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                            CHAPTER 243-H.F.No. 2420 
                  An act relating to financing state and local 
                  government; providing a sales tax rebate; reducing 
                  individual income tax rates; making changes to income, 
                  sales and use, property, excise, mortgage registry and 
                  deed, health care provider, motor fuels, cigarette and 
                  tobacco, liquor, insurance premiums, aircraft 
                  registration, lawful gambling, taconite production, 
                  solid waste, estate, and special taxes; conforming 
                  with changes in federal income tax provisions; 
                  authorizing certain cities to impose sales taxes and 
                  issue bonds; establishing an agricultural homestead 
                  credit; changing and allowing tax credits, 
                  subtractions, and exemptions; changing property tax 
                  valuation, assessment, levy, classification, 
                  homestead, credit, aid, exemption, review, appeal, 
                  abatement, and distribution provisions; extending levy 
                  limits and changing levy authority; authorizing 
                  property tax abatements; reducing the rate of health 
                  care provider taxes; reducing tax rates on lawful 
                  gambling; changing tax increment financing law and 
                  providing special authority for certain cities; 
                  authorizing water and sanitary sewer districts; 
                  providing for the funding of courts in certain 
                  judicial districts; changing tax forfeiture and 
                  delinquency provisions; changing and clarifying tax 
                  administration, collection, enforcement, and penalty 
                  provisions; freezing the taconite production tax and 
                  providing for its distribution; regulating state and 
                  local business subsidies; authorizing issuance of 
                  certain local obligations; requiring the metropolitan 
                  airports commission to provide funding for airport 
                  noise mitigation projects; modifying payment of 
                  certain aids to local units of government; providing 
                  for funding for border cities; changing fiscal note 
                  requirements; providing for deposit of tobacco 
                  settlement funds; requiring tax rebates when there is 
                  a budget surplus; requiring a study; authorizing 
                  requirements to use alternative dispute resolution 
                  processes in annexation and similar proceedings; 
                  transferring funds; appropriating money; amending 
                  Minnesota Statutes 1998, sections 3.986, subdivision 
                  2; 3.987, subdivision 1; 16D.09; 60A.19, subdivision 
                  6; 92.51; 97A.065, subdivision 2; 204B.135, by adding 
                  a subdivision; 270.07, subdivision 1; 270.65; 270.67, 
                  by adding a subdivision; 270.78; 270A.03, subdivision 
                  2; 270A.07, subdivision 2; 270A.08, subdivision 2; 
                  271.01, subdivision 5; 271.21, subdivision 2; 272.02, 
                  subdivision 1; 272.027; 272.03, subdivision 6; 273.11, 
                  subdivisions 1a and 16; 273.111, by adding a 
                  subdivision; 273.124, subdivisions 1, 7, 8, 13, 14, 
                  and by adding a subdivision; 273.13, subdivisions 22, 
                  23, 24, 25, 31, and by adding a subdivision; 273.1382; 
                  273.1398, subdivisions 1a, 2, 8, and by adding a 
                  subdivision; 273.1399, subdivision 6; 273.20; 274.01, 
                  subdivision 1; 275.70, subdivision 5; 275.71, 
                  subdivisions 2, 3, and 4; 276.131; 279.37, 
                  subdivisions 1, 1a, and 2; 281.23, subdivisions 2, 4, 
                  and 6; 282.01, subdivisions 1, 4, and 7; 282.04, 
                  subdivision 2; 282.05; 282.08; 282.09; 282.241; 
                  282.261, subdivision 4, and by adding a subdivision; 
                  283.10; 287.01, subdivision 3, as amended; 287.05, 
                  subdivisions 1, as amended, and 1a, as amended; 
                  289A.02, subdivision 7; 289A.18, subdivision 4; 
                  289A.20, subdivision 4; 289A.31, subdivision 2; 
                  289A.40, subdivisions 1 and 1a; 289A.50, subdivision 
                  7, and by adding a subdivision; 289A.55, subdivision 
                  9; 289A.56, subdivision 4; 289A.60, subdivisions 3 and 
                  21; 290.01, subdivisions 7, 19, 19a, 19b, 19f, 19g, 
                  31, and by adding a subdivision; 290.06, subdivisions 
                  2c, 2d, and by adding subdivisions; 290.0671, 
                  subdivision 1; 290.0674, subdivisions 1 and 2; 
                  290.091, subdivisions 1, 2, and 6; 290.0921, 
                  subdivision 5; 290.095, subdivision 3; 290.17, 
                  subdivisions 3, 4, and 6; 290.191, subdivisions 2 and 
                  3; 290.9725; 290.9726, by adding a subdivision; 
                  290A.03, subdivisions 3, 6, and 15; 290B.03, 
                  subdivision 1; 290B.04, subdivisions 2, 3, and 4; 
                  290B.05, subdivision 1; 291.005, subdivision 1; 
                  295.50, subdivision 4; 295.52, subdivision 7; 295.53, 
                  subdivision 1; 295.55, subdivisions 2 and 3; 295.57, 
                  by adding a subdivision; 296A.16, by adding 
                  subdivisions; 297A.15, subdivision 5; 297A.25, 
                  subdivisions 9, 63, 73, and by adding subdivisions; 
                  297A.48, by adding subdivisions; 297E.01, by adding a 
                  subdivision; 297E.02, subdivisions 1, 3, 4, and 6; 
                  297F.01, subdivision 23; 297F.17, subdivision 6; 
                  297H.05; 297H.06, subdivision 2; 298.22, subdivision 
                  7; 298.24, subdivision 1; 298.28, subdivisions 9a and 
                  9b; 298.296, subdivision 4; 299D.03, subdivision 5; 
                  357.021, subdivision 1a; 360.55, by adding a 
                  subdivision; 373.40, subdivision 1; 375.18, 
                  subdivision 12; 375.192, subdivision 2; 383C.482, 
                  subdivision 1; 414.11; 462A.071, subdivision 2; 
                  465.82, by adding a subdivision; 469.002, subdivision 
                  10; 469.012, subdivision 1; 469.169, subdivision 12, 
                  and by adding a subdivision; 469.1735, by adding a 
                  subdivision; 469.176, subdivision 4g; 469.1763, by 
                  adding a subdivision; 469.1771, subdivision 1, and by 
                  adding a subdivision; 469.1791, subdivision 3; 
                  469.1813, subdivisions 1, 2, 3, 6, and by adding 
                  subdivisions; 469.1815, subdivision 2; 473.252, 
                  subdivision 2; 475.52, subdivisions 1, 3, and 4; 
                  477A.011, subdivision 36; 477A.03, subdivision 2; 
                  477A.06, subdivision 1; 485.018, subdivision 5; 
                  487.02, subdivision 2; 487.32, subdivision 3; 487.33, 
                  subdivision 5; and 574.34, subdivision 1; Laws 1997, 
                  chapter 231, article 1, section 19, subdivisions 1 and 
                  3; article 2, section 68, subdivision 3, as amended; 
                  article 3, section 9; Laws 1997, First Special Session 
                  chapter 3, section 27; Laws 1997, Second Special 
                  Session chapter 2, section 6; Laws 1998, chapter 389, 
                  article 8, section 44, subdivisions 5, 6, and 7, as 
                  amended; Laws 1998, chapter 645, section 3; and Laws 
                  1999, chapter 112, section 1, subdivisions 1, 3, 4, 
                  and 9; proposing coding for new law in Minnesota 
                  Statutes, chapters 16A; 116J; 275; 290; 383D; 414; and 
                  469; repealing Minnesota Statutes 1998, sections 
                  92.22; 116J.991; 273.11, subdivision 10; 280.27; 
                  281.13; 281.38; 284.01; 284.02; 284.03; 284.04; 
                  284.05; 284.06; 297E.12, subdivision 3; 297F.19, 
                  subdivision 4; 297G.18, subdivision 4; 473.252, 
                  subdivisions 4 and 5; and 477A.05; Laws 1997, chapter 
                  231, article 1, section 19, subdivision 2; and Laws 
                  1998, chapter 389, article 3, section 45. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                                SALES TAX REBATE 
           Section 1.  [STATEMENT OF PURPOSE.] 
           (a) The state of Minnesota derives revenues from a variety 
        of taxes, fees, and other sources, including the state sales tax.
           (b) It is fair and reasonable to refund the existing state 
        budget surplus in the form of a rebate of nonbusiness consumer 
        sales taxes paid by individuals in calendar year 1997. 
           (c) Information concerning the amount of sales tax paid at 
        various income levels is contained in the Minnesota tax 
        incidence report, which is written by the commissioner of 
        revenue and presented to the legislature according to Minnesota 
        Statutes, section 270.0682. 
           (d) It is fair and reasonable to use information contained 
        in the Minnesota tax incidence report to determine the 
        proportionate share of the sales tax rebate due each eligible 
        taxpayer since no effective or practical mechanism exists for 
        determining the amount of actual sales tax paid by each eligible 
        individual. 
           Sec. 2.  [SALES TAX REBATE.] 
           (a) An individual who: 
           (1) was eligible for a credit under Laws 1997, chapter 231, 
        article 1, section 16, as amended by Laws 1997, First Special 
        Session chapter 5, section 35, and Laws 1997, Third Special 
        Session chapter 3, section 11, and Laws 1998, chapter 304, and 
        Laws 1998, chapter 389, article 1, section 3, and who filed for 
        or received that credit on or before June 15, 1999; or 
           (2) filed a 1997 Minnesota income tax return on or before 
        June 15, 1999, and had a tax liability before refundable credits 
        on that return of at least $1 but did not file the claim for 
        credit authorized under Laws 1997, chapter 231, article 1, 
        section 16, as amended, and who was not allowed to be claimed as 
        a dependent on a 1997 federal income tax return filed by another 
        person; or 
           (3) had the property taxes payable on his or her homestead 
        abated to zero under Laws 1997, chapter 231, article 2, section 
        64, 
        shall receive a sales tax rebate. 
           (b) The sales tax rebate for taxpayers who qualify under 
        paragraph (a) as married filing joint or head of household must 
        be computed according to the following schedule: 
             Income                             Sales Tax Rebate
         less than $2,500                              $  358
         at least $2,500 but less than $5,000          $  469
         at least $5,000 but less than $10,000         $  502
         at least $10,000 but less than $15,000        $  549
         at least $15,000 but less than $20,000        $  604
         at least $20,000 but less than $25,000        $  641
         at least $25,000 but less than $30,000        $  690
         at least $30,000 but less than $35,000        $  762
         at least $35,000 but less than $40,000        $  820
         at least $40,000 but less than $45,000        $  874
         at least $45,000 but less than $50,000        $  921
         at least $50,000 but less than $60,000        $  969
         at least $60,000 but less than $70,000        $1,071
         at least $70,000 but less than $80,000        $1,162
         at least $80,000 but less than $90,000        $1,276
         at least $90,000 but less than $100,000       $1,417
         at least $100,000 but less than $120,000      $1,535
         at least $120,000 but less than $140,000      $1,682
         at least $140,000 but less than $160,000      $1,818
         at least $160,000 but less than $180,000      $1,946
         at least $180,000 but less than $200,000      $2,067
         at least $200,000 but less than $400,000      $2,644
         at least $400,000 but less than $600,000      $3,479
         at least $600,000 but less than $800,000      $4,175
         at least $800,000 but less than $1,000,000    $4,785
         $1,000,000 and over                           $5,000
           (c) The sales tax rebate for individuals who qualify under 
        paragraph (a) as single or married filing separately must be 
        computed according to the following schedule: 
              Income                                 Sales Tax Rebate
         less than $2,500                              $  204
         at least $2,500 but less than $5,000          $  249
         at least $5,000 but less than $10,000         $  299
         at least $10,000 but less than $15,000        $  408
         at least $15,000 but less than $20,000        $  464
         at least $20,000 but less than $25,000        $  496
         at least $25,000 but less than $30,000        $  515
         at least $30,000 but less than $40,000        $  570
         at least $40,000 but less than $50,000        $  649
         at least $50,000 but less than $70,000        $  776
         at least $70,000 but less than $100,000       $  958
         at least $100,000 but less than $140,000      $1,154
         at least $140,000 but less than $200,000      $1,394
         at least $200,000 but less than $400,000      $1,889
         at least $400,000 but less than $600,000      $2,485
         $600,000 and over                             $2,500
           (d) Individuals who were not residents of Minnesota for any 
        part of 1997 and who paid more than $10 in Minnesota sales tax 
        on nonbusiness consumer purchases in that year qualify for a 
        rebate under this paragraph only.  Qualifying nonresidents must 
        file a claim for rebate on a form prescribed by the commissioner 
        before the later of June 15, 1999, or 30 days after the date of 
        enactment of this act.  The claim must include receipts showing 
        the Minnesota sales tax paid and the date of the sale.  Taxes 
        paid on purchases allowed in the computation of federal taxable 
        income or reimbursed by an employer are not eligible for the 
        rebate.  The commissioner shall determine the qualifying taxes 
        paid and rebate the lesser of: 
           (1) 69.0 percent of that amount; or 
           (2) the maximum amount for which the claimant would have 
        been eligible as determined under paragraph (b) if the taxpayer 
        filed the 1997 federal income tax return as a married taxpayer 
        filing jointly or head of household, or as determined under 
        paragraph (c) for other taxpayers. 
           (e) "Income," for purposes of this section other than 
        paragraph (d), is taxable income as defined in section 63 of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1996, plus the sum of any additions to federal taxable income 
        for the taxpayer under Minnesota Statutes, section 290.01, 
        subdivision 19a, and reported on the original 1997 income tax 
        return including subsequent adjustments to that return made 
        within the time limits specified in paragraph (h).  For an 
        individual who was a resident of Minnesota for less than the 
        entire year, the sales tax rebate equals the sales tax rebate 
        calculated under paragraph (b) or (c) multiplied by the 
        percentage determined pursuant to Minnesota Statutes, section 
        290.06, subdivision 2c, paragraph (e), as calculated on the 
        original 1997 income tax return including subsequent adjustments 
        to that return made within the time limits specified in 
        paragraph (h).  For purposes of paragraph (d), "income" is 
        taxable income as defined in section 63 of the Internal Revenue 
        Code of 1986, as amended through December 31, 1996, and reported 
        on the taxpayer's original federal tax return for the first 
        taxable year beginning after December 31, 1996. 
           (f) Before payment, the commissioner of revenue shall 
        adjust the rebate as follows: 
           (1) the rebates calculated in paragraphs (b), (c), and (d) 
        must be proportionately reduced to account for 1997 income tax 
        returns that are filed on or after January 1, 1999, but before 
        July 1, 1999, so that the amount of sales tax rebates payable 
        under paragraphs (b), (c), and (d) does not exceed 
        $1,250,000,000; and 
           (2) the commissioner of finance shall certify by July 15, 
        1999, preliminary fiscal year 1999 general fund net nondedicated 
        revenues.  The certification shall exclude the impact of any 
        legislation enacted during the 1999 regular session.  If 
        certified net nondedicated revenues exceed the amount forecast 
        in February 1999, up to $50,000,000 of the increase shall be 
        added to the total amount rebated.  The commissioner of revenue 
        shall adjust all rebates proportionally to reflect any 
        increases.  The total amount of the rebate shall not exceed 
        $1,300,000,000. 
        The adjustments under this paragraph are not rules subject to 
        Minnesota Statutes, chapter 14. 
           (g) The commissioner of revenue may begin making sales tax 
        rebates by August 1, 1999.  Sales tax rebates not paid by 
        October 1, 1999, bear interest at the rate specified in 
        Minnesota Statutes, section 270.75. 
           (h) A sales tax rebate shall not be adjusted based on 
        changes to a 1997 income tax return that are made by order of 
        assessment after June 15, 1999, or made by the taxpayer that are 
        filed with the commissioner of revenue after June 15, 1999. 
           (i) Individuals who filed a joint income tax return for 
        1997 shall receive a joint sales tax rebate.  After the sales 
        tax rebate has been issued, but before the check has been 
        cashed, either joint claimant may request a separate check for 
        one-half of the joint sales tax rebate.  Notwithstanding 
        anything in this section to the contrary, if prior to payment, 
        the commissioner has been notified that persons who filed a 
        joint 1997 income tax return are living at separate addresses, 
        as indicated on their 1998 income tax return or otherwise, the 
        commissioner may issue separate checks to each person.  The 
        amount payable to each person is one-half of the total joint 
        rebate. 
           (j) The sales tax rebate is a "Minnesota tax law" for 
        purposes of Minnesota Statutes, section 270B.01, subdivision 8. 
           (k) The sales tax rebate is "an overpayment of any tax 
        collected by the commissioner" for purposes of Minnesota 
        Statutes, section 270.07, subdivision 5.  For purposes of this 
        paragraph, a joint sales tax rebate is payable to each spouse 
        equally. 
           (l) If the commissioner of revenue cannot locate an 
        individual entitled to a sales tax rebate by July 1, 2001, or if 
        an individual to whom a sales tax rebate was issued has not 
        cashed the check by July 1, 2001, the right to the sales tax 
        rebate lapses and the check must be deposited in the general 
        fund. 
           (m) Individuals entitled to a sales tax rebate pursuant to 
        paragraph (a), but who did not receive one, and individuals who 
        receive a sales tax rebate that was not correctly computed, must 
        file a claim with the commissioner before July 1, 2000, in a 
        form prescribed by the commissioner.  These claims must be 
        treated as if they are a claim for refund under Minnesota 
        Statutes, section 289A.50, subdivisions 4 and 7. 
           (n) The sales tax rebate is a refund subject to revenue 
        recapture under Minnesota Statutes, chapter 270A.  The 
        commissioner of revenue shall remit the entire refund to the 
        claimant agency, which shall, upon the request of the spouse who 
        does not owe the debt, refund one-half of the joint sales tax 
        rebate to the spouse who does not owe the debt. 
           (o) The rebate is a reduction of fiscal year 1999 sales tax 
        revenues.  The amount necessary to make the sales tax rebates 
        and interest provided in this section is appropriated from the 
        general fund to the commissioner of revenue in fiscal year 1999 
        and is available until June 30, 2001. 
           (p) If a sales tax rebate check is cashed by someone other 
        than the payee or payees of the check, and the commissioner of 
        revenue determines that the check has been forged or improperly 
        endorsed, the commissioner may issue an order of assessment for 
        the amount of the check against the person or persons cashing 
        it.  The assessment must be made within two years after the 
        check is cashed, but if cashing the check constitutes theft 
        under Minnesota Statutes, section 609.52, or forgery under 
        Minnesota Statutes, section 609.631, the assessment can be made 
        at any time.  The assessment may be appealed administratively 
        and judicially.  The commissioner may take action to collect the 
        assessment in the same manner as provided by Minnesota Statutes, 
        chapter 289A, for any other order of the commissioner assessing 
        tax. 
           (q) Notwithstanding Minnesota Statutes, sections 9.031, 
        16A.40, 16B.49, 16B.50, and any other law to the contrary, the 
        commissioner of revenue may take whatever actions the 
        commissioner deems necessary to pay the rebates required by this 
        section, and may, in consultation with the commissioner of 
        finance and the state treasurer, contract with a private vendor 
        or vendors to process, print, and mail the rebate checks or 
        warrants required under this section and receive and disburse 
        state funds to pay those checks or warrants. 
           (r) The commissioner may pay rebates required by this 
        section by electronic funds transfer to individuals who 
        requested that their 1998 individual income tax refund be paid 
        through electronic funds transfer.  The commissioner may make 
        the electronic funds transfer payments to the same financial 
        institution and into the same account as the 1998 individual 
        income tax refund. 
           Sec. 3.  [APPROPRIATIONS.] 
           $1,257,000 is appropriated from the general fund to the 
        commissioner of revenue to administer the sales tax rebate for 
        fiscal year 1999.  Any unencumbered balance remaining on June 
        30, 1999, does not cancel but is available for expenditure by 
        the commissioner of revenue until June 30, 2001.  This is a 
        one-time appropriation and may not be added to the agency's 
        budget base. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective the day following final 
        enactment. 
                                   ARTICLE 2
                           INCOME AND FRANCHISE TAXES 
           Section 1.  Minnesota Statutes 1998, section 16D.09, is 
        amended to read: 
           16D.09 [UNCOLLECTIBLE DEBTS.] 
           Subdivision 1.  [GENERALLY.] When a debt is determined by a 
        state agency to be uncollectible, the debt may be written off by 
        the state agency from the state agency's financial accounting 
        records and no longer recognized as an account receivable for 
        financial reporting purposes.  A debt is considered to be 
        uncollectible when (1) all reasonable collection efforts have 
        been exhausted, (2) the cost of further collection action will 
        exceed the amount recoverable, (3) the debt is legally without 
        merit or cannot be substantiated by evidence, (4) the debtor 
        cannot be located, (5) the available assets or income, current 
        or anticipated, that may be available for payment of the debt 
        are insufficient, (6) the debt has been discharged in 
        bankruptcy, (7) the applicable statute of limitations for 
        collection of the debt has expired, or (8) it is not in the 
        public interest to pursue collection of the debt.  The 
        determination of the uncollectibility of a debt must be reported 
        by the state agency along with the basis for that decision as 
        part of its quarterly reports to the commissioner of finance.  
        Determining that the debt is uncollectible does not cancel the 
        legal obligation of the debtor to pay the debt, except in the 
        case of a debt related to a tax liability that is canceled by 
        the department of revenue.  
           Subd. 2.  [NOTIFICATION OF ACTION BY DEPARTMENT OF 
        REVENUE.] When the department of revenue has determined that a 
        debt is uncollectible and has written off that debt as provided 
        in subdivision 1, the commissioner of revenue must make a 
        reasonable attempt to notify the debtor of that action and of 
        the release of any liens imposed under section 270.69 related to 
        that debt, within 30 days after the determination has been 
        reported to the commissioner of finance. 
           Sec. 2.  Minnesota Statutes 1998, section 290.01, 
        subdivision 7, is amended to read: 
           Subd. 7.  [RESIDENT.] The term "resident" means (1) any 
        individual domiciled in Minnesota, except that an individual is 
        not a "resident" for the period of time that the individual is a 
        "qualified individual" as defined in section 911(d)(1) of the 
        Internal Revenue Code, if the qualified individual notifies the 
        county within three months of moving out of the country that 
        homestead status be revoked for the Minnesota residence of the 
        qualified individual, and the property is not classified as a 
        homestead while the individual remains a qualified individual; 
        and (2) any individual domiciled outside the state who maintains 
        a place of abode in the state and spends in the aggregate more 
        than one-half of the tax year in Minnesota, unless the 
        individual or the spouse of the individual is in the armed 
        forces of the United States, or the individual is covered under 
        the reciprocity provisions in section 290.081. 
           For purposes of this subdivision, presence within the state 
        for any part of a calendar day constitutes a day spent in the 
        state.  Individuals shall keep adequate records to substantiate 
        the days spent outside the state. 
           The term "abode" means a dwelling maintained by an 
        individual, whether or not owned by the individual and whether 
        or not occupied by the individual, and includes a dwelling place 
        owned or leased by the individual's spouse. 
           Neither the commissioner nor any court shall consider 
        charitable contributions made by an individual within or without 
        the state in determining if the individual is domiciled in 
        Minnesota. 
           Sec. 3.  Minnesota Statutes 1998, section 290.01, 
        subdivision 19a, is amended to read: 
           Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
        individuals, estates, and trusts, there shall be added to 
        federal taxable income: 
           (1)(i) interest income on obligations of any state other 
        than Minnesota or a political or governmental subdivision, 
        municipality, or governmental agency or instrumentality of any 
        state other than Minnesota exempt from federal income taxes 
        under the Internal Revenue Code or any other federal statute, 
        and 
           (ii) exempt-interest dividends as defined in section 
        852(b)(5) of the Internal Revenue Code, except the portion of 
        the exempt-interest dividends derived from interest income on 
        obligations of the state of Minnesota or its political or 
        governmental subdivisions, municipalities, governmental agencies 
        or instrumentalities, but only if the portion of the 
        exempt-interest dividends from such Minnesota sources paid to 
        all shareholders represents 95 percent or more of the 
        exempt-interest dividends that are paid by the regulated 
        investment company as defined in section 851(a) of the Internal 
        Revenue Code, or the fund of the regulated investment company as 
        defined in section 851(g) of the Internal Revenue Code, making 
        the payment; and 
           (iii) for the purposes of items (i) and (ii), interest on 
        obligations of an Indian tribal government described in section 
        7871(c) of the Internal Revenue Code shall be treated as 
        interest income on obligations of the state in which the tribe 
        is located; 
           (2) the amount of income taxes paid or accrued within the 
        taxable year under this chapter and income taxes paid to any 
        other state or to any province or territory of Canada, to the 
        extent allowed as a deduction under section 63(d) of the 
        Internal Revenue Code, but the addition may not be more than the 
        amount by which the itemized deductions as allowed under section 
        63(d) of the Internal Revenue Code exceeds the amount of the 
        standard deduction as defined in section 63(c) of the Internal 
        Revenue Code.  For the purpose of this paragraph, the 
        disallowance of itemized deductions under section 68 of the 
        Internal Revenue Code of 1986, income tax is the last itemized 
        deduction disallowed; 
           (3) the capital gain amount of a lump sum distribution to 
        which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
        Reform Act of 1986, Public Law Number 99-514, applies; 
           (4) the amount of income taxes paid or accrued within the 
        taxable year under this chapter and income taxes paid to any 
        other state or any province or territory of Canada, to the 
        extent allowed as a deduction in determining federal adjusted 
        gross income.  For the purpose of this paragraph, income taxes 
        do not include the taxes imposed by sections 290.0922, 
        subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
           (5) the amount of loss or expense included in federal 
        taxable income under section 1366 of the Internal Revenue Code 
        flowing from a corporation that has a valid election in effect 
        for the taxable year under section 1362 of the Internal Revenue 
        Code, but which is not allowed to be an "S" corporation under 
        section 290.9725; 
           (6) the amount of any distributions in cash or property 
        made to a shareholder during the taxable year by a corporation 
        that has a valid election in effect for the taxable year under 
        section 1362 of the Internal Revenue Code, but which is not 
        allowed to be an "S" corporation under section 290.9725 to the 
        extent not already included in federal taxable income under 
        section 1368 of the Internal Revenue Code; 
           (7) in the year stock of a corporation that had made a 
        valid election under section 1362 of the Internal Revenue Code 
        but was not an "S" corporation under section 290.9725 is sold or 
        disposed of in a transaction taxable under the Internal Revenue 
        Code, the amount of difference between the Minnesota basis of 
        the stock under subdivision 19f, paragraph (m), and the federal 
        basis if the Minnesota basis is lower than the shareholder's 
        federal basis; 
           (8) (5) the amount of expense, interest, or taxes 
        disallowed pursuant to section 290.10; and 
           (9) (6) the amount of a partner's pro rata share of net 
        income which does not flow through to the partner because the 
        partnership elected to pay the tax on the income under section 
        6242(a)(2) of the Internal Revenue Code. 
           Sec. 4.  Minnesota Statutes 1998, section 290.01, 
        subdivision 19b, is amended to read: 
           Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
        individuals, estates, and trusts, there shall be subtracted from 
        federal taxable income: 
           (1) interest income on obligations of any authority, 
        commission, or instrumentality of the United States to the 
        extent includable in taxable income for federal income tax 
        purposes but exempt from state income tax under the laws of the 
        United States; 
           (2) if included in federal taxable income, the amount of 
        any overpayment of income tax to Minnesota or to any other 
        state, for any previous taxable year, whether the amount is 
        received as a refund or as a credit to another taxable year's 
        income tax liability; 
           (3) the amount paid to others, less the credit allowed 
        under section 290.0674, not to exceed $1,625 for each dependent 
        qualifying child in grades kindergarten to 6 and $2,500 for each 
        dependent qualifying child in grades 7 to 12, for tuition, 
        textbooks, and transportation of each dependent qualifying child 
        in attending an elementary or secondary school situated in 
        Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
        wherein a resident of this state may legally fulfill the state's 
        compulsory attendance laws, which is not operated for profit, 
        and which adheres to the provisions of the Civil Rights Act of 
        1964 and chapter 363.  For the purposes of this clause, 
        "tuition" includes fees or tuition as defined in section 
        290.0674, subdivision 1, clause (1).  As used in this clause, 
        "textbooks" includes books and other instructional materials and 
        equipment used in elementary and secondary schools in teaching 
        only those subjects legally and commonly taught in public 
        elementary and secondary schools in this state.  Equipment 
        expenses qualifying for deduction includes expenses as defined 
        and limited in section 290.0674, subdivision 1, clause (3).  
        "Textbooks" does not include instructional books and materials 
        used in the teaching of religious tenets, doctrines, or worship, 
        the purpose of which is to instill such tenets, doctrines, or 
        worship, nor does it include books or materials for, or 
        transportation to, extracurricular activities including sporting 
        events, musical or dramatic events, speech activities, driver's 
        education, or similar programs.  For purposes of the subtraction 
        provided by this clause, "qualifying child" has the meaning 
        given in section 32(c)(3) of the Internal Revenue Code; 
           (4) contributions made in taxable years beginning after 
        December 31, 1981, and before January 1, 1985, to the extent 
        included in federal taxable income, distributions from a 
        qualified governmental pension plan, an individual retirement 
        account, simplified employee pension, or qualified plan covering 
        a self-employed person that represent a return of contributions 
        that were included in Minnesota gross income in the taxable year 
        for which the contributions were made but were deducted or were 
        not included in the computation of federal adjusted gross 
        income.  The distribution shall be allocated first to return of 
        contributions until the contributions included in Minnesota 
        gross income have been exhausted, less any amount allowed to be 
        subtracted as a distribution under this subdivision or a 
        predecessor provision in taxable years that began before January 
        1, 2000.  This subtraction applies only to contributions made in 
        a taxable year prior to 1985 for taxable years beginning after 
        December 31, 1999, and before January 1, 2001; 
           (5) income as provided under section 290.0802; 
           (6) the amount of unrecovered accelerated cost recovery 
        system deductions allowed under subdivision 19g; 
           (7) to the extent included in federal adjusted gross 
        income, income realized on disposition of property exempt from 
        tax under section 290.491; 
           (8) to the extent not deducted in determining federal 
        taxable income, the amount paid for health insurance of 
        self-employed individuals as determined under section 162(l) of 
        the Internal Revenue Code, except that the 25 percent limit does 
        not apply.  If the taxpayer deducted insurance payments under 
        section 213 of the Internal Revenue Code of 1986, the 
        subtraction under this clause must be reduced by the lesser of: 
           (i) the total itemized deductions allowed under section 
        63(d) of the Internal Revenue Code, less state, local, and 
        foreign income taxes deductible under section 164 of the 
        Internal Revenue Code and the standard deduction under section 
        63(c) of the Internal Revenue Code; or 
           (ii) the lesser of (A) the amount of insurance qualifying 
        as "medical care" under section 213(d) of the Internal Revenue 
        Code to the extent not deducted under section 162(1) of the 
        Internal Revenue Code or excluded from income or (B) the total 
        amount deductible for medical care under section 213(a); 
           (9) the exemption amount allowed under Laws 1995, chapter 
        255, article 3, section 2, subdivision 3; 
           (10) to the extent included in federal taxable income, 
        postservice benefits for youth community service under section 
        124D.42 for volunteer service under United States Code, title 
        42, section 5011(d), as amended; 
           (11) to the extent not subtracted under clause (1), the 
        amount of income or gain included in federal taxable income 
        under section 1366 of the Internal Revenue Code flowing from a 
        corporation that has a valid election in effect for the taxable 
        year under section 1362 of the Internal Revenue Code which is 
        not allowed to be an "S" corporation under section 290.9725; 
           (12) in the year stock of a corporation that had made a 
        valid election under section 1362 of the Internal Revenue Code 
        but was not an "S" corporation under section 290.9725 is sold or 
        disposed of in a transaction taxable under the Internal Revenue 
        Code, the amount of difference between the Minnesota basis of 
        the stock under subdivision 19f, paragraph (m), and the federal 
        basis if the Minnesota basis is higher than the shareholder's 
        federal basis; and 
           (13) an amount equal to an individual's, trust's, or 
        estate's net federal income tax liability for the tax year that 
        is attributable to items of income, expense, gain, loss, or 
        credits federally flowing to the taxpayer in the tax year from a 
        corporation, having a valid election in effect for federal tax 
        purposes under section 1362 of the Internal Revenue Code but not 
        treated as an "S" corporation for state tax purposes under 
        section 290.9725. 
           (11) to the extent not deducted in determining federal 
        taxable income by an individual who does not itemize deductions 
        for federal income tax purposes for the taxable year, an amount 
        equal to 50 percent of the excess of charitable contributions 
        allowable as a deduction for the taxable year under section 
        170(a) of the Internal Revenue Code over $500; and 
           (12) to the extent included in federal taxable income, 
        holocaust victims' settlement payments for any injury incurred 
        as a result of the holocaust, if received by an individual who 
        was persecuted for racial or religious reasons by Nazi Germany 
        or any other Axis regime or an heir of such a person. 
           Sec. 5.  Minnesota Statutes 1998, section 290.01, 
        subdivision 19f, is amended to read: 
           Subd. 19f.  [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 
        DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 
        trusts, the basis of property is its adjusted basis for federal 
        income tax purposes except as set forth in paragraphs (f), (g), 
        and (m).  For corporations, the basis of property is its 
        adjusted basis for federal income tax purposes, without regard 
        to the time when the property became subject to tax under this 
        chapter or to whether out-of-state losses or items of tax 
        preference with respect to the property were not deductible 
        under this chapter, except that the modifications to the basis 
        for federal income tax purposes set forth in paragraphs (b) to 
        (j) are allowed to corporations, and the resulting modifications 
        to federal taxable income must be made in the year in which gain 
        or loss on the sale or other disposition of property is 
        recognized. 
           (b) The basis of property shall not be reduced to reflect 
        federal investment tax credit.  
           (c) The basis of property subject to the accelerated cost 
        recovery system under section 168 of the Internal Revenue Code 
        shall be modified to reflect the modifications in depreciation 
        with respect to the property provided for in subdivision 19e.  
        For certified pollution control facilities for which 
        amortization deductions were elected under section 169 of the 
        Internal Revenue Code of 1954, the basis of the property must be 
        increased by the amount of the amortization deduction not 
        previously allowed under this chapter. 
           (d) For property acquired before January 1, 1933, the basis 
        for computing a gain is the fair market value of the property as 
        of that date.  The basis for determining a loss is the cost of 
        the property to the taxpayer less any depreciation, 
        amortization, or depletion, actually sustained before that 
        date.  If the adjusted cost exceeds the fair market value of the 
        property, then the basis is the adjusted cost regardless of 
        whether there is a gain or loss.  
           (e) The basis is reduced by the allowance for amortization 
        of bond premium if an election to amortize was made pursuant to 
        Minnesota Statutes 1986, section 290.09, subdivision 13, and the 
        allowance could have been deducted by the taxpayer under this 
        chapter during the period of the taxpayer's ownership of the 
        property.  
           (f) For assets placed in service before January 1, 1987, 
        corporations, partnerships, or individuals engaged in the 
        business of mining ores other than iron ore or taconite 
        concentrates subject to the occupation tax under chapter 298 
        must use the occupation tax basis of property used in that 
        business. 
           (g) For assets placed in service before January 1, 1990, 
        corporations, partnerships, or individuals engaged in the 
        business of mining iron ore or taconite concentrates subject to 
        the occupation tax under chapter 298 must use the occupation tax 
        basis of property used in that business.  
           (h) In applying the provisions of sections 301(c)(3)(B), 
        312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 
        dates December 31, 1932, and January 1, 1933, shall be 
        substituted for February 28, 1913, and March 1, 1913, 
        respectively.  
           (i) In applying the provisions of section 362(a) and (c) of 
        the Internal Revenue Code, the date December 31, 1956, shall be 
        substituted for June 22, 1954.  
           (j) The basis of property shall be increased by the amount 
        of intangible drilling costs not previously allowed due to 
        differences between this chapter and the Internal Revenue Code.  
           (k) The adjusted basis of any corporate partner's interest 
        in a partnership is the same as the adjusted basis for federal 
        income tax purposes modified as required to reflect the basis 
        modifications set forth in paragraphs (b) to (j).  The adjusted 
        basis of a partnership in which the partner is an individual, 
        estate, or trust is the same as the adjusted basis for federal 
        income tax purposes modified as required to reflect the basis 
        modifications set forth in paragraphs (f) and (g).  
           (l) The modifications contained in paragraphs (b) to (j) 
        also apply to the basis of property that is determined by 
        reference to the basis of the same property in the hands of a 
        different taxpayer or by reference to the basis of different 
        property.  
           (m) If a corporation has a valid election in effect for the 
        taxable year under section 1362 of the Internal Revenue Code, 
        but is not allowed to be an "S" corporation under section 
        290.9725, and the corporation is liquidated or the individual 
        shareholder disposes of the stock, the Minnesota basis in the 
        shareholder's stock in the corporation shall be computed as if 
        the corporation were not an "S" corporation for federal tax 
        purposes. 
           Sec. 6.  Minnesota Statutes 1998, section 290.01, 
        subdivision 19g, is amended to read: 
           Subd. 19g.  [ACRS MODIFICATION FOR INDIVIDUALS.] (a) An 
        individual is allowed a subtraction from federal taxable income 
        for the amount of accelerated cost recovery system deductions 
        that were added to federal adjusted gross income in computing 
        Minnesota gross income for taxable year 1981, 1982, 1983, or 
        1984 and that were not deducted in a later taxable year 
        beginning before January 1, 2000.  The deduction is 
        allowed beginning in the first taxable year after the entire 
        allowable deduction for the property has been allowed under 
        federal law or the first taxable year beginning after December 
        31, 1987, whichever is later 1999.  The amount of the 
        deduction is computed by deducting equals the amount added to 
        federal adjusted gross income in computing Minnesota gross 
        income, (less any: 
           (1) deduction allowed allowable under Minnesota Statutes 
        1986, section 290.01, subdivision 20f) in equal annual amounts 
        over five years.; and 
           (2) amount allowable as a subtraction under this 
        subdivision in a taxable year beginning before January 1, 2000. 
           This paragraph does not apply to property that was sold or 
        exchanged in a taxable year beginning before January 1, 2001. 
           (b) In the event of a sale or exchange of the 
        property occurring during a taxable year beginning after 
        December 31, 1999, and before January 1, 2001, a deduction is 
        allowed equal to the lesser of (1) the remaining amount that 
        would be allowed as a deduction under paragraph (a) or (2) the 
        amount of capital gain recognized and the amount of cost 
        recovery deductions that were subject to recapture under 
        sections 1245 and 1250 of the Internal Revenue Code of 1986 for 
        the taxable year. 
           (c) In the case of a corporation treated as an "S" 
        corporation under section 290.9725, the amount of the 
        corporation's cost recovery allowances that have been deducted 
        in computing federal tax, but have been added to federal taxable 
        income or not deducted in computing tax under this chapter as a 
        result of the application of subdivision 19e, paragraphs (a) and 
        (c) or Minnesota Statutes 1986, section 290.09, subdivision 7, 
        is allowed as a deduction to the shareholders under the 
        provisions of paragraph (a). 
           Sec. 7.  Minnesota Statutes 1998, section 290.01, is 
        amended by adding a subdivision to read: 
           Subd. 32.  [HOLOCAUST SETTLEMENT PAYMENTS.] "Holocaust 
        victims' settlement payments" means: 
           (1) a payment received as a result of settlement of the 
        action entitled In re Holocaust Victims' Asset Litigation, in 
        United States district court for the eastern district of New 
        York, C.A. No. 96-4849; 
           (2) any amount received under the German Act Regulating 
        Unresolved Property Claims or any other foreign law providing 
        for payments for holocaust claims; and 
           (3) a payment received as a result of the settlement of a 
        holocaust claim not described in clause (1) or (2), including an 
        insurance claim, a claim relating to looted art or financial 
        assets, and a claim relating to slave labor wages. 
           Sec. 8.  Minnesota Statutes 1998, 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 $25,220, 6 5.5 percent; 
           (2) On all over $19,910 $25,220, but not 
        over $79,120 $100,200, 8 7.25 percent; 
           (3) On all over $79,120 $100,200, 8.5 8 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 $17,250, 6 5.5 percent; 
           (2) On all over $13,620 $17,250, but not 
        over $44,750 $56,680, 8 7.25 percent; 
           (3) On all over $44,750 $56,680, 8.5 8 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 $21,240, 6 5.5 percent; 
           (2) On all over $16,770 $21,240, but not 
        over $67,390 $85,350, 8 7.25 percent; 
           (3) On all over $67,390 $85,350, 8.5 8 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 disregarding income or loss flowing from a 
        corporation having a valid election for the taxable year under 
        section 1362 of the Internal Revenue Code but which is not an 
        "S" corporation under section 290.9725 and increased by the 
        additions required under section 290.01, subdivision 19a, 
        clauses (1) and (9) (6), after applying the allocation and 
        assignability provisions of section 290.081, clause (a), or 
        290.17; and 
           (2) the denominator is the individual's federal adjusted 
        gross income as defined in section 62 of the Internal Revenue 
        Code of 1986, increased by the amounts specified in section 
        290.01, subdivision 19a, clauses (1), (5), (6), (7), and 
        (9) (6), and reduced by the amounts specified in section 290.01, 
        subdivision 19b, clauses clause (1), (11), and (12). 
           Sec. 9.  Minnesota Statutes 1998, section 290.06, 
        subdivision 2d, is amended to read: 
           Subd. 2d.  [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 
        taxable years beginning after December 31, 1991 1999, the 
        minimum and maximum dollar amounts for each rate bracket for 
        which a tax is imposed in subdivision 2c shall be adjusted for 
        inflation by the percentage determined under paragraph (b).  For 
        the purpose of making the adjustment as provided in this 
        subdivision all of the rate brackets provided in subdivision 2c 
        shall be the rate brackets as they existed for taxable years 
        beginning after December 31, 1990 1998, and before January 
        1, 1992 2000.  The rate applicable to any rate bracket must not 
        be changed.  The dollar amounts setting forth the tax shall be 
        adjusted to reflect the changes in the rate brackets.  The rate 
        brackets as adjusted must be rounded to the nearest $10 amount.  
        If the rate bracket ends in $5, it must be rounded up to the 
        nearest $10 amount.  
           (b) The commissioner shall adjust the rate brackets and by 
        the percentage determined pursuant to the provisions of section 
        1(f) of the Internal Revenue Code, except that in section 
        1(f)(3)(B) the word "1990 1998" shall be substituted for the 
        word "1987 1992."  For 1991 2000, the commissioner shall then 
        determine the percent change from the 12 months ending on August 
        31, 1990 1998, to the 12 months ending on August 31, 1991 1999, 
        and in each subsequent year, from the 12 months ending on August 
        31, 1990 1998, to the 12 months ending on August 31 of the year 
        preceding the taxable year.  The determination of the 
        commissioner pursuant to this subdivision shall not be 
        considered a "rule" and shall not be subject to the 
        Administrative Procedure Act contained in chapter 14.  
           No later than December 15 of each year, the commissioner 
        shall announce the specific percentage that will be used to 
        adjust the tax rate brackets. 
           Sec. 10.  Minnesota Statutes 1998, section 290.06, is 
        amended by adding a subdivision to read: 
           Subd. 26.  [BANK S CORPORATIONS.] A shareholder of an S 
        corporation subject to tax under section 290.9725, clause (2), 
        is allowed a credit against the tax imposed under this chapter.  
        The credit equals 80 percent of the tax apportioned to the 
        shareholder under section 290.9726, subdivision 7, for the 
        taxable year.  
           Sec. 11.  Minnesota Statutes 1998, section 290.06, is 
        amended by adding a subdivision to read: 
           Subd. 27.  [TAX PAID TO ANOTHER STATE; CORPORATIONS.] (a) A 
        credit is allowed against the tax imposed under subdivision 1 
        for tax paid to another state based on net income.  The credit 
        must be claimed in a manner prescribed by the commissioner.  
           (b) The amount of the credit equals the amount of 
        qualifying tax paid to the other state for the taxable year, 
        multiplied by the taxpayer's apportionment percentage under 
        section 290.191.  If the item of income or gain is assigned to 
        Minnesota as nonbusiness income, the entire amount of the 
        qualifying tax is allowed as a credit.  The maximum amount of 
        the credit is limited to the tax liability under subdivision 1 
        for the taxable year and, in no case, may the credit exceed the 
        reduction in the amount of tax under subdivision 1 if the item 
        of income or gain were excluded from net income. 
           (c) For purposes of this subdivision, "qualifying tax" 
        means the amount of tax paid to another state on an item of 
        income or gain for the taxable year, if: 
           (1) the law of another state requires and the taxpayer 
        assigns the entire amount of the income or gain to one other 
        state; and 
           (2) the income or gain is included in the measure of the 
        exercise of the corporate franchise that is taxable under 
        subdivision 1.  
           (d) The amount of tax paid to another state on an item of 
        income or gain is the difference between the tax paid to the 
        state and the amount of tax that would have been paid to the 
        state if the item of income or gain had not been included in the 
        net income of that state. 
           (e) The taxpayer must report to the commissioner of revenue 
        any change in tax in the other state, the change in qualifying 
        tax, and a copy of the final determination of the tax by the 
        taxing authority of the other state.  A taxpayer who claims the 
        credit consents to extend the period of limitation for the 
        commissioner to recompute the credit and reassess the tax due, 
        including a refund, for a period of one year following a report 
        by the taxpayer of a final determination of tax by the state in 
        which the entire amount of income or gain is reported, 
        notwithstanding any period of limitations to the contrary, or 
        within any applicable period of limitations, whichever is 
        longer.  If a taxpayer fails to report as required by this 
        paragraph, the commissioner may recompute the tax, including a 
        refund, based on the information available to the commissioner.  
        The tax may be recomputed within six years after the report 
        should have been filed, notwithstanding any period of 
        limitations to the contrary. 
           Sec. 12.  Minnesota Statutes 1998, section 290.0671, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
        allowed a credit against the tax imposed by this chapter equal 
        to a percentage of earned income.  To receive a credit, a 
        taxpayer must be eligible for a credit under section 32 of the 
        Internal Revenue Code.  
           (b) For individuals with no qualifying children, the credit 
        equals 1.1475 percent of the first $4,460 of earned income.  The 
        credit is reduced by 1.1475 percent of earned income or modified 
        adjusted gross income, whichever is greater, in excess of 
        $5,570, but in no case is the credit less than zero. 
           (c) For individuals with one qualifying child, the credit 
        equals 6.8 7.45 percent of the first $6,680 of earned income and 
        8.5 percent of earned income over $11,650 but less than $12,990. 
        The credit is reduced by 4.77 5.13 percent of earned income or 
        modified adjusted gross income, whichever is greater, in excess 
        of $14,560, but in no case is the credit less than zero. 
           (d) For individuals with two or more qualifying children, 
        the credit equals eight 8.8 percent of the first $9,390 of 
        earned income and 20 percent of earned income over $14,350 but 
        less than $16,230.  The credit is reduced by 8.8 9.38 percent of 
        earned income or modified adjusted gross income, whichever is 
        greater, in excess of $17,280, but in no case is the credit less 
        than zero. 
           (e) For a nonresident or part-year resident, the credit 
        must be allocated based on the percentage calculated under 
        section 290.06, subdivision 2c, paragraph (e). 
           (f) For a person who was a resident for the entire tax year 
        and has earned income not subject to tax under this chapter, the 
        credit must be allocated based on the ratio of federal adjusted 
        gross income reduced by the earned income not subject to tax 
        under this chapter over federal adjusted gross income. 
           (g) The commissioner shall construct tables showing the 
        amount of the credit at various income levels and make them 
        available to taxpayers.  The tables shall follow the schedule 
        contained in this subdivision, except that the commissioner may 
        graduate the transition between income brackets. 
           Sec. 13.  Minnesota Statutes 1998, section 290.0674, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
        a credit against the tax imposed by this chapter in an amount 
        equal to the amount paid for education-related expenses for 
        a dependent qualifying child in kindergarten through grade 12.  
        For purposes of this section, "education-related expenses" means:
           (1) fees or tuition for instruction by an instructor under 
        section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 
        (5), or by a member of the Minnesota music teachers association, 
        for instruction outside the regular school day or school year, 
        including tutoring, driver's education offered as part of school 
        curriculum, regardless of whether it is taken from a public or 
        private entity or summer camps, in grade or age appropriate 
        curricula that supplement curricula and instruction available 
        during the regular school year, that assists a dependent to 
        improve knowledge of core curriculum areas or to expand 
        knowledge and skills under the graduation rule under section 
        120B.02 and that do not include the teaching of religious 
        tenets, doctrines, or worship, the purpose of which is to 
        instill such tenets, doctrines, or worship; 
           (2) expenses for textbooks, including books and other 
        instructional materials and equipment used in elementary and 
        secondary schools in teaching only those subjects legally and 
        commonly taught in public elementary and secondary schools in 
        this state.  "Textbooks" does not include instructional books 
        and materials used in the teaching of religious tenets, 
        doctrines, or worship, the purpose of which is to instill such 
        tenets, doctrines, or worship, nor does it include books or 
        materials for extracurricular activities including sporting 
        events, musical or dramatic events, speech activities, driver's 
        education, or similar programs; 
           (3) a maximum expense of $200 per family for personal 
        computer hardware, excluding single purpose processors, and 
        educational software that assists a dependent to improve 
        knowledge of core curriculum areas or to expand knowledge and 
        skills under the graduation rule under section 120B.02 purchased 
        for use in the taxpayer's home and not used in a trade or 
        business regardless of whether the computer is required by the 
        dependent's school; and 
           (4) the amount paid to others for transportation of a 
        dependent qualifying child attending an elementary or secondary 
        school situated in Minnesota, North Dakota, South Dakota, Iowa, 
        or Wisconsin, wherein a resident of this state may legally 
        fulfill the state's compulsory attendance laws, which is not 
        operated for profit, and which adheres to the provisions of the 
        Civil Rights Act of 1964 and chapter 363. 
           For purposes of this section, "qualifying child" has the 
        meaning given in section 32(c)(3) of the Internal Revenue Code. 
           Sec. 14.  Minnesota Statutes 1998, section 290.0674, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMITATIONS.] (a) For claimants with income not 
        greater than $33,500, the maximum credit allowed is $1,000 per 
        qualifying child and $2,000 per family.  No credit is allowed 
        for education-related expenses for claimants with income greater 
        than $33,500 $37,500.  The maximum credit per child is reduced 
        by $1 for each $4 of household income over $33,500, and the 
        maximum credit per family is reduced by $2 for each $4 of 
        household income over $33,500, but in no case is the credit less 
        than zero. 
           For purposes of this section "income" has the meaning given 
        in section 290.067, subdivision 2a.  In the case of a married 
        claimant, a credit is not allowed unless a joint income tax 
        return is filed. 
           (b) For a nonresident or part-year resident, the credit 
        determined under subdivision 1 and the maximum credit amount in 
        paragraph (a) must be allocated using the percentage calculated 
        in section 290.06, subdivision 2c, paragraph (e). 
           Sec. 15.  [290.0675] [MARRIAGE PENALTY CREDIT.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section the following terms have the meanings given. 
           (b) "Earned income" means earned income as defined in 
        section 32(c)(2) of the Internal Revenue Code. 
           (c) "Taxable income" means net income as defined in section 
        290.01, subdivision 19. 
           (d) "Earned income of lesser-earning spouse" means the 
        earned income of the spouse with the lesser amount of earned 
        income as defined in paragraph (b) for the taxable year.  
           Subd. 2.  [CREDIT ALLOWED.] A married couple filing a joint 
        return is allowed a credit against the tax imposed under section 
        290.06.  
           The minimum taxable income for the married couple to be 
        eligible for the credit is $25,000, and the minimum earned 
        income in order for the couple to be eligible for the credit is 
        $14,000 for each spouse. 
           Subd. 3.  [CREDIT AMOUNT.] The credit amount is as shown in 
        the table in this subdivision, based on the couple's taxable 
        income for the tax year and on the earned income of the 
        lesser-earning spouse. 
                                     Credit For          Credit For
          Earned Income of           Taxable Income      Taxable Income
          Lesser Earning Spouse      $25,000-$99,999     $100,000-over
          $14,000 - $14,999          $9                  $0    
          $15,000 - $15,999          $27                 $0    
          $16,000 - $16,999          $44                 $0    
          $17,000 - $17,999          $62                 $0    
          $18,000 - $18,999          $79                 $0    
          $19,000 - $19,999          $97                 $0  
          $20,000 - $20,999          $114                $0  
          $21,000 - $21,999          $132                $0 
          $22,000 - $22,999          $149                $0
          $23,000 - $23,999          $162                $0 
          $24,000 - $24,999          $162                $0   
          $25,000 - $25,999          $162                $0  
          $26,000 - $26,999          $162                $0   
          $27,000 - $27,999          $162                $0
          $28,000 - $28,999          $162                $9
          $29,000 - $29,999          $162                $16
          $30,000 - $30,999          $162                $24
          $31,000 - $31,999          $162                $31
          $32,000 - $32,999          $162                $39
          $33,000 - $33,999          $162                $46
          $34,000 - $34,999          $162                $54
          $35,000 - $35,999          $162                $61
          $36,000 - $36,999          $162                $69
          $37,000 - $37,999          $162                $76
          $38,000 - $38,999          $162                $84
          $39,000 - $39,999          $162                $91
          $40,000 - $40,999          $162                $99
          $41,000 - $41,999          $162                $106
          $42,000 - $42,999          $162                $114
          $43,000 - $43,999          $162                $121
          $44,000 - $44,999          $162                $129
          $45,000 - $45,999          $162                $136
          $46,000 - $46,999          $162                $144
          $47,000 - $47,999          $162                $151
          $48,000 - $48,999          $162                $159
          $49,000 - $49,999          $162                $166
          $50,000 - $50,999          $162                $174
          $51,000 - $51,999          $162                $181
          $52,000 - $52,999          $162                $189
          $53,000 - $53,999          $162                $196
          $54,000 - $54,999          $162                $204
          $55,000 - $55,999          $162                $211
          $56,000 - $56,999          $162                $219
          $57,000 - $57,999          $162                $226
          $58,000 - $58,999          $162                $234
          $59,000 - $59,999          $162                $241
          $60,000 - $60,999          $162                $249
          $61,000 - $61,999          $162                $256
          $62,000 and over           $162                $261
           Subd. 4.  [NONRESIDENTS AND PART-YEAR RESIDENTS.] For a 
        nonresident or part-year resident, the credit must be allocated 
        based on the percentage calculated under section 290.06, 
        subdivision 2c, paragraph (e). 
           Subd. 5.  [INFLATION ADJUSTMENT.] The dollar amount of 
        earned income of the lesser-earning spouse, taxable income, and 
        marriage penalty credit in the table in subdivision 3 must be 
        adjusted for inflation.  The commissioner shall adjust the 
        amounts by the percentage determined under section 290.06, 
        subdivision 2d, for the taxable year. 
           Sec. 16.  Minnesota Statutes 1998, section 290.091, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [IMPOSITION OF TAX.] In addition to all 
        other taxes imposed by this chapter a tax is imposed on 
        individuals, estates, and trusts equal to the excess (if any) of 
           (a) an amount equal to seven 6.5 percent of alternative 
        minimum taxable income after subtracting the exemption amount, 
        over 
           (b) the regular tax for the taxable year. 
           Sec. 17.  Minnesota Statutes 1998, section 290.091, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
        this section, the following terms have the meanings given: 
           (a) "Alternative minimum taxable income" means the sum of 
        the following for the taxable year: 
           (1) the taxpayer's federal alternative minimum taxable 
        income as defined in section 55(b)(2) of the Internal Revenue 
        Code; 
           (2) the taxpayer's itemized deductions allowed in computing 
        federal alternative minimum taxable income, but excluding: 
           (i) the Minnesota charitable contribution deduction; 
           (ii) the medical expense deduction; 
           (iii) the casualty, theft, and disaster loss deduction; and 
           (iv) the impairment-related work expenses of a disabled 
        person; and 
           (v) holocaust victims' settlement payments to the extent 
        allowed under section 290.01, subdivision 19b; and 
           (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); 
           (6) amounts added to federal taxable income as provided by 
        section 290.01, subdivision 19a, clauses (5), (6), and (7); 
           less the sum of the amounts determined under the following 
        clauses (1) to (4): 
           (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; and. 
           (4) amounts subtracted from federal taxable income as 
        provided by section 290.01, subdivision 19b, clauses (11) and 
        (12). 
           In the case of an estate or trust, alternative minimum 
        taxable income must be computed as provided in section 59(c) of 
        the Internal Revenue Code. 
           (b) "Investment interest" means investment interest as 
        defined in section 163(d)(3) of the Internal Revenue Code. 
           (c) "Tentative minimum tax" equals seven 6.5 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. 18.  Minnesota Statutes 1998, section 290.091, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
        is allowed against the tax imposed by this chapter on 
        individuals, trusts, and estates equal to the minimum tax credit 
        for the taxable year.  The minimum tax credit equals the 
        adjusted net minimum tax for taxable years beginning after 
        December 31, 1988, reduced by the minimum tax credits allowed in 
        a prior taxable year.  The credit may not exceed the excess (if 
        any) for the taxable year of 
           (1) the regular tax, over 
           (2) the greater of (i) the tentative alternative minimum 
        tax, or (ii) zero. 
           (b) The adjusted net minimum tax for a taxable year equals 
        the lesser of the net minimum tax or the excess (if any) of 
           (1) the tentative minimum tax, over 
           (2) seven 6.5 percent of the sum of 
           (i) adjusted gross income as defined in section 62 of the 
        Internal Revenue Code, 
           (ii) interest income as defined in section 290.01, 
        subdivision 19a, clause (1), 
           (iii) the amount added to federal taxable income as 
        provided by section 290.01, subdivision 19a, clauses (5), (6), 
        and (7), 
           (iv) interest on specified private activity bonds, as 
        defined in section 57(a)(5) of the Internal Revenue Code, to the 
        extent not included under clause (ii), 
           (v) (iv) depletion as defined in section 57(a)(1), 
        determined without regard to the last sentence of paragraph (1), 
        of the Internal Revenue Code, less 
           (vi) (v) the deductions allowed in computing alternative 
        minimum taxable income provided in subdivision 2, paragraph (a), 
        clause (2) of the first series of clauses and clauses (1), 
        (2), and (3), and (4) of the second series of clauses, and 
           (vii) (vi) the exemption amount determined under 
        subdivision 3. 
           In the case of an individual who is not a Minnesota 
        resident for the entire year, adjusted net minimum tax must be 
        multiplied by the fraction defined in section 290.06, 
        subdivision 2c, paragraph (e).  In the case of a trust or 
        estate, adjusted net minimum tax must be multiplied by the 
        fraction defined under subdivision 4, paragraph (b). 
           Sec. 19.  Minnesota Statutes 1998, section 290.0921, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 
        alternative minimum taxable net income is allowed equal to 
        the contributions subject to the deduction for charitable 
        contributions under section 290.21, subdivision 3, without 
        application of the limitation in section 290.21, subdivision 3.  
        The deduction allowable for capital gain property is limited to 
        the adjusted basis of the property as defined in section 290.01, 
        subdivision 19f.  The term capital gain property has the meaning 
        given by section 170(b)(1)(C)(iv) of the Internal Revenue Code, 
        but does not include property to which an election under section 
        170(b)(1)(C)(iii) of the Internal Revenue Code applies. 
           (b) The amount of the deduction may not exceed 15 percent 
        of alternative minimum taxable net income less the deduction 
        allowed under subdivision 6. 
           Sec. 20.  Minnesota Statutes 1998, 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) 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.  The limitation amount determined under section 382 
        shall be applied to net income, before apportionment, in each 
        post change year to which a loss is carried. 
           Sec. 21.  Minnesota Statutes 1998, section 290.17, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TRADE OR BUSINESS INCOME; GENERAL RULE.] All 
        income of a trade or business is subject to apportionment except 
        nonbusiness income.  Income derived from carrying on a trade or 
        business must be assigned to this state if the trade or business 
        is conducted wholly within this state, assigned outside this 
        state if conducted wholly without this state and apportioned 
        between this state and other states and countries under this 
        subdivision if conducted partly within and partly without this 
        state.  For purposes of determining whether a trade or business 
        is carried on exclusively within or without this state:  
           (a) A trade or business physically located exclusively 
        within this state is nevertheless carried on partly within and 
        partly without this state if any of the principles set forth in 
        section 290.191 for the allocation of sales or receipts within 
        or without this state when applied to the taxpayer's situation 
        result in the allocation of any sales or receipts without this 
        state.  
           (b) A trade or business physically located exclusively 
        without this state is nevertheless carried on partly within and 
        partly without this state if any of the principles set forth in 
        section 290.191 for the allocation of sales or receipts within 
        or without this state when applied to the taxpayer's situation 
        result in the allocation of any sales or receipts without this 
        state.  The jurisdiction to tax such a business under this 
        chapter must be determined in accordance with sections 290.014 
        and 290.015. 
           Sec. 22.  Minnesota Statutes 1998, section 290.17, 
        subdivision 4, is amended to read: 
           Subd. 4.  [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 
        business conducted wholly within this state or partly within and 
        partly without this state is part of a unitary business, the 
        entire income of the unitary business is subject to 
        apportionment pursuant to section 290.191.  Notwithstanding 
        subdivision 2, paragraph (c), none of the income of a unitary 
        business is considered to be derived from any particular source 
        and none may be allocated to a particular place except as 
        provided by the applicable apportionment formula.  The 
        provisions of this subdivision do not apply to farm income 
        subject to subdivision 5, paragraph (a), business income subject 
        to subdivision 5, paragraph (b) or (c), income of an insurance 
        company determined under section 290.35, or income of an 
        investment company determined under section 290.36. 
           (b) The term "unitary business" means business activities 
        or operations which are of mutual benefit, dependent upon, or 
        contributory to one another, individually or as a group result 
        in a flow of value between them.  The term may be applied within 
        a single legal entity or between multiple entities and without 
        regard to whether each entity is a sole proprietorship, a 
        corporation, a partnership or a trust.  
           (c) Unity is presumed whenever there is unity of ownership, 
        operation, and use, evidenced by centralized management or 
        executive force, centralized purchasing, advertising, 
        accounting, or other controlled interaction, but the absence of 
        these centralized activities will not necessarily evidence a 
        nonunitary business.  Unity is also presumed when business 
        activities or operations are of mutual benefit, dependent upon 
        or contributory to one another, either individually or as a 
        group. 
           (d) Where a business operation conducted in Minnesota is 
        owned by a business entity that carries on business activity 
        outside the state different in kind from that conducted within 
        this state, and the other business is conducted entirely outside 
        the state, it is presumed that the two business operations are 
        unitary in nature, interrelated, connected, and interdependent 
        unless it can be shown to the contrary.  
           (e) Unity of ownership is not deemed to exist when a 
        corporation is involved unless that corporation is a member of a 
        group of two or more business entities and more than 50 percent 
        of the voting stock of each member of the group is directly or 
        indirectly owned by a common owner or by common owners, either 
        corporate or noncorporate, or by one or more of the member 
        corporations of the group.  For this purpose, the term "voting 
        stock" shall include membership interests of mutual insurance 
        holding companies formed under section 60A.077.  
           (f) The net income and apportionment factors under section 
        290.191 or 290.20 of foreign corporations and other foreign 
        entities which are part of a unitary business shall not be 
        included in the net income or the apportionment factors of the 
        unitary business.  A foreign corporation or other foreign entity 
        which is required to file a return under this chapter shall file 
        on a separate return basis.  The net income and apportionment 
        factors under section 290.191 or 290.20 of foreign operating 
        corporations shall not be included in the net income or the 
        apportionment factors of the unitary business except as provided 
        in paragraph (g). 
           (g) The adjusted net income of a foreign operating 
        corporation shall be deemed to be paid as a dividend on the last 
        day of its taxable year to each shareholder thereof, in 
        proportion to each shareholder's ownership, with which such 
        corporation is engaged in a unitary business.  Such deemed 
        dividend shall be treated as a dividend under section 290.21, 
        subdivision 4. 
           Dividends actually paid by a foreign operating corporation 
        to a corporate shareholder which is a member of the same unitary 
        business as the foreign operating corporation shall be 
        eliminated from the net income of the unitary business in 
        preparing a combined report for the unitary business.  The 
        adjusted net income of a foreign operating corporation shall be 
        its net income adjusted as follows: 
           (1) any taxes paid or accrued to a foreign country, the 
        commonwealth of Puerto Rico, or a United States possession or 
        political subdivision of any of the foregoing shall be a 
        deduction; and 
           (2) the subtraction from federal taxable income for 
        payments received from foreign corporations or foreign operating 
        corporations under section 290.01, subdivision 19d, clause (11), 
        shall not be allowed. 
           If a foreign operating corporation incurs a net loss, 
        neither income nor deduction from that corporation shall be 
        included in determining the net income of the unitary business. 
           (h) For purposes of determining the net income of a unitary 
        business and the factors to be used in the apportionment of net 
        income pursuant to section 290.191 or 290.20, there must be 
        included only the income and apportionment factors of domestic 
        corporations or other domestic entities other than foreign 
        operating corporations that are determined to be part of the 
        unitary business pursuant to this subdivision, notwithstanding 
        that foreign corporations or other foreign entities might be 
        included in the unitary business.  
           (i) Deductions for expenses, interest, or taxes otherwise 
        allowable under this chapter that are connected with or 
        allocable against dividends, deemed dividends described in 
        paragraph (g), or royalties, fees, or other like income 
        described in section 290.01, subdivision 19d, clause (11), shall 
        not be disallowed. 
           (j) Each corporation or other entity, except a sole 
        proprietorship, that is part of a unitary business must file 
        combined reports as the commissioner determines.  On the 
        reports, all intercompany transactions between entities included 
        pursuant to paragraph (h) must be eliminated and the entire net 
        income of the unitary business determined in accordance with 
        this subdivision is apportioned among the entities by using each 
        entity's Minnesota factors for apportionment purposes in the 
        numerators of the apportionment formula and the total factors 
        for apportionment purposes of all entities included pursuant to 
        paragraph (h) in the denominators of the apportionment formula. 
           (k) If a corporation has been divested from a unitary 
        business and is included in a combined report for a fractional 
        part of the common accounting period of the combined report:  
           (1) its income includable in the combined report is its 
        income incurred for that part of the year determined by 
        proration or separate accounting; and 
           (2) its sales, property, and payroll included in the 
        apportionment formula must be prorated or accounted for 
        separately. 
           Sec. 23.  Minnesota Statutes 1998, section 290.17, 
        subdivision 6, is amended to read: 
           Subd. 6.  [NONBUSINESS INCOME.] For a trade or business for 
        which allocation of income within and without this state is 
        required, if the taxpayer has any income not connected with the 
        trade or business carried on partly within and partly without 
        this state that income must be allocated under subdivision 2.  
        Intangible property is employed in a trade or business if the 
        owner of the property holds it as a means of furthering the 
        trade or business.  Nonbusiness income is income of the trade or 
        business that cannot be apportioned by this state because of the 
        United States Constitution or the constitution of the state of 
        Minnesota and includes income that cannot constitutionally be 
        apportioned to this state because it is derived from a capital 
        transaction that solely serves an investment function.  
        Nonbusiness income must be allocated under subdivision 2. 
           Sec. 24.  Minnesota Statutes 1998, section 290.191, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 
        Except for those trades or businesses required to use a 
        different formula under subdivision 3 or section 290.35 or 
        290.36, and for those trades or businesses that receive 
        permission to use some other method under section 290.20 or 
        under subdivision 4, a trade or business required to apportion 
        its net income must apportion its income to this state on the 
        basis of the percentage obtained by taking the sum of:  
           (1) 70 75 percent of the percentage which the sales made 
        within this state in connection with the trade or business 
        during the tax period are of the total sales wherever made in 
        connection with the trade or business during the tax period; 
           (2) 15 12.5 percent of the percentage which the total 
        tangible property used by the taxpayer in this state in 
        connection with the trade or business during the tax period is 
        of the total tangible property, wherever located, used by the 
        taxpayer in connection with the trade or business during the tax 
        period; and 
           (3) 15 12.5 percent of the percentage which the taxpayer's 
        total payrolls paid or incurred in this state or paid in respect 
        to labor performed in this state in connection with the trade or 
        business during the tax period are of the taxpayer's total 
        payrolls paid or incurred in connection with the trade or 
        business during the tax period.  
           Sec. 25.  Minnesota Statutes 1998, section 290.191, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPORTIONMENT FORMULA FOR FINANCIAL 
        INSTITUTIONS.] Except for an investment company required to 
        apportion its income under section 290.36, a financial 
        institution that is required to apportion its net income must 
        apportion its net income to this state on the basis of the 
        percentage obtained by taking the sum of:  
           (1) 70 75 percent of the percentage which the receipts from 
        within this state in connection with the trade or business 
        during the tax period are of the total receipts in connection 
        with the trade or business during the tax period, from wherever 
        derived; 
           (2) 15 12.5 percent of the percentage which the sum of the 
        total tangible property used by the taxpayer in this state and 
        the intangible property owned by the taxpayer and attributed to 
        this state in connection with the trade or business during the 
        tax period is of the sum of the total tangible property, 
        wherever located, used by the taxpayer and the intangible 
        property owned by the taxpayer and attributed to all states in 
        connection with the trade or business during the tax period; and 
           (3) 15 12.5 percent of the percentage which the taxpayer's 
        total payrolls paid or incurred in this state or paid in respect 
        to labor performed in this state in connection with the trade or 
        business during the tax period are of the taxpayer's total 
        payrolls paid or incurred in connection with the trade or 
        business during the tax period. 
           Sec. 26.  Minnesota Statutes 1998, section 290.9725, is 
        amended to read: 
           290.9725 [S CORPORATION.] 
           For purposes of this chapter, the term "S corporation" 
        means any corporation having a valid election in effect for the 
        taxable year under section 1362 of the Internal Revenue Code, 
        except that a corporation which either: 
           (1) is a financial institution to which either section 585 
        or section 593 of the Internal Revenue Code applies; or 
           (2) has a wholly owned subsidiary as described in section 
        1361(b)(3)(B) of the Internal Revenue Code which is a financial 
        institution as described above 
        is not an "S" corporation for the purposes of this chapter.  An 
        S corporation shall not be subject to the taxes imposed by this 
        chapter, except:  
           (1) the taxes imposed under sections 290.0922, 290.92, 
        290.9727, 290.9728, and 290.9729; and 
           (2) the tax under sections 290.06, subdivision 1, and 
        290.0921 apply to a financial institution to which either 
        section 585 or 593 of the Internal Revenue Code applies or that 
        has a wholly owned subsidiary as described in section 
        1361(b)(3)(B) of the Internal Revenue Code which is a financial 
        institution under section 585 or 593 of the Internal Revenue 
        Code. 
           Sec. 27.  Minnesota Statutes 1998, section 290.9726, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [FINANCIAL INSTITUTIONS.] An S corporation that 
        is subject to the tax under section 290.9725, clause (2), must 
        report to each shareholder an apportionment of the S 
        corporation's tax obligation for the taxable year for purposes 
        of the credit under section 290.06, subdivision 26.  The 
        apportionment to a shareholder must be made in proportion to the 
        amount of taxable income of the S corporation apportioned to the 
        shareholder. 
           Sec. 28.  Minnesota Statutes 1998, section 290A.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
        following:  
           (a) federal adjusted gross income as defined in the 
        Internal Revenue Code; and 
           (b) the sum of the following amounts to the extent not 
        included in clause (a):  
           (i) all nontaxable income; 
           (ii) the amount of a passive activity loss that is not 
        disallowed as a result of section 469, paragraph (i) or (m) of 
        the Internal Revenue Code and the amount of passive activity 
        loss carryover allowed under section 469(b) of the Internal 
        Revenue Code; 
           (iii) an amount equal to the total of any discharge of 
        qualified farm indebtedness of a solvent individual excluded 
        from gross income under section 108(g) of the Internal Revenue 
        Code; 
           (iv) cash public assistance and relief; 
           (v) any pension or annuity (including railroad retirement 
        benefits, all payments received under the federal Social 
        Security Act, supplemental security income, and veterans 
        benefits), which was not exclusively funded by the claimant or 
        spouse, or which was funded exclusively by the claimant or 
        spouse and which funding payments were excluded from federal 
        adjusted gross income in the years when the payments were made; 
           (vi) interest received from the federal or a state 
        government or any instrumentality or political subdivision 
        thereof; 
           (vii) workers' compensation; 
           (viii) nontaxable strike benefits; 
           (ix) the gross amounts of payments received in the nature 
        of disability income or sick pay as a result of accident, 
        sickness, or other disability, whether funded through insurance 
        or otherwise; 
           (x) a lump sum distribution under section 402(e)(3) of the 
        Internal Revenue Code; 
           (xi) contributions made by the claimant to an individual 
        retirement account, including a qualified voluntary employee 
        contribution; simplified employee pension plan; self-employed 
        retirement plan; cash or deferred arrangement plan under section 
        401(k) of the Internal Revenue Code; or deferred compensation 
        plan under section 457 of the Internal Revenue Code; and 
           (xii) nontaxable scholarship or fellowship grants.  
           In the case of an individual who files an income tax return 
        on a fiscal year basis, the term "federal adjusted gross income" 
        shall mean federal adjusted gross income reflected in the fiscal 
        year ending in the calendar year.  Federal adjusted gross income 
        shall not be reduced by the amount of a net operating loss 
        carryback or carryforward or a capital loss carryback or 
        carryforward allowed for the year.  
           (2) "Income" does not include:  
           (a) amounts excluded pursuant to the Internal Revenue Code, 
        sections 101(a) and 102; 
           (b) amounts of any pension or annuity which was exclusively 
        funded by the claimant or spouse and which funding payments were 
        not excluded from federal adjusted gross income in the years 
        when the payments were made; 
           (c) surplus food or other relief in kind supplied by a 
        governmental agency; 
           (d) relief granted under this chapter; or 
           (e) child support payments received under a temporary or 
        final decree of dissolution or legal separation; or 
           (f) holocaust settlement payments as defined in section 
        290.01, subdivision 32.  
           (3) The sum of the following amounts may be subtracted from 
        income:  
           (a) for the claimant's first dependent, the exemption 
        amount multiplied by 1.4; 
           (b) for the claimant's second dependent, the exemption 
        amount multiplied by 1.3; 
           (c) for the claimant's third dependent, the exemption 
        amount multiplied by 1.2; 
           (d) for the claimant's fourth dependent, the exemption 
        amount multiplied by 1.1; 
           (e) for the claimant's fifth dependent, the exemption 
        amount; and 
           (f) if the claimant or claimant's spouse was disabled or 
        attained the age of 65 on or before December 31 of the year for 
        which the taxes were levied or rent paid, the exemption amount.  
           For purposes of this subdivision, the "exemption amount" 
        means the exemption amount under section 151(d) of the Internal 
        Revenue Code for the taxable year for which the income is 
        reported.  
           Sec. 29.  [NONBUSINESS INCOME; PRE-1999 TAX YEARS.] 
           If all items of income, gain, or loss are reported by a 
        taxpayer as business income or loss on an original or amended 
        return for a tax year to which this section applies, the 
        commissioner of revenue shall not adjust the tax liability for 
        that tax year, or for any other tax year affected by a carryover 
        from that tax year, by treating any of the items as nonbusiness 
        income or loss under Minnesota Statutes, section 290.17, 
        subdivision 6.  Any adjustment treating an item as nonbusiness 
        income or loss ordered by the commissioner before the effective 
        date of this section must be reversed if the order is subject to 
        administrative or judicial challenge on the effective date and 
        such a challenge is timely filed.  The reporting of any item as 
        nonbusiness income, gain, or loss does not preclude the 
        application of this section if the taxpayer may not 
        constitutionally be required to treat the item as business 
        income, gain, or loss. 
           Sec. 30.  [BANK S CORPORATION SHAREHOLDERS; ALTERNATIVE 
        MINIMUM TAX.] 
           For taxable years beginning after December 31, 1997, and 
        before January 1, 1999, a taxpayer is allowed a deduction in 
        computing alternative minimum taxable income under Minnesota 
        Statutes 1998, section 290.091, subdivision 2, paragraph (a), 
        equal to the amount of the subtraction under Minnesota Statutes 
        1998, section 290.01, subdivision 19b, clause (13). 
           Sec. 31.  [APPROPRIATION.] 
           (a) $100,000 is appropriated from the general fund to the 
        commissioner of revenue to make grants to one or more nonprofit 
        organizations, qualifying under section 501(c)(3) of the 
        Internal Revenue Code of 1986, to coordinate, facilitate, 
        encourage, and aid in the provision of taxpayer assistance 
        services.  In making grants under this appropriation, the 
        commissioner shall give preference to organizations that will 
        use the grants to attract new and train new and existing 
        volunteers to provide taxpayer assistance.  This appropriation 
        is available for fiscal years 2000 and 2001 and does not become 
        a part of the base. 
           (b) "Taxpayer assistance services" means accounting and tax 
        preparation services provided by volunteers to low-income and 
        disadvantaged Minnesota residents to help them file federal and 
        state income tax returns and Minnesota property tax refund 
        claims and to provide personal representation before the 
        department of revenue and the Internal Revenue Service. 
           Sec. 32.  [EFFECTIVE DATE.] 
           (a) Section 1 applies to claims written off after June 30, 
        1999.  
           (b) Section 2 is intended to clarify rather than to change 
        the definition of resident and is effective for all 
        examinations, claims for refund, administrative appeals, and 
        court proceedings that are pending or begin on or after the day 
        following final enactment. 
           (c) Except as otherwise provided, sections 3 to 5, 7 to 11, 
        13 to 18, 21, 22, the changes to clauses (b), (c), and (j), 23, 
        and 26 to 28 are effective for tax years beginning after 
        December 31, 1998.  The provisions substituting qualifying child 
        for dependent in sections 4 and 13 are effective for taxable 
        years beginning after December 31, 1999. 
           (d) Section 4, clause (4), and section 6 are effective for 
        taxable years beginning after December 31, 1999. 
           (e) Section 12, clause (g), is effective for tax years 
        beginning after December 31, 1997.  The rest of section 12 is 
        effective for taxable years beginning after December 31, 1998.  
           (f) Sections 19, 20, and 22, the changes to clause (a), are 
        effective for tax years beginning on or after the day following 
        final enactment.  
           (g) Sections 24 and 25 are effective for taxable years 
        beginning after December 31, 2000. 
           (h) Section 29 is effective on the day after final 
        enactment and applies to tax years beginning before January 1, 
        1999. 
           (i) Section 30 is effective for tax years after December 
        31, 1997, and beginning before January 1, 1999. 
           (j) Section 31 is effective the day following final 
        enactment. 
                                   ARTICLE 3 
                                 FEDERAL UPDATE
           Section 1.  Minnesota Statutes 1998, 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 December 31, 1997 1998. 
           Sec. 2.  Minnesota Statutes 1998, section 290.01, 
        subdivision 19, is amended to read: 
           Subd. 19.  [NET INCOME.] The term "net income" means the 
        federal taxable income, as defined in section 63 of the Internal 
        Revenue Code of 1986, as amended through the date named in this 
        subdivision, incorporating any elections made by the taxpayer in 
        accordance with the Internal Revenue Code in determining federal 
        taxable income for federal income tax purposes, and with the 
        modifications provided in subdivisions 19a to 19f. 
           In the case of a regulated investment company or a fund 
        thereof, as defined in section 851(a) or 851(g) of the Internal 
        Revenue Code, federal taxable income means investment company 
        taxable income as defined in section 852(b)(2) of the Internal 
        Revenue Code, except that:  
           (1) the exclusion of net capital gain provided in section 
        852(b)(2)(A) of the Internal Revenue Code does not apply; 
           (2) the deduction for dividends paid under section 
        852(b)(2)(D) of the Internal Revenue Code must be applied by 
        allowing a deduction for capital gain dividends and 
        exempt-interest dividends as defined in sections 852(b)(3)(C) 
        and 852(b)(5) of the Internal Revenue Code; and 
           (3) the deduction for dividends paid must also be applied 
        in the amount of any undistributed capital gains which the 
        regulated investment company elects to have treated as provided 
        in section 852(b)(3)(D) of the Internal Revenue Code.  
           The net income of a real estate investment trust as defined 
        and limited by section 856(a), (b), and (c) of the Internal 
        Revenue Code means the real estate investment trust taxable 
        income as defined in section 857(b)(2) of the Internal Revenue 
        Code.  
           The net income of a designated settlement fund as defined 
        in section 468B(d) of the Internal Revenue Code means the gross 
        income as defined in section 468B(b) of the Internal Revenue 
        Code. 
           The 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, the provisions of sections 
        7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
        1989, Public Law Number 101-239, the provisions of sections 
        1305, 1704(r), and 1704(e)(1) of the Small Business Job 
        Protection Act, Public Law Number 104-188, and the provisions of 
        sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 
        of 1997, Public Law Number 105-34, and the provisions of section 
        4004 of the Omnibus Consolidated and Emergency Supplemental 
        Appropriations Act, 1999, Public Law Number 105-277 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, 
        the provisions of sections 11701 and 11703 of the Revenue 
        Reconciliation Act of 1990, Public Law Number 101-508, and the 
        provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 
        Small Business Job Protection Act, Public Law Number 104-188, 
        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, 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, and the provisions of section 1604(a)(1), (2), and (3) 
        of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
        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, the provisions of sections 1703(a), 1703(d), 1703(i), 
        1703(l), and 1703(m) of the Small Business Job Protection Act, 
        Public Law Number 104-188, and the provision of section 1604(c) 
        of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
        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, the provisions of sections 1, 2, and 3, of 
        the Self-Employed Health Insurance Act of 1995, Public Law 
        Number 104-7, the provision of section 501(b)(2) of the Health 
        Insurance Portability and Accountability Act, Public Law Number 
        104-191, the provisions of sections 1604 and 1704(p)(1) and (2) 
        of the Small Business Job Protection Act, Public Law Number 
        104-188, and the provisions of sections 1011, 1211(b)(1), and 
        1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 
        105-34, 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 provisions of sections 1119(a), 1120, 1121, 1202(a), 
        1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 
        Business Job Protection Act, Public Law Number 104-188, the 
        provision of section 511 of the Health Insurance Portability and 
        Accountability Act, Public Law Number 104-191, and the 
        provisions of sections 1174 and 1601(i)(2) of the Taxpayer 
        Relief Act of 1997, Public Law Number 105-34, shall become 
        effective at the time they become effective for federal purposes.
           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 sections 1113(a), 1117, 1206(a), 1313(a), 
        1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
        1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
        Protection Act, Public Law Number 104-188, the provisions of 
        Public Law Number 104-117, and the provisions of sections 313(a) 
        and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 
        1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 
        1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 
        1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 
        1997, Public Law Number 105-34, the provisions of section 6010 
        of the Internal Revenue Service Restructuring and Reform Act of 
        1998, Public Law Number 105-206, and the provisions of section 
        4003 of the Omnibus Consolidated and Emergency Supplemental 
        Appropriations Act, 1999, Public Law Number 105-277, shall 
        become effective at the time they become effective for federal 
        purposes. 
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1996, shall be in effect for taxable years 
        beginning after December 31, 1996. 
           The provisions of sections 202(a) and (b), 221(a), 225, 
        312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
        (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
        1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
        1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
        of the Taxpayer Relief Act of 1997, Public Law Number 
        105-34, the provisions of sections 6004, 6005, 6012, 6013, 6015, 
        6016, 7002, and 7003 of the Internal Revenue Service 
        Restructuring and Reform Act of 1998, Public Law Number 105-206, 
        and the provisions of section 3001 of the Omnibus Consolidated 
        and Emergency Supplemental Appropriations Act, 1999, Public Law 
        Number 105-277, shall become effective at the time they become 
        effective for federal purposes. 
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1997, shall be in effect for taxable years 
        beginning after December 31, 1997. 
           The provisions of sections 5002, 6009, 6011, and 7001 of 
        the Internal Revenue Service Restructuring and Reform Act of 
        1998, Public Law Number 105-206, the provisions of section 9010 
        of the Transportation Equity Act for the 21st Century, Public 
        Law Number 105-178, the provisions of sections 1004, 4002, and 
        5301 of the Omnibus Consolidation and Emergency Supplemental 
        Appropriations Act, 1999, Public Law Number 105-277, and the 
        provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
        Act of 1998, Public Law Number 105-369, shall become effective 
        at the time they become effective for federal purposes. 
           The Internal Revenue Code of 1986, as amended through 
        December 31, 1998, shall be in effect for taxable years 
        beginning after December 31, 1998. 
           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. 3.  Minnesota Statutes 1998, section 290.01, 
        subdivision 19b, is amended to read: 
           Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
        individuals, estates, and trusts, there shall be subtracted from 
        federal taxable income: 
           (1) interest income on obligations of any authority, 
        commission, or instrumentality of the United States to the 
        extent includable in taxable income for federal income tax 
        purposes but exempt from state income tax under the laws of the 
        United States; 
           (2) if included in federal taxable income, the amount of 
        any overpayment of income tax to Minnesota or to any other 
        state, for any previous taxable year, whether the amount is 
        received as a refund or as a credit to another taxable year's 
        income tax liability; 
           (3) the amount paid to others, less the credit allowed 
        under section 290.0674, not to exceed $1,625 for each dependent 
        in grades kindergarten to 6 and $2,500 for each dependent in 
        grades 7 to 12, for tuition, textbooks, and transportation of 
        each dependent in attending an elementary or secondary school 
        situated in Minnesota, North Dakota, South Dakota, Iowa, or 
        Wisconsin, wherein a resident of this state may legally fulfill 
        the state's compulsory attendance laws, which is not operated 
        for profit, and which adheres to the provisions of the Civil 
        Rights Act of 1964 and chapter 363.  For the purposes of this 
        clause, "tuition" includes fees or tuition as defined in section 
        290.0674, subdivision 1, clause (1).  As used in this clause, 
        "textbooks" includes books and other instructional materials and 
        equipment used in elementary and secondary schools in teaching 
        only those subjects legally and commonly taught in public 
        elementary and secondary schools in this state.  Equipment 
        expenses qualifying for deduction includes expenses as defined 
        and limited in section 290.0674, subdivision 1, clause (3).  
        "Textbooks" does not include instructional books and materials 
        used in the teaching of religious tenets, doctrines, or worship, 
        the purpose of which is to instill such tenets, doctrines, or 
        worship, nor does it include books or materials for, or 
        transportation to, extracurricular activities including sporting 
        events, musical or dramatic events, speech activities, driver's 
        education, or similar programs; 
           (4) to the extent included in federal taxable income, 
        distributions from a qualified governmental pension plan, an 
        individual retirement account, simplified employee pension, or 
        qualified plan covering a self-employed person that represent a 
        return of contributions that were included in Minnesota gross 
        income in the taxable year for which the contributions were made 
        but were deducted or were not included in the computation of 
        federal adjusted gross income.  The distribution shall be 
        allocated first to return of contributions until the 
        contributions included in Minnesota gross income have been 
        exhausted.  This subtraction applies only to contributions made 
        in a taxable year prior to 1985; 
           (5) income as provided under section 290.0802; 
           (6) the amount of unrecovered accelerated cost recovery 
        system deductions allowed under subdivision 19g; 
           (7) to the extent included in federal adjusted gross 
        income, income realized on disposition of property exempt from 
        tax under section 290.491; 
           (8) to the extent not deducted in determining federal 
        taxable income, the amount paid for health insurance of 
        self-employed individuals as determined under section 162(l) of 
        the Internal Revenue Code, except that the 25 percent limit does 
        not apply.  If the taxpayer deducted insurance payments under 
        section 213 of the Internal Revenue Code of 1986, the 
        subtraction under this clause must be reduced by the lesser of: 
           (i) the total itemized deductions allowed under section 
        63(d) of the Internal Revenue Code, less state, local, and 
        foreign income taxes deductible under section 164 of the 
        Internal Revenue Code and the standard deduction under section 
        63(c) of the Internal Revenue Code; or 
           (ii) the lesser of (A) the amount of insurance qualifying 
        as "medical care" under section 213(d) of the Internal Revenue 
        Code to the extent not deducted under section 162(1) of the 
        Internal Revenue Code or excluded from income or (B) the total 
        amount deductible for medical care under section 213(a); 
           (9) the exemption amount allowed under Laws 1995, chapter 
        255, article 3, section 2, subdivision 3; 
           (10) to the extent included in federal taxable income, 
        postservice benefits for youth community service under section 
        124D.42 for volunteer service under United States Code, title 
        42, section 5011(d), as amended; 
           (11) to the extent not subtracted under clause (1), the 
        amount of income or gain included in federal taxable income 
        under section 1366 of the Internal Revenue Code flowing from a 
        corporation that has a valid election in effect for the taxable 
        year under section 1362 of the Internal Revenue Code which is 
        not allowed to be an "S" corporation under section 290.9725; 
           (12) in the year stock of a corporation that had made a 
        valid election under section 1362 of the Internal Revenue Code 
        but was not an "S" corporation under section 290.9725 is sold or 
        disposed of in a transaction taxable under the Internal Revenue 
        Code, the amount of difference between the Minnesota basis of 
        the stock under subdivision 19f, paragraph (m), and the federal 
        basis if the Minnesota basis is higher than the shareholder's 
        federal basis; and 
           (13) an amount equal to an individual's, trust's, or 
        estate's net federal income tax liability for the tax year that 
        is attributable to items of income, expense, gain, loss, or 
        credits federally flowing to the taxpayer in the tax year from a 
        corporation, having a valid election in effect for federal tax 
        purposes under section 1362 of the Internal Revenue Code but not 
        treated as an "S" corporation for state tax purposes under 
        section 290.9725. 
           Sec. 4.  Minnesota Statutes 1998, 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 December 31, 1997 1998. 
           Sec. 5.  Minnesota Statutes 1998, section 290A.03, 
        subdivision 15, is amended to read: 
           Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
        means the Internal Revenue Code of 1986, as amended through 
        December 31, 1997 1998. 
           Sec. 6.  Minnesota Statutes 1998, 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 December 31, 
        1997 1998. 
           Sec. 7.  [EFFECTIVE DATES.] 
           Sections 1, 4, 5, and 6 are effective at the same time 
        federal changes made by the Internal Revenue Service 
        Restructuring and Reform Act of 1998, Public Law Number 105-206 
        and the Omnibus Consolidation and Emergency Supplemental 
        Appropriations Act, 1999, Public Law Number 105-277 which are 
        incorporated into Minnesota Statutes, chapters 289A, 290, 290A, 
        and 291 by these sections become effective for federal tax 
        purposes.  Section 3 is effective for tax years beginning after 
        December 31, 1998. 
                                   ARTICLE 4 
                              SALES AND USE TAXES 
           Section 1.  Minnesota Statutes 1998, section 289A.18, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
        tax returns must be filed on or before the 20th day of the month 
        following the close of the preceding reporting period, except 
        that annual use tax returns provided for under section 289A.11, 
        subdivision 1, must be filed by April 15 following the close of 
        the calendar year, in the case of individuals.  Annual use tax 
        returns of businesses, including sole proprietorships, and 
        annual sales tax returns must be filed by February 5 following 
        the close of the calendar year.  
           (b) Except for the return for the June reporting period, 
        which is due on the following August 25, returns filed by 
        retailers required to remit liabilities by means of funds 
        transfer under section 289A.20, subdivision 4, paragraph (d), 
        are due on or before the 25th day of the month following the 
        close of the preceding reporting period.  
           (c) If a retailer has an average sales and use tax 
        liability, including local sales and use taxes administered by 
        the commissioner, equal to or less than $500 per month in any 
        quarter of a calendar year, and has substantially complied with 
        the tax laws during the preceding four calendar quarters, the 
        retailer may request authorization to file and pay the taxes 
        quarterly in subsequent calendar quarters.  The authorization 
        remains in effect during the period in which the retailer's 
        quarterly returns reflect sales and use tax liabilities of less 
        than $1,500 and there is continued compliance with state tax 
        laws. 
           (d) If a retailer has an average sales and use tax 
        liability, including local sales and use taxes administered by 
        the commissioner, equal to or less than $100 per month during a 
        calendar year, and has substantially complied with the tax laws 
        during that period, the retailer may request authorization to 
        file and pay the taxes annually in subsequent years.  The 
        authorization remains in effect during the period in which the 
        retailer's annual returns reflect sales and use tax liabilities 
        of less than $1,200 and there is continued compliance with state 
        tax laws. 
           (e) The commissioner may also grant quarterly or annual 
        filing and payment authorizations to retailers if the 
        commissioner concludes that the retailers' future tax 
        liabilities will be less than the monthly totals identified in 
        paragraphs (c) and (d).  An authorization granted under this 
        paragraph is subject to the same conditions as an authorization 
        granted under paragraphs (c) and (d). 
           (f) A taxpayer who is a materials supplier may report gross 
        receipts either on: 
           (1) the cash basis as the consideration is received; or 
           (2) the accrual basis as sales are made.  
        As used in this paragraph, "materials supplier" means a person 
        who provides materials for the improvement of real property; who 
        is primarily engaged in the sale of lumber and building 
        materials-related products to owners, contractors, 
        subcontractors, repairers, or consumers; who is authorized to 
        file a mechanics lien upon real property and improvements under 
        chapter 514; and who files with the commissioner an election to 
        file sales and use tax returns on the basis of this paragraph. 
           Sec. 2.  Minnesota Statutes 1998, section 289A.20, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
        chapter 297A are due and payable to the commissioner monthly on 
        or before the 20th day of the month following the month in which 
        the taxable event occurred, or following another reporting 
        period as the commissioner prescribes or as allowed under 
        section 289A.18, subdivision 4, paragraph (f), except that use 
        taxes due on an annual use tax return as provided under section 
        289A.11, subdivision 1, are payable by April 15 following the 
        close of the calendar year. 
           (b) A vendor having a liability of $120,000 or more during 
        a fiscal year ending June 30 must remit the June liability for 
        the next year in the following manner: 
           (1) Two business days before June 30 of the year, the 
        vendor must remit 75 percent of the estimated June liability to 
        the commissioner.  
           (2) On or before August 14 of the year, the vendor must pay 
        any additional amount of tax not remitted in June. 
           (c) A vendor having a liability of $120,000 or more during 
        a fiscal year ending June 30 must remit all liabilities in the 
        subsequent calendar year by means of a funds transfer as defined 
        in section 336.4A-104, paragraph (a).  The funds transfer 
        payment date, as defined in section 336.4A-401, must be on or 
        before the 14th day of the month following the month in which 
        the taxable event occurred, or on or before the 14th day of the 
        month following the month in which the sale is reported under 
        section 289A.18, subdivision 4, except for 75 percent of the 
        estimated June liability, which is due two business days before 
        June 30.  The remaining amount of the June liability is due on 
        August 14.  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) If the vendor required to remit by electronic funds 
        transfer as provided in paragraph (c) is unable due to 
        reasonable cause to determine the actual sales and use tax due 
        on or before the due date for payment, the vendor may remit an 
        estimate of the tax owed using one of the following options: 
           (1) 100 percent of the tax reported on the previous month's 
        sales and use tax return; 
           (2) 100 percent of the tax reported on the sales and use 
        tax return for the same month in the previous calendar year; or 
           (3) 95 percent of the actual tax due. 
           Any additional amount of tax that is not remitted on or 
        before the due date for payment, must be remitted with the 
        return.  If a vendor fails to remit the actual liability or does 
        not remit using one of the estimate options by the due date for 
        payment, the vendor must remit actual liability as provided in 
        paragraph (c) in all subsequent periods.  This paragraph does 
        not apply to the June sales and use tax liability. 
           Sec. 3.  Minnesota Statutes 1998, 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 297A.15, subdivision 5, interest is computed from 
        the date the refund claim is filed with the commissioner.  For 
        refunds payable under section 289A.50, subdivision 2a, interest 
        is computed from the 20th day of the month following the month 
        of the invoice date for the purchase which is the subject of the 
        refund, if the refund claim includes a detailed schedule of 
        purchases made during each of the periods in the claim.  If the 
        refund claim submitted does not contain a schedule reflecting 
        purchases made in each period, interest is computed from the 
        date the claim was filed. 
           Sec. 4.  Minnesota Statutes 1998, section 297A.25, 
        subdivision 9, is amended to read: 
           Subd. 9.  [MATERIALS CONSUMED IN PRODUCTION.] The gross 
        receipts from the sale of and the storage, use, or consumption 
        of all materials, including chemicals, fuels, petroleum 
        products, lubricants, packaging materials, including returnable 
        containers used in packaging food and beverage products, feeds, 
        seeds, fertilizers, electricity, gas and steam, used or consumed 
        in agricultural or industrial production of personal property 
        intended to be sold ultimately at retail, whether or not the 
        item so used becomes an ingredient or constituent part of the 
        property produced are exempt.  Seeds, trees, fertilizers, and 
        herbicides purchased for use by farmers in the Conservation 
        Reserve Program under United States Code, title 16, section 
        590h, as amended through December 31, 1991, the Integrated Farm 
        Management Program under section 1627 of Public Law Number 
        101-624, the Wheat and Feed Grain Programs under sections 301 to 
        305 and 401 to 405 of Public Law Number 101-624, and the 
        conservation reserve program under sections 103F.505 to 
        103F.531, are included in this exemption.  Sales to a 
        veterinarian of materials used or consumed in the care, 
        medication, and treatment of horses and agricultural production 
        animals are exempt under this subdivision.  Chemicals used for 
        cleaning food processing machinery and equipment are included in 
        this exemption.  Materials, including chemicals, fuels, and 
        electricity purchased by persons engaged in agricultural or 
        industrial production to treat waste generated as a result of 
        the production process are included in this exemption.  Such 
        production shall include, but is not limited to, research, 
        development, design or production of any tangible personal 
        property, manufacturing, processing (other than by restaurants 
        and consumers) of agricultural products whether vegetable or 
        animal, commercial fishing, refining, smelting, reducing, 
        brewing, distilling, printing, mining, quarrying, lumbering, 
        generating electricity and the production of road building 
        materials.  Such production shall not include painting, 
        cleaning, repairing or similar processing of property except as 
        part of the original manufacturing process.  Machinery, 
        equipment, implements, tools, accessories, appliances, 
        contrivances, furniture and fixtures, used in such production 
        and fuel, electricity, gas or steam used for space heating or 
        lighting, are not included within this exemption; however, 
        accessory tools, equipment and other short lived items, which 
        are separate detachable units used in producing a direct effect 
        upon the product, where such items have an ordinary useful life 
        of less than 12 months, are included within the exemption 
        provided herein.  The following materials, tools, and equipment 
        used in metalcasting are exempt under this subdivision: 
        crucibles, thermocouple protection sheaths and tubes, stalk 
        tubes, refractory materials, molten metal filters and filter 
        boxes, and degassing lances.  Electricity used to make snow for 
        outdoor use for ski hills, ski slopes, or ski trails is included 
        in this exemption.  Petroleum and special fuels used in 
        producing or generating power for propelling ready-mixed 
        concrete trucks on the public highways of this state are not 
        included in this exemption. 
           Sec. 5.  Minnesota Statutes 1998, section 297A.25, 
        subdivision 63, is amended to read: 
           Subd. 63.  [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 
        The gross receipts from the sale of tangible personal property 
        to, and the storage, use, or consumption of such property by, a 
        hospital are exempt, if the property purchased is to be used in 
        providing hospital services to human beings.  For purposes of 
        this subdivision, "hospital" means a hospital organized and 
        operated for charitable purposes within the meaning of section 
        501(c)(3) of the Internal Revenue Code of 1986, as amended, and 
        licensed under chapter 144 or by any other jurisdiction.  For 
        purposes of this subdivision, "hospital services" are means 
        services authorized or required to be performed by 
        a "hospital" hospital under chapter 144 and regulations rules 
        thereunder or under the applicable licensure law of any other 
        jurisdiction.  This exemption does 
           (b) The gross receipts from the sale of tangible personal 
        property to, and the storage, use, or consumption of such 
        property by, an outpatient surgical center are exempt, if the 
        property purchased is to be used in providing outpatient 
        surgical services to human beings.  For purposes of this 
        subdivision, "outpatient surgical center" means an outpatient 
        surgical center organized and operated for charitable purposes 
        within the meaning of section 501(c)(3) of the Internal Revenue 
        Code of 1986, as amended, and licensed under chapter 144 or by 
        any other jurisdiction.  For the purposes of this subdivision, 
        "outpatient surgical services" means:  (1) services authorized 
        or required to be performed by an outpatient surgical center 
        under chapter 144 and rules thereunder or under the applicable 
        licensure law of any other jurisdiction; and (2) urgent care.  
        For purposes of this subdivision, "urgent care" means health 
        services furnished to a person whose medical condition is 
        sufficiently acute to require treatment unavailable through, or 
        inappropriate to be provided by, a clinic or physician's office, 
        but not so acute as to require treatment in a hospital emergency 
        room.  
           (c) These exemptions do not apply to purchases made by a 
        clinic, physician's office, or any other medical facility not 
        operating as a hospital or outpatient surgical center, even 
        though the clinic, office, or facility may be owned and operated 
        by a hospital or outpatient surgical center.  Sales exempted by 
        this subdivision do not include sales under section 297A.01, 
        subdivision 3, paragraphs (c) and (e).  This exemption 
        does These exemptions do not apply to building, construction, or 
        reconstruction materials purchased by a contractor or a 
        subcontractor as a part of a lump-sum contract or similar type 
        of contract with a guaranteed maximum price covering both labor 
        and materials for use in the construction, alteration, or repair 
        of a hospital or outpatient surgical center.  This exemption 
        does These exemptions do not apply to construction materials to 
        be used in constructing buildings or facilities which will not 
        be used principally by a hospital or outpatient surgical 
        center.  This exemption does These exemptions do not apply to 
        the leasing of a motor vehicle as defined in section 297B.01, 
        subdivision 5. 
           Sec. 6.  Minnesota Statutes 1998, section 297A.25, 
        subdivision 73, is amended to read: 
           Subd. 73.  [BIOSOLIDS PROCESSING EQUIPMENT.] (a) The gross 
        receipts from the sale of and the storage, use, or consumption 
        of equipment designed to process, dewater, and recycle biosolids 
        for wastewater treatment facilities of political subdivisions, 
        and materials incidental to installation of that equipment, are 
        exempt. 
           (b) The gross receipts from the sale of and the storage, 
        use, or consumption of materials used to construct buildings to 
        house the equipment in paragraph (a) are exempt if purchased 
        after June 30, 1998, and before July 1, 2001. 
           Sec. 7.  Minnesota Statutes 1998, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 79.  [PRIZES.] The gross receipts from the sales of 
        tangible personal property which will be given as prizes to 
        players in games of skill or chance conducted at events such as 
        community festivals, fairs, and carnivals lasting less than six 
        days are exempt.  This exemption shall not apply to property 
        awarded as prizes in connection with lawful gambling as defined 
        in section 349.12 or the state lottery. 
           Sec. 8.  Minnesota Statutes 1998, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 80.  [CONSTRUCTION MATERIALS AND SUPPLIES; 
        AGRICULTURAL PROCESSING FACILITY.] Purchases of construction 
        materials, supplies, and equipment 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: 
           (1) the materials and supplies are used or consumed in, and 
        the equipment is incorporated into, the expansion, remodeling, 
        or improvement of a facility used for cattle slaughtering; 
           (2) the cost of the project is expected to exceed 
        $15,000,000; 
           (3) the expansion, remodeling, or improvement of the 
        facility will be used to fabricate beef; 
           (4) the number of jobs at the facility are expected to 
        increase by at least 150 when the project is completed; and 
           (5) the project is expected to be completed by December 31, 
        2001. 
           Sec. 9.  Minnesota Statutes 1998, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 82.  [TELEVISION COMMERCIALS.] The gross receipts 
        from the sale of and storage, use, or consumption of tangible 
        personal property which is primarily used or consumed in the 
        preproduction, production, or postproduction of any television 
        commercial and any such commercial, regardless of the medium in 
        which it is transferred, are exempt.  "Preproduction" and 
        "production" include but are not limited to all activities 
        related to the preparation for shooting and the shooting of 
        television commercials, including film processing.  Equipment 
        rented for the preproduction and production activities is 
        exempt.  "Postproduction" includes but is not limited to all 
        activities related to the finishing and duplication of 
        television commercials.  This exemption does not apply to 
        tangible personal property used primarily in administration, 
        general management, or marketing.  Machinery and equipment 
        purchased for use in producing such commercials and fuel, 
        electricity, gas, or steam used for space heating or lighting 
        are not exempt under this subdivision. 
           Sec. 10.  Minnesota Statutes 1998, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 83.  [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS 
        ELECTRICAL GENERATING FACILITY.] The gross receipts from the 
        purchases of materials and supplies used or consumed in, and 
        equipment incorporated into, the construction, improvement, or 
        expansion of a facility using biomass to generate electricity 
        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: 
           (1) the facility exclusively utilizes residue wood, 
        sawdust, bark, chipped wood, or brush to generate electricity; 
           (2) the facility utilizes a reciprocated grate combination 
        system; and 
           (3) the total gross capacity of the facility is 15 to 21 
        megawatts. 
           Sec. 11.  Minnesota Statutes 1998, section 297A.25, is 
        amended by adding a subdivision to read: 
           Subd. 84.  [WASTE MANAGEMENT CONTAINERS AND 
        COMPACTORS.] The gross receipts from the sale of and storage, 
        use, or consumption of compactors and waste collection 
        containers are exempt from the sales and use taxes imposed under 
        this chapter provided that they are purchased by a waste 
        management service provider, and are used in providing waste 
        management services as defined in section 297H.01, subdivision 
        12.  A waste management service provider that does not remit tax 
        on customer charges or lease or rental payments for compactors 
        and waste collection containers under chapter 297H is ineligible 
        for this exemption. 
           Sec. 12.  Minnesota Statutes 1998, section 297A.48, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [RULES FOR ADOPTION, USE, TERMINATION.] (a) 
        Imposition of a local sales tax is subject to approval by voters 
        of the political subdivision at a general election. 
           (b) The proceeds of the tax must be dedicated exclusively 
        to payment of the cost of a specific capital improvement which 
        is designated at least 90 days before the referendum on 
        imposition of the tax is conducted. 
           (c) The tax must terminate after the improvement designated 
        under paragraph (b) has been completed. 
           (d) After a sales tax imposed by a political subdivision 
        has expired or been terminated, the political subdivision is 
        prohibited from imposing a local sales tax for a period of one 
        year.  Notwithstanding subdivision 10, this paragraph applies to 
        all local sales taxes in effect at the time of or imposed after 
        the date of enactment of this section.  
           Sec. 13.  Minnesota Statutes 1998, section 297A.48, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [USE OF ZIP CODE IN DETERMINING LOCATION OF 
        SALE.] To determine whether to impose the local tax, the 
        retailer may use zip codes if the zip code area is entirely 
        within the political subdivision.  When a zip code area is not 
        entirely within a political subdivision, the retailer shall not 
        collect the local tax if the purchaser notified the retailer 
        that their delivery address is outside of the political 
        subdivision, unless the retailer verifies that the delivery 
        address is in the political subdivision using a means other than 
        the zip code.  Notwithstanding subdivision 10, this subdivision 
        applies to all local sales taxes without regard to the date of 
        authorization. 
           Sec. 14.  Laws 1998, chapter 389, article 8, section 44, 
        subdivision 5, is amended to read: 
           Subd. 5.  [USE OF REVENUES.] (a) Revenues received from the 
        taxes authorized by subdivisions 1 to 4 must be used to pay for 
        the cost of collecting the taxes; to pay all or part of the 
        capital or administrative cost of the acquisition, construction, 
        and improvement of the Central Minnesota Events Center and 
        related on-site and off-site improvements; and to pay for the 
        operating deficit, if any, in the first five years of operation 
        of the facility.  Authorized expenses related to acquisition, 
        construction, and improvement of the center include, but are not 
        limited to, acquiring property, paying construction and 
        operating expenses related to the development of the facility, 
        and securing and paying debt service on bonds or other 
        obligations issued to finance construction or improvement of the 
        authorized facility. 
           (b) In addition, if the revenues collected from a tax 
        imposed in subdivisions 1 to 4 are greater than the amount 
        needed to meet obligations under paragraph (a) in any year, the 
        surplus may be returned to the cities in a manner agreed upon by 
        the participating cities under this section, to be used by the 
        cities for projects of regional significance, limited to the 
        acquisition and improvement of park land and open space; the 
        purchase, renovation, and construction of public buildings and 
        land primarily used for the arts, libraries, and community 
        centers; and for debt service on bonds issued for these 
        purposes.  The amount of surplus revenues raised by a tax will 
        be determined either as provided for by an applicable joint 
        powers agreement or by a governing entity in charge of 
        administering the project in paragraph (a). 
           (c) If start of the Central Minnesota Events Center under 
        paragraph (a) is delayed, the cities may still impose the tax, 
        and use a portion of the revenue to fund the projects under 
        paragraph (b), provided that revenues are reserved to pay future 
        costs of the construction of the events center in paragraph (a) 
        as provided by a joint powers agreement or by a governing entity 
        in charge of administering the project.  If a decision is made 
        not to proceed with the event center under paragraph (a) or 
        construction of the event center has not begun by December 31, 
        2007, the funds in the reserve account shall be distributed to 
        the cities based on the joint powers agreement to pay for other 
        projects permitted under paragraph (b).  All revenues raised 
        from these taxes after December 31, 2008, must be used 
        exclusively to pay off bonds for the event center project under 
        paragraph (a) and to pay off bonds issued under subdivision 6. 
           Sec. 15.  Laws 1998, chapter 389, article 8, section 44, 
        subdivision 6, is amended to read: 
           Subd. 6.  [BONDING AUTHORITY.] (a) The cities named in 
        subdivision 1 may issue bonds under Minnesota Statutes, chapter 
        475, to finance the acquisition, construction, and improvement 
        of the Central Minnesota Events Center.  An election to approve 
        the bonds under Minnesota Statutes, section 475.58, may be held 
        in combination with the election to authorize imposition of the 
        tax under subdivision 1.  Whether to permit imposition of the 
        tax and issuance of bonds may be posed to the voters as a single 
        question.  The question must state that the sales tax revenues 
        are pledged to pay the bonds, but that the bonds are general 
        obligations and will be guaranteed by the city's property taxes. 
           (b) The issuance of bonds under this subdivision is not 
        subject to Minnesota Statutes, section 275.60. 
           (c) The bonds are not included in computing any debt 
        limitation applicable to the city, and the levy of taxes under 
        Minnesota Statutes, section 475.61, to pay principal of and 
        interest on the bonds is not subject to any levy limitation. 
        The aggregate principal amount of bonds issued by all cities 
        named in subdivision 1, plus the aggregate of the taxes used 
        directly to pay eligible capital expenditures and improvements 
        for the Central Minnesota Events Center, may not exceed 
        $50,000,000, plus an amount equal to the costs related to 
        issuance of the bonds, less any amount made available to the 
        cities for the project described in subdivision 5 under the 
        capital expenditure legislation adopted during the 1998 session 
        of the legislature. 
           (d) The taxes may be pledged to and used for the payment of 
        the bonds and any bonds issued to refund them, only if the bonds 
        and any refunding bonds are general obligations of the city. 
           (e) The cities named in subdivision 1 may issue bonds for 
        the projects listed in subdivision 5, paragraph (b), under 
        regular bonding authority.  Bonds for these projects, to be paid 
        from tax revenues under this section, may not be issued after 
        December 31, 2008. 
           Sec. 16.  Laws 1998, chapter 389, article 8, section 44, 
        subdivision 7, as amended by Laws 1998, chapter 408, section 20, 
        is amended to read: 
           Subd. 7.  [TERMINATION OF TAXES.] The taxes imposed by each 
        city under subdivisions 1 to 4 expire at the earlier of 30 years 
        or when sufficient funds have been received from the taxes to 
        finance the obligations under subdivisions 5, paragraph (a), and 
        6, and to prepay or retire at maturity the principal, interest, 
        and premium due on the original bonds issued for the initial 
        acquisition, construction, and improvement of the Central 
        Minnesota Events Center as determined under an applicable joint 
        powers agreement or by a governing entity in charge of 
        administering the project.  Any funds remaining after completion 
        of the project and retirement or redemption of the bonds may be 
        placed in the general funds of the cities imposing the taxes.  
        The taxes imposed by a city under this section may expire at an 
        earlier time by city ordinance, if authorized under the 
        applicable joint powers agreement or by the governing entity in 
        charge of administering the project. 
           If the cities that pass a referendum required under 
        subdivision 6 1 determine that the revenues raised from the sum 
        of all the taxes authorized by referendum under this subdivision 
        section will not be sufficient to fund the project in 
        subdivision 5, paragraph (a), none of the authorized taxes may 
        be imposed. 
           If the taxes are imposed, as allowed under subdivision 5, 
        paragraph (c), and the cities determine at a later date that 
        there are not sufficient funds to fund the Central Minnesota 
        Events Center under subdivision 5, paragraph (a), or the funding 
        for the event center has not been determined by December 31, 
        2008, the taxes will be terminated as soon as sufficient 
        revenues are raised to prepay or retire at maturity the 
        principal, interest, and premium due on bonds issued under 
        subdivision 6, paragraph (e). 
           Sec. 17.  [CITY OF NEW ULM; TAXES AUTHORIZED.] 
           Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
        Minnesota Statutes, section 477A.016, or any other provision of 
        law, ordinance, or city charter, if approved by the city voters 
        at the first municipal general election held after the date of 
        final enactment of this act, the city of New Ulm may impose by 
        ordinance a sales and use tax of up to one-half of one percent 
        for the purposes specified in subdivision 3.  The provisions of 
        Minnesota Statutes, section 297A.48, govern the imposition, 
        administration, collection, and enforcement of the tax 
        authorized under this subdivision. 
           Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, section 477A.016, or any other provision of 
        law, ordinance, or city charter, the city of New Ulm may impose 
        by ordinance, for the purposes specified in subdivision 3, an 
        excise tax of up to $20 per motor vehicle, as defined by 
        ordinance, purchased or acquired from any person engaged within 
        the city in the business of selling motor vehicles at retail. 
           Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
        authorized by subdivisions 1 and 2 must be used by the city to 
        pay the cost of collecting the taxes and to pay for construction 
        and improvement of a civic and community center and recreational 
        facilities to serve all ages, including seniors and youth.  
        Authorized expenses include, but are not limited to, acquiring 
        property, paying construction and operating expenses related to 
        the development of an authorized facility, funding facilities 
        replacement reserves, and paying debt service on bonds or other 
        obligations issued to finance the construction or expansion of 
        an authorized facility.  The capital expenses for all projects 
        authorized under this subdivision that may be paid with these 
        taxes are limited to $9,000,000, plus an amount equal to the 
        costs related to issuance of the bonds and funding facilities 
        replacement reserves. 
           Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
        under Minnesota Statutes, chapter 475, to finance the capital 
        expenditure and improvement projects.  An election to approve 
        the bonds under Minnesota Statutes, section 475.58, may be held 
        in combination with the election to authorize imposition of the 
        tax under subdivision 1.  Whether to permit imposition of the 
        tax and issuance of bonds may be posed to the voters as a single 
        question.  The question must state that the sales tax revenues 
        are pledged to pay the bonds, but that the bonds are general 
        obligations and will be guaranteed by the city's property taxes. 
           (b) The issuance of bonds under this subdivision is not 
        subject to Minnesota Statutes, sections 275.60 and 275.61. 
           (c) The bonds are not included in computing any debt 
        limitation applicable to the city, and the levy of taxes under 
        Minnesota Statutes, section 475.61, to pay principal of and 
        interest on the bonds is not subject to any levy limitation.  
        The aggregate principal amount of bonds, plus the aggregate of 
        the taxes used directly to pay eligible capital expenditures and 
        improvements may not exceed $9,000,000, plus an amount equal to 
        the costs related to issuance of the bonds. 
           (d) The taxes may be pledged to and used for the payment of 
        the bonds and any bonds issued to refund them, only if the bonds 
        and any refunding bonds are general obligations of the city. 
           Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
        subdivisions 1 and 2 expire when the city council determines 
        that sufficient funds have been received from the taxes to 
        finance the capital and administrative costs for the 
        acquisition, construction, and improvement of facilities 
        described in subdivision 3, and to prepay or retire at maturity 
        the principal, interest, and premium due on any bonds issued for 
        the facilities under subdivision 4.  Any funds remaining after 
        completion of the project and retirement or redemption of the 
        bonds may be placed in the general fund of the city.  The taxes 
        imposed under subdivisions 1 and 2 may expire at an earlier time 
        if the city so determines by ordinance. 
           Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
        day after compliance by the governing body of the city of New 
        Ulm with Minnesota Statutes, section 645.021, subdivision 3. 
           Sec. 18.  [CITY OF PROCTOR; TAXES AUTHORIZED.] 
           Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
        Minnesota Statutes, section 297A.48, subdivision 1a, 477A.016, 
        or any other provision of law, ordinance, or city charter, if 
        approved by the city voters at the first municipal general 
        election held after the date of final enactment of this act or 
        at a special election held November 2, 1999, the city of Proctor 
        may impose by ordinance a sales and use tax of up to one-half of 
        one percent for the purposes specified in subdivision 3.  The 
        provisions of Minnesota Statutes, section 297A.48, govern the 
        imposition, administration, collection, and enforcement of the 
        tax authorized under this subdivision. 
           Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, section 477A.016, or any other provision of 
        law, ordinance, or city charter, the city of Proctor may impose 
        by ordinance, for the purposes specified in subdivision 3, an 
        excise tax of up to $20 per motor vehicle, as defined by 
        ordinance, purchased or acquired from any person engaged within 
        the city in the business of selling motor vehicles at retail. 
           Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
        authorized by subdivisions 1 and 2 must be used by the city to 
        pay the cost of collecting the taxes and to pay for construction 
        and improvement of the following city facilities: 
           (1) streets; and 
           (2) constructing and equipping the Proctor community 
        activity center. 
           Authorized expenses include, but are not limited to, 
        acquiring property, paying construction and operating expenses 
        related to the development of an authorized facility, and paying 
        debt service on bonds or other obligations, including lease 
        obligations, issued to finance the construction, expansion, or 
        improvement of an authorized facility.  The capital expenses for 
        all projects authorized under this paragraph that may be paid 
        with these taxes is limited to $3,600,000, plus an amount equal 
        to the costs related to issuance of the bonds. 
           Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
        under Minnesota Statutes, chapter 475, to finance the capital 
        expenditure and improvement projects described in subdivision 
        3.  An election to approve the bonds under Minnesota Statutes, 
        section 475.58, is not required. 
           (b) The issuance of bonds under this subdivision is not 
        subject to Minnesota Statutes, sections 275.60 and 279.61. 
           (c) The bonds are not included in computing any debt 
        limitation applicable to the city, and the levy of taxes under 
        Minnesota Statutes, section 475.61, to pay principal of and 
        interest on the bonds is not subject to any levy limitation.  
           (d) The aggregate principal amount of bonds, plus the 
        aggregate of the taxes used directly to pay eligible capital 
        expenditures and improvements, may not exceed $3,600,000, plus 
        an amount equal to the costs related to issuance of the bonds, 
        including interest on the bonds. 
           (e) The sales and use and excise taxes authorized in this 
        section may be pledged to and used for the payment of the bonds 
        and any bonds issued to refund them only if the bonds and any 
        refunding bonds are general obligations of the city. 
           Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
        subdivisions 1 and 2 expire when the city council determines 
        that the amount described in subdivision 4, paragraph (d), has 
        been received from the taxes to finance the capital and 
        administrative costs for the acquisition, construction, 
        expansion, and improvement of facilities described in 
        subdivision 3, plus the additional amount needed to pay the 
        costs related to issuance of bonds under subdivision 4.  Any 
        funds remaining after completion of the project and retirement 
        or redemption of the bonds may be placed in the general fund of 
        the city.  The taxes imposed under subdivisions 1 and 2 may 
        expire at an earlier time if the city so determines by ordinance.
           Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
        day after compliance by the governing body of the city of 
        Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
           Sec. 19.  [EFFECTIVE DATES.] 
           Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 
        purchases made after June 30, 1999.  
           Section 3 is effective for amended returns and refund 
        claims filed on or after July 1, 1999. 
           Section 4 is effective the day following final enactment 
        and applies retroactively to all open tax years and to 
        assessments and appeals under Minnesota Statutes, sections 
        289A.38 and 289A.65, for which the time limits have not expired 
        on the date of final enactment of this act.  The provisions of 
        Minnesota Statutes, section 289A.50, apply to refunds claimed 
        under section 4.  Refunds claimed under section 4 must be filed 
        by the later of December 31, 1999, or the time limit under 
        Minnesota Statutes, section 289A.40, subdivision 1. 
           Section 6 is effective retroactively for sales and 
        purchases made after June 30, 1998. 
           Section 8 is effective for purchases and sales made after 
        the date of final enactment.  
           Section 10 is effective for purchases made after the date 
        of final enactment and before July 1, 2001. 
           Section 12 is effective the day after final enactment.  
        Section 12, paragraphs (a) to (c), apply to all local sales 
        taxes enacted after July 1, 1999.  Section 12, paragraph (d), 
        applies to all local sales taxes in effect at the time of, or 
        imposed after the day of, the enactment of this section. 
           Section 13 is effective the day following final enactment. 
                                   ARTICLE 5 
                                 PROPERTY TAXES 
           Section 1.  Minnesota Statutes 1998, section 271.01, 
        subdivision 5, is amended to read: 
           Subd. 5.  [JURISDICTION.] The tax court shall have 
        statewide jurisdiction.  Except for an appeal to the supreme 
        court or any other appeal allowed under this subdivision, the 
        tax court shall be the sole, exclusive, and final authority for 
        the hearing and determination of all questions of law and fact 
        arising under the tax laws of the state, as defined in this 
        subdivision, in those cases that have been appealed to the tax 
        court and in any case that has been transferred by the district 
        court to the tax court.  The tax court shall have no 
        jurisdiction in any case that does not arise under the tax laws 
        of the state or in any criminal case or in any case determining 
        or granting title to real property or in any case that is under 
        the probate jurisdiction of the district court.  The small 
        claims division of the tax court shall have no jurisdiction in 
        any case dealing with property valuation or assessment for 
        property tax purposes until the taxpayer has appealed the 
        valuation or assessment to the county board of equalization, and 
        in those towns and cities which have not transferred their 
        duties to the county, the town or city board of equalization, 
        except for:  (i) those taxpayers whose original assessments are 
        determined by the commissioner of revenue; and (ii) those 
        taxpayers appealing a denial of a current year application for 
        the homestead classification for their property and the denial 
        was not reflected on a valuation notice issued in the year.  The 
        tax court shall have no jurisdiction in any case involving an 
        order of the state board of equalization unless a taxpayer 
        contests the valuation of property.  Laws governing taxes, aids, 
        and related matters administered by the commissioner of revenue, 
        laws dealing with property valuation, assessment or taxation of 
        property for property tax purposes, and any other laws that 
        contain provisions authorizing review of taxes, aids, and 
        related matters by the tax court shall be considered tax laws of 
        this state subject to the jurisdiction of the tax court.  This 
        subdivision shall not be construed to prevent an appeal, as 
        provided by law, to an administrative agency, board of 
        equalization, review under section 274.13, subdivision 1c, or to 
        the commissioner of revenue.  Wherever used in this chapter, the 
        term commissioner shall mean the commissioner of revenue, unless 
        otherwise specified. 
           Sec. 2.  Minnesota Statutes 1998, section 271.21, 
        subdivision 2, is amended to read: 
           Subd. 2.  [JURISDICTION.] At the election of the taxpayer, 
        the small claims division shall have jurisdiction only in the 
        following matters: 
           (a) in cases involving valuation, assessment, or taxation 
        of real or personal property, if the taxpayer has satisfied the 
        requirements of section 271.01, subdivision 5, and:  (i) the 
        issue is a denial of a current year application for the 
        homestead classification for the taxpayer's property and the 
        denial was not reflected on a valuation notice issued in the 
        year; or (ii) in the case of nonhomestead property, the 
        assessor's estimated market value is less than $100,000; or 
           (b) any other case concerning the tax laws as defined in 
        section 271.01, subdivision 5, in which the amount in 
        controversy does not exceed $5,000, including penalty and 
        interest. 
           Sec. 3.  Minnesota Statutes 1998, section 272.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPT PROPERTY DESCRIBED.] All property 
        described in this section to the extent herein limited shall be 
        exempt from taxation: 
           (1) All public burying grounds. 
           (2) All public schoolhouses. 
           (3) All public hospitals. 
           (4) All academies, colleges, and universities, and all 
        seminaries of learning. 
           (5) All churches, church property, and houses of worship. 
           (6) Institutions of purely public charity except parcels of 
        property containing structures and the structures described in 
        section 273.13, subdivision 25, paragraph (e), other than those 
        that qualify for exemption under clause (25). 
           (7) All public property exclusively used for any public 
        purpose. 
           (8) Except for the taxable personal property enumerated 
        below, all personal property and the property described in 
        section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
        exempt.  
           The following personal property shall be taxable:  
           (a) personal property which is part of an electric 
        generating, transmission, or distribution system or a pipeline 
        system transporting or distributing water, gas, crude oil, or 
        petroleum products or mains and pipes used in the distribution 
        of steam or hot or chilled water for heating or cooling 
        buildings and structures; 
           (b) railroad docks and wharves which are part of the 
        operating property of a railroad company as defined in section 
        270.80; 
           (c) personal property defined in section 272.03, 
        subdivision 2, clause (3); 
           (d) leasehold or other personal property interests which 
        are taxed pursuant to section 272.01, subdivision 2; 273.124, 
        subdivision 7; or 273.19, subdivision 1; or any other law 
        providing the property is taxable as if the lessee or user were 
        the fee owner; 
           (e) manufactured homes and sectional structures, including 
        storage sheds, decks, and similar removable improvements 
        constructed on the site of a manufactured home, sectional 
        structure, park trailer or travel trailer as provided in section 
        273.125, subdivision 8, paragraph (f); and 
           (f) flight property as defined in section 270.071.  
           (9) Personal property used primarily for the abatement and 
        control of air, water, or land pollution to the extent that it 
        is so used, and real property which is used primarily for 
        abatement and control of air, water, or land pollution as part 
        of an agricultural operation, as a part of a centralized 
        treatment and recovery facility operating under a permit issued 
        by the Minnesota pollution control agency pursuant to chapters 
        115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
        and 7045.0020 to 7045.1260, as a wastewater treatment facility 
        and for the treatment, recovery, and stabilization of metals, 
        oils, chemicals, water, sludges, or inorganic materials from 
        hazardous industrial wastes, or as part of an electric 
        generation system.  For purposes of this clause, personal 
        property includes ponderous machinery and equipment used in a 
        business or production activity that at common law is considered 
        real property. 
           Any taxpayer requesting exemption of all or a portion of 
        any real property or any equipment or device, or part thereof, 
        operated primarily for the control or abatement of air or water 
        pollution shall file an application with the commissioner of 
        revenue.  The equipment or device shall meet standards, rules, 
        or criteria prescribed by the Minnesota pollution control 
        agency, and must be installed or operated in accordance with a 
        permit or order issued by that agency.  The Minnesota pollution 
        control agency shall upon request of the commissioner furnish 
        information or advice to the commissioner.  On determining that 
        property qualifies for exemption, the commissioner shall issue 
        an order exempting the property from taxation.  The equipment or 
        device shall continue to be exempt from taxation as long as the 
        permit issued by the Minnesota pollution control agency remains 
        in effect. 
           (10) Wetlands.  For purposes of this subdivision, 
        "wetlands" means:  (i) land described in section 103G.005, 
        subdivision 15a; (ii) land which is mostly under water, produces 
        little if any income, and has no use except for wildlife or 
        water conservation purposes, provided it is preserved in its 
        natural condition and drainage of it would be legal, feasible, 
        and economically practical for the production of livestock, 
        dairy animals, poultry, fruit, vegetables, forage and grains, 
        except wild rice; or (iii) land in a wetland preservation area 
        under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
        and (ii) include adjacent land which is not suitable for 
        agricultural purposes due to the presence of the wetlands, but 
        do not include woody swamps containing shrubs or trees, wet 
        meadows, meandered water, streams, rivers, and floodplains or 
        river bottoms.  Exemption of wetlands from taxation pursuant to 
        this section shall not grant the public any additional or 
        greater right of access to the wetlands or diminish any right of 
        ownership to the wetlands. 
           (11) Native prairie.  The commissioner of the department of 
        natural resources shall determine lands in the state which are 
        native prairie and shall notify the county assessor of each 
        county in which the lands are located.  Pasture land used for 
        livestock grazing purposes shall not be considered native 
        prairie for the purposes of this clause.  Upon receipt of an 
        application for the exemption provided in this clause for lands 
        for which the assessor has no determination from the 
        commissioner of natural resources, the assessor shall refer the 
        application to the commissioner of natural resources who shall 
        determine within 30 days whether the land is native prairie and 
        notify the county assessor of the decision.  Exemption of native 
        prairie pursuant to this clause shall not grant the public any 
        additional or greater right of access to the native prairie or 
        diminish any right of ownership to it. 
           (12) Property used in a continuous program to provide 
        emergency shelter for victims of domestic abuse, provided the 
        organization that owns and sponsors the shelter is exempt from 
        federal income taxation pursuant to section 501(c)(3) of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1992, notwithstanding the fact that the sponsoring organization 
        receives funding under section 8 of the United States Housing 
        Act of 1937, as amended. 
           (13) If approved by the governing body of the municipality 
        in which the property is located, property not exceeding one 
        acre which is owned and operated by any 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, no part of the net earnings of which inures to the 
        benefit of any private shareholders; provided the property is 
        used primarily as a clubhouse, meeting facility, or recreational 
        facility by the group or association and the property is not 
        used for residential purposes on either a temporary or permanent 
        basis. 
           (14) To the extent provided by section 295.44, real and 
        personal property used or to be used primarily for the 
        production of hydroelectric or hydromechanical power on a site 
        owned by the federal government, the state, or a local 
        governmental unit which is developed and operated pursuant to 
        the provisions of section 103G.535. 
           (15) If approved by the governing body of the municipality 
        in which the property is located, and if construction is 
        commenced after June 30, 1983:  
           (a) a "direct satellite broadcasting facility" operated by 
        a corporation licensed by the federal communications commission 
        to provide direct satellite broadcasting services using direct 
        broadcast satellites operating in the 12-ghz. band; and 
           (b) a "fixed satellite regional or national program service 
        facility" operated by a corporation licensed by the federal 
        communications commission to provide fixed satellite-transmitted 
        regularly scheduled broadcasting services using satellites 
        operating in the 6-ghz. band. 
        An exemption provided by clause (15) shall apply for a period 
        not to exceed five years.  When the facility no longer qualifies 
        for exemption, it shall be placed on the assessment rolls as 
        provided in subdivision 4.  Before approving a tax exemption 
        pursuant to this paragraph, the governing body of the 
        municipality shall provide an opportunity to the members of the 
        county board of commissioners of the county in which the 
        facility is proposed to be located and the members of the school 
        board of the school district in which the facility is proposed 
        to be located to meet with the governing body.  The governing 
        body shall present to the members of those boards its estimate 
        of the fiscal impact of the proposed property tax exemption.  
        The tax exemption shall not be approved by the governing body 
        until the county board of commissioners has presented its 
        written comment on the proposal to the governing body or 30 days 
        have passed from the date of the transmittal by the governing 
        body to the board of the information on the fiscal impact, 
        whichever occurs first. 
           (16) Real and personal property owned and operated by a 
        private, nonprofit corporation exempt from federal income 
        taxation pursuant to United States Code, title 26, section 
        501(c)(3), primarily used in the generation and distribution of 
        hot water for heating buildings and structures.  
           (17) Notwithstanding section 273.19, state lands that are
        leased from the department of natural resources under section 
        92.46. 
           (18) Electric power distribution lines and their 
        attachments and appurtenances, that are used primarily for 
        supplying electricity to farmers at retail.  
           (19) Transitional housing facilities.  "Transitional 
        housing facility" means a facility that meets the following 
        requirements.  (i) It provides temporary housing to individuals, 
        couples, or families.  (ii) It has the purpose of reuniting 
        families and enabling parents or individuals to obtain 
        self-sufficiency, advance their education, get job training, or 
        become employed in jobs that provide a living wage.  (iii) It 
        provides support services such as child care, work readiness 
        training, and career development counseling; and a 
        self-sufficiency program with periodic monitoring of each 
        resident's progress in completing the program's goals.  (iv) It 
        provides services to a resident of the facility for at least 
        three months but no longer than three years, except residents 
        enrolled in an educational or vocational institution or job 
        training program.  These residents may receive services during 
        the time they are enrolled but in no event longer than four 
        years.  (v) It is owned and operated or under lease from a unit 
        of government or governmental agency under a property 
        disposition program and operated by one or more organizations 
        exempt from federal income tax under section 501(c)(3) of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1992.  This exemption applies notwithstanding the fact that the 
        sponsoring organization receives financing by a direct federal 
        loan or federally insured loan or a loan made by the Minnesota 
        housing finance agency under the provisions of either Title II 
        of the National Housing Act or the Minnesota Housing Finance 
        Agency Law of 1971 or rules promulgated by the agency pursuant 
        to it, and notwithstanding the fact that the sponsoring 
        organization receives funding under Section 8 of the United 
        States Housing Act of 1937, as amended. 
           (20) Real and personal property, including leasehold or 
        other personal property interests, owned and operated by a 
        corporation if more than 50 percent of the total voting power of 
        the stock of the corporation is owned collectively by:  (i) the 
        board of regents of the University of Minnesota, (ii) the 
        University of Minnesota Foundation, an organization exempt from 
        federal income taxation under section 501(c)(3) of the Internal 
        Revenue Code of 1986, as amended through December 31, 1992, and 
        (iii) a corporation organized under chapter 317A, which by its 
        articles of incorporation is prohibited from providing pecuniary 
        gain to any person or entity other than the regents of the 
        University of Minnesota; which property is used primarily to 
        manage or provide goods, services, or facilities utilizing or 
        relating to large-scale advanced scientific computing resources 
        to the regents of the University of Minnesota and others. 
           (21)(a) Small scale wind energy conversion systems 
        installed after January 1, 1991, and used as an electric power 
        source are exempt. 
           "Small scale wind energy conversion systems" are wind 
        energy conversion systems, as defined in section 216C.06, 
        subdivision 12, including the foundation or support pad, which 
        are (i) used as an electric power source; (ii) located within 
        one county and owned by the same owner; and (iii) produce two 
        megawatts or less of electricity as measured by nameplate 
        ratings. 
           (b) Medium scale wind energy conversion systems installed 
        after January 1, 1991, are treated as follows:  (i) the 
        foundation and support pad are taxable; (ii) the associated 
        supporting and protective structures are exempt for the first 
        five assessment years after they have been constructed, and 
        thereafter, 30 percent of the market value of the associated 
        supporting and protective structures are taxable; and (iii) the 
        turbines, blades, transformers, and its related equipment, are 
        exempt.  "Medium scale wind energy conversion systems" are wind 
        energy conversion systems as defined in section 216C.06, 
        subdivision 12, including the foundation or support pad, which 
        are:  (i) used as an electric power source; (ii) located within 
        one county and owned by the same owner; and (iii) produce more 
        than two but equal to or less than 12 megawatts of energy as 
        measured by nameplate ratings. 
           (c) Large scale wind energy conversion systems installed 
        after January 1, 1991, are treated as follows:  25 percent of 
        the market value of all property is taxable, including (i) the 
        foundation and support pad; (ii) the associated supporting and 
        protective structures; and (iii) the turbines, blades, 
        transformers, and its related equipment.  "Large scale wind 
        energy conversion systems" are wind energy conversion systems as 
        defined in section 216C.06, subdivision 12, including the 
        foundation or support pad, which are:  (i) used as an electric 
        power source; and (ii) produce more than 12 megawatts of energy 
        as measured by nameplate ratings. 
           (22) Containment tanks, cache basins, and that portion of 
        the structure needed for the containment facility used to 
        confine agricultural chemicals as defined in section 18D.01, 
        subdivision 3, as required by the commissioner of agriculture 
        under chapter 18B or 18C. 
           (23) Photovoltaic devices, as defined in section 216C.06, 
        subdivision 13, installed after January 1, 1992, and used to 
        produce or store electric power. 
           (24) Real and personal property owned and operated by a 
        private, nonprofit corporation exempt from federal income 
        taxation pursuant to United States Code, title 26, section 
        501(c)(3), primarily used for an ice arena or ice rink, and used 
        primarily for youth and high school programs. 
           (25) A structure that is situated on real property that is 
        used for: 
           (i) housing for the elderly or for low- and moderate-income 
        families as defined in Title II of the National Housing Act, as 
        amended through December 31, 1990, and funded by a direct 
        federal loan or federally insured loan made pursuant to Title II 
        of the act; or 
           (ii) housing lower income families or elderly or 
        handicapped persons, as defined in Section 8 of the United 
        States Housing Act of 1937, as amended. 
           In order for a structure to be exempt under item (i) or 
        (ii), it must also meet each of the following criteria: 
           (A) is owned by an entity which is operated as a nonprofit 
        corporation organized under chapter 317A; 
           (B) is owned by an entity which has not entered into a 
        housing assistance payments contract under Section 8 of the 
        United States Housing Act of 1937, or, if the entity which owns 
        the structure has entered into a housing assistance payments 
        contract under Section 8 of the United States Housing Act of 
        1937, the contract provides assistance for less than 90 percent 
        of the dwelling units in the structure, excluding dwelling units 
        intended for management or maintenance personnel; 
           (C) operates an on-site congregate dining program in which 
        participation by residents is mandatory, and provides assisted 
        living or similar social and physical support services for 
        residents; and 
           (D) was not assessed and did not pay tax under chapter 273 
        prior to the 1991 levy, while meeting the other conditions of 
        this clause. 
           An exemption under this clause remains in effect for taxes 
        levied in each year or partial year of the term of its permanent 
        financing. 
           (26) Real and personal property that is located in the 
        Superior National Forest, and owned or leased and operated by a 
        nonprofit organization that is exempt from federal income 
        taxation under section 501(c)(3) of the Internal Revenue Code of 
        1986, as amended through December 31, 1992, and primarily used 
        to provide recreational opportunities for disabled veterans and 
        their families. 
           (27) Manure pits and appurtenances, which may include 
        slatted floors and pipes, installed or operated in accordance 
        with a permit, order, or certificate of compliance issued by the 
        Minnesota pollution control agency.  The exemption shall 
        continue for as long as the permit, order, or certificate issued 
        by the Minnesota pollution control agency remains in effect. 
           (28) Notwithstanding clause (8), item (a), attached 
        machinery and other personal property which is part of a 
        facility containing a cogeneration system as described in 
        section 216B.166, subdivision 2, paragraph (a), if the 
        cogeneration system has met the following criteria:  (i) the 
        system utilizes natural gas as a primary fuel and the 
        cogenerated steam initially replaces steam generated from 
        existing thermal boilers utilizing coal; (ii) the facility 
        developer is selected as a result of a procurement process 
        ordered by the public utilities commission; and (iii) 
        construction of the facility is commenced after July 1, 1994, 
        and before July 1, 1997. 
           (29) Real property acquired by a home rule charter city, 
        statutory city, county, town, or school district under a lease 
        purchase agreement or an installment purchase contract during 
        the term of the lease purchase agreement as long as and to the 
        extent that the property is used by the city, county, town, or 
        school district and devoted to a public use and to the extent it 
        is not subleased to any private individual, entity, association, 
        or corporation in connection with a business or enterprise 
        operated for profit. 
           (30) Property owned by a nonprofit charitable organization 
        that qualifies for tax exemption under section 501(c)(3) of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1997, that is intended to be used as a business incubator in a 
        high-unemployment county but is not occupied on the assessment 
        date.  As used in this clause, a "business incubator" is a 
        facility used for the development of nonretail businesses, 
        offering access to equipment, space, services, and advice to the 
        tenant businesses, for the purpose of encouraging economic 
        development, diversification, and job creation in the area 
        served by the organization, and "high-unemployment county" is a 
        county that had an average annual unemployment rate of 7.9 
        percent or greater in 1997.  Property that qualifies for the 
        exemption under this clause is limited to no more than two 
        contiguous parcels and structures that do not exceed in the 
        aggregate 40,000 square feet.  This exemption expires after 
        taxes payable in 2005. 
           (31) Notwithstanding any other law to the contrary, real 
        property that meets the following criteria is exempt: 
           (i) constitutes a wastewater treatment system (a) 
        constructed by a municipality using public funds, (b) operates 
        under a State Disposal System Permit issued by the Minnesota 
        pollution control agency pursuant to chapters 115 and 116 and 
        Minnesota Rules, chapter 700l, and (c) applies its effluent to 
        land used as part of an agricultural operation; 
           (ii) is located within a municipality of a population of 
        less than 10,000; 
           (iii) is used for treatment of effluent from a private 
        potato processing facility; and 
           (iv) is owned by a municipality and operated by a private 
        entity under agreement with that municipality. 
           (32) Notwithstanding clause (8), item (a), attached 
        machinery and other personal property which is part of a 
        simple-cycle combustion-turbine electric generation facility 
        that exceeds 250 megawatts of installed capacity and that meets 
        the requirements of this clause.  At the time of construction, 
        the facility must:  
           (i) not be owned by a public utility as defined in section 
        216B.02, subdivision 4; 
           (ii) utilize natural gas as a primary fuel; 
           (iii) be located within 20 miles of the intersection of an 
        existing 42-inch (outside diameter) natural gas pipeline and a 
        345-kilovolt high-voltage electric transmission line; and 
           (iv) be designed to provide peaking, emergency backup, or 
        contingency services, and have received a certificate of need 
        pursuant to section 216B.243 demonstrating demand for its 
        capacity.  
        Construction of the facility must be commenced after July 1, 
        1999, and before July 1, 2003.  Property eligible for this 
        exemption does not include electric transmission lines and 
        interconnections or gas pipelines and interconnections 
        appurtenant to the property or the facility. 
           Sec. 4.  Minnesota Statutes 1998, section 272.027, is 
        amended to read: 
           272.027 [PERSONAL PROPERTY USED TO GENERATE ELECTRICITY FOR 
        PRODUCTION AND RESALE.] 
           Subdivision 1.  [ELECTRICITY GENERATED TO PRODUCE GOODS AND 
        SERVICES.] Personal property used to generate electric power is 
        exempt from property taxation if the electric power is used to 
        manufacture or produce goods, products, or services, other than 
        electric power, by the owner of the electric generation 
        plant.  Except as provided in subdivisions 2 and 3, the 
        exemption does not apply to property used to produce electric 
        power for sale to others and does not apply to real property.  
        In determining the value subject to tax, a proportionate share 
        of the value of the generating facilities, equal to the 
        proportion that the power sold to others bears to the total 
        generation of the plant, is subject to the general property tax 
        in the same manner as other property.  Power generated in such a 
        plant and exchanged for an equivalent amount of power that is 
        used for the manufacture or production of goods, products, or 
        services other than electric power by the owner of the 
        generating plant is considered to be used by the owner of the 
        plant. 
           Subd. 2.  [EXEMPTION FOR CUSTOMER OWNED PROPERTY 
        TRANSFERRED TO A UTILITY.] (a) Tools, implements, and machinery 
        of an electric generating facility are exempt if all the 
        following requirements are met: 
           (1) the electric generating facilities were operational and 
        met the requirements for exemption of personal property under 
        subdivision 1 on January 2, 1999; and 
           (2) the generating facility is sold to a Minnesota electric 
        utility. 
           (b) Any tools, implements, and machinery installed to 
        increase generation capacity are also exempt under this section 
        provided that the existing tools, implements, and machinery are 
        exempt under paragraph (a). 
           Subd. 3.  [EXEMPTION ELECTRIC POWER PLANT PERSONAL 
        PROPERTY; TACONITE AND STEEL MILL.] 
           Tools, implements, and machinery of an electric generating 
        facility are exempt if all the following requirements are met: 
           (1) the electric generating facility, when completed, will 
        have a capacity of at least 450 megawatts; 
           (2) the electric generating facility is adjacent to a 
        taconite mine direct-reduction steel mill; and 
           (3) the electric generating facility supplied over 60 
        percent of its electricity generated in the prior year to the 
        adjacent direct-reduction plant and steel mill. 
           Sec. 5.  Minnesota Statutes 1998, section 272.03, 
        subdivision 6, is amended to read: 
           Subd. 6.  [TRACT, LOT, PARCEL, AND PIECE OR PARCEL.] 
        (a) "Tract," "lot," "parcel," and "piece or parcel" of land 
        means any contiguous quantity of land in the possession of, 
        owned by, or recorded as the property of, the same claimant or 
        person.  
           (b) Notwithstanding paragraph (a), property that is owned 
        by a utility, leased for residential or recreational uses for 
        terms of 20 years or longer, and separately valued by the 
        assessor, will be treated for property tax purposes as separate 
        parcels. 
           Sec. 6.  Minnesota Statutes 1998, section 273.11, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
        property classified as agricultural homestead or nonhomestead, 
        residential homestead or nonhomestead, or noncommercial seasonal 
        recreational residential, the assessor shall compare the value 
        with that determined in the preceding assessment.  The amount of 
        the increase entered in the current assessment shall not exceed 
        the greater of (1) ten 8.5 percent of the value in the preceding 
        assessment, or (2) one-fourth 15 percent of the difference 
        between the current assessment and the preceding assessment.  
        This limitation shall not apply to increases in value due to 
        improvements.  For purposes of this subdivision, the term 
        "assessment" means the value prior to any exclusion under 
        subdivision 16. 
           The provisions of this subdivision shall be in effect only 
        for assessment years 1993 through assessment year 2001. 
           For purposes of the assessment/sales ratio study conducted 
        under section 127A.48, and the computation of state aids paid 
        under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
        477A, market values and net tax capacities determined under this 
        subdivision and subdivision 16, shall be used. 
           Sec. 7.  Minnesota Statutes 1998, 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 45 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 $400,000. 
           (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. 
           For purposes of determining this eligibility, "house" means 
        land and buildings.  
           The age of a residence is the number of years since the 
        original year of its construction.  In the case of a residence 
        that is relocated, the relocation must be from a location within 
        the state and the only improvements eligible for exclusion under 
        this subdivision are (1) those for which building permits were 
        issued to the homeowner after the residence was relocated to its 
        present site, and (2) those undertaken during or after the year 
        the residence is initially occupied by the homeowner, excluding 
        any market value increase relating to basic improvements that 
        are necessary to install the residence on its foundation and 
        connect it to utilities 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 The improvements for a single project or in any one 
        year must add at least $1,000 $5,000 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 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. 
           No exclusion for an improvement 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. 
           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.  After ten years the amount of the qualifying value shall 
        be added back as follows: 
           (1) 50 percent in the two subsequent assessment years if 
        the qualifying value is equal to or less than $10,000 market 
        value; or 
           (2) 20 percent in the five subsequent assessment years if 
        the qualifying value is greater than $10,000 market value. 
        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 multiple 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. 8.  Minnesota Statutes 1998, section 273.111, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [DISSECTED PARCELS; CONTINUED DEFERMENT.] Real 
        estate consisting of more than ten, but less than 15, acres 
        which has: 
           (1) been owned by the applicant or the applicant's parents 
        for at least 70 years; 
           (2) been dissected by two or more major parkways or 
        interstate highways; and 
           (3) qualified for the agricultural valuation and tax 
        deferment under this section through assessment year 1996, taxes 
        payable in 1997, 
        shall continue to qualify for treatment under this section until 
        the applicant's death or transfer or sale by the applicant of 
        the applicant's interest in the real estate.  When the property 
        ceases to qualify for treatment under this section, the 
        recapture provisions of subdivision 9 will apply with respect to 
        the last ten years that the property has been valued and 
        assessed under this section. 
           Sec. 9.  Minnesota Statutes 1998, 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 
        must use the property for the purposes of the homestead, and 
        must apply to the assessor, both by the deadlines given in 
        subdivision 9.  After initial qualification for the homestead 
        treatment, additional applications for subsequent years are not 
        required. 
           (c) Residential real estate that is occupied and used for 
        purposes of a homestead by a relative of the owner is a 
        homestead but only to the extent of the homestead treatment that 
        would be provided if the related owner occupied the property.  
        For purposes of this paragraph and paragraph (g), "relative" 
        means a parent, stepparent, child, stepchild, grandparent, 
        grandchild, brother, sister, uncle, or aunt, nephew, or niece.  
        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, or (4) other personal 
        circumstances causing the spouses to live separately, not 
        including an intent to obtain two homestead classifications for 
        property tax purposes.  To qualify under clause (3), the 
        spouse's place of employment or self-employment must be at least 
        50 miles distant from the other spouse's place of employment, 
        and the homesteads must be at least 50 miles distant from each 
        other.  Homestead treatment, in whole or in part, shall not be 
        denied to the owner's spouse who previously occupied the 
        residence with the owner if the absence of the owner is due to 
        one of the exceptions provided in this paragraph. 
           (f) The assessor must not deny homestead treatment in whole 
        or in part if: 
           (1) in the case of a property owner who is not married, the 
        owner is absent due to residence in a nursing home or boarding 
        care facility and the property is not otherwise occupied; or 
           (2) in the case of a property owner who is married, the 
        owner or the owner's spouse or both are absent due to residence 
        in a nursing home or boarding care facility and the property is 
        not occupied or is occupied only by the owner's spouse. 
           (g) If an individual is purchasing property with the intent 
        of claiming it as a homestead and is required by the terms of 
        the financing agreement to have a relative shown on the deed as 
        a coowner, the assessor shall allow a full homestead 
        classification.  This provision only applies to first-time 
        purchasers, whether married or single, or to a person who had 
        previously been married and is purchasing as a single individual 
        for the first time.  The application for homestead benefits must 
        be on a form prescribed by the commissioner and must contain the 
        data necessary for the assessor to determine if full homestead 
        benefits are warranted. 
           (h) If residential or agricultural real estate is occupied 
        and used for purposes of a homestead by a child of a deceased 
        owner and the property is subject to jurisdiction of probate 
        court, the child shall receive relative homestead classification 
        under paragraph (c) or (d) to the same extent they would be 
        entitled to it if the owner was still living, until the probate 
        is completed.  For purposes of this paragraph, "child" includes 
        a relationship by blood or by marriage. 
           Sec. 10.  Minnesota Statutes 1998, section 273.124, 
        subdivision 7, is amended to read: 
           Subd. 7.  [LEASED BUILDINGS OR LAND.] For purposes of class 
        1 determinations, homesteads include: 
           (a) buildings and appurtenances owned and used by the 
        occupant as a permanent residence which are located upon land 
        the title to which is vested in a person or entity other than 
        the occupant; 
           (b) all buildings and appurtenances located upon land owned 
        by the occupant and used for the purposes of a homestead 
        together with the land upon which they are located, if all of 
        the following criteria are met: 
           (1) the occupant is using the property as a permanent 
        residence; 
           (2) the occupant is paying the property taxes and any 
        special assessments levied against the property; 
           (3) the occupant has signed a lease which has an option to 
        purchase the buildings and appurtenances; 
           (4) the term of the lease is at least five years; and 
           (5) the occupant has made a down payment of at least $5,000 
        in cash if the property was purchased by means of a contract for 
        deed or subject to a mortgage. 
           (c) all buildings and appurtenances and the land upon which 
        they are located that are used for purposes of a homestead, if 
        all of the following criteria are met: 
           (1) the land is owned by a utility, which maintains 
        ownership of the land in order to facilitate compliance with the 
        terms of its hydroelectric project license from the federal 
        energy regulatory commission; 
           (2) the land is leased for a term of 20 years or more; 
           (3) the occupant is using the property as a permanent 
        residence; and 
           (4) the occupant is paying the property taxes and any 
        special assessments levied against the property. 
           Any taxpayer meeting all the requirements of this paragraph 
        must notify the county assessor, or the assessor who has the 
        powers of the county assessor pursuant to section 273.063, in 
        writing, as soon as possible after signing the lease agreement 
        and occupying the buildings as a homestead. 
           Sec. 11.  Minnesota Statutes 1998, section 273.124, 
        subdivision 8, is amended to read: 
           Subd. 8.  [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR 
        PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION OR 
        PARTNERSHIP.] (a) Each family farm corporation and each 
        partnership operating a family farm is entitled to class 1b 
        under section 273.13, subdivision 22, paragraph (b), or class 2a 
        assessment for one homestead occupied by a shareholder or 
        partner thereof who is residing on the land and actively engaged 
        in farming of the land owned by the corporation or partnership.  
        Homestead treatment applies even if legal title to the property 
        is in the name of the corporation or partnership and not in the 
        name of the person residing on it.  "Family farm corporation" 
        and "family farm" have the meanings given in section 500.24, 
        except that the number of allowable shareholders or partners 
        under this subdivision shall not exceed 12. 
           (b) In addition to property specified in paragraph (a), any 
        other residences owned by corporations or partnerships described 
        in paragraph (a) which are located on agricultural land and 
        occupied as homesteads by shareholders or partners who are 
        actively engaged in farming on behalf of the corporation or 
        partnership must also be assessed as class 2a property or as 
        class 1b property under section 273.13, subdivision 22, 
        paragraph (b), but the property eligible is limited to the 
        residence itself and as much of the land surrounding the 
        homestead, not exceeding one acre, as is reasonably necessary 
        for the use of the dwelling as a home, and does not include any 
        other structures that may be located on it. 
           (c) Agricultural property owned by a shareholder of a 
        family farm corporation, as defined in paragraph (a), or by a 
        partner in a partnership operating a family farm and leased to 
        the family farm corporation by the shareholder or to the 
        partnership by the partner, is eligible for classification as 
        class 1b under section 273.13, subdivision 22, paragraph (b), or 
        class 2a under section 273.13, subdivision 23, paragraph (a), if 
        the owner is actually residing on the property and is actually 
        engaged in farming the land on behalf of the corporation or 
        partnership.  This paragraph applies without regard to any legal 
        possession rights of the family farm corporation or partnership 
        operating a family farm under the lease. 
           Sec. 12.  Minnesota Statutes 1998, 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 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 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 person 
        notified 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 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 county 
        treasurer.  The county treasurer will add interest to the unpaid 
        homestead benefits and penalty amounts at the rate provided in 
        section 279.03 for real property taxes becoming delinquent in 
        the calendar year during which the amount remains unpaid.  
        Interest may be assessed for the period beginning 60 days after 
        demand for payment was made. 
           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 ad valorem taxes otherwise 
        payable on the property by including the amounts on the property 
        tax statements under section 276.04, subdivision 3.  The amounts 
        added under this paragraph to the ad valorem taxes shall include 
        interest accrued through December 31 of the year preceding the 
        taxes payable year for which the amounts are first added.  These 
        amounts, when added to the property tax statement, become 
        subject to all the laws for the enforcement of real or personal 
        property taxes for that year, and for any subsequent 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 as provided 
        in this paragraph to the extent that the current owner agrees in 
        writing.  On all demands, billings, property tax statements, and 
        related correspondence, the county must list and state 
        separately the amounts of homestead benefits, penalty, interest 
        and costs being demanded, billed or assessed. 
           (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.  The social security numbers 
        and federal identification numbers that are maintained by a 
        county or city assessor for property tax administration 
        purposes, and that may appear on the lists retain their 
        classification as private or nonpublic data; but may be viewed, 
        accessed, and used by the county auditor or treasurer of the 
        same county for the limited purpose of assisting the 
        commissioner in the preparation of microdata samples under 
        section 270.0681. 
           Sec. 13.  Minnesota Statutes 1998, section 273.124, 
        subdivision 14, is amended to read: 
           Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
        (a) Real estate of less than ten acres that is the homestead of 
        its owner must be classified as class 2a under section 273.13, 
        subdivision 23, paragraph (a), if:  
           (1) the parcel on which the house is located is contiguous 
        on at least two sides to (i) agricultural land, (ii) land owned 
        or administered by the United States Fish and Wildlife Service, 
        or (iii) land administered by the department of natural 
        resources on which in lieu taxes are paid under sections 477A.11 
        to 477A.14; 
           (2) its owner also owns a noncontiguous parcel of 
        agricultural land that is at least 20 acres; 
           (3) the noncontiguous land is located not farther than four 
        townships or cities, or a combination of townships or cities 
        from the homestead; and 
           (4) the agricultural use value of the noncontiguous land 
        and farm buildings is equal to at least 50 percent of the market 
        value of the house, garage, and one acre of land. 
           Homesteads initially classified as class 2a under the 
        provisions of this paragraph shall remain classified as class 
        2a, irrespective of subsequent changes in the use of adjoining 
        properties, as long as the homestead remains under the same 
        ownership, the owner owns a noncontiguous parcel of agricultural 
        land that is at least 20 acres, and the agricultural use value 
        qualifies under clause (4).  Homestead classification under this 
        paragraph is limited to property that qualified under this 
        paragraph for the 1998 assessment. 
           (b) Agricultural property consisting of at least 40 acres 
        shall be classified homestead, to the same extent as other 
        agricultural homestead property, if all of the following 
        criteria are met: 
           (1) the owner is actively farming the agricultural 
        property; 
           (2) the owner of the agricultural property is a Minnesota 
        resident; 
           (3) neither the owner nor the spouse of the agricultural 
        property claims another agricultural homestead in Minnesota; and 
           (4) the owner does not live farther than four townships or 
        cities, or a combination of four townships or cities, from the 
        agricultural property. 
           (b) (c) Except as provided in paragraph (d) (e), 
        noncontiguous land shall be included as part of a homestead 
        under section 273.13, subdivision 23, paragraph (a), only if the 
        homestead is classified as class 2a and the detached land is 
        located in the same township or city, or not farther than four 
        townships or cities or combination thereof from the homestead.  
        Any taxpayer of these noncontiguous lands must notify the county 
        assessor that the noncontiguous land is part of the taxpayer's 
        homestead, and, if the homestead is located in another county, 
        the taxpayer must also notify the assessor of the other county. 
           (c) (d) Agricultural land used for purposes of a homestead 
        and actively farmed by a person holding a vested remainder 
        interest in it must be classified as a homestead under section 
        273.13, subdivision 23, paragraph (a).  If agricultural land is 
        classified class 2a, any other dwellings on the land used for 
        purposes of a homestead by persons holding vested remainder 
        interests who are actively engaged in farming the property, and 
        up to one acre of the land surrounding each homestead and 
        reasonably necessary for the use of the dwelling as a home, must 
        also be assessed class 2a. 
           (d) (e) Agricultural land and buildings that were class 2a 
        homestead property under section 273.13, subdivision 23, 
        paragraph (a), for the 1997 assessment shall remain classified 
        as agricultural homesteads for subsequent assessments if:  
           (1) the property owner abandoned the homestead dwelling 
        located on the agricultural homestead as a result of the April 
        1997 floods; 
           (2) the property is located in the county of Polk, Clay, 
        Kittson, Marshall, Norman, or Wilkin; 
           (3) the agricultural land and buildings remain under the 
        same ownership for the current assessment year as existed for 
        the 1997 assessment year and continue to be used for 
        agricultural purposes; 
           (4) the dwelling occupied by the owner is located in 
        Minnesota and is within 30 miles of one of the parcels of 
        agricultural land that is owned by the taxpayer; and 
           (5) the owner notifies the county assessor that the 
        relocation was due to the 1997 floods, and the owner furnishes 
        the assessor any information deemed necessary by the assessor in 
        verifying the change in dwelling.  Further notifications to the 
        assessor are not required if the property continues to meet all 
        the requirements in this paragraph and any dwellings on the 
        agricultural land remain uninhabited. 
           (e) (f) Agricultural land and buildings that were class 2a 
        homestead property under section 273.13, subdivision 23, 
        paragraph (a), for the 1998 assessment shall remain classified 
        agricultural homesteads for subsequent assessments if: 
           (1) the property owner abandoned the homestead dwelling 
        located on the agricultural homestead as a result of damage 
        caused by a March 29, 1998, tornado; 
           (2) the property is located in the county of Blue Earth, 
        Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 
           (3) the agricultural land and buildings remain under the 
        same ownership for the current assessment year as existed for 
        the 1998 assessment year; 
           (4) the dwelling occupied by the owner is located in this 
        state and is within 50 miles of one of the parcels of 
        agricultural land that is owned by the taxpayer; and 
           (5) the owner notifies the county assessor that the 
        relocation was due to a March 29, 1998, tornado, and the owner 
        furnishes the assessor any information deemed necessary by the 
        assessor in verifying the change in homestead dwelling.  For 
        taxes payable in 1999, the owner must notify the assessor by 
        December 1, 1998.  Further notifications to the assessor are not 
        required if the property continues to meet all the requirements 
        in this paragraph and any dwellings on the agricultural land 
        remain uninhabited. 
           Sec. 14.  Minnesota Statutes 1998, section 273.124, is 
        amended by adding a subdivision to read: 
           Subd. 20.  [ADDITIONAL REQUIREMENTS PROHIBITED.] No 
        political subdivision may impose any requirements not contained 
        in this chapter or chapter 272 to disqualify property from being 
        classified as a homestead if the property otherwise meets the 
        requirements for homestead treatment under this chapter and 
        chapter 272. 
           Sec. 15.  Minnesota Statutes 1998, 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 $75,000 $76,000 of market value of class 1a 
        property has a net class rate of one percent of its market 
        value; and the market value of class 1a property that 
        exceeds $75,000 $76,000 has a class rate of 1.7 1.65 percent of 
        its market value.  
           (b) Class 1b property includes homestead real estate or 
        homestead manufactured homes used for the purposes of a 
        homestead by 
           (1) any blind person, or the blind person and the blind 
        person's spouse; or 
           (2) any person, hereinafter referred to as "veteran," who: 
           (i) served in the active military or naval service of the 
        United States; and 
           (ii) is entitled to compensation under the laws and 
        regulations of the United States for permanent and total 
        service-connected disability due to the loss, or loss of use, by 
        reason of amputation, ankylosis, progressive muscular 
        dystrophies, or paralysis, of both lower extremities, such as to 
        preclude motion without the aid of braces, crutches, canes, or a 
        wheelchair; and 
           (iii) has acquired a special housing unit with special 
        fixtures or movable facilities made necessary by the nature of 
        the veteran's disability, or the surviving spouse of the 
        deceased veteran for as long as the surviving spouse retains the 
        special housing unit as a homestead; or 
           (3) any person who: 
           (i) is permanently and totally disabled and 
           (ii) receives 90 percent or more of total household income, 
        as defined in section 290A.03, subdivision 5, from 
           (A) aid from any state as a result of that disability; or 
           (B) supplemental security income for the disabled; or 
           (C) workers' compensation based on a finding of total and 
        permanent disability; or 
           (D) social security disability, including the amount of a 
        disability insurance benefit which is converted to an old age 
        insurance benefit and any subsequent cost of living increases; 
        or 
           (E) aid under the federal Railroad Retirement Act of 1937, 
        United States Code Annotated, title 45, section 228b(a)5; or 
           (F) a pension from any local government retirement fund 
        located in the state of Minnesota as a result of that 
        disability; or 
           (G) pension, annuity, or other income paid as a result of 
        that disability from a private pension or disability plan, 
        including employer, employee, union, and insurance plans and 
           (iii) has household income as defined in section 290A.03, 
        subdivision 5, of $50,000 or less; or 
           (4) any person who is permanently and totally disabled and 
        whose household income as defined in section 290A.03, 
        subdivision 5, is 275 percent or less of the federal poverty 
        level. 
           Property is classified and assessed under clause (4) only 
        if the government agency or income-providing source certifies, 
        upon the request of the homestead occupant, that the homestead 
        occupant satisfies the disability requirements of this paragraph.
           Property is classified and assessed pursuant to clause (1) 
        only if the commissioner of economic security certifies to the 
        assessor that the homestead occupant satisfies the requirements 
        of this paragraph.  
           Permanently and totally disabled for the purpose of this 
        subdivision means a condition which is permanent in nature and 
        totally incapacitates the person from working at an occupation 
        which brings the person an income.  The first $32,000 market 
        value of class 1b property has a net class rate of .45 percent 
        of its market value.  The remaining market value of class 1b 
        property has a 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 
        with the following limitation:  the area of the property must 
        not exceed 100 feet of lakeshore footage for each cabin or 
        campsite located on the property up to a total of 800 feet and 
        500 feet in depth, measured away from the lakeshore.  If any 
        portion of the class 1c resort property is classified as class 
        4c under subdivision 25, the entire property must meet the 
        requirements of subdivision 25, paragraph (d), clause (1), to 
        qualify for class 1c treatment under this paragraph. 
           (d) Class 1d property includes structures that meet all of 
        the following criteria: 
           (1) the structure is located on property that is classified 
        as agricultural property under section 273.13, subdivision 23; 
           (2) the structure is occupied exclusively by seasonal farm 
        workers during the time when they work on that farm, and the 
        occupants are not charged rent for the privilege of occupying 
        the property, provided that use of the structure for storage of 
        farm equipment and produce does not disqualify the property from 
        classification under this paragraph; 
           (3) the structure meets all applicable health and safety 
        requirements for the appropriate season; and 
           (4) the structure is not salable as residential property 
        because it does not comply with local ordinances relating to 
        location in relation to streets or roads. 
           The market value of class 1d property has the same class 
        rates as class 1a property under paragraph (a). 
           Sec. 16.  Minnesota Statutes 1998, 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 0.35 percent 
        of market value.  The remaining value of class 2a property over 
        $115,000 of market value that does not exceed 320 acres up to 
        and including $600,000 market value has a net class rate of 0.8 
        percent of market value.  The remaining property 
        over $115,000 $600,000 market value in excess of 320 acres has a 
        class rate of 1.25 1.20 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 1.25 1.20 
        percent of market value. 
           (c) Agricultural land as used in this section means 
        contiguous acreage of ten acres or more, used during the 
        preceding year for agricultural purposes.  "Agricultural 
        purposes" as used in this section means the raising or 
        cultivation of agricultural products or enrollment in the 
        Reinvest in Minnesota program under sections 103F.501 to 
        103F.535 or the federal Conservation Reserve Program as 
        contained in Public Law Number 99-198.  Contiguous acreage on 
        the same parcel, or contiguous acreage on an immediately 
        adjacent parcel under the same ownership, may also qualify as 
        agricultural land, but only if it is pasture, timber, waste, 
        unusable wild land, or land included in state or federal farm 
        programs.  Agricultural classification for property shall be 
        determined excluding the house, garage, and immediately 
        surrounding one acre of land, and shall not be based upon the 
        market value of any residential structures on the parcel or 
        contiguous parcels under the same ownership. 
           (d) Real estate, excluding the house, garage, and 
        immediately surrounding one acre of land, of less than ten acres 
        which is exclusively and intensively used for raising or 
        cultivating agricultural products, shall be considered as 
        agricultural land.  
           Land shall be classified as agricultural even if all or a 
        portion of the agricultural use of that property is the leasing 
        to, or use by another person for agricultural purposes. 
           Classification under this subdivision is not determinative 
        for qualifying under section 273.111. 
           The property classification under this section supersedes, 
        for property tax purposes only, any locally administered 
        agricultural policies or land use restrictions that define 
        minimum or maximum farm acreage. 
           (e) The term "agricultural products" as used in this 
        subdivision includes production for sale of:  
           (1) livestock, dairy animals, dairy products, poultry and 
        poultry products, fur-bearing animals, horticultural and nursery 
        stock described in sections 18.44 to 18.61, fruit of all kinds, 
        vegetables, forage, grains, bees, and apiary products by the 
        owner; 
           (2) fish bred for sale and consumption if the fish breeding 
        occurs on land zoned for agricultural use; 
           (3) the commercial boarding of horses if the boarding is 
        done in conjunction with raising or cultivating agricultural 
        products as defined in clause (1); 
           (4) property which is owned and operated by nonprofit 
        organizations used for equestrian activities, excluding racing; 
        and 
           (5) game birds and waterfowl bred and raised for use on a 
        shooting preserve licensed under section 97A.115; 
           (6) insects primarily bred to be used as food for animals; 
        and 
           (7) trees, grown for sale as a crop, and not sold for 
        timber, lumber, wood, or wood products. 
           (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. 17.  Minnesota Statutes 1998, section 273.13, 
        subdivision 24, is amended to read: 
           Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
        property and utility real and personal property, except class 5 
        property as identified in subdivision 31, clause (1), is class 
        3a.  Each parcel of real property has a class rate of 2.45 2.4 
        percent of the first tier of market value, and 3.5 3.4 percent 
        of the remaining market value, except that in the case of 
        contiguous parcels of commercial and industrial property owned 
        by the same person or entity, only the value equal to the 
        first-tier value of the contiguous parcels qualifies for the 
        reduced class rate.  For the purposes of this subdivision, the 
        first tier means the first $150,000 of market value.  In the 
        case of utility property owned by one person or entity, only one 
        parcel in each county has a reduced class rate on the first tier 
        of market value.  Real property owned in fee by a utility for 
        transmission line right-of-way shall be classified at the class 
        rate for the higher tier.  All personal property shall be 
        classified at the class rate for the higher tier.  For purposes 
        of this subdivision "personal property" means tools, implements, 
        and machinery of an electric generating, transmission, or 
        distribution system, or a pipeline system transporting or 
        distributing water, gas, crude oil, or petroleum products or 
        mains and pipes used in the distribution of steam or hot or 
        chilled water for heating or cooling buildings, which are 
        fixtures. 
           For purposes of this paragraph, parcels are considered to 
        be contiguous even if they are separated from each other by a 
        road, street, vacant lot, waterway, or other similar intervening 
        type of property. 
           (b) Employment property defined in section 469.166, during 
        the period provided in section 469.170, shall constitute class 
        3b and has a class rate of 2.3 percent of the first $50,000 of 
        market value and 3.5 percent of the remainder, except that for 
        employment property located in a border city enterprise zone 
        designated pursuant to section 469.168, subdivision 4, paragraph 
        (c),.  The class rate of the first tier of market value and the 
        class rate of the remainder is rates for class 3b property are 
        determined under paragraph (a), unless the governing body of the 
        city designated as an enterprise zone determines that a specific 
        parcel shall be assessed pursuant to the first clause of this 
        sentence.  The governing body may provide for assessment under 
        the first clause of the preceding sentence only for property 
        which is located in an area which has been designated by the 
        governing body for the receipt of tax reductions authorized by 
        section 469.171, subdivision 1. 
           (c)(1) Subject to the limitations of clause (2), structures 
        which are (i) located on property classified as class 3a, (ii) 
        constructed under an initial building permit issued after 
        January 2, 1996, (iii) located in a transit zone as defined 
        under section 473.3915, subdivision 3, (iv) located within the 
        boundaries of a school district, and (v) not primarily used for 
        retail or transient lodging purposes, shall have a class rate 
        equal to 85 percent of to the lesser of 2.975 percent or the 
        class rate of the second tier of the commercial property rate 
        under paragraph (a) on any portion of the market value that does 
        not qualify for the first tier class rate under paragraph (a).  
        As used in item (v), a structure is primarily used for retail or 
        transient lodging purposes if over 50 percent of its square 
        footage is used for those purposes.  A class rate equal to 85 
        percent of the lesser of 2.975 percent or the class rate of the 
        second tier of the commercial property class rate under 
        paragraph (a) shall also apply to improvements to existing 
        structures that meet the requirements of items (i) to (v) if the 
        improvements are constructed under an initial building permit 
        issued after January 2, 1996, even if the remainder of the 
        structure was constructed prior to January 2, 1996.  For the 
        purposes of this paragraph, a structure shall be considered to 
        be located in a transit zone if any portion of the structure 
        lies within the zone.  If any property once eligible for 
        treatment under this paragraph ceases to remain eligible due to 
        revisions in transit zone boundaries, the property shall 
        continue to receive treatment under this paragraph for a period 
        of three years. 
           (2) This clause applies to any structure qualifying for the 
        transit zone reduced class rate under clause (1) on January 2, 
        1999, or any structure meeting any of the qualification criteria 
        in item (i) and otherwise qualifying for the transit zone 
        reduced class rate under clause (1).  Such a structure continues 
        to receive the transit zone reduced class rate until the 
        occurrence of one of the events in item (ii).  Property 
        qualifying under item (i)(D), that is located outside of a city 
        of the first class, qualifies for the transit zone reduced class 
        rate as provided in that item.  Property qualifying under item 
        (i)(E) qualifies for the transit zone reduced class rate as 
        provided in that item. 
           (i) A structure qualifies for the rate in this clause if it 
        is: 
           (A) property for which a building permit was issued before 
        December 31, 1998; or 
           (B) property for which a building permit was issued before 
        June 30, 2001, if: 
           (I) at least 50 percent of the land on which the structure 
        is to be built has been acquired or is the subject of signed 
        purchase agreements or signed options as of March 15, 1998, by 
        the entity that proposes construction of the project or an 
        affiliate of the entity; 
           (II) signed agreements have been entered into with one 
        entity or with affiliated entities to lease for the account of 
        the entity or affiliated entities at least 50 percent of the 
        square footage of the structure or the owner of the structure 
        will occupy at least 50 percent of the square footage of the 
        structure; and 
           (III) one of the following requirements is met: 
           the project proposer has submitted the completed data 
        portions of an environmental assessment worksheet by December 
        31, 1998; or 
           a notice of determination of adequacy of an environmental 
        impact statement has been published by April 1, 1999; or 
           an alternative urban areawide review has been completed by 
        April 1, 1999; or 
           (C) property for which a building permit is issued before 
        July 30, 1999, if: 
           (I) at least 50 percent of the land on which the structure 
        is to be built has been acquired or is the subject of signed 
        purchase agreements as of March 31, 1998, by the entity that 
        proposes construction of the project or an affiliate of the 
        entity; 
           (II) a signed agreement has been entered into between the 
        building developer and a tenant to lease for its own account at 
        least 200,000 square feet of space in the building; 
           (III) a signed letter of intent is entered into by July 1, 
        1998, between the building developer and the tenant to lease the 
        space for its own account; and 
           (IV) the environmental review process required by state law 
        was commenced by December 31, 1998; 
           (D) property for which an irrevocable letter of credit with 
        a housing and redevelopment authority was signed before December 
        31, 1998.  The structure shall receive the transit zone reduced 
        class rate during construction and for the duration of time that 
        the original tenants remain in the building.  Any unoccupied net 
        leasable square footage that is not leased within 36 months 
        after the certificate of occupancy has been issued for the 
        building shall not be eligible to receive the reduced class 
        rate.  This reduced class rate applies only if the entity that 
        constructed the structure continues to own the property; 
           (E) property, located in a city of the first class, and for 
        which the building permits for the excavation, the parking ramp, 
        and the office tower were issued prior to April 1, 1999, shall 
        receive the reduced class rate during construction and for the 
        first five assessment years immediately following its initial 
        occupancy provided that, when completed, at least 25 percent of 
        the net leasable square footage must be occupied by the entity 
        or the parent entity constructing the structure each year during 
        this time period.  In order to receive the reduced class rate on 
        the structure in any subsequent assessment years, at least 50 
        percent of the rentable square footage must be occupied by the 
        entity or the parent entity that constructed the structure.  
        This reduced class rate applies only if the entity or the parent 
        entity that constructed the structure continues to own the 
        property. 
           (ii) A structure specified by this clause, other than a 
        structure qualifying under clause (i)(D) or (E), shall continue 
        to receive the transit zone reduced class rate until the 
        occurrence of one of the following events: 
           (A) if the structure upon initial occupancy will be owner 
        occupied by the entity initially constructing the structure or 
        an affiliated entity, the structure receives the reduced class 
        rate until the structure ceases to be at least 50 percent 
        occupied by the entity or an affiliated entity, provided, if the 
        portion of the structure occupied by that entity or an affiliate 
        of the entity is less than 85 percent, the transit zone class 
        rate reduction for the portion of structure not so occupied 
        terminates upon the leasing of such space to any nonaffiliated 
        entity; or 
           (B) if the structure is leased by a single entity or 
        affiliated entity at the time of initial occupancy, the 
        structure shall receive the reduced class rate until the 
        structure ceases to be at least 50 percent occupied by the 
        entity or an affiliated entity, provided, if the portion of the 
        structure occupied by that entity or an affiliate of the entity 
        is less than 85 percent, the transit zone class rate reduction 
        for the portion of structure not so occupied shall terminate 
        upon the leasing of such space to any nonaffiliated entity; or 
           (C) if the structure meets the criteria in item (i)(C), the 
        structure shall receive the reduced class rate until the 
        expiration of the initial lease term of the applicable tenants. 
           Percentages occupied or leased shall be determined based 
        upon net leasable square footage in the structure.  The assessor 
        shall allocate the value of the structure in the same fashion as 
        provided in the general law for portions of any structure 
        receiving and not receiving the transit tax class reduction as a 
        result of this clause. 
           Sec. 18.  Minnesota Statutes 1998, section 273.13, is 
        amended by adding a subdivision to read: 
           Subd. 24a.  [TRANSIT ZONE PROPERTIES; PERSONAL PROPERTY 
        TAX.] (a) Notwithstanding the provisions of section 272.02 or 
        any other law to the contrary, a personal property tax is 
        imposed on the leasehold of a tenant of a structure described in 
        subdivision 24, paragraph (c), clause (2), item (i)(C). 
           (b) The tax equals the amount obtained by multiplying the 
        sum of the local tax rates by: 
           (1) the estimated market value of the structure multiplied 
        by 
           (2) the square footage of the structure under lease that 
        qualifies under subdivision 24, clause (c)(1), divided by 
           (3) the total square footage of the structure that 
        qualifies under subdivision 24, clause (c)(1), multiplied by 
           (4) the difference between the class rate under subdivision 
        24, paragraph (a), for the second tier and the class rate under 
        subdivision 24, paragraph (c), for the second tier for the 
        qualifying parts of a structure. 
           (c) The tax under this subdivision does not apply to a 
        lease that: 
           (1) was executed before May 1, 1999; 
           (2) was entered according to a binding written agreement 
        executed before May 1, 1999; or 
           (3) is a lease entered under an expansion option contained 
        in a lease or binding written agreement qualifying under clause 
        (1) or (2). 
           (d) The tax imposed under this subdivision is a personal 
        property tax and is imposed on the lessee or tenant and not on 
        the structure or the real property.  The tax is an obligation of 
        the lessee or tenant and must be collected in the manner 
        provided for personal property taxes. 
           (e) The personal property tax applies only to a year in 
        which the leased structure qualifies for the transit zone class 
        rate. 
           Sec. 19.  Minnesota Statutes 1998, 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 2.15 percent of market value.  
        All other class 4a property has a class rate of 2.5 2.4 percent 
        of market value.  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 
        that does not qualify as class 4bb, other than seasonal 
        residential, and recreational; 
           (2) manufactured homes not classified under any other 
        provision; 
           (3) a dwelling, garage, and surrounding one acre of 
        property on a nonhomestead farm classified under subdivision 23, 
        paragraph (b) containing two or three units; 
           (4) unimproved property that is classified residential as 
        determined under subdivision 33.  
           Class 4b property has a class rate of 1.7 1.65 percent of 
        market value.  
           (c) Class 4bb includes: 
           (1) nonhomestead residential real estate containing one 
        unit, other than seasonal residential, and recreational; and 
           (2) a single family dwelling, garage, and surrounding one 
        acre of property on a nonhomestead farm classified under 
        subdivision 23, paragraph (b). 
           Class 4bb has a class rate of 1.25 1.2 percent on the 
        first $75,000 $76,000 of market value and a class rate of 1.7 
        1.65 percent of its market value that exceeds $75,000 $76,000. 
           Property that has been classified as seasonal recreational 
        residential property at any time during which it has been owned 
        by the current owner or spouse of the current owner does not 
        qualify for class 4bb. 
           (d) Class 4c property includes: 
           (1) except as provided in subdivision 22, paragraph (c), 
        real property devoted to temporary and seasonal residential 
        occupancy for recreation purposes, including real property 
        devoted to temporary and seasonal residential occupancy for 
        recreation purposes and not devoted to commercial purposes for 
        more than 250 days in the year preceding the year of 
        assessment.  For purposes of this clause, property is devoted to 
        a commercial purpose on a specific day if any portion of the 
        property is used for residential occupancy, and a fee is charged 
        for residential occupancy.  In order for a property to be 
        classified as class 4c, seasonal recreational residential for 
        commercial purposes, at least 40 percent of the annual gross 
        lodging receipts related to the property must be from business 
        conducted during 90 consecutive days and either (i) at least 60 
        percent of all paid bookings by lodging guests during the year 
        must be for periods of at least two consecutive nights; or (ii) 
        at least 20 percent of the annual gross receipts must be from 
        charges for rental of fish houses, boats and motors, 
        snowmobiles, downhill or cross-country ski equipment, or charges 
        for marina services, launch services, and guide services, or the 
        sale of bait and fishing tackle.  For purposes of this 
        determination, a paid booking of five or more nights shall be 
        counted as two bookings.  Class 4c also includes commercial use 
        real property used exclusively for recreational purposes in 
        conjunction with class 4c property devoted to temporary and 
        seasonal residential occupancy for recreational purposes, up to 
        a total of two acres, provided the property is not devoted to 
        commercial recreational use for more than 250 days in the year 
        preceding the year of assessment and is located within two miles 
        of the class 4c property with which it is used.  Class 4c 
        property classified in this clause also includes the remainder 
        of class 1c resorts provided that the entire property including 
        that portion of the property classified as class 1c also meets 
        the requirements for class 4c under this clause; otherwise the 
        entire property is classified as class 3.  Owners of real 
        property devoted to temporary and seasonal residential occupancy 
        for recreation purposes and all or a portion of which was 
        devoted to commercial purposes for not more than 250 days in the 
        year preceding the year of assessment desiring classification as 
        class 1c or 4c, must submit a declaration to the assessor 
        designating the cabins or units occupied for 250 days or less in 
        the year preceding the year of assessment by January 15 of the 
        assessment year.  Those cabins or units and a proportionate 
        share of the land on which they are located will be designated 
        class 1c or 4c as otherwise provided.  The remainder of the 
        cabins or units and a proportionate share of the land on which 
        they are located will be designated as class 3a.  The owner of 
        property desiring designation as class 1c or 4c property must 
        provide guest registers or other records demonstrating that the 
        units for which class 1c or 4c designation is sought were not 
        occupied for more than 250 days in the year preceding the 
        assessment if so requested.  The portion of a property operated 
        as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
        nonresidential facility operated on a commercial basis not 
        directly related to temporary and seasonal residential occupancy 
        for recreation purposes shall not qualify for class 1c or 4c; 
           (2) qualified property used as a golf course if: 
           (i) it is open to the public on a daily fee basis.  It may 
        charge membership fees or dues, but a membership fee may not be 
        required in order to use the property for golfing, and its green 
        fees for golfing must be comparable to green fees typically 
        charged by municipal courses; and 
           (ii) it meets the requirements of section 273.112, 
        subdivision 3, paragraph (d). 
           A structure used as a clubhouse, restaurant, or place of 
        refreshment in conjunction with the golf course is classified as 
        class 3a property. 
           (3) real property up to a maximum of one acre of land owned 
        by a nonprofit community service oriented organization; provided 
        that the property is not used for a revenue-producing activity 
        for more than six days in the calendar year preceding the year 
        of assessment and the property is not used for residential 
        purposes on either a temporary or permanent basis.  For purposes 
        of this clause, a "nonprofit community service oriented 
        organization" means any corporation, society, association, 
        foundation, or institution organized and operated exclusively 
        for charitable, religious, fraternal, civic, or educational 
        purposes, and which is exempt from federal income taxation 
        pursuant to section 501(c)(3), (10), or (19) of the Internal 
        Revenue Code of 1986, as amended through December 31, 1990.  For 
        purposes of this clause, "revenue-producing activities" shall 
        include but not be limited to property or that portion of the 
        property that is used as an on-sale intoxicating liquor or 3.2 
        percent malt liquor establishment licensed under chapter 340A, a 
        restaurant open to the public, bowling alley, a retail store, 
        gambling conducted by organizations licensed under chapter 349, 
        an insurance business, or office or other space leased or rented 
        to a lessee who conducts a for-profit enterprise on the 
        premises.  Any portion of the property which is used for 
        revenue-producing activities for more than six days in the 
        calendar year preceding the year of assessment shall be assessed 
        as class 3a.  The use of the property for social events open 
        exclusively to members and their guests for periods of less than 
        24 hours, when an admission is not charged nor any revenues are 
        received by the organization shall not be considered a 
        revenue-producing activity; 
           (4) post-secondary student housing of not more than one 
        acre of land that is owned by a nonprofit corporation organized 
        under chapter 317A and is used exclusively by a student 
        cooperative, sorority, or fraternity for on-campus housing or 
        housing located within two miles of the border of a college 
        campus; 
           (5) manufactured home parks as defined in section 327.14, 
        subdivision 3; and 
           (6) real property that is actively and exclusively devoted 
        to indoor fitness, health, social, recreational, and related 
        uses, is owned and operated by a not-for-profit corporation, and 
        is located within the metropolitan area as defined in section 
        473.121, subdivision 2. 
           Class 4c property has a class rate of 1.8 1.65 percent of 
        market value, except that (i) for each parcel of seasonal 
        residential recreational property not used for commercial 
        purposes the first $75,000 of market value has a class rate of 
        1.25 percent, and the market value that exceeds $75,000 has a 
        class rate of 2.2 percent has the same class rates as class 4bb 
        property, (ii) manufactured home parks assessed under clause (5) 
        have a the same class rate of two percent as class 4b property, 
        and (iii) property described in paragraph (d), clause (4), has 
        the same class rate as the rate applicable to the first tier of 
        class 4bb nonhomestead residential real estate under paragraph 
        (c).  
           (e) Class 4d property is qualifying low-income rental 
        housing certified to the assessor by the housing finance agency 
        under sections 273.126 and 462A.071.  Class 4d includes land in 
        proportion to the total market value of the building that is 
        qualifying low-income rental housing.  For all properties 
        qualifying as class 4d, the market value determined by the 
        assessor must be based on the normal approach to value using 
        normal unrestricted rents. 
           Class 4d property has a class rate of one percent of market 
        value.  
           (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. 20.  Minnesota Statutes 1998, section 273.13, 
        subdivision 31, is amended to read: 
           Subd. 31.  [CLASS 5.] Class 5 property includes:  
           (1) tools, implements, and machinery of an electric 
        generating, transmission, or distribution system or a pipeline 
        system transporting or distributing water, gas, crude oil, or 
        petroleum products or mains and pipes used in the distribution 
        of steam or hot or chilled water for heating or cooling 
        buildings, which are fixtures; 
           (2) unmined iron ore and low-grade iron-bearing formations 
        as defined in section 273.14; and 
           (3) (2) all other property not otherwise classified. 
           Class 5 property has a class rate of 3.5 3.4 percent of 
        market value. 
           Sec. 21.  Minnesota Statutes 1998, section 273.1382, is 
        amended to read: 
           273.1382 [EDUCATION HOMESTEAD CREDIT; EDUCATION 
        AGRICULTURAL CREDIT.] 
           Subdivision 1.  [EDUCATION HOMESTEAD CREDIT TAX RATE.] Each 
        year, the respective county auditors shall determine the initial 
        tax rate for each school district for the general education levy 
        certified under section 126C.13, subdivision 2 or 3.  That rate 
        plus the school district's education homestead credit tax rate 
        adjustment under section 275.08, subdivision 1e, shall be the 
        general education homestead credit local tax rate for the 
        district.  The 
           Subd. 1a.  [EDUCATION HOMESTEAD CREDIT.] Each county 
        auditor shall then determine a general education homestead 
        credit for each homestead within the county equal to 68 66.2 
        percent for taxes payable in 1999 and 69 83 percent for taxes 
        payable in 2000 and thereafter of the general education 
        homestead credit local tax rate times the net tax capacity of 
        the homestead for the taxes payable year.  The amount of general 
        education homestead credit for a homestead may not exceed $320 
        for taxes payable in 1999 and $335 $390 for taxes payable in 
        2000 and thereafter.  In the case of an agricultural homestead, 
        only the net tax capacity of the house, garage, and surrounding 
        one acre of land shall be used in determining the property's 
        education homestead credit. 
           Subd. 1a.  [CREDIT PERCENTAGE REDUCTION.] If the general 
        education levy target for fiscal year 2000 or 2001 is increased 
        by another law enacted prior to the 1999 legislative session, 
        the commissioner of revenue shall adjust the percentage rates of 
        the education homestead credit for the corresponding taxes 
        payable year by multiplying the percentage rate by the ratio of 
        the prior general education levy target to the current general 
        education levy target.  If an adjustment is made under this 
        section for fiscal year 2001, the adjusted rate shall remain in 
        effect for future years until amended by subsequent legislation. 
           Subd. 1b.  [EDUCATION AGRICULTURAL CREDIT.] Property 
        classified as class 2a agricultural homestead or class 2b 
        agricultural nonhomestead or timberland is eligible for 
        education agricultural credit.  The credit is equal to 54 
        percent, in the case of agricultural homestead property, or 50 
        percent, in the case of agricultural nonhomestead property or 
        timberland, of the property's net tax capacity times the 
        education credit tax rate determined in subdivision 1.  The net 
        tax capacity of class 2a property attributable to the house, 
        garage, and surrounding one acre of land is not eligible for the 
        credit under this subdivision. 
           Subd. 2.  [CREDIT REIMBURSEMENTS.] (a) The commissioner of 
        revenue shall determine the tax reductions allowed under this 
        section for each taxes payable year, and for each school 
        district based upon a review of the abstracts of tax lists 
        submitted by the county auditors under section 275.29, and from 
        any other information which the commissioner deems relevant.  
        The commissioner of revenue shall generally compute the tax 
        reductions at the unique taxing jurisdiction level, however the 
        commissioner may compute the tax reductions at a higher 
        geographic level if that would have a negligible impact, or if 
        changes in the composition of unique taxing jurisdictions do not 
        permit computation at the unique taxing jurisdiction level.  The 
        commissioner's determinations under this paragraph are not rules.
           (b) The commissioner of revenue shall certify the total of 
        the tax reductions granted under this section for each taxes 
        payable year within each school district to the commissioner of 
        children, families, and learning after July 1 and on or before 
        August 1 of the taxes payable year.  The commissioner of 
        children, families, and learning shall reimburse each affected 
        school district for the amount of the property tax reductions 
        allowed under this section as provided in section 273.1392.  The 
        commissioner of children, families, and learning shall treat the 
        reimbursement payments as entitlements for the same state fiscal 
        year as certified, including with each district's initial 
        payment all amounts that would have been paid up to that date, 
        computed as if 90 percent of the annual reimbursement amount for 
        the district were being paid one-twelfth in each month of the 
        fiscal year.  
           Subd. 3.  [APPROPRIATION.] An amount sufficient to make the 
        payments required by this section is annually appropriated from 
        the general fund to the commissioner of children, families, and 
        learning.  
           Sec. 22.  Minnesota Statutes 1998, section 273.1398, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
        2000, the tax base differential is: 
           (1) 0.45 percent of the assessment year 1998 taxable market 
        value of class 2a agricultural homestead property, excluding the 
        house, garage, and surrounding one acre of land, between 
        $115,000 and $600,000 and over 320 acres, minus the value over 
        $600,000 that is less than 320 acres; plus 
           (2) 0.5 percent of the assessment year 1998 taxable market 
        value of noncommercial seasonal recreational residential 
        property over $75,000 in value; plus 
           (3) for purposes of computing the fiscal disparity 
        adjustment only, the tax base differential is 0.2 percent of the 
        assessment year 1998 taxable market value of class 3 
        commercial-industrial property over $150,000. 
           (b) For the purposes of the distribution of homestead and 
        agricultural credit aid for aids payable in 2000, the 
        commissioner of revenue shall use the best information available 
        as of June 30, 1999, to make an estimate of the value described 
        in paragraph (a), clause (1).  The commissioner shall adjust the 
        distribution of homestead and agricultural credit aid for aids 
        payable in 2001 and subsequent years if new information 
        regarding the value described in paragraph (a), clause (1), 
        becomes available after June 30, 1999. 
           Sec. 23.  Minnesota Statutes 1998, section 273.1398, 
        subdivision 8, is amended to read: 
           Subd. 8.  [APPROPRIATION.] (a) An amount sufficient to pay 
        the aids and credits provided under this section for school 
        districts, intermediate school districts, or any group of school 
        districts levying as a single taxing entity, is annually 
        appropriated from the general fund to the commissioner of 
        children, families, and learning.  An amount sufficient to pay 
        the aids and credits provided under this section for counties, 
        cities, towns, and special taxing districts is annually 
        appropriated from the general fund to the commissioner of 
        revenue.  A jurisdiction's aid amount may be increased or 
        decreased based on any prior year adjustments for homestead 
        credit or other property tax credit or aid programs. 
           (b) The commissioner of finance shall bill the commissioner 
        of revenue for the cost of preparation of local impact notes as 
        required by section 3.987 only to the extent to which those 
        costs exceed those costs incurred in fiscal year 1997 and for 
        any other new costs attributable to the local impact note 
        function required by section 3.987, not to exceed $100,000 in 
        fiscal year years 1998 and 1999 and $200,000 in fiscal year 1999 
        2000 and thereafter. 
           The commissioner of revenue shall deduct the amount billed 
        under this paragraph from aid payments to be made to cities and 
        counties under subdivision 2 on a pro rata basis.  The amount 
        deducted under this paragraph is appropriated to the 
        commissioner of finance for the preparation of local impact 
        notes. 
           Sec. 24.  Minnesota Statutes 1998, section 273.20, is 
        amended to read: 
           273.20 [ASSESSOR MAY ENTER DWELLINGS, BUILDINGS, OR 
        STRUCTURES.] 
           Any officer authorized by law to assess property for 
        taxation may, when necessary to the proper performance of 
        duties, enter any dwelling-house, building, or structure, and 
        view the same and the property therein.  
           Any officer authorized by law to assess property for ad 
        valorem tax purposes shall have reasonable access to land and 
        structures as necessary for the proper performance of their 
        duties.  A property owner may refuse to allow an assessor to 
        inspect their property.  This refusal by the property owner must 
        be either verbal or expressly stated in a letter to the county 
        assessor.  If the assessor is denied access to view a property, 
        the assessor is authorized to estimate the property's estimated 
        market value by making assumptions believed appropriate 
        concerning the property's finish and condition. 
           Sec. 25.  Minnesota Statutes 1998, section 274.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
        GRIEVANCES.] (a) The town board of a town, or the council or 
        other governing body of a city, is the board of review except 
        (1) in cities whose charters provide for a board of equalization 
        or (2) in any city or town that has transferred its local board 
        of review power and duties to the county board as provided in 
        subdivision 3.  The county assessor shall fix a day and time 
        when the board or the board of equalization shall meet in the 
        assessment districts of the county.  On or before February 15 of 
        each year the assessor shall give written notice of the time to 
        the city or town clerk.  Notwithstanding the provisions of any 
        charter to the contrary, the meetings must be held between April 
        1 and May 31 each year.  The clerk shall give published and 
        posted notice of the meeting at least ten days before the date 
        of the meeting.  
           If in any county, at least 25 percent of the total net tax 
        capacity of a city or town is noncommercial seasonal residential 
        recreational property classified under section 273.13, 
        subdivision 25, the county must hold two countywide 
        informational meetings on Saturdays.  The meetings will allow 
        noncommercial seasonal residential recreational taxpayers to 
        discuss their property valuation with the appropriate assessment 
        staff.  These Saturday informational meetings must be scheduled 
        to allow the owner of the noncommercial seasonal residential 
        recreational property the opportunity to attend one of the 
        meetings prior to the scheduled board of review for their city 
        or town.  The Saturday meeting dates must be contained on the 
        notice of valuation of real property under section 273.121.  
           The board shall meet at the office of the clerk to review 
        the assessment and classification of property in the town or 
        city.  No changes in valuation or classification which are 
        intended to correct errors in judgment by the county assessor 
        may be made by the county assessor after the board of review has 
        adjourned in those cities or towns that hold a local board of 
        review; however, corrections of errors that are merely clerical 
        in nature or changes that extend homestead treatment to property 
        are permitted after adjournment until the tax extension date for 
        that assessment year.  The changes must be fully documented and 
        maintained in the assessor's office and must be available for 
        review by any person.  A copy of the changes made during this 
        period in those cities or towns that hold a local board of 
        review must be sent to the county board no later than December 
        31 of the assessment year.  
           (b) The board shall determine whether the taxable property 
        in the town or city has been properly placed on the list and 
        properly valued by the assessor.  If real or personal property 
        has been omitted, the board shall place it on the list with its 
        market value, and correct the assessment so that each tract or 
        lot of real property, and each article, parcel, or class of 
        personal property, is entered on the assessment list at its 
        market value.  No assessment of the property of any person may 
        be raised unless the person has been duly notified of the intent 
        of the board to do so.  On application of any person feeling 
        aggrieved, the board shall review the assessment or 
        classification, or both, and correct it as appears just.  The 
        board may not make an individual market value adjustment or 
        classification change that would benefit the property in cases 
        where the owner or other person having control over the property 
        will not permit the assessor to inspect the property and the 
        interior of any buildings or structures.  
           (c) A local board of review may reduce assessments upon 
        petition of the taxpayer but the total reductions must not 
        reduce the aggregate assessment made by the county assessor by 
        more than one percent.  If the total reductions would lower the 
        aggregate assessments made by the county assessor by more than 
        one percent, none of the adjustments may be made.  The assessor 
        shall correct any clerical errors or double assessments 
        discovered by the board of review without regard to the one 
        percent limitation.  
           (d) A majority of the members may act at the meeting, and 
        adjourn from day to day until they finish hearing the cases 
        presented.  The assessor shall attend, with the assessment books 
        and papers, and take part in the proceedings, but must not 
        vote.  The county assessor, or an assistant delegated by the 
        county assessor shall attend the meetings.  The board shall list 
        separately, on a form appended to the assessment book, all 
        omitted property added to the list by the board and all items of 
        property increased or decreased, with the market value of each 
        item of property, added or changed by the board, placed opposite 
        the item.  The county assessor shall enter all changes made by 
        the board in the assessment book.  
           (e) Except as provided in subdivision 3, if a person fails 
        to appear in person, by counsel, or by written communication 
        before the board after being duly notified of the board's intent 
        to raise the assessment of the property, or if a person feeling 
        aggrieved by an assessment or classification fails to apply for 
        a review of the assessment or classification, the person may not 
        appear before the county board of equalization for a review of 
        the assessment or classification.  This paragraph does not apply 
        if an assessment was made after the board meeting, as provided 
        in section 273.01, or if the person can establish not having 
        received notice of market value at least five days before the 
        local board of review meeting.  
           (f) The board of review or the board of equalization must 
        complete its work and adjourn within 20 days from the time of 
        convening stated in the notice of the clerk, unless a longer 
        period is approved by the commissioner of revenue.  No action 
        taken after that date is valid.  All complaints about an 
        assessment or classification made after the meeting of the board 
        must be heard and determined by the county board of 
        equalization.  A nonresident may, at any time, before the 
        meeting of the board of review file written objections to an 
        assessment or classification with the county assessor.  The 
        objections must be presented to the board of review at its 
        meeting by the county assessor for its consideration. 
           Sec. 26.  Minnesota Statutes 1998, section 276.131, is 
        amended to read: 
           276.131 [DISTRIBUTION OF PENALTIES, INTEREST, AND COSTS.] 
           The penalties, interest, and costs collected on special 
        assessments and real and personal property taxes must be 
        distributed as follows: 
           (1) all penalties and interest collected on special 
        assessments against real or personal property must be 
        distributed to the taxing jurisdiction that levied the 
        assessment; 
           (2) 50 percent of all penalties and interest collected on 
        real and personal property taxes must be distributed to the 
        county in which the property is located school districts within 
        the county, and the other remaining 50 percent must be 
        distributed to the school districts within the county.  The 
        distribution to the school district must be in accordance with 
        the provisions of section 127A.34; and 
           (3) in the case of interest on taxes that have been 
        delinquent for a period of one year or less, (a) 50 percent of 
        the interest must be distributed to the school districts within 
        the county and (b) the remaining 50 percent shall be distributed 
        to the county; 
           (4) in the case of interest on taxes that have been 
        delinquent for a period of more than one year, (a) 50 percent of 
        the interest must be distributed to the school districts within 
        the county and (b) the remaining 50 percent must be distributed 
        as follows:  (i) the city or town where the property is located 
        shall receive a share of the amount of interest equal to the 
        proportion that the city's or town's local tax rate for the year 
        that the interest was collected, is to the sum of the city's or 
        town's local tax rate and the county's local tax rate for the 
        year that the interest was collected and (ii) the balance must 
        be distributed to the county; and 
           (5) all costs collected by the county on special 
        assessments and on delinquent real and personal property taxes 
        must be distributed to the county in which the property is 
        located.  
           The distribution of all penalties and interest to the 
        school district must be in accordance with the provisions of 
        section 127A.34. 
           Sec. 27.  Minnesota Statutes 1998, section 290A.03, 
        subdivision 6, is amended to read: 
           Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
        occupied as the claimant's principal residence and so much of 
        the land surrounding it, not exceeding ten acres, as is 
        reasonably necessary for use of the dwelling as a home and any 
        other property used for purposes of a homestead as defined in 
        section 273.13, subdivision 22, except for agricultural land 
        assessed as part of a homestead pursuant to section 273.13, 
        subdivision 23, "homestead" is limited to 320 acres the first 
        $600,000 of market value or, where the farm homestead is rented, 
        one acre.  The homestead may be owned or rented and may be a 
        part of a multidwelling or multipurpose building and the land on 
        which it is built.  A manufactured home, as defined in section 
        273.125, subdivision 8, or a park trailer taxed as a 
        manufactured home under section 168.012, subdivision 9, assessed 
        as personal property may be a dwelling for purposes of this 
        subdivision. 
           Sec. 28.  Minnesota Statutes 1998, section 290B.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
        qualifications for the senior citizens' property tax deferral 
        program are as follows: 
           (1) the property must be owned and occupied as a homestead 
        by a person 65 years of age or older.  In the case of a married 
        couple, both of the spouses must be at least 65 years old at the 
        time the first property tax deferral is granted, regardless of 
        whether the property is titled in the name of one spouse or both 
        spouses, or titled in another way that permits the property to 
        have homestead status; 
           (2) the total household income of the qualifying 
        homeowners, as defined in section 290A.03, subdivision 5, for 
        the calendar year preceding the year of the initial application 
        may not exceed $30,000 $60,000; 
           (3) the homestead must have been owned and occupied as the 
        homestead of at least one of the qualifying homeowners for at 
        least 15 years prior to the year the initial application is 
        filed; 
           (4) there are no delinquent property taxes, penalties, or 
        interest on the homesteaded property; 
           (5) there are no delinquent special assessments on the 
        homesteaded property; 
           (6) there are no state or federal tax liens or judgment 
        liens on the homesteaded property; 
           (7) there are no mortgages or other liens on the property 
        that secure future advances, except for those subject to credit 
        limits that result in compliance with clause (8); and 
           (8) the total unpaid balances of debts secured by mortgages 
        and other liens on the property, including unpaid special 
        assessments, but not including property taxes payable during the 
        year, does not exceed 30 percent of the assessor's estimated 
        market value for the year. 
           Sec. 29.  Minnesota Statutes 1998, section 290B.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPROVAL; RECORDING.] The commissioner shall 
        approve all initial applications that qualify under this chapter 
        and shall notify qualifying homeowners on or before December 1.  
        The commissioner may investigate the facts or require 
        confirmation in regard to an application.  The commissioner 
        shall record or file a notice of qualification for deferral, 
        including the names of the qualifying homeowners and a legal 
        description of the property, in the office of the county 
        recorder, or registrar of titles, whichever is applicable, in 
        the county where the qualifying property is located.  The notice 
        must state that it serves as a notice of lien and that it 
        includes deferrals under this section for future years.  The 
        homeowner shall pay the recording or filing fees for the notice, 
        which, notwithstanding section 357.18, shall be paid by the 
        homeowner at the time of satisfaction of the lien. 
           Sec. 30.  Minnesota Statutes 1998, section 290B.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXCESS-INCOME CERTIFICATION BY TAXPAYER.] A 
        taxpayer whose initial application has been approved under 
        subdivision 2 shall notify the commissioner of revenue in 
        writing by July 1 if the taxpayer's household income for the 
        preceding calendar year exceeded $30,000 $60,000.  The 
        certification must state the homeowner's total household income 
        for the previous calendar year.  No property taxes may be 
        deferred under this chapter in any year following the year in 
        which a program participant filed or should have filed an 
        excess-income certification under this subdivision, unless the 
        participant has filed a resumption of eligibility certification 
        as described in subdivision 4. 
           Sec. 31.  Minnesota Statutes 1998, section 290B.04, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 
        TAXPAYER.] A taxpayer who has previously filed an excess-income 
        certification under subdivision 3 may resume program 
        participation if the taxpayer's household income for a 
        subsequent year is $30,000 $60,000 or less.  If the taxpayer 
        chooses to resume program participation, the taxpayer must 
        notify the commissioner of revenue in writing by July 1 of the 
        year following a calendar year in which the taxpayer's household 
        income is $30,000 $60,000 or less.  The certification must state 
        the taxpayer's total household income for the previous calendar 
        year.  Once a taxpayer resumes participation in the program 
        under this subdivision, participation will continue until the 
        taxpayer files a subsequent excess-income certification under 
        subdivision 3 or until participation is terminated under section 
        290B.08, subdivision 1. 
           Sec. 32.  Minnesota Statutes 1998, section 290B.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
        commissioner shall determine each qualifying homeowner's "annual 
        maximum property tax amount" following approval of the 
        homeowner's initial application and following the receipt of a 
        resumption of eligibility certification.  The "annual maximum 
        property tax amount" equals five three percent of the 
        homeowner's total household income for the year preceding either 
        the initial application or the resumption of eligibility 
        certification, whichever is applicable.  Following approval of 
        the initial application, the commissioner shall determine the 
        qualifying homeowner's "maximum allowable deferral."  No tax may 
        be deferred relative to the appropriate assessment year for any 
        homeowner whose total household income for the previous year 
        exceeds $30,000 $60,000.  No tax shall be deferred in any year 
        in which the homeowner does not meet the program qualifications 
        in section 290B.03.  The maximum allowable total deferral is 
        equal to 75 percent of the assessor's estimated market value for 
        the year, less the balance of any mortgage loans and other 
        amounts secured by liens against the property at the time of 
        application, including any unpaid special assessments but not 
        including property taxes payable during the year. 
           Sec. 33.  Minnesota Statutes 1998, section 298.22, 
        subdivision 7, is amended to read: 
           Subd. 7.  [GIANTS RIDGE RECREATION AREA.] (a) In addition 
        to the other powers granted in this section and other law, the 
        commissioner, for purposes of fostering economic development and 
        tourism within the Giants Ridge recreation area, may spend any 
        money made available to the agency under section 298.28 to 
        acquire real or personal property or interests therein by gift, 
        purchase, or lease and may convey by lease, sale, or other means 
        of conveyance or commitment any or all of those property 
        interests acquired.  
           (b) Notwithstanding any other law to the contrary, property 
        conveyed under this subdivision and used for residential 
        purposes is not eligible for property tax homestead 
        classification under section 273.124 or for a property tax 
        refund under chapter 290A. 
           (c) In furtherance of development of the Giants Ridge 
        recreation area, the commissioner may establish and participate 
        in charitable foundations and nonprofit corporations, including 
        a corporation within the meaning of section 317A.011, 
        subdivision 6. 
           (d) (c) The term "Giants Ridge recreation area" refers to 
        an economic development project area established by the 
        commissioner in furtherance of the powers delegated in this 
        section within St. Louis county in the western portions of the 
        town of White and in the eastern portion of the westerly, 
        adjacent, unorganized township. 
           Sec. 34.  Minnesota Statutes 1998, section 373.40, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given. 
           (a) "Bonds" means an obligation as defined under section 
        475.51. 
           (b) "Capital improvement" means acquisition or betterment 
        of public lands, development rights in the form of conservation 
        easements under chapter 84C, buildings, or other improvements 
        within the county for the purpose of a county courthouse, 
        administrative building, health or social service facility, 
        correctional facility, jail, law enforcement center, hospital, 
        morgue, library, park, qualified indoor ice arena, and roads and 
        bridges.  An improvement must have an expected useful life of 
        five years or more to qualify. "Capital improvement" does not 
        include light rail transit or any activity related to it or a 
        recreation or sports facility building (such as, but not limited 
        to, a gymnasium, ice arena, racquet sports facility, swimming 
        pool, exercise room or health spa), unless the building is part 
        of an outdoor park facility and is incidental to the primary 
        purpose of outdoor recreation. 
           (c) "Commissioner" means the commissioner of trade and 
        economic development. 
           (d) "Metropolitan county" means a county located in the 
        seven-county metropolitan area as defined in section 473.121 or 
        a county with a population of 90,000 or more. 
           (e) "Population" means the population established by the 
        most recent of the following (determined as of the date the 
        resolution authorizing the bonds was adopted): 
           (1) the federal decennial census, 
           (2) a special census conducted under contract by the United 
        States Bureau of the Census, or 
           (3) a population estimate made either by the metropolitan 
        council or by the state demographer under section 4A.02. 
           (f) "Qualified indoor ice arena" means a facility that 
        meets the requirements of section 373.43. 
           (g) "Tax capacity" means total taxable market value, but 
        does not include captured market value. 
           Sec. 35.  Minnesota Statutes 1998, section 375.18, 
        subdivision 12, is amended to read: 
           Subd. 12.  [LAND FOR PUBLIC USE.] Each county board may 
        acquire by gift or purchase and improve land within the county, 
        for use as a park, site for a building, or other public purpose, 
        and, when required by the public interest, sell and convey it.  
        The land may be paid for out of moneys in the county treasury 
        not otherwise appropriated, or by issuing bonds of the 
        county.  The county board may acquire development rights in the 
        form of a conservation easement under chapter 84C.  The holder 
        of the conservation easement may be determined by a governmental 
        body. 
           Sec. 36.  Minnesota Statutes 1998, section 462A.071, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] (a) In order to qualify for 
        certification under subdivision 1, the owner or manager of the 
        property must annually apply to the agency.  The application 
        must be in the form prescribed by the agency, contain the 
        information required by the agency, and be submitted by the date 
        and time specified by the agency.  Beginning in calendar year 
        2000, the agency shall adopt procedures and deadlines for making 
        application to permit certification of the units qualifying to 
        the assessor by no later than April 1 of the assessment year.  
           (b) Each application must include: 
           (1) the property tax identification number; 
           (2) the number, type, and size of units the applicant seeks 
        to qualify as low-income housing under class 4d; 
           (3) the number, type, and size of units in the property for 
        which the applicant is not seeking qualification, if any; 
           (4) a certification that the property has been inspected by 
        a qualified inspector within the past three years and meets the 
        minimum housing quality standards or is exempt from the 
        inspection requirement under subdivision 4; 
           (5) a statement indicating the qualifying units in 
        compliance with the income limits; 
           (6) an executed agreement to restrict rents meeting the 
        requirements specified by the agency or executed leases for the 
        units for which qualification as low-income housing as class 4d 
        under section 273.13 is sought and the rent schedule; and 
           (7) any additional information the agency deems appropriate 
        to require. 
           (c) The applicant must pay a per-unit application fee to be 
        set by the agency.  The application fee charged by the agency 
        must approximately equal the costs of processing and reviewing 
        the applications.  The fee must be deposited in the housing 
        development fund. 
           Sec. 37.  Minnesota Statutes 1998, section 469.002, 
        subdivision 10, is amended to read: 
           Subd. 10.  [FEDERAL LEGISLATION.] "Federal legislation" 
        includes the United States Housing Act of 1937, United States 
        Code, title 42, sections 1401 to 1440, as amended through 
        December 31, 1989 1998; the National Housing Act, United States 
        Code, title 12, sections 1701 to 1750g, as amended through 
        December 31, 1989; and any other legislation of the Congress of 
        the United States relating to federal assistance for clearance 
        or rehabilitation of substandard or blighted areas, land 
        assembly, redevelopment projects, or housing. 
           Sec. 38.  Minnesota Statutes 1998, section 469.012, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
        a public body corporate and politic and shall have all the 
        powers necessary or convenient to carry out the purposes of 
        sections 469.001 to 469.047, except that the power to levy and 
        collect taxes or special assessments is limited to the power 
        provided in sections 469.027 to 469.033.  Its powers include the 
        following powers in addition to others granted in sections 
        469.001 to 469.047:  
           (1) to sue and be sued; to have a seal, which shall be 
        judicially noticed, and to alter it; to have perpetual 
        succession; and to make, amend, and repeal rules consistent with 
        sections 469.001 to 469.047; 
           (2) to employ an executive director, technical experts, and 
        officers, agents, and employees, permanent and temporary, that 
        it requires, and determine their qualifications, duties, and 
        compensation; for legal services it requires, to call upon the 
        chief law officer of the city or to employ its own counsel and 
        legal staff; so far as practicable, to use the services of local 
        public bodies in its area of operation, provided that those 
        local public bodies, if requested, shall make the services 
        available; 
           (3) to delegate to one or more of its agents or employees 
        the powers or duties it deems proper; 
           (4) within its area of operation, to undertake, prepare, 
        carry out, and operate projects and to provide for the 
        construction, reconstruction, improvement, extension, 
        alteration, or repair of any project or part thereof; 
           (5) subject to the provisions of section 469.026, to give, 
        sell, transfer, convey, or otherwise dispose of real or personal 
        property or any interest therein and to execute leases, deeds, 
        conveyances, negotiable instruments, purchase agreements, and 
        other contracts or instruments, and take action that is 
        necessary or convenient to carry out the purposes of these 
        sections; 
           (6) within its area of operation, to acquire real or 
        personal property or any interest therein by gifts, grant, 
        purchase, exchange, lease, transfer, bequest, devise, or 
        otherwise, and by the exercise of the power of eminent domain, 
        in the manner provided by chapter 117, to acquire real property 
        which it may deem necessary for its purposes, after the adoption 
        by it of a resolution declaring that the acquisition of the real 
        property is necessary to eliminate one or more of the conditions 
        found to exist in the resolution adopted pursuant to section 
        469.003 or to provide decent, safe, and sanitary housing for 
        persons of low and moderate income, or is necessary to carry out 
        a redevelopment project.  Real property needed or convenient for 
        a project may be acquired by the authority for the project by 
        condemnation pursuant to this section.  This includes any 
        property devoted to a public use, whether or not held in trust, 
        notwithstanding that the property may have been previously 
        acquired by condemnation or is owned by a public utility 
        corporation, because the public use in conformity with the 
        provisions of sections 469.001 to 469.047 shall be deemed a 
        superior public use.  Property devoted to a public use may be so 
        acquired only if the governing body of the municipality has 
        approved its acquisition by the authority.  An award of 
        compensation shall not be increased by reason of any increase in 
        the value of the real property caused by the assembly, clearance 
        or reconstruction, or proposed assembly, clearance or 
        reconstruction for the purposes of sections 469.001 to 469.047 
        of the real property in an area; 
           (7) within its area of operation, and without the adoption 
        of an urban renewal plan, to acquire, by all means as set forth 
        in clause (6) but without the adoption of a resolution provided 
        for in clause (6), real property, and to demolish, remove, 
        rehabilitate, or reconstruct the buildings and improvements or 
        construct new buildings and improvements thereon, or to so 
        provide through other means as set forth in Laws 1974, chapter 
        228, or to grade, fill, and construct foundations or otherwise 
        prepare the site for improvements.  The authority may dispose of 
        the property pursuant to section 469.029, provided that the 
        provisions of section 469.029 requiring conformance to an urban 
        renewal plan shall not apply.  The authority may finance these 
        activities by means of the redevelopment project fund or by 
        means of tax increments or tax increment bonds or by the methods 
        of financing provided for in section 469.033 or by means of 
        contributions from the municipality provided for in section 
        469.041, clause (9), or by any combination of those means.  Real 
        property with buildings or improvements thereon shall only be 
        acquired under this clause when the buildings or improvements 
        are substandard.  The exercise of the power of eminent domain 
        under this clause shall be limited to real property which 
        contains, or has contained within the three years immediately 
        preceding the exercise of the power of eminent domain and is 
        currently vacant, buildings and improvements which are vacated 
        and substandard.  Notwithstanding the prior sentence, in cities 
        of the first class the exercise of the power of eminent domain 
        under this clause shall be limited to real property which 
        contains, or has contained within the three years immediately 
        preceding the exercise of the power of eminent domain, buildings 
        and improvements which are substandard.  For the purpose of this 
        clause, substandard buildings or improvements mean hazardous 
        buildings as defined in section 463.15, subdivision 3, or 
        buildings or improvements that are dilapidated or obsolescent, 
        faultily designed, lack adequate ventilation, light, or sanitary 
        facilities, or any combination of these or other factors that 
        are detrimental to the safety or health of the community; 
           (8) within its area of operation, to determine the level of 
        income constituting low or moderate family income.  The 
        authority may establish various income levels for various family 
        sizes.  In making its determination, the authority may consider 
        income levels that may be established by the Department of 
        Housing and Urban Development or a similar or successor federal 
        agency for the purpose of federal loan guarantees or subsidies 
        for persons of low or moderate income.  The authority may use 
        that determination as a basis for the maximum amount of income 
        for admissions to housing development projects or housing 
        projects owned or operated by it; 
           (9) to provide in federally assisted projects any 
        relocation payments and assistance necessary to comply with the 
        requirements of the Federal Uniform Relocation Assistance and 
        Real Property Acquisition Policies Act of 1970, and any 
        amendments or supplements thereto; 
           (10) to make an agreement with the governing body or bodies 
        creating the authority which provides exemption from all ad 
        valorem real and personal property taxes levied or imposed by 
        the body or bodies creating the authority.  In the case of 
        low-rent public housing that received financial assistance under 
        the United States Housing Act of 1937, or successor federal 
        legislation, an authority may make an agreement with the 
        governing body or bodies creating the authority to provide 
        exemption from all real and personal property taxes levied or 
        imposed by the state, city, county, or other political 
        subdivision, for which the authority shall make payments in lieu 
        of taxes to the state, city, county, or other political 
        subdivisions as provided in section 469.040.  The governing body 
        shall agree on behalf of all the applicable governing bodies 
        affected that local cooperation as required by the federal 
        government shall be provided by the local governing body or 
        bodies in whose jurisdiction the project is to be located, at no 
        cost or at no greater cost than the same public services and 
        facilities furnished to other residents; 
           (11) to cooperate with or act as agent for the federal 
        government, the state or any state public body, or any agency or 
        instrumentality of the foregoing, in carrying out any of the 
        provisions of sections 469.001 to 469.047 or of any other 
        related federal, state, or local legislation; and upon the 
        consent of the governing body of the city to purchase, lease, 
        manage, or otherwise take over any housing project already owned 
        and operated by the federal government; 
           (12) to make plans for carrying out a program of voluntary 
        repair and rehabilitation of buildings and improvements, and 
        plans for the enforcement of laws, codes, and regulations 
        relating to the use of land and the use and occupancy of 
        buildings and improvements, and to the compulsory repair, 
        rehabilitation, demolition, or removal of buildings and 
        improvements.  The authority may develop, test, and report 
        methods and techniques, and carry out demonstrations and other 
        activities for the prevention and elimination of slums and 
        blight; 
           (13) to borrow money or other property and accept 
        contributions, grants, gifts, services, or other assistance from 
        the federal government, the state government, state public 
        bodies, or from any other public or private sources; 
           (14) to include in any contract for financial assistance 
        with the federal government any conditions that the federal 
        government may attach to its financial aid of a project, not 
        inconsistent with purposes of sections 469.001 to 469.047, 
        including obligating itself (which obligation shall be 
        specifically enforceable and not constitute a mortgage, 
        notwithstanding any other laws) to convey to the federal 
        government the project to which the contract relates upon the 
        occurrence of a substantial default with respect to the 
        covenants or conditions to which the authority is subject; to 
        provide in the contract that, in case of such conveyance, the 
        federal government may complete, operate, manage, lease, convey, 
        or otherwise deal with the project until the defaults are cured 
        if the federal government agrees in the contract to reconvey to 
        the authority the project as then constituted when the defaults 
        have been cured; 
           (15) to issue bonds for any of its corporate purposes and 
        to secure the bonds by mortgages upon property held or to be 
        held by it or by pledge of its revenues, including grants or 
        contributions; 
           (16) to invest any funds held in reserves or sinking funds, 
        or any funds not required for immediate disbursement, in 
        property or securities in which savings banks may legally invest 
        funds subject to their control or in the manner and subject to 
        the conditions provided in section 118A.04 for the deposit and 
        investment of public funds; 
           (17) within its area of operation, to determine where 
        blight exists or where there is unsafe, unsanitary, or 
        overcrowded housing; 
           (18) to carry out studies of the housing and redevelopment 
        needs within its area of operation and of the meeting of those 
        needs.  This includes study of data on population and family 
        groups and their distribution according to income groups, the 
        amount and quality of available housing and its distribution 
        according to rentals and sales prices, employment, wages, 
        desirable patterns for land use and community growth, and other 
        factors affecting the local housing and redevelopment needs and 
        the meeting of those needs; to make the results of those studies 
        and analyses available to the public and to building, housing, 
        and supply industries; 
           (19) if a local public body does not have a planning agency 
        or the planning agency has not produced a comprehensive or 
        general community development plan, to make or cause to be made 
        a plan to be used as a guide in the more detailed planning of 
        housing and redevelopment areas; 
           (20) to lease or rent any dwellings, accommodations, lands, 
        buildings, structures, or facilities included in any project 
        and, subject to the limitations contained in sections 469.001 to 
        469.047 with respect to the rental of dwellings in housing 
        projects, to establish and revise the rents or charges therefor; 
           (21) to own, hold, and improve real or personal property 
        and to sell, lease, exchange, transfer, assign, pledge, or 
        dispose of any real or personal property or any interest 
        therein; 
           (22) to insure or provide for the insurance of any real or 
        personal property or operations of the authority against any 
        risks or hazards; 
           (23) to procure or agree to the procurement of government 
        insurance or guarantees of the payment of any bonds or parts 
        thereof issued by an authority and to pay premiums on the 
        insurance; 
           (24) to make expenditures necessary to carry out the 
        purposes of sections 469.001 to 469.047; 
           (25) to enter into an agreement or agreements with any 
        state public body to provide informational service and 
        relocation assistance to families, individuals, business 
        concerns, and nonprofit organizations displaced or to be 
        displaced by the activities of any state public body; 
           (26) to compile and maintain a catalog of all vacant, open 
        and undeveloped land, or land which contains substandard 
        buildings and improvements as that term is defined in clause 
        (7), that is owned or controlled by the authority or by the 
        governing body within its area of operation and to compile and 
        maintain a catalog of all authority owned real property that is 
        in excess of the foreseeable needs of the authority, in order to 
        determine and recommend if the real property compiled in either 
        catalog is appropriate for disposal pursuant to the provisions 
        of section 469.029, subdivisions 9 and 10; 
           (27) to recommend to the city concerning the enforcement of 
        the applicable health, housing, building, fire prevention, and 
        housing maintenance code requirements as they relate to 
        residential dwelling structures that are being rehabilitated by 
        low- or moderate-income persons pursuant to section 469.029, 
        subdivision 9, for the period of time necessary to complete the 
        rehabilitation, as determined by the authority; 
           (28) to recommend to the city the initiation of municipal 
        powers, against certain real properties, relating to repair, 
        closing, condemnation, or demolition of unsafe, unsanitary, 
        hazardous, and unfit buildings, as provided in section 469.041, 
        clause (5); 
           (29) to sell, at private or public sale, at the price or 
        prices determined by the authority, any note, mortgage, lease, 
        sublease, lease purchase, or other instrument or obligation 
        evidencing or securing a loan made for the purpose of economic 
        development, job creation, redevelopment, or community 
        revitalization by a public agency to a business, for-profit or 
        nonprofit organization, or an individual; 
           (30) within its area of operation, to acquire and sell real 
        property that is benefited by federal housing assistance 
        payments, other rental subsidies, interest reduction payments, 
        or interest reduction contracts for the purpose of preserving 
        the affordability of low- and moderate-income multifamily 
        housing; 
           (31) to apply for, enter into contracts with the federal 
        government, administer, and carry out a section 8 program.  
        Authorization by the governing body creating the authority to 
        administer the program at the authority's initial application is 
        sufficient to authorize operation of the program in its area of 
        operation for which it was created without additional local 
        governing body approval.  Approval by the governing body or 
        bodies creating the authority constitutes approval of a housing 
        program for purposes of any special or general law requiring 
        local approval of section 8 programs undertaken by city, county, 
        or multicounty authorities; and 
           (32) to secure a mortgage or loan for a rental housing 
        project by obtaining the appointment of receivers or assignments 
        of rents and profits under sections 559.17 and 576.01, except 
        that the limitation relating to the minimum amounts of the 
        original principal balances of mortgages specified in sections 
        559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
        does not apply. 
           Sec. 39.  Minnesota Statutes 1998, section 475.52, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATUTORY CITIES.] Any statutory city may 
        issue bonds or other obligations for the acquisition or 
        betterment of public buildings, means of garbage disposal, 
        hospitals, nursing homes, homes for the aged, schools, 
        libraries, museums, art galleries, parks, playgrounds, stadia, 
        sewers, sewage disposal plants, subways, streets, sidewalks, 
        warning systems; for any utility or other public convenience 
        from which a revenue is or may be derived; for a permanent 
        improvement revolving fund; for changing, controlling or 
        bridging streams and other waterways; for the acquisition and 
        betterment of bridges and roads within two miles of the 
        corporate limits for the acquisition of development rights in 
        the form of conservation easements under chapter 84C; and for 
        acquisition of equipment for snow removal, street construction 
        and maintenance, or fire fighting.  Without limitation by the 
        foregoing the city may issue bonds to provide money for any 
        authorized corporate purpose except current expenses. 
           Sec. 40.  Minnesota Statutes 1998, section 475.52, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COUNTIES.] Any county may issue bonds for the 
        acquisition or betterment of courthouses, county administrative 
        buildings, health or social service facilities, correctional 
        facilities, law enforcement centers, jails, morgues, libraries, 
        parks, and hospitals, for roads and bridges within the county or 
        bordering thereon and for road equipment and machinery and for 
        ambulances and related equipment for the acquisition of 
        development rights in the form of conservation easements under 
        chapter 84C, and for capital equipment for the administration 
        and conduct of elections providing the equipment is uniform 
        countywide, except that the power of counties to issue bonds in 
        connection with a library shall not exist in Hennepin county. 
           Sec. 41.  Minnesota Statutes 1998, section 475.52, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TOWNS.] Any town may issue bonds for the 
        acquisition and betterment of town halls, town roads and 
        bridges, nursing homes and homes for the aged, and for 
        acquisition of equipment for snow removal, road construction or 
        maintenance, and fire fighting for the acquisition of 
        development rights in the form of conservation easements under 
        chapter 84C and for the acquisition and betterment of any 
        buildings to house and maintain town equipment. 
           Sec. 42.  Minnesota Statutes 1998, section 477A.011, 
        subdivision 36, is amended to read: 
           Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
        paragraphs (b), (c), and (d) to (k), "city aid base" means, for 
        each city, the sum of the local government aid and equalization 
        aid it was originally certified to receive in calendar year 1993 
        under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
        and 5, and the amount of disparity reduction aid it received in 
        calendar year 1993 under Minnesota Statutes 1992, section 
        273.1398, subdivision 3. 
           (b) For aids payable in 1996 and thereafter, a city that in 
        1992 or 1993 transferred an amount from governmental funds to 
        its sewer and water fund, which amount exceeded its net levy for 
        taxes payable in the year in which the transfer occurred, has a 
        "city aid base" equal to the sum of (i) its city aid base, as 
        calculated under paragraph (a), and (ii) one-half of the 
        difference between its city aid distribution under section 
        477A.013, subdivision 9, for aids payable in 1995 and its city 
        aid base for aids payable in 1995. 
           (c) The city aid base for any city with a population less 
        than 500 is increased by $40,000 for aids payable in calendar 
        year 1995 and thereafter, and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $40,000 for aids payable in calendar 
        year 1995 only, provided that: 
           (i) the average total tax capacity rate for taxes payable 
        in 1995 exceeds 200 percent; 
           (ii) the city portion of the tax capacity rate exceeds 100 
        percent; and 
           (iii) its city aid base is less than $60 per capita. 
           (d) The city aid base for a city is increased by $20,000 in 
        1998 and thereafter and the maximum amount of total aid it may 
        receive under section 477A.013, subdivision 9, paragraph (c), is 
        also increased by $20,000 in calendar year 1998 only, provided 
        that: 
           (i) the city has a population in 1994 of 2,500 or more; 
           (ii) the city is located in a county, outside of the 
        metropolitan area, which contains a city of the first class; 
           (iii) the city's net tax capacity used in calculating its 
        1996 aid under section 477A.013 is less than $400 per capita; 
        and 
           (iv) at least four percent of the total net tax capacity, 
        for taxes payable in 1996, of property located in the city is 
        classified as railroad property. 
           (e) The city aid base for a city is increased by $200,000 
        in 1999 and thereafter and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $200,000 in calendar year 1999 only, 
        provided that: 
           (i) the city was incorporated as a statutory city after 
        December 1, 1993; 
           (ii) its city aid base does not exceed $5,600; and 
           (iii) the city had a population in 1996 of 5,000 or more. 
           (f) The city aid base for a city is increased by $450,000 
        in 1999 to 2008 and the maximum amount of total aid it may 
        receive under section 477A.013, subdivision 9, paragraph (c), is 
        also increased by $450,000 in calendar year 1999 only, provided 
        that: 
           (i) the city had a population in 1996 of at least 50,000; 
           (ii) its population had increased by at least 40 percent in 
        the ten-year period ending in 1996; and 
           (iii) its city's net tax capacity for aids payable in 1998 
        is less than $700 per capita. 
           (g) Beginning in 2002, the city aid base for a city is 
        equal to the sum of its city aid base in 2001 and the amount of 
        additional aid it was certified to receive under section 477A.06 
        in 2001.  For 2002 only, the maximum amount of total aid a city 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by the amount it was certified to receive 
        under section 477A.06 in 2001. 
           (h) The city aid base for a city is increased by $150,000 
        for aids payable in 2000 and thereafter, and the maximum amount 
        of total aid it may receive under section 477A.013, subdivision 
        9, paragraph (c), is also increased by $150,000 in calendar year 
        2000 only, provided that: 
           (1) the city has a population that is greater than 1,000 
        and less than 2,500; 
           (2) its commercial and industrial percentage for aids 
        payable in 1999 is greater than 45 percent; and 
           (3) the total market value of all commercial and industrial 
        property in the city for assessment year 1999 is at least 15 
        percent less than the total market value of all commercial and 
        industrial property in the city for assessment year 1998. 
           (i) The city aid base for a city is increased by $200,000 
        in 2000 and thereafter, and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $200,000 in calendar year 2000 only, 
        provided that: 
           (1) the city had a population in 1997 of 2,500 or more; 
           (2) the net tax capacity of the city used in calculating 
        its 1999 aid under section 477A.013 is less than $650 per 
        capita; 
           (3) the pre-1940 housing percentage of the city used in 
        calculating 1999 aid under section 477A.013 is greater than 12 
        percent; 
           (4) the 1999 local government aid of the city under section 
        477A.013 is less than 20 percent of the amount that the formula 
        aid of the city would have been if the need increase percentage 
        was 100 percent; and 
           (5) the city aid base of the city used in calculating aid 
        under section 477A.013 is less than $7 per capita. 
           (j) The city aid base for a city is increased by $225,000 
        in calendar years 2000 to 2002 and the maximum amount of total 
        aid it may receive under section 477A.013, subdivision 9, 
        paragraph (c), is also increased by $225,000 in calendar year 
        2000 only, provided that: 
           (1) the city had a population of at least 5,000; 
           (2) its population had increased by at least 50 percent in 
        the ten-year period ending in 1997; 
           (3) the city is located outside of the Minneapolis-St. Paul 
        metropolitan statistical area as defined by the United States 
        Bureau of the Census; and 
           (4) the city received less than $30 per capita in aid under 
        section 477A.013, subdivision 9, for aids payable in 1999. 
           (k) The city aid base for a city is increased by $102,000 
        in 2000 and thereafter, and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $102,000 in calendar year 2000 only, 
        provided that: 
           (1) the city has a population in 1997 of 2,000 or more; 
           (2) the net tax capacity of the city used in calculating 
        its 1999 aid under section 477A.013 is less than $455 per 
        capita; 
           (3) the net levy of the city used in calculating 1999 aid 
        under section 477A.013 is greater than $195 per capita; and 
           (4) the 1999 local government aid of the city under section 
        477A.013 is less than 38 percent of the amount that the formula 
        aid of the city would have been if the need increase percentage 
        was 100 percent. 
           Sec. 43.  Minnesota Statutes 1998, section 477A.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) For assessment years 
        1998, 1999, and 2000, for all class 4d property on which 
        construction was begun before January 1, 1999, the assessor 
        shall determine the difference between the actual net tax 
        capacity and the net tax capacity that would be determined for 
        the property if the class rates for assessment year 1997 were in 
        effect. 
           (b) In calendar years 1999, 2000, and 2001, each city shall 
        be eligible for aid equal to (i) the amount by which the sum of 
        the differences determined in clause (a) for the corresponding 
        assessment year exceeds 2.5 two percent of the city's total 
        taxable net tax capacity for taxes payable in 1998, multiplied 
        by (ii) the city government's average local tax rate for taxes 
        payable in 1998. 
           Sec. 44.  Laws 1997, chapter 231, article 2, section 68, 
        subdivision 3, as amended by Laws 1998, chapter 389, article 3, 
        section 36, is amended to read: 
           Subd. 3.  [MORATORIUM ON CHANGES IN ELDERLY ASSISTED LIVING 
        FACILITIES; ASSESSMENT PRACTICES.] (a) An assessor may not 
        change the current practices or policies used generally in 
        assessing elderly assisted living facilities. 
           (b) An assessor may not change the 1999 assessment of an 
        existing elderly assisted living facility, unless the change is 
        made as a result of a change in ownership, occupancy, or use of 
        the facility.  This paragraph does not apply to: 
           (1) a facility that was constructed during calendar year 
        1997, 1998, or 1999; 
           (2) a facility that was converted to an elderly assisted 
        living facility during calendar year 1997, 1998, or 1999; or 
           (3) a change in market value. 
           (c) This subdivision expires and no longer applies on the 
        earlier of: 
           (1) the enactment of legislation establishing criteria for 
        the property taxation of elderly assisted living facilities; or 
           (2) final adjournment of the 1999 regular legislative 
        session December 31, 1999. 
           Sec. 45.  Laws 1997, First Special Session chapter 3, 
        section 27, is amended to read: 
           Sec. 27.  [TAXPAYER'S PERSONAL INFORMATION; DISCLOSURE.] 
           (a) An owner of property in Washington or Ramsey county 
        that is subject to property taxation must be informed in a clear 
        and conspicuous manner in writing on a form sent to property 
        taxpayers that the property owner's name, address, and other 
        information may be used, rented, or sold for business purposes, 
        including surveys, marketing, and solicitation. 
           (b) If the property owner so requests on the form provided, 
        then any such list generated by the county and sold for business 
        purposes must exclude the owner's name and address if the 
        business purpose is conducting surveys, marketing, or 
        solicitation. 
           (c) This section expires August 1, 1999 2001. 
           Sec. 46.  [ABATEMENT OF TAXES.] 
           Subdivision 1.  [PROPERTY DEFINED.] As used in this section 
        and section 47, "property" means property located in Lake county 
        that meets the following description: 
           All that part of Government Lot Two (2) of Section One (1) 
        in Township Fifty-two (52) North, Range Eleven (11) West of the 
        Fourth Principal Meridian, lying within the following described 
        lines: 
           Commencing at a point on the North-South quarter line of 
        said Section 1 which is 20 feet south of the center of said 
        Section 1 measured along said North-South quarter line; 
           thence easterly at a right angle to said North-South 
        quarter line a distance of 5 feet to the point of Beginning; 
           thence continuing in an easterly direction at a right angle 
        to said North-South quarter line a distance of 335 feet; 
           thence southerly at a right angle to the last described 
        line a distance of 80 feet; 
           thence easterly at a right angle to the last described line 
        a distance of 210 feet; 
           thence southerly at a right angle to the last described 
        line a distance of 255 feet; 
           thence southeasterly at an angle of 102 degrees to the last 
        described line to the ordinary low-water mark of Agate Bay; 
           thence easterly along said ordinary low-water mark to the 
        East boundary line of said Government Lot 2; 
           thence in a northerly direction along said East boundary 
        line to a point on said East boundary line which is 75 feet 
        distant in a northerly direction from the East-West quarter line 
        of said Section 1, extended, as measured along said East 
        boundary line; 
           thence in a northwesterly direction to a point which is 190 
        feet easterly measured at a right angle to the North-South 
        quarter line of said Section 1 from a point on the North-South 
        quarter line, which point is 725 feet northerly of the center of 
        said Section 1 when measured along said North-South quarter 
        line; 
           thence in a westerly direction at a right angle to said 
        North-South quarter line a distance of 185 feet; 
           thence southerly along a line parallel to and 5 feet 
        distant easterly from said North-South quarter line a distance 
        of 230 feet; 
           thence easterly at a right angle to the last described line 
        a distance of 130 feet; 
           thence southerly at a right angle to the last described 
        line a distance of 119.27 feet; 
           thence westerly at a right angle to the last described line 
        a distance of 130 feet; 
           thence southerly along a line parallel to and 5 feet 
        distant easterly from said North-South quarter line a distance 
        of 395.73 feet to the point of beginning. 
           Subd. 2.  [AUTHORIZATION.] Upon a majority vote of its 
        members, the governing bodies of each of Lake county, the city 
        of Two Harbors, and Lake Superior independent school district 
        No. 381, may abate the taxes levied on the property described in 
        subdivision 1 in 1979 to 1990, payable in 1980 to 1991, as well 
        as any interest and penalties due on those taxes. 
           Sec. 47.  [RECORDING OF CONVEYANCE AUTHORIZED.] 
           Notwithstanding Minnesota Statutes, section 272.12, or any 
        other law to the contrary, if the governing bodies of Lake 
        county, the city of Two Harbors, and Lake Superior independent 
        school district No. 381 have all abated the taxes, interest, and 
        penalties as provided in section 46, subdivision 2, the county 
        auditor may record the conveyance of the property described in 
        section 46, subdivision 1. 
           Sec. 48.  [LOCAL PERFORMANCE AID RECIPIENTS; OTHER AID 
        INCREASES.] 
           (a) If a county received local performance aid under 
        Minnesota Statutes, section 477A.05, in calendar year 1999, the 
        amount of homestead and agricultural credit aid determined and 
        payable to the county under Minnesota Statutes, section 
        273.1398, in 2000 and subsequent years is increased by the 
        amount of performance aid it received in 1999. 
           (b) If a city received local performance aid under 
        Minnesota Statutes, section 477A.05, in calendar year 1999, the 
        city aid base of the city under Minnesota Statutes, section 
        477A.011, subdivision 36, is increased for aid payable in 2000 
        and subsequent years by the amount of performance aid it 
        received in 1999, and the maximum amount of total aid it may 
        receive under Minnesota Statutes, section 477A.013, subdivision 
        9, paragraph (c), is also increased by that amount in calendar 
        year 2000 only. 
           (c) For purposes of determining the limitation on aid 
        increases under Minnesota Statutes, section 477A.013, 
        subdivision 9, paragraph (b), for aid payable in 2000, the sum 
        of the aid to all cities in 2000 does not include the aid 
        increase under paragraph (a) of this section. 
           Sec. 49.  [RECOMMENDATIONS ON UTILITY TAX POLICY.] 
           The commissioner of revenue, upon consultation with the 
        commissioner of public service and other appropriate state 
        agencies, shall convene meetings of representatives from 
        utilities which pay personal property taxes on generation 
        facilities and local governments in which those facilities are 
        sited.  These meetings shall assess policy issues related to the 
        taxation of Minnesota utility generation facilities in a 
        changing energy market, including: 
           (1) the effects of future restructuring of the electric 
        industry; 
           (2) impacts on revenue to local governments and debt 
        issuance; 
           (3) evolution of utility tax policy in Minnesota and other 
        states; 
           (4) sufficiency of Minnesota's future electric power 
        supply; and 
           (5) any other relevant issues, including environmental, 
        labor, and consumer issues. 
           The meetings shall be open to any interested parties.  The 
        commissioner shall examine utility tax policy issues and make 
        recommendations, as warranted, on the future of the personal 
        property tax on generation facilities and the replacement of 
        revenues that would be lost to local units of government as a 
        result of a partial or full exemption of these personal property 
        taxes. 
           The commissioner shall report on the progress of these 
        meetings, including options being considered and a plan for 
        completing the report, to the chairs of the senate committees on 
        taxes and jobs, energy and community development, the house 
        committees on taxes and commerce, and the governor, by January 
        15, 2000, with a final report to those same officials by 
        December 1, 2000. 
           Sec. 50.  [383D.74] [DAKOTA COUNTY; ADMINISTRATIVE 
        PENALTIES.] 
           Subdivision 1.  [PENALTIES.] The Dakota county board may 
        impose an administrative penalty for violation of an ordinance 
        enacted under chapter 103F.  No penalty may be imposed unless 
        the owner has received notice, served personally or by mail, of 
        the alleged violation and an opportunity for a hearing before a 
        person authorized by the county board to conduct the hearing.  A 
        decision that a violation occurred must be in writing.  The 
        amount of the penalty with interest may not exceed the amount 
        allowed for a single misdemeanor violation.  A person aggrieved 
        by a decision under this section may have the decision reviewed 
        in the district court.  If a penalty imposed under this section 
        is unpaid for more than 60 days after the date when payment is 
        due, the county board may certify the penalty to the county 
        auditor for collection to the same extent and in the same manner 
        provided by law for the assessment and collection of real estate 
        taxes. 
           Subd. 2.  [EXPIRATION.] The authority to impose a penalty 
        under this section expires on December 31, 2000. 
           Sec. 51.  [LEGISLATIVE INTENT.] 
           It is the intent of the legislature that one-half of the 
        actual property tax savings to the taxpayer as a result of the 
        class rate reduction under section 19, for manufactured home 
        parks, for taxes payable in 2000 to 2004, be reinvested by the 
        taxpayer in capital improvements of the manufactured home park 
        or used for direct assistance to homeowners for home 
        improvements. 
           Sec. 52.  [2000 CHARITY CARE AID.] 
           Subdivision 1.  [PURPOSE.] The purpose of charity care aid 
        is to prevent or reduce the reliance on county property taxes to 
        meet the cost of providing medical care to individuals who are 
        indigent and who do not reside in the county. 
           Subd. 2.  [QUALIFICATION.] A county qualifies for payment 
        under this section in 2000 only if it contains a hospital that 
        has a medical assistance disproportionate population adjustment 
        as determined under section 256.969, subdivision 9, greater than 
        16 percent. 
           Subd. 3.  [REPORTS BY HOSPITALS AND COUNTIES.] (a) By June 
        1, 1999, a hospital described in subdivision 2 must file a 
        report with the county in which it is located setting forth its 
        audited financial statements and a schedule setting forth the 
        aggregate amount of charity care for calendar year 1998 that 
        meets the following criteria: 
           (1) the patient is from a county other than the county in 
        which the hospital is located; and 
           (2) the hospital has made a preliminary determination that: 
           (i) the patient is not eligible for any public health care 
        program or it cannot be determined whether the person is 
        eligible for any public health care program; and 
           (ii) the person is uninsured or it cannot be determined if 
        the person is uninsured or the person has insufficient resources 
        to pay the cost of services delivered by the hospital. 
           (b) By July 1, 1999, each county must report to the 
        commissioner of revenue the total amount of charity care 
        reported to it by hospitals under this subdivision.  
           Subd. 4.  [AMOUNT OF AID.] (a) Subject to the limitation in 
        paragraph (b), payment to a county under this section is equal 
        to the aggregate amount of charity care, as reported under 
        subdivision 3, for calendar year 1998. 
           (b) The total of all payments under this section may not 
        exceed $10,000,000.  If the amounts reported under subdivision 3 
        for all counties exceeds $10,000,000, the distributions to each 
        county must be allocated in proportion to the total amount of 
        uncompensated care reported to the commissioner by the county so 
        that the total of the payments does not exceed $10,000,000. 
           Subd. 5.  [PAYMENT DATES.] The aid amounts must be paid as 
        provided in section 477A.015. 
           Subd. 6.  [USE OF FUNDS.] Each county that receives a 
        payment under this section must remit all charity care aid funds 
        to hospitals described in subdivision 2 that apply to the county 
        for reimbursement.  If the aid a county receives is less than 
        the total amount of uncompensated care reported by eligible 
        hospitals in the county, the aid amounts remitted to the 
        hospitals must be proportional to the amounts reported. 
           Subd. 7.  [REPORT TO THE COMMISSIONER.] By March 15, 2001, 
        each county that receives the aid must file a report with the 
        commissioner of revenue describing how charity care aids were 
        spent, and verifying that they were paid to hospitals described 
        in subdivision 2 for charity care purposes for individuals who 
        do not reside in the county. 
           Subd. 8.  [NOTICE TO COUNTIES.] The commissioner of revenue 
        shall annually notify the governing body of each county, 
        providing information, to the extent available to the 
        commissioner, regarding the amount of reimbursements paid under 
        this section attributable to care provided to residents of that 
        county. 
           Subd. 9.  [HENNEPIN COUNTY LEVY LIMIT ADJUSTMENT.] For 
        taxes levied in 1999 only, the levy limit for Hennepin county 
        under Minnesota Statutes, section 275.71, subdivision 4, is 
        reduced by an amount equal to the amount of charity aid 
        allocated to the Hennepin county medical center. 
           Subd. 10.  [APPROPRIATION.] The amount sufficient to make 
        the payments under this section is appropriated from the general 
        fund to the commissioner of revenue. 
           Sec. 53.  [PROPERTY TAX ABATEMENT; PROPERTY DAMAGED BY 
        TORNADO.] 
           Subdivision 1.  [ABATEMENT AMOUNT.] The county auditor 
        shall grant an abatement for taxes payable in 1999 to any 
        property in a qualifying county, as defined in Laws 1998, 
        chapter 383, section 20, that contains a structure that has been 
        determined by the assessor to have lost over 50 percent of its 
        estimated market value due to wind damage sustained on March 29, 
        1998, excluding residential homestead property and the portion 
        of agricultural homestead property consisting of the house, 
        garage, and surrounding one acre of land.  The abatement is 
        equal to 75 percent of the amount by which the net tax capacity 
        of the structure was reduced by the wind damage, multiplied by 
        the payable 1999 total local net tax capacity tax rate, plus 75 
        percent of the amount by which the referendum market value of 
        the structure was reduced by the wind damage, multiplied by the 
        payable 1999 total market value tax rate.  If the amount of the 
        abatement exceeds the remaining tax due on the property for 
        taxes payable in 1999, a refund shall be issued to the taxpayer 
        by the county treasurer by June 30, 1999. 
           Subd. 2.  [CERTIFICATION.] The amount of abatements granted 
        under this section shall be reported to the commissioner of 
        revenue by the county auditor by June 30, 1999, in a form 
        prescribed by the commissioner.  The commissioner may require 
        the county to provide other information necessary to verify the 
        accuracy of the abatement amounts submitted. 
           Subd. 3.  [PAYMENT.] The commissioner shall make payments 
        equal to the amount of abatements granted to each county by 
        August 30, 1999.  The county treasurer shall distribute the 
        payments to the affected taxing jurisdictions equal to the 
        amount of the tax that was abated as part of the October 1999 
        regular settlement as provided in Minnesota Statutes, section 
        276.111. 
           Subd. 4.  [APPROPRIATION.] The amount necessary to fund the 
        payments required under this section is appropriated from the 
        general fund to the commissioner of revenue in fiscal year 2000. 
           Sec. 54.  [REPEALER.] 
           (a) Minnesota Statutes 1998, section 273.11, subdivision 
        10, is repealed. 
           (b) Minnesota Statutes 1998, section 477A.05, is repealed. 
           (c) Laws 1998, chapter 389, article 3, section 45, is 
        repealed. 
           Sec. 55.  [EFFECTIVE DATES.] 
           Sections 1 and 2 are effective for petitions filed on or 
        after the day following final enactment.  
           Sections 3, 4, 5, 9, paragraph (c), 10, 11, 15, 16, 17, 
        paragraphs (a) and (b), 19, 20, 21, 22, 25, and 33 are effective 
        for taxes levied in 1999, payable in 2000, and thereafter. 
           Section 6 is effective for assessment years 1999 through 
        2001. 
           Section 7 is effective for improvements made on or after 
        July 1, 1999.  
           Section 8 is effective retroactively for property taxes 
        payable in 1998 and thereafter. 
           Section 9, paragraph (h), is effective for taxes payable in 
        1999 and subsequent years. 
           Section 13 is effective beginning with the 1999 assessment, 
        taxes payable in 2000 and thereafter.  For eligibility for the 
        1999 assessment year under section 13, paragraph (b), the owner 
        or the person who is actively farming the property must notify 
        the county assessor by July 1, 1999, and furnish to the assessor 
        the information required by the assessor to determine whether 
        the qualifying criteria has been met for the 1999 assessment on 
        the agricultural property. 
           Sections 12, 14, 24, 29, 36 to 38, 44, and 53 are effective 
        the day following final enactment.  
           Sections 17, paragraph (c), 18, and 54, paragraph (c), are 
        effective for taxes levied in 2000, payable in 2001 and 
        thereafter. 
           Section 20, paragraph (f), is effective for the 2000 
        assessment and thereafter, for taxes payable in 2001 and 
        thereafter, except that for taxes payable in 2001, the date for 
        filing an application with the county assessor under section 20, 
        paragraph (f), clause (3), is September 1, 1999. 
           Section 26 is effective for penalties and interest on 
        property taxes collected after June 30, 1999. 
           Section 27 is effective for property tax refunds for claims 
        for property taxes payable filed in 2000 and thereafter for 
        taxes payable in 2000 and thereafter. 
           Sections 22, 48, and 54, paragraph (b), are effective for 
        aids payable in 2000 and thereafter. 
           Sections 28 and 30 to 32 are effective for deferrals of 
        property taxes payable in 2000 and thereafter.  The changes in 
        the annual tax amount percentage and the maximum annual 
        household income in sections 28 and 30 to 32 apply to all 
        homeowners and all property taxes deferred beginning in payable 
        2000, including those homeowners who initially qualified under 
        this program for taxes payable in 1999. 
           Section 45 applies to Washington county only and is 
        effective the day after the chief clerical officer of Washington 
        county files a certificate of approval that complies with 
        Minnesota Statutes, section 645.021, subdivision 3. 
           Sections 46 and 47 are effective the day following final 
        enactment, upon approval by and compliance with Minnesota 
        Statutes, section 645.021, subdivision 3, by the governing 
        bodies of Lake county, the city of Two Harbors, and Lake 
        Superior independent school district No. 381. 
                                   ARTICLE 6 
                       LEVY AUTHORIZATION AND LEVY LIMITS 
           Section 1.  Minnesota Statutes 1998, section 204B.135, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [REDISTRICTING EXPENSES.] The county board may 
        levy a tax not to exceed $1 per capita in the year ending in "0" 
        to pay costs incurred in the year ending in "1" or "2" that are 
        reasonably related to the redistricting of election districts, 
        establishment of precinct boundaries, designation of polling 
        places, and the updating of voter records in the statewide 
        registration system.  The county auditor shall distribute to 
        each municipality in the county on a per capita basis 25 percent 
        of the amount levied as provided in this subdivision, based on 
        the population of the municipality in the most recent census.  
        This levy is not subject to statutory levy limits. 
           Sec. 2.  [275.078] [AUTHORIZATION; TAX RATE INCREASE.] 
           On or before October 1, 1999, and each subsequent year, the 
        county auditor shall certify to the governing body of each home 
        rule charter or statutory city in the county and to the county 
        board, the following information for the taxing jurisdiction: 
           (1) the taxing jurisdiction's certified levy under section 
        275.08 for the previous year, taxes payable in the current year, 
        excluding any amount levied to pay general obligation bonds, 
        less (i) the areawide portion of the levy under section 276A.06, 
        subdivision 3, or 473F.08, subdivision 3, if any, for taxes 
        payable in the following year; and (ii) the sum of the net tax 
        capacity adjustment amount and the fiscal disparities adjustment 
        amount under section 273.1398, subdivision 2, if any, for aids 
        payable in the following year; 
           (2) the taxing jurisdiction's taxable net tax capacity for 
        the current assessment year, for taxes payable in the following 
        year; and 
           (3) the tax rate obtained by dividing the amount in clause 
        (1) by the amount in clause (2), rounded to the nearest 
        hundredth percent. 
           In order to impose a tax rate for purposes other than to 
        pay general obligation bonds for taxes payable in the following 
        year that is higher than the tax rate certified by the county 
        auditor under clause (3), the governing body of the city or the 
        county board must adopt a resolution, after holding a public 
        hearing, authorizing a higher tax rate and file a copy of the 
        resolution with the county auditor on or before October 20, 
        1999, and each year thereafter.  A county auditor is prohibited 
        from fixing a tax rate for purposes other than to pay general 
        obligation bonds for taxes payable in the following year that is 
        higher than the rate certified under clause (3) if a resolution 
        has not been filed, unless the higher rate is due solely to a 
        reduction in the taxing jurisdiction's net tax capacity 
        certified under clause (2) resulting from classification 
        changes, exemptions, tax court judgments, or clerical or 
        administrative errors made by the county.  For purposes of this 
        section, "public hearing" includes, but is not limited to, 
        regularly scheduled city council hearings and county board 
        meetings. 
           Sec. 3.  Minnesota Statutes 1998, section 275.70, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
        portions of ad valorem taxes levied by a local governmental unit 
        for the following purposes or in the following manner: 
           (1) to pay the costs of the principal and interest on 
        bonded indebtedness or to reimburse for the amount of liquor 
        store revenues used to pay the principal and interest due on 
        municipal liquor store bonds in the year preceding the year for 
        which the levy limit is calculated; 
           (2) to pay the costs of principal and interest on 
        certificates of indebtedness issued for any corporate purpose 
        except for the following: 
           (i) tax anticipation or aid anticipation certificates of 
        indebtedness; 
           (ii) certificates of indebtedness issued under sections 
        298.28 and 298.282; 
           (iii) certificates of indebtedness used to fund current 
        expenses or to pay the costs of extraordinary expenditures that 
        result from a public emergency; or 
           (iv) certificates of indebtedness used to fund an 
        insufficiency in tax receipts or an insufficiency in other 
        revenue sources; 
           (3) to provide for the bonded indebtedness portion of 
        payments made to another political subdivision of the state of 
        Minnesota; 
           (4) to fund payments made to the Minnesota state armory 
        building commission under section 193.145, subdivision 2, to 
        retire the principal and interest on armory construction bonds; 
           (5) for unreimbursed expenses related to flooding that 
        occurred during the first half of calendar year 1997, as allowed 
        by the commissioner of revenue under section 275.74, paragraph 
        (b); 
           (6) for local units of government located in an area 
        designated by the Federal Emergency Management Agency pursuant 
        to a major disaster declaration issued for Minnesota by 
        President Clinton after April 1, 1997, and before June 11, 1997, 
        for the amount of tax dollars lost due to abatements authorized 
        under section 273.123, subdivision 7, and Laws 1997, chapter 
        231, article 2, section 64, to the extent that they are related 
        to the major disaster and to the extent that neither the state 
        or federal government reimburses the local government for the 
        amount lost; 
           (7) property taxes approved by voters which are levied 
        against the referendum market value as provided under section 
        275.61; 
           (8) to fund matching requirements needed to qualify for 
        federal or state grants or programs to the extent that either 
        (i) the matching requirement exceeds the matching requirement in 
        calendar year 1997, or (ii) it is a new matching requirement 
        that didn't exist prior to 1998; 
           (9) to pay the expenses reasonably and necessarily incurred 
        in preparing for or repairing the effects of natural disaster 
        including the occurrence or threat of widespread or severe 
        damage, injury, or loss of life or property resulting from 
        natural causes, in accordance with standards formulated by the 
        emergency services division of the state department of public 
        safety, as allowed by the commissioner of revenue under section 
        275.74, paragraph (b); 
           (10) for the amount of tax revenue lost due to abatements 
        authorized under section 273.123, subdivision 7, for damage 
        related to the tornadoes of March 29, 1998, to the extent that 
        neither the state or federal government provides reimbursement 
        for the amount lost; 
           (11) pay amounts required to correct an error in the levy 
        certified to the county auditor by a city or county in a levy 
        year, but only to the extent that when added to the preceding 
        year's levy it is not in excess of an applicable statutory, 
        special law or charter limitation, or the limitation imposed on 
        the governmental subdivision by sections 275.70 to 275.74 in the 
        preceding levy year; and 
           (12) to pay an abatement under section 469.1815.; and 
           (13) to pay the operating or maintenance costs of a county 
        jail as authorized in section 641.01 or 641.262, or of a 
        correctional facility as defined in section 241.021, subdivision 
        1, paragraph (5), to the extent that the county can demonstrate 
        to the commissioner of revenue that the amount has been included 
        in the county budget as a direct result of a rule, minimum 
        requirement, minimum standard, or directive of the department of 
        corrections.  If the county utilizes this special levy, any 
        amount levied by the county in the previous levy year for the 
        purposes specified under this clause and included in the 
        county's previous year's levy limitation computed under section 
        275.71, shall be deducted from the levy limit base under section 
        275.71, subdivision 2, when determining the county's current 
        year levy limitation.  The county shall provide the necessary 
        information to the commissioner of revenue for making this 
        determination. 
           Sec. 4.  Minnesota Statutes 1998, section 275.71, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
        local governmental unit for taxes levied in 1997 shall be equal 
        to the sum of: 
           (1) the amount the local governmental unit levied in 1996, 
        less any amount levied for debt, as reported to the department 
        of revenue under section 275.62, subdivision 1, clause (1), and 
        less any tax levied in 1996 against market value as provided for 
        in section 275.61; 
           (2) the amount of aids the local governmental unit was 
        certified to receive in calendar year 1997 under sections 
        477A.011 to 477A.03 before any reductions for state tax 
        increment financing aid under section 273.1399, subdivision 5; 
           (3) the amount of homestead and agricultural credit aid the 
        local governmental unit was certified to receive under section 
        273.1398 in calendar year 1997 before any reductions for tax 
        increment financing aid under section 273.1399, subdivision 5; 
           (4) the amount of local performance aid the local 
        governmental unit was certified to receive in calendar year 1997 
        under section 477A.05; and 
           (5) the amount of any payments certified to the local 
        government unit in 1997 under sections 298.28 and 298.282. 
           If a governmental unit was not required to report under 
        section 275.62 for taxes levied in 1997, the commissioner shall 
        request information on levies used for debt from the local 
        governmental unit and adjust its levy limit base accordingly. 
           (b) The levy limit base for a local governmental unit for 
        taxes levied in 1998 is equal to its adjusted levy limit base in 
        the previous year, subject to any adjustments under section 
        275.72 and multiplied by the increase that would have occurred 
        under subdivision 3, clause (3), if that clause had been in 
        effect for taxes levied in 1997. 
           (c) The levy limit base for a city with a population 
        greater than 2,500 for taxes levied in 1999 is limited to its 
        adjusted levy limit base in the previous year, subject to 
        adjustments under section 275.72. 
           (d) The levy limit base for a county for taxes levied in 
        1999 is limited to the difference between (1) its adjusted levy 
        limit base in the previous year subject to adjustments under 
        section 275.72, and (2) one-half of the county's share of the 
        net cost to the state for assumption of district court costs, as 
        reported by the supreme court to the commissioner of revenue 
        under section 273.1398, subdivision 4a, paragraph (a). 
           Sec. 5.  Minnesota Statutes 1998, section 275.71, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 
        1998 and 1999, the adjusted levy limit is equal to the levy 
        limit base computed under subdivision 2 or section 275.72, 
        multiplied by: 
           (1) one plus a percentage equal to the percentage growth in 
        the implicit price deflator; and 
           (2) for all cities and for counties outside of the 
        seven-county metropolitan area, one plus a percentage equal to 
        the percentage increase in number of households, if any, for the 
        most recent 12-month period for which data is available; and for 
        counties located in the seven-county metropolitan area, one plus 
        a percentage equal to the greater of the percentage increase in 
        the number of households in the county or the percentage 
        increase in the number of households in the entire seven-county 
        metropolitan area for the most recent 12-month period for which 
        data is available; and 
           (3) one plus a percentage equal to the percentage increase 
        in the taxable market value of the jurisdiction due to new 
        construction of class 3 and class 5 property, as defined in 
        section 273.13, subdivisions 24 and 31, for the most recent year 
        for which data are available. 
           Sec. 6.  Minnesota Statutes 1998, section 275.71, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied in 
        1998 and 1999, the property tax levy limit for a local 
        governmental unit is equal to its adjusted levy limit base 
        determined under subdivision 3 plus any additional levy 
        authorized under section 275.73, which is levied against net tax 
        capacity, reduced by the sum of (1) the total amount of aids 
        that the local governmental unit is certified to receive under 
        sections 477A.011 to 477A.014, (2) homestead and agricultural 
        aids it is certified to receive under section 273.1398, (3) 
        local performance aid it is certified to receive under section 
        477A.05, (4) taconite aids under sections 298.28 and 298.282 
        including any aid which was required to be placed in a special 
        fund for expenditure in the next succeeding year, (5) flood loss 
        aid under section 273.1383, and (6) low-income housing aid under 
        sections 477A.06 and 477A.065. 
           Sec. 7.  Minnesota Statutes 1998, section 465.82, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [DIFFERENTIAL TAXATION.] The plan for cooperation 
        and combination adopted in accordance with subdivision 1 may 
        establish that the tax rate of the local government unit with 
        the lesser tax rate prior to the effective date of combination 
        shall be increased in substantially equal proportions over not 
        more than six years to equality with the tax rate on the 
        property already within the borders of the local unit of 
        government with the higher tax rate.  The appropriate period of 
        time, if any, for transition to the higher tax rate shall be 
        based on the time reasonably required to effectively provide 
        equal municipal services to the residents of the local unit of 
        government with the lower tax rate. 
           Sec. 8.  Minnesota Statutes 1998, section 473.252, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SOURCES OF FUNDS.] The council shall credit to 
        the tax base revitalization account within the fund the amount, 
        if any, provided for under subdivision 4, and the amount, if 
        any, distributed to the council under section 473F.08, 
        subdivision 3b. 
           Sec. 9.  Laws 1988, chapter 645, section 3, is amended to 
        read: 
           Sec. 3.  [TAX; PAYMENT OF EXPENSES.] 
           (a) The tax levied by the hospital district under Minnesota 
        Statutes, section 447.34, must not be levied at a rate that 
        exceeds 2 mills .0063 percent of taxable market value.  The 
        proceeds 
           (b) .0048 percent of taxable market value of that tax in 
        paragraph (a) may be used only for acquisition, betterment, and 
        maintenance of the district's hospital and nursing home 
        facilities and equipment, and not for administrative or salary 
        expenses.  
           (c) .0015 percent of taxable market value of the tax in 
        paragraph (a) may be used solely for the purpose of capital 
        expenditures as it relates to ambulance acquisitions for the 
        Cook ambulance service and the Orr ambulance service and not for 
        administrative or salary expenses.  
           The part of the levy referred to in paragraph (c) must be 
        administered by the Cook Hospital and passed on directly to the 
        Cook area ambulance service board and the city of Orr to be held 
        in trust until funding for a new ambulance is needed by either 
        the Cook ambulance service or the Orr ambulance service. 
           Sec. 10.  Laws 1997, chapter 231, article 3, section 9, is 
        amended to read: 
           Sec. 9.  [EFFECTIVE DATE.] 
           Sections 1 and 3 to 7, as amended by Laws 1998, chapter 
        389, article 4, sections 1 to 6, are effective for taxes levied 
        in 1997 and 1998 through 1999, payable in 1998 and 1999 through 
        2000. 
           Upon compliance with Minnesota Statutes, section 645.021, 
        subdivision 3, by the governing body of Faribault county or the 
        city of Blue Earth, section 8 is effective for taxes levied in 
        1997 and 1998 through 1999 in the county or city that approves 
        it. 
           Sec. 11.  [CEMETERY 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 $1,000 annually for cemetery purposes, beginning with 
        taxes payable in 2000 and ending with taxes payable in 2009. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective June 
        1, 1999, without local approval. 
           Sec. 12.  [COUNTY OF GOODHUE; LEVY LIMITS AND AID 
        ADJUSTMENTS.] 
           Subdivision 1.  [LEVY LIMIT BASE.] The levy limit base of 
        the county of Goodhue for taxes levied in 1999 under Minnesota 
        Statutes, section 275.71, subdivision 2, is increased by 
        $422,324. 
           Subd. 2.  [TEMPORARY COUNTY AGRICULTURAL AND HOMESTEAD 
        CREDIT AID ADJUSTMENTS.] For aids paid in calendar year 1999 
        only, the county of Goodhue shall receive an additional aid 
        payment of $422,324 under the provisions of Minnesota Statutes, 
        section 273.1398.  For aids paid in calendar years 2000 and 
        2001, the aid paid to the county of Goodhue under section 
        273.1398, subdivision 2, shall be reduced by $211,162.  The 
        additional aid paid in 1999 shall not be included in calculating 
        any limitation on levies or expenditures in calendar year 1999 
        but the reductions in calendar years 2000 and 2001 shall be 
        included in calculating any limitation on levies or expenditures.
           Subd. 3.  [APPROPRIATION.] $422,324 is appropriated in 
        fiscal year 2000 to the commissioner of revenue from the general 
        fund to make the payment under subdivision 2. 
           Subd. 4.  [EFFECTIVE DATE.] Subdivision 1 is effective for 
        taxes levied in 1999 upon compliance with the governing body of 
        the county of Goodhue with Minnesota Statutes, section 645.021, 
        subdivision 3.  Subdivision 2 is effective for aids payable in 
        calendar years 1999 to 2001. 
           Sec. 13.  [CITY OF GRANT; LEVY LIMITS.] 
           Subdivision 1.  [LEVY LIMIT BASE INCREASE.] The levy limit 
        base for the city of Grant for taxes levied in 1999 under 
        Minnesota Statutes, section 275.71, subdivision 2, is increased 
        by an amount equal to the difference between (1) the amount the 
        city would have raised if it had imposed a tax rate equal to 
        one-third of the statewide average city tax effort rate for 
        taxes payable in 1999, as defined in Minnesota Statutes, section 
        477A.011, subdivision 35, on its net tax capacity for taxes 
        payable in 1999, as defined in Minnesota Statutes, section 
        477A.011, subdivision 20; and (2) the amount it levied for taxes 
        payable in 1999. 
           Subd. 2.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
        effective upon compliance by the governing body of the city of 
        Grant with Minnesota Statutes, section 645.021, subdivision 3, 
        for taxes levied in 1999, payable in 2000. 
           Sec. 14.  [NORTH FORK CROW RIVER WATERSHED DISTRICT.] 
           Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, section 103D.905, subdivision 3, the North 
        Fork Crow River watershed district may annually levy up to 
        .04836 percent of taxable market value, or $140,000, whichever 
        is less, for its administrative fund. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective 
        without local approval beginning with taxes levied in 1999, 
        payable in 2000. 
           Sec. 15.  [SAUK RIVER WATERSHED DISTRICT.] 
           Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 
        river watershed district may annually levy up to $200,000 for 
        its administrative fund for taxes payable in 2000, 2001, 2002, 
        2003, and 2004. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
        day following final enactment.  
           Sec. 16.  [CITY OF STILLWATER; DIVISION INTO URBAN AND 
        RURAL SERVICE DISTRICTS.] 
           Notwithstanding the provisions of Minnesota Statutes, 
        section 272.67, subdivisions 1 and 6, in order to carry out an 
        orderly annexation agreement entered into for the annexation of 
        a part or all of Stillwater township, the city of Stillwater may 
        divide its area into urban service districts and rural service 
        districts constituting separate taxing districts for the purpose 
        of all municipal property taxes including those levied for the 
        payment of bonds and judgments and interest on them. 
           Sec. 17.  [REPEALER.] 
           Minnesota Statutes 1998, section 473.252, subdivisions 4 
        and 5, are repealed. 
           Sec. 18.  [EFFECTIVE DATE.] 
           Sections 3 to 6 and 10 are effective for taxes levied in 
        1999, and payable in 2000.  Section 7 is effective the day 
        following final enactment for taxes levied in 1999 and 
        thereafter.  Sections 8 and 17 are effective for taxes levied in 
        1999, payable in 2000, and thereafter.  
           The .0015 percent of taxable market value levy described in 
        section 9, paragraph (c), is effective for the cities of Cook 
        and Orr and the counties of St. Louis and Koochiching for 
        affected parts of those counties on January 1, 2000, to be 
        requested in the year 2000, with the first payment to be 
        received in 2001. 
                                   ARTICLE 7 
                                 SPECIAL TAXES
           Section 1.  Minnesota Statutes 1998, section 60A.19, 
        subdivision 6, is amended to read: 
           Subd. 6.  [RETALIATORY PROVISIONS.] (1) When by the laws of 
        any other state or country any taxes, fines, deposits, 
        penalties, licenses, or fees, other than assessments made by an 
        insurance guaranty association or similar organization, in 
        addition to or in excess of those imposed by the laws of this 
        state upon foreign insurance companies and their agents doing 
        business in this state, other than assessments by an insurance 
        guaranty association or similar organization organized under the 
        laws of this state, are imposed on insurance companies of this 
        state and their agents doing business in that state or country, 
        or when any conditions precedent to the right to do business in 
        that state are imposed by the laws thereof, beyond those imposed 
        upon these foreign companies by the laws of this state, the same 
        taxes, fines, deposits, penalties, licenses, fees, and 
        conditions precedent shall be imposed upon every similar 
        insurance company of that state or country and their agents 
        doing or applying to do business in this state so long as these 
        foreign laws remain in force.  Special purpose obligations or 
        assessments, including assessments by an insurance guaranty 
        association, joint underwriting association or similar 
        organization, or assessments imposed in connection with 
        particular kinds of insurance, are not taxes, licenses, or fees 
        as these terms are used in this section. 
           (2) In the event that a domestic insurance company, after 
        complying with all reasonable laws and rulings of any other 
        state or country, is refused permission by that state or country 
        to transact business therein after the commissioner of commerce 
        of Minnesota has determined that that company is solvent and 
        properly managed and after the commissioner has so certified to 
        the proper authority of that other state or country, then, and 
        in every such case, the commissioner may forthwith suspend or 
        cancel the certificate of authority of every insurance company 
        organized under the laws of that other state or country to the 
        extent that it insures, or seeks to insure, in this state 
        against any of the risks or hazards which that domestic company 
        seeks to insure against in that other state or country.  Without 
        limiting the application of the foregoing provision, it is 
        hereby determined that any law or ruling of any other state or 
        country which prescribes to a Minnesota domestic insurance 
        company the premium rate or rates for life insurance issued or 
        to be issued outside that other state or country shall not be 
        reasonable. 
           (3) This section does not apply to insurance companies 
        organized or domiciled in a state or country, the laws of which 
        do not impose retaliatory taxes, fines, deposits, penalties, 
        licenses, or fees or which grant, on a reciprocal basis, 
        exemptions from retaliatory taxes, fines, deposits, penalties, 
        licenses, or fees to insurance companies domiciled in this state.
           Sec. 2.  Minnesota Statutes 1998, section 296A.16, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [UNDYED KEROSENE; REFUNDS.] Notwithstanding 
        subdivision 1, the commissioner shall allow a refund of the tax 
        paid on undyed kerosene used exclusively for a purpose other 
        than as fuel for a motor vehicle using the streets and 
        highways.  To obtain a refund, the person making the sale to an 
        end user must meet the Internal Revenue Service requirements for 
        sales from a blocked pump.  A claim for a refund may be filed as 
        provided in this section. 
           Sec. 3.  Minnesota Statutes 1998, section 296A.16, is 
        amended by adding a subdivision to read: 
           Subd. 4b.  [RACING GASOLINE; REFUNDS.] Notwithstanding 
        subdivision 1, the commissioner shall allow a licensed 
        distributor a refund of the tax paid on leaded gasoline of 110 
        octane or more that does not meet ASTM specification D4814 for 
        gasoline and that is sold in bulk for use in nonregistered motor 
        vehicles.  A claim for a refund may be filed as provided for in 
        this section. 
           Sec. 4.  Minnesota Statutes 1998, section 297E.01, is 
        amended by adding a subdivision to read: 
           Subd. 17a.  [BUSINESS DAY.] "Business day" means Monday 
        through Friday, excluding any holidays as defined in section 
        645.44. 
           Sec. 5.  Minnesota Statutes 1998, section 297E.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [IMPOSITION.] A tax is imposed on all 
        lawful gambling other than (1) pull-tabs purchased and placed 
        into inventory after January 1, 1987, pull-tab deals or games; 
        and (2) tipboards purchased and placed into inventory after June 
        30, 1988 tipboard deals or games; and (3) items listed in 
        section 297E.01, subdivision 8, clauses (4) and (5), at the rate 
        of 9.5 9 percent on the gross receipts as defined in section 
        297E.01, subdivision 8, less prizes actually paid.  The tax 
        imposed by this subdivision is in lieu of the tax imposed by 
        section 297A.02 and all local taxes and license fees except a 
        fee authorized under section 349.16, subdivision 8, or a tax 
        authorized under subdivision 5.  
           The tax imposed under this subdivision is payable by the 
        organization or party conducting, directly or indirectly, the 
        gambling.  
           Sec. 6.  Minnesota Statutes 1998, section 297E.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COLLECTION; DISPOSITION.] Taxes imposed by this 
        section other than in subdivision 4 are due and payable to the 
        commissioner when the gambling tax return is required to be 
        filed.  Taxes imposed by subdivision 4 are due and payable to 
        the commissioner on or before the last business day of the month 
        following the month in which the taxable sale was made.  Returns 
        covering the taxes imposed under this section must be filed with 
        the commissioner on or before the 20th day of the month 
        following the close of the previous calendar month.  The 
        commissioner may require that the returns be filed via magnetic 
        media or electronic data transfer.  The proceeds, along with the 
        revenue received from all license fees and other fees under 
        sections 349.11 to 349.191, 349.211, and 349.213, must be paid 
        to the state treasurer for deposit in the general fund. 
           Sec. 7.  Minnesota Statutes 1998, 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 1.9 1.8 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 1.9 1.8 percent of the face value of the unsold 
        pull-tab or tipboard tickets, provided that the refund or credit 
        will be 1.95 1.85 percent of the face value of the unsold 
        pull-tab or tipboard tickets for claims for a refund or credit 
        of taxes filed on the February 1999 2000 monthly return.  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. 8.  Minnesota Statutes 1998, section 297E.02, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
        imposed under subdivisions 1 and 4, a tax is imposed on the 
        combined receipts of the organization.  As used in this section, 
        "combined receipts" is the sum of the organization's gross 
        receipts from lawful gambling less gross receipts directly 
        derived from the conduct of bingo, raffles, and paddlewheels, as 
        defined in section 297E.01, subdivision 8, for the fiscal year.  
        The combined receipts of an organization are subject to a tax 
        computed according to the following schedule: 
           If the combined receipts for the          The tax is:
           fiscal year are:
           Not over $500,000                   zero
           Over $500,000, but not over
           $700,000                            1.9 1.8 percent of the 
                                               amount over $500,000, but 
                                               not over $700,000
           Over $700,000, but not over
           $900,000                            $3,800 $3,600 plus 3.8 
                                               3.6 percent of the amount 
                                               over $700,000, but 
                                               not over $900,000
           Over $900,000                       $11,400 $10,800 plus 5.7 
                                               5.4 percent of the
                                               amount over $900,000
           Sec. 9.  Minnesota Statutes 1998, section 297F.01, 
        subdivision 23, is amended to read: 
           Subd. 23.  [WHOLESALE PRICE.] "Wholesale price" means the 
        established price for which a manufacturer or person sells a 
        tobacco product to a distributor, exclusive of any discount or 
        other reduction. 
           Sec. 10.  Minnesota Statutes 1998, section 297F.17, 
        subdivision 6, is amended to read: 
           Subd. 6.  [TIME LIMIT FOR BAD DEBT DEDUCTION REFUND.] 
        Claims for refund must be filed with the commissioner within one 
        year of during the one-year period beginning with the timely 
        filing date of the taxpayer's federal income tax return 
        containing the bad debt deduction that is being claimed.  
        Claimants under this subdivision are subject to the notice 
        requirements of section 289A.38, subdivision 7. 
           Sec. 11.  Minnesota Statutes 1998, section 297H.05, is 
        amended to read: 
           297H.05 [SELF-HAULERS.] 
           (a) A self-hauler of mixed municipal solid waste shall pay 
        the tax to the operator of the waste management facility to 
        which the waste is delivered at the rate imposed under section 
        297H.03, based on the sales price of the waste management 
        services. 
           (b) A self-hauler of non-mixed-municipal solid waste shall 
        pay the tax to the operator of the waste management facility to 
        which the waste is delivered at the rate imposed under section 
        297H.04. 
           (c) The tax imposed on the self-hauler of 
        non-mixed-municipal solid waste may be based either on the 
        capacity of the container, the actual volume, or the 
        weight-to-volume conversion schedule in paragraph (d).  However, 
        the tax must be calculated by the operator using the same method 
        for calculating the tipping fee so that both are calculated 
        according to container capacity, actual volume, or weight. 
           (d) The weight-to-volume conversion schedule for: 
           (1) construction debris as defined in section 115A.03, 
        subdivision 7, is one ton equals 3.33 cubic yards, or $2 per 
        ton; 
           (2) industrial waste as defined in section 115A.03, 
        subdivision 13a, is equal to 60 cents per cubic yard.  The 
        commissioner of revenue, after consultation with the 
        commissioner of the pollution control agency, shall determine, 
        and may publish by notice, a conversion schedule for various 
        industrial wastes; and 
           (3) infectious waste as defined in section 116.76, 
        subdivision 12, and pathological waste as defined in section 
        116.76, subdivision 14, is 150 pounds equals one cubic yard, or 
        60 cents per 150 pounds. 
           (e) For mixed municipal solid waste the tax is imposed upon 
        the difference between the market price and the tip fee at a 
        processing or disposal facility if the tip fee is less than the 
        market price and the political subdivision subsidizes the cost 
        of service at the facility.  The political subdivision is liable 
        for the tax. 
           Sec. 12.  Minnesota Statutes 1998, section 297H.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MATERIALS.] The tax is not imposed upon charges 
        to generators of mixed municipal solid waste or upon the volume 
        of non-mixed-municipal solid waste for waste management services 
        to manage the following materials: 
           (1) mixed municipal solid waste and non-mixed-municipal 
        solid waste generated outside of Minnesota; 
           (2) recyclable materials that are separated for recycling 
        by the generator, collected separately from other waste, and 
        recycled, to the extent the price of the service for handling 
        recyclable material is separately itemized; 
           (3) recyclable non-mixed-municipal solid waste that is 
        separated for recycling by the generator, collected separately 
        from other waste, delivered to a waste facility for the purpose 
        of recycling, and recycled; 
           (4) industrial waste, when it is transported to a facility 
        owned and operated by the same person that generated it; 
           (5) mixed municipal solid waste from a recycling facility 
        that separates or processes recyclable materials and reduces the 
        volume of the waste by at least 85 percent, provided that the 
        exempted waste is managed separately from other waste; 
           (6) recyclable materials that are separated from mixed 
        municipal solid waste by the generator, collected and delivered 
        to a waste facility that recycles at least 85 percent of its 
        waste, and are collected with mixed municipal solid waste that 
        is segregated in leakproof bags, provided that the mixed 
        municipal solid waste does not exceed five percent of the total 
        weight of the materials delivered to the facility and is 
        ultimately delivered to a waste facility identified as a 
        preferred waste management facility in county solid waste plans 
        under section 115A.46; 
           (7) through December 31, 2002, source-separated compostable 
        waste, if the waste is delivered to a facility exempted as 
        described in this clause.  To initially qualify for an 
        exemption, a facility must apply for an exemption in its 
        application for a new or amended solid waste permit to the 
        pollution control agency.  The first time a facility applies to 
        the agency it must certify in its application that it will 
        comply with the criteria in items (i) to (v) and the 
        commissioner of the agency shall so certify to the commissioner 
        of revenue who must grant the exemption.  For each subsequent 
        calendar year, by October 1 of the preceding year, the facility 
        must apply to the agency for certification to renew its 
        exemption for the following year.  The application must be filed 
        according to the procedures of, and contain the information 
        required by, the agency.  The commissioner of revenue shall 
        grant the exemption if the commissioner of the pollution control 
        agency finds and certifies to the commissioner of revenue that 
        based on an evaluation of the composition of incoming waste and 
        residuals and the quality and use of the product: 
           (i) generators separate materials at the source; 
           (ii) the separation is performed in a manner appropriate to 
        the technology specific to the facility that: 
           (A) maximizes the quality of the product; 
           (B) minimizes the toxicity and quantity of residuals; and 
           (C) provides an opportunity for significant improvement in 
        the environmental efficiency of the operation; 
           (iii) the operator of the facility educates generators, in 
        coordination with each county using the facility, about 
        separating the waste to maximize the quality of the waste stream 
        for technology specific to the facility; 
           (iv) process residuals do not exceed 15 percent of the 
        weight of the total material delivered to the facility; and 
           (v) the final product is accepted for use; and 
           (8) waste and waste by-products for which the tax has been 
        paid; and 
           (9) daily cover for landfills that has been approved in 
        writing by the Minnesota pollution control agency.  
           Sec. 13.  [EFFECTIVE DATES.] 
           Section 1 is effective for taxable years beginning after 
        December 31, 1999.  Section 2 is effective retroactively for 
        sales made after June 30, 1998.  Section 3 is effective 
        retroactively for sales made after January 31, 1999.  Section 4 
        is effective August 1, 1999.  Sections 5, 7, and 8 are effective 
        July 1, 1999.  Section 6 is effective for taxes first becoming 
        due on or after August 1, 1999.  Sections 9 and 12 are effective 
        the day following final enactment.  Section 10 is effective for 
        refund claims filed on or after July 1, 1999.  Section 11 is 
        effective for services provided on or after July 1, 1999. 
                                   ARTICLE 8 
                              MINNESOTACARE TAXES 
           Section 1.  Minnesota Statutes 1998, section 295.50, 
        subdivision 4, is amended to read: 
           Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
        provider" means: 
           (1) a person whose health care occupation is regulated or 
        required to be regulated by the state of Minnesota 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, laboratory, diagnostic 
        or therapeutic services; 
           (2) a person who provides goods and services not listed in 
        clause (1) that qualify for reimbursement under the medical 
        assistance program provided under chapter 256B; 
           (3) a staff model health plan company; 
           (4) an ambulance service required to be licensed; or 
           (5) a person who sells or repairs hearing aids and related 
        equipment or prescription eyewear. 
           (b) Health care provider does not include:  (1) hospitals; 
        medical supplies distributors, except as specified under 
        paragraph (a), clause (5); 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 157.17 
        to provide supportive services or health supervision services; 
        adult foster homes as defined in Minnesota Rules, part 
        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.; 
           (c) For purposes of this subdivision, "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) home health agencies as defined in Minnesota Rules, 
        part 9505.0175, subpart 15; a person providing personal care 
        services and supervision of personal care services as defined in 
        Minnesota Rules, part 9505.0335; a person providing private duty 
        nursing services as defined in Minnesota Rules, part 9505.0360; 
        and home care providers required to be licensed under chapter 
        144A; 
           (3) a person who employs health care providers solely for 
        the purpose of providing patient services to its employees; and 
           (4) an educational institution that employs health care 
        providers solely for the purpose of providing patient services 
        to its students if the institution does not receive fee for 
        service payments or payments for extended coverage. 
           Sec. 2.  Minnesota Statutes 1998, section 295.52, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TAX REDUCTION.] (a) Notwithstanding subdivisions 
        1, 1a, 2, 3, and 4, the tax imposed under this section equals 
        for calendar years 1998 and, 1999 shall be equal to, 2000, and 
        2001, 1.5 percent of the gross revenues received on or after 
        January 1, 1998, and before January 1, 2000.  The commissioner 
        shall extend the reduced tax rate of 1.5 percent for gross 
        revenues received on or after January 1, 2000, and before 
        January 1, 2002, if the commissioner of finance determines that 
        the health care access fund structural balance projected for 
        fiscal year 2001 will remain positive, prior to any increase of 
        the one percent premium tax under section 60A.15, subdivision 1, 
        paragraph (h), and prior to any tax expenditures related to the 
        increase in the maximum tax credit for research expenses under 
        section 295.53, subdivision 4a, as amended by Laws 1997, chapter 
        225 2002. 
           Sec. 3.  Minnesota Statutes 1998, 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), or (13); 
           (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), or (13); 
           (6) amounts paid for legend drugs, other than nutritional 
        products, to a wholesale drug distributor who is subject to tax 
        under section 295.52, subdivision 3, reduced by reimbursements 
        received for legend drugs under clauses (1), (2), (7), and (8); 
           (7) payments received under the general assistance medical 
        care program including payments received directly from the 
        government or from a prepaid plan; 
           (8) payments received for providing services under the 
        MinnesotaCare program including payments received directly from 
        the government or from a prepaid plan and enrollee deductibles, 
        coinsurance, and copayments.  For purposes of this clause, 
        coinsurance means the portion of payment that the enrollee is 
        required to pay for the covered service; 
           (9) payments received by a health care provider or the 
        wholly owned subsidiary of a health care provider for care 
        provided outside Minnesota 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 health care provider for 
        hearing aids and related equipment or prescription eyewear 
        delivered outside of Minnesota; 
           (18) payments received by a post-secondary an educational 
        institution from student tuition, student activity fees, health 
        care service fees, government appropriations, donations, or 
        grants.  Fee for service payments and payments for extended 
        coverage are taxable; and 
           (19) payments received for services provided by:  assisted 
        living programs and congregate housing programs; 
           (20) payments received from nursing homes licensed under 
        chapter 144A for services provided to a nursing home; and 
           (21) payments received for examinations for purposes of 
        utilization reviews, insurance claims or eligibility, 
        litigation, and employment, including reviews of medical records 
        for those purposes. 
           (b) Payments received by wholesale drug distributors for 
        legend drugs sold directly to veterinarians or veterinary bulk 
        purchasing organizations are excluded from the gross revenues 
        subject to the wholesale drug distributor tax under sections 
        295.50 to 295.59. 
           Sec. 4.  Minnesota Statutes 1998, section 295.55, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 
        Each hospital or surgical center must make estimated payments of 
        the taxes for the calendar year in monthly installments to the 
        commissioner within 15 days after the end of the month. 
           (b) Estimated tax payments are not required of hospitals or 
        surgical centers if:  (1) the tax for the current calendar year 
        is less than $500; or (2) the tax for the previous calendar year 
        is less than $500, if the taxpayer had a tax liability and was 
        doing business the entire year; or (3) if a hospital has been 
        allowed a grant under section 144.1484, subdivision 2, for the 
        year. 
           (c) Underpayment of estimated installments bear interest at 
        the rate specified in section 270.75, from the due date of the 
        payment until paid or until the due date of the annual return at 
        the rate specified in section 270.75 whichever comes first.  An 
        underpayment of an estimated installment is the difference 
        between the amount paid and the lesser of (1) 90 percent of 
        one-twelfth of the tax for the calendar year or (2) one-twelfth 
        of the total tax for the actual gross revenues received during 
        the month previous calendar year if the taxpayer had a tax 
        liability and was doing business the entire year. 
           Sec. 5.  Minnesota Statutes 1998, section 295.55, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each 
        taxpayer, other than a hospital or surgical center, must make 
        estimated payments of the taxes for the calendar year in 
        quarterly installments to the commissioner by April 15, July 15, 
        October 15, and January 15 of the following calendar year. 
           (b) Estimated tax payments are not required if:  (1) the 
        tax for the current calendar year is less than $500; or (2) the 
        tax for the previous calendar year is less than $500, if the 
        taxpayer had a tax liability and was doing business the entire 
        year. 
           (c) Underpayment of estimated installments bear interest at 
        the rate specified in section 270.75, from the due date of the 
        payment until paid or until the due date of the annual return at 
        the rate specified in section 270.75 whichever comes first.  An 
        underpayment of an estimated installment is the difference 
        between the amount paid and the lesser of (1) 90 percent of 
        one-quarter of the tax for the calendar year or (2) one-quarter 
        of the total tax for the actual gross revenues received during 
        the quarter previous calendar year if the taxpayer had a tax 
        liability and was doing business the entire year. 
           Sec. 6.  Minnesota Statutes 1998, section 295.57, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [SAMPLING TECHNIQUES.] The commissioner may use 
        statistical or other sampling techniques consistent with 
        generally accepted auditing standards in examining returns or 
        records and making assessments. 
           Sec. 7.  [HEALTH CARE ACCESS FUND TRANSFER.] 
           $27,000,000 is appropriated for fiscal year 2000; 
        $27,000,000 is appropriated for fiscal year 2001; and 
        $30,900,000 is appropriated for fiscal year 2002 from the 
        general fund to the commissioner of finance for deposit in the 
        health care access fund under Minnesota Statutes, section 
        16A.724.* (The preceding section was vetoed by the governor.) 
           Sec. 8.  [EFFECTIVE DATE.] 
           The provisions of section 1, striking paragraph (c), and 
        section 3, clause (21), are effective for services provided 
        after December 31, 1998.  The rest of section 1, the rest of 
        section 3 and sections 4 and 5 are effective for payments 
        received on or after January 1, 2000.  Section 6 is effective 
        the day following final enactment. 
                                   ARTICLE 9 
                               TACONITE TAXATION 
           Section 1.  Minnesota Statutes 1998, section 298.24, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) For concentrate produced in 1997 and 
        1998 1999, 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 $2.141 per gross ton of 
        merchantable iron ore concentrate produced therefrom.  
           (b) For concentrates produced in 1999 2000 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.  "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) On concentrates produced in 1997 and thereafter, an 
        additional tax is imposed equal to three cents per gross ton of 
        merchantable iron ore concentrate for each one percent that the 
        iron content of the product exceeds 72 percent, when dried at 
        212 degrees Fahrenheit. 
           (d) 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.  
           (e) If the tax or any part of the tax imposed by this 
        subdivision is held to be unconstitutional, a tax of $2.141 per 
        gross ton of merchantable iron ore concentrate produced shall be 
        imposed.  
           (f) 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. 
           (g)(1) Notwithstanding any other provision of this 
        subdivision, for the first two years of a plant's production of 
        direct reduced ore, no tax is imposed under this section.  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.  
        For the third year of a plant's production of direct reduced 
        ore, the rate to be applied to direct reduced ore is 25 percent 
        of the rate otherwise determined under this subdivision.  For 
        the fourth such production year, the rate is 50 percent of the 
        rate otherwise determined under this subdivision; for the fifth 
        such production year, the rate is 75 percent of the rate 
        otherwise determined under this subdivision; and for all 
        subsequent production years, the full rate is imposed. 
           (2) Subject to clause (1), 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. 2.  Minnesota Statutes 1998, section 298.28, 
        subdivision 9a, is amended to read: 
           Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
        cents per ton for distributions in 1996, 1998, 1999, and 2000 
        and 20.4 cents per ton for distributions in 1997 shall, 2001, 
        and 2002 must 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. 3.  Minnesota Statutes 1998, section 298.28, 
        subdivision 9b, is amended to read: 
           Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five cents per 
        ton for distributions in 1998, 1999, and 2000 shall, 2001, and 
        2002 must be paid to the taconite environmental fund for use 
        under section 298.2961.  No distribution may be made under this 
        paragraph in any year in which total industry production falls 
        below 30,000,000 tons. 
           Sec. 4.  Minnesota Statutes 1998, section 298.296, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TEMPORARY LOAN AUTHORITY.] (a) The board may 
        recommend that up to $7,500,000 from the corpus of the trust may 
        be used for loans, grants, or equity investments as provided in 
        this subdivision.  The money would be available for loans for 
        construction and equipping of facilities constituting (1) a 
        value added iron products plant, which may be either a new plant 
        or a facility incorporated into an existing plant that produces 
        iron upgraded to a minimum of 75 percent iron content or any 
        iron alloy with a total minimum metallic content of 90 percent; 
        or (2) a new mine or minerals processing plant for any mineral 
        subject to the net proceeds tax imposed under section 298.015.  
        A loan under this paragraph may not exceed $5,000,000 for any 
        facility.  
           (b) Additionally, the board must reserve the first 
        $2,000,000 of the net interest, dividends, and earnings arising 
        from the investment of the trust after June 30, 1996, to be used 
        for additional grants for the purposes set forth in paragraph 
        (a).  This amount must be reserved until it is used for the 
        grants or until June 30, 1999, whichever is earlier. 
           (c) Additionally, the board may recommend that up to 
        $5,500,000 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 June 30, 1999. 
           Sec. 5.  [MINNESOTA MINERALS 21ST CENTURY FUND 
        APPROPRIATION.] 
           Subdivision 1.  [APPROPRIATION.] $20,000,000 is 
        appropriated in fiscal year 2000 from the general fund to the 
        Minnesota minerals 21st century fund, if a bill styled as H.F. 
        No. 2390 is enacted in 1999 and creates such a fund.  
        Notwithstanding any other law enacted during the 1999 regular 
        legislative session, the maximum total appropriation authorized 
        for the purposes of the Minnesota minerals 21st century fund 
        under all laws enacted during the 1999 regular legislative 
        session is $20,000,000.  Any amounts appropriated in any other 
        law enacted during the 1999 legislative session that would cause 
        the appropriation to exceed $20,000,000 are canceled.  This 
        limitation does not apply to the appropriation transfer 
        contained in 1999 H.F. No. 2390, article 2, section 71. 
           Subd. 2.  [MATCHING REQUIREMENT.] If a bill styled as H.F. 
        No. 2390 is enacted in 1999 and it provides for creation of the 
        Minnesota minerals 21st century fund, the commissioner of the 
        iron range resources and rehabilitation board shall, upon the 
        recommendation of the board, match the funds allocated under 
        subdivision 1 to the extent they are used for a loan or equity 
        investment meeting the requirements of the provision creating 
        the Minnesota minerals 21st century fund within H.F. No. 2390.  
        Notwithstanding Minnesota Statutes, section 645.33, this 
        subdivision supersedes any contrary provisions of H.F. No. 2390 
        that is enacted in 1999. 
                                   ARTICLE 10 
                            TAX INCREMENT FINANCING 
           Section 1.  Minnesota Statutes 1998, 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: 
           (A) for an economic development district, a housing 
        district, or a renewal and renovation district, ten percent; 
           (B) for a redevelopment district, a housing district, a 
        mined underground space district, a hazardous substance 
        subdistrict, or a soils condition district, 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. 
           (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. 2.  Minnesota Statutes 1998, section 469.176, 
        subdivision 4g, is amended to read: 
           Subd. 4g.  [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 
        revenues shall not be used to circumvent existing levy limit 
        law.  No revenues derived from tax increment from any district, 
        whether certified before or after August 1, 1979, shall be used 
        for the acquisition, construction, renovation, operation, or 
        maintenance of a building to be used primarily and regularly for 
        conducting the business of a municipality, county, school 
        district, or any other local unit of government or the state or 
        federal government or for a commons area used as a public park, 
        or a facility used for social, recreational, or conference 
        purposes.  This provision shall not prohibit the use of revenues 
        derived from tax increments for the construction or renovation 
        of a parking structure, a commons area used as a public park, or 
        a facility used for social, recreational, or conference purposes 
        and not primarily for conducting the business of the 
        municipality or of a privately owned facility for conference 
        purposes.  
           (b) If any publicly owned facility used for social, 
        recreational, or conference purposes and financed in whole or in 
        part from revenues derived from a district is operated or 
        managed by an entity other than the authority, the operating and 
        management policies of the facility must be approved by the 
        governing body of the authority. 
           (c)(1) Tax increments may not be used to pay for the cost 
        of public improvements, equipment, or other items, if: 
           (i) the improvements, equipment, or other items are located 
        outside of the area of the tax increment financing district from 
        which the increments were collected; and 
           (ii) the improvements, equipment, or items that (i) 
        primarily serve a decorative or aesthetic purpose, or (ii) serve 
        a functional purpose, but their cost is increased by more than 
        100 percent as a result of the selection of materials, design, 
        or type as compared with more commonly used materials, designs, 
        or types for similar improvements, equipment, or items. 
           (2) The provisions of this paragraph do not apply to 
        expenditures related to the rehabilitation of historic 
        structures that are: 
           (i) individually listed on the National Register of 
        Historic Places; or 
           (ii) a contributing element to a historic district listed 
        on the National Register of Historic Places. 
           Sec. 3.  Minnesota Statutes 1998, section 469.1763, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [POOLING PERMITTED FOR DEFICITS.] (a) This 
        subdivision applies only to districts for which the request for 
        certification was made before June 2, 1997. 
           (b) The municipality for the district may transfer 
        available increments from another tax increment financing 
        district located in the municipality, if the transfer is 
        necessary to eliminate a deficit in the district to which the 
        increments are transferred.  A deficit in the district for 
        purposes of this subdivision means the lesser of the following 
        two amounts: 
           (1)(i) the amount due during the calendar year to pay 
        preexisting obligations of the district; minus 
           (ii) the total increments to be collected from properties 
        located within the district that are available for the calendar 
        year, plus 
           (iii) total increments from properties located in other 
        districts in the municipality that are available to be used to 
        meet the district's obligations under this section, excluding 
        this subdivision, or other provisions of law (but excluding a 
        special tax under section 469.1791 and the grant program under 
        Laws 1997, chapter 231, article 1, section 19); or 
           (2) the reduction in increments collected from properties 
        located in the district for the calendar year as a result of the 
        changes in class rates in Laws 1997, chapter 231, article 1; 
        Laws 1998, chapter 389, article 2; and this act. 
           (c) A preexisting obligation means bonds issued and sold 
        before June 2, 1997, and bonds issued to refund such bonds or to 
        reimburse expenditures made in conjunction with a signed 
        contractual agreement entered into before June 2, 1997, to the 
        extent that the bonds are secured by a pledge of increments from 
        the tax increment financing district.  For purposes of this 
        subdivision, bonds exclude an obligation to reimburse or pay a 
        developer or owner of property located in the district for 
        amounts incurred or paid by the developer or owner. 
           (d) The municipality may require a development authority, 
        other than a seaway port authority, to transfer available 
        increments for any of its tax increment financing districts in 
        the municipality to make up an insufficiency in another district 
        in the municipality, regardless of whether the district was 
        established by the development authority or another development 
        authority.  This authority applies notwithstanding any law to 
        the contrary, but applies only to a development authority that: 
           (1) was established by the municipality; or 
           (2) the governing body of which is appointed, in whole or 
        part, by the municipality or an officer of the municipality or 
        which consists, in whole or part, of members of the governing 
        body of the municipality. 
           (e) The authority under this subdivision to spend tax 
        increments outside of the area of the district from which the 
        tax increments were collected: 
           (1) may only be exercised after obtaining approval of the 
        use of the increments, in writing, by the commissioner of 
        revenue; 
           (2) is an exception to the restrictions under section 
        469.176, subdivision 4i, and the other provisions of this 
        section, and the percentage restrictions under subdivision 2 
        must be calculated after deducting increments spent under this 
        subdivision from the total increments for the district; and 
           (3) applies notwithstanding the provisions of the tax 
        increment financing act in effect for districts for which the 
        request for certification was made before June 30, 1982, or any 
        other law to the contrary. 
           Sec. 4.  [469.1764] [PRE-1982 DISTRICTS; POOLING RULES.] 
           Subdivision 1.  [SCOPE; APPLICATION.] (a) This section 
        applies to a tax increment financing district or area added to a 
        district, if the request for certification of the district or 
        the area added to the district was made after July 31, 1979, and 
        before July 1, 1982. 
           (b) This section, section 469.1763, subdivision 6, and any 
        special law applying to the district are the exclusive authority 
        to spend tax increments on activities located outside of the 
        geographic area of a tax increment financing district that is 
        subject to this section. 
           (c) This section does not apply to increments from a 
        district that is subject to the provisions of this section, if: 
           (1) the district was decertified before the enactment of 
        this section and all increments spent on activities located 
        outside of the geographic area of the district were repaid and 
        distributed as excess increments under section 469.176, 
        subdivision 2; or 
           (2) the use of increments on activities located outside of 
        the geographic area of the district consists solely of payment 
        of debt service on bonds under section 469.129, subdivision 2, 
        and any bonds issued to refund bonds issued under that 
        subdivision.  
           Subd. 2.  [STATE AUDITOR NOTIFICATION.] By August 1, 1999, 
        the state auditor shall notify in writing each authority for 
        which the auditor has records that the authority has a district 
        subject to this section. 
           Subd. 3.  [RATIFICATION OF PAST SPENDING.] (a) The 
        following expenditures of increments on activities located 
        outside of the geographic area of a district subject to this 
        section are permitted: 
           (1) expenditures made before the earlier of (i) 
        notification by the state auditor or (ii) December 31, 1999; and 
           (2) expenditures to pay preexisting outside district 
        obligations. 
           Subd. 4.  [DECERTIFICATION REQUIRED.] (a) The provisions of 
        this subdivision apply to any tax increment financing district 
        subject to this section, if increments from the district were 
        used on activities located outside of the geographic area of the 
        district. 
           (b) After December 31, 1999, any tax increments received by 
        the authority from a district subject to this subdivision may be 
        expended only to pay:  
           (1) preexisting in-district obligations; 
           (2) preexisting outside district obligations; and 
           (3) administrative expenses.  
           After all preexisting obligations have been paid or 
        defeased, the district must be decertified and any remaining 
        increments distributed as excess increments under section 
        469.176, subdivision 2. 
           Subd. 5.  [DEFINITIONS.] (a) "Notification by the state 
        auditor" means the receipt by the authority or the municipality 
        of the final written notification from the state auditor that 
        its expenditures of increments from the district on activities 
        located outside of the geographic area of the district were not 
        in compliance with state law. 
           (b) "Preexisting outside district obligations" means: 
           (1) bonds secured by increments from a district subject to 
        this section and used to finance activities outside the 
        geographic area of the district, if the bonds were issued and 
        the pledge of increment was made before the earlier of (i) 
        notification by the state auditor, or (ii) April 1, 1999; 
           (2) bonds issued to refund bonds qualifying under clause 
        (1), if the refunding bonds do not increase the total amount of 
        tax increments required to pay the refunded bonds; and 
           (3) binding written agreements secured by the increments 
        from the district subject to this section and used to finance 
        activities outside the geographic area of the district, if the 
        agreement was entered before the earlier of (i) notification by 
        the state auditor or (ii) May 1, 1999. 
           (c) "Preexisting in-district obligations" means: 
           (1) bonds secured by increments from a district subject to 
        this section and not used to finance activities outside of the 
        geographic area of the district, if the bonds were issued and 
        the pledge of increments was made before April 1, 1999; 
           (2) bonds issued to refund bonds qualifying under clause 
        (1), if the refunding bonds do not increase the total amount of 
        tax increments required to pay the refunded bonds; and 
           (3) binding written agreements secured by increments from a 
        district subject to this section and not used to finance 
        activities outside of the geographic area of the district, if 
        the agreements were entered into and the pledge of increments 
        was made before June 30, 1999. 
           Sec. 5.  Minnesota Statutes 1998, section 469.1771, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ENFORCEMENT.] (a) The owner of taxable 
        property located in the city, town, school district, or county 
        in which the tax increment financing district is located may 
        bring suit for equitable relief or for damages, as provided in 
        subdivisions 3 and 4, arising out of a failure of a municipality 
        or authority to comply with the provisions of sections 469.174 
        to 469.179, or related provisions of this chapter.  The 
        prevailing party in a suit filed under the preceding sentence is 
        entitled to costs, including reasonable attorney fees. 
           (b) The state auditor may examine and audit political 
        subdivisions' use of tax increment financing.  Without previous 
        notice, the state auditor may examine or audit accounts and 
        records on a random basis as the auditor deems to be in the 
        public interest.  If the state auditor finds evidence that an 
        authority or municipality has violated a provision of the law 
        for which a remedy is provided under this section, the state 
        auditor shall forward the relevant information to the county 
        attorney.  The county attorney may bring an action to enforce 
        the provisions of sections 469.174 to 469.179 or related 
        provisions of this chapter, for matters referred by the state 
        auditor or on behalf of the county.  If the county attorney 
        determines not to bring an action or if the county attorney has 
        not brought an action within 12 months after receipt of the 
        initial notification by the state auditor of the violation, the 
        county attorney shall notify the state auditor in writing. 
           (c) If the state auditor finds an authority is not in 
        compliance with sections 469.174 to 469.179 or related 
        provisions of law, the auditor shall notify the governing body 
        of the municipality that approved the tax increment financing 
        district of its findings.  The governing body of the 
        municipality must respond in writing to the state auditor within 
        60 days after receiving the notification.  Its written response 
        must state whether the municipality accepts, in whole or part, 
        the auditor's findings.  If the municipality does not accept the 
        findings, the statement must indicate the basis for its 
        disagreement.  The state auditor shall annually summarize the 
        responses it receives under this section and send the summary 
        and copies of the responses to the chairs of the committees of 
        the legislature with jurisdiction over tax increment financing. 
           (d) The state auditor shall notify the attorney general in 
        writing and provide supporting materials for a violation found 
        by the auditor, if the: 
           (1) auditor receives notification from the county attorney 
        under paragraph (b) or receives no notification for a 12-month 
        period after initially notifying the county attorney and the 
        state auditor confirms with the county attorney or the 
        municipality that no action has been brought regarding the 
        matter; and 
           (2) municipality or development authority have not 
        eliminated or resolved the violation to the satisfaction of the 
        state auditor. 
        The auditor shall provide the municipality and development 
        authority a copy of the notification sent to the attorney 
        general. 
           Sec. 6.  Minnesota Statutes 1998, section 469.1771, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [ACTION TO SUSPEND TIF AUTHORITY.] (a) Upon 
        receipt of a notification from the state auditor under 
        subdivision 1, paragraph (d), the attorney general shall review 
        the materials submitted by the auditor and any materials 
        submitted by the municipality and development authority.  If the 
        attorney general finds that the municipality or development 
        authority violated a provision of the law enumerated in 
        subdivision 1 and that the violation was substantial, the 
        attorney general shall file a petition in the tax court to 
        suspend the authority of the municipality and development 
        authority to exercise tax increment financing powers.  
           (b) Before filing a petition under this subdivision, the 
        attorney shall attempt to resolve the matter using appropriate 
        alternative dispute resolution procedures, such as those under 
        sections 572.31 to 572.40. 
           (c) If the tax court finds that the municipality or 
        development authority failed to comply with the law and that the 
        noncompliance was substantial, the court shall suspend the 
        authority of the municipality or development to exercise tax 
        increment financing powers.  The court shall set the period of 
        the suspension for a period not to exceed five years.  In 
        determining the length of the suspension, the court may consider:
           (1) the substantiality of the violation or violations; 
           (2) the dollar amount of the violation or violations; 
           (3) the sophistication of the municipality or development 
        authority; 
           (4) the extent to which the municipality or development 
        authority violated a clear and unambiguous requirement of the 
        law; 
           (5) whether the municipality or development authority 
        continued to violate the law after receiving notification from 
        the state auditor that it was not in compliance with the law; 
           (6) the extent to which the municipality or development 
        authority engaged in a pattern of violations; and 
           (7) any other factors the court determines are relevant to 
        whether the municipality or development authority's authority to 
        exercise tax increment financing powers should be suspended. 
           (d) For purposes of this subdivision, the exercise of tax 
        increment financing powers means: 
           (1) the authority to request certification of a new tax 
        increment financing district or the addition of area to an 
        existing tax increment financing district; 
           (2) the authority to issue bonds under section 469.178; 
           (3) the authority to amend a tax increment financing plan 
        to authorize new activities or expenditures.  
           Sec. 7.  Minnesota Statutes 1998, section 469.1791, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city 
        may establish a special taxing district within a tax increment 
        financing district under this section only if the conditions 
        under paragraphs (b) and (c) are met or if the city elects to 
        exercise the authority under paragraph (d). 
           (b) The city has determined that: 
           (1) total tax increments from the district, including 
        unspent increments from previous years and increments 
        transferred under paragraph (c), will be insufficient to pay the 
        amounts due in a year on preexisting obligations; and 
           (2) this insufficiency of increments resulted from the 
        reduction in property tax class rates enacted in the 1997 and 
        1998 legislative sessions. 
           (c) The city has agreed to transfer any available 
        increments from other tax increment financing districts in the 
        city to pay the preexisting obligations of the district under 
        section 469.1763, subdivision 6.  This requirement does not 
        apply to any available increments of a qualified housing 
        district, as defined in section 273.1399, subdivision 
        1.  Notwithstanding any law to the contrary, the city may 
        require a development authority to transfer available increments 
        for any of its tax increment financing districts in the city to 
        make up an insufficiency in another district in the city, 
        regardless of whether the district was established by the 
        development authority or another development authority.  
        Notwithstanding any law to the contrary, increments transferred 
        under this authority must be spent to pay preexisting 
        obligations.  "Development authority" for this purpose means any 
        authority as defined in section 469.174, subdivision 2. 
           (d) If a tax increment financing district does not qualify 
        under paragraphs (b) and (c), the governing body may elect to 
        establish a special taxing district under this section.  If the 
        city elects to exercise this authority, increments from the tax 
        increment financing district and the proceeds of the tax imposed 
        under this section may only be used to pay preexisting 
        obligations and reasonable administrative expenses of the 
        authority for the tax increment financing district.  The tax 
        increment financing district must be decertified when all 
        preexisting obligations have been paid.  
           Sec. 8.  Minnesota Statutes 1998, section 469.1813, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY.] The governing body of a 
        political subdivision may grant an abatement of the taxes 
        imposed by the political subdivision on a parcel of property, or 
        defer the payments of the taxes and abate the interest and 
        penalty that otherwise would apply, if: 
           (a) it expects the benefits to the political subdivision of 
        the proposed abatement agreement to at least equal the costs to 
        the political subdivision of the proposed agreement; and 
           (b) it finds that doing so is in the public interest 
        because it will: 
           (1) increase or preserve tax base; 
           (2) provide employment opportunities in the political 
        subdivision; 
           (3) provide or help acquire or construct public facilities; 
           (4) help redevelop or renew blighted areas; or 
           (5) help provide access to services for residents of the 
        political subdivision; or 
           (6) finance or provide public infrastructure. 
           Sec. 9.  Minnesota Statutes 1998, section 469.1813, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [USE OF TERM.] As used in this section and 
        sections 469.1814 and 469.1815, "abatement" includes a deferral 
        of taxes with abatement of interest and penalties unless the 
        context indicates otherwise. 
           Sec. 10.  Minnesota Statutes 1998, section 469.1813, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ABATEMENT RESOLUTION.] (a) The governing body of 
        a political subdivision may grant an abatement only by adopting 
        an abatement resolution, specifying the terms of the abatement.  
        In the case of a town, the board of supervisors may approve the 
        abatement resolution.  The resolution must also include a 
        specific statement as to the nature and extent of the public 
        benefits which the governing body expects to result from the 
        agreement.  The resolution may provide that the political 
        subdivision will retain or transfer to another political 
        subdivision the abatement to pay for all or part of the cost of 
        acquisition or improvement of public infrastructure, whether or 
        not located on or adjacent to the parcel for which the tax is 
        abated.  The abatement may reduce all or part of the property 
        tax levied by amount for the political subdivision on the 
        parcel.  A political subdivision's maximum annual amount for a 
        parcel equals its total local tax rate multiplied by the total 
        net tax capacity of the parcel. 
           (b) The political subdivision may limit the abatement: 
           (1) to a specific dollar amount per year or in total; 
           (2) to the increase in property taxes resulting from 
        improvement of the property; 
           (3) to the increases in property taxes resulting from 
        increases in the market value or tax capacity of the 
        property; or 
           (4) in any other manner the governing body of the 
        subdivision determines is appropriate; or 
           (5) to the interest and penalty that would otherwise be due 
        on taxes that are deferred. 
           (c) The political subdivision may not abate tax 
        attributable to the value of the land or the areawide tax under 
        chapter 276A or 473F, except as provided in this subdivision. 
           Sec. 11.  Minnesota Statutes 1998, section 469.1813, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [DEFERMENT PAYMENT SCHEDULE.] When the tax is 
        deferred and the interest and penalty abated, the political 
        subdivision must set a schedule for repayments.  The deferred 
        payment must be included with the current taxes due and payable 
        in the years the deferred payments are due and payable and must 
        be levied accordingly. 
           Sec. 12.  Minnesota Statutes 1998, section 469.1813, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SCHOOL DISTRICT ABATEMENT PROCEDURE ABATEMENTS.] 
        Notwithstanding the amounts in subdivision 2, a school district 
        that grants an abatement under this section must limit the 
        abatement for any property to not more than an amount equal to 
        the product of:  (1) the property's net tax capacity, and (2) 
        the difference between the district's total tax rate for that 
        year and one-half of the general education tax rate for that 
        year.  An abatement granted under this section is not an 
        abatement for purposes of state aid or local levy under sections 
        127A.40 to 127A.51. 
           Sec. 13.  Minnesota Statutes 1998, section 469.1813, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DURATION LIMIT.] (a) A political subdivision 
        other than a school district may grant an abatement for a period 
        no longer than ten years.  The subdivision may specify in the 
        abatement resolution a shorter duration.  If the resolution does 
        not specify a period of time, the abatement is for eight years.  
        If an abatement has been granted to a parcel of property and the 
        period of the abatement has expired, the political subdivision 
        that granted the abatement may not grant another abatement for 
        eight years after the expiration of the first abatement.  This 
        prohibition does not apply to improvements added after and not 
        subject to the first abatement. 
           (b) A school district may grant an abatement for only one 
        year at a time.  Once a school district has authorized an 
        abatement for a property, it may reauthorize the abatement in 
        any subsequent year for the next seven years, or nine years if 
        provided in the original abatement agreement.  This prohibition 
        does not apply to improvements added after and not subject to 
        the original abatement agreement. 
           Sec. 14.  Minnesota Statutes 1998, section 469.1813, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [CONSENT OF PROPERTY OWNER NOT REQUIRED.] A 
        political subdivision may abate the taxes on a parcel under 
        sections 469.1812 to 469.1815 without obtaining the consent of 
        the property owner. 
           Sec. 15.  Minnesota Statutes 1998, section 469.1815, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROPERTY TAXES; ABATEMENT PAYMENT.] The total 
        property taxes shall be levied on the property and shall be due 
        and payable to the county at the times provided under section 
        279.01.  The political subdivision will pay the abatement to the 
        property owner, lessee, or a representative of the 
        bondholders or will retain the abatement to pay public 
        infrastructure costs, as provided by the abatement resolution. 
           Sec. 16.  Laws 1997, chapter 231, article 1, section 19, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TIF GRANTS.] (a) The commissioner of 
        revenue shall pay grants to municipalities for deficits in tax 
        increment financing districts caused by the changes in class 
        rates under this act.  Municipalities must submit applications 
        for the grants in a form prescribed by the commissioner by no 
        later than March August 1 for grants payable during the calendar 
        year.  The maximum grant equals the lesser of: 
           (1) for taxes payable in the year before the grant is paid, 
        the reduction in the tax increment financing district's revenues 
        derived from increment resulting from the class rate changes in 
        this article, Laws 1998, chapter 389, article 2, and those 
        enacted in the 1999 regular legislative session; or 
           (2) the municipality's total tax increments, including 
        unspent increments from previous years, less the amount due 
        during the calendar year to pay (i) bonds issued and sold before 
        the day following final enactment of this act and (ii) binding 
        contracts entered into before the day following final enactment 
        of this act. 
           (b) The commissioner of revenue may require applicants for 
        grants or pooling authority under this section to provide any 
        information the commissioner deems appropriate.  The 
        commissioner shall calculate the amount under paragraph (a), 
        clause (2), based on the reports for the tax increment financing 
        district or districts filed with the state auditor on or before 
        July August 1 of the year before the year in which the grant is 
        to be paid. 
           (c) This subdivision applies only to deficits in tax 
        increment financing districts for which: 
           (1) the request for certification was made before the 
        enactment date of this act; and 
           (2) all timely reports have been filed with the state 
        auditor, as required by Minnesota Statutes, section 469.175. 
           (d) The commissioner shall pay the grants under this 
        subdivision by December 26 of the year. 
           (e) $2,000,000 is appropriated to the commissioner of 
        revenue to make grants under this section.  This appropriation 
        is available until expended or this section expires under 
        subdivision 3, whichever is earlier.  If the amount of grant 
        entitlements for a year exceed the appropriation, the 
        commissioner shall reduce each grant proportionately so the 
        total equals the amount available.  
           Sec. 17.  Laws 1997, chapter 231, article 1, section 19, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXPIRATION.] This section expires on January 1, 
        2001 2002. 
           Sec. 18.  [CITY OF ONAMIA; USE OF TAX INCREMENT FINANCING.] 
           Subdivision 1.  [APPLICATION OF TIME LIMIT.] For tax 
        increment financing district No. 1-1, established April 14, 
        1993, by the city of Onamia, Minnesota Statutes, section 
        469.1763, subdivision 3, applies to the qualified portion of the 
        district by permitting a period of ten years for commencement of 
        activities within the district.  As used in this section, 
        "qualified portion of the district" means only that portion of 
        the district consisting of three parcels fronting on U.S. 169. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
        approval by the governing body of the city of Onamia and 
        compliance with Minnesota Statutes, section 645.021, subdivision 
        3. 
           Sec. 19.  [ST. CLOUD HOUSING AND REDEVELOPMENT AUTHORITY.] 
           Subdivision 1.  [TAX INCREMENT POOLING.] Notwithstanding 
        the provisions of Minnesota Statutes, section 469.1763, 
        subdivision 2, and the provisions of the tax increment financing 
        act in effect for districts established by the St. Cloud housing 
        and redevelopment authority for which the request for 
        certification was made after August 1, 1979, and before June 30, 
        1982, revenue derived from tax increments paid by properties in 
        the districts may be expended through a development fund or 
        otherwise within other tax increment districts established by 
        the authority to finance the redevelopment of commercial 
        properties outside of tax increment financing districts which 
        were destroyed or impacted in a natural gas explosion on 
        December 11, 1998. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
        day after compliance with Minnesota Statutes, section 645.021, 
        subdivision 3. 
           Sec. 20.  [CITY OF ST. PAUL.] 
           Subdivision 1.  [DELAY OF DEEMED COMMENCEMENT OF TAX 
        INCREMENT FINANCING DISTRICT.] Notwithstanding Minnesota 
        Statutes, section 469.176, or any other law to the contrary, the 
        duration limit of the Williams Hill tax increment district in 
        the city of St. Paul is determined as if the date of receipt of 
        the first tax increment by the authority occurs when the 
        aggregate of all tax increments received from the district 
        reaches $2,000.  In no case may the duration limit of the 
        district be extended by more than two years.  
           Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
        approval by and compliance with Minnesota Statutes, sections 
        469.1782, subdivision 2, and 645.021, subdivision 3, by the 
        governing body of the city of St. Paul. 
           Sec. 21.  [CITY OF JACKSON; TAX INCREMENT FINANCING 
        DISTRICT.] 
           Subdivision 1.  [DISTRICT EXTENSION.] (a) Notwithstanding 
        the provisions of Minnesota Statutes, section 469.176, 
        subdivision 1c, full tax increments from U.S. 71/I-90 tax 
        increment financing district in the city of Jackson must be paid 
        to and may be retained by the city of Jackson through taxes 
        payable in 2002.  The amount to be retained by the city is 
        limited to $170,000.  Any increments received during the 
        extension in excess of $170,000 must be returned as excess 
        increments under Minnesota Statutes, section 469.176, 
        subdivision 2. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
        day after compliance with Minnesota Statutes, sections 469.1782, 
        subdivision 2, and 645.021, subdivision 3. 
           Sec. 22.  [CITY OF MINNEOTA; TAX INCREMENT FINANCING.] 
           Subdivision 1.  [ACTIONS RATIFIED.] The expenditure of tax 
        increments on administrative expenses and public utility or 
        other improvements by the city of Minneota for its tax increment 
        financing district, adopted by city resolution 4-15-85A, are 
        ratified and deemed to be authorized by the tax increment 
        financing plan for the district. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
        compliance by the governing body of the city of Minneota with 
        Minnesota Statutes, section 645.021, subdivision 3. 
           Sec. 23.  [CITY OF FRIDLEY, TAX INCREMENT FINANCING 
        DISTRICT.] 
           Subdivision 1.  [EXTENSION OF TIME.] (a) Notwithstanding 
        the provisions of Minnesota Statutes, section 469.176, 
        subdivision 1b, upon approval of the governing body of the city 
        of Fridley, the Fridley housing and redevelopment authority may, 
        by resolution, extend the duration of tax increment financing 
        district No. 6 located in the city of Fridley.  The housing and 
        redevelopment authority may not extend the duration beyond 
        December 31, 2025. 
           (b) The provisions of Minnesota Statutes, sections 
        273.1399, subdivision 8, and 469.1782, subdivision 1, apply to 
        this district if extended, except that the maximum state aid 
        reduction for a year may not exceed the least of the following 
        amounts: 
           (1) the amount under Minnesota Statutes, section 469.1782, 
        subdivision 1; 
           (2) $200,000, plus one-half of (the amount under Minnesota 
        Statutes, section 469.1782, subdivision 1, minus $200,000); 
           (3) 2.5 percent of the net tax capacity of the city; or 
           (4) five percent of the prior year's tax increment from the 
        district. 
           (c) Notwithstanding any law to the contrary, effective upon 
        approval of this section, no increments may be spent on 
        activities located outside of the area of the district, other 
        than for administrative expenses, sanitary sewer, and the costs 
        of trunk highway No. 65 and other road improvements that are a 
        direct result of development occurring within the area of the 
        district. 
           (d) In the taxes payable year that the district would be 
        terminated under general law, the original net tax capacity of 
        tax increment financing district No. 6 must be increased by the 
        net tax capacity of 200,000 square feet of building 
        improvements, exclusive of parking structures. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
        compliance with the requirements of Minnesota Statutes, sections 
        469.1782, subdivision 2, and 645.021. 
           Sec. 24.  [CITY OF BROOKLYN CENTER; TAX INCREMENT FINANCING 
        DISTRICT.] 
           Subdivision 1.  [CHANGE OF FISCAL DISPARITIES 
        ELECTION.] Notwithstanding Minnesota Statutes, section 469.177, 
        subdivision 3, paragraph (c), the governing body of the city of 
        Brooklyn Center may change its election of the computation of 
        tax increment for tax increment district No. 4 under Minnesota 
        Statutes, section 469.177, subdivision 3, from the method of 
        computation in paragraph (b) to the method in paragraph (a) of 
        that provision. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
        approval by the governing body of the city of Brooklyn Center 
        and compliance with Minnesota Statutes, section 645.021, 
        subdivision 3. 
           Sec. 25.  [CITY OF DAWSON; TAX INCREMENT DISTRICT.] 
           Subdivision 1.  [DISTRICT EXTENDED.] Notwithstanding 
        Minnesota Statutes, section 469.176, subdivision 1b, the Dawson 
        economic development authority may collect tax increments from 
        tax increment financing district No. 7 for a period of 18 years 
        after receipt by the authority of the first increment. 
           Subd. 2.  [EFFECTIVE DATE; APPLICABILITY.] Subdivision 1 is 
        effective upon compliance with Minnesota Statutes, sections 
        469.1782, subdivision 2, and 645.021, subdivision 3. 
           Sec. 26.  [MINNEAPOLIS; TAX INCREMENT FINANCING.] 
           Subdivision 1.  [SOCIAL AND RECREATIONAL FACILITIES.] The 
        provisions of section 2 do not apply to the Mill Ruins Park and 
        Milwaukee Road Depot tax increment financing districts and to a 
        district designated in the future that contains the former 
        federal reserve bank building in the city of Minneapolis. 
           Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
        compliance by the city of Minneapolis with the requirements of 
        Minnesota Statutes 1998, section 645.021, subdivision 3. 
           Sec. 27.  [APPROPRIATION; TIF GRANTS.] 
           $4,000,000 is appropriated to the commissioner of revenue 
        for purposes of grants under Laws 1997, chapter 231, article 1, 
        section 19, to municipalities to offset deficits in tax 
        increment financing districts. 
           Sec. 28.  [REPEALER.] 
           Laws 1997, chapter 231, article 1, section 19, subdivision 
        2, is repealed. 
           Sec. 29.  [EFFECTIVE DATE.] 
           Section 1 is effective for requests for certification of a 
        new district or for the addition of geographic area to a 
        district made after June 30, 1999. 
           Section 2 is effective for all tax increment financing 
        districts, regardless of when the request for certification was 
        made, but does not apply to (1) expenditures made before January 
        1, 2000; (2) expenditures made under a binding contract entered 
        before January 1, 2000; or (3) expenditures made under a binding 
        contract entered pursuant to a letter of intent with the 
        developer or contractor if the letter of intent was entered 
        before January 1, 2000. 
           Section 3 is effective for all districts for which the 
        request for certification was made before June 2, 1997. 
           Section 4 is effective the day following final enactment 
        and applies to districts for which the request for certification 
        was made after July 31, 1979, and before July 1, 1982.  
           Sections 5 and 6 apply to all districts for which the 
        request for certification was made after August 1, 1979, but is 
        limited to final letters of noncompliance issued by the state 
        auditor after December 31, 1999. 
           Sections 8 to 17, and 28 are effective the day following 
        final enactment. 
                                   ARTICLE 11 
                        STATE FUNDING OF DISTRICT COURTS 
               TRANSFER OF FINES, FEES, AND OTHER MONEY TO STATE 
           Section 1.  Minnesota Statutes 1998, section 97A.065, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FINES AND FORFEITED BAIL.] (a) Fines and 
        forfeited bail collected from prosecutions of violations of:  
        the game and fish laws; sections 84.091 to 84.15; sections 84.81 
        to 84.91; section 169.121, when the violation involved an 
        off-road recreational vehicle as defined in section 169.01, 
        subdivision 86; chapter 348; and any other law relating to wild 
        animals or aquatic vegetation, must be paid to the treasurer of 
        the county where the violation is prosecuted.  The county 
        treasurer shall submit one-half of the receipts to the 
        commissioner and credit the balance to the county general 
        revenue fund except as provided in paragraphs (b), (c), and 
        (d).  In a county in a judicial district under section 480.181, 
        subdivision 1, paragraph (b), as added in 1999 S.F. No. 2221, 
        article 7, section 26, the share that would otherwise go to the 
        county under this paragraph must be submitted to the state 
        treasurer for deposit in the state treasury and credited to the 
        general fund. 
           (b) The commissioner must reimburse a county, from the game 
        and fish fund, for the cost of keeping prisoners prosecuted for 
        violations under this section if the county board, by 
        resolution, directs:  (1) the county treasurer to submit all 
        fines and forfeited bail to the commissioner; and (2) the county 
        auditor to certify and submit monthly itemized statements to the 
        commissioner.  
           (c) The county treasurer shall submit one-half of the 
        receipts collected under paragraph (a) from prosecutions of 
        violations of sections 84.81 to 84.91, and 169.121, except 
        receipts that are surcharges imposed under section 357.021, 
        subdivision 6, to the state treasurer and credit the balance to 
        the county general fund.  The state treasurer shall credit these 
        receipts to the snowmobile trails and enforcement account in the 
        natural resources fund. 
           (d) The county treasurer shall indicate the amount of the 
        receipts that are surcharges imposed under section 357.021, 
        subdivision 6, and shall submit all of those receipts to the 
        state treasurer. 
           Sec. 2.  Minnesota Statutes 1998, section 273.1398, 
        subdivision 2, is amended to read: 
           Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 
        Homestead and agricultural credit aid for each unique taxing 
        jurisdiction equals the product of (1) the homestead and 
        agricultural credit aid base, and (2) the growth adjustment 
        factor, plus the net tax capacity adjustment and the fiscal 
        disparity adjustment.  For aid payable in 2000, each county 
        shall have its homestead and agricultural credit aid permanently 
        reduced by an amount equal to one-third of the additional amount 
        received by the county under section 477A.03, subdivision 2, 
        paragraph (c), clause (ii). 
           Sec. 3.  Minnesota Statutes 1998, section 273.1398, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [AID OFFSET FOR COURT COSTS.] (a) By July 15, 
        1999, the supreme court shall determine and certify to the 
        commissioner of revenue for each county, other than counties 
        located in the eighth judicial district, the county's share of 
        the costs assumed under 1999 S.F. No. 2221, article 7, during 
        the fiscal year beginning July 1, 2000, less an amount equal to 
        the county's share of transferred fines collected by the 
        district courts in the county during calendar year 1998.  
           (b) Payments to a county under subdivision 2 or section 
        273.166 for calendar year 2000 must be permanently reduced by an 
        amount equal to 75 percent of the net cost to the state for 
        assumption of district court costs as certified in paragraph (a).
           (c) Payments to a county under subdivision 2 or section 
        273.166 for calendar year 2001 must be permanently reduced by an 
        amount equal to 25 percent of the net cost to the state for 
        assumption of district court costs as certified in paragraph (a).
           Sec. 4.  Minnesota Statutes 1998, section 299D.03, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FINES AND FORFEITED BAIL MONEY.] (a) All fines 
        and forfeited bail money, from traffic and motor vehicle law 
        violations, collected from persons apprehended or arrested by 
        officers of the state patrol, shall be paid by the person or 
        officer collecting the fines, forfeited bail money or 
        installments thereof, on or before the tenth day after the last 
        day of the month in which these moneys were collected, to the 
        county treasurer of the county where the violation occurred.  
        Three-eighths of these receipts shall be credited to the general 
        revenue fund of the county, except that in a county in a 
        judicial district under section 480.181, subdivision 1, 
        paragraph (b), as added in 1999 S.F. No. 2221, article 7, 
        section 26, this three-eighths share must be transmitted to the 
        state treasurer for deposit in the state treasury and credited 
        to the general fund.  The other five-eighths of these receipts 
        shall be transmitted by that officer to the state treasurer and 
        shall be credited as follows: 
           (1) In the fiscal year ending June 30, 1991, the first 
        $275,000 in money received by the state treasurer after June 4, 
        1991, must be credited to the transportation services fund, and 
        the remainder in the fiscal year credited to the trunk highway 
        fund. 
           (2) In fiscal year 1992, the first $215,000 in money 
        received by the state treasurer in the fiscal year must be 
        credited to the transportation services fund, and the remainder 
        credited to the trunk highway fund. 
           (3) In fiscal years 1993 and subsequent years, the entire 
        amount received by the state treasurer must be credited to the 
        trunk highway fund.  If, however, the violation occurs within a 
        municipality and the city attorney prosecutes the offense, and a 
        plea of not guilty is entered, one-third of the receipts shall 
        be credited to the general revenue fund of the county, one-third 
        of the receipts shall be paid to the municipality prosecuting 
        the offense, and one-third shall be transmitted to the state 
        treasurer as provided in this subdivision.  All costs of 
        participation in a nationwide police communication system 
        chargeable to the state of Minnesota shall be paid from 
        appropriations for that purpose. 
           (b) Notwithstanding any other provisions of law, all fines 
        and forfeited bail money from violations of statutes governing 
        the maximum weight of motor vehicles, collected from persons 
        apprehended or arrested by employees of the state of Minnesota, 
        by means of stationary or portable scales operated by these 
        employees, shall be paid by the person or officer collecting the 
        fines or forfeited bail money, on or before the tenth day after 
        the last day of the month in which the collections were made, to 
        the county treasurer of the county where the violation 
        occurred.  Five-eighths of these receipts shall be transmitted 
        by that officer to the state treasurer and shall be credited to 
        the highway user tax distribution fund.  Three-eighths of these 
        receipts shall be credited to the general revenue fund of the 
        county, except that in a county in a judicial district under 
        section 480.181, subdivision 1, paragraph (b), as added in 1999 
        S.F. No. 2221, article 7, section 26, this three-eighths share 
        must be transmitted to the state treasurer for deposit in the 
        state treasury and credited to the general fund. 
           Sec. 5.  Minnesota Statutes 1998, section 357.021, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 
        Every person, including the state of Minnesota and all bodies 
        politic and corporate, who shall transact any business in the 
        district court, shall pay to the court administrator of said 
        court the sundry fees prescribed in subdivision 2.  Except as 
        provided in paragraph (d), the court administrator shall 
        transmit the fees monthly to the state treasurer for deposit in 
        the state treasury and credit to the general fund.  
           (b) In a county which has a screener-collector position, 
        fees paid by a county pursuant to this subdivision shall be 
        transmitted monthly to the county treasurer, who shall apply the 
        fees first to reimburse the county for the amount of the salary 
        paid for the screener-collector position.  The balance of the 
        fees collected shall then be forwarded to the state treasurer 
        for deposit in the state treasury and credited to the general 
        fund.  In a county in the eighth a judicial district under 
        section 480.181, subdivision 1, paragraph (b), as added in 1999 
        S.F. No. 2221, article 7, section 26, which has a 
        screener-collector position, the fees paid by a county shall be 
        transmitted monthly to the state treasurer for deposit in the 
        state treasury and credited to the general fund.  A 
        screener-collector position for purposes of this paragraph is an 
        employee whose function is to increase the collection of fines 
        and to review the incomes of potential clients of the public 
        defender, in order to verify eligibility for that service. 
           (c) No fee is required under this section from the public 
        authority or the party the public authority represents in an 
        action for: 
           (1) child support enforcement or modification, medical 
        assistance enforcement, or establishment of parentage in the 
        district court, or child or medical support enforcement 
        conducted by an administrative law judge in an administrative 
        hearing under section 518.5511; 
           (2) civil commitment under chapter 253B; 
           (3) the appointment of a public conservator or public 
        guardian or any other action under chapters 252A and 525; 
           (4) wrongfully obtaining public assistance under section 
        256.98 or 256D.07, or recovery of overpayments of public 
        assistance; 
           (5) court relief under chapter 260; 
           (6) forfeiture of property under sections 169.1217 and 
        609.531 to 609.5317; 
           (7) recovery of amounts issued by political subdivisions or 
        public institutions under sections 246.52, 252.27, 256.045, 
        256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, and 
        260.251, or other sections referring to other forms of public 
        assistance; 
           (8) restitution under section 611A.04; or 
           (9) actions seeking monetary relief in favor of the state 
        pursuant to section 16D.14, subdivision 5. 
           (d) The fees collected for child support modifications 
        under subdivision 2, clause (13), must be transmitted to the 
        county treasurer for deposit in the county general fund.  The 
        fees must be used by the county to pay for child support 
        enforcement efforts by county attorneys. 
           Sec. 6.  Minnesota Statutes 1998, section 477A.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
        discharge the duties imposed by sections 477A.011 to 477A.014 is 
        annually appropriated from the general fund to the commissioner 
        of revenue.  
           (b) Aid payments to counties under section 477A.0121 are 
        limited to $20,265,000 in 1996.  Aid payments to counties under 
        section 477A.0121 are limited to $27,571,625 in 1997.  For aid 
        payable in 1998 and thereafter, the total aids paid under 
        section 477A.0121 are the amounts certified to be paid in the 
        previous year, adjusted for inflation as provided under 
        subdivision 3. 
           (c)(i) For aids payable in 1998 and thereafter, the total 
        aids paid to counties under section 477A.0122 are the amounts 
        certified to be paid in the previous year, adjusted for 
        inflation as provided under subdivision 3. 
           (ii) Aid payments to counties under section 477A.0122 in 
        2000 are further increased by an 
        additional $30,000,000 $20,000,000 in 2000. 
           (d) Aid payments to cities in 1999 under section 477A.013, 
        subdivision 9, are limited to $380,565,489.  For aids payable in 
        2000 and 2001, the total aids paid under section 477A.013, 
        subdivision 9, are the amounts certified to be paid in the 
        previous year, adjusted for inflation as provided under 
        subdivision 3.  For aids payable in 2002, the total aids paid 
        under section 477A.013, subdivision 9, are the amounts certified 
        to be paid in the previous year, adjusted for inflation as 
        provided under subdivision 3, and increased by the amount 
        certified to be paid in 2001 under section 477A.06.  For aids 
        payable in 2003 and thereafter, the total aids paid under 
        section 477A.013, subdivision 9, are the amounts certified to be 
        paid in the previous year, adjusted for inflation as provided 
        under subdivision 3.  The additional amount authorized under 
        subdivision 4 is not included when calculating the appropriation 
        limits under this paragraph. 
           Sec. 7.  Minnesota Statutes 1998, section 485.018, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COLLECTION OF FEES.] The court administrator of 
        district court shall charge and collect all fees as prescribed 
        by law and all such fees collected by the court administrator as 
        court administrator of district court shall be paid to the 
        county treasurer.  Except for those portions of forfeited bail 
        paid to victims pursuant to existing law, the county treasurer 
        shall forward all revenue from fees and forfeited bail collected 
        under chapters 357, 487, and 574 to the state treasurer for 
        deposit in the state treasury and credit to the general fund, 
        unless otherwise provided in chapter 611A or other law, in the 
        manner and at the times prescribed by the state treasurer, but 
        not less often than once each month.  If the defendant or 
        probationer is located after forfeited bail proceeds have been 
        forwarded to the state treasurer, the state treasurer shall 
        reimburse the county, on request, for actual costs expended for 
        extradition, transportation, or other costs necessary to return 
        the defendant or probationer to the jurisdiction where the bail 
        was posted, in an amount not more than the amount of forfeited 
        bail.  All other money must be deposited in the county general 
        fund unless otherwise provided by law.  The court administrator 
        of district court shall not retain any additional compensation, 
        per diem or other emolument for services as court administrator 
        of district court, but may receive and retain mileage and 
        expense allowances as prescribed by law. 
           Sec. 8.  Minnesota Statutes 1998, section 487.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  Except as provided in this subdivision, the 
        county board shall levy taxes annually against the taxable 
        property within the county as necessary for the establishment, 
        operation and maintenance of the county court or courts within 
        the county.  Any county in a judicial district under section 
        480.181, subdivision 1, paragraph (b), as added by 1999 S.F. No. 
        2221, article 7, section 26, is prohibited from levying property 
        taxes for these purposes, except for any amounts necessary to 
        pay the costs incurred in the first six months of calendar year 
        2000 with respect to counties in the fifth, seventh, and ninth 
        judicial districts. 
           Sec. 9.  Minnesota Statutes 1998, section 487.32, 
        subdivision 3, is amended to read: 
           Subd. 3.  A judge of a county court may order any sums 
        forfeited to be reinstated and the county state treasurer shall 
        then refund accordingly.  The county state treasurer shall 
        reimburse the court administrator if the court administrator 
        refunds the deposit upon a judge's order and obtains a receipt 
        to be used as a voucher.  
           Sec. 10.  Minnesota Statutes 1998, section 487.33, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ALLOCATION.] The court administrator shall 
        provide the county treasurer with the name of the municipality 
        or other subdivision of government where the offense was 
        committed which employed or provided by contract the arresting 
        or apprehending officer and the name of the municipality or 
        other subdivision of government which employed the prosecuting 
        attorney or otherwise provided for prosecution of the offense 
        for each fine or penalty and the total amount of fines or 
        penalties collected for each municipality or other subdivision 
        of government.  On or before the last day of each month, the 
        county treasurer shall pay over to the treasurer of each 
        municipality or subdivision of government within the county all 
        fines or penalties for parking violations for which complaints 
        and warrants have not been issued and one-third of all fines or 
        penalties collected during the previous month for offenses 
        committed within the municipality or subdivision of government 
        from persons arrested or issued citations by officers employed 
        by the municipality or subdivision or provided by the 
        municipality or subdivision by contract.  An additional 
        one-third of all fines or penalties shall be paid to the 
        municipality or subdivision of government providing prosecution 
        of offenses of the type for which the fine or penalty is 
        collected occurring within the municipality or subdivision, 
        imposed for violations of state statute or of an ordinance, 
        charter provision, rule or regulation of a city whether or not a 
        guilty plea is entered or bail is forfeited.  Except as provided 
        in section 299D.03, subdivision 5, or as otherwise provided by 
        law, all other fines and forfeitures and all fees and statutory 
        court costs collected by the court administrator shall be paid 
        to the county treasurer of the county in which the funds were 
        collected who shall dispense them as provided by law.  In a 
        county in a judicial district under section 480.181, subdivision 
        1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 
        section 26, all other fines, forfeitures, fees, and statutory 
        court costs must be paid to the state treasurer for deposit in 
        the state treasury and credited to the general fund. 
           Sec. 11.  Minnesota Statutes 1998, section 574.34, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL.] Fines and forfeitures not 
        specially granted or appropriated by law shall be paid into the 
        treasury of the county where they are incurred, except in a 
        county in a judicial district under section 480.181, subdivision 
        1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 
        section 26, the fines and forfeitures must be deposited in the 
        state treasury and credited to the general fund. 
           Sec. 12.  [APPROPRIATION.] 
           $18,731,000 is appropriated for fiscal year 2001 from the 
        general fund to the district courts for purposes of funding the 
        district court expenses under this article. 
           Sec. 13.  [EFFECTIVE DATES; CONTINGENCY.] 
           (a) Sections 2 and 6 are effective for aids payable in 
        2000.  The other provisions of this article providing for the 
        transfer of fees and fines to the state are effective January 1, 
        2000, with respect to counties in the eighth judicial district, 
        and July 1, 2000, with respect to counties in the fifth, 
        seventh, and ninth judicial districts. 
           (b) Notwithstanding paragraph (a), this article does not 
        take effect unless the state assumes the district court costs 
        under 1999 S.F. No. 2221, article 7. 
                                   ARTICLE 12 
                               BUSINESS SUBSIDIES 
           Section 1.  [116J.993] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For the purposes of sections 
        116J.993 to 116J.995, the terms defined in this section have the 
        meanings given them. 
           Subd. 2.  [BENEFIT DATE.] "Benefit date" means the date 
        that the recipient receives the business subsidy.  If the 
        business subsidy involves the purchase, lease, or donation of 
        physical equipment, then the benefit date begins when the 
        recipient puts the equipment into service.  If the business 
        subsidy is for improvements to property, then the benefit date 
        refers to the earliest date of either: 
           (1) when the improvements are finished for the entire 
        project; or 
           (2) when a business occupies the property.  If a business 
        occupies the property and the subsidy grantor expects that other 
        businesses will also occupy the same property, the grantor may 
        assign a separate benefit date for each business when it first 
        occupies the property. 
           Subd. 3.  [BUSINESS SUBSIDY.] "Business subsidy" or 
        "subsidy" means a state or local government agency grant, 
        contribution of personal property, real property, 
        infrastructure, the principal amount of a loan at rates below 
        those commercially available to the recipient, any reduction or 
        deferral of any tax or any fee, any guarantee of any payment 
        under any loan, lease, or other obligation, or any preferential 
        use of government facilities given to a business. 
           The following forms of financial assistance are not a 
        business subsidy: 
           (1) a business subsidy of less than $25,000; 
           (2) assistance that is generally available to all 
        businesses or to a general class of similar businesses, such as 
        a line of business, size, location, or similar general criteria; 
           (3) public improvements to buildings or lands owned by the 
        state or local government that serve a public purpose and do not 
        principally benefit a single business or defined group of 
        businesses at the time the improvements are made; 
           (4) redevelopment property polluted by contaminants as 
        defined in section 116J.552, subdivision 3; 
           (5) assistance provided for the sole purpose of renovating 
        old or decaying building stock or bringing it up to code, 
        provided that the assistance is equal to or less than 50 percent 
        of the total cost; 
           (6) assistance provided to organizations whose primary 
        mission is to provide job readiness and training services if the 
        sole purpose of the assistance is to provide those services; 
           (7) assistance for housing; 
           (8) assistance for pollution control or abatement; 
           (9) assistance for energy conservation; 
           (10) tax reductions resulting from conformity with federal 
        tax law; 
           (11) workers' compensation and unemployment compensation; 
           (12) benefits derived from regulation; 
           (13) indirect benefits derived from assistance to 
        educational institutions; 
           (14) funds from bonds allocated under chapter 474A; 
           (15) assistance for a collaboration between a Minnesota 
        higher education institution and a business; 
           (16) assistance for a tax increment financing soils 
        condition district as defined under section 469.174, subdivision 
        19; 
           (17) redevelopment when the recipient's investment in the 
        purchase of the site and in site preparation is 70 percent or 
        more of the assessor's current year's estimated market value; 
        and 
           (18) general changes in tax increment financing law and 
        other general tax law changes of a principally technical nature. 
           Subd. 4.  [GRANTOR.] "Grantor" means any state or local 
        government agency with the authority to grant a business subsidy.
           Subd. 5.  [LOCAL GOVERNMENT AGENCY.] "Local government 
        agency" includes a statutory or home rule charter city, housing 
        and redevelopment authority, town, county, port authority, 
        economic development authority, community development agency, 
        nonprofit entity created by a local government agency, or any 
        other entity created by or authorized by a local government with 
        authority to provide business subsidies.  
           Subd. 6.  [RECIPIENT.] "Recipient" means any for-profit or 
        nonprofit business entity that receives a business subsidy.  
        Only nonprofit entities with at least 100 full-time equivalent 
        positions and with a ratio of highest to lowest paid employee, 
        that exceeds ten to one, determined on the basis of full-time 
        equivalent positions, are included in this definition. 
           Subd. 7.  [STATE GOVERNMENT AGENCY.] "State government 
        agency" means any state agency that has the authority to award 
        business subsidies.  
           Sec. 2.  [116J.994] [REGULATING LOCAL AND STATE BUSINESS 
        SUBSIDIES.] 
           Subdivision 1.  [PUBLIC PURPOSE.] A business subsidy must 
        meet a public purpose other than increasing the tax base.  Job 
        retention may only be used as a public purpose in cases where 
        job loss is imminent and demonstrable. 
           Subd. 2.  [DEVELOPING A SET OF CRITERIA.] A business 
        subsidy may not be granted until the grantor has adopted 
        criteria after a public hearing for awarding business subsidies 
        that comply with this section.  The criteria must include a 
        policy regarding the wages to be paid for the jobs created.  The 
        commissioner of trade and economic development may assist local 
        government agencies in developing criteria. 
           Subd. 3.  [SUBSIDY AGREEMENT.] (a) A recipient must enter 
        into a subsidy agreement with the grantor of the subsidy that 
        includes: 
           (1) a description of the subsidy, including the amount and 
        type of subsidy, and type of district if the subsidy is tax 
        increment financing; 
           (2) a statement of the public purposes for the subsidy; 
           (3) goals for the subsidy; 
           (4) a description of the financial obligation of the 
        recipient if the goals are not met; 
           (5) a statement of why the subsidy is needed; 
           (6) a commitment to continue operations at the site where 
        the subsidy is used for at least five years after the benefit 
        date; 
           (7) the name and address of the parent corporation of the 
        recipient, if any; and 
           (8) a list of all financial assistance by all grantors for 
        the project. 
           (b) Business subsidies in the form of grants must be 
        structured as forgivable loans.  If a business subsidy is not 
        structured as a forgivable loan, the agreement must state the 
        fair market value of the subsidy to the recipient, including the 
        value of conveying property at less than a fair market price, or 
        other in-kind benefits to the recipient. 
           (c) If a business subsidy benefits more than one recipient, 
        the grantor must assign a proportion of the business subsidy to 
        each recipient that signs a subsidy agreement.  The proportion 
        assessed to each recipient must reflect a reasonable estimate of 
        the recipient's share of the total benefits of the project. 
           (d) The state or local government agency and the recipient 
        must both sign the subsidy agreement and, if the grantor is a 
        local government agency, the agreement must be approved by the 
        local elected governing body, except for the St. Paul Port 
        Authority and a seaway port authority. 
           Subd. 4.  [WAGE AND JOB GOALS.] The subsidy agreement, in 
        addition to any other goals, must include:  (1) goals for the 
        number of jobs created, which may include separate goals for the 
        number of part-time or full-time jobs, or, in cases where job 
        loss is imminent and demonstrable, goals for the number of jobs 
        retained; and (2) wage goals for the jobs created or retained. 
           In addition to other specific goal time frames, the wage 
        and job goals must contain specific goals to be attained within 
        two years of the benefit date. 
           Subd. 5.  [PUBLIC NOTICE AND HEARING.] (a) Before granting 
        a business subsidy that exceeds $500,000 for a state government 
        grantor and $100,000 for a local government grantor, the grantor 
        must provide public notice and a hearing on the subsidy.  A 
        public hearing and notice under this subdivision is not required 
        if a hearing and notice on the subsidy is otherwise required by 
        law. 
           (b) Public notice of a proposed business subsidy under this 
        subdivision by a state government grantor must be published in 
        the State Register.  Public notice of a proposed business 
        subsidy under this subdivision by a local government grantor 
        must be published in a local newspaper of general circulation.  
        The public notice must identify the location at which 
        information about the business subsidy, including a copy of the 
        subsidy agreement, is available.  Published notice should be 
        sufficiently conspicuous in size and placement to distinguish 
        the notice from the surrounding text.  The grantor must make the 
        information available in printed paper copies and, if possible, 
        on the Internet.  The government agency must provide at least a 
        ten-day notice for the public hearing. 
           (c) The public notice must include the date, time, and 
        place of the hearing. 
           (d) The public hearing by a state government grantor must 
        be held in St. Paul. 
           Subd. 6.  [FAILURE TO MEET GOALS.] The subsidy agreement 
        must specify the recipient's obligation if the recipient does 
        not fulfill the agreement.  At a minimum, the agreement must 
        require a recipient failing to meet subsidy agreement goals to 
        pay back the assistance plus interest to the grantor provided 
        that repayment may be prorated to reflect partial fulfillment of 
        goals.  The interest rate must be set at the implicit price 
        deflator defined under section 275.70, subdivision 2.  The 
        grantor, after a public hearing, may extend for up to one year 
        the period for meeting the goals provided in a subsidy agreement.
           A recipient that fails to meet the terms of a subsidy 
        agreement may not receive a business subsidy from any grantor 
        for a period of five years from the date of failure or until a 
        recipient satisfies its repayment obligation under this 
        subdivision, whichever occurs first.  
           Before a grantor signs a business subsidy agreement, the 
        grantor must check with the compilation and summary report 
        required by this section to determine if the recipient is 
        eligible to receive a business subsidy. 
           Subd. 7.  [REPORTS BY RECIPIENTS TO GRANTORS.] (a) A 
        business subsidy grantor must monitor the progress by the 
        recipient in achieving agreement goals. 
           (b) A recipient must provide information regarding goals 
        and results for two years after the benefit date or until the 
        goals are met, whichever is later.  If the goals are not met, 
        the recipient must continue to provide information on the 
        subsidy until the subsidy is repaid.  The information must be 
        filed on forms developed by the commissioner in cooperation with 
        representatives of local government.  Copies of the completed 
        forms must be sent to the commissioner and the local government 
        agency that provided the business subsidy.  The report must 
        include: 
           (1) the type, public purpose, and amount of subsidies and 
        type of district, if the subsidy is tax increment financing; 
           (2) the hourly wage of each job created with separate bands 
        of wages; 
           (3) the sum of the hourly wages and cost of health 
        insurance provided by the employer with separate bands of wages; 
           (4) the date the job and wage goals will be reached; 
           (5) a statement of goals identified in the subsidy 
        agreement and an update on achievement of those goals; 
           (6) the location of the recipient prior to receiving the 
        business subsidy; 
           (7) why the recipient did not complete the project outlined 
        in the subsidy agreement at their previous location, if the 
        recipient was previously located at another site in Minnesota; 
           (8) the name and address of the parent corporation of the 
        recipient, if any; 
           (9) a list of all financial assistance by all grantors for 
        the project; and 
           (10) other information the commissioner may request. 
        A report must be filed no later than March 1 of each year for 
        the previous year and within 30 days after the deadline for 
        meeting the job and wage goals.  
           (c) Financial assistance that is excluded from the 
        definition of "business subsidy" by section 116J.993, 
        subdivision 3, clauses (4), (5), (8), and (16) is subject to the 
        reporting requirements of this subdivision, except that the 
        report of the recipient must include: 
           (1) the type, public purpose, and amount of the financial 
        assistance, and type of district if the subsidy is tax increment 
        financing; 
           (2) progress towards meeting goals stated in the subsidy 
        agreement and the public purpose of the assistance; 
           (3) the hourly wage of each job created with separate bands 
        of wages; 
           (4) the sum of the hourly wages and cost of health 
        insurance provided by the employer with separate bands of wages; 
           (5) the location of the recipient prior to receiving the 
        assistance; and 
           (6) other information the grantor requests. 
           (d) If the recipient does not submit its report, the local 
        government agency must mail the recipient a warning within one 
        week of the required filing date.  If, after 14 days of the 
        postmarked date of the warning, the recipient fails to provide a 
        report, the recipient must pay to the grantor a penalty of $100 
        for each subsequent day until the report is filed.  The maximum 
        penalty shall not exceed $1,000.  
           Subd. 8.  [REPORTS BY GRANTORS.] (a) Local government 
        agencies of a local government with a population of more than 
        2,500 and state government agencies, regardless of whether or 
        not they have awarded any business subsidies, must file a report 
        by April 1 of each year with the commissioner.  Local government 
        agencies of a local government with a population of 2,500 or 
        less are exempt from filing this report if they have not awarded 
        a business subsidy in the past five years.  The local government 
        agency must include a list of recipients that did not complete 
        the report and of recipients that have not met their job and 
        wage goals within two years and the steps being taken to bring 
        them into compliance or to recoup the subsidy.  
           If the commissioner has not received the report by April 1 
        from an entity required to report, the commissioner shall issue 
        a warning to the government agency.  If the commissioner has 
        still not received the report by June 1 of that same year from 
        an entity required to report, then that government agency may 
        not award any business subsidies until the report has been filed.
           (b) The commissioner of trade and economic development must 
        provide information on reporting requirements to state and local 
        government agencies. 
           Subd. 9.  [COMPILATION AND SUMMARY REPORT.] The department 
        of trade and economic development must publish a compilation and 
        summary of the results of the reports for the previous calendar 
        year by July 1 of each year.  The reports of the government 
        agencies to the department and the compilation and summary 
        report of the department must be made available to the public. 
           The commissioner must coordinate the production of reports 
        so that useful comparisons across time periods and across 
        grantors can be made.  The commissioner may add other 
        information to the report as the commissioner deems necessary to 
        evaluate business subsidies.  Among the information in the 
        summary and compilation report, the commissioner must include: 
           (1) total amount of subsidies awarded in each development 
        region of the state; 
           (2) distribution of business subsidy amounts by size of the 
        business subsidy; 
           (3) distribution of business subsidy amounts by time 
        category, such as monthly or quarterly; 
           (4) distribution of subsidies by type and by public 
        purpose; 
           (5) percent of all business subsidies that reached their 
        goals; 
           (6) percent of business subsidies that did not reach their 
        goals by two years from the benefit date; 
           (7) total dollar amount of business subsidies that did not 
        meet their goals after two years from the benefit date; 
           (8) percent of subsidies that did not meet their goals and 
        that did not receive repayment; 
           (9) list of recipients that have failed to meet the terms 
        of a subsidy agreement in the past five years and have not 
        satisfied their repayment obligations; 
           (10) number of part-time and full-time jobs within separate 
        bands of wages; and 
           (11) benefits paid within separate bands of wages. 
           Sec. 3.  [116J.995] [ECONOMIC GRANTS.] 
           An appropriation rider in an appropriation to the 
        department of trade and economic development that specifies that 
        the appropriation be granted to a particular business or class 
        of businesses must contain a statement of the expected benefits 
        associated with the grant.  At a minimum, the statement must 
        include goals for the number of jobs created, wages paid, and 
        the tax revenue increases due to the grant. 
           Sec. 4.  [REPEALER.] 
           Minnesota Statutes 1998, section 116J.991, is repealed. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective for business subsidies 
        entered into or state appropriations authorized on or after 
        August 1, 1999. 
                                   ARTICLE 13 
                   TAX FORFEITURE AND DELINQUENCY PROCEDURES 
           Section 1.  Minnesota Statutes 1998, section 92.51, is 
        amended to read: 
           92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.] 
           State lands sold by the director become taxable.  A 
        description of the tract sold, with the name of the purchaser, 
        must be transmitted to the proper county auditor.  The auditor 
        must extend the land for taxation like other land.  Only the 
        interest in the land vested by the land sale certificate in its 
        holder may be sold for delinquent taxes.  Upon production to the 
        county treasurer of the tax certificate given upon tax sale, in 
        case the lands have not been redeemed, the tax purchaser has the 
        right to pay the principal and interest then in default upon the 
        land sale certificate as its assignee.  To redeem from a tax 
        sale, the person redeeming must pay the county treasurer, for 
        the holder and owner of the tax sale certificate, in addition to 
        all sums required to be paid in other cases, all amounts paid by 
        the holder and owner for interest and principal upon the land 
        sale certificate, with interest at 12 percent per year.  When 
        the director receives the tax certificate with the county 
        auditor's certificate of the expiration of the time for 
        redemption, and the county treasurer's receipt for all 
        delinquent interest and penalty on the land sale certificate, 
        the director shall issue the holder and owner of the tax 
        certificate a special certificate with the same terms and the 
        same effect as the original land sale certificate. 
           Sec. 2.  Minnesota Statutes 1998, section 279.37, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMPOSITION INTO ONE ITEM.] Delinquent 
        taxes upon any parcel of real estate may be composed into one 
        item or amount by confession of judgment at any time prior to 
        the forfeiture of the parcel of land to the state for taxes, for 
        the aggregate amount of all the taxes, costs, penalties, and 
        interest accrued against the parcel, as hereinafter provided in 
        this section.  Taxes upon property which, for the previous 
        year's assessment, was classified as mineral property, 
        employment property, or commercial or industrial property shall 
        are only be eligible to be composed into any confession of 
        judgment under this section as provided in subdivision 
        1a.  Delinquent taxes for property that has been reclassified 
        from 4bb to 4b under section 273.1319 may not be composed into a 
        confession of judgment under this subdivision.  Delinquent taxes 
        on unimproved land are eligible to be composed into a confession 
        of judgment only if the land is classified as homestead, 
        agricultural, or timberland in the previous year or is eligible 
        for installment payment under subdivision 1a.  The entire parcel 
        is eligible for the ten-year installment plan as provided in 
        subdivision 2 if 25 percent or more of the market value of the 
        parcel is eligible for confession of judgment under this 
        subdivision. 
           Sec. 3.  Minnesota Statutes 1998, section 279.37, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [CLASS 3A PROPERTY.] (a) The delinquent taxes 
        upon a parcel of property which was classified class 3a, for the 
        previous year's assessment and had a total market value of less 
        than $200,000 or less for that same assessment shall be eligible 
        to be composed into a confession of judgment.  Property 
        qualifying under this subdivision shall be subject to the same 
        provisions as provided in this section except as herein provided 
        in paragraphs (b) to (d). 
           (a) (b) Current year taxes and penalty due at the time the 
        confession of judgment is entered must be paid. 
           (c) The down payment shall must include all special 
        assessments due in the current tax year, all delinquent special 
        assessments, and 20 percent of the ad valorem tax, penalties, 
        and interest accrued against the parcel.  The balance 
        remaining shall be is payable in four equal annual installments; 
        and 
           (b) (d) The amounts entered in judgment shall bear interest 
        at the rate provided in section 279.03, subdivision 1a, 
        commencing with the date the judgment is entered.  The interest 
        rate is subject to change each year on the unpaid balance in the 
        manner provided in section 279.03, subdivision 1a. 
           Sec. 4.  Minnesota Statutes 1998, section 279.37, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INSTALLMENT PAYMENTS.] The owner of any such 
        parcel, or any person to whom the right to pay taxes has been 
        given by statute, mortgage, or other agreement, may make and 
        file with the county auditor of the county wherein in which the 
        parcel is located a written offer to pay the current taxes each 
        year before they become delinquent, or to contest the taxes 
        under Minnesota Statutes 1941, sections 278.01 to 278.13, and 
        agree to confess judgment for the amount hereinbefore provided, 
        as determined by the county auditor, and shall thereby waive.  
        By filing the offer, the owner waives all irregularities in 
        connection with the tax proceedings affecting the parcel and any 
        defense or objection which the owner may have to the 
        proceedings, and shall thereby waive also waives the 
        requirements of any notice of default in the payment of any 
        installment or interest to become due pursuant to the composite 
        judgment to be so entered, and shall tender therewith.  With the 
        offer, the owner shall tender one-tenth of the amount of the 
        delinquent taxes, costs, penalty, and interest, and shall tender 
        all current year taxes and penalty due at the time the 
        confession of judgment is entered.  In the offer, the owner 
        shall agree therein to pay the balance in nine equal 
        installments, with interest as provided in section 279.03, 
        payable annually on installments remaining unpaid from time to 
        time, on or before December 31 of each year following the year 
        in which judgment was confessed, which.  The offer shall must be 
        substantially as follows: 
           "To the court administrator of the district court of 
        ...........  county, I, ....................., am the owner of 
        the following described parcel of real estate situate located in 
        .................... county, Minnesota, to-wit: 
        .............................. Upon which that real estate there 
        are delinquent taxes for the year ........., and prior years, as 
        follows:  (here insert year of delinquency and the total amount 
        of delinquent taxes, costs, interest, and penalty) do hereby.  
        By signing this document I offer to confess judgment in the sum 
        of $...... and hereby waive all irregularities in the tax 
        proceedings affecting such these taxes and any defense or 
        objection which I may have thereto to them, and direct judgment 
        to be entered for the amount hereby confessed amount stated 
        above, less minus the sum of $............, hereby tendered to 
        be paid with this document, being which is one-tenth of the 
        amount of said the taxes, costs, penalty, and interest; stated 
        above.  I agree to pay the balance of said the judgment in nine 
        equal, annual installments, with interest as provided in section 
        279.03, payable annually, on the installments remaining 
        unpaid from time to time, said.  I agree to pay the installments 
        and interest to be paid on or before December 31 of each year 
        following the year in which this judgment is confessed and 
        current taxes each year before they become delinquent, or within 
        30 days after the entry of final judgment in proceedings to 
        contest such the taxes under Minnesota Statutes 1941, sections 
        278.01 to 278.13. 
           Dated this .............., ......." 
           Sec. 5.  Minnesota Statutes 1998, section 281.23, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MAY COVER PARCELS BID IN AT SAME TAX SALE FORM.] 
        All parcels of land bid in at the same tax judgment sale and 
        having the same period of redemption shall be covered by a 
        single posted notice, but a separate notice may be posted for 
        any parcel which may be omitted.  Such The notice of expiration 
        of redemption must contain the tax parcel identification numbers 
        and legal descriptions of parcels subject to notice of 
        expiration of redemption provisions prescribed under subdivision 
        1.  The notice must also indicate the names of taxpayers and fee 
        owners of record in the office of the county auditor at the time 
        the notice is prepared and names of those parties who have filed 
        their addresses according to section 276.041 and the amount of 
        payment necessary to redeem as of the date of the notice.  At 
        the option of the county auditor, the current filed addresses of 
        affected persons may be included on the notice.  The notice 
        shall be is sufficient if substantially in the following form: 
                      "NOTICE OF EXPIRATION OF REDEMPTION 
           Office of the County Auditor 
           County of ......................., State of Minnesota. 
           To all persons interested having an interest in the lands 
        hereinafter described in this notice: 
           You are hereby notified that the parcels of land 
        hereinafter described, situated in this notice and located in 
        the county of ................................, state of 
        Minnesota, were bid in for the state on the 
        .........................  day of ......................., 
        ......., at the tax judgment sale of land for delinquent taxes 
        for the year .......; that the legal descriptions and tax parcel 
        identification numbers of such parcels and names of the 
        taxpayers and fee owners and in addition those parties who have 
        filed their addresses pursuant to section 276.041, and the 
        amount necessary to redeem as of the date hereof and, at the 
        election of the county auditor, the current filed addresses of 
        any such persons, are as follows: are subject to forfeiture to 
        the state of Minnesota because of nonpayment of delinquent 
        property taxes, special assessments, penalties, interest, and 
        costs levied on those parcels.  The time for redemption from 
        forfeiture expires if a redemption is not made by the later of 
        (1) 60 days after service of this notice on all persons having 
        an interest in the lands of record at the office of the county 
        recorder or registrar of titles, or (2) by the second Monday in 
        May.  The redemption must be made in my office. 
         Names (and 
         Current Filed 
         Addresses) for 
         the Taxpayers 
         and Fee Owners 
         and in Addition 
         Those Parties 
         Who Have Filed                                      Amount
         Their Addresses                        Tax      Necessary to
         Pursuant to               Legal       Parcel    Redeem as of
         section 276.041        Description    Number    Date Hereof
                                                         of Notice
         ................       ...........    ......    ............
         ................       ...........    ......    ............
           That the time for redemption of such lands from such sale 
        will expire 60 days after service of notice and the filing of 
        proof thereof in my office, as provided by law.  The redemption 
        must be made in my office.  
          FAILURE TO REDEEM SUCH THE LANDS PRIOR TO THE EXPIRATION 
              OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 
              FORFEITURE OF SAID LAND TO THE STATE OF MINNESOTA. 
           Inquiries as to the these proceedings set forth above can 
        be made to the County Auditor for the ............... County of 
        ..............., whose address is set forth below.  
           Witness my hand and official seal this 
        ............................  day of ................, .......  
                                          ......................... 
                                                 County Auditor   
           (OFFICIAL SEAL) 
                                          ......................... 
                                                 (Address)   
                                          .........................   
                                                (Telephone)."  
           Such The notice shall must be posted by the auditor in the 
        auditor's office, subject to public inspection, and shall must 
        remain so posted until at least one week after the date of the 
        last publication of notice, as hereinafter provided in this 
        section.  Proof of such posting shall must be made by the 
        certificate of the auditor, filed in the auditor's office.  
           Sec. 6.  Minnesota Statutes 1998, section 281.23, 
        subdivision 4, is amended to read:  
           Subd. 4.  [PROOF OF PUBLICATION.] An affidavit establishing 
        proof of publication of such the notice affidavit, as provided 
        by law, shall must be filed in the office of the county 
        auditor.  A single published notice shall be sufficient for all 
        may include parcels of land bid in at the same different tax 
        judgment sale sales, having the same period but included parcels 
        must have a common year for expiration of redemption, and 
        covered by a notice or notices kept posted during the time of 
        the publication, as hereinbefore provided.  
           Sec. 7.  Minnesota Statutes 1998, section 281.23, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SERVICE OF NOTICE.] (a) Forthwith Immediately 
        after the commencement of such publication or mailing the county 
        auditor shall deliver to the sheriff of the county or any other 
        person not less than 18 years of age a sufficient number of 
        copies of such the notice of expiration of redemption for 
        service upon on the persons in possession of all parcels of such 
        land as are actually occupied, and documentation if the 
        certified mail notice was returned as undeliverable or the 
        notice was not mailed to the address associated with the 
        property.  Within 30 days after receipt thereof of the notice, 
        the sheriff or other person serving the notice shall make such 
        investigation investigate as may be necessary to ascertain 
        whether or not the parcels covered by such the notice are 
        actually occupied parcels, and shall serve a copy of such the 
        notice of expiration of redemption upon the person in possession 
        of each parcel found to be an occupied parcel, in the manner 
        prescribed for serving summons in a civil action.  If the 
        sheriff or another person serving the notice has made at least 
        two attempts to serve the notice of expiration of redemption, 
        one between the weekday hours of 8:00 a.m. and 5:00 p.m. and the 
        other on a different day and different time period, the sheriff 
        or another person serving the notice may accomplish this service 
        by posting a copy of the notice of expiration of redemption on a 
        conspicuous location on the parcel.  The sheriff or other person 
        serving the notice shall make prompt return to the auditor as to 
        all notices so served and as to all parcels found vacant and 
        unoccupied and parcels served by posting.  Such The return shall 
        must be made upon on a copy of such the notice and shall be 
        is prima facie evidence of the facts therein stated in it. 
           If the notice is served by the sheriff, the sheriff shall 
        receive from the county, in addition to other compensation 
        prescribed by law, such fees and mileage for service on persons 
        in possession as are prescribed by law for such service in other 
        cases, and shall also receive such compensation for making 
        investigation and return as to vacant and unoccupied lands as 
        the county board may fix, subject to appeal to the district 
        court as in case of other claims against the county.  As to 
        either service upon persons in possession or return as to vacant 
        lands, the sheriff shall charge mileage only for one trip if the 
        occupants of more than two tracts are served simultaneously, and 
        in such case mileage shall must be prorated and charged 
        equitably against all such owners. 
           (b) The secretary of state shall receive sheriff's service 
        for all out-of-state interests. 
           Sec. 8.  Minnesota Statutes 1998, section 282.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CLASSIFICATION AS CONSERVATION OR 
        NONCONSERVATION.] It is the general policy of this state to 
        encourage the best use of tax-forfeited lands, recognizing that 
        some lands in public ownership should be retained and managed 
        for public benefits while other lands should be returned to 
        private ownership.  Parcels of land becoming the property of the 
        state in trust under law declaring the forfeiture of lands to 
        the state for taxes shall must be classified by the county board 
        of the county in which the parcels lie as conservation or 
        nonconservation.  In making the classification the board shall 
        consider the present use of adjacent lands, the productivity of 
        the soil, the character of forest or other growth, accessibility 
        of lands to established roads, schools, and other public 
        services, their peculiar suitability or desirability for 
        particular uses and the suitability of the forest resources on 
        the land for multiple use, sustained yield management.  The 
        classification, furthermore, must encourage and foster a mode of 
        land utilization that will facilitate the economical and 
        adequate provision of transportation, roads, water supply, 
        drainage, sanitation, education, and recreation; facilitate 
        reduction of governmental expenditures; conserve and develop the 
        natural resources; and foster and develop agriculture and other 
        industries in the districts and places best suited to them. 
           In making the classification the county board may use 
        information made available by any office or department of the 
        federal, state, or local governments, or by any other person or 
        agency possessing pertinent information at the time the 
        classification is made.  The lands may be reclassified from time 
        to time as the county board may consider considers necessary or 
        desirable, except for conservation lands held by the state free 
        from any trust in favor of any taxing district.  
           If the lands are located within the boundaries of an 
        organized town, with taxable valuation in excess of $20,000, or 
        incorporated municipality, the classification or 
        reclassification and sale must first be approved by the town 
        board of the town or the governing body of the municipality in 
        which the lands are located.  The town board of the town or the 
        governing body of the municipality is considered to have 
        approved the classification or reclassification and sale if the 
        county board is not notified of the disapproval of the 
        classification or reclassification and sale within 90 60 days of 
        the date the request for approval was transmitted to the town 
        board of the town or governing body of the municipality.  If the 
        town board or governing body desires to acquire any parcel lying 
        in the town or municipality by procedures authorized in this 
        section, it must file a written application with the county 
        board to withhold the parcel from public sale.  The application 
        must be filed within 90 60 days of the request for 
        classification or reclassification and sale.  The county board 
        shall then withhold the parcel from public sale for one year six 
        months.  A municipality or governmental subdivision shall pay 
        maintenance costs incurred by the county during the six-month 
        period while the property is withheld from public sale, provided 
        the property is not offered for public sale after the six-month 
        period.  A clerical error made by county officials does not 
        serve to eliminate the request of the town board or governing 
        body if the board or governing body has forwarded the 
        application to the county auditor. 
           Sec. 9.  Minnesota Statutes 1998, section 282.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SALE:  METHOD, REQUIREMENTS, EFFECTS.] The sale 
        shall must be conducted by the county auditor at the county seat 
        of the county in which the parcels lie, provided except that, in 
        St. Louis and Koochiching counties, the sale may be conducted in 
        any county facility within the county, and.  The parcels shall 
        must be sold for cash only and at not less than the appraised 
        value, unless the county board of the county shall have has 
        adopted a resolution providing for their sale on terms, in which 
        event the resolution shall control controls with respect thereto 
        to the sale.  When the sale is made on terms other than for cash 
        only (1) a payment of at least ten percent of the purchase price 
        must be made at the time of purchase, thereupon and the balance 
        shall must be paid in no more than ten equal annual 
        installments, or (2) the payments must be made in accordance 
        with county board policy, but in no event may the board require 
        more than 12 installments annually, and the contract term must 
        not be for more than ten years.  No Standing timber or timber 
        products shall must not be removed from these lands until an 
        amount equal to the appraised value of all standing timber or 
        timber products on the lands at the time of purchase has been 
        paid by the purchaser; provided, that in case any.  If a parcel 
        of land bearing standing timber or timber products is sold at 
        public auction for more than the appraised value, the amount bid 
        in excess of the appraised value shall must be allocated between 
        the land and the timber in proportion to the their respective 
        appraised values thereof, and no.  In that case, standing timber 
        or timber products shall must not be removed from the land until 
        the amount of the excess bid allocated to timber or timber 
        products has been paid in addition to the appraised 
        value thereof of the land.  The purchaser is entitled to 
        immediate possession, subject to the provisions of any existing 
        valid lease made in behalf of the state. 
           For sales occurring on or after July 1, 1982, the unpaid 
        balance of the purchase price is subject to interest at the rate 
        determined pursuant to section 549.09.  The unpaid balance of 
        the purchase price for sales occurring after December 31, 1990, 
        is subject to interest at the rate determined in section 279.03, 
        subdivision 1a.  The interest rate is subject to change each 
        year on the unpaid balance in the manner provided for rate 
        changes in section 549.09 or 279.03, subdivision 1a, whichever, 
        is applicable.  Interest on the unpaid contract balance on sales 
        occurring before July 1, 1982, is payable at the rate applicable 
        to the sale at the time that the sale occurred.  
           Sec. 10.  Minnesota Statutes 1998, section 282.01, 
        subdivision 7, is amended to read: 
           Subd. 7.  [COUNTY SALES; NOTICE, PURCHASE PRICE, 
        DISPOSITION.] The sale herein provided for shall must commence 
        at such the time as determined by the county board of the county 
        wherein such in which the parcels lie, shall direct are 
        located.  The county auditor shall offer the parcels of land in 
        order in which they appear in the notice of sale, and shall sell 
        them to the highest bidder, but not for a less sum less than the 
        appraised value, until all of the parcels of land shall have 
        been offered, and thereafter.  Then the county auditor shall 
        sell any remaining parcels to anyone offering to pay the 
        appraised value thereof, except that if the person could have 
        repurchased a parcel of property under section 282.012 or 
        282.241, that person shall not be allowed to may not purchase 
        that same parcel of property at the sale under this subdivision 
        for a purchase price less than the sum of all delinquent taxes 
        and, assessments, penalties, interest, and costs due at the time 
        of forfeiture computed under section 282.251, together with 
        penalties, interest, and costs that accrued or would have 
        accrued if the parcel had not forfeited to the state and any 
        special assessments for improvements certified as of the date of 
        sale.  Said The sale shall must continue until all such 
        the parcels are sold or until the county board shall order 
        orders a reappraisal or shall withdraw withdraws any or all such 
        of the parcels from sale.  Such The list of lands may be added 
        to and the added lands may be sold at any time by publishing the 
        descriptions and appraised values of such.  The added lands must 
        be:  (1) parcels of land as shall that have become forfeited and 
        classified as nonconservation since the commencement of any 
        prior sale or such; (2) parcels as shall that have been 
        reappraised, or such; (3) parcels as shall that have been 
        reclassified as nonconservation; or such (4) other parcels as 
        that are subject to sale but were omitted from the existing list 
        for any reason.  The descriptions and appraised values must be 
        published in the same manner as hereinafter provided for the 
        publication of the original list, provided that any.  Parcels 
        added to such the list shall must first be offered for sale to 
        the highest bidder before they are sold at appraised value.  All 
        parcels of land not offered for immediate sale, as well as 
        parcels of such lands as that are offered and not immediately 
        sold shall, continue to be held in trust by the state for the 
        taxing districts interested in each of said the parcels, under 
        the supervision of the county board, and such.  Those parcels 
        may be used for public purposes until sold, as directed by the 
        county board may direct. 
           Sec. 11.  Minnesota Statutes 1998, section 282.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 
        DEMOLITION.] Until after Before the sale of a parcel of 
        forfeited land the county auditor may, with the approval of the 
        county board of commissioners, provide for the repair and 
        improvement of any building or structure located upon such the 
        parcel, and may provide for maintenance of tax-forfeited lands, 
        if it is determined by the county board that such repairs or, 
        improvements, or maintenance are necessary for the operation, 
        use, preservation and safety thereof; and, of the building or 
        structure.  If so authorized by the county board, the county 
        auditor may insure any such the building or structure against 
        loss or damage resulting from fire or windstorm, may purchase 
        workers' compensation insurance to insure the county against 
        claims for injury to the persons therein employed in the 
        building or structure by the county, and may insure the county, 
        its officers and employees against claims for injuries to 
        persons or property because of the management, use or operation 
        of such the building or structure.  Such The county auditor may, 
        with the approval of the county board, provide for the 
        demolition of any such the building or structure, which has been 
        determined by the county board to be within the purview of 
        section 299F.10, and for the sale of salvaged 
        materials therefrom from the building or structure.  Such The 
        county auditor, with the approval of the county board, may 
        provide for the sale of abandoned personal property under either 
        chapter 345 or 566, as appropriate.  The net proceeds from any 
        sale of such the personal property, salvaged materials, of 
        timber or other products, or leases made under this law shall 
        must be deposited in the forfeited tax sale fund and shall must 
        be distributed in the same manner as if the parcel had been sold.
           Such The county auditor, with the approval of the county 
        board, may provide for the demolition of any structure or 
        structures on tax-forfeited lands, if in the opinion of the 
        county board, the county auditor, and the land commissioner, if 
        there be is one, the sale of such the land with such the 
        structure or structures thereon on it, or the continued 
        existence of such the structure or structures by reason of age, 
        dilapidated condition or excessive size as compared with nearby 
        structures, will result in a material lessening of net tax 
        capacities of real estate in the vicinity of such the 
        tax-forfeited lands, or if the demolition of such the structure 
        or structures will aid in disposing of such the tax-forfeited 
        property. 
           Before the sale of a parcel of forfeited land located in an 
        urban area, the county auditor may with the approval of the 
        county board provide for the grading thereof of the land by 
        filling or the removal of any surplus material therefrom, and 
        where from it.  If the physical condition of forfeited lands is 
        such that a reasonable grading thereof of the lands is necessary 
        for the protection and preservation of the property of any 
        adjoining owner, such the adjoining property owner or owners may 
        make application apply to the county board to have such the 
        grading done.  If, after considering said the application, the 
        county board believes that such the grading will enhance the 
        value of such the forfeited lands commensurate with the cost 
        involved, it may approve the same it, and any such the work 
        shall must be performed under the supervision of the county or 
        city engineer, as the case may be, and the expense thereof paid 
        from the forfeited tax sale fund. 
           Sec. 12.  Minnesota Statutes 1998, section 282.05, is 
        amended to read: 
           282.05 [PROCEEDS APPORTIONED.] 
           The net proceeds received from the sale or rental of 
        forfeited lands shall be apportioned to the general funds of the 
        state or municipal subdivision thereof, in the manner 
        hereinafter provided, and shall be first used by the municipal 
        subdivision to retire any indebtedness then existing in section 
        282.08.  
           Sec. 13.  Minnesota Statutes 1998, section 282.08, is 
        amended to read: 
           282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 
           The net proceeds from the sale or rental of any parcel of 
        forfeited land, or from the sale of any products therefrom from 
        the forfeited land, shall must be apportioned by the county 
        auditor to the taxing districts interested therein in the land, 
        as follows: 
           (1) Such the portion as may be required to pay any amounts 
        included in the appraised value under section 282.01, 
        subdivision 3, as representing increased value due to any public 
        improvement made after forfeiture of such the parcel to the 
        state, but not exceeding the amount certified by the clerk of 
        the municipality, shall must be apportioned to the municipal 
        subdivision entitled thereto to it; 
           (2) Such the portion as may be required to pay any amount 
        included in the appraised value under section 282.019, 
        subdivision 5, representing increased value due to response 
        actions taken after forfeiture of such the parcel to the state, 
        but not exceeding the amount of expenses certified by the 
        pollution control agency or the commissioner of 
        agriculture, shall must be apportioned to the agency or the 
        commissioner of agriculture and deposited in the fund from which 
        the expenses were paid; 
           (3) Such the portion of the remainder as may be required to 
        discharge any special assessment chargeable against such the 
        parcel for drainage or other purpose whether due or deferred at 
        the time of forfeiture, shall must be apportioned to the 
        municipal subdivision entitled thereto to it; and 
           (4) any balance shall must be apportioned as follows: 
           (a) Any (i) The county board may annually by resolution set 
        aside no more than 30 percent of the receipts remaining to be 
        used for timber development on tax-forfeited land and dedicated 
        memorial forests, to be expended under the supervision of the 
        county board.  It shall must be expended only on projects 
        approved by the commissioner of natural resources. 
           (b) Any (ii) The county board may annually by resolution 
        set aside no more than 20 percent of the receipts remaining to 
        be used for the acquisition and maintenance of county parks or 
        recreational areas as defined in sections 398.31 to 398.36, to 
        be expended under the supervision of the county board. 
           (c) If the board does not avail itself of the authority 
        under paragraph (a) or (b) (iii) Any balance remaining shall 
        must be apportioned as follows:  county, 40 percent; town or 
        city, 20 percent; and school district, 40 percent, and if the 
        board avails itself of the authority under paragraph (a) or (b) 
        the balance remaining shall be apportioned among the county, 
        town or city, and school district in the proportions in this 
        paragraph above stated, provided, however, that in unorganized 
        territory that portion which should would have accrued to the 
        township shall must be administered by the county board of 
        commissioners. 
           Sec. 14.  Minnesota Statutes 1998, section 282.09, is 
        amended to read: 
           282.09 [FORFEITED TAX SALE FUND.] 
           Subdivision 1.  [MONEY PLACED IN FUND; FEES AND 
        DISBURSEMENTS.] The county auditor and county treasurer shall 
        place all money received through the operation of sections 
        282.01 to 282.13 in a fund to be known as the forfeited tax sale 
        fund, and all disbursements and costs shall must be charged 
        against that fund, when allowed by the county board.  Members of 
        the county board may be paid a per diem pursuant to section 
        375.055, subdivision 1, and reimbursed for their necessary 
        expenses, and may receive mileage as fixed by law.  The amount 
        of compensation of a land commissioner and assistants, if a land 
        commissioner is appointed, shall must be in the amount 
        determined by the county board.  The county auditor shall must 
        receive 50 cents for each certificate of sale, each contract for 
        deed and each lease executed by the auditor, and, in counties 
        where no land commissioner is appointed, additional annual 
        compensation, not exceeding $300, as fixed by the county board.  
        The amount of compensation of any other clerical help that may 
        be needed by the county auditor or land commissioner shall must 
        be in the amount determined by the county board.  All 
        compensation provided for herein shall be in this subdivision is 
        in addition to other compensation allowed by law.  Fees so 
        charged in addition to the fee imposed in section 282.014 shall 
        must be included in the annual settlement by the county auditor 
        as hereinafter provided.  On or before February 1 each year, the 
        commissioner of revenue shall certify to the commissioner of 
        finance, by counties, the total number of state deeds issued and 
        reissued during the preceding calendar year for which such fees 
        are charged and the total amount thereof of fees.  On or before 
        March 1 each year, each county shall remit to the commissioner 
        of revenue, from the forfeited tax sale fund, the aggregate 
        amount of the fees imposed by section 282.014 in the preceding 
        calendar year.  The commissioner of revenue shall deposit the 
        amounts received in the state treasury to the credit of the 
        general fund.  When disbursements are made from the fund for 
        repairs, refunds, expenses of actions to quiet title, or any 
        other purpose which particularly affects specific parcels of 
        forfeited lands, the amount of such the disbursements shall must 
        be charged to the account of the taxing districts interested in 
        such parcels forfeited tax sale fund.  The county auditor shall 
        make an annual settlement of the net proceeds received from 
        sales and rentals by the operation of sections 282.01 to 282.13, 
        on the settlement day determined in section 276.09, for the 
        preceding calendar year. 
           Subd. 2.  [EXPENDITURES.] In all counties, from said 
        "Forfeited Tax Sale Fund," the authorities duly charged with the 
        execution of responsible for carrying out the duties imposed by 
        sections 282.01 to 282.13, at their discretion, may expend 
        moneys in repairing from the forfeited tax sale fund to repair 
        any sewer or water main either inside or outside of any curb 
        line situated along any property forfeited to the state for 
        nonpayment of taxes, to acquire and maintain equipment used 
        exclusively for the maintenance and improvement of tax-forfeited 
        lands, and to cut down, otherwise destroy or eradicate noxious 
        weeds on all tax-forfeited lands.  In any year, the money to be 
        expended for the cutting down, destruction or eradication of 
        noxious weeds shall not exceed in amount more than ten percent 
        of the net proceeds of said "Forfeited Tax Sale Fund" during the 
        preceding calendar year, or $10,000, whichever is the lesser 
        sum, and to maintain tax-forfeited lands.  
           Sec. 15.  Minnesota Statutes 1998, section 282.241, is 
        amended to read: 
           282.241 [REPURCHASE AFTER FORFEITURE.] 
           The owner at the time of forfeiture, or the owner's heirs, 
        devisees, or representatives, or any person to whom the right to 
        pay taxes was given by statute, mortgage, or other agreement, 
        may repurchase any parcel of land claimed by the state to be 
        forfeited to the state for taxes unless before the time 
        repurchase is made the parcel is sold under installment 
        payments, or otherwise, by the state as provided by law, or is 
        under mineral prospecting permit or lease, or proceedings have 
        been commenced by the state or any of its political subdivisions 
        or by the United States to condemn such the parcel of land.  The 
        parcel of land may be repurchased for the sum of all delinquent 
        taxes and assessments computed under section 282.251, together 
        with penalties, interest, and costs, that accrued or would have 
        accrued if the parcel of land had not forfeited to the state.  
        Except for property which was homesteaded on the date of 
        forfeiture, such repurchase shall be is permitted during one 
        year only from the date of forfeiture, and in any case only 
        after the adoption of a resolution by the board of county 
        commissioners determining that thereby by repurchase undue 
        hardship or injustice resulting from the forfeiture will be 
        corrected, or that permitting such the repurchase will promote 
        the use of such the lands that will best serve the public 
        interest.  If the county board has good cause to believe that a 
        repurchase installment payment plan for a particular parcel is 
        unnecessary and not in the public interest, the county board may 
        require as a condition of repurchase that the entire repurchase 
        price be paid at the time of repurchase.  A repurchase shall 
        be is subject to any easement, lease, or other encumbrance 
        granted by the state prior thereto before the repurchase, and if 
        said the land is located within a restricted area established by 
        any county under Laws 1939, chapter 340, such the repurchase 
        shall must not be permitted unless said the resolution with 
        respect thereto approving the repurchase is adopted by the 
        unanimous vote of the board of county commissioners. 
           The person seeking to repurchase under this section shall 
        pay all maintenance costs incurred by the county auditor during 
        the time the property was tax-forfeited. 
           Sec. 16.  Minnesota Statutes 1998, section 282.261, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SERVICE FEE.] The county auditor may collect a 
        service fee to cover administrative costs as set by the county 
        board for each repurchase contract approved application received 
        after July 1, 1985.  The fee shall must be paid at the time of 
        repurchase application and shall must be credited to the county 
        general revenue fund. 
           Sec. 17.  Minnesota Statutes 1998, section 282.261, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [COUNTY MAY IMPOSE CONDITIONS OF REPURCHASE.] The 
        county auditor, after receiving county board approval, may 
        impose conditions on repurchase of tax-forfeited lands limiting 
        the use of the parcel subject to the repurchase, including, but 
        not limited to, environmental remediation action plan 
        restrictions or covenants, or easements for lines or equipment 
        for telephone, telegraph, electric power, or telecommunications. 
           Sec. 18.  Minnesota Statutes 1998, section 283.10, is 
        amended to read: 
           283.10 [APPLICATION MUST BE MADE WITHIN TWO YEARS.] 
           No such refundment refund shall be granted unless an 
        application therefor shall be duly for refund is approved and 
        presented to the commissioner of revenue within two years from 
        the date of such tax certificate or the state assignment 
        certificate.  
           Sec. 19.  Minnesota Statutes 1998, section 375.192, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROCEDURE, CONDITIONS.] 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 sections 
        469.1812 to 469.1815, no reduction or abatement may be granted 
        on the basis of providing an incentive for economic development 
        or redevelopment.  Except as provided in section 375.194, the 
        county board is authorized to may 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 when the reduction of taxes, costs, penalties, 
        and interest exceed $10,000, the county board shall give 20 
        days' notice within 20 days 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. 20.  Minnesota Statutes 1998, section 383C.482, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUDITOR TO SEARCH RECORDS; CERTIFICATES.] 
        The St. Louis county auditor, upon written application of any 
        person, shall make search of the records of the auditor's office 
        and the county treasurer's office, and ascertain the amount of 
        current tax against any lot or parcel of land described in the 
        application and the existence of all tax liens and tax sales as 
        to such the lot or parcel of land, and certify the result of 
        such the search under the seal of office, giving the description 
        of the lot or parcel of land, the amount of the current tax, if 
        any, and all tax liens and tax sales shown by such records, and 
        the amount thereof of liens and tax sales, the year of tax 
        covered by such the lien, and the date of tax sale, and the name 
        of the purchaser at such tax sale.  For the purpose of 
        ascertaining the current tax against such a lot or parcel of 
        land, the county auditor has the right of access to the records 
        of current taxes in the office of the county treasurer.  
           Sec. 21.  [REPEALER.] 
           Minnesota Statutes 1998, sections 92.22; 280.27; 281.13; 
        281.38; 284.01; 284.02; 284.03; 284.04; 284.05; and 284.06, are 
        repealed. 
           Sec. 22.  [EFFECTIVE DATES.] 
           This article is effective September 1, 1999, except that 
        sections 11 and 13 to 15 are effective beginning January 1, 
        2000, and except that section 12 is effective for net proceeds 
        received after the date of final enactment of this act. 
                                   ARTICLE 14 
                       WATER AND SANITARY SEWER DISTRICTS 
           Section 1.  [CEDAR LAKE AREA WATER AND SANITARY SEWER 
        DISTRICT; DEFINITIONS.] 
           Subdivision 1.  [APPLICATION.] In sections 1 to 19, the 
        definitions in this section apply. 
           Subd. 2.  [DISTRICT.] "Cedar lake area water and sanitary 
        sewer district" and "district" mean the area over which the 
        Cedar lake area water and sanitary sewer board has jurisdiction, 
        which includes the area within the city of New Prague and Helena 
        and Cedar Lake townships in Scott county.  The district shall 
        precisely describe the area over which it has jurisdiction by a 
        metes and bounds description in the comprehensive plan adopted 
        pursuant to section 5.  The territory may not be larger than the 
        area encompassed by the Cedar Lake improvement district, but it 
        may be smaller and the area may include a route along public 
        rights-of-way from Cedar Lake to the city of New Prague along 
        which the sewer main is laid. 
           Subd. 3.  [BOARD.] "Water and sanitary sewer board" or 
        "board" means the Cedar lake area water and sanitary sewer board 
        established for the district as provided in subdivision 2. 
           Subd. 4.  [PERSON.] "Person" means an individual, 
        partnership, corporation, limited liability company, 
        cooperative, or other organization or entity, public or private. 
           Subd. 5.  [LOCAL GOVERNMENTAL UNITS.] "Local governmental 
        units" or "governmental units" means Scott county, the city of 
        New Prague, and Helena and Cedar Lake Townships in Scott county. 
           Subd. 6.  [ACQUISITION; BETTERMENT.] "Acquisition" and 
        "betterment" have the meanings given in Minnesota Statutes, 
        section 475.51. 
           Subd. 7.  [AGENCY.] "Agency" means the Minnesota pollution 
        control agency created in Minnesota Statutes, section 116.02. 
           Subd. 8.  [SEWAGE.] "Sewage" means all liquid or 
        water-carried waste products from whatever sources derived, 
        together with any groundwater infiltration and surface water as 
        may be present. 
           Subd. 9.  [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 
        water" and "sewer system" have the meanings given in Minnesota 
        Statutes, section 115.01. 
           Subd. 10.  [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 
        works" and "disposal system" have the meanings given in 
        Minnesota Statutes, section 115.01. 
           Subd. 11.  [INTERCEPTOR.] "Interceptor" means a sewer and 
        its necessary appurtenances, including but not limited to mains, 
        pumping stations, and sewage flow-regulating and -measuring 
        stations, that is: 
           (1) designed for or used to conduct sewage originating in 
        more than one local governmental unit; 
           (2) designed or used to conduct all or substantially all 
        the sewage originating in a single local governmental unit from 
        a point of collection in that unit to an interceptor or 
        treatment works outside that unit; or 
           (3) determined by the board to be a major collector of 
        sewage used or designed to serve a substantial area in the 
        district. 
           Subd. 12.  [DISTRICT DISPOSAL SYSTEM.] "District disposal 
        system" means any and all interceptors or treatment works owned, 
        constructed, or operated by the board unless designated by the 
        board as local water and sanitary sewer facilities. 
           Subd. 13.  [MUNICIPALITY.] "Municipality" means any town or 
        home rule charter or statutory city. 
           Subd. 14.  [TOTAL COSTS.] "Total costs of acquisition and 
        betterment" and "costs of acquisition and betterment" mean all 
        acquisition and betterment expenses permitted to be financed out 
        of stopped bond proceeds issued in accordance with section 13, 
        whether or not the expenses are in fact financed out of the bond 
        proceeds. 
           Subd. 15.  [CURRENT COSTS.] "Current costs of acquisition, 
        betterment, and debt service" means interest and principal 
        estimated to be due during the budget year on bonds issued to 
        finance said acquisition and betterment and all other costs of 
        acquisition and betterment estimated to be paid during the year 
        from funds other than bond proceeds and federal or state grants. 
           Subd. 16.  [RESIDENT.] "Resident" means the owner of a 
        dwelling located in the district and receiving water or sewer 
        service. 
           Sec. 2.  [WATER AND SANITARY SEWER BOARD.] 
           Subdivision 1.  [ESTABLISHMENT.] A water and sanitary sewer 
        district is established in Helena and Cedar Lake townships and 
        the city of New Prague in Scott county, to be known as the Cedar 
        lake area water and sanitary sewer district.  The water and 
        sewer district is under the control and management of the Cedar 
        lake area water and sanitary sewer board.  The board is 
        established as a public corporation and political subdivision of 
        the state with perpetual succession and all the rights, powers, 
        privileges, immunities, and duties granted to or imposed upon a 
        municipal corporation, as provided in sections 1 to 19.  
           Subd. 2.  [MEMBERS AND SELECTION.] The board is composed of 
        seven members selected as provided in this subdivision.  Each of 
        the town boards of the townships shall meet to appoint two 
        residents to the water and sanitary sewer board.  The township 
        appointees must live on Cedar lake and must be served by the 
        system.  One member must be selected by the city of New Prague.  
        Two members must be selected by the Scott county board of 
        commissioners.  Each member has one vote.  The first terms are 
        as follows:  two for one year, two for two years, and three for 
        three years, fixed by lot at the district's first meeting.  
        Thereafter, all terms are for three years. 
           Subd. 3.  [TIME LIMITS FOR SELECTION.] The board members 
        must be selected as provided in subdivision 2 within 60 days 
        after sections 1 to 19 are effective.  The successor to each 
        board member must be selected at any time within 60 days before 
        the expiration of the member's term in the same manner as the 
        predecessor was selected.  A vacancy on the board must be filled 
        within 60 days after it occurs. 
           Subd. 4.  [VACANCIES.] If the office of a board member 
        becomes vacant, the vacancy must be filled for the unexpired 
        term in the manner provided for selection of the member who 
        vacated the office.  The office is deemed vacant under the 
        conditions specified in Minnesota Statutes, section 351.02. 
           Subd. 5.  [REMOVAL.] A board member may be removed by the 
        unanimous vote of the governing body appointing the member, with 
        or without cause, or for malfeasance or nonfeasance in the 
        performance of official duties as provided by Minnesota 
        Statutes, sections 351.14 to 351.23. 
           Subd. 6.  [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 
        certificate of selection of every board member selected under 
        subdivision 2 stating the term for which selected, must be made 
        by the respective town clerks.  The certificates, with the 
        approval appended by other authority, if required, must be filed 
        with the secretary of state.  Counterparts thereof must be 
        furnished to the board member and the secretary of the board.  
        Each member shall qualify by taking and subscribing the oath of 
        office prescribed by the Minnesota Constitution, article 5, 
        section 8.  The oath, duly certified by the official 
        administering the same, must be filed with the secretary of 
        state and the secretary of the board. 
           Subd. 7.  [BOARD MEMBERS' COMPENSATION.] Each board member, 
        except the chair, may be paid a per diem compensation in 
        accordance with the board's bylaws for meetings and for other 
        services as are specifically authorized by the board, not to 
        exceed the per diem amount under Minnesota Statutes, section 
        15.0575, subdivision 3, and not to exceed $1,000 in any one year.
        The chair may be paid a per diem compensation in accordance with 
        the board's bylaws for meetings and for other services 
        specifically authorized by the board, not to exceed the per diem 
        amount under Minnesota Statutes, section 15.0575, subdivision 3, 
        and not to exceed $1,500 in any one year.  All members of the 
        board must be reimbursed for all reasonable and necessary 
        expenses actually incurred in the performance of duties. 
           Sec. 3.  [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 
        OF BOARD.] 
           Subdivision 1.  [ORGANIZATION; OFFICERS; MEETINGS; 
        SEAL.] After the selection and qualification of all board 
        members, the board must meet to organize the board at the call 
        of any two board members, upon seven days' 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 
        is 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 and conduct other 
        organizational business as may be necessary.  Thereafter the 
        board shall meet regularly at the time and place that the board 
        designates by resolution.  Special meetings may be held at any 
        time upon call of the chair or any two members, upon written 
        notice sent by mail to each member at least three days before 
        the meeting, or upon 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 
        sections 1 to 19, any action within the authority of the board 
        may be taken by the affirmative vote of a majority of the board 
        and may be taken by regular or adjourned regular meeting or at a 
        duly held special meeting, but in any case only if a quorum is 
        present.  Meetings of the board must be open to the public.  The 
        board may adopt a seal, which must be officially and judicially 
        noticed, to authenticate instruments executed by its authority, 
        but omission of the seal does not affect the validity of any 
        instrument. 
           Subd. 2.  [CHAIR.] The board shall elect a chair from its 
        membership.  The term of the first chair of the board expires on 
        January 1, 2001, and the terms of successor chairs expire on 
        January 1 of each succeeding year.  The 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 the chair 
        by the board.  The board shall elect a vice-chair from its 
        membership to act for the chair during temporary absence or 
        disability. 
           Subd. 3.  [SECRETARY AND TREASURER.] The board shall select 
        persons who may, but need not be, members of the board, to act 
        as its secretary and treasurer.  The two offices may be combined.
        The secretary and treasurer shall hold office at the pleasure of 
        the board, subject to the terms of any contract of employment 
        that the board may enter into with the secretary or treasurer.  
        The secretary shall record the minutes of all meetings of the 
        board, and be the custodian of all books and records of the 
        board except those that the board entrusts to the custody of a 
        designated employee.  The treasurer is the custodian of all 
        money received by the board except as the board otherwise 
        entrusts to the custody of a designated employee.  The board may 
        appoint a deputy to perform any and all functions of either the 
        secretary or the treasurer.  A secretary or treasurer who is not 
        a member of the board or a deputy of either does not have the 
        right to vote. 
           Subd. 4.  [PUBLIC EMPLOYEES.] The executive director and 
        other persons employed by the district are public employees and 
        have all the rights and duties conferred on public employees 
        under Minnesota Statutes, sections 179A.01 to 179A.25.  The 
        board may elect to have employees become members of either the 
        public employees retirement association or the Minnesota state 
        retirement system.  The compensation and conditions of 
        employment of the employees must be governed by rules applicable 
        to state employees in the classified service and to the 
        provisions of Minnesota Statutes, chapter 15A. 
           Subd. 5.  [PROCEDURES.] The board shall adopt resolutions 
        or bylaws establishing procedures for board action, personnel 
        administration, keeping records, approving claims, authorizing 
        or making disbursements, safekeeping funds, and auditing all 
        financial operations of the board. 
           Subd. 6.  [SURETY BONDS AND INSURANCE.] The board may 
        procure surety bonds for its officers and employees, in amounts 
        deemed necessary to ensure proper performance of their duties 
        and proper accounting for funds in their custody.  It may 
        procure insurance against risks to property and liability of the 
        board and its officers, agents, and employees for personal 
        injuries or death and property damage and destruction, in 
        amounts deemed necessary or desirable, with the force and effect 
        stated in Minnesota Statutes, chapter 466. 
           Sec. 4.  [GENERAL POWERS OF BOARD.] 
           Subdivision 1.  [SCOPE.] The board has all powers necessary 
        or convenient to discharge the duties imposed upon it by law.  
        The powers include those specified in this section, but the 
        express grant or enumeration of powers does not limit the 
        generality or scope of the grant of powers contained in this 
        subdivision. 
           Subd. 2.  [SUIT.] The board may sue or be sued. 
           Subd. 3.  [CONTRACT.] The board may enter into any contract 
        necessary or proper for the exercise of its powers or the 
        accomplishment of its purposes. 
           Subd. 4.  [GIFTS, GRANTS, LOANS.] The board may accept 
        gifts, apply for and accept grants or loans of money or other 
        property from the United States, the state, or any person for 
        any of its purposes, enter into any agreement required in 
        connection with them, and hold, use, and dispose of the money or 
        property in accordance with the terms of the gift, grant, loan, 
        or agreement relating to it.  With respect to loans or grants of 
        funds or real or personal property or other assistance from any 
        state or federal government or its agency or instrumentality, 
        the board may contract to do and perform all acts and things 
        required as a condition or consideration for the gift, grant, or 
        loan pursuant to state or federal law or regulations, whether or 
        not included among the powers expressly granted to the board in 
        sections 1 to 19.  
           Subd. 5.  [COOPERATIVE ACTION.] The board may act under 
        Minnesota Statutes, section 471.59, or any other appropriate law 
        providing for joint or cooperative action between governmental 
        units. 
           Subd. 6.  [STUDIES AND INVESTIGATIONS.] The board may 
        conduct research studies and programs, collect and analyze data, 
        prepare reports, maps, charts, and tables, and conduct all 
        necessary hearings and investigations in connection with the 
        design, construction, and operation of the district disposal 
        system. 
           Subd. 7.  [EMPLOYEES, TERMS.] The board may employ on terms 
        it deems advisable, persons or firms performing engineering, 
        legal, or other services of a professional nature; require any 
        employee to obtain and file with it an individual bond or 
        fidelity insurance policy; and procure insurance in amounts it 
        deems necessary against liability of the board or its officers 
        or both, for personal injury or death and property damage or 
        destruction, with the force and effect stated in Minnesota 
        Statutes, chapter 466, and against risks of damage to or 
        destruction of any of its facilities, equipment, or other 
        property as it deems necessary. 
           Subd. 8.  [PROPERTY RIGHTS, POWERS.] The board may acquire 
        by purchase, lease, condemnation, gift, or grant, any real or 
        personal property including positive and negative easements and 
        water and air rights, and it may construct, enlarge, improve, 
        replace, repair, maintain, and operate any interceptor, 
        treatment works, or water facility determined to be necessary or 
        convenient for the collection and disposal of sewage in the 
        district.  Any local governmental unit and the commissioners of 
        transportation and natural resources are authorized to convey to 
        or permit the use of any of the above-mentioned facilities owned 
        or controlled by it, by the board, subject to the rights of the 
        holders of any bonds issued with respect to those facilities, 
        with or without compensation, without an election or approval by 
        any other governmental unit or agency.  All powers conferred by 
        this subdivision may be exercised both within or without the 
        district as may be necessary for the exercise by the board of 
        its powers or the accomplishment of its purposes.  The board may 
        hold, lease, convey, or otherwise dispose of the above-mentioned 
        property for its purposes upon the terms and in the manner it 
        deems advisable.  Unless otherwise provided, the right to 
        acquire lands and property rights by condemnation may be 
        exercised only in accordance with Minnesota Statutes, sections 
        117.011 to 117.232, and applies to any property or interest in 
        the property owned by any local governmental unit.  Property 
        devoted to an actual public use at the time, or held to be 
        devoted to such a use within a reasonable time, must not be so 
        acquired unless a court of competent jurisdiction determines 
        that the use proposed by the board is paramount to the existing 
        use.  Except in the case of property in actual public use, the 
        board may take possession of any property on which condemnation 
        proceedings have been commenced at any time after the issuance 
        of a court order appointing commissioners for its condemnation. 
           Subd. 9.  [RELATIONSHIP TO OTHER PROPERTIES.] The board may 
        construct or maintain its systems or facilities in, along, on, 
        under, over, or through public waters, streets, bridges, 
        viaducts, and other public rights-of-way without first obtaining 
        a franchise from a county or municipality having jurisdiction 
        over them.  However, the facilities must be constructed and 
        maintained in accordance with the ordinances and resolutions of 
        the county or municipality relating to constructing, installing, 
        and maintaining similar facilities on public properties and must 
        not unnecessarily obstruct the public use of those rights-of-way.
           Subd. 10.  [DISPOSAL OF PROPERTY.] 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.  The property may be sold in the manner provided 
        by Minnesota Statutes, section 469.065, insofar as practical.  
        The board may give notice of sale as it deems appropriate.  When 
        the board determines that any property or any part of the 
        district disposal system acquired from a local governmental unit 
        without compensation is no longer required but is required as a 
        local facility by the governmental unit from which it was 
        acquired, the board may by resolution transfer it to that 
        governmental unit. 
           Subd. 11.  [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 
        board may contract with the United States or any agency thereof, 
        any state or agency thereof, or any regional public planning 
        body in the state with jurisdiction over any part of the 
        district, or any other municipal or public corporation, or 
        governmental subdivision or agency or political subdivision in 
        any state, for the joint use of any facility owned by the board 
        or such entity, for the operation by that entity of any system 
        or facility of the board, or for the performance on the board's 
        behalf of any service, including but not limited to planning, on 
        terms as may be agreed upon by the contracting parties.  Unless 
        designated by the board as a local water and sanitary sewer 
        facility, any treatment works or interceptor jointly used, or 
        operated on behalf of the board, as provided in this 
        subdivision, is deemed to be operated by the board for purposes 
        of including those facilities in the district disposal system. 
           Sec. 5.  [COMPREHENSIVE PLAN.] 
           Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
        adopt a comprehensive plan for the collection, treatment, and 
        disposal of sewage in the district for a designated period the 
        board deems proper and reasonable.  The board shall prepare and 
        adopt subsequent comprehensive plans for the collection, 
        treatment, and disposal of sewage in the district for each 
        succeeding designated period as the board deems proper and 
        reasonable.  All comprehensive plans of the district shall be 
        subject to the planning and zoning authority of Scott county and 
        in conformance with all planning and zoning ordinances of Scott 
        county.  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 the disposal system will have on 
        present and future land use in the area affected.  In no case 
        shall the comprehensive plan provide for more than 325 
        connections to the disposal system.  All connections must be 
        charged a full assessment.  Connections made after the initial 
        assessment period ends must be charged an amount equal to the 
        initial assessment plus an adjustment for inflation and plus any 
        other charges determined to be reasonable and necessary by the 
        board.  Deferred assessments may be permitted, as provided for 
        in Minnesota Statutes, chapter 429.  The 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 any other details as the board deems 
        appropriate.  In developing the plans, the board shall consult 
        with persons designated for the purpose by governing bodies of 
        any governmental unit within the district to represent the 
        entities and shall consider the data, resources, and input 
        offered to the board by the entities and any planning agency 
        acting on behalf of one or more of the entities.  Each plan, 
        when adopted, must be followed in the district and may be 
        revised as often as the board deems necessary. 
           Subd. 2.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
        any subsequent comprehensive plan, the board shall hold a public 
        hearing on the proposed plan at a time and place in the district 
        that it selects.  The hearing may be continued from time to 
        time.  Not less than 45 days before the hearing, the board shall 
        publish notice of the hearing in a newspaper having general 
        circulation in the district, stating the date, time, and place 
        of the hearing, and the place where the proposed plan may be 
        examined by any interested person.  At the hearing, all 
        interested persons must be permitted to present their views on 
        the plan. 
           Sec. 6.  [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 
        ASSESSMENTS.] 
           The Cedar lake area water and sanitary sewer board, in 
        order to implement the powers granted under sections 1 to 19 to 
        establish, maintain, and administer the Cedar lake area water 
        and sanitary sewer district, may issue obligations and impose 
        special assessments against benefited property within the limits 
        of the district benefited by facilities constructed under 
        sections 1 to 19 in the manner provided for local governments by 
        Minnesota Statutes, chapter 429. 
           Sec. 7.  [SYSTEM EXPANSION; APPLICATION TO CITIES.] 
           The authority of the water and sanitary sewer board to 
        establish water or sewer or combined water and sewer systems 
        under this section extends to areas within the Cedar lake area 
        water and sanitary sewer district organized into cities when 
        requested by resolution of the governing body of the affected 
        city or when ordered by the Minnesota pollution control agency 
        after notice and hearing.  For the purpose of any petition filed 
        or special assessment levied with respect to any system, the 
        entire area to be served within a city must be treated as if it 
        were owned by a single person, and the governing body shall 
        exercise all the rights and be subject to all the duties of an 
        owner of the area, and shall have power to provide for the 
        payment of all special assessments and other charges imposed 
        upon the area with respect to the system by the appropriation of 
        money, the collection of service charges, or the levy of taxes, 
        which shall be subject to no limitation of rate or amount. 
           Sec. 8.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
           Subdivision 1.  [POWERS.] In addition to all other powers 
        conferred upon the board in sections 1 to 19, it has the powers 
        specified in this section. 
           Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board may 
        discharge the effluent from any treatment works operated by it 
        into any waters of the state, subject to approval of the agency 
        if required and in accordance with any effluent or water quality 
        standards lawfully adopted by the agency, any interstate agency, 
        or any federal agency having jurisdiction. 
           Subd. 3.  [UTILIZATION OF DISTRICT SYSTEM.] The board may 
        require any person or local governmental unit to provide for the 
        discharge of any sewage, directly or indirectly, into the 
        district disposal system, or to connect any disposal system or a 
        part of it with the district disposal system wherever reasonable 
        opportunity for connection is provided; may regulate the manner 
        in which the connections are made; may require any person or 
        local governmental unit discharging sewage into the disposal 
        system to provide preliminary treatment for it; may prohibit the 
        discharge into the district disposal system of any substance 
        that it determines will or may be harmful to the system or any 
        persons operating it; and may require any local governmental 
        unit to discontinue the acquisition, betterment, or operation of 
        any facility for the unit's disposal system wherever and so far 
        as adequate service is or will be provided by the district 
        disposal system. 
           Subd. 4.  [SYSTEM OF COST RECOVERY TO COMPLY WITH 
        APPLICABLE REGULATIONS.] Any charges, connection fees, or other 
        cost-recovery techniques imposed on persons discharging sewage 
        directly or indirectly into the district disposal system must 
        comply with applicable state and federal law, including state 
        and federal regulations governing grant applications. 
           Sec. 9.  [BUDGET.] 
           (a) The board shall prepare and adopt, on or before October 
        1 in 2000 and each year thereafter, a budget showing for the 
        following calendar year or other fiscal year determined by the 
        board, sometimes referred to in sections 1 to 19 as the budget 
        year, estimated receipts of money from all sources, including 
        but not limited to payments by each local governmental unit, 
        federal or state grants, taxes on property, and funds on hand at 
        the beginning of the year, and estimated expenditures for: 
           (1) costs of operation, administration, and maintenance of 
        the district disposal system; 
           (2) cost of acquisition and betterment of the district 
        disposal system; and 
           (3) debt service, including principal and interest, on 
        general obligation bonds and certificates issued pursuant to 
        section 13, and any money judgments entered by a court of 
        competent jurisdiction.  
           (b) Expenditures within these general categories, and any 
        other categories as the board may from time to time determine, 
        must be itemized in detail as the board prescribes.  The board 
        and its officers, agents, and employees must not spend money for 
        any purpose other than debt service without having set forth the 
        expense in the budget nor in excess of the amount set forth in 
        the budget for it.  No obligation to make an expenditure of the 
        above-mentioned type is enforceable except as the obligation of 
        the person or persons incurring it.  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 actual cash 
        receipts during the budget year exceed the total amounts 
        designated in the original budget.  The creation of any 
        obligation under 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. 10.  [ALLOCATION OF COSTS.] 
           Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
        estimated cost of administration, operation, maintenance, and 
        debt service of the district disposal system to be paid by the 
        board in each fiscal year and the estimated costs of acquisition 
        and betterment of the system that are to be paid during the year 
        from funds other than state or federal grants and bond proceeds 
        and all other previously unallocated payments made by the board 
        pursuant to sections 1 to 19 to be allocated in the fiscal year 
        are referred to as current costs and must be allocated by the 
        board as provided in subdivision 2 in the budget for that year. 
           Subd. 2.  [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 
        costs must be allocated in the district on an equitable basis as 
        the board may determine by resolution to be in the best 
        interests of the district.  The adoption or revision of any 
        method of allocation used by the board must be by the 
        affirmative vote of at least two-thirds of the members of the 
        board. 
           Sec. 11.  [TAX LEVIES.] 
           To accomplish any duty imposed on it the board may, in 
        addition to the powers granted in sections 1 to 19 and in any 
        other law or charter, exercise the powers granted any 
        municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 
        sections 115.46, 444.075, and 471.59, with respect to the area 
        in the district.  The board may levy taxes upon all taxable 
        property in the district for all or a part of the amount payable 
        to the board, pursuant to section 10, to be assessed and 
        extended as a tax upon that taxable property by the county 
        auditor for the next calendar year, free from any limit of rate 
        or amount imposed by law or charter.  The tax must be collected 
        and remitted in the same manner as other general taxes. 
           Sec. 12.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
           Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
        PROJECT.] Before the board orders any project involving the 
        acquisition or betterment of any interceptor or treatment works, 
        all or a part of the cost of which will be allocated pursuant to 
        section 10 as current costs, the board must hold a public 
        hearing on the proposed project.  The hearing must be held 
        following two publications in a newspaper having general 
        circulation in the district, stating the time and place of the 
        hearing, the general nature and location of the project, the 
        estimated total cost of acquisition and betterment, that portion 
        of costs estimated to be paid out of federal and state grants, 
        and that portion of costs estimated to be allocated.  The 
        estimates must be best available at the time of the meeting and 
        if costs exceed the estimate, the project cannot proceed until 
        an additional public hearing is held, with notice as required at 
        the initial meeting.  The two publications must be a week apart 
        and the hearing at least three days after the last publication.  
        Not less than 45 days before the hearing, notice of the hearing 
        must also be mailed to each clerk of all local governmental 
        units in the district, but failure to give mailed notice or any 
        defects in the notice does not invalidate the proceedings.  The 
        project may include all or part of one or more interceptors or 
        treatment works.  A hearing must not be held on a project unless 
        the project is within the area covered by the comprehensive plan 
        adopted by the board under section 5, except that the hearing 
        may be held simultaneously with a hearing on a comprehensive 
        plan.  A hearing is not required with respect to a project, no 
        part of the costs of which are to be allocated as the current 
        costs of acquisition, betterment, and debt service. 
           Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
        board proposes to assess against benefited property within the 
        district all or any part of the allocable costs of the project 
        as provided in subdivision 5, the board shall, not less than two 
        weeks before the hearing provided for in subdivision 1, cause 
        mailed notice of the hearing to be given to the owner of each 
        parcel within the area proposed to be specially assessed and 
        shall also give two weeks' published notice of the hearing.  The 
        notice of hearing must contain the same information provided in 
        the notice published by the board pursuant to subdivision 1, and 
        a description of the area proposed to be assessed.  For the 
        purpose of giving mailed notice, owners are those shown to be 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; but other appropriate records may be used 
        for this purpose.  For properties that are tax exempt or subject 
        to taxation on a gross earnings basis and not listed on the 
        records of the county auditor or the county treasurer, the 
        owners must be ascertained by any practicable means and mailed 
        notice given them as herein provided.  Failure to give mailed 
        notice or any defects in the notice does not invalidate the 
        proceedings of the board. 
           Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 
        adoption of the resolution calling for a hearing under this 
        section, the board shall secure from the district engineer or 
        some other competent person of the board's selection a report 
        advising it in a preliminary way as to whether the proposed 
        project is feasible and whether it should be made as proposed or 
        in connection with some other project and the estimated costs of 
        the project as recommended.  No error or omission in the report 
        invalidates the proceeding.  The board may also take other steps 
        before the hearing, as will in its judgment provide helpful 
        information in determining the desirability and feasibility of 
        the project, including but not limited to preparation of plans 
        and specifications and advertisement for bids on them.  The 
        hearing may be adjourned from time to time and a resolution 
        ordering the project may be adopted at any time within six 
        months after the date of hearing.  In ordering the project the 
        board may reduce but not increase the extent of the project as 
        stated in the notice of hearing and shall find that the project 
        as ordered is in accordance with the comprehensive plan and 
        program adopted by the board pursuant to section 5. 
           Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
        adopted by the affirmative vote of not less than two-thirds of 
        its members determines that an emergency exists requiring the 
        immediate purchase of materials or supplies or the making of 
        emergency repairs, it may order the purchase of those supplies 
        and materials and the making of the repairs before any hearing 
        required under this section.  The board must set as early a date 
        as practicable for the hearing at the time it declares the 
        emergency.  All other provisions of this section must be 
        followed in giving notice of and conducting the hearing.  
        Nothing in this subdivision prevents the board or its agents 
        from purchasing maintenance supplies or incurring maintenance 
        costs without regard to the requirements of this section. 
           Subd. 5.  [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 
        board may specially assess all or any part of the costs of 
        acquisition and betterment as provided in this subdivision, of 
        any project ordered under this section.  The special assessments 
        must be levied in accordance with Minnesota Statutes, sections 
        429.051 to 429.081, except as otherwise provided in this 
        subdivision.  No other provisions of Minnesota Statutes, chapter 
        429, apply.  For purposes of levying the special assessments, 
        the hearing on the project required in subdivision 1 serves as 
        the hearing on the making of the original improvement provided 
        for by Minnesota Statutes, section 429.051.  The area assessed 
        may be less than but may not exceed the area proposed to be 
        assessed as stated in the notice of hearing on the project 
        provided for in subdivision 2. 
           Sec. 13.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
           Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
        INDEBTEDNESS.] At any time after adoption of its annual budget 
        and in anticipation of the collection of tax and other revenues 
        estimated and set forth by the board in the budget, except in 
        the case of deficiency taxes levied under this subdivision and 
        taxes levied for the payment of certificates issued under 
        subdivision 2, the board may, by resolution, authorize the 
        issuance, negotiation, and sale, in accordance with subdivision 
        4 in the form and manner and upon terms it determines, of its 
        negotiable general obligation certificates of indebtedness in 
        aggregate principal amounts not exceeding 50 percent of the 
        total amount of tax collections and other revenues, and maturing 
        not later than three months after the close of the budget year 
        in which issued.  The proceeds of the sale of the certificates 
        must be used solely for the purposes for which the tax 
        collections and other revenues are to be expended under the 
        budget. 
           All the tax collections and other revenues included in the 
        budget for the budget year, after the expenditure of the tax 
        collections and other revenues in accordance with the budget, 
        must be irrevocably pledged and appropriated to a special fund 
        to pay the principal and interest on the certificates when due.  
        If for any reason the tax collections and other revenues are 
        insufficient to pay the certificates and interest when due, the 
        board shall levy a tax in the amount of the deficiency on all 
        taxable property in the district and shall appropriate this 
        amount when received to the special fund. 
           Subd. 2.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
        any budget year the receipts of tax and other revenues should 
        for some unforeseen cause become insufficient to pay the board's 
        current expenses, or if any public emergency should subject it 
        to the necessity of making extraordinary expenditures, the board 
        may by resolution authorize the issuance, negotiation, and sale, 
        in accordance with subdivision 4 in the form and manner and upon 
        the terms and conditions it determines, of its negotiable 
        general obligation certificates of indebtedness in an amount 
        sufficient to meet the deficiency.  The board shall levy on all 
        taxable property in the district a tax sufficient to pay the 
        certificates and interest on the certificates and shall 
        appropriate all collections of the tax to a special fund created 
        for the payment of the certificates and the interest on them.  
        Certificates issued under this subdivision mature not later than 
        April 1 in the year following the year in which the tax is 
        collectible. 
           Subd. 3.  [GENERAL OBLIGATION BONDS.] The board may by 
        resolution authorize the issuance of general obligation bonds 
        for the acquisition or betterment of any part of the district 
        disposal system, including but without limitation the payment of 
        interest during construction and for a reasonable period 
        thereafter, or for the refunding of outstanding bonds, 
        certificates of indebtedness, or judgments.  The board shall 
        pledge its full faith and credit and taxing power for the 
        payment of the bonds and shall provide for the issuance and sale 
        and for the security of the bonds in the manner provided in 
        Minnesota Statutes, chapter 475.  The board has the same powers 
        and duties as a municipality issuing bonds under that law, 
        except that no election is required and the debt limitations of 
        Minnesota Statutes, chapter 475, do not apply to the bonds.  The 
        board may also pledge for the payment of the bonds and deduct 
        from the amount of any tax levy required under Minnesota 
        Statutes, section 475.61, subdivision 1, and any revenues 
        receivable under any state and federal grants anticipated by the 
        board and may covenant to refund the bonds if and when and to 
        the extent that for any reason the revenues, together with other 
        funds available and appropriated for that purpose, are not 
        sufficient to pay all principal and interest due or about to 
        become due, provided that the revenues have not been anticipated 
        by the issuance of certificates under subdivision 1. 
           Subd. 4.  [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 
        Certificates issued under subdivisions 1 and 2 may be issued and 
        sold by negotiation, without public sale, and may be sold at a 
        price equal to the percentage of the par value of the 
        certificates, plus accrued interest, and bearing interest at the 
        rate determined by the board.  An election is not required to 
        authorize the issuance of the certificates.  The certificates 
        must bear the same rate of interest after maturity as before and 
        the full faith and credit and taxing power of the board must be 
        pledged to the payment of the certificates. 
           Sec. 14.  [DEPOSITORIES.] 
           The board shall designate one or more national or state 
        banks, or trust companies authorized to do a banking business, 
        as official depositories for money of the board, and shall 
        require the treasurer to deposit all or a part of the money in 
        those institutions.  The designation must be in writing and set 
        forth all the terms and conditions upon which the deposits are 
        made, and must be signed by the chair and treasurer and made a 
        part of the minutes of the board. 
           Sec. 15.  [MONEY, ACCOUNTS, AND INVESTMENTS.] 
           Subdivision 1.  [RECEIPT AND APPLICATION.] Money received 
        by the board must be deposited or invested by the treasurer and 
        disposed of as the board may direct in accordance with its 
        budget; provided that any money that has been pledged or 
        dedicated by the board to the payment of obligations or interest 
        on the obligations or expenses incident thereto, or for any 
        other specific purpose authorized by law, must be paid by the 
        treasurer into the fund to which it has been pledged. 
           Subd. 2.  [FUNDS AND ACCOUNTS.] (a) The board's treasurer 
        shall establish funds and accounts as may be necessary or 
        convenient to handle the receipts and disbursements of the board 
        in an orderly fashion. 
           (b) The funds and accounts must be audited annually by a 
        certified public accountant at the expense of the district. 
           Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
        those funds and accounts may be deposited in the official 
        depositories of the board or invested as provided in this 
        subdivision.  Any amount not currently needed or required by law 
        to be kept in cash on deposit may be invested in obligations 
        authorized for the investment of municipal sinking funds by 
        Minnesota Statutes, section 475.66.  The money may also be held 
        under certificates of deposit issued by any official depository 
        of the board. 
           Subd. 4.  [BOND PROCEEDS.] The use of proceeds of all bonds 
        issued by the board for the acquisition and betterment of the 
        district disposal system, and the use, other than investment, of 
        all money on hand in any sinking fund or funds of the board, is 
        governed by the provisions of Minnesota Statutes, chapter 475, 
        the provisions of sections 1 to 19, and the provisions of 
        resolutions authorizing the issuance of the bonds.  When 
        received, the bond proceeds must be transferred to the treasurer 
        of the board for safekeeping, investment, and payment of the 
        costs for which they were issued. 
           Subd. 5.  [AUDIT.] The board shall provide for and pay the 
        cost of an independent annual audit of its official books and 
        records by the state auditor or a public accountant authorized 
        to perform that function under Minnesota Statutes, chapter 6. 
           Sec. 16.  [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 
        OUTSIDE THE JURISDICTION OF THE BOARD.] 
           (a) The board may contract with the United States or any 
        agency of the federal government, any state or its agency, or 
        any municipal or public corporation, governmental subdivision or 
        agency or political subdivision in any state, outside the 
        jurisdiction of the board, for furnishing services to those 
        entities, including but not limited to planning for and the 
        acquisition, betterment, operation, administration, and 
        maintenance of any or all interceptors, treatment works, and 
        local water and sanitary sewer facilities.  The board may 
        include as one of the terms of the contract that the entity must 
        pay to the board an amount 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 in the district.  When payments are made by entities 
        to the board, they must be applied in reduction of the total 
        amount of costs thereafter allocated in the district, on an 
        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 10, subdivision 2.  A 
        municipality in the state of Minnesota may enter into a contract 
        and perform all acts and things required as a condition or 
        consideration therefor consistent with the purposes of sections 
        1 to 19, whether or not included among the powers otherwise 
        granted to the municipality by law or charter. 
           (b) The board shall contract with a qualified entity to 
        make necessary inspections of the district facilities, and to 
        otherwise process or assist in processing any of the work of the 
        district. 
           Sec. 17.  [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 
        AND EQUIPMENT.] 
           When the board orders a project involving the acquisition 
        or betterment of a part of the district disposal system, it 
        shall cause plans and specifications of the project to be made, 
        or if previously made, to be modified, if necessary, and to be 
        approved by the agency if required, and after any required 
        approval by the agency, one or more contracts for work and 
        materials called for by the plans and specification may be 
        awarded as provided in Minnesota Statutes, section 471.345. 
           Sec. 18.  [PROPERTY EXEMPT FROM TAXATION.] 
           Any properties, real or personal, owned, leased, 
        controlled, used, or occupied by the water and sanitary sewer 
        board for any purpose under sections 1 to 19 are declared to be 
        acquired, owned, leased, controlled, used, and occupied for 
        public, governmental, and municipal purposes, and are exempt 
        from taxation by the state or any political subdivision of the 
        state.  The properties are subject to special assessments levied 
        by a political subdivision for a local improvement in amounts 
        proportionate to and not exceeding the special benefit received 
        by the properties from the improvement. 
           Sec. 19.  [RELATION TO EXISTING LAWS.] 
           Sections 1 to 19 must be given full effect notwithstanding 
        the provisions of any law or charter inconsistent with sections 
        1 to 19.  The powers conferred on the board under sections 1 to 
        19 do not in any way diminish or supersede the powers conferred 
        on the agency by Minnesota Statutes, chapters 115 to 116. 
           Sec. 20.  [BANNING JUNCTION AREA WATER AND SANITARY SEWER 
        DISTRICT; DEFINITIONS.] 
           Subdivision 1.  [APPLICATION.] For the purposes of sections 
        20 to 38, the terms defined in this section have the meanings 
        given them. 
           Subd. 2.  [DISTRICT.] "Banning Junction area water and 
        sanitary sewer district" and "district" mean the area over which 
        the Banning Junction area water and sanitary sewer board has 
        jurisdiction, including the town of Finlayson and the city of 
        Finlayson in Pine county and Banning state park, but only that 
        part of the township described in the comprehensive plan adopted 
        by the board pursuant to section 24. 
           Subd. 3.  [BOARD.] "Water and sanitary sewer board" or 
        "board" means the Banning Junction area water and sanitary sewer 
        board established for the district as provided in subdivision 2. 
           Subd. 4.  [PERSON.] "Person" means an individual, 
        partnership, corporation, limited liability company, 
        cooperative, or other organization or entity, public or private. 
           Subd. 5.  [LOCAL GOVERNMENTAL UNITS.] "Local governmental 
        units" or "governmental units" means the town of Finlayson, the 
        department of natural resources, and the city of Finlayson. 
           Subd. 6.  [ACQUISITION; BETTERMENT.] "Acquisition" and 
        "betterment" have the meanings given in Minnesota Statutes, 
        chapter 475. 
           Subd. 7.  [AGENCY.] "Agency" means the Minnesota pollution 
        control agency created in Minnesota Statutes, chapter 116. 
           Subd. 8.  [SEWAGE.] "Sewage" means all liquid or 
        water-carried waste products from whatever sources derived, 
        together with any groundwater infiltration and surface water as 
        may be present. 
           Subd. 9.  [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 
        water" and "sewer system" have the meanings given in Minnesota 
        Statutes, section 115.01. 
           Subd. 10.  [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 
        works" and "disposal system" have the meanings given in 
        Minnesota Statutes, section 115.01. 
           Subd. 11.  [INTERCEPTOR.] "Interceptor" means a sewer and 
        its necessary appurtenances, including but not limited to mains, 
        pumping stations, and sewage flow-regulating and -measuring 
        stations, that is: 
           (1) designed for or used to conduct sewage originating in 
        more than one local governmental unit; 
           (2) designed or used to conduct all or substantially all 
        the sewage originating in a single local governmental unit from 
        a point of collection in that unit to an interceptor or 
        treatment works outside that unit; or 
           (3) determined by the board to be a major collector of 
        sewage used or designed to serve a substantial area in the 
        district. 
           Subd. 12.  [DISTRICT DISPOSAL SYSTEM.] "District disposal 
        system" means any and all interceptors or treatment works owned, 
        constructed, or operated by the board unless designated by the 
        board as local water and sanitary sewer facilities. 
           Subd. 13.  [MUNICIPALITY.] "Municipality" means any home 
        rule charter or statutory city or town. 
           Subd. 14.  [TOTAL COSTS.] "Total costs of acquisition and 
        betterment" and "costs of acquisition and betterment" mean all 
        acquisition and betterment expenses permitted to be financed out 
        of stopped bond proceeds issued in accordance with section 32, 
        whether or not the expenses are in fact financed out of the bond 
        proceeds. 
           Subd. 15.  [CURRENT COSTS.] "Current costs of acquisition, 
        betterment, and debt service" means interest and principal 
        estimated to be due during the budget year on bonds issued to 
        finance said acquisition and betterment and all other costs of 
        acquisition and betterment estimated to be paid during the year 
        from funds other than bond proceeds and federal or state grants. 
           Subd. 16.  [RESIDENT.] "Resident" means the owner of a 
        dwelling located in the district and receiving water or sewer 
        service. 
           Sec. 21.  [WATER AND SANITARY SEWER BOARD.] 
           Subdivision 1.  [ESTABLISHMENT.] A water and sanitary sewer 
        district is established for the town of Finlayson, for the 
        Banning state park, under the jurisdiction of the Minnesota 
        department of natural resources, and for the city of Finlayson 
        in Pine county, to be known as the Banning Junction area water 
        and sanitary sewer district.  The water and sewer district is 
        under the control and management of the Banning Junction area 
        water and sanitary sewer board.  The board is established as a 
        public corporation and political subdivision of the state with 
        perpetual succession and all the rights, powers, privileges, 
        immunities, and duties that may be validly granted to or imposed 
        upon a municipal corporation, as provided in sections 20 to 38. 
           Subd. 2.  [MEMBERS AND SELECTION.] The board is composed of 
        five members selected as follows:  the town board shall meet to 
        appoint three members, one of whom shall be an elected township 
        officer, and two of whom shall be persons served by the system, 
        the city shall appoint one member, and the department of natural 
        resources shall appoint one member to the water and sanitary 
        sewer board and each board member shall have one vote.  The 
        first terms must be as follows:  one for one year, two for two 
        years, and two for three years, fixed by lot at the district's 
        first meeting.  Thereafter, all terms are for three years. 
           Subd. 3.  [TIME LIMITS FOR SELECTION.] The board members 
        must be selected as provided in subdivision 2 within 60 days 
        after sections 20 to 38 become effective.  The successor to each 
        board member must be selected at any time within 60 days before 
        the expiration of the member's term in the same manner as the 
        predecessor was selected.  A vacancy on the board must be filled 
        within 60 days after it occurs. 
           Subd. 4.  [VACANCIES.] If the office of a board member 
        becomes vacant, the vacancy must be filled for the unexpired 
        term in the manner provided for selection of the member who 
        vacated the office.  The office is deemed vacant under the 
        conditions specified in Minnesota Statutes, section 351.02. 
           Subd. 5.  [REMOVAL.] A board member may be removed by the 
        unanimous vote of the governing body appointing the member, with 
        or without cause, or for malfeasance or nonfeasance in the 
        performance of official duties as provided by Minnesota 
        Statutes, sections 351.14 to 351.23. 
           Subd. 6.  [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 
        certificate of selection of every board member selected under 
        subdivision 2 stating the term for which selected, must be made 
        by the respective town clerks, city administrator, and by the 
        commissioner of natural resources.  The certificates, with the 
        approval appended by other authority, if required, must be filed 
        with the secretary of state.  Counterparts thereof must be 
        furnished to the board member and the secretary of the board.  
        Each member shall qualify by taking and subscribing the oath of 
        office prescribed by the Minnesota Constitution, article V, 
        section 6.  The oath, duly certified by the official 
        administering the same, must be filed with the secretary of 
        state and the secretary of the board. 
           Subd. 7.  [BOARD MEMBERS' COMPENSATION.] Each board member, 
        except the chair, may be paid a per diem compensation in 
        accordance with the board's bylaws for meetings and for other 
        services as are specifically authorized by the board, not to 
        exceed the per diem amount under Minnesota Statutes, section 
        15.0575, subdivision 3, and not to exceed $1,000 in any one 
        year.  The chair may be paid a per diem compensation in 
        accordance with the board's bylaws for meetings and for other 
        services specifically authorized by the board, not to exceed the 
        per diem amount under Minnesota Statutes, section 15.0575, 
        subdivision 3, and not to exceed $1,500 in any one year.  All 
        members of the board must be reimbursed for all reasonable and 
        necessary expenses actually incurred in the performance of 
        duties. 
           Sec. 22.  [GENERAL PROVISIONS FOR ORGANIZATION AND 
        OPERATION OF BOARD.] 
           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' 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 and conduct other 
        organizational business as may be necessary.  Thereafter the 
        board shall meet regularly at the time and place that the board 
        designates by resolution.  Special meetings may be held at any 
        time upon call of the chair or any two members, upon written 
        notice sent by mail to each member at least three days before 
        the meeting, or upon 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 
        sections 20 to 38, any action within the authority of the board 
        may be taken by the affirmative vote of a majority of the board 
        and may be taken by regular or adjourned regular meeting or at a 
        duly held special meeting, but in any case only if a quorum is 
        present.  Meetings of the board must be open to the public.  The 
        board may adopt a seal, which must be officially and judicially 
        noticed, to authenticate instruments executed by its authority, 
        but omission of the seal does not affect the validity of any 
        instrument. 
           Subd. 2.  [CHAIR.] The board shall elect a chair from its 
        membership.  The term of the first chair of the board shall 
        expire on January 1, 2001, and the terms of successor chairs 
        expire on January 1 of each succeeding year.  The 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 
        the chair by the board.  The board shall elect a vice-chair from 
        its membership to act for the chair during temporary absence or 
        disability. 
           Subd. 3.  [SECRETARY AND TREASURER.] The board shall select 
        a person or persons who may, but need not be, a member or 
        members of the board, to act as its secretary and treasurer.  
        The secretary and treasurer shall hold office at the pleasure of 
        the board, subject to the terms of any contract of employment 
        that the board may enter into with the secretary or treasurer.  
        The secretary shall record the minutes of all meetings of the 
        board, and be the custodian of all books and records of the 
        board except those that the board entrusts to the custody of a 
        designated employee.  The treasurer is the custodian of all 
        money received by the board except as the board otherwise 
        entrusts to the custody of a designated employee.  The board may 
        appoint a deputy to perform any and all functions of either the 
        secretary or the treasurer.  A secretary or treasurer who is not 
        a member of the board or a deputy of either does not have the 
        right to vote. 
           Subd. 4.  [EXECUTIVE DIRECTOR.] The board may appoint an 
        executive director, selected solely upon the basis of training, 
        experience, and other qualifications and who shall serve at the 
        pleasure of the board and at a compensation to be determined by 
        the board.  The executive director need not be a resident of the 
        district.  The executive director may also be selected by the 
        board to serve as either secretary or treasurer, or both, of the 
        board.  The executive director shall attend all meetings of the 
        board, but shall not vote, and shall have the following powers 
        and duties: 
           (1) to see that all resolutions, rules, regulations, or 
        orders of the board are enforced; 
           (2) to appoint and remove, upon the basis of merit and 
        fitness, all subordinate officers and regular employees of the 
        board except the secretary and the treasurer and their deputies; 
           (3) to present to the board plans, studies, and other 
        reports prepared for board purposes and recommend to the board 
        for adoption the measures the executive director deems necessary 
        to enforce or carry out the powers and the duties of the board, 
        or the efficient administration of the affairs of the board; 
           (4) to keep the board fully advised as to its financial 
        condition, and to prepare and submit to the board and to the 
        governing bodies of the local governmental units, the board's 
        annual budget and other financial information the board may 
        request; 
           (5) to recommend to the board for adoption rules and 
        regulations the executive director deems necessary for the 
        efficient operation of the district disposal system; and 
           (6) to perform other duties prescribed by the board. 
           Subd. 5.  [PUBLIC EMPLOYEES.] The executive director and 
        other persons employed by the district are public employees and 
        have all the rights and duties conferred on public employees 
        under Minnesota Statutes, sections 179A.01 to 179A.25.  The 
        board may elect to have employees become members of either the 
        public employees retirement association or the Minnesota state 
        retirement system.  The compensation and conditions of 
        employment of the employees must be governed by rules applicable 
        to state employees in the classified service and to the 
        provisions of Minnesota Statutes, chapter 15A. 
           Subd. 6.  [PROCEDURES.] The board shall adopt resolutions 
        or bylaws establishing procedures for board action, personnel 
        administration, keeping records, approving claims, authorizing 
        or making disbursements, safekeeping funds, and auditing all 
        financial operations of the board. 
           Subd. 7.  [SURETY BONDS AND INSURANCE.] The board may 
        procure surety bonds for its officers and employees, in amounts 
        deemed necessary to ensure proper performance of their duties 
        and proper accounting for funds in their custody.  It may 
        procure insurance against risks to property and liability of the 
        board and its officers, agents, and employees for personal 
        injuries or death and property damage and destruction, in 
        amounts deemed necessary or desirable, with the force and effect 
        stated in Minnesota Statutes, chapter 466. 
           Sec. 23.  [GENERAL POWERS OF BOARD.] 
           Subdivision 1.  [SCOPE.] The board has all powers necessary 
        or convenient to discharge the duties imposed upon it by law.  
        The powers include those specified in this section, but the 
        express grant or enumeration of powers does not limit the 
        generality or scope of the grant of powers contained in this 
        subdivision. 
           Subd. 2.  [SUIT.] The board may sue or be sued. 
           Subd. 3.  [CONTRACT.] The board may enter into any contract 
        necessary or proper for the exercise of its powers or the 
        accomplishment of its purposes. 
           Subd. 4.  [GIFTS, GRANTS, LOANS.] The board may accept 
        gifts, apply for and accept grants or loans of money or other 
        property from the United States, the state, or any person for 
        any of its purposes, enter into any agreement required in 
        connection with them, and hold, use, and dispose of the money or 
        property in accordance with the terms of the gift, grant, loan, 
        or agreement relating to it.  With respect to loans or grants of 
        funds or real or personal property or other assistance from any 
        state or federal government or its agency or instrumentality, 
        the board may contract to do and perform all acts and things 
        required as a condition or consideration for the gift, grant, or 
        loan pursuant to state or federal law or regulations, whether or 
        not included among the powers expressly granted to the board in 
        sections 20 to 38. 
           Subd. 5.  [COOPERATIVE ACTION.] The board may act under 
        Minnesota Statutes, section 471.59, or any other appropriate law 
        providing for joint or cooperative action between governmental 
        units. 
           Subd. 6.  [STUDIES AND INVESTIGATIONS.] The board may 
        conduct research studies and programs, collect and analyze data, 
        prepare reports, maps, charts, and tables, and conduct all 
        necessary hearings and investigations in connection with the 
        design, construction, and operation of the district disposal 
        system. 
           Subd. 7.  [EMPLOYEES, TERMS.] The board may employ on terms 
        it deems advisable, persons or firms performing engineering, 
        legal, or other services of a professional nature; require any 
        employee to obtain and file with it an individual bond or 
        fidelity insurance policy; and procure insurance in amounts it 
        deems necessary against liability of the board or its officers 
        or both, for personal injury or death and property damage or 
        destruction, with the force and effect stated in Minnesota 
        Statutes, chapter 466, and against risks of damage to or 
        destruction of any of its facilities, equipment, or other 
        property as it deems necessary. 
           Subd. 8.  [PROPERTY RIGHTS, POWERS.] The board may acquire 
        by purchase, lease, condemnation, gift, or grant, any real or 
        personal property including positive and negative easements and 
        water and air rights, and it may construct, enlarge, improve, 
        replace, repair, maintain, and operate any interceptor, 
        treatment works, or water facility determined to be necessary or 
        convenient for the collection and disposal of sewage in the 
        district.  Any local governmental unit and the commissioners of 
        transportation and natural resources are authorized to convey to 
        or permit the use of any of the above-mentioned facilities owned 
        or controlled by it, by the board, subject to the rights of the 
        holders of any bonds issued with respect to those facilities, 
        with or without compensation, without an election or approval by 
        any other governmental unit or agency.  All powers conferred by 
        this subdivision may be exercised both within or without the 
        district as may be necessary for the exercise by the board of 
        its powers or the accomplishment of its purposes.  The board may 
        hold, lease, convey, or otherwise dispose of the above-mentioned 
        property for its purposes upon the terms and in the manner it 
        deems advisable.  Unless otherwise provided, the right to 
        acquire lands and property rights by condemnation may be 
        exercised only in accordance with Minnesota Statutes, sections 
        117.011 to 117.232, and shall apply to any property or interest 
        in the property owned by any local governmental unit.  No 
        property devoted to an actual public use at the time, or held to 
        be devoted to such a use within a reasonable time, shall be so 
        acquired unless a court of competent jurisdiction determines 
        that the use proposed by the board is paramount to the existing 
        use.  Except in the case of property in actual public use, the 
        board may take possession of any property on which condemnation 
        proceedings have been commenced at any time after the issuance 
        of a court order appointing commissioners for its condemnation. 
           Subd. 9.  [RELATIONSHIP TO OTHER PROPERTIES.] The board may 
        construct or maintain its systems or facilities in, along, on, 
        under, over, or through public waters, streets, bridges, 
        viaducts, and other public rights-of-way without first obtaining 
        a franchise from a county or municipality having jurisdiction 
        over them.  However, the facilities must be constructed and 
        maintained in accordance with the ordinances and resolutions of 
        the county or municipality relating to constructing, installing, 
        and maintaining similar facilities on public properties and must 
        not unnecessarily obstruct the public use of those rights-of-way.
           Subd. 10.  [DISPOSAL OF PROPERTY.] 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.  The property may be sold in the manner provided 
        by Minnesota Statutes, section 469.065, insofar as practical.  
        The board may give notice of sale as it deems appropriate.  When 
        the board determines that any property or any part of the 
        district disposal system acquired from a local governmental unit 
        without compensation is no longer required but is required as a 
        local facility by the governmental unit from which it was 
        acquired, the board may by resolution transfer it to that 
        governmental unit. 
           Subd. 11.  [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 
        board may contract with the United States or any agency thereof, 
        any state or agency thereof, or any regional public planning 
        body in the state with jurisdiction over any part of the 
        district, or any other municipal or public corporation, or 
        governmental subdivision or agency or political subdivision in 
        any state, for the joint use of any facility owned by the board 
        or such entity, for the operation by that entity of any system 
        or facility of the board, or for the performance on the board's 
        behalf of any service, including but not limited to planning, on 
        terms as may be agreed upon by the contracting parties.  Unless 
        designated by the board as a local water and sanitary sewer 
        facility, any treatment works or interceptor jointly used, or 
        operated on behalf of the board, as provided in this 
        subdivision, is deemed to be operated by the board for purposes 
        of including those facilities in the district disposal system. 
           Sec. 24.  [COMPREHENSIVE PLAN.] 
           Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
        adopt a comprehensive plan for the collection, treatment, and 
        disposal of sewage in the district for a designated period the 
        board deems proper and reasonable.  The board shall prepare and 
        adopt subsequent comprehensive plans for the collection, 
        treatment, and disposal of sewage in the district for each 
        succeeding designated period as the board 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 the disposal system will have on 
        present and future land use in the area affected.  The 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 any other details as the board 
        deems appropriate.  In developing the plans, the board shall 
        consult with persons designated for the purpose by governing 
        bodies of any governmental unit within the district to represent 
        the entities and shall consider the data, resources, and input 
        offered to the board by the entities and any planning agency 
        acting on behalf of one or more of the entities.  Each plan, 
        when adopted, must be followed in the district and may be 
        revised as often as the board deems necessary. 
           Subd. 2.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
        any subsequent comprehensive plan, the board shall hold a public 
        hearing on the proposed plan at a time and place in the district 
        that it selects.  The hearing may be continued from time to 
        time.  Not less than 45 days before the hearing, the board shall 
        publish notice of the hearing in a newspaper having general 
        circulation in the district, stating the date, time, and place 
        of the hearing, and the place where the proposed plan may be 
        examined by any interested person.  At the hearing, all 
        interested persons must be permitted to present their views on 
        the plan. 
           Subd. 3.  [GOVERNMENTAL UNIT PLANS AND PROGRAMS; 
        COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's 
        plan is adopted, no construction project involving the 
        construction of new sewers or other disposal facilities may be 
        undertaken by the local governmental unit unless its governing 
        body shall first find the project to be in accordance with the 
        governmental unit's comprehensive plan and program as approved 
        by the board.  Before approval by the board of the comprehensive 
        plan and program of any local governmental unit in the district, 
        no water and sanitary sewer construction project may be 
        undertaken by the governmental 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. 25.  [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 
        ASSESSMENTS.] 
           The Banning Junction area water and sanitary sewer board, 
        in order to implement the powers granted under sections 20 to 38 
        to establish, maintain, and administer the Banning Junction area 
        water and sanitary sewer district, may issue obligations and 
        impose special assessments against benefited property within the 
        limits of the district benefited by facilities constructed under 
        sections 20 to 38 in the manner provided for local governments 
        by Minnesota Statutes, chapter 429. 
           Sec. 26.  [SYSTEM EXPANSION; APPLICATION TO CITIES.] 
           The authority of the water and sanitary sewer board to 
        establish water or sewer or combined water and sewer systems 
        under this section extends to areas within the Banning Junction 
        area water and sanitary sewer district organized into cities 
        when requested by resolution of the governing body of the 
        affected city or when ordered by the Minnesota pollution control 
        agency after notice and hearing.  For the purpose of any 
        petition filed or special assessment levied with respect to any 
        system, the entire area to be served within a city must be 
        treated as if it were owned by a single person, and the 
        governing body shall exercise all the rights and be subject to 
        all the duties of an owner of the area, and shall have power to 
        provide for the payment of all special assessments and other 
        charges imposed upon the area with respect to the system by the 
        appropriation of money, the collection of service charges, or 
        the levy of taxes, which shall be subject to no limitation of 
        rate or amount. 
           Sec. 27.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
           Subdivision 1.  [POWERS.] In addition to all other powers 
        conferred upon the board in sections 20 to 38, it has the powers 
        specified in this section. 
           Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board may 
        discharge the effluent from any treatment works operated by it 
        into any waters of the state, subject to approval of the agency 
        if required and in accordance with any effluent or water quality 
        standards lawfully adopted by the agency, any interstate agency, 
        or any federal agency having jurisdiction. 
           Subd. 3.  [UTILIZATION OF DISTRICT SYSTEM.] The board may 
        require any person or local governmental unit to provide for the 
        discharge of any sewage, directly or indirectly, into the 
        district disposal system, or to connect any disposal system or a 
        part of it with the district disposal system wherever reasonable 
        opportunity for connection is provided; may regulate the manner 
        in which the connections are made; may require any person or 
        local governmental unit discharging sewage into the disposal 
        system to provide preliminary treatment for it; may prohibit the 
        discharge into the district disposal system of any substance 
        that it determines will or may be harmful to the system or any 
        persons operating it; and may require any local governmental 
        unit to discontinue the acquisition, betterment, or operation of 
        any facility for the unit's disposal system wherever and so far 
        as adequate service is or will be provided by the district 
        disposal system. 
           Subd. 4.  [SYSTEM OF COST RECOVERY TO COMPLY WITH 
        APPLICABLE REGULATIONS.] Any charges, connection fees, or other 
        cost-recovery techniques imposed on persons discharging sewage 
        directly or indirectly into the district disposal system must 
        comply with applicable state and federal law, including state 
        and federal regulations governing grant applications. 
           Sec. 28.  [BUDGET.] 
           The board shall prepare and adopt, on or before October 1 
        in 1999 and each year thereafter, a budget showing for the 
        following calendar year or other fiscal year determined by the 
        board, sometimes referred to in sections 20 to 38 as the budget 
        year, estimated receipts of money from all sources, including 
        but not limited to payments by each local governmental unit, 
        federal or state grants, taxes on property, and funds on hand at 
        the beginning of the year, and estimated expenditures for: 
           (1) costs of operation, administration, and maintenance of 
        the district disposal system; 
           (2) cost of acquisition and betterment of the district 
        disposal system; and 
           (3) debt service, including principal and interest, on 
        general obligation bonds and certificates issued pursuant to 
        section 32, and any money judgments entered by a court of 
        competent jurisdiction.  Expenditures within these general 
        categories, and any other categories as the board may from time 
        to time determine, must be itemized in detail as the board 
        prescribes.  The board and its officers, agents, and employees 
        shall not spend money for any purpose other than debt service 
        without having set forth the expense in the budget nor in excess 
        of the amount set forth in the budget for it.  No obligation to 
        make an expenditure of the above-mentioned type is enforceable 
        except as the obligation of the person or persons incurring it.  
        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 actual cash receipts during the budget year exceed the 
        total amounts designated in the original budget.  The creation 
        of any obligation under section 32 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. 29.  [ALLOCATION OF COSTS.] 
           Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
        estimated cost of administration, operation, maintenance, and 
        debt service of the district disposal system to be paid by the 
        board in each fiscal year and the estimated costs of acquisition 
        and betterment of the system that are to be paid during the year 
        from funds other than state or federal grants and bond proceeds 
        and all other previously unallocated payments made by the board 
        pursuant to sections 20 to 38 to be allocated in the fiscal year 
        are referred to as current costs and must be allocated by the 
        board as provided in subdivision 2 in the budget for that year. 
           Subd. 2.  [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 
        costs must be allocated in the district on an equitable basis as 
        the board may determine by resolution to be in the best 
        interests of the district.  The adoption or revision of any 
        method of allocation used by the board must be by the 
        affirmative vote of at least two-thirds of the members of the 
        board. 
           Sec. 30.  [TAX LEVIES.] 
           To accomplish any duty imposed on it the board may, in 
        addition to the powers granted in sections 20 to 38 and in any 
        other law or charter, exercise the powers granted any 
        municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 
        sections 115.46, 444.075, and 471.59, with respect to the area 
        in the district.  The board may levy taxes upon all taxable 
        property in the district for all or a part of the amount payable 
        to the board, pursuant to section 29, to be assessed and 
        extended as a tax upon that taxable property by the county 
        auditor for the next calendar year, free from any limitation of 
        rate or amount imposed by law or charter.  The tax must be 
        collected and remitted in the same manner as other general taxes.
           Sec. 31.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
           Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
        PROJECT.] Before the board orders any project involving the 
        acquisition or betterment of any interceptor or treatment works, 
        all or a part of the cost of which will be allocated pursuant to 
        section 29 as current costs, the board shall hold a public 
        hearing on the proposed project.  The hearing must be held 
        following two publications in a newspaper having general 
        circulation in the district, stating the time and place of the 
        hearing, the general nature and location of the project, the 
        estimated total cost of acquisition and betterment, that portion 
        of costs estimated to be paid out of federal and state grants, 
        and that portion of costs estimated to be allocated.  The 
        estimates must be best available at the time of the meeting and 
        if costs exceed the estimate, the project cannot proceed until 
        an additional public hearing is held, with notice as required at 
        the initial meeting.  The two publications must be a week apart 
        and the hearing at least three days after the last publication.  
        Not less than 45 days before the hearing, notice of the hearing 
        must also be mailed to each clerk of all local governmental 
        units in the district, but failure to give mailed notice or any 
        defects in the notice does not invalidate the proceedings.  The 
        project may include all or part of one or more interceptors or 
        treatment works.  No hearing may be held on any project unless 
        the project is within the area covered by the comprehensive plan 
        adopted by the board pursuant to section 24 except that the 
        hearing may be held simultaneously with a hearing on a 
        comprehensive plan.  A hearing is not required with respect to a 
        project, no part of the costs of which are to be allocated as 
        the current costs of acquisition, betterment, and debt service. 
           Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
        board proposes to assess against benefited property within the 
        district all or any part of the allocable costs of the project 
        as provided in subdivision 5, the board shall, not less than two 
        weeks before the hearing provided for in subdivision 1, cause 
        mailed notice of the hearing to be given to the owner of each 
        parcel within the area proposed to be specially assessed and 
        shall also give two weeks' published notice of the hearing.  The 
        notice of hearing must contain the same information provided in 
        the notice published by the board pursuant to subdivision 1, and 
        a description of the area proposed to be assessed.  For the 
        purpose of giving mailed notice, owners are those shown to be 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; but other appropriate records may be used 
        for this purpose.  For properties that are tax exempt or subject 
        to taxation on a gross earnings basis and not listed on the 
        records of the county auditor or the county treasurer, the 
        owners must be ascertained by any practicable means and mailed 
        notice given them as herein provided.  Failure to give mailed 
        notice or any defects in the notice does not invalidate the 
        proceedings of the board. 
           Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 
        adoption of the resolution calling for a hearing under this 
        section, the board shall secure from the district engineer or 
        some other competent person of the board's selection a report 
        advising it in a preliminary way as to whether the proposed 
        project is feasible and whether it should be made as proposed or 
        in connection with some other project and the estimated costs of 
        the project as recommended.  No error or omission in the report 
        invalidates the proceeding.  The board may also take other steps 
        before the hearing, as will in its judgment provide helpful 
        information in determining the desirability and feasibility of 
        the project, including but not limited to preparation of plans 
        and specifications and advertisement for bids on them.  The 
        hearing may be adjourned from time to time and a resolution 
        ordering the project may be adopted at any time within six 
        months after the date of hearing.  In ordering the project the 
        board may reduce but not increase the extent of the project as 
        stated in the notice of hearing and shall find that the project 
        as ordered is in accordance with the comprehensive plan and 
        program adopted by the board pursuant to section 24. 
           Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
        adopted by the affirmative vote of not less than two-thirds of 
        its members determines that an emergency exists requiring the 
        immediate purchase of materials or supplies or the making of 
        emergency repairs, it may order the purchase of those supplies 
        and materials and the making of the repairs before any hearing 
        required under this section, provided that the board shall set 
        as early a date as practicable for the hearing at the time it 
        declares the emergency.  All other provisions of this section 
        must be followed in giving notice of and conducting the 
        hearing.  Nothing herein may be construed as preventing the 
        board or its agents from purchasing maintenance supplies or 
        incurring maintenance costs without regard to the requirements 
        of this section. 
           Subd. 5.  [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 
        board may specially assess all or any part of the costs of 
        acquisition and betterment as herein provided, of any project 
        ordered pursuant to this section.  The special assessments must 
        be levied in accordance with the provisions of Minnesota 
        Statutes, sections 429.051 to 429.081, except as otherwise 
        provided in this subdivision.  No other provisions of Minnesota 
        Statutes, chapter 429, apply.  For purposes of levying the 
        special assessments, the hearing on the project required in 
        subdivision 1 serves as the hearing on the making of the 
        original improvement provided for by Minnesota Statutes, section 
        429.051.  The area assessed may be less than but may not exceed 
        the area proposed to be assessed as stated in the notice of 
        hearing on the project provided for in subdivision 2. 
           Sec. 32.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
           Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
        INDEBTEDNESS.] At any time after adoption of its annual budget 
        and in anticipation of the collection of tax and other revenues 
        estimated and set forth by the board in the budget, except in 
        the case of deficiency taxes levied under this subdivision and 
        taxes levied for the payment of certificates issued under 
        subdivision 2, the board may, by resolution, authorize the 
        issuance, negotiation, and sale, in accordance with subdivision 
        4 in the form and manner and upon terms it determines, of its 
        negotiable general obligation certificates of indebtedness in 
        aggregate principal amounts not exceeding 50 percent of the 
        total amount of tax collections and other revenues, and maturing 
        not later than three months after the close of the budget year 
        in which issued.  The proceeds of the sale of the certificates 
        must be used solely for the purposes for which the tax 
        collections and other revenues are to be expended pursuant to 
        the budget. 
           All the tax collections and other revenues included in the 
        budget for the budget year, after the expenditure of the tax 
        collections and other revenues in accordance with the budget, 
        must be irrevocably pledged and appropriated to a special fund 
        to pay the principal and interest on the certificates when due.  
        If for any reason the tax collections and other revenues are 
        insufficient to pay the certificates and interest when due, the 
        board shall levy a tax in the amount of the deficiency on all 
        taxable property in the district and shall appropriate this 
        amount when received to the special fund. 
           Subd. 2.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
        any budget year the receipts of tax and other revenues should 
        for some unforeseen cause become insufficient to pay the board's 
        current expenses, or if any public emergency should subject it 
        to the necessity of making extraordinary expenditures, the board 
        may by resolution authorize the issuance, negotiation, and sale, 
        in accordance with subdivision 4 in the form and manner and upon 
        the terms and conditions it determines, of its negotiable 
        general obligation certificates of indebtedness in an amount 
        sufficient to meet the deficiency.  The board shall levy on all 
        taxable property in the district a tax sufficient to pay the 
        certificates and interest on the certificates and shall 
        appropriate all collections of the tax to a special fund created 
        for the payment of the certificates and the interest on them.  
        Certificates issued under this subdivision mature not later than 
        April 1 in the year following the year in which the tax is 
        collectible. 
           Subd. 3.  [GENERAL OBLIGATION BONDS.] The board may by 
        resolution authorize the issuance of general obligation bonds 
        for the acquisition or betterment of any part of the district 
        disposal system, including but without limitation the payment of 
        interest during construction and for a reasonable period 
        thereafter, or for the refunding of outstanding bonds, 
        certificates of indebtedness, or judgments.  The board shall 
        pledge its full faith and credit and taxing power for the 
        payment of the bonds and shall provide for the issuance and sale 
        and for the security of the bonds in the manner provided in 
        Minnesota Statutes, chapter 475.  The board has the same powers 
        and duties as a municipality issuing bonds under that law, 
        except that no election is required and the debt limitations of 
        Minnesota Statutes, chapter 475, do not apply to the bonds.  The 
        board may also pledge for the payment of the bonds and deduct 
        from the amount of any tax levy required under Minnesota 
        Statutes, section 475.61, subdivision 1, and any revenues 
        receivable under any state and federal grants anticipated by the 
        board and may covenant to refund the bonds if and when and to 
        the extent that for any reason the revenues, together with other 
        funds available and appropriated for that purpose, are not 
        sufficient to pay all principal and interest due or about to 
        become due, provided that the revenues have not been anticipated 
        by the issuance of certificates under subdivision 1. 
           Subd. 4.  [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 
        Certificates issued under subdivisions 1 and 2 may be issued and 
        sold by negotiation, without public sale, and may be sold at a 
        price equal to the percentage of the par value of the 
        certificates, plus accrued interest, and bearing interest at the 
        rate determined by the board.  No election is required to 
        authorize the issuance of the certificates.  The certificates 
        must bear the same rate of interest after maturity as before and 
        the full faith and credit and taxing power of the board must be 
        pledged to the payment of the certificates. 
           Sec. 33.  [DEPOSITORIES.] 
           The board shall designate one or more national or state 
        banks, or trust companies authorized to do a banking business, 
        as official depositories for money of the board, and shall 
        require the treasurer to deposit all or a part of the money in 
        those institutions.  The designation must be in writing and must 
        set forth all the terms and conditions upon which the deposits 
        are made, and must be signed by the chair and treasurer and made 
        a part of the minutes of the board.  
           Sec. 34.  [MONEY, ACCOUNTS, AND INVESTMENTS.] 
           Subdivision 1.  [RECEIPT AND APPLICATION.] Money received 
        by the board must be deposited or invested by the treasurer and 
        disposed of as the board may direct in accordance with its 
        budget; provided that any money that has been pledged or 
        dedicated by the board to the payment of obligations or interest 
        on the obligations or expenses incident thereto, or for any 
        other specific purpose authorized by law, must be paid by the 
        treasurer into the fund to which it has been pledged. 
           Subd. 2.  [FUNDS AND ACCOUNTS.] (a) The board's treasurer 
        shall establish funds and accounts as may be necessary or 
        convenient to handle the receipts and disbursements of the board 
        in an orderly fashion. 
           (b) The funds and accounts must be audited annually by a 
        certified public accountant at the expense of the district. 
           Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
        those funds and accounts may be deposited in the official 
        depositories of the board or invested as provided in this 
        subdivision.  Any amount not currently needed or required by law 
        to be kept in cash on deposit may be invested in obligations 
        authorized for the investment of municipal sinking funds by 
        Minnesota Statutes, section 475.66.  The money may also be held 
        under certificates of deposit issued by any official depository 
        of the board. 
           Subd. 4.  [BOND PROCEEDS.] The use of proceeds of all bonds 
        issued by the board for the acquisition and betterment of the 
        district disposal system, and the use, other than investment, of 
        all money on hand in any sinking fund or funds of the board, is 
        governed by the provisions of Minnesota Statutes, chapter 475, 
        the provisions of sections 20 to 38, and the provisions of 
        resolutions authorizing the issuance of the bonds.  When 
        received, the bond proceeds must be transferred to the treasurer 
        of the board for safekeeping, investment, and payment of the 
        costs for which they were issued. 
           Subd. 5.  [AUDIT.] The board shall provide for and pay the 
        cost of an independent annual audit of its official books and 
        records by the state auditor or a public accountant authorized 
        to perform that function under Minnesota Statutes, chapter 6. 
           Sec. 35.  [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 
        OUTSIDE THE JURISDICTION OF THE BOARD.] 
           (a) The board may contract with the United States or any 
        agency of the federal government, any state or its agency, or 
        any municipal or public corporation, governmental subdivision or 
        agency or political subdivision in any state, outside the 
        jurisdiction of the board, for furnishing services to those 
        entities, including but not limited to planning for and the 
        acquisition, betterment, operation, administration, and 
        maintenance of any or all interceptors, treatment works, and 
        local water and sanitary sewer facilities.  The board may 
        include as one of the terms of the contract that the entity must 
        pay to the board an amount 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 in the district.  When payments are made by entities 
        to the board, they must be applied in reduction of the total 
        amount of costs thereafter allocated in the district, on an 
        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 29, subdivision 2.  A 
        municipality in the state of Minnesota may enter into a contract 
        and perform all acts and things required as a condition or 
        consideration therefor consistent with the purposes of sections 
        20 to 38, whether or not included among the powers otherwise 
        granted to the municipality by law or charter. 
           (b) The board shall contract with a qualified entity to 
        make necessary inspections on the district facilities, and to 
        otherwise process or assist in processing any of the work of the 
        district. 
           Sec. 36.  [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 
        AND EQUIPMENT.] 
           When the board orders a project involving the acquisition 
        or betterment of a part of the district disposal system, it 
        shall cause plans and specifications of the project to be made, 
        or if previously made, to be modified, if necessary, and to be 
        approved by the agency if required, and after any required 
        approval by the agency, one or more contracts for work and 
        materials called for by the plans and specification may be 
        awarded as provided in Minnesota Statutes, section 471.345. 
           Sec. 37.  [PROPERTY EXEMPT FROM TAXATION.] 
           Any properties, real or personal, owned, leased, 
        controlled, used, or occupied by the water and sanitary sewer 
        board for any purpose under sections 20 to 38 are declared to be 
        acquired, owned, leased, controlled, used, and occupied for 
        public, governmental, and municipal purposes, and are exempt 
        from taxation by the state or any political subdivision of the 
        state, provided that the properties are subject to special 
        assessments levied by a political subdivision for a local 
        improvement in amounts proportionate to and not exceeding the 
        special benefit received by the properties from the 
        improvement.  No possible use of any properties in any manner 
        different from their use as part of a disposal system at the 
        time may be considered in determining the special benefit 
        received by the properties.  All assessments are subject to 
        final approval by the board, whose determination of the benefits 
        is conclusive upon the political subdivision levying the 
        assessment. 
           Sec. 38.  [RELATION TO EXISTING LAWS.] 
           The provisions of sections 20 to 38 must be given full 
        effect notwithstanding the provisions of any law or charter 
        inconsistent with sections 20 to 38.  The powers conferred on 
        the board under sections 20 to 38 do not in any way diminish or 
        supersede the powers conferred on the agency by Minnesota 
        Statutes, chapters 115 to 116. 
           Sec. 39.  [EFFECTIVE DATE.] 
           Sections 1 to 19 are effective the day after a certificate 
        of approval under Minnesota Statutes, section 645.021, 
        subdivision 3, is filed by the last of the four local 
        governmental units subject to sections 1 to 19. 
           Sections 20 to 38 are effective as to the city and the town 
        of Finlayson separately the day after the certificate of 
        approval of the governing body of each is filed as provided in 
        Minnesota Statutes, section 645.021, subdivision 3. 
                                   ARTICLE 15 
                       AUTOMATIC REBATE IN ENACTED BUDGET 
           Section 1.  [16A.1522] [REBATE REQUIREMENTS.] 
           Subdivision 1.  [FORECAST.] If, on the basis of a forecast 
        of general fund revenues and expenditures in November of an 
        even-numbered year or February of an odd-numbered year, the 
        commissioner projects a positive unrestricted budgetary general 
        fund balance at the close of the biennium that exceeds one-half 
        of one percent of total general fund biennial revenues, the 
        commissioner shall designate the entire balance as available for 
        rebate to the taxpayers of this state.  In forecasting, 
        projecting, or designating the unrestricted budgetary general 
        fund balance or general fund biennial revenue under this 
        section, the commissioner shall not include any balance or 
        revenue attributable to settlement payments received after July 
        1, 1998, and before July 1, 2001, as defined in Section IIB of 
        the settlement document, filed May 18, 1998, in State v. Philip 
        Morris, Inc., No. C1-94-8565 (Minnesota District Court, Second 
        Judicial District). 
           Subd. 2.  [PLAN.] If the commissioner designates an amount 
        for rebate in either forecast, the governor shall present a plan 
        to the legislature for rebating that amount.  The plan must 
        provide for payments to begin no later than August 15 of the 
        odd-numbered year.  By April 15 of each odd-numbered year, the 
        legislature shall enact, modify, or reject the plan presented by 
        the governor. 
           Subd. 3.  [CERTIFICATION.] By July 15 of each odd-numbered 
        year, based on a preliminary analysis of the general fund 
        balance at the end of the fiscal year June 30, the commissioner 
        of finance shall certify to the commissioner of revenue the 
        amount available for rebate. 
           Subd. 4.  [TRANSFER TO TAX RELIEF ACCOUNT.] Any positive 
        unrestricted budgetary general fund balance on June 30 of an 
        odd-numbered year is appropriated to the commissioner for 
        transfer to the tax relief account. 
           Subd. 5.  [APPROPRIATION.] A sum sufficient to pay any 
        rebate due under the plan enacted under subdivision 2 is 
        appropriated from the general fund to the commissioner of 
        revenue. 
           Sec. 2.  [ABOLISHING TAX REFORM AND REDUCTION ACCOUNT.] 
           The tax reform and reduction account created in Laws 1998, 
        chapter 389, article 9, section 2, subdivision 2, clause (2), is 
        abolished.  The balance in the account shall revert to the 
        unrestricted general fund balance. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Section 1 is effective September 1, 1999.  Section 2 is 
        effective the day following final enactment. 
                                   ARTICLE 16 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 1998, section 3.986, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 
        means increased or decreased costs or revenues that a political 
        subdivision would incur as a result of a law enacted after June 
        30, 1997, or rule proposed after December 31, 1998 1999: 
           (1) that mandates a new program, eliminates an existing 
        mandated program, requires an increased level of service of an 
        existing program, or permits a decreased level of service in an 
        existing mandated program; 
           (2) that implements or interprets federal law and, by its 
        implementation or interpretation, increases or decreases program 
        or service levels beyond the level required by the federal law; 
           (3) that implements or interprets a statute or amendment 
        adopted or enacted pursuant to the approval of a statewide 
        ballot measure by the voters and, by its implementation or 
        interpretation, increases or decreases program or service levels 
        beyond the levels required by the ballot measure; 
           (4) that removes an option previously available to 
        political subdivisions, or adds an option previously unavailable 
        to political subdivisions, thus requiring higher program or 
        service levels or permitting lower program or service levels, or 
        prohibits a specific activity and so forces political 
        subdivisions to use a more costly alternative to provide a 
        mandated program or service; 
           (5) that requires that an existing program or service be 
        provided in a shorter time period and thus increases the cost of 
        the program or service, or permits an existing mandated program 
        or service to be provided in a longer time period, thus 
        permitting a decrease in the cost of the program or service; 
           (6) that adds new requirements to an existing optional 
        program or service and thus increases the cost of the program or 
        service because the political subdivisions have no reasonable 
        alternative other than to continue the optional program; 
           (7) that affects local revenue collections by changes in 
        property or sales and use tax exemptions; 
           (8) that requires costs previously incurred at local option 
        that have subsequently been mandated by the state; or 
           (9) that requires payment of a new fee or increases the 
        amount of an existing fee, or permits the elimination or 
        decrease of an existing fee mandated by the state. 
           (b) When state law is intended to achieve compliance with 
        federal law or court orders, state mandates shall be determined 
        as follows: 
           (1) if the federal law or court order is discretionary, the 
        state law is a state mandate; 
           (2) if the state law exceeds what is required by the 
        federal law or court order, only the provisions of the state law 
        that exceed the federal requirements are a state mandate; and 
           (3) if the state law does not exceed what is required by 
        the federal statute or regulation or court order, the state law 
        is not a state mandate. 
           Sec. 2.  Minnesota Statutes 1998, section 3.987, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LOCAL IMPACT NOTES.] The commissioner of 
        finance shall coordinate the development of a local impact note 
        for any proposed legislation introduced after June 30, 1997, or 
        any rule proposed after December 31, 1998 1999, upon request of 
        the chair or the ranking minority member of either legislative 
        tax committee.  Upon receipt of a request to prepare a local 
        impact note, the commissioner must notify the authors of the 
        proposed legislation or, for an administrative rule, the head of 
        the relevant executive agency or department, that the request 
        has been made.  The local impact note must be made available to 
        the public upon request.  If the action is among the exceptions 
        listed in section 3.988, a local impact note need not be 
        requested nor prepared.  The commissioner shall make a 
        reasonable and timely estimate of the local fiscal impact on 
        each type of political subdivision that would result from the 
        proposed legislation.  The commissioner of finance may require 
        any political subdivision or the commissioner of an 
        administrative agency of the state to supply in a timely manner 
        any information determined to be necessary to determine local 
        fiscal impact.  The political subdivision, its representative 
        association, or commissioner shall convey the requested 
        information to the commissioner of finance with a signed 
        statement to the effect that the information is accurate and 
        complete to the best of its ability.  The political subdivision, 
        its representative association, or commissioner, when requested, 
        shall update its determination of local fiscal impact based on 
        actual cost or revenue figures, improved estimates, or both.  
        Upon completion of the note, the commissioner must provide a 
        copy to the authors of the proposed legislation or, for an 
        administrative rule, to the head of the relevant executive 
        agency or department. 
           Sec. 3.  [16A.77] [TOBACCO SETTLEMENT FUND.] 
           (a) A tobacco settlement fund is established in the state 
        treasury.  Amounts in the fund are available only for purposes 
        authorized by appropriation by the legislature.  The governor 
        shall make recommendations to the legislature regarding use of 
        the money in the fund. 
           (b) The commissioner of finance shall credit all settlement 
        payments received after July 1, 1998, and before July 1, 2001, 
        as defined in Section IIB of the settlement document, filed May 
        18, 1998, in the State of Minnesota et al. vs. Philip Morris et 
        al., to the tobacco settlement fund.  All other payments to the 
        state resulting from the specified litigation shall be credited 
        to the general fund. 
           Sec. 4.  Minnesota Statutes 1998, 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, or if the taxpayer is located in a 
        presidentially declared disaster area.  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) (f) 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. 5.  Minnesota Statutes 1998, section 270.65, is 
        amended to read: 
           270.65 [DATE OF ASSESSMENT; DEFINITION.] 
           For purposes of taxes administered by the commissioner, the 
        term "date of assessment" means the date a return was filed or 
        the date a return should have been filed, whichever is later; 
        or, in the case of taxes determined by the commissioner, "date 
        of assessment" means the date of the order assessing taxes; or, 
        in the case of an amended return filed by the taxpayer, the 
        assessment date is the date the return was filed with the 
        commissioner; or, in the case of a check from a taxpayer that is 
        dishonored and results in an erroneous refund being given to the 
        taxpayer, remittance of the check is deemed to be an assessment 
        and the "date of assessment" is the date the check was received 
        by the commissioner. 
           Sec. 6.  Minnesota Statutes 1998, section 270.67, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT 
        PROGRAM.] (a) In implementing the authority provided in 
        subdivision 1 or in section 8.30 to accept offers of installment 
        payments or offers-in-compromise of tax liabilities, the 
        commissioner of revenue shall prescribe guidelines for employees 
        of the department of revenue to determine whether an 
        offer-in-compromise or an offer to make installment payments is 
        adequate and should be accepted to resolve a dispute.  In 
        prescribing the guidelines, the commissioner shall develop and 
        publish schedules of national and local allowances designed to 
        provide that taxpayers entering into a compromise or payment 
        agreement have an adequate means to provide for basic living 
        expenses.  The guidelines must provide that the taxpayer's 
        ownership interest in a motor vehicle, to the extent of the 
        value allowed in section 550.37, will not be considered as an 
        asset; in the case of an offer related to a joint tax liability 
        of spouses, that value of two motor vehicles must be excluded.  
        The guidelines must provide that employees of the department 
        shall determine, on the basis of the facts and circumstances of 
        each taxpayer, whether the use of the schedules is appropriate 
        and that employees must not use the schedules to the extent the 
        use would result in the taxpayer not having adequate means to 
        provide for basic living expenses.  The guidelines must provide 
        that: 
           (1) an employee of the department shall not reject an 
        offer-in-compromise or an offer to make installment payments 
        from a low-income taxpayer solely on the basis of the amount of 
        the offer; and 
           (2) in the case of an offer-in-compromise which relates 
        only to issues of liability of the taxpayer: 
           (i) the offer must not be rejected solely because the 
        commissioner is unable to locate the taxpayer's return or return 
        information for verification of the liability; and 
           (ii) the taxpayer shall not be required to provide an 
        audited, reviewed, or compiled financial statement. 
           (b) The commissioner shall establish procedures: 
           (1) that require presentation of a counteroffer or a 
        written rejection of the offer by the commissioner if the amount 
        offered by the taxpayer in an offer-in-compromise or an offer to 
        make installment payments is not accepted by the commissioner; 
           (2) for an administrative review of any written rejection 
        of a proposed offer-in-compromise or installment agreement made 
        by a taxpayer under this section before the rejection is 
        communicated to the taxpayer; 
           (3) that allow a taxpayer to request reconsideration of any 
        written rejection of the offer or agreement to the commissioner 
        of revenue to determine whether the rejection is reasonable and 
        appropriate under the circumstances; and 
           (4) that provide for notification to the taxpayer when an 
        offer-in-compromise has been accepted, and issuance of 
        certificates of release of any liens imposed under section 
        270.69 related to the liability which is the subject of the 
        compromise. 
           Sec. 7.  Minnesota Statutes 1998, section 270.78, is 
        amended to read: 
           270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC 
        FUNDS TRANSFER.] 
           (a) In addition to other applicable penalties imposed by 
        law, after notification from the commissioner of revenue to the 
        taxpayer that payments for a tax administered by the 
        commissioner are required to be made by means of electronic 
        funds transfer, and the payments are remitted by some other 
        means, there is a penalty in the amount of five percent of each 
        payment that should have been remitted electronically.  The 
        penalty can be abated under the abatement procedures prescribed 
        in section 270.07, subdivision 6, if the failure to remit the 
        payment electronically is due to reasonable cause.  The penalty 
        bears interest at the rate specified in section 270.75 from the 
        due date of the payment of the tax to the date of payment of the 
        penalty. 
           (b) The penalty under paragraph (a) does not apply if the 
        taxpayer pays by other means the amount due at least three 
        business days before the date the payment is due.  This 
        paragraph does not apply after December 31, 1997. 
           Sec. 8.  Minnesota Statutes 1998, 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, a private nonprofit hospital that leases 
        its building from the county in which it is located, any public 
        agency responsible for child support enforcement, any public 
        agency responsible for the collection of court-ordered 
        restitution, and any public agency established by general or 
        special law that is responsible for the administration of a 
        low-income housing program. 
           Sec. 9.  Minnesota Statutes 1998, section 270A.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SETOFF PROCEDURES.] (a) The commissioner, upon 
        receipt of notification, shall initiate procedures to detect any 
        refunds otherwise payable to the debtor.  When the commissioner 
        determines that a refund is due to a debtor whose debt was 
        submitted by a claimant agency, the commissioner shall first 
        deduct the fee in subdivision 1 and then remit the refund or the 
        amount claimed, whichever is less, to the agency.  In 
        transferring or remitting moneys to the claimant agency, the 
        commissioner shall provide information indicating the amount 
        applied against each debtor's obligation and the debtor's 
        address listed on the tax return.  
           (b) The commissioner shall remit to the debtor the amount 
        of any refund due in excess of the debt submitted for setoff by 
        the claimant agency.  Notice of the amount setoff and address of 
        the claimant agency shall accompany any disbursement to the 
        debtor of the balance of a refund.  The notice shall also advise 
        the debtor of the right to contest the validity of the claim, 
        other than a claim based upon child support under section 
        518.171, 518.54, 518.551, or chapter 518C at a hearing, subject 
        to the restrictions in this paragraph.  The debtor must assert 
        this right by written request to the claimant agency, which 
        request the claimant agency must receive within 45 days of the 
        date of the notice.  This right does not apply to (1) issues 
        relating to the validity of the claim that have been previously 
        raised at a hearing under this section or section 270A.09; (2) 
        issues relating to the validity of the claim that were not 
        timely raised by the debtor under section 270A.08, subdivision 
        2; or (3) issues relating to the validity of the claim that have 
        been previously raised at a hearing conducted under rules 
        promulgated by the United States Department of Housing and Urban 
        Development or any public agency that is responsible for the 
        administration of a low-income housing program, or that were not 
        timely raised by the debtor under those rules; or (4) issues 
        relating to the validity of the claim for which a hearing is 
        discretionary under section 270A.09. 
           Sec. 10.  Minnesota Statutes 1998, section 270A.08, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUIREMENTS OF NOTICE.] (a) This written notice 
        shall clearly and with specificity set forth the basis for the 
        claim to the refund including the name of the benefit program 
        involved if the debt arises from a public assistance grant and 
        the dates on which the debt was incurred and, further, shall 
        advise the debtor of the claimant agency's intention to request 
        setoff of the refund against the debt.  
           (b) Except as provided in paragraph (c), the notice will 
        also advise the debtor that the debt can be setoff against a 
        refund unless the time period allowed by law for collecting the 
        debt has expired, and will advise the debtor of the right to 
        contest the validity of the claim at a hearing.  The debtor must 
        assert this right by written request to the claimant agency, 
        which request the agency must receive within 45 days of the 
        mailing date of the original notice or of the corrected notice, 
        as required by subdivision 1.  If the debtor has not received 
        the notice, the 45 days shall not commence until the debtor has 
        received actual notice.  The debtor shall have the burden of 
        showing no notice and shall be entitled to a hearing on the 
        issue of notice as well as on the merits. 
           (c) If the claimant agency is a public agency that is 
        responsible for the administration of a low-income housing 
        program, the notice will also advise the debtor that the debt 
        can be set off against a refund unless the time period allowed 
        by law for collecting the debt has expired.  If the public 
        agency has provided the debtor with the opportunity to contest 
        the issues relating to the validity of the claim at a hearing 
        under rules promulgated by the United States Department of 
        Housing and Urban Development or the public agency, the notice 
        will advise the debtor of that fact and advise the debtor that 
        no further hearing may be requested by the debtor to contest the 
        validity of the claim. 
           Sec. 11.  Minnesota Statutes 1998, section 287.01, 
        subdivision 3, as amended by Laws 1999, chapter 31, section 1, 
        is amended to read: 
           Subd. 3.  [DEBT.] "Debt" means the principal amount of an 
        obligation to pay money or to perform or refrain from performing 
        an act that is secured in whole or in part by a mortgage of an 
        interest in real property. 
           Sec. 12.  Minnesota Statutes 1998, section 287.05, 
        subdivision 1, as amended by Laws 1999, chapter 31, section 5, 
        is amended to read: 
           Subdivision 1.  [REAL PROPERTY OUTSIDE MINNESOTA.] (a) When 
        a multistate mortgage is intended to secure only a portion of a 
        debt amount recited or referred to in the mortgage, the mortgage 
        may contain the following statement, or its equivalent, on the 
        first page:  "Notwithstanding anything to the contrary herein, 
        enforcement of this mortgage in Minnesota is limited to a debt 
        amount of $....... under chapter 287 of Minnesota Statutes."  In 
        such case, the tax shall be imposed based only on the amount of 
        debt so stated to be secured by real property located in this 
        state; and, the effect of the mortgage, or any amendment or 
        extension, as evidence in any court in this state, or as notice 
        for any purpose in this state, shall be limited to the amount 
        contained in the statement and for which the tax has been 
        paid and additional amounts for accrued interest and advances 
        not subject to tax under section 287.035 or 287.05, subdivision 
        4.  
           (b) All multistate mortgages not taxed under paragraph (a) 
        shall be taxed under sections 287.01 to 287.13 as if the real 
        property identified in the mortgage secures payment of that 
        portion of the maximum debt amount referred to, or incorporated 
        by reference, in the mortgage that is equal to a fraction the 
        numerator of which is the value of the real property described 
        in the mortgage that is located in this state and the 
        denominator of which is the value of all the real property 
        described in the mortgage.  
           Sec. 13.  Minnesota Statutes 1998, section 287.05, 
        subdivision 1a, as amended by Laws 1999, chapter 31, section 5, 
        is amended to read: 
           Subd. 1a.  [REAL PROPERTY IN THIS STATE SECURES PORTION OF 
        DEBT.] (a) When the real property identified in a mortgage is 
        located entirely in this state and is intended to secure only a 
        portion of a debt amount recited or referred to in the mortgage, 
        the mortgage may contain the following statement, or its 
        equivalent, on the first page:  "Notwithstanding anything to the 
        contrary herein, enforcement of this mortgage is limited to a 
        debt amount of $....... under chapter 287 of Minnesota 
        Statutes."  In such case, the tax shall be imposed based only on 
        the amount of debt so stated to be secured by real property; 
        and, the effect of the mortgage, or any amendment or extension, 
        as evidence in any court in this state, or as notice for any 
        purpose in this state, shall be limited to the amount contained 
        in the statement and for which the tax has been paid and 
        additional amounts for accrued interest and advances not subject 
        to tax under section 287.035 or 287.05, subdivision 4.  
           (b) All mortgages that are not multistate mortgages and 
        that are not taxed under paragraph (a) shall be taxed under 
        sections 287.01 to 287.13 as if the real property identified in 
        the mortgage secures payment of the maximum debt amount referred 
        to, or incorporated by reference, in the mortgage. 
           Sec. 14.  Minnesota Statutes 1998, section 289A.31, 
        subdivision 2, is amended to read: 
           Subd. 2.  [JOINT INCOME TAX RETURNS.] (a) If a joint income 
        tax return is made by a husband and wife, the liability for the 
        tax is joint and several.  A spouse who is relieved of qualifies 
        for relief from a liability attributable to a substantial an 
        underpayment under section 6013(e) 6015(b) of the Internal 
        Revenue Code is also relieved of the state income tax liability 
        on the substantial underpayment.  
           (b) In the case of individuals who were a husband and wife 
        prior to the dissolution of their marriage or their legal 
        separation, or prior to the death of one of the individuals, for 
        tax liabilities reported on a joint or combined return, the 
        liability of each person is limited to the proportion of the tax 
        due on the return that equals that person's proportion of the 
        total tax due if the husband and wife filed separate returns for 
        the taxable year.  This provision is effective only when the 
        commissioner receives written notice of the marriage 
        dissolution, legal separation, or death of a spouse from the 
        husband or wife.  No refund may be claimed by an ex-spouse, 
        legally separated or widowed spouse for any taxes paid more than 
        60 days before receipt by the commissioner of the written notice.
           Sec. 15.  Minnesota Statutes 1998, 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, or an order 
        determining an appeal under section 289A.65, subdivision 8, or 
        one year from the date of a return made by the commissioner 
        under section 289A.35, upon payment in full of the tax, 
        penalties, and interest shown on the order or return made by the 
        commissioner, 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 or 
        return made by the commissioner and to issues determined by the 
        order or return made by the commissioner. 
           In the case of assessments under section 289A.38, 
        subdivision 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 or return made by the commissioner that are due for the 
        period before the 3-1/2 year period. 
           Sec. 16.  Minnesota Statutes 1998, section 289A.40, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [INDIVIDUAL INCOME TAXES; REASONABLE 
        CAUSE SUSPENSION DURING PERIOD OF DISABILITY.] If the 
        taxpayer establishes reasonable cause for failing to timely file 
        the return required by section 289A.08, subdivision 1, files the 
        required return within ten years of the date specified in 
        section 289A.18, subdivision 1, and independently verifies that 
        an overpayment has been made, the commissioner shall grant a 
        refund claimed by the original return, notwithstanding the 
        limitations of subdivision 1 meets the requirements for 
        suspending the running of the time period to file a claim for 
        refund under section 6511(h) of the Internal Revenue Code, the 
        time period in subdivision 1 for the taxpayer to file a claim 
        for an individual income tax refund is suspended. 
           Sec. 17.  Minnesota Statutes 1998, section 289A.50, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [REFUND FORM.] On or before January 1, 2000, the 
        commissioner of revenue shall prepare and make available to 
        taxpayers a form for filing claims for refund of taxes paid in 
        excess of the amount due.  If the commissioner fails to prepare 
        a form under this subdivision by January 1, 2000, any claims for 
        refund made after January 1, 2000, and up to ten days after the 
        form is made available to taxpayers are deemed to be made in 
        compliance with the requirement of the form. 
           Sec. 18.  Minnesota Statutes 1998, section 289A.50, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REMEDIES.] (a) If the taxpayer is notified by 
        the commissioner that the refund claim is denied in whole or in 
        part, the taxpayer may: 
           (1) file an administrative appeal as provided in section 
        289A.65, or an appeal with the tax court, within 60 days after 
        issuance of the commissioner's notice of denial; or 
           (2) file an action in the district court to recover the 
        refund. 
           (b) An action in the district court on a denied claim for 
        refund must be brought within 18 months of the date of the 
        denial of the claim by the commissioner. 
           (c) No action in the district court or the tax court shall 
        be brought within six months of the filing of the refund claim 
        unless the commissioner denies the claim within that period. 
           (d) If a taxpayer files a claim for refund and the 
        commissioner has not issued a denial of the claim, the taxpayer 
        may bring an action in the district court or the tax court at 
        any time after the expiration of six months of the time the 
        claim was filed, but within four years of the date that the 
        claim was filed. 
           (e) The commissioner and the taxpayer may agree to extend 
        the period for bringing an action in the district court. 
           (f) An action for refund of tax by the taxpayer must be 
        brought in the district court of the district in which lies the 
        county of the taxpayer's residence or principal place of 
        business.  In the case of an estate or trust, the action must be 
        brought at the principal place of its administration.  Any 
        action may be brought in the district court for Ramsey county. 
           Sec. 19.  Minnesota Statutes 1998, section 289A.55, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INTEREST ON PENALTIES.] (a) A penalty imposed 
        under section 289A.60, subdivision 1, 2, 3, 4, 5, or 6, or 21 
        bears interest from the date the return or payment was required 
        to be filed or paid, including any extensions, to the date of 
        payment of the penalty. 
           (b) A penalty not included in paragraph (a) bears interest 
        only if it is not paid within ten days from the date of notice.  
        In that case interest is imposed from the date of notice to the 
        date of payment. 
           Sec. 20.  Minnesota Statutes 1998, section 289A.60, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMBINED PENALTIES.] When penalties are imposed 
        under subdivisions 1 and 2, except for the minimum penalty under 
        subdivision 2, the penalties imposed under both subdivisions 
        combined must not exceed 38 percent. 
           Sec. 21.  Minnesota Statutes 1998, section 289A.60, 
        subdivision 21, is amended to read: 
           Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
        ELECTRONIC FUNDS TRANSFER.] (a) In addition to other applicable 
        penalties imposed by this section, after notification from the 
        commissioner to the taxpayer that payments are required to be 
        made by means of electronic funds transfer under section 
        289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 
        289A.26, subdivision 2a, and the payments are remitted by some 
        other means, there is a penalty in the amount of five percent of 
        each payment that should have been remitted electronically.  The 
        penalty can be abated under the abatement procedures prescribed 
        in section 270.07, subdivision 6, if the failure to remit the 
        payment electronically is due to reasonable cause. 
           (b) The penalty under paragraph (a) does not apply if the 
        taxpayer pays by other means the amount due at least three 
        business days before the date the payment is due.  This 
        paragraph does not apply after December 31, 1997.  
           Sec. 22.  Minnesota Statutes 1998, 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, 
        subdivision 42, the tax on sales of capital equipment, and 
        replacement capital equipment, shall be imposed and collected as 
        if the rate under section 297A.02, subdivision 1, 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, and the rate under section 297A.02, 
        subdivision 5, shall be paid to the purchaser.  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.  No 
        more than two applications for refunds may be filed under this 
        subdivision in a calendar year.  Unless otherwise specifically 
        provided by this subdivision, the provisions of section sections 
        289A.40 and 289A.50 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. 23.  Minnesota Statutes 1998, section 360.55, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [AGRICULTURAL AIRCRAFT.] Aircraft registered with 
        the Federal Aviation Administration as restricted category 
        aircraft used for agricultural purposes must be listed for 
        taxation and registration upon filing by the owner a sworn 
        affidavit with the commissioner.  The affidavit must state: 
           (1) the name and address of the owner; 
           (2) the name and address of the person from whom purchased; 
           (3) the aircraft's make, year, model number, federal 
        registration number, and manufacturer's identification number; 
        and 
           (4) that the aircraft is owned and operated solely for 
        agricultural operations and purposes. 
        The owner shall file the affidavit and pay an annual fee 
        established under sections 360.511 to 360.67, which must not 
        exceed $500.  Should the aircraft be operated other than for 
        agricultural purposes, the owner shall list the aircraft for 
        taxation and registration under sections 360.511 to 360.67.  If 
        the aircraft is sold, the new owner shall list the aircraft for 
        taxation and registration under this subdivision or under 
        sections 360.511 to 360.67, as applicable. 
           Sec. 24.  Minnesota Statutes 1998, section 414.11, is 
        amended to read: 
           414.11 [MUNICIPAL BOARD SUNSET.] 
           The municipal board shall terminate on December 31 June 1, 
        1999, and all of its authority and duties under this chapter 
        shall be transferred to the office of strategic and long-range 
        planning according to section 15.039, and any money remaining 
        available on that date of the amount appropriated to the 
        municipal board for fiscal year 2000 is transferred and 
        appropriated to the director of the office of strategic and 
        long-range planning to be used for the purposes of this chapter. 
           Sec. 25.  [414.12] [DIRECTOR'S POWERS.] 
           Notwithstanding anything to the contrary in sections 414.01 
        to 414.11, the director of the office of strategic and 
        long-range planning, upon consultation with affected parties and 
        considering the procedures and principles established in 
        sections 414.01 to 414.11, and Laws 1997, chapter 202, article 
        4, sections 1 to 13, may require alternative dispute resolution 
        processes, including those provided in chapter 14, in the 
        execution of the office's duties under this chapter. 
           Sec. 26.  Minnesota Statutes 1998, section 469.169, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ADDITIONAL ZONE ALLOCATIONS.] (a) In addition 
        to tax reductions authorized in subdivisions 7, 8, 9, 10, and 
        11, the commissioner shall allocate tax reductions to border 
        city enterprise zones located on the western border of the state.
        The cumulative total amount of tax reductions for all years of 
        the program under sections 469.1731 to 469.1735, is limited to: 
           (1) for the city of Breckenridge, $394,000; 
           (2) for the city of Dilworth, $118,200; 
           (3) for the city of East Grand Forks, $788,000; 
           (4) for the city of Moorhead, $591,000; and 
           (5) for the city of Ortonville, $78,800. 
           Allocations made under this subdivision may be used for tax 
        reductions provided in section 469.1732 or 469.1734 or for 
        reimbursements under section 469.1735, subdivision 3, but only 
        if the municipality determines that the granting of the tax 
        reduction or offset is necessary to enable a business to expand 
        within a city or to attract a business to a city.  Limitations 
        on allocations under subdivision 7 do not apply to this 
        allocation. 
           (b) The limit in the allocation in paragraph (a) for a 
        municipality may be waived by the commissioner if the 
        commissioner of revenue finds that the municipality must provide 
        an incentive under section 469.1732 or 469.1734 that, by itself 
        or when aggregated with all other tax reductions granted by the 
        municipality under those provisions, exceeds the municipality's 
        maximum allocation under paragraph (a), in order to obtain or 
        retain a business in the city that would not occur in the 
        municipality without the incentive.  The limit may be waived 
        only if the commissioner finds that the business for which the 
        tax incentives are to be provided: 
           (1) requires a private capital investment of at least 
        $1,000,000 within the city; 
           (2) employs at least 25 new or additional full-time 
        equivalent employees within the city; and 
           (3) pays its employees at the location in the city wages 
        that, on the average, will exceed the average wage paid in the 
        county in which the municipality is located. 
           Sec. 27.  Minnesota Statutes 1998, section 469.169, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In 
        addition to tax reductions authorized in subdivisions 7 to 12, 
        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 subdivision 7, do not 
        apply to this allocation. 
           Sec. 28.  Minnesota Statutes 1998, section 469.1735, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [APPROPRIATION; WAIVERS.] An amount sufficient to 
        fund any tax reductions under a waiver made by the commissioner 
        under section 469.169, subdivision 12, paragraph (b), is 
        appropriated to the commissioner of revenue from the general 
        fund.  This appropriation may not be deducted from the dollar 
        limits under this section or section 469.169 or 469.1734. 
           Sec. 29.  Laws 1997, Second Special Session chapter 2, 
        section 6, is amended to read: 
        Sec. 6.  TRADE AND ECONOMIC
        DEVELOPMENT                                           8,200,000
        Notwithstanding the requirement in 
        Minnesota Statutes, section 469.169, 
        subdivision 11, as added by Laws 1997, 
        chapter 231, article 16, section 20, to 
        base allocations to zones in cities on 
        the state's western border on a per 
        capita basis, $1,200,000 is a one-time 
        appropriation from the general fund to 
        the commissioner of trade and economic 
        development for border city enterprise 
        competitiveness grants under Minnesota 
        Statutes, sections 469.166 to 469.173.  
        Funds shall be allocated to communities 
        with significant business losses that 
        are at risk of losing business tax base 
        due to noncompetitiveness with North 
        Dakota and South Dakota and shall be 
        available to communities for locally 
        administered measures to retain their 
        job base.  Allocations made under this 
        paragraph may be used for tax 
        reductions as provided in Minnesota 
        Statutes, 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 
        Minnesota Statutes, section 469.169, 
        subdivision 7, do not apply to this 
        appropriation.  Enterprise zones that 
        receive allocations under this 
        paragraph may continue in effect for 
        purposes of those allocations 
        through December 31, 1998 June 30, 1999.
        $6,000,000 is a one-time appropriation 
        from the general fund to the Minnesota 
        investment fund for grants to local 
        units of government for locally 
        administered operating loan programs 
        for businesses directly and adversely 
        affected by the floods.  Loan criteria 
        and requirements shall be locally 
        established with approval by the 
        department.  For the purposes of this 
        appropriation, Minnesota Statutes, 
        sections 116J.8731, subdivisions 3, 4, 
        5, and 7, and 116J.991, are waived. 
        Businesses that receive grants or loans 
        from this appropriation shall set goals 
        for jobs retained and wages paid within 
        the area designated under Presidential 
        Declaration of Major Disaster, DR-1175. 
        $1,000,000 is a one-time appropriation 
        from the petroleum tank release cleanup 
        fund to the commissioner of trade and 
        economic development.  Notwithstanding 
        Minnesota Statutes, section 115C.08, 
        subdivision 4, as amended by Laws 1997, 
        chapter 200, article 2, section 4, 
        these funds are to be used for grants 
        to buy out property substantially 
        damaged by a petroleum tank release. 
           Sec. 30.  Laws 1999, chapter 112, section 1, subdivision 1, 
        is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
        subdivision apply to this section. 
           (b) "Acre" means an acre of effective agricultural use land 
        within the state of Minnesota as reported to the farm service 
        agency on form 156EZ for the purposes of this subdivision and 
        subdivisions 2 and 9. 
           (c) "Commissioner" means the commissioner of revenue. 
           (d) "Effective agricultural use land" means the land 
        suitable for growing an agricultural crop and excludes land 
        enrolled in the conservation reserve program established by 
        Minnesota Statutes, section 103F.515, or the water bank program 
        established by Minnesota Statutes, section 103F.601. 
           (e) "Farm" or "farm operation" means an agricultural 
        production operation with a unique farm number as reported on 
        form 156EZ to the farm service agency, which includes at least 
        40 acres of effective agricultural use land.  "Farm" also 
        includes an agricultural production operation, which contains 
        less than 40 acres of effective agriculture use if the farm 
        operator operates another farm qualifying under this paragraph.  
           (f) "Farm operator" means a person who is identified as the 
        operator of a farm on form 156EZ filed with the farm service 
        agency. 
           (g) "Farm service agency" means the United States Farm 
        Service Agency. 
           (h) "Farmer" or "farmer at risk" means a person who 
        produces an agricultural crop or livestock and is reported to 
        the farm service agency as bearing a percentage of the risk for 
        the farm operation. 
           (i) "Livestock" means cattle, hogs, poultry, and sheep. 
           (j) "Livestock production facility" means a farm that has 
        produced at least $10,000 in sales of unprocessed livestock or 
        unprocessed dairy products as reported on schedule F or form 
        1065 or form 1120 or 1120S of the farmer's federal income tax 
        return for either taxable years beginning in calendar year 1997 
        or 1998. 
           (k) "Person" includes individuals, fiduciaries, estates, 
        trusts, partnerships, joint ventures, and corporations. 
           Sec. 31.  Laws 1999, chapter 112, section 1, subdivision 3, 
        is amended to read: 
           Subd. 3.  [LIVESTOCK PRODUCERS.] A farmer person who owns 
        or resides on property homesteaded under section 273.124, 
        subdivision 1, paragraph (c), and operates a livestock 
        production facility on 160 acres or less may elect the 
        agricultural property tax refund under subdivisions 4 to 8 in 
        lieu of the per acre payment under subdivision 2.  To qualify, 
        the farmer person must apply for the refund as provided in 
        subdivisions 4 to 8.  The 40 acre minimum farm size under 
        subdivision 1 does not apply to eligibility under subdivisions 4 
        to 8. 
           Sec. 32.  Laws 1999, chapter 112, section 1, subdivision 4, 
        is amended to read: 
           Subd. 4.  [REFUND.] The refund equals the full amount of 
        the property tax payment due and payable on May 15, 1999, on a 
        livestock production facility that is class 1b agricultural 
        homestead property or class 2a agricultural homestead property 
        as defined in Minnesota Statutes, section 273.13, excluding that 
        portion of the tax attributable to the house, garage, and 
        surrounding acre of land.  If a portion of the property was 
        leased for the agricultural production year, the refund amount 
        shall be prorated so that only the portion of the property which 
        was not leased for the agricultural production year qualifies 
        for the refund reduced by $4 for each acre that was leased for 
        the agricultural production year. 
           Sec. 33.  Laws 1999, chapter 112, section 1, subdivision 9, 
        is amended to read: 
           Subd. 9.  [ALTERNATE QUALIFICATION.] (a) If an agricultural 
        production operation does not meet the definition of a farm 
        under subdivision 1 solely because (1) the farm operator had not 
        filed a form 156EZ with the farm service agency, (2) there was 
        an error in the farm service agency's records, or (3) an 
        operator operates more than one farm and the acres of effective 
        agricultural use land of each a farm is less than 40 acres, but 
        the combined acres of effective agricultural use land of all 
        land operated by that operator is at least 40 acres, the 
        commissioner may allow the farm operator to apply for payment 
        under subdivision 2 after providing such information as the 
        commissioner may require to determine the number of acres that 
        would be comparable to the effective agricultural use land 
        listed on form 156EZ. 
           (b) If the number of acres of effective agricultural use 
        land for crop year 1998 for a farm is greater than indicated in 
        the farm service agency's records, the commissioner may allow a 
        farm operator to apply for payment on the greater acreage after 
        providing such information as the commissioner may require. 
           (c) If a person who produced an agricultural crop or 
        livestock in 1998 and bore a portion of the risk for the farm 
        operation does not meet the definition of a farmer under 
        subdivision 1 solely because that information was not reported 
        to the farm service agency, or because there was an error in the 
        farm service agency's records, the commissioner may allow the 
        farmer to be included on an application for payment under 
        subdivision 2 after the farmer provides such information as the 
        commissioner may require to determine the farmer was at risk for 
        that farm. 
           Sec. 34.  [COST ESTIMATES.] 
           Any waiver granted under Minnesota Statutes, section 
        469.169, subdivision 12, paragraph (b), must be reported within 
        60 days to the commissioner of finance and the chairs of the 
        house and senate tax committees. 
           Sec. 35.  [CITY OF RICHFIELD; AIRPORT IMPACT ZONE; 
        FINANCING.] 
           Subdivision 1.  [DESIGNATION OF AIRPORT IMPACT ZONE.] There 
        is established within the city of Richfield an airport impact 
        zone consisting of the real property described as follows: 
        commencing at the intersection of the north city limits with the 
        w'ly ROW line of trunk highway 77, thence south along the w'ly 
        ROW line of trunk highway 77 to the n'ly ROW line of interstate 
        highway 494, thence west along the n'ly ROW line of interstate 
        highway 494 to the center line of Bloomington Avenue, thence 
        north on the center line of Bloomington Avenue to the n'ly ROW 
        line of East 77th Street to a point 133.2 feet east of the e'ly 
        ROW line of Bloomington Avenue, thence north on a line parallel 
        with and 133.2 feet east of the e'ly ROW line of Bloomington 
        Avenue to the north city limits, thence east along the north 
        city limits to the point of beginning. 
           Subd. 2.  [AIRPORT IMPACTS DEFINED.] The legislature finds 
        that: 
           (1) the area included within the airport impact zone 
        defined under this section will experience significant and 
        unique adverse environmental and socioeconomic impacts directly 
        associated with the operation of the Minneapolis-St. Paul 
        International Airport; 
           (2) whether funded directly by the metropolitan airports 
        commission or by other means, expenditures for mitigation of 
        those airport-created impacts involve an aspect of the airport's 
        capital and operating expenses and will be made for airport 
        purposes; 
           (3) appropriate measures to mitigate those adverse impacts 
        include but are not limited to housing replacement activities; 
        and 
           (4) the state legislature has authorized the expansion of 
        the Minneapolis-St. Paul International Airport in order to 
        accommodate the future economic growth of the state.  The 
        environmental quality board has adopted findings that identify 
        the need to make land uses in the area identified in subdivision 
        1 compatible with airport uses. 
           Subd. 3.  [METROPOLITAN AIRPORTS COMMISSION BONDS; 
        SECURITY.] The metropolitan airports commission shall issue and 
        sell its obligations in an aggregate principal amount not to 
        exceed $30,000,000, after deducting costs of issuance, discount, 
        and capitalized interest.  The metropolitan airports commission 
        shall, not later than January 30, 2000, transfer $30,000,000 to 
        the city of Richfield to be used to finance the costs of land 
        and structure acquisition, demolition, relocation and site 
        clearance, and public improvements within the airport impact tax 
        zone established under subdivision 1, including, without 
        limitation, the following housing replacement activities 
        anywhere within the city:  rehabilitation, acquisition, 
        demolition, relocation assistance, and relocation of existing 
        single-family or multifamily housing, and financing of new or 
        existing single-family or multifamily housing that replaces 
        housing units eliminated by redevelopment within the airport 
        impact zone. 
           Subd. 4.  [TERMS.] The obligations must be secured by the 
        revenues and pledges from the metropolitan airports commission 
        in accordance with subdivision 5, and must be issued in 
        accordance with chapter 475, provided that no election is 
        required, net debt limits do not apply, and the obligations must 
        mature no later than 35 years from the date of issue of the 
        original obligations.  The metropolitan airports commission may 
        issue obligations to refund any obligations issued under this 
        section, the principal amount of which shall not be included in 
        computing the limits on amount of obligations issuable by the 
        commission under this section. 
           Subd. 5.  [SECURITY; METROPOLITAN AIRPORTS COMMISSION 
        PAYMENTS.] (a) Notwithstanding anything to the contrary in 
        Minnesota Statutes, sections 473.601 to 473.679, on or before 
        the due date of each principal and interest payment on 
        obligations issued under this section, the treasurer of the 
        metropolitan airports commission shall remit from any available 
        funds to the trustee or paying agent for the obligations an 
        amount sufficient for the payment, without further order from 
        the commission.  The metropolitan airports commission shall be 
        obligated to the holders of obligations issued under this 
        section, to establish, revise from time to time, and collect 
        landing fees according to schedules such as to produce revenues, 
        together with other revenues not restricted by law or regulation 
        available to the metropolitan airport commission, at all times 
        sufficient to pay 105 percent of principal and interest on all 
        obligations issued under this section. 
           (b) Notwithstanding anything to the contrary in Minnesota 
        Statutes, sections 473.601 to 473.679, any obligations issued 
        under this section shall be further secured by the pledge of the 
        full faith and credit of the metropolitan airports commission, 
        which shall be obligated to levy upon all taxable property 
        within the metropolitan area a tax at the times and in the 
        amounts, if any, as may be required to provide funds sufficient 
        to pay all the obligations and interest thereon in the event 
        revenues pledged under paragraph (a), are insufficient for that 
        purpose.  This tax, if ever required to be levied, shall not be 
        subject to any limitation of rate or amount. 
           (c) The pledges described in this section shall be made by 
        resolution of the metropolitan airports commission.  The 
        security afforded by this section extends equally and ratably to 
        all bonds issued under this section and all bonds issued by the 
        metropolitan airports commission secured by similar pledges. 
           Subd. 6.  [OBLIGATION DEFINED.] In subdivisions 1 to 5, 
        "obligation" has the meaning given in Minnesota Statutes, 
        section 475.51, subdivision 3.  The term includes obligations 
        issued to refund prior obligations issued under this section. 
           Subd. 7.  [COMPLIANCE WITH FEDERAL LAW; NO ADDITIONAL 
        COMMITMENTS.] (a) Nothing in this section shall require the 
        metropolitan airports commission to violate federal law or 
        regulation, including the Federal Aviation Administration 
        revenue diversion policy. 
           (b) If this section violates federal law or regulations, 
        including the Federal Aviation Administration revenue diversion 
        policy, the requirements imposed upon the metropolitan airports 
        commission under this section are terminated and shall not 
        become commitments of the state. 
           Subd. 8.  [RELATIONSHIP TO REQUIREMENTS UNDER 
        AGREEMENT.] The requirements imposed upon the metropolitan 
        airports commission under this section are in addition to any 
        requirements imposed upon the commission under the 
        Richfield-metropolitan airports commission noise mitigation 
        agreement dated December 18, 1998. 
           Sec. 36.  [EXTENSIONS FOR OPERATION ALLIED FORCE SERVICE 
        MEMBERS.] 
           The limitations of time provided by Minnesota Statutes, 
        chapter 289A relating to administration of taxes, 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, 
        and appealing to the Supreme Court from decisions of the tax 
        court relating to income taxes are extended, as provided in the 
        special rule for section 7508 of the Internal Revenue Code in 
        section 1, paragraph (c), of Public Law Number 106-21. 
           Sec. 37.  [TRANSFER.] 
           The commissioner of finance shall transfer $2,000,000 from 
        the conservation fund under Minnesota Statutes, section 40A.151, 
        to the general fund on July 1, 1999. 
           Sec. 38.  [APPROPRIATION.] 
           $143,000 is appropriated to the commissioner of revenue 
        from the general fund for the cost of administering this act.  
        This appropriation is for fiscal year 2000 and any unspent 
        amount may be carried over to fiscal year 2001.  This is a 
        one-time appropriation and not part of the budget base for the 
        department. 
           Sec. 39.  [REPEALER.] 
           Minnesota Statutes 1998, sections 297E.12, subdivision 3; 
        297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed.
           Sec. 40.  [EFFECTIVE DATES.] 
           Sections 4, 21, 22, 25, and 29 to 34 are effective the day 
        following final enactment.  
           Section 5 is effective for checks received on or after the 
        day following final enactment.  
           Section 6 is effective the day following final enactment, 
        and applies to offers-in-compromise submitted after June 30, 
        1999. 
           Sections 7 and 19 are effective for payments due on or 
        after the day following final enactment. 
           Sections 8, 9, and 10 are effective for claims for setoff 
        submitted to the commissioner of revenue by claimant agencies 
        after June 30, 1999. 
           Sections 11 to 13 are effective for documents executed, 
        recorded, or registered after June 30, 1999. 
           Section 14, paragraph (a), is effective at the same time 
        that section 6015(b) of the Internal Revenue Code is effective 
        for federal tax purposes.  Section 14, paragraph (b), is 
        effective for claims for innocent spouse relief, requests for 
        allocation of joint income tax liability, and taxes filed or 
        paid on or after the day following final enactment. 
           Section 15 is effective for orders issued on or after the 
        day following final enactment. 
           Section 16 is effective for disabilities existing on or 
        after the date of enactment for which claims for refund have not 
        expired under the time limit in Minnesota Statutes, section 
        289A.40, subdivision 1.  Claims based upon reasonable cause must 
        be filed prior to the expiration of the repealed ten-year period 
        or within one year after the date of enactment, whichever is 
        earlier. 
           Section 18 is effective for refund claims filed on or after 
        the day following final enactment. 
           Section 20 is effective for tax years ending on or after 
        the day following final enactment.  
           Section 23 is effective for aircraft registered after June 
        30, 1999. 
           Section 24 is effective June 1, 1999. 
           Section 36 is effective at the same time section 1, 
        paragraph (c), of Public Law Number 106-21 becomes effective. 
           Presented to the governor May 24, 1999 
           Signed by the governor May 25, 1999, 2:50 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569