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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 152-H.F.No. 2498 
                  An act relating to public finance; authorizing 
                  purchases of certain guaranteed investment contracts; 
                  authorizing a special levy; modifying a taconite fund 
                  provision; modifying the authority of cities and 
                  counties to finance purchases of computers and related 
                  items; extending the term of certain notes; clarifying 
                  the financing of conservation easements; extending 
                  sunsets on establishment of special service districts 
                  and housing improvement areas; authorizing 
                  municipalities to improve streets and roads outside 
                  municipal boundaries; providing for financing of 
                  certain improvements; extending the maximum maturity 
                  of certain bonds; revising time for certain notices of 
                  issues; exempting obligations issued to pay judgments 
                  from net debt limits; modifying limits on city capital 
                  improvement bonds and enabling certain towns to issue 
                  bonds under a capital improvement plan; authorizing 
                  the issuance of certain revenue bonds; modifying 
                  certain tax increment financing provisions; providing 
                  a bidding exception; increasing reserve from public 
                  facilities pool for certain purposes; providing for 
                  payment of certain refunding bonds; abolishing the 
                  housing bond credit enhancement program and providing 
                  for debt service on the bonds; authorizing a tax 
                  abatement extension; appropriating money for certain 
                  refunds; amending Minnesota Statutes 2004, sections 
                  13.55, by adding a subdivision; 116J.556; 118A.05, 
                  subdivision 5; 272.02, subdivision 64; 272.0212, 
                  subdivisions 1, 2; 275.70, subdivision 5; 298.223, 
                  subdivision 1; 343.11; 373.01, subdivision 3; 373.40, 
                  subdivision 1; 410.32; 412.301; 428A.101; 428A.21; 
                  469.015, subdivision 4; 469.034, subdivision 2; 
                  469.158; 469.174, subdivisions 11, 25; 469.175, 
                  subdivisions 1, 2, 4a, 5, 6; 469.176, subdivisions 2, 
                  4d; 469.1761, subdivisions 1, 3; 469.1763, 
                  subdivisions 2, 6; 469.177, subdivision 1; 469.1771, 
                  subdivision 5; 469.178, subdivision 1; 469.1813, 
                  subdivision 6; 473.197, subdivision 4; 473.39, by 
                  adding subdivisions; 474A.061, subdivision 2c; 
                  474A.131, subdivision 1; 475.51, subdivision 4; 
                  475.52, subdivisions 1, 3, 4; 475.521, subdivisions 1, 
                  2, 3, 4; 475.58, subdivision 3b; 477A.013, by adding a 
                  subdivision; Laws 1996, chapter 412, article 5, 
                  section 24; Laws 1998, chapter 389, article 11, 
                  section 19, subdivision 3; Laws 2003, chapter 127, 
                  article 12, section 38; proposing coding for new law 
                  in Minnesota Statutes, chapters 429; 452; repealing 
                  Minnesota Statutes 2004, sections 469.176, subdivision 
                  1a; 469.1766; 473.197, subdivisions 1, 2, 3, 5; 
                  473.39, subdivision 1f; Laws 1994, chapter 587, 
                  article 9, section 20, subdivision 4. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1
                                 PUBLIC FINANCE
           Section 1.  Minnesota Statutes 2004, section 13.55, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [CITY OF ST. PAUL DATA.] (a) For purposes of this 
        subdivision, "nonprofit organization" means the nonprofit 
        organization with which the city of St. Paul contracts to market 
        and promote the city as a tourist or convention center. 
           (b) Data collected, received, created, or maintained by the 
        nonprofit organization in the course of preparing or submitting 
        any responses to requests for proposals or requests for bids 
        relating to events hosted, conducted, or sponsored by the 
        nonprofit organization is classified as nonpublic data under 
        section 13.02, subdivision 9; or private data under section 
        13.02, subdivision 12, until the time provided in subdivision 2, 
        paragraph (a) or (b), of this section.  The nonprofit 
        organization is a "civic center authority" for purposes of this 
        section. 
           Sec. 2.  Minnesota Statutes 2004, section 118A.05, 
        subdivision 5, is amended to read: 
           Subd. 5.  [GUARANTEED INVESTMENT CONTRACTS.] Agreements or 
        contracts for guaranteed investment contracts may be entered 
        into if they are issued or guaranteed by United States 
        commercial banks, domestic branches of foreign banks, United 
        States insurance companies, or their Canadian subsidiaries, or 
        the domestic affiliates of any of the foregoing.  The credit 
        quality of the issuer's or guarantor's short- and long-term 
        unsecured debt must be rated in one of the two highest 
        categories by a nationally recognized rating agency.  Should the 
        issuer's or guarantor's credit quality be downgraded below "A", 
        the government entity must have withdrawal rights. 
           Sec. 3.  Minnesota Statutes 2004, 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 (f), 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) 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 clause is 
        limited to the amount of aid the county is certified to receive 
        under section 273.1398, subdivision 4a; and 
           (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; and 
           (16) for purposes of a storm sewer improvement district, 
        pursuant to section 444.20. 
           Sec. 4.  Minnesota Statutes 2004, 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 the taconite assistance area 
        defined in section 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 but only if 
        those projects are approved by the board, and public works, 
        including construction of sewer and water systems located within 
        the taconite assistance area defined in section 273.1341; 
           (d) monitoring of mineral industry related health problems 
        among mining employees. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 343.11, is 
        amended to read: 
           343.11 [ACQUISITION OF PROPERTY, APPROPRIATIONS.] 
           Every county and district society for the prevention of 
        cruelty to animals may acquire, by purchase, gift, grant, or 
        devise, and hold, use, or convey, real estate and personal 
        property, and lease, mortgage, sell, or use the same in any 
        manner conducive to its interest, to the same extent as natural 
        persons.  The county board of any county, or the council of any 
        city, in which such societies exist, may, in its discretion, 
        appropriate for the maintenance and support of such societies in 
        the transaction of the work for which they are organized, any 
        sums of money not otherwise appropriated, not to exceed in any 
        one year the sum of $4,800 or the sum of 50 cents $1 per capita 
        based upon the county's or city's population as of the most 
        recent federal census, whichever is greater; provided, that no 
        part of the appropriation shall be expended for the payment of 
        the salary of any officer of the society. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 6.  Minnesota Statutes 2004, section 373.01, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CAPITAL NOTES.] (a) A county board may, by 
        resolution and without referendum, issue capital notes subject 
        to the county debt limit to purchase capital equipment useful 
        for county purposes that has an expected useful life at least 
        equal to the term of the notes.  The notes shall be payable in 
        not more than five ten years and shall be issued on terms and in 
        a manner the board determines.  A tax levy shall be made for 
        payment of the principal and interest on the notes, in 
        accordance with section 475.61, as in the case of bonds.  
           (b) For purposes of this subdivision, "capital equipment" 
        means: 
           (1) public safety, ambulance, road construction or 
        maintenance, and medical equipment,; and 
           (2) computer hardware and original operating system 
        software, whether bundled with machinery or equipment or 
        unbundled.  The authority to issue capital notes for original 
        operating systems software expires on July 1, 2005 2007. 
           Sec. 7.  Minnesota Statutes 2004, section 373.40, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given. 
           (a) "Bonds" means an obligation as defined under section 
        475.51. 
           (b) "Capital improvement" means acquisition or betterment 
        of public lands, development rights in the form of conservation 
        easements under chapter 84C, buildings, or other improvements 
        within the county for the purpose of a county courthouse, 
        administrative building, health or social service facility, 
        correctional facility, jail, law enforcement center, hospital, 
        morgue, library, park, qualified indoor ice arena, and roads and 
        bridges, and the acquisition of development rights in the form 
        of conservation easements under chapter 84C.  An improvement 
        must have an expected useful life of five years or more to 
        qualify.  "Capital improvement" does not include light rail 
        transit or any activity related to it or a recreation or sports 
        facility building (such as, but not limited to, a gymnasium, ice 
        arena, racquet sports facility, swimming pool, exercise room or 
        health spa), unless the building is part of an outdoor park 
        facility and is incidental to the primary purpose of outdoor 
        recreation. 
           (c) "Commissioner" means the commissioner of employment and 
        economic development. 
           (d) "Metropolitan county" means a county located in the 
        seven-county metropolitan area as defined in section 473.121 or 
        a county with a population of 90,000 or more. 
           (e) "Population" means the population established by the 
        most recent of the following (determined as of the date the 
        resolution authorizing the bonds was adopted): 
           (1) the federal decennial census, 
           (2) a special census conducted under contract by the United 
        States Bureau of the Census, or 
           (3) a population estimate made either by the Metropolitan 
        Council or by the state demographer under section 4A.02. 
           (f) "Qualified indoor ice arena" means a facility that 
        meets the requirements of section 373.43. 
           (g) "Tax capacity" means total taxable market value, but 
        does not include captured market value. 
           Sec. 8.  Minnesota Statutes 2004, section 410.32, is 
        amended to read: 
           410.32 [CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL 
        EQUIPMENT.] 
           (a) Notwithstanding any contrary provision of other law or 
        charter, a home rule charter city may, by resolution and without 
        public referendum, issue capital notes subject to the city debt 
        limit to purchase capital equipment. 
           (b) For purposes of this section, "capital equipment" means:
           (1) public safety equipment, ambulance and other medical 
        equipment, road construction and maintenance equipment, and 
        other capital equipment; and 
           (2) computer hardware and original operating system 
        software, provided whether bundled with machinery or equipment 
        or unbundled. 
           (c) The equipment or software has must have an expected 
        useful life at least as long as the term of the notes.  The 
        authority to issue capital notes for original operating system 
        software expires on July 1, 2005 2007. 
           (d) The notes shall be payable in not more than five ten 
        years and be issued on terms and in the manner the city 
        determines.  The total principal amount of the capital notes 
        issued in a fiscal year shall not exceed 0.03 percent of the 
        market value of taxable property in the city for that year.  
           (e) A tax levy shall be made for the payment of the 
        principal and interest on the notes, in accordance with section 
        475.61, as in the case of bonds.  
           (f) Notes issued under this section shall require an 
        affirmative vote of two-thirds of the governing body of the city.
           (g) Notwithstanding a contrary provision of other law or 
        charter, a home rule charter city may also issue capital notes 
        subject to its debt limit in the manner and subject to the 
        limitations applicable to statutory cities pursuant to section 
        412.301. 
           Sec. 9.  Minnesota Statutes 2004, section 412.301, is 
        amended to read: 
           412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 
           (a) The council may issue certificates of indebtedness or 
        capital notes subject to the city debt limits to 
        purchase capital equipment. 
           (b) For purposes of this section, "capital equipment" means:
           (1) public safety equipment, ambulance and other medical 
        equipment, road construction or and maintenance equipment, and 
        other capital equipment; and 
           (2) computer hardware and original operating system 
        software, provided whether bundled with machinery or equipment 
        or unbundled. 
           (c) The equipment or software has must have an expected 
        useful life at least as long as the terms of the certificates or 
        notes.  The authority to issue capital notes for original 
        operating system software expires on July 1, 2005 2007. 
           (d) Such certificates or notes shall be payable in not more 
        than five ten years and shall be issued on such terms and in 
        such manner as the council may determine.  
           (e) If the amount of the certificates or notes to be issued 
        to finance any such purchase exceeds 0.25 percent of the market 
        value of taxable property in the city, they shall not be issued 
        for at least ten days after publication in the official 
        newspaper of a council resolution determining to issue them; and 
        if before the end of that time, a petition asking for an 
        election on the proposition signed by voters equal to ten 
        percent of the number of voters at the last regular municipal 
        election is filed with the clerk, such certificates or notes 
        shall not be issued until the proposition of their issuance has 
        been approved by a majority of the votes cast on the question at 
        a regular or special election.  
           (f) A tax levy shall be made for the payment of the 
        principal and interest on such certificates or notes, in 
        accordance with section 475.61, as in the case of bonds.  
           Sec. 10.  Minnesota Statutes 2004, section 428A.101, is 
        amended to read: 
           428A.101 [DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER 
        GENERAL LAW.] 
           The establishment of a new special service district after 
        June 30, 2005 2009, requires enactment of a special law 
        authorizing the establishment. 
           Sec. 11.  Minnesota Statutes 2004, section 428A.21, is 
        amended to read: 
           428A.21 [SUNSET DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS 
        UNDER GENERAL LAW.] 
           No The establishment of a new housing improvement areas may 
        be established under sections 428A.11 to 428A.20 area after June 
        30, 2005.  After June 30, 2005, a city may establish a housing 
        improvement area, provided that it receives enabling legislation 
        2009, requires enactment of a special law authorizing the 
        establishment of the area. 
           Sec. 12.  [429.052] [STREET OR ROAD IMPROVEMENTS OUTSIDE 
        MUNICIPAL BOUNDARIES.] 
           A municipality may construct street or road improvements 
        outside its jurisdiction with the consent of the affected 
        township, or if the property is located in unorganized 
        territory, the county.  When property is brought within the 
        corporate limits of the municipality, the municipality may 
        subsequently reimburse itself for all or any portion of the cost 
        of the improvement for which municipal funds have been expended, 
        by levying an assessment upon any property abutting on, but not 
        previously assessed for, the improvement.  No assessment may be 
        so levied unless the property to be assessed was given notice 
        and hearing of the improvements under section 429.031 at the 
        time the improvement was ordered, and subsequently in accordance 
        with the notice, hearing, and appeal rights, provided for under 
        sections 429.061 and 429.081. 
           [EFFECTIVE DATE.] This section is effective for street and 
        road improvements first ordered after August 1, 2005. 
           Sec. 13.  [452.26] [UTILITY JOINT VENTURE.] 
           To provide reduced cost financing or to otherwise help in 
        carrying out its functions, a municipal gas agency created under 
        chapter 453A and any municipal utility authorized to provide gas 
        facilities or services may enter into a joint venture that was 
        incorporated before June 30, 2004, under section 452.25.  The 
        joint venture, and any municipal gas agency which is a member of 
        the joint venture, may provide gas utility service. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 14.  Minnesota Statutes 2004, section 469.015, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EXCEPTIONS.] (a) An authority need not require 
        competitive bidding in the following circumstances:  
           (1) in the case of a contract for the acquisition of a 
        low-rent housing project: 
           (i) for which financial assistance is provided by the 
        federal government; 
           (ii) which does not require any direct loan or grant of 
        money from the municipality as a condition of the federal 
        financial assistance; and 
           (iii) for which the contract provides for the construction 
        of the project upon land that is either owned by the authority 
        for redevelopment purposes or not owned by the authority at the 
        time of the contract but the contract provides for the 
        conveyance or lease to the authority of the project or 
        improvements upon completion of construction; 
           (2) with respect to a structured parking facility: 
           (i) constructed in conjunction with, and directly above or 
        below, a development; and 
           (ii) financed with the proceeds of tax increment or parking 
        ramp general obligation or revenue bonds; and 
           (3) until August 1, 2009, with respect to a facility built 
        for the purpose of facilitating the operation of public transit 
        or encouraging its use: 
           (i) constructed in conjunction with, and directly above or 
        below, a development; and 
           (ii) financed with the proceeds of parking ramp general 
        obligation or revenue bonds or with at least 60 percent of the 
        construction cost being financed with funding provided by the 
        federal government; and 
           (4) in the case of any building in which at least 75 
        percent of the usable square footage constitutes a housing 
        development project if: 
           (i) the project is financed with the proceeds of bonds 
        issued under section 469.034 or from nongovernmental sources; 
           (ii) the project is either located on land that is owned or 
        is being acquired by the authority only for development 
        purposes, or is not owned by the authority at the time the 
        contract is entered into but the contract provides for 
        conveyance or lease to the authority of the project or 
        improvements upon completion of construction; and 
           (iii) the authority finds and determines that elimination 
        of the public bidding requirements is necessary in order for the 
        housing development project to be economical and feasible. 
           (b) An authority need not require a performance bond for 
        the following projects: 
           (1) a contract described in paragraph (a), clause (1); 
           (2) a construction change order for a housing project in 
        which 30 percent of the construction has been completed; 
           (3) a construction contract for a single-family housing 
        project in which the authority acts as the general construction 
        contractor; or 
           (4) a services or materials contract for a housing project. 
           For purposes of this paragraph, "services or materials 
        contract" does not include construction contracts. 
           Sec. 15.  Minnesota Statutes 2004, section 469.034, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GENERAL OBLIGATION REVENUE BONDS.] (a) An 
        authority may pledge the general obligation of the general 
        jurisdiction governmental unit as additional security for bonds 
        payable from income or revenues of the project or the 
        authority.  The authority must find that the pledged revenues 
        will equal or exceed 110 percent of the principal and interest 
        due on the bonds for each year.  The proceeds of the bonds must 
        be used for a qualified housing development project or 
        projects.  The obligations must be issued and sold in the manner 
        and following the procedures provided by chapter 475, except the 
        obligations are not subject to approval by the electors, and the 
        maturities may extend to not more than 30 35 years from the 
        estimated date of completion of the project for obligations sold 
        to finance housing for the elderly and 40 years for other 
        obligations issued under this subdivision.  The authority is the 
        municipality for purposes of chapter 475.  
           (b) The principal amount of the issue must be approved by 
        the governing body of the general jurisdiction governmental unit 
        whose general obligation is pledged.  Public hearings must be 
        held on issuance of the obligations by both the authority and 
        the general jurisdiction governmental unit.  The hearings must 
        be held at least 15 days, but not more than 120 days, before the 
        sale of the obligations. 
           (c) The maximum amount of general obligation bonds that may 
        be issued and outstanding under this section equals the greater 
        of (1) one-half of one percent of the taxable market value of 
        the general jurisdiction governmental unit whose general 
        obligation which includes a tax on property is pledged, or (2) 
        $3,000,000.  In the case of county or multicounty general 
        obligation bonds, the outstanding general obligation bonds of 
        all cities in the county or counties issued under this 
        subdivision must be added in calculating the limit under clause 
        (1). 
           (d) "General jurisdiction governmental unit" means the city 
        in which the housing development project is located.  In the 
        case of a county or multicounty authority, the county or 
        counties may act as the general jurisdiction governmental unit.  
        In the case of a multicounty authority, the pledge of the 
        general obligation is a pledge of a tax on the taxable property 
        in each of the counties. 
           (e) "Qualified housing development project" means a housing 
        development project providing housing either for the elderly or 
        for individuals and families with incomes not greater than 80 
        percent of the median family income as estimated by the United 
        States Department of Housing and Urban Development for the 
        standard metropolitan statistical area or the nonmetropolitan 
        county in which the project is located, and will.  The project 
        must be owned for the term of the bonds either by the 
        authority for the term of the bonds. or by a limited partnership 
        or other entity in which the authority or another entity under 
        the sole control of the authority is the sole general partner 
        and the partnership or other entity must receive (1) an 
        allocation from the Department of Finance or an entitlement 
        issuer of tax-exempt bonding authority for the project and a 
        preliminary determination by the Minnesota Housing Finance 
        Agency or the applicable suballocator of tax credits that the 
        project will qualify for four percent low-income housing tax 
        credits or (2) a reservation of nine percent low-income housing 
        tax credits from the Minnesota Housing Finance Agency or a 
        suballocator of tax credits for the project.  A qualified 
        housing development project may admit nonelderly individuals and 
        families with higher incomes if: 
           (1) three years have passed since initial occupancy; 
           (2) the authority finds the project is experiencing 
        unanticipated vacancies resulting in insufficient revenues, 
        because of changes in population or other unforeseen 
        circumstances that occurred after the initial finding of 
        adequate revenues; and 
           (3) the authority finds a tax levy or payment from general 
        assets of the general jurisdiction governmental unit will be 
        necessary to pay debt service on the bonds if higher income 
        individuals or families are not admitted. 
           Sec. 16.  Minnesota Statutes 2004, section 469.158, is 
        amended to read: 
           469.158 [MANNER OF ISSUANCE OF BONDS; INTEREST RATE.] 
           Bonds authorized under sections 469.152 to 469.165 must be 
        issued in accordance with the provisions of chapter 475 relating 
        to bonds payable from income of revenue producing conveniences, 
        except that public sale is not required, the provisions of 
        sections 475.62 and 475.63 do not apply, and the bonds may 
        mature at the time or times, in the amount or amounts, within 30 
        40 years from date of issue, and may be sold at a price equal to 
        the percentage of the par value thereof, plus accrued interest, 
        and bearing interest at the rate or rates agreed by the 
        contracting party, the purchaser, and the municipality or 
        redevelopment agency, notwithstanding any limitation of interest 
        rate or cost or of the amounts of annual maturities contained in 
        any other law.  Bonds issued to refund bonds previously issued 
        pursuant to sections 469.152 to 469.165 may be issued in amounts 
        determined by the municipality or redevelopment agency 
        notwithstanding the provisions of section 475.67, subdivision 3. 
           Sec. 17.  Minnesota Statutes 2004, section 469.1813, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DURATION LIMIT.] (a) A political subdivision may 
        grant an abatement for a period no longer than ten 15 years, 
        except as provided under paragraph (b).  The subdivision may 
        specify in the abatement resolution a shorter duration.  If the 
        resolution does not specify a period of time, the abatement is 
        for eight years.  If an abatement has been granted to a parcel 
        of property and the period of the abatement has expired, the 
        political subdivision that granted the abatement may not grant 
        another abatement for eight years after the expiration of the 
        first abatement.  This prohibition does not apply to 
        improvements added after and not subject to the first abatement. 
           (b) A political subdivision proposing to abate taxes for a 
        parcel may request, in writing, that the other political 
        subdivisions in which the parcel is located grant an abatement 
        for the property.  If one of the other political subdivisions 
        declines, in writing, to grant an abatement or if 90 days pass 
        after receipt of the request to grant an abatement without a 
        written response from one of the political subdivisions, the 
        duration limit for an abatement for the parcel by the requesting 
        political subdivision and any other participating political 
        subdivision is increased to 15 20 years.  If the political 
        subdivision which declined to grant an abatement later grants an 
        abatement for the parcel, the 15-year 20-year duration limit is 
        reduced by one year for each year that the declining political 
        subdivision grants an abatement for the parcel during the period 
        of the abatement granted by the requesting political 
        subdivision.  The duration limit may not be reduced below the 
        limit under paragraph (a).  
           Sec. 18.  Minnesota Statutes 2004, section 473.197, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEBT RESERVE; LEVY.] To provide money to pay 
        debt service on bonds issued under the credit enhancement 
        program if pledged revenues are insufficient to pay debt service 
        in repealed subdivision 1 of Minnesota Statutes 2004, section 
        473.197, the council must maintain a debt reserve fund in the 
        manner and with the effect provided by section 118A.04 for 
        public funds until such a reserve is no longer pledged or 
        otherwise needed to pay debt service on such bonds.  To provide 
        funds for the debt reserve fund, the council may use up to 
        $3,000,000 of the proceeds of solid waste bonds issued by the 
        council under section 473.831 before its repeal.  To provide 
        additional funds for the debt reserve fund, the council may levy 
        a tax on all taxable property in the metropolitan area and must 
        levy the tax If sums in the debt reserve fund are insufficient 
        to cure any deficiency in the debt service fund established for 
        the bonds, the council must levy a tax on all taxable property 
        in the metropolitan area in the amount needed to cure the 
        deficiency.  The tax authorized by this section does not affect 
        the amount or rate of taxes that may be levied by the council 
        for other purposes and is not subject to limit as to rate or 
        amount. 
           Sec. 19.  Minnesota Statutes 2004, section 473.39, is 
        amended by adding a subdivision to read: 
           Subd. 1k.  [OBLIGATIONS.] After July 1, 2005, in addition 
        to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, 1i, 
        and 1j, the council may issue certificates of indebtedness, 
        bonds, or other obligations under this section in an amount not 
        exceeding $64,000,000 for capital expenditures as prescribed in 
        the council's regional transit master plan and transit capital 
        improvement program and for related costs, including the costs 
        of issuance and sale of the obligations. 
           Sec. 20.  Minnesota Statutes 2004, section 473.39, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [USES OF INVESTMENT INCOME.] Interest or other 
        investment earnings on the proceeds of bonds issued under this 
        section and on a debt service account for bonds issued under 
        this section must be used only to: 
           (1) pay capital expenditures and related expenses for which 
        the obligations were authorized by this section; 
           (2) to pay debt service on the obligations or to reduce the 
        council's property tax levy imposed to pay debt service on 
        obligations issued under this section; 
           (3) pay rebate or yield reduction payments for the bonds to 
        the United States; 
           (4) redeem or purchase the bonds; or 
           (5) make other payments with respect to the bonds that are 
        necessary or desirable to comply with federal tax rules 
        applicable to the bonds or to comply with covenants made with 
        respect to the bonds. 
           [EFFECTIVE DATE.] This section is effective for investment 
        earnings received after June 30, 2005. 
           Sec. 21.  Minnesota Statutes 2004, section 474A.061, 
        subdivision 2c, is amended to read: 
           Subd. 2c.  [PUBLIC FACILITIES POOL ALLOCATION.] From the 
        beginning of the calendar year and continuing for a period of 
        120 days, the commissioner shall reserve $3,000,000 $5,000,000 
        of the available bonding authority from the public facilities 
        pool for applications for public facilities projects to be 
        financed by the Western Lake Superior Sanitary District.  
        Commencing on the second Tuesday in January and continuing on 
        each Monday through the last Monday in July, the commissioner 
        shall allocate available bonding authority from the public 
        facilities pool to applications for eligible public facilities 
        projects received on or before the Monday of the preceding 
        week.  If there are two or more applications for public 
        facilities projects from the pool and there is insufficient 
        available bonding authority to provide allocations for all 
        projects in any one week, the available bonding authority shall 
        be awarded by lot unless otherwise agreed to by the respective 
        issuers. 
           Sec. 22.  Minnesota Statutes 2004, section 474A.131, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTICE OF ISSUE.] Each issuer that issues 
        bonds with an allocation received under this chapter shall 
        provide a notice of issue to the department on forms provided by 
        the department stating: 
           (1) the date of issuance of the bonds; 
           (2) the title of the issue; 
           (3) the principal amount of the bonds; 
           (4) the type of qualified bonds under federal tax law; 
           (5) the dollar amount of the bonds issued that were subject 
        to the annual volume cap; and 
           (6) for entitlement issuers, whether the allocation is from 
        current year entitlement authority or is from carryforward 
        authority. 
           For obligations that are issued as a part of a series of 
        obligations, a notice must be provided for each series.  A 
        penalty of one-half of the amount of the application deposit not 
        to exceed $5,000 shall apply to any issue of obligations for 
        which a notice of issue is not provided to the department within 
        five business days after issuance or before the last Monday 4:30 
        p.m. on the last business day in December, whichever occurs 
        first.  Within 30 days after receipt of a notice of issue the 
        department shall refund a portion of the application deposit 
        equal to one percent of the amount of the bonding authority 
        actually issued if a one percent application deposit was made, 
        or equal to two percent of the amount of the bonding authority 
        actually issued if a two percent application deposit was made, 
        less any penalty amount. 
           Sec. 23.  Minnesota Statutes 2004, section 475.51, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NET DEBT.] "Net debt" means the amount remaining 
        after deducting from its gross debt the amount of current 
        revenues which are applicable within the current fiscal year to 
        the payment of any debt and the aggregate of the principal of 
        the following: 
           (1) Obligations issued for improvements which are payable 
        wholly or partly from the proceeds of special assessments levied 
        upon property specially benefited thereby, including those which 
        are general obligations of the municipality issuing them, if the 
        municipality is entitled to reimbursement in whole or in part 
        from the proceeds of the special assessments. 
           (2) Warrants or orders having no definite or fixed maturity.
           (3) Obligations payable wholly from the income from revenue 
        producing conveniences. 
           (4) Obligations issued to create or maintain a permanent 
        improvement revolving fund. 
           (5) Obligations issued for the acquisition, and betterment 
        of public waterworks systems, and public lighting, heating or 
        power systems, and of any combination thereof or for any other 
        public convenience from which a revenue is or may be derived. 
           (6) Debt service loans and capital loans made to a school 
        district under the provisions of sections 126C.68 and 126C.69. 
           (7) Amount of all money and the face value of all 
        securities held as a debt service fund for the extinguishment of 
        obligations other than those deductible under this subdivision. 
           (8) Obligations to repay loans made under section 216C.37.  
           (9) Obligations to repay loans made from money received 
        from litigation or settlement of alleged violations of federal 
        petroleum pricing regulations. 
           (10) Obligations issued to pay pension fund liabilities 
        under section 475.52, subdivision 6, or any charter authority. 
           (11) Obligations issued to pay judgments against the 
        municipality under section 475.52, subdivision 6, or any charter 
        authority. 
           (12) All other obligations which under the provisions of 
        law authorizing their issuance are not to be included in 
        computing the net debt of the municipality. 
           Sec. 24.  Minnesota Statutes 2004, section 475.52, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATUTORY CITIES.] Any statutory city may 
        issue bonds or other obligations for the acquisition or 
        betterment of public buildings, means of garbage disposal, 
        hospitals, nursing homes, homes for the aged, schools, 
        libraries, museums, art galleries, parks, playgrounds, stadia, 
        sewers, sewage disposal plants, subways, streets, sidewalks, 
        warning systems; for any utility or other public convenience 
        from which a revenue is or may be derived; for a permanent 
        improvement revolving fund; for changing, controlling or 
        bridging streams and other waterways; for the acquisition and 
        betterment of bridges and roads within two miles of the 
        corporate limits; for the acquisition of development rights in 
        the form of conservation easements under chapter 84C; and for 
        acquisition of equipment for snow removal, street construction 
        and maintenance, or fire fighting.  Without limitation by the 
        foregoing the city may issue bonds to provide money for any 
        authorized corporate purpose except current expenses. 
           Sec. 25.  Minnesota Statutes 2004, section 475.52, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COUNTIES.] Any county may issue bonds for the 
        acquisition or betterment of courthouses, county administrative 
        buildings, health or social service facilities, correctional 
        facilities, law enforcement centers, jails, morgues, libraries, 
        parks, and hospitals, for roads and bridges within the county or 
        bordering thereon and for road equipment and machinery and for 
        ambulances and related equipment; for the acquisition of 
        development rights in the form of conservation easements under 
        chapter 84C, and for capital equipment for the administration 
        and conduct of elections providing the equipment is uniform 
        countywide, except that the power of counties to issue bonds in 
        connection with a library shall not exist in Hennepin County. 
           Sec. 26.  Minnesota Statutes 2004, section 475.52, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TOWNS.] Any town may issue bonds for the 
        acquisition and betterment of town halls, town roads and 
        bridges, nursing homes and homes for the aged, and for 
        acquisition of equipment for snow removal, road construction or 
        maintenance, and fire fighting; for the acquisition of 
        development rights in the form of conservation easements under 
        chapter 84C; and for the acquisition and betterment of any 
        buildings to house and maintain town equipment. 
           Sec. 27.  Minnesota Statutes 2004, section 475.521, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given. 
           (a) "Bonds" mean an obligation defined under section 475.51.
           (b) "Capital improvement" means acquisition or betterment 
        of public lands, buildings or other improvements for the purpose 
        of a city hall, town hall, library, public safety facility, and 
        public works facility.  An improvement must have an expected 
        useful life of five years or more to qualify.  Capital 
        improvement does not include light rail transit or any activity 
        related to it, or a park, library, road, bridge, administrative 
        building other than a city or town hall, or land for any of 
        those facilities. 
           (c) "City" "Municipality" means a home rule charter or 
        statutory city or a town described in section 368.01, 
        subdivision 1 or 1a. 
           Sec. 28.  Minnesota Statutes 2004, section 475.521, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELECTION REQUIREMENT.] (a) Bonds issued by a 
        city municipality to finance capital improvements under an 
        approved capital improvements plan are not subject to the 
        election requirements of section 475.58.  The bonds are subject 
        to the net debt limits under section 475.53.  The bonds must be 
        approved by an affirmative vote of three-fifths of the members 
        of a five-member city council governing body.  In the case of 
        a city council governing body having more or less than five 
        members, the bonds must be approved by a vote of at least 
        two-thirds of the city council members of the governing body. 
           (b) Before the issuance of bonds qualifying under this 
        section, the city municipality must publish a notice of its 
        intention to issue the bonds and the date and time of the 
        hearing to obtain public comment on the matter.  The notice must 
        be published in the official newspaper of the city municipality 
        or in a newspaper of general circulation in the city 
        municipality.  Additionally, the notice may be posted on the 
        official Web site, if any, of the city municipality.  The notice 
        must be published at least 14 but not more than 28 days before 
        the date of the hearing. 
           (c) A city municipality may issue the bonds only after 
        obtaining the approval of a majority of the voters voting on the 
        question of issuing the obligations, if a petition requesting a 
        vote on the issuance is signed by voters equal to five percent 
        of the votes cast in the city municipality in the last general 
        election and is filed with the city clerk within 30 days after 
        the public hearing.  The commissioner of revenue shall prepare a 
        suggested form of the question to be presented at the election. 
           Sec. 29.  Minnesota Statutes 2004, section 475.521, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CAPITAL IMPROVEMENT PLAN.] (a) A city 
        municipality may adopt a capital improvement plan.  The plan 
        must cover at least a five-year period beginning with the date 
        of its adoption.  The plan must set forth the estimated 
        schedule, timing, and details of specific capital improvements 
        by year, together with the estimated cost, the need for the 
        improvement, and sources of revenue to pay for the improvement.  
        In preparing the capital improvement plan, the city council 
        governing body must consider for each project and for the 
        overall plan: 
           (1) the condition of the city's municipality's existing 
        infrastructure, including the projected need for repair or 
        replacement; 
           (2) the likely demand for the improvement; 
           (3) the estimated cost of the improvement; 
           (4) the available public resources; 
           (5) the level of overlapping debt in the city municipality; 
           (6) the relative benefits and costs of alternative uses of 
        the funds; 
           (7) operating costs of the proposed improvements; and 
           (8) alternatives for providing services most efficiently 
        through shared facilities with other cities municipalities or 
        local government units. 
           (b) The capital improvement plan and annual amendments to 
        it must be approved by the city council governing body after 
        public hearing. 
           Sec. 30.  Minnesota Statutes 2004, section 475.521, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LIMITATIONS ON AMOUNT.] A city municipality may 
        not issue bonds under this section if the maximum amount of 
        principal and interest to become due in any year on all the 
        outstanding bonds issued under this section, including the bonds 
        to be issued, will equal or exceed 0.05367 0.16 percent of the 
        taxable market value of property in the county municipality.  
        Calculation of the limit must be made using the taxable market 
        value for the taxes payable year in which the obligations are 
        issued and sold.  In the case of a municipality with a 
        population of 2,500 or more, the bonds are subject to the net 
        debt limits under section 475.53.  In the case of a shared 
        facility in which more than one municipality participates, upon 
        compliance by each participating municipality with the 
        requirements of subdivision 2, the limitations in this 
        subdivision and the net debt represented by the bonds shall be 
        allocated to each participating municipality in proportion to 
        its required financial contribution to the financing of the 
        shared facility, as set forth in the joint powers agreement 
        relating to the shared facility.  This section does not limit 
        the authority to issue bonds under any other special or general 
        law. 
           Sec. 31.  Minnesota Statutes 2004, section 475.58, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [STREET RECONSTRUCTION.] (a) A municipality may, 
        without regard to the election requirement under subdivision 1, 
        issue and sell obligations for street reconstruction, if the 
        following conditions are met: 
           (1) the streets are reconstructed under a street 
        reconstruction plan that describes the streets to be 
        reconstructed, the estimated costs, and any planned 
        reconstruction of other streets in the municipality over the 
        next five years, and the plan and issuance of the obligations 
        has been approved by a vote of all of the members of the 
        governing body following a public hearing for which notice has 
        been published in the official newspaper at least ten days but 
        not more than 28 days prior to the hearing; and 
           (2) if a petition requesting a vote on the issuance is 
        signed by voters equal to five percent of the votes cast in the 
        last municipal general election and is filed with the municipal 
        clerk within 30 days of the public hearing, the municipality may 
        issue the bonds only after obtaining the approval of a majority 
        of the voters voting on the question of the issuance of the 
        obligations. 
           (b) Obligations issued under this subdivision are subject 
        to the debt limit of the municipality and are not excluded from 
        net debt under section 475.51, subdivision 4. 
           (c) For purposes of this subdivision, street reconstruction 
        includes utility replacement and relocation and other activities 
        incidental to the street reconstruction, but turn lanes and 
        other improvements having a substantial public safety function, 
        realignments, other modifications to intersect with state and 
        county roads, and the local share of state and county road 
        projects. 
           (d) Except in the case of turn lanes, safety improvements, 
        realignments, intersection modifications, and the local share of 
        state and county road projects, street reconstruction does not 
        include the portion of project cost allocable to widening a 
        street or adding curbs and gutters where none previously existed.
           Sec. 32.  Minnesota Statutes 2004, section 477A.013, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [LEVY ADJUSTMENTS FOR AID 
        DECREASES.] Notwithstanding any local ordinance or charter 
        provision, a city whose certified aid under subdivision 9 is 
        less than the amount it received in the previous year under the 
        same subdivision may increase its levy payable in the same year 
        as the certified aid is paid by an amount equal to the aid 
        decrease for that year. 
           [EFFECTIVE DATE.] This section is effective beginning with 
        property tax levies payable in 2006 and thereafter. 
           Sec. 33.  Laws 1996, chapter 412, article 5, section 24, is 
        amended to read: 
           Sec. 24.  [BONDS PAID FROM TACONITE PRODUCTION TAX 
        REVENUES.] 
           Subdivision 1.  [REFUNDING BONDS.] The appropriation of 
        funds from the distribution of taconite production tax revenues 
        to the taconite environmental protection tax fund and the 
        northeast Minnesota economic protection fund made by Laws 1988, 
        chapter 718, article 7, sections 62 and 63, Laws 1989, chapter 
        329, article 5, section 20, Laws 1990, chapter 604, article 8, 
        section 13, Laws 1992, chapter 499, article 5, section 29, and 
        by sections 18 to 20 Laws 1996, chapter 412, article 5, sections 
        20 to 22, and Laws 2000, chapter 489, article 5, sections 24 to 
        26, shall continue to apply to bonds issued under Minnesota 
        Statutes, chapter 475, to refund bonds originally issued 
        pursuant to those chapters. 
           Subd. 2.  [LOCAL PAYMENTS.] School districts that are 
        required in Laws 1988, chapter 718, article 7, sections 62 and 
        63, Laws 1989, chapter 329, article 5, section 20, Laws 1990, 
        chapter 604, article 8, section 13, Laws 1992, chapter 499, 
        article 5, section 29, and by sections 18 to 20 Laws 1996, 
        chapter 412, article 5, sections 20 to 22, and Laws 2000, 
        chapter 489, article 5, sections 24 to 26, to impose levies to 
        pay debt service on the bonds issued under those provisions to 
        the extent the principal and interest on the bonds is not paid 
        by distributions from the taconite environmental protection fund 
        and the northeast Minnesota economic protection trust, may pay 
        their portion of the principal and interest from any funds 
        available to them.  To the extent a school district uses funds 
        other than the proceeds of a property tax levy to pay its share 
        of the principal and interest on the bonds, the requirement to 
        impose a property tax to pay the local share does not apply to 
        the school district. 
           Sec. 34.  Laws 2003, chapter 127, article 12, section 38, 
        is amended to read: 
           Sec. 38.  [MEMBERS MUST AUTHORITY TO LEVY TAXES FOR 
        AUTHORITY.] 
           (a) A member shall, at the request of the authority, levy a 
        tax in any year for the benefit of the authority.  The authority 
        is a special taxing district as defined in Minnesota Statutes, 
        section 275.066, clause (13), with the power to adopt and 
        certify a property tax levy to the county auditor.  The 
        authority may levy a tax in any year for the benefit of the 
        authority.  The tax is, for each member, is a pro rata portion 
        of the total amount of tax requested by the authority based on 
        the taxable market value within a the member's jurisdiction, but 
        in no event may the tax in any year exceed 0.01813 percent of 
        taxable market value.  For purposes of this section, "taxable 
        market value" has the meaning as given in Minnesota Statutes, 
        section 273.032. 
           (b) The treasurer of each member city or town shall, within 
        15 days after receiving the property tax settlements from the 
        county treasurer, pay to the treasurer of the authority the 
        amount collected for this purpose.  The money must be used by 
        the authority for the purposes provided by sections 35 to 41. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        levied in 2005, payable in 2006, and thereafter. 
           Sec. 35.  [CITY OF BEMIDJI; DURATION EXTENSION FOR TAX 
        ABATEMENT.] 
           Notwithstanding the limitation in Minnesota Statutes, 
        section 469.1813, subdivision 6, the city of Bemidji may extend 
        the duration of the tax abatement given to support development 
        within the fairgrounds district of the city for an additional 
        four years beyond the duration permitted under that section. 
           Sec. 36.  [TOWN OF WHITE; OBLIGATIONS AUTHORIZED.] 
           Subdivision 1.  [OBLIGATIONS.] Notwithstanding any 
        provision of law or charter to the contrary, the town of White 
        may pledge its general obligation, as defined in Minnesota 
        Statutes, section 475.51, subdivision 10, to secure the 
        financing of local improvements as provided in this section. 
           Subd. 2.  [SPECIAL RULES.] (a) The obligations are subject 
        to the provisions of Minnesota Statutes, chapter 429, except as 
        provided in this subdivision. 
           (b) The obligations must be issued to finance: 
           (1) the cost of local improvements described in Minnesota 
        Statutes, section 429.021, located within the area referred to 
        in Laws 2003, chapter 119, section 2; 
           (2) any reserves required to market the obligation; and 
           (3) the costs of issuing the obligations. 
           (c) The obligations must be additionally secured by special 
        assessments levied or to be levied by the city of Biwabik within 
        the area referred to in paragraph (b). 
           (d) The pledge of special assessments by the city of 
        Biwabik for the payment of the obligations must be made by 
        written agreement by and between the town of White and the city 
        of Biwabik and must be filed with the county auditor. 
           (e) Notwithstanding Minnesota Statutes, section 475.58, no 
        election is required to approve the obligations. 
           (f) The obligations are not included in computing any debt 
        limitation applicable to the town of White or the city of 
        Biwabik, and the levy of taxes under Minnesota Statutes, section 
        475.61, to pay principal of and interest on the obligations is 
        not subject to any levy limitation. 
           [EFFECTIVE DATE.] This section is effective upon local 
        approval by the town of White and the city of Biwabik in 
        compliance with the requirements of Minnesota Statutes, section 
        645.021. 
           Sec. 37.  [SAUK RIVER WATERSHED DISTRICT.] 
           Notwithstanding Minnesota Statutes, section 103D.905, 
        subdivision 3, the Sauk River Watershed District may annually 
        levy up to 0.01 percent of taxable market value for its general 
        fund. 
           [EFFECTIVE DATE.] This section is effective, without local 
        approval, beginning with the taxes levied in 2005, payable in 
        2006. 
           Sec. 38.  [CITY OF ST. PAUL; RIVERCENTRE COMPLEX 
        OPERATION.] 
           Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given them. 
           (b) "City" means the city of St. Paul, its mayor, city 
        council, and any other board, authority, commission, or officer 
        authorized by law, charter, or ordinance to exercise city powers 
        of the nature referred to in this section. 
           (c) "RiverCentre complex" means collectively the 
        auditorium; convention, conference and education center; arena; 
        and parking ramp facilities presently and commonly known as the 
        Roy Wilkins Auditorium, St. Paul RiverCentre, Xcel Energy 
        Center, and RiverCentre Parking Ramp, including all property, 
        real or personal, tangible or intangible, located in the city, 
        intended to be used as part of the RiverCentre complex or 
        additions to or extensions of it. 
           Subd. 2.  [CREATION OF NONPROFIT ORGANIZATION.] As required 
        under Minnesota Statutes, section 465.717, and notwithstanding 
        any other law, city charter provision, or ordinance to the 
        contrary, the city of St. Paul may participate in the creation 
        of a nonprofit organization for the purposes provided in this 
        section. 
           Subd. 3.  [GOVERNING BOARD.] (a) The mayor of the city, 
        subject to approval by the city council, shall appoint a 
        majority of the members of the governing board of the nonprofit 
        organization performing all or a part of the activities 
        necessary to carry out the purposes specified in this section.  
        The mayor may designate any officer or employee of the city to 
        serve as a member of the governing board of any nonprofit 
        organization. 
           (b) In addition to the appointments made by the mayor under 
        paragraph (a), the mayor shall designate three members of the 
        city council to serve on the governing board of the nonprofit 
        organization. 
           (c) Notwithstanding any provision contained in the articles 
        of incorporation and bylaws of the nonprofit organization, any 
        member of the governing board appointed by the mayor may be 
        removed only by the mayor for cause. 
           (d) The governing board of the nonprofit organization shall 
        select, subject to the approval of the mayor, a president to 
        serve as chief executive officer and general manager of the 
        nonprofit organization. 
           (e) The procedures in Minnesota Statutes, section 317A.255, 
        subdivision 1, paragraph (b), relating to director conflicts of 
        interest, are not required if the contract or other transaction 
        is between the city and the nonprofit organization. 
           Subd. 4.  [RIVERCENTRE MANAGEMENT; AUTHORITY TO CONTRACT 
        WITH NONPROFIT ORGANIZATION.] The city may enter into an 
        agreement with the nonprofit organization created in subdivision 
        2 to equip, maintain, manage, and operate all or a portion of 
        the RiverCentre complex and to manage and operate a convention 
        bureau to market and promote the city as a tourist or convention 
        center.  Except as otherwise provided in this section, the 
        nonprofit organization may only contract and utilize and expend 
        funds for these purposes under the direction of its governing 
        board, subject to the accounting, financial reporting, and other 
        conditions that the city may prescribe in a contract made under 
        this section between the city and the nonprofit organization.  
        The nonprofit organization may use the services of the office of 
        the city attorney and the city's purchasing department.  All 
        activities performed to carry out these purposes are deemed to 
        be for a public purpose. 
           Subd. 5.  [BONDHOLDERS' RIGHTS AND RIVERCENTRE COMPLEX TAX 
        EXEMPTIONS PRESERVED.] (a) The city must protect the rights of 
        holders of bonds issued for the RiverCentre complex, including 
        preserving the tax-exempt status of the bonds. 
           (b) The use and operation of the RiverCentre complex by the 
        nonprofit organization with which the city contracts under this 
        act is a use, lease, or occupancy for public, governmental, and 
        municipal purposes, and the complex is exempt from taxation by 
        the state or any political subdivision of the state during such 
        use, to the extent it would be exempt if the complex was 
        equipped, maintained, managed, and operated by the city. 
           (c) Gross receipts of tickets and admissions to events at 
        the RiverCentre complex sponsored by the nonprofit organization 
        created in this section do not qualify for the sales tax 
        exemption under Minnesota Statutes, section 297A.70, subdivision 
        10. 
           Subd. 6.  [APPLICABLE GENERAL LAWS.] The following statutes 
        apply to the nonprofit organization with which the city 
        contracts under this section the same as they apply to the city: 
           (1) Minnesota Statutes, chapter 13D, the Minnesota Open 
        Meeting Law; and 
           (2) Minnesota Statutes, chapter 13, the Government Data 
        Practices Act. 
           Subd. 7.  [SUCCESSION.] The nonprofit organization with 
        which the city contracts under this section is the successor to 
        all powers, rights, assets, privileges, and interests held and 
        enjoyed by the RiverCentre authority on the effective date of 
        this section, and established by the provisions of Laws 1967, 
        chapter 459, sections 1, 2, 4, and 8, subdivisions 2 and 3, 
        clause (3), as amended; Laws 1982, chapter 523, article 25, 
        sections 4 and 5; Laws 1998, chapter 404, sections 81 and 82; 
        and Minnesota Statutes, section 297A.98.  On the effective date 
        of the contract between the city and the nonprofit organization 
        authorized by this section, the RiverCentre authority ceases to 
        exist for only so long as the contract is in effect, and all 
        other laws or provisions specifically relating to the 
        RiverCentre authority and the RiverCentre complex that are not 
        otherwise referenced in this section, do not apply to the 
        nonprofit organization. 
           Subd. 8.  [LIABILITY.] The nonprofit organization with 
        which the city contracts under this section is a "municipality," 
        and the officers, directors, employees, and agents of the 
        nonprofit organization are "employees, officers, or agents," 
        under Minnesota Statutes, chapter 466, relating to tort 
        liability.  The city must defend, save harmless, and indemnify 
        the nonprofit organization, including the nonprofit's officers, 
        directors, employees, and agents, against any claim or demand 
        arising out of the nonprofit organization's performance under 
        the contract. 
           [EFFECTIVE DATE.] This section is effective the day after 
        the city council and the chief clerical officer of the city of 
        St. Paul have timely completed their compliance with Minnesota 
        Statutes, section 645.023, subdivisions 2 and 3. 
           Sec. 39.  [IRON RANGE RESOURCES AND REHABILITATION 
        COMMISSIONER; BONDS AUTHORIZED.] 
           Subdivision 1.  [ISSUANCE; PURPOSE.] Notwithstanding any 
        provision of Minnesota Statutes, chapter 298, to the contrary, 
        the commissioner of Iron Range resources and rehabilitation may 
        issue revenue bonds in a principal amount of $15,000,000 in one 
        or more series, and bonds to refund those bonds.  The proceeds 
        of the bonds must be used to make grants to school districts 
        located in the taconite tax relief area defined in Minnesota 
        Statutes, section 273.134, or the taconite assistance area 
        defined in Minnesota Statutes, section 273.1341, to be used by 
        the school districts to pay for health, safety, and maintenance 
        improvements but only if the school district has levied the 
        maximum amount allowable under law for those purposes. 
           Subd. 2.  [APPROPRIATION.] There is annually appropriated 
        from the distribution of taconite production tax revenues to the 
        taconite environmental protection fund pursuant to Minnesota 
        Statutes, section 298.28, subdivision 11, and to the Douglas J. 
        Johnson economic protection trust pursuant to Minnesota 
        Statutes, section 298.28, subdivisions 9 and 11, in equal 
        shares, an amount sufficient to pay when due the principal and 
        interest on the bonds issued pursuant to subdivision 1.  If the 
        annual distribution to the Douglas J. Johnson economic 
        protection trust is insufficient to pay its share after 
        fulfilling any obligations of the trust under Minnesota 
        Statutes, section 298.225 or 298.293, the deficiency is 
        appropriated from the taconite environmental protection fund.  
        The appropriation under this subdivision terminates upon payment 
        or maturity of the last of the bonds issued under this section. 
           Subd. 3.  [CREDIT ENHANCEMENT.] The bonds issued under this 
        section are "debt obligations" and the commissioner of Iron 
        Range resources and rehabilitation is a "district" for purposes 
        of Minnesota Statutes, section 126C.55, provided that advances 
        made under Minnesota Statutes, section 126C.55, subdivision 2, 
        are not subject to Minnesota Statutes, section 126C.55, 
        subdivisions 4 to 7.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 40.  [CROW WING COUNTY SEWER DISTRICT; PILOT PROJECT.] 
           Subdivision 1.  [POWERS.] In addition to the powers granted 
        in Minnesota Statutes, chapter 116A, the county board for Crow 
        Wing County, by resolution, may grant the following powers to a 
        sewer district created by the county board under Minnesota 
        Statutes, chapter 116A: 
           (1) provide that an authorized representative of the 
        district, after presentation of credentials, may enter at 
        reasonable times any premise to inspect or maintain an 
        individual sewage treatment system, as defined in Minnesota 
        Statutes, section 115.55, subdivision 1, paragraph (g); 
           (2) include areas of the county within the sewer district 
        that are not contiguous and establish different systems for 
        wastewater treatment in specific areas of the county; 
           (3) provide that each special service area that is managed 
        by the sewer system or combination thereof constitutes a system 
        under Minnesota Statutes, chapter 116A; 
           (4) delegate to the sewer district, by resolution, all or a 
        portion of its administrative and enforcement obligations with 
        respect to individual sewage treatment systems under Minnesota 
        Statutes, chapter 115, and rules adopted by the Pollution 
        Control Agency; 
           (5) modify any individual sewage treatment system to 
        provide reasonable access to it for inspection and maintenance; 
        and 
           (6) neither the approval nor the waiver of the county 
        board, nor confirmation by order of the district court, is 
        required for the sewer commission to exercise the powers set 
        forth in Minnesota Statutes, section 116A.24. 
           Subd. 2.  [REPORT.] If the Crow Wing County Board exercises 
        the powers granted under subdivision 1, the county shall report 
        by January 15, 2009, to the senate and house committees with 
        jurisdiction over environmental policy and taxes on the 
        establishment and operation of the sewer district.  The report 
        must include: 
           (1) a description of the implementation of the additional 
        powers granted under subdivision 1; 
           (2) available information on the effectiveness of the 
        additional powers to control pollution in the county; and 
           (3) any recommendations for changes to Minnesota Statutes, 
        chapter 116A, to broaden the authority for sewer districts to 
        include any of the additional powers granted under subdivision 1.
           [EFFECTIVE DATE.] This section is effective the day 
        following compliance with Minnesota Statutes, section 645.021, 
        subdivision 2. 
           Sec. 41.  [CITY OF WHITE BEAR LAKE.] 
           Subdivision 1.  [PAYMENT REQUIRED.] The commissioner of 
        revenue must make payments of $52,482 on each of July 20, 2005, 
        and December 26, 2005, to the city of White Bear Lake. 
           Subd. 2.  [APPROPRIATION.] $104,964 is appropriated from 
        the general fund to the commissioner of revenue to make the 
        payments required in this section. 
           Sec. 42.  [APPLICATION.] 
           Sections 18, 19, 20, and 43 apply in the counties of Anoka, 
        Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
           Sec. 43.  [REPEALER.] 
           Minnesota Statutes 2004, sections 473.197, subdivisions 1, 
        2, 3, and 5; and 473.39, subdivision 1f, are repealed. 
           Sec. 44.  [EFFECTIVE DATE.] 
           (a) Section 1 is effective the day after the city council 
        and the chief clerical officer of the city of St. Paul have 
        timely completed their compliance with Minnesota Statutes, 
        section 645.023, subdivisions 2 and 3. 
           (b) Except as otherwise provided, this article is effective 
        the day following final enactment. 

                                   ARTICLE 2 
                            TAX INCREMENT FINANCING
           Section 1.  Minnesota Statutes 2004, section 116J.556, is 
        amended to read: 
           116J.556 [LOCAL MATCH REQUIREMENT.] 
           (a) In order to qualify for a grant under sections 116J.551 
        to 116J.557, the municipality must pay for at least one-quarter 
        of the project costs as a local match.  The municipality shall 
        pay an amount of the project costs equal to at least 12 percent 
        of the cleanup costs from the municipality's general fund, a 
        property tax levy for that purpose, or other unrestricted money 
        available to the municipality (excluding tax increments).  These 
        unrestricted moneys may be spent for project costs, other than 
        cleanup costs, and qualify for the local match payment equal to 
        12 percent of cleanup costs.  The rest of the local match may be 
        paid with tax increments, regional, state, or federal money 
        available for the redevelopment of brownfields or any other 
        money available to the municipality. 
           (b) If the development authority establishes a tax 
        increment financing district or hazardous substance subdistrict 
        on the site to pay for part of the local match requirement, the 
        district or subdistrict must be decertified when an amount of 
        tax increments equal to no more than three times the costs of 
        implementing the response action plan for the site and the 
        administrative costs for the district or subdistrict have been 
        received, after deducting the amount of the state grant. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 272.02, 
        subdivision 64, is amended 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 employment 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. 
           (e) This subdivision does not apply to captured net tax 
        capacity in a tax increment financing district to the extent 
        necessary to meet the debt repayment obligations of the 
        authority if the property is also located within an agricultural 
        processing zone. 
           [EFFECTIVE DATE.] This section is effective beginning for 
        taxes payable in 2006. 
           Sec. 3.  Minnesota Statutes 2004, section 272.0212, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTION.] All qualified property in a 
        zone is exempt to the extent and for a period up to the duration 
        provided by the zone designation and under sections 469.1731 to 
        469.1735. 
           [EFFECTIVE DATE.] This section is effective for development 
        agreements approved after the day following final enactment and 
        beginning for property taxes payable in 2006. 
           Sec. 4.  Minnesota Statutes 2004, section 272.0212, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMITS ON EXEMPTION.] (a) Property in a zone is 
        not exempt under this section from the following: 
           (1) special assessments; 
           (2) ad valorem property taxes specifically levied for the 
        payment of principal and interest on debt obligations; and 
           (3) all taxes levied by a school district, except school 
        referendum levies as defined in section 126C.17. 
           (b) The city may limit the property tax exemption to a 
        shorter period than the duration of the zone or to a percentage 
        of the property taxes payable or both. 
           [EFFECTIVE DATE.] This section is effective for development 
        agreements approved after the day following final enactment and 
        beginning for property taxes payable in 2006. 
           Sec. 5.  Minnesota Statutes 2004, section 469.174, 
        subdivision 11, is amended to read: 
           Subd. 11.  [HOUSING DISTRICT.] "Housing district" means a 
        type of tax increment financing district which consists of a 
        project, or a portion of a project, intended for occupancy, in 
        part, by persons or families of low and moderate income, as 
        defined in chapter 462A, Title II of the National Housing Act of 
        1934, the National Housing Act of 1959, the United States 
        Housing Act of 1937, as amended, Title V of the Housing Act of 
        1949, as amended, any other similar present or future federal, 
        state, or municipal legislation, or the regulations promulgated 
        under any of those acts.  A district does not qualify as a 
        housing district under this subdivision if the fair market value 
        of the improvements which are constructed in the district for 
        commercial uses or for uses other than low and moderate income 
        housing consists of more than 20 percent of the total fair 
        market value of the planned improvements in the development plan 
        or agreement.  The fair market value of the improvements may be 
        determined using the cost of construction, capitalized income, 
        or other appropriate method of estimating market value, and that 
        satisfies the requirements of section 469.1761.  Housing project 
        means a project, or a portion of a project, that meets all of 
        the qualifications of a housing district under this subdivision, 
        whether or not actually established as a housing district. 
           [EFFECTIVE DATE.] This section is effective for districts 
        for which the request for certification was filed with the 
        county auditor after October 5, 1989, except (1) the new 
        language is effective for requests for certification made after 
        June 30, 2005, and (2) the fair market value of the improvements 
        which are constructed for commercial uses in a district for 
        which the request for certification was filed with the county 
        auditor after October 5, 1989, and before July 1, 2005, may not 
        exceed more than 20 percent of total fair market value of the 
        planned improvements in the development plan or agreement. 
           Sec. 6.  Minnesota Statutes 2004, section 469.174, 
        subdivision 25, is amended to read: 
           Subd. 25.  [INCREMENT.] "Increment," "tax increment," "tax 
        increment revenues," "revenues derived from tax increment," and 
        other similar terms for a district include: 
           (1) taxes paid by the captured net tax capacity, but 
        excluding any excess taxes, as computed under section 469.177; 
           (2) the proceeds from the sale or lease of property, 
        tangible or intangible, to the extent the property was purchased 
        by the authority with tax increments; 
           (3) principal and interest received on loans or other 
        advances made by the authority with tax increments; and 
           (4) interest or other investment earnings on or from tax 
        increments; 
           (5) repayments or return of tax increments made to the 
        authority under agreements for districts for which the request 
        for certification was made after August 1, 1993; and 
           (6) the market value homestead credit paid to the authority 
        under section 273.1384. 
           [EFFECTIVE DATE.] This section is effective for tax 
        increment financing districts, regardless of when the request 
        for certification was made, including districts for which the 
        request for certification was made before August 1, 1979, 
        provided that the amendment to clause (2) applies only to the 
        extent that the underlying provisions of clause (2) apply to the 
        district and to the sale or lease under prior law.  This 
        effective date does not affect the application of clause (1), 
        (3), or (4). 
           Sec. 7.  Minnesota Statutes 2004, section 469.175, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] A tax 
        increment financing plan shall contain:  
           (1) a statement of objectives of an authority for the 
        improvement of a project; 
           (2) a statement as to the development program for the 
        project, including the property within the project, if any, that 
        the authority intends to acquire, identified by parcel number, 
        identifiable property name, block, or other appropriate means 
        indicating the area in which the authority intends to acquire 
        properties; 
           (3) a list of any development activities that the plan 
        proposes to take place within the project, for which contracts 
        have been entered into at the time of the preparation of the 
        plan, including the names of the parties to the contract, the 
        activity governed by the contract, the cost stated in the 
        contract, and the expected date of completion of that activity; 
           (4) identification or description of the type of any other 
        specific development reasonably expected to take place within 
        the project, and the date when the development is likely to 
        occur; 
           (5) estimates of the following:  
           (i) cost of the project, including administrative expenses, 
        except that if part of the cost of the project is paid or 
        financed with increment from the tax increment financing 
        district, the tax increment financing plan for the district must 
        contain an estimate of the amount of the cost of the project, 
        including administrative expenses, that will be paid or financed 
        with tax increments from the district; 
           (ii) amount of bonded indebtedness to be incurred; 
           (iii) sources of revenue to finance or otherwise pay public 
        costs; 
           (iv) the most recent net tax capacity of taxable real 
        property within the tax increment financing district and within 
        any subdistrict; 
           (v) the estimated captured net tax capacity of the tax 
        increment financing district at completion; and 
           (vi) the duration of the tax increment financing district's 
        and any subdistrict's existence; 
           (6) statements of the authority's alternate estimates of 
        the impact of tax increment financing on the net tax capacities 
        of all taxing jurisdictions in which the tax increment financing 
        district is located in whole or in part.  For purposes of one 
        statement, the authority shall assume that the estimated 
        captured net tax capacity would be available to the taxing 
        jurisdictions without creation of the district, and for purposes 
        of the second statement, the authority shall assume that none of 
        the estimated captured net tax capacity would be available to 
        the taxing jurisdictions without creation of the district or 
        subdistrict; 
           (7) identification and description of studies and analyses 
        used to make the determination set forth in subdivision 3, 
        clause (2); and 
           (8) identification of all parcels to be included in the 
        district or any subdistrict. 
           [EFFECTIVE DATE.] This section is effective for tax 
        increment financing plans and amendments to tax increment 
        financing plans approved after June 30, 2005. 
           Sec. 8.  Minnesota Statutes 2004, section 469.175, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONSULTATIONS; COMMENT AND FILING.] (a) Before 
        formation of a tax increment financing district, the authority 
        shall provide the county auditor and clerk of the school board 
        with the proposed tax increment financing plan for the district 
        and the authority's estimate of the fiscal and economic 
        implications of the proposed tax increment financing district.  
        The authority must provide the proposed tax increment financing 
        plan and the information on the fiscal and economic implications 
        of the plan to the county auditor and the clerk of the school 
        district board at least 30 days before the public hearing 
        required by subdivision 3.  The information on the fiscal and 
        economic implications may be included in or as part of the tax 
        increment financing plan.  The county auditor and clerk of the 
        school board shall provide copies to the members of the boards, 
        as directed by their respective boards.  The 30-day requirement 
        is waived if the boards of the county and school district submit 
        written comments on the proposal and any modification of the 
        proposal to the authority after receipt of the information.  
           (b) For purposes of this subdivision, "fiscal and economic 
        implications of the proposed tax increment financing district" 
        includes: 
           (1) an estimate of the total amount of tax increment that 
        will be generated over the life of the district; 
           (2) a description of the probable impact of the district on 
        city-provided services such as police and fire protection, 
        public infrastructure, and borrowing costs attributable to the 
        district; 
           (3) the estimated amount of tax increments over the life of 
        the district that would be attributable to school district 
        levies, assuming the school district's share of the total local 
        tax rate for all taxing jurisdictions remained the same; 
           (4) the estimated amount of tax increments over the life of 
        the district that would be attributable to county levies, 
        assuming the county's share of the total local tax rate for all 
        taxing jurisdictions remained the same; and 
           (5) any additional information requested by the county or 
        the school district that would enable it to determine additional 
        costs that will accrue to it due to the development proposed for 
        the district. 
           [EFFECTIVE DATE.] This section is effective for all 
        districts for which certification is requested after December 
        31, 2005. 
           Sec. 9.  Minnesota Statutes 2004, section 469.175, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [FILING PLAN WITH STATE.] (a) The authority must 
        file a copy of the tax increment financing plan and amendments 
        to the plan with the commissioner of revenue and the state 
        auditor.  The authority must also file a copy of the development 
        plan or the project plan for the project area with the 
        commissioner of revenue.  The commissioner of revenue shall 
        provide a copy of a plan to the state auditor upon request and 
        the state auditor. 
           (b) Filing under this subdivision must be made within 60 
        days after the latest of: 
           (1) the filing of the request for certification of the 
        district; 
           (2) approval of the plan by the municipality; or 
           (3) adoption of the plan by the authority. 
           [EFFECTIVE DATE.] This section is effective for plans and 
        amendments approved after June 30, 2005.  
           Sec. 10.  Minnesota Statutes 2004, section 469.175, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ANNUAL DISCLOSURE.] An annual statement showing 
        for each district the information required to be reported under 
        subdivision 6, paragraph (c), clauses (1), (2), (3), (11), 
        (12), (20), and (21) (18), and (19); the amounts of tax 
        increment received and expended in the reporting period; and any 
        additional information the authority deems necessary must be 
        published in a newspaper of general circulation in the 
        municipality that approved the tax increment financing plan.  
        The annual statement must inform readers that additional 
        information regarding each district may be obtained from the 
        authority, and must explain how the additional information may 
        be requested.  The authority must publish the annual statement 
        for a year no later than August 15 of the next year.  The 
        authority must identify the newspaper of general circulation in 
        the municipality to which the annual statement has been or will 
        be submitted for publication and provide a copy of the annual 
        statement to the county board, the county auditor, the school 
        board, the state auditor, and, if the authority is other than 
        the municipality, the governing body of the municipality on or 
        before August 1 of the year in which the statement must be 
        published.  
           The disclosure requirements imposed by this subdivision 
        apply to districts certified before, on, or after August 1, 1979.
           [EFFECTIVE DATE.] This section is effective for reports 
        required to be filed after December 31, 2005. 
           Sec. 11.  Minnesota Statutes 2004, section 469.175, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ANNUAL FINANCIAL REPORTING.] (a) The state 
        auditor shall develop a uniform system of accounting and 
        financial reporting for tax increment financing districts.  The 
        system of accounting and financial reporting shall, as nearly as 
        possible: 
           (1) provide for full disclosure of the sources and uses of 
        public funds in the district; 
           (2) permit comparison and reconciliation with the affected 
        local government's accounts and financial reports; 
           (3) permit auditing of the funds expended on behalf of a 
        district, including a single district that is part of a 
        multidistrict project or that is funded in part or whole through 
        the use of a development account funded with tax increments from 
        other districts or with other public money; 
           (4) be consistent with generally accepted accounting 
        principles. 
           (b) The authority must annually submit to the state auditor 
        a financial report in compliance with paragraph (a).  Copies of 
        the report must also be provided to the county auditor and to 
        the governing body of the municipality, if the authority is not 
        the municipality.  To the extent necessary to permit compliance 
        with the requirement of financial reporting, the county and any 
        other appropriate local government unit or private entity must 
        provide the necessary records or information to the authority or 
        the state auditor as provided by the system of accounting and 
        financial reporting developed pursuant to paragraph (a).  The 
        authority must submit the annual report for a year on or before 
        August 1 of the next year. 
           (c) The annual financial report must also include the 
        following items: 
           (1) the original net tax capacity of the district and any 
        subdistrict under section 469.177, subdivision 1; 
           (2) the net tax capacity for the reporting period of the 
        district and any subdistrict; 
           (3) the captured net tax capacity of the district; 
           (4) any fiscal disparity deduction from the captured net 
        tax capacity under section 469.177, subdivision 3; 
           (5) the captured net tax capacity retained for tax 
        increment financing under section 469.177, subdivision 2, 
        paragraph (a), clause (1); 
           (6) any captured net tax capacity distributed among 
        affected taxing districts under section 469.177, subdivision 2, 
        paragraph (a), clause (2); 
           (7) the type of district; 
           (8) the date the municipality approved the tax increment 
        financing plan and the date of approval of any modification of 
        the tax increment financing plan, the approval of which requires 
        notice, discussion, a public hearing, and findings under 
        subdivision 4, paragraph (a); 
           (9) the date the authority first requested certification of 
        the original net tax capacity of the district and the date of 
        the request for certification regarding any parcel added to the 
        district; 
           (10) the date the county auditor first certified the 
        original net tax capacity of the district and the date of 
        certification of the original net tax capacity of any parcel 
        added to the district; 
           (11) the month and year in which the authority has received 
        or anticipates it will receive the first increment from the 
        district; 
           (12) the date the district must be decertified; 
           (13) for the reporting period and prior years of the 
        district, the actual amount received from, at least, the 
        following categories: 
           (i) tax increments paid by the captured net tax capacity 
        retained for tax increment financing under section 469.177, 
        subdivision 2, paragraph (a), clause (1), but excluding any 
        excess taxes; 
           (ii) tax increments that are interest or other investment 
        earnings on or from tax increments; 
           (iii) tax increments that are proceeds from the sale or 
        lease of property, tangible or intangible, purchased by the 
        authority with tax increments; 
           (iv) tax increments that are repayments of loans or other 
        advances made by the authority with tax increments; 
           (v) bond or loan proceeds; 
           (vi) special assessments; 
           (vii) grants; and 
           (viii) transfers from funds not exclusively associated with 
        the district; and 
           (ix) the market value homestead credit paid to the 
        authority under section 273.1384; 
           (14) for the reporting period and for the prior years of 
        the district, the actual amount expended for, at least, the 
        following categories: 
           (i) acquisition of land and buildings through condemnation 
        or purchase; 
           (ii) site improvements or preparation costs; 
           (iii) installation of public utilities, parking facilities, 
        streets, roads, sidewalks, or other similar public improvements; 
           (iv) administrative costs, including the allocated cost of 
        the authority; 
           (v) public park facilities, facilities for social, 
        recreational, or conference purposes, or other similar public 
        improvements; and 
           (vi) transfers to funds not exclusively associated with the 
        district; 
           (15) for properties sold to developers, the total cost of 
        the property to the authority and the price paid by the 
        developer; 
           (16) the amount of any payments and the value of any 
        in-kind benefits, such as physical improvements and the use of 
        building space, that are paid or financed with tax increments 
        and are provided to another governmental unit other than the 
        municipality during the reporting period; 
           (17) the amount of any payments for activities and 
        improvements located outside of the district that are paid for 
        or financed with tax increments; 
           (18) (16) the amount of payments of principal and interest 
        that are made during the reporting period on any nondefeased: 
           (i) general obligation tax increment financing bonds; 
           (ii) other tax increment financing bonds; and 
           (iii) notes and pay-as-you-go contracts; 
           (19) (17) the principal amount, at the end of the reporting 
        period, of any nondefeased: 
           (i) general obligation tax increment financing bonds; 
           (ii) other tax increment financing bonds; and 
           (iii) notes and pay-as-you-go contracts; 
           (20) (18) the amount of principal and interest payments 
        that are due for the current calendar year on any nondefeased: 
           (i) general obligation tax increment financing bonds; 
           (ii) other tax increment financing bonds; and 
           (iii) notes and pay-as-you-go contracts; 
           (21) (19) if the fiscal disparities contribution under 
        chapter 276A or 473F for the district is computed under section 
        469.177, subdivision 3, paragraph (a), the amount of increased 
        property taxes imposed on other properties in the municipality 
        that approved the tax increment financing plan as a result of 
        the fiscal disparities contribution; 
           (22) whether the tax increment financing plan or other 
        governing document permits increment revenues to be expended: 
           (i) to pay bonds, the proceeds of which were or may be 
        expended on activities outside of the district; 
           (ii) for deposit into a common bond fund from which money 
        may be expended on activities located outside of the district; 
        or 
           (iii) to otherwise finance activities located outside of 
        the tax increment financing district; 
           (23) (20) the estimate, if any, contained in the tax 
        increment financing plan of the amount of the cost of the 
        project, including administrative expenses, that will be paid or 
        financed with tax increment; and 
           (24) (21) any additional information the state auditor may 
        require. 
           (d) The commissioner of revenue shall prescribe the method 
        of calculating the increased property taxes under paragraph (c), 
        clause (21) (19), and the form of the statement disclosing this 
        information on the annual statement under subdivision 5. 
           (e) The reporting requirements imposed by this subdivision 
        apply to districts certified before, on, and after August 1, 
        1979. 
           [EFFECTIVE DATE.] This section is effective for reports 
        required to be filed after December 31, 2005. 
           Sec. 12.  Minnesota Statutes 2004, section 469.176, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXCESS INCREMENTS.] (a) The authority shall 
        annually determine the amount of excess increments for a 
        district, if any.  This determination must be based on the tax 
        increment financing plan in effect on December 31 of the year 
        and the increments and other revenues received as of December 31 
        of the year.  The authority must spend or return the excess 
        increments under paragraph (c) within nine months after the end 
        of the year. 
           (b) For purposes of this subdivision, "excess increments" 
        equals the excess of: 
           (1) total increments collected from the district since its 
        certification, reduced by any excess increments paid under 
        paragraph (c), clause (4), for a prior year, over 
           (2) the total costs authorized by the tax increment 
        financing plan to be paid with increments from the district, 
        reduced, but not below zero, by the sum of: 
           (i) the amounts of those authorized costs that have been 
        paid from sources other than tax increments from the district; 
           (ii) revenues, other than tax increments from the district, 
        that are dedicated for or otherwise required to be used to pay 
        those authorized costs and that the authority has received and 
        that are not included in item (i); and 
           (iii) the amount of principal and interest obligations due 
        on outstanding bonds after December 31 of the year and not 
        prepaid under paragraph (c) in a prior year; and 
           (iv) increased by the sum of the transfers of increments 
        made under section 469.1763, subdivision 6, to reduce deficits 
        in other districts made by December 31 of the year. 
           (c) The authority shall use excess increment only to do one 
        or more of the following:  
           (1) prepay any outstanding bonds; 
           (2) discharge the pledge of tax increment for any 
        outstanding bonds; 
           (3) pay into an escrow account dedicated to the payment of 
        any outstanding bonds; or 
           (4) return the excess amount to the county auditor who 
        shall distribute the excess amount to the city or town, county, 
        and school district in which the tax increment financing 
        district is located in direct proportion to their respective 
        local tax rates.  
           (d) For purposes of a district for which the request for 
        certification was made prior to August 1, 1979, excess 
        increments equal the amount of increments on hand on December 
        31, less the principal and interest obligations due on 
        outstanding bonds or advances, qualifying under subdivision 1c, 
        clauses (1), (2), and (5), after December 31 of the year and not 
        prepaid under paragraph (c). 
           (e) The county auditor must report to the commissioner of 
        education the amount of any excess tax increment distributed to 
        a school district within 30 days of the distribution. 
           (f) For purposes of this subdivision, "outstanding bonds" 
        means bonds which are secured by increments from the district. 
           [EFFECTIVE DATE.] This section is effective for districts, 
        regardless of when the request for certification was made, and 
        applies to calculations of excess increments beginning in 
        calendar year 2005. 
           Sec. 13.  Minnesota Statutes 2004, section 469.176, 
        subdivision 4d, is amended to read: 
           Subd. 4d.  [HOUSING DISTRICTS.] Revenue derived from tax 
        increment from a housing district must be used solely to finance 
        the cost of housing projects as defined in section sections 
        469.174, subdivision 11, and 469.1761.  The cost of public 
        improvements directly related to the housing projects and the 
        allocated administrative expenses of the authority may be 
        included in the cost of a housing project. 
           [EFFECTIVE DATE.] This section is effective for all 
        districts to which the provisions of Minnesota Statutes, section 
        469.1761, apply. 
           Sec. 14.  Minnesota Statutes 2004, section 469.1761, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIREMENT IMPOSED.] (a) In order for a 
        tax increment financing district to qualify as a housing 
        district,: 
           (1) the income limitations provided in this section must be 
        satisfied; and 
           (2) no more than 20 percent of the square footage of 
        buildings that receive assistance from tax increments may 
        consist of commercial, retail, or other nonresidential uses.  
           (b) The requirements imposed by this section apply to 
        residential property receiving assistance financed with tax 
        increments, including interest reduction, land transfers at less 
        than the authority's cost of acquisition, utility service or 
        connections, roads, parking facilities, or other subsidies.  The 
        provisions of this section do not apply to districts located in 
        a targeted area as defined in section 462C.02, subdivision 9, 
        clause (e). 
           [EFFECTIVE DATE.] This section is effective for districts 
        for which the request for certification was made after June 30, 
        2005.  
           Sec. 15.  Minnesota Statutes 2004, section 469.1761, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RENTAL PROPERTY.] For residential rental 
        property, the property must satisfy the income requirements for 
        a qualified residential rental project as defined in section 
        142(d) of the Internal Revenue Code.  A property also satisfies 
        the requirements of section 142(d) if 50 percent of the 
        residential units in the project are occupied by individuals 
        whose income is 80 percent or less of area median gross income.  
        The requirements of this subdivision apply for the duration of 
        the tax increment financing district. 
           [EFFECTIVE DATE.] This section is effective for districts 
        for which the request for certification was made after June 30, 
        2004.  
           Sec. 16.  Minnesota Statutes 2004, 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. 
           (e) For a district created within a biotechnology and 
        health sciences industry zone as defined in section 469.330, 
        subdivision 6, tax increment derived from such a district may be 
        expended outside of the district but within the zone only for 
        expenditures required for the construction of public 
        infrastructure necessary to support the activities of the zone. 
           Sec. 17.  Minnesota Statutes 2004, section 469.1763, 
        subdivision 6, is amended to read: 
           Subd. 6.  [POOLING PERMITTED FOR DEFICITS.] (a) This 
        subdivision applies only to districts for which the request for 
        certification was made before August 1, 2001, and without regard 
        to whether the request for certification was made prior to 
        August 1, 1979. 
           (b) The municipality for the district may transfer 
        available increments from another tax increment financing 
        district located in the municipality, if the transfer is 
        necessary to eliminate a deficit in the district to which the 
        increments are transferred.  A deficit in the district for 
        purposes of this subdivision means the lesser of the following 
        two amounts: 
           (1)(i) the amount due during the calendar year to pay 
        preexisting obligations of the district; minus 
           (ii) the total increments collected or to be collected from 
        properties located within the district that are available for 
        the calendar year including amounts collected in prior years 
        that are currently available; plus 
           (iii) total increments from properties located in other 
        districts in the municipality including amounts collected in 
        prior years that are available to be used to meet the district's 
        obligations under this section, excluding this subdivision, or 
        other provisions of law (but excluding a special tax under 
        section 469.1791 and the grant program under Laws 1997, chapter 
        231, article 1, section 19, or Laws 2001, First Special Session 
        chapter 5); or 
           (2) the reduction in increments collected from properties 
        located in the district for the calendar year as a result of the 
        changes in class rates in Laws 1997, chapter 231, article 1; 
        Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, 
        and Laws 2001, First Special Session chapter 5, or the 
        elimination of the general education tax levy under Laws 2001, 
        First Special Session chapter 5. 
           The authority may compute the deficit amount under clause 
        (1) only (without regard to the limit under clause (2)) if the 
        authority makes an irrevocable commitment, by resolution, to use 
        increments from the district to which increments are to be 
        transferred and any transferred increments are only used to pay 
        preexisting obligations and administrative expenses for the 
        district that are required to be paid under section 469.176, 
        subdivision 4h, paragraph (a). 
           (c) A preexisting obligation means: 
           (1) bonds issued and sold before August 1, 2001, or bonds 
        issued pursuant to a binding contract requiring the issuance of 
        bonds entered into before July 1, 2001, and bonds issued to 
        refund such bonds or to reimburse expenditures made in 
        conjunction with a signed contractual agreement entered into 
        before August 1, 2001, to the extent that the bonds are secured 
        by a pledge of increments from the tax increment financing 
        district; and 
           (2) binding contracts entered into before August 1, 2001, 
        to the extent that the contracts require payments secured by a 
        pledge of increments from the tax increment financing district. 
           (d) The municipality may require a development authority, 
        other than a seaway port authority, to transfer available 
        increments including amounts collected in prior years that are 
        currently available for any of its tax increment financing 
        districts in the municipality to make up an insufficiency in 
        another district in the municipality, regardless of whether the 
        district was established by the development authority or another 
        development authority.  This authority applies notwithstanding 
        any law to the contrary, but applies only to a development 
        authority that: 
           (1) was established by the municipality; or 
           (2) the governing body of which is appointed, in whole or 
        part, by the municipality or an officer of the municipality or 
        which consists, in whole or part, of members of the governing 
        body of the municipality.  The municipality may use this 
        authority only after it has first used all available increments 
        of the receiving development authority to eliminate the 
        insufficiency and exercised any permitted action under section 
        469.1792, subdivision 3, for preexisting districts of the 
        receiving development authority to eliminate the insufficiency. 
           (e) The authority under this subdivision to spend tax 
        increments outside of the area of the district from which the 
        tax increments were collected: 
           (1) is an exception to the restrictions under section 
        469.176, subdivision subdivisions 4b, 4c, 4d, 4e, 4i, and 4j; 
        the expenditure limits under section 469.176, subdivision 1c; 
        and the other provisions of this section,; and the percentage 
        restrictions under subdivision 2 must be calculated after 
        deducting increments spent under this subdivision from the total 
        increments for the district; and 
           (2) applies notwithstanding the provisions of the Tax 
        Increment Financing Act in effect for districts for which the 
        request for certification was made before June 30, 1982, or any 
        other law to the contrary. 
           (f) If a preexisting obligation requires the development 
        authority to pay an amount that is limited to the increment from 
        the district or a specific development within the district and 
        if the obligation requires paying a higher amount to the extent 
        that increments are available, the municipality may determine 
        that the amount due under the preexisting obligation equals the 
        higher amount and may authorize the transfer of increments under 
        this subdivision to pay up to the higher amount.  The existence 
        of a guarantee of obligations by the individual or entity that 
        would receive the payment under this paragraph is disregarded in 
        the determination of eligibility to pool under this 
        subdivision.  The authority to transfer increments under this 
        paragraph may only be used to the extent that the payment of all 
        other preexisting obligations in the municipality due during the 
        calendar year have been satisfied. 
           (g) For transfers of increments made in calendar year 2005 
        and later, the reduction in increments as a result of the 
        elimination of the general education tax levy for purposes of 
        paragraph (b), clause (2), for a taxes payable year equals the 
        general education tax rate for the school district under 
        Minnesota Statutes 2000, section 273.1382, subdivision 1, for 
        taxes payable in 2001, multiplied by the captured tax capacity 
        of the district for the current taxes payable year.  
           [EFFECTIVE DATE.] This section applies to transfers of 
        increments made after the effective date of the original 
        enactment of Minnesota Statutes, section 469.1763, subdivision 6.
           Sec. 18.  Minnesota Statutes 2004, 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) 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) 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 market value is increased after approval of the plat under 
        section 273.11, subdivision 1 14, 14a, or 14b, 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 land 
        platted on or after August 1, 1991.  
           Sec. 19.  Minnesota Statutes 2004, section 469.1771, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DISPOSITION OF PAYMENTS.] If the authority does 
        not have sufficient increments or other available money to make 
        a payment required by this section, the municipality that 
        approved the district must use any available money to make the 
        payment including the levying of property taxes.  Money received 
        by the county auditor under this section must be distributed as 
        excess increments under section 469.176, subdivision 2, 
        paragraph (a) (c), clause (4), except that if the county auditor 
        receives the payment after (1) 60 days from a municipality's 
        receipt of the state auditor's notification under subdivision 1, 
        paragraph (c), of noncompliance requiring the payment, or (2) 
        the commencement of an action by the county attorney to compel 
        the payment, then no distributions may be made to the 
        municipality that approved the tax increment financing district. 
           [EFFECTIVE DATE.] This section is effective at the same 
        time as the amendments to Minnesota Statutes, section 469.176, 
        subdivision 2, by Laws 2003, chapter 127, article 10, section 11.
           Sec. 20.  Minnesota Statutes 2004, section 469.178, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERALLY.] Notwithstanding any other law, 
        no bonds, payment for which tax increment is pledged, shall be 
        issued in connection with any project for which tax increment 
        financing has been undertaken except as authorized in this 
        section.  The proceeds from the bonds shall be used only in 
        accordance with section 469.176, subdivision subdivisions 4 to 
        4l, as if the proceeds were tax increment, except that a tax 
        increment financing plan need not be adopted for any project for 
        which tax increment financing has been undertaken prior to 
        August 1, 1979, pursuant to laws not requiring a tax increment 
        financing plan.  The bonds are not included for purposes of 
        computing the net debt of any municipality. 
           [EFFECTIVE DATE.] This section is effective for tax 
        increment financing districts for which the request for 
        certification was made after August 1, 1979.  
           Sec. 21.  Laws 1998, chapter 389, article 11, section 19, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DURATION OF DISTRICT.] Notwithstanding the 
        provisions of Minnesota Statutes, section 469.176, subdivision 
        1b, no tax increment may be paid to the authority or the city 
        after 18 years from the date of receipt by the authority of the 
        first increment generated from the final phase of 
        redevelopment.  In no case may increments be paid to the 
        authority after 30 years from approval of the tax increment 
        plan.  "Final phase of redevelopment" means that phase of 
        redevelopment activity which completes the rehabilitation of the 
        Lake Street site. 
           [EFFECTIVE DATE.] This section is effective upon compliance 
        with Minnesota Statutes, sections 469.1782, subdivision 2, and 
        645.021, subdivision 2. 
           Sec. 22.  [EXTENSION OF TIME TO EXPEND TAX INCREMENT.] 
           Notwithstanding any contrary provision of law or charter, 
        for tax increment financing district number 3, established on 
        December 19, 1994, by Brooklyn Center Resolution No. 94-273, 
        Minnesota Statutes, section 469.1763, subdivision 3, applies to 
        the district by permitting a period of 13 years for commencement 
        of activities within the district. 
           [EFFECTIVE DATE.] This section is effective upon approval 
        by the governing body of the city of Brooklyn Center and 
        compliance with Minnesota Statutes, section 645.021, subdivision 
        3. 
           Sec. 23.  [FAIRMONT; ABATEMENT AUTHORITY.] 
           The city of Fairmont, Martin County, and Independent School 
        District No. 2752, Fairmont Area Schools, may each grant an 
        abatement under Minnesota Statutes, sections 469.1812 to 
        469.1815, for property located in tax increment financing 
        district No. 20 in the city of Fairmont, notwithstanding any law 
        to the contrary.  The total amount of the abatement for each 
        political subdivision may not exceed the taxes paid by the 
        original tax capacity of the district for each year of its 
        existence.  Notwithstanding Minnesota Statutes, section 471.87, 
        or any other law governing conflicts of interest, a local 
        elected official may have a financial interest in and benefit 
        from the tax abatement authorized in this section if the 
        official discloses the interest and potential benefit on the 
        record, and abstains from voting on the matter. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 24.  [WABASHA TAX INCREMENT FINANCING DISTRICT.] 
           Subdivision 1.  [DISTRICT EXTENSION.] The governing body of 
        the city of Wabasha may elect to compute the duration of its 
        redevelopment tax increment financing district number 3 without 
        regard to any increment received for taxes payable in 2001.  
           Subd. 2.  [FIVE-YEAR RULE.] The requirements of Minnesota 
        Statutes, section 469.1763, subdivision 3, that activities must 
        be undertaken within a five-year period from the date of 
        certification of a tax increment financing district must be 
        considered to be met for the city of Wabasha redevelopment tax 
        increment district number 3, if the activities are undertaken 
        within ten years from the date of certification of the district. 
           Subd. 3.  [NATIONAL EAGLE CENTER.] Notwithstanding the 
        provisions of Minnesota Statutes, section 469.176, subdivision 
        4l, or any other law, the city of Wabasha may spend the proceeds 
        of tax increment bonds issued prior to January 1, 2000, to pay 
        the costs of acquiring and constructing a National Eagle Center 
        in the city.  The city of Wabasha may also use tax increment 
        from its tax increment districts to pay the debt service on such 
        bonds, or any bonds issued to refund such bonds, subject to 
        legal restrictions on the pooling of tax increment.  These bonds 
        may not be treated as preexisting obligations under Minnesota 
        Statutes, section 469.1794. 
           [EFFECTIVE DATE.] Subdivision 1 is effective upon 
        compliance with Minnesota Statutes, sections 469.1782, 
        subdivision 2, and 645.021.  Subdivisions 2 and 3 are effective 
        upon compliance by the governing body of the city of Wabasha 
        with Minnesota Statutes, section 645.021. 
           Sec. 25.  [CITY OF RICHFIELD; TAX INCREMENT FINANCING 
        DISTRICT.] 
           Subdivision 1.  [AUTHORIZATION.] The city of Richfield may 
        create a tax increment financing district consisting of an area 
        lying west of Trunk Highway 77 extending:  to 16th Avenue 
        between Crosstown Highway 62 and 66th Street; to 17th Avenue 
        between 66th and 69th Streets; and to 18th Avenue between 69th 
        and 72nd Streets.  The city or its housing and redevelopment 
        authority may be the authority for the purposes of Minnesota 
        Statutes, sections 469.174 to 469.179. 
           Subd. 2.  [DISTRICT IS REDEVELOPMENT DISTRICT.] The 
        redevelopment tax increment district created pursuant to 
        subdivision 1 is deemed to be a redevelopment district and is 
        subject to Minnesota Statutes, sections 469.174 to 469.179, 
        except that: 
           (1) expenditures for activities as defined in Minnesota 
        Statutes, section 469.1763, subdivision 1, paragraph (b), 
        anywhere in the district are deemed to be the costs of 
        correcting conditions that allow the designation of 
        redevelopment districts pursuant to Minnesota Statutes, section 
        469.174, subdivision 10; and 
           (2) the five-year rule under Minnesota Statutes, section 
        469.1763, subdivision 3, does not apply. 
           [EFFECTIVE DATE.] This section is effective upon local 
        approval by the city of Richfield in compliance with Minnesota 
        Statutes, section 645.021. 
           Sec. 26.  [CITY OF MOUNDS VIEW; TAX INCREMENT FINANCING 
        DISTRICT.] 
           Subdivision 1.  [ESTABLISHMENT.] (a) The city of Mounds 
        View may establish within the corporate boundaries of the city 
        one or more economic development tax increment financing 
        districts subject to the special rules under subdivision 2.  The 
        districts must be located on property that is exempt from 
        taxation for property taxes payable in 2005 and within the area 
        defined in paragraph (b). 
           (b) For purposes of this section, "area" is bounded by, and 
        including, on the north County Road J west of Coral Sea Street 
        and 82nd Lane NE east of Coral Sea Street, on the east Coral Sea 
        Street north of 82nd Lane NE and Interstate Highway 35W south of 
        82nd Lane NE, on the south and southwest U.S. Highway 10, and on 
        the west the western boundary of Outlot A, Sysco, according to 
        the recorded plat thereof, and situated in Ramsey County, 
        Minnesota. 
           Subd. 2.  [SPECIAL RULES.] (a) If the city elects upon the 
        adoption of the tax increment financing plan for the district, 
        the rules under this section apply to the district. 
           (b) The duration limit under Minnesota Statutes, section 
        469.176, subdivision 1b, clause (3), is extended to 25 years 
        after receipt of the first increment. 
           (c) The five-year rule under Minnesota Statutes, section 
        469.1763, subdivision 3, is extended to a ten-year period. 
           (d) The limitations on spending increment outside of the 
        district under Minnesota Statutes, section 469.1763, subdivision 
        2, and on spending increment for developments more than 15 
        percent of the square footage of which is used for purposes 
        other than those listed in Minnesota Statutes, section 469.176, 
        subdivision 4c, do not apply.  Except as provided in paragraph 
        (e), increments may only be expended within the area defined in 
        subdivision 1, paragraph (b), and related to development 
        occurring within the area defined in subdivision 1, paragraph 
        (b), whether or not included in a tax increment financing 
        district.  Increments may only be spent on one or more of the 
        following costs, improvements, or activities: 
           (1) acquisition and removal of existing billboards; 
           (2) acquisition of land and easements, if the parcel is 
        occupied by a building constructed before 1990; 
           (3) sanitary sewer, sewer, and water improvements; 
           (4) road improvements; 
           (5) parking, including structured parking; 
           (6) administrative expenses; 
           (7) wetland mitigation; 
           (8) soils correction; and 
           (9) environmental cleanup.  
           (e) Increments may be expended on costs, improvements, or 
        activities outside the area defined in subdivision 1, paragraph 
        (b), wherever located, whether or not included in a tax 
        increment financing district, for sanitary sewer, sewer, and 
        water improvements and improvements to Coral Sea Street, Airport 
        Road, 82nd Lane NE, County Road J, U.S. Highway 10, and 
        Interstate Highway 35W so long as the improvements are related 
        to development within the area defined in subdivision 1, 
        paragraph (b). 
           (f) The limitation on the ability to elect the method of 
        computation under Minnesota Statutes, section 469.177, 
        subdivision 3, for an economic development district does not 
        apply and the city or authority may elect the method of 
        computation under paragraph (a) or (b) of section 469.177, 
        subdivision 3. 
           Subd. 3.  [EXPIRATION.] The authority to approve tax 
        increment financing plans to establish a tax increment financing 
        district under this section expires on December 31, 2015. 
           [EFFECTIVE DATE.] This section is effective upon approval 
        by the governing body of the city of Mounds View and upon 
        compliance by the city with Minnesota Statutes, sections 
        469.1782, subdivision 2, and 645.021, subdivision 3. 
           Sec. 27.  [CONVEYANCE OF STATE INTEREST IN REAL PROPERTY TO 
        CITY OF MOUNDS VIEW.] 
           (a) Notwithstanding Minnesota Statutes, section 16B.281, 
        16B.282, 92.45, or any other law to the contrary, the 
        commissioner of transportation shall convey to the city of 
        Mounds View all right, title, and interest of the state of 
        Minnesota created by corrective deed dated March 16, 1989, in 
        the land located in Ramsey County, described as: 
           The South Half of the Northeast Quarter of Section 5, 
           Township 30 North, Range 23 West, Ramsey County, Minnesota; 
           which lies northerly and westerly of the following 
           described line:  Commencing at the center of said Section 
           5; thence north on an azimuth of 359 degrees 23 minutes 10 
           seconds (azimuth oriented to Minnesota State Plane 
           Coordinate System) along the north and south quarter line 
           of said Section 5 for 781.42 feet to the point of beginning 
           of the line to be described; thence on an azimuth of 108 
           degrees 12 minutes 41 seconds, 231.14 feet; thence on an 
           azimuth of 98 degrees 27 minutes 03 seconds, 1486.78 feet; 
           thence run northeasterly for 447.16 feet on a nontangential 
           curve, concave to the northwest, having a radius of 720 
           feet, a delta angle of 35 degrees 35 minutes 02 seconds and 
           a chord azimuth of 76 degrees 55 minutes 11 seconds; thence 
           on an azimuth of 59 degrees 07 minutes 40 seconds, 192.89 
           feet; thence run northerly 398.14 feet on a nontangential 
           curve, concave to the northwest, having a radius of 850 
           feet, a delta angle of 26 degrees 50 minutes 15 seconds and 
           a chord azimuth of 29 degrees 26 minutes 05 seconds; thence 
           on an azimuth of 16 degrees 00 minutes 57 seconds, 303.65 
           feet to the north line of said Tract A and there 
           terminating; 
        Containing 40.41 acres, more or less. 
           (b) The conveyance shall be for consideration according to 
        paragraph (d) in a form approved by the attorney general. 
           (c) This property was acquired by the Department of 
        Transportation for construction of a new portion of Trunk 
        Highway 10 west of Interstate Highway 35W.  The property was not 
        needed for highway purposes.  In 1988, the commissioner of 
        transportation deeded the property to the city of Mounds View 
        subject to a right of reverter. 
           (d) If the city of Mounds View enters into a fully executed 
        development agreement to redevelop the land described in 
        paragraph (a) by January 1, 2007, the city shall pay the 
        commissioner of transportation $1,000,000 for deposit in the 
        trunk highway fund.  If the city of Mounds View does not enter 
        into a fully executed development agreement to redevelop the 
        land described in paragraph (a) by January 1, 2007, all right, 
        title, and interest in the land shall revert back to the 
        Department of Transportation unless the land is still used for a 
        public purpose.  If the land is not subject to a fully executed 
        development agreement and is still used for a public purpose on 
        or after January 1, 2007, the land may continue to be used for 
        such public purpose by the city of Mounds View, subject to a 
        right of reverter if the land ceases to be used for a public 
        purpose. 
           Sec. 28.  [ST. PAUL; HOUSING AND REDEVELOPMENT AUTHORITY.] 
           Subdivision 1.  [HOUSING AND REDEVELOPMENT 
        SUBDISTRICTS.] For its tax increment financing districts 
        identified in subdivision 2, the Housing and Redevelopment 
        Authority of the city of St. Paul may establish subdistricts up 
        to the number set forth for each tax increment financing 
        district in subdivision 2.  The subdistricts shall be treated as 
        set forth in subdivision 3, notwithstanding the provisions of 
        any other law to the contrary. 
           Subd. 2.  [DIVISION INTO SUBDISTRICTS; AUTHORITY.] The tax 
        increment financing districts with the following Ramsey County 
        identification numbers may be divided into a number of 
        subdistricts not to exceed the number set forth as follows:  No. 
        224/233, six subdistricts; No. 225, six subdistricts; No. 228, 
        three subdistricts; and No. 234, two subdistricts. 
           Subd. 3.  [DESIGNATION OF PARCELS.] All parcels in a tax 
        increment financing district listed in subdivision 2 must be 
        assigned to a subdistrict.  Each subdistrict established 
        pursuant to this section shall consist of those parcels in the 
        tax increment financing district which are designated by the 
        commissioners of the Housing and Redevelopment Authority of the 
        city of St. Paul by resolution, which parcels need not be 
        contiguous.  For purposes of determining tax increments and the 
        parcels treated as paying tax increments, each subdistrict shall 
        be treated as a separate tax increment district. 
           [EFFECTIVE DATE.] This section is effective the day after 
        the governing body of the city of St. Paul and its chief 
        clerical officer comply with Minnesota Statutes, section 
        645.021, subdivisions 2 and 3. 
           Sec. 29.  [CITY OF BROOKLYN PARK TAX INCREMENT FINANCING 
        DISTRICT EXTENSION.] 
           Notwithstanding Minnesota Statutes, section 469.176, 
        subdivision 1b, or any other law to the contrary, the duration 
        limit that applies to the economic development tax increment 
        financing district established under Laws 1994, chapter 587, 
        article 9, section 20, is extended to December 31, 2006.  The 
        city and county may prepare a plan for submission to the 
        legislature by February 1, 2006, providing for expenditure of 
        increment resulting from an additional duration extension of the 
        district.  The plan must specify the proposed duration 
        extension, as well the planned uses of the increment.  
           Sec. 30.  [CITY OF FERGUS FALLS; ECONOMIC DEVELOPMENT 
        PROPERTY.] 
           The provisions of Minnesota Statutes, section 272.02, 
        subdivision 39, apply to property located in the city of Fergus 
        Falls as if the city had a population of 5,000 or less. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        levied in 2005, payable in 2006, and thereafter. 
           Sec. 31.  [REPEALER.] 
           Minnesota Statutes 2004, sections 469.176, subdivision 1a; 
        and 469.1766 are repealed.  
           Laws 1994, chapter 587, article 9, section 20, subdivision 
        4, is repealed. 
           [EFFECTIVE DATE.] The repeal of Minnesota Statutes, section 
        469.1766, is effective for districts for which the request for 
        certification was made after August 1, 1993.  The repeal of 
        Minnesota Statutes, section 469.176, subdivision 1a, is 
        effective the day following final enactment, provided that 
        Minnesota Statutes, section 469.176, subdivision 1a, is 
        satisfied for any district to which it applies, if bonds have 
        been issued, property acquired, or public improvements 
        constructed before the end of the three-year period, regardless 
        of whether the action was undertaken before or after 
        certification of the district. 
           Presented to the governor May 31, 2005 
           Signed by the governor June 2, 2005, 1:45 p.m.