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                            CHAPTER 471-H.F.No. 2102 
                  An act relating to the financing and operation of 
                  government in this state; modifying certain tax rates, 
                  credits, refunds, bases, and exemptions; modifying 
                  property tax valuation and classification; changing 
                  tax increment financing, special services district, 
                  and taxing district provisions; authorizing local 
                  taxes; authorizing certain special districts; 
                  providing local levy or other authority; providing for 
                  distribution of production tax proceeds; providing for 
                  certain tax base sharing; changing certain aids; 
                  providing local performance aid; modifying revenue 
                  recapture; making tax policy, collection, 
                  administrative and technical changes, corrections, and 
                  clarifications; modifying collection of fees; 
                  requiring studies; providing for appointments; 
                  appropriating money; amending Minnesota Statutes 1994, 
                  sections 10A.31, subdivision 3a; 13.99, subdivision 
                  97a; 103E.611, subdivision 7; 115.26, by adding a 
                  subdivision; 115A.919, by adding a subdivision; 
                  115A.923, subdivision 1a; 165.08, subdivision 5; 
                  239.761, subdivision 5; 270.067, subdivision 2; 
                  270.07, subdivision 1; 270.102, subdivisions 1, 2, and 
                  3; 270.70, subdivision 2; 270A.03, subdivision 2; 
                  273.02, subdivision 3; 273.111, subdivision 3; 273.13, 
                  subdivisions 22 and 23; 273.1398, subdivision 4, and 
                  by adding a subdivision; 275.065, subdivision 5a; 
                  275.07, subdivision 4; 275.61; 278.01, by adding a 
                  subdivision; 278.08; 279.06, subdivision 1; 279.37, by 
                  adding a subdivision; 281.17; 287.06; 289A.39, 
                  subdivision 1; 289A.50, by adding a subdivision; 
                  289A.56, subdivision 4; 290.01, subdivision 4a; 
                  290.06, subdivisions 2c and 22; 290.091, subdivision 
                  2; 290.0922, subdivisions 1 and 3; 290.095, 
                  subdivision 3; 290.17, subdivision 2; 290A.25; 295.50, 
                  subdivision 6; 295.51, subdivision 1, and by adding a 
                  subdivision; 295.52, by adding a subdivision; 295.54, 
                  subdivisions 1, 2, and by adding a subdivision; 
                  296.01, subdivisions 2 and 13; 296.02, subdivision 8, 
                  and by adding a subdivision; 296.025, subdivision 6; 
                  296.141, subdivisions 4 and 5; 296.15, by adding a 
                  subdivision; 296.17, subdivision 7; 297.04, 
                  subdivision 9; 297A.14, by adding a subdivision; 
                  297A.15, subdivisions 4, 5, and 6; 297A.21, 
                  subdivision 4; 297A.211, subdivisions 1 and 3; 
                  297A.24, subdivision 1; 297A.25, subdivisions 14, 28, 
                  and 37; 297A.256, subdivision 1; 297A.2572; 297A.2573; 
                  297A.44, subdivision 1; 297A.46; 297E.02, subdivisions 
                  4 and 10; 298.01, subdivision 4e; 298.17; 298.28, 
                  subdivisions 2 and 6; 298.296, subdivision 2; 298.75, 
                  subdivision 1; 349.15, by adding a subdivision; 
                  349.154, subdivision 2; 349.19, subdivision 2, and by 
                  adding a subdivision; 375.192, subdivision 2; 383B.51; 
                  428A.01, subdivisions 2 and 3; 428A.02, subdivision 1; 
                  444.075, by adding a subdivision; 458A.32, subdivision 
                  4; 469.040, by adding a subdivision; 469.167, 
                  subdivision 2; 469.173, subdivision 7; 469.174, 
                  subdivision 2; 469.176, subdivision 4f; 469.1761, 
                  subdivision 1; 469.177, subdivision 3; 471.59, by 
                  adding a subdivision; 471.88, subdivision 14; 473.39, 
                  by adding a subdivision; 473.608, by adding a 
                  subdivision; 473.625; 477A.011, subdivisions 3, 20, 
                  27, 32, and 35; Minnesota Statutes 1995 Supplement, 
                  sections 16A.152, subdivision 2; 16A.67, subdivision 
                  5; 41A.09, subdivision 2a; 115B.48, by adding 
                  subdivisions; 115B.49, subdivisions 2 and 4; 121.904, 
                  subdivision 4a; 124A.03, subdivision 2; 216B.161, 
                  subdivision 1; 270A.03, subdivision 7; 273.11, 
                  subdivision 16; 273.124, subdivisions 1, 3, and 13; 
                  273.13, subdivision 25; 273.1398, subdivision 1; 
                  273.1399, subdivisions 6 and 7; 275.065, subdivisions 
                  3 and 6; 275.08, subdivision 1b; 276.04, subdivision 
                  2; 289A.02, subdivision 7; 289A.40, subdivision 1; 
                  290.01, subdivisions 19 and 31; 290.191, subdivisions 
                  5 and 6; 290A.04, subdivision 2h; 291.005, subdivision 
                  1; 295.50, subdivisions 3 and 4; 295.53, subdivisions 
                  1 and 5; 296.02, subdivision 1; 296.025, subdivision 
                  1; 296.12, subdivision 3; 297A.02, subdivision 4; 
                  297A.25, subdivisions 57, 59, and 61; 297A.45, 
                  subdivisions 2, 3, and 4; 297B.01, subdivision 8; 
                  298.227; 298.24, subdivision 1; 298.28, subdivision 
                  9a; 298.296, subdivision 4; 428A.05; 465.82, 
                  subdivision 2; 469.169, subdivisions 9 and 10; 
                  469.174, subdivision 4; 469.175, subdivisions 1, 5, 
                  and 6; 469.176, subdivisions 2 and 7; 471.6965; 
                  473.39, subdivision 1b; 473.448; 477A.0121, 
                  subdivision 4; 477A.0132; 477A.03, subdivision 2; 
                  501B.38, subdivision 1a; Laws 1963, chapter 118, 
                  sections 1, subdivision 3; 2; 4; and 6; Laws 1971, 
                  chapter 869, section 2, subdivisions 2, as amended; 
                  14; and 17, as added; section 3, subdivisions 5, 6, 
                  and 9; section 4, subdivisions 1, 2, and 5, as 
                  amended; section 5, subdivisions 1 and 3; section 8; 
                  section 10, subdivision 3b, as added; section 12, 
                  subdivisions 1, as amended; and 2, as amended; section 
                  17, subdivision 11; section 19; section 20, 
                  subdivision 2; section 21; and section 24; Laws 1985, 
                  chapter 302, section 2, subdivision 1, as amended; 
                  Laws 1989, chapter 211, section 4, subdivision 1; Laws 
                  1991, chapter 291, article 8, section 27; and Laws 
                  1995, chapter 264, article 2, sections 42, subdivision 
                  1; and 44; and article 5, sections 40, subdivision 1; 
                  44, subdivision 4; and 45, subdivision 1; proposing 
                  coding for new law in Minnesota Statutes, chapters 
                  103D; 115B; 276; 281; 287; 290A; 297A; 298; 315; 375; 
                  428A; and 477A; proposing coding for new law as 
                  Minnesota Statutes, chapter 276A; repealing Minnesota 
                  Statutes 1994, sections 13.99, subdivision 97; 
                  273.1398, subdivision 5b; 290.06, subdivision 21; 
                  290.092; 295.37; 295.39; 295.40; 295.41; 295.42; 
                  295.43; 295.50, subdivisions 8, 9, 9a, 11, 12, and 
                  12a; 296.25, subdivision 1a; 297A.14, subdivision 3; 
                  297A.24, subdivision 2; and 469.150; Laws 1971, 
                  chapter 869, section 6, subdivision 3; and Laws 1987, 
                  chapter 285. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                           INCOME AND FRANCHISE TAXES 
           Section 1.  Minnesota Statutes 1994, section 10A.31, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [QUALIFICATION OF POLITICAL PARTIES.] A major 
        political party as defined in section 10A.01, subdivision 12, 
        qualifies for inclusion on the income tax form and property tax 
        refund return as provided in subdivision 3, provided that it 
        qualifies as a major political party by July 1 of the taxable 
        year. 
           A minor political party as defined in section 10A.01, 
        subdivision 13 qualifies for inclusion on the income tax form 
        and property tax refund return as provided in subdivision 3, 
        provided that 
           (1) (a) if a petition is filed, it is filed by June 1 of 
        the taxable year; or 
           (b) if the party ran a candidate for statewide office, that 
        office must have been the office of governor and lieutenant 
        governor, secretary of state, state auditor, state treasurer, or 
        attorney general; and 
           (2) the secretary of state certifies to the commissioner of 
        revenue by July 1, 1984, and by July 1 of every odd-numbered 
        year thereafter the parties which qualify as minor political 
        parties under this subdivision.  
           A minor party shall be certified only if the secretary of 
        state determines that the party satisfies the following 
        conditions:  
           (a) the party meets the requirements of section 10A.01, 
        subdivision 13, and in the last applicable election ran a 
        candidate for the statewide offices listed in clause (1)(b) of 
        this subdivision; 
           (b) it is a political party, not a principal campaign 
        committee; 
           (c) it has held a state convention in the last two years, 
        adopted a state constitution, and elected state officers; and 
           (d) an officer of the party has filed with the secretary of 
        state a certification that the party held a state convention in 
        the last two years, adopted a state constitution, and elected 
        state officers. 
           Sec. 2.  Minnesota Statutes 1994, section 165.08, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXEMPTIONS.] Notwithstanding any other provision 
        of law to the contrary, the properties, moneys, and other assets 
        of any joint and independent international authority or 
        commission created under subdivision 1, all revenues or other 
        income of any such authority or commission, and all bonds, 
        certificates of indebtedness, or other obligations issued by any 
        such authority or commission, and the interest thereon, shall be 
        exempt from all taxation, licenses, fees, or charges of any kind 
        imposed by the state or by any county, municipality, political 
        subdivision, taxing district, or other public agency or body of 
        the state. 
           Sec. 3.  Minnesota Statutes 1994, section 290.01, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [FINANCIAL INSTITUTION.] (a) "Financial 
        institution" means: 
           (1) a holding company; 
           (2) any regulated financial corporation; or 
           (3) any other corporation organized under the laws of the 
        United States or organized under the laws of this state or any 
        other state or country that is carrying on the business of a 
        financial institution. 
           (b) "Holding company" means any corporation registered 
        under the Federal Bank Holding Company Act of 1956, as amended, 
        or registered as a savings and loan holding company under the 
        Federal National Housing Act, as amended. 
           (c) "Regulated financial corporation" means an institution, 
        the deposits or accounts of which are insured under the Federal 
        Deposit Insurance Act or by the Federal Savings and Loan 
        Insurance Corporation, any institution which is a member of a 
        Federal Home Loan Bank, any other bank or thrift institution 
        incorporated or organized under the laws of any state or any 
        foreign country which is engaged in the business of receiving 
        deposits, any corporation organized under the provisions of 
        United States Code, title 12, sections 611 to 631 (Edge Act 
        Corporations), and any agency of a foreign depository as defined 
        in United States Code, title 12, section 3101. 
           (d) "Business of a financial institution" means: 
           (1) the business that a regulated financial corporation may 
        be authorized to do under state or federal law or the business 
        that its subsidiary is authorized to do by the proper regulatory 
        authorities; 
           (2) the business that any corporation organized under the 
        authority of the United States or organized under the laws of 
        this state or any other state or country does or has authority 
        to do which is substantially similar to the business which a 
        corporation may be created to do under chapters 46 to 55 or any 
        business which a corporation or its subsidiary is authorized to 
        do by those laws; or 
           (3) (2) the business that any corporation organized under 
        the authority of the United States or organized under the laws 
        of this state or any other state or country does or has 
        authority to do if the corporation derives more than 50 percent 
        of its gross income from lending activities (including 
        discounting obligations) in substantial competition with the 
        businesses described in clauses clause (1) and (2).  For 
        purposes of this clause, the computation of the gross income of 
        a corporation does not include income from nonrecurring, 
        extraordinary items. 
           Sec. 4.  Minnesota Statutes 1994, section 290.06, 
        subdivision 2c, is amended to read: 
           Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
        AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
        married individuals filing joint returns and surviving spouses 
        as defined in section 2(a) of the Internal Revenue Code must be 
        computed by applying to their taxable net income the following 
        schedule of rates: 
           (1) On the first $19,910, 6 percent; 
           (2) On all over $19,910, but not over $79,120, 8 percent; 
           (3) On all over $79,120, 8.5 percent. 
           Married individuals filing separate returns, estates, and 
        trusts must compute their income tax by applying the above rates 
        to their taxable income, except that the income brackets will be 
        one-half of the above amounts.  
           (b) The income taxes imposed by this chapter upon unmarried 
        individuals must be computed by applying to taxable net income 
        the following schedule of rates: 
           (1) On the first $13,620, 6 percent; 
           (2) On all over $13,620, but not over $44,750, 8 percent; 
           (3) On all over $44,750, 8.5 percent. 
           (c) The income taxes imposed by this chapter upon unmarried 
        individuals qualifying as a head of household as defined in 
        section 2(b) of the Internal Revenue Code must be computed by 
        applying to taxable net income the following schedule of rates: 
           (1) On the first $16,770, 6 percent; 
           (2) On all over $16,770, but not over $67,390, 8 percent; 
           (3) On all over $67,390, 8.5 percent. 
           (d) In lieu of a tax computed according to the rates set 
        forth in this subdivision, the tax of any individual taxpayer 
        whose taxable net income for the taxable year is less than an 
        amount determined by the commissioner must be computed in 
        accordance with tables prepared and issued by the commissioner 
        of revenue based on income brackets of not more than $100.  The 
        amount of tax for each bracket shall be computed at the rates 
        set forth in this subdivision, provided that the commissioner 
        may disregard a fractional part of a dollar unless it amounts to 
        50 cents or more, in which case it may be increased to $1. 
           (e) An individual who is not a Minnesota resident for the 
        entire year must compute the individual's Minnesota income tax 
        as provided in this subdivision.  After the application of the 
        nonrefundable credits provided in this chapter, the tax 
        liability must then be multiplied by a fraction in which:  
           (1) The numerator is the individual's Minnesota source 
        federal adjusted gross income as defined in section 62 of the 
        Internal Revenue Code increased by the addition required for 
        interest income from non-Minnesota state and municipal bonds 
        under section 290.01, subdivision 19a, clause (1), after 
        applying the allocation and assignability provisions of section 
        290.081, clause (a), or 290.17; and 
           (2) the denominator is the individual's federal adjusted 
        gross income as defined in section 62 of the Internal Revenue 
        Code of 1986, as amended through April 15, 1995, increased by 
        the addition required for interest income from non-Minnesota 
        state and municipal bonds under section 290.01, subdivision 19a, 
        clause (1). 
           Sec. 5.  Minnesota Statutes 1994, section 290.06, 
        subdivision 22, is amended to read: 
           Subd. 22.  [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A 
        taxpayer who is liable for taxes on or measured by net income to 
        another state or province or territory of Canada, as provided in 
        paragraphs (b) through (f), upon income allocated or apportioned 
        to Minnesota, is entitled to a credit for the tax paid to 
        another state or province or territory of Canada if the tax is 
        actually paid in the taxable year or a subsequent taxable year.  
        A taxpayer who is a resident of this state pursuant to section 
        290.01, subdivision 7, clause (2), and who is subject to income 
        tax as a resident in the state of the individual's domicile is 
        not allowed this credit unless the state of domicile does not 
        allow a similar credit. 
           (b) For an individual, estate, or trust, the credit is 
        determined by multiplying the tax payable under this chapter by 
        the ratio derived by dividing the income subject to tax in the 
        other state or province or territory of Canada that is also 
        subject to tax in Minnesota while a resident of Minnesota by the 
        taxpayer's federal adjusted gross income, as defined in section 
        62 of the Internal Revenue Code, modified by the addition 
        required by section 290.01, subdivision 19a, clause (1), and the 
        subtraction allowed by section 290.01, subdivision 19b, clause 
        (1), to the extent the income is allocated or assigned to 
        Minnesota under sections 290.081 and 290.17.  
           (c) If the taxpayer is an athletic team that apportions all 
        of its income under section 290.17, subdivision 5, paragraph 
        (c), the credit is determined by multiplying the tax payable 
        under this chapter by the ratio derived from dividing the total 
        net income subject to tax in the other state or province or 
        territory of Canada by the taxpayer's Minnesota taxable income. 
           (d) The credit determined under paragraph (b) or (c) shall 
        not exceed the amount of tax so paid to the other state or 
        province or territory of Canada on the gross income earned 
        within the other state or province or territory of Canada 
        subject to tax under this chapter, nor shall the allowance of 
        the credit reduce the taxes paid under this chapter to an amount 
        less than what would be assessed if such income amount was 
        excluded from taxable net income. 
           (e) In the case of the tax assessed on a lump sum 
        distribution under section 290.032, the credit allowed under 
        paragraph (a) is the tax assessed by the other state or province 
        or territory of Canada on the lump sum distribution that is also 
        subject to tax under section 290.032, and shall not exceed the 
        tax assessed under section 290.032.  To the extent the total 
        lump sum distribution defined in section 290.032, subdivision 1, 
        includes lump sum distributions received in prior years or is 
        all or in part an annuity contract, the reduction to the tax on 
        the lump sum distribution allowed under section 290.032, 
        subdivision 2, includes tax paid to another state that is 
        properly apportioned to that distribution. 
           (f) If a Minnesota resident reported an item of income to 
        Minnesota and is assessed tax in such other state or province or 
        territory of Canada on that same income after the Minnesota 
        statute of limitations has expired, the taxpayer shall receive a 
        credit for that year under paragraph (a), notwithstanding any 
        statute of limitations to the contrary.  The claim for the 
        credit must be submitted within one year from the date the taxes 
        were paid to the other state or province or territory of 
        Canada.  The taxpayer must submit sufficient proof to show 
        entitlement to a credit. 
           (g) For the purposes of this subdivision, a resident 
        shareholder of a corporation having a valid election in effect 
        under section 1362 of the Internal Revenue Code must be 
        considered to have paid a tax imposed on the shareholder in an 
        amount equal to the shareholder's pro rata share of any net 
        income tax paid by the S corporation to a another state that 
        does not measure the income of the shareholder of the S 
        corporation by reference to the income of the S corporation.  
        For the purposes of the preceding sentence, the term "net income 
        tax" means any tax imposed on or measured by a corporation's net 
        income. 
           (h) For the purposes of this subdivision, a resident member 
        of a limited liability company taxed as a partnership under the 
        Internal Revenue Code must be considered to have paid a tax 
        imposed on the member in an amount equal to the member's pro 
        rata share of any net income tax paid by the limited liability 
        company to a state that does not measure the income of the 
        member of the limited liability company by reference to the 
        income of the limited liability company.  For purposes of the 
        preceding sentence, the term "net income" tax means any tax 
        imposed on or measured by a limited liability company's net 
        income. 
           Sec. 6.  Minnesota Statutes 1994, section 290.091, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
        this section, the following terms have the meanings given: 
           (a) "Alternative minimum taxable income" means the sum of 
        the following for the taxable year: 
           (1) the taxpayer's federal alternative minimum taxable 
        income as defined in section 55(b)(2) of the Internal Revenue 
        Code; 
           (2) the taxpayer's itemized deductions allowed in computing 
        federal alternative minimum taxable income, but excluding the 
        Minnesota charitable contribution deduction and the medical 
        expense deduction; 
           (3) for depletion allowances computed under section 613A(c) 
        of the Internal Revenue Code, with respect to each property (as 
        defined in section 614 of the Internal Revenue Code), to the 
        extent not included in federal alternative minimum taxable 
        income, the excess of the deduction for depletion allowable 
        under section 611 of the Internal Revenue Code for the taxable 
        year over the adjusted basis of the property at the end of the 
        taxable year (determined without regard to the depletion 
        deduction for the taxable year); 
           (4) to the extent not included in federal alternative 
        minimum taxable income, the amount of the tax preference for 
        intangible drilling cost under section 57(a)(2) of the Internal 
        Revenue Code determined without regard to subparagraph (E); 
           (5) to the extent not included in federal alternative 
        minimum taxable income, the amount of interest income as 
        provided by section 290.01, subdivision 19a, clause (1); 
           less the sum of the amounts determined under the following 
        clauses (1) to (3): 
           (1) interest income as defined in section 290.01, 
        subdivision 19b, clause (1); 
           (2) an overpayment of state income tax as provided by 
        section 290.01, subdivision 19b, clause (2), to the extent 
        included in federal alternative minimum taxable income; and 
           (3) the amount of investment interest paid or accrued 
        within the taxable year on indebtedness to the extent that the 
        amount does not exceed net investment income, as defined in 
        section 163(d)(4) of the Internal Revenue Code.  Interest does 
        not include amounts deducted in computing federal adjusted gross 
        income. 
           In the case of an estate or trust, alternative minimum 
        taxable income must be computed as provided in section 59(c) of 
        the Internal Revenue Code. 
           (b) "Investment interest" means investment interest as 
        defined in section 163(d)(3) of the Internal Revenue Code. 
           (c) "Tentative minimum tax" equals seven percent of 
        alternative minimum taxable income after subtracting the 
        exemption amount determined under subdivision 3. 
           (d) "Regular tax" means the tax that would be imposed under 
        this chapter (without regard to this section and section 
        290.032), reduced by the sum of the nonrefundable credits 
        allowed under this chapter.  
           (e) "Net minimum tax" means the minimum tax imposed by this 
        section. 
           (f) "Minnesota charitable contribution deduction" means a 
        charitable contribution deduction under section 170 of the 
        Internal Revenue Code to or for the use of an entity described 
        in section 290.21, subdivision 3, clauses (a) to (e).  When the 
        federal deduction for charitable contributions is limited under 
        section 170(b) of the Internal Revenue Code, the allowable 
        contributions in the year of contribution are deemed to be first 
        contributions to entities described in section 290.21, 
        subdivision 3, clauses (a) to (e). 
           Sec. 7.  Minnesota Statutes 1994, section 290.0922, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [IMPOSITION.] (a) In addition to the tax 
        imposed by this chapter without regard to this section, the 
        franchise tax imposed on a corporation required to file under 
        section 289A.08, subdivision 3, other than a corporation having 
        a valid election in effect under section 1362 of the Internal 
        Revenue Code for the taxable year includes a tax equal to the 
        following amounts: 
             If the sum of the corporation's
        Minnesota property, payrolls, and sales
        or receipts is:                            the tax equals:
                   less than $500,000                    $0
           $   500,000 to $   999,999                  $100
           $ 1,000,000 to $ 4,999,999                  $300
           $ 5,000,000 to $ 9,999,999                $1,000 
           $10,000,000 to $19,999,999                $2,000 
           $20,000,000 or more                       $5,000 
           (b) A tax is imposed annually beginning in 1990 for each 
        taxable year on a corporation required to file a return under 
        section 289A.12, subdivision 3, that has a valid election in 
        effect for the taxable year under section 1362 of the Internal 
        Revenue Code and on a partnership required to file a return 
        under section 289A.12, subdivision 3, other than a partnership 
        that derives over 80 percent of its income from farming.  The 
        tax imposed under this paragraph is due on or before the due 
        date of the return for the taxpayer due under section 289A.18, 
        subdivision 1.  The commissioner shall prescribe the return to 
        be used for payment of this tax. The tax under this paragraph is 
        equal to the following amounts:  
             If the sum of the S corporation's or partnership's 
        Minnesota property, payrolls, and sales
        or receipts is:                        the tax equals:
                     less than $500,000                $0 
             $   500,000 to $   999,999              $100 
             $ 1,000,000 to $ 4,999,999              $300 
             $ 5,000,000 to $ 9,999,999            $1,000 
             $10,000,000 to $19,999,999            $2,000 
             $20,000,000 or more                   $5,000 
           Sec. 8.  Minnesota Statutes 1994, section 290.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 
        BUSINESS.] The income of a taxpayer subject to the allocation 
        rules that is not derived from the conduct of a trade or 
        business must be assigned in accordance with paragraphs (a) to 
        (f):  
           (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from 
        labor or personal or professional services is assigned to this 
        state if, and to the extent that, the labor or services are 
        performed within it; all other income from such sources is 
        treated as income from sources without this state.  
           Severance pay shall be considered income from labor or 
        personal or professional services. 
           (2) In the case of an individual who is a nonresident of 
        Minnesota and who is an athlete or entertainer, income from 
        compensation for labor or personal services performed within 
        this state shall be determined in the following manner:  
           (i) The amount of income to be assigned to Minnesota for an 
        individual who is a nonresident salaried athletic team employee 
        shall be determined by using a fraction in which the denominator 
        contains the total number of days in which the individual is 
        under a duty to perform for the employer, and the numerator is 
        the total number of those days spent in Minnesota; and 
           (ii) The amount of income to be assigned to Minnesota for 
        an individual who is a nonresident, and who is an athlete or 
        entertainer not listed in clause (i), for that person's athletic 
        or entertainment performance in Minnesota shall be determined by 
        assigning to this state all income from performances or athletic 
        contests in this state.  
           (3) For purposes of this section, amounts received by a 
        nonresident from the United States, its agencies or 
        instrumentalities, the Federal Reserve Bank, the state of 
        Minnesota or any of its political or governmental subdivisions, 
        or a Minnesota volunteer firefighters' relief association, by 
        way of payment as a pension, public employee retirement benefit, 
        or any combination of these, or as a retirement or survivor's 
        benefit made from a plan qualifying under section 401, 403, 408, 
        or 409, or as defined in section 403(b) or 457 of the Internal 
        Revenue Code, are not considered income derived from carrying on 
        a trade or business or from performing personal or professional 
        services in Minnesota, and are not taxable under this chapter.  
           (b) Income or gains from tangible property located in this 
        state that is not employed in the business of the recipient of 
        the income or gains must be assigned to this state. 
           (c) Income or gains from intangible personal property not 
        employed in the business of the recipient of the income or gains 
        must be assigned to this state if the recipient of the income or 
        gains is a resident of this state or is a resident trust or 
        estate.  
           Gain on the sale of a partnership interest is allocable to 
        this state in the ratio of the original cost of partnership 
        tangible property in this state to the original cost of 
        partnership tangible property everywhere, determined at the time 
        of the sale.  If more than 50 percent of the value of the 
        partnership's assets consists of intangibles, gain or loss from 
        the sale of the partnership interest is allocated to this state 
        in accordance with the sales factor of the partnership for its 
        first full tax period immediately preceding the tax period of 
        the partnership during which the partnership interest was sold. 
           Gain on the sale of goodwill or income from a covenant not 
        to compete that is connected with a business operating all or 
        partially in Minnesota is allocated to this state to the extent 
        that the income from the business in the year preceding the year 
        of sale was assignable to Minnesota under subdivision 3.  
           When an employer pays an employee for a covenant not to 
        compete, the income allocated to this state is in the ratio of 
        the employee's service in Minnesota in the calendar year 
        preceding leaving the employment of the employer over the total 
        services performed by the employee for the employer in that year.
           (d) Income from the operation of a farm shall be assigned 
        to this state if the farm is located within this state and to 
        other states only if the farm is not located in this state.  
           (e) Income from winnings on Minnesota pari-mutuel betting 
        tickets, the Minnesota state lottery, and lawful gambling as 
        defined in section 349.12, subdivision 24, conducted within the 
        boundaries of the state of Minnesota shall be assigned to this 
        state.  
           (f) All items of gross income not covered in paragraphs (a) 
        to (e) and not part of the taxpayer's income from a trade or 
        business shall be assigned to the taxpayer's domicile. 
           Sec. 9.  Minnesota Statutes 1995 Supplement, section 
        290.191, subdivision 5, is amended to read: 
           Subd. 5.  [DETERMINATION OF SALES FACTOR.] For purposes of 
        this section, the following rules apply in determining the sales 
        factor.  
           (a) The sales factor includes all sales, gross earnings, or 
        receipts received in the ordinary course of the business, except 
        that the following types of income are not included in the sales 
        factor: 
           (1) interest; 
           (2) dividends; 
           (3) sales of capital assets as defined in section 1221 of 
        the Internal Revenue Code; 
           (4) sales of property used in the trade or business, except 
        sales of leased property of a type which is regularly sold as 
        well as leased; 
           (5) sales of debt instruments as defined in section 
        1275(a)(1) of the Internal Revenue Code or sales of stock; and 
           (6) royalties, fees, or other like income of a type which 
        qualify for a subtraction from federal taxable income under 
        section 290.01, subdivision 19(d)(11).  
           (b) Sales of tangible personal property are made within 
        this state if the property is received by a purchaser at a point 
        within this state, and the taxpayer is taxable in this state, 
        regardless of the f.o.b. point, other conditions of the sale, or 
        the ultimate destination of the property. 
           (c) Tangible personal property delivered to a common or 
        contract carrier or foreign vessel for delivery to a purchaser 
        in another state or nation is a sale in that state or nation, 
        regardless of f.o.b. point or other conditions of the sale.  
           (d) Notwithstanding paragraphs (b) and (c), when 
        intoxicating liquor, wine, fermented malt beverages, cigarettes, 
        or tobacco products are sold to a purchaser who is licensed by a 
        state or political subdivision to resell this property only 
        within the state of ultimate destination, the sale is made in 
        that state.  
           (e) Sales made by or through a corporation that is 
        qualified as a domestic international sales corporation under 
        section 992 of the Internal Revenue Code are not considered to 
        have been made within this state.  
           (f) Sales, rents, royalties, and other income in connection 
        with real property is attributed to the state in which the 
        property is located.  
           (g) Receipts from the lease or rental of tangible personal 
        property, including finance leases and true leases, must be 
        attributed to this state if the property is located in this 
        state and to other states if the property is not located in this 
        state.  Receipts from the lease or rental of moving property 
        including, but not limited to, motor vehicles, rolling stock, 
        aircraft, vessels, or mobile equipment is located in this state 
        if are included in the numerator of the receipts factor to the 
        extent that the property is used in this state.  The extent of 
        the use of moving property is determined as follows: 
           (1) the operation of the property is entirely within this 
        state; or A motor vehicle is used wholly in the state in which 
        it is registered.  
           (2) the operation of the property is in two or more states 
        and the principal base of operations from which the property is 
        sent out is in this state.  The extent that rolling stock is 
        used in this state is determined by multiplying the receipts 
        from the lease or rental of the rolling stock by a fraction, the 
        numerator of which is the miles traveled within this state by 
        the leased or rented rolling stock and the denominator of which 
        is the total miles traveled by the leased or rented rolling 
        stock. 
           (3) The extent that an aircraft is used in this state is 
        determined by multiplying the receipts from the lease or rental 
        of the aircraft by a fraction, the numerator of which is the 
        number of landings of the aircraft in this state and the 
        denominator of which is the total number of landings of the 
        aircraft. 
           (4) The extent that a vessel, mobile equipment, or other 
        mobile property is used in the state is determined by 
        multiplying the receipts from the lease or rental of the 
        property by a fraction, the numerator of which is the number of 
        days during the taxable year the property was in this state and 
        the denominator of which is the total days in the taxable year.  
           (h) Royalties and other income not described in paragraph 
        (a), clause (6), received for the use of or for the privilege of 
        using intangible property, including patents, know-how, 
        formulas, designs, processes, patterns, copyrights, trade names, 
        service names, franchises, licenses, contracts, customer lists, 
        or similar items, must be attributed to the state in which the 
        property is used by the purchaser.  If the property is used in 
        more than one state, the royalties or other income must be 
        apportioned to this state pro rata according to the portion of 
        use in this state.  If the portion of use in this state cannot 
        be determined, the royalties or other income must be excluded 
        from both the numerator and the denominator.  Intangible 
        property is used in this state if the purchaser uses the 
        intangible property or the rights therein in the regular course 
        of its business operations in this state, regardless of the 
        location of the purchaser's customers. 
           (i) Sales of intangible property are made within the state 
        in which the property is used by the purchaser.  If the property 
        is used in more than one state, the sales must be apportioned to 
        this state pro rata according to the portion of use in this 
        state.  If the portion of use in this state cannot be 
        determined, the sale must be excluded from both the numerator 
        and the denominator of the sales factor.  Intangible property is 
        used in this state if the purchaser used the intangible property 
        in the regular course of its business operations in this state. 
           (j) Receipts from the performance of services must be 
        attributed to the state where the services are received.  For 
        the purposes of this section, receipts from the performance of 
        services provided to a corporation, partnership, or trust may 
        only be attributed to a state where it has a fixed place of 
        doing business.  If the state where the services are received is 
        not readily determinable or is a state where the corporation, 
        partnership, or trust receiving the service does not have a 
        fixed place of doing business, the services shall be deemed to 
        be received at the location of the office of the customer from 
        which the services were ordered in the regular course of the 
        customer's trade or business.  If the ordering office cannot be 
        determined, the services shall be deemed to be received at the 
        office of the customer to which the services are billed. 
           Sec. 10.  Minnesota Statutes 1995 Supplement, section 
        290.191, subdivision 6, is amended to read: 
           Subd. 6.  [DETERMINATION OF RECEIPTS FACTOR FOR FINANCIAL 
        INSTITUTIONS.] (a) For purposes of this section, the rules in 
        this subdivision and subdivision 8 apply in determining the 
        receipts factor for financial institutions.  
           (b) "Receipts" for this purpose means gross income, 
        including net taxable gain on disposition of assets, including 
        securities and money market instruments, when derived from 
        transactions and activities in the regular course of the 
        taxpayer's trade or business.  
           (c) "Money market instruments" means federal funds sold and 
        securities purchased under agreements to resell, commercial 
        paper, banker's acceptances, and purchased certificates of 
        deposit and similar instruments to the extent that the 
        instruments are reflected as assets under generally accepted 
        accounting principles.  
           (d) "Securities" means United States Treasury securities, 
        obligations of United States government agencies and 
        corporations, obligations of state and political subdivisions, 
        corporate stock, bonds, and other securities, participations in 
        securities backed by mortgages held by United States or state 
        government agencies, loan-backed securities and similar 
        investments to the extent the investments are reflected as 
        assets under generally accepted accounting principles.  
           (e) Receipts from the lease or rental of real or tangible 
        personal property, including both finance leases and true 
        leases, must be attributed to this state if the property is 
        located in this state.  Receipts from the lease or rental of 
        tangible personal property that is characteristically moving 
        property, such as including, but not limited to, motor vehicles, 
        rolling stock, aircraft, vessels, or mobile equipment, and the 
        like, is considered to be located in a state if are included in 
        the numerator of the receipts factor to the extent that the 
        property is used in this state.  The extent of the use of moving 
        property is determined as follows: 
           (1) the operation of the property is entirely within the 
        state; or A motor vehicle is used wholly in the state in which 
        it is registered. 
           (2) the operation of the property is in two or more states, 
        but the principal base of operations from which the property is 
        sent out is in the state.  The extent that rolling stock is used 
        in this state is determined by multiplying the receipts from the 
        lease or rental of the rolling stock by a fraction, the 
        numerator of which is the miles traveled within this state by 
        the leased or rented rolling stock and the denominator of which 
        is the total miles traveled by the leased or rented rolling 
        stock. 
           (3) The extent that an aircraft is used in this state is 
        determined by multiplying the receipts from the lease or rental 
        of the aircraft by a fraction, the numerator of which is the 
        number of landings of the aircraft in this state and the 
        denominator of which is the total number of landings of the 
        aircraft. 
           (4) The extent that a vessel, mobile equipment, or other 
        mobile property is used in the state is determined by 
        multiplying the receipts from the lease or rental of property by 
        a fraction, the numerator of which is the number of days during 
        the taxable year the property was in this state and the 
        denominator of which is the total days in the taxable year. 
           (f) Interest income and other receipts from assets in the 
        nature of loans that are secured primarily by real estate or 
        tangible personal property must be attributed to this state if 
        the security property is located in this state under the 
        principles stated in paragraph (e).  
           (g) Interest income and other receipts from consumer loans 
        not secured by real or tangible personal property that are made 
        to residents of this state, whether at a place of business, by 
        traveling loan officer, by mail, by telephone or other 
        electronic means, must be attributed to this state.  
           (h) Interest income and other receipts from commercial 
        loans and installment obligations that are unsecured by real or 
        tangible personal property or secured by intangible property 
        must be attributed to this state if the proceeds of the loan are 
        to be applied in this state.  If it cannot be determined where 
        the funds are to be applied, the income and receipts are 
        attributed to the state in which the office of the borrower from 
        which the application would be made in the regular course of 
        business is located.  If this cannot be determined, the 
        transaction is disregarded in the apportionment formula. 
           (i) Interest income and other receipts from a participating 
        financial institution's portion of participation and syndication 
        loans must be attributed under paragraphs (e) to (h).  A 
        participation loan is an arrangement in which a lender makes a 
        loan to a borrower and then sells, assigns, or otherwise 
        transfers all or a part of the loan to a purchasing financial 
        institution.  A syndication loan is a loan transaction involving 
        multiple financial institutions in which all the lenders are 
        named as parties to the loan documentation, are known to the 
        borrower, and have privity of contract with the borrower.  
           (j) Interest income and other receipts including service 
        charges from financial institution credit card and travel and 
        entertainment credit card receivables and credit card holders' 
        fees must be attributed to the state to which the card charges 
        and fees are regularly billed.  
           (k) Merchant discount income derived from financial 
        institution credit card holder transactions with a merchant must 
        be attributed to the state in which the merchant is located.  In 
        the case of merchants located within and outside the state, only 
        receipts from merchant discounts attributable to sales made from 
        locations within the state are attributed to this state.  It is 
        presumed, subject to rebuttal, that the location of a merchant 
        is the address shown on the invoice submitted by the merchant to 
        the taxpayer. 
           (l) Receipts from the performance of fiduciary and other 
        services must be attributed to the state in which the services 
        are received.  For the purposes of this section, services 
        provided to a corporation, partnership, or trust must be 
        attributed to a state where it has a fixed place of doing 
        business.  If the state where the services are received is not 
        readily determinable or is a state where the corporation, 
        partnership, or trust does not have a fixed place of doing 
        business, the services shall be deemed to be received at the 
        location of the office of the customer from which the services 
        were ordered in the regular course of the customer's trade or 
        business.  If the ordering office cannot be determined, the 
        services shall be deemed to be received at the office of the 
        customer to which the services are billed.  
           (m) Receipts from the issuance of travelers checks and 
        money orders must be attributed to the state in which the checks 
        and money orders are purchased.  
           (n) Receipts from investments of a financial institution in 
        securities and from money market instruments must be apportioned 
        to this state based on the ratio that total deposits from this 
        state, its residents, including any business with an office or 
        other place of business in this state, its political 
        subdivisions, agencies, and instrumentalities bear to the total 
        deposits from all states, their residents, their political 
        subdivisions, agencies, and instrumentalities.  In the case of 
        an unregulated financial institution subject to this section, 
        these receipts are apportioned to this state based on the ratio 
        that its gross business income, excluding such receipts, earned 
        from sources within this state bears to gross business income, 
        excluding such receipts, earned from sources within all states.  
        For purposes of this subdivision, deposits made by this state, 
        its residents, its political subdivisions, agencies, and 
        instrumentalities must be attributed to this state, whether or 
        not the deposits are accepted or maintained by the taxpayer at 
        locations within this state. 
           (o) A financial institution's interest in property 
        described in section 290.015, subdivision 3, paragraph (b), is 
        included in the receipts factor in the same manner as assets in 
        the nature of securities or money market instruments are 
        included in paragraph (n). 
           Sec. 11.  Minnesota Statutes 1994, section 383B.51, is 
        amended to read: 
           383B.51 [NO ASSIGNMENT OR GARNISHMENT.] 
           The right of a participant who has shares to the credit of 
        the participant's share account record to redeem all or any 
        portion of the shares is a personal right only and shall be in 
        the state of Minnesota or the state board of investment or the 
        nominee of either, subject to the rights of the county of 
        Hennepin.  Any assignment or attempted assignment of shares to 
        the credit of a participant's share account record by any person 
        is null and void.  The shares are exempt from garnishment or 
        levy under attachment or execution or other legal process, 
        except as provided in section 518.58, 518.581, or 518.611.  The 
        shares are also exempt from all taxation, except individual 
        income taxation, by the state of Minnesota. 
           Sec. 12.  Minnesota Statutes 1994, section 458A.32, 
        subdivision 4, is amended to read: 
           Subd. 4.  Revenue bonds of the authority shall be deemed 
        and treated as instrumentalities of a public government agency; 
        and as such, together with interest thereon, exempt from 
        taxation. 
           Sec. 13.  [EFFECTIVE DATE.] 
           Sections 1, 4, 6, and 8 are effective for tax years 
        beginning after December 31, 1995. 
           Sections 2 and 12 are effective for income earned after 
        July 1, 1983, in taxable years beginning after December 31, 1982.
           Sections 9 and 10 are effective for taxable years beginning 
        after December 31, 1997. 
           Section 11 is a clarification of the law and is effective 
        the day following final enactment. 
                                   ARTICLE 2
                            SALES AND SPECIAL TAXES
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        115B.48, is amended by adding a subdivision to read: 
           Subd. 7.  [FACILITY.] "Facility" means one or more 
        buildings or parts of a building and the equipment, 
        installations, and structures contained in the building, located 
        on a single site or on contiguous or adjacent sites.  Facility 
        includes any site or area where a hazardous substance, or a 
        pollutant or contaminant, has been deposited, stored, disposed 
        of, or placed, or otherwise comes to be located. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        115B.48, is amended by adding a subdivision to read: 
           Subd. 8.  [FULL-TIME EQUIVALENCE.] "Full-time equivalence" 
        means 2,000 hours worked by employees, owners, and others, at 
        duties related to the drycleaning operation in a drycleaning 
        facility during a 12-month period beginning July 1 of the 
        preceding year and running through June 30 of the year in which 
        the annual registration fee is due.  For those drycleaning 
        facilities that were in business less than the 12-month period, 
        full-time equivalence means the total of all of the hours worked 
        at duties related to the drycleaning operation in the 
        drycleaning facility, divided by 2,000 and multiplied by a 
        fraction, the numerator of which is 50 and the denominator of 
        which is the number of weeks in business during the reporting 
        period. 
           Sec. 3.  Minnesota Statutes 1995 Supplement, section 
        115B.49, subdivision 2, is amended to read: 
           Subd. 2.  [REVENUE SOURCES.] Revenue from the following 
        sources must be deposited in the state treasury and credited to 
        the account: 
           (1) the proceeds of the fees imposed by subdivision 4; 
           (2) interest attributable to investment of money in the 
        account; 
           (3) penalties and interest collected under subdivision 4, 
        paragraphs (e) and (f) paragraph (d); and 
           (4) money received by the commissioner for deposit in the 
        account in the form of gifts, grants, and appropriations. 
           Sec. 4.  Minnesota Statutes 1995 Supplement, section 
        115B.49, subdivision 4, is amended to read: 
           Subd. 4.  [REGISTRATION; FEES.] (a) The owner or operator 
        of a drycleaning facility shall register on or before July 1 of 
        each year with the commissioner of revenue in a manner 
        prescribed by the commissioner of revenue and pay a registration 
        fee for the facility.  The amount of the fee is: 
           (1) $500, for facilities with up to four full-time 
        equivalent employees a full-time equivalence of fewer than five; 
           (2) $1,000, for facilities with a full-time equivalence of 
        five to ten full-time equivalent employees; and 
           (3) $1,500, for facilities with a full-time equivalence of 
        more than ten full-time equivalent employees. 
           (b) A person who sells drycleaning solvents for use by 
        drycleaning facilities in the state shall collect and remit to 
        the commissioner of revenue in a manner prescribed by the 
        commissioner of revenue, on or before the 20th day of the month 
        following the month in which the sales of drycleaning solvents 
        are made, a fee of: 
           (1) $3.50 for each gallon of perchloroethylene sold for use 
        by drycleaning facilities in the state; and 
           (2) 70 cents for each gallon of hydrocarbon-based 
        drycleaning solvent sold for use by drycleaning facilities in 
        the state. 
           (c) The commissioner of revenue shall provide each person 
        who pays a registration fee under paragraph (a) with a receipt.  
        The receipt or a copy of the receipt must be produced for 
        inspection at the request of any authorized representative of 
        the commissioner of revenue. 
           (d) The commissioner shall, after a public hearing but 
        notwithstanding section 16A.1285, subdivision 4, annually adjust 
        the fees in this subdivision as necessary to maintain an 
        unencumbered balance in the account of at least $1,000,000.  Any 
        adjustment under this paragraph must be prorated among all the 
        fees in this subdivision.  Fees adjusted under this paragraph 
        may not exceed 200 percent of the fees in this subdivision.  The 
        commissioner shall notify the commissioner of revenue of an 
        adjustment under this paragraph no later than March 1 of the 
        year in which the adjustment is to become effective.  The 
        adjustment is effective for sales of drycleaning solvents made, 
        and annual registration fees due, beginning on July 1 of the 
        same year. 
           (e) An owner of a drycleaning facility who fails to pay a 
        fee under paragraph (a) when due is subject to a penalty of $50 
        per facility for each day the fee is not paid. 
           (f) (d) To enforce this subdivision, the commissioner of 
        revenue may examine documents, assess and collect fees, conduct 
        investigations, issue subpoenas, grant extensions to file 
        returns and pay fees, impose sales and use tax penalties and 
        interest on the annual registration fee under paragraph (a) and 
        the monthly fee under paragraph (b), abate penalties and 
        interest, and administer appeals, in the manner provided in 
        chapters 270 and 289A.  The penalties and interest imposed on 
        taxes under chapter 297A apply to the fees imposed under this 
        subdivision.  Disclosure of data collected by the commissioner 
        of revenue under this subdivision is governed by chapter 270B. 
           Sec. 5.  [115B.491] [DRYCLEANING FACILITY USE FEE; 
        FACILITIES TO FILE RETURN.] 
           Subdivision 1.  [USE FEE.] A drycleaning facility that 
        purchases drycleaning solvents for use in Minnesota without 
        paying the seller of drycleaning solvents the fee under section 
        115B.49, subdivision 4, paragraph (b), is subject to an 
        equivalent fee.  Liability for the fee is incurred when 
        drycleaning solvents are received in Minnesota by the 
        drycleaning facility. 
           Subd. 2.  [RETURN REQUIRED.] On or before the 20th of each 
        calendar month, every drycleaning facility that has purchased 
        drycleaning solvents for use in this state during the preceding 
        calendar month, upon which the fee imposed by section 115B.49, 
        subdivision 4, paragraph (b), has not been paid to the seller of 
        the drycleaning solvents, shall file a return with the 
        commissioner of revenue showing the quantity of solvents 
        purchased and a computation of the fee under section 115B.49, 
        subdivision 4, paragraph (d).  The fee must accompany the 
        return.  The return must be made upon a form furnished and 
        prescribed by the commissioner of revenue and must contain such 
        other information as the commissioner of revenue may require. 
           Subd. 3.  [APPLICABILITY.] All of the provisions of section 
        115B.49, subdivision 4, paragraph (d), apply to this section. 
           Sec. 6.  [115B.492] [ALLOCATION OF PAYMENT.] 
           In the discretion of the commissioner of revenue, payments 
        received for fees may be credited first to the oldest liability 
        not secured by a judgment or lien.  For liabilities to which 
        payments are applied, the commissioner of revenue may credit 
        payments first to penalties, next to interest, and then to the 
        fee due. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 
        289A.40, subdivision 1, is amended to read: 
           Subdivision 1.  [TIME LIMIT; GENERALLY.] Unless otherwise 
        provided in this chapter, a claim for a refund of an overpayment 
        of state tax must be filed within 3-1/2 years from the date 
        prescribed for filing the return, plus any extension of time 
        granted for filing the return, but only if filed within the 
        extended time, or one year from the date of an order assessing 
        tax under section 289A.37, subdivision 1, upon payment in full 
        of the tax, penalties, and interest shown on the order, 
        whichever period expires later.  Claims for refund, except for 
        taxes under chapter 297A, filed after the 3-1/2 year period but 
        within the one-year period are limited to the amount of the tax, 
        penalties, and interest on the order and to issues determined by 
        the order. 
           In the case of assessments under section 289A.38, 
        subdivisions 5 or 6, claims for refund under chapter 297A filed 
        after the 3-1/2 year period but within the one-year period are 
        limited to the amount of the tax, penalties, and interest on the 
        order that are due for the period before the 3-1/2 year period. 
           Sec. 8.  Minnesota Statutes 1994, section 289A.50, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 
        has collected from a purchaser a tax on a transaction that is 
        not subject to the tax imposed by chapter 297A, the purchaser 
        may apply directly to the commissioner for a refund under this 
        section if: 
           (a) the purchaser is currently registered to collect and 
        remit the sales and use tax; and 
           (b) the amount of the refund applied for exceeds $500. 
           The purchaser may not file more than two applications for 
        refund under this subdivision in a calendar year. 
           Sec. 9.  Minnesota Statutes 1994, section 289A.56, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 
        PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 
        under section sections 297A.15, subdivision 5, and 289A.50, 
        subdivision 2a, interest is computed from the date the refund 
        claim is filed with the commissioner. 
           Sec. 10.  Minnesota Statutes 1994, section 297.04, 
        subdivision 9, is amended to read: 
           Subd. 9.  [APPLICATION DENIAL; LICENSE SUSPENSION AND 
        REVOCATION.] (a) The commissioner may revoke, cancel, or suspend 
        the license or licenses of any distributor or subjobber for 
        violation of sections 297.01 to 297.13, or any other act 
        applicable to the sale of cigarettes, or any rule promulgated by 
        the commissioner, and may also revoke any such license or 
        licenses of any distributor or subjobber for the violation of 
        sections 297.31 to 297.39, or any other act applicable to the 
        sale of tobacco products, or any rule promulgated by the 
        commissioner in furtherance of sections 297.31 to 297.39.  The 
        commissioner may revoke, cancel, or suspend the license or 
        licenses of any distributor or subjobber for violation of 
        sections 325D.31 to 325D.42.  
           (b) The department must not issue or renew a license under 
        this chapter, and may revoke a license under this chapter, if 
        the applicant or licensee: 
           (1) owes $500 or more in delinquent taxes as defined in 
        section 270.72; 
           (2) after demand, has not filed tax returns required by the 
        commissioner of revenue; 
           (3) had a cigarette or tobacco license revoked by the 
        commissioner of revenue within the past two years; 
           (4) had a sales and use tax permit revoked by the 
        commissioner of revenue within the past two years; or 
           (5) has been convicted of a crime involving cigarettes, 
        including but not limited to:  selling stolen cigarettes or 
        tobacco items, receiving stolen cigarettes or tobacco items, or 
        involvement in the smuggling of cigarettes or tobacco items. 
           (c) No license shall be revoked, canceled, or suspended 
        under this chapter, and no application for a license shall be 
        denied under this chapter, except after 20 days' notice and 
        specifying the commissioner's allegations against the licensee 
        or applicant, and the right to request, in writing within 20 
        days, a contested case hearing by the commissioner as provided 
        in section 297.09 chapter 14.  If a written request for a 
        hearing is received by the department of revenue within 20 days 
        of the date of the initial notice, the hearing must be held 
        within 45 days after referral to the office of administrative 
        hearings, and no earlier than 20 days after notice to the 
        licensee or applicant of the hearing time and place.  A license 
        is revoked or suspended, and an application is denied, when the 
        commissioner serves notice of revocation, suspension, or denial 
        after 20 days have passed following the initial notice under 
        this paragraph without a request for hearing being made, or if a 
        hearing is held, after the commissioner serves an order of 
        revocation, suspension, or denial under section 14.62, 
        subdivision 1.  All notices under this paragraph may be served 
        personally or by mail.  
           Sec. 11.  Minnesota Statutes 1995 Supplement, section 
        297A.02, subdivision 4, is amended to read: 
           Subd. 4.  [MANUFACTURED HOUSING AND PARK TRAILERS.] 
        Notwithstanding the provisions of subdivision 1, for sales at 
        retail of new manufactured homes used for residential purposes 
        and new or used park trailers, as defined in section 168.011, 
        subdivision 8, paragraph (b), the excise tax is imposed upon 65 
        percent of the sales price of the home or park trailer.  
           Sec. 12.  [297A.023] [REMITTANCE OF AMOUNTS COLLECTED AS 
        TAXES.] 
           Any amounts collected, even if erroneously or illegally 
        collected, from a purchaser under a representation that they are 
        taxes imposed under this chapter are state funds from the time 
        of collection and must be reported on a return filed with the 
        commissioner and are not subject to refund without proof that 
        such amounts have been refunded or credited to the purchaser by 
        the seller. 
           Sec. 13.  Minnesota Statutes 1994, section 297A.14, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [DE MINIMIS EXEMPTION.] Purchases subject to use 
        tax under this section are exempt if (1) the purchase is made by 
        an individual for personal use, and (2) the total purchases that 
        are subject to the use tax do not exceed $770 in the calendar 
        year.  For purposes of this subdivision, "personal use" includes 
        purchases for gifts.  If an individual makes purchases, which 
        are subject to use tax, of more than $770 in the calendar year 
        the individual must pay the use tax on the entire amount. 
           Sec. 14.  Minnesota Statutes 1994, section 297A.15, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SEIZURE; COURT REVIEW.] The commissioner of 
        revenue or the commissioner's duly authorized agents are 
        empowered to seize and confiscate in the name of the state any 
        truck, automobile or means of transportation not owned or 
        operated by a common carrier, used in the illegal importation 
        and transportation of any article or articles of tangible 
        personal property by a retailer or the retailer's agent or 
        employee who does not have a sales or use tax permit and has 
        been engaging in transporting personal property into the state 
        without payment of the tax.  The commissioner may demand the 
        forfeiture and sale of the truck, automobile or other means of 
        transportation together with the property being transported 
        illegally, unless the owner establishes to the satisfaction of 
        the commissioner or the court that the owner had no notice or 
        knowledge or reason to believe that the vehicle was used or 
        intended to be used in any such violation.  Within two days 
        after the seizure, the person making the seizure shall deliver 
        an inventory of the vehicle and property seized to the person 
        from whom the seizure was made, if known, and to any person 
        known or believed to have any right, title, interest or lien on 
        the vehicle or property, and shall also file a copy with the 
        commissioner.  Within ten days after the date of service of the 
        inventory, the person from whom the vehicle and property was 
        seized or any person claiming an interest in the vehicle or 
        property may file with the commissioner a demand for a judicial 
        determination of the question as to whether the vehicle or 
        property was lawfully subject to seizure and forfeiture.  The 
        commissioner, within 30 days, shall institute an action in the 
        district court of the county where the seizure was made to 
        determine the issue of forfeiture.  The action shall be brought 
        in the name of the state and shall be prosecuted by the county 
        attorney or by the attorney general.  The court shall hear the 
        action without a jury and shall try and determine the issues of 
        fact and law involved.  Whenever a judgment of forfeiture is 
        entered, the commissioner may, unless the judgment is stayed 
        pending an appeal, cause the forfeited vehicle and property to 
        be sold at public auction as provided by law.  If a demand for 
        judicial determination is made and no action is commenced as 
        provided in this subdivision, the vehicle and property shall be 
        released by the commissioner and redelivered to the person 
        entitled to it.  If no demand is made, the vehicle and property 
        seized shall be deemed forfeited to the state by operation of 
        law and may be disposed of by the commissioner as provided where 
        there has been a judgment of forfeiture.  The forfeiture and 
        sale of the automobile, truck or other means of transportation, 
        and of the property being transported illegally in it, is a 
        penalty for the violation of this chapter.  After deducting the 
        expense of keeping the vehicle and property, the fee for 
        seizure, and the costs of the sale, the commissioner shall pay 
        from the funds collected all liens according to their priority, 
        which are established at the hearing as being bona fide and as 
        existing without the lienor having any notice or knowledge that 
        the vehicle or property was being used or was intended to be 
        used for or in connection with any such violation as specified 
        in the order of the court, and shall pay the balance of the 
        proceeds into the state treasury to be credited to the general 
        fund.  The state shall not be liable for any liens in excess of 
        the proceeds from the sale after deductions provided.  Any sale 
        under the provisions of this section shall operate to free the 
        vehicle and property sold from any and all liens on it, and 
        appeal from the order of the district court will lie as in other 
        civil cases.  
           For the purposes of this section, "common carrier" means 
        any person engaged in transportation for hire of tangible 
        personal property by motor vehicle, limited to (1) a person 
        possessing a certificate or permit authorizing or having 
        completed a registration process that authorizes for-hire 
        transportation of property from the interstate commerce 
        commission or the public utilities commission United States 
        Department of Transportation, the transportation regulation 
        board, or the department of transportation; or (2) any person 
        transporting commodities defined as "exempt" in for-hire 
        transportation; or (3) any person who pursuant to a contract 
        with a person described in (1) or (2) above transports tangible 
        personal property.  
           Sec. 15.  Minnesota Statutes 1994, section 297A.211, 
        subdivision 1, is amended to read: 
           Subdivision 1. Every person, as defined in this chapter, 
        who is engaged in interstate for-hire transportation of tangible 
        personal property or passengers by motor vehicle may at their 
        option, under rules prescribed by the commissioner, register as 
        retailers and pay the taxes imposed by this chapter in 
        accordance with this section.  Persons referred to herein are:  
        (1) persons possessing a certificate or permit authorizing or 
        having completed a registration process that authorizes for-hire 
        transportation of property or passengers from the interstate 
        commerce commission or the Minnesota public utilities commission 
        United States Department of Transportation, the transportation 
        regulation board, or the department of transportation; or (2) 
        persons transporting commodities defined as "exempt" in for-hire 
        transportation in interstate commerce; or (3) persons who, 
        pursuant to contracts with persons described in clauses (1) or 
        (2) above, transport tangible personal property in interstate 
        commerce.  Persons qualifying under clauses (2) and (3) must 
        maintain on a current basis the same type of mileage records 
        that are required by persons specified in clause (1) by 
        the interstate commerce commission United States Department of 
        Transportation.  Persons who in the course of their business are 
        transporting solely their own goods in interstate commerce may 
        also register as retailers pursuant to rules prescribed by the 
        commissioner and pay the taxes imposed by this chapter in 
        accordance with this section.  
           Sec. 16.  Minnesota Statutes 1994, section 297A.25, 
        subdivision 14, is amended to read: 
           Subd. 14.  [AIRFLIGHT EQUIPMENT.] The gross receipts from 
        sales of airflight equipment to, and the storage, use or other 
        consumption of such property by airline companies taxed under 
        the provisions of sections 270.071 to 270.079, as defined in 
        section 270.071, subdivision 4, are exempt.  For purposes of 
        this subdivision, "airflight equipment" includes airplanes and 
        parts necessary for the repair and maintenance of such airflight 
        equipment, and flight simulators, but does not include airplanes 
        with a gross weight of less than 30,000 pounds that are used on 
        intermittent or irregularly timed flights. 
           Sec. 17.  Minnesota Statutes 1994, section 297A.25, 
        subdivision 28, is amended to read: 
           Subd. 28.  [WASTE PROCESSING EQUIPMENT.] The gross receipts 
        from the sale of equipment used for processing solid or 
        hazardous waste at a resource recovery facility, as defined in 
        section 115A.03, subdivision 28, are exempt, including pollution 
        control equipment at a resource recovery facility that burns 
        refuse-derived fuel or mixed municipal solid waste as its 
        primary fuel. 
           Sec. 18.  Minnesota Statutes 1994, section 297A.25, 
        subdivision 37, is amended to read: 
           Subd. 37.  [YMCA AND, YWCA, AND JCC MEMBERSHIPS.] The gross 
        receipts from the sale of memberships, including both one-time 
        initiation fees and periodic membership dues, to an association 
        incorporated under section 315.44 or an organization defined 
        under section 315.51, are exempt.  However, all separate charges 
        made for the privilege of having access to and the use of the 
        association's sports and athletic facilities are taxable. 
           Sec. 19.  Minnesota Statutes 1995 Supplement, section 
        297A.25, subdivision 57, is amended to read: 
           Subd. 57.  [HORSES; RELATED MATERIALS.] (a) The gross 
        receipts from the sale of horses, including racehorses, and 
        all are exempt. 
           (b) Sales to persons who raise or board horses, of all 
        materials, including feed and bedding, used or consumed in the 
        breeding, raising, owning, boarding, and keeping of horses, are 
        exempt.  Machinery, equipment, implements, tools, appliances, 
        furniture, and fixtures, used in the breeding, raising, owning, 
        boarding, and keeping of horses, are not included within this 
        exemption. 
           Sec. 20.  Minnesota Statutes 1995 Supplement, section 
        297A.25, subdivision 59, is amended to read: 
           Subd. 59.  [FARM MACHINERY.] From July 1, 1994, until June 
        30, 1996 1997, the gross receipts from the sale of used farm 
        machinery are exempt. 
           Sec. 21.  Minnesota Statutes 1995 Supplement, section 
        297A.25, subdivision 61, is amended to read: 
           Subd. 61.  [CONSTRUCTION MATERIALS FOR INDOOR ICE ARENAS.] 
        The gross receipts from the sale of construction materials and 
        supplies are exempt if:  
           (1) the materials and supplies are to be used in 
        constructing an indoor ice arena intended to be used 
        predominantly for youth athletic activities; and 
           (2) a school district is a party to a joint powers 
        agreement that governs the ownership, operation, and maintenance 
        of the facility the construction project is financed in whole or 
        in part from a grant under sections 240A.09 and 240A.10 or the 
        proceeds of obligations issued under section 373.43 or 475.58, 
        subdivision 3.  
           This exemption applies regardless of whether the purchases 
        are made by the owner of the facility or a contractor. 
           Sec. 22.  Minnesota Statutes 1994, section 297A.256, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FUNDRAISING SALES BY NONPROFIT GROUPS.] 
        Notwithstanding the provisions of this chapter, the following 
        sales made by a "nonprofit organization" are exempt from the 
        sales and use tax. 
           (a)(1) All sales made by an organization for fundraising 
        purposes if that organization exists solely for the purpose of 
        providing educational or social activities for young people 
        primarily age 18 and under.  This exemption shall apply only if 
        the gross annual sales receipts of the organization from 
        fundraising do not exceed $10,000. 
           (2) A club, association, or other organization of 
        elementary or secondary school students organized for the 
        purpose of carrying on sports, educational, or other 
        extracurricular activities is a separate organization from the 
        school district or school for purposes of applying the $10,000 
        limit.  This paragraph does not apply if the sales are derived 
        from admission charges or from activities for which the money 
        must be deposited with the school district treasurer under 
        section 123.38, subdivision 2, or be recorded in the same manner 
        as other revenues or expenditures of the school district under 
        section 123.38, subdivision 2b. 
           (b) All sales made by an organization for fundraising 
        purposes if that organization is a senior citizen group or 
        association of groups that in general limits membership to 
        persons age 55 or older and is organized and operated 
        exclusively for pleasure, recreation and other nonprofit 
        purposes and no part of the net earnings inure to the benefit of 
        any private shareholders.  This exemption shall apply only if 
        the gross annual sales receipts of the organization from 
        fundraising do not exceed $10,000. 
           (c) The gross receipts from the sales of tangible personal 
        property at, admission charges for, and sales of food, meals, or 
        drinks at fundraising events sponsored by a nonprofit 
        organization when the entire proceeds, except for the necessary 
        expenses therewith, will be used solely and exclusively for 
        charitable, religious, or educational purposes.  This exemption 
        does not apply to admission charges for events involving bingo 
        or other gambling activities or to charges for use of amusement 
        devices involving bingo or other gambling activities.  For 
        purposes of this clause paragraph, a "nonprofit organization" 
        means any unit of government, corporation, society, association, 
        foundation, or institution organized and operated for 
        charitable, religious, educational, civic, fraternal, senior 
        citizens' or veterans' purposes, no part of the net earnings of 
        which enures to the benefit of a private individual. 
           If the profits are not used solely and exclusively for 
        charitable, religious, or educational purposes, the entire gross 
        receipts are subject to tax. 
           Each nonprofit organization shall keep a separate 
        accounting record, including receipts and disbursements from 
        each fundraising event.  All deductions from gross receipts must 
        be documented with receipts and other records.  If records are 
        not maintained as required, the entire gross receipts are 
        subject to tax. 
           The exemption provided by this section paragraph does not 
        apply to any sale made by or in the name of a nonprofit 
        corporation as the active or passive agent of a person that is 
        not a nonprofit corporation. 
           The exemption for fundraising events under this section 
        paragraph is limited to no more than 24 days a year.  
        Fundraising events conducted on premises leased or occupied for 
        more than four days but less than 30 days do not qualify for 
        this exemption. 
           (d) The gross receipts from the sale or use of tickets or 
        admissions to a golf tournament held in Minnesota are exempt if 
        the beneficiary of the tournament's net proceeds qualifies as a 
        tax-exempt organization under section 501(c)(3) of the Internal 
        Revenue Code, including a tournament conducted on premises 
        leased or occupied for more than four days. 
           Sec. 23.  Minnesota Statutes 1995 Supplement, section 
        297B.01, subdivision 8, is amended to read: 
           Subd. 8.  [PURCHASE PRICE.] "Purchase price" means the 
        total consideration valued in money for a sale, whether paid in 
        money or otherwise.  The purchase price excludes the amount of a 
        manufacturer's rebate paid or payable to the purchaser.  If a 
        motor vehicle is taken in trade as a credit or as part payment 
        on a motor vehicle taxable under this chapter, the credit or 
        trade-in value allowed by the person selling the motor vehicle 
        shall be deducted from the total selling price to establish the 
        purchase price of the vehicle being sold and the trade-in 
        allowance allowed by the seller shall constitute the purchase 
        price of the motor vehicle accepted as a trade-in.  The purchase 
        price in those instances where the motor vehicle is acquired by 
        gift or by any other transfer for a nominal or no monetary 
        consideration shall also include the average value of similar 
        motor vehicles, established by standards and guides as 
        determined by the motor vehicle registrar.  The purchase price 
        in those instances where a motor vehicle is manufactured by a 
        person who registers it under the laws of this state shall mean 
        the manufactured cost of such motor vehicle and manufactured 
        cost shall mean the amount expended for materials, labor and 
        other properly allocable costs of manufacture, except that in 
        the absence of actual expenditures for the manufacture of a part 
        or all of the motor vehicle, manufactured costs shall mean the 
        reasonable value of the completed motor vehicle.  
           The term "purchase price" shall not include the portion of 
        the value of a motor vehicle due solely to modifications 
        necessary to make the motor vehicle handicapped accessible.  The 
        term "purchase price" shall not include the transfer of a motor 
        vehicle by way of gift between a husband and wife or parent and 
        child, nor shall it include the transfer of a motor vehicle by a 
        guardian to a ward when there is no monetary consideration and 
        the title to such vehicle was registered in the name of the 
        guardian, as guardian, only because the ward was a minor.  There 
        shall not be included in "purchase price" the amount of any tax 
        imposed by the United States upon or with respect to retail 
        sales whether imposed upon the retailer or the consumer.  
           The term "purchase price" shall not include the transfer of 
        a motor vehicle as a gift between a foster parent and foster 
        child.  For purposes of this subdivision, a foster relationship 
        exists, regardless of the age of the child, if (1) a foster 
        parent's home is or was licensed as a foster family home under 
        Minnesota Rules, parts 9545.0010 to 9545.0260, and (2) the 
        county verifies that the child was a state ward or in permanent 
        foster care. 
           Sec. 24.  [315.51] [JCC; DEFINITION.] 
           A "JCC" means a nonprofit religious organization under 
        section 501(c)(3) of the Internal Revenue Code of 1986 known as 
        the Jewish Community Center of Greater Minneapolis or the Jewish 
        Community Center of Greater St. Paul and organized for the 
        purpose of serving the cultural, educational, and recreational 
        needs of the Jewish community. 
           Sec. 25.  Laws 1991, chapter 291, article 8, section 27, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [ADDITIONAL AUTHORITY; MANKATO MUNICIPAL 
        AIRPORT.] (a) In addition to the uses of revenues authorized in 
        subdivision 3, the city may use revenues received from taxes 
        authorized by subdivisions 1 and 2 to pay for rehabilitation, 
        expansion, improvement, and operation of the Mankato municipal 
        airport and related facilities, including securing or paying 
        debt service on bonds or other obligations issued to finance the 
        improvements. 
           (b) The city may issue general obligation bonds of the city 
        for the Mankato municipal airport and related facilities without 
        election under Minnesota Statutes, chapter 475, on the question 
        of issuance of the bonds or a tax to pay them.  The debt 
        represented by bonds issued for the Mankato municipal airport 
        and related facilities shall not be included in computing any 
        levy or debt limits applicable to the city. 
           (c) The total capital, administrative, and operating 
        expenses authorized in paragraph (a) payable from bond proceeds 
        and from the taxes authorized in subdivisions 1 and 2, excluding 
        investment earnings on bond proceeds and revenues, shall not 
        exceed $500,000 in any year, unless the city has dedicated in a 
        reserve fund sufficient funds to pay or secure payment of 
        principal and interest on bonds issued under subdivision 5 for a 
        period of at least one year.  The total amount of general 
        obligation bonds of the city issued for the Mankato municipal 
        airport and related facilities may not exceed $4,500,000. 
           (d) Notwithstanding the provisions of subdivision 4, the 
        authority of the city to impose taxes under subdivisions 1 and 2 
        shall not expire until the principal and interest on any bonds 
        or obligations issued to finance the Mankato municipal airport 
        and related facilities have been paid, or the city determines by 
        ordinance an earlier expiration date. 
           (e) This subdivision is effective the day after compliance 
        with Minnesota Statutes, section 645.021, subdivision 3, by the 
        governing body of the city of Mankato. 
           Sec. 26.  Laws 1995, chapter 264, article 2, section 42, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREATION; MEMBERSHIP.] (a) A state 
        advisory council is established to study the general and motor 
        vehicle sales and use taxes under Minnesota Statutes 1994, 
        chapters 297A and 297B, and to make recommendations to the 1996 
        legislature and the 1997 legislature.  The study shall be 
        completed and Interim findings shall be reported to the 
        legislature by February 1, 1996.  The study shall be completed 
        and a final report submitted to the legislature by January 1, 
        1997. 
           (b) The advisory council consists of 17 members who serve 
        at the pleasure of the appointing authority as follows: 
           (1) ten legislators; five members of the senate, including 
        two members of the minority party, appointed by the subcommittee 
        on committees of the committee on rules and administration and 
        five members of the house of representatives, including two 
        members of the minority party, appointed by the speaker; 
           (2) the commissioner of revenue or the commissioner's 
        designee; and 
           (3) six members of the public; two appointed by the 
        subcommittee on committees of the committee on rules and 
        administration of the senate, two appointed by the speaker of 
        the house, and two appointed by the governor.  At least one 
        member of the public that is appointed by each entity must 
        represent a consumer interest group or other private citizen 
        group, public policy organization, or university department of 
        public policy or economics. 
           Sec. 27.  Laws 1995, chapter 264, article 2, section 44, is 
        amended to read: 
           Sec. 44.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment. 
           Sections 3 and 4 are effective June 1, 1995.  Section 4 is 
        repealed June 1, 2000. 
           Sections 5 to 21 and 43, paragraph (a), are effective July 
        1, 1995. 
           Sections 23, 28, 33, 40, 42, and the part of section 22 
        amending language in paragraph (i), clause (vii), are effective 
        the day following final enactment. 
           Sections 24 and 34 are effective for sales made after 
        December 31, 1996. 
           Section 25 is effective beginning with leases or rentals 
        made after June 30, 1995. 
           Section 26 is effective retroactively for sales after May 
        31, 1992. 
           Section 27 is effective for sales made after June 30, 1995. 
           Section 29 and the part of section 22 striking the language 
        after paragraph (h) are effective for sales after June 30, 1995. 
           Section 32 is effective for sales made after June 30, 1995, 
        and before July 1, 1996 1998. 
           Sections 35 and 36 are effective for sales or transfers 
        made after June 30, 1995. 
           Section 38 is effective the day after the governing body of 
        the city of Winona complies with Minnesota Statutes, section 
        645.021, subdivision 3. 
           Section 39 is effective upon compliance by the Minneapolis 
        city council with Minnesota Statutes, section 645.021, 
        subdivision 3. 
           Section 43, paragraph (b), is effective for sales of 900 
        information services made after June 30, 1995. 
           Sec. 28.  [SOLID WASTE MANAGEMENT TAXES.] 
           Subdivision 1.  [MORATORIUM EXTENDED.] The commissioner of 
        revenue shall not initiate or continue any action to collect any 
        underpayment from political subdivisions, or to reimburse any 
        overpayment to any political subdivisions of taxes on solid 
        waste management services under Minnesota Statutes, section 
        297A.45, until June 1, 1997.  The statute of limitations for 
        assessing, collecting, or refunding taxes subject to the 
        provisions of this subdivision and Laws 1995, chapter 264, 
        article 2, section 40, is tolled from the date of enactment of 
        this law, if enacted, until June 1, 1997. 
           Subd. 2.  [CONTINUE EVALUATION; REPORT.] (a) The 
        commissioner of revenue shall continue the evaluation to 
        determine the taxes paid by all affected political subdivisions 
        on solid waste management services as required by Minnesota 
        Statutes, section 297A.45.  This is a continuation of the 
        evaluation provided for under Laws 1995, chapter 264, article 2, 
        section 40, except that the evaluation under this subdivision 
        includes all political subdivisions subject to the tax under 
        Minnesota Statutes, section 297A.45.  The political subdivisions 
        shall cooperate fully and shall supply the commissioner of 
        revenue with whatever information the commissioner of revenue 
        deems necessary for compliance under the law. 
           (b) By May 1, 1996, the commissioner of revenue shall 
        notify all counties of the opportunity to correct the 
        information provided under Laws 1995, chapter 264, article 2, 
        section 40.  A county must submit their corrections in writing 
        to the department of revenue by July 1, 1996. 
           (c) The commissioner of revenue shall report by January 15, 
        1997, the results of the evaluation under this subdivision to 
        the chairs of the house committee on taxes and the senate 
        committee on taxes and tax laws.  The final results of the 
        evaluation are classified as public data. 
           Subd. 3.  [TASK FORCE; SCOPE.] (a) The director of the 
        office of environmental assistance shall establish and staff a 
        task force to study implementation of the sales and use taxes on 
        solid waste management services under Minnesota Statutes, 
        section 297A.45, and the solid waste generator assessment under 
        Minnesota Statutes, section 116.07, subdivision 10.  The task 
        force shall make recommendations to the sales tax advisory 
        council and to the chairs of the house environment and natural 
        resources committee, and the senate environment and natural 
        resources committee of the legislature: 
           (1) by November 30, 1996, for the goals itemized in 
        paragraph (c), clauses (1)(i) and (ii); 
           (2) by January 15, 1997, for the goals itemized in 
        paragraph (c), clauses (1)(iii) to (vii); and 
           (3) by February 15, 1997, for the goal itemized in 
        paragraph (c), clause (2). 
           (b) The task force shall consist of 14 voting members with 
        expertise in the areas of taxation or waste management, as 
        provided in this subdivision: 
           (1) four legislators, or their designees, including two 
        members of the senate, one from the minority party and one from 
        the majority party, appointed by the subcommittee on committees 
        of the committee on rules and administration and two members of 
        the house of representatives, one from the minority party and 
        one from the majority party, appointed by the speaker; 
           (2) two representatives from the department of revenue, 
        appointed by the commissioner of revenue; 
           (3) one representative from the office of environmental 
        assistance, appointed by the director of the office; 
           (4) one representative from the pollution control agency, 
        appointed by the commissioner of the agency; 
           (5) three persons representing political subdivisions, at 
        least one of which must represent county government, appointed 
        by the director of the office of environmental assistance; and 
           (6) three persons representing the private waste collection 
        industry, appointed by the director of the office of 
        environmental assistance, at least one of which is knowledgeable 
        on how taxing and pricing of waste collection services interact. 
           (c) The goals of the task force are: 
           (1) relating to solid waste management taxes: 
           (i) to monitor the evaluation conducted under subdivision 2 
        and to provide input to the commissioner of revenue if questions 
        of interpretations arise during the evaluation; 
           (ii) to discuss the tax base principles and possible 
        options to use for the tax period from January 1, 1990, to 
        December 31, 1995; 
           (iii) to discuss the base to which the tax applies 
        beginning January 1, 1996, taking into consideration the impact 
        on political subdivisions and private haulers, resulting from 
        recent court decisions regarding government control over the 
        flow of waste and the effect of these decisions on waste 
        management fee structures; 
           (iv) to examine the impact on total revenues from various 
        funding sources including tipping fees, service charges, 
        assessments, or subsidizing through the property tax system; 
           (v) to identify ways to simplify or restructure the current 
        tax system for ease of collection and administration; 
           (vi) to discuss methods to ensure that the taxes due to the 
        state are paid either by the haulers or the political 
        subdivisions; and 
           (vii) to recommend a procedure for keeping open 
        communication between the various entities on any future issues 
        relating to this tax; and 
           (2) relating to the solid waste generator assessment: 
           (i) to discuss the distinction between "residential" and 
        "nonresidential" for purposes of the solid waste generator 
        assessment under Minnesota Statutes, section 116.07, subdivision 
        10; and 
           (ii) to examine ways to simplify or restructure the current 
        assessment system for ease of collection and administration. 
           Subd. 4.  [USE OF TAX PROCEEDS.] It is the legislature's 
        intent that the total amount of tax proceeds collected under 
        Minnesota Statutes, section 297A.45, less the department of 
        revenue's costs of administering the program including the cost 
        of conducting the evaluation under subdivision 2, be used for 
        administration of programs and functions related to reducing the 
        quantity and toxicity of solid waste, recycling, household 
        hazardous waste management, and other similarly related 
        programs.  Appropriations may be made in block grants or 
        competitive grants to political subdivisions.  Money may also be 
        used by the office of environmental assistance and the pollution 
        control agency in helping to administer and enforce the programs 
        and functions identified in this subdivision.  Appropriations 
        may also be made to the state attorney general's office for 
        providing legal assistance to political subdivisions relating to 
        solid waste management.  
           Subd. 5.  [DEPARTMENT OF REVENUE GUIDELINES.] The 
        commissioner of revenue shall prepare a single set of guidelines 
        for complying with Minnesota Statutes, section 297A.45, 
        including all existing rules, and shall send a copy of these 
        guidelines on or before May 1, 1996, to all known political 
        subdivisions subject to the tax under Minnesota Statutes, 
        section 297A.45.  Notwithstanding taxes collected prior to 
        January 1, 1996, political subdivisions and persons responsible 
        for collecting the tax under Minnesota Statutes, section 
        297A.45, must follow these guidelines for all taxes collected on 
        solid waste management services beginning January 1, 1996.  The 
        commissioner shall send a copy of the guidelines to the chairs 
        of the house committee on taxes and the senate committee on 
        taxes and tax laws by April 22, 1996, for their review and 
        comment. 
           Subd. 6.  [SEPARATE REPORTING; ADDITIONAL PENALTY.] (a) In 
        order to determine the total amount of sales and use taxes 
        collected under Minnesota Statutes, section 297A.45, the 
        department of revenue shall reexamine the present method of 
        having this tax reported on the sales tax return.  The 
        department must also consider other options including requiring 
        the sales and use tax amounts to be reported on a separate form. 
           (b) In addition to the penalties and interest that apply to 
        taxes under Minnesota Statutes, section 297A.45, a penalty equal 
        to the specified penalty of the taxpayer's tax liability is 
        imposed on any person or political subdivision who fails to 
        separately report the amount of the taxes due under Minnesota 
        Statutes, section 297A.45.  The specified penalties are: 
           First violation            ten percent 
           Second and subsequent 
           violations                 20 percent 
           The additional penalties apply only to that portion of the 
        sales and use tax which should have been reported on the 
        separate line for taxes under Minnesota Statutes, section 
        297A.45, and that was included on other lines of the sales tax 
        return. 
           Subd. 7.  [APPROPRIATION.] The amount necessary to conduct 
        the evaluation under subdivision 2, but not to exceed $250,000, 
        is appropriated for fiscal years 1996 and 1997, to the 
        commissioner of revenue from money deposited in the general fund 
        from the solid waste collection and disposal tax under Minnesota 
        Statutes, section 297A.45. 
           Subd. 8.  [EFFECTIVE DATE.] Subdivisions 1 to 3, 6, 
        paragraph (a), and 7, are effective the day following final 
        enactment.  Subdivisions 4 and 5 are effective for taxes 
        collected January 1, 1996, and thereafter.  Subdivision 6, 
        paragraph (b), is effective for returns filed after September 1, 
        1996. 
           Sec. 29.  [CITY OF HERMANTOWN; SALES TAX.] 
           Subdivision 1.  [SALES TAX AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, section 477A.016, or any other contrary 
        provision of law, ordinance, or city charter, the city of 
        Hermantown may, by ordinance, impose an additional sales tax of 
        up to one percent on sales transactions taxable pursuant to 
        Minnesota Statutes, chapter 297A, that occur within the city.  
        The proceeds of the tax imposed under this section must be used 
        to meet the costs of: 
           (1) extending a sewer interceptor line; 
           (2) construction of a booster pump station, reservoirs, and 
        related improvements to the water system; and 
           (3) construction of a police and fire station. 
           Subd. 2.  [REFERENDUM.] If the Hermantown city council 
        proposes to impose the sales tax authorized by this section, it 
        shall conduct a referendum on the issue.  The question of 
        imposing the tax must be submitted to the voters at a special or 
        general election.  The tax may not be imposed unless a majority 
        of votes cast on the question of imposing the tax are in the 
        affirmative.  The commissioner of revenue shall prepare a 
        suggested form of question to be presented at the election.  
        This subdivision applies notwithstanding any city charter 
        provision to the contrary. 
           Subd. 3.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 
        TAXES.] A sales tax imposed under this section must be reported 
        and paid to the commissioner of revenue with the state sales 
        taxes, and be subject to the same penalties, interest, and 
        enforcement provisions.  The proceeds of the tax, less refunds 
        and a proportionate share of the cost of collection, shall be 
        remitted at least quarterly to the city.  The commissioner shall 
        deduct from the proceeds remitted an amount that equals the 
        indirect statewide cost as well as the direct and indirect 
        department costs necessary to administer, audit, and collect the 
        tax.  The amount deducted shall be deposited in the state 
        general fund. 
           Subd. 4.  [TERMINATION.] The tax authorized under this 
        section terminates at the later of (1) ten years after the date 
        of initial imposition of the tax, or (2) on the first day of the 
        second month next succeeding a determination by the city council 
        that sufficient funds have been received from the tax to finance 
        the improvements described in subdivision 1, clauses (1) to (3), 
        and to prepay or retire at maturity the principal, interest, and 
        premium due on any bonds issued for the improvements.  Any funds 
        remaining after completion of the improvements and retirement or 
        redemption of the bonds may be placed in the general fund of the 
        city. 
           Subd. 5.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
        effective the day after final enactment, upon compliance with 
        Minnesota Statutes, section 645.021, subdivision 3, by the city 
        of Hermantown. 
           Sec. 30.  [CITY OF LITTLE FALLS; TAX AUTHORIZED.] 
           Subdivision 1.  [SALES OF FOOD; TAX.] The city of Little 
        Falls may by ordinance impose a tax of one-half percent on the 
        gross receipts from the retail sale of food and nonalcoholic 
        beverages sold by the operator of a restaurant or place of 
        refreshment within the city.  The tax imposed may be effective 
        at any time after July 1, 1996.  
           Subd. 2.  [DEFINITIONS.] For purposes of this section:  
           (1) "restaurant" means every building or other structure or 
        enclosure, or any part thereof and all buildings in connection, 
        kept, used or maintained as, or held out to the public to be an 
        enclosure where meals or lunches are served or prepared for 
        service elsewhere, except schools; 
           (2) "place of refreshment" means every building, structure, 
        vehicle, sidewalk cart or any part thereof, used as, maintained 
        as, or advertised as, or held out to be a place where 
        confectionery, ice cream, or drinks of various kinds are made, 
        sold, or served at retail, excepting schools and school 
        sponsored events; and 
           (3) "operator" means the person who is the proprietor of 
        the restaurant, or place of refreshment, whether in the capacity 
        of owner, lessee, subleases, licensee, or an other capacity. 
           Subd. 3.  [USE OF PROCEEDS.] The ordinance adopted by the 
        city shall provide for distribution of the proceeds of the tax.  
        The proceeds of the tax must be used for tourism purposes, 
        including operating and maintaining the activities and programs 
        of the tourism and convention bureau. 
           Subd. 4.  [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 
        TAXES.] The tax imposed under this section shall be enforced, 
        administered, and collected by the city of Little Falls provided 
        that the city may contract with the commissioner of revenue to 
        perform audits of the tax on behalf of the city.  The 
        commissioner shall charge the city an amount that equals the 
        direct and indirect costs incurred by the department that are 
        necessary to audit the tax. 
           Subd. 5.  [EXPIRATION OF TAXING AUTHORITY.] The tax imposed 
        under this section shall expire 15 years after it first becomes 
        effective. 
           Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
        day following compliance by the governing body of the city of 
        Little Falls with Minnesota Statutes, section 645.021, 
        subdivision 3. 
           Sec. 31.  [EFFECTIVE DATES.] 
           Sections 1 to 7, 10, 12, 16 to 20, 22, 26, and 27 are 
        effective the day after final enactment. 
           Sections 8 and 9 are effective for refunds applied for 
        after December 31, 1996.  
           Sections 11 and 13 are effective for sales made after 
        December 31, 1996.  
           Section 23 is effective for transfers of motor vehicles 
        after June 30, 1996. 
           Section 21 is effective for purchases made after June 30, 
        1996. 
                                   ARTICLE 3 
                                 PROPERTY TAXES 
           Section 1.  Minnesota Statutes 1994, section 103E.611, 
        subdivision 7, is amended to read: 
           Subd. 7.  [COLLECTION AND ENFORCEMENT OF DRAINAGE LIENS.] 
        The provisions of law that exist relating to the enforcement, 
        collection of, penalty, and interest provisions relating to real 
        estate taxes are adopted apply to enforce the payment of 
        drainage liens.  If there is a default, a penalty may not be 
        added to an installment of principal and interest, but each 
        defaulted payment, principal, and interest draws interest from 
        the date of default until paid at the rate determined by the 
        state court administrator for judgments under section 549.09.  
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        124A.03, subdivision 2, is amended to read: 
           Subd. 2.  [REFERENDUM REVENUE.] (a) The revenue authorized 
        by section 124A.22, subdivision 1, may be increased in the 
        amount approved by the voters of the district at a referendum 
        called for the purpose.  The referendum may be called by the 
        school board or shall be called by the school board upon written 
        petition of qualified voters of the district.  The referendum 
        shall be conducted one or two calendar years before the 
        increased levy authority, if approved, first becomes payable. 
        Only one election to approve an increase may be held in a 
        calendar year.  Unless the referendum is conducted by mail under 
        paragraph (g), the referendum must be held on the first Tuesday 
        after the first Monday in November.  The ballot shall state the 
        maximum amount of the increased revenue per actual pupil unit, 
        the estimated referendum tax rate as a percentage of market 
        value in the first year it is to be levied, and that the revenue 
        shall be used to finance school operations.  The ballot may 
        state that existing referendum levy authority is expiring.  In 
        this case, the ballot may also compare the proposed levy 
        authority to the existing expiring levy authority, and express 
        the proposed increase as the amount, if any, over the expiring 
        referendum levy authority.  The ballot shall designate the 
        specific number of years, not to exceed ten, for which the 
        referendum authorization shall apply.  The notice required under 
        section 275.60 may be modified to read, in cases of renewing 
        existing levies: 
           "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
           FOR A PROPERTY TAX INCREASE." 
           The ballot may contain a textual portion with the 
        information required in this subdivision and a question stating 
        substantially the following:  
           "Shall the increase in the revenue proposed by (petition 
        to) the board of ........., School District No. .., be approved?"
           If approved, an amount equal to the approved revenue per 
        actual pupil unit times the actual pupil units for the school 
        year beginning in the year after the levy is certified shall be 
        authorized for certification for the number of years approved, 
        if applicable, or until revoked or reduced by the voters of the 
        district at a subsequent referendum. 
           (b) The school board shall prepare and deliver by first 
        class mail at least 15 days but no more than 30 days prior to 
        the day of the referendum to each taxpayer a notice of the 
        referendum and the proposed revenue increase.  The school board 
        need not mail more than one notice to any taxpayer.  For the 
        purpose of giving mailed notice under this subdivision, owners 
        shall be those shown to be owners on the records of the county 
        auditor or, in any county where tax statements are mailed by the 
        county treasurer, on the records of the county treasurer.  Every 
        property owner whose name does not appear on the records of the 
        county auditor or the county treasurer shall be deemed to have 
        waived this mailed notice unless the owner has requested in 
        writing that the county auditor or county treasurer, as the case 
        may be, include the name on the records for this purpose.  The 
        notice must project the anticipated amount of tax increase in 
        annual dollars and annual percentage for typical residential 
        homesteads, agricultural homesteads, apartments, and 
        commercial-industrial property within the school district. 
           The notice for a referendum may state that an existing 
        referendum levy is expiring and project the anticipated amount 
        of increase over the existing referendum levy, if any, in annual 
        dollars and annual percentage for typical residential 
        homesteads, agricultural homesteads, apartments, and 
        commercial-industrial property within the school district. 
           The notice must include the following statement:  "Passage 
        of this referendum will result in an increase in your property 
        taxes."  However, in cases of renewing existing levies, the 
        notice may include the following statement:  "Passage of this 
        referendum may result in an increase in your property taxes." 
           (c) A referendum on the question of revoking or reducing 
        the increased revenue amount authorized pursuant to paragraph 
        (a) may be called by the school board and shall be called by the 
        school board upon the written petition of qualified voters of 
        the district.  A referendum to revoke or reduce the levy amount 
        must be based upon the dollar amount, local tax rate, or amount 
        per actual pupil unit, that was stated to be the basis for the 
        initial authorization.  Revenue approved by the voters of the 
        district pursuant to paragraph (a) must be received at least 
        once before it is subject to a referendum on its revocation or 
        reduction for subsequent years.  Only one revocation or 
        reduction referendum may be held to revoke or reduce referendum 
        revenue for any specific year and for years thereafter. 
           (d) A petition authorized by paragraph (a) or (c) shall be 
        effective if signed by a number of qualified voters in excess of 
        15 percent of the registered voters of the school district on 
        the day the petition is filed with the school board.  A 
        referendum invoked by petition shall be held on the date 
        specified in paragraph (a). 
           (e) The approval of 50 percent plus one of those voting on 
        the question is required to pass a referendum authorized by this 
        subdivision. 
           (f) At least 15 days prior to the day of the referendum, 
        the district shall submit a copy of the notice required under 
        paragraph (b) to the commissioner of children, families, and 
        learning and to the county auditor of each county in which the 
        school district is located.  Within 15 days after the results of 
        the referendum have been certified by the school board, or in 
        the case of a recount, the certification of the results of the 
        recount by the canvassing board, the district shall notify the 
        commissioner of children, families, and learning of the results 
        of the referendum. 
           (g) Except for a referendum held under subdivision 2b, any 
        referendum under this section held on a day other than the first 
        Tuesday after the first Monday in November must be conducted by 
        mail in accordance with section 204B.46.  Notwithstanding 
        paragraph (b) to the contrary, in the case of a referendum 
        conducted by mail under this paragraph, the notice required by 
        paragraph (b) shall be prepared and delivered by first class 
        mail at least 20 days before the referendum. 
           Sec. 3.  Minnesota Statutes 1994, section 270.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POWERS OF COMMISSIONER; APPLICATION FOR 
        ABATEMENT; ORDERS.] (a) The commissioner of revenue shall 
        prescribe the form of all blanks and books required under this 
        chapter and shall hear and determine all matters of grievance 
        relating to taxation.  Except for matters delegated to the 
        various boards of county commissioners under section 375.192, 
        and except as otherwise provided by law, the commissioner shall 
        have power to grant such reduction or abatement of net tax 
        capacities or taxes and of any costs, penalties or interest 
        thereon as the commissioner may deem just and equitable, and to 
        order the refundment, in whole or in part, of any taxes, costs, 
        penalties or interest thereon which have been erroneously or 
        unjustly paid.  Application therefor shall be submitted with a 
        statement of facts in the case and the favorable recommendation 
        of the county board or of the board of abatement of any city 
        where any such board exists, and the county auditor of the 
        county wherein such tax was levied or paid. In the case of taxes 
        other than gross earnings taxes, the order may be made only on 
        application and approval as provided in this paragraph.  No 
        reduction, abatement, or refundment of any special assessments 
        made or levied by any municipality for local improvements shall 
        be made unless it is also approved by the board of review or 
        similar taxing authority of such municipality. 
           (b) The commissioner has the power to grant reductions or 
        abatements of gross earnings tax.  An application for reduction 
        of gross earnings taxes may be made directly to the commissioner 
        without the favorable action of the county board and county 
        auditor.  The commissioner shall direct that any gross earnings 
        taxes that may have been erroneously or unjustly paid be applied 
        against unpaid taxes due from the applicant. 
           (c) The commissioner shall forward to the county auditor a 
        copy of the order made by the commissioner in all cases in which 
        the approval of the county board is required. 
           (d) The commissioner may refer any question that may arise 
        in reference to the true construction of this chapter to the 
        attorney general, and the decision thereon shall be in force and 
        effect until annulled by the judgment of a court of competent 
        jurisdiction.  
           (e) The commissioner may by written order abate, reduce, or 
        refund any penalty or interest imposed by any law relating to 
        taxation, if in the commissioner's opinion the failure to timely 
        pay the tax or failure to timely file the return is due to 
        reasonable cause.  The order shall be made on application of the 
        taxpayer to the commissioner. 
           (f) If an order issued under this subdivision is for an 
        abatement, reduction, or refund of over $5,000, it shall be 
        valid only if approved in writing by the attorney general. 
           (g) An appeal may not be taken to the tax court from any 
        order of the commissioner of revenue made in the exercise of the 
        discretionary authority granted in paragraph (a) with respect to 
        the reduction or abatement of real or personal property taxes in 
        response to a taxpayer's application for an abatement, 
        reduction, or refund of taxes, net tax capacities, costs, 
        penalties, or interest. 
           Sec. 4.  Minnesota Statutes 1994, section 273.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [WHAT RIGHTS NOT AFFECTED.] Nothing in 
        subdivisions 1 to 3 shall affect any rights in undervalued or 
        erroneously classified property, acquired for value in good 
        faith prior to the correction of the net tax capacity thereof by 
        the county auditor as provided in this section.  Any person 
        whose rights are adversely affected by any action of the county 
        auditor as provided in this subdivision may apply for a 
        reduction of the net tax capacity under the provisions of 
        section 270.07, relating to the powers of the commissioner of 
        revenue 375.192. 
           Sec. 5.  Minnesota Statutes 1995 Supplement, section 
        273.11, subdivision 16, is amended to read: 
           Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
        Improvements to homestead property made before January 2, 2003, 
        shall be fully or partially excluded from the value of the 
        property for assessment purposes provided that (1) the house is 
        at least 35 years old at the time of the improvement and (2) 
        either 
           (a) the assessor's estimated market value of the house on 
        January 2 of the current year is equal to or less than $150,000, 
        or 
           (b) if the estimated market value of the house is over 
        $150,000 market value but is less than $300,000 on January 2 of 
        the current year, the property qualifies if 
           (i) it is located in a city or town in which 50 percent or 
        more of the owner-occupied housing units were constructed before 
        1960 based upon the 1990 federal census, and 
           (ii) the city or town's median family income based upon the 
        1990 federal census is less than the statewide median family 
        income based upon the 1990 federal census, or 
           (c) if the estimated market value of the house is $300,000 
        or more on January 2 of the current year, the property qualifies 
        if 
           (i) it is located in a city or town in which 45 percent or 
        more of the homes were constructed before 1940 based upon the 
        1990 federal census, and 
           (ii) it is located in a city or town in which 45 percent or 
        more of the housing units were rental based upon the 1990 
        federal census, and 
           (iii) the city or town's median value of owner occupied 
        housing units based upon the 1990 federal census is less than 
        the statewide median value of owner occupied housing units based 
        upon the 1990 federal census. 
           Any house which has an estimated market value of $300,000 
        or more on January 2 of the current year is not eligible to 
        receive any property valuation exclusion under this section.  
        For purposes of determining this eligibility, "house" means land 
        and buildings.  
           The age of a residence is the number of years that the 
        residence has existed at its present site.  In the case of an 
        owner-occupied duplex or triplex, the improvement is eligible 
        regardless of which portion of the property was improved. 
           If the property lies in a jurisdiction which is subject to 
        a building permit process, a building permit must have been 
        issued prior to commencement of the improvement.  Any 
        improvement must add at least $1,000 to the value of the 
        property to be eligible for exclusion under this subdivision.  
        Only improvements to the structure which is the residence of the 
        qualifying homesteader or construction of or improvements to no 
        more than one two-car garage per residence qualify for the 
        provisions of this subdivision.  If an improvement was begun 
        between January 2, 1992, and January 2, 1993, any value added 
        from that improvement for the January 1994 and subsequent 
        assessments shall qualify for exclusion under this subdivision 
        provided that a building permit was obtained for the improvement 
        between January 2, 1992, and January 2, 1993.  Whenever a 
        building permit is issued for property currently classified as 
        homestead, the issuing jurisdiction shall notify the property 
        owner of the possibility of valuation exclusion under this 
        subdivision.  The assessor shall require an application, 
        including documentation of the age of the house from the owner, 
        if unknown by the assessor.  The application may be filed 
        subsequent to the date of the building permit provided that the 
        application must be filed prior to July 1 of the assessment year 
        in which the market value from the qualifying improvement is 
        added to that property's assessment within three years of the 
        date the building permit was issued for the improvement.  If the 
        property lies in a jurisdiction which is not subject to a 
        building permit process, the application must be filed within 
        three years of the date the improvement was made.  The assessor 
        may require proof from the taxpayer of the date the improvement 
        was made.  Applications must be received prior to July 1 of any 
        year in order to be effective for taxes payable in the following 
        year. 
           After the adjournment of the 1994 county board of 
        equalization meetings, No exclusion may be granted for an 
        improvement by a local board of review or county board of 
        equalization and no abatement of the taxes for qualifying 
        improvements may be granted by the county board unless (1) a 
        building permit was issued prior to the commencement of the 
        improvement if the jurisdiction requires a building permit, and 
        (2) an application was completed on a timely basis.  No 
        abatement of the taxes for qualifying improvements may be 
        granted by a county board unless (1) a building permit was 
        issued prior to commencement of the improvement if the 
        jurisdiction requires a building permit, and (2) an application 
        was completed on a timely basis. 
           The assessor shall note the qualifying value of each 
        improvement on the property's record, and the sum of those 
        amounts shall be subtracted from the value of the property in 
        each year for ten years after the improvement has been made, at 
        which time an amount equal to 20 percent of the qualifying value 
        shall be added back in each of the five subsequent assessment 
        years.  If an application is filed after the first assessment 
        date at which an improvement could have been subject to the 
        valuation exclusion under this subdivision, the ten-year period 
        during which the value is subject to exclusion is reduced by the 
        number of years that have elapsed since the property would have 
        qualified initially.  The valuation exclusion shall terminate 
        whenever (1) the property is sold, or (2) the property is 
        reclassified to a class which does not qualify for treatment 
        under this subdivision. Improvements made by an occupant who is 
        the purchaser of the property under a conditional purchase 
        contract do not qualify under this subdivision unless the seller 
        of the property is a governmental entity.  The qualifying value 
        of the property shall be computed based upon the increase from 
        that structure's market value as of January 2 preceding the 
        acquisition of the property by the governmental entity. 
           The total qualifying value for a homestead may not exceed 
        $50,000.  The total qualifying value for a homestead with a 
        house that is less than 70 years old may not exceed $25,000.  
        The term "qualifying value" means the increase in estimated 
        market value resulting from the improvement if the improvement 
        occurs when the house is at least 70 years old, or one-half of 
        the increase in estimated market value resulting from the 
        improvement otherwise.  The $25,000 and $50,000 maximum 
        qualifying value under this subdivision may result from up to 
        three separate improvements to the homestead.  The application 
        shall state, in clear language, that if more than three 
        improvements are made to the qualifying property, a taxpayer may 
        choose which three improvements are eligible, provided that 
        after the taxpayer has made the choice and any valuation 
        attributable to those improvements has been excluded from 
        taxation, no further changes can be made by the taxpayer. 
           If 50 percent or more of the square footage of a structure 
        is voluntarily razed or removed, the valuation increase 
        attributable to any subsequent improvements to the remaining 
        structure does not qualify for the exclusion under this 
        subdivision.  If a structure is unintentionally or accidentally 
        destroyed by a natural disaster, the property is eligible for an 
        exclusion under this subdivision provided that the structure was 
        not completely destroyed.  The qualifying value on property 
        destroyed by a natural disaster shall be computed based upon the 
        increase from that structure's market value as determined on 
        January 2 of the year in which the disaster occurred.  A 
        property receiving benefits under the homestead disaster 
        provisions under section 273.123 is not disqualified from 
        receiving an exclusion under this subdivision.  If any 
        combination of improvements made to a structure after January 1, 
        1993, increases the size of the structure by 100 percent or 
        more, the valuation increase attributable to the portion of the 
        improvement that causes the structure's size to exceed 100 
        percent does not qualify for exclusion under this subdivision. 
           Sec. 6.  Minnesota Statutes 1994, section 273.111, 
        subdivision 3, is amended to read: 
           Subd. 3.  (a) Real estate consisting of ten acres or more 
        or a nursery or greenhouse, and qualifying for classification as 
        class 1b, 2a, or 2b under section 273.13, subdivision 23, 
        paragraph (d), shall be entitled to valuation and tax deferment 
        under this section only if it is actively and exclusively 
        devoted to agricultural use as defined in subdivision 6 and 
        either:  
           (1) is the homestead of the owner, or of a surviving 
        spouse, child, or sibling of the owner or is real estate which 
        is farmed with the real estate which contains the homestead 
        property; or 
           (2) has been in possession of the applicant, the 
        applicant's spouse, parent, or sibling, or any combination 
        thereof, for a period of at least seven years prior to 
        application for benefits under the provisions of this section, 
        or is real estate which is farmed with the real estate which 
        qualifies under this clause and is within two townships or 
        cities or combination thereof from the qualifying real estate; 
        or 
           (3) is the homestead of a shareholder in a family farm 
        corporation as defined in section 500.24, notwithstanding the 
        fact that legal title to the real estate may be held in the name 
        of the family farm corporation; or 
           (4) is in the possession of a nursery or greenhouse or an 
        entity owned by a proprietor, partnership, or corporation which 
        also owns the nursery or greenhouse operations on the parcel or 
        parcels. 
           (b) Valuation of real estate under this section is limited 
        to parcels the ownership of which is in noncorporate entities 
        except for:  
           (1) family farm corporations organized pursuant to section 
        500.24; and 
           (2) corporations that derive 80 percent or more of their 
        gross receipts from the wholesale or retail sale of 
        horticultural or nursery stock.  
           Corporate entities who previously qualified for tax 
        deferment pursuant to this section and who continue to otherwise 
        qualify under subdivisions 3 and 6 for a period of at least 
        three years following the effective date of Laws 1983, chapter 
        222, section 8, will not be required to make payment of the 
        previously deferred taxes, notwithstanding the provisions of 
        subdivision 9.  Sale of the land prior to the expiration of the 
        three-year period shall result in payment of deferred taxes as 
        follows:  sale within the first year requires payment of payable 
        1980, 1981, and 1982 deferred taxes; sale during the second year 
        requires payment of payable 1981 and 1982 taxes deferred; and 
        sale at any time during the third year will require payment of 
        payable 1983 taxes deferred.  Deferred taxes shall be paid even 
        if the land qualifies pursuant to subdivision 11a.  Special 
        assessments are payable at the end of the three-year period or 
        at time of sale, whichever comes first.  
           (c) Land that previously qualified for tax deferment 
        pursuant to this section and no longer qualifies because it is 
        not classified as agricultural land but would otherwise qualify 
        under subdivisions 3 and 6 for a period of at least three years 
        will not be required to make payment of the previously deferred 
        taxes, notwithstanding the provisions of subdivision 9.  Sale of 
        the land prior to the expiration of the three-year period 
        requires payment of deferred taxes as follows:  sale in the year 
        the land no longer qualifies requires payment of the current 
        year's deferred taxes plus payment of deferred taxes for the two 
        prior years; sale during the second year the land no longer 
        qualifies requires payment of the current year's deferred taxes 
        plus payment of the deferred taxes for the prior year; and sale 
        during the third year the land no longer qualifies requires 
        payment of the current year's deferred taxes.  Deferred taxes 
        shall be paid even if the land qualifies pursuant to subdivision 
        11a.  When such property is sold or no longer qualifies under 
        this paragraph, or at the end of the three-year period, 
        whichever comes first, all deferred special assessments plus 
        interest are payable in equal installments spread over the time 
        remaining until the last maturity date of the bonds issued to 
        finance the improvement for which the assessments were levied.  
        If the bonds have matured, the deferred special assessments plus 
        interest are payable within 90 days.  The provisions of section 
        429.061, subdivision 2, apply to the collection of these 
        installments.  Penalties are not imposed on any such special 
        assessments if timely paid. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 
        273.124, subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
        that is occupied and used for the purposes of a homestead by its 
        owner, who must be a Minnesota resident, is a residential 
        homestead.  
           Agricultural land, as defined in section 273.13, 
        subdivision 23, that is occupied and used as a homestead by its 
        owner, who must be a Minnesota resident, is an agricultural 
        homestead. 
           Dates for establishment of a homestead and homestead 
        treatment provided to particular types of property are as 
        provided in this section.  
           Property of a trustee, beneficiary, or grantor of a trust 
        is not disqualified from receiving homestead benefits if the 
        homestead requirements under this chapter are satisfied. 
           The assessor shall require proof, as provided in 
        subdivision 13, of the facts upon which classification as a 
        homestead may be determined.  Notwithstanding any other law, the 
        assessor may at any time require a homestead application to be 
        filed in order to verify that any property classified as a 
        homestead continues to be eligible for homestead status.  
        Notwithstanding any other law to the contrary, the department of 
        revenue may, upon request from an assessor, verify whether an 
        individual who is requesting or receiving homestead 
        classification has filed a Minnesota income tax return as a 
        resident for the most recent taxable year for which the 
        information is available. 
           When there is a name change or a transfer of homestead 
        property, the assessor may reclassify the property in the next 
        assessment unless a homestead application is filed to verify 
        that the property continues to qualify for homestead 
        classification. 
           (b) For purposes of this section, homestead property shall 
        include property which is used for purposes of the homestead but 
        is separated from the homestead by a road, street, lot, 
        waterway, or other similar intervening property.  The term "used 
        for purposes of the homestead" shall include but not be limited 
        to uses for gardens, garages, or other outbuildings commonly 
        associated with a homestead, but shall not include vacant land 
        held primarily for future development.  In order to receive 
        homestead treatment for the noncontiguous property, the owner 
        shall apply for it to the assessor by July 1 of the year when 
        the treatment is initially sought.  After initial qualification 
        for the homestead treatment, additional applications for 
        subsequent years are not required. 
           (c) Residential real estate that is occupied and used for 
        purposes of a homestead by a relative of the owner is a 
        homestead but only to the extent of the homestead treatment that 
        would be provided if the related owner occupied the property.  
        For purposes of this paragraph and paragraph (f), "relative" 
        means a parent, stepparent, child, stepchild, grandparent, 
        grandchild, brother, sister, uncle, or aunt.  This relationship 
        may be by blood or marriage.  Property that has been classified 
        as seasonal recreational residential property at any time during 
        which it has been owned by the current owner or spouse of the 
        current owner will not be reclassified as a homestead unless it 
        is occupied as a homestead by the owner; this prohibition also 
        applies to property that, in the absence of this paragraph, 
        would have been classified as seasonal recreational residential 
        property at the time when the residence was constructed.  
        Neither the related occupant nor the owner of the property may 
        claim a property tax refund under chapter 290A for a homestead 
        occupied by a relative.  In the case of a residence located on 
        agricultural land, only the house, garage, and immediately 
        surrounding one acre of land shall be classified as a homestead 
        under this paragraph, except as provided in paragraph (d). 
           (d) Agricultural property that is occupied and used for 
        purposes of a homestead by a relative of the owner, is a 
        homestead, only to the extent of the homestead treatment that 
        would be provided if the related owner occupied the property, 
        and only if all of the following criteria are met: 
           (1) the relative who is occupying the agricultural property 
        is a son, daughter, father, or mother of the owner of the 
        agricultural property or a son or daughter of the spouse of the 
        owner of the agricultural property, 
           (2) the owner of the agricultural property must be a 
        Minnesota resident, 
           (3) the owner of the agricultural property must not receive 
        homestead treatment on any other agricultural property in 
        Minnesota, and 
           (4) the owner of the agricultural property is limited to 
        only one agricultural homestead per family under this paragraph. 
           Neither the related occupant nor the owner of the property 
        may claim a property tax refund under chapter 290A for a 
        homestead occupied by a relative qualifying under this 
        paragraph.  For purposes of this paragraph, "agricultural 
        property" means the house, garage, other farm buildings and 
        structures, and agricultural land. 
           Application must be made to the assessor by the owner of 
        the agricultural property to receive homestead benefits under 
        this paragraph.  The assessor may require the necessary proof 
        that the requirements under this paragraph have been met. 
           (e) In the case of property owned by a property owner who 
        is married, the assessor must not deny homestead treatment in 
        whole or in part if only one of the spouses occupies the 
        property and the other spouse is absent due to:  (1) marriage 
        dissolution proceedings, (2) legal separation, (3) employment or 
        self-employment in another location, (4) residence in a nursing 
        home or boarding care facility, or (5) other personal 
        circumstances causing the spouses to live separately, not 
        including an intent to obtain two homestead classifications for 
        property tax purposes.  To qualify under clause (3), the 
        spouse's place of employment or self-employment must be at least 
        50 miles distant from the other spouse's place of employment, 
        and the homesteads must be at least 50 miles distant from each 
        other.  Homestead treatment, in whole or in part, shall not be 
        denied to the spouse of an owner if he or she previously 
        occupied the residence with the owner and the absence of the 
        owner is due to one of the exceptions provided in this paragraph.
           (f) If an individual is purchasing property with the intent 
        of claiming it as a homestead and is required by the terms of 
        the financing agreement to have a relative shown on the deed as 
        a coowner, the assessor shall allow a full homestead 
        classification.  This provision only applies to first-time 
        purchasers, whether married or single, or to a person who had 
        previously been married and is purchasing as a single individual 
        for the first time.  The application for homestead benefits must 
        be on a form prescribed by the commissioner and must contain the 
        data necessary for the assessor to determine if full homestead 
        benefits are warranted. 
           Sec. 8.  Minnesota Statutes 1995 Supplement, section 
        273.124, subdivision 3, is amended to read: 
           Subd. 3.  [COOPERATIVES AND CHARITABLE CORPORATIONS; 
        HOMESTEAD AND OTHER PROPERTY.] (a) When one or more dwellings, 
        or one or more buildings which each contain several dwelling 
        units, are property is owned by a corporation or association 
        organized under chapter 308A, and each person who owns a share 
        or shares in the corporation or association is entitled to 
        occupy a dwelling building on the property, or dwelling a unit 
        in the within a building on the property, the corporation or 
        association may claim homestead treatment for each dwelling, or 
        for each unit in the case of a building containing several 
        dwelling units, for the dwelling or for the part of the value of 
        the building occupied by a shareholder.  Each dwelling building 
        or unit must be designated by legal description or number, and.  
        The net tax capacity of each dwelling building or unit that 
        qualifies for assessment as a homestead under this subdivision 
        must include not more than one-half acre of land, if platted, 
        nor more than 80 acres if unplatted.  The net tax capacity of 
        the building or buildings containing several dwelling 
        units property is the sum of the net tax capacities of each of 
        the respective buildings or units comprising the building 
        property, including the net tax capacity of each unit's or 
        building's proportionate share of the land and any common 
        buildings.  To qualify for the treatment provided by this 
        subdivision, the corporation or association must be wholly owned 
        by persons having a right to occupy a dwelling building or 
        dwelling unit owned by the corporation or association.  A 
        charitable corporation organized under the laws of Minnesota and 
        not otherwise exempt thereunder with no outstanding stock 
        qualifies for homestead treatment with respect to member 
        residents of the dwelling units who have purchased and hold 
        residential participation warrants entitling them to occupy the 
        units. 
           (b) To the extent provided in paragraph (a), a cooperative 
        or corporation organized under chapter 308A may obtain separate 
        assessment and valuation, and separate property tax statements 
        for each residential homestead, residential nonhomestead, or for 
        each seasonal residential recreational building or unit not used 
        for commercial purposes.  The appropriate class rates under 
        section 273.13 shall be applicable as if each building or unit 
        were a separate tax parcel; provided, however, that the tax 
        parcel which exists at the time the cooperative or corporation 
        makes application under this subdivision shall be a single 
        parcel for purposes of property taxes or the enforcement and 
        collection thereof, other than as provided in paragraph (a) or 
        (b). 
           (c) A member of a corporation or association may initially 
        obtain the separate assessment and valuation and separate 
        property tax statements, as provided in paragraph (b), by 
        applying to the assessor by June 30 of the assessment year. 
           (d) When a building, or dwelling units within a building, 
        no longer qualify under this subdivision paragraph (a) or (b), 
        the current owner must notify the assessor within 60 30 days.  
        Failure to notify the assessor within 60 30 days shall result in 
        the loss of benefits under this subdivision paragraph (a) or (b) 
        for taxes payable in the year that the failure is discovered.  
        For these purposes, "benefits under this subdivision paragraph 
        (a) or (b)" means the difference in the net tax capacity of 
        the building or units which no longer qualify as computed 
        under this subdivision paragraph (a) or (b) and as computed 
        under the otherwise applicable law, times the local tax rate 
        applicable to the building for that taxes payable year.  Upon 
        discovery of a failure to notify, the assessor shall inform the 
        auditor of the difference in net tax capacity for the building 
        or buildings in which units no longer qualify, and the auditor 
        shall calculate the benefits under this subdivision paragraph 
        (a) or (b).  Such amount, plus a penalty equal to 100 percent of 
        that amount, shall then be demanded of the building's owner.  
        The property owner may appeal the county's determination by 
        serving copies of a petition for review with county officials as 
        provided in section 278.01 and filing a proof of service as 
        provided in section 278.01 with the Minnesota tax court within 
        60 days of the date of the notice from the county.  The appeal 
        shall be governed by the tax court procedures provided in 
        chapter 271, for cases relating to the tax laws as defined in 
        section 271.01, subdivision 5; disregarding sections 273.125, 
        subdivision 5, and 278.03, but including section 278.05, 
        subdivision 2.  If the amount of the benefits under this 
        subdivision paragraph (a) or (b) and penalty are not paid within 
        60 days, and if no appeal has been filed, the county auditor 
        shall certify the amount of the benefit and penalty to the 
        succeeding year's tax list to be collected as part of the 
        property taxes on the affected buildings property. 
           Sec. 9.  Minnesota Statutes 1995 Supplement, section 
        273.124, subdivision 13, is amended to read: 
           Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
        the homestead requirements under subdivision 1 must file a 
        homestead application with the county assessor to initially 
        obtain homestead classification. 
           (b) On or before January 2, 1993, each county assessor 
        shall mail a homestead application to the owner of each parcel 
        of property within the county which was classified as homestead 
        for the 1992 assessment year.  The format and contents of a 
        uniform homestead application shall be prescribed by the 
        commissioner of revenue.  The commissioner shall consult with 
        the chairs of the house and senate tax committees on the 
        contents of the homestead application form.  The application 
        must clearly inform the taxpayer that this application must be 
        signed by all owners who occupy the property or by the 
        qualifying relative and returned to the county assessor in order 
        for the property to continue receiving homestead treatment.  The 
        envelope containing the homestead application shall clearly 
        identify its contents and alert the taxpayer of its necessary 
        immediate response. 
           (c) Every property owner applying for homestead 
        classification must furnish to the county assessor the social 
        security number of each occupant who is listed as an owner of 
        the property on the deed of record, the name and address of each 
        owner who does not occupy the property, and the name and social 
        security number of each owner's spouse who occupies the 
        property.  The application must be signed by each owner who 
        occupies the property and by each owner's spouse who occupies 
        the property, or, in the case of property that qualifies as a 
        homestead under subdivision 1, paragraph (c), by the qualifying 
        relative. 
           If a property owner occupies a homestead, the property 
        owner's spouse may not claim another property as a homestead 
        unless the property owner and the property owner's spouse file 
        with the assessor an affidavit or other proof required by the 
        assessor stating that the property qualifies as a homestead 
        under subdivision 1, paragraph (e). 
           Owners or spouses occupying residences owned by their 
        spouses and previously occupied with the other spouse, either of 
        whom fail to include the other spouse's name and social security 
        number on the homestead application or provide the affidavits or 
        other proof requested, will be deemed to have elected to receive 
        only partial homestead treatment of their residence.  The 
        remainder of the residence will be classified as nonhomestead 
        residential.  When an owner or spouse's name and social security 
        number appear on homestead applications for two separate 
        residences and only one application is signed, the owner or 
        spouse will be deemed to have elected to homestead the residence 
        for which the application was signed. 
           The social security numbers or affidavits or other proofs 
        of the property owners and spouses are private data on 
        individuals as defined by section 13.02, subdivision 12, but, 
        notwithstanding that section, the private data may be disclosed 
        to the commissioner of revenue, or, for purposes of proceeding 
        under the revenue recapture act to recover personal property 
        taxes owing, to the county treasurer. 
           (d) If residential real estate is occupied and used for 
        purposes of a homestead by a relative of the owner and qualifies 
        for a homestead under subdivision 1, paragraph (c), in order for 
        the property to receive homestead status, a homestead 
        application must be filed with the assessor.  The social 
        security number of each relative occupying the property and the 
        social security number of each owner who is related to an 
        occupant of the property shall be required on the homestead 
        application filed under this subdivision.  If a different 
        relative of the owner subsequently occupies the property, the 
        owner of the property must notify the assessor within 30 days of 
        the change in occupancy.  The social security number of a 
        relative occupying the property is private data on individuals 
        as defined by section 13.02, subdivision 12, but may be 
        disclosed to the commissioner of revenue.  
           (e) The homestead application shall also notify the 
        property owners that the application filed under this section 
        will not be mailed annually and that if the property is granted 
        homestead status for the 1993 assessment, or any assessment year 
        thereafter, that same property shall remain classified as 
        homestead until the property is sold or transferred to another 
        person, or the owners, the spouse of the owner, or the relatives 
        no longer use the property as their homestead.  Upon the sale or 
        transfer of the homestead property, a certificate of value must 
        be timely filed with the county auditor as provided under 
        section 272.115.  Failure to notify the assessor within 30 days 
        that the property has been sold, transferred, or that the owner, 
        the spouse of the owner, or the relative is no longer occupying 
        the property as a homestead, shall result in the penalty 
        provided under this subdivision and the property will lose its 
        current homestead status. 
           (f) If the homestead application is not returned within 30 
        days, the county will send a second application to the present 
        owners of record.  The notice of proposed property taxes 
        prepared under section 275.065, subdivision 3, shall reflect the 
        property's classification.  Beginning with assessment year 1993 
        for all properties, If a homestead application has not been 
        filed with the county by December 15, the assessor shall 
        classify the property as nonhomestead for the current assessment 
        year for taxes payable in the following year, provided that the 
        owner may be entitled to receive the homestead classification by 
        proper application under section 375.192. 
           (g) At the request of the commissioner, each county must 
        give the commissioner a list that includes the name and social 
        security number of each property owner and the property owner's 
        spouse occupying the property, or relative of a property owner, 
        applying for homestead classification under this subdivision.  
        The commissioner shall use the information provided on the lists 
        as appropriate under the law, including for the detection of 
        improper claims by owners, or relatives of owners, under chapter 
        290A.  
           (h) If, in comparing the lists supplied by the counties, 
        the commissioner finds that a property owner may be claiming a 
        fraudulent homestead, the commissioner shall notify the 
        appropriate counties.  Within 90 days of the notification, the 
        county assessor shall investigate to determine if the homestead 
        classification was properly claimed.  If the property owner does 
        not qualify, the county assessor shall notify the county auditor 
        who will determine the amount of homestead benefits that had 
        been improperly allowed.  For the purpose of this section, 
        "homestead benefits" means the tax reduction resulting from the 
        classification as a homestead under section 273.13, the taconite 
        homestead credit under section 273.135, and the supplemental 
        homestead credit under section 273.1391. 
           The county auditor shall send a notice to the person who 
        owned the owners of the affected property at the time the 
        homestead application related to the improper homestead was 
        filed, demanding reimbursement of the homestead benefits plus a 
        penalty equal to 100 percent of the homestead benefits.  
        The property owners person notified may appeal the county's 
        determination by filing a notice of appeal serving copies of a 
        petition for review with county officials as provided in section 
        278.01 and filing proof of service as provided in section 278.01 
        with the Minnesota tax court within 60 days of the date of the 
        notice from the county.  Procedurally, the appeal is governed by 
        the provisions in chapter 271 which apply to the appeal of a 
        property tax assessment or levy, but without requiring any 
        prepayment of the amount in controversy.  If the amount of 
        homestead benefits and penalty is not paid within 60 days, and 
        if no appeal has been filed, the county auditor shall certify 
        the amount of taxes and penalty to the succeeding year's tax 
        list to be collected as part of the property taxes.  In the case 
        of a manufactured home, the amount shall be certified to the 
        current year's tax list for collection county treasurer.  The 
        county treasurer will add interest to the unpaid homestead 
        benefits and penalty amounts at the rate provided for delinquent 
        personal property taxes for the period beginning 60 days after 
        demand for payment was made until payment.  If the person 
        notified is the current owner of the property, the treasurer may 
        add the total amount of benefits, penalty, interest, and costs 
        to the real estate taxes otherwise payable on the property in 
        the following year.  If the person notified is not the current 
        owner of the property, the treasurer may collect the amounts due 
        under the revenue recapture act in chapter 270A, or use any of 
        the powers granted in sections 277.20 and 277.21 without 
        exclusion, to enforce payment of the benefits, penalty, 
        interest, and costs, as if those amounts were delinquent tax 
        obligations of the person who owned the property at the time the 
        application related to the improperly allowed homestead was 
        filed.  The treasurer may relieve a prior owner of personal 
        liability for the benefits, penalty, interest, and costs, and 
        instead extend those amounts on the tax lists against the 
        property for taxes payable in the following year to the extent 
        that the current owner agrees in writing. 
           (i) Any amount of homestead benefits recovered by the 
        county from the property owner shall be distributed to the 
        county, city or town, and school district where the property is 
        located in the same proportion that each taxing district's levy 
        was to the total of the three taxing districts' levy for the 
        current year.  Any amount recovered attributable to taconite 
        homestead credit shall be transmitted to the St. Louis county 
        auditor to be deposited in the taconite property tax relief 
        account.  Any amount recovered that is attributable to 
        supplemental homestead credit is to be transmitted to the 
        commissioner of revenue for deposit in the general fund of the 
        state treasury.  The total amount of penalty collected must be 
        deposited in the county general fund. 
           (j) If a property owner has applied for more than one 
        homestead and the county assessors cannot determine which 
        property should be classified as homestead, the county assessors 
        will refer the information to the commissioner.  The 
        commissioner shall make the determination and notify the 
        counties within 60 days. 
           (k) In addition to lists of homestead properties, the 
        commissioner may ask the counties to furnish lists of all 
        properties and the record owners. 
           Sec. 10.  Minnesota Statutes 1994, section 273.13, 
        subdivision 22, is amended to read: 
           Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
        23, real estate which is residential and used for homestead 
        purposes is class 1.  The market value of class 1a property must 
        be determined based upon the value of the house, garage, and 
        land.  
           The first $72,000 of market value of class 1a property has 
        a net class rate of one percent of its market value and a gross 
        class rate of 2.17 percent of its market value.  For taxes 
        payable in 1992, the market value of class 1a property that 
        exceeds $72,000 but does not exceed $115,000 has a class rate of 
        two percent of its market value; and the market value of class 
        1a property that exceeds $115,000 has a class rate of 2.5 
        percent of its market value.  For taxes payable in 1993 and 
        thereafter, the market value of class 1a property that exceeds 
        $72,000 has a class rate of two percent. 
           (b) Class 1b property includes homestead real estate or 
        homestead manufactured homes used for the purposes of a 
        homestead by 
           (1) any blind person, or the blind person and the blind 
        person's spouse; or 
           (2) any person, hereinafter referred to as "veteran," who: 
           (i) served in the active military or naval service of the 
        United States; and 
           (ii) is entitled to compensation under the laws and 
        regulations of the United States for permanent and total 
        service-connected disability due to the loss, or loss of use, by 
        reason of amputation, ankylosis, progressive muscular 
        dystrophies, or paralysis, of both lower extremities, such as to 
        preclude motion without the aid of braces, crutches, canes, or a 
        wheelchair; and 
           (iii) has acquired a special housing unit with special 
        fixtures or movable facilities made necessary by the nature of 
        the veteran's disability, or the surviving spouse of the 
        deceased veteran for as long as the surviving spouse retains the 
        special housing unit as a homestead; or 
           (3) any person who: 
           (i) is permanently and totally disabled and 
           (ii) receives 90 percent or more of total income from 
           (A) aid from any state as a result of that disability; or 
           (B) supplemental security income for the disabled; or 
           (C) workers' compensation based on a finding of total and 
        permanent disability; or 
           (D) social security disability, including the amount of a 
        disability insurance benefit which is converted to an old age 
        insurance benefit and any subsequent cost of living increases; 
        or 
           (E) aid under the federal Railroad Retirement Act of 1937, 
        United States Code Annotated, title 45, section 228b(a)5; or 
           (F) a pension from any local government retirement fund 
        located in the state of Minnesota as a result of that 
        disability; or 
           (G) pension, annuity, or other income paid as a result of 
        that disability from a private pension or disability plan, 
        including employer, employee, union, and insurance plans and 
           (iii) has household income as defined in section 290A.03, 
        subdivision 5, of $50,000 or less; or 
           (4) any person who is permanently and totally disabled and 
        whose household income as defined in section 290A.03, 
        subdivision 5, is 150 percent or less of the federal poverty 
        level. 
           Property is classified and assessed under clause (4) only 
        if the government agency or income-providing source certifies, 
        upon the request of the homestead occupant, that the homestead 
        occupant satisfies the disability requirements of this paragraph.
           Property is classified and assessed pursuant to clause (1) 
        only if the commissioner of economic security certifies to the 
        assessor that the homestead occupant satisfies the requirements 
        of this paragraph.  
           Permanently and totally disabled for the purpose of this 
        subdivision means a condition which is permanent in nature and 
        totally incapacitates the person from working at an occupation 
        which brings the person an income.  The first $32,000 market 
        value of class 1b property has a net class rate of .45 percent 
        of its market value and a gross class rate of .87 percent of its 
        market value.  The remaining market value of class 1b property 
        has a gross or net class rate using the rates for class 1 or 
        class 2a property, whichever is appropriate, of similar market 
        value.  
           (c) Class 1c property is commercial use real property that 
        abuts a lakeshore line and is devoted to temporary and seasonal 
        residential occupancy for recreational purposes but not devoted 
        to commercial purposes for more than 250 days in the year 
        preceding the year of assessment, and that includes a portion 
        used as a homestead by the owner, which includes a dwelling 
        occupied as a homestead by a shareholder of a corporation that 
        owns the resort or a partner in a partnership that owns the 
        resort, even if the title to the homestead is held by the 
        corporation or partnership.  For purposes of this clause, 
        property is devoted to a commercial purpose on a specific day if 
        any portion of the property, excluding the portion used 
        exclusively as a homestead, is used for residential occupancy 
        and a fee is charged for residential occupancy.  Class 1c 
        property has a class rate of one percent of total market value 
        for taxes payable in 1993 and thereafter with the following 
        limitation:  the area of the property must not exceed 100 feet 
        of lakeshore footage for each cabin or campsite located on the 
        property up to a total of 800 feet and 500 feet in depth, 
        measured away from the lakeshore.  
           Sec. 11.  Minnesota Statutes 1994, section 273.13, 
        subdivision 23, is amended to read: 
           Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
        land including any improvements that is homesteaded.  The market 
        value of the house and garage and immediately surrounding one 
        acre of land has the same class rates as class 1a property under 
        subdivision 22.  The value of the remaining land including 
        improvements up to $115,000 has a net class rate of .45 percent 
        of market value and a gross class rate of 1.75 percent of market 
        value.  The remaining value of class 2a property over $115,000 
        of market value that does not exceed 320 acres has a net class 
        rate of one percent of market value, and a gross class rate of 
        2.25 percent of market value.  The remaining property over the 
        $115,000 market value in excess of 320 acres has a class rate of 
        1.5 percent of market value, and a gross class rate of 2.25 
        percent of market value.  
           (b) Class 2b property is (1) real estate, rural in 
        character and used exclusively for growing trees for timber, 
        lumber, and wood and wood products; (2) real estate that is not 
        improved with a structure and is used exclusively for growing 
        trees for timber, lumber, and wood and wood products, if the 
        owner has participated or is participating in a cost-sharing 
        program for afforestation, reforestation, or timber stand 
        improvement on that particular property, administered or 
        coordinated by the commissioner of natural resources; (3) real 
        estate that is nonhomestead agricultural land; or (4) a landing 
        area or public access area of a privately owned public use 
        airport.  Class 2b property has a net class rate of 1.5 percent 
        of market value, and a gross class rate of 2.25 percent of 
        market value.  
           (c) Agricultural land as used in this section means 
        contiguous acreage of ten acres or more, primarily used during 
        the preceding year for agricultural purposes.  Agricultural use 
        may include pasture, timber, waste, unusable wild land, and land 
        included in state or federal farm or conservation programs.  
        "Agricultural purposes" as used in this section means the 
        raising or cultivation of agricultural products.  Land enrolled 
        in the Reinvest in Minnesota program under sections 103F.505 to 
        103F.531 or the federal Conservation Reserve Program as 
        contained in Public Law Number 99-198, and consisting of a 
        minimum of ten contiguous acres, shall be classified as 
        agricultural.  Agricultural classification for property shall be 
        determined with respect to the use of the whole parcel, and not 
        based upon the market value of any residential structures on the 
        parcel or contiguous parcels under the same ownership. 
           (d) Real estate of less than ten acres used principally for 
        raising or cultivating agricultural products, shall be 
        considered as agricultural land, if it is not used primarily for 
        residential purposes.  
           (e) The term "agricultural products" as used in this 
        subdivision includes:  
           (1) livestock, dairy animals, dairy products, poultry and 
        poultry products, fur-bearing animals, horticultural and nursery 
        stock described in sections 18.44 to 18.61, fruit of all kinds, 
        vegetables, forage, grains, bees, and apiary products by the 
        owner; 
           (2) fish bred for sale and consumption if the fish breeding 
        occurs on land zoned for agricultural use; 
           (3) the commercial boarding of horses if the boarding is 
        done in conjunction with raising or cultivating agricultural 
        products as defined in clause (1); 
           (4) property which is owned and operated by nonprofit 
        organizations used for equestrian activities, excluding racing; 
        and 
           (5) game birds and waterfowl bred and raised for use on a 
        shooting preserve licensed under section 97A.115.  
           (f) If a parcel used for agricultural purposes is also used 
        for commercial or industrial purposes, including but not limited 
        to:  
           (1) wholesale and retail sales; 
           (2) processing of raw agricultural products or other goods; 
           (3) warehousing or storage of processed goods; and 
           (4) office facilities for the support of the activities 
        enumerated in clauses (1), (2), and (3), 
        the assessor shall classify the part of the parcel used for 
        agricultural purposes as class 1b, 2a, or 2b, whichever is 
        appropriate, and the remainder in the class appropriate to its 
        use.  The grading, sorting, and packaging of raw agricultural 
        products for first sale is considered an agricultural purpose.  
        A greenhouse or other building where horticultural or nursery 
        products are grown that is also used for the conduct of retail 
        sales must be classified as agricultural if it is primarily used 
        for the growing of horticultural or nursery products from seed, 
        cuttings, or roots and occasionally as a showroom for the retail 
        sale of those products.  Use of a greenhouse or building only 
        for the display of already grown horticultural or nursery 
        products does not qualify as an agricultural purpose.  
           The assessor shall determine and list separately on the 
        records the market value of the homestead dwelling and the one 
        acre of land on which that dwelling is located.  If any farm 
        buildings or structures are located on this homesteaded acre of 
        land, their market value shall not be included in this separate 
        determination.  
           (g) To qualify for classification under paragraph (b), 
        clause (4), a privately owned public use airport must be 
        licensed as a public airport under section 360.018.  For 
        purposes of paragraph (b), clause (4), "landing area" means that 
        part of a privately owned public use airport properly cleared, 
        regularly maintained, and made available to the public for use 
        by aircraft and includes runways, taxiways, aprons, and sites 
        upon which are situated landing or navigational aids.  A landing 
        area also includes land underlying both the primary surface and 
        the approach surfaces that comply with all of the following:  
           (i) the land is properly cleared and regularly maintained 
        for the primary purposes of the landing, taking off, and taxiing 
        of aircraft; but that portion of the land that contains 
        facilities for servicing, repair, or maintenance of aircraft is 
        not included as a landing area; 
           (ii) the land is part of the airport property; and 
           (iii) the land is not used for commercial or residential 
        purposes. 
        The land contained in a landing area under paragraph (b), clause 
        (4), must be described and certified by the commissioner of 
        transportation.  The certification is effective until it is 
        modified, or until the airport or landing area no longer meets 
        the requirements of paragraph (b), clause (4).  For purposes of 
        paragraph (b), clause (4), "public access area" means property 
        used as an aircraft parking ramp, apron, or storage hangar, or 
        an arrival and departure building in connection with the airport.
           Sec. 12.  Minnesota Statutes 1995 Supplement, section 
        273.13, subdivision 25, is amended to read: 
           Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
        estate containing four or more units and used or held for use by 
        the owner or by the tenants or lessees of the owner as a 
        residence for rental periods of 30 days or more.  Class 4a also 
        includes hospitals licensed under sections 144.50 to 144.56, 
        other than hospitals exempt under section 272.02, and contiguous 
        property used for hospital purposes, without regard to whether 
        the property has been platted or subdivided.  Class 4a property 
        in a city with a population of 5,000 or less, that is (1) 
        located outside of the metropolitan area, as defined in section 
        473.121, subdivision 2, or outside any county contiguous to the 
        metropolitan area, and (2) whose city boundary is at least 15 
        miles from the boundary of any city with a population greater 
        than 5,000 has a class rate of 2.3 percent of market value for 
        taxes payable in 1996 and thereafter.  All other class 4a 
        property has a class rate of 3.4 percent of market value for 
        taxes payable in 1996 and thereafter.  For purposes of this 
        paragraph, population has the same meaning given in section 
        477A.011, subdivision 3. 
           (b) Class 4b includes: 
           (1) residential real estate containing less than four 
        units, other than seasonal residential, and recreational; 
           (2) manufactured homes not classified under any other 
        provision; 
           (3) a dwelling, garage, and surrounding one acre of 
        property on a nonhomestead farm classified under subdivision 23, 
        paragraph (b).  
           Class 4b property has a class rate of 2.8 percent of market 
        value for taxes payable in 1992, 2.5 percent of market value for 
        taxes payable in 1993, and 2.3 percent of market value for taxes 
        payable in 1994 and thereafter. 
           (c) Class 4c property includes: 
           (1) a structure that is:  
           (i) situated on real property that is used for housing for 
        the elderly or for low- and moderate-income families as defined 
        in Title II, as amended through December 31, 1990, of the 
        National Housing Act or the Minnesota housing finance agency law 
        of 1971, as amended, or rules promulgated by the agency and 
        financed by a direct federal loan or federally insured loan made 
        pursuant to Title II of the Act; or 
           (ii) situated on real property that is used for housing the 
        elderly or for low- and moderate-income families as defined by 
        the Minnesota housing finance agency law of 1971, as amended, or 
        rules adopted by the agency pursuant thereto and financed by a 
        loan made by the Minnesota housing finance agency pursuant to 
        the provisions of the act.  
           This clause applies only to property of a nonprofit or 
        limited dividend entity.  Property is classified as class 4c 
        under this clause for 15 years from the date of the completion 
        of the original construction or substantial rehabilitation, or 
        for the original term of the loan.  
           (2) a structure that is: 
           (i) situated upon real property that is used for housing 
        lower income families or elderly or handicapped persons, as 
        defined in section 8 of the United States Housing Act of 1937, 
        as amended; and 
           (ii) owned by an entity which has entered into a housing 
        assistance payments contract under section 8 which provides 
        assistance for 100 percent of the dwelling units in the 
        structure, other than dwelling units intended for management or 
        maintenance personnel.  Property is classified as class 4c under 
        this clause for the term of the housing assistance payments 
        contract, including all renewals, or for the term of its 
        permanent financing, whichever is shorter; and 
           (3) a qualified low-income building as defined in section 
        42(c)(2) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1990, that (i) receives a low-income 
        housing credit under section 42 of the Internal Revenue Code of 
        1986, as amended through December 31, 1990; or (ii) meets the 
        requirements of that section and receives public financing, 
        except financing provided under sections 469.174 to 469.179, 
        which contains terms restricting the rents; or (iii) meets the 
        requirements of section 273.1317.  Classification pursuant to 
        this clause is limited to a term of 15 years.  The public 
        financing received must be from at least one of the following 
        sources:  government issued bonds exempt from taxes under 
        section 103 of the Internal Revenue Code of 1986, as amended 
        through December 31, 1993, the proceeds of which are used for 
        the acquisition or rehabilitation of the building; programs 
        under section 221(d)(3), 202, or 236, of Title II of the 
        National Housing Act; rental housing program funds under Section 
        8 of the United States Housing Act of 1937 or the market rate 
        family graduated payment mortgage program funds administered by 
        the Minnesota housing finance agency that are used for the 
        acquisition or rehabilitation of the building; public financing 
        provided by a local government used for the acquisition or 
        rehabilitation of the building, including grants or loans from 
        federal community development block grants, HOME block grants, 
        or residential rental bonds issued under chapter 474A; or other 
        rental housing program funds provided by the Minnesota housing 
        finance agency for the acquisition or rehabilitation of the 
        building. 
           For all properties described in clauses (1), (2), and (3) 
        and in paragraph (d), the market value determined by the 
        assessor must be based on the normal approach to value using 
        normal unrestricted rents unless the owner of the property 
        elects to have the property assessed under Laws 1991, chapter 
        291, article 1, section 55.  If the owner of the property elects 
        to have the market value determined on the basis of the actual 
        restricted rents, as provided in Laws 1991, chapter 291, article 
        1, section 55, the property will be assessed at the rate 
        provided for class 4a or class 4b property, as appropriate.  
        Properties described in clauses (1)(ii), (3), and (4) may apply 
        to the assessor for valuation under Laws 1991, chapter 291, 
        article 1, section 55.  The land on which these structures are 
        situated has the class rate given in paragraph (b) if the 
        structure contains fewer than four units, and the class rate 
        given in paragraph (a) if the structure contains four or more 
        units.  This clause applies only to the property of a nonprofit 
        or limited dividend entity.  
           (4) a parcel of land, not to exceed one acre, and its 
        improvements or a parcel of unimproved land, not to exceed one 
        acre, if it is owned by a neighborhood real estate trust and at 
        least 60 percent of the dwelling units, if any, on all land 
        owned by the trust are leased to or occupied by lower income 
        families or individuals.  This clause does not apply to any 
        portion of the land or improvements used for nonresidential 
        purposes.  For purposes of this clause, a lower income family is 
        a family with an income that does not exceed 65 percent of the 
        median family income for the area, and a lower income individual 
        is an individual whose income does not exceed 65 percent of the 
        median individual income for the area, as determined by the 
        United States Secretary of Housing and Urban Development.  For 
        purposes of this clause, "neighborhood real estate trust" means 
        an entity which is certified by the governing body of the 
        municipality in which it is located to have the following 
        characteristics: 
           (a) it is a nonprofit corporation organized under chapter 
        317A; 
           (b) it has as its principal purpose providing housing for 
        lower income families in a specific geographic community 
        designated in its articles or bylaws; 
           (c) it limits membership with voting rights to residents of 
        the designated community; and 
           (d) it has a board of directors consisting of at least 
        seven directors, 60 percent of whom are members with voting 
        rights and, to the extent feasible, 25 percent of whom are 
        elected by resident members of buildings owned by the trust; and 
           (5) except as provided in subdivision 22, paragraph (c), 
        real property devoted to temporary and seasonal residential 
        occupancy for recreation purposes, including real property 
        devoted to temporary and seasonal residential occupancy for 
        recreation purposes and not devoted to commercial purposes for 
        more than 250 days in the year preceding the year of 
        assessment.  For purposes of this clause, property is devoted to 
        a commercial purpose on a specific day if any portion of the 
        property is used for residential occupancy, and a fee is charged 
        for residential occupancy.  Class 4c also includes commercial 
        use real property used exclusively for recreational purposes in 
        conjunction with class 4c property devoted to temporary and 
        seasonal residential occupancy for recreational purposes, up to 
        a total of two acres, provided the property is not devoted to 
        commercial recreational use for more than 250 days in the year 
        preceding the year of assessment and is located within two miles 
        of the class 4c property with which it is used.  Class 4c 
        property classified in this clause also includes the remainder 
        of class 1c resorts.  Owners of real property devoted to 
        temporary and seasonal residential occupancy for recreation 
        purposes and all or a portion of which was devoted to commercial 
        purposes for not more than 250 days in the year preceding the 
        year of assessment desiring classification as class 1c or 4c, 
        must submit a declaration to the assessor designating the cabins 
        or units occupied for 250 days or less in the year preceding the 
        year of assessment by January 15 of the assessment year.  Those 
        cabins or units and a proportionate share of the land on which 
        they are located will be designated class 1c or 4c as otherwise 
        provided.  The remainder of the cabins or units and a 
        proportionate share of the land on which they are located will 
        be designated as class 3a.  The first $100,000 of the market 
        value of the remainder of the cabins or units and a 
        proportionate share of the land on which they are located shall 
        have a class rate of three percent.  The owner of property 
        desiring designation as class 1c or 4c property must provide 
        guest registers or other records demonstrating that the units 
        for which class 1c or 4c designation is sought were not occupied 
        for more than 250 days in the year preceding the assessment if 
        so requested.  The portion of a property operated as a (1) 
        restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
        facility operated on a commercial basis not directly related to 
        temporary and seasonal residential occupancy for recreation 
        purposes shall not qualify for class 1c or 4c; 
           (6) real property up to a maximum of one acre of land owned 
        by a nonprofit community service oriented organization; provided 
        that the property is not used for a revenue-producing activity 
        for more than six days in the calendar year preceding the year 
        of assessment and the property is not used for residential 
        purposes on either a temporary or permanent basis.  For purposes 
        of this clause, a "nonprofit community service oriented 
        organization" means any corporation, society, association, 
        foundation, or institution organized and operated exclusively 
        for charitable, religious, fraternal, civic, or educational 
        purposes, and which is exempt from federal income taxation 
        pursuant to section 501(c)(3), (10), or (19) of the Internal 
        Revenue Code of 1986, as amended through December 31, 1990.  For 
        purposes of this clause, "revenue-producing activities" shall 
        include but not be limited to property or that portion of the 
        property that is used as an on-sale intoxicating liquor or 3.2 
        percent malt liquor establishment licensed under chapter 340A, a 
        restaurant open to the public, bowling alley, a retail store, 
        gambling conducted by organizations licensed under chapter 349, 
        an insurance business, or office or other space leased or rented 
        to a lessee who conducts a for-profit enterprise on the 
        premises.  Any portion of the property which is used for 
        revenue-producing activities for more than six days in the 
        calendar year preceding the year of assessment shall be assessed 
        as class 3a.  The use of the property for social events open 
        exclusively to members and their guests for periods of less than 
        24 hours, when an admission is not charged nor any revenues are 
        received by the organization shall not be considered a 
        revenue-producing activity; 
           (7) post-secondary student housing of not more than one 
        acre of land that is owned by a nonprofit corporation organized 
        under chapter 317A and is used exclusively by a student 
        cooperative, sorority, or fraternity for on-campus housing or 
        housing located within two miles of the border of a college 
        campus; and 
           (8) manufactured home parks as defined in section 327.14, 
        subdivision 3. 
           Class 4c property has a class rate of 2.3 percent of market 
        value, except that (i) for each parcel of seasonal residential 
        recreational property not used for commercial purposes under 
        clause (5) the first $72,000 of market value on each parcel has 
        a class rate of 1.9 1.75 percent for taxes payable in 1997 and 
        1.8 1.5 percent for taxes payable in 1998 and thereafter, and 
        the market value of each parcel that exceeds $72,000 has a class 
        rate of 2.5 percent, and (ii) manufactured home parks assessed 
        under clause (8) have a class rate of two percent for taxes 
        payable in 1996, and thereafter.  
           (d) Class 4d property includes: 
           (1) a structure that is: 
           (i) situated on real property that is used for housing for 
        the elderly or for low and moderate income families as defined 
        by the Farmers Home Administration; 
           (ii) located in a municipality of less than 10,000 
        population; and 
           (iii) financed by a direct loan or insured loan from the 
        Farmers Home Administration.  Property is classified under this 
        clause for 15 years from the date of the completion of the 
        original construction or for the original term of the loan.  
           The class rates in paragraph (c), clauses (1), (2), and (3) 
        and this clause apply to the properties described in them, only 
        in proportion to occupancy of the structure by elderly or 
        handicapped persons or low and moderate income families as 
        defined in the applicable laws unless construction of the 
        structure had been commenced prior to January 1, 1984; or the 
        project had been approved by the governing body of the 
        municipality in which it is located prior to June 30, 1983; or 
        financing of the project had been approved by a federal or state 
        agency prior to June 30, 1983.  For those properties, 4c or 4d 
        classification is available only for those units meeting the 
        requirements of section 273.1318. 
           Classification under this clause is only available to 
        property of a nonprofit or limited dividend entity. 
           In the case of a structure financed or refinanced under any 
        federal or state mortgage insurance or direct loan program 
        exclusively for housing for the elderly or for housing for the 
        handicapped, a unit shall be considered occupied so long as it 
        is actually occupied by an elderly or handicapped person or, if 
        vacant, is held for rental to an elderly or handicapped person. 
           (2) For taxes payable in 1992, 1993, and 1994, only, 
        buildings and appurtenances, together with the land upon which 
        they are located, leased by the occupant under the community 
        lending model lease-purchase mortgage loan program administered 
        by the Federal National Mortgage Association, provided the 
        occupant's income is no greater than 60 percent of the county or 
        area median income, adjusted for family size and the building 
        consists of existing single family or duplex housing.  The lease 
        agreement must provide for a portion of the lease payment to be 
        escrowed as a nonrefundable down payment on the housing.  To 
        qualify under this clause, the taxpayer must apply to the county 
        assessor by May 30 of each year.  The application must be 
        accompanied by an affidavit or other proof required by the 
        assessor to determine qualification under this clause. 
           (3) Qualifying buildings and appurtenances, together with 
        the land upon which they are located, leased for a period of up 
        to five years by the occupant under a lease-purchase program 
        administered by the Minnesota housing finance agency or a 
        housing and redevelopment authority authorized under sections 
        469.001 to 469.047, provided the occupant's income is no greater 
        than 80 percent of the county or area median income, adjusted 
        for family size, and the building consists of two or less 
        dwelling units.  The lease agreement must provide for a portion 
        of the lease payment to be escrowed as a nonrefundable down 
        payment on the housing.  The administering agency shall verify 
        the occupants income eligibility and certify to the county 
        assessor that the occupant meets the income criteria under this 
        paragraph.  To qualify under this clause, the taxpayer must 
        apply to the county assessor by May 30 of each year.  For 
        purposes of this section, "qualifying buildings and 
        appurtenances" shall be defined as one or two unit residential 
        buildings which are unoccupied and have been abandoned and 
        boarded for at least six months. 
           Class 4d property has a class rate of two percent of market 
        value except that property classified under clause (3), shall 
        have the same class rate as class 1a property. 
           (e) Residential rental property that would otherwise be 
        assessed as class 4 property under paragraph (a); paragraph (b), 
        clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
        (4), is assessed at the class rate applicable to it under 
        Minnesota Statutes 1988, section 273.13, if it is found to be a 
        substandard building under section 273.1316.  Residential rental 
        property that would otherwise be assessed as class 4 property 
        under paragraph (d) is assessed at 2.3 percent of market value 
        if it is found to be a substandard building under section 
        273.1316. 
           (f) Class 4e property consists of the residential portion 
        of any structure located within a city that was converted from 
        nonresidential use to residential use, provided that: 
           (1) the structure had formerly been used as a warehouse; 
           (2) the structure was originally constructed prior to 1940; 
           (3) the conversion was done after December 31, 1995, but 
        before January 1, 2003; and 
           (4) the conversion involved an investment of at least 
        $25,000 per residential unit. 
           Class 4e property has a class rate of 2.3 percent, provided 
        that a structure is eligible for class 4e classification only in 
        the 12 assessment years immediately following the conversion. 
           Sec. 13.  Minnesota Statutes 1995 Supplement, section 
        273.1398, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
        terms defined in this subdivision have the meanings given them. 
           (b) "Unique taxing jurisdiction" means the geographic area 
        subject to the same set of local tax rates. 
           (c) "Net tax capacity" means the product of (i) the 
        appropriate net class rates for the year in which the aid is 
        payable, except that for aid payable in 1996 the class rate 
        applicable to all class 4a shall be 3.4 percent; and (ii) 
        estimated market values for the assessment two years prior to 
        that in which aid is payable.  "Total net tax capacity" means 
        the net tax capacities for all property within the unique taxing 
        jurisdiction.  The total net tax capacity used shall be reduced 
        by the sum of (1) the unique taxing jurisdiction's net tax 
        capacity of commercial industrial property as defined in section 
        473F.02, subdivision 3, multiplied by the ratio determined 
        pursuant to section 473F.08, subdivision 6, for the 
        municipality, as defined in section 473F.02, subdivision 8, in 
        which the unique taxing jurisdiction is located, (2) the net tax 
        capacity of the captured value of tax increment financing 
        districts as defined in section 469.177, subdivision 2, and (3) 
        the net tax capacity of transmission lines deducted from a local 
        government's total net tax capacity under section 273.425.  For 
        purposes of determining the net tax capacity of property 
        referred to in clauses (1), (2), and (3), the net tax capacity 
        shall be multiplied by the ratio of the highest class rate for 
        class 3a property for taxes payable in the year in which the aid 
        is payable to the highest class rate for class 3a property in 
        the prior year.  Net tax capacity cannot be less than zero. 
           (d) "Previous net tax capacity" means the product of the 
        appropriate net class rates for the year previous to the year in 
        which the aid is payable, and estimated market values for the 
        assessment two years prior to that in which aid is payable.  
        "Total previous net tax capacity" means the previous net tax 
        capacities for all property within the unique taxing 
        jurisdiction.  The total previous net tax capacity shall be 
        reduced by the sum of (1) the unique taxing jurisdiction's 
        previous net tax capacity of commercial-industrial property as 
        defined in section 473F.02, subdivision 3, multiplied by the 
        ratio determined pursuant to section 473F.08, subdivision 6, for 
        the municipality, as defined in section 473F.02, subdivision 8, 
        in which the unique taxing jurisdiction is located, (2) the 
        previous net tax capacity of the captured value of tax increment 
        financing districts as defined in section 469.177, subdivision 
        2, and (3) the previous net tax capacity of transmission lines 
        deducted from a local government's total net tax capacity under 
        section 273.425.  Previous net tax capacity cannot be less than 
        zero. 
           (e) (d) "Equalized market values" are market values that 
        have been equalized by dividing the assessor's estimated market 
        value for the second year prior to that in which the aid is 
        payable by the assessment sales ratios determined by class in 
        the assessment sales ratio study conducted by the department of 
        revenue pursuant to section 124.2131 in the second year prior to 
        that in which the aid is payable.  The equalized market values 
        shall equal the unequalized market values divided by the 
        assessment sales ratio. 
           (f) (e) "Equalized school levies" means the amounts levied 
        for: 
           (1) general education under section 124A.23, subdivision 2; 
           (2) supplemental revenue under section 124A.22, subdivision 
        8a; 
           (3) capital expenditure facilities revenue under section 
        124.243, subdivision 3 transition revenue under section 124A.22, 
        subdivision 13c; 
           (4) capital expenditure equipment revenue under section 
        124.244, subdivision 2; 
           (5) basic transportation under section 124.226, subdivision 
        1; and 
           (6) (5) referendum revenue under section 124A.03. 
           (g) (f) "Current local tax rate" means the quotient derived 
        by dividing the taxes levied within a unique taxing jurisdiction 
        for taxes payable in the year prior to that for which aids are 
        being calculated by the total previous net tax capacity of the 
        unique taxing jurisdiction.  
           (h) (g) For purposes of calculating and allocating 
        homestead and agricultural credit aid authorized pursuant to 
        subdivision 2 and the disparity reduction aid authorized in 
        subdivision 3, "gross taxes levied on all properties," "gross 
        taxes," or "taxes levied" means the total net tax capacity based 
        taxes levied on all properties except that levied on the 
        captured value of tax increment districts as defined in section 
        469.177, subdivision 2, and that levied on the portion of 
        commercial industrial properties' assessed value or gross tax 
        capacity, as defined in section 473F.02, subdivision 3, subject 
        to the areawide tax as provided in section 473F.08, subdivision 
        6, in a unique taxing jurisdiction.  "Gross taxes" are before 
        any reduction for disparity reduction aid but "taxes levied" are 
        after any reduction for disparity reduction aid.  Gross taxes 
        levied or taxes levied cannot be less than zero.  
           "Taxes levied" excludes equalized school levies. 
           (i) "Human services aids" means: 
           (1) aid to families with dependent children under sections 
        256.82, subdivision 1, and 256.935, subdivision 1; 
           (2) medical assistance under sections 256B.041, subdivision 
        5, and 256B.19, subdivision 1; 
           (3) general assistance medical care under section 256D.03, 
        subdivision 6; 
           (4) general assistance under section 256D.03, subdivision 
        2; 
           (5) work readiness under section 256D.03, subdivision 2; 
           (6) emergency assistance under section 256.871, subdivision 
        6; 
           (7) Minnesota supplemental aid under section 256D.36, 
        subdivision 1; 
           (8) preadmission screening and alternative care grants; 
           (9) work readiness services under section 256D.051; 
           (10) case management services under section 256.736, 
        subdivision 13; 
           (11) general assistance claims processing, medical 
        transportation and related costs; and 
           (12) medical assistance, medical transportation and related 
        costs. 
           (j) (h) "Household adjustment factor" means the number of 
        households for the second most recent year preceding that in 
        which the aids are payable divided by the number of households 
        for the third most recent year.  The household adjustment factor 
        cannot be less than one.  
           (k) (i) "Growth adjustment factor" means the household 
        adjustment factor in the case of counties.  In the case of 
        cities, towns, school districts, and special taxing districts, 
        the growth adjustment factor equals one.  The growth adjustment 
        factor cannot be less than one.  
           (l) For aid payable in 1992 and subsequent years, (j) 
        "Homestead and agricultural credit base" means the previous 
        year's certified homestead and agricultural credit aid 
        determined under subdivision 2 less any permanent aid reduction 
        in the previous year to homestead and agricultural credit aid 
        under section 477A.0132, plus, for aid payable in 1992, fiscal 
        disparity homestead and agricultural credit aid under 
        subdivision 2b.  
           (m) (k) "Net tax capacity adjustment" means (1) the total 
        previous net tax capacity minus the total net tax capacity tax 
        base differential defined in subdivision 1a, multiplied by (2) 
        the unique taxing jurisdiction's current local tax rate.  The 
        net tax capacity adjustment cannot be less than zero. 
           (n) (l) "Fiscal disparity adjustment" means the difference 
        between (1) a taxing jurisdiction's fiscal disparity 
        distribution levy under section 473F.08, subdivision 3, clause 
        (a), for taxes payable in the year prior to that for which aids 
        are being calculated, and (2) the same distribution levy 
        multiplied by the ratio of the tax base differential percent 
        referenced in subdivision 1a for the highest class rate for 
        class 3 property for taxes payable in the year prior to that for 
        which aids are being calculated to the highest class rate for 
        class 3 property for taxes payable in the second prior year to 
        that for which aids are being calculated.  In the case of school 
        districts, the fiscal disparity distribution levy shall exclude 
        that part of the levy attributable to equalized school levies. 
           Sec. 14.  Minnesota Statutes 1994, section 273.1398, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
        1997, the tax base differential is 0.25 percent of the 
        assessment year 1995 taxable market value of class 4c 
        noncommercial seasonal recreational residential property up to 
        $72,000.  
           (b) For aids payable in 1998, the tax base differential is 
        0.25 percent of the assessment year 1996 taxable market value of 
        class 4c noncommercial seasonal recreational residential 
        property up to $72,000. 
           Sec. 15.  Minnesota Statutes 1994, section 273.1398, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DISPARITY REDUCTION CREDIT.] (a) Beginning with 
        taxes payable in 1989, class 4a, class 3a, and class 3b property 
        qualifies for a disparity reduction credit if:  (1) the property 
        is located in a border city that has an enterprise zone 
        designated pursuant to section 469.168, subdivision 4; (2) the 
        property is located in a city with a population greater than 
        2,500 and less than 35,000 according to the 1980 decennial 
        census; (3) the city is adjacent to a city in another state or 
        immediately adjacent to a city adjacent to a city in another 
        state; and (4) the adjacent city in the other state has a 
        population of greater than 5,000 and less than 75,000.  
           (b) The credit is an amount sufficient to reduce (i) the 
        taxes levied on class 4a property to three 2.3 percent of the 
        property's market value and (ii) the tax on class 3a and class 
        3b property to 3.3 percent of market value.  
           (c) The county auditor shall annually certify the costs of 
        the credits to the department of revenue.  The department shall 
        reimburse local governments for the property taxes foregone as 
        the result of the credits in proportion to their total levies. 
           Sec. 16.  Minnesota Statutes 1995 Supplement, section 
        275.065, subdivision 3, is amended to read: 
           Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
        county auditor shall prepare and the county treasurer shall 
        deliver after November 10 and on or before November 24 each 
        year, by first class mail to each taxpayer at the address listed 
        on the county's current year's assessment roll, a notice of 
        proposed property taxes and, in the case of a town, final 
        property taxes.  
           (b) The commissioner of revenue shall prescribe the form of 
        the notice. 
           (c) The notice must inform taxpayers that it contains the 
        amount of property taxes each taxing authority other than a town 
        proposes to collect for taxes payable the following year and, 
        for a town, the amount of its final levy.  It must clearly state 
        that each taxing authority, including regional library districts 
        established under section 134.201, and including the 
        metropolitan taxing districts as defined in paragraph (i), but 
        excluding all other special taxing districts and towns, will 
        hold a public meeting to receive public testimony on the 
        proposed budget and proposed or final property tax levy, or, in 
        case of a school district, on the current budget and proposed 
        property tax levy.  It must clearly state the time and place of 
        each taxing authority's meeting and an address where comments 
        will be received by mail.  
           (d) The notice must state for each parcel: 
           (1) the market value of the property as determined under 
        section 273.11, and used for computing property taxes payable in 
        the following year and for taxes payable in the current year; 
        and, in the case of residential property, whether the property 
        is classified as homestead or nonhomestead.  The notice must 
        clearly inform taxpayers of the years to which the market values 
        apply and that the values are final values; 
           (2) by county, city or town, school district excess 
        referenda levy, remaining school district levy, regional library 
        district, if in existence, the total of the metropolitan special 
        taxing districts as defined in paragraph (i) and the sum of the 
        remaining special taxing districts, and as a total of the taxing 
        authorities, including all special taxing districts, the 
        proposed or, for a town, final net tax on the property for taxes 
        payable the following year and the actual tax for taxes payable 
        the current year.  If a school district has certified under 
        section 124A.03, subdivision 2, that a referendum will be held 
        in the school district at the November general election, the 
        county auditor must note next to the school district's proposed 
        amount that a referendum is pending and that, if approved by the 
        voters, the tax amount may be higher than shown on the notice.  
        For the purposes of this subdivision, "school district excess 
        referenda levy" means school district taxes for operating 
        purposes approved at referendums, including those taxes based on 
        net tax capacity as well as those based on market value.  
        "School district excess referenda levy" does not include school 
        district taxes for capital expenditures approved at referendums 
        or school district taxes to pay for the debt service on bonds 
        approved at referenda.  In the case of the city of Minneapolis, 
        the levy for the Minneapolis library board and the levy for 
        Minneapolis park and recreation shall be listed separately from 
        the remaining amount of the city's levy.  In the case of a 
        parcel where tax increment or the fiscal disparities areawide 
        tax applies, the proposed tax levy on the captured value or the 
        proposed tax levy on the tax capacity subject to the areawide 
        tax must each be stated separately and not included in the sum 
        of the special taxing districts; and 
           (3) the increase or decrease in the amounts in clause (2) 
        from taxes payable in the current year to proposed or, for a 
        town, final taxes payable the following year, expressed as a 
        dollar amount and as a percentage. 
           (e) The notice must clearly state that the proposed or 
        final taxes do not include the following: 
           (1) special assessments; 
           (2) levies approved by the voters after the date the 
        proposed taxes are certified, including bond referenda, school 
        district levy referenda, and levy limit increase referenda; 
           (3) amounts necessary to pay cleanup or other costs due to 
        a natural disaster occurring after the date the proposed taxes 
        are certified; 
           (4) amounts necessary to pay tort judgments against the 
        taxing authority that become final after the date the proposed 
        taxes are certified; and 
           (5) the contamination tax imposed on properties which 
        received market value reductions for contamination. 
           (f) Except as provided in subdivision 7, failure of the 
        county auditor to prepare or the county treasurer to deliver the 
        notice as required in this section does not invalidate the 
        proposed or final tax levy or the taxes payable pursuant to the 
        tax levy. 
           (g) If the notice the taxpayer receives under this section 
        lists the property as nonhomestead and the homeowner provides 
        satisfactory documentation to the county assessor that the 
        property is owned and has been used as the owner's homestead 
        prior to June 1 of that year, the assessor shall reclassify the 
        property to homestead for taxes payable in the following year. 
           (h) In the case of class 4 residential property used as a 
        residence for lease or rental periods of 30 days or more, the 
        taxpayer must either: 
           (1) mail or deliver a copy of the notice of proposed 
        property taxes to each tenant, renter, or lessee; or 
           (2) post a copy of the notice in a conspicuous place on the 
        premises of the property.  
           The notice must be mailed or posted by the taxpayer by 
        November 27 or within three days of receipt of the notice, 
        whichever is later.  A taxpayer may notify the county treasurer 
        of the address of the taxpayer, agent, caretaker, or manager of 
        the premises to which the notice must be mailed in order to 
        fulfill the requirements of this paragraph. 
           (i) For purposes of this subdivision, subdivisions 5a and 
        6, "metropolitan special taxing districts" means the following 
        taxing districts in the seven-county metropolitan area that levy 
        a property tax for any of the specified purposes listed below: 
           (1) metropolitan council under section 473.132, 473.167, 
        473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
           (2) metropolitan airports commission under section 473.667, 
        473.671, or 473.672; and 
           (3) metropolitan mosquito control commission under section 
        473.711. 
           For purposes of this section, any levies made by the 
        regional rail authorities in the county of Anoka, Carver, 
        Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
        398A shall be included with the appropriate county's levy and 
        shall be discussed at that county's public hearing. 
           Sec. 17.  Minnesota Statutes 1994, section 275.065, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
        population of more than 1,000 2,500, county, a metropolitan 
        special taxing district as defined in subdivision 3, paragraph 
        (i), a regional library district established under section 
        134.201, or school district shall advertise in a newspaper a 
        notice of its intent to adopt a budget and property tax levy or, 
        in the case of a school district, to review its current budget 
        and proposed property taxes payable in the following year, at a 
        public hearing.  The notice must be published not less than two 
        business days nor more than six business days before the hearing.
           The advertisement must be at least one-eighth page in size 
        of a standard-size or a tabloid-size newspaper.  The 
        advertisement must not be placed in the part of the newspaper 
        where legal notices and classified advertisements appear.  The 
        advertisement must be published in an official newspaper of 
        general circulation in the taxing authority.  The newspaper 
        selected must be one of general interest and readership in the 
        community, and not one of limited subject matter.  The 
        advertisement must appear in a newspaper that is published at 
        least once per week.  
           For purposes of this section, the metropolitan special 
        taxing district's advertisement must only be published in the 
        Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
           (b) The advertisement must be in the following form, except 
        that the notice for a school district may include references to 
        the current budget in regard to proposed property taxes. 
                                   "NOTICE OF
                            PROPOSED PROPERTY TAXES
                   (City/County/School District/Metropolitan
                        Special Taxing District/Regional
                         Library District) of .........
        The governing body of ........ will soon hold budget hearings 
        and vote on the property taxes for (city/county/metropolitan 
        special taxing district/regional library district services that 
        will be provided in 199_/school district services that will be 
        provided in 199_ and 199_). 
                           NOTICE OF PUBLIC HEARING:
        All concerned citizens are invited to attend a public hearing 
        and express their opinions on the proposed (city/county/school 
        district/metropolitan special taxing district/regional library 
        district) budget and property taxes, or in the case of a school 
        district, its current budget and proposed property taxes, 
        payable in the following year.  The hearing will be held on 
        (Month/Day/Year) at (Time) at (Location, Address)." 
           (c) A city with a population of 1,000 or less over 500 but 
        not more than 2,500 must advertise by posted notice as defined 
        in section 645.12, subdivision 1.  The advertisement must be 
        posted at the time provided in paragraph (a).  It must be in the 
        form required in paragraph (b). 
           (d) For purposes of this subdivision, the population of a 
        city is the most recent population as determined by the state 
        demographer under section 4A.02. 
           (e) The commissioner of revenue, subject to the approval of 
        the chairs of the house and senate tax committees, shall 
        prescribe the form and format of the advertisement. 
           (f) For calendar year 1993, each taxing authority required 
        to publish an advertisement must include on the advertisement a 
        statement that information on the increases or decreases of the 
        total budget, including employee and independent contractor 
        compensation in the prior year, current year, and proposed 
        budget year will be discussed at the hearing. 
           (g) Notwithstanding paragraph (f), for 1993, the 
        commissioner of revenue shall prescribe the form, format, and 
        content of an advertisement comparing current and proposed 
        expense budgets for the metropolitan council, the metropolitan 
        airports commission, and the metropolitan mosquito control 
        commission.  The expense budget must include occupancy, 
        personnel, contractual and capital improvement expenses.  The 
        form, format, and content of the advertisement must be approved 
        by the chairs of the house and senate tax committees prior to 
        publication. 
           Sec. 18.  Minnesota Statutes 1995 Supplement, section 
        275.065, subdivision 6, is amended to read: 
           Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
        Between November 29 and December 20, the governing bodies of the 
        a city that has a population over 500, county, metropolitan 
        special taxing districts as defined in subdivision 3, paragraph 
        (i), and regional library districts shall each hold a public 
        hearing to discuss and seek public comment on its final budget 
        and property tax levy for taxes payable in the following year, 
        and the governing body of the school district shall hold a 
        public hearing to review its current budget and proposed 
        property tax levy for taxes payable in the following year.  The 
        metropolitan special taxing districts shall be required to hold 
        only a single joint public hearing, the location of which will 
        be determined by the affected metropolitan agencies. 
           At a subsequent hearing, each county, school district, 
        city, and metropolitan special taxing district may amend its 
        proposed property tax levy and must adopt a final property tax 
        levy.  Each county, city, and metropolitan special taxing 
        district may also amend its proposed budget and must adopt a 
        final budget at the subsequent hearing.  A school district is 
        not required to adopt its final budget at the subsequent 
        hearing.  The subsequent hearing of a taxing authority must be 
        held on a date subsequent to the date of the taxing authority's 
        initial public hearing, or subsequent to the date of its 
        continuation hearing if a continuation hearing is held.  The 
        subsequent hearing may be held at a regularly scheduled board or 
        council meeting or at a special meeting scheduled for the 
        purposes of the subsequent hearing.  The subsequent hearing of a 
        taxing authority does not have to be coordinated by the county 
        auditor to prevent a conflict with an initial hearing, a 
        continuation hearing, or a subsequent hearing of any other 
        taxing authority.  All subsequent hearings must be held prior to 
        five working days after December 20 of the levy year. 
           The time and place of the subsequent hearing must be 
        announced at the initial public hearing or at the continuation 
        hearing. 
           The property tax levy certified under section 275.07 by a 
        city, county, metropolitan special taxing district, regional 
        library district, or school district must not exceed the 
        proposed levy determined under subdivision 1, except by an 
        amount up to the sum of the following amounts: 
           (1) the amount of a school district levy whose voters 
        approved a referendum to increase taxes under section 124.82, 
        subdivision 3, 124A.03, subdivision 2, 124B.03, subdivision 2, 
        or 136C.411, after the proposed levy was certified; 
           (2) the amount of a city or county levy approved by the 
        voters after the proposed levy was certified; 
           (3) the amount of a levy to pay principal and interest on 
        bonds issued or approved by the voters under section 475.58 
        after the proposed levy was certified; 
           (4) the amount of a levy to pay costs due to a natural 
        disaster occurring after the proposed levy was certified, if 
        that amount is approved by the commissioner of revenue under 
        subdivision 6a; 
           (5) the amount of a levy to pay tort judgments against a 
        taxing authority that become final after the proposed levy was 
        certified, if the amount is approved by the commissioner of 
        revenue under subdivision 6a; 
           (6) the amount of an increase in levy limits certified to 
        the taxing authority by the commissioner of children, families, 
        and learning after the proposed levy was certified; and 
           (7) the amount required under section 124.755. 
           At the hearing under this subdivision, the percentage 
        increase in property taxes proposed by the taxing authority, if 
        any, and the specific purposes for which property tax revenues 
        are being increased must be discussed.  
           During the discussion, the governing body shall hear 
        comments regarding a proposed increase and explain the reasons 
        for the proposed increase.  The public shall be allowed to speak 
        and to ask questions.  At the subsequent hearing held as 
        provided in this subdivision, the governing body, other than the 
        governing body of a school district, shall adopt its final 
        property tax levy prior to adopting its final budget. 
           If the hearing is not completed on its scheduled date, the 
        taxing authority must announce, prior to adjournment of the 
        hearing, the date, time, and place for the continuation of the 
        hearing.  The continued hearing must be held at least five 
        business days but no more than 14 business days after the 
        original hearing. 
           The hearing must be held after 5:00 p.m. if scheduled on a 
        day other than Saturday.  No hearing may be held on a Sunday.  
        The governing body of a county shall hold a hearing on the 
        second Tuesday in December each year, and may hold additional 
        hearings on other dates before December 20 if necessary for the 
        convenience of county residents.  If the county needs a 
        continuation of its hearing, the continued hearing shall be held 
        on the third Tuesday in December.  If the third Tuesday in 
        December falls on December 21, the county's continuation hearing 
        shall be held on Monday, December 20.  The county auditor shall 
        provide for the coordination of hearing dates for all cities and 
        school districts within the county. 
           The metropolitan special taxing districts shall hold a 
        joint public hearing on the first Monday of December.  A 
        continuation hearing, if necessary, shall be held on the second 
        Monday of December. 
           By August 10, each school board and the board of the 
        regional library district shall certify to the county auditors 
        of the counties in which the school district or regional library 
        district is located the dates on which it elects to hold its 
        hearings and any continuations.  If a school board or regional 
        library district does not certify the dates by August 10, the 
        auditor will assign the hearing date.  The dates elected or 
        assigned must not conflict with the hearing dates of the county 
        or the metropolitan special taxing districts.  By August 20, the 
        county auditor shall notify the clerks of the cities within the 
        county of the dates on which school districts and regional 
        library districts have elected to hold their hearings.  At the 
        time a city certifies its proposed levy under subdivision 1 it 
        shall certify the dates on which it elects to hold its hearings 
        and any continuations.  For its initial hearing and for the 
        subsequent hearing at which the final property tax levy will be 
        adopted, the city must not select dates that conflict with the 
        county hearing dates, metropolitan special taxing district 
        dates, or with those elected by or assigned to the school 
        districts or regional library district in which the city is 
        located.  For continuation hearings, the city may select dates 
        that conflict with other taxing authorities' dates if the city 
        deems it necessary. 
           The county hearing dates and the city, metropolitan special 
        taxing district, regional library district, and school district 
        hearing dates must be designated on the notices required under 
        subdivision 3.  The continuation dates need not be stated on the 
        notices.  
           This subdivision does not apply to towns and special taxing 
        districts other than regional library districts and metropolitan 
        special taxing districts. 
           Notwithstanding the requirements of this section, the 
        employer is required to meet and negotiate over employee 
        compensation as provided for in chapter 179A.  
           Sec. 19.  Minnesota Statutes 1994, section 275.07, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPORT TO COMMISSIONER.] On or before September 
        30 for taxes payable in 1994, and thereafter October 8 of each 
        year, the county auditor shall report to the commissioner of 
        revenue the proposed levy certified by local units of government 
        under section 275.065, subdivision 1.  On or before January 15, 
        for taxes levied in 1989 and thereafter of each year, the county 
        auditor shall report to the commissioner of revenue the final 
        levy certified by local units of government under subdivision 
        1.  The levies must be reported in the manner prescribed by the 
        commissioner.  The reports must show a total levy and the amount 
        of each special levy. 
           Sec. 20.  Minnesota Statutes 1995 Supplement, section 
        275.08, subdivision 1b, is amended to read: 
           Subd. 1b.  [COMPUTATION OF TAX RATES.] The amounts 
        certified to be levied against net tax capacity under section 
        275.07 by an individual local government unit, except for any 
        amounts certified under sections 124A.03, subdivision 2a, and 
        275.61, shall be divided by the total net tax capacity of all 
        taxable properties within the local government unit's taxing 
        jurisdiction.  The resulting ratio, the local government's local 
        tax rate, multiplied by each property's net tax capacity shall 
        be each property's net tax capacity tax for that local 
        government unit before reduction by any credits.  
           Any amount certified to the county auditor under section 
        124A.03, subdivision 2a, or 275.61, after the dates given in 
        those sections, to be levied against market value shall be 
        divided by the total estimated referendum market value of all 
        taxable properties within the taxing district.  The resulting 
        ratio, the taxing district's new referendum tax rate, multiplied 
        by each property's estimated referendum market value shall be 
        each property's new referendum tax before reduction by any 
        credits.  For the purposes of this subdivision, "referendum 
        market value" means the market value as defined in section 
        124A.02, subdivision 3b. 
           Sec. 21.  Minnesota Statutes 1994, section 275.61, is 
        amended to read: 
           275.61 [REFERENDUM LEVY; MARKET VALUE.] 
           For local governmental subdivisions other than school 
        districts, any levy, including the issuance of debt obligations 
        payable in whole or in part from property taxes, required to be 
        approved and approved by the voters at a general or special 
        election for taxes payable in 1993 and thereafter, shall be 
        levied against the referendum market value of all taxable 
        property within the governmental subdivision, as defined in 
        section 124A.02, subdivision 3b.  Any levy amount subject to the 
        requirements of this section shall be certified separately to 
        the county auditor under section 275.07. 
           The ballot shall state the maximum amount of the increased 
        levy as a percentage of market value and the amount that will be 
        raised by the new referendum tax rate in the first year it is to 
        be levied. 
           Sec. 22.  [276.017] [TIMELY PAYMENTS.] 
           Subdivision 1.  [DATE OF MAILING OR RECEIPT.] When a 
        payment described in this section is required to be made to a 
        county on or before the prescribed date, the payment is timely 
        if received by the county on or before a prescribed date, or if 
        mailed on or before that date.  This section applies to the 
        payment of current or delinquent real or personal property 
        taxes, any other amount shown as payable on a property tax 
        statement, and all related penalties, interest, or costs. 
           Subd. 2.  [MAILING REQUIREMENTS.] Mailing is timely under 
        this section only if the payment was deposited in the mail in 
        the United States on or before the due date, in an envelope or 
        other appropriate wrapper, postage prepaid, and properly 
        addressed. 
           Subd. 3.  [UNITED STATES POSTAL SERVICE POSTMARK.] The 
        postmark of the United States Postal Service qualifies as proof 
        of timely mailing for this section.  If the payment is sent by 
        United States registered mail, the date of registration is the 
        postmark date.  If the payment is sent by United States 
        certified mail, the date of the United States Postal Service 
        postmark on the receipt given to the person presenting the 
        payment for delivery is the date of mailing.  Mailing, or the 
        time of mailing, may also be established by other available 
        evidence except that the postmark of a private postage meter may 
        not be used as proof of a timely mailing made under this section.
           Subd. 4.  [RECEIPT OTHERWISE GOVERNS.] In any case in which 
        the payment is not treated as timely mailed under this section, 
        the date of receipt governs for purposes of determining the 
        amount of any penalty, interest, or cost assessment. 
           Sec. 23.  Minnesota Statutes 1995 Supplement, section 
        276.04, subdivision 2, is amended to read: 
           Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
        shall provide for the printing of the tax statements.  The 
        commissioner of revenue shall prescribe the form of the property 
        tax statement and its contents.  The statement must contain a 
        tabulated statement of the dollar amount due to each taxing 
        authority from the parcel of real property for which a 
        particular tax statement is prepared.  The dollar amounts due 
        the county, township or municipality, the total of the 
        metropolitan special taxing districts as defined in section 
        275.065, subdivision 3, paragraph (i), school district excess 
        referenda levy, remaining school district levy, and the total of 
        other voter approved referenda levies based on market value 
        under section 275.61 must be separately stated.  The amounts due 
        all other special taxing districts, if any, may be aggregated.  
        For the purposes of this subdivision, "school district excess 
        referenda levy" means school district taxes for operating 
        purposes approved at referenda, including those taxes based on 
        net tax capacity as well as those based on market value.  
        "School district excess referenda levy" does not include school 
        district taxes for capital expenditures approved at referendums 
        or school district taxes to pay for the debt service on bonds 
        approved at referenda.  The amount of the tax on contamination 
        value imposed under sections 270.91 to 270.98, if any, must also 
        be separately stated.  The dollar amounts, including the dollar 
        amount of any special assessments, may be rounded to the nearest 
        even whole dollar.  For purposes of this section whole 
        odd-numbered dollars may be adjusted to the next higher 
        even-numbered dollar.  The amount of market value excluded under 
        section 273.11, subdivision 16, if any, must also be listed on 
        the tax statement.  The statement shall include the following 
        sentence, printed in upper case letters in boldface print:  "THE 
        STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  
        THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING 
        CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
           (b) The property tax statements for manufactured homes and 
        sectional structures taxed as personal property shall contain 
        the same information that is required on the tax statements for 
        real property.  
           (c) Real and personal property tax statements must contain 
        the following information in the order given in this paragraph.  
        The information must contain the current year tax information in 
        the right column with the corresponding information for the 
        previous year in a column on the left: 
           (1) the property's estimated market value under section 
        273.11, subdivision 1; 
           (2) the property's taxable market value after reductions 
        under section 273.11, subdivisions 1a and 16; 
           (3) the property's gross tax, calculated by multiplying the 
        property's gross tax capacity times the total local tax rate and 
        adding to the result the sum of the aids enumerated in clause 
        (3); 
           (4) a total of the following aids: 
           (i) education aids payable under chapters 124 and 124A; 
           (ii) local government aids for cities, towns, and counties 
        under chapter 477A; and 
           (iii) disparity reduction aid under section 273.1398; 
           (5) for homestead residential and agricultural properties, 
        the homestead and agricultural credit aid apportioned to the 
        property.  This amount is obtained by multiplying the total 
        local tax rate by the difference between the property's gross 
        and net tax capacities under section 273.13.  This amount must 
        be separately stated and identified as "homestead and 
        agricultural credit."  For purposes of comparison with the 
        previous year's amount for the statement for taxes payable in 
        1990, the statement must show the homestead credit for taxes 
        payable in 1989 under section 273.13, and the agricultural 
        credit under section 273.132 for taxes payable in 1989; 
           (6) any credits received under sections 273.119; 273.123; 
        273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
        473H.10, except that the amount of credit received under section 
        273.135 must be separately stated and identified as "taconite 
        tax relief"; and 
           (7) the net tax payable in the manner required in paragraph 
        (a). 
           (d) If the county uses envelopes for mailing property tax 
        statements and if the county agrees, a taxing district may 
        include a notice with the property tax statement notifying 
        taxpayers when the taxing district will begin its budget 
        deliberations for the current year, and encouraging taxpayers to 
        attend the hearings.  If the county allows notices to be 
        included in the envelope containing the property tax statement, 
        and if more than one taxing district relative to a given 
        property decides to include a notice with the tax statement, the 
        county treasurer or auditor must coordinate the process and may 
        combine the information on a single announcement.  
           The commissioner of revenue shall certify to the county 
        auditor the actual or estimated aids enumerated in clauses (3) 
        and (4) that local governments will receive in the following 
        year.  In the case of a county containing a city of the first 
        class, for taxes levied in 1991, and for all counties for taxes 
        levied in 1992 and thereafter, the commissioner must certify 
        this amount by September 1.  
           Sec. 24.  Minnesota Statutes 1994, section 278.01, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [FILING OF APPEAL DEADLINE; 
        EXCEPTION.] Notwithstanding the March 31 date in subdivision 1, 
        whenever the exempt status, valuation, or classification of real 
        or personal property is changed other than by an abatement or a 
        court decision, and the owner responsible for payment of the tax 
        is not given notice of the change until after January 31 of the 
        year the tax is payable or after July 1 in the case of property 
        subject to section 273.125, subdivision 4, an eligible 
        petitioner, as defined and limited in subdivision 1, has 60 days 
        from the date of mailing of the notice to initiate an appeal of 
        the property's exempt status, classification, or valuation 
        change under this chapter. 
           Sec. 25.  Minnesota Statutes 1994, section 278.08, is 
        amended to read: 
           278.08 [INTEREST.] 
           Subdivision 1.  [INTEREST; PENALTY.] In the case of real or 
        personal property, the judgment must include the following 
        interest: 
           (1) if the tax is sustained in full, interest on the unpaid 
        part of the tax computed under section 279.03, subdivision 1, at 
        the rate provided in section 549.09; 
           (2) if the tax is increased, interest on the unpaid part of 
        the tax as originally assessed computed under section 279.03, 
        subdivision 1, at the rate provided in section 549.09; 
           (3) if the tax is reduced, interest on the difference 
        between the tax as recomputed and the amount previously paid 
        computed under section 279.03, subdivision 1, at the rate 
        provided in section 549.09.  
           If the tax is sustained or increased, penalty on the unpaid 
        part of the tax as originally assessed computed under section 
        279.01 must be included in the judgment.  
           Subd. 2.  [REFUND.] In the case of real or personal 
        property, if the petitioner has overpaid the tax determined or 
        stipulated to be due, the county auditor shall compute interest 
        on the overpayment from the date of the filing of the petition 
        for review or from the date of payment of the tax, whichever is 
        later, until the date of issuance of the refund warrant.  
        Interest shall be calculated on the overpayment under section 
        279.03, subdivision 1, at the rate provided in section 279.03 
        549.09 for delinquent property taxes originally due and payable 
        in the same year as the tax which was became or remained 
        overpaid.  For the purposes of computing interest due under this 
        subdivision, an overpayment occurs on the date when the 
        cumulative total of the payments made by the taxpayer for the 
        payable year exceed the final total tax amount determined for 
        that payable year.  In determining whether an overpayment has 
        occurred, taxpayer payments are allocated first to any penalty 
        imposed due to late payment of installments, then to the tax due.
           Sec. 26.  Minnesota Statutes 1994, section 279.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LIST AND NOTICE.] Within five days after 
        the filing of such list, the court administrator shall return a 
        copy thereof to the county auditor, with a notice prepared and 
        signed by the court administrator, and attached thereto, which 
        may be substantially in the following form: 
           State of Minnesota        )                            
                                     ) ss.                        
           County of ............... )                            
                                                    District Court
                                     .......... Judicial District.
           The state of Minnesota, to all persons, companies, or 
        corporations who have or claim any estate, right, title, or 
        interest in, claim to, or lien upon, any of the several parcels 
        of land described in the list hereto attached: 
           The list of taxes and penalties on real property for the 
        county of ............................... remaining delinquent 
        on the first Monday in January, 19....., has been filed in the 
        office of the court administrator of the district court of said 
        county, of which that hereto attached is a copy.  Therefore, 
        you, and each of you, are hereby required to file in the office 
        of said court administrator, on or before the 20th day after the 
        publication of this notice and list, your answer, in writing, 
        setting forth any objection or defense you may have to the 
        taxes, or any part thereof, upon any parcel of land described in 
        the list, in, to, or on which you have or claim any estate, 
        right, title, interest, claim, or lien, and, in default thereof, 
        judgment will be entered against such parcel of land for the 
        taxes on such list appearing against it, and for all penalties, 
        interest, and costs.  Based upon said judgment, the land shall 
        be sold to the state of Minnesota on the second Monday in May, 
        19...  The period of redemption for all lands sold to the state 
        at a tax judgment sale shall be three years from the date of 
        sale to the state of Minnesota if the land is within an 
        incorporated area unless it is: 
           (a) nonagricultural homesteaded land as defined in section 
        273.13, subdivision 22; 
           (b) homesteaded agricultural land as defined in section 
        273.13, subdivision 23, paragraph (a); or 
           (c) seasonal recreational land as defined in section 
        273.13, subdivisions 22, paragraph (c), and 25, paragraph (c), 
        clause (5), in which event the period of redemption is five 
        years from the date of sale to the state of Minnesota; 
           (d) abandoned property and pursuant to section 281.173 a 
        court order has been entered shortening the redemption period to 
        five weeks; or 
           (e) vacant property as described under section 281.174, 
        subdivision 2, and for which a court order is entered shortening 
        the redemption period under section 281.174. 
           The period of redemption for all other lands sold to the 
        state at a tax judgment sale shall be five years from the date 
        of sale.  
           Inquiries as to the proceedings set forth above can be made 
        to the county auditor of ..... county whose address is ..... .  
            (Signed) ............................................., 
            Court Administrator of the District Court of the County 
            of .................................................... 
            (Here insert list.) 
           The list referred to in the notice shall be substantially 
        in the following form: 
           List of real property for the county of 
        ......................., on which taxes remain delinquent on the 
        first Monday in January, 19...: 
                              Town of (Fairfield), 
                           Township (40), Range (20), 
         Names (and 
         Current Filed 
         Addresses) for 
         the Taxpayers 
         and Fee Owners 
         and in Addition 
         Those Parties 
         Who Have Filed 
         Their Addresses                            Tax 
         Pursuant to     Subdivision of            Parcel   Total Tax 
         section 276.041    Section       Section  Number  and Penalty
                                                             $ cts.
         John Jones  S.E. 1/4 of S.W. 1/4    10    23101       2.20  
         (825 Fremont  
         Fairfield, MN 
         55000) 
         Bruce Smith  That part of N.E. 1/4 
         (2059 Hand   of S.W. 1/4 desc. as 
         Fairfield,   follows:  Beg. at the 
         MN 55000)    S.E. corner of said 
         and          N.E. 1/4 of S.W. 1/4;  
         Fairfield    thence N. along the E.  
         State Bank   line of said N.E. 1/4 
         (100 Main    of S.W. 1/4 a distance 
         Street       of 600 ft.; thence W. 
         Fairfield,   parallel with the S. 
         MN 55000)    line of said N.E. 1/4 
                      of S.W. 1/4 a distance 
                      of 600 ft.; thence S. 
                      parallel with said E. 
                      line a distance of 600 
                      ft. to S. line of said 
                      N.E. 1/4 of S.W. 1/4;
                      thence E. along said S. 
                      line a distance of 600 
                      ft. to the point of 
                      beg. ...............    21    33211       3.15  
           As to platted property, the form of heading shall conform 
        to circumstances and be substantially in the following form:  
                              City of (Smithtown) 
                        Brown's Addition, or Subdivision 
         Names (and 
         Current Filed 
         Addresses) for 
         the Taxpayers 
         and Fee Owners 
         and in Addition 
         Those Parties 
         Who have Filed 
         Their Addresses                         Tax 
         Pursuant to                            Parcel      Total Tax 
         section 276.041     Lot     Block      Number     and Penalty
                                                             $ cts 
         John Jones           15         9      58243          2.20 
         (825 Fremont 
         Fairfield, 
         MN 55000) 
         Bruce Smith          16         9      58244          3.15 
         (2059 Hand 
         Fairfield, 
         MN 55000) 
         and 
         Fairfield 
         State Bank 
         (100 Main Street 
         Fairfield, 
         MN 55000) 
           The names, descriptions, and figures employed in 
        parentheses in the above forms are merely for purposes of 
        illustration. 
           The name of the town, township, range or city, and addition 
        or subdivision, as the case may be, shall be repeated at the 
        head of each column of the printed lists as brought forward from 
        the preceding column.  
           Errors in the list shall not be deemed to be a material 
        defect to affect the validity of the judgment and sale. 
           Sec. 27.  Minnesota Statutes 1994, section 279.37, is 
        amended by adding a subdivision to read: 
           Subd. 11.  This section shall not apply in cases where the 
        redemption period has been shortened under sections 281.173 and 
        281.174. 
           Sec. 28.  Minnesota Statutes 1994, section 281.17, is 
        amended to read: 
           281.17 [PERIOD FOR REDEMPTION.] 
           Except for properties for which the period of redemption 
        has been limited under sections 281.173 and 281.174, the 
        following periods for redemption apply. 
           The period of redemption for all lands sold to the state at 
        a tax judgment sale shall be three years from the date of sale 
        to the state of Minnesota if the land is within an incorporated 
        area unless it is:  (a) nonagricultural homesteaded land as 
        defined in section 273.13, subdivision 22; (b) homesteaded 
        agricultural land as defined in section 273.13, subdivision 23, 
        paragraph (a); or (c) seasonal recreational land as defined in 
        section 273.13, subdivision 22, paragraph (c), or 25, paragraph 
        (c), clause (5), for which the period of redemption is five 
        years from the date of sale to the state of Minnesota. 
           The period of redemption for homesteaded lands as defined 
        in section 273.13, subdivision 22, located in a targeted 
        neighborhood as defined in Laws 1987, chapter 386, article 6, 
        section 4, and sold to the state at a tax judgment sale is three 
        years from the date of sale.  The period of redemption for all 
        lands located in a targeted neighborhood as defined in Laws 
        1987, chapter 386, article 6, section 4, except (1) homesteaded 
        lands as defined in section 273.13, subdivision 22, and (2) for 
        periods of redemption beginning after June 30, 1991, but before 
        July 1, 1996, lands located in the Loring Park targeted 
        neighborhood on which a notice of lis pendens has been served, 
        and sold to the state at a tax judgment sale is one year from 
        the date of sale. 
           The period of redemption for all real property constituting 
        a mixed municipal solid waste disposal facility that is a 
        qualified facility under section 115B.39, subdivision 1, is one 
        year from the date of the sale to the state of Minnesota. 
           The period of redemption for all other lands sold to the 
        state at a tax judgment sale shall be five years from the date 
        of sale, except that the period of redemption for nonhomesteaded 
        agricultural land as defined in section 273.13, subdivision 23, 
        paragraph (b), shall be two years from the date of sale if at 
        that time that property is owned by a person who owns one or 
        more parcels of property on which taxes are delinquent, and the 
        delinquent taxes are more than 25 percent of the prior year's 
        school district levy. 
           Sec. 29.  [281.173] [FIVE-WEEK REDEMPTION PERIOD FOR 
        CERTAIN ABANDONED PROPERTIES.] 
           Subdivision 1.  [APPLICATION.] This section applies if at 
        any time after the tax sale as provided in section 280.01 has 
        occurred but before notice of expiration of time for redemption 
        has been given, a court order is entered reducing to five weeks 
        the redemption period during which the owner, the owner's 
        personal representatives and assigns, or any other person 
        holding an interest in the premises, may redeem the premises in 
        accordance with the provisions of this chapter. 
           Subd. 2.  [SUMMONS AND COMPLAINT.] Any city, housing and 
        redevelopment authority, port authority, or economic development 
        authority, in which the premises are located may commence an 
        action in district court to reduce the period otherwise allowed 
        for redemption under this chapter.  The action must be commenced 
        by the filing of a complaint, naming as defendants the record 
        fee owners or the owner's personal representative, or the 
        owner's heirs as determined by a court of competent 
        jurisdiction, contract for deed purchasers, mortgagees, assigns 
        of any of the above, the taxpayers as shown on the records of 
        the county auditor, the Internal Revenue Service of the United 
        States and the revenue department of the state of Minnesota if 
        tax liens against the owners or contract for deed purchasers 
        have been recorded or filed; and any other person the plaintiff 
        determines should be made a party.  The action shall be filed in 
        district court for the county in which the premises are 
        located.  The complaint must identify the premises by legal 
        description.  The complaint must allege (1) that the premises 
        are abandoned, (2) that the tax judgment sale pursuant to 
        section 280.01 has been made, and (3) notice of expiration of 
        the time for redemption has not been given. 
           The complaint must request an order reducing the redemption 
        period to five weeks.  When the complaint has been filed, the 
        court shall issue a summons commanding the person or persons 
        named in the complaint to appear before the court on a day and 
        at a place stated in the summons.  The appearance date shall be 
        not less than 15 nor more than 25 days from the date of the 
        issuing of the summons.  A copy of the filed complaint must be 
        attached to the summons. 
           Subd. 3.  [SERVICE OF SUMMONS AND COMPLAINT.] The summons 
        and complaint may be served by any person not named a party to 
        the action.  The summons and complaint must be served at least 
        seven days before the appearance date, in the manner provided 
        for service of a summons and complaint in a civil action in the 
        district court, and posted in a conspicuous place on the 
        premises.  If a defendant cannot be found in the state, then 
        upon an affidavit to that effect being filed with the court, the 
        summons and complaint may be served by sending a copy by 
        certified mail to the defendant's last known address, if any, at 
        least ten days before the appearance date.  Summons by certified 
        mail is complete upon mailing.  If personal or certified mail 
        service cannot be made on a defendant, then the plaintiff or 
        plaintiff's attorney may file an affidavit to that effect with 
        the court and service by posting the summons and complaint on 
        the premises is sufficient as to that defendant.  Service upon 
        the United States of America shall be made in accordance with 
        applicable federal law. 
           Subd. 4.  [HEARING; EVIDENCE; ORDER.] At the hearing on the 
        summons and complaint, the court shall enter an order reducing 
        the redemption period to five weeks from the date of the order, 
        if evidence is presented supporting the allegations in the 
        complaint and no appearance is made to oppose the relief 
        sought.  An affidavit by the sheriff or a deputy sheriff of the 
        county in which the premises are located, or of a building 
        inspector, zoning administrator, housing official, or other 
        municipal or county official having jurisdiction over the 
        premises, stating that the premises are not actually lawfully 
        occupied and further setting forth any of the following 
        supporting facts, is prima facie evidence of abandonment: 
           (1) windows or entrances to the premises are boarded up or 
        closed off, or multiple window panes are broken and unrepaired; 
           (2) doors to the premises are smashed through, broken off, 
        unhinged, or continuously unlocked; 
           (3) gas, electric, or water service to the premises has 
        been terminated; 
           (4) rubbish, trash, or debris has accumulated on the 
        premises; 
           (5) the police or sheriff's office has received at least 
        two reports of trespassers on the premises, or of vandalism or 
        other illegal acts being committed on the premises; or 
           (6) the premises are deteriorating and are either below or 
        are in imminent danger of falling below minimum community 
        standards for public safety and sanitation. 
           The court may consider an affidavit from any other person 
        having personal knowledge, which states facts supporting any 
        other allegations in the complaint.  Written statements of the 
        owner, the owner's personal representatives or assigns, 
        including documents of conveyance, which indicate a clear intent 
        to abandon the premises, are conclusive evidence of abandonment. 
        In the absence of affidavits or written statements, or if 
        rebuttal evidence is offered by the defendant or a party 
        lawfully claiming an interest through the defendant, the court 
        may consider any competent evidence, including oral testimony, 
        concerning any allegations in the complaint.  An order entered 
        under this section must contain specific findings of abandonment 
        and must contain a legal description of the premises. 
           Subd. 5.  [RECORDING AND SERVICE OF ORDER.] Within ten days 
        after the order is entered, a certified copy of the order must 
        be filed by the moving party with the office of the county 
        recorder or registrar of titles and with the auditor for the 
        county in which the premises are located.  Failure to file the 
        order within ten days shall not invalidate the proceedings. 
           Subd. 6.  [DUTY OF AUDITOR.] If the property is not 
        redeemed within five weeks of the date of entry of the order the 
        county auditor, without further notice, shall execute a 
        certificate as provided for in section 281.23, subdivision 9. 
           Subd. 7.  [HOMESTEAD STATUS.] This section applies 
        regardless of the subject property's homestead tax status at the 
        time of sale. 
           Subd. 8.  [EFFECTIVE DATE.] This section shall apply only 
        to tax judgment sales occurring on and after the effective date, 
        which shall be the day following final enactment. 
           Sec. 30.  [281.174] [FIVE-WEEK REDEMPTION PERIOD FOR 
        CERTAIN VACANT PROPERTIES.] 
           Subdivision 1.  [APPLICATION.] This section applies to 
        property located within a city if at any time after the tax sale 
        as provided in section 280.01 has occurred but before notice of 
        expiration of time for redemption has been given, a court order 
        is entered reducing to five weeks the redemption period on 
        property under subdivision 2 during which the owner, the owner's 
        personal representatives and assigns, or any other person 
        holding an interest in the property, may redeem that property in 
        accordance with the provisions of this chapter. 
           Subd. 2.  [VACANT PROPERTY SUBJECT TO FIVE-WEEK REDEMPTION 
        PERIOD.] Only property that meets all of the following criteria 
        is subject to the five-week redemption period as provided in 
        this section: 
           (1) the property is located in a targeted neighborhood 
        revitalization program under section 469.201; 
           (2) no structures are located on the land; 
           (3) the property is classified under section 273.13 as 
        residential; and 
           (4) a residential structure existed on the land within the 
        last five years. 
           Subd. 3.  [SUMMONS AND COMPLAINT.] Any city, housing and 
        redevelopment authority, port authority, or economic development 
        authority in which the property is located may commence an 
        action in district court to reduce the period otherwise allowed 
        for redemption under this chapter from the date of the requested 
        order.  The action must be commenced by the filing of a 
        complaint, naming as defendants the record fee owners or the 
        owner's personal representative, or the owner's heirs as 
        determined by a court of competent jurisdiction, contract for 
        deed purchasers, mortgagees, assigns of any of the above, the 
        taxpayers as shown on the records of the county auditor, the 
        Internal Revenue Service of the United States and the revenue 
        department of the state of Minnesota if tax liens against the 
        owners or contract for deed purchasers have been recorded or 
        filed, and any other person the plaintiff determines should be 
        made a party.  The action shall be filed in district court for 
        the county in which the property is located.  The complaint must 
        identify the property by legal description.  The complaint must 
        allege (1) that the property is vacant, (2) that the tax 
        judgment sale under section 280.01 has been made, and (3) notice 
        of expiration of the time for redemption has not been given. 
           The complaint must request an order reducing the redemption 
        period to five weeks.  When the complaint has been filed, the 
        court shall issue a summons commanding the person or persons 
        named in the complaint to appear before the court on a day and 
        at a place stated in the summons.  The appearance date shall be 
        not less than 15 nor more than 25 days from the date of the 
        issuing of the summons, except that, when the United States of 
        America is a party, the date shall be set in accordance with 
        applicable federal law.  A copy of the filed complaint must be 
        attached to the summons. 
           Subd. 4.  [SERVICE OF SUMMONS AND COMPLAINT.] The summons 
        and complaint may be served by any person not named a party to 
        the action.  The summons and complaint must be served at least 
        seven days before the appearance date, in the manner provided 
        for service of a summons and complaint in a civil action in the 
        district court, and posted in a conspicuous place on the 
        property.  If a defendant cannot be found in the state, then 
        upon an affidavit to that effect being filed with the court, the 
        summons and complaint may be served by sending a copy by 
        certified mail to the defendant's last known address, if any, at 
        least ten days before the appearance date.  Summons by certified 
        mail is complete upon mailing.  If personal or certified mail 
        service cannot be made on a defendant, then the plaintiff or 
        plaintiff's attorney may file an affidavit to that effect with 
        the court and service by posting the summons and complaint on 
        the premises is sufficient as to that defendant.  
           Subd. 5.  [HEARING; EVIDENCE; ORDER.] At the hearing on the 
        summons and complaint, the court shall enter an order reducing 
        the redemption period to five weeks from the date of the order, 
        if evidence is presented supporting the allegations in the 
        complaint and no appearance is made to oppose the relief 
        sought.  An affidavit from any person having personal knowledge 
        about the property may be filed stating facts supporting any 
        allegations in the complaint.  In the absence of affidavits or 
        written statements, or if rebuttal evidence is offered by the 
        defendant or a party lawfully claiming an interest through the 
        defendant, the court may consider any competent evidence, 
        including oral testimony, concerning any allegations in the 
        complaint.  An order entered under this section must contain a 
        legal description of the property. 
           Subd. 6.  [RECORDING AND SERVICE OF ORDER.] Within ten days 
        after the order is entered, a certified copy of the order must 
        be filed by the moving party with the office of the county 
        recorder or registrar of titles and with the auditor for the 
        county in which the property is located.  Failure to file the 
        order within ten days shall not invalidate the proceedings. 
           Subd. 7.  [DUTY OF AUDITOR.] If the property is not 
        redeemed within five weeks of the date of entry of the order the 
        county auditor, without further notice, shall execute a 
        certificate as provided for in section 281.23, subdivision 9. 
           Subd. 8.  [EFFECTIVE DATE.] This section shall apply only 
        to tax judgment sales occurring on and after the effective date 
        which shall be the day following final enactment. 
           Sec. 31.  Minnesota Statutes 1994, section 287.06, is 
        amended to read: 
           287.06 [EXEMPTION FROM OTHER TAXES.] 
           All mortgages upon which such tax has been paid, with the 
        debts or obligations secured thereby and the papers evidencing 
        the same, shall be exempt from all other taxes; but nothing 
        herein shall exempt such property from the operation of the laws 
        relating to the taxation of gifts and inheritances, or those 
        governing the taxation of banks, savings banks, or trust 
        companies; provided, that Sections 287.01 to 287.12 shall not 
        apply to mortgages taken in good faith by persons or 
        corporations whose personal property is expressly exempted from 
        taxation by law section 272.02, subdivision 1, clauses (1) to 
        (7), or is taxed upon the basis of gross earnings or other 
        methods of computation in lieu of all other taxes mortgagees 
        that are fraternal benefit societies subject to section 64B.24. 
           Sec. 32.  [287.37] [INVESTIGATIONS AND ASSESSMENTS.] 
           The commissioner of revenue may investigate and examine 
        persons and transactions that are subject to this chapter using 
        the powers and authorities granted in chapters 270 and 289A.  
        The commissioner may issue orders of assessment under chapter 
        289A, and enforce collection of unpaid tax or penalty amounts, 
        including interest, under the authority of chapter 270.  All tax 
        amounts collected by the commissioner must be apportioned under 
        section 287.12.  The commissioner's expenses under this section 
        are not expenses of administration under section 287.33.  All 
        data and information made available to the commissioner under 
        this section is public except for investigative data covered by 
        section 270B.03, subdivision 6. 
           Sec. 33.  Minnesota Statutes 1995 Supplement, section 
        290A.04, subdivision 2h, is amended to read: 
           Subd. 2h.  (a) If the gross property taxes payable on a 
        homestead increase more than 12 percent over the net property 
        taxes payable in the prior year on the same property that is 
        owned and occupied by the same owner on January 2 of both years, 
        and the amount of that increase is $100 or more for taxes 
        payable in 1995 and 1996 and 1997, a claimant who is a homeowner 
        shall be allowed an additional refund equal to 60 percent of the 
        amount of the increase over the greater of 12 percent of the 
        prior year's net property taxes payable or $100 for taxes 
        payable in 1995 and 1996 and 1997.  This subdivision shall not 
        apply to any increase in the gross property taxes payable 
        attributable to improvements made to the homestead after the 
        assessment date for the prior year's taxes.  This subdivision 
        shall not apply to any increase in the gross property taxes 
        payable attributable to the termination of valuation exclusions 
        under section 273.11, subdivision 16. 
           The maximum refund allowed under this subdivision is $1,000.
           (b) For purposes of this subdivision, the following terms 
        have the meanings given: 
           (1) "Net property taxes payable" means property taxes 
        payable minus refund amounts for which the claimant qualifies 
        pursuant to subdivision 2 and this subdivision.  
           (2) "Gross property taxes" means net property taxes payable 
        determined without regard to the refund allowed under this 
        subdivision. 
           (c) In addition to the other proofs required by this 
        chapter, each claimant under this subdivision shall file with 
        the property tax refund return a copy of the property tax 
        statement for taxes payable in the preceding year or other 
        documents required by the commissioner. 
           (d) On or before December 1, 1995, the commissioner shall 
        estimate the cost of making the payments provided by this 
        subdivision for taxes payable in 1996.  Notwithstanding the open 
        appropriation provision of section 290A.23, if the estimated 
        total refund claims for taxes payable in 1996 exceed $5,500,000, 
        the commissioner shall first reduce the 60 percent refund rate 
        enough, but to no lower a rate than 50 percent, so that the 
        estimated total refund claims do not exceed $5,500,000.  If the 
        commissioner estimates that total claims will exceed $5,500,000 
        at a 50 percent refund rate, the commissioner shall also reduce 
        the $1,000 maximum refund amount by enough so that total 
        estimated refund claims do not exceed $5,500,000. 
           The determinations of the revised thresholds by the 
        commissioner are not rules subject to chapter 14.  
           (e) Upon request, the appropriate county official shall 
        make available the names and addresses of the property taxpayers 
        who may be eligible for the additional property tax refund under 
        this section.  The information shall be provided on a magnetic 
        computer disk.  The county may recover its costs by charging the 
        person requesting the information the reasonable cost for 
        preparing the data.  The information may not be used for any 
        purpose other than for notifying the homeowner of potential 
        eligibility and assisting the homeowner, without charge, in 
        preparing a refund claim. 
           Sec. 34.  Minnesota Statutes 1994, section 290A.25, is 
        amended to read: 
           290A.25 [VERIFICATION OF SOCIAL SECURITY NUMBERS.] 
           Annually, the commissioner of revenue shall furnish a list 
        to the county assessor containing the names and social security 
        numbers of persons who have applied for both homestead 
        classification under section 273.13 and a property tax refund as 
        a renter under this chapter.  
           Within 90 days of the notification, the county assessor 
        shall investigate to determine if the homestead classification 
        was improperly claimed.  If the property owner does not qualify, 
        the county assessor shall notify the county auditor who will 
        determine the amount of homestead benefits that has been 
        improperly allowed.  For the purpose of this section, "homestead 
        benefits" means the tax reduction resulting from the 
        classification as a homestead under section 273.13, and the 
        taconite homestead credit under section 273.1391 has the meaning 
        given in section 273.124, subdivision 13, paragraph (h).  The 
        county auditor shall send a notice to persons who owned the 
        owners of affected property at the time the homestead 
        application related to the property improper homestead was 
        filed, demanding reimbursement of the homestead benefits plus a 
        penalty equal to 100 percent of the homestead benefits.  
        The property owners person notified may appeal the county's 
        determination by filing a notice of appeal with the Minnesota 
        tax court within 60 days of the date of the notice from the 
        county as provided in section 273.124, subdivision 13, paragraph 
        (h). 
           If the amount of homestead benefits and penalty is not paid 
        within 60 days, and if no appeal has been filed, the county 
        auditor shall certify the amount of taxes and penalty to the 
        succeeding year's tax list to be collected as part of the 
        property taxes county treasurer.  The county treasurer will add 
        interest to the unpaid homestead benefits and penalty amounts at 
        the rate provided for delinquent personal property taxes for the 
        period beginning 60 days after demand for payment was made until 
        payment.  If the person notified is the current owner of the 
        property, the treasurer may add the total amount of benefits, 
        penalty, interest, and costs to the real estate taxes otherwise 
        payable on the property in the following year.  If the person 
        notified is not the current owner of the property, the treasurer 
        may collect the amounts due under the revenue recapture act in 
        chapter 270A, or use any of the powers granted in sections 
        277.20 and 277.21 without exclusion, to enforce payment of the 
        benefits, penalty, interest, and costs, as if those amounts were 
        delinquent tax obligations of the person who owned the property 
        at the time the application related to the improperly allowed 
        homestead was filed.  The treasurer may relieve a prior owner of 
        personal liability for the benefits, penalty, interest, and 
        costs, and instead extend those amounts on the tax lists against 
        the property for taxes payable in the following year to the 
        extent that the current owner agrees in writing. 
           Any amount of homestead benefits recovered by the county 
        from the property owner shall be distributed to the county, city 
        or town, and school district where the property is located in 
        the same proportion that each taxing district's levy was to the 
        total of the three taxing districts' levy for the current year.  
        Any amount recovered attributable to taconite homestead credit 
        shall be transmitted to the St. Louis county auditor to be 
        deposited in the taconite property tax relief account.  Any 
        amount recovered that is attributable to supplemental homestead 
        credit is to be transmitted to the commissioner of revenue for 
        deposit in the general fund of the state treasury.  The total 
        amount of penalty collected must be deposited in the county 
        general fund. 
           Sec. 35.  [290A.27] [ROUNDING.] 
           In computing the dollar amount of items on the property tax 
        refund claim form and accompanying schedules, items may be 
        rounded off to the nearest whole dollar amount, disregarding 
        amounts of less than 50 cents and increasing amounts of 50 cents 
        to 99 cents to the next highest dollar. 
           Sec. 36.  Minnesota Statutes 1994, section 375.192, 
        subdivision 2, is amended to read: 
           Subd. 2.  Upon written application by the owner of any 
        property, the county board may grant the reduction or abatement 
        of estimated market valuation or taxes and of any costs, 
        penalties, or interest on them as the board deems just and 
        equitable and order the refund in whole or part of any taxes, 
        costs, penalties, or interest which have been erroneously or 
        unjustly paid.  Except as provided in section 375.194, the 
        county board is authorized to consider and grant reductions or 
        abatements on applications only as they relate to taxes payable 
        in the current year and the two prior years; provided that 
        reductions or abatements for the two prior years shall be 
        considered or granted only for (i) clerical errors, or (ii) when 
        the taxpayer fails to file for a reduction or an adjustment due 
        to hardship, as determined by the county board.  The application 
        must include the social security number of the applicant.  The 
        social security number is private data on individuals as defined 
        by section 13.02, subdivision 12.  All applications must be 
        approved by the county assessor, or, if the property is located 
        in a city of the first or second class having a city assessor, 
        by the city assessor, and by the county auditor before 
        consideration by the county board, except that the part of the 
        application which is for the abatement of penalty or interest 
        must be approved by the county treasurer and county auditor.  
        Approval by the county or city assessor is not required for 
        abatements of penalty or interest.  No reduction, abatement, or 
        refund of any special assessments made or levied by any 
        municipality for local improvements shall be made unless it is 
        also approved by the board of review or similar taxing authority 
        of the municipality.  Before taking action on any reduction or 
        abatement where the reduction of taxes, costs, penalties, and 
        interest exceed $10,000, the county board shall give 20 days' 
        notice to the school board and the municipality in which the 
        property is located.  The notice must describe the property 
        involved, the actual amount of the reduction being sought, and 
        the reason for the reduction.  If the school board or the 
        municipality object to the granting of the reduction or 
        abatement, the county board must refer the abatement or 
        reduction to the commissioner of revenue with its 
        recommendation.  The commissioner shall consider the abatement 
        or reduction under section 270.07, subdivision 1.  
           An appeal may not be taken to the tax court from any order 
        of the county board made in the exercise of the discretionary 
        authority granted in this section.  
           The county auditor shall notify the commissioner of revenue 
        of all abatements resulting from the erroneous classification of 
        real property, for tax purposes, as nonhomestead property.  For 
        the abatements relating to the current year's tax processed 
        through June 30, the auditor shall notify the commissioner on or 
        before July 31 of that same year of all abatement applications 
        granted.  For the abatements relating to the current year's tax 
        processed after June 30 through the balance of the year, the 
        auditor shall notify the commissioner on or before the following 
        January 31 of all applications granted.  The county auditor 
        shall submit a form containing the social security number of the 
        applicant and such other information the commissioner prescribes.
           Sec. 37.  [375.194] [ECONOMIC DEVELOPMENT TAX ABATEMENT.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given them.  
           (a) "Eligible county" means a county whose county 
        government average tax rate is at least 45 points higher than an 
        adjacent neighboring county's county government average tax rate 
        in the initial year that the tax abatement is granted on the 
        eligible property.  An eligible county cannot be one of the 
        seven metropolitan counties under section 473.121, subdivision 4.
           (b) "Neighboring county" means a county whose average 
        county government tax rate is at least 45 points lower than the 
        average county government tax rate of an adjacent county that is 
        an eligible county, in the initial year that the tax abatement 
        is granted. 
           (c) "Eligible property" means property located in an 
        eligible county within 20 miles of the neighboring county and is 
        either (i) commercial property classified under section 273.13, 
        subdivision 24, whose estimated market value has increased by at 
        least $400,000 from improvements made on that property by the 
        taxpayer after January 2, 1996, or (ii) industrial property 
        classified under section 273.13, subdivision 24, whose estimated 
        market value has increased by at least $100,000 from 
        improvements made on that property by the taxpayer after January 
        2, 1996.  
           (d) "Improvements" means (i) new construction, and (ii) 
        rehabilitation, reconstruction, and additions to existing 
        structures. 
           (e) "Maximum tax abatement" for any given year means the 
        difference between (i) the eligible county's current year county 
        government tax rate times the net tax capacity of the eligible 
        property, and (ii) the neighboring county's current year county 
        government tax rate times the net tax capacity of the eligible 
        property. 
           (f) "Taxpayer" means the person who is responsible for 
        payment of the property tax, including a lessee who pays the 
        taxes on the eligible property. 
           Subd. 2.  [ABATEMENT AUTHORITY.] The county board of an 
        eligible county may enter into a written agreement with the 
        taxpayer of eligible property to grant a property tax abatement 
        to the taxpayer.  The agreement must specify the percentage of 
        the maximum tax abatement to be granted for each of the 
        designated tax abatement years.  The agreement must not provide 
        a property tax abatement for any given year that exceeds the 
        maximum tax abatement under subdivision 1, paragraph (e).  The 
        maximum length of the agreement is ten years.  Even if the 
        difference in the two county average tax rates in any given year 
        is less than the required 45-point minimum, the agreement shall 
        remain in effect for its duration.  The agreement is binding 
        unless both the eligible county's county board and the taxpayer 
        mutually agree upon any changes in the agreement. 
           Subd. 3.  [ABATEMENT CALCULATIONS.] The actual tax 
        abatement shall be computed annually by the county auditor of 
        the county in which the eligible property is located using (i) 
        the difference between the eligible county's current year 
        average county government tax rate and the neighboring county's 
        current year average county government tax rate, and (ii) the 
        percentage of the maximum tax abatement specified in the 
        agreement. 
           If the improvements are made over two calendar years, the 
        county board is allowed to grant the initial tax abatement based 
        on improvements of less than the $100,000 estimated market value 
        for industrial property and $400,000 estimated market value for 
        commercial property, provided that the county board has 
        finalized the agreement and is reasonably assured that the 
        minimum dollar requirements provided in subdivision 1 will be 
        met over the two-year time period.  However, the agreement's 
        ten-year maximum time period begins with the year the first 
        abatement is granted. 
           Subd. 4.  [PROPOSED AND FINAL PROPERTY TAX STATEMENTS.] For 
        purposes of determining the eligible property's taxes on the 
        proposed property tax statement under section 275.065, the 
        amount shown will be the amount before the deduction of the tax 
        abatement under subdivision 3.  The property taxes shown on the 
        final property tax statement shall reflect both the taxes before 
        and after the tax abatement granted under this section. 
           Subd. 5.  [DETERMINATION OF COUNTY TAX RATE.] The eligible 
        county's proposed and final tax rates shall be determined by 
        dividing the certified levy by the total taxable net tax 
        capacity, without regard to any abatements granted under this 
        section.  The county board shall make available the estimated 
        amount of the abatement at the public hearing under section 
        275.065, subdivision 6. 
           Subd. 6.  [ELIGIBLE PROPERTY LOCATED IN A TAX INCREMENT 
        FINANCING DISTRICT.] Eligible property may be located in a tax 
        increment financing district, provided that (i) the governing 
        body of the municipality containing the district approves the 
        written agreement under subdivision 2, and (ii) the county 
        treasurer, when making property tax settlements of the property 
        tax collected on eligible property, shall deduct the full amount 
        of the tax abatement granted to the eligible property under this 
        section from the property tax distribution made to the tax 
        increment financing district. 
           Sec. 38.  Minnesota Statutes 1994, section 469.040, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [FACILITIES FUNDED FROM MULTIPLE SOURCES.] In the 
        metropolitan area, as defined in section 473.121, subdivision 2, 
        the tax treatment provided in subdivision 3 applies to that 
        portion of any multifamily rental housing facility represented 
        by the ratio of (1) the number of units in the facility that are 
        subject to the requirements of Section 5 of the United States 
        Housing Act of 1937, as the result of the implementation of a 
        federal court order or consent decree to (2) the total number of 
        units within the facility. 
           The housing and redevelopment authority for the city in 
        which the facility is located, any public entity exercising the 
        powers of such housing and redevelopment authority, or the 
        county housing and redevelopment authority for the county in 
        which the facility is located, shall annually certify to the 
        assessor responsible for assessing the facility, at the time and 
        in the manner required by the assessor, the number of units in 
        the facility that are subject to the requirements of Section 5 
        of the United States Housing Act of 1937.  
           Nothing in this subdivision shall prevent that portion of 
        the facility not subject to this subdivision from meeting the 
        requirements of section 273.1317, and for that purpose the total 
        number of units in the facility must be taken into account. 
           Sec. 39.  Minnesota Statutes 1994, section 471.59, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [JOINT POWERS BOARD FOR HOUSING.] (a) For 
        purposes of implementing a federal court order or decree, two or 
        more housing and redevelopment authorities, or public entities 
        exercising the public housing powers of housing and 
        redevelopment authorities, may by adoption of a joint powers 
        agreement that complies with the provisions of subdivisions 1 to 
        5, establish a joint board for the purpose of acquiring an 
        interest in, rehabilitating, constructing, owning, or managing 
        low-rent public housing located in the metropolitan area, as 
        defined in section 473.121, subdivision 2, and financed, in 
        whole or in part, with federal financial assistance under 
        Section 5 of the United States Housing Act of 1937.  The joint 
        board established pursuant to this subdivision shall: 
           (1) be composed of members designated by the governing 
        bodies of the governmental units which established such joint 
        board, and possess such representative and voting power provided 
        by the joint powers agreement; 
           (2) constitute a public body, corporate, and politic; and 
           (3) notwithstanding the provisions of subdivision 1, 
        requiring commonality of powers between parties to a joint 
        powers agreement, and solely for the purpose of acquiring an 
        interest in, rehabilitating, constructing, owning, or managing 
        federally financed low-rent public housing, shall possess all of 
        the powers and duties contained in sections 469.001 to 469.047 
        and, if at least one participant is an economic development 
        authority, sections 469.090 to 469.1081, except (i) as may be 
        otherwise limited by the terms of the joint powers agreement; 
        and (ii) a joint board shall not have the power to tax pursuant 
        to section 469.033, subdivision 6, or section 469.107, nor shall 
        it exercise the power of eminent domain.  Every joint powers 
        agreement establishing a joint board shall specifically provide 
        which and under what circumstances the powers granted herein may 
        be exercised by that joint board. 
           (b) If a housing and redevelopment authority exists in a 
        city which intends to participate in the creation of a joint 
        board pursuant to paragraph (a), such housing and redevelopment 
        authority shall be the governmental unit which enters into the 
        joint powers agreement unless it determines not to do so, in 
        which event the governmental entity which enters into the joint 
        powers agreement may be any public entity of that city which 
        exercises the low-rent public housing powers of a housing and 
        redevelopment authority.  
           (c) A joint board shall not make any contract with the 
        federal government for low-rent public housing, unless the 
        governing body or bodies creating the participating authority in 
        whose jurisdiction the housing is located has, by resolution, 
        approved the provision of that low-rent public housing. 
           (d) This subdivision shall not apply to any housing and 
        redevelopment authority, or public entity exercising the powers 
        of a housing and redevelopment authority, within the 
        jurisdiction of a county housing and redevelopment authority 
        which is actively carrying out a public housing program under 
        Section 5 of the United States Housing Act of 1937.  For 
        purposes of this paragraph, a county housing and redevelopment 
        authority shall be considered to be actively carrying out a 
        public housing program under Section 5 of the United States 
        Housing Act of 1937, if it (1) owns 200 or more public housing 
        units constructed under Section 5 of the United States Housing 
        Act of 1937, and (2) has applied for public housing development 
        funds under Section 5 of the United States Housing Act of 1937, 
        during the three years immediately preceding January 1, 1996. 
           (e) For purposes of sections 469.001 to 469.047, "city" 
        means the city in which the housing units with respect to which 
        the joint board was created are located and "governing body" or 
        "governing body creating the authority" means the council of 
        such city. 
           Sec. 40.  Minnesota Statutes 1995 Supplement, section 
        471.6965, is amended to read: 
           471.6965 [PUBLICATION OF SUMMARY BUDGET STATEMENT.] 
           Annually, upon adoption of the city budget, the city 
        council shall publish a summary budget statement in either of 
        the following: 
           (1) the official newspaper of the city, or if there is 
        none, in a qualified newspaper of general circulation in the 
        city; or 
           (2) for a city in the metropolitan area as defined in 
        section 473.121, subdivision 2, a city newsletter or other city 
        mailing sent to all households in the city.  
           If the summary budget statement is published in a city 
        newsletter, it must be the lead story.  If the summary budget 
        statement is published through a city newsletter or other city 
        mailing, a copy of the newsletter or mailing shall be sent on 
        request to any nonresident.  If the summary budget statement is 
        published by a mailing to households other than a newsletter, 
        the color of the paper on which the summary budget statement is 
        printed must be distinctively different than the paper 
        containing other printed material included in the mailing. 
           If the budget statement is mailed to households, the city 
        may also include a notice notifying taxpayers when the city will 
        begin its budget process for the current year and encouraging 
        taxpayers to attend the hearings.  A telephone number where 
        taxpayers can check on the dates and times of those future 
        hearings should be included. 
           The statement shall contain information relating to 
        anticipated revenues and expenditures, in a form prescribed by 
        the state auditor.  The form prescribed shall be designed so 
        that comparisons can be made between the current year and the 
        budget year.  A note shall be included that the complete budget 
        is available for public inspection at a designated location 
        within the city. 
           Sec. 41.  Minnesota Statutes 1995 Supplement, section 
        473.448, is amended to read: 
           473.448 [COUNCIL; EXEMPTION FROM TAXATION TRANSIT ASSETS 
        EXEMPT FROM TAX BUT MUST PAY ASSESSMENTS.] 
           (a) Notwithstanding any other provision of law to the 
        contrary, the properties, moneys, and other assets of the 
        council used for transit operations or for special 
        transportation services and all revenues or other income from 
        the council's transit operations or special transportation 
        services shall be are exempt from all taxation, licenses, or 
        fees, or charges of any kind imposed by the state or by any 
        county, municipality, political subdivision, taxing district, or 
        other public agency or body of the state. 
           (b) Notwithstanding paragraph (a), the council's transit 
        properties are subject to special assessments levied by a 
        political subdivision for a local improvement in amounts 
        proportionate to and not exceeding the special benefit received 
        by the properties from the improvement.  
           Sec. 42.  [APPLICATION.] 
           Section 41 applies in the counties of Anoka, Carver, 
        Dakota, Hennepin, Ramsey, Scott, and Washington. 
           Sec. 43.  Minnesota Statutes 1994, section 473.625, is 
        amended to read: 
           473.625 [DETACHMENT OF CERTAIN MAJOR AIRPORTS LAND FROM 
        CITIES AND SCHOOL DISTRICTS.] 
           (a) Lands constituting any major airport or a part thereof 
        now and which may hereafter be operated by any public 
        corporation organized under sections 473.601 to 473.679, and 
        embraced within any city or school district organized under the 
        laws of the state, are hereby detached from such city or school 
        district.  
           (b)(i) Except as provided in clause (ii), real and personal 
        property, including real and personal property otherwise taxable 
        under section 272.01, constituting all or part of an 
        intermediate airport operated by a public corporation organized 
        under sections 473.601 to 473.679 and embraced within a home 
        rule charter or statutory city or school district is exempt from 
        taxation by the city or school district. 
           (ii) The county assessor of the county where the property 
        under this paragraph is located shall determine the total market 
        value for all property at that site for assessment year 2001, 
        compare it to the market value of the property existing on that 
        site for the 1996 assessment, and report those market values to 
        the commission.  If the total market value has not increased by 
        at least 20 percent, the property tax exemption under clause (i) 
        shall expire and the property shall be taxable beginning in 
        assessment year 2001 and thereafter, for taxes payable in 2002 
        and thereafter.  The provisions of section 473.629 apply to 
        lands exempted from property tax under this paragraph. 
           (c) For the purposes of this section, an intermediate 
        airport is an airport that as of March 14, 1996, is a primary 
        reliever airport, provides general aviation services, has a 
        primary runway between 5,001 and 8,000 feet in length, and has 
        precision instrument capability. 
           Sec. 44.  Minnesota Statutes 1994, section 477A.011, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POPULATION.] "Population" means the population 
        established as of July 1 in an aid calculation year by the most 
        recent federal census, by a special census conducted under 
        contract with the United States Bureau of the Census, by a 
        population estimate made by the metropolitan council, or by a 
        population estimate of the state demographer made pursuant to 
        section 4A.02, whichever is the most recent as to the stated 
        date of the count or estimate for the preceding calendar year.  
        The term "per capita" refers to population as defined by this 
        subdivision. 
           Sec. 45.  Minnesota Statutes 1995 Supplement, section 
        477A.0121, subdivision 4, is amended to read: 
           Subd. 4.  [PUBLIC DEFENDER COSTS.] Each calendar year, 
        two 1.5 percent of the total appropriation for this section 
        shall be retained by the commissioner of revenue to make 
        reimbursements to the commissioner of finance for payments made 
        under section 611.27.  The reimbursements shall be to defray the 
        additional costs associated with court-ordered counsel under 
        section 611.27.  Any retained amounts not used for reimbursement 
        in a year shall be included in the next distribution of county 
        criminal justice aid that is certified to the county auditors 
        for the purpose of property tax reduction for the next taxes 
        payable year.  
           Sec. 46.  Minnesota Statutes 1995 Supplement, section 
        477A.0132, is amended to read: 
           477A.0132 [AID REDUCTIONS TO LOCAL GOVERNMENTS.] 
           Subdivision 1.  [AFFECTED LOCAL GOVERNMENTS.] The following 
        reductions shall be made in aids paid to the following local 
        units of government: 
           (a) For aids payable in 1996, there shall be a nonpermanent 
        reduction in aids to counties, cities, towns, and special taxing 
        districts of $16,000,000, provided that Laws 1995, chapter 264, 
        article 8, section 25, subdivision 1, is enacted; otherwise the 
        reduction is $14,000,000. 
           (b) Aid reductions required under section 16A.711, 
        subdivision 5, shall be nonpermanent reductions in aids to 
        counties, cities, towns, and special taxing districts equal to 
        the difference between the aid amounts certified to be paid and 
        the amount of the appropriation to pay the aids.  
           (c) For aids payable in 1996 there shall be a permanent 
        reduction in aids to counties of $10,000,000, provided that Laws 
        1995, chapter 264, article 8, section 16, is enacted. 
           (d) For aids payable in 1997 there shall be a permanent 
        reduction in aids to county regional rail authorities and 
        counties of $6,800,000, provided that section 45 is enacted. 
           Subd. 2.  [CALCULATION OF AID REDUCTION.] The aid reduction 
        to each local government as provided under subdivision 1 will be 
        equal to the product of the reduction percentage and its 
        reduction base.  The reduction base is defined as the following: 
           (a) For subdivision 1, clause (a), the reduction base is 
        equal to the adjusted revenue base for 1996. 
           (b) For subdivision 1, clause (b), the reduction base is 
        equal to the adjusted revenue base for the year in which the aid 
        payment is to be made. 
           (c) For subdivision 1, clause (c), the reduction base is a 
        county's aid in calendar year 1996 under section 477A.0121.  
           (d) For subdivision 1, clause (d), the reduction base is a 
        county's aid in calendar year 1997 under section 477A.0121. 
           Reductions under subdivisions 1, paragraph (a), and 2, 
        paragraph (a), to any individual county, city, or town are 
        limited to an amount equal to 0.45 percent of the unit's 1994 
        adjusted net tax capacity.  For this subdivision, "adjusted net 
        tax capacity" means the political subdivision's net tax capacity 
        calculated using the method for calculating city net tax 
        capacity under section 477A.011, subdivision 20. 
           Subd. 3.  [ORDER OF AID REDUCTIONS.] (a) The aid reduction 
        to a local government calculated under subdivisions 1, 
        paragraphs (a) and (c), and 2, paragraphs (a) and (c), is 
        applied to homestead and agricultural credit aid under section 
        273.1398 only. 
           (b) The aid reduction to a local government calculated 
        under subdivisions 1, paragraph (d), and 2, paragraph (d), is 
        applied to homestead and agricultural credit aid paid under 
        section 273.1398 only; the amount is first subtracted from the 
        amount paid to a county's regional rail authority, if there is 
        one, and then from the county's general homestead and 
        agricultural credit aid. 
           (c) The aid reduction to a local government as calculated 
        under other paragraphs of subdivisions 1 and 2, is first applied 
        to its local government aid under sections 477A.012 and 477A.013 
        excluding aid under section 477A.013, subdivision 5; then, if 
        necessary, to its equalization aid under section 477A.013, 
        subdivision 5; then if necessary, to its homestead and 
        agricultural credit aid under section 273.1398, subdivision 2; 
        and then, if necessary, to its disparity reduction aid under 
        section 273.1398, subdivision 3.  No aid payment may be less 
        than $0.  Aid reductions under this section in any given year 
        shall be divided equally between the July and December aid 
        payments unless specified otherwise. 
           Sec. 47.  Minnesota Statutes 1995 Supplement, section 
        477A.03, subdivision 2, is amended to read: 
           Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
        discharge the duties imposed by sections 477A.011 to 477A.014 is 
        annually appropriated from the general fund to the commissioner 
        of revenue.  For aids payable in 1996 and thereafter, the total 
        aids paid under sections 477A.013, subdivision 9, and 477A.0122 
        are the amounts certified to be paid in the previous year, 
        adjusted for inflation as provided under subdivision 3.  Aid 
        payments to counties under section 477A.0121 are limited to 
        $20,265,000 in 1996.  Aid payments to counties under section 
        477A.0121 are limited to $27,571,625 in 1997.  For aid payable 
        in 1997 1998 and thereafter, the total aids paid under section 
        477A.0121 are the amounts certified to be paid in the previous 
        year, adjusted for inflation as provided under subdivision 3. 
           Sec. 48.  [477A.05] [LOCAL PERFORMANCE AID.] 
           Subdivision 1.  [QUALIFICATION.] By May 15, 1996, and March 
        31 of each year thereafter, the commissioner shall send a local 
        performance aid qualification form to each county and city in 
        the state.  Jurisdictions that are eligible to receive the aid 
        must return the completed form by June 30 in order to receive 
        aid in the following calendar year.  For each determinator 
        specified in subdivision 2, the form shall have a space for the 
        jurisdiction to indicate that it has satisfied the conditions of 
        the determinator.  For counties, the form must be signed by the 
        chair of the county board.  For cities, the form must be signed 
        by the mayor and a member of the city council. 
           Subd. 2.  [ELIGIBILITY DETERMINATOR.] For calendar year 
        1997 and subsequent calendar years, a jurisdiction is eligible 
        to receive local performance aid if the jurisdiction affirms 
        that it has developed a system of performance measures for the 
        services provided by the jurisdiction, and that these measures 
        are regularly compiled and presented to the county board or the 
        city council at least once a year.  A jurisdiction is also 
        eligible for aid under this determinator if it affirms that it 
        is in the process of developing and implementing a system of 
        performance measures; however, eligibility based upon being in 
        the process of development may not be used for more than two 
        consecutive years. 
           Subd. 3.  [DETERMINATION OF AID AMOUNT.] The commissioner 
        shall sum the populations of all jurisdictions that have met the 
        condition specified in subdivision 2.  The commissioner shall 
        determine a per capita aid amount by dividing the aggregate aid 
        available under subdivision 5 by the sum of the populations for 
        all qualifying jurisdictions, separately for counties and 
        cities.  Each jurisdiction shall then be eligible for aid equal 
        to the jurisdictions's population times the per capita aid 
        amount.  For purposes of this subdivision, population means the 
        most recent population established under section 477A.011, 
        subdivision 3 in the year in which the aid is determined. 
           Subd. 4.  [NOTIFICATION AND PAYMENT.] Jurisdictions shall 
        be notified of their aid under this section at the same time as 
        the notification for aid under section 477A.014, subdivision 1.  
        Payments of aid under this section shall be made on the dates 
        prescribed in section 477A.015. 
           Subd. 5.  [APPROPRIATION.] For payments to counties under 
        this section, there is annually appropriated from the general 
        fund to the commissioner of revenue an amount equal to the sum 
        of $558,625 plus the amount by which county aids were reduced 
        under section 49, adjusted for inflation as provided under 
        section 477A.03, subdivision 3.  For payments to cities under 
        this section, there is annually appropriated from the general 
        fund to the commissioner of revenue an amount equal to the sum 
        of $441,735 plus the amount by which city aids were reduced 
        under section 49, adjusted for inflation as provided under 
        section 477A.03, subdivision 3. 
           Sec. 49.  [AID REDUCTION.] 
           Calendar year 1997 aids to counties and cities under 
        section 273.1398, subdivision 2, shall be permanently reduced by 
        an amount equal to $1 times the most recent population of the 
        jurisdiction, established under section 477A.011, subdivision 3 
        in the year in which the aid is determined. 
           Sec. 50.  Laws 1989, chapter 211, section 4, subdivision 1, 
        is amended to read: 
           Subdivision 1.  [EXPENSES PAID FROM REVENUE, TAXES, AND 
        APPROPRIATIONS; TAX LIMITS.] Expenses of acquiring, improving, 
        and running medical clinic facilities operated by the medical 
        clinic district, and expenses of organization and administration 
        of the district and of planning and financing the facilities, 
        must be paid from the revenues derived from them, and to the 
        extent necessary, from property taxes levied by the medical 
        clinic board on all taxable property within the district.  Taxes 
        levied by the board in any year may not exceed $30,000 $50,000. 
           Sec. 51.  [RECREATION LEVY FOR SAWYER BY CARLTON COUNTY.] 
           Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding other 
        law to the contrary, the Carlton county board of commissioners 
        may levy in and for the unorganized township of Sawyer an amount 
        up to $1,500 annually for recreational purposes, beginning with 
        taxes payable in 1997 and ending with taxes payable in 2006. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective June 
        1, 1996, without local approval. 
           Sec. 52.  [ONE YEAR DELAY; PROPERTY TAX REFUND ON TAX 
        STATEMENT.] 
           The dates contained in Laws 1995, chapter 264, article 4, 
        sections 16, 17, 18, 19, and 20 are delayed for a period of one 
        year from the dates contained in those sections. 
           Sec. 53.  [TEMPORARY ABATEMENT AUTHORITY.] 
           Notwithstanding any law to the contrary, a county board may 
        abate, in full or part, unpaid property taxes, interest, and 
        penalties, if all the following conditions are satisfied: 
           (1) The property contains a vacant hotel building, 
        constructed before 1930 and in need of substantial 
        rehabilitation and repair. 
           (2) The property contains a building listed on the national 
        register or is located in a registered historic district. 
           (3) At least three years of property taxes are unpaid. 
           (4) The property is located in a city with a population of 
        less than 5,000. 
           (5) The city or another public development authority has 
        entered into a contract or development agreement with a private 
        person or entity who agrees to substantially rehabilitate the 
        building. 
           (6) The abatement is granted before January 1, 1997. 
           Sec. 54.  [REVISOR INSTRUCTIONS.] 
           (a) In the next edition of Minnesota Statutes, the revisor 
        shall renumber section 383.06, subdivision 2, as section 373.01, 
        subdivision 4. 
           (b) In the next edition of Minnesota Statutes, the revisor 
        shall change the references in Minnesota Statutes, section 
        290A.26, from "fiscal year 1998" to "fiscal year 1999" and from 
        "fiscal year 1999" to "fiscal year 2000." 
           Sec. 55.  [REPEALER.] 
           Minnesota Statutes 1994, section 273.1398, subdivision 5b, 
        is repealed. 
           Sec. 56.  [EFFECTIVE DATE.] 
           Section 1 is effective for lien amounts first becoming 
        payable in 1996 and thereafter. 
           Section 2 is effective for referenda held in November of 
        1996 and thereafter. 
           Sections 3, 4, 7, 9, 11, 19, 22, 24, 32, 34, 38, 39, and 53 
        are effective the day following final enactment. 
           Sections 5, 6, 8, 10, 36, 37, 43, and 50 are effective for 
        the 1996 assessment and thereafter, for taxes payable in 1997, 
        and thereafter. 
           Sections 13 to 15, 45 to 49, and 55 are effective for aids 
        paid in 1997 and thereafter.  
           Section 16 is effective for notices prepared in 1996 for 
        taxes payable in 1997, and thereafter.  
           Section 17 is effective for public advertisements beginning 
        in 1996 and thereafter.  
           Section 18 is effective for public hearings held in 1996 
        and thereafter.  
           Section 25 is effective for petitions filed after the day 
        of final enactment.  
           Section 31 is effective for mortgages recorded or 
        registered after the day of final enactment.  
           Section 33 is effective for refunds for taxes payable in 
        1997.  
           Section 35 is effective for timely filed property tax 
        refund claims based on rent paid in 1996 and property taxes 
        payable in 1997, and thereafter.  
           Section 40 is effective for publication of budget 
        statements beginning in 1997. 
           Section 44 is effective for calculations in 1996 and 
        thereafter, for aids payable in 1997 and thereafter. 
                                   ARTICLE 4
                                 FEDERAL UPDATE
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        289A.02, subdivision 7, is amended to read: 
           Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
        defined otherwise, "Internal Revenue Code" means the Internal 
        Revenue Code of 1986, as amended through April 15, 1995 March 
        22, 1996, and includes the provisions of section 1(a) and (b) of 
        Public Law Number 104-117. 
           Sec. 2.  Minnesota Statutes 1994, section 289A.39, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXTENSIONS FOR SERVICE MEMBERS.] (a) The 
        limitations of time provided by this chapter, chapter 290 
        relating to income taxes, chapter 271 relating to the tax court 
        for filing returns, paying taxes, claiming refunds, commencing 
        action thereon, appealing to the tax court from orders relating 
        to income taxes, and the filing of petitions under chapter 278 
        that would otherwise be due May 15, 1991 1996, and appealing to 
        the Supreme Court from decisions of the tax court relating to 
        income taxes are extended, as provided in section 7508 of the 
        Internal Revenue Code. 
           (b) If a member of the national guard or reserves is called 
        to active duty in the armed forces, the limitations of time 
        provided by this chapter and chapters 290 and 290A relating to 
        income taxes and claims for property tax refunds are extended by 
        the following period of time: 
           (1) in the case of an individual whose active service is in 
        the United States, six months; or 
           (2) in the case of an individual whose active service 
        includes service abroad, the period of initial service plus six 
        months. 
           Nothing in this paragraph reduces the time within which an 
        act is required or permitted under paragraph (a). 
           (c) If an individual entitled to the benefit of paragraph 
        (a) files a return during the period disregarded under paragraph 
        (a), interest must be paid on an overpayment or refundable 
        credit from the due date of the return, notwithstanding section 
        289A.56, subdivision 2.  
           (d) The provisions of this subdivision apply to the spouse 
        of an individual entitled to the benefits of this subdivision 
        with respect to a joint return filed by the spouses.  
           Sec. 3.  Minnesota Statutes 1995 Supplement, section 
        290.01, subdivision 19, is amended to read: 
           Subd. 19.  [NET INCOME.] The term "net income" means the 
        federal taxable income, as defined in section 63 of the Internal 
        Revenue Code of 1986, as amended through the date named in this 
        subdivision, incorporating any elections made by the taxpayer in 
        accordance with the Internal Revenue Code in determining federal 
        taxable income for federal income tax purposes, and with the 
        modifications provided in subdivisions 19a to 19f. 
           In the case of a regulated investment company or a fund 
        thereof, as defined in section 851(a) or 851(h) of the Internal 
        Revenue Code, federal taxable income means investment company 
        taxable income as defined in section 852(b)(2) of the Internal 
        Revenue Code, except that:  
           (1) the exclusion of net capital gain provided in section 
        852(b)(2)(A) of the Internal Revenue Code does not apply; and 
           (2) the deduction for dividends paid under section 
        852(b)(2)(D) of the Internal Revenue Code must be applied by 
        allowing a deduction for capital gain dividends and 
        exempt-interest dividends as defined in sections 852(b)(3)(C) 
        and 852(b)(5) of the Internal Revenue Code.  
           The net income of a real estate investment trust as defined 
        and limited by section 856(a), (b), and (c) of the Internal 
        Revenue Code means the real estate investment trust taxable 
        income as defined in section 857(b)(2) of the Internal Revenue 
        Code.  
           The net income of a designated settlement fund as defined 
        in section 468B(d) of the Internal Revenue Code means the gross 
        income as defined in section 468B(b) of the Internal Revenue 
        Code. 
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1986, shall be in effect for taxable years 
        beginning after December 31, 1986.  The provisions of sections 
        10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
        10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
        Omnibus Budget Reconciliation Act of 1987, Public Law Number 
        100-203, the provisions of sections 1001, 1002, 1003, 1004, 
        1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
        1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
        6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
        1988, Public Law Number 100-647, and the provisions of sections 
        7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
        1989, Public Law Number 101-239, shall be effective at the time 
        they become effective for federal income tax purposes.  
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1987, shall be in effect for taxable years 
        beginning after December 31, 1987.  The provisions of sections 
        4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
        6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
        6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
        Act of 1988, Public Law Number 100-647, the provisions of 
        sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
        of 1989, Public Law Number 101-239, and the provisions of 
        section 11702 of the Revenue Reconciliation Act of 1990, Public 
        Law Number 101-508, shall become effective at the time they 
        become effective for federal tax purposes.  
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1988, shall be in effect for taxable years 
        beginning after December 31, 1988.  The provisions of sections 
        7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
        7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
        7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
        Reconciliation Act of 1989, Public Law Number 101-239, the 
        provision of section 1401 of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
        and the provisions of sections 11701 and 11703 of the Revenue 
        Reconciliation Act of 1990, Public Law Number 101-508, shall 
        become effective at the time they become effective for federal 
        tax purposes.  
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1989, shall be in effect for taxable years 
        beginning after December 31, 1989.  The provisions of sections 
        11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
        the Revenue Reconciliation Act of 1990, Public Law Number 
        101-508, and the provisions of sections 13224 and 13261 of the 
        Omnibus Budget Reconciliation Act of 1993, Public Law Number 
        103-66, shall become effective at the time they become effective 
        for federal purposes.  
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1990, shall be in effect for taxable years 
        beginning after December 31, 1990. 
           The provisions of section 13431 of the Omnibus Budget 
        Reconciliation Act of 1993, Public Law Number 103-66, shall 
        become effective at the time they became effective for federal 
        purposes.  
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1991, shall be in effect for taxable years 
        beginning after December 31, 1991.  
           The provisions of sections 1936 and 1937 of the 
        Comprehensive National Energy Policy Act of 1992, Public Law 
        Number 102-486, and the provisions of sections 13101, 13114, 
        13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
        the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
        103-66, shall become effective at the time they become effective 
        for federal purposes.  
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1992, shall be in effect for taxable years 
        beginning after December 31, 1992.  
           The provisions of sections 13116, 13121, 13206, 13210, 
        13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
        the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
        103-66, shall become effective at the time they become effective 
        for federal purposes. 
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1993, shall be in effect for taxable years 
        beginning after December 31, 1993. 
           The provision of section 741 of Legislation to Implement 
        Uruguay Round of General Agreement on Tariffs and Trade, Public 
        Law Number 103-465, and the provisions of sections 1, 2, and 3, 
        of the Self-Employed Health Insurance Act of 1995, Public Law 
        Number 104-7, shall become effective at the time they become 
        effective for federal purposes. 
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1994, shall be in effect for taxable years 
        beginning after December 31, 1994. 
           The Internal Revenue Code of 1986, as amended through March 
        22, 1996, is in effect for taxable years beginning after 
        December 31, 1995. 
           The provisions of Public Law Number 104-117 become 
        effective at the time they become effective for federal purposes.
           Except as otherwise provided, references to the Internal 
        Revenue Code in subdivisions 19a to 19g mean the code in effect 
        for purposes of determining net income for the applicable year. 
           Sec. 4.  Minnesota Statutes 1995 Supplement, section 
        290.01, subdivision 31, is amended to read: 
           Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
        defined otherwise, "Internal Revenue Code" means the Internal 
        Revenue Code of 1986, as amended through April 15, 1995 March 
        22, 1996, and includes the provisions of section 1(a) and (b) of 
        Public Law Number 104-117. 
           Sec. 5.  Minnesota Statutes 1995 Supplement, section 
        291.005, subdivision 1, is amended to read: 
           Subdivision 1.  Unless the context otherwise clearly 
        requires, the following terms used in this chapter shall have 
        the following meanings: 
           (1) "Federal gross estate" means the gross estate of a 
        decedent as valued and otherwise determined for federal estate 
        tax purposes by federal taxing authorities pursuant to the 
        provisions of the Internal Revenue Code. 
           (2) "Minnesota gross estate" means the federal gross estate 
        of a decedent after (a) excluding therefrom any property 
        included therein which has its situs outside Minnesota and (b) 
        including therein any property omitted from the federal gross 
        estate which is includable therein, has its situs in Minnesota, 
        and was not disclosed to federal taxing authorities.  
           (3) "Personal representative" means the executor, 
        administrator or other person appointed by the court to 
        administer and dispose of the property of the decedent.  If 
        there is no executor, administrator or other person appointed, 
        qualified, and acting within this state, then any person in 
        actual or constructive possession of any property having a situs 
        in this state which is included in the federal gross estate of 
        the decedent shall be deemed to be a personal representative to 
        the extent of the property and the Minnesota estate tax due with 
        respect to the property. 
           (4) "Resident decedent" means an individual whose domicile 
        at the time of death was in Minnesota. 
           (5) "Nonresident decedent" means an individual whose 
        domicile at the time of death was not in Minnesota. 
           (6) "Situs of property" means, with respect to real 
        property, the state or country in which it is located; with 
        respect to tangible personal property, the state or country in 
        which it was normally kept or located at the time of the 
        decedent's death; and with respect to intangible personal 
        property, the state or country in which the decedent was 
        domiciled at death. 
           (7) "Commissioner" means the commissioner of revenue or any 
        person to whom the commissioner has delegated functions under 
        this chapter. 
           (8) "Internal Revenue Code" means the United States 
        Internal Revenue Code of 1986, as amended through April 15, 1995 
        March 22, 1996, and includes the provisions of section 1(a)(4) 
        of Public Law Number 104-117. 
           Sec. 6.  [EFFECTIVE DATE.] 
           Sections 1, 4, and 5 are effective at the same time section 
        1 of Public Law Number 104-117 is effective.  Section 2 is 
        effective for taxable years beginning after December 31, 1994, 
        and claims for property tax refunds filed after the day of final 
        enactment. 
                                   ARTICLE 5 
                               MOTOR FUELS TAXES 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        41A.09, subdivision 2a, is amended to read: 
           Subd. 2a.  [DEFINITIONS.] For the purposes of this section, 
        the terms defined in this subdivision have the meanings given 
        them. 
           (a) "Ethanol" means fermentation ethyl alcohol derived from 
        agricultural products, including potatoes, cereal, grains, 
        cheese whey, and sugar beets; forest products; or other 
        renewable resources, including residue and waste generated from 
        the production, processing, and marketing of agricultural 
        products, forest products, and other renewable resources, that: 
           (1) meets all of the specifications in ASTM specification D 
        4806-88; and 
           (2) is denatured with unleaded gasoline or rubber 
        hydrocarbon solvent as defined specified in Code of Federal 
        Regulations, title 27, parts 211 20 and 212, as adopted by the 
        Bureau of Alcohol, Tobacco and Firearms of the United States 
        Treasury Department 21. 
           (b) "Wet alcohol" means agriculturally derived fermentation 
        ethyl alcohol having a purity of at least 50 percent but less 
        than 99 percent. 
           (c) "Anhydrous alcohol" means fermentation ethyl alcohol 
        derived from agricultural products as described in paragraph 
        (a), but that does not meet ASTM specifications or is not 
        denatured and is shipped in bond for further processing. 
           (d) "Ethanol plant" means a plant at which ethanol, 
        anhydrous alcohol, or wet alcohol is produced. 
           Sec. 2.  Minnesota Statutes 1994, section 239.761, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DENATURED ETHANOL.] Denatured ethanol that is to 
        be blended with gasoline must be agriculturally derived and must 
        comply with ASTM specification D 4806-88.  This includes the 
        requirement that ethanol may be denatured only with specified 
        concentrations of unleaded gasoline or rubber hydrocarbon 
        solvent as defined specified in Code of Federal Regulations, 
        title 27, parts 211 20 and 212, as adopted by the Bureau of 
        Alcohol, Tobacco and Firearms of the United States Treasury 
        Department 21. 
           Sec. 3.  Minnesota Statutes 1994, section 296.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AGRICULTURAL ALCOHOL GASOLINE.] "Agricultural 
        alcohol gasoline" means a gasoline-ethanol blend of up to ten 
        percent agriculturally derived fermentation ethanol derived from 
        agricultural products, such as potatoes, cereal, grains, cheese 
        whey, sugar beets, or forest products or other renewable 
        resources, that: 
           (1) meets the specifications in ASTM specification D 
        4806-88; and 
           (2) is denatured with unleaded gasoline or rubber 
        hydrocarbon solvent as defined specified in Code of Federal 
        Regulations, title 27, parts 211 20 and 212, as adopted by the 
        Bureau of Alcohol, Tobacco and Firearms of the United States 
        Treasury Department 21. 
           Sec. 4.  Minnesota Statutes 1994, section 296.01, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DENATURED ETHANOL.] "Denatured ethanol" means 
        ethanol that is to be blended with gasoline, has been 
        agriculturally derived, and complies with ASTM specification D 
        4806-88.  This includes the requirement that ethanol may be 
        denatured only with specified concentrations of unleaded 
        gasoline or rubber hydrocarbon solvent as defined specified in 
        Code of Federal Regulations, title 27, parts 211 20 and 212, as 
        adopted by the Bureau of Alcohol, Tobacco and Firearms of the 
        United States Treasury Department 21. 
           Sec. 5.  Minnesota Statutes 1995 Supplement, section 
        296.02, subdivision 1, is amended to read: 
           Subdivision 1.  [TAX IMPOSED; EXCEPTION FOR QUALIFIED 
        SERVICE STATION.] There is imposed an excise tax on gasoline, 
        gasoline blended with ethanol, and agricultural alcohol 
        gasoline, used in producing and generating power for propelling 
        motor vehicles used on the public highways of this state.  The 
        tax is imposed on the first distributor who received the product 
        in Minnesota.  For purposes of this section, gasoline is defined 
        in section 296.01, subdivisions 10, 15b, 18, 19, 20, and 24a.  
        This tax is payable at the times, in the manner, and by persons 
        specified in this chapter.  The tax is payable at the rate 
        specified in subdivision 1b, subject to the exceptions and 
        reductions specified in this section.  
           (a) Notwithstanding any other provision of law to the 
        contrary, the tax imposed on special fuel sold by a qualified 
        service station may not exceed, or the tax on gasoline delivered 
        to a qualified service station must be reduced to, a rate not 
        more than three cents per gallon above the state tax rate 
        imposed on such products sold by a service station in a 
        contiguous state located within the distance indicated in clause 
        (b).  
           (b) A "qualifying service station" means a service station 
        located within 7.5 miles, measured by the shortest route by 
        public road, from a service station selling like product in the 
        contiguous state.  
           (c) A qualified service station shall be allowed a credit 
        by the supplier or distributor, or both, for the amount of 
        reduction computed in accordance with clause (a).  
           A qualified service station, before receiving the credit, 
        shall be registered with the commissioner of revenue.  
           Sec. 6.  Minnesota Statutes 1994, section 296.02, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [QUALIFYING SERVICE STATIONS.] Notwithstanding 
        any other provision of law to the contrary, the tax imposed on 
        gasoline or undyed diesel fuel delivered to a qualified service 
        station may not exceed, or must be reduced to, a rate not more 
        than three cents per gallon above the state tax rate imposed on 
        such products sold by a service station in a contiguous state 
        located within the distance indicated in this subdivision. 
           A distributor shall be allowed a credit or refund for the 
        amount of reduction computed in accordance with this subdivision.
           For purposes of this subdivision, a "qualifying service 
        station" means a service station located within 7.5 miles, 
        measured by the shortest route by public road, from a service 
        station selling like product in the contiguous state. 
           Sec. 7.  Minnesota Statutes 1994, section 296.02, 
        subdivision 8, is amended to read: 
           Subd. 8.  [CREDITS FOR SALES TO GOVERNMENTS AND SCHOOLS.] 
        Until October 1, 1999, a distributor shall be allowed a credit 
        of 80 cents for every on each gallon of fuel grade alcohol 
        blended with gasoline to produce agricultural alcohol gasoline 
        which is sold to the state, local units of government, or for 
        use in the transportation of pupils to and from school-related 
        events in vehicles owned by or under contract to a school 
        district.  This reduction is in lieu of the reductions provided 
        in subdivision 7. 
           The amount of the credit for every gallon is: 
           (1) until October 1, 1996, 80 cents; 
           (2) until October 1, 1997, 60 cents; 
           (3) until October 1, 1998, 40 cents; and 
           (4) until October 1, 1999, 20 cents. 
           Sec. 8.  Minnesota Statutes 1995 Supplement, section 
        296.025, subdivision 1, is amended to read: 
           Subdivision 1.  [TAX IMPOSED.] There is hereby imposed an 
        excise tax on all special fuel at the rates specified in 
        subdivision 1b.  For undyed diesel fuel, the tax is imposed on 
        the first distributor who received the product in Minnesota.  
        For dyed fuel being used illegally in a licensed motor vehicle, 
        the tax is imposed on the owner or operator of the motor 
        vehicle, or in some instances, on the dealer who supplied the 
        fuel.  For dyed fuel used in a motor vehicle but subject to a 
        federal exemption, although no federal tax may be imposed, the 
        fuel is subject to owner or operator of the vehicle is liable 
        for the state tax.  For other fuels, including jet fuel, 
        propane, and compressed natural gas, the tax is imposed on the 
        distributor, special fuel dealer, or bulk purchaser.  This tax 
        is payable at the time and in the manner specified in this 
        chapter.  For purposes of this section, "owner or operator" 
        means the operation of licensed motor vehicles, whether loaded 
        or empty, whether for compensation or not for compensation, and 
        whether owned by or leased to the motor carrier who operates 
        them or causes them to be operated. 
           Sec. 9.  Minnesota Statutes 1994, section 296.025, 
        subdivision 6, is amended to read: 
           Subd. 6.  [WHEN FUEL DEEMED SPECIAL FUEL; TAX.] All sales 
        of combustible gases and liquid petroleum products (except 
        gasoline) shall be deemed to be sales of special fuel if the 
        sales tickets, invoices, and records evidencing such sales fail 
        to show the true and correct names and addresses of the 
        purchasers.  In such cases, there is hereby imposed an excise 
        tax of the same rate per gallon as the gasoline excise tax on 
        all such combustible gases and liquid petroleum products, and 
        the vendor shall be liable for such tax to the extent not 
        previously paid. 
           Sec. 10.  Minnesota Statutes 1995 Supplement, section 
        296.12, subdivision 3, is amended to read: 
           Subd. 3.  [TAX COLLECTION, REPORTING AND PAYMENT.] (a) For 
        undyed diesel fuel, the tax is imposed on the distributor who 
        receives the fuel. 
           (b) For all other special fuels, the tax is imposed on the 
        distributor, bulk purchaser, or special fuel dealer.  The tax 
        may be paid upon receipt or sale as follows:  
           (1) Distributors and special fuel dealers may, subject to 
        the approval of the commissioner, elect to pay to the 
        commissioner the special fuel excise tax on all special fuel 
        delivered or sold into the supply tank of an aircraft or a 
        licensed motor vehicle.  Under this option an invoice must be 
        issued at the time of each delivery showing the name and address 
        of the purchaser, date of sale, number of gallons, price per 
        gallon and total amount of sale.  A separate sales ticket book 
        shall be maintained for special fuel sales; and 
           (2) Bulk purchasers shall report and pay the excise tax on 
        all special fuel purchased by them for storage, to the 
        commissioner in the form and manner prescribed by the 
        commissioner. 
           (c) Any person delivering special fuel on which the excise 
        tax has not previously been paid, into the supply tank of an 
        aircraft or a licensed motor vehicle shall report such delivery 
        and shall pay, or collect and pay the excise tax on the special 
        fuel so delivered, to the commissioner. 
           Sec. 11.  Minnesota Statutes 1994, section 296.141, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CREDIT OR REFUND OF TAX PAID.] The commissioner 
        shall allow the distributor credit or refund of the tax paid on 
        gasoline and special fuel: 
           (1) exported or sold for export from the state, other than 
        in the supply tank of a motor vehicle or of an aircraft; 
           (2) sold to the United States government to be used 
        exclusively in performing its governmental functions and 
        activities or to any "cost plus a fixed fee" contractor employed 
        by the United States government on any national defense project; 
           (3) if the fuel is placed in a tank used exclusively for 
        residential heating; 
           (4) destroyed by accident while in the possession of the 
        distributor; 
           (5) in error; 
           (6) sold for storage in an on-farm bulk storage tank, if 
        the tax was not collected on the sale; and 
           (7) (6) in such other cases as the commissioner may permit, 
        not inconsistent with the provisions of this chapter and other 
        laws relating to the gasoline and special fuel excise taxes. 
           Sec. 12.  Minnesota Statutes 1994, section 296.141, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REFUND TO DEALER; DESTRUCTION BY ACCIDENT.] 
        Notwithstanding the provisions of subdivision 4, the 
        commissioner shall allow a dealer a refund of the tax paid on 
        gasoline or special fuel destroyed by accident while in the 
        possession of the dealer: 
           (1) the tax paid by the distributor on gasoline or undyed 
        diesel fuel destroyed by accident while in the possession of the 
        dealer; or 
           (2) the tax paid by a distributor or special fuels dealer 
        on other special fuels destroyed by accident while in the 
        possession of the dealer. 
           Sec. 13.  Minnesota Statutes 1994, section 296.15, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [IMPOSITION OF CIVIL PENALTY; DYED FUEL.] (a) If 
        any dyed fuel is sold or held for sale by a person for any use 
        which the person knows or has reason to know is not a nontaxable 
        use of the fuel; or if any dyed fuel is held for use or used in 
        a licensed motor vehicle or for any other use by a person for a 
        use other than a nontaxable use and the person knew, or had 
        reason to know, that the fuel was so dyed; or if a person 
        willfully alters, or attempts to alter, the strength or 
        composition of any dye or marking in any dyed fuel, then the 
        person shall pay a penalty in addition to the tax, if any. 
           (b) Except as provided in paragraph (c), the amount of 
        penalty under paragraph (a) for each act is the greater of 
        $1,000, or $10 for each gallon of dyed fuel involved. 
           (c) With regard to a multiple violation under paragraph 
        (a), the penalty shall be applied by increasing the amount in 
        paragraph (b) by the product of (1) such amount, and (2) the 
        number of prior penalties, if any, imposed by this section on 
        the person, or a related person, or any predecessor of the 
        person or related person. 
           (d) If a penalty is imposed under this section on a 
        business entity, each officer, employee, or agent of the entity 
        who willfully participated in any act giving rise to the penalty 
        is jointly and severally liable with the entity for the penalty. 
           Sec. 14.  Minnesota Statutes 1994, section 296.17, 
        subdivision 7, is amended to read: 
           Subd. 7.  [DEFINITIONS.] As used in subdivisions 7 to 22: 
           (a) "motor fuel" means a liquid, regardless of its 
        composition or properties, used to propel a motor vehicle; 
           (b) "commercial motor vehicle" means a passenger vehicle 
        that has seats for more than 20 passengers in addition to the 
        driver, or a power unit that (1) has a gross weight in excess of 
        26,000 pounds, or (2) has three or more axles regardless of 
        weight, or (3) when used in combination, the weight of the 
        combination exceeds 26,000 pounds gross vehicle weight; motor 
        vehicle used, designed, or maintained for transportation of 
        persons or property that: 
           (1) has two axles and a gross vehicle weight or registered 
        gross vehicle weight exceeding 26,000 pounds; or 
           (2) has three or more axles regardless of weight; or 
           (3) is used in combination, when the weight of such 
        combination exceeds 26,000 pounds gross vehicle or registered 
        gross vehicle weight.  "Commercial motor vehicle" does not 
        include recreational vehicles; 
           (c) "motor carrier" means a person who operates or causes 
        to be operated a commercial motor vehicle on a highway in this 
        state; 
           (d) "operation" means operation of commercial motor 
        vehicles whether loaded or empty, whether for compensation or 
        not for compensation, and whether owned by or leased to the 
        motor carrier who operates them or causes them to be operated; 
        and 
           (e) "highway" means the entire width between the boundary 
        lines of every way publicly maintained when part of the highway 
        is open for the public to travel on. 
           Sec. 15.  [REPEALER.] 
           Minnesota Statutes 1994, section 296.25, subdivision 1a, is 
        repealed. 
           Sec. 16.  [EFFECTIVE DATE.] 
           Sections 1 to 6, 8 to 10, and 12 to 15 are effective the 
        day following final enactment.  Section 11 is effective for 
        gasoline or special fuel purchased after July 1, 1996. 
                                   ARTICLE 6 
                              MINNESOTACARE TAXES 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        295.50, subdivision 3, is amended to read: 
           Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
        amounts received in money or otherwise by: 
           (1) a resident hospital for patient services; 
           (2) a resident surgical center for patient services; 
           (3) a nonresident hospital for patient services provided to 
        patients domiciled in Minnesota; 
           (4) a nonresident surgical center for patient services 
        provided to patients domiciled in Minnesota; 
           (5) a resident health care provider, other than a staff 
        model health carrier, for patient services; 
           (6) a nonresident health care provider for patient services 
        provided to an individual domiciled in Minnesota or patient 
        services provided in Minnesota; 
           (7) (4) a wholesale drug distributor for sale or 
        distribution of legend drugs that are delivered:  (i) to a 
        Minnesota resident by a wholesale drug distributor who is a 
        nonresident pharmacy directly, by common carrier, or by mail; or 
        (ii) in Minnesota by the wholesale drug distributor, by common 
        carrier, or by mail, unless the legend drugs are delivered to 
        another wholesale drug distributor who sells legend drugs 
        exclusively at wholesale.  Legend drugs do not include 
        nutritional products as defined in Minnesota Rules, part 
        9505.0325; 
           (8) (5) a staff model health plan company as gross premiums 
        for enrollees, copayments, deductibles, coinsurance, and fees 
        for patient services covered under its contracts with groups and 
        enrollees; and 
           (9) (6) a resident pharmacy for medical supplies, 
        appliances, and equipment; and 
           (10) a nonresident pharmacy for medical supplies, 
        appliances, and equipment provided to consumers domiciled in 
        Minnesota or delivered into Minnesota. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        295.50, subdivision 4, is amended to read: 
           Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
        provider" means: 
           (1) a person furnishing any or all of the following goods 
        or services directly to a patient or consumer:  medical, 
        surgical, optical, visual, dental, hearing, nursing services, 
        drugs, medical supplies, medical appliances, laboratory, 
        diagnostic or therapeutic services, or any goods and services 
        not listed above that qualify for reimbursement under the 
        medical assistance program provided under chapter 256B.  For 
        purposes of this clause, "directly to a patient or consumer" 
        includes goods and services provided in connection with 
        independent medical examinations under section 65B.56 or other 
        examinations for purposes of litigation or insurance claims; 
           (2) a staff model health plan company; or 
           (3) an ambulance service required to be licensed. 
           (b) Health care provider does not include hospitals, 
        nursing homes licensed under chapter 144A or licensed in any 
        other jurisdiction, pharmacies, surgical centers, bus and 
        taxicab transportation, or any other providers of transportation 
        services other than ambulance services required to be licensed, 
        supervised living facilities for persons with mental retardation 
        or related conditions, licensed under Minnesota Rules, parts 
        4665.0100 to 4665.9900, residential care homes licensed under 
        chapter 144B, board and lodging establishments providing only 
        custodial services that are licensed under chapter 157 and 
        registered under section 157.031 to provide supportive services 
        or health supervision services, adult foster homes as defined in 
        Minnesota Rules, part 9555.5050 9555.5105, day training and 
        habilitation services for adults with mental retardation and 
        related conditions as defined in section 252.41, subdivision 3, 
        and boarding care homes, as defined in Minnesota Rules, part 
        4655.0100. 
           Sec. 3.  Minnesota Statutes 1994, section 295.50, 
        subdivision 6, is amended to read: 
           Subd. 6.  [HOME HEALTH CARE SERVICES.] "Home health care 
        services" are services: 
           (1) defined under the state medical assistance program as 
        home health agency services provided by a home health agency, 
        personal care services and supervision of personal care 
        services, private duty nursing services, and waivered services; 
        and 
           (2) provided at a recipient's residence, if the recipient 
        does not live in a hospital, nursing facility, as defined in 
        section 62A.46, subdivision 3, or intermediate care facility for 
        persons with mental retardation as defined in section 256B.055, 
        subdivision 12, paragraph (d). 
           Sec. 4.  Minnesota Statutes 1994, section 295.51, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BUSINESS TRANSACTIONS IN MINNESOTA.] A 
        hospital, surgical center, pharmacy, or health care provider is 
        subject to tax under sections 295.50 to 295.58 295.59 if it is 
        "transacting business in Minnesota."  A hospital, surgical 
        center, pharmacy, or health care provider is transacting 
        business in Minnesota only if it: 
           (1) maintains an office in Minnesota used in the trade or 
        business of providing patient services or medical supplies, 
        appliances, or equipment; 
           (2) has employees, representatives, or independent 
        contractors conducting business in Minnesota related to the 
        trade or business of providing patient services or medical 
        supplies, appliances, or equipment; 
           (3) regularly provides patient services or medical 
        supplies, appliances, or equipment to customers that receive the 
        services in Minnesota; 
           (4) regularly solicits business from potential customers in 
        Minnesota.  A hospital, surgical center, pharmacy, or health 
        care provider is presumed to regularly solicit business within 
        Minnesota if it receives gross receipts for patient services or 
        medical supplies, appliances, or equipment from 20 or more 
        patients domiciled in Minnesota in a calendar year; 
           (5) regularly performs services outside Minnesota the 
        benefits of which are consumed in Minnesota; 
           (6) owns or leases tangible personal or real property 
        physically located in Minnesota and used in the trade or 
        business of providing patient services or medical supplies, 
        appliances, or equipment; or 
           (7) receives medical assistance payments from the state of 
        Minnesota. maintains contacts with or presence in the state of 
        Minnesota sufficient to permit taxation of gross revenues 
        received for patient services under the United States 
        Constitution. 
           Sec. 5.  Minnesota Statutes 1994, section 295.51, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [NEXUS IN MINNESOTA.] A wholesale drug 
        distributor has nexus in Minnesota if its contacts with or 
        presence in Minnesota is sufficient to satisfy the requirements 
        of the United States Constitution. 
           Sec. 6.  Minnesota Statutes 1994, section 295.52, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [TAX COLLECTION.] A wholesale drug distributor 
        with nexus in Minnesota, who is not subject to tax under 
        subdivision 3, on all or a particular transaction, is required 
        to collect the tax imposed under subdivision 4, from the 
        purchaser of the drugs and give the purchaser a receipt for the 
        tax paid.  The tax collected shall be remitted to the 
        commissioner in the manner prescribed by section 295.55, 
        subdivision 3. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 
        295.53, subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
        are excluded from the gross revenues subject to the hospital, 
        surgical center, or health care provider taxes under sections 
        295.50 to 295.57: 
           (1) payments received for services provided under the 
        Medicare program, including payments received from the 
        government, and organizations governed by sections 1833 and 1876 
        of title XVIII of the federal Social Security Act, United States 
        Code, title 42, section 1395, and enrollee deductibles, 
        coinsurance, and copayments, whether paid by the Medicare 
        enrollee or by a Medicare supplemental coverage as defined in 
        section 62A.011, subdivision 3, clause (10).  Payments for 
        services not covered by Medicare are taxable; 
           (2) medical assistance payments including payments received 
        directly from the government or from a prepaid plan; 
           (3) payments received for home health care services; 
           (4) payments received from hospitals or surgical centers 
        for goods and services on which liability for tax is imposed 
        under section 295.52 or the source of funds for the payment is 
        exempt under clause (1), (2), (7), (8), or (10); 
           (5) payments received from health care providers for goods 
        and services on which liability for tax is imposed under this 
        chapter or the source of funds for the payment is exempt under 
        clause (1), (2), (7), (8), or (10); 
           (6) amounts paid for legend drugs, other than nutritional 
        products, to a wholesale drug distributor reduced by 
        reimbursements received for legend drugs under clauses (1), (2), 
        (7), and (8); 
           (7) payments received under the general assistance medical 
        care program including payments received directly from the 
        government or from a prepaid plan; 
           (8) payments received for providing services under the 
        MinnesotaCare program including payments received directly from 
        the government or from a prepaid plan and enrollee deductibles, 
        coinsurance, and copayments.  For purposes of this clause, 
        coinsurance means the portion of payment that the enrollee is 
        required to pay for the covered service; 
           (9) payments received by a resident health care provider or 
        the wholly owned subsidiary of a resident health care provider 
        for care provided outside Minnesota to a patient who is not 
        domiciled in Minnesota; 
           (10) payments received from the chemical dependency fund 
        under chapter 254B; 
           (11) payments received in the nature of charitable 
        donations that are not designated for providing patient services 
        to a specific individual or group; 
           (12) payments received for providing patient services 
        incurred through a formal program of health care research 
        conducted in conformity with federal regulations governing 
        research on human subjects.  Payments received from patients or 
        from other persons paying on behalf of the patients are subject 
        to tax; 
           (13) payments received from any governmental agency for 
        services benefiting the public, not including payments made by 
        the government in its capacity as an employer or insurer; 
           (14) payments received for services provided by community 
        residential mental health facilities licensed under Minnesota 
        Rules, parts 9520.0500 to 9520.0690, community support programs 
        and family community support programs approved under Minnesota 
        Rules, parts 9535.1700 to 9535.1760, and community mental health 
        centers as defined in section 245.62, subdivision 2; 
           (15) government payments received by a regional treatment 
        center; 
           (16) payments received for hospice care services; 
           (17) payments received by a resident health care 
        provider or the wholly owned subsidiary of a resident health 
        care provider for medical supplies, appliances and equipment 
        delivered outside of Minnesota; 
           (18) payments received by a post-secondary educational 
        institution from student tuition, student activity fees, health 
        care service fees, government appropriations, donations, or 
        grants.  Fee for service payments and payments for extended 
        coverage are taxable; and 
           (19) payments received for services provided by:  assisted 
        living programs and congregate housing programs. 
           (b) Payments received by wholesale drug distributors for 
        prescription drugs sold directly to veterinarians or veterinary 
        bulk purchasing organizations are excluded from the gross 
        revenues subject to the wholesale drug distributor tax under 
        sections 295.50 to 295.59. 
           Sec. 8.  Minnesota Statutes 1995 Supplement, section 
        295.53, subdivision 5, is amended to read: 
           Subd. 5.  [EXEMPTIONS FOR PHARMACIES.] (a) Pharmacies may 
        exclude from their gross revenues subject to tax payments for 
        medical supplies, appliances, and devices that are exempt under 
        subdivision 1, clauses (1), (2), (4), (5), (7), (8), and (13). 
           (b) Resident Pharmacies may exclude from their gross 
        revenues subject to tax payments received for medical supplies, 
        appliances, and equipment delivered outside of Minnesota. 
           Sec. 9.  Minnesota Statutes 1994, section 295.54, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TAXES PAID TO ANOTHER STATE.] A resident 
        hospital, resident surgical center, pharmacy, or resident health 
        care provider who is liable for that has paid taxes payable to 
        another state or province or territory of Canada measured by 
        gross receipts revenues and is subject to tax under section 
        sections 295.52 to 295.59 on the same gross revenues is entitled 
        to a credit for the tax legally due and paid to another state or 
        province or territory of Canada to the extent of the lesser of 
        (1) the tax actually paid to the other state or province or 
        territory of Canada, or (2) the amount of tax imposed by 
        Minnesota on the gross receipts revenues subject to tax in the 
        other taxing jurisdictions. 
           Sec. 10.  Minnesota Statutes 1994, section 295.54, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PHARMACY CREDIT.] A resident pharmacy may claim 
        a quarterly credit against the total amount of tax the pharmacy 
        owes during that quarter under section 295.52, subdivision 1b, 
        as provided in this subdivision.  The credit shall equal two 
        percent of the amount paid by the pharmacy to a wholesale drug 
        distributor subject to tax under section 295.52, subdivision 3, 
        for legend drugs delivered by the pharmacy outside of Minnesota. 
        If the amount of the credit exceeds the tax liability of the 
        pharmacy under section 295.52, subdivision 1b, the commissioner 
        shall provide the pharmacy with a refund equal to the excess 
        amount. 
           Sec. 11.  Minnesota Statutes 1994, section 295.54, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [WHOLESALE DRUG DISTRIBUTOR CREDIT.] A wholesale 
        drug distributor who has paid taxes to another state or province 
        or territory of Canada measured by gross revenues or sales and 
        is subject to tax under sections 295.52 to 295.59 on the same 
        gross revenues or sales is entitled to a credit for the tax 
        legally due and paid to another state or province or territory 
        of Canada to the extent of the lesser of (1) the tax actually 
        paid to the other state or province or territory of Canada or 
        (2) the amount of tax imposed by Minnesota on the gross revenues 
        or sales subject to tax in the other taxing jurisdictions. 
           Sec. 12.  [LEGISLATIVE INTENT.] 
           Section 3 is intended to clarify, rather than change, the 
        original intent of the statute amended. 
           Sec. 13.  [REPEALER.] 
           Minnesota Statutes 1994, section 295.50, subdivisions 8, 9, 
        9a, 11, 12, and 12a, are repealed.  
           Sec. 14.  [EFFECTIVE DATES.] 
           Sections 1, 3, 4, 7 to 10, 12, and 13 are effective the day 
        following final enactment. 
           Sections 5, 6, and 11 are effective for tax periods 
        beginning on or after January 1, 1997. 
                                   ARTICLE 7 
                              ECONOMIC DEVELOPMENT 
           Section 1.  Minnesota Statutes 1994, section 13.99, 
        subdivision 97a, is amended to read: 
           Subd. 97a.  [ECONOMIC DEVELOPMENT DATA.] Access to 
        preliminary information submitted to the commissioner of trade 
        and economic development under sections 469.142 to 469.151 or 
        sections 469.152 to 469.165 is limited under sections 469.150 
        and section 469.154, subdivision 2. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        216B.161, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the following terms have the meanings given them in 
        this subdivision. 
           (b) "Area development rate" means a rate schedule 
        established by a utility that provides customers within an area 
        development zone service under a base utility rate schedule, 
        except that charges may be reduced from the base rate as agreed 
        upon by the utility and the customer consistent with this 
        section. 
           (c) "Area development zone" means a contiguous or 
        noncontiguous area designated by an authority or municipality 
        for development or redevelopment and within which one of the 
        following conditions exists: 
           (1) obsolete buildings not suitable for improvement or 
        conversion or other identified hazards to the health, safety, 
        and general well-being of the community; 
           (2) buildings in need of substantial rehabilitation or in 
        substandard condition; or 
           (3) low values and damaged investments. 
           (d) "Authority" means a rural development financing 
        authority established under sections 469.142 to 469.150 469.151; 
        a housing and redevelopment authority established under sections 
        469.001 to 469.047; a port authority established under sections 
        469.048 to 469.068; an economic development authority 
        established under sections 469.090 to 469.108; a redevelopment 
        agency as defined in sections 469.152 to 469.165; the iron range 
        resources and rehabilitation board established under section 
        298.22; a municipality that is administering a development 
        district created under sections 469.124 to 469.134 or any 
        special law; a municipality that undertakes a project under 
        sections 469.152 to 469.165, except a town located outside the 
        metropolitan area as defined in section 473.121, subdivision 2, 
        or with a population of 5,000 persons or less; or a municipality 
        that exercises the powers of a port authority under any general 
        or special law.  
           (e) "Municipality" means a city, however organized, and, 
        with respect to a project undertaken under sections 469.152 to 
        469.165, "municipality" has the meaning given in sections 
        469.152 to 469.165, and, with respect to a project undertaken 
        under sections 469.142 to 469.151 or a county or multicounty 
        project undertaken under sections 469.004 to 469.008, also 
        includes any county. 
           Sec. 3.  Minnesota Statutes 1995 Supplement, section 
        273.1399, subdivision 6, is amended to read: 
           Subd. 6.  [EXEMPT DISTRICTS.] (a) The provisions of this 
        section do not apply to exempt tax increment financing districts 
        as specified by this subdivision. 
           (b) A tax increment financing district for an ethanol 
        production facility that satisfies all of the following 
        requirements is exempt: 
           (1) The district is an economic development district, that 
        qualifies under section 469.176, subdivision 4c, paragraph (a), 
        clause (1). 
           (2) The facility is certified by the commissioner of 
        agriculture to qualify for state payments for ethanol 
        development under section 41A.09 to the extent funds are 
        available. 
           (3) Increments from the district are used only to finance 
        the qualifying ethanol development project located in the 
        district or to pay for administrative costs of the district. 
           (4) The district is located outside of the seven-county 
        metropolitan area, as defined in section 473.121. 
           (5) The tax increment financing plan was approved by a 
        resolution of the county board. 
           (6) The exemption provided by this paragraph applies until 
        the first year after the total amount of increment for the 
        district exceeds $1,500,000.  The county auditor shall notify 
        the commissioner of revenue of the expiration of the exemption 
        by June 1 of the year in which the auditor projects the revenues 
        from increments will exceed $1,500,000.  On or before the 
        expiration of the exemption, the municipality may elect to make 
        a qualifying local contribution under paragraph (d) in lieu of 
        the state aid reduction. 
           (c) A qualified housing district is exempt. 
           (d)(1) A district is exempt if the municipality elects at 
        the time of approving the tax increment financing plan for the 
        district to make a qualifying local contribution.  To qualify 
        for the exemption in each year, the authority or the 
        municipality must make a qualifying local contribution equal to 
        the listed percentages of increment from the district or 
        subdistrict: 
           (1) (A) for an economic development district, a housing 
        district, or a renewal and renovation district, ten percent; 
           (2) (B) for a redevelopment district, a mined underground 
        space district, a hazardous substance subdistrict, or a soils 
        condition district, 7.5 five percent. 
           (2) If the municipality elects to make a qualifying 
        contribution and fails to make the required contribution for a 
        year, the state aid reduction applies for the year.  The state 
        aid reduction equals the greater of (A) the required local 
        contribution or (B) the amount of the aid reduction that applies 
        under subdivision 3.  For a district exempt under paragraph (b), 
        no qualifying local contribution is required for years in which 
        the district is exempt. 
           The maximum local contribution for all districts in the 
        municipality is limited to (3)(A) If the sum of required local 
        contributions for all districts in the municipality exceeds two 
        percent of city net tax capacity as defined in section 477A.011, 
        subdivision 20, for a year, the municipality's total required 
        local contribution for that year is limited to two percent of 
        net tax capacity to qualify for the exemption under this 
        subdivision.  The municipality may allocate the contribution 
        among the districts on which it has made elections as it 
        determines appropriate. 
           (B) If a municipality makes an election under this 
        subdivision for a district in a year in which item (A) applies, 
        a minimum annual qualifying contribution must be made for the 
        district equal to the lesser of 0.25 percent of city net tax 
        capacity or three percent of increment revenues.  This minimum 
        contribution applies for the life of the district for each year 
        that the restriction in item (A) applies and is in addition to 
        the contribution required by item (A). 
           (4) The amount of the local contribution must be made out 
        of unrestricted money of the authority or municipality, such as 
        the general fund, a property tax levy, or a federal or a state 
        grant-in-aid which may be spent for general government 
        purposes.  The local contribution may not be made, directly or 
        indirectly, with tax increments or developer payments as defined 
        under section 469.1766.  The local contribution must be used to 
        pay project costs and cannot be used for general government 
        purposes or for improvements or costs that the authority or 
        municipality planned to incur absent the project.  The authority 
        or municipality may request contributions from other local 
        government entities that will benefit from the district's 
        activities.  These contributions reduce the local contribution 
        required of the municipality or authority by this paragraph.  
        Cities, counties, towns, and schools may contribute to paying 
        these costs, notwithstanding any other law to the contrary. 
           (5) The municipality may make a local contribution in 
        excess of the required contribution for a year.  If it does so, 
        the municipality may credit the excess to a local contribution 
        account for the district.  The balance in the account may be 
        used to meet the requirements for qualifying local contributions 
        for later years.  No interest or investment earnings may be 
        credited or imputed to the account, except those (A) actually 
        paid by the municipality out of its unrestricted funds or by 
        another person or entity, other than a developer as used in 
        section 469.1766, and (B) used as required for a qualifying 
        local contribution. 
           (6) If the state contributes to the project costs through a 
        direct grant or similar incentive, the required local 
        contribution is reduced by one-half of the dollar amount of the 
        state grant or other similar incentive. 
           Sec. 4.  Minnesota Statutes 1995 Supplement, section 
        273.1399, subdivision 7, is amended to read: 
           Subd. 7.  [EXEMPTION; AGRICULTURAL PROCESSING FACILITIES.] 
        The provisions of this section do not apply to a tax increment 
        financing district that satisfies all of the following 
        requirements: 
           (1) the district is established to construct or expand an 
        agricultural processing facility; 
           (2) the construction or expansion of the facility creates, 
        or upon completion will create, a minimum of five permanent 
        full-time jobs; 
           (3) the district is located outside of the seven-county 
        metropolitan area, as defined in section 473.121; 
           (4) the tax increment financing plan was approved by a 
        resolution of the county board; 
           (5) the municipality approving the tax increment financing 
        plan agrees to make at least a five percent local contribution 
        that meets the requirements of subdivision 6, paragraph (d), 
        including except that a required rate of five percent applies 
        and the limitation to two percent of city tax capacity under 
        subdivision 6, paragraph (d), clause (3) also applies; and 
           (6) the commissioner of agriculture has certified to the 
        county auditor that the requirements of this subdivision have 
        been met. 
           The exemption provided by this subdivision applies until 
        the first year after the total amount of increment for the 
        district exceeds $1,500,000.  The county auditor shall notify 
        the commissioner of revenue of the expiration of the exemption 
        by June 1 of the year in which the auditor projects the revenues 
        from increment will exceed $1,500,000. 
           For purposes of this section, "agricultural processing 
        facility" means land, buildings, structures, fixtures, and 
        improvements used or operated primarily for the processing or 
        production of marketable products from agricultural crops, 
        including waste and residues from agricultural crops, and 
        including livestock products, poultry products, and wood 
        products, but not the raising of livestock or poultry. 
           Sec. 5.  Minnesota Statutes 1994, section 469.167, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DURATION.] The designation of an area as an 
        enterprise zone shall be effective for seven years after the 
        date of designation, except that enterprise zones in border 
        cities eligible to receive allocations for tax reductions under 
        section 469.169, subdivisions 7 and 8, and under section 
        469.171, subdivision 6a or 6b, shall be effective until these 
        allocations have been expended terminated by resolution adopted 
        by the city in which the border city enterprise zone is located. 
           Sec. 6.  Minnesota Statutes 1995 Supplement, section 
        469.169, subdivision 9, is amended to read: 
           Subd. 9.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In addition 
        to tax reductions authorized in subdivisions 7 and 8, the 
        commissioner may allocate $1,100,000 for tax reductions to 
        border city enterprise zones in cities located on the western 
        border of the state, and $300,000 to the border city enterprise 
        zone in the city of Duluth.  The commissioner shall make 
        allocations to zones in cities on the western border by 
        evaluating which cities' applications for allocations relate to 
        business prospects that have the greatest positive economic 
        impact.  Allocations made under this subdivision may be used for 
        tax reductions as provided in section 469.171, or other offsets 
        of taxes imposed on or remitted by businesses located in the 
        enterprise zone, but only if the municipality determines that 
        the granting of the tax reduction or offset is necessary in 
        order to retain a business within or attract a business to the 
        zone.  Limitations on allocations under section 469.169, 
        subdivision 7, do not apply to this allocation.  Enterprise 
        zones that receive allocations under this subdivision may 
        continue in effect for purposes of those allocations through 
        December 31, 1995. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 
        469.169, subdivision 10, is amended to read: 
           Subd. 10.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In 
        addition to tax reductions authorized in subdivisions 7, 8, and 
        9, the commissioner may allocate $1,500,000 for tax reductions 
        to border city enterprise zones in cities located on the western 
        border of the state.  The commissioner shall make allocations to 
        zones in cities on the western border on a per capita basis.  
        Allocations made under this subdivision may be used for tax 
        reductions as provided in section 469.171, or other offsets of 
        taxes imposed on or remitted by businesses located in the 
        enterprise zone, but only if the municipality determines that 
        the granting of the tax reduction or offset is necessary in 
        order to retain a business within or attract a business to the 
        zone.  Limitations on allocations under section 469.169, 
        subdivision 7, do not apply to this allocation.  Enterprise 
        zones that receive allocations under this subdivision may 
        continue in effect for purposes of those allocations through 
        December 31, 1996. 
           Sec. 8.  Minnesota Statutes 1994, section 469.173, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REPEALER.] Sections 469.169, 469.171, 469.172, 
        and this section are effective for border city enterprise zones 
        until the enterprise zone is terminated by resolution adopted by 
        the city in which the border city enterprise zone is located.  
        For all other enterprise zones, sections 469.169, 469.171, 
        469.172, and this section are repealed effective December 31, 
        1996.  
           Sec. 9.  Minnesota Statutes 1994, section 469.174, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTHORITY.] "Authority" means a rural 
        development financing authority created pursuant to sections 
        469.142 to 469.150 469.151; a housing and redevelopment 
        authority created pursuant to sections 469.001 to 469.047; a 
        port authority created pursuant to sections 469.048 to 469.068; 
        an economic development authority created pursuant to sections 
        469.090 to 469.108; a redevelopment agency as defined in 
        sections 469.152 to 469.165; a municipality that is 
        administering a development district created pursuant to 
        sections 469.124 to 469.134 or any special law; a municipality 
        that undertakes a project pursuant to sections 469.152 to 
        469.165, except a town located outside the metropolitan area or 
        with a population of 5,000 persons or less; or a municipality 
        that exercises the powers of a port authority pursuant to any 
        general or special law.  
           Sec. 10.  Minnesota Statutes 1995 Supplement, section 
        469.174, subdivision 4, is amended to read: 
           Subd. 4.  [CAPTURED NET TAX CAPACITY.] "Captured net tax 
        capacity" means the amount by which the current net tax capacity 
        of a tax increment financing district or an extended subdistrict 
        exceeds the original net tax capacity, including the value of 
        property normally taxable as personal property by reason of its 
        location on or over property owned by a tax-exempt entity.  In 
        the case of a hazardous substance subdistrict, except an 
        extended subdistrict, "captured net tax capacity" means the 
        amount, if any, by which the lesser of (1) the original net tax 
        capacity or (2) the current net tax capacity of the portion of 
        the tax increment financing district overlying the subdistrict 
        exceeds the original net tax capacity of the subdistrict. 
           Sec. 11.  Minnesota Statutes 1995 Supplement, section 
        469.175, subdivision 1, is amended to read: 
           Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] (a) A tax 
        increment financing plan shall contain:  
           (1) a statement of objectives of an authority for the 
        improvement of a project; 
           (2) a statement as to the development program for the 
        project, including the property within the project, if any, that 
        the authority intends to acquire; 
           (3) a list of any development activities that the plan 
        proposes to take place within the project, for which contracts 
        have been entered into at the time of the preparation of the 
        plan, including the names of the parties to the contract, the 
        activity governed by the contract, the cost stated in the 
        contract, and the expected date of completion of that activity; 
           (4) identification or description of the type of any other 
        specific development reasonably expected to take place within 
        the project, and the date when the development is likely to 
        occur; 
           (5) estimates of the following:  
           (i) cost of the project, including administration expenses; 
           (ii) amount of bonded indebtedness to be incurred; 
           (iii) sources of revenue to finance or otherwise pay public 
        costs; 
           (iv) the most recent net tax capacity of taxable real 
        property within the tax increment financing district and within 
        any subdistrict; 
           (v) the estimated captured net tax capacity of the tax 
        increment financing district at completion; and 
           (vi) the duration of the tax increment financing district's 
        and any subdistrict's existence; 
           (6) statements of the authority's alternate estimates of 
        the impact of tax increment financing on the net tax capacities 
        of all taxing jurisdictions in which the tax increment financing 
        district is located in whole or in part.  For purposes of one 
        statement, the authority shall assume that the estimated 
        captured net tax capacity would be available to the taxing 
        jurisdictions without creation of the district, and for purposes 
        of the second statement, the authority shall assume that none of 
        the estimated captured net tax capacity would be available to 
        the taxing jurisdictions without creation of the district or 
        subdistrict; 
           (7) identification and description of studies and analyses 
        used to make the determination set forth in subdivision 3, 
        clause (2); and 
           (8) identification of all parcels to be included in the 
        district or any subdistrict. 
           (b) For a housing district, redevelopment district, or a 
        hazardous substance subdistrict, the authority may elect in the 
        tax increment financing plan to provide for the identification 
        of a minimum market value in the plan, development agreement, or 
        assessment agreement, and provide that increment is first 
        received by the authority when (1) the market value of the 
        improvements as determined by the assessor reaches or exceeds 
        the minimum market value, or (2) four years has elapsed from the 
        date of certification of the original net tax capacity of the 
        taxable real property in the district or subdistrict by the 
        county auditor, whichever is earlier. 
           Sec. 12.  Minnesota Statutes 1995 Supplement, section 
        469.175, subdivision 5, is amended to read: 
           Subd. 5.  [ANNUAL DISCLOSURE.] (a) For all tax increment 
        financing districts, whether created prior or subsequent to 
        August 1, 1979, on or before July 1 of each year, the authority 
        shall submit to the county board, the county auditor, the school 
        board, state auditor and, if the authority is other than the 
        municipality, the governing body of the municipality, a report 
        of the status of the district.  The report shall include the 
        following information:  the amount and the source of revenue in 
        the account, the amount and purpose of expenditures from the 
        account, the amount of any pledge of revenues, including 
        principal and interest on any outstanding bonded indebtedness, 
        the original net tax capacity of the district and any 
        subdistrict, the captured net tax capacity retained by the 
        authority, the captured net tax capacity shared with other 
        taxing districts, the tax increment received, and any additional 
        information necessary to demonstrate compliance with any 
        applicable tax increment financing plan. 
           (b) An annual statement showing the tax increment received 
        and expended in that year, the original net tax capacity, 
        captured net tax capacity, amount of outstanding bonded 
        indebtedness, the amount of the district's and any subdistrict's 
        increments paid to other governmental bodies, the amount paid 
        for administrative costs, the sum of increments paid, directly 
        or indirectly, for activities and improvements located outside 
        of the district, and any additional information the authority 
        deems necessary shall be published in a newspaper of general 
        circulation in the municipality.  If the fiscal disparities 
        contribution for the district is computed under section 469.177, 
        subdivision 3, paragraph (a), the annual statement must disclose 
        that fact and indicate the amount of increased property tax 
        imposed on other properties in the municipality as a result of 
        the fiscal disparities contribution.  The commissioner of 
        revenue shall prescribe the form of this statement and the 
        method for calculating the increased property taxes.  The 
        authority must publish the annual statement for a year no later 
        than July 1 of the next year.  The authority must provide a copy 
        of the annual statement to the state auditor by the time it 
        submits it for publication.  
           Sec. 13.  Minnesota Statutes 1995 Supplement, section 
        469.175, subdivision 6, is amended to read: 
           Subd. 6.  [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, on or before July 1, a financial report in compliance 
        with paragraph (a).  Copies of the report must also be provided 
        to the county and school district boards 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). 
           (c) The annual financial report must also include the 
        following items: 
           (1) the original net tax capacity of the district and any 
        subdistrict; 
           (2) the captured net tax capacity of the district, 
        including the amount of any captured net tax capacity shared 
        with other taxing districts; 
           (3) for the reporting period and for the duration of the 
        district, the amount budgeted under the tax increment financing 
        plan, and the actual amount expended for, at least, the 
        following categories: 
           (i) acquisition of land and buildings through condemnation 
        or purchase; 
           (ii)  site improvements or preparation costs; 
           (iii) installation of public utilities, parking facilities, 
        streets, roads, sidewalks, or other similar public improvements; 
           (iv) administrative costs, including the allocated cost of 
        the authority; 
           (v) public park facilities, facilities for social, 
        recreational, or conference purposes, or other similar public 
        improvements; 
           (4) for properties sold to developers, the total cost of 
        the property to the authority and the price paid by the 
        developer; and 
           (5) the amount of increments rebated or paid to developers 
        or property owners for privately financed improvements or other 
        qualifying costs. 
           (d) The reporting requirements imposed by this subdivision 
        apply to districts certified before, on, and after August 1, 
        1979. 
           Sec. 14.  Minnesota Statutes 1995 Supplement, section 
        469.176, subdivision 2, is amended to read: 
           Subd. 2.  [EXCESS TAX INCREMENTS.] (a) In any year in which 
        the tax increment exceeds the amount necessary to pay the costs 
        authorized by the tax increment financing plan, including the 
        amount necessary to cancel any tax levy as provided in section 
        475.61, subdivision 3, the authority shall use the excess amount 
        to do any of the following:  (1) prepay any outstanding bonds, 
        (2) discharge the pledge of tax increment therefor, (3) pay into 
        an escrow account dedicated to the payment of such bond, or (4) 
        return the excess amount to the county auditor who shall 
        distribute the excess amount to the municipality, county, and 
        school district in which the tax increment financing district is 
        located in direct proportion to their respective local tax 
        rates.  The county auditor must report to the commissioner of 
        children, families, and learning the amount of any excess tax 
        increment distributed to a school district within 30 days of the 
        distribution. 
           (b) The amounts distributed to a city or county must be 
        deducted from the levy limits of the governmental unit for the 
        following year.  In calculating the levy limit base for later 
        years, the amount deducted must be treated as a local government 
        aid payment. 
           Sec. 15.  Minnesota Statutes 1994, section 469.176, 
        subdivision 4f, is amended to read: 
           Subd. 4f.  [INTEREST REDUCTION.] Revenues derived from tax 
        increment may be used to finance the costs of an interest 
        reduction program operated pursuant to section 469.012, 
        subdivisions 7 to 10, or pursuant to other law granting interest 
        reduction authority and power by reference to those subdivisions 
        only under the following conditions:  (1) tax increments may not 
        be collected for a program for a period in excess of 12 15 years 
        after the date of the first interest rate reduction payment for 
        the program, (2) tax increments may not be used for an interest 
        reduction program, if the proceeds of bonds issued pursuant to 
        section 469.178 after December 31, 1985, have been or will be 
        used to provide financial assistance to the specific project 
        which would receive the benefit of the interest reduction 
        program, and (3) tax increments may not be used to finance an 
        interest reduction program for owner-occupied single-family 
        dwellings.  
           Sec. 16.  Minnesota Statutes 1995 Supplement, section 
        469.176, subdivision 7, is amended to read: 
           Subd. 7.  [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The 
        authority may not request inclusion in a tax increment financing 
        district and the county auditor may not certify the original tax 
        capacity of the following: 
           (1) a parcel or a part of a parcel that qualified under the 
        provisions of section 273.111 or 273.112 or chapter 473H for 
        taxes payable in any of the five calendar years before the 
        filing of the request for certification, if the parcel is 
        located in the metropolitan area, as defined in section 473.121; 
        or 
           (2) a parcel or a part of a parcel, located outside of the 
        metropolitan area, as defined in section 473.121, that qualified 
        under the provisions of section 273.111 or 273.112 for taxes 
        payable in any of the five calendar years before the request for 
        certification, if the district is not only for 
           (1) a district in which 85 percent or more of the planned 
        buildings and facilities (determined on the basis of square 
        footage) are for manufacturing or production of tangible 
        personal property, including processing resulting in the change 
        in condition of the property; or 
           (2) a qualified housing district as defined in section 
        273.1399, subdivision 1. 
           Sec. 17.  Minnesota Statutes 1994, section 469.1761, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIREMENT IMPOSED.] In order for a tax 
        increment financing district to qualify as a housing district, 
        the income limitations provided in this section must be 
        satisfied.  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, or other subsidies.  The provisions of this 
        section do not apply (1) to interest reduction programs, 
        provided that the duration of the district is limited to 12 
        years from the collection of the first increment or (2) to 
        districts located in a targeted area as defined in section 
        462C.02, subdivision 9, clause (e). 
           Sec. 18.  Minnesota Statutes 1994, section 471.88, 
        subdivision 14, is amended to read: 
           Subd. 14.  [HOUSING AND REDEVELOPMENT AUTHORITY LOCAL 
        DEVELOPMENT ORGANIZATION.] (a) For the purposes of this 
        subdivision: 
           (1) "local development organization" means a housing and 
        redevelopment authority, economic development authority, 
        community action program, port authority, or private consultant; 
        and 
           (2) "government unit" has the meaning given in section 
        471.59, subdivision 1. 
           (b) When a county or multicounty housing and redevelopment 
        authority local development organization administers a loan or 
        grant program for individual residential property owners within 
        the geographical boundaries of a government unit by an agreement 
        entered into by the government unit and the housing and 
        redevelopment authority local development organization, an 
        officer of the government unit may apply for a loan or grant 
        from the housing and redevelopment authority local development 
        organization.  If an officer applies for a loan or grant, the 
        officer must disclose as part of the official minutes of a 
        public meeting of the governmental unit that the officer has 
        applied for a loan or grant. 
           Sec. 19.  Minnesota Statutes 1994, section 473.608, is 
        amended by adding a subdivision to read: 
           Subd. 12a.  [REVENUE BONDS.] (a) The commission may issue 
        general airport revenue bonds, special facilities bonds, and 
        passenger facility charge bonds to fund: 
           (1) airports and air navigation facilities; 
           (2) other capital improvements at airports managed by the 
        commission; 
           (3) noise abatement and natural resource protection 
        measures, regardless of location and ownership; 
           (4) transportation and parking improvements related to 
        airports managed by the commission, regardless of location; and 
           (5) the refund of any outstanding obligations of the 
        commission. 
           The commission may secure the bonds with available revenue 
        in accordance with generally accepted public financial practices 
        under a resolution of the commission or trust indenture for the 
        bonds.  The bonds may not be secured by the full faith and 
        credit of the commission or a pledge of the taxing authority of 
        the commission or of any city in or for which the commission has 
        been created. 
           (b) The commission shall notify the commissioner of 
        finance, the chair of the taxes committee of the House of 
        Representatives, and the chair of the taxes and tax laws 
        committee of the Senate of any proposal to issue bonds under 
        this subdivision and provide them an opportunity to review the 
        proposal. 
           (c) The commission may obligate itself to establish, 
        revise, and collect rates, fees, charges, and rentals for all 
        airport and air navigation facilities used by or made available 
        to any person, firm, association, or corporation to produce 
        revenues sufficient: 
           (1) to pay principal and interest on all obligations of the 
        commission; 
           (2) to fund reserves for the bonds; 
           (3) to pay other commission expenses in accordance with law.
           (d) (1) Any pledge of revenues under this section is 
        subordinate to the pledge of current revenues to cancel taxes 
        levied for general obligation revenue bonds issued under section 
        473.665. 
           (2) Subject to clause (1), if the bonds meet the conditions 
        of section 473.667, subdivision 7, the commission may pledge 
        revenues to the revenue bonds issued under this subdivision on a 
        parity with the pledge of revenues to general obligation revenue 
        bonds issued under section 473.667.  The pledge of revenues to 
        revenue bonds issued under this subdivision may be prior to the 
        obligation under section 473.667, subdivision 6, to repay any 
        deficiency taxes levied for general obligation revenue bonds. 
           (3) The commission may pledge revenues of any discrete 
        facility or portions of the airport and air navigation 
        facilities of the commission to the bonds.  The commission may 
        establish reserves from any available funds or the proceeds of 
        the bonds and may make other covenants as it deems necessary to 
        protect the holders of the bonds.  Passenger facility charge 
        bonds may pledge receipts from passenger facility charges 
        separately or together with a pledge of other revenues. 
           (e) The commission may use any powers under chapter 475, 
        except the power to issue general obligation bonds. 
           Sec. 20.  Laws 1995, chapter 264, article 5, section 40, 
        subdivision 1, is amended to read:  
           Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
        provisions of Minnesota Statutes, section 469.175, subdivision 
        4, paragraph (b), the economic development authority of the city 
        of Morris may, within one year after the effective date of this 
        section, enlarge the geographic area of tax increment financing 
        district No. 5 to include a parcel identified as lot 2, block 2 
        3, Stevens county - Morris industrial park.  The district is 
        established under and subject to Minnesota Statutes, sections 
        469.174 to 469.178, except: 
           (1) the duration limit for the district and enlarged area 
        is December 31, 2005; and 
           (2) the buildings to be constructed in the enlarged 
        geographic area of the district may, notwithstanding the 
        provisions of Minnesota Statutes, section 469.176, subdivision 
        4c, include space necessary for and related to the manufacturing 
        facility located on parcels contiguous to the district.  The 
        maximum space for nonmanufacturing uses may not exceed 40 
        percent of the square footage of the buildings.  This test may 
        be applied based on a two-year test period. 
           Sec. 21.  Laws 1995, chapter 264, article 5, section 44, 
        subdivision 4, is amended to read: 
           Subd. 4.  [AUTHORITY.] For housing replacement projects in 
        the city of Crystal, "authority" means the Crystal economic 
        development authority.  For housing replacement projects in the 
        city of Fridley, "authority" means the housing and redevelopment 
        authority in and for the city of Fridley or a successor in 
        interest.  For housing replacement projects in the city of 
        Minneapolis, "authority" means the Minneapolis community 
        development agency.  For housing replacement projects in the 
        city of St. Paul, "authority" means the St. Paul housing and 
        redevelopment authority.  For housing replacement projects in 
        the city of Duluth, "authority" means the Duluth economic 
        development authority.  For housing replacement projects in the 
        city of Richfield, "authority" is the authority as defined in 
        Minnesota Statutes, section 469.174, subdivision 2, that is 
        designated by the governing body of the city of Richfield.  
           Sec. 22.  Laws 1995, chapter 264, article 5, section 45, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREATION OF PROJECTS.] (a) An authority 
        may create a housing replacement project under sections 44 to 
        47, as provided in this section. 
           (b) For the cities of Crystal and, Fridley, and Richfield, 
        the authority may designate up to 50 parcels in the city to be 
        included in a housing replacement district.  No more than ten 
        parcels may be included in year one of the district, with up to 
        ten additional parcels added to the district in each of the 
        following nine years.  For the cities of Minneapolis and, St. 
        Paul, and Duluth, each authority may designate up to 100 parcels 
        in the city to be included in a housing replacement district 
        over the life of the district.  The only parcels that may be 
        included in a district are (1) vacant sites, (2) parcels 
        containing vacant houses, or (3) parcels containing houses that 
        are structurally substandard, as defined in Minnesota Statutes, 
        section 469.174, subdivision 10.  
           (c) The city in which the authority is located must pay at 
        least 25 percent of the housing replacement project costs from 
        its general fund, a property tax levy, or other unrestricted 
        money, not including tax increments. 
           (d) The housing replacement district plan must have as its 
        sole object the acquisition of parcels for the purpose of 
        preparing the site to be sold for market rate housing.  As used 
        in this section, "market rate housing" means housing that has a 
        market value that does not exceed 150 percent of the average 
        market value of single-family housing in that municipality. 
           Sec. 23.  [SOUTH ST. PAUL; TAX INCREMENT DISTRICT.] 
           Subdivision 1.  [EXPENDITURE OF TAX 
        INCREMENTS.] Notwithstanding the provisions of Minnesota 
        Statutes, section 469.176, subdivision 1c, the city of South St. 
        Paul may expend tax increments derived from the Concord street 
        redevelopment tax increment financing district to pay debt 
        service on or defease general obligation tax increment bonds 
        issued to refund tax increment bonds of the city issued before 
        April 1, 1990, provided the average maturity of the refunding 
        bonds does not exceed the average maturity of the refunded bonds 
        by more than two years and provided further that the refunding 
        does not increase the amount of debt service to be paid after 
        April 1, 2001. 
           Subd. 2.  [EFFECTIVE DATE.] Subdivision 1 is effective upon 
        compliance by the South St. Paul city council with Minnesota 
        Statutes, section 645.021, subdivision 2. 
           Sec. 24.  [CITY OF WOODBURY; TAX INCREMENT FINANCING 
        DISTRICT.] 
           Subdivision 1.  [EXTENSION.] Notwithstanding the provisions 
        of Minnesota Statutes, section 469.176, subdivision 1b, tax 
        increment may be paid until December 31, 2006, from the 
        following parcels identified as parcel identification numbers, 
        plat and parcel numbers in an existing tax increment economic 
        development district in the city of Woodbury:  73701-2025; 
        72003-3350; 72003-2350; 72003-2250; 72003-2100; 73701-2050; 
        73701-2075; 73701-2100; 73701-2125; 73701-2150; 72003-2550; 
        72003-2500; 73445-2000; and 73445-2050. 
           Subd. 2.  [EFFECTIVE DATE.] Subdivision 1 is effective upon 
        compliance with Minnesota Statutes, sections 469.1782, 
        subdivision 2, and 645.021, subdivision 3. 
           Sec. 25.  [CITY OF BRECKENRIDGE; TAX INCREMENT DISTRICT.] 
           Subdivision 1.  [EXTENSION.] Notwithstanding the provisions 
        of Minnesota Statutes, section 469.176, subdivision 1c, the 
        duration of the city of Breckenridge tax increment financing 
        district number 1-1 may be extended by resolution of the 
        Breckenridge city council until April 1, 2009.  The provisions 
        of Minnesota Statutes, sections 469.1782, subdivision 1, and 
        273.1399, subdivision 8, do not apply to the extension of the 
        duration of the district under this section. 
           Subd. 2.  [EFFECTIVE DATE; APPROVAL.] Subdivision 1 is 
        effective the day after compliance with Minnesota Statutes, 
        sections 469.1782, subdivision 2, and 645.021, subdivision 2. 
           Sec. 26.  [CITY OF MOUNTAIN IRON HOUSING AND REDEVELOPMENT 
        AUTHORITY; TAX INCREMENT DISTRICTS.] 
           Subdivision 1.  [ORIGINAL NET TAX 
        CAPACITY.] Notwithstanding the provisions of the county 
        auditor's certification issued pursuant to Minnesota Statutes, 
        section 469.177, the original net tax capacity of property 
        described as plat number 71, parcel numbers 1212, 1213, and 1223 
        in tax increment financing district No. 6 located in the city of 
        Mountain Iron shall be deemed $6,407 as of January 1, 1996. 
           Subd. 2.  [EXTENSION.] Notwithstanding the provisions of 
        Minnesota Statutes, section 469.176, subdivision 4c, the housing 
        and redevelopment authority in and for the city of Mountain Iron 
        may collect and expend tax increments generated by the Sawmill 
        restaurant project in tax increment financing district No. 6 
        located in the city of Mountain Iron after August 7, 1999, for 
        eligible activities within the district.  The authority under 
        this subdivision expires August 7, 2004. 
           Subd. 3.  [LOCAL APPROVAL.] Subdivisions 1 and 2 are 
        effective upon compliance with Minnesota Statutes, sections 
        469.1782, and 645.021, subdivision 3. 
           Sec. 27.  [AUTHORITY TO ELECT LOCAL CONTRIBUTIONS.] 
           Notwithstanding the provisions of Laws 1995, chapter 264, 
        article 5, section 49, a city may elect to make local 
        contributions under Minnesota Statutes, section 273.1399, 
        subdivision 6, paragraph (d), in lieu of the state aid 
        reduction, if the following conditions are satisfied: 
           (1) the district was certified after April 30, 1994; 
           (2) the municipality and the authority agree to decertify 
        the district at least three years before the expiration of the 
        district's duration limit under Minnesota Statutes, section 
        469.176, subdivision 1b; 
           (3) the municipality makes an irrevocable election to make 
        local contributions and to be governed by clause (2) by December 
        31, 1996; and 
           (4) the authority notifies the commissioner of revenue of 
        the election by January 31, 1997. 
           Sec. 28.  [DEFINITIONS.] 
           Subdivision 1.  [AUTHORITY.] "Authority" means the Brooklyn 
        Park economic development authority. 
           Subd. 2.  [DISTRESSED RENTAL PROPERTIES.] (a) "Distressed 
        rental properties," "distressed rental property," "property," or 
        "properties" means those multifamily rental projects located 
        within the city of Brooklyn Park which meet: 
           (1) both of the following: 
           (i) are 20 years old or older at the time of the request 
        for certification; and 
           (ii) are determined by the authority to be in need of 
        substantial rehabilitation or demolition; and 
           (2) one of the following: 
           (i) have a vacancy rate as established by rental records of 
        the owner, which has averaged at least 25 percent over the 
        five-year period preceding the request for certification; 
           (ii) have an estimated market value determined by the 
        assessor which has decreased by at least 20 percent over the 
        five-year period preceding the request for certification; or 
           (iii) were converted from home ownership to rental housing. 
           (b) Buildings located on contiguous properties, which are 
        commonly owned and financed, and which were constructed at 
        approximately the same time constitute a single distressed 
        rental property. 
           Subd. 3.  [CAPTURED NET TAX CAPACITY.] "Captured net tax 
        capacity" means the amount by which the current net tax capacity 
        of the distressed housing district exceeds the original net tax 
        capacity including the value of property normally taxable as 
        personal property by reason of its location or over property 
        owned by a tax-exempt entity.  
           Subd. 4.  [ORIGINAL NET TAX CAPACITY.] With respect to 
        distressed rental properties which according to the distressed 
        housing district plan are to be rehabilitated, "original net tax 
        capacity" means (i) the net tax capacity of the properties as 
        certified by the commissioner of revenue for the appropriate 
        assessment year minus (ii) all estimated costs associated with 
        rehabilitating said properties as set forth in the distressed 
        housing plan, but (iii) not less than zero.  With respect to 
        distressed rental properties which according to the distressed 
        housing district plan are to be demolished, "original net tax 
        capacity" means the net tax capacity of the land only as 
        certified by the commissioner of revenue for the appropriate 
        assessment year.  For purposes of this subdivision, the 
        appropriate assessment year shall be the previous assessment 
        year, provided that a request by the authority for certification 
        has been made to the county auditor by June 30.  If the request 
        for certification is filed after June 30, the appropriate 
        assessment year shall be the current assessment year.  
           Subd. 5.  [SUBSTANTIAL REHABILITATION.] "Substantial 
        rehabilitation" means rehabilitation, as defined in Minnesota 
        Statutes, section 462C.02, subdivision 8, in an amount of at 
        least $7,000 per unit.  
           Sec. 29.  [ESTABLISHMENT OF A DISTRESSED HOUSING DISTRICT.] 
           Subdivision 1.  [CREATION.] The authority may establish a 
        distressed housing district within the city which may contain 
        not more than five distressed rental properties.  The distressed 
        rental properties need not be contiguous and may all be included 
        when establishing the district, or may be added from time to 
        time as described in subdivision 4, clause (2), provided that no 
        distressed rental property shall be added to the district after 
        five years from the date of the initial request for 
        certification of the district.  
           Subd. 2.  [TAX INCREMENT.] Minnesota Statutes, section 
        469.177, subdivisions 1, paragraphs (a), (d), and (g), 1a, and 3 
        to 10, apply to the computation of tax increment for the 
        distressed housing district created under sections 28 to 31.  
           Subd. 3.  [DISTRESSED HOUSING DISTRICT PLAN.] To establish 
        a distressed housing district, the authority shall adopt a 
        distressed housing plan that contains: 
           (1) a description of the distressed rental properties to be 
        included in the district to the extent known at the time the 
        plan is prepared, including identification of the current and 
        proposed owner of the property.  If the maximum allowable number 
        of distressed rental properties are not included in the district 
        initially, a description of the criteria that will be used by 
        the authority to select properties to be included later; 
           (2) a general description of the types of substantial 
        rehabilitation or demolition which will be undertaken, and by 
        whom; and 
           (3) estimates of the following: 
           (i) total cost of substantial rehabilitation or demolition 
        for each distressed rental property included in the district, 
        including public administrative costs and relocation expenses; 
           (ii) sources of revenue, public and private, to pay the 
        estimated costs of substantial rehabilitation or demolition; 
           (iii) the most recent net tax capacity of each distressed 
        rental property included in the district; 
           (iv) the estimated captured net tax capacity of each 
        distressed rental property included in the district, at 
        completion; and 
           (v) the authority's alternate estimates of the impact of 
        the distressed housing district on the net tax capacities of all 
        taxing jurisdictions in which the distressed housing 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 distressed housing 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 distressed housing 
        district.  
           Subd. 4.  [PROCEDURE.] Minnesota Statutes, section 469.175, 
        subdivisions 3 to 6a, apply to the establishment and operation 
        of the distressed housing district created under sections 28 to 
        31, except as follows: 
           (1) the determination required in Minnesota Statutes, 
        section 469.175, subdivision 3, clause (1), is not required; and 
           (2) the addition to the district of distressed rental 
        properties not identified in the original distressed housing 
        district plan is not a modification of the plan requiring 
        notice, public hearing, findings, or approval if the addition of 
        the distressed rental properties is consistent with the criteria 
        described in subdivision 3, clause (1).  
           Subd. 5.  [LOCAL CONTRIBUTION.] The city of Brooklyn Park 
        must pay at least five percent of the distressed housing 
        district project costs from its general fund, a property tax 
        levy, or other unrestricted money, not including tax increments. 
           Sec. 30.  [LIMITATIONS.] 
           Subdivision 1.  [DURATION.] Tax increment generated by each 
        distressed rental property included in the district shall cease 
        to be paid to the authority after the expiration of 15 years 
        from the receipt by the county of the first tax increment from 
        that property.  
           Subd. 2.  [USE.] (a) All tax increment received by the 
        authority from the district shall be used in accordance with the 
        distressed housing district plan.  
           (b) Tax increment may be used to pay the costs of: 
           (1) acquiring title to or an ownership interest in a 
        distressed rental property; 
           (2) relocation of tenants residing in a distressed rental 
        property; 
           (3) demolition of all or a part of a distressed rental 
        property; 
           (4) substantial rehabilitation of a distressed rental 
        property; 
           (5) public improvements associated with the substantial 
        rehabilitation or demolition of distressed housing properties; 
        and 
           (6) the costs of the authority in administering the 
        creation and operation of the district.  
           (c) The authority may pay the costs of substantial 
        rehabilitation or demolition of the distressed rental properties 
        directly, through the issuance and sale of obligations pursuant 
        to Minnesota Statutes, section 469.178, by means of loans or 
        grants to the owners of such properties, or through the exercise 
        of any authority contained in Minnesota Statutes, sections 
        469.090 to 469.1081. 
           (d) Tax increment received by the authority in excess of 
        that needed to pay the costs described in paragraph (b), clause 
        (2), shall be deposited into the housing account established by 
        the authority pursuant to Laws 1994, chapter 587, article 9, 
        section 20. 
           Subd. 3.  [RELOCATION.] As part of the acquisition of any 
        distressed rental property by the authority, the authority shall 
        comply with the provisions of the Uniform Relocation Assistance 
        and Real Property Acquisition Policies Act of 1970, United 
        States Code, title 42, sections 4601 to 4655, and regulations 
        adopted thereunder and existing on the effective date of this 
        act.  The authority shall also retain a professional relocation 
        consultant to assist families in finding suitable replacement 
        housing. 
           Sec. 31.  [APPLICABILITY OF OTHER LAWS.] 
           References in Minnesota Statutes to tax increment financing 
        districts created and tax increment generated under Minnesota 
        Statutes, sections 469.174 to 469.179, except for references in 
        Minnesota Statutes, section 273.1399, include the distressed 
        housing district and tax increment subject to sections 28 to 31. 
        Minnesota Statutes, sections 469.174 to 469.179, apply only to 
        the extent specified in sections 28 to 31.  The distressed 
        housing district does not have a longer duration than permitted 
        by general law for purposes of Minnesota Statutes, section 
        469.1782. 
           Sec. 32.  [ENTERPRISE ZONE ALLOCATION; CITY OF DULUTH.] 
           In addition to tax reductions authorized by other law, the 
        commissioner of trade and economic development may allocate 
        $300,000 for tax reductions pursuant to Minnesota Statutes, 
        section 469.171, subdivision 1, for a financial services 
        facility of at least 100,000 square feet located in the city of 
        Duluth.  This amount is not subject to any funding limitations 
        or maximum allocation limitations under Minnesota Statutes, 
        section 469.169, subdivision 7.  The tax reductions may be 
        provided until the allocation under this section has been 
        expended. 
           Sec. 33.  [APPLICATION.] 
           Section 19 applies in Anoka, Carver, Dakota, Hennepin, 
        Ramsey, Scott, and Washington counties. 
           Sec. 34.  [REPEALER.] 
           Minnesota Statutes 1994, sections 13.99, subdivision 97; 
        and 469.150, are repealed. 
           Sec. 35.  [EFFECTIVE DATE.] 
           Sections 3 and 4 are effective for all tax increment 
        financing districts and subdistricts for which an election was 
        or is made under Minnesota Statutes, section 273.1399, 
        subdivision 6, paragraph (d), except the amendment in section 3 
        adding paragraph (d), clause (3), item (B) applies to elections 
        made after the day following final enactment.  
           Sections 5 to 8 are effective the day following final 
        enactment for border city enterprise zones existing on that date.
           Section 12 is effective beginning for annual statements 
        required to be published for calendar year 1995.  
           Sections 10, 11, 13, and 14 are effective the day following 
        final enactment and apply to all tax increment financing 
        districts for which the request for certification was made after 
        August 1, 1979.  
           Sections 15 and 17 are effective for districts for which 
        the request for certification is made after April 30, 1996.  For 
        districts for which the request for certification was made 
        before May 1, 1996, the governing body of the development 
        authority may elect, by resolution, to be governed by the 
        provisions of sections 15 and 17.  The election is irrevocable 
        and must be made no later than December 31, 1996. 
           Notwithstanding the provisions of Minnesota Statutes, 
        section 469.1782, subdivision 2, section 20 is effective without 
        local approval on the effective date of Laws 1995, chapter 264, 
        article 5, section 40. 
           Sections 21 and 22 are effective for the city of Duluth on 
        the day the chief clerical officer of the city of Duluth 
        complies with Minnesota Statutes, section 645.021, subdivision 3 
        and are effective for the city of Richfield on the day the chief 
        clerical officer of the city of Richfield complies with 
        Minnesota Statutes, section 645.021, subdivision 3. 
           Sections 28 to 31 are effective the day following final 
        enactment and upon compliance by the governing body of Brooklyn 
        Park with Minnesota Statutes, section 645.021, subdivision 3. 
                                   ARTICLE 8
                            SPECIAL TAXING DISTRICTS 
           Section 1.  [103D.729] [WATER MANAGEMENT DISTRICT.] 
           Subdivision 1.  [WATER MANAGEMENT DISTRICT.] A watershed 
        district may establish a water management district or districts 
        in the territory within the watershed, for the purpose of 
        collecting revenues and paying the costs of projects initiated 
        under section 103B.231, 103D.601, 103D.605, 103D.611, or 
        103D.730. 
           Subd. 2.  [PROCEDURE.] A watershed district may establish a 
        water management district only by amendment to its plan in 
        accordance with section 103D.411, or 103B.231 for watershed 
        districts in the metropolitan area, and compliance with 
        subdivisions 3 and 4.  The amendment shall describe with 
        particularity the territory or the area to be included in the 
        water management district, the amount of the necessary charges, 
        the methods used to determine charges, and the length of time 
        the water management district will remain in force.  After 
        adoption the amendment shall be filed with the county auditor 
        and county recorder of each county affected by the water 
        management district.  The water management district may be 
        dissolved by the procedure prescribed for the establishment of 
        the water management district. 
           Subd. 3.  [NOTIFICATION.] The managers shall, ten days 
        prior to a hearing or decision on projects implemented under 
        this section, provide notice to the city, town, or county within 
        the affected area.  The city, town, or county receiving notice 
        shall submit to the managers' concerns relating to the 
        implementation of the project.  The managers shall consider the 
        concerns of the city, town, or county in the decision on the 
        project. 
           Subd. 4.  [RESOLUTION OF DISPUTES.] Unresolved differences 
        between local governments and the managers may be brought before 
        the committee on dispute resolution under section 103B.101, 
        subdivision 10.  Within 45 days of receiving the request for 
        dispute resolution, the committee must consider the concerns of 
        the local government.  The committee has 30 days after meeting 
        to issue a recommendation to the board for final decision. 
           Sec. 2.  [103D.730] [STORM WATER FACILITIES.] 
           (a) Any watershed district may build, construct, 
        reconstruct, repair, enlarge, improve, or in any other manner 
        obtain storm water systems, including mains, holding areas and 
        ponds, and other appurtenances and related facilities for the 
        collection and disposal of storm water, maintain and operate the 
        facilities, and acquire by gift, purchase, lease, condemnation, 
        or otherwise any and all land and easements required for that 
        purpose. 
           (b) The authority granted is in addition to all other 
        powers with reference to the facilities otherwise granted by the 
        laws of this state or by this chapter. 
           Sec. 3.  Minnesota Statutes 1994, section 428A.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CITY.] "City" means the city in which the 
        special service district is authorized to be established under a 
        special law a home rule charter or statutory city. 
           Sec. 4.  Minnesota Statutes 1994, section 428A.01, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SPECIAL SERVICES.] "Special services" has the 
        meaning given in the city's enabling legislation. ordinance but 
        special services do may not include a service that is ordinarily 
        provided throughout the city from general fund revenues of the 
        city unless an increased level of the service is provided in the 
        special service district. 
           Sec. 5.  Minnesota Statutes 1994, section 428A.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ORDINANCE.] The governing body of the a 
        city may adopt an ordinance establishing a special service 
        district.  Only property that is classified under section 273.13 
        and used for commercial, industrial, or public utility purposes, 
        or is vacant land zoned or designated on a land use plan for 
        commercial or industrial use and located in the special service 
        district, may be subject to the charges imposed by the city on 
        the special service district.  Other types of property may be 
        included within the boundaries of the special service district 
        but are not subject to the levies or charges imposed by the city 
        on the special service district.  If 50 percent or more of the 
        market value of a parcel of property is classified under section 
        273.13 as commercial, industrial, or vacant land zoned or 
        designated on a land use plan for commercial or industrial use, 
        or public utility for the current assessment year, then the 
        entire market value of the property is subject to a service 
        charge based on net tax capacity for purposes of sections 
        428A.01 to 428A.10.  The ordinance shall describe with 
        particularity the area within the city to be included in the 
        district and the special services to be furnished in the 
        district.  The ordinance may not be adopted until after a public 
        hearing has been held on the question.  Notice of the hearing 
        shall include the time and place of hearing, a map showing the 
        boundaries of the proposed district, and a statement that all 
        persons owning property in the proposed district that would be 
        subject to a service charge will be given opportunity to be 
        heard at the hearing.  Within 30 days after adoption of the 
        ordinance under this subdivision, the governing body shall send 
        a copy of the ordinance to the commissioner of revenue. 
           Sec. 6. [428A.101] [SPECIAL SERVICE DISTRICT; SUNSET OF 
        SELF-EXECUTING PROVISIONS.] 
           The establishment of a new special service district after 
        June 30, 2001, must be made pursuant to enabling legislation 
        under Minnesota Statutes 1994, sections 428A.01 to 428A.10. 
           Sec. 7.  [428A.11] [HOUSING IMPROVEMENT AREAS; 
        DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] As used in sections 
        428A.11 to 428A.20, the terms defined in this section have the 
        meanings given them. 
           Subd. 2.  [CITY.] "City" means a home rule charter or 
        statutory city. 
           Subd. 3.  [ENABLING ORDINANCE.] "Enabling ordinance" means 
        the ordinance adopted by the city council establishing the 
        housing improvement area. 
           Subd. 4.  [HOUSING IMPROVEMENTS.] "Housing improvements" 
        has the meaning given in the city's enabling ordinance.  Housing 
        improvements may include improvements to common elements of a 
        condominium. 
           Subd. 5.  [HOUSING IMPROVEMENT AREA.] "Housing improvement 
        area" means a defined area within the city where housing 
        improvements are made or constructed and the costs of the 
        improvements are paid in whole or in part from fees imposed 
        within the area. 
           Subd. 6.  [HOUSING UNIT.] "Housing unit" means real 
        property and improvements thereon consisting of a one-dwelling 
        unit, or an apartment as described in chapter 515 or 515A, that 
        is occupied by a person or family for use as a residence. 
           Sec. 8.  [428A.12] [PETITION REQUIRED.] 
           No action may be taken under sections 428A.13 and 428A.14 
        unless owners of 25 percent or more of the housing units that 
        would be subject to fees in the proposed housing improvement 
        area file a petition requesting a public hearing on the proposed 
        action with the city clerk.  No action may be taken under 
        section 428A.14 to impose a fee unless owners of 25 percent or 
        more of the housing units subject to the proposed fee file a 
        petition requesting a public hearing on the proposed fee with 
        the city clerk or other appropriate official. 
           Sec. 9.  [428A.13] [ESTABLISHMENT OF HOUSING IMPROVEMENT 
        AREA.] 
           Subdivision 1.  [ORDINANCE.] The governing body of the city 
        may adopt an ordinance establishing a housing improvement area.  
        The ordinance must specifically describe the portion of the city 
        to be included in the area, the basis for the imposition of the 
        fees, and the number of years the fee will be in effect.  In 
        addition, the ordinance must include findings that without the 
        housing improvement area, the proposed improvements could not be 
        made by the condominium associations or housing unit owners, and 
        the designation is needed to maintain and preserve the housing 
        units within the housing improvement area.  The ordinance may 
        not be adopted until a public hearing has been held regarding 
        the ordinance.  The ordinance may be amended by the governing 
        body of the city, provided the governing body complies with the 
        public hearing notice provisions of subdivision 2.  Within 30 
        days after adoption of the ordinance under this subdivision, the 
        governing body shall send a copy of the ordinance to the 
        commissioner of revenue. 
           Subd. 2.  [PUBLIC HEARING.] The notice of public hearing 
        must include the time and place of hearing, a map showing the 
        boundaries of the proposed area, and a statement that all 
        persons owning housing units in the proposed area that would be 
        subject to a fee for housing improvements will be given an 
        opportunity to be heard at the hearing.  Notice of the hearing 
        must be given by publication in the official newspaper of the 
        city.  The public hearing must be held at least seven days after 
        the publication.  Not less than ten days before the hearing, 
        notice must also be mailed to the owner of each housing unit 
        within the proposed area.  For the purpose of giving mailed 
        notice, owners are those shown on the records of the county 
        auditor.  Other records may be used to supply the necessary 
        information.  At the public hearing a person owning property in 
        the proposed housing improvement area may testify on any issues 
        relevant to the proposed area.  The hearing may be adjourned 
        from time to time.  The ordinance establishing the area may be 
        adopted at any time within six months after the date of the 
        conclusion of the hearing by a vote of the majority of the 
        governing body of the city. 
           Subd. 3.  [PROPOSED HOUSING IMPROVEMENTS.] At the public 
        hearing held under subdivision 2, the city shall provide a 
        preliminary listing of the housing improvements to be made in 
        the area.  The listing shall identify those improvements, if 
        any, that are proposed to be made to all or a portion of the 
        common elements of a condominium.  The listing shall also 
        identify those housing units that have completed the proposed 
        housing improvements and are proposed to be exempted from a 
        portion of the fee.  In preparing the list the city shall 
        consult with the residents of the area and the condominium 
        associations. 
           Subd. 4.  [BENEFIT; OBJECTION.] Before the ordinance is 
        adopted or at the hearing at which it is to be adopted, the 
        owner of a housing unit in the proposed housing improvement area 
        may file a written objection with the city clerk asserting that 
        the owner's property should not be included in the area or 
        should not be subjected to a fee and objecting to the inclusion 
        of the housing unit in the area, for the reason that the 
        property would not benefit from the improvements. 
           The governing body shall make a determination of the 
        objection within 60 days of its filing.  Pending its 
        determination, the governing body may delay adoption of the 
        ordinance or it may adopt the ordinance with a reservation that 
        the landowner's property may be excluded from the housing 
        improvement area or fee when the determination is made. 
           Subd. 5.  [APPEAL TO DISTRICT COURT.] Within 30 days after 
        the determination of the objection, any person aggrieved, who is 
        not precluded by failure to object before or at the hearing, or 
        whose failure to object is due to a reasonable cause, may appeal 
        to the district court by serving a notice upon the mayor or city 
        clerk.  The notice shall be filed with the court administrator 
        of the district court within ten days after its service.  The 
        city clerk shall furnish the appellant a certified copy of the 
        findings and determination of the governing body.  The court may 
        affirm the action objected to or, if the appellant's objections 
        have merit, modify or cancel it.  If the appellant does not 
        prevail upon the appeal, the costs incurred are taxed to the 
        appellant by the court and judgment entered for them.  All 
        objections are deemed waived unless presented on appeal. 
           Sec. 10.  [428A.14] [IMPROVEMENT FEES AUTHORITY; NOTICE AND 
        HEARING.] 
           Subdivision 1.  [AUTHORITY.] Fees may be imposed by the 
        city on the housing units within the housing improvement area at 
        a rate, term, or amount sufficient to produce revenue required 
        to provide housing improvements in the area.  The fee can be 
        imposed on the basis of the tax capacity of the housing unit, or 
        the total amount of square footage of the housing unit, or a 
        method determined by the council and specified in the resolution.
        Before the imposition of the fees, a hearing must be held and 
        notice must be published in the official newspaper at least 
        seven days before the hearing and shall be mailed at least seven 
        days before the hearing to any housing unit owner subject to a 
        fee.  For purposes of this section, the notice must also include:
           (1) a statement that all interested persons will be given 
        an opportunity to be heard at the hearing regarding a proposed 
        housing improvement fee; 
           (2) the estimated cost of improvements including 
        administrative costs to be paid for in whole or in part by the 
        fee imposed under the ordinance; 
           (3) the amount to be charged against the particular 
        property; 
           (4) the right of the property owner to prepay the entire 
        fee; 
           (5) the number of years the fee will be in effect; and 
           (6) a statement that the petition requirements of section 
        428A.12 have either been met or do not apply to the proposed fee.
           Within six months of the public hearing, the city may adopt 
        a resolution imposing a fee within the area not exceeding the 
        amount expressed in the notice issued under this section. 
           Prior to adoption of the resolution approving the fee, the 
        condominium associations located in the housing improvement area 
        shall submit to the city a financial plan prepared by an 
        independent third party, acceptable to the city and 
        associations, that provides for the associations to finance 
        maintenance and operation of the common elements in the 
        condominium and a long-range plan to conduct and finance capital 
        improvements. 
           Subd. 2.  [LEVY LIMIT.] Fees imposed under this section are 
        not included in the calculation of levies or limits on levies 
        imposed under any law or charter. 
           Sec. 11.  [428A.15] [COLLECTION OF FEES.] 
           The city may provide for the collection of the housing 
        improvement fees according to the terms of section 428A.05. 
           Sec. 12.  [428A.16] [BONDS.] 
           At any time after a contract for the construction of all or 
        part of an improvement authorized under sections 428A.11 to 
        428A.20 has been entered into or the work has been ordered, the 
        governing body of the city may issue obligations in the amount 
        it deems necessary to defray in whole or in part the expense 
        incurred and estimated to be incurred in making the improvement, 
        including every item of cost from inception to completion and 
        all fees and expenses incurred in connection with the 
        improvement or the financing. 
           The obligations are payable primarily out of the proceeds 
        of the fees imposed under section 428A.14, or from any other 
        special assessments or revenues available to be pledged for 
        their payment under charter or statutory authority, or from two 
        or more of those sources.  The governing body may, by resolution 
        adopted prior to the sale of obligations, pledge the full faith, 
        credit, and taxing power of the city to assure payment of the 
        principal and interest if the proceeds of the fees in the area 
        are insufficient to pay the principal and interest.  The 
        obligations must be issued in accordance with chapter 475, 
        except that an election is not required, and the amount of the 
        obligations are not included in determination of the net debt of 
        the city under the provisions of any law or charter limiting 
        debt. 
           Sec. 13.  [428A.17] [ADVISORY BOARD.] 
           The governing body of the city may create and appoint an 
        advisory board for the housing improvement area in the city to 
        advise the governing body in connection with the planning and 
        construction of housing improvements.  In appointing the board, 
        the council shall consider for membership, members of 
        condominium associations located in the housing improvement 
        area.  The advisory board shall make recommendations to the 
        governing body to provide improvements or impose fees within the 
        housing improvement area.  Before the adoption of a proposal by 
        the governing body to provide improvements within the housing 
        improvement area, the advisory board of the housing improvement 
        area shall have an opportunity to review and comment upon the 
        proposal. 
           Sec. 14.  [428A.18] [VETO POWERS.] 
           Subdivision 1.  [NOTICE OF RIGHT TO FILE OBJECTIONS.] The 
        effective date of any ordinance or resolution adopted under 
        sections 428A.13 and 428A.14 must be at least 45 days after it 
        is adopted.  Within five days after adoption of the ordinance or 
        resolution, a summary of the ordinance or resolution shall be 
        mailed to the owner of each housing unit included in the 
        multiunit housing improvement area.  The mailing shall include a 
        notice that owners subject to a fee have a right to veto the 
        ordinance or resolution by filing the required number of 
        objections with the city clerk before the effective date of the 
        ordinance or resolution and that a copy of the ordinance or 
        resolution is on file with the city clerk for public inspection. 
           Subd. 2.  [REQUIREMENTS FOR VETO.] If residents of 35 
        percent or more of the housing units in the area subject to the 
        fee file an objection to the ordinance adopted by the city under 
        section 428A.13 with the city clerk before the effective date of 
        the ordinance, the ordinance does not become effective.  If 
        owners of 35 percent or more of the housing units' tax capacity 
        subject to the fee under section 428A.14 file an objection with 
        the city clerk before the effective date of the resolution, the 
        resolution does not become effective. 
           Sec. 15.  [428A.19] [ANNUAL REPORTS.] 
           Each condominium association located within the housing 
        improvement area must, by August 15 annually, submit a copy of 
        its audited financial statements to the city.  The city may 
        also, as part of the enabling ordinance, require the submission 
        of other relevant information from the associations. 
           Sec. 16.  [428A.20] [SPECIAL ASSESSMENTS.] 
           Within a housing improvement area, the governing body of 
        the city may, in addition to the fee authorized in section 
        428A.14, special assess housing improvements to benefited 
        property.  The governing body of the city may by ordinance adopt 
        regulations consistent with this section. 
           Sec. 17.  [428A.21] [SUNSET.] 
           No new housing improvement areas may be established under 
        sections 428A.11 to 428A.20 after June 30, 2001.  After June 30, 
        2001, a city may establish a housing improvement area, provided 
        that it receives enabling legislation authorizing the 
        establishment of the area. 
           Sec. 18.  Minnesota Statutes 1994, section 444.075, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [COLLECTION OF CHARGES BY WATERSHED 
        DISTRICTS.] (a) With respect to watershed districts, charges 
        established under section 103D.729 for the purpose of projects 
        under section 103D.730 may be billed and collected in a manner 
        the district shall determine, including certification to the 
        counties with territory within the district for collection by 
        the counties.  A county may bill and collect the charges in a 
        manner the county board shall determine or as described in 
        paragraph (b). 
           (b) On or before October 15 in each year, the district or 
        county board may certify to the county auditor all unpaid 
        outstanding charges, and a description of the lands against 
        which the charges arose.  The county auditor shall extend the 
        charges with interest not to exceed the interest rate provided 
        for in section 279.03, subdivision 1, upon the tax rolls of the 
        county for the taxes of the year in which the charge is filed.  
        For each year ending October 15 the charge with interest shall 
        be carried into the tax becoming due and payable in January of 
        the following year, and shall be enforced and collected in the 
        manner provided for the enforcement and collection of real 
        property taxes.  The charges, if not paid, shall become 
        delinquent and subject to the same penalties and the same rate 
        of interest as real property taxes. 
           (c) Any individual may appeal the charges under section 
        103D.535. 
           Sec. 19.  Laws 1963, chapter 118, section 1, subdivision 3, 
        is amended to read: 
           Subd. 3.  For the purpose of this act, the term 
        "municipality" shall include cities, villages, and towns of the 
        hospital district, which are as follows:  the cities of 
        Faribault, Nerstrand, and Morristown; and the townships of 
        Wheeling, Cannon City, Wells, Shieldsville, Morristown, Warsaw, 
        Walcott, and Richland. 
           Sec. 20.  Laws 1963, chapter 118, section 2, is amended to 
        read: 
           Sec. 2.  [HOSPITAL BOARD; APPOINTMENT; TERMS.] 
           Subdivision 1.  The hospital district shall be governed by 
        a board of directors of nine voting members, hereinafter called 
        "hospital board", who shall be residents of the district, 
        appointed by the county board committee described under 
        subdivision 4.  The members of the hospital board shall be 
        selected from the several municipalities forming a part of the 
        district, on the basis of population, so that, as nearly as 
        practicable, the most populous municipality shall have numerical 
        representation in proportion to its share of the total district 
        population. 
           Subd. 2.  One third of the members of the first hospital 
        board shall be appointed for a term to expire one year from May 
        1 next following such appointment, one third for a term to 
        expire two years from such date, and one third for a term to 
        expire three years from such date.  Successors to the original 
        board members shall each be appointed for terms of three years.  
        All members shall hold office until their successors are 
        appointed and qualify.  Terms of all members shall expire on May 
        1.  Members of the hospital board shall be appointed to a 
        three-year term, expiring on May 1.  Terms of office must be 
        staggered so that one-third of the positions are up for 
        appointment each year.  In case of a vacancy on the hospital 
        board, whether due to death, removal from the district 
        nonresidency, inability to serve, resignation, or other removal 
        for cause the county board, at its next regular or special 
        meeting, shall make an appointment to fill such vacancy shall be 
        made at a special meeting of the appointment committee for the 
        then unexpired term.  Tenure of each board member is limited to 
        three successive three-year terms, or a total of nine successive 
        years, but a member may be reappointed after one year without 
        board membership.  The hospital administrative staff shall 
        facilitate the appointment process, including an open 
        advertisement for hospital board vacancies. 
           Subd. 3.  In addition to voting members, the hospital board 
        may add ex officio members to the board, but without voting 
        privilege.  The hospital board shall adopt bylaws to provide 
        grounds and a procedure for removal of board members for cause 
        and may remove board members in accordance with the bylaws. 
           Subd. 4.  All members of the hospital board at the time the 
        hospital district is reorganized shall continue in office until 
        the members of the first board of the reorganized district are 
        appointed and qualify.  A five-member appointment committee of 
        elected officials representing the municipalities of the 
        hospital district shall be established each year.  Two members 
        of the appointing committee shall be selected by the Faribault 
        city council.  Two members of the appointing committee shall be 
        selected by the representatives of the other municipalities at 
        the hospital annual meeting.  One county commissioner member, 
        whose constituency is made up of at least one-third of the city 
        of Faribault, shall be selected by the Rice county board. 
           Sec. 21.  Laws 1963, chapter 118, section 4, is amended to 
        read: 
           Sec. 4.  [MEETINGS OF THE BOARD.] 
           Subdivision 1.  Regular meetings of the hospital board 
        shall be held at least once a month, at such time and place as 
        the board shall by resolution determine.  Special meetings may 
        be held at any time upon the call of the chairman or of any two 
        other members, upon written notice mailed to each member three 
        days prior to the meeting, or upon such other notice as the 
        board, by resolution, may provide, or without notice, if each 
        member is present or files with the secretary a written consent 
        to the holding of the meeting, which consent may be filed before 
        or after the meeting.  Any action within the authority of the 
        board may be taken by the vote of a majority of the members 
        present at a regular or adjourned meeting or at a duly called 
        special meeting if a quorum is present.  A majority of all the 
        members of the board shall constitute a quorum, but a lesser 
        number may meet and adjourn from time to time. 
           Subd. 2.  During the second half of each year, the hospital 
        board will convene an annual meeting to report to the citizens 
        of the hospital district on the state of the hospital.  The 
        agenda will include a report by the chief executive officer on 
        the status of the hospital, future plans for the hospital, and 
        the hospital's financial condition, including the need for 
        revenues derived from the property tax levy.  Each of the 
        municipalities shall send one official representative.  
           Sec. 22.  Laws 1963, chapter 118, section 6, is amended to 
        read: 
           Sec. 6.  [PAYMENT OF EXPENSES; TAXATION.] 
           Subdivision 1.  Expenses of acquisition, betterment, 
        administration, operation, and maintenance of any hospital, 
        including nursing home facilities, operated by the hospital 
        district, shall be paid from the revenue derived therefrom and, 
        to the extent necessary, from ad valorem taxes levied by the 
        hospital board upon all taxable property situated within the 
        district.  and, to the extent determined from time to time by 
        the county board of Rice county, from appropriations made by 
        said board in accordance with the provisions of Minnesota 
        Statutes 1961, Section 376.08, or any future laws authorizing 
        such appropriations.  Any moneys so appropriated by such county 
        board for the acquisition or betterment of facilities of the 
        hospital district may be transferred, in the discretion of the 
        hospital board, to a sinking fund for bonds issued for that 
        purpose.  The hospital board may agree to repay to the county 
        any sums so appropriated, out of the net revenues to be derived 
        from operation of its facilities, subject to such terms as may 
        be agreed upon.  No taxes levied by the hospital district in any 
        year, other than taxes levied for payment of bonded 
        indebtedness, shall exceed a total of five mills, provided that 
        such limitation may be exceeded if the amount proposed to be 
        levied in excess of such millage against property in any 
        municipality within the district added to the levy of such 
        municipality would not cause such municipal levy to exceed the 
        limitations of Minnesota Statutes 1961, Section 275.10 or 275.11.
           Subd. 2.  On or before October 10 September 15 of each year 
        the hospital board shall determine certify to the county auditor 
        the total amount required to be raised from ad valorem tax levy 
        in order to meet estimated expenses during the ensuing year and 
        shall cause such amount to be certified to the county auditor to 
        be extended upon the tax rolls. 
           Subd. 3.  The county auditor shall determine the millage 
        levy required and certify the same to the county treasurer for 
        collection with other taxes.  The county treasurer shall make 
        settlement of such taxes with the treasurer of the hospital 
        district in the same manner as other taxes are distributed to 
        political subdivisions.  The levies authorized by this section 
        shall be in addition to any other taxes authorized by law. 
           Subd. 4.  The hospital board may levy up to 1.70 percent of 
        the hospital district's net tax capacity without the approval of 
        the Faribault city council and the governing bodies of the other 
        municipalities in the hospital district.  Any amount of tax 
        levied by the hospital board in excess of 1.70 percent of the 
        hospital district's net tax capacity shall require ratification 
        by a majority vote of the Faribault city council and a majority 
        of the governing bodies of the other municipalities in the 
        hospital district.  At the option of the hospital board, the 
        vote may occur at a specially scheduled joint meeting of all the 
        municipalities of the hospital district, or at the hospital's 
        annual meeting. 
           Sec. 23.  Laws 1971, chapter 869, section 2, subdivision 2, 
        as amended by Laws 1973, chapter 632, section 1, is amended to 
        read: 
           Subd. 2.  [ALEXANDRIA, CITY OF; SANITARY SEWER BOARD.] 
        "Alexandria Lake Area Sanitary District" and "district" mean the 
        area over which the sanitary sewer board has jurisdiction which 
        shall include all that part of Douglas county, Minnesota, 
        described as follows, to-wit: 
           (a) all of the city of Alexandria, Minnesota; 
           (b) the NW 1/4 of section 3, the SW 1/4 of section 3 except 
        the SE 1/4 thereof, all of sections 4, 5, 6, 7, 8, 9, 10, 15, 
        16, 17, 18, 19, 20 and 21, section 22 except the E 1/2 of the SE 
        1/4 thereof, the NW 1/4 and the W 1/2 of the NE 1/4 of section 
        27, section 28 except the E 1/2 of the SE 1/4 thereof, all of 
        sections 29, 30, 31 and 32, and section 33 except for the E 1/2 
        of the E 1/2 thereof all in township 128 north, range 37 west, 
        excepting that part of the foregoing territory already included 
        within the district by reason of its being within the corporate 
        limits of the city of Alexandria; 
           (c) all that part of the W 1/2 of section 4 and all of 
        section 5 lying north of the north right of way line of 
        Interstate Highway I-94, the and N 1/2 of section 6 all in 
        township 127 north, range 37 west, excepting that part of the 
        foregoing territory already included within the district by 
        reason of its being within the corporate limits of the city of 
        Alexandria; 
           (d) the SW 1/4 of section 10, the SW 1/4 of section 14, the 
        NW 1/4 and the S 1/2 of section 15, the S 1/2 and the NW 1/4 of 
        section 16, the S 1/2 of the NE 1/4 and the S 1/2 of section 17, 
        the E 1/2 of the E 1/2 of section 19, all of section 20, the W 
        1/2 of section 21, the N 1/2 of the NW 1/4 of section 23, the W 
        1/2 of section 28, all of section 29, the S 1/2 of the SE 1/4 
        and the E 1/2 of the E 1/2 of section 30, the E 1/2 of the NE 
        1/4 and all of the SE 1/4 of section 31, all of sections 32 and 
        33 and the SW 1/4 of section 34 all in township 129 north, range 
        37 west; 
           (e) all of sections 1 and 2, section 10 except the N 1/2 of 
        the NW 1/4 and the NW 1/4 of the NE 1/4 thereof, all of sections 
        11, 12, 13 and 14, section 15 except the SW 1/4 and the W 1/2 of 
        the SE 1/4 thereof, the E 1/2 of the NE 1/4 and all of the SE 
        1/4 of section 22, the SE 1/4 of the SW 1/4 of section 22, all 
        of sections 23, 24, 25 and 26, section 27 except the W 1/2 of 
        the NW 1/4 thereof, the SE 1/4 of section 28, the NE 1/4 of the 
        SE 1/4 of section 32, the SW 1/4, the NW 1/4, the NE 1/4 of 
        section 33 except the SW 1/4 thereof, and the NW 1/4 and the NW 
        1/4 of the NE 1/4 of section 34 all in township 128 north range 
        38 west, excepting that part of the foregoing territory already 
        included within the district by reason of its being within the 
        corporate limits of the city of Alexandria; 
           (f) such other territory within or without Douglas county, 
        Minnesota as may be included within the district pursuant to 
        section 21. 
           Sec. 24.  Laws 1971, chapter 869, section 2, subdivision 
        14, is amended to read: 
           Subd. 14.  "Municipality" means any city, village or town 
        located in whole or in part in the district. 
           Sec. 25.  Laws 1971, chapter 869, section 2, subdivision 
        17, as added by Laws 1975, chapter 287, section 1, is amended to 
        read: 
           Subd. 17.  [ALEXANDRIA, CITY OF; LAKE AREA; SANITARY 
        SEWERS.] "Agricultural property" means land as is classified 
        agricultural land within the meaning of Minnesota Statutes, 
        Section 273.13, Subdivision 6 23, paragraph (c). 
           Sec. 26.  Laws 1971, chapter 869, section 3, subdivision 5, 
        is amended to read: 
           Subd. 5.  [TERMS OF OFFICE.] The term of each of the first 
        board members shall expire on January 1 in a calendar year to be 
        determined in accordance with subdivision 2 by the governing 
        body selecting such member, provided that such term shall not 
        expire any later than January 1, 1975.  Succeeding terms of all 
        board members shall be for one, two, three or four calendar 
        years to be determined in accordance with subdivision 2 by the 
        governing body selecting such member.  Terms shall expire on 
        January 1 of a calendar year, except that each member shall 
        serve until his successor has been duly selected and qualified. 
           Sec. 27.  Laws 1971, chapter 869, section 3, subdivision 6, 
        is amended to read: 
           Subd. 6.  [REMOVAL.] A board member may be removed by the 
        unanimous vote of the appointing governing body appointing him, 
        with or without cause, or by the governor for malfeasance or 
        nonfeasance in the performance of his official duties as 
        provided by Minnesota Statutes, Sections 351.03 and 351.04. 
           Sec. 28.  Laws 1971, chapter 869, section 3, subdivision 9, 
        is amended to read: 
           Subd. 9.  [BOARD MEMBERS' COMPENSATION.] Each board member, 
        except the chairman, shall be paid a per diem compensation of 
        $25 for meetings and for such other services in such amount as 
        are specifically authorized by the board, from time to time.  
        Per diem compensation shall not to exceed $1,000 $4,000 in any 
        one year.  The chairman shall be paid a per diem compensation of 
        $35 for meetings and for such other services as are specifically 
        authorized by the board, not to exceed $1,500 in any one year.  
        All members of the board shall be reimbursed for all reasonable 
        expenses incurred in the performance of their duties as 
        determined by the board. 
           Sec. 29.  Laws 1971, chapter 869, section 4, subdivision 1, 
        is amended to read: 
           Subdivision 1.  [ORGANIZATION; OFFICERS; MEETINGS; SEAL.] 
        After the selection and qualification of all board members, they 
        shall meet to organize the board at the call of any two board 
        members, upon seven days a notice by registered mail to the 
        remaining board members, at a time and place within the district 
        specified in the notice.  A majority of the members shall 
        constitute a quorum at that meeting and all other meetings of 
        the board, but a lesser number may meet and adjourn from time to 
        time and compel the attendance of absent members.  At the first 
        meeting the board shall select its officers as hereinafter 
        provided and conduct such other organizational business as may 
        be necessary.  Thereafter The board shall meet regularly at such 
        time and place as the board shall by resolution designate.  
        Special meetings may be held at any time upon call of the 
        chairman or any two members, upon written notice sent by mail to 
        each member at least three days prior to the meeting, or upon 
        such other notice as the board by resolution may provide, or 
        without notice if each member is present or files with the 
        secretary a written consent to the meeting either before or 
        after the meeting.  Except as otherwise provided in this act, 
        any action within the authority of the board may be taken by the 
        affirmative vote of a majority of the board may be taken by at a 
        regular or adjourned regular meeting or at a duly held special 
        meeting, but in any case only if a quorum is present.  All 
        meetings of the board shall be open to the public.  The board 
        may adopt a seal, which shall be officially and judicially 
        noticed, to authenticate instruments executed by its authority, 
        but omission of the seal shall not affect the validity of any 
        instruction. 
           Sec. 30.  Laws 1971, chapter 869, section 4, subdivision 2, 
        is amended to read: 
           Subd. 2.  [CHAIRMAN CHAIR.] The board shall elect 
        a chairman chair from its membership.  The term of the first 
        chairman of the board shall expire on January 1, 1973, and the 
        terms of successor chairmen chair shall expire on January 1 of 
        each succeeding year.  The chairman chair shall preside at all 
        meetings of the board, if present, and shall perform all other 
        duties and functions usually incumbent upon such an officer, and 
        all administrative functions assigned to him by the board.  The 
        board shall elect a vice chairman chair from its membership to 
        act for the chairman chair during his temporary absence or 
        disability. 
           Sec. 31.  Laws 1971, chapter 869, section 4, subdivision 5, 
        as amended by Laws 1973, chapter 632, section 2, is amended to 
        read: 
           Subd. 5.  [PUBLIC EMPLOYEES.] The executive director and 
        all persons employed by the executive director shall be public 
        employees, and shall have all the rights and duties conferred on 
        public employees under Minnesota Statutes, Sections 179.50 to 
        179.571.  The board may elect to have such employees become 
        members of either the public employees retirement association or 
        the Minnesota state retirement system 179A.01 to 179A.25.  The 
        compensation and conditions of employment of such employees 
        shall not be governed by any rule applicable to state employees 
        in the classified service nor to any of the provisions of 
        Minnesota Statutes, Chapter 15A, unless the board so provides. 
           Sec. 32.  Laws 1971, chapter 869, section 5, subdivision 1, 
        is amended to read: 
           Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
        adopt as its first a comprehensive plan for the collection, 
        treatment, and disposal of sewage in the district for such 
        designated period as the board deems proper and reasonable the 
        comprehensive plan adopted by the joint powers board heretofore 
        established for the Alexandria Lake Area Sanitary District by 
        agreement among local government units pursuant to Minnesota 
        Statutes, Section 471.59.  The board shall prepare and adopt 
        subsequent comprehensive plans for the collection, treatment and 
        disposal of sewage in the district for each such succeeding 
        designated period as the board deems proper and reasonable.  The 
        first plan, as modified by the board, and any subsequent plan 
        shall take into account the preservation and best and most 
        economic use of water and other natural resources in the area; 
        the preservation, use and potential for use of lands adjoining 
        waters of the state to be used for the disposal of sewage; and 
        the impact such a disposal system will have on present and 
        future land use in the area affected thereby.  Such plans shall 
        include the general location of needed interceptors and 
        treatment works, a description of the area that is to be served 
        by the various interceptors and treatment works, a long range 
        capital improvements program and such other details as the board 
        shall deem appropriate.  In developing the plans, the board 
        shall consult with persons designated for such purpose by 
        governing bodies of any municipal or public corporation or 
        governmental or political subdivision or agency within the 
        district to represent such entities and shall consider the data, 
        resources and input offered to the board by such entities and 
        any planning agency acting on behalf of one or more such 
        entities.  Each such plan, when adopted, shall be followed in 
        the district and may be revised as often as the board deems 
        necessary. 
           Sec. 33.  Laws 1971, chapter 869, section 5, subdivision 3, 
        is amended to read: 
           Subd. 3.  [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH 
        BOARD'S RESPONSIBILITIES.] As soon as practicable after the 
        adoption by the board of the first comprehensive plan, and 
        Before undertaking the construction of new sewers or other 
        disposal facilities or the substantial alteration or improvement 
        of any existing sewers or other disposal facilities, each local 
        government unit may, and shall if the construction or alteration 
        of any sewage disposal facilities is contemplated by such 
        government unit, adopt a similar comprehensive plan and program 
        for the collection, treatment and disposal of sewage for which 
        the local government unit is responsible, coordinated with the 
        board's comprehensive plan, and may revise the same as often as 
        it deems necessary.  Each such local plan or revision thereof 
        shall be submitted forthwith to the board for review and shall 
        be subject to the approval of the board as to those features of 
        the plan affecting the board's responsibilities as determined by 
        the board.  Any such features disapproved by the board shall be 
        modified in accordance with the board's recommendations.  Once 
        the board's plan is adopted, No such construction project 
        involving such features shall be undertaken by the local 
        government unit unless its governing body shall first find the 
        project to be in accordance with the government unit's 
        comprehensive plan and program as approved by the board.  Prior 
        to approval by the board of the comprehensive plan and program 
        of any local government unit in the district, no such 
        construction project shall be undertaken by such government unit 
        unless approval of the project is first secured from the board 
        as to those features of the project affecting the board's 
        responsibilities as determined by the board. 
           Sec. 34.  Laws 1971, chapter 869, section 8, is amended to 
        read: 
           Sec. 8.  [BUDGET.] 
           The board shall prepare and adopt, on or before October 1, 
        1971 and on or before October 1, 1972, and of each year 
        thereafter, a budget showing for the following calendar year or 
        other fiscal year determined by the board, sometimes referred to 
        in this act as the budget year, estimated receipts of money from 
        all sources, including but not limited to payments by each local 
        government unit, federal or state grants, taxes on property, and 
        funds on hand at the beginning of the year, and estimated 
        expenditures for: 
           (1) deferred payments under section 9, subdivisions 3 and 
        4; 
           (2) costs of operation, administration and maintenance of 
        the district disposal system; 
           (3) (2) cost of acquisition and betterment of the district 
        disposal system; and 
           (4) (3) debt service, including principal and interest, on 
        general obligation bonds and certificates issued pursuant to 
        section 13, obligations and debts assumed under section 6, 
        subdivisions 2 and 3, and any money judgments entered by a court 
        of competent jurisdiction.  Expenditures within these general 
        categories, and such others as the board may from time to time 
        determine, shall be itemized in such detail as the board shall 
        prescribe.  The board and its officers, agents and employees 
        shall not spend money for any purpose other than debt service 
        without having set forth such expense in the budget nor in 
        excess of the amount set forth in the budget therefor, and no 
        obligation to make such an expenditure shall be enforceable 
        except as the obligation of the person or persons incurring it; 
        provided that the board may amend the budget at any time by 
        transferring from one purpose to another any sums except money 
        for debt service and bond proceeds or by increasing expenditures 
        in any amount by which cash receipts during the budget year 
        actually exceed the total amounts designated in the original 
        budget.  The creation of any obligation pursuant to section 13 
        or the receipt of any federal or state grant is a sufficient 
        budget designation of the proceeds for the purpose for which it 
        is authorized, and of the tax or other revenue pledged to pay 
        the obligation and interest on it, whether or not specifically 
        included in any annual budget. 
           Sec. 35.  Laws 1971, chapter 869, section 10, subdivision 
        3b, as added by Laws 1975, chapter 287, section 6, is amended to 
        read: 
           Subd. 3b.  Any ad valorem taxes levied under Laws 1971, 
        Chapter 869, Section 10, Subdivision 3 or Section 5 of this act 
        by the governing body of a government unit to pay any sums 
        charged to it by the board under Laws 1971, Chapter 869 or this 
        act shall be considered special levies within the meaning of 
        Minnesota Statutes, Section 275.50, Subdivision 5 , as amended 
        are not subject to, or counted towards, any limit imposed by law 
        on the levy of the taxes upon taxable property within any 
        governmental unit. 
           Sec. 36.  Laws 1971, chapter 869, section 12, subdivision 
        1, as amended by Law 1973, chapter 632, section 3, is amended to 
        read: 
           Subdivision 1.  [CONTRIBUTIONS OR ADVANCES FROM LOCAL 
        GOVERNMENT UNITS.] The board may, at such time as it deems 
        necessary and proper, request from all or some of the local 
        government units necessary moneys to defray the costs of any 
        obligations assumed under section 6 and the costs of 
        administration, operation and maintenance, including but not 
        limited to expenses and services described in subdivision 3.  
        Before making such request the board shall, by formal 
        resolution, determine the necessity for such moneys, setting 
        forth in such resolution the purposes for which such moneys are 
        needed and the estimated amount for each such purpose.  Upon 
        receiving such request, the governing body of each such 
        government unit may provide for payment of the amount requested 
        or such part thereof as it deems fair and reasonable.  Such 
        moneys may be paid out of general revenue funds or any other 
        available funds of any local government unit and the governing 
        bodies thereof may levy taxes to provide funds therefor, free 
        from any existing limitations imposed by law or charter.  Such 
        moneys may be provided by such government units with or without 
        interest but if interest is charged it shall not exceed five 
        percent per annum.  The board shall credit the local government 
        units for such payments in allocating current costs pursuant to 
        section 9, on such terms and at such times as it may agree with 
        the unit furnishing the same. 
           Sec. 37.  Laws 1971, chapter 869, section 12, subdivision 
        2, as amended by Laws 1973, chapter 632, section 4, is amended 
        to read: 
           Subd. 2.  [LIMITED TAX LEVY.] The board may levy ad valorem 
        taxes on all taxable property in the district to defray any of 
        the costs described in subdivisions subdivision 1 and 3, 
        provided that: (a) such costs have not been defrayed by 
        contribution under subdivision 1 and (b) such tax levy in any 
        year shall not exceed 5 mills a tax capacity rate of four 
        percent annually.  Before certification of such levy to the 
        county auditor, the board shall determine the need for the money 
        to be derived from such levy by formal resolution setting forth 
        in said resolution the purposes for which the tax moneys will be 
        used and the amount proposed to be used for each such purpose.  
        In allocating current costs pursuant to section 9 the board 
        shall credit the government units for taxes collected pursuant 
        to levy made under this subdivision on such terms and at such 
        times as it deems just and reasonable. 
           Sec. 38.  Laws 1971, chapter 869, section 17, subdivision 
        11, is amended to read: 
           Subd. 11.  The board may sell, lease or otherwise dispose 
        of any real or personal property acquired by it which is no 
        longer required for accomplishment of its purposes.  Such 
        property may be sold in the manner provided by Minnesota 
        Statutes, Section 458.196 469.065, insofar as practical.  The 
        board may give such notice of sale as it shall deem appropriate. 
        When the board determines that any property or any part of the 
        district disposal system which has been acquired from a local 
        government unit without compensation is no longer required but 
        is required as a local facility by the government unit from 
        which it was acquired, the board may by resolution transfer it 
        to such government unit. 
           Sec. 39.  Laws 1971, chapter 869, section 19, is amended to 
        read: 
           Sec. 19.  [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 
        OUTSIDE THE JURISDICTION OF THE BOARD.] 
           The board may contract with the United States or any agency 
        thereof, any state or any agency thereof, or any municipal or 
        public corporation, governmental subdivision or agency or 
        political subdivision in any state, outside the jurisdiction of 
        the board, for furnishing to such entities any services which 
        the board may furnish to local government units in the district 
        under this act, including but not limited to planning for and 
        the acquisition, betterment, operation, administration and 
        maintenance of any or all interceptors, treatment works and 
        local sanitary sewer facilities, provided that the board may 
        further include as one of the terms of the contract that such 
        entity also pay to the board such amount as may be agreed upon 
        as a reasonable estimate of the proportionate share properly 
        allocable to the entity of costs of acquisition, betterment and 
        debt service previously allocated to local government units in 
        the district.  When such payments are made by such entities to 
        the board, they shall be applied in reduction of the total 
        amount of costs thereafter allocated to each local government 
        unit in the district, on such equitable basis as the board deems 
        to be in the best interests of the district, applying so far as 
        practicable and appropriate the criteria set forth in section 9, 
        subdivision 2 2a.  Any municipality in the state of Minnesota 
        may enter into such contract and perform all acts and things 
        required as a condition or consideration therefor consistent 
        with the purposes of this act, whether or not included among the 
        powers otherwise granted to such municipality by law or charter, 
        such powers to include those powers set out in section 10, 
        subdivisions 3, 3a, 3b, and 4. 
           Sec. 40.  Laws 1971, chapter 869, section 20, subdivision 
        2, is amended to read: 
           Subd. 2.  [CONTRACTS IN EXCESS OF $5,000 UNIFORM MUNICIPAL 
        CONTRACTING LAW.] No contract for any construction work, or for 
        the purchase of materials, supplies, or equipment, estimated to 
        cost more than $5,000 shall be made by the board without 
        publishing once in a newspaper having general circulation in the 
        district and once in a trade paper or legal newspaper published 
        in any city of the first class, not less than 14 days before the 
        last day for submission of bids, notice that bids or proposals 
        will be received.  Such notice shall state the nature of the 
        work or purchase and the terms and conditions upon which the 
        contract is to be awarded, and the time and place where such 
        bids will be received, opened, and read publicly.  After such 
        bids have been duly received, opened, read publicly, and 
        recorded, the board shall within a reasonable time award such 
        contract to the lowest responsible bidder or it may reject all 
        bids and readvertise.  Each contract shall be duly executed in 
        writing and the party to whom the contract is awarded shall give 
        sufficient bond or security to the board for the faithful 
        performance of the contract as required by law.  If the board by 
        an affirmative vote of not less than two thirds of its members 
        declares that an emergency exists requiring the immediate 
        purchase of materials or supplies or in making emergency 
        repairs, at a cost estimated to be in excess of $5,000, it shall 
        not be necessary to advertise for bids.  All contracts for work 
        to be done or for purchases of materials, supplies, or equipment 
        shall be done in accordance with Minnesota Statutes, section 
        471.345. 
           Sec. 41.  Laws 1971, chapter 869, section 21, is amended to 
        read: 
           Sec. 21.  [ANNEXATION OF TERRITORY.] 
           Subdivision 1.  [METHOD AND CONDITIONS FOR ANNEXATION.] Any 
        municipality in Douglas county, Minnesota upon resolution 
        adopted by a four-fifths vote of its governing body may petition 
        the board for annexation to the district of the area then 
        comprising the municipality, or any part thereof and, if 
        accepted by the board, such area shall be deemed annexed to the 
        district and subject to the jurisdiction of the board under the 
        terms and provisions of this act.  The territory so annexed 
        shall be subject to taxation and assessment pursuant to the 
        provisions of this act and shall be subject to taxation by the 
        board like other property in the district for the payment of 
        principal and interest thereafter becoming due on general 
        obligations of the board, whether authorized or issued before or 
        after such annexation.  The board may in its discretion 
        condition approval of the annexation upon:  (a) the 
        contribution, by or on behalf of the municipality petitioning 
        for annexation, to the board of such amount as may be agreed 
        upon as being a reasonable estimate of the proportionate share, 
        properly allocable to the municipality, of costs of acquisition, 
        betterment and debt service previously allocated to local 
        government units in the district, on such terms as may be agreed 
        upon.; and in lieu of (a) or in addition thereto (b) such other 
        and further conditions as the board deems in the best interests 
        of the district.  Notwithstanding any other provisions of this 
        act to the contrary, the conditions established for annexation 
        may include the requirement that the annexed municipality pay 
        for, contract for and oversee the construction of local sanitary 
        sewer facilities and interceptor sewers as those terms are 
        defined in section 2.  For the purpose of paying this such 
        contribution or of satisfying any other condition established by 
        the board, the municipality petitioning annexation may exercise 
        the powers conferred in section 10.  When such contributions are 
        made by the municipality to the board, they shall be applied in 
        reduction of the total amount of costs thereafter allocated to 
        each local government unit in the district, on such equitable 
        basis as the board deems to be in the best interests of the 
        district, applying so far as practicable and appropriate the 
        criteria set forth in section 9, subdivision 2.  Upon annexation 
        of such territory, the secretary of the board shall certify to 
        the auditor and treasurer of the county in which the 
        municipality is located the fact of such annexation and a legal 
        description of the territory annexed. 
           Subd. 2.  [LAKE MARY AND IDA TOWNSHIPS.] If Lake Mary or 
        Ida townships, or both of them, petition to annex all or any 
        part or parts of their townships to the district, upon 
        acceptance by the board, the townships shall have all powers set 
        out in section 18, subdivision 6. 
           Sec. 42.  Laws 1971, chapter 869, section 24, is amended to 
        read: 
           Sec. 24.  [AFFECTED LOCAL GOVERNMENT UNITS.] 
           The city of Alexandria and the townships of Alexandria, 
        Carlos, Hudson and, LaGrand, Lake Mary, and Ida, in the county 
        of Douglas, are affected by this act.  Local consent shall not 
        be required. 
           Sec. 43.  Laws 1985, chapter 302, section 2, subdivision 1, 
        as amended by Laws 1993, chapter 375, article 5, section 36, 
        subdivision 1, and Laws 1995, chapter 264, article 3, section 
        28, subdivision 1, is amended to read: 
           Subdivision 1.  [ORDINANCE.] The governing body of the city 
        may adopt ordinances: 
           (a) establishing a special service district in the part of 
        Minneapolis which is south of 28th Street, west of Dupont Avenue 
        South, north of 31st Street, and east of East Calhoun Parkway 
        and East Lake of the Isles Parkway; 
           (b) establishing a special service district south of Sixth 
        Street southeast, west of Sixteenth Avenue Southeast, north of a 
        line parallel to and 200 feet south of University Avenue and 
        east of Twelfth Avenue Southeast; 
           (c) establishing a special service district that includes 
        that part of Minneapolis lying within the following described 
        line:  commencing at the intersection of Grant Street with 
        LaSalle Avenue, South on LaSalle Avenue to Franklin Avenue south 
        on Blaisdell Avenue to 29th Street, east on 29th Street to 1st 
        Avenue South, north on 1st Avenue South to a point on a line 
        parallel to and 200 feet south of 26th Street, east on that line 
        to 3rd Avenue South, north on 3rd Avenue South to a point on a 
        line parallel to and 200 feet north of 26th Street, west on that 
        line to 1st Avenue South, north on 1st Avenue South to Grant 
        Street, west on Grant Street to the point of origin; 
           (d) establishing a special service district south of Saint 
        Anthony Parkway, west of a line parallel to and 300 feet east of 
        Central Avenue, north of Broadway Street, and east of a line 
        parallel to and 300 feet west of Central Avenue; and 
           (e) establishing a special service district that includes 
        that portion of Minneapolis lying within the following described 
        line:  commencing at the intersection of the Mississippi River 
        and Interstate Highway 94, northwesterly along the Mississippi 
        River to its intersection with Interstate Highway 35W, 
        southwesterly on Interstate Highway 35W to its intersection with 
        Hiawatha Avenue extended (Trunk Highway 55), southeasterly on 
        Hiawatha Avenue to its intersection with Franklin Avenue, 
        easterly on Franklin Avenue to its intersection with 20th Avenue 
        South extended, northerly on 20th Avenue South to its 
        intersection with Interstate Highway 94, and easterly on 
        Interstate Highway 94 to the point of origin.; and 
           (f) establishing a special service district that includes 
        that portion of Minneapolis lying within the following described 
        line:  commencing at the intersection of France Avenue South and 
        Glendale Terrace; south on France Avenue South to 52nd Street 
        West; east on 52nd Street West to Ewing Avenue South, north on 
        Ewing Avenue South to 51st Street West; east on 51st Street West 
        to Upton Avenue South; north on Upton Avenue South to 44th 
        Street West; east on 44th Street West to Thomas Avenue South; 
        north on a line which would be a continuation of Thomas Avenue 
        South to 42nd Street West; west on 42nd Street West to Vincent 
        Avenue South; south on Vincent Avenue South to 43rd Avenue West; 
        west on 43rd Street West to Chowen Avenue South; south on Chowen 
        Avenue South to Drew Avenue South; southwesterly on Drew Avenue 
        South to Glendale Terrace; and west on Glendale Terrace to the 
        point of origin. 
           Only property which is zoned for commercial, business, or 
        industrial use under a municipal zoning ordinance may be 
        included in a special service district.  The ordinance shall 
        describe with particularity the areas to be included in the 
        district and the special services to be furnished.  The 
        ordinance may not be adopted until after a public hearing on the 
        question.  Notice of the hearing shall include: 
           (1) the time and place of the hearing; 
           (2) a map showing the boundaries of the proposed district; 
        and 
           (3) a statement that all persons owning property in the 
        proposed district will be given an opportunity to be heard at 
        the hearing. 
           Sec. 44.  [CITY OF MINNEAPOLIS; SPECIAL SERVICE DISTRICT 
        OPTION.] 
           For special service districts established in the city of 
        Minneapolis after enactment of this act and before July 1, 2001, 
        the city of Minneapolis may at its option (1) establish the 
        district under the provisions of Minnesota Statutes, sections 
        428A.01 to 428A.10, or (2) establish by ordinance the district 
        under the provisions of Laws 1985, chapter 302, sections 1 to 7, 
        as amended.  The enactment of enabling legislation under Laws 
        1985, chapter 302, as amended, is not required for a district 
        established under this section. 
           Sec. 45.  [VALLEY BRANCH WATERSHED DISTRICT.] 
           Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, section 103D.905, subdivision 3, the Valley 
        Branch watershed district may levy up to $200,000 annually for 
        its administrative fund. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective, 
        without local approval, beginning with taxes levied in 1996, 
        payable in 1997. 
           Sec. 46.  [VIRGINIA AREA AMBULANCE DISTRICT.] 
           Subdivision 1.  [AGREEMENT; POWERS; GENERAL 
        DESCRIPTION.] (a) The cities of Virginia, Mountain Iron, and 
        Gilbert, and all or part of the towns of Pike, Clinton, 
        McDavitt, Colvin, Sandy, Cherry, Ellsburg, Wouri, Lavell, and 
        Embarrass, may by resolution of their city councils and town 
        boards establish the Virginia area ambulance district. 
           (b) The St. Louis county board may by resolution provide 
        that property located in unorganized townships described in 
        clauses (1) to (5), or any part of them, may be included within 
        the district: 
           (1) Township 61 North, Range 17 West; 
           (2) Township 59 North, Ranges 16 and 18 West; 
           (3) Township 56 North, Range 16 West; 
           (4) Township 60 North, Range 18 West; and 
           (5) Township 55 North, Range 15.  
           (c) The district shall make payments of the proceeds of the 
        tax authorized in this section to the city of Virginia, which 
        shall provide ambulance services throughout the district and may 
        exercise all the powers of the cities and towns that relate to 
        ambulance service anywhere within its territory.  
           (d) Any other contiguous town or home rule charter or 
        statutory city may join the district with the agreement of the 
        cities and towns that comprise the district at the time of its 
        application to join.  Action to join the district may be taken 
        by the city council or town board of the city or town.  
           Subd. 2.  [BOARD.] The district shall be governed by a 
        board composed of one member appointed by the city council or 
        town board of each city and town in the district.  A district 
        board member may, but is not required to, be a member of a city 
        council or town board.  Except as provided in this section, 
        members shall serve two-year terms ending the first Monday in 
        January and until their successors are appointed and qualified.  
        Of the members first appointed, as far as possible, the terms of 
        one-half shall expire on the first Monday in January in the 
        first year following appointment and one-half the first Monday 
        in January in the second year.  The terms of those initially 
        appointed must be determined by lot.  If an additional member is 
        added because an additional city or town joins the district, the 
        member's term must be fixed so that, as far as possible, the 
        terms of one-half of all the members expire on the same date. 
           Subd. 3.  [TAX.] The district may impose a property tax on 
        real and personal property in the district in an amount 
        sufficient to discharge its operating expenses and debt payable 
        in each year, but not to exceed .0528 percent of the district's 
        taxable market value.  The St. Louis county auditor shall 
        collect the tax and distribute it to the Virginia area ambulance 
        district. 
           Subd. 4.  [PUBLIC INDEBTEDNESS.] The district may incur 
        debt in the manner provided for a municipality by Minnesota 
        Statutes, chapter 475, when necessary to accomplish a duty 
        charged to it. 
           Subd. 5.  [WITHDRAWAL.] Upon two years' notice, a city or 
        town may withdraw from the district.  Its territory shall remain 
        subject to taxation for debt incurred prior to its withdrawal 
        pursuant to Minnesota Statutes, chapter 475. 
           Subd. 6.  [EFFECTIVE DATE.] This section is effective in 
        the cities of Virginia, Mountain Iron, and Gilbert, and the 
        towns of Pike, Clinton, McDavitt, Colvin, Sandy, Cherry, 
        Ellsburg, Wouri, Lavell, and Embarrass the day after compliance 
        with Minnesota Statutes, section 645.021, subdivision 3, by the 
        governing body of each.  This section is effective for 
        unorganized townships described in subdivision 1, paragraph (b), 
        clauses (1) to (6), the day after compliance with Minnesota 
        Statutes, section 645.021, subdivision 3, by the St. Louis 
        county board. 
           Sec. 47.  [REPEALER.] 
           Laws 1971, chapter 869, section 6, subdivision 3, is 
        repealed. 
           Sec. 48.  [EFFECTIVE DATE.] 
           Pursuant to Minnesota Statutes, section 645.023, 
        subdivision 1, sections 19 to 22 are effective without local 
        approval on the day following final enactment and section 19 
        applies to taxes levied in 1996, payable in 1997, and thereafter.
           Sections 23 to 42 and 47 are effective without local 
        approval on the day after their final enactment. 
                                   ARTICLE 9 
                              OBSOLETE PROVISIONS
           Section 1.  Minnesota Statutes 1994, section 290.0922, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEFINITION DEFINITIONS.] (a) "Minnesota sales or 
        receipts," means the total sales apportioned to Minnesota 
        pursuant to section 290.191, subdivision 5, the total receipts 
        attributed to Minnesota pursuant to section 290.191, 
        subdivisions 6 to 8, and/or the total sales or receipts 
        apportioned or attributed to Minnesota pursuant to any other 
        apportionment formula applicable to the taxpayer. 
           (b) "Minnesota property," and means total Minnesota 
        tangible property as provided in section 290.191, subdivisions 9 
        to 11, and any other tangible property located in Minnesota.  
        Intangible property shall not be included in Minnesota property 
        for purposes of this section.  Taxpayers who do not utilize 
        tangible property to apportion income shall nevertheless include 
        Minnesota property for purposes of this section.  On a return 
        for a short taxable year, the amount of Minnesota property 
        owned, as determined under section 290.191, shall be included in 
        Minnesota property based on a fraction in which the numerator is 
        the number of days in the short taxable year and the denominator 
        is 365.  
           (c) "Minnesota payrolls" have the meanings given in section 
        290.092, subdivision 4 means total Minnesota payrolls as 
        provided in section 290.191, subdivision 12.  Taxpayers who do 
        not utilize payrolls to apportion income shall nevertheless 
        include Minnesota payrolls for purposes of this section. 
           Sec. 2.  Minnesota Statutes 1994, section 290.095, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CARRYOVER.] (a) A net operating loss incurred in 
        a taxable year:  (i) beginning after December 31, 1986, shall be 
        a net operating loss carryover to each of the 15 taxable years 
        following the taxable year of such loss; (ii) beginning before 
        January 1, 1987, shall be a net operating loss carryover to each 
        of the five taxable years following the taxable year of such 
        loss subject to the provisions of Minnesota Statutes 1986, 
        section 290.095; and (iii) beginning before January 1, 1987, 
        shall be a net operating loss carryback to each of the three 
        taxable years preceding the loss year subject to the provisions 
        of Minnesota Statutes 1986, section 290.095. 
           (b) The entire amount of the net operating loss for any 
        taxable year shall be carried to the earliest of the taxable 
        years to which such loss may be carried.  The portion of such 
        loss which shall be carried to each of the other taxable years 
        shall be the excess, if any, of the amount of such loss over the 
        sum of the taxable net income, adjusted by the modifications 
        specified in subdivision 4, for each of the taxable years to 
        which such loss may be carried. 
           (c) Where a corporation does business both within and 
        without Minnesota, and apportions its income under the 
        provisions of section 290.191, the net operating loss deduction 
        incurred in any taxable year shall be allowed to the extent of 
        the apportionment ratio of the loss year. 
           (d) No additional net operating loss deduction is allowed 
        in a subsequent taxable year for the portion of a net operating 
        loss deduction incurred in any taxable year used to offset 
        Minnesota income in a year in which the taxpayer is subject to 
        the alternative minimum tax in section 290.092. 
           (e) The provisions of sections 381, 382, and 384 of the 
        Internal Revenue Code apply to carryovers in certain corporate 
        acquisitions and special limitations on net operating loss 
        carryovers. 
           Sec. 3.  Minnesota Statutes 1994, section 297A.15, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
        provisions of sections 297A.02, subdivision 5, and 297A.25, 
        subdivisions subdivision 42 and 50, the tax on sales of capital 
        equipment, and replacement capital equipment, and construction 
        materials and supplies under section 297A.25, subdivision 50, 
        shall be imposed and collected as if the rates rate under 
        sections section 297A.02, subdivision 1, and 297A.021, applied.  
        Upon application by the purchaser, on forms prescribed by the 
        commissioner, a refund equal to the reduction in the tax due as 
        a result of the application of the exemption under section 
        297A.25, subdivision 42 or 50, and the rates rate under sections 
        section 297A.02, subdivision 5, and 297A.021 shall be paid to 
        the purchaser.  In the case of building materials qualifying 
        under section 297A.25, subdivision 50, where the tax was paid by 
        a contractor, application must be made by the owner for the 
        sales tax paid by all the contractors, subcontractors, and 
        builders for the project.  The application must include 
        sufficient information to permit the commissioner to verify the 
        sales tax paid for the project.  The application shall include 
        information necessary for the commissioner initially to verify 
        that the purchases qualified as capital equipment under section 
        297A.25, subdivision 42, or replacement capital equipment under 
        section 297A.01, subdivision 20, or capital equipment or 
        construction materials and supplies under section 297A.25, 
        subdivision 50.  No more than two applications for refunds may 
        be filed under this subdivision in a calendar year.  No owner 
        may apply for a refund based on the exemption under section 
        297A.25, subdivision 50, before July 1, 1993.  Unless otherwise 
        specifically provided by this subdivision, the provisions of 
        section 289A.40 apply to the refunds payable under this 
        subdivision.  There is annually appropriated to the commissioner 
        of revenue the amount required to make the refunds. 
           The amount to be refunded shall bear interest at the rate 
        in section 270.76 from the date the refund claim is filed with 
        the commissioner. 
           Sec. 4.  Minnesota Statutes 1994, section 297A.15, 
        subdivision 6, is amended to read: 
           Subd. 6.  [REFUND; APPROPRIATION.] The tax on the gross 
        receipts from the sale of items exempt under section 297A.25, 
        subdivision 43, must be imposed and collected as if the sale 
        were taxable and the rates rate under sections section 297A.02, 
        subdivision 1, and 297A.021 applied. 
           Upon application by the owner of the homestead property on 
        forms prescribed by the commissioner, a refund equal to the tax 
        paid on the gross receipts of the building materials and 
        equipment must be paid to the homeowner.  In the case of 
        building materials in which the tax was paid by a contractor, 
        application must be made by the homeowner for the sales tax paid 
        by the contractor.  The application must include sufficient 
        information to permit the commissioner to verify the sales tax 
        paid for the project.  The contractor must furnish to the 
        homeowner a statement of the cost of building materials and the 
        sales taxes paid on the materials.  The amount required to make 
        the refunds is annually appropriated to the commissioner.  
        Interest must be paid on the refund at the rate in section 
        270.76 from 60 days after the date the refund claim is filed 
        with the commissioner. 
           Sec. 5.  Minnesota Statutes 1994, section 297A.21, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REQUIRED REGISTRATION BY OUT-OF-STATE RETAILER 
        NOT MAINTAINING PLACE OF BUSINESS IN MINNESOTA.] (a) A retailer 
        making retail sales from outside this state to a destination 
        within this state and not maintaining a place of business in 
        this state shall file an application for a permit pursuant to 
        section 297A.04 and shall collect and remit the use tax as 
        provided in section 297A.16 if the retailer engages in the 
        regular or systematic soliciting of sales from potential 
        customers in this state by: 
           (1) the distribution, by mail or otherwise, without regard 
        to the state from which such distribution originated or in which 
        the materials were prepared, of catalogs, periodicals, 
        advertising flyers, or other written solicitations of business 
        to customers in this state; 
           (2) display of advertisements on billboards or other 
        outdoor advertising in this state; 
           (3) advertisements in newspapers published in this state; 
           (4) advertisements in trade journals or other periodicals 
        the circulation of which is primarily within this state; 
           (5) advertisements in a Minnesota edition of a national or 
        regional publication or a limited regional edition in which this 
        state is included of a broader regional or national publication 
        which are not placed in other geographically defined editions of 
        the same issue of the same publication; 
           (6) advertisements in regional or national publications in 
        an edition which is not by its contents geographically targeted 
        to Minnesota but which is sold over the counter in Minnesota or 
        by subscription to Minnesota residents; 
           (7) advertisements broadcast on a radio or television 
        station located in Minnesota; or 
           (8) any other solicitation by telegraphy, telephone, 
        computer database, cable, optic, microwave, or other 
        communication system. 
           (b) The location within or without this state of vendors 
        independent of the retailer which provide products or services 
        to the retailer in connection with its solicitation of customers 
        within this state, including such products and services as 
        creation of copy, printing, distribution, and recording, is not 
        to be taken into account in the determination of whether the 
        retailer is required to collect use tax.  Paragraph (a) shall be 
        construed without regard to the state from which distribution of 
        the materials originated or in which they were prepared.  
           (c) A retailer not maintaining a place of business in this 
        state shall be presumed, subject to rebuttal, to be engaged in 
        regular solicitation within this state if it engages in any of 
        the activities in paragraph (a) and (1) makes 100 or more retail 
        sales from outside this state to destinations within this state 
        during a period of 12 consecutive months, or (2) makes ten or 
        more retail sales totaling more than $100,000 from outside this 
        state to destinations within this state during a period of 12 
        consecutive months. 
           (d) A retailer not maintaining a place of business in this 
        state shall not be required to collect use tax imposed by any 
        local governmental unit or subdivision of this state and this 
        section does not subject such a retailer to any regulation of 
        any local unit of government or subdivision of this state.  This 
        paragraph does not apply to the tax imposed under section 
        297A.021. 
           Sec. 6.  Minnesota Statutes 1994, section 297A.211, 
        subdivision 3, is amended to read: 
           Subd. 3.  A person who pays the tax to the seller under 
        section 297A.03 or pays the tax to the motor vehicle registrar 
        as required by section 297B.02 and who meets the requirements of 
        this section at the time of the sale, except that the person has 
        not registered as a retailer under this section at the time of 
        the sale, may register as a retailer, make a return, and file 
        for a refund of the difference between the tax calculated under 
        section 297A.02, 297A.021, 297A.14, or 297B.02 and the tax 
        calculated under subdivision 2.  
           Sec. 7.  Minnesota Statutes 1994, section 297A.24, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATE TAX.] If any article of tangible 
        personal property or any item enumerated in section 297A.14 has 
        already been subjected to a tax by any other state in respect of 
        its sale, storage, use or other consumption in an amount less 
        than the tax imposed by sections 297A.01 to 297A.44, then as to 
        the person who paid the tax in such other state, the provisions 
        of section 297A.14 shall apply only at a rate measured by the 
        difference between the sum of the rates rate imposed under 
        sections section 297A.02 and 297A.021 and the rate by which the 
        previous tax was computed.  If such tax imposed in such other 
        state was equal to or greater than the tax imposed in this 
        state, then no tax shall be due from such person under section 
        297A.14. 
           Sec. 8.  Minnesota Statutes 1994, section 297A.2572, is 
        amended to read: 
           297A.2572 [AGRICULTURE PROCESSING FACILITY MATERIALS; 
        EXEMPTION.] 
           Purchases of construction materials and supplies are exempt 
        from the sales and use taxes imposed under this chapter, 
        regardless of whether purchased by the owner or a contractor, 
        subcontractor, or builder, if the materials and supplies are 
        used or consumed in constructing an agriculture processing 
        facility as defined in section 469.1811 in which the total 
        capital investment in the processing facility is expected to 
        exceed $100,000,000.  The tax shall be imposed and collected as 
        if the rates rate under sections section 297A.02, subdivision 1, 
        and 297A.021, applied, and then refunded in the manner provided 
        in section 297A.15, subdivision 5. 
           Sec. 9.  Minnesota Statutes 1994, section 297A.2573, is 
        amended to read: 
           297A.2573 [MINERAL PRODUCTION FACILITIES; EXEMPTION.] 
           Materials, equipment, and supplies used or consumed in 
        constructing, or incorporated into the construction of exempted 
        facilities as defined in this section are exempt from the taxes 
        imposed under this chapter and from any sales and use tax 
        imposed by a local unit of government, notwithstanding any 
        ordinance or city charter provision. 
           As used in this section, "exempted facilities" means: 
           (1) a value added iron products plant, which may be either 
        a new plant or a facility incorporated into an existing plant 
        that produces iron upgraded to a minimum of 75 percent iron 
        content or any iron alloy with a total minimum metallic content 
        of 90 percent; 
           (2) a facility used for the manufacture of fluxed taconite 
        pellets as defined in section 298.24; 
           (3) a new capital project that has a total cost of over 
        $40,000,000 that is directly related to production, cost, or 
        quality at an existing taconite facility that does not qualify 
        under clause (1) or (2); and 
           (4) a new mine or minerals processing plant for any mineral 
        subject to the net proceeds tax imposed under section 298.015. 
           The tax shall be imposed and collected as if the rates rate 
        under sections section 297A.02, subdivision 1, and 297A.021, 
        applied, and then refunded in the manner provided in section 
        297A.15, subdivision 5. 
           Sec. 10.  Minnesota Statutes 1994, section 297A.44, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) Except as provided in paragraphs (b), 
        (c), and (d), all revenues, including interest and penalties, 
        derived from the excise and use taxes imposed by sections 
        297A.01 to 297A.44 shall be deposited by the commissioner in the 
        state treasury and credited to the general fund.  
           (b) All excise and use taxes derived from sales and use of 
        property and services purchased for the construction and 
        operation of an agricultural resource project, from and after 
        the date on which a conditional commitment for a loan guaranty 
        for the project is made pursuant to section 41A.04, subdivision 
        3, shall be deposited in the Minnesota agricultural and economic 
        account in the special revenue fund.  The commissioner of 
        finance shall certify to the commissioner the date on which the 
        project received the conditional commitment.  The amount 
        deposited in the loan guaranty account shall be reduced by any 
        refunds and by the costs incurred by the department of revenue 
        to administer and enforce the assessment and collection of the 
        taxes.  
           (c) All revenues, including interest and penalties, derived 
        from the excise and use taxes imposed on sales and purchases 
        included in section 297A.01, subdivision 3, paragraphs (d) and 
        (l), clauses (1) and (2), must be deposited by the commissioner 
        in the state treasury, and credited as follows: 
           (1) first to the general obligation special tax bond debt 
        service account in each fiscal year the amount required by 
        section 16A.661, subdivision 3, paragraph (b); and 
           (2) after the requirements of clause (1) have been met, the 
        balance must be credited to the general fund. 
           (d) The revenues, including interest and penalties, derived 
        from the taxes imposed on solid waste collection services as 
        described in section 297A.45, except for the tax imposed under 
        section 297A.021, shall be deposited by the commissioner in the 
        state treasury and credited to the general fund to be used for 
        funding solid waste reduction and recycling programs. 
           Sec. 11.  Minnesota Statutes 1995 Supplement, section 
        297A.45, subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] The taxes tax imposed by 
        sections section 297A.02 and 297A.021 apply applies to all 
        public and private mixed municipal solid waste management 
        services.  
           Notwithstanding section 297A.25, subdivision 11, a 
        political subdivision that purchases waste management services 
        on behalf of its citizens shall pay the taxes. 
           If a political subdivision provides a waste management 
        service to its residents at a cost in excess of the total direct 
        charge to the residents for the service, the political 
        subdivision shall pay the taxes based on its cost of providing 
        the service in excess of the direct charges.  
           A person who transports mixed municipal solid waste 
        generated by that person or by another person without 
        compensation shall pay the taxes at the waste facility based on 
        the disposal charge or tipping fee. 
           Sec. 12.  Minnesota Statutes 1995 Supplement, section 
        297A.45, subdivision 3, is amended to read: 
           Subd. 3.  [EXEMPTIONS.] (a) The cost of a service or the 
        portion of a service to collect and manage recyclable materials 
        separated from mixed municipal solid waste by the waste 
        generator is exempt from the taxes tax imposed in sections 
        section 297A.02 and 297A.021. 
           (b) The amount of a surcharge or fee imposed under section 
        115A.919, 115A.921, 115A.923, or 473.843 is exempt from the 
        taxes tax imposed in sections section 297A.02 and 297A.021. 
           (c) Waste from a recycling facility that separates or 
        processes recyclable materials and that reduces the volume of 
        the waste by at least 85 percent is exempt from the taxes tax 
        imposed in sections section 297A.02 and 297A.021.  To qualify 
        for the exemption under this paragraph, the waste exempted must 
        be managed separately from other solid waste. 
           (d) The following costs are exempt from the taxes tax 
        imposed in sections section 297A.02 and 297A.021: 
           (1) costs of providing educational materials and other 
        information to residents; 
           (2) costs of managing solid waste other than mixed 
        municipal solid waste, including household hazardous waste; and 
           (3) costs of court litigation and associated damages. 
           (e) The cost of a waste management service is exempt from 
        the taxes tax imposed in sections section 297A.02 and 297A.021 
        to the extent that the cost was previously subject to the tax. 
           Sec. 13.  Minnesota Statutes 1995 Supplement, section 
        297A.45, subdivision 4, is amended to read: 
           Subd. 4.  [CITY SALES TAX MAY NOT BE IMPOSED.] 
        Notwithstanding any other law or charter provision to the 
        contrary, a home rule charter or statutory city that imposes a 
        general sales tax may not impose the sales tax on solid waste 
        management services that are subject to the tax under this 
        section.  This subdivision does not apply to a tax imposed under 
        section 297A.021.  
           Sec. 14.  Minnesota Statutes 1994, section 297A.46, is 
        amended to read: 
           297A.46 [LOCAL GOVERNMENTS EXEMPT FROM LOCAL SALES TAXES.] 
           Notwithstanding any other law, ordinance, or charter 
        provision, no political subdivision of the state shall be 
        required to pay any general sales tax imposed by a political 
        subdivision of the state.  This provision does not apply to the 
        local option tax under section 297A.021. 
           Sec. 15.  Minnesota Statutes 1994, section 298.01, 
        subdivision 4e, is amended to read: 
           Subd. 4e.  [ALTERNATIVE MINIMUM TAX CREDIT.] (a) A credit 
        is allowed against the tax imposed by subdivision 4 for the 
        increases in occupation taxes paid in 1988, 1989, and 1990 
        attributable to the alternative minimum tax imposed under 
        section 290.092 and Minnesota Statutes 1986, section 298.40.  
        The amount of the credit allowed under this paragraph is 
        determined under section 290.06, subdivision 21. 
           (b) A credit is allowed against qualified regular tax for 
        qualified alternative minimum tax previously paid.  The amount 
        of the credit allowed under this paragraph is determined under 
        section 290.0921, subdivision 8.  For purposes of calculating 
        this credit, the following terms have the meanings given: 
           (1) "Qualified alternative minimum tax" means the amount 
        determined under subdivision 4d and section 290.0921, 
        subdivision 1. 
           (2) "Qualified regular tax" means the tax imposed under 
        subdivision 4 and section 290.06, subdivision 1. 
           Sec. 16.  [REPEALER.] 
           Subdivision 1.  [GROSS EARNINGS TAXES ON TRUST 
        COMPANIES.] Minnesota Statutes 1994, sections 295.37; 295.39; 
        295.40; 295.41; 295.42; and 295.43, are repealed. 
           Subd. 2.  [LOCAL OPTION SALES TAX REFERENCES.] Minnesota 
        Statutes 1994, sections 297A.14, subdivision 3; and 297A.24, 
        subdivision 2, are repealed. 
           Subd. 3.  [CORPORATE ALTERNATIVE MINIMUM TAX; BEFORE 1990.] 
        Minnesota Statutes 1994, sections 290.06, subdivision 21; and 
        290.092, are repealed. 
           Sec. 17.  [EFFECTIVE DATE.] 
           The amendments in section 3 striking references to 
        Minnesota Statutes, section 297A.021, and sections 4 to 14 and 
        16, subdivision 2, are effective July 1, 1996. 
                                   ARTICLE 10
                                 BUDGET RESERVE
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        16A.152, subdivision 2, is amended to read: 
           Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
        of a forecast of general fund revenues and expenditures the 
        commissioner of finance determines that there will be a positive 
        unrestricted budgetary general fund balance at the close of the 
        biennium, the commissioner of finance must allocate money to the 
        budget reserve until the total amount in the account is 
        $220,000,000 $270,000,000.  An amount equal to any additional 
        biennial unrestricted budgetary general fund balances balance 
        made available after November 1 of every as the result of a 
        forecast in an odd-numbered calendar year are after November 1 
        is appropriated in January of the following year to reduce the 
        property tax levy recognition percent under section 121.904, 
        subdivision 4a, to zero before additional money 
        beyond $220,000,000 $270,000,000 is allocated to the budget 
        reserve account.  The amount appropriated is the full amount 
        forecast to be available at the end of the biennium and is not 
        limited to the amount forecast to be available at the end of the 
        current fiscal year. 
           The amounts necessary to meet the requirements of this 
        section are appropriated from the general fund. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        121.904, subdivision 4a, is amended to read: 
           Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
        settlement revenue" means the current, delinquent, and 
        manufactured home property tax receipts collected by the county 
        and distributed to the school district, including distributions 
        made pursuant to section 279.37, subdivision 7, and excluding 
        the amount levied pursuant to section 124.914, subdivision 1. 
           (b) In June of each year, the school district shall 
        recognize as revenue, in the fund for which the levy was made, 
        the lesser of:  
           (1) the May, June, and July school district tax settlement 
        revenue received in that calendar year; or 
           (2) the sum of the state aids and credits enumerated in 
        section 124.155, subdivision 2, which are for the fiscal year 
        payable in that fiscal year plus an amount equal to the levy 
        recognized as revenue in June of the prior year plus 48 31 
        percent for fiscal year 1996 and thereafter of the amount of the 
        levy certified in the prior calendar year according to section 
        124A.03, subdivision 2, plus or minus auditor's adjustments, not 
        including levy portions that are assumed by the state; or 
           (3) 48 18.1 percent for fiscal year 1996, the percent 
        determined under section 3 for fiscal year 1997 and that same 
        percent thereafter of the amount of the levy certified in the 
        prior calendar year, plus or minus auditor's adjustments, not 
        including levy portions that are assumed by the state, which 
        remains after subtracting, by fund, the amounts levied for the 
        following purposes:  
           (i) reducing or eliminating projected deficits in the 
        reserved fund balance accounts for unemployment insurance and 
        bus purchases; 
           (ii) statutory operating debt pursuant to section 124.914, 
        subdivision 1; 
           (iii) retirement and severance pay pursuant to sections 
        122.531, subdivision 9, 124.2725, subdivision 15, 124.4945, 
        124.912, subdivision 1, and 124.916, subdivision 3, and Laws 
        1975, chapter 261, section 4; 
           (iv) amounts levied for bonds issued and interest thereon, 
        amounts levied for debt service loans and capital loans, amounts 
        levied for down payments under section 124.82, subdivision 3, 
        and amounts levied pursuant to section 136C.411; and 
           (v) amounts levied under section 124.755.  
           Notwithstanding the foregoing, the levy recognition 
        percentage for the referendum levy certified according to 
        section 124A.03, subdivision 2, is 31 percent. 
           (c) In July of each year, the school district shall 
        recognize as revenue that portion of the school district tax 
        settlement revenue received in that calendar year and not 
        recognized as revenue for the previous fiscal year pursuant to 
        clause (b).  
           (d) All other school district tax settlement revenue shall 
        be recognized as revenue in the fiscal year of the settlement. 
        Portions of the school district levy assumed by the state, 
        including prior year adjustments and the amount to fund the 
        school portion of the reimbursement made pursuant to section 
        273.425, shall be recognized as revenue in the fiscal year 
        beginning in the calendar year for which the levy is payable. 
           Sec. 3.  [1997 PROPERTY TAX RECOGNITION SHIFT ADJUSTMENT.] 
           Subdivision 1.  [ADJUSTMENT.] The commissioner of finance 
        shall adjust the property tax recognition shift percentage for 
        fiscal year 1997 under Minnesota Statutes, section 121.904, 
        subdivision 4a, paragraph (b), clause (3), according to this 
        section. 
           Subd. 2.  [APPROPRIATION.] $180,000,000 is appropriated 
        from the general fund to the commissioner of children, families, 
        and learning for fiscal year 1997 to reduce the property tax 
        levy recognition percentage under Minnesota Statutes, section 
        121.904, subdivision 4a, paragraph (b), clause (3).  This 
        appropriation replaces the appropriation for fiscal year 1997 
        made under Minnesota Statutes, section 16A.152, subdivision 2, 
        as a result of the November 1995 forecast. 
           Subd. 3.  [NOVEMBER 1996 DEFICIT CONTINGENCY.] 
        Notwithstanding Minnesota Statutes, section 16A.152, subdivision 
        4, if the commissioner of finance determines on the basis of a 
        forecast of general fund revenues and expenditures issued before 
        January 1, 1997, that the unrestricted budgetary general fund 
        balance at the close of the 1996-1997 biennium will show a 
        deficit, the commissioner of finance shall first act to reduce 
        the deficit by increasing the property tax recognition 
        percentage under Minnesota Statutes, section 121.904, 
        subdivision 4a, paragraph (b), clause (3), but not above 18.1 
        percent.  The appropriation in subdivision 2 is reduced 
        accordingly.  The commissioner of finance shall make up any 
        additional deficit by reducing the amount in the budget reserve 
        in accordance with Minnesota Statutes, section 16A.152, 
        subdivision 4. 
           Subd. 4.  [NOVEMBER 1996 SURPLUS CONTINGENCY.] 
        Notwithstanding Minnesota Statutes, section 16A.152, subdivision 
        4, if the commissioner of finance determines on the basis of a 
        forecast of general fund revenues and expenditures issued before 
        January 1, 1997, that the unrestricted budgetary general fund 
        balance at the close of the 1996-1997 biennium will show a 
        surplus, the amount of the surplus is appropriated from the 
        general fund to an education aid reserve account, except that 
        the amount appropriated must not exceed the forecast value of 
        the cost of reducing the property tax levy recognition 
        percentage under Minnesota Statutes, section 121.904, 
        subdivision 4a, paragraph (b), clause (3), to zero in fiscal 
        year 1997.  The balance in the account does not cancel but may 
        not be expended until appropriated by law for education aid for 
        fiscal years 1998 and 1999. 
           Subd. 5.  [PERCENTAGE CERTIFICATION.] The commissioner of 
        finance shall determine the amount available to reduce the 
        property tax levy recognition percentage after giving effect to 
        subdivisions 2 and 3, and shall certify it to the commissioner 
        of children, families, and learning by January 5, 1997.  The 
        commissioner of children, families, and learning shall calculate 
        the percentage using the method specified in section 121.904, 
        subdivision 4c, and shall notify school districts of the 
        resulting change in the levy recognition percentage by January 
        15, 1997. 
           Sec. 4.  [BUDGET RESERVE 1996.] 
           The amount necessary to bring the budget reserve to 
        $270,000,000 on July 1, 1996, is appropriated from the general 
        fund to the commissioner of finance for transfer to the budget 
        reserve on that date. 
           Sec. 5.  [REPEALER.] 
           1996 H.F. No. 2156, article 14, section 4, if enacted, is 
        repealed. 
           Sec. 6.  [EFFECTIVE DATE.] 
           This article is effective the day following final enactment.
                                   ARTICLE 11 
                  TACONITE TAX RELIEF AREA FISCAL DISPARITIES
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        273.1398, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
        terms defined in this subdivision have the meanings given them. 
           (b) "Unique taxing jurisdiction" means the geographic area 
        subject to the same set of local tax rates. 
           (c) "Net tax capacity" means the product of (i) the 
        appropriate net class rates for the year in which the aid is 
        payable, except that for aid payable in 1996 the class rate 
        applicable to all class 4a shall be 3.4 percent; and (ii) 
        estimated market values for the assessment two years prior to 
        that in which aid is payable.  "Total net tax capacity" means 
        the net tax capacities for all property within the unique taxing 
        jurisdiction.  The total net tax capacity used shall be reduced 
        by the sum of (1) the unique taxing jurisdiction's net tax 
        capacity of commercial industrial property as defined in section 
        473F.02, subdivision 3, or 276A.02, subdivision 3, multiplied by 
        the ratio determined pursuant to section 473F.08, subdivision 6, 
        or 276A.06, subdivision 7, for the municipality, as defined in 
        section 473F.02, subdivision 8, or 276A.02, subdivision 8, in 
        which the unique taxing jurisdiction is located, (2) the net tax 
        capacity of the captured value of tax increment financing 
        districts as defined in section 469.177, subdivision 2, and (3) 
        the net tax capacity of transmission lines deducted from a local 
        government's total net tax capacity under section 273.425.  For 
        purposes of determining the net tax capacity of property 
        referred to in clauses (1), (2), and (3), the net tax capacity 
        shall be multiplied by the ratio of the highest class rate for 
        class 3a property for taxes payable in the year in which the aid 
        is payable to the highest class rate for class 3a property in 
        the prior year.  Net tax capacity cannot be less than zero. 
           (d) "Previous net tax capacity" means the product of the 
        appropriate net class rates for the year previous to the year in 
        which the aid is payable, and estimated market values for the 
        assessment two years prior to that in which aid is payable.  
        "Total previous net tax capacity" means the previous net tax 
        capacities for all property within the unique taxing 
        jurisdiction.  The total previous net tax capacity shall be 
        reduced by the sum of (1) the unique taxing jurisdiction's 
        previous net tax capacity of commercial-industrial property as 
        defined in section 473F.02, subdivision 3, or 276A.02, 
        subdivision 3, multiplied by the ratio determined pursuant to 
        section 473F.08, subdivision 6, or 276A.06, subdivision 7, for 
        the municipality, as defined in section 473F.02, subdivision 
        8, or 276A.06, subdivision 7, in which the unique taxing 
        jurisdiction is located, (2) the previous net tax capacity of 
        the captured value of tax increment financing districts as 
        defined in section 469.177, subdivision 2, and (3) the previous 
        net tax capacity of transmission lines deducted from a local 
        government's total net tax capacity under section 273.425.  
        Previous net tax capacity cannot be less than zero. 
           (e) "Equalized market values" are market values that have 
        been equalized by dividing the assessor's estimated market value 
        for the second year prior to that in which the aid is payable by 
        the assessment sales ratios determined by class in the 
        assessment sales ratio study conducted by the department of 
        revenue pursuant to section 124.2131 in the second year prior to 
        that in which the aid is payable.  The equalized market values 
        shall equal the unequalized market values divided by the 
        assessment sales ratio. 
           (f) "Equalized school levies" means the amounts levied for: 
           (1) general education under section 124A.23, subdivision 2; 
           (2) supplemental revenue under section 124A.22, subdivision 
        8a; 
           (3) capital expenditure facilities revenue under section 
        124.243, subdivision 3; 
           (4) capital expenditure equipment revenue under section 
        124.244, subdivision 2; 
           (5) basic transportation under section 124.226, subdivision 
        1; and 
           (6) referendum revenue under section 124A.03. 
           (g) "Current local tax rate" means the quotient derived by 
        dividing the taxes levied within a unique taxing jurisdiction 
        for taxes payable in the year prior to that for which aids are 
        being calculated by the total previous net tax capacity of the 
        unique taxing jurisdiction.  
           (h) For purposes of calculating and allocating homestead 
        and agricultural credit aid authorized pursuant to subdivision 2 
        and the disparity reduction aid authorized in subdivision 3, 
        "gross taxes levied on all properties," "gross taxes," or "taxes 
        levied" means the total net tax capacity based taxes levied on 
        all properties except that levied on the captured value of tax 
        increment districts as defined in section 469.177, subdivision 
        2, and that levied on the portion of commercial industrial 
        properties' assessed value or gross tax capacity, as defined in 
        section 473F.02, subdivision 3, subject to the areawide tax as 
        provided in section 473F.08, subdivision 6, in a unique taxing 
        jurisdiction.  "Gross taxes" are before any reduction for 
        disparity reduction aid but "taxes levied" are after any 
        reduction for disparity reduction aid.  Gross taxes levied or 
        taxes levied cannot be less than zero.  
           "Taxes levied" excludes equalized school levies. 
           (i) "Human services aids" means: 
           (1) aid to families with dependent children under sections 
        256.82, subdivision 1, and 256.935, subdivision 1; 
           (2) medical assistance under sections 256B.041, subdivision 
        5, and 256B.19, subdivision 1; 
           (3) general assistance medical care under section 256D.03, 
        subdivision 6; 
           (4) general assistance under section 256D.03, subdivision 
        2; 
           (5) work readiness under section 256D.03, subdivision 2; 
           (6) emergency assistance under section 256.871, subdivision 
        6; 
           (7) Minnesota supplemental aid under section 256D.36, 
        subdivision 1; 
           (8) preadmission screening and alternative care grants; 
           (9) work readiness services under section 256D.051; 
           (10) case management services under section 256.736, 
        subdivision 13; 
           (11) general assistance claims processing, medical 
        transportation and related costs; and 
           (12) medical assistance, medical transportation and related 
        costs. 
           (j) "Household adjustment factor" means the number of 
        households for the second most recent year preceding that in 
        which the aids are payable divided by the number of households 
        for the third most recent year.  The household adjustment factor 
        cannot be less than one.  
           (k) "Growth adjustment factor" means the household 
        adjustment factor in the case of counties.  In the case of 
        cities, towns, school districts, and special taxing districts, 
        the growth adjustment factor equals one.  The growth adjustment 
        factor cannot be less than one.  
           (l) For aid payable in 1992 and subsequent years, 
        "homestead and agricultural credit base" means the previous 
        year's certified homestead and agricultural credit aid 
        determined under subdivision 2 less any permanent aid reduction 
        in the previous year to homestead and agricultural credit aid 
        under section 477A.0132, plus, for aid payable in 1992, fiscal 
        disparity homestead and agricultural credit aid under 
        subdivision 2b.  
           (m) "Net tax capacity adjustment" means (1) the total 
        previous net tax capacity minus the total net tax capacity, 
        multiplied by (2) the unique taxing jurisdiction's current local 
        tax rate.  The net tax capacity adjustment cannot be less than 
        zero. 
           (n) "Fiscal disparity adjustment" means the difference 
        between (1) a taxing jurisdiction's fiscal disparity 
        distribution levy under section 473F.08, subdivision 3, clause 
        (a), or 276A.06, subdivision 3, clause (a), for taxes payable in 
        the year prior to that for which aids are being calculated, and 
        (2) the same distribution levy multiplied by the ratio of the 
        highest class rate for class 3 property for taxes payable in the 
        year prior to that for which aids are being calculated to the 
        highest class rate for class 3 property for taxes payable in the 
        second prior year to that for which aids are being calculated.  
        In the case of school districts, the fiscal disparity 
        distribution levy shall exclude that part of the levy 
        attributable to equalized school levies. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        275.065, subdivision 3, is amended to read: 
           Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
        county auditor shall prepare and the county treasurer shall 
        deliver after November 10 and on or before November 24 each 
        year, by first class mail to each taxpayer at the address listed 
        on the county's current year's assessment roll, a notice of 
        proposed property taxes and, in the case of a town, final 
        property taxes.  
           (b) The commissioner of revenue shall prescribe the form of 
        the notice. 
           (c) The notice must inform taxpayers that it contains the 
        amount of property taxes each taxing authority other than a town 
        proposes to collect for taxes payable the following year and, 
        for a town, the amount of its final levy.  It must clearly state 
        that each taxing authority, including regional library districts 
        established under section 134.201, and including the 
        metropolitan taxing districts as defined in paragraph (i), but 
        excluding all other special taxing districts and towns, will 
        hold a public meeting to receive public testimony on the 
        proposed budget and proposed or final property tax levy, or, in 
        case of a school district, on the current budget and proposed 
        property tax levy.  It must clearly state the time and place of 
        each taxing authority's meeting and an address where comments 
        will be received by mail.  
           (d) The notice must state for each parcel: 
           (1) the market value of the property as determined under 
        section 273.11, and used for computing property taxes payable in 
        the following year and for taxes payable in the current year; 
        and, in the case of residential property, whether the property 
        is classified as homestead or nonhomestead.  The notice must 
        clearly inform taxpayers of the years to which the market values 
        apply and that the values are final values; 
           (2) by county, city or town, school district excess 
        referenda levy, remaining school district levy, regional library 
        district, if in existence, the total of the metropolitan special 
        taxing districts as defined in paragraph (i) and the sum of the 
        remaining special taxing districts, and as a total of the taxing 
        authorities, including all special taxing districts, the 
        proposed or, for a town, final net tax on the property for taxes 
        payable the following year and the actual tax for taxes payable 
        the current year.  For the purposes of this subdivision, "school 
        district excess referenda levy" means school district taxes for 
        operating purposes approved at referendums, including those 
        taxes based on net tax capacity as well as those based on market 
        value.  "School district excess referenda levy" does not include 
        school district taxes for capital expenditures approved at 
        referendums or school district taxes to pay for the debt service 
        on bonds approved at referenda.  In the case of the city of 
        Minneapolis, the levy for the Minneapolis library board and the 
        levy for Minneapolis park and recreation shall be listed 
        separately from the remaining amount of the city's levy.  In the 
        case of a parcel where tax increment or the fiscal disparities 
        areawide tax under chapter 276A or 473F applies, the proposed 
        tax levy on the captured value or the proposed tax levy on the 
        tax capacity subject to the areawide tax must each be stated 
        separately and not included in the sum of the special taxing 
        districts; and 
           (3) the increase or decrease in the amounts in clause (2) 
        from taxes payable in the current year to proposed or, for a 
        town, final taxes payable the following year, expressed as a 
        dollar amount and as a percentage. 
           (e) The notice must clearly state that the proposed or 
        final taxes do not include the following: 
           (1) special assessments; 
           (2) levies approved by the voters after the date the 
        proposed taxes are certified, including bond referenda, school 
        district levy referenda, and levy limit increase referenda; 
           (3) amounts necessary to pay cleanup or other costs due to 
        a natural disaster occurring after the date the proposed taxes 
        are certified; 
           (4) amounts necessary to pay tort judgments against the 
        taxing authority that become final after the date the proposed 
        taxes are certified; and 
           (5) the contamination tax imposed on properties which 
        received market value reductions for contamination. 
           (f) Except as provided in subdivision 7, failure of the 
        county auditor to prepare or the county treasurer to deliver the 
        notice as required in this section does not invalidate the 
        proposed or final tax levy or the taxes payable pursuant to the 
        tax levy. 
           (g) If the notice the taxpayer receives under this section 
        lists the property as nonhomestead and the homeowner provides 
        satisfactory documentation to the county assessor that the 
        property is owned and has been used as the owner's homestead 
        prior to June 1 of that year, the assessor shall reclassify the 
        property to homestead for taxes payable in the following year. 
           (h) In the case of class 4 residential property used as a 
        residence for lease or rental periods of 30 days or more, the 
        taxpayer must either: 
           (1) mail or deliver a copy of the notice of proposed 
        property taxes to each tenant, renter, or lessee; or 
           (2) post a copy of the notice in a conspicuous place on the 
        premises of the property.  
           The notice must be mailed or posted by the taxpayer by 
        November 27 or within three days of receipt of the notice, 
        whichever is later.  A taxpayer may notify the county treasurer 
        of the address of the taxpayer, agent, caretaker, or manager of 
        the premises to which the notice must be mailed in order to 
        fulfill the requirements of this paragraph. 
           (i) For purposes of this subdivision, subdivisions 5a and 
        6, "metropolitan special taxing districts" means the following 
        taxing districts in the seven-county metropolitan area that levy 
        a property tax for any of the specified purposes listed below: 
           (1) metropolitan council under section 473.132, 473.167, 
        473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
           (2) metropolitan airports commission under section 473.667, 
        473.671, or 473.672; and 
           (3) metropolitan mosquito control commission under section 
        473.711. 
           For purposes of this section, any levies made by the 
        regional rail authorities in the county of Anoka, Carver, 
        Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
        398A shall be included with the appropriate county's levy and 
        shall be discussed at that county's public hearing. 
           Sec. 3.  [276A.01] [DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] In sections 3 to 11, the 
        terms defined in this section have the meanings given them 
        unless the context indicates otherwise. 
           Subd. 2.  [AREA.] "Area" means the territory included 
        within all tax relief areas defined in section 273.134. 
           Subd. 3.  [COMMERCIAL-INDUSTRIAL PROPERTY.] 
        "Commercial-industrial property" means the following categories 
        of property, as defined in section 273.13, excluding that 
        portion of the property (1) that may, by law, constitute the tax 
        base for a tax increment pledged pursuant to section 469.042 or 
        469.162, certification of which was requested prior to May 1, 
        1996, to the extent and while the tax increment is so pledged; 
        or (2) that is exempt from taxation under section 272.02:  
           (1) that portion of class 5 property consisting of unmined 
        iron ore and low-grade iron-bearing formations as defined in 
        section 273.14, tools, implements, and machinery, except the 
        portion of high voltage transmission lines, the value of which 
        is deducted from net tax capacity under section 273.425; and 
           (2) that portion of class 3 and class 5 property which is 
        either used or zoned for use for any commercial or industrial 
        purpose, except for such property which is, or, in the case of 
        property under construction, will when completed be used 
        exclusively for residential occupancy and the provision of 
        services to residential occupants thereof.  Property must be 
        considered as used exclusively for residential occupancy only if 
        each of not less than 80 percent of its occupied residential 
        units is, or, in the case of property under construction, will 
        when completed be occupied under an oral or written agreement 
        for occupancy over a continuous period of not less than 30 days. 
           If the classification of property prescribed by section 
        273.13 is modified by legislative amendment, the references in 
        this subdivision are to the successor class or classes of 
        property, or portions thereof, that include the kinds of 
        property designated in this subdivision.  
           Subd. 4.  [RESIDENTIAL PROPERTY.] "Residential property" 
        means the following categories of property, as defined in 
        section 273.13, excluding that portion of the property that is 
        exempt from taxation pursuant to section 272.02: 
           (1) class 1a, 1b, and 2a property, limited to the homestead 
        dwelling, a garage, and the one acre of land on which the 
        dwelling is located; 
           (2) that portion of class 3 property used exclusively for 
        residential occupancy; and 
           (3) property valued and assessed under section 273.13, 
        subdivision 25, except for hospitals and property valued and 
        assessed under paragraph (c), clauses (5) and (6).  
           Subd. 5.  [GOVERNMENTAL UNIT.] "Governmental unit" means a 
        county, city, town, school district, or other taxing unit or 
        body which levies ad valorem taxes in whole or in part within 
        the area. 
           Subd. 6.  [ADMINISTRATIVE AUDITOR.] "Administrative auditor"
        means the person selected under section 4. 
           Subd. 7.  [POPULATION.] "Population" means the most recent 
        estimate of the population of a municipality made by the state 
        demographer and filed with the commissioner of revenue.  The 
        state demographer shall annually estimate the population of each 
        municipality and, in the case of a municipality which is located 
        partly within and partly without the area, the proportion of the 
        total which resides within the area, and shall file the 
        estimates with the commissioner of revenue. 
           Subd. 8.  [MUNICIPALITY.] "Municipality" means a city, 
        town, or township located in whole or part within the area.  If 
        a municipality is located partly within and partly without the 
        area, the references in sections 3 to 11 to property or any 
        portion thereof subject to taxation or taxing jurisdiction 
        within the municipality are to the property or portion thereof 
        that is located in that portion of the municipality within the 
        area, except that the fiscal capacity of the municipality must 
        be computed upon the basis of the valuation and population of 
        the entire municipality.  A municipality shall be excluded from 
        the area if its municipal comprehensive zoning and planning 
        policies conscientiously exclude most commercial-industrial 
        development, for reasons other than preserving an agricultural 
        use.  The iron range resources and rehabilitation board and the 
        commissioner of revenue shall jointly make this determination 
        annually and shall notify those municipalities that are 
        ineligible to participate in the tax base sharing program 
        provided in this chapter for the following year. 
           Subd. 9.  [COUNTY.] "County" means each county in which a 
        governmental unit is located in whole or in part. 
           Subd. 10.  [MARKET VALUE.] "Market value" of real and 
        personal property within a municipality means the assessor's 
        estimated market value of all real and personal property, 
        including the value of manufactured housing, within the 
        municipality.  For purposes of sections 3 to 11, the 
        commissioner of revenue shall annually make determinations and 
        reports with respect to each municipality which are comparable 
        to those it makes for school districts under section 124.2131, 
        subdivision 1, in the same manner and at the same times 
        prescribed by the subdivision.  The commissioner of revenue 
        shall annually determine, for each municipality, information 
        comparable to that required by section 475.53, subdivision 4, 
        for school districts, as soon as practicable after it becomes 
        available.  The commissioner of revenue shall then compute the 
        equalized market value of property within each municipality. 
           Subd. 11.  [VALUATION.] "Valuation" means the market value 
        of real and personal property within a municipality as defined 
        in subdivision 10. 
           Subd. 12.  [FISCAL CAPACITY.] "Fiscal capacity" of a 
        municipality means its valuation, determined as of January 2 of 
        any year, divided by its population, determined as of a date in 
        the same year. 
           Subd. 13.  [AVERAGE FISCAL CAPACITY.] "Average fiscal 
        capacity" of municipalities means the sum of the valuations of 
        all municipalities, determined as of January 2 of any year, 
        divided by the sum of their populations, determined as of a date 
        in the same year. 
           Subd. 14.  [LEVY.] "Levy" means the amount certified to the 
        county auditor pursuant to chapter 275, less all reductions made 
        by the auditor pursuant to any provision of law in determining 
        the amount to be spread against taxable property. 
           Subd. 15.  [NET TAX CAPACITY.] "Net tax capacity" means the 
        market value of real and personal property multiplied by its net 
        tax capacity rates in section 273.13. 
           Subd. 16.  [LOCAL TAX RATE.] "Local tax rate" means a 
        governmental unit's levy, including any portion levied against 
        market value under section 124A.03, subdivision 2a, divided by 
        its net tax capacity. 
           Sec. 4.  [276A.02] [ADMINISTRATIVE AUDITOR.] 
           Subdivision 1.  [ELECTION.] On or before July 1, 1997, and 
        each subsequent odd-numbered year, the auditors of the counties 
        within the area shall meet at the call of the auditor of St. 
        Louis county and elect from among themselves one auditor to 
        serve as administrative auditor for a period of two years and 
        until a successor is elected.  If a majority is unable to agree 
        upon a person to serve as administrative auditor, the 
        commissioner of revenue shall appoint one from among the 
        auditors of the counties in the area.  If the administrative 
        auditor ceases to serve as a county auditor within the area 
        during the term for which he was elected or appointed, a 
        successor must be chosen in the manner provided for the original 
        selection to serve for the unexpired term.  
           Subd. 2.  [STAFF; EXPENSES.] The administrative auditor 
        shall utilize the staff and facilities of the auditor's office 
        of the county the administrative auditor serves to perform the 
        functions imposed upon the administrative auditor by sections 3 
        to 11.  That county shall be reimbursed for the marginal 
        expenses incurred by its county auditor and staff under this 
        section by contributions from each other county in the area in 
        an amount which bears the same proportion to the total expenses 
        that the population of the other county bears to the total 
        population of the area.  By February 1 each year, the 
        administrative auditor shall certify the amounts of total 
        expense for the preceding calendar year, and the share of each 
        county, to the treasurer of each other county.  Payment must be 
        made by the treasurer of each other county to the treasurer of 
        the county incurring expense by the succeeding March 1. 
           Sec. 5.  [276A.03] [NET TAX CAPACITY OF 
        COMMERCIAL-INDUSTRIAL PROPERTY.] 
           By August 5 of 1996 and each subsequent year, the assessors 
        within each county in the area shall determine and certify to 
        the county auditor the net tax capacity in that year of 
        commercial-industrial property subject to taxation within each 
        municipality in the county, determined without regard to section 
        469.177, subdivision 3.  By August 5 of 1996 only, the assessor 
        within each county in the area shall also determine and certify 
        to the county auditor the net tax capacity for the 1995 
        assessment of commercial-industrial property subject to taxation 
        within each municipality within the county determined without 
        regard to section 469.177, subdivision 3. 
           Sec. 6.  [276A.04] [INCREASE IN NET TAX CAPACITY.] 
           By July 15 of 1997 and each subsequent year, the auditor of 
        each county in the area shall determine the amount, if any, by 
        which the net tax capacity determined in the preceding year 
        pursuant to section 5, of commercial-industrial property subject 
        to taxation within each municipality in the county exceeds the 
        net tax capacity in 1995 of commercial-industrial property 
        subject to taxation within that municipality.  If a municipality 
        is located in two or more counties within the area, the auditors 
        of those counties shall certify the data required by section 5 
        to the county auditor responsible for allocating the levies of 
        that municipality between or among the affected counties.  That 
        county auditor shall determine the amount of the net excess, if 
        any, for the municipality under this section, and certify that 
        amount under section 7.  The increase in total net tax capacity 
        determined by this section must be reduced by the amount of any 
        decreases in the net tax capacity of commercial-industrial 
        property resulting from any court decisions, court-related 
        stipulation agreements, or abatements for a prior year, and only 
        in the amount of such decreases made during the 12-month period 
        ending on May 1 of the current assessment year, where the 
        decreases, if originally reflected in the determination of a 
        prior year's net tax capacity under section 5, would have 
        resulted in a smaller contribution from the municipality in that 
        year.  An adjustment for the decreases shall be made only if the 
        municipality made a contribution in a prior year based on the 
        higher net tax capacity of the commercial-industrial property. 
           Sec. 7.  [276A.05] [COMPUTATION OF AREAWIDE TAX BASE.] 
           Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
        auditor shall certify the determinations under sections 5 and 6 
        to the administrative auditor on or before August 1 of each 
        year.  The administrative auditor shall determine an amount 
        equal to 40 percent of the sum of the amounts certified pursuant 
        to section 6.  The resulting amount shall be known as the 
        "areawide net tax capacity for ........(year)."  
           Subd. 2.  [POPULATION AND FISCAL CAPACITY 
        CERTIFICATIONS.] The commissioner of revenue shall certify to 
        the administrative auditor, on or before August 10 of each year, 
        the population of each municipality for the preceding year, the 
        proportion of that population which resides within the area, the 
        average fiscal capacity of municipalities for the preceding 
        year, and the fiscal capacity of each municipality for the 
        preceding year. 
           Subd. 3.  [AREAWIDE TAX BASE DISTRIBUTION INDEX.] The 
        administrative auditor shall determine, for each municipality, 
        the product of (1) its population, (2) the proportion which the 
        average fiscal capacity of municipalities for the preceding year 
        bears to the fiscal capacity of that municipality for the 
        preceding year.  The product shall be the areawide tax base 
        distribution index for that municipality.  If a municipality is 
        located partly within and partly without the area, its index is 
        that which is otherwise determined hereunder, multiplied by the 
        proportion which its population residing within the area bears 
        to its total population as of the preceding year. 
           Subd. 4.  [DISTRIBUTION NET TAX CAPACITY.] The 
        administrative auditor shall determine the proportion which the 
        index of each municipality bears to the sum of the indices of 
        all municipalities and shall then multiply this proportion in 
        the case of each municipality, by the areawide net tax capacity. 
           Subd. 5.  [CERTIFICATION.] The product of the procedure 
        prescribed by subdivision 4 shall be known as the "areawide net 
        tax capacity for ......(year) attributable to 
        ..........(municipality)."  The administrative auditor shall 
        certify the product to the auditor of the county in which the 
        municipality is located on or before August 15. 
           Sec. 8.  [276A.06] [NET TAX CAPACITY OF GOVERNMENTAL UNIT.] 
           Subdivision 1.  [GENERALLY.] The county auditor shall 
        determine the net tax capacity of each governmental unit within 
        the county in the manner prescribed by this section. 
           Subd. 2.  [DEFINITION.] The net tax capacity of a 
        governmental unit is its net tax capacity as determined in 
        accordance with other provisions of law including section 
        469.177, subdivision 3, subject to the following adjustments:  
           (a) There must be subtracted from its net tax capacity, in 
        each municipality in which the governmental unit exercises ad 
        valorem taxing jurisdiction, an amount that bears the same 
        proportion to 40 percent of the amount certified in that year 
        pursuant to sections 6 and 7 for the municipality as the total 
        preceding year's net tax capacity of commercial-industrial 
        property which is subject to the taxing jurisdiction of the 
        governmental unit within the municipality, determined without 
        regard to section 469.177, subdivision 3, bears to the total 
        preceding year's net tax capacity of commercial-industrial 
        property within the municipality, determined without regard to 
        section 469.177, subdivision 3.  
           (b) There must be added to its net tax capacity, in each 
        municipality in which the governmental unit exercises ad valorem 
        taxing jurisdiction, an amount which bears the same proportion 
        to the areawide net tax capacity for the year attributable to 
        that municipality as the total preceding year's net tax capacity 
        of residential property which is subject to the taxing 
        jurisdiction of the governmental unit within the municipality 
        bears to the total preceding year's net tax capacity of 
        residential property of the municipality.  
           Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
        apportion the levy of each governmental unit in the county in 
        the manner prescribed by this subdivision.  The auditor shall: 
           (a) by August 20 of 1997 and each subsequent year, 
        determine the areawide portion of the levy for each governmental 
        unit by multiplying the local tax rate of the governmental unit 
        for the preceding levy year times the distribution value set 
        forth in subdivision 2, clause (b); and 
           (b) by September 5 of 1997 and each subsequent year, 
        determine the local portion of the current year's levy by 
        subtracting the resulting amount from clause (a) from the 
        governmental unit's current year's levy. 
           Subd. 4.  [TAX RATE NONCOMMERCIAL PROPERTY.] In 1997 and 
        subsequent years, the county auditor shall divide that portion 
        of the levy determined pursuant to subdivision 3, clause (b), by 
        the net tax capacity of the governmental unit, taking section 
        469.177, subdivision 3, into account, less that portion 
        subtracted from net tax capacity pursuant to subdivision 2, 
        clause (a).  The resulting rate applies to all taxable property 
        except commercial-industrial property, which must be taxed in 
        accordance with subdivision 7. 
           Subd. 5.  [AREAWIDE TAX RATE.] On or before August 25 of 
        1997 and each subsequent year, the county auditor shall certify 
        to the administrative auditor that portion of the levy of each 
        governmental unit determined pursuant to subdivision 3, clause 
        (a).  The administrative auditor shall then determine the 
        areawide tax rate sufficient to yield an amount equal to the sum 
        of the levies from the areawide net tax capacity.  On or before 
        September 1, the administrative auditor shall certify the 
        areawide tax rate to each of the county auditors. 
           Subd. 6.  [GOVERNMENTAL UNIT IN TWO OR MORE COUNTIES.] If a 
        governmental unit is located in two or more counties, the 
        computations and certifications required by subdivisions 3 to 5 
        with respect to it must be made by the county auditor who is 
        responsible for allocating its levies between or among the 
        affected counties. 
           Subd. 7.  [APPLICATION TO COMMERCIAL-INDUSTRIAL 
        PROPERTY.] The areawide tax rate determined in accordance with 
        subdivision 5 applies to each commercial-industrial property 
        subject to taxation within a municipality, including property 
        located within any tax increment financing district, as defined 
        in section 469.174, subdivision 9, to that portion of the net 
        tax capacity of the item which bears the same proportion to its 
        total net tax capacity as 40 percent of the amount determined 
        pursuant to sections 6 and 7 is to the amount determined 
        pursuant to section 5.  The rate of taxation determined in 
        accordance with subdivision 4 applies in the taxation of the 
        remainder of the net tax capacity of the item. 
           Subd. 8.  [CERTIFICATION OF VALUES; PAYMENT.] The 
        administrative auditor shall determine for each county the 
        difference between the total levy on distribution value pursuant 
        to subdivision 3, clause (a), within the county and the total 
        tax on contribution value pursuant to subdivision 7, within the 
        county.  On or before May 16 of each year, the administrative 
        auditor shall certify the differences so determined to each 
        county auditor.  In addition, the administrative auditor shall 
        certify to those county auditors for whose county the total tax 
        on contribution value exceeds the total levy on distribution 
        value the settlement the county is to make to the other counties 
        of the excess of the total tax on contribution value over the 
        total levy on distribution value in the county.  On or before 
        June 15 and November 15 of each year, each county treasurer in a 
        county having a total tax on contribution value in excess of the 
        total levy on distribution value shall pay one-half of the 
        excess to the other counties in accordance with the 
        administrative auditor's certification. 
           Subd. 9.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
        which the highest class rate for class 3a property changes from 
        the rate in the previous year, the following adjustments shall 
        be made to the procedures described in sections 6 to 8: 
           (1) An initial contribution tax capacity shall be 
        determined for each municipality based on the previous year's 
        class rates. 
           (2) Each jurisdiction's distribution tax capacity shall be 
        determined based upon the areawide tax base determined by 
        summing the tax capacities computed under clause (1) for all 
        municipalities and apportioning the resulting sum pursuant to 
        section 7, subdivision 5. 
           (3) Each jurisdiction's distribution levy shall be 
        determined by applying the procedures described in subdivision 
        3, clause (a), to the distribution tax capacity determined 
        pursuant to clause (2). 
           (4) Each municipality's final contribution tax capacity 
        shall be determined equal to its initial contribution tax 
        capacity multiplied by the ratio of the new highest class rate 
        for class 3a property to the previous year's highest class rate 
        for class 3a property. 
           (5) For the purposes of computing education aids and any 
        other state aids requiring the addition of the fiscal 
        disparities distribution tax capacity to the local tax capacity, 
        each municipality's final distribution tax capacity shall be 
        determined equal to its initial distribution tax capacity 
        multiplied by the ratio of the new highest class rate for class 
        3a property to the previous year's highest class rate for class 
        3a property. 
           (6) The areawide tax rate shall be determined by dividing 
        the sum of the amounts determined in clause (3) by the sum of 
        the values determined in clause (4). 
           (7) The final contribution tax capacity determined in 
        clause (4) shall also be used to determined the portion of each 
        commercial-industrial property's tax capacity subject to the 
        areawide tax rate pursuant to subdivision 7. 
           Subd. 10.  [ADJUSTMENT OF VALUES FOR OTHER COMPUTATIONS.] 
        For the purpose of computing the amount or rate of any salary, 
        aid, tax, or debt authorized, required, or limited by any 
        provision of any law or charter, where the authorization, 
        requirement, or limitation is related to any value or valuation 
        of taxable property within any governmental unit, the value or 
        net tax capacity must be adjusted to reflect the adjustments to 
        net tax capacity effected by subdivision 2, provided that:  (1) 
        in determining the market value of commercial-industrial 
        property or any class thereof within a governmental unit for any 
        purpose other than section 7, (a) the reduction required by this 
        subdivision is that amount which bears the same proportion to 
        the amount subtracted from the governmental unit's net tax 
        capacity pursuant to subdivision 2, clause (a), as the market 
        value of commercial-industrial property, or such class thereof, 
        located within the governmental unit bears to the net tax 
        capacity of commercial-industrial property, or such class 
        thereof, located within the governmental unit, and (b) the 
        increase required by this subdivision is that amount which bears 
        the same proportion to the amount added to the governmental 
        unit's net tax capacity pursuant to subdivision 2, clause (b), 
        as the market value of commercial-industrial property, or such 
        class thereof, located within the governmental unit bears to the 
        net tax capacity of commercial-industrial property, or such 
        class thereof, located within the governmental unit; and (2) in 
        determining the market value of real property within a 
        municipality for purposes of section 7, the adjustment 
        prescribed by clause (1)(a) must be made and that prescribed by 
        clause (1)(b) must not be made. 
           Sec. 9.  [276A.07] [ADJUSTMENTS IN DATES.] 
           If, because of the enactment of any other law, the date by 
        which the commissioner of revenue is required to certify to the 
        county auditors the records of proceedings affecting the net tax 
        capacity of property is advanced to a date earlier than June 30, 
        the dates specified in sections 5 to 8 and 10 may be modified in 
        the years to which the other law applies in the manner and to 
        the extent prescribed by the administrative auditor.  
           Sec. 10.  [276A.08] [REASSESSMENTS AND OMITTED PROPERTY.] 
           Subdivision 1.  [REASSESSMENT ORDERS.] If the commissioner 
        of revenue orders a reassessment of all or any portion of the 
        property in a municipality other than in the form of a 
        mathematically prescribed adjustment of valuation, or if omitted 
        property is placed upon the tax rolls, and the reassessment has 
        not been completed or the property placed upon the rolls by 
        November 15, the net tax capacity of the affected property must, 
        for purposes of sections 4 to 8, be determined from the 
        abstracts filed by the county auditor with the commissioner of 
        revenue.  
           Subd. 2.  [ADJUSTMENT OF VALUE.] If the reassessment, when 
        completed and incorporated in the commissioner's certification 
        of the net tax capacity of the municipality, or the listing of 
        omitted property, when placed on the rolls, results in an 
        increase in the net tax capacity of commercial-industrial 
        property in the municipality which differs from that used, 
        pursuant to subdivision 1, for purposes of sections 4 to 8, the 
        increase in the net tax capacity of commercial-industrial 
        property in that municipality in the succeeding year, as 
        otherwise computed under section 6, must be adjusted in a like 
        amount, by an increase if the reassessment or listing discloses 
        a larger increase than was used for purposes of sections 4 to 8, 
        or by a decrease if the reassessment or listing discloses a 
        smaller increase than was used for those purposes, provided that 
        no adjustment shall reduce the amount determined under section 6 
        to an amount less than zero.  
           Subd. 3.  [EXCEPTIONS.] Subdivisions 1 and 2 do not apply 
        to the determination of the tax rate under section 8, 
        subdivision 4, or to the determination of the net tax capacity 
        of commercial-industrial property and each item thereof for 
        purposes of section 8, subdivision 7.  
           Sec. 11.  [276A.09] [CHANGE IN STATUS OF MUNICIPALITY.] 
           If a municipality is dissolved, is consolidated with all or 
        part of another municipality, annexes territory, has a portion 
        of its territory detached from it, or is newly incorporated, the 
        secretary of state shall immediately certify that fact to the 
        commissioner of revenue.  The secretary of state shall also 
        certify to the commissioner of revenue the current population of 
        the new, enlarged, or successor municipality, if determined by 
        the Minnesota municipal board incident to consolidation, 
        annexation, or incorporation proceedings.  The population so 
        certified shall govern for purposes of sections 3 to 11 until 
        the state demographer files the first population estimate as of 
        a later date with the commissioner of revenue.  If an annexation 
        of unincorporated land occurs without proceedings before the 
        Minnesota municipal board, the population of the annexing 
        municipality as previously determined shall continue to govern 
        for purposes of sections 3 to 11 until the state demographer 
        files the first population estimate as of a later date with the 
        commissioner of revenue. 
           Sec. 12.  Minnesota Statutes 1995 Supplement, section 
        428A.05, is amended to read: 
           428A.05 [COLLECTION OF SERVICE CHARGES.] 
           Service charges may be imposed on the basis of the net tax 
        capacity of the property on which the service charge is imposed 
        but must be spread only upon the net tax capacity of the taxable 
        property located in the geographic area described in the 
        ordinance.  Service charges based on net tax capacity may be 
        payable and collected at the same time and in the same manner as 
        provided for payment and collection of ad valorem taxes.  When 
        made payable in the same manner as ad valorem taxes, service 
        charges not paid on or before the applicable due date shall be 
        subject to the same penalty and interest as in the case of ad 
        valorem tax amounts not paid by the respective due date.  The 
        due date for a service charge payable in the same manner as ad 
        valorem taxes is the due date given in law for the real or 
        personal property tax for the property on which the service 
        charge is imposed.  Service charges imposed on net tax capacity 
        which are to become payable in the following year must be 
        certified to the county auditor by the date provided in section 
        429.061, subdivision 3, for the annual certification of special 
        assessment installments.  Other service charges imposed must be 
        collected as provided by ordinance.  Service charges based on 
        net tax capacity collected under sections 428A.01 to 428A.10 are 
        not included in computations under section 469.177, chapter 276A 
        or 473F, or any other law that applies to general ad valorem 
        levies.  For the purpose of this section, "net tax capacity" 
        means the net tax capacity most recently determined at the time 
        that tax rates are determined under section 275.08. 
           Sec. 13.  Minnesota Statutes 1995 Supplement, section 
        465.82, subdivision 2, is amended to read: 
           Subd. 2.  [CONTENTS OF PLAN.] The plan must state:  
           (1) the specific cooperative activities the units will 
        engage in during the first two years of the venture; 
           (2) the steps to be taken to effect the merger of the 
        governmental units, with completion no later than four years 
        after the process begins; 
           (3) the steps by which a single governing body will be 
        created; 
           (4) changes in services provided, facilities used, 
        administrative operations and staffing to effect the preliminary 
        cooperative activities and the final merger and a two-, five-, 
        and ten-year projection of expenditures for each unit if it 
        combined and if it remained separate; 
           (5) treatment of employees of the merging governmental 
        units, specifically including provisions for reassigning 
        employees, dealing with unions, and providing financial 
        incentives to encourage early retirements; 
           (6) financial arrangements for the merger, specifically 
        including responsibility for debt service on outstanding 
        obligations of the merging entities; 
           (7) one- and two-year impact analysis, prepared by the 
        granting state agency at the request of the local government 
        unit, of major state aid revenues received for each unit if it 
        combined and if it remained separate.  This would also include 
        an impact analysis, prepared by the department of revenue, of 
        property tax revenue implications, if any, associated with tax 
        increment financing districts and fiscal disparities under 
        chapter 276A or 473F resulting from the merger; 
           (8) procedures for a referendum to be held before the 
        proposed combination to approve combining the local government 
        units, specifically stating whether a majority of those voting 
        in each district proposed for combination or a majority of those 
        voting on the question in the entire area proposed for 
        combination would be needed to pass the referendum; and 
           (9) a time schedule for implementation. 
           Notwithstanding clause (3) or any other law to the 
        contrary, all current members of the governing bodies of the 
        local governmental units that propose to combine under sections 
        465.81 to 465.88 may serve on the initial governing body of the 
        combined unit until a gradual reduction in membership is 
        achieved by foregoing election of new members when terms expire 
        until the number permitted by other law is reached. 
           Sec. 14.  Minnesota Statutes 1995 Supplement, section 
        469.175, subdivision 5, is amended to read: 
           Subd. 5.  [ANNUAL DISCLOSURE.] For all tax increment 
        financing districts, whether created prior or subsequent to 
        August 1, 1979, on or before July 1 of each year, the authority 
        shall submit to the county board, the county auditor, the school 
        board, state auditor and, if the authority is other than the 
        municipality, the governing body of the municipality, a report 
        of the status of the district.  The report shall include the 
        following information:  the amount and the source of revenue in 
        the account, the amount and purpose of expenditures from the 
        account, the amount of any pledge of revenues, including 
        principal and interest on any outstanding bonded indebtedness, 
        the original net tax capacity of the district, the captured net 
        tax capacity retained by the authority, the captured net tax 
        capacity shared with other taxing districts, the tax increment 
        received, and any additional information necessary to 
        demonstrate compliance with any applicable tax increment 
        financing plan.  An annual statement showing the tax increment 
        received and expended in that year, the original net tax 
        capacity, captured net tax capacity, amount of outstanding 
        bonded indebtedness, the amount of the district's increments 
        paid to other governmental bodies, the amount paid for 
        administrative costs, the sum of increments paid, directly or 
        indirectly, for activities and improvements located outside of 
        the district, and any additional information the authority deems 
        necessary shall be published in a newspaper of general 
        circulation in the municipality.  If the fiscal disparities 
        contribution under chapter 276A or 473F for the district is 
        computed under section 469.177, subdivision 3, paragraph (a), 
        the annual statement must disclose that fact and indicate the 
        amount of increased property tax imposed on other properties in 
        the municipality as a result of the fiscal disparities 
        contribution.  The commissioner of revenue shall prescribe the 
        form of this statement and the method for calculating the 
        increased property taxes. 
           Sec. 15.  Minnesota Statutes 1994, section 469.177, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TAX INCREMENT, RELATIONSHIP TO CHAPTER CHAPTERS 
        276A AND 473F.] (a) Unless the governing body elects pursuant to 
        clause (b) the following method of computation shall apply: 
           (1) The original net tax capacity and the current net tax 
        capacity shall be determined before the application of the 
        fiscal disparity provisions of chapter 276A or 473F.  Where the 
        original net tax capacity is equal to or greater than the 
        current net tax capacity, there is no captured net tax capacity 
        and no tax increment determination.  Where the original net tax 
        capacity is less than the current net tax capacity, the 
        difference between the original net tax capacity and the current 
        net tax capacity is the captured net tax capacity.  This amount 
        less any portion thereof which the authority has designated, in 
        its tax increment financing plan, to share with the local taxing 
        districts is the retained captured net tax capacity of the 
        authority.  
           (2) The county auditor shall exclude the retained captured 
        net tax capacity of the authority from the net tax capacity of 
        the local taxing districts in determining local taxing district 
        tax rates.  The local tax rates so determined are to be extended 
        against the retained captured net tax capacity of the authority 
        as well as the net tax capacity of the local taxing districts.  
        The tax generated by the extension of the lesser of (A) the 
        local taxing district tax rates or (B) the original local tax 
        rate to the retained captured net tax capacity of the authority 
        is the tax increment of the authority.  
           (b) The governing body may, by resolution approving the tax 
        increment financing plan pursuant to section 469.175, 
        subdivision 3, elect the following method of computation: 
           (1) The original net tax capacity shall be determined 
        before the application of the fiscal disparity provisions of 
        chapter 276A or 473F.  The current net tax capacity shall 
        exclude any fiscal disparity commercial-industrial net tax 
        capacity increase between the original year and the current year 
        multiplied by the fiscal disparity ratio determined pursuant to 
        section 276A.06, subdivision 7, or 473F.08, subdivision 6.  
        Where the original net tax capacity is equal to or greater than 
        the current net tax capacity, there is no captured net tax 
        capacity and no tax increment determination.  Where the original 
        net tax capacity is less than the current net tax capacity, the 
        difference between the original net tax capacity and the current 
        net tax capacity is the captured net tax capacity.  This amount 
        less any portion thereof which the authority has designated, in 
        its tax increment financing plan, to share with the local taxing 
        districts is the retained captured net tax capacity of the 
        authority.  
           (2) The county auditor shall exclude the retained captured 
        net tax capacity of the authority from the net tax capacity of 
        the local taxing districts in determining local taxing district 
        tax rates.  The local tax rates so determined are to be extended 
        against the retained captured net tax capacity of the authority 
        as well as the net tax capacity of the local taxing districts.  
        The tax generated by the extension of the lesser of (A) the 
        local taxing district tax rates or (B) the original local tax 
        rate to the retained captured net tax capacity of the authority 
        is the tax increment of the authority.  
           (3) An election by the governing body pursuant to paragraph 
        (b) shall be submitted to the county auditor by the authority at 
        the time of the request for certification pursuant to 
        subdivision 1. 
           (c) The method of computation of tax increment applied to a 
        district pursuant to paragraph (a) or (b) shall remain the same 
        for the duration of the district, except that the governing body 
        may elect to change its election from the method of computation 
        in paragraph (a) to the method in paragraph (b). 
           Sec. 16.  Minnesota Statutes 1994, section 477A.011, 
        subdivision 20, is amended to read: 
           Subd. 20.  [CITY NET TAX CAPACITY.] "City net tax capacity" 
        means (1) the net tax capacity computed using the net tax 
        capacity rates in section 273.13, and the market values for 
        taxes payable in the year prior to the aid distribution plus (2) 
        a city's fiscal disparities distribution tax capacity under 
        section 276A.06, subdivision 2, paragraph (b), or 473F.08, 
        subdivision 2, paragraph (b), for taxes payable in the year 
        prior to that for which aids are being calculated.  The market 
        value utilized in computing city net tax capacity shall be 
        reduced by the sum of (1) a city's market value of commercial 
        industrial property as defined in section 276A.01, subdivision 
        3, or 473F.02, subdivision 3, multiplied by the ratio determined 
        pursuant to section 276A.06, subdivision 2, paragraph (a), or 
        473F.08, subdivision 2, paragraph (a), (2) the market value of 
        the captured value of tax increment financing districts as 
        defined in section 469.177, subdivision 2, and (3) the market 
        value of transmission lines deducted from a city's total net tax 
        capacity under section 273.425.  The city net tax capacity will 
        be computed using equalized market values.  
           Sec. 17.  Minnesota Statutes 1994, section 477A.011, 
        subdivision 27, is amended to read: 
           Subd. 27.  [REVENUE BASE.] "Revenue base" means the amount 
        levied for taxes payable in the previous year, including the 
        levy on the fiscal disparity distribution under section 276A.06, 
        subdivision 3, paragraph (a), or 473F.08, subdivision 3, 
        paragraph (a), and before reduction for the homestead and 
        agricultural credit aid under section 273.1398, subdivision 2, 
        equalization aid under section 477A.013, subdivision 5, and 
        disparity reduction aid under section 273.1398, subdivision 3; 
        plus the originally certified local government aid in the 
        previous year under sections 477A.011, 477A.012, and 477A.013, 
        except for 477A.013, subdivision 5; and the taconite aids 
        received in the previous year under sections 298.28 and 298.282. 
           Sec. 18.  Minnesota Statutes 1994, section 477A.011, 
        subdivision 32, is amended to read: 
           Subd. 32.  [COMMERCIAL INDUSTRIAL PERCENTAGE.] "Commercial 
        industrial percentage" for a city is 100 times the sum of the 
        estimated market values of all real property in the city 
        classified as class 3 under section 273.13, subdivision 24, 
        excluding public utility property, to the total market value of 
        all taxable real and personal property in the city.  The market 
        values are the amounts computed before any adjustments for 
        fiscal disparities under section 276A.06 or 473F.08.  The market 
        values used for this subdivision are not equalized. 
           Sec. 19.  Minnesota Statutes 1994, section 477A.011, 
        subdivision 35, is amended to read: 
           Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" means the 
        sum of the net levy for all cities divided by the sum of the 
        city net tax capacity for all cities.  For purposes of this 
        section, "net levy" means the city levy, after all adjustments, 
        used for calculating the local tax rate under section 275.08 for 
        taxes payable in the year prior to the aid distribution.  The 
        fiscal disparity distribution levy under chapter 276A or 473F is 
        included in net levy. 
           Sec. 20.  [EFFECTIVE DATE.] 
           Sections 1 to 19 are effective July 1, 1997, for taxes 
        levied in 1997, payable in 1998 and subsequent years, except as 
        provided in section 5. 
                                   ARTICLE 12 
                                 TACONITE TAXES 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        298.227, is amended to read: 
           298.227 [TACONITE ECONOMIC DEVELOPMENT FUND.] 
           An amount equal to that distributed pursuant to each 
        taconite producer's taxable production and qualifying sales 
        under section 298.28, subdivision 9a, shall be held by the iron 
        range resources and rehabilitation board in a separate taconite 
        economic development fund for each taconite and direct reduced 
        ore producer.  Money from the fund for each producer shall be 
        released only on the written authorization of a joint committee 
        consisting of an equal number of representatives of the salaried 
        employees and the nonsalaried production and maintenance 
        employees of that producer.  The district 33 11 director of the 
        United States Steelworkers of America, on advice of each local 
        employee president, shall select the employee members.  In 
        nonorganized operations, the employee committee shall be elected 
        by the nonsalaried production and maintenance employees.  Each 
        producer's joint committee may authorize release of the funds 
        held pursuant to this section only for acquisition of equipment 
        and facilities for the producer or for research and development 
        in Minnesota on new mining, or taconite, iron, or steel 
        production technology.  Funds may be released only upon a 
        majority vote of the representatives of the committee.  If a 
        taconite production facility is sold after operations at the 
        facility had ceased, any money remaining in the fund for the 
        former producer may be released to the purchaser of the facility 
        on the terms otherwise applicable to the former producer under 
        this section.  Any portion of the fund which is not released by 
        a joint committee within two years of its deposit in the fund 
        shall be divided between the taconite environmental protection 
        fund created in section 298.223 and the northeast Minnesota 
        economic protection trust fund created in section 298.292 for 
        placement in their respective special accounts.  Two-thirds of 
        the unreleased funds shall be distributed to the taconite 
        environmental protection fund and one-third to the northeast 
        Minnesota economic protection trust fund.  This section is 
        effective for taxes payable in 1993 and 1994. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        298.24, subdivision 1, is amended to read: 
           Subdivision 1.  (a) For concentrate produced in 1992, 1993, 
        1994, and 1995 there is imposed upon taconite and iron 
        sulphides, and upon the mining and quarrying thereof, and upon 
        the production of iron ore concentrate therefrom, and upon the 
        concentrate so produced, a tax of $2.054 per gross ton of 
        merchantable iron ore concentrate produced therefrom.  
           (b) For concentrates produced in 1996 and subsequent years, 
        the tax rate shall be equal to the preceding year's tax rate 
        plus an amount equal to the preceding year's tax rate multiplied 
        by the percentage increase in the implicit price deflator from 
        the fourth quarter of the second preceding year to the fourth 
        quarter of the preceding year, provided that, for concentrates 
        produced in 1996 only, the increase in the rate of tax imposed 
        under this section over the rate imposed for the previous year 
        may not exceed four cents per ton.  "Implicit price deflator" 
        for the gross national product means the implicit price deflator 
        prepared by the bureau of economic analysis of the United States 
        Department of Commerce.  
           (c) The tax shall be imposed on the average of the 
        production for the current year and the previous two years.  The 
        rate of the tax imposed will be the current year's tax rate.  
        This clause shall not apply in the case of the closing of a 
        taconite facility if the property taxes on the facility would be 
        higher if this clause and section 298.25 were not applicable.  
           (d) If the tax or any part of the tax imposed by this 
        subdivision is held to be unconstitutional, a tax of $2.054 per 
        gross ton of merchantable iron ore concentrate produced shall be 
        imposed.  
           (e) Consistent with the intent of this subdivision to 
        impose a tax based upon the weight of merchantable iron ore 
        concentrate, the commissioner of revenue may indirectly 
        determine the weight of merchantable iron ore concentrate 
        included in fluxed pellets by subtracting the weight of the 
        limestone, dolomite, or olivine derivatives or other basic flux 
        additives included in the pellets from the weight of the 
        pellets.  For purposes of this paragraph, "fluxed pellets" are 
        pellets produced in a process in which limestone, dolomite, 
        olivine, or other basic flux additives are combined with 
        merchantable iron ore concentrate.  No subtraction from the 
        weight of the pellets shall be allowed for binders, mineral and 
        chemical additives other than basic flux additives, or moisture. 
           (f)(1) Notwithstanding any other provision of this 
        subdivision, for the first five years of a plant's production of 
        direct reduced ore, the rate of the tax on direct reduced ore is 
        determined under this paragraph.  As used in this paragraph, 
        "direct reduced ore" is ore that results in a product that has 
        an iron content of at least 75 percent.  The rate to be applied 
        to direct reduced ore is 25 percent of the rate otherwise 
        determined under this subdivision for the first 500,000 of 
        taxable tons for the production year, and 50 percent of the rate 
        otherwise determined for any remainder.  If the taxpayer had no 
        production in the two years prior to the the current production 
        year, the tonnage eligible to be taxed at 25 percent of the rate 
        otherwise determined under this subdivision is the first 166,667 
        tons.  If the taxpayer had some production in the year prior to 
        the current production year but no production in the second 
        prior year, the tonnage eligible to be taxed at 25 percent of 
        the rate otherwise determined under this subdivision is the 
        first 333,333 tons. 
           (2) Production of direct reduced ore in this state is 
        subject to the tax imposed by this section, but if that 
        production is not produced by a producer of taconite or iron 
        sulfides, the production of taconite or iron sulfides consumed 
        in the production of direct reduced iron in this state is not 
        subject to the tax imposed by this section on taconite or iron 
        sulfides. 
           Sec. 3.  Minnesota Statutes 1994, section 298.28, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] 
        2.5 4.5 cents per gross ton of merchantable iron ore 
        concentrate, hereinafter referred to as "taxable ton," must be 
        allocated to the city or town in the county in which the lands 
        from which taconite was mined or quarried were located or within 
        which the concentrate was produced.  If the mining, quarrying, 
        and concentration, or different steps in either thereof are 
        carried on in more than one taxing district, the commissioner 
        shall apportion equitably the proceeds of the part of the tax 
        going to cities and towns among such subdivisions upon the basis 
        of attributing 40 percent of the proceeds of the tax to the 
        operation of mining or quarrying the taconite, and the remainder 
        to the concentrating plant and to the processes of 
        concentration, and with respect to each thereof giving due 
        consideration to the relative extent of such operations 
        performed in each such taxing district.  The commissioner's 
        order making such apportionment shall be subject to review by 
        the tax court at the instance of any of the interested taxing 
        districts, in the same manner as other orders of the 
        commissioner. 
           Sec. 4.  Minnesota Statutes 1994, section 298.28, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PROPERTY TAX RELIEF.] (a) Fifteen cents per 
        taxable ton, less any amount required to be distributed under 
        paragraphs (b) and (c), and less any amount required to be 
        deducted under paragraph (d), must be allocated to St. Louis 
        county acting as the counties' fiscal agent, to be distributed 
        as provided in sections 273.134 to 273.136. 
           (b) If an electric power plant owned by and providing the 
        primary source of power for a taxpayer mining and concentrating 
        taconite is located in a county other than the county in which 
        the mining and the concentrating processes are conducted, .1875 
        cent per taxable ton of the tax imposed and collected from such 
        taxpayer shall be paid to the county. 
           (c) If an electric power plant owned by and providing the 
        primary source of power for a taxpayer mining and concentrating 
        taconite is located in a school district other than a school 
        district in which the mining and concentrating processes are 
        conducted, .5625 cent per taxable ton of the tax imposed and 
        collected from the taxpayer shall be paid to the school district.
           (d) Two cents per taxable ton must be deducted from the 
        amount allocated to the St. Louis county auditor under paragraph 
        (a). 
           Sec. 5.  Minnesota Statutes 1995 Supplement, section 
        298.28, subdivision 9a, is amended to read: 
           Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
        cents per ton for distributions in 1994, 1995, 1996, and 20.4 
        cents per ton for distributions in 1997, 1998, and 1999 shall be 
        paid to the taconite economic development fund.  No distribution 
        shall be made under this paragraph in any year in which total 
        industry production falls below 30 million tons. 
           (b) An amount equal to 50 percent of the tax under section 
        298.24 for concentrate sold in the form of pellet chips and 
        fines not exceeding 5/16 inch in size and not including crushed 
        pellets shall be paid to the taconite economic development 
        fund.  The amount paid shall not exceed $700,000 annually for 
        all companies.  If the initial amount to be paid to the fund 
        exceeds this amount, each company's payment shall be prorated so 
        the total does not exceed $700,000. 
           Sec. 6.  Minnesota Statutes 1994, section 298.296, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXPENDITURE OF FUNDS.] Before January 1, 2002, 
        funds may be expended on projects and for administration of the 
        trust fund only from the net interest, earnings, and dividends 
        arising from the investment of the trust at any time, including 
        net interest, earnings, and dividends that have arisen prior to 
        July 13, 1982, plus $10,000,000 made available for use in fiscal 
        year 1983, except that any amount required to be paid out of the 
        trust fund to provide the property tax relief specified in Laws 
        1977, chapter 423, article X, section 4, and to make school bond 
        payments and payments to recipients of taconite production tax 
        proceeds pursuant to section 298.225, may be taken from the 
        corpus of the trust.  Additionally, upon recommendation by the 
        board, up to $10,000,000 $13,000,000 from the corpus of the 
        trust may be made available for use as provided in subdivision 
        4, and up to $10,000,000 from the corpus of the trust may be 
        made available for use as provided in section 298.2961.  On and 
        after January 1, 2002, funds may be expended on projects and for 
        administration from any assets of the trust.  Annual 
        administrative costs, not including detailed engineering 
        expenses for the projects, shall not exceed five percent of the 
        net interest, dividends, and earnings arising from the trust in 
        the preceding fiscal year.  
           Principal and interest received in repayment of loans made 
        pursuant to this section, and earnings on other investments made 
        under section 298.292, subdivision 2, clause (4), shall be 
        deposited in the state treasury and credited to the trust.  
        These receipts are appropriated to the board for the purposes of 
        sections 298.291 to 298.298. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 
        298.296, subdivision 4, is amended to read: 
           Subd. 4.  [TEMPORARY LOAN AUTHORITY.] (a) The board may 
        recommend that up to $10,000,000 from the corpus of the trust 
        may be used for loans as provided in this subdivision.  The 
        money would be available for loans for construction and 
        equipping of facilities constituting (1) a value added iron 
        products plant, which may be either a new plant or a facility 
        incorporated into an existing plant that produces iron upgraded 
        to a minimum of 75 percent iron content or any iron alloy with a 
        total minimum metallic content of 90 percent; or (2) a new mine 
        or minerals processing plant for any mineral subject to the net 
        proceeds tax imposed under section 298.015.  A loan under 
        this subdivision paragraph may not exceed $5,000,000 for any 
        facility.  
           (b) Additionally, the board must reserve the first 
        $2,000,000 of the net interest, dividends, and earnings arising 
        from the investment of the trust after June 30, 1996, to be used 
        for additional grants for the purposes set forth in paragraph 
        (a).  This amount must be reserved until it is used for the 
        grants or until June 30, 1998, whichever is earlier. 
           (c) Additionally, the board may recommend that up to 
        $3,000,000 from the corpus of the trust may be used for 
        additional grants for the purposes set forth in paragraph (a). 
           (d) The board may require that it receive an equity 
        percentage in any project to which it contributes under this 
        section. 
           (e) The authority to make loans and grants under this 
        subdivision terminates December 31, 1997 June 30, 1998. 
           Sec. 8.  [298.2961] [PRODUCER GRANTS.] 
           Subdivision 1.  [APPROPRIATION.] $10,000,000 is 
        appropriated from the northeast Minnesota economic protection 
        trust fund to a special account in the taconite area 
        environmental protection fund for grants or loans to producers 
        on a project-by-project basis as provided in this section. 
           Subd. 2.  [PROJECTS; APPROVAL.] (a) Projects funded must be 
        for: 
           (1) environmentally unique reclamation projects; or 
           (2) pit or plant expansions or modernizations other than 
        for a value added iron products plant that extend the life of 
        the plant. 
           (b) To be proposed by the board, a project must be approved 
        by at least eight iron range resources and rehabilitation board 
        members.  The money for a project may be spent only upon 
        approval of the project by the governor.  The board may submit 
        supplemental projects for approval at any time. 
           (c) The board may require that it receive an equity 
        percentage in any project to which it contributes under this 
        section.  
           Sec. 9.  [EFFECTIVE DATES.] 
           Section 1 is effective for taxes payable in 1995 and 
        thereafter.  Sections 3 to 6 are effective for production year 
        1996, distributions in 1997 and thereafter. 
                                   ARTICLE 13 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        16A.67, subdivision 5, is amended to read: 
           Subd. 5.  [COVENANTS; AGREEMENTS.] The commissioner may, 
        for and on behalf of the state, enter into such covenants and 
        agreements not inconsistent with subdivisions 1 to 4 and 
        sections 246.18, subdivisions 4 and 6; and 349A.10, subdivision 
        5, as may be necessary or desirable to facilitate the sale and 
        issuance of the bonds on terms favorable to the state, 
        including, but not limited to, covenants and agreements relating 
        to the payment of and security for the bonds, tax-exemption, and 
        disclosure of information required by federal and state 
        securities laws.  Such covenants and agreements of the 
        commissioner constitute an enforceable contract of the state and 
        the state pledges and agrees with the holders of any bonds that 
        the state will not limit or alter the rights vested in the 
        commissioner to fulfill the terms of any such covenants or 
        agreements made with the holders of the bonds, or in any way 
        impair the rights and remedies of the holders until the bonds, 
        together with the interest thereon, with interest on any unpaid 
        installments of interest, and all costs and expenses in 
        connection with any action or proceeding by or on behalf of such 
        holders, are fully met and discharged.  The commissioner is 
        authorized to include this pledge and agreement of the state in 
        any covenant or agreement with the holders of such bonds.  Such 
        covenants may not include covenants to continue to operate the 
        state lottery but may include covenants to continue to seek 
        payment by and reimbursement from nonstate sources of health 
        care costs so long as any bonds issued pursuant to this section 
        are outstanding.  The provisions of sections 16A.672 and 16A.675 
        are applicable to the bonds. 
           Sec. 2.  Minnesota Statutes 1994, section 115.26, is 
        amended by adding a subdivision to read: 
           Subd. 5.  (a) In order to maintain the integrity of and 
        facilitate access to district systems, works, or facilities, the 
        district may maintain and repair a road by agreement with the 
        entity that was responsible for the performance of maintenance 
        and repair immediately prior to the agreement.  Maintenance and 
        repair includes, but is not limited to, providing lighting, snow 
        removal, and grass mowing. 
           (b) A district shall establish a taxing subdistrict of 
        benefited property and shall levy special taxes, pursuant to 
        section 115.33, subdivision 2, for the purposes of paying the 
        cost of improvement or maintenance of a road under paragraph (a).
           (c) For purposes of this subdivision, a district shall not 
        be construed as a road authority under chapter 160. 
           (d) The district and its officers and employees are exempt 
        from liability for any tort claim for injury to person or 
        property arising from travel on a road maintained by the 
        district and related to its maintenance or condition. 
           Sec. 3.  Minnesota Statutes 1994, section 115A.919, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [JOINT POWERS AGREEMENT.] If a facility is owned 
        by a joint powers board, total fees in excess of $1 per cubic 
        yard or equivalent may not be imposed or revenue expended under 
        subdivision 1 or 2 without the approval of the board. 
           Sec. 4.  Minnesota Statutes 1994, section 115A.923, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [PAYMENT OF THE GREATER MINNESOTA LANDFILL 
        CLEANUP FEE.] The operator of a disposal facility in greater 
        Minnesota shall remit the fees collected under subdivision 1 to 
        the county or sanitary district where the facility is located, 
        except that the operator of a facility that is owned by a 
        statutory or home rule city shall remit the fees to the city 
        that owns the facility and the operator of a facility that is 
        owned by a joint powers board shall remit the fees to the 
        board.  The county, city, joint powers board, or sanitary 
        district may use the revenue from the fees only for the purposes 
        specified in section 115A.919. 
           Sec. 5.  Minnesota Statutes 1994, section 270.067, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PREPARATION; SUBMISSION.] The commissioner of 
        revenue shall prepare a tax expenditure budget for the state. 
        The tax expenditure budget report shall be submitted to the 
        legislature as a supplement to the governor's budget and at the 
        same time as provided for submission of the budget pursuant to 
        section 16A.11, subdivision 1 by February 1 of each 
        even-numbered year. 
           Sec. 6.  Minnesota Statutes 1994, section 270.102, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) The following terms used 
        in this section have the following meanings. 
           (b) "Successor" means a person who directly or indirectly 
        purchases, acquires, is gifted, or succeeds to the business or 
        stock of goods of any person quitting, selling, or otherwise 
        disposing of a business or stock of goods.  Successor does not 
        include a personal representative or beneficiary of an estate, a 
        trustee in bankruptcy, a debtor in possession, a receiver, a 
        secured party, a mortgagee, an assignee of rents, or any other 
        lienholder.  
           (c) "Person" means an individual, partnership, corporation, 
        sole proprietorship, joint venture, limited liability company, 
        or any other type of business entity or association.  
           (d) "Withhold" means setting aside money or dealing with 
        the payment of consideration in a manner that denies a 
        transferring business the benefit of the transfer in an amount 
        equal to the sales and withholding tax liability of the 
        transferring business.  
           (e) "Purchase price" means the consideration paid or to be 
        paid for the transfer by the successor to the transferring 
        business, and includes amounts paid for tangible property or 
        intangibles such as leases, licenses, or goodwill.  Purchase 
        price also includes debts assumed or forgiven by the successor, 
        or real or personal property conveyed or to be conveyed by the 
        successor to the transferring business.  
           (f) "Arm's length transaction" means a transfer for 
        adequate consideration between independent parties both acting 
        in their own best interests.  If the parties are related to each 
        other, a rebuttable presumption arises that the transaction is 
        not at arm's length.  
           (g) "Transfer" means every mode, direct or indirect, 
        absolute or conditional, voluntary or involuntary, of disposing 
        of or parting with a business or an interest in a business, or a 
        stock of goods, whether by gift or for consideration.  Transfer 
        includes a change in the type of business entity or the name of 
        the business, where one business is discontinued and a new one 
        started.  Transfer also includes the acquisition by a new 
        corporation of the assets of a prior business in exchange for 
        the stock of the new corporation.  Transfer does not include an 
        assignment for the benefit of creditors, foreclosure or 
        enforcement of a mortgage, assignment of rents, security 
        interest or lien, sale or disposition in a bankruptcy 
        proceeding, or sale or disposition by a receiver. 
           (h) "Transfer in bulk" means a transfer, other than in the 
        ordinary course of the transferor's trade or business, of more 
        than one-half of all the property of a business at all locations 
        combined, as measured by the value of the property at the time 
        of the transfer. 
           Sec. 7.  Minnesota Statutes 1994, section 270.102, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BULK TRANSFERS; LIABILITY OF SUCCESSOR; LIEN.] 
        (a) Whenever a business transfers in bulk to a successor all or 
        any part of the business assets, other than in the ordinary 
        course of business, and a an enforceable lien for unpaid sales 
        and withholding taxes has been filed against the business by the 
        commissioner under section 270.69 in the office of the secretary 
        of state or in the office of the county recorder for the county 
        in which the business is located, at least 20 days before taking 
        possession of the assets or paying the purchase price, the 
        successor shall notify the commissioner of the transfer and the 
        terms and conditions related to it.  The notice must include the 
        tax identification number of the transferring business.  If an 
        agreement to transfer has been entered into, this notice 
        requirement only applies:  (1) if a lien described under this 
        paragraph has been filed prior to the date of the agreement; or 
        (2) if the date of the transfer is more than 30 days after the 
        date of the agreement, and a lien described under this paragraph 
        is filed at least 30 days prior to the date of transfer. 
           (b) If the successor fails to give the notice required in 
        paragraph (a), the successor is liable for any unpaid sales and 
        withholding taxes, interest, and penalties due from the 
        transferring business to the extent of the purchase price.  If 
        the successor provides the notice required in paragraph (a) and, 
        within 20 days after receipt of the notice, the commissioner 
        notifies the successor that tax liabilities exist in addition to 
        those included on the lien or there are sales and withholding 
        tax returns due but not filed, the successor is, in addition to 
        being liable for the amounts included on the lien, liable for 
        all other uncontested sales and withholding taxes, interest, and 
        penalties as stated in the commissioner's notice from the 
        transferring business to the extent of the purchase price if the 
        successor pays the purchase price or takes possession of the 
        assets without withholding and remitting the liability to the 
        commissioner.  The successor is liable whether the purchase 
        price is paid or the assets are transferred prior to or after 
        notification from the commissioner.  The commissioner may also 
        notify the successor that there are no sales or withholding tax 
        liabilities or returns due from the transferring business other 
        than the liabilities included on the lien, and of the current 
        balance due to satisfy the lien. 
           (c) The commissioner shall have a first priority lien for 
        all consideration paid or to be paid toward the purchase price 
        when the requirements of this section have not been met.  
           (d) If, based upon the information available, the 
        commissioner determines that a transfer was not at arm's length 
        or was a gift, the successor's liability under this section 
        equals the value of the assets transferred.  For purposes of 
        imposing the liability, the value of the property transferred is 
        presumed, subject to rebuttal, to equal the unpaid sales and 
        withholding taxes, interest, and penalties of the transferring 
        business. 
           (e) (d) In the case of a gift resulting in successor 
        liability under this section, return of the gifted property by 
        the donee to the donor releases the donee's successor liability. 
           (f) The liability imposed by this section does not include 
        assignments for the benefit of creditors under chapter 577, 
        foreclosures of mortgages under chapters 580 to 582 or of 
        security interests arising under article 9 of the Uniform 
        Commercial Code, or sales by trustees in bankruptcy.  
           (g) (e) A successor who complies with the requirements of 
        paragraphs (a) and (b) is not liable for any assessments of 
        sales and withholding taxes of the transferring business made 
        after the commissioner provides notice to the successor under 
        paragraph (b), except for taxes assessed on returns filed to 
        comply with the notice.  If the commissioner fails to provide 
        the notice and the 20-day period expires, the successor is not 
        liable for any sales and withholding taxes of the transferring 
        business other than those included on the lien.  
           Sec. 8.  Minnesota Statutes 1994, section 270.102, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ASSESSMENT PROCEDURE; NO STAY ON COLLECTION 
        REMEDIES.] The commissioner may assess liability under this 
        section within the time prescribed for collecting the underlying 
        sales and withholding taxes, interest, and penalties.  The 
        assessment is presumed to be valid, and the burden is upon the 
        successor to show it is incorrect or invalid.  An order 
        assessing successor liability is reviewable administratively 
        under section 289A.65 and is appealable to tax court under 
        chapter 271.  The commissioner may abate an assessment if the 
        successor's failure to give the notice required under this 
        section is due to reasonable cause.  The procedural and appeal 
        provisions under section 270.07, subdivision 6, apply to 
        abatement requests under this subdivision.  Collection remedies 
        available against the transferring business are available 
        against the successor from the date of assessment of successor 
        liability.  
           Sec. 9.  Minnesota Statutes 1994, section 270.70, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTICE AND DEMAND; COLLECTION BY LEVY; JEOPARDY 
        COLLECTION.] (a) Before a levy is made, notice and demand for 
        payment of the amount due must be given to the person liable for 
        the payment or collection of the tax at least 30 days prior to 
        the levy.  The notice required under this paragraph must be sent 
        to the taxpayer's last known address and must include a brief 
        statement that sets forth in simple and nontechnical terms: 
           (1) the administrative appeals available to the taxpayer 
        with respect to the levy and sale; and 
           (2) the alternatives available to the taxpayer that can 
        prevent a levy, including installment payment agreements under 
        section 270.67, subdivision 2. 
           (b) Notwithstanding the stay of collection provisions in 
        sections 270.10, subdivision 5, and 289A.37, subdivision 1, 
        paragraph (b), and the notice provisions in paragraph (a), if 
        the commissioner has reason to believe that collection of the 
        tax is in jeopardy, notice and demand for immediate payment of 
        the tax may be made.  If the tax is not paid, the commissioner 
        may proceed to collect by levy or by filing a lien under section 
        270.69.  
           Sec. 10.  Minnesota Statutes 1994, section 270A.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CLAIMANT AGENCY.] "Claimant agency" means any 
        state agency, as defined by section 14.02, subdivision 2, the 
        regents of the University of Minnesota, any district court of 
        the state, any county, any statutory or home rule charter city 
        presenting a claim for a municipal hospital or a public library, 
        a hospital district, any public agency responsible for child 
        support enforcement, any public agency responsible for the 
        collection of court-ordered restitution, and any public agency 
        established by general or special law that is responsible for 
        the administration of a low-income housing program. 
           Sec. 11.  Minnesota Statutes 1995 Supplement, section 
        270A.03, subdivision 7, is amended to read: 
           Subd. 7.  [REFUND.] "Refund" means an individual income tax 
        refund or political contribution refund, pursuant to chapter 
        290, or a property tax credit or refund, pursuant to chapter 
        290A.  
           For purposes of this chapter, lottery prizes, as set forth 
        in section 349A.08, subdivision 8, shall be treated as refunds. 
           In the case of a joint property tax refund payable to 
        spouses under chapter 290A, the refund shall be considered as 
        belonging to each spouse in the proportion of the total refund 
        that equals each spouse's proportion of the total income 
        determined under section 290A.03, subdivision 3.  In the case of 
        a joint income tax refund under chapter 289A, the refund shall 
        be considered as belonging to each spouse in the proportion of 
        the total refund that equals each spouse's proportion of the 
        total taxable income determined under section 290.01, 
        subdivision 29.  The commissioner shall remit the entire refund 
        to the claimant agency, which shall, upon the request of the 
        spouse who does not owe the debt, determine the amount of the 
        refund belonging to that spouse and refund the amount to that 
        spouse. 
           Sec. 12.  Minnesota Statutes 1994, section 297E.02, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 
        on the sale of each deal of pull-tabs and tipboards sold by a 
        distributor.  The rate of the tax is two percent of the ideal 
        gross of the pull-tab or tipboard deal.  The sales tax imposed 
        by chapter 297A on the sale of the pull-tabs and tipboards by 
        the distributor is imposed on the retail sales price less the 
        tax imposed by this subdivision.  The retail sale of pull-tabs 
        or tipboards by the organization is exempt from taxes imposed by 
        chapter 297A and is exempt from all local taxes and license fees 
        except a fee authorized under section 349.16, subdivision 8.  
           (b) The liability for the tax imposed by this section is 
        incurred when the pull-tabs and tipboards are delivered by the 
        distributor to the customer or to a common or contract carrier 
        for delivery to the customer, or when received by the customer's 
        authorized representative at the distributor's place of 
        business, regardless of the distributor's method of accounting 
        or the terms of the sale.  
           The tax imposed by this subdivision is imposed on all sales 
        of pull-tabs and tipboards, except the following:  
           (1) sales to the governing body of an Indian tribal 
        organization for use on an Indian reservation; 
           (2) sales to distributors licensed under the laws of 
        another state or of a province of Canada, as long as all 
        statutory and regulatory requirements are met in the other state 
        or province; 
           (3) sales of promotional tickets as defined in section 
        349.12; and 
           (4) pull-tabs and tipboards sold to an organization that 
        sells pull-tabs and tipboards under the exemption from licensing 
        in section 349.166, subdivision 2.  A distributor shall require 
        an organization conducting exempt gambling to show proof of its 
        exempt status before making a tax-exempt sale of pull-tabs or 
        tipboards to the organization.  A distributor shall identify, on 
        all reports submitted to the commissioner, all sales of 
        pull-tabs and tipboards that are exempt from tax under this 
        subdivision.  
           (c) A distributor having a liability of $120,000 or more 
        during a fiscal year ending June 30 must remit all liabilities 
        in the subsequent calendar year by a funds transfer as defined 
        in section 336.4A-104, paragraph (a).  The funds transfer 
        payment date, as defined in section 336.4A-401, must be on or 
        before the date the tax is due.  If the date the tax is due is 
        not a funds transfer business day, as defined in section 
        336.4A-105, paragraph (a), clause (4), the payment date must be 
        on or before the funds transfer business day next following the 
        date the tax is due. 
           (d) Any customer who purchases deals of pull-tabs or 
        tipboards from a distributor may file an annual claim for a 
        refund or credit of taxes paid pursuant to this subdivision for 
        unsold pull-tab and tipboard tickets.  The claim must be filed 
        with the commissioner on a form prescribed by the commissioner 
        by March 20 of the year following the calendar year for which 
        the refund is claimed.  The refund must be filed as part of the 
        customer's February monthly return.  The refund or credit is 
        equal to two percent of the face value of the unsold pull-tab or 
        tipboard tickets.  The refund claimed will be applied as a 
        credit against tax owing under this chapter on the February 
        monthly return.  If the refund claimed exceeds the tax owing on 
        the February monthly return, that amount will be refunded.  The 
        amount refunded will bear interest pursuant to section 270.76 
        from 90 days after the claim is filed.  
           Sec. 13.  Minnesota Statutes 1994, section 297E.02, 
        subdivision 10, is amended to read: 
           Subd. 10.  [REFUNDS; APPROPRIATION.] A person who has, 
        under this chapter, paid to the commissioner an amount of tax 
        for a period in excess of the amount legally due for that 
        period, may file with the commissioner a claim for a refund of 
        the excess.  The amount necessary to pay the refunds under this 
        subdivision and subdivision 4, paragraph (d), is appropriated 
        from the general fund to the commissioner. 
           Sec. 14.  Minnesota Statutes 1994, section 298.17, is 
        amended to read: 
           298.17 [OCCUPATION TAXES TO BE APPORTIONED.] 
           All occupation taxes paid by persons, copartnerships, 
        companies, joint stock companies, corporations, and 
        associations, however or for whatever purpose organized, engaged 
        in the business of mining or producing iron ore or other ores, 
        when collected shall be apportioned and distributed in 
        accordance with the Constitution of the state of Minnesota, 
        article X, section 3, in the manner following:  90 percent shall 
        be deposited in the state treasury and credited to the general 
        fund of which four-ninths shall be used for the support of 
        elementary and secondary schools; and ten percent of the 
        proceeds of the tax imposed by this section shall be deposited 
        in the state treasury and credited to the general fund for the 
        general support of the university.  Of the moneys apportioned to 
        the general fund by this section there is annually appropriated 
        and credited to the iron range resources and rehabilitation 
        board account in the special revenue fund an amount equal to 
        that which would have been generated by a one 1.5 cent tax 
        imposed by section 298.24 on each taxable ton produced in the 
        preceding calendar year, to be expended for the purposes of 
        section 298.22.  The money appropriated pursuant to this section 
        shall be used (1) to provide environmental development grants to 
        local governments located within any county in region 3 as 
        defined in governor's executive order number 60, issued on June 
        12, 1970, which does not contain a municipality qualifying 
        pursuant to section 273.134 or (2) to provide economic 
        development loans or grants to businesses located within any 
        such county, provided that the county board or an advisory group 
        appointed by the county board to provide recommendations on 
        economic development shall make recommendations to the iron 
        range resources and rehabilitation board regarding the loans.  
        Payment to the iron range resources and rehabilitation board 
        account shall be made by May 15 annually. 
           Of the money allocated to Koochiching county, one-third 
        must be paid to the small business development center/economic 
        development office currently located at the Rainy River 
        community college for its operations. 
           Sec. 15.  Minnesota Statutes 1994, section 298.75, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] Except as may otherwise be 
        provided, the following words, when used in this section, shall 
        have the meanings herein ascribed to them.  
           (1) "Aggregate material" shall mean nonmetallic natural 
        mineral aggregate including, but not limited to sand, silica 
        sand, gravel, building stone, crushed rock, limestone, and 
        granite.  Aggregate material shall not include dimension stone 
        and dimension granite.  
           (2) "Person" shall mean any individual, firm, partnership, 
        corporation, organization, trustee, association, or other entity.
           (3) "Operator" shall mean any person engaged in the 
        business of removing aggregate material from the surface or 
        subsurface of the soil, for the purpose of sale, either directly 
        or indirectly, through the use of the aggregate material in a 
        marketable product or service.  
           (4) "Extraction site" shall mean a pit, quarry, or deposit 
        containing aggregate material and any contiguous property to the 
        pit, quarry, or deposit which is used by the operator for 
        stockpiling the aggregate material.  
           (5) "Importer" shall mean any person who buys aggregate 
        material produced from a county not listed in paragraph (6) or 
        another state and causes the aggregate material to be imported 
        into a county in this state which imposes a tax on aggregate 
        material.  
           (6) "County" shall mean the counties of Stearns, Benton, 
        Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, 
        Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 
        Becker, Rock, Murray, Wilkin, Big Stone, Sibley, Hennepin, 
        Washington, Chisago, and Ramsey.  
           Sec. 16.  Minnesota Statutes 1994, section 349.15, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [REFUNDS AND CREDITS.] For purposes of this 
        section "gross profit" does not include any refund or credit 
        received under section 297E.02, subdivision 4, paragraph (d). 
           Sec. 17.  Minnesota Statutes 1994, section 349.154, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NET PROFIT REPORTS.] (a) Each licensed 
        organization must report monthly to the board on a form 
        prescribed by the board each expenditure and contribution of net 
        profits from lawful gambling.  The reports must provide for each 
        expenditure or contribution: 
           (1) the name, address, and telephone number of the 
        recipient of the expenditure or contribution; 
           (2) the date the contribution was approved by the 
        organization; 
           (3) the date, amount, and check number of the expenditure 
        or contribution; 
           (4) a brief description of how the expenditure or 
        contribution meets one or more of the purposes in section 
        349.12, subdivision 25; and 
           (5) in the case of expenditures authorized under section 
        349.12, subdivision 25, paragraph (a), clause (7), whether the 
        expenditure is for a facility or activity that primarily 
        benefits male or female participants. 
           (b) The board shall make available to the commissioners of 
        revenue and public safety copies of reports received under this 
        subdivision and requested by them. 
           (c) The report required under this subdivision must provide 
        for a separate accounting for all expenditures from the 
        reporting organization's tax refund and credit account. 
           Sec. 18.  Minnesota Statutes 1994, section 349.19, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ACCOUNTS.] Gross receipts from lawful gambling 
        by each organization must be segregated from all other revenues 
        of the conducting organization and placed in a separate 
        account.  All expenditures for expenses, taxes, and lawful 
        purposes must be made from the separate account except (1) in 
        the case of expenditures previously approved by the 
        organization's membership for emergencies as defined by board 
        rule, or (2) as provided in subdivision 2a.  The name and 
        address of the bank, the account number for the separate 
        account, and the names of organization members authorized as 
        signatories on the separate account must be provided to the 
        board when the application is submitted.  Changes in the 
        information must be submitted to the board at least ten days 
        before the change is made.  Gambling receipts must be deposited 
        into the gambling bank account within four business days of 
        completion of the bingo occasion, deal, or game from which they 
        are received.  A deal of pull-tabs is considered complete when 
        either the last pull-tab of the deal is sold or the organization 
        does not continue the play of the deal during the next scheduled 
        period of time in which the organization will conduct 
        pull-tabs.  A tipboard game is considered complete when the seal 
        on the game flare is uncovered.  Deposit records must be 
        sufficient to allow determination of deposits made from each 
        bingo occasion, deal, or game at each permitted premises.  The 
        person who accounts for gambling gross receipts and profits may 
        not be the same person who accounts for other revenues of the 
        organization. 
           Sec. 19.  Minnesota Statutes 1994, section 349.19, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [TAX REFUND AND CREDIT ACCOUNT.] (a) Each 
        organization that receives a refund or credit under section 
        297E.02, subdivision 4, paragraph (d), must establish a separate 
        account designated as the tax and credit refund account.  The 
        organization must (1) within four business days of receiving a 
        refund under that paragraph deposit the refund in the account, 
        and (2) within four business days of filing a tax return that 
        claims a credit under that paragraph, transfer from the separate 
        account established under subdivision 2 to the tax refund and 
        credit account an amount equal to the tax credit. 
           (b) The name and address of the bank, the account number 
        for the tax refund and credit account, and the names of 
        organization members authorized as signatories on the account 
        must be provided to the board within 30 days of the date when 
        the organization establishes the account.  Changes in the 
        information must be submitted to the board at least ten days 
        before the change is made. 
           (c) The organization may expend money in the account only 
        for lawful purposes, other than lawful purposes described in 
        section 349.012, subdivision 25, paragraph (a), clauses (8), 
        (9), and (12).  Amounts in the account must be spent for 
        qualifying lawful purposes no later than one year after the 
        refund is deposited. 
           Sec. 20.  Minnesota Statutes 1995 Supplement, section 
        473.39, subdivision 1b, is amended to read: 
           Subd. 1b.  [OBLIGATIONS.] The council may also issue 
        certificates of indebtedness, bonds, or other obligations under 
        this section in an amount not exceeding $62,000,000, of which 
        $44,000,000 may be used for council transit for and paratransit 
        fleet replacement, transit and paratransit facilities, and 
        transit and paratransit capital equipment, and $18,000,000 may 
        be used for transit hubs, park-and-ride lots, community-based 
        transit vehicles and replacement service program vehicles, 
        intelligent vehicle highway systems projects, and other capital 
        expenditures as prescribed in the council's transit capital 
        improvement program, and related costs including the cost of 
        issuance and sale of the obligations.  For the purposes of this 
        subdivision, uniforms are not capital expenditures. 
           Sec. 21.  Minnesota Statutes 1994, section 473.39, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [OBLIGATIONS; 1996-1998.] In addition to the 
        authority in subdivisions 1a and 1b, the council may issue 
        certificates of indebtedness, bonds, or other obligations under 
        this section in an amount not exceeding $20,500,000 which may be 
        used for capital expenditures as prescribed in the council's 
        transit capital improvement program and for related costs, 
        including the costs of issuance and sale of the obligations. 
           Sec. 22.  Minnesota Statutes 1995 Supplement, section 
        501B.38, subdivision 1a, is amended to read: 
           Subd. 1a.  [EXTENSIONS.] The information required by this 
        section must be filed annually on or before the 15th day of the 
        fifth month following the close of the charitable trust's 
        taxable year as established for federal tax purposes.  The time 
        for filing may be extended by application to the attorney 
        general, but no extension may be for more than three for up to 
        six months, provided the applicant has requested an extension to 
        file its federal tax return under section 6081 of the Internal 
        Revenue Code of 1986.  A charitable trust that files the 
        information required under this subdivision with the attorney 
        general is not required to file the same information with the 
        commissioner of revenue. 
           Sec. 23.  [REPEAL OF TEMPORARY TAX ON FACILITY ADMISSIONS.] 
           Subdivision 1.  [REPEAL.] Laws 1987, chapter 285, is 
        repealed. 
           Subd. 2.  [EFFECTIVE DATE.] Subdivision 1 is effective, 
        without local approval, the day after its final enactment. 
           Sec. 24.  [APPLICABILITY.] 
           Sections 20 and 21 apply in the counties of Anoka, Carver, 
        Dakota, Hennepin, Ramsey, Scott, and Washington. 
           Sec. 25.  [EFFECTIVE DATE.] 
           Sections 1, 9, 20, and 21 are effective the day following 
        final enactment. 
           Sections 6 to 8 are effective for business transfers, 
        acquisitions, successions, or dissolutions on or after January 
        1, 1995. 
           Section 10 is effective for refunds payable after July 31, 
        1996.  
           Section 11 is effective for refunds remitted to claimant 
        agencies on or after the day following final enactment. 
           Section 12 is effective for pull-tab and tipboard deals 
        reported as being played on or after July 1, 1996. 
           Section 15 is effective for Rock county the day after 
        compliance by Rock county with the requirements of Minnesota 
        Statutes, section 645.021, subdivision 3.  Section 15 is 
        effective for Chisago county the day after compliance by Chisago 
        county with the requirements of Minnesota Statutes, section 
        645.021, subdivision 3.  Section 15 is effective for Murray 
        county the day after compliance by Murray county with the 
        requirements of Minnesota Statutes, section 645.021, subdivision 
        3. 
           Presented to the governor April 4, 1996 
           Signed by the governor April 12, 1996, 9:58 a.m.

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