2001 Minnesota Statutes

     272.02 Exempt property. 

    Subdivision 1.    Exempt property described.  All 
 property described in this section to the extent limited in this 
 section shall be exempt from taxation. 

    Subd. 1a.    Limitations on exemptions.  The exemptions 
 granted by subdivision 1 are subject to the limits contained in 
 the other subdivisions of this section, section 272.025, or 
 273.13, subdivision 25, paragraph (c), clause (1) or (2), or 
 paragraph (d), clause (2).  

    Subd. 2.    Public burying grounds.  All public burying 
 grounds are exempt. 

    Subd. 3.    Public schoolhouses.  All public 
 schoolhouses are exempt. 

    Subd. 4.    Public hospitals.  All public hospitals are 
 exempt. 

    Subd. 5.    Education institutions.  All academies, 
 colleges, and universities, and all seminaries of learning are 
 exempt. 

    Subd. 6.    Church property.  All churches, church 
 property, and houses of worship are exempt. 

    Subd. 7.    Institutions of public charity.  
 Institutions of purely public charity are exempt 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 subdivision 26. 

    Subd. 8.    Property used for public purposes.  All 
 public property exclusively used for any public purpose is 
 exempt. 

    Subd. 9.    Personal property; exceptions.  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.  

    Subd. 10.    Personal property used for pollution control. 
  Personal property used primarily for the abatement and 
 control of air, water, or land pollution is exempt to the extent 
 that it is so used, and real property is exempt if it 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 subdivision, 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, water, 
 or land pollution shall file an application with the 
 commissioner of revenue.  The Minnesota pollution control agency 
 shall upon request of the commissioner furnish information and 
 advice to the commissioner.  

    The information and advice furnished by the Minnesota 
 pollution control agency must include statements as to whether 
 the equipment, device, or real property meets a standard, rule, 
 criteria, guideline, policy, or order of the Minnesota pollution 
 control agency, and whether the equipment, device, or real 
 property is installed or operated in accordance with it.  On 
 determining that property qualifies for exemption, the 
 commissioner shall issue an order exempting the property from 
 taxation.  The equipment, device, or real property shall 
 continue to be exempt from taxation as long as the order issued 
 by the commissioner remains in effect. 

    Subd. 11.    Wetlands.  Wetlands are exempt.  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 clauses (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. 

    Subd. 12.    Native prairie.  Native prairie lands are 
 exempt.  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 subdivision.  Upon receipt of an application for the 
 exemption provided in this subdivision 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 subdivision shall not grant the public any additional or 
 greater right of access to the native prairie or diminish any 
 right of ownership to it. 

    Subd. 13.    Emergency shelters for victims of domestic 
 abuse.  Property used in a continuous program to provide 
 emergency shelter for victims of domestic abuse is exempt, 
 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. 

    Subd. 14.    Property of senior citizens' groups; local 
 option.  If approved by the governing body of the municipality 
 in which the property is located, property not exceeding one 
 acre is exempt if it 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. 

    Subd. 15.    Property used to generate hydroelectric or 
 hydromechanical power.  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 is exempt. 

    Subd. 16.    Satellite broadcasting facilities.  The 
 following property is exempt 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 this subdivision 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 38.  Before approving a tax 
 exemption pursuant to this subdivision, 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. 

    Subd. 17.    Hot water heat; generation and distribution 
 property.  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, is exempt.  

    Subd. 18.    State leased lands.  Notwithstanding 
 section 273.19, state lands that are leased from the department 
 of natural resources under section 92.46 are exempt. 

    Subd. 19.    Property used to distribute electricity to 
 farmers.  Electric power distribution lines and their 
 attachments and appurtenances, that are used primarily for 
 supplying electricity to farmers at retail, are exempt.  

    Subd. 20.    Transitional housing facilities.  
 Transitional housing facilities are exempt.  "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. 

    Subd. 21.    Property used to provide computing resources 
 to University of Minnesota.  Real and personal property, 
 including leasehold or other personal property interests, is 
 exempt if it is owned and operated by a corporation of which 
 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. 

    Subd. 22.    Wind energy conversion systems.  (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 
 (i) are used as an electric power source; (ii) are 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:  
 (i) are used as an electric power source; (ii) are 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 (i) are used as an electric 
 power source; and (ii) produce more than 12 megawatts of energy 
 as measured by nameplate ratings. 

    (d) The total size of a wind energy conversion system under 
 this subdivision shall be determined according to this paragraph.
 Unless the systems are interconnected with different 
 distribution systems, the nameplate capacity of one wind energy 
 conversion system shall be combined with the nameplate capacity 
 of any other wind energy conversion system that is: 

    (1) located within five miles of the wind energy conversion 
 system; 

    (2) constructed within the same calendar year as the wind 
 energy conversion system; and 

    (3) under common ownership.  

    In the case of a dispute, the commissioner of commerce 
 shall determine the total size of the system, and shall draw all 
 reasonable inferences in favor of combining the systems. 

    (e) In making a determination under paragraph (d), the 
 commissioner of commerce may determine that two wind energy 
 conversion systems are under common ownership when the 
 underlying ownership structure contains similar persons or 
 entities, even if the ownership shares differ between the two 
 systems.  Wind energy conversion systems are not under common 
 ownership solely because the same person or entity provided 
 equity financing for the systems. 

    Subd. 23.    Agricultural containment facilities.  
 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, are exempt. 

    Subd. 24.    Electric power photovoltaic devices.  
 Photovoltaic devices, as defined in section 216C.06, subdivision 
 13, installed after January 1, 1992, and used to produce or 
 store electric power are exempt. 

    Subd. 25.    Ice arenas.  Real and personal property is 
 exempt if it is owned and operated by a private, nonprofit 
 corporation exempt from federal income taxation pursuant to 
 United States Code, title 26, section 501(c)(3), primarily used 
 for an ice arena or ice rink, and used primarily for youth and 
 high school programs. 

    Subd. 26.    Low-income housing.  A structure that is 
 situated on real property is exempt if it 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 subdivision. 

    An exemption under this subdivision remains in effect for 
 taxes levied in each year or partial year of the term of its 
 permanent financing. 

    Subd. 27.    Superior National Forest; recreational 
 property for use by disabled veterans.  Real and personal 
 property is exempt if it 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. 

    Subd. 28.    Manure pits.  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 are exempt.  The exemption shall continue for as 
 long as the permit, order, or certificate issued by the 
 Minnesota pollution control agency remains in effect. 

    Subd. 29.    Cogeneration systems; certain property.  
 Notwithstanding subdivision 9, clause (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), is exempt 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. 

    Subd. 30.    Government property; lease or installment 
 purchases.  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 is exempt 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. 

    Subd. 31.    Business incubator property.  Property 
 owned by a nonprofit charitable organization that qualifies for 
 tax exemption under section 501(c)(3) of the Internal Revenue 
 Code of 1986, as amended through December 31, 1997, that is 
 intended to be used as a business incubator in a 
 high-unemployment county, is exempt.  As used in this 
 subdivision, a "business incubator" is a facility used for the 
 development of nonretail businesses, offering access to 
 equipment, space, services, and advice to the tenant businesses, 
 for the purpose of encouraging economic development, 
 diversification, and job creation in the area served by the 
 organization, and "high-unemployment county" is a county that 
 had an average annual unemployment rate of 7.9 percent or 
 greater in 1997.  Property that qualifies for the exemption 
 under this subdivision is limited to no more than two contiguous 
 parcels and structures that do not exceed in the aggregate 
 40,000 square feet.  This exemption expires after taxes payable 
 in 2005. 

    Subd. 32.    Wastewater treatment systems.  
 Notwithstanding any other law to the contrary, real property 
 that meets the following criteria is exempt: 

    (i) constitutes a wastewater treatment system that (a) is 
 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. 

    Subd. 33.    Electric generation facility personal 
 property.  Notwithstanding subdivision 9, clause (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 subdivision is exempt.  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. 

    Subd. 34.    Limitations on exemptions.  The exemptions 
 granted by subdivisions 1 to 33 are subject to the limits 
 contained in the other subdivisions of this section, section 
 272.025, or 273.13, subdivision 25, paragraph (c), clause (1) or 
 (2), or paragraph (d), clause (2).  

    Subd. 35.    Treatment of property of certain limited 
 liability companies.  For purposes of the exemptions granted 
 by subdivisions 1 to 33, property owned or operated by a limited 
 liability company consisting of a sole member shall be treated 
 as if owned or operated by that member. 

    Subd. 36.    Certain school district property not exempt. 
  Property owned, leased or used by any public elementary or 
 secondary school district for a home, residence or lodging house 
 for any teacher, instructor, or administrator, and any property 
 owned by any public school district which is leased to any 
 person or organization for a nonpublic purpose for one year or 
 more pursuant to section 123B.51, subdivision 4, shall not be 
 included in the exemption provided in subdivisions 1 to 33. 

    Subd. 37.    Certain hospital property not exempt.  
 Property owned or leased by, or loaned to, a hospital and used 
 principally by such hospital as a recreational or rest area for 
 employees, administrators, or medical personnel shall not be 
 included in the exemption provided in subdivisions 1 to 33. 

    Subd. 38.    Conversion to exempt or taxable uses.  (a) 
 Any property exempt from taxation on January 2 of any year 
 which, due to sale or other reason, loses its exemption prior to 
 July 1 of any year, shall be placed on the current assessment 
 rolls for that year. 

    The valuation shall be determined with respect to its value 
 on January 2 of such year.  The classification shall be based 
 upon the use to which the property was put by the purchaser, or 
 in the event the purchaser has not utilized the property by July 
 1, the intended use of the property, determined by the county 
 assessor, based upon all relevant facts. 

    (b) Property subject to tax on January 2 that is acquired 
 before July 1 of the year is exempt for that assessment year if 
 the property is to be used for an exempt purpose under 
 subdivisions 2 to 8.  

    (c) Property which forfeits to the state for nonpayment of 
 real estate taxes on or before December 31 in an assessment 
 year, shall be removed from the assessment rolls for that 
 assessment year.  Forfeited property that is repurchased, or 
 sold at a public or private sale, on or before December 31 of an 
 assessment year shall be placed on the assessment rolls for that 
 year's assessment. 

    Subd. 39.    Economic development; public purpose.  The 
 holding of property by a political subdivision of the state for 
 later resale for economic development purposes shall be 
 considered a public purpose in accordance with subdivision 8 for 
 a period not to exceed eight years, except that for property 
 located in a city of 5,000 population or under that is located 
 outside of the metropolitan area as defined in section 473.121, 
 subdivision 2, the period must not exceed 15 years.  

    The holding of property by a political subdivision of the 
 state for later resale (1) which is purchased or held for 
 housing purposes, or (2) which meets the conditions described in 
 section 469.174, subdivision 10, shall be considered a public 
 purpose in accordance with subdivision 8.  

    The governing body of the political subdivision which 
 acquires property which is subject to this subdivision shall 
 after the purchase of the property certify to the city or county 
 assessor whether the property is held for economic development 
 purposes or housing purposes, or whether it meets the conditions 
 of section 469.174, subdivision 10.  If the property is acquired 
 for economic development purposes and buildings or other 
 improvements are constructed after acquisition of the property, 
 and if more than one-half of the floor space of the buildings or 
 improvements which is available for lease to or use by a private 
 individual, corporation, or other entity is leased to or 
 otherwise used by a private individual, corporation, or other 
 entity the provisions of this subdivision shall not apply to the 
 property.  This subdivision shall not create an exemption from 
 section 272.01, subdivision 2; 272.68; 273.19; or 469.040, 
 subdivision 3; or other provision of law providing for the 
 taxation of or for payments in lieu of taxes for publicly held 
 property which is leased, loaned, or otherwise made available 
 and used by a private person. 

    Subd. 40.    Property used for hydroelectric or 
 hydromechanical power.  Notwithstanding the provisions of 
 subdivision 39, real and personal property used or to be used 
 primarily for the production of hydroelectric or hydromechanical 
 power and leased from the state or a local governmental unit 
 pursuant to section 103G.535 may be exempt from taxation or 
 payments in lieu of taxes.  

    The exemption from taxation or payments in lieu of taxes 
 provided by this subdivision does not apply to hydroelectric or 
 hydromechanical facilities operated at any time between January 
 1, 1980 and January 1, 1984.  

    Subd. 41.    Pollution abatement property.  Property, 
 including real property, qualifies as exempt pollution abatement 
 property under subdivision 10, if the following conditions are 
 satisfied. 

    (a)(1) The property is part of a refuse-derived fuel 
 facility converted from a coal burning electric generation 
 facility and the property consists of:  

    (i) boiler modifications necessary to efficient handling 
 and burning of refuse-derived fuel and transfer of the heat 
 produced by combustion of the fuel; 

    (ii) ash handling and storage systems, such as 
 vacuum-pneumatic equipment, conveyors, crushers, and storage 
 buildings to remove, convey, process, and temporarily store 
 bottom and fly ash from the burning of refuse-derived fuel; 

    (iii) control systems, such as computers, to control the 
 operation of equipment described in clauses (i) to (iv) and 
 other pollution abatement equipment; and 

    (iv) equipment to monitor emissions into the air and 
 combustion efficiency; or 

    (2) the property is a solid waste resource recovery mass 
 burn facility. 

    (b) The facility was constructed and will be operated under 
 a contractual arrangement providing for payment, in whole or 
 part, of the property tax on the property by a political 
 subdivision of the state. 

    Subd. 42.    Property leased to school districts.  
 Property that is leased or rented to a school district is exempt 
 from taxation if it meets the following requirements: 

    (1) the lease must be for a period of at least 12 
 consecutive months; 

    (2) the terms of the lease must require the school district 
 to pay a nominal consideration for use of the building; 

    (3) the school district must use the property to provide 
 direct instruction in any grade from kindergarten through grade 
 12; special education for handicapped children; adult basic 
 education as described in section 124D.52; preschool and early 
 childhood family education; or community education programs, 
 including provision of administrative services directly related 
 to the educational program at that site; and 

    (4) the lease must provide that the school district has the 
 exclusive use of the property during the lease period. 

    Subd. 43.    Personal property; biomass facility.  (a) 
 Notwithstanding subdivision 9, clause (a), attached machinery 
 and other personal property, excluding transmission and 
 distribution lines, that is part of a system that generates 
 biomass electric energy that satisfies the mandate, in whole or 
 in part, established in section 216B.2424, or a system that 
 generates electric energy using waste wood, is exempt if it 
 meets the requirements of this subdivision. 

    (b) The governing bodies of the county, city or town, and 
 school district must each approve, by resolution, the exemption 
 of the personal property under this subdivision.  Each of the 
 governing bodies shall file a copy of the resolution with the 
 county auditor.  The county auditor shall publish the 
 resolutions in newspapers of general circulation within the 
 county.  The voters of the county may request a referendum on 
 the proposed exemption by filing a petition within 30 days after 
 the resolutions are published.  The petition must be signed by 
 voters who reside in the county.  The number of signatures must 
 equal at least ten percent of the number of persons voting in 
 the county in the last general election.  If such a petition is 
 timely filed, the resolutions are not effective until they have 
 been submitted to the voters residing in the county at a general 
 or special election and a majority of votes cast on the question 
 of approving the resolution are in the affirmative.  The 
 commissioner of revenue shall prepare a suggested form of 
 question to be presented at the referendum. 

    (c) The exemption under this subdivision is limited to a 
 maximum of five years, beginning with the assessment year 
 immediately following the year during which the personal 
 property is put in operation.  

    Subd. 44.    Electric generation facility personal 
 property.  Notwithstanding subdivision 9, clause (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 subdivision is exempt.  At the time of 
 construction, the facility must:  

    (1) utilize natural gas as a primary fuel; 

    (2) be located within 20 miles of parallel existing 16-inch 
 and 12-inch (outside diameter) natural gas pipelines and a 
 345-kilovolt high-voltage electric transmission line; and 

    (3) be designed to provide peaking, emergency backup, or 
 contingency services, and have received a certificate of need 
 under section 216B.243 demonstrating demand for its capacity.  

    Construction of the facility must be commenced after 
 January 1, 2000, and before January 1, 2004.  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. 

    Subd. 45.    Biomass electrical generation facility; 
 personal property.  Notwithstanding subdivision 9, clause (a), 
 attached machinery and other personal property which is part of 
 an electrical generating facility that meets the requirements of 
 this subdivision is exempt.  At the time of construction, the 
 facility must: 

    (1) be designed to utilize biomass as established in 
 section 216B.2424 as a primary fuel source; and 

    (2) be constructed for the purpose of generating power at 
 the facility that will be sold pursuant to a contract approved 
 by the public utilities commission in accordance with the 
 biomass mandate imposed under section 216B.2424.  

    Construction of the facility must be commenced after 
 January 1, 2000, and before December 31, 2002.  Property 
 eligible for this exemption does not include electric 
 transmission lines and interconnections or gas pipelines and 
 interconnections appurtenant to the property or facility.  

    Subd. 46.    Residential buildings on temporary sites.  
 A newly constructed building that is situated on real property 
 is exempt if it is: 

    (1) intended for future residential occupancy; 

    (2) on a temporary foundation and intended to be moved; 

    (3) not used as a model or for any other business purposes; 

    (4) not connected to any utilities; and 

    (5) located on land that will not be sold with the building.

    The exemption under this subdivision is allowable for only 
 one assessment year after the date of the initial construction 
 of the building. 

    Subd. 47.    Poultry litter biomass generation facility; 
 personal property.  Notwithstanding subdivision 9, clause (a), 
 attached machinery and other personal property which is part of 
 an electrical generating facility that meets the requirements of 
 this subdivision is exempt.  At the time of construction, the 
 facility must: 

    (1) be designed to utilize poultry litter as a primary fuel 
 source; and 

    (2) be constructed for the purpose of generating power at 
 the facility that will be sold pursuant to a contract approved 
 by the public utilities commission in accordance with the 
 biomass mandate imposed under section 216B.2424. 

    Construction of the facility must be commenced after 
 January 1, 2000, and before December 31, 2002.  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. 

    Subd. 48.    Waste tire cogeneration facility; personal 
 property.  Notwithstanding subdivision 9, clause (a), attached 
 machinery and other personal property which is part of an 
 electric generating facility that meets the requirements of this 
 subdivision is exempt.  At the time of construction, the 
 facility must: 

    (1) be designed to utilize waste tires as a primary fuel 
 source; and 

    (2) be a cogeneration electric generating facility of 15 to 
 25 megawatts of installed capacity. 

    Construction of the facility must be commenced after 
 January 1, 2000, and before January 1, 2004.  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. 

    Subd. 49.    Agricultural historical society property.  
 Property is exempt from taxation if it is owned by a nonprofit 
 charitable or educational organization that qualifies for 
 exemption under section 501(c)(3) of the Internal Revenue Code 
 of 1986, as amended through December 31, 2000, and meets the 
 following criteria: 

    (1) the property is primarily used for storing and 
 exhibiting tools, equipment, and artifacts useful in providing 
 an understanding of local or regional agricultural history.  
 Primary use is determined each year based on the number of days 
 the property is used solely for storage and exhibition purposes; 

    (2) the property is limited to a maximum of 20 acres per 
 owner per county, but includes the land and any taxable 
 structures, fixtures, and equipment on the land; 

    (3) the property is not used for a revenue-producing 
 activity for more than ten days in each calendar year; and 

    (4) the property is not used for residential purposes on 
 either a temporary or permanent basis. 

    HIST: (1975, 1976) RL s 795; 1911 c 242 s 1; 1913 c 259 s 1; 
 1925 c 171 s 1; 1935 c 385 s 1; Ex1936 c 66 s 1; 1943 c 41 s 1; 
 1945 c 44 s 1; 1951 c 639 s 1; 1959 c 610 s 1; 1961 c 481 s 1; 
 1965 c 514 s 1; Ex1967 c 32 art 4 s 2; art 10 s 1; 1969 c 1064 s 
 1; 1971 c 25 s 55; 1971 c 570 s 1,2; 1971 c 790 s 1; 1971 c 794 
 s 3; 1971 c 821 s 1; Ex1971 c 31 art 22 s 3; 1973 c 123 art 5 s 
 7; 1973 c 582 s 3; 1973 c 650 art 24 s 1; 1974 c 316 s 1; 1974 c 
 545 s 1; 1975 c 199 s 2; 1975 c 352 s 1; 1979 c 303 art 2 s 5,6; 
 art 7 s 12; 1980 c 432 s 1; 1980 c 564 art 13 s 1; 1980 c 607 
 art 2 s 6; 1981 c 251 s 1; 1981 c 309 s 1; 1Sp1981 c 1 art 8 s 
 3; art 10 s 5; 1982 c 523 art 27 s 4; 1983 c 213 s 10; 1983 c 
 342 art 2 s 2; art 9 s 1; 1984 c 502 art 3 s 4,5; 1984 c 548 s 
 1,2; 1984 c 593 s 1-4; 1984 c 655 art 1 s 45; 1985 c 248 s 70; 
 1985 c 300 s 4; 1Sp1985 c 14 art 3 s 3; art 4 s 30,31; art 17 s 
 2; 1986 c 444; 1987 c 268 art 6 s 6,7; art 8 s 3; 1987 c 291 s 
 205; 1988 c 719 art 6 s 3; 1989 c 209 art 2 s 31; 1989 c 277 art 
 2 s 15; 1Sp1989 c 1 art 3 s 2-4; art 9 s 17; 1990 c 391 art 8 s 
 32,33; 1990 c 604 art 3 s 7; 1991 c 265 art 5 s 11; 1991 c 291 
 art 1 s 10; art 12 s 4; 1991 c 315 s 2; 1991 c 354 art 4 s 6; 
 1992 c 464 art 1 s 33; 1992 c 511 art 2 s 9; 1993 c 375 art 3 s 
 7,8; art 5 s 3,4; art 8 s 14; 1994 c 416 art 1 s 9; 1994 c 513 s 
 1; 1994 c 614 s 3; 1994 c 647 art 4 s 39; 1995 c 264 art 3 s 4; 
 1996 c 462 s 43; 1997 c 31 art 3 s 1; 1997 c 191 art 1 s 9; 1997 
 c 231 art 2 s 7,8; 1998 c 389 art 3 s 1; 1998 c 397 art 11 s 3; 
 1999 c 243 art 5 s 3; 1999 c 248 s 2; 2000 c 490 art 5 s 3,4; 
 1Sp2001 c 5 art 3 s 16-21; art 7 s 13