue.
(c) Counties must remit the state's portion of the June
receipts collected through June 25 and the estimated state's
portion of the receipts to be collected during the remainder of
the month to the commissioner of revenue two business days
before June 30 of each year. The remaining amount of the June
receipts is due on August 20.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
Sec. 6. Minnesota Statutes 2002, section 287.31, is
amended by adding a subdivision to read:
Subd. 3. [UNDERPAYMENTS OF ACCELERATED PAYMENT OF JUNE TAX
RECEIPTS.] If a county fails to timely remit the state portion
of the actual June tax receipts at the time required by section
287.12 or 287.29, the county shall pay a penalty equal to ten
percent of the state portion of actual June receipts less the
amount remitted to the commissioner of revenue in June. The
penalty must not be imposed, however, if the amount remitted in
June equals either:
(1) 90 percent of the state's portion of the preceding
May's receipts; or
(2) 90 percent of the average monthly amount of the state's
portion for the previous calendar year.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
Sec. 7. Minnesota Statutes 2002, section 297F.09,
subdivision 1, is amended to read:
Subdivision 1. [MONTHLY RETURN; CIGARETTE DISTRIBUTOR.] On
or before the 18th day of each calendar month, a distributor
with a place of business in this state shall file a return with
the commissioner showing the quantity of cigarettes manufactured
or brought in from outside the state or purchased during the
preceding calendar month and the quantity of cigarettes sold or
otherwise disposed of in this state and outside this state
during that month. A licensed distributor outside this state
shall in like manner file a return showing the quantity of
cigarettes shipped or transported into this state during the
preceding calendar month. Returns must be made in the form and
manner prescribed by the commissioner and must contain any other
information required by the commissioner. The return must be
accompanied by a remittance for the full unpaid tax liability
shown by it. The return for the May liability and 85 percent of
the estimated June liability is due on the date payment of the
tax is due.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
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. The return for the May liability and 85 percent
of the estimated June liability is due on the date payment of
the tax is due.
[EFFECTIVE DATE.] The part of this section abolishing the
1.5 percent reimbursement is effective for sales made after June
30, 2003. The rest of this section is effective January 1, 2004.
Sec. 9. Minnesota Statutes 2002, section 297F.09, is
amended by adding a subdivision to read:
Subd. 10. [ACCELERATED TAX PAYMENT; CIGARETTE OR TOBACCO
PRODUCTS DISTRIBUTOR.] A cigarette or tobacco products
distributor having a liability of $120,000 or more during a
fiscal year ending June 30, shall remit the June liability for
the next year in the following manner:
(a) Two business days before June 30 of the year, the
distributor shall remit the actual May liability and 85 percent
of the estimated June liability to the commissioner and file the
return in the form and manner prescribed by the commissioner.
(b) On or before August 18 of the year, the distributor
shall submit a return showing the actual June liability and pay
any additional amount of tax not remitted in June. A penalty is
imposed equal to ten percent of the amount of June liability
required to be paid in June, less the amount remitted in June.
However, the penalty is not imposed if the amount remitted in
June equals the lesser of:
(1) 85 percent of the actual June liability; or
(2) 85 percent of the preceding May's liability.
[EFFECTIVE DATE.] This section is effective for taxpayers
having a liability of $120,000 or more during the fiscal year
ending June 30, 2003, and each fiscal year thereafter, and for
accelerated payments becoming due in 2004 and thereafter.
Sec. 10. Minnesota Statutes 2002, section 297F.10,
subdivision 1, as amended by Laws 2003, chapter 128, article 1,
section 155, if enacted, is amended to read:
Subdivision 1. [TAX AND USE TAX ON CIGARETTES.] Revenue
received from cigarette taxes, as well as related penalties,
interest, license fees, and miscellaneous sources of revenue
shall be deposited by the commissioner in the state treasury and
credited as follows:
(a) first to the general obligation special tax bond debt
service account in each fiscal year the amount required to
increase the balance on hand in the account on each December 1
to an amount equal to the full amount of principal and interest
to come due on all outstanding bonds whose debt service is
payable primarily from the proceeds of the tax to and including
the second following July 1; and
(b) after the requirements of paragraph (a) have been met,
(1) the revenue produced by 3.25 mills of the tax on
cigarettes weighing not more than three pounds a thousand and
6.5 mills of the tax on cigarettes weighing more than three
pounds a thousand must be credited to the academic health center
special revenue fund hereby created and is annually appropriated
to the board of regents at the University of Minnesota for
academic health center funding at the University of Minnesota;
and
(2) the revenue produced by 1.25 mills of the tax on
cigarettes weighing not more than three pounds a thousand and
2.5 mills of the tax on cigarettes weighing more than three
pounds a thousand must be credited to the medical education and
research costs account hereby created in the special revenue
fund and is annually appropriated to the commissioner of health
for distribution under section 62J.692, subdivision 4; and
(3) the balance of the revenues derived from taxes,
penalties, and interest (under this chapter) and from license
fees and miscellaneous sources of revenue shall be credited to
the general fund.
[EFFECTIVE DATE.] This section is effective for all
revenues received after June 30, 2003.
Sec. 11. Minnesota Statutes 2002, section 297G.01, is
amended by adding a subdivision to read:
Subd. 21. [LOW-ALCOHOL DAIRY COCKTAIL.] "Low-alcohol dairy
cocktail" means a premixed cocktail, or any other product except
liqueur-filled candy, that:
(1) consists primarily of milk products;
(2) contains distilled spirits;
(3) is drinkable as a beverage or is promoted as an
alcoholic product; and
(4) contains less than 3.2 percent alcohol by volume.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2003.
Sec. 12. Minnesota Statutes 2002, section 297G.03,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.]
The following excise tax is imposed on all distilled spirits and
wine manufactured, imported, sold, or possessed in this state:
Standard Metric
(a) Distilled spirits, $5.03 per gallon $1.33 per liter
liqueurs, cordials,
and specialties regardless
of alcohol content
(excluding ethyl alcohol)
(b) Wine containing $ .30 per gallon $ .08 per liter
14 percent or less
alcohol by volume
(except cider as defined
in section 297G.01,
subdivision 3a)
(c) Wine containing $ .95 per gallon $ .25 per liter
more than 14 percent
but not more than 21
percent alcohol by volume
(d) Wine containing more $1.82 per gallon $ .48 per liter
than 21 percent but not
more than 24 percent
alcohol by volume
(e) Wine containing more $3.52 per gallon $ .93 per liter
than 24 percent alcohol
by volume
(f) Natural and $1.82 per gallon $ .48 per liter
artificial sparkling wines
containing alcohol
(g) Cider as defined in $ .15 per gallon $ .04 per liter
section 297G.01,
subdivision 3a
(h) Low alcohol dairy $ .08 per gallon $ .02 per liter
cocktails
In computing the tax on a package of distilled spirits or
wine, a proportional tax at a like rate on all fractional parts
of a gallon or liter must be paid, except that the tax on a
fractional part of a gallon less than 1/16 of a gallon is the
same as for 1/16 of a gallon.
[EFFECTIVE DATE.] This section is effective for sales made
after June 30, 2003.
Sec. 13. Minnesota Statutes 2002, section 297G.09, is
amended by adding a subdivision to read:
Subd. 9. [ACCELERATED TAX PAYMENT; PENALTY.] A person
liable for tax under this chapter having a liability of $120,000
or more during a fiscal year ending June 30, shall remit the
June liability for the next year in the following manner:
(a) Two business days before June 30 of the year, the
taxpayer shall remit the actual May liability and 85 percent of
the estimated June liability to the commissioner and file the
return in the form and manner prescribed by the commissioner.
(b) On or before August 18 of the year, the taxpayer shall
submit a return showing the actual June liability and pay any
additional amount of tax not remitted in June. A penalty is
imposed equal to ten percent of the amount of June liability
required to be paid in June less the amount remitted in June.
However, the penalty is not imposed if the amount remitted in
June equals the lesser of:
(1) 85 percent of the actual June liability; or
(2) 85 percent of the preceding May liability.
[EFFECTIVE DATE.] This section is effective for taxpayers
having a liability of $120,000 or more during the fiscal year
ending June 30, 2003, and each fiscal year thereafter, and for
accelerated payments becoming due in 2004 and thereafter.
Sec. 14. Minnesota Statutes 2002, section 349.16, is
amended by adding a subdivision to read:
Subd. 11. [AGREEMENT TO PAY TAXES.] An organization which
is recognized by federal law, regulation, or other ruling as a
quasi-governmental organization that would otherwise be exempt
from one or more taxes under chapter 297E must agree to pay all
taxes under chapter 297E on lawful gambling conducted by the
organization as a condition of receiving or renewing a license
or premises permit.
ARTICLE 10
LOCAL ECONOMIC DEVELOPMENT
Section 1. Minnesota Statutes 2002, section 469.169, is
amended by adding a subdivision to read:
Subd. 16. [ADDITIONAL BORDER CITY ALLOCATIONS.] (a) In
addition to tax reductions authorized in subdivisions 7 to 15,
the commissioner shall allocate $750,000 for tax reductions to
border city enterprise zones in cities located on the western
border of the state. The commissioner shall make allocations to
zones in cities on the western border on a per capita basis.
Allocations made under this subdivision may be used for tax
reductions as provided in section 469.171, or for other offsets
of taxes imposed on or remitted by businesses located in the
enterprise zone, but only if the municipality determines that
the granting of the tax reduction or offset is necessary in
order to retain a business within or attract a business to the
zone. Any portion of the allocation provided in this paragraph
may alternatively be used for tax reductions under section
469.1732 or 469.1734.
(b) The commissioner shall allocate $750,000 for tax
reductions under section 469.1732 or 469.1734 to cities with
border city enterprise zones located on the western border of
the state. The commissioner shall allocate this amount among
the cities on a per capita basis. Any portion of the allocation
provided in this paragraph may alternatively be used for tax
reductions as provided in section 469.171.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2002, section 469.174,
subdivision 6, as amended by Laws 2003, chapter 127, article 10,
section 2, is amended to read:
Subd. 6. [MUNICIPALITY.] "Municipality" means the city,
however organized, 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
(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 or special law,
"municipality" 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; or
(4) a qualifying disaster area, as defined in subdivision
10b.
(b) For purposes of this subdivision, "structurally
substandard" shall mean containing defects in structural
elements or a combination of deficiencies in essential utilities
and facilities, light and ventilation, fire protection including
adequate egress, layout and condition of interior partitions, or
similar factors, which defects or deficiencies are of sufficient
total significance to justify substantial renovation or
clearance.
(c) A building is not structurally substandard if it is in
compliance with the building code applicable to new buildings or
could be modified to satisfy the building code at a cost of less
than 15 percent of the cost of constructing a new structure of
the same square footage and type on the site. The municipality
may find that a building is not disqualified as structurally
substandard under the preceding sentence on the basis of
reasonably available evidence, such as the size, type, and age
of the building, the average cost of plumbing, electrical, or
structural repairs, or other similar reliable evidence. The
municipality may not make such a determination without an
interior inspection of the property, but need not have an
independent, expert appraisal prepared of the cost of repair and
rehabilitation of the building. An interior inspection of the
property is not required, if the municipality finds that (1) the
municipality or authority is unable to gain access to the
property after using its best efforts to obtain permission from
the party that owns or controls the property; and (2) the
evidence otherwise supports a reasonable conclusion that the
building is structurally substandard. Items of evidence that
support such a conclusion include recent fire or police
inspections, on-site property tax appraisals or housing
inspections, exterior evidence of deterioration, or other
similar reliable evidence. Written documentation of the
findings and reasons why an interior inspection was not
conducted must be made and retained under section 469.175,
subdivision 3, clause (1).
(d) A parcel is deemed to be occupied by a structurally
substandard building for purposes of the finding under paragraph
(a) if all of the following conditions are met:
(1) the parcel was occupied by a substandard building
within three years of the filing of the request for
certification of the parcel as part of the district with the
county auditor;
(2) the substandard building was demolished or removed by
the authority or the demolition or removal was financed by the
authority or was done by a developer under a development
agreement with the authority;
(3) the authority found by resolution before the demolition
or removal that the parcel was occupied by a structurally
substandard building and that after demolition and clearance the
authority intended to include the parcel within a district; and
(4) upon filing the request for certification of the tax
capacity of the parcel as part of a district, the authority
notifies the county auditor that the original tax capacity of
the parcel must be adjusted as provided by section 469.177,
subdivision 1, paragraph (h).
(e) For purposes of this subdivision, a parcel is not
occupied by buildings, streets, utilities, paved or gravel
parking lots, or other 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.] This section is effective for districts
for which the request for certification is made after the day
following final enactment.
Sec. 4. Minnesota Statutes 2002, section 469.174, is
amended by adding a subdivision to read:
Subd. 10b. [QUALIFIED DISASTER AREA.] A "qualified
disaster area" is an area that meets the following requirements:
(1) parcels consisting of 70 percent of the area of the
district were occupied by buildings, streets, utilities, paved
or gravel parking lots, or other similar structures immediately
before the disaster or emergency;
(2) the area of the district was subject to a disaster or
emergency, as defined in section 273.123, subdivision 1, within
the 18-month period ending on the day the request for
certification of the district is made; and
(3) 50 percent or more of the buildings in the area have
suffered substantial damage as a result of the disaster or
emergency.
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification is made after the day
following final enactment.
Sec. 5. Minnesota Statutes 2002, section 469.1763,
subdivision 2, is amended to read:
Subd. 2. [EXPENDITURES OUTSIDE DISTRICT.] (a) For each tax
increment financing district, an amount equal to at least 75
percent of the total revenue derived from tax increments paid by
properties in the district must be expended on activities in the
district or to pay bonds, to the extent that the proceeds of the
bonds were used to finance activities in the district or to pay,
or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the
request for certification was made after June 30, 1995, the
in-district percentage for purposes of the preceding sentence is
80 percent. Not more than 25 percent of the total revenue
derived from tax increments paid by properties in the district
may be expended, through a development fund or otherwise, on
activities outside of the district but within the defined
geographic area of the project except to pay, or secure payment
of, debt service on credit enhanced bonds. For districts, other
than redevelopment districts for which the request for
certification was made after June 30, 1995, the pooling
percentage for purposes of the preceding sentence is 20
percent. The revenue derived from tax increments for the
district that are expended on costs under section 469.176,
subdivision 4h, paragraph (b), may be deducted first before
calculating the percentages that must be expended within and
without the district.
(b) In the case of a housing district, a housing project,
as defined in section 469.174, subdivision 11, is an activity in
the district.
(c) All administrative expenses are for activities outside
of the district, except that if the only expenses for activities
outside of the district under this subdivision are for the
purposes described in paragraph (d), administrative expenses
will be considered as expenditures for activities in the
district.
(d) The authority may elect, in the tax increment financing
plan for the district, to increase by up to ten percentage
points the permitted amount of expenditures for activities
located outside the geographic area of the district under
paragraph (a). As permitted by section 469.176, subdivision 4k,
the expenditures, including the permitted expenditures under
paragraph (a), need not be made within the geographic area of
the project. Expenditures that meet the requirements of this
paragraph are legally permitted expenditures of the district,
notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
To qualify for the increase under this paragraph, the
expenditures must:
(1) be used exclusively to assist housing that meets the
requirement for a qualified low-income building, as that term is
used in section 42 of the Internal Revenue Code;
(2) not exceed the qualified basis of the housing, as
defined under section 42(c) of the Internal Revenue Code, less
the amount of any credit allowed under section 42 of the
Internal Revenue Code; and
(3) be used to:
(i) acquire and prepare the site of the housing;
(ii) acquire, construct, or rehabilitate the housing; or
(iii) make public improvements directly related to the
housing.
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification was made after April 30,
1990.
Sec. 6. Minnesota Statutes 2002, section 469.1763,
subdivision 4, is amended to read:
Subd. 4. [USE OF REVENUES FOR DECERTIFICATION.] (a) In
each year beginning with the sixth year following certification
of the district, if the applicable in-district percent of the
revenues derived from tax increments paid by properties in the
district that remain after exceeds the amount of expenditures
that have been made for costs permitted under subdivision 3, an
amount equal to the difference between the in-district percent
of the revenues derived from tax increments paid by properties
in the district and the amount of expenditures that have been
made for costs permitted under subdivision 3 must be used and
only used to pay or defease the following or be set aside to pay
the following:
(1) outstanding bonds, as defined in subdivision 3,
paragraphs (a), clause (2), and (b);
(2) contracts, as defined in subdivision 3, paragraph (a),
clauses (3) and (4); or
(3) credit enhanced bonds to which the revenues derived
from tax increments are pledged, but only to the extent that
revenues of the district for which the credit enhanced bonds
were issued are insufficient to pay the bonds and to the extent
that the increments from the applicable pooling percent share
for the district are insufficient.
(b) When the outstanding bonds have been defeased and when
sufficient money has been set aside to pay contractual
obligations as defined in subdivision 3, paragraph (a), clauses
(3) and (4), the district must be decertified and the pledge of
tax increment discharged.
Sec. 7. 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.
(g) For a redevelopment district qualifying under section
469.174, subdivision 10, paragraph (a), clause (4), as a
qualified disaster area, the auditor shall certify the value of
the land as the original tax capacity for any parcel in the
district that contains a building that suffered substantial
damage as a result of the disaster or emergency.
[EFFECTIVE DATE.] This section is effective for districts
for which the request for certification is made after the day
following final enactment.
Sec. 8. [469.1794] [DURATION EXTENSION TO OFFSET
DEFICITS.]
Subdivision 1. [AUTHORITY.] Subject to the conditions and
limitations imposed by this section, an authority may, by
resolution, extend the duration limit under section 469.176,
subdivision 1b, 1c, 1e, or 1g, that applies to a preexisting
district by up to the maximum number of years permitted under
subdivision 5, plus any amount authorized by the commissioner of
revenue under subdivision 6.
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Extended district" means a tax increment financing
district whose duration limit is extended under this section.
(c) "Preexisting district" has the meaning given in section
469.1792, subdivision 2.
(d) "Preexisting obligation" has the meaning given in
section 469.1792, subdivision 2.
(e) "Qualifying obligation" means:
(1) a preexisting obligation that is:
(i) a general obligation bond of the municipality;
(ii) a general obligation bond of the authority;
(iii) a revenue bond of the authority to which other
revenues or money of the authority in addition to tax increments
are pledged to pay;
(iv) an interfund loan, including an advance or payment
made by the municipality or authority after June 1, 2002, to pay
an obligation listed in items (i) to (iii);
(v) an obligation assumed by a developer before January 1,
2001, to repay a general obligation bond issued by a
municipality to fund cleanup and development activities, if the
developer assumed the obligation more than five years after the
issuance of the bonds; or
(2) a bond issued to refinance a preexisting obligation
under clause (1).
Subd. 3. [PRECONDITIONS.] Before an authority may extend
the duration of district under this section, the following
conditions must be met with regard to the district:
(1) the original local tax rate under section 469.177,
subdivision 1a, does not apply under an election made under
section 469.1792, subdivision 3, or under other operation of
law;
(2) for a district in the metropolitan area or taconite tax
relief area, the fiscal disparities contribution is computed
under section 469.177, subdivision 3, paragraph (a);
(3) the municipality has transferred any available
increments in other districts to pay qualified obligations of
the district or other districts in the municipality under
section 469.1763, subdivision 6; and
(4) the authority finds that, taking into account all of
the increments that are available to pay qualifying obligations
for the district, the increments from the district will be
insufficient to pay the amount of qualifying obligations and
that the insufficiency is a result of (i) the changes in the
class rates and (ii) elimination of the state-determined general
education property tax levy under Laws 2001, First Special
Session chapter 5.
Subd. 4. [NOTICE; HEARING; AND APPROVALS.] The authority
may extend the duration of a district under this section only
after the municipality has approved the extension after
providing public notice and holding a hearing in the manner
provided under section 469.175, subdivision 3.
Subd. 5. [MAXIMUM EXTENSION.] (a) The maximum extension
for a district under this subdivision equals the lesser of:
(1) four years; or
(2) the tax reform percentage for the district, determined
under paragraph (b), multiplied by the remaining duration of the
district rounded to the nearest whole number. Fractions in
excess of one-third are rounded up.
(b) The tax reform percentage for the district, as
estimated by the county auditor, equals:
(1)(i) the total taxes paid by the original tax capacity
for the district for taxes payable in 2001, minus
(ii) the average of the total taxes paid by the original
tax capacity for the district for taxes payable in 2002 and in
2003, divided by
(2) the total taxes paid by the original tax capacity for
the district for taxes payable in 2001.
(c) In the resolution approving the extension, the
municipality may elect to treat all preexisting obligations as
qualified obligations for purposes of this section. If the
municipality makes an election under this paragraph, the maximum
duration is reduced by one-half of the amount otherwise
permitted under paragraph (a).
(d) The remaining duration of a district is the number of
calendar years, beginning after December 31, 2001, in which the
district may collect increment under its duration limit under
section 469.176, subdivision 1b, 1c, 1e, or 1g, or a special law
approved before January 1, 2002, as applicable.
(e) For purposes of this subdivision, "taxes" exclude taxes
levied against market value, rather than tax capacity, and the
state general tax under section 275.025.
Subd. 6. [COMMISSIONER AUTHORITY.] (a) If the municipality
determines that the extension permitted under subdivision 5 will
not provide sufficient revenue to pay in full the amount of
qualifying obligations, the municipality may apply to the
commissioner of revenue for an additional duration extension.
The commissioner may authorize an extension of the duration of
the district of up to two years after determining that:
(1) the insufficiency of revenues to pay the qualifying
obligations, which will be offset by the additional extension of
the duration limit, result from (i) the changes in the class
rates and (ii) elimination of the state-determined general
education property tax levy under Laws 2001, First Special
Session chapter 5;
(2) the municipality has or is transferring all available
increments from other preexisting districts and after August 1,
2001, has not entered into new obligations or authorized new
spending that reduced the amount of those increments that are
available for transfer to pay qualifying obligations; and
(3) increases in increments over the term of the district
are unlikely to eliminate the insufficiency.
(b) The commissioner may:
(1) establish the form of and time for applications under
this subdivision; and
(2) require the municipality to provide the information
that the commissioner determines is necessary or useful in
evaluating the application.
(c) This subdivision does not apply to a district if the
authority has made an election under subdivision 5, paragraph
(c).
Subd. 7. [LIMITS ON USE OF INCREMENTS.] (a) Tax increments
of an extended district may only be used to pay preexisting
obligations of the district and administrative expenses,
effective upon the final required approval of the extension
under this section. All tax increments that are attributable to
an extension of the duration of a district under this section
must be used only to pay qualified obligations of the district.
If increments from a district subject to this subdivision are
pledged to pay preexisting obligations that are not qualified
obligations, increments received under the duration limit,
determined without regard to this section, must be used to pay
qualified obligations and preexisting obligations that are not
qualified obligations in proportion to their relative shares of
all payments due on all preexisting obligations.
(b) If the authority elects to extend the duration of a
district under this section and if increments from one or more
other districts are pledged to pay preexisting obligations of
the extended district, increments from all of the districts may
only be used to pay preexisting obligations and administrative
expenses.
Subd. 8. [DECERTIFICATION.] An extended district must be
decertified at the end of the first calendar year when
sufficient increments have been received to pay the qualified
obligations of the extended district. Any remaining unspent
increments must be distributed as excess increments under
section 469.176, subdivision 2, clause (4).
[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. 9. Minnesota Statutes 2002, section 474A.061,
subdivision 1, as amended by Laws 2003, chapter 127, article 12,
section 22, 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 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 any unused bonding authority carried forward from a
previous year. 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.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 10. [CITY OF NEW HOPE; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [SPECIAL RULES.] (a) At the election of the
city, upon adoption of the tax increment financing plan for a
district or districts described in this section, the rules
provided under this section apply to each such district.
For purposes of this section, "district" means a
redevelopment or soils condition tax increment financing
district established by the city of New Hope or the economic
development authority of the city within the following area:
beginning at the intersection of Winnetka Avenue N. and the
westerly extension of 58th Avenue N., east on the westerly
extension of 58th Avenue N. to Sumter Avenue N., south on Sumter
Avenue N. to Bass Lake Road, east on Bass Lake Road to the city
boundaries of New Hope and Crystal, MN, south along that city
boundary to St. Raphael Drive, west on St. Raphael Drive to
Sumter Avenue N., south on Sumter Avenue N. to 53rd Avenue N.,
west on 53rd Avenue N. to Winnetka Avenue N., north on Winnetka
Avenue N. to 55th Avenue N., west on 55th Avenue N. to Zealand
Avenue N., north on Zealand Avenue N. to Bass Lake Road, east on
Bass Lake Road to Yukon Avenue N., north on Yukon Avenue N. to
Meadow Lake Road E., east on Meadow Lake Road E. to the
intersection with the west property line of New Hope golf
course, south along the west property line of New Hope golf
course to Bass Lake Road, east on Bass Lake Road to Winnetka
Avenue N., north on Winnetka Avenue N. to the point of
beginning. The total number of parcels that may be included
within all such redevelopment or soils condition tax increment
financing districts must not exceed 131 and the total acreage,
including roads, easements, and rights-of-way, must not exceed
130 acres.
(b) The five-year rule under Minnesota Statutes, section
469.1763, subdivision 3, applies as if the limit is nine years.
(c) The limitations on expenditure of increment outside of
the district under Minnesota Statutes, section 469.1763,
subdivision 2, apply as follows:
(1) administrative expenses are treated as expenditures for
activities within the district;
(2) the percentage of increments that may be spent on
activities outside of the district under Minnesota Statutes,
section 469.1763, subdivision 2, is increased by 15 percentage
points;
(3) increments spent outside of the district may only be
spent on costs, such as property acquisition and public
improvements, that are fairly apportioned to parcels on which
the ultimate use is planned for housing; and
(4) increments may only be expended on improvements within
the area identified in paragraph (a).
(d) The requirements for qualifying a redevelopment
district under Minnesota Statutes, section 469.174, subdivision
10, do not apply to the parcels identified as 08-118-21-22-0001,
08-118-21-33-0008, 08-118-21-33-0009, 08-118-21-33-0010,
08-118-21-33-0011, 08-118-21-33-0013, 08-118-21-33-0018,
08-118-21-33-0019, 08-118-21-33-0025, 08-118-21-33-0027,
08-118-21-33-0029, 08-118-21-33-0082, and 08-118-21-33-0087,
which are deemed substandard for the purpose of qualifying the
district as a redevelopment district.
Subd. 2. [EXPIRATION.] (a) The exception under subdivision
1, paragraph (c), from the limitations of Minnesota Statutes,
section 469.1763, subdivision 2, expires 20 years after the
receipt of the first increment from a district for which the
city has elected that this section applies.
(b) The authority to approve tax increment financing plans
to establish a tax increment financing district subject to this
section expires on December 31, 2013.
Subd. 3. [EFFECTIVE DATE.] This section is effective upon
approval by the governing bodies of the city of New Hope and
Hennepin county and upon compliance by the city with Minnesota
Statutes, section 645.021, subdivision 3.
Sec. 11. [EFFECTIVE DATE.]
Unless specifically provided otherwise in that article,
Laws 2003, chapter 127, article 12, is effective the day
following the final enactment of Laws 2003, chapter 127.
ARTICLE 11
MISCELLANEOUS
Section 1. Minnesota Statutes 2002, section 3.986,
subdivision 4, is amended to read:
Subd. 4. [POLITICAL SUBDIVISION.] A "political
subdivision" is a school district, county, or home rule charter
or statutory city.
[EFFECTIVE DATE.] This section is effective July 1, 2003.
Sec. 2. Minnesota Statutes 2002, section 16A.152,
subdivision 1, is amended to read:
Subdivision 1. [CASH FLOW ACCOUNT ESTABLISHED.] (a) A cash
flow account is created in the general fund in the state
treasury. Beginning July 1, 2003, the commissioner of finance
shall restrict part or all of the balance before reserves in the
general fund as may be necessary to fund the cash flow account,
up to $350,000,000.
(b) The Amounts restricted are transferred to in the cash
flow account and shall remain in the account until drawn down
and used to meet cash flow deficiencies resulting from uneven
distribution of revenue collections and required expenditures
during a fiscal year.
Sec. 3. Minnesota Statutes 2002, section 16A.152,
subdivision 1b, is amended to read:
Subd. 1b. [BUDGET RESERVE INCREASE.] On June 30 July 1,
2003, the commissioner of finance shall transfer
$3,900,000 $300,000,000 to the budget reserve account in the
general fund. On June 30 July 1, 2004, the commissioner of
finance shall transfer $12,300,000 $296,000,000 to the budget
reserve account in the general fund. On June 30, 2005, the
commissioner of finance shall transfer $12,000,000 to the budget
reserve account in the general fund. The amounts necessary for
this purpose are appropriated from the general fund.
Sec. 4. Minnesota Statutes 2002, section 16A.152,
subdivision 2, is amended to read:
Subd. 2. [ADDITIONAL REVENUES; PRIORITY.] If on the basis
of a forecast of general fund revenues and expenditures, the
commissioner of finance determines that there will be a positive
unrestricted budgetary general fund balance at the close of the
biennium, the commissioner of finance must allocate money to the
budget reserve until the total amount in the account equals
$653,000,000 the following accounts and purposes in priority
order:
(1) the cash flow account established in subdivision 1
until that account reaches $350,000,000; and
(2) the budget reserve account established in subdivision
1a until that account reaches $653,000,000.
The amounts necessary to meet the requirements of this
section are appropriated from the general fund within two weeks
after the forecast is released.
Sec. 5. Minnesota Statutes 2002, section 18B.07,
subdivision 2, as amended by Laws 2003, chapter 127, article 13,
section 1, 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;
(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, if any, 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.
(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.
(g) A person may not apply a pesticide in a manner so as to
expose a worker in an immediately adjacent, open field.
Sec. 6. [270.30] [TAX PREPARATION SERVICES.]
Subdivision 1. [SCOPE.] (a) This section applies to a
person who offers, provides, or facilitates the provision of
refund anticipation loans, as part of or in connection with the
provision of tax preparation services.
(b) This section does not apply to:
(1) a tax preparer who provides tax preparation services
for fewer than six clients in a calendar year;
(2) the provision by a person of tax preparation services
to a spouse, parent, grandparent, child, or sibling; and
(3) the provision of services by an employee for an
employer.
Subd. 2. [DEFINITIONS.] (a) For purposes of this section,
the following terms have the meanings given.
(b) "Client" means an individual for whom a tax preparer
performs or agrees to perform tax preparation services.
(c) "Person" means an individual, corporation, partnership,
limited liability company, association, trustee, or other legal
entity.
(d) "Refund anticipation loan" means a loan, whether
provided by the tax preparer or another entity such as a
financial institution, in anticipation of, and whose payment is
secured by, a client's federal or state income tax refund or
both.
(e) "Tax preparation services" means services provided for
a fee or other consideration to a client to:
(1) assist with preparing or filing state or federal
individual income tax returns;
(2) assume final responsibility for completed work on an
individual income tax return on which preliminary work has been
done by another; or
(3) offer or facilitate the provision of refund
anticipation loans.
(f) "Tax preparer" or "preparer" means a person providing
tax preparation services subject to this section.
Subd. 3. [STANDARDS OF CONDUCT.] No tax preparer shall:
(1) without good cause fail to promptly, diligently, and
without unreasonable delay complete a client's tax return;
(2) obtain the signature of a client to a tax return or
authorizing document that contains blank spaces to be filled in
after it has been signed;
(3) fail to sign a client's tax return when payment for
services rendered has been made;
(4) fail or refuse to give a client a copy of any document
requiring the client's signature within a reasonable time after
the client signs the document;
(5) fail to retain for at least four years a copy of
individual income tax returns;
(6) fail to maintain a confidential relationship between
themselves and their clients or former clients;
(7) fail to take commercially reasonable measures to
safeguard a client's nonpublic personal information;
(8) make, authorize, publish, disseminate, circulate, or
cause to make, either directly or indirectly, any false,
deceptive, or misleading statement or representation relating to
or in connection with the offering or provision of tax
preparation services;
(9) require a client to enter into a loan arrangement in
order to complete a tax return;
(10) claim credits or deductions on a client's tax return
for which the tax preparer knows or reasonably should know the
taxpayer does not qualify;
(11) charge, offer to accept, or accept a fee based upon a
percentage of an anticipated refund for tax preparation
services;
(12) under any circumstances, withhold or fail to return to
a client a document provided by the client for use in preparing
the client's tax return.
Subd. 4. [REQUIRED DISCLOSURES; REFUND ANTICIPATION
LOANS.] (a) If a tax preparer offers to make or facilitate a
refund anticipation loan to the client, the preparer must make
the disclosures in this subdivision. The disclosures must be
made before or at the same time the preparer offers the refund
anticipation loan to the client.
(b) The tax preparer must provide to a client a written
notice on a single sheet of paper, separate from any other
document or writing, containing:
(1) a legend, centered at the top on the single sheet of
paper, in bold, capital letters, and in 28-point type stating
"NOTICE";
(2) the following verbatim statements:
(i) "This a loan. The annual percentage rate (APR), based
on the estimated payment period, is (fill in the estimated APR)."
(ii) "Your refund will be used to repay the loan. As a
result, the amount of your refund will be reduced by (fill in
appropriate dollar amount) for fees, interest, and other
charges."
(iii) "You can get your refund in about two weeks if you
file your return electronically and have the Internal Revenue
Service send your refund to your own bank account." and
(3) if the client is subject to additional interest when a
refund is delayed, the following verbatim statement must also be
included in the notice: "If you choose to take this loan and
your refund is delayed, you may have to pay additional interest."
(c) All required statements must be in capital and small
font type fonts, in a minimum of 14-point type, with at least a
double space between each line in the statement and four spaces
between each statement.
(d) The notice must be signed and dated by the tax preparer
and the client.
Subd. 5. [ITEMIZED BILL REQUIRED.] A tax preparer must
provide an itemized statement of the charges for services, at
least separately stating the charges for:
(1) return preparation;
(2) electronic filing; and
(3) providing or facilitating a refund anticipation loan.
Subd. 6. [ENFORCEMENT; PENALTIES.] The commissioner may
impose an administrative penalty of not more than $1,000 per
violation of subdivision 3, 4, or 5. The commissioner may
terminate a tax preparer's authority to transmit returns
electronically to the state, if the commissioner determines the
tax preparer engaged in a pattern and practice of violating this
section. Imposition of a penalty under this subdivision is
subject to the contested case procedure under chapter 14. The
commissioner shall collect the penalty in the same manner as the
income tax.
Subd. 7. [ENFORCEMENT; CIVIL ACTIONS.] (a) Any violation
of this section is an unfair, deceptive, and unlawful trade
practice within the meaning of section 8.31.
(b) A client may bring a civil action seeking redress for a
violation of this section in the conciliation or the district
court of the county in which unlawful action is alleged to have
been committed or where the respondent resides or has a
principal place of business.
(c) A district court finding for the plaintiff must award
actual damages, including incidental and consequential damages,
reasonable attorney fees, court costs, and any other equitable
relief as the court considers appropriate.
Subd. 8. [EXEMPTIONS; ENFORCEMENT PROVISIONS.] The
provisions of subdivisions 6 and 7 do not apply to:
(1) an attorney admitted to practice under section 481.01;
(2) a certified public accountant holding a certificate
under section 326A.04 or a person issued a permit to practice
under section 326A.05;
(3) a person designated as a registered accounting
practitioner under Minnesota Rules, part 1105.6600, or a
registered accounting practitioner firm issued a permit under
Minnesota Rules, part 1105.7100;
(4) an enrolled agent who has passed the special enrollment
examination administered by the Internal Revenue Service; and
(5) any fiduciary, or the regular employees of a fiduciary,
while acting on behalf of the fiduciary estate, the testator,
trustor, grantor, or beneficiaries of them.
Sec. 7. 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. A county
may act as a claimant agency on behalf of an ambulance service
licensed under chapter 144E if the ambulance service's primary
service area is located at least in part within the county, but
more than one county may not act as a claimant agency for a
licensed ambulance service with respect to the same debt.
Sec. 8. Minnesota Statutes 2002, section 270A.07,
subdivision 1, is amended to read:
Subdivision 1. [NOTIFICATION REQUIREMENT.] (a) Any
claimant agency, seeking collection of a debt through setoff
against a refund due, shall submit to the commissioner
information indicating the amount of each debt and information
identifying the debtor, as required by section 270A.04,
subdivision 3.
(b) For each setoff of a debt against a refund due, the
commissioner shall charge a fee of $10. The proceeds of fees
shall be allocated by depositing $2.55 of each $10 fee collected
into a department of revenue recapture revolving fund and
depositing the remaining balance into the general fund. The
sums deposited into the revolving fund are appropriated to the
commissioner for the purpose of administering the Revenue
Recapture Act.
(c) For each debt for which a county acts as claimant
agency on behalf of a licensed ambulance service, the county may
charge the ambulance service a fee not to exceed the cost of
administering the claim.
(d) The claimant agency shall notify the commissioner when
a debt has been satisfied or reduced by at least $200 within 30
days after satisfaction or reduction.
Sec. 9. Minnesota Statutes 2002, section 270A.07,
subdivision 2, is amended to read:
Subd. 2. [SETOFF PROCEDURES.] (a) The commissioner, upon
receipt of notification, shall initiate procedures to detect any
refunds otherwise payable to the debtor. When the commissioner
determines that a refund is due to a debtor whose debt was
submitted by a claimant agency, the commissioner shall first
deduct the fee in subdivision 1, paragraph (b), and then remit
the refund or the amount claimed, whichever is less, to the
agency. In transferring or remitting moneys to the claimant
agency, the commissioner shall provide information indicating
the amount applied against each debtor's obligation and the
debtor's address listed on the tax return.
(b) The commissioner shall remit to the debtor the amount
of any refund due in excess of the debt submitted for setoff by
the claimant agency. Notice of the amount setoff and address of
the claimant agency shall accompany any disbursement to the
debtor of the balance of a refund, or shall be sent to the
debtor at the time of setoff if the entire refund is set off.
The notice shall also advise the debtor of the right to contest
the validity of the claim, other than a claim based upon child
support under section 518.171, 518.54, 518.551, or chapter 518C
at a hearing, subject to the restrictions in this paragraph.
The debtor must assert this right by written request to the
claimant agency, which request the claimant agency must receive
within 45 days of the date of the notice. This right does not
apply to (1) issues relating to the validity of the claim that
have been previously raised at a hearing under this section or
section 270A.09; (2) issues relating to the validity of the
claim that were not timely raised by the debtor under section
270A.08, subdivision 2; (3) issues relating to the validity of
the claim that have been previously raised at a hearing
conducted under rules promulgated by the United States
Department of Housing and Urban Development or any public agency
that is responsible for the administration of a low-income
housing program, or that were not timely raised by the debtor
under those rules; or (4) issues relating to the validity of the
claim for which a hearing is discretionary under section
270A.09. The notice shall include an explanation of the right
of the spouse who does not owe the debt to request the claimant
agency to repay the spouse's portion of a joint refund.
Sec. 10. Minnesota Statutes 2002, section 273.1341, as
added by Laws 2003, chapter 127, article 11, section 2, is
amended to read:
273.1341 [TACONITE ASSISTANCE AREA.]
A "taconite assistance area" means the geographic area that
falls within the boundaries of a school district that contains:
(1) 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) 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. 11. Minnesota Statutes 2002, section 276A.01,
subdivision 2, is amended to read:
Subd. 2. [AREA.] "Area" means the territory included
within all tax relief taconite assistance areas defined in
section 273.134, paragraph (b) 273.1341.
Sec. 12. Minnesota Statutes 2002, section 289A.08,
subdivision 16, as amended by Laws 2003, First Special Session
chapter 1, article 2, section 81, is amended to read:
Subd. 16. [TAX REFUND OR RETURN PREPARERS; ELECTRONIC
FILING; PAPER FILING FEE IMPOSED.] (a) A "tax refund or return
preparer," as defined in section 289A.60, subdivision 13,
paragraph (g), who prepared more than 500 Minnesota individual
income tax returns for the prior calendar year must file all
Minnesota individual income tax returns prepared for the current
calendar year by electronic means.
(b) For tax returns prepared for the tax year beginning in
2001, the "500" in paragraph (a) is reduced to 250.
(c) For tax returns prepared for tax years beginning after
December 31, 2001, the "500" in paragraph (a) is reduced to 100.
(d) Paragraph (a) does not apply to a return if the
taxpayer has indicated on the return that the taxpayer did not
want the return filed by electronic means.
(e) For each return that is not filed electronically by a
tax refund or return preparer under this subdivision, including
returns filed under paragraph (d), a paper filing fee of $5 is
imposed upon the preparer. The fee is collected from the
preparer in the same manner as income tax. The fee does not
apply to returns that the commissioner requires to be filed in
paper form.
[EFFECTIVE DATE.] This section is effective for returns
filed for tax years beginning after December 31, 2002.
Sec. 13. Minnesota Statutes 2002, section 290.091,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by
this section, the following terms have the meanings given:
(a) "Alternative minimum taxable income" means the sum of
the following for the taxable year:
(1) the taxpayer's federal alternative minimum taxable
income as defined in section 55(b)(2) of the Internal Revenue
Code;
(2) the taxpayer's itemized deductions allowed in computing
federal alternative minimum taxable income, but excluding:
(i) the charitable contribution deduction under section 170
of the Internal Revenue Code to the extent that the deduction
exceeds 1.3 1.0 percent of adjusted gross income, as defined in
section 62 of the Internal Revenue Code;
(ii) the medical expense deduction;
(iii) the casualty, theft, and disaster loss deduction; and
(iv) the impairment-related work expenses of a disabled
person;
(3) for depletion allowances computed under section 613A(c)
of the Internal Revenue Code, with respect to each property (as
defined in section 614 of the Internal Revenue Code), to the
extent not included in federal alternative minimum taxable
income, the excess of the deduction for depletion allowable
under section 611 of the Internal Revenue Code for the taxable
year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion
deduction for the taxable year);
(4) to the extent not included in federal alternative
minimum taxable income, the amount of the tax preference for
intangible drilling cost under section 57(a)(2) of the Internal
Revenue Code determined without regard to subparagraph (E);
(5) to the extent not included in federal alternative
minimum taxable income, the amount of interest income as
provided by section 290.01, subdivision 19a, clause (1); and
(6) the amount of addition required by section 290.01,
subdivision 19a, clause (7);
less the sum of the amounts determined under the following:
(1) interest income as defined in section 290.01,
subdivision 19b, clause (1);
(2) an overpayment of state income tax as provided by
section 290.01, subdivision 19b, clause (2), to the extent
included in federal alternative minimum taxable income;
(3) the amount of investment interest paid or accrued
within the taxable year on indebtedness to the extent that the
amount does not exceed net investment income, as defined in
section 163(d)(4) of the Internal Revenue Code. Interest does
not include amounts deducted in computing federal adjusted gross
income; and
(4) amounts subtracted from federal taxable income as
provided by section 290.01, subdivision 19b, clause (12).
In the case of an estate or trust, alternative minimum
taxable income must be computed as provided in section 59(c) of
the Internal Revenue Code.
(b) "Investment interest" means investment interest as
defined in section 163(d)(3) of the Internal Revenue Code.
(c) "Tentative minimum tax" equals 6.4 percent of
alternative minimum taxable income after subtracting the
exemption amount determined under subdivision 3.
(d) "Regular tax" means the tax that would be imposed under
this chapter (without regard to this section and section
290.032), reduced by the sum of the nonrefundable credits
allowed under this chapter.
(e) "Net minimum tax" means the minimum tax imposed by this
section.
[EFFECTIVE DATE.] This section is effective for taxable
years beginning after December 31, 2002.
Sec. 14. Minnesota Statutes 2002, section 298.018,
subdivision 1, is amended to read:
Subdivision 1. [WITHIN THE TACONITE TAX RELIEF ASSISTANCE
AREA.] The proceeds of the tax paid under sections 298.015 to
298.017 on minerals and energy resources mined or extracted
within the taconite tax relief assistance area defined in
section 273.134, paragraph (b) 273.1341, shall be allocated as
follows:
(1) five percent to the city or town within which the
minerals or energy resources are mined or extracted;
(2) ten percent to the taconite municipal aid account to be
distributed as provided in section 298.282;
(3) ten percent to the school district within which the
minerals or energy resources are mined or extracted;
(4) 20 percent to a group of school districts comprised of
those school districts wherein the mineral or energy resource
was mined or extracted or in which there is a qualifying
municipality as defined by section 273.134, paragraph (b), in
direct proportion to school district indexes as follows: for
each school district, its pupil units determined under section
126C.05 for the prior school year shall be multiplied by the
ratio of the average adjusted net tax capacity per pupil unit
for school districts receiving aid under this clause as
calculated pursuant to chapters 122A, 126C, and 127A for the
school year ending prior to distribution to the adjusted net tax
capacity per pupil unit of the district. Each district shall
receive that portion of the distribution which its index bears
to the sum of the indices for all school districts that receive
the distributions;
(5) 20 percent to the county within which the minerals or
energy resources are mined or extracted;
(6) 20 percent to St. Louis county acting as the counties'
fiscal agent to be distributed as provided in sections 273.134
to 273.136;
(7) five percent to the iron range resources and
rehabilitation board for the purposes of section 298.22;
(8) five percent to the northeast Minnesota economic
protection trust fund; and
(9) five percent to the taconite environmental protection
fund.
The proceeds of the tax shall be distributed on July 15
each year.
Sec. 15. Minnesota Statutes 2002, section 298.018,
subdivision 2, is amended to read:
Subd. 2. [OUTSIDE THE TACONITE TAX RELIEF ASSISTANCE
AREA.] The proceeds of the tax paid under sections 298.015 to
298.017 on minerals and energy resources mined or extracted
outside of the taconite tax relief assistance area defined in
section 273.134, paragraph (b) 273.1341, shall be deposited in
the general fund.
Sec. 16. Minnesota Statutes 2002, section 298.22,
subdivision 2, is amended to read:
Subd. 2. [IRON RANGE RESOURCES AND REHABILITATION BOARD.]
There is hereby created the iron range resources and
rehabilitation board, consisting of 13 members, five of whom are
state senators appointed by the subcommittee on committees of
the rules committee of the senate, and five of whom are
representatives, appointed by the speaker of the house of
representatives. The remaining members shall be appointed one
each by the senate majority leader, the speaker of the house of
representatives, and the governor and must be nonlegislators who
reside in a tax relief taconite assistance area as defined in
section 273.134, paragraph (b) 273.1341. The members shall be
appointed in January of every odd-numbered year, except that the
initial nonlegislator members shall be appointed by July 1,
1999, and shall serve until January of the next odd-numbered
year. Vacancies on the board shall be filled in the same manner
as the original members were chosen. At least a majority of the
legislative members of the board shall be elected from state
senatorial or legislative districts in which over 50 percent of
the residents reside within a tax relief taconite assistance
area as defined in section 273.134, paragraph (b) 273.1341. All
expenditures and projects made by the commissioner of iron range
resources and rehabilitation shall be consistent with the
priorities established in subdivision 8 and shall first be
submitted to the iron range resources and rehabilitation board
for approval by a majority of the board of expenditures and
projects for rehabilitation purposes as provided by this
section, and the method, manner, and time of payment of all
funds proposed to be disbursed shall be first approved or
disapproved by the board. The board shall biennially make its
report to the governor and the legislature on or before November
15 of each even-numbered year. The expenses of the board shall
be paid by the state from the funds raised pursuant to this
section.
Sec. 17. Minnesota Statutes 2002, section 298.22,
subdivision 8, is amended to read:
Subd. 8. [SPENDING PRIORITY.] In making or approving any
expenditures on programs or projects, the commissioner and the
board shall give the highest priority to programs and projects
that target relief to those areas of the taconite tax
relief taconite assistance area as defined in section 273.134,
paragraph (b) 273.1341, that have the largest percentages of job
losses and population losses directly attributable to the
economic downturn in the taconite industry since the 1980s. The
commissioner and the board shall compare the 1980 population and
employment figures with the 2000 population and employment
figures, and shall specifically consider the job losses in 2000
and 2001 resulting from the closure of LTV Steel Mining Company,
in making or approving expenditures consistent with this
subdivision, as well as the areas of residence of persons who
suffered job loss for which relief is to be targeted under this
subdivision. This subdivision supersedes any other conflicting
provisions of law and does not preclude the commissioner and the
board from making expenditures for programs and projects in
other areas.
Sec. 18. 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 the
taconite assistance area as defined in section 273.134 273.1341,
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) 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.
Sec. 19. Minnesota Statutes 2002, section 298.2211,
subdivision 2, is amended to read:
Subd. 2. [AREA OF OPERATION.] Projects undertaken,
developed, or financed pursuant to this section shall be located
within the tax relief taconite assistance area defined in
section 273.134, paragraph (b) 273.1341.
Sec. 20. Minnesota Statutes 2002, section 298.2213,
subdivision 3, is amended to read:
Subd. 3. [USE OF MONEY.] The money appropriated under this
section may be used to provide loans, loan guarantees, interest
buy-downs, and other forms of participation with private sources
of financing, provided that a loan to a private enterprise must
be for a principal amount not to exceed one-half of the cost of
the project for which financing is sought, and the rate of
interest on a loan must be no less than the lesser of eight
percent or the rate of interest that is three percentage points
less than a full faith and credit obligation of the United
States government of comparable maturity, at the time that the
loan is approved.
Money appropriated in this section must be expended only in
or for the benefit of the tax relief taconite assistance area
defined in section 273.134, paragraph (b) 273.1341, and as
otherwise provided in this section.
Sec. 21. Minnesota Statutes 2002, section 298.2214,
subdivision 1, is amended to read:
Subdivision 1. [CREATION OF COMMITTEE; PURPOSE.] A
committee is created to advise the commissioner of iron range
resources and rehabilitation on providing higher education
programs in the taconite tax relief assistance area defined in
section 273.134, paragraph (b) 273.1341. The committee is
subject to section 15.059.
Sec. 22. Minnesota Statutes 2002, section 298.2214,
subdivision 3, is amended to read:
Subd. 3. [ADVISORY FUNCTION.] The committee shall advise
the commissioner regarding development of a contract with the
state university system. The contract would require the system
to provide courses within the taconite tax relief assistance
area defined in section 273.1341.
Sec. 23. Minnesota Statutes 2002, section 298.223,
subdivision 1, is amended to read:
Subdivision 1. [CREATION; PURPOSES.] A fund called the
taconite environmental protection fund is created for the
purpose of reclaiming, restoring and enhancing those areas of
northeast Minnesota located within a tax relief the taconite
assistance area defined in section 273.134, paragraph
(b) 273.1341, that are adversely affected by the environmentally
damaging operations involved in mining taconite and iron ore and
producing iron ore concentrate and for the purpose of promoting
the economic development of northeast Minnesota. The taconite
environmental protection fund shall be used for the following
purposes:
(a) to initiate investigations into matters the iron range
resources and rehabilitation board determines are in need of
study and which will determine the environmental problems
requiring remedial action;
(b) reclamation, restoration, or reforestation of minelands
not otherwise provided for by state law;
(c) local economic development projects including
construction of sewer and water systems, and other public works
located within a tax relief the taconite assistance area defined
in section 273.134, paragraph (b) 273.1341;
(d) monitoring of mineral industry related health problems
among mining employees.
Sec. 24. Minnesota Statutes 2002, section 298.28,
subdivision 7, is amended to read:
Subd. 7. [IRON RANGE RESOURCES AND REHABILITATION BOARD.]
For the 1998 distribution, 6.5 cents per taxable ton shall be
paid to the iron range resources and rehabilitation board for
the purposes of section 298.22. That amount shall be increased
in 1999 and subsequent years in the same proportion as the
increase in the implicit price deflator as provided in section
298.24, subdivision 1. The amount distributed pursuant to this
subdivision shall be expended within or for the benefit of a tax
relief the taconite assistance area defined in section 273.134,
paragraph (b) 273.1341. No part of the fund provided in this
subdivision may be used to provide loans for the operation of
private business unless the loan is approved by the governor.
Sec. 25. Minnesota Statutes 2002, section 298.28,
subdivision 11, is amended to read:
Subd. 11. [REMAINDER.] (a) The proceeds of the tax imposed
by section 298.24 which remain after the distributions and
payments in subdivisions 2 to 10a, as certified by the
commissioner of revenue, and paragraphs (b), (c), (d), and (e)
have been made, together with interest earned on all money
distributed under this section prior to distribution, shall be
divided between the taconite environmental protection fund
created in section 298.223 and the northeast Minnesota economic
protection trust fund created in section 298.292 as follows:
Two-thirds to the taconite environmental protection fund and
one-third to the northeast Minnesota economic protection trust
fund. The proceeds shall be placed in the respective special
accounts.
(b) There shall be distributed to each city, town, and
county the amount that it received under section 294.26 in
calendar year 1977; provided, however, that the amount
distributed in 1981 to the unorganized territory number 2 of
Lake county and the town of Beaver Bay based on the
between-terminal trackage of Erie Mining Company will be
distributed in 1982 and subsequent years to the unorganized
territory number 2 of Lake county and the towns of Beaver Bay
and Stony River based on the miles of track of Erie Mining
Company in each taxing district.
(c) There shall be distributed to the iron range resources
and rehabilitation board the amounts it received in 1977 under
section 298.22. The amount distributed under this paragraph
shall be expended within or for the benefit of the tax relief
taconite assistance area defined in section 273.134 273.1341.
(d) There shall be distributed to each school district 62
percent of the amount that it received under section 294.26 in
calendar year 1977.
(e) In 2003 only, $100,000 must be distributed to a
township located in a taconite tax relief area as defined in
section 273.134, paragraph (a), that received $119,259 of
homestead and agricultural credit aid and $182,014 in local
government aid in 2001.
Sec. 26. 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 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 taconite assistance area defined
in section 273.134, paragraph (b) 273.1341.
Sec. 27. Minnesota Statutes 2002, section 298.293, is
amended to read:
298.293 [EXPENDING FUNDS.]
The funds provided by section 298.28, subdivision 11,
relating to the northeast Minnesota economic protection trust
fund, except money expended pursuant to Laws 1982, Second
Special Session, chapter 2, sections 8 to 14, shall be expended
only in an amount that does not exceed the sum of the net
interest, dividends, and earnings arising from the investment of
the trust for the preceding 12 calendar months from the date of
the authorization plus, for fiscal year 1983, $10,000,000 from
the corpus of the fund. The funds may be spent only in or for
the benefit of those areas that are tax relief areas the
taconite assistance area as defined in section 273.134,
paragraph (b) 273.1341. If during any year the taconite
property tax account under sections 273.134 to 273.136 does not
contain sufficient funds to pay the property tax relief
specified in Laws 1977, chapter 423, article X, section 4, there
is appropriated from this trust fund to the relief account
sufficient funds to pay the relief specified in Laws 1977,
chapter 423, article X, section 4.
Sec. 28. Minnesota Statutes 2002, section 298.298, is
amended to read:
298.298 [LONG-RANGE PLAN.]
Consistent with the policy established in sections 298.291
to 298.298, the iron range resources and rehabilitation board
shall prepare and present to the governor and the legislature by
January 1, 1984 a long-range plan for the use of the northeast
Minnesota economic protection trust fund for the economic
development and diversification of the tax relief taconite
assistance area defined in section 273.134, paragraph
(b) 273.1341. The iron range resources and rehabilitation board
shall, before November 15 of each even numbered year, prepare a
report to the governor and legislature updating and revising
this long-range plan and reporting on the iron range resources
and rehabilitation board's progress on those matters assigned to
it by law. After January 1, 1984, no project shall be approved
by the iron range resources and rehabilitation board which is
not consistent with the goals and objectives established in the
long-range plan.
Sec. 29. Minnesota Statutes 2002, section 429.101,
subdivision 1, is amended to read:
Subdivision 1. [ORDINANCES.] (a) In addition to any other
method authorized by law or charter, the governing body of any
municipality may provide for the collection of unpaid special
charges for all or any part of the cost of:
(1) snow, ice, or rubbish removal from sidewalks,;
(2) weed elimination from streets or private property,;
(3) removal or elimination of public health or safety
hazards from private property, excluding any structure included
under the provisions of sections 463.15 to 463.26,;
(4) installation or repair of water service lines, street
sprinkling or other dust treatment of streets,;
(5) the trimming and care of trees and the removal of
unsound trees from any street,;
(6) the treatment and removal of insect infested or
diseased trees on private property, the repair of sidewalks and
alleys,;
(7) the operation of a street lighting system, or;
(8) the operation and maintenance of a fire protection or a
pedestrian skyway system,; or
(9) reinspections which find noncompliance after the due
date for compliance with an order to correct a municipal housing
maintenance code violation;
as a special assessment against the property benefited.
(b) The council may by ordinance adopt regulations
consistent with this section to make this authority effective,
including, at the option of the council, provisions for placing
primary responsibility upon the property owner or occupant to do
the work personally(except in the case of street sprinkling or
other dust treatment, alley repair, tree trimming, care, and
removal or the operation of a street lighting system) upon
notice before the work is undertaken, and for collection from
the property owner or other person served of the charges when
due before unpaid charges are made a special assessment.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 30. Minnesota Statutes 2002, section 473.704,
subdivision 17, as amended by Laws 2003, chapter 127, article
13, section 4, 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 (1) to monitor for disease-bearing mosquitoes,
ticks, or black gnats, or (2) for control of 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. The commission
shall make a reasonable attempt to contact an objecting owner
before entering on the owner's private property.
(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.
Sec. 31. Laws 1998, chapter 389, article 16, section 35,
subdivision 1, as amended by Laws 2001, First Special Session
chapter 5, article 20, section 19, is amended to read:
Subdivision 1. [BAT STUDY.] $100,000 is appropriated from
the general fund for fiscal year 1999 to the legislative
coordinating commission to study alternative methods of taxing
business. The appropriations under this section and under Laws
1997, chapter 231, article 5, section 18, subdivision 3, are
available in fiscal years 2000 and 2001. Any portion of this
appropriation that cancels in 2001 is appropriated in 2002 and
is available until June 30, 2003. The date for completion of
this study is extended through December 31, 2004, and the
portion of the appropriation encumbered by the contracts between
the legislative coordinating commission and the department of
revenue and between the department of revenue and the University
of Minnesota may be spent during the 2004-2005 biennium to pay
obligations under the contracts.
Sec. 32. Laws 2001, First Special Session chapter 5,
article 20, section 22, is amended to read:
Sec. 22. [BUDGET RESERVE INCREASE.]
The commissioner of finance shall transfer the amount
necessary to increase the budget reserve account in the general
fund to $653,000,000 on July 1, 2001. On July 1, 2003, the
commissioner of finance shall transfer $31,000,000 to the budget
reserve account in the general fund. The amounts necessary for
this purpose are appropriated from the general fund.
Sec. 33. [TRANSFER OF ENDOWMENT FUNDS.]
On July 1, 2003, the commissioner of finance shall transfer
the tobacco use prevention and local public health endowment
fund and the medical education endowment fund to the general
fund.
Sec. 34. [BUDGET RESERVE ADJUSTMENT.]
If, prior to July 1, 2003, on the basis of the February
2003 forecast and revenue and expenditure measures enacted into
law in the 2003 regular and special legislative sessions, the
commissioner of finance determines there will be a negative
unrestricted budgetary balance in the general fund for the
biennium ending June 30, 2005, the commissioner shall reduce the
July 1, 2004, appropriation to the budget reserve account in
Minnesota Statutes, section 16A.152, subdivision 1b, by the
amount necessary to balance revenues and expenditures in the
biennium ending June 30, 2005.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 35. [TEMPORARY STATE FISCAL RELIEF.]
Any temporary state fiscal relief received under Title VI
of the Jobs Growth and Tax Relief Reconciliation Act of 2003
must be deposited in the state treasury and credited to the
general fund.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 36. [APPROPRIATION.]
(a) $100,000 in fiscal year 2004 and $100,000 in fiscal
year 2005 are appropriated from the general fund to the
commissioner of revenue to make grants to one or more nonprofit
organizations, qualifying under section 501(c)(3) of the
Internal Revenue Code of 1986, to coordinate, facilitate,
encourage, and aid in the provision of taxpayer assistance
services. This appropriation does not become a part of the base.
(b) "Taxpayer assistance services" mean accounting and tax
preparation services provided by volunteers to low-income and
disadvantaged Minnesota residents to help them file federal and
state income tax returns and Minnesota property tax refund
claims and to provide personal representation before the
department of revenue and Internal Revenue Service.
Sec. 37. [APPROPRIATION; COST OF ADMINISTRATION.]
$200,000 in fiscal year 2004 is appropriated from the
general fund to the commissioner of revenue for the cost of
administering tax law changes enacted in 2003.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Presented to the governor May 30, 2003
Signed by the governor June 8, 2003, 7:00 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes