Minnesota Legislature
HF 2420
2nd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to financing state and local government; 1.3 providing a sales tax rebate; reducing individual 1.4 income tax rates; making changes to income, sales and 1.5 use, property, excise, mortgage registry and deed, 1.6 health care provider, motor fuels, cigarette and 1.7 tobacco, liquor, insurance premiums, aircraft 1.8 registration, lawful gambling, taconite production, 1.9 solid waste, and special taxes; establishing an 1.10 agricultural homestead credit; changing and allowing 1.11 tax credits, subtractions, and exemptions; changing 1.12 property tax valuation, assessment, levy, 1.13 classification, homestead, credit, aid, exemption, 1.14 review, appeal, abatement, and distribution 1.15 provisions; extending levy limits and changing levy 1.16 authority; providing for reverse referenda on certain 1.17 levy increases; phasing out health care provider 1.18 taxes; extending the suspension of the tax on certain 1.19 insurance premiums; reducing tax rates on lawful 1.20 gambling; changing tax increment financing law and 1.21 providing special authority for certain cities; 1.22 authorizing water and sanitary sewer districts; 1.23 providing for the funding of courts in certain 1.24 judicial districts; changing tax forfeiture and 1.25 delinquency provisions; changing and clarifying tax 1.26 administration, collection, enforcement, and penalty 1.27 provisions; freezing the taconite production tax and 1.28 providing for its distribution; providing for funding 1.29 for border cities; changing fiscal note requirements; 1.30 providing for deposit of tobacco settlement funds; 1.31 providing for allocation of certain budget surpluses; 1.32 requiring studies; establishing a task force; and 1.33 providing for appointments; transferring funds; 1.34 appropriating money; amending Minnesota Statutes 1998, 1.35 sections 3.986, subdivision 2; 3.987, subdivision 1; 1.36 16A.152, subdivision 2, and by adding a subdivision; 1.37 16A.1521; 60A.15, subdivision 1; 62J.041, subdivision 1.38 1; 62Q.095, subdivision 6; 92.51; 97A.065, subdivision 1.39 2; 214.16, subdivisions 2 and 3; 270.07, subdivision 1.40 1; 270.65; 270.67, by adding a subdivision; 270B.01, 1.41 subdivision 8; 270B.14, subdivision 1, and by adding a 1.42 subdivision; 271.01, subdivision 5; 271.21, 1.43 subdivision 2; 272.02, subdivision 1; 272.027; 272.03, 1.44 subdivision 6; 273.11, subdivisions 1a and 16; 1.45 273.111, by adding a subdivision; 273.124, 1.46 subdivisions 1, 7, 8, 13, 14, and by adding a 2.1 subdivision; 273.13, subdivisions 22, 23, 24, 25, 31, 2.2 and by adding a subdivision; 273.1382; 273.1398, 2.3 subdivisions 2, 8, and by adding a subdivision; 2.4 273.1399, subdivision 6; 273.20; 274.01, subdivision 2.5 1; 275.065, subdivisions 3, 5a, 6, 8, and by adding a 2.6 subdivision; 275.07, subdivision 1; 275.71, 2.7 subdivisions 2, 3, and 4; 276.131; 279.37, 2.8 subdivisions 1, 1a, and 2; 281.23, subdivisions 2, 4, 2.9 and 6; 282.01, subdivisions 1, 4, and 7; 282.04, 2.10 subdivision 2; 282.05; 282.08; 282.09; 282.241; 2.11 282.261, subdivision 4, and by adding a subdivision; 2.12 283.10; 287.01, subdivision 3, as amended; 287.05, 2.13 subdivisions 1, as amended, and 1a, as amended; 2.14 289A.02, subdivision 7; 289A.18, subdivision 4; 2.15 289A.20, subdivision 4; 289A.31, subdivision 2; 2.16 289A.40, subdivisions 1 and 1a; 289A.50, subdivision 2.17 7, and by adding a subdivision; 289A.56, subdivision 2.18 4; 289A.60, subdivisions 3 and 21; 290.01, 2.19 subdivisions 7, 19, 19a, 19b, 19f, 31, and by adding a 2.20 subdivision; 290.06, subdivisions 2c, 2d, and by 2.21 adding subdivisions; 290.0671, subdivision 1; 2.22 290.0672, subdivision 1; 290.0674, subdivisions 1 and 2.23 2; 290.091, subdivisions 1, 2, and 6; 290.0921, 2.24 subdivision 5; 290.095, subdivision 3; 290.17, 2.25 subdivisions 3, 4, and 6; 290.191, subdivisions 2 and 2.26 3; 290.9725; 290.9726, by adding a subdivision; 2.27 290A.03, subdivisions 3 and 15; 290B.03, subdivision 2.28 1; 290B.04, subdivisions 3 and 4; 290B.05, subdivision 2.29 1; 291.005, subdivision 1; 295.50, subdivision 4; 2.30 295.52, subdivision 7; 295.53, subdivision 1; 295.55, 2.31 subdivisions 2 and 3; 296A.16, by adding subdivisions; 2.32 297A.01, subdivision 15; 297A.15, subdivision 5; 2.33 297A.25, subdivisions 9, 11, 63, 73, and by adding 2.34 subdivisions; 297A.48, by adding a subdivision; 2.35 297B.01, subdivision 7; 297B.03; 297E.01, by adding a 2.36 subdivision; 297E.02, subdivisions 1, 3, 4, and 6; 2.37 297F.01, subdivision 23; 297F.17, subdivision 6; 2.38 297H.05; 297H.06, subdivision 2; 298.24, subdivision 2.39 1; 298.28, subdivision 9a; 299D.03, subdivision 5; 2.40 357.021, subdivision 1a; 360.55, by adding a 2.41 subdivision; 375.192, subdivision 2; 383C.482, 2.42 subdivision 1; 465.82, by adding a subdivision; 2.43 469.169, subdivision 12, and by adding a subdivision; 2.44 469.1735, by adding a subdivision; 469.176, 2.45 subdivision 4g; 469.1763, by adding a subdivision; 2.46 469.1771, subdivision 1, and by adding a subdivision; 2.47 469.1791, subdivision 3; 469.1813, subdivisions 1, 2, 2.48 3, 6, and by adding a subdivision; 469.1815, 2.49 subdivision 2; 473.249, subdivision 1; 473.252, 2.50 subdivision 2; 473.253, subdivision 1; 477A.03, 2.51 subdivision 2; 477A.06, subdivision 1; 485.018, 2.52 subdivision 5; 487.02, subdivision 2; 487.32, 2.53 subdivision 3; 487.33, subdivision 5; and 574.34, 2.54 subdivision 1; Laws 1988, chapter 645, section 3; Laws 2.55 1997, chapter 231, article 1, section 19, subdivisions 2.56 1 and 3; Laws 1997, chapter 231, article 3, section 9; 2.57 Laws 1997, First Special Session chapter 3, section 2.58 27; Laws 1997, Second Special Session chapter 2, 2.59 section 6; Laws 1998, chapter 389, article 1, section 2.60 1; and Laws 1998, chapter 389, article 8, section 44, 2.61 subdivisions 5, 6, and 7, as amended; proposing coding 2.62 for new law in Minnesota Statutes, chapters 16A; 62Q; 2.63 256L; 275; 297A; 469; and 473; repealing Minnesota 2.64 Statutes 1998, sections 13.99, subdivision 86b; 2.65 16A.724; 16A.76; 92.22; 144.1484, subdivision 2; 2.66 256L.02, subdivision 3; 273.11, subdivision 10; 2.67 280.27; 281.13; 281.38; 284.01; 284.02; 284.03; 2.68 284.04; 284.05; 284.06; 295.50; 295.51; 295.52; 2.69 295.53; 295.54; 295.55; 295.56; 295.57; 295.58; 2.70 295.582; 295.59; 297E.12, subdivision 3; 297F.19, 2.71 subdivision 4; 297G.18, subdivision 4; and 473.252, 3.1 subdivisions 4 and 5; Laws 1997, chapter 231, article 3.2 1, section 19, subdivision 2; and Laws 1998, chapter 3.3 389, article 3, section 45. 3.4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.5 ARTICLE 1 3.6 SALES TAX REBATE 3.7 Section 1. [STATEMENT OF PURPOSE.] 3.8 (a) The state of Minnesota derives revenues from a variety 3.9 of taxes, fees, and other sources, including the state sales tax. 3.10 (b) It is fair and reasonable to refund the existing state 3.11 budget surplus in the form of a rebate of nonbusiness consumer 3.12 sales taxes paid by individuals in calendar year 1997. 3.13 (c) Information concerning the amount of sales tax paid at 3.14 various income levels is contained in the Minnesota tax 3.15 incidence report, which is written by the commissioner of 3.16 revenue and presented to the legislature according to Minnesota 3.17 Statutes, section 270.0682. 3.18 (d) It is fair and reasonable to use information contained 3.19 in the Minnesota tax incidence report to determine the 3.20 proportionate share of the sales tax rebate due each eligible 3.21 taxpayer since no effective or practical mechanism exists for 3.22 determining the amount of actual sales tax paid by each eligible 3.23 individual. 3.24 Sec. 2. [SALES TAX REBATE.] 3.25 (a) An individual who: (1) was eligible for a credit under 3.26 Laws 1997, chapter 231, article 1, section 16, as amended by 3.27 Laws 1997, First Special Session chapter 5, section 35, and Laws 3.28 1997, Third Special Session chapter 3, section 11, and Laws 3.29 1998, chapter 304, and Laws 1998, chapter 389, article 1, 3.30 section 3, and who filed for that credit on or before April 15, 3.31 1999, (2) filed a 1997 Minnesota income tax return and had a tax 3.32 liability before refundable credits on that return of at least 3.33 $1 but did not file the claim for credit authorized under Laws 3.34 1997, chapter 231, article 1, section 16, as amended, and who 3.35 was not claimed as a dependent on a 1997 federal income tax 3.36 return filed by another person, or (3) had their property taxes 3.37 payable for 1997 on their homestead abated to zero under Laws 4.1 1997, chapter 321, article 2, section 64; shall receive a sales 4.2 tax rebate. 4.3 (b) The sales tax rebate for taxpayers who filed the claim 4.4 for credit authorized under Laws 1997, chapter 231, article 1, 4.5 section 16, as amended, or the 1997 Minnesota income tax return 4.6 as married filing joint or head of household must be computed 4.7 according to the following schedule: 4.8 Income Sales Tax Rebate 4.9 less than $2,500 $ 380 4.10 at least $2,500 but less than $5,000 $ 497 4.11 at least $5,000 but less than $10,000 $ 532 4.12 at least $10,000 but less than $15,000 $ 582 4.13 at least $15,000 but less than $20,000 $ 641 4.14 at least $20,000 but less than $25,000 $ 680 4.15 at least $25,000 but less than $30,000 $ 732 4.16 at least $30,000 but less than $35,000 $ 808 4.17 at least $35,000 but less than $40,000 $ 869 4.18 at least $40,000 but less than $45,000 $ 927 4.19 at least $45,000 but less than $50,000 $ 977 4.20 at least $50,000 but less than $60,000 $1,028 4.21 at least $60,000 but less than $70,000 $1,136 4.22 at least $70,000 but less than $80,000 $1,232 4.23 at least $80,000 but less than $90,000 $1,353 4.24 at least $90,000 but less than $100,000 $1,503 4.25 at least $100,000 but less than $120,000 $1,628 4.26 at least $120,000 but less than $140,000 $1,783 4.27 at least $140,000 but less than $160,000 $1,928 4.28 at least $160,000 but less than $180,000 $2,064 4.29 at least $180,000 but less than $200,000 $2,193 4.30 at least $200,000 but less than $400,000 $2,804 4.31 at least $400,000 but less than $600,000 $3,690 4.32 at least $600,000 but less than $800,000 $4,427 4.33 $800,000 and over $5,000 4.34 (c) The sales tax rebate for individuals who filed the 4.35 claim for credit authorized under Laws 1997, chapter 231, 4.36 article 1, section 16, as amended, or the 1997 Minnesota income 5.1 tax return, as single or married filing separately must be 5.2 computed according to the following schedule: 5.3 Income Sales Tax Rebate 5.4 less than $2,500 $ 217 5.5 at least $2,500 but less than $5,000 $ 264 5.6 at least $5,000 but less than $10,000 $ 318 5.7 at least $10,000 but less than $15,000 $ 432 5.8 at least $15,000 but less than $20,000 $ 492 5.9 at least $20,000 but less than $25,000 $ 526 5.10 at least $25,000 but less than $30,000 $ 546 5.11 at least $30,000 but less than $40,000 $ 604 5.12 at least $40,000 but less than $50,000 $ 688 5.13 at least $50,000 but less than $70,000 $ 823 5.14 at least $70,000 but less than $100,000 $1,016 5.15 at least $100,000 but less than $140,000 $1,224 5.16 at least $140,000 but less than $200,000 $1,478 5.17 at least $200,000 but less than $400,000 $2,004 5.18 $400,000 and over $2,500 5.19 (d) Individuals who were not residents of Minnesota for any 5.20 part of 1997 and who paid more than $10 in Minnesota sales tax 5.21 on nonbusiness consumer purchases in that year qualify for a 5.22 rebate under this paragraph only. Qualifying nonresidents must 5.23 file a claim for rebate on a form prescribed by the commissioner 5.24 before the later of May 15, 1999, or 30 days after the date of 5.25 enactment of this act. The claim must include receipts showing 5.26 the Minnesota sales tax paid and the date of the sale. Taxes 5.27 paid on purchases allowed in the computation of federal taxable 5.28 income or reimbursed by an employer are not eligible for the 5.29 rebate. The commissioner shall determine the qualifying taxes 5.30 paid and rebate the lesser of: 5.31 (1) 73.181 percent of that amount; or 5.32 (2) the maximum amount for which the claimant would have 5.33 been eligible as determined under paragraph (b) if the taxpayer 5.34 filed the 1997 federal income tax return as a married taxpayer 5.35 filing jointly or head of household, or as determined under 5.36 paragraph (c) for other taxpayers. 6.1 (e) "Income," for purposes of this section other than 6.2 paragraph (d), is taxable income as defined in section 63 of the 6.3 Internal Revenue Code of 1986, as amended through December 31, 6.4 1996, plus the sum of any additions to federal taxable income 6.5 for the taxpayer under Minnesota Statutes, section 290.01, 6.6 subdivision 19a, and reported on the original return submitted 6.7 to claim the credit under Laws 1997, chapter 231, article 1, 6.8 section 16, as amended, or by subsequent adjustments to that 6.9 return made within the time limits specified in paragraph (h). 6.10 For an individual who was a resident of Minnesota for less than 6.11 the entire year, the sales tax rebate equals the sales tax 6.12 rebate calculated under paragraph (b) or (c) multiplied by the 6.13 percentage determined pursuant to Minnesota Statutes, section 6.14 290.06, subdivision 2c, paragraph (e), as calculated on the 6.15 original return submitted to claim the credit under Laws 1997, 6.16 chapter 231, article 1, section 16, as amended, or by subsequent 6.17 adjustments to that return made within the time limits specified 6.18 in paragraph (h). For purposes of paragraph (d), "income" is 6.19 taxable income as defined in section 63 of the Internal Revenue 6.20 Code of 1986, as amended through December 31, 1996, and reported 6.21 on the taxpayer's original federal tax return for the first 6.22 taxable year beginning after December 31, 1996. 6.23 (f) The commissioner of revenue must begin making sales tax 6.24 rebates by June 1, 1999. Sales tax rebates not paid by July 1, 6.25 1999, shall bear interest at the rate specified in Minnesota 6.26 Statutes, section 270.75. 6.27 (g) A sales tax rebate shall not be adjusted based on 6.28 changes to the return on which the claim for credit authorized 6.29 under Laws 1997, chapter 231, article 1, section 16, as amended, 6.30 is based that are made by order of assessment after April 15, 6.31 1999, or made by the taxpayer that are filed with the 6.32 commissioner of revenue after April 15, 1999. 6.33 (h) Individuals who filed a joint claim for credit under 6.34 Laws 1997, chapter 231, article 1, section 16, as amended, shall 6.35 receive a joint sales tax rebate. After the sales tax rebate 6.36 has been issued, but before the check has been cashed, either 7.1 joint claimant may request a separate check for one-half of the 7.2 joint sales tax rebate. 7.3 (i) The commissioner may pay rebates required by this 7.4 section by electronic funds transfer to individuals who 7.5 requested their 1998 individual income tax refund be paid 7.6 through electronic funds transfer. The commissioner may make 7.7 the electronic funds transfer payments to the same financial 7.8 institution and into the same account as the 1998 individual 7.9 income tax refund. 7.10 (j) The sales tax rebate is a "Minnesota tax law" for 7.11 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 7.12 (k) The sales tax rebate is "an overpayment of any tax 7.13 collected by the commissioner" for purposes of Minnesota 7.14 Statutes, section 270.07, subdivision 5. For purposes of this 7.15 paragraph, a joint sales tax rebate is payable to each spouse 7.16 equally. 7.17 (l) If the commissioner of revenue cannot locate an 7.18 individual entitled to a sales tax rebate by July 1, 2001, or if 7.19 an individual to whom a sales tax rebate was issued has not 7.20 cashed the check by July 1, 2001, the right to the sales tax 7.21 rebate shall lapse and the check shall be deposited in the 7.22 general fund. 7.23 (m) Individuals entitled to a sales tax rebate pursuant to 7.24 paragraph (a), but who did not receive one, and individuals who 7.25 receive a sales tax rebate that was not correctly computed, must 7.26 file a claim with the commissioner before July 1, 2000, in a 7.27 form prescribed by the commissioner. These claims shall be 7.28 treated as if they are a claim for refund under Minnesota 7.29 Statutes, section 289A.50, subdivisions 4 and 7. 7.30 (n) The sales tax rebate is a refund subject to revenue 7.31 recapture under Minnesota Statutes, chapter 270A. The 7.32 commissioner of revenue shall remit the entire refund to the 7.33 claimant agency, which shall, upon the request of the spouse who 7.34 does not owe the debt, refund one-half of the joint sales tax 7.35 rebate to the spouse who does not owe the debt. 7.36 (o) The amount necessary to make the sales tax rebates and 8.1 interest provided in this section is appropriated from the 8.2 general fund to the commissioner of revenue in fiscal years 8.3 1999, 2000, and 2001. The first $200,000,000 of this 8.4 appropriation is from the tax reform and reduction account. 8.5 (p) If a sales tax rebate check is cashed by someone other 8.6 than the payee or payees of the check, and the commissioner of 8.7 revenue determines that the check has been forged or improperly 8.8 endorsed, the commissioner may issue an order of assessment for 8.9 the amount of the check against the person or persons cashing 8.10 it. The assessment must be made within two years after the 8.11 check is cashed, but if cashing the check constitutes theft 8.12 under Minnesota Statutes, section 609.52, or forgery under 8.13 Minnesota Statutes, section 609.631, the assessment can be made 8.14 at any time. The assessment may be appealed administratively 8.15 and judicially. The commissioner may take action to collect the 8.16 assessment in the same manner as provided by Minnesota Statutes, 8.17 chapter 289A, for any other order of the commissioner assessing 8.18 tax. 8.19 (q) Notwithstanding Minnesota Statutes, sections 9.031, 8.20 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 8.21 commissioner of revenue may take whatever actions the 8.22 commissioner deems necessary to pay the rebates required by this 8.23 section, and may, in consultation with the commissioner of 8.24 finance and the state treasurer, contract with a private vendor 8.25 or vendors to process, print, and mail the rebate checks or 8.26 warrants required under this section and receive and disburse 8.27 state funds to pay those checks or warrants. 8.28 Sec. 3. [PAYMENT TO STATE.] 8.29 (a) A taxpayer receiving a rebate under section 2 may 8.30 endorse and return the rebate check to the state and designate 8.31 that the returned rebate must be deposited in one or more of the 8.32 following accounts for use only for the purposes designated in 8.33 this section: 8.34 (1) an account for the basic sliding fee child care program 8.35 for child care assistance to families administered by the 8.36 commissioner of children, families, and learning under Minnesota 9.1 Statutes, section 119B.03; 9.2 (2) an account to lower kindergarten through grade 6 9.3 classroom size and reduce instructor-to-student ratios to an 9.4 average level of 1 to 17 to be administered by the commissioner 9.5 of children, families, and learning; 9.6 (3) the affordable rental investment fund to be used by the 9.7 housing finance agency for family rental housing assistance 9.8 under Minnesota Statutes, section 462A.21, subdivision 8b; 9.9 (4) the contaminated site cleanup and development account 9.10 to be used by the commissioner of trade and economic development 9.11 for contamination cleanup development grants under Minnesota 9.12 Statutes, sections 116J.551 to 116J.556; 9.13 (5) an account to increase funding of the State Board of 9.14 the Arts for grants under chapter 129D; and 9.15 (6) the general fund for use as appropriated by law. 9.16 (b) Each rebate check shall have printed on the back of the 9.17 check that it may be endorsed to the state of Minnesota and used 9.18 for the designated option under paragraph (a). If more than one 9.19 use of the rebate is designated, the rebate must be divided 9.20 evenly between the designated options. If a check is endorsed 9.21 and mailed to the state and no option is designated, the check 9.22 must be deposited in the general fund. 9.23 (c) The rebate check shall be accompanied by a notice 9.24 prepared by the commissioner of revenue that explains the 9.25 taxpayer's option to endorse the check to the state, and 9.26 explains the uses of the funds that the taxpayer may designate. 9.27 In preparing the notice, the commissioner of revenue shall 9.28 consult with the commissioners or agencies that administer the 9.29 funds or accounts. The notice shall also explain that a 9.30 taxpayer may cash the rebate check and mail a contribution of 9.31 any amount to the state and that the contribution must be used 9.32 for the option or options under paragraph (a) as designated by 9.33 the taxpayer. The notice shall contain in bold print the 9.34 address to which the endorsed check or a state contribution may 9.35 be mailed. 9.36 (d) Funds endorsed and mailed to the state and 10.1 contributions mailed to the state under this section shall be 10.2 deposited by the commissioner of finance in the fund or account 10.3 designated, and are appropriated to the agency or commissioner 10.4 designated by the taxpayer or contributor for use as provided in 10.5 this section. Funds appropriated under this paragraph are 10.6 available until expended. 10.7 (e) Funds appropriated under this section are in addition 10.8 to any funds appropriated for the purposes given in this section 10.9 and may not be used for any other purposes including the 10.10 reduction of any other appropriations. Funds appropriated to a 10.11 commissioner or agency under this section are not included in 10.12 the department's or agency's budget base. 10.13 Sec. 4. [APPROPRIATIONS.] 10.14 $1,000,000 is appropriated from the general fund to the 10.15 commissioner of revenue to administer the sales tax rebate for 10.16 fiscal year 1999. Any unencumbered balance remaining on June 10.17 30, 1999, does not cancel but is available for expenditure by 10.18 the commissioner of revenue until June 30, 2001. 10.19 Sec. 5. [EFFECTIVE DATE.] 10.20 Sections 1 to 4 are effective the day following final 10.21 enactment. 10.22 ARTICLE 2 10.23 INCOME AND FRANCHISE TAXES 10.24 Section 1. Minnesota Statutes 1998, section 289A.02, 10.25 subdivision 7, is amended to read: 10.26 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 10.27 defined otherwise, "Internal Revenue Code" means the Internal 10.28 Revenue Code of 1986, as amended through December 31,19971998. 10.29 Sec. 2. Minnesota Statutes 1998, section 290.01, 10.30 subdivision 7, is amended to read: 10.31 Subd. 7. [RESIDENT.] The term "resident" means (1) any 10.32 individual domiciled in Minnesota, except that an individual is 10.33 not a "resident" for the period of time that the individual is a 10.34 "qualified individual" as defined in section 911(d)(1) of the 10.35 Internal Revenue Code, if the qualified individual notifies the 10.36 county within three months of moving out of the country that 11.1 homestead status be revoked for the Minnesota residence of the 11.2 qualified individual, and the property is not classified as a 11.3 homestead while the individual remains a qualified individual; 11.4 and (2) any individual domiciled outside the state who maintains 11.5 a place of abode in the state and spends in the aggregate more 11.6 than one-half of the tax year in Minnesota, unless the 11.7 individual or the spouse of the individual is in the armed 11.8 forces of the United States, or the individual is covered under 11.9 the reciprocity provisions in section 290.081. 11.10 For purposes of this subdivision, presence within the state 11.11 for any part of a calendar day constitutes a day spent in the 11.12 state. Individuals shall keep adequate records to substantiate 11.13 the days spent outside the state. 11.14 The term "abode" means a dwelling maintained by an 11.15 individual, whether or not owned by the individual and whether 11.16 or not occupied by the individual, and includes a dwelling place 11.17 owned or leased by the individual's spouse. 11.18 Neither the commissioner nor any court shall consider 11.19 charitable contributions made by an individual within or without 11.20 the state in determining if the individual is domiciled in 11.21 Minnesota. 11.22 Sec. 3. Minnesota Statutes 1998, section 290.01, 11.23 subdivision 19, is amended to read: 11.24 Subd. 19. [NET INCOME.] The term "net income" means the 11.25 federal taxable income, as defined in section 63 of the Internal 11.26 Revenue Code of 1986, as amended through the date named in this 11.27 subdivision, incorporating any elections made by the taxpayer in 11.28 accordance with the Internal Revenue Code in determining federal 11.29 taxable income for federal income tax purposes, and with the 11.30 modifications provided in subdivisions 19a to 19f. 11.31 In the case of a regulated investment company or a fund 11.32 thereof, as defined in section 851(a) or 851(g) of the Internal 11.33 Revenue Code, federal taxable income means investment company 11.34 taxable income as defined in section 852(b)(2) of the Internal 11.35 Revenue Code, except that: 11.36 (1) the exclusion of net capital gain provided in section 12.1 852(b)(2)(A) of the Internal Revenue Code does not apply; 12.2 (2) the deduction for dividends paid under section 12.3 852(b)(2)(D) of the Internal Revenue Code must be applied by 12.4 allowing a deduction for capital gain dividends and 12.5 exempt-interest dividends as defined in sections 852(b)(3)(C) 12.6 and 852(b)(5) of the Internal Revenue Code; and 12.7 (3) the deduction for dividends paid must also be applied 12.8 in the amount of any undistributed capital gains which the 12.9 regulated investment company elects to have treated as provided 12.10 in section 852(b)(3)(D) of the Internal Revenue Code. 12.11 The net income of a real estate investment trust as defined 12.12 and limited by section 856(a), (b), and (c) of the Internal 12.13 Revenue Code means the real estate investment trust taxable 12.14 income as defined in section 857(b)(2) of the Internal Revenue 12.15 Code. 12.16 The net income of a designated settlement fund as defined 12.17 in section 468B(d) of the Internal Revenue Code means the gross 12.18 income as defined in section 468B(b) of the Internal Revenue 12.19 Code. 12.20 The Internal Revenue Code of 1986, as amended through 12.21 December 31, 1986, shall be in effect for taxable years 12.22 beginning after December 31, 1986. The provisions of sections 12.23 10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 12.24 10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 12.25 Omnibus Budget Reconciliation Act of 1987, Public Law Number 12.26 100-203, the provisions of sections 1001, 1002, 1003, 1004, 12.27 1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 12.28 1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 12.29 6277, and 6282 of the Technical and Miscellaneous Revenue Act of 12.30 1988, Public Law Number 100-647, the provisions of sections 12.31 7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 12.32 1989, Public Law Number 101-239, the provisions of sections 12.33 1305, 1704(r), and 1704(e)(1) of the Small Business Job 12.34 Protection Act, Public Law Number 104-188, and the provisions of 12.35 sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 12.36 of 1997, Public Law Number 105-34, and the provisions of section 13.1 4004 of the Omnibus Consolidated and Emergency Supplemental 13.2 Appropriations Act, 1999, Public Law Number 105-277, shall be 13.3 effective at the time they become effective for federal income 13.4 tax purposes. 13.5 The Internal Revenue Code of 1986, as amended through 13.6 December 31, 1987, shall be in effect for taxable years 13.7 beginning after December 31, 1987. The provisions of sections 13.8 4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 13.9 6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 13.10 6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 13.11 Act of 1988, Public Law Number 100-647, the provisions of 13.12 sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 13.13 of 1989, Public Law Number 101-239, and the provisions of 13.14 section 11702 of the Revenue Reconciliation Act of 1990, Public 13.15 Law Number 101-508, shall become effective at the time they 13.16 become effective for federal tax purposes. 13.17 The Internal Revenue Code of 1986, as amended through 13.18 December 31, 1988, shall be in effect for taxable years 13.19 beginning after December 31, 1988. The provisions of sections 13.20 7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 13.21 7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 13.22 7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 13.23 Reconciliation Act of 1989, Public Law Number 101-239, the 13.24 provision of section 1401 of the Financial Institutions Reform, 13.25 Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 13.26 the provisions of sections 11701 and 11703 of the Revenue 13.27 Reconciliation Act of 1990, Public Law Number 101-508, and the 13.28 provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 13.29 Small Business Job Protection Act, Public Law Number 104-188, 13.30 shall become effective at the time they become effective for 13.31 federal tax purposes. 13.32 The Internal Revenue Code of 1986, as amended through 13.33 December 31, 1989, shall be in effect for taxable years 13.34 beginning after December 31, 1989. The provisions of sections 13.35 11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 13.36 the Revenue Reconciliation Act of 1990, Public Law Number 14.1 101-508, and the provisions of sections 13224 and 13261 of the 14.2 Omnibus Budget Reconciliation Act of 1993, Public Law Number 14.3 103-66, shall become effective at the time they become effective 14.4 for federal purposes. 14.5 The Internal Revenue Code of 1986, as amended through 14.6 December 31, 1990, shall be in effect for taxable years 14.7 beginning after December 31, 1990. 14.8 The provisions of section 13431 of the Omnibus Budget 14.9 Reconciliation Act of 1993, Public Law Number 103-66, shall 14.10 become effective at the time they became effective for federal 14.11 purposes. 14.12 The Internal Revenue Code of 1986, as amended through 14.13 December 31, 1991, shall be in effect for taxable years 14.14 beginning after December 31, 1991. 14.15 The provisions of sections 1936 and 1937 of the 14.16 Comprehensive National Energy Policy Act of 1992, Public Law 14.17 Number 102-486, the provisions of sections 13101, 13114, 13122, 14.18 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of the 14.19 Omnibus Budget Reconciliation Act of 1993, Public Law Number 14.20 103-66, and the provisions of section 1604(a)(1), (2), and (3) 14.21 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 14.22 shall become effective at the time they become effective for 14.23 federal purposes. 14.24 The Internal Revenue Code of 1986, as amended through 14.25 December 31, 1992, shall be in effect for taxable years 14.26 beginning after December 31, 1992. 14.27 The provisions of sections 13116, 13121, 13206, 13210, 14.28 13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 14.29 the Omnibus Budget Reconciliation Act of 1993, Public Law Number 14.30 103-66, the provisions of sections 1703(a), 1703(d), 1703(i), 14.31 1703(l), and 1703(m) of the Small Business Job Protection Act, 14.32 Public Law Number 104-188, and the provision of section 1604(c) 14.33 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 14.34 shall become effective at the time they become effective for 14.35 federal purposes. 14.36 The Internal Revenue Code of 1986, as amended through 15.1 December 31, 1993, shall be in effect for taxable years 15.2 beginning after December 31, 1993. 15.3 The provision of section 741 of Legislation to Implement 15.4 Uruguay Round of General Agreement on Tariffs and Trade, Public 15.5 Law Number 103-465, the provisions of sections 1, 2, and 3, of 15.6 the Self-Employed Health Insurance Act of 1995, Public Law 15.7 Number 104-7, the provision of section 501(b)(2) of the Health 15.8 Insurance Portability and Accountability Act, Public Law Number 15.9 104-191, the provisions of sections 1604 and 1704(p)(1) and (2) 15.10 of the Small Business Job Protection Act, Public Law Number 15.11 104-188, and the provisions of sections 1011, 1211(b)(1), and 15.12 1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 15.13 105-34, shall become effective at the time they become effective 15.14 for federal purposes. 15.15 The Internal Revenue Code of 1986, as amended through 15.16 December 31, 1994, shall be in effect for taxable years 15.17 beginning after December 31, 1994. 15.18 The provisions of sections 1119(a), 1120, 1121, 1202(a), 15.19 1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 15.20 Business Job Protection Act, Public Law Number 104-188, the 15.21 provision of section 511 of the Health Insurance Portability and 15.22 Accountability Act, Public Law Number 104-191, and the 15.23 provisions of sections 1174 and 1601(i)(2) of the Taxpayer 15.24 Relief Act of 1997, Public Law Number 105-34, shall become 15.25 effective at the time they become effective for federal purposes. 15.26 The Internal Revenue Code of 1986, as amended through March 15.27 22, 1996, is in effect for taxable years beginning after 15.28 December 31, 1995. 15.29 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 15.30 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 15.31 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 15.32 Protection Act, Public Law Number 104-188, the provisions of 15.33 Public Law Number 104-117,andthe provisions of sections 313(a) 15.34 and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 15.35 1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 15.36 1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 16.1 1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 16.2 1997, Public Law Number 105-34, the provisions of section 6010 16.3 of the Internal Revenue Service Restructuring and Reform Act of 16.4 1998, Public Law Number 105-206, and the provisions of section 16.5 4003 of the Omnibus Consolidated and Emergency Supplemental 16.6 Appropriations Act, 1999, Public Law Number 105-277, shall 16.7 become effective at the time they become effective for federal 16.8 purposes. 16.9 The Internal Revenue Code of 1986, as amended through 16.10 December 31, 1996, shall be in effect for taxable years 16.11 beginning after December 31, 1996. 16.12 The provisions of sections 202(a) and (b), 221(a), 225, 16.13 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 16.14 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 16.15 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 16.16 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 16.17 of the Taxpayer Relief Act of 1997, Public Law Number 16.18 105-34, the provisions of sections 6004, 6005, 6012, 6013, 6015, 16.19 6016, 7002, and 7003 of the Internal Revenue Service 16.20 Restructuring and Reform Act of 1998, Public Law Number 105-206, 16.21 and the provisions of section 3001 of the Omnibus Consolidated 16.22 and Emergency Supplemental Appropriations Act, 1999, Public Law 16.23 Number 105-277, shall become effective at the time they become 16.24 effective for federal purposes. 16.25 The Internal Revenue Code of 1986, as amended through 16.26 December 31, 1997, shall be in effect for taxable years 16.27 beginning after December 31, 1997. 16.28 The provisions of sections 5002, 6009, 6011, and 7001 of 16.29 the Internal Revenue Service Restructuring and Reform Act of 16.30 1998, Public Law Number 105-206, the provisions of section 9010 16.31 of the Transportation Equity Act for the 21st Century, Public 16.32 Law Number 105-178, the provisions of sections 1004, 4002, and 16.33 5301 of the Omnibus Consolidation and Emergency Supplemental 16.34 Appropriations Act, 1999, Public Law Number 105-277, and the 16.35 provisions of section 303 of the Ricky Ray Hemophilia Relief 16.36 Fund Act of 1998, Public Law Number 105-369, shall become 17.1 effective at the time they become effective for federal purposes. 17.2 The Internal Revenue Code of 1986, as amended through 17.3 December 31, 1998, shall be in effect for taxable years 17.4 beginning after December 31, 1998. 17.5 Except as otherwise provided, references to the Internal 17.6 Revenue Code in subdivisions 19a to 19g mean the code in effect 17.7 for purposes of determining net income for the applicable year. 17.8 Sec. 4. Minnesota Statutes 1998, section 290.01, 17.9 subdivision 19a, is amended to read: 17.10 Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 17.11 individuals, estates, and trusts, there shall be added to 17.12 federal taxable income: 17.13 (1)(i) interest income on obligations of any state other 17.14 than Minnesota or a political or governmental subdivision, 17.15 municipality, or governmental agency or instrumentality of any 17.16 state other than Minnesota exempt from federal income taxes 17.17 under the Internal Revenue Code or any other federal statute, 17.18 and 17.19 (ii) exempt-interest dividends as defined in section 17.20 852(b)(5) of the Internal Revenue Code, except the portion of 17.21 the exempt-interest dividends derived from interest income on 17.22 obligations of the state of Minnesota or its political or 17.23 governmental subdivisions, municipalities, governmental agencies 17.24 or instrumentalities, but only if the portion of the 17.25 exempt-interest dividends from such Minnesota sources paid to 17.26 all shareholders represents 95 percent or more of the 17.27 exempt-interest dividends that are paid by the regulated 17.28 investment company as defined in section 851(a) of the Internal 17.29 Revenue Code, or the fund of the regulated investment company as 17.30 defined in section 851(g) of the Internal Revenue Code, making 17.31 the payment; and 17.32 (iii) for the purposes of items (i) and (ii), interest on 17.33 obligations of an Indian tribal government described in section 17.34 7871(c) of the Internal Revenue Code shall be treated as 17.35 interest income on obligations of the state in which the tribe 17.36 is located; 18.1 (2) the amount of income taxes paid or accrued within the 18.2 taxable year under this chapter and income taxes paid to any 18.3 other state or to any province or territory of Canada, to the 18.4 extent allowed as a deduction under section 63(d) of the 18.5 Internal Revenue Code, but the addition may not be more than the 18.6 amount by which the itemized deductions as allowed under section 18.7 63(d) of the Internal Revenue Code exceeds the amount of the 18.8 standard deduction as defined in section 63(c) of the Internal 18.9 Revenue Code. For the purpose of this paragraph, the 18.10 disallowance of itemized deductions under section 68 of the 18.11 Internal Revenue Code of 1986, income tax is the last itemized 18.12 deduction disallowed; 18.13 (3) the capital gain amount of a lump sum distribution to 18.14 which the special tax under section 1122(h)(3)(B)(ii) of the Tax 18.15 Reform Act of 1986, Public Law Number 99-514, applies; 18.16 (4) the amount of income taxes paid or accrued within the 18.17 taxable year under this chapter and income taxes paid to any 18.18 other state or any province or territory of Canada, to the 18.19 extent allowed as a deduction in determining federal adjusted 18.20 gross income. For the purpose of this paragraph, income taxes 18.21 do not include the taxes imposed by sections 290.0922, 18.22 subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 18.23(5) the amount of loss or expense included in federal18.24taxable income under section 1366 of the Internal Revenue Code18.25flowing from a corporation that has a valid election in effect18.26for the taxable year under section 1362 of the Internal Revenue18.27Code, but which is not allowed to be an "S" corporation under18.28section 290.9725;18.29(6) the amount of any distributions in cash or property18.30made to a shareholder during the taxable year by a corporation18.31that has a valid election in effect for the taxable year under18.32section 1362 of the Internal Revenue Code, but which is not18.33allowed to be an "S" corporation under section 290.9725 to the18.34extent not already included in federal taxable income under18.35section 1368 of the Internal Revenue Code;18.36(7) in the year stock of a corporation that had made a19.1valid election under section 1362 of the Internal Revenue Code19.2but was not an "S" corporation under section 290.9725 is sold or19.3disposed of in a transaction taxable under the Internal Revenue19.4Code, the amount of difference between the Minnesota basis of19.5the stock under subdivision 19f, paragraph (m), and the federal19.6basis if the Minnesota basis is lower than the shareholder's19.7federal basis;19.8(8)(5) the amount of expense, interest, or taxes 19.9 disallowed pursuant to section 290.10; and 19.10(9)(6) the amount of a partner's pro rata share of net 19.11 income which does not flow through to the partner because the 19.12 partnership elected to pay the tax on the income under section 19.13 6242(a)(2) of the Internal Revenue Code. 19.14 Sec. 5. Minnesota Statutes 1998, section 290.01, 19.15 subdivision 19b, is amended to read: 19.16 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 19.17 individuals, estates, and trusts, there shall be subtracted from 19.18 federal taxable income: 19.19 (1) interest income on obligations of any authority, 19.20 commission, or instrumentality of the United States to the 19.21 extent includable in taxable income for federal income tax 19.22 purposes but exempt from state income tax under the laws of the 19.23 United States; 19.24 (2) if included in federal taxable income, the amount of 19.25 any overpayment of income tax to Minnesota or to any other 19.26 state, for any previous taxable year, whether the amount is 19.27 received as a refund or as a credit to another taxable year's 19.28 income tax liability; 19.29 (3) the amount paid to others, less the credit allowed 19.30 under section 290.0674, not to exceed $1,625 for eachdependent19.31 qualifying child in grades kindergarten to 6 and $2,500 for each 19.32dependentqualifying child in grades 7 to 12, for tuition, 19.33 textbooks, and transportation of eachdependentqualifying child 19.34 in attending an elementary or secondary school situated in 19.35 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 19.36 wherein a resident of this state may legally fulfill the state's 20.1 compulsory attendance laws, which is not operated for profit, 20.2 and which adheres to the provisions of the Civil Rights Act of 20.3 1964 and chapter 363. For the purposes of this clause, 20.4 "tuition" includes fees or tuition as defined in section 20.5 290.0674, subdivision 1, clause (1). As used in this clause, 20.6 "textbooks" includes books and other instructional materials and 20.7 equipment used in elementary and secondary schools in teaching 20.8 only those subjects legally and commonly taught in public 20.9 elementary and secondary schools in this state. Equipment 20.10 expenses qualifying for deduction includes expenses as defined 20.11 and limited in section 290.0674, subdivision 1, clause (3). 20.12 "Textbooks" does not include instructional books and materials 20.13 used in the teaching of religious tenets, doctrines, or worship, 20.14 the purpose of which is to instill such tenets, doctrines, or 20.15 worship, nor does it include books or materials for, or 20.16 transportation to, extracurricular activities including sporting 20.17 events, musical or dramatic events, speech activities, driver's 20.18 education, or similar programs. For purposes of the subtraction 20.19 provided by this clause, "qualifying child" has the meaning 20.20 given in section 32(c)(3) of the Internal Revenue Code; 20.21 (4) to the extent included in federal taxable income, 20.22 distributions from a qualified governmental pension plan, an 20.23 individual retirement account, simplified employee pension, or 20.24 qualified plan covering a self-employed person that represent a 20.25 return of contributions that were included in Minnesota gross 20.26 income in the taxable year for which the contributions were made 20.27 but were deducted or were not included in the computation of 20.28 federal adjusted gross income. The distribution shall be 20.29 allocated first to return of contributions until the 20.30 contributions included in Minnesota gross income have been 20.31 exhausted. This subtraction applies only to contributions made 20.32 in a taxable year prior to 1985; 20.33 (5) income as provided under section 290.0802; 20.34 (6) the amount of unrecovered accelerated cost recovery 20.35 system deductions allowed under subdivision 19g; 20.36 (7) to the extent included in federal adjusted gross 21.1 income, income realized on disposition of property exempt from 21.2 tax under section 290.491; 21.3 (8) to the extent not deducted in determining federal 21.4 taxable income, the amount paid for health insurance of 21.5 self-employed individuals as determined under section 162(l) of 21.6 the Internal Revenue Code, except that the25percent limit does 21.7 not apply. If the taxpayer deducted insurance payments under 21.8 section 213 of the Internal Revenue Code of 1986, the 21.9 subtraction under this clause must be reduced by the lesser of: 21.10 (i) the total itemized deductions allowed under section 21.11 63(d) of the Internal Revenue Code, less state, local, and 21.12 foreign income taxes deductible under section 164 of the 21.13 Internal Revenue Code and the standard deduction under section 21.14 63(c) of the Internal Revenue Code; or 21.15 (ii) the lesser of (A) the amount of insurance qualifying 21.16 as "medical care" under section 213(d) of the Internal Revenue 21.17 Code to the extent not deducted under section 162(1) of the 21.18 Internal Revenue Code or excluded from income or (B) the total 21.19 amount deductible for medical care under section 213(a); 21.20 (9) the exemption amount allowed under Laws 1995, chapter 21.21 255, article 3, section 2, subdivision 3; 21.22 (10) to the extent included in federal taxable income, 21.23 postservice benefits for youth community service under section 21.24 124D.42 for volunteer service under United States Code, title 21.25 42, section 5011(d), as amended; 21.26(11) to the extent not subtracted under clause (1), the21.27amount of income or gain included in federal taxable income21.28under section 1366 of the Internal Revenue Code flowing from a21.29corporation that has a valid election in effect for the taxable21.30year under section 1362 of the Internal Revenue Code which is21.31not allowed to be an "S" corporation under section 290.9725;21.32(12) in the year stock of a corporation that had made a21.33valid election under section 1362 of the Internal Revenue Code21.34but was not an "S" corporation under section 290.9725 is sold or21.35disposed of in a transaction taxable under the Internal Revenue21.36Code, the amount of difference between the Minnesota basis of22.1the stock under subdivision 19f, paragraph (m), and the federal22.2basis if the Minnesota basis is higher than the shareholder's22.3federal basis; and22.4(13) an amount equal to an individual's, trust's, or22.5estate's net federal income tax liability for the tax year that22.6is attributable to items of income, expense, gain, loss, or22.7credits federally flowing to the taxpayer in the tax year from a22.8corporation, having a valid election in effect for federal tax22.9purposes under section 1362 of the Internal Revenue Code but not22.10treated as an "S" corporation for state tax purposes under22.11section 290.9725.22.12 (11) to the extent not deducted in determining federal 22.13 taxable income by an individual who does not itemize deductions 22.14 for federal income tax purposes for the taxable year, an amount 22.15 equal to 50 percent of the excess of charitable contributions 22.16 allowable as a deduction for the taxable year under section 22.17 170(a) of the Internal Revenue Code over $500; and 22.18 (12) to the extent included in federal taxable income, 22.19 holocaust victims' settlement payments for any injury incurred 22.20 as a result of the holocaust, if received by an individual who 22.21 was persecuted for racial or religious reasons by Nazi Germany 22.22 or any other Axis regime or an heir of such a person. 22.23 Sec. 6. Minnesota Statutes 1998, section 290.01, 22.24 subdivision 19f, is amended to read: 22.25 Subd. 19f. [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 22.26 DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 22.27 trusts, the basis of property is its adjusted basis for federal 22.28 income tax purposes except as set forth in paragraphs (f), (g), 22.29 and (m). For corporations, the basis of property is its 22.30 adjusted basis for federal income tax purposes, without regard 22.31 to the time when the property became subject to tax under this 22.32 chapter or to whether out-of-state losses or items of tax 22.33 preference with respect to the property were not deductible 22.34 under this chapter, except that the modifications to the basis 22.35 for federal income tax purposes set forth in paragraphs (b) to 22.36 (j) are allowed to corporations, and the resulting modifications 23.1 to federal taxable income must be made in the year in which gain 23.2 or loss on the sale or other disposition of property is 23.3 recognized. 23.4 (b) The basis of property shall not be reduced to reflect 23.5 federal investment tax credit. 23.6 (c) The basis of property subject to the accelerated cost 23.7 recovery system under section 168 of the Internal Revenue Code 23.8 shall be modified to reflect the modifications in depreciation 23.9 with respect to the property provided for in subdivision 19e. 23.10 For certified pollution control facilities for which 23.11 amortization deductions were elected under section 169 of the 23.12 Internal Revenue Code of 1954, the basis of the property must be 23.13 increased by the amount of the amortization deduction not 23.14 previously allowed under this chapter. 23.15 (d) For property acquired before January 1, 1933, the basis 23.16 for computing a gain is the fair market value of the property as 23.17 of that date. The basis for determining a loss is the cost of 23.18 the property to the taxpayer less any depreciation, 23.19 amortization, or depletion, actually sustained before that 23.20 date. If the adjusted cost exceeds the fair market value of the 23.21 property, then the basis is the adjusted cost regardless of 23.22 whether there is a gain or loss. 23.23 (e) The basis is reduced by the allowance for amortization 23.24 of bond premium if an election to amortize was made pursuant to 23.25 Minnesota Statutes 1986, section 290.09, subdivision 13, and the 23.26 allowance could have been deducted by the taxpayer under this 23.27 chapter during the period of the taxpayer's ownership of the 23.28 property. 23.29 (f) For assets placed in service before January 1, 1987, 23.30 corporations, partnerships, or individuals engaged in the 23.31 business of mining ores other than iron ore or taconite 23.32 concentrates subject to the occupation tax under chapter 298 23.33 must use the occupation tax basis of property used in that 23.34 business. 23.35 (g) For assets placed in service before January 1, 1990, 23.36 corporations, partnerships, or individuals engaged in the 24.1 business of mining iron ore or taconite concentrates subject to 24.2 the occupation tax under chapter 298 must use the occupation tax 24.3 basis of property used in that business. 24.4 (h) In applying the provisions of sections 301(c)(3)(B), 24.5 312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 24.6 dates December 31, 1932, and January 1, 1933, shall be 24.7 substituted for February 28, 1913, and March 1, 1913, 24.8 respectively. 24.9 (i) In applying the provisions of section 362(a) and (c) of 24.10 the Internal Revenue Code, the date December 31, 1956, shall be 24.11 substituted for June 22, 1954. 24.12 (j) The basis of property shall be increased by the amount 24.13 of intangible drilling costs not previously allowed due to 24.14 differences between this chapter and the Internal Revenue Code. 24.15 (k) The adjusted basis of any corporate partner's interest 24.16 in a partnership is the same as the adjusted basis for federal 24.17 income tax purposes modified as required to reflect the basis 24.18 modifications set forth in paragraphs (b) to (j). The adjusted 24.19 basis of a partnership in which the partner is an individual, 24.20 estate, or trust is the same as the adjusted basis for federal 24.21 income tax purposes modified as required to reflect the basis 24.22 modifications set forth in paragraphs (f) and (g). 24.23 (l) The modifications contained in paragraphs (b) to (j) 24.24 also apply to the basis of property that is determined by 24.25 reference to the basis of the same property in the hands of a 24.26 different taxpayer or by reference to the basis of different 24.27 property. 24.28(m) If a corporation has a valid election in effect for the24.29taxable year under section 1362 of the Internal Revenue Code,24.30but is not allowed to be an "S" corporation under section24.31290.9725, and the corporation is liquidated or the individual24.32shareholder disposes of the stock, the Minnesota basis in the24.33shareholder's stock in the corporation shall be computed as if24.34the corporation were not an "S" corporation for federal tax24.35purposes.24.36 Sec. 7. Minnesota Statutes 1998, section 290.01, 25.1 subdivision 31, is amended to read: 25.2 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 25.3 defined otherwise, "Internal Revenue Code" means the Internal 25.4 Revenue Code of 1986, as amended through December 31,19971998. 25.5 Sec. 8. Minnesota Statutes 1998, section 290.01, is 25.6 amended by adding a subdivision to read: 25.7 Subd. 32. [HOLOCAUST SETTLEMENT PAYMENTS.] "Holocaust 25.8 victims' settlement payments" means: 25.9 (1) a payment received as a result of settlement of the 25.10 action entitled In re Holocaust Victims' Asset Litigation, in 25.11 United States district court for the eastern district of New 25.12 York, C.A. No. 96-4849; 25.13 (2) any amount received under the German Act Regulating 25.14 Unresolved Property Claims or any other foreign law providing 25.15 for payments for holocaust claims; and 25.16 (3) a payment received as a result of the settlement of a 25.17 holocaust claim not described in clause (1) or (2), including an 25.18 insurance claim, a claim relating to looted art or financial 25.19 assets, and a claim relating to slave labor wages. 25.20 Sec. 9. Minnesota Statutes 1998, section 290.06, 25.21 subdivision 2c, is amended to read: 25.22 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 25.23 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 25.24 married individuals filing joint returns and surviving spouses 25.25 as defined in section 2(a) of the Internal Revenue Code must be 25.26 computed by applying to their taxable net income the following 25.27 schedule of rates: 25.28 (1) On the first$19,910$34,500,65.5 percent; 25.29 (2) On all over$19,910$34,500, but not 25.30 over$79,120$113,360,87 percent; 25.31 (3) On all over$79,120$113,360,8.58 percent. 25.32 Married individuals filing separate returns, estates, and 25.33 trusts must compute their income tax by applying the above rates 25.34 to their taxable income, except that the income brackets will be 25.35 one-half of the above amounts. 25.36 (b) The income taxes imposed by this chapter upon unmarried 26.1 individuals must be computed by applying to taxable net income 26.2 the following schedule of rates: 26.3 (1) On the first$13,620$17,250,65.5 percent; 26.4 (2) On all over$13,620$17,250, but not 26.5 over$44,750$56,680,87 percent; 26.6 (3) On all over$44,750$56,680,8.58 percent. 26.7 (c) The income taxes imposed by this chapter upon unmarried 26.8 individuals qualifying as a head of household as defined in 26.9 section 2(b) of the Internal Revenue Code must be computed by 26.10 applying to taxable net income the following schedule of rates: 26.11 (1) On the first$16,770$25,870,65.5 percent; 26.12 (2) On all over$16,770$25,870, but not 26.13 over$67,390$85,020,87 percent; 26.14 (3) On all over$67,390$85,020,8.58 percent. 26.15 (d) In lieu of a tax computed according to the rates set 26.16 forth in this subdivision, the tax of any individual taxpayer 26.17 whose taxable net income for the taxable year is less than an 26.18 amount determined by the commissioner must be computed in 26.19 accordance with tables prepared and issued by the commissioner 26.20 of revenue based on income brackets of not more than $100. The 26.21 amount of tax for each bracket shall be computed at the rates 26.22 set forth in this subdivision, provided that the commissioner 26.23 may disregard a fractional part of a dollar unless it amounts to 26.24 50 cents or more, in which case it may be increased to $1. 26.25 (e) An individual who is not a Minnesota resident for the 26.26 entire year must compute the individual's Minnesota income tax 26.27 as provided in this subdivision. After the application of the 26.28 nonrefundable credits provided in this chapter, the tax 26.29 liability must then be multiplied by a fraction in which: 26.30 (1) the numerator is the individual's Minnesota source 26.31 federal adjusted gross income as defined in section 62 of the 26.32 Internal Revenue Codedisregarding income or loss flowing from a26.33corporation having a valid election for the taxable year under26.34section 1362 of the Internal Revenue Code but which is not an26.35"S" corporation under section 290.9725and increased by the 26.36 additions required under section 290.01, subdivision 19a, 27.1 clauses (1) and(9)(6), after applying the allocation and 27.2 assignability provisions of section 290.081, clause (a), or 27.3 290.17; and 27.4 (2) the denominator is the individual's federal adjusted 27.5 gross income as defined in section 62 of the Internal Revenue 27.6 Code of 1986, increased by the amounts specified in section 27.7 290.01, subdivision 19a, clauses (1), (5), (6), (7),and 27.8(9)(6), and reduced by the amounts specified in section 290.01, 27.9 subdivision 19b,clausesclause (1), (11), and (12). 27.10 Sec. 10. Minnesota Statutes 1998, section 290.06, 27.11 subdivision 2d, is amended to read: 27.12 Subd. 2d. [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 27.13 taxable years beginning after December 31,19911999, the 27.14 minimum and maximum dollar amounts for each rate bracket for 27.15 which a tax is imposed in subdivision 2c shall be adjusted for 27.16 inflation by the percentage determined under paragraph (b). For 27.17 the purpose of making the adjustment as provided in this 27.18 subdivision all of the rate brackets provided in subdivision 2c 27.19 shall be the rate brackets as they existed for taxable years 27.20 beginning after December 31,19901998, and before January 27.21 1,19922000. The rate applicable to any rate bracket must not 27.22 be changed. The dollar amounts setting forth the tax shall be 27.23 adjusted to reflect the changes in the rate brackets. The rate 27.24 brackets as adjusted must be rounded to the nearest $10 amount. 27.25 If the rate bracket ends in $5, it must be rounded up to the 27.26 nearest $10 amount. 27.27 (b) The commissioner shall adjust the rate brackets and by 27.28 the percentage determined pursuant to the provisions of section 27.29 1(f) of the Internal Revenue Code, except that in section 27.30 1(f)(3)(B) the word "19901998" shall be substituted for the 27.31 word "19871992." For19912000, the commissioner shall then 27.32 determine the percent change from the 12 months ending on August 27.33 31,19901998, to the 12 months ending on August 31,19911999, 27.34 and in each subsequent year, from the 12 months ending on August 27.35 31,19901998, to the 12 months ending on August 31 of the year 27.36 preceding the taxable year. The determination of the 28.1 commissioner pursuant to this subdivision shall not be 28.2 considered a "rule" and shall not be subject to the 28.3 Administrative Procedure Act contained in chapter 14. 28.4 No later than December 15 of each year, the commissioner 28.5 shall announce the specific percentage that will be used to 28.6 adjust the tax rate brackets. 28.7 Sec. 11. Minnesota Statutes 1998, section 290.06, is 28.8 amended by adding a subdivision to read: 28.9 Subd. 26. [BANK S CORPORATIONS.] A shareholder of an S 28.10 corporation subject to tax under section 290.9725, clause (2), 28.11 is allowed a credit against the tax imposed under this chapter. 28.12 The credit equals 85 percent of the tax apportioned to the 28.13 shareholder under section 290.9726, subdivision 7, for the 28.14 taxable year. 28.15 Sec. 12. Minnesota Statutes 1998, section 290.06, is 28.16 amended by adding a subdivision to read: 28.17 Subd. 27. [TAX PAID TO ANOTHER STATE; CORPORATIONS.] (a) A 28.18 credit is allowed against the tax imposed under subdivision 1 28.19 for tax paid to another state based on net income. The credit 28.20 must be claimed in a manner prescribed by the commissioner. 28.21 (b) The amount of the credit equals the amount of 28.22 qualifying tax paid to the other state for the taxable year, 28.23 multiplied by the taxpayer's apportionment percentage under 28.24 section 290.191. If the item of income or gain is assigned to 28.25 Minnesota as nonbusiness income, the entire amount of the 28.26 qualifying tax is allowed as a credit. The maximum amount of 28.27 the credit is limited to the tax liability under subdivision 1 28.28 for the taxable year and, in no case, may the credit exceed the 28.29 reduction in the amount of tax under subdivision 1 if the item 28.30 of income or gain were excluded from net income. 28.31 (c) For purposes of this subdivision, "qualifying tax" 28.32 means the amount of tax paid to another state on an item of 28.33 income or gain for the taxable year, if: 28.34 (1) the law of another state requires and the taxpayer 28.35 assigns the entire amount of the income or gain to one other 28.36 state; and 29.1 (2) the income or gain is included in the measure of the 29.2 exercise of the corporate franchise that is taxable under 29.3 subdivision 1. 29.4 (d) The amount of tax paid to another state on an item of 29.5 income or gain is the difference between the tax paid to the 29.6 state and the amount of tax that would have been paid to the 29.7 state if the item of income or gain had not been included in the 29.8 net income of that state. 29.9 (e) The taxpayer must report to the commissioner of revenue 29.10 any change in tax in the other state, the change in qualifying 29.11 tax, and a copy of the final determination of the tax by the 29.12 taxing authority of the other state. A taxpayer who claims the 29.13 credit consents to extend the period of limitation for the 29.14 commissioner to recompute the credit and reassess the tax due, 29.15 including a refund, for a period of one year following a report 29.16 by the taxpayer of a final determination of tax by the state in 29.17 which the entire amount of income or gain is reported, 29.18 notwithstanding any period of limitations to the contrary, or 29.19 within any applicable period of limitations, whichever is 29.20 longer. If a taxpayer fails to report as required by this 29.21 paragraph, the commissioner may recompute the tax, including a 29.22 refund, based on the information available to the commissioner. 29.23 The tax may be recomputed within six years after the report 29.24 should have been filed, notwithstanding any period of 29.25 limitations to the contrary. 29.26 Sec. 13. Minnesota Statutes 1998, section 290.0671, 29.27 subdivision 1, is amended to read: 29.28 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 29.29 allowed a credit against the tax imposed by this chapter equal 29.30 to a percentage of earned income. To receive a credit, a 29.31 taxpayer must be eligible for a credit under section 32 of the 29.32 Internal Revenue Code. 29.33 (b) For individuals with no qualifying children, the credit 29.34 equals 1.1475 percent of the first $4,460 of earned income. The 29.35 credit is reduced by 1.1475 percent of earned income or modified 29.36 adjusted gross income, whichever is greater, in excess of 30.1 $5,570, but in no case is the credit less than zero. 30.2 (c) For individuals with one qualifying child, the credit 30.3 equals 6.8 percent of the first $6,680 of earned income and 8.5 30.4 percent of earned income over $11,650 but less than $12,990. 30.5 The credit is reduced by 4.77 percent of earned income or 30.6 modified adjusted gross income, whichever is greater, in excess 30.7 of $14,560, but in no case is the credit less than zero. 30.8 (d) For individuals with two or more qualifying children, 30.9 the credit equals eight percent of the first $9,390 of earned 30.10 income and 20 percent of earned income over $14,350 but less 30.11 than $16,230. The credit is reduced by 8.8 percent of earned 30.12 income or modified adjusted gross income, whichever is greater, 30.13 in excess of $17,280, but in no case is the credit less than 30.14 zero. 30.15 (e) For a nonresident or part-year resident, the credit 30.16 must be allocated based on the percentage calculated under 30.17 section 290.06, subdivision 2c, paragraph (e). 30.18 (f) For a person who was a resident for the entire tax year 30.19 and has earned income not subject to tax under this chapter, the 30.20 credit must be allocated based on the ratio of federal adjusted 30.21 gross income reduced by the earned income not subject to tax 30.22 under this chapter over federal adjusted gross income. 30.23 (g) The commissioner shall construct tables showing the 30.24 amount of the credit at various income levels and make them 30.25 available to taxpayers. The tables shall follow the schedule 30.26 contained in this subdivision, except that the commissioner may 30.27 graduate the transition between income brackets. 30.28 Sec. 14. Minnesota Statutes 1998, section 290.0672, 30.29 subdivision 1, is amended to read: 30.30 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 30.31 section, the following terms have the meanings given. 30.32 (b) "Long-term care insurance" means a policy that: 30.33 (1) qualifies for a deduction under section 213 of the 30.34 Internal Revenue Code, disregarding the 7.5 percent income test; 30.35 or meets the requirements given in section 62A.46; or provides 30.36 similar coverage issued under the laws of another jurisdiction; 31.1 and 31.2 (2) does not have a lifetime long-term care benefit limit 31.3 of less than $100,000; and 31.4 (3)includes inflation protection that meets or exceedshas 31.5 been offered in compliance with the inflation protection 31.6 requirements ofthe long-term care insurance model regulation31.7cited undersection7702B(g)(2)(A)(i)(x) of the Internal Revenue31.8Code62S.23. 31.9 (c) "Qualified beneficiary" means the taxpayer or the 31.10 taxpayer's spouse. 31.11 (d) "Premiums deducted in determining federal taxable 31.12 income" means the lesser of (1) long-term care insurance 31.13 premiums that qualify as deductions under section 213 of the 31.14 Internal Revenue Code; and (2) the total amount deductible for 31.15 medical care under section 213 of the Internal Revenue Code. 31.16 Sec. 15. Minnesota Statutes 1998, section 290.0674, 31.17 subdivision 1, is amended to read: 31.18 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 31.19 a credit against the tax imposed by this chapter in an amount 31.20 equal to the amount paid for education-related expenses for 31.21 adependentqualifying child in kindergarten through grade 12. 31.22 For purposes of this section, "education-related expenses" means: 31.23 (1) fees or tuition for instruction by an instructor under 31.24 section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 31.25 (5), for instruction outside the regular school day or school 31.26 year, including tutoring, driver's education offered as part of 31.27 school curriculum, regardless of whether it is taken from a 31.28 public or private entity or summer camps, in grade or age 31.29 appropriate curricula that supplement curricula and instruction 31.30 available during the regular school year, that assists a 31.31 dependent to improve knowledge of core curriculum areas or to 31.32 expand knowledge and skills under the graduation rule under 31.33 section 120B.02 and that do not include the teaching of 31.34 religious tenets, doctrines, or worship, the purpose of which is 31.35 to instill such tenets, doctrines, or worship; 31.36 (2) expenses for textbooks, including books and other 32.1 instructional materials and equipment used in elementary and 32.2 secondary schools in teaching only those subjects legally and 32.3 commonly taught in public elementary and secondary schools in 32.4 this state. "Textbooks" does not include instructional books 32.5 and materials used in the teaching of religious tenets, 32.6 doctrines, or worship, the purpose of which is to instill such 32.7 tenets, doctrines, or worship, nor does it include books or 32.8 materials for extracurricular activities including sporting 32.9 events, musical or dramatic events, speech activities, driver's 32.10 education, or similar programs; 32.11 (3) a maximum expense of $200 per family for personal 32.12 computer hardware, excluding single purpose processors, and 32.13 educational software that assists a dependent to improve 32.14 knowledge of core curriculum areas or to expand knowledge and 32.15 skills under the graduation rule under section 120B.02 purchased 32.16 for use in the taxpayer's home and not used in a trade or 32.17 business regardless of whether the computer is required by the 32.18 dependent's school; and 32.19 (4) the amount paid to others for transportation of a 32.20dependentqualifying child attending an elementary or secondary 32.21 school situated in Minnesota, North Dakota, South Dakota, Iowa, 32.22 or Wisconsin, wherein a resident of this state may legally 32.23 fulfill the state's compulsory attendance laws, which is not 32.24 operated for profit, and which adheres to the provisions of the 32.25 Civil Rights Act of 1964 and chapter 363. 32.26 For purposes of this section, "qualifying child" has the 32.27 meaning given in section 32(c)(3) of the Internal Revenue Code. 32.28 Sec. 16. Minnesota Statutes 1998, section 290.0674, 32.29 subdivision 2, is amended to read: 32.30 Subd. 2. [LIMITATIONS.] (a) For claimants with income not 32.31 greater than $33,500, the maximum credit allowed is $1,000 per 32.32 qualifying child and $2,000 per family. No credit is allowed 32.33 for education-related expenses for claimants with income greater 32.34 than$33,500$37,500. The maximum credit per child is reduced 32.35 by $1 for each $4 of household income over $33,500, and the 32.36 maximum credit per family is reduced by $2 for each $4 of 33.1 household income over $33,500, but in no case is the credit less 33.2 than zero. 33.3 For purposes of this section "income" has the meaning given 33.4 in section 290.067, subdivision 2a. In the case of a married 33.5 claimant, a credit is not allowed unless a joint income tax 33.6 return is filed. 33.7 (b) For a nonresident or part-year resident, the credit 33.8 determined under subdivision 1 and the maximum credit amount in 33.9 paragraph (a) must be allocated using the percentage calculated 33.10 in section 290.06, subdivision 2c, paragraph (e). 33.11 Sec. 17. Minnesota Statutes 1998, section 290.091, 33.12 subdivision 1, is amended to read: 33.13 Subdivision 1. [IMPOSITION OF TAX.] In addition to all 33.14 other taxes imposed by this chapter a tax is imposed on 33.15 individuals, estates, and trusts equal to the excess (if any) of 33.16 (a) an amount equal toseven6.5 percent of alternative 33.17 minimum taxable income after subtracting the exemption amount, 33.18 over 33.19 (b) the regular tax for the taxable year. 33.20 Sec. 18. Minnesota Statutes 1998, section 290.091, 33.21 subdivision 2, is amended to read: 33.22 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 33.23 this section, the following terms have the meanings given: 33.24 (a) "Alternative minimum taxable income" means the sum of 33.25 the following for the taxable year: 33.26 (1) the taxpayer's federal alternative minimum taxable 33.27 income as defined in section 55(b)(2) of the Internal Revenue 33.28 Code; 33.29 (2) the taxpayer's itemized deductions allowed in computing 33.30 federal alternative minimum taxable income, but excluding: 33.31 (i) the Minnesota charitable contribution deduction; 33.32 (ii) the medical expense deduction; 33.33 (iii) the casualty, theft, and disaster loss deduction;and33.34 (iv) the impairment-related work expenses of a disabled 33.35 person; and 33.36 (v) holocaust victims' settlement payments to the extent 34.1 allowed under section 290.01, subdivision 19b; and 34.2 (3) for depletion allowances computed under section 613A(c) 34.3 of the Internal Revenue Code, with respect to each property (as 34.4 defined in section 614 of the Internal Revenue Code), to the 34.5 extent not included in federal alternative minimum taxable 34.6 income, the excess of the deduction for depletion allowable 34.7 under section 611 of the Internal Revenue Code for the taxable 34.8 year over the adjusted basis of the property at the end of the 34.9 taxable year (determined without regard to the depletion 34.10 deduction for the taxable year); 34.11 (4) to the extent not included in federal alternative 34.12 minimum taxable income, the amount of the tax preference for 34.13 intangible drilling cost under section 57(a)(2) of the Internal 34.14 Revenue Code determined without regard to subparagraph (E); 34.15 (5) to the extent not included in federal alternative 34.16 minimum taxable income, the amount of interest income as 34.17 provided by section 290.01, subdivision 19a, clause (1); 34.18(6) amounts added to federal taxable income as provided by34.19section 290.01, subdivision 19a, clauses (5), (6), and (7);34.20 less the sum of the amounts determined under the following 34.21 clauses (1) to(4)(3): 34.22 (1) interest income as defined in section 290.01, 34.23 subdivision 19b, clause (1); 34.24 (2) an overpayment of state income tax as provided by 34.25 section 290.01, subdivision 19b, clause (2), to the extent 34.26 included in federal alternative minimum taxable income; and 34.27 (3) the amount of investment interest paid or accrued 34.28 within the taxable year on indebtedness to the extent that the 34.29 amount does not exceed net investment income, as defined in 34.30 section 163(d)(4) of the Internal Revenue Code. Interest does 34.31 not include amounts deducted in computing federal adjusted gross 34.32 income; and. 34.33(4) amounts subtracted from federal taxable income as34.34provided by section 290.01, subdivision 19b, clauses (11) and34.35(12).34.36 In the case of an estate or trust, alternative minimum 35.1 taxable income must be computed as provided in section 59(c) of 35.2 the Internal Revenue Code. 35.3 (b) "Investment interest" means investment interest as 35.4 defined in section 163(d)(3) of the Internal Revenue Code. 35.5 (c) "Tentative minimum tax" equalsseven6.5 percent of 35.6 alternative minimum taxable income after subtracting the 35.7 exemption amount determined under subdivision 3. 35.8 (d) "Regular tax" means the tax that would be imposed under 35.9 this chapter (without regard to this section and section 35.10 290.032), reduced by the sum of the nonrefundable credits 35.11 allowed under this chapter. 35.12 (e) "Net minimum tax" means the minimum tax imposed by this 35.13 section. 35.14 (f) "Minnesota charitable contribution deduction" means a 35.15 charitable contribution deduction under section 170 of the 35.16 Internal Revenue Code to or for the use of an entity described 35.17 in section 290.21, subdivision 3, clauses (a) to (e). When the 35.18 federal deduction for charitable contributions is limited under 35.19 section 170(b) of the Internal Revenue Code, the allowable 35.20 contributions in the year of contribution are deemed to be first 35.21 contributions to entities described in section 290.21, 35.22 subdivision 3, clauses (a) to (e). 35.23 Sec. 19. Minnesota Statutes 1998, section 290.091, 35.24 subdivision 6, is amended to read: 35.25 Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 35.26 is allowed against the tax imposed by this chapter on 35.27 individuals, trusts, and estates equal to the minimum tax credit 35.28 for the taxable year. The minimum tax credit equals the 35.29 adjusted net minimum tax for taxable years beginning after 35.30 December 31, 1988, reduced by the minimum tax credits allowed in 35.31 a prior taxable year. The credit may not exceed the excess (if 35.32 any) for the taxable year of 35.33 (1) the regular tax, over 35.34 (2) the greater of (i) the tentative alternative minimum 35.35 tax, or (ii) zero. 35.36 (b) The adjusted net minimum tax for a taxable year equals 36.1 the lesser of the net minimum tax or the excess (if any) of 36.2 (1) the tentative minimum tax, over 36.3 (2)seven6.5 percent of the sum of 36.4 (i) adjusted gross income as defined in section 62 of the 36.5 Internal Revenue Code, 36.6 (ii) interest income as defined in section 290.01, 36.7 subdivision 19a, clause (1), 36.8 (iii)the amount added to federal taxable income as36.9provided by section 290.01, subdivision 19a, clauses (5), (6),36.10and (7),36.11(iv)interest on specified private activity bonds, as 36.12 defined in section 57(a)(5) of the Internal Revenue Code, to the 36.13 extent not included under clause (ii), 36.14(v)(iv) depletion as defined in section 57(a)(1), 36.15 determined without regard to the last sentence of paragraph (1), 36.16 of the Internal Revenue Code, less 36.17(vi)(v) the deductions allowed in computing alternative 36.18 minimum taxable income provided in subdivision 2, paragraph (a), 36.19 clause (2) of the first series of clauses and clauses (1), 36.20 (2), and (3), and (4)of the second series of clauses, and 36.21(vii)(vi) the exemption amount determined under 36.22 subdivision 3. 36.23 In the case of an individual who is not a Minnesota 36.24 resident for the entire year, adjusted net minimum tax must be 36.25 multiplied by the fraction defined in section 290.06, 36.26 subdivision 2c, paragraph (e). In the case of a trust or 36.27 estate, adjusted net minimum tax must be multiplied by the 36.28 fraction defined under subdivision 4, paragraph (b). 36.29 Sec. 20. Minnesota Statutes 1998, section 290.0921, 36.30 subdivision 5, is amended to read: 36.31 Subd. 5. [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 36.32 alternative minimum taxable net income is allowed equal to 36.33 the contributions subject to the deduction for charitable 36.34 contributions under section 290.21, subdivision 3, without 36.35 application of the limitation in section 290.21, subdivision 3. 36.36 The deduction allowable for capital gain property is limited to 37.1 the adjusted basis of the property as defined in section 290.01, 37.2 subdivision 19f. The term capital gain property has the meaning 37.3 given by section 170(b)(1)(C)(iv) of the Internal Revenue Code, 37.4 but does not include property to which an election under section 37.5 170(b)(1)(C)(iii) of the Internal Revenue Code applies. 37.6 (b) The amount of the deduction may not exceed 15 percent 37.7 of alternative minimum taxable net income less the deduction 37.8 allowed under subdivision 6. 37.9 Sec. 21. Minnesota Statutes 1998, section 290.095, 37.10 subdivision 3, is amended to read: 37.11 Subd. 3. [CARRYOVER.] (a) A net operating loss incurred in 37.12 a taxable year: (i) beginning after December 31, 1986, shall be 37.13 a net operating loss carryover to each of the 15 taxable years 37.14 following the taxable year of such loss; (ii) beginning before 37.15 January 1, 1987, shall be a net operating loss carryover to each 37.16 of the five taxable years following the taxable year of such 37.17 loss subject to the provisions of Minnesota Statutes 1986, 37.18 section 290.095; and (iii) beginning before January 1, 1987, 37.19 shall be a net operating loss carryback to each of the three 37.20 taxable years preceding the loss year subject to the provisions 37.21 of Minnesota Statutes 1986, section 290.095. 37.22 (b) The entire amount of the net operating loss for any 37.23 taxable year shall be carried to the earliest of the taxable 37.24 years to which such loss may be carried. The portion of such 37.25 loss which shall be carried to each of the other taxable years 37.26 shall be the excess, if any, of the amount of such loss over the 37.27 sum of the taxable net income, adjusted by the modifications 37.28 specified in subdivision 4, for each of the taxable years to 37.29 which such loss may be carried. 37.30 (c) Where a corporationdoes business both within and37.31without Minnesota, andapportions its income under the 37.32 provisions of section 290.191, the net operating loss deduction 37.33 incurred in any taxable year shall be allowed to the extent of 37.34 the apportionment ratio of the loss year. 37.35 (d) The provisions of sections 381, 382, and 384 of the 37.36 Internal Revenue Code apply to carryovers in certain corporate 38.1 acquisitions and special limitations on net operating loss 38.2 carryovers. The limitation amount determined under section 382 38.3 shall be applied to net income, before apportionment, in each 38.4 post change year to which a loss is carried. 38.5 Sec. 22. Minnesota Statutes 1998, section 290.17, 38.6 subdivision 3, is amended to read: 38.7 Subd. 3. [TRADE ORBUSINESS INCOME; GENERAL RULE.] All 38.8 income of a unitary business is subject to apportionment except 38.9 nonbusiness income. Income derived fromcarrying on a trade or38.10 a unitary business must be assigned to this state if thetrade38.11orunitary business is conducted wholly within this state, 38.12 assigned outside this state if conducted wholly without this 38.13 state and apportioned between this state and other states and 38.14 countries under this subdivision if conducted partly within and 38.15 partly without this state. For purposes of determining whether 38.16 atrade orunitary business is carried on exclusively within or 38.17 without this state: 38.18 (a) Atrade orunitary business physically located 38.19 exclusively within this state is nevertheless carried on partly 38.20 within and partly without this state if any of the principles 38.21 set forth in section 290.191 for the allocation of sales or 38.22 receipts within or without this state when applied to the 38.23 taxpayer's situation result in the allocation of any sales or 38.24 receipts without this state. 38.25 (b) Atrade orunitary business physically located 38.26 exclusively without this state is nevertheless carried on partly 38.27 within and partly without this state if any of the principles 38.28 set forth in section 290.191 for the allocation of sales or 38.29 receipts within or without this state when applied to the 38.30 taxpayer's situation result in the allocation of any sales or 38.31 receipts without this state. The jurisdiction to tax such a 38.32 business under this chapter must be determined in accordance 38.33 with sections 290.014 and 290.015. 38.34 Sec. 23. Minnesota Statutes 1998, section 290.17, 38.35 subdivision 4, is amended to read: 38.36 Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 39.1 business conducted wholly within this state or partly within and 39.2 partly without this state is part of a unitary business, the 39.3 entire income of the unitary business is subject to 39.4 apportionment pursuant to section 290.191. Notwithstanding 39.5 subdivision 2, paragraph (c), none of the income of a unitary 39.6 business is considered to be derived from any particular source 39.7 and none may be allocated to a particular place except as 39.8 provided by the applicable apportionment formula. The 39.9 provisions of this subdivision do not apply tofarm income39.10subject to subdivision 5, paragraph (a),business income subject 39.11 to subdivision 5,paragraph (b) or (c),income of an insurance 39.12 company determined under section 290.35, or income of an 39.13 investment company determined under section 290.36. 39.14 (b) The term "unitary business" means business activities 39.15 or operations whichare of mutual benefit, dependent upon, or39.16contributory to one another, individually or as a groupresult 39.17 in a flow of value between them. The term may be applied within 39.18 a single legal entity or between multiple entities and without 39.19 regard to whether each entity is a sole proprietorship, a 39.20 corporation, a partnership or a trust. 39.21 (c) Unity is presumed whenever there is unity of ownership, 39.22 operation, and use, evidenced by centralized management or 39.23 executive force, centralized purchasing, advertising, 39.24 accounting, or other controlled interaction, but the absence of 39.25 these centralized activities will not necessarily evidence a 39.26 nonunitary business. Unity is also presumed when business 39.27 activities or operations are of mutual benefit, dependent upon 39.28 or contributory to one another, either individually or as a 39.29 group. 39.30 (d) Where a business operation conducted in Minnesota is 39.31 owned by a business entity that carries on business activity 39.32 outside the state different in kind from that conducted within 39.33 this state, and the other business is conducted entirely outside 39.34 the state, it is presumed that the two business operations are 39.35 unitary in nature, interrelated, connected, and interdependent 39.36 unless it can be shown to the contrary. 40.1 (e) Unity of ownership is not deemed to exist when a 40.2 corporation is involved unless that corporation is a member of a 40.3 group of two or more business entities and more than 50 percent 40.4 of the voting stock of each member of the group is directly or 40.5 indirectly owned by a common owner or by common owners, either 40.6 corporate or noncorporate, or by one or more of the member 40.7 corporations of the group. For this purpose, the term "voting 40.8 stock" shall include membership interests of mutual insurance 40.9 holding companies formed under section 60A.077. 40.10 (f) The net income and apportionment factors under section 40.11 290.191 or 290.20 of foreign corporations and other foreign 40.12 entities which are part of a unitary business shall not be 40.13 included in the net income or the apportionment factors of the 40.14 unitary business. A foreign corporation or other foreign entity 40.15 which is required to file a return under this chapter shall file 40.16 on a separate return basis. The net income and apportionment 40.17 factors under section 290.191 or 290.20 of foreign operating 40.18 corporations shall not be included in the net income or the 40.19 apportionment factors of the unitary business except as provided 40.20 in paragraph (g). 40.21 (g) The adjusted net income of a foreign operating 40.22 corporation shall be deemed to be paid as a dividend on the last 40.23 day of its taxable year to each shareholder thereof, in 40.24 proportion to each shareholder's ownership, with which such 40.25 corporation is engaged in a unitary business. Such deemed 40.26 dividend shall be treated as a dividend under section 290.21, 40.27 subdivision 4. 40.28 Dividends actually paid by a foreign operating corporation 40.29 to a corporate shareholder which is a member of the same unitary 40.30 business as the foreign operating corporation shall be 40.31 eliminated from the net income of the unitary business in 40.32 preparing a combined report for the unitary business. The 40.33 adjusted net income of a foreign operating corporation shall be 40.34 its net income adjusted as follows: 40.35 (1) any taxes paid or accrued to a foreign country, the 40.36 commonwealth of Puerto Rico, or a United States possession or 41.1 political subdivision of any of the foregoing shall be a 41.2 deduction; and 41.3 (2) the subtraction from federal taxable income for 41.4 payments received from foreign corporations or foreign operating 41.5 corporations under section 290.01, subdivision 19d, clause (11), 41.6 shall not be allowed. 41.7 If a foreign operating corporation incurs a net loss, 41.8 neither income nor deduction from that corporation shall be 41.9 included in determining the net income of the unitary business. 41.10 (h) For purposes of determining the net income of a unitary 41.11 business and the factors to be used in the apportionment of net 41.12 income pursuant to section 290.191 or 290.20, there must be 41.13 included only the income and apportionment factors of domestic 41.14 corporations or other domestic entities other than foreign 41.15 operating corporations that are determined to be part of the 41.16 unitary business pursuant to this subdivision, notwithstanding 41.17 that foreign corporations or other foreign entities might be 41.18 included in the unitary business. 41.19 (i) Deductions for expenses, interest, or taxes otherwise 41.20 allowable under this chapter that are connected with or 41.21 allocable against dividends, deemed dividends described in 41.22 paragraph (g), or royalties, fees, or other like income 41.23 described in section 290.01, subdivision 19d, clause (11), shall 41.24 not be disallowed. 41.25 (j) Each corporation or other entity, except a sole 41.26 proprietorship, that is part of a unitary business must file 41.27 combined reports as the commissioner determines. On the 41.28 reports, all intercompany transactions between entities included 41.29 pursuant to paragraph (h) must be eliminated and the entire net 41.30 income of the unitary business determined in accordance with 41.31 this subdivision is apportioned among the entities by using each 41.32 entity's Minnesota factors for apportionment purposes in the 41.33 numerators of the apportionment formula and the total factors 41.34 for apportionment purposes of all entities included pursuant to 41.35 paragraph (h) in the denominators of the apportionment formula. 41.36 (k) If a corporation has been divested from a unitary 42.1 business and is included in a combined report for a fractional 42.2 part of the common accounting period of the combined report: 42.3 (1) its income includable in the combined report is its 42.4 income incurred for that part of the year determined by 42.5 proration or separate accounting; and 42.6 (2) its sales, property, and payroll included in the 42.7 apportionment formula must be prorated or accounted for 42.8 separately. 42.9 Sec. 24. Minnesota Statutes 1998, section 290.17, 42.10 subdivision 6, is amended to read: 42.11 Subd. 6. [NONBUSINESS INCOME.]For a trade or business for42.12which allocation of income within and without this state is42.13required, if the taxpayer has any income not connected with the42.14trade or business carried on partly within and partly without42.15this state that income must be allocated under subdivision 2.42.16Intangible property is employed in a trade or business if the42.17owner of the property holds it as a means of furthering the42.18trade or business.(a) Nonbusiness income is income of the 42.19 unitary business that cannot be apportioned by this state 42.20 because of the United States Constitution or the constitution of 42.21 the state of Minnesota and includes income that cannot 42.22 constitutionally be apportioned to this state and is derived 42.23 from a capital transaction that solely serves an investment 42.24 function. Nonbusiness income must be allocated under 42.25 subdivision 2. 42.26 (b) A taxpayer may elect that all income, whether or not 42.27 connected with the trade or business carried on partly within 42.28 and partly without this state, is business income apportionable 42.29 under subdivision 3 and is not subject to paragraph (a) and 42.30 subdivision 2. The election is effective and irrevocable for 42.31 the following ten taxable years after the taxable year in which 42.32 the election is made. The election is binding on all members of 42.33 a unitary business. 42.34 Sec. 25. Minnesota Statutes 1998, section 290.191, 42.35 subdivision 2, is amended to read: 42.36 Subd. 2. [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 43.1 Except for those trades or businesses required to use a 43.2 different formula under subdivision 3 or section 290.35 or 43.3 290.36, and for those trades or businesses that receive 43.4 permission to use some other method under section 290.20 or 43.5 under subdivision 4, a trade or business required to apportion 43.6 its net income must apportion its income to this state on the 43.7 basis of the percentage obtained by taking the sum of: 43.8 (1)7080 percent of the percentage which the sales made 43.9 within this state in connection with the trade or business 43.10 during the tax period are of the total sales wherever made in 43.11 connection with the trade or business during the tax period;43.12 (2)1510 percent of the percentage which the total 43.13 tangible property used by the taxpayer in this state in 43.14 connection with the trade or business during the tax period is 43.15 of the total tangible property, wherever located, used by the 43.16 taxpayer in connection with the trade or business during the tax 43.17 period; and 43.18 (3)1510 percent of the percentage which the taxpayer's 43.19 total payrolls paid or incurred in this state or paid in respect 43.20 to labor performed in this state in connection with the trade or 43.21 business during the tax period are of the taxpayer's total 43.22 payrolls paid or incurred in connection with the trade or 43.23 business during the tax period. 43.24 Sec. 26. Minnesota Statutes 1998, section 290.191, 43.25 subdivision 3, is amended to read: 43.26 Subd. 3. [APPORTIONMENT FORMULA FOR FINANCIAL 43.27 INSTITUTIONS.] Except for an investment company required to 43.28 apportion its income under section 290.36, a financial 43.29 institution that is required to apportion its net income must 43.30 apportion its net income to this state on the basis of the 43.31 percentage obtained by taking the sum of: 43.32 (1)7080 percent of the percentage which the receipts from 43.33 within this state in connection with the trade or business 43.34 during the tax period are of the total receipts in connection 43.35 with the trade or business during the tax period, from wherever 43.36 derived; 44.1 (2)1510 percent of the percentage which the sum of the 44.2 total tangible property used by the taxpayer in this state and 44.3 the intangible property owned by the taxpayer and attributed to 44.4 this state in connection with the trade or business during the 44.5 tax period is of the sum of the total tangible property, 44.6 wherever located, used by the taxpayer and the intangible 44.7 property owned by the taxpayer and attributed to all states in 44.8 connection with the trade or business during the tax period; and 44.9 (3)1510 percent of the percentage which the taxpayer's 44.10 total payrolls paid or incurred in this state or paid in respect 44.11 to labor performed in this state in connection with the trade or 44.12 business during the tax period are of the taxpayer's total 44.13 payrolls paid or incurred in connection with the trade or 44.14 business during the tax period. 44.15 Sec. 27. Minnesota Statutes 1998, section 290.9725, is 44.16 amended to read: 44.17 290.9725 [S CORPORATION.] 44.18 For purposes of this chapter, the term "S corporation" 44.19 means any corporation having a valid election in effect for the 44.20 taxable year under section 1362 of the Internal Revenue Code,44.21except that a corporation which either:44.22(1) is a financial institution to which either section 58544.23or section 593 of the Internal Revenue Code applies; or44.24(2) has a wholly owned subsidiary as described in section44.251361(b)(3)(B) of the Internal Revenue Code which is a financial44.26institution as described above44.27is not an "S" corporation for the purposes of this chapter. An 44.28 S corporation shall not be subject to the taxes imposed by this 44.29 chapter, except: 44.30 (1) the taxes imposed under sections 290.0922, 290.92, 44.31 290.9727, 290.9728, and 290.9729; and 44.32 (2) the tax under sections 290.06, subdivision 1, and 44.33 290.0921 apply to a financial institution to which either 44.34 section 585 or 593 of the Internal Revenue Code applies or that 44.35 has a wholly owned subsidiary as described in section 44.36 1361(b)(3)(B) of the Internal Revenue Code which is a financial 45.1 institution under section 585 or 593 of the Internal Revenue 45.2 Code. 45.3 Sec. 28. Minnesota Statutes 1998, section 290.9726, is 45.4 amended by adding a subdivision to read: 45.5 Subd. 7. [FINANCIAL INSTITUTIONS.] An S corporation that 45.6 is subject to the tax under section 290.9725, clause (2), must 45.7 report to each shareholder an apportionment of the S 45.8 corporation's tax obligation for the taxable year for purposes 45.9 of the credit under section 290.06, subdivision 26. The 45.10 apportionment to a shareholder must be made in proportion to the 45.11 amount of taxable income of the S corporation apportioned to the 45.12 shareholder. 45.13 Sec. 29. Minnesota Statutes 1998, section 290A.03, 45.14 subdivision 3, is amended to read: 45.15 Subd. 3. [INCOME.] (1) "Income" means the sum of the 45.16 following: 45.17 (a) federal adjusted gross income as defined in the 45.18 Internal Revenue Code; and 45.19 (b) the sum of the following amounts to the extent not 45.20 included in clause (a): 45.21 (i) all nontaxable income; 45.22 (ii) the amount of a passive activity loss that is not 45.23 disallowed as a result of section 469, paragraph (i) or (m) of 45.24 the Internal Revenue Code and the amount of passive activity 45.25 loss carryover allowed under section 469(b) of the Internal 45.26 Revenue Code; 45.27 (iii) an amount equal to the total of any discharge of 45.28 qualified farm indebtedness of a solvent individual excluded 45.29 from gross income under section 108(g) of the Internal Revenue 45.30 Code; 45.31 (iv) cash public assistance and relief; 45.32 (v) any pension or annuity (including railroad retirement 45.33 benefits, all payments received under the federal Social 45.34 Security Act, supplemental security income, and veterans 45.35 benefits), which was not exclusively funded by the claimant or 45.36 spouse, or which was funded exclusively by the claimant or 46.1 spouse and which funding payments were excluded from federal 46.2 adjusted gross income in the years when the payments were made; 46.3 (vi) interest received from the federal or a state 46.4 government or any instrumentality or political subdivision 46.5 thereof; 46.6 (vii) workers' compensation; 46.7 (viii) nontaxable strike benefits; 46.8 (ix) the gross amounts of payments received in the nature 46.9 of disability income or sick pay as a result of accident, 46.10 sickness, or other disability, whether funded through insurance 46.11 or otherwise; 46.12 (x) a lump sum distribution under section 402(e)(3) of the 46.13 Internal Revenue Code; 46.14 (xi) contributions made by the claimant to an individual 46.15 retirement account, including a qualified voluntary employee 46.16 contribution; simplified employee pension plan; self-employed 46.17 retirement plan; cash or deferred arrangement plan under section 46.18 401(k) of the Internal Revenue Code; or deferred compensation 46.19 plan under section 457 of the Internal Revenue Code; and 46.20 (xii) nontaxable scholarship or fellowship grants. 46.21 In the case of an individual who files an income tax return 46.22 on a fiscal year basis, the term "federal adjusted gross income" 46.23 shall mean federal adjusted gross income reflected in the fiscal 46.24 year ending in the calendar year. Federal adjusted gross income 46.25 shall not be reduced by the amount of a net operating loss 46.26 carryback or carryforward or a capital loss carryback or 46.27 carryforward allowed for the year. 46.28 (2) "Income" does not include: 46.29 (a) amounts excluded pursuant to the Internal Revenue Code, 46.30 sections 101(a) and 102; 46.31 (b) amounts of any pension or annuity which was exclusively 46.32 funded by the claimant or spouse and which funding payments were 46.33 not excluded from federal adjusted gross income in the years 46.34 when the payments were made; 46.35 (c) surplus food or other relief in kind supplied by a 46.36 governmental agency; 47.1 (d) relief granted under this chapter;or47.2 (e) child support payments received under a temporary or 47.3 final decree of dissolution or legal separation; or 47.4 (f) holocaust settlement payments as defined in section 47.5 290.01, subdivision 32. 47.6 (3) The sum of the following amounts may be subtracted from 47.7 income: 47.8 (a) for the claimant's first dependent, the exemption 47.9 amount multiplied by 1.4; 47.10 (b) for the claimant's second dependent, the exemption 47.11 amount multiplied by 1.3; 47.12 (c) for the claimant's third dependent, the exemption 47.13 amount multiplied by 1.2; 47.14 (d) for the claimant's fourth dependent, the exemption 47.15 amount multiplied by 1.1; 47.16 (e) for the claimant's fifth dependent, the exemption 47.17 amount; and 47.18 (f) if the claimant or claimant's spouse was disabled or 47.19 attained the age of 65 on or before December 31 of the year for 47.20 which the taxes were levied or rent paid, the exemption amount. 47.21 For purposes of this subdivision, the "exemption amount" 47.22 means the exemption amount under section 151(d) of the Internal 47.23 Revenue Code for the taxable year for which the income is 47.24 reported. 47.25 (4) Notwithstanding any other law to the contrary, for 47.26 purposes of determining eligibility, levels of assistance, and 47.27 participant payments or fees for state programs other than those 47.28 in chapter 518, "income" does not include holocaust settlement 47.29 payments as defined in section 290.01, subdivision 32. For 47.30 purposes of determining fees under section 256E.08, subdivision 47.31 6, counties must exclude holocaust settlement payments, as 47.32 defined in section 290.01, subdivision 32, from income. 47.33 Sec. 30. Minnesota Statutes 1998, section 290A.03, 47.34 subdivision 15, is amended to read: 47.35 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 47.36 means the Internal Revenue Code of 1986, as amended through 48.1 December 31,19971998. 48.2 Sec. 31. Minnesota Statutes 1998, section 291.005, 48.3 subdivision 1, is amended to read: 48.4 Subdivision 1. Unless the context otherwise clearly 48.5 requires, the following terms used in this chapter shall have 48.6 the following meanings: 48.7 (1) "Federal gross estate" means the gross estate of a 48.8 decedent as valued and otherwise determined for federal estate 48.9 tax purposes by federal taxing authorities pursuant to the 48.10 provisions of the Internal Revenue Code. 48.11 (2) "Minnesota gross estate" means the federal gross estate 48.12 of a decedent after (a) excluding therefrom any property 48.13 included therein which has its situs outside Minnesota and (b) 48.14 including therein any property omitted from the federal gross 48.15 estate which is includable therein, has its situs in Minnesota, 48.16 and was not disclosed to federal taxing authorities. 48.17 (3) "Personal representative" means the executor, 48.18 administrator or other person appointed by the court to 48.19 administer and dispose of the property of the decedent. If 48.20 there is no executor, administrator or other person appointed, 48.21 qualified, and acting within this state, then any person in 48.22 actual or constructive possession of any property having a situs 48.23 in this state which is included in the federal gross estate of 48.24 the decedent shall be deemed to be a personal representative to 48.25 the extent of the property and the Minnesota estate tax due with 48.26 respect to the property. 48.27 (4) "Resident decedent" means an individual whose domicile 48.28 at the time of death was in Minnesota. 48.29 (5) "Nonresident decedent" means an individual whose 48.30 domicile at the time of death was not in Minnesota. 48.31 (6) "Situs of property" means, with respect to real 48.32 property, the state or country in which it is located; with 48.33 respect to tangible personal property, the state or country in 48.34 which it was normally kept or located at the time of the 48.35 decedent's death; and with respect to intangible personal 48.36 property, the state or country in which the decedent was 49.1 domiciled at death. 49.2 (7) "Commissioner" means the commissioner of revenue or any 49.3 person to whom the commissioner has delegated functions under 49.4 this chapter. 49.5 (8) "Internal Revenue Code" means the United States 49.6 Internal Revenue Code of 1986, as amended through December 31, 49.719971998. 49.8 Sec. 32. [NONBUSINESS INCOME; PRE-1999 TAX YEARS.] 49.9 If all items of income, gain, or loss are reported by a 49.10 taxpayer as business income or loss on an original or amended 49.11 return for a tax year to which this section applies, the 49.12 commissioner of revenue shall not adjust the tax liability for 49.13 that tax year, or for any other tax year affected by a carryover 49.14 from that tax year, by treating any of the items as nonbusiness 49.15 income or loss under Minnesota Statutes, section 290.17, 49.16 subdivision 6. Any adjustment treating an item as nonbusiness 49.17 income or loss ordered by the commissioner before the effective 49.18 date of this section must be reversed if the order is subject to 49.19 administrative or judicial challenge on the effective date and 49.20 such a challenge is timely filed. The reporting of any item as 49.21 nonbusiness income, gain, or loss does not preclude the 49.22 application of this section if the taxpayer may not 49.23 constitutionally be required to treat the item as business 49.24 income, gain, or loss. 49.25 Sec. 33. [BANK S CORPORATION SHAREHOLDERS; ALTERNATIVE 49.26 MINIMUM TAX.] 49.27 For taxable years beginning after December 31, 1997, and 49.28 before January 1, 1999, a taxpayer is allowed a deduction in 49.29 computing alternative minimum taxable income under Minnesota 49.30 Statutes 1998, section 290.091, subdivision 2, paragraph (a), 49.31 equal to the amount of the subtraction under Minnesota Statutes 49.32 1998, section 290.01, subdivision 19b, clause (13). 49.33 Sec. 34. [APPROPRIATION.] 49.34 (a) $50,000 is appropriated from the general fund to the 49.35 commissioner of revenue to make grants to one or more nonprofit 49.36 organizations, qualifying under section 501(c)(3) of the 50.1 Internal Revenue Code of 1986, to coordinate, facilitate, 50.2 encourage, and aid in the provision of taxpayer assistance 50.3 services. In making grants under this appropriation, the 50.4 commissioner shall give preference to organizations that will 50.5 use the grants to attract new and train new and existing 50.6 volunteers to provide taxpayer assistance. This appropriation 50.7 is available for fiscal years 1999 and 2000. 50.8 (b) "Taxpayer assistance services" means accounting and tax 50.9 preparation services provided by volunteers to low-income and 50.10 disadvantaged Minnesota residents to help them file federal and 50.11 state income tax returns and Minnesota property tax refund 50.12 claims and to provide personal representation before the 50.13 department of revenue and the Internal Revenue Service. 50.14 Sec. 35. [EFFECTIVE DATE.] 50.15 (a) Sections 1, 7, 30, and 31 are effective at the same 50.16 time federal changes made by the Internal Revenue Service 50.17 Restructuring and Reform Act of 1998, Public Law Number 105-206, 50.18 and the Omnibus Consolidation and Emergency Supplemental 50.19 Appropriations Act, 1999, Public Law Number 105-277, which are 50.20 incorporated into Minnesota Statutes, chapters 289A, 290, 290A, 50.21 and 291 by these sections become effective for federal tax 50.22 purposes. 50.23 (b) Section 2 is intended to clarify rather than to change 50.24 the definition of resident and is effective for all 50.25 examinations, claims for refund, administrative appeals, and 50.26 court proceedings that are pending or begin on or after the day 50.27 following final enactment. 50.28 (c) Sections 4 to 6, 8 to 12, 14 to 19, 22, 23, the changes 50.29 to clauses (b), (c), and (j), and 24 to 29 are effective for tax 50.30 years beginning after December 31, 1998. 50.31 (d) Section 13 is effective for tax years beginning after 50.32 December 31, 1997. 50.33 (e) Sections 20, 21, and 23, the changes to clause (a), are 50.34 effective for tax years beginning on or after the day following 50.35 final enactment. 50.36 (f) Section 32 is effective on the day after final 51.1 enactment and applies to tax years beginning before January 1, 51.2 1999. 51.3 (g) Section 33 is effective for tax years after December 51.4 31, 1997, and beginning before January 1, 1999. 51.5 (h) Section 34 is effective the day following final 51.6 enactment. 51.7 ARTICLE 3 51.8 SALES AND USE TAXES 51.9 Section 1. Minnesota Statutes 1998, section 289A.18, 51.10 subdivision 4, is amended to read: 51.11 Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use 51.12 tax returns must be filed on or before the 20th day of the month 51.13 following the close of the preceding reporting period, except 51.14 that annual use tax returns provided for under section 289A.11, 51.15 subdivision 1, must be filed by April 15 following the close of 51.16 the calendar year, in the case of individuals. Annual use tax 51.17 returns of businesses, including sole proprietorships, and 51.18 annual sales tax returns must be filed by February 5 following 51.19 the close of the calendar year. 51.20 (b) Except for the return for the June reporting period, 51.21 which is due on the following August 25, returns filed by 51.22 retailers required to remit liabilities by means of funds 51.23 transfer under section 289A.20, subdivision 4, paragraph (d), 51.24 are due on or before the 25th day of the month following the 51.25 close of the preceding reporting period. 51.26 (c) If a retailer has an average sales and use tax 51.27 liability, including local sales and use taxes administered by 51.28 the commissioner, equal to or less than $500 per month in any 51.29 quarter of a calendar year, and has substantially complied with 51.30 the tax laws during the preceding four calendar quarters, the 51.31 retailer may request authorization to file and pay the taxes 51.32 quarterly in subsequent calendar quarters. The authorization 51.33 remains in effect during the period in which the retailer's 51.34 quarterly returns reflect sales and use tax liabilities of less 51.35 than $1,500 and there is continued compliance with state tax 51.36 laws. 52.1 (d) If a retailer has an average sales and use tax 52.2 liability, including local sales and use taxes administered by 52.3 the commissioner, equal to or less than $100 per month during a 52.4 calendar year, and has substantially complied with the tax laws 52.5 during that period, the retailer may request authorization to 52.6 file and pay the taxes annually in subsequent years. The 52.7 authorization remains in effect during the period in which the 52.8 retailer's annual returns reflect sales and use tax liabilities 52.9 of less than $1,200 and there is continued compliance with state 52.10 tax laws. 52.11 (e) The commissioner may also grant quarterly or annual 52.12 filing and payment authorizations to retailers if the 52.13 commissioner concludes that the retailers' future tax 52.14 liabilities will be less than the monthly totals identified in 52.15 paragraphs (c) and (d). An authorization granted under this 52.16 paragraph is subject to the same conditions as an authorization 52.17 granted under paragraphs (c) and (d). 52.18 (f) A taxpayer who is a materials supplier may report gross 52.19 receipts either on: 52.20 (1) the cash basis as the consideration is received; or 52.21 (2) the accrual basis as sales are made. 52.22 As used in this paragraph, "materials supplier" means a person 52.23 who provides materials for the improvement of real property; who 52.24 is primarily engaged in the sale of lumber and building 52.25 materials-related products to owners, contractors, 52.26 subcontractors, repairers, or consumers; who is authorized to 52.27 file a mechanics lien upon real property and improvements under 52.28 chapter 514; and who files with the commissioner an election to 52.29 file sales and use tax returns on the basis of this paragraph. 52.30 Sec. 2. Minnesota Statutes 1998, section 289A.20, 52.31 subdivision 4, is amended to read: 52.32 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 52.33 chapter 297A are due and payable to the commissioner monthly on 52.34 or before the 20th day of the month following the month in which 52.35 the taxable event occurred, or following another reporting 52.36 period as the commissioner prescribes or as allowed under 53.1 section 289A.18, subdivision 4, paragraph (f), except that use 53.2 taxes due on an annual use tax return as provided under section 53.3 289A.11, subdivision 1, are payable by April 15 following the 53.4 close of the calendar year. 53.5 (b) A vendor having a liability of $120,000 or more during 53.6 a fiscal year ending June 30 must remit the June liability for 53.7 the next year in the following manner: 53.8 (1) Two business days before June 30 of the year, the 53.9 vendor must remit 75 percent of the estimated June liability to 53.10 the commissioner. 53.11 (2) On or before August 14 of the year, the vendor must pay 53.12 any additional amount of tax not remitted in June. 53.13 (c) A vendor having a liability of $120,000 or more during 53.14 a fiscal year ending June 30 must remit all liabilities in the 53.15 subsequent calendar year by means of a funds transfer as defined 53.16 in section 336.4A-104, paragraph (a). The funds transfer 53.17 payment date, as defined in section 336.4A-401, must be on or 53.18 before the 14th day of the month following the month in which 53.19 the taxable event occurred, or on or before the 14th day of the 53.20 month following the month in which the sale is reported under 53.21 section 289A.18, subdivision 4, except for 75 percent of the 53.22 estimated June liability, which is due two business days before 53.23 June 30. The remaining amount of the June liability is due on 53.24 August 14. If the date the tax is due is not a funds transfer 53.25 business day, as defined in section 336.4A-105, paragraph (a), 53.26 clause (4), the payment date must be on or before the funds 53.27 transfer business day next following the date the tax is due. 53.28 (d) If the vendor required to remit by electronic funds 53.29 transfer as provided in paragraph (c) is unable due to 53.30 reasonable cause to determine the actual sales and use tax due 53.31 on or before the due date for payment, the vendor may remit an 53.32 estimate of the tax owed using one of the following options: 53.33 (1) 100 percent of the tax reported on the previous month's 53.34 sales and use tax return; 53.35 (2) 100 percent of the tax reported on the sales and use 53.36 tax return for the same month in the previous calendar year; or 54.1 (3) 95 percent of the actual tax due. 54.2 Any additional amount of tax that is not remitted on or 54.3 before the due date for payment, must be remitted with the 54.4 return. If a vendor fails to remit the actual liability or does 54.5 not remit using one of the estimate options by the due date for 54.6 payment, the vendor must remit actual liability as provided in 54.7 paragraph (c) in all subsequent periods. This paragraph does 54.8 not apply to the June sales and use tax liability. 54.9 Sec. 3. Minnesota Statutes 1998, section 289A.56, 54.10 subdivision 4, is amended to read: 54.11 Subd. 4. [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 54.12 PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 54.13 under section 297A.15, subdivision 5, interest is computed from 54.14 the date the refund claim is filed with the commissioner. For 54.15 refunds payable under section 289A.50, subdivision 2a, interest 54.16 is computed from the 20th day of the month following the month 54.17 of the invoice date for the purchase which is the subject of the 54.18 refund, if the refund claim includes a detailed schedule of 54.19 purchases made during each of the periods in the claim. If the 54.20 refund claim submitted does not contain a schedule reflecting 54.21 purchases made in each period, interest is computed from the 54.22 date the claim was filed. 54.23 Sec. 4. Minnesota Statutes 1998, section 297A.01, 54.24 subdivision 15, is amended to read: 54.25 Subd. 15. "Farm machinery" means new or used machinery, 54.26 equipment, implements, accessories, and contrivances used 54.27 directly and principally in the production for sale, but not 54.28 including the processing, of livestock, dairy animals, dairy 54.29 products, poultry and poultry products, fruits, vegetables, 54.30 trees and shrubs as nursery stock, forage, grains and bees and 54.31 apiary products. "Farm machinery" includes: 54.32 (1) machinery for the preparation, seeding or cultivation 54.33 of soil for growing agricultural crops and sod, harvesting and 54.34 threshing of agricultural products, harvesting or mowing of sod, 54.35 and certain machinery for dairy, livestock and poultry farms; 54.36 (2) barn cleaners, milking systems, grain dryers, automatic 55.1 feeding systems and similar installations, whether or not the 55.2 equipment is installed by the seller and becomes part of the 55.3 real property; 55.4 (3) irrigation equipment sold for exclusively agricultural 55.5 use, including pumps, pipe fittings, valves, sprinklers and 55.6 other equipment necessary to the operation of an irrigation 55.7 system when sold as part of an irrigation system, whether or not 55.8 the equipment is installed by the seller and becomes part of the 55.9 real property; 55.10 (4) logging equipment, including chain saws used for 55.11 commercial logging; 55.12 (5) fencing used for the containment of farmed cervidae, as 55.13 defined in section 17.451, subdivision 2; 55.14 (6) primary and backup generator units used to generate 55.15 electricity for the purpose of operating farm machinery, as 55.16 defined in this subdivision, or providing light or space heating 55.17 necessary for the production of livestock, dairy animals, dairy 55.18 products, or poultry and poultry products; and 55.19 (7) aquaculture production equipment as defined in 55.20 subdivision 19. 55.21 Repair or replacement parts for farm machinery shall not be 55.22 included in the definition of farm machinery. 55.23 Tools, shop equipment, grain bins, feed bunks, fencing 55.24 material except fencing material covered by clause (5), 55.25 communication equipment and other farm supplies shall not be 55.26 considered to be farm machinery. "Farm machinery" does not 55.27 include motor vehicles taxed under chapter 297B, snowmobiles, 55.28 snow blowers, lawn mowers except those used in the production of 55.29 sod for sale, garden-type tractors or garden tillers and the 55.30 repair and replacement parts for those vehicles and machines. 55.31 Sec. 5. Minnesota Statutes 1998, section 297A.25, 55.32 subdivision 9, is amended to read: 55.33 Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross 55.34 receipts from the sale of and the storage, use, or consumption 55.35 of all materials, including chemicals, fuels, petroleum 55.36 products, lubricants, packaging materials, including returnable 56.1 containers used in packaging food and beverage products, feeds, 56.2 seeds, fertilizers, electricity, gas and steam, used or consumed 56.3 in agricultural or industrial production of personal property 56.4 intended to be sold ultimately at retail, whether or not the 56.5 item so used becomes an ingredient or constituent part of the 56.6 property produced are exempt. Seeds, trees, fertilizers, and 56.7 herbicides purchased for use by farmers in the Conservation 56.8 Reserve Program under United States Code, title 16, section 56.9 590h, as amended through December 31, 1991, the Integrated Farm 56.10 Management Program under section 1627 of Public Law Number 56.11 101-624, the Wheat and Feed Grain Programs under sections 301 to 56.12 305 and 401 to 405 of Public Law Number 101-624, and the 56.13 conservation reserve program under sections 103F.505 to 56.14 103F.531, are included in this exemption. Sales to a 56.15 veterinarian of materials used or consumed in the care, 56.16 medication, and treatment of horses and agricultural production 56.17 animals are exempt under this subdivision. Chemicals used for 56.18 cleaning food processing machinery and equipment are included in 56.19 this exemption. Materials, including chemicals, fuels, and 56.20 electricity purchased by persons engaged in agricultural or 56.21 industrial production to treat waste generated as a result of 56.22 the production process are included in this exemption. Such 56.23 production shall include, but is not limited to, research, 56.24 development, design or production of any tangible personal 56.25 property, manufacturing, processing (other than by restaurants 56.26 and consumers) of agricultural products whether vegetable or 56.27 animal, commercial fishing, refining, smelting, reducing, 56.28 brewing, distilling, printing, mining, quarrying, lumbering, 56.29 generating electricity and the production of road building 56.30 materials. Such production shall not include painting, 56.31 cleaning, repairing or similar processing of property except as 56.32 part of the original manufacturing process. Machinery, 56.33 equipment, implements, tools, accessories, appliances, 56.34 contrivances, furniture and fixtures, used in such production 56.35 and fuel, electricity, gas or steam used for space heating or 56.36 lighting, are not included within this exemption; however, 57.1 accessory tools, equipment and other short lived items, which 57.2 are separate detachable units used in producing a direct effect 57.3 upon the product, where such items have an ordinary useful life 57.4 of less than 12 months, are included within the exemption 57.5 provided herein. The following materials, tools, and equipment 57.6 used in metalcasting are exempt under this subdivision: 57.7 crucibles, thermocouple protection sheaths and tubes, stalk 57.8 tubes, refractory materials, molten metal filters and filter 57.9 boxes, and degassing lances. Electricity used to make snow for 57.10 outdoor use for ski hills, ski slopes, or ski trails is included 57.11 in this exemption. Petroleum and special fuels used in 57.12 producing or generating power for propelling ready-mixed 57.13 concrete trucks on the public highways of this state are not 57.14 included in this exemption. 57.15 Sec. 6. Minnesota Statutes 1998, section 297A.25, 57.16 subdivision 11, is amended to read: 57.17 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 57.18 all sales, including sales in which title is retained by a 57.19 seller or a vendor or is assigned to a third party under an 57.20 installment sale or lease purchase agreement under section 57.21 465.71, of tangible personal property to, and all storage, use 57.22 or consumption of such property by, the United States and its 57.23 agencies and instrumentalities, the University of Minnesota, 57.24 state universities, community colleges, technical colleges, 57.25 state academies, the Lola and Rudy Perpich Minnesota center for 57.26 arts education, an instrumentality of a political subdivision 57.27 that is accredited as an optional/special function school by the 57.28 North Central Association of Colleges and Schools, school 57.29 districts, public libraries, public library systems, 57.30 multicounty, multitype library systems as defined in section 57.31 134.001, county law libraries under chapter 134A, the state 57.32 library under section 480.09, and the legislative reference 57.33 library are exempt. 57.34 As used in this subdivision, "school districts" means 57.35 public school entities and districts of every kind and nature 57.36 organized under the laws of the state of Minnesota, including, 58.1 without limitation, school districts, intermediate school 58.2 districts, education districts, service cooperatives, secondary 58.3 vocational cooperative centers, special education cooperatives, 58.4 joint purchasing cooperatives, telecommunication cooperatives, 58.5 regional management information centers, and any instrumentality 58.6 of a school district, as defined in section 471.59. 58.7 Sales exempted by this subdivision include sales under 58.8 section 297A.01, subdivision 3, paragraph (f). 58.9 Sales to hospitals and nursing homes owned and operated by 58.10 political subdivisions of the state are exempt under this 58.11 subdivision. 58.12 Sales of supplies and equipment used in the operation of an 58.13 ambulance service owned and operated by a political subdivision 58.14 of the state are exempt under this subdivision provided that the 58.15 supplies and equipment are used in the course of providing 58.16 medical care. Sales to a political subdivision of repair and 58.17 replacement parts for emergency rescue vehicles and fire trucks 58.18 and apparatus are exempt under this subdivision. 58.19 Sales to a political subdivision of machinery and 58.20 equipment, except for motor vehicles, used directly for mixed 58.21 municipal solid waste management services at a solid waste 58.22 disposal facility as defined in section 115A.03, subdivision 10, 58.23 are exempt under this subdivision. 58.24 Sales to political subdivisions of chore and homemaking 58.25 services to be provided to elderly or disabled individuals are 58.26 exempt. 58.27 Sales to a county or town of gravel and of machinery, 58.28 equipment, and accessories, except motor vehicles, used 58.29 exclusively for road and bridge maintenance, and leases of motor 58.30 vehicles exempt from tax under section 297B.03, clause (10), are 58.31 exempt. 58.32 Sales of telephone services to the department of 58.33 administration that are used to provide telecommunications 58.34 services through the intertechnologies revolving fund are exempt 58.35 under this subdivision. 58.36 This exemption shall not apply to building, construction or 59.1 reconstruction materials purchased by a contractor or a 59.2 subcontractor as a part of a lump-sum contract or similar type 59.3 of contract with a guaranteed maximum price covering both labor 59.4 and materials for use in the construction, alteration, or repair 59.5 of a building or facility. This exemption does not apply to 59.6 construction materials purchased by tax exempt entities or their 59.7 contractors to be used in constructing buildings or facilities 59.8 which will not be used principally by the tax exempt entities. 59.9 This exemption does not apply to the leasing of a motor 59.10 vehicle as defined in section 297B.01, subdivision 5, except for 59.11 leases entered into by the United States or its agencies or 59.12 instrumentalities. 59.13 The tax imposed on sales to political subdivisions of the 59.14 state under this section applies to all political subdivisions 59.15 other than those explicitly exempted under this subdivision, 59.16 notwithstanding section 115A.69, subdivision 6, 116A.25, 59.17 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 59.18 469.127, 473.448, 473.545, or 473.608 or any other law to the 59.19 contrary enacted before 1992. 59.20 Sales exempted by this subdivision include sales made to 59.21 other states or political subdivisions of other states, if the 59.22 sale would be exempt from taxation if it occurred in that state, 59.23 but do not include sales under section 297A.01, subdivision 3, 59.24 paragraphs (c) and (e). 59.25 Sec. 7. Minnesota Statutes 1998, section 297A.25, 59.26 subdivision 63, is amended to read: 59.27 Subd. 63. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 59.28 The gross receipts from the sale of tangible personal property 59.29 to, and the storage, use, or consumption of such property by, a 59.30 hospital are exempt, if the property purchased is to be used in 59.31 providing hospital services to human beings. For purposes of 59.32 this subdivision, "hospital" means a hospital organized and 59.33 operated for charitable purposes within the meaning of section 59.34 501(c)(3) of the Internal Revenue Code of 1986, as amended, and 59.35 licensed under chapter 144 or by any other jurisdiction. For 59.36 purposes of this subdivision, "hospital services"aremeans 60.1 services authorized or required to be performed by 60.2 a"hospital"hospital under chapter 144 andregulationsrules 60.3 thereunder or under the applicable licensure law of any other 60.4 jurisdiction.This exemption does60.5 (b) The gross receipts from the sale of tangible personal 60.6 property to, and the storage, use, or consumption of such 60.7 property by, an outpatient surgical center are exempt, if the 60.8 property purchased is to be used in providing outpatient 60.9 surgical services to human beings. For purposes of this 60.10 subdivision, "outpatient surgical center" means an outpatient 60.11 surgical center organized and operated for charitable purposes 60.12 within the meaning of section 501(c)(3) of the Internal Revenue 60.13 Code of 1986, as amended, and licensed under chapter 144 or by 60.14 any other jurisdiction. For the purposes of this subdivision, 60.15 "outpatient surgical services" means: (1) services authorized 60.16 or required to be performed by an outpatient surgical center 60.17 under chapter 144 and rules thereunder or under the applicable 60.18 licensure law of any other jurisdiction; and (2) urgent care. 60.19 For purposes of this subdivision, "urgent care" means health 60.20 services furnished to a person whose medical condition is 60.21 sufficiently acute to require treatment unavailable through, or 60.22 inappropriate to be provided by, a clinic or physician's office, 60.23 but not so acute as to require treatment in a hospital emergency 60.24 room. 60.25 (c) These exemptions do not apply to purchases made by a 60.26 clinic, physician's office, or any other medical facility not 60.27 operating as a hospital or outpatient surgical center, even 60.28 though the clinic, office, or facility may be owned and operated 60.29 by a hospital or outpatient surgical center. Sales exempted by 60.30 this subdivision do not include sales under section 297A.01, 60.31 subdivision 3, paragraphs (c) and (e).This exemption60.32doesThese exemptions do not apply to building, construction, or 60.33 reconstruction materials purchased by a contractor or a 60.34 subcontractor as a part of a lump-sum contract or similar type 60.35 of contract with a guaranteed maximum price covering both labor 60.36 and materials for use in the construction, alteration, or repair 61.1 of a hospital or outpatient surgical center.This exemption61.2doesThese exemptions do not apply to construction materials to 61.3 be used in constructing buildings or facilities which will not 61.4 be used principally by a hospital or outpatient surgical 61.5 center.This exemption doesThese exemptions do not apply to 61.6 the leasing of a motor vehicle as defined in section 297B.01, 61.7 subdivision 5. 61.8 Sec. 8. Minnesota Statutes 1998, section 297A.25, 61.9 subdivision 73, is amended to read: 61.10 Subd. 73. [BIOSOLIDS PROCESSING EQUIPMENT.] The gross 61.11 receipts from the sale of and the storage, use, or consumption 61.12 of equipment designed to process, dewater, and recycle biosolids 61.13 for wastewater treatment facilities of political subdivisions, 61.14 and materials incidental to installation of that 61.15 equipment, including materials used to construct buildings to 61.16 house that equipment, are exempt. 61.17 Sec. 9. Minnesota Statutes 1998, section 297A.25, is 61.18 amended by adding a subdivision to read: 61.19 Subd. 79. [PRIZES.] The gross receipts from the sales of 61.20 tangible personal property which will be given as prizes to 61.21 players in games of skill or chance conducted at events such as 61.22 community festivals, fairs, and carnivals lasting less than six 61.23 days are exempt. This exemption shall not apply to property 61.24 awarded as prizes in connection with lawful gambling as defined 61.25 in section 349.12 or the state lottery. 61.26 Sec. 10. Minnesota Statutes 1998, section 297A.25, is 61.27 amended by adding a subdivision to read: 61.28 Subd. 80. [CONSTRUCTION MATERIALS AND SUPPLIES; 61.29 AGRICULTURAL PROCESSING FACILITY.] Purchases of construction 61.30 materials, supplies, and equipment are exempt from the sales and 61.31 use taxes imposed under this chapter, regardless of whether 61.32 purchased by the owner or a contractor, subcontractor, or 61.33 builder, if: 61.34 (1) the materials, supplies, and equipment are used or 61.35 consumed in the expansion, remodeling, or improvement of a 61.36 facility used for cattle slaughtering; 62.1 (2) the cost of the expansion or improvement project 62.2 exceeds $15,000,000; 62.3 (3) the expansion, remodeling, or improvement of the 62.4 facility will be used to fabricate beef; 62.5 (4) the number of jobs at the facility will increase by at 62.6 least 150 when the project is completed; and 62.7 (5) the project is completed by December 31, 2001. 62.8 Sec. 11. Minnesota Statutes 1998, section 297A.25, is 62.9 amended by adding a subdivision to read: 62.10 Subd. 81. [SMOKING CESSATION DEVICES.] The gross receipts 62.11 from the sale of and the storage, use, or consumption of items 62.12 of personal property that are approved by the Federal Drug 62.13 Administration for use exclusively to assist individuals to 62.14 refrain from smoking tobacco, such as nicotine patches and 62.15 nicotine gum, are exempt. 62.16 Sec. 12. Minnesota Statutes 1998, section 297A.25, is 62.17 amended by adding a subdivision to read: 62.18 Subd. 82. [TELEVISION COMMERCIALS.] The gross receipts 62.19 from the sale of and storage, use, or consumption of tangible 62.20 personal property which is primarily used or consumed in the 62.21 preproduction, production, or postproduction of any television 62.22 commercial and any such commercial, regardless of the medium in 62.23 which it is transferred, are exempt. "Preproduction" and 62.24 "production" include but are not limited to all activities 62.25 related to the preparation for shooting and the shooting of 62.26 television commercials, including film processing. Equipment 62.27 rented for the preproduction and production activities is 62.28 exempt. "Postproduction" includes but is not limited to all 62.29 activities related to the finishing and duplication of 62.30 television commercials. This exemption does not apply to 62.31 tangible personal property used primarily in administration, 62.32 general management, or marketing. Machinery and equipment 62.33 purchased for use in producing such commercials and fuel, 62.34 electricity, gas, or steam used for space heating or lighting 62.35 are not exempt under this subdivision. 62.36 Sec. 13. Minnesota Statutes 1998, section 297A.25, is 63.1 amended by adding a subdivision to read: 63.2 Subd. 83. [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS 63.3 ELECTRICAL GENERATING FACILITY.] The gross receipts from the 63.4 purchases of materials and supplies used or consumed in, and 63.5 equipment incorporated into, the construction, improvement, or 63.6 expansion of a facility using biomass to generate electricity 63.7 are exempt from the sales and use taxes imposed under this 63.8 chapter, regardless of whether purchased by the owner or a 63.9 contractor, subcontractor, or builder, if: 63.10 (1) the facility exclusively utilizes residue wood, 63.11 sawdust, bark, chipped wood, or brush to generate electricity; 63.12 (2) the facility utilizes a reciprocated grate combination 63.13 system; and 63.14 (3) the total gross capacity of the facility is 15 to 21 63.15 megawatts. 63.16 Sec. 14. Minnesota Statutes 1998, section 297A.48, is 63.17 amended by adding a subdivision to read: 63.18 Subd. 7a. [DETERMINATION OF WHERE SALES OCCUR.] In 63.19 determining whether a sale occurs within a political 63.20 subdivision, the retailer may use the zip code of the 63.21 purchaser's delivery address only if that zip code area is 63.22 entirely contained within the political subdivision. If the zip 63.23 code area contains more than one political subdivision, the 63.24 retailer must use the purchaser's actual delivery address to 63.25 determine the local sales tax that is imposed. Notwithstanding 63.26 subdivision 10, this subdivision applies to all local sales 63.27 taxes without regard to the date of authorization. 63.28 Sec. 15. [297A.2532] [HEALTH CLUBS; SALES TAX NOTICE.] 63.29 Each organization, whether or not incorporated, whose 63.30 primary business purpose is to provide access to equipment and 63.31 services for aerobic or anaerobic exercise for the promotion of 63.32 health and fitness which is not member governed or member 63.33 controlled, and which is subject to the sales tax by virtue of 63.34 section 297A.01, subdivision 3, paragraph (k), shall separately 63.35 identify in its membership agreement or invoices the sales tax 63.36 collected by the organization on the organization's initiation 64.1 fees and membership dues. 64.2 Sec. 16. Minnesota Statutes 1998, section 297B.01, 64.3 subdivision 7, is amended to read: 64.4 Subd. 7. [SALE, SELLS, SELLING, PURCHASE, PURCHASED, OR 64.5 ACQUIRED.] "Sale," "sells," "selling," "purchase," "purchased," 64.6 or "acquired" means any transfer of title of any motor vehicle, 64.7 whether absolutely or conditionally, for a consideration in 64.8 money or by exchange or barter for any purpose other than resale 64.9 in the regular course of business. Any motor vehicle utilized 64.10 by the owner only by leasing such vehicle to others or by 64.11 holding it in an effort to so lease it, and which is put to no 64.12 other use by the owner other than resale after such lease or 64.13 effort to lease, shall be considered property purchased for 64.14 resale. The terms also shall include any transfer of title or 64.15 ownership of a motor vehicle byway of gift or by any other64.16manner or by anyother meanswhatsoever, for or without 64.17 consideration, except that these terms shall not include: 64.18 (a) the acquisition of a motor vehicle by inheritance from 64.19 or by bequest of, a decedent who owned it; 64.20 (b) the transfer of a motor vehicle which was previously 64.21 licensed in the names of two or more joint tenants and 64.22 subsequently transferred without monetary consideration to one 64.23 or more of the joint tenants; 64.24 (c) the transfer of a motor vehicle by way of gift between 64.25a husband and wife or parent and childindividuals, when the 64.26 transfer is with no monetary or other consideration or in 64.27 expectation of consideration and the parties to the transfer 64.28 submit an affidavit to this effect at the time the title 64.29 transfer is recorded; 64.30 (d) the voluntary or involuntary transfer of a motor 64.31 vehicle between a husband and wife in a divorce proceeding; or 64.32 (e) the transfer of a motor vehicle by way of a gift to an 64.33 organization that is exempt from federal income taxation under 64.34 section 501(c)(3) of the Internal Revenue Code, as amended 64.35 through December 31, 1996, when the motor vehicle will be used 64.36 exclusively for religious, charitable, or educational purposes. 65.1 Sec. 17. Minnesota Statutes 1998, section 297B.03, is 65.2 amended to read: 65.3 297B.03 [EXEMPTIONS.] 65.4 There is specifically exempted from the provisions of this 65.5 chapter and from computation of the amount of tax imposed by it 65.6 the following: 65.7 (1) Purchase or use, including use under a lease purchase 65.8 agreement or installment sales contract made pursuant to section 65.9 465.71, of any motor vehicle by the United States and its 65.10 agencies and instrumentalities and by any person described in 65.11 and subject to the conditions provided in section 297A.25, 65.12 subdivision 18. 65.13 (2) Purchase or use of any motor vehicle by any person who 65.14 was a resident of another state at the time of the purchase and 65.15 who subsequently becomes a resident of Minnesota, provided the 65.16 purchase occurred more than 60 days prior to the date such 65.17 person began residing in the state of Minnesota. 65.18 (3) Purchase or use of any motor vehicle by any person 65.19 making a valid election to be taxed under the provisions of 65.20 section 297A.211. 65.21 (4) Purchase or use of any motor vehicle previously 65.22 registered in the state of Minnesota when such transfer 65.23 constitutes a transfer within the meaning of section 351 or 721 65.24 of the Internal Revenue Code of 1986, as amended through 65.25 December 31, 1988. 65.26 (5) Purchase or use of any vehicle owned by a resident of 65.27 another state and leased to a Minnesota based private or for 65.28 hire carrier for regular use in the transportation of persons or 65.29 property in interstate commerce provided the vehicle is titled 65.30 in the state of the owner or secured party, and that state does 65.31 not impose a sales tax or sales tax on motor vehicles used in 65.32 interstate commerce. 65.33 (6) Purchase or use of a motor vehicle by a private 65.34 nonprofit or public educational institution for use as an 65.35 instructional aid in automotive training programs operated by 65.36 the institution. "Automotive training programs" includes motor 66.1 vehicle body and mechanical repair courses but does not include 66.2 driver education programs. 66.3 (7) Purchase of a motor vehicle for use as an ambulance by 66.4 an ambulance service licensed under section 144E.10. 66.5 (8) Purchase of a motor vehicle by or for a public library, 66.6 as defined in section 134.001, subdivision 2, as a bookmobile or 66.7 library delivery vehicle. 66.8 (9) Purchase of a ready-mixed concrete truck. 66.9 (10) Purchase or use of a motor vehicle by a county or town 66.10 for use exclusively for road maintenance, including snowplows 66.11 and dump trucks, but not including automobiles, vans, or pickup 66.12 trucks. 66.13 Sec. 18. Laws 1998, chapter 389, article 8, section 44, 66.14 subdivision 5, is amended to read: 66.15 Subd. 5. [USE OF REVENUES.] (a) Revenues received from the 66.16 taxes authorized by subdivisions 1 to 4 must be used to pay for 66.17 the cost of collecting the taxes; to pay all or part of the 66.18 capital or administrative cost of the acquisition, construction, 66.19 and improvement of the Central Minnesota Events Center and 66.20 related on-site and off-site improvements; and to pay for the 66.21 operating deficit, if any, in the first five years of operation 66.22 of the facility. Authorized expenses related to acquisition, 66.23 construction, and improvement of the center include, but are not 66.24 limited to, acquiring property, paying construction and 66.25 operating expenses related to the development of the facility, 66.26 and securing and paying debt service on bonds or other 66.27 obligations issued to finance construction or improvement of the 66.28 authorized facility. 66.29 (b) In addition, if the revenues collected from a tax 66.30 imposed in subdivisions 1 to 4 are greater than the amount 66.31 needed to meet obligations under paragraph (a) in any year, the 66.32 surplus may be returned to the cities in a manner agreed upon by 66.33 the participating cities under this section, to be used by the 66.34 cities for projects of regional significance, limited to the 66.35 acquisition and improvement of park land and open space; the 66.36 purchase, renovation, and construction of public buildings and 67.1 land primarily used for the arts, libraries, and community 67.2 centers; and for debt service on bonds issued for these 67.3 purposes. The amount of surplus revenues raised by a tax will 67.4 be determined either as provided for by an applicable joint 67.5 powers agreement or by a governing entity in charge of 67.6 administering the project in paragraph (a). 67.7 (c) If start of the Central Minnesota Events Center under 67.8 paragraph (a) is delayed, the cities may still impose the tax, 67.9 and use a portion of the revenue to fund the projects under 67.10 paragraph (b), provided that revenues are reserved to pay future 67.11 costs of the construction of the events center in paragraph (a) 67.12 as provided by a joint powers agreement or by a governing entity 67.13 in charge of administering the project. If a decision is made 67.14 not to proceed with the event center under paragraph (a) or 67.15 construction of the event center has not begun by December 31, 67.16 2008, the funds in the reserve account shall be distributed to 67.17 the cities based on the joint powers agreement to pay for other 67.18 projects permitted under paragraph (b). All revenues raised 67.19 from these taxes after December 31, 2008, must be used 67.20 exclusively to pay off bonds for the event center project under 67.21 paragraph (a) and to pay off bonds issued under subdivision 6. 67.22 Sec. 19. Laws 1998, chapter 389, article 8, section 44, 67.23 subdivision 6, is amended to read: 67.24 Subd. 6. [BONDING AUTHORITY.] (a) The cities named in 67.25 subdivision 1 may issue bonds under Minnesota Statutes, chapter 67.26 475, to finance the acquisition, construction, and improvement 67.27 of the Central Minnesota Events Center. An election to approve 67.28 the bonds under Minnesota Statutes, section 475.58, may be held 67.29 in combination with the election to authorize imposition of the 67.30 tax under subdivision 1. Whether to permit imposition of the 67.31 tax and issuance of bonds may be posed to the voters as a single 67.32 question. The question must state that the sales tax revenues 67.33 are pledged to pay the bonds, but that the bonds are general 67.34 obligations and will be guaranteed by the city's property taxes. 67.35 (b) The issuance of bonds under this subdivision is not 67.36 subject to Minnesota Statutes, section 275.60. 68.1 (c) The bonds are not included in computing any debt 68.2 limitation applicable to the city, and the levy of taxes under 68.3 Minnesota Statutes, section 475.61, to pay principal of and 68.4 interest on the bonds is not subject to any levy limitation. 68.5 The aggregate principal amount of bonds issued by all cities 68.6 named in subdivision 1, plus the aggregate of the taxes used 68.7 directly to pay eligible capital expenditures and improvements 68.8 for the Central Minnesota Events Center, may not exceed 68.9 $50,000,000, plus an amount equal to the costs related to 68.10 issuance of the bonds, less any amount made available to the 68.11 cities for the project described in subdivision 5 under the 68.12 capital expenditure legislation adopted during the 1998 session 68.13 of the legislature. 68.14 (d) The taxes may be pledged to and used for the payment of 68.15 the bonds and any bonds issued to refund them, only if the bonds 68.16 and any refunding bonds are general obligations of the city. 68.17 (e) The cities named in subdivision 1 may issue bonds for 68.18 the projects listed in subdivision 5, paragraph (b), under 68.19 regular bonding authority. Bonds for these projects, to be paid 68.20 from tax revenues under this section, may not be issued after 68.21 December 31, 2008. 68.22 Sec. 20. Laws 1998, chapter 389, article 8, section 44, 68.23 subdivision 7, as amended by Laws 1998, chapter 408, section 20, 68.24 is amended to read: 68.25 Subd. 7. [TERMINATION OF TAXES.] The taxes imposed by each 68.26 city under subdivisions 1 to 4 expire at the earlier of 30 years 68.27 or when sufficient funds have been received from the taxes to 68.28 finance the obligations under subdivisions 5, paragraph (a), and 68.29 6, and to prepay or retire at maturity the principal, interest, 68.30 and premium due on the original bonds issued for the initial 68.31 acquisition, construction, and improvement of the Central 68.32 Minnesota Events Center as determined under an applicable joint 68.33 powers agreement or by a governing entity in charge of 68.34 administering the project. Any funds remaining after completion 68.35 of the project and retirement or redemption of the bonds may be 68.36 placed in the general funds of the cities imposing the taxes. 69.1 The taxes imposed by a city under this section may expire at an 69.2 earlier time by city ordinance, if authorized under the 69.3 applicable joint powers agreement or by the governing entity in 69.4 charge of administering the project. 69.5 If the cities that pass a referendum required under 69.6 subdivision61 determine that the revenues raised from the sum 69.7 of all the taxes authorized by referendum under thissubdivision69.8 section will not be sufficient to fund the project in 69.9 subdivision 5, paragraph (a), none of the authorized taxes may 69.10 be imposed. 69.11 If the taxes are imposed, as allowed under subdivision 5, 69.12 paragraph (c), and the cities determine at a later date that 69.13 there are not sufficient funds to fund the Central Minnesota 69.14 Events Center under subdivision 5, paragraph (a), or the funding 69.15 for the event center has not been determined by December 31, 69.16 2008, the taxes will be terminated as soon as sufficient 69.17 revenues are raised to prepay or retire at maturity the 69.18 principal, interest, and premium due on bonds issued under 69.19 subdivision 6, paragraph (e). 69.20 Sec. 21. [EFFECTIVE DATES.] 69.21 Sections 1, 2, 4, 6, 7, 9, 11, 12, and 17 are effective for 69.22 sales and purchases made after June 30, 1999. 69.23 Section 3 is effective for amended returns and refund 69.24 claims filed on or after July 1, 1999. 69.25 Section 5 is effective the day following final enactment 69.26 and applies retroactively to all open tax years and to 69.27 assessments and appeals under Minnesota Statutes, sections 69.28 289A.38 and 289A.65, for which the time limits have not expired 69.29 on the date of final enactment of this act. The provisions of 69.30 Minnesota Statutes, section 289A.50, apply to refunds claimed 69.31 under section 5. Refunds claimed under section 5 must be filed 69.32 by the later of December 31, 1999, or the time limit under 69.33 Minnesota Statutes, section 289A.40, subdivision 1. 69.34 Section 8 is effective retroactively for sales and 69.35 purchases made after June 30, 1998. 69.36 Section 10 is effective for purchases and sales made after 70.1 the date of final enactment. 70.2 Section 13 is effective for purchases made after the date 70.3 of final enactment and before July 1, 2001. 70.4 Section 14 is effective the day following final enactment. 70.5 Section 16 is effective July 1, 1999. 70.6 ARTICLE 4 70.7 SPECIAL TAXES 70.8 Section 1. Minnesota Statutes 1998, section 287.01, 70.9 subdivision 3, as amended by Laws 1999, chapter 31, section 1, 70.10 is amended to read: 70.11 Subd. 3. [DEBT.] "Debt" means the principal amount of an 70.12 obligation to pay moneyor to perform or refrain from performing70.13an actthat is secured in whole or in part by a mortgage of an 70.14 interest in real property. 70.15 Sec. 2. Minnesota Statutes 1998, section 287.05, 70.16 subdivision 1, as amended by Laws 1999, chapter 31, section 5, 70.17 is amended to read: 70.18 Subdivision 1. [REAL PROPERTY OUTSIDE MINNESOTA.] (a) When 70.19 a multistate mortgage is intended to secure only a portion of a 70.20 debt amount recited or referred to in the mortgage, the mortgage 70.21 may contain the following statement, or its equivalent, on the 70.22 first page: "Notwithstanding anything to the contrary herein, 70.23 enforcement of this mortgage in Minnesota is limited to a debt 70.24 amount of $....... under chapter 287 of Minnesota Statutes." In 70.25 such case, the tax shall be imposed based only on the amount of 70.26 debt so stated to be secured by real property located in this 70.27 state; and, the effect of the mortgage, or any amendment or 70.28 extension, as evidence in any court in this state, or as notice 70.29 for any purpose in this state, shall be limited to the amount 70.30 contained in the statement and for which the tax has been 70.31 paid and additional amounts for accrued interest and advances 70.32 not subject to tax under section 287.035 or 287.05, subdivision 70.33 4. 70.34 (b) All multistate mortgages not taxed under paragraph (a) 70.35 shall be taxed under sections 287.01 to 287.13 as if the real 70.36 property identified in the mortgage secures payment of that 71.1 portion of the maximum debt amount referred to, or incorporated 71.2 by reference, in the mortgage that is equal to a fraction the 71.3 numerator of which is the value of the real property described 71.4 in the mortgage that is located in this state and the 71.5 denominator of which is the value of all the real property 71.6 described in the mortgage. 71.7 Sec. 3. Minnesota Statutes 1998, section 287.05, 71.8 subdivision 1a, as amended by Laws 1999, chapter 31, section 5, 71.9 is amended to read: 71.10 Subd. 1a. [REAL PROPERTY IN THIS STATE SECURES PORTION OF 71.11 DEBT.] (a) When the real property identified in a mortgage is 71.12 located entirely in this state and is intended to secure only a 71.13 portion of a debt amount recited or referred to in the mortgage, 71.14 the mortgage may contain the following statement, or its 71.15 equivalent, on the first page: "Notwithstanding anything to the 71.16 contrary herein, enforcement of this mortgage is limited to a 71.17 debt amount of $....... under chapter 287 of Minnesota 71.18 Statutes." In such case, the tax shall be imposed based only on 71.19 the amount of debt so stated to be secured by real property; 71.20 and, the effect of the mortgage, or any amendment or extension, 71.21 evidence in any court in this state, or as notice for any 71.22 purpose in this state, shall be limited to the amount contained 71.23 in the statement and for which the tax has been paid and 71.24 additional amounts for accrued interest and advances not subject 71.25 to tax under section 287.035 or 287.05, subdivision 4. 71.26 (b) All mortgages that are not multistate mortgages and 71.27 that are not taxed under paragraph (a) shall be taxed under 71.28 sections 287.01 to 287.13 as if the real property identified in 71.29 the mortgage secures payment of the maximum debt amount referred 71.30 to, or incorporated by reference, in the mortgage. 71.31 Sec. 4. Minnesota Statutes 1998, section 296A.16, is 71.32 amended by adding a subdivision to read: 71.33 Subd. 4a. [UNDYED KEROSENE; REFUNDS.] Notwithstanding 71.34 subdivision 1, the commissioner shall allow a refund of the tax 71.35 paid on undyed kerosene used exclusively for a purpose other 71.36 than as fuel for a motor vehicle using the streets and 72.1 highways. To obtain a refund, the person making the sale to an 72.2 end user must meet the Internal Revenue Service requirements for 72.3 sales from a blocked pump. A claim for a refund may be filed as 72.4 provided in this section. 72.5 Sec. 5. Minnesota Statutes 1998, section 296A.16, is 72.6 amended by adding a subdivision to read: 72.7 Subd. 4b. [RACING GASOLINE; REFUNDS.] Notwithstanding 72.8 subdivision 1, the commissioner shall allow a licensed 72.9 distributor a refund of the tax paid on leaded gasoline of 110 72.10 octane or more that does not meet ASTM specification D4814 for 72.11 gasoline and that is sold in bulk for use in nonregistered motor 72.12 vehicles. A claim for a refund may be filed as provided for in 72.13 this section. 72.14 Sec. 6. Minnesota Statutes 1998, section 297E.01, is 72.15 amended by adding a subdivision to read: 72.16 Subd. 17a. [BUSINESS DAY.] "Business day" means Monday 72.17 through Friday, excluding any holidays as defined in section 72.18 645.44. 72.19 Sec. 7. Minnesota Statutes 1998, section 297E.02, 72.20 subdivision 1, is amended to read: 72.21 Subdivision 1. [IMPOSITION.] A tax is imposed on all 72.22 lawful gambling other than (1)pull-tabs purchased and placed72.23into inventory after January 1, 1987,pull-tab deals or games; 72.24and(2)tipboards purchased and placed into inventory after June72.2530, 1988tipboard deals or games; and (3) items listed in 72.26 section 297E.01, subdivision 8, clauses (4) and (5), at the rate 72.27 of9.58.5 percent on the gross receipts as defined in section 72.28 297E.01, subdivision 8, less prizes actually paid. The tax 72.29 imposed by this subdivision is in lieu of the tax imposed by 72.30 section 297A.02 and all local taxes and license fees except a 72.31 fee authorized under section 349.16, subdivision 8, or a tax 72.32 authorized under subdivision 5. 72.33 The tax imposed under this subdivision is payable by the 72.34 organization or party conducting, directly or indirectly, the 72.35 gambling. 72.36 Sec. 8. Minnesota Statutes 1998, section 297E.02, 73.1 subdivision 3, is amended to read: 73.2 Subd. 3. [COLLECTION; DISPOSITION.] Taxes imposed by this 73.3 section other than in subdivision 4 are due and payable to the 73.4 commissioner when the gambling tax return is required to be 73.5 filed. Taxes imposed by subdivision 4 are due and payable to 73.6 the commissioner on or before the last business day of the month 73.7 following the month in which the taxable sale was made. Returns 73.8 covering the taxes imposed under this section must be filed with 73.9 the commissioner on or before the 20th day of the month 73.10 following the close of the previous calendar month. The 73.11 commissioner may require that the returns be filed via magnetic 73.12 media or electronic data transfer. The proceeds, along with the 73.13 revenue received from all license fees and other fees under 73.14 sections 349.11 to 349.191, 349.211, and 349.213, must be paid 73.15 to the state treasurer for deposit in the general fund. 73.16 Sec. 9. Minnesota Statutes 1998, section 297E.02, 73.17 subdivision 4, is amended to read: 73.18 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 73.19 on the sale of each deal of pull-tabs and tipboards sold by a 73.20 distributor. The rate of the tax is1.91.7 percent of the 73.21 ideal gross of the pull-tab or tipboard deal. The sales tax 73.22 imposed by chapter 297A on the sale of the pull-tabs and 73.23 tipboards by the distributor is imposed on the retail sales 73.24 price less the tax imposed by this subdivision. The retail sale 73.25 of pull-tabs or tipboards by the organization is exempt from 73.26 taxes imposed by chapter 297A and is exempt from all local taxes 73.27 and license fees except a fee authorized under section 349.16, 73.28 subdivision 8. 73.29 (b) The liability for the tax imposed by this section is 73.30 incurred when the pull-tabs and tipboards are delivered by the 73.31 distributor to the customer or to a common or contract carrier 73.32 for delivery to the customer, or when received by the customer's 73.33 authorized representative at the distributor's place of 73.34 business, regardless of the distributor's method of accounting 73.35 or the terms of the sale. 73.36 The tax imposed by this subdivision is imposed on all sales 74.1 of pull-tabs and tipboards, except the following: 74.2 (1) sales to the governing body of an Indian tribal 74.3 organization for use on an Indian reservation; 74.4 (2) sales to distributors licensed under the laws of 74.5 another state or of a province of Canada, as long as all 74.6 statutory and regulatory requirements are met in the other state 74.7 or province; 74.8 (3) sales of promotional tickets as defined in section 74.9 349.12; and 74.10 (4) pull-tabs and tipboards sold to an organization that 74.11 sells pull-tabs and tipboards under the exemption from licensing 74.12 in section 349.166, subdivision 2. A distributor shall require 74.13 an organization conducting exempt gambling to show proof of its 74.14 exempt status before making a tax-exempt sale of pull-tabs or 74.15 tipboards to the organization. A distributor shall identify, on 74.16 all reports submitted to the commissioner, all sales of 74.17 pull-tabs and tipboards that are exempt from tax under this 74.18 subdivision. 74.19 (c) A distributor having a liability of $120,000 or more 74.20 during a fiscal year ending June 30 must remit all liabilities 74.21 in the subsequent calendar year by a funds transfer as defined 74.22 in section 336.4A-104, paragraph (a). The funds transfer 74.23 payment date, as defined in section 336.4A-401, must be on or 74.24 before the date the tax is due. If the date the tax is due is 74.25 not a funds transfer business day, as defined in section 74.26 336.4A-105, paragraph (a), clause (4), the payment date must be 74.27 on or before the funds transfer business day next following the 74.28 date the tax is due. 74.29 (d) Any customer who purchases deals of pull-tabs or 74.30 tipboards from a distributor may file an annual claim for a 74.31 refund or credit of taxes paid pursuant to this subdivision for 74.32 unsold pull-tab and tipboard tickets. The claim must be filed 74.33 with the commissioner on a form prescribed by the commissioner 74.34 by March 20 of the year following the calendar year for which 74.35 the refund is claimed. The refund must be filed as part of the 74.36 customer's February monthly return. The refund or credit is 75.1 equal to1.91.7 percent of the face value of the unsold 75.2 pull-tab or tipboard tickets, provided that the refund or credit 75.3 will be1.951.8 percent of the face value of the unsold 75.4 pull-tab or tipboard tickets for claims for a refund or credit 75.5 of taxes filed on the February19992000 monthly return. The 75.6 refund claimed will be applied as a credit against tax owing 75.7 under this chapter on the February monthly return. If the 75.8 refund claimed exceeds the tax owing on the February monthly 75.9 return, that amount will be refunded. The amount refunded will 75.10 bear interest pursuant to section 270.76 from 90 days after the 75.11 claim is filed. 75.12 Sec. 10. Minnesota Statutes 1998, section 297E.02, 75.13 subdivision 6, is amended to read: 75.14 Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes 75.15 imposed under subdivisions 1 and 4, a tax is imposed on the 75.16 combined receipts of the organization. As used in this section, 75.17 "combined receipts" is the sum of the organization's gross 75.18 receipts from lawful gambling less gross receipts directly 75.19 derived from the conduct of bingo, raffles, and paddlewheels, as 75.20 defined in section 297E.01, subdivision 8, for the fiscal year. 75.21 The combined receipts of an organization are subject to a tax 75.22 computed according to the following schedule: 75.23 If the combined receipts for the The tax is: 75.24 fiscal year are: 75.25 Not over $500,000 zero 75.26 Over $500,000, but not over 75.27 $700,0001.91.7 percent of the 75.28 amount over $500,000, but 75.29 not over $700,000 75.30 Over $700,000, but not over 75.31 $900,000$3,800$3,400 plus3.875.32 3.4 percent of the amount 75.33 over $700,000, but 75.34 not over $900,000 75.35 Over $900,000$11,400$10,200 plus5.775.36 5.1 percent of the 76.1 amount over $900,000 76.2 Sec. 11. Minnesota Statutes 1998, section 297F.01, 76.3 subdivision 23, is amended to read: 76.4 Subd. 23. [WHOLESALE PRICE.] "Wholesale price" means the 76.5 established price for which a manufacturer or person sells a 76.6 tobacco product to a distributor, exclusive of any discount or 76.7 other reduction. 76.8 Sec. 12. Minnesota Statutes 1998, section 297F.17, 76.9 subdivision 6, is amended to read: 76.10 Subd. 6. [TIME LIMIT FOR BAD DEBTDEDUCTIONREFUND.] 76.11 Claims for refund must be filed with the commissionerwithin one76.12year ofduring the one-year period beginning with the timely 76.13 filingdateof the taxpayer's federal income tax return 76.14 containing the bad debt deduction that is being claimed. 76.15 Claimants under this subdivision are subject to the notice 76.16 requirements of section 289A.38, subdivision 7. 76.17 Sec. 13. Minnesota Statutes 1998, section 297H.05, is 76.18 amended to read: 76.19 297H.05 [SELF-HAULERS.] 76.20 (a) A self-hauler of mixed municipal solid waste shall pay 76.21 the tax to the operator of the waste management facility to 76.22 which the waste is delivered at the rate imposed under section 76.23 297H.03, based on the sales price of the waste management 76.24 services. 76.25 (b) A self-hauler of non-mixed-municipal solid waste shall 76.26 pay the tax to the operator of the waste management facility to 76.27 which the waste is delivered at the rate imposed under section 76.28 297H.04. 76.29 (c) The tax imposed on the self-hauler of 76.30 non-mixed-municipal solid waste may be based either on the 76.31 capacity of the container, the actual volume, or the 76.32 weight-to-volume conversion schedule in paragraph (d). However, 76.33 the tax must be calculated by the operator using the same method 76.34 for calculating the tipping fee so that both are calculated 76.35 according to container capacity, actual volume, or weight. 76.36 (d) The weight-to-volume conversion schedule for: 77.1 (1) construction debris as defined in section 115A.03, 77.2 subdivision 7, is one ton equals 3.33 cubic yards, or $2 per 77.3 ton; 77.4 (2) industrial waste as defined in section 115A.03, 77.5 subdivision 13a, is equal to 60 cents per cubic yard. The 77.6 commissioner of revenue, after consultation with the 77.7 commissioner of the pollution control agency, shall determine, 77.8 and may publish by notice, a conversion schedule for various 77.9 industrial wastes; and 77.10 (3) infectious waste as defined in section 116.76, 77.11 subdivision 12, and pathological waste as defined in section 77.12 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 77.13 60 cents per 150 pounds. 77.14 (e) For mixed municipal solid waste the tax is imposed upon 77.15 the difference between the market price and the tip fee at a 77.16 processing or disposal facility if the tip fee is less than the 77.17 market price and the political subdivision subsidizes the cost 77.18 of service at the facility. The political subdivision is liable 77.19 for the tax. 77.20 Sec. 14. Minnesota Statutes 1998, section 297H.06, 77.21 subdivision 2, is amended to read: 77.22 Subd. 2. [MATERIALS.] The tax is not imposed upon charges 77.23 to generators of mixed municipal solid waste or upon the volume 77.24 of non-mixed-municipal solid waste for waste management services 77.25 to manage the following materials: 77.26 (1) mixed municipal solid waste and non-mixed-municipal 77.27 solid waste generated outside of Minnesota; 77.28 (2) recyclable materials that are separated for recycling 77.29 by the generator, collected separately from other waste, and 77.30 recycled, to the extent the price of the service for handling 77.31 recyclable material is separately itemized; 77.32 (3) recyclable non-mixed-municipal solid waste that is 77.33 separated for recycling by the generator, collected separately 77.34 from other waste, delivered to a waste facility for the purpose 77.35 of recycling, and recycled; 77.36 (4) industrial waste, when it is transported to a facility 78.1 owned and operated by the same person that generated it; 78.2 (5) mixed municipal solid waste from a recycling facility 78.3 that separates or processes recyclable materials and reduces the 78.4 volume of the waste by at least 85 percent, provided that the 78.5 exempted waste is managed separately from other waste; 78.6 (6) recyclable materials that are separated from mixed 78.7 municipal solid waste by the generator, collected and delivered 78.8 to a waste facility that recycles at least 85 percent of its 78.9 waste, and are collected with mixed municipal solid waste that 78.10 is segregated in leakproof bags, provided that the mixed 78.11 municipal solid waste does not exceed five percent of the total 78.12 weight of the materials delivered to the facility and is 78.13 ultimately delivered to a waste facility identified as a 78.14 preferred waste management facility in county solid waste plans 78.15 under section 115A.46; 78.16 (7) through December 31, 2002, source-separated compostable 78.17 waste, if the waste is delivered to a facility exempted as 78.18 described in this clause. To initially qualify for an 78.19 exemption, a facility must apply for an exemption in its 78.20 application for a new or amended solid waste permit to the 78.21 pollution control agency. The first time a facility applies to 78.22 the agency it must certify in its application that it will 78.23 comply with the criteria in items (i) to (v) and the 78.24 commissioner of the agency shall so certify to the commissioner 78.25 of revenue who must grant the exemption. For each subsequent 78.26 calendar year, by October 1 of the preceding year, the facility 78.27 must apply to the agency for certification to renew its 78.28 exemption for the following year. The application must be filed 78.29 according to the procedures of, and contain the information 78.30 required by, the agency. The commissioner of revenue shall 78.31 grant the exemption if the commissioner of the pollution control 78.32 agency finds and certifies to the commissioner of revenue that 78.33 based on an evaluation of the composition of incoming waste and 78.34 residuals and the quality and use of the product: 78.35 (i) generators separate materials at the source; 78.36 (ii) the separation is performed in a manner appropriate to 79.1 the technology specific to the facility that: 79.2 (A) maximizes the quality of the product; 79.3 (B) minimizes the toxicity and quantity of residuals; and 79.4 (C) provides an opportunity for significant improvement in 79.5 the environmental efficiency of the operation; 79.6 (iii) the operator of the facility educates generators, in 79.7 coordination with each county using the facility, about 79.8 separating the waste to maximize the quality of the waste stream 79.9 for technology specific to the facility; 79.10 (iv) process residuals do not exceed 15 percent of the 79.11 weight of the total material delivered to the facility; and 79.12 (v) the final product is accepted for use;and79.13 (8) waste and waste by-products for which the tax has been 79.14 paid; and 79.15 (9) daily cover for landfills that has been approved in 79.16 writing by the Minnesota pollution control agency. 79.17 Sec. 15. [EFFECTIVE DATES.] 79.18 Sections 1 to 3 are effective for documents executed, 79.19 recorded, or registered after June 30, 1999. 79.20 Section 4 is effective retroactively for sales made after 79.21 June 30, 1998. Section 5 is effective retroactively for sales 79.22 made after January 31, 1999. Section 6 is effective August 1, 79.23 1999. Sections 7, 9, and 10 are effective July 1, 1999. 79.24 Section 8 is effective for taxes first becoming due on or after 79.25 August 1, 1999. Sections 11 and 14 are effective the day 79.26 following final enactment. Section 12 is effective for refund 79.27 claims filed on or after July 1, 1999. Section 13 is effective 79.28 for services provided on or after July 1, 1999. 79.29 ARTICLE 5 79.30 MINNESOTACARE 79.31 Section 1. Minnesota Statutes 1998, section 60A.15, 79.32 subdivision 1, is amended to read: 79.33 Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 79.34 before April 1, June 1, and December 1 of each year, every 79.35 domestic and foreign company, including town and farmers' mutual 79.36 insurance companies, domestic mutual insurance companies, marine 80.1 insurance companies, health maintenance organizations, community 80.2 integrated service networks, and nonprofit health service plan 80.3 corporations, shall pay to the commissioner of revenue 80.4 installments equal to one-third of the insurer's total estimated 80.5 tax for the current year. Except as provided in paragraphs (d), 80.6 (e), (h), and (i), installments must be based on a sum equal to 80.7 two percent of the premiums described in paragraph (b). 80.8 (b) Installments under paragraph (a), (d), or (e) are 80.9 percentages of gross premiums less return premiums on all direct 80.10 business received by the insurer in this state, or by its agents 80.11 for it, in cash or otherwise, during such year. 80.12 (c) Failure of a company to make payments of at least 80.13 one-third of either (1) the total tax paid during the previous 80.14 calendar year or (2) 80 percent of the actual tax for the 80.15 current calendar year shall subject the company to the penalty 80.16 and interest provided in this section, unless the total tax for 80.17 the current tax year is $500 or less. 80.18 (d) For health maintenance organizations, nonprofit health 80.19 service plan corporations, and community integrated service 80.20 networks, the installments must be based on an amount determined 80.21 under paragraph (h) or (i). 80.22 (e) For purposes of computing installments for town and 80.23 farmers' mutual insurance companies and for mutual property 80.24 casualty companies with total assets on December 31, 1989, of 80.25 $1,600,000,000 or less, the following rates apply: 80.26 (1) for all life insurance, two percent; 80.27 (2) for town and farmers' mutual insurance companies and 80.28 for mutual property and casualty companies with total assets of 80.29 $5,000,000 or less, on all other coverages, one percent; and 80.30 (3) for mutual property and casualty companies with total 80.31 assets on December 31, 1989, of $1,600,000,000 or less, on all 80.32 other coverages, 1.26 percent. 80.33 (f) If the aggregate amount of premium tax payments under 80.34 this section and the fire marshal tax payments under section 80.35 299F.21 made during a calendar year is equal to or exceeds 80.36 $120,000, all tax payments in the subsequent calendar year must 81.1 be paid by means of a funds transfer as defined in section 81.2 336.4A-104, paragraph (a). The funds transfer payment date, as 81.3 defined in section 336.4A-401, must be on or before the date the 81.4 payment is due. If the date the payment is due is not a funds 81.5 transfer business day, as defined in section 336.4A-105, 81.6 paragraph (a), clause (4), the payment date must be on or before 81.7 the funds transfer business day next following the date the 81.8 payment is due. 81.9 (g) Premiums under medical assistance, general assistance 81.10 medical care, the MinnesotaCare program, and the Minnesota 81.11 comprehensive health insurance plan and all payments, revenues, 81.12 and reimbursements received from the federal government for 81.13 Medicare-related coverage as defined in section 62A.31, 81.14 subdivision 3, paragraph (e), are not subject to tax under this 81.15 section. 81.16 (h) For calendar years 1997, 1998,and1999, 2000, and 81.17 2001, the installments for health maintenance organizations, 81.18 community integrated service networks, and nonprofit health 81.19 service plan corporations must be based on an amount equal to 81.20 one percent of premiums described under paragraph (b).Health81.21maintenance organizations, community integrated service81.22networks, and nonprofit health service plan corporations that81.23have met the cost containment goals established under section81.2462J.04 in the individual and small employer market for calendar81.25year 1996 are exempt from payment of the tax imposed under this81.26section for premiums paid after March 30, 1997, and before April81.271, 1998.Health maintenance organizations, community integrated 81.28 service networks, and nonprofit health service plan corporations 81.29 that have met the cost containment goals established under 81.30 section 62J.04 in the individual and small employer market for 81.31 calendar year 1997 are exempt from payment of the tax imposed 81.32 under this section for premiums paid after March 30, 1998, and 81.33 before April 1, 1999. Health maintenance organizations, 81.34 community integrated service networks, and nonprofit health 81.35 service plan corporations that have met the cost containment 81.36 goals established under section 62J.04 in the individual and 82.1 small employer market for the previous calendar year1998are 82.2 exempt from payment of the tax imposed under this section for 82.3 premiums paidafter March 30, 1999, and before January 1,82.42000during the calendar year. 82.5 (i) For calendar years after19992001, the commissioner of 82.6 finance shall determine the balance of the health care access 82.7 fund on September 1 of each year beginning September 1,199982.8 2001. If the commissioner determines that there is no 82.9 structural deficit for the next fiscal year, no tax shall be 82.10 imposed under paragraph (d) for the following calendar year. If 82.11 the commissioner determines that there will be a structural 82.12 deficit in the fund for the following fiscal year, then the 82.13 commissioner, in consultation with the commissioner of revenue, 82.14 shall determine the amount needed to eliminate the structural 82.15 deficit and a tax shall be imposed under paragraph (d) for the 82.16 following calendar year. The commissioner shall determine the 82.17 rate of the tax as either one-quarter of one percent, one-half 82.18 of one percent, three-quarters of one percent, or one percent of 82.19 premiums described in paragraph (b), whichever is the lowest of 82.20 those rates that the commissioner determines will produce 82.21 sufficient revenue to eliminate the projected structural 82.22 deficit. The commissioner of finance shall publish in the State 82.23 Register by October 1 of each year the amount of tax to be 82.24 imposed for the following calendar year. In determining the 82.25 structural balance of the health care access fund for fiscal 82.26 years 2000 and 2001, the commissioner shall disregard the 82.27 transfer amount from the health care access fund to the general 82.28 fund for expenditures associated with the services provided to 82.29 pregnant women and children under the age of two enrolled in the 82.30 MinnesotaCare program. 82.31 (j) In approving the premium rates as required in sections 82.32 62L.08, subdivision 8, and 62A.65, subdivision 3, the 82.33 commissioners of health and commerce shall ensure that any 82.34 exemption from the tax as described in paragraphs (h) and (i) is 82.35 reflected in the premium rate. 82.36 Sec. 2. Minnesota Statutes 1998, section 62J.041, 83.1 subdivision 1, is amended to read: 83.2 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 83.3 section, the following definitions apply. 83.4 (b) "Health plan company" has the definition provided in 83.5 section 62Q.01. 83.6 (c) "Total expenditures" means incurred claims or 83.7 expenditures on health care services, administrative expenses, 83.8 charitable contributions, and all other payments made by health 83.9 plan companies out of premium revenues. 83.10 (d) "Net expenditures" means total expenditures minus 83.11 exempted taxes and assessments and payments or allocations made 83.12 to establish or maintain reserves. 83.13 (e) "Exempted taxes and assessments" means direct payments 83.14 for taxes to government agencies, contributions to the Minnesota 83.15 comprehensive health association, the medical assistance 83.16 provider's surcharge under section 256.9657, the MinnesotaCare 83.17 provider tax under Minnesota Statutes 1998, section 295.52, 83.18 assessments by the health coverage reinsurance association, 83.19 assessments by the Minnesota life and health insurance guaranty 83.20 association, assessments by the Minnesota risk adjustment 83.21 association, and any new assessments imposed by federal or state 83.22 law. 83.23 (f) "Consumer cost-sharing or subscriber liability" means 83.24 enrollee coinsurance, copayment, deductible payments, and 83.25 amounts in excess of benefit plan maximums. 83.26 Sec. 3. Minnesota Statutes 1998, section 62Q.095, 83.27 subdivision 6, is amended to read: 83.28 Subd. 6. [EXEMPTION.] A health plan company, to the extent 83.29 that it operates as a staff model health plan companyas defined83.30in section 295.50, subdivision 12b,by employing allied 83.31 independent health care providers to deliver health care 83.32 services to enrollees, is exempt from this section. For 83.33 purposes of this subdivision, "staff model health plan company" 83.34 means a health plan company as defined in section 62Q.01, 83.35 subdivision 4, which employs one or more types of health care 83.36 providers to deliver health care services to the health plan 84.1 company's enrollees. 84.2 Sec. 4. [62Q.68] [PASS-THROUGH OF SAVINGS TO CONSUMERS.] 84.3 Subdivision 1. [REDUCED PREMIUMS.] All health plan 84.4 companies shall pass on to consumers, in the form of reduced 84.5 premium rates, all savings resulting from the phase-out and 84.6 repeal of the MinnesotaCare provider taxes imposed under 84.7 Minnesota Statutes 1998, section 295.52, and the resulting 84.8 reduction in the transfer of additional expenses generated by 84.9 Minnesota Statutes 1998, section 295.52, obligations to third 84.10 party contracts under Minnesota Statutes 1998, section 295.582. 84.11 Subd. 2. [DOCUMENTING COMPLIANCE.] Each health plan 84.12 company shall include with its annual renewal for certification 84.13 of authority or licensure documentation indicating compliance 84.14 with subdivision 1. 84.15 Subd. 3. [ENFORCEMENT.] If the appropriate commissioner 84.16 finds that a health plan company has not complied with 84.17 subdivision 1, the commissioner may take enforcement action 84.18 against that health plan company. The commissioner may, by 84.19 order, fine or censure the health plan company or revoke or 84.20 suspend the certificate of authority or license of the health 84.21 plan company to do business in this state if the commissioner 84.22 finds that the health plan company has not complied with this 84.23 section. The health plan company may appeal the commissioner's 84.24 order through a contested case hearing in accordance with 84.25 chapter 14. 84.26 Sec. 5. Minnesota Statutes 1998, section 214.16, 84.27 subdivision 2, is amended to read: 84.28 Subd. 2. [BOARD COOPERATION REQUIRED.] The board shall 84.29 assist the commissioner of health in data collection activities 84.30 required under Laws 1992, chapter 549, article 7, and shall84.31assist the commissioner of revenue in activities related to84.32collection of the health care provider tax required under Laws84.331992, chapter 549, article 9. Upon the request of the 84.34 commissioneror the commissioner of revenue, the board shall 84.35 make available names and addresses of current licensees and 84.36 provide other information or assistance as needed. 85.1 Sec. 6. Minnesota Statutes 1998, section 214.16, 85.2 subdivision 3, is amended to read: 85.3 Subd. 3. [GROUNDS FOR DISCIPLINARY ACTION.] The board 85.4 shall take disciplinary action, which may include license 85.5 revocation, against a regulated person for: 85.6 (1) intentional failure to provide the commissioner of 85.7 health with the data required under chapter 62J; 85.8(2) intentional failure to provide the commissioner of85.9revenue with data on gross revenue and other information85.10required for the commissioner to implement sections 295.50 to85.11295.58;85.12(3) intentional failure to pay the health care provider tax85.13required under section 295.52;and 85.14(4)(2) entering into a contract or arrangement that is 85.15 prohibited under sections 62J.70 to 62J.73. 85.16 Sec. 7. [256L.021] [USE OF TOBACCO SETTLEMENT PROCEEDS.] 85.17 (a) The commissioner of finance for fiscal years 2000 and 85.18 2001 shall deposit the annual payments due under the terms of 85.19 the tobacco settlement into the health care access fund 85.20 established under section 16A.724. 85.21 (b) If the commissioner of finance determines that there 85.22 will be a sufficient surplus to permit the tobacco settlement 85.23 annual payments to be deposited in the health care access fund 85.24 under section 16A.152, subdivision 2a, for fiscal years 2002 and 85.25 2003, the commissioner of finance shall deposit all tobacco 85.26 settlement annual payments in the health care access fund. 85.27 (c) For purposes of this section, "tobacco settlement" 85.28 means the consent judgment entered in the case of State of 85.29 Minnesota v. Philip Morris Inc. et al. in Minnesota district 85.30 court for the second judicial district, Ramsey county (court 85.31 file number C1-94-8565). 85.32 Sec. 8. [256L.022] [MINNESOTACARE PROGRAM FINANCIAL 85.33 MANAGEMENT.] 85.34 Subdivision 1. [FORECASTING FUNDS.] The MinnesotaCare 85.35 program is not an entitlement. The commissioner of human 85.36 services shall not expend more funds than the appropriations 86.1 made available by the legislature. Appropriations made 86.2 available must include the state-appropriated funds and federal 86.3 funds specified for this purpose and other available funds 86.4 transferred from other accounts as allowed by Minnesota law. 86.5 Regardless of this limitation on expenditures, the total 86.6 projected costs of this program must be forecasted and 86.7 recognized in the fund balance. 86.8 Subd. 2. [DETERMINATION BY COMMISSIONER.] As part of each 86.9 state revenue and expenditure forecast, the commissioner shall 86.10 make an assessment of expected MinnesotaCare program 86.11 expenditures for the remainder of the current biennium and for 86.12 the following biennium. If the commissioner determines that 86.13 projected MinnesotaCare expenditures during a biennium will 86.14 exceed the total of: (1) the funds projected to be available in 86.15 the health care access fund; and (2) projected annual payments 86.16 from the tobacco settlement required to be deposited in the 86.17 health care access fund under section 256L.021 for that 86.18 biennium, the commissioner of human services and the 86.19 commissioner of finance shall implement subdivision 1, effective 86.20 on the first day of the biennium for which the commissioner of 86.21 human services makes the determination. 86.22 Subd. 3. [CONTINGENT APPLICABILITY.] This section is 86.23 effective only if the commissioner of human services makes a 86.24 determination under subdivision 2 that projected MinnesotaCare 86.25 program expenditures will exceed available funding during a 86.26 biennium. If the commissioner makes this determination, this 86.27 section is effective on the first day of the biennium for which 86.28 the commissioner makes the determination. 86.29 Sec. 9. Minnesota Statutes 1998, section 270B.01, 86.30 subdivision 8, is amended to read: 86.31 Subd. 8. [MINNESOTA TAX LAWS.] For purposes of this 86.32 chapter only, unless expressly stated otherwise, "Minnesota tax 86.33 laws" means the taxes, refunds, and fees administered by or paid 86.34 to the commissioner under chapters 115B (except taxes imposed 86.35 under sections 115B.21 to 115B.24), 289A (except taxes imposed 86.36 under sections 298.01, 298.015, and 298.24), 290, 290A, 291, 87.1 297A, and 297Hand sections 295.50 to 295.59, or any similar 87.2 Indian tribal tax administered by the commissioner pursuant to 87.3 any tax agreement between the state and the Indian tribal 87.4 government, and includes any laws for the assessment, 87.5 collection, and enforcement of those taxes, refunds, and fees. 87.6 Sec. 10. Minnesota Statutes 1998, section 270B.14, 87.7 subdivision 1, is amended to read: 87.8 Subdivision 1. [DISCLOSURE TO COMMISSIONER OF HUMAN 87.9 SERVICES.] (a) On the request of the commissioner of human 87.10 services, the commissioner shall disclose return information 87.11 regarding taxes imposed by chapter 290, and claims for refunds 87.12 under chapter 290A, to the extent provided in paragraph (b) and 87.13 for the purposes set forth in paragraph (c). 87.14 (b) Data that may be disclosed are limited to data relating 87.15 to the identity, whereabouts, employment, income, and property 87.16 of a person owing or alleged to be owing an obligation of child 87.17 support. 87.18 (c) The commissioner of human services may request data 87.19 only for the purposes of carrying out the child support 87.20 enforcement program and to assist in the location of parents who 87.21 have, or appear to have, deserted their children. Data received 87.22 may be used only as set forth in section 256.978. 87.23 (d) The commissioner shall provide the records and 87.24 information necessary to administer the supplemental housing 87.25 allowance to the commissioner of human services. 87.26 (e) At the request of the commissioner of human services, 87.27 the commissioner of revenue shall electronically match the 87.28 social security numbers and names of participants in the 87.29 telephone assistance plan operated under sections 237.69 to 87.30 237.711, with those of property tax refund filers, and determine 87.31 whether each participant's household income is within the 87.32 eligibility standards for the telephone assistance plan. 87.33 (f) The commissioner may provide records and information 87.34 collected under Minnesota Statutes 1998, sections 295.50 to 87.35 295.59, to the commissioner of human services for purposes of 87.36 the Medicaid Voluntary Contribution and Provider-Specific Tax 88.1 Amendments of 1991, Public Law Number 102-234. Upon the written 88.2 agreement by the United States Department of Health and Human 88.3 Services to maintain the confidentiality of the data, the 88.4 commissioner may provide records and information collected under 88.5 Minnesota Statutes 1998, sections 295.50 to 295.59, to the 88.6 Health Care Financing Administration section of the United 88.7 States Department of Health and Human Services for purposes of 88.8 meeting federal reporting requirements. 88.9 (g) The commissioner may provide records and information to 88.10 the commissioner of human services as necessary to administer 88.11 the early refund of refundable tax credits. 88.12 (h) The commissioner may disclose information to the 88.13 commissioner of human services necessary to verify income for 88.14 eligibility and premium payment under the MinnesotaCare program, 88.15 under section 256L.05, subdivision 2. 88.16 Sec. 11. Minnesota Statutes 1998, section 295.50, 88.17 subdivision 4, is amended to read: 88.18 Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care 88.19 provider" means: 88.20 (1) a person whose health care occupation is regulated or 88.21 required to be regulated by the state of Minnesota furnishing 88.22 any or all of the following goods or services directly to a 88.23 patient or consumer: medical, surgical, optical, visual, 88.24 dental, hearing, nursing services, drugs, laboratory, diagnostic 88.25 or therapeutic services; 88.26 (2) a person who provides goods and services not listed in 88.27 clause (1) that qualify for reimbursement under the medical 88.28 assistance program provided under chapter 256B; 88.29 (3) a staff model health plan company; 88.30 (4) an ambulance service required to be licensed; or 88.31 (5) a person who sells or repairs hearing aids and related 88.32 equipment or prescription eyewear. 88.33 (b) Health care provider does not include: (1) hospitals; 88.34 medical supplies distributors, except as specified under 88.35 paragraph (a), clause (5); nursing homes licensed under chapter 88.36 144A or licensed in any other jurisdiction; pharmacies; surgical 89.1 centers; bus and taxicab transportation, or any other providers 89.2 of transportation services other than ambulance services 89.3 required to be licensed; supervised living facilities for 89.4 persons with mental retardation or related conditions, licensed 89.5 under Minnesota Rules, parts 4665.0100 to 4665.9900; residential 89.6 care homes licensed under chapter 144B; board and lodging 89.7 establishments providing only custodial services that are 89.8 licensed under chapter 157 and registered under section 157.17 89.9 to provide supportive services or health supervision services; 89.10 adult foster homes as defined in Minnesota Rules, part 89.11 9555.5105; day training and habilitation services for adults 89.12 with mental retardation and related conditions as defined in 89.13 section 252.41, subdivision 3; and boarding care homes, as 89.14 defined in Minnesota Rules, part 4655.0100.; 89.15(c) For purposes of this subdivision, "directly to a89.16patient or consumer" includes goods and services provided in89.17connection with independent medical examinations under section89.1865B.56 or other examinations for purposes of litigation or89.19insurance claims.89.20 (2) home health agencies as defined in Minnesota Rules, 89.21 part 9505.0175, subpart 15; a person providing personal care 89.22 services and supervision of personal care services as defined in 89.23 Minnesota Rules, part 9505.0335; a person providing private duty 89.24 nursing services as defined in Minnesota Rules, part 9505.0360; 89.25 and home care providers required to be licensed under chapter 89.26 144A; 89.27 (3) a person who employs health care providers solely for 89.28 the purpose of providing patient services to its employees; and 89.29 (4) an educational institution that employs health care 89.30 providers solely for the purpose of providing patient services 89.31 to its students if the institution does not receive fee for 89.32 service payments or payments for extended coverage. 89.33 Sec. 12. Minnesota Statutes 1998, section 295.52, 89.34 subdivision 7, is amended to read: 89.35 Subd. 7. [TAX REDUCTION.] (a) Notwithstanding subdivisions 89.36 1, 1a, 2, 3, and 4, the tax imposed under this section equals 90.1 for calendaryearsyear: 90.2 (1) 1998and, 1999shall be equal to, and 2000, 1.5 90.3 percent of the gross revenues received on or after January 1, 90.4 1998, and before January 1,2000. The commissioner shall extend90.5the reduced tax rate of 1.5 percent for gross revenues received90.6on or after January 1, 2000, and before January 1, 2002, if the90.7commissioner of finance determines that the health care access90.8fund structural balance projected for fiscal year 2001 will90.9remain positive, prior to any increase of the one percent90.10premium tax under section 60A.15, subdivision 1, paragraph (h),90.11and prior to any tax expenditures related to the increase in the90.12maximum tax credit for research expenses under section 295.53,90.13subdivision 4a, as amended by Laws 1997, chapter 2252001; 90.14 (2) 2001, 0.5 percent of the gross revenues received on or 90.15 after January 1, 2001, and before January 1, 2002; and 90.16 (3) 2002 and later for gross revenues received on or after 90.17 January 1, 2002, zero. 90.18 (b) The rates under paragraph (a) must be reduced as 90.19 provided in section 16A.152, subdivision 2a, if the commissioner 90.20 of finance determines that $50,000,000 or more of additional 90.21 annual tobacco settlement monies will be deposited in the health 90.22 care access fund in the 2002-2003 biennium. 90.23 Sec. 13. Minnesota Statutes 1998, section 295.53, 90.24 subdivision 1, is amended to read: 90.25 Subdivision 1. [EXEMPTIONS.] (a) The following payments 90.26 are excluded from the gross revenues subject to the hospital, 90.27 surgical center, or health care provider taxes under sections 90.28 295.50 to 295.57: 90.29 (1) payments received for services provided under the 90.30 Medicare program, including payments received from the 90.31 government, and organizations governed by sections 1833 and 1876 90.32 of title XVIII of the federal Social Security Act, United States 90.33 Code, title 42, section 1395, and enrollee deductibles, 90.34 coinsurance, and copayments, whether paid by the Medicare 90.35 enrollee or by a Medicare supplemental coverage as defined in 90.36 section 62A.011, subdivision 3, clause (10). Payments for 91.1 services not covered by Medicare are taxable; 91.2 (2) medical assistance payments including payments received 91.3 directly from the government or from a prepaid plan; 91.4 (3) payments received for home health care services; 91.5 (4) payments received from hospitals or surgical centers 91.6 for goods and services on which liability for tax is imposed 91.7 under section 295.52 or the source of funds for the payment is 91.8 exempt under clause (1), (2), (7), (8),or(10), or (13); 91.9 (5) payments received from health care providers for goods 91.10 and services on which liability for tax is imposed under this 91.11 chapter or the source of funds for the payment is exempt under 91.12 clause (1), (2), (7), (8),or(10), or (13); 91.13 (6) amounts paid for legend drugs, other than nutritional 91.14 products, to a wholesale drug distributor who is subject to tax 91.15 under section 295.52, subdivision 3, reduced by reimbursements 91.16 received for legend drugs under clauses (1), (2), (7), and (8); 91.17 (7) payments received under the general assistance medical 91.18 care program including payments received directly from the 91.19 government or from a prepaid plan; 91.20 (8) payments received for providing services under the 91.21 MinnesotaCare program including payments received directly from 91.22 the government or from a prepaid plan and enrollee deductibles, 91.23 coinsurance, and copayments. For purposes of this clause, 91.24 coinsurance means the portion of payment that the enrollee is 91.25 required to pay for the covered service; 91.26 (9) payments received by a health care provider or the 91.27 wholly owned subsidiary of a health care provider for care 91.28 provided outside Minnesotato a patient who is not domiciled in91.29Minnesota; 91.30 (10) payments received from the chemical dependency fund 91.31 under chapter 254B; 91.32 (11) payments received in the nature of charitable 91.33 donations that are not designated for providing patient services 91.34 to a specific individual or group; 91.35 (12) payments received for providing patient services 91.36 incurred through a formal program of health care research 92.1 conducted in conformity with federal regulations governing 92.2 research on human subjects. Payments received from patients or 92.3 from other persons paying on behalf of the patients are subject 92.4 to tax; 92.5 (13) payments received from any governmental agency for 92.6 services benefiting the public, not including payments made by 92.7 the government in its capacity as an employer or insurer; 92.8 (14) payments received for services provided by community 92.9 residential mental health facilities licensed under Minnesota 92.10 Rules, parts 9520.0500 to 9520.0690, community support programs 92.11 and family community support programs approved under Minnesota 92.12 Rules, parts 9535.1700 to 9535.1760, and community mental health 92.13 centers as defined in section 245.62, subdivision 2; 92.14 (15) government payments received by a regional treatment 92.15 center; 92.16 (16) payments received for hospice care services; 92.17 (17) payments received by a health care provider for 92.18 hearing aids and related equipment or prescription eyewear 92.19 delivered outside of Minnesota; 92.20 (18) payments received bya post-secondaryan educational 92.21 institution from student tuition, student activity fees, health 92.22 care service fees, government appropriations, donations, or 92.23 grants. Fee for service payments and payments for extended 92.24 coverage are taxable;and92.25 (19) payments received for services provided by: assisted 92.26 living programs and congregate housing programs; 92.27 (20) payments received from nursing homes licensed under 92.28 chapter 144A for services provided to a nursing home; and 92.29 (21) payments received for examinations for purposes of 92.30 utilization reviews, insurance claims or eligibility, 92.31 litigation, and employment, including reviews of medical records 92.32 for those purposes. 92.33 (b) Payments received by wholesale drug distributors for 92.34 legend drugs sold directly to veterinarians or veterinary bulk 92.35 purchasing organizations are excluded from the gross revenues 92.36 subject to the wholesale drug distributor tax under sections 93.1 295.50 to 295.59. 93.2 Sec. 14. Minnesota Statutes 1998, section 295.55, 93.3 subdivision 2, is amended to read: 93.4 Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 93.5 Each hospital or surgical center must make estimated payments of 93.6 the taxes for the calendar year in monthly installments to the 93.7 commissioner within 15 days after the end of the month. 93.8 (b) Estimated tax payments are not required of hospitals or 93.9 surgical centers if: (1) the tax for the current calendar year 93.10 is less than $500; or (2) the tax for the previous calendar year 93.11 is less than $500, if the taxpayer had a tax liability and was 93.12 doing business the entire year; or (3) if a hospital has been 93.13 allowed a grant under section 144.1484, subdivision 2, for the 93.14 year. 93.15 (c) Underpayment of estimated installments bear interest at 93.16 the rate specified in section 270.75, from the due date of the 93.17 payment until paid or until the due date of the annual returnat93.18the rate specified in section 270.75whichever comes first. An 93.19 underpayment of an estimated installment is the difference 93.20 between the amount paid and the lesser of (1) 90 percent of 93.21 one-twelfth of the tax for the calendar year or (2) one-twelfth 93.22 of the total tax for theactual gross revenues received during93.23the monthprevious calendar year if the taxpayer had a tax 93.24 liability and was doing business the entire year. 93.25 Sec. 15. Minnesota Statutes 1998, section 295.55, 93.26 subdivision 3, is amended to read: 93.27 Subd. 3. [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each 93.28 taxpayer, other than a hospital or surgical center, must make 93.29 estimated payments of the taxes for the calendar year in 93.30 quarterly installments to the commissioner by April 15, July 15, 93.31 October 15, and January 15 of the following calendar year. 93.32 (b) Estimated tax payments are not required if: (1) the 93.33 tax for the current calendar year is less than $500; or (2) the 93.34 tax for the previous calendar year is less than $500, if the 93.35 taxpayer had a tax liability and was doing business the entire 93.36 year. 94.1 (c) Underpayment of estimated installments bear interest at 94.2 the rate specified in section 270.75, from the due date of the 94.3 payment until paid or until the due date of the annual returnat94.4the rate specified in section 270.75whichever comes first. An 94.5 underpayment of an estimated installment is the difference 94.6 between the amount paid and the lesser of (1) 90 percent of 94.7 one-quarter of the tax for the calendar year or (2) one-quarter 94.8 of the total tax for theactual gross revenues received during94.9the quarterprevious calendar year if the taxpayer had a tax 94.10 liability and was doing business the entire year. 94.11 Sec. 16. [REPEALER.] 94.12 (a) Minnesota Statutes 1998, sections 13.99, subdivision 94.13 86b; 144.1484, subdivision 2; 295.50; 295.51; 295.52; 295.53; 94.14 295.54; 295.55; 295.56; 295.57; 295.58; 295.582; and 295.59, are 94.15 repealed effective January 1, 2002. 94.16 (b) Minnesota Statutes 1998, sections 16A.76; and 256L.02, 94.17 subdivision 3, are repealed effective January 1, 2000. 94.18 Sec. 17. [CONTINGENT REPEALER; HEALTH CARE ACCESS FUND.] 94.19 Subdivision 1. [REPEALER.] Minnesota Statutes 1998, 94.20 section 16A.724, is repealed, effective as provided under 94.21 subdivision 3. 94.22 Subd. 2. [TRANSFER TO GENERAL FUND.] Upon repeal of the 94.23 health care access fund under subdivision 1, the commissioner of 94.24 finance shall transfer any funds in the health care access fund 94.25 to the general fund and the health care access fund is combined 94.26 with and becomes part of the general fund. 94.27 Subd. 3. [CONTINGENT EFFECTIVE DATE.] This section is 94.28 effective only if the commissioner of human services makes a 94.29 determination under Minnesota Statutes, section 256L.022, that 94.30 projected MinnesotaCare program expenditures will exceed 94.31 available funding during a biennium. If the commissioner makes 94.32 this determination, this section is effective on the first day 94.33 of the biennium for which the commissioner makes the 94.34 determination. 94.35 Sec. 18. [EFFECTIVE DATE.] 94.36 Sections 2, 3, 5, 6, 9, and 10 are effective January 1, 95.1 2002. 95.2 Section 4 is effective January 1, 2000, and applies to 95.3 premium rates for health plans issued or renewed on or after 95.4 that date. 95.5 The provisions of section 11, striking clause (c), and 95.6 section 13, clause (21), are effective for services provided 95.7 after December 31, 1998. The rest of section 11, the rest of 95.8 section 13 and sections 14 and 15 are effective for payments 95.9 received on or after January 1, 2000. 95.10 Section 16, paragraph (a), is effective January 1, 2002, 95.11 and applies to tax years beginning on or after that date. 95.12 ARTICLE 6 95.13 PROPERTY TAXES 95.14 Section 1. Minnesota Statutes 1998, section 16A.1521, is 95.15 amended to read: 95.16 16A.1521 [PROPERTY TAX REFORM ACCOUNT.] 95.17 Subdivision 1. [ESTABLISHMENT; USES OF FUNDS.] (a) A 95.18 property tax reform account is established in the general fund. 95.19 (b) Amounts in the account are available for and may only 95.20 be spent to reform the property tax system by: 95.21 (1) reducing the class rates to the target rates specified 95.22 insection 273.13,subdivision322, or to further reduce the 95.23 ratio of the highest class rate to the lowest class rate; 95.24 (2) increasing state education aids to reduce property 95.25 taxes; 95.26 (3) increasing the state share of education funding to 70 95.27 percent; 95.28 (4) increasing the education homestead credit; or 95.29 (5) increasing the property tax refund. 95.30As provided by section 273.13, subdivision 32, the governor95.31shall recommend to the legislature usesThe primary use of money 95.32 in the account is to compress class rate ratios, while 95.33 mitigating the shifting of relative property tax burdens from 95.34 one class to another through the mechanisms listed in clauses 95.35 (2) through (5). 95.36 (c) The balance in the account does not cancel and remains 96.1 in the account until appropriated for property tax reform. 96.2 Investment earnings on the account are credited to the account. 96.3 Subd. 2. [TARGET CLASS RATES.] The following class rates 96.4 are established as state property tax policy goals: 96.5 (1) three percent for the upper tier of 96.6 commercial-industrial property; 96.7 (2) two percent for apartment property; and 96.8 (3) 1.5 percent for the upper tier of other residential 96.9 property. 96.10 Sec. 2. Minnesota Statutes 1998, section 271.01, 96.11 subdivision 5, is amended to read: 96.12 Subd. 5. [JURISDICTION.] The tax court shall have 96.13 statewide jurisdiction. Except for an appeal to the supreme 96.14 court or any other appeal allowed under this subdivision, the 96.15 tax court shall be the sole, exclusive, and final authority for 96.16 the hearing and determination of all questions of law and fact 96.17 arising under the tax laws of the state, as defined in this 96.18 subdivision, in those cases that have been appealed to the tax 96.19 court and in any case that has been transferred by the district 96.20 court to the tax court. The tax court shall have no 96.21 jurisdiction in any case that does not arise under the tax laws 96.22 of the state or in any criminal case or in any case determining 96.23 or granting title to real property or in any case that is under 96.24 the probate jurisdiction of the district court. The small 96.25 claims division of the tax court shall have no jurisdiction in 96.26 any case dealing with property valuation or assessment for 96.27 property tax purposes until the taxpayer has appealed the 96.28 valuation or assessment to the county board of equalization, and 96.29 in those towns and cities which have not transferred their 96.30 duties to the county, the town or city board of equalization, 96.31 except for: (i) those taxpayers whose original assessments are 96.32 determined by the commissioner of revenue; and (ii) those 96.33 taxpayers appealing a denial of a current year application for 96.34 the homestead classification for their property and the denial 96.35 was not reflected on a valuation notice issued in the year. The 96.36 tax court shall have no jurisdiction in any case involving an 97.1 order of the state board of equalization unless a taxpayer 97.2 contests the valuation of property. Laws governing taxes, aids, 97.3 and related matters administered by the commissioner of revenue, 97.4 laws dealing with property valuation, assessment or taxation of 97.5 property for property tax purposes, and any other laws that 97.6 contain provisions authorizing review of taxes, aids, and 97.7 related matters by the tax court shall be considered tax laws of 97.8 this state subject to the jurisdiction of the tax court. This 97.9 subdivision shall not be construed to prevent an appeal, as 97.10 provided by law, to an administrative agency, board of 97.11 equalization, review under section 274.13, subdivision 1c, or to 97.12 the commissioner of revenue. Wherever used in this chapter, the 97.13 term commissioner shall mean the commissioner of revenue, unless 97.14 otherwise specified. 97.15 Sec. 3. Minnesota Statutes 1998, section 271.21, 97.16 subdivision 2, is amended to read: 97.17 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 97.18 the small claims division shall have jurisdiction only in the 97.19 following matters: 97.20 (a)incases involving valuation, assessment, or taxation 97.21 of real or personal property, if the taxpayer has satisfied the 97.22 requirements of section 271.01, subdivision 5, and: (i) the 97.23 issue is a denial of a current year application for the 97.24 homestead classification for the taxpayer's property and the 97.25 denial was not reflected on a valuation notice issued in the 97.26 year; or (ii) in the case of nonhomestead property, the 97.27 assessor's estimated market value is less than $100,000; or 97.28 (b) any other case concerning the tax laws as defined in 97.29 section 271.01, subdivision 5, in which the amount in 97.30 controversy does not exceed $5,000, including penalty and 97.31 interest. 97.32 Sec. 4. Minnesota Statutes 1998, section 272.02, 97.33 subdivision 1, is amended to read: 97.34 Subdivision 1. [EXEMPT PROPERTY DESCRIBED.] All property 97.35 described in this section to the extent herein limited shall be 97.36 exempt from taxation: 98.1 (1) All public burying grounds. 98.2 (2) All public schoolhouses. 98.3 (3) All public hospitals. 98.4 (4) All academies, colleges, and universities, and all 98.5 seminaries of learning. 98.6 (5) All churches, church property, and houses of worship. 98.7 (6) Institutions of purely public charity except parcels of 98.8 property containing structures and the structures described in 98.9 section 273.13, subdivision 25, paragraph (e), other than those 98.10 that qualify for exemption under clause (25). 98.11 (7) All public property exclusively used for any public 98.12 purpose. 98.13 (8) Except for the taxable personal property enumerated 98.14 below, all personal property and the property described in 98.15 section 272.03, subdivision 1, paragraphs (c) and (d), shall be 98.16 exempt. 98.17 The following personal property shall be taxable: 98.18 (a) personal property which is part of an electric 98.19 generating, transmission, or distribution system or a pipeline 98.20 system transporting or distributing water, gas, crude oil, or 98.21 petroleum products or mains and pipes used in the distribution 98.22 of steam or hot or chilled water for heating or cooling 98.23 buildings and structures; 98.24 (b) railroad docks and wharves which are part of the 98.25 operating property of a railroad company as defined in section 98.26 270.80; 98.27 (c) personal property defined in section 272.03, 98.28 subdivision 2, clause (3); 98.29 (d) leasehold or other personal property interests which 98.30 are taxed pursuant to section 272.01, subdivision 2; 273.124, 98.31 subdivision 7; or 273.19, subdivision 1; or any other law 98.32 providing the property is taxable as if the lessee or user were 98.33 the fee owner; 98.34 (e) manufactured homes and sectional structures, including 98.35 storage sheds, decks, and similar removable improvements 98.36 constructed on the site of a manufactured home, sectional 99.1 structure, park trailer or travel trailer as provided in section 99.2 273.125, subdivision 8, paragraph (f); and 99.3 (f) flight property as defined in section 270.071. 99.4 (9) Personal property used primarily for the abatement and 99.5 control of air, water, or land pollution to the extent that it 99.6 is so used, and real property which is used primarily for 99.7 abatement and control of air, water, or land pollution as part 99.8 of an agricultural operation, as a part of a centralized 99.9 treatment and recovery facility operating under a permit issued 99.10 by the Minnesota pollution control agency pursuant to chapters 99.11 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 99.12 and 7045.0020 to 7045.1260, as a wastewater treatment facility 99.13 and for the treatment, recovery, and stabilization of metals, 99.14 oils, chemicals, water, sludges, or inorganic materials from 99.15 hazardous industrial wastes, or as part of an electric 99.16 generation system. For purposes of this clause, personal 99.17 property includes ponderous machinery and equipment used in a 99.18 business or production activity that at common law is considered 99.19 real property. 99.20 Any taxpayer requesting exemption of all or a portion of 99.21 any real property or any equipment or device, or part thereof, 99.22 operated primarily for the control or abatement of air or water 99.23 pollution shall file an application with the commissioner of 99.24 revenue. The equipment or device shall meet standards, rules, 99.25 or criteria prescribed by the Minnesota pollution control 99.26 agency, and must be installed or operated in accordance with a 99.27 permit or order issued by that agency. The Minnesota pollution 99.28 control agency shall upon request of the commissioner furnish 99.29 information or advice to the commissioner. On determining that 99.30 property qualifies for exemption, the commissioner shall issue 99.31 an order exempting the property from taxation. The equipment or 99.32 device shall continue to be exempt from taxation as long as the 99.33 permit issued by the Minnesota pollution control agency remains 99.34 in effect. 99.35 (10) Wetlands. For purposes of this subdivision, 99.36 "wetlands" means: (i) land described in section 103G.005, 100.1 subdivision 15a; (ii) land which is mostly under water, produces 100.2 little if any income, and has no use except for wildlife or 100.3 water conservation purposes, provided it is preserved in its 100.4 natural condition and drainage of it would be legal, feasible, 100.5 and economically practical for the production of livestock, 100.6 dairy animals, poultry, fruit, vegetables, forage and grains, 100.7 except wild rice; or (iii) land in a wetland preservation area 100.8 under sections 103F.612 to 103F.616. "Wetlands" under items (i) 100.9 and (ii) include adjacent land which is not suitable for 100.10 agricultural purposes due to the presence of the wetlands, but 100.11 do not include woody swamps containing shrubs or trees, wet 100.12 meadows, meandered water, streams, rivers, and floodplains or 100.13 river bottoms. Exemption of wetlands from taxation pursuant to 100.14 this section shall not grant the public any additional or 100.15 greater right of access to the wetlands or diminish any right of 100.16 ownership to the wetlands. 100.17 (11) Native prairie. The commissioner of the department of 100.18 natural resources shall determine lands in the state which are 100.19 native prairie and shall notify the county assessor of each 100.20 county in which the lands are located. Pasture land used for 100.21 livestock grazing purposes shall not be considered native 100.22 prairie for the purposes of this clause. Upon receipt of an 100.23 application for the exemption provided in this clause for lands 100.24 for which the assessor has no determination from the 100.25 commissioner of natural resources, the assessor shall refer the 100.26 application to the commissioner of natural resources who shall 100.27 determine within 30 days whether the land is native prairie and 100.28 notify the county assessor of the decision. Exemption of native 100.29 prairie pursuant to this clause shall not grant the public any 100.30 additional or greater right of access to the native prairie or 100.31 diminish any right of ownership to it. 100.32 (12) Property used in a continuous program to provide 100.33 emergency shelter for victims of domestic abuse, provided the 100.34 organization that owns and sponsors the shelter is exempt from 100.35 federal income taxation pursuant to section 501(c)(3) of the 100.36 Internal Revenue Code of 1986, as amended through December 31, 101.1 1992, notwithstanding the fact that the sponsoring organization 101.2 receives funding under section 8 of the United States Housing 101.3 Act of 1937, as amended. 101.4 (13) If approved by the governing body of the municipality 101.5 in which the property is located, property not exceeding one 101.6 acre which is owned and operated by any senior citizen group or 101.7 association of groups that in general limits membership to 101.8 persons age 55 or older and is organized and operated 101.9 exclusively for pleasure, recreation, and other nonprofit 101.10 purposes, no part of the net earnings of which inures to the 101.11 benefit of any private shareholders; provided the property is 101.12 used primarily as a clubhouse, meeting facility, or recreational 101.13 facility by the group or association and the property is not 101.14 used for residential purposes on either a temporary or permanent 101.15 basis. 101.16 (14) To the extent provided by section 295.44, real and 101.17 personal property used or to be used primarily for the 101.18 production of hydroelectric or hydromechanical power on a site 101.19 owned by the federal government, the state, or a local 101.20 governmental unit which is developed and operated pursuant to 101.21 the provisions of section 103G.535. 101.22 (15) If approved by the governing body of the municipality 101.23 in which the property is located, and if construction is 101.24 commenced after June 30, 1983: 101.25 (a) a "direct satellite broadcasting facility" operated by 101.26 a corporation licensed by the federal communications commission 101.27 to provide direct satellite broadcasting services using direct 101.28 broadcast satellites operating in the 12-ghz. band; and 101.29 (b) a "fixed satellite regional or national program service 101.30 facility" operated by a corporation licensed by the federal 101.31 communications commission to provide fixed satellite-transmitted 101.32 regularly scheduled broadcasting services using satellites 101.33 operating in the 6-ghz. band. 101.34 An exemption provided by clause (15) shall apply for a period 101.35 not to exceed five years. When the facility no longer qualifies 101.36 for exemption, it shall be placed on the assessment rolls as 102.1 provided in subdivision 4. Before approving a tax exemption 102.2 pursuant to this paragraph, the governing body of the 102.3 municipality shall provide an opportunity to the members of the 102.4 county board of commissioners of the county in which the 102.5 facility is proposed to be located and the members of the school 102.6 board of the school district in which the facility is proposed 102.7 to be located to meet with the governing body. The governing 102.8 body shall present to the members of those boards its estimate 102.9 of the fiscal impact of the proposed property tax exemption. 102.10 The tax exemption shall not be approved by the governing body 102.11 until the county board of commissioners has presented its 102.12 written comment on the proposal to the governing body or 30 days 102.13 have passed from the date of the transmittal by the governing 102.14 body to the board of the information on the fiscal impact, 102.15 whichever occurs first. 102.16 (16) Real and personal property owned and operated by a 102.17 private, nonprofit corporation exempt from federal income 102.18 taxation pursuant to United States Code, title 26, section 102.19 501(c)(3), primarily used in the generation and distribution of 102.20 hot water for heating buildings and structures. 102.21 (17) Notwithstanding section 273.19, state lands that are 102.22 leased from the department of natural resources under section 102.23 92.46. 102.24 (18) Electric power distribution lines and their 102.25 attachments and appurtenances, that are used primarily for 102.26 supplying electricity to farmers at retail. 102.27 (19) Transitional housing facilities. "Transitional 102.28 housing facility" means a facility that meets the following 102.29 requirements. (i) It provides temporary housing to individuals, 102.30 couples, or families. (ii) It has the purpose of reuniting 102.31 families and enabling parents or individuals to obtain 102.32 self-sufficiency, advance their education, get job training, or 102.33 become employed in jobs that provide a living wage. (iii) It 102.34 provides support services such as child care, work readiness 102.35 training, and career development counseling; and a 102.36 self-sufficiency program with periodic monitoring of each 103.1 resident's progress in completing the program's goals. (iv) It 103.2 provides services to a resident of the facility for at least 103.3 three months but no longer than three years, except residents 103.4 enrolled in an educational or vocational institution or job 103.5 training program. These residents may receive services during 103.6 the time they are enrolled but in no event longer than four 103.7 years. (v) It is owned and operated or under lease from a unit 103.8 of government or governmental agency under a property 103.9 disposition program and operated by one or more organizations 103.10 exempt from federal income tax under section 501(c)(3) of the 103.11 Internal Revenue Code of 1986, as amended through December 31, 103.12 1992. This exemption applies notwithstanding the fact that the 103.13 sponsoring organization receives financing by a direct federal 103.14 loan or federally insured loan or a loan made by the Minnesota 103.15 housing finance agency under the provisions of either Title II 103.16 of the National Housing Act or the Minnesota Housing Finance 103.17 Agency Law of 1971 or rules promulgated by the agency pursuant 103.18 to it, and notwithstanding the fact that the sponsoring 103.19 organization receives funding under Section 8 of the United 103.20 States Housing Act of 1937, as amended. 103.21 (20) Real and personal property, including leasehold or 103.22 other personal property interests, owned and operated by a 103.23 corporation if more than 50 percent of the total voting power of 103.24 the stock of the corporation is owned collectively by: (i) the 103.25 board of regents of the University of Minnesota, (ii) the 103.26 University of Minnesota Foundation, an organization exempt from 103.27 federal income taxation under section 501(c)(3) of the Internal 103.28 Revenue Code of 1986, as amended through December 31, 1992, and 103.29 (iii) a corporation organized under chapter 317A, which by its 103.30 articles of incorporation is prohibited from providing pecuniary 103.31 gain to any person or entity other than the regents of the 103.32 University of Minnesota; which property is used primarily to 103.33 manage or provide goods, services, or facilities utilizing or 103.34 relating to large-scale advanced scientific computing resources 103.35 to the regents of the University of Minnesota and others. 103.36 (21)(a) Small scale wind energy conversion systems 104.1 installed after January 1, 1991, and used as an electric power 104.2 source are exempt. 104.3 "Small scale wind energy conversion systems" are wind 104.4 energy conversion systems, as defined in section 216C.06, 104.5 subdivision 12, including the foundation or support pad, which 104.6 are (i) used as an electric power source; (ii) located within 104.7 one county and owned by the same owner; and (iii) produce two 104.8 megawatts or less of electricity as measured by nameplate 104.9 ratings. 104.10 (b) Medium scale wind energy conversion systems installed 104.11 after January 1, 1991, are treated as follows: (i) the 104.12 foundation and support pad are taxable; (ii) the associated 104.13 supporting and protective structures are exempt for the first 104.14 five assessment years after they have been constructed, and 104.15 thereafter, 30 percent of the market value of the associated 104.16 supporting and protective structures are taxable; and (iii) the 104.17 turbines, blades, transformers, and its related equipment, are 104.18 exempt. "Medium scale wind energy conversion systems" are wind 104.19 energy conversion systems as defined in section 216C.06, 104.20 subdivision 12, including the foundation or support pad, which 104.21 are: (i) used as an electric power source; (ii) located within 104.22 one county and owned by the same owner; and (iii) produce more 104.23 than two but equal to or less than 12 megawatts of energy as 104.24 measured by nameplate ratings. 104.25 (c) Large scale wind energy conversion systems installed 104.26 after January 1, 1991, are treated as follows: 25 percent of 104.27 the market value of all property is taxable, including (i) the 104.28 foundation and support pad; (ii) the associated supporting and 104.29 protective structures; and (iii) the turbines, blades, 104.30 transformers, and its related equipment. "Large scale wind 104.31 energy conversion systems" are wind energy conversion systems as 104.32 defined in section 216C.06, subdivision 12, including the 104.33 foundation or support pad, which are: (i) used as an electric 104.34 power source; and (ii) produce more than 12 megawatts of energy 104.35 as measured by nameplate ratings. 104.36 (22) Containment tanks, cache basins, and that portion of 105.1 the structure needed for the containment facility used to 105.2 confine agricultural chemicals as defined in section 18D.01, 105.3 subdivision 3, as required by the commissioner of agriculture 105.4 under chapter 18B or 18C. 105.5 (23) Photovoltaic devices, as defined in section 216C.06, 105.6 subdivision 13, installed after January 1, 1992, and used to 105.7 produce or store electric power. 105.8 (24) Real and personal property owned and operated by a 105.9 private, nonprofit corporation exempt from federal income 105.10 taxation pursuant to United States Code, title 26, section 105.11 501(c)(3), primarily used for an ice arena or ice rink, and used 105.12 primarily for youth and high school programs. 105.13 (25) A structure that is situated on real property that is 105.14 used for: 105.15 (i) housing for the elderly or for low- and moderate-income 105.16 families as defined in Title II of the National Housing Act, as 105.17 amended through December 31, 1990, and funded by a direct 105.18 federal loan or federally insured loan made pursuant to Title II 105.19 of the act; or 105.20 (ii) housing lower income families or elderly or 105.21 handicapped persons, as defined in Section 8 of the United 105.22 States Housing Act of 1937, as amended. 105.23 In order for a structure to be exempt under item (i) or 105.24 (ii), it must also meet each of the following criteria: 105.25 (A) is owned by an entity which is operated as a nonprofit 105.26 corporation organized under chapter 317A; 105.27 (B) is owned by an entity which has not entered into a 105.28 housing assistance payments contract under Section 8 of the 105.29 United States Housing Act of 1937, or, if the entity which owns 105.30 the structure has entered into a housing assistance payments 105.31 contract under Section 8 of the United States Housing Act of 105.32 1937, the contract provides assistance for less than 90 percent 105.33 of the dwelling units in the structure, excluding dwelling units 105.34 intended for management or maintenance personnel; 105.35 (C) operates an on-site congregate dining program in which 105.36 participation by residents is mandatory, and provides assisted 106.1 living or similar social and physical support services for 106.2 residents; and 106.3 (D) was not assessed and did not pay tax under chapter 273 106.4 prior to the 1991 levy, while meeting the other conditions of 106.5 this clause. 106.6 An exemption under this clause remains in effect for taxes 106.7 levied in each year or partial year of the term of its permanent 106.8 financing. 106.9 (26) Real and personal property that is located in the 106.10 Superior National Forest, and owned or leased and operated by a 106.11 nonprofit organization that is exempt from federal income 106.12 taxation under section 501(c)(3) of the Internal Revenue Code of 106.13 1986, as amended through December 31, 1992, and primarily used 106.14 to provide recreational opportunities for disabled veterans and 106.15 their families. 106.16 (27) Manure pits and appurtenances, which may include 106.17 slatted floors and pipes, installed or operated in accordance 106.18 with a permit, order, or certificate of compliance issued by the 106.19 Minnesota pollution control agency. The exemption shall 106.20 continue for as long as the permit, order, or certificate issued 106.21 by the Minnesota pollution control agency remains in effect. 106.22 (28) Notwithstanding clause (8), item (a), attached 106.23 machinery and other personal property which is part of a 106.24 facility containing a cogeneration system as described in 106.25 section 216B.166, subdivision 2, paragraph (a), if the 106.26 cogeneration system has met the following criteria: (i) the 106.27 system utilizes natural gas as a primary fuel and the 106.28 cogenerated steam initially replaces steam generated from 106.29 existing thermal boilers utilizing coal; (ii) the facility 106.30 developer is selected as a result of a procurement process 106.31 ordered by the public utilities commission; and (iii) 106.32 construction of the facility is commenced after July 1, 1994, 106.33 and before July 1, 1997. 106.34 (29) Real property acquired by a home rule charter city, 106.35 statutory city, county, town, or school district under a lease 106.36 purchase agreement or an installment purchase contract during 107.1 the term of the lease purchase agreement as long as and to the 107.2 extent that the property is used by the city, county, town, or 107.3 school district and devoted to a public use and to the extent it 107.4 is not subleased to any private individual, entity, association, 107.5 or corporation in connection with a business or enterprise 107.6 operated for profit. 107.7 (30) Property owned by a nonprofit charitable organization 107.8 that qualifies for tax exemption under section 501(c)(3) of the 107.9 Internal Revenue Code of 1986, as amended through December 31, 107.10 1997, that is intended to be used as a business incubator in a 107.11 high-unemployment county but is not occupied on the assessment 107.12 date. As used in this clause, a "business incubator" is a 107.13 facility used for the development of nonretail businesses, 107.14 offering access to equipment, space, services, and advice to the 107.15 tenant businesses, for the purpose of encouraging economic 107.16 development, diversification, and job creation in the area 107.17 served by the organization, and "high-unemployment county" is a 107.18 county that had an average annual unemployment rate of 7.9 107.19 percent or greater in 1997. Property that qualifies for the 107.20 exemption under this clause is limited to no more than two 107.21 contiguous parcels and structures that do not exceed in the 107.22 aggregate 40,000 square feet. This exemption expires after 107.23 taxes payable in 2005. 107.24 (31) Notwithstanding any other law to the contrary, real 107.25 property that meets the following criteria is exempt: 107.26 (i) constitutes a wastewater treatment system (a) 107.27 constructed by a municipality using public funds, (b) operates 107.28 under a State Disposal System Permit issued by the Minnesota 107.29 pollution control agency pursuant to chapters 115 and 116 and 107.30 Minnesota Rules, chapter 700l, and (c) applies its effluent to 107.31 land used as part of an agricultural operation; 107.32 (ii) is located within a municipality of a population of 107.33 less than 10,000; 107.34 (iii) is used for treatment of effluent from a private 107.35 potato processing facility; and 107.36 (iv) is owned by a municipality and operated by a private 108.1 entity under agreement with that municipality. 108.2 (32) Notwithstanding clause (8), item (a), attached 108.3 machinery and other personal property which is part of a 108.4 simple-cycle combustion-turbine electric generation facility 108.5 that exceeds 250 megawatts of installed capacity and that meets 108.6 the requirements of this clause. At the time of construction, 108.7 the facility must: 108.8 (i) not be owned by a public utility as defined in section 108.9 216B.02, subdivision 4; 108.10 (ii) utilize natural gas as a primary fuel; 108.11 (iii) be located within 20 miles of the intersection of an 108.12 existing 42-inch (outside diameter) natural gas pipeline and a 108.13 345-kilovolt high-voltage electric transmission line; and 108.14 (iv) be designed to provide peaking, emergency backup, or 108.15 contingency services, and have received a certificate of need 108.16 pursuant to section 216B.243 demonstrating demand for its 108.17 capacity. 108.18 Construction of the facility must be commenced after July 1, 108.19 1999, and before July 1, 2003. Property eligible for this 108.20 exemption does not include electric transmission lines and 108.21 interconnections or gas pipelines and interconnections 108.22 appurtenant to the property or the facility. 108.23 Sec. 5. Minnesota Statutes 1998, section 272.027, is 108.24 amended to read: 108.25 272.027 [PERSONAL PROPERTY USED TO GENERATE ELECTRICITY FOR 108.26 PRODUCTION AND RESALE.] 108.27 Subdivision 1. [ELECTRICITY GENERATED TO PRODUCE GOODS AND 108.28 SERVICES.] Personal property used to generate electric power is 108.29 exempt from property taxation if the electric power is used to 108.30 manufacture or produce goods, products, or services, other than 108.31 electric power, by the owner of the electric generation 108.32 plant. Except as provided in subdivisions 2 and 3, the 108.33 exemption does not apply to property used to produce electric 108.34 power for sale to others and does not apply to real property. 108.35 In determining the value subject to tax, a proportionate share 108.36 of the value of the generating facilities, equal to the 109.1 proportion that the power sold to others bears to the total 109.2 generation of the plant, is subject to the general property tax 109.3 in the same manner as other property. Power generated in such a 109.4 plant and exchanged for an equivalent amount of power that is 109.5 used for the manufacture or production of goods, products, or 109.6 services other than electric power by the owner of the 109.7 generating plant is considered to be used by the owner of the 109.8 plant. 109.9 Subd. 2. [EXEMPTION FOR CUSTOMER OWNED PROPERTY 109.10 TRANSFERRED TO A UTILITY.] (a) Tools, implements, and machinery 109.11 of an electric generating facility are exempt if all the 109.12 following requirements are met: 109.13 (1) the electric generating facilities were operational and 109.14 met the requirements for exemption of personal property under 109.15 subdivision 1 on January 2, 1999; and 109.16 (2) the generating facility is sold to a Minnesota electric 109.17 utility. 109.18 (b) Any tools, implements, and machinery installed to 109.19 increase generation capacity are also exempt under this section 109.20 provided that the existing tools, implements, and machinery are 109.21 exempt under paragraph (a). 109.22 Subd. 3. [EXEMPTION ELECTRIC POWER PLANT PERSONAL 109.23 PROPERTY; TACONITE AND STEEL MILL.] 109.24 Tools, implements, and machinery of an electric generating 109.25 facility are exempt if all the following requirements are met: 109.26 (1) the electric generating facility, when completed, will 109.27 have a capacity of at least 450 megawatts; 109.28 (2) the electric generating facility is adjacent to a 109.29 taconite mine direct-reduction steel mill; and 109.30 (3) the electric generating facility supplied over 60 109.31 percent of its electricity generated in the prior year to the 109.32 adjacent direct-reduction plant and steel mill. 109.33 Sec. 6. Minnesota Statutes 1998, section 272.03, 109.34 subdivision 6, is amended to read: 109.35 Subd. 6. [TRACT, LOT, PARCEL, AND PIECE OR PARCEL.] 109.36 (a) "Tract," "lot," "parcel," and "piece or parcel" of land 110.1 means any contiguous quantity of land in the possession of, 110.2 owned by, or recorded as the property of, the same claimant or 110.3 person. 110.4 (b) Notwithstanding paragraph (a), property that is owned 110.5 by a utility, leased for residential or recreational uses for 110.6 terms of 20 years or longer, and separately valued by the 110.7 assessor, will be treated for property tax purposes as separate 110.8 parcels. 110.9 Sec. 7. Minnesota Statutes 1998, section 273.11, 110.10 subdivision 1a, is amended to read: 110.11 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 110.12 property classified as agricultural homestead or nonhomestead, 110.13 residential homestead or nonhomestead, or noncommercial seasonal 110.14 recreational residential, the assessor shall compare the value 110.15 with that determined in the preceding assessment. The amount of 110.16 the increase entered in the current assessment shall not exceed 110.17 the greater of (1)tenseven percent of the value in the 110.18 preceding assessment, or (2)one-fourth15 percent of the 110.19 difference between the current assessment and the preceding 110.20 assessment. This limitation shall not apply to increases in 110.21 value due to improvements. For purposes of this subdivision, 110.22 the term "assessment" means the value prior to any exclusion 110.23 under subdivision 16. 110.24 The provisions of this subdivision shall be in effect only 110.25 for assessment years 1993 through 2001. 110.26 For purposes of the assessment/sales ratio study conducted 110.27 under section 127A.48, and the computation of state aids paid 110.28 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 110.29 477A, market values and net tax capacities determined under this 110.30 subdivision and subdivision 16, shall be used. 110.31 Sec. 8. Minnesota Statutes 1998, section 273.11, 110.32 subdivision 16, is amended to read: 110.33 Subd. 16. [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 110.34 Improvements to homestead property made before January 2, 2003, 110.35 shall be fully or partially excluded from the value of the 110.36 property for assessment purposes provided that (1) the house is 111.1 at least3545 years old at the time of the improvement and (2) 111.2either111.3(a)the assessor's estimated market value of the house on 111.4 January 2 of the current year is equal to or less than$150,000,111.5or$300,000. 111.6(b) if the estimated market value of the house is over111.7$150,000 market value but is less than $300,000 on January 2 of111.8the current year, the property qualifies if111.9(i) it is located in a city or town in which 50 percent or111.10more of the owner-occupied housing units were constructed before111.111960 based upon the 1990 federal census, and111.12(ii) the city or town's median family income based upon the111.131990 federal census is less than the statewide median family111.14income based upon the 1990 federal census, or111.15(c) if the estimated market value of the house is $300,000111.16or more on January 2 of the current year, the property qualifies111.17if111.18(i) it is located in a city or town in which 45 percent or111.19more of the homes were constructed before 1940 based upon the111.201990 federal census, and111.21(ii) it is located in a city or town in which 45 percent or111.22more of the housing units were rental based upon the 1990111.23federal census, and111.24(iii) the city or town's median value of owner-occupied111.25housing units based upon the 1990 federal census is less than111.26the statewide median value of owner-occupied housing units based111.27upon the 1990 federal census.111.28 For purposes of determining this eligibility, "house" means 111.29 land and buildings. 111.30 The age of a residence is the number of years since the 111.31 original year of its construction. In the case of a residence 111.32 that is relocated, the relocation must be from a location within 111.33 the state and the only improvements eligible for exclusion under 111.34 this subdivision are (1) those for which building permits were 111.35 issued to the homeowner after the residence was relocated to its 111.36 present site, and (2) those undertaken during or after the year 112.1 the residence is initially occupied by the homeowner, excluding 112.2 any market value increase relating to basic improvements that 112.3 are necessary to install the residence on its foundation and 112.4 connect it to utilities at its present site. In the case of an 112.5 owner-occupied duplex or triplex, the improvement is eligible 112.6 regardless of which portion of the property was improved. 112.7 If the property lies in a jurisdiction which is subject to 112.8 a building permit process, a building permit must have been 112.9 issued prior to commencement of the improvement.Any112.10improvementThe improvements for a single project or in any one 112.11 year must add at least$1,000$5,000 to the value of the 112.12 property to be eligible for exclusion under this subdivision. 112.13 Only improvements to the structure which is the residence of the 112.14 qualifying homesteader or construction of or improvements to no 112.15 more than one two-car garage per residence qualify for the 112.16 provisions of this subdivision. If an improvement was begun 112.17 between January 2, 1992, and January 2, 1993, any value added 112.18 from that improvement for the January 1994 and subsequent 112.19 assessments shall qualify for exclusion under this subdivision 112.20 provided that a building permit was obtained for the improvement 112.21 between January 2, 1992, and January 2, 1993. Whenever a 112.22 building permit is issued for property currently classified as 112.23 homestead, the issuing jurisdiction shall notify the property 112.24 owner of the possibility of valuation exclusion under this 112.25 subdivision. The assessor shall require an application, 112.26 including documentation of the age of the house from the owner, 112.27 if unknown by the assessor. The application may be filed 112.28 subsequent to the date of the building permit provided that the 112.29 application must be filed within three years of the date the 112.30 building permit was issued for the improvement. If the property 112.31 lies in a jurisdiction which is not subject to a building permit 112.32 process, the application must be filed within three years of the 112.33 date the improvement was made. The assessor may require proof 112.34 from the taxpayer of the date the improvement was made. 112.35 Applications must be received prior to July 1 of any year in 112.36 order to be effective for taxes payable in the following year. 113.1 No exclusion for an improvement may be grantedfor an113.2improvementby a local board of review or county board of 113.3 equalization, and no abatement of the taxes for qualifying 113.4 improvements may be granted by the county board unless (1) a 113.5 building permit was issued prior to the commencement of the 113.6 improvement if the jurisdiction requires a building permit, and 113.7 (2) an application was completed. 113.8 The assessor shall note the qualifying value of each 113.9 improvement on the property's record, and the sum of those 113.10 amounts shall be subtracted from the value of the property in 113.11 each year for ten years after the improvement has been made, at113.12which time an amount equal to 20 percent of the qualifying value113.13shall be added back in each of the five subsequent assessment113.14years. After ten years the amount of the qualifying value shall 113.15 be added back as follows: 113.16 (1) 50 percent in the two subsequent assessment years if 113.17 the qualifying value is equal to or less than $10,000 market 113.18 value; or 113.19 (2) 20 percent in the five subsequent assessment years if 113.20 the qualifying value is greater than $10,000 market value. 113.21 If an application is filed after the first assessment date at 113.22 which an improvement could have been subject to the valuation 113.23 exclusion under this subdivision, the ten-year period during 113.24 which the value is subject to exclusion is reduced by the number 113.25 of years that have elapsed since the property would have 113.26 qualified initially. The valuation exclusion shall terminate 113.27 whenever (1) the property is sold, or (2) the property is 113.28 reclassified to a class which does not qualify for treatment 113.29 under this subdivision. Improvements made by an occupant who is 113.30 the purchaser of the property under a conditional purchase 113.31 contract do not qualify under this subdivision unless the seller 113.32 of the property is a governmental entity. The qualifying value 113.33 of the property shall be computed based upon the increase from 113.34 that structure's market value as of January 2 preceding the 113.35 acquisition of the property by the governmental entity. 113.36 The total qualifying value for a homestead may not exceed 114.1 $50,000. The total qualifying value for a homestead with a 114.2 house that is less than 70 years old may not exceed $25,000. 114.3 The term "qualifying value" means the increase in estimated 114.4 market value resulting from the improvement if the improvement 114.5 occurs when the house is at least 70 years old, or one-half of 114.6 the increase in estimated market value resulting from the 114.7 improvement otherwise. The $25,000 and $50,000 maximum 114.8 qualifying value under this subdivision may result fromup to114.9three separatemultiple improvements to the homestead.The114.10application shall state, in clear language, that If more than114.11three improvements are made to the qualifying property, a114.12taxpayer may choose which three improvements are eligible,114.13provided that after the taxpayer has made the choice and any114.14valuation attributable to those improvements has been excluded114.15from taxation, no further changes can be made by the taxpayer.114.16 If 50 percent or more of the square footage of a structure 114.17 is voluntarily razed or removed, the valuation increase 114.18 attributable to any subsequent improvements to the remaining 114.19 structure does not qualify for the exclusion under this 114.20 subdivision. If a structure is unintentionally or accidentally 114.21 destroyed by a natural disaster, the property is eligible for an 114.22 exclusion under this subdivision provided that the structure was 114.23 not completely destroyed. The qualifying value on property 114.24 destroyed by a natural disaster shall be computed based upon the 114.25 increase from that structure's market value as determined on 114.26 January 2 of the year in which the disaster occurred. A 114.27 property receiving benefits under the homestead disaster 114.28 provisions under section 273.123 is not disqualified from 114.29 receiving an exclusion under this subdivision. If any 114.30 combination of improvements made to a structure after January 1, 114.31 1993, increases the size of the structure by 100 percent or 114.32 more, the valuation increase attributable to the portion of the 114.33 improvement that causes the structure's size to exceed 100 114.34 percent does not qualify for exclusion under this subdivision. 114.35 Sec. 9. Minnesota Statutes 1998, section 273.111, is 114.36 amended by adding a subdivision to read: 115.1 Subd. 15. [DISSECTED PARCELS; CONTINUED DEFERMENT.] Real 115.2 estate consisting of more than ten, but less than 15, acres 115.3 which has: 115.4 (1) been owned by the applicant or the applicant's parents 115.5 for at least 70 years; 115.6 (2) been dissected by two or more major parkways or 115.7 interstate highways; and 115.8 (3) qualified for the agricultural valuation and tax 115.9 deferment under this section through assessment year 1996, taxes 115.10 payable in 1997, shall continue to qualify for treatment under 115.11 this section until the applicant's death or transfer or sale by 115.12 the applicant of the applicant's interest in the real estate. 115.13 Sec. 10. Minnesota Statutes 1998, section 273.124, 115.14 subdivision 1, is amended to read: 115.15 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 115.16 that is occupied and used for the purposes of a homestead by its 115.17 owner, who must be a Minnesota resident, is a residential 115.18 homestead. 115.19 Agricultural land, as defined in section 273.13, 115.20 subdivision 23, that is occupied and used as a homestead by its 115.21 owner, who must be a Minnesota resident, is an agricultural 115.22 homestead. 115.23 Dates for establishment of a homestead and homestead 115.24 treatment provided to particular types of property are as 115.25 provided in this section. 115.26 Property of a trustee, beneficiary, or grantor of a trust 115.27 is not disqualified from receiving homestead benefits if the 115.28 homestead requirements under this chapter are satisfied. 115.29 The assessor shall require proof, as provided in 115.30 subdivision 13, of the facts upon which classification as a 115.31 homestead may be determined. Notwithstanding any other law, the 115.32 assessor may at any time require a homestead application to be 115.33 filed in order to verify that any property classified as a 115.34 homestead continues to be eligible for homestead status. 115.35 Notwithstanding any other law to the contrary, the department of 115.36 revenue may, upon request from an assessor, verify whether an 116.1 individual who is requesting or receiving homestead 116.2 classification has filed a Minnesota income tax return as a 116.3 resident for the most recent taxable year for which the 116.4 information is available. 116.5 When there is a name change or a transfer of homestead 116.6 property, the assessor may reclassify the property in the next 116.7 assessment unless a homestead application is filed to verify 116.8 that the property continues to qualify for homestead 116.9 classification. 116.10 (b) For purposes of this section, homestead property shall 116.11 include property which is used for purposes of the homestead but 116.12 is separated from the homestead by a road, street, lot, 116.13 waterway, or other similar intervening property. The term "used 116.14 for purposes of the homestead" shall include but not be limited 116.15 to uses for gardens, garages, or other outbuildings commonly 116.16 associated with a homestead, but shall not include vacant land 116.17 held primarily for future development. In order to receive 116.18 homestead treatment for the noncontiguous property, the owner 116.19 must use the property for the purposes of the homestead, and 116.20 must apply to the assessor, both by the deadlines given in 116.21 subdivision 9. After initial qualification for the homestead 116.22 treatment, additional applications for subsequent years are not 116.23 required. 116.24 (c) Residential real estate that is occupied and used for 116.25 purposes of a homestead by a relative of the owner is a 116.26 homestead but only to the extent of the homestead treatment that 116.27 would be provided if the related owner occupied the property. 116.28 For purposes of this paragraph and paragraph (g), "relative" 116.29 means a parent, stepparent, child, stepchild, grandparent, 116.30 grandchild, brother, sister, uncle, or aunt. This relationship 116.31 may be by blood or marriage. Property that has been classified 116.32 as seasonal recreational residential property at any time during 116.33 which it has been owned by the current owner or spouse of the 116.34 current owner will not be reclassified as a homestead unless it 116.35 is occupied as a homestead by the owner; this prohibition also 116.36 applies to property that, in the absence of this paragraph, 117.1 would have been classified as seasonal recreational residential 117.2 property at the time when the residence was constructed. 117.3 Neither the related occupant nor the owner of the property may 117.4 claim a property tax refund under chapter 290A for a homestead 117.5 occupied by a relative. In the case of a residence located on 117.6 agricultural land, only the house, garage, and immediately 117.7 surrounding one acre of land shall be classified as a homestead 117.8 under this paragraph, except as provided in paragraph (d). 117.9 (d) Agricultural property that is occupied and used for 117.10 purposes of a homestead by a relative of the owner, is a 117.11 homestead, only to the extent of the homestead treatment that 117.12 would be provided if the related owner occupied the property, 117.13 and only if all of the following criteria are met: 117.14 (1) the relative who is occupying the agricultural property 117.15 is a son, daughter, father, or mother of the owner of the 117.16 agricultural property or a son or daughter of the spouse of the 117.17 owner of the agricultural property, 117.18 (2) notwithstanding the residency requirement in paragraph 117.19 (a), the owner of the agricultural propertymustneed not be a 117.20 Minnesota resident, 117.21 (3) the relative occupying the agricultural property is 117.22 actively farming the property and is a Minnesota resident, 117.23 (4) the owner of the agricultural property must not receive 117.24 homestead treatment on any other agricultural property in 117.25 Minnesota, and 117.26(4)(5) the owner of the agricultural property is limited 117.27 to only one agricultural homestead per family under this 117.28 paragraph. 117.29 Neither the related occupant nor the owner of the property 117.30 may claim a property tax refund under chapter 290A for a 117.31 homestead occupied by a relative qualifying under this 117.32 paragraph. For purposes of this paragraph, "agricultural 117.33 property" means the house, garage, other farm buildings and 117.34 structures, and agricultural land. 117.35 Application must be made to the assessor by the owner of 117.36 the agricultural property to receive homestead benefits under 118.1 this paragraph. The assessor may require the necessary proof 118.2 that the requirements under this paragraph have been met. 118.3 (e) In the case of property owned by a property owner who 118.4 is married, the assessor must not deny homestead treatment in 118.5 whole or in part if only one of the spouses occupies the 118.6 property and the other spouse is absent due to: (1) marriage 118.7 dissolution proceedings, (2) legal separation, (3) employment or 118.8 self-employment in another location, or (4) other personal 118.9 circumstances causing the spouses to live separately, not 118.10 including an intent to obtain two homestead classifications for 118.11 property tax purposes. To qualify under clause (3), the 118.12 spouse's place of employment or self-employment must be at least 118.13 50 miles distant from the other spouse's place of employment, 118.14 and the homesteads must be at least 50 miles distant from each 118.15 other. Homestead treatment, in whole or in part, shall not be 118.16 denied to the owner's spouse who previously occupied the 118.17 residence with the owner if the absence of the owner is due to 118.18 one of the exceptions provided in this paragraph. 118.19 (f) The assessor must not deny homestead treatment in whole 118.20 or in part if: 118.21 (1) in the case of a property owner who is not married, the 118.22 owner is absent due to residence in a nursing home or boarding 118.23 care facility and the property is not otherwise occupied; or 118.24 (2) in the case of a property owner who is married, the 118.25 owner or the owner's spouse or both are absent due to residence 118.26 in a nursing home or boarding care facility and the property is 118.27 not occupied or is occupied only by the owner's spouse. 118.28 (g) If an individual is purchasing property with the intent 118.29 of claiming it as a homestead and is required by the terms of 118.30 the financing agreement to have a relative shown on the deed as 118.31 a coowner, the assessor shall allow a full homestead 118.32 classification. This provision only applies to first-time 118.33 purchasers, whether married or single, or to a person who had 118.34 previously been married and is purchasing as a single individual 118.35 for the first time. The application for homestead benefits must 118.36 be on a form prescribed by the commissioner and must contain the 119.1 data necessary for the assessor to determine if full homestead 119.2 benefits are warranted. 119.3 (h) If residential or agricultural real estate is occupied 119.4 and used for purposes of a homestead by a child of a deceased 119.5 owner and the property is subject to jurisdiction of probate 119.6 court, the child shall receive relative homestead classification 119.7 under paragraph (c) or (d) to the same extent they would be 119.8 entitled to it if the owner was still living, until the probate 119.9 is completed. For purposes of this paragraph, "child" includes 119.10 a relationship by blood or by marriage. 119.11 Sec. 11. Minnesota Statutes 1998, section 273.124, 119.12 subdivision 7, is amended to read: 119.13 Subd. 7. [LEASED BUILDINGS OR LAND.] For purposes of class 119.14 1 determinations, homesteads include: 119.15 (a) buildings and appurtenances owned and used by the 119.16 occupant as a permanent residence which are located upon land 119.17 the title to which is vested in a person or entity other than 119.18 the occupant; 119.19 (b) all buildings and appurtenances located upon land owned 119.20 by the occupant and used for the purposes of a homestead 119.21 together with the land upon which they are located, if all of 119.22 the following criteria are met: 119.23 (1) the occupant is using the property as a permanent 119.24 residence; 119.25 (2) the occupant is paying the property taxes and any 119.26 special assessments levied against the property; 119.27 (3) the occupant has signed a lease which has an option to 119.28 purchase the buildings and appurtenances; 119.29 (4) the term of the lease is at least five years; and 119.30 (5) the occupant has made a down payment of at least $5,000 119.31 in cash if the property was purchased by means of a contract for 119.32 deed or subject to a mortgage. 119.33 (c) all buildings and appurtenances and the land upon which 119.34 they are located that are used for purposes of a homestead, if 119.35 all of the following criteria are met: 119.36 (1) the land is owned by a utility, which maintains 120.1 ownership of the land in order to facilitate compliance with the 120.2 terms of its hydroelectric project license from the federal 120.3 energy regulatory commission; 120.4 (2) the land is leased for a term of 20 years or more; 120.5 (3) the occupant is using the property as a permanent 120.6 residence; and 120.7 (4) the occupant is paying the property taxes and any 120.8 special assessments levied against the property. 120.9 Any taxpayer meeting all the requirements of this paragraph 120.10 must notify the county assessor, or the assessor who has the 120.11 powers of the county assessor pursuant to section 273.063, in 120.12 writing, as soon as possible after signing the lease agreement 120.13 and occupying the buildings as a homestead. 120.14 Sec. 12. Minnesota Statutes 1998, section 273.124, 120.15 subdivision 8, is amended to read: 120.16 Subd. 8. [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR 120.17 PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION.] (a) Each 120.18 family farm corporation and each partnership operating a family 120.19 farm is entitled to class 1b under section 273.13, subdivision 120.20 22, paragraph (b), or class 2a assessment for one homestead 120.21 occupied by a shareholder or partner thereof who is residing on 120.22 the land and actively engaged in farming of the land owned by 120.23 the corporation or partnership. Homestead treatment applies 120.24 even if legal title to the property is in the name of the 120.25 corporation or partnership and not in the name of the person 120.26 residing on it. "Family farm corporation" and "family farm" 120.27 have the meanings given in section 500.24, except that the 120.28 number of allowable shareholders or partners under this 120.29 subdivision shall not exceed 12. 120.30 (b) In addition to property specified in paragraph (a), any 120.31 other residences owned by corporations or partnerships described 120.32 in paragraph (a) which are located on agricultural land and 120.33 occupied as homesteads by shareholders or partners who are 120.34 actively engaged in farming on behalf of the corporation or 120.35 partnership must also be assessed as class 2a property or as 120.36 class 1b property under section 273.13, subdivision 22, 121.1 paragraph (b), but the property eligible is limited to the 121.2 residence itself and as much of the land surrounding the 121.3 homestead, not exceeding one acre, as is reasonably necessary 121.4 for the use of the dwelling as a home, and does not include any 121.5 other structures that may be located on it. 121.6 (c) Agricultural property owned by a shareholder of a 121.7 family farm corporation, as defined in paragraph (a), and leased 121.8 to the family farm corporation by the shareholder, is entitled 121.9 to class 1b under section 273.13, subdivision 22, paragraph (b), 121.10 or class 2a under section 273.13, subdivision 23, paragraph (a), 121.11 if the owner is actually residing on the property and is 121.12 actually engaged in farming the land on behalf of the 121.13 corporation. This paragraph applies without regard to any legal 121.14 possession rights of the family farm corporation under the lease. 121.15 Sec. 13. Minnesota Statutes 1998, section 273.124, 121.16 subdivision 13, is amended to read: 121.17 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 121.18 the homestead requirements under subdivision 1 must file a 121.19 homestead application with the county assessor to initially 121.20 obtain homestead classification. 121.21 (b) On or before January 2, 1993, each county assessor 121.22 shall mail a homestead application to the owner of each parcel 121.23 of property within the county which was classified as homestead 121.24 for the 1992 assessment year. The format and contents of a 121.25 uniform homestead application shall be prescribed by the 121.26 commissioner of revenue. The commissioner shall consult with 121.27 the chairs of the house and senate tax committees on the 121.28 contents of the homestead application form. The application 121.29 must clearly inform the taxpayer that this application must be 121.30 signed by all owners who occupy the property or by the 121.31 qualifying relative and returned to the county assessor in order 121.32 for the property to continue receiving homestead treatment. The 121.33 envelope containing the homestead application shall clearly 121.34 identify its contents and alert the taxpayer of its necessary 121.35 immediate response. 121.36 (c) Every property owner applying for homestead 122.1 classification must furnish to the county assessor the social 122.2 security number of each occupant who is listed as an owner of 122.3 the property on the deed of record, the name and address of each 122.4 owner who does not occupy the property, and the name and social 122.5 security number of each owner's spouse who occupies the 122.6 property. The application must be signed by each owner who 122.7 occupies the property and by each owner's spouse who occupies 122.8 the property, or, in the case of property that qualifies as a 122.9 homestead under subdivision 1, paragraph (c), by the qualifying 122.10 relative. 122.11 If a property owner occupies a homestead, the property 122.12 owner's spouse may not claim another property as a homestead 122.13 unless the property owner and the property owner's spouse file 122.14 with the assessor an affidavit or other proof required by the 122.15 assessor stating that the property qualifies as a homestead 122.16 under subdivision 1, paragraph (e). 122.17 Owners or spouses occupying residences owned by their 122.18 spouses and previously occupied with the other spouse, either of 122.19 whom fail to include the other spouse's name and social security 122.20 number on the homestead application or provide the affidavits or 122.21 other proof requested, will be deemed to have elected to receive 122.22 only partial homestead treatment of their residence. The 122.23 remainder of the residence will be classified as nonhomestead 122.24 residential. When an owner or spouse's name and social security 122.25 number appear on homestead applications for two separate 122.26 residences and only one application is signed, the owner or 122.27 spouse will be deemed to have elected to homestead the residence 122.28 for which the application was signed. 122.29 The social security numbers or affidavits or other proofs 122.30 of the property owners and spouses are private data on 122.31 individuals as defined by section 13.02, subdivision 12, but, 122.32 notwithstanding that section, the private data may be disclosed 122.33 to the commissioner of revenue, or, for purposes of proceeding 122.34 under the Revenue Recapture Act to recover personal property 122.35 taxes owing, to the county treasurer. 122.36 (d) If residential real estate is occupied and used for 123.1 purposes of a homestead by a relative of the owner and qualifies 123.2 for a homestead under subdivision 1, paragraph (c), in order for 123.3 the property to receive homestead status, a homestead 123.4 application must be filed with the assessor. The social 123.5 security number of each relative occupying the property and the 123.6 social security number of each owner who is related to an 123.7 occupant of the property shall be required on the homestead 123.8 application filed under this subdivision. If a different 123.9 relative of the owner subsequently occupies the property, the 123.10 owner of the property must notify the assessor within 30 days of 123.11 the change in occupancy. The social security number of a 123.12 relative occupying the property is private data on individuals 123.13 as defined by section 13.02, subdivision 12, but may be 123.14 disclosed to the commissioner of revenue. 123.15 (e) The homestead application shall also notify the 123.16 property owners that the application filed under this section 123.17 will not be mailed annually and that if the property is granted 123.18 homestead status for the 1993 assessment, or any assessment year 123.19 thereafter, that same property shall remain classified as 123.20 homestead until the property is sold or transferred to another 123.21 person, or the owners, the spouse of the owner, or the relatives 123.22 no longer use the property as their homestead. Upon the sale or 123.23 transfer of the homestead property, a certificate of value must 123.24 be timely filed with the county auditor as provided under 123.25 section 272.115. Failure to notify the assessor within 30 days 123.26 that the property has been sold, transferred, or that the owner, 123.27 the spouse of the owner, or the relative is no longer occupying 123.28 the property as a homestead, shall result in the penalty 123.29 provided under this subdivision and the property will lose its 123.30 current homestead status. 123.31 (f) If the homestead application is not returned within 30 123.32 days, the county will send a second application to the present 123.33 owners of record. The notice of proposed property taxes 123.34 prepared under section 275.065, subdivision 3, shall reflect the 123.35 property's classification. Beginning with assessment year 1993 123.36 for all properties, if a homestead application has not been 124.1 filed with the county by December 15, the assessor shall 124.2 classify the property as nonhomestead for the current assessment 124.3 year for taxes payable in the following year, provided that the 124.4 owner may be entitled to receive the homestead classification by 124.5 proper application under section 375.192. 124.6 (g) At the request of the commissioner, each county must 124.7 give the commissioner a list that includes the name and social 124.8 security number of each property owner and the property owner's 124.9 spouse occupying the property, or relative of a property owner, 124.10 applying for homestead classification under this subdivision. 124.11 The commissioner shall use the information provided on the lists 124.12 as appropriate under the law, including for the detection of 124.13 improper claims by owners, or relatives of owners, under chapter 124.14 290A. 124.15 (h) If the commissioner finds that a property owner may be 124.16 claiming a fraudulent homestead, the commissioner shall notify 124.17 the appropriate counties. Within 90 days of the notification, 124.18 the county assessor shall investigate to determine if the 124.19 homestead classification was properly claimed. If the property 124.20 owner does not qualify, the county assessor shall notify the 124.21 county auditor who will determine the amount of homestead 124.22 benefits that had been improperly allowed. For the purpose of 124.23 this section, "homestead benefits" means the tax reduction 124.24 resulting from the classification as a homestead under section 124.25 273.13, the taconite homestead credit under section 273.135, and 124.26 the supplemental homestead credit under section 273.1391. 124.27 The county auditor shall send a notice to the person who 124.28 owned the affected property at the time the homestead 124.29 application related to the improper homestead was filed, 124.30 demanding reimbursement of the homestead benefits plus a penalty 124.31 equal to 100 percent of the homestead benefits. The person 124.32 notified may appeal the county's determination by serving copies 124.33 of a petition for review with county officials as provided in 124.34 section 278.01 and filing proof of service as provided in 124.35 section 278.01 with the Minnesota tax court within 60 days of 124.36 the date of the notice from the county. Procedurally, the 125.1 appeal is governed by the provisions in chapter 271 which apply 125.2 to the appeal of a property tax assessment or levy, but without 125.3 requiring any prepayment of the amount in controversy. If the 125.4 amount of homestead benefits and penalty is not paid within 60 125.5 days, and if no appeal has been filed, the county auditor shall 125.6 certify the amount of taxes and penalty to the county 125.7 treasurer. The county treasurer will add interest to the unpaid 125.8 homestead benefits and penalty amounts at the rate provided in 125.9 section 279.03 for real property taxes becoming delinquent in 125.10 the calendar year during which the amount remains unpaid. 125.11 Interest may be assessed for the period beginning 60 days after 125.12 demand for payment was made. 125.13 If the person notified is the current owner of the 125.14 property, the treasurer may add the total amount of benefits, 125.15 penalty, interest, and costs to the ad valorem taxes otherwise 125.16 payable on the property by including the amounts on the property 125.17 tax statements under section 276.04, subdivision 3. The amounts 125.18 added under this paragraph to the ad valorem taxes shall include 125.19 interest accrued through December 31 of the year preceding the 125.20 taxes payable year for which the amounts are first added. These 125.21 amounts, when added to the property tax statement, become 125.22 subject to all the laws for the enforcement of real or personal 125.23 property taxes for that year, and for any subsequent year. 125.24 If the person notified is not the current owner of the 125.25 property, the treasurer may collect the amounts due under the 125.26 Revenue Recapture Act in chapter 270A, or use any of the powers 125.27 granted in sections 277.20 and 277.21 without exclusion, to 125.28 enforce payment of the benefits, penalty, interest, and costs, 125.29 as if those amounts were delinquent tax obligations of the 125.30 person who owned the property at the time the application 125.31 related to the improperly allowed homestead was filed. The 125.32 treasurer may relieve a prior owner of personal liability for 125.33 the benefits, penalty, interest, and costs, and instead extend 125.34 those amounts on the tax lists against the property as provided 125.35 in this paragraph to the extent that the current owner agrees in 125.36 writing. On all demands, billings, property tax statements, and 126.1 related correspondence, the county must list and state 126.2 separately the amounts of homestead benefits, penalty, interest 126.3 and costs being demanded, billed or assessed. 126.4 (i) Any amount of homestead benefits recovered by the 126.5 county from the property owner shall be distributed to the 126.6 county, city or town, and school district where the property is 126.7 located in the same proportion that each taxing district's levy 126.8 was to the total of the three taxing districts' levy for the 126.9 current year. Any amount recovered attributable to taconite 126.10 homestead credit shall be transmitted to the St. Louis county 126.11 auditor to be deposited in the taconite property tax relief 126.12 account. Any amount recovered that is attributable to 126.13 supplemental homestead credit is to be transmitted to the 126.14 commissioner of revenue for deposit in the general fund of the 126.15 state treasury. The total amount of penalty collected must be 126.16 deposited in the county general fund. 126.17 (j) If a property owner has applied for more than one 126.18 homestead and the county assessors cannot determine which 126.19 property should be classified as homestead, the county assessors 126.20 will refer the information to the commissioner. The 126.21 commissioner shall make the determination and notify the 126.22 counties within 60 days. 126.23 (k) In addition to lists of homestead properties, the 126.24 commissioner may ask the counties to furnish lists of all 126.25 properties and the record owners. The social security numbers 126.26 and federal identification numbers that are maintained by a 126.27 county or city assessor for property tax administration 126.28 purposes, and that may appear on the lists retain their 126.29 classification as private or nonpublic data; but may be viewed, 126.30 accessed, and used by the county auditor or treasurer of the 126.31 same county for the limited purpose of assisting the 126.32 commissioner in the preparation of microdata samples under 126.33 section 270.0681. 126.34 Sec. 14. Minnesota Statutes 1998, section 273.124, 126.35 subdivision 14, is amended to read: 126.36 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 127.1 (a) Real estate of less than ten acres that is the homestead of 127.2 its owner must be classified as class 2a under section 273.13, 127.3 subdivision 23, paragraph (a), if: 127.4 (1) the parcel on which the house is located is contiguous 127.5 on at least two sides to (i) agricultural land, (ii) land owned 127.6 or administered by the United States Fish and Wildlife Service, 127.7 or (iii) land administered by the department of natural 127.8 resources on which in lieu taxes are paid under sections 477A.11 127.9 to 477A.14; 127.10 (2) its owner also owns a noncontiguous parcel of 127.11 agricultural land that is at least 20 acres; 127.12 (3) the noncontiguous land is located not farther than four 127.13 townships or cities, or a combination of townships or cities 127.14 from the homestead; and 127.15 (4) the agricultural use value of the noncontiguous land 127.16 and farm buildings is equal to at least 50 percent of the market 127.17 value of the house, garage, and one acre of land. 127.18 Homesteads initially classified as class 2a under the 127.19 provisions of this paragraph shall remain classified as class 127.20 2a, irrespective of subsequent changes in the use of adjoining 127.21 properties, as long as the homestead remains under the same 127.22 ownership, the owner owns a noncontiguous parcel of agricultural 127.23 land that is at least 20 acres, and the agricultural use value 127.24 qualifies under clause (4). Homestead classification under this 127.25 paragraph is limited to property that qualified under this 127.26 paragraph for the 1998 assessment. 127.27 (b) Agricultural property consisting of at least 40 acres 127.28 shall be classified homestead, to the same extent as other 127.29 agricultural homestead property, if all of the following 127.30 criteria are met: 127.31 (1) the owner is actively farming the agricultural 127.32 property; 127.33 (2) the owner of the agricultural property is a Minnesota 127.34 resident; 127.35 (3) neither the owner nor the spouse of the agricultural 127.36 property claims another agricultural homestead in Minnesota; and 128.1 (4) the owner does not live farther than four townships or 128.2 cities, or a combination of four townships or cities, from the 128.3 agricultural property. 128.4(b)(c) Except as provided in paragraph(d)(e), 128.5 noncontiguous land shall be included as part of a homestead 128.6 under section 273.13, subdivision 23, paragraph (a), only if the 128.7 homestead is classified as class 2a and the detached land is 128.8 located in the same township or city, or not farther than four 128.9 townships or cities or combination thereof from the homestead. 128.10 Any taxpayer of these noncontiguous lands must notify the county 128.11 assessor that the noncontiguous land is part of the taxpayer's 128.12 homestead, and, if the homestead is located in another county, 128.13 the taxpayer must also notify the assessor of the other county. 128.14(c)(d) Agricultural land used for purposes of a homestead 128.15 and actively farmed by a person holding a vested remainder 128.16 interest in it must be classified as a homestead under section 128.17 273.13, subdivision 23, paragraph (a). If agricultural land is 128.18 classified class 2a, any other dwellings on the land used for 128.19 purposes of a homestead by persons holding vested remainder 128.20 interests who are actively engaged in farming the property, and 128.21 up to one acre of the land surrounding each homestead and 128.22 reasonably necessary for the use of the dwelling as a home, must 128.23 also be assessed class 2a. 128.24(d)(e) Agricultural land and buildings that were class 2a 128.25 homestead property under section 273.13, subdivision 23, 128.26 paragraph (a), for the 1997 assessment shall remain classified 128.27 as agricultural homesteads for subsequent assessments if: 128.28 (1) the property owner abandoned the homestead dwelling 128.29 located on the agricultural homestead as a result of the April 128.30 1997 floods; 128.31 (2) the property is located in the county of Polk, Clay, 128.32 Kittson, Marshall, Norman, or Wilkin; 128.33 (3) the agricultural land and buildings remain under the 128.34 same ownership for the current assessment year as existed for 128.35 the 1997 assessment year and continue to be used for 128.36 agricultural purposes; 129.1 (4) the dwelling occupied by the owner is located in 129.2 Minnesota and is within 30 miles of one of the parcels of 129.3 agricultural land that is owned by the taxpayer; and 129.4 (5) the owner notifies the county assessor that the 129.5 relocation was due to the 1997 floods, and the owner furnishes 129.6 the assessor any information deemed necessary by the assessor in 129.7 verifying the change in dwelling. Further notifications to the 129.8 assessor are not required if the property continues to meet all 129.9 the requirements in this paragraph and any dwellings on the 129.10 agricultural land remain uninhabited. 129.11(e)(f) Agricultural land and buildings that were class 2a 129.12 homestead property under section 273.13, subdivision 23, 129.13 paragraph (a), for the 1998 assessment shall remain classified 129.14 agricultural homesteads for subsequent assessments if: 129.15 (1) the property owner abandoned the homestead dwelling 129.16 located on the agricultural homestead as a result of damage 129.17 caused by a March 29, 1998, tornado; 129.18 (2) the property is located in the county of Blue Earth, 129.19 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 129.20 (3) the agricultural land and buildings remain under the 129.21 same ownership for the current assessment year as existed for 129.22 the 1998 assessment year; 129.23 (4) the dwelling occupied by the owner is located in this 129.24 state and is within 50 miles of one of the parcels of 129.25 agricultural land that is owned by the taxpayer; and 129.26 (5) the owner notifies the county assessor that the 129.27 relocation was due to a March 29, 1998, tornado, and the owner 129.28 furnishes the assessor any information deemed necessary by the 129.29 assessor in verifying the change in homestead dwelling. For 129.30 taxes payable in 1999, the owner must notify the assessor by 129.31 December 1, 1998. Further notifications to the assessor are not 129.32 required if the property continues to meet all the requirements 129.33 in this paragraph and any dwellings on the agricultural land 129.34 remain uninhabited. 129.35 Sec. 15. Minnesota Statutes 1998, section 273.124, is 129.36 amended by adding a subdivision to read: 130.1 Subd. 20. [ADDITIONAL REQUIREMENTS PROHIBITED.] No 130.2 political subdivision may impose any requirements not contained 130.3 in this chapter or chapter 272 to disqualify property from being 130.4 classified as a homestead if the property otherwise meets the 130.5 requirements for homestead treatment under this chapter and 130.6 chapter 272. 130.7 Sec. 16. Minnesota Statutes 1998, section 273.13, 130.8 subdivision 22, is amended to read: 130.9 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 130.10 23, real estate which is residential and used for homestead 130.11 purposes is class 1. The market value of class 1a property must 130.12 be determined based upon the value of the house, garage, and 130.13 land. 130.14 The first$75,000$78,000 of market value of class 1a 130.15 property has a net class rate of one percent of its market 130.16 value; and the market value of class 1a property that 130.17 exceeds$75,000$78,000 has a class rate of1.71.6 percent of 130.18 its market value. 130.19 (b) Class 1b property includes homestead real estate or 130.20 homestead manufactured homes used for the purposes of a 130.21 homestead by 130.22 (1) any blind person, or the blind person and the blind 130.23 person's spouse; or 130.24 (2) any person, hereinafter referred to as "veteran," who: 130.25 (i) served in the active military or naval service of the 130.26 United States; and 130.27 (ii) is entitled to compensation under the laws and 130.28 regulations of the United States for permanent and total 130.29 service-connected disability due to the loss, or loss of use, by 130.30 reason of amputation, ankylosis, progressive muscular 130.31 dystrophies, or paralysis, of both lower extremities, such as to 130.32 preclude motion without the aid of braces, crutches, canes, or a 130.33 wheelchair; and 130.34 (iii) has acquired a special housing unit with special 130.35 fixtures or movable facilities made necessary by the nature of 130.36 the veteran's disability, or the surviving spouse of the 131.1 deceased veteran for as long as the surviving spouse retains the 131.2 special housing unit as a homestead; or 131.3 (3) any person who: 131.4 (i) is permanently and totally disabled and 131.5 (ii) receives 90 percent or more of total household income, 131.6 as defined in section 290A.03, subdivision 5, from 131.7 (A) aid from any state as a result of that disability; or 131.8 (B) supplemental security income for the disabled; or 131.9 (C) workers' compensation based on a finding of total and 131.10 permanent disability; or 131.11 (D) social security disability, including the amount of a 131.12 disability insurance benefit which is converted to an old age 131.13 insurance benefit and any subsequent cost of living increases; 131.14 or 131.15 (E) aid under the federal Railroad Retirement Act of 1937, 131.16 United States Code Annotated, title 45, section 228b(a)5; or 131.17 (F) a pension from any local government retirement fund 131.18 located in the state of Minnesota as a result of that 131.19 disability; or 131.20 (G) pension, annuity, or other income paid as a result of 131.21 that disability from a private pension or disability plan, 131.22 including employer, employee, union, and insurance plans and 131.23 (iii) has household income as defined in section 290A.03, 131.24 subdivision 5, of $50,000 or less; or 131.25 (4) any person who is permanently and totally disabled and 131.26 whose household income as defined in section 290A.03, 131.27 subdivision 5, is 275 percent or less of the federal poverty 131.28 level. 131.29 Property is classified and assessed under clause (4) only 131.30 if the government agency or income-providing source certifies, 131.31 upon the request of the homestead occupant, that the homestead 131.32 occupant satisfies the disability requirements of this paragraph. 131.33 Property is classified and assessed pursuant to clause (1) 131.34 only if the commissioner of economic security certifies to the 131.35 assessor that the homestead occupant satisfies the requirements 131.36 of this paragraph. 132.1 Permanently and totally disabled for the purpose of this 132.2 subdivision means a condition which is permanent in nature and 132.3 totally incapacitates the person from working at an occupation 132.4 which brings the person an income. The first $32,000 market 132.5 value of class 1b property has a net class rate of .45 percent 132.6 of its market value. The remaining market value of class 1b 132.7 property has a net class rate using the rates for class 1 or 132.8 class 2a property, whichever is appropriate, of similar market 132.9 value. 132.10 (c) Class 1c property is commercial use real property that 132.11 abuts a lakeshore line and is devoted to temporary and seasonal 132.12 residential occupancy for recreational purposes but not devoted 132.13 to commercial purposes for more than 250 days in the year 132.14 preceding the year of assessment, and that includes a portion 132.15 used as a homestead by the owner, which includes a dwelling 132.16 occupied as a homestead by a shareholder of a corporation that 132.17 owns the resort or a partner in a partnership that owns the 132.18 resort, even if the title to the homestead is held by the 132.19 corporation or partnership. For purposes of this clause, 132.20 property is devoted to a commercial purpose on a specific day if 132.21 any portion of the property, excluding the portion used 132.22 exclusively as a homestead, is used for residential occupancy 132.23 and a fee is charged for residential occupancy. Class 1c 132.24 property has a class rate of one percent of total market value 132.25 with the following limitation: the area of the property must 132.26 not exceed 100 feet of lakeshore footage for each cabin or 132.27 campsite located on the property up to a total of 800 feet and 132.28 500 feet in depth, measured away from the lakeshore. If any 132.29 portion of the class 1c resort property is classified as class 132.30 4c under subdivision 25, the entire property must meet the 132.31 requirements of subdivision 25, paragraph (d), clause (1), to 132.32 qualify for class 1c treatment under this paragraph. 132.33 (d) Class 1d property includes structures that meet all of 132.34 the following criteria: 132.35 (1) the structure is located on property that is classified 132.36 as agricultural property under section 273.13, subdivision 23; 133.1 (2) the structure is occupied exclusively by seasonal farm 133.2 workers during the time when they work on that farm, and the 133.3 occupants are not charged rent for the privilege of occupying 133.4 the property, provided that use of the structure for storage of 133.5 farm equipment and produce does not disqualify the property from 133.6 classification under this paragraph; 133.7 (3) the structure meets all applicable health and safety 133.8 requirements for the appropriate season; and 133.9 (4) the structure is not salable as residential property 133.10 because it does not comply with local ordinances relating to 133.11 location in relation to streets or roads. 133.12 The market value of class 1d property has the same class 133.13 rates as class 1a property under paragraph (a). 133.14 Sec. 17. Minnesota Statutes 1998, section 273.13, 133.15 subdivision 23, is amended to read: 133.16 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 133.17 land including any improvements that is homesteaded. The market 133.18 value of the house and garage and immediately surrounding one 133.19 acre of land has the same class rates as class 1a property under 133.20 subdivision 22. The value of the remaining land including 133.21 improvements up to $115,000 has a net class rate of0.350.33 133.22 percent of market value. The remaining value of class 2a 133.23 property over $115,000 of market value that does not exceed 320 133.24 acres has a net class rate of0.80.75 percent of market value. 133.25 The remaining property over $115,000 market value in excess of 133.26 320 acres has a class rate of1.251.15 percent of market value. 133.27 (b) Class 2b property is (1) real estate, rural in 133.28 character and used exclusively for growing trees for timber, 133.29 lumber, and wood and wood products; (2) real estate that is not 133.30 improved with a structure and is used exclusively for growing 133.31 trees for timber, lumber, and wood and wood products, if the 133.32 owner has participated or is participating in a cost-sharing 133.33 program for afforestation, reforestation, or timber stand 133.34 improvement on that particular property, administered or 133.35 coordinated by the commissioner of natural resources; (3) real 133.36 estate that is nonhomestead agricultural land; or (4) a landing 134.1 area or public access area of a privately owned public use 134.2 airport. Class 2b property has a net class rate of1.251.15 134.3 percent of market value. 134.4 (c) Agricultural land as used in this section means 134.5 contiguous acreage of ten acres or more, used during the 134.6 preceding year for agricultural purposes. "Agricultural 134.7 purposes" as used in this section means the raising or 134.8 cultivation of agricultural products or enrollment in the 134.9 Reinvest in Minnesota program under sections 103F.501 to 134.10 103F.535 or the federal Conservation Reserve Program as 134.11 contained in Public Law Number 99-198. Contiguous acreage on 134.12 the same parcel, or contiguous acreage on an immediately 134.13 adjacent parcel under the same ownership, may also qualify as 134.14 agricultural land, but only if it is pasture, timber, waste, 134.15 unusable wild land, or land included in state or federal farm 134.16 programs. Agricultural classification for property shall be 134.17 determined excluding the house, garage, and immediately 134.18 surrounding one acre of land, and shall not be based upon the 134.19 market value of any residential structures on the parcel or 134.20 contiguous parcels under the same ownership. 134.21 (d) Real estate, excluding the house, garage, and 134.22 immediately surrounding one acre of land, of less than ten acres 134.23 which is exclusively and intensively used for raising or 134.24 cultivating agricultural products, shall be considered as 134.25 agricultural land. 134.26 Land shall be classified as agricultural even if all or a 134.27 portion of the agricultural use of that property is the leasing 134.28 to, or use by another person for agricultural purposes. 134.29 Classification under this subdivision is not determinative 134.30 for qualifying under section 273.111. 134.31 The property classification under this section supersedes, 134.32 for property tax purposes only, any locally administered 134.33 agricultural policies or land use restrictions that define 134.34 minimum or maximum farm acreage. 134.35 (e) The term "agricultural products" as used in this 134.36 subdivision includes production for sale of: 135.1 (1) livestock, dairy animals, dairy products, poultry and 135.2 poultry products, fur-bearing animals, horticultural and nursery 135.3 stock described in sections 18.44 to 18.61, fruit of all kinds, 135.4 vegetables, forage, grains, bees, and apiary products by the 135.5 owner; 135.6 (2) fish bred for sale and consumption if the fish breeding 135.7 occurs on land zoned for agricultural use; 135.8 (3) the commercial boarding of horses if the boarding is 135.9 done in conjunction with raising or cultivating agricultural 135.10 products as defined in clause (1); 135.11 (4) property which is owned and operated by nonprofit 135.12 organizations used for equestrian activities, excluding racing; 135.13and135.14 (5) game birds and waterfowl bred and raised for use on a 135.15 shooting preserve licensed under section 97A.115; 135.16 (6) insects primarily bred to be used as food for animals; 135.17 and 135.18 (7) trees, grown for sale as a crop, and not sold for 135.19 timber, lumber, wood, or wood products. 135.20 (f) If a parcel used for agricultural purposes is also used 135.21 for commercial or industrial purposes, including but not limited 135.22 to: 135.23 (1) wholesale and retail sales; 135.24 (2) processing of raw agricultural products or other goods; 135.25 (3) warehousing or storage of processed goods; and 135.26 (4) office facilities for the support of the activities 135.27 enumerated in clauses (1), (2), and (3), 135.28 the assessor shall classify the part of the parcel used for 135.29 agricultural purposes as class 1b, 2a, or 2b, whichever is 135.30 appropriate, and the remainder in the class appropriate to its 135.31 use. The grading, sorting, and packaging of raw agricultural 135.32 products for first sale is considered an agricultural purpose. 135.33 A greenhouse or other building where horticultural or nursery 135.34 products are grown that is also used for the conduct of retail 135.35 sales must be classified as agricultural if it is primarily used 135.36 for the growing of horticultural or nursery products from seed, 136.1 cuttings, or roots and occasionally as a showroom for the retail 136.2 sale of those products. Use of a greenhouse or building only 136.3 for the display of already grown horticultural or nursery 136.4 products does not qualify as an agricultural purpose. 136.5 The assessor shall determine and list separately on the 136.6 records the market value of the homestead dwelling and the one 136.7 acre of land on which that dwelling is located. If any farm 136.8 buildings or structures are located on this homesteaded acre of 136.9 land, their market value shall not be included in this separate 136.10 determination. 136.11 (g) To qualify for classification under paragraph (b), 136.12 clause (4), a privately owned public use airport must be 136.13 licensed as a public airport under section 360.018. For 136.14 purposes of paragraph (b), clause (4), "landing area" means that 136.15 part of a privately owned public use airport properly cleared, 136.16 regularly maintained, and made available to the public for use 136.17 by aircraft and includes runways, taxiways, aprons, and sites 136.18 upon which are situated landing or navigational aids. A landing 136.19 area also includes land underlying both the primary surface and 136.20 the approach surfaces that comply with all of the following: 136.21 (i) the land is properly cleared and regularly maintained 136.22 for the primary purposes of the landing, taking off, and taxiing 136.23 of aircraft; but that portion of the land that contains 136.24 facilities for servicing, repair, or maintenance of aircraft is 136.25 not included as a landing area; 136.26 (ii) the land is part of the airport property; and 136.27 (iii) the land is not used for commercial or residential 136.28 purposes. 136.29 The land contained in a landing area under paragraph (b), clause 136.30 (4), must be described and certified by the commissioner of 136.31 transportation. The certification is effective until it is 136.32 modified, or until the airport or landing area no longer meets 136.33 the requirements of paragraph (b), clause (4). For purposes of 136.34 paragraph (b), clause (4), "public access area" means property 136.35 used as an aircraft parking ramp, apron, or storage hangar, or 136.36 an arrival and departure building in connection with the airport. 137.1 Sec. 18. Minnesota Statutes 1998, section 273.13, 137.2 subdivision 24, is amended to read: 137.3 Subd. 24. [CLASS 3.] (a) Commercial and industrial 137.4 property and utility real and personal property, except class 5137.5property as identified in subdivision 31, clause (1),is class 137.6 3a. Each parcel of real property has a class rate of2.452.25 137.7 percent of the first tier of market value, and3.53.25 percent 137.8 of the remaining market value, except that in the case of 137.9 contiguous parcels ofcommercial and industrialproperty owned 137.10 by the same person or entity, only the value equal to the 137.11 first-tier value of the contiguous parcels qualifies for the 137.12 reduced class rate. For the purposes of this subdivision, the 137.13 first tier means the first $150,000 of market value.In the137.14case of utility property owned by one person or entity, only one137.15parcel in each county has a reduced class rate on the first tier137.16of market value.Real property owned in fee by a utility for 137.17 transmission line right-of-way shall be classified at the class 137.18 rate for the higher tier. All personal property shall be 137.19 classified at the class rate for the higher tier. For purposes 137.20 of this subdivision "personal property" means tools, implements, 137.21 and machinery of an electric generating, transmission, or 137.22 distribution system, or a pipeline system transporting or 137.23 distributing water, gas, crude oil, or petroleum products or 137.24 mains and pipes used in the distribution of steam or hot or 137.25 chilled water for heating or cooling buildings, which are 137.26 fixtures. 137.27 For purposes of this paragraph, parcels are considered to 137.28 be contiguous even if they are separated from each other by a 137.29 road, street, vacant lot, waterway, or other similar intervening 137.30 type of property. 137.31 (b) Employment property defined in section 469.166, during 137.32 the period provided in section 469.170, shall constitute class 137.33 3band has a class rate of 2.3 percent of the first $50,000 of137.34market value and 3.5 percent of the remainder, except that for137.35employment property located in a border city enterprise zone137.36designated pursuant to section 469.168, subdivision 4, paragraph138.1(c),. The classrate of the first tier of market value and the138.2class rate of the remainder isrates for class 3b property are 138.3 determined under paragraph (a), unless the governing body of the 138.4 city designated as an enterprise zone determines that a specific 138.5 parcel shall be assessed pursuant to the first clause of this 138.6 sentence. The governing body may provide for assessment under 138.7 the first clause of the preceding sentence only for property 138.8 which is located in an area which has been designated by the 138.9 governing body for the receipt of tax reductions authorized by 138.10 section 469.171, subdivision 1. 138.11 (c)(1) Subject to the limitations of clause (2), structures 138.12 which are (i) located on property classified as class 3a, (ii) 138.13 constructed under an initial building permit issued after 138.14 January 2, 1996, (iii) located in a transit zone as defined 138.15 under section 473.3915, subdivision 3, (iv) located within the 138.16 boundaries of a school district, and (v) not primarily used for 138.17 retail or transient lodging purposes, shall have a class rate 138.18 equalto 85 percent ofto the lesser of 2.975 percent or the 138.19 class rate of the second tier of the commercial property rate 138.20 under paragraph (a) on any portion of the market value that does 138.21 not qualify for the first tier class rate under paragraph (a). 138.22 As used in item (v), a structure is primarily used for retail or 138.23 transient lodging purposes if over 50 percent of its square 138.24 footage is used for those purposes. A class rate equal to85138.25percent ofthe lesser of 2.975 percent or the class rate of the 138.26 second tier of the commercial property class rate under 138.27 paragraph (a) shall also apply to improvements to existing 138.28 structures that meet the requirements of items (i) to (v) if the 138.29 improvements are constructed under an initial building permit 138.30 issued after January 2, 1996, even if the remainder of the 138.31 structure was constructed prior to January 2, 1996. For the 138.32 purposes of this paragraph, a structure shall be considered to 138.33 be located in a transit zone if any portion of the structure 138.34 lies within the zone. If any property once eligible for 138.35 treatment under this paragraph ceases to remain eligible due to 138.36 revisions in transit zone boundaries, the property shall 139.1 continue to receive treatment under this paragraph for a period 139.2 of three years. 139.3 (2) This clause applies to any structure qualifying for the 139.4 transit zone reduced class rate under clause (1) on January 2, 139.5 1999, or any structure meeting any of the qualification criteria 139.6 in item (i) and otherwise qualifying for the transit zone 139.7 reduced class rate under clause (1). Such a structure continues 139.8 to receive the transit zone reduced class rate until the 139.9 occurrence of one of the events in item (ii). Property 139.10 qualifying under item (i)(D), that is located outside of a city 139.11 of the first class, permanently qualifies for the transit zone 139.12 reduced class rate. 139.13 (i) A structure qualifies for the rate in this clause if it 139.14 is: 139.15 (A) property for which a building permit was issued before 139.16 December 31, 1998; or 139.17 (B) property for which a building permit was issued before 139.18 June 30, 2001, if: 139.19 (I) at least 50 percent of the land on which the structure 139.20 is to be built has been acquired or is the subject of signed 139.21 purchase agreements or signed options as of March 15, 1998, by 139.22 the entity that proposes construction of the project or an 139.23 affiliate of the entity; 139.24 (II) signed agreements have been entered into with one 139.25 entity or with affiliated entities to lease for the account of 139.26 the entity or affiliated entities at least 50 percent of the 139.27 square footage of the structure or the owner of the structure 139.28 will occupy at least 50 percent of the square footage of the 139.29 structure; and 139.30 (III) one of the following requirements is met: 139.31 the project proposer has submitted the completed data 139.32 portions of an environmental assessment worksheet by December 139.33 31, 1998; or 139.34 a notice of determination of adequacy of an environmental 139.35 impact statement has been published by April 1, 1999; or 139.36 an alternative urban areawide review has been completed by 140.1 April 1, 1999; or 140.2 (C) property for which a building permit is issued before 140.3 July 30, 1999, if: 140.4 (I) at least 50 percent of the land on which the structure 140.5 is to be built has been acquired or is the subject of signed 140.6 purchase agreements as of March 31, 1998, by the entity that 140.7 proposes construction of the project or an affiliate of the 140.8 entity; 140.9 (II) a signed agreement has been entered into between the 140.10 building developer and a tenant to lease for its own account at 140.11 least 200,000 square feet of space in the building; 140.12 (III) a signed letter of intent is entered into by July 1, 140.13 1998, between the building developer and the tenant to lease the 140.14 space for its own account; and 140.15 (IV) the environmental review process required by state law 140.16 was commenced by December 31, 1998; or 140.17 (D) property for which an irrevocable letter of credit with 140.18 a housing and redevelopment authority was signed before December 140.19 31, 1998. 140.20 (ii) A structure specified by this clause shall continue to 140.21 receive the transit zone reduced class rate until the occurrence 140.22 of one of the following events: 140.23 (A) if the structure upon initial occupancy will be owner 140.24 occupied by the entity initially constructing the structure or 140.25 an affiliated entity, the structure receives the reduced class 140.26 rate until the structure ceases to be at least 50 percent 140.27 occupied by the entity or an affiliated entity, provided, if the 140.28 portion of the structure occupied by that entity or an affiliate 140.29 of the entity is less than 85 percent, the transit zone class 140.30 rate reduction for the portion of structure not so occupied 140.31 terminates upon the leasing of such space to any nonaffiliated 140.32 entity; or 140.33 (B) if the structure is leased by a single entity or 140.34 affiliated entity at the time of initial occupancy, the 140.35 structure shall receive the reduced class rate until the 140.36 structure ceases to be at least 50 percent occupied by the 141.1 entity or an affiliated entity, provided, if the portion of the 141.2 structure occupied by that entity or an affiliate of the entity 141.3 is less than 85 percent, the transit zone class rate reduction 141.4 for the portion of structure not so occupied shall terminate 141.5 upon the leasing of such space to any nonaffiliated entity; or 141.6 (C) if the structure meets the criteria in item (i)(C), the 141.7 structure shall receive the reduced class rate until the 141.8 expiration of the initial lease term of the applicable tenants. 141.9 Percentages occupied or leased shall be determined based 141.10 upon net leasable square footage in the structure. The assessor 141.11 shall allocate the value of the structure in the same fashion as 141.12 provided in the general law for portions of any structure 141.13 receiving and not receiving the transit tax class reduction as a 141.14 result of this clause. 141.15 Sec. 19. Minnesota Statutes 1998, section 273.13, is 141.16 amended by adding a subdivision to read: 141.17 Subd. 24a. [TRANSIT ZONE PROPERTIES; PERSONAL PROPERTY 141.18 TAX.] (a) Notwithstanding the provisions of section 272.02 or 141.19 any other law to the contrary, a personal property tax is 141.20 imposed on the leasehold of a tenant of a structure described in 141.21 subdivision 24, paragraph (c), clause (2), item (i)(C). 141.22 (b) The tax equals the amount obtained by multiplying the 141.23 sum of the local tax rates by: 141.24 (1) the estimated market value of the structure multiplied 141.25 by 141.26 (2) the square footage of the structure under lease that 141.27 qualifies under subdivision 24, clause (c)(1), divided by 141.28 (3) the total square footage of the structure that 141.29 qualifies under subdivision 24, clause (c)(1), multiplied by 141.30 (4) the difference between the class rate under subdivision 141.31 24, paragraph (a), for the second tier and the class rate under 141.32 subdivision 24, paragraph (c), for the second tier for the 141.33 qualifying parts of a structure. 141.34 (c) The tax under this subdivision does not apply to a 141.35 lease that: 141.36 (1) was executed before May 1, 1999; 142.1 (2) was entered according to a binding written agreement 142.2 executed before May 1, 1999; or 142.3 (3) is a lease entered under an expansion option contained 142.4 in a lease or binding written agreement qualifying under clause 142.5 (1) or (2). 142.6 (d) The tax imposed under this subdivision is a personal 142.7 property tax and is imposed on the lessee or tenant and not on 142.8 the structure or the real property. The tax is an obligation of 142.9 the lessee or tenant and must be collected in the manner 142.10 provided for personal property taxes. 142.11 (e) The personal property tax applies only to a year in 142.12 which the leased structure qualifies for the transit zone class 142.13 rate. 142.14 Sec. 20. Minnesota Statutes 1998, section 273.13, 142.15 subdivision 25, is amended to read: 142.16 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 142.17 estate containing four or more units and used or held for use by 142.18 the owner or by the tenants or lessees of the owner as a 142.19 residence for rental periods of 30 days or more. Class 4a also 142.20 includes hospitals licensed under sections 144.50 to 144.56, 142.21 other than hospitals exempt under section 272.02, and contiguous 142.22 property used for hospital purposes, without regard to whether 142.23 the property has been platted or subdivided. Class 4a property 142.24 in a city with a population of 5,000 or less, that is (1) 142.25 located outside of the metropolitan area, as defined in section 142.26 473.121, subdivision 2, or outside any county contiguous to the 142.27 metropolitan area, and (2) whose city boundary is at least 15 142.28 miles from the boundary of any city with a population greater 142.29 than 5,000 has a class rate of 2.15 percent of market value. 142.30 All other class 4a property has a class rate of2.52.25 percent 142.31 of market value. For purposes of this paragraph, population has 142.32 the same meaning given in section 477A.011, subdivision 3. 142.33 (b) Class 4b includes: 142.34 (1) residential real estate containing less than four units 142.35 that does not qualify as class 4bb, other than seasonal 142.36 residential, and recreational; 143.1 (2) manufactured homes not classified under any other 143.2 provision; 143.3 (3) a dwelling, garage, and surrounding one acre of 143.4 property on a nonhomestead farm classified under subdivision 23, 143.5 paragraph (b) containing two or three units; 143.6 (4) unimproved property that is classified residential as 143.7 determined under subdivision 33. 143.8 Class 4b property has a class rate of1.71.6 percent of 143.9 market value. 143.10 (c) Class 4bb includes: 143.11 (1) nonhomestead residential real estate containing one 143.12 unit, other than seasonal residential, and recreational; and 143.13 (2) a single family dwelling, garage, and surrounding one 143.14 acre of property on a nonhomestead farm classified under 143.15 subdivision 23, paragraph (b). 143.16 Class 4bb has a class rate of1.251.15 percent on the 143.17 first$75,000$78,000 of market value and a class rate of1.7143.18 1.6 percent of its market value that exceeds$75,000$78,000. 143.19 Property that has been classified as seasonal recreational 143.20 residential property at any time during which it has been owned 143.21 by the current owner or spouse of the current owner does not 143.22 qualify for class 4bb. 143.23 (d) Class 4c property includes: 143.24 (1) except as provided in subdivision 22, paragraph (c), 143.25 real property devoted to temporary and seasonal residential 143.26 occupancy for recreation purposes, including real property 143.27 devoted to temporary and seasonal residential occupancy for 143.28 recreation purposes and not devoted to commercial purposes for 143.29 more than 250 days in the year preceding the year of 143.30 assessment. For purposes of this clause, property is devoted to 143.31 a commercial purpose on a specific day if any portion of the 143.32 property is used for residential occupancy, and a fee is charged 143.33 for residential occupancy. In order for a property to be 143.34 classified as class 4c, seasonal recreational residential for 143.35 commercial purposes, at least 40 percent of the annual gross 143.36 lodging receipts related to the property must be from business 144.1 conducted during 90 consecutive days and either (i) at least 60 144.2 percent of all paid bookings by lodging guests during the year 144.3 must be for periods of at least two consecutive nights; or (ii) 144.4 at least 20 percent of the annual gross receipts must be from 144.5 charges for rental of fish houses, boats and motors, 144.6 snowmobiles, downhill or cross-country ski equipment, or charges 144.7 for marina services, launch services, and guide services, or the 144.8 sale of bait and fishing tackle. For purposes of this 144.9 determination, a paid booking of five or more nights shall be 144.10 counted as two bookings. Class 4c also includes commercial use 144.11 real property used exclusively for recreational purposes in 144.12 conjunction with class 4c property devoted to temporary and 144.13 seasonal residential occupancy for recreational purposes, up to 144.14 a total of two acres, provided the property is not devoted to 144.15 commercial recreational use for more than 250 days in the year 144.16 preceding the year of assessment and is located within two miles 144.17 of the class 4c property with which it is used. Class 4c 144.18 property classified in this clause also includes the remainder 144.19 of class 1c resorts provided that the entire property including 144.20 that portion of the property classified as class 1c also meets 144.21 the requirements for class 4c under this clause; otherwise the 144.22 entire property is classified as class 3. Owners of real 144.23 property devoted to temporary and seasonal residential occupancy 144.24 for recreation purposes and all or a portion of which was 144.25 devoted to commercial purposes for not more than 250 days in the 144.26 year preceding the year of assessment desiring classification as 144.27 class 1c or 4c, must submit a declaration to the assessor 144.28 designating the cabins or units occupied for 250 days or less in 144.29 the year preceding the year of assessment by January 15 of the 144.30 assessment year. Those cabins or units and a proportionate 144.31 share of the land on which they are located will be designated 144.32 class 1c or 4c as otherwise provided. The remainder of the 144.33 cabins or units and a proportionate share of the land on which 144.34 they are located will be designated as class 3a. The owner of 144.35 property desiring designation as class 1c or 4c property must 144.36 provide guest registers or other records demonstrating that the 145.1 units for which class 1c or 4c designation is sought were not 145.2 occupied for more than 250 days in the year preceding the 145.3 assessment if so requested. The portion of a property operated 145.4 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 145.5 nonresidential facility operated on a commercial basis not 145.6 directly related to temporary and seasonal residential occupancy 145.7 for recreation purposes shall not qualify for class 1c or 4c; 145.8 (2) qualified property used as a golf course if: 145.9 (i) it is open to the public on a daily fee basis. It may 145.10 charge membership fees or dues, but a membership fee may not be 145.11 required in order to use the property for golfing, and its green 145.12 fees for golfing must be comparable to green fees typically 145.13 charged by municipal courses; and 145.14 (ii) it meets the requirements of section 273.112, 145.15 subdivision 3, paragraph (d). 145.16 A structure used as a clubhouse, restaurant, or place of 145.17 refreshment in conjunction with the golf course is classified as 145.18 class 3a property. 145.19 (3) real property up to a maximum of one acre of land owned 145.20 by a nonprofit community service oriented organization; provided 145.21 that the property is not used for a revenue-producing activity 145.22 for more than six days in the calendar year preceding the year 145.23 of assessment and the property is not used for residential 145.24 purposes on either a temporary or permanent basis. For purposes 145.25 of this clause, a "nonprofit community service oriented 145.26 organization" means any corporation, society, association, 145.27 foundation, or institution organized and operated exclusively 145.28 for charitable, religious, fraternal, civic, or educational 145.29 purposes, and which is exempt from federal income taxation 145.30 pursuant to section 501(c)(3), (10), or (19) of the Internal 145.31 Revenue Code of 1986, as amended through December 31, 1990. For 145.32 purposes of this clause, "revenue-producing activities" shall 145.33 include but not be limited to property or that portion of the 145.34 property that is used as an on-sale intoxicating liquor or 3.2 145.35 percent malt liquor establishment licensed under chapter 340A, a 145.36 restaurant open to the public, bowling alley, a retail store, 146.1 gambling conducted by organizations licensed under chapter 349, 146.2 an insurance business, or office or other space leased or rented 146.3 to a lessee who conducts a for-profit enterprise on the 146.4 premises. Any portion of the property which is used for 146.5 revenue-producing activities for more than six days in the 146.6 calendar year preceding the year of assessment shall be assessed 146.7 as class 3a. The use of the property for social events open 146.8 exclusively to members and their guests for periods of less than 146.9 24 hours, when an admission is not charged nor any revenues are 146.10 received by the organization shall not be considered a 146.11 revenue-producing activity; 146.12 (4) post-secondary student housing of not more than one 146.13 acre of land that is owned by a nonprofit corporation organized 146.14 under chapter 317A and is used exclusively by a student 146.15 cooperative, sorority, or fraternity for on-campus housing or 146.16 housing located within two miles of the border of a college 146.17 campus; 146.18 (5) manufactured home parks as defined in section 327.14, 146.19 subdivision 3; and 146.20 (6) real property that is actively and exclusively devoted 146.21 to indoor fitness, health, social, recreational, and related 146.22 uses, is owned and operated by a not-for-profit corporation, and 146.23 is located within the metropolitan area as defined in section 146.24 473.121, subdivision 2. 146.25 Class 4c property has a class rate of1.81.6 percent of 146.26 market value, except that (i)foreach parcel of seasonal 146.27 residential recreational property not used for commercial 146.28 purposesthe first $75,000 of market value has a class rate of146.291.25 percent, and the market value that exceeds $75,000 has a146.30class rate of 2.2 percenthas the same class rates as class 4bb 146.31 property, (ii) manufactured home parks assessed under clause (5) 146.32 haveathe same class rateof two percentas class 4b property, 146.33 and (iii) property described in paragraph (d), clause (4), has 146.34 the same class rate as the rate applicable to the first tier of 146.35 class 4bb nonhomestead residential real estate under paragraph 146.36 (c). 147.1 (e) Class 4d property is qualifying low-income rental 147.2 housing certified to the assessor by the housing finance agency 147.3 under sections 273.126 and 462A.071. Class 4d includes land in 147.4 proportion to the total market value of the building that is 147.5 qualifying low-income rental housing. For all properties 147.6 qualifying as class 4d, the market value determined by the 147.7 assessor must be based on the normal approach to value using 147.8 normal unrestricted rents. 147.9 Class 4d property has a class rate of one percent of market 147.10 value. 147.11(f) Class 4e property consists of the residential portion147.12of any structure located within a city that was converted from147.13nonresidential use to residential use, provided that:147.14(1) the structure had formerly been used as a warehouse;147.15(2) the structure was originally constructed prior to 1940;147.16(3) the conversion was done after December 31, 1995, but147.17before January 1, 2003; and147.18(4) the conversion involved an investment of at least147.19$25,000 per residential unit.147.20Class 4e property has a class rate of 2.3 percent, provided147.21that a structure is eligible for class 4e classification only in147.22the 12 assessment years immediately following the conversion.147.23 (f) Class 4f property consists of any parcel, portion of a 147.24 parcel, or contiguous parcels of unimproved real estate, 147.25 excluding agricultural land classified under subdivision 23 that 147.26 meets the requirements in clauses (1) to (4): 147.27 (1) the property consists of at least 300 contiguous feet 147.28 of unimproved real estate that borders a meandered lake as 147.29 contained in section 103G.005, subdivisions 11 and 15, clause 147.30 (3); 147.31 (2) the unimproved real estate is located within 400 feet 147.32 from the ordinary high water elevation of the meandered lake. 147.33 For purposes of this clause, "unimproved" means that the 147.34 property qualifying under this paragraph has: 147.35 (i) no structures; 147.36 (ii) no docks or landings on its shoreline; 148.1 (iii) undisturbed natural terrain and vegetation; and 148.2 (iv) no on-site sewage disposal on the property; 148.3 (3) the owner files an application with the county assessor 148.4 by July 1 for classification under this paragraph for the 148.5 subsequent assessment year; and 148.6 (4) the owner of the property signs a covenant agreement 148.7 and files a copy of the covenant with the county assessor and 148.8 files for record the original covenant agreement with the county 148.9 recorder or registrar in the county where the property is 148.10 located. The commissioner of revenue shall prepare a 148.11 standardized covenant agreement form for use under this 148.12 classification and make copies available to each county. The 148.13 covenant agreement must include all of the following: 148.14 (i) a legal description of the area to which the covenant 148.15 applies; 148.16 (ii) the name and address of the owner; 148.17 (iii) a statement that the land described in the covenant 148.18 must be kept as undeveloped land for the duration of the 148.19 covenant; 148.20 (iv) a statement that the landowner may initiate expiration 148.21 of the covenant agreement by notifying the county assessor and 148.22 filing a notice for record with the county recorder or 148.23 registrar, in writing, with the date of expiration which must be 148.24 at least ten years from the date of the expiration notice; 148.25 (v) a statement that the covenant is binding on the owner 148.26 or owner's successor or assignee and runs with the land; and 148.27 (vi) a witnessed signature of the owner covenanting to keep 148.28 the land in its undeveloped state as it existed on the date the 148.29 covenant was signed. 148.30 Upon expiration of a covenant agreement in clause (4), the 148.31 property which is sold is subject to additional taxes. The 148.32 amount of additional taxes due on the property equals the 148.33 difference between the taxes actually levied and the taxes that 148.34 would have been imposed if the property had been valued and 148.35 classified if class 4f did not apply. The additional taxes must 148.36 be extended against the property on the tax list for the current 149.1 year. No interest or penalties may be levied on the additional 149.2 taxes if timely paid, and the additional taxes must be levied 149.3 only with respect to the last ten years that the property was 149.4 valued and assessed as class 4f property. 149.5 The tax imposed under this paragraph is a lien on the 149.6 property assessed to the same extent and for the same duration 149.7 as other real property taxes. The tax must be extended by the 149.8 county auditor and, when payable, be collected and distributed 149.9 in the same manner provided by law for the collection and 149.10 distribution of other property taxes. 149.11 Class 4f has a class rate of 1.0 percent of market value. 149.12 Sec. 21. Minnesota Statutes 1998, section 273.13, 149.13 subdivision 31, is amended to read: 149.14 Subd. 31. [CLASS 5.] Class 5 property includes: 149.15 (1)tools, implements, and machinery of an electric149.16generating, transmission, or distribution system or a pipeline149.17system transporting or distributing water, gas, crude oil, or149.18petroleum products or mains and pipes used in the distribution149.19of steam or hot or chilled water for heating or cooling149.20buildings, which are fixtures;149.21(2)unmined iron ore and low-grade iron-bearing formations 149.22 as defined in section 273.14; and 149.23(3)(2) all other property not otherwise classified. 149.24 Class 5 property has a class rate of3.53.25 percent of 149.25 market value. 149.26 Sec. 22. Minnesota Statutes 1998, section 273.1382, is 149.27 amended to read: 149.28 273.1382 [EDUCATION HOMESTEAD CREDIT; EDUCATION 149.29 AGRICULTURAL CREDIT.] 149.30 Subdivision 1. [EDUCATIONHOMESTEADCREDIT TAX RATE.] Each 149.31 year, the respective county auditors shall determine the initial 149.32 tax rate for each school district for the general education levy 149.33 certified under section 126C.13, subdivision 2 or 3. That rate 149.34 plus the school district's education homestead credit tax rate 149.35 adjustment under section 275.08, subdivision 1e, shall be the 149.36 general educationhomesteadcreditlocaltax rate for the 150.1 district.The150.2 Subd. 1a. [EDUCATION HOMESTEAD CREDIT.] Each county 150.3 auditor shallthendetermine a general education homestead 150.4 credit for each homestead within the county equal to6866.2 150.5 percent for taxes payable in 1999 and6996 percent for taxes 150.6 payable in 2000 and thereafter of thegeneraleducation 150.7homesteadcreditlocaltax rate times the net tax capacity of 150.8 the homestead for the taxes payable year. The amount of general 150.9 education homestead credit for a homestead may not exceed $320 150.10 for taxes payable in 1999 and$335$450 for taxes payable in 150.11 2000 and thereafter. In the case of an agricultural homestead, 150.12 only the net tax capacity of the house, garage, and surrounding 150.13 one acre of land shall be used in determining the property's 150.14 education homestead credit. 150.15Subd. 1a. [CREDIT PERCENTAGE REDUCTION.] If the general150.16education levy target for fiscal year 2000 or 2001 is increased150.17by another law enacted prior to the 1999 legislative session,150.18the commissioner of revenue shall adjust the percentage rates of150.19the education homestead credit for the corresponding taxes150.20payable year by multiplying the percentage rate by the ratio of150.21the prior general education levy target to the current general150.22education levy target. If an adjustment is made under this150.23section for fiscal year 2001, the adjusted rate shall remain in150.24effect for future years until amended by subsequent legislation.150.25 Subd. 1b. [EDUCATION AGRICULTURAL CREDIT.] Property 150.26 classified as class 2a agricultural homestead or class 2b 150.27 agricultural nonhomestead is eligible for education agricultural 150.28 credit. The credit is equal to 50 percent, in the case of 150.29 agricultural homestead property, or 40 percent, in the case of 150.30 agricultural nonhomestead property, of the property's net tax 150.31 capacity times the education credit tax rate determined in 150.32 subdivision 1. The net tax capacity of class 2a property 150.33 attributable to the house, garage, and surrounding one acre of 150.34 land is not eligible for the credit under this subdivision. 150.35 Subd. 2. [CREDIT REIMBURSEMENTS.] (a) The commissioner of 150.36 revenue shall determine the tax reductions allowed under this 151.1 section for each taxes payable year, and for each school 151.2 district based upon a review of the abstracts of tax lists 151.3 submitted by the county auditors under section 275.29, and from 151.4 any other information which the commissioner deems relevant. 151.5 The commissioner of revenue shall generally compute the tax 151.6 reductions at the unique taxing jurisdiction level, however the 151.7 commissioner may compute the tax reductions at a higher 151.8 geographic level if that would have a negligible impact, or if 151.9 changes in the composition of unique taxing jurisdictions do not 151.10 permit computation at the unique taxing jurisdiction level. The 151.11 commissioner's determinations under this paragraph are not rules. 151.12 (b) The commissioner of revenue shall certify the total of 151.13 the tax reductions granted under this section for each taxes 151.14 payable year within each school district to the commissioner of 151.15 children, families, and learning after July 1 and on or before 151.16 August 1 of the taxes payable year. The commissioner of 151.17 children, families, and learning shall reimburse each affected 151.18 school district for the amount of the property tax reductions 151.19 allowed under this section as provided in section 273.1392. The 151.20 commissioner of children, families, and learning shall treat the 151.21 reimbursement payments as entitlements for the same state fiscal 151.22 year as certified, including with each district's initial 151.23 payment all amounts that would have been paid up to that date, 151.24 computed as if 90 percent of the annual reimbursement amount for 151.25 the district were being paid one-twelfth in each month of the 151.26 fiscal year. 151.27 Subd. 3. [APPROPRIATION.] An amount sufficient to make the 151.28 payments required by this section is annually appropriated from 151.29 the general fund to the commissioner of children, families, and 151.30 learning. 151.31 Sec. 23. Minnesota Statutes 1998, section 273.1398, 151.32 subdivision 8, is amended to read: 151.33 Subd. 8. [APPROPRIATION.] (a) An amount sufficient to pay 151.34 the aids and credits provided under this section for school 151.35 districts, intermediate school districts, or any group of school 151.36 districts levying as a single taxing entity, is annually 152.1 appropriated from the general fund to the commissioner of 152.2 children, families, and learning. An amount sufficient to pay 152.3 the aids and credits provided under this section for counties, 152.4 cities, towns, and special taxing districts is annually 152.5 appropriated from the general fund to the commissioner of 152.6 revenue. A jurisdiction's aid amount may be increased or 152.7 decreased based on any prior year adjustments for homestead 152.8 credit or other property tax credit or aid programs. 152.9 (b) The commissioner of finance shall bill the commissioner 152.10 of revenue for the cost of preparation of local impact notes as 152.11 required by section 3.987 only to the extent to which those 152.12 costs exceed those costs incurred in fiscal year 1997 and for 152.13 any other new costs attributable to the local impact note 152.14 function required by section 3.987, not to exceed $100,000 in a 152.15 fiscal year1998 and $200,000 in fiscal year 1999 and thereafter. 152.16 The commissioner of revenue shall deduct the amount billed 152.17 under this paragraph from aid payments to be made to cities and 152.18 counties under subdivision 2 on a pro rata basis. The amount 152.19 deducted under this paragraph is appropriated to the 152.20 commissioner of finance for the preparation of local impact 152.21 notes. 152.22 Sec. 24. Minnesota Statutes 1998, section 273.20, is 152.23 amended to read: 152.24 273.20 [ASSESSOR MAY ENTER DWELLINGS, BUILDINGS, OR 152.25 STRUCTURES.] 152.26 Any officer authorized by law to assess property for 152.27 taxation may, when necessary to the proper performance of 152.28 duties, enter any dwelling-house, building, or structure, and 152.29 view the same and the property therein. 152.30 Any officer authorized by law to assess property for ad 152.31 valorem tax purposes shall have reasonable access to land and 152.32 structures as necessary for the proper performance of their 152.33 duties. A property owner may refuse to allow an assessor to 152.34 inspect their property. This refusal by the property owner must 152.35 be either verbal or expressly stated in a letter to the county 152.36 assessor. If the assessor is denied access to view a property, 153.1 the assessor is authorized to estimate the property's estimated 153.2 market value by making assumptions believed appropriate 153.3 concerning the property's finish and condition. 153.4 Sec. 25. Minnesota Statutes 1998, section 274.01, 153.5 subdivision 1, is amended to read: 153.6 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 153.7 GRIEVANCES.] (a) The town board of a town, or the council or 153.8 other governing body of a city, is the board of review except 153.9 (1) in cities whose charters provide for a board of equalization 153.10 or (2) in any city or town that has transferred its local board 153.11 of review power and duties to the county board as provided in 153.12 subdivision 3. The county assessor shall fix a day and time 153.13 when the board or the board of equalization shall meet in the 153.14 assessment districts of the county. On or before February 15 of 153.15 each year the assessor shall give written notice of the time to 153.16 the city or town clerk. Notwithstanding the provisions of any 153.17 charter to the contrary, the meetings must be held between April 153.18 1 and May 31 each year. The clerk shall give published and 153.19 posted notice of the meeting at least ten days before the date 153.20 of the meeting. 153.21 If in any county, at least 25 percent of the total net tax 153.22 capacity of a city or town is noncommercial seasonal residential 153.23 recreational property classified under section 273.13, 153.24 subdivision 25, the county must hold two countywide 153.25 informational meetings on Saturdays. The meetings will allow 153.26 noncommercial seasonal residential recreational taxpayers to 153.27 discuss their property valuation with the appropriate assessment 153.28 staff. These Saturday informational meetings must be scheduled 153.29 to allow the owner of the noncommercial seasonal residential 153.30 recreational property the opportunity to attend one of the 153.31 meetings prior to the scheduled board of review for their city 153.32 or town. The Saturday meeting dates must be contained on the 153.33 notice of valuation of real property under section 273.121. 153.34 The board shall meet at the office of the clerk to review 153.35 the assessment and classification of property in the town or 153.36 city. No changes in valuation or classification which are 154.1 intended to correct errors in judgment by the county assessor 154.2 may be made by the county assessor after the board of review has 154.3 adjourned in those cities or towns that hold a local board of 154.4 review; however, corrections of errors that are merely clerical 154.5 in nature or changes that extend homestead treatment to property 154.6 are permitted after adjournment until the tax extension date for 154.7 that assessment year. The changes must be fully documented and 154.8 maintained in the assessor's office and must be available for 154.9 review by any person. A copy of the changes made during this 154.10 period in those cities or towns that hold a local board of 154.11 review must be sent to the county board no later than December 154.12 31 of the assessment year. 154.13 (b) The board shall determine whether the taxable property 154.14 in the town or city has been properly placed on the list and 154.15 properly valued by the assessor. If real or personal property 154.16 has been omitted, the board shall place it on the list with its 154.17 market value, and correct the assessment so that each tract or 154.18 lot of real property, and each article, parcel, or class of 154.19 personal property, is entered on the assessment list at its 154.20 market value. No assessment of the property of any person may 154.21 be raised unless the person has been duly notified of the intent 154.22 of the board to do so. On application of any person feeling 154.23 aggrieved, the board shall review the assessment or 154.24 classification, or both, and correct it as appears just. The 154.25 board may not make an individual market value adjustment or 154.26 classification change that would benefit the property in cases 154.27 where the owner or other person having control over the property 154.28 will not permit the assessor to inspect the property and the 154.29 interior of any buildings or structures. 154.30 (c) A local board of review may reduce assessments upon 154.31 petition of the taxpayer but the total reductions must not 154.32 reduce the aggregate assessment made by the county assessor by 154.33 more than one percent. If the total reductions would lower the 154.34 aggregate assessments made by the county assessor by more than 154.35 one percent, none of the adjustments may be made. The assessor 154.36 shall correct any clerical errors or double assessments 155.1 discovered by the board of review without regard to the one 155.2 percent limitation. 155.3 (d) A majority of the members may act at the meeting, and 155.4 adjourn from day to day until they finish hearing the cases 155.5 presented. The assessor shall attend, with the assessment books 155.6 and papers, and take part in the proceedings, but must not 155.7 vote. The county assessor, or an assistant delegated by the 155.8 county assessor shall attend the meetings. The board shall list 155.9 separately, on a form appended to the assessment book, all 155.10 omitted property added to the list by the board and all items of 155.11 property increased or decreased, with the market value of each 155.12 item of property, added or changed by the board, placed opposite 155.13 the item. The county assessor shall enter all changes made by 155.14 the board in the assessment book. 155.15 (e) Except as provided in subdivision 3, if a person fails 155.16 to appear in person, by counsel, or by written communication 155.17 before the board after being duly notified of the board's intent 155.18 to raise the assessment of the property, or if a person feeling 155.19 aggrieved by an assessment or classification fails to apply for 155.20 a review of the assessment or classification, the person may not 155.21 appear before the county board of equalization for a review of 155.22 the assessment or classification. This paragraph does not apply 155.23 if an assessment was made after the board meeting, as provided 155.24 in section 273.01, or if the person can establish not having 155.25 received notice of market value at least five days before the 155.26 local board of review meeting. 155.27 (f) The board of review or the board of equalization must 155.28 complete its work and adjourn within 20 days from the time of 155.29 convening stated in the notice of the clerk, unless a longer 155.30 period is approved by the commissioner of revenue. No action 155.31 taken after that date is valid. All complaints about an 155.32 assessment or classification made after the meeting of the board 155.33 must be heard and determined by the county board of 155.34 equalization. A nonresident may, at any time, before the 155.35 meeting of the board of review file written objections to an 155.36 assessment or classification with the county assessor. The 156.1 objections must be presented to the board of review at its 156.2 meeting by the county assessor for its consideration. 156.3 Sec. 26. Minnesota Statutes 1998, section 276.131, is 156.4 amended to read: 156.5 276.131 [DISTRIBUTION OF PENALTIES, INTEREST, AND COSTS.] 156.6 The penalties, interest, and costs collected on special 156.7 assessments and real and personal property taxes must be 156.8 distributed as follows: 156.9 (1) all penalties and interest collected on special 156.10 assessments against real or personal property must be 156.11 distributed to the taxing jurisdiction that levied the 156.12 assessment; 156.13 (2) (i) 50 percent of all penalties and interest collected 156.14 on real and personal property taxes must be distributed to the 156.15county in which the property is locatedschool districts within 156.16 the county, and 156.17 (ii) theotherremaining 50 percent must be distributedto156.18the school districts within the countyas follows: 156.19 (A) the county shall receive the monies from penalties; 156.20 (B) the city or town where the property is located shall 156.21 receive a share of the amount of interest equal to the 156.22 proportion that the city's or town's local tax rate for the year 156.23 that the interest was collected, is to the sum of the city's or 156.24 town's local tax rate and the county's local tax rate for the 156.25 year that the interest was collected; and 156.26 (C) the balance must be distributed to the county. 156.27 The distribution to the school district must be in 156.28 accordance with the provisions of section 127A.34; and 156.29 (3) all costs collected by the county on special 156.30 assessments and on delinquent real and personal property taxes 156.31 must be distributed to the county in which the property is 156.32 located. 156.33 Sec. 27. Minnesota Statutes 1998, section 290B.03, 156.34 subdivision 1, is amended to read: 156.35 Subdivision 1. [PROGRAM QUALIFICATIONS.] The 156.36 qualifications for the senior citizens' property tax deferral 157.1 program are as follows: 157.2 (1) the property must be owned and occupied as a homestead 157.3 by a person 65 years of age or older. In the case of a married 157.4 couple, both of the spouses must be at least 65 years old at the 157.5 time the first property tax deferral is granted, regardless of 157.6 whether the property is titled in the name of one spouse or both 157.7 spouses, or titled in another way that permits the property to 157.8 have homestead status; 157.9 (2) the total household income of the qualifying 157.10 homeowners, as defined in section 290A.03, subdivision 5, for 157.11 the calendar year preceding the year of the initial application 157.12 may not exceed$30,000$60,000; 157.13 (3) the homestead must have been owned and occupied as the 157.14 homestead of at least one of the qualifying homeowners for at 157.15 least 15 years prior to the year the initial application is 157.16 filed; 157.17 (4) there are no delinquent property taxes, penalties, or 157.18 interest on the homesteaded property; 157.19 (5) there are no delinquent special assessments on the 157.20 homesteaded property; 157.21 (6) there are no state or federal tax liens or judgment 157.22 liens on the homesteaded property; 157.23 (7) there are no mortgages or other liens on the property 157.24 that secure future advances, except for those subject to credit 157.25 limits that result in compliance with clause (8); and 157.26 (8) the total unpaid balances of debts secured by mortgages 157.27 and other liens on the property, including unpaid special 157.28 assessments, but not including property taxes payable during the 157.29 year, does not exceed 30 percent of the assessor's estimated 157.30 market value for the year. 157.31 Sec. 28. Minnesota Statutes 1998, section 290B.04, 157.32 subdivision 3, is amended to read: 157.33 Subd. 3. [EXCESS-INCOME CERTIFICATION BY TAXPAYER.] A 157.34 taxpayer whose initial application has been approved under 157.35 subdivision 2 shall notify the commissioner of revenue in 157.36 writing by July 1 if the taxpayer's household income for the 158.1 preceding calendar year exceeded$30,000$60,000. The 158.2 certification must state the homeowner's total household income 158.3 for the previous calendar year. No property taxes may be 158.4 deferred under this chapter in any year following the year in 158.5 which a program participant filed or should have filed an 158.6 excess-income certification under this subdivision, unless the 158.7 participant has filed a resumption of eligibility certification 158.8 as described in subdivision 4. 158.9 Sec. 29. Minnesota Statutes 1998, section 290B.04, 158.10 subdivision 4, is amended to read: 158.11 Subd. 4. [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 158.12 TAXPAYER.] A taxpayer who has previously filed an excess-income 158.13 certification under subdivision 3 may resume program 158.14 participation if the taxpayer's household income for a 158.15 subsequent year is$30,000$60,000 or less. If the taxpayer 158.16 chooses to resume program participation, the taxpayer must 158.17 notify the commissioner of revenue in writing by July 1 of the 158.18 year following a calendar year in which the taxpayer's household 158.19 income is$30,000$60,000 or less. The certification must state 158.20 the taxpayer's total household income for the previous calendar 158.21 year. Once a taxpayer resumes participation in the program 158.22 under this subdivision, participation will continue until the 158.23 taxpayer files a subsequent excess-income certification under 158.24 subdivision 3 or until participation is terminated under section 158.25 290B.08, subdivision 1. 158.26 Sec. 30. Minnesota Statutes 1998, section 290B.05, 158.27 subdivision 1, is amended to read: 158.28 Subdivision 1. [DETERMINATION BY COMMISSIONER.] The 158.29 commissioner shall determine each qualifying homeowner's "annual 158.30 maximum property tax amount" following approval of the 158.31 homeowner's initial application and following the receipt of a 158.32 resumption of eligibility certification. The "annual maximum 158.33 property tax amount" equalsfivethree percent of the 158.34 homeowner's total household income for the year preceding either 158.35 the initial application or the resumption of eligibility 158.36 certification, whichever is applicable. Following approval of 159.1 the initial application, the commissioner shall determine the 159.2 qualifying homeowner's "maximum allowable deferral." No tax may 159.3 be deferred relative to the appropriate assessment year for any 159.4 homeowner whose total household income for the previous year 159.5 exceeds$30,000$60,000. No tax shall be deferred in any year 159.6 in which the homeowner does not meet the program qualifications 159.7 in section 290B.03. The maximum allowable total deferral is 159.8 equal to 75 percent of the assessor's estimated market value for 159.9 the year, less the balance of any mortgage loans and other 159.10 amounts secured by liens against the property at the time of 159.11 application, including any unpaid special assessments but not 159.12 including property taxes payable during the year. 159.13 Sec. 31. [473.3985] [LIGHT RAIL TRANSIT; PROPERTY TAXES 159.14 PROHIBITED.] 159.15 Notwithstanding any other law to the contrary, a political 159.16 subdivision or a public corporation is prohibited from levying a 159.17 property tax for light rail transit, including, but not limited 159.18 to, any property tax levy for the planning or design of the 159.19 system, acquisition of property, construction and equipping of 159.20 the system, relocation of persons or property, or operation or 159.21 maintenance of the system, including any costs for management 159.22 contracts. A political subdivision or public corporation may 159.23 not transfer funds from any accounts, reserves, or funds 159.24 containing property tax revenues for any of the purposes for 159.25 which a property tax levy is prohibited under this section. 159.26 This prohibition also applies to a property tax levy to pay 159.27 bonds or other debt used to finance any costs or expenditures 159.28 enumerated in the section. 159.29 Nothing in this section prohibits a political subdivision 159.30 or public corporation from receiving and using federal or state 159.31 funds specifically designated for light rail transit purposes, 159.32 or from using fare or other operating revenues from a light rail 159.33 transit system. 159.34 Sec. 32. Minnesota Statutes 1998, section 477A.06, 159.35 subdivision 1, is amended to read: 159.36 Subdivision 1. [ELIGIBILITY.] (a) For assessment years 160.1 1998, 1999, and 2000, for all class 4d property on which 160.2 construction was begun before January 1, 1999, the assessor 160.3 shall determine the difference between the actual net tax 160.4 capacity and the net tax capacity that would be determined for 160.5 the property if the class rates for assessment year 1997 were in 160.6 effect. 160.7 (b) In calendar years 1999, 2000, and 2001, each city shall 160.8 be eligible for aid equal to (i) the amount by which the sum of 160.9 the differences determined in clause (a) for the corresponding 160.10 assessment year exceeds2.5two percent of the city's total 160.11 taxable net tax capacity for taxes payable in 1998, multiplied 160.12 by (ii) the city government's average local tax rate for taxes 160.13 payable in 1998. 160.14 Sec. 33. Laws 1997, First Special Session chapter 3, 160.15 section 27, is amended to read: 160.16 Sec. 27. [TAXPAYER'S PERSONAL INFORMATION; DISCLOSURE.] 160.17 (a) An owner of property in Washington or Ramsey county 160.18 that is subject to property taxation must be informed in a clear 160.19 and conspicuous manner in writing on a form sent to property 160.20 taxpayers that the property owner's name, address, and other 160.21 information may be used, rented, or sold for business purposes, 160.22 including surveys, marketing, and solicitation. 160.23 (b) If the property owner so requests on the form provided, 160.24 then any such list generated by the county and sold for business 160.25 purposes must exclude the owner's name and address if the 160.26 business purpose is conducting surveys, marketing, or 160.27 solicitation. 160.28 (c) This section expires August 1,19992001. 160.29 Sec. 34. Laws 1998, chapter 389, article 1, section 1, is 160.30 amended to read: 160.31 Section 1. [1998 PROPERTY TAX REBATE.] 160.32 (a) A credit is allowed against the tax imposed under 160.33 Minnesota Statutes, chapter 290, to an individual, other than a 160.34 dependent, as defined in sections 151 and 152 of the Internal 160.35 Revenue Code, disregarding section 152(b)(3) of the Internal 160.36 Revenue Code, equal to 20 percent of the qualified property tax 161.1 paid before January 1, 1999, for taxes assessed in 1997. The 161.2 maximum amount of qualifying tax to which the credit applies is 161.3 $7,500. 161.4 (b) For property owned and occupied by the taxpayer during 161.5 1998, qualified property tax means property taxes payable as 161.6 defined in Minnesota Statutes, section 290A.03, subdivision 13, 161.7 assessed in 1997 and payable in 1998, and deductible by the 161.8 individual under section 164 of the Internal Revenue Code of 161.9 1986, as amended through December 31, 1997, except the 161.10 requirement in Minnesota Statutes, section 290A.03, subdivision 161.11 13, that the taxpayer own and occupy the property on January 2, 161.12 1998, does not apply. In the case of agricultural land assessed 161.13 as part of a homestead pursuant to Minnesota Statutes, section 161.14 273.13, subdivision 23, the owner is allowed to calculate the 161.15 credit on all property taxes on the homestead, except to the 161.16 extent the owner is required to furnish a rent certificate under 161.17 Minnesota Statutes, section 290A.19, to a tenant leasing a part 161.18 of the farm homestead. 161.19 (c) For a renter, the qualified property tax means the 161.20 amount of rent constituting property taxes under Minnesota 161.21 Statutes, section 290A.03, subdivision 11, based on rent paid in 161.22 1998 except as provided in this clause. If two or more renters 161.23 could be claimants under Minnesota Statutes, chapter 290A, with 161.24 regard to the rent constituting property taxes, the rules under 161.25 Minnesota Statutes, section 290A.03, subdivision 8, paragraph 161.26 (f), apply to determine the amount of the credit for the 161.27 individual. In the case of agricultural land and buildings that 161.28 are leased, the renter is allowed to calculate the credit on the 161.29 property taxes on the house, garage, other improvements, and on 161.30 up to 320 acres of land that is leased by the renter, provided 161.31 that (i) it is the renter's principal residence, (ii) the renter 161.32 is actively engaged in farming that property, and (iii) the 161.33 owner of the property does not claim a credit based on that 161.34 property. 161.35 (d) For an individual who both owned and rented principal 161.36 residences in calendar year 1998, qualified taxes are the sum of 162.1 the amounts under paragraphs (b) and (c). 162.2 (e) If the amount of the credit under this section exceeds 162.3 the taxpayer's tax liability under Minnesota Statutes, chapter 162.4 290, the commissioner shall refund the excess. 162.5 (f) To claim a credit under this section, the taxpayer must 162.6 attach a copy of the property tax statement and certificate of 162.7 rent paid, as applicable, and provide any additional information 162.8 the commissioner requires. 162.9 (g) This credit applies to taxable years beginning after 162.10 December 31, 1997, and before January 1, 1999. 162.11 (h) Payment of the credit under this section is subject to 162.12 Minnesota Statutes, chapter 270A, and any other provision 162.13 applicable to refunds under Minnesota Statutes, chapter 290. 162.14 (i) An amount sufficient to pay refunds under this section 162.15 is appropriated to the commissioner of revenue from the general 162.16 fund. 162.17 Sec. 35. [ABATEMENT OF TAXES; LAKE COUNTY.] 162.18 Subdivision 1. [PROPERTY DEFINED.] As used in this section 162.19 and section 36, "property" means property located in Lake county 162.20 that meets the following description: 162.21 All that part of Government Lot Two (2) of Section One (1) 162.22 in Township Fifty-two (52) North, Range Eleven (11) West of the 162.23 Fourth Principal Meridian, lying within the following described 162.24 lines: 162.25 Commencing at a point on the North-South quarter line of 162.26 said Section 1 which is 20 feet south of the center of said 162.27 Section 1 measured along said North-South quarter line; 162.28 thence easterly at a right angle to said North-South 162.29 quarter line a distance of 5 feet to the point of Beginning; 162.30 thence continuing in an easterly direction at a right angle 162.31 to said North-South quarter line a distance of 335 feet; 162.32 thence southerly at a right angle to the last described 162.33 line a distance of 80 feet; 162.34 thence easterly at a right angle to the last described line 162.35 a distance of 210 feet; 162.36 thence southerly at a right angle to the last described 163.1 line a distance of 255 feet; 163.2 thence southeasterly at an angle of 102 degrees to the last 163.3 described line to the ordinary low-water mark of Agate Bay; 163.4 thence easterly along said ordinary low-water mark to the 163.5 East boundary line of said Government Lot 2; 163.6 thence in a northerly direction along said East boundary 163.7 line to a point on said East boundary line which is 75 feet 163.8 distant in a northerly direction from the East-West quarter line 163.9 of said Section 1, extended, as measured along said East 163.10 boundary line; 163.11 thence in a northwesterly direction to a point which is 190 163.12 feet easterly measured at a right angle to the North-South 163.13 quarter line of said Section 1 from a point on the North-South 163.14 quarter line, which point is 725 feet northerly of the center of 163.15 said Section 1 when measured along said North-South quarter 163.16 line; 163.17 thence in a westerly direction at a right angle to said 163.18 North-South quarter line a distance of 185 feet; 163.19 thence southerly along a line parallel to and 5 feet 163.20 distant easterly from said North-South quarter line a distance 163.21 of 230 feet; 163.22 thence easterly at a right angle to the last described line 163.23 a distance of 130 feet; 163.24 thence southerly at a right angle to the last described 163.25 line a distance of 119.27 feet; 163.26 thence westerly at a right angle to the last described line 163.27 a distance of 130 feet; 163.28 thence southerly along a line parallel to and 5 feet 163.29 distant easterly from said North-South quarter line a distance 163.30 of 395.73 feet to the point of beginning. 163.31 Subd. 2. [AUTHORIZATION.] Upon a majority vote of its 163.32 members, the governing bodies of each of Lake county, the city 163.33 of Two Harbors, and Lake Superior independent school district 163.34 No. 381, may abate the taxes levied on the property described in 163.35 subdivision 1 in 1979 to 1990, payable in 1980 to 1991. 163.36 Sec. 36. [RECORDING OF CONVEYANCE AUTHORIZED; LAKE 164.1 COUNTY.] 164.2 Notwithstanding Minnesota Statutes, section 272.12, or any 164.3 other law to the contrary, if the governing bodies of Lake 164.4 county, the city of Two Harbors, and Lake Superior independent 164.5 school district No. 381 have all abated the taxes as provided in 164.6 section 35, subdivision 2, the county auditor may record the 164.7 conveyance of the property described in section 1, subdivision 1. 164.8 Sec. 37. [STUDY OF AGRICULTURAL AND OPEN SPACE PROPERTY 164.9 TAXATION.] 164.10 Subdivision 1. [ESTABLISHMENT OF TASK FORCE; ISSUES.] An 164.11 advisory task force is established to study the taxation of 164.12 property used for agricultural purposes and open space 164.13 property. The task force shall examine the implementation and 164.14 effects of current law governing the classification of 164.15 agricultural property, the Minnesota Agricultural Property Tax 164.16 Law, the Minnesota Open Space Property Tax Law, the Minnesota 164.17 Agricultural Preserves Law, and other laws relating to those 164.18 issues. The task force shall also analyze and make 164.19 recommendations on proposals for new tax provisions intended to 164.20 encourage preservation of open space and agricultural property. 164.21 Subd. 2. [MEMBERSHIP.] The task force consists of 11 164.22 members, appointed as follows: 164.23 (1) three members of the senate, at least one of whom is a 164.24 member of the minority caucus, appointed by the committee on 164.25 committees; 164.26 (2) three members of the house of representatives, at least 164.27 one of whom is a member of the minority caucus, appointed by the 164.28 speaker; 164.29 (3) the commissioner of revenue and the commissioner of 164.30 agriculture; and 164.31 (4) three county commissioners appointed by the 164.32 commissioner of revenue, one from a metropolitan county as 164.33 defined in Minnesota Statutes, section 473.121, subdivision 4, 164.34 that contains a city of the first class, one from a metropolitan 164.35 county that does not contain a city of the first class, and one 164.36 from a county outside the metropolitan area as defined in 165.1 Minnesota Statutes, section 473.121, subdivision 2. 165.2 Subd. 3. [REPORT.] The advisory task force shall report to 165.3 the chairs of the committees on taxes of the senate and the 165.4 house of representatives by January 15, 2000, on their 165.5 recommendations for new or modified laws applicable to the 165.6 taxation of agricultural and open space land. 165.7 Subd. 4. [EXPIRATION.] This section expires March 1, 2000. 165.8 Sec. 38. [AGRICULTURAL PRODUCTION VALUE STUDY.] 165.9 The commissioner of revenue, in consultation with the 165.10 commissioner of agriculture, shall study the feasibility and the 165.11 desirability of incorporating the concept of valuation based on 165.12 production value in determining the value of agricultural 165.13 property for the purposes of property taxation as an alternative 165.14 to the education agricultural credit as provided in section 165.15 273.1382, subdivision 1b. The study must: 165.16 (1) assess whether the current method of determining 165.17 agricultural value based on sales of property in the market 165.18 place may overstate its value due to market imperfections 165.19 including infrequent sales, the effect of nonagricultural 165.20 factors on sale prices, and others; 165.21 (2) prescribe how a production-value system could be 165.22 implemented for the state of Minnesota; 165.23 (3) analyze whether production value would reduce the 165.24 volatility in agricultural market values, while still providing 165.25 an accurate measure of market values over the long run; and 165.26 (4) examine the possibility of partial adoption of a 165.27 production-value system, wherein production values would be used 165.28 solely with regard to state equalization programs. 165.29 The commissioner shall complete and submit the study to the 165.30 tax committees of the house of representatives and the senate by 165.31 November 30, 2000. 165.32 Sec. 39. [PROPERTY TAX ABATEMENT; PROPERTY DAMAGED BY 165.33 TORNADO.] 165.34 Subdivision 1. [ABATEMENT AMOUNT.] The county auditor 165.35 shall grant an abatement for taxes payable in 1999 to any 165.36 property in a qualifying county, as defined in Laws 1998, 166.1 chapter 383, section 20, that contains a structure that has been 166.2 determined by the assessor to have lost over 50 percent of its 166.3 estimated market value due to wind damage sustained on March 29, 166.4 1998, excluding residential homestead property and the portion 166.5 of agricultural homestead property consisting of the house, 166.6 garage, and surrounding one acre of land. The abatement is 166.7 equal to 75 percent of the amount by which the net tax capacity 166.8 of the structure was reduced by the wind damage, multiplied by 166.9 the payable 1999 total local net tax capacity tax rate, plus 75 166.10 percent of the amount by which the referendum market value of 166.11 the structure was reduced by the wind damage, multiplied by the 166.12 payable 1999 total market value tax rate. If the amount of the 166.13 abatement exceeds the remaining tax due on the property for 166.14 taxes payable in 1999, a refund shall be issued to the taxpayer 166.15 by the county treasurer by June 30, 1999. 166.16 Subd. 2. [CERTIFICATION.] The amount of abatements granted 166.17 under this section shall be reported to the commissioner of 166.18 revenue by the county auditor by June 30, 1999, in a form 166.19 prescribed by the commissioner. The commissioner may require 166.20 the county to provide other information necessary to verify the 166.21 accuracy of the abatement amounts submitted. 166.22 Subd. 3. [PAYMENT.] The commissioner shall make payments 166.23 equal to the amount of abatements granted to each county by 166.24 August 30, 1999. The county treasurer shall distribute the 166.25 payments to the affected taxing jurisdictions equal to the 166.26 amount of the tax that was abated as part of the October 1999 166.27 regular settlement as provided in Minnesota Statutes, section 166.28 276.111. 166.29 Subd. 4. [APPROPRIATION.] The amount necessary to fund the 166.30 payments required under this section is appropriated from the 166.31 general fund to the commissioner of revenue in fiscal year 2000. 166.32 Sec. 40. [FUNDS TRANSFER.] 166.33 The sum of $113,296,000 is transferred from the general 166.34 fund to the property tax reform account on June 30, 2001. 166.35 Amounts deposited in the property tax reform account as a result 166.36 of this article are appropriated for education homestead credit 167.1 payments in fiscal years 2002 and 2003. 167.2 Sec. 41. [REPEALER.] 167.3 (a) Minnesota Statutes 1998, section 273.11, subdivision 167.4 10, is repealed. 167.5 (b) Laws 1998, chapter 389, article 3, section 45, is 167.6 repealed. 167.7 Sec. 42. [EFFECTIVE DATES.] 167.8 Sections 2 and 3 are effective for petitions filed on or 167.9 after the day following final enactment. 167.10 Sections 4, 5, 6, 11, 12, 16, 17, 18, paragraphs (a) and 167.11 (b), 20, except for paragraph (f), 21, 22, and 25, are effective 167.12 for taxes levied in 1999, payable in 2000, and thereafter. 167.13 Section 7 is effective for assessment years 1999 through 167.14 2001. 167.15 Section 8 is effective for improvements made on or after 167.16 July 1, 1999. 167.17 Section 9 is effective retroactively for property taxes 167.18 payable in 1998 and thereafter. 167.19 Section 10, paragraph (h), is effective for taxes payable 167.20 in 1999 and subsequent years. 167.21 Sections 10, paragraph (d), and 14 are effective beginning 167.22 with the 1999 assessment, taxes payable in 2000 and thereafter. 167.23 For eligibility for the 1999 assessment year under sections 10, 167.24 paragraph (d), and 14, paragraph (b), the owner or the person 167.25 who is actively farming the property must notify the county 167.26 assessor by July 1, 1999, and furnish to the assessor the 167.27 information required by the assessor to determine whether the 167.28 qualifying criteria in section 10 or 14 have been met for the 167.29 1999 assessment on the agricultural property. 167.30 Sections 13, 15, 24, 31, 37, 38, 39, and 41, paragraph (a), 167.31 are effective the day following final enactment. 167.32 Sections 18, paragraph (c), 19, and 41, paragraph (b), are 167.33 effective for taxes levied in 2000, payable in 2001 and 167.34 thereafter. 167.35 Section 20, paragraph (f), is effective for the 2000 167.36 assessment and thereafter, for taxes payable in 2001 and 168.1 thereafter, except that for taxes payable in 2001, the date for 168.2 filing an application with the county assessor under section 20, 168.3 paragraph (f), clause (3), is September 1, 1999. 168.4 Section 26 is effective for penalties and interest on 168.5 property taxes collected after June 30, 1999. 168.6 Sections 27 to 30 are effective for deferrals of property 168.7 taxes payable in 2000 and thereafter. The changes in the annual 168.8 tax amount percentage and the maximum annual household income in 168.9 sections 27 to 30 apply to all homeowners and all property taxes 168.10 deferred beginning in payable 2000, including those homeowners 168.11 who initially qualified under this program for taxes payable in 168.12 1999. 168.13 Section 32 is effective beginning for aid payable in 168.14 calendar year 2000. 168.15 Section 33 applies to Washington county only and is 168.16 effective the day after the chief clerical officer of Washington 168.17 county files a certificate of approval that complies with 168.18 Minnesota Statutes, section 645.021, subdivision 3. 168.19 Section 34 is effective the day following final enactment. 168.20 Sections 35 and 36 are effective the day following final 168.21 enactment, upon approval by and compliance with Minnesota 168.22 Statutes, section 645.021, subdivision 3, by the governing 168.23 bodies of Lake county, the city of Two Harbors, and Lake 168.24 Superior independent school district No. 381. 168.25 ARTICLE 7 168.26 LEVY LIMITS 168.27 Section 1. Minnesota Statutes 1998, section 275.71, 168.28 subdivision 2, is amended to read: 168.29 Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a 168.30 local governmental unit for taxes levied in 1997 shall be equal 168.31 to the sum of: 168.32 (1) the amount the local governmental unit levied in 1996, 168.33 less any amount levied for debt, as reported to the department 168.34 of revenue under section 275.62, subdivision 1, clause (1), and 168.35 less any tax levied in 1996 against market value as provided for 168.36 in section 275.61; 169.1 (2) the amount of aids the local governmental unit was 169.2 certified to receive in calendar year 1997 under sections 169.3 477A.011 to 477A.03 before any reductions for state tax 169.4 increment financing aid under section 273.1399, subdivision 5; 169.5 (3) the amount of homestead and agricultural credit aid the 169.6 local governmental unit was certified to receive under section 169.7 273.1398 in calendar year 1997 before any reductions for tax 169.8 increment financing aid under section 273.1399, subdivision 5; 169.9 (4) the amount of local performance aid the local 169.10 governmental unit was certified to receive in calendar year 1997 169.11 under section 477A.05; and 169.12 (5) the amount of any payments certified to the local 169.13 government unit in 1997 under sections 298.28 and 298.282. 169.14 If a governmental unit was not required to report under 169.15 section 275.62 for taxes levied in 1997, the commissioner shall 169.16 request information on levies used for debt from the local 169.17 governmental unit and adjust its levy limit base accordingly. 169.18 (b) The levy limit base for a local governmental unit for 169.19 taxes levied in 1998 is equal to its adjusted levy limit base in 169.20 the previous year, subject to any adjustments under section 169.21 275.72 and multiplied by the increase that would have occurred 169.22 under subdivision 3, clause (3), if that clause had been in 169.23 effect for taxes levied in 1997. 169.24 (c) The levy limit base for a city with a population 169.25 greater than 2,500 for taxes levied in 1999 and 2000 is limited 169.26 to its adjusted levy limit base in the previous year, subject to 169.27 adjustments under section 275.72. 169.28 (d) The levy limit base for a county for taxes levied in 169.29 1999 and 2000 is limited to the difference between (1) its 169.30 adjusted levy limit base in the previous year subject to 169.31 adjustments under section 275.72, and (2) one-half of the 169.32 county's share of the net cost to the state for assumption of 169.33 district court costs, as reported by the supreme court to the 169.34 commissioner of revenue under article 9, section 3, paragraph 169.35 (a). 169.36 Sec. 2. Minnesota Statutes 1998, section 275.71, 170.1 subdivision 3, is amended to read: 170.2 Subd. 3. [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 170.3 1998, 1999, and 2000, the adjusted levy limit is equal to the 170.4 levy limit base computed under subdivision 2 or section 275.72, 170.5 multiplied by: 170.6 (1) one plus a percentage equal to the percentage growth in 170.7 the implicit price deflator; and 170.8 (2) for all cities and for counties outside of the 170.9 seven-county metropolitan area, one plus a percentage equal to 170.10 the percentage increase in number of households, if any, for the 170.11 most recent 12-month period for which data is available; and for 170.12 counties located in the seven-county metropolitan area, one plus 170.13 a percentage equal to the greater of the percentage increase in 170.14 the number of households in the county or the percentage 170.15 increase in the number of households in the entire seven-county 170.16 metropolitan area for the most recent 12-month period for which 170.17 data is available; and170.18(3) one plus a percentage equal to the percentage increase170.19in the taxable market value of the jurisdiction due to new170.20construction of class 3 and class 5 property, as defined in170.21section 273.13, subdivisions 24 and 31, for the most recent year170.22for which data are available. 170.23 Sec. 3. Minnesota Statutes 1998, section 275.71, 170.24 subdivision 4, is amended to read: 170.25 Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in 170.26 1998, 1999, and 2000, the property tax levy limit for a local 170.27 governmental unit is equal to its adjusted levy limit base 170.28 determined under subdivision 3 plus any additional levy 170.29 authorized under section 275.73, which is levied against net tax 170.30 capacity, reduced by the sum of (1) the total amount of aids 170.31 that the local governmental unit is certified to receive under 170.32 sections 477A.011 to 477A.014, (2) homestead and agricultural 170.33 aids it is certified to receive under section 273.1398, (3) 170.34 local performance aid it is certified to receive under section 170.35 477A.05, (4) taconite aids under sections 298.28 and 298.282 170.36 including any aid which was required to be placed in a special 171.1 fund for expenditure in the next succeeding year, (5) flood loss 171.2 aid under section 273.1383, and (6) low-income housing aid under 171.3 sections 477A.06 and 477A.065. 171.4 Sec. 4. Minnesota Statutes 1998, section 465.82, is 171.5 amended by adding a subdivision to read: 171.6 Subd. 4. [DIFFERENTIAL TAXATION.] The plan for cooperation 171.7 and combination adopted in accordance with subdivision 1 may 171.8 establish that the tax rate of the local government unit with 171.9 the lesser tax rate prior to the effective date of combination 171.10 shall be increased in substantially equal proportions over not 171.11 more than six years to equality with the tax rate on the 171.12 property already within the borders of the local unit of 171.13 government with the higher tax rate. The appropriate period of 171.14 time, if any, for transition to the higher tax rate shall be 171.15 based on the time reasonably required to effectively provide 171.16 equal municipal services to the residents of the local unit of 171.17 government with the lower tax rate. 171.18 Sec. 5. Minnesota Statutes 1998, section 473.249, 171.19 subdivision 1, is amended to read: 171.20 Subdivision 1. [INDEXED LIMIT.] (a) The metropolitan 171.21 council may levy a tax on all taxable property in the 171.22 metropolitan area defined in section 473.121 to provide funds 171.23 for the purposes of sections 473.121 to 473.249 and for the 171.24 purpose of carrying out other responsibilities of the council as 171.25 provided by law. This tax for general purposes shall be levied 171.26 and collected in the manner provided by section 473.13. 171.27 (b) The metropolitan council's property taxlevied by the171.28metropolitan councillevy limit for general purposes for taxes 171.29 payable in 2000 and thereafter shall not exceedthe product of:171.30(1) the metropolitan council's property tax levy limitation for171.31general purposes for the previous year determined under this171.32subdivision multiplied by (2) the lesser of171.33(i) an index for market valuation changes equal to the171.34total market valuation of all taxable property located within171.35the metropolitan area for the current taxes payable year divided171.36by the total market valuation of all taxable property located172.1within the metropolitan area for the previous taxes payable172.2year;172.3(ii) an index equal to the implicit price deflator for172.4government consumption expenditures and gross investment for172.5state and local governments for the most recent month for which172.6data are available divided by the same implicit price deflator172.7for the same month of the previous year; or172.8(iii) 103 percent.172.9(c) For the purpose of determining the metropolitan172.10council's property tax levy limitation for general purposes,172.11"total market valuation" means the total market valuation of all172.12taxable property within the metropolitan area without valuation172.13adjustments for fiscal disparities (chapter 473F), tax increment172.14financing (sections 469.174 to 469.179), and high voltage172.15transmission lines (section 273.425)90 percent of the 172.16 metropolitan council's property tax levy limit for general 172.17 purposes for taxes payable in 1999. 172.18 Sec. 6. Minnesota Statutes 1998, section 473.252, 172.19 subdivision 2, is amended to read: 172.20 Subd. 2. [SOURCES OF FUNDS.] The council shall credit to 172.21 the tax base revitalization account within the fundthe amount,172.22if any, provided for under subdivision 4, andthe amount, if 172.23 any, distributed to the council under section 473F.08, 172.24 subdivision 3b. 172.25 Sec. 7. Minnesota Statutes 1998, section 473.253, 172.26 subdivision 1, is amended to read: 172.27 Subdivision 1. [SOURCES OF FUNDS.] The council shall 172.28 credit to the livable communities demonstration account the 172.29 revenues provided in this subdivision. This tax shall be levied 172.30 and collected in the manner provided by section 473.13. The 172.31 levy for taxes payable in 2000 and thereafter shall not exceed 172.32 thefollowing amount for the years specified:172.33(a)(1) for taxes payable in 1996, 50 percent of (i) the172.34metropolitan mosquito control commission's property tax levy for172.35taxes payable in 1995 multiplied by (ii) an index for market172.36valuation changes equal to the total market valuation of all173.1taxable property located within the metropolitan area for the173.2current taxes payable year divided by the total market valuation173.3of all taxable property located in the metropolitan area for the173.4previous taxes payable year; and173.5(2) for taxes payable in 1997 and subsequent years, the173.6product of (i) the property tax levy limit under this173.7subdivision for the previous year multiplied by (ii) an index173.8for market valuation changes equal to the total market valuation173.9of all taxable property located within the metropolitan area for173.10the current taxes payable year divided by the total market173.11valuation of all taxable property located in the metropolitan173.12area for the previous taxes payable year.173.13For the purposes of this subdivision, "total market173.14valuation" means the total market valuation of all taxable173.15property within the metropolitan area without valuation173.16adjustments for fiscal disparities under chapter 473F, tax173.17increment financing under sections 469.174 to 469.179, and high173.18voltage transmission lines under section 273.425levy limit for 173.19 the livable communities demonstration account for taxes payable 173.20 in 1999. 173.21 (b) The metropolitan council, for the purposes of the fund, 173.22 is considered a unique taxing jurisdiction for purposes of 173.23 receiving aid pursuant to section 273.1398.For aid to be173.24received in 1996, the fund's homestead and agricultural credit173.25base shall equal 50 percent of the metropolitan mosquito control173.26commission's certified homestead and agricultural credit aid for173.271995, determined under section 273.1398, subdivision 2, less any173.28permanent aid reduction under section 477A.0132.For aid to be 173.29 received under section 273.1398 in 1997 and subsequent years, 173.30 the fund's homestead and agricultural credit base shall be 173.31 determined in accordance with section 273.1398, subdivision 1. 173.32 Sec. 8. Laws 1988, chapter 645, section 3, is amended to 173.33 read: 173.34 Sec. 3. [TAX; PAYMENT OF EXPENSES.] 173.35 (a) The tax levied by the hospital district under Minnesota 173.36 Statutes, section 447.34, must not be levied at a rate that 174.1 exceeds2 mills.0063 percent of taxable market value.The174.2proceeds174.3 (b) .0048 percent of taxable market value ofthattax in 174.4 paragraph (a) may be used only for acquisition, betterment, and 174.5 maintenance of the district's hospital and nursing home 174.6 facilities and equipment, and not for administrative or salary 174.7 expenses. 174.8 (c) .0015 percent of taxable market value of the tax in 174.9 paragraph (a) may be used solely for the purpose of capital 174.10 expenditures as it relates to ambulance acquisitions for the 174.11 Cook ambulance service and the Orr ambulance service and not for 174.12 administrative or salary expenses. 174.13 The part of the levy referred to in paragraph (c) must be 174.14 administered by the Cook Hospital and passed on directly to the 174.15 Cook area ambulance service board and the city of Orr to be held 174.16 in trust until funding for a new ambulance is needed by either 174.17 the Cook ambulance service or the Orr ambulance service. 174.18 Sec. 9. Laws 1997, chapter 231, article 3, section 9, is 174.19 amended to read: 174.20 Sec. 9. [EFFECTIVE DATE.] 174.21 Sections 1 and 3 to 7, as amended by Laws 1998, chapter 174.22 389, article 4, sections 1 to 6, are effective for taxes levied 174.23 in 1997and 1998through 2000, payable in 1998and 1999through 174.24 2001. 174.25 Upon compliance with Minnesota Statutes, section 645.021, 174.26 subdivision 3, by the governing body of Faribault county or the 174.27 city of Blue Earth, section 8 is effective for taxes levied in 174.28 1997and 1998through 2000 in the county or city that approves 174.29 it. 174.30 Sec. 10. [CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.] 174.31 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding other 174.32 law to the contrary, the Carlton county board of commissioners 174.33 may levy in and for the unorganized township of Sawyer an amount 174.34 up to $1,000 annually for cemetery purposes, beginning with 174.35 taxes payable in 2000 and ending with taxes payable in 2009. 174.36 Subd. 2. [EFFECTIVE DATE.] This section is effective June 175.1 1, 1999, without local approval. 175.2 Sec. 11. [COUNTY OF GOODHUE; LEVY LIMITS AND AID 175.3 ADJUSTMENTS.] 175.4 Subdivision 1. [LEVY LIMIT BASE.] The levy limit base of 175.5 the county of Goodhue for taxes levied in 1999 under Minnesota 175.6 Statutes, section 275.71, subdivision 2, is increased by 175.7 $422,324. 175.8 Subd. 2. [TEMPORARY COUNTY AGRICULTURAL AND HOMESTEAD 175.9 CREDIT AID ADJUSTMENTS.] For aids paid in calendar year 1999 175.10 only, the county of Goodhue shall receive an additional aid 175.11 payment of $422,324 under the provisions of Minnesota Statutes, 175.12 section 273.1398. For aids paid in calendar years 2000 and 175.13 2001, the aid paid to the county of Goodhue under section 175.14 273.1398, subdivision 2, shall be reduced by $211,162. The 175.15 additional aid paid in 1999 shall not be included in calculating 175.16 any limitation on levies or expenditures in calendar year 1999 175.17 but the reductions in calendar years 2000 and 2001 shall be 175.18 included in calculating any limitation on levies or expenditures. 175.19 Subd. 3. [APPROPRIATION.] $422,324 is appropriated in 175.20 fiscal year 2000 to the commissioner of revenue from the general 175.21 fund to make the payment under subdivision 2. 175.22 Subd. 4. [EFFECTIVE DATE.] Subdivision 1 is effective for 175.23 taxes levied in 1999 upon compliance with the governing body of 175.24 the county of Goodhue with Minnesota Statutes, section 645.021, 175.25 subdivision 3. Subdivision 2 is effective for aids payable in 175.26 calendar years 1999 to 2001. 175.27 Sec. 12. [CITY OF GRANT; LEVY LIMITS.] 175.28 Subdivision 1. [LEVY LIMIT BASE INCREASE.] The levy limit 175.29 base for the city of Grant for taxes levied in 1999 under 175.30 Minnesota Statutes, section 275.71, subdivision 2, is increased 175.31 by an amount equal to the difference between (1) the amount the 175.32 city would have raised if it had imposed a tax rate equal to 175.33 one-third of the statewide average city tax effort rate for 175.34 taxes payable in 1999, as defined in Minnesota Statutes, section 175.35 477A.011, subdivision 35, on its net tax capacity for taxes 175.36 payable in 1999, as defined in Minnesota Statutes, section 176.1 477A.011, subdivision 20; and (2) the amount it levied for taxes 176.2 payable in 1999. 176.3 Subd. 2. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 176.4 effective upon compliance by the governing body of the city of 176.5 Grant with Minnesota Statutes, section 645.021, subdivision 3, 176.6 for taxes levied in 1999, payable in 2000. 176.7 Sec. 13. [NORTH FORK CROW RIVER WATERSHED DISTRICT.] 176.8 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 176.9 Minnesota Statutes, section 103D.905, subdivision 3, the North 176.10 Fork Crow River watershed district may annually levy up to 176.11 .04836 percent of taxable market value, or $140,000, whichever 176.12 is less, for its administrative fund. 176.13 Subd. 2. [REVERSE REFERENDUM.] If the watershed district 176.14 intends to exercise the authority provided by this section, it 176.15 shall pass a resolution stating the fact before July 1, 1999. 176.16 The resolution must be published in a newspaper of general 176.17 circulation in the district, together with a notice fixing a 176.18 date for a public hearing on the matter. The hearing must be 176.19 held at least two weeks but not more than four weeks after the 176.20 publication of the resolution. Following the public hearing, 176.21 the district may determine to take no further action or adopt a 176.22 resolution confirming its intention to exercise the authority. 176.23 That resolution must also be published in a newspaper of general 176.24 circulation in the district. If within 30 days after 176.25 publication of the resolution a petition signed by voters equal 176.26 in number to five percent of the registered voters in the 176.27 district requesting a vote on the proposed resolution is filed 176.28 with the county auditors of the counties contained in the 176.29 district, the resolution is not effective until it has been 176.30 submitted to the voters at a general or special election and a 176.31 majority of votes cast on the question of approving the 176.32 resolution are in the affirmative. The commissioner of revenue 176.33 shall prepare a suggested form of question to be presented at 176.34 the election. The referendum must be held at a special or 176.35 general election before December 1, 1999. 176.36 Subd. 3. [EFFECTIVE DATE.] This section is effective 177.1 beginning with taxes levied in 1999, payable in 2000. 177.2 Sec. 14. [SAUK RIVER WATERSHED DISTRICT.] 177.3 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 177.4 Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 177.5 river watershed district may annually levy up to $200,000 for 177.6 its administrative fund for taxes payable in 2000, 2001, 2002, 177.7 2003, and 2004. 177.8 Subd. 2. [REVERSE REFERENDUM.] If the watershed district 177.9 intends to exercise the authority provided by this section, it 177.10 shall pass a resolution stating the fact before July 1, 1999. 177.11 The resolution must be published in a newspaper of general 177.12 circulation in the district, together with a notice fixing a 177.13 date for a public hearing on the matter. The hearing must be 177.14 held at least two weeks but not more than four weeks after the 177.15 publication of the resolution. Following the public hearing, 177.16 the district may determine to take no further action or adopt a 177.17 resolution confirming its intention to exercise the authority. 177.18 That resolution must also be published in a newspaper of general 177.19 circulation in the district. If within 30 days after 177.20 publication of the resolution a petition signed by voters equal 177.21 in number to five percent of the registered voters in the 177.22 district requesting a vote on the proposed resolution is filed 177.23 with the county auditors in the counties contained in the 177.24 district, the resolution is not effective until it has been 177.25 submitted to the voters at a general or special election and a 177.26 majority of votes cast on the question of approving the 177.27 resolution are in the affirmative. The commissioner of revenue 177.28 shall prepare a suggested form of question to be presented at 177.29 the election. The referendum must be held at a special or 177.30 general election before December 1, 1999. 177.31 Subd. 3. [EFFECTIVE DATE.] This section is effective the 177.32 day following final enactment. 177.33 Sec. 15. [SPLITTING EXISTING DEBT LEVY; CITY OF 177.34 STILLWATER.] 177.35 Notwithstanding Minnesota Statutes, section 272.67, 177.36 subdivisions 2 and 5, the city of Stillwater, in order to carry 178.1 out an orderly annexation agreement entered into for the 178.2 annexation of a part or all of Stillwater township may divide 178.3 its area into urban service districts and rural service 178.4 districts constituting separate taxing districts for the purpose 178.5 of municipal property taxes, including those levied for the 178.6 payment of bonds and judgment, and associated interest, incurred 178.7 prior to the annexation agreement. 178.8 Sec. 16. [REPEALER.] 178.9 Minnesota Statutes 1998, section 473.252, subdivisions 4 178.10 and 5, are repealed. 178.11 Sec. 17. [EFFECTIVE DATE.] 178.12 Sections 1 to 3 and 9 are effective for taxes levied in 178.13 1999 and 2000, and payable in 2000 and 2001. Section 4 is 178.14 effective the day following final enactment for taxes levied in 178.15 1999 and thereafter. Section 5 to 7 and 16 are effective for 178.16 taxes levied in 1999, payable in 2000, and thereafter. 178.17 The .0015 percent of taxable market value levy described in 178.18 section 8, paragraph (c), is effective for the cities of Cook 178.19 and Orr and the counties of St. Louis and Koochiching for 178.20 affected parts of those counties on January 1, 2000, to be 178.21 requested in the year 2000, with the first payment to be 178.22 received in 2001. 178.23 ARTICLE 8 178.24 TRUTH IN TAXATION; REVERSE REFERENDA 178.25 Section 1. Minnesota Statutes 1998, section 275.065, 178.26 subdivision 3, is amended to read: 178.27 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 178.28 county auditor shall prepare and the county treasurer shall 178.29 deliver after November 10 and on or before November2417 each 178.30 year, by first class mail to each taxpayer at the address listed 178.31 on the county's current year's assessment roll, a notice of 178.32 proposed property taxes. 178.33 (b) The commissioner of revenue shall prescribe the form of 178.34 the notice. 178.35 (c) The notice must inform taxpayers that it contains the 178.36 amount of property taxes each taxing authority proposes to 179.1 collect for taxes payable the following year. In the case of a 179.2 town, or in the case of the state determined portion of the 179.3 school district levy, the final tax amount will be its proposed 179.4 tax. The notice must clearly state that each taxing authority, 179.5 including regional library districts established under section 179.6 134.201, and including the metropolitan taxing districts as 179.7 defined in paragraph (i), but excluding all other special taxing 179.8 districts, cities of 500 population or less, and towns,will179.9 must hold a public meeting to receive public testimony on the 179.10 proposed budget and proposed or final property tax levy, or, in 179.11 case of a school district, on the current budget and proposed 179.12 property tax levy.ItIn the case of a county or a city over 179.13 500 population, a public hearing is not required if the county's 179.14 or city's proposed property tax levy has not increased over the 179.15 levy amount certified by the county or city under section 179.16 275.07, subdivision 1, for the previous year. The notice must 179.17 clearly state the time and place of each taxing authority's 179.18 meetingandif one is to be held. It must also state an address 179.19 where comments will be received by mail, whether or not a public 179.20 hearing is held. 179.21 (d) The notice must state for each parcel: 179.22 (1) the market value of the property as determined under 179.23 section 273.11, and used for computing property taxes payable in 179.24 the following year and for taxes payable in the current year as 179.25 each appears in the records of the county assessor on November 1 179.26 of the current year; and, in the case of residential property, 179.27 whether the property is classified as homestead or 179.28 nonhomestead. The notice must clearly inform taxpayers of the 179.29 years to which the market values apply and that the values are 179.30 final values; 179.31 (2) the items listed below, shown separately by county, 179.32 city or town, state determined school tax net of the education 179.33 homestead credit under section 273.1382, voter approved school 179.34 levy, other local school levy, and the sum of the special taxing 179.35 districts, and as a total of all taxing authorities: 179.36 (i) the actual tax for taxes payable in the current year; 180.1 (ii) the tax change due to spending factors, defined as the 180.2 proposed tax minus the constant spending tax amount; 180.3 (iii) the tax change due to other factors, defined as the 180.4 constant spending tax amount minus the actual current year tax; 180.5 and 180.6 (iv) the proposed tax amount. 180.7 In the case of a town or the state determined school tax, 180.8 the final tax shall also be its proposed tax unless the town 180.9 changes its levy at a special town meeting under section 180.10 365.52. If a school district has certified under section 180.11 126C.17, subdivision 9, that a referendum will be held in the 180.12 school district at the November general election, the county 180.13 auditor must note next to the school district's proposed amount 180.14 that a referendum is pending and that, if approved by the 180.15 voters, the tax amount may be higher than shown on the notice. 180.16 In the case of the city of Minneapolis, the levy for the 180.17 Minneapolis library board and the levy for Minneapolis park and 180.18 recreation shall be listed separately from the remaining amount 180.19 of the city's levy. In the case of a parcel where tax increment 180.20 or the fiscal disparities areawide tax under chapter 276A or 180.21 473F applies, the proposed tax levy on the captured value or the 180.22 proposed tax levy on the tax capacity subject to the areawide 180.23 tax must each be stated separately and not included in the sum 180.24 of the special taxing districts; and 180.25 (3) the increase or decrease between the total taxes 180.26 payable in the current year and the total proposed taxes, 180.27 expressed as a percentage. 180.28 For purposes of this section, the amount of the tax on 180.29 homesteads qualifying under the senior citizens' property tax 180.30 deferral program under chapter 290B is the total amount of 180.31 property tax before subtraction of the deferred property tax 180.32 amount. 180.33 (e) The notice must clearly state that the proposed or 180.34 final taxes do not include the following: 180.35 (1) special assessments; 180.36 (2) levies approved by the voters after the date the 181.1 proposed taxes are certified, including bond referenda, school 181.2 district levy referenda, and levy limit increase referenda; 181.3 (3) amounts necessary to pay cleanup or other costs due to 181.4 a natural disaster occurring after the date the proposed taxes 181.5 are certified; 181.6 (4) amounts necessary to pay tort judgments against the 181.7 taxing authority that become final after the date the proposed 181.8 taxes are certified; and 181.9 (5) the contamination tax imposed on properties which 181.10 received market value reductions for contamination. 181.11 (f) Except as provided in subdivision 7, failure of the 181.12 county auditor to prepare or the county treasurer to deliver the 181.13 notice as required in this section does not invalidate the 181.14 proposed or final tax levy or the taxes payable pursuant to the 181.15 tax levy. 181.16 (g) If the notice the taxpayer receives under this section 181.17 lists the property as nonhomestead, and satisfactory 181.18 documentation is provided to the county assessor by the 181.19 applicable deadline, and the property qualifies for the 181.20 homestead classification in that assessment year, the assessor 181.21 shall reclassify the property to homestead for taxes payable in 181.22 the following year. 181.23 (h) In the case of class 4 residential property used as a 181.24 residence for lease or rental periods of 30 days or more, the 181.25 taxpayer must either: 181.26 (1) mail or deliver a copy of the notice of proposed 181.27 property taxes to each tenant, renter, or lessee; or 181.28 (2) post a copy of the notice in a conspicuous place on the 181.29 premises of the property. 181.30 The notice must be mailed or posted by the taxpayer by 181.31 November2720 or within three days of receipt of the notice, 181.32 whichever is later. A taxpayer may notify the county treasurer 181.33 of the address of the taxpayer, agent, caretaker, or manager of 181.34 the premises to which the notice must be mailed in order to 181.35 fulfill the requirements of this paragraph. 181.36 (i) For purposes of this subdivision, subdivisions 5a and 182.1 6, "metropolitan special taxing districts" means the following 182.2 taxing districts in the seven-county metropolitan area that levy 182.3 a property tax for any of the specified purposes listed below: 182.4 (1) metropolitan council under section 473.132, 473.167, 182.5 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 182.6 (2) metropolitan airports commission under section 473.667, 182.7 473.671, or 473.672; and 182.8 (3) metropolitan mosquito control commission under section 182.9 473.711. 182.10 For purposes of this section, any levies made by the 182.11 regional rail authorities in the county of Anoka, Carver, 182.12 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 182.13 398A shall be included with the appropriate county's levy and 182.14 shall be discussed at that county's public hearing, if held. 182.15 (j) If a statutory or home rule charter city or a town has 182.16 exercised the local levy option provided by section 473.388, 182.17 subdivision 7, it may include in the notice of its proposed 182.18 taxes the amount of its proposed taxes attributable to its 182.19 exercise of the option. In the first year of the city or town's 182.20 exercise of this option, the statement shall include an estimate 182.21 of the reduction of the metropolitan council's tax on the parcel 182.22 due to exercise of that option. The metropolitan council's levy 182.23 shall be adjusted accordingly. 182.24 Sec. 2. Minnesota Statutes 1998, section 275.065, 182.25 subdivision 5a, is amended to read: 182.26 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 182.27 population of more than 2,500, county, a metropolitan special 182.28 taxing district as defined in subdivision 3, paragraph (i), a 182.29 regional library district established under section 134.201, or 182.30 school district shall advertise in a newspaper a notice of its 182.31 intent to adopt a budget and property tax levy or, in the case 182.32 of a school district, to review its current budget and proposed 182.33 property taxes payable in the following year, at a public 182.34 hearing. In the case of a county or a city that has a 182.35 population over 2,500, if its proposed property tax levy has not 182.36 increased over its levy amount certified under section 275.07, 183.1 subdivision 1, for the previous year, no public hearing is 183.2 required. The notice must be published not less than two 183.3 business days nor more than six business days before the 183.4 hearing, if required due to a levy increase. Even if a hearing 183.5 is not required, counties and cities must continue to place an 183.6 advertisement in the newspaper informing taxpayers of the 183.7 proposed budget and levy amounts. 183.8 The advertisement must be at least one-eighth page in size 183.9 of a standard-size or a tabloid-size newspaper. The 183.10 advertisement must not be placed in the part of the newspaper 183.11 where legal notices and classified advertisements appear. The 183.12 advertisement must be published in an official newspaper of 183.13 general circulation in the taxing authority. The newspaper 183.14 selected must be one of general interest and readership in the 183.15 community, and not one of limited subject matter. The 183.16 advertisement must appear in a newspaper that is published at 183.17 least once per week. 183.18 For purposes of this section, the metropolitan special 183.19 taxing district's advertisement must only be published in the 183.20 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 183.21 (b) The advertisement for school districts, metropolitan 183.22 special taxing districts, and regional library districts must be 183.23 in the following form, except that the notice for a school 183.24 district may include references to the current budget in regard 183.25 to proposed property taxes. 183.26 "NOTICE OF 183.27 PROPOSED PROPERTY TAXES 183.28 (School District/Metropolitan 183.29 Special Taxing District/Regional 183.30 Library District) of ......... 183.31 The governing body of ........ will soon hold budget hearings 183.32 and vote on the property taxes for (metropolitan special taxing 183.33 district/regional library district services that will be 183.34 provided in (year)/school district services that will be 183.35 provided in (year) and (year)). 183.36 NOTICE OF PUBLIC HEARING: 184.1 All concerned citizens are invited to attend a public hearing 184.2 and express their opinions on the proposed (school 184.3 district/metropolitan special taxing district/regional library 184.4 district) budget and property taxes, or in the case of a school 184.5 district, its current budget and proposed property taxes, 184.6 payable in the following year. The hearing will be held on 184.7 (Month/Day/Year) at (Time) at (Location, Address)." 184.8 (c)(i) If the city or county's proposed property tax levy 184.9 has increased over its previous year's certified levy, the 184.10 advertisementfor cities and countiesmust be in the following 184.11 form. 184.12 "NOTICE OF PROPOSED 184.13 TOTAL BUDGET AND PROPERTY TAXES 184.14 The (city/county) governing body or board of commissioners will 184.15 hold a public hearing to discuss the budget and to vote on the 184.16 amount of property taxes to collect for services the 184.17 (city/county) will provide in (year). 184.18 184.19 SPENDING: The total budget amounts below compare 184.20 (city's/county's) (year) total actual budget with the amount the 184.21 (city/county) proposes to spend in (year). 184.22 184.23 (Year) Total Proposed (Year) Change from 184.24 Actual Budget Budget (Year)-(Year) 184.25 184.26 $....... $....... ...% 184.27 184.28 TAXES: The property tax amounts below compare that portion of 184.29 the current budget levied in property taxes in (city/county) for 184.30 (year) with the property taxes the (city/county) proposes to 184.31 collect in (year). 184.32 184.33 (Year) Property Proposed (Year) Change from 184.34 Taxes Property Taxes (Year)-(Year) 184.35 184.36 $....... $....... ...% 185.1 185.2 ATTEND THE PUBLIC HEARING 185.3 All (city/county) residents are invited to attend the public 185.4 hearing of the (city/county) to express your opinions on the 185.5 budget and the proposed amount of (year) property taxes. The 185.6 hearing will be held on: 185.7 (Month/Day/Year/Time) 185.8 (Location/Address) 185.9 If the discussion of the budget cannot be completed, a time and 185.10 place for continuing the discussion will be announced at the 185.11 hearing. You are also invited to send your written comments to: 185.12 (City/County) 185.13 (Location/Address)" 185.14 (ii) If no hearing is required under this section for the 185.15 city or county, its advertisement must be in the following 185.16 form. The advertisement must clearly state that because the 185.17 proposed property tax levy amount is equal to or less than the 185.18 taxing authority's previous year's actual property tax levy, no 185.19 public hearing is required by law. 185.20 "NOTICE OF PROPOSED 185.21 TOTAL BUDGET AND PROPERTY TAXES 185.22 Although no public hearing will be held, the (city/county) 185.23 governing body or board of commissioners is planning to adopt 185.24 the following budget and property tax levy. 185.25 185.26 SPENDING: The total budget amounts below compare 185.27 (city's/county's) (year) total actual budget with the amount the 185.28 (city/county) proposes to spend in (year). 185.29 185.30 (Year) Total Proposed (Year) Change from 185.31 Actual Budget Budget (Year)-(Year) 185.32 185.33 $....... $....... ...% 185.34 185.35 TAXES: The property tax amounts below compare that portion of 185.36 the current budget levied in property taxes in (city/county) for 186.1 (year) with the property taxes the (city/county) proposes to 186.2 collect in (year). 186.3 186.4 (Year) Property Proposed (Year) Change from 186.5 Taxes Property Taxes (Year)-(Year) 186.6 186.7 $....... $....... ...% 186.8 Although no public hearing will be held, you are invited to 186.9 send any written comments to: 186.10 (City/County) 186.11 (Location/Address)" 186.12 (iii) If the city's governing body or county board of 186.13 commissioners decide to hold a public hearing on the proposed 186.14 budget and levy, even though the proposed levy is equal to or 186.15 less than the previous year's certified levy amount, the 186.16 advertisement format in clause (i) must be used. 186.17 (d) For purposes of this subdivision, the budget amounts 186.18 listed on the advertisement mean: 186.19 (1) for cities, the total government fund expenditures, as 186.20 defined by the state auditor under section 471.6965, less any 186.21 expenditures for improvements or services that are specially 186.22 assessed or charged under chapter 429, 430, 435, or the 186.23 provisions of any other law or charter; and 186.24 (2) for counties, the total government fund expenditures, 186.25 as defined by the state auditor under section 375.169, less any 186.26 expenditures for direct payments to recipients or providers for 186.27 the human service aids listed below: 186.28 (1) aid to families with dependent children under sections 186.29 256.82, subdivision 1, and 256.935, subdivision 1; 186.30 (2) medical assistance under sections 256B.041, subdivision 186.31 5, and 256B.19, subdivision 1; 186.32 (3) general assistance medical care under section 256D.03, 186.33 subdivision 6; 186.34 (4) general assistance under section 256D.03, subdivision 186.35 2; 186.36 (5) emergency assistance under section 256.871, subdivision 187.1 6; 187.2 (6) Minnesota supplemental aid under section 256D.36, 187.3 subdivision 1; 187.4 (7) preadmission screening under section 256B.0911, and 187.5 alternative care grants under section 256B.0913; 187.6 (8) general assistance medical care claims processing, 187.7 medical transportation and related costs under section 256D.03, 187.8 subdivision 4; 187.9 (9) medical transportation and related costs under section 187.10 256B.0625, subdivisions 17 to 18a; 187.11 (10) group residential housing under 256I.05, subdivision 187.12 8, transferred from programs in clauses (4) and (6); or 187.13 (11) any successor programs to those listed in clauses (1) 187.14 to (10). 187.15 (e) A city with a population of over 500 but not more than 187.16 2,500 must advertise by posted notice as defined in section 187.17 645.12, subdivision 1. The advertisement must be posted at the 187.18 time provided in paragraph (a). It must be in the form required 187.19 in paragraph (b). 187.20 (f) For purposes of this subdivision, the population of a 187.21 city is the most recent population as determined by the state 187.22 demographer under section 4A.02. 187.23 (g) The commissioner of revenue, subject to the approval of 187.24 the chairs of the house and senate tax committees, shall 187.25 prescribe the form and format of the advertisement. 187.26 Sec. 3. Minnesota Statutes 1998, section 275.065, 187.27 subdivision 6, is amended to read: 187.28 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 187.29 (a) For purposes of this section, the following terms shall have 187.30 the meanings given: 187.31 (1) "Initial hearing" means the first and primary hearing 187.32 held to discuss the taxing authority's proposed budget and 187.33 proposed property tax levy for taxes payable in the following 187.34 year, or, for school districts, the current budget and the 187.35 proposed property tax levy for taxes payable in the following 187.36 year. 188.1 (2) "Continuation hearing" means a hearing held to complete 188.2 the initial hearing, if the initial hearing is not completed on 188.3 its scheduled date. 188.4 (3) "Subsequent hearing" means the hearing held to adopt 188.5 the taxing authority's final property tax levy, and, in the case 188.6 of taxing authorities other than school districts, the final 188.7 budget, for taxes payable in the following year. 188.8 (b) Except as provided in paragraph (g), between 188.9 November2919 and December2010, the governing bodies of a 188.10 city that has a population over 500, county, metropolitan 188.11 special taxing districts as defined in subdivision 3, paragraph 188.12 (i), and regional library districts shall each hold an initial 188.13 public hearing to discuss and seek public comment on its final 188.14 budget and property tax levy for taxes payable in the following 188.15 year, and the governing body of the school district shall hold 188.16 an initial public hearing to review its current budget and 188.17 proposed property tax levy for taxes payable in the following 188.18 year. The metropolitan special taxing districts shall be 188.19 required to hold only a single joint initial public hearing, the 188.20 location of which will be determined by the affected 188.21 metropolitan agencies. 188.22 (c) The initial hearing must be held after 5:00 p.m. if 188.23 scheduled on a day other than Saturday. No initial hearing may 188.24 be held on a Sunday. 188.25 (d) At the initial hearing under this subdivision, the 188.26 percentage increase in property taxes proposed by the taxing 188.27 authority, if any, and the specific purposes for which property 188.28 tax revenues are being increased must be discussed. During the 188.29 discussion, the governing body shall hear comments regarding a 188.30 proposed increase and explain the reasons for the proposed 188.31 increase. The public shall be allowed to speak and to ask 188.32 questions. At the public hearing, the school district must also 188.33 provide and discuss information on the distribution of its 188.34 revenues by revenue source, and the distribution of its spending 188.35 by program area. 188.36 (e) If the initial hearing is not completed on its 189.1 scheduled date, the taxing authority must announce, prior to 189.2 adjournment of the hearing, the date, time, and place for the 189.3 continuation of the hearing. The continuation hearing must be 189.4 held at leastfivethree business days but no more than14seven 189.5 business days after the initial hearing. A continuation hearing 189.6 may not be held later than December2010 except as provided in 189.7 paragraphs (f) and (g). A continuation hearing must be held 189.8 after 5:00 p.m. if scheduled on a day other than Saturday. No 189.9 continuation hearing may be held on a Sunday. 189.10 (f) The governing body of a county shall hold its initial 189.11 hearing on thefirst Thursdaythird Tuesday inDecemberNovember 189.12 each year, and may hold additional initial hearings on other 189.13 dates before December2010 if necessary for the convenience of 189.14 county residents. If the county needs a continuation of its 189.15 hearing, the continuation hearing shall be held on thethird189.16Tuesdayfirst Thursday in December.If the third Tuesday in189.17December falls on December 21, the county's continuation hearing189.18shall be held on Monday, December 20.189.19 (g) The metropolitan special taxing districts shall hold a 189.20 joint initial public hearing on the first Wednesday of 189.21 December. A continuation hearing, if necessary, shall be held 189.22 on the second Wednesday of December even if that second 189.23 Wednesday is after December 10. 189.24 (h) The county auditor shall provide for the coordination 189.25 of initial and continuation hearing dates for all school 189.26 districts and cities within the county to prevent conflicts 189.27 under clauses (i) and (j). 189.28 (i) By August 10, each school board and the board of the 189.29 regional library district shall certify to the county auditors 189.30 of the counties in which the school district or regional library 189.31 district is located the dates on which it elects to hold its 189.32 initial hearing and any continuation hearing. If a school board 189.33 or regional library district does not certify these dates by 189.34 August 10, the auditor will assign the initial and continuation 189.35 hearing dates. The dates elected or assigned must not conflict 189.36 with the initial and continuation hearing dates of the county or 190.1 the metropolitan special taxing districts. 190.2 (j) By August 20, the county auditor shall notify the 190.3 clerks of the cities within the county of the dates on which 190.4 school districts and regional library districts have elected to 190.5 hold their initial and continuation hearings. At the time a 190.6 city certifies its proposed levy under subdivision 1 it shall 190.7 certify the dates on which it elects to hold its initial hearing 190.8 and any continuation hearing. Until September 15, thefirst and190.9second Mondaysfourth Monday of November and the first Monday of 190.10 December are reserved for the use of the cities. If a city does 190.11 not certify its hearing dates by September 15, the auditor shall 190.12 assign the initial and continuation hearing dates. The dates 190.13 elected or assigned for the initial hearing must not conflict 190.14 with the initial hearing dates of the county, metropolitan 190.15 special taxing districts, regional library districts, or school 190.16 districts within which the city is located. To the extent 190.17 possible, the dates of the city's continuation hearing should 190.18 not conflict with the continuation hearing dates of the county, 190.19 metropolitan special taxing districts, regional library 190.20 districts, or school districts within which the city is 190.21 located. This paragraph does not apply to cities of 500 190.22 population or less. 190.23 (k) The county initial hearing date and the city, 190.24 metropolitan special taxing district, regional library district, 190.25 and school district initial hearing dates must be designated on 190.26 the notices required under subdivision 3. The continuation 190.27 hearing dates need not be stated on the notices. 190.28 (l) At a subsequent hearing, each county, school district, 190.29 city over 500 population, and metropolitan special taxing 190.30 district may amend its proposed property tax levy and must adopt 190.31 a final property tax levy. Each county, city over 500 190.32 population, and metropolitan special taxing district may also 190.33 amend its proposed budget and must adopt a final budget at the 190.34 subsequent hearing. The final property tax levy must be adopted 190.35 prior to adopting the final budget. A school district is not 190.36 required to adopt its final budget at the subsequent hearing. 191.1 The subsequent hearing of a taxing authority must be held on a 191.2 date subsequent to the date of the taxing authority's initial 191.3 public hearing. If a continuation hearing is held, the 191.4 subsequent hearing must be held either immediately following the 191.5 continuation hearing or on a date subsequent to the continuation 191.6 hearing. The subsequent hearing may be held at a regularly 191.7 scheduled board or council meeting or at a special meeting 191.8 scheduled for the purposes of the subsequent hearing. The 191.9 subsequent hearing of a taxing authority does not have to be 191.10 coordinated by the county auditor to prevent a conflict with an 191.11 initial hearing, a continuation hearing, or a subsequent hearing 191.12 of any other taxing authority. All subsequent hearings must be 191.13 held prior to five working days after December 20 of the levy 191.14 year. The date, time, and place of the subsequent hearing must 191.15 be announced at the initial public hearing or at the 191.16 continuation hearing. 191.17 (m) The property tax levy certified under section 275.07 by 191.18 a city of any population, county, metropolitan special taxing 191.19 district, regional library district, or school district must not 191.20 exceed the proposed levy determined under subdivision 1, except 191.21 by an amount up to the sum of the following amounts: 191.22 (1) the amount of a school district levy whose voters 191.23 approved a referendum to increase taxes under section 123B.63, 191.24 subdivision 3, or 126C.17, subdivision 9, after the proposed 191.25 levy was certified; 191.26 (2) the amount of a city or county levy approved by the 191.27 voters after the proposed levy was certified; 191.28 (3) the amount of a levy to pay principal and interest on 191.29 bonds approved by the voters under section 475.58 after the 191.30 proposed levy was certified; 191.31 (4) the amount of a levy to pay costs due to a natural 191.32 disaster occurring after the proposed levy was certified, if 191.33 that amount is approved by the commissioner of revenue under 191.34 subdivision 6a; 191.35 (5) the amount of a levy to pay tort judgments against a 191.36 taxing authority that become final after the proposed levy was 192.1 certified, if the amount is approved by the commissioner of 192.2 revenue under subdivision 6a; 192.3 (6) the amount of an increase in levy limits certified to 192.4 the taxing authority by the commissioner of children, families, 192.5 and learning or the commissioner of revenue after the proposed 192.6 levy was certified; and 192.7 (7) the amount required under section 126C.55. 192.8 (n) This subdivision does not apply to townsand, special 192.9 taxing districts other than regional library districts and 192.10 metropolitan special taxing districts, cities under 500 192.11 population, and any counties or cities over 500 population whose 192.12 proposed property tax levy is less than or equal to its levy 192.13 certified under section 275.07, subdivision 1, for the previous 192.14 year. 192.15 (o) Notwithstanding the requirements of this section, the 192.16 employer is required to meet and negotiate over employee 192.17 compensation as provided for in chapter 179A. 192.18 Sec. 4. Minnesota Statutes 1998, section 275.065, 192.19 subdivision 8, is amended to read: 192.20 Subd. 8. [HEARING.] Notwithstanding any other provision of 192.21 law, Ramsey county, the city of St. Paul, and independent school 192.22 district No. 625 are authorized to and shall hold their initial 192.23 public hearing jointly. The hearing must be held on thesecond192.24 fourth Tuesday ofDecemberNovember each year. The 192.25 advertisement required in subdivision 5a may be a joint 192.26 advertisement. The hearing is otherwise subject to the 192.27 requirements of this section. 192.28 Ramsey county is authorized to hold an additional initial 192.29 hearing or hearings as provided under this section, provided 192.30 that any additional hearings must not conflict with the initial 192.31 or continuation hearing dates of the other taxing districts. 192.32 However, if Ramsey county elects not to hold such additional 192.33 initial hearing or hearings, the joint initial hearing required 192.34 by this subdivision must be held in a St. Paul location 192.35 convenient to residents of Ramsey county. 192.36 Sec. 5. Minnesota Statutes 1998, section 275.065, is 193.1 amended by adding a subdivision to read: 193.2 Subd. 9. [REVERSE REFERENDUM.] (a) The reverse referendum 193.3 procedure in this subdivision applies only in the case of a 193.4 county, or a city that has a population of more than 2,500, that 193.5 has adopted a property tax levy increase over the levy amount 193.6 certified under section 275.07, subdivision 1, for the previous 193.7 year that exceeds the greater of (1) two percent, or (2) a 193.8 percentage increase equal to the sum of the percentage increase 193.9 in the implicit price deflator and the percentage increase in 193.10 the number of households for that county or city, as calculated 193.11 under section 275.71, subdivision 3, clauses (1) and (2), for 193.12 taxes levied in the current year. By September 1 the 193.13 commissioner of revenue shall certify to the county the 193.14 percentage increase allowed for each local government located in 193.15 the county that is subject to this subdivision. 193.16 (b) If within 14 calendar days after the public hearing and 193.17 adoption of a levy under subdivision 6, a petition signed by 193.18 voters equal in number to ten percent of the registered voters 193.19 in the county or city in the last general election requesting a 193.20 referendum on the levy increase is filed with the county 193.21 auditor, or the city clerk, the levy increase shall not be 193.22 effective until it has been submitted to the voters at a special 193.23 election to be held on the last Tuesday in January, and a 193.24 majority of votes cast on the question of approving the levy 193.25 increase are in the affirmative. The commissioner of revenue 193.26 shall prepare the form of the question to be presented at the 193.27 referendum, which shall reference only the amount of the 193.28 property tax levy increase over the previous year. 193.29 (c) The county or city shall notify the county auditor of 193.30 the results of the referendum. If the majority of the votes 193.31 cast on the question are in the affirmative, the levy adopted 193.32 under subdivision 6 shall be certified to the county auditor 193.33 under section 275.07, subdivision 1. If the majority of the 193.34 votes cast on the question are in the negative, an amount equal 193.35 to the preceding year's levy multiplied by one plus the 193.36 percentage increase allowed under paragraph (a) shall be 194.1 certified to the county auditor for purposes of section 275.07, 194.2 subdivision 1. 194.3 (d) For purposes of this subdivision, "property tax levy" 194.4 does not include a levy to pay general obligation bonds, as 194.5 certified to the county under section 475.61 or other applicable 194.6 law. 194.7 Sec. 6. Minnesota Statutes 1998, section 275.07, 194.8 subdivision 1, is amended to read: 194.9 Subdivision 1. [CERTIFICATION OF LEVY.] Except as 194.10 otherwise provided in this subdivision, the taxes voted by 194.11 cities, counties, school districts, and special districts shall 194.12 be certified by the proper authorities to the county auditor on 194.13 or before five working days after December 20 in each year. A 194.14 county or city to which the reverse referendum provisions under 194.15 section 275.065, subdivision 9, apply shall certify the taxes to 194.16 the county auditor by January 5, except that any county or city 194.17 for which a petition has been filed under section 275.065, 194.18 subdivision 9, must certify the day immediately following the 194.19 election under that section. A town must certify the levy 194.20 adopted by the town board to the county auditor by September 15 194.21 each year. If the town board modifies the levy at a special 194.22 town meeting after September 15, the town board must recertify 194.23 its levy to the county auditor on or before five working days 194.24 after December 20. The taxes certified shall not be reduced by 194.25 the county auditor by the aid received under section 273.1398, 194.26 subdivision 2, but shall be reduced by the county auditor by the 194.27 aid received under section 273.1398, subdivision 3. If a city, 194.28 town, county, school district, or special district fails to 194.29 certify its levy by that date, its levy shall be the amount 194.30 levied by it for the preceding year. 194.31 Sec. 7. [275.078] [AUTHORIZATION; TAX RATE INCREASE.] 194.32 On or before October 1, 1999, and each subsequent year, the 194.33 county auditor shall certify to the governing body of each home 194.34 rule charter or statutory city in the county and to the county 194.35 board, the following information for the taxing jurisdiction: 194.36 (1) the taxing jurisdiction's certified levy under section 195.1 275.08 for the previous year, taxes payable in the current year; 195.2 (2) the taxing jurisdiction's net tax capacity for the 195.3 current assessment year, for taxes payable in the following 195.4 year; and 195.5 (3) the local tax rate, obtained by dividing the amount in 195.6 clause (1) by the amount in clause (2), rounded to the nearest 195.7 hundredth percent. 195.8 In order to impose a tax rate for taxes payable in the following 195.9 year higher than the tax rate certified by the county auditor 195.10 under clause (3), the governing body of the city or the county 195.11 board must adopt a resolution, after holding a public hearing, 195.12 authorizing a higher tax rate and file a copy of the resolution 195.13 with the county auditor on or before October 20, 1999, and each 195.14 year thereafter. A county auditor is prohibited from fixing a 195.15 tax rate under section 275.08 for that taxing jurisdiction for 195.16 taxes payable in the following year that is higher than the rate 195.17 certified under clause (3) if a resolution has not been filed. 195.18 For purposes of this section, "public hearing" includes, but is 195.19 not limited to, regularly scheduled city council hearings and 195.20 county board meetings. 195.21 Sec. 8. [EFFECTIVE DATE.] 195.22 Sections 1, 3, and 4 are effective for notices prepared in 195.23 1999 and thereafter. Section 2 is effective for newspaper 195.24 advertisements in 1999 and thereafter. Sections 5 and 6 are 195.25 effective for taxes levied in 1999 and thereafter, for taxes 195.26 payable in 2000 and thereafter. 195.27 ARTICLE 9 195.28 STATE FUNDING OF DISTRICT COURTS 195.29 TRANSFER OF FINES, FEES, AND OTHER MONEY TO STATE 195.30 Section 1. Minnesota Statutes 1998, section 97A.065, 195.31 subdivision 2, is amended to read: 195.32 Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and 195.33 forfeited bail collected from prosecutions of violations of: 195.34 the game and fish laws; sections 84.091 to 84.15; sections 84.81 195.35 to 84.91; section 169.121, when the violation involved an 195.36 off-road recreational vehicle as defined in section 169.01, 196.1 subdivision 86; chapter 348; and any other law relating to wild 196.2 animals or aquatic vegetation, must be paid to the treasurer of 196.3 the county where the violation is prosecuted. The county 196.4 treasurer shall submit one-half of the receipts to the 196.5 commissioner and credit the balance to the county general 196.6 revenue fund except as provided in paragraphs (b), (c), and 196.7 (d). In a county in a judicial district under section 480.181, 196.8 subdivision 1, paragraph (b), as added in 1999 S.F. No. 2221, 196.9 article 7, section 26, the share that would otherwise go to the 196.10 county under this paragraph must be submitted to the state 196.11 treasurer for deposit in the state treasury and credited to the 196.12 general fund. 196.13 (b) The commissioner must reimburse a county, from the game 196.14 and fish fund, for the cost of keeping prisoners prosecuted for 196.15 violations under this section if the county board, by 196.16 resolution, directs: (1) the county treasurer to submit all 196.17 fines and forfeited bail to the commissioner; and (2) the county 196.18 auditor to certify and submit monthly itemized statements to the 196.19 commissioner. 196.20 (c) The county treasurer shall submit one-half of the 196.21 receipts collected under paragraph (a) from prosecutions of 196.22 violations of sections 84.81 to 84.91, and 169.121, except 196.23 receipts that are surcharges imposed under section 357.021, 196.24 subdivision 6, to the state treasurer and credit the balance to 196.25 the county general fund. The state treasurer shall credit these 196.26 receipts to the snowmobile trails and enforcement account in the 196.27 natural resources fund. 196.28 (d) The county treasurer shall indicate the amount of the 196.29 receipts that are surcharges imposed under section 357.021, 196.30 subdivision 6, and shall submit all of those receipts to the 196.31 state treasurer. 196.32 Sec. 2. Minnesota Statutes 1998, section 273.1398, 196.33 subdivision 2, is amended to read: 196.34 Subd. 2. [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 196.35 Homestead and agricultural credit aid for each unique taxing 196.36 jurisdiction equals the product of (1) the homestead and 197.1 agricultural credit aid base, and (2) the growth adjustment 197.2 factor, plus the net tax capacity adjustment and the fiscal 197.3 disparity adjustment.For aid payable in 2000, each county197.4shall have its homestead and agricultural credit aid permanently197.5reduced by an amount equal to one-third of the additional amount197.6received by the county under section 477A.03, subdivision 2,197.7paragraph (c), clause (ii).197.8 Sec. 3. Minnesota Statutes 1998, section 273.1398, is 197.9 amended by adding a subdivision to read: 197.10 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15, 197.11 1999, the supreme court shall determine and certify to the 197.12 commissioner of revenue for each county, other than counties 197.13 located in the eighth judicial district, the county's share of 197.14 the costs assumed under 1999 S.F. No. 2221, article 7, during 197.15 the fiscal year beginning July 1, 2000, less an amount equal to 197.16 the county's share of transferred fines collected by the 197.17 district courts in the county during calendar year 1998. 197.18 (b) Payments to a county under subdivision 2 or section 197.19 273.166 for calendar year 2000 must be permanently reduced by an 197.20 amount equal to 75 percent of the net cost to the state for 197.21 assumption of district court costs as certified in paragraph (a). 197.22 (c) Payments to a county under subdivision 2 or section 197.23 273.166 for calendar year 2001 must be permanently reduced by an 197.24 amount equal to 25 percent of the net cost to the state for 197.25 assumption of district court costs as certified in paragraph (a). 197.26 Sec. 4. Minnesota Statutes 1998, section 299D.03, 197.27 subdivision 5, is amended to read: 197.28 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 197.29 and forfeited bail money, from traffic and motor vehicle law 197.30 violations, collected from persons apprehended or arrested by 197.31 officers of the state patrol, shall be paid by the person or 197.32 officer collecting the fines, forfeited bail money or 197.33 installments thereof, on or before the tenth day after the last 197.34 day of the month in which these moneys were collected, to the 197.35 county treasurer of the county where the violation occurred. 197.36 Three-eighths of these receipts shall be credited to the general 198.1 revenue fund of the county, except that in a county in a 198.2 judicial district under section 480.181, subdivision 1, 198.3 paragraph (b), as added in 1999 S.F. No. 2221, article 7, 198.4 section 26, this three-eighths share must be transmitted to the 198.5 state treasurer for deposit in the state treasury and credited 198.6 to the general fund. The other five-eighths of these receipts 198.7 shall be transmitted by that officer to the state treasurer and 198.8 shall be credited as follows: 198.9 (1) In the fiscal year ending June 30, 1991, the first 198.10 $275,000 in money received by the state treasurer after June 4, 198.11 1991, must be credited to the transportation services fund, and 198.12 the remainder in the fiscal year credited to the trunk highway 198.13 fund. 198.14 (2) In fiscal year 1992, the first $215,000 in money 198.15 received by the state treasurer in the fiscal year must be 198.16 credited to the transportation services fund, and the remainder 198.17 credited to the trunk highway fund. 198.18 (3) In fiscal years 1993 and subsequent years, the entire 198.19 amount received by the state treasurer must be credited to the 198.20 trunk highway fund. If, however, the violation occurs within a 198.21 municipality and the city attorney prosecutes the offense, and a 198.22 plea of not guilty is entered, one-third of the receipts shall 198.23 be credited to the general revenue fund of the county, one-third 198.24 of the receipts shall be paid to the municipality prosecuting 198.25 the offense, and one-third shall be transmitted to the state 198.26 treasurer as provided in this subdivision. All costs of 198.27 participation in a nationwide police communication system 198.28 chargeable to the state of Minnesota shall be paid from 198.29 appropriations for that purpose. 198.30 (b) Notwithstanding any other provisions of law, all fines 198.31 and forfeited bail money from violations of statutes governing 198.32 the maximum weight of motor vehicles, collected from persons 198.33 apprehended or arrested by employees of the state of Minnesota, 198.34 by means of stationary or portable scales operated by these 198.35 employees, shall be paid by the person or officer collecting the 198.36 fines or forfeited bail money, on or before the tenth day after 199.1 the last day of the month in which the collections were made, to 199.2 the county treasurer of the county where the violation 199.3 occurred. Five-eighths of these receipts shall be transmitted 199.4 by that officer to the state treasurer and shall be credited to 199.5 the highway user tax distribution fund. Three-eighths of these 199.6 receipts shall be credited to the general revenue fund of the 199.7 county, except that in a county in a judicial district under 199.8 section 480.181, subdivision 1, paragraph (b), as added in 1999 199.9 S.F. No. 2221, article 7, section 26, this three-eighths share 199.10 must be transmitted to the state treasurer for deposit in the 199.11 state treasury and credited to the general fund. 199.12 Sec. 5. Minnesota Statutes 1998, section 357.021, 199.13 subdivision 1a, is amended to read: 199.14 Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 199.15 Every person, including the state of Minnesota and all bodies 199.16 politic and corporate, who shall transact any business in the 199.17 district court, shall pay to the court administrator of said 199.18 court the sundry fees prescribed in subdivision 2. Except as 199.19 provided in paragraph (d), the court administrator shall 199.20 transmit the fees monthly to the state treasurer for deposit in 199.21 the state treasury and credit to the general fund. 199.22 (b) In a county which has a screener-collector position, 199.23 fees paid by a county pursuant to this subdivision shall be 199.24 transmitted monthly to the county treasurer, who shall apply the 199.25 fees first to reimburse the county for the amount of the salary 199.26 paid for the screener-collector position. The balance of the 199.27 fees collected shall then be forwarded to the state treasurer 199.28 for deposit in the state treasury and credited to the general 199.29 fund. In a county inthe eightha judicial district under 199.30 section 480.181, subdivision 1, paragraph (b), as added in 1999 199.31 S.F. No. 2221, article 7, section 26, which has a 199.32 screener-collector position, the fees paid by a county shall be 199.33 transmitted monthly to the state treasurer for deposit in the 199.34 state treasury and credited to the general fund. A 199.35 screener-collector position for purposes of this paragraph is an 199.36 employee whose function is to increase the collection of fines 200.1 and to review the incomes of potential clients of the public 200.2 defender, in order to verify eligibility for that service. 200.3 (c) No fee is required under this section from the public 200.4 authority or the party the public authority represents in an 200.5 action for: 200.6 (1) child support enforcement or modification, medical 200.7 assistance enforcement, or establishment of parentage in the 200.8 district court, or child or medical support enforcement 200.9 conducted by an administrative law judge in an administrative 200.10 hearing under section 518.5511; 200.11 (2) civil commitment under chapter 253B; 200.12 (3) the appointment of a public conservator or public 200.13 guardian or any other action under chapters 252A and 525; 200.14 (4) wrongfully obtaining public assistance under section 200.15 256.98 or 256D.07, or recovery of overpayments of public 200.16 assistance; 200.17 (5) court relief under chapter 260; 200.18 (6) forfeiture of property under sections 169.1217 and 200.19 609.531 to 609.5317; 200.20 (7) recovery of amounts issued by political subdivisions or 200.21 public institutions under sections 246.52, 252.27, 256.045, 200.22 256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, and 200.23 260.251, or other sections referring to other forms of public 200.24 assistance; 200.25 (8) restitution under section 611A.04; or 200.26 (9) actions seeking monetary relief in favor of the state 200.27 pursuant to section 16D.14, subdivision 5. 200.28 (d) The fees collected for child support modifications 200.29 under subdivision 2, clause (13), must be transmitted to the 200.30 county treasurer for deposit in the county general fund. The 200.31 fees must be used by the county to pay for child support 200.32 enforcement efforts by county attorneys. 200.33 Sec. 6. Minnesota Statutes 1998, section 477A.03, 200.34 subdivision 2, is amended to read: 200.35 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 200.36 discharge the duties imposed by sections 477A.011 to 477A.014 is 201.1 annually appropriated from the general fund to the commissioner 201.2 of revenue. 201.3 (b) Aid payments to counties under section 477A.0121 are 201.4 limited to $20,265,000 in 1996. Aid payments to counties under 201.5 section 477A.0121 are limited to $27,571,625 in 1997. For aid 201.6 payable in 1998 and thereafter, the total aids paid under 201.7 section 477A.0121 are the amounts certified to be paid in the 201.8 previous year, adjusted for inflation as provided under 201.9 subdivision 3. 201.10 (c)(i) For aids payable in 1998 and thereafter, the total 201.11 aids paid to counties under section 477A.0122 are the amounts 201.12 certified to be paid in the previous year, adjusted for 201.13 inflation as provided under subdivision 3. 201.14 (ii) Aid payments to counties under section 477A.0122 in 201.15 2000 are further increased by an 201.16 additional$30,000,000$20,000,000 in 2000. 201.17 (d) Aid payments to cities in 1999 under section 477A.013, 201.18 subdivision 9, are limited to $380,565,489. For aids payable in 201.19 2000 and 2001, the total aids paid under section 477A.013, 201.20 subdivision 9, are the amounts certified to be paid in the 201.21 previous year, adjusted for inflation as provided under 201.22 subdivision 3. For aids payable in 2002, the total aids paid 201.23 under section 477A.013, subdivision 9, are the amounts certified 201.24 to be paid in the previous year, adjusted for inflation as 201.25 provided under subdivision 3, and increased by the amount 201.26 certified to be paid in 2001 under section 477A.06. For aids 201.27 payable in 2003 and thereafter, the total aids paid under 201.28 section 477A.013, subdivision 9, are the amounts certified to be 201.29 paid in the previous year, adjusted for inflation as provided 201.30 under subdivision 3. The additional amount authorized under 201.31 subdivision 4 is not included when calculating the appropriation 201.32 limits under this paragraph. 201.33 Sec. 7. Minnesota Statutes 1998, section 485.018, 201.34 subdivision 5, is amended to read: 201.35 Subd. 5. [COLLECTION OF FEES.] The court administrator of 201.36 district court shall charge and collect all fees as prescribed 202.1 by law and all such fees collected by the court administrator as 202.2 court administrator of district court shall be paid to the 202.3 county treasurer. Except for those portions of forfeited bail 202.4 paid to victims pursuant to existing law, the county treasurer 202.5 shall forward all revenue from fees and forfeited bail collected 202.6 under chapters 357, 487, and 574 to the state treasurer for 202.7 deposit in the state treasury and credit to the general fund, 202.8 unless otherwise provided in chapter 611A or other law, in the 202.9 manner and at the times prescribed by the state treasurer, but 202.10 not less often than once each month. If the defendant or 202.11 probationer is located after forfeited bail proceeds have been 202.12 forwarded to the state treasurer, the state treasurer shall 202.13 reimburse the county, on request, for actual costs expended for 202.14 extradition, transportation, or other costs necessary to return 202.15 the defendant or probationer to the jurisdiction where the bail 202.16 was posted, in an amount not more than the amount of forfeited 202.17 bail.All other money must be deposited in the county general202.18fund unless otherwise provided by law.The court administrator 202.19 of district court shall not retain any additional compensation, 202.20 per diem or other emolument for services as court administrator 202.21 of district court, but may receive and retain mileage and 202.22 expense allowances as prescribed by law. 202.23 Sec. 8. Minnesota Statutes 1998, section 487.02, 202.24 subdivision 2, is amended to read: 202.25 Subd. 2. Except as provided in this subdivision, the 202.26 county board shall levy taxes annually against the taxable 202.27 property within the county as necessary for the establishment, 202.28 operation and maintenance of the county court or courts within 202.29 the county. Any county in a judicial district under section 202.30 480.181, subdivision 1, paragraph (b), as added by 1999 S.F. No. 202.31 2221, article 7, section 26, is prohibited from levying property 202.32 taxes for these purposes, except for any amounts necessary to 202.33 pay the costs incurred in the first six months of calendar year 202.34 2000 with respect to counties in the fifth, seventh, and ninth 202.35 judicial districts. 202.36 Sec. 9. Minnesota Statutes 1998, section 487.32, 203.1 subdivision 3, is amended to read: 203.2 Subd. 3. A judge of a county court may order any sums 203.3 forfeited to be reinstated and thecountystate treasurer shall 203.4 then refund accordingly. Thecountystate treasurer shall 203.5 reimburse the court administrator if the court administrator 203.6 refunds the deposit upon a judge's order and obtains a receipt 203.7 to be used as a voucher. 203.8 Sec. 10. Minnesota Statutes 1998, section 487.33, 203.9 subdivision 5, is amended to read: 203.10 Subd. 5. [ALLOCATION.] The court administrator shall 203.11 provide the county treasurer with the name of the municipality 203.12 or other subdivision of government where the offense was 203.13 committed which employed or provided by contract the arresting 203.14 or apprehending officer and the name of the municipality or 203.15 other subdivision of government which employed the prosecuting 203.16 attorney or otherwise provided for prosecution of the offense 203.17 for each fine or penalty and the total amount of fines or 203.18 penalties collected for each municipality or other subdivision 203.19 of government. On or before the last day of each month, the 203.20 county treasurer shall pay over to the treasurer of each 203.21 municipality or subdivision of government within the county all 203.22 fines or penalties for parking violations for which complaints 203.23 and warrants have not been issued and one-third of all fines or 203.24 penalties collected during the previous month for offenses 203.25 committed within the municipality or subdivision of government 203.26 from persons arrested or issued citations by officers employed 203.27 by the municipality or subdivision or provided by the 203.28 municipality or subdivision by contract. An additional 203.29 one-third of all fines or penalties shall be paid to the 203.30 municipality or subdivision of government providing prosecution 203.31 of offenses of the type for which the fine or penalty is 203.32 collected occurring within the municipality or subdivision, 203.33 imposed for violations of state statute or of an ordinance, 203.34 charter provision, rule or regulation of a city whether or not a 203.35 guilty plea is entered or bail is forfeited. Except as provided 203.36 in section 299D.03, subdivision 5, or as otherwise provided by 204.1 law, all other fines and forfeitures and all fees and statutory 204.2 court costs collected by the court administrator shall be paid 204.3 to the county treasurer of the county in which the funds were 204.4 collected who shall dispense them as provided by law. In a 204.5 county in a judicial district under section 480.181, subdivision 204.6 1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 204.7 section 26, all other fines, forfeitures, fees, and statutory 204.8 court costs must be paid to the state treasurer for deposit in 204.9 the state treasury and credited to the general fund. 204.10 Sec. 11. Minnesota Statutes 1998, section 574.34, 204.11 subdivision 1, is amended to read: 204.12 Subdivision 1. [GENERAL.] Fines and forfeitures not 204.13 specially granted or appropriated by law shall be paid into the 204.14 treasury of the county where they are incurred, except in a 204.15 county in a judicial district under section 480.181, subdivision 204.16 1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 204.17 section 26, the fines and forfeitures must be deposited in the 204.18 state treasury and credited to the general fund. 204.19 Sec. 12. [APPROPRIATION.] 204.20 $18,848,866 is appropriated for fiscal year 2001 from the 204.21 general fund to the district courts for purposes of funding the 204.22 district court expenses under this article. 204.23 Sec. 13. [EFFECTIVE DATES; CONTINGENCY.] 204.24 (a) Sections 2 and 6 are effective for aids payable in 204.25 2000. The other provisions of this article providing for the 204.26 transfer of fees and fines to the state are effective January 1, 204.27 2000, with respect to counties in the eighth judicial district, 204.28 and July 1, 2000, with respect to counties in the fifth, 204.29 seventh, and ninth judicial districts. 204.30 (b) Notwithstanding paragraph (a), this article does not 204.31 take effect unless the state assumes the district court costs 204.32 under 1999 S.F. No. 2221, article 7. 204.33 ARTICLE 10 204.34 TAX INCREMENT FINANCING 204.35 Section 1. Minnesota Statutes 1998, section 273.1399, 204.36 subdivision 6, is amended to read: 205.1 Subd. 6. [EXEMPT DISTRICTS.] (a) The provisions of this 205.2 section do not apply to exempt tax increment financing districts 205.3 as specified by this subdivision. 205.4 (b) A tax increment financing district for an ethanol 205.5 production facility that satisfies all of the following 205.6 requirements is exempt: 205.7 (1) The district is an economic development district, that 205.8 qualifies under section 469.176, subdivision 4c, paragraph (a), 205.9 clause (1). 205.10 (2) The facility is certified by the commissioner of 205.11 agriculture to qualify for state payments for ethanol 205.12 development under section 41A.09 to the extent funds are 205.13 available. 205.14 (3) Increments from the district are used only to finance 205.15 the qualifying ethanol development project located in the 205.16 district or to pay for administrative costs of the district. 205.17 (4) The district is located outside of the seven-county 205.18 metropolitan area, as defined in section 473.121. 205.19 (5) The tax increment financing plan was approved by a 205.20 resolution of the county board. 205.21 (6) The exemption provided by this paragraph applies until 205.22 the first year after the total amount of increment for the 205.23 district exceeds $1,500,000. The county auditor shall notify 205.24 the commissioner of revenue of the expiration of the exemption 205.25 by June 1 of the year in which the auditor projects the revenues 205.26 from increments will exceed $1,500,000. On or before the 205.27 expiration of the exemption, the municipality may elect to make 205.28 a qualifying local contribution under paragraph (d) in lieu of 205.29 the state aid reduction. 205.30 (c) A qualified housing district is exempt. 205.31 (d)(1) A district is exempt if the municipality elects at 205.32 the time of approving the tax increment financing plan for the 205.33 district to make a qualifying local contribution. To qualify 205.34 for the exemption in each year, the authority or the 205.35 municipality must make a qualifying local contribution equal to 205.36 the listed percentages of increment from the district or 206.1 subdistrict: 206.2 (A) for an economic development district, a housing206.3district,or a renewal and renovation district, ten percent; 206.4 (B) for a redevelopment district, a housing district, a 206.5 mined underground space district, a hazardous substance 206.6 subdistrict, or a soils condition district, five percent. 206.7 (2) If the municipality elects to make a qualifying 206.8 contribution and fails to make the required contribution for a 206.9 year, the state aid reduction applies for the year. The state 206.10 aid reduction equals the greater of (A) the required local 206.11 contribution or (B) the amount of the aid reduction that applies 206.12 under subdivision 3. For a district exempt under paragraph (b), 206.13 no qualifying local contribution is required for years in which 206.14 the district is exempt. 206.15 (3)(A) If the sum of required local contributions for all 206.16 districts in the municipality exceeds two percent of city net 206.17 tax capacity as defined in section 477A.011, subdivision 20, for 206.18 a year, the municipality's total required local contribution for 206.19 that year is limited to two percent of net tax capacity to 206.20 qualify for the exemption under this subdivision. The 206.21 municipality may allocate the contribution among the districts 206.22 on which it has made elections as it determines appropriate. 206.23 (B) If a municipality makes an election under this 206.24 subdivision for a district in a year in which item (A) applies, 206.25 a minimum annual qualifying contribution must be made for the 206.26 district equal to the lesser of 0.25 percent of city net tax 206.27 capacity or three percent of increment revenues. This minimum 206.28 contribution applies for the life of the district for each year 206.29 that the restriction in item (A) applies and is in addition to 206.30 the contribution required by item (A). 206.31 (4) The amount of the local contribution must be made out 206.32 of unrestricted money of the authority or municipality, such as 206.33 the general fund, a property tax levy, or a federal or a state 206.34 grant-in-aid which may be spent for general government 206.35 purposes. The local contribution may not be made, directly or 206.36 indirectly, with tax increments or developer payments as defined 207.1 under section 469.1766. The local contribution must be used to 207.2 pay project costs and cannot be used for general government 207.3 purposes or for improvements or costs that the authority or 207.4 municipality planned to incur absent the project. The authority 207.5 or municipality may request contributions from other local 207.6 government entities that will benefit from the district's 207.7 activities. These contributions reduce the local contribution 207.8 required of the municipality or authority by this paragraph. 207.9 Cities, counties, towns, and schools may contribute to paying 207.10 these costs, notwithstanding any other law to the contrary. 207.11 (5) The municipality may make a local contribution in 207.12 excess of the required contribution for a year. If it does so, 207.13 the municipality may credit the excess to a local contribution 207.14 account for the district. The balance in the account may be 207.15 used to meet the requirements for qualifying local contributions 207.16 for later years. No interest or investment earnings may be 207.17 credited or imputed to the account, except those (A) actually 207.18 paid by the municipality out of its unrestricted funds or by 207.19 another person or entity, other than a developer as used in 207.20 section 469.1766, and (B) used as required for a qualifying 207.21 local contribution. 207.22 (6) If the state contributes to the project costs through a 207.23 direct grant or similar incentive, the required local 207.24 contribution is reduced by one-half of the dollar amount of the 207.25 state grant or other similar incentive. 207.26 Sec. 2. Minnesota Statutes 1998, section 469.176, 207.27 subdivision 4g, is amended to read: 207.28 Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 207.29 revenues shall not be used to circumvent existing levy limit 207.30 law. No revenues derived from tax increment from any district, 207.31 whether certified before or after August 1, 1979, shall be used 207.32 for the acquisition, construction, renovation, operation, or 207.33 maintenance of a building to be used primarily and regularly for 207.34 conducting the business of a municipality, county, school 207.35 district, or any other local unit of government or the state or 207.36 federal government or for a commons area used as a public park, 208.1 or a facility used for social, recreational, or conference 208.2 purposes. This provision shall not prohibit the use of revenues 208.3 derived from tax increments for the construction or renovation 208.4 of a parking structure, a commons area used as a public park, or208.5a facility used for social, recreational, or conference purposes208.6and not primarily for conducting the business of the208.7municipality. 208.8 (b) If any publicly owned facility used for social, 208.9 recreational, or conference purposes and financed in whole or in 208.10 part from revenues derived from a district is operated or 208.11 managed by an entity other than the authority, the operating and 208.12 management policies of the facility must be approved by the 208.13 governing body of the authority. 208.14 (c) Tax increments may not be used to pay for the cost of 208.15 public improvements, equipment, or other items, if: 208.16 (1) the improvements, equipment, or other items are located 208.17 outside of the area of the tax increment financing district from 208.18 which the increments were collected; and 208.19 (2) the improvements, equipment, or items that (i) 208.20 primarily serve a decorative or aesthetic purpose, or (ii) serve 208.21 a functional purpose, but their cost is increased by more than 208.22 100 percent as a result of the selection of materials, design, 208.23 or type as compared with more commonly used materials, designs, 208.24 or types for similar improvements, equipment, or items. 208.25 Sec. 3. Minnesota Statutes 1998, section 469.1763, is 208.26 amended by adding a subdivision to read: 208.27 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 208.28 subdivision applies only to districts for which the request for 208.29 certification was made before June 2, 1997. 208.30 (b) The municipality for the district may transfer 208.31 available increments from another tax increment financing 208.32 district located in the municipality, if the transfer is 208.33 necessary to eliminate a deficit in the district to which the 208.34 increments are transferred. A deficit in the district for 208.35 purposes of this subdivision means the lesser of the following 208.36 two amounts: 209.1 (1)(i) the amount due during the calendar year to pay 209.2 preexisting obligations of the district; minus 209.3 (ii) the total increments to be collected from properties 209.4 located within the district that are available for the calendar 209.5 year, plus 209.6 (iii) total increments from properties located in other 209.7 districts in the municipality that are available to be used to 209.8 meet the district's obligations under this section, excluding 209.9 this subdivision, or other provisions of law (but excluding a 209.10 special tax under section 469.1791 and the grant program under 209.11 Laws 1997, chapter 231, article 1, section 19); or 209.12 (2) the reduction in increments collected from properties 209.13 located in the district for the calendar year as a result of the 209.14 changes in class rates in Laws 1997, chapter 231, article 1; 209.15 Laws 1998, chapter 389, article 2; and article 6 of this act. 209.16 (c) A pre-existing obligation means bonds issued and sold 209.17 before June 2, 1997, to the extent that the bonds are secured by 209.18 a pledge of increments from the tax increment financing district. 209.19 For purposes of this subdivision, bonds exclude an obligation to 209.20 reimburse or pay a developer or owner of property located in the 209.21 district for amounts incurred or paid by the developer or owner. 209.22 (d) The municipality may require a development authority, 209.23 other than a seaway port authority, to transfer available 209.24 increments for any of its tax increment financing districts in 209.25 the municipality to make up an insufficiency in another district 209.26 in the municipality, regardless of whether the district was 209.27 established by the development authority or another development 209.28 authority. This authority applies notwithstanding any law to 209.29 the contrary, but applies only to a development authority that: 209.30 (1) was established by the municipality; or 209.31 (2) the governing body of which is appointed, in whole or 209.32 part, by the municipality or an officer of the municipality or 209.33 which consists, in whole or part, of members of the governing 209.34 body of the municipality. 209.35 (e) The authority under this subdivision to spend tax 209.36 increments outside of the area of the district from which the 210.1 tax increments were collected: 210.2 (1) may only be exercised after obtaining approval of the 210.3 use of the increments, in writing, by the commissioner of 210.4 revenue; 210.5 (2) is an exception to the restrictions under the other 210.6 provisions of this section and the percentage restrictions under 210.7 subdivision 2 must be calculated after deducting increments 210.8 spent under this subdivision from the total increments for the 210.9 district; and 210.10 (3) applies notwithstanding the provisions of the tax 210.11 increment financing act in effect for districts for which the 210.12 request for certification was made before June 30, 1982, or any 210.13 other law to the contrary. 210.14 Sec. 4. [469.1764] [PRE-1982 DISTRICTS; POOLING RULES.] 210.15 Subdivision 1. [SCOPE; APPLICATION.] (a) This section 210.16 applies to a tax increment financing district or area added to a 210.17 district, if the request for certification of the district or 210.18 the area added to the district was made after July 31, 1979, and 210.19 before July 1, 1982. 210.20 (b) This section, section 469.1763, subdivision 6, and any 210.21 special law applying to the district enacted before the 210.22 effective date of this section are the exclusive authority to 210.23 spend tax increments on activities located outside of the 210.24 geographic area of a tax increment financing district that is 210.25 subject to this section. 210.26 (c) This section does not apply to increment from a 210.27 district that is subject to the provisions of this section, if: 210.28 (1) the district was decertified before the enactment of 210.29 this section; and 210.30 (2) all increments spent on activities located outside of 210.31 the geographic area of the district were repaid and distributed 210.32 as excess increments under section 469.176, subdivision 2. 210.33 Subd. 2. [STATE AUDITOR NOTIFICATION.] By August 1, 1999, 210.34 the state auditor shall notify in writing each authority for 210.35 which the auditor has records that the authority has a district 210.36 subject to this section. 211.1 Subd. 3. [RATIFICATION OF PAST SPENDING.] (a) The 211.2 following expenditures of increments on activities located 211.3 outside of the geographic area of a district subject to this 211.4 section are permitted: 211.5 (1) expenditures made before the earlier of (i) 211.6 notification by the state auditor or (ii) December 31, 1999; and 211.7 (2) expenditures to pay pre-existing outside-district 211.8 obligations. 211.9 Subd. 4. [DECERTIFICATION REQUIRED.] (a) The provisions of 211.10 this subdivision apply to any tax increment financing district 211.11 subject to this section, if increments from the district were 211.12 used on activities located outside of the geographic area of the 211.13 district. 211.14 (b) After December 31, 1999, any tax increments received by 211.15 the authority from a district subject to this subdivision may be 211.16 expended only to pay: 211.17 (1) pre-existing in-district obligations; 211.18 (2) pre-existing outside-district obligations; and 211.19 (3) administrative expenses. 211.20 After all pre-existing obligations have been paid or 211.21 defeased, the district must be decertified and any remaining 211.22 increments distributed as excess increments under section 211.23 469.176, subdivision 2. 211.24 Subd. 5. [DEFINITIONS.] (a) "Notification by the state 211.25 auditor" means the receipt by the authority or the municipality 211.26 of a written notification from the state auditor that its 211.27 expenditures of increments from the district on activities 211.28 located outside of the geographic area of the district were not 211.29 in compliance with state law. 211.30 (b) "Pre-existing outside district obligations" mean: 211.31 (1) bonds secured by increments from a district subject to 211.32 this section and used to finance activities outside the 211.33 geographic area of the district, if the bonds were issued and 211.34 the pledge of increment was made before the earlier of (i) 211.35 notification by the state auditor or (ii) April 1, 1999; 211.36 (2) bonds issued to refund bonds qualifying under clause 212.1 (1), if the refunding bonds do not increase the total amount of 212.2 tax increments required to pay the refunded bonds; and 212.3 (3) binding written agreements secured by the increments 212.4 from the district subject to this section and used to finance 212.5 activities outside the geographic area of the district, if the 212.6 agreement was entered before the earlier of (i) notification by 212.7 the state auditor or (ii) May 1, 1999. 212.8 (c) "Pre-existing in-district obligations" mean: 212.9 (1) bonds secured by increments from a district subject to 212.10 this section and not used to finance activities outside of the 212.11 geographic area of the district, if the bonds were issued and 212.12 the pledge of increments was made before April 1, 1999; 212.13 (2) bonds issued to refund bonds qualifying under clause 212.14 (1), if the refunding bonds do not increase the total amount of 212.15 tax increments required to pay the refunded bonds; and 212.16 (3) binding written agreements secured by increments from a 212.17 district subject to this section and not used to finance 212.18 activities outside of the geographic area of the district, if 212.19 the agreements were entered into and the pledge of increments 212.20 was made before May 1, 1999. 212.21 Sec. 5. Minnesota Statutes 1998, section 469.1771, 212.22 subdivision 1, is amended to read: 212.23 Subdivision 1. [ENFORCEMENT.] (a) The owner of taxable 212.24 property located in the city, town, school district, or county 212.25 in which the tax increment financing district is located may 212.26 bring suit for equitable relief or for damages, as provided in 212.27 subdivisions 3 and 4, arising out of a failure of a municipality 212.28 or authority to comply with the provisions of sections 469.174 212.29 to 469.179, or related provisions of this chapter. The 212.30 prevailing party in a suit filed under the preceding sentence is 212.31 entitled to costs, including reasonable attorney fees. 212.32 (b) The state auditor may examine and audit political 212.33 subdivisions' use of tax increment financing. Without previous 212.34 notice, the state auditor may examine or audit accounts and 212.35 records on a random basis as the auditor deems to be in the 212.36 public interest. If the state auditor finds evidence that an 213.1 authority or municipality has violated a provision of the law 213.2 for which a remedy is provided under this section, the state 213.3 auditor shall forward the relevant information to the county 213.4 attorney. The county attorney may bring an action to enforce 213.5 the provisions of sections 469.174 to 469.179 or related 213.6 provisions of this chapter, for matters referred by the state 213.7 auditor or on behalf of the county. If the county attorney 213.8 determines not to bring an action or if the county attorney has 213.9 not brought an action within 12 months after receipt of the 213.10 initial notification by the state auditor of the violation, the 213.11 county attorney shall notify the state auditor in writing. 213.12 (c) If the state auditor finds an authority is not in 213.13 compliance with sections 469.174 to 469.179 or related 213.14 provisions of law, the auditor shall notify the governing body 213.15 of the municipality that approved the tax increment financing 213.16 district of its findings. The governing body of the 213.17 municipality must respond in writing to the state auditor within 213.18 60 days after receiving the notification. Its written response 213.19 must state whether the municipality accepts, in whole or part, 213.20 the auditor's findings. If the municipality does not accept the 213.21 findings, the statement must indicate the basis for its 213.22 disagreement. The state auditor shall annually summarize the 213.23 responses it receives under this section and send the summary 213.24 and copies of the responses to the chairs of the committees of 213.25 the legislature with jurisdiction over tax increment financing. 213.26 (d) The state auditor shall notify the commissioner of 213.27 revenue in writing and provide supporting materials for a 213.28 violation found by the auditor, if the: 213.29 (1) auditor receives notification from the county attorney 213.30 under paragraph (b) or receives no notification for a 12-month 213.31 period after initially notifying the county attorney and the 213.32 state auditor confirms with the county attorney or the 213.33 municipality that no action has been brought regarding the 213.34 matter; and 213.35 (2) municipality or development authority have not 213.36 eliminated or resolved the violation to the satisfaction of the 214.1 state auditor. 214.2 The auditor shall provide the municipality and development 214.3 authority a copy of the notification sent to the commissioner of 214.4 revenue. 214.5 Sec. 6. Minnesota Statutes 1998, section 469.1771, is 214.6 amended by adding a subdivision to read: 214.7 Subd. 2b. [SUSPENSION OF TIF AUTHORITY.] (a) Upon receipt 214.8 of a notification from the state auditor under subdivision 1, 214.9 paragraph (d), the commissioner of revenue shall review the 214.10 materials submitted by the auditor and the municipality and 214.11 development authority. For a period of 30 days after the 214.12 referral of the matter by the state auditor, the municipality or 214.13 development authority may submit materials to the commissioner 214.14 on the matter. If the commissioner finds that the municipality 214.15 or development authority violated a provision of the law 214.16 enumerated in subdivision 1 and that the violation was 214.17 substantial, the commissioner shall suspend the authority of the 214.18 municipality and development authority to exercise tax increment 214.19 financing powers. The commissioner shall set the period of the 214.20 suspension relative to the substantiality of the violation. The 214.21 period of suspension may not exceed five years. 214.22 (b) For purposes of this subdivision, the exercise of tax 214.23 increment financing powers means: 214.24 (1) the authority to request certification of a new tax 214.25 increment financing district or the addition of area to an 214.26 existing tax increment financing district; 214.27 (2) the authority to issue bonds under section 469.178; 214.28 (3) the authority to amend a tax increment financing plan 214.29 to authorize new activities or expenditures. 214.30 (c) If an order is issued under this subdivision and no 214.31 action has been filed under subdivision 1 before the effective 214.32 date of the order, no action may be brought under subdivision 1 214.33 for the violation that is the subject of the order. 214.34 Sec. 7. Minnesota Statutes 1998, section 469.1791, 214.35 subdivision 3, is amended to read: 214.36 Subd. 3. [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city 215.1 may establish a special taxing district within a tax increment 215.2 financing district under this section only if the conditions 215.3 under paragraphs (b) and (c) are met or if the city elects to 215.4 exercise the authority under paragraph (d). 215.5 (b) The city has determined that: 215.6 (1) total tax increments from the district, including 215.7 unspent increments from previous years and increments 215.8 transferred under paragraph (c), will be insufficient to pay the 215.9 amounts due in a year on preexisting obligations; and 215.10 (2) this insufficiency of increments resulted from the 215.11 reduction in property tax class rates enacted in the 1997 and 215.12 1998 legislative sessions. 215.13 (c) The city has agreed to transfer any available 215.14 increments from other tax increment financing districts in the 215.15 city to pay the preexisting obligations of the district under 215.16 section 469.1763, subdivision 6. This requirement does not 215.17 apply to any available increments of a qualified housing 215.18 district, as defined in section 273.1399, subdivision 215.19 1.Notwithstanding any law to the contrary, the city may215.20require a development authority to transfer available increments215.21for any of its tax increment financing districts in the city to215.22make up an insufficiency in another district in the city,215.23regardless of whether the district was established by the215.24development authority or another development authority.215.25Notwithstanding any law to the contrary, increments transferred215.26under this authority must be spent to pay preexisting215.27obligations. "Development authority" for this purpose means any215.28authority as defined in section 469.174, subdivision 2.215.29 (d) If a tax increment financing district does not qualify 215.30 under paragraphs (b) and (c), the governing body may elect to 215.31 establish a special taxing district under this section. If the 215.32 city elects to exercise this authority, increments from the tax 215.33 increment financing district and the proceeds of the tax imposed 215.34 under this section may only be used to pay preexisting 215.35 obligations and reasonable administrative expenses of the 215.36 authority for the tax increment financing district. The tax 216.1 increment financing district must be decertified when all 216.2 preexisting obligations have been paid. 216.3 Sec. 8. Minnesota Statutes 1998, section 469.1813, 216.4 subdivision 1, is amended to read: 216.5 Subdivision 1. [AUTHORITY.] The governing body of a 216.6 political subdivision may grant an abatement of the taxes 216.7 imposed by the political subdivision on a parcel of property, if: 216.8 (a) it expects the benefits to the political subdivision of 216.9 the proposed abatement agreement to at least equal the costs to 216.10 the political subdivision of the proposed agreement; and 216.11 (b) it finds that doing so is in the public interest 216.12 because it will: 216.13 (1) increase or preserve tax base; 216.14 (2) provide employment opportunities in the political 216.15 subdivision; 216.16 (3) provide or help acquire or construct public facilities; 216.17 (4) help redevelop or renew blighted areas;or216.18 (5) help provide access to services for residents of the 216.19 political subdivision; or 216.20 (6) finance or provide public infrastructure. 216.21 Sec. 9. Minnesota Statutes 1998, section 469.1813, 216.22 subdivision 2, is amended to read: 216.23 Subd. 2. [ABATEMENT RESOLUTION.] The governing body of a 216.24 political subdivision may grant an abatement only by adopting an 216.25 abatement resolution, specifying the terms of the abatement. In 216.26 the case of a town, the board of supervisors may approve the 216.27 abatement resolution. The resolution must also include a 216.28 specific statement as to the nature and extent of the public 216.29 benefits which the governing body expects to result from the 216.30 agreement. The resolution may provide that the political 216.31 subdivision will retain or transfer to another political 216.32 subdivision the abatement to pay for all or part of the cost of 216.33 acquisition or improvement of public infrastructure, whether or 216.34 not located on or adjacent to the parcel for which the tax is 216.35 abated. The abatement may reduce all or part of the property 216.36 taxlevied byamount for the political subdivision on the 217.1 parcel. A political subdivision's maximum annual amount for a 217.2 parcel equals its total local tax rate multiplied by the total 217.3 net tax capacity of the parcel. The political subdivision may 217.4 limit the abatement: 217.5 (1) to a specific dollar amount per year or in total; 217.6 (2) to the increase in property taxes resulting from 217.7 improvement of the property; 217.8 (3) to the increases in property taxes resulting from 217.9 increases in the market value or tax capacity of the property; 217.10 or 217.11 (4) in any other manner the governing body of the 217.12 subdivision determines is appropriate. 217.13 The political subdivision may not abate tax attributable tothe217.14value of the land orthe areawide tax under chapter 276A or 217.15 473F, except as provided in this subdivision. 217.16 Sec. 10. Minnesota Statutes 1998, section 469.1813, 217.17 subdivision 3, is amended to read: 217.18 Subd. 3. [SCHOOL DISTRICTABATEMENT PROCEDUREABATEMENTS.] 217.19Notwithstanding the amounts in subdivision 2, a school district217.20that grants an abatement under this section must limit the217.21abatement for any property to not more than an amount equal to217.22the product of: (1) the property's net tax capacity, and (2)217.23the difference between the district's total tax rate for that217.24year and one-half of the general education tax rate for that217.25year.An abatement granted under this section is not an 217.26 abatement for purposes of state aid or local levy under sections 217.27 127A.40 to 127A.51. 217.28 Sec. 11. Minnesota Statutes 1998, section 469.1813, 217.29 subdivision 6, is amended to read: 217.30 Subd. 6. [DURATION LIMIT.](a)A political subdivision 217.31other than a school districtmay grant an abatement for a period 217.32 no longer than ten years. The subdivision may specify in the 217.33 abatement resolution a shorter duration. If the resolution does 217.34 not specify a period of time, the abatement is for eight years. 217.35 If an abatement has been granted to a parcel of property and the 217.36 period of the abatement has expired, the political subdivision 218.1 that granted the abatement may not grant another abatement for 218.2 eight years after the expiration of the first abatement. This 218.3 prohibition does not apply to improvements added after and not 218.4 subject to the first abatement. 218.5(b) A school district may grant an abatement for only one218.6year at a time. Once a school district has authorized an218.7abatement for a property, it may reauthorize the abatement in218.8any subsequent year for the next seven years, or nine years if218.9provided in the original abatement agreement. This prohibition218.10does not apply to improvements added after and not subject to218.11the original abatement agreement.218.12 Sec. 12. Minnesota Statutes 1998, section 469.1813, is 218.13 amended by adding a subdivision to read: 218.14 Subd. 9. [CONSENT OF PROPERTY OWNER NOT REQUIRED.] A 218.15 political subdivision may abate the taxes on a parcel under 218.16 sections 469.1812 to 469.1815 without obtaining the consent of 218.17 the property owner. 218.18 Sec. 13. Minnesota Statutes 1998, section 469.1815, 218.19 subdivision 2, is amended to read: 218.20 Subd. 2. [PROPERTY TAXES; ABATEMENT PAYMENT.] The total 218.21 property taxes shall be levied on the property and shall be due 218.22 and payable to the county at the times provided under section 218.23 279.01. The political subdivision will pay the abatement to the 218.24 property owner, lessee, or a representative of the 218.25 bondholders or will retain the abatement to pay public 218.26 infrastructure costs, as provided by the abatement resolution. 218.27 Sec. 14. Laws 1997, chapter 231, article 1, section 19, 218.28 subdivision 1, is amended to read: 218.29 Subdivision 1. [TIF GRANTS.] (a) The commissioner of 218.30 revenue shall pay grants to municipalities for deficits in tax 218.31 increment financing districts caused by the changes in class 218.32 rates under this act. Municipalities must submit applications 218.33 for the grants in a form prescribed by the commissioner by no 218.34 later thanMarchAugust 1 for grants payable during the calendar 218.35 year. The maximum grant equals the lesser of: 218.36 (1) for taxes payable in the year before the grant is paid, 219.1 the reduction in the tax increment financing district's revenues 219.2 derived from increment resulting from the class rate changes in 219.3 this article, Laws 1998, chapter 389, article 2, and those 219.4 enacted in the 1999 regular legislative session; or 219.5 (2) the municipality's total tax increments, including 219.6 unspent increments from previous years, less the amount due 219.7 during the calendar year to pay (i) bonds issued and sold before 219.8 the day following final enactment of this act and (ii) binding 219.9 contracts entered into before the day following final enactment 219.10 of this act. 219.11 (b) The commissioner of revenue may require applicants for 219.12 grantsor pooling authorityunder this section to provide any 219.13 information the commissioner deems appropriate. The 219.14 commissioner shall calculate the amount under paragraph (a), 219.15 clause (2), based on the reports for the tax increment financing 219.16 district or districts filed with the state auditor on or before 219.17JulyAugust 1 of the year before the year in which the grant is 219.18 to be paid. 219.19 (c) This subdivision applies only to deficits in tax 219.20 increment financing districts for which: 219.21 (1) the request for certification was made before the 219.22 enactment date of this act; and 219.23 (2) all timely reports have been filed with the state 219.24 auditor, as required by Minnesota Statutes, section 469.175. 219.25 (d) The commissioner shall pay the grants under this 219.26 subdivision by December 26 of the year. 219.27 (e) $2,000,000 is appropriated to the commissioner of 219.28 revenue to make grants under this section. This appropriation 219.29 is available until expended or this section expires under 219.30 subdivision 3, whichever is earlier. If the amount of grant 219.31 entitlements for a year exceed the appropriation, the 219.32 commissioner shall reduce each grant proportionately so the 219.33 total equals the amount available. 219.34 Sec. 15. Laws 1997, chapter 231, article 1, section 19, 219.35 subdivision 3, is amended to read: 219.36 Subd. 3. [EXPIRATION.] This section expires on January 1, 220.120012002. 220.2 Sec. 16. [CITY OF ONAMIA; USE OF TAX INCREMENT FINANCING.] 220.3 Subdivision 1. [APPLICATION OF TIME LIMIT.] For tax 220.4 increment financing district no. 1-1, established April 14, 220.5 1993, by the city of Onamia, Minnesota Statutes, section 220.6 469.1763, subdivision 3, applies to the district by permitting a 220.7 period ending three years after the enactment of this section. 220.8 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 220.9 approval by the governing body of the city of Onamia and 220.10 compliance with Minnesota Statutes, section 645.021, subdivision 220.11 3. 220.12 Sec. 17. [ST. CLOUD HOUSING AND REDEVELOPMENT AUTHORITY.] 220.13 Subdivision 1. [TAX INCREMENT POOLING.] Notwithstanding 220.14 the provisions of Minnesota Statutes, section 469.1763, 220.15 subdivision 2, and the provisions of the tax increment financing 220.16 act in effect for districts established by the St. Cloud housing 220.17 and redevelopment authority for which the request for 220.18 certification was made after August 1, 1979, and before June 30, 220.19 1982, revenue derived from tax increments paid by properties in 220.20 the districts may be expended through a development fund or 220.21 otherwise within other tax increment districts established by 220.22 the authority to finance the redevelopment of commercial 220.23 properties outside of tax increment financing districts which 220.24 were destroyed or impacted in a natural gas explosion on 220.25 December 11, 1998. 220.26 Subd. 2. [EFFECTIVE DATE.] This section is effective the 220.27 day after compliance with Minnesota Statutes, section 645.021, 220.28 subdivision 3. 220.29 Sec. 18. [CITY OF ST. PAUL.] 220.30 Subdivision 1. [DELAY OF DEEMED COMMENCEMENT OF TAX 220.31 INCREMENT FINANCING DISTRICT.] Notwithstanding Minnesota 220.32 Statutes, section 469.176, or any other law to the contrary, the 220.33 duration limit of the Williams Hill tax increment district in 220.34 the city of St. Paul is determined as if the date of receipt of 220.35 the first tax increment by the authority occurs when the 220.36 aggregate of all tax increments received from the district 221.1 reaches $2,000. In no case may the duration limit of the 221.2 district be extended by more than two years. 221.3 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 221.4 approval by and compliance with Minnesota Statutes, sections 221.5 469.1782, subdivision 2, and 645.021, subdivision 3, by the 221.6 governing body of the city of St. Paul. 221.7 Sec. 19. [CITY OF JACKSON; TAX INCREMENT FINANCING 221.8 DISTRICT.] 221.9 Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding 221.10 the provisions of Minnesota Statutes, section 469.176, 221.11 subdivision 1c, full tax increments from U.S. 71/I-90 tax 221.12 increment financing district in the city of Jackson must be paid 221.13 to and may be retained by the city of Jackson through taxes 221.14 payable in 2002. The amount to be retained by the city is 221.15 limited to $170,000. Any increments received during the 221.16 extension in excess of $170,000 must be returned as excess 221.17 increments under Minnesota Statutes, section 469.176, 221.18 subdivision 2. 221.19 Subd. 2. [EFFECTIVE DATE.] This section is effective the 221.20 day after compliance with Minnesota Statutes, sections 469.1782, 221.21 subdivision 2, and 645.021, subdivision 3. 221.22 Sec. 20. [CITY OF MINNEOTA; TAX INCREMENT FINANCING.] 221.23 Subdivision 1. [ACTIONS RATIFIED.] The expenditure of tax 221.24 increments on administrative expenses and public utility or 221.25 other improvements by the city of Minneota for its tax increment 221.26 financing district, adopted by city resolution 4-15-85A, are 221.27 ratified and deemed to be authorized by the tax increment 221.28 financing plan for the district. 221.29 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 221.30 compliance by the governing body of the city of Minneota with 221.31 Minnesota Statutes, section 645.021, subdivision 3. 221.32 Sec. 21. [STEARNS COUNTY; TAX INCREMENT FINANCING.] 221.33 Subdivision 1. [RATIFICATION OF HOUSING AND REDEVELOPMENT 221.34 AUTHORITY TAX INCREMENT FINANCING ACTIONS.] Except as provided 221.35 in subdivision 2, all tax increments from tax increment 221.36 financing districts numbers 15, 22, 58, and 68 established by 222.1 the Stearns county housing and redevelopment authority expended 222.2 before April 1, 1997, on any activity or program provided for in 222.3 the tax increment financing plans, as amended through April 24, 222.4 1998, are ratified and approved and are conclusively deemed to 222.5 be spent in compliance with applicable law. Any funds remaining 222.6 in tax increment financing districts numbers 15 and 22 must be 222.7 distributed as excess increments under Minnesota Statutes, 222.8 section 469.176, subdivision 2. This section does not ratify 222.9 expenditures of tax increments where the authority has returned 222.10 the tax increments as excess increments before the enactment 222.11 date of this section. 222.12 Subd. 2. [CONDITIONS.] The ratification under subdivision 222.13 1 is valid only if: 222.14 (1) the Stearns county housing and redevelopment authority 222.15 decertifies tax increment financing districts numbers 58 and 68 222.16 as soon as all costs authorized by the tax increment financing 222.17 plans are paid; 222.18 (2) any payments to the Stearns county housing and 222.19 redevelopment authority associated with litigation, court 222.20 action, or other settlement action relating to tax increment 222.21 financing districts numbers 15, 22, 58, and 68, less any related 222.22 legal fees and expenses, must be distributed as excess 222.23 increments under Minnesota Statutes, section 469.176, 222.24 subdivision 2; and 222.25 (3) the Stearns county housing and redevelopment authority 222.26 repays the amount of all undocumented administrative expenses 222.27 for the districts and these amounts are redistributed as excess 222.28 increments under Minnesota Statutes, section 469.176, 222.29 subdivision 2. 222.30 Subd. 3. [EFFECTIVE DATE.] This section is effective upon 222.31 compliance by the governing body of Stearns county with 222.32 Minnesota Statutes, section 645.021, subdivision 3. 222.33 Sec. 22. [CITY OF FRIDLEY, TAX INCREMENT FINANCING 222.34 DISTRICT.] 222.35 Subdivision 1. [EXTENSION OF TIME.] (a) Notwithstanding 222.36 the provisions of Minnesota Statutes, section 469.176, 223.1 subdivision 1b, upon approval of the governing body of the city 223.2 of Fridley, the Fridley housing and redevelopment authority may, 223.3 by resolution, extend the duration of tax increment financing 223.4 district no. 6 located in the city of Fridley. The housing and 223.5 redevelopment authority may not extend the duration beyond 223.6 December 31, 2020. 223.7 (b) The provisions of Minnesota Statutes, sections 223.8 273.1399, subdivision 8, and 469.1782, subdivision 1, apply to 223.9 this district if extended, except that the maximum state aid 223.10 reduction for a year may not exceed the least of the following 223.11 amounts: 223.12 (1) the amount under Minnesota Statutes, section 469.1782, 223.13 subdivision 1; or 223.14 (2) $200,000, plus one-half of (the amount under Minnesota 223.15 Statutes, section 469.1782, subdivision 1, minus $200,000); or 223.16 (3) 2.5 percent of the net tax capacity of the city. 223.17 (c) Notwithstanding any law to the contrary, effective upon 223.18 approval of this section, no increments may be spent on 223.19 activities located outside of the area of the district, other 223.20 than for administrative expenses. 223.21 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 223.22 compliance with the requirements of Minnesota Statutes, sections 223.23 469.1782, subdivision 2, and 645.021. 223.24 Sec. 23. [CITY OF CHANHASSEN; TAX INCREMENT DISTRICT.] 223.25 Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding 223.26 the provisions of Minnesota Statutes, section 469.176, 223.27 subdivision 1c, full tax increments from the city of 223.28 Chanhassen's Downtown Redevelopment Tax Increment Financing 223.29 District Number 1 must be paid to and may be retained by the 223.30 city of Chanhassen for property taxes payable in 2001, 2002, and 223.31 2003. 223.32 (b) Increments permitted to be paid to and retained by the 223.33 city under paragraph (a) may only be used to pay or defease 223.34 bonds issued or other obligations incurred prior to September 2, 223.35 1998, the proceeds of which were used to fund public 223.36 redevelopment costs within the redevelopment project or bonds 224.1 issued to refund the bonds. 224.2 (c) The maximum amount of increments allowed to be retained 224.3 under this section is limited to the amount that would qualify 224.4 for a grant under Laws 1997, chapter 231, article 1, section 19, 224.5 as amended. 224.6 Subd. 2. [EFFECTIVE DATE.] This section is effective the 224.7 day after compliance with Minnesota Statutes, sections 469.1782, 224.8 subdivision 2, and 645.021, subdivision 3. 224.9 Sec. 24. [APPROPRIATION; TIF GRANTS.] 224.10 $1,000,000 is appropriated to the commissioner of revenue 224.11 for purposes of grants under Laws 1997, chapter 231, article 1, 224.12 section 19, to municipalities to offset deficits in tax 224.13 increment financing districts. 224.14 Sec. 25. [REPEALER.] 224.15 Laws 1997, chapter 231, article 1, section 19, subdivision 224.16 2, is repealed. 224.17 Sec. 26. [EFFECTIVE DATE.] 224.18 Section 1 is effective for requests for certification of a 224.19 new district or for the addition of geographic area to a 224.20 district made after June 30, 1999. 224.21 Section 2 is effective for all tax increment financing 224.22 districts, regardless of when the request for certification was 224.23 made, but does not apply to (1) expenditures made before January 224.24 1, 2000; (2) expenditures made under a binding contract entered 224.25 before January 1, 2000; or (3) expenditures made under a binding 224.26 contract entered pursuant to a letter of intent with the 224.27 developer or contractor entered before January 1, 2000. 224.28 Section 3 is effective for all districts for which the 224.29 request for certification was made before June 2, 1997. 224.30 Section 4 is effective the day following final enactment 224.31 and applies to districts for which the request for certification 224.32 was made after July 31, 1979, and before July 1, 1982. 224.33 Sections 5 and 6 apply to all districts for which the 224.34 request for certification was made after August 1, 1979, but is 224.35 limited to findings of violations made by the state auditor 224.36 after December 31, 1999. 225.1 Sections 7 to 15, and 25 are effective the day following 225.2 final enactment. 225.3 ARTICLE 11 225.4 TAX FORFEITURE AND DELINQUENCY PROCEDURES 225.5 Section 1. Minnesota Statutes 1998, section 92.51, is 225.6 amended to read: 225.7 92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.] 225.8 State lands sold by the director become taxable. A 225.9 description of the tract sold, with the name of the purchaser, 225.10 must be transmitted to the proper county auditor. The auditor 225.11 must extend the land for taxation like other land. Only the 225.12 interest in the land vested by the land sale certificate in its 225.13 holder may be sold for delinquent taxes.Upon production to the225.14county treasurer of the tax certificate given upon tax sale, in225.15case the lands have not been redeemed, the tax purchaser has the225.16right to pay the principal and interest then in default upon the225.17land sale certificate as its assignee. To redeem from a tax225.18sale, the person redeeming must pay the county treasurer, for225.19the holder and owner of the tax sale certificate, in addition to225.20all sums required to be paid in other cases, all amounts paid by225.21the holder and owner for interest and principal upon the land225.22sale certificate, with interest at 12 percent per year. When225.23the director receives the tax certificate with the county225.24auditor's certificate of the expiration of the time for225.25redemption, and the county treasurer's receipt for all225.26delinquent interest and penalty on the land sale certificate,225.27the director shall issue the holder and owner of the tax225.28certificate a special certificate with the same terms and the225.29same effect as the original land sale certificate.225.30 Sec. 2. Minnesota Statutes 1998, section 279.37, 225.31 subdivision 1, is amended to read: 225.32 Subdivision 1. [COMPOSITION INTO ONE ITEM.] Delinquent 225.33 taxes upon any parcel of real estate may be composed into one 225.34 item or amount by confession of judgment at any time prior to 225.35 the forfeiture of the parcel of land to the state for taxes, for 225.36 the aggregate amount of all the taxes, costs, penalties, and 226.1 interest accrued against the parcel, ashereinafterprovided in 226.2 this section. Taxes upon property which, for the previous 226.3 year's assessment, was classified as mineral property, 226.4 employment property, or commercial or industrial propertyshall226.5 are onlybeeligible to be composed into any confession of 226.6 judgment under this section as provided in subdivision 226.7 1a. Delinquent taxes for property which has been reclassified 226.8 from 4bb to 4b under section 273.1319 are not eligible to be 226.9 composed into any confession of judgment pursuant to this 226.10 subdivision. Delinquent taxes on unimproved land are eligible 226.11 to be composed into a confession of judgment only if the land is 226.12 classified as homestead, agricultural, or timberland in the 226.13 previous year or is eligible for installment payment under 226.14 subdivision 1a. The entire parcel is eligible for the ten-year 226.15 installment plan as provided in subdivision 2 if 25 percent or 226.16 more of the market value of the parcel is eligible for 226.17 confession of judgment under this subdivision. 226.18 Sec. 3. Minnesota Statutes 1998, section 279.37, 226.19 subdivision 1a, is amended to read: 226.20 Subd. 1a. [CLASS 3A PROPERTY.] (a) The delinquent taxes 226.21 upon a parcel of property which was classified class 3a, for the 226.22 previous year's assessment and had a total market value ofless226.23than$200,000 or less for that same assessment shall be eligible 226.24 to be composed into a confession of judgment. Property 226.25 qualifying under this subdivision shall be subject to the same 226.26 provisions as provided in this section except ashereinprovided 226.27 in paragraphs (b) to (d). 226.28(a)(b) Current year taxes and penalty due at the time the 226.29 confession of judgment is entered must be paid. 226.30 (c) The down paymentshallmust include all special 226.31 assessments due in the current tax year, all delinquent special 226.32 assessments, and 20 percent of the ad valorem tax, penalties, 226.33 and interest accrued against the parcel. The balance 226.34 remainingshall beis payable in four equal annual installments; 226.35 and 226.36(b)(d) The amounts entered in judgmentshallbear interest 227.1 at the rate provided in section 279.03, subdivision 1a, 227.2 commencing with the date the judgment is entered. The interest 227.3 rate is subject to change each year on the unpaid balance in the 227.4 manner provided in section 279.03, subdivision 1a. 227.5 Sec. 4. Minnesota Statutes 1998, section 279.37, 227.6 subdivision 2, is amended to read: 227.7 Subd. 2. [INSTALLMENT PAYMENTS.] The owner of any such 227.8 parcel, or any person to whom the right to pay taxes has been 227.9 given by statute, mortgage, or other agreement, may make and 227.10 file with the county auditor of the countywhereinin which the 227.11 parcel is located a written offer to pay the current taxes each 227.12 year before they become delinquent, or to contest the taxes 227.13 under Minnesota Statutes 1941, sections 278.01 to 278.13, and 227.14 agree to confess judgment for the amounthereinbeforeprovided, 227.15 as determined by the county auditor, and shall thereby waive. 227.16 By filing the offer, the owner waives all irregularities in 227.17 connection with the tax proceedings affecting the parcel and any 227.18 defense or objection which the owner may have to the 227.19 proceedings, andshall thereby waivealso waives the 227.20 requirements of any notice of default in the payment of any 227.21 installment or interest to become due pursuant to the composite 227.22 judgment to be so entered, and shall tender therewith. With the 227.23 offer, the owner shall tender one-tenth of the amount of the 227.24 delinquent taxes, costs, penalty, and interest, and shall tender 227.25 all current year taxes and penalty due at the time the 227.26 confession of judgment is entered. In the offer, the owner 227.27 shall agreethereinto pay the balance in nine equal 227.28 installments, with interest as provided in section 279.03, 227.29 payable annually on installments remaining unpaid from time to 227.30 time, on or before December 31 of each year following the year 227.31 in which judgment was confessed, which. The offershallmust be 227.32 substantially as follows: 227.33 "To the court administrator of the district court of 227.34 ........... county, I, ....................., am the owner of 227.35 the following described parcel of real estatesituatelocated in 227.36 .................... county, Minnesota, to-wit: 228.1 .............................. Uponwhichthat real estate there 228.2 are delinquent taxes for the year ........., and prior years, as 228.3 follows: (here insert year of delinquency and the total amount 228.4 of delinquent taxes, costs, interest, and penalty)do hereby. 228.5 By signing this document I offer to confess judgment in the sum 228.6 of $...... andherebywaive all irregularities in the tax 228.7 proceedings affectingsuchthese taxes and any defense or 228.8 objection which I may havetheretoto them, and direct judgment 228.9 to be entered for theamount hereby confessedamount stated 228.10 above,lessminus the sum of $............,hereby tenderedto 228.11 be paid with this document,beingwhich is one-tenth of the 228.12 amount ofsaidthe taxes, costs, penalty, and interest;stated 228.13 above. I agree to pay the balance ofsaidthe judgment in nine 228.14 equal, annual installments, with interest as provided in section 228.15 279.03, payable annually, on the installments remaining 228.16 unpaidfrom time to time, said. I agree to pay the installments 228.17 and interestto be paidon or before December 31 of each year 228.18 following the year in which this judgment is confessed and 228.19 current taxes each year before they become delinquent, or within 228.20 30 days after the entry of final judgment in proceedings to 228.21 contestsuchthe taxes under Minnesota Statutes1941, sections 228.22 278.01 to 278.13. 228.23 Datedthis.............., ......." 228.24 Sec. 5. Minnesota Statutes 1998, section 281.23, 228.25 subdivision 2, is amended to read: 228.26 Subd. 2. [MAY COVER PARCELS BID IN AT SAME TAX SALEFORM.] 228.27All parcels of land bid in at the same tax judgment sale and228.28having the same period of redemption shall be covered by a228.29single posted notice, but a separate notice may be posted for228.30any parcel which may be omitted. SuchThe notice of expiration 228.31 of redemption must contain the tax parcel identification numbers 228.32 and legal descriptions of parcels subject to notice of 228.33 expiration of redemption provisions prescribed under subdivision 228.34 1. The notice must also indicate the names of taxpayers and fee 228.35 owners of record in the office of the county auditor at the time 228.36 the notice is prepared and names of those parties who have filed 229.1 their addresses according to section 276.041 and the amount of 229.2 payment necessary to redeem as of the date of the notice. At 229.3 the option of the county auditor, the current filed addresses of 229.4 affected persons may be included on the notice. The notice 229.5shall beis sufficient if substantially in the following form: 229.6 "NOTICE OF EXPIRATION OF REDEMPTION 229.7 Office of the County Auditor 229.8 County of ......................., State of Minnesota. 229.9 To all personsinterestedhaving an interest inthelands 229.10hereinafterdescribed in this notice: 229.11 You areherebynotified that the parcels of land 229.12hereinafterdescribed, situatedin this notice and located in 229.13 the county of ................................, state of 229.14 Minnesota,were bid in for the state on the229.15......................... day of .......................,229.16......., at the tax judgment sale of land for delinquent taxes229.17for the year .......; that the legal descriptions and tax parcel229.18identification numbers of such parcels and names of the229.19taxpayers and fee owners and in addition those parties who have229.20filed their addresses pursuant to section 276.041, and the229.21amount necessary to redeem as of the date hereof and, at the229.22election of the county auditor, the current filed addresses of229.23any such persons, are as follows:are subject to forfeiture to 229.24 the state of Minnesota because of nonpayment of delinquent 229.25 property taxes, special assessments, and/or penalty, interest, 229.26 and costs levied on those parcels. The time for redemption from 229.27 forfeiture expires if a redemption is not made by the later of 229.28 (1) 60 days after service of this notice on all persons having 229.29 an interest in the lands of record at the office of the county 229.30 recorder or registrar of titles, or (2) by the second Monday in 229.31 May. The redemption must be made in my office. 229.32 Names (and 229.33 Current Filed 229.34 Addresses) for 229.35 the Taxpayers 229.36 and Fee Owners 230.1 andin Addition230.2 Those Parties 230.3 Who Have Filed Amount 230.4 Their Addresses Tax Necessary to 230.5 Pursuant to Legal Parcel Redeem as of 230.6 section 276.041 Description Number DateHereof230.7 of Notice 230.8 ................ ........... ...... ............ 230.9 ................ ........... ...... ............ 230.10That the time for redemption of such lands from such sale230.11will expire 60 days after service of notice and the filing of230.12proof thereof in my office, as provided by law. The redemption230.13must be made in my office.230.14 FAILURE TO REDEEMSUCHTHE LANDS PRIOR TO THE EXPIRATION 230.15 OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 230.16 FORFEITUREOF SAID LANDTO THE STATE OF MINNESOTA. 230.17 Inquiries as tothethese proceedingsset forth abovecan 230.18 be made to the County Auditor forthe............... Countyof230.19..............., whose address is set forth below. 230.20 Witness my hand and official seal this 230.21 ............................ day of ................, ....... 230.22 ......................... 230.23 County Auditor 230.24 (OFFICIAL SEAL) 230.25 ......................... 230.26 (Address) 230.27 ......................... 230.28 (Telephone)." 230.29SuchThe noticeshallmust be posted by the auditor in the 230.30 auditor's office, subject to public inspection, andshallmust 230.31 remain so posted until at least one week after the date of the 230.32 last publication of notice, ashereinafterprovided in this 230.33 section. Proof ofsuchpostingshallmust be made by the 230.34 certificate of the auditor, filed in the auditor's office. 230.35 Sec. 6. Minnesota Statutes 1998, section 281.23, 230.36 subdivision 4, is amended to read: 231.1 Subd. 4. [PROOF OF PUBLICATION.] An affidavit establishing 231.2 proof of publication ofsuchthe notice affidavit, as provided 231.3 by law,shallmust be filed in the office of the county 231.4 auditor. A single published noticeshall be sufficient for all231.5 may include parcels of land bid in atthe samedifferent tax 231.6 judgmentsalesales,having the same periodbut included parcels 231.7 must have a common year for expiration of redemption, and231.8covered by a notice or notices kept posted during the time of231.9the publication, as hereinbefore provided. 231.10 Sec. 7. Minnesota Statutes 1998, section 281.23, 231.11 subdivision 6, is amended to read: 231.12 Subd. 6. [SERVICE OF NOTICE.] (a)ForthwithImmediately 231.13 after the commencement ofsuchpublication or mailing the county 231.14 auditor shall deliver to the sheriff of the county or any other 231.15 person not less than 18 years of age a sufficient number of 231.16 copies ofsuchthe notice of expiration of redemption for 231.17 serviceuponon the persons in possession of all parcels of such 231.18 landas areactually occupied, and documentation if the 231.19 certified mail notice was returned as undeliverable or the 231.20 notice was not mailed to the address associated with the 231.21 property. Within 30 days after receiptthereofof the notice, 231.22 the sheriff or other person serving the notice shallmake such231.23investigationinvestigate asmay benecessary to ascertain 231.24 whether or not the parcels covered bysuchthe notice are 231.25 actually occupied parcels, and shall serve a copy ofsuchthe 231.26 notice of expiration of redemption upon the person in possession 231.27 of each parcel found to be an occupied parcel, in the manner 231.28 prescribed for serving summons in a civil action. If the 231.29 sheriff or another person serving the notice has made at least 231.30 two attempts to serve the notice of expiration of redemption, 231.31 one between the weekday hours of 8:00 a.m. and 5:00 p.m. and the 231.32 other on a different day and different time period, the sheriff 231.33 or another person serving the notice may accomplish this service 231.34 by posting a copy of the notice of expiration of redemption on a 231.35 conspicuous location on the parcel. The sheriff or other person 231.36 serving the notice shall make prompt return to the auditor as to 232.1 all notices so served and as to all parcels found vacant and 232.2 unoccupied and parcels served by posting.SuchThe returnshall232.3 must be madeuponon a copy ofsuchthe notice andshall be232.4 is prima facie evidence of the factsthereinstated in it. 232.5 If the notice is served by the sheriff, the sheriff shall 232.6 receive from the county, in addition to other compensation 232.7 prescribed by law,suchfees and mileage for service on persons 232.8 in possession asareprescribed by law for such service in other 232.9 cases, and shall also receivesuchcompensation for making 232.10 investigation and return as to vacant and unoccupied lands as 232.11 the county board may fix, subject to appeal to the district 232.12 court as in case of other claims against the county. As to 232.13 either service upon persons in possession or return as to vacant 232.14 lands, the sheriff shall charge mileage only for one trip if the 232.15 occupants of more than two tracts are served simultaneously, and 232.16 in such case mileageshallmust be prorated and charged 232.17 equitably against all such owners. 232.18 (b) The secretary of state shall receive sheriff's service 232.19 for all out-of-state interests. 232.20 Sec. 8. Minnesota Statutes 1998, section 282.01, 232.21 subdivision 1, is amended to read: 232.22 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 232.23 NONCONSERVATION.] It is the general policy of this state to 232.24 encourage the best use of tax-forfeited lands, recognizing that 232.25 some lands in public ownership should be retained and managed 232.26 for public benefits while other lands should be returned to 232.27 private ownership. Parcels of land becoming the property of the 232.28 state in trust under law declaring the forfeiture of lands to 232.29 the state for taxesshallmust be classified by the county board 232.30 of the county in which the parcels lie as conservation or 232.31 nonconservation. In making the classification the board shall 232.32 consider the present use of adjacent lands, the productivity of 232.33 the soil, the character of forest or other growth, accessibility 232.34 of lands to established roads, schools, and other public 232.35 services, their peculiar suitability or desirability for 232.36 particular uses and the suitability of the forest resources on 233.1 the land for multiple use, sustained yield management. The 233.2 classification, furthermore, must encourage and foster a mode of 233.3 land utilization that will facilitate the economical and 233.4 adequate provision of transportation, roads, water supply, 233.5 drainage, sanitation, education, and recreation; facilitate 233.6 reduction of governmental expenditures; conserve and develop the 233.7 natural resources; and foster and develop agriculture and other 233.8 industries in the districts and places best suited to them. 233.9 In making the classification the county board may use 233.10 information made available by any office or department of the 233.11 federal, state, or local governments, or by any other person or 233.12 agency possessing pertinent information at the time the 233.13 classification is made. The lands may be reclassified from time 233.14 to time as the county boardmay considerconsiders necessary or 233.15 desirable, except for conservation lands held by the state free 233.16 from any trust in favor of any taxing district. 233.17 If the lands are located within the boundaries of an 233.18 organized town, with taxable valuation in excess of $20,000, or 233.19 incorporated municipality, the classification or 233.20 reclassification and sale must first be approved by the town 233.21 board of the town or the governing body of the municipality in 233.22 which the lands are located. The town board of the town or the 233.23 governing body of the municipality is considered to have 233.24 approved the classification or reclassification and sale if the 233.25 county board is not notified of the disapproval of the 233.26 classification or reclassification and sale within9060 days of 233.27 the date the request for approval was transmitted to the town 233.28 board of the town or governing body of the municipality. If the 233.29 town board or governing body desires to acquire any parcel lying 233.30 in the town or municipality by procedures authorized in this 233.31 section, it must file a written application with the county 233.32 board to withhold the parcel from public sale. The application 233.33 must be filed within9060 days of the request for 233.34 classification or reclassification and sale. The county board 233.35 shall then withhold the parcel from public sale forone yearsix 233.36 months. A municipality or governmental subdivision shall pay 234.1 maintenance costs incurred by the county during the six-month 234.2 period while the property is withheld from public sale, provided 234.3 the property is not offered for public sale after the six-month 234.4 period. A clerical error made by county officials does not 234.5 serve to eliminate the request of the town board or governing 234.6 body if the board or governing body has forwarded the 234.7 application to the county auditor. 234.8 Sec. 9. Minnesota Statutes 1998, section 282.01, 234.9 subdivision 4, is amended to read: 234.10 Subd. 4. [SALE: METHOD, REQUIREMENTS, EFFECTS.] The sale 234.11shallmust be conducted by the county auditor at the county seat 234.12 of the county in which the parcels lie,providedexcept that,in 234.13 St. Louis and Koochiching counties, the sale may be conducted in 234.14 any county facility within the county, and. The parcelsshall234.15 must be sold for cash only and at not less than the appraised 234.16 value, unless the county board of the countyshall havehas 234.17 adopted a resolution providing for their sale on terms, in which 234.18 event the resolutionshall controlcontrols with respectthereto234.19 to the sale. When the sale is made on terms other than for cash 234.20 only (1) a payment of at least ten percent of the purchase price 234.21 must be made at the time of purchase,thereuponand the balance 234.22shallmust be paid in no more than ten equal annual 234.23 installments, or (2) the payments must be made in accordance 234.24 with county board policy, but in no event may the board require 234.25 more than 12 installments annually, and the contract term must 234.26 not be for more than ten years.NoStanding timber or timber 234.27 productsshallmust not be removed from these lands until an 234.28 amount equal to the appraised value of all standing timber or 234.29 timber products on the lands at the time of purchase has been 234.30 paid by the purchaser; provided, that in case any. If a parcel 234.31 of land bearing standing timber or timber products is sold at 234.32 public auction for more than the appraised value, the amount bid 234.33 in excess of the appraised valueshallmust be allocated between 234.34 the land and the timber in proportion tothetheir respective 234.35 appraised valuesthereof, and no. In that case, standing timber 234.36 or timber productsshallmust not be removed from the land until 235.1 the amount of the excess bid allocated to timber or timber 235.2 products has been paid in addition to the appraised 235.3 valuethereofof the land. The purchaser is entitled to 235.4 immediate possession, subject to the provisions of any existing 235.5 valid lease made in behalf of the state. 235.6 For sales occurring on or after July 1, 1982, the unpaid 235.7 balance of the purchase price is subject to interest at the rate 235.8 determined pursuant to section 549.09. The unpaid balance of 235.9 the purchase price for sales occurring after December 31, 1990, 235.10 is subject to interest at the rate determined in section 279.03, 235.11 subdivision 1a. The interest rate is subject to change each 235.12 year on the unpaid balance in the manner provided for rate 235.13 changes in section 549.09 or 279.03, subdivision 1a, whichever, 235.14 is applicable. Interest on the unpaid contract balance on sales 235.15 occurring before July 1, 1982, is payable at the rate applicable 235.16 to the sale at the time that the sale occurred. 235.17 Sec. 10. Minnesota Statutes 1998, section 282.01, 235.18 subdivision 7, is amended to read: 235.19 Subd. 7. [COUNTY SALES; NOTICE, PURCHASE PRICE, 235.20 DISPOSITION.] The saleherein provided for shallmust commence 235.21 atsuchthe timeasdetermined by the county board of the county 235.22wherein suchin which the parcelslie, shall directare 235.23 located. The county auditor shall offer the parcels of land in 235.24 order in which they appear in the notice of sale, and shall sell 235.25 them to the highest bidder, but not for alesssum less than the 235.26 appraised value, until all of the parcels of landshallhave 235.27 been offered, and thereafter. Then the county auditor shall 235.28 sell any remaining parcels to anyone offering to pay the 235.29 appraised valuethereof, except that if the person could have 235.30 repurchased a parcel of property under section 282.012 or 235.31 282.241, that personshall not be allowed tomay not purchase 235.32 that same parcel of property at the sale under this subdivision 235.33 for a purchase price less than the sum of alldelinquenttaxes 235.34and, assessments, penalties, interest, and costs due at the time 235.35 of forfeiture computed under section 282.251,together with235.36penalties, interest, and costs that accrued or would have236.1accrued if the parcel had not forfeited to the stateand any 236.2 special assessments for improvements certified as of the date of 236.3 sale.SaidThe saleshallmust continue until allsuch236.4 the parcels are sold or until the county boardshall order236.5 orders a reappraisal orshall withdrawwithdraws any or allsuch236.6 of the parcels from sale.SuchThe list of lands may be added 236.7 to and the added lands may be sold at any time by publishing the 236.8 descriptions and appraised valuesof such. The added lands must 236.9 be: (1) parcels of landas shallthat have become forfeited and 236.10 classified as nonconservation since the commencement of any 236.11 prior saleor such; (2) parcelsas shallthat have been 236.12 reappraised, or such; (3) parcelsas shallthat have been 236.13 reclassified as nonconservation; orsuch(4) other parcelsas236.14 that are subject to sale but were omitted from the existing list 236.15 for any reason. The descriptions and appraised values must be 236.16 published in the same manner ashereinafterprovided for the 236.17 publication of the original list, provided that any. Parcels 236.18 added tosuchthe listshallmust first be offered for sale to 236.19 the highest bidder before they are sold at appraised value. All 236.20 parcels of land not offered for immediate sale, as well as 236.21 parcelsof such lands asthat are offered and not immediately 236.22 soldshall, continue to be held in trust by the state for the 236.23 taxing districts interested in each ofsaidthe parcels, under 236.24 the supervision of the county board, and such. Those parcels 236.25 may be used for public purposes until sold, as directed by the 236.26 county boardmay direct. 236.27 Sec. 11. Minnesota Statutes 1998, section 282.04, 236.28 subdivision 2, is amended to read: 236.29 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 236.30 DEMOLITION.] Until after the sale of a parcel of forfeited land 236.31 the county auditor may, with the approval of the county board of 236.32 commissioners, provide for the repair and improvement of any 236.33 building or structure located uponsuchthe parcel, and may 236.34 provide for maintenance of tax-forfeited lands, if it is 236.35 determined by the county board that such repairsor, 236.36 improvements, or maintenance are necessary for the operation, 237.1 use, preservation and safetythereof; and,of the building or 237.2 structure. If so authorized by the county board, the county 237.3 auditor may insureany suchthe building or structure against 237.4 loss or damage resulting from fire or windstorm, may purchase 237.5 workers' compensation insurance to insure the county against 237.6 claims for injury to the personsthereinemployed in the 237.7 building or structure by the county, and may insure the county, 237.8 its officers and employees against claims for injuries to 237.9 persons or property because of the management, use or operation 237.10 ofsuchthe building or structure.SuchThe county auditor may, 237.11 with the approval of the county board, provide for the 237.12 demolition ofany suchthe building or structure, which has been 237.13 determined by the county board to be within the purview of 237.14 section 299F.10, and for the sale of salvaged 237.15 materialstherefromfrom the building or structure.SuchThe 237.16 county auditor, with the approval of the county board, may 237.17 provide for the sale of abandoned personal property under either 237.18 chapter 345 or 566, as appropriate. The net proceeds from any 237.19 sale ofsuchthe personal property, salvaged materials,of237.20 timber or other products, or leases made under this lawshall237.21 must be deposited in the forfeited tax sale fund andshallmust 237.22 be distributed in the same manner as if the parcel had been sold. 237.23SuchThe county auditor, with the approval of the county 237.24 board, may provide for the demolition of any structureor237.25structureson tax-forfeited lands, if in the opinion of the 237.26 county board, the county auditor, and the land commissioner, if 237.27 therebeis one, the sale ofsuchthe land withsuchthe 237.28 structureor structures thereonon it, or the continued 237.29 existence ofsuchthe structureor structuresby reason of age, 237.30 dilapidated condition or excessive size as compared with nearby 237.31 structures, will result in a material lessening of net tax 237.32 capacities of real estate in the vicinity ofsuchthe 237.33 tax-forfeited lands, or if the demolition ofsuchthe structure 237.34 or structures will aid in disposing ofsuchthe tax-forfeited 237.35 property. 237.36 Before the sale of a parcel of forfeited land located in an 238.1 urban area, the county auditor may with the approval of the 238.2 county board provide for the gradingthereofof the land by 238.3 filling or the removal of any surplus materialtherefrom, and238.4wherefrom it. If the physical condition of forfeited lands is 238.5 such that a reasonable gradingthereofof the lands is necessary 238.6 for the protection and preservation of the property of any 238.7 adjoining owner,suchthe adjoining property owner or owners may 238.8make applicationapply to the county board to havesuchthe 238.9 grading done. If, after consideringsaidthe application, the 238.10 county board believes thatsuchthe grading will enhance the 238.11 value ofsuchthe forfeited lands commensurate with the cost 238.12 involved, it may approvethe sameit, andany suchthe work 238.13shallmust be performed under the supervision of the county or 238.14 city engineer, as the case may be, and the expensethereofpaid 238.15 from the forfeited tax sale fund. 238.16 Sec. 12. Minnesota Statutes 1998, section 282.05, is 238.17 amended to read: 238.18 282.05 [PROCEEDS APPORTIONED.] 238.19 The net proceeds received from the sale or rental of 238.20 forfeited lands shall be apportioned to the general funds of the 238.21 state or municipal subdivision thereof, in the manner 238.22 hereinafter provided, andshallmust befirstused by the 238.23 municipal subdivisionto retire any indebtedness then existing238.24 as provided in section 282.08. 238.25 Sec. 13. Minnesota Statutes 1998, section 282.08, is 238.26 amended to read: 238.27 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 238.28 The net proceeds from the sale or rental of any parcel of 238.29 forfeited land, or from the sale ofanyproductstherefromfrom 238.30 the forfeited land,shallmust be apportioned by the county 238.31 auditor to the taxing districts interestedthereinin the land, 238.32 as follows: 238.33 (1)Suchthe portionas may berequired to pay any amounts 238.34 included in the appraised value under section 282.01, 238.35 subdivision 3, as representing increased value due to any public 238.36 improvement made after forfeiture ofsuchthe parcel to the 239.1 state, but not exceeding the amount certified by the clerk of 239.2 the municipality, shallmust be apportioned to the municipal 239.3 subdivision entitledtheretoto it; 239.4 (2)Suchthe portionas may berequired to pay any amount 239.5 included in the appraised value under section 282.019, 239.6 subdivision 5, representing increased value due to response 239.7 actions taken after forfeiture ofsuchthe parcel to the state, 239.8 but not exceeding the amount of expenses certified by the 239.9 pollution control agency or the commissioner of 239.10 agriculture,shallmust be apportioned to the agency or the 239.11 commissioner of agriculture and deposited in the fund from which 239.12 the expenses were paid; 239.13 (3)Suchthe portion of the remainderas may berequired to 239.14 discharge any special assessment chargeable againstsuchthe 239.15 parcel for drainage or other purpose whether due or deferred at 239.16 the time of forfeiture,shallmust be apportioned to the 239.17 municipal subdivision entitledtheretoto it; and 239.18 (4) any balanceshallmust be apportioned as follows: 239.19(a) Any(i) The county board may annually by resolution set 239.20 aside no more than 30 percent of the receipts remaining to be 239.21 used for timber development on tax-forfeited land and dedicated 239.22 memorial forests, to be expended under the supervision of the 239.23 county board. Itshallmust be expended only on projects 239.24 approved by the commissioner of natural resources. 239.25(b) Any(ii) The county board may annually by resolution 239.26 set aside no more than 20 percent of the receipts remaining to 239.27 be used for the acquisition and maintenance of county parks or 239.28 recreational areas as defined in sections 398.31 to 398.36, to 239.29 be expended under the supervision of the county board. 239.30(c) If the board does not avail itself of the authority239.31under paragraph (a) or (b)(iii) Any balance remainingshall239.32 must be apportioned as follows: county, 40 percent; town or 239.33 city, 20 percent; and school district, 40 percent,and if the239.34board avails itself of the authority under paragraph (a) or (b)239.35the balance remaining shall be apportioned among the county,239.36town or city, and school district in the proportions in this240.1paragraph above stated,provided, however, that in unorganized 240.2 territory that portion whichshouldwould have accrued to the 240.3 townshipshallmust be administered by the county board of 240.4 commissioners. 240.5 Sec. 14. Minnesota Statutes 1998, section 282.09, is 240.6 amended to read: 240.7 282.09 [FORFEITED TAX SALE FUND.] 240.8 Subdivision 1. [MONEY PLACED IN FUND; FEES AND 240.9 DISBURSEMENTS.] The county auditor and county treasurer shall 240.10 place all money received through the operation of sections 240.11 282.01 to 282.13 in a fund to be known as the forfeited tax sale 240.12 fund, and all disbursements and costsshallmust be charged 240.13 against that fund, when allowed by the county board. Members of 240.14 the county board may be paid a per diem pursuant to section 240.15 375.055, subdivision 1, and reimbursed for their necessary 240.16 expenses, and may receive mileage as fixed by law. The amount 240.17 of compensation of a land commissioner and assistants, if a land 240.18 commissioner is appointed,shallmust bein the amount240.19 determined by the county board. The county auditorshallmust 240.20 receive 50 cents for each certificate of sale, each contract for 240.21 deed and each lease executed by the auditor, and, in counties 240.22 where no land commissioner is appointed, additional annual 240.23 compensation, not exceeding $300, as fixed by the county board. 240.24 The amount of compensation of any other clerical helpthat may240.25beneeded by the county auditor or land commissionershallmust 240.26 bein the amountdetermined by the county board. All 240.27 compensation provided forherein shall bein this subdivision is 240.28 in addition to other compensation allowed by law. Fees so 240.29 charged in addition to the fee imposed in section 282.014shall240.30 must be included in the annual settlement by the county auditor 240.31 as hereinafter provided. On or before February 1 each year, the 240.32 commissioner of revenue shall certify to the commissioner of 240.33 finance, by counties, the total number of state deeds issued and 240.34 reissued during the preceding calendar year for which such fees 240.35 are charged and the total amountthereofof fees. On or before 240.36 March 1 each year, each county shall remit to the commissioner 241.1 of revenue, from the forfeited tax sale fund, the aggregate 241.2 amount of the fees imposed by section 282.014 in the preceding 241.3 calendar year. The commissioner of revenue shall deposit the 241.4 amounts received in the state treasury to the credit of the 241.5 general fund. When disbursements are made from the fund for 241.6 repairs, refunds, expenses of actions to quiet title, or any 241.7 other purpose which particularly affects specific parcels of 241.8 forfeited lands, the amount ofsuchthe disbursementsshallmust 241.9 be charged to theaccount of the taxing districts interested in241.10such parcelsforfeited tax sale fund. The county auditor shall 241.11 make an annual settlement of the net proceeds received from 241.12 sales and rentals by the operation of sections 282.01 to 282.13, 241.13 on the settlement day determined in section 276.09, for the 241.14 preceding calendar year. 241.15 Subd. 2. [EXPENDITURES.] In all counties,from said241.16"Forfeited Tax Sale Fund,"the authoritiesduly charged with the241.17execution ofresponsible for carrying out the duties imposed by 241.18 sections 282.01 to 282.13, at their discretion, may expend 241.19 moneysin repairingfrom the forfeited tax sale fund to repair 241.20 any sewer or water main either inside or outside of any curb 241.21 line situated along any property forfeited to the state for 241.22 nonpayment of taxes, to acquire and maintain equipment used 241.23 exclusively for the maintenance and improvement of tax-forfeited 241.24 lands,andto cut down, otherwise destroy or eradicate noxious 241.25 weeds on all tax-forfeited lands. In any year, the money to be241.26expended for the cutting down, destruction or eradication of241.27noxious weeds shall not exceed in amount more than ten percent241.28of the net proceeds of said "Forfeited Tax Sale Fund" during the241.29preceding calendar year, or $10,000, whichever is the lesser241.30sum, and to maintain tax-forfeited lands. 241.31 Sec. 15. Minnesota Statutes 1998, section 282.241, is 241.32 amended to read: 241.33 282.241 [REPURCHASE AFTER FORFEITURE.] 241.34 The owner at the time of forfeiture, or the owner's heirs, 241.35 devisees, or representatives, or any person to whom the right to 241.36 pay taxes was given by statute, mortgage, or other agreement, 242.1 may repurchase any parcel of land claimed by the state to be 242.2 forfeited to the state for taxes unless before the time 242.3 repurchase is made the parcel is sold under installment 242.4 payments, or otherwise, by the state as provided by law, or is 242.5 under mineral prospecting permit or lease, or proceedings have 242.6 been commenced by the state or any of its political subdivisions 242.7 or by the United States to condemnsuchthe parcel of land. The 242.8 parcel of land may be repurchased for the sum of all delinquent 242.9 taxes and assessments computed under section 282.251, together 242.10 with penalties, interest, and costs, that accrued or would have 242.11 accrued if the parcel of land had not forfeited to the state. 242.12 Except for property which was homesteaded on the date of 242.13 forfeiture,suchrepurchaseshall beis permitted during one 242.14 year only from the date of forfeiture, and in any case only 242.15 after the adoption of a resolution by the board of county 242.16 commissioners determining thattherebyby repurchase undue 242.17 hardship or injustice resulting from the forfeiture will be 242.18 corrected, or that permittingsuchthe repurchase will promote 242.19 the use ofsuchthe lands that will best serve the public 242.20 interest. If the county board has good cause to believe that a 242.21 repurchase installment payment plan for a particular parcel is 242.22 unnecessary and not in the public interest, the county board may 242.23 require as a condition of repurchase that the entire repurchase 242.24 price be paid at the time of repurchase. A repurchaseshall242.25beis subject to any easement, lease, or other encumbrance 242.26 granted by the stateprior theretobefore the repurchase, and if 242.27saidthe land is located within a restricted area established by 242.28 any county under Laws 1939, chapter 340,suchthe repurchase 242.29shallmust not be permitted unlesssaidthe resolutionwith242.30respect theretoapproving the repurchase is adopted by the 242.31 unanimous vote of the board of county commissioners. 242.32 The person seeking to repurchase under this section shall 242.33 pay all maintenance costs incurred by the county auditor during 242.34 the time the property was tax-forfeited. 242.35 Sec. 16. Minnesota Statutes 1998, section 282.261, 242.36 subdivision 4, is amended to read: 243.1 Subd. 4. [SERVICE FEE.] The county auditor may collect a 243.2 service fee to cover administrative costs as set by the county 243.3 board for each repurchasecontract approvedapplication received 243.4 after July 1, 1985. The feeshallmust be paid at the time of 243.5repurchaseapplication andshallmust be credited to the county 243.6 general revenue fund. 243.7 Sec. 17. Minnesota Statutes 1998, section 282.261, is 243.8 amended by adding a subdivision to read: 243.9 Subd. 5. [COUNTY MAY IMPOSE CONDITIONS OF REPURCHASE.] The 243.10 county auditor, after receiving county board approval, may 243.11 impose conditions on repurchase of tax-forfeited lands limiting 243.12 the use of the parcel subject to the repurchase, including, but 243.13 not limited to: environmental remediation action plan 243.14 restrictions or covenants; easements for lines or equipment for 243.15 telephone, telegraph, electric power, or telecommunications. 243.16 Sec. 18. Minnesota Statutes 1998, section 283.10, is 243.17 amended to read: 243.18 283.10 [APPLICATION MUST BE MADE WITHIN TWO YEARS.] 243.19 Nosuch refundmentrefund shall be granted unless an 243.20 applicationtherefor shall be dulyfor refund is approved and 243.21 presented to the commissioner of revenue within two years from 243.22 the date ofsuch tax certificate orthe state assignment 243.23 certificate. 243.24 Sec. 19. Minnesota Statutes 1998, section 375.192, 243.25 subdivision 2, is amended to read: 243.26 Subd. 2. [PROCEDURE, CONDITIONS.] Upon written application 243.27 by the owner of any property, the county board may grant the 243.28 reduction or abatement of estimated market valuation or taxes 243.29 and of any costs, penalties, or interest on them as the board 243.30 deems just and equitable and order the refund in whole or part 243.31 of any taxes, costs, penalties, or interest which have been 243.32 erroneously or unjustly paid. Except as provided in sections 243.33 469.1812 to 469.1815, no reduction or abatement may be granted 243.34 on the basis of providing an incentive for economic development 243.35 or redevelopment. Except as provided in section 375.194, the 243.36 county boardis authorized tomay consider and grant reductions 244.1 or abatements on applications only as they relate to taxes 244.2 payable in the current year and the two prior years; provided 244.3 that reductions or abatements for the two prior years shall be 244.4 considered or granted only for (i) clerical errors, or (ii) when 244.5 the taxpayer fails to file for a reduction or an adjustment due 244.6 to hardship, as determined by the county board. The application 244.7 must include the social security number of the applicant. The 244.8 social security number is private data on individuals as defined 244.9 by section 13.02, subdivision 12. All applications must be 244.10 approved by the county assessor, or, if the property is located 244.11 in a city of the first or second class having a city assessor, 244.12 by the city assessor, and by the county auditor before 244.13 consideration by the county board, except that the part of the 244.14 application which is for the abatement of penalty or interest 244.15 must be approved by the county treasurer and county auditor. 244.16 Approval by the county or city assessor is not required for 244.17 abatements of penalty or interest. No reduction, abatement, or 244.18 refund of any special assessments made or levied by any 244.19 municipality for local improvements shall be made unless it is 244.20 also approved by the board of review or similar taxing authority 244.21 of the municipality.Before taking actionOn any reduction or 244.22 abatementwherewhen the reduction of taxes, costs, penalties, 244.23 and interest exceed $10,000, the county board shall give20244.24days'notice within 20 days to the school board and the 244.25 municipality in which the property is located. The notice must 244.26 describe the property involved, the actual amount of the 244.27 reduction being sought, and the reason for the reduction.If244.28the school board or the municipality object to the granting of244.29the reduction or abatement, the county board must refer the244.30abatement or reduction to the commissioner of revenue with its244.31recommendation. The commissioner shall consider the abatement244.32or reduction under section 270.07, subdivision 1.244.33 An appeal may not be taken to the tax court from any order 244.34 of the county board made in the exercise of the discretionary 244.35 authority granted in this section. 244.36 The county auditor shall notify the commissioner of revenue 245.1 of all abatements resulting from the erroneous classification of 245.2 real property, for tax purposes, as nonhomestead property. For 245.3 the abatements relating to the current year's tax processed 245.4 through June 30, the auditor shall notify the commissioner on or 245.5 before July 31 of that same year of all abatement applications 245.6 granted. For the abatements relating to the current year's tax 245.7 processed after June 30 through the balance of the year, the 245.8 auditor shall notify the commissioner on or before the following 245.9 January 31 of all applications granted. The county auditor 245.10 shall submit a form containing the social security number of the 245.11 applicant and such other information the commissioner prescribes. 245.12 Sec. 20. Minnesota Statutes 1998, section 383C.482, 245.13 subdivision 1, is amended to read: 245.14 Subdivision 1. [AUDITOR TO SEARCH RECORDS; CERTIFICATES.] 245.15 The St. Louis county auditor, upon written application of any 245.16 person, shallmakesearchofthe records of the auditor's office 245.17 and the county treasurer's office, and ascertain the amount of 245.18 current tax against any lot or parcel of land described in the 245.19 application and the existence of all tax liens and tax sales as 245.20 tosuchthe lot or parcel of land, and certify the result of 245.21suchthe search under the seal of office, giving the description 245.22 of the lot or parcel of land, the amount of the current tax, if 245.23 any, and all tax liens and tax sales shown by such records, and 245.24 the amountthereofof liens and tax sales, the year of tax 245.25 covered bysuchthe lien, and the date of tax sale, and the name245.26of the purchaser at such tax sale. For the purpose of 245.27 ascertaining the current tax againstsucha lot or parcel of 245.28 land, the county auditor has the right of access to the records 245.29 of current taxes in the office of the county treasurer. 245.30 Sec. 21. [REPEALER.] 245.31 Minnesota Statutes 1998, sections 92.22; 280.27; 281.13; 245.32 281.38; 284.01; 284.02; 284.03; 284.04; 284.05; and 284.06, are 245.33 repealed. 245.34 Sec. 22. [EFFECTIVE DATES.] 245.35 This article is effective September 1, 1999, except that 245.36 sections 11, and 13 to 15 are effective beginning January 1, 246.1 2000, and except that section 12 is effective for net proceeds 246.2 received after the date of final enactment of this act. 246.3 ARTICLE 12 246.4 WATER AND SANITARY SEWER DISTRICTS 246.5 Section 1. [CEDAR LAKE AREA WATER AND SANITARY SEWER 246.6 DISTRICT; DEFINITIONS.] 246.7 Subdivision 1. [APPLICATION.] In sections 1 to 19, the 246.8 definitions in this section apply. 246.9 Subd. 2. [DISTRICT.] "Cedar lake area water and sanitary 246.10 sewer district" and "district" mean the area over which the 246.11 Cedar lake area water and sanitary sewer board has jurisdiction, 246.12 which includes the area within the city of New Prague and Helena 246.13 and Cedar Lake townships in Scott county. The district shall 246.14 precisely describe the area over which it has jurisdiction by a 246.15 metes and bounds description in the comprehensive plan adopted 246.16 pursuant to section 5. The territory may not be larger than the 246.17 area encompassed by the Cedar Lake improvement district, but it 246.18 may be smaller and the area may include a route along public 246.19 rights-of-way from Cedar Lake to the city of New Prague along 246.20 which the sewer main is laid. 246.21 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 246.22 "board" means the Cedar lake area water and sanitary sewer board 246.23 established for the district as provided in subdivision 2. 246.24 Subd. 4. [PERSON.] "Person" means an individual, 246.25 partnership, corporation, limited liability company, 246.26 cooperative, or other organization or entity, public or private. 246.27 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 246.28 units" or "governmental units" means Scott county, the city of 246.29 New Prague, and Helena and Cedar Lake Townships in Scott county. 246.30 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 246.31 "betterment" have the meanings given in Minnesota Statutes, 246.32 section 475.51. 246.33 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 246.34 control agency created in Minnesota Statutes, section 116.02. 246.35 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 246.36 water-carried waste products from whatever sources derived, 247.1 together with any groundwater infiltration and surface water as 247.2 may be present. 247.3 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 247.4 water" and "sewer system" have the meanings given in Minnesota 247.5 Statutes, section 115.01. 247.6 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 247.7 works" and "disposal system" have the meanings given in 247.8 Minnesota Statutes, section 115.01. 247.9 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 247.10 its necessary appurtenances, including but not limited to mains, 247.11 pumping stations, and sewage flow-regulating and -measuring 247.12 stations, that is: 247.13 (1) designed for or used to conduct sewage originating in 247.14 more than one local governmental unit; 247.15 (2) designed or used to conduct all or substantially all 247.16 the sewage originating in a single local governmental unit from 247.17 a point of collection in that unit to an interceptor or 247.18 treatment works outside that unit; or 247.19 (3) determined by the board to be a major collector of 247.20 sewage used or designed to serve a substantial area in the 247.21 district. 247.22 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 247.23 system" means any and all interceptors or treatment works owned, 247.24 constructed, or operated by the board unless designated by the 247.25 board as local water and sanitary sewer facilities. 247.26 Subd. 13. [MUNICIPALITY.] "Municipality" means any town or 247.27 home rule charter or statutory city. 247.28 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 247.29 betterment" and "costs of acquisition and betterment" mean all 247.30 acquisition and betterment expenses permitted to be financed out 247.31 of stopped bond proceeds issued in accordance with section 13, 247.32 whether or not the expenses are in fact financed out of the bond 247.33 proceeds. 247.34 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 247.35 betterment, and debt service" means interest and principal 247.36 estimated to be due during the budget year on bonds issued to 248.1 finance said acquisition and betterment and all other costs of 248.2 acquisition and betterment estimated to be paid during the year 248.3 from funds other than bond proceeds and federal or state grants. 248.4 Subd. 16. [RESIDENT.] "Resident" means the owner of a 248.5 dwelling located in the district and receiving water or sewer 248.6 service. 248.7 Sec. 2. [WATER AND SANITARY SEWER BOARD.] 248.8 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 248.9 district is established in Helena and Cedar Lake townships and 248.10 the city of New Prague in Scott county, to be known as the Cedar 248.11 lake area water and sanitary sewer district. The water and 248.12 sewer district is under the control and management of the Cedar 248.13 lake area water and sanitary sewer board. The board is 248.14 established as a public corporation and political subdivision of 248.15 the state with perpetual succession and all the rights, powers, 248.16 privileges, immunities, and duties granted to or imposed upon a 248.17 municipal corporation, as provided in sections 1 to 19. 248.18 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 248.19 seven members selected as provided in this subdivision. Each of 248.20 the town boards of the townships shall meet to appoint two 248.21 residents to the water and sanitary sewer board. The township 248.22 appointees must live on Cedar lake and must be served by the 248.23 system. One member must be selected by the city of New Prague. 248.24 Two members must be selected by the Scott county board of 248.25 commissioners. Each member has one vote. The first terms are 248.26 as follows: two for one year, two for two years, and three for 248.27 three years, fixed by lot at the district's first meeting. 248.28 Thereafter, all terms are for three years. 248.29 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 248.30 must be selected as provided in subdivision 2 within 60 days 248.31 after sections 1 to 19 are effective. The successor to each 248.32 board member must be selected at any time within 60 days before 248.33 the expiration of the member's term in the same manner as the 248.34 predecessor was selected. A vacancy on the board must be filled 248.35 within 60 days after it occurs. 248.36 Subd. 4. [VACANCIES.] If the office of a board member 249.1 becomes vacant, the vacancy must be filled for the unexpired 249.2 term in the manner provided for selection of the member who 249.3 vacated the office. The office is deemed vacant under the 249.4 conditions specified in Minnesota Statutes, section 351.02. 249.5 Subd. 5. [REMOVAL.] A board member may be removed by the 249.6 unanimous vote of the governing body appointing the member, with 249.7 or without cause, or for malfeasance or nonfeasance in the 249.8 performance of official duties as provided by Minnesota 249.9 Statutes, sections 351.14 to 351.23. 249.10 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 249.11 certificate of selection of every board member selected under 249.12 subdivision 2 stating the term for which selected, must be made 249.13 by the respective town clerks. The certificates, with the 249.14 approval appended by other authority, if required, must be filed 249.15 with the secretary of state. Counterparts thereof must be 249.16 furnished to the board member and the secretary of the board. 249.17 Each member shall qualify by taking and subscribing the oath of 249.18 office prescribed by the Minnesota Constitution, article 5, 249.19 section 8. The oath, duly certified by the official 249.20 administering the same, must be filed with the secretary of 249.21 state and the secretary of the board. 249.22 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 249.23 except the chair, must be paid a per diem compensation of $35 249.24 for meetings and for other services as are specifically 249.25 authorized by the board, not to exceed $1,000 in any one year. 249.26 The chair may be paid a per diem compensation of $45 for 249.27 meetings and for other services specifically authorized by the 249.28 board, not to exceed $1,500 in any one year. All members of the 249.29 board must be reimbursed for all reasonable and necessary 249.30 expenses actually incurred in the performance of duties. 249.31 Sec. 3. [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 249.32 OF BOARD.] 249.33 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; 249.34 SEAL.] After the selection and qualification of all board 249.35 members, the board must meet to organize the board at the call 249.36 of any two board members, upon seven days' notice by registered 250.1 mail to the remaining board members, at a time and place within 250.2 the district specified in the notice. A majority of the members 250.3 is a quorum at that meeting and all other meetings of the board, 250.4 but a lesser number may meet and adjourn from time to time and 250.5 compel the attendance of absent members. At the first meeting 250.6 the board shall select its officers and conduct other 250.7 organizational business as may be necessary. Thereafter the 250.8 board shall meet regularly at the time and place that the board 250.9 designates by resolution. Special meetings may be held at any 250.10 time upon call of the chair or any two members, upon written 250.11 notice sent by mail to each member at least three days before 250.12 the meeting, or upon other notice as the board by resolution may 250.13 provide, or without notice if each member is present or files 250.14 with the secretary a written consent to the meeting either 250.15 before or after the meeting. Except as otherwise provided in 250.16 sections 1 to 19, any action within the authority of the board 250.17 may be taken by the affirmative vote of a majority of the board 250.18 and may be taken by regular or adjourned regular meeting or at a 250.19 duly held special meeting, but in any case only if a quorum is 250.20 present. Meetings of the board must be open to the public. The 250.21 board may adopt a seal, which must be officially and judicially 250.22 noticed, to authenticate instruments executed by its authority, 250.23 but omission of the seal does not affect the validity of any 250.24 instrument. 250.25 Subd. 2. [CHAIR.] The board shall elect a chair from its 250.26 membership. The term of the first chair of the board expires on 250.27 January 1, 2001, and the terms of successor chairs expire on 250.28 January 1 of each succeeding year. The chair shall preside at 250.29 all meetings of the board, if present, and shall perform all 250.30 other duties and functions usually incumbent upon such an 250.31 officer, and all administrative functions assigned to the chair 250.32 by the board. The board shall elect a vice-chair from its 250.33 membership to act for the chair during temporary absence or 250.34 disability. 250.35 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 250.36 persons who may, but need not be, members of the board, to act 251.1 as its secretary and treasurer. The two offices may be combined. 251.2 The secretary and treasurer shall hold office at the pleasure of 251.3 the board, subject to the terms of any contract of employment 251.4 that the board may enter into with the secretary or treasurer. 251.5 The secretary shall record the minutes of all meetings of the 251.6 board, and be the custodian of all books and records of the 251.7 board except those that the board entrusts to the custody of a 251.8 designated employee. The treasurer is the custodian of all 251.9 money received by the board except as the board otherwise 251.10 entrusts to the custody of a designated employee. The board may 251.11 appoint a deputy to perform any and all functions of either the 251.12 secretary or the treasurer. A secretary or treasurer who is not 251.13 a member of the board or a deputy of either does not have the 251.14 right to vote. 251.15 Subd. 4. [PUBLIC EMPLOYEES.] The executive director and 251.16 other persons employed by the district are public employees and 251.17 have all the rights and duties conferred on public employees 251.18 under Minnesota Statutes, sections 179A.01 to 179A.25. The 251.19 board may elect to have employees become members of either the 251.20 public employees retirement association or the Minnesota state 251.21 retirement system. The compensation and conditions of 251.22 employment of the employees must be governed by rules applicable 251.23 to state employees in the classified service and to the 251.24 provisions of Minnesota Statutes, chapter 15A. 251.25 Subd. 5. [PROCEDURES.] The board shall adopt resolutions 251.26 or bylaws establishing procedures for board action, personnel 251.27 administration, keeping records, approving claims, authorizing 251.28 or making disbursements, safekeeping funds, and auditing all 251.29 financial operations of the board. 251.30 Subd. 6. [SURETY BONDS AND INSURANCE.] The board may 251.31 procure surety bonds for its officers and employees, in amounts 251.32 deemed necessary to ensure proper performance of their duties 251.33 and proper accounting for funds in their custody. It may 251.34 procure insurance against risks to property and liability of the 251.35 board and its officers, agents, and employees for personal 251.36 injuries or death and property damage and destruction, in 252.1 amounts deemed necessary or desirable, with the force and effect 252.2 stated in Minnesota Statutes, chapter 466. 252.3 Sec. 4. [GENERAL POWERS OF BOARD.] 252.4 Subdivision 1. [SCOPE.] The board has all powers necessary 252.5 or convenient to discharge the duties imposed upon it by law. 252.6 The powers include those specified in this section, but the 252.7 express grant or enumeration of powers does not limit the 252.8 generality or scope of the grant of powers contained in this 252.9 subdivision. 252.10 Subd. 2. [SUIT.] The board may sue or be sued. 252.11 Subd. 3. [CONTRACT.] The board may enter into any contract 252.12 necessary or proper for the exercise of its powers or the 252.13 accomplishment of its purposes. 252.14 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 252.15 gifts, apply for and accept grants or loans of money or other 252.16 property from the United States, the state, or any person for 252.17 any of its purposes, enter into any agreement required in 252.18 connection with them, and hold, use, and dispose of the money or 252.19 property in accordance with the terms of the gift, grant, loan, 252.20 or agreement relating to it. With respect to loans or grants of 252.21 funds or real or personal property or other assistance from any 252.22 state or federal government or its agency or instrumentality, 252.23 the board may contract to do and perform all acts and things 252.24 required as a condition or consideration for the gift, grant, or 252.25 loan pursuant to state or federal law or regulations, whether or 252.26 not included among the powers expressly granted to the board in 252.27 sections 1 to 19. 252.28 Subd. 5. [COOPERATIVE ACTION.] The board may act under 252.29 Minnesota Statutes, section 471.59, or any other appropriate law 252.30 providing for joint or cooperative action between governmental 252.31 units. 252.32 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 252.33 conduct research studies and programs, collect and analyze data, 252.34 prepare reports, maps, charts, and tables, and conduct all 252.35 necessary hearings and investigations in connection with the 252.36 design, construction, and operation of the district disposal 253.1 system. 253.2 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 253.3 it deems advisable, persons or firms performing engineering, 253.4 legal, or other services of a professional nature; require any 253.5 employee to obtain and file with it an individual bond or 253.6 fidelity insurance policy; and procure insurance in amounts it 253.7 deems necessary against liability of the board or its officers 253.8 or both, for personal injury or death and property damage or 253.9 destruction, with the force and effect stated in Minnesota 253.10 Statutes, chapter 466, and against risks of damage to or 253.11 destruction of any of its facilities, equipment, or other 253.12 property as it deems necessary. 253.13 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 253.14 by purchase, lease, condemnation, gift, or grant, any real or 253.15 personal property including positive and negative easements and 253.16 water and air rights, and it may construct, enlarge, improve, 253.17 replace, repair, maintain, and operate any interceptor, 253.18 treatment works, or water facility determined to be necessary or 253.19 convenient for the collection and disposal of sewage in the 253.20 district. Any local governmental unit and the commissioners of 253.21 transportation and natural resources are authorized to convey to 253.22 or permit the use of any of the above-mentioned facilities owned 253.23 or controlled by it, by the board, subject to the rights of the 253.24 holders of any bonds issued with respect to those facilities, 253.25 with or without compensation, without an election or approval by 253.26 any other governmental unit or agency. All powers conferred by 253.27 this subdivision may be exercised both within or without the 253.28 district as may be necessary for the exercise by the board of 253.29 its powers or the accomplishment of its purposes. The board may 253.30 hold, lease, convey, or otherwise dispose of the above-mentioned 253.31 property for its purposes upon the terms and in the manner it 253.32 deems advisable. Unless otherwise provided, the right to 253.33 acquire lands and property rights by condemnation may be 253.34 exercised only in accordance with Minnesota Statutes, sections 253.35 117.011 to 117.232, and applies to any property or interest in 253.36 the property owned by any local governmental unit. Property 254.1 devoted to an actual public use at the time, or held to be 254.2 devoted to such a use within a reasonable time, must not be so 254.3 acquired unless a court of competent jurisdiction determines 254.4 that the use proposed by the board is paramount to the existing 254.5 use. Except in the case of property in actual public use, the 254.6 board may take possession of any property on which condemnation 254.7 proceedings have been commenced at any time after the issuance 254.8 of a court order appointing commissioners for its condemnation. 254.9 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 254.10 construct or maintain its systems or facilities in, along, on, 254.11 under, over, or through public waters, streets, bridges, 254.12 viaducts, and other public rights-of-way without first obtaining 254.13 a franchise from a county or municipality having jurisdiction 254.14 over them. However, the facilities must be constructed and 254.15 maintained in accordance with the ordinances and resolutions of 254.16 the county or municipality relating to constructing, installing, 254.17 and maintaining similar facilities on public properties and must 254.18 not unnecessarily obstruct the public use of those rights-of-way. 254.19 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 254.20 lease, or otherwise dispose of any real or personal property 254.21 acquired by it which is no longer required for accomplishment of 254.22 its purposes. The property may be sold in the manner provided 254.23 by Minnesota Statutes, section 469.065, insofar as practical. 254.24 The board may give notice of sale as it deems appropriate. When 254.25 the board determines that any property or any part of the 254.26 district disposal system acquired from a local governmental unit 254.27 without compensation is no longer required but is required as a 254.28 local facility by the governmental unit from which it was 254.29 acquired, the board may by resolution transfer it to that 254.30 governmental unit. 254.31 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 254.32 board may contract with the United States or any agency thereof, 254.33 any state or agency thereof, or any regional public planning 254.34 body in the state with jurisdiction over any part of the 254.35 district, or any other municipal or public corporation, or 254.36 governmental subdivision or agency or political subdivision in 255.1 any state, for the joint use of any facility owned by the board 255.2 or such entity, for the operation by that entity of any system 255.3 or facility of the board, or for the performance on the board's 255.4 behalf of any service, including but not limited to planning, on 255.5 terms as may be agreed upon by the contracting parties. Unless 255.6 designated by the board as a local water and sanitary sewer 255.7 facility, any treatment works or interceptor jointly used, or 255.8 operated on behalf of the board, as provided in this 255.9 subdivision, is deemed to be operated by the board for purposes 255.10 of including those facilities in the district disposal system. 255.11 Sec. 5. [COMPREHENSIVE PLAN.] 255.12 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 255.13 adopt a comprehensive plan for the collection, treatment, and 255.14 disposal of sewage in the district for a designated period the 255.15 board deems proper and reasonable. The board shall prepare and 255.16 adopt subsequent comprehensive plans for the collection, 255.17 treatment, and disposal of sewage in the district for each 255.18 succeeding designated period as the board deems proper and 255.19 reasonable. All comprehensive plans of the district shall be 255.20 subject to the planning and zoning authority of Scott county and 255.21 in conformance with all planning and zoning ordinances of Scott 255.22 county. The first plan, as modified by the board, and any 255.23 subsequent plan shall take into account the preservation and 255.24 best and most economic use of water and other natural resources 255.25 in the area; the preservation, use, and potential for use of 255.26 lands adjoining waters of the state to be used for the disposal 255.27 of sewage; and the impact the disposal system will have on 255.28 present and future land use in the area affected. In no case 255.29 shall the comprehensive plan provide for more than 325 255.30 connections to the disposal system. All connections must be 255.31 charged a full assessment. Connections made after the initial 255.32 assessment period ends must be charged an amount equal to the 255.33 initial assessment plus an adjustment for inflation and plus any 255.34 other charges determined to be reasonable and necessary by the 255.35 board. Deferred assessments may be permitted, as provided for 255.36 in Minnesota Statutes, chapter 429. The plans shall include the 256.1 general location of needed interceptors and treatment works, a 256.2 description of the area that is to be served by the various 256.3 interceptors and treatment works, a long-range capital 256.4 improvements program, and any other details as the board deems 256.5 appropriate. In developing the plans, the board shall consult 256.6 with persons designated for the purpose by governing bodies of 256.7 any governmental unit within the district to represent the 256.8 entities and shall consider the data, resources, and input 256.9 offered to the board by the entities and any planning agency 256.10 acting on behalf of one or more of the entities. Each plan, 256.11 when adopted, must be followed in the district and may be 256.12 revised as often as the board deems necessary. 256.13 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 256.14 any subsequent comprehensive plan, the board shall hold a public 256.15 hearing on the proposed plan at a time and place in the district 256.16 that it selects. The hearing may be continued from time to 256.17 time. Not less than 45 days before the hearing, the board shall 256.18 publish notice of the hearing in a newspaper having general 256.19 circulation in the district, stating the date, time, and place 256.20 of the hearing, and the place where the proposed plan may be 256.21 examined by any interested person. At the hearing, all 256.22 interested persons must be permitted to present their views on 256.23 the plan. 256.24 Sec. 6. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 256.25 ASSESSMENTS.] 256.26 The Cedar lake area water and sanitary sewer board, in 256.27 order to implement the powers granted under sections 1 to 19 to 256.28 establish, maintain, and administer the Cedar lake area water 256.29 and sanitary sewer district, may issue obligations and impose 256.30 special assessments against benefited property within the limits 256.31 of the district benefited by facilities constructed under 256.32 sections 1 to 19 in the manner provided for local governments by 256.33 Minnesota Statutes, chapter 429. 256.34 Sec. 7. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 256.35 The authority of the water and sanitary sewer board to 256.36 establish water or sewer or combined water and sewer systems 257.1 under this section extends to areas within the Cedar lake area 257.2 water and sanitary sewer district organized into cities when 257.3 requested by resolution of the governing body of the affected 257.4 city or when ordered by the Minnesota pollution control agency 257.5 after notice and hearing. For the purpose of any petition filed 257.6 or special assessment levied with respect to any system, the 257.7 entire area to be served within a city must be treated as if it 257.8 were owned by a single person, and the governing body shall 257.9 exercise all the rights and be subject to all the duties of an 257.10 owner of the area, and shall have power to provide for the 257.11 payment of all special assessments and other charges imposed 257.12 upon the area with respect to the system by the appropriation of 257.13 money, the collection of service charges, or the levy of taxes, 257.14 which shall be subject to no limitation of rate or amount. 257.15 Sec. 8. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 257.16 Subdivision 1. [POWERS.] In addition to all other powers 257.17 conferred upon the board in sections 1 to 19, it has the powers 257.18 specified in this section. 257.19 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 257.20 discharge the effluent from any treatment works operated by it 257.21 into any waters of the state, subject to approval of the agency 257.22 if required and in accordance with any effluent or water quality 257.23 standards lawfully adopted by the agency, any interstate agency, 257.24 or any federal agency having jurisdiction. 257.25 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 257.26 require any person or local governmental unit to provide for the 257.27 discharge of any sewage, directly or indirectly, into the 257.28 district disposal system, or to connect any disposal system or a 257.29 part of it with the district disposal system wherever reasonable 257.30 opportunity for connection is provided; may regulate the manner 257.31 in which the connections are made; may require any person or 257.32 local governmental unit discharging sewage into the disposal 257.33 system to provide preliminary treatment for it; may prohibit the 257.34 discharge into the district disposal system of any substance 257.35 that it determines will or may be harmful to the system or any 257.36 persons operating it; and may require any local governmental 258.1 unit to discontinue the acquisition, betterment, or operation of 258.2 any facility for the unit's disposal system wherever and so far 258.3 as adequate service is or will be provided by the district 258.4 disposal system. 258.5 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 258.6 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 258.7 cost-recovery techniques imposed on persons discharging sewage 258.8 directly or indirectly into the district disposal system must 258.9 comply with applicable state and federal law, including state 258.10 and federal regulations governing grant applications. 258.11 Sec. 9. [BUDGET.] 258.12 (a) The board shall prepare and adopt, on or before October 258.13 1 in 2000 and each year thereafter, a budget showing for the 258.14 following calendar year or other fiscal year determined by the 258.15 board, sometimes referred to in sections 1 to 19 as the budget 258.16 year, estimated receipts of money from all sources, including 258.17 but not limited to payments by each local governmental unit, 258.18 federal or state grants, taxes on property, and funds on hand at 258.19 the beginning of the year, and estimated expenditures for: 258.20 (1) costs of operation, administration, and maintenance of 258.21 the district disposal system; 258.22 (2) cost of acquisition and betterment of the district 258.23 disposal system; and 258.24 (3) debt service, including principal and interest, on 258.25 general obligation bonds and certificates issued pursuant to 258.26 section 13, and any money judgments entered by a court of 258.27 competent jurisdiction. 258.28 (b) Expenditures within these general categories, and any 258.29 other categories as the board may from time to time determine, 258.30 must be itemized in detail as the board prescribes. The board 258.31 and its officers, agents, and employees must not spend money for 258.32 any purpose other than debt service without having set forth the 258.33 expense in the budget nor in excess of the amount set forth in 258.34 the budget for it. No obligation to make an expenditure of the 258.35 above-mentioned type is enforceable except as the obligation of 258.36 the person or persons incurring it. The board may amend the 259.1 budget at any time by transferring from one purpose to another 259.2 any sums except money for debt service and bond proceeds or by 259.3 increasing expenditures in any amount by which actual cash 259.4 receipts during the budget year exceed the total amounts 259.5 designated in the original budget. The creation of any 259.6 obligation under section 13, or the receipt of any federal or 259.7 state grant is a sufficient budget designation of the proceeds 259.8 for the purpose for which it is authorized, and of the tax or 259.9 other revenue pledged to pay the obligation and interest on it, 259.10 whether or not specifically included in any annual budget. 259.11 Sec. 10. [ALLOCATION OF COSTS.] 259.12 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 259.13 estimated cost of administration, operation, maintenance, and 259.14 debt service of the district disposal system to be paid by the 259.15 board in each fiscal year and the estimated costs of acquisition 259.16 and betterment of the system that are to be paid during the year 259.17 from funds other than state or federal grants and bond proceeds 259.18 and all other previously unallocated payments made by the board 259.19 pursuant to sections 1 to 19 to be allocated in the fiscal year 259.20 are referred to as current costs and must be allocated by the 259.21 board as provided in subdivision 2 in the budget for that year. 259.22 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 259.23 costs must be allocated in the district on an equitable basis as 259.24 the board may determine by resolution to be in the best 259.25 interests of the district. The adoption or revision of any 259.26 method of allocation used by the board must be by the 259.27 affirmative vote of at least two-thirds of the members of the 259.28 board. 259.29 Sec. 11. [TAX LEVIES.] 259.30 To accomplish any duty imposed on it the board may, in 259.31 addition to the powers granted in sections 1 to 19 and in any 259.32 other law or charter, exercise the powers granted any 259.33 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 259.34 sections 115.46, 444.075, and 471.59, with respect to the area 259.35 in the district. The board may levy taxes upon all taxable 259.36 property in the district for all or a part of the amount payable 260.1 to the board, pursuant to section 10, to be assessed and 260.2 extended as a tax upon that taxable property by the county 260.3 auditor for the next calendar year, free from any limit of rate 260.4 or amount imposed by law or charter. The tax must be collected 260.5 and remitted in the same manner as other general taxes. 260.6 Sec. 12. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 260.7 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 260.8 PROJECT.] Before the board orders any project involving the 260.9 acquisition or betterment of any interceptor or treatment works, 260.10 all or a part of the cost of which will be allocated pursuant to 260.11 section 10 as current costs, the board must hold a public 260.12 hearing on the proposed project. The hearing must be held 260.13 following two publications in a newspaper having general 260.14 circulation in the district, stating the time and place of the 260.15 hearing, the general nature and location of the project, the 260.16 estimated total cost of acquisition and betterment, that portion 260.17 of costs estimated to be paid out of federal and state grants, 260.18 and that portion of costs estimated to be allocated. The 260.19 estimates must be best available at the time of the meeting and 260.20 if costs exceed the estimate, the project cannot proceed until 260.21 an additional public hearing is held, with notice as required at 260.22 the initial meeting. The two publications must be a week apart 260.23 and the hearing at least three days after the last publication. 260.24 Not less than 45 days before the hearing, notice of the hearing 260.25 must also be mailed to each clerk of all local governmental 260.26 units in the district, but failure to give mailed notice or any 260.27 defects in the notice does not invalidate the proceedings. The 260.28 project may include all or part of one or more interceptors or 260.29 treatment works. A hearing must not be held on a project unless 260.30 the project is within the area covered by the comprehensive plan 260.31 adopted by the board under section 5, except that the hearing 260.32 may be held simultaneously with a hearing on a comprehensive 260.33 plan. A hearing is not required with respect to a project, no 260.34 part of the costs of which are to be allocated as the current 260.35 costs of acquisition, betterment, and debt service. 260.36 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 261.1 board proposes to assess against benefited property within the 261.2 district all or any part of the allocable costs of the project 261.3 as provided in subdivision 5, the board shall, not less than two 261.4 weeks before the hearing provided for in subdivision 1, cause 261.5 mailed notice of the hearing to be given to the owner of each 261.6 parcel within the area proposed to be specially assessed and 261.7 shall also give two weeks' published notice of the hearing. The 261.8 notice of hearing must contain the same information provided in 261.9 the notice published by the board pursuant to subdivision 1, and 261.10 a description of the area proposed to be assessed. For the 261.11 purpose of giving mailed notice, owners are those shown to be on 261.12 the records of the county auditor or, in any county where tax 261.13 statements are mailed by the county treasurer, on the records of 261.14 the county treasurer; but other appropriate records may be used 261.15 for this purpose. For properties that are tax exempt or subject 261.16 to taxation on a gross earnings basis and not listed on the 261.17 records of the county auditor or the county treasurer, the 261.18 owners must be ascertained by any practicable means and mailed 261.19 notice given them as herein provided. Failure to give mailed 261.20 notice or any defects in the notice does not invalidate the 261.21 proceedings of the board. 261.22 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 261.23 adoption of the resolution calling for a hearing under this 261.24 section, the board shall secure from the district engineer or 261.25 some other competent person of the board's selection a report 261.26 advising it in a preliminary way as to whether the proposed 261.27 project is feasible and whether it should be made as proposed or 261.28 in connection with some other project and the estimated costs of 261.29 the project as recommended. No error or omission in the report 261.30 invalidates the proceeding. The board may also take other steps 261.31 before the hearing, as will in its judgment provide helpful 261.32 information in determining the desirability and feasibility of 261.33 the project, including but not limited to preparation of plans 261.34 and specifications and advertisement for bids on them. The 261.35 hearing may be adjourned from time to time and a resolution 261.36 ordering the project may be adopted at any time within six 262.1 months after the date of hearing. In ordering the project the 262.2 board may reduce but not increase the extent of the project as 262.3 stated in the notice of hearing and shall find that the project 262.4 as ordered is in accordance with the comprehensive plan and 262.5 program adopted by the board pursuant to section 5. 262.6 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 262.7 adopted by the affirmative vote of not less than two-thirds of 262.8 its members determines that an emergency exists requiring the 262.9 immediate purchase of materials or supplies or the making of 262.10 emergency repairs, it may order the purchase of those supplies 262.11 and materials and the making of the repairs before any hearing 262.12 required under this section. The board must set as early a date 262.13 as practicable for the hearing at the time it declares the 262.14 emergency. All other provisions of this section must be 262.15 followed in giving notice of and conducting the hearing. 262.16 Nothing in this subdivision prevents the board or its agents 262.17 from purchasing maintenance supplies or incurring maintenance 262.18 costs without regard to the requirements of this section. 262.19 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 262.20 board may specially assess all or any part of the costs of 262.21 acquisition and betterment as provided in this subdivision, of 262.22 any project ordered under this section. The special assessments 262.23 must be levied in accordance with Minnesota Statutes, sections 262.24 429.051 to 429.081, except as otherwise provided in this 262.25 subdivision. No other provisions of Minnesota Statutes, chapter 262.26 429, apply. For purposes of levying the special assessments, 262.27 the hearing on the project required in subdivision 1 serves as 262.28 the hearing on the making of the original improvement provided 262.29 for by Minnesota Statutes, section 429.051. The area assessed 262.30 may be less than but may not exceed the area proposed to be 262.31 assessed as stated in the notice of hearing on the project 262.32 provided for in subdivision 2. 262.33 Sec. 13. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 262.34 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 262.35 INDEBTEDNESS.] At any time after adoption of its annual budget 262.36 and in anticipation of the collection of tax and other revenues 263.1 estimated and set forth by the board in the budget, except in 263.2 the case of deficiency taxes levied under this subdivision and 263.3 taxes levied for the payment of certificates issued under 263.4 subdivision 2, the board may, by resolution, authorize the 263.5 issuance, negotiation, and sale, in accordance with subdivision 263.6 4 in the form and manner and upon terms it determines, of its 263.7 negotiable general obligation certificates of indebtedness in 263.8 aggregate principal amounts not exceeding 50 percent of the 263.9 total amount of tax collections and other revenues, and maturing 263.10 not later than three months after the close of the budget year 263.11 in which issued. The proceeds of the sale of the certificates 263.12 must be used solely for the purposes for which the tax 263.13 collections and other revenues are to be expended under the 263.14 budget. 263.15 All the tax collections and other revenues included in the 263.16 budget for the budget year, after the expenditure of the tax 263.17 collections and other revenues in accordance with the budget, 263.18 must be irrevocably pledged and appropriated to a special fund 263.19 to pay the principal and interest on the certificates when due. 263.20 If for any reason the tax collections and other revenues are 263.21 insufficient to pay the certificates and interest when due, the 263.22 board shall levy a tax in the amount of the deficiency on all 263.23 taxable property in the district and shall appropriate this 263.24 amount when received to the special fund. 263.25 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 263.26 any budget year the receipts of tax and other revenues should 263.27 for some unforeseen cause become insufficient to pay the board's 263.28 current expenses, or if any public emergency should subject it 263.29 to the necessity of making extraordinary expenditures, the board 263.30 may by resolution authorize the issuance, negotiation, and sale, 263.31 in accordance with subdivision 4 in the form and manner and upon 263.32 the terms and conditions it determines, of its negotiable 263.33 general obligation certificates of indebtedness in an amount 263.34 sufficient to meet the deficiency. The board shall levy on all 263.35 taxable property in the district a tax sufficient to pay the 263.36 certificates and interest on the certificates and shall 264.1 appropriate all collections of the tax to a special fund created 264.2 for the payment of the certificates and the interest on them. 264.3 Certificates issued under this subdivision mature not later than 264.4 April 1 in the year following the year in which the tax is 264.5 collectible. 264.6 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 264.7 resolution authorize the issuance of general obligation bonds 264.8 for the acquisition or betterment of any part of the district 264.9 disposal system, including but without limitation the payment of 264.10 interest during construction and for a reasonable period 264.11 thereafter, or for the refunding of outstanding bonds, 264.12 certificates of indebtedness, or judgments. The board shall 264.13 pledge its full faith and credit and taxing power for the 264.14 payment of the bonds and shall provide for the issuance and sale 264.15 and for the security of the bonds in the manner provided in 264.16 Minnesota Statutes, chapter 475. The board has the same powers 264.17 and duties as a municipality issuing bonds under that law, 264.18 except that no election is required and the debt limitations of 264.19 Minnesota Statutes, chapter 475, do not apply to the bonds. The 264.20 board may also pledge for the payment of the bonds and deduct 264.21 from the amount of any tax levy required under Minnesota 264.22 Statutes, section 475.61, subdivision 1, and any revenues 264.23 receivable under any state and federal grants anticipated by the 264.24 board and may covenant to refund the bonds if and when and to 264.25 the extent that for any reason the revenues, together with other 264.26 funds available and appropriated for that purpose, are not 264.27 sufficient to pay all principal and interest due or about to 264.28 become due, provided that the revenues have not been anticipated 264.29 by the issuance of certificates under subdivision 1. 264.30 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 264.31 Certificates issued under subdivisions 1 and 2 may be issued and 264.32 sold by negotiation, without public sale, and may be sold at a 264.33 price equal to the percentage of the par value of the 264.34 certificates, plus accrued interest, and bearing interest at the 264.35 rate determined by the board. An election is not required to 264.36 authorize the issuance of the certificates. The certificates 265.1 must bear the same rate of interest after maturity as before and 265.2 the full faith and credit and taxing power of the board must be 265.3 pledged to the payment of the certificates. 265.4 Sec. 14. [DEPOSITORIES.] 265.5 The board shall designate one or more national or state 265.6 banks, or trust companies authorized to do a banking business, 265.7 as official depositories for money of the board, and shall 265.8 require the treasurer to deposit all or a part of the money in 265.9 those institutions. The designation must be in writing and set 265.10 forth all the terms and conditions upon which the deposits are 265.11 made, and must be signed by the chair and treasurer and made a 265.12 part of the minutes of the board. 265.13 Sec. 15. [MONEY, ACCOUNTS, AND INVESTMENTS.] 265.14 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 265.15 by the board must be deposited or invested by the treasurer and 265.16 disposed of as the board may direct in accordance with its 265.17 budget; provided that any money that has been pledged or 265.18 dedicated by the board to the payment of obligations or interest 265.19 on the obligations or expenses incident thereto, or for any 265.20 other specific purpose authorized by law, must be paid by the 265.21 treasurer into the fund to which it has been pledged. 265.22 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 265.23 shall establish funds and accounts as may be necessary or 265.24 convenient to handle the receipts and disbursements of the board 265.25 in an orderly fashion. 265.26 (b) The funds and accounts must be audited annually by a 265.27 certified public accountant at the expense of the district. 265.28 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 265.29 those funds and accounts may be deposited in the official 265.30 depositories of the board or invested as provided in this 265.31 subdivision. Any amount not currently needed or required by law 265.32 to be kept in cash on deposit may be invested in obligations 265.33 authorized for the investment of municipal sinking funds by 265.34 Minnesota Statutes, section 475.66. The money may also be held 265.35 under certificates of deposit issued by any official depository 265.36 of the board. 266.1 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 266.2 issued by the board for the acquisition and betterment of the 266.3 district disposal system, and the use, other than investment, of 266.4 all money on hand in any sinking fund or funds of the board, is 266.5 governed by the provisions of Minnesota Statutes, chapter 475, 266.6 the provisions of sections 1 to 19, and the provisions of 266.7 resolutions authorizing the issuance of the bonds. When 266.8 received, the bond proceeds must be transferred to the treasurer 266.9 of the board for safekeeping, investment, and payment of the 266.10 costs for which they were issued. 266.11 Subd. 5. [AUDIT.] The board shall provide for and pay the 266.12 cost of an independent annual audit of its official books and 266.13 records by the state auditor or a public accountant authorized 266.14 to perform that function under Minnesota Statutes, chapter 6. 266.15 Sec. 16. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 266.16 OUTSIDE THE JURISDICTION OF THE BOARD.] 266.17 (a) The board may contract with the United States or any 266.18 agency of the federal government, any state or its agency, or 266.19 any municipal or public corporation, governmental subdivision or 266.20 agency or political subdivision in any state, outside the 266.21 jurisdiction of the board, for furnishing services to those 266.22 entities, including but not limited to planning for and the 266.23 acquisition, betterment, operation, administration, and 266.24 maintenance of any or all interceptors, treatment works, and 266.25 local water and sanitary sewer facilities. The board may 266.26 include as one of the terms of the contract that the entity must 266.27 pay to the board an amount agreed upon as a reasonable estimate 266.28 of the proportionate share properly allocable to the entity of 266.29 costs of acquisition, betterment, and debt service previously 266.30 allocated in the district. When payments are made by entities 266.31 to the board, they must be applied in reduction of the total 266.32 amount of costs thereafter allocated in the district, on an 266.33 equitable basis as the board deems to be in the best interests 266.34 of the district, applying so far as practicable and appropriate 266.35 the criteria set forth in section 10, subdivision 2. A 266.36 municipality in the state of Minnesota may enter into a contract 267.1 and perform all acts and things required as a condition or 267.2 consideration therefor consistent with the purposes of sections 267.3 1 to 19, whether or not included among the powers otherwise 267.4 granted to the municipality by law or charter. 267.5 (b) The board shall contract with a qualified entity to 267.6 make necessary inspections of the district facilities, and to 267.7 otherwise process or assist in processing any of the work of the 267.8 district. 267.9 Sec. 17. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 267.10 AND EQUIPMENT.] 267.11 When the board orders a project involving the acquisition 267.12 or betterment of a part of the district disposal system, it 267.13 shall cause plans and specifications of the project to be made, 267.14 or if previously made, to be modified, if necessary, and to be 267.15 approved by the agency if required, and after any required 267.16 approval by the agency, one or more contracts for work and 267.17 materials called for by the plans and specification may be 267.18 awarded as provided in Minnesota Statutes, section 471.345. 267.19 Sec. 18. [PROPERTY EXEMPT FROM TAXATION.] 267.20 Any properties, real or personal, owned, leased, 267.21 controlled, used, or occupied by the water and sanitary sewer 267.22 board for any purpose under sections 1 to 19 are declared to be 267.23 acquired, owned, leased, controlled, used, and occupied for 267.24 public, governmental, and municipal purposes, and are exempt 267.25 from taxation by the state or any political subdivision of the 267.26 state. The properties are subject to special assessments levied 267.27 by a political subdivision for a local improvement in amounts 267.28 proportionate to and not exceeding the special benefit received 267.29 by the properties from the improvement. 267.30 Sec. 19. [RELATION TO EXISTING LAWS.] 267.31 Sections 1 to 19 must be given full effect notwithstanding 267.32 the provisions of any law or charter inconsistent with sections 267.33 1 to 19. The powers conferred on the board under sections 1 to 267.34 19 do not in any way diminish or supersede the powers conferred 267.35 on the agency by Minnesota Statutes, chapters 115 to 116. 267.36 Sec. 20. [BANNING JUNCTION AREA WATER AND SANITARY SEWER 268.1 DISTRICT; DEFINITIONS.] 268.2 Subdivision 1. [APPLICATION.] For the purposes of sections 268.3 20 to 38, the terms defined in this section have the meanings 268.4 given them. 268.5 Subd. 2. [DISTRICT.] "Banning Junction area water and 268.6 sanitary sewer district" and "district" mean the area over which 268.7 the Banning Junction area water and sanitary sewer board has 268.8 jurisdiction, including the town of Finlayson and the city of 268.9 Finlayson in Pine county and Banning state park, but only that 268.10 part of the township described in the comprehensive plan adopted 268.11 by the board pursuant to section 24. 268.12 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 268.13 "board" means the Banning Junction area water and sanitary sewer 268.14 board established for the district as provided in subdivision 2. 268.15 Subd. 4. [PERSON.] "Person" means an individual, 268.16 partnership, corporation, limited liability company, 268.17 cooperative, or other organization or entity, public or private. 268.18 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 268.19 units" or "governmental units" means the town of Finlayson, the 268.20 department of natural resources, and the city of Finlayson. 268.21 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 268.22 "betterment" have the meanings given in Minnesota Statutes, 268.23 chapter 475. 268.24 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 268.25 control agency created in Minnesota Statutes, chapter 116. 268.26 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 268.27 water-carried waste products from whatever sources derived, 268.28 together with any groundwater infiltration and surface water as 268.29 may be present. 268.30 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 268.31 water" and "sewer system" have the meanings given in Minnesota 268.32 Statutes, section 115.01. 268.33 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 268.34 works" and "disposal system" have the meanings given in 268.35 Minnesota Statutes, section 115.01. 268.36 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 269.1 its necessary appurtenances, including but not limited to mains, 269.2 pumping stations, and sewage flow-regulating and -measuring 269.3 stations, that is: 269.4 (1) designed for or used to conduct sewage originating in 269.5 more than one local governmental unit; 269.6 (2) designed or used to conduct all or substantially all 269.7 the sewage originating in a single local governmental unit from 269.8 a point of collection in that unit to an interceptor or 269.9 treatment works outside that unit; or 269.10 (3) determined by the board to be a major collector of 269.11 sewage used or designed to serve a substantial area in the 269.12 district. 269.13 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 269.14 system" means any and all interceptors or treatment works owned, 269.15 constructed, or operated by the board unless designated by the 269.16 board as local water and sanitary sewer facilities. 269.17 Subd. 13. [MUNICIPALITY.] "Municipality" means any home 269.18 rule charter or statutory city or town. 269.19 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 269.20 betterment" and "costs of acquisition and betterment" mean all 269.21 acquisition and betterment expenses permitted to be financed out 269.22 of stopped bond proceeds issued in accordance with section 32, 269.23 whether or not the expenses are in fact financed out of the bond 269.24 proceeds. 269.25 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 269.26 betterment, and debt service" means interest and principal 269.27 estimated to be due during the budget year on bonds issued to 269.28 finance said acquisition and betterment and all other costs of 269.29 acquisition and betterment estimated to be paid during the year 269.30 from funds other than bond proceeds and federal or state grants. 269.31 Subd. 16. [RESIDENT.] "Resident" means the owner of a 269.32 dwelling located in the district and receiving water or sewer 269.33 service. 269.34 Sec. 21. [WATER AND SANITARY SEWER BOARD.] 269.35 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 269.36 district is established for the town of Finlayson, for the 270.1 Banning state park, under the jurisdiction of the Minnesota 270.2 department of natural resources, and for the city of Finlayson 270.3 in Pine county, to be known as the Banning Junction area water 270.4 and sanitary sewer district. The water and sewer district is 270.5 under the control and management of the Banning Junction area 270.6 water and sanitary sewer board. The board is established as a 270.7 public corporation and political subdivision of the state with 270.8 perpetual succession and all the rights, powers, privileges, 270.9 immunities, and duties that may be validly granted to or imposed 270.10 upon a municipal corporation, as provided in sections 20 to 38. 270.11 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 270.12 five members selected as follows: the town board shall meet to 270.13 appoint three members, one of whom shall be an elected township 270.14 officer, and two of whom shall be persons served by the system, 270.15 the city shall appoint one member, and the department of natural 270.16 resources shall appoint one member to the water and sanitary 270.17 sewer board and each board member shall have one vote. The 270.18 first terms must be as follows: one for one year, two for two 270.19 years, and two for three years, fixed by lot at the district's 270.20 first meeting. Thereafter, all terms are for three years. 270.21 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 270.22 must be selected as provided in subdivision 2 within 60 days 270.23 after sections 20 to 38 become effective. The successor to each 270.24 board member must be selected at any time within 60 days before 270.25 the expiration of the member's term in the same manner as the 270.26 predecessor was selected. A vacancy on the board must be filled 270.27 within 60 days after it occurs. 270.28 Subd. 4. [VACANCIES.] If the office of a board member 270.29 becomes vacant, the vacancy must be filled for the unexpired 270.30 term in the manner provided for selection of the member who 270.31 vacated the office. The office is deemed vacant under the 270.32 conditions specified in Minnesota Statutes, section 351.02. 270.33 Subd. 5. [REMOVAL.] A board member may be removed by the 270.34 unanimous vote of the governing body appointing the member, with 270.35 or without cause, or for malfeasance or nonfeasance in the 270.36 performance of official duties as provided by Minnesota 271.1 Statutes, sections 351.14 to 351.23. 271.2 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 271.3 certificate of selection of every board member selected under 271.4 subdivision 2 stating the term for which selected, must be made 271.5 by the respective town clerks, city administrator, and by the 271.6 commissioner of natural resources. The certificates, with the 271.7 approval appended by other authority, if required, must be filed 271.8 with the secretary of state. Counterparts thereof must be 271.9 furnished to the board member and the secretary of the board. 271.10 Each member shall qualify by taking and subscribing the oath of 271.11 office prescribed by the Minnesota Constitution, article V, 271.12 section 6. The oath, duly certified by the official 271.13 administering the same, must be filed with the secretary of 271.14 state and the secretary of the board. 271.15 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 271.16 except the chair, must be paid a per diem compensation of $35 271.17 for meetings and for other services as are specifically 271.18 authorized by the board, not to exceed $1,000 in any one year. 271.19 The chair must be paid a per diem compensation of $45 for 271.20 meetings and for other services specifically authorized by the 271.21 board, not to exceed $1,500 in any one year. All members of the 271.22 board must be reimbursed for all reasonable and necessary 271.23 expenses actually incurred in the performance of duties. 271.24 Sec. 22. [GENERAL PROVISIONS FOR ORGANIZATION AND 271.25 OPERATION OF BOARD.] 271.26 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; SEAL.] 271.27 After the selection and qualification of all board members, they 271.28 shall meet to organize the board at the call of any two board 271.29 members, upon seven days' notice by registered mail to the 271.30 remaining board members, at a time and place within the district 271.31 specified in the notice. A majority of the members shall 271.32 constitute a quorum at that meeting and all other meetings of 271.33 the board, but a lesser number may meet and adjourn from time to 271.34 time and compel the attendance of absent members. At the first 271.35 meeting the board shall select its officers and conduct other 271.36 organizational business as may be necessary. Thereafter the 272.1 board shall meet regularly at the time and place that the board 272.2 designates by resolution. Special meetings may be held at any 272.3 time upon call of the chair or any two members, upon written 272.4 notice sent by mail to each member at least three days before 272.5 the meeting, or upon other notice as the board by resolution may 272.6 provide, or without notice if each member is present or files 272.7 with the secretary a written consent to the meeting either 272.8 before or after the meeting. Except as otherwise provided in 272.9 sections 20 to 38, any action within the authority of the board 272.10 may be taken by the affirmative vote of a majority of the board 272.11 and may be taken by regular or adjourned regular meeting or at a 272.12 duly held special meeting, but in any case only if a quorum is 272.13 present. Meetings of the board must be open to the public. The 272.14 board may adopt a seal, which must be officially and judicially 272.15 noticed, to authenticate instruments executed by its authority, 272.16 but omission of the seal does not affect the validity of any 272.17 instrument. 272.18 Subd. 2. [CHAIR.] The board shall elect a chair from its 272.19 membership. The term of the first chair of the board shall 272.20 expire on January 1, 2001, and the terms of successor chairs 272.21 expire on January 1 of each succeeding year. The chair shall 272.22 preside at all meetings of the board, if present, and shall 272.23 perform all other duties and functions usually incumbent upon 272.24 such an officer, and all administrative functions assigned to 272.25 the chair by the board. The board shall elect a vice-chair from 272.26 its membership to act for the chair during temporary absence or 272.27 disability. 272.28 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 272.29 a person or persons who may, but need not be, a member or 272.30 members of the board, to act as its secretary and treasurer. 272.31 The secretary and treasurer shall hold office at the pleasure of 272.32 the board, subject to the terms of any contract of employment 272.33 that the board may enter into with the secretary or treasurer. 272.34 The secretary shall record the minutes of all meetings of the 272.35 board, and be the custodian of all books and records of the 272.36 board except those that the board entrusts to the custody of a 273.1 designated employee. The treasurer is the custodian of all 273.2 money received by the board except as the board otherwise 273.3 entrusts to the custody of a designated employee. The board may 273.4 appoint a deputy to perform any and all functions of either the 273.5 secretary or the treasurer. A secretary or treasurer who is not 273.6 a member of the board or a deputy of either does not have the 273.7 right to vote. 273.8 Subd. 4. [EXECUTIVE DIRECTOR.] The board may appoint an 273.9 executive director, selected solely upon the basis of training, 273.10 experience, and other qualifications and who shall serve at the 273.11 pleasure of the board and at a compensation to be determined by 273.12 the board. The executive director need not be a resident of the 273.13 district. The executive director may also be selected by the 273.14 board to serve as either secretary or treasurer, or both, of the 273.15 board. The executive director shall attend all meetings of the 273.16 board, but shall not vote, and shall have the following powers 273.17 and duties: 273.18 (1) to see that all resolutions, rules, regulations, or 273.19 orders of the board are enforced; 273.20 (2) to appoint and remove, upon the basis of merit and 273.21 fitness, all subordinate officers and regular employees of the 273.22 board except the secretary and the treasurer and their deputies; 273.23 (3) to present to the board plans, studies, and other 273.24 reports prepared for board purposes and recommend to the board 273.25 for adoption the measures the executive director deems necessary 273.26 to enforce or carry out the powers and the duties of the board, 273.27 or the efficient administration of the affairs of the board; 273.28 (4) to keep the board fully advised as to its financial 273.29 condition, and to prepare and submit to the board and to the 273.30 governing bodies of the local governmental units, the board's 273.31 annual budget and other financial information the board may 273.32 request; 273.33 (5) to recommend to the board for adoption rules and 273.34 regulations the executive director deems necessary for the 273.35 efficient operation of the district disposal system; and 273.36 (6) to perform other duties prescribed by the board. 274.1 Subd. 5. [PUBLIC EMPLOYEES.] The executive director and 274.2 other persons employed by the district are public employees and 274.3 have all the rights and duties conferred on public employees 274.4 under Minnesota Statutes, sections 179A.01 to 179A.25. The 274.5 board may elect to have employees become members of either the 274.6 public employees retirement association or the Minnesota state 274.7 retirement system. The compensation and conditions of 274.8 employment of the employees must be governed by rules applicable 274.9 to state employees in the classified service and to the 274.10 provisions of Minnesota Statutes, chapter 15A. 274.11 Subd. 6. [PROCEDURES.] The board shall adopt resolutions 274.12 or bylaws establishing procedures for board action, personnel 274.13 administration, keeping records, approving claims, authorizing 274.14 or making disbursements, safekeeping funds, and auditing all 274.15 financial operations of the board. 274.16 Subd. 7. [SURETY BONDS AND INSURANCE.] The board may 274.17 procure surety bonds for its officers and employees, in amounts 274.18 deemed necessary to ensure proper performance of their duties 274.19 and proper accounting for funds in their custody. It may 274.20 procure insurance against risks to property and liability of the 274.21 board and its officers, agents, and employees for personal 274.22 injuries or death and property damage and destruction, in 274.23 amounts deemed necessary or desirable, with the force and effect 274.24 stated in Minnesota Statutes, chapter 466. 274.25 Sec. 23. [GENERAL POWERS OF BOARD.] 274.26 Subdivision 1. [SCOPE.] The board has all powers necessary 274.27 or convenient to discharge the duties imposed upon it by law. 274.28 The powers include those specified in this section, but the 274.29 express grant or enumeration of powers does not limit the 274.30 generality or scope of the grant of powers contained in this 274.31 subdivision. 274.32 Subd. 2. [SUIT.] The board may sue or be sued. 274.33 Subd. 3. [CONTRACT.] The board may enter into any contract 274.34 necessary or proper for the exercise of its powers or the 274.35 accomplishment of its purposes. 274.36 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 275.1 gifts, apply for and accept grants or loans of money or other 275.2 property from the United States, the state, or any person for 275.3 any of its purposes, enter into any agreement required in 275.4 connection with them, and hold, use, and dispose of the money or 275.5 property in accordance with the terms of the gift, grant, loan, 275.6 or agreement relating to it. With respect to loans or grants of 275.7 funds or real or personal property or other assistance from any 275.8 state or federal government or its agency or instrumentality, 275.9 the board may contract to do and perform all acts and things 275.10 required as a condition or consideration for the gift, grant, or 275.11 loan pursuant to state or federal law or regulations, whether or 275.12 not included among the powers expressly granted to the board in 275.13 sections 20 to 38. 275.14 Subd. 5. [COOPERATIVE ACTION.] The board may act under 275.15 Minnesota Statutes, section 471.59, or any other appropriate law 275.16 providing for joint or cooperative action between governmental 275.17 units. 275.18 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 275.19 conduct research studies and programs, collect and analyze data, 275.20 prepare reports, maps, charts, and tables, and conduct all 275.21 necessary hearings and investigations in connection with the 275.22 design, construction, and operation of the district disposal 275.23 system. 275.24 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 275.25 it deems advisable, persons or firms performing engineering, 275.26 legal, or other services of a professional nature; require any 275.27 employee to obtain and file with it an individual bond or 275.28 fidelity insurance policy; and procure insurance in amounts it 275.29 deems necessary against liability of the board or its officers 275.30 or both, for personal injury or death and property damage or 275.31 destruction, with the force and effect stated in Minnesota 275.32 Statutes, chapter 466, and against risks of damage to or 275.33 destruction of any of its facilities, equipment, or other 275.34 property as it deems necessary. 275.35 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 275.36 by purchase, lease, condemnation, gift, or grant, any real or 276.1 personal property including positive and negative easements and 276.2 water and air rights, and it may construct, enlarge, improve, 276.3 replace, repair, maintain, and operate any interceptor, 276.4 treatment works, or water facility determined to be necessary or 276.5 convenient for the collection and disposal of sewage in the 276.6 district. Any local governmental unit and the commissioners of 276.7 transportation and natural resources are authorized to convey to 276.8 or permit the use of any of the above-mentioned facilities owned 276.9 or controlled by it, by the board, subject to the rights of the 276.10 holders of any bonds issued with respect to those facilities, 276.11 with or without compensation, without an election or approval by 276.12 any other governmental unit or agency. All powers conferred by 276.13 this subdivision may be exercised both within or without the 276.14 district as may be necessary for the exercise by the board of 276.15 its powers or the accomplishment of its purposes. The board may 276.16 hold, lease, convey, or otherwise dispose of the above-mentioned 276.17 property for its purposes upon the terms and in the manner it 276.18 deems advisable. Unless otherwise provided, the right to 276.19 acquire lands and property rights by condemnation may be 276.20 exercised only in accordance with Minnesota Statutes, sections 276.21 117.011 to 117.232, and shall apply to any property or interest 276.22 in the property owned by any local governmental unit. No 276.23 property devoted to an actual public use at the time, or held to 276.24 be devoted to such a use within a reasonable time, shall be so 276.25 acquired unless a court of competent jurisdiction determines 276.26 that the use proposed by the board is paramount to the existing 276.27 use. Except in the case of property in actual public use, the 276.28 board may take possession of any property on which condemnation 276.29 proceedings have been commenced at any time after the issuance 276.30 of a court order appointing commissioners for its condemnation. 276.31 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 276.32 construct or maintain its systems or facilities in, along, on, 276.33 under, over, or through public waters, streets, bridges, 276.34 viaducts, and other public rights-of-way without first obtaining 276.35 a franchise from a county or municipality having jurisdiction 276.36 over them. However, the facilities must be constructed and 277.1 maintained in accordance with the ordinances and resolutions of 277.2 the county or municipality relating to constructing, installing, 277.3 and maintaining similar facilities on public properties and must 277.4 not unnecessarily obstruct the public use of those rights-of-way. 277.5 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 277.6 lease, or otherwise dispose of any real or personal property 277.7 acquired by it which is no longer required for accomplishment of 277.8 its purposes. The property may be sold in the manner provided 277.9 by Minnesota Statutes, section 469.065, insofar as practical. 277.10 The board may give notice of sale as it deems appropriate. When 277.11 the board determines that any property or any part of the 277.12 district disposal system acquired from a local governmental unit 277.13 without compensation is no longer required but is required as a 277.14 local facility by the governmental unit from which it was 277.15 acquired, the board may by resolution transfer it to that 277.16 governmental unit. 277.17 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 277.18 board may contract with the United States or any agency thereof, 277.19 any state or agency thereof, or any regional public planning 277.20 body in the state with jurisdiction over any part of the 277.21 district, or any other municipal or public corporation, or 277.22 governmental subdivision or agency or political subdivision in 277.23 any state, for the joint use of any facility owned by the board 277.24 or such entity, for the operation by that entity of any system 277.25 or facility of the board, or for the performance on the board's 277.26 behalf of any service, including but not limited to planning, on 277.27 terms as may be agreed upon by the contracting parties. Unless 277.28 designated by the board as a local water and sanitary sewer 277.29 facility, any treatment works or interceptor jointly used, or 277.30 operated on behalf of the board, as provided in this 277.31 subdivision, is deemed to be operated by the board for purposes 277.32 of including those facilities in the district disposal system. 277.33 Sec. 24. [COMPREHENSIVE PLAN.] 277.34 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 277.35 adopt a comprehensive plan for the collection, treatment, and 277.36 disposal of sewage in the district for a designated period the 278.1 board deems proper and reasonable. The board shall prepare and 278.2 adopt subsequent comprehensive plans for the collection, 278.3 treatment, and disposal of sewage in the district for each 278.4 succeeding designated period as the board deems proper and 278.5 reasonable. The first plan, as modified by the board, and any 278.6 subsequent plan shall take into account the preservation and 278.7 best and most economic use of water and other natural resources 278.8 in the area; the preservation, use, and potential for use of 278.9 lands adjoining waters of the state to be used for the disposal 278.10 of sewage; and the impact the disposal system will have on 278.11 present and future land use in the area affected. The plans 278.12 shall include the general location of needed interceptors and 278.13 treatment works, a description of the area that is to be served 278.14 by the various interceptors and treatment works, a long-range 278.15 capital improvements program, and any other details as the board 278.16 deems appropriate. In developing the plans, the board shall 278.17 consult with persons designated for the purpose by governing 278.18 bodies of any governmental unit within the district to represent 278.19 the entities and shall consider the data, resources, and input 278.20 offered to the board by the entities and any planning agency 278.21 acting on behalf of one or more of the entities. Each plan, 278.22 when adopted, must be followed in the district and may be 278.23 revised as often as the board deems necessary. 278.24 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 278.25 any subsequent comprehensive plan, the board shall hold a public 278.26 hearing on the proposed plan at a time and place in the district 278.27 that it selects. The hearing may be continued from time to 278.28 time. Not less than 45 days before the hearing, the board shall 278.29 publish notice of the hearing in a newspaper having general 278.30 circulation in the district, stating the date, time, and place 278.31 of the hearing, and the place where the proposed plan may be 278.32 examined by any interested person. At the hearing, all 278.33 interested persons must be permitted to present their views on 278.34 the plan. 278.35 Subd. 3. [GOVERNMENTAL UNIT PLANS AND PROGRAMS; 278.36 COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's 279.1 plan is adopted, no construction project involving the 279.2 construction of new sewers or other disposal facilities may be 279.3 undertaken by the local governmental unit unless its governing 279.4 body shall first find the project to be in accordance with the 279.5 governmental unit's comprehensive plan and program as approved 279.6 by the board. Before approval by the board of the comprehensive 279.7 plan and program of any local governmental unit in the district, 279.8 no water and sanitary sewer construction project may be 279.9 undertaken by the governmental unit unless approval of the 279.10 project is first secured from the board as to those features of 279.11 the project affecting the board's responsibilities as determined 279.12 by the board. 279.13 Sec. 25. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 279.14 ASSESSMENTS.] 279.15 The Banning Junction area water and sanitary sewer board, 279.16 in order to implement the powers granted under sections 20 to 38 279.17 to establish, maintain, and administer the Banning Junction area 279.18 water and sanitary sewer district, may issue obligations and 279.19 impose special assessments against benefited property within the 279.20 limits of the district benefited by facilities constructed under 279.21 sections 20 to 38 in the manner provided for local governments 279.22 by Minnesota Statutes, chapter 429. 279.23 Sec. 26. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 279.24 The authority of the water and sanitary sewer board to 279.25 establish water or sewer or combined water and sewer systems 279.26 under this section extends to areas within the Banning Junction 279.27 area water and sanitary sewer district organized into cities 279.28 when requested by resolution of the governing body of the 279.29 affected city or when ordered by the Minnesota pollution control 279.30 agency after notice and hearing. For the purpose of any 279.31 petition filed or special assessment levied with respect to any 279.32 system, the entire area to be served within a city must be 279.33 treated as if it were owned by a single person, and the 279.34 governing body shall exercise all the rights and be subject to 279.35 all the duties of an owner of the area, and shall have power to 279.36 provide for the payment of all special assessments and other 280.1 charges imposed upon the area with respect to the system by the 280.2 appropriation of money, the collection of service charges, or 280.3 the levy of taxes, which shall be subject to no limitation of 280.4 rate or amount. 280.5 Sec. 27. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 280.6 Subdivision 1. [POWERS.] In addition to all other powers 280.7 conferred upon the board in sections 20 to 38, it has the powers 280.8 specified in this section. 280.9 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 280.10 discharge the effluent from any treatment works operated by it 280.11 into any waters of the state, subject to approval of the agency 280.12 if required and in accordance with any effluent or water quality 280.13 standards lawfully adopted by the agency, any interstate agency, 280.14 or any federal agency having jurisdiction. 280.15 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 280.16 require any person or local governmental unit to provide for the 280.17 discharge of any sewage, directly or indirectly, into the 280.18 district disposal system, or to connect any disposal system or a 280.19 part of it with the district disposal system wherever reasonable 280.20 opportunity for connection is provided; may regulate the manner 280.21 in which the connections are made; may require any person or 280.22 local governmental unit discharging sewage into the disposal 280.23 system to provide preliminary treatment for it; may prohibit the 280.24 discharge into the district disposal system of any substance 280.25 that it determines will or may be harmful to the system or any 280.26 persons operating it; and may require any local governmental 280.27 unit to discontinue the acquisition, betterment, or operation of 280.28 any facility for the unit's disposal system wherever and so far 280.29 as adequate service is or will be provided by the district 280.30 disposal system. 280.31 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 280.32 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 280.33 cost-recovery techniques imposed on persons discharging sewage 280.34 directly or indirectly into the district disposal system must 280.35 comply with applicable state and federal law, including state 280.36 and federal regulations governing grant applications. 281.1 Sec. 28. [BUDGET.] 281.2 The board shall prepare and adopt, on or before October 1 281.3 in 1999 and each year thereafter, a budget showing for the 281.4 following calendar year or other fiscal year determined by the 281.5 board, sometimes referred to in sections 20 to 38 as the budget 281.6 year, estimated receipts of money from all sources, including 281.7 but not limited to payments by each local governmental unit, 281.8 federal or state grants, taxes on property, and funds on hand at 281.9 the beginning of the year, and estimated expenditures for: 281.10 (1) costs of operation, administration, and maintenance of 281.11 the district disposal system; 281.12 (2) cost of acquisition and betterment of the district 281.13 disposal system; and 281.14 (3) debt service, including principal and interest, on 281.15 general obligation bonds and certificates issued pursuant to 281.16 section 32, and any money judgments entered by a court of 281.17 competent jurisdiction. Expenditures within these general 281.18 categories, and any other categories as the board may from time 281.19 to time determine, must be itemized in detail as the board 281.20 prescribes. The board and its officers, agents, and employees 281.21 shall not spend money for any purpose other than debt service 281.22 without having set forth the expense in the budget nor in excess 281.23 of the amount set forth in the budget for it. No obligation to 281.24 make an expenditure of the above-mentioned type is enforceable 281.25 except as the obligation of the person or persons incurring it. 281.26 The board may amend the budget at any time by transferring from 281.27 one purpose to another any sums except money for debt service 281.28 and bond proceeds or by increasing expenditures in any amount by 281.29 which actual cash receipts during the budget year exceed the 281.30 total amounts designated in the original budget. The creation 281.31 of any obligation under section 32 or the receipt of any federal 281.32 or state grant is a sufficient budget designation of the 281.33 proceeds for the purpose for which it is authorized, and of the 281.34 tax or other revenue pledged to pay the obligation and interest 281.35 on it, whether or not specifically included in any annual budget. 281.36 Sec. 29. [ALLOCATION OF COSTS.] 282.1 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 282.2 estimated cost of administration, operation, maintenance, and 282.3 debt service of the district disposal system to be paid by the 282.4 board in each fiscal year and the estimated costs of acquisition 282.5 and betterment of the system that are to be paid during the year 282.6 from funds other than state or federal grants and bond proceeds 282.7 and all other previously unallocated payments made by the board 282.8 pursuant to sections 20 to 38 to be allocated in the fiscal year 282.9 are referred to as current costs and must be allocated by the 282.10 board as provided in subdivision 2 in the budget for that year. 282.11 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 282.12 costs must be allocated in the district on an equitable basis as 282.13 the board may determine by resolution to be in the best 282.14 interests of the district. The adoption or revision of any 282.15 method of allocation used by the board must be by the 282.16 affirmative vote of at least two-thirds of the members of the 282.17 board. 282.18 Sec. 30. [TAX LEVIES.] 282.19 To accomplish any duty imposed on it the board may, in 282.20 addition to the powers granted in sections 20 to 38 and in any 282.21 other law or charter, exercise the powers granted any 282.22 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 282.23 sections 115.46, 444.075, and 471.59, with respect to the area 282.24 in the district. The board may levy taxes upon all taxable 282.25 property in the district for all or a part of the amount payable 282.26 to the board, pursuant to section 29, to be assessed and 282.27 extended as a tax upon that taxable property by the county 282.28 auditor for the next calendar year, free from any limitation of 282.29 rate or amount imposed by law or charter. The tax must be 282.30 collected and remitted in the same manner as other general taxes. 282.31 Sec. 31. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 282.32 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 282.33 PROJECT.] Before the board orders any project involving the 282.34 acquisition or betterment of any interceptor or treatment works, 282.35 all or a part of the cost of which will be allocated pursuant to 282.36 section 29 as current costs, the board shall hold a public 283.1 hearing on the proposed project. The hearing must be held 283.2 following two publications in a newspaper having general 283.3 circulation in the district, stating the time and place of the 283.4 hearing, the general nature and location of the project, the 283.5 estimated total cost of acquisition and betterment, that portion 283.6 of costs estimated to be paid out of federal and state grants, 283.7 and that portion of costs estimated to be allocated. The 283.8 estimates must be best available at the time of the meeting and 283.9 if costs exceed the estimate, the project cannot proceed until 283.10 an additional public hearing is held, with notice as required at 283.11 the initial meeting. The two publications must be a week apart 283.12 and the hearing at least three days after the last publication. 283.13 Not less than 45 days before the hearing, notice of the hearing 283.14 must also be mailed to each clerk of all local governmental 283.15 units in the district, but failure to give mailed notice or any 283.16 defects in the notice does not invalidate the proceedings. The 283.17 project may include all or part of one or more interceptors or 283.18 treatment works. No hearing may be held on any project unless 283.19 the project is within the area covered by the comprehensive plan 283.20 adopted by the board pursuant to section 24 except that the 283.21 hearing may be held simultaneously with a hearing on a 283.22 comprehensive plan. A hearing is not required with respect to a 283.23 project, no part of the costs of which are to be allocated as 283.24 the current costs of acquisition, betterment, and debt service. 283.25 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 283.26 board proposes to assess against benefited property within the 283.27 district all or any part of the allocable costs of the project 283.28 as provided in subdivision 5, the board shall, not less than two 283.29 weeks before the hearing provided for in subdivision 1, cause 283.30 mailed notice of the hearing to be given to the owner of each 283.31 parcel within the area proposed to be specially assessed and 283.32 shall also give two weeks' published notice of the hearing. The 283.33 notice of hearing must contain the same information provided in 283.34 the notice published by the board pursuant to subdivision 1, and 283.35 a description of the area proposed to be assessed. For the 283.36 purpose of giving mailed notice, owners are those shown to be on 284.1 the records of the county auditor or, in any county where tax 284.2 statements are mailed by the county treasurer, on the records of 284.3 the county treasurer; but other appropriate records may be used 284.4 for this purpose. For properties that are tax exempt or subject 284.5 to taxation on a gross earnings basis and not listed on the 284.6 records of the county auditor or the county treasurer, the 284.7 owners must be ascertained by any practicable means and mailed 284.8 notice given them as herein provided. Failure to give mailed 284.9 notice or any defects in the notice does not invalidate the 284.10 proceedings of the board. 284.11 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 284.12 adoption of the resolution calling for a hearing under this 284.13 section, the board shall secure from the district engineer or 284.14 some other competent person of the board's selection a report 284.15 advising it in a preliminary way as to whether the proposed 284.16 project is feasible and whether it should be made as proposed or 284.17 in connection with some other project and the estimated costs of 284.18 the project as recommended. No error or omission in the report 284.19 invalidates the proceeding. The board may also take other steps 284.20 before the hearing, as will in its judgment provide helpful 284.21 information in determining the desirability and feasibility of 284.22 the project, including but not limited to preparation of plans 284.23 and specifications and advertisement for bids on them. The 284.24 hearing may be adjourned from time to time and a resolution 284.25 ordering the project may be adopted at any time within six 284.26 months after the date of hearing. In ordering the project the 284.27 board may reduce but not increase the extent of the project as 284.28 stated in the notice of hearing and shall find that the project 284.29 as ordered is in accordance with the comprehensive plan and 284.30 program adopted by the board pursuant to section 24. 284.31 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 284.32 adopted by the affirmative vote of not less than two-thirds of 284.33 its members determines that an emergency exists requiring the 284.34 immediate purchase of materials or supplies or the making of 284.35 emergency repairs, it may order the purchase of those supplies 284.36 and materials and the making of the repairs before any hearing 285.1 required under this section, provided that the board shall set 285.2 as early a date as practicable for the hearing at the time it 285.3 declares the emergency. All other provisions of this section 285.4 must be followed in giving notice of and conducting the 285.5 hearing. Nothing herein may be construed as preventing the 285.6 board or its agents from purchasing maintenance supplies or 285.7 incurring maintenance costs without regard to the requirements 285.8 of this section. 285.9 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 285.10 board may specially assess all or any part of the costs of 285.11 acquisition and betterment as herein provided, of any project 285.12 ordered pursuant to this section. The special assessments must 285.13 be levied in accordance with the provisions of Minnesota 285.14 Statutes, sections 429.051 to 429.081, except as otherwise 285.15 provided in this subdivision. No other provisions of Minnesota 285.16 Statutes, chapter 429, apply. For purposes of levying the 285.17 special assessments, the hearing on the project required in 285.18 subdivision 1 serves as the hearing on the making of the 285.19 original improvement provided for by Minnesota Statutes, section 285.20 429.051. The area assessed may be less than but may not exceed 285.21 the area proposed to be assessed as stated in the notice of 285.22 hearing on the project provided for in subdivision 2. 285.23 Sec. 32. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 285.24 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 285.25 INDEBTEDNESS.] At any time after adoption of its annual budget 285.26 and in anticipation of the collection of tax and other revenues 285.27 estimated and set forth by the board in the budget, except in 285.28 the case of deficiency taxes levied under this subdivision and 285.29 taxes levied for the payment of certificates issued under 285.30 subdivision 2, the board may, by resolution, authorize the 285.31 issuance, negotiation, and sale, in accordance with subdivision 285.32 4 in the form and manner and upon terms it determines, of its 285.33 negotiable general obligation certificates of indebtedness in 285.34 aggregate principal amounts not exceeding 50 percent of the 285.35 total amount of tax collections and other revenues, and maturing 285.36 not later than three months after the close of the budget year 286.1 in which issued. The proceeds of the sale of the certificates 286.2 must be used solely for the purposes for which the tax 286.3 collections and other revenues are to be expended pursuant to 286.4 the budget. 286.5 All the tax collections and other revenues included in the 286.6 budget for the budget year, after the expenditure of the tax 286.7 collections and other revenues in accordance with the budget, 286.8 must be irrevocably pledged and appropriated to a special fund 286.9 to pay the principal and interest on the certificates when due. 286.10 If for any reason the tax collections and other revenues are 286.11 insufficient to pay the certificates and interest when due, the 286.12 board shall levy a tax in the amount of the deficiency on all 286.13 taxable property in the district and shall appropriate this 286.14 amount when received to the special fund. 286.15 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 286.16 any budget year the receipts of tax and other revenues should 286.17 for some unforeseen cause become insufficient to pay the board's 286.18 current expenses, or if any public emergency should subject it 286.19 to the necessity of making extraordinary expenditures, the board 286.20 may by resolution authorize the issuance, negotiation, and sale, 286.21 in accordance with subdivision 4 in the form and manner and upon 286.22 the terms and conditions it determines, of its negotiable 286.23 general obligation certificates of indebtedness in an amount 286.24 sufficient to meet the deficiency. The board shall levy on all 286.25 taxable property in the district a tax sufficient to pay the 286.26 certificates and interest on the certificates and shall 286.27 appropriate all collections of the tax to a special fund created 286.28 for the payment of the certificates and the interest on them. 286.29 Certificates issued under this subdivision mature not later than 286.30 April 1 in the year following the year in which the tax is 286.31 collectible. 286.32 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 286.33 resolution authorize the issuance of general obligation bonds 286.34 for the acquisition or betterment of any part of the district 286.35 disposal system, including but without limitation the payment of 286.36 interest during construction and for a reasonable period 287.1 thereafter, or for the refunding of outstanding bonds, 287.2 certificates of indebtedness, or judgments. The board shall 287.3 pledge its full faith and credit and taxing power for the 287.4 payment of the bonds and shall provide for the issuance and sale 287.5 and for the security of the bonds in the manner provided in 287.6 Minnesota Statutes, chapter 475. The board has the same powers 287.7 and duties as a municipality issuing bonds under that law, 287.8 except that no election is required and the debt limitations of 287.9 Minnesota Statutes, chapter 475, do not apply to the bonds. The 287.10 board may also pledge for the payment of the bonds and deduct 287.11 from the amount of any tax levy required under Minnesota 287.12 Statutes, section 475.61, subdivision 1, and any revenues 287.13 receivable under any state and federal grants anticipated by the 287.14 board and may covenant to refund the bonds if and when and to 287.15 the extent that for any reason the revenues, together with other 287.16 funds available and appropriated for that purpose, are not 287.17 sufficient to pay all principal and interest due or about to 287.18 become due, provided that the revenues have not been anticipated 287.19 by the issuance of certificates under subdivision 1. 287.20 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 287.21 Certificates issued under subdivisions 1 and 2 may be issued and 287.22 sold by negotiation, without public sale, and may be sold at a 287.23 price equal to the percentage of the par value of the 287.24 certificates, plus accrued interest, and bearing interest at the 287.25 rate determined by the board. No election is required to 287.26 authorize the issuance of the certificates. The certificates 287.27 must bear the same rate of interest after maturity as before and 287.28 the full faith and credit and taxing power of the board must be 287.29 pledged to the payment of the certificates. 287.30 Sec. 33. [DEPOSITORIES.] 287.31 The board shall designate one or more national or state 287.32 banks, or trust companies authorized to do a banking business, 287.33 as official depositories for money of the board, and shall 287.34 require the treasurer to deposit all or a part of the money in 287.35 those institutions. The designation must be in writing and must 287.36 set forth all the terms and conditions upon which the deposits 288.1 are made, and must be signed by the chair and treasurer and made 288.2 a part of the minutes of the board. 288.3 Sec. 34. [MONEY, ACCOUNTS, AND INVESTMENTS.] 288.4 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 288.5 by the board must be deposited or invested by the treasurer and 288.6 disposed of as the board may direct in accordance with its 288.7 budget; provided that any money that has been pledged or 288.8 dedicated by the board to the payment of obligations or interest 288.9 on the obligations or expenses incident thereto, or for any 288.10 other specific purpose authorized by law, must be paid by the 288.11 treasurer into the fund to which it has been pledged. 288.12 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 288.13 shall establish funds and accounts as may be necessary or 288.14 convenient to handle the receipts and disbursements of the board 288.15 in an orderly fashion. 288.16 (b) The funds and accounts must be audited annually by a 288.17 certified public accountant at the expense of the district. 288.18 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 288.19 those funds and accounts may be deposited in the official 288.20 depositories of the board or invested as provided in this 288.21 subdivision. Any amount not currently needed or required by law 288.22 to be kept in cash on deposit may be invested in obligations 288.23 authorized for the investment of municipal sinking funds by 288.24 Minnesota Statutes, section 475.66. The money may also be held 288.25 under certificates of deposit issued by any official depository 288.26 of the board. 288.27 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 288.28 issued by the board for the acquisition and betterment of the 288.29 district disposal system, and the use, other than investment, of 288.30 all money on hand in any sinking fund or funds of the board, is 288.31 governed by the provisions of Minnesota Statutes, chapter 475, 288.32 the provisions of sections 20 to 38, and the provisions of 288.33 resolutions authorizing the issuance of the bonds. When 288.34 received, the bond proceeds must be transferred to the treasurer 288.35 of the board for safekeeping, investment, and payment of the 288.36 costs for which they were issued. 289.1 Subd. 5. [AUDIT.] The board shall provide for and pay the 289.2 cost of an independent annual audit of its official books and 289.3 records by the state auditor or a public accountant authorized 289.4 to perform that function under Minnesota Statutes, chapter 6. 289.5 Sec. 35. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 289.6 OUTSIDE THE JURISDICTION OF THE BOARD.] 289.7 (a) The board may contract with the United States or any 289.8 agency of the federal government, any state or its agency, or 289.9 any municipal or public corporation, governmental subdivision or 289.10 agency or political subdivision in any state, outside the 289.11 jurisdiction of the board, for furnishing services to those 289.12 entities, including but not limited to planning for and the 289.13 acquisition, betterment, operation, administration, and 289.14 maintenance of any or all interceptors, treatment works, and 289.15 local water and sanitary sewer facilities. The board may 289.16 include as one of the terms of the contract that the entity must 289.17 pay to the board an amount agreed upon as a reasonable estimate 289.18 of the proportionate share properly allocable to the entity of 289.19 costs of acquisition, betterment, and debt service previously 289.20 allocated in the district. When payments are made by entities 289.21 to the board, they must be applied in reduction of the total 289.22 amount of costs thereafter allocated in the district, on an 289.23 equitable basis as the board deems to be in the best interests 289.24 of the district, applying so far as practicable and appropriate 289.25 the criteria set forth in section 29, subdivision 2. A 289.26 municipality in the state of Minnesota may enter into a contract 289.27 and perform all acts and things required as a condition or 289.28 consideration therefor consistent with the purposes of sections 289.29 20 to 38, whether or not included among the powers otherwise 289.30 granted to the municipality by law or charter. 289.31 (b) The board shall contract with a qualified entity to 289.32 make necessary inspections on the district facilities, and to 289.33 otherwise process or assist in processing any of the work of the 289.34 district. 289.35 Sec. 36. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 289.36 AND EQUIPMENT.] 290.1 When the board orders a project involving the acquisition 290.2 or betterment of a part of the district disposal system, it 290.3 shall cause plans and specifications of the project to be made, 290.4 or if previously made, to be modified, if necessary, and to be 290.5 approved by the agency if required, and after any required 290.6 approval by the agency, one or more contracts for work and 290.7 materials called for by the plans and specification may be 290.8 awarded as provided in Minnesota Statutes, section 471.345. 290.9 Sec. 37. [PROPERTY EXEMPT FROM TAXATION.] 290.10 Any properties, real or personal, owned, leased, 290.11 controlled, used, or occupied by the water and sanitary sewer 290.12 board for any purpose under sections 20 to 38 are declared to be 290.13 acquired, owned, leased, controlled, used, and occupied for 290.14 public, governmental, and municipal purposes, and are exempt 290.15 from taxation by the state or any political subdivision of the 290.16 state, provided that the properties are subject to special 290.17 assessments levied by a political subdivision for a local 290.18 improvement in amounts proportionate to and not exceeding the 290.19 special benefit received by the properties from the 290.20 improvement. No possible use of any properties in any manner 290.21 different from their use as part of a disposal system at the 290.22 time may be considered in determining the special benefit 290.23 received by the properties. All assessments are subject to 290.24 final approval by the board, whose determination of the benefits 290.25 is conclusive upon the political subdivision levying the 290.26 assessment. 290.27 Sec. 38. [RELATION TO EXISTING LAWS.] 290.28 The provisions of sections 20 to 38 must be given full 290.29 effect notwithstanding the provisions of any law or charter 290.30 inconsistent with sections 20 to 38. The powers conferred on 290.31 the board under sections 20 to 38 do not in any way diminish or 290.32 supersede the powers conferred on the agency by Minnesota 290.33 Statutes, chapters 115 to 116. 290.34 Sec. 39. [EFFECTIVE DATE; REVERSE REFERENDUM.] 290.35 Prior to approval by resolution by each of the local 290.36 governing bodies of the city of New Prague, and Helena and Cedar 291.1 Lake townships, under Minnesota Statutes, section 645.021, 291.2 subdivision 2, each city or township shall publish a notice of 291.3 its intention to establish the district in a newspaper of 291.4 general circulation in the city or township, together with a 291.5 date for a public hearing. The hearing must be held at least 291.6 two weeks but not more than four weeks after the publication of 291.7 the resolution. Following the public hearing, the city or 291.8 township may determine to take no further action or adopt a 291.9 resolution confirming its intention to establish the district. 291.10 That resolution must also be published in a newspaper of general 291.11 circulation in the district. If within 30 days after 291.12 publication of the resolution, a petition signed by at least 291.13 five percent of the registered voters in the city or township 291.14 requesting a vote on the proposed resolution is filed with the 291.15 county auditor, the resolution is not effective until it has 291.16 been submitted to the voters in the city or township at a 291.17 general or special election and a majority of votes cast on the 291.18 question of approving the resolution are in the affirmative. 291.19 The commissioner of revenue shall prepare a suggested form of 291.20 question to be presented at the election. If the majority of 291.21 the votes are cast in the affirmative or if no reverse referenda 291.22 are held, sections 1 to 19 are effective the day after a 291.23 certificate of approval under Minnesota Statutes, section 291.24 645.021, subdivision 3, is filed by the last of the four local 291.25 governmental units subject to sections 1 to 19. 291.26 Prior to approval by resolution by each of the local 291.27 governing bodies of the city and town of Finlayson, under 291.28 Minnesota Statutes, section 645.021, subdivision 2, the city or 291.29 town shall publish a notice of its intention to establish the 291.30 district in a newspaper of general circulation in the city or 291.31 town, together with a date for a public hearing. The hearing 291.32 must be held at least two weeks but not more than four weeks 291.33 after the publication of the resolution. Following the public 291.34 hearing, the city or town may determine to take no further 291.35 action or adopt a resolution confirming its intention to 291.36 establish the district. That resolution must also be published 292.1 in a newspaper of general circulation in the district. If 292.2 within 30 days after publication of the resolution, a petition 292.3 signed by at least five percent of the registered voters in the 292.4 city or town requesting a vote on the proposed resolution is 292.5 filed with the county auditor, the resolution is not effective 292.6 until it has been submitted to the voters in the city or town at 292.7 a general or special election and a majority of votes cast on 292.8 the question of approving the resolution are in the affirmative. 292.9 The commissioner of revenue shall prepare a suggested form of 292.10 question to be presented at the election. If the majority of 292.11 the votes are cast in the affirmative or if no reverse referenda 292.12 are held, sections 20 to 38 are effective as to the city and the 292.13 town of Finlayson separately the day after the certificate of 292.14 approval of the governing body of each is filed as provided in 292.15 Minnesota Statutes, section 645.021, subdivision 3. 292.16 ARTICLE 13 292.17 ALLOCATION OF FUTURE SURPLUSES 292.18 Section 1. Minnesota Statutes 1998, section 16A.152, 292.19 subdivision 2, is amended to read: 292.20 Subd. 2. [ADDITIONAL REVENUES; PRIORITY.] If on the basis 292.21 of a forecast of general fund revenues and expenditures after 292.22 November 1 in an odd-numbered year, the commissioner of finance 292.23 determines that there will be a positive unrestricted budgetary 292.24 general fund balance at the close of the biennium, the 292.25 commissioner of finance must allocate money as follows: 292.26 (1) first, to the budget reserve until the total amount in 292.27 the account equals $622,000,000; then 292.28 (2) 60 percent to the property tax reform account 292.29 established in section 16A.1521; and 292.30 (3) 40 percentis an unrestricted balance in the general292.31fundto the tax reduction and reform account. 292.32 The amounts necessary to meet the requirements of this 292.33 section are appropriated from the general fund within two weeks 292.34 after the forecast is released. 292.35 Sec. 2. Minnesota Statutes 1998, section 16A.152, is 292.36 amended by adding a subdivision to read: 293.1 Subd. 2a. [PLANNING ESTIMATES.] (a) In forecasts prepared 293.2 after November 1, 1999, and before February 2001, the 293.3 commissioner shall estimate the general fund revenues and 293.4 spending for the 2002-2003 biennium. In preparing these 293.5 estimates, the commissioner shall use the methodology used 293.6 generally to prepare planning estimates. If the commissioner 293.7 estimates that revenues will exceed spending for the 2002-2003 293.8 biennium in any forecast, effective beginning July 1, 2001, the 293.9 estimated amount shall be deposited in the health access fund up 293.10 to the amount of and at the times that the annual tobacco 293.11 settlement payments are received. 293.12 (b) If the commissioner estimates in any forecast that the 293.13 full amount of the annual tobacco settlement payments for the 293.14 2002-2003 biennium are to be deposited in the health care access 293.15 fund under the provisions of paragraph (a), the requirement to 293.16 prepare estimates under paragraph (a) ceases and all future 293.17 annual tobacco settlement payments must be deposited in the 293.18 health care access fund. 293.19 (c) If in any forecast, the commissioner estimates under 293.20 paragraph (a) that $50,000,000 or more of annual tobacco 293.21 settlement payments are to be deposited in the health care 293.22 access fund for the 2002-2003 biennium, the tax rates under 293.23 section 295.52 are reduced to zero effective beginning for 293.24 calendar year 2001. If in the November 1999 forecast the 293.25 commissioner estimates that $100,000,000 or more of annual 293.26 tobacco settlement payments are to be deposited in the health 293.27 care access fund for the 2002-2003 biennium, the tax rates under 293.28 section 295.52 for calendar year 2000 are reduced by 0.5 293.29 percentage point for each $50,000,000 of increased deposits over 293.30 $50,000,000. 293.31 Sec. 3. [16A.1522] [STATEMENT OF PURPOSE.] 293.32 (a) The state of Minnesota derives revenues from a variety 293.33 of taxes, fees, and other sources. 293.34 (b) The general fund state budget is enacted for a two-year 293.35 period based on a forecast of state revenues and authorized 293.36 spending. The two-year biennial budget period begins July 1 of 294.1 odd-numbered years and ends June 30 of odd-numbered years. 294.2 (c) Section 4 is intended to require that any positive 294.3 unrestricted budgetary general fund balance in excess of 294.4 one-half of one percent of total general fund biennial revenues 294.5 at the close of the biennium be returned to the taxpayers of 294.6 Minnesota in the form of a rebate, payable at the end of the 294.7 budget period. 294.8 Sec. 4. [16A.1523] [REBATE REQUIREMENTS.] 294.9 (a) If, on the basis of a forecast of general fund revenues 294.10 and expenditures in November of an even-numbered year or 294.11 February of an odd-numbered year, the commissioner of finance 294.12 projects that there will be a positive unrestricted budgetary 294.13 general fund balance at the close of the biennium that exceeds 294.14 one-half of one percent of total general fund biennial revenues, 294.15 the commissioner of finance shall designate the entire balance 294.16 as available for rebate to the taxpayers of Minnesota. 294.17 (b) If the commissioner of finance designates an amount for 294.18 rebate in either forecast, then the governor shall present a 294.19 plan to the legislature for rebating that amount to the 294.20 taxpayers of Minnesota. The plan must provide for payments to 294.21 begin no later than August 15 of the odd-numbered year. The 294.22 legislature must adopt or modify any plan presented by the 294.23 governor by April 15 of each odd-numbered year. 294.24 (c) By July 15 of each odd-numbered year, the commissioner 294.25 of finance shall certify to the commissioner of revenue the 294.26 amount of revenues available for rebate as determined by 294.27 preliminary June 30 end-of-year fiscal analysis. 294.28 (d) If the amount of a positive unrestricted budgetary 294.29 general fund balance existing on June 30 of an odd-numbered year 294.30 is less than one-half of one percent of the total general fund 294.31 biennial revenues, the total amount of the positive balance 294.32 shall be deposited into the tax relief account. 294.33 (e) Amounts certified for rebate by the commissioner of 294.34 finance are appropriated from the general fund to the 294.35 commissioner of revenue for the sole purpose of making the 294.36 payments required by this section. 295.1 Sec. 5. [EFFECTIVE DATE.] 295.2 Sections 1 to 4 are effective September 1, 1999. 295.3 ARTICLE 14 295.4 MISCELLANEOUS 295.5 Section 1. Minnesota Statutes 1998, section 3.986, 295.6 subdivision 2, is amended to read: 295.7 Subd. 2. [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 295.8 means increased or decreased costs or revenues that a political 295.9 subdivision would incur as a result of a law enacted after June 295.10 30, 1997, or rule proposed after December 31, 1998: 295.11 (1) that mandates a new program, eliminates an existing 295.12 mandated program, requires an increased level of service of an 295.13 existing program, or permits a decreased level of service in an 295.14 existing mandated program; 295.15 (2) that implements or interprets federal law and, by its 295.16 implementation or interpretation, increases or decreases program 295.17 or service levels beyond the level required by the federal law; 295.18 (3) that implements or interprets a statute or amendment 295.19 adopted or enacted pursuant to the approval of a statewide 295.20 ballot measure by the voters and, by its implementation or 295.21 interpretation, increases or decreases program or service levels 295.22 beyond the levels required by the ballot measure; 295.23 (4) that removes an option previously available to 295.24 political subdivisions, or adds an option previously unavailable 295.25 to political subdivisions, thus requiring higher program or 295.26 service levels or permitting lower program or service levels, or 295.27 prohibits a specific activity and so forces political 295.28 subdivisions to use a more costly alternative to provide a 295.29 mandated program or service; 295.30 (5) that requires that an existing program or service be 295.31 provided in a shorter time period and thus increases the cost of 295.32 the program or service, or permits an existing mandated program 295.33 or service to be provided in a longer time period, thus 295.34 permitting a decrease in the cost of the program or service; 295.35 (6) that adds new requirements to an existing optional 295.36 program or service and thus increases the cost of the program or 296.1 service because the political subdivisions have no reasonable 296.2 alternative other than to continue the optional program; 296.3 (7) that affects local revenue collections by changes in 296.4 property or sales and use tax exemptions; 296.5 (8) that requires costs previously incurred at local option 296.6 that have subsequently been mandated by the state; or 296.7 (9) that requires payment of a new fee or increases the 296.8 amount of an existing fee, or permits the elimination or 296.9 decrease of an existing fee mandated by the state. 296.10 (b) When state law is intended to achieve compliance with 296.11 federal law or court orders, state mandates shall be determined 296.12 as follows: 296.13 (1) if the federal law or court order is discretionary, the 296.14 state law is a state mandate; 296.15 (2) if the state law exceeds what is required by the 296.16 federal law or court order, only the provisions of the state law 296.17 that exceed the federal requirements are a state mandate; and 296.18 (3) if the state law does not exceed what is required by 296.19 the federal statute or regulation or court order, the state law 296.20 is not a state mandate. 296.21 Sec. 2. Minnesota Statutes 1998, section 3.987, 296.22 subdivision 1, is amended to read: 296.23 Subdivision 1. [LOCAL IMPACT NOTES.] The commissioner of 296.24 finance shall coordinate the development of a local impact note 296.25 for any proposed legislation introduced after June 30, 1997,or296.26any rule proposed after December 31, 1998,upon request of the 296.27 chair or the ranking minority member of either legislative tax 296.28 committee. Upon receipt of a request to prepare a local impact 296.29 note, the commissioner must notify the authors of the proposed 296.30 legislationor, for an administrative rule, the head of the296.31relevant executive agency or department,that the request has 296.32 been made. The local impact note must be made available to the 296.33 public upon request. If the action is among the exceptions 296.34 listed in section 3.988, a local impact note need not be 296.35 requested nor prepared. The commissioner shall make a 296.36 reasonable and timely estimate of the local fiscal impact on 297.1 each type of political subdivision that would result from the 297.2 proposed legislation. The commissioner of finance may require 297.3 any political subdivision or the commissioner of an 297.4 administrative agency of the state to supply in a timely manner 297.5 any information determined to be necessary to determine local 297.6 fiscal impact. The political subdivision, its representative 297.7 association, or commissioner shall convey the requested 297.8 information to the commissioner of finance with a signed 297.9 statement to the effect that the information is accurate and 297.10 complete to the best of its ability. The political subdivision, 297.11 its representative association, or commissioner, when requested, 297.12 shall update its determination of local fiscal impact based on 297.13 actual cost or revenue figures, improved estimates, or both. 297.14 Upon completion of the note, the commissioner must provide a 297.15 copy to the authors of the proposed legislationor, for an297.16administrative rule, to the head of the relevant executive297.17agency or department. 297.18 Sec. 3. Minnesota Statutes 1998, section 270.07, 297.19 subdivision 1, is amended to read: 297.20 Subdivision 1. [POWERS OF COMMISSIONER; APPLICATION FOR 297.21 ABATEMENT; ORDERS.] (a) The commissioner of revenue shall 297.22 prescribe the form of all blanks and books required under this 297.23 chapter and shall hear and determine all matters of grievance 297.24 relating to taxation. Except for matters delegated to the 297.25 various boards of county commissioners under section 375.192, 297.26 and except as otherwise provided by law, the commissioner shall 297.27 have power to grant such reduction or abatement of net tax 297.28 capacities or taxes and of any costs, penalties or interest 297.29 thereon as the commissioner may deem just and equitable, and to 297.30 order the refundment, in whole or in part, of any taxes, costs, 297.31 penalties or interest thereon which have been erroneously or 297.32 unjustly paid. Application therefor shall be submitted with a 297.33 statement of facts in the case and the favorable recommendation 297.34 of the county board or of the board of abatement of any city 297.35 where any such board exists, and the county auditor of the 297.36 county wherein such tax was levied or paid. In the case of taxes 298.1 other than gross earnings taxes, the order may be made only on 298.2 application and approval as provided in this paragraph. No 298.3 reduction, abatement, or refundment of any special assessments 298.4 made or levied by any municipality for local improvements shall 298.5 be made unless it is also approved by the board of review or 298.6 similar taxing authority of such municipality. 298.7 (b) The commissioner has the power to grant reductions or 298.8 abatements of gross earnings tax. An application for reduction 298.9 of gross earnings taxes may be made directly to the commissioner 298.10 without the favorable action of the county board and county 298.11 auditor. The commissioner shall direct that any gross earnings 298.12 taxes that may have been erroneously or unjustly paid be applied 298.13 against unpaid taxes due from the applicant. 298.14 (c) The commissioner shall forward to the county auditor a 298.15 copy of the order made by the commissioner in all cases in which 298.16 the approval of the county board is required. 298.17 (d) The commissioner may refer any question that may arise 298.18 in reference to the true construction of this chapter to the 298.19 attorney general, and the decision thereon shall be in force and 298.20 effect until annulled by the judgment of a court of competent 298.21 jurisdiction. 298.22 (e) The commissioner may by written order abate, reduce, or 298.23 refund any penalty or interest imposed by any law relating to 298.24 taxation, if in the commissioner's opinion the failure to timely 298.25 pay the tax or failure to timely file the return is due to 298.26 reasonable cause, or if the taxpayer is located in a 298.27 presidentially declared disaster area.The order shall be made298.28on application of the taxpayer to the commissioner.298.29(f) If an order issued under this subdivision is for an298.30abatement, reduction, or refund of over $5,000, it shall be298.31valid only if approved in writing by the attorney general.298.32(g)(f) An appeal may not be taken to the tax court from 298.33 any order of the commissioner of revenue made in the exercise of 298.34 the discretionary authority granted in paragraph (a) with 298.35 respect to the reduction or abatement of real or personal 298.36 property taxes in response to a taxpayer's application for an 299.1 abatement, reduction, or refund of taxes, net tax capacities, 299.2 costs, penalties, or interest. 299.3 Sec. 4. Minnesota Statutes 1998, section 270.65, is 299.4 amended to read: 299.5 270.65 [DATE OF ASSESSMENT; DEFINITION.] 299.6 For purposes of taxes administered by the commissioner, the 299.7 term "date of assessment" means the date a return was filed or 299.8 the date a return should have been filed, whichever is later; 299.9 or, in the case of taxes determined by the commissioner, "date 299.10 of assessment" means the date of the order assessing taxes; or, 299.11 in the case of an amended return filed by the taxpayer, the 299.12 assessment date is the date the return was filed with the 299.13 commissioner; or, in the case of a check from a taxpayer that is 299.14 dishonored and results in an erroneous refund being given to the 299.15 taxpayer, remittance of the check is deemed to be an assessment 299.16 and the "date of assessment" is the date the check was received 299.17 by the commissioner. 299.18 Sec. 5. Minnesota Statutes 1998, section 270.67, is 299.19 amended by adding a subdivision to read: 299.20 Subd. 4. [OFFER-IN-COMPROMISE PROGRAM.] (a) In 299.21 implementing the authority provided in subdivision 1 or in 299.22 section 8.30 to accept offers of installment payments or 299.23 offers-in-compromise of tax liabilities, the commissioner of 299.24 revenue shall prescribe guidelines for employees of the 299.25 department of revenue to determine whether an 299.26 offer-in-compromise or an offer to make installment payments is 299.27 adequate and should be accepted to resolve a dispute. In 299.28 prescribing the guidelines, the commissioner shall develop and 299.29 publish schedules of national and local allowances designed to 299.30 provide that taxpayers entering into a compromise have an 299.31 adequate means to provide for basic living expenses. The 299.32 guidelines must provide that the taxpayer's ownership interest 299.33 in a motor vehicle, to the extent of the value allowed in 299.34 section 550.37, will not be considered as an asset; in the case 299.35 of an offer related to a joint tax liability of spouses, that 299.36 value of two motor vehicles must be excluded. The guidelines 300.1 must provide that employees of the department shall determine, 300.2 on the basis of the facts and circumstances of each taxpayer, 300.3 whether the use of the schedules is appropriate and that 300.4 employees must not use the schedules to the extent the use would 300.5 result in the taxpayer not having adequate means to provide for 300.6 basic living expenses. The guidelines must provide that: 300.7 (1) an employee of the department shall not reject an 300.8 offer-in-compromise from a low-income taxpayer solely on the 300.9 basis of the amount of the offer; and 300.10 (2) in the case of an offer-in-compromise which relates 300.11 only to issues of liability of the taxpayer: 300.12 (i) the offer must not be rejected solely because the 300.13 commissioner is unable to locate the taxpayer's return or return 300.14 information for verification of the liability; and 300.15 (ii) the taxpayer shall not be required to provide an 300.16 audited, reviewed, or compiled financial statement. 300.17 (b) The commissioner shall establish procedures: 300.18 (1) for an independent administrative review of any 300.19 rejection of a proposed offer-in-compromise or installment 300.20 agreement made by a taxpayer under this section before the 300.21 rejection is communicated to the taxpayer; 300.22 (2) that allow a taxpayer to appeal any rejection of the 300.23 offer or agreement to the commissioner of revenue; 300.24 (3) that provide for notification to the taxpayer when an 300.25 offer-in-compromise has been accepted, and issuance of 300.26 certificates of release of any liens imposed under section 300.27 270.69 related to the liability which is the subject of the 300.28 compromise; and 300.29 (4) that require presentation of a counteroffer by the 300.30 commissioner if the amount offered by the taxpayer in an 300.31 offer-in-compromise is not accepted by the commissioner. 300.32 Sec. 6. Minnesota Statutes 1998, section 270B.14, is 300.33 amended by adding a subdivision to read: 300.34 Subd. 17. [DISCLOSURE TO DEPARTMENT OF COMMERCE.] The 300.35 commissioner may disclose to the commissioner of commerce 300.36 information required to administer the Uniform Disposition of 301.1 Unclaimed Property Act in sections 354.31 to 345.60, including 301.2 the social security numbers of the taxpayers whose refunds are 301.3 on the report of abandoned property submitted by the 301.4 commissioner to the commissioner of commerce under section 301.5 345.41. Except for data published under section 345.42, the 301.6 information received that is private or nonpublic data retains 301.7 its classification and can be used by the commissioner of 301.8 commerce only for the purpose of verifying that the persons 301.9 claiming the refunds are the owners. 301.10 Sec. 7. Minnesota Statutes 1998, section 289A.31, 301.11 subdivision 2, is amended to read: 301.12 Subd. 2. [JOINT INCOME TAX RETURNS.] (a) If a joint income 301.13 tax return is made by a husband and wife, the liability for the 301.14 tax is joint and several. A spouse whois relieved ofqualifies 301.15 for relief from a liability attributable toa substantialan 301.16 underpayment under section6013(e)6015(b) of the Internal 301.17 Revenue Code isalsorelieved of the state income tax liability 301.18 on thesubstantialunderpayment. 301.19 (b) In the case of individuals who were a husband and wife 301.20 prior to the dissolution of their marriage or their legal 301.21 separation, or prior to the death of one of the individuals, for 301.22 tax liabilities reported on a joint or combined return, the 301.23 liability of each person is limited to the proportion of the tax 301.24 due on the return that equals that person's proportion of the 301.25 total tax due if the husband and wife filed separate returns for 301.26 the taxable year. This provision is effective only when the 301.27 commissioner receives written notice of the marriage 301.28 dissolution, legal separation, or death of a spouse from the 301.29 husband or wife. No refund may be claimed by an ex-spouse, 301.30 legally separated or widowed spouse for any taxes paid more than 301.31 60 days before receipt by the commissioner of the written notice. 301.32 Sec. 8. Minnesota Statutes 1998, section 289A.40, 301.33 subdivision 1, is amended to read: 301.34 Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise 301.35 provided in this chapter, a claim for a refund of an overpayment 301.36 of state tax must be filed within 3-1/2 years from the date 302.1 prescribed for filing the return, plus any extension of time 302.2 granted for filing the return, but only if filed within the 302.3 extended time, or one year from the date of an order assessing 302.4 tax under section 289A.37, subdivision 1, or an order 302.5 determining an appeal under section 289A.65, subdivision 8, or 302.6 one year from the date of a return made by the commissioner 302.7 under section 289A.35, upon payment in full of the tax, 302.8 penalties, and interest shown on the order or return made by the 302.9 commissioner, whichever period expires later. Claims for 302.10 refund, except for taxes under chapter 297A, filed after the 302.11 3-1/2 year period but within the one-year period are limited to 302.12 the amount of the tax, penalties, and interest on the order or 302.13 return made by the commissioner and to issues determined by the 302.14 order or return made by the commissioner. 302.15 In the case of assessments under section 289A.38, 302.16 subdivision 5 or 6, claims for refund under chapter 297A filed 302.17 after the 3-1/2 year period but within the one-year period are 302.18 limited to the amount of the tax, penalties, and interest on the 302.19 order or return made by the commissioner that are due for the 302.20 period before the 3-1/2 year period. 302.21 Sec. 9. Minnesota Statutes 1998, section 289A.40, 302.22 subdivision 1a, is amended to read: 302.23 Subd. 1a. [INDIVIDUAL INCOME TAXES;REASONABLE302.24CAUSESUSPENSION DURING PERIOD OF DISABILITY.] If the 302.25 taxpayerestablishes reasonable cause for failing to timely file302.26the return required by section 289A.08, subdivision 1, files the302.27required return within ten years of the date specified in302.28section 289A.18, subdivision 1, and independently verifies that302.29an overpayment has been made, the commissioner shall grant a302.30refund claimed by the original return, notwithstanding the302.31limitations of subdivision 1meets the requirements for 302.32 suspending the running of the time period to file a claim for 302.33 refund under section 6511(h) of the Internal Revenue Code, the 302.34 time period in subdivision 1 for the taxpayer to file a claim 302.35 for an individual income tax refund is suspended. 302.36 Sec. 10. Minnesota Statutes 1998, section 289A.50, is 303.1 amended by adding a subdivision to read: 303.2 Subd. 1a. [REFUND FORM.] On or before January 1, 2000, the 303.3 commissioner of revenue shall prepare and make available to 303.4 taxpayers a form for filing claims for refund of taxes paid in 303.5 excess of the amount due. If the commissioner fails to prepare 303.6 a form under this subdivision by January 1, 2000, any claims for 303.7 refund made after January 1, 2000, and up to ten days after the 303.8 form is made available to taxpayers are deemed to be made in 303.9 compliance with the requirement of the form. 303.10 Sec. 11. Minnesota Statutes 1998, section 289A.50, 303.11 subdivision 7, is amended to read: 303.12 Subd. 7. [REMEDIES.] (a) If the taxpayer is notified by 303.13 the commissioner that the refund claim is denied in whole or in 303.14 part, the taxpayer may: 303.15 (1) file an administrative appeal as provided in section 303.16 289A.65, or an appeal with the tax court, within 60 days after 303.17 issuance of the commissioner's notice of denial; or 303.18 (2) file an action in the district court to recover the 303.19 refund. 303.20 (b) An action in the district court on a denied claim for 303.21 refund must be brought within 18 months of the date of the 303.22 denial of the claim by the commissioner. 303.23 (c) No action in the district court or the tax court shall 303.24 be brought within six months of the filing of the refund claim 303.25 unless the commissioner denies the claim within that period. 303.26 (d) If a taxpayer files a claim for refund and the 303.27 commissioner has not issued a denial of the claim, the taxpayer 303.28 may bring an action in the district court or the tax court at 303.29 any time after the expiration of six months of the time the 303.30 claim was filed, but within four years of the date that the 303.31 claim was filed. 303.32 (e) If the claim for refund has been filed on and in 303.33 compliance with the requirements of the form prepared by the 303.34 commissioner under subdivision 1a and if the commissioner has 303.35 not denied the claim within 30 months after the claim was filed, 303.36 the claim is deemed granted on the last day of the 30th month. 304.1 The commissioner shall refund the amount claimed. The 304.2 commissioner and the taxpayer may agree to extend the 30-month 304.3 period before its expiration. 304.4 (f) The commissioner and the taxpayer may agree to extend 304.5 the period for bringing an action in the district court. 304.6(f)(g) An action for refund of tax by the taxpayer must be 304.7 brought in the district court of the district in which lies the 304.8 county of the taxpayer's residence or principal place of 304.9 business. In the case of an estate or trust, the action must be 304.10 brought at the principal place of its administration. Any 304.11 action may be brought in the district court for Ramsey county. 304.12 Sec. 12. Minnesota Statutes 1998, section 289A.60, 304.13 subdivision 3, is amended to read: 304.14 Subd. 3. [COMBINED PENALTIES.] When penalties are imposed 304.15 under subdivisions 1 and 2,except for the minimum penalty under304.16subdivision 2,the penalties imposed under both subdivisions 304.17 combined must not exceed 38 percent. 304.18 Sec. 13. Minnesota Statutes 1998, section 289A.60, 304.19 subdivision 21, is amended to read: 304.20 Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY 304.21 ELECTRONIC FUNDS TRANSFER.](a)In addition to other applicable 304.22 penalties imposed by this section, after notification from the 304.23 commissioner to the taxpayer that payments are required to be 304.24 made by means of electronic funds transfer under section 304.25 289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 304.26 289A.26, subdivision 2a, and the payments are remitted by some 304.27 other means, there is a penalty in the amount of five percent of 304.28 each payment that should have been remitted electronically. The 304.29 penalty can be abated under the abatement procedures prescribed 304.30 in section 270.07, subdivision 6, if the failure to remit the 304.31 payment electronically is due to reasonable cause. 304.32(b) The penalty under paragraph (a) does not apply if the304.33taxpayer pays by other means the amount due at least three304.34business days before the date the payment is due. This304.35paragraph does not apply after December 31, 1997.304.36 Sec. 14. Minnesota Statutes 1998, section 297A.15, 305.1 subdivision 5, is amended to read: 305.2 Subd. 5. [REFUND; APPROPRIATION.] Notwithstanding the 305.3 provisions of sections 297A.02, subdivision 5, and 297A.25, 305.4 subdivision 42, the tax on sales of capital equipment, and 305.5 replacement capital equipment, shall be imposed and collected as 305.6 if the rate under section 297A.02, subdivision 1, applied. Upon 305.7 application by the purchaser, on forms prescribed by the 305.8 commissioner, a refund equal to the reduction in the tax due as 305.9 a result of the application of the exemption under section 305.10 297A.25, subdivision 42, and the rate under section 297A.02, 305.11 subdivision 5, shall be paid to the purchaser. The application 305.12 must include sufficient information to permit the commissioner 305.13 to verify the sales tax paid for the project. The application 305.14 shall include information necessary for the commissioner 305.15 initially to verify that the purchases qualified as capital 305.16 equipment under section 297A.25, subdivision 42, or replacement 305.17 capital equipment under section 297A.01, subdivision 20. No 305.18 more than two applications for refunds may be filed under this 305.19 subdivision in a calendar year. Unless otherwise specifically 305.20 provided by this subdivision, the provisions ofsectionsections 305.21 289A.40 and 289A.50 apply to the refunds payable under this 305.22 subdivision. There is annually appropriated to the commissioner 305.23 of revenue the amount required to make the refunds. 305.24 The amount to be refunded shall bear interest at the rate 305.25 in section 270.76 from the date the refund claim is filed with 305.26 the commissioner. 305.27 Sec. 15. Minnesota Statutes 1998, section 298.24, 305.28 subdivision 1, is amended to read: 305.29 Subdivision 1. (a) For concentrate produced in1997 and305.3019981999 and thereafter, there is imposed upon taconite and 305.31 iron sulphides, and upon the mining and quarrying thereof, and 305.32 upon the production of iron ore concentrate therefrom, and upon 305.33 the concentrate so produced, a tax of $2.141 per gross ton of 305.34 merchantable iron ore concentrate produced therefrom. 305.35 (b)For concentrates produced in 1999 and subsequent years,305.36the tax rate shall be equal to the preceding year's tax rate306.1plus an amount equal to the preceding year's tax rate multiplied306.2by the percentage increase in the implicit price deflator from306.3the fourth quarter of the second preceding year to the fourth306.4quarter of the preceding year. "Implicit price deflator" for306.5the gross national product means the implicit price deflator306.6prepared by the bureau of economic analysis of the United States306.7Department of Commerce.306.8(c)On concentrates produced in 1997 and thereafter, an 306.9 additional tax is imposed equal to three cents per gross ton of 306.10 merchantable iron ore concentrate for each one percent that the 306.11 iron content of the product exceeds 72 percent, when dried at 306.12 212 degrees Fahrenheit. 306.13(d)(c) The tax shall be imposed on the average of the 306.14 production for the current year and the previous two years. The 306.15 rate of the tax imposed will be thecurrent year'stax rate 306.16 determined under this subdivision. Thisclauseparagraph shall 306.17 not apply in the case of the closing of a taconite facility if 306.18 the property taxes on the facility would be higher if this 306.19 clause and section 298.25 were not applicable. 306.20(e)(d) If the tax or any part of the tax imposed by this 306.21 subdivision is held to be unconstitutional, a tax of $2.141 per 306.22 gross ton of merchantable iron ore concentrate produced shall be 306.23 imposed. 306.24(f)(e) Consistent with the intent of this subdivision to 306.25 impose a tax based upon the weight of merchantable iron ore 306.26 concentrate, the commissioner of revenue may indirectly 306.27 determine the weight of merchantable iron ore concentrate 306.28 included in fluxed pellets by subtracting the weight of the 306.29 limestone, dolomite, or olivine derivatives or other basic flux 306.30 additives included in the pellets from the weight of the 306.31 pellets. For purposes of this paragraph, "fluxed pellets" are 306.32 pellets produced in a process in which limestone, dolomite, 306.33 olivine, or other basic flux additives are combined with 306.34 merchantable iron ore concentrate. No subtraction from the 306.35 weight of the pellets shall be allowed for binders, mineral and 306.36 chemical additives other than basic flux additives, or moisture. 307.1(g)(f)(1) Notwithstanding any other provision of this 307.2 subdivision, for the first two years of a plant's production of 307.3 direct reduced ore, no tax is imposed under this section. As 307.4 used in this paragraph, "direct reduced ore" is ore that results 307.5 in a product that has an iron content of at least 75 percent. 307.6 For the third year of a plant's production of direct reduced 307.7 ore, the rate to be applied to direct reduced ore is 25 percent 307.8 of the rate otherwise determined under this subdivision. For 307.9 the fourth such production year, the rate is 50 percent of the 307.10 rate otherwise determined under this subdivision; for the fifth 307.11 such production year, the rate is 75 percent of the rate 307.12 otherwise determined under this subdivision; and for all 307.13 subsequent production years, the full rate is imposed. 307.14 (2) Subject to clause (1), production of direct reduced ore 307.15 in this state is subject to the tax imposed by this section, but 307.16 if that production is not produced by a producer of taconite or 307.17 iron sulfides, the production of taconite or iron sulfides 307.18 consumed in the production of direct reduced iron in this state 307.19 is not subject to the tax imposed by this section on taconite or 307.20 iron sulfides. 307.21 (g) For purposes of distribution of the tax proceeds under 307.22 section 298.28, "implicit price deflator" means the implicit 307.23 price deflator for the gross domestic product prepared by the 307.24 Bureau of Economic Analysis of the United States Department of 307.25 Commerce, from the fourth quarter of the second preceding year 307.26 to the fourth quarter of the preceding year. 307.27 Sec. 16. Minnesota Statutes 1998, section 298.28, 307.28 subdivision 9a, is amended to read: 307.29 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 307.3015.425.4 cents per ton for distributions in1996, 1998, 1999,307.31and2000and 20.4 cents per ton for distributions in 1997shall 307.32 be paid to the taconite economic development fund. For each of 307.33 the following nine years thereafter, the amount per ton for 307.34 distributions must be increased 1.7 cents over the amount for 307.35 the previous year and paid to the taconite economic development 307.36 fund. No distribution shall be made under this paragraph in any 308.1 year in which total industry production falls below 30 million 308.2 tons. 308.3 (b) An amount equal to 50 percent of the tax under section 308.4 298.24 for concentrate sold in the form of pellet chips and 308.5 fines not exceeding 5/16 inch in size and not including crushed 308.6 pellets shall be paid to the taconite economic development 308.7 fund. The amount paid shall not exceed $700,000 annually for 308.8 all companies. If the initial amount to be paid to the fund 308.9 exceeds this amount, each company's payment shall be prorated so 308.10 the total does not exceed $700,000. 308.11 Sec. 17. Minnesota Statutes 1998, section 360.55, is 308.12 amended by adding a subdivision to read: 308.13 Subd. 8. [AGRICULTURAL AIRCRAFT.] Aircraft registered with 308.14 the Federal Aviation Administration as restricted category 308.15 aircraft used for agricultural purposes must be listed for 308.16 taxation and registration upon filing by the owner a sworn 308.17 affidavit with the commissioner. The affidavit must state: 308.18 (1) the name and address of the owner; 308.19 (2) the name and address of the person from whom purchased; 308.20 (3) the aircraft's make, year, model number, federal 308.21 registration number, and manufacturer's identification number; 308.22 and 308.23 (4) that the aircraft is owned and operated solely for 308.24 agricultural operations and purposes. 308.25 The owner shall file the affidavit and pay an annual fee 308.26 established under sections 360.511 to 360.67, which must not 308.27 exceed $500. Should the aircraft be operated other than for 308.28 agricultural purposes, the owner shall list the aircraft for 308.29 taxation and registration under sections 360.511 to 360.67. If 308.30 the aircraft is sold, the new owner shall list the aircraft for 308.31 taxation and registration under this subdivision or under 308.32 sections 360.511 to 360.67, as applicable. 308.33 Sec. 18. Minnesota Statutes 1998, section 469.169, 308.34 subdivision 12, is amended to read: 308.35 Subd. 12. [ADDITIONAL ZONE ALLOCATIONS.] (a) In addition 308.36 to tax reductions authorized in subdivisions 7, 8, 9, 10, and 309.1 11, the commissioner shall allocate tax reductions to border 309.2 city enterprise zones located on the western border of the state. 309.3 The cumulative total amount of tax reductions for all years of 309.4 the program under sections 469.1731 to 469.1735, is limited to: 309.5 (1) for the city of Breckenridge, $394,000; 309.6 (2) for the city of Dilworth, $118,200; 309.7 (3) for the city of East Grand Forks, $788,000; 309.8 (4) for the city of Moorhead, $591,000; and 309.9 (5) for the city of Ortonville, $78,800. 309.10 Allocations made under this subdivision may be used for tax 309.11 reductions provided in section 469.1732 or 469.1734 or for 309.12 reimbursements under section 469.1735, subdivision 3, but only 309.13 if the municipality determines that the granting of the tax 309.14 reduction or offset is necessary to enable a business to expand 309.15 within a city or to attract a business to a city. Limitations 309.16 on allocations under subdivision 7 do not apply to this 309.17 allocation. 309.18 (b) The limit in the allocation in paragraph (a) for a 309.19 municipality may be waived by the commissioner if the 309.20 commissioner of revenue finds that the municipality must provide 309.21 an incentive under section 469.1732 or 469.1734 that, by itself 309.22 or when aggregated with all other tax reductions granted by the 309.23 municipality under those provisions, exceeds the municipality's 309.24 maximum allocation under paragraph (a), in order to obtain or 309.25 retain a business in the city that would not occur in the 309.26 municipality without the incentive. The limit may be waived 309.27 only if the commissioner finds that the business for which the 309.28 tax incentives are to be provided: 309.29 (1) requires a private capital investment of at least 309.30 $1,000,000 within the city; 309.31 (2) employs at least 25 new or additional full-time 309.32 equivalent employees within the city; and 309.33 (3) pays its employees at the location in the city wages 309.34 that, on the average, will exceed the average wage paid in the 309.35 county in which the municipality is located. 309.36 Any waiver granted under this paragraph must be reported 310.1 within 60 days to the commissioner of finance and the chairs of 310.2 the house and senate tax committees. 310.3 Sec. 19. Minnesota Statutes 1998, section 469.169, is 310.4 amended by adding a subdivision to read: 310.5 Subd. 14. [ADDITIONAL BORDER CITY ALLOCATIONS.] In 310.6 addition to tax reductions authorized in subdivisions 7 to 12, 310.7 the commissioner may allocate $1,500,000 for tax reductions to 310.8 border city enterprise zones in cities located on the western 310.9 border of the state. The commissioner shall make allocations to 310.10 zones in cities on the western border on a per capita basis. 310.11 Allocations made under this subdivision may be used for tax 310.12 reductions as provided in section 469.171, or other offsets of 310.13 taxes imposed on or remitted by businesses located in the 310.14 enterprise zone, but only if the municipality determines that 310.15 the granting of the tax reduction or offset is necessary in 310.16 order to retain a business within or attract a business to the 310.17 zone. Limitations on allocations under subdivision 7, do not 310.18 apply to this allocation. 310.19 Sec. 20. Minnesota Statutes 1998, section 469.1735, is 310.20 amended by adding a subdivision to read: 310.21 Subd. 4. [APPROPRIATION; WAIVERS.] An amount sufficient to 310.22 fund any tax reductions under a waiver made by the commissioner 310.23 under section 469.169, subdivision 12, paragraph (b), is 310.24 appropriated to the commissioner of revenue from the general 310.25 fund. This appropriation may not be deducted from the dollar 310.26 limits under this section or section 469.169 or 469.1734. 310.27 Sec. 21. Laws 1997, Second Special Session chapter 2, 310.28 section 6, is amended to read: 310.29 Sec. 6. TRADE AND ECONOMIC 310.30 DEVELOPMENT 8,200,000 310.31 Notwithstanding the requirement in 310.32 Minnesota Statutes, section 469.169, 310.33 subdivision 11, as added by Laws 1997, 310.34 chapter 231, article 16, section 20, to 310.35 base allocations to zones in cities on 310.36 the state's western border on a per 310.37 capita basis, $1,200,000 is a one-time 310.38 appropriation from the general fund to 310.39 the commissioner of trade and economic 310.40 development for border city enterprise 310.41 competitiveness grants under Minnesota 310.42 Statutes, sections 469.166 to 469.173. 311.1 Funds shall be allocated to communities 311.2 with significant business losses that 311.3 are at risk of losing business tax base 311.4 due to noncompetitiveness with North 311.5 Dakota and South Dakota and shall be 311.6 available to communities for locally 311.7 administered measures to retain their 311.8 job base. Allocations made under this 311.9 paragraph may be used for tax 311.10 reductions as provided in Minnesota 311.11 Statutes, section 469.171, or other 311.12 offsets of taxes imposed on or remitted 311.13 by businesses located in the enterprise 311.14 zone, but only if the municipality 311.15 determines that the granting of the tax 311.16 reduction or offset is necessary in 311.17 order to retain a business within or 311.18 attract a business to the zone. 311.19 Limitations on allocations under 311.20 Minnesota Statutes, section 469.169, 311.21 subdivision 7, do not apply to this 311.22 appropriation. Enterprise zones that 311.23 receive allocations under this 311.24 paragraph may continue in effect for 311.25 purposes of those allocations 311.26 throughDecember 31, 1998June 30, 1999. 311.27 $6,000,000 is a one-time appropriation 311.28 from the general fund to the Minnesota 311.29 investment fund for grants to local 311.30 units of government for locally 311.31 administered operating loan programs 311.32 for businesses directly and adversely 311.33 affected by the floods. Loan criteria 311.34 and requirements shall be locally 311.35 established with approval by the 311.36 department. For the purposes of this 311.37 appropriation, Minnesota Statutes, 311.38 sections 116J.8731, subdivisions 3, 4, 311.39 5, and 7, and 116J.991, are waived. 311.40 Businesses that receive grants or loans 311.41 from this appropriation shall set goals 311.42 for jobs retained and wages paid within 311.43 the area designated under Presidential 311.44 Declaration of Major Disaster, DR-1175. 311.45 $1,000,000 is a one-time appropriation 311.46 from the petroleum tank release cleanup 311.47 fund to the commissioner of trade and 311.48 economic development. Notwithstanding 311.49 Minnesota Statutes, section 115C.08, 311.50 subdivision 4, as amended by Laws 1997, 311.51 chapter 200, article 2, section 4, 311.52 these funds are to be used for grants 311.53 to buy out property substantially 311.54 damaged by a petroleum tank release. 311.55 Sec. 22. [EXTENSIONS FOR OPERATION ALLIED FORCE SERVICE 311.56 MEMBERS.] 311.57 The limitations of time provided by Minnesota Statutes, 311.58 chapter 289A relating to administration of taxes, chapter 290 311.59 relating to income taxes, chapter 271 relating to the tax court 311.60 for filing returns, paying taxes, claiming refunds, commencing 311.61 action thereon, appealing to the tax court from orders relating 312.1 to income taxes, and the filing of petitions under chapter 278, 312.2 and appealing to the Supreme Court from decisions of the tax 312.3 court relating to income taxes are extended, as provided in the 312.4 special rule for section 7508 of the Internal Revenue Code in 312.5 section 1, paragraph (c), of Public Law Number 106-21. 312.6 Sec. 23. [TRANSFER.] 312.7 The commissioner of finance shall transfer $2,000,000 from 312.8 the conservation fund under Minnesota Statutes, section 40A.151, 312.9 to the general fund on July 1, 1999. 312.10 Sec. 24. [APPROPRIATION.] 312.11 $1,000,000 is appropriated to the commissioner of revenue 312.12 from the general fund for the cost of administering this act. 312.13 This appropriation is for fiscal year 2000 and any unspent 312.14 amount may be carried over to fiscal year 2001. This is a 312.15 one-time appropriation and not part of the budget base for the 312.16 department. 312.17 Sec. 25. [REPEALER.] 312.18 Minnesota Statutes 1998, sections 297E.12, subdivision 3; 312.19 297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed. 312.20 Sec. 26. [EFFECTIVE DATES.] 312.21 Sections 3, 6, 10, 13, 14, 18, 19, 21, and 25 are effective 312.22 the day following final enactment. 312.23 Section 4 is effective for checks received on or after the 312.24 day following final enactment. 312.25 Section 5 is effective the day following final enactment, 312.26 and applies to offers-in-compromise submitted after June 30, 312.27 1999. 312.28 Section 7, paragraph (a), is effective at the same time 312.29 that section 6015(b) of the Internal Revenue Code is effective 312.30 for federal tax purposes. Section 7, paragraph (b), is 312.31 effective for claims for innocent spouse relief, requests for 312.32 allocation of joint income tax liability, and taxes filed or 312.33 paid on or after the day following final enactment. 312.34 Section 8 is effective for orders issued on or after the 312.35 day following final enactment. 312.36 Section 9 is effective for disabilities existing on or 313.1 after the date of enactment for which claims for refund have not 313.2 expired under the time limit in Minnesota Statutes, section 313.3 289A.40, subdivision 1. Claims based upon reasonable cause must 313.4 be filed prior to the expiration of the repealed ten-year period 313.5 or within one year after the date of enactment, whichever is 313.6 earlier. 313.7 Section 11 is effective for claims for refund filed after 313.8 December 31, 1999. 313.9 Section 12 is effective for tax years ending on or after 313.10 the day following final enactment. 313.11 Section 15 is effective for concentrates produced in 1999 313.12 and thereafter. 313.13 Section 16 is effective for distributions in 2000 to 2009. 313.14 Section 17 is effective for aircraft registered after June 313.15 30, 1999. 313.16 Section 22 is effective at the same time section 1, 313.17 paragraph (c), of Public Law Number 106-21 becomes effective.