2nd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to the financing and operation of government 1.3 in this state; providing property tax rebates; 1.4 providing property tax reform; making changes to 1.5 property tax rates, levies, notices, hearings, 1.6 assessments, exemptions, aids, and credits; providing 1.7 for limited market value; extending levy limits; 1.8 providing bonding and levy authority, and other powers 1.9 to certain political subdivisions; making changes to 1.10 income, sales, excise, mortgage registry and deed, 1.11 premiums, and solid waste tax provisions; authorizing 1.12 the imposition of certain local sales, use, excise, 1.13 and lodging taxes; authorizing a sanitary sewer 1.14 district; modifying provisions relating to the budget 1.15 reserve and other accounts; making changes to tax 1.16 increment financing, regional development, housing, 1.17 and economic development provisions; providing for the 1.18 taxation of taconite and the distribution of taconite 1.19 taxes; modifying provisions relating to the taxation 1.20 and operation of gaming; providing for border city 1.21 zones; making miscellaneous changes to state and local 1.22 tax and administrative provisions; providing for 1.23 calculation of rent constituting property taxes; 1.24 changing the senior citizens' property tax deferral 1.25 program; changing certain fiscal note requirements; 1.26 establishing a tax study commission; providing for a 1.27 land transfer; appropriating money; amending Minnesota 1.28 Statutes 1996, sections 16A.102, subdivisions 1 and 2; 1.29 92.46, by adding a subdivision; 124.95, subdivisions 1.30 3, 4, and 5; 124A.02, subdivision 3; 240.15, 1.31 subdivision 1; 273.111, subdivision 9; 273.112, 1.32 subdivision 7; 273.13, subdivisions 22, 23, and 24; 1.33 273.135, subdivision 2; 273.1391, subdivision 2; 1.34 273.1398, subdivision 2; 275.07, by adding a 1.35 subdivision; 289A.08, subdivision 13; 290.06, 1.36 subdivision 2c, and by adding a subdivision; 290.067, 1.37 subdivisions 2 and 2a; 290.091, subdivision 2; 1.38 290.0921, subdivision 3a; 290.10; 290.21, subdivision 1.39 3; 290A.03, subdivision 3; 297A.01, subdivision 8; 1.40 297A.02, subdivisions 2 and 4; 297A.135, subdivision 1.41 4; 297A.25, by adding subdivisions; 297E.02, 1.42 subdivisions 1, 4, and 6; 298.225, subdivision 1; 1.43 298.28, subdivisions 4, 6, 9, 10, and 11; 360.653; 1.44 462.396, subdivision 2; 469.091, subdivision 1; 1.45 469.101, subdivision 1; 469.169, by adding a 1.46 subdivision; 469.170, by adding a subdivision; 2.1 469.171, subdivision 9; 469.174, by adding a 2.2 subdivision; 469.175, subdivisions 5, 6, 6a, and by 2.3 adding a subdivision; 469.176, subdivision 7; 469.177, 2.4 by adding a subdivision; 469.1771, subdivision 5, and 2.5 by adding a subdivision; 473.3915, subdivisions 2 and 2.6 3; 475.58, subdivision 1; 477A.0122, subdivision 6; 2.7 477A.03, subdivision 2; 477A.14; Minnesota Statutes 2.8 1997 Supplement, sections 3.986, subdivisions 2 and 4; 2.9 3.987, subdivisions 1 and 2; 3.988, subdivision 3; 2.10 3.989, subdivisions 1 and 2; 16A.152, subdivision 2; 2.11 124.239, subdivisions 5a and 5b; 124.315, subdivisions 2.12 4 and 5; 124.918, subdivision 8; 124.961; 270.67, 2.13 subdivision 2; 272.02, subdivision 1; 272.115, 2.14 subdivisions 4 and 5; 273.11, subdivision 1a; 273.124, 2.15 subdivision 14; 273.127, subdivision 3; 273.13, 2.16 subdivisions 22, 23, 24, 25, as amended, and 31; 2.17 273.1382, subdivisions 1 and 3; 275.065, subdivisions 2.18 3 and 6; 275.70, subdivision 5, and by adding a 2.19 subdivision; 275.71, subdivisions 2, 3, and 4; 275.72, 2.20 by adding a subdivision; 287.08; 289A.02, subdivision 2.21 7; 289A.11, subdivision 1; 289A.19, subdivision 2; 2.22 290.01, subdivisions 19, 19a, 19b, 19c, 19f, and 31; 2.23 290.0671, subdivision 1; 290.0673, subdivision 2; 2.24 290.091, subdivision 6; 290.371, subdivision 2; 2.25 290A.03, subdivisions 11, 13, and 15; 290B.03, 2.26 subdivision 1; 290B.04, subdivisions 1, 3, and by 2.27 adding subdivisions; 290B.05, subdivisions 1, 2, and 2.28 4; 290B.06; 290B.07; 290B.08, subdivision 2; 290B.09, 2.29 subdivision 1; 291.005, subdivision 1; 297A.01, 2.30 subdivisions 4 and 16; 297A.14, subdivision 4; 2.31 297A.25, subdivisions 3, 9, and 11; 297A.256, 2.32 subdivision 1; 297A.48, by adding a subdivision; 2.33 297B.03; 297G.01, by adding a subdivision; 297G.03, 2.34 subdivision 1; 297H.04, by adding a subdivision; 2.35 349.19, subdivision 2a; 462A.071, subdivisions 2, 4, 2.36 and 8; and 477A.011, subdivision 36; Laws 1971, 2.37 chapter 773, sections 1, as amended, and 2, as 2.38 amended; Laws 1980, chapter 511, sections 2 and 3; 2.39 Laws 1984, chapter 380, sections 1, as amended, and 2; 2.40 Laws 1992, chapter 511, articles 2, section 52, as 2.41 amended; and 8, section 33, subdivision 5; Laws 1994, 2.42 chapter 587, article 11, by adding a section; Laws 2.43 1995, chapter 255, article 3, section 2, subdivisions 2.44 1, as amended, and 4, as amended; Laws 1997, chapter 2.45 231, articles 1, section 16, as amended; 2, sections 2.46 63, subdivision 1, and 68, subdivision 3; 3, section 2.47 9; 5, section 20; 7, section 47; and 13, section 19; 2.48 and Laws 1997, Second Special Session chapter 2, 2.49 section 33; proposing coding for new law in Minnesota 2.50 Statutes, chapters 272; 273; 290; 365A; and 469; 2.51 repealing Minnesota Statutes 1996, sections 124A.697; 2.52 124A.698; 124A.70; 124A.71; 124A.711, subdivision 1; 2.53 124A.72; 124A.73; 289A.50, subdivision 6; and 365A.09; 2.54 Minnesota Statutes 1997 Supplement, sections 3.987, 2.55 subdivision 3; 14.431; and 124A.711, subdivision 2; 2.56 Laws 1992, chapter 499, article 7, section 31. 2.57 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.58 ARTICLE 1 2.59 PROPERTY TAX REBATES 2.60 Section 1. [1998 PROPERTY TAX REBATE.] 2.61 Subdivision 1. [PRINCIPAL RESIDENCE.] (a) A credit is 2.62 allowed against the tax imposed under Minnesota Statutes, 2.63 chapter 290, to an individual equal to 20 percent of the 3.1 qualified property tax paid before January 1, 1999, for taxes 3.2 assessed in 1997. The maximum credit is $1,500, less any credit 3.3 the individual claims under subdivision 2. 3.4 (b) For property owned and occupied by the individual 3.5 during 1998, qualified property tax means property taxes payable 3.6 as defined in Minnesota Statutes, section 290A.03, subdivision 3.7 13, assessed in 1997 and payable in 1998, except the requirement 3.8 that the taxpayer own and occupy the property on January 2, 3.9 1998, does not apply. The property tax must be deductible under 3.10 section 164 of the Internal Revenue Code to qualify. In the 3.11 case of agricultural land assessed as part of a homestead 3.12 pursuant to Minnesota Statutes, section 273.13, subdivision 23, 3.13 the owner is allowed to calculate the credit on all property 3.14 taxes on the homestead, except to the extent the owner is 3.15 required to furnish a rent certificate under section 290A.19 to 3.16 a tenant leasing a part of the farm homestead. 3.17 (c) For a renter, the qualified property tax means the 3.18 amount of rent constituting property taxes under Minnesota 3.19 Statutes, section 290A.03, subdivision 11, based on rent paid in 3.20 1998. If two or more renters could be claimants under Minnesota 3.21 Statutes, chapter 290A, with regard to the rent constituting 3.22 property taxes, the rules under Minnesota Statutes, section 3.23 290A.03, subdivision 8, paragraph (f), apply to determine the 3.24 amount of the credit for the individual. 3.25 (d) For an individual who both owned and rented principal 3.26 residences in calendar year 1998, qualified taxes are the sum of 3.27 the amounts under paragraphs (a) and (b). 3.28 Subd. 2. [SECOND HOME CREDIT.] (a) In addition to the 3.29 credit allowed under subdivision 1, an individual may claim a 3.30 credit equal to 20 percent of the net taxes paid before January 3.31 1, 1999, for taxes assessed in 1997 on a seasonal residential 3.32 property not used for commercial purposes, classified under 3.33 Minnesota Statutes, section 273.13, subdivision 25. The maximum 3.34 amount of the credit equals the lesser of: 3.35 (1) $500; or 3.36 (2) the liability for tax under Minnesota Statutes, 4.1 sections 290.06, subdivision 2c, and 290.091, for the taxable 4.2 year before allowance of refundable credits including the credit 4.3 under subdivision 1. 4.4 (b) For purposes of this subdivision, net taxes are taxes 4.5 after any credit allowed under Minnesota Statutes, sections 4.6 290.06, subdivision 25, and 290A.04, subdivision 2j. 4.7 (c) To qualify, the individual must own the property, in 4.8 whole or part, and the taxes must be deductible under section 4.9 164 of the Internal Revenue Code. 4.10 Subd. 3. [DEFINITIONS.] (a) For purposes of this section, 4.11 the following terms have the meanings given. 4.12 (b) "Individual" excludes a dependent as defined in 4.13 sections 151 and 152 of the Internal Revenue Code, disregarding 4.14 section 152(b)(3). 4.15 (c) "Internal Revenue Code" means the Internal Revenue Code 4.16 of 1986, as amended through December 31, 1998. 4.17 Subd. 4. [ADMINISTRATIVE PROVISIONS.] (a) If the amount of 4.18 the credit under this section exceeds the taxpayer's tax 4.19 liability under Minnesota Statutes, chapter 290, the 4.20 commissioner shall refund the excess. 4.21 (b) To claim a credit under this section, the taxpayer must 4.22 attach a copy of the property tax statement and certificate of 4.23 rent paid, as applicable, and provide any additional information 4.24 the commissioner requires. 4.25 (c) An amount sufficient to pay refunds under this section 4.26 is appropriated to the commissioner from the general fund. 4.27 (d) This credit applies to taxable years beginning after 4.28 December 31, 1997, and before January 1, 1999. 4.29 (e) Payment of the credit under this section is subject to 4.30 Minnesota Statutes, chapter 270A, and any other provision 4.31 applicable to refunds under Minnesota Statutes, chapter 290. 4.32 (f) The commissioner of revenue shall proportionately 4.33 reduce the percentage rate of the credit and the maximum credit 4.34 allowed under paragraph (a) to reduce the amount of credits 4.35 allowed that is sufficient to equal the additional aid 4.36 authorized to be paid under Minnesota Statutes, section 273.81, 5.1 over $1,500,000 for fiscal year 2000. 5.2 Sec. 2. [TRANSFER TO GENERAL FUND.] 5.3 Notwithstanding the provisions of Minnesota Statutes, 5.4 section 16A.1521, paragraph (b), $505,500,000 from the property 5.5 tax reform account is available to the general fund in an amount 5.6 equal to the rebates under section 1. This amount is available 5.7 beginning March 1, 1999, except as provided in section 5. 5.8 Sec. 3. [ADDITIONAL 1997 PROPERTY TAX REBATE.] 5.9 (a) For purposes of this section, "1997 rebate" means the 5.10 credit allowed under Laws 1997, chapter 231, article 1, section 5.11 16, as amended. 5.12 (b) Each individual or married couple allowed a 1997 5.13 property tax rebate is entitled to a payment equal to 50 percent 5.14 of the amount of the 1997 rebate allowed. The maximum amount of 5.15 this payment to an individual or married couple is $750. 5.16 (c) As soon as possible after July 1, 1998, but no later 5.17 than October 15, 1998, the commissioner of revenue shall make 5.18 the payments under this section to each individual who has filed 5.19 a return properly claiming a 1997 rebate by August 15, 1998. 5.20 For claims for a 1997 rebate filed after August 15, 1998, the 5.21 commissioner shall make the payment under this section no later 5.22 than 90 days after receipt of the return claiming the rebate. 5.23 Interest accrues, as provided for refunds under Minnesota 5.24 Statutes, chapter 290, beginning on October 15, 1998, for 5.25 payments based on returns claiming 1997 rebates filed by August 5.26 15, 1998, and beginning 90 days after the receipt of the return 5.27 for all other returns claiming 1997 rebates. 5.28 (d) An amount equal to payments required by this section is 5.29 appropriated on July 1, 1998, to the commissioner of revenue 5.30 from the general fund to make the payments required by this 5.31 section. 5.32 (e) This section is effective the day following final 5.33 enactment. 5.34 Sec. 4. Laws 1997, chapter 231, article 1, section 16, as 5.35 amended by Laws 1997, First Special Session chapter 5, section 5.36 35, and Laws 1997, Third Special Session chapter 3, section 11, 6.1 is amended to read: 6.2 Sec. 16. [PROPERTY TAX REBATE.] 6.3 (a) A credit is allowed against the tax imposed under 6.4 Minnesota Statutes, chapter 290, to an individual, other than as 6.5 a dependent, as defined in sections 151 and 152 of the Internal 6.6 Revenue Code, disregarding section 152(b)(3) of the Internal 6.7 Revenue Code, equal to 20 percent of the qualified property tax 6.8 paidin calendar year 1997before January 1, 1998, for taxes 6.9 assessed in 1996. 6.10 (b) For property owned and occupied by the taxpayer during 6.11 1997, qualified tax means property taxes payable as defined in 6.12 Minnesota Statutes, section 290A.03, subdivision 13, assessed in 6.13 1996 and payable in 1997, except the requirement that the 6.14 taxpayer own and occupy the property on January 2, 1997, does 6.15 not apply. The credit is allowed only to the individual and 6.16 spouse, if any, who paid the tax, whether directly, through an 6.17 escrow arrangement, or under a contractual agreement for the 6.18 purchase or sale of the property. In the case of agricultural 6.19 land assessed as part of a homestead pursuant to Minnesota 6.20 Statutes, section 273.13, subdivision 23, the owner is allowed 6.21 to calculate the credit on all property taxes on the homestead, 6.22 except to the extent the owner is required to furnish a rent 6.23 certificate under Minnesota Statutes, section 290A.19, to a 6.24 tenant leasing a part of the farm homestead. 6.25 (c) For a renter, the qualified property tax means the 6.26 amount of rent constituting property taxes under Minnesota 6.27 Statutes, section 290A.03, subdivision 11, based on rent paid in 6.28 1997. If two or more renters could be claimants under Minnesota 6.29 Statutes, chapter 290A with regard to the rent constituting 6.30 property taxes, the rules under Minnesota Statutes, section 6.31 290A.03, subdivision 8, paragraph (f), applies to determine the 6.32 amount of the credit for the individual. 6.33 (d) For an individual who both owned and rented principal 6.34 residences in calendar year 1997, qualified taxes are the sum of 6.35 the amounts under paragraphs (a) and (b). 6.36 (e) If the amount of the credit under this subdivision 7.1 exceeds the taxpayer's tax liability under this chapter, the 7.2 commissioner shall refund the excess. 7.3 (f) To claim a credit under this subdivision, the taxpayer 7.4 must attach a copy of the property tax statement and certificate 7.5 of rent paid, as applicable, and provide any additional 7.6 information the commissioner requires. 7.7 (g) An amount sufficient to pay refunds under this 7.8 subdivision is appropriated to the commissioner from the general 7.9 fund. 7.10 (h) This credit applies to taxable years beginning after 7.11 December 31, 1996, and before January 1, 1998. 7.12 (i) Payment of the credit under this section is subject to 7.13 Minnesota Statutes, chapter 270A, and any other provision 7.14 applicable to refunds under Minnesota Statutes, chapter 290. 7.15 Sec. 5. [APPROPRIATION.] 7.16 Up to $1,000,000 of the amount available in section 2 is 7.17 appropriated from the general fund to the commissioner of 7.18 revenue to administer section 1. This amount is available July 7.19 1, 1998. 7.20 ARTICLE 2 7.21 PROPERTY TAX REFORM 7.22 Section 1. Minnesota Statutes 1997 Supplement, section 7.23 124.239, subdivision 5a, is amended to read: 7.24 Subd. 5a. [ALTERNATIVE FACILITIES AID.] A district's 7.25 alternative facilities aid is the amount equal to the district's 7.26 annual debt service costs, provided that the amount does not 7.27 exceed the amount certified to be levied for those purposes for 7.28 taxes payable in 1997, or for a district that made a levy under 7.29 subdivision 5, paragraph (b), the lesser of the district's 7.30 annual levy amount, or one-half of the amount of levy that it 7.31 certified for that purpose for taxes payable in 1997. 7.32 Sec. 2. Minnesota Statutes 1997 Supplement, section 7.33 124.239, subdivision 5b, is amended to read: 7.34 Subd. 5b. [ALTERNATIVE FACILITIES APPROPRIATION.] (a) An 7.35 amount not to exceed$17,000,000$20,785,000 for fiscal year 7.36 2000 and $21,205,000 for fiscal year 2001 and each year 8.1 thereafter is appropriated from the general fund to the 8.2 commissioner of children, families, and learningfor fiscal year8.32000 and each year thereafterfor payment of alternative 8.4 facilities aid under subdivision 5a.The 2000 appropriation8.5includes $1,700,000 for 1999 and $15,300,000 for 2000.8.6 (b) The appropriation in paragraph (a) must be reduced by 8.7 the amount of any money specifically appropriated for the same 8.8 purpose in any year from any state fund. 8.9 Sec. 3. Minnesota Statutes 1997 Supplement, section 8.10 124.315, subdivision 4, is amended to read: 8.11 Subd. 4. [INTEGRATION LEVY.] A district may levy an amount 8.12 equal to4628 percent of the district's integration revenue as 8.13 defined in subdivision 3. 8.14 Sec. 4. Minnesota Statutes 1997 Supplement, section 8.15 124.315, subdivision 5, is amended to read: 8.16 Subd. 5. [INTEGRATION AID.] A district's integration aid 8.17 equals5472 percent of the district's integration revenue as 8.18 defined in subdivision 3. 8.19 Sec. 5. Minnesota Statutes 1996, section 124.95, 8.20 subdivision 3, is amended to read: 8.21 Subd. 3. [DEBT SERVICE EQUALIZATION REVENUE.] (a) For 8.22 fiscal years19952000 and later, the tier 1 debt service 8.23 equalization revenue of a district equals the lesser of: (1) 8.24 the amount raised by a levy of 14 percent times the adjusted net 8.25 tax capacity of the district; or (2) the eligible debt service 8.26 revenue minus the amount raised by a levy of ten percent times 8.27 the adjusted net tax capacity of the district. 8.28 (b) For fiscal year1993, debt service equalization revenue8.29equals one-third of the amount calculated in paragraph (a).8.30(c) For fiscal year 1994, debt service equalization revenue8.31equals two-thirds of the amount calculated in paragraph (a)2000 8.32 and later, tier 2 debt service equalization revenue equals the 8.33 greater of: (1) zero; or (2) the total debt service 8.34 equalization revenue of the district less the district's tier 1 8.35 debt service equalization revenue. 8.36 Sec. 6. Minnesota Statutes 1996, section 124.95, 9.1 subdivision 4, is amended to read: 9.2 Subd. 4. [EQUALIZED DEBT SERVICE LEVY.] (a) To obtain tier 9.3 1 debt service equalization revenue, a district must levy an 9.4 amount not to exceed the district's tier 1 debt service 9.5 equalization revenue times the lesser of one or the ratio of: 9.6 (1) the quotient derived by dividing the adjusted net tax 9.7 capacity of the district for the year before the year the levy 9.8 is certified by the actual pupil units in the district for the 9.9 school year ending in the year prior to the year the levy is 9.10 certified; to 9.11 (2) $4,707.50. 9.12 (b) To obtain tier 2 debt service equalization revenue, a 9.13 district must levy an amount not to exceed the district's tier 2 9.14 debt service equalization revenue times the lesser of one or the 9.15 ratio of: 9.16 (1) the quotient derived by dividing the adjusted net tax 9.17 capacity of the district for the year before the year the levy 9.18 is certified by the actual pupil units in the district for the 9.19 school year ending in the year prior to the year the levy is 9.20 certified; to 9.21 (2) $5,200. 9.22 Sec. 7. Minnesota Statutes 1996, section 124.95, 9.23 subdivision 5, is amended to read: 9.24 Subd. 5. [DEBT SERVICE EQUALIZATION AID.] (a) A district's 9.25 tier 1 debt service equalization aid is the difference between 9.26 the tier 1 debt service equalization revenue and the tier 1 9.27 equalized debt service levy. 9.28 (b) A district's tier 2 debt service equalization aid is 9.29 the difference between the tier 2 debt service equalization 9.30 revenue and the tier 2 equalized debt service levy. 9.31 (c) If the amount of debt service equalization aid actually 9.32 appropriated for the fiscal year in which this calculation is 9.33 made is insufficient to fully fund debt service equalization 9.34 aid, the commissioner shall prorate the amount of aid across all 9.35 eligible districts. 9.36 Sec. 8. Minnesota Statutes 1997 Supplement, section 10.1 124.961, is amended to read: 10.2 124.961 [DEBT SERVICE APPROPRIATION.] 10.3 (a)$35,480,000 in fiscal year 1998,$38,159,000 in fiscal 10.4 year 1999, and$38,390,000$39,190,000 in fiscal year 2000 and 10.5 each year thereafter is appropriated from the general fund to 10.6 the commissioner of children, families, and learning for payment 10.7 of debt service equalization aid under section 124.95. The 2000 10.8 appropriation includes $3,842,000 for 1999 and $34,548,000 for 10.9 2000. 10.10 (b) The appropriations in paragraph (a) must be reduced by 10.11 the amount of any money specifically appropriated for the same 10.12 purpose in any year from any state fund. 10.13 Sec. 9. Minnesota Statutes 1997 Supplement, section 10.14 273.127, subdivision 3, is amended to read: 10.15 Subd. 3. [CLASS 4C PROPERTIES.] For the market value of 10.16 properties that meet the criteria of subdivision 2, paragraph 10.17 (a), and which no longer qualify as a result of the eligibility 10.18 criteria specified in section 273.126, a class rate of 2.4 10.19 percent applies for taxes payable in 1999 and a class rate of 10.202.62.5 percent applies for taxes payable in 2000. 10.21 Sec. 10. Minnesota Statutes 1997 Supplement, section 10.22 273.13, subdivision 22, is amended to read: 10.23 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 10.24 23, real estate which is residential and used for homestead 10.25 purposes is class 1. The market value of class 1a property must 10.26 be determined based upon the value of the house, garage, and 10.27 land. 10.28For taxes payable in 1998 and thereafter,The first $75,000 10.29 of market value of class 1a property has a net class rate ofone10.30 0.875 percent of its market value; and the market value of class 10.31 1a property that exceeds $75,000 has a class rate of1.851.619 10.32 percent of its market value. 10.33 (b) Class 1b property includes homestead real estate or 10.34 homestead manufactured homes used for the purposes of a 10.35 homestead by 10.36 (1) any blind person, or the blind person and the blind 11.1 person's spouse; or 11.2 (2) any person, hereinafter referred to as "veteran," who: 11.3 (i) served in the active military or naval service of the 11.4 United States; and 11.5 (ii) is entitled to compensation under the laws and 11.6 regulations of the United States for permanent and total 11.7 service-connected disability due to the loss, or loss of use, by 11.8 reason of amputation, ankylosis, progressive muscular 11.9 dystrophies, or paralysis, of both lower extremities, such as to 11.10 preclude motion without the aid of braces, crutches, canes, or a 11.11 wheelchair; and 11.12 (iii) has acquired a special housing unit with special 11.13 fixtures or movable facilities made necessary by the nature of 11.14 the veteran's disability, or the surviving spouse of the 11.15 deceased veteran for as long as the surviving spouse retains the 11.16 special housing unit as a homestead; or 11.17 (3) any person who: 11.18 (i) is permanently and totally disabled and 11.19 (ii) receives 90 percent or more of total income from 11.20 (A) aid from any state as a result of that disability; or 11.21 (B) supplemental security income for the disabled; or 11.22 (C) workers' compensation based on a finding of total and 11.23 permanent disability; or 11.24 (D) social security disability, including the amount of a 11.25 disability insurance benefit which is converted to an old age 11.26 insurance benefit and any subsequent cost of living increases; 11.27 or 11.28 (E) aid under the federal Railroad Retirement Act of 1937, 11.29 United States Code Annotated, title 45, section 228b(a)5; or 11.30 (F) a pension from any local government retirement fund 11.31 located in the state of Minnesota as a result of that 11.32 disability; or 11.33 (G) pension, annuity, or other income paid as a result of 11.34 that disability from a private pension or disability plan, 11.35 including employer, employee, union, and insurance plans and 11.36 (iii) has household income as defined in section 290A.03, 12.1 subdivision 5, of $50,000 or less; or 12.2 (4) any person who is permanently and totally disabled and 12.3 whose household income as defined in section 290A.03, 12.4 subdivision 5, is 275 percent or less of the federal poverty 12.5 level. 12.6 Property is classified and assessed under clause (4) only 12.7 if the government agency or income-providing source certifies, 12.8 upon the request of the homestead occupant, that the homestead 12.9 occupant satisfies the disability requirements of this paragraph. 12.10 Property is classified and assessed pursuant to clause (1) 12.11 only if the commissioner of economic security certifies to the 12.12 assessor that the homestead occupant satisfies the requirements 12.13 of this paragraph. 12.14 Permanently and totally disabled for the purpose of this 12.15 subdivision means a condition which is permanent in nature and 12.16 totally incapacitates the person from working at an occupation 12.17 which brings the person an income. The first $32,000 market 12.18 value of class 1b property has a net class rate of .45 percent 12.19 of its market value. The remaining market value of class 1b 12.20 property has a net class rate using the rates for class 1 or 12.21 class 2a property, whichever is appropriate, of similar market 12.22 value. 12.23 (c) Class 1c property is commercial use real property that 12.24 abuts a lakeshore line and is devoted to temporary and seasonal 12.25 residential occupancy for recreational purposes but not devoted 12.26 to commercial purposes for more than 250 days in the year 12.27 preceding the year of assessment, and that includes a portion 12.28 used as a homestead by the owner, which includes a dwelling 12.29 occupied as a homestead by a shareholder of a corporation that 12.30 owns the resort or a partner in a partnership that owns the 12.31 resort, even if the title to the homestead is held by the 12.32 corporation or partnership. For purposes of this clause, 12.33 property is devoted to a commercial purpose on a specific day if 12.34 any portion of the property, excluding the portion used 12.35 exclusively as a homestead, is used for residential occupancy 12.36 and a fee is charged for residential occupancy.In order for a13.1property to be classified as class 1c, at least 40 percent of13.2the annual gross lodging receipts related to the property must13.3be from business conducted between Memorial Day weekend and13.4Labor Day weekend, and at least 60 percent of all bookings by13.5lodging guests during the year must be for periods of at least13.6two consecutive nights.Class 1c property has a class rate of 13.7 one percent of total market value with the following 13.8 limitation: the area of the property must not exceed 100 feet 13.9 of lakeshore footage for each cabin or campsite located on the 13.10 property up to a total of 800 feet and 500 feet in depth, 13.11 measured away from the lakeshore. 13.12 (d) Class 1d property includes structures that meet all of 13.13 the following criteria: 13.14 (1) the structure is located on property that is classified 13.15 as agricultural property under section 273.13, subdivision 23; 13.16 (2) the structure is occupied exclusively by seasonal farm 13.17 workers during the time when they work on that farm, and the 13.18 occupants are not charged rent for the privilege of occupying 13.19 the property, provided that use of the structure for storage of 13.20 farm equipment and produce does not disqualify the property from 13.21 classification under this paragraph; 13.22 (3) the structure meets all applicable health and safety 13.23 requirements for the appropriate season; and 13.24 (4) the structure is not saleable as residential property 13.25 because it does not comply with local ordinances relating to 13.26 location in relation to streets or roads. 13.27 The market value of class 1d property has the same class 13.28 rates as class 1a property under paragraph (a). 13.29 Sec. 11. Minnesota Statutes 1997 Supplement, section 13.30 273.13, subdivision 23, is amended to read: 13.31 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 13.32 land including any improvements that is homesteaded. The market 13.33 value of the house and garage and immediately surrounding one 13.34 acre of land has the same class rates as class 1a property under 13.35 subdivision 22. The value of the remaining land including 13.36 improvements up to $115,000 has a net class rate of0.40.33 14.1 percent of market value. The remaining value of class 2a 14.2 property over $115,000 of market value that does not exceed 320 14.3 acres has a net class rate of0.90.7875 percent of market value. 14.4 The remaining property over the $115,000 market value in excess 14.5 of 320 acres has a class rate of1.41.225 percent of market 14.6 value. 14.7 (b) Class 2b property is (1) real estate, rural in 14.8 character and used exclusively for growing trees for timber, 14.9 lumber, and wood and wood products; (2) real estate that is not 14.10 improved with a structure and is used exclusively for growing 14.11 trees for timber, lumber, and wood and wood products, if the 14.12 owner has participated or is participating in a cost-sharing 14.13 program for afforestation, reforestation, or timber stand 14.14 improvement on that particular property, administered or 14.15 coordinated by the commissioner of natural resources; (3) real 14.16 estate that is nonhomestead agricultural land; or (4) a landing 14.17 area or public access area of a privately owned public use 14.18 airport. Class 2b property has a net class rate of1.41.225 14.19 percent of market value. 14.20 (c) Agricultural land as used in this section means 14.21 contiguous acreage of ten acres or more, used during the 14.22 preceding year for agricultural purposes. "Agricultural 14.23 purposes" as used in this section means the raising or 14.24 cultivation of agricultural products or enrollment in the 14.25 Reinvest in Minnesota program under sections 103F.501 to 14.26 103F.535 or the federal Conservation Reserve Program as 14.27 contained in Public Law Number 99-198. Contiguous acreage on 14.28 the same parcel, or contiguous acreage on an immediately 14.29 adjacent parcel under the same ownership, may also qualify as 14.30 agricultural land, but only if it is pasture, timber, waste, 14.31 unusable wild land, or land included in state or federal farm 14.32 programs. Agricultural classification for property shall be 14.33 determined excluding the house, garage, and immediately 14.34 surrounding one acre of land, and shall not be based upon the 14.35 market value of any residential structures on the parcel or 14.36 contiguous parcels under the same ownership. 15.1 (d) Real estate, excluding the house, garage, and 15.2 immediately surrounding one acre of land, of less than ten acres 15.3 which is exclusively and intensively used for raising or 15.4 cultivating agricultural products, shall be considered as 15.5 agricultural land. 15.6 Land shall be classified as agricultural even if all or a 15.7 portion of the agricultural use of that property is the leasing 15.8 to, or use by another person for agricultural purposes. 15.9 Classification under this subdivision is not determinative 15.10 for qualifying under section 273.111. 15.11 The property classification under this section supersedes, 15.12 for property tax purposes only, any locally administered 15.13 agricultural policies or land use restrictions that define 15.14 minimum or maximum farm acreage. 15.15 (e) The term "agricultural products" as used in this 15.16 subdivision includes production for sale of: 15.17 (1) livestock, dairy animals, dairy products, poultry and 15.18 poultry products, fur-bearing animals, horticultural and nursery 15.19 stock described in sections 18.44 to 18.61, fruit of all kinds, 15.20 vegetables, forage, grains, bees, and apiary products by the 15.21 owner; 15.22 (2) fish bred for sale and consumption if the fish breeding 15.23 occurs on land zoned for agricultural use; 15.24 (3) the commercial boarding of horses if the boarding is 15.25 done in conjunction with raising or cultivating agricultural 15.26 products as defined in clause (1); 15.27 (4) property which is owned and operated by nonprofit 15.28 organizations used for equestrian activities, excluding racing; 15.29 and 15.30 (5) game birds and waterfowl bred and raised for use on a 15.31 shooting preserve licensed under section 97A.115. 15.32 (f) If a parcel used for agricultural purposes is also used 15.33 for commercial or industrial purposes, including but not limited 15.34 to: 15.35 (1) wholesale and retail sales; 15.36 (2) processing of raw agricultural products or other goods; 16.1 (3) warehousing or storage of processed goods; and 16.2 (4) office facilities for the support of the activities 16.3 enumerated in clauses (1), (2), and (3), 16.4 the assessor shall classify the part of the parcel used for 16.5 agricultural purposes as class 1b, 2a, or 2b, whichever is 16.6 appropriate, and the remainder in the class appropriate to its 16.7 use. The grading, sorting, and packaging of raw agricultural 16.8 products for first sale is considered an agricultural purpose. 16.9 A greenhouse or other building where horticultural or nursery 16.10 products are grown that is also used for the conduct of retail 16.11 sales must be classified as agricultural if it is primarily used 16.12 for the growing of horticultural or nursery products from seed, 16.13 cuttings, or roots and occasionally as a showroom for the retail 16.14 sale of those products. Use of a greenhouse or building only 16.15 for the display of already grown horticultural or nursery 16.16 products does not qualify as an agricultural purpose. 16.17 The assessor shall determine and list separately on the 16.18 records the market value of the homestead dwelling and the one 16.19 acre of land on which that dwelling is located. If any farm 16.20 buildings or structures are located on this homesteaded acre of 16.21 land, their market value shall not be included in this separate 16.22 determination. 16.23 (g) To qualify for classification under paragraph (b), 16.24 clause (4), a privately owned public use airport must be 16.25 licensed as a public airport under section 360.018. For 16.26 purposes of paragraph (b), clause (4), "landing area" means that 16.27 part of a privately owned public use airport properly cleared, 16.28 regularly maintained, and made available to the public for use 16.29 by aircraft and includes runways, taxiways, aprons, and sites 16.30 upon which are situated landing or navigational aids. A landing 16.31 area also includes land underlying both the primary surface and 16.32 the approach surfaces that comply with all of the following: 16.33 (i) the land is properly cleared and regularly maintained 16.34 for the primary purposes of the landing, taking off, and taxiing 16.35 of aircraft; but that portion of the land that contains 16.36 facilities for servicing, repair, or maintenance of aircraft is 17.1 not included as a landing area; 17.2 (ii) the land is part of the airport property; and 17.3 (iii) the land is not used for commercial or residential 17.4 purposes. 17.5 The land contained in a landing area under paragraph (b), clause 17.6 (4), must be described and certified by the commissioner of 17.7 transportation. The certification is effective until it is 17.8 modified, or until the airport or landing area no longer meets 17.9 the requirements of paragraph (b), clause (4). For purposes of 17.10 paragraph (b), clause (4), "public access area" means property 17.11 used as an aircraft parking ramp, apron, or storage hangar, or 17.12 an arrival and departure building in connection with the airport. 17.13 Sec. 12. Minnesota Statutes 1997 Supplement, section 17.14 273.13, subdivision 24, is amended to read: 17.15 Subd. 24. [CLASS 3.] (a) Commercial and industrial 17.16 property and utility real and personal property, except class 5 17.17 property as identified in subdivision 31, clause (1), is class 17.18 3a. Each parcel has a class rate of2.72.3625 percent of the 17.19 first tier of market value, and4.03.5 percent of the remaining 17.20 market value, except that in the case of contiguous parcels of 17.21 commercial and industrial property owned by the same person or 17.22 entity, only the value equal to the first-tier value of the 17.23 contiguous parcels qualifies for the reduced class rate. For 17.24 the purposes of this subdivision, the first tier means the first 17.25 $150,000 of market value. In the case of utility property owned 17.26 by one person or entity, only one parcel in each county has a 17.27 reduced class rate on the first tier of market value. 17.28 For purposes of this paragraph, parcels are considered to 17.29 be contiguous even if they are separated from each other by a 17.30 road, street, vacant lot, waterway, or other similar intervening 17.31 type of property. 17.32 (b) Employment property defined in section 469.166, during 17.33 the period provided in section 469.170, shall constitute class 17.34 3b and has a class rate of 2.3 percent of the first $50,000 of 17.35 market value and3.63.5 percent of the remainder, except that 17.36 for employment property located in a border city enterprise zone 18.1 designated pursuant to section 469.168, subdivision 4, paragraph 18.2 (c), the class rate of the first tier of market value and the 18.3 class rate of the remainder is determined under paragraph (a), 18.4 unless the governing body of the city designated as an 18.5 enterprise zone determines that a specific parcel shall be 18.6 assessed pursuant to the first clause of this sentence. The 18.7 governing body may provide for assessment under the first clause 18.8 of the preceding sentence only for property which is located in 18.9 an area which has been designated by the governing body for the 18.10 receipt of tax reductions authorized by section 469.171, 18.11 subdivision 1. 18.12 (c) Structures which are (i) located on property classified 18.13 as class 3a, (ii) constructed under an initial building permit 18.14 issued after January 2, 1996, (iii) located in a transit zone as 18.15 defined under section 473.3915, subdivision 3, (iv) located 18.16 within the boundaries of a school district, and (v) not 18.17 primarily used for retail or transient lodging purposes, shall 18.18 have a class rate equal to 85 percent of the class rate of the 18.19 second tier of the commercial property rate under paragraph (a) 18.20 on any portion of the market value that does not qualify for the 18.21 first tier class rate under paragraph (a). As used in item (v), 18.22 a structure is primarily used for retail or transient lodging 18.23 purposes if over 50 percent of its square footage is used for 18.24 those purposes.The four percent rateA class rate equal to 85 18.25 percent of the class rate of the second tier of the commercial 18.26 property rate under paragraph (a) shall also apply to 18.27 improvements to existing structures that meet the requirements 18.28 of items (i) to (v) if the improvements are constructed under an 18.29 initial building permit issued after January 2, 1996, even if 18.30 the remainder of the structure was constructed prior to January 18.31 2, 1996. For the purposes of this paragraph, a structure shall 18.32 be considered to be located in a transit zone if any portion of 18.33 the structure lies within the zone. If any property once 18.34 eligible for treatment under this paragraph ceases to remain 18.35 eligible due to revisions in transit zone boundaries, the 18.36 property shall continue to receive treatment under this 19.1 paragraph for a period of three years. 19.2 Sec. 13. Minnesota Statutes 1997 Supplement, section 19.3 273.13, subdivision 25, as amended by Laws 1997, Third Special 19.4 Session chapter 3, section 28, is amended to read: 19.5 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 19.6 estate containing four or more units and used or held for use by 19.7 the owner or by the tenants or lessees of the owner as a 19.8 residence for rental periods of 30 days or more. Class 4a also 19.9 includes hospitals licensed under sections 144.50 to 144.56, 19.10 other than hospitals exempt under section 272.02, and contiguous 19.11 property used for hospital purposes, without regard to whether 19.12 the property has been platted or subdivided. Class 4a property 19.13 in a city with a population of 5,000 or less, that is (1) 19.14 located outside of the metropolitan area, as defined in section 19.15 473.121, subdivision 2, or outside any county contiguous to the 19.16 metropolitan area, and (2) whose city boundary is at least 15 19.17 miles from the boundary of any city with a population greater 19.18 than 5,000 has a class rate of2.32.15 percent of market value. 19.19 All other class 4a property has a class rate of2.92.5 percent 19.20 of market value. For purposes of this paragraph, population has 19.21 the same meaning given in section 477A.011, subdivision 3. 19.22 (b) Class 4b includes: 19.23 (1) residential real estate containing less than four units 19.24 that does not qualify as class 4bb, other than seasonal 19.25 residential, and recreational; 19.26 (2) manufactured homes not classified under any other 19.27 provision; 19.28 (3) a dwelling, garage, and surrounding one acre of 19.29 property on a nonhomestead farm classified under subdivision 23, 19.30 paragraph (b) containing two or three units; 19.31 (4) unimproved property that is classified residential as 19.32 determined under section 273.13, subdivision 33. 19.33 Class 4b property has a class rate of2.11.7 percent of 19.34 market value. 19.35 (c) Class 4bb includes: 19.36 (1) nonhomestead residential real estate containing one 20.1 unit, other than seasonal residential, and recreational; and 20.2 (2) a single family dwelling, garage, and surrounding one 20.3 acre of property on a nonhomestead farm classified under 20.4 subdivision 23, paragraph (b). 20.5 Class 4bb has a class rate of1.91.25 percent on the first 20.6 $75,000 of market value and a class rate of2.11.7 percent of 20.7 its market value that exceeds $75,000. 20.8 Property that has been classified as seasonal recreational 20.9 residential property at any time during which it has been owned 20.10 by the current owner or spouse of the current owner does not 20.11 qualify for class 4bb. 20.12 (d) Class 4c property includes: 20.13 (1) except as provided in subdivision 22, paragraph (c), 20.14 real property devoted to temporary and seasonal residential 20.15 occupancy for recreation purposes, including real property 20.16 devoted to temporary and seasonal residential occupancy for 20.17 recreation purposes and not devoted to commercial purposes for 20.18 more than 250 days in the year preceding the year of 20.19 assessment. For purposes of this clause, property is devoted to 20.20 a commercial purpose on a specific day if any portion of the 20.21 property is used for residential occupancy, and a fee is charged 20.22 for residential occupancy. In order for a property to be 20.23 classified as class 4c, seasonal recreational residential for 20.24 commercial purposes,at least 40 percent of the annual gross20.25lodging receipts related to the property must be from business20.26conducted between Memorial Day weekend and Labor Day weekend and20.27 at least 60 percent of all bookings by lodging guests during the 20.28 year must be for periods of at least two consecutive nights. 20.29 Class 4c also includes commercial use real property used 20.30 exclusively for recreational purposes in conjunction with class 20.31 4c property devoted to temporary and seasonal residential 20.32 occupancy for recreational purposes, up to a total of two acres, 20.33 provided the property is not devoted to commercial recreational 20.34 use for more than 250 days in the year preceding the year of 20.35 assessment and is located within two miles of the class 4c 20.36 property with which it is used. Class 4c property classified in 21.1 this clause also includes the remainder of class 1c resorts. 21.2 Owners of real property devoted to temporary and seasonal 21.3 residential occupancy for recreation purposes and all or a 21.4 portion of which was devoted to commercial purposes for not more 21.5 than 250 days in the year preceding the year of assessment 21.6 desiring classification as class 1c or 4c, must submit a 21.7 declaration to the assessor designating the cabins or units 21.8 occupied for 250 days or less in the year preceding the year of 21.9 assessment by January 15 of the assessment year. Those cabins 21.10 or units and a proportionate share of the land on which they are 21.11 located will be designated class 1c or 4c as otherwise 21.12 provided. The remainder of the cabins or units and a 21.13 proportionate share of the land on which they are located will 21.14 be designated as class 3a. The owner of property desiring 21.15 designation as class 1c or 4c property must provide guest 21.16 registers or other records demonstrating that the units for 21.17 which class 1c or 4c designation is sought were not occupied for 21.18 more than 250 days in the year preceding the assessment if so 21.19 requested. The portion of a property operated as a (1) 21.20 restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 21.21 facility operated on a commercial basis not directly related to 21.22 temporary and seasonal residential occupancy for recreation 21.23 purposes shall not qualify for class 1c or 4c; 21.24 (2) qualified property used as a golf course if: 21.25 (i) any portion of the property is located within a county 21.26 that has a population of less than 50,000, or within a county 21.27 containing a golf course owned by a municipality, the county, or 21.28 a special taxing district; 21.29 (ii) it is open to the public on a daily fee basis. It may 21.30 charge membership fees or dues, but a membership fee may not be 21.31 required in order to use the property for golfing, and its green 21.32 fees for golfing must be comparable to green fees typically 21.33 charged by municipal courses; and 21.34 (iii) it meets the requirements of section 273.112, 21.35 subdivision 3, paragraph (d). 21.36 A structure used as a clubhouse, restaurant, or place of 22.1 refreshment in conjunction with the golf course is classified as 22.2 class 3a property. 22.3 (3) real property up to a maximum of one acre of land owned 22.4 by a nonprofit community service oriented organization; provided 22.5 that the property is not used for a revenue-producing activity 22.6 for more than six days in the calendar year preceding the year 22.7 of assessment and the property is not used for residential 22.8 purposes on either a temporary or permanent basis. For purposes 22.9 of this clause, a "nonprofit community service oriented 22.10 organization" means any corporation, society, association, 22.11 foundation, or institution organized and operated exclusively 22.12 for charitable, religious, fraternal, civic, or educational 22.13 purposes, and which is exempt from federal income taxation 22.14 pursuant to section 501(c)(3), (10), or (19) of the Internal 22.15 Revenue Code of 1986, as amended through December 31, 1990. For 22.16 purposes of this clause, "revenue-producing activities" shall 22.17 include but not be limited to property or that portion of the 22.18 property that is used as an on-sale intoxicating liquor or 3.2 22.19 percent malt liquor establishment licensed under chapter 340A, a 22.20 restaurant open to the public, bowling alley, a retail store, 22.21 gambling conducted by organizations licensed under chapter 349, 22.22 an insurance business, or office or other space leased or rented 22.23 to a lessee who conducts a for-profit enterprise on the 22.24 premises. Any portion of the property which is used for 22.25 revenue-producing activities for more than six days in the 22.26 calendar year preceding the year of assessment shall be assessed 22.27 as class 3a. The use of the property for social events open 22.28 exclusively to members and their guests for periods of less than 22.29 24 hours, when an admission is not charged nor any revenues are 22.30 received by the organization shall not be considered a 22.31 revenue-producing activity; 22.32 (4) post-secondary student housing of not more than one 22.33 acre of land that is owned by a nonprofit corporation organized 22.34 under chapter 317A and is used exclusively by a student 22.35 cooperative, sorority, or fraternity for on-campus housing or 22.36 housing located within two miles of the border of a college 23.1 campus; and 23.2 (5) manufactured home parks as defined in section 327.14, 23.3 subdivision 3. 23.4 Class 4c property hasathe following classrate of 2.123.5percent of market value, except thatrates: (i) for each parcel 23.6 of seasonal residential recreational property not used for 23.7 commercial purposes the first $75,000 of market value has a 23.8 class rate of1.41.3 percent, and the market value that exceeds 23.9 $75,000 has a class rate of2.52.3 percent,and(ii) 23.10 manufactured home parks assessed under clause (5) have a class 23.11 rate of two percent; (iii) property described in paragraph (d), 23.12 clause (4), has the same class rate applicable to the first 23.13 $75,000 of class 4bb nonhomestead residential real estate under 23.14 paragraph (c); and (iv) all other class 4c property has a class 23.15 rate of 2.1 percent. 23.16 (e) Class 4d property is qualifying low-income rental 23.17 housing certified to the assessor by the housing finance agency 23.18 under sections 273.126 and 462A.071. Class 4d includes land in 23.19 proportion to the total market value of the building that is 23.20 qualifying low-income rental housing. For all properties 23.21 qualifying as class 4d, the market value determined by the 23.22 assessor must be based on the normal approach to value using 23.23 normal unrestricted rents. 23.24 Class 4d property consisting of a structure, initial 23.25 construction of which was begun after January 1, 1999, has a 23.26 class rate of 2.5 percent of market value; all other class 4d 23.27 property has a class rate of one percent of market value. 23.28 (f) Class 4e property consists of the residential portion 23.29 of any structure located within a city that was converted from 23.30 nonresidential use to residential use, provided that: 23.31 (1) the structure had formerly been used as a warehouse; 23.32 (2) the structure was originally constructed prior to 1940; 23.33 (3) the conversion was done after December 31, 1995, but 23.34 before January 1, 2003; and 23.35 (4) the conversion involved an investment of at least 23.36 $25,000 per residential unit. 24.1 Class 4e property has a class rate of 2.3 percent, provided 24.2 that a structure is eligible for class 4e classification only in 24.3 the 12 assessment years immediately following the conversion. 24.4 Sec. 14. Minnesota Statutes 1997 Supplement, section 24.5 273.13, subdivision 31, is amended to read: 24.6 Subd. 31. [CLASS 5.] Class 5 property includes: 24.7 (1) tools, implements, and machinery of an electric 24.8 generating, transmission, or distribution system or a pipeline 24.9 system transporting or distributing water, gas, crude oil, or 24.10 petroleum products or mains and pipes used in the distribution 24.11 of steam or hot or chilled water for heating or cooling 24.12 buildings, which are fixtures; 24.13 (2) unmined iron ore and low-grade iron-bearing formations 24.14 as defined in section 273.14; and 24.15 (3) all other property not otherwise classified. 24.16 Class 5 property has a class rate of4.03.5 percent of 24.17 market value for taxes payable in19981999 and thereafter. 24.18 Sec. 15. Minnesota Statutes 1997 Supplement, section 24.19 273.1382, subdivision 1, is amended to read: 24.20 Subdivision 1. [EDUCATION HOMESTEAD CREDIT.] Each year, 24.21 beginning with property taxes payable in 1998, the respective 24.22 county auditors shall determine the initial tax rate for each 24.23 school district for the general education levy certified under 24.24 section 124A.23, subdivision 2 or 3. That rate plus the school 24.25 district's education homestead credit tax rate adjustment under 24.26 section 275.08, subdivision 1e, shall be the general education 24.27 homestead credit local tax rate for the district. The auditor 24.28 shall then determine a general education homestead credit for 24.29 each homestead within the county equal to3252 percent of the 24.30 general education homestead credit local tax rate times the net 24.31 tax capacity of the homestead for the taxes payable year. The 24.32 amount of general education homestead credit for a homestead may 24.33 not exceed$225$290. In the case of an agricultural homestead, 24.34 only the net tax capacity of the house, garage, and surrounding 24.35 one acre of land shall be used in determining the property's 24.36 education homestead credit. 25.1 Sec. 16. Minnesota Statutes 1997 Supplement, section 25.2 273.1382, subdivision 3, is amended to read: 25.3 Subd. 3. [APPROPRIATION.] An amount sufficient to make the 25.4 payments required by this section is annually appropriated from 25.5 the general fund to the commissioner of children, families, and 25.6 learning, except that for fiscal years 2000 and 2001 the amount 25.7 necessary to make the increased payments attributable to section 25.8 15 is appropriated from the property tax reform account. 25.9 Sec. 17. Minnesota Statutes 1996, section 273.1398, 25.10 subdivision 2, is amended to read: 25.11 Subd. 2. [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 25.12 Homestead and agricultural credit aid for each unique taxing 25.13 jurisdiction equals the product of (1) the homestead and 25.14 agricultural credit aid base, and (2) the growth adjustment 25.15 factor, plus the net tax capacity adjustment and the fiscal 25.16 disparity adjustment. Beginning with homestead and agricultural 25.17 credit aid payable in 1999, each county that receives an amount 25.18 in calendar year 1999 under section 477A.0122 as a result of the 25.19 appropriation in section 477A.03, subdivision 2, paragraph (c), 25.20 clause (3), shall have its homestead and agricultural credit aid 25.21 permanently reduced by an equal amount. 25.22 Sec. 18. [273.80] [DISTRESSED HOMESTEAD REINVESTMENT 25.23 EXEMPTION.] 25.24 Subdivision 1. [DEFINITIONS.] For purposes of this 25.25 section, the following terms shall have the meanings given. 25.26 "Substantially condition deficient" means that repairs 25.27 estimated to cost at least $20,000 are necessary to restore a 25.28 house to sound operating condition, according to prevailing 25.29 costs of home improvements for the area. 25.30 "Sound operating condition" means that a home meets minimal 25.31 health and safety standards for residential occupancy under 25.32 applicable housing or building codes. 25.33 "Trained residential rehabilitation consultant" means a 25.34 person who is employed by a housing services organization 25.35 recognized by resolution of the city council of the city in 25.36 which the property is located, and who has been trained in 26.1 residential housing rehabilitation. 26.2 Subd. 2. [ELIGIBILITY.] An owner-occupied, detached, 26.3 single family dwelling is eligible for treatment under this 26.4 section if it: 26.5 (1) is located in a city of the first class; 26.6 (2) is located in a census tract where the median value of 26.7 owner-occupied homes is less than 80 percent of the median value 26.8 of owner-occupied homes for the entire city, according to the 26.9 1998 assessment; 26.10 (3) has an estimated market value which is less than 80 26.11 percent of the median value of owner-occupied homes for the 26.12 entire city, according to the 1998 assessment; and 26.13 (4) has been declared to be substantially condition 26.14 deficient, by a trained residential rehabilitation consultant. 26.15 Subd. 3. [QUALIFICATION.] A home which meets the 26.16 eligibility requirements of subdivision 2 before May 1, 2003, 26.17 shall qualify for the tax benefits provided under this section 26.18 whenever a trained residential rehabilitation consultant 26.19 certifies that the home is in sound operating condition, 26.20 provided that all necessary permits had been obtained where 26.21 required. 26.22 Subd. 4. [TAX BENEFITS.] A property containing a home 26.23 which qualifies under subdivision 3 shall be exempt from all 26.24 property taxes for taxes payable in the five years immediately 26.25 following its certification under subdivision 3, provided that 26.26 the property continues to be owned and occupied by the same 26.27 person who owned it when the home was certified as substantially 26.28 condition deficient. 26.29 Subd. 5. [ASSESSMENT; RECORD.] The assessor may require 26.30 whatever information is necessary to determine eligibility for 26.31 the tax benefit conferred by this section. During the time that 26.32 the property is exempt, the assessor shall continue to value the 26.33 property and record its current value on the tax rolls. 26.34 Sec. 19. [273.81] [LOW-INCOME HOUSING AID.] 26.35 Subdivision 1. [ELIGIBILITY.] Each year, for all class 4d 26.36 property with a class rate of one percent in the current 27.1 assessment year, the assessor shall determine the difference 27.2 between the actual net tax capacity and the net tax capacity 27.3 that would be determined for the property if the class rates for 27.4 taxes payable in 1998 were in effect in the current assessment 27.5 year. Each year, a city shall be eligible for aid equal to (i) 27.6 the amount by which the sum of the differences for all class 4d 27.7 properties with a class rate of one percent in the city exceeds 27.8 one percent of the city's total taxable net tax capacity for 27.9 taxes payable in 1998, multiplied by (ii) the city's average net 27.10 tax capacity tax rate for taxes payable in 1998. 27.11 Subd. 2. [CERTIFICATION.] The county assessor shall notify 27.12 the commissioner of revenue of the amount determined under 27.13 subdivision 1, clause (i), for any city which qualifies for aid 27.14 under this section by June 30 of each assessment year, in a form 27.15 prescribed by the commissioner. The commissioner shall notify 27.16 each city of its qualifying aid amount by August 15 of the 27.17 assessment year. The aid determined under this section is a 27.18 subtraction from the city's levy limit under sections 275.70 to 27.19 275.74. 27.20 Subd. 3. [APPROPRIATION; PAYMENT.] (a) The commissioner 27.21 shall pay each city its qualifying aid amount on July 15 of the 27.22 year following the assessment year. An amount sufficient to pay 27.23 the aid authorized under this section is appropriated to the 27.24 commissioner of revenue from the property tax reform account in 27.25 fiscal years 2000 and 2001, and from the general fund in fiscal 27.26 years 2002 and thereafter. 27.27 (b) Beginning for fiscal year 2001, the amount of aid 27.28 appropriated under this section may not exceed $1,500,000 after 27.29 deducting the cost of the reimbursement under Minnesota 27.30 Statutes, section 273.13, subdivision 25b. 27.31 (c) If the total amount of aid that would otherwise be 27.32 payable under the formula in this section exceeds the maximum 27.33 allowed under paragraph (b), the amount of aid for each city is 27.34 reduced proportionately to equal the limit. 27.35 Sec. 20. [273.82] [CLASS 4d CREDIT.] 27.36 Property taxes due and payable on class 4d property on 28.1 which initial construction was begun after January 1, 1999, 28.2 shall be reduced by an amount equal to 60 percent of the 28.3 property's gross tax. The total amount credited by each county 28.4 shall be reported to the commissioner of revenue by June 1 of 28.5 the year in which taxes are payable, in a form prescribed by the 28.6 commissioner. The commissioner shall make payments to counties 28.7 for reimbursement of the credit on October 1 of the year in 28.8 which taxes are payable. Each county auditor shall distribute 28.9 the payments to local taxing jurisdictions in amounts equal to 28.10 the amount of taxes reduced by the credit. An amount sufficient 28.11 to fund the credit authorized under this section is annually 28.12 appropriated to the commissioner of revenue from the general 28.13 fund in fiscal years 2002 and subsequent years. 28.14 Sec. 21. Minnesota Statutes 1997 Supplement, section 28.15 290A.03, subdivision 11, is amended to read: 28.16 Subd. 11. [RENT CONSTITUTING PROPERTY TAXES.] "Rent 28.17 constituting property taxes" means1819 percent of the gross 28.18 rent actually paid in cash, or its equivalent, or the portion of 28.19 rent paid in lieu of property taxes, in any calendar year by a 28.20 claimant for the right of occupancy of the claimant's Minnesota 28.21 homestead in the calendar year, and which rent constitutes the 28.22 basis, in the succeeding calendar year of a claim for relief 28.23 under this chapter by the claimant. 28.24 Sec. 22. Minnesota Statutes 1997 Supplement, section 28.25 290A.03, subdivision 13, is amended to read: 28.26 Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes 28.27 payable" means the property tax exclusive of special 28.28 assessments, penalties, and interest payable on a claimant's 28.29 homestead after deductions made under sections 273.135, 28.30 273.1382, 273.1391, 273.42, subdivision 2, and any other state 28.31 paid property tax credits in any calendar year. In the case of 28.32 a claimant who makes ground lease payments, "property taxes 28.33 payable" includes the amount of the payments directly 28.34 attributable to the property taxes assessed against the parcel 28.35 on which the house is located. No apportionment or reduction of 28.36 the "property taxes payable" shall be required for the use of a 29.1 portion of the claimant's homestead for a business purpose if 29.2 the claimant does not deduct any business depreciation expenses 29.3 for the use of a portion of the homestead in the determination 29.4 of federal adjusted gross income. For homesteads which are 29.5 manufactured homes as defined in section 273.125, subdivision 8, 29.6 and for homesteads which are park trailers taxed as manufactured 29.7 homes under section 168.012, subdivision 9, "property taxes 29.8 payable" shall also include1819 percent of the gross rent paid 29.9 in the preceding year for the site on which the homestead is 29.10 located. When a homestead is owned by two or more persons as 29.11 joint tenants or tenants in common, such tenants shall determine 29.12 between them which tenant may claim the property taxes payable 29.13 on the homestead. If they are unable to agree, the matter shall 29.14 be referred to the commissioner of revenue whose decision shall 29.15 be final. Property taxes are considered payable in the year 29.16 prescribed by law for payment of the taxes. 29.17 In the case of a claim relating to "property taxes 29.18 payable," the claimant must have owned and occupied the 29.19 homestead on January 2 of the year in which the tax is payable 29.20 and (i) the property must have been classified as homestead 29.21 property pursuant to section 273.124, on or before December 15 29.22 of the assessment year to which the "property taxes payable" 29.23 relate; or (ii) the claimant must provide documentation from the 29.24 local assessor that application for homestead classification has 29.25 been made on or before December 15 of the year in which the 29.26 "property taxes payable" were payable and that the assessor has 29.27 approved the application. 29.28 Sec. 23. Minnesota Statutes 1996, section 477A.0122, 29.29 subdivision 6, is amended to read: 29.30 Subd. 6. [REPORT.] (a) On or before March 15 of the year 29.31 following the year in which the distributions under this section 29.32 are received, each county shall file with the commissioner of 29.33 revenue and commissioner of human services a report on prior 29.34 year expenditures for out-of-home placement and family 29.35 preservation, including expenditures under this section. For 29.36 the human services programs specified in this section, the 30.1 commissioner of revenue and commissioner of human services, in 30.2 consultation with representatives of county governments, shall 30.3 make a recommendation to the 1999 legislature as to which 30.4 current reporting requirements imposed on county governments, if 30.5 any, may be eliminated, replaced, or consolidated on the report 30.6 established by this section. For aid payable in calendar year 30.7 2000 and thereafter, each county shall provide information on 30.8 the amount of state aid, local property tax revenue, and federal 30.9 aid expended by that county on the programs specified in this 30.10 section using the consolidated financial report recommended by 30.11 the commissioner of revenue and commissioner of human services 30.12 under this subdivision. 30.13 (b) The commissioner of revenue and the commissioner of 30.14 human services, in consultation with representatives of county 30.15 governments and children's advocacy representatives, shall study 30.16 the current formula used in distributing aid under this section 30.17 and factors related to out-of-home placement and family 30.18 preservation expenditures and make a report to the house and 30.19 senate tax committees by February 1, 1999. The report shall 30.20 include a recommendation for a new formula to be used in 30.21 distributing the aid under this section, beginning with aids 30.22 payable in 2000. 30.23 Sec. 24. Minnesota Statutes 1996, section 477A.03, 30.24 subdivision 2, is amended to read: 30.25 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 30.26 discharge the duties imposed by sections 477A.011 to 477A.014 is 30.27 annually appropriated from the general fund to the commissioner 30.28 of revenue. For aids payable in 1996 and thereafter, the total 30.29 aids paid undersectionssection 477A.013, subdivision 9,and30.30477A.0122are the amounts certified to be paid in the previous 30.31 year, adjusted for inflation as provided under subdivision 30.32 3.Aid payments to counties under section 477A.0121 are limited30.33to $20,265,000 in 1996. Aid payments to counties under section30.34477A.0121 are limited to $27,571,625 in 1997.30.35 (b) For aid payable in 1998 and thereafter, the total aids 30.36 paid under section 477A.0121 are the amounts certified to be 31.1 paid in the previous year, adjusted for inflation as provided 31.2 under subdivision 3. 31.3 (c) For aid payable in 1999, the total aid payments under 31.4 section 477A.0122 are the sum of: 31.5 (1) the amounts certified to be paid in the previous year, 31.6 adjusted for inflation as provided in subdivision 3; plus 31.7 (2) $20,000,000; plus 31.8 (3) $10,000,000. 31.9 For aid payable in 2000 and thereafter, the total aid 31.10 payments under section 477A.0122 are the amounts certified to be 31.11 paid in the previous year, adjusted for inflation as provided in 31.12 subdivision 3. 31.13 Sec. 25. [APPROPRIATIONS.] 31.14 (a) [SHIFT RECOGNITION APPROPRIATION.] In addition to any 31.15 amounts appropriated by other law, $3,900,000 is appropriated to 31.16 the commissioner of children, families, and learning in fiscal 31.17 year 1999 to fund early recognition of education aid. 31.18 (b) [EDUCATION LEVY REDUCTION APPROPRIATION.] In addition 31.19 to any amount appropriated by other law, $55,000,000 is 31.20 appropriated to the commissioner of children, families, and 31.21 learning in fiscal year 2000 and thereafter to fund a reduction 31.22 in the statewide general education property tax levy. 31.23 (c) [PROPERTY TAX REFUND.] The additional amount necessary 31.24 to fund the changes in sections 21 and 22 for fiscal year 2000 31.25 is appropriated to the commissioner of revenue from the property 31.26 tax reform account. 31.27 (d) [ALTERNATIVE FACILITIES AID.] $3,785,000 for fiscal 31.28 year 2000 and $4,205,000 for fiscal year 2001 is transferred 31.29 from the property tax reform account to the general fund to 31.30 finance the increase in alternative facilities aid under 31.31 sections 1 and 2. 31.32 Sec. 26. [EFFECTIVE DATE.] 31.33 Sections 1, 4, and 7 are effective for aid paid in fiscal 31.34 year 2000 and thereafter. Sections 3, 6, and 9 to 15 are 31.35 effective for taxes payable in 1999 and thereafter. Sections 31.36 17, 19, and 24 are effective for aid payable in 1999 and 32.1 thereafter. Sections 21 and 22 are effective for rents paid in 32.2 1998 and thereafter. Section 25 is effective the day following 32.3 final enactment. 32.4 ARTICLE 3 32.5 PROPERTY TAXES, LOCAL BONDING AND LEVY AUTHORITY 32.6 Section 1. Minnesota Statutes 1996, section 124A.02, 32.7 subdivision 3b, is amended to read: 32.8 Subd. 3b. [REFERENDUM MARKET VALUE.] "Referendum market 32.9 value" means the market value of all taxable property, except 32.10 that any class of property, or any portion of a class of 32.11 property, with a class rate of less thanone0.8 percent under 32.12 section 273.13 shall have a referendum market value equal to its 32.13 net tax capacity multiplied by 100. 32.14 Sec. 2. Minnesota Statutes 1997 Supplement, section 32.15 272.02, subdivision 1, is amended to read: 32.16 Subdivision 1. All property described in this section to 32.17 the extent herein limited shall be exempt from taxation: 32.18 (1) All public burying grounds. 32.19 (2) All public schoolhouses. 32.20 (3) All public hospitals. 32.21 (4) All academies, colleges, and universities, and all 32.22 seminaries of learning. 32.23 (5) All churches, church property, and houses of worship. 32.24 (6) Institutions of purely public charity except parcels of 32.25 property containing structures and the structures described in 32.26 section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 32.27 and (3), or paragraph (d), other than those that qualify for 32.28 exemption under clause (25). 32.29 (7) All public property exclusively used for any public 32.30 purpose. 32.31 (8) Except for the taxable personal property enumerated 32.32 below, all personal property and the property described in 32.33 section 272.03, subdivision 1, paragraphs (c) and (d), shall be 32.34 exempt. 32.35 The following personal property shall be taxable: 32.36 (a) personal property which is part of an electric 33.1 generating, transmission, or distribution system or a pipeline 33.2 system transporting or distributing water, gas, crude oil, or 33.3 petroleum products or mains and pipes used in the distribution 33.4 of steam or hot or chilled water for heating or cooling 33.5 buildings and structures; 33.6 (b) railroad docks and wharves which are part of the 33.7 operating property of a railroad company as defined in section 33.8 270.80; 33.9 (c) personal property defined in section 272.03, 33.10 subdivision 2, clause (3); 33.11 (d) leasehold or other personal property interests which 33.12 are taxed pursuant to section 272.01, subdivision 2; 273.124, 33.13 subdivision 7; or 273.19, subdivision 1; or any other law 33.14 providing the property is taxable as if the lessee or user were 33.15 the fee owner; 33.16 (e) manufactured homes and sectional structures, including 33.17 storage sheds, decks, and similar removable improvements 33.18 constructed on the site of a manufactured home, sectional 33.19 structure, park trailer or travel trailer as provided in section 33.20 273.125, subdivision 8, paragraph (f); and 33.21 (f) flight property as defined in section 270.071. 33.22 (9) Personal property used primarily for the abatement and 33.23 control of air, water, or land pollution to the extent that it 33.24 is so used, and real property which is used primarily for 33.25 abatement and control of air, water, or land pollution as part 33.26 of an agricultural operation, as a part of a centralized 33.27 treatment and recovery facility operating under a permit issued 33.28 by the Minnesota pollution control agency pursuant to chapters 33.29 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 33.30 and 7045.0020 to 7045.1260, as a wastewater treatment facility 33.31 and for the treatment, recovery, and stabilization of metals, 33.32 oils, chemicals, water, sludges, or inorganic materials from 33.33 hazardous industrial wastes, or as part of an electric 33.34 generation system. For purposes of this clause, personal 33.35 property includes ponderous machinery and equipment used in a 33.36 business or production activity that at common law is considered 34.1 real property. 34.2 Any taxpayer requesting exemption of all or a portion of 34.3 any real property or any equipment or device, or part thereof, 34.4 operated primarily for the control or abatement of air or water 34.5 pollution shall file an application with the commissioner of 34.6 revenue. The equipment or device shall meet standards, rules, 34.7 or criteria prescribed by the Minnesota pollution control 34.8 agency, and must be installed or operated in accordance with a 34.9 permit or order issued by that agency. The Minnesota pollution 34.10 control agency shall upon request of the commissioner furnish 34.11 information or advice to the commissioner. On determining that 34.12 property qualifies for exemption, the commissioner shall issue 34.13 an order exempting the property from taxation. The equipment or 34.14 device shall continue to be exempt from taxation as long as the 34.15 permit issued by the Minnesota pollution control agency remains 34.16 in effect. 34.17 (10) Wetlands. For purposes of this subdivision, 34.18 "wetlands" means: (i) land described in section 103G.005, 34.19 subdivision 15a; (ii) land which is mostly under water, produces 34.20 little if any income, and has no use except for wildlife or 34.21 water conservation purposes, provided it is preserved in its 34.22 natural condition and drainage of it would be legal, feasible, 34.23 and economically practical for the production of livestock, 34.24 dairy animals, poultry, fruit, vegetables, forage and grains, 34.25 except wild rice; or (iii) land in a wetland preservation area 34.26 under sections 103F.612 to 103F.616. "Wetlands" under items (i) 34.27 and (ii) include adjacent land which is not suitable for 34.28 agricultural purposes due to the presence of the wetlands, but 34.29 do not include woody swamps containing shrubs or trees, wet 34.30 meadows, meandered water, streams, rivers, and floodplains or 34.31 river bottoms. Exemption of wetlands from taxation pursuant to 34.32 this section shall not grant the public any additional or 34.33 greater right of access to the wetlands or diminish any right of 34.34 ownership to the wetlands. 34.35 (11) Native prairie. The commissioner of the department of 34.36 natural resources shall determine lands in the state which are 35.1 native prairie and shall notify the county assessor of each 35.2 county in which the lands are located. Pasture land used for 35.3 livestock grazing purposes shall not be considered native 35.4 prairie for the purposes of this clause. Upon receipt of an 35.5 application for the exemption provided in this clause for lands 35.6 for which the assessor has no determination from the 35.7 commissioner of natural resources, the assessor shall refer the 35.8 application to the commissioner of natural resources who shall 35.9 determine within 30 days whether the land is native prairie and 35.10 notify the county assessor of the decision. Exemption of native 35.11 prairie pursuant to this clause shall not grant the public any 35.12 additional or greater right of access to the native prairie or 35.13 diminish any right of ownership to it. 35.14 (12) Property used in a continuous program to provide 35.15 emergency shelter for victims of domestic abuse, provided the 35.16 organization that owns and sponsors the shelter is exempt from 35.17 federal income taxation pursuant to section 501(c)(3) of the 35.18 Internal Revenue Code of 1986, as amended through December 31, 35.19 1992, notwithstanding the fact that the sponsoring organization 35.20 receives funding under section 8 of the United States Housing 35.21 Act of 1937, as amended. 35.22 (13) If approved by the governing body of the municipality 35.23 in which the property is located, property not exceeding one 35.24 acre which is owned and operated by any senior citizen group or 35.25 association of groups that in general limits membership to 35.26 persons age 55 or older and is organized and operated 35.27 exclusively for pleasure, recreation, and other nonprofit 35.28 purposes, no part of the net earnings of which inures to the 35.29 benefit of any private shareholders; provided the property is 35.30 used primarily as a clubhouse, meeting facility, or recreational 35.31 facility by the group or association and the property is not 35.32 used for residential purposes on either a temporary or permanent 35.33 basis. 35.34 (14) To the extent provided by section 295.44, real and 35.35 personal property used or to be used primarily for the 35.36 production of hydroelectric or hydromechanical power on a site 36.1 owned by the federal government, the state, or a local 36.2 governmental unit which is developed and operated pursuant to 36.3 the provisions of section 103G.535. 36.4 (15) If approved by the governing body of the municipality 36.5 in which the property is located, and if construction is 36.6 commenced after June 30, 1983: 36.7 (a) a "direct satellite broadcasting facility" operated by 36.8 a corporation licensed by the federal communications commission 36.9 to provide direct satellite broadcasting services using direct 36.10 broadcast satellites operating in the 12-ghz. band; and 36.11 (b) a "fixed satellite regional or national program service 36.12 facility" operated by a corporation licensed by the federal 36.13 communications commission to provide fixed satellite-transmitted 36.14 regularly scheduled broadcasting services using satellites 36.15 operating in the 6-ghz. band. 36.16 An exemption provided by clause (15) shall apply for a period 36.17 not to exceed five years. When the facility no longer qualifies 36.18 for exemption, it shall be placed on the assessment rolls as 36.19 provided in subdivision 4. Before approving a tax exemption 36.20 pursuant to this paragraph, the governing body of the 36.21 municipality shall provide an opportunity to the members of the 36.22 county board of commissioners of the county in which the 36.23 facility is proposed to be located and the members of the school 36.24 board of the school district in which the facility is proposed 36.25 to be located to meet with the governing body. The governing 36.26 body shall present to the members of those boards its estimate 36.27 of the fiscal impact of the proposed property tax exemption. 36.28 The tax exemption shall not be approved by the governing body 36.29 until the county board of commissioners has presented its 36.30 written comment on the proposal to the governing body or 30 days 36.31 have passed from the date of the transmittal by the governing 36.32 body to the board of the information on the fiscal impact, 36.33 whichever occurs first. 36.34 (16) Real and personal property owned and operated by a 36.35 private, nonprofit corporation exempt from federal income 36.36 taxation pursuant to United States Code, title 26, section 37.1 501(c)(3), primarily used in the generation and distribution of 37.2 hot water for heating buildings and structures. 37.3 (17) Notwithstanding section 273.19, state lands that are 37.4 leased from the department of natural resources under section 37.5 92.46. 37.6 (18) Electric power distribution lines and their 37.7 attachments and appurtenances, that are used primarily for 37.8 supplying electricity to farmers at retail. 37.9 (19) Transitional housing facilities. "Transitional 37.10 housing facility" means a facility that meets the following 37.11 requirements. (i) It provides temporary housing to individuals, 37.12 couples, or families. (ii) It has the purpose of reuniting 37.13 families and enabling parents or individuals to obtain 37.14 self-sufficiency, advance their education, get job training, or 37.15 become employed in jobs that provide a living wage. (iii) It 37.16 provides support services such as child care, work readiness 37.17 training, and career development counseling; and a 37.18 self-sufficiency program with periodic monitoring of each 37.19 resident's progress in completing the program's goals. (iv) It 37.20 provides services to a resident of the facility for at least 37.21 three months but no longer than three years, except residents 37.22 enrolled in an educational or vocational institution or job 37.23 training program. These residents may receive services during 37.24 the time they are enrolled but in no event longer than four 37.25 years. (v) It is owned and operated or under lease from a unit 37.26 of government or governmental agency under a property 37.27 disposition program and operated by one or more organizations 37.28 exempt from federal income tax under section 501(c)(3) of the 37.29 Internal Revenue Code of 1986, as amended through December 31, 37.30 1992. This exemption applies notwithstanding the fact that the 37.31 sponsoring organization receives financing by a direct federal 37.32 loan or federally insured loan or a loan made by the Minnesota 37.33 housing finance agency under the provisions of either Title II 37.34 of the National Housing Act or the Minnesota housing finance 37.35 agency law of 1971 or rules promulgated by the agency pursuant 37.36 to it, and notwithstanding the fact that the sponsoring 38.1 organization receives funding under Section 8 of the United 38.2 States Housing Act of 1937, as amended. 38.3 (20) Real and personal property, including leasehold or 38.4 other personal property interests, owned and operated by a 38.5 corporation if more than 50 percent of the total voting power of 38.6 the stock of the corporation is owned collectively by: (i) the 38.7 board of regents of the University of Minnesota, (ii) the 38.8 University of Minnesota Foundation, an organization exempt from 38.9 federal income taxation under section 501(c)(3) of the Internal 38.10 Revenue Code of 1986, as amended through December 31, 1992, and 38.11 (iii) a corporation organized under chapter 317A, which by its 38.12 articles of incorporation is prohibited from providing pecuniary 38.13 gain to any person or entity other than the regents of the 38.14 University of Minnesota; which property is used primarily to 38.15 manage or provide goods, services, or facilities utilizing or 38.16 relating to large-scale advanced scientific computing resources 38.17 to the regents of the University of Minnesota and others. 38.18 (21)(a) Small scale wind energy conversion systems 38.19 installed after January 1, 1991, and used as an electric power 38.20 source are exempt. 38.21 "Small scale wind energy conversion systems" are wind 38.22 energy conversion systems, as defined in section 216C.06, 38.23 subdivision 12, including the foundation or support pad, which 38.24 are (i) used as an electric power source; (ii) located within 38.25 one county and owned by the same owner; and (iii) produce two 38.26 megawatts or less of electricity as measured by nameplate 38.27 ratings. 38.28 (b) Medium scale wind energy conversion systems installed 38.29 after January 1, 1991, are treated as follows: (i) the 38.30 foundation and support pad are taxable; (ii) the associated 38.31 supporting and protective structures are exempt for the first 38.32 five assessment years after they have been constructed, and 38.33 thereafter, 30 percent of the market value of the associated 38.34 supporting and protective structures are taxable; and (iii) the 38.35 turbines, blades, transformers, and its related equipment, are 38.36 exempt. "Medium scale wind energy conversion systems" are wind 39.1 energy conversion systems as defined in section 216C.06, 39.2 subdivision 12, including the foundation or support pad, which 39.3 are: (i) used as an electric power source; (ii) located within 39.4 one county and owned by the same owner; and (iii) produce more 39.5 than two but equal to or less than 12 megawatts of energy as 39.6 measured by nameplate ratings. 39.7 (c) Large scale wind energy conversion systems installed 39.8 after January 1, 1991, are treated as follows: 25 percent of 39.9 the market value of all property is taxable, including (i) the 39.10 foundation and support pad; (ii) the associated supporting and 39.11 protective structures; and (iii) the turbines, blades, 39.12 transformers, and its related equipment. "Large scale wind 39.13 energy conversion systems" are wind energy conversion systems as 39.14 defined in section 216C.06, subdivision 12, including the 39.15 foundation or support pad, which are: (i) used as an electric 39.16 power source; and (ii) produce more than 12 megawatts of energy 39.17 as measured by nameplate ratings. 39.18 (22) Containment tanks, cache basins, and that portion of 39.19 the structure needed for the containment facility used to 39.20 confine agricultural chemicals as defined in section 18D.01, 39.21 subdivision 3, as required by the commissioner of agriculture 39.22 under chapter 18B or 18C. 39.23 (23) Photovoltaic devices, as defined in section 216C.06, 39.24 subdivision 13, installed after January 1, 1992, and used to 39.25 produce or store electric power. 39.26 (24) Real and personal property owned and operated by a 39.27 private, nonprofit corporation exempt from federal income 39.28 taxation pursuant to United States Code, title 26, section 39.29 501(c)(3), primarily used for an ice arena or ice rink, and used 39.30 primarily for youth and high school programs. 39.31 (25) A structure that is situated on real property that is 39.32 used for: 39.33 (i) housing for the elderly or for low- and moderate-income 39.34 families as defined in Title II of the National Housing Act, as 39.35 amended through December 31, 1990, and funded by a direct 39.36 federal loan or federally insured loan made pursuant to Title II 40.1 of the act; or 40.2 (ii) housing lower income families or elderly or 40.3 handicapped persons, as defined in Section 8 of the United 40.4 States Housing Act of 1937, as amended. 40.5 In order for a structure to be exempt under (i) or (ii), it 40.6 must also meet each of the following criteria: 40.7 (A) is owned by an entity which is operated as a nonprofit 40.8 corporation organized under chapter 317A; 40.9 (B) is owned by an entity which has not entered into a 40.10 housing assistance payments contract under Section 8 of the 40.11 United States Housing Act of 1937, or, if the entity which owns 40.12 the structure has entered into a housing assistance payments 40.13 contract under Section 8 of the United States Housing Act of 40.14 1937, the contract provides assistance for less than 90 percent 40.15 of the dwelling units in the structure, excluding dwelling units 40.16 intended for management or maintenance personnel; 40.17 (C) operates an on-site congregate dining program in which 40.18 participation by residents is mandatory, and provides assisted 40.19 living or similar social and physical support services for 40.20 residents; and 40.21 (D) was not assessed and did not pay tax under chapter 273 40.22 prior to the 1991 levy, while meeting the other conditions of 40.23 this clause. 40.24 An exemption under this clause remains in effect for taxes 40.25 levied in each year or partial year of the term of its permanent 40.26 financing. 40.27 (26) Real and personal property that is located in the 40.28 Superior National Forest, and owned or leased and operated by a 40.29 nonprofit organization that is exempt from federal income 40.30 taxation under section 501(c)(3) of the Internal Revenue Code of 40.31 1986, as amended through December 31, 1992, and primarily used 40.32 to provide recreational opportunities for disabled veterans and 40.33 their families. 40.34 (27) Manure pits and appurtenances, which may include 40.35 slatted floors and pipes, installed or operated in accordance 40.36 with a permit, order, or certificate of compliance issued by the 41.1 Minnesota pollution control agency. The exemption shall 41.2 continue for as long as the permit, order, or certificate issued 41.3 by the Minnesota pollution control agency remains in effect. 41.4 (28) Notwithstanding clause (8), item (a), attached 41.5 machinery and other personal property which is part of a 41.6 facility containing a cogeneration system as described in 41.7 section 216B.166, subdivision 2, paragraph (a), if the 41.8 cogeneration system has met the following criteria: (i) the 41.9 system utilizes natural gas as a primary fuel and the 41.10 cogenerated steam initially replaces steam generated from 41.11 existing thermal boilers utilizing coal; (ii) the facility 41.12 developer is selected as a result of a procurement process 41.13 ordered by the public utilities commission; and (iii) 41.14 construction of the facility is commenced after July 1, 1994, 41.15 and before July 1, 1997. 41.16 (29) Real property acquired by a home rule charter city, 41.17 statutory city, county, town, or school district under a lease 41.18 purchase agreement or an installment purchase contract during 41.19 the term of the lease purchase agreement as long as and to the 41.20 extent that the property is used by the city, county, town, or 41.21 school district and devoted to a public use and to the extent it 41.22 is not subleased to any private individual, entity, association, 41.23 or corporation in connection with a business or enterprise 41.24 operated for profit. 41.25 (30) Notwithstanding any other law to the contrary, real 41.26 property that meets the following criteria is exempt: 41.27 (i) constitutes a wastewater treatment system (a) 41.28 constructed by a municipality using public funds, (b) operates 41.29 under a State Disposal System Permit issued by the Minnesota 41.30 pollution control agency pursuant to chapters 115 and 116 and 41.31 Minnesota Rules, chapter 700l, and (c) applies its effluent to 41.32 land used as part of an agricultural operation; 41.33 (ii) is located within a municipality of a population of 41.34 less than 10,000; 41.35 (iii) is used for treatment of effluent from a private 41.36 potato processing facility; and 42.1 (iv) is owned by a municipality and operated by a private 42.2 entity under agreement with that municipality. 42.3 Sec. 3. Minnesota Statutes 1997 Supplement, section 42.4 272.115, subdivision 4, is amended to read: 42.5 Subd. 4. [ELIGIBILITY FOR HOMESTEAD STATUS.] No real 42.6 estate sold or transferredon or after January 1, 1993,for 42.7 which a certificate of real estate value is required under 42.8subdivision 1this section shall be classified as a homestead, 42.9 unless(1)a certificate of value has been filed with the county 42.10 auditor in accordance with this section, or (2) the real estate42.11was conveyed by the federal government, the state, a political42.12subdivision of the state, or combination of them to a person42.13otherwise eligible to receive homestead classification of the42.14property. 42.15 This subdivision shall apply to any real estate taxes that 42.16 are payable the year or years following the sale or transfer of 42.17 the property. 42.18 Sec. 4. Minnesota Statutes 1997 Supplement, section 42.19 272.115, subdivision 5, is amended to read: 42.20 Subd. 5. [EXEMPTION FOR GOVERNMENT BODIES.] A certificate 42.21 of real estate value is not required when the real estate is 42.22 being conveyed toor by a public authority or agency of the42.23federal government,thestate ofMinnesota department of 42.24 transportation, a political subdivision of the state, or any 42.25 combination of them, for highway or roadway right-of-way 42.26 purposes, provided that theauthority,agency,or governmental 42.27 unit has agreed to file a list of the real estate conveyedby or42.28 to theauthority,agency,or governmental unit with the 42.29 commissioner of revenue by June 1 of the year following the year 42.30 of the conveyance. 42.31 Sec. 5. Minnesota Statutes 1997 Supplement, section 42.32 273.11, subdivision 1a, is amended to read: 42.33 Subd. 1a. [LIMITED MARKET VALUE.] (a) For the 1998 42.34 assessment, for taxes payable in 1999, a property classified 42.35 under section 273.13 may not have a market value for property 42.36 tax purposes greater than the sum of (1) its taxable market 43.1 value or, if applicable, its limited market value, used in 43.2 determining property taxes payable in 1998, plus (2) an amount 43.3 obtained by multiplying the market value in clause (1) by the 43.4 percentage rate of increase in the Consumer Price Index for the 43.5 12-month period ending October 31, 1997. 43.6 (b) For assessment years 1999 through 2001, for taxes 43.7 payable in 2000 through 2002, in the case of all property 43.8 classifiedas agricultural homestead or nonhomestead,43.9residential homestead or nonhomestead, or noncommercial seasonal43.10recreational residentialunder section 273.13, the assessor 43.11 shall compare the value with that determined in the preceding 43.12 assessment. The amount of the increase entered in the current 43.13 assessment shall not exceedthe greater of (1) ten percent of43.14the value in the preceding assessment, or (2) one-fourth of the43.15difference between the current assessment and the preceding43.16assessmentthe lesser of (1) five percent, or (2) the percentage 43.17 rate of increase, if any, in the Consumer Price Index for the 43.18 12-month period ending October 31 of the preceding assessment 43.19 year. This limitation shall not apply to increases in value due 43.20 to improvements. For purposes of this subdivision, the term 43.21 "assessment" means the value prior to any exclusion under 43.22 subdivision 16. 43.23 The provisions of this subdivision shall be in effect only 43.24 for assessment years19931998 through 2001. 43.25 (c) For the first assessment year after the sale or 43.26 conveyance of property for which the assessor's estimated market 43.27 value is greater than the market value determined under this 43.28 subdivision, the value of the property for property tax purposes 43.29 shall be increased to the assessor's estimated market value. 43.30 (d) For purposes of this subdivision, "Consumer Price Index" 43.31 means the Consumer Price Index of all urban consumers as 43.32 determined by the United States Department of Labor, Bureau of 43.33 Labor Statistics. 43.34 (e) For purposes of the assessment/sales ratio study 43.35 conducted under section 124.2131, and the computation of state 43.36 aids paid under chapters 124, 124A, and 477A, market values and 44.1 net tax capacities determined under this subdivision and 44.2 subdivision 16, shall be used. 44.3 Sec. 6. Minnesota Statutes 1997 Supplement, section 44.4 273.124, subdivision 14, is amended to read: 44.5 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 44.6 (a) Real estate of less than ten acres that is the homestead of 44.7 its owner must be classified as class 2a under section 273.13, 44.8 subdivision 23, paragraph (a), if: 44.9 (1) the parcel on which the house is located is contiguous 44.10 on at least two sides to (i) agricultural land, (ii) land owned 44.11 or administered by the United States Fish and Wildlife Service, 44.12 or (iii) land administered by the department of natural 44.13 resources on which in lieu taxes are paid under sections 477A.11 44.14 to 477A.14; 44.15 (2) its owner also owns a noncontiguous parcel of 44.16 agricultural land that is at least 20 acres; 44.17 (3) the noncontiguous land is located not farther thantwo44.18 four townships or cities, or a combination of townships or 44.19 cities from the homestead; and 44.20 (4) the agricultural use value of the noncontiguous land 44.21 and farm buildings is equal to at least 50 percent of the market 44.22 value of the house, garage, and one acre of land. 44.23 Homesteads initially classified as class 2a under the 44.24 provisions of this paragraph shall remain classified as class 44.25 2a, irrespective of subsequent changes in the use of adjoining 44.26 properties, as long as the homestead remains under the same 44.27 ownership, the owner owns a noncontiguous parcel of agricultural 44.28 land that is at least 20 acres, and the agricultural use value 44.29 qualifies under clause (4). 44.30 (b) Except as provided in paragraph (d), noncontiguous land 44.31 shall be included as part of a homestead under section 273.13, 44.32 subdivision 23, paragraph (a), only if the homestead is 44.33 classified as class 2a and the detached land is located in the 44.34 same township or city, or not farther thantwofour townships or 44.35 cities or combination thereof from the homestead. Any taxpayer 44.36 of these noncontiguous lands must notify the county assessor 45.1 that the noncontiguous land is part of the taxpayer's homestead, 45.2 and, if the homestead is located in another county, the taxpayer 45.3 must also notify the assessor of the other county. 45.4 (c) Agricultural land used for purposes of a homestead and 45.5 actively farmed by a person holding a vested remainder interest 45.6 in it must be classified as a homestead under section 273.13, 45.7 subdivision 23, paragraph (a). If agricultural land is 45.8 classified class 2a, any other dwellings on the land used for 45.9 purposes of a homestead by persons holding vested remainder 45.10 interests who are actively engaged in farming the property, and 45.11 up to one acre of the land surrounding each homestead and 45.12 reasonably necessary for the use of the dwelling as a home, must 45.13 also be assessed class 2a. 45.14 (d) Agricultural land and buildings that were class 2a 45.15 homestead property under section 273.13, subdivision 23, 45.16 paragraph (a), for the 1997 assessment shall remain classified 45.17 as agricultural homesteads for subsequent assessments if: 45.18 (1) the property owner abandoned the homestead dwelling 45.19 located on the agricultural homestead as a result of the April 45.20 1997 floods; 45.21 (2) the property is located in the county of Polk, Clay, 45.22 Kittson, Marshall, Norman, or Wilkin; 45.23 (3) the agricultural land and buildings remain under the 45.24 same ownership for the current assessment year as existed for 45.25 the 1997 assessment year; 45.26 (4) the dwelling occupied by the owner is located in 45.27 Minnesota and is within 30 miles of one of the parcels of 45.28 agricultural land that is owned by the taxpayer; and 45.29 (5) the owner notifies the county assessor that the 45.30 relocation was due to the 1997 floods, and the owner furnishes 45.31 the assessor any information deemed necessary by the assessor in 45.32 verifying the change inhomesteaddwelling.For taxes payable45.33in 1998, the owner must notify the assessor by December 1,45.341997.Further notifications to the assessor are not required if 45.35 the property continues to meet all the requirements in this 45.36 paragraph and any dwellings on the agricultural land remain 46.1 uninhabited. 46.2 Sec. 7. Minnesota Statutes 1997 Supplement, section 46.3 273.13, subdivision 25, as amended by Laws 1997, Third Special 46.4 Session chapter 231, article 1, section 8, is amended to read: 46.5 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 46.6 estate containing four or more units and used or held for use by 46.7 the owner or by the tenants or lessees of the owner as a 46.8 residence for rental periods of 30 days or more. Class 4a also 46.9 includes hospitals licensed under sections 144.50 to 144.56, 46.10 other than hospitals exempt under section 272.02, and contiguous 46.11 property used for hospital purposes, without regard to whether 46.12 the property has been platted or subdivided. Class 4a property 46.13 in a city with a population of 5,000 or less, that is (1) 46.14 located outside of the metropolitan area, as defined in section 46.15 473.121, subdivision 2, or outside any county contiguous to the 46.16 metropolitan area, and (2) whose city boundary is at least 15 46.17 miles from the boundary of any city with a population greater 46.18 than 5,000 has a class rate of 2.3 percent of market value. All 46.19 other class 4a property has a class rate of 2.9 percent of 46.20 market value. For purposes of this paragraph, population has 46.21 the same meaning given in section 477A.011, subdivision 3. 46.22 (b) Class 4b includes: 46.23 (1) residential real estate containing less than four units 46.24 that does not qualify as class 4bb, other than seasonal 46.25 residential, and recreational; 46.26 (2) manufactured homes not classified under any other 46.27 provision; 46.28 (3) a dwelling, garage, and surrounding one acre of 46.29 property on a nonhomestead farm classified under subdivision 23, 46.30 paragraph (b) containing two or three units; 46.31 (4) unimproved property that is classified residential as 46.32 determined under section 273.13, subdivision 33. 46.33 Class 4b property has a class rate of 2.1 percent of market 46.34 value. 46.35 (c) Class 4bb includes: 46.36 (1) nonhomestead residential real estate containing one 47.1 unit, other than seasonal residential, and recreational; and 47.2 (2) a single family dwelling, garage, and surrounding one 47.3 acre of property on a nonhomestead farm classified under 47.4 subdivision 23, paragraph (b). 47.5 Class 4bb has a class rate of 1.9 percent on the first 47.6 $75,000 of market value and a class rate of 2.1 percent of its 47.7 market value that exceeds $75,000. 47.8 Property that has been classified as seasonal recreational 47.9 residential property at any time during which it has been owned 47.10 by the current owner or spouse of the current owner does not 47.11 qualify for class 4bb. 47.12 (d) Class 4c property includes: 47.13 (1) except as provided in subdivision 22, paragraph (c), 47.14 real property devoted to temporary and seasonal residential 47.15 occupancy for recreation purposes, including real property 47.16 devoted to temporary and seasonal residential occupancy for 47.17 recreation purposes and not devoted to commercial purposes for 47.18 more than 250 days in the year preceding the year of 47.19 assessment. For purposes of this clause, property is devoted to 47.20 a commercial purpose on a specific day if any portion of the 47.21 property is used for residential occupancy, and a fee is charged 47.22 for residential occupancy. In order for a property to be 47.23 classified as class 4c, seasonal recreational residential for 47.24 commercial purposes, at least 40 percent of the annual gross47.25lodging receipts related to the property must be from business47.26conducted between Memorial Day weekend and Labor Day weekend and47.27 at least 60 percent of all bookings by lodging guests during the 47.28 year must be for periods of at least two consecutive nights. 47.29 Class 4c also includes commercial use real property used 47.30 exclusively for recreational purposes in conjunction with class 47.31 4c property devoted to temporary and seasonal residential 47.32 occupancy for recreational purposes, up to a total of two acres, 47.33 provided the property is not devoted to commercial recreational 47.34 use for more than 250 days in the year preceding the year of 47.35 assessment and is located within two miles of the class 4c 47.36 property with which it is used. Class 4c property classified in 48.1 this clause also includes the remainder of class 1c resorts. 48.2 Owners of real property devoted to temporary and seasonal 48.3 residential occupancy for recreation purposes and all or a 48.4 portion of which was devoted to commercial purposes for not more 48.5 than 250 days in the year preceding the year of assessment 48.6 desiring classification as class 1c or 4c, must submit a 48.7 declaration to the assessor designating the cabins or units 48.8 occupied for 250 days or less in the year preceding the year of 48.9 assessment by January 15 of the assessment year. Those cabins 48.10 or units and a proportionate share of the land on which they are 48.11 located will be designated class 1c or 4c as otherwise 48.12 provided. The remainder of the cabins or units and a 48.13 proportionate share of the land on which they are located will 48.14 be designated as class 3a. The owner of property desiring 48.15 designation as class 1c or 4c property must provide guest 48.16 registers or other records demonstrating that the units for 48.17 which class 1c or 4c designation is sought were not occupied for 48.18 more than 250 days in the year preceding the assessment if so 48.19 requested. The portion of a property operated as a (1) 48.20 restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 48.21 facility operated on a commercial basis not directly related to 48.22 temporary and seasonal residential occupancy for recreation 48.23 purposes shall not qualify for class 1c or 4c; 48.24 (2) qualified property used as a golf course if: 48.25 (i) any portion of the property is located within a county 48.26 that has a population of less than 50,000, or within a county 48.27 containing a golf course owned by a municipality, the county, or 48.28 a special taxing district; 48.29 (ii) it is open to the public on a daily fee basis. It may 48.30 charge membership fees or dues, but a membership fee may not be 48.31 required in order to use the property for golfing, and its green 48.32 fees for golfing must be comparable to green fees typically 48.33 charged by municipal courses; and 48.34 (iii) it meets the requirements of section 273.112, 48.35 subdivision 3, paragraph (d). 48.36 A structure used as a clubhouse, restaurant, or place of 49.1 refreshment in conjunction with the golf course is classified as 49.2 class 3a property. 49.3 (3) real property up to a maximum of one acre of land owned 49.4 by a nonprofit community service oriented organization; provided 49.5 that the property is not used for a revenue-producing activity 49.6 for more than six days in the calendar year preceding the year 49.7 of assessment and the property is not used for residential 49.8 purposes on either a temporary or permanent basis. For purposes 49.9 of this clause, a "nonprofit community service oriented 49.10 organization" means any corporation, society, association, 49.11 foundation, or institution organized and operated exclusively 49.12 for charitable, religious, fraternal, civic, or educational 49.13 purposes, and which is exempt from federal income taxation 49.14 pursuant to section 501(c)(3), (10), or (19) of the Internal 49.15 Revenue Code of 1986, as amended through December 31, 1990. For 49.16 purposes of this clause, "revenue-producing activities" shall 49.17 include but not be limited to property or that portion of the 49.18 property that is used as an on-sale intoxicating liquor or 3.2 49.19 percent malt liquor establishment licensed under chapter 340A, a 49.20 restaurant open to the public, bowling alley, a retail store, 49.21 gambling conducted by organizations licensed under chapter 349, 49.22 an insurance business, or office or other space leased or rented 49.23 to a lessee who conducts a for-profit enterprise on the 49.24 premises. Any portion of the property which is used for 49.25 revenue-producing activities for more than six days in the 49.26 calendar year preceding the year of assessment shall be assessed 49.27 as class 3a. The use of the property for social events open 49.28 exclusively to members and their guests for periods of less than 49.29 24 hours, when an admission is not charged nor any revenues are 49.30 received by the organization shall not be considered a 49.31 revenue-producing activity; 49.32 (4) post-secondary student housing of not more than one 49.33 acre of land that is owned by a nonprofit corporation organized 49.34 under chapter 317A and is used exclusively by a student 49.35 cooperative, sorority, or fraternity for on-campus housing or 49.36 housing located within two miles of the border of a college 50.1 campus; and 50.2 (5) manufactured home parks as defined in section 327.14, 50.3 subdivision 3. 50.4 Class 4c property has a class rate of 2.1 percent of market 50.5 value, except that (i) for each parcel of seasonal residential 50.6 recreational property not used for commercial purposes the first 50.7 $75,000 of market value has a class rate of 1.4 percent, and the 50.8 market value that exceeds $75,000 has a class rate of 2.5 50.9 percent, and (ii) manufactured home parks assessed under clause 50.10 (5) have a class rate of two percent. 50.11 (e) Class 4d property is qualifying low-income rental 50.12 housing certified to the assessor by the housing finance agency 50.13 under sections 273.126 and 462A.071. Class 4d includes land in 50.14 proportion to the total market value of the building that is 50.15 qualifying low-income rental housing. For all properties 50.16 qualifying as class 4d, the market value determined by the 50.17 assessor must be based on the normal approach to value using 50.18 normal unrestricted rents. 50.19 Class 4d property has a class rate of one percent of market 50.20 value. 50.21 (f) Class 4e property consists of the residential portion 50.22 of any structure located within a city that was converted from 50.23 nonresidential use to residential use, provided that: 50.24 (1) the structure had formerly been used as a warehouse; 50.25 (2) the structure was originally constructed prior to 1940; 50.26 (3) the conversion was done after December 31, 1995, but 50.27 before January 1, 2003; and 50.28 (4) the conversion involved an investment of at least 50.29 $25,000 per residential unit. 50.30 Class 4e property has a class rate of 2.3 percent, provided 50.31 that a structure is eligible for class 4e classification only in 50.32 the 12 assessment years immediately following the conversion. 50.33 (g) Class 4f property consists of any parcel or contiguous 50.34 parcels of unimproved real estate, not including agricultural 50.35 land, that meets the requirements in clauses (1) to (3): 50.36 (1) the property consists of at least 300 contiguous feet 51.1 of unimproved real estate that borders or is adjacent to public 51.2 waters as defined in section 103G.005, subdivision 15, clauses 51.3 (1) to (5), and (7) to (9); 51.4 (2) the unimproved real estate is located within 400 feet 51.5 from the ordinary high water elevation of the public waters; 51.6 (3) the owner of the property signs a covenant agreement 51.7 and files the covenant with the county assessor in the county 51.8 where the property is located. The covenant agreement must 51.9 include all of the following: 51.10 (i) legal description of the area to which the covenant 51.11 applies; 51.12 (ii) name and address of the owner; 51.13 (iii) a statement that the land described in the covenant 51.14 must be kept as undeveloped land for the duration of the 51.15 covenant; 51.16 (iv) a statement that the landowner may initiate expiration 51.17 of the covenant agreement by notifying the county assessor, in 51.18 writing, with the date of expiration which must be at least 51.19 eight years from the date of the expiration notice; 51.20 (v) a statement that the covenant is binding on the owner 51.21 or owner's successor or assignee, and runs with the land; and 51.22 (vi) a witnessed signature of the owner covenanting to keep 51.23 the land in its undeveloped state as it existed on the date the 51.24 covenant was signed; and 51.25 (4) upon expiration of a covenant agreement in clause (3), 51.26 the property which is sold is subject to additional taxes. The 51.27 amount of additional taxes due on the property equals the 51.28 difference between the taxes actually levied and the taxes that 51.29 would have been imposed if the property had been valued and 51.30 classified if class 4f did not apply. The additional taxes must 51.31 be extended against the property on the tax list for the current 51.32 year. No interest or penalties may be levied on the additional 51.33 taxes if timely paid, and the additional taxes must be levied 51.34 only with respect to the last five years that the property was 51.35 valued and assessed as class 4f property. 51.36 The tax imposed under this paragraph is a lien on the 52.1 property assessed to the same extent and for the same duration 52.2 as other real property taxes. The tax must be extended by the 52.3 county auditor and when payable be collected and distributed in 52.4 the same manner provided by law for the collection and 52.5 distribution of other property taxes. 52.6 Class 4f has a class rate of 1.0 percent of market value. 52.7 Sec. 8. [273.1383] [1997 FLOOD LOSS REPLACEMENT AID.] 52.8 Subdivision 1. [FLOOD NET TAX CAPACITY LOSS.] In 52.9 assessment years 1998, 1999, and 2000, the county assessor of 52.10 each county listed in section 273.124, subdivision 14, paragraph 52.11 (d), shall compute a hypothetical county net tax capacity based 52.12 upon market values for the current assessment year and the class 52.13 rates that were in effect for assessment year 1997. The amount, 52.14 if any, by which the assessment year 1997 total taxable net tax 52.15 capacity exceeds the hypothetical taxable net tax capacity shall 52.16 be known as the county's "flood net tax capacity loss" for the 52.17 current assessment year. The county assessor of each county 52.18 whose flood net tax capacity loss for the current year exceeds 52.19 five percent of its assessment year 1997 total taxable net tax 52.20 capacity shall certify its flood net tax capacity loss to the 52.21 commissioner of revenue by July 15 of the assessment year. 52.22 Subd. 2. [FLOOD LOSS AID.] Each year, each county with a 52.23 flood net tax capacity loss equal to or greater than five 52.24 percent of its assessment year 1997 total taxable net tax 52.25 capacity shall be entitled to flood loss aid equal to the flood 52.26 net tax capacity loss times the county's average local tax rate 52.27 for taxes payable in 1998. 52.28 Subd. 3. [DUTIES OF COMMISSIONER.] The commissioner of 52.29 revenue shall determine each qualifying county's aid amount. If 52.30 the sum of the aid amounts for all qualifying counties exceeds 52.31 the appropriation limit, the commissioner shall proportionately 52.32 reduce each county's aid amount so that the sum of county aid 52.33 amounts is equal to the appropriation limit. The commissioner 52.34 shall notify each county of its flood loss aid amount by August 52.35 15 of the assessment year. The commissioner shall make payments 52.36 to each county on July 15 of the taxes payable year 53.1 corresponding to the assessment year. 53.2 Subd. 4. [APPROPRIATION.] An amount necessary to fund the 53.3 aid amounts under this section is annually appropriated from the 53.4 general fund to the commissioner of revenue in fiscal years 53.5 2000, 2001, and 2002, for calendar years 1999, 2000, and 2001. 53.6 The maximum amount of the appropriation is limited to $1,700,000 53.7 for fiscal year 2000 and $1,500,000 per year for fiscal years 53.8 2001 and 2002. In addition, the amount of the appropriation 53.9 under Laws 1997, Second Special Session chapter 2, section 9, 53.10 that the commissioner determines will not be spent for the 53.11 programs under that section is available to pay the aid amounts 53.12 under this section. 53.13 Sec. 9. Minnesota Statutes 1997 Supplement, section 53.14 275.065, subdivision 3, is amended to read: 53.15 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 53.16 county auditor shall prepare and the county treasurer shall 53.17 deliver after November 10 and on or before November 24 each 53.18 year, by first class mail to each taxpayer at the address listed 53.19 on the county's current year's assessment roll, a notice of 53.20 proposed property taxes. 53.21 (b) The commissioner of revenue shall prescribe the form of 53.22 the notice. 53.23 (c) The notice must inform taxpayers that it contains the 53.24 amount of property taxes each taxing authority proposes to 53.25 collect for taxes payable the following year. In the case of a 53.26 town, or in the case of the state determined portion of the 53.27 school district levy, the final tax amount will be its proposed 53.28 tax. The notice must clearly state that each taxing authority, 53.29 including regional library districts established under section 53.30 134.201, and including the metropolitan taxing districts as 53.31 defined in paragraph (i), but excluding all other special taxing 53.32 districts and towns, will hold a public meeting to receive 53.33 public testimony on the proposed budget and proposed or final 53.34 property tax levy, or, in case of a school district, on the 53.35 current budget and proposed property tax levy. It must clearly 53.36 state the time and place of each taxing authority's meeting and 54.1 an address where comments will be received by mail. 54.2 (d) The notice must state for each parcel: 54.3 (1) the market value of the property as determined under 54.4 section 273.11, and used for computing property taxes payable in 54.5 the following year and for taxes payable in the current year as 54.6 each appears in the records of the county assessor on November 1 54.7 of the current year; and, in the case of residential property, 54.8 whether the property is classified as homestead or 54.9 nonhomestead. The notice must clearly inform taxpayers of the 54.10 years to which the market values apply and that the values are 54.11 final values; 54.12 (2) the items listed below, shown separately by county, 54.13 city or town, state determined school tax net of the education 54.14 homestead credit under section 273.1382, voter approved school 54.15 levy, other local school levy, and the sum of the special taxing 54.16 districts, and as a total of all taxing authorities: 54.17 (i) the actual tax for taxes payable in the current year; 54.18 (ii) the tax change due to spending factors, defined as the 54.19 proposed tax minus the constant spending tax amount; 54.20 (iii) the tax change due to other factors, defined as the 54.21 constant spending tax amount minus the actual current year tax; 54.22 and 54.23 (iv) the proposed tax amount. 54.24 In the case of a town or the state determined school tax, 54.25 the final tax shall also be its proposed tax unless the town 54.26 changes its levy at a special town meeting under section 54.27 365.52. If a school district has certified under section 54.28 124A.03, subdivision 2, that a referendum will be held in the 54.29 school district at the November general election, the county 54.30 auditor must note next to the school district's proposed amount 54.31 that a referendum is pending and that, if approved by the 54.32 voters, the tax amount may be higher than shown on the notice. 54.33 In the case of the city of Minneapolis, the levy for the 54.34 Minneapolis library board and the levy for Minneapolis park and 54.35 recreation shall be listed separately from the remaining amount 54.36 of the city's levy. In the case of a parcel where tax increment 55.1 or the fiscal disparities areawide tax under chapter 276A or 55.2 473F applies, the proposed tax levy on the captured value or the 55.3 proposed tax levy on the tax capacity subject to the areawide 55.4 tax must each be stated separately and not included in the sum 55.5 of the special taxing districts; and 55.6 (3) the increase or decrease between the total taxes 55.7 payable in the current year and the total proposed taxes, 55.8 expressed as a percentage. 55.9 For purposes of this section, the amount of the tax on 55.10 homesteads qualifying under the senior citizens' property tax 55.11 deferral program under chapter 290B is the total amount of 55.12 property tax before subtraction of the deferred property tax 55.13 amount. 55.14 (e) The notice must clearly state that the proposed or 55.15 final taxes do not include the following: 55.16 (1) special assessments; 55.17 (2) levies approved by the voters after the date the 55.18 proposed taxes are certified, including bond referenda, school 55.19 district levy referenda, and levy limit increase referenda; 55.20 (3) amounts necessary to pay cleanup or other costs due to 55.21 a natural disaster occurring after the date the proposed taxes 55.22 are certified; 55.23 (4) amounts necessary to pay tort judgments against the 55.24 taxing authority that become final after the date the proposed 55.25 taxes are certified; and 55.26 (5) the contamination tax imposed on properties which 55.27 received market value reductions for contamination. 55.28 (f) Except as provided in subdivision 7, failure of the 55.29 county auditor to prepare or the county treasurer to deliver the 55.30 notice as required in this section does not invalidate the 55.31 proposed or final tax levy or the taxes payable pursuant to the 55.32 tax levy. 55.33 (g) If the notice the taxpayer receives under this section 55.34 lists the property as nonhomestead, and satisfactory 55.35 documentation is provided to the county assessor by the 55.36 applicable deadline, and the property qualifies for the 56.1 homestead classification in that assessment year, the assessor 56.2 shall reclassify the property to homestead for taxes payable in 56.3 the following year. 56.4 (h) In the case of class 4 residential property used as a 56.5 residence for lease or rental periods of 30 days or more, the 56.6 taxpayer must either: 56.7 (1) mail or deliver a copy of the notice of proposed 56.8 property taxes to each tenant, renter, or lessee; or 56.9 (2) post a copy of the notice in a conspicuous place on the 56.10 premises of the property. 56.11 The notice must be mailed or posted by the taxpayer by 56.12 November 27 or within three days of receipt of the notice, 56.13 whichever is later. A taxpayer may notify the county treasurer 56.14 of the address of the taxpayer, agent, caretaker, or manager of 56.15 the premises to which the notice must be mailed in order to 56.16 fulfill the requirements of this paragraph. 56.17 (i) For purposes of this subdivision, subdivisions 5a and 56.18 6, "metropolitan special taxing districts" means the following 56.19 taxing districts in the seven-county metropolitan area that levy 56.20 a property tax for any of the specified purposes listed below: 56.21 (1) metropolitan council under section 473.132, 473.167, 56.22 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 56.23 (2) metropolitan airports commission under section 473.667, 56.24 473.671, or 473.672; and 56.25 (3) metropolitan mosquito control commission under section 56.26 473.711. 56.27 For purposes of this section, any levies made by the 56.28 regional rail authorities in the county of Anoka, Carver, 56.29 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 56.30 398A shall be included with the appropriate county's levy and 56.31 shall be discussed at that county's public hearing. 56.32 (j) If a statutory or home rule charter city or a town 56.33 exercises the local levy option provided by section 473.388, 56.34 subdivision 7, it may include in the notice of its proposed 56.35 taxes a statement of the amount by which its proposed taxes are 56.36 attributable to its exercise of the option, together with a 57.1 statement that the levy of the metropolitan council was 57.2 decreased by a similar amount because of exercise of that option. 57.3 Sec. 10. Minnesota Statutes 1997 Supplement, section 57.4 275.065, subdivision 6, is amended to read: 57.5 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 57.6 (a) For purposes of this section, the following terms shall have 57.7 the meanings given: 57.8 (1) "Initial hearing" means the first and primary hearing 57.9 held to discuss the taxing authority's proposed budget and 57.10 proposed property tax levy for taxes payable in the following 57.11 year, or, for school districts, the current budget and the 57.12 proposed property tax levy for taxes payable in the following 57.13 year. 57.14 (2) "Continuation hearing" means a hearing held to complete 57.15 the initial hearing, if the initial hearing is not completed on 57.16 its scheduled date. 57.17 (3) "Subsequent hearing" means the hearing held to adopt 57.18 the taxing authority's final property tax levy, and, in the case 57.19 of taxing authorities other than school districts, the final 57.20 budget, for taxes payable in the following year. 57.21 (b) Between November 29 and December 20, the governing 57.22 bodies of a city that has a population over 500, county, 57.23 metropolitan special taxing districts as defined in subdivision 57.24 3, paragraph (i), and regional library districts shall each hold 57.25 an initial public hearing to discuss and seek public comment on 57.26 its final budget and property tax levy for taxes payable in the 57.27 following year, and the governing body of the school district 57.28 shall hold an initial public hearing to review its current 57.29 budget and proposed property tax levy for taxes payable in the 57.30 following year. The metropolitan special taxing districts shall 57.31 be required to hold only a single joint initial public hearing, 57.32 the location of which will be determined by the affected 57.33 metropolitan agencies. 57.34 (c) The initial hearing must be held after 5:00 p.m. if 57.35 scheduled on a day other than Saturday. No initial hearing may 57.36 be held on a Sunday. 58.1 (d) At the initial hearing under this subdivision, the 58.2 percentage increase in property taxes proposed by the taxing 58.3 authority, if any, and the specific purposes for which property 58.4 tax revenues are being increased must be discussed. During the 58.5 discussion, the governing body shall hear comments regarding a 58.6 proposed increase and explain the reasons for the proposed 58.7 increase. The public shall be allowed to speak and to ask 58.8 questions. At the public hearing, the school district must also 58.9 provide and discuss information on the distribution of its 58.10 revenues by revenue source, and the distribution of its spending 58.11 by program area. 58.12 (e) If the initial hearing is not completed on its 58.13 scheduled date, the taxing authority must announce, prior to 58.14 adjournment of the hearing, the date, time, and place for the 58.15 continuation of the hearing. The continuation hearing must be 58.16 held at least five business days but no more than 14 business 58.17 days after the initial hearing. A continuation hearing may not 58.18 be held later than December 20 except as provided in paragraphs 58.19 (f) and (g). A continuation hearing must be held after 5:00 58.20 p.m. if scheduled on a day other than Saturday. No continuation 58.21 hearing may be held on a Sunday. 58.22 (f) The governing body of a county shall hold its initial 58.23 hearing on thesecond Tuesdayfirst Thursday in December each 58.24 year, and may hold additional initial hearings on other dates 58.25 before December 20 if necessary for the convenience of county 58.26 residents. If the county needs a continuation of its hearing, 58.27 the continuation hearing shall be held on the third Tuesday in 58.28 December. If the third Tuesday in December falls on December 58.29 21, the county's continuation hearing shall be held on Monday, 58.30 December 20. 58.31 (g) The metropolitan special taxing districts shall hold a 58.32 joint initial public hearing on the firstMondayWednesday of 58.33 December. A continuation hearing, if necessary, shall be held 58.34 on the secondMondayWednesday of December even if that second 58.35MondayWednesday is after December 10. 58.36 (h) The county auditor shall provide for the coordination 59.1 of initial and continuation hearing dates for all school 59.2 districts and cities within the county to prevent conflicts 59.3 under clauses (i) and (j). 59.4 (i) By August 10, each school board and the board of the 59.5 regional library district shall certify to the county auditors 59.6 of the counties in which the school district or regional library 59.7 district is located the dates on which it elects to hold its 59.8 initial hearing and any continuation hearing. If a school board 59.9 or regional library district does not certify these dates by 59.10 August 10, the auditor will assign the initial and continuation 59.11 hearing dates. The dates elected or assigned must not conflict 59.12 with the initial and continuation hearing dates of the county or 59.13 the metropolitan special taxing districts. 59.14 (j) By August 20, the county auditor shall notify the 59.15 clerks of the cities within the county of the dates on which 59.16 school districts and regional library districts have elected to 59.17 hold their initial and continuation hearings. At the time a 59.18 city certifies its proposed levy under subdivision 1 it shall 59.19 certify the dates on which it elects to hold its initial hearing 59.20 and any continuation hearing. Until September 15, the first and 59.21 second Mondays of December are reserved for the use of the 59.22 cities. If a city does not certifytheseits hearing dates by 59.23 September 15, the auditor shall assign the initial and 59.24 continuation hearing dates. The dates elected or assigned for 59.25 the initial hearing must not conflict with the initial hearing 59.26 dates of the county, metropolitan special taxing districts, 59.27 regional library districts, or school districts within which the 59.28 city is located. To the extent possible, the dates of the 59.29 city's continuation hearing should not conflict with the 59.30 continuation hearing dates of the county, metropolitan special 59.31 taxing districts, regional library districts, or school 59.32 districts within which the city is located. This paragraph does 59.33 not apply to cities of 500 population or less. 59.34 (k) The county initial hearing date and the city, 59.35 metropolitan special taxing district, regional library district, 59.36 and school district initial hearing dates must be designated on 60.1 the notices required under subdivision 3. The continuation 60.2 hearing dates need not be stated on the notices. 60.3 (l) At a subsequent hearing, each county, school district, 60.4 city over 500 population, and metropolitan special taxing 60.5 district may amend its proposed property tax levy and must adopt 60.6 a final property tax levy. Each county, city over 500 60.7 population, and metropolitan special taxing district may also 60.8 amend its proposed budget and must adopt a final budget at the 60.9 subsequent hearing. The final property tax levy must be adopted 60.10 prior to adopting the final budget. A school district is not 60.11 required to adopt its final budget at the subsequent hearing. 60.12 The subsequent hearing of a taxing authority must be held on a 60.13 date subsequent to the date of the taxing authority's initial 60.14 public hearing. If a continuation hearing is held, the 60.15 subsequent hearing must be held either immediately following the 60.16 continuation hearing or on a date subsequent to the continuation 60.17 hearing. The subsequent hearing may be held at a regularly 60.18 scheduled board or council meeting or at a special meeting 60.19 scheduled for the purposes of the subsequent hearing. The 60.20 subsequent hearing of a taxing authority does not have to be 60.21 coordinated by the county auditor to prevent a conflict with an 60.22 initial hearing, a continuation hearing, or a subsequent hearing 60.23 of any other taxing authority. All subsequent hearings must be 60.24 held prior to five working days after December 20 of the levy 60.25 year. The date, time, and place of the subsequent hearing must 60.26 be announced at the initial public hearing or at the 60.27 continuation hearing. 60.28 (m) The property tax levy certified under section 275.07 by 60.29 a city of any population, county, metropolitan special taxing 60.30 district, regional library district, or school district must not 60.31 exceed the proposed levy determined under subdivision 1, except 60.32 by an amount up to the sum of the following amounts: 60.33 (1) the amount of a school district levy whose voters 60.34 approved a referendum to increase taxes under section 124.82, 60.35 subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 60.36 2, after the proposed levy was certified; 61.1 (2) the amount of a city or county levy approved by the 61.2 voters after the proposed levy was certified; 61.3 (3) the amount of a levy to pay principal and interest on 61.4 bonds approved by the voters under section 475.58 after the 61.5 proposed levy was certified; 61.6 (4) the amount of a levy to pay costs due to a natural 61.7 disaster occurring after the proposed levy was certified, if 61.8 that amount is approved by the commissioner of revenue under 61.9 subdivision 6a; 61.10 (5) the amount of a levy to pay tort judgments against a 61.11 taxing authority that become final after the proposed levy was 61.12 certified, if the amount is approved by the commissioner of 61.13 revenue under subdivision 6a; 61.14 (6) the amount of an increase in levy limits certified to 61.15 the taxing authority by the commissioner of children, families, 61.16 and learning or the commissioner of revenue after the proposed 61.17 levy was certified; and 61.18 (7) the amount required under section 124.755. 61.19 (n) This subdivision does not apply to towns and special 61.20 taxing districts other than regional library districts and 61.21 metropolitan special taxing districts. 61.22 (o) Notwithstanding the requirements of this section, the 61.23 employer is required to meet and negotiate over employee 61.24 compensation as provided for in chapter 179A. 61.25 Sec. 11. Minnesota Statutes 1996, section 275.07, is 61.26 amended by adding a subdivision to read: 61.27 Subd. 5. [REVISED FINAL LEVY.] (a) If the final levy of a 61.28 taxing jurisdiction certified to the county auditor is incorrect 61.29 due to an error in the deduction of the aid received under 61.30 section 273.1398, subdivision 2, in determining the certified 61.31 levy as required under subdivision 1, the taxing jurisdiction 61.32 may apply to the commissioner of revenue to increase the levy 61.33 and recertify it in the correct amount. The commissioner must 61.34 receive the request by January 2. 61.35 (b) If the commissioner determines that the requirements of 61.36 paragraph (a) have been met, the commissioner shall notify the 62.1 taxing jurisdiction that the revised final levy has been 62.2 approved. Upon receipt of the approval, but no later than 62.3 January 15, the governing body of the taxing jurisdiction shall 62.4 adopt the revised final levy and the taxing jurisdiction shall 62.5 recertify the revised final levy to the county auditor. The 62.6 county auditor shall use the revised final levy to compute the 62.7 tax rate for the taxing jurisdiction. 62.8 (c) The county auditor shall report to the commissioner of 62.9 revenue the revised final levy used to determine the tax rates 62.10 for the taxing jurisdiction. The provisions of section 275.065, 62.11 subdivisions 6, 6a, and 7, do not apply to the revised final 62.12 levy for the taxing jurisdiction certified under this section. 62.13 (d) The taxing jurisdiction must publish in an official 62.14 newspaper of general circulation in the taxing jurisdiction a 62.15 notice of its revised final levy. The notice shall contain 62.16 examples of the tax impact of the revised final levy on 62.17 homestead, apartment, and commercial classes of property in the 62.18 taxing jurisdiction. The county auditor shall assist the taxing 62.19 jurisdiction in preparing the examples for the publication. 62.20 Sec. 12. Minnesota Statutes 1997 Supplement, section 62.21 275.70, subdivision 5, is amended to read: 62.22 Subd. 5. [SPECIAL LEVIES.] "Special levies" means those 62.23 portions of ad valorem taxes levied by a local governmental unit 62.24 for the following purposes or in the following manner: 62.25 (1) to pay the costs of the principal and interest on 62.26 bonded indebtedness or to reimburse for the amount of liquor 62.27 store revenues used to pay the principal and interest due on 62.28 municipal liquor store bonds in the year preceding the year for 62.29 which the levy limit is calculated; 62.30 (2) to pay the costs of principal and interest on 62.31 certificates of indebtedness issued for any corporate purpose 62.32 except for the following: 62.33 (i) tax anticipation or aid anticipation certificates of 62.34 indebtedness; 62.35 (ii) certificates of indebtedness issued under sections 62.36 298.28 and 298.282; 63.1 (iii) certificates of indebtedness used to fund current 63.2 expenses or to pay the costs of extraordinary expenditures that 63.3 result from a public emergency; or 63.4 (iv) certificates of indebtedness used to fund an 63.5 insufficiency in tax receipts or an insufficiency in other 63.6 revenue sources; 63.7 (3) to provide for the bonded indebtedness portion of 63.8 payments made to another political subdivision of the state of 63.9 Minnesota; 63.10 (4) to fund payments made to the Minnesota state armory 63.11 building commission under section 193.145, subdivision 2, to 63.12 retire the principal and interest on armory construction bonds; 63.13 (5) for unreimbursed expenses related to flooding that 63.14 occurred during the first half of calendar year 1997, as allowed 63.15 by the commissioner of revenue under section 275.74, paragraph 63.16 (b); 63.17 (6) for local units of government located in an area 63.18 designated by the Federal Emergency Management Agency pursuant 63.19 to a major disaster declaration issued for Minnesota by 63.20 President Clinton after April 1, 1997, and before June 11, 1997, 63.21 for the amount of tax dollars lost due to abatements authorized 63.22 under section 273.123, subdivision 7, and Laws 1997, chapter 63.23 231, article 2, section 64, to the extent that they are related 63.24 to the major disaster and to the extent that neither the state 63.25 or federal government reimburses the local government for the 63.26 amount lost; 63.27 (7) property taxes approved by voters which are levied 63.28 against the referendum market value as provided under section 63.29 275.61; 63.30 (8) to fund matching requirements needed to qualify for 63.31 federal or state grants or programs to the extent that either 63.32 (i) the matching requirement exceeds the matching requirement in 63.33 calendar year 1997, or (ii) it is a new matching requirement 63.34 that didn't exist prior to 1998;and63.35 (9) to pay the expenses reasonably and necessarily incurred 63.36 in preparing for or repairing the effects of natural disaster 64.1 including the occurrence or threat of widespread or severe 64.2 damage, injury, or loss of life or property resulting from 64.3 natural causes, in accordance with standards formulated by the 64.4 emergency services division of the state department of public 64.5 safety, as allowed by the commissioner of revenue under section 64.6 275.74, paragraph (b); and 64.7 (10) to pay an abatement under section 469.1815. 64.8 Sec. 13. Minnesota Statutes 1997 Supplement, section 64.9 275.70, is amended by adding a subdivision to read: 64.10 Subd. 6. [MATCHING FUND REQUIREMENTS.] The special levy 64.11 provided in subdivision 5, clause (8), does not include the 64.12 increased direct and indirect costs related to general increases 64.13 in program costs where there is no mandated increase regarding 64.14 the matching fund requirements. Specifically, but without 64.15 limitation, the following provisions apply to the special levy 64.16 authorization in subdivision 5, clause (8): (1) increases in 64.17 direct or indirect income maintenance administrative costs are 64.18 not included; (2) increases for social services and social 64.19 services administration are included, but only to the extent 64.20 that the minimum local share amount needed to receive community 64.21 social service aids exceeds the amount levied for social 64.22 services and social services administration for the taxes 64.23 payable year 1997; and (3) increases in county costs for Title 64.24 IV-E Foster Care Services over the amount levied for the taxes 64.25 payable year 1997 are included to the extent the amount from 64.26 both years represents the local matching fund requirement for 64.27 the federal grant. 64.28 Sec. 14. Minnesota Statutes 1997 Supplement, section 64.29 275.71, subdivision 2, is amended to read: 64.30 Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a 64.31 local governmental unit for taxes levied in 1997 shall be equal 64.32 to the sum of: 64.33 (1) the amount the local governmental unit levied in 1996, 64.34 less any amount levied for debt, as reported to the department 64.35 of revenue under section 275.62, subdivision 1, clause (1), and 64.36 less any tax levied in 1996 against market value as provided for 65.1 in section 275.61; 65.2 (2) the amount of aids the local governmental unit was 65.3 certified to receive in calendar year 1997 under sections 65.4 477A.011 to 477A.03 before any reductions for state tax 65.5 increment financing aid under section 273.1399, subdivision 5; 65.6 (3) the amount of homestead and agricultural credit aid the 65.7 local governmental unit was certified to receive under section 65.8 273.1398 in calendar year 1997 before any reductions for tax 65.9 increment financing aid under section 273.1399, subdivision 5; 65.10 (4) the amount of local performance aid the local 65.11 governmental unit was certified to receive in calendar year 1997 65.12 under section 477A.05; and 65.13 (5) the amount of any payments certified to the local 65.14 government unit in 1997 under sections 298.28 and 298.282. 65.15 If a governmental unit was not required to report under 65.16 section 275.62 for taxes levied in 1997, the commissioner shall 65.17 request information on levies used for debt from the local 65.18 governmental unit and adjust its levy limit base accordingly. 65.19 (b) The levy limit base for a local governmental unit for 65.20 taxes levied in 1998 islimited toequal to its adjusted levy 65.21 limit base in the previous year, subject to any adjustments 65.22 under section 275.72 and multiplied by the increase that would 65.23 have occurred under subdivision 3, clause (3), if that clause 65.24 had been in effect for taxes levied in 1997. 65.25 (c) The levy limit base for a local governmental unit for 65.26 taxes levied in 1999 through 2001 is limited to its adjusted 65.27 levy limit base in the previous year, subject to adjustments 65.28 under section 275.72. 65.29 Sec. 15. Minnesota Statutes 1997 Supplement, section 65.30 275.71, subdivision 3, is amended to read: 65.31 Subd. 3. [ADJUSTED LEVY LIMIT BASE.] For taxes levied 65.32 in1997 and1998 through 2001, the adjusted levy limit is equal 65.33 to the levy limit base computed under subdivision 2 or section 65.34 275.72, multiplied by: 65.35 (1) one plus a percentage equal to the percentage growth in 65.36 the implicit price deflator; and 66.1 (2) for all cities and for counties outside of the 66.2 seven-county metropolitan area, one plus a percentage equal to 66.3 the percentage increase in number of households, if any, for the 66.4 most recent 12-month period for which data is available; and 66.5(3)for counties located in the seven-county metropolitan 66.6 area, one plus a percentage equal to the greater of the 66.7 percentage increase in the number of households in the county or 66.8 the percentage increase in the number of households in the 66.9 entire seven-county metropolitan area for the most recent 66.10 12-month period for which data is available; and 66.11 (3) one plus a percentage equal to the percentage increase 66.12 in the taxable market value of the jurisdiction due to new 66.13 construction of class 3 and class 5 property, as defined in 66.14 section 273.13, subdivisions 24 and 31, for the most recent year 66.15 for which data are available. 66.16 Sec. 16. Minnesota Statutes 1997 Supplement, section 66.17 275.71, subdivision 4, is amended to read: 66.18 Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in 66.191997 and1998 through 2001, the property tax levy limit for a 66.20 local governmental unit is equal to its adjusted levy limit base 66.21 determined under subdivision 3 plus any additional levy 66.22 authorized under section 275.73, which is levied against net tax 66.23 capacity, reduced by the sum of (1) the total amount of aids 66.24 that the local governmental unit is certified to receive under 66.25 sections 477A.011 to 477A.014, (2) homestead and agricultural 66.26 aids it is certified to receive under section 273.1398, (3) 66.27 local performance aid it is certified to receive under section 66.28 477A.05,and(4) taconite aids under sections 298.28 and 298.282 66.29 including any aid which was required to be placed in a special 66.30 fund for expenditure in the next succeeding year, and (5) flood 66.31 loss aid under section 273.1383. 66.32 Sec. 17. Minnesota Statutes 1997 Supplement, section 66.33 275.72, is amended by adding a subdivision to read: 66.34 Subd. 2a. [ADJUSTMENTS FOR CHANGES IN SERVICE LEVELS.] If 66.35 a local governmental unit, as a result of an annexation 66.36 agreement prior to January 1, 1997, has different tax rates in 67.1 various parts of the jurisdiction due to different service 67.2 levels, it may petition the commissioner of revenue to adjust 67.3 its levy limits established under section 275.71. The 67.4 commissioner shall adjust the levy limits to reflect scheduled 67.5 changes in tax rates related to increasing service levels in 67.6 areas currently receiving less city services. The local 67.7 governmental unit shall provide the commissioner with any 67.8 information the commissioner deems necessary in making the levy 67.9 limit adjustment. 67.10 Sec. 18. Minnesota Statutes 1997 Supplement, section 67.11 287.08, is amended to read: 67.12 287.08 [TAX, HOW PAYABLE; RECEIPTS.] 67.13 (a) The tax imposed by sections 287.01 to 287.12 shall be 67.14 paid to the treasurer of the county in which the mortgaged land 67.15 or some part thereof is situated at or before the time of filing 67.16 the mortgage for record or registration. The treasurer shall 67.17 endorse receipt on the mortgage, countersigned by the county 67.18 auditor, who shall charge the amount to the treasurer and such 67.19 receipt shall be recorded with the mortgage, and such receipt of 67.20 the record thereof shall be conclusive proof that the tax has 67.21 been paid to the amount therein stated and authorize any county 67.22 recorder to record the mortgage. Its form, in substance, shall 67.23 be "registration tax hereon of ..................... dollars 67.24 paid." If the mortgages be exempt from taxation the endorsement 67.25 shall be "exempt from registration tax," to be signed in either 67.26 case by the treasurer as such, and in case of payment to be 67.27 countersigned by the auditor. In case the treasurer shall be 67.28 unable to determine whether a claim of exemption should be 67.29 allowed, the tax shall be paid as in the case of a taxable 67.30 mortgage. 67.31 (b) Upon written application of the taxpayer, the county 67.32 treasurer may refund in whole or in part any tax which has been 67.33 erroneously paid, or a person having paid a mortgage registry 67.34 tax amount may seek a refund of such tax, or other appropriate 67.35 relief, by bringing an action in tax court in the county in 67.36 which the tax was paid, within 60 days of the payment. The 68.1 action is commenced by the serving of a petition for relief on 68.2 the county treasurer, and by filing a copy with the court. The 68.3 county attorney shall defend the action. The county treasurer 68.4 shall notify the treasurer of each county that has or would 68.5 receive a portion of the tax as paid. 68.6 (c) If the county treasurer determines a refund should be 68.7 paid, or if a refund is ordered, the county treasurer of each 68.8 county that actually received a portion of the tax shall 68.9 immediately pay a proportionate share of three percent of the 68.10 refund using any available county funds. The county treasurer 68.11 of each county which received, or would have received, a portion 68.12 of the tax shall also pay their county's proportionate share of 68.13 the remaining 97 percent of the court-ordered refund on or 68.14 before the tenth day of the following month using solely the 68.15 mortgage registry tax funds that would be paid to the 68.16 commissioner of revenue on that date under section 287.12. If 68.17 the funds on hand under this procedure are insufficient to fully 68.18 fund 97 percent of the court-ordered refund, the county 68.19 treasurer of the county in which the action was brought shall 68.20 file a claim with the commissioner of revenue under section 68.21 16A.48 for the remaining portion of 97 percent of the refund, 68.22 and shall pay over the remaining portion upon receipt of a 68.23 warrant from the state issued pursuant to the claim. 68.24 (d) When any such mortgage covers real property situate in 68.25 more than one county in this state the whole of such tax shall 68.26 be paid to the treasurer of the county where the mortgage is 68.27 first presented for record or registration, and the payment 68.28 shall be receipted and countersigned as above provided. If the 68.29 principal debt or obligation secured by such a multiple county 68.30 mortgage exceeds $1,000,000, the tax shall be divided and paid 68.31 over by the county treasurer receiving the same, on or before 68.32 the tenth day of each month after receipt thereof, to the county 68.33 or counties entitled thereto in the ratio which the market value 68.34 of the real property covered by the mortgage in each county 68.35 bears to the market value of all the property described in the 68.36 mortgage. In making such division and payment the county 69.1 treasurer shall send therewith a statement giving the 69.2 description of the property described in the mortgage and the 69.3 market value of the part thereof situate in each county. For 69.4 the purpose aforesaid, the treasurer of any county may require 69.5 the treasurer of any other county to certify to the former the 69.6 market valuation of any tract of land in any such mortgage. 69.7 Sec. 19. [365A.095] [DISSOLUTION.] 69.8 A petition signed by at least 75 percent of the property 69.9 owners in the territory of the subordinate service district 69.10 requesting the removal of the district may be presented to the 69.11 town board. Within 30 days after the town board receives the 69.12 petition, the town clerk shall determine the validity of the 69.13 signatures on the petition. If the requisite number of 69.14 signatures are certified as valid, the town board must hold a 69.15 public hearing on the petitioned matter. Within 30 days after 69.16 the end of the hearing, the town board must decide whether to 69.17 discontinue the subordinate service district, continue as it is, 69.18 or take some other action with respect to it. 69.19 Sec. 20. Minnesota Statutes 1996, section 462.396, 69.20 subdivision 2, is amended to read: 69.21 Subd. 2. [BUDGET; HEARING; LEVY LIMITS.] On or before 69.22 August 20 each year, the commission shall submit its proposed 69.23 budget for the ensuing calendar year showing anticipated 69.24 receipts, disbursements and ad valorem tax levy with a written 69.25 notice of the time and place of the public hearing on the 69.26 proposed budget to each county auditor and municipal clerk 69.27 within the region and those town clerks who in advance have 69.28 requested a copy of the budget and notice of public hearing. On 69.29 or before September 15 each year, the commission shall adopt, 69.30 after a public hearing held not later than September 15, a 69.31 budget covering its anticipated receipts and disbursements for 69.32 the ensuing year and shall decide upon the total amount 69.33 necessary to be raised from ad valorem tax levies to meet its 69.34 budget. After adoption of the budget and no later than 69.35 September 15, the secretary of the commission shall certify to 69.36 the auditor of each county within the region the county share of 70.1 the tax, which shall be an amount bearing the same proportion to 70.2 the total levy agreed on by the commission as the net tax 70.3 capacity of the county bears to the net tax capacity of the 70.4 region. (1) For taxes levied in1990 and thereafter1998, the 70.5 maximum amounts of levies made for the purposes of sections 70.6 462.381 to 462.398 are the following amounts, less the sum of70.7regional planning grants from the commissioner to that region: 70.8 for Region 1, $180,337; for Region 2,$150,000$180,000; for 70.9 Region 3, $353,110; for Region 5, $195,865; for Region 6E, 70.10 $197,177; for Region 6W,$150,000$180,000; for Region 70.11 7E,$158,653$180,000; for Region 8, $206,107; for Region 9, 70.12 $343,572. (2) For taxes levied in 1999 and thereafter, the 70.13 maximum amount that may be levied by each commission shall be 70.14 the amount authorized in clause (1), or 103 percent of the 70.15 amount levied in the previous year, whichever is greater. The 70.16 auditor of each county in the region shall add the amount of any 70.17 levy made by the commission within the limits imposed by this 70.18 subdivision to other tax levies of the county for collection by 70.19 the county treasurer with other taxes. When collected the 70.20 county treasurer shall make settlement of the taxes with the 70.21 commission in the same manner as other taxes are distributed to 70.22 political subdivisions. 70.23 Sec. 21. Minnesota Statutes 1997 Supplement, section 70.24 462A.071, subdivision 2, is amended to read: 70.25 Subd. 2. [APPLICATION.] (a) In order to qualify for 70.26 certification under subdivision 1, the owner or manager of the 70.27 property must annually apply to the agency. The application 70.28 must be in the form prescribed by the agency, contain the 70.29 information required by the agency, and be submitted by the date 70.30 and time specified by the agency. Beginning in 2000, the agency 70.31 shall adopt procedures and deadlines for making application to 70.32 permit certification of the units qualifying to the assessor by 70.33 no later than April 1 of the assessment year. 70.34 (b) Each application must include: 70.35 (1) the property tax identification number; 70.36 (2) the number, type, and size of units the applicant seeks 71.1 to qualify as low-income housing under class 4d; 71.2 (3) the number, type, and size of units in the property for 71.3 which the applicant is not seeking qualification, if any; 71.4 (4) a certification that the property has been inspected by 71.5 a qualified inspector within the past three years and meets the 71.6 minimum housing quality standards or is exempt from the 71.7 inspection requirement under subdivision 4; 71.8 (5) a statement indicating thebuilding isqualifying units 71.9 in compliance with the income limits; 71.10 (6) an executed agreement to restrict rents meeting the 71.11 requirements specified by the agency or executed leases for the 71.12 units for which qualification as low-income housing as class 4d 71.13 under section 273.13 is sought and the rent schedule; and 71.14 (7) any additional information the agency deems appropriate 71.15 to require. 71.16 (c) The applicant must pay a per-unit application fee to be 71.17 set by the agency. The application fee charged by the agency 71.18 must approximately equal the costs of processing and reviewing 71.19 the applications. The fee must be deposited in thegeneral71.20 housing development fund. 71.21 Sec. 22. Minnesota Statutes 1997 Supplement, section 71.22 462A.071, subdivision 4, is amended to read: 71.23 Subd. 4. [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 71.24 qualify for taxation under class 4d under section 273.13, a unit 71.25 must meetboththe housing maintenance code of the local unit of 71.26 government in which the unit is located, if such a code has been 71.27 adopted,andor the housing quality standards adopted by the 71.28 United States Department of Housing and Urban Development, if no 71.29 local housing maintenance code has been adopted. 71.30 (b) In order to meet the minimum housing quality standards, 71.31 a building must be inspected by an independent designated 71.32 inspector at least once every three years. The inspector must 71.33 certify that the building complies with the minimum standards. 71.34 The property owner must pay the cost of the inspection. 71.35 (c) The agency may exempt from the inspection requirement 71.36 housing units that are financed by a governmental entity and 72.1 subject to regular inspection or other compliance checks with 72.2 regard to minimum housing quality. Written certification must 72.3 be supplied to show that these exempt units have been inspected 72.4 within the last three years and comply with the requirements 72.5 under the public financing or local requirements. 72.6 Sec. 23. Minnesota Statutes 1997 Supplement, section 72.7 462A.071, subdivision 8, is amended to read: 72.8 Subd. 8. [PENALTIES.] (a) The penalties provided by this 72.9 subdivision apply to each unit that received class 4d taxation 72.10 for a year and failed to meet the requirements of section 72.11 273.126 and this section. 72.12 (b) If the owner or manager does not comply with the rent 72.13 restriction agreement, or does not comply with the income 72.14 restrictionsor, minimum housing quality standards, or the 72.15 section 8 availability requirements, a penalty applies equal to 72.16 the increased taxes that would have been imposed if theproperty72.17 unit had not been classified under class 4d for the year in 72.18 which restrictions were violated, plus an additional amount 72.19 equal to ten percent of the increased taxes. The provisions of 72.20 section 279.03 apply to the amount of increased taxes that would 72.21 have been imposed if a unit had not been classified under class 72.22 4d for the year in which restrictions were violated. 72.23 (c) If the agency finds that the violations were 72.24 inadvertent and insubstantial, a penalty of $50 per unit per 72.25 year applies in lieu of the penalty specified under paragraph 72.26 (b). In order to qualify under this paragraph, violations of 72.27 the minimum housing quality standards must be corrected within a 72.28 reasonable period of time and rent charged in excess of the 72.29 agreement must be rebated to the tenants. 72.30 (d) The agency may abate the penalties under this 72.31 subdivision for reasonable cause. 72.32 (e) Penalties assessed under paragraph (c) are payable to 72.33 the agency and must be deposited in thegeneralhousing 72.34 development fund. If an owner or manager fails to timely pay a 72.35 penalty imposed under paragraph (c), the agency may choose to: 72.36 (1) impose the penalty under paragraph (b); or 73.1 (2) certify the penalty under paragraph (c) to the auditor 73.2 for collection as additional taxes. 73.3 The agency shall certify to the county auditor penalties 73.4 assessed under paragraph (b) and clause (2). The auditor shall 73.5 impose and collect the certified penalties as additional taxes 73.6 which will be distributed to taxing districts in the same manner 73.7 as property taxes on the property. 73.8 Sec. 24. Minnesota Statutes 1996, section 475.58, 73.9 subdivision 1, is amended to read: 73.10 Subdivision 1. [APPROVAL BY ELECTORS; EXCEPTIONS.] 73.11 Obligations authorized by law or charter may be issued by any 73.12 municipality upon obtaining the approval of a majority of the 73.13 electors voting on the question of issuing the obligations, but 73.14 an election shall not be required to authorize obligations 73.15 issued: 73.16 (1) to pay any unpaid judgment against the municipality; 73.17 (2) for refunding obligations; 73.18 (3) for an improvement or improvement program, which 73.19 obligation is payable wholly or partly from the proceeds of 73.20 special assessments levied upon property specially benefited by 73.21 the improvement or by an improvement within the improvement 73.22 program, or of taxes levied upon the increased value of property 73.23 within a district for the development of which the improvement 73.24 is undertaken, including obligations which are the general 73.25 obligations of the municipality, if the municipality is entitled 73.26 to reimbursement in whole or in part from the proceeds of such 73.27 special assessments or taxes and not less than 20 percent of the 73.28 cost of the improvement or the improvement program is to be 73.29 assessed against benefited property or is to be paid from the 73.30 proceeds of federal grant funds or a combination thereof, or is 73.31 estimated to be received from such taxes within the district; 73.32 (4) payable wholly from the income of revenue producing 73.33 conveniences; 73.34 (5) under the provisions of a home rule charter which 73.35 permits the issuance of obligations of the municipality without 73.36 election; 74.1 (6) under the provisions of a law which permits the 74.2 issuance of obligations of a municipality without an election; 74.3 (7) to fund pension or retirement fund liabilities pursuant 74.4 to section 475.52, subdivision 6; 74.5 (8) under a capital improvement plan under section 373.40; 74.6and74.7 (9) to fund facilities as provided in subdivision 3; and 74.8 (10) under sections 469.1813 to 469.1815 (property tax 74.9 abatement authority bonds). 74.10 Sec. 25. Minnesota Statutes 1997 Supplement, section 74.11 477A.011, subdivision 36, is amended to read: 74.12 Subd. 36. [CITY AID BASE.] (a) Except as provided in 74.13 paragraphs (b), (c), and (d), "city aid base" means, for each 74.14 city, the sum of the local government aid and equalization aid 74.15 it was originally certified to receive in calendar year 1993 74.16 under Minnesota Statutes 1992, section 477A.013, subdivisions 3 74.17 and 5, and the amount of disparity reduction aid it received in 74.18 calendar year 1993 under Minnesota Statutes 1992, section 74.19 273.1398, subdivision 3. 74.20 (b) For aids payable in 1996 and thereafter, a city that in 74.21 1992 or 1993 transferred an amount from governmental funds to 74.22 its sewer and water fund, which amount exceeded its net levy for 74.23 taxes payable in the year in which the transfer occurred, has a 74.24 "city aid base" equal to the sum of (i) its city aid base, as 74.25 calculated under paragraph (a), and (ii) one-half of the 74.26 difference between its city aid distribution under section 74.27 477A.013, subdivision 9, for aids payable in 1995 and its city 74.28 aid base for aids payable in 1995. 74.29 (c) The city aid base for any city with a population less 74.30 than 500 is increased by $40,000 for aids payable in calendar 74.31 year 1995 and thereafter, and the maximum amount of total aid it 74.32 may receive under section 477A.013, subdivision 9, paragraph 74.33 (c), is also increased by $40,000 for aids payable in calendar 74.34 year 1995 only, provided that: 74.35 (i) the average total tax capacity rate for taxes payable 74.36 in 1995 exceeds 200 percent; 75.1 (ii) the city portion of the tax capacity rate exceeds 100 75.2 percent; and 75.3 (iii) its city aid base is less than $60 per capita. 75.4 (d) The city aid base for a city is increased by $20,000 in 75.5 1998 and thereafter and the maximum amount of total aid it may 75.6 receive under section 477A.013, subdivision 9, paragraph (c), is 75.7 also increased by $20,000 in calendar year 1998 only, provided 75.8 that: 75.9 (i) the city has a population in 1994 of 2,500 or more; 75.10 (ii) the city is located in a county, outside of the 75.11 metropolitan area, which contains a city of the first class; 75.12 (iii) the city's net tax capacity used in calculating its 75.13 1996 aid under section 477A.013 is less than $400 per capita; 75.14 and 75.15 (iv) at least four percent of the total net tax capacity, 75.16 for taxes payable in 1996, of property located in the city is 75.17 classified as railroad property. 75.18 (e) The city aid base for a city is increased by $200,000 75.19 in 1999 and thereafter and the maximum amount of total aid it 75.20 may receive under section 477A.013, subdivision 9, paragraph 75.21 (c), is also increased by $200,000 in calendar year 1999 only, 75.22 provided that: 75.23 (i) the city was incorporated as a statutory city after 75.24 December 1, 1993; 75.25 (ii) its city aid base does not exceed $5,600; and 75.26 (iii) the city had a population in 1996 of 5,000 or more. 75.27 Sec. 26. Minnesota Statutes 1996, section 477A.14, is 75.28 amended to read: 75.29 477A.14 [USE OF FUNDS.] 75.30 Forty percent of the total payment to the county shall be 75.31 deposited in the county general revenue fund to be used to 75.32 provide property tax levy reduction. The remainder shall be 75.33 distributed by the county in the following priority: 75.34 (a) 37.5 cents for each acre of county-administered other 75.35 natural resources land shall be deposited in a resource 75.36 development fund to be created within the county treasury for 76.1 use in resource development, forest management, game and fish 76.2 habitat improvement, and recreational development and 76.3 maintenance of county-administered other natural resources 76.4 land. Any county receiving less than $5,000 annually for the 76.5 resource development fund may elect to deposit that amount in 76.6 the county general revenue fund; 76.7 (b) From the funds remaining, within 30 days of receipt of 76.8 the payment to the county, the county treasurer shall pay each 76.9 organized township 30 cents per acre of acquired natural 76.10 resources land and 7.5 cents per acre of other natural resources 76.11 land located within its boundaries. Payments for natural 76.12 resources lands not located in an organized township shall be 76.13 deposited in the county general revenue fund. Payments to 76.14 counties and townships pursuant to this paragraph shall be used 76.15 to provide property tax levy reduction, except that of the 76.16 payments for natural resources lands not located in an organized 76.17 township, the county may allocate the amount determined to be 76.18 necessary for maintenance of roads in unorganized townships. 76.19 Provided that, if the total payment to the county pursuant to 76.20 section 477A.12 is not sufficient to fully fund the distribution 76.21 provided for in this clause, the amount available shall be 76.22 distributed to each township and the county general revenue fund 76.23 on a pro rata basis; and 76.24 (c) Any remaining funds shall be deposited in the county 76.25 general revenue fund. Provided that, if the distribution to the 76.26 county general revenue fund exceeds $35,000, the excess shall be 76.27 used to provide property tax levy reduction. 76.28 Sec. 27. Laws 1971, chapter 773, section 1, subdivision 2, 76.29 as amended by Laws 1974, chapter 351, section 5, Laws 1976, 76.30 chapter 234, section 7, Laws 1978, chapter 788, section 1, Laws 76.31 1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, 76.32 Laws 1988, chapter 513, section 1, and Laws 1992, chapter 511, 76.33 article 9, section 23, is amended to read: 76.34 Subd. 2. For each of the years through19982003, the city 76.35 of St. Paul is authorized to issue bonds in the aggregate 76.36 principal amount of$8,000,000$15,000,000 for each year; or in 77.1 an amount equal to one-fourth of one percent of the assessors 77.2 estimated market value of taxable property in St. Paul, 77.3 whichever is greater, provided that no more than 77.4$8,000,000$15,000,000 of bonds is authorized to be issued in 77.5 any year, unless St. Paul's local general obligation debt as 77.6 defined in this section is less than six percent of market value 77.7 calculated as of December 31 of the preceding year; but at no 77.8 time shall the aggregate principal amount of bonds authorized 77.9 exceed$15,700,000 in 1992, $16,600,000 in 1993, $16,600,000 in77.101994, $16,600,000 in 1995, $17,500,000 in 1996, $17,500,000 in77.111997, and$18,000,000 in 1998, $18,000,000 in 1999, $19,000,000 77.12 in 2000, $19,000,000 in 2001, $19,500,000 in 2002, and 77.13 $20,000,000 in 2003. 77.14 Sec. 28. Laws 1971, chapter 773, section 1, as amended by 77.15 Laws 1974, chapter 351, section 5, subdivision 1, Laws 1976, 77.16 chapter 234, section 1, Laws 1978, chapter 788, section 1, Laws 77.17 1981, chapter 369, section 1, and Laws 1983, chapter 302, 77.18 section 1, is amended to read: 77.19 Section 1. [ST. PAUL, CITY OF; CAPITAL IMPROVEMENT 77.20 PROGRAM.] 77.21 Subdivision 1. Notwithstanding any provision of the 77.22 charter of the city of St. Paul, the council of said city shall 77.23 have power by a resolution adopted by five affirmative votes of 77.24 all its members to authorize the issuance and sale of general 77.25 obligation bonds of the city in the years stated and in the 77.26 aggregate annual amounts not to exceed the limits prescribed in 77.27 subdivision 2 of this section for the payment of which the full 77.28 faith and credit of the city is irrevocably pledged. 77.29 Subd. 2. For each of the years 1983, 1984, 1985, 1986, 77.30 1987, and 1988 the city of St. Paul is authorized to issue bonds 77.31 in the aggregate principal amount of $8,000,000 for each year; 77.32 or in an amount equal to one-fourth of one percent of the 77.33 assessors estimated market value of taxable property in St. 77.34 Paul, whichever is greater, provided that no more than 77.35 $8,000,000 of bonds is authorized to be issued in any year, 77.36 unless St. Paul's local general obligation debt as defined in 78.1 this section is less than six percent of market value calculated 78.2 as of December 31 of the preceding year; but at no time shall 78.3 the aggregate principal amount of bonds authorized exceed 78.4 $9,000,000 in 1983, $9,500,000 in 1984, $10,100,000 in 1985, 78.5 $10,700,000 in 1986, $11,300,000 in 1987, and $12,000,000 in 78.6 1988. 78.7 Subd. 3. For purposes of this section, St. Paul's general 78.8 obligation debt shall consist of the principal amount of all 78.9 outstanding bonds of (1) the city of St. Paul, the housing and 78.10 redevelopment authority of St. Paul, the civic center authority 78.11 of St. Paul, and the port authority of St. Paul, for which the 78.12 full faith and credit of the city or any of the foregoing 78.13 authorities has been pledged; (2) Independent School District 78.14 625, for which the full faith and credit of the district has 78.15 been pledged; and (3) the county of Ramsey, for which the full 78.16 faith and credit of the county has been pledged, reduced by an 78.17 amount equal to the principal amount of the outstanding bonds 78.18 multiplied by a figure, the numerator of which is equal to the 78.19assessed valuenet tax capacity of property within the county 78.20 outside of the city of St. Paul and the denominator of which is 78.21 equal to theassessed valuenet tax capacity of the county. 78.22 There shall be deducted before making the foregoing 78.23 computations the outstanding principal amount of all refunded 78.24 bonds, all tax or aid anticipation certificates of indebtedness 78.25 of the city, the authorities, the school district and the county 78.26 for which the full faith and credit of the bodies has been 78.27 pledged and all tax increment financed bonds which have not 78.28 used, for the prior three consecutive years, general tax levies 78.29or capitalized interestto support annual principal and interest 78.30 payments. 78.31 Sec. 29. Laws 1971, chapter 773, section 2, as amended by 78.32 Laws 1978, chapter 788, section 2, Laws 1983, chapter 302, 78.33 section 2, Laws 1988, chapter 513, section 2, and Laws 1992, 78.34 chapter 511, article 9, section 24, is amended to read: 78.35 Sec. 2. The proceeds of all bonds issued pursuant to 78.36 section 1 hereof shall be used exclusively for the acquisition, 79.1 construction, and repair of capital improvements and, commencing 79.2 in the year 1992 and notwithstanding any provision in Laws 1978, 79.3 chapter 788, section 5, as amended, for redevelopment project 79.4 activities as defined in Minnesota Statutes, section 469.002, 79.5 subdivision 14, in accordance with Minnesota Statutes, section 79.6 469.041, clause (6). The amount of proceeds of bonds authorized 79.7 by section 1 used for redevelopment project activities shall not 79.8 exceed$655,000 in 1992, $690,000 in 1993, $690,000 in 1994,79.9$690,000 in 1995, $700,000 in 1996, $700,000 in 1997,79.10and$725,000 in 1998 or any later year. 79.11 None of the proceeds of any bonds so issued shall be 79.12 expended except upon projects which have been reviewed, and have 79.13 received a priority rating, from a capital improvements 79.14 committee consisting of 18 members, of whom a majority shall not 79.15 hold any paid office or position under the city of St. Paul. 79.16 The members shall be appointed by the mayor, with at least four 79.17 members from each Minnesota senate district located entirely 79.18 within the city and at least two members from each senate 79.19 district located partly within the city. Prior to making an 79.20 appointment to a vacancy on the capital improvement budget 79.21 committee, the mayor shall consult the legislators of the senate 79.22 district in which the vacancy occurs. The priorities and 79.23 recommendations of the committee shall be purely advisory, and 79.24 no buyer of any bonds shall be required to see to the 79.25 application of the proceeds. 79.26 Sec. 30. Laws 1984, chapter 380, section 1, as amended by 79.27 Laws 1994, chapter 505, article 6, section 27, is amended to 79.28 read: 79.29 Section 1. [TAX.] 79.30 The Anoka county board may levy a taxonof not more than 79.31 .01 percent of the taxable market value of taxable 79.32 property located within the countyoutside ofexcluding any 79.33 taxable property taxed by any cityin which is situated afor 79.34 the support of any free public library, to acquire, better, and 79.35 construct county library buildings and to pay principal and 79.36 interest on bonds issued for that purpose. The tax shall be 80.1 disregarded in the calculation of levies or limits on levies 80.2 provided by Minnesota Statutes, section 373.40, or other law. 80.3 Sec. 31. Laws 1984, chapter 380, section 2, is amended to 80.4 read: 80.5 Sec. 2. [AUTHORIZATION.] 80.6 The Anoka county board may, by resolution adopted by a 80.7 four-sevenths vote, issue and sell general obligation bonds of 80.8 the countyin the amount of $9,000,000in the manner provided in 80.9 Minnesota Statutes, chapter 475, to acquire, better, and 80.10 construct county library buildings.The total amount of bonds80.11outstanding at any time shall not exceed $5,000,000. The county80.12board, prior to the issuance of any bonds authorized by section80.131 and after adopting the resolution as provided above in this80.14section, shall adopt a resolution by majority vote of the county80.15board stating the amount, purpose and, in general, the security80.16to be provided for the bonds, and shall publish the resolution80.17once each week for two consecutive weeks in the medium of80.18official and legal publication of the county. The bonds may be80.19issued without the submission of the question of their issuance80.20to the voters of the county library district unless within 2180.21days after the second publication of the resolution a petition80.22requesting a referendum, signed by at least ten percent of the80.23registered voters of the county, is filed with the county80.24auditor. If a petition is filed, bonds may be issued unless80.25disapproved by a majority of the voters of the county library80.26district, voting on the question of their issuance at a regular80.27or special election.The bonds shall not be subject to the 80.28 requirements of Minnesota Statutes, sections 475.57 to 475.59. 80.29 The maturity years and amounts and interest rates of each series 80.30 of bonds shall be fixed so that the maximum amount of principal 80.31 and interest to become due in any year, on the bonds of that 80.32 series and of all outstanding series issued by or for the 80.33 purposes of libraries, shall not exceed an amount equal to 80.34three-fourths of a mill times the assessed valuethe lesser of 80.35 (i) .01 percent of the taxable market value of all taxable 80.36 property in the county,which was notexcluding any taxable 81.1 property taxedin 1981by any city for the support of any free 81.2 public library,as last finally equalized before the issuance of81.3the seriesor (ii) $1,250,000. When the tax levy authorized in 81.4 this sections is collected, it shall be appropriated and 81.5 credited to a debt service fund for the bonds. The tax levy for 81.6 the debt service fund under Minnesota Statutes, section 475.61 81.7 shall be reduced by the amount available or reasonably 81.8 anticipated to be available in the fund to make payments 81.9 otherwise payable from the levy pursuant to section 475.61. 81.10 Sec. 32. Laws 1992, chapter 511, article 2, section 52, as 81.11 amended by Laws 1997, chapter 231, article 2, section 50, is 81.12 amended to read: 81.13 Sec. 52. [WATERSHED DISTRICT LEVIES.] 81.14 (a) The Nine Mile Creek watershed district, the 81.15 Riley-Purgatory Bluff Creek watershed district, the Minnehaha 81.16 Creek watershed district, the Coon Creek watershed district, and 81.17 the Lower Minnesota River watershed district may levy in 1992 81.18 and thereafter a tax not to exceed $200,000 on property within 81.19 the district for the administrative fund. The levy authorized 81.20 under this section is in lieu of section 103D.905, subdivision 81.21 3. The administrative fund shall be used for the purposes 81.22 contained in Minnesota Statutes, section 103D.905, subdivision 81.23 3. The board of managers shall make the levy for the 81.24 administrative fund in accordance with Minnesota Statutes, 81.25 section 103D.915. 81.26 (b) The Wild Rice watershed district may levy, for taxes 81.27 payable in 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 81.28 and 2002, an ad valorem tax not to exceed $200,000 on property 81.29 within the district for the administrative fund. The additional 81.30 $75,000 above the amount authorized in Minnesota Statutes, 81.31 section 103D.905, subdivision 3, must be used for (1) costs 81.32 incurred in connection with the development and maintenance of 81.33 cost-sharing projects with the United States Army Corps of 81.34 Engineers or (2) administrative costs associated with 1997 flood 81.35 mitigation projects. The board of managers shall make the levy 81.36 for the administrative fund in accordance with Minnesota 82.1 Statutes, section 103D.915. 82.2 Sec. 33. Laws 1994, chapter 587, article 11, is amended by 82.3 adding a section to read: 82.4 Sec. 5a. [POLITICAL SUBDIVISION.] 82.5 For purposes of Minnesota Statutes, section 275.066, the 82.6 Chisholm/Hibbing airport authority is a political subdivision of 82.7 the state of Minnesota. 82.8 Sec. 34. Laws 1997, chapter 231, article 2, section 63, 82.9 subdivision 1, is amended to read: 82.10 Subdivision 1. [IMPROVEMENTS MADE TO CERTAIN APARTMENTS.] 82.11 (a) Notwithstanding any other provisions to the contrary, the 82.12 market value increase resulting from improvements made after the 82.13 effective date of this act and prior to January 1,19992000, to 82.14 qualifying property located in the city of Brooklyn Center, 82.15 Richfield, or St. Louis Park shall be excluded for assessment 82.16 purposes under the conditions provided in this subdivision. 82.17 (b) "Qualifying property" means property that meets all of 82.18 the following criteria: 82.19 (1) the building is at least 30 years old at the time of 82.20 the improvements; 82.21 (2) the building is residential real estate of four or more 82.22 units and is classified under Minnesota Statutes, section 82.23 273.13, subdivision 25, as class 4a, 4c, or 4d property; and 82.24 (3) the total cost of the qualifying improvements exceeds 82.25$5,000$2,500 per unit. 82.26 (c) A building permit must have been issued prior to the 82.27 commencement of the improvements. Only improvements to the 82.28 residential structure and garages qualify under this 82.29 subdivision. The assessor shall require an application, 82.30 including, if unknown by the assessor, documentation of the age 82.31 of the building from the owner. The application may be filed 82.32 subsequent to the date of the building permit provided that the 82.33 application is filed prior to the next assessment date. 82.34 (d) If the property qualifies under this subdivision, the 82.35 assessor shall note the qualifying value of the improvements on 82.36 the property's record and that amount shall be subtracted from 83.1 the qualifying property's market value for the five assessment 83.2 years immediately following the year in which the improvements 83.3 were completed, at which time the assessor shall determine the 83.4 property's estimated market value, and 20 percent of the 83.5 qualifying value shall be added back in each of the next five 83.6 subsequent assessment years. The assessor may require from the 83.7 owner any documentation necessary to verify that the cost of 83.8 improvements exceed the$5,000$2,500 per unit minimum. 83.9 Sec. 35. Laws 1997, chapter 231, article 2, section 68, 83.10 subdivision 3, is amended to read: 83.11 Subd. 3. [MORATORIUM ON CHANGES IN ASSESSMENT PRACTICES.] 83.12 (a) An assessor may not change the current practices or policies 83.13 used generally in assessing elderly assisted living facilities. 83.14 (b) An assessor may not change the assessment of an 83.15 existing elderly assisted living facility, unless the change is 83.16 made as a result of a change in ownership, occupancy, or use of 83.17 the facility. This paragraph does not apply to: 83.18 (1) a facility that was constructed during calendar year 83.19 1997 or 1998; 83.20 (2) a facility that was converted to an elderly assisted 83.21 living facility during calendar year 1997 or 1998; or 83.22 (3) a change in market value. 83.23 (c) This subdivision expires and no longer applies on the 83.24 earlier of: 83.25 (1) the enactment of legislation establishing criteria for 83.26 the property taxation of elderly assisted living facilities; or 83.27 (2)finaladjournment of the1998 legislature1999 regular 83.28 legislative session. 83.29 Sec. 36. Laws 1997, chapter 231, article 3, section 9, is 83.30 amended to read: 83.31 Sec. 9. [EFFECTIVE DATE.] 83.32 Sections 1 to 7 are effective for taxeslevied in 1997 and83.331998, payable in 1998 and 1999through payable 2002. 83.34 Upon compliance with Minnesota Statutes, section 645.021, 83.35 subdivision 3, by the governing body of Faribault county or the 83.36 city of Blue Earth, section 8 is effective for taxes levied in 84.1 1997 through 2001and 1998in the county or city that approves 84.2 it. 84.3 Sec. 37. Laws 1997, Second Special Session chapter 2, 84.4 section 33, is amended to read: 84.5 Sec. 33. [EFFECTIVE DATE.] 84.6 Sections 1 to 19, 21, 22, and 24 to 32 are effective on the 84.7 day following final enactment. Section 20 is effective for 84.8 taxes levied in 1997, payable in 1998, and thereafter, in each 84.9 of the counties of Polk, Clay, Kittson, Marshall, Norman, and 84.10 Wilkin, the day following compliance with Minnesota Statutes, 84.11 section 645.021, subdivision 3, by that county. Section 23 is 84.12 effective retroactive to April 1, 1997. 84.13 Sec. 38. [QUALIFIED PROPERTY.] 84.14 A contiguous property located within a county adjacent to a 84.15 county containing a city of the first class and within the 84.16 metropolitan area as defined in Minnesota Statutes, section 84.17 473.121, shall be valued and classified under sections 39 and 84.18 40, provided it meets the following conditions: 84.19 (1) the property does not exceed 60 acres; 84.20 (2) the property includes a sculpture garden open to the 84.21 public, either free of charge or for a nominal admission fee; 84.22 (3) the property includes a system of internal roads and 84.23 paths for pedestrian use and an amphitheater for live artistic 84.24 performances; 84.25 (4) the property is used for a summer youth art camp; 84.26 (5) the property is used for seminars for aspiring and 84.27 professional artists; 84.28 (6) the property includes the homestead of the owner; and 84.29 (7) the property has been owned by the owner for at least 84.30 40 years. 84.31 Sec. 39. [CLASSIFICATION.] 84.32 Notwithstanding any law to the contrary, a property 84.33 qualifying under section 38 shall be classified as class 2a 84.34 property under Minnesota Statutes, section 273.13, subdivision 84.35 23. 84.36 Sec. 40. [VALUATION.] 85.1 Notwithstanding Minnesota Statutes, section 273.11, 85.2 subdivision 1, the land qualifying under section 38 shall be 85.3 valued as if it were agricultural property, using a per acre 85.4 valuation equal to the average per acre valuation of similar 85.5 agricultural property within the county. 85.6 Sec. 41. [SPECIAL ASSESSMENT DEFERRAL AUTHORIZED.] 85.7 Notwithstanding Minnesota Statutes, chapter 429, a city may 85.8 defer the payment of any special assessment levied against a 85.9 property qualifying under section 38 as determined by the city. 85.10 Sec. 42. [TRANSFER OF PROPERTY; PAYMENT OF DEFERRED 85.11 TAXES.] 85.12 Subdivision 1. [ADDITIONAL TAX.] The assessor shall make a 85.13 separate determination of the market value and net tax capacity 85.14 of a property qualifying under section 38 as if sections 39 and 85.15 40 did not apply. The tax based upon the appropriate local tax 85.16 rate applicable to such property in the taxing district shall be 85.17 recorded on the property assessment records. 85.18 Subd. 2. [RECAPTURE.] (a) Property or any portion thereof 85.19 qualifying under section 38 is subject to additional taxes if (1) 85.20 ownership of the property is transferred to anyone other than 85.21 the spouse or child of the current owner, or (2) the current 85.22 owner or the spouse or child of the current owner has not 85.23 conveyed or entered into a contract before July 1, 2002, to 85.24 convey the property to a nonprofit foundation or corporation 85.25 created to own and operate the property as an art park providing 85.26 the services included in section 38, clauses (2) to (5). 85.27 (b) The additional taxes are imposed at the earlier of (1) 85.28 the year following transfer of ownership to anyone other than 85.29 the spouse or child of the current owner or a nonprofit 85.30 foundation or corporation created to own and operate the 85.31 property as an art park, or (2) for taxes payable in 2003. The 85.32 additional taxes are equal to the difference between the taxes 85.33 determined under sections 39 and 40 and the amount determined 85.34 under subdivision 1 for all years that the property qualified 85.35 under section 38. The additional taxes must be extended against 85.36 the property on the tax list for the current year; provided, 86.1 however, that no interest or penalties may be levied on the 86.2 additional taxes if timely paid. 86.3 Subd. 3. [CURRENT OWNER.] For purposes of this section, 86.4 "current owner" means the owner of property qualifying under 86.5 section 38 on the date of final enactment of this act or that 86.6 owner's spouse or child. 86.7 Subd. 4. [NONPROFIT FOUNDATION OR CORPORATION.] For 86.8 purposes of this act, "nonprofit foundation or corporation" 86.9 means a nonprofit entity created to own and operate the property 86.10 as an art park providing the services included in section 38, 86.11 clauses (2) to (5). 86.12 Sec. 43. [CITY OF RED WING; LEVY LIMITS.] 86.13 Subdivision 1. [LEVY LIMIT BASE INCREASE.] The levy limit 86.14 base of the city of Red Wing for taxes levied in 1998 under 86.15 Minnesota Statutes, section 275.71, subdivision 2, paragraph 86.16 (b), is increased by $477,677. 86.17 Subd. 2. [EFFECTIVE DATE.] Upon compliance by the 86.18 governing body of the city of Red Wing with Minnesota Statutes, 86.19 section 645.021, subdivision 3, subdivision 1 is effective for 86.20 taxes levied in 1998, payable in 1999. 86.21 Sec. 44. [WAITE PARK; LEVY LIMIT ADJUSTMENT.] 86.22 Subdivision 1. [ADJUSTED LEVY LIMIT BASE.] For taxes 86.23 levied in 1998 only, the adjusted levy limit base defined in 86.24 Minnesota Statutes, section 275.71, subdivision 3, for the city 86.25 of Waite Park, is increased by $117,000. 86.26 Subd. 2. [EFFECTIVE DATE.] Upon compliance by the 86.27 governing body of the city of Waite Park with Minnesota 86.28 Statutes, section 645.021, subdivision 3, subdivision 1 is 86.29 effective for taxes levied in 1998, payable in 1999. 86.30 Sec. 45. [JENSEN-NOPEMING SPECIAL DISTRICT.] 86.31 Subdivision 1. [SPECIAL DISTRICT MAY BE ESTABLISHED.] The 86.32 counties of Carlton and St. Louis may establish the 86.33 Jensen-Nopeming Special District with authority to levy a 86.34 property tax not greater than $200,000 annually for the capital 86.35 costs of the Chris Jensen Nursing Home and the Nopeming Nursing 86.36 Home. The tax may be levied on taxable property in the 87.1 territory described in Minnesota Statutes, section 458D.02, 87.2 subdivision 2. The district shall be governed by a board 87.3 composed of those members of the St. Louis county board who 87.4 represent territory subject to taxation by the district and two 87.5 members of the Carlton county board elected by the Carlton 87.6 county board to serve terms provided by the board. The proceeds 87.7 of the tax may be used only for capital costs of the nursing 87.8 homes. As provided by Minnesota Statutes, chapter 475, debt may 87.9 be incurred by the district for capital costs of the nursing 87.10 home and the proceeds of the tax may be pledged to secure the 87.11 debt. The district may enter into appropriate agreements with 87.12 either county to facilitate the incurrence of debt or otherwise 87.13 discharge its duties under this section. 87.14 By April 15, 1999, the St. Louis county board shall 87.15 complete a study examining the long-term profitability of Chris 87.16 Jensen and Nopeming nursing homes. Upon completion of the 87.17 study, the board must adopt a plan to eliminate any future 87.18 property tax revenue dedicated to operating costs of the two 87.19 facilities. 87.20 Subd. 2. [LOCAL APPROVAL.] Subdivision 1 is effective the 87.21 day after the county boards of Carlton and St. Louis counties 87.22 comply with the provisions of Minnesota Statutes, section 87.23 645.021, subdivision 3. 87.24 Sec. 46. [CITY OF MINNEAPOLIS; TRANSIT ZONE TAX.] 87.25 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 87.26 section, the following terms have the meanings given. 87.27 (b) "City" means the city of Minneapolis. 87.28 (c) "Downtown taxing district" means the geographic area in 87.29 which the city may impose the tax under Laws 1986, chapter 396, 87.30 section 4, as amended by Laws 1986, chapter 400, section 44. 87.31 (d) "Transit zone tax capacity" means the reduction in net 87.32 tax capacity of transit zone property in the downtown taxing 87.33 district that result from the reduced class rate under the 87.34 provisions of Minnesota Statutes, section 273.13, subdivision 87.35 23, paragraph (c), or a successor provision. Transit zone tax 87.36 capacity is determined without regard to captured or original 88.1 net tax capacity under Minnesota Statutes, section 469.177, or 88.2 to the distribution or contribution value under Minnesota 88.3 Statutes, section 473F.08. 88.4 Subd. 2. [AUTHORITY TO IMPOSE.] (a) The city may, by 88.5 ordinance, impose a tax on transit zone tax capacity within the 88.6 downtown taxing district. 88.7 (b) The rate of the tax equals the sum of the ad valorem 88.8 property tax rates imposed by the county, city, school district, 88.9 and special taxing districts in the city that apply for the 88.10 taxable year. 88.11 (c) The tax equals the rate multiplied by the transit zone 88.12 tax capacity. 88.13 Subd. 3. [COLLECTION AND ADMINISTRATION.] Any tax imposed 88.14 under this section is payable at the same time and in the same 88.15 manner and must be collected and imposed as provided by general 88.16 law for ad valorem taxes. Any tax not paid by the due date is 88.17 subject to the same penalty and interest as ad valorem taxes not 88.18 paid by the due date. 88.19 Subd. 4. [USE OF REVENUES.] The revenues from the tax 88.20 imposed under this section must be deposited in a separate 88.21 account on the city's books and records. Money in the account 88.22 may only be used in the downtown taxing district to provide 88.23 transit services or transit related projects that directly 88.24 increase the feasibility of existing or proposed transit system 88.25 services or improvements. 88.26 Subd. 5. [EFFECTIVE DATE.] This section is effective the 88.27 day following final enactment and applies to the city of 88.28 Minneapolis under the provisions of Minnesota Statutes, section 88.29 645.023. 88.30 Sec. 47. [APPROPRIATION.] 88.31 $50,000 is appropriated from the general fund for fiscal 88.32 year 1999 to the commissioner of revenue to make a grant to the 88.33 research foundation of the association of Minnesota counties. 88.34 The grant must be used to produce training videos and supporting 88.35 materials to educate the general public about how the Minnesota 88.36 property tax system works. The grant must include as a 89.1 condition that copies of the videos and materials will be made 89.2 available at no cost to each Minnesota county government for 89.3 distribution to local television and other outlets and to the 89.4 Minnesota extension services. Copies must also be provided at 89.5 no cost to the department of revenue. 89.6 Sec. 48. [REPEALER.] 89.7 Subdivision 1. [TOWN SUBORDINATE SERVICE 89.8 DISTRICT.] Minnesota Statutes 1996, section 365A.09, is repealed. 89.9 Subd. 2. [EDUCATION FINANCE ACT OF 1992.] Minnesota 89.10 Statutes 1996, sections 124A.697; 124A.698; 124A.70; 124A.71; 89.11 124A.711, subdivision 1; 124A.72; and 124A.73; and Minnesota 89.12 Statutes 1997 Supplement, section 124A.711, subdivision 2, are 89.13 repealed. 89.14 Subd. 3. [GENERAL EDUCATION REPEALER.] Laws 1992, chapter 89.15 499, article 7, section 31, is repealed. 89.16 Sec. 49. [EFFECTIVE DATE.] 89.17 Section 2, clause (30), is effective beginning with the 89.18 1998 assessment for taxes payable in 1999, except that for the 89.19 1998 assessment, the filing requirement under section 272.025, 89.20 subdivision 3, shall be 60 days after enactment of this act. 89.21 Sections 3 and 4 are effective for real estate sales and 89.22 transfers occurring on or after July 1, 1998. Section 6, 89.23 paragraph (d), clause (5), is effective for the 1998 assessment 89.24 and thereafter. Section 6, paragraphs (a), clause (3), and (b), 89.25 and sections 9 and 21 to 23 are effective beginning for property 89.26 taxes assessed in 1998 and payable in 1999. Sections 7, 11, and 89.27 20 are effective for taxes levied in 1998, payable in 1999, and 89.28 thereafter. Section 8 is effective beginning with assessment 89.29 year 1998 for aids payable in 1999. Section 10 is effective for 89.30 public hearings held in 1998 and thereafter. Sections 12, 14, 89.31 15, 16, and 17 are effective for taxes levied in 1998, payable 89.32 in 1999 through taxes levied in 2001, payable in 2002. Section 89.33 13 is effective for taxes payable in 1998 through 2001. Section 89.34 18 is effective for mortgages recorded or registered on or after 89.35 July 1, 1998. Section 24 confirms the original intent of the 89.36 legislature in enacting the abatement law and is effective 90.1 retroactively to the same time Minnesota Statutes, sections 90.2 469.1813 to 469.1815, became effective. Section 25 is effective 90.3 for aids payable in 1999 and thereafter. Section 26 is 90.4 effective for payments to counties after June 30, 1998. 90.5 Sections 27 to 29 are effective upon compliance by the governing 90.6 body of the city of St. Paul with Minnesota Statutes, section 90.7 645.021, subdivision 3. Sections 30 and 31 are effective the 90.8 day after the chief clerical officer of Anoka county complies 90.9 with Minnesota Statutes, section 645.021, subdivision 3. 90.10 Section 32 is effective for taxes levied in 1997, payable in 90.11 1998, and thereafter. Section 33 is effective for taxes payable 90.12 in 1998 and thereafter. Section 34 is effective for each of the 90.13 cities of Brooklyn Center, Richfield, and St. Louis Park upon 90.14 compliance with Minnesota Statutes, section 645.021, subdivision 90.15 3, by the governing body of that city. Sections 38 to 42 are 90.16 effective beginning with taxes payable in 1998 and ending with 90.17 taxes payable in 2003. Section 48, subdivision 1, is effective 90.18 the day following final enactment. Section 48, subdivisions 2 90.19 and 3, are effective July 1, 1998. 90.20 ARTICLE 4 90.21 SENIOR CITIZENS' PROPERTY TAX DEFERRAL 90.22 Section 1. Minnesota Statutes 1997 Supplement, section 90.23 290B.03, subdivision 1, is amended to read: 90.24 Subdivision 1. [PROGRAM QUALIFICATIONS.] The 90.25 qualifications for the senior citizens' property tax deferral 90.26 program are as follows: 90.27 (1) the property must be owned and occupied as a homestead 90.28 by a person 65 years of age or older. In the case of a married 90.29 couple, both of the spouses must be at least 65 years old at the 90.30 time the first property tax deferral is granted, regardless of 90.31 whether the property is titled in the name of one spouse or both 90.32 spouses, or titled in another way that permits the property to 90.33 have homestead status; 90.34 (2) the total household income of the qualifying 90.35 homeowners, as defined in section 290A.03, subdivision 5, for 90.36 the calendar year preceding the year of the initial application 91.1 may not exceed$30,000$40,000; 91.2 (3) the homestead must have been owned and occupied as the 91.3 homestead of at least one of the qualifying homeowners for at 91.4 least 15 years prior to the year the initial application is 91.5 filed; 91.6 (4) there are no delinquent property taxes, penalties, or 91.7 interest on the homesteaded property; 91.8 (5) there are no delinquent special assessments on the 91.9 homesteaded property; 91.10 (6) there are no state or federal tax liens or judgment 91.11 liens on the homesteaded property; 91.12 (7) there are no mortgages or other liens on the property 91.13 that secure future advances, except for those subject to credit 91.14 limits that result in compliance with clause (8); and 91.15 (8) the total unpaid balances of debts secured by mortgages 91.16 and other liens on the property, including unpaid special 91.17 assessments, but not including property taxes payable during the 91.18 year, does not exceed 30 percent of the assessor's estimated 91.19 market value for the year. 91.20 Sec. 2. Minnesota Statutes 1997 Supplement, section 91.21 290B.04, subdivision 1, is amended to read: 91.22 Subdivision 1. [INITIAL APPLICATION.] A taxpayer meeting 91.23 the program qualifications under section 290B.03 may apply to 91.24 the commissioner of revenue for the deferral of taxes. 91.25 Applications are due on or before July 1 for deferral of any of 91.26 the following year's property taxes. A taxpayer may apply in 91.27 the year in which the taxpayer becomes 65 years old, provided 91.28 that no deferral of property taxes will be made until the 91.29 calendar year after the taxpayer becomes 65 years old. The 91.30 application, which shall be prescribed by the commissioner of 91.31 revenue, shall include the following items and any other 91.32 information which the commissioner deems necessary: 91.33 (1) the name, address, and social security number of the 91.34 owner or owners; 91.35 (2) a copy of the property tax statement for the current 91.36 payable year for the homesteaded property; 92.1 (3) the initial year of ownership and occupancy as a 92.2 homestead; 92.3 (4) the owner's household income for the previous calendar 92.4 year; and 92.5 (5) information on any mortgage loans or other amounts 92.6 secured by mortgages or other liens against the property, for 92.7 which purpose the commissioner may require the applicant to 92.8 provide a copy of the mortgage note, the mortgage, or a 92.9 statement of the balance owing on the mortgage loan provided by 92.10 the mortgage holder. The commissioner may require the 92.11 appropriate documents in connection with obtaining and 92.12 confirming information on unpaid amounts secured by other liens. 92.13 The application must state that program participation is 92.14 voluntary. The application must also state that the deferred 92.15 amount depends directly on the applicant's household income, and 92.16 that program participation includes authorization for the 92.17 deferred amount for each year and the cumulative deferral, 92.18 penalty, and interest to appear on each year's property tax 92.19 statement as public data. 92.20 As a part of the initial application process, the 92.21 commissioner may require the applicant to submit: 92.22 (1) if the property is registered property under chapter 92.23 508 or 508A, a copy of the original certificate of title in the 92.24 possession of the county registrar of titles, certified by the 92.25 registrar of titles or a deputy. A copy of the owner's 92.26 duplicate certificate of title is not acceptable; and 92.27 (2) if the property is abstract property, a copy of the 92.28 tract index for the property in the office of the county 92.29 recorder, certified by the county recorder or a deputy. 92.30 The certified copies under clauses (1) and (2) need not 92.31 include references to any documents filed or recorded more than 92.32 30 years prior to the certification date, if the certification 92.33 so states. The certification date must not be more than 30 days 92.34 prior to submission of the application. The county registrar of 92.35 titles and county recorder may charge the fees they usually 92.36 charge for certified copies. If the property is abstract 93.1 property, the commissioner may also require the applicant to 93.2 submit a copy of a credit report prepared by a credit reporting 93.3 agency acceptable to the commissioner, or other document 93.4 acceptable to the commissioner, listing all unsatisfied court 93.5 judgments against the applicant, or stating that there are none. 93.6 The commissioner may use any information available to 93.7 determine or verify eligibility under this section. 93.8 Sec. 3. Minnesota Statutes 1997 Supplement, section 93.9 290B.04, subdivision 3, is amended to read: 93.10 Subd. 3. [ANNUALEXCESS-INCOME CERTIFICATION BY TAXPAYER.] 93.11Annually on or before July 1,A taxpayer whose initial 93.12 application has been approved under subdivision 2,93.13 shallcomplete the certification form and return it tonotify 93.14 the commissioner of revenue in writing by July 1 if the 93.15 taxpayer's household income for the preceding calendar year 93.16 exceeded $40,000. The certification must statewhether or not93.17the taxpayer wishes to have property taxes deferred for the93.18following year provided the taxes exceed the maximum property93.19tax amount under section 290B.05. If the taxpayer does wish to93.20have property taxes deferred, the certification must statethe 93.21 homeowner's total household income for the previous calendar 93.22 yearand any other information which the commissioner deems93.23necessary. No property taxes may be deferred under chapter 290B 93.24 in any year following the year in which a program participant 93.25 filed or should have filed an excess-income certification under 93.26 this subdivision, unless the participant has filed a resumption 93.27 of eligibility certification as described in subdivision 4. The 93.28 commissioner of revenue may use any information available to the 93.29 commissioner to determine or verify ineligibility under this 93.30 subdivision. 93.31 Sec. 4. Minnesota Statutes 1997 Supplement, section 93.32 290B.04, is amended by adding a subdivision to read: 93.33 Subd. 4. [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 93.34 TAXPAYER.] A taxpayer who has previously filed an excess-income 93.35 certification under subdivision 3 may resume program 93.36 participation if the taxpayer's household income for a 94.1 subsequent year is less than $40,000. If the taxpayer chooses 94.2 to resume program participation, the taxpayer must notify the 94.3 commissioner of revenue in writing by July 1 of the year 94.4 following a calendar year in which the taxpayer's household 94.5 income is $40,000 or less. The certification must state the 94.6 taxpayer's total household income for the previous calendar 94.7 year. Once a taxpayer resumes participation in the program 94.8 under this subdivision, participation will continue until the 94.9 taxpayer files a subsequent excess-income certification under 94.10 subdivision 3 or until participation is terminated under section 94.11 290B.08, subdivision 1. 94.12 Sec. 5. Minnesota Statutes 1997 Supplement, section 94.13 290B.04, is amended by adding a subdivision to read: 94.14 Subd. 5. [PENALTY FOR FAILURE TO FILE EXCESS-INCOME 94.15 CERTIFICATION.] A participant who fails to file an excess-income 94.16 certification as required in subdivision 3 is subject to a 94.17 penalty equal to ten percent of the amount deferred in the year 94.18 following the year in which the participant failed to file the 94.19 form. The penalty is added to the cumulative deferral and is 94.20 subject to interest at the same rate. 94.21 Sec. 6. Minnesota Statutes 1997 Supplement, section 94.22 290B.05, subdivision 1, is amended to read: 94.23 Subdivision 1. [DETERMINATION BY COMMISSIONER.] The 94.24 commissioner shall determine each qualifying homeowner's "annual 94.25 maximum property tax amount" following approval of the 94.26 homeowner's initial application. The "annual maximum property 94.27 tax amount" equals five percent of the homeowner's total 94.28 household income for the year preceding the initial 94.29 application. The commissioner shall annually determine the 94.30 qualifying homeowner's"maximum property tax amount"94.31and"maximum allowable deferral."The maximum property tax94.32amount calculated for taxes payable in the following year is94.33equal to five percent of the homeowner's total household income94.34for the previous calendar year.No tax may be deferred for any 94.35 homeowner whose total household income for the previous year 94.36 exceeds$30,000$40,000. No tax shall be deferred in any year 95.1 in which the homeowner does not meet the program qualifications 95.2 in section 290B.03. The maximum allowable total deferral is 95.3 equal to 75 percent of the assessor's estimated market value for 95.4 the year, less (1) the balance of any mortgage loans and other 95.5 amounts secured by liens against the property at the time of 95.6 application, including any unpaid special assessments but not 95.7 including property taxes payable during the year; and (2) any 95.8 outstanding deferral, penalty, and interest. 95.9 Sec. 7. Minnesota Statutes 1997 Supplement, section 95.10 290B.05, subdivision 2, is amended to read: 95.11 Subd. 2. [CERTIFICATION BY COMMISSIONER.] On or before 95.12 December 1, the commissioner shall certify to the county auditor 95.13 of the county in which the qualifying homestead is located (1) 95.14 the maximum property tax amount; (2) the maximum allowable 95.15 deferral for the year; and (3) the cumulative deferral, penalty, 95.16 and interest for all years preceding the next taxes payable year. 95.17 Sec. 8. Minnesota Statutes 1997 Supplement, section 95.18 290B.05, subdivision 4, is amended to read: 95.19 Subd. 4. [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 95.20 On or before September 1 of each year, the commissioner shall 95.21 request, and each county or city assessor shall provide, the 95.22 current year's estimated market value of each property on the 95.23 list supplied by the commissioner that may be eligible for 95.24 deferral under this section for taxes payable in the following 95.25 year. The total amount of deferred taxes, penalty, and interest 95.26 on a property, when added to (1) the balance owing on any 95.27 mortgages on the property at the time of initial application; 95.28 and (2) other amounts secured by liens on the property at the 95.29 time of the initial application, may not exceed 75 percent of 95.30 the assessor's current estimated market value of the property. 95.31 Sec. 9. Minnesota Statutes 1997 Supplement, section 95.32 290B.06, is amended to read: 95.33 290B.06 [PROPERTY TAX REFUNDS.] 95.34 For purposes of qualifying for the regular property tax 95.35 refund or the special refund for homeowners under chapter 290A, 95.36 the qualifying tax is the full amount of taxes, including the 96.1 deferred portion of the tax. In any year in whicha program96.2participant chooses to haveproperty taxes are deferred under 96.3 this section, any regular or special property tax refund awarded 96.4 based upon those property taxes must be taken first as a 96.5 deduction from the amount of the deferred tax for that year, and 96.6 second as a deduction against any outstanding deferral from 96.7 previous years, rather than as a cash payment to the homeowner. 96.8 The commissioner shall cancel any current year's deferral or 96.9 previous years' deferral, penalty, and interest that is offset 96.10 by the property tax refunds. If the total of the regular and 96.11 the special property tax refund amounts exceeds the sum of the 96.12 deferred tax for the current year and cumulative deferred tax, 96.13 penalty, and interest for previous years, the commissioner shall 96.14 then remit the excess amount to the homeowner. On or before the 96.15 date on which the commissioner issues property tax refunds, the 96.16 commissioner shall notify program participants of any reduction 96.17 in the deferred amount for the current and previous years 96.18 resulting from property tax refunds. 96.19 Sec. 10. Minnesota Statutes 1997 Supplement, section 96.20 290B.07, is amended to read: 96.21 290B.07 [LIEN; DEFERRED PORTION.] 96.22 Payment by the state to the county treasurer of taxes 96.23 deferred under this section is deemed a loan from the state to 96.24 the program participant. The commissioner must compute the 96.25 interest as provided in section 270.75, subdivision 5, but not 96.26 to exceed five percent, and maintain records of the total 96.27 deferred amount, penalty, and interest for each participant. 96.28 Interest shall accrue beginning September 1 of the payable year 96.29 for which the taxes are deferred. Any deferral made under this 96.30 chapter shall not be construed as delinquent property taxes. 96.31 The lien created under section 272.31 continues to secure 96.32 payment by the taxpayer, or by the taxpayer's successors or 96.33 assigns, of the amount deferred, including penalty and interest, 96.34 with respect to all years for which amounts are deferred. The 96.35 lien for deferred taxes, penalty, and interest has the same 96.36 priority as any other lien under section 272.31, except that 97.1 liens, including mortgages, recorded or filed prior to the 97.2 recording or filing of the notice under section 290B.04, 97.3 subdivision 2, have priority over the lien for deferred taxes, 97.4 penalty, and interest. A seller's interest in a contract for 97.5 deed, in which a qualifying homeowner is the purchaser or an 97.6 assignee of the purchaser, has priority over deferred taxes, 97.7 penalty, and interest on deferred taxes, regardless of whether 97.8 the contract for deed is recorded or filed. The lien for 97.9 deferred taxes, penalty, and interest for future years has the 97.10 same priority as the lien for deferred taxes, penalty, and 97.11 interest for the first year, which is always higher in priority 97.12 than any mortgages or other liens filed, recorded, or created 97.13 after the notice recorded or filed under section 290B.04, 97.14 subdivision 2. The county treasurer or auditor shall maintain 97.15 records of the deferred portion and shall list the amount of 97.16 deferred taxes for the year and the cumulative deferral, 97.17 penalty, and interest for all previous years as a lien against 97.18 the property on the property tax statement. In any 97.19 certification of unpaid taxes for a tax parcel, the county 97.20 auditor shall clearly distinguish between taxes payable in the 97.21 current year, deferred taxes, penalty, and interest, and 97.22 delinquent taxes. Payment of the deferred portion becomes due 97.23 and owing at the time specified in section 290B.08. Upon 97.24 receipt of the payment, the commissioner shall issue a receipt 97.25 for it to the person making the payment upon request and shall 97.26 notify the auditor of the county in which the parcel is located, 97.27 within ten days, identifying the parcel to which the payment 97.28 applies. Upon receipt by the commissioner of revenue of 97.29 collected funds in the amount of the deferral, the state's loan 97.30 to the program participant is deemed paid in full. 97.31 Sec. 11. Minnesota Statutes 1997 Supplement, section 97.32 290B.08, subdivision 2, is amended to read: 97.33 Subd. 2. [PAYMENT UPON TERMINATION.] Upon the termination 97.34 of the deferral under subdivision 1, the amount of deferred 97.35 taxes, penalty, and interest plus the recording or filing fees 97.36 under both section 290B.04, subdivision 2, and this subdivision 98.1 becomes due and payable to the commissioner within 90 days of 98.2 termination of the deferral for terminations under subdivision 98.3 1, paragraph (a), clauses (1) and (2), and within one year of 98.4 termination of the deferral for terminations under subdivision 98.5 1, paragraph (a), clauses (3) and (4). No additional interest 98.6 is due on the deferral or penalty if timely paid. On receipt of 98.7 payment, the commissioner shall within ten days notify the 98.8 auditor of the county in which the parcel is located, 98.9 identifying the parcel to which the payment applies and shall 98.10 remit the recording or filing fees under section 290B.04, 98.11 subdivision 2, and this subdivision to the auditor. A notice of 98.12 termination of deferral, containing the legal description and 98.13 the recording or filing data for the notice of qualification for 98.14 deferral under section 290B.04, subdivision 2, shall be prepared 98.15 and recorded or filed by the county auditor in the same office 98.16 in which the notice of qualification for deferral under section 98.17 290B.04, subdivision 2, was recorded or filed, and the county 98.18 auditor shall mail a copy of the notice of termination to the 98.19 property owner. The property owner shall pay the recording or 98.20 filing fees. Upon recording or filing of the notice of 98.21 termination of deferral, the notice of qualification for 98.22 deferral under section 290B.04, subdivision 2, and the lien 98.23 created by it are discharged. If the deferral is not timely 98.24 paid, the penalty, interest, lien, forfeiture, and other rules 98.25 for the collection of ad valorem property taxes apply. 98.26 Sec. 12. Minnesota Statutes 1997 Supplement, section 98.27 290B.09, subdivision 1, is amended to read: 98.28 Subdivision 1. [DETERMINATION; PAYMENT.] The commissioner 98.29 of revenue shall determine the deferred amount of property tax 98.30 in each county, basing determinations on a review of abstracts 98.31 of tax lists submitted by the county auditors under section 98.32 275.29. The commissioner may make changes in the abstracts of 98.33 tax lists as deemed necessary. The commissioner of revenue, 98.34 after such review, shall pay the deferred amount of property tax 98.35 to each county treasurer on or before August 31. 98.36 At least once each year, the commissioner shall report to 99.1 the county auditor the total cumulative amount of deferred 99.2 taxes, penalty, and interest that constitute a lien against the 99.3 property. 99.4 The county treasurer shall distribute as part of the 99.5 October settlement the funds received as if they had been 99.6 collected as a part of the property tax. 99.7 Sec. 13. [EFFECTIVE DATE.] 99.8 Sections 1 to 12 are effective for deferrals of property 99.9 taxes payable in 1999 and thereafter. 99.10 ARTICLE 5 99.11 INCOME AND FRANCHISE TAXES 99.12 Section 1. Minnesota Statutes 1996, section 289A.08, 99.13 subdivision 13, is amended to read: 99.14 Subd. 13. [RETURN REQUIREMENTS; LONG AND SHORT FORMS.] (a) 99.15 The commissioner shall provide a long form individual income tax 99.16 return and may provide a short form individual income tax 99.17 return. The returns shall be in a form that is consistent with 99.18 the provisions of chapter 290, notwithstanding any other law to 99.19 the contrary. The nongame wildlife checkoff provided in section 99.20 290.431 and the dependent care credit provided in section 99.21 290.067 must be included on the short form. 99.22 (b) The commissioner shall provide on both the long form 99.23 and short form individual income tax returns a line allowing the 99.24 taxpayer to report use tax liability for the previous calendar 99.25 year as provided in section 289A.11, subdivision 1. 99.26 Sec. 2. Minnesota Statutes 1997 Supplement, section 99.27 289A.11, subdivision 1, is amended to read: 99.28 Subdivision 1. [RETURN REQUIRED.] Except as provided in 99.29 section 289A.18, subdivision 4, for the month in which taxes 99.30 imposed by chapter 297A are payable, or for which a return is 99.31 due, a return for the preceding reporting period must be filed 99.32 with the commissioner in the form and manner the commissioner 99.33 prescribes. A person making sales at retail at two or more 99.34 places of business may file a consolidated return subject to 99.35 rules prescribed by the commissioner. In computing the dollar 99.36 amount of items on the return, the amounts are rounded off to 100.1 the nearest whole dollar, disregarding amounts less than 50 100.2 cents and increasing amounts of 50 cents to 99 cents to the next 100.3 highest dollar. 100.4 Notwithstanding this subdivision, a person who is not 100.5 required to hold a sales tax permit under chapter 297A and who 100.6 makes annual purchases of less than $18,500 that are subject to 100.7 the use tax imposed by section 297A.14, may file an annual use 100.8 tax return on a form prescribed by the commissioner. If a 100.9 person who qualifies for an annual use tax reporting period is 100.10 required to obtain a sales tax permit or makes use tax purchases 100.11 in excess of $18,500 during the calendar year, the reporting 100.12 period must be considered ended at the end of the month in which 100.13 the permit is applied for or the purchase in excess of $18,500 100.14 is made and a return must be filed for the preceding reporting 100.15 period. 100.16 Notwithstanding this subdivision, a taxpayer eligible to 100.17 file an annual use tax return under this subdivision may file 100.18 the return and pay the tax liability under section 297A.14 with 100.19 the income tax return, provided that the tax must be paid by 100.20 April 15 following the close of the taxable year. 100.21 Sec. 3. Minnesota Statutes 1997 Supplement, section 100.22 289A.19, subdivision 2, is amended to read: 100.23 Subd. 2. [CORPORATE FRANCHISE AND MINING COMPANY TAXES.] 100.24 Corporations or mining companies shall receive an extension of 100.25 seven months for filing the return of a corporation subject to 100.26 tax under chapter 290 or for filing the return of a mining 100.27 company subject to tax under sections 298.01 and 298.015if:. 100.28 Interest on any balance of tax not paid when the regularly 100.29 required return is due must be paid at the rate specified in 100.30 section 270.75, from the date such payment should have been made 100.31 if no extension was granted, until the date of payment of such 100.32 tax. 100.33 If a corporation or mining company does not: 100.34 (1)the corporation or mining company payspay at least 90 100.35 percent of the amount of tax shown on the return on or before 100.36 the regular due date of the return, the penalty prescribed by 101.1 section 289A.60, subdivision 1, shall be imposed on the unpaid 101.2 balance of tax; or 101.3 (2) pay the balance due shown on the regularly required 101.4 returnis paidon or before the extended due date of the return;101.5and101.6(3) interest on any balance due is paid at the rate101.7specified in section 270.75 from the regular due date of the101.8return until the tax is paid, the penalty prescribed by section 101.9 289A.60, subdivision 1, shall be imposed on the unpaid balance 101.10 of tax from the original due date of the return. 101.11 Sec. 4. Minnesota Statutes 1997 Supplement, section 101.12 290.01, subdivision 19a, is amended to read: 101.13 Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 101.14 individuals, estates, and trusts, there shall be added to 101.15 federal taxable income: 101.16 (1)(i) interest income on obligations of any state other 101.17 than Minnesota or a political or governmental subdivision, 101.18 municipality, or governmental agency or instrumentality of any 101.19 state other than Minnesota exempt from federal income taxes 101.20 under the Internal Revenue Code or any other federal statute, 101.21 and 101.22 (ii) exempt-interest dividends as defined in section 101.23 852(b)(5) of the Internal Revenue Code, except the portion of 101.24 the exempt-interest dividends derived from interest income on 101.25 obligations of the state of Minnesota or its political or 101.26 governmental subdivisions, municipalities, governmental agencies 101.27 or instrumentalities, but only if the portion of the 101.28 exempt-interest dividends from such Minnesota sources paid to 101.29 all shareholders represents 95 percent or more of the 101.30 exempt-interest dividends that are paid by the regulated 101.31 investment company as defined in section 851(a) of the Internal 101.32 Revenue Code, or the fund of the regulated investment company as 101.33 defined in section 851(h) of the Internal Revenue Code, making 101.34 the payment; and 101.35 (iii) for the purposes of items (i) and (ii), interest on 101.36 obligations of an Indian tribal government described in section 102.1 7871(c) of the Internal Revenue Code shall be treated as 102.2 interest income on obligations of the state in which the tribe 102.3 is located; 102.4 (2) the amount of income taxes paid or accrued within the 102.5 taxable year under this chapter and income taxes paid to any 102.6 other state or to any province or territory of Canada, to the 102.7 extent allowed as a deduction under section 63(d) of the 102.8 Internal Revenue Code, but the addition may not be more than the 102.9 amount by which the itemized deductions as allowed under section 102.10 63(d) of the Internal Revenue Code exceeds the amount of the 102.11 standard deduction as defined in section 63(c) of the Internal 102.12 Revenue Code. For the purpose of this paragraph, the 102.13 disallowance of itemized deductions under section 68 of the 102.14 Internal Revenue Code of 1986, income tax is the last itemized 102.15 deduction disallowed; 102.16 (3) the capital gain amount of a lump sum distribution to 102.17 which the special tax under section 1122(h)(3)(B)(ii) of the Tax 102.18 Reform Act of 1986, Public Law Number 99-514, applies; 102.19 (4) the amount of income taxes paid or accrued within the 102.20 taxable year under this chapter and income taxes paid to any 102.21 other state or any province or territory of Canada, to the 102.22 extent allowed as a deduction in determining federal adjusted 102.23 gross income. For the purpose of this paragraph, income taxes 102.24 do not include the taxes imposed by sections 290.0922, 102.25 subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 102.26 (5) the amount of loss or expense included in federal 102.27 taxable income under section 1366 of the Internal Revenue Code 102.28 flowing from a corporation that has a valid election in effect 102.29 for the taxable year under section 1362 of the Internal Revenue 102.30 Code, but which is not allowed to be an "S" corporation under 102.31 section 290.9725;and102.32 (6) the amount of any distributions in cash or property 102.33 made to a shareholder during the taxable year by a corporation 102.34 that has a valid election in effect for the taxable year under 102.35 section 1362 of the Internal Revenue Code, but which is not 102.36 allowed to be an "S" corporation under section 290.9725 to the 103.1 extent not already included in federal taxable income under 103.2 section 1368 of the Internal Revenue Code.; 103.3 (7) in the year stock of a corporation that had made a 103.4 valid election under section 1362 of the Internal Revenue Code 103.5 but was not an "S" corporation under section 290.9725 is sold or 103.6 disposed of in a transaction taxable under the Internal Revenue 103.7 Code, the amount of difference between the Minnesota basis of 103.8 the stock under subdivision 19f, paragraph (m), and the federal 103.9 basis if the Minnesota basis is lower than the shareholder's 103.10 federal basis; and 103.11 (8) the amount of expense, interest, or taxes disallowed 103.12 pursuant to section 290.10. 103.13 Sec. 5. Minnesota Statutes 1997 Supplement, section 103.14 290.01, subdivision 19b, is amended to read: 103.15 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 103.16 individuals, estates, and trusts, there shall be subtracted from 103.17 federal taxable income: 103.18 (1) interest income on obligations of any authority, 103.19 commission, or instrumentality of the United States to the 103.20 extent includable in taxable income for federal income tax 103.21 purposes but exempt from state income tax under the laws of the 103.22 United States; 103.23 (2) if included in federal taxable income, the amount of 103.24 any overpayment of income tax to Minnesota or to any other 103.25 state, for any previous taxable year, whether the amount is 103.26 received as a refund or as a credit to another taxable year's 103.27 income tax liability; 103.28 (3) the amount paid to others, less the credit allowed 103.29 under section 290.0674, not to exceed $1,625 for each dependent 103.30 in grades kindergarten to 6 and $2,500 for each dependent in 103.31 grades 7 to 12, for tuition, textbooks, and transportation of 103.32 each dependent in attending an elementary or secondary school 103.33 situated in Minnesota, North Dakota, South Dakota, Iowa, or 103.34 Wisconsin, wherein a resident of this state may legally fulfill 103.35 the state's compulsory attendance laws, which is not operated 103.36 for profit, and which adheres to the provisions of the Civil 104.1 Rights Act of 1964 and chapter 363. For the purposes of this 104.2 clause, "tuition" includes fees or tuition as defined in section 104.3 290.0674, subdivision 1, clause (1). As used in this clause, 104.4 "textbooks" includes books and other instructional materials and 104.5 equipment used in elementary and secondary schools in teaching 104.6 only those subjects legally and commonly taught in public 104.7 elementary and secondary schools in this state. Equipment 104.8 expenses qualifying for deduction includes expenses as defined 104.9 and limited in section 290.0674, subdivision 1, clause (3). 104.10 "Textbooks" does not include instructional books and materials 104.11 used in the teaching of religious tenets, doctrines, or worship, 104.12 the purpose of which is to instill such tenets, doctrines, or 104.13 worship, nor does it include books or materials for, or 104.14 transportation to, extracurricular activities including sporting 104.15 events, musical or dramatic events, speech activities, driver's 104.16 education, or similar programs; 104.17 (4) to the extent included in federal taxable income, 104.18 distributions from a qualified governmental pension plan, an 104.19 individual retirement account, simplified employee pension, or 104.20 qualified plan covering a self-employed person that represent a 104.21 return of contributions that were included in Minnesota gross 104.22 income in the taxable year for which the contributions were made 104.23 but were deducted or were not included in the computation of 104.24 federal adjusted gross income. The distribution shall be 104.25 allocated first to return of contributions until the 104.26 contributions included in Minnesota gross income have been 104.27 exhausted. This subtraction applies only to contributions made 104.28 in a taxable year prior to 1985; 104.29 (5) income as provided under section 290.0802; 104.30 (6) the amount of unrecovered accelerated cost recovery 104.31 system deductions allowed under subdivision 19g; 104.32 (7) to the extent included in federal adjusted gross 104.33 income, income realized on disposition of property exempt from 104.34 tax under section 290.491; 104.35 (8) to the extent not deducted in determining federal 104.36 taxable income, the amount paid for health insurance of 105.1 self-employed individuals as determined under section 162(l) of 105.2 the Internal Revenue Code, except that the 25 percent limit does 105.3 not apply. If the taxpayer deducted insurance payments under 105.4 section 213 of the Internal Revenue Code of 1986, the 105.5 subtraction under this clause must be reduced by the lesser of: 105.6 (i) the total itemized deductions allowed under section 105.7 63(d) of the Internal Revenue Code, less state, local, and 105.8 foreign income taxes deductible under section 164 of the 105.9 Internal Revenue Code and the standard deduction under section 105.10 63(c) of the Internal Revenue Code; or 105.11 (ii) the lesser of (A) the amount of insurance qualifying 105.12 as "medical care" under section 213(d) of the Internal Revenue 105.13 Code to the extent not deducted under section 162(1) of the 105.14 Internal Revenue Code or excluded from income or (B) the total 105.15 amount deductible for medical care under section 213(a); 105.16 (9) the exemption amount allowed under Laws 1995, chapter 105.17 255, article 3, section 2, subdivision 3; 105.18 (10) to the extent included in federal taxable income, 105.19 postservice benefits for youth community service under section 105.20 121.707 for volunteer service under United States Code, title 105.21 42, section 5011(d), as amended;and105.22 (11) to the extent not subtracted under clause (1), the 105.23 amount of income or gain included in federal taxable income 105.24 under section 1366 of the Internal Revenue Code flowing from a 105.25 corporation that has a valid election in effect for the taxable 105.26 year under section 1362 of the Internal Revenue Code which is 105.27 not allowed to be an "S" corporation under section 290.9725.; 105.28 (12) in the year stock of a corporation that had made a 105.29 valid election under section 1362 of the Internal Revenue Code 105.30 but was not an "S" corporation under section 290.9725 is sold or 105.31 disposed of in a transaction taxable under the Internal Revenue 105.32 Code, the amount of difference between the Minnesota basis of 105.33 the stock under subdivision 19f, paragraph (m), and the federal 105.34 basis if the Minnesota basis is higher than the shareholder's 105.35 federal basis; 105.36 (13) an amount equal to an individual's, trust's, or 106.1 estate's net federal income tax liability for the tax year that 106.2 is attributable to items of income, expense, gain, loss, or 106.3 credits federally flowing to the taxpayer in the tax year from a 106.4 corporation, having a valid election in effect for federal tax 106.5 purposes under section 1362 of the Internal Revenue Code but not 106.6 treated as a "S" corporation for state tax purposes under 106.7 section 290.9725; and 106.8 (14) to the extent not deducted in determining federal 106.9 taxable income by a taxpayer or married couple filing a joint 106.10 return who does not itemize deductions for federal income tax 106.11 purposes for the taxable year, an amount equal to 50 percent of 106.12 the excess of charitable contributions allowable as a deduction 106.13 for the taxable year under section 170(a) of the Internal 106.14 Revenue Code over $500. 106.15 Sec. 6. Minnesota Statutes 1997 Supplement, section 106.16 290.01, subdivision 19f, is amended to read: 106.17 Subd. 19f. [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 106.18 DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 106.19 trusts, the basis of property is its adjusted basis for federal 106.20 income tax purposes except as set forth in paragraphs (f), (g), 106.21 and (m). For corporations, the basis of property is its 106.22 adjusted basis for federal income tax purposes, without regard 106.23 to the time when the property became subject to tax under this 106.24 chapter or to whether out-of-state losses or items of tax 106.25 preference with respect to the property were not deductible 106.26 under this chapter, except that the modifications to the basis 106.27 for federal income tax purposes set forth in paragraphs (b) to 106.28 (j) are allowed to corporations, and the resulting modifications 106.29 to federal taxable income must be made in the year in which gain 106.30 or loss on the sale or other disposition of property is 106.31 recognized. 106.32 (b) The basis of property shall not be reduced to reflect 106.33 federal investment tax credit. 106.34 (c) The basis of property subject to the accelerated cost 106.35 recovery system under section 168 of the Internal Revenue Code 106.36 shall be modified to reflect the modifications in depreciation 107.1 with respect to the property provided for in subdivision 19e. 107.2 For certified pollution control facilities for which 107.3 amortization deductions were elected under section 169 of the 107.4 Internal Revenue Code of 1954, the basis of the property must be 107.5 increased by the amount of the amortization deduction not 107.6 previously allowed under this chapter. 107.7 (d) For property acquired before January 1, 1933, the basis 107.8 for computing a gain is the fair market value of the property as 107.9 of that date. The basis for determining a loss is the cost of 107.10 the property to the taxpayer less any depreciation, 107.11 amortization, or depletion, actually sustained before that 107.12 date. If the adjusted cost exceeds the fair market value of the 107.13 property, then the basis is the adjusted cost regardless of 107.14 whether there is a gain or loss. 107.15 (e) The basis is reduced by the allowance for amortization 107.16 of bond premium if an election to amortize was made pursuant to 107.17 Minnesota Statutes 1986, section 290.09, subdivision 13, and the 107.18 allowance could have been deducted by the taxpayer under this 107.19 chapter during the period of the taxpayer's ownership of the 107.20 property. 107.21 (f) For assets placed in service before January 1, 1987, 107.22 corporations, partnerships, or individuals engaged in the 107.23 business of mining ores other than iron ore or taconite 107.24 concentrates subject to the occupation tax under chapter 298 107.25 must use the occupation tax basis of property used in that 107.26 business. 107.27 (g) For assets placed in service before January 1, 1990, 107.28 corporations, partnerships, or individuals engaged in the 107.29 business of mining iron ore or taconite concentrates subject to 107.30 the occupation tax under chapter 298 must use the occupation tax 107.31 basis of property used in that business. 107.32 (h) In applying the provisions of sections 301(c)(3)(B), 107.33 312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 107.34 dates December 31, 1932, and January 1, 1933, shall be 107.35 substituted for February 28, 1913, and March 1, 1913, 107.36 respectively. 108.1 (i) In applying the provisions of section 362(a) and (c) of 108.2 the Internal Revenue Code, the date December 31, 1956, shall be 108.3 substituted for June 22, 1954. 108.4 (j) The basis of property shall be increased by the amount 108.5 of intangible drilling costs not previously allowed due to 108.6 differences between this chapter and the Internal Revenue Code. 108.7 (k) The adjusted basis of any corporate partner's interest 108.8 in a partnership is the same as the adjusted basis for federal 108.9 income tax purposes modified as required to reflect the basis 108.10 modifications set forth in paragraphs (b) to (j). The adjusted 108.11 basis of a partnership in which the partner is an individual, 108.12 estate, or trust is the same as the adjusted basis for federal 108.13 income tax purposes modified as required to reflect the basis 108.14 modifications set forth in paragraphs (f) and (g). 108.15 (l) The modifications contained in paragraphs (b) to (j) 108.16 also apply to the basis of property that is determined by 108.17 reference to the basis of the same property in the hands of a 108.18 different taxpayer or by reference to the basis of different 108.19 property. 108.20 (m) If a corporation has a valid election in effect for the 108.21 taxable year under section 1362 of the Internal Revenue Code, 108.22 but is not allowed to be an "S" corporation under section 108.23 290.9725, and the corporation is liquidated or the individual 108.24 shareholder disposes of the stockand there is no capital loss108.25reflected in federal adjusted gross income because of the fact108.26that corporate losses have exhausted the shareholders' basis for108.27federal purposes, the shareholders shall be entitled to a108.28capital loss commensurate to their Minnesota basis for the108.29stock, the Minnesota basis in the shareholder's stock in the 108.30 corporation shall be computed as if the corporation were not an 108.31 "S" corporation for federal tax purposes. 108.32 Sec. 7. Minnesota Statutes 1996, section 290.06, 108.33 subdivision 2c, is amended to read: 108.34 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 108.35 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 108.36 married individuals filing joint returns and surviving spouses 109.1 as defined in section 2(a) of the Internal Revenue Code must be 109.2 computed by applying to their taxable net income the following 109.3 schedule of rates: 109.4 (1) On the first $19,910, 6 percent; 109.5 (2) On all over $19,910, but not over $79,120, 8 percent; 109.6 (3) On all over $79,120, 8.5 percent. 109.7 Married individuals filing separate returns, estates, and 109.8 trusts must compute their income tax by applying the above rates 109.9 to their taxable income, except that the income brackets will be 109.10 one-half of the above amounts. 109.11 (b) The income taxes imposed by this chapter upon unmarried 109.12 individuals must be computed by applying to taxable net income 109.13 the following schedule of rates: 109.14 (1) On the first $13,620, 6 percent; 109.15 (2) On all over $13,620, but not over $44,750, 8 percent; 109.16 (3) On all over $44,750, 8.5 percent. 109.17 (c) The income taxes imposed by this chapter upon unmarried 109.18 individuals qualifying as a head of household as defined in 109.19 section 2(b) of the Internal Revenue Code must be computed by 109.20 applying to taxable net income the following schedule of rates: 109.21 (1) On the first $16,770, 6 percent; 109.22 (2) On all over $16,770, but not over $67,390, 8 percent; 109.23 (3) On all over $67,390, 8.5 percent. 109.24 (d) In lieu of a tax computed according to the rates set 109.25 forth in this subdivision, the tax of any individual taxpayer 109.26 whose taxable net income for the taxable year is less than an 109.27 amount determined by the commissioner must be computed in 109.28 accordance with tables prepared and issued by the commissioner 109.29 of revenue based on income brackets of not more than $100. The 109.30 amount of tax for each bracket shall be computed at the rates 109.31 set forth in this subdivision, provided that the commissioner 109.32 may disregard a fractional part of a dollar unless it amounts to 109.33 50 cents or more, in which case it may be increased to $1. 109.34 (e) An individual who is not a Minnesota resident for the 109.35 entire year must compute the individual's Minnesota income tax 109.36 as provided in this subdivision. After the application of the 110.1 nonrefundable credits provided in this chapter, the tax 110.2 liability must then be multiplied by a fraction in which: 110.3 (1) The numerator is the individual's Minnesota source 110.4 federal adjusted gross income as defined in section 62 of the 110.5 Internal Revenue Code disregarding income or loss flowing from a 110.6 corporation having a valid election for the taxable year under 110.7 section 1362 of the Internal Revenue Code but which is not an 110.8 "S" corporation under section 290.9725 and increased by the 110.9 addition required for interest income from non-Minnesota state 110.10 and municipal bonds under section 290.01, subdivision 19a, 110.11 clause (1), after applying the allocation and assignability 110.12 provisions of section 290.081, clause (a), or 290.17; and 110.13 (2) the denominator is the individual's federal adjusted 110.14 gross income as defined in section 62 of the Internal Revenue 110.15 Code of 1986, as amended through April 15, 1995,increased by 110.16 theaddition required for interest income from non-Minnesota110.17state and municipal bonds under section 290.01, subdivision 19a,110.18clause (1)amounts specified in section 290.01, subdivision 19a, 110.19 clauses (1), (5), (6), and (7), and reduced by the amounts 110.20 specified in section 290.01, subdivision 19b, clauses (1), (11), 110.21 and (12). 110.22 Sec. 8. Minnesota Statutes 1996, section 290.067, 110.23 subdivision 2, is amended to read: 110.24 Subd. 2. [LIMITATIONS.] The credit for expenses incurred 110.25 for the care of each dependent shall not exceed $720 in any 110.26 taxable year, and the total credit for all dependents of a 110.27 claimant shall not exceed $1,440 in a taxable year. The maximum 110.28 total credit shall be reduced according to the amount of the 110.29 income of the claimant and a spouse, if any, as follows: 110.30 income up to$13,350$17,430, $720 maximum for one 110.31 dependent, $1,440 for all dependents; 110.32 income over$13,350$17,430, the maximum credit for one 110.33 dependent shall be reduced by$18$10 for every $350 of 110.34 additional income,$36$20 for all dependents for tax years 110.35 beginning after December 31, 1997, and before January 1, 1999, 110.36 and by $9 for every $350 of additional income, $18 for all 111.1 dependents, for tax years beginning after December 31, 1998. 111.2 The commissioner shall construct and make available to 111.3 taxpayers tables showing the amount of the credit at various 111.4 levels of income and expenses. The tables shall follow the 111.5 schedule contained in this subdivision, except that the 111.6 commissioner may graduate the transitions between expenses and 111.7 income brackets. 111.8 Sec. 9. Minnesota Statutes 1997 Supplement, section 111.9 290.0673, subdivision 2, is amended to read: 111.10 Subd. 2. [QUALIFIED JOB TRAINING PROGRAM.] (a) To qualify 111.11 for credits under this section, a job training program must 111.12 satisfy the following requirements: 111.13 (1) It must be operated by a nonprofit corporation that 111.14 qualifies under section 501(c)(3) of the Internal Revenue Code. 111.15 (2) The organization must spend at least $5,000 per 111.16 graduate of the program. 111.17 (3) The program must provide education and training in: 111.18 (i) basic skills, such as reading, writing, mathematics, 111.19 and communications; 111.20 (ii) thinking skills, such as reasoning, creative thinking, 111.21 decision making, and problem solving; and 111.22 (iii) personal qualities, such as responsibility, 111.23 self-esteem, self-management, honesty, and integrity. 111.24 (4) The program must provide income supplements, when 111.25 needed, to participants for housing, counseling, tuition, and 111.26 other basic needs. 111.27 (5) The education and training course must last for at 111.28 least six months. 111.29 (6) Individuals served by the program must: 111.30 (i) be 18 years old or older; 111.31 (ii) have had federal adjusted gross income of no more than 111.32$10,000$15,000 per year in the last two years; 111.33 (iii) have assets of no more than$5,000$7,000, excluding 111.34 the value of a homestead; and 111.35 (iv) not have been claimed as a dependent on the federal 111.36 tax return of another person in the previous taxable year. 112.1 (7) The program must charge placement and retention fees 112.2 that cumulatively exceed the amount of credit certificates 112.3 provided to the employer by at least 20 percent. 112.4 (b) The program must be certified by the commissioner of 112.5 children, families, and learning as meeting the requirements of 112.6 this subdivision. 112.7 Sec. 10. [290.0681] [CREDIT FOR EMPLOYER CONTRIBUTIONS FOR 112.8 EMPLOYEE HOUSING.] 112.9 Subdivision 1. [CREDIT ALLOWED.] Subject to the 112.10 limitations and conditions of this section, a taxpayer is 112.11 allowed a credit against the tax imposed by section 290.06, 112.12 subdivision 1 or 2c, in an amount equal to 50 percent of the 112.13 amount certified to the commissioner by the commissioner of the 112.14 housing finance agency as qualifying employer housing 112.15 contributions made by the taxpayer during the taxable year. 112.16 Subd. 2. [DEFINITION.] For the purpose of this section, a 112.17 "qualifying employer housing contribution" means a cash 112.18 contribution made by an employer (1) as capital for production 112.19 of affordable housing; (2) for direct down payment assistance 112.20 for employees; or (3) to a fund administered by a nonprofit 112.21 corporation or government agency and used as capital for 112.22 production of affordable housing or direct down payment 112.23 assistance. A contribution is a qualifying contribution only if 112.24 the commissioner of the housing finance agency determines that 112.25 its use is consistent with the requirements of section 112.26 42(m)(2)(A) of the Internal Revenue Code. 112.27 Subd. 3. [CREDIT ALLOCATION.] An employer must apply each 112.28 year to the commissioner of the housing finance agency for an 112.29 allocation of qualifying employer housing contribution tax 112.30 credits. The credit is at a rate of 50 percent of qualifying 112.31 employer housing contributions. A credit need not be allocated 112.32 for all of an employer's qualifying contributions. The 112.33 commissioner shall notify the commissioner of revenue regarding 112.34 the identity of each employer that has been allocated the tax 112.35 credits for the following calendar year, by September 1 of each 112.36 year. The commissioner of the housing finance agency shall give 113.1 priority to employers that collaborate and receive matching 113.2 funds from a nonprofit organization and projects which best 113.3 promote the economic vitality of the community or region they 113.4 are located in. 113.5 Subd. 4. [LIMITATIONS; CARRYOVER.] (a) The credit allowed 113.6 to any taxpayer under this section may not exceed $250,000 for 113.7 any taxable year. 113.8 (b) The credit for the taxable year shall not exceed the 113.9 tax imposed on the taxpayer for the taxable year under section 113.10 290.06, subdivision 1 or 2c, reduced by the sum of the 113.11 nonrefundable credits allowed under this chapter. 113.12 (c) If the amount of the credit determined under this 113.13 section for any taxable year exceeds the limitation under 113.14 paragraph (b), the excess shall be a credit carryover to each of 113.15 the five succeeding taxable years. The entire amount of the 113.16 excess unused credit for the taxable year shall be carried, 113.17 first to the earliest of the taxable years to which the credit 113.18 may be carried, and then to each successive year to which the 113.19 credit may be carried. The amount of the unused credit which 113.20 may be added under this paragraph shall not exceed the 113.21 taxpayer's liability for tax less any additional credit under 113.22 this section for the current taxable year. 113.23 (d) The total credit allocation allowed for all taxpayers 113.24 is limited to $10,000,000. The total credit remains available 113.25 until it is completely allocated or until December 31, 2003, 113.26 whichever occurs earlier. Unallocated credits carry over from 113.27 one year to the next. 113.28 Subd. 5. [CONTINGENT EFFECTIVE DATE; MATCH 113.29 REQUIREMENT.] Contingent on the agency receiving a commitment 113.30 for at least $10,000,000 from nonstate resources that would be 113.31 used in coordination with the agency's programs to secure 113.32 affordable housing for workers, this section is effective for 113.33 taxable years beginning after December 31, 1998. 113.34 Sec. 11. Minnesota Statutes 1996, section 290.091, 113.35 subdivision 2, is amended to read: 113.36 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 114.1 this section, the following terms have the meanings given: 114.2 (a) "Alternative minimum taxable income" means the sum of 114.3 the following for the taxable year: 114.4 (1) the taxpayer's federal alternative minimum taxable 114.5 income as defined in section 55(b)(2) of the Internal Revenue 114.6 Code; 114.7 (2) the taxpayer's itemized deductions allowed in computing 114.8 federal alternative minimum taxable income, but excluding: 114.9 (i) the Minnesota charitable contribution deductionand; 114.10 (ii) the medical expense deduction; 114.11 (iii) the casualty, theft, and disaster loss deduction; and 114.12 (iv) the impairment-related work expenses of a disabled 114.13 person; 114.14 (3) for depletion allowances computed under section 613A(c) 114.15 of the Internal Revenue Code, with respect to each property (as 114.16 defined in section 614 of the Internal Revenue Code), to the 114.17 extent not included in federal alternative minimum taxable 114.18 income, the excess of the deduction for depletion allowable 114.19 under section 611 of the Internal Revenue Code for the taxable 114.20 year over the adjusted basis of the property at the end of the 114.21 taxable year (determined without regard to the depletion 114.22 deduction for the taxable year); 114.23 (4) to the extent not included in federal alternative 114.24 minimum taxable income, the amount of the tax preference for 114.25 intangible drilling cost under section 57(a)(2) of the Internal 114.26 Revenue Code determined without regard to subparagraph (E); 114.27 (5) to the extent not included in federal alternative 114.28 minimum taxable income, the amount of interest income as 114.29 provided by section 290.01, subdivision 19a, clause (1); 114.30 (6) amounts added to federal taxable income as provided by 114.31 section 290.01, subdivision 19a, clauses (5), (6), and (7); 114.32 less the sum of the amounts determined under the following 114.33 clauses (1) to(3)(4): 114.34 (1) interest income as defined in section 290.01, 114.35 subdivision 19b, clause (1); 114.36 (2) an overpayment of state income tax as provided by 115.1 section 290.01, subdivision 19b, clause (2), to the extent 115.2 included in federal alternative minimum taxable income;and115.3 (3) the amount of investment interest paid or accrued 115.4 within the taxable year on indebtedness to the extent that the 115.5 amount does not exceed net investment income, as defined in 115.6 section 163(d)(4) of the Internal Revenue Code. Interest does 115.7 not include amounts deducted in computing federal adjusted gross 115.8 income; and 115.9 (4) amounts subtracted from federal taxable income as 115.10 provided by section 290.01, subdivision 19b, clauses (11) and 115.11 (12). 115.12 In the case of an estate or trust, alternative minimum 115.13 taxable income must be computed as provided in section 59(c) of 115.14 the Internal Revenue Code. 115.15 (b) "Investment interest" means investment interest as 115.16 defined in section 163(d)(3) of the Internal Revenue Code. 115.17 (c) "Tentative minimum tax" equals seven percent of 115.18 alternative minimum taxable income after subtracting the 115.19 exemption amount determined under subdivision 3. 115.20 (d) "Regular tax" means the tax that would be imposed under 115.21 this chapter (without regard to this section and section 115.22 290.032), reduced by the sum of the nonrefundable credits 115.23 allowed under this chapter. 115.24 (e) "Net minimum tax" means the minimum tax imposed by this 115.25 section. 115.26 (f) "Minnesota charitable contribution deduction" means a 115.27 charitable contribution deduction under section 170 of the 115.28 Internal Revenue Code to or for the use of an entity described 115.29 in section 290.21, subdivision 3, clauses (a) to (e). When the 115.30 federal deduction for charitable contributions is limited under 115.31 section 170(b) of the Internal Revenue Code, the allowable 115.32 contributions in the year of contribution are deemed to be first 115.33 contributions to entities described in section 290.21, 115.34 subdivision 3, clauses (a) to (e). 115.35 Sec. 12. Minnesota Statutes 1997 Supplement, section 115.36 290.091, subdivision 6, is amended to read: 116.1 Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 116.2 is allowed against the tax imposed by this chapter on 116.3 individuals, trusts, and estates equal to the minimum tax credit 116.4 for the taxable year. The minimum tax credit equals the 116.5 adjusted net minimum tax for taxable years beginning after 116.6 December 31, 1988, reduced by the minimum tax credits allowed in 116.7 a prior taxable year. The credit may not exceed the excess (if 116.8 any) for the taxable year of 116.9 (1) the regular tax, over 116.10 (2) the greater of (i) the tentative alternative minimum 116.11 tax, or (ii) zero. 116.12 (b) The adjusted net minimum tax for a taxable year equals 116.13 the lesser of the net minimum tax or the excess (if any) of 116.14 (1) the tentative minimum tax, over 116.15 (2) seven percent of the sum of 116.16 (i) adjusted gross income as defined in section 62 of the 116.17 Internal Revenue Code, 116.18 (ii) interest income as defined in section 290.01, 116.19 subdivision 19a, clause (1), 116.20 (iii) the amount added to federal taxable income as 116.21 provided by section 290.01, subdivision 19a, clauses (5), (6), 116.22 and (7), 116.23 (iv) the itemized deduction allowed for computing federal 116.24 alternative income under section 56(b) of the Internal Revenue 116.25 Code and not disallowed for Minnesota purposes under subdivision 116.26 2, paragraph (a), clause (2), of the first series of clauses, 116.27 (v) interest on specified private activity bonds, as 116.28 defined in section 57(a)(5) of the Internal Revenue Code, to the 116.29 extent not included under clause (ii), 116.30(iv)(vi) depletion as defined in section 57(a)(1), 116.31 determined without regard to the last sentence of paragraph (1), 116.32 of the Internal Revenue Code, less 116.33(v)(vii) the deductions allowed in computing alternative 116.34 minimum taxable income provided in subdivision 2, paragraph (a), 116.35 clause (2) of the first series of clauses and clauses (1), 116.36 (2),and(3), and (4) of the second series of clauses, and 117.1(vi)(viii) the exemption amount determined under 117.2 subdivision 3. 117.3 In the case of an individual who is not a Minnesota 117.4 resident for the entire year, adjusted net minimum tax must be 117.5 multiplied by the fraction defined in section 290.06, 117.6 subdivision 2c, paragraph (e). In the case of a trust or 117.7 estate, adjusted net minimum tax must be multiplied by the 117.8 fraction defined under subdivision 4, paragraph (b). 117.9 Sec. 13. Minnesota Statutes 1996, section 290.10, is 117.10 amended to read: 117.11 290.10 [NONDEDUCTIBLE ITEMS.] 117.12 Except as provided in section 290.17, subdivision 4, 117.13 paragraph (i), in computing the net income of acorporation117.14 taxpayer no deduction shall in any case be allowed for expenses, 117.15 interest and taxes connected with or allocable against the 117.16 production or receipt of all income not included in the measure 117.17 of the tax imposed by this chapter, except that for corporations 117.18 engaged in the business of mining or producing iron ore, the 117.19 mining of which is subject to the occupation tax imposed by 117.20 section 298.01, subdivision 4, this shall not prevent the 117.21 deduction of expenses and other items to the extent that the 117.22 expenses and other items are allowable under this chapter and 117.23 are not deductible, capitalizable, retainable in basis, or taken 117.24 into account by allowance or otherwise in computing the 117.25 occupation tax and do not exceed the amounts taken for federal 117.26 income tax purposes for that year. Occupation taxes imposed 117.27 under chapter 298, royalty taxes imposed under chapter 299, or 117.28 depletion expenses may not be deducted under this clause. 117.29 Sec. 14. Minnesota Statutes 1996, section 290.21, 117.30 subdivision 3, is amended to read: 117.31 Subd. 3. An amount for contribution or gifts made within 117.32 the taxable year: 117.33 (a) to or for the use of the state of Minnesota, or any of 117.34 its political subdivisions for exclusively public purposes, 117.35 (b) to or for the use of any community chest, corporation, 117.36 organization, trust, fund, association, or foundation located in 118.1 and carrying on substantially all of its activities within this 118.2 state, organized and operating exclusively for religious, 118.3 charitable, public cemetery, scientific, literary, artistic, or 118.4 educational purposes, or for the prevention of cruelty to 118.5 children or animals, no part of the net earnings of which inures 118.6 to the benefit of any private stockholder or individual, 118.7 (c) to a fraternal society, order, or association, 118.8 operating under the lodge system located in and carrying on 118.9 substantially all of their activities within this state if such 118.10 contributions or gifts are to be used exclusively for the 118.11 purposes specified in clause (b), or for or to posts or 118.12 organizations of war veterans or auxiliary units or societies of 118.13 such posts or organizations, if they are within the state and no 118.14 part of their net income inures to the benefit of any private 118.15 shareholder or individual, 118.16 (d) to or for the use of the United States of America for 118.17 exclusively public purposes if the contribution or gift consists 118.18 of real property located in Minnesota, 118.19 (e) to or for the use of a foundation if the foundation is 118.20 organized and operated exclusively for a purpose in clause (b), 118.21 and has no part of its net earnings inuring to the benefit of a 118.22 private shareholder or individual, but does not carry on 118.23 substantially all of its activities within this state. The 118.24 deduction under this clause equals the amount of the 118.25 corporation's contributions or gifts to the foundation within 118.26 the taxable year multiplied by a fraction equal to the ratio of 118.27 the foundation's total expenditures during the taxable year for 118.28 the benefit of organizations described in clause (b) to the 118.29 foundation's total expenditures during the taxable year, 118.30 (f) the total deduction hereunder shall not exceed 15 118.31 percent of the taxpayer's taxable net income less the deductions 118.32 allowable under this section other than those for contributions 118.33 or gifts, 118.34 (g) in the case of a corporation reporting its taxable 118.35 income on the accrual basis, if: (A) the board of directors 118.36 authorizes a charitable contribution during any taxable year, 119.1 and (B) payment of such contribution is made after the close of 119.2 such taxable year and on or before the 15th day of the third 119.3 month following the close of such taxable year; then the 119.4 taxpayer may elect to treat such contribution as paid during 119.5 such taxable year. The election may be made only at the time of 119.6 the filing of the return for such taxable year, and shall be 119.7 signified in such manner as the commissioner shall by rules 119.8 prescribe. 119.9 For a contribution of ordinary income or capital gain 119.10 property, the amount allowed as a deduction is limited to the 119.11 amount deductible under section 170(e) of the Internal Revenue 119.12 Code. 119.13 Sec. 15. Minnesota Statutes 1997 Supplement, section 119.14 290.371, subdivision 2, is amended to read: 119.15 Subd. 2. [EXEMPTIONS.] A corporation is not required to 119.16 file a notice of business activities report if: 119.17 (1) by the end of an accounting period for which it was 119.18 otherwise required to file a notice of business activities 119.19 report under this section, it had received a certificate of 119.20 authority to do business in this state; 119.21 (2) a timely return has been filed under section 289A.08; 119.22 (3) the corporation is exempt from taxation under this 119.23 chapter pursuant to section 290.05; or 119.24 (4) the corporation's activities in Minnesota, or the 119.25 interests in property which it owns, consist solely of 119.26 activities or property exempted from jurisdiction to tax under 119.27 section 290.015, subdivision 3, paragraph (b); or119.28(5) the corporation is an "S" corporation under section119.29290.9725. 119.30 Sec. 16. Laws 1995, chapter 255, article 3, section 2, 119.31 subdivision 1, as amended by Laws 1996, chapter 464, article 4, 119.32 section 1, and Laws 1997, chapter 231, article 5, section 16, is 119.33 amended to read: 119.34 Subdivision 1. [URBAN REVITALIZATION AND STABILIZATION 119.35 ZONES.] (a) By September 1, 1995, the metropolitan council shall 119.36 designate one or more urban revitalization and stabilization 120.1 zones in the metropolitan area, as defined in section 473.121, 120.2 subdivision 2. The designated zones must contain no more than 120.3 1,000 single family homes in total. In designating urban 120.4 revitalization and stabilization zones, the council shall choose 120.5 areas that are in transition toward blight and poverty. The 120.6 council shall use indicators that evidence increasing 120.7 neighborhood distress such as declining residential property 120.8 values, declining resident incomes, declining rates of 120.9 owner-occupancy, and other indicators of blight and poverty in 120.10 determining which areas are to be urban revitalization and 120.11 stabilization zones. 120.12 (b) An urban revitalization and stabilization zone is 120.13 created in the geographic area composed entirely of parcels that 120.14 are in whole or in part located within the 1996 65Ldn contour 120.15 surrounding the Minneapolis-St. Paul International Airport, or 120.16 within one mile of the boundaries of the 1996 65Ldn contour. 120.17 For residents of the zone created under this paragraph, 120.18 eligibility for the program as provided in subdivision 2 is 120.19 limited to persons buying and occupying a residence in the zone 120.20 after June 1, 1996, who have entered into purchase agreements 120.21 related to those homes before July 1, 1997. Initial 120.22 applications for the homesteading program in this paragraph 120.23 shall not be accepted after December 31, 1998. 120.24 Sec. 17. Laws 1995, chapter 255, article 3, section 2, 120.25 subdivision 4, as amended by Laws 1996, chapter 464, article 4, 120.26 section 2, is amended to read: 120.27 Subd. 4. [EXPIRATION.] Initial applications for the urban 120.28 homesteading program in the zones designated under subdivision 120.29 1, paragraph (a), shall not be accepted after July 1, 1997, for 120.30 homes purchased and occupied before May 1, 1997. For homes 120.31 purchased and occupied on or after May 1, 1997, but before July 120.32 1, 1998, initial applications shall not be accepted after June 120.33 30, 1998. 120.34 Sec. 18. Laws 1997, chapter 231, article 5, section 20, is 120.35 amended to read: 120.36 Sec. 20. [EFFECTIVE DATE.] 121.1 Sections 1, 5, 6, 11, 16, and 18 are effective the day 121.2 following final enactment. 121.3 Sections 2 to 4, and 9 are effective for taxable years 121.4 beginning after December 31, 1996. 121.5 Section 7 is effective for taxable years beginning after 121.6 December 31,19981997. 121.7 Section 8 is effective for tax credit certificates issued 121.8 after December 31, 1996, and used in taxable years beginning 121.9 after December 31, 1996. 121.10 Section 10 is effective January 1, 1998. 121.11 Sections 12, 13, 15, and 19 are effective beginning for 121.12 property tax refunds based on rent paid after December 31, 1996. 121.13 Section 17 is effective April 16, 1997. 121.14 Sec. 19. [PROHIBITION OF USE OF SOCIAL SECURITY NUMBERS.] 121.15 No label, envelope, or other material printed by the 121.16 department of revenue may include the social security number of 121.17 the taxpayer in a place that will be visible when delivered or 121.18 mailed to the taxpayer. 121.19 Sec. 20. [APPROPRIATION.] 121.20 (a) $75,000 is appropriated from the general fund to the 121.21 commissioner of revenue to make grants to one or more nonprofit 121.22 organizations, qualifying under section 501(c)(3) of the 121.23 Internal Revenue Code of 1986, to coordinate, facilitate, 121.24 encourage, and aid in the provision of taxpayer assistance 121.25 services. This appropriation is available for fiscal years 1998 121.26 and 1999. 121.27 (b) "Taxpayer assistance services" means accounting and tax 121.28 preparation services provided by volunteers to low-income and 121.29 disadvantaged Minnesota residents to help them file federal and 121.30 state income tax returns and Minnesota property tax refund 121.31 claims and to provide personal representation before the 121.32 department of revenue and the Internal Revenue Service. 121.33 Sec. 21. [REPEALER.] 121.34 Minnesota Statutes 1996, section 289A.50, subdivision 6, is 121.35 repealed. 121.36 Sec. 22. [EFFECTIVE DATES.] 122.1 Sections 1 and 2 are effective for use tax liability 122.2 incurred in calendar year 1999 and thereafter. 122.3 Section 3 is effective for extensions received under 122.4 Minnesota Statutes, section 289A.19, subdivision 2, for tax 122.5 years beginning after December 31, 1996. The change in section 122.6 4 made by clause (7) is effective for tax years beginning after 122.7 December 31, 1996. The change in section 4 made by clause (8) 122.8 is effective for tax years beginning after December 31, 1997. 122.9 Sections 5, clauses (11) and (12); 6; 11, paragraph (a), clause 122.10 (6) of the first set of clauses, and clause (4) of the second 122.11 set of clauses; 9; and 12, paragraph (b), clause (2)(iii) and 122.12 (2)(vii), are effective for tax years beginning after December 122.13 31, 1996. Section 7 is effective for tax years beginning after 122.14 December 31, 1996, except the change in denominator for 122.15 Minnesota Statutes, section 290.01, subdivision 19b, clause (1), 122.16 is effective for tax years beginning after December 31, 1997. 122.17 Section 5, clauses (13) and (14); section 8; section 11, 122.18 paragraph (a), clause (2) of the first set of clauses; section 122.19 12, paragraph (b), clause (2)(iv); and sections 13, 14, and 21 122.20 are effective for tax years beginning after December 31, 1997. 122.21 Section 15 is effective for tax years beginning after December 122.22 31, 1998. Sections 16 to 18 and 20 are effective the day 122.23 following final enactment. 122.24 ARTICLE 6 122.25 FEDERAL UPDATE 122.26 Section 1. Minnesota Statutes 1997 Supplement, section 122.27 289A.02, subdivision 7, is amended to read: 122.28 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 122.29 defined otherwise, "Internal Revenue Code" means the Internal 122.30 Revenue Code of 1986, as amended through December 31,1996, and122.31includes the provisions of section 1(a) and (b) of Public Law122.32Number 104-1171997. 122.33 Sec. 2. Minnesota Statutes 1997 Supplement, section 122.34 290.01, subdivision 19, is amended to read: 122.35 Subd. 19. [NET INCOME.] The term "net income" means the 122.36 federal taxable income, as defined in section 63 of the Internal 123.1 Revenue Code of 1986, as amended through the date named in this 123.2 subdivision, incorporating any elections made by the taxpayer in 123.3 accordance with the Internal Revenue Code in determining federal 123.4 taxable income for federal income tax purposes, and with the 123.5 modifications provided in subdivisions 19a to 19f. 123.6 In the case of a regulated investment company or a fund 123.7 thereof, as defined in section 851(a) or 851(h) of the Internal 123.8 Revenue Code, federal taxable income means investment company 123.9 taxable income as defined in section 852(b)(2) of the Internal 123.10 Revenue Code, except that: 123.11 (1) the exclusion of net capital gain provided in section 123.12 852(b)(2)(A) of the Internal Revenue Code does not apply; 123.13 (2) the deduction for dividends paid under section 123.14 852(b)(2)(D) of the Internal Revenue Code must be applied by 123.15 allowing a deduction for capital gain dividends and 123.16 exempt-interest dividends as defined in sections 852(b)(3)(C) 123.17 and 852(b)(5) of the Internal Revenue Code; and 123.18 (3) the deduction for dividends paid must also be applied 123.19 in the amount of any undistributed capital gains which the 123.20 regulated investment company elects to have treated as provided 123.21 in section 852(b)(3)(D) of the Internal Revenue Code. 123.22 The net income of a real estate investment trust as defined 123.23 and limited by section 856(a), (b), and (c) of the Internal 123.24 Revenue Code means the real estate investment trust taxable 123.25 income as defined in section 857(b)(2) of the Internal Revenue 123.26 Code. 123.27 The net income of a designated settlement fund as defined 123.28 in section 468B(d) of the Internal Revenue Code means the gross 123.29 income as defined in section 468B(b) of the Internal Revenue 123.30 Code. 123.31 The Internal Revenue Code of 1986, as amended through 123.32 December 31, 1986, shall be in effect for taxable years 123.33 beginning after December 31, 1986. The provisions of sections 123.34 10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 123.35 10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 123.36 Omnibus Budget Reconciliation Act of 1987, Public Law Number 124.1 100-203, the provisions of sections 1001, 1002, 1003, 1004, 124.2 1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 124.3 1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 124.4 6277, and 6282 of the Technical and Miscellaneous Revenue Act of 124.5 1988, Public Law Number 100-647, the provisions of sections 124.6 7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 124.7 1989, Public Law Number 101-239,andthe provisions of sections 124.8 1305, 1704(r), and 1704(e)(1) of the Small Business Job 124.9 Protection Act, Public Law Number 104-188, and the provisions of 124.10 sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 124.11 of 1997, Public Law Number 105-34, shall be effective at the 124.12 time they become effective for federal income tax purposes. 124.13 The Internal Revenue Code of 1986, as amended through 124.14 December 31, 1987, shall be in effect for taxable years 124.15 beginning after December 31, 1987. The provisions of sections 124.16 4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 124.17 6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 124.18 6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 124.19 Act of 1988, Public Law Number 100-647, the provisions of 124.20 sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 124.21 of 1989, Public Law Number 101-239, and the provisions of 124.22 section 11702 of the Revenue Reconciliation Act of 1990, Public 124.23 Law Number 101-508, shall become effective at the time they 124.24 become effective for federal tax purposes. 124.25 The Internal Revenue Code of 1986, as amended through 124.26 December 31, 1988, shall be in effect for taxable years 124.27 beginning after December 31, 1988. The provisions of sections 124.28 7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 124.29 7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 124.30 7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 124.31 Reconciliation Act of 1989, Public Law Number 101-239, the 124.32 provision of section 1401 of the Financial Institutions Reform, 124.33 Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 124.34 the provisions of sections 11701 and 11703 of the Revenue 124.35 Reconciliation Act of 1990, Public Law Number 101-508, and the 124.36 provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 125.1 Small Business Job Protection Act, Public Law Number 104-188, 125.2 shall become effective at the time they become effective for 125.3 federal tax purposes. 125.4 The Internal Revenue Code of 1986, as amended through 125.5 December 31, 1989, shall be in effect for taxable years 125.6 beginning after December 31, 1989. The provisions of sections 125.7 11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 125.8 the Revenue Reconciliation Act of 1990, Public Law Number 125.9 101-508, and the provisions of sections 13224 and 13261 of the 125.10 Omnibus Budget Reconciliation Act of 1993, Public Law Number 125.11 103-66, shall become effective at the time they become effective 125.12 for federal purposes. 125.13 The Internal Revenue Code of 1986, as amended through 125.14 December 31, 1990, shall be in effect for taxable years 125.15 beginning after December 31, 1990. 125.16 The provisions of section 13431 of the Omnibus Budget 125.17 Reconciliation Act of 1993, Public Law Number 103-66, shall 125.18 become effective at the time they became effective for federal 125.19 purposes. 125.20 The Internal Revenue Code of 1986, as amended through 125.21 December 31, 1991, shall be in effect for taxable years 125.22 beginning after December 31, 1991. 125.23 The provisions of sections 1936 and 1937 of the 125.24 Comprehensive National Energy Policy Act of 1992, Public Law 125.25 Number 102-486,andthe provisions of sections 13101, 13114, 125.26 13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 125.27 the Omnibus Budget Reconciliation Act of 1993, Public Law Number 125.28 103-66, and the provisions of section 1604(a)(1), (2), and (3) 125.29 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 125.30 shall become effective at the time they become effective for 125.31 federal purposes. 125.32 The Internal Revenue Code of 1986, as amended through 125.33 December 31, 1992, shall be in effect for taxable years 125.34 beginning after December 31, 1992. 125.35 The provisions of sections 13116, 13121, 13206, 13210, 125.36 13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 126.1 the Omnibus Budget Reconciliation Act of 1993, Public Law Number 126.2 103-66,andthe provisions of sections 1703(a), 1703(d), 126.3 1703(i), 1703(l), and 1703(m) of the Small Business Job 126.4 Protection Act, Public Law Number 104-188, and the provision of 126.5 section 1604(c) of the Taxpayer Relief Act of 1997, Public Law 126.6 Number 105-34, shall become effective at the time they become 126.7 effective for federal purposes. 126.8 The Internal Revenue Code of 1986, as amended through 126.9 December 31, 1993, shall be in effect for taxable years 126.10 beginning after December 31, 1993. 126.11 The provision of section 741 of Legislation to Implement 126.12 Uruguay Round of General Agreement on Tariffs and Trade, Public 126.13 Law Number 103-465, the provisions of sections 1, 2, and 3, of 126.14 the Self-Employed Health Insurance Act of 1995, Public Law 126.15 Number 104-7, the provision of section 501(b)(2) of the Health 126.16 Insurance Portability and Accountability Act, Public Law Number 126.17 104-191,andthe provisions of sections 1604 and 1704(p)(1) and 126.18 (2) of the Small Business Job Protection Act, Public Law Number 126.19 104-188, and the provisions of sections 1011, 1211(b)(1), and 126.20 1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 126.21 105-34, shall become effective at the time they become effective 126.22 for federal purposes. 126.23 The Internal Revenue Code of 1986, as amended through 126.24 December 31, 1994, shall be in effect for taxable years 126.25 beginning after December 31, 1994. 126.26 The provisions of sections 1119(a), 1120, 1121, 1202(a), 126.27 1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 126.28 Business Job Protection Act, Public Law Number 104-188,andthe 126.29 provision of section 511 of the Health Insurance Portability and 126.30 Accountability Act, Public Law Number 104-191, and the 126.31 provisions of sections 1174 and 1601(i)(2) of the Taxpayer 126.32 Relief Act of 1997, Public Law Number 105-34, shall become 126.33 effective at the time they become effective for federal purposes. 126.34 The Internal Revenue Code of 1986, as amended through March 126.35 22, 1996, is in effect for taxable years beginning after 126.36 December 31, 1995. 127.1 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 127.2 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 127.3 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 127.4 Protection Act, Public Law Number 104-188,andthe provisions of 127.5 Public Law Number 104-117, and the provisions of sections 313(a) 127.6 and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 127.7 1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 127.8 1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 127.9 1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 127.10 1997, Public Law Number 105-34, shall become effective at the 127.11 time they become effective for federal purposes. 127.12 The Internal Revenue Code of 1986, as amended through 127.13 December 31, 1996, shall be in effect for taxable years 127.14 beginning after December 31, 1996. 127.15 The provisions of sections 202(a) and (b), 221(a), 225, 127.16 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 127.17 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 127.18 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 127.19 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 127.20 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 127.21 shall become effective at the time they become effective for 127.22 federal purposes. 127.23 The Internal Revenue Code of 1986, as amended through 127.24 December 31, 1997, shall be in effect for taxable years 127.25 beginning after December 31, 1997. 127.26 Except as otherwise provided, references to the Internal 127.27 Revenue Code in subdivisions 19a to 19g mean the code in effect 127.28 for purposes of determining net income for the applicable year. 127.29 Sec. 3. Minnesota Statutes 1997 Supplement, section 127.30 290.01, subdivision 19a, is amended to read: 127.31 Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 127.32 individuals, estates, and trusts, there shall be added to 127.33 federal taxable income: 127.34 (1)(i) interest income on obligations of any state other 127.35 than Minnesota or a political or governmental subdivision, 127.36 municipality, or governmental agency or instrumentality of any 128.1 state other than Minnesota exempt from federal income taxes 128.2 under the Internal Revenue Code or any other federal statute, 128.3 and 128.4 (ii) exempt-interest dividends as defined in section 128.5 852(b)(5) of the Internal Revenue Code, except the portion of 128.6 the exempt-interest dividends derived from interest income on 128.7 obligations of the state of Minnesota or its political or 128.8 governmental subdivisions, municipalities, governmental agencies 128.9 or instrumentalities, but only if the portion of the 128.10 exempt-interest dividends from such Minnesota sources paid to 128.11 all shareholders represents 95 percent or more of the 128.12 exempt-interest dividends that are paid by the regulated 128.13 investment company as defined in section 851(a) of the Internal 128.14 Revenue Code, or the fund of the regulated investment company as 128.15 defined in section 851(h) of the Internal Revenue Code, making 128.16 the payment; and 128.17 (iii) for the purposes of items (i) and (ii), interest on 128.18 obligations of an Indian tribal government described in section 128.19 7871(c) of the Internal Revenue Code shall be treated as 128.20 interest income on obligations of the state in which the tribe 128.21 is located; 128.22 (2) the amount of income taxes paid or accrued within the 128.23 taxable year under this chapter and income taxes paid to any 128.24 other state or to any province or territory of Canada, to the 128.25 extent allowed as a deduction under section 63(d) of the 128.26 Internal Revenue Code, but the addition may not be more than the 128.27 amount by which the itemized deductions as allowed under section 128.28 63(d) of the Internal Revenue Code exceeds the amount of the 128.29 standard deduction as defined in section 63(c) of the Internal 128.30 Revenue Code. For the purpose of this paragraph, the 128.31 disallowance of itemized deductions under section 68 of the 128.32 Internal Revenue Code of 1986, income tax is the last itemized 128.33 deduction disallowed; 128.34 (3) the capital gain amount of a lump sum distribution to 128.35 which the special tax under section 1122(h)(3)(B)(ii) of the Tax 128.36 Reform Act of 1986, Public Law Number 99-514, applies; 129.1 (4) the amount of income taxes paid or accrued within the 129.2 taxable year under this chapter and income taxes paid to any 129.3 other state or any province or territory of Canada, to the 129.4 extent allowed as a deduction in determining federal adjusted 129.5 gross income. For the purpose of this paragraph, income taxes 129.6 do not include the taxes imposed by sections 290.0922, 129.7 subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 129.8 (5) the amount of loss or expense included in federal 129.9 taxable income under section 1366 of the Internal Revenue Code 129.10 flowing from a corporation that has a valid election in effect 129.11 for the taxable year under section 1362 of the Internal Revenue 129.12 Code, but which is not allowed to be an "S" corporation under 129.13 section 290.9725;and129.14 (6) the amount of any distributions in cash or property 129.15 made to a shareholder during the taxable year by a corporation 129.16 that has a valid election in effect for the taxable year under 129.17 section 1362 of the Internal Revenue Code, but which is not 129.18 allowed to be an "S" corporation under section 290.9725 to the 129.19 extent not already included in federal taxable income under 129.20 section 1368 of the Internal Revenue Code.; and 129.21 (7) the amount of a partner's pro rata share of net income 129.22 which does not flow through to the partner because the 129.23 partnership elected to pay the tax on the income under section 129.24 6242(a)(2) of the Internal Revenue Code. 129.25 Sec. 4. Minnesota Statutes 1997 Supplement, section 129.26 290.01, subdivision 19c, is amended to read: 129.27 Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 129.28 INCOME.] For corporations, there shall be added to federal 129.29 taxable income: 129.30 (1) the amount of any deduction taken for federal income 129.31 tax purposes for income, excise, or franchise taxes based on net 129.32 income or related minimum taxes paid by the corporation to 129.33 Minnesota, another state, a political subdivision of another 129.34 state, the District of Columbia, or any foreign country or 129.35 possession of the United States; 129.36 (2) interest not subject to federal tax upon obligations 130.1 of: the United States, its possessions, its agencies, or its 130.2 instrumentalities; the state of Minnesota or any other state, 130.3 any of its political or governmental subdivisions, any of its 130.4 municipalities, or any of its governmental agencies or 130.5 instrumentalities; the District of Columbia; or Indian tribal 130.6 governments; 130.7 (3) exempt-interest dividends received as defined in 130.8 section 852(b)(5) of the Internal Revenue Code; 130.9 (4) the amount of any net operating loss deduction taken 130.10 for federal income tax purposes under section 172 or 832(c)(10) 130.11 of the Internal Revenue Code or operations loss deduction under 130.12 section 810 of the Internal Revenue Code; 130.13 (5) the amount of any special deductions taken for federal 130.14 income tax purposes under sections 241 to 247 of the Internal 130.15 Revenue Code; 130.16 (6) losses from the business of mining, as defined in 130.17 section 290.05, subdivision 1, clause (a), that are not subject 130.18 to Minnesota income tax; 130.19 (7) the amount of any capital losses deducted for federal 130.20 income tax purposes under sections 1211 and 1212 of the Internal 130.21 Revenue Code; 130.22 (8) the amount of any charitable contributions deducted for 130.23 federal income tax purposes under section 170 of the Internal 130.24 Revenue Code; 130.25 (9) the exempt foreign trade income of a foreign sales 130.26 corporation under sections 921(a) and 291 of the Internal 130.27 Revenue Code; 130.28 (10) the amount of percentage depletion deducted under 130.29 sections 611 through 614 and 291 of the Internal Revenue Code; 130.30 (11) for certified pollution control facilities placed in 130.31 service in a taxable year beginning before December 31, 1986, 130.32 and for which amortization deductions were elected under section 130.33 169 of the Internal Revenue Code of 1954, as amended through 130.34 December 31, 1985, the amount of the amortization deduction 130.35 allowed in computing federal taxable income for those 130.36 facilities; 131.1 (12) the amount of any deemed dividend from a foreign 131.2 operating corporation determined pursuant to section 290.17, 131.3 subdivision 4, paragraph (g);and131.4 (13) the amount of any environmental tax paid under section 131.5 59(a) of the Internal Revenue Code.; and 131.6 (14) the amount of a partner's pro rata share of net income 131.7 which does not flow through to the partner because the 131.8 partnership elected to pay the tax on the income under section 131.9 6242(a)(2) of the Internal Revenue Code. 131.10 Sec. 5. Minnesota Statutes 1997 Supplement, section 131.11 290.01, subdivision 31, is amended to read: 131.12 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 131.13 defined otherwise, "Internal Revenue Code" means the Internal 131.14 Revenue Code of 1986, as amended through December 31,1996, and131.15includes the provisions of section 1(a) and (b) of Public Law131.16Number 104-1171997. 131.17 Sec. 6. Minnesota Statutes 1996, section 290.06, 131.18 subdivision 2c, is amended to read: 131.19 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 131.20 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 131.21 married individuals filing joint returns and surviving spouses 131.22 as defined in section 2(a) of the Internal Revenue Code must be 131.23 computed by applying to their taxable net income the following 131.24 schedule of rates: 131.25 (1) On the first $19,910, 6 percent; 131.26 (2) On all over $19,910, but not over $79,120, 8 percent; 131.27 (3) On all over $79,120, 8.5 percent. 131.28 Married individuals filing separate returns, estates, and 131.29 trusts must compute their income tax by applying the above rates 131.30 to their taxable income, except that the income brackets will be 131.31 one-half of the above amounts. 131.32 (b) The income taxes imposed by this chapter upon unmarried 131.33 individuals must be computed by applying to taxable net income 131.34 the following schedule of rates: 131.35 (1) On the first $13,620, 6 percent; 131.36 (2) On all over $13,620, but not over $44,750, 8 percent; 132.1 (3) On all over $44,750, 8.5 percent. 132.2 (c) The income taxes imposed by this chapter upon unmarried 132.3 individuals qualifying as a head of household as defined in 132.4 section 2(b) of the Internal Revenue Code must be computed by 132.5 applying to taxable net income the following schedule of rates: 132.6 (1) On the first $16,770, 6 percent; 132.7 (2) On all over $16,770, but not over $67,390, 8 percent; 132.8 (3) On all over $67,390, 8.5 percent. 132.9 (d) In lieu of a tax computed according to the rates set 132.10 forth in this subdivision, the tax of any individual taxpayer 132.11 whose taxable net income for the taxable year is less than an 132.12 amount determined by the commissioner must be computed in 132.13 accordance with tables prepared and issued by the commissioner 132.14 of revenue based on income brackets of not more than $100. The 132.15 amount of tax for each bracket shall be computed at the rates 132.16 set forth in this subdivision, provided that the commissioner 132.17 may disregard a fractional part of a dollar unless it amounts to 132.18 50 cents or more, in which case it may be increased to $1. 132.19 (e) An individual who is not a Minnesota resident for the 132.20 entire year must compute the individual's Minnesota income tax 132.21 as provided in this subdivision. After the application of the 132.22 nonrefundable credits provided in this chapter, the tax 132.23 liability must then be multiplied by a fraction in which: 132.24 (1) The numerator is the individual's Minnesota source 132.25 federal adjusted gross income as defined in section 62 of the 132.26 Internal Revenue Code increased by theadditionadditions 132.27 requiredfor interest income from non-Minnesota state and132.28municipal bondsunder section 290.01, subdivision 19a,clause132.29 clauses (1) and (7), after applying the allocation and 132.30 assignability provisions of section 290.081, clause (a), or 132.31 290.17; and 132.32 (2) the denominator is the individual's federal adjusted 132.33 gross income as defined in section 62 of the Internal Revenue 132.34 Code of 1986,as amended through April 15, 1995,increased by 132.35 theaddition required for interest income from non-Minnesota132.36state and municipal bondsamounts specified under section 133.1 290.01, subdivision 19a,clauseclauses (1) and (7). 133.2 Sec. 7. Minnesota Statutes 1996, section 290.067, 133.3 subdivision 2a, is amended to read: 133.4 Subd. 2a. [INCOME.] (a) For purposes of this section, 133.5 "income" means the sum of the following: 133.6 (1) federal adjusted gross income as defined in section 62 133.7 of the Internal Revenue Code; and 133.8 (2) the sum of the following amounts to the extent not 133.9 included in clause (1): 133.10 (i) all nontaxable income; 133.11 (ii) the amount of a passive activity loss that is not 133.12 disallowed as a result of section 469, paragraph (i) or (m) of 133.13 the Internal Revenue Code and the amount of passive activity 133.14 loss carryover allowed under section 469(b) of the Internal 133.15 Revenue Code; 133.16 (iii) an amount equal to the total of any discharge of 133.17 qualified farm indebtedness of a solvent individual excluded 133.18 from gross income under section 108(g) of the Internal Revenue 133.19 Code; 133.20 (iv) cash public assistance and relief; 133.21 (v) any pension or annuity (including railroad retirement 133.22 benefits, all payments received under the federal Social 133.23 Security Act, supplemental security income, and veterans 133.24 benefits), which was not exclusively funded by the claimant or 133.25 spouse, or which was funded exclusively by the claimant or 133.26 spouse and which funding payments were excluded from federal 133.27 adjusted gross income in the years when the payments were made; 133.28 (vi) interest received from the federal or a state 133.29 government or any instrumentality or political subdivision 133.30 thereof; 133.31 (vii) workers' compensation; 133.32 (viii) nontaxable strike benefits; 133.33 (ix) the gross amounts of payments received in the nature 133.34 of disability income or sick pay as a result of accident, 133.35 sickness, or other disability, whether funded through insurance 133.36 or otherwise; 134.1 (x) a lump sum distribution under section 402(e)(3) of the 134.2 Internal Revenue Code; 134.3 (xi) contributions made by the claimant to an individual 134.4 retirement account, including a qualified voluntary employee 134.5 contribution; simplified employee pension plan; self-employed 134.6 retirement plan; cash or deferred arrangement plan under section 134.7 401(k) of the Internal Revenue Code; or deferred compensation 134.8 plan under section 457 of the Internal Revenue Code; and 134.9 (xii) nontaxable scholarship or fellowship grants. 134.10 In the case of an individual who files an income tax return 134.11 on a fiscal year basis, the term "federal adjusted gross income" 134.12 means federal adjusted gross income reflected in the fiscal year 134.13 ending in the next calendar year. Federal adjusted gross income 134.14 may not be reduced by the amount of a net operating loss 134.15 carryback or carryforward or a capital loss carryback or 134.16 carryforward allowed for the year. 134.17 (b) "Income" does not include: 134.18 (1) amounts excluded pursuant to the Internal Revenue Code, 134.19 sections 101(a),and 102, and 121; 134.20 (2) amounts of any pension or annuity that were exclusively 134.21 funded by the claimant or spouse if the funding payments were 134.22 not excluded from federal adjusted gross income in the years 134.23 when the payments were made; 134.24 (3) surplus food or other relief in kind supplied by a 134.25 governmental agency; 134.26 (4) relief granted under chapter 290A; and 134.27 (5) child support payments received under a temporary or 134.28 final decree of dissolution or legal separation. 134.29 Sec. 8. Minnesota Statutes 1997 Supplement, section 134.30 290.0671, subdivision 1, is amended to read: 134.31 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 134.32 a credit against the tax imposed by this chapter equal to a 134.33 percentage of the credit for which the individual is eligible 134.34 under section 32 of the Internal Revenue Code disregarding the 134.35 supplemental child credit of clause (m)[(n)]. The percentage is 134.36 15 for individuals without a qualifying child, and 25 for 135.1 individuals with at least one qualifying child. For purposes of 135.2 this section, "qualifying child" has the meaning given in 135.3 section 32(c)(3) of the Internal Revenue Code. 135.4 For a nonresident or part-year resident, the credit 135.5 determined under section 32 of the Internal Revenue Code must be 135.6 allocated based on the percentage calculated under section 135.7 290.06, subdivision 2c, paragraph (e). 135.8 For a person who was a resident for the entire tax year and 135.9 has earned income not subject to tax under this chapter, the 135.10 credit must be allocated based on the ratio of federal adjusted 135.11 gross income reduced by the earned income not subject to tax 135.12 under this chapter over federal adjusted gross income. 135.13 Sec. 9. Minnesota Statutes 1996, section 290.0921, 135.14 subdivision 3a, is amended to read: 135.15 Subd. 3a. [EXEMPTIONS.] The following entities are exempt 135.16 from the tax imposed by this section: 135.17 (1) cooperatives taxable under subchapter T of the Internal 135.18 Revenue Code or organized under chapter 308 or a similar law of 135.19 another state; 135.20 (2) corporations subject to tax under section 60A.15, 135.21 subdivision 1; 135.22 (3) real estate investment trusts; 135.23 (4) regulated investment companies or a fund thereof;and135.24 (5) entities having a valid election in effect under 135.25 section 860D(b) of the Internal Revenue Code.; and 135.26 (6) small corporations exempt from the federal alternative 135.27 minimum tax under section 55(e) of the Internal Revenue Code. 135.28 Sec. 10. Minnesota Statutes 1996, section 290A.03, 135.29 subdivision 3, is amended to read: 135.30 Subd. 3. [INCOME.] (1) "Income" means the sum of the 135.31 following: 135.32 (a) federal adjusted gross income as defined in the 135.33 Internal Revenue Code; and 135.34 (b) the sum of the following amounts to the extent not 135.35 included in clause (a): 135.36 (i) all nontaxable income; 136.1 (ii) the amount of a passive activity loss that is not 136.2 disallowed as a result of section 469, paragraph (i) or (m) of 136.3 the Internal Revenue Code and the amount of passive activity 136.4 loss carryover allowed under section 469(b) of the Internal 136.5 Revenue Code; 136.6 (iii) an amount equal to the total of any discharge of 136.7 qualified farm indebtedness of a solvent individual excluded 136.8 from gross income under section 108(g) of the Internal Revenue 136.9 Code; 136.10 (iv) cash public assistance and relief; 136.11 (v) any pension or annuity (including railroad retirement 136.12 benefits, all payments received under the federal Social 136.13 Security Act, supplemental security income, and veterans 136.14 benefits), which was not exclusively funded by the claimant or 136.15 spouse, or which was funded exclusively by the claimant or 136.16 spouse and which funding payments were excluded from federal 136.17 adjusted gross income in the years when the payments were made; 136.18 (vi) interest received from the federal or a state 136.19 government or any instrumentality or political subdivision 136.20 thereof; 136.21 (vii) workers' compensation; 136.22 (viii) nontaxable strike benefits; 136.23 (ix) the gross amounts of payments received in the nature 136.24 of disability income or sick pay as a result of accident, 136.25 sickness, or other disability, whether funded through insurance 136.26 or otherwise; 136.27 (x) a lump sum distribution under section 402(e)(3) of the 136.28 Internal Revenue Code; 136.29 (xi) contributions made by the claimant to an individual 136.30 retirement account, including a qualified voluntary employee 136.31 contribution; simplified employee pension plan; self-employed 136.32 retirement plan; cash or deferred arrangement plan under section 136.33 401(k) of the Internal Revenue Code; or deferred compensation 136.34 plan under section 457 of the Internal Revenue Code; and 136.35 (xii) nontaxable scholarship or fellowship grants. 136.36 In the case of an individual who files an income tax return 137.1 on a fiscal year basis, the term "federal adjusted gross income" 137.2 shall mean federal adjusted gross income reflected in the fiscal 137.3 year ending in the calendar year. Federal adjusted gross income 137.4 shall not be reduced by the amount of a net operating loss 137.5 carryback or carryforward or a capital loss carryback or 137.6 carryforward allowed for the year. 137.7 (2) "Income" does not include 137.8 (a) amounts excluded pursuant to the Internal Revenue Code, 137.9 sections 101(a),and 102, and 121; 137.10 (b) amounts of any pension or annuity which was exclusively 137.11 funded by the claimant or spouse and which funding payments were 137.12 not excluded from federal adjusted gross income in the years 137.13 when the payments were made; 137.14 (c) surplus food or other relief in kind supplied by a 137.15 governmental agency; 137.16 (d) relief granted under this chapter; or 137.17 (e) child support payments received under a temporary or 137.18 final decree of dissolution or legal separation. 137.19 (3) The sum of the following amounts may be subtracted from 137.20 income: 137.21 (a) for the claimant's first dependent, the exemption 137.22 amount multiplied by 1.4; 137.23 (b) for the claimant's second dependent, the exemption 137.24 amount multiplied by 1.3; 137.25 (c) for the claimant's third dependent, the exemption 137.26 amount multiplied by 1.2; 137.27 (d) for the claimant's fourth dependent, the exemption 137.28 amount multiplied by 1.1; 137.29 (e) for the claimant's fifth dependent, the exemption 137.30 amount; and 137.31 (f) if the claimant or claimant's spouse was disabled or 137.32 attained the age of 65 on or before December 31 of the year for 137.33 which the taxes were levied or rent paid, the exemption amount. 137.34 For purposes of this subdivision, the "exemption amount" 137.35 means the exemption amount under section 151(d) of the Internal 137.36 Revenue Code for the taxable year for which the income is 138.1 reported. 138.2 Sec. 11. Minnesota Statutes 1997 Supplement, section 138.3 290A.03, subdivision 15, is amended to read: 138.4 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 138.5 means the Internal Revenue Code of 1986, as amended through 138.6 December 31,19961997. 138.7 Sec. 12. Minnesota Statutes 1997 Supplement, section 138.8 291.005, subdivision 1, is amended to read: 138.9 Subdivision 1. Unless the context otherwise clearly 138.10 requires, the following terms used in this chapter shall have 138.11 the following meanings: 138.12 (1) "Federal gross estate" means the gross estate of a 138.13 decedent as valued and otherwise determined for federal estate 138.14 tax purposes by federal taxing authorities pursuant to the 138.15 provisions of the Internal Revenue Code. 138.16 (2) "Minnesota gross estate" means the federal gross estate 138.17 of a decedent after (a) excluding therefrom any property 138.18 included therein which has its situs outside Minnesota and (b) 138.19 including therein any property omitted from the federal gross 138.20 estate which is includable therein, has its situs in Minnesota, 138.21 and was not disclosed to federal taxing authorities. 138.22 (3) "Personal representative" means the executor, 138.23 administrator or other person appointed by the court to 138.24 administer and dispose of the property of the decedent. If 138.25 there is no executor, administrator or other person appointed, 138.26 qualified, and acting within this state, then any person in 138.27 actual or constructive possession of any property having a situs 138.28 in this state which is included in the federal gross estate of 138.29 the decedent shall be deemed to be a personal representative to 138.30 the extent of the property and the Minnesota estate tax due with 138.31 respect to the property. 138.32 (4) "Resident decedent" means an individual whose domicile 138.33 at the time of death was in Minnesota. 138.34 (5) "Nonresident decedent" means an individual whose 138.35 domicile at the time of death was not in Minnesota. 138.36 (6) "Situs of property" means, with respect to real 139.1 property, the state or country in which it is located; with 139.2 respect to tangible personal property, the state or country in 139.3 which it was normally kept or located at the time of the 139.4 decedent's death; and with respect to intangible personal 139.5 property, the state or country in which the decedent was 139.6 domiciled at death. 139.7 (7) "Commissioner" means the commissioner of revenue or any 139.8 person to whom the commissioner has delegated functions under 139.9 this chapter. 139.10 (8) "Internal Revenue Code" means the United States 139.11 Internal Revenue Code of 1986, as amended through December 31, 139.121996, and includes the provisions of section 1(a)(4) of Public139.13Law Number 104-1171997. 139.14 Sec. 13. [INSTRUCTION TO REVISOR.] 139.15 Each place in Minnesota Statutes that refers to section 139.16 851(h) or 851(q) of the Internal Revenue Code, the revisor in 139.17 the next edition of Minnesota Statutes shall substitute "851(g)" 139.18 for those references. 139.19 Sec. 14. [EFFECTIVE DATES.] 139.20 Sections 1, 3, 4, and 6 to 10 are effective for tax years 139.21 beginning after December 31, 1997. Sections 5, 11, and 12 are 139.22 effective at the same time federal changes made by the Taxpayer 139.23 Relief Act of 1997, Public Law Number 105-34, which are 139.24 incorporated into Minnesota Statutes, chapters 290, 290A, and 139.25 291 by these sections, become effective for federal tax purposes. 139.26 ARTICLE 7 139.27 SALES AND EXCISE TAXES 139.28 Section 1. Minnesota Statutes 1997 Supplement, section 139.29 297A.01, subdivision 4, is amended to read: 139.30 Subd. 4. (a) A "retail sale" or "sale at retail" means a 139.31 sale for any purpose other than resale in the regular course of 139.32 business. 139.33 (b) Property utilized by the owner only by leasing such 139.34 property to others or by holding it in an effort to so lease it, 139.35 and which is put to no use by the owner other than resale after 139.36 such lease or effort to lease, shall be considered property 140.1 purchased for resale. 140.2 (c) Master computer software programs that are purchased 140.3 and used to make copies for sale or lease are considered 140.4 property purchased for resale. 140.5 (d) Sales of building materials, supplies and equipment to 140.6 owners, contractors, subcontractors or builders for the erection 140.7 of buildings or the alteration, repair or improvement of real 140.8 property are "retail sales" or "sales at retail" in whatever 140.9 quantity sold and whether or not for purpose of resale in the 140.10 form of real property or otherwise. 140.11 (e) A sale of carpeting, linoleum, or other similar floor 140.12 covering which includes installation of the carpeting, linoleum, 140.13 or other similar floor covering is a contract for the 140.14 improvement of real property. 140.15 (f) A sale of shrubbery, plants, sod, trees, and similar 140.16 items that includes installation of the shrubbery, plants, sod, 140.17 trees, and similar items is a contract for the improvement of 140.18 real property. 140.19 (g) Aircraft and parts for the repair thereof purchased by 140.20 a nonprofit, incorporated flying club or association utilized 140.21 solely by the corporation by leasing such aircraft to 140.22 shareholders of the corporation shall be considered property 140.23 purchased for resale. The leasing of the aircraft to the 140.24 shareholders by the flying club or association shall be 140.25 considered a sale. Leasing of aircraft utilized by a lessee for 140.26 the purpose of leasing to others, whether or not the lessee also 140.27 utilizes the aircraft for flight instruction where no separate 140.28 charge is made for aircraft rental or for charter service, shall 140.29 be considered a purchase for resale; provided, however, that a 140.30 proportionate share of the lease payment reflecting use for 140.31 flight instruction or charter service is subject to tax pursuant 140.32 to section 297A.14. 140.33 (h) Tangible personal property that is awarded as prizes in 140.34 a game of skill or chance, are considered property purchased for 140.35 resale. Tangible personal property awarded as prizes or 140.36 promotions in connection with lawful gambling, as defined in 141.1 section 349.12, the state lottery, or other activities shall not 141.2 be considered property purchased for resale. 141.3 (i) Tangible personal property that is utilized or employed 141.4 in the furnishing or providing of services under section 141.5 297A.01, subdivision 3, paragraph (d), or in conducting lawful 141.6 gambling under chapter 349 or the state lottery under chapter 141.7 349A, including property given as promotional items, shall not 141.8 be considered property purchased for resale. Machines, 141.9 equipment, or devices that are used to furnish, provide, or 141.10 dispense goods or services, including coin-operated devices, 141.11 shall not be considered property purchased for resale. 141.12 Sec. 2. Minnesota Statutes 1996, section 297A.01, 141.13 subdivision 8, is amended to read: 141.14 Subd. 8. "Sales price" means the total consideration 141.15 valued in money, for a retail sale whether paid in money or 141.16 otherwise, excluding therefrom any amount allowed as credit for 141.17 tangible personal property taken in trade for resale, without 141.18 deduction for the cost of the property sold, cost of materials 141.19 used, labor or service cost, interest, or discount allowed after 141.20 the sale is consummated, the cost of transportation incurred 141.21 prior to the time of sale, any amount for which credit is given 141.22 to the purchaser by the seller, or any other expense 141.23 whatsoever. A deduction may be made for charges of up to 15 141.24 percent in lieu of tips, if the consideration for such charges 141.25 is separately stated. No deduction shall be allowed for charges 141.26 for services that are part of a sale. Except as otherwise 141.27 provided in this subdivision, a deduction may also be made for 141.28 interest, financing, or carrying charges, charges for labor or 141.29 services used in installing or applying the property sold or 141.30 transportation charges if the transportation occurs after the 141.31 retail sale of the property only if the consideration for such 141.32 charges is separately stated. "Sales price," for purposes of 141.33 sales of ready-mixed concrete sold from a ready-mixed concrete 141.34 truck, includes any transportation, delivery, or other service 141.35 charges, and no deduction is allowed for those charges, whether 141.36 or not the charges are separately stated. There shall not be 142.1 included in "sales price" cash discounts allowed and taken on 142.2 sales or the amount refunded either in cash or in credit for 142.3 property returned by purchasers. 142.4 Sec. 3. Minnesota Statutes 1997 Supplement, section 142.5 297A.01, subdivision 16, is amended to read: 142.6 Subd. 16. [CAPITAL EQUIPMENT.] (a) Capital equipment means 142.7 machinery and equipment purchased or leased for use in this 142.8 state and used by the purchaser or lessee primarily for 142.9 manufacturing, fabricating, mining, or refining tangible 142.10 personal property to be sold ultimately at retail and for 142.11 electronically transmitting results retrieved by a customer of 142.12 an on-line computerized data retrieval system. 142.13 (b) Capital equipment includes all machinery and equipment 142.14 that is essential to the integrated production process. Capital 142.15 equipment includes, but is not limited to: 142.16 (1) machinery and equipment used or required to operate, 142.17 control, or regulate the production equipment; 142.18 (2) machinery and equipment used for research and 142.19 development, design, quality control, and testing activities; 142.20 (3) environmental control devices that are used to maintain 142.21 conditions such as temperature, humidity, light, or air pressure 142.22 when those conditions are essential to and are part of the 142.23 production process; 142.24 (4) materials and supplies necessary to construct and 142.25 install machinery or equipment; 142.26 (5) repair and replacement parts, including accessories, 142.27 whether purchased as spare parts, repair parts, or as upgrades 142.28 or modifications to machinery or equipment; 142.29 (6) materials used for foundations that support machinery 142.30 or equipment;or142.31 (7) materials used to construct and install special purpose 142.32 buildings used in the production process; or 142.33 (8) ready-mixed concrete trucks in which the ready-mixed 142.34 concrete is mixed as part of the delivery process. 142.35 (c) Capital equipment does not include the following: 142.36 (1) motor vehicles taxed under chapter 297B; 143.1 (2) machinery or equipment used to receive or store raw 143.2 materials; 143.3 (3) building materials; 143.4 (4) machinery or equipment used for nonproduction purposes, 143.5 including, but not limited to, the following: machinery and 143.6 equipment used for plant security, fire prevention, first aid, 143.7 and hospital stations; machinery and equipment used in support 143.8 operations or for administrative purposes; machinery and 143.9 equipment used solely for pollution control, prevention, or 143.10 abatement; and machinery and equipment used in plant cleaning, 143.11 disposal of scrap and waste, plant communications, space 143.12 heating, lighting, or safety; 143.13 (5) "farm machinery" as defined by subdivision 15, and 143.14 "aquaculture production equipment" as defined by subdivision 19; 143.15 or 143.16 (6) any other item that is not essential to the integrated 143.17 process of manufacturing, fabricating, mining, or refining. 143.18 (d) For purposes of this subdivision: 143.19 (1) "Equipment" means independent devices or tools separate 143.20 from machinery but essential to an integrated production 143.21 process, including computers and software, used in operating, 143.22 controlling, or regulating machinery and equipment; and any 143.23 subunit or assembly comprising a component of any machinery or 143.24 accessory or attachment parts of machinery, such as tools, dies, 143.25 jigs, patterns, and molds. 143.26 (2) "Fabricating" means to make, build, create, produce, or 143.27 assemble components or property to work in a new or different 143.28 manner. 143.29 (3) "Machinery" means mechanical, electronic, or electrical 143.30 devices, including computers and software, that are purchased or 143.31 constructed to be used for the activities set forth in paragraph 143.32 (a), beginning with the removal of raw materials from inventory 143.33 through the completion of the product, including packaging of 143.34 the product. 143.35 (4) "Manufacturing" means an operation or series of 143.36 operations where raw materials are changed in form, composition, 144.1 or condition by machinery and equipment and which results in the 144.2 production of a new article of tangible personal property. For 144.3 purposes of this subdivision, "manufacturing" includes the 144.4 generation of electricity or steam to be sold at retail. 144.5 (5) "Mining" means the extraction of minerals, ores, stone, 144.6 and peat. 144.7 (6) "On-line data retrieval system" means a system whose 144.8 cumulation of information is equally available and accessible to 144.9 all its customers. 144.10 (7) "Pollution control equipment" means machinery and 144.11 equipment used to eliminate, prevent, or reduce pollution 144.12 resulting from an activity described in paragraph (a). 144.13 (8) "Primarily" means machinery and equipment used 50 144.14 percent or more of the time in an activity described in 144.15 paragraph (a). 144.16 (9) "Refining" means the process of converting a natural 144.17 resource to a product, including the treatment of water to be 144.18 sold at retail. 144.19 (e) For purposes of this subdivision the requirement that 144.20 the machinery or equipment "must be used by the purchaser or 144.21 lessee" means that the person who purchases or leases the 144.22 machinery or equipment must be the one who uses it for the 144.23 qualifying purpose. When a contractor buys and installs 144.24 machinery or equipment as part of an improvement to real 144.25 property, only the contractor is considered the purchaser. 144.26 Sec. 4. Minnesota Statutes 1996, section 297A.02, 144.27 subdivision 2, is amended to read: 144.28 Subd. 2. [MACHINERY AND EQUIPMENT.] Notwithstanding the 144.29 provisions of subdivision 1, the rate of the excise tax imposed 144.30 upon sales of farm machinery and aquaculture production 144.31 equipment is: 144.32 for purchases prior to July 1, 1998, 2.5 percent, 144.33 for purchases after June 30, 1998, and prior to July 1, 144.34 1999, 1.5 percent, and 144.35 purchases after June 30, 1999 are exempt. 144.36 Sec. 5. Minnesota Statutes 1996, section 297A.02, 145.1 subdivision 4, is amended to read: 145.2 Subd. 4. [MANUFACTURED HOUSING AND PARK TRAILERS.] 145.3 Notwithstanding the provisions of subdivision 1, for sales at 145.4 retail of manufactured homes used for residential purposesand145.5new or used park trailers, as defined in section 168.011,145.6subdivision 8, paragraph (b), the excise tax is imposed upon 65 145.7 percent of thesales pricedealer's cost of the homeor, and for 145.8 sales of new and used park trailers, as defined in section 145.9 168.011, subdivision 8, paragraph (b), the excise tax is imposed 145.10 upon 65 percent of the sale price of the park trailer. 145.11 Sec. 6. Minnesota Statutes 1996, section 297A.135, 145.12 subdivision 4, is amended to read: 145.13 Subd. 4. [EXEMPTIONEXEMPTIONS.] (a) The tax and the fee 145.14 imposed by this section do not apply to a lease or rental of (1) 145.15 a vehicle to be used by the lessee to provide a licensed taxi 145.16 service; (2) a hearse or limousine used in connection with a 145.17 burial or funeral service; or (3) a van designed or adapted 145.18 primarily for transporting property rather than passengers. 145.19 (b) The tax and the fee imposed by this section do not 145.20 apply if: 145.21 (1) the lessor either (i) leases during the calendar year 145.22 no more than 20 registered vehicles or (ii) had during the 145.23 previous calendar year no more than $50,000 in gross receipts 145.24 that would otherwise, except for the exemption provided by this 145.25 paragraph, have been subject to tax under this section; 145.26 (2) the lessor pays the registration tax under chapter 168; 145.27 and 145.28 (3) the lessor elects not to charge the fee. 145.29 Sec. 7. Minnesota Statutes 1997 Supplement, section 145.30 297A.14, subdivision 4, is amended to read: 145.31 Subd. 4. [DE MINIMIS EXEMPTION.] Purchases subject to use 145.32 tax under this section are exempt if(1) the purchase is made by145.33an individual for personal use, and (2)the total amount of 145.34 purchases made by a person, other than a person who has or is 145.35 obligated to have a permit under section 297A.04, that are 145.36 subject to the use taxdo, does not exceed $770 in the calendar 146.1 year.For purposes of this subdivision, "personal use" includes146.2purchases for gifts.Ifan individuala person makes purchases, 146.3 which are subject to use tax, of more than $770 in the calendar 146.4 year theindividualperson must pay the use tax on the entire 146.5 amount. This exemption does not apply to purchases made from 146.6 retailers who are required or registered to collect taxes under 146.7 this chapter. 146.8 Sec. 8. Minnesota Statutes 1997 Supplement, section 146.9 297A.25, subdivision 3, is amended to read: 146.10 Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts 146.11 from the sale of and storage, use, or consumption of prescribed 146.12 drugs, prescribed medicine and insulin, intended for use, 146.13 internal or external, in the cure, mitigation, treatment or 146.14 prevention of illness or disease in human beings are exempt, 146.15 together with prescription glasses, fever thermometers, 146.16 therapeutic, and prosthetic devices. "Prescribed drugs" or 146.17 "prescribed medicine" includes over-the-counter drugs or 146.18 medicine prescribed by a licensed physician. "Therapeutic 146.19 devices" includes reusable finger pricking devices for the 146.20 extraction of blood, blood glucose monitoring machines, and 146.21 other diagnostic agents used in diagnosing, monitoring, or 146.22 treating diabetes. Nonprescription analgesics consisting 146.23 principally (determined by the weight of all ingredients) of 146.24 acetaminophen, acetylsalicylic acid, ibuprofen, ketoprofen, 146.25 naproxen, and other nonprescription analgesics that are approved 146.26 by the United States Food and Drug Administration for internal 146.27 use by human beings, or a combination thereof, are exempt. 146.28 Medical supplies purchased by a licensed health care 146.29 facility or licensed health care professional to provide medical 146.30 treatment to residents or patients are exempt. The exemption 146.31 does not apply to medical equipment or components of medical 146.32 equipment, laboratory supplies, radiological supplies, and other 146.33 items used in providing medical services. For purposes of this 146.34 subdivision, "medical supplies" means adhesive and non-adhesive 146.35 bandages, gauze pads and strips, cotton applicators, 146.36 antiseptics, nonprescription drugs, eye solution, and other 147.1 similar supplies used directly on the resident or patient in 147.2 providing medical services. 147.3 Sec. 9. Minnesota Statutes 1997 Supplement, section 147.4 297A.25, subdivision 9, is amended to read: 147.5 Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross 147.6 receipts from the sale of and the storage, use, or consumption 147.7 of all materials, including chemicals, fuels, petroleum 147.8 products, lubricants, packaging materials, including returnable 147.9 containers used in packaging food and beverage products, feeds, 147.10 seeds, fertilizers, electricity, gas and steam, used or consumed 147.11 in agricultural or industrial production of personal property 147.12 intended to be sold ultimately at retail, whether or not the 147.13 item so used becomes an ingredient or constituent part of the 147.14 property produced are exempt. Seeds, trees, fertilizers, and 147.15 herbicides purchased for use by farmers in the Conservation 147.16 Reserve Program under United States Code, title 16, section 147.17 590h, as amended through December 31, 1991, the Integrated Farm 147.18 Management Program under section 1627 of Public Law Number 147.19 101-624, the Wheat and Feed Grain Programs under sections 301 to 147.20 305 and 401 to 405 of Public Law Number 101-624, and the 147.21 conservation reserve program under sections 103F.505 to 147.22 103F.531, are included in this exemption. Sales to a 147.23 veterinarian of materials used or consumed in the care, 147.24 medication, and treatment of horses and agricultural production 147.25 animals are exempt under this subdivision. Chemicals used for 147.26 cleaning food processing machinery and equipment are included in 147.27 this exemption. Materials, including chemicals, fuels, and 147.28 electricity purchased by persons engaged in agricultural or 147.29 industrial production to treat waste generated as a result of 147.30 the production process are included in this exemption. Such 147.31 production shall include, but is not limited to, research, 147.32 development, design or production of any tangible personal 147.33 property, manufacturing, processing (other than by restaurants 147.34 and consumers) of agricultural products whether vegetable or 147.35 animal, commercial fishing, refining, smelting, reducing, 147.36 brewing, distilling, printing, mining, quarrying, lumbering, 148.1 generating electricity and the production of road building 148.2 materials. Such production shall not include painting, 148.3 cleaning, repairing or similar processing of property except as 148.4 part of the original manufacturing process. Machinery, 148.5 equipment, implements, tools, accessories, appliances, 148.6 contrivances, furniture and fixtures, used in such production 148.7 and fuel, electricity, gas or steam used for space heating or 148.8 lighting, are not included within this exemption; however, 148.9 accessory tools, equipment and other short lived items, which 148.10 are separate detachable units used in producing a direct effect 148.11 upon the product, where such items have an ordinary useful life 148.12 of less than 12 months, are included within the exemption 148.13 provided herein. Electricity used to make snow for outdoor use 148.14 for ski hills, ski slopes, or ski trails is included in this 148.15 exemption. Petroleum and special fuels used in producing or 148.16 generating power for propelling ready-mixed concrete trucks on 148.17 the public highways of this state are not included in this 148.18 exemption. 148.19 Sec. 10. Minnesota Statutes 1997 Supplement, section 148.20 297A.25, subdivision 11, is amended to read: 148.21 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 148.22 all sales, including sales in which title is retained by a 148.23 seller or a vendor or is assigned to a third party under an 148.24 installment sale or lease purchase agreement under section 148.25 465.71, of tangible personal property to, and all storage, use 148.26 or consumption of such property by, the United States and its 148.27 agencies and instrumentalities, the University of Minnesota, 148.28 state universities, community colleges, technical colleges, 148.29 state academies, the Lola and Rudy Perpich Minnesota center for 148.30 arts education,andan instrumentality of a political 148.31 subdivision that is accredited as an optional/special function 148.32 school by the North Central Association of Colleges and Schools, 148.33 school districts, and public libraries, public library systems, 148.34 and multicounty, multitype library systems as defined in section 148.35 134.001, are exempt. 148.36 As used in this subdivision, "school districts" means 149.1 public school entities and districts of every kind and nature 149.2 organized under the laws of the state of Minnesota, including, 149.3 without limitation, school districts, intermediate school 149.4 districts, education districts, service cooperatives, secondary 149.5 vocational cooperative centers, special education cooperatives, 149.6 joint purchasing cooperatives, telecommunication cooperatives, 149.7 regional management information centers, and any instrumentality 149.8 of a school district, as defined in section 471.59. 149.9 Sales exempted by this subdivision include sales under 149.10 section 297A.01, subdivision 3, paragraph (f). 149.11 Sales to hospitals and nursing homes owned and operated by 149.12 political subdivisions of the state are exempt under this 149.13 subdivision. 149.14 The sales to and exclusively for the use of libraries of 149.15 books, periodicals, audio-visual materials and equipment, 149.16 photocopiers for use by the public, and all cataloguing and 149.17 circulation equipment, and cataloguing and circulation software 149.18 for library use are exempt under this subdivision. For purposes 149.19 of this paragraph "libraries" meanslibraries as defined in149.20section 134.001,county law libraries under chapter 134A, the 149.21 state library under section 480.09, and the legislative 149.22 reference library. 149.23 Sales of supplies and equipment used in the operation of an 149.24 ambulance service owned and operated by a political subdivision 149.25 of the state are exempt under this subdivision provided that the 149.26 supplies and equipment are used in the course of providing 149.27 medical care. Sales to a political subdivision of repair and 149.28 replacement parts for emergency rescue vehicles and fire trucks 149.29 and apparatus are exempt under this subdivision. 149.30 Sales to a political subdivision of machinery and 149.31 equipment, except for motor vehicles, used directly for mixed 149.32 municipal solid waste management services at a solid waste 149.33 disposal facility as defined in section 115A.03, subdivision 10, 149.34 are exempt under this subdivision. 149.35 Sales to political subdivisions of chore and homemaking 149.36 services to be provided to elderly or disabled individuals are 150.1 exempt. 150.2 Sales to a town of gravel and of machinery, equipment, and 150.3 accessories, except motor vehicles, used exclusively for road 150.4 and bridge maintenance are exempt. 150.5 Sales of telephone services to the department of 150.6 administration that are used to provide telecommunications 150.7 services through the intertechnologies revolving fund are exempt 150.8 under this subdivision. 150.9 This exemption shall not apply to building, construction or 150.10 reconstruction materials purchased by a contractor or a 150.11 subcontractor as a part of a lump-sum contract or similar type 150.12 of contract with a guaranteed maximum price covering both labor 150.13 and materials for use in the construction, alteration, or repair 150.14 of a building or facility. This exemption does not apply to 150.15 construction materials purchased by tax exempt entities or their 150.16 contractors to be used in constructing buildings or facilities 150.17 which will not be used principally by the tax exempt entities. 150.18 This exemption does not apply to the leasing of a motor 150.19 vehicle as defined in section 297B.01, subdivision 5, except for 150.20 leases entered into by the United States or its agencies or 150.21 instrumentalities. 150.22 The tax imposed on sales to political subdivisions of the 150.23 state under this section applies to all political subdivisions 150.24 other than those explicitly exempted under this subdivision, 150.25 notwithstanding section 115A.69, subdivision 6, 116A.25, 150.26 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 150.27 469.127, 473.448, 473.545, or 473.608 or any other law to the 150.28 contrary enacted before 1992. 150.29 Sales exempted by this subdivision include sales made to 150.30 other states or political subdivisions of other states, if the 150.31 sale would be exempt from taxation if it occurred in that state, 150.32 but do not include sales under section 297A.01, subdivision 3, 150.33 paragraphs (c) and (e). 150.34 Sec. 11. Minnesota Statutes 1996, section 297A.25, is 150.35 amended by adding a subdivision to read: 150.36 Subd. 73. [CONSTRUCTION MATERIALS FOR AN ENVIRONMENTAL 151.1 LEARNING CENTER.] Construction materials and supplies are exempt 151.2 from the tax imposed under this section, regardless of whether 151.3 purchased by the owner or a contractor, subcontractor, or 151.4 builder, if they are used or consumed in constructing or 151.5 improving the Long Lake Conservation Center pursuant to the 151.6 funding provided under Laws 1994, chapter 643, section 23, 151.7 subdivision 28, as amended by Laws 1995, First Special Session 151.8 chapter 2, article 1, section 48; and Laws 1996, chapter 463, 151.9 section 7, subdivision 26. The tax shall be calculated and paid 151.10 as if the rate in section 297A.02, subdivision 1, was in effect 151.11 and a refund applied for in the manner prescribed in section 151.12 297A.15, subdivision 7. 151.13 Sec. 12. Minnesota Statutes 1997 Supplement, section 151.14 297A.256, subdivision 1, is amended to read: 151.15 Subdivision 1. [FUNDRAISING SALES BY NONPROFIT GROUPS.] 151.16 Notwithstanding the provisions of this chapter, the following 151.17 sales made by a "nonprofit organization" are exempt from the 151.18 sales and use tax. 151.19 (a)(1) All sales made by an organization for fundraising 151.20 purposes if that organization exists solely for the purpose of 151.21 providing educational or social activities for young people 151.22 primarily age 18 and under. This exemption shall apply only if 151.23 the gross annual sales receipts of the organization from 151.24 fundraising do not exceed $10,000. 151.25 (2) A club, association, or other organization of 151.26 elementary or secondary school students organized for the 151.27 purpose of carrying on sports, educational, or other 151.28 extracurricular activities is a separate organization from the 151.29 school district or school for purposes of applying the $10,000 151.30 limit. This paragraph does not apply if the sales are derived 151.31 from admission charges or from activities for which the money 151.32 must be deposited with the school district treasurer under 151.33 section 123.38, subdivision 2, or be recorded in the same manner 151.34 as other revenues or expenditures of the school district under 151.35 section 123.38, subdivision 2b. 151.36 (b) All sales made by an organization for fundraising 152.1 purposes if that organization is a senior citizen group or 152.2 association of groups that in general limits membership to 152.3 persons age 55 or older and is organized and operated 152.4 exclusively for pleasure, recreation and other nonprofit 152.5 purposes and no part of the net earnings inure to the benefit of 152.6 any private shareholders. This exemption shall apply only if 152.7 the gross annual sales receipts of the organization from 152.8 fundraising do not exceed $10,000. 152.9 (c) The gross receipts from the sales of tangible personal 152.10 property at, admission charges for, and sales of food, meals, or 152.11 drinks at fundraising events sponsored by a nonprofit 152.12 organization when the entire proceeds, except for the necessary 152.13 expenses therewith, will be used solely and exclusively for 152.14 charitable, religious, or educational purposes. This exemption 152.15 does not apply to admission charges for events involving bingo 152.16 or other gambling activities or to charges for use of amusement 152.17 devices involving bingo or other gambling activities. For 152.18 purposes of this paragraph, a "nonprofit organization" means any 152.19 unit of government, corporation, society, association, 152.20 foundation, or institution organized and operated for 152.21 charitable, religious, educational, civic, fraternal, senior 152.22 citizens' or veterans' purposes, no part of the net earnings of 152.23 which inures to the benefit of a private individual. 152.24 If the profits are not used solely and exclusively for 152.25 charitable, religious, or educational purposes, the entire gross 152.26 receipts are subject to tax. 152.27 Each nonprofit organization shall keep a separate 152.28 accounting record, including receipts and disbursements from 152.29 each fundraising event. All deductions from gross receipts must 152.30 be documented with receipts and other records. If records are 152.31 not maintained as required, the entire gross receipts are 152.32 subject to tax. 152.33 The exemption provided by this paragraph does not apply to 152.34 any sale made by or in the name of a nonprofit corporation as 152.35 the active or passive agent of a person that is not a nonprofit 152.36 corporation. 153.1 The exemption for fundraising events under this paragraph 153.2 is limited to no more than 24 days a year. Fundraising events 153.3 conducted on premises leased for more thanfourfive days but 153.4 less than 30 days do not qualify for this exemption. 153.5 (d) The gross receipts from the sale or use of tickets or 153.6 admissions to a golf tournament held in Minnesota are exempt if 153.7 the beneficiary of the tournament's net proceeds qualifies as a 153.8 tax-exempt organization under section 501(c)(3) of the Internal 153.9 Revenue Code, as amended through December 31, 1994, including a 153.10 tournament conducted on premises leased or occupied for more 153.11 than four days. 153.12 Sec. 13. Minnesota Statutes 1997 Supplement, section 153.13 297A.48, is amended by adding a subdivision to read: 153.14 Subd. 9a. [LOCAL REFERENDUM BEFORE APPLICATION FOR 153.15 AUTHORITY.] Before a political subdivision requests a special 153.16 law for a local sales tax that is administered under this 153.17 section, it shall conduct a referendum on the issue at a general 153.18 election. The commissioner of revenue shall prepare a suggested 153.19 form of question to be presented at the election. The question 153.20 shall include, at minimum, information on the proposed tax rate, 153.21 how the revenues will be used, the total revenue that will be 153.22 raised before the tax expires, and the estimated length of time 153.23 that the tax will be in effect. 153.24 Sec. 14. Minnesota Statutes 1997 Supplement, section 153.25 297B.03, is amended to read: 153.26 297B.03 [EXEMPTIONS.] 153.27 There is specifically exempted from the provisions of this 153.28 chapter and from computation of the amount of tax imposed by it 153.29 the following: 153.30 (1) Purchase or use, including use under a lease purchase 153.31 agreement or installment sales contract made pursuant to section 153.32 465.71, of any motor vehicle by the United States and its 153.33 agencies and instrumentalities and by any person described in 153.34 and subject to the conditions provided in section 297A.25, 153.35 subdivision 18. 153.36 (2) Purchase or use of any motor vehicle by any person who 154.1 was a resident of another state at the time of the purchase and 154.2 who subsequently becomes a resident of Minnesota, provided the 154.3 purchase occurred more than 60 days prior to the date such 154.4 person began residing in the state of Minnesota. 154.5 (3) Purchase or use of any motor vehicle by any person 154.6 making a valid election to be taxed under the provisions of 154.7 section 297A.211. 154.8 (4) Purchase or use of any motor vehicle previously 154.9 registered in the state of Minnesota when such transfer 154.10 constitutes a transfer within the meaning of section 351 or 721 154.11 of the Internal Revenue Code of 1986, as amended through 154.12 December 31, 1988. 154.13 (5) Purchase or use of any vehicle owned by a resident of 154.14 another state and leased to a Minnesota based private or for 154.15 hire carrier for regular use in the transportation of persons or 154.16 property in interstate commerce provided the vehicle is titled 154.17 in the state of the owner or secured party, and that state does 154.18 not impose a sales tax or sales tax on motor vehicles used in 154.19 interstate commerce. 154.20 (6) Purchase or use of a motor vehicle by a private 154.21 nonprofit or public educational institution for use as an 154.22 instructional aid in automotive training programs operated by 154.23 the institution. "Automotive training programs" includes motor 154.24 vehicle body and mechanical repair courses but does not include 154.25 driver education programs. 154.26 (7) Purchase of a motor vehicle for use as an ambulance by 154.27 an ambulance service licensed under section 144E.10. 154.28 (8) Purchase of a motor vehicle by or for a public library, 154.29 as defined in section 134.001, subdivision 2, as a bookmobile or 154.30 library delivery vehicle. 154.31 (9) Purchase of a ready-mixed concrete truck. 154.32 (10) Purchase or use of a motor vehicle by a town for use 154.33 exclusively for road maintenance, including snowplows and dump 154.34 trucks, but not including automobiles, vans, or pickup trucks. 154.35 Sec. 15. Minnesota Statutes 1997 Supplement, section 154.36 297G.01, is amended by adding a subdivision to read: 155.1 Subd. 3a. [CIDER.] "Cider" means a product that contains 155.2 not less than one-half of one percent nor more than seven 155.3 percent alcohol by volume and is made from the alcoholic 155.4 fermentation of the juice of apples. Cider includes, but is not 155.5 limited to, flavored, sparkling, and carbonated cider. 155.6 Sec. 16. Minnesota Statutes 1997 Supplement, section 155.7 297G.03, subdivision 1, is amended to read: 155.8 Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 155.9 The following excise tax is imposed on all distilled spirits and 155.10 wine manufactured, imported, sold, or possessed in this state: 155.11 Standard Metric 155.12 (a) Distilled spirits, $5.03 per gallon $1.33 per liter 155.13 liqueurs, cordials, 155.14 and specialties regardless 155.15 of alcohol content 155.16 (excluding ethyl alcohol) 155.17 (b) Wine containing $ .30 per gallon $ .08 per liter 155.18 14 percent or less 155.19 alcohol by volume 155.20 (except cider as defined 155.21 in section 297G.01, 155.22 subdivision 3a) 155.23 (c) Wine containing $ .95 per gallon $ .25 per liter 155.24 more than 14 percent 155.25 but not more than 21 155.26 percent alcohol by volume 155.27 (d) Wine containing more $1.82 per gallon $ .48 per liter 155.28 than 21 percent but not 155.29 more than 24 percent 155.30 alcohol by volume 155.31 (e) Wine containing more $3.52 per gallon $ .93 per liter 155.32 than 24 percent alcohol 155.33 by volume 155.34 (f) Natural and $1.82 per gallon $ .48 per liter 155.35 artificial sparkling wines 155.36 containing alcohol 156.1 (g) Cider as defined in $ .15 per gallon $ .04 per liter 156.2 section 297G.01, 156.3 subdivision 3a 156.4 In computing the tax on a package of distilled spirits or 156.5 wine, a proportional tax at a like rate on all fractional parts 156.6 of a gallon or liter must be paid, except that the tax on a 156.7 fractional part of a gallon less than 1/16 of a gallon is the 156.8 same as for 1/16 of a gallon. 156.9 Sec. 17. Laws 1980, chapter 511, section 2, is amended to 156.10 read: 156.11 Sec. 2. [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND 156.12 MOTELS.] 156.13 Notwithstanding Minnesota Statutes, Section 477A.01, 156.14 Subdivision 18, or any other law, or ordinance, or city charter 156.15 provision to the contrary, the city of Duluth may, by ordinance, 156.16 impose an additional tax ofonetwo percent upon the gross 156.17 receipts from the sale of lodging for periods of less than 30 156.18 days in hotels and motels located in the city. The tax shall be 156.19 collected in the same manner as the tax set forth in the Duluth 156.20 city charter, section 54(d), paragraph one. The imposition of 156.21 this tax shall not be subject to voter referendum under either 156.22 state law or city charter provisions. 156.23 Sec. 18. Laws 1980, chapter 511, section 3, is amended to 156.24 read: 156.25 Sec. 3. [ALLOCATION OF REVENUES.] 156.26 Revenues received from the taxes authorized by section 1, 156.27 subdivision 2, and section 2 shall be used to pay for activities 156.28 conducted by the city or by other organizations which promote 156.29 tourism in the city of Duluth, including capital improvements of 156.30 tourism facilities, and to subsidize the Duluth Arena-Auditorium 156.31 and the Spirit Mountain recreation authority. Distribution of 156.32 the revenues derived from these taxes shall be approved by the 156.33 Duluth city council at least once annually, may include pledging 156.34 such revenues to pay principal of and interest on city of Duluth 156.35 bonds issued to finance such tourism facilities, and shall be 156.36 made in accordance with the policy set forth in this section. 157.1 Sec. 19. Laws 1992, chapter 511, article 8, section 33, 157.2 subdivision 5, is amended to read: 157.3 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed 157.4 pursuant to subdivisions 1 and 2 shall terminate at the later of 157.5 (1) December 31, 1998, or (2) on the first day of the second 157.6 month next succeeding a determination by the city council that 157.7 sufficient funds have been received from the taxes to finance 157.8 capital and administrative costs of $28,760,000 for improvements 157.9 for fire station, city hall, and public library facilities and 157.10 to prepay or retire at maturity the principal, interest, and 157.11 premium due on any bonds issued for the improvements. Any funds 157.12 remaining after completion of the improvements and retirement or 157.13 redemption of the bonds may be placed in the general fund of the 157.14 city. 157.15 Sec. 20. Laws 1997, chapter 231, article 7, section 47, is 157.16 amended to read: 157.17 Sec. 47. [EFFECTIVE DATES.] 157.18 Section 1 is effective for refund claims filed after June 157.19 30, 1997. 157.20 Sections 2, 6, 7, 9, 13, 15, 16, 17, 18,20,21, 25, 31, 157.21 and 32 are effective for purchases, sales, storage, use, or 157.22 consumption occurring after June 30, 1997. 157.23 Section 3 is effective on July 1, 1997, or upon adoption of 157.24 the corresponding rules, whichever occurs earlier. 157.25 Section 4, paragraph (i), clause (iv), is effective for 157.26 purchases and sales occurring after September 30, 1987; the 157.27 remainder of section 4 is effective for purchases and sales 157.28 occurring after June 30, 1997. 157.29 Section 5, paragraph (h), is effective for purchases and 157.30 sales occurring after June 30, 1997, and paragraph (i) is 157.31 effective for purchases and sales occurring after December 31, 157.32 1992. 157.33 Sections 8 and 46 are effective July 1, 1998. 157.34 Sections 10 and 22 are effective for purchases, sales, 157.35 storage, use, or consumption occurring after August 31, 1996. 157.36 Sections 11, 12, 33, 34, and 35 are effective July 1, 1997. 158.1SectionsSection 14and 19 areis effective for purchases 158.2 and sales after June 30,19991998. 158.3 Section 19 is effective for purchases and sales after June 158.4 30, 1999. 158.5 Section 20 is effective for sales and purchases occurring 158.6 after December 31, 1995. 158.7 Section 23 is effective January 1, 1997. 158.8 Section 24 is effective for purchases, sales, storage, use, 158.9 or consumption occurring after April 30, 1997. 158.10 Sections 26 and 45 are effective for purchases, sales, 158.11 storage, use, or consumption occurring after July 31, 1997, and 158.12 before August 1, 2003. 158.13 Section 27 is effective for purchases, sales, storage, use, 158.14 or consumption occurring after May 31, 1997. 158.15 Section 28 is effective for sales made after December 31, 158.16 1989, and before January 1, 1997. The provisions of Minnesota 158.17 Statutes, section 289A.50, apply to refunds claimed under 158.18 section 28. Refunds claimed under section 28 must be filed by 158.19 the later of December 31, 1997, or the time limit under 158.20 Minnesota Statutes, section 289A.40, subdivision 1. 158.21 Section 29 is effective for sales or first use after May 158.22 31, 1997, and beforeJune 1, 1998January 1, 2006. 158.23 Sections 30, 42, and 43 are effective the day following 158.24 final enactment. 158.25 Sections 36 to 39 are effective the day after compliance by 158.26 the governing body of Cook county with Minnesota Statutes, 158.27 section 645.021, subdivision 3. 158.28 Section 40 is effective for STAR funds collected after June 158.29 30, 1997. 158.30 Sec. 21. [TRANSFER OF TRAVEL TRAILERS EXEMPTED.] 158.31 Notwithstanding the provisions of Minnesota Statutes, 158.32 chapter 297B, any transfer of title of a travel trailer from the 158.33 Federal Emergency Management Agency to the state of Minnesota 158.34 and any subsequent transfer of title of the trailer to a 158.35 political subdivision of the state shall be exempt from the tax 158.36 imposed under Minnesota Statutes, chapter 297B. 159.1 Sec. 22. [CITY OF BEMIDJI.] 159.2 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 159.3 Notwithstanding Minnesota Statutes, section 477A.016, or any 159.4 other provision of law, ordinance, or city charter, if approved 159.5 by the city voters at a general election held within one year of 159.6 the date of final enactment of this act, the city of Bemidji may 159.7 impose by ordinance a sales and use tax of up to one-half of one 159.8 percent for the purposes specified in subdivision 3. The 159.9 provisions of Minnesota Statutes, section 297A.48, govern the 159.10 imposition, administration, collection, and enforcement of the 159.11 tax authorized under this subdivision. 159.12 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 159.13 Minnesota Statutes, section 477A.016, or any other provision of 159.14 law, ordinance, or city charter, if a sales and use tax is 159.15 imposed under subdivision 1, the city of Bemidji may impose by 159.16 ordinance, for the purpose specified in subdivision 3, an excise 159.17 tax of up to $20 per motor vehicle, as defined by ordinance, 159.18 purchased or acquired from any person engaged within the city in 159.19 the business of selling motor vehicles at retail. 159.20 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 159.21 authorized by subdivisions 1 and 2 must be used by the city to 159.22 pay the cost of collecting the taxes and to pay all or part of 159.23 the capital and administrative cost of constructing facilities 159.24 as part of a regional convention center in Bemidji. Authorized 159.25 expenses include, but are not limited to, acquiring property and 159.26 paying construction expenses related to the development of a 159.27 convention center which is an arena for sporting events, 159.28 concerts, trade shows, conventions, meeting rooms, and other 159.29 compatible uses including, but not limited to, parking, 159.30 lighting, and landscaping. 159.31 Subd. 4. [BONDS.] If approved by the city voters at a 159.32 general election held within one year of the date of final 159.33 enactment of this act, the city of Bemidji may issue, without 159.34 additional election, general obligation bonds of the city in an 159.35 amount not to exceed $25,000,000 to pay capital and 159.36 administrative expenses for the acquisition and construction of 160.1 a convention center. The debt represented by the bonds must not 160.2 be included in computing any debt limitations applicable to the 160.3 city, and the levy of taxes required by Minnesota Statutes, 160.4 section 475.61, to pay the principal or any interest on the 160.5 bonds must not be subject to any levy limitations or be included 160.6 in computing or applying any levy limitation applicable to the 160.7 city. 160.8 Subd. 5. [NO PLEDGE TO DEBT.] Revenues received from the 160.9 tax authorized under this section may not be pledged or 160.10 obligated to the payment of bonds or other debt obligations. 160.11 This restriction does not prohibit the issuance of bonds, 160.12 secured by other revenue sources including property taxes, to 160.13 pay for the improvements which may be funded with revenues from 160.14 the taxes under this section. Revenues from the taxes may be 160.15 used to pay the obligations, but repeal or reduction of the tax 160.16 does not violate contractual obligations under the bonds or 160.17 other debt obligations. 160.18 Subd. 6. [TERMINATION OF TAXES.] The taxes imposed under 160.19 subdivisions 1 and 2 expire when the city council determines 160.20 that sufficient funds have been received from taxes to finance 160.21 the capital and administrative costs for acquisition and 160.22 construction of a convention center and related facilities to 160.23 repay or retire at maturity the principal, interest, and premium 160.24 due on any bonds issued for the project under subdivision 4. 160.25 Any funds remaining after completion of the project and 160.26 retirement or redemption of the bonds may be placed in the 160.27 general fund of the city. The taxes imposed under subdivisions 160.28 1 and 2 may expire at an earlier time if the city so determines 160.29 by ordinance. 160.30 Subd. 7. [EFFECTIVE DATE.] This section is effective the 160.31 day after compliance by the governing body of the city of 160.32 Bemidji with Minnesota Statutes, section 645.021, subdivision 3. 160.33 Sec. 23. [CITY OF COON RAPIDS; TAXES AUTHORIZED.] 160.34 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 160.35 Notwithstanding Minnesota Statutes, section 477A.016, or any 160.36 other contrary provision of law, ordinance, or city charter, the 161.1 city of Coon Rapids may, by ordinance, impose an additional 161.2 sales and use tax of up to one-half of one percent for the 161.3 purposes specified in subdivision 3. The provisions of 161.4 Minnesota Statutes, section 297A.48, govern the imposition, 161.5 administration, collection, and enforcement of the tax 161.6 authorized under this subdivision. 161.7 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 161.8 Minnesota Statutes, section 477A.016, or any other contrary 161.9 provision of law, ordinance, or city charter, the city of Coon 161.10 Rapids may impose, for the purposes specified in subdivision 3, 161.11 an excise tax of up to $20 per motor vehicle, as defined, 161.12 purchased or acquired from any person engaged within the city in 161.13 the business of selling motor vehicles at retail. 161.14 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 161.15 authorized by subdivisions 1 and 2 must be used by the city to 161.16 pay the costs of collecting the taxes and to pay all or part of 161.17 the capital and administrative costs, not to exceed $11,000,000, 161.18 for infrastructure improvements related to the Riverdale 161.19 regional economic development project. Authorized expenses 161.20 include, but are not limited to, acquiring property and paying 161.21 construction and administrative costs of the infrastructure 161.22 improvements and paying debt service on bonds or other 161.23 obligations issued to finance the infrastructure improvements. 161.24 Subd. 4. [REFERENDUM.] If the governing body of the city 161.25 of Coon Rapids intends to impose the taxes authorized by this 161.26 section, it shall conduct a referendum on the issue. The 161.27 question of imposing the tax must be submitted to the voters at 161.28 a general election within one year of the date of final 161.29 enactment of this act. The taxes may not be imposed unless a 161.30 majority of votes cast on the question of imposing the taxes are 161.31 in the affirmative. The commissioner of revenue shall prepare a 161.32 suggested form of question to be presented at the election. 161.33 Subd. 5. [BONDS.] Pursuant to the approval of the city 161.34 voters under subdivision 4, the city of Coon Rapids may issue, 161.35 without additional election, general obligation bonds of the 161.36 city in an amount not to exceed $11,000,000 to pay the capital 162.1 and administrative expenses of the project authorized in 162.2 subdivision 3. The debt represented by the bonds must not be 162.3 included in computing any debt limitations applicable to the 162.4 city, and the levy of taxes required by Minnesota Statutes, 162.5 section 475.61, to pay the principal and interest on the bonds 162.6 must not be subject to any levy limitation or be included in 162.7 computing or applying any levy limitation applicable to the city. 162.8 Subd. 6. [NO PLEDGE TO DEBT.] Revenues received from the 162.9 tax authorized under this section may not be pledged or 162.10 obligated to the payment of bonds or other debt obligations. 162.11 This restriction does not prohibit the issuance of bonds, 162.12 secured by other revenue sources including property taxes, to 162.13 pay for the improvements which may be funded with revenues from 162.14 the taxes under this section. Revenues from the taxes may be 162.15 used to pay the obligations, but repeal or reduction of the tax 162.16 does not violate contractual obligations under the bonds or 162.17 other debt obligations. 162.18 Subd. 7. [TERMINATION OF TAXES.] The taxes imposed under 162.19 subdivisions 1 and 2 expire when the city council determines 162.20 that sufficient funds have been received from the taxes to 162.21 finance the capital and administrative costs of the project in 162.22 subdivision 3 and to prepay or retire at maturity the principal, 162.23 interest, and premium due on any bonds issued for the project. 162.24 Any funds remaining after completion of the project or 162.25 retirement or redemption of the bonds may be placed in the 162.26 general fund of the city. 162.27 Subd. 8. [EFFECTIVE DATE.] This section is effective the 162.28 day after compliance by the governing body of the city of Coon 162.29 Rapids with Minnesota Statutes, section 645.021, subdivision 3. 162.30 Sec. 24. [CITY OF DETROIT LAKES.] 162.31 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 162.32 Notwithstanding Minnesota Statutes, section 477A.016, or any 162.33 other contrary provision of law, ordinance, or city charter, the 162.34 city of Detroit Lakes may, by ordinance, impose an additional 162.35 sales and use tax of up to one-half of one percent for the 162.36 purposes specified in subdivision 3. The provisions of 163.1 Minnesota Statutes, section 297A.48, govern the imposition, 163.2 administration, collection, and enforcement of the tax 163.3 authorized under this subdivision. 163.4 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 163.5 Minnesota Statutes, section 477A.016, or any other contrary 163.6 provision of law, ordinance, or city charter, the city of 163.7 Detroit Lakes may impose, by ordinance, for the purposes 163.8 specified in subdivision 3, an excise tax of up to $20 per motor 163.9 vehicle, as defined by ordinance, purchased or acquired from any 163.10 person engaged within the city in the business of selling motor 163.11 vehicles at retail. 163.12 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 163.13 authorized by subdivisions 1 and 2 must be used by the city to 163.14 pay the costs of collecting the taxes and to pay all or part of 163.15 the capital and administrative costs, up to $6,000,000, for 163.16 constructing a community center. Authorized expenses include, 163.17 but are not limited to, acquiring property and paying 163.18 construction and operating expenses related to the development 163.19 of the community center and paying debt service on bonds or 163.20 other obligations issued to finance the construction of the 163.21 community center. 163.22 Subd. 4. [REFERENDUM.] If the governing body of the city 163.23 of Detroit Lakes intends to impose the taxes authorized by this 163.24 section, it shall conduct a referendum on the issue. The 163.25 question of imposing the tax must be submitted to the voters at 163.26 a general election within one year of the date of final 163.27 enactment of this act. The taxes may not be imposed unless a 163.28 majority of votes cast on the question of imposing the taxes are 163.29 in the affirmative. The commissioner of revenue shall prepare a 163.30 suggested form of question to be presented at the election. 163.31 Subd. 5. [NO PLEDGE TO DEBT.] Revenues received from the 163.32 tax authorized under this section may not be pledged or 163.33 obligated to the payment of bonds or other debt obligations. 163.34 This restriction does not prohibit the issuance of bonds, 163.35 secured by other revenue sources including property taxes, to 163.36 pay for the improvements which may be funded with revenues from 164.1 the taxes under this section. Revenues from the taxes may be 164.2 used to pay the obligations, but repeal or reduction of the tax 164.3 does not violate contractual obligations under the bonds or 164.4 other debt obligations. 164.5 Subd. 6. [TERMINATION OF TAXES.] The taxes imposed under 164.6 subdivisions 1 and 2 expire when the city council determines 164.7 that sufficient funds have been received from the taxes to 164.8 finance the capital and administrative costs for constructing 164.9 the community center and to prepay or retire at maturity the 164.10 principal, interest, and premium due on any bonds issued for the 164.11 construction. Any funds remaining after completion of the 164.12 project or retirement or redemption of the bonds may be placed 164.13 in the general fund of the city. 164.14 Subd. 7. [EFFECTIVE DATE.] This section is effective the 164.15 day after compliance by the governing body of the city of 164.16 Detroit Lakes with Minnesota Statutes, section 645.021, 164.17 subdivision 3. 164.18 Sec. 25. [CITY OF FERGUS FALLS.] 164.19 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 164.20 Notwithstanding Minnesota Statutes, section 477A.016, or any 164.21 other provision of law, ordinance, or city charter, if approved 164.22 by the city voters at the next general election after final 164.23 enactment of this act, the city of Fergus Falls may impose by 164.24 ordinance a sales and use tax of up to one-half of one percent 164.25 for the purposes specified in subdivision 3. The provisions of 164.26 Minnesota Statutes, section 297A.48, govern the imposition, 164.27 administration, collection, and enforcement of the tax 164.28 authorized under this subdivision. 164.29 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 164.30 Minnesota Statutes, section 477A.016, or any other provision of 164.31 law, ordinance, or city charter, if a sales and use tax is 164.32 imposed under subdivision 1, the city of Fergus Falls may impose 164.33 by ordinance, for the purposes specified in subdivision 3, an 164.34 excise tax of up to $20 per motor vehicle, as defined by 164.35 ordinance, purchased or acquired from any person engaged within 164.36 the city in the business of selling motor vehicles at retail. 165.1 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 165.2 authorized by subdivisions 1 and 2 must be used by the city to 165.3 pay the costs of collecting the taxes and to pay all or part of 165.4 the capital and administrative costs of constructing facilities 165.5 as part of a regional conference center, community center, 165.6 recreational and tourism project in Fergus Falls known as 165.7 Project Reach Out. Authorized expenses include, but are not 165.8 limited to, acquiring property and paying construction and 165.9 operating expenses related to the development of Project Reach 165.10 Out and related facilities, and paying debt service on bonds or 165.11 other obligations issued to finance the construction of Project 165.12 Reach Out and related facilities. 165.13 For purposes of this section, "Project Reach Out and 165.14 related facilities" means a regional conference center, 165.15 community center, regional park and recreational facilities, and 165.16 all publicly owned real or personal property that the governing 165.17 body of the city determines are necessary to facilitate the use 165.18 of these facilities, including but not limited to, parking, 165.19 pedestrian bridges, lighting, and landscaping. 165.20 Subd. 4. [BONDS.] If approved by the city voters at the 165.21 next general election after final enactment of this act, the 165.22 city of Fergus Falls may issue without additional election 165.23 general obligation bonds of the city in an amount up to 165.24 $9,000,000 as needed to pay capital and administrative expenses 165.25 for the acquisition, construction, improvement, and maintenance 165.26 of Project Reach Out and related facilities. The debt 165.27 represented by the bonds must not be included in computing any 165.28 debt limitations applicable to the city, and the levy of taxes 165.29 required by Minnesota Statutes, section 475.61, to pay the 165.30 principal or any interest on the bonds must not be subject to 165.31 any levy limitation or be included in computing or applying any 165.32 levy limitation applicable to the city. 165.33 Subd. 5. [NO PLEDGE TO DEBT.] Revenues received from the 165.34 tax authorized under this section may not be pledged or 165.35 obligated to the payment of bonds or other debt obligations. 165.36 This restriction does not prohibit the issuance of bonds, 166.1 secured by other revenue sources including property taxes, to 166.2 pay for the improvements which may be funded with revenues from 166.3 the taxes under this section. Revenues from the taxes may be 166.4 used to pay the obligations, but repeal or reduction of the tax 166.5 does not violate contractual obligations under the bonds or 166.6 other debt obligations. 166.7 Subd. 6. [TERMINATION OF TAXES.] The taxes imposed under 166.8 subdivisions 1 and 2 expire when the city determines that 166.9 sufficient funds have been received from the taxes to finance 166.10 the capital and administrative costs for acquisition, 166.11 construction, improvement, and operation of Project Reach Out 166.12 and related facilities and to prepay or retire at maturity the 166.13 principal, interest, and premium due on any bonds issued for the 166.14 project under subdivision 4. Any funds remaining after 166.15 completion of the project and retirement or redemption of the 166.16 bonds may be placed in the general fund of the city. The taxes 166.17 imposed under subdivisions 1 and 2 may expire at an earlier time 166.18 if the city so determines by ordinance. 166.19 Subd. 7. [EFFECTIVE DATE.] This section is effective the 166.20 day after compliance by the governing body of the city of Fergus 166.21 Falls with Minnesota Statutes, section 645.021, subdivision 3. 166.22 Sec. 26. [CITY OF HUTCHINSON; TAXES AUTHORIZED.] 166.23 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 166.24 Minnesota Statutes, section 477A.016, or any other provision of 166.25 law, ordinance, or city charter, the city of Hutchinson may 166.26 impose by ordinance a sales and use tax of up to one-half of one 166.27 percent for the purposes specified in subdivision 3. The 166.28 provisions of Minnesota Statutes, section 297A.48, govern the 166.29 imposition, administration, collection, and enforcement of the 166.30 tax authorized under this subdivision. 166.31 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 166.32 Minnesota Statutes, section 477A.016, or any other provision of 166.33 law, ordinance, or city charter, the city of Hutchinson may 166.34 impose by ordinance, for the purposes specified in subdivision 166.35 3, an excise tax of up to $20 per motor vehicle, as defined by 166.36 ordinance, purchased or acquired from any person engaged within 167.1 the city in the business of selling motor vehicles at retail. 167.2 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 167.3 authorized by subdivisions 1 and 2 must be used by the city to 167.4 pay the cost of collecting the taxes and to pay for construction 167.5 and improvement of a civic and community center and recreational 167.6 facilities to serve seniors and youth. Authorized expenses 167.7 include, but are not limited to, acquiring property, paying 167.8 construction and operating expenses related to the development 167.9 of an authorized facility, and paying debt service on bonds or 167.10 other obligations issued to finance the construction or 167.11 expansion of an authorized facility. The capital expenses for 167.12 all projects authorized under this paragraph that may be paid 167.13 with these taxes is limited to $5,000,000. 167.14 Subd. 4. [REFERENDUM.] If the Hutchinson city council 167.15 intends to exercise the authority provided in subdivisions 1 and 167.16 2, it shall conduct a referendum on the issue. The question, 167.17 which shall seek simultaneous approval for imposing both taxes, 167.18 must be submitted to the voters at a general election within one 167.19 year of the date of final enactment of this act. The taxes may 167.20 not be imposed unless a majority of votes cast on the question 167.21 of imposing the taxes is in the affirmative. The commissioner 167.22 of revenue shall prepare a suggested form of question to be 167.23 presented at the election. This subdivision applies 167.24 notwithstanding any city charter provision to the contrary. 167.25 Subd. 5. [BONDS.] If the taxes are approved by the city 167.26 voters as provided in subdivision 4, the city of Hutchinson may 167.27 issue, without additional election, general obligation bonds of 167.28 the city in an amount equal to $5,000,000 to pay capital and 167.29 administrative expenses for the acquisition, construction, 167.30 improvement, and maintenance of the facilities listed in 167.31 subdivision 3. The debt represented by the bonds must not be 167.32 included in computing any debt limitations applicable to the 167.33 city. The levy of taxes required by Minnesota Statutes, section 167.34 475.61, to pay the principal or any interest on the bonds must 167.35 not be subject to any levy limitation or be included in 167.36 computing or applying any levy limitation applicable to the city. 168.1 Subd. 6. [NO PLEDGE TO DEBT.] Revenues received from the 168.2 tax authorized under this section may not be pledged or 168.3 obligated to the payment of bonds or other debt obligations. 168.4 This restriction does not prohibit the issuance of bonds, 168.5 secured by other revenue sources including property taxes, to 168.6 pay for the improvements which may be funded with revenues from 168.7 the taxes under this section. Revenues from the taxes may be 168.8 used to pay the obligations, but repeal or reduction of the tax 168.9 does not violate contractual obligations under the bonds or 168.10 other debt obligations. 168.11 Subd. 7. [TERMINATION OF TAXES.] The taxes imposed under 168.12 subdivisions 1 and 2 expire when the city council determines 168.13 that sufficient funds have been received from the taxes to 168.14 finance the capital and administrative costs for the 168.15 acquisition, construction, and improvement of facilities 168.16 described in subdivision 3, and to prepay or retire at maturity 168.17 the principal, interest, and premium due on any bonds issued for 168.18 the facilities under subdivision 5. Any funds remaining after 168.19 completion of the project and retirement or redemption of the 168.20 bonds may be placed in the general fund of the city. The taxes 168.21 imposed under subdivisions 1 and 2 may expire at an earlier time 168.22 if the city so determines by ordinance. 168.23 Subd. 8. [EFFECTIVE DATE.] This section is effective the 168.24 day after compliance by the governing body of the city of 168.25 Hutchinson with Minnesota Statutes, section 645.021, subdivision 168.26 3. 168.27 Sec. 27. [CITY OF OWATONNA; SALES AND USE TAX.] 168.28 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 168.29 Notwithstanding Minnesota Statutes, section 477A.016, or any 168.30 other provision of law, ordinance, or city charter, if approved 168.31 by the city voters at the next general election after final 168.32 enactment of this act, the city of Owatonna may impose by 168.33 ordinance a sales and use tax of up to one-half of one percent 168.34 for the purposes specified in subdivision 3. The provisions of 168.35 Minnesota Statutes, section 297A.48, govern the imposition, 168.36 administration, collection, and enforcement of the tax 169.1 authorized under this subdivision. 169.2 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 169.3 Minnesota Statutes, section 477A.016, or any other provision of 169.4 law, ordinance, or city charter, if a sales and use tax is 169.5 imposed under subdivision 1, the city of Owatonna may impose by 169.6 ordinance, for the purposes specified in subdivision 3, an 169.7 excise tax of up to $20 per motor vehicle, as defined by 169.8 ordinance, purchased or acquired from any person engaged within 169.9 the city in the business of selling motor vehicles at retail. 169.10 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 169.11 authorized by subdivisions 1 and 2 must be used by the city to 169.12 pay the costs of collecting the taxes and to pay all or part of 169.13 the capital and administrative costs of constructing and 169.14 improving infrastructure and facilities as part of Owatonna 169.15 Economic Development 2000 and related facilities. Authorized 169.16 expenses include, but are not limited to, acquiring property and 169.17 paying construction and operating expenses related to the 169.18 development of Owatonna Economic Development 2000 and related 169.19 facilities, and paying debt service on bonds or other 169.20 obligations issued to finance the construction of Owatonna 169.21 Economic Development 2000 and related facilities. 169.22 For purposes of this section, "Owatonna Economic 169.23 Development 2000 and related facilities" means the improvement 169.24 of the Owatonna regional airport and infrastructure 169.25 improvements, including roads and the extension of water and 169.26 sewer services, for an economic and tourism project. 169.27 Subd. 4. [BONDS.] If the taxes are approved by the city 169.28 voters as provided in subdivision 1, the city of Owatonna may 169.29 issue without additional election general obligation bonds of 169.30 the city in an amount not to exceed $5,000,000 to pay capital 169.31 and administrative expenses for the acquisition, construction, 169.32 improvement, and maintenance of Owatonna Economic Development 169.33 2000 and related facilities. The debt represented by the bonds 169.34 must not be included in computing any debt limitations 169.35 applicable to the city, and the levy of taxes required by 169.36 Minnesota Statutes, section 475.61, to pay the principal and any 170.1 interest on the bonds must not be subject to any levy limitation 170.2 or be included in computing or applying any levy limitation 170.3 applicable to the city. 170.4 Subd. 5. [NO PLEDGE TO DEBT.] Revenues received from the 170.5 tax authorized under this section may not be pledged or 170.6 obligated to the payment of bonds or other debt obligations. 170.7 This restriction does not prohibit the issuance of bonds, 170.8 secured by other revenue sources including property taxes, to 170.9 pay for the improvements which may be funded with revenues from 170.10 the taxes under this section. Revenues from the taxes may be 170.11 used to pay the obligations, but repeal or reduction of the tax 170.12 does not violate contractual obligations under the bonds or 170.13 other debt obligations. 170.14 Subd. 6. [TERMINATION OF TAXES.] The taxes imposed under 170.15 subdivisions 1 and 2 expire when the city council determines 170.16 that sufficient funds have been received from the taxes to 170.17 finance the capital and administrative costs for acquisition, 170.18 construction, and improvement of Owatonna Economic Development 170.19 2000 and related facilities and to prepay or retire at maturity 170.20 the principal, interest, and premium due on any bonds issued for 170.21 the project under subdivision 4. Any funds remaining after 170.22 completion of the project and retirement or redemption of the 170.23 bonds may be placed in the general fund of the city. The taxes 170.24 imposed under subdivisions 1 and 2 may expire at an earlier time 170.25 if the city so determines by ordinance. 170.26 Subd. 7. [EFFECTIVE DATE.] This section is effective the 170.27 day after compliance by the governing body of the city of 170.28 Owatonna with Minnesota Statutes, section 645.021, subdivision 3. 170.29 Sec. 28. [CITY OF ROCHESTER; TAXES.] 170.30 Subdivision 1. [SALES AND USE TAXES AUTHORIZED.] 170.31 Notwithstanding Minnesota Statutes, section 477A.016, or any 170.32 other contrary provision of law, ordinance, or city charter, 170.33 upon termination of the taxes authorized under Laws 1992, 170.34 chapter 511, article 8, section 33, subdivision 1, the city of 170.35 Rochester may, by ordinance, impose an additional sales and use 170.36 tax of up to one-half of one percent. The provisions of 171.1 Minnesota Statutes, section 297A.48, govern the imposition, 171.2 administration, collection, and enforcement of the tax 171.3 authorized under this subdivision. 171.4 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 171.5 Minnesota Statutes, section 477A.016, or any other contrary 171.6 provision of law, ordinance, or city charter, upon termination 171.7 of the tax authorized under Laws 1992, chapter 511, article 8, 171.8 section 33, subdivision 2, the city of Rochester may, by 171.9 ordinance, impose an excise tax of up to $20 per motor vehicle, 171.10 as defined by ordinance, purchased or acquired from any person 171.11 engaged within the city in the business of selling motor 171.12 vehicles at retail. 171.13 Subd. 3. [USE OF REVENUES.] Revenues received from the 171.14 taxes authorized by subdivisions 1 and 2 must be used by the 171.15 city to pay for the cost of collecting and administering the 171.16 taxes and to pay for the following projects: 171.17 (1) transportation infrastructure improvements including 171.18 both highway and airport improvements; 171.19 (2) improvements to the civic center complex; 171.20 (3) improvements to public safety and the dispatch system; 171.21 (4) a municipal water, sewer, and storm sewer project 171.22 necessary to improve regional ground water quality; and 171.23 (5) construction of a regional recreation and sports center 171.24 and associated facilities available for both community and 171.25 student use, located adjacent to the Rochester center. 171.26 The total amount of capital expenditures or bonds for these 171.27 projects that may be paid from the revenues raised from the 171.28 taxes authorized in this section may not exceed $76,000,000. 171.29 The amount of revenue raised from the taxes in this section that 171.30 is spent on the project in clause (5) shall not exceed 25 171.31 percent of the total revenue. 171.32 Subd. 4. [REFERENDUM.] If the Rochester city council 171.33 intends to exercise the authority provided in subdivisions 1 and 171.34 2, it shall conduct a referendum on the issue. The referendum, 171.35 which must be approved by the majority of votes cast on the 171.36 question of imposing the tax, must occur at a general election 172.1 within one year of the date of final enactment of this act. 172.2 Subd. 5. [NO PLEDGE TO DEBT.] Revenues received from the 172.3 tax authorized under this section may not be pledged or 172.4 obligated to the payment of bonds or other debt obligations. 172.5 This restriction does not prohibit the issuance of bonds, 172.6 secured by other revenue sources including property taxes, to 172.7 pay for the improvements which may be funded with revenues from 172.8 the taxes under this section. Revenues from the taxes may be 172.9 used to pay the obligations, but repeal or reduction of the tax 172.10 does not violate contractual obligations under the bonds or 172.11 other debt obligations. 172.12 Subd. 6. [TERMINATION OF TAXES.] The taxes imposed under 172.13 subdivisions 1 and 2 expire when the city council determines 172.14 that sufficient funds have been received from the taxes to 172.15 finance the projects and to prepay or retire at maturity the 172.16 principal, interest, and premium due on any bonds issued for the 172.17 projects under subdivision 3. Any funds remaining after 172.18 completion of the project and retirement or redemption of the 172.19 bonds may be placed in the general fund of the city. The taxes 172.20 imposed under subdivisions 1 and 2 may expire at an earlier time 172.21 if the city so determines by ordinance. 172.22 Subd. 7. [EFFECTIVE DATE.] This section is effective the 172.23 day after compliance by the governing body of the city of 172.24 Rochester with Minnesota Statutes, section 645.021, subdivision 172.25 3. 172.26 Sec. 29. [CENTRAL MINNESOTA EVENTS CENTER; LOCAL OPTION 172.27 TAXES.] 172.28 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 172.29 Notwithstanding Minnesota Statutes, section 477A.016, or any 172.30 other provision of law, ordinance, or city charter, the cities 172.31 of St. Cloud, Sauk Rapids, Sartell, Waite Park, and St. Joseph 172.32 may impose by ordinance a sales and use tax of up to one-half of 172.33 one percent for the purposes specified in subdivision 3. The 172.34 provisions of Minnesota Statutes, section 297A.48, govern the 172.35 imposition, administration, collection, and enforcement of the 172.36 taxes authorized under this subdivision. 173.1 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 173.2 Minnesota Statutes, section 477A.016, or any other provision of 173.3 law, ordinance, or city charter, the cities identified in 173.4 subdivision 1 may impose by ordinance, for the purposes 173.5 specified in subdivision 3, an excise tax of up to $20 per motor 173.6 vehicle acquired from any person engaged within the city in the 173.7 business of selling motor vehicles at retail. 173.8 Subd. 3. [USE OF REVENUES.] Revenues received from the 173.9 taxes authorized by subdivisions 1 and 2 must be used to pay for 173.10 the cost of collecting the taxes; to pay all or part of the 173.11 capital or administrative cost of the acquisition, construction, 173.12 and improvement of the Central Minnesota Events Center and 173.13 related on-site and off-site improvements. Authorized expenses 173.14 related to acquisition, construction, and improvement of the 173.15 center include, but are not limited to, acquiring property, 173.16 paying construction and operating expenses related to the 173.17 development of the facility, and paying debt service on bonds or 173.18 other obligations issued to finance construction or improvement 173.19 of the authorized facility. 173.20 Subd. 4. [LODGING TAXES; USE OF REVENUES.] Notwithstanding 173.21 Minnesota Statutes, section 469.190, subdivision 3, any city 173.22 imposing the taxes under subdivisions 1 and 2 may use the 173.23 proceeds from a lodging tax imposed under Minnesota Statutes, 173.24 section 469.190, subdivision 1, to pay the operating deficit, if 173.25 any, for the first five years of operation of the facility 173.26 funded in subdivision 3. This authority is in effect while the 173.27 taxes under subdivisions 1 and 2 are imposed. 173.28 Subd. 5. [BONDS.] The cities named in subdivision 1 may 173.29 issue bonds in each city in an aggregate amount not to exceed 173.30 $25,000,000 needed to pay capital and administrative expenses 173.31 for the acquisition, construction, and improvement of the 173.32 Central Minnesota Events Center. The debt represented by the 173.33 bonds must not be included in computing any debt limitation 173.34 applicable to the city and the levy of taxes required by 173.35 Minnesota Statutes, section 475.61, to pay the principal of and 173.36 interest on the bonds must not be subject to any levy limitation 174.1 or be included in computing or applying any levy limitation 174.2 applicable to the city. 174.3 Subd. 6. [NO PLEDGE TO DEBT.] Revenues received from the 174.4 tax authorized under this section may not be pledged or 174.5 obligated to the payment of bonds or other debt obligations. 174.6 This restriction does not prohibit the issuance of bonds, 174.7 secured by other revenue sources including property taxes, to 174.8 pay for the improvements which may be funded with revenues from 174.9 the taxes under this section. Revenues from the taxes may be 174.10 used to pay the obligations, but repeal or reduction of the tax 174.11 does not violate contractual obligations under the bonds or 174.12 other debt obligations. 174.13 Subd. 7. [TERMINATION OF TAXES.] The taxes imposed by each 174.14 city under subdivisions 1 and 2 expire when sufficient funds 174.15 have been received from the taxes to finance the obligations 174.16 under subdivision 3, and to prepay or retire at maturity the 174.17 principal, interest, and premium due on the original bonds 174.18 issued for the initial acquisition, construction, and 174.19 improvement of the Central Minnesota Events Center as determined 174.20 under an applicable joint powers agreement or by a governing 174.21 entity in charge of administering the project. Any funds 174.22 remaining after completion of the project and retirement or 174.23 redemption of the bonds may be placed in the general funds of 174.24 the cities imposing the taxes. The taxes imposed by a city 174.25 under this section may expire at an earlier time by city 174.26 ordinance, if authorized under the applicable joint powers 174.27 agreement or by the governing entity in charge of administering 174.28 the project. 174.29 Subd. 8. [REFERENDUM.] (a) If a governing body of any of 174.30 the cities listed in subdivision 1 intends to impose any tax 174.31 authorized under subdivisions 1 and 2, it shall conduct a 174.32 referendum on the issue. The question of imposition of the tax 174.33 must be submitted to the voters at a general election within one 174.34 year of the day of final enactment of this act or at an election 174.35 held on the first Tuesday in November of 1999, and the tax may 174.36 not be imposed unless a majority of votes cast on the question 175.1 are in the affirmative. The commissioner of revenue shall 175.2 prepare a suggested form of question to be presented at the 175.3 election. 175.4 (b) If the cities that pass a referendum required under 175.5 paragraph (a) determine that the revenues raised from the sum of 175.6 all the taxes authorized by referendum under this subdivision 175.7 will not be sufficient to fund the project in subdivision 3, 175.8 none of the authorized taxes may be imposed. 175.9 Subd. 9. [EFFECTIVE DATE.] This section is effective 175.10 August 1, 1998, with respect to any city listed in subdivision 1 175.11 upon compliance of the governing body of that city with 175.12 Minnesota Statutes, section 645.021, subdivision 3. 175.13 Sec. 30. [CITY OF WINONA; TAXES AUTHORIZED.] 175.14 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 175.15 Notwithstanding Minnesota Statutes, section 477A.016, or any 175.16 other provision of law, ordinance, or city charter, if approved 175.17 by the city voters at a general election held within one year of 175.18 the date of final enactment of this act, the city of Winona may 175.19 impose by ordinance a sales and use tax of up to one-half of one 175.20 percent for the purposes specified in subdivision 3. The 175.21 provisions of Minnesota Statutes, section 297A.48, govern the 175.22 imposition, administration, collection, and enforcement of the 175.23 tax authorized under this subdivision. 175.24 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 175.25 Minnesota Statutes, section 477A.016, or any other contrary 175.26 provision of law, ordinance, or city charter, the city of Winona 175.27 may impose by ordinance, for the purposes specified in 175.28 subdivision 3, an excise tax of up to $20 per motor vehicle, as 175.29 defined by ordinance, purchased or acquired from any person 175.30 engaged within the city in the business of selling motor 175.31 vehicles at retail. 175.32 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 175.33 authorized by subdivisions 1 and 2 must be used by the city to 175.34 pay the costs of collecting the taxes and to pay all or a part 175.35 of the capital and administrative costs of the dredging of Lake 175.36 Winona, including paying debt service on bonds or other 176.1 obligations issued to finance the project under subdivision 4. 176.2 Subd. 4. [BONDS.] Pursuant to the approval of the city 176.3 voters under subdivision 1, the city of Winona may issue without 176.4 additional election general obligation bonds of the city in an 176.5 amount not to exceed $4,000,000 to pay capital and 176.6 administrative expenses for the dredging of Lake Winona. The 176.7 debt represented by the bonds must not be included in computing 176.8 any debt limitations applicable to the city, and the levy of 176.9 taxes required by Minnesota Statutes, section 475.61, to pay the 176.10 principal of and interest on the bonds must not be subject to 176.11 any levy limitation or be included in computing or applying any 176.12 levy limitation applicable to the city. 176.13 Subd. 5. [NO PLEDGE TO DEBT.] Revenues received from the 176.14 tax authorized under this section may not be pledged or 176.15 obligated to the payment of bonds or other debt obligations. 176.16 This restriction does not prohibit the issuance of bonds, 176.17 secured by other revenue sources including property taxes, to 176.18 pay for the improvements which may be funded with revenues from 176.19 the taxes under this section. Revenues from the taxes may be 176.20 used to pay the obligations, but repeal or reduction of the tax 176.21 does not violate contractual obligations under the bonds or 176.22 other debt obligations. 176.23 Subd. 6. [TERMINATION OF TAXES.] The taxes imposed under 176.24 subdivisions 1 and 2 expire when the city council determines 176.25 that sufficient funds have been received from the taxes to 176.26 finance the dredging of Lake Winona and to prepay or retire at 176.27 maturity the principal, interest, and premium due on any bonds 176.28 issued for the project under subdivision 4. Any funds remaining 176.29 after completion of the project and retirement or redemption of 176.30 the bonds may be placed in the general fund of the city. The 176.31 taxes imposed under subdivisions 1 and 2 may expire at an 176.32 earlier time if the city so determines by ordinance. 176.33 Subd. 7. [EFFECTIVE DATE.] This section is effective upon 176.34 compliance by the governing body of the city of Winona with 176.35 Minnesota Statutes, section 645.021, subdivision 3. 176.36 Sec. 31. [EFFECTIVE DATE.] 177.1 Sections 2, 3, 8, 9, 12, and 14 are effective for sales and 177.2 purchases occurring after June 30, 1998. Section 4 is effective 177.3 the day following final enactment. Section 6 is effective for 177.4 vehicles registered after June 30, 1998. Section 7 is effective 177.5 for purchases made after December 31, 1998. Section 10 is 177.6 effective for purchases made after June 30, 1998. Section 11 is 177.7 effective for purchases made after December 1, 1997. Section 13 177.8 is effective for local laws enacted after June 30, 1998. 177.9 Sections 15 and 16 are effective July 1, 1998. Sections 17 and 177.10 18 are effective the day after approval by the governing body of 177.11 the city of Duluth and compliance with the provisions of 177.12 Minnesota Statutes, section 645.021. Section 20 is effective the 177.13 day following final enactment. Section 21 is effective for 177.14 transfers occurring after November 30, 1997, and before January 177.15 1, 1999. 177.16 ARTICLE 8 177.17 BUDGET RESERVES 177.18 Section 1. Minnesota Statutes 1997 Supplement, section 177.19 16A.152, subdivision 2, is amended to read: 177.20 Subd. 2. [ADDITIONAL REVENUES; PRIORITY.] If on the basis 177.21 of a forecast of general fund revenues and expenditures after 177.22 November 1 in an odd-numbered year, the commissioner of finance 177.23 determines that there will be a positive unrestricted budgetary 177.24 general fund balance at the close of the biennium, the 177.25 commissioner of finance must allocate money as follows: 177.26 (a) first, to the budget reserve until the total amount in 177.27 the account equals$522,000,000$582,000,000; then 177.28 (b) 60 percent to the property tax reform account 177.29 established in section 16A.1521; and 177.30 (c) 40 percent is an unrestricted balance in the general 177.31 fund. 177.32 The amounts necessary to meet the requirements of this 177.33 section are appropriated from the general fund within two weeks 177.34 after the forecast is released. 177.35 Sec. 2. [APPROPRIATION.] 177.36 On July 1, 1998, $60,000,000 is appropriated from the 178.1 general fund to the commissioner of finance to transfer to the 178.2 budget reserve account under Minnesota Statutes, section 178.3 16A.152, subdivision 1a. 178.4 ARTICLE 9 178.5 TACONITE TAXES 178.6 Section 1. Minnesota Statutes 1997 Supplement, section 178.7 124.918, subdivision 8, is amended to read: 178.8 Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 178.9 Reductions in levies pursuant to section 124.918, subdivision 1, 178.10 and section 273.138, shall be made prior to the reductions in 178.11 clause (2). 178.12 (2) Notwithstanding any other law to the contrary, 178.13 districts which received payments pursuant to sections 298.018; 178.14 298.23 to 298.28, except an amount distributed under section 178.15 298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 178.16 298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 178.17 upon severed mineral values, or recognized revenue pursuant to 178.18 section 477A.15; shall not include a portion of these aids in 178.19 their permissible levies pursuant to those sections, but instead 178.20 shall reduce the permissible levies authorized by this chapter 178.21 and chapter 124A by the greater of the following: 178.22 (a) an amount equal to 50 percent of the total dollar 178.23 amount of the payments received pursuant to those sections or 178.24 revenue recognized pursuant to section 477A.15 in the previous 178.25 fiscal year; or 178.26 (b) an amount equal to the total dollar amount of the 178.27 payments received pursuant to those sections or revenue 178.28 recognized pursuant to section 477A.15 in the previous fiscal 178.29 year less the product of the same dollar amount of payments or 178.30 revenue timesthe ratio of the maximum levy allowed the district178.31under Minnesota Statutes 1986, sections 124A.03, subdivision 2,178.32124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10,178.33subdivision 3a, 124A.12, subdivision 3a, and 124A.14,178.34subdivision 5a, to the total levy allowed the district under178.35this section and Minnesota Statutes 1986, sections 124A.03,178.36124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10,179.1subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision179.25a, and 124A.20, subdivision 2, for levies certified in179.31986five percent. 179.4 (3) No reduction pursuant to this subdivision shall reduce 179.5 the levy made by the district pursuant to section 124A.23, to an 179.6 amount less than the amount raised by a levy of a net tax rate 179.7 of 6.82 percent times the adjusted net tax capacity for taxes 179.8 payable in 1990 and thereafter of that district for the 179.9 preceding year as determined by the commissioner. The amount of 179.10 any increased levy authorized by referendum pursuant to section 179.11 124A.03, subdivision 2, shall not be reduced pursuant to this 179.12 subdivision. The amount of any levy authorized by section 179.13 124.912, subdivision 1, to make payments for bonds issued and 179.14 for interest thereon, shall not be reduced pursuant to this 179.15 subdivision. 179.16 (4) Before computing the reduction pursuant to this 179.17 subdivision of the health and safety levy authorized by sections 179.18 124.83 and 124.91, subdivision 6, the commissioner shall 179.19 ascertain from each affected school district the amount it 179.20 proposes to levy under each section or subdivision. The 179.21 reduction shall be computed on the basis of the amount so 179.22 ascertained. 179.23 (5) Notwithstanding any law to the contrary, any amounts 179.24 received by districts in any fiscal year pursuant to sections 179.25 298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 179.26 298.405; or any law imposing a tax on severed mineral values; 179.27 and not deducted from general education aid pursuant to section 179.28 124A.035, subdivision 5, clause (2), and not applied to reduce 179.29 levies pursuant to this subdivision shall be paid by the 179.30 district to the St. Louis county auditor in the following amount 179.31 by March 15 of each year, the amount required to be subtracted 179.32 from the previous fiscal year's general education aid pursuant 179.33 to section 124A.035, subdivision 5, which is in excess of the 179.34 general education aid earned for that fiscal year. The county 179.35 auditor shall deposit any amounts received pursuant to this 179.36 clause in the St. Louis county treasury for purposes of paying 180.1 the taconite homestead credit as provided in section 273.135. 180.2 Sec. 2. Minnesota Statutes 1996, section 273.135, 180.3 subdivision 2, is amended to read: 180.4 Subd. 2. The amount of the reduction authorized by 180.5 subdivision 1 shall be: 180.6 (a) In the case of property located within the boundaries 180.7 of a municipality which meets the qualifications prescribed in 180.8 section 273.134, 66 percent of the tax, provided that the 180.9 reduction shall not exceed the maximum amounts specified in 180.10 clause (c), and shall not exceed an amount sufficient to reduce180.11the effective tax rate on each parcel of property to 95 percent180.12of the base year effective tax rate. In no case will the180.13reduction for each homestead resulting from this credit be less180.14than $10. 180.15 (b) In the case of property located within the boundaries 180.16 of a school district which qualifies as a tax relief area but 180.17 which is outside the boundaries of a municipality which meets 180.18 the qualifications prescribed in section 273.134, 57 percent of 180.19 the tax, provided that the reduction shall not exceed the 180.20 maximum amounts specified in clause (c), and shall not exceed an180.21amount sufficient to reduce the effective tax rate on each180.22parcel of property to 95 percent of the base year effective tax180.23rate. In no case will the reduction for each homestead180.24resulting from this credit be less than $10. 180.25 (c) The maximum reduction of the tax is$225.40$315.10 on 180.26 property described in clause (a) and$200.10$289.80 on property 180.27 described in clause (b), for taxes payable in 1985. These180.28maximum amounts shall increase by $15 times the quantity one180.29minus the homestead credit equivalency percentage per year for180.30taxes payable in 1986 and subsequent years. 180.31For the purposes of this subdivision, "homestead credit180.32equivalency percentage" means one minus the ratio of the net180.33class rate to the gross class rate applicable to the first180.34$72,000 of the market value of residential homesteads,180.35"effective tax rate" means tax divided by the market value of a180.36property, and the "base year effective tax rate" means the181.1payable 1988 tax on a property with an identical market value to181.2that of the property receiving the credit in the current year181.3after the application of the credits payable under Minnesota181.4Statutes 1988, section 273.13, subdivisions 22 and 23, and this181.5section, divided by the market value of the property.181.6 Sec. 3. Minnesota Statutes 1996, section 273.1391, 181.7 subdivision 2, is amended to read: 181.8 Subd. 2. The amount of the reduction authorized by 181.9 subdivision 1 shall be: 181.10 (a) In the case of property located within a school 181.11 district which does not meet the qualifications of section 181.12 273.134 as a tax relief area, but which is located in a county 181.13 with a population of less than 100,000 in which taconite is 181.14 mined or quarried and wherein a school district is located which 181.15 does meet the qualifications of a tax relief area, and provided 181.16 that at least 90 percent of the area of the school district 181.17 which does not meet the qualifications of section 273.134 lies 181.18 within such county, 57 percent of the tax on qualified property 181.19 located in the school district that does not meet the 181.20 qualifications of section 273.134, provided that the amount of 181.21 said reduction shall not exceed the maximum amounts specified in 181.22 clause (c), and shall not exceed an amount sufficient to reduce181.23the effective tax rate on each parcel of property to the product181.24of 95 percent of the base year effective tax rate multiplied by181.25the ratio of the current year's tax rate to the payable 1989 tax181.26rate. In no case will the reduction for each homestead181.27resulting from this credit be less than $10. The reduction 181.28 provided by this clause shall only be applicable to property 181.29 located within the boundaries of the county described therein. 181.30 (b) In the case of property located within a school 181.31 district which does not meet the qualifications of section 181.32 273.134 as a tax relief area, but which is located in a school 181.33 district in a county containing a city of the first class and a 181.34 qualifying municipality, but not in a school district containing 181.35 a city of the first class or adjacent to a school district 181.36 containing a city of the first class unless the school district 182.1 so adjacent contains a qualifying municipality, 57 percent of 182.2 the tax, but not to exceed the maximums specified in clause (c),182.3and shall not exceed an amount sufficient to reduce the182.4effective tax rate on each parcel of property to the product of182.595 percent of the base year effective tax rate multiplied by the182.6ratio of the current year's tax rate to the payable 1989 tax182.7rate. In no case will the reduction for each homestead182.8resulting from this credit be less than $10. 182.9 (c) The maximum reduction of the tax is$200.10 for taxes182.10payable in 1985. This maximum amount shall increase by $15182.11multiplied by the quantity one minus the homestead credit182.12equivalency percentage per year for taxes payable in 1986 and182.13subsequent years$289.80. 182.14For the purposes of this subdivision, "homestead credit182.15equivalency percentage" means one minus the ratio of the net182.16class rate to the gross class rate applicable to the first182.17$72,000 of the market value of residential homesteads, and182.18"effective tax rate" means tax divided by the market value of a182.19property, and the "base year effective tax rate" means the182.20payable 1988 tax on a property with an identical market value to182.21that of the property receiving the credit in the current year182.22after application of the credits payable under Minnesota182.23Statutes 1988, section 273.13, subdivisions 22 and 23, and this182.24section, divided by the market value of the property.182.25 Sec. 4. Minnesota Statutes 1996, section 298.225, 182.26 subdivision 1, is amended to read: 182.27 Subdivision 1. For distribution of taconite production tax 182.28 in 1987 and thereafter with respect to production in 1986 and 182.29 thereafter, the distribution of the taconite production tax as 182.30 provided in section 298.28, subdivisions 2 to 5, 6, paragraphs 182.31 (b) and (c), 7, and 8, shall equal the lesser of the following 182.32 amounts: 182.33 (1) the amount distributed pursuant to this section and 182.34 section 298.28, with respect to 1983 production if the 182.35 production for the year prior to the distribution year is no 182.36 less than 42,000,000 taxable tons. If the production is less 183.1 than 42,000,000 taxable tons, the amount of the distributions 183.2 shall be reduced proportionately at the rate of two percent for 183.3 each 1,000,000 tons, or part of 1,000,000 tons by which the 183.4 production is less than 42,000,000 tons; or 183.5 (2)(i) for the distributions made pursuant to section 183.6 298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 183.7 (c),5040.5 percent of the amount distributed pursuant to this 183.8 section and section 298.28, with respect to 1983 production. 183.9 (ii) for the distributions made pursuant to section 298.28, 183.10 subdivision 5, paragraphs (b) and (d), 75 percent of the amount 183.11 distributed pursuant to this section and section 298.28, with 183.12 respect to 1983 production. 183.13 Sec. 5. Minnesota Statutes 1996, section 298.28, 183.14 subdivision 4, is amended to read: 183.15 Subd. 4. [SCHOOL DISTRICTS.] (a)27.522.28 cents per 183.16 taxable ton plus the increase provided in paragraph (d) must be 183.17 allocated to qualifying school districts to be distributed, 183.18 based upon the certification of the commissioner of revenue, 183.19 under paragraphs (b) and (c). 183.20 (b)5.54.46 cents per taxable ton must be distributed to 183.21 the school districts in which the lands from which taconite was 183.22 mined or quarried were located or within which the concentrate 183.23 was produced. The distribution must be based on the 183.24 apportionment formula prescribed in subdivision 2. 183.25 (c)(i)2217.82 cents per taxable ton, less any amount 183.26 distributed under paragraph (e), shall be distributed to a group 183.27 of school districts comprised of those school districts in which 183.28 the taconite was mined or quarried or the concentrate produced 183.29 or in which there is a qualifying municipality as defined by 183.30 section 273.134 in direct proportion to school district indexes 183.31 as follows: for each school district, its pupil units 183.32 determined under section 124.17 for the prior school year shall 183.33 be multiplied by the ratio of the average adjusted net tax 183.34 capacity per pupil unit for school districts receiving aid under 183.35 this clause as calculated pursuant to chapter 124A for the 183.36 school year ending prior to distribution to the adjusted net tax 184.1 capacity per pupil unit of the district. Each district shall 184.2 receive that portion of the distribution which its index bears 184.3 to the sum of the indices for all school districts that receive 184.4 the distributions. 184.5 (ii) Notwithstanding clause (i), each school district that 184.6 receives a distribution under sections 298.018; 298.23 to 184.7 298.28, exclusive of any amount received under this clause; 184.8 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 184.9 imposing a tax on severed mineral values that is less than the 184.10 amount of its levy reduction under section 124.918, subdivision 184.11 8, for the second year prior to the year of the distribution 184.12 shall receive a distribution equal to the difference; the amount 184.13 necessary to make this payment shall be derived from 184.14 proportionate reductions in the initial distribution to other 184.15 school districts under clause (i). 184.16 (d) Any school district described in paragraph (c) where a 184.17 levy increase pursuant to section 124A.03, subdivision 2, is 184.18 authorized by referendum, shall receive a distribution according 184.19 to the following formula. In 1994, the amount distributed per 184.20 ton shall be equal to the amount per ton distributed in 1991 184.21 under this paragraph increased in the same proportion as the 184.22 increase between the fourth quarter of 1989 and the fourth 184.23 quarter of 1992 in the implicit price deflator as defined in 184.24 section 298.24, subdivision 1. On July 15, 1995, and subsequent 184.25 years, the increase over the amount established for the prior 184.26 year shall be determined according to the increase in the 184.27 implicit price deflator as provided in section 298.24, 184.28 subdivision 1. Each district shall receive the product of: 184.29 (i) $175 times the pupil units identified in section 184.30 124.17, subdivision 1, enrolled in the second previous year or 184.31 the 1983-1984 school year, whichever is greater, less the 184.32 product of 1.8 percent times the district's taxable net tax 184.33 capacity in the second previous year; times 184.34 (ii) the lesser of: 184.35 (A) one, or 184.36 (B) the ratio of the sum of the amount certified pursuant 185.1 to section 124A.03, subdivision 1g, in the previous year, plus 185.2 the amount certified pursuant to section 124A.03, subdivision 185.3 1i, in the previous year, plus the referendum aid according to 185.4 section 124A.03, subdivision 1h, for the current year, plus an 185.5 amount equal to the reduction under section 124A.03, subdivision 185.6 3b, to the product of 1.8 percent times the district's taxable 185.7 net tax capacity in the second previous year. 185.8 If the total amount provided by paragraph (d) is 185.9 insufficient to make the payments herein required then the 185.10 entitlement of $175 per pupil unit shall be reduced uniformly so 185.11 as not to exceed the funds available. Any amounts received by a 185.12 qualifying school district in any fiscal year pursuant to 185.13 paragraph (d) shall not be applied to reduce general education 185.14 aid which the district receives pursuant to section 124A.23 or 185.15 the permissible levies of the district. Any amount remaining 185.16 after the payments provided in this paragraph shall be paid to 185.17 the commissioner of iron range resources and rehabilitation who 185.18 shall deposit the same in the taconite environmental protection 185.19 fund and the northeast Minnesota economic protection trust fund 185.20 as provided in subdivision 11. 185.21 Each district receiving money according to this paragraph 185.22 shall reserve $25 times the number of pupil units in the 185.23 district. It may use the money for early childhood programs or 185.24 for outcome-based learning programs that enhance the academic 185.25 quality of the district's curriculum. The outcome-based 185.26 learning programs must be approved by the commissioner of 185.27 children, families, and learning. 185.28 (e) There shall be distributed to any school district the 185.29 amount which the school district was entitled to receive under 185.30 section 298.32 in 1975. 185.31 Sec. 6. Minnesota Statutes 1996, section 298.28, 185.32 subdivision 6, is amended to read: 185.33 Subd. 6. [PROPERTY TAX RELIEF.] (a)FifteenIn 1999, 38.81 185.34 cents per taxable ton, less any amount required to be 185.35 distributed under paragraphs (b) and (c), and less any amount 185.36 required to be deducted under paragraph (d), must be allocated 186.1 to St. Louis county acting as the counties' fiscal agent, to be 186.2 distributed as provided in sections 273.134 to 273.136. 186.3 (b) If an electric power plant owned by and providing the 186.4 primary source of power for a taxpayer mining and concentrating 186.5 taconite is located in a county other than the county in which 186.6 the mining and the concentrating processes are conducted, .1875 186.7 cent per taxable ton of the tax imposed and collected from such 186.8 taxpayer shall be paid to the county. 186.9 (c) If an electric power plant owned by and providing the 186.10 primary source of power for a taxpayer mining and concentrating 186.11 taconite is located in a school district other than a school 186.12 district in which the mining and concentrating processes are 186.13 conducted,.5625.7282 cent per taxable ton of the tax imposed 186.14 and collected from the taxpayer shall be paid to the school 186.15 district. 186.16 (d) Two cents per taxable ton must be deducted from the 186.17 amount allocated to the St. Louis county auditor under paragraph 186.18 (a). 186.19 Sec. 7. Minnesota Statutes 1996, section 298.28, 186.20 subdivision 9, is amended to read: 186.21 Subd. 9. [MINNESOTA ECONOMIC PROTECTION TRUST FUND.]1.5186.22 In 1999, 3.35 cents per taxable ton shall be paid to the 186.23 northeast Minnesota economic protection trust fund. 186.24 Sec. 8. Minnesota Statutes 1996, section 298.28, 186.25 subdivision 10, is amended to read: 186.26 Subd. 10. [INCREASE.] Beginning in 2000, the amounts 186.27 determined under subdivisions 6, paragraph (a), and 9 shall be 186.28 increased in1979 and subsequent years prior to 1988 in the same186.29proportion as the increase in the steel mill products index as186.30provided in section 298.24, subdivision 1. The amount186.31distributed in 1988 shall be increased according to the increase186.32that would have occurred in the rate of tax under section 298.24186.33if the rate had been adjusted according to the implicit price186.34deflator for 1987 production. Those amounts shall be increased186.35in 1989, 1990, and 1991 in the same proportion as the increase186.36in the implicit price deflator as provided in section 298.24,187.1subdivision 1. In 1992 and 1993, the amounts determined under187.2subdivisions 6, paragraph (a), and 9, shall be the distribution187.3per ton determined for distribution in 1991. In 1994, the187.4amounts determined under subdivisions 6, paragraph (a), and 9,187.5shall be the distribution per ton determined for distribution in187.61991 increased in the same proportion as the increase between187.7the fourth quarter of 1989 and the fourth quarter of 1992 in the187.8implicit price deflator as defined in section 298.24,187.9subdivision 1. Those amounts shall be increased in 1995 and187.10subsequent years inthe same proportion as the increase in the 187.11 implicit price deflator as provided in section 298.24, 187.12 subdivision 1. 187.13 The distributions per ton determined under subdivisions 5, 187.14 paragraphs (b) and (d), and 6,paragraphsparagraph (b)and (c)187.15 for distribution in 1988 and subsequent years shall be the 187.16 distribution per ton determined for distribution in 1987. 187.17 Sec. 9. Minnesota Statutes 1996, section 298.28, 187.18 subdivision 11, is amended to read: 187.19 Subd. 11. [REMAINDER.] (a) The proceeds of the tax imposed 187.20 by section 298.24 which remain after the distributions and 187.21 payments in subdivisions 2 to 10a, as certified by the 187.22 commissioner of revenue, and paragraphs (b),and(c), and (d) 187.23 have been made, together with interest earned on all money 187.24 distributed under this section prior to distribution, shall be 187.25 divided between the taconite environmental protection fund 187.26 created in section 298.223 and the northeast Minnesota economic 187.27 protection trust fund created in section 298.292 as follows: 187.28 Two-thirds to the taconite environmental protection fund and 187.29 one-third to the northeast Minnesota economic protection trust 187.30 fund. The proceeds shall be placed in the respective special 187.31 accounts. 187.32 (b) There shall be distributed to each city, town,school187.33district,and county the amount that it received under section 187.34 294.26 in calendar year 1977; provided, however, that the amount 187.35 distributed in 1981 to the unorganized territory number 2 of 187.36 Lake county and the town of Beaver Bay based on the 188.1 between-terminal trackage of Erie Mining Company will be 188.2 distributed in 1982 and subsequent years to the unorganized 188.3 territory number 2 of Lake county and the towns of Beaver Bay 188.4 and Stony River based on the miles of track of Erie Mining 188.5 Company in each taxing district. 188.6 (c) There shall be distributed to the iron range resources 188.7 and rehabilitation board the amounts it received in 1977 under 188.8 section 298.22. The amount distributed under this paragraph 188.9 shall be expended within or for the benefit of the tax relief 188.10 area defined in section 273.134. 188.11 (d) There shall be distributed to each school district 81 188.12 percent of the amount that it received under section 294.26 in 188.13 calendar year 1977. 188.14 Sec. 10. [EFFECTIVE DATE.] 188.15 Section 1 is effective for taxes levied in 2000. Sections 188.16 2 and 3 are effective for taxes payable in 1999. Sections 4; 5; 188.17 and 6, paragraph (c); and 8 are effective for production year 188.18 1999, distributions made in 2000. Sections 6, paragraph (a); 7; 188.19 and 9 are effective for production year 1998, distributions made 188.20 in 1999. 188.21 ARTICLE 10 188.22 TAX INCREMENT FINANCING AND DEVELOPMENT 188.23 Section 1. Minnesota Statutes 1996, section 273.111, 188.24 subdivision 9, is amended to read: 188.25 Subd. 9. When real property which is being, or has been 188.26 valued and assessed under this section no longer qualifies under 188.27 subdivisions 3 and 6 or no longer chooses to participate in the 188.28 program, the portion no longer qualifying shall be subject to 188.29 additional taxes, in the amount equal to the difference between 188.30 the taxes determined in accordance with subdivision 4, and the 188.31 amount determined under subdivision 5, provided, however, that 188.32 the amount determined under subdivision 5 shall not be greater 188.33 than it would have been had the actual bona fide sale price of 188.34 the real property at an arms length transaction been used in 188.35 lieu of the market value determined under subdivision 5. Such 188.36 additional taxes shall be extended against the property on the 189.1 tax list for the current year, provided, however, that no 189.2 interest or penalties shall be levied on such additional taxes 189.3 if timely paid, and provided further, that such additional taxes 189.4 shall only be levied with respect to the last three years that 189.5 the said property has been valued and assessed under this 189.6 section, except that if the property is included in a tax 189.7 increment financing district as provided under section 469.176, 189.8 subdivision 7, the additional taxes are levied with respect to 189.9 the last seven years that the property has been valued and 189.10 assessed under this section. 189.11 Sec. 2. Minnesota Statutes 1996, section 273.112, 189.12 subdivision 7, is amended to read: 189.13 Subd. 7. When real property which is being, or has been, 189.14 valued and assessed under this section no longer qualifies under 189.15 subdivision 3 or no longer chooses to participate in the 189.16 program, the portion which no longer qualifies shall be subject 189.17 to additional taxes, in the amount equal to the difference 189.18 between the taxes determined in accordance with subdivision 4, 189.19 and the amount determined under subdivision 5, provided, 189.20 however, that the amount determined under subdivision 5 shall 189.21 not be greater than it would have been had the actual bona fide 189.22 sale price of the real property at an arms length transaction 189.23 been used in lieu of the market value determined under 189.24 subdivision 5. The additional taxes shall be extended against 189.25 the property on the tax list for the current year, provided, 189.26 however, that no interest or penalties shall be levied on the 189.27 additional taxes if timely paid, and provided further, that the 189.28 additional taxes shall only be levied with respect to the last 189.29 seven years that the property has been valued and assessed under 189.30 this section, except that if the property is included in a tax 189.31 increment financing district under section 469.176, subdivision 189.32 7, the additional taxes are levied with respect to the last ten 189.33 years that the property has been valued and assessed under this 189.34 section. This subdivision does not apply to real property that 189.35 ceases to qualify under subdivision 3 because it is acquired by 189.36 the state of Minnesota or a political subdivision, agency, or 190.1 instrumentality of the state, provided that the property 190.2 continues to be used for a qualifying purpose for at least five 190.3 years from the date that the property was acquired. 190.4 Sec. 3. Minnesota Statutes 1996, section 469.091, 190.5 subdivision 1, is amended to read: 190.6 Subdivision 1. [ESTABLISHMENT.] (a) A city may, by 190.7 adopting an enabling resolution in compliance with the 190.8 procedural requirements of section 469.093, establish an 190.9 economic development authority that, subject to section 469.092, 190.10 has the powers contained in sections 469.090 to 469.108 and the 190.11 powers of a housing and redevelopment authority under sections 190.12 469.001 to 469.047 or other law, and of a city under sections 190.13 469.124 to 469.134 or other law. If the economic development 190.14 authority exercises the powers of a housing and redevelopment 190.15 authority contained in sections 469.001 to 469.047 or other law, 190.16 the city shall exercise the powers relating to a housing and 190.17 redevelopment authority granted to a city by sections 469.001 to 190.18 469.047 or other law. 190.19 (b) A county may establish an economic development 190.20 authority in the manner provided in sections 469.090 to 190.21 469.1081, and may impose limits on the authority as enumerated 190.22 in section 469.092. A county economic development authority may 190.23 create and define the boundaries of economic development 190.24 districts at any place or places within the county, provided 190.25 that a project as recommended by the county authority that is to 190.26 be located within the corporate limits of a city may not be 190.27 commenced without the approval of the governing body of the city. 190.28 If an economic development authority is established by a county, 190.29 the county may exercise all of the powers relating to an 190.30 economic development authority granted to a city under sections 190.31 469.090 to 469.1081, or other law, including the power to levy a 190.32 tax to support the activities of the authority. 190.33 Sec. 4. Minnesota Statutes 1996, section 469.101, 190.34 subdivision 1, is amended to read: 190.35 Subdivision 1. [ESTABLISHMENT.] An economic development 190.36 authority may create and define the boundaries of economic 191.1 development districts at any place or places within the cityif191.2the district satisfies the requirements of section 469.174,191.3subdivision 10, except that the district boundaries must be191.4contiguous,and may use the powers granted in sections 469.090 191.5 to 469.108 to carry out its purposes. First the authority must 191.6 hold a public hearing on the matter. At least ten days before 191.7 the hearing, the authority shall publish notice of the hearing 191.8 in a daily newspaper of general circulation in the city. Also, 191.9 the authority shall find that an economic development district 191.10 is proper and desirable to establish and develop within the city. 191.11 Sec. 5. Minnesota Statutes 1996, section 469.174, is 191.12 amended by adding a subdivision to read: 191.13 Subd. 28. [DECERTIFICATION.] "Decertify" or 191.14 "decertification" means the termination of a tax increment 191.15 financing district which occurs when the county auditor removes 191.16 all remaining parcels from the district. 191.17 Sec. 6. Minnesota Statutes 1996, section 469.175, 191.18 subdivision 5, is amended to read: 191.19 Subd. 5. [ANNUAL DISCLOSURE.] (a)For all tax increment191.20financing districts, whether created prior or subsequent to191.21August 1, 1979, on or before July 1 of each year,The authority 191.22 shall annually submit to the county board, the county auditor, 191.23 the school board, state auditor and, if the authority is other 191.24 than the municipality, the governing body of the municipality, a 191.25 report of the status of the district. The report shall include 191.26 the following information: the amount and the source of revenue 191.27 in the account, the amount and purpose of expenditures from the 191.28 account, the amount of any pledge of revenues, including 191.29 principal and interest on any outstanding bonded indebtedness, 191.30 the original net tax capacity of the district and any 191.31 subdistrict, the captured net tax capacity retained by the 191.32 authority, the captured net tax capacity shared with other 191.33 taxing districts, the tax increment received, and any additional 191.34 information necessary to demonstrate compliance with any 191.35 applicable tax increment financing plan. The authority must 191.36 submit the annual report for a year on or before August 1 of the 192.1 next year. 192.2 (b) An annual statement showing the tax increment received 192.3 and expended in that year, the original net tax capacity, 192.4 captured net tax capacity, amount of outstanding bonded 192.5 indebtedness, the amount of the district's and any subdistrict's 192.6 increments paid to other governmental bodies, the amount paid 192.7 for administrative costs, the sum of increments paid, directly 192.8 or indirectly, for activities and improvements located outside 192.9 of the district, and any additional information the authority 192.10 deems necessary shall be published in a newspaper of general 192.11 circulation in the municipality. If the fiscal disparities 192.12 contribution under chapter 276A or 473F for the district is 192.13 computed under section 469.177, subdivision 3, paragraph (a), 192.14 the annual statement must disclose that fact and indicate the 192.15 amount of increased property tax imposed on other properties in 192.16 the municipality as a result of the fiscal disparities 192.17 contribution. The commissioner of revenue shall prescribe the 192.18 form of this statement and the method for calculating the 192.19 increased property taxes. The authority must publish the annual 192.20 statement for a year no later thanJuly 1August 15 of the next 192.21 year. The authority must provide identification of the 192.22 newspaper of general circulation in the municipality to which 192.23 the annual statement has been or will be submitted for 192.24 publication and a copy of the annual statement to the state 192.25 auditorby the time it submits it for publicationon or before 192.26 August 1 of the year in which the statement must be published. 192.27 (c) The disclosure and reporting requirements imposed by 192.28 this subdivision apply to districts certified before, on, or 192.29 after August 1, 1979. 192.30 Sec. 7. Minnesota Statutes 1996, section 469.175, 192.31 subdivision 6, is amended to read: 192.32 Subd. 6. [FINANCIAL REPORTING.] (a) The state auditor 192.33 shall develop a uniform system of accounting and financial 192.34 reporting for tax increment financing districts. The system of 192.35 accounting and financial reporting shall, as nearly as possible: 192.36 (1) provide for full disclosure of the sources and uses of 193.1 public funds in the district; 193.2 (2) permit comparison and reconciliation with the affected 193.3 local government's accounts and financial reports; 193.4 (3) permit auditing of the funds expended on behalf of a 193.5 district, including a single district that is part of a 193.6 multidistrict project or that is funded in part or whole through 193.7 the use of a development account funded with tax increments from 193.8 other districts or with other public money; 193.9 (4) be consistent with generally accepted accounting 193.10 principles. 193.11 (b) The authority must annually submit to the state 193.12 auditor, on or before July 1,a financial report in compliance 193.13 with paragraph (a). Copies of the report must also be provided 193.14 to the county and school district boards and to the governing 193.15 body of the municipality, if the authority is not the 193.16 municipality. To the extent necessary to permit compliance with 193.17 the requirement of financial reporting, the county and any other 193.18 appropriate local government unit or private entity must provide 193.19 the necessary records or information to the authority or the 193.20 state auditor as provided by the system of accounting and 193.21 financial reporting developed pursuant to paragraph (a). The 193.22 authority must submit the annual report for a year on or before 193.23 August 1 of the next year. 193.24 (c) The annual financial report must also include the 193.25 following items: 193.26 (1) the original net tax capacity of the district and any 193.27 subdistrict; 193.28 (2) the captured net tax capacity of the district, 193.29 including the amount of any captured net tax capacity shared 193.30 with other taxing districts; 193.31 (3) for the reporting period and for the duration of the 193.32 district, the amount budgeted under the tax increment financing 193.33 plan, and the actual amount expended for, at least, the 193.34 following categories: 193.35 (i) acquisition of land and buildings through condemnation 193.36 or purchase; 194.1 (ii) site improvements or preparation costs; 194.2 (iii) installation of public utilities, parking facilities, 194.3 streets, roads, sidewalks, or other similar public improvements; 194.4 (iv) administrative costs, including the allocated cost of 194.5 the authority; 194.6 (v) public park facilities, facilities for social, 194.7 recreational, or conference purposes, or other similar public 194.8 improvements; 194.9 (4) for properties sold to developers, the total cost of 194.10 the property to the authority and the price paid by the 194.11 developer; and 194.12 (5) the amount of increments rebated or paid to developers 194.13 or property owners for privately financed improvements or other 194.14 qualifying costs. 194.15 (d) The reporting requirements imposed by this subdivision 194.16 apply to districts certified before, on, and after August 1, 194.17 1979. 194.18 Sec. 8. Minnesota Statutes 1996, section 469.175, 194.19 subdivision 6a, is amended to read: 194.20 Subd. 6a. [REPORTING REQUIREMENTS.] (a) The municipality 194.21 must annually report to the state auditor the following amounts 194.22 for the entire municipality: 194.23 (1) the total principal amount of nondefeased tax increment 194.24 financing bonds that are outstanding at the end of the previous 194.25 calendar year; and 194.26 (2) the total annual amount of principal and interest 194.27 payments that are due for the current calendar year on (i) 194.28 general obligation tax increment financing bonds, and (ii) other 194.29 tax increment financing bonds. 194.30 (b) The municipality must annually report to the state 194.31 auditor the following amounts for each tax increment financing 194.32 district located in the municipality: 194.33 (1) the type of district, whether economic development, 194.34 redevelopment, housing, soils condition, mined underground 194.35 space, or hazardous substance site; 194.36 (2) the date on which the district is required to be 195.1 decertified; 195.2 (3) the amount of any payments and the value of in-kind 195.3 benefits, such as physical improvements and the use of building 195.4 space, that are financed with revenues derived from increments 195.5 and are provided to another governmental unit (other than the 195.6 municipality) during the preceding calendar year; 195.7 (4) the tax increment revenues for taxes payable in the 195.8 current calendar year; 195.9 (5) whether the tax increment financing plan or other 195.10 governing document permits increment revenues to be expended (i) 195.11 to pay bonds, the proceeds of which were or may be expended on 195.12 activities located outside of the district, (ii) for deposit 195.13 into a common fund from which money may be expended on 195.14 activities located outside of the district, or (iii) to 195.15 otherwise finance activities located outside of the tax 195.16 increment financing district; and 195.17 (6) any additional information that the state auditor may 195.18 require. 195.19 (c)The report required by this subdivision must be filed195.20with the state auditor on or before July 1 of each year.The 195.21 municipality must submit the annual report for a year required 195.22 by this subdivision on or before August 1 of the next year. 195.23 (d) The state auditor may provide for combining the reports 195.24 required by this subdivision and subdivisions 5 and 6 so that 195.25 only one report is made for each year to the auditor. 195.26 (e) This section applies to districts certified before, on, 195.27 and after August 1, 1979. 195.28 Sec. 9. Minnesota Statutes 1996, section 469.175, is 195.29 amended by adding a subdivision to read: 195.30 Subd. 6b. [DURATION OF DISCLOSURE AND REPORTING 195.31 REQUIREMENTS.] The disclosure and reporting requirements imposed 195.32 by subdivisions 5, 6, and 6a apply with respect to a tax 195.33 increment financing district beginning with the annual 195.34 disclosure and reports for the year in which the original net 195.35 tax capacity of the district was certified and ending with the 195.36 annual disclosure and reports for the year in which both of the 196.1 following events have occurred: 196.2 (1) decertification of the district; and 196.3 (2) expenditure or return to the county auditor of all 196.4 remaining revenues derived from tax increments paid by 196.5 properties in the district. 196.6 Sec. 10. Minnesota Statutes 1996, section 469.176, 196.7 subdivision 7, is amended to read: 196.8 Subd. 7. [PARCELSNOTINCLUDABLE IN DISTRICTS; ADDITIONAL 196.9 TAXES REQUIRED.] (a) If the authoritymay requestrequests 196.10 inclusion in a tax increment financing districtand the county196.11auditor may certify the original tax capacityof a parcel or a 196.12 part of a parcel that qualified under the provisions of section 196.13 273.111 or 273.112 or chapter 473H for taxes payable in any of 196.14 the five calendar years before the filing of the request for 196.15 certificationonly for196.16(1) a district in which 85 percent or more of the planned196.17buildings and facilities (determined on the basis of square196.18footage) are for manufacturing or production of tangible196.19personal property, including processing resulting in the change196.20in condition of the property; or196.21(2) a qualified housing district as defined in section196.22273.1399, subdivision 1, the county auditor may certify the 196.23 original tax capacity only if (1) seven years of additional 196.24 taxes have been paid for property which qualified under section 196.25 273.111, and (2) ten years of additional taxes for property 196.26 which qualified under section 273.112. The additional taxes 196.27 must be computed and paid as provided under sections 273.111, 196.28 subdivision 9, and 273.112, subdivision 7, either when the 196.29 property no longer qualifies or participates in the program or 196.30 at a later time but before the request for certification is made. 196.31 (b) The authority must inform the county auditor of any 196.32 parcels which are included within the request which qualified 196.33 under the provisions of section 273.111 or 273.112 for taxes 196.34 payable in any of the five calendar years before the filing of 196.35 the request. 196.36 Sec. 11. Minnesota Statutes 1996, section 469.177, is 197.1 amended by adding a subdivision to read: 197.2 Subd. 12. [DECERTIFICATION OF TAX INCREMENT FINANCING 197.3 DISTRICT.] The county auditor shall decertify a tax increment 197.4 financing district when the earliest of the following times is 197.5 reached: 197.6 (1) the applicable maximum duration limit under section 197.7 469.176, subdivisions 1a to 1g; 197.8 (2) the maximum duration limit, if any, provided by the 197.9 municipality pursuant to section 469.176, subdivision 1; 197.10 (3) the time of decertification specified in section 197.11 469.1761, subdivision 4, if the commissioner of revenue issues 197.12 an order of noncompliance and the maximum duration limit for 197.13 economic development districts has been exceeded; 197.14 (4) upon completion of the required actions to allow 197.15 decertification under section 469.1763, subdivision 4; or 197.16 (5) upon receipt by the county auditor of a written request 197.17 for decertification from the authority that requested 197.18 certification of the original net tax capacity of the district 197.19 or its successor. 197.20 Sec. 12. Minnesota Statutes 1996, section 469.1771, is 197.21 amended by adding a subdivision to read: 197.22 Subd. 2a. [SUSPENSION OF DISTRIBUTION OF TAX 197.23 INCREMENT.] (a) If an authority fails to make a disclosure or to 197.24 submit a report containing the information required by section 197.25 469.175, subdivisions 5 and 6, regarding a tax increment 197.26 financing district within the time provided in section 469.175, 197.27 subdivisions 5 and 6, or if a municipality fails to submit a 197.28 report containing the information required by section 469.175, 197.29 subdivision 6a, regarding a tax increment financing district 197.30 within the time provided in section 469.175, subdivision 6a, the 197.31 state auditor shall mail to the authority a written notice that 197.32 it or the municipality has failed to make the required 197.33 disclosure or to submit a required report with respect to a 197.34 particular district or districts. The state auditor shall mail 197.35 the notice on or before the third Tuesday of August of the year 197.36 in which the disclosure or report was required to be made or 198.1 submitted. The notice shall describe the consequences of 198.2 failing to disclose or submit a report as provided in paragraph 198.3 (b). If the state auditor has not received a copy of a 198.4 disclosure or a report described in this paragraph on or before 198.5 the third Tuesday of November of the year in which the 198.6 disclosure or report was required to be made or submitted, the 198.7 state auditor shall mail a written notice to the county auditor 198.8 to hold the distribution of tax increment from a particular 198.9 district or districts. 198.10 (b) Upon receiving written notice from the state auditor to 198.11 hold the distribution of tax increment, the county auditor shall 198.12 hold: 198.13 (1) 25 percent of the amount of tax increment that 198.14 otherwise would be distributed, if the distribution is made 198.15 after the third Friday in November but during the year in which 198.16 the disclosure or report was required to be made or submitted; 198.17 or 198.18 (2) 100 percent of the amount of tax increment that 198.19 otherwise would be distributed, if the distribution is made 198.20 after December 31 of the year in which the disclosure or report 198.21 was required to be made or submitted. 198.22 (c) Upon receiving the copy of the disclosure and all of 198.23 the reports described in paragraph (a) with respect to a 198.24 district regarding which the state auditor has mailed to the 198.25 county auditor a written notice to hold distribution of tax 198.26 increment, the state auditor shall mail to the county auditor a 198.27 written notice lifting the hold and authorizing the county 198.28 auditor to distribute to the authority or municipality any tax 198.29 increment that the county auditor had held pursuant to paragraph 198.30 (b). The state auditor shall mail the written notice required 198.31 by this paragraph within five working days after receiving the 198.32 last outstanding item. The county auditor shall distribute the 198.33 tax increment to the authority or municipality within 15 working 198.34 days after receiving the written notice required by this 198.35 paragraph. 198.36 (d) Notwithstanding any law to the contrary, any interest 199.1 that accrues on tax increment while it is being held by the 199.2 county auditor pursuant to paragraph (b) is not tax increment 199.3 and may be retained by the county. 199.4 (e) For purposes of sections 469.176, subdivisions 1a to 199.5 1g, and 469.177, subdivision 11, tax increment being held by the 199.6 county auditor pursuant to paragraph (b) shall be considered 199.7 distributed to or received by the authority or municipality as 199.8 of the time that it would have been distributed or received but 199.9 for paragraph (b). 199.10 Sec. 13. Minnesota Statutes 1996, section 469.1771, 199.11 subdivision 5, is amended to read: 199.12 Subd. 5. [DISPOSITION OF PAYMENTS.] If the authority does 199.13 not have sufficient increments or other available money to make 199.14 a payment required by this section, the municipality that 199.15 approved the district must use any available money to make the 199.16 payment including the levying of property taxes. Money received 199.17 by the county auditor under this section must be distributed as 199.18 excess increments under section 469.176, subdivision 2, 199.19 paragraph (a), clause (4)., except that if the county auditor 199.20 receives the payment after (1) 60 days from a municipality's 199.21 receipt of the state auditor's notification of noncompliance 199.22 requiring the payment, or (2) the commencement of an action by 199.23 the county attorney to compel the payment, then no distributions 199.24 may be made to the municipality that approved the tax increment 199.25 financing district. 199.26 Sec. 14. [GOLDEN VALLEY; TIF.] 199.27 Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding 199.28 Minnesota Statutes, section 469.176, subdivision 1c, tax 199.29 increments from the Valley Square tax increment financing 199.30 district shall be paid to the housing and redevelopment 199.31 authority of the city of Golden Valley for property taxes 199.32 payable in 2001 through 2010 for the following parcels in the 199.33 district, identified by their property tax identification 199.34 numbers: 199.35 (1) 31-118-21-14-0001; 199.36 (2) 31-118-21-14-0006; 200.1 (3) 31-118-21-14-0018 through 31-118-21-14-0022; 200.2 (4) 31-118-21-14-0029 through 31-118-21-14-0032; and 200.3 (5) 31-118-21-41-0001. 200.4 (b) Increments permitted to be paid to the authority by 200.5 paragraph (a) may only be used to pay or defease bonds issued to 200.6 fund public redevelopment costs within the redevelopment project 200.7 or bonds issued to refund the bonds. 200.8 (c) Collection or receipt of increments by the housing and 200.9 redevelopment authority under paragraph (a) does not reduce or 200.10 affect the amount of increments that the authority may receive 200.11 after April 1, 2001, for the district to pay bonds issued before 200.12 April 1, 1990. 200.13 (d) Any housing financed or assisted, directly or 200.14 indirectly, with increments from the district during the 200.15 extension period permitted by this section must meet the 200.16 requirements of Minnesota Statutes, section 469.1761. 200.17 Subd. 2. [EFFECTIVE DATE.] This section is effective the 200.18 day after compliance with the requirements of Minnesota 200.19 Statutes, sections 469.1782, subdivision 2; and 645.021, 200.20 subdivision 3. 200.21 Sec. 15. [BROOKLYN CENTER SPECIAL TAXING DISTRICT 200.22 PROCEDURES.] 200.23 Subdivision 1. [DEFINITIONS.] (a) As used in this section, 200.24 the terms defined in this subdivision have the meanings given 200.25 them. 200.26 (b) "City" means the city of Brooklyn Center. 200.27 (c) "Enabling ordinance" means the ordinance adopted by the 200.28 city council establishing the Brookdale special taxing district. 200.29 (d) "Brookdale special taxing district" means all or any 200.30 portion of the following described property within tax increment 200.31 financing district No. 3 in the city: 200.32 All that property that is located within the area bounded 200.33 by a continuous line beginning at a point at the intersection of 200.34 county road No. 10 and trunk highway No. 100 and going 200.35 southwesterly along the center line of trunk highway No. 100 to 200.36 its intersection with Brooklyn Boulevard; thence northerly along 201.1 the center line of Brooklyn Boulevard to a point 476.52 feet 201.2 northerly of the intersection of Brooklyn Boulevard and county 201.3 road No. 10; thence easterly from that point along a straight 201.4 line to the center line of Shingle Creek; thence southerly along 201.5 the center line of Shingle Creek to its intersection with the 201.6 north right-of-way line of county road No. 10; thence easterly 201.7 along the north right-of-way line of county road No. 10 to the 201.8 east right-of-way line of Shingle Creek Parkway; thence 201.9 northerly along the west property line of lot 2, block 2, 201.10 Brookdale square addition 165.43 feet; thence northeasterly 201.11 along the northwest property line of lot 2, block 2, Brookdale 201.12 square addition 297.73 feet; thence easterly along the north 201.13 property line of lot 2, block 2, Brookdale square addition 201.14 914.34 feet; thence southerly 517.9 feet along the easterly 201.15 property line of lot 2, block 2, Brookdale square addition 201.16 extended to the center line of county road No. 10; thence 201.17 easterly along the center line of county road No. 10 to the 201.18 point of the beginning. 201.19 (e) "Redevelopment services" has the meaning given in the 201.20 city's enabling ordinance, and may include any services or 201.21 expenditures the city or its economic development authority may 201.22 provide or incur under Minnesota Statutes, sections 469.001 to 201.23 469.047, and 469.090 to 469.1081, including without limitation 201.24 amounts necessary to pay the principal of or interest on bonds 201.25 issued by the city or its economic development authority under 201.26 Minnesota Statutes, section 469.178. 201.27 Subd. 2. [ESTABLISHMENT OF SPECIAL TAXING DISTRICT.] 201.28 (a) The governing body of the city may adopt an ordinance 201.29 establishing the Brookdale special taxing district. The 201.30 ordinance must describe with particularity the property to be 201.31 included in the district and the redevelopment services to be 201.32 provided in the district. Only property that is subject to an 201.33 assessment agreement with the city or its economic development 201.34 authority under Minnesota Statutes, section 469.177, subdivision 201.35 8, as of the date of adoption of the ordinance may be included 201.36 within the Brookdale special taxing district and be subject to 202.1 the tax imposed by the city on the district. The area of the 202.2 Brookdale special taxing district may include noncontiguous 202.3 parcels within the area described in subdivision 1, paragraph 202.4 (c). 202.5 (b) The city may impose a tax under this section that is 202.6 reasonably related to the redevelopment services provided. 202.7 (c) The boundaries of the Brookdale special taxing district 202.8 may be enlarged or reduced under the procedures for 202.9 establishment of the district under paragraph (a). Property 202.10 added to the district is subject to the special tax imposed 202.11 within the district after the property becomes a part of the 202.12 district. 202.13 Subd. 3. [SPECIAL TAX AUTHORITY.] (a) A special tax may be 202.14 imposed by the city within the Brookdale special taxing district 202.15 at a rate or amount sufficient to produce the revenues required 202.16 to provide redevelopment services within the district. The 202.17 special tax is payable only in a year in which the assessment 202.18 agreement for the property subject to the tax remains in effect 202.19 for that taxes payable year. The maximum levy may not exceed 202.20 the amount specified in the assessment agreement. 202.21 (b) The special tax imposed under this section is not 202.22 included in the calculation of levies or limits imposed under 202.23 law or chapter. 202.24 Subd. 4. [COLLECTION OF SPECIAL TAX.] The special tax must 202.25 be imposed on the net tax capacity of the taxable property 202.26 located in the geographic area described in the ordinance. 202.27 Taxable net tax capacity must be determined without regard to 202.28 captured or original net tax capacity under Minnesota Statutes, 202.29 section 469.177, or to the distribution or contribution value 202.30 under Minnesota Statutes, section 473F.08. The special tax is 202.31 payable and must be collected at the same time and in the same 202.32 manner as provided for payment and collection of ad valorem 202.33 taxes. Special taxes not paid on or before the applicable due 202.34 date are subject to the same penalty and interest as ad valorem 202.35 tax amounts not paid by the respective due date. The due date 202.36 for the special tax is the due date for the real property tax 203.1 for the property on which the special tax is imposed. 203.2 Subd. 5. [EFFECTIVE DATE.] This section is effective upon 203.3 compliance by the city of Brooklyn Center with Minnesota 203.4 Statutes, section 645.021, subdivision 3. 203.5 Sec. 16. [CITY OF BROWERVILLE; TIF.] 203.6 Subdivision 1. [EXPENDITURE OUTSIDE 203.7 DISTRICT.] Notwithstanding the provisions of Minnesota Statutes, 203.8 section 469.1763, the city of Browerville may expend tax 203.9 increments from tax increment district No. 2 for eligible 203.10 activities outside tax increment district No. 2 but within 203.11 development district No. 1. The limitations contained in 203.12 Minnesota Statutes, section 469.1763, subdivision 2, do not 203.13 apply, if the expenditures are used to finance improvements to 203.14 provide sewer and water service to the tax increment financing 203.15 district. 203.16 Subd. 2. [EFFECTIVE DATE.] This section is effective only 203.17 after its approval by the governing body of the city of 203.18 Browerville and compliance with Minnesota Statutes, section 203.19 645.021, subdivision 3. 203.20 Sec. 17. [CITY OF DEEPHAVEN; TAX INCREMENT FINANCING.] 203.21 Subdivision 1. [AUTHORIZATION OF 203.22 EXPENDITURES.] Notwithstanding any law to the contrary, the city 203.23 of Deephaven may expend revenues derived from tax increment 203.24 financing district number 1-1 that are available and 203.25 unencumbered on the date of enactment of this act to finance a 203.26 public improvement located outside of the district under the 203.27 conditions in subdivision 2. The public improvement must be 203.28 included in the tax increment plan prior to January 1, 1997. 203.29 Subd. 2. [CONDITIONS ON USE.] The authority under 203.30 subdivision 1 to spend increments outside of the tax increment 203.31 financing district number 1-1 is subject to the following 203.32 conditions: 203.33 (1) The city must decertify district number 1-1 by no later 203.34 than December 31, 1998. 203.35 (2) The city transfers no more than $700,000 of increments 203.36 from district number 1-1 to a separate account on the city's 204.1 books and records. The interest earned on this account is not 204.2 tax increment for purposes of Minnesota Statutes, sections 204.3 469.174 to 469.179. 204.4 (3) Any unspent increments from district number 1-1 after 204.5 the transfer under clause (2) are excess increments that must be 204.6 distributed under Minnesota Statutes, section 469.176, 204.7 subdivision 2, clause (4). 204.8 (4) Money in the account established under clause (2) may 204.9 only be spent to pay for the improvement of the Minnetonka 204.10 boulevard-Carsons Bay bridge project in the city. If matching 204.11 funds are not received for the project by December 31, 2002, the 204.12 balance in the account must be distributed as excess increments 204.13 under Minnesota Statutes, section 469.176, subdivision 2, clause 204.14 (4). Any unspent amounts after completion of the project must 204.15 be distributed as excess increments under Minnesota Statutes, 204.16 section 469.176, subdivision 2, clause (4). 204.17 (5) The authority to spend increments from district number 204.18 1-1 other than money transferred to the account under clause (2) 204.19 expires upon the day following final enactment of this act. 204.20 Subd. 3. [EFFECTIVE DATE.] This section is effective the 204.21 day upon approval by the governing body of the city of Deephaven 204.22 and compliance with Minnesota Statutes, section 645.021, 204.23 subdivision 3, and applies to revenues expended after the date 204.24 of final enactment. 204.25 Sec. 18. [CITY OF BURNSVILLE; ADMISSIONS TAX.] 204.26 Subdivision 1. [IMPOSITION.] Notwithstanding Minnesota 204.27 Statutes, section 477A.016, or any other contrary provision of 204.28 law or ordinance, the governing body of the city of Burnsville 204.29 may by ordinance impose a tax on admissions to an amphitheater 204.30 to be constructed within the city. 204.31 Subd. 2. [RATE.] The tax may be imposed at a rate not to 204.32 exceed $2 per paid admission. The governing body of the city 204.33 may by ordinance change the rate imposed, subject to the 204.34 limitation in this subdivision. 204.35 Subd. 3. [COLLECTION.] The method of collection of the tax 204.36 must be specified in the ordinance imposing the tax. The tax is 205.1 exempt from the rules under Minnesota Statutes, section 205.2 297A.48. The commissioner of revenue and the city may enter 205.3 into agreements for the collection and administration of the tax 205.4 by the state on behalf of the city. The commissioner may charge 205.5 the city a reasonable fee for its services from the proceeds of 205.6 the tax. The tax is subject to the same interest, penalties, 205.7 and enforcement provisions as the tax imposed under Minnesota 205.8 Statutes, chapter 297A. 205.9 Subd. 4. [USE OF PROCEEDS.] The city must pay money 205.10 received from the tax imposed under this section into a separate 205.11 fund or account to be used only to pay: 205.12 (1) the costs of imposing and collecting the tax; and 205.13 (2) for parking lots or ramps, and other public 205.14 improvements as defined by Minnesota Statutes, section 429.021, 205.15 within the boundaries of the tax increment financing district 205.16 established under section 19, or that serve the area within the 205.17 district. 205.18 Subd. 5. [EFFECTIVE DATE.] This section is effective the 205.19 day following final enactment. 205.20 Sec. 19. [CITY OF BURNSVILLE; TAX INCREMENT FINANCING 205.21 DISTRICT.] 205.22 Subdivision 1. [AUTHORIZATION.] The governing body of the 205.23 city of Burnsville may create a soils condition tax increment 205.24 financing district, as provided in this section, for an 205.25 amphitheater and related infrastructure improvements. Except as 205.26 otherwise provided in this section, the provisions of Minnesota 205.27 Statutes, sections 469.174 to 469.179, apply to the district. 205.28 The city or its economic development authority may be the 205.29 "authority" for the purposes of Minnesota Statutes, sections 205.30 469.174 to 469.179. 205.31 Subd. 2. [SPECIAL RULES.] (a) The district established 205.32 under subdivision 1 is subject to the provisions of Minnesota 205.33 Statutes, sections 469.174 to 469.179, except as provided in 205.34 this subdivision. 205.35 (b) The district may consist of all or any portion of the 205.36 parcels designated by the city of Burnsville as development 206.1 district No. 2 as of April 26, 1990. 206.2 (c) Minnesota Statutes, sections 469.174, subdivision 19, 206.3 and 469.176, subdivision 4b, do not apply to the district. 206.4 (d) Upon approval of the tax increment financing plan, the 206.5 governing body of the city of Burnsville must find that the 206.6 present value of the projected cost of closure of the former 206.7 solid waste landfill within the district equals or exceeds the 206.8 present value of the projected tax increments for the maximum 206.9 duration of the district permitted by the plan. 206.10 (e) Notwithstanding the provisions of Minnesota Statutes, 206.11 section 469.1763, increments from the district established under 206.12 this section may only be expended on improvements and activities 206.13 within or directly in aid of the district and on administrative 206.14 expenses. 206.15 Subd. 3. [DISTRICT NO. 2-1.] Upon approval of the tax 206.16 increment financing plan for the district created under 206.17 subdivision 1, the city shall decertify tax increment financing 206.18 district No. 2-1. The balance of the tax increments derived 206.19 from tax increment financing district No. 2-1 may be expended 206.20 under the tax increment financing plan for the district created 206.21 under subdivision 1. Minnesota Statutes, section 469.176, 206.22 subdivision 4c, does not apply to the expenditures. Minnesota 206.23 Statutes, section 469.1782, subdivision 1, does not apply to tax 206.24 increment financing district No. 2-1 or the district created 206.25 under subdivision 1. 206.26 Subd. 4. [EFFECTIVE DATE.] This section is effective upon 206.27 compliance with Minnesota Statutes, sections 469.1782, 206.28 subdivision 2, and 645.021, subdivision 2. 206.29 Sec. 20. [REDEVELOPMENT DISTRICT FOR SEARS PROJECT.] 206.30 Subdivision 1. [AUTHORIZATION.] Upon approval of the 206.31 governing body of the city of Minneapolis by resolution, the 206.32 Minneapolis community development agency may establish for the 206.33 Sears project a redevelopment tax increment financing district 206.34 with phased redevelopment. The district is subject to Minnesota 206.35 Statutes, sections 469.174 to 469.179, as amended, except as 206.36 provided in this section. 207.1 Subd. 2. [DURATION OF DISTRICT.] Notwithstanding the 207.2 provisions of Minnesota Statutes, section 469.176, subdivision 207.3 1b, no tax increment shall be paid to the authority after 18 207.4 years from the date of receipt by the authority of the first 207.5 increment generated from the final phase of redevelopment. In 207.6 no case may increments be paid to the authority after 30 years 207.7 from approval of the tax increment plan. "Final phase of 207.8 redevelopment" means that phase of redevelopment activity which 207.9 completes the rehabilitation of the Sears site. 207.10 Subd. 3. [REMOVAL OF HAZARDOUS SUBSTANCES.] For purposes 207.11 of the three-year activity rule under Minnesota Statutes, 207.12 section 469.176, subdivision 1a, and the four-year action 207.13 requirement under Minnesota Statutes, section 469.176, 207.14 subdivision 6, the removal of hazardous substances from the site 207.15 shall constitute a qualifying activity. 207.16 Subd. 4. [FIVE-YEAR RULE.] The five-year period under 207.17 Minnesota Statutes, section 469.1763, subdivision 3, is extended 207.18 to ten years. 207.19 Subd. 5. [NO POOLING AUTHORITY.] Notwithstanding the 207.20 provisions of Minnesota Statutes, section 469.1763, increments 207.21 from the district established under this section may only be 207.22 expended on improvements and activities within or directly in 207.23 aid of the district and on administrative expenses. 207.24 Subd. 6. [EFFECTIVE DATE.] This section is effective upon 207.25 compliance with Minnesota Statutes, sections 469.1782, 207.26 subdivision 2, and 645.021, subdivision 2. 207.27 Sec. 21. [CITY OF WEST ST. PAUL; DAKOTA COUNTY HOUSING AND 207.28 REDEVELOPMENT AUTHORITY; EXCEPTION TO TAX INCREMENT FINANCING 207.29 REQUIREMENTS.] 207.30 Subdivision 1. [GENERALLY.] The city of West St. Paul and 207.31 the Dakota county housing and redevelopment authority may 207.32 operate the Signal Hills redevelopment tax increment financing 207.33 district (Dakota county housing and redevelopment authority tax 207.34 increment financing district No. 10) under the provisions of 207.35 this section. 207.36 Subd. 2. [TIME LIMIT FOR INITIATING ACTION.] The time 208.1 limits for initiation of activity in the district and reporting 208.2 the initiation to the county auditor under Minnesota Statutes, 208.3 section 469.176, subdivision 6, are extended to five and six 208.4 years, respectively. 208.5 Subd. 3. [FIVE-YEAR RULE.] The district is subject to the 208.6 requirement of Minnesota Statutes, section 469.1763, subdivision 208.7 3, except that the five-year period is extended to a seven-year 208.8 period. 208.9 Subd. 4. [THREE-YEAR RULE; EXCEPTION.] The district is 208.10 subject to the provisions of Minnesota Statutes, section 208.11 469.176, subdivision 1a, except that any references to three 208.12 years in that section are five years for purposes of this 208.13 section. 208.14 Subd. 5. [EFFECTIVE DATE.] This section is effective upon 208.15 approval by the governing bodies of the city of West St. Paul 208.16 and Dakota county and upon compliance by the city with Minnesota 208.17 Statutes, section 645.021, subdivision 3. 208.18 Sec. 22. [CITY OF RENVILLE; TAX INCREMENT FINANCING 208.19 DISTRICT.] 208.20 Subdivision 1. [CERTIFICATION DATE.] Except as otherwise 208.21 provided in this section, for purposes of Minnesota Statutes, 208.22 section 273.1399, and chapter 469, the certification date of the 208.23 addition of the following described property to tax increment 208.24 financing district No. 1 in the city of Renville is deemed to be 208.25 November 1, 1994: Lots 5, 6, 7, 8, and 9, Block 32, O'Connor's 208.26 Addition. 208.27 Subd. 2. [ORIGINAL NET TAX CAPACITY; ORIGINAL LOCAL TAX 208.28 RATE.] The original net tax capacity of property in subdivision 208.29 1 is $432. 208.30 Subd. 3. [EXPENDITURE OF INCREMENT.] Notwithstanding the 208.31 provisions of Minnesota Statutes, section 469.176, subdivision 208.32 1b, the city of Renville may collect and expend tax increment 208.33 generated by the lots cited in subdivision 1, in tax increment 208.34 financing district No. 1 in the city of Renville, until December 208.35 31, 2003. 208.36 Subd. 4. [LOCAL APPROVAL.] This section is effective upon 209.1 compliance with Minnesota Statutes, sections 469.1782, 209.2 subdivision 2, and 645.021, subdivision 3. 209.3 Sec. 23. [CITY OF FOLEY; TAX INCREMENT FINANCING.] 209.4 Subdivision 1. [EXPENDITURE AUTHORITY.] Notwithstanding 209.5 any law to the contrary, expenditures by the city of Foley 209.6 before January 1, 1998, of revenue derived from tax increment 209.7 financing district number 1 to finance a wastewater treatment 209.8 facility located outside of the district are authorized 209.9 expenditures of that revenue. 209.10 Subd. 2. [CONDITIONS.] The authority to spend increment 209.11 under subdivision 1 on the wastewater treatment facility is 209.12 subject to the following conditions: 209.13 (1) The city must decertify tax increment financing 209.14 district number 1 by no later than December 31, 1998; and 209.15 (2) Any unspent increments and any increments collected 209.16 after December 31, 1997, must be distributed under Minnesota 209.17 Statutes, section 469.176, subdivision 2, clause (4). 209.18 Subd. 3. [EFFECTIVE DATE.] This section is effective upon 209.19 local approval by the governing body of the city of Foley. 209.20 Sec. 24. [COON RAPIDS; TIF.] 209.21 Subdivision 1. [AUTHORIZATION.] Notwithstanding the 209.22 provisions of Minnesota Statutes, section 469.176, subdivision 209.23 1b, upon approval of the governing body of the city of Coon 209.24 Rapids by resolution, the duration of the tax increment 209.25 financing districts of the Coon Rapids economic development 209.26 authority designated 2-2 and 2-3 may be extended to December 31, 209.27 2010. 209.28 Subd. 2. [SPECIAL RULES.] (a) The tax increment financing 209.29 districts of the Coon Rapids economic development authority 209.30 designated 2-2 and 2-3 are subject to Minnesota Statutes, 209.31 sections 469.174 to 469.178, except as provided in this 209.32 subdivision. 209.33 (b) Tax increment revenues derived from the districts may 209.34 only be applied to the payment of project costs described in the 209.35 tax increment plans for the tax increment financing districts on 209.36 the date of final enactment of this section and to the payment 210.1 of the costs incurred with respect to the reconstruction and 210.2 upgrading of the existing state and county bridges and roadways 210.3 within the project area of the districts. 210.4 (c) Notwithstanding Minnesota Statutes, section 469.176, 210.5 subdivision 1, tax increment revenue generated from each 210.6 district may be paid to the authority until the earlier of (1) 210.7 December 31, 2010, or (2) the date upon which all bonded 210.8 indebtedness or contractual obligations of the authority 210.9 relating to the districts have terminated. 210.10 Subd. 3. [STATE AID OFFSET; EXEMPTION.] If Coon Rapids, 210.11 under Minnesota Statutes, section 469.1782, subdivision 1, 210.12 elects that the districts are subject to Minnesota Statutes, 210.13 section 273.1399, subdivision 8, the last sentence of Minnesota 210.14 Statutes, section 273.1399, subdivision 8, does not apply, and 210.15 Coon Rapids may elect to apply the exemption provided by 210.16 Minnesota Statutes, section 273.1399, subdivision 6, paragraph 210.17 (d). 210.18 Subd. 4. [EFFECTIVE DATE.] This section is effective upon 210.19 compliance by the governing bodies of the city of Coon Rapids, 210.20 the county of Anoka, and independent school district No. 11, 210.21 Anoka-Hennepin, with Minnesota Statutes, sections 469.1782, 210.22 subdivision 2, and 645.021, subdivision 2. 210.23 Sec. 25. [CITY OF GARRISON; TIF.] 210.24 Subdivision 1. [SPECIAL TAXING AUTHORITY.] (a) After 30 210.25 days' notice and a public hearing, the governing body of the 210.26 city of Garrison may establish a special taxing district 210.27 consisting of all or a part of the geographic area of tax 210.28 increment financing district number 1. The city may enlarge or 210.29 reduce the geographic area in which the tax applies. 210.30 (b) The city may impose an ad valorem tax on the net tax 210.31 capacity of the special taxing district. The tax must be 210.32 computed without regard to captured net tax capacity. The tax 210.33 imposed is in addition to the tax imposed by the city, county, 210.34 school district, and any other special taxing district. 210.35 (c) The tax that may be levied on the special taxing 210.36 district may not exceed the sum of (1) the city tax rate 211.1 multiplied by the captured net tax capacity of tax increment 211.2 financing district number, plus (2) the amount of the reduction 211.3 in state aid under Minnesota Statutes, section 273.1399, as a 211.4 result of tax increment financing district number 1. 211.5 (d) A tax imposed under this subdivision is payable and 211.6 must be collected at the same time and in the same manner as 211.7 provided for payment and collection of ad valorem taxes. Taxes 211.8 not paid on or before the applicable due date are subject to the 211.9 same penalty and interest as ad valorem taxes not paid by the 211.10 respective due date. The due date for the tax is the due date 211.11 for the real property tax for the property on which the tax 211.12 under this subdivision is imposed. 211.13 (e) Notwithstanding any law to the contrary, the proceeds 211.14 of the tax under this section are not developer payments and may 211.15 be used to offset the reduction in state aid under Minnesota 211.16 Statutes, section 273.1399. 211.17 (f) The authority to impose a tax under this subdivision 211.18 expires upon decertification of tax increment financing district 211.19 number 1. 211.20 Subd. 2. [AUTHORITY TO DECERTIFY.] (a) Notwithstanding any 211.21 law to the contrary, the governing body of the city of Garrison 211.22 may decertify tax increment financing district number 1, if the 211.23 city finds that: 211.24 (1) one or more public officials who took official action 211.25 on or advised the city on the creation of the district had a 211.26 financial interest in or benefited from the acquisition of or 211.27 development of property by the district and failed to disclose 211.28 that interest; or 211.29 (2) the city failed to comply with the requirements of 211.30 Minnesota Statutes, section 469.175, subdivision 2, or any other 211.31 legal requirement that is a condition that must be satisfied 211.32 before the tax increment financing plan is approved and 211.33 certification of the district requested. 211.34 (b) If the city decertifies the district under this 211.35 subdivision, the district is void and the city may not be held 211.36 liable to pay any obligations of the district or damages for 212.1 breach or violation of the contract. 212.2 (c) For purposes of this subdivision, "public official" 212.3 means an elected official or a licensed attorney retained to 212.4 provide legal counsel to the city. 212.5 Sec. 26. [NEW BRIGHTON; TIF.] 212.6 Subdivision 1. [FIVE-YEAR RULE.] If the city of New 212.7 Brighton or a development authority of the city establishes a 212.8 redevelopment district in or consisting of the area bounded on 212.9 the north by the south boundary line of tax increment district 212.10 number 8 extended to Long Lake regional park, on the east by 212.11 interstate highway 35W, on the south by interstate highway 694, 212.12 and on the west by Long Lake regional park, the city may elect 212.13 to extend the five-year rule under Minnesota Statutes, section 212.14 469.1763, subdivision 3, to seven years for the district. The 212.15 election must be made at the time the governing body of the city 212.16 approves the tax increment financing plan. This authority 212.17 applies to only one district. 212.18 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 212.19 compliance by the governing body of the city of New Brighton 212.20 with Minnesota Statutes, section 645.021. 212.21 Sec. 27. [EFFECTIVE DATE.] 212.22 Sections 1, 2, and 10 are effective for requests for 212.23 certification of tax increment financing districts made after 212.24 June 30, 1998. 212.25 Sections 3 and 4 are effective the day following final 212.26 enactment. 212.27 Sections 5, 9, and 11 apply to tax increment financing 212.28 districts certified before, on, or after August 1, 1979. 212.29 Sections 6, 7, 8, and 12 are effective for disclosures 212.30 required to be made and reports required to be submitted on or 212.31 before a date beginning August 1, 1999. 212.32 ARTICLE 11 212.33 BORDER CITY ZONES 212.34 Section 1. [272.0212] [BORDER DEVELOPMENT ZONE PROPERTY.] 212.35 Subdivision 1. [EXEMPTION.] All qualified property in a 212.36 zone is exempt to the extent and for the duration provided by 213.1 the zone designation and under sections 469.1931 to 469.1933. 213.2 Subd. 2. [LIMITS ON EXEMPTION.] Property in a zone is not 213.3 exempt under this section from the following: 213.4 (1) special assessments; 213.5 (2) ad valorem property taxes specifically levied for the 213.6 payment of principal and interest on debt obligations; and 213.7 (3) all taxes levied by a school district, except equalized 213.8 school levies as defined in section 273.1398, subdivision 1, 213.9 paragraph (e). 213.10 Subd. 3. [STATE AID.] Property exempt under this section 213.11 is included in the net tax capacity for purposes of computing 213.12 aids under chapter 477A. 213.13 Subd. 4. [DEFINITIONS.] (a) For purposes of this section, 213.14 the following terms have the meanings given. 213.15 (b) "Qualified property" means class 3 and class 5 property 213.16 as defined in section 273.13 that is located in a zone. 213.17 (c) "Zone" means a border city development zone designated 213.18 under the provisions of section 469.1931. 213.19 Sec. 2. Minnesota Statutes 1996, section 290.06, is 213.20 amended by adding a subdivision to read: 213.21 Subd. 26. [BORDER CITY ZONE CREDIT.] (a) A corporation may 213.22 claim a credit against the tax imposed by this section and 213.23 sections 290.0921 and 290.0922. The allowable credit equals the 213.24 tax liability attributable to business conducted within a zone. 213.25 (b) Tax liability means the tax liability under this 213.26 section and sections 290.0921 and 290.0922 after any other 213.27 credits. 213.28 (c) The tax liability attributable to business conducted 213.29 within a zone means the taxpayer's tax liability multiplied by a 213.30 fraction: 213.31 (1) the numerator of which is (i) the ratio of the 213.32 taxpayer's property factor under section 290.191 located in the 213.33 zone for the taxable year minus the property factor located in 213.34 zone for the taxable year immediately before the zone 213.35 designation took effect to the taxpayer's total Minnesota 213.36 property factor, plus (ii) the ratio of the taxpayer's payroll 214.1 factor under section 290.191 for services performed in the zone 214.2 for the taxable year minus the payroll factor for services 214.3 performed in zone for the taxable year immediately before the 214.4 zone designation took effect to the taxpayer's total Minnesota 214.5 payroll factor; and 214.6 (2) the denominator of which is two. 214.7 (d) Any portion of the taxpayer's tax liability that is 214.8 attributable to illegal activity conducted in the zone must not 214.9 be used to calculate a credit under this subdivision. 214.10 (e) The credit allowed under this section continues through 214.11 the taxable year in which the zone designation expires. 214.12 (f) To be eligible for a credit under this subdivision, the 214.13 taxpayer must file an annual return under this chapter. 214.14 (g) The credit allowed under this subdivision may not 214.15 exceed the lesser of: 214.16 (1) the tax liability of the taxpayer for the taxable year; 214.17 or 214.18 (2) for taxable years beginning before January 1, 2002, the 214.19 amount of the tax credit certificates received by the taxpayer 214.20 from the city, less any tax credit certificates used under 214.21 section 297A.25, subdivision 73. 214.22 (h) "Zone" means a border city development zone designated 214.23 under the provisions of section 469.1931. 214.24 Sec. 3. Minnesota Statutes 1996, section 297A.25, is 214.25 amended by adding a subdivision to read: 214.26 Subd. 74. [BORDER CITIES; CAPITAL EQUIPMENT; CONSTRUCTION 214.27 MATERIALS.] (a) The gross receipts from the sale of machinery 214.28 and equipment and repair parts are exempt, if the machinery and 214.29 equipment: 214.30 (1) are used in connection with a trade or business; 214.31 (2) are placed in service in a zone under section 469.1931; 214.32 and 214.33 (3) have a useful life of 12 months or more. 214.34 (b) The gross receipts from the sale of construction 214.35 materials are exempt, if they are used to construct a facility 214.36 for use in a trade or business located in a zone under section 215.1 469.1931. 215.2 (c) The exemptions under this subdivision apply regardless 215.3 of whether the purchase is made by the owner, the user, or a 215.4 contractor. 215.5 (d) For purchases made before July 1, 2001, a purchaser may 215.6 claim an exemption under this subdivision for tax on the 215.7 purchases up to, but not exceeding: 215.8 (1) the amount of the tax credit certificates received from 215.9 the city, less 215.10 (2) any tax credit certificates used under the provisions 215.11 of section 290.06, subdivisions 26. 215.12 Sec. 4. Minnesota Statutes 1996, section 469.170, is 215.13 amended by adding a subdivision to read: 215.14 Subd. 5e. [LIMITS ON MULTIYEAR PLANS.] The requirements 215.15 for a multiyear enterprise zone tax credit distribution plan 215.16 under subdivisions 5a to 5d apply only for: 215.17 (1) each business that will receive more than $25,000 in 215.18 credits in a year; or 215.19 (2) tax reductions under section 469.171, subdivision 1, 215.20 for businesses in areas designated under section 469.171, 215.21 subdivision 5. 215.22 Sec. 5. Minnesota Statutes 1996, section 469.171, 215.23 subdivision 9, is amended to read: 215.24 Subd. 9. [RECAPTURE.] Any business that (1) receives tax 215.25 reductions authorized by subdivisions 1 to 8, classification as 215.26 employment property pursuant to section 469.170, or an 215.27 alternative local contribution under section 469.169, 215.28 subdivision 5; and (2) ceases to operate its facility located 215.29 within the enterprise zonewithin two years after the expiration215.30of the tax reductionsshall repay the amount of the tax 215.31 reduction or local contributionpursuant to the following215.32schedule:215.33TerminationRepayment215.34of operationsPortion215.35Less than 6 months100 percent215.366 months or more but less than 12 months75 percent216.112 months or more but less than 18 months50 percent216.218 months or more but less than 24 months25 percent216.3 received during the two years immediately before it stopped 216.4 operating in the zone. 216.5 The repayment must be paid to the state to the extent it 216.6 represents a tax reduction under subdivisions 1 to 8 and to the 216.7 municipality to the extent it represents a property tax 216.8 reduction or other local contribution. Any amount repaid to the 216.9 state must be credited to the amount certified as available for 216.10 tax reductions in the zone pursuant to section 469.169, 216.11 subdivision 7. Any amount repaid to the municipality must be 216.12 used by the municipality for economic development purposes. The 216.13 commissioner of revenue may seek repayment of tax credits from a 216.14 business ceasing to operate within an enterprise zone. 216.15 Sec. 6. [469.1931] [BORDER CITY DEVELOPMENT ZONES.] 216.16 Subdivision 1. [DESIGNATION.] To encourage economic 216.17 development, to revitalize the designated areas, to expand tax 216.18 base and economic activity, and to provide job creation, growth, 216.19 and retention, Breckenridge and East Grand Forks may designate, 216.20 by resolution, all or any part of the city as a development zone. 216.21 Subd. 2. [DEVELOPMENT PLAN.] (a) Before designating a 216.22 development zone, the city must adopt a written development plan 216.23 that addresses: 216.24 (1) evidence of adverse economic conditions within the area 216.25 resulting from competition with the bordering state or the 1997 216.26 floods or both; 216.27 (2) the viability of the development plan; 216.28 (3) public and private commitment to and other resources 216.29 available for the area; 216.30 (4) how designation would relate to a development and 216.31 revitalization plan for the city as a whole; and 216.32 (5) how the local regulatory burden will be eased for 216.33 businesses operating in the area. 216.34 (b) The development plan must include: 216.35 (1) a map of the proposed zone that indicates the 216.36 geographic boundaries, the total area, and the present use and 217.1 conditions generally of land and structures within the area; 217.2 (2) evidence of community support and commitment from 217.3 business interests; 217.4 (3) a description of the methods proposed to increase 217.5 economic opportunity and expansion, facilitate infrastructure 217.6 improvement, and identify job opportunities; and 217.7 (4) the duration of the zone designation, not to exceed 15 217.8 years. 217.9 Subd. 3. [FILING.] The city must file a copy of the 217.10 resolution and development plan with the commissioner of trade 217.11 and economic development. The designation takes effect for the 217.12 first calendar year that begins more than 90 days after the 217.13 filing. 217.14 Sec. 7. [469.1932] [TAX INCENTIVES.] 217.15 Subdivision 1. [ZONE INCENTIVES.] A business that conducts 217.16 business activity within a border city development zone may 217.17 qualify for the property tax exemption under section 272.0212, 217.18 the corporate franchise tax credit under section 290.06, 217.19 subdivision 26, and the sales tax exemption under section 217.20 297A.25, subdivision 73. 217.21 Subd. 2. [PHASEOUT AT END OF ZONE DURATION.] During the 217.22 last three years of the duration of a border city development 217.23 zone, the available exemptions, subtractions, or credits are 217.24 reduced by the following percentages for the taxes payable year 217.25 or the taxable years that begin during: 217.26 (1) the calendar year that is two years before the final 217.27 year of designation as a development zone, 25 percent; 217.28 (2) the calendar year that is immediately before the final 217.29 year of designation as a development zone, 50 percent; and 217.30 (3) for the final calendar year of designation as a 217.31 development zone, 75 percent. 217.32 Sec. 8. [469.1933] [DISQUALIFIED TAXPAYERS.] 217.33 Subdivision 1. [DELINQUENT TAXPAYERS.] An individual who 217.34 is a resident of a border city development zone or a business 217.35 that conducts business activity within a border city development 217.36 zone is not eligible for the exemptions or credits available in 218.1 the border city development zone, if the individual or business 218.2 owes delinquent amounts under chapter 290 or if the individual 218.3 or business owns property located in the city or county in which 218.4 the zone is located on which the property taxes are delinquent. 218.5 Subd. 2. [RELOCATION WITHIN COUNTY.] If a business located 218.6 in the county in which the border city development zone is 218.7 located relocates from outside a zone into a zone, the business 218.8 is not eligible for the exemptions or credits available in the 218.9 border city development zone, unless the governing body of the 218.10 city, for a business located in an incorporated area, or the 218.11 county, for a business located outside of an incorporated area, 218.12 approves the relocation of the business. 218.13 Subd. 3. [RELOCATION FROM OUTSIDE COUNTY.] (a) If a 218.14 business relocates more than 25 full-time equivalent jobs from a 218.15 location in Minnesota outside of the county in which the zone is 218.16 located, the business must notify the commissioner of trade and 218.17 economic development and the city and county governments from 218.18 which the jobs are being relocated. A business may satisfy the 218.19 notification requirement by notifying the commissioner of trade 218.20 and economic development, the city, and county of its intent to 218.21 transfer jobs to a zone before actually doing so. The business 218.22 is not eligible for the exemptions and credits available in the 218.23 border city development zone, if the governing body of the city 218.24 or county from which the jobs are being relocated adopts a 218.25 resolution objecting to the relocation within 60 days after its 218.26 receipt of the notice. 218.27 (b) The business becomes eligible for the exemptions and 218.28 credits available in the zone when each city and county that 218.29 objected to the relocation rescinds its objection by resolution. 218.30 (c) A city or county that objects to the relocation of jobs 218.31 must file a copy of the resolution with the commissioners of 218.32 trade and economic development and revenue, and the city that 218.33 created the border city development zone into which the jobs 218.34 were or intend to be transferred. 218.35 Sec. 9. [469.1934] [LIMIT ON TAX REDUCTIONS; FISCAL YEARS 218.36 1999-2001.] 219.1 Subdivision 1. [BUSINESSES MUST APPLY.] To claim a tax 219.2 credit under section 290.06, subdivision 26, for a taxable year 219.3 beginning before January 1, 2002 or an exemption from sales tax 219.4 under section 297A.25, subdivision 73, for a purchase made 219.5 before July 1, 2001, a business must apply to the city for a tax 219.6 credit certificate. The total amount of the state tax 219.7 reductions allowed for the specified period may not exceed the 219.8 amount of the tax credit certificates provided by the city to 219.9 the business. 219.10 Subd. 2. [CITY LIMITS.] (a) Each city may provide tax 219.11 credit certificates to businesses that apply and meet the 219.12 requirements for the tax credit and exemption. The certificates 219.13 that each city may provide for the period covered by this 219.14 section is limited to the amount specified in this subdivision. 219.15 No other tax credits or exemptions apply for otherwise 219.16 qualifying activity or purchases during taxable years beginning 219.17 before January 1, 2002 or for purchases made before July 1, 2001. 219.18 (b) The maximum amount of tax credit certificates each city 219.19 may issue equals: 219.20 (1) for the city of Breckenridge, $500,000; and 219.21 (2) for the city of East Grand Forks, $1,000,000. 219.22 Subd. 3. [TRANSFER AUTHORITY FOR PROPERTY TAX.] (a) A city 219.23 may elect to use all or part of its allocation under subdivision 219.24 2 to reimburse the city or county or both for property tax 219.25 reductions under section 272.0212. To elect this option, the 219.26 city must notify the commissioner of revenue by March 1 of each 219.27 calendar year of the amount of the property tax reductions it 219.28 seeks reimbursements for taxes payable during the year and the 219.29 governmental units to which the amounts will be paid. The 219.30 commissioner may require the city to provide information 219.31 substantiating the amount of the reductions granted or any other 219.32 information necessary to administer this provision. Any amount 219.33 transferred under this authority reduces the amount of tax 219.34 credit certificates available under subdivisions 1 and 2. 219.35 (b) The amount elected by the city under paragraph (a) is 219.36 appropriated to the commissioner of revenue from the general 220.1 fund for fiscal year 1999 to reimburse the city or county for 220.2 tax reductions under section 272.0212. The amount appropriated 220.3 may not exceed the maximum amounts allocated to a city under 220.4 subdivision 2, paragraph (b), and is available until expended. 220.5 Sec. 10. [EFFECTIVE DATE.] 220.6 Sections 1 to 3 and 6 to 9 are effective the day following 220.7 final enactment for each of the cities upon compliance with 220.8 Minnesota Statutes, section 645.021, by the governing bodies of 220.9 the cities of Breckenridge and East Grand Forks. 220.10 Section 4 is effective for plans required to be filed after 220.11 the day following final enactment, regardless of whether the 220.12 business received a credit and was required to file a plan in a 220.13 prior year. 220.14 Section 5 is effective for tax reductions received 220.15 beginning in the first calendar year after the day following 220.16 final enactment. 220.17 ARTICLE 12 220.18 GAMING TAXES 220.19 Section 1. Minnesota Statutes 1996, section 240.15, 220.20 subdivision 1, is amended to read: 220.21 Subdivision 1. [TAXES IMPOSED.] (a)From July 1, 1996,220.22until July 1, 1999,There is imposed a tax at the rate of six 220.23 percent of the amount in excess of $12,000,000 annually withheld 220.24 from all pari-mutuel pools by the licensee, including breakage 220.25 and amounts withheld under section 240.13, subdivision 4.After220.26June 30, 1999, the tax is imposed on the total amount withheld220.27from all pari-mutuel pools.For the purpose of this 220.28 subdivision, "annually" is the period from July 1 to June 30 of 220.29 the next year. 220.30 In addition to the above tax, the licensee must designate 220.31 and pay to the commission a tax of one percent of the total 220.32 amount bet on each racing day, for deposit in the Minnesota 220.33 breeders fund. 220.34 The taxes imposed by this clause must be paid from the 220.35 amounts permitted to be withheld by a licensee under section 220.36 240.13, subdivision 4. 221.1 (b) The commission may impose an admissions tax of not more 221.2 than ten cents on each paid admission at a licensed racetrack on 221.3 a racing day if: 221.4 (1) the tax is requested by a local unit of government 221.5 within whose borders the track is located; 221.6 (2) a public hearing is held on the request; and 221.7 (3) the commission finds that the local unit of government 221.8 requesting the tax is in need of its revenue to meet 221.9 extraordinary expenses caused by the racetrack. 221.10 Sec. 2. Minnesota Statutes 1996, section 297E.02, 221.11 subdivision 1, is amended to read: 221.12 Subdivision 1. [IMPOSITION.] A tax is imposed on all 221.13 lawful gambling other than (1) pull-tabs purchased and placed 221.14 into inventory after January 1, 1987, and (2) tipboards 221.15 purchased and placed into inventory after June 30, 1988, at the 221.16 rate often9.5 percent on the gross receipts as defined in 221.17 section 297E.01, subdivision 8, less prizes actually paid. The 221.18 tax imposed by this subdivision is in lieu of the tax imposed by 221.19 section 297A.02 and all local taxes and license fees except a 221.20 fee authorized under section 349.16, subdivision 8, or a tax 221.21 authorized under subdivision 5. 221.22 The tax imposed under this subdivision is payable by the 221.23 organization or party conducting, directly or indirectly, the 221.24 gambling. 221.25 Sec. 3. Minnesota Statutes 1996, section 297E.02, 221.26 subdivision 4, is amended to read: 221.27 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 221.28 on the sale of each deal of pull-tabs and tipboards sold by a 221.29 distributor. The rate of the tax istwo1.9 percent of the 221.30 ideal gross of the pull-tab or tipboard deal. The sales tax 221.31 imposed by chapter 297A on the sale of the pull-tabs and 221.32 tipboards by the distributor is imposed on the retail sales 221.33 price less the tax imposed by this subdivision. The retail sale 221.34 of pull-tabs or tipboards by the organization is exempt from 221.35 taxes imposed by chapter 297A and is exempt from all local taxes 221.36 and license fees except a fee authorized under section 349.16, 222.1 subdivision 8. 222.2 (b) The liability for the tax imposed by this section is 222.3 incurred when the pull-tabs and tipboards are delivered by the 222.4 distributor to the customer or to a common or contract carrier 222.5 for delivery to the customer, or when received by the customer's 222.6 authorized representative at the distributor's place of 222.7 business, regardless of the distributor's method of accounting 222.8 or the terms of the sale. 222.9 The tax imposed by this subdivision is imposed on all sales 222.10 of pull-tabs and tipboards, except the following: 222.11 (1) sales to the governing body of an Indian tribal 222.12 organization for use on an Indian reservation; 222.13 (2) sales to distributors licensed under the laws of 222.14 another state or of a province of Canada, as long as all 222.15 statutory and regulatory requirements are met in the other state 222.16 or province; 222.17 (3) sales of promotional tickets as defined in section 222.18 349.12; and 222.19 (4) pull-tabs and tipboards sold to an organization that 222.20 sells pull-tabs and tipboards under the exemption from licensing 222.21 in section 349.166, subdivision 2. A distributor shall require 222.22 an organization conducting exempt gambling to show proof of its 222.23 exempt status before making a tax-exempt sale of pull-tabs or 222.24 tipboards to the organization. A distributor shall identify, on 222.25 all reports submitted to the commissioner, all sales of 222.26 pull-tabs and tipboards that are exempt from tax under this 222.27 subdivision. 222.28 (c) A distributor having a liability of $120,000 or more 222.29 during a fiscal year ending June 30 must remit all liabilities 222.30 in the subsequent calendar year by a funds transfer as defined 222.31 in section 336.4A-104, paragraph (a). The funds transfer 222.32 payment date, as defined in section 336.4A-401, must be on or 222.33 before the date the tax is due. If the date the tax is due is 222.34 not a funds transfer business day, as defined in section 222.35 336.4A-105, paragraph (a), clause (4), the payment date must be 222.36 on or before the funds transfer business day next following the 223.1 date the tax is due. 223.2 (d) Any customer who purchases deals of pull-tabs or 223.3 tipboards from a distributor may file an annual claim for a 223.4 refund or credit of taxes paid pursuant to this subdivision for 223.5 unsold pull-tab and tipboard tickets. The claim must be filed 223.6 with the commissioner on a form prescribed by the commissioner 223.7 by March 20 of the year following the calendar year for which 223.8 the refund is claimed. The refund must be filed as part of the 223.9 customer's February monthly return. The refund or credit is 223.10 equal totwo1.9 percent of the face value of the unsold 223.11 pull-tab or tipboard tickets, provided that the refund or credit 223.12 will be 1.95 percent of the face value of the unsold pull-tab or 223.13 tipboard tickets for claims for a refund or credit of taxes 223.14 filed on the February 1999 monthly return. The refund claimed 223.15 will be applied as a credit against tax owing under this chapter 223.16 on the February monthly return. If the refund claimed exceeds 223.17 the tax owing on the February monthly return, that amount will 223.18 be refunded. The amount refunded will bear interest pursuant to 223.19 section 270.76 from 90 days after the claim is filed. 223.20 Sec. 4. Minnesota Statutes 1996, section 297E.02, 223.21 subdivision 6, is amended to read: 223.22 Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes 223.23 imposed under subdivisions 1 and 4, a tax is imposed on the 223.24 combined receipts of the organization. As used in this section, 223.25 "combined receipts" is the sum of the organization's gross 223.26 receipts from lawful gambling less gross receipts directly 223.27 derived from the conduct of bingo, raffles, and paddlewheels, as 223.28 defined in section 297E.01, subdivision 8, for the fiscal year. 223.29 The combined receipts of an organization are subject to a tax 223.30 computed according to the following schedule: 223.31 If the combined receipts for the The tax is: 223.32 fiscal year are: 223.33 Not over $500,000 zero 223.34 Over $500,000, but not over 223.35 $700,000two1.9 percent of the 223.36 amount over $500,000, but 224.1 not over $700,000 224.2 Over $700,000, but not over 224.3 $900,000$4,000$3,800 plusfour224.4 3.8 percent of the 224.5 amount over $700,000, but 224.6 not over $900,000 224.7 Over $900,000$12,000$11,400 plussix224.8 5.7 percent of the 224.9 amount over $900,000 224.10 Sec. 5. Minnesota Statutes 1997 Supplement, section 224.11 349.19, subdivision 2a, is amended to read: 224.12 Subd. 2a. [TAX REFUND OR CREDIT.] (a) Each organization 224.13 that receives a refund or credit under section 297E.02, 224.14 subdivision 4, paragraph (d), must within four business days of 224.15 receiving a refund under that paragraph deposit the refund in 224.16 the organization's gambling account. 224.17 (b) In addition, each organization must calculate 5.26 224.18 percent of the sum of the amount of tax it paid under: 224.19 (1) section 297E.02, subdivision 1, on gross receipts, less 224.20 prizes paid, after July 1, 1998; and 224.21 (2) section 297E.02, subdivision 6, on combined receipts 224.22 received after July 1, 1998. 224.23 (c) The organization may expend the tax refund or credit 224.24 issued under section 297E.02, subdivision 4, paragraph (d), plus 224.25 the amount calculated under paragraph (b), only for lawful 224.26 purposes, other than lawful purposes described in section 224.27 349.12, subdivision 25, paragraph (a), clauses (8), (9), and 224.28 (12). Amountsreceived as refunds or allowed as creditssubject 224.29 to this paragraph must be spent for qualifying lawful purposes 224.30 no later than one year after the refund or credit is received or 224.31 the tax savings calculated under paragraph (b). 224.32 Sec. 6. [EFFECTIVE DATE.] 224.33 Sections 2 to 4 are effective July 1, 1998. 224.34 ARTICLE 13 224.35 SANITARY SEWERS 224.36 Section 1. [LEGISLATIVE PURPOSE AND POLICY.] 225.1 The legislature determines that in the cities of Farwell 225.2 and Kensington there are serious problems of water pollution and 225.3 disposal of sewage which cannot be effectively or economically 225.4 dealt with by existing government units under existing laws. 225.5 The legislature, therefore, declares that for the protection of 225.6 the public health, safety, and welfare of these areas, for the 225.7 preservation and best use of waters and other natural resources 225.8 of the state in the area, for the prevention, control, and 225.9 abatement of water pollution in the area, and for the efficient 225.10 and economic collection, treatment, and disposal of sewage, it 225.11 is necessary to establish in Minnesota for said area a sanitary 225.12 sewer board. 225.13 Sec. 2. [DEFINITIONS.] 225.14 Subdivision 1. [APPLICATION.] The terms defined in this 225.15 section shall have the meaning given them unless otherwise 225.16 provided or indicated by the context. 225.17 Subd. 2. [ACQUISITION AND BETTERMENT.] "Acquisition" and 225.18 "betterment" shall have the meanings given them in Minnesota 225.19 Statutes, chapter 475. 225.20 Subd. 3. [AGENCY.] "Agency" means the Minnesota pollution 225.21 control agency created and established by Minnesota Statutes, 225.22 chapter 116. 225.23 Subd. 4. [AGRICULTURAL PROPERTY.] "Agricultural property" 225.24 means land as is classified agricultural land within the meaning 225.25 of Minnesota Statutes, section 273.13, subdivision 23. 225.26 Subd. 5. [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND 225.27 DEBT SERVICE.] "Current costs of acquisition, betterment, and 225.28 debt service" means interest and principal estimated to be due 225.29 during the budget year on bonds issued to finance said 225.30 acquisition and betterment and all other costs of acquisition 225.31 and betterment estimated to be paid during such year from funds 225.32 other than bond proceeds and federal or state grants. 225.33 Subd. 6. [DISTRICT DISPOSAL SYSTEM.] "District disposal 225.34 system" means any and all of the interceptors or treatment works 225.35 owned, constructed, or operated by the board unless designated 225.36 by the board as local sanitary sewer facilities. 226.1 Subd. 7. [FARWELL-KENSINGTON SANITARY DISTRICT AND 226.2 DISTRICT.] "Farwell-Kensington sanitary district" and "district" 226.3 mean the area over which the sanitary sewer board has 226.4 jurisdiction which shall include all that part of Douglas county 226.5 and Pope county described as follows, to wit: 226.6 (1) all of the land within the corporate limits of the city 226.7 of Farwell; 226.8 (2) all of the land within the corporate limits of the city 226.9 of Kensington. 226.10 Subd. 8. [INTERCEPTOR.] "Interceptor" means any sewer and 226.11 necessary appurtenances thereto, including but not limited to, 226.12 mains, pumping stations, and sewage flow regulating and 226.13 measuring stations, which is designed for or used to conduct 226.14 sewage originating in more than one local government unit, or 226.15 which is designed or used to conduct all or substantially all 226.16 the sewage originating in a single local government unit from a 226.17 point of collection in that unit to an interceptor or treatment 226.18 works outside that unit, or which is determined by the board to 226.19 be a major collector of sewage used or designed to serve a 226.20 substantial area in the district. 226.21 Subd. 9. [LOCAL GOVERNMENT UNIT OR GOVERNMENT 226.22 UNIT.] "Local government unit" or "government unit" means any 226.23 municipal or public corporation or governmental or political 226.24 subdivision or agency located in whole or in part in the 226.25 district, authorized by law to provide for the collection and 226.26 disposal of sewage. 226.27 Subd. 10. [LOCAL SANITARY SEWER FACILITIES.] "Local 226.28 sanitary sewer facilities" means all or any part of any disposal 226.29 system in the district other than the district disposal system. 226.30 Subd. 11. [MUNICIPALITY.] "Municipality" means any city or 226.31 town located in whole or in part in the district. 226.32 Subd. 12. [PERSON.] "Person" means any individual, 226.33 partnership, corporation, cooperative, or other organization or 226.34 entity, public or private. 226.35 Subd. 13. [POLLUTION AND SEWAGE SYSTEM.] "Pollution" and 226.36 "sewage system" shall have the meanings given them in Minnesota 227.1 Statutes, section 115.01. 227.2 Subd. 14. [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer 227.3 board" or "board" means the sanitary sewer board established for 227.4 the Farwell-Kensington sanitary district as provided in section 227.5 3. 227.6 Subd. 15. [SEWAGE.] "Sewage" means all liquid or 227.7 water-carried waste products from whatever sources derived, 227.8 together with such groundwater infiltration and surface water as 227.9 may be present. 227.10 Subd. 16. [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND 227.11 COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of 227.12 acquisition and betterment" and "costs of acquisition and 227.13 betterment" mean all acquisition and betterment expenses which 227.14 are permitted to be financed out of bond proceeds issued in 227.15 accordance with section 13, subdivision 4, whether or not such 227.16 expenses are in fact financed out of such bond proceeds. 227.17 Subd. 17. [TREATMENT WORKS AND DISPOSAL SYSTEM.] 227.18 "Treatment works" and "disposal system" shall have the meanings 227.19 given them in Minnesota Statutes, section 115.01. 227.20 Sec. 3. [SANITARY SEWER BOARD.] 227.21 Subdivision 1. [ESTABLISHMENT.] A sanitary sewer board 227.22 with jurisdiction in the Farwell-Kensington sanitary district is 227.23 established as a public corporation and political subdivision of 227.24 the state with perpetual succession and all the rights, powers, 227.25 privileges, immunities, and duties which may be validly granted 227.26 to or imposed upon a municipal corporation, as provided in this 227.27 article. 227.28 Subd. 2. [NUMBER, TERMS, AND ELECTION OF MEMBERS.] The 227.29 board has five members, two elected at large from the city of 227.30 Farwell and three elected at large from the city of Kensington. 227.31 The terms of the members are four years and until a successor is 227.32 qualified, except that for the first election in 1998 one at 227.33 large seat from Farwell and one from Kensington shall be for two 227.34 years and until a successor is qualified. The short term shall 227.35 be determined by lot and designated before filings open by the 227.36 municipal clerks of the two cities. The election shall be 228.1 conducted by the municipal clerks as provided in Minnesota 228.2 Statutes, chapter 205, at the same time as the city council 228.3 elections are held. Vacancies, removal, and qualification for 228.4 office are as otherwise provided by statute for elected city 228.5 council members. 228.6 Subd. 3. [CERTIFICATES OF SELECTION, OATH OF OFFICE.] A 228.7 certificate of selection of every board member selected under 228.8 subdivision 2 stating the term shall be made by the respective 228.9 municipal clerks. The certificates, with the approval appended 228.10 by other authority, if required, shall be filed with the 228.11 secretary of state. Counterparts shall be furnished to the 228.12 board member and the secretary of the board. Each member shall 228.13 qualify by taking and subscribing the oath of office prescribed 228.14 by the Minnesota Constitution, article V, section 6. Such oath, 228.15 duly certified by the official administering the same, shall be 228.16 filed with the secretary of state and the secretary of the board. 228.17 Subd. 4. [COMPENSATION OF BOARD MEMBERS.] Each board 228.18 member shall be paid a per diem compensation for meetings and 228.19 for such other services in such amount as may be specifically 228.20 authorized by the board from time to time. Per diem 228.21 compensation shall not exceed $2,000 in any one year. All 228.22 members of the board shall be reimbursed for all reasonable 228.23 expenses incurred in the performance of their duties as 228.24 determined by the board. 228.25 Sec. 4. [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 228.26 OF BOARD.] 228.27 Subdivision 1. [OFFICERS, MEETINGS, SEAL.] A majority of 228.28 the members shall constitute a quorum at all meetings of the 228.29 board, but a lesser number may meet and adjourn from time to 228.30 time and compel the attendance of absent members. The board 228.31 shall meet regularly at such time and place as the board shall 228.32 by resolution designate. Special meetings may be held at any 228.33 time upon call of the chair or any two members, upon written 228.34 notice sent by mail to each member at least three days prior to 228.35 the meeting, or upon such other notice as the board by 228.36 resolution may provide, or without notice if each member is 229.1 present or files with the secretary a written consent to the 229.2 meeting either before or after the meeting. Except as otherwise 229.3 provided in this article, any action within the authority of the 229.4 board may be taken by the affirmative vote of a majority of the 229.5 board at a regular or adjourned regular meeting or at a duly 229.6 held special meeting, but in any case only if a quorum is 229.7 present. All meetings of the board shall be open to the public 229.8 as provided in Minnesota Statutes, section 471.705. The board 229.9 may adopt a seal, which shall be officially and judicially 229.10 noticed, to authenticate instruments executed by its authority, 229.11 but omission of the seal shall not affect the validity of any 229.12 instrument. 229.13 Subd. 2. [CHAIR.] The board shall elect a chair from its 229.14 membership. The term of the chair shall expire on January 1 of 229.15 each year. The chair shall preside at all meetings of the 229.16 board, if present, and shall perform all other duties and 229.17 functions usually incumbent upon such an officer, and all 229.18 administrative functions assigned to the chair by the board. 229.19 The board shall elect a vice-chair from its membership to act 229.20 for the chair during a temporary absence or disability. 229.21 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 229.22 a person or persons who may but need not be a member or members 229.23 of the board, to act as its secretary and treasurer. The 229.24 secretary and treasurer shall hold office at the pleasure of the 229.25 board, subject to the terms of any contract of employment which 229.26 the board may enter into with the secretary or treasurer. The 229.27 secretary shall record the minutes of all meetings of the board, 229.28 and shall be custodian of all books and records of the board 229.29 except such as the board shall entrust to the custody of a 229.30 designated employee. The board may appoint a deputy to perform 229.31 any and all functions of either the secretary or the treasurer. 229.32 A secretary or treasurer who is not a member of the board or a 229.33 deputy of either shall not have any right to vote. 229.34 Subd. 4. [GENERAL MANAGER.] The board may appoint a 229.35 general manager who shall be selected solely upon the basis of 229.36 training, experience, and other qualifications and who shall 230.1 serve at the pleasure of the board and at a compensation to be 230.2 determined by the board. The general manager need not be a 230.3 resident of the district and may also be selected by the board 230.4 to serve as either secretary or treasurer, or both, of the 230.5 board. The general manager shall attend all meetings of the 230.6 board, but shall not vote, and shall: 230.7 (1) see that all resolutions, rules, regulations, or orders 230.8 of the board are enforced; 230.9 (2) appoint and remove, upon the basis of merit and 230.10 fitness, all subordinate officers and regular employees of the 230.11 board except the secretary and the treasurer and their deputies; 230.12 (3) present to the board plans, studies, and other reports 230.13 prepared for board purposes and recommend to the board for 230.14 adoption such measures as the general manager deems necessary to 230.15 enforce or carry out the powers and duties of the board, or the 230.16 efficient administration of the affairs of the board; 230.17 (4) keep the board fully advised as to its financial 230.18 condition, and prepare and submit to the board, and to the 230.19 governing bodies of the local government units, the board's 230.20 annual budget and such other financial information as the board 230.21 may request; 230.22 (5) recommend to the board for adoption such rules and 230.23 regulations as he or she deems necessary for the efficient 230.24 operation of a district disposal system and all local sanitary 230.25 sewer facilities over which the board may assume responsibility 230.26 as provided in section 18; and 230.27 (6) perform such other duties as may be prescribed by the 230.28 board. 230.29 Subd. 5. [PUBLIC EMPLOYEES.] The general manager and all 230.30 persons employed by the general manager shall be public 230.31 employees, and shall have all the rights and duties conferred on 230.32 public employees under Minnesota Statutes, sections 179A.01 to 230.33 179A.25. The compensation and conditions of employment of such 230.34 employees shall not be governed by any rule applicable to state 230.35 employees in the classified service nor to any of the provisions 230.36 of Minnesota Statutes, chapter 15A, unless the board so provides. 231.1 Subd. 6. [PROCEDURES.] The board shall adopt resolutions 231.2 or bylaws establishing procedures for board action, personnel 231.3 administration, recordkeeping, investment policy, approving 231.4 claims, authorizing or making disbursements, safekeeping funds, 231.5 and audit of all financial operations of the board. 231.6 Subd. 7. [SURETY BONDS AND INSURANCE.] The board may 231.7 procure surety bonds for its officers and employees and in such 231.8 amounts as are deemed necessary to assure proper performance of 231.9 their duties and proper accounting for funds in their custody. 231.10 It may procure insurance against such risks to property and such 231.11 liability of the board and its officers, agents, and employees 231.12 for personal injuries or death and property damage and 231.13 destruction and in such amounts as may be deemed necessary or 231.14 desirable, with the force and effect stated in Minnesota 231.15 Statutes, chapter 466. 231.16 Sec. 5. [COMPREHENSIVE PLAN.] 231.17 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 231.18 adopt a comprehensive plan for the collection, treatment, and 231.19 disposal of sewage in the district for such designated period as 231.20 the board deems proper and reasonable. The board shall prepare 231.21 and adopt subsequent comprehensive plans for the collection, 231.22 treatment, and disposal of sewage in the district for each such 231.23 succeeding designated period as the board deems proper and 231.24 reasonable. The plan shall take into account the preservation 231.25 and best and most economic use of water and other natural 231.26 resources in the area; the preservation, use and potential for 231.27 use of lands adjoining waters of the state to be used for the 231.28 disposal of sewage; and the impact such a disposal system will 231.29 have on present and future land use in the area affected 231.30 thereby. Such plans shall include the general location of 231.31 needed interceptors and treatment works, a description of the 231.32 area that is to be served by the various interceptors and 231.33 treatment works, a long-range capital improvements program and 231.34 such other details as the board shall deem appropriate. In 231.35 developing the plans, the board shall consult with persons 231.36 designated for such purpose by governing bodies of any municipal 232.1 or public corporation or governmental or political subdivision 232.2 or agency within the district to represent such entities and 232.3 shall consider the data, resources, and input offered to the 232.4 board by such entities and any planning agency acting on behalf 232.5 of one or more such entities. Each such plan, when adopted, 232.6 shall be followed in the district and may be revised as often as 232.7 the board deems necessary. 232.8 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 232.9 any subsequent comprehensive plan the board shall hold a public 232.10 hearing on such proposed plan at such time and place in the 232.11 district as it shall determine. The hearing may be continued 232.12 from time to time. Not less than 45 days before the hearing, 232.13 the board shall publish notice thereof in a newspaper or 232.14 newspapers having general circulation in the district, stating 232.15 the date, time, and place of the hearing, and the place where 232.16 the proposed plan may be examined by any interested person. At 232.17 the hearing, all interested persons shall be permitted to 232.18 present their views on the plan. 232.19 Subd. 3. [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH 232.20 BOARD'S RESPONSIBILITIES.] Before undertaking the construction 232.21 of new sewers of other disposal facilities or the substantial 232.22 alteration or improvement of any existing sewers or other 232.23 disposal facilities, each local government unit may, and shall 232.24 if the construction or alteration of any sewage disposal 232.25 facilities is contemplated by such government unit, adopt a 232.26 comprehensive plan and program for the collection, treatment, 232.27 and disposal of sewage for which the local government unit is 232.28 responsible, coordinated with the board's comprehensive plan, 232.29 and may revise the same as often as deems necessary. Each such 232.30 local plan or revision thereof shall be submitted forthwith to 232.31 the board for review and shall be subject to the approval of the 232.32 board as to those features of the plan affecting the board's 232.33 responsibilities as determined by the board. Any such features 232.34 disapproved by the board shall be modified in accordance with 232.35 the board's recommendations. No construction project involving 232.36 such features shall be undertaken by the local government unit 233.1 unless its governing body shall first find the project to be in 233.2 accordance with the government unit's comprehensive plan and 233.3 program as approved by the board. Prior to approval by the 233.4 board of the comprehensive plan and program of any local 233.5 government unit in the district, no construction project shall 233.6 be undertaken by such government unit unless approval of the 233.7 project is first secured from the board as to those features of 233.8 the project affecting the board's responsibilities as determined 233.9 by the board. 233.10 Sec. 6. [SEWER SERVICE FUNCTION.] 233.11 Subdivision 1. [DUTY OF BOARD; ACQUISITION OF EXISTING 233.12 FACILITIES; NEW FACILITIES.] At any time after the board has 233.13 become organized it shall assume ownership of all existing 233.14 interceptors and treatment works which will be needed to 233.15 implement the board's comprehensive plan for the collection, 233.16 treatment, and disposal of sewage in the district, in the manner 233.17 and subject to the conditions prescribed in subdivision 2, and 233.18 shall design, acquire, construct, better, equip, operate, and 233.19 maintain all additional interceptors and treatment works which 233.20 will be needed for such purpose. The board shall assume 233.21 ownership of all treatment works owned by a local government 233.22 unit if any part of such treatment works will be needed for such 233.23 purpose. 233.24 Subd. 2. [METHOD OF ACQUISITION; EXISTING DEBT.] The board 233.25 may require any local government unit to transfer to the board, 233.26 all of its right, title, and interest in any interceptors or 233.27 treatment works and all necessary appurtenances thereto owned by 233.28 such local government unit which will be needed for the purpose 233.29 stated in subdivision 1. Appropriate instruments of conveyance 233.30 for all such property shall be executed and delivered to the 233.31 board by the proper officers of each local government unit 233.32 concerned. The board, upon assuming ownership of any such 233.33 interceptors or treatment works, shall become obligated to pay 233.34 to such local government unit amounts sufficient to pay when due 233.35 all remaining principal of and interests on bonds issued by such 233.36 local government unit for the acquisition or betterment of the 234.1 interceptors or treatment works taken over. The board shall 234.2 also assume the same obligation with respect to so much of any 234.3 other existing disposal system owned by a local government unit 234.4 as the board determines to have been replaced or rendered 234.5 useless by the district disposal system. The amounts to be paid 234.6 under this subdivision may be offset against any amount to be 234.7 paid to the board by the local government unit as provided in 234.8 section 9. The board shall not be obligated to pay the local 234.9 government unit anything in addition to the assumption of debt 234.10 herein provided for. 234.11 Subd. 3. [EXISTING JOINT POWERS BOARD.] Effective January 234.12 1, 2000, or such earlier date as determined by the board, the 234.13 corporate existence of the joint powers board created by 234.14 agreement among local government units pursuant to Minnesota 234.15 Statutes, section 471.59, to provide the financing, acquisition, 234.16 construction, improvement, extension, operation, and maintenance 234.17 of facilities for the collection, treatment, and disposal of 234.18 sewage shall terminate. All persons regularly employed by such 234.19 joint powers board on that date shall be employees of the board, 234.20 and may at their option become members of the retirement system 234.21 applicable to persons employed directly by the board or may 234.22 continue as members of a public retirement association under any 234.23 other law, to which they belonged before such date, and shall 234.24 retain all pension rights which they may have under such latter 234.25 laws, and all other rights to which they are entitled by 234.26 contract or law. The board shall make the employer's 234.27 contributions to pension funds of its employees. Such employees 234.28 shall perform such duties as may be prescribed by the board. On 234.29 January 1, 2000, or such earlier date, all funds of such joint 234.30 powers board then on hand, and all subsequent collections of 234.31 taxes, special assessments, or service charges or any other sums 234.32 due the joint powers board or levied, or imposed by or for such 234.33 joint powers board shall be transferred to or made payable to 234.34 the sanitary sewer board and the county auditor shall remit the 234.35 sums to the board. The local government units otherwise 234.36 entitled to such cash, taxes, assessments, or service charges 235.1 shall be credited with such amounts, and such credits shall be 235.2 offset against any amounts to be paid by them to the board as 235.3 provided in section 9. On January 1, 2000, or such earlier 235.4 date, the board shall succeed to and become vested with all 235.5 right, title, and interest in and to any property, real or 235.6 personal, owned or operated by such joint powers board; and 235.7 prior to that date the proper officers of such joint powers 235.8 board shall execute and deliver to the sanitary sewer board all 235.9 deeds, conveyances, bills of sale, and other documents or 235.10 instruments required to vest in the board good and marketable 235.11 title to all such real or personal property, but this article 235.12 shall operate as such transfer and conveyance to the board of 235.13 such real or personal property, if not so transferred, as may be 235.14 required under the law or under the circumstances. On January 235.15 1, 2000, or such earlier date, the board shall become obligated 235.16 to pay or assume all outstanding bonds or other debt and all 235.17 contracts or obligations incurred by such joint powers board, 235.18 and all such bonds, obligations, or debts of the joint powers 235.19 board outstanding on the date this article becomes effective are 235.20 validated. 235.21 Subd. 4. [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The 235.22 board may terminate upon 60 days mailed notice to the 235.23 contracting parties, any existing contract between or among 235.24 local government units requiring payments by a local government 235.25 unit to any other local government unit, for the use of a 235.26 disposal system, or as reimbursement of capital costs of such a 235.27 disposal system, all or part of which will be needed to 235.28 implement the board's comprehensive plan. All contracts between 235.29 or among local government units for use of a disposal system 235.30 entered into subsequent to the date on which this article 235.31 becomes effective shall be submitted to the board for approval 235.32 as to those features affecting the board's responsibilities as 235.33 determined by the board and shall not become effective until 235.34 such approval is given. 235.35 Sec. 7. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 235.36 Subdivision 1. [POWERS.] In addition to all other powers 236.1 conferred upon the board in this article, the board has the 236.2 powers specified in this section. 236.3 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board shall 236.4 have the right to discharge the effluent from any treatment 236.5 works operated by it into any waters of the state, subject to 236.6 approval of the agency if required and in accordance with any 236.7 effluent or water quality standards lawfully adopted by the 236.8 agency, any interstate agency or any federal agency having 236.9 jurisdiction. 236.10 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 236.11 require any person or local government unit to provide for the 236.12 discharge of any sewage, directly or indirectly, into the 236.13 district disposal system, or to connect any disposal system or a 236.14 part thereof with the district disposal system wherever 236.15 reasonable opportunity therefore is provided; may regulate the 236.16 manner in which such connections are made; may require any 236.17 person or local government unit discharging sewage into the 236.18 disposal system to provide preliminary treatment therefore; may 236.19 prohibit the discharge into the district disposal system of any 236.20 substance which it determines will or may be harmful to the 236.21 system or any persons operating it; may prohibit any extraneous 236.22 flow into the system; and may require any local government unit 236.23 to discontinue the acquisition, betterment, or operation of any 236.24 facility for such unit's disposal system wherever and so far as 236.25 adequate service is or will be provided by the district disposal 236.26 system. 236.27 Sec. 8. [BUDGET.] 236.28 Except as otherwise specifically provided in this article, 236.29 the board is subject to Minnesota Statutes, section 275.065, 236.30 popularly known as the Truth in Taxation Act. The board shall 236.31 prepare and adopt, on or before September 15 of each year, a 236.32 budget showing for the following calendar year or other fiscal 236.33 year determined by the board, sometimes referred to in this 236.34 article as the budget year, estimated receipts of money from all 236.35 sources including, but not limited to, payments by each local 236.36 government unit, federal or state grants, taxes on property, and 237.1 funds on hand at the beginning of the year, and estimated 237.2 expenditures for: 237.3 (1) costs of operation, administration, and maintenance of 237.4 the district disposal system; 237.5 (2) cost acquisition and betterment of the district 237.6 disposal system; and 237.7 (3) debt service, including principal and interest, on 237.8 general obligation bonds and certificates issued pursuant to 237.9 section 13, obligations and debts assumed under section 6, 237.10 subdivisions 2 and 3, and any money judgments entered by a court 237.11 of competent jurisdiction. 237.12 Expenditures within these general categories, and such 237.13 others as the board may from time to time determine, shall be 237.14 itemized in such detail as the board shall prescribe. The board 237.15 and its officers, agents, and employees shall not spend money 237.16 for any purpose other than debt service without having set forth 237.17 such expense in the budget nor in excess of the amount set forth 237.18 in the budget therefor, and no obligation to make sure an 237.19 expenditure shall be enforceable except as the obligation of the 237.20 person or persons incurring it; provided that the board may 237.21 amend the budget at any time by transferring from one purpose to 237.22 another any sums except money for debt service and bond proceeds 237.23 or by increasing expenditures in any amount by which cash 237.24 receipts during the budget year actually exceed the total 237.25 amounts designated in the original budget. The creation of any 237.26 obligation pursuant to section 13 or the receipts of any federal 237.27 or state grant is a sufficient budget designation of the 237.28 proceeds for the purpose for which it is authorized, and of the 237.29 tax or other revenue pledged to pay the obligation and interest 237.30 on it, whether or not specifically included in any annual budget. 237.31 Sec. 9. [ALLOCATION OF COSTS.] 237.32 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 237.33 estimated cost of administration, operation, maintenance, and 237.34 debt service of the district disposal system to be paid by the 237.35 board in each fiscal year and the estimated costs of acquisition 237.36 and betterment of the system which are to be paid during the 238.1 year from funds other than state or federal grants and bond 238.2 proceeds and all other previously unallocated payments made by 238.3 the board pursuant to this article in such year are referred to 238.4 as current costs. 238.5 Subd. 2. [COLLECTION OF CURRENT COSTS.] Current costs 238.6 shall be collected as follows: 238.7 (a) Allocation of current costs: current costs may be 238.8 allocated to local government units in the district on an 238.9 equitable basis as the board may from time to time determine by 238.10 resolution to be fair and reasonable and in the best interests 238.11 of the district. In making the allocation the board may provide 238.12 for the deferment of payment of all or part of current costs, 238.13 the reallocation of deferred costs and the reimbursement of 238.14 reallocated deferred costs on an equitable basis as the board 238.15 may from time to time determine by resolution to be fair and 238.16 reasonable and in the best interests of the district. The 238.17 adoption or revision of a method of allocation, deferment, 238.18 reallocation, or reimbursement used by the board shall be made 238.19 by the affirmative vote of at least two-thirds of the members of 238.20 the board. 238.21 (b) Direct collection: upon approval of at least 238.22 two-thirds of the members of the board, the board may provide 238.23 for direct collection of current costs by monthly or other 238.24 periodic billing of sewer users. 238.25 Sec. 10. [GOVERNMENT UNITS; PAYMENTS TO BOARD.] 238.26 Subdivision 1. [OBLIGATIONS OF GOVERNMENT UNITS TO THE 238.27 BOARD.] Each government unit shall pay to the board all sums 238.28 charged to it as provided in section 9, at the times and in the 238.29 manner determined by the board. The governing body of each such 238.30 government unit shall take all action that may be necessary to 238.31 provide the funds required for such payments and to make the 238.32 same when due. 238.33 Subd. 2. [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges 238.34 payable to the board by local government units may be made 238.35 payable at such times during each year as the board determines, 238.36 after it has taken into account the dates on which taxes, 239.1 assessments, revenue collections, and other funds become 239.2 available to the government unit required to pay such charges. 239.3 Subd. 3. [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX 239.4 LEVIES.] To accomplish any duty imposed on it by the board, the 239.5 governing body of every government unit may, in addition to the 239.6 powers granted in this article and in any other law or charter, 239.7 exercise the powers granted any municipality by Minnesota 239.8 Statutes, chapters 117, 412, 429, and 475 and sections 115.46, 239.9 444.075, and 471.59, with respect to the area of the government 239.10 unit located in the district. In addition thereto, the 239.11 governing body of every government unit located in whole or part 239.12 in the district may levy taxes upon all taxable property in that 239.13 part of the government unit located in the district for all or a 239.14 part of the amount payable to the board, but if the levy is for 239.15 only part of the amounts payable to the board, the governing 239.16 body of the government unit may levy additional taxes on the 239.17 entire net tax capacity of all taxable property for all or a 239.18 part of the balance remaining payable. The taxes levied under 239.19 this subdivision shall be assessed and extended as a tax upon 239.20 such taxable property by the county auditor for the next 239.21 calendar year, free from any limitation of rate or amount 239.22 imposed by law or charter. The tax shall be collected and 239.23 remitted in the same manner as other general taxes of the 239.24 government unit. 239.25 Subd. 3a. [ALTERNATE LEVY.] In lieu of levying taxes on 239.26 all taxable property pursuant to subdivision 3, the governing 239.27 body of the government unit may elect to levy taxes upon the net 239.28 tax capacity of all taxable property, except agricultural 239.29 property, and upon only 25 percent of the net tax capacity of 239.30 all agricultural property, in that part of the government unit 239.31 located in the district for all or a part of the amounts payable 239.32 to the board. If the levy is for only part of the amounts 239.33 payable to the board, the governing body may levy additional 239.34 taxes on the entire net tax capacity of all such property, 239.35 including agricultural property, for all or a part of the 239.36 balance of such amounts. The taxes shall be assessed and 240.1 extended as a tax upon such taxable property by the county 240.2 auditor for the next calendar year, free from any limitation of 240.3 rate or amount imposed by law or charge, and shall be collected 240.4 and remitted in the same manner as other general taxes of the 240.5 government unit. In computing the tax capacity pursuant to this 240.6 subdivision, the county auditor shall include only 25 percent of 240.7 the net tax capacity of all taxable agricultural property and 240.8 100 percent of the net tax capacity of all other taxable 240.9 property in that part of the government unit located within the 240.10 district and, in spreading the levy, the auditor shall apply the 240.11 mill rate upon the same percentages of agricultural and 240.12 nonagricultural taxable property. If the government unit elects 240.13 to levy taxes under this subdivision and any of the taxable 240.14 agricultural property is reclassified so as to no longer qualify 240.15 as agricultural property, it shall be subject to additional 240.16 taxes. The additional taxes shall be in an amount which, 240.17 together with any such additional taxes previously levied and 240.18 the estimated collection of additional taxes subsequently levied 240.19 on any other such reclassified property, is determined by the 240.20 governing body of the government unit to be at least sufficient 240.21 to reimburse each other government unit for any excess current 240.22 costs reallocated to it as a result of the board deferring any 240.23 current costs under section 9 on account of the difference 240.24 between the amount of such current costs initially allocated to 240.25 each government unit based on the total net tax capacity of all 240.26 taxable property in the district and the amount of such current 240.27 costs reallocated to each government unit based on 25 percent of 240.28 the net tax capacity of agricultural property and 100 percent of 240.29 the net tax capacity of all other taxable property in the 240.30 district. Any reimbursement shall be made on terms which the 240.31 board determines to be just and reasonable. These additional 240.32 taxes may be levied in any greater amount as the governing body 240.33 of the government unit determines to be appropriate, provided 240.34 that in no event shall the total amount of the additional taxes 240.35 exceed the difference between: 240.36 (1) the total amount of taxes which would have been levied 241.1 upon such reclassified property to help pay current costs 241.2 charged in each year to the government unit by the board if that 241.3 portion of such costs, if any, initially allocated by the board 241.4 solely on the basis of 100 percent of the net tax capacity of 241.5 all taxable property in the district and then reallocated on the 241.6 basis of inclusion of only 25 percent of the net tax capacity of 241.7 agricultural property in the district was not reallocated and if 241.8 the amount of taxes levied by the government unit each year 241.9 under this subdivision to pay current costs had been based on 241.10 such initial allocation and had been imposed upon 100 percent of 241.11 the net tax capacity of all taxable property, including 241.12 agricultural property, in that part of the government unit 241.13 located in the district; and 241.14 (2) the amount of taxes theretofore levied each year under 241.15 this subdivision upon such reclassified property, plus interest 241.16 on the cumulative amount of such difference accruing each year 241.17 at the approximate average annual rate borne by bonds issued by 241.18 the board and outstanding at the beginning of such year or, if 241.19 no bonds are then outstanding, at such rate of interest which 241.20 may be determined by the board, but not exceeding the maximum 241.21 rate of interest which may then be paid on bonds issued by the 241.22 board. The additional taxes shall be a lien upon the 241.23 reclassified property assessed in the same manner and for the 241.24 same duration as all other ad valorem taxes levied upon the 241.25 property. The additional taxes shall be extended against the 241.26 reclassified property on the tax list for the current year, 241.27 provided however that no penalties or additional interest shall 241.28 be levied on such additional taxes if timely paid, and shall be 241.29 collected and remitted in the same manner as other general taxes 241.30 of the government unit. 241.31 Subd. 4. [DEBT LIMIT.] Any ad valorem taxes levied under 241.32 section 10, subdivision 3, or section 5 by the governing body of 241.33 a government unit to pay any sums charged to it by the board 241.34 pursuant to this article are not subject to, or counted towards, 241.35 any limit imposed by law on the levy of taxes upon taxable 241.36 property within any governmental unit. 242.1 Subd. 5. [DEFICIENCY TAX LEVIES.] If the local government 242.2 unit fails to make any payment to the board when due, the board 242.3 may certify to the auditor of the county in which the government 242.4 unit is located the amount required for payment of such amount 242.5 with interest at not more than the maximum rate per annum 242.6 authorized at that time on assessments pursuant to Minnesota 242.7 Statutes, section 429.061, subdivision 2. The auditor shall 242.8 levy and extend such amount as a tax upon all taxable property 242.9 in that part of the government unit located in the district, for 242.10 the next calendar year, free from any limitation imposed by law 242.11 or charter. Such tax shall be collected in the same manner as 242.12 other general taxes of the government unit, and the proceeds 242.13 thereof, when collected, shall be paid by the county treasurer 242.14 to the treasurer of the board and credited to the government 242.15 unit for which the tax was levied. 242.16 Sec. 11. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 242.17 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 242.18 PROJECT.] Before the board orders any project involving the 242.19 acquisition or betterment of any interceptor or treatment works, 242.20 all or a part of the cost of which will be allocated to local 242.21 government units pursuant to section 9, as current costs, the 242.22 board shall hold a public hearing on the proposed project 242.23 following two publications in a newspaper or newspapers having 242.24 general circulation in the district, stating the time and place 242.25 of the hearing, the general nature and location of the project, 242.26 the estimated total cost of acquisition and betterment, that 242.27 portion of such costs estimated to be paid out of federal and 242.28 state grants, and that portion of such costs estimated to be 242.29 allocated to each local government unit affected thereby. The 242.30 two publications shall be a week apart and the hearing shall be 242.31 at least three days after the last publication. Not less than 242.32 45 days before the hearing notice thereof shall also be mailed 242.33 to each clerk of all local government units in the district, but 242.34 failure to give mailed notice of any defects in the notice shall 242.35 not invalidate the proceedings. The project may include all or 242.36 part of one or more interceptors or treatment works. A hearing 243.1 is not required with respect to a project, no part of the costs 243.2 of which are to be allocated to local government units as the 243.3 current costs of acquisition, betterment, and debt service. 243.4 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 243.5 governing body of any local government unit in the district 243.6 proposes to assess against benefited property within such units 243.7 all or any part of the allocable costs of the project as 243.8 provided in subdivision 5, such governing body shall, not less 243.9 than ten days prior to the hearing provided for in subdivision 1 243.10 cause mailed notice thereof to be given to the owner of each 243.11 parcel within the area proposed to be specially assessed and 243.12 shall also give one week's published notice of the hearing. The 243.13 notice of hearing shall contain the same information provided in 243.14 the notice published by the board pursuant to subdivision 1, and 243.15 in addition, a description of the area proposed to be assessed 243.16 by the local government unit. For the purpose of giving mailed 243.17 notice, owners shall be those shown to be on the records of the 243.18 county auditor or, in any county where tax statements are mailed 243.19 by the county treasurer, on the records of the county treasurer; 243.20 but other appropriate records may be used for this purpose. 243.21 However, as to properties which are tax exempt or subject to 243.22 taxation on a gross earnings basis and are not listed on the 243.23 records of the county auditor or the county treasurer, the 243.24 owners thereof shall be ascertained by any practicable means and 243.25 mailed notice shall be given them as herein provided. Failure 243.26 to give mailed notice or any defects in the notice shall not 243.27 invalidate the proceedings of the board or the local governing 243.28 body. 243.29 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Prior 243.30 to adoption of the resolution calling for such a hearing, the 243.31 board shall secure from the district engineer or some other 243.32 competent person of the board's selection a report advising it 243.33 in a preliminary way as to whether the proposed project is 243.34 feasible, necessary, and cost effective and as to whether it 243.35 should best be made as proposed or in connection with some other 243.36 project and the estimated costs of the project as recommended; 244.1 but no error or omission in such report shall invalidate the 244.2 proceeding. The board may also take such other steps prior to 244.3 the hearing, as well in its judgment provide helpful information 244.4 in determining the desirability and feasibility of the project 244.5 including, but not limited to, preparation of plans and 244.6 specifications and advertisement for bids thereon. The hearing 244.7 may be adjourned from time to time and a resolution ordering the 244.8 project may be adopted at any time within six months after the 244.9 date of hearing. In ordering the project the board may reduce 244.10 but not increase the extent of the project as stated in the 244.11 notice of hearing, unless another hearing is held, and shall 244.12 find that the project as ordered is in accordance with the 244.13 comprehensive plan and program adopted by the board pursuant to 244.14 section 5. 244.15 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 244.16 adopted by the affirmative vote of not less than two-thirds of 244.17 its members determines that an emergency exists requiring the 244.18 immediate purchase of materials or supplies or the making of 244.19 emergency repairs, it may order the purchase of such supplies 244.20 and materials and the making of such repairs prior to any 244.21 hearing required under this section, provided that the board 244.22 shall set as early a date as practicable for such hearing at the 244.23 time it declares such emergency. All other provisions of this 244.24 section shall be followed in giving notice of and conducting 244.25 such hearing. Nothing herein shall be construed as preventing 244.26 the board or its agents from purchasing maintenance supplies or 244.27 incurring maintenance costs without regard to the requirements 244.28 of this section. 244.29 Subd. 5. [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A 244.30 local government unit may specially assess all or any part of 244.31 the costs of acquisition and betterment as herein provided, of 244.32 any project ordered by the board pursuant to this section. Such 244.33 special assessments shall be levied in accordance with Minnesota 244.34 Statutes, sections 429.051 to 429.081, except as otherwise 244.35 provided in this subdivision. No other provisions of Minnesota 244.36 Statutes, chapter 429, shall apply. For purposes of levying 245.1 such special assessments, the hearing on such project required 245.2 in subdivision 1 shall serve as the hearing on the making of the 245.3 original improvement provided for by Minnesota Statutes, section 245.4 429.051. The area assessed may be less than but may not exceed 245.5 the area proposed to be assessed as stated in the notice of 245.6 hearing on the project provided for in subdivision 2. For the 245.7 purpose of determining the allocable cost of the project, or 245.8 part thereof, to the local government unit, the government unit 245.9 may adopt one of the following procedures. 245.10 (a) At any time after a contract is let for the project, 245.11 the local government unit may obtain from the board a current 245.12 written estimate, on the basis of such historical and reasonably 245.13 projected data as may be available, of that part of the total 245.14 costs of acquisition and betterment of such project or of some 245.15 portion of the project which the government unit shall 245.16 designate, which will be allocated to the government unit and 245.17 the number of years over which such costs will be allocated as 245.18 current costs of acquisition, betterment, and debt service 245.19 pursuant to section 9. The board shall not in any way be bound 245.20 by this estimate for the purpose of allocating the costs of such 245.21 project to local government units. 245.22 (b) The governing body may obtain from the board a written 245.23 statement setting forth, for such prior period as the governing 245.24 body designates, that portion of the costs previously allocated 245.25 to the local government unit as current costs of acquisition, 245.26 betterment, and debt service only, of all or any part of the 245.27 project designated by the governing body. In addition to the 245.28 allocable costs so ascertained, the local government unit may 245.29 include in the total expense it will pay, as a basis for levying 245.30 assessments, all other expenses incurred directly by the 245.31 government unit in connection with said project, or any part 245.32 thereof. Special assessments levied by the government unit with 245.33 respect to previously allocated costs ascertained under this 245.34 paragraph shall be payable in equal annual installments 245.35 extending over a period not exceeding by more than one year the 245.36 number of years which such costs have been allocated to the 246.1 government unit or the estimated useful life of said project, or 246.2 part thereof, whichever number of years is the lesser. No 246.3 limitation is placed upon the number of times the governing body 246.4 of a government unit may assess such previously allocated costs 246.5 not previously assessed by the government unit. The power to 246.6 specially assess provided for in this section shall be in 246.7 addition and supplemental to all other powers of government 246.8 units to levy special assessments. 246.9 Sec. 12. [INITIAL COSTS.] 246.10 Subdivision 1. [CONTRIBUTIONS OR ADVANCES FROM LOCAL 246.11 GOVERNMENT UNITS.] The board may, at such time as it deems 246.12 necessary and proper, request from all or some of the local 246.13 government units necessary money to defray the costs of any 246.14 obligations assumed under section 6 and the costs of 246.15 administration, operation, and maintenance. Before making such 246.16 request, the board shall, by formal resolution, determine the 246.17 necessity for such money, setting forth in such resolution the 246.18 purposes for which such money is needed and the estimated amount 246.19 for each such purpose. Upon receiving such request, the 246.20 governing body of each such government unit may provide for 246.21 payment of the amount requested or such part thereof as it deems 246.22 fair and reasonable. Such money may be paid out of general 246.23 revenue funds or any other available funds of any local 246.24 government unit and the governing bodies thereof may levy taxes 246.25 to provide funds therefor, free from any existing limitations 246.26 imposed by law or charter. Such money may be provided by such 246.27 government units with or without interest but if interest is 246.28 charged it shall not exceed five percent per annum. The board 246.29 shall credit the local government units for such payments in 246.30 allocating current costs pursuant to section 9, on such terms 246.31 and at such times as it may agree with the unit furnishing the 246.32 same. 246.33 Subd. 2. [LIMITED TAX LEVY.] The board may levy ad valorem 246.34 taxes on all taxable property in the district to defray any of 246.35 the costs described in subdivision 1, provided that such costs 246.36 have not been defrayed by contribution under subdivision 1. 247.1 Before certification of such levy to the county auditor, 247.2 the board shall determine the need for the money to be derived 247.3 from such levy by formal resolution setting forth in said 247.4 resolution the purposes for which the tax money will be used and 247.5 the amount proposed to be used for each such purpose. In 247.6 allocating current costs pursuant to section 9 the board shall 247.7 credit the government units for taxes collected pursuant to levy 247.8 made under this subdivision on such terms and at such time or 247.9 times as the board deems fair and reasonable and upon such terms 247.10 as are consistent with the provisions of section 9, subdivision 247.11 2. 247.12 Sec. 13. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 247.13 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 247.14 INDEBTEDNESS.] (a) At any time or times after adoption of its 247.15 annual budget and in anticipation of the collection of tax and 247.16 other revenues estimated and set forth by the board in such 247.17 budget, except: 247.18 (1) taxes already anticipated by the issuance of 247.19 certificates under subdivision 2; 247.20 (2) deficiency taxes levied pursuant to this subdivision; 247.21 and 247.22 (3) taxes levied for the payment of certificates issued 247.23 pursuant to subdivision 3, the board may by resolution, 247.24 authorize the issuance, negotiation, and sale in accordance with 247.25 subdivision 5 in such form and manner and upon such terms as it 247.26 may determine of its negotiable general obligation certificates 247.27 of indebtedness in aggregate principal amounts not exceeding 50 247.28 percent of the total amount of such tax collections and other 247.29 revenues and maturing not later than three months after the 247.30 close of the budget year in which issued. The proceeds of the 247.31 sale of such certificates shall be used solely for the purposes 247.32 for which such tax collections and other revenues are to be 247.33 expended pursuant to such budget. 247.34 (b) All such tax collections and other revenues included in 247.35 the budget for such budget year, after the expenditures of such 247.36 tax collections and other revenues in accordance with the 248.1 budget, shall be irrevocably pledged and appropriated to a 248.2 special fund to pay the principal and interest on the 248.3 certificates when due. If for any reason such tax collections 248.4 and other revenues are insufficient to pay the certificates and 248.5 interest when due, the board shall levy a tax in the amount of 248.6 the deficiency on all taxable property in the district and shall 248.7 appropriate this amount when received to the special fund. 248.8 Subd. 2. [TAX LEVY ANTICIPATION CERTIFICATES OF 248.9 INDEBTEDNESS.] At any time or times after a tax is levied by the 248.10 board pursuant to section 12, subdivision 2, and certified to 248.11 the county auditors in anticipation of the collection of such 248.12 tax, provided that such tax has not been anticipated by the 248.13 issuance of certificates under subdivision 1, the board may, by 248.14 resolution, authorize the issuance, negotiation, and sale in 248.15 accordance with subdivision 5 in such form and manner and upon 248.16 such terms and conditions as it may determine of its negotiable 248.17 general obligation tax levy anticipation certificates of 248.18 indebtedness in aggregate principal amounts not exceeding 50 248.19 percent of such uncollected tax as to which no penalty for 248.20 nonpayment or delinquency has attached. Such certificates shall 248.21 mature not later than April 1 in the year following the year in 248.22 which such tax is collectible. The proceeds of the tax in 248.23 anticipation of which such certificates were issued and other 248.24 funds which may become available shall be applied to the extent 248.25 necessary to repay such certificates. 248.26 Subd. 3. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 248.27 any budget year the receipts of tax and other revenues should 248.28 for some unforeseen cause become insufficient to pay the board's 248.29 current expenses, or if any calamity or other public emergency 248.30 should subject it to the necessity of making extraordinary 248.31 expenditures, the board may by resolution authorize the 248.32 issuance, negotiation, and sale in accordance with subdivision 5 248.33 in such form and manner and upon such terms and conditions as it 248.34 may determine of its negotiable general obligation certificates 248.35 of indebtedness in an amount sufficient to meet such deficiency, 248.36 and the board shall forthwith levy on all taxable property in 249.1 the district a tax sufficient to pay the certificates and 249.2 interest thereon and shall appropriate all collections of such 249.3 tax to a special fund created for the payment of such 249.4 certificates and the interest thereon. 249.5 Subd. 4. [GENERAL OBLIGATION BONDS.] The board may by 249.6 resolution authorize the issuance of general obligation bonds 249.7 maturing serially in one or more annual or semiannual 249.8 installments, for the acquisition or betterment of any part of 249.9 the district disposal system, including but without limitation 249.10 the payment of interest during construction and for a reasonable 249.11 period thereafter, or for the refunding of outstanding bonds, 249.12 certificates of indebtedness, or judgments. The board shall 249.13 pledge its full faith and credit and taxing power for the 249.14 payment of such bonds and shall provide for the issuance and 249.15 sale and for the security of such bonds in the manner provided 249.16 in Minnesota Statutes, chapter 475, and shall have the same 249.17 powers and duties as a municipality issuing bonds under that 249.18 law. No election shall be required to authorize the issuance of 249.19 such bonds and the debt limitations of Minnesota Statutes, 249.20 chapter 475, shall not apply to such bonds. The board may also 249.21 pledge for the payment of such bonds and deduct from the amount 249.22 of any tax levy required under Minnesota Statutes, section 249.23 475.61, subdivision 1, any sums receivable under section 10 or 249.24 any state and federal grants anticipated by the board and may 249.25 covenant to refund such bonds if and when and to the extent that 249.26 for any reasons such revenues, together with other funds 249.27 properly available and appropriated for such purpose, are not 249.28 sufficient to pay all principal and interest due or about to 249.29 become due thereon, provided that such revenues have not been 249.30 anticipated by the issuance of certificates under subdivision 1. 249.31 All bonds which have been or shall hereafter be issued and sold 249.32 in conformity with the provisions of this subdivision, and 249.33 otherwise in conformity with law, are hereby authorized, 249.34 legalized, and validated. 249.35 Subd. 5. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 249.36 Certificates issued under subdivisions 1, 2, and 3 may be issued 250.1 and sold by negotiation, without public sale, and may be sold at 250.2 a price equal to such percentage of the par value thereof, plus 250.3 accrued interest, and bearing interest at such rate or rates as 250.4 may be determined by the board. No election shall be required 250.5 to authorize the issuance of such certificates. Such 250.6 certificates shall bear the same rate of interest after maturity 250.7 as before and the full faith and credit and taxing power of the 250.8 board shall be pledged to the payment of such certificates. 250.9 Sec. 14. [TAX LEVIES.] 250.10 The board shall have power to levy taxes for the payment of 250.11 bonds or other obligations assumed by the district under section 250.12 6 and for debt service of the district disposal system 250.13 authorized in section 13 upon all taxable property within the 250.14 district without limitation of rate or amount and without 250.15 affecting the amount or rate of taxes which may be levied by the 250.16 board for other purposes or by any local government unit in the 250.17 district. No other provision of law relating to debt limit 250.18 shall restrict or in any way limit the power of the board to 250.19 issue the bonds and certificates authorized in section 13. The 250.20 board shall also have power to levy taxes as provided in 250.21 sections 10 and 12. The county auditor shall annually assess 250.22 and extend upon the tax rolls the portion of the taxes levied by 250.23 the board in each year which is certified to the auditor by the 250.24 board. The county treasurer shall collect and make settlement 250.25 of such taxes with the treasurer of the board. 250.26 Sec. 15. [DEPOSITORIES.] 250.27 The board shall from time to time designate one or more 250.28 national or state banks, or trust companies authorized to do a 250.29 banking business, as official depositories for money of the 250.30 board, and thereupon shall require the treasurer to deposit all 250.31 or a part of such money in such institutions. Such designation 250.32 shall be in writing and shall set forth all the terms and 250.33 conditions upon which the deposits are made, and shall be signed 250.34 by the chair and treasurer, and made a part of the minutes of 250.35 the board. Any bank or trust company so designated shall 250.36 qualify as a depository by furnishing a corporate surety bond or 251.1 collateral in the amounts required by Minnesota Statutes, 251.2 section 118A.03. However, no bond or collateral shall be 251.3 required to secure any deposit insofar as it is insured under 251.4 federal law. 251.5 Sec. 16. [MONEY; ACCOUNTS AND INVESTMENTS.] 251.6 Subdivision 1. [RECEIPT AND APPLICATION.] All money 251.7 received by the board shall be deposited or invested by the 251.8 treasurer and disposed of as the board may direct in accordance 251.9 with its budget; provided that any money that has been pledged 251.10 or dedicated by the board to the payment of obligations or 251.11 interest thereon or expenses incident thereto, or for any other 251.12 specific purpose authorized by law, shall be paid by the 251.13 treasurer into the fund to which they have been pledged. 251.14 Subd. 2. [FUNDS AND ACCOUNTS.] The board's treasurer shall 251.15 establish such funds and accounts as may be necessary or 251.16 convenient to handle the receipts and disbursements of the board 251.17 in an orderly fashion. 251.18 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 251.19 said funds and accounts may be deposited in the official 251.20 depositories of the board or invested as hereinafter provided. 251.21 The amount thereof not currently needed or required by law to be 251.22 kept in cash on deposit may be invested in obligations 251.23 authorized for the investment of municipal sinking funds by 251.24 law. The money may also be held under certificates of deposit 251.25 issued by any official depository of the board. All investments 251.26 by the board must conform to an investment policy adopted by the 251.27 board and amended from time to time. 251.28 Subd. 4. [BONDS PROCEEDS.] The use of proceeds of all 251.29 bonds issued by the board for the acquisition and betterment of 251.30 the district disposal system, and the use, other than 251.31 investment, of all money on hand in any sinking fund or funds of 251.32 the board, shall be governed by Minnesota Statutes, chapter 475, 251.33 this article, and the resolutions authorizing the issuance of 251.34 the bonds. Such bond proceeds when received shall be 251.35 transferred to the treasurer of the board for safekeeping, 251.36 investment, and payment of the costs for which they were issued. 252.1 Subd. 5. [AUDIT.] The board shall provide for and pay the 252.2 cost of an independent annual audit of its official books and 252.3 records by the state public examiner or a certified public 252.4 accountant. 252.5 Sec. 17. [GENERAL POWERS OF BOARD.] 252.6 Subdivision 1. [ALL NECESSARY OR CONVENIENT POWER.] The 252.7 board shall have all powers which may be necessary or convenient 252.8 to discharge the duties imposed upon it by law. The powers 252.9 shall include those herein specified, but the express grant or 252.10 enumeration of powers does not limit the generality or scope of 252.11 the grant of power contained in this subdivision. 252.12 Subd. 2. [SUITS.] The board may sue or be sued. 252.13 Subd. 3. [CONTRACTS.] The board may enter into any 252.14 contract necessary or proper for the exercise of its powers of 252.15 the accomplishment of its purposes. 252.16 Subd. 4. [RULES.] The board shall have the power to adopt 252.17 rules relating to the board's responsibilities and may provide 252.18 penalties for the violation thereof not exceeding the maximum 252.19 which may be specified for a misdemeanor, and the cost of 252.20 prosecution may be added to the penalties imposed. Any rule 252.21 prescribing a penalty for violation shall be published at least 252.22 once in a newspaper having general circulation in the district. 252.23 Such violations may be prosecuted before any court in the 252.24 district having jurisdiction of misdemeanor, and every such 252.25 court shall have jurisdiction of such violations. Any constable 252.26 or other peace officer of any municipality in the district may 252.27 make arrests for such violations committed anywhere in the 252.28 district in like manner and with like effect as for violations 252.29 of village ordinances or for statutory misdemeanors. All fines 252.30 collected in such cases shall be deposited in the treasury of 252.31 the board, or may be allocated between the board and the 252.32 municipality in which such prosecution occurs on such basis as 252.33 the board and the municipality agree. 252.34 Subd. 5. [GIFTS; GRANTS.] The board may accept gifts, may 252.35 apply for and accept grants or loans of money or other property 252.36 from the United States, the state, or any person for any of its 253.1 purposes, may enter into any agreement required in connection 253.2 herewith, and may hold, use, and dispose of such money or 253.3 property in accordance with the terms of the gift, grant, loan, 253.4 or agreement relating thereto; and, with respect to any loans or 253.5 grants of funds or real or personal property or other assistance 253.6 from any state or federal government or any agency or 253.7 instrumentality thereof, the board may contract to do and 253.8 perform all acts and things required as a condition or 253.9 consideration therefore pursuant to state or federal law or 253.10 regulations, whether or not included among the powers expressly 253.11 granted to the board in this article. 253.12 Subd. 6. [JOINT POWERS.] The board may act under Minnesota 253.13 Statutes, section 471.59, or any other appropriate law providing 253.14 for joint or cooperative action between government units. 253.15 Subd. 7. [RESEARCH, HEARINGS, INVESTIGATIONS, ADVISE.] The 253.16 board may conduct research studies and programs, collect and 253.17 analyze data, prepare reports, maps, charts, and tables, and 253.18 conduct all necessary hearings and investigations in connection 253.19 with the design, construction, and operation of the district 253.20 disposal system; and may advise and assist other government 253.21 units on system planning matters within the scope of its powers, 253.22 duties, and objectives and may provide at the request of any 253.23 such governmental unit such other technical and administrative 253.24 assistance as the board deems appropriate for the government 253.25 unit to carry out the powers and duties vested in the government 253.26 unit under this article or imposed on by the board. 253.27 Subd. 8. [EMPLOYEES, CONTRACTORS, INSURANCE.] The board 253.28 may employ on such terms as it deems advisable, persons or firms 253.29 performing engineering, legal, or other services of a 253.30 professional nature; require any employee to obtain and file 253.31 with it an individual bond or fidelity insurance policy; and 253.32 procure insurance in such amounts as it deems necessary against 253.33 liability of the board or its officers or both, for personal 253.34 injury or death and property damage or destruction, with the 253.35 force and effect stated in Minnesota Statutes, chapter 466, and 253.36 against risks of damage to or destruction of any of its 254.1 facilities, equipment, or other property as it deems necessary. 254.2 Subd. 9. [PROPERTY.] The board may acquire by purchase, 254.3 lease, condemnation, gift, or grant, and real or personal 254.4 property including positive and negative easements and water and 254.5 air rights, and it may construct, enlarge, improve, replace, 254.6 repair, maintain, and operate any interceptor, treatment works, 254.7 or water facility determined to be necessary or convenient for 254.8 the collection and disposal of sewage in the district. Any 254.9 local government unit and the commissioners of transportation 254.10 and natural resources may convey to or permit the use of any 254.11 such facilities owned or controlled by it, by the board, subject 254.12 to the rights of the holders of any bonds issued with respect 254.13 thereto, with or without compensation, without an election or 254.14 approval by any other government unit or agency. All powers 254.15 conferred by this subdivision may be exercised both within or 254.16 without the district as may be necessary for the exercise by the 254.17 board of its powers or the accomplishment of its purposes. The 254.18 board may hold, lease, convey, or otherwise dispose of such 254.19 property for its purposes upon such terms and in such manner as 254.20 it shall deem advisable. Unless otherwise provided, the right 254.21 to acquire lands and property rights by condemnation shall be 254.22 exercised in accordance with Minnesota Statutes, chapter 117, 254.23 and shall apply to any property or interest therein owned by any 254.24 local government unit; provided, that no such property devoted 254.25 to an actual public use at the time, or held to be devoted to 254.26 such use within a reasonable time, shall be so acquired unless a 254.27 court of competent jurisdiction shall determine that the use 254.28 proposed by the board is paramount to such use. Except in case 254.29 of property in actual public use, the board may take possession 254.30 of any property of which condemnation proceedings have been 254.31 commenced at any time after the issuance of a court order 254.32 appointing commissioners for its condemnation. 254.33 Subd. 10. [RIGHTS-OF-WAY.] The board may construct or 254.34 maintain its systems or facilities in, along, on, under, over, 254.35 or through public waters, streets, bridges, viaducts, and other 254.36 public right-of-way without first obtaining a franchise from any 255.1 county or local government unit having jurisdiction over them; 255.2 but such facilities shall be constructed and maintained in 255.3 accordance with the ordinances and resolutions of any such 255.4 county or government unit relating to construction, 255.5 installation, and maintenance of similar facilities on such 255.6 public properties and shall not unnecessarily obstruct the 255.7 public use of such rights-of-way. 255.8 Subd. 11. [DISPOSAL OF PROPERTY.] The board may sell, 255.9 lease, or otherwise dispose of any real or personal property 255.10 acquired by it which is no longer required for accomplishment of 255.11 its purposes. Such property may be sold in the manner provided 255.12 by Minnesota Statutes, section 469.065, insofar as practical. 255.13 The board may give such notice of sale as it shall deem 255.14 appropriate. When the board determines that any property or any 255.15 part of the district disposal system which has been acquired 255.16 from a local government unit without compensation is no longer 255.17 required but is required as a local facility by the government 255.18 unit from which it was acquired, the board may by resolution 255.19 transfer it to such government unit. 255.20 Subd. 12. [JOINT OPERATIONS.] The board may contract with 255.21 the United States or any agency thereof, any state or agency 255.22 thereof, or any regional public planning body in the state with 255.23 jurisdiction over any part of the district, or any other 255.24 municipal or public corporation, or governmental subdivision in 255.25 any state, for the joint use of any facility owned by the board 255.26 or such entity, for the operation by such entity of any system 255.27 or facility of the board, or for the performance on the board's 255.28 behalf of any service including, but not limited to, planning, 255.29 on such terms as may be agreed upon by the contracting parties. 255.30 Unless designated by the board as a local sanitary sewer 255.31 facility, any treatment works or interceptor jointly used, or 255.32 operated on behalf of the board, as provided in this 255.33 subdivision, shall be deemed to be operated by the board for 255.34 purposes of including said facilities in the district disposal 255.35 system. 255.36 Sec. 18. [LOCAL FACILITIES.] 256.1 Subdivision 1. [SANITARY SEWER FACILITIES.] Except as 256.2 otherwise provided in this article, local government units shall 256.3 retain responsibility for the planning, design, acquisition, 256.4 betterment, operation, administration, and maintenance of all 256.5 local sanitary sewer facilities as provided by law. 256.6 Subd. 2. [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY 256.7 SEWER FACILITIES.] The board shall upon request of any 256.8 government unit or units assume either alone or jointly with the 256.9 local government unit all or any part of the responsibility of 256.10 the local government unit described in subdivision 1. Except as 256.11 provided in subdivision 4 and for the purpose of exercising such 256.12 responsibility, the board shall have all the powers and duties 256.13 elsewhere conferred in this article with the same force and 256.14 effect as if such local sanitary sewer facilities were a part of 256.15 the district disposal system. 256.16 Subd. 3. [WATER AND STREET FACILITIES.] The board may, 256.17 upon request of any governmental unit or units, enter into an 256.18 agreement under which the board may assume either alone or 256.19 jointly with such unit or units, the responsibility for the 256.20 acquisition and construction of water and street facilities in 256.21 conjunction with (1) any project for the acquisition or 256.22 betterment of the district disposal system, or (2) any project 256.23 undertaken by the board under subdivision 2. Except as provided 256.24 in subdivision 4, and for the purpose of exercising any 256.25 responsibilities pursuant to this subdivision, the board shall 256.26 have all the powers and duties elsewhere conferred in this 256.27 article with the same force and effect as if such water or 256.28 street facilities were a part of the district disposal system. 256.29 Subd. 4. [ALLOCATION OF CURRENT COSTS.] All current costs 256.30 attributable to responsibilities assumed by the board over local 256.31 sanitary sewer facilities and water and street facilities as 256.32 provided in this section shall be allocated solely to the local 256.33 unit for or with whom such responsibilities are assumed on such 256.34 terms and over such period as the board determines to be 256.35 equitable and in the best interest of the district, provided 256.36 that if two or more government units form a region in accordance 257.1 with this section, all or part of such current costs 257.2 attributable to the region shall at the request of its joint 257.3 board be allocated to the region and provided in the agreement 257.4 establishing the region. 257.5 Subd. 5. [PART OF DISTRICT SYSTEM.] Nothing contained in 257.6 this section or in any other part of this article shall be 257.7 construed to prevent the board from including, where 257.8 appropriate, treatment works or interceptors, previously 257.9 designated or treated as local sanitary sewer facilities as a 257.10 part of the district disposal system. 257.11 Sec. 19. [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE 257.12 DISTRICT.] 257.13 The board may contract with the United States or any agency 257.14 thereof, any state or any agency thereof, or any municipal or 257.15 public corporation, governmental subdivision or agency or 257.16 political subdivision in any state, outside the jurisdiction of 257.17 the board, for furnishing to such entities any services which 257.18 the board may furnish to local government units in the district 257.19 under this article including, but not limited to, planning for 257.20 and the acquisition, betterment, operation, administration, and 257.21 maintenance of any or all interceptors, treatment works, and 257.22 local sanitary sewer facilities, provided that the board may 257.23 further include as one of the terms of the contract that such 257.24 entity also pay to the board such amount as may be agreed upon 257.25 as a reasonable estimate of the proportionate share properly 257.26 allocable to the entity of costs of acquisition, betterment, and 257.27 debt service previously allocated to local government units in 257.28 the district. When such payments are made by such entities to 257.29 the board, they shall be applied in reduction of the total 257.30 amount of costs thereafter allocated to each local government 257.31 unit in the district, on such equitable basis as the board deems 257.32 to be in the best interest of the district. Any municipality in 257.33 the state of Minnesota may enter into such contract and perform 257.34 all acts and things required as a condition or consideration 257.35 therefore consistent with the purpose of this article, whether 257.36 or not included among the powers otherwise granted to such 258.1 municipality by law or charter, such powers to include those 258.2 powers set out in section 10, subdivisions 3, 3a, and 4. 258.3 Sec. 20. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 258.4 AND EQUIPMENT.] 258.5 Subdivision 1. [PLANS AND SPECIFICATIONS.] When the board 258.6 orders a project involving the acquisition or betterment of a 258.7 part of the district disposal system it shall cause plans and 258.8 specifications of this project to be made, or if previously 258.9 made, to be modified, if necessary, and to be approved by the 258.10 agency if required, and after any required approval by the 258.11 agency, one or more contracts for work and materials called for 258.12 by such plans and specification may be awarded as provided in 258.13 this section. 258.14 Subd. 2. [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as 258.15 otherwise provided in this section, all contracts for work to be 258.16 done or for purchases of materials, supplies, or equipment shall 258.17 be done in accordance with Minnesota Statutes, section 471.345. 258.18 Subd. 3. [CONTRACTS OR PURCHASES.] The board may, without 258.19 advertising for bids, enter into any contract or purchase any 258.20 materials, supplies, or equipment of the type referred to in 258.21 subdivision 2 in accordance with applicable state law. 258.22 Sec. 21. [ANNEXATION OF TERRITORY.] 258.23 Any municipality in Douglas county or Pope county, upon 258.24 resolution adopted by a four-fifths vote of its governing body, 258.25 may petition the board for annexation to the district of the 258.26 area then comprising the municipality, or any part thereof and, 258.27 if accepted by the board, such area shall be deemed annexed to 258.28 the district and subject to the jurisdiction of the board under 258.29 the terms and provisions of this article. The territory so 258.30 annexed shall be subject to taxation and assessment pursuant to 258.31 the provisions of this article and shall be subject to taxation 258.32 by the board like other property in the district for the payment 258.33 of principal and interest thereafter becoming due on general 258.34 obligations of the board, whether authorized or issued before or 258.35 after such annexation. The board may, in its discretion, 258.36 condition approval of the annexation upon the contribution, by 259.1 or on behalf of the municipality petitioning for annexation, to 259.2 the board of such amount as may be agreed upon as being a 259.3 reasonable estimate of the proportionate share, properly 259.4 allocable to the municipality, of costs or acquisition, 259.5 betterment, and debt service previously allocated to local 259.6 government units in the district, on such terms as may be agreed 259.7 upon; and in place of or in addition thereto such other and 259.8 further conditions as the board deems in the best interests of 259.9 the district. Notwithstanding any other provisions of this 259.10 article to the contrary, the conditions established for 259.11 annexation may include the requirement that the annexed 259.12 municipality pay for, contract for, and oversee the construction 259.13 of local sanitary sewer facilities and interceptor sewers as 259.14 those terms are defined in section 2. For the purpose of paying 259.15 such contribution or of satisfying any other condition 259.16 established by the board, the municipality petitioning 259.17 annexation may exercise the powers conferred in section 10. 259.18 When such contributions are made by the municipality to the 259.19 board, they shall be applied in reduction of the total amount of 259.20 costs thereafter allocated to each local government unit in the 259.21 district, on such equitable basis as the board deems to be in 259.22 the best interests of the district, applying so far as 259.23 practicable and appropriate the criteria set forth in section 9, 259.24 subdivision 2. Upon annexation of such territory, the secretary 259.25 of the board shall certify to the auditor and treasurer of the 259.26 county in which the municipality is located the fact of such 259.27 annexation and a legal description of the territory annexed. 259.28 Sec. 22. [PROPERTY EXEMPT FROM TAXATION.] 259.29 Any properties, real or personal, owned, leased, 259.30 controlled, used, or occupied by the sanitary sewer board for 259.31 any purpose under this article are declared to be acquired, 259.32 owned, leased, controlled, used, and occupied for public, 259.33 governmental, and municipal purposes, and are exempt from 259.34 taxation by the state or any political subdivision of the state, 259.35 provided that such properties are subject to special assessments 259.36 levied by a political subdivision for a local improvement in 260.1 amounts proportionate to and not exceeding the special benefit 260.2 received by the properties from such improvement. No possible 260.3 use of any such properties in any manner different from their 260.4 use as part of the disposal system at the time shall be 260.5 considered in determining the special benefit received by such 260.6 properties. All such assessments shall be subject to final 260.7 approval by the board, whose determination of the benefits shall 260.8 be conclusive upon the political subdivision levying the 260.9 assessment. All bonds, certificates of indebtedness, or other 260.10 obligations of the board, and the interest thereon, are exempt 260.11 from taxation by the state or any political subdivision of the 260.12 state. 260.13 Sec. 23. [RELATION TO EXISTING LAWS.] 260.14 This article prevails over any law or charter inconsistent 260.15 with it. The powers conferred on the board under this article 260.16 do not diminish or supersede the powers conferred on the agency 260.17 by Minnesota Statutes, chapters 115 and 116. 260.18 Sec. 24. [LOCAL APPROVAL.] 260.19 This article takes effect the day after the governing 260.20 bodies of the city of Farwell in Pope county and the city of 260.21 Kensington in Douglas county comply with Minnesota Statutes, 260.22 section 645.021, subdivision 3, or 30 days after a referendum is 260.23 held in those cities. 260.24 ARTICLE 14 260.25 MISCELLANEOUS 260.26 Section 1. Minnesota Statutes 1997 Supplement, section 260.27 3.986, subdivision 2, is amended to read: 260.28 Subd. 2. [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 260.29 means increased or decreased costs or revenues that a political 260.30 subdivision would incur as a result of a law enacted after June 260.31 30, 1997, or rule proposed afterJune 30December 31, 1998: 260.32 (1) that mandates a new program, eliminates an existing 260.33 mandated program, requires an increased level of service of an 260.34 existing program, or permits a decreased level of service in an 260.35 existing mandated program; 260.36 (2) that implements or interprets federal law and, by its 261.1 implementation or interpretation, increases or decreases program 261.2 or service levels beyond the level required by the federal law; 261.3 (3) that implements or interprets a statute or amendment 261.4 adopted or enacted pursuant to the approval of a statewide 261.5 ballot measure by the voters and, by its implementation or 261.6 interpretation, increases or decreases program or service levels 261.7 beyond the levels required by the ballot measure; 261.8 (4) that removes an option previously available to 261.9 political subdivisions, or adds an option previously unavailable 261.10 to political subdivisions, thus requiring higher program or 261.11 service levels or permitting lower program or service levels, or 261.12 prohibits a specific activity and so forces political 261.13 subdivisions to use a more costly alternative to provide a 261.14 mandated program or service; 261.15 (5) that requires that an existing program or service be 261.16 provided in a shorter time period and thus increases the cost of 261.17 the program or service, or permits an existing mandated program 261.18 or service to be provided in a longer time period, thus 261.19 permitting a decrease in the cost of the program or service; 261.20 (6) that adds new requirements to an existing optional 261.21 program or service and thus increases the cost of the program or 261.22 service because the political subdivisions have no reasonable 261.23 alternative other than to continue the optional program; 261.24 (7) that affects local revenue collections by changes in 261.25 property or sales and use tax exemptions; 261.26 (8) that requires costs previously incurred at local option 261.27 that have subsequently been mandated by the state; or 261.28 (9) that requires payment of a new fee or increases the 261.29 amount of an existing fee, or permits the elimination or 261.30 decrease of an existing fee mandated by the state. 261.31 (b) When state law is intended to achieve compliance with 261.32 federal law or court orders, state mandates shall be determined 261.33 as follows: 261.34 (1) if the federal law or court order is discretionary, the 261.35 state law is a state mandate; 261.36 (2) if the state law exceeds what is required by the 262.1 federal law or court order, only the provisions of the state law 262.2 that exceed the federal requirements are a state mandate; and 262.3 (3) if the state law does not exceed what is required by 262.4 the federal statute or regulation or court order, the state law 262.5 is not a state mandate. 262.6 Sec. 2. Minnesota Statutes 1997 Supplement, section 3.986, 262.7 subdivision 4, is amended to read: 262.8 Subd. 4. [POLITICAL SUBDIVISION.] A "political 262.9 subdivision" is a county,or home rule charter or statutory city 262.10, town, or other taxing district or municipal corporation. 262.11 Sec. 3. Minnesota Statutes 1997 Supplement, section 3.987, 262.12 subdivision 1, is amended to read: 262.13 Subdivision 1. [LOCAL IMPACT NOTES.] The commissioner of 262.14 finance shall coordinate the development of a local impact note 262.15 for any proposed legislation introduced after June 30, 1997, or 262.16 any rule proposed afterJune 30December 31, 1998, upon request 262.17 of the chair or the ranking minority member of either 262.18 legislative tax committee. Upon receipt of a request to prepare 262.19 a local impact note, the commissioner must notify the authors of 262.20 the proposed legislation or, for an administrative rule, the 262.21 head of the relevant executive agency or department, that the 262.22 request has been made. The local impact note must beprepared262.23as provided in section 3.98, subdivision 2, andmade available 262.24 to the public upon request. If the action is among the 262.25 exceptions listed in section 3.988, a local impact note need not 262.26 be requested nor prepared. The commissioner shall make a 262.27 reasonable and timely estimate of the local fiscal impact on 262.28 each type of political subdivision that would result from the 262.29 proposed legislation. The commissioner of finance may require 262.30 any political subdivision or the commissioner of an 262.31 administrative agency of the state to supply in a timely manner 262.32 any information determined to be necessary to determine local 262.33 fiscal impact. The political subdivision, its representative 262.34 association, or commissioner shall convey the requested 262.35 information to the commissioner of finance with a signed 262.36 statement to the effect that the information is accurate and 263.1 complete to the best of its ability. The political subdivision, 263.2 its representative association, or commissioner, when requested, 263.3 shall update its determination of local fiscal impact based on 263.4 actual cost or revenue figures, improved estimates, or 263.5 both. Upon completion of the note, the commissioner must 263.6 provide a copy to the authors of the proposed legislation or, 263.7 for an administrative rule, to the head of the relevant 263.8 executive agency or department. 263.9 Sec. 4. Minnesota Statutes 1997 Supplement, section 3.987, 263.10 subdivision 2, is amended to read: 263.11 Subd. 2. [MANDATE EXPLANATIONS.] Before a committee 263.12 hearing on any billintroduced in the legislature after June 30,263.131997,that seeks to impose program or financial mandates on 263.14 political subdivisionsmust include an attachment fromthe chair 263.15 or ranking minority member of the committee may request that the 263.16 author provide the committee with a note that gives appropriate 263.17 responses to the following guidelines. It must state and list: 263.18 (1) the policy goals that are sought to be attained,263.19theand any performance standards that are to be imposed, and an263.20explanation why the goals and standards will best be served by263.21requiring compliance byon political subdivisions; 263.22 (2) any performance standards that will allow political 263.23 subdivisions flexibility and innovation of method in achieving 263.24 those goals; 263.25 (3)the reasons for each prescribed standard andthe 263.26 process by which each standard governs input such as staffing 263.27 and other administrative aspects of the program; 263.28 (4) the sources of additional revenue, in addition to 263.29 existing funding for similar programs, that are directly linked 263.30 to imposition of the mandates that will provide adequate and 263.31 stable funding for their requirements; 263.32 (5)what input has been obtained to ensure that the263.33implementing agencies have the capacity to carry out the263.34delegated responsibilities; and263.35(6)the reasons whyless intrusive measures such as263.36 financial incentives or voluntary compliance would not yield the 264.1 equity, efficiency, or desired level of statewide uniformity in 264.2 the proposed program; 264.3 (6) what input has been obtained to ensure that the 264.4 implementing agencies have the capacity to carry out the 264.5 delegated responsibilities; and 264.6 (7) the efforts put forth, if any, to involve political 264.7 subdivisions in the creation or development of the proposed 264.8 mandate. 264.9 Sec. 5. Minnesota Statutes 1997 Supplement, section 3.988, 264.10 subdivision 3, is amended to read: 264.11 Subd. 3. [MISCELLANEOUS EXCEPTIONS.] A local impact note 264.12 or an attachment as provided in section 3.987, subdivision 2, 264.13 need not be prepared for the cost of a mandated action if the 264.14 law, including a rulemaking, containing the mandate: 264.15 (1) accommodates a specific local request; 264.16 (2) results in no new local government duties; 264.17 (3) leads to revenue losses from exemptions to taxes; 264.18 (4) provided only clarifying or conforming, nonsubstantive 264.19 charges on local government; 264.20 (5) imposes additional net local costs that are minor (less264.21than $200an amount less than or equal to one-half of one 264.22 percent of the local revenue base as defined in section 264.23 477A.011, subdivision 27, or $50,000, whichever is less for any 264.24 single local government if the mandate does not apply statewide 264.25 or less than$3,000,000$1,000,000 if the mandate is statewide) 264.26and do not cause a financial burden on local government; 264.27 (6) is a law or executive order enacted before July 1, 264.28 1997, or a rule initially implementing a law enacted before July 264.29 1, 1997; 264.30 (7) implements something other than a law or executive 264.31 order, such as a federal, court, or voter-approved mandate; 264.32 (8)defines a new crime or redefines an existing crime or264.33infraction;264.34(9)results in savings that equal or exceed costs; 264.35(10)(9) requires the holding of elections; 264.36(11)(10) ensures due process or equal protection; 265.1(12)(11) provides for the notification and conduct of 265.2 public meetings; 265.3(13)(12) establishes the procedures for administrative and 265.4 judicial review of actions taken by political subdivisions; 265.5(14)(13) protects the public from malfeasance, 265.6 misfeasance, or nonfeasance by officials of political 265.7 subdivisions; 265.8(15)(14) relates directly to financial administration, 265.9 including the levy, assessment, and collection of taxes; 265.10(16)(15) relates directly to the preparation and 265.11 submission of financial audits necessary to the administration 265.12 of state laws; or 265.13(17)(16) requires uniform standards to apply to public and 265.14 private institutions without differentiation. 265.15 Sec. 6. Minnesota Statutes 1997 Supplement, section 3.989, 265.16 subdivision 1, is amended to read: 265.17 Subdivision 1. [DEFINITIONS.] In this section: 265.18 (1) "Class A state mandates" means those laws under which 265.19 the state mandates to political subdivisions, their 265.20 participation, the organizational structure of the program, and 265.21 the procedural regulations under which the law must be 265.22 administered; and 265.23 (2) "Class B state mandates" means those mandates resulting 265.24 from legislation enacted after July 1, 1998, that specifically 265.25 reference this section and that allow the political subdivisions 265.26 to opt for administration of a law with program elements 265.27 mandated beforehand and with an assured revenue level from the 265.28 state of at least 90 percent of full program and administrative 265.29 costs. 265.30 Sec. 7. Minnesota Statutes 1997 Supplement, section 3.989, 265.31 subdivision 2, is amended to read: 265.32 Subd. 2. [REPORT.] The commissioner of finance shall 265.33 prepare by September 1,19982000, and by September 1 of each 265.34 even-numbered year thereafter, a reportby political265.35subdivisionsof the costs ofclass A statelocal mandates 265.36 established after June 30, 1997. 266.1 The commissioner shallannuallyinclude the statewide total 266.2 of the statement of costs ofclass Alocal mandates after June 266.3 30, 1997, as a notation in the state biennial budgetfor the266.4next fiscal year. 266.5 Sec. 8. Minnesota Statutes 1996, section 16A.102, 266.6 subdivision 1, is amended to read: 266.7 Subdivision 1. [GOVERNOR'S RECOMMENDATION.] By the fourth 266.8 Monday in January of each odd-numbered year, the governor shall 266.9 submit to the legislature a recommended revenue target for the 266.10 next two bienniums. The recommended revenue target must specify: 266.11 (1) the maximum share of Minnesota personal income to be 266.12 collected in taxes and other revenues to pay for state and local 266.13 government services; 266.14 (2) the division of the share between state and local 266.15 government revenues; and 266.16 (3) theappropriatemix and rates of income, sales, and 266.17 other state and local taxes including property taxes and other 266.18 revenues, other than property taxes, and the amount of property266.19taxes and the effect of the recommendations on the incidence of266.20the tax burden by income class. 266.21 The recommendations must be based on the November forecast 266.22 prepared under section 16A.103. 266.23 Sec. 9. Minnesota Statutes 1996, section 16A.102, 266.24 subdivision 2, is amended to read: 266.25 Subd. 2. [LEGISLATIVE BUDGET RESOLUTION.] By March 15 of 266.26 each odd-numbered year, the legislature shall by concurrent 266.27 resolution adopt revenue targets for the next two bienniums. 266.28 The resolution must specify: 266.29 (1) the maximum share of Minnesota personal income to be 266.30 collected in taxes and other revenues to pay for state and local 266.31 government services; 266.32 (2) the division of the share between state and local 266.33 government services; and 266.34 (3) theappropriatemix and rates of income, sales, and 266.35 other state and local taxes including property taxes and other 266.36 revenues, other than property taxes, and the amount of property267.1taxes and the effect of the resolution on the incidence of the267.2tax burden by income class. 267.3 The resolution must be based on the February forecast prepared 267.4 under section 16A.103 and take into consideration the revenue 267.5 targets recommended by the governor under subdivision 1. 267.6 Sec. 10. Minnesota Statutes 1996, section 92.46, is 267.7 amended by adding a subdivision to read: 267.8 Subd. 1b. [SALE OF LEASED PROPERTY.] A lessee holding a 267.9 lease under subdivision 1 on the enactment date of this 267.10 subdivision may request that the leased land be sold at public 267.11 sale. The lessee must submit a written request for public sale 267.12 to the commissioner of natural resources by August 1, 1998. The 267.13 commissioner shall mail notice of this subdivision to each 267.14 leaseholder within one month of the enactment date. 267.15 Notwithstanding section 92.45, the commissioner of natural 267.16 resources shall sell leased land at a public sale on a date 267.17 determined by the commissioner, but in no event later than 267.18 February 1, 1999. Notwithstanding section 92.14, notice of sale 267.19 must be published in the State Register, in a newspaper of 267.20 statewide circulation, and in the daily newspaper of the region 267.21 where the leased land is located. 267.22 Sec. 11. Minnesota Statutes 1997 Supplement, section 267.23 270.67, subdivision 2, is amended to read: 267.24 Subd. 2. [EXTENSION AGREEMENTS.] When any portion of any 267.25 tax payable to the commissioner of revenue together with 267.26 interest and penalty thereon, if any, has not been paid, the 267.27 commissioner may extend the time for payment for a further 267.28 period. When the authority of this section is invoked, the 267.29 extension shall be evidenced by written agreement signed by the 267.30 taxpayer and the commissioner, stating the amount of the tax 267.31 with penalty and interest, if any, and providing for the payment 267.32 of the amount in installments. The agreement may contain a 267.33 confession of judgment for the amount and for any unpaid portion 267.34 thereof and shall provide that the commissioner may forthwith 267.35 enter judgment against the taxpayer in the district court of the 267.36 county of residence as shown upon the taxpayer's tax return for 268.1 the unpaid portion of the amount specified in the extension 268.2 agreement. The agreement shall provide that it can be 268.3 terminated, after notice by the commissioner, if information 268.4 provided by the taxpayer prior to the agreement was inaccurate 268.5 or incomplete, collection of the tax covered by the agreement is 268.6 in jeopardy, there is a subsequent change in the taxpayer's 268.7 financial condition, the taxpayer has failed to make a payment 268.8 due under the agreement, or has failed to pay any other tax or 268.9 file a tax return coming due after the agreement. The notice 268.10 must be given at least 14 calendar days prior to termination, 268.11 and shall advise the taxpayer of the right to request a 268.12 reconsideration from the commissioner of whether termination is 268.13 reasonable and appropriate under the circumstances. A request 268.14 for reconsideration does not stay collection action beyond the 268.15 14-day notice period. If the commissioner has reason to believe 268.16 that collection of the tax covered by the agreement is in 268.17 jeopardy, the commissioner may proceed under sections 270.70, 268.18 subdivision 2, paragraph (b), and 270.274, and terminate the 268.19 agreement without regard to the 14-day period. The commissioner 268.20 may accept other collateral the commissioner considers 268.21 appropriate to secure satisfaction of the tax liability. The 268.22 principal sum specified in the agreement shall bear interest at 268.23 the rate specified in section 270.75 on all unpaid portions 268.24 thereof until the same has been fully paid or the unpaid portion 268.25 thereof has been entered as a judgment. The judgment shall bear 268.26 interest at the rate specified in section 270.75. If it appears 268.27 to the commissioner that the tax reported by the taxpayer is in 268.28 excess of the amount actually owing by the taxpayer, the 268.29 extension agreement or the judgment entered pursuant thereto 268.30 shall be corrected. If after making the extension agreement or 268.31 entering judgment with respect thereto, the commissioner 268.32 determines that the tax as reported by the taxpayer is less than 268.33 the amount actually due, the commissioner shall assess a further 268.34 tax in accordance with the provisions of law applicable to the 268.35 tax. The authority granted to the commissioner by this section 268.36 is in addition to any other authority granted to the 269.1 commissioner by law to extend the time of payment or the time 269.2 for filing a return and shall not be construed in limitation 269.3 thereof. 269.4 Sec. 12. Minnesota Statutes 1997 Supplement, section 269.5 297H.04, is amended by adding a subdivision to read: 269.6 Subd. 3. [INCINERATION WITH MIXED WASTE; RATE.] Nonmixed 269.7 municipal solid waste that is separately collected and 269.8 processed, but must be incinerated with mixed municipal solid 269.9 waste in accordance with an industrial solid waste management 269.10 plan approved by the pollution control agency, shall be taxed at 269.11 the rate for nonmixed municipal solid waste. 269.12 Sec. 13. Minnesota Statutes 1996, section 360.653, is 269.13 amended to read: 269.14 360.653 [AIRCRAFT, EXEMPTIONS.] 269.15 The following aircraft, under the conditions specified, 269.16 shall be exempt from the registration and the tax provided by 269.17 sections 360.511 to 360.67. 269.18 (1) Any aircraft held by a dealer listed and used as 269.19 provided in section 360.63, except that aircraft held by dealers 269.20 on October 1, of each year, shall be registered and the entire 269.21 tax provided by sections 360.511 to 360.67 shall be paid for the 269.22 portion of the fiscal year, prorated on a monthly basis 269.23 remaining after the aircraft came into the possession of the 269.24 dealer. It is further provided that a dealer who has previously 269.25 had aircraft on withholding may register such aircraft in 269.26 September of each fiscal year by payment of an amount equal to 269.27 one-third of the annual tax, which tax shall be applicable for 269.28 the months of September through December and in January the 269.29 dealer may again list these aircraft on the dealer's withholding 269.30 form. 269.31 (2) Aircraft remaining in the possession of aircraft 269.32 manufacturers ten months after completion shall become subject 269.33 to the tax provided by sections 360.511 to 360.67. The tax 269.34 shall be computed from the expiration of the ten months period 269.35 and shall be prorated on a monthly basis. 269.36 (3) Aircraft while in the hands of aircraft refitters for 270.1 the purpose of being refitted or modified or both, and while 270.2 being refitted or modified or both. 270.3 (4) Aircraft licensed under section 144E.12 and used 270.4 exclusively to provide air ambulance service are exempt from the 270.5 tax only. 270.6 Sec. 14. Minnesota Statutes 1996, section 469.169, is 270.7 amended by adding a subdivision to read: 270.8 Subd. 12. [ADDITIONAL ENTERPRISE ZONE ALLOCATIONS.] In 270.9 addition to tax reductions authorized in subdivisions 7, 8, 9, 270.10 10, and 11, the commissioner may allocate $500,000 for tax 270.11 reductions pursuant to enterprise zone designations, as 270.12 designated in Laws 1997, chapter 231, article 16, section 26. 270.13 Allocations made under this subdivision may be used for tax 270.14 reductions as provided in section 469.171, or other offsets of 270.15 taxes imposed on or remitted by businesses located in the 270.16 enterprise zone, but only if the municipality determines that 270.17 the granting of the tax reduction or offset is necessary in 270.18 order to retain a business within or attract a business to the 270.19 enterprise zone. Limitations on allocations under subdivision 7 270.20 do not apply to this allocation. 270.21 Sec. 15. Minnesota Statutes 1996, section 473.3915, 270.22 subdivision 2, is amended to read: 270.23 Subd. 2. [REGULAR ROUTE TRANSIT SERVICE.] "Regular route 270.24 transit service" means services as defined in section 473.385, 270.25 subdivision 1, paragraph (b), with at least two scheduled runs 270.26 per hour between 7:00 a.m. and 6:30 p.m., Monday to Friday, and 270.27 regularly scheduled service on Saturday, Sunday, and holidays, 270.28 and weekdays after 6:30 p.m. The two scheduled runs for buses 270.29 leaving a replacement transit service transit hub need not be on 270.30 the same route. 270.31 Sec. 16. Minnesota Statutes 1996, section 473.3915, 270.32 subdivision 3, is amended to read: 270.33 Subd. 3. [TRANSIT ZONE.] "Transit zone" means: (1) the 270.34 area within one-quarter of a mile of a route along which regular 270.35 route transit service is provided that is also within the 270.36 metropolitan urban service area, as determined by the council; 271.1 or (2) the area within one-eighth of a mile around a replacement 271.2 transit service transit hub. "Transit zone" includes any light 271.3 rail transit route for which funds for construction have been 271.4 committed. 271.5 Sec. 17. Laws 1997, chapter 231, article 13, section 19, 271.6 is amended to read: 271.7 Sec. 19. [MORATORIUM.] 271.8 The commissioner of revenue shall not initiate or continue 271.9 any action to collect any underpayment from political 271.10 subdivisions, or to reimburse any overpayment to any political 271.11 subdivisions, of use taxes on solid waste management services 271.12 under Minnesota Statutes, section 297A.45, or of sales taxes on 271.13 any amount included on a property tax statement for county solid 271.14 waste management services, and any other amount collected by a 271.15 county under Minnesota Statutes, section 400.08 or 473.811, 271.16 subdivision 3a. The moratorium is effective for the period from 271.17 January 1, 1990, through December 31,19961997. 271.18 Sec. 18. [SPECIAL PREMIUM TAX PAYMENT.] 271.19 Health maintenance organizations, community integrated 271.20 service networks, and nonprofit health service plan corporations 271.21 that have met the cost containment goals established in 271.22 Minnesota Statutes, section 62J.04, in the individual and small 271.23 employer market for calendar year 1996 shall pay a special, 271.24 one-time 1999 premium tax payment. The tax payment must be 271.25 based on an amount equal to one percent of gross premiums less 271.26 return premiums on all direct business received by the insurer 271.27 in this state, or by its agents for it, in cash or otherwise 271.28 after March 30, 1997, and before January 1, 1998. Payment of 271.29 the tax under this section is due January 2, 1999. Provisions 271.30 relating to the payment, assessment, and collection of the tax 271.31 assessed under Minnesota Statutes, section 60A.15, shall apply 271.32 to the special tax payment assessed under this section. 271.33 Sec. 19. [PRIVATE SALE OF SURPLUS LAND; RED LAKE COUNTY.] 271.34 (a) Notwithstanding Minnesota Statutes, sections 92.45, 271.35 94.09, and 94.10, the commissioner of natural resources may sell 271.36 by private sale to the adjacent land owner, for a consideration 272.1 equal to the appraised value, the surplus land bordering public 272.2 water that is described in paragraph (c), under the remaining 272.3 provisions of Minnesota Statutes, chapter 94. 272.4 (b) The conveyance shall be in a form approved by the 272.5 attorney general. 272.6 (c) The land that may be sold is located in Red Lake 272.7 county, consists of about 50 acres, and is described as follows: 272.8 (1) Government lot 5, section 25, Township 152 North, Range 272.9 40 West; 272.10 (2) Government lot 7, section 25, Township 152 North, Range 272.11 40 West. 272.12 (d) The commissioner has determined that the land is no 272.13 longer needed for any natural resource purpose and that the 272.14 state's land management interests would best be served if the 272.15 land was returned to private ownership. 272.16 Sec. 20. [TAX STUDY COMMISSION; STATE AND LOCAL FISCAL 272.17 RELATIONS.] 272.18 Subdivision 1. [CREATION; MEMBERSHIP.] (a) A tax study 272.19 commission is established to study state and local fiscal 272.20 relations in Minnesota and to make recommendations to the 1999 272.21 legislature. The study shall be completed and findings reported 272.22 to the legislature by February 1, 1999. 272.23 (b) The commission consists of 30 members who serve at the 272.24 pleasure of the appointing authority as follows: 272.25 (1) ten legislators; five members of the senate, one of 272.26 which must be the chair of the senate tax committee, and two 272.27 members must be from the minority party, appointed by the 272.28 subcommittee on committees of the committee on rules and 272.29 administration; and five members of the house of 272.30 representatives, one of which must be the chair of the house tax 272.31 committee, and two members must be from the minority party, 272.32 appointed by the speaker. The chairs of the house and senate 272.33 tax committees shall serve as co-chairs of the commission, and 272.34 the chair of the house tax committee shall chair the first 272.35 meeting; 272.36 (2) two representatives of the executive branch of state 273.1 government, appointed by the governor; 273.2 (3) three county officials, appointed by the governor from 273.3 a slate of at least six county officials submitted by the 273.4 association of Minnesota counties; 273.5 (4) three city officials, appointed by the governor from a 273.6 slate of at least six city officials submitted by the league of 273.7 Minnesota cities; 273.8 (5) three school district officials, appointed by the 273.9 governor from a slate of at least six school district officials 273.10 submitted by the Minnesota school board association; 273.11 (6) one town official, appointed by the governor from a 273.12 slate of at least two submitted by the Minnesota association of 273.13 township officers; and 273.14 (7) eight members of the public who are not holding public 273.15 office, four of whom shall be appointed by the senate committee 273.16 on rules and administration and four of whom shall be appointed 273.17 by the speaker of the house of representatives. These 273.18 appointments must be made from a slate of at least 16 names 273.19 submitted by the governor. 273.20 (c) Compensation to the nonlegislative members is allowed 273.21 as provided under Minnesota Statutes, section 15.075. 273.22 (d) The appointments under this subdivision must be made no 273.23 later than June 15, 1998. 273.24 Subd. 2. [SCOPE OF STUDY.] The tax study commission is to 273.25 study the state and local finance system, including, but not 273.26 limited to, the following subjects: 273.27 (1) the allocation of functions between state and local 273.28 governments; 273.29 (2) the relationship between spending decisions and taxing 273.30 authority; 273.31 (3) the efficiency and equity of the system, and how it 273.32 addresses tax disparities between property classes, and how it 273.33 recognizes ability to pay; 273.34 (4) the responsiveness of the system to the costs imposed 273.35 on local governments by state mandates; 273.36 (5) the relationship between state and local taxes; and 274.1 (6) the adequacy of the tax system in addressing emerging 274.2 technologies, such as telecommunications. 274.3 Subd. 3. [RECOMMENDATIONS.] The tax study commission shall 274.4 make recommendations regarding the state and local finance 274.5 system, recommending ways to make the system: 274.6 (1) simpler and more understandable to the average citizen; 274.7 (2) more accountable, including the relationship between 274.8 spending decisions and taxing authority; 274.9 (3) more reliable, predictable, and stable over time; and 274.10 (4) more immune from the effects of the business cycle and 274.11 other risks. 274.12 Subd. 4. [STAFF.] The department of revenue and 274.13 legislative staff shall provide administrative and staff 274.14 assistance when requested by the commission. 274.15 Subd. 5. [COOPERATION BY OTHER AGENCIES.] The state 274.16 auditor and any other state department or agency shall, upon 274.17 request by the commission, provide data or other information 274.18 that is collected or possessed by their agencies and that is 274.19 necessary or useful in conducting the study and preparing the 274.20 report required by this section. 274.21 Subd. 6. [APPROPRIATION.] $122,500 is appropriated from 274.22 the general fund for fiscal year 1999 to the legislative 274.23 coordinating commission to pay the expenses of the commission. 274.24 This appropriation may be used to contract with the state and 274.25 local policy program of the Humphrey Institute of Public Affairs 274.26 or to hire a consultant or consultants to prepare all or part of 274.27 the study. 274.28 Sec. 21. [APPROPRIATIONS.] 274.29 Subdivision 1. [BAT STUDY.] $122,500 is appropriated from 274.30 the general fund for fiscal year 1999 to the legislative 274.31 coordinating commission to study alternative methods of taxing 274.32 business. The appropriations under this section and under Laws 274.33 1997, chapter 231, article 5, section 18, subdivision 3, are 274.34 available in fiscal years 2000 and 2001. 274.35 Subd. 2. [COST OF ADMINISTERING BILL.] $226,000 is 274.36 appropriated from the general fund for fiscal year 1999 to the 275.1 commissioner of revenue for the cost of administering this act, 275.2 excluding article 1. 275.3 Sec. 22. [APPLICATION.] 275.4 Sections 15 and 16 apply in the counties of Anoka, Carver, 275.5 Dakota, Hennepin, Ramsey, Scott, and Washington. 275.6 Sec. 23. [REPEALER.] 275.7 Minnesota Statutes 1997 Supplement, sections 3.987, 275.8 subdivision 3, and 14.431, are repealed. 275.9 Sec. 24. [EFFECTIVE DATE.] 275.10 Sections 8, 9, 11, 14, 19, and 20 are effective the day 275.11 following final enactment. Section 12 is effective 275.12 retroactively to January 1, 1998. Sections 15 and 16 are 275.13 effective for taxes payable in 1999 and thereafter.