Minnesota Legislature
SF 1505
1st Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to taxation; making changes to income, 1.3 estate, franchise, sales and use, property, motor 1.4 vehicle sales tax and registration, cigarette and 1.5 tobacco, liquor, aggregate and minerals taxes; 1.6 creating and modifying certain sales tax exemptions; 1.7 extending sunset dates for certain sales and property 1.8 tax exemptions; providing for the disposition of local 1.9 sales taxes for the cities of Duluth, St. Paul, 1.10 Hermantown, Rochester, and Proctor; authorizing local 1.11 sales taxes in the cities of Beaver Bay, Bemidji, 1.12 Cloquet, Hopkins, Medford, and Park Rapids; 1.13 authorizing lodging taxes in the city of Newport and 1.14 Itasca county; providing property tax exemptions and 1.15 exclusions from property valuations; modifying 1.16 truth-in-taxation provisions; providing for the 1.17 creation of housing districts; authorizing or 1.18 modifying the authority of tax increment financing 1.19 districts in Detroit Lakes, Duluth, Monticello, New 1.20 Hope, Richfield, Roseville, and St. Michael; 1.21 authorizing the creation of and modifying the 1.22 authority of local districts and economic development 1.23 authorities; granting bonding authority to the state 1.24 agricultural society and other political subdivisions; 1.25 allowing bonding for computer systems and other 1.26 purposes; authorizing cities to establish a program 1.27 for issuance of capital improvement bonds; limiting 1.28 challenges to tax increment financing actions; 1.29 establishing the corporate status of an entity; 1.30 updating to federal provisions; modifying payment, 1.31 penalty, interest, and enforcement provisions; 1.32 distributing payments to counties; allowing counties 1.33 to sell tax liens; authorizing billing of counties for 1.34 certain medical exams; changing requirements for 1.35 purchases of recycled materials; making technical 1.36 changes; imposing penalties; amending Minnesota 1.37 Statutes 2002, sections 16B.121; 115B.24, subdivision 1.38 8; 168.012, subdivision 1; 168A.03; 216B.2424, 1.39 subdivision 5; 256.969, by adding a subdivision; 1.40 270.06; 270.10, subdivision 1a; 270.60, subdivision 4; 1.41 270.69, by adding a subdivision; 270.701, subdivision 1.42 2, by adding a subdivision; 270.72, subdivision 2; 1.43 270A.03, subdivision 2; 270B.12, by adding a 1.44 subdivision; 272.02, subdivisions 26, 31, 47, 53, by 1.45 adding subdivisions; 272.12; 273.01; 273.05, 1.46 subdivision 1; 273.061, by adding subdivisions; 2.1 273.08; 273.11, subdivision 1a, by adding 2.2 subdivisions; 273.124, subdivision 1; 273.13, 2.3 subdivisions 22, 25; 273.1315; 273.1398, subdivisions 2.4 4b, 4d; 273.372; 273.42, subdivision 2; 274.01, 2.5 subdivision 1; 274.13, subdivision 1; 275.025, 2.6 subdivisions 1, 3, 4; 275.065, subdivisions 1, 1a, 3; 2.7 276.04, subdivision 2; 276.10; 276.11, subdivision 1; 2.8 277.20, subdivision 2; 278.03, subdivision 1; 278.05, 2.9 subdivision 6; 279.01, subdivision 1, by adding a 2.10 subdivision; 279.06, subdivision 1; 281.17; 282.01, 2.11 subdivisions 1b, 7a; 282.08; 287.12; 287.29, 2.12 subdivision 1; 287.31, by adding a subdivision; 2.13 289A.02, subdivision 7; 289A.10, subdivision 1; 2.14 289A.19, subdivision 4; 289A.31, subdivisions 3, 4, by 2.15 adding a subdivision; 289A.36, subdivision 7, by 2.16 adding subdivisions; 289A.50, subdivision 2a; 289A.56, 2.17 subdivision 3; 289A.60, subdivision 7, by adding a 2.18 subdivision; 290.01, subdivisions 19, 19b, 19d, 31; 2.19 290.06, subdivision 2c; 290.0671, subdivision 1; 2.20 290.0675, subdivisions 2, 3; 290.0679, subdivision 2; 2.21 290.0802, subdivision 1; 290A.03, subdivisions 8, 15; 2.22 290C.02, subdivisions 3, 7; 290C.03; 290C.07; 290C.09; 2.23 290C.10; 290C.11; 291.005, subdivision 1; 291.03, 2.24 subdivision 1; 295.50, subdivision 9b; 295.53, 2.25 subdivision 1; 297A.61, subdivisions 3, 12, 34, by 2.26 adding subdivisions; 297A.62, subdivision 3; 297A.665; 2.27 297A.67, subdivisions 2, 18, by adding subdivisions; 2.28 297A.68, subdivisions 5, 36, by adding a subdivision; 2.29 297A.69, subdivisions 2, 3, 4; 297A.70, subdivisions 2.30 8, 16; 297A.71, subdivision 10, by adding 2.31 subdivisions; 297A.85; 297B.025, subdivisions 1, 2; 2.32 297B.03; 297B.035, subdivision 1, by adding a 2.33 subdivision; 297F.01, subdivisions 21a, 23; 297F.06, 2.34 subdivision 4; 297F.08, by adding a subdivision; 2.35 297F.20, subdivisions 1, 2, 3, 6, 9; 297G.01, by 2.36 adding a subdivision; 297G.03, subdivision 1; 297I.01, 2.37 subdivision 9; 297I.20; 352.15, subdivision 1; 353.15, 2.38 subdivision 1; 354.10, subdivision 1; 354B.30; 2.39 354C.165; 373.01, subdivision 3; 373.45, subdivision 2.40 1; 373.47, subdivision 1; 376.009; 376.55, subdivision 2.41 3, by adding a subdivision; 376.56, subdivision 3; 2.42 383B.77, subdivisions 1, 2; 410.32; 412.301; 469.169, 2.43 by adding a subdivision; 469.1731, subdivision 3; 2.44 469.174, subdivision 10, by adding subdivisions; 2.45 469.175, subdivision 3, by adding a subdivision; 2.46 469.176, subdivision 7; 469.1761, by adding a 2.47 subdivision; 469.1763, subdivision 2; 469.177, 2.48 subdivision 1; 469.1792; 473.39, by adding a 2.49 subdivision; 473F.07, subdivision 4; 473F.08, by 2.50 adding a subdivision; 475.58, subdivision 3b; 2.51 477A.011, subdivision 30; 515B.1-116; Laws 1967, 2.52 chapter 558, section 1, subdivision 5, as amended; 2.53 Laws 1978, chapter 464, section 1; Laws 1980, chapter 2.54 511, section 1, subdivision 2, as amended; Laws 1980, 2.55 chapter 511, section 2, as amended; Laws 1989, chapter 2.56 211, section 8, subdivision 2, as amended; Laws 1989, 2.57 chapter 211, section 8, subdivision 4, as amended; 2.58 Laws 1993, chapter 375, article 9, section 46, 2.59 subdivision 2, as amended; Laws 1996, chapter 471, 2.60 article 2, section 29; Laws 1998, chapter 389, article 2.61 8, section 43, subdivision 3; Laws 1998, chapter 389, 2.62 article 8, section 43, subdivision 4; Laws 1999, 2.63 chapter 243, article 4, section 18, subdivision 1; 2.64 Laws 1999, chapter 243, article 4, section 18, 2.65 subdivision 3; Laws 1999, chapter 243, article 4, 2.66 section 18, subdivision 4; Laws 1999, chapter 243, 2.67 article 4, section 19, as amended; Laws 2001, First 2.68 Special Session chapter 5, article 3, section 61, the 2.69 effective date; Laws 2001 First Special Session 2.70 chapter 5, article 3, section 63, the effective date; 2.71 Laws 2001, First Special Session chapter 5, article 3, 3.1 section 96; Laws 2001, First Special Session chapter 3.2 5, article 9, section 12, the effective date; Laws 3.3 2001, First Special Session chapter 5, article 12, 3.4 section 67, the effective date; Laws 2002, chapter 3.5 377, article 3, section 15, the effective date; Laws 3.6 2002 chapter 377, article 6, section 4, the effective 3.7 date; proposing coding for new law in Minnesota 3.8 Statutes, chapters 37; 270; 273; 275; 276; 290C; 410; 3.9 469; proposing coding for new law as Minnesota 3.10 Statutes, chapter 280A; repealing Minnesota Statutes 3.11 2002, sections 270.691, subdivision 8; 274.04; 3.12 290.0671, subdivision 3; 290.0675, subdivision 5; 3.13 294.01; 294.02; 294.021; 294.03; 294.06; 294.07; 3.14 294.08; 294.09; 294.10; 294.11; 294.12; 297A.72, 3.15 subdivision 1; 297A.97; 477A.065; Laws 1984, chapter 3.16 652, section 2; Laws 2002, chapter 377, article 9, 3.17 section 12, the effective date; Minnesota Rules, parts 3.18 8007.0300, subpart 3; 8009.7100; 8009.7200; 8009.7300; 3.19 8009.7400; 8092.1000; 8106.0100, subparts 11, 15, 16; 3.20 8106.0200; 8125.1000; 8125.1300, subpart 1; 8125.1400; 3.21 8130.0800, subparts 5, 12; 8130.1300; 8130.1600, 3.22 subpart 5; 8130.1700, subparts 3, 4; 8130.4800, 3.23 subpart 2; 8130.7500, subpart 5; 8130.8000; 8130.8300. 3.24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.25 ARTICLE 1 3.26 SALES TAX 3.27 Section 1. Minnesota Statutes 2002, section 16B.121, is 3.28 amended to read: 3.29 16B.121 [PURCHASE OF RECYCLED, REPAIRABLE, AND DURABLE 3.30 MATERIALS.] 3.31 The commissioner shall take the recycled content and 3.32 recyclability of commodities to be purchased into consideration 3.33 in bid specifications.When feasible and when the price of3.34recycled materials does not exceed the price of nonrecycled3.35materials by more than ten percent,The commissioner, and state 3.36 agencies when purchasing under delegated authority, shall 3.37 purchase recycled materials, unless the commissioner determines 3.38 that the price of the recycled materials exceeds the price of 3.39 nonrecycled materials by more than ten percent or that use of 3.40 the recycled materials would be impracticable. In order to 3.41 maximize the quantity and quality of recycled materials 3.42 purchased, the commissioner, and state agencies when purchasing 3.43 under delegated authority, may also use other appropriate 3.44 procedures to acquire recycled materials at the most economical 3.45 cost to the state. 3.46 When purchasing commodities and services, the commissioner, 3.47 and state agencies when purchasing under delegated authority, 4.1 shall apply and promote the preferred waste management practices 4.2 listed in section 115A.02, with special emphasis on reduction of 4.3 the quantity and toxicity of materials in waste. The 4.4 commissioner, and state agencies when purchasing under delegated 4.5 authority, in developing bid specifications, shall consider the 4.6 extent to which a commodity or product is durable, reusable, or 4.7 recyclable and marketable through the state resource recovery 4.8 program and the extent to which the commodity or product 4.9 contains postconsumer material. 4.10 Sec. 2. Minnesota Statutes 2002, section 168.012, 4.11 subdivision 1, is amended to read: 4.12 Subdivision 1. [VEHICLES EXEMPT FROM TAX, FEES, OR PLATE 4.13 DISPLAY.] (a) The following vehicles are exempt from the 4.14 provisions of this chapter requiring payment of tax and 4.15 registration fees, except as provided in subdivision 1c: 4.16 (1) vehicles owned and used solely in the transaction of 4.17 official business by the federal government, the state, or any 4.18 political subdivision; 4.19 (2) vehicles owned and used exclusively by educational 4.20 institutions and used solely in the transportation of pupils to 4.21 and from those institutions; 4.22 (3) vehicles used solely in driver education programs at 4.23 nonpublic high schools; 4.24 (4) vehicles owned by nonprofit charities and used 4.25 exclusively to transport disabled persons for educational 4.26 purposes; 4.27 (5) ambulances owned by ambulance services licensed under 4.28 section 144E.10, the general appearance of which is 4.29 unmistakable;and4.30 (6) vehicles used to provide emergency medical services, 4.31 except as provided in paragraph (b), and owned by the state, a 4.32 political subdivision, or an ambulance service licensed under 4.33 section 144E.10; and 4.34 (7) vehicles owned by a commercial driving school licensed 4.35 under section 171.34, or an employee of a commercial driving 4.36 school licensed under section 171.34, and the vehicle is used 5.1 exclusively for driver education and training. 5.2 (b) Vehicles owned by the federal government, municipal 5.3 fire apparatuses including fire-suppression support vehicles, 5.4 police patrols, and ambulances, the general appearance of which 5.5 is unmistakable, are not required to register or display number 5.6 plates. 5.7 (c) Unmarked vehicles used in general police work, liquor 5.8 investigations, or arson investigations, and passenger 5.9 automobiles, pickup trucks, and buses owned or operated by the 5.10 department of corrections, must be registered and must display 5.11 appropriate license number plates, furnished by the registrar at 5.12 cost. Original and renewal applications for these license 5.13 plates authorized for use in general police work and for use by 5.14 the department of corrections must be accompanied by a 5.15 certification signed by the appropriate chief of police if 5.16 issued to a police vehicle, the appropriate sheriff if issued to 5.17 a sheriff's vehicle, the commissioner of corrections if issued 5.18 to a department of corrections vehicle, or the appropriate 5.19 officer in charge if issued to a vehicle of any other law 5.20 enforcement agency. The certification must be on a form 5.21 prescribed by the commissioner and state that the vehicle will 5.22 be used exclusively for a purpose authorized by this section. 5.23 (d) Unmarked vehicles used by the departments of revenue 5.24 and labor and industry, fraud unit, in conducting seizures or 5.25 criminal investigations must be registered and must display 5.26 passenger vehicle classification license number plates, 5.27 furnished at cost by the registrar. Original and renewal 5.28 applications for these passenger vehicle license plates must be 5.29 accompanied by a certification signed by the commissioner of 5.30 revenue or the commissioner of labor and industry. The 5.31 certification must be on a form prescribed by the commissioner 5.32 and state that the vehicles will be used exclusively for the 5.33 purposes authorized by this section. 5.34 (e) Unmarked vehicles used by the division of disease 5.35 prevention and control of the department of health must be 5.36 registered and must display passenger vehicle classification 6.1 license number plates. These plates must be furnished at cost 6.2 by the registrar. Original and renewal applications for these 6.3 passenger vehicle license plates must be accompanied by a 6.4 certification signed by the commissioner of health. The 6.5 certification must be on a form prescribed by the commissioner 6.6 and state that the vehicles will be used exclusively for the 6.7 official duties of the division of disease prevention and 6.8 control. 6.9 (f) Unmarked vehicles used by staff of the gambling control 6.10 board in gambling investigations and reviews must be registered 6.11 and must display passenger vehicle classification license number 6.12 plates. These plates must be furnished at cost by the 6.13 registrar. Original and renewal applications for these 6.14 passenger vehicle license plates must be accompanied by a 6.15 certification signed by the board chair. The certification must 6.16 be on a form prescribed by the commissioner and state that the 6.17 vehicles will be used exclusively for the official duties of the 6.18 gambling control board. 6.19 (g) All other motor vehicles must be registered and display 6.20 tax-exempt number plates, furnished by the registrar at cost, 6.21 except as provided in subdivision 1c. All vehicles required to 6.22 display tax-exempt number plates must have the name of the state 6.23 department or political subdivision, nonpublic high school 6.24 operating a driver education program, or licensed commercial 6.25 driving school, plainly displayed on both sides of the vehicle; 6.26 except that each state hospital and institution for the mentally 6.27 ill and mentally retarded may have one vehicle without the 6.28 required identification on the sides of the vehicle, and county 6.29 social service agencies may have vehicles used for child and 6.30 vulnerable adult protective services without the required 6.31 identification on the sides of the vehicle. This identification 6.32 must be in a color giving contrast with that of the part of the 6.33 vehicle on which it is placed and must endure throughout the 6.34 term of the registration. The identification must not be on a 6.35 removable plate or placard and must be kept clean and visible at 6.36 all times; except that a removable plate or placard may be 7.1 utilized on vehicles leased or loaned to a political subdivision 7.2 or to a nonpublic high school driver education program. 7.3 [EFFECTIVE DATE.] This section is effective July 1, 2003. 7.4 Sec. 3. Minnesota Statutes 2002, section 168A.03, is 7.5 amended to read: 7.6 168A.03 [EXEMPT VEHICLES.] 7.7 Subdivision 1. The registrar shall not issue a certificate 7.8 of title for: 7.9 (1) a vehicle owned by the United States; 7.10 (2)a vehicle owned by a manufacturer or dealer and held7.11for sale, even though incidentally moved on the highway or used7.12pursuant to section 168.27 or 168.28, or a vehicle used by a7.13manufacturer solely for testing;7.14(3)a vehicle owned by a nonresident and not required by 7.15 law to be registered in this state; 7.16(4)(3) a vehicle owned by a nonresident and regularly 7.17 engaged in the interstate transportation of persons or property 7.18 for which a currently effective certificate of title has been 7.19 issued in another state; 7.20(5)(4) a vehicle moved solely by animal power; 7.21(6)(5) an implement of husbandry; 7.22(7)(6) special mobile equipment; 7.23(8)(7) a self-propelled wheelchair or invalid tricycle; 7.24(9)(8) a trailer (i) having a gross weight of 4,000 pounds 7.25 or less unless a secured party holds an interest in the trailer 7.26 or a certificate of title was previously issued by this state or 7.27 any other state or (ii) designed primarily for agricultural 7.28 purposes except recreational equipment or a manufactured home, 7.29 both as defined in section 168.011, subdivisions 8 and 25; 7.30(10)(9) a snowmobile. 7.31 Subd. 2. [DEALERS.] No certificate of title need be 7.32 obtained for a vehicle owned by a manufacturer or dealer and 7.33 held for sale, even though incidentally moved on the highway or 7.34 used pursuant to section 168.27 or 168.28, or a vehicle used by 7.35 a manufacturer solely for testing. 7.36 [EFFECTIVE DATE.] This section is effective July 1, 2003. 8.1 Sec. 4. Minnesota Statutes 2002, section 297A.61, 8.2 subdivision 3, is amended to read: 8.3 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 8.4 include, but are not limited to, each of the transactions listed 8.5 in this subdivision. 8.6 (b) Sale and purchase include: 8.7 (1) any transfer of title or possession, or both, of 8.8 tangible personal property, whether absolutely or conditionally, 8.9 for a consideration in money or by exchange or barter; and 8.10 (2) the leasing of or the granting of a license to use or 8.11 consume, for a consideration in money or by exchange or barter, 8.12 tangible personal property, other than a manufactured home used 8.13 for residential purposes for a continuous period of 30 days or 8.14 more. 8.15 (c) Sale and purchase include the production, fabrication, 8.16 printing, or processing of tangible personal property for a 8.17 consideration for consumers who furnish either directly or 8.18 indirectly the materials used in the production, fabrication, 8.19 printing, or processing. 8.20 (d) Sale and purchase include the preparing for a 8.21 consideration of food. Notwithstanding section 297A.67, 8.22 subdivision 2, taxable food includes, but is not limited to, the 8.23 following: 8.24 (1) prepared food sold by the retailer; 8.25 (2) soft drinks; 8.26 (3) candy; and 8.27 (4) all food sold through vending machines. 8.28 (e) A sale and a purchase includes the furnishing for a 8.29 consideration of electricity, gas, water, or steam for use or 8.30 consumption within this state. 8.31 (f) A sale and a purchase includes the transfer for a 8.32 consideration of computer software. 8.33 (g) A sale and a purchase includes the furnishing for a 8.34 consideration of the following services: 8.35 (1) the privilege of admission to places of amusement, 8.36 recreational areas, or athletic events, and the making available 9.1 of amusement devices, tanning facilities, reducing salons, steam 9.2 baths, turkish baths, health clubs, and spas or athletic 9.3 facilities; 9.4 (2) lodging and related services by a hotel, rooming house, 9.5 resort, campground, motel, or trailer camp and the granting of 9.6 any similar license to use real property other than the renting 9.7 or leasing of it for a continuous period of 30 days or more; 9.8 (3) parking services, whether on a contractual, hourly, or 9.9 other periodic basis, except for parking at a meter; 9.10 (4) the granting of membership in a club, association, or 9.11 other organization if: 9.12 (i) the club, association, or other organization makes 9.13 available for the use of its members sports and athletic 9.14 facilities, without regard to whether a separate charge is 9.15 assessed for use of the facilities; and 9.16 (ii) use of the sports and athletic facility is not made 9.17 available to the general public on the same basis as it is made 9.18 available to members. 9.19 Granting of membership means both onetime initiation fees and 9.20 periodic membership dues. Sports and athletic facilities 9.21 include golf courses; tennis, racquetball, handball, and squash 9.22 courts; basketball and volleyball facilities; running tracks; 9.23 exercise equipment; swimming pools; and other similar athletic 9.24 or sports facilities; 9.25 (5) delivery of aggregate materials and concrete block by a 9.26 third party if the delivery would be subject to the sales tax if 9.27 provided by the seller of the aggregate material or concrete 9.28 block; and 9.29 (6) services as provided in this clause: 9.30 (i) laundry and dry cleaning services including cleaning, 9.31 pressing, repairing, altering, and storing clothes, linen 9.32 services and supply, cleaning and blocking hats, and carpet, 9.33 drapery, upholstery, and industrial cleaning. Laundry and dry 9.34 cleaning services do not include services provided by coin 9.35 operated facilities operated by the customer; 9.36 (ii) motor vehicle washing, waxing, and cleaning services, 10.1 including services provided by coin operated facilities operated 10.2 by the customer, and rustproofing, undercoating, and towing of 10.3 motor vehicles; 10.4 (iii) building and residential cleaning, maintenance, and 10.5 disinfecting and exterminating services; 10.6 (iv) detective, security, burglar, fire alarm, and armored 10.7 car services; but not including services performed within the 10.8 jurisdiction they serve by off-duty licensed peace officers as 10.9 defined in section 626.84, subdivision 1, or services provided 10.10 by a nonprofit organization for monitoring and electronic 10.11 surveillance of persons placed on in-home detention pursuant to 10.12 court order or under the direction of the Minnesota department 10.13 of corrections; 10.14 (v) pet grooming services; 10.15 (vi) lawn care, fertilizing, mowing, spraying and sprigging 10.16 services; garden planting and maintenance; tree, bush, and shrub 10.17 pruning, bracing, spraying, and surgery; indoor plant care; 10.18 tree, bush, shrub, and stump removal; and tree trimming for 10.19 public utility lines. Services performed under a construction 10.20 contract for the installation of shrubbery, plants, sod, trees, 10.21 bushes, and similar items are not taxable; 10.22 (vii) massages, except when provided by a licensed health 10.23 care facility or professional or upon written referral from a 10.24 licensed health care facility or professional for treatment of 10.25 illness, injury, or disease; and 10.26 (viii) the furnishing of lodging, board, and care services 10.27 for animals in kennels and other similar arrangements, but 10.28 excluding veterinary and horse boarding services. 10.29 In applying the provisions of this chapter, the terms 10.30 "tangible personal property" and "sales at retail" include 10.31 taxable services and the provision of taxable services, unless 10.32 specifically provided otherwise. Services performed by an 10.33 employee for an employer are not taxable. Services performed by 10.34 a partnership or association for another partnership or 10.35 association are not taxable if one of the entities owns or 10.36 controls more than 80 percent of the voting power of the equity 11.1 interest in the other entity. Services performed between 11.2 members of an affiliated group of corporations are not taxable. 11.3 For purposes of this section, "affiliated group of corporations" 11.4 includes those entities that would be classified as members of 11.5 an affiliated group under United States Code, title 26, section 11.6 1504, and that are eligible to file a consolidated tax return 11.7 for federal income tax purposes. 11.8 (h) A sale and a purchase includes the furnishing for a 11.9 consideration of tangible personal property or taxable services 11.10 by the United States or any of its agencies or 11.11 instrumentalities, or the state of Minnesota, its agencies, 11.12 instrumentalities, or political subdivisions. 11.13 (i) A sale and a purchase includes the furnishing for a 11.14 consideration of telecommunications services, including cable 11.15 television services and direct satellite services. 11.16 Telecommunications services are taxed to the extent allowed 11.17 under federal law if those services: 11.18 (1) either (i) originate and terminate in this state; or 11.19 (ii) originate in this state and terminate outside the state and 11.20 the service is charged to a telephone number customer located in 11.21 this state or to the account of any transmission instrument in 11.22 this state; or (iii) originate outside this state and terminate 11.23 in this state and the service is charged to a telephone number 11.24 customer located in this state or to the account of any 11.25 transmission instrument in this state; or 11.26 (2) are rendered by providing a private communications 11.27 service for which the customer has one or more locations within 11.28 Minnesota connected to the service and the service is charged to 11.29 a telephone number customer located in this state or to the 11.30 account of any transmission instrument in this state. 11.31 All charges for mobile telecommunications services, as 11.32 defined in United States Code, title 4, section 124, are deemed 11.33 to be provided by the customer's home service provider and 11.34 sourced to the customer's place of primary use and are subject 11.35 to tax based upon the customer's place of primary use in 11.36 accordance with the Mobile Telecommunications Sourcing Act, 12.1 United States Code, title 4, sections 116 to 126. All other 12.2 definitions and provisions of the Mobile Telecommunications 12.3 Sourcing Act as provided in United States Code, title 4, are 12.4 hereby adopted. 12.5 (j) A sale and a purchase includes the furnishing for a 12.6 consideration of installation if the installation charges would 12.7 be subject to the sales tax if the installation were provided by 12.8 the seller of the item being installed. 12.9 (k) A sale and a purchase includes the rental of a vehicle 12.10 by a motor vehicle dealer to a customer when (1) the vehicle is 12.11 rented by the customer for a consideration, or (2) the motor 12.12 vehicle dealer is reimbursed pursuant to a service contract as 12.13 defined in section 65B.29, subdivision 1, clause (1). 12.14 [EFFECTIVE DATE.] This section is effective for sales and 12.15 purchases made on or after July 1, 2003. 12.16 Sec. 5. Minnesota Statutes 2002, section 297A.61, is 12.17 amended by adding a subdivision to read: 12.18 Subd. 35. [DIRECT MAIL.] "Direct mail" means printed 12.19 material delivered or distributed by United States Mail or other 12.20 delivery service to a mass audience or to addressees on a 12.21 mailing list provided by the purchaser or at the direction of 12.22 the purchaser when the cost of the items is not billed directly 12.23 to the recipients. "Direct mail" includes tangible personal 12.24 property supplied directly or indirectly by the purchaser to the 12.25 direct mail seller for inclusion in the package containing the 12.26 printed material. "Direct mail" does not include multiple 12.27 identical items of printed material delivered to a single 12.28 address. 12.29 [EFFECTIVE DATE.] This section is effective retroactively 12.30 for delivery or distribution charges on sales and purchases made 12.31 after December 31, 2001. 12.32 Sec. 6. Minnesota Statutes 2002, section 297A.62, 12.33 subdivision 3, is amended to read: 12.34 Subd. 3. [MANUFACTURED HOUSING AND PARK TRAILERS.] For 12.35 retail sales of manufactured homes as defined in section 327.31, 12.36 subdivision 6, for residential uses, the sales tax under 13.1 subdivision 1 is imposed on 65 percent of the dealer's cost of 13.2 the manufactured home. For retail sales of new or used park 13.3 trailers, as defined in section 168.011, subdivision 8, 13.4 paragraph (b), the sales tax under subdivision 1 is imposed on 13.5 65 percent of the sales price of the park trailer. For retail 13.6 sales of prefabricated homes subject to regulation under 13.7 Minnesota Rules, chapter 1360 or 1361, for residential use, the 13.8 sales tax under subdivision 1 is imposed on 65 percent of the 13.9 manufacturer's wholesale list price of the prefabricated home. 13.10 [EFFECTIVE DATE.] This section is effective for sales and 13.11 purchases occurring on or after July 1, 2003. 13.12 Sec. 7. Minnesota Statutes 2002, section 297A.67, 13.13 subdivision 18, is amended to read: 13.14 Subd. 18. [USED AND REREFINED MOTOR OILS.] Used motor oils 13.15 are exempt. Rerefined motor oils that meet American Petroleum 13.16 Institute specifications for gasoline or diesel engines are 13.17 exempt. The exemption for rerefined motor oils expires July 1, 13.18 2007. 13.19 [EFFECTIVE DATE.] This section is effective for sales and 13.20 purchases made after June 30, 2003, and before July 1, 2007. 13.21 Sec. 8. Minnesota Statutes 2002, section 297A.67, is 13.22 amended by adding a subdivision to read: 13.23 Subd. 31. [RECYCLED COPIER AND PRINTING PAPER.] Copier 13.24 paper with a minimum postconsumer recycled content of 30 percent 13.25 by weight is exempt. Uncoated printing paper with a minimum of 13.26 30 percent postconsumer recycled content by weight is exempt. 13.27 Coated printing paper with a minimum of ten percent postconsumer 13.28 recycled content by weight is exempt. These exemptions expire 13.29 July 1, 2007. 13.30 [EFFECTIVE DATE.] This section is effective for sales and 13.31 purchases made after June 30, 2003, and before July 1, 2007. 13.32 Sec. 9. Minnesota Statutes 2002, section 297A.67, is 13.33 amended by adding a subdivision to read: 13.34 Subd. 32. [SERVICE LOANER VEHICLE COVERED BY 13.35 WARRANTY.] The loan of a vehicle by a motor vehicle dealer to a 13.36 customer as a replacement for a vehicle being serviced or 14.1 repaired is exempt if the vehicle is loaned pursuant to a 14.2 warranty included in the original purchase price of the vehicle 14.3 being serviced or repaired. 14.4 [EFFECTIVE DATE.] This section is effective the day 14.5 following final enactment. 14.6 Sec. 10. Minnesota Statutes 2002, section 297A.68, 14.7 subdivision 36, is amended to read: 14.8 Subd. 36. [DELIVERY OR DISTRIBUTION CHARGES;PRINTED14.9MATERIALSDIRECT MAIL.] Charges for the delivery or distribution 14.10 ofprinted materials, including individual account14.11information,direct mail are exempt if(1)the charges are 14.12 separately stated, (2) the delivery or distribution is to a mass14.13audience or to a mailing list provided at the direction of the14.14customer, and (3) the cost of the materials is not billed14.15directly to the recipientson an invoice or similar billing 14.16 document given to the purchaser. 14.17 [EFFECTIVE DATE.] This section is effective retroactively 14.18 for delivery or distribution charges on sales and purchases made 14.19 after December 31, 2001. 14.20 Sec. 11. Minnesota Statutes 2002, section 297A.70, 14.21 subdivision 8, is amended to read: 14.22 Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 14.23 SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 14.24 but not limited to, end user equipment used for construction, 14.25 ownership, operation, maintenance, and enhancement of the 14.26 backbone system of the regionwide public safety radio 14.27 communication system established under sections 473.891 to 14.28 473.905, are exempt. For purposes of this subdivision, backbone 14.29 system is defined in section 473.891, subdivision 9. This 14.30 subdivision is effective for purchases, sales, storage, use, or 14.31 consumption occurring before August 1,20032005, in the 14.32 counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 14.33 Washington. 14.34 [EFFECTIVE DATE.] This section is effective the day 14.35 following final enactment. 14.36 Sec. 12. Minnesota Statutes 2002, section 297A.70, 15.1 subdivision 16, is amended to read: 15.2 Subd. 16. [CAMP FEES.] Camp fees to camps or other 15.3 recreation facilities owned and operated by an exempt 15.4 organization under section 501(c)(3) of the Internal Revenue 15.5 Code are exempt if the camps or facilities provide educational 15.6 and social activitiesfor young people primarily age 18 and15.7underand at least 15 percent of the costs of operating and 15.8 maintaining the camp are underwritten by charitable 15.9 contributions. 15.10 [EFFECTIVE DATE.] This section is effective for sales and 15.11 purchases made on or after June 30, 2003. 15.12 Sec. 13. Minnesota Statutes 2002, section 297A.71, 15.13 subdivision 10, is amended to read: 15.14 Subd. 10. [AIRCRAFT HEAVY MAINTENANCE FACILITY.] 15.15 Materials, equipment, and supplies used or consumed in 15.16 constructing a heavy maintenance facility for aircraft that is 15.17 to be owned by the state of Minnesota or one of its political 15.18 subdivisions and leased by an airline company, an aircraft 15.19 repair company, or an aircraft engine repair facility described 15.20 in section 116R.02, subdivision 6, are exempt.Except for15.21equipment owned or leased by a contractor, all machinery,15.22equipment, and tools necessary to the construction and equipping15.23of that facility in order to provide those services are also15.24exempt.15.25 [EFFECTIVE DATE.] This section is effective for sales and 15.26 purchases made on or after July 1, 2003. 15.27 Sec. 14. Minnesota Statutes 2002, section 297A.71, is 15.28 amended by adding a subdivision to read: 15.29 Subd. 32. [CONSTRUCTION MATERIALS; MINNEAPOLIS 15.30 PLANETARIUM.] Materials and supplies used or consumed in the 15.31 construction of a Minneapolis planetarium are exempt. 15.32 [EFFECTIVE DATE.] This section is effective for purchases 15.33 made on or after January 1, 2002, and before July 1, 2006. 15.34 Sec. 15. Minnesota Statutes 2002, section 297A.71, is 15.35 amended by adding a subdivision to read: 15.36 Subd. 33. [GUTHRIE THEATER.] Materials, equipment, and 16.1 supplies used or consumed in construction of the Guthrie Theater 16.2 and the related parking garage are exempt. 16.3 [EFFECTIVE DATE.] This section is effective the day 16.4 following final enactment. 16.5 Sec. 16. Minnesota Statutes 2002, section 297A.71, is 16.6 amended by adding a subdivision to read: 16.7 Subd. 34. [CHILDREN'S THEATRE.] Materials, equipment, and 16.8 supplies used or consumed in construction of the Children's 16.9 Theatre in the city of Minneapolis are exempt. 16.10 [EFFECTIVE DATE.] This section is effective for sales and 16.11 purchases made on or after July 1, 2003. 16.12 Sec. 17. Minnesota Statutes 2002, section 297A.71, is 16.13 amended by adding a subdivision to read: 16.14 Subd. 35. [WALKER ART CENTER.] Materials, equipment, and 16.15 supplies used or consumed in construction of the Walker Art 16.16 Center are exempt if more than $70,000,000 is raised from 16.17 private sources to pay for a portion of the costs of the project. 16.18 [EFFECTIVE DATE.] This section is effective for purchases 16.19 made on or after June 1, 2003. 16.20 Sec. 18. Minnesota Statutes 2002, section 297B.03, is 16.21 amended to read: 16.22 297B.03 [EXEMPTIONS.] 16.23 There is specifically exempted from the provisions of this 16.24 chapter and from computation of the amount of tax imposed by it 16.25 the following: 16.26 (1) purchase or use, including use under a lease purchase 16.27 agreement or installment sales contract made pursuant to section 16.28 465.71, of any motor vehicle by the United States and its 16.29 agencies and instrumentalities and by any person described in 16.30 and subject to the conditions provided in section 297A.67, 16.31 subdivision 11; 16.32 (2) purchase or use of any motor vehicle by any person who 16.33 was a resident of another state or country at the time of the 16.34 purchase and who subsequently becomes a resident of Minnesota, 16.35 provided the purchase occurred more than 60 days prior to the 16.36 date such person began residing in the state of Minnesota and 17.1 the motor vehicle was registered in the person's name in the 17.2 other state or country; 17.3 (3) purchase or use of any motor vehicle by any person 17.4 making a valid election to be taxed under the provisions of 17.5 section 297A.90; 17.6 (4) purchase or use of any motor vehicle previously 17.7 registered in the state of Minnesota when such transfer 17.8 constitutes a transfer within the meaning of section 118, 331, 17.9 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 17.10 1563(a) of the Internal Revenue Code of 1986, as amended through 17.11 December 31, 1999; 17.12 (5) purchase or use of any vehicle owned by a resident of 17.13 another state and leased to a Minnesota based private or for 17.14 hire carrier for regular use in the transportation of persons or 17.15 property in interstate commerce provided the vehicle is titled 17.16 in the state of the owner or secured party, and that state does 17.17 not impose a sales tax or sales tax on motor vehicles used in 17.18 interstate commerce; 17.19 (6) purchase or use of a motor vehicle by a private 17.20 nonprofit or public educational institution for use as an 17.21 instructional aid in automotive training programs operated by 17.22 the institution. "Automotive training programs" includes motor 17.23 vehicle body and mechanical repair courses but does not include 17.24 driver education programs; 17.25 (7) purchase of a motor vehicle for use as an ambulance or 17.26 to provide emergency medical services by an ambulance service 17.27 licensed under section 144E.10; 17.28 (8) purchase of a motor vehicle by or for a public library, 17.29 as defined in section 134.001, subdivision 2, as a bookmobile or 17.30 library delivery vehicle; 17.31 (9) purchase of a ready-mixed concrete truck; 17.32 (10) purchase or use of a motor vehicle by a town for use 17.33 exclusively for road maintenance, including snowplows and dump 17.34 trucks, but not including automobiles, vans, or pickup trucks; 17.35 (11) purchase or use of a motor vehicle by a corporation, 17.36 society, association, foundation, or institution organized and 18.1 operated exclusively for charitable, religious, or educational 18.2 purposes, except a public school, university, or library, but 18.3 only if the vehicle is: 18.4 (i) a truck, as defined in section 168.011, a bus, as 18.5 defined in section 168.011, or a passenger automobile, as 18.6 defined in section 168.011, if the automobile is designed and 18.7 used for carrying more than nine persons including the driver; 18.8 and 18.9 (ii) intended to be used primarily to transport tangible 18.10 personal property or individuals, other than employees, to whom 18.11 the organization provides service in performing its charitable, 18.12 religious, or educational purpose; 18.13 (12) purchase of a motor vehicle for use by a transit 18.14 provider exclusively to provide transit service is exempt if the 18.15 transit provider is either (i) receiving financial assistance or 18.16 reimbursement under section 174.24 or 473.384, or (ii) operating 18.17 under section 174.29, 473.388, or 473.405. 18.18 [EFFECTIVE DATE.] This section is effective for sales and 18.19 purchases made on or after July 1, 2003. 18.20 Sec. 19. Minnesota Statutes 2002, section 297B.035, is 18.21 amended by adding a subdivision to read: 18.22 Subd. 5. [USE BY DEALER.] If a motor vehicle dealer uses a 18.23 vehicle, purchased for resale in the ordinary course of 18.24 business, other than for demonstration purposes, the dealer may 18.25 elect to pay the motor vehicle sales tax under this chapter or 18.26 the use tax under chapter 297A based on the reasonable rental 18.27 value of the vehicle. If the motor vehicle dealer fails to 18.28 report the use tax under chapter 297A, it is presumed that the 18.29 dealer elected to pay the motor vehicle sales tax under this 18.30 chapter. 18.31 [EFFECTIVE DATE.] This section is effective for purchases 18.32 made on or after July 1, 2003. 18.33 Sec. 20. Laws 1999, chapter 243, article 4, section 19, as 18.34 amended by Laws 2001, First Special Session chapter 5, article 18.35 12, section 88, is amended to read: 18.36 Sec. 19. [EFFECTIVE DATES.] 19.1 Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 19.2 purchases made after June 30, 1999. 19.3 Section 3 is effective for amended returns and refund 19.4 claims filed on or after July 1, 1999. 19.5 Section 4 is effective the day following final enactment 19.6 and applies retroactively to all open tax years and to 19.7 assessments and appeals under Minnesota Statutes, sections 19.8 289A.38 and 289A.65, for which the time limits have not expired 19.9 on the date of final enactment of this act. The provisions of 19.10 Minnesota Statutes, section 289A.50, apply to refunds claimed 19.11 under section 4. Refunds claimed under section 4 must be filed 19.12 by the later of December 31, 1999, or the time limit under 19.13 Minnesota Statutes, section 289A.40, subdivision 1. 19.14 Section 6 is effective retroactively for sales and 19.15 purchases made after June 30, 1998. 19.16 Section 8 is effective for purchases and sales made after 19.17 the date of final enactment. 19.18 Section 10 is effective for purchases made after the date 19.19 of final enactment and before July 1,20032005. 19.20 Section 12 is effective the day after final enactment. 19.21 Section 12, paragraphs (a) to (c), apply to all local sales 19.22 taxes enacted after July 1, 1999. Section 12, paragraph (d), 19.23 applies to all local sales taxes in effect at the time of, or 19.24 imposed after the day of, the enactment of this section. 19.25 Section 13 is effective the day following final enactment. 19.26 [EFFECTIVE DATE.] This section is effective the day 19.27 following final enactment. 19.28 Sec. 21. Laws 2001, First Special Session chapter 5, 19.29 article 12, section 67, the effective date, is amended to read: 19.30 [EFFECTIVE DATE.] This section is effective for purchases 19.31 and sales made after June 30, 2001, and beforeJanuary 1, 200319.32 July 1, 2005. 19.33 [EFFECTIVE DATE.] This section is effective the day 19.34 following final enactment. 19.35 Sec. 22. [STATE CONVENTION CENTER.] 19.36 (a) Building materials, supplies, or equipment used or 20.1 consumed in constructing or equipping improvements to a state 20.2 convention center located in a city outside the metropolitan 20.3 area as defined in Minnesota Statutes, section 473.121, 20.4 subdivision 2, and governed by an 11-person board of which four 20.5 are appointed by the governor are exempt if the improvements are 20.6 financed in whole or in part by nonstate resources including, 20.7 but not limited to, revenue or general obligations issued by the 20.8 state convention center board of the city in which the center is 20.9 located. This exemption applies regardless of whether the items 20.10 are purchased by the owner or by a contractor, subcontractor, or 20.11 builder. 20.12 (b) This section is intended to clarify the original intent 20.13 of Minnesota Statutes, section 297A.71, subdivision 2. 20.14 [EFFECTIVE DATE.] This section is effective the day 20.15 following final enactment and applies retroactively to sales and 20.16 purchases made after June 30, 1995, and before July 1, 2001. 20.17 Sec. 23. [REPEALER.] 20.18 Laws 2002, chapter 377, article 9, section 12, the 20.19 effective date, is repealed effective the day following final 20.20 enactment. 20.21 ARTICLE 2 20.22 LOCAL LODGING AND SALES TAX ARTICLE 20.23 Section 1. Laws 1980, chapter 511, section 1, subdivision 20.24 2, as amended by Laws 1991, chapter 291, article 8, section 22, 20.25 and Laws 1998, chapter 389, article 8, section 25, is amended to 20.26 read: 20.27 Subd. 2. Notwithstanding Minnesota Statutes, Section 20.28 477A.016, or any other law, ordinance, or city charter provision 20.29 to the contrary, the city of Duluth may, by ordinance, impose an 20.30 additional sales tax of up to one and one-half percent on sales 20.31 transactions which are described in Minnesota Statutes 2000, 20.32 Section 297A.01, Subdivision 3, Clause (c). When the city 20.33 council determines that the taxes imposed under this subdivision 20.34 and under section 26 at a rate of one-half of one percent have 20.35 produced revenue sufficient to pay (1) the debt service on bonds 20.36 in a principal amount of $8,000,000 issued for capital 21.1 improvements to the Duluth Entertainment and Convention Center, 21.2 and (2) debt service on outstanding bonds originally issued in 21.3 the principal amount of $4,970,000 to finance capital 21.4 improvements to the Great Lakes Aquarium since the imposition of 21.5 the taxes at the rate of one and one-half percent, the rate of 21.6 the tax under this subdivision is reduced to one percent. The 21.7 imposition of this tax shall not be subject to voter referendum 21.8 under either state law or city charter provisions. 21.9 [EFFECTIVE DATE.] This section is effective the day after 21.10 the governing body of the city of Duluth and its chief clerical 21.11 officer comply with Minnesota Statutes, section 645.021, 21.12 subdivisions 2 and 3. 21.13 Sec. 2. Laws 1980, chapter 511, section 2, as amended by 21.14 Laws 1998, chapter 389, article 8, section 26, is amended to 21.15 read: 21.16 Sec. 2. [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND 21.17 MOTELS.] 21.18 Notwithstanding Minnesota Statutes, Section 477A.016, or 21.19 any other law, or ordinance, or city charter provision to the 21.20 contrary, the city of Duluth may, by ordinance, impose an 21.21 additional tax of one and one-half percent upon the gross 21.22 receipts from the sale of lodging for periods of less than 30 21.23 days in hotels and motels located in the city. When the city 21.24 council determines that the taxes imposed under this section and 21.25 section 25 at a rate of one-half of one percent have produced 21.26 revenue sufficient to pay (1) the debt service on bonds in a 21.27 principal amount of $8,000,000 issued for capital improvements 21.28 for the Duluth Entertainment and Convention Center, and (2) the 21.29 debt service on outstanding bonds originally issued in the 21.30 principal amount of $4,970,000 to finance capital improvements 21.31 to the Great Lakes Aquarium since the imposition of the taxes at 21.32 the rate of one and one-half percent, the rate of the tax under 21.33 this section is reduced to one percent. The tax shall be 21.34 collected in the same manner as the tax set forth in the Duluth 21.35 city charter, section 54(d), paragraph one. The imposition of 21.36 this tax shall not be subject to voter referendum under either 22.1 state law or city charter provisions. 22.2 [EFFECTIVE DATE.] This section is effective the day after 22.3 the governing body of the city of Duluth and its chief clerical 22.4 officer comply with Minnesota Statutes, section 645.021, 22.5 subdivisions 2 and 3. 22.6 Sec. 3. Laws 1993, chapter 375, article 9, section 46, 22.7 subdivision 2, as amended by Laws 1997, chapter 231, article 7, 22.8 section 40, and Laws 1998, chapter 389, article 8, section 30, 22.9 is amended to read: 22.10 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 22.11 authorized by subdivision 1 may only be used by the city to pay 22.12 the cost of collecting the tax, and to pay for the following 22.13 projects or to secure or pay any principal, premium, or interest 22.14 on bonds issued in accordance with subdivision 3 for the 22.15 following projects. 22.16 (a) To pay all or a portion of the capital expenses of 22.17 construction, equipment and acquisition costs for the expansion 22.18 and remodeling of the St. Paul Civic Center complex, including 22.19 the demolition of the existing arena and the construction and 22.20 equipping of a new arena. 22.21 (b) The remainder of the funds must be spent for: 22.22 (1) capital projects to further residential, cultural, 22.23 commercial, and economic development in both downtown St. Paul 22.24 and St. Paul neighborhoods. The amount apportioned under this22.25paragraph shall be no less than 60 percent of the revenues22.26derived from the tax each year, except to the extent that a22.27portion of that amount is required to pay debt service on (1)22.28bonds issued for the purposes of paragraph (a) prior to March 1,22.291998; or (2) bonds issued for the purposes of paragraph (a)22.30after March 1, 1998, but only if the city council determines22.31that 40 percent of the revenues derived from the tax together22.32with other revenues pledged to the payment of the bonds,22.33including the proceeds of definitive bonds, is expected to22.34exceed the annual debt service on the bonds; and 22.35 (2) the operating expenses of cultural organizations in the 22.36 city, provided that the amount spent under this clausemay not23.1exceedmust equal ten percent of the total amount spent under 23.2 this paragraph in any year. 23.3 (c) The amount apportioned under paragraph (b) shall be no 23.4 less than 60 percent of the revenues derived from the tax each 23.5 year, except to the extent that a portion of that amount is 23.6 required to pay debt service on (1) bonds issued for the 23.7 purposes of paragraph (a) prior to March 1, 1998; or (2) bonds 23.8 issued for the purposes of paragraph (a) after March 1, 1998, 23.9 but only if the city council determines that 40 percent of the 23.10 revenues derived from the tax together with other revenues 23.11 pledged to the payment of the bonds, including the proceeds of 23.12 definitive bonds, is expected to exceed the annual debt service 23.13 on the bonds. 23.14 (d) If in any year more than 40 percent of the revenue 23.15 derived from the tax authorized by subdivision 1 is used to pay 23.16 debt service on the bonds issued for the purposes of paragraph 23.17 (a) and to fund a reserve for the bonds, the amount of the debt 23.18 service payment that exceeds 40 percent of the revenue must be 23.19 determined for that year. In any year when 40 percent of the 23.20 revenue produced by the sales tax exceeds the amount required to 23.21 pay debt service on the bonds and to fund a reserve for the 23.22 bonds under paragraph (a), the amount of the excess must be made 23.23 available for capital projects to further residential, cultural, 23.24 commercial, and economic development in the neighborhoods and 23.25 downtown until the cumulative amounts determined for all years 23.26 under the preceding sentence have been made available under this 23.27 sentence. The amount made available as reimbursement in the 23.28 preceding sentence is not included in the 60 percent determined 23.29 under paragraph(b)(c). 23.30(d)(e) By January 15 of each odd-numbered year, the mayor 23.31 and the city council must report to the legislature on the use 23.32 of sales tax revenues during the preceding two-year period. 23.33 [EFFECTIVE DATE.] This section is effective for 23.34 distributions after April 30, 2003. 23.35 Sec. 4. Laws 1996, chapter 471, article 2, section 29, is 23.36 amended to read: 24.1 Sec. 29. [CITY OF HERMANTOWN; SALES AND USE TAX.] 24.2 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] (a) 24.3 Notwithstanding Minnesota Statutes, section 477A.016, or any 24.4 other contrary provision of law, ordinance, or city charter, the 24.5 city of Hermantown may, by ordinance, impose an additional sales 24.6 and use tax of up to one percent on salestransactions, storage, 24.7 and use taxable pursuant to Minnesota Statutes, chapter 297A, 24.8 that occur within the city. 24.9 (b) The proceeds of the first one-half of one percent of 24.10 tax imposed under this section must be usedto meet the costs of24.11 by the city for the following projects: 24.12 (1) extending a sewer interceptor line; 24.13 (2) construction of a booster pump station, reservoirs, and 24.14 related improvements to the water system; and 24.15 (3) construction of a police and fire station. 24.16 (c) Revenues received from the remaining one-half of one 24.17 percent of the tax authorized under this section must be used by 24.18 the city to pay all or part of the capital and administrative 24.19 costs of developing, acquiring, constructing, and initially 24.20 furnishing and equipping for the following projects: 24.21 (1) construction of a community recreation center; 24.22 (2) completion of a civic center services complex; 24.23 (3) construction and relocation of a new public works 24.24 facility; 24.25 (4) construction of roads, street improvements, and other 24.26 traffic control measures within the city; and 24.27 (5) acquisition, construction, and improvement of parks and 24.28 trails within the city. 24.29 (d) Authorized expenses include, but are not limited to, 24.30 acquiring property, paying construction, administrative, and 24.31 operating expenses related to the development of the projects 24.32 listed in paragraph (c), paying debt service on bonds or other 24.33 obligations, including lease obligations, issued to finance 24.34 construction, expansion, or improvement of the projects listed 24.35 in paragraph (c), and other compatible uses, including but not 24.36 limited to, parking, lighting, and landscaping. 25.1 Subd. 2. [REFERENDUM.] (a) If the Hermantown city council 25.2 proposes to impose the sales tax authorized by this section, it 25.3 shall conduct a referendum on the issue. 25.4 (b) If the Hermantown city council initially imposes the 25.5 tax at a rate less than one percent and proposes increasing it 25.6 at a later date up to the authorized rate in subdivision 1, it 25.7 shall conduct a referendum on the increase. 25.8 (c) The question of imposing or increasing the tax must be 25.9 submitted to the voters at a special or general election. The 25.10 tax may not be imposed unless a majority of votes cast on the 25.11 question of imposing the tax are in the affirmative. The 25.12 commissioner of revenue shall prepare a suggested form of 25.13 question to be presented at the election. This subdivision 25.14 applies notwithstanding any city charter provision to the 25.15 contrary. 25.16 Subd. 3. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 25.17 TAXES.] A sales tax imposed under this section must be reported 25.18 and paid to the commissioner of revenue with the state sales 25.19 taxes, and be subject to the same penalties, interest, and 25.20 enforcement provisions. The proceeds of the tax, less refunds 25.21 and a proportionate share of the cost of collection, shall be 25.22 remitted at least quarterly to the city. The commissioner shall 25.23 deduct from the proceeds remitted an amount that equals the 25.24 indirect statewide cost as well as the direct and indirect 25.25 department costs necessary to administer, audit, and collect the 25.26 tax. The amount deducted shall be deposited in the state 25.27 general fund. 25.28 Subd. 3a. [BONDING AUTHORITY.] (a) The city may issue 25.29 general obligation bonds under Minnesota Statutes, chapter 475, 25.30 to finance the costs in subdivision 1, paragraph (c). The total 25.31 amount of bonds issued for the projects under subdivision 1, 25.32 paragraph (c), may not exceed $12,900,000 in the aggregate. An 25.33 election to approve the bonds is not required. 25.34 (b) The bonds are not included in computing any debt 25.35 limitation applicable to the city and the levy of taxes under 25.36 Minnesota Statutes, section 475.61, to pay principal of and 26.1 interest on the bonds is not subject to any levy limitation. 26.2 (c) The taxes authorized under this section may be pledged 26.3 to and used for the payment of the bonds and any bonds issued to 26.4 refund them. 26.5 Subd. 4. [TERMINATION.] The portion of the tax authorized 26.6under this sectionto finance the improvements described in 26.7 subdivision 1, paragraph (b), terminates at the later of (1) ten 26.8 years after the date of initial imposition of the tax, or (2) on 26.9 the first day of the second month next succeeding a 26.10 determination by the city council that sufficient funds have 26.11 been received from that portion of the tax dedicated to finance 26.12thethose improvementsdescribed in subdivision 1, clauses (1)26.13to (3),and to prepay or retire at maturity the principal, 26.14 interest, and premium due on any bonds issued for the 26.15 improvements. The portion of the tax authorized to finance the 26.16 improvements described in subdivision 1, paragraph (c), 26.17 terminates when the revenues raised are sufficient to finance 26.18 those improvements, up to an amount equal to $12,900,000 plus 26.19 any interest, premium, and other costs associated with the bonds 26.20 issued under subdivision 3a. The city council may terminate 26.21 this portion of the tax earlier. Any funds remaining after 26.22 completion of the improvements and retirement or redemption of 26.23 the bonds may be placed in the general fund of the city. 26.24 Subd. 5. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 26.25 effective the day after final enactment, upon compliance with 26.26 Minnesota Statutes, section 645.021, subdivision 3, by the city 26.27 of Hermantown. 26.28 [EFFECTIVE DATE.] This section is effective the day after 26.29 the governing body of the city of Hermantown and its chief 26.30 clerical officer comply with Minnesota Statutes, section 26.31 645.021, subdivisions 2 and 3. 26.32 Sec. 5. Laws 1998, chapter 389, article 8, section 43, 26.33 subdivision 3, is amended to read: 26.34 Subd. 3. [USE OF REVENUES.] Revenues received from the 26.35 taxes authorized by subdivisions 1 and 2 must be used by the 26.36 city to pay for the cost of collecting and administering the 27.1 taxes and to pay for the following projects: 27.2 (1) transportation infrastructure improvements including 27.3bothregional highway and airport improvements; 27.4 (2) improvements to the civic center complex; 27.5 (3) a municipal water, sewer, and storm sewer project 27.6 necessary to improve regional ground water quality; and 27.7 (4) construction of a regional recreation and sports center 27.8 andassociatedother facilities available for both community and 27.9 student use,that are located on state-owned land at or adjacent 27.10 to the Rochester center. 27.11 The total amount of capital expenditures or bonds for these 27.12 projects that may be paid from the revenues raised from the 27.13 taxes authorized in this section may not exceed 27.14$71,500,000$111,500,000. The total amount of capital 27.15 expenditures or bonds for the project in clause (4) that may be 27.16 paid from the revenues raised from the taxes authorized in this 27.17 section may not exceed$20,000,000$28,000,000. 27.18 [EFFECTIVE DATE.] This section is effective the day after 27.19 the governing body of Rochester and its chief clerical officer 27.20 timely complete their compliance with Minnesota Statutes, 27.21 section 645.021, subdivisions 2 and 3. 27.22 Sec. 6. Laws 1998, chapter 389, article 8, section 43, 27.23 subdivision 4, is amended to read: 27.24 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 27.25 under Minnesota Statutes, chapter 475, to finance the capital 27.26 expenditure and improvement projects. An election to approve 27.27 the bonds under Minnesota Statutes, section 475.58, may be held 27.28 in combination with the election to authorize imposition of the 27.29 tax under subdivision 1. Whether to permit imposition of the 27.30 tax and issuance of bonds may be posed to the voters as a single 27.31 question. The question must state that the sales tax revenues 27.32 are pledged to pay the bonds, but that the bonds are general 27.33 obligations and will be guaranteed by the city's property taxes. 27.34 (b) The issuance of bonds under this subdivision is not 27.35 subject to Minnesota Statutes, section 275.60. 27.36 (c) The bonds are not included in computing any debt 28.1 limitation applicable to the city, and the levy of taxes under 28.2 Minnesota Statutes, section 475.61, to pay principal of and 28.3 interest on the bonds is not subject to any levy limitation. 28.4 The aggregate principal amount of bonds, plus the aggregate of 28.5 the taxes used directly to pay eligible capital expenditures and 28.6 improvements may not exceed$71,500,000$111,500,000, plus an 28.7 amount equal to the costs related to issuance of the bonds. 28.8 (d) The taxes may be pledged to and used for the payment of 28.9 the bonds and any bonds issued to refund them, only if the bonds 28.10 and any refunding bonds are general obligations of the city. 28.11 [EFFECTIVE DATE.] This section is effective the day after 28.12 the governing body of Rochester and its chief clerical officer 28.13 timely complete their compliance with Minnesota Statutes, 28.14 section 645.021, subdivisions 2 and 3. 28.15 Sec. 7. Laws 1999, chapter 243, article 4, section 18, 28.16 subdivision 1, is amended to read: 28.17 Subdivision 1. [SALES AND USE TAX.] (a) Notwithstanding 28.18 Minnesota Statutes, section297A.48, subdivision 1a,477A.016, 28.19 or any other provision of law, ordinance, or city charter, if 28.20 approved by the city voters at the first municipal general 28.21 election held after the date of final enactment of this act or 28.22 at a special election held November 2, 1999, the city of Proctor 28.23 may impose by ordinance a sales and use tax of up to one-half of 28.24 one percent for the purposes specified in subdivision 3, 28.25 paragraph (a). The provisions of Minnesota Statutes, 28.26 section297A.48297A.99, govern the imposition, administration, 28.27 collection, and enforcement of the tax authorized under this 28.28 subdivision. 28.29 (b) The city of Proctor may impose by ordinance an 28.30 additional sales and use tax of up to one-half of one percent if 28.31 approved by the city voters at a general election or at a 28.32 special election held for this purpose. The revenues received 28.33 from this additional tax must be used for the purposes specified 28.34 in subdivision 3, paragraph (b). 28.35 [EFFECTIVE DATE.] This section is effective the day 28.36 following final enactment, upon compliance by the city of 29.1 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 29.2 Sec. 8. Laws 1999, chapter 243, article 4, section 18, 29.3 subdivision 3, is amended to read: 29.4 Subd. 3. [USE OF REVENUES.] (a) Revenues received from 29.5 taxes authorized by subdivisions 1, paragraph (a), and 2 must be 29.6 used by the city to pay the cost of collecting the taxes and to 29.7 pay for construction and improvement of the following city 29.8 facilities: 29.9 (1) streets; and 29.10 (2) constructing and equipping the Proctor community 29.11 activity center. 29.12 Authorized expenses include, but are not limited to, 29.13 acquiring property, paying construction and operating expenses 29.14 related to the development of an authorized facility, and paying 29.15 debt service on bonds or other obligations, including lease 29.16 obligations, issued to finance the construction, expansion, or 29.17 improvement of an authorized facility. The capital expenses for 29.18 all projects authorized under this paragraph that may be paid 29.19 with these taxes is limited to $3,600,000, plus an amount equal 29.20 to the costs related to issuance of the bonds. 29.21 (b) Revenues received from taxes authorized by subdivision 29.22 1, paragraph (b), must be used by the city to pay the cost of 29.23 collecting the taxes and for construction and improvements of 29.24 city streets, public utilities, sidewalks, bikeways, and trails. 29.25 [EFFECTIVE DATE.] This section is effective the day 29.26 following final enactment, upon compliance by the city of 29.27 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 29.28 Sec. 9. Laws 1999, chapter 243, article 4, section 18, 29.29 subdivision 4, is amended to read: 29.30 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 29.31 under Minnesota Statutes, chapter 475, to finance the capital 29.32 expenditure and improvement projects described in subdivision 29.33 3. An election to approve the bonds under Minnesota Statutes, 29.34 section 475.58, is not required. 29.35 (b) The issuance of bonds under this subdivision is not 29.36 subject to Minnesota Statutes, sections 275.60 and279.61275.61. 30.1 (c) The bonds are not included in computing any debt 30.2 limitation applicable to the city, and the levy of taxes under 30.3 Minnesota Statutes, section 475.61, to pay principal of and 30.4 interest on the bonds is not subject to any levy limitation. 30.5 (d) For projects described in subdivision 3, paragraph (a), 30.6 the aggregate principal amount of bonds, plus the aggregate of 30.7 the taxes used directly to pay eligible capital expenditures and 30.8 improvements, may not exceed $3,600,000, plus an amount equal to 30.9 the costs related to issuance of the bonds, including interest 30.10 on the bonds. For projects described in subdivision 3, 30.11 paragraph (b), the aggregate principal amount of bonds may not 30.12 exceed $7,200,000, plus an amount equal to the costs related to 30.13 issuance of the bonds, including interest on the bonds. 30.14 (e) The sales and use and excise taxes authorized in this 30.15 section may be pledged to and used for the payment of the bonds 30.16 and any bonds issued to refund them only if the bonds and any 30.17 refunding bonds are general obligations of the city. 30.18 [EFFECTIVE DATE.] This section is effective the day 30.19 following final enactment, upon compliance by the city of 30.20 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 30.21 Sec. 10. [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 30.22 Subdivision 1. [SALES AND USE TAXES.] Notwithstanding 30.23 Minnesota Statutes, section 477A.016, or any other provision of 30.24 law or ordinance, if approved by the voters of the city at the 30.25 next general election held after the date of final enactment of 30.26 this act, the city of Beaver Bay may impose by ordinance a sales 30.27 and use tax at a rate of up to one percent for the purposes 30.28 specified in subdivision 2. The provisions of Minnesota 30.29 Statutes, section 297A.99, govern the imposition, 30.30 administration, collection, and enforcement of the tax 30.31 authorized under this subdivision. 30.32 Subd. 2. [USE OF REVENUES.] The revenues received from 30.33 taxes authorized by subdivision 1 must be used to pay the bonded 30.34 indebtedness on the city community building and to provide 30.35 funding for recreational facilities, the upgrading of the water 30.36 and sewer system, upgrading and replacement of fire equipment, 31.1 and improvement of streets. 31.2 Subd. 3. [TERMINATION OF TAXES.] The authority granted 31.3 under subdivision 1 to the city of Beaver Bay to impose sales 31.4 and use taxes expires when the city council determines that the 31.5 amount of revenue received to pay the costs of the projects 31.6 described in subdivision 2 shall meet or exceed $1,500,000. Any 31.7 funds remaining after completion of the projects may be placed 31.8 in the general fund of the city. The tax imposed under 31.9 subdivision 1 may expire at an earlier time if the city so 31.10 determines by ordinance. 31.11 [EFFECTIVE DATE.] This section is effective the day after 31.12 the governing body of the city of Beaver Bay and its chief 31.13 clerical officer timely comply with Minnesota Statutes, section 31.14 645.021, subdivisions 2 and 3. 31.15 Sec. 11. [CITY OF BEMIDJI.] 31.16 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 31.17 Notwithstanding Minnesota Statutes, section 477A.016, or any 31.18 other provision of law, ordinance, or city charter, pursuant to 31.19 the approval of the city voters at the general election held on 31.20 November 5, 2002, the city of Bemidji may impose by ordinance a 31.21 sales and use tax of one-half of one percent for the purposes 31.22 specified in subdivision 2. The provisions of Minnesota 31.23 Statutes, section 297A.99, govern the imposition, 31.24 administration, collection, and enforcement of the tax 31.25 authorized under this subdivision. 31.26 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 31.27 authorized by subdivision 1 must be used for the cost of 31.28 collecting and administering the tax and to pay all or part of 31.29 the capital or administrative costs of the acquisition, 31.30 construction, and improvement of parks and trails within the 31.31 city, as provided for in the city of Bemidji's parks, open space 31.32 and trail system plan, adopted by the Bemidji city council on 31.33 November 21, 2001. Authorized expenses include, but are not 31.34 limited to, acquiring property, paying construction expenses 31.35 related to the development of these facilities and improvements, 31.36 and securing and paying debt service on bonds or other 32.1 obligations issued to finance acquisition, construction, 32.2 improvement, or development of parks and trails within the city 32.3 of Bemidji. 32.4 Subd. 3. [BONDS.] Pursuant to the approval of the city 32.5 voters at the general election held on November 5, 2002, the 32.6 city of Bemidji may issue without additional election general 32.7 obligation bonds of the city in an amount not to exceed 32.8 $9,826,000 to pay capital and administrative expenses for the 32.9 acquisition, construction, improvement, and development of parks 32.10 and trails as specified in subdivision 2. The debt represented 32.11 by the bonds must not be included in computing any debt 32.12 limitations applicable to the city, and the levy of taxes 32.13 required by Minnesota Statutes, section 475.61, to pay the 32.14 principal of any interest on the bonds must not be subject to 32.15 any levy limitations or be included in computing or applying any 32.16 levy limitation applicable to the city. 32.17 Subd. 4. [TERMINATION OF TAX.] The tax imposed under 32.18 subdivision 1 expires when the Bemidji city council determines 32.19 that the amount described in subdivision 3 has been received 32.20 from the tax to finance the capital and administrative costs for 32.21 acquisition, construction, improvement, and development of parks 32.22 and trails and to repay or retire at maturity the principal, 32.23 interest, and premium due on any bonds issued for the park and 32.24 trail improvements under subdivision 3. Any funds remaining 32.25 after completion of the park and trail improvements and 32.26 retirement or redemption of the bonds may be placed in the 32.27 general fund of the city. The tax imposed under subdivision 1 32.28 may expire at an earlier time if the city so determines by 32.29 ordinance. 32.30 Subd. 5. [EXEMPTION.] Products and services used for 32.31 repair or maintenance of aircraft are exempt from the taxes 32.32 imposed under this section. 32.33 [EFFECTIVE DATE.] This section is effective the day after 32.34 compliance by the governing body of the city of Bemidji with 32.35 Minnesota Statutes, section 645.021, subdivision 3. 32.36 Sec. 12. [CITY OF CLOQUET; TAXES AUTHORIZED.] 33.1 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 33.2 Minnesota Statutes, section 477A.016, or any other provision of 33.3 law, ordinance, or city charter, if approved by the voters 33.4 pursuant to Minnesota Statutes, section 297A.99, the city of 33.5 Cloquet may impose by ordinance a sales and use tax of up to 33.6 one-half of one percent for the purpose specified in subdivision 33.7 3. The provisions of Minnesota Statutes, section 297A.99, 33.8 govern the imposition, administration, collection, and 33.9 enforcement of the tax authorized under this subdivision. 33.10 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 33.11 Minnesota Statutes, section 477A.016, or any other provision of 33.12 law, ordinance, or city charter, the city of Cloquet may impose 33.13 by ordinance, for the purposes specified in subdivision 3, an 33.14 excise tax of up to $20 per motor vehicle, as defined by 33.15 ordinance, purchased or acquired from any person engaged within 33.16 the city in the business of selling motor vehicles at retail. 33.17 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 33.18 authorized by subdivisions 1 and 2 must be used by the city to 33.19 pay the cost of collecting the taxes and to pay for the 33.20 following projects: 33.21 (1) construction and implementation of riverfront task 33.22 force park improvements including Veteran's Park; and 33.23 (2) extension of water and sewer lines and other 33.24 improvements to city infrastructure necessary for construction 33.25 of a city industrial park. 33.26 Authorized expenses include, but are not limited to, 33.27 acquiring property and paying construction expenses related to 33.28 these improvements, and paying debt service on bonds or other 33.29 obligations issued to finance acquisition and construction of 33.30 these improvements. 33.31 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 33.32 under Minnesota Statutes, chapter 475, to pay capital and 33.33 administrative expenses for the improvements described in 33.34 subdivision 3 in an amount that does not exceed $6,000,000. An 33.35 election to approve the bonds under Minnesota Statutes, section 33.36 475.58, is not required. 34.1 (b) The issuance of bonds under this subdivision is not 34.2 subject to Minnesota Statutes, sections 275.60 and 275.61. 34.3 (c) The debt represented by the bonds is not included in 34.4 computing any debt limitation applicable to the city, and any 34.5 levy of taxes under Minnesota Statutes, section 475.61, to pay 34.6 principal of and interest on the bonds is not subject to any 34.7 levy limitation. 34.8 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 34.9 subdivisions 1 and 2 expire at the earlier of (1) 12 years, or 34.10 (2) when the city council determines that sufficient funds have 34.11 been received from the taxes to finance the capital and 34.12 administrative costs of the improvements described in 34.13 subdivision 3, plus the additional amount needed to pay the 34.14 costs related to issuance of bonds under subdivision 4, 34.15 including interest on the bonds. Any funds remaining after 34.16 completion of the project and retirement or redemption of the 34.17 bonds may be placed in the general fund of the city. The taxes 34.18 imposed under subdivisions 1 and 2 may expire at an earlier time 34.19 if the city so determines by ordinance. 34.20 [EFFECTIVE DATE.] This section is effective the day after 34.21 the governing body of the city of Cloquet and its chief clerical 34.22 officer timely comply with Minnesota Statutes, section 645.021, 34.23 subdivisions 2 and 3. 34.24 Sec. 13. [CITY OF HOPKINS; FOOD AND BEVERAGE TAX.] 34.25 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 34.26 Minnesota Statutes, section 477A.016, or any ordinance, city 34.27 charter, or other provision of law, the city of Hopkins may, by 34.28 ordinance, impose a sales tax of up to one percent on the gross 34.29 receipts of all food and beverages, including on-sale 34.30 intoxicating beverages and fermented malt beverages, sold at 34.31 licensed on-sale liquor establishments, restaurants, or other 34.32 places of refreshment located within the geographic boundaries 34.33 of the city. The imposition of this tax is subject to the 34.34 referendum requirement in subdivision 3. 34.35 Subd. 2. [USE OF PROCEEDS FROM FOOD AND BEVERAGE TAX.] The 34.36 proceeds of any tax imposed under subdivision 1 shall be used by 35.1 the city to fund public arts purposes. Authorized expenses 35.2 include, but are not limited to, expenses related to public art 35.3 facilities, community or public arts projects, or purchase or 35.4 acquisition of art for public purposes. 35.5 Subd. 3. [REFERENDUM.] The tax must not be imposed until 35.6 it has been submitted to the voters at a general or special 35.7 election and a majority of votes cast on the question of 35.8 approving the imposition of the tax is in the affirmative. 35.9 Subd. 4. [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 35.10 THE TAX.] The tax shall be collected and administered in the 35.11 same manner as general local sales taxes under Minnesota 35.12 Statutes, section 297A.99, subdivision 9. 35.13 Subd. 5. [EXPIRATION.] The tax imposed under this section 35.14 expires five years after it first becomes effective. 35.15 [EFFECTIVE DATE.] This section is effective upon approval 35.16 by the city of Hopkins city council and compliance with 35.17 Minnesota Statutes, section 645.021, subdivision 3. 35.18 Sec. 14. [LODGING TAX; ITASCA COUNTY AUTHORITY.] 35.19 Notwithstanding Minnesota Statutes, section 469.190, 35.20 subdivisions 1 and 4, no town located in Itasca county may 35.21 impose the local lodging tax authorized in Minnesota Statutes, 35.22 section 469.190, but the county of Itasca may impose the local 35.23 lodging tax authorized in that section in all towns and 35.24 unorganized territories within the county. Any existing taxes 35.25 imposed by a town in that county will expire the day that a 35.26 county tax is imposed under this section. 35.27 If the county board exercises the authority under this 35.28 section, it must determine by resolution that imposition of the 35.29 tax is in the county's interest. The resolution is subject to 35.30 the same notice and reverse referendum requirements that would 35.31 apply under Minnesota Statutes, section 469.190, subdivision 5, 35.32 if the county was only imposing the tax in an unorganized 35.33 territory. The provisions of Minnesota Statutes, section 35.34 469.190, subdivisions 2, 3, 6, and 7, also apply to a tax 35.35 imposed under this section. 35.36 [EFFECTIVE DATE.] This section is effective the day after 36.1 the governing body of Itasca county and its chief clerical 36.2 officer comply with Minnesota Statutes, section 645.021, 36.3 subdivisions 2 and 3. 36.4 Sec. 15. [CITY OF MEDFORD; SALES AND USE TAX.] 36.5 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 36.6 Notwithstanding Minnesota Statutes, section 477A.016, or any 36.7 other provision of law, ordinance, or city charter, the city of 36.8 Medford may, by ordinance, impose a sales and use tax of 36.9 one-half of one percent for the purposes specified in 36.10 subdivision 2. Except as otherwise specifically provided, the 36.11 provisions of Minnesota Statutes, section 297A.99, govern the 36.12 imposition, administration, collection, and enforcement of the 36.13 tax authorized under this subdivision. 36.14 Subd. 2. [USE OF REVENUES.] The proceeds of the tax 36.15 imposed under this section must be used to pay up to $5,000,000 36.16 in costs related to improving the city's wastewater system and 36.17 wastewater treatment plant. 36.18 Subd. 3. [REFERENDUM.] If the Medford city council 36.19 proposes to impose the tax authorized by this section, the 36.20 question of imposing the tax must be submitted to the voters at 36.21 the next general election. The tax may not be imposed unless 36.22 the majority of votes cast on the question of imposing the tax 36.23 are in the affirmative. The commissioner of revenue shall 36.24 prepare a suggested form of the question to be presented at the 36.25 election. The question must state that the sales tax revenues 36.26 would be pledged to pay any bonds issued under subdivision 4 and 36.27 that these bonds are guaranteed by the city's property taxes. 36.28 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 36.29 under Minnesota Statutes, chapter 475, to finance the capital 36.30 expenditure and improvement projects authorized under 36.31 subdivision 2. The total amount of bonds issued for the 36.32 projects listed in subdivision 2 may not exceed $5,000,000 in 36.33 aggregate. An election to approve the bonds, as required under 36.34 Minnesota Statutes, section 475.58, is not required. 36.35 (b) The issuance of the bonds under this subdivision is not 36.36 subject to Minnesota Statutes, sections 275.60 and 275.61. 37.1 (c) The bonds are not included in computing any debt 37.2 limitation applicable to the city, and the levy of taxes under 37.3 Minnesota Statutes, section 475.61, to pay the principal of and 37.4 interest on the bonds is not subject to any levy limitation. 37.5 (d) The taxes authorized under this section may be pledged 37.6 to and used for the payment of the bonds and any bonds issued to 37.7 refund them only if the bonds and any refunding bonds are 37.8 general obligations of the city. 37.9 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 37.10 this section expire at the earlier of (1) 20 years after the 37.11 taxes are first imposed, or (2) when the city council first 37.12 determines that the amount of revenues raised to pay for the 37.13 projects under subdivision 2 shall meet or exceed the sum of 37.14 $5,000,000, plus an amount equal to the costs related to the 37.15 issuance of bonds under subdivision 4. Any funds remaining 37.16 after completion of the projects and retirement or redemption of 37.17 the bonds may be placed in the general funds of the city. 37.18 [EFFECTIVE DATE.] This section is effective the day after 37.19 compliance with the governing body of the city of Medford with 37.20 Minnesota Statutes, section 645.021, subdivision 3. 37.21 Sec. 16. [CITY OF NEWPORT; LODGING TAX.] 37.22 Subdivision 1. [LODGING TAX.] Notwithstanding Minnesota 37.23 Statutes, section 477A.016, or any ordinance, city charter, or 37.24 other provision of law, the city of Newport may, by ordinance, 37.25 impose a tax of up to three percent upon the gross receipts from 37.26 the sale of lodging for periods of less than 30 days in hotels 37.27 and motels located in the city. The tax does not apply to the 37.28 furnishing of lodging by a business having less than 25 lodging 37.29 rooms. The total amount of taxes imposed under this section and 37.30 under Minnesota Statutes, section 469.190, shall not exceed 37.31 three percent. 37.32 Subd. 2. [USE OF PROCEEDS.] The proceeds of any tax 37.33 imposed in subdivision 1 shall be used by the city to fund 37.34 economic development and redevelopment of the city. Authorized 37.35 expenses include, but are not limited to, acquisition and 37.36 development costs of open space, parks, and trails. 38.1 Subd. 3. [ENFORCEMENT, COLLECTION, AND 38.2 ADMINISTRATION.] The tax shall be collected and administered in 38.3 the same manner as local lodging taxes under Minnesota Statutes, 38.4 section 469.190. 38.5 [EFFECTIVE DATE.] This section is effective upon approval 38.6 by the Newport city council and compliance with Minnesota 38.7 Statutes, section 645.021, subdivision 3. 38.8 Sec. 17. [CITY OF PARK RAPIDS.] 38.9 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 38.10 Notwithstanding Minnesota Statutes, section 477A.016, or any 38.11 other provision of law, ordinance, or city charter, pursuant to 38.12 the approval of the city voters at the next general election or 38.13 at a special election held for this purpose, the city of Park 38.14 Rapids may impose by ordinance a sales and use tax of one 38.15 percent for the purposes specified in subdivision 2. The 38.16 provisions of Minnesota Statutes, section 297A.99, govern the 38.17 imposition, administration, collection, and enforcement of the 38.18 tax authorized under this subdivision. 38.19 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 38.20 authorized by subdivision 1 must be used for the cost of 38.21 collecting and administering the tax and to pay all or part of 38.22 the capital or administrative costs of the development, 38.23 acquisition, construction, and improvement of the following 38.24 projects: 38.25 (1) two-thirds of the cost of construction and operation of 38.26 a community center that may include a senior citizen center, 38.27 fitness center, swimming pool, meeting rooms, indoor track, and 38.28 racquetball, basketball, and tennis courts, provided that an 38.29 amount equal to one-third of the cost of construction is 38.30 received from private sources; 38.31 (2) capital improvement projects including, but not limited 38.32 to, installation of water, sewer, storm sewer, street 38.33 improvements, new city water tower and well, costs related to 38.34 improvements to marked trunk highway 34; and 38.35 (3) park improvements. 38.36 Authorized expenses include, but are not limited to, 39.1 acquiring property, paying construction expenses related to the 39.2 development of these facilities and improvements, and securing 39.3 and paying debt service on bonds or other obligations issued to 39.4 finance acquisition, construction, improvement, or development. 39.5 Subd. 3. [BONDS.] Pursuant to the approval of the city 39.6 voters to impose the tax authorized in subdivision 1, the city 39.7 of Park Rapids may issue without an additional election general 39.8 obligation bonds of the city to pay capital and administrative 39.9 expenses for the acquisition, construction, improvement, and 39.10 development of the projects specified in subdivision 2. The 39.11 debt represented by the bonds must not be included in computing 39.12 any debt limitations applicable to the city, and the levy of 39.13 taxes required by Minnesota Statutes, section 475.61, to pay the 39.14 principal or any interest on the bonds must not be subject to 39.15 any levy limitations or be included in computing or applying any 39.16 levy limitation applicable to the city. 39.17 Subd. 4. [TERMINATION OF TAX.] The tax imposed under 39.18 subdivision 1 expires the earlier of July 1, 2023, or when the 39.19 city council determines that sufficient revenues have been 39.20 received to retire the bonds in subdivision 3. Any funds 39.21 remaining after completion of the projects specified in 39.22 subdivision 2 and retirement or redemption of the bonds may be 39.23 placed in the general fund of the city. The tax imposed under 39.24 subdivision 1 may expire at an earlier time if the city so 39.25 determines by ordinance. 39.26 [EFFECTIVE DATE.] This section is effective the day after 39.27 compliance by the governing body of the city of Park Rapids with 39.28 Minnesota Statutes, section 645.021, subdivision 3. 39.29 ARTICLE 3 39.30 PROPERTY TAX 39.31 Section 1. Minnesota Statutes 2002, section 216B.2424, 39.32 subdivision 5, is amended to read: 39.33 Subd. 5. [MANDATE.] (a) A public utility, as defined in 39.34 section 216B.02, subdivision 4, that operates a nuclear-powered 39.35 electric generating plant within this state must construct and 39.36 operate, purchase, or contract to construct and operate (1) by 40.1 December 31, 1998, 50 megawatts of electric energy installed 40.2 capacity generated by farm-grown closed-loop biomass scheduled 40.3 to be operational by December 31, 2001; and (2) by December 31, 40.4 1998, an additional 75 megawatts of installed capacity so 40.5 generated scheduled to be operational by December 31, 2002. 40.6 (b) Of the 125 megawatts of biomass electricity installed 40.7 capacity required under this subdivision, no more than 50 40.8 megawatts of this capacity may be provided by a facility that 40.9 uses poultry litter as its primary fuel source and any such 40.10 facility: 40.11 (1) need not use biomass that complies with the definition 40.12 in subdivision 1; 40.13 (2) must enter into a contract with the public utility for 40.14 such capacity, that has an average purchase price per megawatt 40.15 hour over the life of the contract that is equal to or less than 40.16 the average purchase price per megawatt hour over the life of 40.17 the contract in contracts approved by the public utilities 40.18 commission before April 1, 2000, to satisfy the mandate of this 40.19 section, and file that contract with the public utilities 40.20 commission prior to September 1, 2000; and 40.21 (3) must schedule such capacity to be operational by 40.22 December 31, 2002. 40.23 (c) Of the total 125 megawatts of biomass electric energy 40.24 installed capacity required under this section, no more than 75 40.25 megawatts may be provided by a single project. 40.26 (d) Of the 75 megawatts of biomass electric energy 40.27 installed capacity required under paragraph (a), clause (2), no 40.28 more than 25 megawatts of this capacity may be provided by a St. 40.29 Paul district heating and cooling system cogeneration facility 40.30 utilizing waste wood as a primary fuel source. The St. Paul 40.31 district heating and cooling system cogeneration facility need 40.32 not use biomass that complies with the definition in subdivision 40.33 1. 40.34 (e) The public utility must accept and consider on an equal 40.35 basis with other biomass proposals: 40.36 (1) a proposal to satisfy the requirements of this section 41.1 that includes a project that exceeds the megawatt capacity 41.2 requirements of either paragraph (a), clause (1) or (2), and 41.3 that proposes to sell the excess capacity to the public utility 41.4 or to other purchasers; and 41.5 (2) a proposal for a new facility to satisfy more than ten 41.6 but not more than 20 megawatts of the electrical generation 41.7 requirements by a small business-sponsored independent power 41.8 producer facility to be located within the northern quarter of 41.9 the state, which means the area located north of Constitutional 41.10 Route No. 8 as described in section 161.114, subdivision 2, and 41.11 that utilizes biomass residue wood, sawdust, bark, chipped wood, 41.12 or brush to generate electricity. A facility described in this 41.13 clause is not required to utilize biomass complying with the 41.14 definition in subdivision 1, but must have the capacity required 41.15 by this clause operational by December 31,20022005. 41.16 (f) If a public utility files a contract with the 41.17 commission for electric energy installed capacity that uses 41.18 poultry litter as its primary fuel source, the commission must 41.19 do a preliminary review of the contract to determine if it meets 41.20 the purchase price criteria provided in paragraph (b), clause 41.21 (2), of this subdivision. The commission shall perform its 41.22 review and advise the parties of its determination within 30 41.23 days of filing of such a contract by a public utility. A public 41.24 utility may submit by September 1, 2000, a revised contract to 41.25 address the commission's preliminary determination. 41.26 (g) The commission shall finally approve, modify, or 41.27 disapprove no later than July 1, 2001, all contracts submitted 41.28 by a public utility as of September 1, 2000, to meet the mandate 41.29 set forth in this subdivision. 41.30 (h) If a public utility subject to this section exercises 41.31 an option to increase the generating capacity of a project in a 41.32 contract approved by the commission prior to April 25, 2000, to 41.33 satisfy the mandate in this subdivision, the public utility must 41.34 notify the commission by September 1, 2000, that it has 41.35 exercised the option and include in the notice the amount of 41.36 additional megawatts to be generated under the option 42.1 exercised. Any review by the commission of the project after 42.2 exercise of such an option shall be based on the same criteria 42.3 used to review the existing contract. 42.4 (i) A facility specified in this subdivision qualifies for 42.5 exemption from property taxation under section 272.02, 42.6 subdivision 43. 42.7 [EFFECTIVE DATE.] This section is effective the day 42.8 following final enactment. 42.9 Sec. 2. Minnesota Statutes 2002, section 270B.12, is 42.10 amended by adding a subdivision to read: 42.11 Subd. 13. [COUNTY ASSESSORS; CLASS 1B HOMESTEADS.] The 42.12 commissioner may disclose to a county assessor, and to the 42.13 assessor's designated agents or employees, a listing of parcels 42.14 of property qualifying for the class 1b property tax 42.15 classification under section 273.13, subdivision 22. 42.16 [EFFECTIVE DATE.] This section is effective the day 42.17 following final enactment. 42.18 Sec. 3. Minnesota Statutes 2002, section 272.02, 42.19 subdivision 26, is amended to read: 42.20 Subd. 26. [LOW-INCOME HOUSING.] A structure that is 42.21 situated on real property is exempt if it is used for: 42.22 (i) housing for the elderly or for low- and moderate-income 42.23 families as defined in Title II of the National Housing Act, as 42.24 amended through December 31, 1990, and funded by a direct 42.25 federal loan or federally insured loan made pursuant to Title II 42.26 of the act; or 42.27 (ii) housing lower income families or elderly or 42.28 handicapped persons, as defined in Section 8 of the United 42.29 States Housing Act of 1937, as amended. 42.30 In order for a structure to be exempt under item (i) or 42.31 (ii), it must also meet each of the following criteria: 42.32 (A) is owned by an entity which is operated as a nonprofit 42.33 corporation organized under chapter 317A; 42.34 (B) is owned by an entity which has not entered into a 42.35 housing assistance payments contract under Section 8 of the 42.36 United States Housing Act of 1937, or, if the entity which owns 43.1 the structure has entered into a housing assistance payments 43.2 contract under Section 8 of the United States Housing Act of 43.3 1937, the contract provides assistance for less than 90 percent 43.4 of the dwelling units in the structure, excluding dwelling units 43.5 intended for management or maintenance personnel; 43.6 (C) operates an on-site congregate dining program in which 43.7 participation by residents is mandatory, and provides assisted 43.8 living or similar social and physical support services for 43.9 residents; and 43.10 (D)(1) was not assessed and did not pay tax under chapter 43.11 273 prior to the 1991 levy, while meeting the other conditions 43.12 of this subdivision; or 43.13 (2) is physically attached to a church exempt from taxation 43.14 under subdivision 6, and not less than 30 percent of the units 43.15 therein are occupied by individuals or families whose annual 43.16 income does not exceed 50 percent of the median family income, 43.17 as most recently established by the United States Department of 43.18 Housing and Urban Development for the applicable standard 43.19 metropolitan statistical area, adjusted for family size. 43.20 An exemption under this subdivision remains in effect for 43.21 taxes levied in each year or partial year of the term of its 43.22 permanent financing. 43.23 [EFFECTIVE DATE.] This section is effective the day 43.24 following final enactment. 43.25 Sec. 4. Minnesota Statutes 2002, section 272.02, 43.26 subdivision 31, is amended to read: 43.27 Subd. 31. [BUSINESS INCUBATOR PROPERTY.] Property owned by 43.28 a nonprofit charitable organization that qualifies for tax 43.29 exemption under section 501(c)(3) of the Internal Revenue Code 43.30 of 1986, as amended through December 31, 1997, that is intended 43.31 to be used as a business incubator in a high-unemployment 43.32 county, is exempt. As used in this subdivision, a "business 43.33 incubator" is a facility used for the development of nonretail 43.34 businesses, offering access to equipment, space, services, and 43.35 advice to the tenant businesses, for the purpose of encouraging 43.36 economic development, diversification, and job creation in the 44.1 area served by the organization, and "high-unemployment county" 44.2 is a county that had an average annual unemployment rate of 7.9 44.3 percent or greater in 1997. Property that qualifies for the 44.4 exemption under this subdivision is limited to no more than two 44.5 contiguous parcels and structures that do not exceed in the 44.6 aggregate 40,000 square feet. This exemption expires after 44.7 taxes payable in20052011. 44.8 Sec. 5. Minnesota Statutes 2002, section 272.02, 44.9 subdivision 47, is amended to read: 44.10 Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY; 44.11 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 44.12 attached machinery and other personal property which is part of 44.13 an electrical generating facility that meets the requirements of 44.14 this subdivision is exempt. At the time of construction, the 44.15 facility must: 44.16 (1) be designed to utilize poultry litter as a primary fuel 44.17 source; and 44.18 (2) be constructed for the purpose of generating power at 44.19 the facility that will be sold pursuant to a contract approved 44.20 by the public utilities commission in accordance with the 44.21 biomass mandate imposed under section 216B.2424. 44.22 Construction of the facility must be commenced after 44.23 January 1,20002003, and before December 31,20022003. 44.24 Property eligible for this exemption does not include electric 44.25 transmission lines and interconnections or gas pipelines and 44.26 interconnections appurtenant to the property or the facility. 44.27 [EFFECTIVE DATE.] This section is effective for taxes 44.28 levied in 2004, payable in 2005, and thereafter. 44.29 Sec. 6. Minnesota Statutes 2002, section 272.02, 44.30 subdivision 53, is amended to read: 44.31 Subd. 53. [ELECTRIC GENERATION FACILITY; PERSONAL 44.32 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 44.33 machinery and other personal property which is part of a 3.2 44.34 megawatt run-of-the-river hydroelectric generation facility and 44.35 that meets the requirements of this subdivision is exempt. At 44.36 the time of construction, the facility must: 45.1 (1) utilize two turbine generators at a dam site existing 45.2 on March 31, 1994; 45.3 (2) be located on publicly owned land and within 1,500 feet 45.4 of a 13.8 kilovolt distribution substation; and 45.5 (3) be eligible to receive a renewable energy production 45.6 incentive payment under section 216C.41. 45.7 Construction of the facility must be commenced after 45.8 January 1, 2002, and before January 1,20042005. Property 45.9 eligible for this exemption does not include electric 45.10 transmission lines and interconnections or gas pipelines and 45.11 interconnections appurtenant to the property or the facility. 45.12 Sec. 7. Minnesota Statutes 2002, section 272.02, is 45.13 amended by adding a subdivision to read: 45.14 Subd. 56. [ELECTRIC GENERATION FACILITY PERSONAL 45.15 PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 45.16 attached machinery and other personal property which is part of 45.17 a combined-cycle combustion-turbine electric generation facility 45.18 that exceeds 150 megawatts of installed capacity and that meets 45.19 the requirements of this subdivision is exempt. At the time of 45.20 construction, the facility must: 45.21 (1) utilize natural gas as a primary fuel; 45.22 (2) be owned by an electric generation and transmission 45.23 cooperative; 45.24 (3) be located within ten miles of parallel existing 45.25 24-inch and 30-inch natural gas pipelines and a 345-kilovolt 45.26 high-voltage electric transmission line; and 45.27 (4) be designed to provide intermediate energy and 45.28 ancillary services, and have received a certificate of need 45.29 under section 216B.243, demonstrating demand for its capacity. 45.30 (b) Construction of the facility must be commenced after 45.31 January 1, 2004, and before January 1, 2009. Property eligible 45.32 for this exemption does not include electric transmission lines 45.33 and interconnections or gas pipelines and interconnections 45.34 appurtenant to the property or the facility. 45.35 (c) The exemption under this section will take effect only 45.36 if the owner of the facility enters into agreements with the 46.1 governing bodies of the county and the city or town in which the 46.2 facility is located. The agreements may include a requirement 46.3 that the facility must pay a host fee to compensate the county 46.4 and city or town for hosting the facility. 46.5 [EFFECTIVE DATE.] This section is effective for taxes 46.6 levied in 2005, payable in 2006, and thereafter. 46.7 Sec. 8. Minnesota Statutes 2002, section 272.02, is 46.8 amended by adding a subdivision to read: 46.9 Subd. 57. [ELECTRIC GENERATION FACILITY PERSONAL 46.10 PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 46.11 attached machinery and other personal property which is part of 46.12 a combined-cycle combustion-turbine electric generation facility 46.13 that exceeds 550 megawatts of installed capacity and that meets 46.14 the requirements of this subdivision is exempt. At the time of 46.15 construction, the facility must: 46.16 (1) be designed to utilize natural gas as a primary fuel; 46.17 (2) not be owned by a public utility as defined in section 46.18 216B.02, subdivision 4; 46.19 (3) be located within five miles of an existing natural gas 46.20 pipeline and within four miles of an existing electrical 46.21 transmission substation; and 46.22 (4) be designed to provide energy and ancillary services 46.23 and have received a certificate of need under section 216B.243. 46.24 (b) Construction of the facility must be commenced after 46.25 January 1, 2004, and before January 1, 2007. Property eligible 46.26 for this exemption does not include electric transmission lines 46.27 and interconnections or gas pipelines and interconnections 46.28 appurtenant to the property or the facility. 46.29 [EFFECTIVE DATE.] This section is effective for assessment 46.30 year 2005, taxes payable in 2006, and thereafter. 46.31 Sec. 9. Minnesota Statutes 2002, section 273.01, is 46.32 amended to read: 46.33 273.01 [LISTING AND ASSESSMENT, TIME.] 46.34 All real property subject to taxation shall be listed and 46.35 at leastone-fourthone-fifth of the parcels listed shall be 46.36 appraised each year with reference to their value on January 2 47.1 preceding the assessment so that each parcel shall be 47.2 reappraised at maximum intervals offourfive years. All real 47.3 property becoming taxable in any year shall be listed with 47.4 reference to its value on January 2 of that year. Except as 47.5 provided in this section and section 274.01, subdivision 1, all 47.6 real property assessments shall be completed two weeks prior to 47.7 the date scheduled for the local board of review or 47.8 equalization. No changes in valuation or classification which 47.9 are intended to correct errors in judgment by the county 47.10 assessor may be made by the county assessor after the board of 47.11 review or the county board of equalization has adjourned; 47.12 however, corrections of errors that are merely clerical in 47.13 nature or changes that extend homestead treatment to property 47.14 are permitted after adjournment until the tax extension date for 47.15 that assessment year. Any changes made by the assessor after 47.16 adjournment must be fully documented and maintained in a file in 47.17 the assessor's office and shall be available for review by any 47.18 person. A copy of any changes made during this period shall be 47.19 sent to the county board no later than December 31 of the 47.20 assessment year. In the event a valuation and classification is 47.21 not placed on any real property by the dates scheduled for the 47.22 local board of review or equalization the valuation and 47.23 classification determined in the preceding assessment shall be 47.24 continued in effect and the provisions of section 273.13 shall, 47.25 in such case, not be applicable, except with respect to real 47.26 estate which has been constructed since the previous 47.27 assessment. Real property containing iron ore, the fee to which 47.28 is owned by the state of Minnesota, shall, if leased by the 47.29 state after January 2 in any year, be subject to assessment for 47.30 that year on the value of any iron ore removed under said lease 47.31 prior to January 2 of the following year. Personal property 47.32 subject to taxation shall be listed and assessed annually with 47.33 reference to its value on January 2; and, if acquired on that 47.34 day, shall be listed by or for the person acquiring it. 47.35 [EFFECTIVE DATE.] This section is effective for assessments 47.36 on or after January 2, 2004. 48.1 Sec. 10. Minnesota Statutes 2002, section 273.08, is 48.2 amended to read: 48.3 273.08 [ASSESSOR'S DUTIES.] 48.4 The assessor shall actually view, and determine the market 48.5 value of each tract or lot of real property listed for taxation, 48.6 including the value of all improvements and structures thereon, 48.7 at maximum intervals offourfive years and shall enter the 48.8 value opposite each description. 48.9 [EFFECTIVE DATE.] This section is effective for assessments 48.10 on or after January 2, 2004. 48.11 Sec. 11. Minnesota Statutes 2002, section 273.11, is 48.12 amended by adding a subdivision to read: 48.13 Subd. 21. [VALUATION EXCLUSION FOR LEAD PAINT 48.14 REMOVAL.] Owners of property classified as class 1a, 1b, 1c, 2a, 48.15 4b, or 4bb under section 273.13 may apply for a valuation 48.16 exclusion under this subdivision, provided that the property is 48.17 located in a city which has authorized valuation exclusions 48.18 under this subdivision. A city which authorizes valuation 48.19 exclusions under this subdivision must establish guidelines for 48.20 qualifying lead paint removal projects and must designate an 48.21 agency within the city to issue certificates of completion of 48.22 qualifying projects. 48.23 The property owner must obtain a certificate from the city 48.24 stating that the project has been completed and the cost 48.25 incurred by the owner in completing the project. Only projects 48.26 originating after April 1, 2003, may qualify for exclusion under 48.27 this subdivision. The property owner shall apply for a 48.28 valuation exclusion to the assessor on a form prescribed by the 48.29 assessor. 48.30 A qualifying property is eligible for a valuation exclusion 48.31 equal to 50 percent of the actual costs incurred, to a maximum 48.32 exclusion of $10,000, for a period of five years. The valuation 48.33 exclusion shall terminate upon the sale of the property. If a 48.34 property owner applies for exclusion under this subdivision 48.35 between January 1 and June 30 of any year, the exclusion shall 48.36 first apply for taxes payable in the following year. If a 49.1 property owner applies for exclusion under this subdivision 49.2 between July 1 and December 31 of any year, the exclusion shall 49.3 first apply for taxes payable in the second following year. 49.4 [EFFECTIVE DATE.] This section is effective for taxes 49.5 payable in 2004 and subsequent years. 49.6 Sec. 12. Minnesota Statutes 2002, section 273.11, is 49.7 amended by adding a subdivision to read: 49.8 Subd. 22. [VALUATION OF CLASS 4D CERTIFIED PROPERTY.] In 49.9 determining the market value of class 4d rental property 49.10 certified under section 462A.071, the assessor shall reduce the 49.11 value of the property by its restricted use value. "Restricted 49.12 use value" is the amount of market value reduction that results 49.13 from the restrictions on uses that qualify the property for 49.14 certification as class 4d under section 273.13, subdivision 25, 49.15 paragraph (e). The assessor shall determine the restricted use 49.16 value of the property using guidelines set by the commissioner 49.17 of revenue. 49.18 [EFFECTIVE DATE.] This section is effective for taxes 49.19 levied in 2003, payable in 2004, and thereafter. 49.20 Sec. 13. Minnesota Statutes 2002, section 273.11, is 49.21 amended by adding a subdivision to read: 49.22 Subd. 23. [VALUATION EXCLUSION FOR SEWAGE TREATMENT SYSTEM 49.23 IMPROVEMENTS.] Owners of property classified as class 1a, 1b, 49.24 1c, 2a, 4b, 4bb, or noncommercial 4c under section 273.13 may 49.25 apply for a valuation exclusion under this subdivision, provided 49.26 that the following conditions are met: 49.27 (1) a notice of noncompliance has been issued by a licensed 49.28 compliance inspector with regard to the individual sewage 49.29 treatment system serving the property under section 115.55, 49.30 subdivision 5b; 49.31 (2) the owner of the property furnishes documentation to 49.32 the satisfaction of the assessor that the property's individual 49.33 sewage treatment system has been replaced or refurbished between 49.34 January 1, 2003, and December 31, 2007; and 49.35 (3) a certificate of compliance has been issued for the new 49.36 or refurbished system under section 115.55, subdivision 5. 50.1 Application shall be made to the assessor on a form 50.2 prescribed by the assessor. Property meeting the requirements 50.3 above shall be eligible for a valuation exclusion equal to 50 50.4 percent of the actual costs incurred, to a maximum exclusion of 50.5 $7,500, for a period of five years. The valuation exclusion 50.6 shall terminate upon the sale of the property. If a property 50.7 owner applies for exclusion under this subdivision between 50.8 January 1 and June 30 of any year, the exclusion shall first 50.9 apply for taxes payable in the following year. If a property 50.10 owner applies for exclusion under this subdivision between July 50.11 1 and December 31 of any year, the exclusion shall first apply 50.12 for taxes payable in the second following year. 50.13 [EFFECTIVE DATE.] This section is effective for taxes 50.14 payable in 2004 and subsequent years. 50.15 Sec. 14. [273.1115] [HOMESTEAD RESORTS; VALUATION AND 50.16 DEFERMENT.] 50.17 Subdivision 1. [REQUIREMENTS.] Real property qualifying 50.18 for classification as class 1c under section 273.13, subdivision 50.19 22, paragraph (c), is entitled to valuation and tax deferment 50.20 under this section, provided that if part of a resort is not 50.21 classified as class 1c, only that portion of the value of the 50.22 property that is classified as class 1c property qualifies under 50.23 this section. 50.24 Subd. 2. [DETERMINATION OF VALUE.] Upon timely application 50.25 by the owner, as provided in subdivision 4, the value of real 50.26 property described in subdivision 1 must be determined by the 50.27 assessor solely with reference to its classification value as 50.28 class 1c property, notwithstanding sections 272.03, subdivision 50.29 8, and 273.11. The owner must furnish information on the income 50.30 generated by the property and other information required by the 50.31 assessor to determine the value of the property. The assessor 50.32 shall not consider any added values resulting from other factors. 50.33 Subd. 3. [SEPARATE DETERMINATION OF MARKET VALUE AND TAX.] 50.34 The assessor shall, however, make a separate determination of 50.35 the market value of the real estate. The assessor shall record 50.36 on the property assessment records the tax based upon the 51.1 appropriate local tax rate applicable to the property in the 51.2 taxing district. 51.3 Subd. 4. [APPLICATION.] Application for deferment of taxes 51.4 and assessment under this section must be filed by May 1 of the 51.5 year prior to the year in which the taxes are payable. The 51.6 application must be filed with the assessor of the taxing 51.7 district in which the real property is located on a form 51.8 prescribed by the commissioner of revenue. The assessor may 51.9 require proof by affidavit or otherwise that the property 51.10 qualifies under subdivision 1. An application approved by the 51.11 assessor continues in effect for subsequent years until the 51.12 property no longer qualifies under subdivision 1. 51.13 Subd. 5. [ADDITIONAL TAXES.] When real property valued and 51.14 assessed under this section no longer qualifies under 51.15 subdivision 1, the portion no longer qualifying is subject to 51.16 additional taxes, in the amount equal to the difference between 51.17 the taxes determined in accordance with subdivision 2, and the 51.18 amount determined under subdivision 3, provided, however, that 51.19 the amount determined under subdivision 3 must not be greater 51.20 than it would have been had the actual bona fide sale price of 51.21 the real property at an arms length transaction been used in 51.22 lieu of the market value determined under subdivision 3. The 51.23 additional taxes must be extended against the property on the 51.24 tax list for the current year, except that no interest or 51.25 penalties may be levied on the additional taxes if timely paid, 51.26 and except that the additional taxes must only be levied with 51.27 respect to the last seven years that the property has been 51.28 valued and assessed under this section. 51.29 Subd. 6. [LIEN.] The tax imposed by this section is a lien 51.30 on the property assessed to the same extent and for the same 51.31 duration as other taxes imposed on property within this state. 51.32 The tax must be annually extended by the county auditor and when 51.33 payable must be collected and distributed in the manner provided 51.34 by law for the collection and distribution of other property 51.35 taxes. 51.36 Subd. 7. [SPECIAL LOCAL ASSESSMENTS.] The payment of 52.1 special local assessments levied after June 30, 2003, for 52.2 improvements made to any real property described in subdivision 52.3 2, together with the interest thereon must, on timely 52.4 application under subdivision 4, be deferred as long as the 52.5 property qualifies under subdivision 1. If special assessments 52.6 against the property have been deferred under this subdivision, 52.7 the governmental unit shall file with the county recorder in the 52.8 county in which the property is located a certificate containing 52.9 the legal description of the affected property and of the amount 52.10 deferred. When the property no longer qualifies under 52.11 subdivision 1, all deferred special assessments plus interest 52.12 are payable in equal installments spread over the time remaining 52.13 until the last maturity date of the bonds issued to finance the 52.14 improvement for which the assessments were levied. If the bonds 52.15 have matured, the deferred special assessments plus interest are 52.16 payable within 90 days. The provisions of section 429.061, 52.17 subdivision 2, apply to the collection of these installments. 52.18 Penalty must not be levied on the special assessments if timely 52.19 paid. 52.20 Subd. 8. [CONTINUATION OF TAX TREATMENT UPON SALE.] When 52.21 real property qualifying under subdivision 1 is sold, no 52.22 additional taxes or deferred special assessments plus interest 52.23 may be extended against the property if: 52.24 (1) the property continues to qualify pursuant to 52.25 subdivision 1; and 52.26 (2) the new owner files an application for continued 52.27 deferment within 30 days after the sale. 52.28 Subd. 9. [APPLICABILITY OF SPECIAL ASSESSMENT PROVISIONS.] 52.29 This section applies to special local assessments levied after 52.30 June 30, 2003, and payable in the years thereafter, but shall 52.31 not apply to any special assessments levied at any time by a 52.32 county or district court under the provisions of chapter 116A. 52.33 [EFFECTIVE DATE.] This section is effective for taxes 52.34 levied in 2003, payable in 2004, and thereafter. For 52.35 applications for taxes payable in 2004 only, the application 52.36 deadline in subdivision 4 is extended to August 1, 2003. 53.1 Sec. 15. Minnesota Statutes 2002, section 273.13, 53.2 subdivision 22, is amended to read: 53.3 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 53.4 23 and in paragraphs (b) and (c), real estate which is 53.5 residential and used for homestead purposes is class 1a. In the 53.6 case of a duplex or triplex in which one of the units is used 53.7 for homestead purposes, the entire property is deemed to be used 53.8 for homestead purposes. The market value of class 1a property 53.9 must be determined based upon the value of the house, garage, 53.10 and land. 53.11 The first $500,000 of market value of class 1a property has 53.12 a net class rate of one percent of its market value; and the 53.13 market value of class 1a property that exceeds $500,000 has a 53.14 class rate of 1.25 percent of its market value. 53.15 (b) Class 1b property includes homestead real estate or 53.16 homestead manufactured homes used for the purposes of a 53.17 homestead by 53.18 (1) anyblindperson who is blind as defined in section 53.19 256D.35, or the blind person and the blind person's spouse; or 53.20 (2) any person, hereinafter referred to as "veteran," who: 53.21 (i) served in the active military or naval service of the 53.22 United States; and 53.23 (ii) is entitled to compensation under the laws and 53.24 regulations of the United States for permanent and total 53.25 service-connected disability due to the loss, or loss of use, by 53.26 reason of amputation, ankylosis, progressive muscular 53.27 dystrophies, or paralysis, of both lower extremities, such as to 53.28 preclude motion without the aid of braces, crutches, canes, or a 53.29 wheelchair; and 53.30 (iii) has acquired a special housing unit with special 53.31 fixtures or movable facilities made necessary by the nature of 53.32 the veteran's disability, or the surviving spouse of the 53.33 deceased veteran for as long as the surviving spouse retains the 53.34 special housing unit as a homestead; or 53.35 (3) any person who:53.36(i)is permanently and totally disabledand; or 54.1(ii) receives 90 percent or more of total household income,54.2as defined in section 290A.03, subdivision 5, from54.3(A) aid from any state as a result of that disability; or54.4(B) supplemental security income for the disabled; or54.5(C) workers' compensation based on a finding of total and54.6permanent disability; or54.7(D) social security disability, including the amount of a54.8disability insurance benefit which is converted to an old age54.9insurance benefit and any subsequent cost of living increases;54.10or54.11(E) aid under the federal Railroad Retirement Act of 1937,54.12United States Code Annotated, title 45, section 228b(a)5; or54.13(F) a pension from any local government retirement fund54.14located in the state of Minnesota as a result of that54.15disability; or54.16(G) pension, annuity, or other income paid as a result of54.17that disability from a private pension or disability plan,54.18including employer, employee, union, and insurance plans and54.19(iii) has household income as defined in section 290A.03,54.20subdivision 5, of $50,000 or less; or54.21 (4) any person who is permanently and totally disabled and 54.22 whose household income as defined in section 290A.03, 54.23 subdivision 5, is 275 percent or less of the federal poverty 54.24 level. 54.25 Property is classified and assessed under clause (4) only 54.26 if the government agency or income-providing source certifies, 54.27 upon the request of the homestead occupant, that the homestead 54.28 occupant satisfies the disability requirements of this paragraph. 54.29 Property is classified and assessed pursuant to clause (1) 54.30 only if the commissioner ofeconomic securityrevenue certifies 54.31 to the assessor that the homestead occupant satisfies the 54.32 requirements of this paragraph. 54.33 Permanently and totally disabled for the purpose of this 54.34 subdivision means a condition which is permanent in nature and 54.35 totally incapacitates the person from working at an occupation 54.36 which brings the person an income. The first $32,000 market 55.1 value of class 1b property has a net class rate of .45 percent 55.2 of its market value. The remaining market value of class 1b 55.3 property has a class rate using the rates for class 1a or class 55.4 2a property, whichever is appropriate, of similar market value. 55.5 (c) Class 1c property is commercial use real property that 55.6 abuts a lakeshore line and is devoted to temporary and seasonal 55.7 residential occupancy for recreational purposes but not devoted 55.8 to commercial purposes for more than 250 days in the year 55.9 preceding the year of assessment, and that includes a portion 55.10 used as a homestead by the owner, which includes a dwelling 55.11 occupied as a homestead by a shareholder of a corporation that 55.12 owns the resortor, a partner in a partnership that owns the 55.13 resort, or a member of a limited liability company that owns the 55.14 resort even if the title to the homestead is held by the 55.15 corporationor, partnership, or limited liability company. For 55.16 purposes of this clause, property is devoted to a commercial 55.17 purpose on a specific day if any portion of the property, 55.18 excluding the portion used exclusively as a homestead, is used 55.19 for residential occupancy and a fee is charged for residential 55.20 occupancy. The first $500,000 of market value of class 1c 55.21 property has a class rate of one percent, and the remaining 55.22 market value of class 1c property has a class rate of one 55.23 percent, with the following limitation: the area of the 55.24 property must not exceed 100 feet of lakeshore footage for each 55.25 cabin or campsite located on the property up to a total of 800 55.26 feet and 500 feet in depth, measured away from the lakeshore. 55.27 If any portion of the class 1c resort property is classified as 55.28 class 4c under subdivision 25, the entire property must meet the 55.29 requirements of subdivision 25, paragraph (d), clause (1), to 55.30 qualify for class 1c treatment under this paragraph. 55.31 (d) Class 1d property includes structures that meet all of 55.32 the following criteria: 55.33 (1) the structure is located on property that is classified 55.34 as agricultural property under section 273.13, subdivision 23; 55.35 (2) the structure is occupied exclusively by seasonal farm 55.36 workers during the time when they work on that farm, and the 56.1 occupants are not charged rent for the privilege of occupying 56.2 the property, provided that use of the structure for storage of 56.3 farm equipment and produce does not disqualify the property from 56.4 classification under this paragraph; 56.5 (3) the structure meets all applicable health and safety 56.6 requirements for the appropriate season; and 56.7 (4) the structure is not salable as residential property 56.8 because it does not comply with local ordinances relating to 56.9 location in relation to streets or roads. 56.10 The market value of class 1d property has the same class 56.11 rates as class 1a property under paragraph (a). 56.12 [EFFECTIVE DATE.] This section is effective for property 56.13 taxes levied in 2003, payable in 2004, and thereafter, except 56.14 that the amendments to paragraph (b) are effective for taxes 56.15 payable in 2005 and thereafter. 56.16 Sec. 16. Minnesota Statutes 2002, section 273.1315, is 56.17 amended to read: 56.18 273.1315 [CERTIFICATION OF 1B PROPERTY.] 56.19 Any property owner seeking classification and assessment of 56.20 the owner's homestead as class 1b property pursuant to section 56.21 273.13, subdivision 22, paragraph (b),clause (2) or (3),shall 56.22 file with the commissioner of revenuefor each assessment yeara 56.23 1b homestead declaration, on a form prescribed by the 56.24 commissioner. The declaration shall contain the following 56.25 information: 56.26 (a) the information necessary to verify that the property 56.27 owner or the owner's spouse satisfies the requirements of 56.28 section 273.13, subdivision 22, paragraph (b),clause (2) or56.29(3),for 1b classification; and 56.30 (b)the property owner's household income, as defined in56.31section 290A.03, for the previous calendar year; and56.32(c)any additional information prescribed by the 56.33 commissioner. 56.34 The declarationshallmust be filed on or beforeMarch56.35 October 1of each yearto be effective for property taxes 56.36 payable during the succeeding calendar year. The declaration 57.1 and any supplementary information received from the property 57.2 owner pursuant to this section shall be subject to chapter 57.3 270B. If approved by the commissioner, the declaration remains 57.4 in effect until the property no longer qualifies under section 57.5 273.13, subdivision 22, paragraph (b). Failure to notify the 57.6 commissioner within 30 days that the property no longer 57.7 qualifies under that paragraph because of a sale, change in 57.8 occupancy, or change in the status or condition of an occupant 57.9 shall result in the penalty provided in section 273.124, 57.10 subdivision 13, computed on the basis of the class 1b benefits 57.11 for the property, and the property shall lose its current class 57.12 1b classification. 57.13 The commissioner shall provide to the assessor on or before 57.14AprilNovember 1 a listing of the parcels of property qualifying 57.15 for 1b classification. 57.16 [EFFECTIVE DATE.] This section is effective for taxes 57.17 payable in 2005 and thereafter. 57.18 Sec. 17. Minnesota Statutes 2002, section 275.025, 57.19 subdivision 4, is amended to read: 57.20 Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 57.21 The state general tax must be distributed among the counties by 57.22 applying a uniform rate to each county's commercial-industrial 57.23 tax capacity and its seasonal recreational tax capacity. Within 57.24 each county, the tax must be levied by applying a uniform rate 57.25 against commercial-industrial tax capacity and seasonal 57.26 recreational tax capacity. ByNovember 1October 1 each year, 57.27 the commissioner of revenue shall certify the state general levy 57.28 rate to each county auditor. 57.29 Sec. 18. Minnesota Statutes 2002, section 275.065, 57.30 subdivision 1, is amended to read: 57.31 Subdivision 1. [PROPOSED LEVY.] (a) Notwithstanding any 57.32 law or charter to the contrary, on or before September155, 57.33 each taxing authority, other than a school district, shall adopt 57.34 a proposed budget and shall certify to the county auditor the 57.35 proposed or, in the case of a town, the final property tax levy 57.36 for taxes payable in the following year. 58.1 (b) On or before September3020, each school district 58.2 shall certify to the county auditor the proposed property tax 58.3 levy for taxes payable in the following year. The school 58.4 district shall certify the proposed levy as: 58.5 (1) the state determined school levy amount as prescribed 58.6 under section 126C.13, subdivision 2; 58.7 (2) voter approved referendum and debt levies; and 58.8 (3) the sum of the remaining school levies, or the maximum 58.9 levy limitation certified by the commissioner of children, 58.10 families, and learning according to section 126C.48, subdivision 58.11 1, less the amounts levied under clauses (1) and (2). 58.12 (c) If the board of estimate and taxation or any similar 58.13 board that establishes maximum tax levies for taxing 58.14 jurisdictions within a first class city certifies the maximum 58.15 property tax levies for funds under its jurisdiction by charter 58.16 to the county auditor by September155, the city shall be 58.17 deemed to have certified its levies for those taxing 58.18 jurisdictions. 58.19 (d) For purposes of this section, "taxing authority" 58.20 includes all home rule and statutory cities, towns, counties, 58.21 school districts, and special taxing districts as defined in 58.22 section 275.066. Intermediate school districts that levy a tax 58.23 under chapter 124 or 136D, joint powers boards established under 58.24 sections 123A.44 to 123A.446, and common school districts No. 58.25 323, Franconia, and No. 815, Prinsburg, are also special taxing 58.26 districts for purposes of this section. 58.27 Sec. 19. Minnesota Statutes 2002, section 275.065, 58.28 subdivision 1a, is amended to read: 58.29 Subd. 1a. [OVERLAPPING JURISDICTIONS.] In the case of a 58.30 taxing authority lying in two or more counties, the home county 58.31 auditor shall certify the proposed levy and the proposed local 58.32 tax rate to the other county auditor by September2010. The 58.33 home county auditor must estimate the levy or rate in preparing 58.34 the notices required in subdivision 3, if the other county has 58.35 not certified the appropriate information. If requested by the 58.36 home county auditor, the other county auditor must furnish an 59.1 estimate to the home county auditor. 59.2 Sec. 20. Minnesota Statutes 2002, section 275.065, 59.3 subdivision 3, is amended to read: 59.4 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 59.5 county auditor shall prepare and the county treasurer shall 59.6 deliver afterNovember 10October 17 and on or beforeNovember59.724October 31 each year, by first class mail to each taxpayer at 59.8 the address listed on the county's current year's assessment 59.9 roll, a notice of proposed property taxes. If the information 59.10 necessary to provide these notices is not available by the time 59.11 required to mail the notice by October 31, they must be mailed 59.12 no later than November 24. 59.13 If the county provides access to parcel-specific property 59.14 tax information on its Web site, it may elect to provide the 59.15 information required under this subdivision by that means 59.16 instead of mailing the notices to taxpayers. If the county 59.17 elects to provide the information through the Web site, it must 59.18 provide a notice in its newsletter or by publication in a 59.19 newspaper described in subdivision 5a that any taxpayer may 59.20 contact the county and request a mailed notice, which must be 59.21 mailed within ten days of the receipt of the request. Beginning 59.22 in 2004, information regarding the taxpayer's option to request 59.23 a mailed notice must be included with the property tax statement. 59.24 (b) The commissioner of revenue shall prescribe the form of 59.25 the notice. 59.26 (c) The notice must inform taxpayers that it contains the 59.27 amount of property taxes each taxing authority proposes to 59.28 collect for taxes payable the following year. In the case of a 59.29 town, or in the case of the state general tax, the final tax 59.30 amount will be its proposed tax. In the case of taxing 59.31 authorities required to hold a public meeting under subdivision 59.32 6, the notice must clearly state that each taxing authority, 59.33 including regional library districts established under section 59.34 134.201, and including the metropolitan taxing districts as 59.35 defined in paragraph (i), but excluding all other special taxing 59.36 districts and towns, will hold a public meeting to receive 60.1 public testimony on the proposed budget and proposed or final 60.2 property tax levy, or, in case of a school district, on the 60.3 current budget and proposed property tax levy. It must clearly 60.4 state the time and place of each taxing authority's meeting, a 60.5 telephone number for the taxing authority that taxpayers may 60.6 call if they have questions related to the notice, and an 60.7 address where comments will be received by mail. 60.8 (d) The notice must state for each parcel: 60.9 (1) the market value of the property as determined under 60.10 section 273.11, and used for computing property taxes payable in 60.11 the following year and for taxes payable in the current year as 60.12 each appears in the records of the county assessor onNovember 160.13 October 10 of the current year; and, in the case of residential 60.14 property, whether the property is classified as homestead or 60.15 nonhomestead. The notice must clearly inform taxpayers of the 60.16 years to which the market values apply and that the values are 60.17 final values; 60.18 (2) the items listed below, shown separately by county, 60.19 city or town, and state general tax, net of the residential and 60.20 agricultural homestead credit under section 273.1384, voter 60.21 approved school levy, other local school levy, and the sum of 60.22 the special taxing districts, and as a total of all taxing 60.23 authorities: 60.24 (i) the actual tax for taxes payable in the current year; 60.25(ii) the tax change due to spending factors, defined as the60.26proposed tax minus the constant spending tax amount;60.27(iii) the tax change due to other factors, defined as the60.28constant spending tax amount minus the actual current year tax;60.29 and 60.30(iv)(ii) the proposed tax amount. 60.31 If the county levy under clause (2) includes an amount for 60.32 a lake improvement district as defined under sections 103B.501 60.33 to 103B.581, the amount attributable for that purpose must be 60.34 separately stated from the remaining county levy amount. 60.35 In the case of a town or the state general tax, the final 60.36 tax shall also be its proposed tax unless the town changes its 61.1 levy at a special town meeting under section 365.52. If a 61.2 school district has certified under section 126C.17, subdivision 61.3 9, that a referendum will be held in the school district at the 61.4 November general election, the county auditor must note next to 61.5 the school district's proposed amount that a referendum is 61.6 pending and that, if approved by the voters, the tax amount may 61.7 be higher than shown on the notice. In the case of the city of 61.8 Minneapolis, the levy for the Minneapolis library board and the 61.9 levy for Minneapolis park and recreation shall be listed 61.10 separately from the remaining amount of the city's levy. In the 61.11 case of the city of St. Paul, the levy for the St. Paul library 61.12 agency must be listed separately from the remaining amount of 61.13 the city's levy. In the case of Ramsey county, any amount 61.14 levied under section 134.07 must be listed separately from the 61.15 remaining amount of the county's levy. In the case of a parcel 61.16 where tax increment or the fiscal disparities areawide tax under 61.17 chapter 276A or 473F applies, the proposed tax levy on the 61.18 captured value or the proposed tax levy on the tax capacity 61.19 subject to the areawide tax must each be stated separately and 61.20 not included in the sum of the special taxing districts; and 61.21 (3) the increase or decrease between the total taxes 61.22 payable in the current year and the total proposed taxes, 61.23 expressed as a percentage. 61.24 For purposes of this section, the amount of the tax on 61.25 homesteads qualifying under the senior citizens' property tax 61.26 deferral program under chapter 290B is the total amount of 61.27 property tax before subtraction of the deferred property tax 61.28 amount. 61.29 (e) The notice must clearly state that the proposed or 61.30 final taxes do not include the following: 61.31 (1) special assessments; 61.32 (2) levies approved by the voters after the date the 61.33 proposed taxes are certified, including bond referenda, school 61.34 district levy referenda, and levy limit increase referenda; 61.35 (3) amounts necessary to pay cleanup or other costs due to 61.36 a natural disaster occurring after the date the proposed taxes 62.1 are certified; 62.2 (4) amounts necessary to pay tort judgments against the 62.3 taxing authority that become final after the date the proposed 62.4 taxes are certified; and 62.5 (5) the contamination tax imposed on properties which 62.6 received market value reductions for contamination. 62.7 (f) Except as provided in subdivision 7, failure of the 62.8 county auditor to prepare or the county treasurer to deliver the 62.9 notice as required in this section does not invalidate the 62.10 proposed or final tax levy or the taxes payable pursuant to the 62.11 tax levy. 62.12 (g) If the notice the taxpayer receives under this section 62.13 lists the property as nonhomestead, and satisfactory 62.14 documentation is provided to the county assessor by the 62.15 applicable deadline, and the property qualifies for the 62.16 homestead classification in that assessment year, the assessor 62.17 shall reclassify the property to homestead for taxes payable in 62.18 the following year. 62.19 (h) In the case of class 4 residential property used as a 62.20 residence for lease or rental periods of 30 days or more, the 62.21 taxpayer must either: 62.22 (1) mail or deliver a copy of the notice of proposed 62.23 property taxes to each tenant, renter, or lessee; or 62.24 (2) post a copy of the notice in a conspicuous place on the 62.25 premises of the property. 62.26 The notice must be mailed or posted by the taxpayer by 62.27 November273 or within three days of receipt of the notice, 62.28 whichever is later. A taxpayer may notify the county treasurer 62.29 of the address of the taxpayer, agent, caretaker, or manager of 62.30 the premises to which the notice must be mailed in order to 62.31 fulfill the requirements of this paragraph. 62.32 (i) For purposes of this subdivision, subdivisions 5a and 62.33 6, "metropolitan special taxing districts" means the following 62.34 taxing districts in the seven-county metropolitan area that levy 62.35 a property tax for any of the specified purposes listed below: 62.36 (1) metropolitan council under section 473.132, 473.167, 63.1 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 63.2 (2) metropolitan airports commission under section 473.667, 63.3 473.671, or 473.672; and 63.4 (3) metropolitan mosquito control commission under section 63.5 473.711. 63.6 For purposes of this section, any levies made by the 63.7 regional rail authorities in the county of Anoka, Carver, 63.8 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 63.9 398A shall be included with the appropriate county's levy and 63.10 shall be discussed at that county's public hearing. 63.11 (j) If a statutory or home rule charter city or a town has 63.12 exercised the local levy option provided by section 473.388, 63.13 subdivision 7, it may include in the notice of its proposed 63.14 taxes the amount of its proposed taxes attributable to its 63.15 exercise of the option. In the first year of the city or town's 63.16 exercise of this option, the statement shall include an estimate 63.17 of the reduction of the metropolitan council's tax on the parcel 63.18 due to exercise of that option. The metropolitan council's levy 63.19 shall be adjusted accordingly. 63.20 Sec. 21. [275.75] [CHARTER EXEMPTION FOR AID LOSS.] 63.21 Notwithstanding any other provision of a municipal charter 63.22 that limits ad valorem taxes to a lesser amount, or that would 63.23 require voter approval for any increase, the governing body of a 63.24 municipality may by resolution increase its levy for taxes 63.25 payable in 2004 and 2005 only by an amount equal to the 63.26 reduction in the amount of aid it is certified to receive under 63.27 sections 477A.011 to 477A.03 for that same payable year compared 63.28 to the amount certified in 2003. 63.29 Sec. 22. Minnesota Statutes 2002, section 276.04, 63.30 subdivision 2, is amended to read: 63.31 Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 63.32 shall provide for the printing of the tax statements. The 63.33 commissioner of revenue shall prescribe the form of the property 63.34 tax statement and its contents. The statement must contain a 63.35 tabulated statement of the dollar amount due to each taxing 63.36 authority and the amount of the state tax from the parcel of 64.1 real property for which a particular tax statement is prepared. 64.2 The dollar amounts attributable to the county, the state tax, 64.3 the voter approved school tax, the other local school tax, the 64.4 township or municipality, and the total of the metropolitan 64.5 special taxing districts as defined in section 275.065, 64.6 subdivision 3, paragraph (i), must be separately stated. The 64.7 amounts due all other special taxing districts, if any, may be 64.8 aggregated. If the county levy under this paragraph includes an 64.9 amount for a lake improvement district as defined under sections 64.10 103B.501 to 103B.581, the amount attributable for that purpose 64.11 must be separately stated from the remaining county levy 64.12 amount. In the case of Ramsey county, if the county levy under 64.13 this paragraph includes an amount for public library service 64.14 under section 134.07, the amount attributable for that purpose 64.15 must be separately stated from the remaining county levy 64.16 amount. The amount of the tax on homesteads qualifying under 64.17 the senior citizens' property tax deferral program under chapter 64.18 290B is the total amount of property tax before subtraction of 64.19 the deferred property tax amount. The amount of the tax on 64.20 contamination value imposed under sections 270.91 to 270.98, if 64.21 any, must also be separately stated. The dollar amounts, 64.22 including the dollar amount of any special assessments, may be 64.23 rounded to the nearest even whole dollar. For purposes of this 64.24 section whole odd-numbered dollars may be adjusted to the next 64.25 higher even-numbered dollar. The amount of market value 64.26 excluded under section 273.11, subdivision 16, if any, must also 64.27 be listed on the tax statement. 64.28 (b) The property tax statements for manufactured homes and 64.29 sectional structures taxed as personal property shall contain 64.30 the same information that is required on the tax statements for 64.31 real property. 64.32 (c) Real and personal property tax statements must contain 64.33 the following information in the order given in this paragraph. 64.34 The information must contain the current year tax information in 64.35 the right column with the corresponding information for the 64.36 previous year in a column on the left: 65.1 (1) the property's estimated market value under section 65.2 273.11, subdivision 1; 65.3 (2) the property's taxable market value after reductions 65.4 under section 273.11, subdivisions 1a and 16; 65.5 (3) the property's gross tax, calculated by adding the 65.6 property's total property tax to the sum of the aids enumerated 65.7 in clause (4); 65.8 (4) a total of the following aids: 65.9 (i) education aids payable under chapters 122A, 123A, 123B, 65.10 124D, 125A, 126C, and 127A; 65.11 (ii) local government aids for cities, towns, and counties 65.12 under chapter 477A; 65.13 (iii) disparity reduction aid under section 273.1398; and 65.14 (iv) homestead and agricultural credit aid under section 65.15 273.1398; 65.16 (5) for homestead residential and agricultural properties, 65.17 the credits under section 273.1384; 65.18 (6) any credits received under sections 273.119; 273.123; 65.19 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 65.20 473H.10, except that the amount of credit received under section 65.21 273.135 must be separately stated and identified as "taconite 65.22 tax relief"; and 65.23 (7) the net tax payable in the manner required in paragraph 65.24 (a). 65.25 (d) If the county uses envelopes for mailing property tax 65.26 statements and if the county agrees, a taxing district may 65.27 include a notice with the property tax statement notifying 65.28 taxpayers when the taxing district will begin its budget 65.29 deliberations for the current year, and encouraging taxpayers to 65.30 attend the hearings. If the county allows notices to be 65.31 included in the envelope containing the property tax statement, 65.32 and if more than one taxing district relative to a given 65.33 property decides to include a notice with the tax statement, the 65.34 county treasurer or auditor must coordinate the process and may 65.35 combine the information on a single announcement. 65.36 The commissioner of revenue shall certify to the county 66.1 auditor the actual or estimated aids enumerated in clause (4) 66.2 that local governments will receive in the following year. The 66.3 commissioner must certify this amount by January 1 of each year. 66.4 Sec. 23. Minnesota Statutes 2002, section 278.03, 66.5 subdivision 1, is amended to read: 66.6 Subdivision 1. [REAL PROPERTY.]In the case of real66.7property,If the proceedings instituted by the filing of the 66.8 petition have not been completed before the 16th day of May next 66.9 following the filing or, in the case of class 1c property or 66.10 class 4c resort property before the 16th day of July for taxes 66.11 payable in 2004 and 2005 only, the petitioner shall pay to the 66.12 county treasurer 50 percent of the tax levied for such year 66.13 against the property involved, unless permission to continue 66.14 prosecution of the petition without such payment is obtained as 66.15 herein provided. If the proceedings instituted by the filing of 66.16 the petition have not been completed by the next October 16, or, 66.17 in the case of class 1b agricultural homestead, class 2a 66.18 agricultural homestead, and class 2b(2) agricultural 66.19 nonhomestead property, November 16, the petitioner shall pay to 66.20 the county treasurer 50 percent of the unpaid balance of the 66.21 taxes levied for the year against the property involved if the 66.22 unpaid balance is $2,000 or less and 80 percent of the unpaid 66.23 balance if the unpaid balance is over $2,000, unless permission 66.24 to continue prosecution of the petition without payment is 66.25 obtained as herein provided. The petitioner, upon ten days' 66.26 notice to the county attorney and to the county auditor, given 66.27 at least ten days prior to the 16th day of May or, in the case 66.28 of class 1c or class 4c resort property, the 16th day of July 66.29 for taxes payable in 2004 and 2005 only, or the 16th day of 66.30 October, or, in the case of class 1b agricultural homestead, 66.31 class 2a agricultural homestead, and class 2b(2) agricultural 66.32 nonhomestead property, the 16th day of November, may apply to 66.33 the court for permission to continue prosecution of the petition 66.34 without payment; and, if it is made to appear 66.35 (1) that the proposed review is to be taken in good faith; 66.36 (2) that there is probable cause to believe that the 67.1 property may be held exempt from the tax levied or that the tax 67.2 may be determined to be less than 50 percent of the amount 67.3 levied; and 67.4 (3) that it would work a hardship upon petitioner to pay 67.5 the taxes due, 67.6 the court may permit the petitioner to continue prosecution 67.7 of the petition without payment, or may fix a lesser amount to 67.8 be paid as a condition of continuing the prosecution of the 67.9 petition. 67.10 Failure to make payment of the amount required when due 67.11 shall operate automatically to dismiss the petition and all 67.12 proceedings thereunder unless the payment is waived by an order 67.13 of the court permitting the petitioner to continue prosecution 67.14 of the petition without payment. The petition shall be 67.15 automatically reinstated upon payment of the entire tax plus 67.16 interest and penalty if the payment is made within one year of 67.17 the dismissal. The county treasurer shall, upon request of the 67.18 petitioner, issue duplicate receipts for the tax payment, one of 67.19 which shall be filed by the petitioner in the proceeding. 67.20 Sec. 24. Minnesota Statutes 2002, section 278.05, 67.21 subdivision 6, is amended to read: 67.22 Subd. 6. [DISMISSAL OF PETITION; EXCLUSION OF CERTAIN 67.23 EVIDENCE.] (a) Information, including income and expense 67.24 figures, verified net rentable areas, and anticipated income and 67.25 expenses, for income-producing property must be provided to the 67.26 county assessorwithin 60 days after the petition has been filed67.27under this chapterno later than 60 days after the applicable 67.28 filing deadline contained in section 278.01, subdivision 1 or 67.29 4. Failure to provide the information required in this 67.30 paragraph shall result in the dismissal of the petition, 67.31 unless (1) the failure to provide it was due to the 67.32 unavailability of the evidence atthatthe time that the 67.33 information was due, or (2) the petitioner was not informed in 67.34 writing by the assessor of the requirement to provide the 67.35 information. 67.36 If the petitioner proves that the assessor did not provide the 68.1 written information, the petitioner has an additional 30 days to 68.2 provide the information from the time the petitioner was 68.3 informed of the requirement to provide the information, 68.4 otherwise the petition shall be dismissed. 68.5 (b) Provided that the information as contained in paragraph 68.6 (a) is timely submitted to the county assessor, the county 68.7 assessor shall furnish the petitioner at least five days before 68.8 the hearing under this chapter with the property's appraisal, if 68.9 any, which will be presented to the court at the hearing. The 68.10 petitioner shall furnish to the county assessor at least five 68.11 days before the hearing under this chapter with the property's 68.12 appraisal, if any, which will be presented to the court at the 68.13 hearing. An appraisal of the petitioner's property done by or 68.14 for the county shall not be admissible as evidence if the county 68.15 assessor does not comply with the provisions in this paragraph. 68.16 The petition shall be dismissed if the petitioner does not 68.17 comply with the provisions in this paragraph. 68.18 [EFFECTIVE DATE.] This section is effective for petitions 68.19 filed on or after July 1, 2003. 68.20 Sec. 25. Minnesota Statutes 2002, section 279.01, 68.21 subdivision 1, is amended to read: 68.22 Subdivision 1. [DUE DATES; PENALTIES.] Except as provided 68.23 insubdivision 3 or 4this section, on May 16 or 21 days after 68.24 the postmark date on the envelope containing the property tax 68.25 statement, whichever is later, a penalty shall accrue and 68.26 thereafter be charged upon all unpaid taxes on real estate on 68.27 the current lists in the hands of the county treasurer. The 68.28 penalty shall be at a rate of two percent on homestead property 68.29 until May 31 and four percent on June 1. The penalty on 68.30 nonhomestead property shall be at a rate of four percent until 68.31 May 31 and eight percent on June 1. This penalty shall not 68.32 accrue until June 1 of each year, or 21 days after the postmark 68.33 date on the envelope containing the property tax statements, 68.34 whichever is later, on commercial use real property used for 68.35 seasonal residential recreational purposes and classified as 68.36 class 1c or 4c, and on other commercial use real property 69.1 classified as class 3a, provided that over 60 percent of the 69.2 gross income earned by the enterprise on the class 3a property 69.3 is earned during the months of May, June, July, and August. Any 69.4 property owner of such class 3a property who pays the first half 69.5 of the tax due on the property after May 15 and before June 1, 69.6 or 21 days after the postmark date on the envelope containing 69.7 the property tax statement, whichever is later, shall attach an 69.8 affidavit to the payment attesting to compliance with the income 69.9 provision of this subdivision. Thereafter, for both homestead 69.10 and nonhomestead property, on the first day of each month 69.11 beginning July 1, up to and including October 1 following, an 69.12 additional penalty of one percent for each month shall accrue 69.13 and be charged on all such unpaid taxes provided that if the due 69.14 date was extended beyond May 15 as the result of any delay in 69.15 mailing property tax statements no additional penalty shall 69.16 accrue if the tax is paid by the extended due date. If the tax 69.17 is not paid by the extended due date, then all penalties that 69.18 would have accrued if the due date had been May 15 shall be 69.19 charged. When the taxes against any tract or lot exceed $50, 69.20 one-half thereof may be paid prior to May 16 or 21 days after 69.21 the postmark date on the envelope containing the property tax 69.22 statement, whichever is later; and, if so paid, no penalty shall 69.23 attach; the remaining one-half shall be paid at any time prior 69.24 to October 16 following, without penalty; but, if not so paid, 69.25 then a penalty of two percent shall accrue thereon for homestead 69.26 property and a penalty of four percent on nonhomestead 69.27 property. Thereafter, for homestead property, on the first day 69.28 of November an additional penalty of four percent shall accrue 69.29 and on the first day of December following, an additional 69.30 penalty of two percent shall accrue and be charged on all such 69.31 unpaid taxes. Thereafter, for nonhomestead property, on the 69.32 first day of November and December following, an additional 69.33 penalty of four percent for each month shall accrue and be 69.34 charged on all such unpaid taxes. If one-half of such taxes 69.35 shall not be paid prior to May 16 or 21 days after the postmark 69.36 date on the envelope containing the property tax statement, 70.1 whichever is later, the same may be paid at any time prior to 70.2 October 16, with accrued penalties to the date of payment added, 70.3 and thereupon no penalty shall attach to the remaining one-half 70.4 until October 16 following. 70.5 This section applies to payment of personal property taxes 70.6 assessed against improvements to leased property, except as 70.7 provided by section 277.01, subdivision 3. 70.8 A county may provide by resolution that in the case of a 70.9 property owner that has multiple tracts or parcels with 70.10 aggregate taxes exceeding $50, payments may be made in 70.11 installments as provided in this subdivision. 70.12 The county treasurer may accept payments of more or less 70.13 than the exact amount of a tax installment due. If the accepted 70.14 payment is less than the amount due, payments must be applied 70.15 first to the penalty accrued for the year the payment is made. 70.16 Acceptance of partial payment of tax does not constitute a 70.17 waiver of the minimum payment required as a condition for filing 70.18 an appeal under section 278.03 or any other law, nor does it 70.19 affect the order of payment of delinquent taxes under section 70.20 280.39. 70.21 Sec. 26. Minnesota Statutes 2002, section 279.01, is 70.22 amended by adding a subdivision to read: 70.23 Subd. 5. [SEASONAL RESIDENTIAL RECREATIONAL PROPERTY USED 70.24 FOR COMMERCIAL PURPOSES.] For taxes payable in 2004 and 2005 70.25 only, in the case of class 1c property and class 4c seasonal 70.26 residential recreational property used for commercial purposes, 70.27 no penalties shall accrue to the first one-half property tax 70.28 payment as provided in this section if paid by July 15. On July 70.29 16, a penalty shall accrue and thereafter be charged upon all 70.30 unpaid taxes. On class 1c property the penalty is at a rate of 70.31 two percent until July 31, and four percent on August 1. On 70.32 class 4c seasonal residential recreational property used for 70.33 commercial purposes, the penalty is four percent until July 31 70.34 and eight percent on August 1. Thereafter, for both class 1c 70.35 and class 4c seasonal residential recreational property used for 70.36 commercial purposes, on the first day of September and on the 71.1 first day of October, an additional penalty of one percent shall 71.2 accrue and be charged on unpaid taxes. The remaining one-half 71.3 property taxes must be paid and penalties accrue as provided in 71.4 subdivision 1. 71.5 Sec. 27. Minnesota Statutes 2002, section 290A.03, 71.6 subdivision 8, is amended to read: 71.7 Subd. 8. [CLAIMANT.] (a) "Claimant" means a person, other 71.8 than a dependent, as defined under sections 151 and 152 of the 71.9 Internal Revenue Code disregarding section 152(b)(3) of the 71.10 Internal Revenue Code, who filed a claim authorized by this 71.11 chapter and who was a resident of this state as provided in 71.12 chapter 290 during the calendar year for which the claim for 71.13 relief was filed. 71.14 (b) In the case of a claim relating to rent constituting 71.15 property taxes, the claimant shall have resided in a rented or 71.16 leased unit on which ad valorem taxes or payments made in lieu 71.17 of ad valorem taxes, including payments of special assessments 71.18 imposed in lieu of ad valorem taxes, are payable at some time 71.19 during the calendar year covered by the claim. 71.20 (c) "Claimant" shall not include a resident of a nursing 71.21 home, intermediate care facility,orlong-term residential 71.22 facility, or a facility that accepts group residential housing 71.23 payments whose rent constituting property taxes is paid pursuant 71.24 to the supplemental security income program under title XVI of 71.25 the Social Security Act, the Minnesota supplemental aid program 71.26 under sections 256D.35 to 256D.54, the medical assistance 71.27 program pursuant to title XIX of the Social Security Act,orthe 71.28 general assistance medical care program pursuant to section 71.29 256D.03, subdivision 3, or the group residential housing program 71.30 under chapter 256I. 71.31 If only a portion of the rent constituting property taxes is 71.32 paid by these programs, the resident shall be a claimant for 71.33 purposes of this chapter, but the refund calculated pursuant to 71.34 section 290A.04 shall be multiplied by a fraction, the numerator 71.35 of which is income as defined in subdivision 3, paragraphs (1) 71.36 and (2), reduced by the total amount of income from the above 72.1 sources other than vendor payments under the medical assistance 72.2 program or the general assistance medical care program and the 72.3 denominator of which is income as defined in subdivision 3, 72.4 paragraphs (1) and (2), plus vendor payments under the medical 72.5 assistance program or the general assistance medical care 72.6 program, to determine the allowable refund pursuant to this 72.7 chapter. 72.8 (d) Notwithstanding paragraph (c), if the claimant was a 72.9 resident of the nursing home, intermediate care facilityor, 72.10 long-term residential facility, or facility for which the rent 72.11 was paid for the claimant by the group residential housing 72.12 program for only a portion of the calendar year covered by the 72.13 claim, the claimant may compute rent constituting property taxes 72.14 by disregarding the rent constituting property taxes from the 72.15 nursing home, intermediate care facility,orlong-term72.16residentialfacility and use only that amount of rent 72.17 constituting property taxes or property taxes payable relating 72.18 to that portion of the year when the claimant was not in the 72.19 facility. The claimant's household income is the income for the 72.20 entire calendar year covered by the claim. 72.21 (e) In the case of a claim for rent constituting property 72.22 taxes of a part-year Minnesota resident, the income and rental 72.23 reflected in this computation shall be for the period of 72.24 Minnesota residency only. Any rental expenses paid which may be 72.25 reflected in arriving at federal adjusted gross income cannot be 72.26 utilized for this computation. When two individuals of a 72.27 household are able to meet the qualifications for a claimant, 72.28 they may determine among them as to who the claimant shall be. 72.29 If they are unable to agree, the matter shall be referred to the 72.30 commissioner of revenue whose decision shall be final. If a 72.31 homestead property owner was a part-year Minnesota resident, the 72.32 income reflected in the computation made pursuant to section 72.33 290A.04 shall be for the entire calendar year, including income 72.34 not assignable to Minnesota. 72.35 (f) If a homestead is occupied by two or more renters, who 72.36 are not husband and wife, the rent shall be deemed to be paid 73.1 equally by each, and separate claims shall be filed by each. 73.2 The income of each shall be each renter's household income for 73.3 purposes of computing the amount of credit to be allowed. 73.4 [EFFECTIVE DATE.] This section is effective for claims 73.5 based on rent paid in 2003 and thereafter. 73.6 Sec. 28. Laws 1989, chapter 211, section 8, subdivision 2, 73.7 as amended by Laws 2002, chapter 390, section 24, is amended to 73.8 read: 73.9 Subd. 2. [OPERATION OF DISTRICT.] (a) A hospital district 73.10 created under this section shall be subject to Minnesota 73.11 Statutes, sections 447.32, except subdivision 1, to 447.41, and 73.12 except as provided otherwise in this act. 73.13 (b) A hospital district created under this section is a 73.14 municipal corporation and a political subdivision of the state. 73.15 [EFFECTIVE DATE.] This section is effective upon compliance 73.16 with Minnesota Statutes, section 645.021, subdivision 3, by the 73.17 governing body of the Cook county hospital district. 73.18 Sec. 29. Laws 1989, chapter 211, section 8, subdivision 4, 73.19 as amended by Laws 2002, chapter 390, section 24, is amended to 73.20 read: 73.21 Subd. 4. [TAX LEVY.] The tax levied under Minnesota 73.22 Statutes, section 447.34, shall not exceed $300,000in any year,73.23and itsfor taxes levied in 2002. For taxes levied in 2003 and 73.24 subsequent years, the tax must not exceed the lesser of: 73.25 (1) the product of the hospital district's property tax 73.26 levy limitation for the previous year determined under this 73.27 subdivision, multiplied by 103 percent; or 73.28 (2) the product of the hospital district's property tax 73.29 levy limitation for the previous year determined under this 73.30 subdivision multiplied by the ratio of the most recent available 73.31 annual medical care expenditure category of the revised Consumer 73.32 Price Index, U.S. citywide average, for all urban consumers 73.33 prepared by the United States Department of Labor to the same 73.34 annual index for the previous year. 73.35 The proceeds of the tax may be used for all purposes of the 73.36 hospital district. 74.1 [EFFECTIVE DATE.] This section is effective upon compliance 74.2 with Minnesota Statutes, section 645.021, subdivision 3, by the 74.3 governing body of the Cook county hospital district. 74.4 Sec. 30. Laws 2001, First Special Session chapter 5, 74.5 article 3, section 96, is amended to read: 74.6 Sec. 96. [REPEALER.] 74.7 (a) Minnesota Statutes 2000, sections 273.13, subdivision 74.8 24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e; 74.9 473.446, subdivisions 1a and 1b; and 473.3915, are repealed 74.10 effective for taxes levied in 2001, payable in 2002, and 74.11 thereafter and aids or credits payable in 2002 and thereafter. 74.12 (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 74.13 702, section 16; Laws 1992, chapter 511, article 2, section 52, 74.14 as amended by Laws 1997, chapter 231, article 2, section 50, and 74.15 Laws 1998, chapter 389, article 3, section 32; Laws 1996, 74.16 chapter 471, article 8, section 45; Laws 1999, chapter 243, 74.17 article 6, section 14; Laws 1999, chapter 243, article 6, 74.18 section 15; and Laws 2000, chapter 490, article 6, section 17, 74.19 are repealed effective for taxes levied in 2001, payable in 2002 74.20 and thereafter. 74.21 (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 74.22 126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 74.23 effective July 1, 2001. 74.24(d) Minnesota Statutes 2000, section 273.126 and 462A.071,74.25are repealed effective for property taxes payable in 2004, and74.26any agreement entered into pursuant to the provisions of those74.27sections expires, effective January 1, 2004, regardless of the74.28term of the agreement.74.29 Sec. 31. Laws 2002, chapter 377, article 3, section 15, 74.30 the effective date, is amended to read: 74.31 [EFFECTIVE DATE.] This section is effective for sales made 74.32 after August 31, 2002, and on or before December 31,20032004. 74.33 Sec. 32. [PROPERTY TAX ASSESSMENT OF LOW-INCOME HOUSING, 74.34 RULES.] 74.35 The commissioner of revenue shall develop guidelines for 74.36 use by assessors in calculating the restricted use value of 75.1 class 4d property under Minnesota Statutes, section 273.11, 75.2 subdivision 22. 75.3 [EFFECTIVE DATE.] This section is effective the day 75.4 following final enactment. 75.5 Sec. 33. [COMMERCIAL-INDUSTRIAL LAND VALUE TAXATION; LOCAL 75.6 OPTION.] 75.7 The governing body of any municipality that has a 75.8 population in excess of 70,000, or any municipality located in 75.9 the taconite tax relief area defined in Minnesota Statutes, 75.10 section 273.134, may by resolution adopt a system of valuing 75.11 commercial-industrial property in its jurisdiction that is based 75.12 on the value of the land, not including improvements. The 75.13 governing body may make the election under this section if it 75.14 finds that implementation of the land value system will enhance 75.15 economic development in the city. An election under this 75.16 section must be made by December 31, 2003. If any municipality 75.17 makes the election, it must notify the commissioner of revenue 75.18 of the election and the legislature must enact during the 2004 75.19 legislative session the legislation necessary to implement the 75.20 system for taxes levied in 2004, payable in 2005, and thereafter. 75.21 Sec. 34. [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 75.22 WATER.] 75.23 Pursuant to Minnesota Statutes, section 103G.265, 75.24 subdivision 3, the legislature approves the consumptive use 75.25 under a permit of more than 2,000,000 gallons per day average in 75.26 a 30-day period in Rosemount, in connection with a gas fueled 75.27 combined cycle electric generating facility, subject to the 75.28 commissioner of natural resources making a determination that 75.29 the water remaining in the basin of origin will be adequate to 75.30 meet the basin's need for water and approval by the commissioner 75.31 of natural resources of all applicable permits. 75.32 [EFFECTIVE DATE.] This section is effective the day 75.33 following final enactment. 75.34 Sec. 35. [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 75.35 WATER.] 75.36 Pursuant to Minnesota Statutes, section 103G.265, 76.1 subdivision 3, the legislature approves the consumptive use 76.2 under a permit of more than 2,000,000 gallons per day average in 76.3 a 30-day period in Mankato, in connection with a gas fueled 76.4 combined cycle electric generating facility, subject to the 76.5 commissioner of natural resources making a determination that 76.6 the water remaining in the basin of origin will be adequate to 76.7 meet the basin's need for water and approval by the commissioner 76.8 of natural resources of all applicable permits. 76.9 [EFFECTIVE DATE.] This section is effective the day 76.10 following final enactment. 76.11 ARTICLE 4 76.12 LOCAL DEVELOPMENT 76.13 Section 1. [469.1083] [COUNTY ECONOMIC DEVELOPMENT 76.14 AUTHORITY; METROPOLITAN AREA.] 76.15 Subdivision 1. [ECONOMIC DEVELOPMENT POWERS AND DUTIES.] A 76.16 county located in the metropolitan area may, by resolution of 76.17 the county board, grant an existing county housing and 76.18 redevelopment authority any of the powers and duties of an 76.19 economic development authority under sections 469.090 to 76.20 469.093, 469.095 to 469.106, 469.108, and 469.1081. For the 76.21 purposes of this section, a county community development 76.22 authority is a county housing and redevelopment authority that 76.23 has been granted economic development authority powers and 76.24 duties. In applying sections 469.090 to 469.093, 469.095 to 76.25 469.106, 469.108, and 469.1081 to a county community development 76.26 authority, the county is considered to be the city and the 76.27 county board is considered to be the city council. 76.28 Subd. 2. [RELATION TO LOCAL AUTHORITIES.] Nothing in this 76.29 section shall alter or impair the powers or duties of a city, a 76.30 municipal housing and redevelopment authority, or a municipal 76.31 economic development authority. 76.32 Subd. 3. [LOCAL APPROVAL.] If an economic development 76.33 project is constructed in the county under this section and the 76.34 project is within the boundaries of a home rule charter or 76.35 statutory city, the location of the project must be approved by 76.36 the governing body of the city. 77.1 [EFFECTIVE DATE.] This section is effective the day 77.2 following final enactment and applies in the counties of Anoka, 77.3 Hennepin, Ramsey, and Washington. 77.4 Sec. 2. Minnesota Statutes 2002, section 469.169, is 77.5 amended by adding a subdivision to read: 77.6 Subd. 16. [ADDITIONAL BORDER CITY ALLOCATIONS.] (a) In 77.7 addition to tax reductions authorized in subdivisions 7 to 15, 77.8 the commissioner shall allocate $750,000 for tax reductions to 77.9 border city enterprise zones in cities located on the western 77.10 border of the state. The commissioner shall make allocations to 77.11 zones in cities on the western border on a per capita basis. 77.12 Allocations made under this subdivision may be used for tax 77.13 reductions as provided in section 469.171, or for other offsets 77.14 of taxes imposed on or remitted by businesses located in the 77.15 enterprise zone, but only if the municipality determines that 77.16 the granting of the tax reduction or offset is necessary in 77.17 order to retain a business within or attract a business to the 77.18 zone. Any portion of the allocation provided in this paragraph 77.19 may alternatively be used for tax reductions under section 77.20 469.1732 or 469.1734. 77.21 (b) The commissioner shall allocate $750,000 for tax 77.22 reductions under section 469.1732 or 469.1734 to cities with 77.23 border city enterprise zones located on the western border of 77.24 the state. The commissioner shall allocate this amount among 77.25 the cities on a per capita basis. Any portion of the allocation 77.26 provided in this paragraph may alternatively be used for tax 77.27 reductions as provided in section 469.171. 77.28 [EFFECTIVE DATE.] This section is effective the day 77.29 following final enactment. 77.30 Sec. 3. Minnesota Statutes 2002, section 469.1731, 77.31 subdivision 3, is amended to read: 77.32 Subd. 3. [FILING.] The city must file a copy of the 77.33 resolution and development plan with the commissioner of trade 77.34 and economic development. The designation takes effectfor the77.35first calendar year that begins more than 9030 days after the 77.36 filing. 78.1 [EFFECTIVE DATE.] This section is effective the day 78.2 following final enactment. 78.3 Sec. 4. Minnesota Statutes 2002, section 469.174, 78.4 subdivision 10, is amended to read: 78.5 Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 78.6 district" means a type of tax increment financing district 78.7 consisting of a project, or portions of a project, within which 78.8 the authority finds by resolution that one or more of the 78.9 following conditions, reasonably distributed throughout the 78.10 district, exists: 78.11 (1) parcels consisting of 70 percent of the area of the 78.12 district are occupied by buildings, streets, utilities, paved or 78.13 gravel parking lots, or other similar structures and more than 78.14 50 percent of the buildings, not including outbuildings, are 78.15 structurally substandard to a degree requiring substantial 78.16 renovation or clearance;or78.17 (2) the property consists of vacant, unused, underused, 78.18 inappropriately used, or infrequently used railyards, rail 78.19 storage facilities, or excessive or vacated railroad 78.20 rights-of-way;or78.21 (3) tank facilities, or property whose immediately previous 78.22 use was for tank facilities, as defined in section 115C.02, 78.23 subdivision 15, if the tank facilities: 78.24 (i) have or had a capacity of more than 1,000,000 gallons; 78.25 (ii) are located adjacent to rail facilities; and 78.26 (iii) have been removed or are unused, underused, 78.27 inappropriately used, or infrequently used; or 78.28 (4) a qualifying disaster area, as defined in subdivision 78.29 10b. 78.30 (b) For purposes of this subdivision, "structurally 78.31 substandard" shall mean containing defects in structural 78.32 elements or a combination of deficiencies in essential utilities 78.33 and facilities, light and ventilation, fire protection including 78.34 adequate egress, layout and condition of interior partitions, or 78.35 similar factors, which defects or deficiencies are of sufficient 78.36 total significance to justify substantial renovation or 79.1 clearance. 79.2 (c) A building is not structurally substandard if it is in 79.3 compliance with the building code applicable to new buildings or 79.4 could be modified to satisfy the building code at a cost of less 79.5 than 15 percent of the cost of constructing a new structure of 79.6 the same square footage and type on the site. The municipality 79.7 may find that a building is not disqualified as structurally 79.8 substandard under the preceding sentence on the basis of 79.9 reasonably available evidence, such as the size, type, and age 79.10 of the building, the average cost of plumbing, electrical, or 79.11 structural repairs, or other similar reliable evidence. The 79.12 municipality may not make such a determination without an 79.13 interior inspection of the property, but need not have an 79.14 independent, expert appraisal prepared of the cost of repair and 79.15 rehabilitation of the building. An interior inspection of the 79.16 property is not required, if the municipality finds that (1) the 79.17 municipality or authority is unable to gain access to the 79.18 property after using its best efforts to obtain permission from 79.19 the party that owns or controls the property; and (2) the 79.20 evidence otherwise supports a reasonable conclusion that the 79.21 building is structurally substandard. Items of evidence that 79.22 support such a conclusion include recent fire or police 79.23 inspections, on-site property tax appraisals or housing 79.24 inspections, exterior evidence of deterioration, or other 79.25 similar reliable evidence. Written documentation of the 79.26 findings and reasons why an interior inspection was not 79.27 conducted must be made and retained under section 469.175, 79.28 subdivision 3, clause (1). 79.29 (d) A parcel is deemed to be occupied by a structurally 79.30 substandard building for purposes of the finding under paragraph 79.31 (a) if all of the following conditions are met: 79.32 (1) the parcel was occupied by a substandard building 79.33 within three years of the filing of the request for 79.34 certification of the parcel as part of the district with the 79.35 county auditor; 79.36 (2) the substandard building was demolished or removed by 80.1 the authority or the demolition or removal was financed by the 80.2 authority or was done by a developer under a development 80.3 agreement with the authority; 80.4 (3) the authority found by resolution before the demolition 80.5 or removal that the parcel was occupied by a structurally 80.6 substandard building and that after demolition and clearance the 80.7 authority intended to include the parcel within a district; and 80.8 (4) upon filing the request for certification of the tax 80.9 capacity of the parcel as part of a district, the authority 80.10 notifies the county auditor that the original tax capacity of 80.11 the parcel must be adjusted as provided by section 469.177, 80.12 subdivision 1, paragraph (h). 80.13 (e) For purposes of this subdivision, a parcel is not 80.14 occupied by buildings, streets, utilities, paved or gravel 80.15 parking lots, or other similar structures unless 15 percent of 80.16 the area of the parcel contains buildings, streets, utilities, 80.17 paved or gravel parking lots, or other similar structures. 80.18 (f) For districts consisting of two or more noncontiguous 80.19 areas, each area must qualify as a redevelopment district under 80.20 paragraph (a) to be included in the district, and the entire 80.21 area of the district must satisfy paragraph (a). 80.22 [EFFECTIVE DATE.] This section is effective for districts 80.23 for which the request for certification is made after the day 80.24 following final enactment. 80.25 Sec. 5. Minnesota Statutes 2002, section 469.174, is 80.26 amended by adding a subdivision to read: 80.27 Subd. 10b. [QUALIFIED DISASTER AREA.] A "qualified 80.28 disaster area" is an area that meets the following requirements: 80.29 (1) parcels consisting of 70 percent of the area of the 80.30 district were occupied by buildings, streets, utilities, paved 80.31 or gravel parking lots, or other similar structures immediately 80.32 before the disaster or emergency; 80.33 (2) the area of the district was subject to a disaster or 80.34 emergency, as defined in section 273.123, subdivision 1, within 80.35 the 18-month period ending on the day the request for 80.36 certification of the district is made; and 81.1 (3) 50 percent or more of the buildings in the area have 81.2 suffered substantial damage as a result of the disaster or 81.3 emergency. 81.4 [EFFECTIVE DATE.] This section is effective for districts 81.5 for which the request for certification is made after the day 81.6 following final enactment. 81.7 Sec. 6. Minnesota Statutes 2002, section 469.174, is 81.8 amended by adding a subdivision to read: 81.9 Subd. 28. [QUALIFIED HOUSING DISTRICT.] "Qualified housing 81.10 district" means: 81.11 (1) a housing district for a residential rental project or 81.12 projects in which the only properties receiving assistance from 81.13 revenues derived from tax increments from the district meet all 81.14 of the requirements for a low-income housing credit under 81.15 section 42 of the Internal Revenue Code of 1986, as amended 81.16 through December 31, 1992, regardless of whether the project 81.17 actually receives a low-income housing credit; or 81.18 (2) a housing district for a single-family homeownership 81.19 project or projects, if 95 percent or more of the homes 81.20 receiving assistance from tax increments from the district are 81.21 purchased by qualified purchasers. A qualified purchaser means 81.22 the first purchaser of a home after the tax increment assistance 81.23 is provided whose income is at or below 100 percent of the 81.24 median gross income for a family of the same size as the 81.25 purchaser. Median gross income is the greater of (i) area 81.26 median gross income, or (ii) the statewide median gross income, 81.27 as determined by the secretary of housing and urban development. 81.28 Sec. 7. Minnesota Statutes 2002, section 469.176, 81.29 subdivision 7, is amended to read: 81.30 Subd. 7. [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The 81.31 authority may request inclusion in a tax increment financing 81.32 district and the county auditor may certify the original tax 81.33 capacity of a parcel or a part of a parcel that qualified under 81.34 the provisions of section 273.111 or 273.112 or chapter 473H for 81.35 taxes payable in any of the five calendar years before the 81.36 filing of the request for certification only for: 82.1 (1) a district in which 85 percent or more of the planned 82.2 buildings and facilities (determined on the basis of square 82.3 footage) are a qualified manufacturing facility or a qualified 82.4 distribution facility or a combination of both; or 82.5 (2) a qualified housing districtas defined in section82.6273.1399, subdivision 1. 82.7 (b)(1) A distribution facility means buildings and other 82.8 improvements to real property that are used to conduct 82.9 activities in at least each of the following categories: 82.10 (i) to store or warehouse tangible personal property; 82.11 (ii) to take orders for shipment, mailing, or delivery; 82.12 (iii) to prepare personal property for shipment, mailing, 82.13 or delivery; and 82.14 (iv) to ship, mail, or deliver property. 82.15 (2) A manufacturing facility includes space used for 82.16 manufacturing or producing tangible personal property, including 82.17 processing resulting in the change in condition of the property, 82.18 and space necessary for and related to the manufacturing 82.19 activities. 82.20 (3) To be a qualified facility, the owner or operator of a 82.21 manufacturing or distribution facility must agree to pay and pay 82.22 90 percent or more of the employees of the facility at a rate 82.23 equal to or greater than 160 percent of the federal minimum wage 82.24 for individuals over the age of 20. 82.25 Sec. 8. Minnesota Statutes 2002, section 469.1761, is 82.26 amended by adding a subdivision to read: 82.27 Subd. 3a. [MIXED-INCOME OCCUPANCY PROJECTS.] (a) 82.28 Notwithstanding the income requirements in section 469.174, 82.29 subdivision 11, or subdivisions 2 and 3, an authority may create 82.30 housing districts for developments that contain both 82.31 owner-occupied and residential rental units for mixed-income 82.32 occupancy. Such a district consists of a project, or a portion 82.33 of a project, intended for occupancy, in part, by persons of low 82.34 and moderate income as defined in chapter 462A, Title II, of the 82.35 National Housing Act of 1934; the National Housing Act of 1959; 82.36 the United States Housing Act of 1937, as amended; Title V of 83.1 the Housing Act of 1949, as amended; any other similar present 83.2 or future federal, state, or municipal legislation, or the 83.3 regulations promulgated under any of those acts, as further set 83.4 forth in this section. Twenty percent of the units in the 83.5 development in the housing district must be occupied by 83.6 individuals whose family income is equal to or less than 50 83.7 percent of area median gross income and an additional 60 percent 83.8 of the units in the development in the housing district must be 83.9 occupied by individuals whose family income is equal to or less 83.10 than 115 percent of area median gross income. Twenty percent of 83.11 the units in the development in the housing district shall not 83.12 be subject to any income limitations. 83.13 (b) For purposes of this subdivision, "family income" means 83.14 the median gross income for the area as determined under section 83.15 42 of the Internal Revenue Code of 1986, as amended. The income 83.16 requirements of this subdivision shall be deemed to be satisfied 83.17 if the sum of qualified owner-occupied units and qualified 83.18 residential rental units equals the required total number of 83.19 qualified units. Owner-occupied units must be initially 83.20 purchased and occupied by individuals whose family income 83.21 satisfies the income requirements of this subdivision. For 83.22 residential rental property, the income requirements of this 83.23 subdivision apply for the duration of the tax increment district. 83.24 (c) The development in the housing district, but not the 83.25 project, does not qualify under this subdivision if the fair 83.26 market value of the improvements that are constructed for 83.27 commercial uses or for uses other than owner-occupied and rental 83.28 mixed-income housing consists of more than 20 percent of the 83.29 total fair market value of the planned improvements in the 83.30 development plan or agreement. The fair market value of the 83.31 improvements may be determined using the cost of construction, 83.32 capitalized income, or other appropriate method of estimating 83.33 market value. 83.34 [EFFECTIVE DATE.] This section is effective for districts 83.35 for which certification is requested after July 31, 2003. 83.36 Sec. 9. Minnesota Statutes 2002, section 469.1763, 84.1 subdivision 2, is amended to read: 84.2 Subd. 2. [EXPENDITURES OUTSIDE DISTRICT.] (a) For each tax 84.3 increment financing district, an amount equal to at least 75 84.4 percent of the revenue derived from tax increments paid by 84.5 properties in the district must be expended on activities in the 84.6 district or to pay bonds, to the extent that the proceeds of the 84.7 bonds were used to finance activities in the district or to pay, 84.8 or secure payment of, debt service on credit enhanced bonds. 84.9 For districts, other than redevelopment districts for which the 84.10 request for certification was made after June 30, 1995, the 84.11 in-district percentage for purposes of the preceding sentence is 84.12 80 percent. Not more than 25 percent of the revenue derived 84.13 from tax increments paid by properties in the district may be 84.14 expended, through a development fund or otherwise, on activities 84.15 outside of the district but within the defined geographic area 84.16 of the project except to pay, or secure payment of, debt service 84.17 on credit enhanced bonds. For districts, other than 84.18 redevelopment districts for which the request for certification 84.19 was made after June 30, 1995, the pooling percentage for 84.20 purposes of the preceding sentence is 20 percent. The revenue 84.21 derived from tax increments for the district that are expended 84.22 on costs under section 469.176, subdivision 4h, paragraph (b), 84.23 may be deducted first before calculating the percentages that 84.24 must be expended within and without the district. 84.25 (b) In the case of a housing district, a housing project, 84.26 as defined in section 469.174, subdivision 11, is an activity in 84.27 the district. 84.28 (c) All administrative expenses are for activities outside 84.29 of the district, except that if the only expenses for activities 84.30 outside of the district under this subdivision are for the 84.31 purposes described in paragraph (d), administrative expenses 84.32 will be considered as expenditures for activities in the 84.33 district. 84.34 (d) The authority may elect, in the tax increment financing 84.35 plan for the district, to increase by up to ten percentage 84.36 points the permitted amount of expenditures for activities 85.1 located outside the geographic area of the district under 85.2 paragraph (a). As permitted by section 469.176, subdivision 4k, 85.3 the expenditures, including the permitted expenditures under 85.4 paragraph (a), need not be made within the geographic area of 85.5 the project. To qualify for the increase under this paragraph, 85.6 the expenditures must: 85.7 (1) be used exclusively to assist housing that meets the 85.8 requirement for a qualified low-income building, as that term is 85.9 used in section 42 of the Internal Revenue Code; 85.10 (2) not exceed the qualified basis of the housing, as 85.11 defined under section 42(c) of the Internal Revenue Code, less 85.12 the amount of any credit allowed under section 42 of the 85.13 Internal Revenue Code; and 85.14 (3) be used to: 85.15 (i) acquire and prepare the site of the housing; 85.16 (ii) acquire, construct, or rehabilitate the housing; or 85.17 (iii) make public improvements directly related to the 85.18 housing. 85.19 Sec. 10. Minnesota Statutes 2002, section 469.177, 85.20 subdivision 1, is amended to read: 85.21 Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or 85.22 after adoption of a tax increment financing plan, the auditor of 85.23 any county in which the district is situated shall, upon request 85.24 of the authority, certify the original net tax capacity of the 85.25 tax increment financing district and that portion of the 85.26 district overlying any subdistrict as described in the tax 85.27 increment financing plan and shall certify in each year 85.28 thereafter the amount by which the original net tax capacity has 85.29 increased or decreased as a result of a change in tax exempt 85.30 status of property within the district and any subdistrict, 85.31 reduction or enlargement of the district or changes pursuant to 85.32 subdivision 4. 85.33 (b) For districts approved under section 469.175, 85.34 subdivision 3, or parcels added to existing districts after May 85.35 1, 1988, if the classification under section 273.13 of property 85.36 located in a district changes to a classification that has a 86.1 different assessment ratio, the original net tax capacity of 86.2 that property must be redetermined at the time when its use is 86.3 changed as if the property had originally been classified in the 86.4 same class in which it is classified after its use is changed. 86.5 (c) The amount to be added to the original net tax capacity 86.6 of the district as a result of previously tax exempt real 86.7 property within the district becoming taxable equals the net tax 86.8 capacity of the real property as most recently assessed pursuant 86.9 to section 273.18 or, if that assessment was made more than one 86.10 year prior to the date of title transfer rendering the property 86.11 taxable, the net tax capacity assessed by the assessor at the 86.12 time of the transfer. If improvements are made to tax exempt 86.13 property after certification of the district and before the 86.14 parcel becomes taxable, the assessor shall, at the request of 86.15 the authority, separately assess the estimated market value of 86.16 the improvements. If the property becomes taxable, the county 86.17 auditor shall add to original net tax capacity, the net tax 86.18 capacity of the parcel, excluding the separately assessed 86.19 improvements. If substantial taxable improvements were made to 86.20 a parcel after certification of the district and if the property 86.21 later becomes tax exempt, in whole or part, as a result of the 86.22 authority acquiring the property through foreclosure or exercise 86.23 of remedies under a lease or other revenue agreement or as a 86.24 result of tax forfeiture, the amount to be added to the original 86.25 net tax capacity of the district as a result of the property 86.26 again becoming taxable is the amount of the parcel's value that 86.27 was included in original net tax capacity when the parcel was 86.28 first certified. The amount to be added to the original net tax 86.29 capacity of the district as a result of enlargements equals the 86.30 net tax capacity of the added real property as most recently 86.31 certified by the commissioner of revenue as of the date of 86.32 modification of the tax increment financing plan pursuant to 86.33 section 469.175, subdivision 4. 86.34 (d) For districts approved under section 469.175, 86.35 subdivision 3, or parcels added to existing districts after May 86.36 1, 1988, if the net tax capacity of a property increases because 87.1 the property no longer qualifies under the Minnesota 87.2 Agricultural Property Tax Law, section 273.111; the Minnesota 87.3 Open Space Property Tax Law, section 273.112; or the 87.4 Metropolitan Agricultural Preserves Act, chapter 473H, or 87.5 because platted, unimproved property is improved or three years 87.6 pass after approval of the plat under section 273.11, 87.7 subdivision 1, the increase in net tax capacity must be added to 87.8 the original net tax capacity. 87.9 (e) The amount to be subtracted from the original net tax 87.10 capacity of the district as a result of previously taxable real 87.11 property within the district becoming tax exempt, or a reduction 87.12 in the geographic area of the district, shall be the amount of 87.13 original net tax capacity initially attributed to the property 87.14 becoming tax exempt or being removed from the district. If the 87.15 net tax capacity of property located within the tax increment 87.16 financing district is reduced by reason of a court-ordered 87.17 abatement, stipulation agreement, voluntary abatement made by 87.18 the assessor or auditor or by order of the commissioner of 87.19 revenue, the reduction shall be applied to the original net tax 87.20 capacity of the district when the property upon which the 87.21 abatement is made has not been improved since the date of 87.22 certification of the district and to the captured net tax 87.23 capacity of the district in each year thereafter when the 87.24 abatement relates to improvements made after the date of 87.25 certification. The county auditor may specify reasonable form 87.26 and content of the request for certification of the authority 87.27 and any modification thereof pursuant to section 469.175, 87.28 subdivision 4. 87.29 (f) If a parcel of property contained a substandard 87.30 building that was demolished or removed and if the authority 87.31 elects to treat the parcel as occupied by a substandard building 87.32 under section 469.174, subdivision 10, paragraph (b), the 87.33 auditor shall certify the original net tax capacity of the 87.34 parcel using the greater of (1) the current net tax capacity of 87.35 the parcel, or (2) the estimated market value of the parcel for 87.36 the year in which the building was demolished or removed, but 88.1 applying the class rates for the current year. 88.2 (g) For a redevelopment district qualifying under section 88.3 469.174, subdivision 10, paragraph (a), clause (4), as a 88.4 qualified disaster area, the auditor shall certify the value of 88.5 the land as the original tax capacity for any parcel in the 88.6 district that contains a building that suffered substantial 88.7 damage as a result of the disaster or emergency. 88.8 [EFFECTIVE DATE.] This section is effective for districts 88.9 for which the request for certification is made after the day 88.10 following final enactment. 88.11 Sec. 11. Minnesota Statutes 2002, section 469.1792, is 88.12 amended to read: 88.13 469.1792 [SPECIALDEFICITAUTHORITY.] 88.14 Subdivision 1. [SCOPE.] This section applies only to an 88.15 authority with a preexisting district for which: 88.16 (1) the increments from the district were insufficient to 88.17 pay preexisting obligations as a result of the class rate 88.18 changes or the elimination of the state-determined general 88.19 education property tax levy under this act, or both; or 88.20 (2)(i) the development authority has a binding contract 88.21 with a person requiring the authority to pay to the person an 88.22 amount that may not exceed the increment from the district or a 88.23 specific development within the district; and 88.24 (ii) the authority is unable to pay the full amount under 88.25 the contract from the pledged increments or other increments 88.26 from the district that would have been due if the class rate 88.27 changes or elimination of the state-determined general education 88.28 property tax levy or both had not been made under Laws 2001, 88.29 First Special Session chapter 5; 88.30 (3) the authority amends its tax increment financing plan 88.31 to establish an affordable housing account to which increments 88.32 are pledged; or 88.33 (4) the authority amends its tax increment financing plan 88.34 to establish a hazardous substance, pollutant, or contaminant 88.35 remediation account to which increments are pledged. 88.36 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 89.1 the following terms have the meanings given. 89.2 (b) "Affordable housing account" means an account in which 89.3 increment is deposited solely for affordable housing activities 89.4 as defined in section 469.174, subdivision 11. 89.5 (c) "Hazardous substance, pollutant, or contaminant 89.6 remediation account" means an account in which increment is 89.7 deposited solely for removal or remediation activities described 89.8 in section 469.174, subdivisions 16 to 19. 89.9 (d) "Preexisting district" means a tax increment financing 89.10 district for which the request for certification was made before 89.11 August 1, 2001. 89.12(c)(e) "Preexisting obligation" means a bond or binding 89.13 contract that: 89.14 (1) was issued or approved before August 1, 2001, or was 89.15 issued pursuant to a binding contract entered into before August 89.16 1, 2001; 89.17 (2) is secured by increments from a preexisting district. 89.18 Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a 89.19 district qualifying under this section may takeeither or both89.20 any or all of the following actions for any or all of its 89.21 preexisting districts: 89.22 (1) the authority may elect that the original local tax 89.23 rate under section 469.177, subdivision 1a, does not apply to 89.24 the district;and89.25 (2) the authority may elect the fiscal disparities 89.26 contribution will be computed under section 469.177, subdivision 89.27 3, paragraph (a), regardless of the election that was made for 89.28 the district; or 89.29 (3) the authority may elect to extend the duration of the 89.30 district by up to eight additional years beyond the duration 89.31 limit on the collection of increment under section 469.176, 89.32 subdivision 1b or 1e, or a special law applicable to the 89.33 district. 89.34 (b) The authority may take action under this subdivision 89.35 only after the municipality approves the action, by resolution, 89.36 after notice and public hearing in the manner provided under 90.1 section 469.175, subdivision 2. 90.2 (c) The additional increment that may be collected as a 90.3 result of actions taken under this section and any increments 90.4 transferred to the district under section 469.1763, subdivision 90.5 6, is limited to the lesser of: 90.6 (1) the amount the authority is obligated to pay under 90.7 preexisting obligations out of the increments from the district 90.8 that result in application of this section under subdivision 1; 90.9 or 90.10 (2) an amount estimated to represent the difference between 90.11 the increment that would have been collected if the class rate 90.12 changes and elimination of the state-determined general 90.13 education property tax levy had not been made under Laws 2001, 90.14 First Special Session chapter 5, for the term of the district 90.15 under general law, and the actual increments collected for the 90.16 term of the district. 90.17 Subd. 4. [EXPENDITURES FROM AFFORDABLE HOUSING 90.18 ACCOUNTS.] Increment from an affordable housing account may be 90.19 spent by an authority anywhere within its area of operation. 90.20 Notwithstanding the definition of a project under section 90.21 469.174, increments may be spent to assist housing that meets 90.22 the requirements under section 469.1761. The limitation imposed 90.23 by section 469.1763, subdivision 2, does not apply to any 90.24 transfers of increment to the affordable housing account to the 90.25 extent that the amount transferred to the account under this 90.26 subdivision does not exceed ten percent of the revenue derived 90.27 from tax increments paid by properties in the district in the 90.28 year. 90.29 Subd. 5. [EXPENDITURES FROM HAZARDOUS SUBSTANCE, 90.30 POLLUTANT, OR CONTAMINANT REMEDIATION ACCOUNT.] Increment from a 90.31 hazardous substance, pollutant, or contaminant remediation 90.32 account may be spent by an authority anywhere within its area of 90.33 operation. Notwithstanding the definition of a project under 90.34 section 469.174, increments may be expended to remediation and 90.35 removal activities that meet the requirements of section 90.36 469.176, subdivision 4b or 4e. The limitation imposed by 91.1 section 469.1763, subdivision 2, does not apply to any transfers 91.2 of increment to the hazardous substance, pollutant, or 91.3 contaminant remediation account to the extent that the amount 91.4 transferred to the account under this subdivision does not 91.5 exceed ten percent of the revenue derived from tax increments 91.6 paid by properties in the district in the year. 91.7 [EFFECTIVE DATE.] This section is effective for actions 91.8 taken and resolutions approved after June 30, 2003. 91.9 Sec. 12. Laws 1967, chapter 558, section 1, subdivision 5, 91.10 as amended by Laws 1979, chapter 135, section 1, and Laws 1985, 91.11 chapter 98, section 2, is amended to read: 91.12 Subd. 5. Promotion of tourist, agricultural and industrial 91.13 developments. The amount to be spent annually for the purposes 91.14 of this subdivision shall not exceedone dollarfive dollars per 91.15 capita of the county's population. 91.16 [EFFECTIVE DATE.] 91.17 This section is effective the day after the governing body 91.18 of Beltrami county and its chief clerical officer timely 91.19 complete their compliance with Minnesota Statutes, section 91.20 645.021, subdivisions 2 and 3. 91.21 Sec. 13. Laws 1978, chapter 464, section 1, is amended to 91.22 read: 91.23 Section 1. [ANOKA COUNTY; HOUSING AND REDEVELOPMENT.] 91.24 Subdivision 1. There is created in the county of Anoka a 91.25 public body corporate and politic, to be known as the Anoka 91.26 county housing and redevelopment authority, having all of the 91.27 powers and duties of a housing and redevelopment authority under 91.28 the provisions of the municipal housing and redevelopment act, 91.29 Minnesota Statutes,Section 462.411 to 462.711sections 469.001 91.30 to 469.047. For the purposes of applying the provisions of the 91.31 municipal housing and redevelopment act to Anoka county, the 91.32 county has all of the powers and duties of a municipality, the 91.33 county board has all of the powers and duties of a governing 91.34 body, the chairman of the county board has all of the powers and 91.35 duties of a mayor, and the area of operation includes the area 91.36 within the territorial boundaries of the county. 92.1 Subd. 2. This section shall not limit or restrict any 92.2 existing housing and redevelopment authority or prevent a 92.3 municipality from creating an authority.The county shall not92.4exercise jurisdiction in any municipality where a municipal92.5housing and redevelopment authority is established.If a 92.6 municipal housing and redevelopment authority requests the Anoka 92.7 county housing and redevelopment authority to handle the housing 92.8 duties of the municipal authority, the Anoka county housing and 92.9 redevelopment authority shall act and have exclusive 92.10 jurisdiction for housing in the municipality. A transfer of 92.11 duties relating to housing shall not transfer any duties 92.12 relating to redevelopment. 92.13 Subd. 3. [TAXING DISTRICT.] The taxing district of the 92.14 Anoka county housing and redevelopment authority shall include 92.15 all cities and towns within Anoka county, except that a city may 92.16 limit its participation as provided in this subdivision. The 92.17 Anoka county board shall notify all cities and towns located 92.18 within Anoka county if it adopts a resolution granting economic 92.19 development authority powers to the Anoka county housing and 92.20 redevelopment authority under Minnesota Statutes, section 92.21 469.1083, subdivision 1. Within 12 months following the Anoka 92.22 county board's adoption of the resolution, a city may adopt a 92.23 resolution requesting limited participation. Such limited 92.24 participation shall be effective only if each of the following 92.25 criteria are met: 92.26 (1) the city has created a housing and redevelopment 92.27 authority prior to December 13, 1994; 92.28 (2) the city has not transferred jurisdiction for housing 92.29 to the Anoka county housing and redevelopment authority under 92.30 subdivision 2; and 92.31 (3) the Anoka county housing and redevelopment authority 92.32 levy within the city is not pledged for the repayment of bonds 92.33 or other forms of indebtedness. 92.34 The levy of the Anoka county housing and redevelopment 92.35 authority within a city with limited participation must not 92.36 exceed 40 percent of the maximum levy allowed by law. The Anoka 93.1 county housing and redevelopment authority shall not undertake a 93.2 housing project, a housing development project, a redevelopment 93.3 project, or an economic development project within the 93.4 boundaries of a city with limited participation. A city with 93.5 limited participation may, at any time, adopt a resolution 93.6 revoking its limited participation status. 93.7 [EFFECTIVE DATE.] This section is effective the day after 93.8 the governing body of Anoka county and its chief clerical 93.9 officer timely complete their compliance with Minnesota 93.10 Statutes, section 645.021, subdivisions 2 and 3. 93.11 Sec. 14. [DEFINITIONS.] 93.12 Subdivision 1. [DEFINITIONS.] For the purposes of sections 93.13 14 to 20, the terms defined in this section have the following 93.14 meanings. 93.15 Subd. 2. [LAKES AREA ECONOMIC DEVELOPMENT 93.16 AUTHORITY.] "Lakes area economic development authority" or 93.17 "authority" means the lakes area economic authority established 93.18 as provided in section 15. 93.19 Subd. 3. [PERSON.] "Person" means an individual, 93.20 partnership, corporation, cooperative, or other organization or 93.21 entity, public or private. 93.22 Subd. 4. [MEMBER.] "Member" means the city of Alexandria 93.23 or Garfield or the township of Alexandria or La Grand, or any 93.24 other municipality, the geographic area of which is included 93.25 within the jurisdiction of the authority. 93.26 Subd. 5. [MUNICIPALITY.] "Municipality" means a statutory 93.27 or home rule charter city or town located in Douglas county. 93.28 Sec. 15. [LAKES AREA ECONOMIC DEVELOPMENT AUTHORITY.] 93.29 Subdivision 1. [ESTABLISHMENT.] A lakes area economic 93.30 development authority with jurisdiction over the geographic area 93.31 of its members is established as a public corporation and 93.32 political subdivision of the state with perpetual succession and 93.33 all the rights, powers, privileges, immunities, and duties that 93.34 may be validly granted to or imposed upon a municipal 93.35 corporation, as provided in sections 14 to 20. 93.36 Subd. 2. [BOARD OF COMMISSIONERS.] The authority is 94.1 governed by a board of commissioners to be selected as follows: 94.2 the mayor of each member city, and the chair of the town board 94.3 of each member town shall appoint one commissioner, subject to 94.4 the approval of the respective city council or town board. The 94.5 terms of the commissioner are as provided in subdivision 5. 94.6 Subd. 3. [TIME LIMITS FOR SELECTION, ALTERNATIVE 94.7 APPOINTMENT BY DISTRICT JUDGE.] The initial appointment of 94.8 commissioners must be made no later than 60 days after sections 94.9 14 to 20 become effective. Subsequent appointments must be made 94.10 within 60 days before the expiration of a term in the same 94.11 manner as the predecessor was selected. A vacancy on the board 94.12 must be filled within 60 days after it occurs. If a selection 94.13 is not made within the prescribed time, the chief judge of the 94.14 seventh judicial district of the Minnesota district court on 94.15 application by an interested person shall appoint an eligible 94.16 person to the board. 94.17 Subd. 4. [VACANCIES.] If a vacancy occurs in the office of 94.18 commissioner, the vacancy must be filled for the unexpired term 94.19 in a like manner as provided for selection of the commissioner 94.20 who vacated the office. The office must be considered vacant 94.21 under the conditions specified in Minnesota Statutes, section 94.22 351.02. 94.23 Subd. 5. [TERMS OF OFFICE.] The terms of the initial 94.24 appointees to the board of commissioners are for three, four, 94.25 five, and six years and must be established by lot among the 94.26 initial four commissioners. The mayor or town board chair of 94.27 any new member added under section 18 shall designate the term, 94.28 not to exceed six years, of the first commissioner selected to 94.29 represent the member. Succeeding terms of all commissioners are 94.30 six years, except that each commissioner serves until a 94.31 successor has been duly selected and qualified. 94.32 Subd. 6. [REMOVAL.] A commissioner may be removed by the 94.33 unanimous vote of the appointing governing body, with or without 94.34 cause. 94.35 Subd. 7. [QUALIFICATIONS.] A commissioner may, but need 94.36 not, be a resident of the territory of the member appointing 95.1 that commissioner. 95.2 Subd. 8. [COMPENSATION.] A commissioner must be paid a per 95.3 diem compensation for attending a regular or special meeting in 95.4 an amount determined by the board. A commissioner must be 95.5 reimbursed for all reasonable expenses incurred in the 95.6 performance of the commissioner's duties as determined by the 95.7 board. 95.8 Sec. 16. [POWERS; APPLICATION OF EDA LAW.] 95.9 Subdivision 1. [USE OF EDA POWERS.] Except as otherwise 95.10 provided in sections 14 to 20, the authority may exercise any of 95.11 the powers of an economic development authority (EDA) provided 95.12 by Minnesota Statutes, sections 469.090 to 469.1082, and for 95.13 this purpose the term "city" means a member. Minnesota 95.14 Statutes, sections 469.096 to 469.101, 469.103 to 469.106, and 95.15 469.108 to 469.1081, apply to the authority, except that the 95.16 authority's fiscal year is the calendar year. 95.17 Subd. 2. [LAW THAT IS NOT APPLICABLE.] The provisions in: 95.18 (1) Minnesota Statutes, section 469.091, subdivision 1, 95.19 expressly relating to: 95.20 (i) the adoption of an enabling resolution; 95.21 (ii) Minnesota Statutes, section 469.092; or 95.22 (iii) housing and redevelopment authorities; and 95.23 (2) Minnesota Statutes, sections 469.093, 469.095, 469.102, 95.24 and 469.107; 95.25 do not apply to the authority. 95.26 Sec. 17. [MEMBERS MUST LEVY TAXES FOR AUTHORITY.] 95.27 (a) A member shall, at the request of the authority, levy a 95.28 tax in any year for the benefit of the authority. The tax is, 95.29 for each member, a pro rata portion of the total amount of tax 95.30 requested by the authority based on the taxable market value 95.31 within a member's jurisdiction, but in no event may the tax in 95.32 any year exceed 0.01813 percent of taxable market value. For 95.33 purposes of this section, "taxable market value" has the meaning 95.34 as given in Minnesota Statutes, section 273.032. 95.35 (b) The treasurer of each member city or town shall, within 95.36 15 days after receiving the property tax settlements from the 96.1 county treasurer, pay to the treasurer of the authority the 96.2 amount collected for this purpose. The money must be used by 96.3 the authority for the purposes provided by sections 14 to 20. 96.4 Sec. 18. [ADDITION AND WITHDRAWAL OF MEMBERS.] 96.5 Subdivision 1. [ADDITIONS.] A municipality upon a 96.6 resolution adopted by a four-fifths vote of all of its governing 96.7 body may petition the authority to be included within the 96.8 jurisdiction of the authority and, if approved by the authority, 96.9 the geographic area of the municipality must be included within 96.10 the jurisdiction of the authority and subject to the 96.11 jurisdiction of the authority under sections 14 to 20. 96.12 Subd. 2. [WITHDRAWALS.] A municipality may withdraw from 96.13 the authority by resolution of its governing body. The 96.14 municipality must notify the board of commissioners of the 96.15 authority of the withdrawal by providing a copy of the 96.16 resolution at least two years in advance of the proposed 96.17 withdrawal. Unless the authority and the withdrawing member 96.18 agree otherwise by action of their governing bodies, the taxable 96.19 property of the withdrawing member is subject to the property 96.20 tax levy under section 17 for two taxes payable years following 96.21 the notification of the withdrawal and the withdrawing member 96.22 retains any rights, obligations, and liabilities obtained or 96.23 incurred during its participation. 96.24 Sec. 19. [CONTRACTS WITH NONPROFIT CORPORATIONS.] 96.25 The authority may enter into contracts with one or more 96.26 nonprofit corporations to make, from funds of and under 96.27 guidelines set by the authority, loans or grants for projects 96.28 the authority may undertake under sections 14 to 20. Minnesota 96.29 Statutes, section 465.719, does not apply so long as the 96.30 nonprofit corporation is not described in Minnesota Statutes, 96.31 section 465.719, subdivision 1, paragraph (b), item (i), or (b), 96.32 item (ii). 96.33 Sec. 20. [RELATION TO EXISTING LAWS.] 96.34 Sections 14 to 20 must be given full effect notwithstanding 96.35 any law or charter that is inconsistent with them. 96.36 Sec. 21. [LOCAL APPROVAL; EFFECTIVE DATE.] 97.1 Sections 14 to 20 are only effective as to all affected 97.2 governing bodies on the day after the last of the governing 97.3 bodies or town boards of the cities of Alexandria and Garfield 97.4 and the towns of Alexandria and La Grand in Douglas county and 97.5 the chief clerical officer of each of them timely complete their 97.6 compliance with Minnesota Statutes, section 645.021, 97.7 subdivisions 2 and 3. 97.8 Sec. 22. [MULTICITY HOUSING AND REDEVELOPMENT AUTHORITY.] 97.9 Subdivision 1. [ESTABLISHED.] A multicity authority is 97.10 established that includes the cities of Arden Hills, Blaine, 97.11 Circle Pines, Mounds View, New Brighton, Roseville, and 97.12 Shoreview, to be known as the housing and redevelopment 97.13 authority in and for the "I-35W Corridor Coalition." 97.14 Subd. 2. [PURPOSES.] In addition to the purposes set forth 97.15 in Minnesota Statutes, sections 469.001 to 469.047, the purposes 97.16 of the authority are: 97.17 (1) to assist homeowners with flexible financing tools to 97.18 complete home improvement projects; 97.19 (2) to assist owners through the complex construction 97.20 process when renovating their homes; 97.21 (3) to assist individuals and families to become new 97.22 homeowners; 97.23 (4) to reduce the number of substandard housing units; and 97.24 (5) to keep the community's housing stock usable for future 97.25 generations. 97.26 Subd. 3. [DEFINITIONS.] (a) For the purposes of this 97.27 section, the terms defined in Minnesota Statutes, sections 97.28 469.001 to 469.047, have the meanings given to them. The terms 97.29 defined in this subdivision apply to this section unless the 97.30 context indicates a different meaning. 97.31 (b) "Area of operation" means the area within the 97.32 territorial boundaries of the seven cities. 97.33 (c) "Authority" means the housing and redevelopment 97.34 authority in and for the I-35W Corridor Coalition. 97.35 (d) "Multicounty authority" means the authority. 97.36 (e) "State public body" means the authority. 98.1 Subd. 4. [COMMISSIONERS.] The authority consists of 14 98.2 commissioners who shall be the mayor or acting mayor and the 98.3 city manager, acting city manager, city administrator, or acting 98.4 city administrator of each city in the authority. The term of 98.5 the mayor or acting mayor is coterminous with the mayoral term 98.6 of office. In the case of the city manager, acting city 98.7 manager, city administrator, or acting city administrator, the 98.8 term is five years from the date of appointment. Each 98.9 commissioner has one vote. 98.10 Subd. 5. [LEVY AUTHORITY.] Subject to the consent by 98.11 resolution of the cities in and for which a levy is created, the 98.12 authority may levy a tax upon all taxable property within its 98.13 area of operation in accordance with Minnesota Statutes, section 98.14 469.033, subdivision 6. Any tax levied under this section by 98.15 the authority is not considered to be in addition to any tax 98.16 previously levied or to be levied under Minnesota Statutes, 98.17 section 469.033, subdivision 6. A levy by the authority under 98.18 this section and a levy by any city under Minnesota Statutes, 98.19 section 469.033, subdivision 6, may not together exceed the levy 98.20 limits in that section. The levy is effective after the 98.21 resolutions of consent have been adopted by all the cities in 98.22 the area of operation. 98.23 Subd. 6. [APPROVAL OF EXISTING AUTHORITIES.] All projects, 98.24 redevelopment plans, or levies must be approved by the cities in 98.25 which they will be located, implemented, or levied. Approval of 98.26 projects, redevelopment plans, or levies is not required by the 98.27 county in which the affected city is located or by an existing 98.28 housing and redevelopment authority or economic development 98.29 authority of the affected city. 98.30 Subd. 7. [APPLICATION OF OTHER LAWS.] Provisions in 98.31 Minnesota Statutes, sections 469.001 to 469.047, applicable to 98.32 housing and redevelopment authorities also apply to the housing 98.33 and redevelopment authority in and for the 1-35W Corridor 98.34 Coalition subject to this section. 98.35 Subd. 8. [SUNSET.] This section expires on December 31, 98.36 2013. 99.1 Subd. 9. [EFFECTIVE DATE.] This section is effective for 99.2 the cities of Arden Hills, Blaine, Circle Pines, Mounds View, 99.3 New Brighton, Roseville, and Shoreview after the governing body 99.4 and its chief clerical officer of the last of those seven cities 99.5 timely complete their compliance with Minnesota Statutes, 99.6 section 645.021, subdivisions 2 and 3. 99.7 Sec. 23. [CITY OF DETROIT LAKES.] 99.8 Notwithstanding limitations on the amount of increment that 99.9 may be pooled to eliminate a deficit under Minnesota Statutes, 99.10 section 469.1763, subdivision 6, the city of Detroit Lakes may 99.11 transfer available increments from any of its tax increment 99.12 financing districts to TIF District 21-1 to be used to eliminate 99.13 a deficit in the increment generated by TIF District 21-1 that 99.14 is required to pay debt service on obligations issued for the 99.15 district. The authority under this section applies to deficits 99.16 occurring in 2000 and subsequent years. 99.17 [EFFECTIVE DATE.] This section is effective upon approval 99.18 by the governing body of Detroit Lakes and compliance with 99.19 Minnesota Statutes, section 645.021. 99.20 Sec. 24. [CITY OF DULUTH; EXPENDITURE OF TAX INCREMENTS.] 99.21 Subdivision 1. [EXPENDITURES AUTHORIZED.] Notwithstanding 99.22 Minnesota Statutes, section 469.1764, the Duluth economic 99.23 development authority may expend up to $3,000,000 of tax 99.24 increments collected from development district No. 3 on 99.25 activities located outside the geographic boundaries of the 99.26 district, subject to the conditions in this section. 99.27 Subd. 2. [LOCATION OF EXPENDITURES.] Tax increments must 99.28 be spent within the area bounded by the following described 99.29 lines: 99.30 (1) to the north by a line described as follows: beginning 99.31 at the intersection of the centerline of 29th Avenue West and 99.32 the southerly line of West Michigan Street, thence southwesterly 99.33 along the southerly line of West Michigan Street to the east 99.34 limit of the DM&IR railway right-of-way; thence northwesterly 99.35 along the easterly limit of the DM&IR railway right-of-way to 99.36 the centerline of West Superior Street to its intersection with 100.1 the centerline of Jenswold Street; thence southwesterly along 100.2 the centerline of Jenswold Street to its intersection with the 100.3 centerline of the Northern Pacific Railway Company's main line 100.4 to St. Paul; thence southwesterly along the centerline of the 100.5 Northern Pacific Railway Company's main line to St. Paul to its 100.6 intersection with the extended centerline of 37th Avenue West; 100.7 (2) to the west by a line described as follows: beginning 100.8 at the intersection of the centerline of the Northern Pacific 100.9 Railway Company's main line to St. Paul and the extended 100.10 centerline of 37th Avenue West; then southeasterly along said 100.11 extended centerline of 37th Avenue West to its intersection with 100.12 the centerline of Interstate highway 35; 100.13 (3) to the south by the centerline of Interstate highway 100.14 35; and 100.15 (4) to the east by the centerline of 29th Avenue West. 100.16 Subd. 3. [LIMITATIONS ON USE.] All expenditures of tax 100.17 increments permitted by this section must meet the requirements 100.18 of Minnesota Statutes, section 469.176, subdivision 4j. 100.19 [EFFECTIVE DATE.] This section is effective June 1, 2003. 100.20 Sec. 25. [CITY OF DULUTH; TAX INCREMENT FINANCING 100.21 DISTRICT.] 100.22 Subdivision 1. [AUTHORIZATION.] Upon approval of the 100.23 governing body of the city of Duluth, the Duluth economic 100.24 development authority may create an economic development tax 100.25 increment financing district for aircraft related facilities. 100.26 Except as otherwise provided in this section, the provisions of 100.27 Minnesota Statutes, sections 469.174 to 469.179, apply to the 100.28 district. 100.29 Subd. 2. [SPECIAL RULES.] (a) Notwithstanding the 100.30 provisions of Minnesota Statutes, section 469.176, subdivision 100.31 1b, paragraph (a), clause (3), no tax increment shall be paid to 100.32 the authority after 25 years after receipt by the authority of 100.33 the first tax increment for the district authorized by this 100.34 section. 100.35 (b) The development in the district authorized by this 100.36 section shall be deemed to be a purpose authorized under 101.1 Minnesota Statutes, section 469.176, subdivision 4c, paragraph 101.2 (a). 101.3 (c) For purposes of Minnesota Statutes, section 469.177, 101.4 subdivision 12, the applicable maximum duration limit of the 101.5 district authorized by this section shall be as set forth in 101.6 paragraph (a). 101.7 [EFFECTIVE DATE.] This section is effective upon compliance 101.8 with the requirements of Minnesota Statutes, sections 469.1782 101.9 and 645.021. 101.10 Sec. 26. [CITY OF MONTICELLO; EXTENSION OF TIME FOR 101.11 ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.] 101.12 The requirements of Minnesota Statutes, section 469.1763, 101.13 subdivision 3, that activities must be undertaken within a 101.14 five-year period from the date of certification of a tax 101.15 increment financing district, must be considered to be met for 101.16 the city of Monticello tax increment financing district no. 1-22 101.17 if the activities are undertaken within ten years from the date 101.18 of certification of the district. 101.19 [EFFECTIVE DATE.] This section is effective upon compliance 101.20 by the governing body of the city of Monticello with the 101.21 requirements of Minnesota Statutes, section 645.021. 101.22 Sec. 27. [CITY OF NEW HOPE; TAX INCREMENT FINANCING 101.23 DISTRICT.] 101.24 Subdivision 1. [SPECIAL RULES.] (a) At the election of the 101.25 city, upon adoption of the tax increment financing plan for a 101.26 district or districts described in this section, the rules 101.27 provided under this section apply to each such district. 101.28 For purposes of this section, "district" means a 101.29 redevelopment or soils condition tax increment financing 101.30 district established by the city of New Hope or the economic 101.31 development authority of the city within the following area: 101.32 beginning at the intersection of Winnetka Avenue N. and the 101.33 westerly extension of 58th Avenue N., east on the westerly 101.34 extension of 58th Avenue N. to Sumter Avenue N., south on Sumter 101.35 Avenue N. to Bass Lake Road, east on Bass Lake Road to the city 101.36 boundaries of New Hope and Crystal, MN, south along that city 102.1 boundary to St. Raphael Drive, west on St. Raphael Drive to 102.2 Sumter Avenue N., south on Sumter Avenue N. to 53rd Avenue N., 102.3 west on 53rd Avenue N. to Winnetka Avenue N., north on Winnetka 102.4 Avenue N. to 55th Avenue N., west on 55th Avenue N. to Zealand 102.5 Avenue N., north on Zealand Avenue N. to Bass Lake Road, east on 102.6 Bass Lake Road to Yukon Avenue N., north on Yukon Avenue N. to 102.7 Meadow Lake Road E., east on Meadow Lake Road E. to the 102.8 intersection with the west property line of New Hope golf 102.9 course, south along the west property line of New Hope golf 102.10 course to Bass Lake Road, east on Bass Lake Road to Winnetka 102.11 Avenue N., north on Winnetka Avenue N. to the point of 102.12 beginning. The total number of parcels that may be included 102.13 within all such redevelopment or soils condition tax increment 102.14 financing districts must not exceed 131 and the total acreage, 102.15 including roads, easements, and rights-of-way, must not exceed 102.16 130 acres. 102.17 (b) The five-year rule under Minnesota Statutes, section 102.18 469.1763, subdivision 3, applies as if the limit is nine years. 102.19 (c) The limitations on expenditure of increment outside of 102.20 the district under Minnesota Statutes, section 469.1763, 102.21 subdivision 2, do not apply, provided that increments may only 102.22 be expended on improvements or activities within the area 102.23 identified in paragraph (a). 102.24 (d) The requirement relating to the original local tax rate 102.25 for the district under Minnesota Statutes, section 469.177, 102.26 subdivision 1a, does not apply. 102.27 (e) The requirements for qualifying a redevelopment 102.28 district under Minnesota Statutes, section 469.174, subdivision 102.29 10, do not apply to the parcels identified as 08-118-21-22-0001, 102.30 08-118-21-33-0008, 08-118-21-33-0009, 08-118-21-33-0010, 102.31 08-118-21-33-0011, 08-118-21-33-0013, 08-118-21-33-0018, 102.32 08-118-21-33-0019, 08-118-21-33-0025, 08-118-21-33-0027, 102.33 08-118-21-33-0029, 08-118-21-33-0082, and 08-118-21-33-0087, 102.34 which are deemed substandard for the purpose of qualifying the 102.35 district as a redevelopment district. 102.36 Subd. 2. [EXPIRATION.] (a) The exception under subdivision 103.1 1, paragraph (c), from the limitations of Minnesota Statutes, 103.2 section 469.1763, subdivision 2, expires 20 years after the 103.3 receipt of the first increment from a district for which the 103.4 city has elected that this section applies. 103.5 (b) The authority to approve tax increment financing plans 103.6 to establish a tax increment financing district subject to this 103.7 section expires on December 31, 2013. 103.8 Subd. 3. [EFFECTIVE DATE.] This section is effective upon 103.9 approval by the governing bodies of the city of New Hope and 103.10 Hennepin county and upon compliance by the city with Minnesota 103.11 Statutes, section 645.021, subdivision 3. 103.12 Sec. 28. [CITY OF RICHFIELD; TAX INCREMENT FINANCING 103.13 DISTRICT.] 103.14 Subdivision 1. [AUTHORIZATION.] The city of Richfield may 103.15 create a tax increment financing district consisting of an area 103.16 bordered by crosstown highway 62 on the north, 66th street on 103.17 the south, trunk highway 77 on the east, and the east side of 103.18 16th avenue to the west. The city or its housing and 103.19 redevelopment authority may be the authority for the purposes of 103.20 Minnesota Statutes, sections 469.174 to 469.179. 103.21 Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.] The 103.22 redevelopment tax increment district created pursuant to 103.23 subdivision 1 is deemed to be a redevelopment district and is 103.24 subject to Minnesota Statutes, sections 469.174 to 469.179, 103.25 except that expenditures for activities as defined in Minnesota 103.26 Statutes, section 469.1763, subdivision 1, paragraph (b), 103.27 anywhere in the district are deemed to be the costs of 103.28 correcting conditions that allow the designation of 103.29 redevelopment districts pursuant to Minnesota Statutes, section 103.30 469.174, subdivision 10. 103.31 [EFFECTIVE DATE.] This section is effective upon local 103.32 approval by the city of Richfield in compliance with Minnesota 103.33 Statutes, section 645.021. 103.34 Sec. 29. [CITY OF ROSEVILLE; TAX INCREMENT FINANCING 103.35 DISTRICT.] 103.36 Subdivision 1. [SPECIAL RULES.] (a) At the election of the 104.1 city, upon adoption of the tax increment financing plan for a 104.2 district or districts described in this section, the rules 104.3 provided under this section apply to each such district. 104.4 For purposes of this section, "district" means a 104.5 redevelopment or soils condition tax increment financing 104.6 district established by the city of Roseville or the economic 104.7 development authority of the city within an area generally 104.8 described as follows: from the Northwest corner of Section 4, 104.9 Township 29, Range 23, Ramsey County, Minnesota, south 1,265 104.10 feet along the centerline of Cleveland Avenue to the point of 104.11 beginning, then easterly a distance of approximately 902 feet, 104.12 then southerly 315 feet, then easterly 416 feet to the west 104.13 right-of-way line of the 33 foot wide Prior Avenue, then 104.14 southerly along that line approximately 602 feet to the 104.15 intersection with a line running southwesterly approximately 790 104.16 feet to a point along the centerline of County Road C-2 which is 104.17 approximately 980 feet east of its intersection with the 104.18 centerline of Cleveland Avenue, then southerly approximately 650 104.19 feet, then easterly 35 feet, then southerly approximately 300 104.20 feet, then easterly 240 feet, then southerly 270 feet, then 104.21 easterly 580 feet, then north and easterly along an irregular 104.22 line on the eastern boundary of Langton Lake a distance of 835 104.23 feet, then easterly 2,346 feet along the south edge of platted 104.24 and Oasis Park property, then southerly a distance of 2,101 feet 104.25 to the south right-of-way of County Road C, then westerly along 104.26 the south right-of-way a distance of approximately 4,210 feet to 104.27 the intersection with the centerline of Cleveland Avenue, then 104.28 northerly along the Cleveland Avenue centerline a distance of 104.29 approximately 4,371 feet to the point of beginning. Also 104.30 included are the additional connected public rights-of-way and 104.31 public lands as follows: the Terrace Drive right-of-way from 104.32 the eastern boundary of the Business Park boundary, easterly 104.33 approximately 1,000 feet to the intersection with the western 104.34 right-of-way of Snelling Avenue; the County Road C right-of-way 104.35 from the eastern boundary of the Business Park boundary, 104.36 easterly approximately 1,080 feet to the intersection with the 105.1 centerline of Snelling Avenue; and the area generally west of 105.2 Cleveland Avenue between Cleveland Avenue and marked Interstate 105.3 Highway 35W, from County Road C approximately 3,000 feet north, 105.4 encompassing entry ramps, wetlands, and regional storm water 105.5 storage ponds. 105.6 (b) The five-year rule under Minnesota Statutes, section 105.7 469.1763, subdivision 3, applies as if the limit is nine years. 105.8 (c) The limitations on expenditure of increment outside of 105.9 the district under Minnesota Statutes, section 469.1763, 105.10 subdivision 2, do not apply, provided that increments may only 105.11 be expended on improvements or activities within the areas 105.12 identified in paragraph (a). 105.13 (d) The requirement relating to the original local tax rate 105.14 for the district under Minnesota Statutes, section 469.177, 105.15 subdivision 1a, does not apply. 105.16 Subd. 2. [APPLICATION OF OTHER LAWS.] All references in 105.17 Minnesota Statutes to tax increment financing districts created 105.18 and tax increments generated under Minnesota Statutes, sections 105.19 469.174 to 469.1799, apply subject to this section, provided 105.20 that Minnesota Statutes, sections 469.174 to 469.1799, apply 105.21 only to the extent specified in this section. 105.22 Subd. 3. [EXPIRATION.] (a) The exception under subdivision 105.23 1, paragraph (c), from the limitations of Minnesota Statutes, 105.24 section 469.1763, subdivision 2, expires 20 years after the 105.25 receipt of the first increment from a district for which the 105.26 city has elected that this section applies. 105.27 (b) The authority to approve tax increment financing plans 105.28 to establish a tax increment financing district subject to this 105.29 section expires on December 31, 2013. 105.30 [EFFECTIVE DATE.] This section is effective upon approval 105.31 by the governing bodies of the city of Roseville and Ramsey 105.32 county and upon compliance by the the city with Minnesota 105.33 Statutes, section 645.021, subdivision 3. 105.34 Sec. 30. [CITY OF ST. MICHAEL; TAX INCREMENT FINANCING 105.35 DISTRICT.] 105.36 Subdivision 1. [ESTABLISHMENT OF DISTRICT.] The city of St. 106.1 Michael may establish a redevelopment tax increment financing 106.2 district subject to Minnesota Statutes, sections 469.174 to 106.3 469.179, except as provided in this section. The district must 106.4 be established within an area that includes the downtown and 106.5 town center areas as designated by the city as well as all 106.6 parcels adjacent to marked trunk highway 241 within the city. 106.7 Subd. 2. [SPECIAL RULES.] (a) Notwithstanding the 106.8 requirements of Minnesota Statutes, section 469.174, subdivision 106.9 10, the district may be established and operated as a 106.10 redevelopment district. 106.11 (b) Notwithstanding the restrictions of Minnesota Statutes, 106.12 sections 469.176, subdivisions 4 and 4j, and 469.1763, 106.13 subdivision 2, revenues derived from tax increments from the 106.14 district created under this section may be used to meet the cost 106.15 of land acquisition, removal of buildings in the right-of-way 106.16 acquisition area, and other costs incurred by the city of St. 106.17 Michael in the expansion and improvement of marked trunk highway 106.18 241 within the city. 106.19 (c) Minnesota Statutes, section 469.176, subdivision 5, 106.20 does not apply to the district. 106.21 [EFFECTIVE DATE.] This section is effective the day after 106.22 the governing body of the city of St. Michael complies with 106.23 Minnesota Statutes, section 645.021, subdivision 3. 106.24 Sec. 31. [KANDIYOHI COUNTY AND CITY OF WILLMAR.] 106.25 Subdivision 1. [POWERS.] Notwithstanding Minnesota 106.26 Statutes, sections 469.090 and 469.1082, Kandiyohi county may 106.27 exercise the powers of a city under Minnesota Statutes, sections 106.28 469.090 to 469.107. Kandiyohi county and the city of Willmar 106.29 may enter into a joint powers agreement under Minnesota 106.30 Statutes, section 471.59, to jointly or cooperatively exercise 106.31 any of the powers common to both the county and the city under 106.32 Minnesota Statutes, sections 469.090 to 469.107, in a manner to 106.33 be determined by a majority of the Kandiyohi county board and 106.34 the Willmar city council. 106.35 Subd. 2. [SPECIAL TAXING DISTRICT.] A joint powers entity 106.36 created under this section is a political subdivision of the 107.1 state and a special taxing district as defined by Minnesota 107.2 Statutes, section 275.066, clause (24), with the power to adopt 107.3 and certify a property tax levy to the county auditor. 107.4 Subd. 3. [EFFECTIVE DATE; NO LOCAL APPROVAL 107.5 REQUIRED.] Under Minnesota Statutes, section 645.023, 107.6 subdivision 1, paragraph (a), no local approval of this section 107.7 is required. 107.8 [EFFECTIVE DATE.] This sections is effective the day after 107.9 final enactment. 107.10 Sec. 32. �CITY OF HOPKINS; TAX INCREMENT FINANCING 107.11 DISTRICT; EXTENSION OF FIVE-YEAR RULE.] 107.12 The requirements of Minnesota Statutes, section 469.1763, 107.13 subdivision 3, that activities must be undertaken within a 107.14 five-year period from the date of certification of tax increment 107.15 financing district must be considered to be met for the city of 107.16 Hopkins redevelopment tax increment district 2-11, if the 107.17 activities are undertaken within ten years from the date of 107.18 certification of the district. 107.19 [EFFECTIVE DATE.] This section is effective upon compliance 107.20 by the governing body of the city of Hopkins with the provisions 107.21 of Minnesota Statutes, section 645.021. 107.22 Sec. 33. [CITIES OF ELGIN, EYOTA, BYRON, AND ORONOCO; TAX 107.23 INCREMENT FINANCING DISTRICTS.] 107.24 Subdivision 1. [AUTHORIZATION.] Notwithstanding the 107.25 mileage limitation in Minnesota Statutes, section 469.174, 107.26 subdivision 27, the cities of Elgin, Eyota, Byron, and Oronoco 107.27 are deemed to be small cities for purposes of Minnesota 107.28 Statutes, sections 469.174 to 469.1799, as long as they do not 107.29 exceed the population limit in that section. 107.30 Subd. 2. [LOCAL APPROVAL.] This section is available for 107.31 each of the cities of Elgin, Eyota, Byron, and Oronoco upon 107.32 approval of that city's governing body and compliance with 107.33 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 107.34 ARTICLE 5 107.35 PUBLIC FINANCE 107.36 Section 1. [37.31] [ISSUANCE OF BONDS.] 108.1 Subdivision 1. [BONDING AUTHORITY.] The society may issue 108.2 negotiable bonds in a principal amount that the society 108.3 determines necessary to provide sufficient money for achieving 108.4 its purposes, including the payment of interest on bonds of the 108.5 society, the establishment of reserves to secure its bonds, the 108.6 payment of fees to a third party providing credit enhancement, 108.7 and the payment of all other expenditures of the society 108.8 incident to and necessary or convenient to carry out its 108.9 corporate purposes and powers. Bonds of the society may be 108.10 issued as bonds or notes or in any other form authorized by 108.11 law. The principal amount of bonds issued and outstanding under 108.12 this section at any time may not exceed $20,000,000, excluding 108.13 bonds for which refunding bonds or crossover refunding bonds 108.14 have been issued. 108.15 Subd. 2. [REFUNDING OF BONDS.] The society may issue bonds 108.16 to refund outstanding bonds of the society, to pay any 108.17 redemption premiums on those bonds, and to pay interest accrued 108.18 or to accrue to the redemption date next succeeding the date of 108.19 delivery of the refunding bonds. The society may apply the 108.20 proceeds of any refunding bonds to the purchase or payment at 108.21 maturity of the bonds to be refunded, or to the redemption of 108.22 outstanding bonds on the redemption date next succeeding the 108.23 date of delivery of the refunding bonds and may, pending the 108.24 application, place the proceeds in escrow to be applied to the 108.25 purchase, retirement, or redemption of the bonds. Pending use, 108.26 escrowed proceeds may be invested and reinvested in obligations 108.27 issued or guaranteed by the state or the United States or by any 108.28 agency or instrumentality of the state or the United States, or 108.29 in certificates of deposit or time deposits secured in a manner 108.30 determined by the society, maturing at a time appropriate to 108.31 assure the prompt payment of the principal and interest and 108.32 redemption premiums, if any, on the bonds to be refunded. The 108.33 income realized on any investment may also be applied to the 108.34 payment of the bonds to be refunded. After the terms of the 108.35 escrow have been fully satisfied, any balance of the proceeds 108.36 and any investment income may be returned to the society for use 109.1 by it in any lawful manner. All refunding bonds issued under 109.2 this subdivision must be issued and secured in the manner 109.3 provided by resolution of the society. 109.4 Subd. 3. [KIND OF BONDS.] Bonds issued under this section 109.5 must be negotiable investment securities within the meaning and 109.6 for all purposes of the Uniform Commercial Code, subject only to 109.7 the provisions of the bonds for registration. The bonds issued 109.8 must be limited obligations of the society not secured by its 109.9 full faith and credit and payable solely from specified sources 109.10 or assets. 109.11 Subd. 4. [RESOLUTION AND TERMS OF SALE.] The bonds of the 109.12 society must be authorized by a resolution or resolutions 109.13 adopted by the society. The bonds must bear the date or dates, 109.14 mature at the time or times, bear interest at a fixed or 109.15 variable rate, including a rate varying periodically at the time 109.16 or times and on the terms determined by the society, or any 109.17 combination of fixed and variable rates, be in the 109.18 denominations, be in the form, carry the registration 109.19 privileges, be executed in the manner, be payable in lawful 109.20 money of the United States, at the place or places within or 109.21 without the state, and be subject to the terms of redemption or 109.22 purchase before maturity as the resolutions or certificates 109.23 provide. If, for any reason existing at the date of issue of 109.24 the bonds or existing at the date of making or purchasing any 109.25 loan or securities from the proceeds or after that date, the 109.26 interest on the bonds is or becomes subject to federal income 109.27 taxation, this fact does not affect the validity or the 109.28 provisions made for the security of the bonds. The society may 109.29 make covenants and take or have taken actions that are in its 109.30 judgment necessary or desirable to comply with conditions 109.31 established by federal law or regulations for the exemption of 109.32 interest on its obligations. The society may refrain from 109.33 compliance with those conditions if in its judgment this would 109.34 serve the purposes and policies set forth in this chapter with 109.35 respect to any particular issue of bonds, unless this would 109.36 violate covenants made by the society. The maximum maturity of 110.1 a bond, whether or not issued for the purpose of refunding, must 110.2 be 30 years from its date. The bonds of the society may be sold 110.3 at public or private sale, at a price or prices determined by 110.4 the society; provided that: 110.5 (1) the aggregate price at which an issue of bonds is 110.6 initially offered by underwriters to investors, as stated in the 110.7 authority's official statement with respect to the offering, 110.8 must not exceed by more than three percent the aggregate price 110.9 paid by the underwriters to the society at the time of delivery; 110.10 (2) the commission paid by the society to an underwriter 110.11 for placing an issue of bonds with investors must not exceed 110.12 three percent of the aggregate price at which the issue is 110.13 offered to investors as stated in the society's offering 110.14 statement; and 110.15 (3) the spread or commission must be an amount determined 110.16 by the society to be reasonable in light of the risk assumed and 110.17 the expenses of issuance, if any, required to be paid by the 110.18 underwriters. 110.19 Subd. 5. [EXEMPTION.] The notes and bonds of the society 110.20 are not subject to sections 16C.03, subdivision 4, and 16C.05. 110.21 Subd. 6. [RESERVES; FUNDS; ACCOUNTS.] The society may 110.22 establish reserves, funds, or accounts necessary to carry out 110.23 the purposes of the society or to comply with any agreement made 110.24 by or any resolution passed by the society. 110.25 Sec. 2. [37.32] [TENDER OPTION.] 110.26 An obligation may be issued giving its owner the right to 110.27 tender or the society to demand tender of the obligation to the 110.28 society or another person designated by it, for purchase at a 110.29 specified time or times, if the society has first entered into 110.30 an agreement with a suitable financial institution obligating 110.31 the financial institution to provide funds on a timely basis for 110.32 purchase of bonds tendered. The obligation is not considered to 110.33 mature on any tender date and the purchase of a tendered 110.34 obligation is not considered a payment or discharge of the 110.35 obligation by the society. Obligations tendered for purchase 110.36 may be remarketed by or on behalf of the society or another 111.1 purchaser. The society may enter into agreements it considers 111.2 appropriate to provide for the purchase and remarketing of 111.3 tendered obligations, including: 111.4 (1) provisions under which undelivered obligations may be 111.5 considered tendered for purchase and new obligations may be 111.6 substituted for them; 111.7 (2) provisions for the payment of charges of tender agents, 111.8 remarketing agents, and financial institutions extending lines 111.9 of credit or letters of credit assuring repurchase; and 111.10 (3) provisions for reimbursement of advances under letters 111.11 of credit that may be paid from the proceeds of the obligations 111.12 or from tax and other revenues appropriated for the payment and 111.13 security of the obligations and similar or related provisions. 111.14 Sec. 3. [37.33] [BOND FUND.] 111.15 Subdivision 1. [CREATION AND CONTENTS.] The society may 111.16 establish a special fund or funds for the security of one or 111.17 more or all series of its bonds. The funds must be known as 111.18 debt service reserve funds. The society may pay into each debt 111.19 service reserve fund: 111.20 (1) the proceeds of sale of bonds to the extent provided in 111.21 the resolution or indenture authorizing the issuance of them; 111.22 (2) money directed to be transferred by the society to the 111.23 debt service reserve fund; and 111.24 (3) other money made available to the society from any 111.25 other source only for the purpose of the fund. 111.26 Subd. 2. [USE OF FUNDS.] Except as provided in this 111.27 section, the money credited to each debt service reserve fund 111.28 must be used only for the payment of the principal of bonds of 111.29 the society as they mature, the purchase of the bonds, the 111.30 payment of interest on them, or the payment of any premium 111.31 required when the bonds are redeemed before maturity. Money in 111.32 a debt service reserve fund must not be withdrawn at a time and 111.33 in an amount that reduces the amount of the fund to less than 111.34 the amount the society determines to be reasonably necessary for 111.35 the purposes of the fund. However, money may be withdrawn to 111.36 pay principal or interest due on bonds secured by the fund if 112.1 other money of the society is not available. 112.2 Subd. 3. [INVESTMENT.] Money in a debt service reserve 112.3 fund not required for immediate use may be invested in 112.4 accordance with section 37.07. 112.5 Subd. 4. [MINIMUM AMOUNT OF RESERVE AT ISSUANCE.] If the 112.6 society establishes a debt service reserve fund for the security 112.7 of any series of bonds, it shall not issue additional bonds that 112.8 are similarly secured if the amount of any of the debt service 112.9 reserve funds at the time of issuance does not equal or exceed 112.10 the minimum amount required by the resolution creating the fund, 112.11 unless the society deposits in each fund at the time of 112.12 issuance, from the proceeds of the bonds, or otherwise, an 112.13 amount that when added together with the amount then in the fund 112.14 will be at least the minimum amount required. 112.15 Subd. 5. [TRANSFER OF EXCESS.] To the extent consistent 112.16 with the resolutions and indentures securing outstanding bonds, 112.17 the society may at the close of a fiscal year transfer to any 112.18 other fund or account from any debt service reserve fund any 112.19 excess in that reserve fund over the amount determined by the 112.20 society to be reasonably necessary for the purpose of the 112.21 reserve fund. 112.22 Sec. 4. [37.34] [MONEY OF THE SOCIETY.] 112.23 The society may contract with the holders of any of its 112.24 bonds as to the custody, collection, securing, investment, and 112.25 payment of money of the society or money held in trust or 112.26 otherwise for the payment of bonds, and to carry out the 112.27 contract. Money held in trust or otherwise for the payment of 112.28 bonds or in any way to secure bonds and deposits of the money 112.29 may be secured in the same manner as money of the society, and 112.30 all banks and trust companies are authorized to give security 112.31 for the deposits. 112.32 Sec. 5. [37.35] [NONLIABILITY.] 112.33 Subdivision 1. [NONLIABILITY OF INDIVIDUALS.] No member of 112.34 the society or other person executing the bonds is liable 112.35 personally on the bonds or is subject to any personal liability 112.36 or accountability by reason of their issuance. 113.1 Subd. 2. [NONLIABILITY OF STATE.] The state is not liable 113.2 on bonds of the society issued under section 37.31 and those 113.3 bonds are not a debt of the state. The bonds must contain on 113.4 their face a statement to that effect. 113.5 Sec. 6. [37.36] [PURCHASE AND CANCELLATION BY SOCIETY.] 113.6 Subject to agreements with bondholders that may then exist, 113.7 the society may purchase out of money available for the purpose, 113.8 bonds of the society which shall then be canceled, at a price 113.9 not exceeding the following amounts: 113.10 (1) if the bonds are then redeemable, the redemption price 113.11 then applicable plus accrued interest to the next interest 113.12 payment date of the bonds; or 113.13 (2) if the bonds are not redeemable, the redemption price 113.14 applicable on the first date after the purchase upon which the 113.15 bonds become subject to redemption plus accrued interest to that 113.16 date. 113.17 Sec. 7. [37.37] [STATE PLEDGE AGAINST IMPAIRMENT OF 113.18 CONTRACTS.] 113.19 The state pledges and agrees with the holders of bonds 113.20 issued under section 37.31 that the state will not limit or 113.21 alter the rights vested in the society to fulfill the terms of 113.22 any agreements made with the bondholders or in any way impair 113.23 the rights and remedies of the holders until the bonds, together 113.24 with interest on them, with interest on any unpaid installments 113.25 of interest, and all costs and expenses in connection with any 113.26 action or proceeding by or on behalf of the bondholders, are 113.27 fully met and discharged. The society may include this pledge 113.28 and agreement of the state in any agreement with the holders of 113.29 bonds issued under section 37.31. 113.30 Sec. 8. Minnesota Statutes 2002, section 373.01, 113.31 subdivision 3, is amended to read: 113.32 Subd. 3. [CAPITAL NOTES.] A county board may, by 113.33 resolution and without referendum, issue capital notes subject 113.34 to the county debt limit to purchase capital equipment useful 113.35 for county purposes that has an expected useful life at least 113.36 equal to the term of the notes. The notes shall be payable in 114.1 not more than five years and shall be issued on terms and in a 114.2 manner the board determines. A tax levy shall be made for 114.3 payment of the principal and interest on the notes, in 114.4 accordance with section 475.61, as in the case of bonds. For 114.5 purposes of this subdivision, "capital equipment" means public 114.6 safety, ambulance, road construction or maintenance, and medical 114.7, and data processingequipment, and computer hardware and 114.8 original operating system software. 114.9 Sec. 9. Minnesota Statutes 2002, section 373.45, 114.10 subdivision 1, is amended to read: 114.11 Subdivision 1. [DEFINITIONS.] (a) As used in this section, 114.12 the following terms have the meanings given. 114.13 (b) "Authority" means the Minnesota public facilities 114.14 authority. 114.15 (c) "Commissioner" means the commissioner of finance. 114.16 (d) "Debt obligation" means a general obligation bond 114.17 issued by a county, or a bond payable from a county lease 114.18 obligation under section 641.24, to provide funds for the 114.19 construction of: 114.20 (1) jails; 114.21 (2) correctional facilities; 114.22 (3) law enforcement facilities; 114.23 (4) social services and human services facilities; or 114.24 (5) solid waste facilities. 114.25 Sec. 10. Minnesota Statutes 2002, section 373.47, 114.26 subdivision 1, is amended to read: 114.27 Subdivision 1. [AUTHORITY TO INCUR DEBT.](a)Subject to 114.28 prior approval by the public safety radio system planning 114.29 committee under section 473.907, the governing body of a county 114.30 may finance the cost of designing, constructing, and acquiring 114.31 public safety communication system infrastructure and equipment 114.32 for use on the statewide, shared public safety radio system by 114.33 issuing: 114.34 (1) capital improvement bonds under section 373.40, as if 114.35 the infrastructure and equipment qualified as a "capital 114.36 improvement" within the meaning of section 373.40, subdivision 115.1 1, paragraph (b); and 115.2 (2) capital notes under the provisions of section 373.01, 115.3 subdivision 3, as if the equipment qualified as "capital 115.4 equipment" within the meaning of section 373.01, subdivision 3. 115.5(b) For purposes of this section, "county" means the115.6following counties: Anoka, Benton, Carver, Chisago, Dakota,115.7Dodge, Fillmore, Freeborn, Goodhue, Hennepin, Houston, Isanti,115.8Mower, Olmsted, Ramsey, Rice, Scott, Sherburne, Steele, Wabasha,115.9Washington, Wright, and Winona.115.10(c) The authority to incur debt under this section is not115.11effective until July 1, 2003, for the following counties:115.12Benton, Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower,115.13Olmsted, Rice, Sherburne, Steele, Wabasha, Wright, and Winona.115.14 Sec. 11. Minnesota Statutes 2002, section 376.009, is 115.15 amended to read: 115.16 376.009 [COUNTY HOSPITAL DEFINED; MAY HAVE MANY BUILDINGS, 115.17 SITES.] 115.18 For the purposes of sections 376.01 to 376.06, "county 115.19 hospital" means any hospital owned or operated by a county which 115.20 may consist of any number of buildings at one location or any 115.21 number of buildings at different locations within the 115.22 county. The county board of any county that has not established 115.23 a county hospital may by resolution authorize a statutory or 115.24 home rule charter city in the county and its city council to 115.25 exercise the powers of a county and the county board under 115.26 sections 376.01 to 376.07, in which case references in sections 115.27 376.01 to 376.07 to "county" and "county board" refer to the 115.28 city so designated and its governing body, respectively. 115.29 Sec. 12. Minnesota Statutes 2002, section 376.55, 115.30 subdivision 3, is amended to read: 115.31 Subd. 3. [FINANCING.] The county board may transfer 115.32 surplus funds from any fund except the road and bridge, sinking 115.33 or drainage ditch funds for the purpose of 115.34 establishing, acquiring, maintaining, enlarging, or adding to a 115.35 county nursing home. When surplus funds are not available for 115.36 transfer, a county board may issue bonds to pay the cost of 116.1 establishing, acquiring, equipping, furnishing, enlarging, or 116.2 adding to a county nursing home, subject to section 376.56. 116.3 Sec. 13. Minnesota Statutes 2002, section 376.55, is 116.4 amended by adding a subdivision to read: 116.5 Subd. 7. [CITY POWERS.] The county board of any county 116.6 that has not established a nursing home may by resolution 116.7 authorize a statutory or home rule charter city within the 116.8 county to exercise the powers of a county under sections 376.55 116.9 to 376.60. A city so designated may exercise within its 116.10 boundaries all the powers of a county under sections 376.55 to 116.11 376.60. 116.12 Sec. 14. Minnesota Statutes 2002, section 376.56, 116.13 subdivision 3, is amended to read: 116.14 Subd. 3. [CHAPTER 475 BONDS.] Bonds issued under section 116.15 376.55, subdivision 3, may be general obligations of the county 116.16 and may be issued and sold, and taxes levied for their payment 116.17 as provided under chapter 475. No election shall be required to 116.18 authorize the bond issue for acquiring, improving, remodeling, 116.19 or replacing an existing nursing home without increasing the 116.20 total number of accommodations for residents in all nursing 116.21 homes in the county. The revenues of the nursing home shall 116.22 also be pledged for the payment of the bonds and for any 116.23 interest and premium. Part of the proceeds may be deposited in 116.24 the debt service fund for the issue, to capitalize interest and 116.25 create a reserve to reduce or eliminate the tax otherwise 116.26 required by section 475.61 to be levied before issuing the 116.27 bonds. The remaining proceeds from the sale of the bonds and 116.28 any surplus funds transferred under section 376.55, subdivision 116.29 3 must be credited to and deposited in the county nursing home 116.30 building fund of the county in which the nursing home is located. 116.31 Sec. 15. Minnesota Statutes 2002, section 383B.77, 116.32 subdivision 1, is amended to read: 116.33 Subdivision 1. [CREATION.] The Hennepin county housing and 116.34 redevelopment authority is created in the county of Hennepin. 116.35 It shall have all of the powers and duties of a housing and 116.36 redevelopment authority under sections 469.001 to 469.047. For 117.1 the purposes of applying the municipal housing and redevelopment 117.2 act to Hennepin county, the county has all of the powers and 117.3 duties of a city, the county board has all the powers and duties 117.4 of a governing body, the chair of the county board has all of 117.5 the powers and duties of a mayor, and, notwithstanding section 117.6 469.008, the area of operation includes the area within the 117.7 territorial boundaries of the county. 117.8 Sec. 16. Minnesota Statutes 2002, section 383B.77, 117.9 subdivision 2, is amended to read: 117.10 Subd. 2. [LIMITATION.] This section does not limit or 117.11 restrict any existing housing and redevelopment authority or 117.12 prevent a municipality from creating an authority. For purposes 117.13 of this subdivision, "housing and redevelopment authority" 117.14 includes any municipal department, agency, or authority of the 117.15 city of Minneapolis which exercises the powers of a housing and 117.16 redevelopment authority pursuant to section 469.003 or other 117.17 law. The county authority shall notify a municipal authority by 117.18 January 31 of each year as to the activities the county 117.19 authority plans to participate in within the municipality. The 117.20 municipal authority shall notify the county authority within 45 117.21 days of the date of the notice from the county authority, if the 117.22 municipal authority does not consent to the activities of the 117.23 county authority.The county authority shall not exercise its117.24powers in a municipality where a housing and redevelopment117.25authority was created under Minnesota Statutes 1969, chapter117.26462, before June 8, 1971, except as provided in this117.27subdivision.If a city housing and redevelopment authority 117.28 requests the county housing and redevelopment authority to 117.29 exercise any power or perform any function of the municipal 117.30 authority, the county authority may do so. 117.31 Sec. 17. Minnesota Statutes 2002, section 410.32, is 117.32 amended to read: 117.33 410.32 [CITIES MAY ISSUE CAPITAL NOTES TO BUY CAPITAL 117.34 EQUIPMENT.] 117.35 Notwithstanding any contrary provision of other law or 117.36 charter, a home rule charter city may, by resolution and without 118.1 public referendum, issue capital notes subject to the city debt 118.2 limit to purchase public safety equipment, ambulance and other 118.3 medical equipment, road construction and maintenance equipment, 118.4 and other capital equipmenthavingand computer hardware and 118.5 original operating system software, provided the equipment or 118.6 software has an expected useful life at least as long as the 118.7 term of the notes. The notes shall be payable in not more than 118.8 five years and be issued on terms and in the manner the city 118.9 determines. The total principal amount of the capital notes 118.10 issued in a fiscal year shall not exceed 0.03 percent of the 118.11 market value of taxable property in the city for that year. A 118.12 tax levy shall be made for the payment of the principal and 118.13 interest on the notes, in accordance with section 475.61, as in 118.14 the case of bonds. Notes issued under this section shall 118.15 require an affirmative vote of two-thirds of the governing body 118.16 of the city. Notwithstanding a contrary provision of other law 118.17 or charter, a home rule charter city may also issue capital 118.18 notes subject to its debt limit in the manner and subject to the 118.19 limitations applicable to statutory cities pursuant to section 118.20 412.301. 118.21 Sec. 18. [410.326] [CAPITAL IMPROVEMENT BONDS.] 118.22 Subdivision 1. [DEFINITIONS.] For purposes of this 118.23 section, the following terms have the meanings given. 118.24 (a) "Bonds" mean an obligation defined under section 475.51. 118.25 (b) "Capital improvement" means acquisition or betterment 118.26 of public lands, development rights in the form of conservation 118.27 easements under chapter 84C, buildings or other improvements for 118.28 the purpose of a city hall, administrative building, public 118.29 safety, public works facility, parks, library, and roads and 118.30 bridges. An improvement must have an expected useful life of 118.31 five years or more to qualify. Capital improvement does not 118.32 include light rail transit or any activity related to it or to a 118.33 recreational or sports facility building, including, but not 118.34 limited to, a gymnasium, ice arena, racquet sports facility, 118.35 swimming pool, exercise room, or health spa, unless the building 118.36 is part of an outdoor park and is incidental to the primary 119.1 purpose of outdoor recreation. 119.2 (c) "City" means a home rule charter or statutory city. 119.3 Subd. 2. [ELECTION REQUIREMENT.] (a) Bonds issued by a 119.4 city to finance capital improvements under an approved capital 119.5 improvements plan are not subject to the election requirements 119.6 of section 475.58. The bonds are subject to the net debt limits 119.7 under section 475.53. The bonds must be approved by an 119.8 affirmative vote of three-fifths of the members of a five-member 119.9 city council. In the case of a city council having more than 119.10 five members, the bonds must be approved by a vote of at least 119.11 two-thirds of the city council. 119.12 (b) Before the issuance of bonds qualifying under this 119.13 section, the city must publish a notice of its intention to 119.14 issue the bonds and the date and time of the hearing to obtain 119.15 public comment on the matter. The notice must be published in 119.16 the official newspaper of the city or in a newspaper of general 119.17 circulation in the city. Additionally, the notice may be posted 119.18 on the official Web site, if any, of the city. The notice must 119.19 be published at least 14 but not more than 28 days before the 119.20 date of the hearing. 119.21 (c) A city may issue the bonds only after obtaining the 119.22 approval of a majority of the voters voting on the question of 119.23 issuing the obligations, if a petition requesting a vote on the 119.24 issuance is signed by voters equal to five percent of the votes 119.25 cast in the city in the last general election and is filed with 119.26 the city clerk within 30 days after the public hearing. The 119.27 commissioner of revenue shall prepare a suggested form of the 119.28 question to be presented at the election. 119.29 Subd. 3. [CAPITAL IMPROVEMENT PLAN.] (a) A city may adopt 119.30 a capital improvement plan. The plan must cover at least a 119.31 five-year period beginning with the date of its adoption. The 119.32 plan must set forth the estimated schedule, timing, and details 119.33 of specific capital improvements by year, together with the 119.34 estimated cost, the need for the improvement, and sources of 119.35 revenue to pay for the improvement. In preparing the capital 119.36 improvement plan, the city council must consider for each 120.1 project and for the overall plan: 120.2 (1) the condition of the city's existing infrastructure, 120.3 including the projected need for repair or replacement; 120.4 (2) the likely demand for the improvement; 120.5 (3) the estimated cost of the improvement; 120.6 (4) the available public resources; 120.7 (5) the level of overlapping debt in the city; 120.8 (6) the relative benefits and costs of alternative uses of 120.9 the funds; 120.10 (7) operating costs of the proposed improvements; and 120.11 (8) alternatives for providing services most efficiently 120.12 through shared facilities with other cities or local government 120.13 units. 120.14 (b) The capital improvement plan and annual amendments to 120.15 it must be approved by the city council after public hearing. 120.16 Subd. 4. [LIMITATIONS ON AMOUNT.] A city may not issue 120.17 bonds under this section if the maximum amount of principal and 120.18 interest to become due in any year on all the outstanding bonds 120.19 issued under this section, including the bonds to be issued, 120.20 will equal or exceed 0.05367 percent of taxable market value of 120.21 property in the county. Calculation of the limit must be made 120.22 using the taxable market value for the taxes payable year in 120.23 which the obligations are issued and sold. This section does 120.24 not limit the authority to issue bonds under any other special 120.25 or general law. 120.26 Subd. 5. [APPLICATION OF CHAPTER 475.] Bonds to finance 120.27 capital improvements qualifying under this section must be 120.28 issued under the issuance authority in chapter 475 and the 120.29 provisions of chapter 475 apply, except as otherwise 120.30 specifically provided in this section. 120.31 Sec. 19. Minnesota Statutes 2002, section 412.301, is 120.32 amended to read: 120.33 412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 120.34 The council may issue certificates of indebtedness or 120.35 capital notes subject to the city debt limits to purchase public 120.36 safety equipment, ambulance equipment, road construction or 121.1 maintenance equipment, and other capital equipmenthavingand 121.2 computer hardware and original operating system software, 121.3 provided the equipment or software has an expected useful life 121.4 at least as long as the terms of the certificates or notes. 121.5 Such certificates or notes shall be payable in not more than 121.6 five yearsandexcept that certificates or notes issued after 121.7 June 30, 2003, and before July 1, 2008, shall be payable in not 121.8 more than ten years. The certificates or notes shall be issued 121.9 on such terms and in such manner as the council may determine. 121.10 If the amount of the certificates or notes to be issued to 121.11 finance any such purchase exceeds 0.25 percent of the market 121.12 value of taxable property in the city, they shall not be issued 121.13 for at least ten days after publication in the official 121.14 newspaper of a council resolution determining to issue them; and 121.15 if before the end of that time, a petition asking for an 121.16 election on the proposition signed by voters equal to ten 121.17 percent of the number of voters at the last regular municipal 121.18 election is filed with the clerk, such certificates or notes 121.19 shall not be issued until the proposition of their issuance has 121.20 been approved by a majority of the votes cast on the question at 121.21 a regular or special election. A tax levy shall be made for the 121.22 payment of the principal and interest on such certificates or 121.23 notes, in accordance with section 475.61, as in the case of 121.24 bonds. 121.25 Sec. 20. Minnesota Statutes 2002, section 469.175, 121.26 subdivision 3, is amended to read: 121.27 Subd. 3. [MUNICIPALITY APPROVAL.] A county auditor shall 121.28 not certify the original net tax capacity of a tax increment 121.29 financing district until the tax increment financing plan 121.30 proposed for that district has been approved by the municipality 121.31 in which the district is located. If an authority that proposes 121.32 to establish a tax increment financing district and the 121.33 municipality are not the same, the authority shall apply to the 121.34 municipality in which the district is proposed to be located and 121.35 shall obtain the approval of its tax increment financing plan by 121.36 the municipality before the authority may use tax increment 122.1 financing. The municipality shall approve the tax increment 122.2 financing plan only after a public hearing thereon after 122.3 published notice in a newspaper of general circulation in the 122.4 municipality at least once not less than ten days nor more than 122.5 30 days prior to the date of the hearing. The published notice 122.6 must include a map of the area of the district from which 122.7 increments may be collected and, if the project area includes 122.8 additional area, a map of the project area in which the 122.9 increments may be expended. The hearing may be held before or 122.10 after the approval or creation of the project or it may be held 122.11 in conjunction with a hearing to approve the project. Before or 122.12 at the time of approval of the tax increment financing plan, the 122.13 municipality shall make the following findings, and shall set 122.14 forth in writing the reasons and supporting facts for each 122.15 determination: 122.16 (1) that the proposed tax increment financing district is a 122.17 redevelopment district, a renewal or renovation district, a 122.18 housing district, a soils condition district, or an economic 122.19 development district; if the proposed district is a 122.20 redevelopment district or a renewal or renovation district, the 122.21 reasons and supporting facts for the determination that the 122.22 district meets the criteria of section 469.174, subdivision 10, 122.23 paragraph (a), clauses (1) and (2), or subdivision 10a, must be 122.24 documented in writing and retained and made available to the 122.25 public by the authority until the district has been terminated; 122.26 (2) that the proposed development or redevelopment, in the 122.27 opinion of the municipality, would not reasonably be expected to 122.28 occur solely through private investment within the reasonably 122.29 foreseeable future and that the increased market value of the 122.30 site that could reasonably be expected to occur without the use 122.31 of tax increment financing would be less than the increase in 122.32 the market value estimated to result from the proposed 122.33 development after subtracting the present value of the projected 122.34 tax increments for the maximum duration of the district 122.35 permitted by the plan. The requirements of this clause do not 122.36 apply if the district is a qualified housing district, as 123.1 defined in section 273.1399, subdivision 1; 123.2 (3) that the tax increment financing plan conforms to the 123.3 general plan for the development or redevelopment of the 123.4 municipality as a whole; 123.5 (4) that the tax increment financing plan will afford 123.6 maximum opportunity, consistent with the sound needs of the 123.7 municipality as a whole, for the development or redevelopment of 123.8 the project by private enterprise; 123.9 (5) that the municipality elects the method of tax 123.10 increment computation set forth in section 469.177, subdivision 123.11 3, clause (b), if applicable. 123.12 When the municipality and the authority are not the same, 123.13 the municipality shall approve or disapprove the tax increment 123.14 financing plan within 60 days of submission by the authority. 123.15 When the municipality and the authority are not the same, the 123.16 municipality may not amend or modify a tax increment financing 123.17 plan except as proposed by the authority pursuant to subdivision 123.18 4. Once approved, the determination of the authority to 123.19 undertake the project through the use of tax increment financing 123.20 and the resolution of the governing body shall, except as 123.21 provided in subdivision 9, be conclusive of the findings therein 123.22 and of the public need for the financing. 123.23 Sec. 21. Minnesota Statutes 2002, section 469.175, is 123.24 amended by adding a subdivision to read: 123.25 Subd. 9. [LIMITS ON ACTIONS.] (a) A taxpayer in the county 123.26 where the district is located or another person in interest may 123.27 contest an action as provided in this subdivision. The 123.28 procedure set out in this subdivision is the exclusive means to 123.29 contest: 123.30 (1) the formation and approval or the legality of a 123.31 district, or a tax financing plan or its modification; 123.32 (2) the inclusion of a parcel in a district; or 123.33 (3) the legality of the collection or retention of a tax 123.34 increment from the district, or the legality of the bonds issued 123.35 under a tax increment financing plan based on a defect in the 123.36 formation of the district or the adoption or approval of the 124.1 plan or its modification. 124.2 This restriction applies to proceedings under section 469.1771. 124.3 (b) The contestant must object in writing to the authority 124.4 within 90 days after the adoption of a resolution approving a 124.5 tax increment financing plan under subdivision 3 or modification 124.6 of the plan under subdivision 4. 124.7 (c) After the 90-day period has expired, no government unit 124.8 or state agency may contest the matters described in paragraph 124.9 (a). 124.10 (d) The state auditor retains all rights and powers granted 124.11 to the state auditor under section 469.1771, except to the 124.12 extent otherwise provided in this subdivision. 124.13 (e) If the state auditor files a notice of noncompliance 124.14 with the county attorney regarding a matter limited by this 124.15 subdivision, and the notice is filed after 30 days from the 124.16 adoption of the approving resolution, then in any action begun 124.17 later by the county attorney under section 469.1771, subdivision 124.18 1, paragraph (b), the remedy in district court is limited to the 124.19 remedies that would apply under section 469.1771, subdivision 124.20 2b, paragraphs (c) and (d), for petitions filed by the attorney 124.21 general in tax court under section 469.1771, subdivision 2b, 124.22 paragraph (a). 124.23 Sec. 22. Minnesota Statutes 2002, section 473.39, is 124.24 amended by adding a subdivision to read: 124.25 Subd. 1j. [OBLIGATIONS.] After July 1, 2003, in addition 124.26 to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, and 124.27 1i, the council may issue certificates of indebtedness, bonds, 124.28 or other obligations under this section in an amount not 124.29 exceeding $45,000,000 for capital expenditures as prescribed in 124.30 the council's regional transit master plan and transit capital 124.31 improvement program and for related costs, including the costs 124.32 of issuance and sale of the obligations. 124.33 [APPLICATION.] This section applies to the counties of 124.34 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 124.35 Sec. 23. Minnesota Statutes 2002, section 475.58, 124.36 subdivision 3b, is amended to read: 125.1 Subd. 3b. [STREET RECONSTRUCTION.] (a) A municipality may, 125.2 without regard to the election requirement under subdivision 1, 125.3 issue and sell obligations for street reconstruction, if the 125.4 following conditions are met: 125.5 (1) the streets are reconstructed under a street 125.6 reconstruction plan that describes the streets to be 125.7 reconstructed, the estimated costs, and any planned 125.8 reconstruction of other streets in the municipality over the 125.9 next five years, and the plan and issuance of the obligations 125.10 has been approved by a vote of all of the members of the 125.11 governing body following a public hearing for which notice has 125.12 been published in the official newspaper at least ten days but 125.13 not more than 28 days prior to the hearing; and 125.14 (2) if a petition requesting a vote on the issuance is 125.15 signed by voters equal to five percent of the votes cast in the 125.16 last municipal general election and is filed with the municipal 125.17 clerk within 30 days of the public hearing, the municipality may 125.18 issue the bonds only after obtaining the approval of a majority 125.19 of the voters voting on the question of the issuance of the 125.20 obligations. 125.21 (b) Obligations issued under this subdivision are subject 125.22 to the debt limit of the municipality and are not excluded from 125.23 net debt under section 475.51, subdivision 4. 125.24 For purposes of this subdivision, street reconstruction includes 125.25 utility replacement and relocation and other activities 125.26 incidental to the street reconstruction, but does not include 125.27 the portion of project cost allocable to widening a street or 125.28 adding curbs and gutters where none previously existed. 125.29 Sec. 24. [BONDS ISSUANCE VALIDATED.] 125.30 The provisions of Minnesota Statutes, sections 373.47, 125.31 subdivision 1, and 473.907, subdivision 3, requiring prior 125.32 review and approval by the public radio safety committee do not 125.33 apply to the general obligation bonds issued by Anoka county in 125.34 a principal amount of $10,500,000 on November 20, 2002. 125.35 [EFFECTIVE DATE.] This section is effective upon compliance 125.36 by the governing body of Anoka county with the provisions of 126.1 Minnesota Statutes, section 645.021. 126.2 Sec. 25. [CORPORATE STATUS FOR CERTAIN FEDERAL TAX LAW.] 126.3 For purposes of section 1.103-1 of the federal income tax 126.4 regulations, Lewis and Clark Rural Water System, Inc. is hereby 126.5 recognized as a corporation authorized to act on behalf of its 126.6 members, including its Minnesota member governmental units, to 126.7 provide drinking water to their communities and to issue debt 126.8 obligations in its own name on behalf of some or all of its 126.9 members, provided that Minnesota member governmental units are 126.10 not liable for the payment of principal of or interest on such 126.11 obligations. 126.12 Sec. 26. [EFFECTIVE DATES.] 126.13 This article is effective the day following final enactment. 126.14 Sections 20 and 21 apply to all districts, regardless of when 126.15 created, and are effective the day following final enactment and 126.16 for all actions commenced after November 13, 2001. 126.17 ARTICLE 6 126.18 DEPARTMENT INCOME, CORPORATE FRANCHISE, AND 126.19 ESTATE TAX INITIATIVES 126.20 Section 1. Minnesota Statutes 2002, section 289A.10, 126.21 subdivision 1, is amended to read: 126.22 Subdivision 1. [RETURN REQUIRED.] In the case of a 126.23 decedent who has an interest in property with a situs in 126.24 Minnesota, the personal representative must submit a Minnesota 126.25 estate tax return to the commissioner, on a form prescribed by 126.26 the commissioner, if: 126.27 (1) a federal estate tax return is required to be filed; or 126.28 (2) the federal gross estate exceeds $700,000 for estates 126.29 of decedents dying after December 31, 2001, and before January 126.30 1, 2004; $850,000 for estates of decedents dying after December 126.31 31, 2003, and before January 1, 2005; $950,000 for estates of 126.32 decedents dying after December 31, 2004, and before January 1, 126.33 2006; and $1,000,000 for estates of decedents dying after 126.34 December 31, 2005. 126.35 The return must contain a computation of the Minnesota 126.36 estate tax due. The return must be signed by the personal 127.1 representative. 127.2 [EFFECTIVE DATE.] This section is effective for estates of 127.3 decedents dying after December 31, 2002. 127.4 Sec. 2. Minnesota Statutes 2002, section 289A.19, 127.5 subdivision 4, is amended to read: 127.6 Subd. 4. [ESTATE TAX RETURNS.] When in the commissioner's 127.7 judgment good cause exists, the commissioner may extend the time 127.8 for filing an estate tax return for not more than six months. 127.9 When an extension to file the federal estate tax return has been 127.10 granted under section 6081 of the Internal Revenue Code, the 127.11 time for filing the estate tax return is extended for that 127.12 period. 127.13 [EFFECTIVE DATE.] This section is effective for estates of 127.14 decedents dying after December 31, 2001. 127.15 Sec. 3. Minnesota Statutes 2002, section 289A.31, is 127.16 amended by adding a subdivision to read: 127.17 Subd. 8. [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If 127.18 an individual income tax refund resulting from claiming an 127.19 education credit under section 290.0674 is paid by means of 127.20 directly depositing the proceeds of the refund into a bank 127.21 account controlled by the vendor of the product or service upon 127.22 which the education credit is based, and the commissioner 127.23 subsequently disallows the credit, the commissioner may seek 127.24 repayment of the refund from the vendor. The amount of the 127.25 repayment must be assessed and collected in the same time and 127.26 manner as an erroneous refund under section 289A.37, subdivision 127.27 2. 127.28 [EFFECTIVE DATE.] This section is effective for refunds 127.29 paid to accounts controlled by a vendor on or after the day 127.30 following final enactment. 127.31 Sec. 4. Minnesota Statutes 2002, section 289A.56, 127.32 subdivision 3, is amended to read: 127.33 Subd. 3. [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 127.34 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 127.35 TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 127.36 overpayments of withholding tax, entertainer withholding tax, or 128.1 withholding from payments to out-of-state contractors,or estate128.2tax,interest is computed from the date of payment to the date 128.3 the refund is paid or credited. For purposes of this 128.4 subdivision, the date of payment is the later of the date the 128.5 tax was finally due or was paid. 128.6 For the purposes of computing interest on estate tax 128.7 refunds, interest is paid from the later of the date of 128.8 overpayment, the date the estate tax return is due, or the date 128.9 the original estate tax return is filed to the date the refund 128.10 is paid. 128.11 For purposes of computing interest on sales and use tax 128.12 refunds, interest is paid from the date of payment to the date 128.13 the refund is paid or credited, if the refund claim includes a 128.14 detailed schedule reflecting the tax periods covered in the 128.15 claim. If the refund claim submitted does not include a 128.16 detailed schedule reflecting the tax periods covered in the 128.17 claim, interest is computed from the date the claim was filed. 128.18 [EFFECTIVE DATE.] This section is effective for estates of 128.19 decedents dying after December 31, 2003. 128.20 Sec. 5. Minnesota Statutes 2002, section 289A.60, 128.21 subdivision 7, is amended to read: 128.22 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer 128.23 files what purports to be a tax return or a claim for refund but 128.24 which does not contain information on which the substantial 128.25 correctness of the purported return or claim for refund may be 128.26 judged or contains information that on its face shows that the 128.27 purported return or claim for refund is substantially incorrect 128.28 and the conduct is due to a position that is frivolous or a 128.29 desire that appears on the purported return or claim for refund 128.30 to delay or impede the administration of Minnesota tax laws, 128.31 then the individual shall pay a penalty of$500the greater of 128.32 $1,000 or 25 percent of the amount of tax required to be shown 128.33 on the return. In a proceeding involving the issue of whether 128.34 or not a person is liable for this penalty, the burden of proof 128.35 is on the commissioner. 128.36 [EFFECTIVE DATE.] This section is effective for returns 129.1 filed after December 31, 2003. 129.2 Sec. 6. Minnesota Statutes 2002, section 290.01, 129.3 subdivision 19b, is amended to read: 129.4 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 129.5 individuals, estates, and trusts, there shall be subtracted from 129.6 federal taxable income: 129.7 (1) interest income on obligations of any authority, 129.8 commission, or instrumentality of the United States to the 129.9 extent includable in taxable income for federal income tax 129.10 purposes but exempt from state income tax under the laws of the 129.11 United States; 129.12 (2) if included in federal taxable income, the amount of 129.13 any overpayment of income tax to Minnesota or to any other 129.14 state, for any previous taxable year, whether the amount is 129.15 received as a refund or as a credit to another taxable year's 129.16 income tax liability; 129.17 (3) the amount paid to others, less the amount used to 129.18 claim the credit allowed under section 290.0674, not to exceed 129.19 $1,625 for each qualifying child in grades kindergarten to 6 and 129.20 $2,500 for each qualifying child in grades 7 to 12, for tuition, 129.21 textbooks, and transportation of each qualifying child in 129.22 attending an elementary or secondary school situated in 129.23 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 129.24 wherein a resident of this state may legally fulfill the state's 129.25 compulsory attendance laws, which is not operated for profit, 129.26 and which adheres to the provisions of the Civil Rights Act of 129.27 1964 and chapter 363. For the purposes of this clause, 129.28 "tuition" includes fees or tuition as defined in section 129.29 290.0674, subdivision 1, clause (1). As used in this clause, 129.30 "textbooks" includes books and other instructional materials and 129.31 equipment purchased or leased for use in elementary and 129.32 secondary schools in teaching only those subjects legally and 129.33 commonly taught in public elementary and secondary schools in 129.34 this state. Equipment expenses qualifying for deduction 129.35 includes expenses as defined and limited in section 290.0674, 129.36 subdivision 1, clause (3). "Textbooks" does not include 130.1 instructional books and materials used in the teaching of 130.2 religious tenets, doctrines, or worship, the purpose of which is 130.3 to instill such tenets, doctrines, or worship, nor does it 130.4 include books or materials for, or transportation to, 130.5 extracurricular activities including sporting events, musical or 130.6 dramatic events, speech activities, driver's education, or 130.7 similar programs. For purposes of the subtraction provided by 130.8 this clause, "qualifying child" has the meaning given in section 130.9 32(c)(3) of the Internal Revenue Code; 130.10 (4) income as provided under section 290.0802; 130.11 (5) to the extent included in federal adjusted gross 130.12 income, income realized on disposition of property exempt from 130.13 tax under section 290.491; 130.14 (6)to the extent not deducted in determining federal130.15taxable income or used to claim the long-term care insurance130.16credit under section 290.0672, the amount paid for health130.17insurance of self-employed individuals as determined under130.18section 162(l) of the Internal Revenue Code, except that the130.19percent limit does not apply. If the individual deducted130.20insurance payments under section 213 of the Internal Revenue130.21Code of 1986, the subtraction under this clause must be reduced130.22by the lesser of:130.23(i) the total itemized deductions allowed under section130.2463(d) of the Internal Revenue Code, less state, local, and130.25foreign income taxes deductible under section 164 of the130.26Internal Revenue Code and the standard deduction under section130.2763(c) of the Internal Revenue Code; or130.28(ii) the lesser of (A) the amount of insurance qualifying130.29as "medical care" under section 213(d) of the Internal Revenue130.30Code to the extent not deducted under section 162(1) of the130.31Internal Revenue Code or excluded from income or (B) the total130.32amount deductible for medical care under section 213(a);130.33(7) the exemption amount allowed under Laws 1995, chapter130.34255, article 3, section 2, subdivision 3;130.35(8)to the extent included in federal taxable income, 130.36 postservice benefits for youth community service under section 131.1 124D.42 for volunteer service under United States Code, title 131.2 42, sections 12601 to 12604; 131.3(9)(7) to the extent not deducted in determining federal 131.4 taxable income by an individual who does not itemize deductions 131.5 for federal income tax purposes for the taxable year, an amount 131.6 equal to 50 percent of the excess of charitable contributions 131.7 allowable as a deduction for the taxable year under section 131.8 170(a) of the Internal Revenue Code over $500; 131.9(10)(8) for taxable years beginning before January 1, 131.10 2008, the amount of the federal small ethanol producer credit 131.11 allowed under section 40(a)(3) of the Internal Revenue Code 131.12 which is included in gross income under section 87 of the 131.13 Internal Revenue Code; 131.14(11)(9) for individuals who are allowed a federal foreign 131.15 tax credit for taxes that do not qualify for a credit under 131.16 section 290.06, subdivision 22, an amount equal to the carryover 131.17 of subnational foreign taxes for the taxable year, but not to 131.18 exceed the total subnational foreign taxes reported in claiming 131.19 the foreign tax credit. For purposes of this clause, "federal 131.20 foreign tax credit" means the credit allowed under section 27 of 131.21 the Internal Revenue Code, and "carryover of subnational foreign 131.22 taxes" equals the carryover allowed under section 904(c) of the 131.23 Internal Revenue Code minus national level foreign taxes to the 131.24 extent they exceed the federal foreign tax credit; and 131.25(12)(10) in each of the five tax years immediately 131.26 following the tax year in which an addition is required under 131.27 subdivision 19a, clause (7), an amount equal to one-fifth of the 131.28 delayed depreciation. For purposes of this clause, "delayed 131.29 depreciation" means the amount of the addition made by the 131.30 taxpayer under subdivision 19a, clause (7), minus the positive 131.31 value of any net operating loss under section 172 of the 131.32 Internal Revenue Code generated for the tax year of the 131.33 addition. The resulting delayed depreciation cannot be less 131.34 than zero. 131.35 [EFFECTIVE DATE.] This section is effective for tax years 131.36 beginning after December 31, 2003. 132.1 Sec. 7. Minnesota Statutes 2002, section 290.01, 132.2 subdivision 19d, is amended to read: 132.3 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 132.4 TAXABLE INCOME.] For corporations, there shall be subtracted 132.5 from federal taxable income after the increases provided in 132.6 subdivision 19c: 132.7 (1) the amount of foreign dividend gross-up added to gross 132.8 income for federal income tax purposes under section 78 of the 132.9 Internal Revenue Code; 132.10 (2) the amount of salary expense not allowed for federal 132.11 income tax purposes due to claiming the federal jobs credit 132.12 under section 51 of the Internal Revenue Code; 132.13 (3) any dividend (not including any distribution in 132.14 liquidation) paid within the taxable year by a national or state 132.15 bank to the United States, or to any instrumentality of the 132.16 United States exempt from federal income taxes, on the preferred 132.17 stock of the bank owned by the United States or the 132.18 instrumentality; 132.19 (4) amounts disallowed for intangible drilling costs due to 132.20 differences between this chapter and the Internal Revenue Code 132.21 in taxable years beginning before January 1, 1987, as follows: 132.22 (i) to the extent the disallowed costs are represented by 132.23 physical property, an amount equal to the allowance for 132.24 depreciation under Minnesota Statutes 1986, section 290.09, 132.25 subdivision 7, subject to the modifications contained in 132.26 subdivision 19e; and 132.27 (ii) to the extent the disallowed costs are not represented 132.28 by physical property, an amount equal to the allowance for cost 132.29 depletion under Minnesota Statutes 1986, section 290.09, 132.30 subdivision 8; 132.31 (5) the deduction for capital losses pursuant to sections 132.32 1211 and 1212 of the Internal Revenue Code, except that: 132.33 (i) for capital losses incurred in taxable years beginning 132.34 after December 31, 1986, capital loss carrybacks shall not be 132.35 allowed; 132.36 (ii) for capital losses incurred in taxable years beginning 133.1 after December 31, 1986, a capital loss carryover to each of the 133.2 15 taxable years succeeding the loss year shall be allowed; 133.3 (iii) for capital losses incurred in taxable years 133.4 beginning before January 1, 1987, a capital loss carryback to 133.5 each of the three taxable years preceding the loss year, subject 133.6 to the provisions of Minnesota Statutes 1986, section 290.16, 133.7 shall be allowed; and 133.8 (iv) for capital losses incurred in taxable years beginning 133.9 before January 1, 1987, a capital loss carryover to each of the 133.10 five taxable years succeeding the loss year to the extent such 133.11 loss was not used in a prior taxable year and subject to the 133.12 provisions of Minnesota Statutes 1986, section 290.16, shall be 133.13 allowed; 133.14 (6) an amount for interest and expenses relating to income 133.15 not taxable for federal income tax purposes, if (i) the income 133.16 is taxable under this chapter and (ii) the interest and expenses 133.17 were disallowed as deductions under the provisions of section 133.18 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 133.19 federal taxable income; 133.20 (7) in the case of mines, oil and gas wells, other natural 133.21 deposits, and timber for which percentage depletion was 133.22 disallowed pursuant to subdivision 19c, clause (11), a 133.23 reasonable allowance for depletion based on actual cost. In the 133.24 case of leases the deduction must be apportioned between the 133.25 lessor and lessee in accordance with rules prescribed by the 133.26 commissioner. In the case of property held in trust, the 133.27 allowable deduction must be apportioned between the income 133.28 beneficiaries and the trustee in accordance with the pertinent 133.29 provisions of the trust, or if there is no provision in the 133.30 instrument, on the basis of the trust's income allocable to 133.31 each; 133.32 (8) for certified pollution control facilities placed in 133.33 service in a taxable year beginning before December 31, 1986, 133.34 and for which amortization deductions were elected under section 133.35 169 of the Internal Revenue Code of 1954, as amended through 133.36 December 31, 1985, an amount equal to the allowance for 134.1 depreciation under Minnesota Statutes 1986, section 290.09, 134.2 subdivision 7; 134.3 (9) amounts included in federal taxable income that are due 134.4 to refunds of income, excise, or franchise taxes based on net 134.5 income or related minimum taxes paid by the corporation to 134.6 Minnesota, another state, a political subdivision of another 134.7 state, the District of Columbia, or a foreign country or 134.8 possession of the United States to the extent that the taxes 134.9 were added to federal taxable income under section 290.01, 134.10 subdivision 19c, clause (1), in a prior taxable year; 134.11 (10) 80 percent of royalties, fees, or other like income 134.12 accrued or received from a foreign operating corporation or a 134.13 foreign corporation which is part of the same unitary business 134.14 as the receiving corporation; 134.15 (11) income or gains from the business of mining as defined 134.16 in section 290.05, subdivision 1, clause (a), that are not 134.17 subject to Minnesota franchise tax; 134.18 (12) the amount of handicap access expenditures in the 134.19 taxable year which are not allowed to be deducted or capitalized 134.20 under section 44(d)(7) of the Internal Revenue Code; 134.21 (13) the amount of qualified research expenses not allowed 134.22 for federal income tax purposes under section 280C(c) of the 134.23 Internal Revenue Code, but only to the extent that the amount 134.24 exceeds the amount of the credit allowed under section 290.068; 134.25 (14) the amount of salary expenses not allowed for federal 134.26 income tax purposes due to claiming the Indian employment credit 134.27 under section 45A(a) of the Internal Revenue Code; 134.28 (15) the amount of any refund of environmental taxes paid 134.29 under section 59A of the Internal Revenue Code; 134.30 (16) for taxable years beginning before January 1, 2008, 134.31 the amount of the federal small ethanol producer credit allowed 134.32 under section 40(a)(3) of the Internal Revenue Code which is 134.33 included in gross income under section 87 of the Internal 134.34 Revenue Code; 134.35 (17) for a corporation whose foreign sales corporation, as 134.36 defined in section 922 of the Internal Revenue Code, constituted 135.1 a foreign operating corporation during any taxable year ending 135.2 before January 1, 1995, and a return was filed by August 15, 135.3 1996, claiming the deduction underthissection 290.21, 135.4 subdivision 4, for income received from the foreign operating 135.5 corporation, an amount equal to 1.23 multiplied by the amount of 135.6 income excluded under section 114 of the Internal Revenue Code, 135.7 provided the income is not income of a foreign operating 135.8 company; 135.9 (18) any decrease in subpart F income, as defined in 135.10 section 952(a) of the Internal Revenue Code, for the taxable 135.11 year when subpart F income is calculated without regard to the 135.12 provisions of section 614 of Public Law Number 107-147; and 135.13 (19) in each of the five tax years immediately following 135.14 the tax year in which an addition is required under subdivision 135.15 19c, clause (16), an amount equal to one-fifth of the delayed 135.16 depreciation. For purposes of this clause, "delayed 135.17 depreciation" means the amount of the addition made by the 135.18 taxpayer under subdivision 19c, clause (16). The resulting 135.19 delayed depreciation cannot be less than zero. 135.20 [EFFECTIVE DATE.] This section is effective the day 135.21 following final enactment. 135.22 Sec. 8. Minnesota Statutes 2002, section 290.06, 135.23 subdivision 2c, is amended to read: 135.24 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 135.25 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 135.26 married individuals filing joint returns and surviving spouses 135.27 as defined in section 2(a) of the Internal Revenue Code must be 135.28 computed by applying to their taxable net income the following 135.29 schedule of rates: 135.30 (1) On the first $25,680, 5.35 percent; 135.31 (2) On all over $25,680, but not over $102,030, 7.05 135.32 percent; 135.33 (3) On all over $102,030, 7.85 percent. 135.34 Married individuals filing separate returns, estates, and 135.35 trusts must compute their income tax by applying the above rates 135.36 to their taxable income, except that the income brackets will be 136.1 one-half of the above amounts. 136.2 (b) The income taxes imposed by this chapter upon unmarried 136.3 individuals must be computed by applying to taxable net income 136.4 the following schedule of rates: 136.5 (1) On the first $17,570, 5.35 percent; 136.6 (2) On all over $17,570, but not over $57,710, 7.05 136.7 percent; 136.8 (3) On all over $57,710, 7.85 percent. 136.9 (c) The income taxes imposed by this chapter upon unmarried 136.10 individuals qualifying as a head of household as defined in 136.11 section 2(b) of the Internal Revenue Code must be computed by 136.12 applying to taxable net income the following schedule of rates: 136.13 (1) On the first $21,630, 5.35 percent; 136.14 (2) On all over $21,630, but not over $86,910, 7.05 136.15 percent; 136.16 (3) On all over $86,910, 7.85 percent. 136.17 (d) In lieu of a tax computed according to the rates set 136.18 forth in this subdivision, the tax of any individual taxpayer 136.19 whose taxable net income for the taxable year is less than an 136.20 amount determined by the commissioner must be computed in 136.21 accordance with tables prepared and issued by the commissioner 136.22 of revenue based on income brackets of not more than $100. The 136.23 amount of tax for each bracket shall be computed at the rates 136.24 set forth in this subdivision, provided that the commissioner 136.25 may disregard a fractional part of a dollar unless it amounts to 136.26 50 cents or more, in which case it may be increased to $1. 136.27 (e) An individual who is not a Minnesota resident for the 136.28 entire year must compute the individual's Minnesota income tax 136.29 as provided in this subdivision. After the application of the 136.30 nonrefundable credits provided in this chapter, the tax 136.31 liability must then be multiplied by a fraction in which: 136.32 (1) the numerator is the individual's Minnesota source 136.33 federal adjusted gross income as defined in section 62 of the 136.34 Internal Revenue Code and increased by the additions required 136.35 under section 290.01, subdivision 19a, clauses (1), (5), and 136.36 (6), and reduced by the Minnesota assignable portion of the 137.1 subtraction for United States government interest under section 137.2 290.01, subdivision 19b, clause (1), after applying the 137.3 allocation and assignability provisions of section 290.081, 137.4 clause (a), or 290.17; and 137.5 (2) the denominator is the individual's federal adjusted 137.6 gross income as defined in section 62 of the Internal Revenue 137.7 Code of 1986, increased by the amounts specified in section 137.8 290.01, subdivision 19a, clauses (1), (5), and (6), and reduced 137.9 by the amounts specified in section 290.01, subdivision 19b, 137.10 clause (1). 137.11 [EFFECTIVE DATE.] This section is effective for tax years 137.12 beginning after December 31, 2002. 137.13 Sec. 9. Minnesota Statutes 2002, section 290.0671, 137.14 subdivision 1, is amended to read: 137.15 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 137.16 allowed a credit against the tax imposed by this chapter equal 137.17 to a percentage of earned income. To receive a credit, a 137.18 taxpayer must be eligible for a credit under section 32 of the 137.19 Internal Revenue Code. 137.20 (b) For individuals with no qualifying children, the credit 137.21 equals 1.9125 percent of the first $4,620 of earned income. The 137.22 credit is reduced by 1.9125 percent of earned income or modified 137.23 adjusted gross income, whichever is greater, in excess of 137.24 $5,770, but in no case is the credit less than zero. 137.25 (c) For individuals with one qualifying child, the credit 137.26 equals 8.5 percent of the first $6,920 of earned income and 8.5 137.27 percent of earned income over $12,080 but less than $13,450. 137.28 The credit is reduced by 5.73 percent of earned income or 137.29 modified adjusted gross income, whichever is greater, in excess 137.30 of $15,080, but in no case is the credit less than zero. 137.31 (d) For individuals with two or more qualifying children, 137.32 the credit equals ten percent of the first $9,720 of earned 137.33 income and 20 percent of earned income over $14,860 but less 137.34 than $16,800. The credit is reduced by 10.3 percent of earned 137.35 income or modified adjusted gross income, whichever is greater, 137.36 in excess of $17,890, but in no case is the credit less than 138.1 zero. 138.2 (e) For a nonresident or part-year resident, the credit 138.3 must be allocated based on the percentage calculated under 138.4 section 290.06, subdivision 2c, paragraph (e). 138.5 (f) For a person who was a resident for the entire tax year 138.6 and has earned income not subject to tax under this chapter, the 138.7 credit must be allocated based on the ratio of federal adjusted 138.8 gross income reduced by the earned income not subject to tax 138.9 under this chapter over federal adjusted gross income. 138.10 (g) For tax years beginning after December 31, 2001, and 138.11 before December 31, 2004, the $5,770 in paragraph (b)is138.12increased to $6,770, the $15,080 in paragraph (c)is increased138.13to $16,080, and the $17,890 in paragraph (d)is increased to138.14$18,890, after being adjusted for inflation under subdivision 7, 138.15 are each increased by $1,000 for married taxpayers filing joint 138.16 returns. 138.17 (h) For tax years beginning after December 31, 2004, and 138.18 before December 31, 2007, the $5,770 in paragraph (b)is138.19increased to $7,770, the $15,080 in paragraph (c)is increased138.20to $17,080, and the $17,890 in paragraph (d)is increased to138.21$19,890, after being adjusted for inflation under subdivision 7, 138.22 are each increased by $2,000 for married taxpayers filing joint 138.23 returns. 138.24 (i) For tax years beginning after December 31, 2007, and 138.25 before December 31, 2010, the $5,770 in paragraph (b)is138.26increased to $8,770, the $15,080 in paragraph (c)is increased138.27to $18,080, and the $17,890 in paragraph (d)is increased to138.28$20,890, after being adjusted for inflation under subdivision 7, 138.29 are each increased by $3,000 for married taxpayers filing joint 138.30 returns. For tax years beginning after December 31, 2008, the 138.31 $3,000 is adjusted annually for inflation under subdivision 7. 138.32 (j) The commissioner shall construct tables showing the 138.33 amount of the credit at various income levels and make them 138.34 available to taxpayers. The tables shall follow the schedule 138.35 contained in this subdivision, except that the commissioner may 138.36 graduate the transition between income brackets. 139.1 [EFFECTIVE DATE.] This section is effective for tax years 139.2 beginning after December 31, 2002. 139.3 Sec. 10. Minnesota Statutes 2002, section 290.0675, 139.4 subdivision 2, is amended to read: 139.5 Subd. 2. [CREDIT ALLOWED.] A married couple filing a joint 139.6 return is allowed a credit against the tax imposed under section 139.7 290.06. 139.8The minimum taxable income for the married couple to be139.9eligible for the credit is $25,680, and the minimum earned139.10income in order for the couple to be eligible for the credit is139.11$14,250 for each spouse.139.12 [EFFECTIVE DATE.] This section is effective for tax years 139.13 beginning after December 31, 2002. 139.14 Sec. 11. Minnesota Statutes 2002, section 290.0675, 139.15 subdivision 3, is amended to read: 139.16 Subd. 3. [CREDIT AMOUNT.] The credit amount is the 139.17 difference between the tax on the couple's joint Minnesota 139.18 taxable income under the rates and income levels in section 139.19 290.06, subdivision 2c, paragraph (a), as adjusted for the 139.20 taxable year by section 290.06, subdivision 2d, and the sum of 139.21 the tax under the rates and income levels of section 290.06, 139.22 subdivision 2c, paragraph (b), as adjusted for the taxable year 139.23 by section 290.06, subdivision 2d, on the earned income of the 139.24 lesser-earning spouse, and the tax under the rates and income 139.25 levels of section 290.06, subdivision 2c, paragraph (b), as 139.26 adjusted for the taxable year by section 290.06, subdivision 2d, 139.27 on the couple's joint Minnesota taxable income, minus the earned 139.28 income of the lesser-earning spouse. 139.29 The commissioner of revenue shall prepare and make 139.30 available to taxpayers a comprehensive table showing the credit 139.31 under this section at brackets of earnings of the lesser-earning 139.32 spouse and joint taxable income. The brackets of earnings shall 139.33 not be more than $2,000. 139.34 [EFFECTIVE DATE.] This section is effective for tax years 139.35 beginning after December 31, 2002. 139.36 Sec. 12. Minnesota Statutes 2002, section 290.0679, 140.1 subdivision 2, is amended to read: 140.2 Subd. 2. [CONDITIONS FOR ASSIGNMENT.] A qualifying 140.3 taxpayer may assign all or part of an anticipated refund for the 140.4 current and future taxable years to a financial institution or a 140.5 qualifying organization. A financial institution or qualifying 140.6 organization accepting assignment must pay the amount secured by 140.7 the assignment to a third-party vendor. The commissioner of 140.8 children, families, and learning shallprovide a list of140.9categories of, upon request from a third-party vendor, certify 140.10 that the vendor's products and servicesthatqualify for the 140.11 education creditto financial institutions and qualifying140.12organizations. A denial of a certification is subject to the 140.13 contested case procedure under chapter 14. A financial 140.14 institution or qualifying organization that accepts assignments 140.15 under this section must verify as part of the assignment 140.16 documentation that the product or service to be provided by the 140.17 third-party vendorqualifieshas been certified by the 140.18 commissioner of children, families, and learning as qualifying 140.19 for the education credit. The amount assigned for the current 140.20 and future taxable years may not exceed the maximum allowable 140.21 education credit for the current taxable year. Both the 140.22 taxpayer and spouse must consent to the assignment of a refund 140.23 from a joint return. 140.24 [EFFECTIVE DATE.] This section is effective for assignments 140.25 made on or after the day following final enactment. 140.26 Sec. 13. Minnesota Statutes 2002, section 290.0802, 140.27 subdivision 1, is amended to read: 140.28 Subdivision 1. [DEFINITIONS.] For purposes of this 140.29 section, the following terms have the meanings given. 140.30 (a) "Adjusted gross income" means federal adjusted gross 140.31 income as used in section 22(d) of the Internal Revenue Code for 140.32 the taxable year, plus a lump sum distribution as defined in 140.33 section 402(e)(3) of the Internal Revenue Code, and less any 140.34 pension, annuity, or disability benefits included in federal 140.35 gross income but not subject to state taxation other than the 140.36 subtraction allowed under section 290.01, subdivision 19b, 141.1 clause (4). 141.2 (b) "Disability income" means disability income as defined 141.3 in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 141.4 (c) "Nontaxable retirement and disability benefits" means 141.5 the amount of pension, annuity, or disability benefits that 141.6 would be included in the reduction under section 22(c)(3) of the 141.7 Internal Revenue Code and pension, annuity, or disability 141.8 benefits included in federal gross income but not subject to 141.9 state taxationother than the subtraction allowed under section141.10290.01, subdivision 19b, clause (4). 141.11 (d) "Qualified individual" means a qualified individual as 141.12 defined in section 22(b) of the Internal Revenue Code. 141.13(e) "Social security benefits above the second federal141.14threshold" means the amount of social security benefits included141.15in federal taxable income due to the provisions of section 13215141.16of the Omnibus Budget Reconciliation Act of 1993, Public Law141.17Number 103-66.141.18 [EFFECTIVE DATE.] This section is effective for tax years 141.19 beginning after December 31, 2002. 141.20 Sec. 14. Minnesota Statutes 2002, section 291.005, 141.21 subdivision 1, is amended to read: 141.22 Subdivision 1. Unless the context otherwise clearly 141.23 requires, the following terms used in this chapter shall have 141.24 the following meanings: 141.25 (1) "Federal gross estate" means the gross estate of a 141.26 decedent as valued and otherwise determined for federal estate 141.27 tax purposes by federal taxing authorities pursuant to the 141.28 provisions of the Internal Revenue Code. 141.29 (2) "Minnesota gross estate" means the federal gross estate 141.30 of a decedent after (a) excluding therefrom any property 141.31 included therein which has its situs outside Minnesotaand141.32pensions exempt from tax under this chapter pursuant to section141.33352.15, subdivision 1; 353.15, subdivision 1; 354.10,141.34subdivision 1; 354B.30; or 354C.165, and (b) including therein 141.35 any property omitted from the federal gross estate which is 141.36 includable therein, has its situs in Minnesota, and was not 142.1 disclosed to federal taxing authorities. 142.2 (3) "Personal representative" means the executor, 142.3 administrator or other person appointed by the court to 142.4 administer and dispose of the property of the decedent. If 142.5 there is no executor, administrator or other person appointed, 142.6 qualified, and acting within this state, then any person in 142.7 actual or constructive possession of any property having a situs 142.8 in this state which is included in the federal gross estate of 142.9 the decedent shall be deemed to be a personal representative to 142.10 the extent of the property and the Minnesota estate tax due with 142.11 respect to the property. 142.12 (4) "Resident decedent" means an individual whose domicile 142.13 at the time of death was in Minnesota. 142.14 (5) "Nonresident decedent" means an individual whose 142.15 domicile at the time of death was not in Minnesota. 142.16 (6) "Situs of property" means, with respect to real 142.17 property, the state or country in which it is located; with 142.18 respect to tangible personal property, the state or country in 142.19 which it was normally kept or located at the time of the 142.20 decedent's death; and with respect to intangible personal 142.21 property, the state or country in which the decedent was 142.22 domiciled at death. 142.23 (7) "Commissioner" means the commissioner of revenue or any 142.24 person to whom the commissioner has delegated functions under 142.25 this chapter. 142.26 (8) "Internal Revenue Code" means the United States 142.27 Internal Revenue Code of 1986, as amended through December 31, 142.2820002002. 142.29 [EFFECTIVE DATE.] This section is effective for estates of 142.30 decedents dying after December 31, 2002. 142.31 Sec. 15. Minnesota Statutes 2002, section 291.03, 142.32 subdivision 1, is amended to read: 142.33 Subdivision 1. [TAX AMOUNT.] The tax imposed shall be an 142.34 amount equal to the proportion of the maximum credit computed 142.35 under section 2011 of the Internal Revenue Code, as amended 142.36 through December 31, 2000, for state death taxes as the 143.1 Minnesota gross estate bears to the value of the federal gross 143.2 estate.For a resident decedent, the tax shall be the maximum143.3credit computed under section 2011 of the Internal Revenue Code143.4reduced by the amount of the death tax paid the other state and143.5credited against the federal estate tax if this results in a143.6larger amount of tax than the proportionate amount of the143.7credit.The tax determined under this paragraph shall not be 143.8 greater than the federal estate tax computed under section 2001 143.9 of the Internal Revenue Code after the allowance of the federal 143.10 credits allowed under section 2010 of the Internal Revenue Code 143.11 of 1986, as amended through December 31, 2000. For the purposes 143.12 of this section, expenses which are deducted for federal income 143.13 tax purposes under section 642(g) of the Internal Revenue Code 143.14 as amended through December 31, 2002, are not allowable in 143.15 computing the tax under this chapter. 143.16 [EFFECTIVE DATE.] This section is effective for estates of 143.17 decedents dying after December 31, 2002. 143.18 Sec. 16. Minnesota Statutes 2002, section 352.15, 143.19 subdivision 1, is amended to read: 143.20 Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money, 143.21 annuities, or other benefits mentioned in this chapter is 143.22 assignable either in law or in equity or subject tostate estate143.23tax, or toexecution, levy, attachment, garnishment, or other 143.24 legal process, except as provided in subdivision 1a or section 143.25 518.58, 518.581, or 518.6111. 143.26 [EFFECTIVE DATE.] This section is effective for estates of 143.27 decedents dying after December 31, 2002. 143.28 Sec. 17. Minnesota Statutes 2002, section 353.15, 143.29 subdivision 1, is amended to read: 143.30 Subdivision 1. [EXEMPTION; EXCEPTIONS.] No money, annuity, 143.31 or benefit provided for in this chapter is assignable or subject 143.32to any state estate tax, orto execution, levy, attachment, 143.33 garnishment, or legal process, except as provided in subdivision 143.34 2 or section 518.58, 518.581, or 518.6111. 143.35 [EFFECTIVE DATE.] This section is effective for estates of 143.36 decedents dying after December 31, 2002. 144.1 Sec. 18. Minnesota Statutes 2002, section 354.10, 144.2 subdivision 1, is amended to read: 144.3 Subdivision 1. [EXEMPTION; EXCEPTIONS.] The right of a 144.4 teacher to take advantage of the benefits provided by this 144.5 chapter, is a personal right only and is not assignable. All 144.6 money to the credit of a teacher's account in the fund or any 144.7 money payable to the teacher from the fund belongs to the state 144.8 of Minnesota until actually paid to the teacher or a beneficiary 144.9 under this chapter. The association may acknowledge a properly 144.10 completed power of attorney form. An assignment or attempted 144.11 assignment of a teacher's interest in the fund, or of the 144.12 beneficiary's interest in the fund, by a teacher or a 144.13 beneficiary is void and exemptfrom taxation under chapter 291144.14andfrom garnishment or levy under attachment or execution, 144.15 except as provided in subdivision 2 or 3, or section 518.58, 144.16 518.581, or 518.6111. 144.17 [EFFECTIVE DATE.] This section is effective for estates of 144.18 decedents dying after December 31, 2002. 144.19 Sec. 19. Minnesota Statutes 2002, section 354B.30, is 144.20 amended to read: 144.21 354B.30 [PROHIBITION ON LOANS OR PRETERMINATION 144.22 DISTRIBUTIONS.] 144.23 (a) No participant may obtain a loan from the plan or 144.24 obtain any distribution from the plan at a time before the 144.25 participant terminates the employment that gave rise to plan 144.26 coverage. 144.27 (b) No amounts to the credit of the plan are assignable 144.28 either in law or in equity,are subject to state estate tax,or 144.29 are subject to execution, levy, attachment, garnishment, or 144.30 other legal process, except as provided in section 518.58, 144.31 518.581, or 518.6111. 144.32 [EFFECTIVE DATE.] This section is effective for estates of 144.33 decedents dying after December 31, 2002. 144.34 Sec. 20. Minnesota Statutes 2002, section 354C.165, is 144.35 amended to read: 144.36 354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 145.1 DISTRIBUTIONS.] 145.2 (a) Except as provided in paragraph (c), no participant may 145.3 obtain a loan or any distribution from the plan before the 145.4 participant terminates the employment that gave rise to plan 145.5 coverage. 145.6 (b) No amounts to the credit of the plan are assignable 145.7 either in law or in equity,are subject to state estate tax,or 145.8 are subject to execution, levy, attachment, garnishment, or 145.9 other legal process, except as provided in section 518.58, 145.10 518.581, or 518.6111. 145.11 (c) Unless prohibited by or subject to a penalty under 145.12 federal law, a teacher who is a participant in the supplemental 145.13 retirement plan may request, in writing, a transfer of all or a 145.14 portion of the funds accumulated in the person's supplemental 145.15 plan account to the teachers retirement association to purchase 145.16 service credit under sections 354.53, 354.533, 354.534, 354.535, 145.17 354.536, 354.537, and 354.538 or to the teachers retirement fund 145.18 association to purchase service credit under sections 354A.097, 145.19 354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104. 145.20 Upon receipt of a valid request, the board shall execute the 145.21 transfer. The transfer must be a fund-to-fund transfer, and in 145.22 no event shall the participant directly receive any of the funds 145.23 while still employed by the board. In no event may the board 145.24 transfer more than the participant's account balance. The 145.25 board, in cooperation with the executive director of the 145.26 teachers retirement association, shall develop the forms for 145.27 requesting a transfer and the procedures for executing the 145.28 requested transfers. 145.29 [EFFECTIVE DATE.] This section is effective for estates of 145.30 decedents dying after December 31, 2002. 145.31 Sec. 21. Laws 2001, First Special Session chapter 5, 145.32 article 9, section 12, the effective date, is amended to read: 145.33 [EFFECTIVE DATE.] This section is effective for assignment 145.34 of refunds filed with the commissioner after December 31, 2001. 145.35The time period for filing assignments expires December 31,145.362003, but assignments filed on or before that date remain in146.1effect until satisfied or canceled.146.2 Sec. 22. [REPEALER.] 146.3 (a) Minnesota Statutes 2002, sections 290.0671, subdivision 146.4 3; and 290.0675, subdivision 5, are repealed effective for tax 146.5 years beginning after December 31, 2002. 146.6 (b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 146.7 8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed 146.8 effective the day following final enactment. 146.9 ARTICLE 7 146.10 FEDERAL UPDATE 146.11 Section 1. Minnesota Statutes 2002, section 289A.02, 146.12 subdivision 7, is amended to read: 146.13 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 146.14 defined otherwise, "Internal Revenue Code" means the Internal 146.15 Revenue Code of 1986, as amended throughMarch 15December 31, 146.16 2002. 146.17 [EFFECTIVE DATE.] This section is effective the day 146.18 following final enactment. 146.19 Sec. 2. Minnesota Statutes 2002, section 290.01, 146.20 subdivision 19, is amended to read: 146.21 Subd. 19. [NET INCOME.] The term "net income" means the 146.22 federal taxable income, as defined in section 63 of the Internal 146.23 Revenue Code of 1986, as amended through the date named in this 146.24 subdivision, incorporating any elections made by the taxpayer in 146.25 accordance with the Internal Revenue Code in determining federal 146.26 taxable income for federal income tax purposes, and with the 146.27 modifications provided in subdivisions 19a to 19f. 146.28 In the case of a regulated investment company or a fund 146.29 thereof, as defined in section 851(a) or 851(g) of the Internal 146.30 Revenue Code, federal taxable income means investment company 146.31 taxable income as defined in section 852(b)(2) of the Internal 146.32 Revenue Code, except that: 146.33 (1) the exclusion of net capital gain provided in section 146.34 852(b)(2)(A) of the Internal Revenue Code does not apply; 146.35 (2) the deduction for dividends paid under section 146.36 852(b)(2)(D) of the Internal Revenue Code must be applied by 147.1 allowing a deduction for capital gain dividends and 147.2 exempt-interest dividends as defined in sections 852(b)(3)(C) 147.3 and 852(b)(5) of the Internal Revenue Code; and 147.4 (3) the deduction for dividends paid must also be applied 147.5 in the amount of any undistributed capital gains which the 147.6 regulated investment company elects to have treated as provided 147.7 in section 852(b)(3)(D) of the Internal Revenue Code. 147.8 The net income of a real estate investment trust as defined 147.9 and limited by section 856(a), (b), and (c) of the Internal 147.10 Revenue Code means the real estate investment trust taxable 147.11 income as defined in section 857(b)(2) of the Internal Revenue 147.12 Code. 147.13 The net income of a designated settlement fund as defined 147.14 in section 468B(d) of the Internal Revenue Code means the gross 147.15 income as defined in section 468B(b) of the Internal Revenue 147.16 Code. 147.17 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 147.18 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 147.19 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 147.20 Protection Act, Public Law Number 104-188, the provisions of 147.21 Public Law Number 104-117, the provisions of sections 313(a) and 147.22 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 147.23 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 147.24 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 147.25 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 147.26 Public Law Number 105-34, the provisions of section 6010 of the 147.27 Internal Revenue Service Restructuring and Reform Act of 1998, 147.28 Public Law Number 105-206, the provisions of section 4003 of the 147.29 Omnibus Consolidated and Emergency Supplemental Appropriations 147.30 Act, 1999, Public Law Number 105-277, and the provisions of 147.31 section 318 of the Consolidated Appropriation Act of 2001, 147.32 Public Law Number 106-554, shall become effective at the time 147.33 they become effective for federal purposes. 147.34 The Internal Revenue Code of 1986, as amended through 147.35 December 31, 1996, shall be in effect for taxable years 147.36 beginning after December 31, 1996. 148.1 The provisions of sections 202(a) and (b), 221(a), 225, 148.2 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 148.3 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 148.4 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 148.5 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 148.6 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 148.7 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 148.8 7002, and 7003 of the Internal Revenue Service Restructuring and 148.9 Reform Act of 1998, Public Law Number 105-206, the provisions of 148.10 section 3001 of the Omnibus Consolidated and Emergency 148.11 Supplemental Appropriations Act, 1999, Public Law Number 148.12 105-277, the provisions of section 3001 of the Miscellaneous 148.13 Trade and Technical Corrections Act of 1999, Public Law Number 148.14 106-36, and the provisions of section 316 of the Consolidated 148.15 Appropriation Act of 2001, Public Law Number 106-554, shall 148.16 become effective at the time they become effective for federal 148.17 purposes. 148.18 The Internal Revenue Code of 1986, as amended through 148.19 December 31, 1997, shall be in effect for taxable years 148.20 beginning after December 31, 1997. 148.21 The provisions of sections 5002, 6009, 6011, and 7001 of 148.22 the Internal Revenue Service Restructuring and Reform Act of 148.23 1998, Public Law Number 105-206, the provisions of section 9010 148.24 of the Transportation Equity Act for the 21st Century, Public 148.25 Law Number 105-178, the provisions of sections 1004, 4002, and 148.26 5301 of the Omnibus Consolidation and Emergency Supplemental 148.27 Appropriations Act, 1999, Public Law Number 105-277, the 148.28 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 148.29 Act of 1998, Public Law Number 105-369, the provisions of 148.30 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 148.31 Work Incentives Improvement Act of 1999, Public Law Number 148.32 106-170, the provisions of the Installment Tax Correction Act of 148.33 2000, Public Law Number 106-573, and the provisions of section 148.34 309 of the Consolidated Appropriation Act of 2001, Public Law 148.35 Number 106-554, shall become effective at the time they become 148.36 effective for federal purposes. 149.1 The Internal Revenue Code of 1986, as amended through 149.2 December 31, 1998, shall be in effect for taxable years 149.3 beginning after December 31, 1998. 149.4 The provisions of the FSC Repeal and Extraterritorial 149.5 Income Exclusion Act of 2000, Public Law Number 106-519, and the 149.6 provision of section 412 of the Job Creation and Worker 149.7 Assistance Act of 2002, Public Law Number 107-147, shall become 149.8 effective at the time it became effective for federal purposes. 149.9 The Internal Revenue Code of 1986, as amended through 149.10 December 31, 1999, shall be in effect for taxable years 149.11 beginning after December 31, 1999. The provisions of sections 149.12 306 and 401 of the Consolidated Appropriation Act of 2001, 149.13 Public Law Number 106-554, and the provision of section 149.14 632(b)(2)(A) of the Economic Growth and Tax Relief 149.15 Reconciliation Act of 2001, Public Law Number 107-16, and 149.16 provisions of sections 101 and 402 of the Job Creation and 149.17 Worker Assistance Act of 2002, Public Law Number 107-147, shall 149.18 become effective at the same time it became effective for 149.19 federal purposes. 149.20 The Internal Revenue Code of 1986, as amended through 149.21 December 31, 2000, shall be in effect for taxable years 149.22 beginning after December 31, 2000. The provisions of sections 149.23 659a and 671 of the Economic Growth and Tax Relief 149.24 Reconciliation Act of 2001, Public Law Number 107-16, the 149.25 provisions of sections 104, 105, and 111 of the Victims of 149.26 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and 149.27 the provisions of sections 201, 403, 413, and 606 of the Job 149.28 Creation and Worker Assistance Act of 2002, Public Law Number 149.29 107-147, shall become effective at the same time it became 149.30 effective for federal purposes. 149.31 The Internal Revenue Code of 1986, as amended through March 149.32 15, 2002, shall be in effect for taxable years beginning after 149.33 December 31, 2001. 149.34 The provisions of sections 101 and 102 of the Victims of 149.35 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 149.36 shall become effective at the same time it becomes effective for 150.1 federal purposes. 150.2 The Internal Revenue Code of 1986, as amended through 150.3 December 31, 2002, shall be in effect for taxable years 150.4 beginning after December 31, 2002. 150.5 Except as otherwise provided, references to the Internal 150.6 Revenue Code in subdivisions 19a to 19g mean the code in effect 150.7 for purposes of determining net income for the applicable year. 150.8 [EFFECTIVE DATE.] This section is effective the day 150.9 following final enactment. 150.10 Sec. 3. Minnesota Statutes 2002, section 290.01, 150.11 subdivision 31, is amended to read: 150.12 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 150.13 defined otherwise, "Internal Revenue Code" means the Internal 150.14 Revenue Code of 1986, as amended throughMarch 15December 31, 150.15 2002. 150.16 [EFFECTIVE DATE.] This section is effective the day 150.17 following final enactment. 150.18 Sec. 4. Minnesota Statutes 2002, section 290A.03, 150.19 subdivision 15, is amended to read: 150.20 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 150.21 means the Internal Revenue Code of 1986, as amended 150.22 throughMarch 15December 31, 2002. 150.23 [EFFECTIVE DATE.] This section is effective for refunds 150.24 payable for rents paid in 2003 and thereafter and property taxes 150.25 payable in 2004 and thereafter. 150.26 ARTICLE 8 150.27 DEPARTMENT PROPERTY TAX INITIATIVES 150.28 Section 1. Minnesota Statutes 2002, section 270.06, is 150.29 amended to read: 150.30 270.06 [POWERS AND DUTIES.] 150.31 The commissioner of revenue shall: 150.32 (1) have and exercise general supervision over the 150.33 administration of the assessment and taxation laws of the state, 150.34 over assessors, town, county, and city boards of review and 150.35 equalization, and all other assessing officers in the 150.36 performance of their duties, to the end that all assessments of 151.1 property be made relatively just and equal in compliance with 151.2 the laws of the state; 151.3 (2) confer with, advise, and give the necessary 151.4 instructions and directions to local assessors and local boards 151.5 of review throughout the state as to their duties under the laws 151.6 of the state; 151.7 (3) direct proceedings, actions, and prosecutions to be 151.8 instituted to enforce the laws relating to the liability and 151.9 punishment of public officers and officers and agents of 151.10 corporations for failure or negligence to comply with the 151.11 provisions of the laws of this state governing returns of 151.12 assessment and taxation of property, and cause complaints to be 151.13 made against local assessors, members of boards of equalization, 151.14 members of boards of review, or any other assessing or taxing 151.15 officer, to the proper authority, for their removal from office 151.16 for misconduct or negligence of duty; 151.17 (4) require county attorneys to assist in the commencement 151.18 of prosecutions in actions or proceedings for removal, 151.19 forfeiture and punishment for violation of the laws of this 151.20 state in respect to the assessment and taxation of property in 151.21 their respective districts or counties; 151.22 (5) require town, city, county, and other public officers 151.23 to report information as to the assessment of property, 151.24 collection of taxes received from licenses and other sources, 151.25 and such other information as may be needful in the work of the 151.26 department of revenue, in such form and upon such blanks as the 151.27 commissioner may prescribe; 151.28 (6) require individuals, copartnerships, companies, 151.29 associations, and corporations to furnish information concerning 151.30 their capital, funded or other debt, current assets and 151.31 liabilities, earnings, operating expenses, taxes, as well as all 151.32 other statements now required by law for taxation purposes; 151.33 (7) subpoena witnesses, at a time and place reasonable 151.34 under the circumstances, to appear and give testimony, and to 151.35 produce books, records, papers and documents for inspection and 151.36 copying relating to any matter which the commissioner may have 152.1 authority to investigate or determine; 152.2 (8) issue a subpoena which does not identify the person or 152.3 persons with respect to whose liability the subpoena is issued, 152.4 but only if (a) the subpoena relates to the investigation of a 152.5 particular person or ascertainable group or class of persons, 152.6 (b) there is a reasonable basis for believing that such person 152.7 or group or class of persons may fail or may have failed to 152.8 comply with any law administered by the commissioner, (c) the 152.9 information sought to be obtained from the examination of the 152.10 records (and the identity of the person or persons with respect 152.11 to whose liability the subpoena is issued) is not readily 152.12 available from other sources, (d) the subpoena is clear and 152.13 specific as to the information sought to be obtained, and (e) 152.14 the information sought to be obtained is limited solely to the 152.15 scope of the investigation. Provided further that the party 152.16 served with a subpoena which does not identify the person or 152.17 persons with respect to whose tax liability the subpoena is 152.18 issued shall have the right, within 20 days after service of the 152.19 subpoena, to petition the district court for the judicial 152.20 district in which lies the county in which that party is located 152.21 for a determination as to whether the commissioner of revenue 152.22 has complied with all the requirements in (a) to (e), and thus, 152.23 whether the subpoena is enforceable. If no such petition is 152.24 made by the party served within the time prescribed, the 152.25 subpoena shall have the force and effect of a court order; 152.26 (9) cause the deposition of witnesses residing within or 152.27 without the state, or absent therefrom, to be taken, upon notice 152.28 to the interested party, if any, in like manner that depositions 152.29 of witnesses are taken in civil actions in the district court, 152.30 in any matter which the commissioner may have authority to 152.31 investigate or determine; 152.32 (10) investigate the tax laws of other states and countries 152.33 and to formulate and submit to the legislature such legislation 152.34 as the commissioner may deem expedient to prevent evasions of 152.35 assessment and taxing laws, and secure just and equal taxation 152.36 and improvement in the system of assessment and taxation in this 153.1 state; 153.2 (11) consult and confer with the governor upon the subject 153.3 of taxation, the administration of the laws in regard thereto, 153.4 and the progress of the work of the department of revenue, and 153.5 furnish the governor, from time to time, such assistance and 153.6 information as the governor may require relating to tax matters; 153.7 (12) transmit to the governor, on or before the third 153.8 Monday in December of each even-numbered year, and to each 153.9 member of the legislature, on or before November 15 of each 153.10 even-numbered year, the report of the department of revenue for 153.11 the preceding years, showing all the taxable property in the 153.12 state and the value of the same, in tabulated form; 153.13 (13) inquire into the methods of assessment and taxation 153.14 and ascertain whether the assessors faithfully discharge their 153.15 duties, particularly as to their compliance with the laws 153.16 requiring the assessment of all property not exempt from 153.17 taxation; 153.18 (14) administer and enforce the assessment and collection 153.19 of state taxes and fees, including the use of any remedy 153.20 available to nongovernmental creditors, and, from time to time, 153.21 make, publish, and distribute rules for the administration and 153.22 enforcement ofassessments and feeslaws administered by the 153.23 commissioner and state tax laws. The rules have the force of 153.24 law; 153.25 (15) prepare blank forms for the returns required by state 153.26 tax law and distribute them throughout the state, furnishing 153.27 them subject to charge on application; 153.28 (16) prescribe rules governing the qualification and 153.29 practice of agents, attorneys, or other persons representing 153.30 taxpayers before the commissioner. The rules may require that 153.31 those persons, agents, and attorneys show that they are of good 153.32 character and in good repute, have the necessary qualifications 153.33 to give taxpayers valuable services, and are otherwise competent 153.34 to advise and assist taxpayers in the presentation of their case 153.35 before being recognized as representatives of taxpayers. After 153.36 due notice and opportunity for hearing, the commissioner may 154.1 suspend and bar from further practice before the commissioner 154.2 any person, agent, or attorney who is shown to be incompetent or 154.3 disreputable, who refuses to comply with the rules, or who with 154.4 intent to defraud, willfully or knowingly deceives, misleads, or 154.5 threatens a taxpayer or prospective taxpayer, by words, 154.6 circular, letter, or by advertisement. This clause does not 154.7 curtail the rights of individuals to appear in their own behalf 154.8 or partners or corporations' officers to appear in behalf of 154.9 their respective partnerships or corporations; 154.10 (17) appoint agents as the commissioner considers necessary 154.11 to make examinations and determinations. The agents have the 154.12 rights and powers conferred on the commissioner to subpoena, 154.13 examine, and copy books, records, papers, or memoranda, subpoena 154.14 witnesses, administer oaths and affirmations, and take 154.15 testimony. In addition to administrative subpoenas of the 154.16 commissioner and the agents, upon demand of the commissioner or 154.17 an agent, the court administrator of any district court shall 154.18 issue a subpoena for the attendance of a witness or the 154.19 production of books, papers, records, or memoranda before the 154.20 agent for inspection and copying. Disobedience of a court 154.21 administrator's subpoena shall be punished by the district court 154.22 of the district in which the subpoena is issued, or in the case 154.23 of a subpoena issued by the commissioner or an agent, by the 154.24 district court of the district in which the party served with 154.25 the subpoena is located, in the same manner as contempt of the 154.26 district court; 154.27 (18) appoint and employ additional help, purchase supplies 154.28 or materials, or incur other expenditures in the enforcement of 154.29 state tax laws as considered necessary. The salaries of all 154.30 agents and employees provided for in this chapter shall be fixed 154.31 by the appointing authority, subject to the approval of the 154.32 commissioner of administration; 154.33 (19) execute and administer any agreement with the 154.34 secretary of the treasury of the United States or a 154.35 representative of another state regarding the exchange of 154.36 information and administration of the tax laws; 155.1 (20) authorize the use of unmarked motor vehicles to 155.2 conduct seizures or criminal investigations pursuant to the 155.3 commissioner's authority; and 155.4 (21) exercise other powers and perform other duties 155.5 required of or imposed upon the commissioner of revenue by law. 155.6 [EFFECTIVE DATE.] This section is effective the day 155.7 following final enactment. 155.8 Sec. 2. Minnesota Statutes 2002, section 270.10, 155.9 subdivision 1a, is amended to read: 155.10 Subd. 1a. [NOTIFICATION TO TAXPAYER.] At the same time 155.11 that notice of the assessment, determination, or order of the 155.12 commissioner is given to a taxpayer, the taxpayer must be 155.13 notified in writing of the right to appeal to the tax court, and 155.14 if applicable, to the small claims division. Except in the case 155.15 of mathematical or clerical errors, the notice must contain a 155.16 description of the basis for, including applicable law and other 155.17 factors considered in the determination, and a listing of the 155.18 amounts of tax due, interest, additions to tax, and penalties. 155.19 Failure to provide all the required information does not 155.20 invalidate the notice for purposes of satisfying statutory 155.21 notice requirements if the notice contains sufficient 155.22 information to advise the taxpayer that an assessment, order, or 155.23 other determination has been made. The taxpayer may request 155.24 further clarification within the time provided for appealing the 155.25 determination.In any notice of assessment, determination, or155.26order dealing with property valuation or assessment for property155.27tax purposes by the commissioner of revenue or a local unit of155.28government, the taxpayer must be notified in writing that a155.29taxpayer must appeal to the town or city board of equalization155.30and to the county board of equalization before appealing to the155.31small claims division of the tax court, except for those155.32taxpayers whose original assessments are determined by the155.33commissioner of revenue.155.34 [EFFECTIVE DATE.] This section is effective the day 155.35 following final enactment. 155.36 Sec. 3. Minnesota Statutes 2002, section 272.02, is 156.1 amended by adding a subdivision to read: 156.2 Subd. 56. [COMPREHENSIVE HEALTH ASSOCIATION.] All property 156.3 owned by the comprehensive health association is exempt to the 156.4 extent provided in section 62E.10, subdivision 1. 156.5 [EFFECTIVE DATE.] This section is effective the day 156.6 following final enactment. 156.7 Sec. 4. Minnesota Statutes 2002, section 272.02, is 156.8 amended by adding a subdivision to read: 156.9 Subd. 57. [PRIVATE CEMETERIES.] All property owned by 156.10 private cemeteries is exempt to the extent provided in section 156.11 307.09. 156.12 [EFFECTIVE DATE.] This section is effective the day 156.13 following final enactment. 156.14 Sec. 5. Minnesota Statutes 2002, section 272.02, is 156.15 amended by adding a subdivision to read: 156.16 Subd. 58. [WESTERN LAKE SUPERIOR SANITARY BOARD.] All 156.17 property owned, leased, controlled, used, or occupied for 156.18 public, governmental, and municipal purposes by the Western Lake 156.19 Superior Sanitary Board is exempt to the extent provided in 156.20 section 458D.23. 156.21 [EFFECTIVE DATE.] This section is effective the day 156.22 following final enactment. 156.23 Sec. 6. Minnesota Statutes 2002, section 272.02, is 156.24 amended by adding a subdivision to read: 156.25 Subd. 59. [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished 156.26 sale or rental projects are exempt to the extent provided in 156.27 section 469.155, subdivision 17. 156.28 [EFFECTIVE DATE.] This section is effective the day 156.29 following final enactment. 156.30 Sec. 7. Minnesota Statutes 2002, section 272.02, is 156.31 amended by adding a subdivision to read: 156.32 Subd. 60. [SKYWAYS.] The pedestrian skyway system, 156.33 underground pedestrian concourse, the people mover system, and 156.34 publicly owned parking structures are exempt to the extent 156.35 provided in section 469.127. 156.36 [EFFECTIVE DATE.] This section is effective the day 157.1 following final enactment. 157.2 Sec. 8. Minnesota Statutes 2002, section 272.02, is 157.3 amended by adding a subdivision to read: 157.4 Subd. 61. [MUNICIPAL RECREATION FACILITIES.] All property 157.5 acquired and used by a city is exempt to the extent provided in 157.6 section 471.191, subdivision 4. 157.7 [EFFECTIVE DATE.] This section is effective the day 157.8 following final enactment. 157.9 Sec. 9. Minnesota Statutes 2002, section 272.02, is 157.10 amended by adding a subdivision to read: 157.11 Subd. 62. [WATER AND WASTEWATER TREATMENT 157.12 FACILITIES.] Related facilities owned by water and wastewater 157.13 treatment providers who have contracted with a municipality to 157.14 provide capital intensive public services to the municipality 157.15 are exempt to the extent provided in section 471A.05. 157.16 [EFFECTIVE DATE.] This section is effective the day 157.17 following final enactment. 157.18 Sec. 10. Minnesota Statutes 2002, section 272.12, is 157.19 amended to read: 157.20 272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 157.21 When: 157.22 (a) a deed or other instrument conveying land, 157.23 (b) a plat of any town site or addition thereto, 157.24 (c) a survey required pursuant to section 508.47, 157.25 (d) a condominium plat subject to chapter 515 or 515A or a 157.26 declaration that contains such a plat, or 157.27 (e) a common interest community plat subject to chapter 157.28 515B or a declaration that contains such a plat, 157.29 is presented to the county auditor for transfer, the auditor 157.30 shall ascertain from the records if there be taxes delinquent 157.31 upon the land described therein, or if it has been sold for 157.32 taxes. An assignment of a sheriff's or referee's certificate of 157.33 sale, when the certificate of sale describes real estate, and 157.34 certificates of redemption from mortgage or lien foreclosure 157.35 sales, when the certificate of redemption encompasses real 157.36 estate and is issued to a junior creditor, are considered 158.1 instruments conveying land for the purposes of this section and 158.2 section 272.121. If there are taxes delinquent, the auditor 158.3 shall certify to the same; and upon payment of such taxes, or in 158.4 case no taxes are delinquent, shall transfer the land upon the 158.5 books of the auditor's office, and note upon the instrument, 158.6 over official signature, the words, "no delinquent taxes and 158.7 transfer entered," or, if the land described has been sold or 158.8 assigned to an actual purchaser for taxes, the words "paid by 158.9 sale of land described within;" and, unless such statement is 158.10 made upon such instrument, the county recorder or the registrar 158.11 of titles shall refuse to receive or record the same; provided, 158.12 that sheriff's or referees' certificates of sale on execution or 158.13 foreclosure of a lien or mortgage, certificates of redemption 158.14 from mortgage or lien foreclosure sales issued to the redeeming 158.15 mortgagor or lienee, deeds of distribution made by a personal 158.16 representative in probate proceedings, decrees and judgments, 158.17 receivers receipts, patents, and copies of town or statutory 158.18 city plats, in case the original plat filed in the office of the 158.19 county recorder has been lost or destroyed, and the instruments 158.20 releasing, removing and discharging reversionary and forfeiture 158.21 provisions affecting title to land and instruments releasing, 158.22 removing or discharging easement rights in land or building or 158.23 other restrictions, may be recorded without such certificate; 158.24 and, provided that instruments conveying land and, as 158.25 appurtenant thereto an easement over adjacent tract or tracts of 158.26 land, may be recorded without such certificate as to the land 158.27 covered by such easement; and provided further, that any 158.28 instrument granting an easement made in favor of any public 158.29 utility or pipe line for conveying gas, liquids or solids in 158.30 suspension, in the nature of a right-of-way over, along, across 158.31 or under a tract of land may be recorded without such 158.32 certificate as to the land covered by such easement.Any158.33instrument amending or restating the declarations, bylaws,158.34plats, or other enablingDocuments governing homeowners 158.35 associations of condominiums, townhouses, common interest 158.36 ownership communities, and other planned unit developments may 159.1 be recorded without the auditor's certificate to the extent 159.2 provided in section 515B.1-116(f). 159.3 A deed of distribution made by a personal representative in 159.4 a probate proceeding, a decree, or a judgment that conveys land 159.5 shall be presented to the county auditor, who shall transfer the 159.6 land upon the books of the auditor's office and note upon the 159.7 instrument, over official signature, the words, "transfer 159.8 entered", and the instrument may then be recorded. A decree or 159.9 judgment that affects title to land but does not convey land may 159.10 be recorded without presentation to the auditor. 159.11 A violation of this section by the county recorder or the 159.12 registrar of titles shall be a gross misdemeanor, and, in 159.13 addition to the punishment therefor, the recorder or registrar 159.14 shall be liable to the grantee of any instrument so recorded for 159.15 the amount of any damages sustained. 159.16 When, as a condition to permitting the recording of deed or 159.17 other instrument affecting the title to real estate previously 159.18 forfeited to the state under the provisions of sections 281.16 159.19 to 281.25, county officials, after such real estate has been 159.20 purchased or repurchased, have required the payment of taxes 159.21 erroneously assumed to have accrued against such real estate 159.22 after forfeiture and before the date of purchase or repurchase, 159.23 the sum required to be so paid shall be refunded to the persons 159.24 entitled thereto out of moneys in the funds in which the sum so 159.25 paid was placed. Delinquent taxes are those taxes deemed 159.26 delinquent under section 279.02. 159.27 [EFFECTIVE DATE.] This section is effective for deeds or 159.28 instruments accepted for recording or registration on or after 159.29 July 1, 2003. 159.30 Sec. 11. Minnesota Statutes 2002, section 273.05, 159.31 subdivision 1, is amended to read: 159.32 Subdivision 1. [APPOINTMENT OF TOWN AND CITY ASSESSORS.] 159.33 Notwithstanding any other provision of law all town assessors 159.34 shall be appointed by the town board, and notwithstanding any 159.35 charter provisions to the contrary, all city assessors shall be 159.36 appointed by the city council or other appointing authority as 160.1 provided by law or charter.Such assessors shall be residents160.2of the state but need not be a resident of the town or city for160.3which they are appointed.They shall be selected and appointed 160.4 because of their knowledge and training in the field of property 160.5 taxation. All town and statutory city assessors shall be 160.6 appointed for indefinite terms. A town or statutory city 160.7 assessor who is an employee may be dismissed by the appointing 160.8 authority for cause. The term of the town or city assessors may 160.9 be terminated at any time by the town board or city council on 160.10 charges by the commissioner of revenue of inefficiency or 160.11 neglect of duty. Vacancies in the office of town or city 160.12 assessor shall be filled within 90 days by appointment of the 160.13 respective appointing authority indicated above. If the vacancy 160.14 is not filled within 90 days, the office shall be terminated. 160.15 When a vacancy in the office of town or city assessor is not 160.16 filled by appointment, and it is imperative that the office of 160.17 assessor be filled, the county auditor shall appoint some 160.18 resident of the county as assessor for such town or city. The 160.19 county auditor may appoint the county assessor as assessor for 160.20 such town or city, in which case the town or city shall pay to 160.21 the county treasurer the amount determined by the county auditor 160.22 to be due for the services performed and expenses incurred by 160.23 the county assessor in acting as assessor for such town or 160.24 city. The term of any town or statutory city assessor in a 160.25 county electing in accordance with section 273.052 shall be 160.26 terminated as provided in section 273.055. 160.27 The commissioner of revenue may recommend to the state 160.28 board of assessors the nonrenewal, suspension, or revocation of 160.29 an assessor's license as provided in sections 270.41 to 270.53. 160.30 [EFFECTIVE DATE.] This section is effective the day 160.31 following final enactment and applies to every town or city 160.32 assessor whether that assessor was appointed before, on, or 160.33 after the effective date. 160.34 Sec. 12. Minnesota Statutes 2002, section 273.061, is 160.35 amended by adding a subdivision to read: 160.36 Subd. 1a. [COMPATIBLE OFFICES.] A person appointed as the 161.1 county assessor also may serve as the county auditor, county 161.2 treasurer, or county auditor-treasurer if those offices are 161.3 appointive, provided that the person in the combined appointed 161.4 office must not serve on the county board of appeal and 161.5 equalization under section 274.13. In a county in which the 161.6 functions of the county assessor are combined with those of the 161.7 county auditor or county auditor-treasurer, the county board may 161.8 not delegate any authority, power, or responsibility under 161.9 section 375.192, subdivision 4. 161.10 Sec. 13. Minnesota Statutes 2002, section 273.061, is 161.11 amended by adding a subdivision to read: 161.12 Subd. 1b. [COMPATIBLE OFFICES IN COUNTIES CHANGING TO 161.13 APPOINTED AUDITOR.] In a county in which the office of auditor, 161.14 treasurer, or auditor-treasurer is an elective position, a 161.15 person appointed as the county assessor also may serve as the 161.16 county auditor, county treasurer, or county auditor-treasurer if 161.17 a proposal to make the affected office appointive has been 161.18 approved as required by other law and will be effective within 161.19 five years. 161.20 Sec. 14. Minnesota Statutes 2002, section 273.061, is 161.21 amended by adding a subdivision to read: 161.22 Subd. 1c. [INCOMPATIBLE OFFICES.] The person appointed as 161.23 the county assessor must not also be the county attorney, a 161.24 county board member, an elected county auditor, an elected 161.25 county treasurer, an elected county auditor-treasurer, a town 161.26 board supervisor for a town in the same county, or a city mayor 161.27 or council member for a city in the same county. The person 161.28 appointed as the city assessor must not also be a city council 161.29 member or mayor for the same city. A person appointed as the 161.30 town assessor must not also be a town board supervisor for the 161.31 same town. Except as provided in subdivision 1b, an assessor 161.32 who accepts a position that is incompatible with the office of 161.33 assessor is deemed to have resigned from the assessor position. 161.34 Sec. 15. Minnesota Statutes 2002, section 273.11, 161.35 subdivision 1a, is amended to read: 161.36 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 162.1 property classified as agricultural homestead or nonhomestead, 162.2 residential homestead or nonhomestead, timber, or noncommercial 162.3 seasonal residential recreationalresidential, the assessor 162.4 shall compare the value with the taxable portion of the value 162.5 determined in the preceding assessment. 162.6 For assessment year 2002, the amount of the increase shall 162.7 not exceed the greater of (1) ten percent of the value in the 162.8 preceding assessment, or (2) 15 percent of the difference 162.9 between the current assessment and the preceding assessment. 162.10 For assessment year 2003, the amount of the increase shall 162.11 not exceed the greater of (1) 12 percent of the value in the 162.12 preceding assessment, or (2) 20 percent of the difference 162.13 between the current assessment and the preceding assessment. 162.14 For assessment year 2004, the amount of the increase shall 162.15 not exceed the greater of (1) 15 percent of the value in the 162.16 preceding assessment, or (2) 25 percent of the difference 162.17 between the current assessment and the preceding assessment. 162.18 For assessment year 2005, the amount of the increase shall 162.19 not exceed the greater of (1) 15 percent of the value in the 162.20 preceding assessment, or (2) 33 percent of the difference 162.21 between the current assessment and the preceding assessment. 162.22 For assessment year 2006, the amount of the increase shall 162.23 not exceed the greater of (1) 15 percent of the value in the 162.24 preceding assessment, or (2) 50 percent of the difference 162.25 between the current assessment and the preceding assessment. 162.26 This limitation shall not apply to increases in value due 162.27 to improvements. For purposes of this subdivision, the term 162.28 "assessment" means the value prior to any exclusion under 162.29 subdivision 16. 162.30 The provisions of this subdivision shall be in effect 162.31 through assessment year 2006 as provided in this subdivision. 162.32 For purposes of the assessment/sales ratio study conducted 162.33 under section 127A.48, and the computation of state aids paid 162.34 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 162.35 477A, market values and net tax capacities determined under this 162.36 subdivision and subdivision 16, shall be used. 163.1 [EFFECTIVE DATE.] This section is effective the day 163.2 following final enactment. 163.3 Sec. 16. Minnesota Statutes 2002, section 273.124, 163.4 subdivision 1, is amended to read: 163.5 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 163.6 that is occupied and used for the purposes of a homestead by its 163.7 owner, who must be a Minnesota resident, is a residential 163.8 homestead. 163.9 Agricultural land, as defined in section 273.13, 163.10 subdivision 23, that is occupied and used as a homestead by its 163.11 owner, who must be a Minnesota resident, is an agricultural 163.12 homestead. 163.13 Dates for establishment of a homestead and homestead 163.14 treatment provided to particular types of property are as 163.15 provided in this section. 163.16 Property held by a trustee under a trust is eligible for 163.17 homestead classification if the requirements under this chapter 163.18 are satisfied. 163.19 The assessor shall require proof, as provided in 163.20 subdivision 13, of the facts upon which classification as a 163.21 homestead may be determined. Notwithstanding any other law, the 163.22 assessor may at any time require a homestead application to be 163.23 filed in order to verify that any property classified as a 163.24 homestead continues to be eligible for homestead status. 163.25 Notwithstanding any other law to the contrary, the department of 163.26 revenue may, upon request from an assessor, verify whether an 163.27 individual who is requesting or receiving homestead 163.28 classification has filed a Minnesota income tax return as a 163.29 resident for the most recent taxable year for which the 163.30 information is available. 163.31 When there is a name change or a transfer of homestead 163.32 property, the assessor may reclassify the property in the next 163.33 assessment unless a homestead application is filed to verify 163.34 that the property continues to qualify for homestead 163.35 classification. 163.36 (b) For purposes of this section, homestead property shall 164.1 include property which is used for purposes of the homestead but 164.2 is separated from the homestead by a road, street, lot, 164.3 waterway, or other similar intervening property. The term "used 164.4 for purposes of the homestead" shall include but not be limited 164.5 to uses for gardens, garages, or other outbuildings commonly 164.6 associated with a homestead, but shall not include vacant land 164.7 held primarily for future development. In order to receive 164.8 homestead treatment for the noncontiguous property, the owner 164.9 must use the property for the purposes of the homestead, and 164.10 must apply to the assessor, both by the deadlines given in 164.11 subdivision 9. After initial qualification for the homestead 164.12 treatment, additional applications for subsequent years are not 164.13 required. 164.14 (c) Residential real estate that is occupied and used for 164.15 purposes of a homestead by a relative of the owner is a 164.16 homestead but only to the extent of the homestead treatment that 164.17 would be provided if the related owner occupied the property. 164.18 For purposes of this paragraph and paragraph (g), "relative" 164.19 means a parent, stepparent, child, stepchild, grandparent, 164.20 grandchild, brother, sister, uncle, aunt, nephew, or niece. 164.21 This relationship may be by blood or marriage. Property that 164.22 has been classified as seasonal residential recreational 164.23residentialproperty at any time during which it has been owned 164.24 by the current owner or spouse of the current owner will not be 164.25 reclassified as a homestead unless it is occupied as a homestead 164.26 by the owner; this prohibition also applies to property that, in 164.27 the absence of this paragraph, would have been classified as 164.28 seasonal residential recreationalresidentialproperty at the 164.29 time when the residence was constructed. Neither the related 164.30 occupant nor the owner of the property may claim a property tax 164.31 refund under chapter 290A for a homestead occupied by a 164.32 relative. In the case of a residence located on agricultural 164.33 land, only the house, garage, and immediately surrounding one 164.34 acre of land shall be classified as a homestead under this 164.35 paragraph, except as provided in paragraph (d). 164.36 (d) Agricultural property that is occupied and used for 165.1 purposes of a homestead by a relative of the owner, is a 165.2 homestead, only to the extent of the homestead treatment that 165.3 would be provided if the related owner occupied the property, 165.4 and only if all of the following criteria are met: 165.5 (1) the relative who is occupying the agricultural property 165.6 is a son, daughter, grandson, granddaughter, father, or mother 165.7 of the owner of the agricultural property or a son, daughter, 165.8 grandson, or granddaughter of the spouse of the owner of the 165.9 agricultural property; 165.10 (2) the owner of the agricultural property must be a 165.11 Minnesota resident; 165.12 (3) the owner of the agricultural property must not receive 165.13 homestead treatment on any other agricultural property in 165.14 Minnesota; and 165.15 (4) the owner of the agricultural property is limited to 165.16 only one agricultural homestead per family under this paragraph. 165.17 Neither the related occupant nor the owner of the property 165.18 may claim a property tax refund under chapter 290A for a 165.19 homestead occupied by a relative qualifying under this 165.20 paragraph. For purposes of this paragraph, "agricultural 165.21 property" means the house, garage, other farm buildings and 165.22 structures, and agricultural land. 165.23 Application must be made to the assessor by the owner of 165.24 the agricultural property to receive homestead benefits under 165.25 this paragraph. The assessor may require the necessary proof 165.26 that the requirements under this paragraph have been met. 165.27 (e) In the case of property owned by a property owner who 165.28 is married, the assessor must not deny homestead treatment in 165.29 whole or in part if only one of the spouses occupies the 165.30 property and the other spouse is absent due to: (1) marriage 165.31 dissolution proceedings, (2) legal separation, (3) employment or 165.32 self-employment in another location, or (4) other personal 165.33 circumstances causing the spouses to live separately, not 165.34 including an intent to obtain two homestead classifications for 165.35 property tax purposes. To qualify under clause (3), the 165.36 spouse's place of employment or self-employment must be at least 166.1 50 miles distant from the other spouse's place of employment, 166.2 and the homesteads must be at least 50 miles distant from each 166.3 other. Homestead treatment, in whole or in part, shall not be 166.4 denied to the owner's spouse who previously occupied the 166.5 residence with the owner if the absence of the owner is due to 166.6 one of the exceptions provided in this paragraph. 166.7 (f) The assessor must not deny homestead treatment in whole 166.8 or in part if: 166.9 (1) in the case of a property owner who is not married, the 166.10 owner is absent due to residence in a nursing home, boarding 166.11 care facility, or an elderly assisted living facility property 166.12 as defined in section 273.13, subdivision 25a, and the property 166.13 is not otherwise occupied; or 166.14 (2) in the case of a property owner who is married, the 166.15 owner or the owner's spouse or both are absent due to residence 166.16 in a nursing home, boarding care facility, or an elderly 166.17 assisted living facility property as defined in section 273.13, 166.18 subdivision 25a, and the property is not occupied or is occupied 166.19 only by the owner's spouse. 166.20 (g) If an individual is purchasing property with the intent 166.21 of claiming it as a homestead and is required by the terms of 166.22 the financing agreement to have a relative shown on the deed as 166.23 a coowner, the assessor shall allow a full homestead 166.24 classification. This provision only applies to first-time 166.25 purchasers, whether married or single, or to a person who had 166.26 previously been married and is purchasing as a single individual 166.27 for the first time. The application for homestead benefits must 166.28 be on a form prescribed by the commissioner and must contain the 166.29 data necessary for the assessor to determine if full homestead 166.30 benefits are warranted. 166.31 (h) If residential or agricultural real estate is occupied 166.32 and used for purposes of a homestead by a child of a deceased 166.33 owner and the property is subject to jurisdiction of probate 166.34 court, the child shall receive relative homestead classification 166.35 under paragraph (c) or (d) to the same extent they would be 166.36 entitled to it if the owner was still living, until the probate 167.1 is completed. For purposes of this paragraph, "child" includes 167.2 a relationship by blood or by marriage. 167.3 [EFFECTIVE DATE.] This section is effective the day 167.4 following final enactment. 167.5 Sec. 17. Minnesota Statutes 2002, section 273.13, 167.6 subdivision 25, is amended to read: 167.7 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 167.8 estate containing four or more units and used or held for use by 167.9 the owner or by the tenants or lessees of the owner as a 167.10 residence for rental periods of 30 days or more. Class 4a also 167.11 includes hospitals licensed under sections 144.50 to 144.56, 167.12 other than hospitals exempt under section 272.02, and contiguous 167.13 property used for hospital purposes, without regard to whether 167.14 the property has been platted or subdivided. The market value 167.15 of class 4a property has a class rate of 1.8 percent for taxes 167.16 payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 167.17 percent for taxes payable in 2004 and thereafter, except that 167.18 class 4a property consisting of a structure for which 167.19 construction commenced after June 30, 2001, has a class rate of 167.20 1.25 percent of market value for taxes payable in 2003 and 167.21 subsequent years. 167.22 (b) Class 4b includes: 167.23 (1) residential real estate containing less than four units 167.24 that does not qualify as class 4bb, other than seasonal 167.25 residential, andrecreational property; 167.26 (2) manufactured homes not classified under any other 167.27 provision; 167.28 (3) a dwelling, garage, and surrounding one acre of 167.29 property on a nonhomestead farm classified under subdivision 23, 167.30 paragraph (b) containing two or three units; and 167.31 (4) unimproved property that is classified residential as 167.32 determined under subdivision 33. 167.33 The market value of class 4b property has a class rate of 167.34 1.5 percent for taxes payable in 2002, and 1.25 percent for 167.35 taxes payable in 2003 and thereafter. 167.36 (c) Class 4bb includes: 168.1 (1) nonhomestead residential real estate containing one 168.2 unit, other than seasonal residential, andrecreational 168.3 property; and 168.4 (2) a single family dwelling, garage, and surrounding one 168.5 acre of property on a nonhomestead farm classified under 168.6 subdivision 23, paragraph (b). 168.7 Class 4bb property has the same class rates as class 1a 168.8 property under subdivision 22. 168.9 Property that has been classified as seasonalrecreational168.10 residential recreational property at any time during which it 168.11 has been owned by the current owner or spouse of the current 168.12 owner does not qualify for class 4bb. 168.13 (d) Class 4c property includes: 168.14 (1) except as provided in subdivision 22, paragraph (c), 168.15 real property devoted to temporary and seasonal residential 168.16 occupancy for recreation purposes, including real property 168.17 devoted to temporary and seasonal residential occupancy for 168.18 recreation purposes and not devoted to commercial purposes for 168.19 more than 250 days in the year preceding the year of 168.20 assessment. For purposes of this clause, property is devoted to 168.21 a commercial purpose on a specific day if any portion of the 168.22 property is used for residential occupancy, and a fee is charged 168.23 for residential occupancy. In order for a property to be 168.24 classified as class 4c, seasonal residential recreational 168.25residentialfor commercial purposes, at least 40 percent of the 168.26 annual gross lodging receipts related to the property must be 168.27 from business conducted during 90 consecutive days and either 168.28 (i) at least 60 percent of all paid bookings by lodging guests 168.29 during the year must be for periods of at least two consecutive 168.30 nights; or (ii) at least 20 percent of the annual gross receipts 168.31 must be from charges for rental of fish houses, boats and 168.32 motors, snowmobiles, downhill or cross-country ski equipment, or 168.33 charges for marina services, launch services, and guide 168.34 services, or the sale of bait and fishing tackle. For purposes 168.35 of this determination, a paid booking of five or more nights 168.36 shall be counted as two bookings. Class 4c also includes 169.1 commercial use real property used exclusively for recreational 169.2 purposes in conjunction with class 4c property devoted to 169.3 temporary and seasonal residential occupancy for recreational 169.4 purposes, up to a total of two acres, provided the property is 169.5 not devoted to commercial recreational use for more than 250 169.6 days in the year preceding the year of assessment and is located 169.7 within two miles of the class 4c property with which it is 169.8 used. Class 4c property classified in this clause also includes 169.9 the remainder of class 1c resorts provided that the entire 169.10 property including that portion of the property classified as 169.11 class 1c also meets the requirements for class 4c under this 169.12 clause; otherwise the entire property is classified as class 3. 169.13 Owners of real property devoted to temporary and seasonal 169.14 residential occupancy for recreation purposes and all or a 169.15 portion of which was devoted to commercial purposes for not more 169.16 than 250 days in the year preceding the year of assessment 169.17 desiring classification as class 1c or 4c, must submit a 169.18 declaration to the assessor designating the cabins or units 169.19 occupied for 250 days or less in the year preceding the year of 169.20 assessment by January 15 of the assessment year. Those cabins 169.21 or units and a proportionate share of the land on which they are 169.22 located will be designated class 1c or 4c as otherwise 169.23 provided. The remainder of the cabins or units and a 169.24 proportionate share of the land on which they are located will 169.25 be designated as class 3a. The owner of property desiring 169.26 designation as class 1c or 4c property must provide guest 169.27 registers or other records demonstrating that the units for 169.28 which class 1c or 4c designation is sought were not occupied for 169.29 more than 250 days in the year preceding the assessment if so 169.30 requested. The portion of a property operated as a (1) 169.31 restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 169.32 facility operated on a commercial basis not directly related to 169.33 temporary and seasonal residential occupancy for recreation 169.34 purposes shall not qualify for class 1c or 4c; 169.35 (2) qualified property used as a golf course if: 169.36 (i) it is open to the public on a daily fee basis. It may 170.1 charge membership fees or dues, but a membership fee may not be 170.2 required in order to use the property for golfing, and its green 170.3 fees for golfing must be comparable to green fees typically 170.4 charged by municipal courses; and 170.5 (ii) it meets the requirements of section 273.112, 170.6 subdivision 3, paragraph (d). 170.7 A structure used as a clubhouse, restaurant, or place of 170.8 refreshment in conjunction with the golf course is classified as 170.9 class 3a property; 170.10 (3) real property up to a maximum of one acre of land owned 170.11 by a nonprofit community service oriented organization; provided 170.12 that the property is not used for a revenue-producing activity 170.13 for more than six days in the calendar year preceding the year 170.14 of assessment and the property is not used for residential 170.15 purposes on either a temporary or permanent basis. For purposes 170.16 of this clause, a "nonprofit community service oriented 170.17 organization" means any corporation, society, association, 170.18 foundation, or institution organized and operated exclusively 170.19 for charitable, religious, fraternal, civic, or educational 170.20 purposes, and which is exempt from federal income taxation 170.21 pursuant to section 501(c)(3), (10), or (19) of the Internal 170.22 Revenue Code of 1986, as amended through December 31, 1990. For 170.23 purposes of this clause, "revenue-producing activities" shall 170.24 include but not be limited to property or that portion of the 170.25 property that is used as an on-sale intoxicating liquor or 3.2 170.26 percent malt liquor establishment licensed under chapter 340A, a 170.27 restaurant open to the public, bowling alley, a retail store, 170.28 gambling conducted by organizations licensed under chapter 349, 170.29 an insurance business, or office or other space leased or rented 170.30 to a lessee who conducts a for-profit enterprise on the 170.31 premises. Any portion of the property which is used for 170.32 revenue-producing activities for more than six days in the 170.33 calendar year preceding the year of assessment shall be assessed 170.34 as class 3a. The use of the property for social events open 170.35 exclusively to members and their guests for periods of less than 170.36 24 hours, when an admission is not charged nor any revenues are 171.1 received by the organization shall not be considered a 171.2 revenue-producing activity; 171.3 (4) post-secondary student housing of not more than one 171.4 acre of land that is owned by a nonprofit corporation organized 171.5 under chapter 317A and is used exclusively by a student 171.6 cooperative, sorority, or fraternity for on-campus housing or 171.7 housing located within two miles of the border of a college 171.8 campus; 171.9 (5) manufactured home parks as defined in section 327.14, 171.10 subdivision 3; 171.11 (6) real property that is actively and exclusively devoted 171.12 to indoor fitness, health, social, recreational, and related 171.13 uses, is owned and operated by a not-for-profit corporation, and 171.14 is located within the metropolitan area as defined in section 171.15 473.121, subdivision 2; 171.16 (7) a leased or privately owned noncommercial aircraft 171.17 storage hangar not exempt under section 272.01, subdivision 2, 171.18 and the land on which it is located, provided that: 171.19 (i) the land is on an airport owned or operated by a city, 171.20 town, county, metropolitan airports commission, or group 171.21 thereof; and 171.22 (ii) the land lease, or any ordinance or signed agreement 171.23 restricting the use of the leased premise, prohibits commercial 171.24 activity performed at the hangar. 171.25 If a hangar classified under this clause is sold after June 171.26 30, 2000, a bill of sale must be filed by the new owner with the 171.27 assessor of the county where the property is located within 60 171.28 days of the sale; and 171.29 (8) residential real estate, a portion of which is used by 171.30 the owner for homestead purposes, and that is also a place of 171.31 lodging, if all of the following criteria are met: 171.32 (i) rooms are provided for rent to transient guests that 171.33 generally stay for periods of 14 or fewer days; 171.34 (ii) meals are provided to persons who rent rooms, the cost 171.35 of which is incorporated in the basic room rate; 171.36 (iii) meals are not provided to the general public except 172.1 for special events on fewer than seven days in the calendar year 172.2 preceding the year of the assessment; and 172.3 (iv) the owner is the operator of the property. 172.4 The market value subject to the 4c classification under this 172.5 clause is limited to five rental units. Any rental units on the 172.6 property in excess of five, must be valued and assessed as class 172.7 3a. The portion of the property used for purposes of a 172.8 homestead by the owner must be classified as class 1a property 172.9 under subdivision 22. 172.10 Class 4c property has a class rate of 1.5 percent of market 172.11 value, except that (i) each parcel of seasonal residential 172.12 recreational property not used for commercial purposes has the 172.13 same class rates as class 4bb property, (ii) manufactured home 172.14 parks assessed under clause (5) have the same class rate as 172.15 class 4b property, (iii) commercial-use seasonal residential 172.16 recreational property has a class rate of one percent for the 172.17 first $500,000 of market value, which includes any market value 172.18 receiving the one percent rate under subdivision 22, and 1.25 172.19 percent for the remaining market value, (iv) the market value of 172.20 property described in clause (4) has a class rate of one 172.21 percent, (v) the market value of property described in clauses 172.22 (2) and (6) has a class rate of 1.25 percent, and (vi) that 172.23 portion of the market value of property in clause (8) qualifying 172.24 for class 4c property has a class rate of 1.25 percent. 172.25 (e) Class 4d property is qualifying low-income rental 172.26 housing certified to the assessor by the housing finance agency 172.27 under sections 273.126 and 462A.071. Class 4d includes land in 172.28 proportion to the total market value of the building that is 172.29 qualifying low-income rental housing. For all properties 172.30 qualifying as class 4d, the market value determined by the 172.31 assessor must be based on the normal approach to value using 172.32 normal unrestricted rents. 172.33 Class 4d property has a class rate of 0.9 percent for taxes 172.34 payable in 2002, and one percent for taxes payable in 2003 and 172.35 1.25 percent for taxes payable in 2004 and thereafter. 172.36 [EFFECTIVE DATE.] This section is effective the day 173.1 following final enactment. 173.2 Sec. 18. Minnesota Statutes 2002, section 273.1398, 173.3 subdivision 4b, is amended to read: 173.4 Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 173.5 Until the costs of court administration as defined under section 173.6 480.183, subdivision 3, in a county have been transferred to the 173.7 state, each county in a judicial district transferring court 173.8 administration costs to state funding after July 1, 2001, shall 173.9 budget for the funding of these costs an amount at least equal 173.10 to the certified budget amount for calendar year 2001, increased 173.11 by six percent for each year from 2001 to 2003 and by eight 173.12 percent from 2004 to the year of the transfer. The county shall 173.13 budget, fund, and authorize expenditures not less than the 173.14 amount calculated under this paragraphplus the temporary aid173.15amount under subdivision 4c for maintenance of effort of173.16administrative costs. 173.17 (b) By July 15, 2001, the court shall certify to each 173.18 county in the judicial district its cost of court administration 173.19 as defined under section 480.183, subdivision 3, based on 2001 173.20 budgets. In making that determination, the court shall exclude 173.21 the budget costs of the county for the following categories: 173.22 (1) rent; 173.23 (2) examiner of titles; 173.24 (3) civil court appointed attorneys for civil matters; 173.25 (4) hospitalization costs; and 173.26 (5) cost of maintaining vital statistics. 173.27 The amount of funding provided by a county for courts that 173.28 is increased by the maintenance of effort requirement may not be 173.29 used by a county to pay the costs described in clauses (1) to 173.30 (5). 173.31 [EFFECTIVE DATE.] This section is effective the day 173.32 following final enactment. 173.33 Sec. 19. Minnesota Statutes 2002, section 273.1398, 173.34 subdivision 4d, is amended to read: 173.35 Subd. 4d. [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.] 173.36 For aid payable in 2004, each county's aid under subdivision 2 174.1 shall be permanently reduced by an amount equal to the county's 174.2 2004 reimbursement for nonfederal expenditures for out-of-home 174.3 placements, as provided in section 245.775, provided that 174.4 payments will be made under section 477A.0123 in calendar year 174.5 2004. The counties shall provide all information requested by 174.6 the commissioner of human services necessary to allow the 174.7 commissioner to certify the previous three years' average 174.8 nonfederal costs to the commissioner of revenue by July15, 2004174.9 1, 2003. The aid reduction under this subdivision must not 174.10 exceed the difference between (1) the amount of aid calculated 174.11 for the county for calendar year 2004 under subdivision 2, 174.12 including any addition under section 477A.07, and (2) the amount 174.13 of any aid reductions for the state takeover of courts contained 174.14 in Laws 2001, First Special Session chapter 5, article 5. 174.15 [EFFECTIVE DATE.] This section is effective for aids 174.16 payable in 2004 and thereafter. 174.17 Sec. 20. Minnesota Statutes 2002, section 273.372, is 174.18 amended to read: 174.19 273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 174.20 VALUATIONS.] 174.21 An appeal by a utility or railroad company concerning the 174.22 exemption, valuation, or classificationonof property for which 174.23 the commissioner of revenue has provided the city or county 174.24 assessor withcommissioner's ordersvaluations by order, or for 174.25 which the commissioner has recommended values to the city or 174.26 county assessor, must be brought against the commissioner in tax 174.27 court or in district court of the county where the property is 174.28 located, and not against the county or taxing district where the 174.29 property is located. If the appeal toacourt isoffrom an 174.30 order of the commissioner, it must be brought under chapter 174.31 271. If the appeal is from the exemption, valuation, 174.32 classification, or tax that results from implementation of the 174.33 commissioner's order or recommendation, it must be brought under 174.34 chapter 278, and theproceduresprovisions in that chapter 174.35 apply, except that service shall be on the commissioner only and 174.36 not on the county officials specified in section 278.01, 175.1 subdivision 1. This provision applies to the propertycontained175.2underdescribed in sections 273.33, 273.35, 273.36, and 273.37, 175.3 but only if the appealed values have remained unchanged from 175.4 those provided to the city or county by the commissioner. If 175.5 the exemption, valuation, or classification being appealed has 175.6 been changed by the city or county, then the action must be 175.7 brought under chapter 278 in the county where the property is 175.8 located and proper service must be made upon the county 175.9 officials as specified in section 278.01, subdivision 1. 175.10 Upon filing of any appeal by a utility company or railroad 175.11 against the commissioner, the commissioner shall give notice by 175.12 first class mail to each county which would be affected by the 175.13 appeal. 175.14 Companies that submit the reports under section 270.82 or 175.15 273.371 by the date specified in that section, or by the date 175.16 specified by the commissioner in an extension, may appeal 175.17 administratively to the commissioner under the procedures in 175.18 section 270.11, subdivision 6, prior to bringing an action in 175.19 tax court or in district court, however, instituting an 175.20 administrative appeal with the commissioner does not change or 175.21 modify the deadline in section 271.06 for appealing an order of 175.22 the commissioner in tax court or the deadline in section 278.01 175.23 forbringing an actionfiling a property tax claim or objection 175.24 in tax court or district court. 175.25 [EFFECTIVE DATE.] This section is effective the day 175.26 following final enactment. 175.27 Sec. 21. Minnesota Statutes 2002, section 273.42, 175.28 subdivision 2, is amended to read: 175.29 Subd. 2. Owners of land that is an agricultural or 175.30 nonagricultural homestead, nonhomestead agricultural land, 175.31 rental residential property, and both commercial and 175.32 noncommercial seasonal residential recreational property, as 175.33 those terms are defined in section 273.13 listed on records of 175.34 the county auditor or county treasurer over which runs a high 175.35 voltage transmission lineas defined in section 116C.52,175.36subdivision 3with a capacity of 200 kilovolts or more, except a 176.1 high voltage transmission line the construction of which was 176.2 commenced prior to July 1, 1974, shall receive a property tax 176.3 credit in an amount determined by multiplying a fraction, the 176.4 numerator of which is the length of high voltage transmission 176.5 line which runs over that parcel and the denominator of which is 176.6 the total length of that particular line running over all 176.7 property within the city or township by ten percent of the 176.8 transmission line tax revenue derived from the tax on that 176.9 portion of the line within the city or township pursuant to 176.10 section 273.36. In the case of property owners in unorganized 176.11 townships, the property tax credit shall be determined by 176.12 multiplying a fraction, the numerator of which is the length of 176.13 the qualifying high voltage transmission line which runs over 176.14 the parcel and the denominator of which is the total length of 176.15 the qualifying high voltage transmission line running over all 176.16 property within all the unorganized townships within the county, 176.17 by the total utility property tax credit fund amount available 176.18 within the county for that year pursuant to subdivision 1. 176.19 Where a right-of-way width is shared by more than one property 176.20 owner, the numerator shall be adjusted by multiplying the length 176.21 of line on the parcel by the proportion of the total width on 176.22 the parcel owned by that property owner. The amount of credit 176.23 for which the property qualifies shall not exceed 20 percent of 176.24 the total gross tax on the parcel prior to deduction of the 176.25 state paid agricultural credit and the state paid homestead 176.26 credit, provided that, if the property containing the 176.27 right-of-way is included in a parcel which exceeds 40 acres, the 176.28 total gross tax on the parcel shall be multiplied by a fraction, 176.29 the numerator of which is the sum of the number of acres in each 176.30 quarter-quarter section or portion thereof which contains a 176.31 right-of-way and the denominator of which is the total number of 176.32 acres in the parcel set forth on the tax statement, and the 176.33 maximum credit shall be 20 percent of the product of that 176.34 computation, prior to deduction of those credits. The auditor 176.35 of the county in which the affected parcel is located shall 176.36 calculate the amount of the credit due for each parcel and 177.1 transmit that information to the county treasurer. The county 177.2 auditor, in computing the credit received pursuant to section 177.3 273.135, shall reduce the gross tax by the amount of the credit 177.4 received pursuant to this section, unless the amount of the 177.5 credit would be less than $10. 177.6 If, after the county auditor has computed the credit to 177.7 those qualifying property owners in unorganized townships, there 177.8 is money remaining in the utility property tax credit fund, then 177.9 that excess amount in the fund shall be returned to the general 177.10 school fund of the county. 177.11 [EFFECTIVE DATE.] This section is effective the day 177.12 following final enactment. 177.13 Sec. 22. Minnesota Statutes 2002, section 274.01, 177.14 subdivision 1, is amended to read: 177.15 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 177.16 GRIEVANCES.] (a) The town board of a town, or the council or 177.17 other governing body of a city, is the board of appeal and 177.18 equalization except (1) in cities whose charters provide for a 177.19 board of equalization or (2) in any city or town that has 177.20 transferred its local board of review power and duties to the 177.21 county board as provided in subdivision 3. The county assessor 177.22 shall fix a day and time when the board or the board of 177.23 equalization shall meet in the assessment districts of the 177.24 county. Notwithstanding any law or city charter to the 177.25 contrary, a city board of equalization shall be referred to as a 177.26 board of appeal and equalization. On or before February 15 of 177.27 each year the assessor shall give written notice of the time to 177.28 the city or town clerk. Notwithstanding the provisions of any 177.29 charter to the contrary, the meetings must be held between April 177.30 1 and May 31 each year. The clerk shall give published and 177.31 posted notice of the meeting at least ten days before the date 177.32 of the meeting. 177.33 The board shall meet at the office of the clerk to review 177.34 the assessment and classification of property in the town or 177.35 city. No changes in valuation or classification which are 177.36 intended to correct errors in judgment by the county assessor 178.1 may be made by the county assessor after the board has adjourned 178.2 in those cities or towns that hold a local board of review; 178.3 however, corrections of errors that are merely clerical in 178.4 nature or changes that extend homestead treatment to property 178.5 are permitted after adjournment until the tax extension date for 178.6 that assessment year. The changes must be fully documented and 178.7 maintained in the assessor's office and must be available for 178.8 review by any person. A copy of the changes made during this 178.9 period in those cities or towns that hold a local board of 178.10 review must be sent to the county board no later than December 178.11 31 of the assessment year. 178.12 (b) The board shall determine whether the taxable property 178.13 in the town or city has been properly placed on the list and 178.14 properly valued by the assessor. If real or personal property 178.15 has been omitted, the board shall place it on the list with its 178.16 market value, and correct the assessment so that each tract or 178.17 lot of real property, and each article, parcel, or class of 178.18 personal property, is entered on the assessment list at its 178.19 market value. No assessment of the property of any person may 178.20 be raised unless the person has been duly notified of the intent 178.21 of the board to do so. On application of any person feeling 178.22 aggrieved, the board shall review the assessment or 178.23 classification, or both, and correct it as appears just. The 178.24 board may not make an individual market value adjustment or 178.25 classification change that would benefit the property in cases 178.26 where the owner or other person having control over the property 178.27 will not permit the assessor to inspect the property and the 178.28 interior of any buildings or structures. 178.29 (c) A local board may reduce assessments upon petition of 178.30 the taxpayer but the total reductions must not reduce the 178.31 aggregate assessment made by the county assessor by more than 178.32 one percent. If the total reductions would lower the aggregate 178.33 assessments made by the county assessor by more than one 178.34 percent, none of the adjustments may be made. The assessor 178.35 shall correct any clerical errors or double assessments 178.36 discovered by the board without regard to the one percent 179.1 limitation. 179.2 (d) A local board does not have authority to grant an 179.3 exemption or to order property removed from the tax rolls. 179.4 (e) A majority of the members may act at the meeting, and 179.5 adjourn from day to day until they finish hearing the cases 179.6 presented. The assessor shall attend, with the assessment books 179.7 and papers, and take part in the proceedings, but must not 179.8 vote. The county assessor, or an assistant delegated by the 179.9 county assessor shall attend the meetings. The board shall list 179.10 separately, on a form appended to the assessment book, all 179.11 omitted property added to the list by the board and all items of 179.12 property increased or decreased, with the market value of each 179.13 item of property, added or changed by the board, placed opposite 179.14 the item. The county assessor shall enter all changes made by 179.15 the board in the assessment book. 179.16(e)(f) Except as provided in subdivision 3, if a person 179.17 fails to appear in person, by counsel, or by written 179.18 communication before the board after being duly notified of the 179.19 board's intent to raise the assessment of the property, or if a 179.20 person feeling aggrieved by an assessment or classification 179.21 fails to apply for a review of the assessment or classification, 179.22 the person may not appear before the county board of appeal and 179.23 equalization for a review of the assessment or classification. 179.24 This paragraph does not apply if an assessment was made after 179.25 the local board meeting, as provided in section 273.01, or if 179.26 the person can establish not having received notice of market 179.27 value at least five days before the local board meeting. 179.28(f)(g) The local board must complete its work and adjourn 179.29 within 20 days from the time of convening stated in the notice 179.30 of the clerk, unless a longer period is approved by the 179.31 commissioner of revenue. No action taken after that date is 179.32 valid. All complaints about an assessment or classification 179.33 made after the meeting of the board must be heard and determined 179.34 by the county board of equalization. A nonresident may, at any 179.35 time, before the meeting of the board file written objections to 179.36 an assessment or classification with the county assessor. The 180.1 objections must be presented to the board at its meeting by the 180.2 county assessor for its consideration. 180.3 [EFFECTIVE DATE.] This section is effective the day 180.4 following final enactment. 180.5 Sec. 23. Minnesota Statutes 2002, section 274.13, 180.6 subdivision 1, is amended to read: 180.7 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 180.8 ASSESSMENTS.] The county commissioners, or a majority of them, 180.9 with the county auditor, or, if the auditor cannot be present, 180.10 the deputy county auditor, or, if there is no deputy, the court 180.11 administrator of the district court, shall form a board for the 180.12 equalization of the assessment of the property of the county, 180.13 including the property of all cities whose charters provide for 180.14 a board of equalization. This board shall be referred to as the 180.15 county board of appeal and equalization. The board shall meet 180.16 annually, on the date specified in section 274.14, at the office 180.17 of the auditor. Each member shall take an oath to fairly and 180.18 impartially perform duties as a member. The board shall examine 180.19 and compare the returns of the assessment of property of the 180.20 towns or districts, and equalize them so that each tract or lot 180.21 of real property and each article or class of personal property 180.22 is entered on the assessment list at its market value, subject 180.23 to the following rules: 180.24 (1) The board shall raise the valuation of each tract or 180.25 lot of real property which in its opinion is returned below its 180.26 market value to the sum believed to be its market value. The 180.27 board must first give notice of intention to raise the valuation 180.28 to the person in whose name it is assessed, if the person is a 180.29 resident of the county. The notice must fix a time and place 180.30 for a hearing. 180.31 (2) The board shall reduce the valuation of each tract or 180.32 lot which in its opinion is returned above its market value to 180.33 the sum believed to be its market value. 180.34 (3) The board shall raise the valuation of each class of 180.35 personal property which in its opinion is returned below its 180.36 market value to the sum believed to be its market value. It 181.1 shall raise the aggregate value of the personal property of 181.2 individuals, firms, or corporations, when it believes that the 181.3 aggregate valuation, as returned, is less than the market value 181.4 of the taxable personal property possessed by the individuals, 181.5 firms, or corporations, to the sum it believes to be the market 181.6 value. The board must first give notice to the persons of 181.7 intention to do so. The notice must set a time and place for a 181.8 hearing. 181.9 (4) The board shall reduce the valuation of each class of 181.10 personal property that is returned above its market value to the 181.11 sum it believes to be its market value. Upon complaint of a 181.12 party aggrieved, the board shall reduce the aggregate valuation 181.13 of the individual's personal property, or of any class of 181.14 personal property for which the individual is assessed, which in 181.15 its opinion has been assessed at too large a sum, to the sum it 181.16 believes was the market value of the individual's personal 181.17 property of that class. 181.18 (5) The board must not reduce the aggregate value of all 181.19 the property of its county, as submitted to the county board of 181.20 equalization, with the additions made by the auditor under this 181.21 chapter, by more than one percent of its whole valuation. The 181.22 board may raise the aggregate valuation of real property, and of 181.23 each class of personal property, of the county, or of any town 181.24 or district of the county, when it believes it is below the 181.25 market value of the property, or class of property, to the 181.26 aggregate amount it believes to be its market value. 181.27 (6) The board shall change the classification of any 181.28 property which in its opinion is not properly classified. 181.29 (7) The board does not have the authority to grant an 181.30 exemption or to order property removed from the tax rolls. 181.31 [EFFECTIVE DATE.] This section is effective the day 181.32 following final enactment. 181.33 Sec. 24. Minnesota Statutes 2002, section 275.025, 181.34 subdivision 1, is amended to read: 181.35 Subdivision 1. [LEVY AMOUNT.] The state general levy is 181.36 levied against commercial-industrial property and 182.1 seasonal residential recreational property, as defined in this 182.2 section. The state general levy base amount is $592,000,000 for 182.3 taxes payable in 2002. For taxes payable in subsequent years, 182.4 the levy base amount is increased each year by multiplying the 182.5 levy base amount for the prior year by the sum of one plus the 182.6 rate of increase, if any, in the implicit price deflator for 182.7 government consumption expenditures and gross investment for 182.8 state and local governments prepared by the Bureau of Economic 182.9 Analysts of the United States Department of Commerce for the 182.10 12-month period ending March 31 of the year prior to the year 182.11 the taxes are payable. The tax under this section is not 182.12 treated as a local tax rate under section 469.177 and is not the 182.13 levy of a governmental unit under chapters 276A and 473F. 182.14 Beginning in fiscal year 2004, and in each year thereafter, the 182.15 commissioner of finance shall deposit in an education reserve 182.16 account, which account is hereby established, the increased 182.17 amount of the state general levy received for deposit in the 182.18 general fund for that year over the amount of the state general 182.19 levy received for deposit in the general fund in fiscal year 182.20 2003. The amounts in the education reserve account do not lapse 182.21 or cancel each year, but remain until appropriated by law for 182.22 education aid or higher education funding. 182.23 [EFFECTIVE DATE.] This section is effective for taxes 182.24 payable in 2004 and thereafter, except that the change from 182.25 "seasonal recreational property" to "seasonal residential 182.26 recreational property" is effective the day following final 182.27 enactment. 182.28 Sec. 25. Minnesota Statutes 2002, section 275.025, 182.29 subdivision 3, is amended to read: 182.30 Subd. 3. [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.] 182.31 For the purposes of this section, "seasonal residential 182.32 recreational tax capacity" means the tax capacity of all class 182.33 4c(1) property under section 273.13, subdivision 25, except that 182.34 the first $76,000 of market value of each noncommercial class 182.35 4c(1) property has a tax capacity for this purpose equal to 40 182.36 percent of its tax capacity under section 273.13. 183.1 [EFFECTIVE DATE.] This section is effective the day 183.2 following final enactment. 183.3 Sec. 26. Minnesota Statutes 2002, section 275.025, 183.4 subdivision 4, is amended to read: 183.5 Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 183.6 The state general tax must be distributed among the counties by 183.7 applying a uniform rate to each county's commercial-industrial 183.8 tax capacity and its seasonal residential recreational tax 183.9 capacity. Within each county, the tax must be levied by 183.10 applying a uniform rate against commercial-industrial tax 183.11 capacity and seasonal residential recreational tax capacity.By183.12 On or before November 1 each year, the commissioner of revenue 183.13 shall certifythea preliminary state general levy rate to each 183.14 county auditor that must be used to prepare the notices of 183.15 proposed property taxes for taxes payable in the following 183.16 year. By January 1 of each year, the commissioner shall certify 183.17 the final state general levy rate to each county auditor that 183.18 shall be used in spreading taxes. 183.19 [EFFECTIVE DATE.] This section is effective for taxes 183.20 payable in 2004 and thereafter, except that the change from 183.21 "seasonal recreational tax capacity" to "seasonal residential 183.22 recreational tax capacity" is effective the day following final 183.23 enactment. 183.24 Sec. 27. Minnesota Statutes 2002, section 276.10, is 183.25 amended to read: 183.26 276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 183.27 On the settlement day determined in section 276.09 for each 183.28 year, the county auditor and county treasurer shall distribute 183.29 all undistributed funds in the treasury. The funds must be 183.30 apportioned as provided by law, and credited to thestate,town, 183.31 city, school district, special district and each county fund. 183.32 Within 20 days after the distribution is completed, the county 183.33 auditor shall report to the state auditor in the form prescribed 183.34 by the state auditor. The county auditor shall issue a warrant 183.35 for the payment of money in the county treasury to the credit of 183.36 thestate,town, city, school district, or special districts on 184.1 application of the persons entitled to receive the payment. The 184.2 county auditor may apply the local tax rate from the year before 184.3 the year of distribution when apportioning and distributing 184.4 delinquent tax proceeds, if the composition of the previous 184.5 year's local tax rate between taxing districts is not 184.6 significantly different from the local tax rate that existed for 184.7 the year of the delinquency. 184.8 [EFFECTIVE DATE.] This section is effective for taxes 184.9 payable in 2004 and thereafter. 184.10 Sec. 28. Minnesota Statutes 2002, section 276.11, 184.11 subdivision 1, is amended to read: 184.12 Subdivision 1. [GENERALLY.] As soon as practical after the 184.13 settlement day determined in section 276.09, the county 184.14 treasurer shall pay tothe state treasurer orthe treasurer of a 184.15 town, city, school district, or special district, on the warrant 184.16 of the county auditor, all receipts of taxes levied by the 184.17 taxing district and deliver up all orders and other evidences of 184.18 indebtedness of the taxing district, taking triplicate receipts 184.19 for them. The treasurer shall file one of the receipts with the 184.20 county auditor, and shall return one by mail on the day of its 184.21 receipt to the clerk of the town, city, school district, or 184.22 special district to which payment was made. The clerk shall 184.23 keep the receipt in the clerk's office. Upon written request of 184.24 the taxing district, to the extent practicable, the county 184.25 treasurer shall make partial payments of amounts collected 184.26 periodically in advance of the next settlement and 184.27 distribution. A statement prepared by the county treasurer must 184.28 accompany each payment. It must state the years for which taxes 184.29 included in the payment were collected and, for each year, the 184.30 amount of the taxes and any penalties on the tax. Upon written 184.31 request of a taxing district, except school districts, the 184.32 county treasurer shall pay at least 70 percent of the estimated 184.33 collection within 30 days after the settlement date determined 184.34 in section 276.09. Within seven business days after the due 184.35 date, or 28 calendar days after the postmark date on the 184.36 envelopes containing real or personal property tax statements, 185.1 whichever is latest, the county treasurer shall pay to the 185.2 treasurer of the school districts 50 percent of the estimated 185.3 collections arising from taxes levied by and belonging to the 185.4 school district, unless the school district elects to receive 50 185.5 percent of the estimated collections arising from taxes levied 185.6 by and belonging to the school district after making a 185.7 proportionate reduction to reflect any loss in collections as 185.8 the result of any delay in mailing tax statements. In that 185.9 case, 50 percent of those adjusted, estimated collections shall 185.10 be paid by the county treasurer to the treasurer of the school 185.11 district within seven business days of the due date. The 185.12 remaining 50 percent of the estimated collections must be paid 185.13 to the treasurer of the school district within the next seven 185.14 business days of the later of the dates in the preceding 185.15 sentence, unless the school district elects to receive the 185.16 remainder of its estimated collections after a proportionate 185.17 reduction has been made to reflect any loss in collections as 185.18 the result of any delay in mailing tax statements. In that 185.19 case, the remaining 50 percent of those adjusted, estimated 185.20 collections shall be paid by the county treasurer to the 185.21 treasurer of the school district within 14 days of the due 185.22 date. The treasurer shall pay the balance of the amounts 185.23 collectedto the state before June 30, orto a municipal 185.24 corporation or other body within 60 days after the settlement 185.25 date determined in section 276.09. After 45 days interest at an 185.26 annual rate of eight percent accrues and must be paid to the 185.27 taxing district. Interest must be paid upon appropriation from 185.28 the general revenue fund of the county. If not paid, it may be 185.29 recovered by the taxing district, in a civil action. 185.30 [EFFECTIVE DATE.] This section is effective for taxes 185.31 payable in 2004 and thereafter. 185.32 Sec. 29. [276.112] [STATE PROPERTY TAXES; COUNTY 185.33 TREASURER.] 185.34 On or before January 25 each year, for the period ending 185.35 December 31 of the prior year, and on or before June 29 each 185.36 year, for the period ending on the most recent settlement day 186.1 determined in section 276.09, and on or before December 2 each 186.2 year, for the period ending ten business days after November 15, 186.3 the county treasurer must make full settlement with the county 186.4 auditor according to sections 276.09, 276.10, and 276.111 for 186.5 all receipts of state property taxes levied under section 186.6 275.025, and must transmit those receipts to the commissioner of 186.7 revenue by electronic means. 186.8 [EFFECTIVE DATE.] This section is effective the day 186.9 following final enactment. 186.10 Sec. 30. Minnesota Statutes 2002, section 277.20, 186.11 subdivision 2, is amended to read: 186.12 Subd. 2. [FILING OF LIEN FOR ENFORCEABILITY.] The lien 186.13 imposed by subdivision 1 is not enforceable against any 186.14 purchaser, mortgagee, pledgee, holder of a Uniform Commercial 186.15 Code security interest, mechanic's lienor, or judgment lien 186.16 creditor until a notice of lien has been filed by the county 186.17 treasurer in the office of the county recorder of the county in 186.18 which the property is situated, or, in the case of personal 186.19 propertybelonging to an individual who is not a resident of186.20this state, or that is a corporation, partnership, or other186.21organization, in the office of the secretary of state. Priority 186.22 of a lien created under Laws 1991, chapter 291, article 15, 186.23 shall be determined in accordance with the provisions of section 186.24 507.34. Liens filed in the office of the county recorder shall 186.25 be filed with the state tax liens filed pursuant to section 186.26 270.69, and the index shall indicate the name of the county for 186.27 which the lien was filed. If the land is registered, the notice 186.28 of lien shall be filed in the office of the registrar of titles 186.29 of the county in which the property is registered. 186.30 Notwithstanding any other law to the contrary, the county 186.31 treasurer is exempt from the payment of fees when the lien is 186.32 offered for filing or recording; the fee for filing or recording 186.33 the lien must be paid at the time the release of lien is offered 186.34 for filing or recording. Notwithstanding any law to the 186.35 contrary, the fee for filing or recording the lien or the 186.36 release of lien is $15. 187.1 [EFFECTIVE DATE.] This section is effective for liens filed 187.2 on or after the day following final enactment. 187.3 Sec. 31. Minnesota Statutes 2002, section 279.06, 187.4 subdivision 1, is amended to read: 187.5 Subdivision 1. [LIST AND NOTICE.] Within five days after 187.6 the filing of such list, the court administrator shall return a 187.7 copy thereof to the county auditor, with a notice prepared and 187.8 signed by the court administrator, and attached thereto, which 187.9 may be substantially in the following form: 187.10 State of Minnesota ) 187.11 ) ss. 187.12 County of ............... ) 187.13 District Court 187.14 .......... Judicial District. 187.15 The state of Minnesota, to all persons, companies, or 187.16 corporations who have or claim any estate, right, title, or 187.17 interest in, claim to, or lien upon, any of the several parcels 187.18 of land described in the list hereto attached: 187.19 The list of taxes and penalties on real property for the 187.20 county of ............................... remaining delinquent 187.21 on the first Monday in January, ......., has been filed in the 187.22 office of the court administrator of the district court of said 187.23 county, of which that hereto attached is a copy. Therefore, 187.24 you, and each of you, are hereby required to file in the office 187.25 of said court administrator, on or before the 20th day after the 187.26 publication of this notice and list, your answer, in writing, 187.27 setting forth any objection or defense you may have to the 187.28 taxes, or any part thereof, upon any parcel of land described in 187.29 the list, in, to, or on which you have or claim any estate, 187.30 right, title, interest, claim, or lien, and, in default thereof, 187.31 judgment will be entered against such parcel of land for the 187.32 taxes on such list appearing against it, and for all penalties, 187.33 interest, and costs. Based upon said judgment, the land shall 187.34 be sold to the state of Minnesota on the second Monday in May, 187.35 ....... The period of redemption for all lands sold to the 187.36 state at a tax judgment sale shall be three years from the date 188.1 of sale to the state of Minnesota if the land is within an 188.2 incorporated area unless it is: 188.3 (a) nonagricultural homesteaded land as defined in section 188.4 273.13, subdivision 22; 188.5 (b) homesteaded agricultural land as defined in section 188.6 273.13, subdivision 23, paragraph (a); 188.7 (c) seasonal residential recreational land as defined in 188.8 section 273.13, subdivisions 22, paragraph (c), and 25, 188.9 paragraph(c)(d), clause(5)(1), in which event the period of 188.10 redemption is five years from the date of sale to the state of 188.11 Minnesota; 188.12 (d) abandoned property and pursuant to section 281.173 a 188.13 court order has been entered shortening the redemption period to 188.14 five weeks; or 188.15 (e) vacant property as described under section 281.174, 188.16 subdivision 2, and for which a court order is entered shortening 188.17 the redemption period under section 281.174. 188.18 The period of redemption for all other lands sold to the 188.19 state at a tax judgment sale shall be five years from the date 188.20 of sale. 188.21 Inquiries as to the proceedings set forth above can be made 188.22 to the county auditor of ..... county whose address is ..... . 188.23 (Signed) ............................................., 188.24 Court Administrator of the District Court of the County 188.25 of .................................................... 188.26 (Here insert list.) 188.27 The list referred to in the notice shall be substantially 188.28 in the following form: 188.29 List of real property for the county of 188.30 ......................., on which taxes remain delinquent on the 188.31 first Monday in January, .......: 188.32 Town of (Fairfield), 188.33 Township (40), Range (20), 188.34 Names (and 188.35 Current Filed 188.36 Addresses) for 189.1 the Taxpayers 189.2 and Fee Owners 189.3 and in Addition 189.4 Those Parties 189.5 Who Have Filed 189.6 Their Addresses Tax 189.7 Pursuant to Subdivision of Parcel Total Tax 189.8 section 276.041 Section Section Number and Penalty 189.9 $ cts. 189.10 John Jones S.E. 1/4 of S.W. 1/4 10 23101 2.20 189.11 (825 Fremont 189.12 Fairfield, MN 189.13 55000) 189.14 Bruce Smith That part of N.E. 1/4 189.15 (2059 Hand of S.W. 1/4 desc. as 189.16 Fairfield, follows: Beg. at the 189.17 MN 55000) S.E. corner of said 189.18 and N.E. 1/4 of S.W. 1/4; 189.19 Fairfield thence N. along the E. 189.20 State Bank line of said N.E. 1/4 189.21 (100 Main of S.W. 1/4 a distance 189.22 Street of 600 ft.; thence W. 189.23 Fairfield, parallel with the S. 189.24 MN 55000) line of said N.E. 1/4 189.25 of S.W. 1/4 a distance 189.26 of 600 ft.; thence S. 189.27 parallel with said E. 189.28 line a distance of 600 189.29 ft. to S. line of said 189.30 N.E. 1/4 of S.W. 1/4; 189.31 thence E. along said S. 189.32 line a distance of 600 189.33 ft. to the point of 189.34 beg. ............... 21 33211 3.15 189.35 As to platted property, the form of heading shall conform 189.36 to circumstances and be substantially in the following form: 190.1 City of (Smithtown) 190.2 Brown's Addition, or Subdivision 190.3 Names (and 190.4 Current Filed 190.5 Addresses) for 190.6 the Taxpayers 190.7 and Fee Owners 190.8 and in Addition 190.9 Those Parties 190.10 Who have Filed 190.11 Their Addresses Tax 190.12 Pursuant to Parcel Total Tax 190.13 section 276.041 Lot Block Number and Penalty 190.14 $ cts. 190.15 John Jones 15 9 58243 2.20 190.16 (825 Fremont 190.17 Fairfield, 190.18 MN 55000) 190.19 Bruce Smith 16 9 58244 3.15 190.20 (2059 Hand 190.21 Fairfield, 190.22 MN 55000) 190.23 and 190.24 Fairfield 190.25 State Bank 190.26 (100 Main Street 190.27 Fairfield, 190.28 MN 55000) 190.29 The names, descriptions, and figures employed in 190.30 parentheses in the above forms are merely for purposes of 190.31 illustration. 190.32 The name of the town, township, range or city, and addition 190.33 or subdivision, as the case may be, shall be repeated at the 190.34 head of each column of the printed lists as brought forward from 190.35 the preceding column. 190.36 Errors in the list shall not be deemed to be a material 191.1 defect to affect the validity of the judgment and sale. 191.2 [EFFECTIVE DATE.] This section is effective the day 191.3 following final enactment. 191.4 Sec. 32. Minnesota Statutes 2002, section 281.17, is 191.5 amended to read: 191.6 281.17 [PERIOD FOR REDEMPTION.] 191.7 Except for properties for which the period of redemption 191.8 has been limited under sections 281.173 and 281.174, the 191.9 following periods for redemption apply. 191.10 The period of redemption for all lands sold to the state at 191.11 a tax judgment sale shall be three years from the date of sale 191.12 to the state of Minnesota if the land is within an incorporated 191.13 area unless it is: (a) nonagricultural homesteaded land as 191.14 defined in section 273.13, subdivision 22; (b) homesteaded 191.15 agricultural land as defined in section 273.13, subdivision 23, 191.16 paragraph (a); or (c) seasonal residential recreational land as 191.17 defined in section 273.13, subdivision 22, paragraph (c), or 25, 191.18 paragraph (d), clause (1), for which the period of redemption is 191.19 five years from the date of sale to the state of Minnesota. 191.20 The period of redemption for homesteaded lands as defined 191.21 in section 273.13, subdivision 22, located in a targeted 191.22 neighborhood as defined in Laws 1987, chapter 386, article 6, 191.23 section 4, and sold to the state at a tax judgment sale is three 191.24 years from the date of sale. The period of redemption for all 191.25 lands located in a targeted neighborhood as defined in Laws 191.26 1987, chapter 386, article 6, section 4, except (1) homesteaded 191.27 lands as defined in section 273.13, subdivision 22, and (2) for 191.28 periods of redemption beginning after June 30, 1991, but before 191.29 July 1, 1996, lands located in the Loring Park targeted 191.30 neighborhood on which a notice of lis pendens has been served, 191.31 and sold to the state at a tax judgment sale is one year from 191.32 the date of sale. 191.33 The period of redemption for all real property constituting 191.34 a mixed municipal solid waste disposal facility that is a 191.35 qualified facility under section 115B.39, subdivision 1, is one 191.36 year from the date of the sale to the state of Minnesota. 192.1 The period of redemption for all other lands sold to the 192.2 state at a tax judgment sale shall be five years from the date 192.3 of sale, except that the period of redemption for nonhomesteaded 192.4 agricultural land as defined in section 273.13, subdivision 23, 192.5 paragraph (b), shall be two years from the date of sale if at 192.6 that time that property is owned by a person who owns one or 192.7 more parcels of property on which taxes are delinquent, and the 192.8 delinquent taxes are more than 25 percent of the prior year's 192.9 school district levy. 192.10 [EFFECTIVE DATE.] This section is effective the day 192.11 following final enactment. 192.12 Sec. 33. Minnesota Statutes 2002, section 282.01, 192.13 subdivision 1b, is amended to read: 192.14 Subd. 1b. [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 192.15 Notwithstanding subdivision 1a, in the case of tax-forfeited 192.16 lands located in a targeted neighborhood, as defined in section 192.17 469.201, subdivision 10, and section 473.121, subdivision 2, the 192.18 commissioner of revenue shall convey by deed in the name of the 192.19 state any tract of tax-forfeited land held in trust in favor of 192.20 the taxing districts, to a political subdivision that submits an 192.21 application to the commissioner of revenue and, in the case of 192.22 targeted neighborhoods located outside of the metropolitan area 192.23 as defined in section 473.121, the recommendation of the county 192.24 board. 192.25 (b) The application under paragraph (a) must include a 192.26 statement of facts as to the use to be made of the tract, the 192.27 need therefor, and a resolution, adopted by the governing body 192.28 of the political subdivision, finding that the conveyance of a 192.29 tract of tax-forfeited land to the political subdivision is 192.30 necessary to provide for the redevelopment of land as productive 192.31 taxable property. Deeds of conveyance issued under paragraph 192.32 (a) are not conditioned on continued use of the property for the 192.33 use stated in the application. 192.34 [EFFECTIVE DATE.] This section is effective for deeds 192.35 issued on or after July 1, 2003. 192.36 Sec. 34. Minnesota Statutes 2002, section 282.01, 193.1 subdivision 7a, is amended to read: 193.2 Subd. 7a. [CITY SALES; ALTERNATE PROCEDURES.] Land located 193.3 in a home rule charter or statutory city, or in a town which 193.4 cannot be improved because of noncompliance with local 193.5 ordinances regarding minimum area, shape, frontage or access may 193.6 be sold by the county auditor pursuant to this subdivision if 193.7 the auditor determines that a nonpublic sale will encourage the 193.8 approval of sale of the land by the city or town and promote its 193.9 return to the tax rolls. If the physical characteristics of the 193.10 land indicate that its highest and best use will be achieved by 193.11 combining it with an adjoining parcel and the city or town has 193.12 not adopted a local ordinance governing minimum area, shape, 193.13 frontage, or access, the land may also be sold pursuant to this 193.14 subdivision. If the property consists of an undivided interest 193.15 in land or land and improvements, the property may also be sold 193.16 to the other owners under this subdivision. The sale of land 193.17 pursuant to this subdivision shall be subject to any conditions 193.18 imposed by the county board pursuant to section 282.03. The 193.19 governing body of the city or town may recommend to the county 193.20 board conditions to be imposed on the sale. The county auditor 193.21 may restrict the sale to owners of lands adjoining the land to 193.22 be sold. The county auditor shall conduct the sale by sealed 193.23 bid or may select another means of sale. The land shall be sold 193.24 to the highest bidder but in no event shall the land be sold for 193.25 less than its appraised value. All owners of land adjoining the 193.26 land to be sold shall be given a written notice at least 30 days 193.27 prior to the sale. 193.28 This subdivision shall be liberally construed to encourage 193.29 the sale and utilization of tax-forfeited land, to eliminate 193.30 nuisances and dangerous conditions and to increase compliance 193.31 with land use ordinances. 193.32 [EFFECTIVE DATE.] This section is effective for sales 193.33 occurring on or after the day following final enactment. 193.34 Sec. 35. Minnesota Statutes 2002, section 282.08, is 193.35 amended to read: 193.36 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 194.1 The net proceeds from the sale or rental of any parcel of 194.2 forfeited land, or from the sale of products from the forfeited 194.3 land, must be apportioned by the county auditor to the taxing 194.4 districts interested in the land, as follows: 194.5 (1) the amounts necessary to pay the state general tax levy 194.6 against the parcel for taxes payable in the year for which the 194.7 tax judgment was entered, and for each subsequent payable year 194.8 up to and including the year of forfeiture, must be apportioned 194.9 to the state; 194.10 (2) the portion required to pay any amounts included in the 194.11 appraised value under section 282.01, subdivision 3, as 194.12 representing increased value due to any public improvement made 194.13 after forfeiture of the parcel to the state, but not exceeding 194.14 the amount certified by the clerk of the municipality must be 194.15 apportioned to the municipal subdivision entitled to it; 194.16(2)(3) the portion required to pay any amount included in 194.17 the appraised value under section 282.019, subdivision 5, 194.18 representing increased value due to response actions taken after 194.19 forfeiture of the parcel to the state, but not exceeding the 194.20 amount of expenses certified by the pollution control agency or 194.21 the commissioner of agriculture, must be apportioned to the 194.22 agency or the commissioner of agriculture and deposited in the 194.23 fund from which the expenses were paid; 194.24(3)(4) the portion of the remainder required to discharge 194.25 any special assessment chargeable against the parcel for 194.26 drainage or other purpose whether due or deferred at the time of 194.27 forfeiture, must be apportioned to the municipal subdivision 194.28 entitled to it; and 194.29(4)(5) any balance must be apportioned as follows: 194.30 (i) The county board may annually by resolution set aside 194.31 no more than 30 percent of the receipts remaining to be used for 194.32 timber development on tax-forfeited land and dedicated memorial 194.33 forests, to be expended under the supervision of the county 194.34 board. It must be expended only on projects approved by the 194.35 commissioner of natural resources. 194.36 (ii) The county board may annually by resolution set aside 195.1 no more than 20 percent of the receipts remaining to be used for 195.2 the acquisition and maintenance of county parks or recreational 195.3 areas as defined in sections 398.31 to 398.36, to be expended 195.4 under the supervision of the county board. 195.5 (iii) Any balance remaining must be apportioned as 195.6 follows: county, 40 percent; town or city, 20 percent; and 195.7 school district, 40 percent, provided, however, that in 195.8 unorganized territory that portion which would have accrued to 195.9 the township must be administered by the county board of 195.10 commissioners. 195.11 [EFFECTIVE DATE.] This section is effective for taxes 195.12 payable in 2004 and thereafter. 195.13 Sec. 36. Minnesota Statutes 2002, section 290C.02, 195.14 subdivision 3, is amended to read: 195.15 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 195.16 term is defined in section 290.01, subdivision 2, who owns 195.17 forest land in Minnesota and files an application authorized by 195.18 the Sustainable Forest Incentive Act. For purposes of section 195.19 290C.11, claimant also includes any person bound by the covenant 195.20 required in section 290C.04. No more than one claimant is 195.21 entitled to a payment under this chapter with respect to any 195.22 tract, parcel, or piece of land enrolled under this chapter that 195.23 has been assigned the same parcel identification number. When 195.24 enrolled forest land is owned by two or more persons, the owners 195.25 must determine between them which person may claim the payments 195.26 provided under sections 290C.01 to 290C.11. 195.27 [EFFECTIVE DATE.] This section is effective the day 195.28 following final enactment. 195.29 Sec. 37. Minnesota Statutes 2002, section 290C.02, 195.30 subdivision 7, is amended to read: 195.31 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management 195.32 plan" means a written document providing a framework for 195.33 site-specific healthy, productive, and sustainable forest 195.34 resources. A forest management plan must include at least the 195.35 following: (i) owner-specific forest management goals for the 195.36propertyland; (ii) a reliable field inventory of the individual 196.1 forest cover types, their age, and density; (iii) a description 196.2 of the soil type and quality; (iv) an aerial photo and/or map of 196.3 the vegetation and other natural features of thepropertyland 196.4 clearly indicating the boundaries of thepropertyland and of 196.5 the forest land; (v) the proposed future conditions of the 196.6propertyland; (vi) prescriptions to meet proposed future 196.7 conditions of thepropertyland; (vii) a recommended timetable 196.8 for implementing the prescribed activities; and (viii) a legal 196.9 description of theparcelsland encompassing the parcels 196.10 included in the plan. All management activities prescribed in a 196.11 plan must be in accordance with the recommended timber 196.12 harvesting and forest management guidelines. The commissioner 196.13 of natural resources shall provide a framework for plan content 196.14 and updating and revising plans. 196.15 [EFFECTIVE DATE.] This section is effective the day 196.16 following final enactment. 196.17 Sec. 38. Minnesota Statutes 2002, section 290C.03, is 196.18 amended to read: 196.19 290C.03 [ELIGIBILITY REQUIREMENTS.] 196.20 (a)PropertyLand may be enrolled in the sustainable forest 196.21 incentive program under this chapter if all of the following 196.22 conditions are met: 196.23 (1)propertythe land consists of at least 20 contiguous 196.24 acres and at least 50 percent of the land must meet the 196.25 definition of forest land in section 88.01, subdivision 7, 196.26 during the enrollment; 196.27 (2) a forest management plan for thepropertyland must be 196.28 prepared by an approved plan writer and implemented during the 196.29 period in which the land is enrolled; 196.30 (3) timber harvesting and forest management guidelines must 196.31 be used in conjunction with any timber harvesting or forest 196.32 management activities conducted on the land during the period in 196.33 which the land is enrolled; 196.34 (4) thepropertyland must be enrolled for a minimum of 196.35 eight years; 196.36 (5) there are no delinquent property taxes on theproperty197.1 land; and 197.2 (6) claimants enrolling more than 1,920 acres in the 197.3 sustainable forest incentive program must allow year-round, 197.4 nonmotorized access to fish and wildlife resources on enrolled 197.5 land except within one-fourth mile of a permanent dwelling or 197.6 during periods of high fire hazard as determined by the 197.7 commissioner of natural resources. 197.8 (b) Claimants required to allow access under paragraph (a), 197.9 clause (6), do not by that action: 197.10 (1) extend any assurance that the land is safe for any 197.11 purpose; 197.12 (2) confer upon the person the legal status of an invitee 197.13 or licensee to whom a duty of care is owed; or 197.14 (3) assume responsibility for or incur liability for any 197.15 injury to the person or property caused by an act or omission of 197.16 the person. 197.17 [EFFECTIVE DATE.] This section is effective the day 197.18 following final enactment. 197.19 Sec. 39. Minnesota Statutes 2002, section 290C.07, is 197.20 amended to read: 197.21 290C.07 [CALCULATION OF INCENTIVE PAYMENT.] 197.22 An approved claimant under the sustainable forest incentive 197.23 program is eligible to receive an annual payment. The payment 197.24 shall equal the greater of: 197.25 (1) the difference between the property tax that would be 197.26 paid on thepropertyland using the previous year's statewide 197.27 average total township tax rate and the class rate for class 2b 197.28 timberland under section 273.13, subdivision 23, paragraph (b), 197.29 if thepropertyland were valued at (i) the average statewide 197.30 timberland market value per acre calculated under section 197.31 290C.06, and (ii) the average statewide timberland current use 197.32 value per acre calculated under section 290C.02, subdivision 5; 197.33 (2) two-thirds of the property tax amount determined by 197.34 using the previous year's statewide average total township tax 197.35 rate, the estimated market value per acre as calculated in 197.36 section 290C.06, and the class rate for 2b timberland under 198.1 section 273.13, subdivision 23, paragraph (b); or 198.2 (3) $1.50 per acre for each acre enrolled in the 198.3 sustainable forest incentive program. 198.4 [EFFECTIVE DATE.] This section is effective the day 198.5 following final enactment. 198.6 Sec. 40. Minnesota Statutes 2002, section 290C.09, is 198.7 amended to read: 198.8 290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 198.9 The commissioner shall immediately remove anypropertyland 198.10 enrolled in the sustainable forest incentive program for which 198.11 taxes are determined to be delinquent as provided in chapter 279 198.12 and shall notify the claimant of such action. Lands terminated 198.13 from the sustainable forest incentive program under this section 198.14 are not entitled to any payments provided in this chapter and 198.15 are subject to removal penalties prescribed in section 290C.11. 198.16 The claimant has 60 days from the receipt of notice from the 198.17 commissioner under this section to pay the delinquent taxes. If 198.18 the delinquent taxes are paid within this 60-day period, the 198.19 lands shall be reinstated in the program as if they had not been 198.20 withdrawn and without the payment of a penalty. 198.21 [EFFECTIVE DATE.] This section is effective the day 198.22 following final enactment. 198.23 Sec. 41. Minnesota Statutes 2002, section 290C.10, is 198.24 amended to read: 198.25 290C.10 [WITHDRAWAL PROCEDURES.] 198.26 An approved claimant under the sustainable forest incentive 198.27 program for a minimum of four years may notify the commissioner 198.28 of the intent to terminate enrollment. Within 90 days of 198.29 receipt of notice to terminate enrollment, the commissioner 198.30 shall inform the claimant in writing, acknowledging receipt of 198.31 this notice and indicating the effective date of termination 198.32 from the sustainable forest incentive program. Termination of 198.33 enrollment in the sustainable forest incentive program occurs on 198.34 January 1 of the fifth calendar year that begins after receipt 198.35 by the commissioner of the termination notice. After the 198.36 commissioner issues an effective date of termination, a claimant 199.1 wishing to continue theproperty'sland's enrollment in the 199.2 sustainable forest incentive program beyond the termination date 199.3 must apply for enrollment as prescribed in section 290C.04. A 199.4 claimant who withdraws a parcel of land from this program may 199.5 not reenroll the parcel for a period of three years. Within 90 199.6 days after the termination date, the commissioner shall execute 199.7 and acknowledge a document releasing the land from the covenant 199.8 required under this chapter. The document must be mailed to the 199.9 claimant and is entitled to be recorded. The commissioner may 199.10 allow early withdrawal from the Sustainable Forest Incentive Act 199.11 without penalty in cases of condemnation for a public purpose 199.12 notwithstanding the provisions of this section. 199.13 [EFFECTIVE DATE.] This section is effective the day 199.14 following final enactment. 199.15 Sec. 42. Minnesota Statutes 2002, section 290C.11, is 199.16 amended to read: 199.17 290C.11 [PENALTIES FOR REMOVAL.] 199.18 (a) If the commissioner determines thatpropertyland 199.19 enrolled in the sustainable forest incentive program is in 199.20 violation of the conditions for enrollment as specified in 199.21 section 290C.03, the commissioner shall notify the claimant of 199.22 the intent to remove all enrolled land from the sustainable 199.23 forest incentive program. The claimant has 60 days to appeal 199.24 this determination. The appeal must be made in writing to the 199.25 commissioner, who shall, within 60 days, notify the claimant as 199.26 to the outcome of the appeal. Within 60 days after the 199.27 commissioner denies an appeal, or within 120 days after the 199.28 commissioner received a written appeal if the commissioner has 199.29 not made a determination in that time, the owner may appeal to 199.30 tax court under chapter 271 as if the appeal is from an order of 199.31 the commissioner. 199.32 (b) If the commissioner determines thepropertyland is to 199.33 be removed from the sustainable forest incentive program, the 199.34 claimant is liable for payment to the commissioner in the amount 199.35 equal to the payments received under this chapter for the 199.36 previous four-year period, plus interest. The claimant has 90 200.1 days to satisfy the payment for removal of land from the 200.2 sustainable forest incentive program under this section. If the 200.3 penalty is not paid within the 90-day period under this 200.4 paragraph, the commissioner shall certify the amount to the 200.5 county auditor for collection as a part of the general ad 200.6 valorem real property taxes on the land in the following taxes 200.7 payable year. 200.8 [EFFECTIVE DATE.] This section is effective the day 200.9 following final enactment. 200.10 Sec. 43. [290C.12] [DEATH OF CLAIMANT.] 200.11 Within one year after the death of the claimant, the 200.12 claimant's heir, devisee, or estate must either: 200.13 (1) notify the commissioner of election to terminate 200.14 enrollment in the sustainable forest incentive program; or 200.15 (2) make an application under this chapter to continue 200.16 enrollment of the land in the program. 200.17 Upon notification under clause (1), the commissioner shall 200.18 terminate the enrollment and issue a document releasing the land 200.19 from the covenant as provided in section 290C.04, paragraph 200.20 (c). Penalties under section 290C.11 shall not apply. If the 200.21 application under clause (2) is approved, the land is enrolled 200.22 in the program without a break. If the commissioner does not 200.23 receive notification within one year after the date of death, 200.24 enrollment in the program shall be terminated and penalties 200.25 under section 290C.11 shall not apply. 200.26 [EFFECTIVE DATE.] This section is effective the day 200.27 following final enactment, except in the case of claimants dying 200.28 prior to the day following final enactment, heirs, devisees, or 200.29 estates may make the election either six months after the 200.30 effective date of this provision or one year after the death of 200.31 the claimant, whichever is later. 200.32 Sec. 44. Minnesota Statutes 2002, section 469.1792, 200.33 subdivision 3, is amended to read: 200.34 Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a 200.35 district qualifying under this section may take either or both 200.36 of the following actions for any or all of its preexisting 201.1 districts: 201.2 (1) the authority may elect that the original local tax 201.3 rate under section 469.177, subdivision 1a, does not apply to 201.4 the district; and 201.5 (2) the authority may elect the fiscal disparities 201.6 contribution will be computed under section 469.177, subdivision 201.7 3, paragraph (a), regardless of the election that was made for 201.8 the district. 201.9 (b) The authority may take action under this subdivision 201.10 only after the municipality approves the action, by resolution, 201.11 after notice and public hearing in the manner provided under 201.12 section 469.175, subdivision 2. To be effective for taxes 201.13 payable in the following year, the resolution must be adopted 201.14 and the county auditor must be notified of the adoption on or 201.15 before July 1. 201.16 [EFFECTIVE DATE.] This section is effective for taxes 201.17 payable in 2004 and thereafter. 201.18 Sec. 45. Minnesota Statutes 2002, section 473F.07, 201.19 subdivision 4, is amended to read: 201.20 Subd. 4. [DISTRIBUTION NET TAX CAPACITY.] The 201.21 administrative auditor shall determine the proportion which the 201.22 index of each municipality bears to the sum of the indices of 201.23 all municipalities and shall then multiply this proportion in 201.24 the case of each municipality, by the areawide net tax capacity,201.25provided that if the distribution net tax capacity for a201.26municipality is less than 95 percent of the municipality's201.27previous year distribution net tax capacity, and more than ten201.28percent of the municipality's fiscal capacity consists of201.29manufactured home property, the municipality's distribution net201.30tax capacity will be increased to 95 percent of the previous201.31year net tax capacity and the distribution net tax capacity of201.32other municipalities in the area will be proportionately reduced. 201.33 [EFFECTIVE DATE.] This section is effective for taxes 201.34 payable in 2004 and subsequent years. 201.35 Sec. 46. Minnesota Statutes 2002, section 477A.011, 201.36 subdivision 30, is amended to read: 202.1 Subd. 30. [PRE-1940 HOUSING PERCENTAGE.] "Pre-1940 housing 202.2 percentage" for a city is 100 times themost recent1990 federal 202.3 census count of all housing units in the city built before 1940, 202.4 divided by the total number of all housing units in the city. 202.5 Housing units includes both occupied and vacant housing units as 202.6 defined by the federal census. 202.7 [EFFECTIVE DATE.] This section is effective for aids 202.8 payable in 2003 and thereafter. 202.9 Sec. 47. Minnesota Statutes 2002, section 515B.1-116, is 202.10 amended to read: 202.11 515B.1-116 [RECORDING.] 202.12 (a) A declaration, bylaws, any amendment to a declaration 202.13 or bylaws, and any other instrument affecting a common interest 202.14 community shall be entitled to be recorded. In those counties 202.15 which have a tract index, the county recorder shall enter the 202.16 declaration in the tract index for each unit affected. The 202.17 registrar of titles shall file the declaration in accordance 202.18 with section 508.351 or 508A.351. 202.19 (b) The recording officer shall upon request promptly 202.20 assign a number (CIC number) to a common interest community to 202.21 be formed or to a common interest community resulting from the 202.22 merger of two or more common interest communities. 202.23 (c) Documents recorded pursuant to this chapter shall in 202.24 the case of registered land be filed, and references to the 202.25 recording of documents shall mean filed in the case of 202.26 registered land. 202.27 (d) Subject to any specific requirements of this chapter, 202.28 if a recorded document relating to a common interest community 202.29 purports to require a certain vote or signatures approving any 202.30 restatement or amendment of the document by a certain number or 202.31 percentage of unit owners or secured parties, and if the 202.32 amendment or restatement is to be recorded pursuant to this 202.33 chapter, an affidavit of the president or secretary of the 202.34 association stating that the required vote or signatures have 202.35 been obtained shall be attached to the document to be recorded 202.36 and shall constitute prima facie evidence of the representations 203.1 contained therein. 203.2 (e) If a common interest community is located on registered 203.3 land, the recording fee for any document affecting two or more 203.4 units shall be the then-current fee for registering the document 203.5 on the certificates of title for the first ten affected 203.6 certificates and one-third of the then-current fee for each 203.7 additional affected certificate. This provision shall not apply 203.8 to recording fees for deeds of conveyance, with the exception of 203.9 deeds given pursuant to sections 515B.2-119 and 515B.3-112. 203.10 (f) Except as permitted under this subsection, a recording 203.11 officer shall not file or record a declaration creating a new 203.12 common interest community, unless the county treasurer has 203.13 certified that the property taxes payable in the current year 203.14 for the real estate included in the proposed common interest 203.15 community have been paid. This certification is in addition to 203.16 the certification for delinquent taxes required by section 203.17 272.12. In the case of preexisting common interest communities, 203.18 the recording officer shall accept, file, and record the 203.19 following instruments, without requiring a certification as to 203.20 the current or delinquent taxes on any of the units in the 203.21 common interest community: (i) a declaration subjecting the 203.22 common interest community to this chapter; (ii) a declaration 203.23 changing the form of a common interest community pursuant to 203.24 section 515B.2-123; or (iii) an amendment to or restatement of 203.25 the declaration, bylaws, or CIC plat. In order forthe203.26instrumentsan instrument to be accepted and recorded under the 203.27 preceding sentence, theassessor must certify or otherwise203.28inform the recording officer that, for taxes payable in the203.29current year, the assessor has allocated taxable values to each203.30unit or has separately assessed each unitinstrument must not 203.31 create or change unit or common area boundaries. 203.32 [EFFECTIVE DATE.] This section is effective for deeds or 203.33 instruments accepted for recording or registration on or after 203.34 July 1, 2003. 203.35 Sec. 48. Laws 2001, First Special Session chapter 5, 203.36 article 3, section 61, the effective date, is amended to read: 204.1 [EFFECTIVE DATE.] This section is effective August 1, 2001, 204.2 for deeds issued on or after August 1, 2001. This section is 204.3 effective August 1, 2006, for deeds issued before August 1, 2001. 204.4 Sec. 49. Laws 2001, First Special Session chapter 5, 204.5 article 3, section 63, the effective date, is amended to read: 204.6 [EFFECTIVE DATE.] This section is effective August 1, 2001, 204.7 for deeds issued on or after August 1, 2001. This section is 204.8 effective August 1, 2006, for deeds issued before August 1, 2001. 204.9 Sec. 50. Laws 2002, chapter 377, article 6, section 4, the 204.10 effective date, is amended to read: 204.11 [EFFECTIVE DATE.] This section is effectivefor aids204.12payable in 2004May 16, 2002, and thereafter. 204.13 Sec. 51. [REPEALER.] 204.14 (a) Minnesota Statutes 2002, section 274.04, is repealed. 204.15 (b) Minnesota Statutes 2002, section 477A.065, is repealed 204.16 effective for aid payable in 2004 and thereafter. 204.17 (c) Minnesota Rules, parts 8106.0100, subparts 11, 15, and 204.18 16; and 8106.0200, are repealed effective the day following 204.19 final enactment. 204.20 ARTICLE 9 204.21 DEPARTMENT SALES AND USE TAX INITIATIVES 204.22 Section 1. Minnesota Statutes 2002, section 289A.50, 204.23 subdivision 2a, is amended to read: 204.24 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] (a) If a 204.25 vendor has collected from a purchaser a tax on a transaction 204.26 that is not subject to the tax imposed by chapter 297A, the 204.27 purchaser may apply directly to the commissioner for a refund 204.28 under this section if: 204.29(a)(1) the purchaser is currently registered or was 204.30 registered during the period of the claim, to collect and remit 204.31 the sales tax or to remit the use tax; and 204.32 (2) either 204.33(b)(i) the amount of the refund to be applied for exceeds 204.34 $500, or 204.35 (ii) the amount of the refund to be applied for does not 204.36 exceed $500, but the purchaser also applies for a capital 205.1 equipment claim at the same time, and the total of the two 205.2 refunds exceeds $500. 205.3 (b) The purchaser may not file more than two applications 205.4 for refund under this subdivision in a calendar year. 205.5 [EFFECTIVE DATE.] This section is effective for claims 205.6 filed on or after the day following final enactment. 205.7 Sec. 2. Minnesota Statutes 2002, section 289A.60, is 205.8 amended by adding a subdivision to read: 205.9 Subd. 25. [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES 205.10 TAX RETURN.] A person who fails to report local sales tax on a 205.11 sales tax return or who fails to report local sales tax on 205.12 separate tax lines on the sales tax return is subject to a 205.13 penalty of five percent of the amount of tax not properly 205.14 reported on the return. A person who files a consolidated tax 205.15 return but fails to report location information is subject to a 205.16 $500 penalty for each return not containing location 205.17 information. In addition, the commissioner may revoke the 205.18 privilege for a taxpayer to file consolidated returns and may 205.19 require the taxpayer to separately register each location and to 205.20 file a tax return for each location. 205.21 [EFFECTIVE DATE.] This section is effective for returns 205.22 filed after June 30, 2003. 205.23 Sec. 3. Minnesota Statutes 2002, section 297A.61, 205.24 subdivision 3, is amended to read: 205.25 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 205.26 include, but are not limited to, each of the transactions listed 205.27 in this subdivision. 205.28 (b) Sale and purchase include: 205.29 (1) any transfer of title or possession, or both, of 205.30 tangible personal property, whether absolutely or conditionally, 205.31 for a consideration in money or by exchange or barter; and 205.32 (2) the leasing of or the granting of a license to use or 205.33 consume, for a consideration in money or by exchange or barter, 205.34 tangible personal property, other than a manufactured home used 205.35 for residential purposes for a continuous period of 30 days or 205.36 more. 206.1 (c) Sale and purchase include the production, fabrication, 206.2 printing, or processing of tangible personal property for a 206.3 consideration for consumers who furnish either directly or 206.4 indirectly the materials used in the production, fabrication, 206.5 printing, or processing. 206.6 (d) Sale and purchase include the preparing for a 206.7 consideration of food. Notwithstanding section 297A.67, 206.8 subdivision 2, taxable food includes, but is not limited to, the 206.9 following: 206.10 (1) prepared food sold by the retailer; 206.11 (2) soft drinks; 206.12 (3) candy; and 206.13 (4) all food sold through vending machines. 206.14 (e) A sale and a purchase includes the furnishing for a 206.15 consideration of electricity, gas, water, or steam for use or 206.16 consumption within this state. 206.17 (f) A sale and a purchase includes the transfer for a 206.18 consideration of computer software. 206.19 (g) A sale and a purchase includes the furnishing for a 206.20 consideration of the following services: 206.21 (1) the privilege of admission to places of amusement, 206.22 recreational areas, or athletic events, and the making available 206.23 of amusement devices, tanning facilities, reducing salons, steam 206.24 baths, turkish baths, health clubs, and spas or athletic 206.25 facilities; 206.26 (2) lodging and related services by a hotel, rooming house, 206.27 resort, campground, motel, or trailer camp and the granting of 206.28 any similar license to use real property other than the renting 206.29 or leasing of it for a continuous period of 30 days or more; 206.30 (3) nonresidential parking services, whether on a 206.31 contractual, hourly, or other periodic basis, except for parking 206.32 at a meter; 206.33 (4) the granting of membership in a club, association, or 206.34 other organization if: 206.35 (i) the club, association, or other organization makes 206.36 available for the use of its members sports and athletic 207.1 facilities, without regard to whether a separate charge is 207.2 assessed for use of the facilities; and 207.3 (ii) use of the sports and athletic facility is not made 207.4 available to the general public on the same basis as it is made 207.5 available to members. 207.6 Granting of membership means both onetime initiation fees and 207.7 periodic membership dues. Sports and athletic facilities 207.8 include golf courses; tennis, racquetball, handball, and squash 207.9 courts; basketball and volleyball facilities; running tracks; 207.10 exercise equipment; swimming pools; and other similar athletic 207.11 or sports facilities; 207.12 (5) delivery of aggregate materials and concrete block by a 207.13 third party if the delivery would be subject to the sales tax if 207.14 provided by the seller of the aggregate material or concrete 207.15 block; and 207.16 (6) services as provided in this clause: 207.17 (i) laundry and dry cleaning services including cleaning, 207.18 pressing, repairing, altering, and storing clothes, linen 207.19 services and supply, cleaning and blocking hats, and carpet, 207.20 drapery, upholstery, and industrial cleaning. Laundry and dry 207.21 cleaning services do not include services provided by coin 207.22 operated facilities operated by the customer; 207.23 (ii) motor vehicle washing, waxing, and cleaning services, 207.24 including services provided by coin operated facilities operated 207.25 by the customer, and rustproofing, undercoating, and towing of 207.26 motor vehicles; 207.27 (iii) building and residential cleaning, maintenance, and 207.28 disinfecting and exterminating services; 207.29 (iv) detective, security, burglar, fire alarm, and armored 207.30 car services; but not including services performed within the 207.31 jurisdiction they serve by off-duty licensed peace officers as 207.32 defined in section 626.84, subdivision 1, or services provided 207.33 by a nonprofit organization for monitoring and electronic 207.34 surveillance of persons placed on in-home detention pursuant to 207.35 court order or under the direction of the Minnesota department 207.36 of corrections; 208.1 (v) pet grooming services; 208.2 (vi) lawn care, fertilizing, mowing, spraying and sprigging 208.3 services; garden planting and maintenance; tree, bush, and shrub 208.4 pruning, bracing, spraying, and surgery; indoor plant care; 208.5 tree, bush, shrub, and stump removal; and tree trimming for 208.6 public utility lines. Services performed under a construction 208.7 contract for the installation of shrubbery, plants, sod, trees, 208.8 bushes, and similar items are not taxable; 208.9 (vii) massages, except when provided by a licensed health 208.10 care facility or professional or upon written referral from a 208.11 licensed health care facility or professional for treatment of 208.12 illness, injury, or disease; and 208.13 (viii) the furnishing of lodging, board, and care services 208.14 for animals in kennels and other similar arrangements, but 208.15 excluding veterinary and horse boarding services. 208.16 In applying the provisions of this chapter, the terms 208.17 "tangible personal property" and "sales at retail" include 208.18 taxable services listed in clause (6), items (i) to (vi) and 208.19 (viii) and the provision of these taxable services, unless 208.20 specifically provided otherwise. Services performed by an 208.21 employee for an employer are not taxable. Services performed by 208.22 a partnership or association for another partnership or 208.23 association are not taxable if one of the entities owns or 208.24 controls more than 80 percent of the voting power of the equity 208.25 interest in the other entity. Services performed between 208.26 members of an affiliated group of corporations are not taxable. 208.27 For purposes ofthis sectionthe preceding sentence, "affiliated 208.28 group of corporations" includes those entities that would be 208.29 classified as members of an affiliated group under United States 208.30 Code, title 26, section 1504, and that are eligible to file a 208.31 consolidated tax return for federal income tax purposes. 208.32 (h) A sale and a purchase includes the furnishing for a 208.33 consideration of tangible personal property or taxable services 208.34 by the United States or any of its agencies or 208.35 instrumentalities, or the state of Minnesota, its agencies, 208.36 instrumentalities, or political subdivisions. 209.1 (i) A sale and a purchase includes the furnishing for a 209.2 consideration of telecommunications services, including cable 209.3 television services and direct satellite services. 209.4 Telecommunications services are taxed to the extent allowed 209.5 under federal law if those services: 209.6 (1) either (i) originate and terminate in this state; or 209.7 (ii) originate in this state and terminate outside the state and 209.8 the service is charged to atelephone numbertelecommunications 209.9 customer located in this state or to the account of any 209.10 transmission instrument in this state; or (iii) originate 209.11 outside this state and terminate in this state and the service 209.12 is charged to atelephone numbertelecommunications customer 209.13 located in this state or to the account of any transmission 209.14 instrument in this state; or 209.15 (2) are rendered by providing a private communications 209.16 service for which the customer has one or more locations within 209.17 Minnesota connected to the service and the service is charged to 209.18 atelephone numbertelecommunications customer located in this 209.19 state or to the account of any transmission instrument in this 209.20 state. 209.21 All charges for mobile telecommunications services, as 209.22 defined in United States Code, title 4, section 124, are deemed 209.23 to be provided by the customer's home service provider and 209.24 sourced to the customer's place of primary use and are subject 209.25 to tax based upon the customer's place of primary use in 209.26 accordance with the Mobile Telecommunications Sourcing Act, 209.27 United States Code, title 4, sections 116 to 126. All other 209.28 definitions and provisions of the Mobile Telecommunications 209.29 Sourcing Act as provided in United States Code, title 4, are 209.30 hereby adopted. 209.31 (j) A sale and a purchase includes the furnishing for a 209.32 consideration of installation if the installation charges would 209.33 be subject to the sales tax if the installation were provided by 209.34 the seller of the item being installed. 209.35 [EFFECTIVE DATE.] This section is effective the day 209.36 following final enactment. 210.1 Sec. 4. Minnesota Statutes 2002, section 297A.61, 210.2 subdivision 12, is amended to read: 210.3 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 210.4 or used machinery, equipment, implements, accessories, and 210.5 contrivances used directly and principally intheagricultural 210.6 productionfor sale, but not including the processing, of210.7livestock, dairy animals, dairy products, poultry and poultry210.8products, fruits, vegetables, trees and shrubs, plants, forage,210.9grains, and bees and apiary products.210.10(b) Farm machinery includesincluding, but not limited to: 210.11 (1) machinery for the preparation, seeding, or cultivation 210.12 of soil for growing agricultural cropsand sod, for the210.13harvesting and threshing of agricultural products, or for the210.14harvesting or mowing of sod; 210.15 (2) barn cleaners, milking systems, grain dryers, feeding 210.16 systems including stationary feed bunks, and similar 210.17 installations, whether or not the equipment is installed by the 210.18 seller and becomes part of the real property; and 210.19 (3) irrigation equipment sold for exclusively agricultural 210.20 use, including pumps, pipe fittings, valves, sprinklers, and 210.21 other equipment necessary to the operation of an irrigation 210.22 system when sold as part of an irrigation system, whether or not 210.23 the equipment is installed by the seller and becomes part of the 210.24 real property;. 210.25(4) logging equipment, including chain saws used for210.26commercial logging;210.27(5) fencing used for the containment of farmed cervidae, as210.28defined in section 17.451, subdivision 2;210.29(6) primary and backup generator units used to generate210.30electricity for the purpose of operating farm machinery, as210.31defined in this subdivision, or providing light or space heating210.32necessary for the production of livestock, dairy animals, dairy210.33products, or poultry and poultry products;210.34(7) aquaculture production equipment as defined in210.35subdivision 13; and210.36(8) equipment used for maple syrup harvesting.211.1(c)(b) Farm machinery does not include: 211.2 (1) repair or replacement parts; 211.3 (2) tools, shop equipment, grain bins, fencing material 211.4except fencing material covered by paragraph (b), clause (5), 211.5 communication equipment, and other farm supplies; 211.6 (3) motor vehicles taxed under chapter 297B; 211.7 (4) snowmobiles or snow blowers;or211.8 (5) lawn mowers except those used in the production of sod 211.9 for sale, or garden-type tractors or garden tillers; or 211.10 (6) machinery, equipment, implements, accessories, and 211.11 contrivances used directly in the production of horses not 211.12 raised for slaughter, fur-bearing animals, or research animals. 211.13 [EFFECTIVE DATE.] This section is effective for sales and 211.14 purchases made after June 30, 2003. 211.15 Sec. 5. Minnesota Statutes 2002, section 297A.61, 211.16 subdivision 34, is amended to read: 211.17 Subd. 34. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 211.18 through vending machines" means food dispensed from a machine or 211.19 othermechanicaldevice that accepts payment including honor 211.20 payments. 211.21 [EFFECTIVE DATE.] This section is effective for sales and 211.22 purchases made on or after the day following final enactment. 211.23 Sec. 6. Minnesota Statutes 2002, section 297A.61, is 211.24 amended by adding a subdivision to read: 211.25 Subd. 35. [AGRICULTURAL PRODUCTION.] "Agricultural 211.26 production" includes, but is not limited to, horticulture, 211.27 floriculture, maple syrup harvesting, and the raising of pets, 211.28 livestock as defined in section 17A.03, subdivision 5, poultry, 211.29 dairy and poultry products, bees and apiary products, the 211.30 raising and harvesting of agricultural crops, sod, fur-bearing 211.31 animals, research animals, and horses. 211.32 [EFFECTIVE DATE.] This section is effective for sales and 211.33 purchases made after June 30, 2003. 211.34 Sec. 7. Minnesota Statutes 2002, section 297A.665, is 211.35 amended to read: 211.36 297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 212.1 (a) For the purpose of the proper administration of this 212.2 chapter and to prevent evasion of the tax, until the contrary is 212.3 established, it is presumed that: 212.4 (1) all gross receipts are subject to the tax; and 212.5 (2) all retail sales for delivery in Minnesota are for 212.6 storage, use, or other consumption in Minnesota. 212.7 (b) The burden of proving that a sale is not a taxable 212.8 retail sale is on the seller. However, the seller may take from 212.9 the purchaser at the time of the saleana fully completed 212.10 exemption certificateclaiming that the property purchased is212.11for resale or that the sale is otherwise exempt from the tax212.12imposed by this chapterwhich conclusively relieves the seller 212.13 from collecting and remitting the tax. This relief from 212.14 liability does not apply to a seller who fraudulently fails to 212.15 collect the tax or solicits purchasers to participate in the 212.16 unlawful claim of an exemption. If a seller claiming that 212.17 certain sales are exempt, who doesis notpossessin possession 212.18 of the required exemption certificates, must acquire the212.19certificateswithin 60 days after receiving written notice from 212.20 the commissioner that the certificates are required, deductions 212.21 claimed by the seller that required delivery of the certificates 212.22 must be disallowed. If the certificates arenot212.23obtaineddelivered to the commissioner within the 60-day period, 212.24 thesales are considered taxable sales under this212.25chapter.commissioner may verify the reason or basis for the 212.26 exemption claimed in the certificates before allowing any 212.27 deductions. A deduction must not be granted on the basis of 212.28 certificates delivered to the commissioner after the 60-day 212.29 period. 212.30 (c) A purchaser of tangible personal property or any items 212.31 listed in section 297A.63 that are shipped or brought to 212.32 Minnesota by the purchaser has the burden of proving that the 212.33 property was not purchased from a retailer for storage, use, or 212.34 consumption in Minnesota. 212.35 [EFFECTIVE DATE.] This section is effective for exemption 212.36 certificates received for sales occurring after June 30, 2003. 213.1 Sec. 8. Minnesota Statutes 2002, section 297A.67, 213.2 subdivision 2, is amended to read: 213.3 Subd. 2. [FOOD AND FOOD INGREDIENTS.] Food and food 213.4 ingredients are exempt. For purposes of this subdivision, 213.5 "food" and "food ingredients" mean substances, whether in 213.6 liquid, concentrated, solid, frozen, dried, or dehydrated form, 213.7 that are sold for ingestion or chewing by humans and are 213.8 consumed for their taste or nutritional value. Food and food 213.9 ingredients exempt under this subdivision do not include candy, 213.10 soft drinks, food sold through vending machines, and prepared 213.11 foods. Food and food ingredients do not include alcoholic 213.12 beverages, dietary supplements, and tobacco. For purposes of 213.13 this subdivision, "alcoholic beverages" means beverages that are 213.14 suitable for human consumption and contain one-half of one 213.15 percent or more of alcohol by volume. For purposes of this 213.16 subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 213.17 tobacco, or any other item that contains tobacco. For purposes 213.18 of this subdivision, "dietary supplements" means any product, 213.19 other than tobacco, intended to supplement the diet that: 213.20 (1) contains one or more of the following dietary 213.21 ingredients: 213.22 (i) a vitamin; 213.23 (ii) a mineral; 213.24 (iii) an herb or other botanical; 213.25 (iv) an amino acid; 213.26 (v) a dietary substance for use by humans to supplement the 213.27 diet by increasing the total dietary intake; and 213.28 (vi) a concentrate, metabolite, constituent, extract, or 213.29 combination of any ingredient described in items (i) to (v); 213.30 (2) is intended for ingestion in tablet, capsule, powder, 213.31 softgel, gelcap, or liquid form, or if not intended for 213.32 ingestion in such form, is not represented as conventional food 213.33 and is not represented for use as a sole item of a meal or of 213.34 the diet; and 213.35 (3) is required to be labeled as a dietary supplement, 213.36 identifiable by the supplement facts box found on the label and 214.1 as required pursuant to Code of Federal Regulations, title 21, 214.2 section 101.36. 214.3 [EFFECTIVE DATE.] This section is effective the day 214.4 following final enactment. 214.5 Sec. 9. Minnesota Statutes 2002, section 297A.68, 214.6 subdivision 5, is amended to read: 214.7 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 214.8 exempt. The tax must be imposed and collected as if the rate 214.9 under section 297A.62, subdivision 1, applied, and then refunded 214.10 in the manner provided in section 297A.75. 214.11 "Capital equipment" means machinery and equipment purchased 214.12 or leased, and used in this state by the purchaser or lessee 214.13 primarily for manufacturing, fabricating, mining, or refining 214.14 tangible personal property to be sold ultimately at retail if 214.15 the machinery and equipment are essential to the integrated 214.16 production process of manufacturing, fabricating, mining, or 214.17 refining. Capital equipment also includes machinery and 214.18 equipment used to electronically transmit results retrieved by a 214.19 customer of an online computerized data retrieval system. 214.20 (b) Capital equipment includes, but is not limited to: 214.21 (1) machinery and equipment used to operate, control, or 214.22 regulate the production equipment; 214.23 (2) machinery and equipment used for research and 214.24 development, design, quality control, and testing activities; 214.25 (3) environmental control devices that are used to maintain 214.26 conditions such as temperature, humidity, light, or air pressure 214.27 when those conditions are essential to and are part of the 214.28 production process; 214.29 (4) materials and supplies used to construct and install 214.30 machinery or equipment; 214.31 (5) repair and replacement parts, including accessories, 214.32 whether purchased as spare parts, repair parts, or as upgrades 214.33 or modifications to machinery or equipment; 214.34 (6) materials used for foundations that support machinery 214.35 or equipment; 214.36 (7) materials used to construct and install special purpose 215.1 buildings used in the production process; and 215.2 (8) ready-mixed concretetrucksequipment in which the 215.3 ready-mixed concrete is mixed as part of the delivery 215.4 process regardless if mounted on a chassis and leases of 215.5 ready-mixed concrete trucks. 215.6 (c) Capital equipment does not include the following: 215.7 (1) motor vehicles taxed under chapter 297B; 215.8 (2) machinery or equipment used to receive or store raw 215.9 materials; 215.10 (3) building materials, except for materials included in 215.11 paragraph (b), clauses (6) and (7); 215.12 (4) machinery or equipment used for nonproduction purposes, 215.13 including, but not limited to, the following: plant security, 215.14 fire prevention, first aid, and hospital stations; support 215.15 operations or administration; pollution control; and plant 215.16 cleaning, disposal of scrap and waste, plant communications, 215.17 space heating, cooling, lighting, or safety; 215.18 (5) farm machinery and aquaculture production equipment as 215.19 defined by section 297A.61, subdivisions 12 and 13; 215.20 (6) machinery or equipment purchased and installed by a 215.21 contractor as part of an improvement to real property; or 215.22 (7) any other item that is not essential to the integrated 215.23 process of manufacturing, fabricating, mining, or refining. 215.24 (d) For purposes of this subdivision: 215.25 (1) "Equipment" means independent devices or tools separate 215.26 from machinery but essential to an integrated production 215.27 process, including computers and computer software, used in 215.28 operating, controlling, or regulating machinery and equipment; 215.29 and any subunit or assembly comprising a component of any 215.30 machinery or accessory or attachment parts of machinery, such as 215.31 tools, dies, jigs, patterns, and molds. 215.32 (2) "Fabricating" means to make, build, create, produce, or 215.33 assemble components or property to work in a new or different 215.34 manner. 215.35 (3) "Integrated production process" means a process or 215.36 series of operations through which tangible personal property is 216.1 manufactured, fabricated, mined, or refined. For purposes of 216.2 this clause, (i) manufacturing begins with the removal of raw 216.3 materials from inventory and ends when the last process prior to 216.4 loading for shipment has been completed; (ii) fabricating begins 216.5 with the removal from storage or inventory of the property to be 216.6 assembled, processed, altered, or modified and ends with the 216.7 creation or production of the new or changed product; (iii) 216.8 mining begins with the removal of overburden from the site of 216.9 the ores, minerals, stone, peat deposit, or surface materials 216.10 and ends when the last process before stockpiling is completed; 216.11 and (iv) refining begins with the removal from inventory or 216.12 storage of a natural resource and ends with the conversion of 216.13 the item to its completed form. 216.14 (4) "Machinery" means mechanical, electronic, or electrical 216.15 devices, including computers and computer software, that are 216.16 purchased or constructed to be used for the activities set forth 216.17 in paragraph (a), beginning with the removal of raw materials 216.18 from inventory through completion of the product, including 216.19 packaging of the product. 216.20(4)(5) "Machinery and equipment used for pollution control" 216.21 means machinery and equipment used solely to eliminate, prevent, 216.22 or reduce pollution resulting from an activity described in 216.23 paragraph (a). 216.24(5)(6) "Manufacturing" means an operation or series of 216.25 operations where raw materials are changed in form, composition, 216.26 or condition by machinery and equipment and which results in the 216.27 production of a new article of tangible personal property. For 216.28 purposes of this subdivision, "manufacturing" includes the 216.29 generation of electricity or steam to be sold at retail. 216.30(6)(7) "Mining" means the extraction of minerals, ores, 216.31 stone, or peat. 216.32(7)(8) "Online data retrieval system" means a system whose 216.33 cumulation of information is equally available and accessible to 216.34 all its customers. 216.35(8)(9) "Primarily" means machinery and equipment used 50 216.36 percent or more of the time in an activity described in 217.1 paragraph (a). 217.2(9)(10) "Refining" means the process of converting a 217.3 natural resource toaan intermediate or finished product, 217.4 including the treatment of water to be sold at retail. 217.5 [EFFECTIVE DATE.] This section is effective for sales and 217.6 purchases made after December 31, 2003. 217.7 Sec. 10. Minnesota Statutes 2002, section 297A.68, is 217.8 amended by adding a subdivision to read: 217.9 Subd. 39. [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 217.10 tangible personal property or services is exempt from tax for a 217.11 period of six months from the effective date of the law change 217.12 that results in the imposition of the tax under this chapter if: 217.13 (1) the act imposing the tax does not have transitional 217.14 effective date language for existing construction contracts and 217.15 construction bids; and 217.16 (2) the requirements of paragraph (b) are met. 217.17 (b) A sale is tax exempt under paragraph (a) if it meets 217.18 the requirements of either clause (1) or (2): 217.19 (1) For a construction contract: 217.20 (i) the goods or services sold must be used for the 217.21 performance of a bona fide written lump sum or fixed price 217.22 construction contract; 217.23 (ii) the contract must be entered into before the date the 217.24 goods or services become subject to the sales tax; 217.25 (iii) the contract must not provide for allocation of 217.26 future taxes; and 217.27 (iv) for each qualifying contract the contractor must give 217.28 the seller documentation of the contract on which an exemption 217.29 is to be claimed. 217.30 (2) For a bid: 217.31 (i) the goods or services sold must be used pursuant to an 217.32 obligation of a bid or bids; 217.33 (ii) the bid or bids must be submitted and accepted before 217.34 the date the goods or services became subject to the sales tax; 217.35 (iii) the bid or bids must not be able to be withdrawn, 217.36 modified, or changed without forfeiting a bond; and 218.1 (iv) for each qualifying bid, the contractor must give the 218.2 seller documentation of the bid on which an exemption is to be 218.3 claimed. 218.4 [EFFECTIVE DATE.] This section is effective the day 218.5 following final enactment. 218.6 Sec. 11. Minnesota Statutes 2002, section 297A.69, 218.7 subdivision 2, is amended to read: 218.8 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 218.9(a)Materials stored, used, or consumed in agricultural 218.10 production of personal property intended to be sold ultimately 218.11 at retail are exempt, whether or not the item becomes an 218.12 ingredient or constituent part of the property produced. 218.13 Materials that qualify for this exemption include, but are not 218.14 limited to, the following: 218.15 (1) feeds, seeds, trees, fertilizers, and herbicides, 218.16 including when purchased for use by farmers in a federal or 218.17 state farm or conservation program; 218.18 (2) materials sold to a veterinarian to be used or consumed 218.19 in the care, medication, and treatment of agricultural 218.20 production animals and horses; 218.21 (3) chemicals, including chemicals used for cleaning food 218.22 processing machinery and equipment; 218.23 (4) materials, including chemicals, fuels, and electricity 218.24 purchased by persons engaged in agricultural production to treat 218.25 waste generated as a result of the production process; 218.26 (5) fuels, electricity, gas, and steam used or consumed in 218.27 the production process, except that electricity, gas, or steam 218.28 used for space heating, cooling, or lighting is exempt if (i) it 218.29 is in excess of the average climate control or lighting for the 218.30 production area, and (ii) it is necessary to produce that 218.31 particular product; 218.32 (6) petroleum products and lubricants; 218.33 (7) packaging materials, including returnable containers 218.34 used in packaging food and beverage products; and 218.35 (8) accessory tools and equipment that are separate 218.36 detachable units with an ordinary useful life of less than 12 219.1 months used in producing a direct effect upon the product. 219.2 Machinery, equipment, implements, tools, accessories, 219.3 appliances, contrivances, and furniture and fixtures, except 219.4 those listed in this clause are not included within this 219.5 exemption. 219.6(b) For purposes of this subdivision, "agricultural219.7production" includes, but is not limited to, horticulture,219.8floriculture, maple syrup harvesting, and the raising of pets,219.9fur-bearing animals, research animals, horses, farmed cervidae219.10as defined in section 17.451, subdivision 2, llamas as defined219.11in section 17.455, subdivision 2, and ratitae as defined in219.12section 17.453, subdivision 3.219.13 [EFFECTIVE DATE.] This section is effective for sales and 219.14 purchases made after December 31, 2003. 219.15 Sec. 12. Minnesota Statutes 2002, section 297A.69, 219.16 subdivision 3, is amended to read: 219.17 Subd. 3. [FARM MACHINERYREPAIR AND REPLACEMENT PARTS.] 219.18 Repair and replacement parts, except tires, used for maintenance 219.19 or repair of farm machinery, logging equipment, and aquaculture 219.20 production equipment are exempt, if the part replaces afarm219.21 machinery part assigned a specific or generic part number by the 219.22 manufacturer of thefarmmachinery. 219.23 [EFFECTIVE DATE.] This section is effective for sales and 219.24 purchases made after June 30, 2003. 219.25 Sec. 13. Minnesota Statutes 2002, section 297A.69, 219.26 subdivision 4, is amended to read: 219.27 Subd. 4. [FARMMACHINERY, EQUIPMENT, AND FENCING.] The 219.28 following machinery, equipment, and fencing is exempt: 219.29 (1) farm machineryis exempt.; 219.30 (2) logging equipment, including chain saws used for 219.31 commercial logging; 219.32 (3) fencing used for the containment of farmed cervidae, as 219.33 defined in section 17.451, subdivision 2; 219.34 (4) primary and backup generator units used to generate 219.35 electricity for the purpose of operating farm machinery, 219.36 aquacultural production equipment, or logging equipment, or 220.1 providing light or space heating necessary for the production of 220.2 livestock, dairy animals, dairy products, or poultry and poultry 220.3 products; and 220.4 (5) aquaculture production equipment. 220.5 [EFFECTIVE DATE.] This section is effective for sales and 220.6 purchases made after June 30, 2003. 220.7 Sec. 14. Minnesota Statutes 2002, section 297B.025, 220.8 subdivision 1, is amended to read: 220.9 Subdivision 1. [NONCOLLECTOR VEHICLE.] Purchase or use of 220.10 a passenger automobile as defined in section 168.011, 220.11 subdivision 7, shall be taxed pursuant to section 297B.02, 220.12 subdivision 2, if the passenger automobileis(1) is in the 220.13 tenth or subsequent year of vehicle life, and (2)is not an220.14above-market automobile as designated by the registrar of motor220.15vehiclesdoes not have a resale value of $3,000 or more, as 220.16 determined using nationally recognized sources of information on 220.17 automobile resale values, as designated by the registrar of 220.18 motor vehicles. 220.19The registrar of motor vehicles shall prepare, and220.20distribute to all deputy motor vehicle registrars by July 15,220.211985, a listing by make, model, and year of above-market220.22automobiles. Except as provided by subdivision 2, the registrar220.23must include in the list all automobiles with a resale value of220.24$3,000 or more, as determined using nationally recognized220.25sources of information on automobile resale values. The220.26registrar shall revise the list by February 1 of each year. The220.27initial list and all subsequent revisions must include only220.28those automobiles which are in the tenth or subsequent year of220.29vehicle life.220.30 [EFFECTIVE DATE.] This section is effective for vehicles 220.31 purchased after June 30, 2003. 220.32 Sec. 15. Minnesota Statutes 2002, section 297B.025, 220.33 subdivision 2, is amended to read: 220.34 Subd. 2. [COLLECTOR VEHICLE.] A passenger automobile that 220.35 is registered under section 168.10, subdivision 1a, 1b, 1c, 1d, 220.36 or 1h, or a fire truck registered under section 168.10, 221.1 subdivision 1c, shall be taxed under section 297B.02, 221.2 subdivision 3, and the registrar shall not designate as an221.3above-market automobile a passenger automobile or a fire truck221.4registered under those subdivisions. If the vehicle is 221.5 subsequently registered in another class not under section 221.6 168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of 221.7 the date of registration under those subdivisions, it shall be 221.8 subject to the full excise tax imposed under subdivision 1. 221.9 [EFFECTIVE DATE.] This section is effective for vehicles 221.10 purchased after December 31, 2003. 221.11 Sec. 16. Minnesota Statutes 2002, section 297B.035, 221.12 subdivision 1, is amended to read: 221.13 Subdivision 1. [ORDINARY COURSE OF BUSINESS.] Except as 221.14 provided in this section, motor vehicles purchased for resale in 221.15 the ordinary course of businessor usedby any motor vehicle 221.16 dealer, as defined in section 168.011, subdivision 21, who is 221.17 licensed under section 168.27, subdivision 2 or 3, which bear 221.18 dealer plates as authorized by section 168.27, subdivision 16, 221.19 shall be exempt from the provisions of this chapter. 221.20 [EFFECTIVE DATE.] This section is effective the day 221.21 following final enactment. 221.22 Sec. 17. [REPEALER.] 221.23 (a) Minnesota Statutes 2002, section 297A.72, subdivision 221.24 1, is repealed effective for exemption certificates received for 221.25 sales occurring after June 30, 2003. 221.26 (b) Minnesota Statutes 2002, section 297A.97, is repealed 221.27 effective for sales and purchases occurring after December 31, 221.28 2003. 221.29 (c) Minnesota Rules, parts 8130.0800, subparts 5 and 12; 221.30 8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4; 221.31 8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and 221.32 8130.8300, are repealed effective the day following final 221.33 enactment. 221.34 ARTICLE 10 221.35 DEPARTMENT SPECIAL TAXES INITIATIVES 221.36 Section 1. Minnesota Statutes 2002, section 115B.24, 222.1 subdivision 8, is amended to read: 222.2 Subd. 8. [PENALTIES; ENFORCEMENT.] The audit, penalty and 222.3 enforcement provisions applicable to corporate franchise taxes 222.4 imposed under chapter 290 apply to the taxes imposed under 222.5 section 115B.22 and those provisions shall be administered by 222.6 the commissioner. 222.7 [EFFECTIVE DATE.] This section is effective the day 222.8 following final enactment. 222.9 Sec. 2. Minnesota Statutes 2002, section 295.50, 222.10 subdivision 9b, is amended to read: 222.11 Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means 222.12 inpatient and outpatient services and other goods and services 222.13 provided by hospitals, surgical centers, or health care 222.14 providers. They include the following health care goods and 222.15 services provided to a patient or consumer: 222.16 (1) bed and board; 222.17 (2) nursing services and other related services; 222.18 (3) use of hospitals, surgical centers, or health care 222.19 provider facilities; 222.20 (4) medical social services; 222.21 (5) drugs, biologicals, supplies, appliances, and 222.22 equipment; 222.23 (6) other diagnostic or therapeutic items or services; 222.24 (7) medical or surgical services; 222.25 (8) items and services furnished to ambulatory patients not 222.26 requiring emergency care; 222.27 (9) emergency services; and 222.28 (10) covered services listed in section 256B.0625 and in 222.29 Minnesota Rules, parts 9505.0170 to 9505.0475. 222.30 (b) "Patient services" does not include: 222.31 (1) services provided to nursing homes licensed under 222.32 chapter 144A;and222.33 (2) examinations for purposes of utilization reviews, 222.34 insurance claims or eligibility, litigation, and employment, 222.35 including reviews of medical records for those purposes; 222.36 (3) services provided by community residential mental 223.1 health facilities licensed under Minnesota Rules, parts 223.2 9520.0500 to 9520.0690; 223.3 (4) services provided by community support programs and 223.4 family community support programs approved under Minnesota 223.5 Rules, parts 9535.1700 to 9535.1760; 223.6 (5) services provided by community mental health centers as 223.7 defined in section 245.62, subdivision 2; 223.8 (6) services provided by assisted living programs and 223.9 congregate housing programs; and 223.10 (7) hospice care services. 223.11 [EFFECTIVE DATE.] This section is effective for gross 223.12 revenues received after December 31, 2002. 223.13 Sec. 3. Minnesota Statutes 2002, section 295.53, 223.14 subdivision 1, is amended to read: 223.15 Subdivision 1. [EXEMPTIONS.] (a) The following payments 223.16 are excluded from the gross revenues subject to the hospital, 223.17 surgical center, or health care provider taxes under sections 223.18 295.50 to295.57295.59: 223.19 (1) payments received for services provided under the 223.20 Medicare program, including payments received from the 223.21 government, and organizations governed by sections 1833 and 1876 223.22 of title XVIII of the federal Social Security Act, United States 223.23 Code, title 42, section 1395, and enrollee deductibles, 223.24 coinsurance, and copayments, whether paid by the Medicare 223.25 enrollee or by a Medicare supplemental coverage as defined in 223.26 section 62A.011, subdivision 3, clause (10). Payments for 223.27 services not covered by Medicare are taxable; 223.28 (2) medical assistance payments including payments received 223.29 directly from the government or from a prepaid plan; 223.30 (3) payments received for home health care services; 223.31 (4) payments received from hospitals or surgical centers 223.32 for goods and services on which liability for tax is imposed 223.33 under section 295.52 or the source of funds for the payment is 223.34 exempt under clause (1), (2), (7), (8), (10), (13), 223.35 or(20)(17); 223.36 (5) payments received from health care providers for goods 224.1 and services on which liability for tax is imposed under this 224.2 chapter or the source of funds for the payment is exempt under 224.3 clause (1), (2), (7), (8), (10), (13), or(20)(17); 224.4 (6) amounts paid for legend drugs, other than nutritional 224.5 products, to a wholesale drug distributor who is subject to tax 224.6 under section 295.52, subdivision 3, reduced by reimbursements 224.7 received for legend drugs otherwise exempt under this chapter; 224.8 (7) payments received under the general assistance medical 224.9 care program including payments received directly from the 224.10 government or from a prepaid plan; 224.11 (8) payments received for providing services under the 224.12 MinnesotaCare program including payments received directly from 224.13 the government or from a prepaid plan and enrollee deductibles, 224.14 coinsurance, and copayments. For purposes of this clause, 224.15 coinsurance means the portion of payment that the enrollee is 224.16 required to pay for the covered service; 224.17 (9) payments received by a health care provider or the 224.18 wholly owned subsidiary of a health care provider for care 224.19 provided outside Minnesota; 224.20 (10) payments received from the chemical dependency fund 224.21 under chapter 254B; 224.22 (11) payments received in the nature of charitable 224.23 donations that are not designated for providing patient services 224.24 to a specific individual or group; 224.25 (12) payments received for providing patient services 224.26 incurred through a formal program of health care research 224.27 conducted in conformity with federal regulations governing 224.28 research on human subjects. Payments received from patients or 224.29 from other persons paying on behalf of the patients are subject 224.30 to tax; 224.31 (13) payments received from any governmental agency for 224.32 services benefiting the public, not including payments made by 224.33 the government in its capacity as an employer or insurer; 224.34(14) payments received for services provided by community224.35residential mental health facilities licensed under Minnesota224.36Rules, parts 9520.0500 to 9520.0690, community support programs225.1and family community support programs approved under Minnesota225.2Rules, parts 9535.1700 to 9535.1760, and community mental health225.3centers as defined in section 245.62, subdivision 2;225.4(15)(14) government payments received by a regional 225.5 treatment center; 225.6(16) payments received for hospice care services;225.7(17)(15) payments received by a health care provider for 225.8 hearing aids and related equipment or prescription eyewear 225.9 delivered outside of Minnesota; 225.10(18)(16) payments received by an educational institution 225.11 from student tuition, student activity fees, health care service 225.12 fees, government appropriations, donations, or grants. Fee for 225.13 service payments and payments for extended coverage are taxable; 225.14 and 225.15(19) payments received for services provided by: assisted225.16living programs and congregate housing programs; and225.17(20)(17) payments received under the federal Employees 225.18 Health Benefits Act, United States Code, title 5, section 225.19 8909(f), as amended by the Omnibus Reconciliation Act of 1990. 225.20 (b) Payments received by wholesale drug distributors for 225.21 legend drugs sold directly to veterinarians or veterinary bulk 225.22 purchasing organizations are excluded from the gross revenues 225.23 subject to the wholesale drug distributor tax under sections 225.24 295.50 to 295.59. 225.25 [EFFECTIVE DATE.] This section is effective for gross 225.26 revenues received after December 31, 2002. 225.27 Sec. 4. Minnesota Statutes 2002, section 297F.01, 225.28 subdivision 21a, is amended to read: 225.29 Subd. 21a. [UNLICENSED SELLER.] "Unlicensed seller" means 225.30 anyone who is not licensed under section 297F.03or 461.12to 225.31 sell the particular product to the purchaser or possessor of the 225.32 product. 225.33 [EFFECTIVE DATE.] This section is effective July 1, 2003. 225.34 Sec. 5. Minnesota Statutes 2002, section 297F.01, 225.35 subdivision 23, is amended to read: 225.36 Subd. 23. [WHOLESALE SALES PRICE.] "Wholesale sales price" 226.1 means theestablishedprice stated on the price list in effect 226.2 at the time of sale for which a manufacturer or person sells a 226.3 tobacco product to a distributor, exclusive of any discount, 226.4 promotional offer, or other reduction. For purposes of this 226.5 subdivision, "price list" means the manufacturer's price at 226.6 which tobacco products are made available for sale to all 226.7 distributors on an ongoing basis. 226.8 [EFFECTIVE DATE.] This section is effective July 1, 2003. 226.9 Sec. 6. Minnesota Statutes 2002, section 297F.06, 226.10 subdivision 4, is amended to read: 226.11 Subd. 4. [TOBACCO PRODUCTS USE TAX.] The tobacco products 226.12 use tax does not apply to the possession, use, or storage of 226.13 tobacco productsin quantities of:that have an aggregate cost 226.14 in any calendar month to the consumer of $100 or less. 226.15(1) not more than 50 cigars;226.16(2) not more than ten ounces snuff or snuff powder;226.17(3) not more than one pound smoking or chewing tobacco or226.18any other tobacco product in the possession of any one consumer.226.19 [EFFECTIVE DATE.] This section is effective July 1, 2003. 226.20 Sec. 7. Minnesota Statutes 2002, section 297F.20, 226.21 subdivision 1, is amended to read: 226.22 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 226.23 A person or consumer required to file a return, report, or other 226.24 document with the commissioner who fails to do so is guilty of a 226.25 misdemeanor. 226.26 (b) A person or consumer required to pay or to collect and 226.27 remit a tax under this chapter, who fails to do so when 226.28 required, is guilty of a misdemeanor. 226.29 [EFFECTIVE DATE.] This section is effective for acts 226.30 committed on or after July 1, 2003. 226.31 Sec. 8. Minnesota Statutes 2002, section 297F.20, 226.32 subdivision 2, is amended to read: 226.33 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.] 226.34 (a) A person or consumer required to file a return, report, or 226.35 other document with the commissioner, who knowingly, rather than 226.36 accidentally, inadvertently, or negligently, fails to file it 227.1 when required, is guilty of a gross misdemeanor. 227.2 (b) A person or consumer required to pay or to collect and 227.3 remit a tax under this chapter, who knowingly, rather than 227.4 accidentally, inadvertently, or negligently, fails to file it 227.5 when required, is guilty of a gross misdemeanor. 227.6 [EFFECTIVE DATE.] This section is effective for acts 227.7 committed on or after July 1, 2003. 227.8 Sec. 9. Minnesota Statutes 2002, section 297F.20, 227.9 subdivision 3, is amended to read: 227.10 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 227.11 person or consumer who files with the commissioner a return, 227.12 report, or other document, or who maintains or provides invoices 227.13 subject to review by the commissioner under this chapter, known 227.14 by the person or consumer to be fraudulent or false concerning a 227.15 material matter, is guilty of a felony. 227.16 (b) A person or consumer who knowingly aids or assists in, 227.17 or advises in the preparation or presentation of a return, 227.18 report, invoice, or other document that is fraudulent or false 227.19 concerning a material matter, whether or not the falsity or 227.20 fraud is committed with the knowledge or consent of the 227.21 person or consumer authorized or required to present the return, 227.22 report, invoice, or other document, is guilty of a felony. 227.23 [EFFECTIVE DATE.] This section is effective for acts 227.24 committed on or after July 1, 2003. 227.25 Sec. 10. Minnesota Statutes 2002, section 297F.20, 227.26 subdivision 6, is amended to read: 227.27 Subd. 6. [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.] 227.28 (a) A person, other than a licensed distributor or a consumer, 227.29 who possesses, receives, or transportsmore than 200 butfewer 227.30 than 5,000 unstamped cigarettes, or up to$100$350 worth of 227.31 untaxed tobacco products is guilty of a misdemeanor. 227.32 (b) A person, other than a licensed distributor or a 227.33 consumer, who possesses, receives, or transports 5,000 or more, 227.34 but fewer than 20,001 unstamped cigarettes, orup to $500more 227.35 than $350 but less than $1,400 worth of untaxed tobacco products 227.36 is guilty of a gross misdemeanor. 228.1 (c) A person, other than a licensed distributor or a 228.2 consumer, who possesses, receives, or transports more than 228.3 20,000 unstamped cigarettes, or$500$1,400 or more worth of 228.4 untaxed tobacco products is guilty of a felony. 228.5 (d) For purposes of this subdivision, an individual in 228.6 possession of more than 4,999 unstamped cigarettes, or more than 228.7 $350 worth of untaxed tobacco products, is presumed not to be a 228.8 consumer. 228.9 [EFFECTIVE DATE.] This section is effective for acts 228.10 committed on or after July 1, 2003. 228.11 Sec. 11. Minnesota Statutes 2002, section 297F.20, 228.12 subdivision 9, is amended to read: 228.13 Subd. 9. [PURCHASES FROM UNLICENSED SELLERS.] (a) No 228.14 retailer or subjobber shall purchase cigarettes or tobacco 228.15 products from any person who is not licensed under section 228.16 297F.03 as a licensed distributor or subjobber. 228.17 (b) A retailer,or subjobber, or consumerwho purchases 228.18 from an unlicensed sellermore than 200 butfewer than 5,000 228.19 cigarettes or up to$100$350 worth of tobacco products is 228.20 guilty of a misdemeanor. 228.21(b)(c) A retailer,or subjobber, or consumerwho 228.22 purchases from an unlicensed seller 5,000 or more, but fewer 228.23 than 20,001 cigarettes orup to $500more than $350 but less 228.24 than $1,400 worth ofuntaxedtobacco products is guilty of a 228.25 gross misdemeanor. 228.26(c)(d) A retailer,or subjobber, or consumerwho 228.27 purchases from an unlicensed seller more than 20,000 cigarettes 228.28 or$500$1,400 or more worth of tobacco products is guilty of a 228.29 felony. 228.30 [EFFECTIVE DATE.] This section is effective for acts 228.31 committed on or after July 1, 2003. 228.32 Sec. 12. Minnesota Statutes 2002, section 297I.01, 228.33 subdivision 9, is amended to read: 228.34 Subd. 9. [GROSS PREMIUMS.] "Gross premiums" means total 228.35 premiums paid by policyholders and applicants of policies, 228.36 whether received in the form of money or other valuable 229.1 consideration, on property, persons, lives, interests and other 229.2 risks located, resident, or to be performed in this state, but 229.3 excluding consideration and premiums for reinsurance assumed 229.4 from other insurance companies. The term "gross premiums" 229.5 includes the total consideration paid to bail bond agents for 229.6 bail bonds. For title insurance companies, "gross premiums" 229.7 means the charge for title insurance made by a title insurance 229.8 company or its agents according to the company's rate filing 229.9 approved by the commissioner of commerce without a deduction for 229.10 commissions paid to or retained by the agent. Gross premiums of 229.11 a title insurance company does not include any other charge or 229.12 fee for abstracting, searching, or examining the title, or 229.13 escrow, closing, or other related services. The term "gross 229.14 premiums" includes any workers' compensation special 229.15 compensation fund premium surcharge pursuant to section 176.129. 229.16 [EFFECTIVE DATE.] This section is effective the day 229.17 following final enactment. 229.18 Sec. 13. Minnesota Statutes 2002, section 297I.20, is 229.19 amended to read: 229.20 297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSETOFFSETS 229.21 AGAINST PREMIUM TAXES.] 229.22 Subdivision 1. [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.] 229.23 (a) An insurance company may offset against its premium tax 229.24 liability to this state any amount paid for assessments made for 229.25 insolvencies which occur after July 31, 1994, under sections 229.26 60C.01 to 60C.22; and any amount paid for assessments made after 229.27 July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 229.28 61B.16, or under sections 61B.18 to 61B.32 as follows: 229.29 (1) Each such assessment shall give rise to an amount of 229.30 offset equal to 20 percent of the amount of the assessment for 229.31 each of the five calendar years following the year in which the 229.32 assessment was paid. 229.33 (2) The amount of offset initially determined for each 229.34 taxable year is the sum of the amounts determined under clause 229.35 (1) for that taxable year. 229.36 (b)(1) Each year the commissioner shall compare total 230.1 guaranty association assessments levied over the preceding five 230.2 calendar years to the sum of all premium tax and corporate 230.3 franchise tax revenues collected from insurance companies, 230.4 without reduction for any guaranty association assessment offset 230.5 in the preceding calendar year, referred to in this subdivision 230.6 as "preceding year insurance tax revenues." 230.7 (2) If total guaranty association assessments levied over 230.8 the preceding five years exceed the preceding year insurance tax 230.9 revenues, insurance companies must be allowed only a 230.10 proportionate part of the premium tax offset calculated under 230.11 paragraph (a) for the current calendar year. 230.12 (3) The proportionate part of the premium tax offset 230.13 allowed in the current calendar year is determined by 230.14 multiplying the amount calculated under paragraph (a) by a 230.15 fraction. The numerator of the fraction equals the preceding 230.16 year insurance tax revenues, and its denominator equals total 230.17 guaranty association assessments levied over the preceding 230.18 five-year period. 230.19 (4) The proportionate part of the premium tax offset that 230.20 is not allowed must be carried forward to subsequent tax years 230.21 and added to the amount of premium tax offset calculated under 230.22 paragraph (a) prior to application of the limitation imposed by 230.23 this paragraph. 230.24 (5) Any amount carried forward from prior years must be 230.25 allowed before allowance of the offset for the current year 230.26 calculated under paragraph (a). 230.27 (6) The premium tax offset limitation must be calculated 230.28 separately for (i) insurance companies subject to assessment 230.29 under sections 60C.01 to 60C.22, and (ii) insurance companies 230.30 subject to assessment under Minnesota Statutes 1992, sections 230.31 61B.01 to 61B.16, or 61B.18 to 61B.32. 230.32 (7) When the premium tax offset is limited by this 230.33 provision, the commissioner shall notify affected insurance 230.34 companies on a timely basis for purposes of completing premium 230.35 and corporate franchise tax returns. 230.36 (8) The guaranty associations created under sections 60C.01 231.1 to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 231.2 and 61B.18 to 61B.32, shall provide the commissioner with the 231.3 necessary information on guaranty association assessments. 231.4 (c)(1) If the offset determined by the application of 231.5 paragraphs (a) and (b) exceeds the insurance company's premium 231.6 tax liability under this section prior to allowance of the 231.7 credit for premium taxes, then the insurance company may carry 231.8 forward the excess, referred to in this subdivision as the 231.9 "carryforward credit" to subsequent taxable years. 231.10 (2) The carryforward credit is allowed as an offset against 231.11 premium tax liability for the first succeeding year to the 231.12 extent that the premium tax liability for that year exceeds the 231.13 amount of the allowable offset for the year determined under 231.14 paragraphs (a) and (b). 231.15 (3) The carryforward credit must be reduced, but not below 231.16 zero, by the amount of the carryforward credit allowed as an 231.17 offset against the premium tax under this paragraph. The 231.18 remainder, if any, of the carryforward credit must be carried 231.19 forward to succeeding taxable years until the entire 231.20 carryforward credit has been credited against the insurance 231.21 company's liability for premium tax under this chapter if 231.22 applicable for that taxable year. 231.23 (d) When an insurer has offset against taxes its payment of 231.24 an assessment of the Minnesota life and health guaranty 231.25 association, and the association pays the insurer a refund with 231.26 respect to the assessment under Minnesota Statutes 1992, section 231.27 61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 231.28 reduces the insurer's carryforward credit under paragraph (c). 231.29 If the refund exceeds the amount of the carryforward credit, the 231.30 excess amount must be repaid to the state by the insurers to the 231.31 extent of the offset in the manner the commissioner requires. 231.32 Subd. 2. [JOINT UNDERWRITING ASSOCIATION OFFSET.] An 231.33 assessment made pursuant to section 62I.06, subdivision 6, shall 231.34 be deductible by the member from past or future premium taxes 231.35 due the state. 231.36 [EFFECTIVE DATE.] This section is effective the day 232.1 following final enactment. 232.2 Sec. 14. [REVISOR'S INSTRUCTION.] 232.3 In the next edition of Minnesota Rules, the revisor shall 232.4 delete any references to the sections repealed in section 15, 232.5 paragraph (a). 232.6 Sec. 15. [REPEALER.] 232.7 (a) Minnesota Statutes 2002, sections 294.01; 294.02; 232.8 294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 232.9 and 294.12, are repealed effective the day following final 232.10 enactment. 232.11 (b) Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1; 232.12 and 8125.1400, are repealed effective the day following final 232.13 enactment. 232.14 ARTICLE 11 232.15 DEPARTMENT COLLECTIONS AND COMPLIANCE INITIATIVES 232.16 Section 1. [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS 232.17 AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 232.18 Subdivision 1. [DEFINITIONS.] (a) "Recording office" means 232.19 a county recorder, registrar of titles, or secretary of state in 232.20 this state or another state. 232.21 (b) "Filing party" means the person or persons requesting 232.22 or causing another person to request that the recording office 232.23 accept documents or instruments for recording or filing. 232.24 Subd. 2. [INVALID DOCUMENTS NAMING THE COMMISSIONER OR 232.25 DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a 232.26 nonconsensual common law lien under section 514.99, that 232.27 purports to create a claim against the commissioner of revenue 232.28 or an employee of the department of revenue based on performance 232.29 or nonperformance of duties by the commissioner or employee is 232.30 invalid unless accompanied by a specific order from a court of 232.31 competent jurisdiction authorizing the filing of the document or 232.32 unless a specific statute authorizes the filing of the document. 232.33 Subd. 3. [CIVIL PENALTY.] If a filing party causes a 232.34 document described in subdivision 2 to be recorded in a 232.35 recording office, the commissioner may assess a penalty against 232.36 the filing party of $1,000 per document filed, payable to the 233.1 general fund. An order assessing a penalty under this section 233.2 is reviewable administratively under section 289A.65 and is 233.3 appealable to tax court under chapter 271. The penalty is 233.4 collected and paid in the same manner as income tax. The 233.5 penalty is in addition to any other remedy available to the 233.6 commissioner of revenue or to an employee of the department of 233.7 revenue against whom the document has been filed. 233.8 [EFFECTIVE DATE.] This section is effective for documents 233.9 filed on or after July 1, 2003. 233.10 Sec. 2. Minnesota Statutes 2002, section 270.69, is 233.11 amended by adding a subdivision to read: 233.12 Subd. 16. [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 233.13 imposed under this section attaches to the proceeds of property 233.14 with the same priority that the lien has with respect to the 233.15 property itself. "Proceeds of property" means proceeds from the 233.16 sale, lease, license, exchange, or other disposition of the 233.17 property, including insurance proceeds arising from the loss or 233.18 destruction of the property. 233.19 [EFFECTIVE DATE.] This section is effective for all liens, 233.20 whether imposed prior to, on, or after the day following final 233.21 enactment. 233.22 Sec. 3. Minnesota Statutes 2002, section 270.701, 233.23 subdivision 2, is amended to read: 233.24 Subd. 2. [NOTICE OF SALE.] The commissioner shall as soon 233.25 as practicable after the seizure of the property give notice of 233.26 sale of the property to the owner, in the manner of service 233.27 prescribed in subdivision 1. In the case of personal property, 233.28 the notice shall be served at least 10 days prior to the sale. 233.29 In the case of real property, the notice shall be served at 233.30 least four weeks prior to the sale. The commissioner shall also 233.31 cause public notice of each sale to be made. In the case of 233.32 personal property, notice shall be posted at least 10 days prior 233.33 to the sale at the county courthouse for the county where the 233.34 seizure is made, and in not less than two other public 233.35 places. For purposes of this requirement, the Internet is a 233.36 public place for posting the information. In the case of real 234.1 property, six weeks' published notice shall be given prior to 234.2 the sale, in a newspaper published or generally circulated in 234.3 the county. The notice of sale provided in this subdivision 234.4 shall specify the property to be sold, and the time, place, 234.5 manner and conditions of the sale. Whenever levy is made 234.6 without regard to the 30-day period provided in section 270.70, 234.7 subdivision 2, public notice of sale of the property seized 234.8 shall not be made within the 30-day period unless section 234.9 270.702 (relating to sale of perishable goods) is applicable. 234.10 [EFFECTIVE DATE.] This section is effective for notices of 234.11 sales posted on or after the day following final enactment. 234.12 Sec. 4. Minnesota Statutes 2002, section 270.701, is 234.13 amended by adding a subdivision to read: 234.14 Subd. 7. [SALE OF SEIZED SECURITIES.] (a) At the time of 234.15 levy on securities, the commissioner shall provide notice to the 234.16 taxpayer that the securities may be sold after ten days from the 234.17 date of seizure. 234.18 (b) If the commissioner levies upon nonexempt publicly 234.19 traded securities and the value of the securities is less than 234.20 or equal to the total obligation for which the levy is done, 234.21 after ten days the person who possesses or controls the 234.22 securities shall liquidate the securities in a commercially 234.23 reasonable manner. After liquidation, the person shall transfer 234.24 the proceeds to the commissioner, less any applicable 234.25 commissions or fees, or both, which are charged in the normal 234.26 course of business. 234.27 (c) If the commissioner levies upon nonexempt publicly 234.28 traded securities and the value of the securities exceeds the 234.29 total amount of the levy, the owner of the securities may, 234.30 within seven days after receipt of the department's notice of 234.31 levy given pursuant to subdivision 1, instruct the person who 234.32 possesses or controls the securities which securities are to be 234.33 sold to satisfy the obligation. If the owner does not provide 234.34 instructions for liquidation, the person who possesses or 234.35 controls the securities shall liquidate the securities in an 234.36 amount sufficient to pay the obligation, plus any applicable 235.1 commissions or fees, or both, which are charged in the normal 235.2 course of business, beginning with the nonexempt securities 235.3 purchased most recently. After liquidation, the person who 235.4 possesses or controls the securities shall transfer to the 235.5 commissioner the amount of money needed to satisfy the levy. 235.6 [EFFECTIVE DATE.] This section is effective for sales of 235.7 securities seized on or after the day following final enactment. 235.8 Sec. 5. Minnesota Statutes 2002, section 270.72, 235.9 subdivision 2, is amended to read: 235.10 Subd. 2. [DEFINITIONS.] For purposes of this section, the 235.11 following terms have the meanings given. 235.12 (a) "Taxes"aremean all taxes payable to the commissioner 235.13 including penalties and interest due on the taxes. 235.14 (b) "Delinquent taxes" do not include a tax liability if 235.15 (i) an administrative or court action which contests the amount 235.16 or validity of the liability has been filed or served, (ii) the 235.17 appeal period to contest the tax liability has not expired, or 235.18 (iii) the applicant has entered into a payment agreement and is 235.19 current with the payments. 235.20 (c) "Applicant" means an individual if the license is 235.21 issued to or in the name of an individual or the corporation or 235.22 partnership if the license is issued to or in the name of a 235.23 corporation or partnership. "Applicant" also means an officer 235.24 of a corporation, a member of a partnership, or an individual 235.25 who is liable for delinquent taxes, either for the entity for 235.26 which the license is at issue or for another entity for which 235.27 the liability was incurred, or personally as a licensee. In the 235.28 case of a license transfer, "applicant" also means both the 235.29 transferor and the transferee of the license. "Applicant" also 235.30 means any holder of a license. 235.31 (d) "License"includesmeans any permit, registration, 235.32 certification, or other form of approval authorized by statute 235.33 or rule to be issued by the state or a political subdivision of 235.34 the state as a condition of doing business or conducting a 235.35 trade, profession, or occupation in Minnesota, specifically 235.36 including, but not limited to, a contract for space rental at 236.1 the Minnesota state fair and authorization to operate 236.2 concessions or rides at county and local fairs, festivals, or 236.3 events. 236.4 (e) "Licensing authority" includes the Minnesota state fair 236.5 board and county and local boards or governing bodies. 236.6 [EFFECTIVE DATE.] This section is effective the day 236.7 following final enactment. 236.8 Sec. 6. Minnesota Statutes 2002, section 270A.03, 236.9 subdivision 2, is amended to read: 236.10 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 236.11 state agency, as defined by section 14.02, subdivision 2, the 236.12 regents of the University of Minnesota, any district court of 236.13 the state, any county, any statutory or home rule charter city 236.14 presenting a claim for a municipal hospital or a public library 236.15 or a municipal ambulance service, a hospital district, a private 236.16 nonprofit hospital that leases its building from the county in 236.17 which it is located, any public agency responsible for child 236.18 support enforcement, any public agency responsible for the 236.19 collection of court-ordered restitution, and any public agency 236.20 established by general or special law that is responsible for 236.21 the administration of a low-income housing program, and the 236.22 Minnesota collection enterprise as defined in section 16D.02, 236.23 subdivision 8, for the purpose of collecting the costs imposed 236.24 under section 16D.11. 236.25 [EFFECTIVE DATE.] This section is effective the day 236.26 following final enactment. 236.27 Sec. 7. Minnesota Statutes 2002, section 289A.31, 236.28 subdivision 3, is amended to read: 236.29 Subd. 3. [TRANSFEREES AND FIDUCIARIES.] The amounts of the 236.30 following liabilities are, except as otherwise provided in 236.31 section 289A.38, subdivision 13, assessed, collected, and paid 236.32 in the same manner and subject to the same provisions and 236.33 limitations as a deficiency in a tax imposed by chapter 290, 236.34 including any provisions of law for the collection of taxes: 236.35 (1) the liability, at law or in equity, of a transferee of 236.36 property of a taxpayer for tax or overpayment of a refund, 237.1 including interest, additional amounts, and additions to the tax 237.2 or overpayment provided by law, imposed upon the taxpayer by 237.3 chapter 290 or provided for in chapter 290A; and 237.4 (2) the liability of a fiduciary under subdivision 4 for 237.5 the payment of tax from the estate of the taxpayer. The 237.6 liability may reflect the amount of tax shown on the return or 237.7 any deficiency in tax. 237.8 [EFFECTIVE DATE.] This section is effective for refunds 237.9 paid on or after the day following final enactment. 237.10 Sec. 8. Minnesota Statutes 2002, section 289A.31, 237.11 subdivision 4, is amended to read: 237.12 Subd. 4. [TAX AS A PERSONAL DEBT OF A FIDUCIARY.]TheA 237.13 tax imposed by chapter 290 and an overpayment of a refund 237.14 provided for in chapter 290A, and interest and penalties, is a 237.15 personal debt of the taxpayer from the time the liability 237.16 arises, regardless of when the time for discharging the 237.17 liability by payment occurs. The debt is, in the case of the 237.18 personal representative of the estate of a decedent and in the 237.19 case of any fiduciary, that of the individual in the 237.20 individual's official or fiduciary capacity only, unless the 237.21 individual has voluntarily distributed the assets held in that 237.22 capacity without reserving sufficient assets to pay the tax, 237.23 interest, and penalties, in which event the individual is 237.24 personally liable for the deficiency. 237.25 [EFFECTIVE DATE.] This section is effective for taxes 237.26 imposed and property tax refunds claimed on or after the day 237.27 following final enactment. 237.28 Sec. 9. Minnesota Statutes 2002, section 289A.36, 237.29 subdivision 7, is amended to read: 237.30 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 237.31 SUBPOENA.] (a) Disobedience of subpoenas issued under this 237.32 section shall be punished by the district court of the district 237.33 in which the party served with the subpoena is located, in the 237.34 same manner as contempt of the district court. 237.35 (b) Disobedience of a subpoena issued under subdivision 9 237.36 shall be punished by the district court for Ramsey county in the 238.1 same manner as contempt of the district court. In addition to 238.2 contempt remedies, the court may issue any order the court deems 238.3 reasonably necessary to enforce compliance with the subpoena. 238.4 [EFFECTIVE DATE.] This section is effective the day 238.5 following final enactment. 238.6 Sec. 10. Minnesota Statutes 2002, section 289A.36, is 238.7 amended by adding a subdivision to read: 238.8 Subd. 9. [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 238.9 OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 238.10 determine whether a business located outside the state of 238.11 Minnesota is required to file a return under this chapter, the 238.12 commissioner may examine the relevant records and files of the 238.13 business. 238.14 (b) To the full extent permitted by the Minnesota and 238.15 United States constitutions, the commissioner may compel 238.16 production of those relevant records and files by subpoena. The 238.17 subpoena may be served on the secretary of state along with the 238.18 address to which service of the subpoena is to be sent and a fee 238.19 of $50. The secretary of state shall forward a copy of the 238.20 subpoena to the business using the procedures for service of 238.21 process in section 5.25, subdivision 6. 238.22 (c) The commissioner shall pay the reasonable cost of 238.23 producing records subject to subpoena under this subdivision if: 238.24 (1) the subpoenaed party cannot produce the records without 238.25 undue burden; and 238.26 (2) the examination made pursuant to paragraph (a) shows 238.27 that the subpoenaed party is not required to file a return under 238.28 this chapter. 238.29 [EFFECTIVE DATE.] This section is effective the day 238.30 following final enactment. 238.31 Sec. 11. Minnesota Statutes 2002, section 289A.36, is 238.32 amended by adding a subdivision to read: 238.33 Subd. 10. [PENALTY.] In addition to sanctions imposed 238.34 under subdivision 7, a penalty of $250 per day is imposed on any 238.35 business that is in violation of a court order to comply with a 238.36 subpoena that is seeking information necessary for the 239.1 commissioner to be able to determine whether the business is 239.2 required to file a return or pay a tax. The maximum penalty is 239.3 $25,000. Upon the request of the commissioner, the court shall 239.4 determine the amount of the penalty and enter it as a judgment 239.5 in favor of the commissioner. The penalty is not payable until 239.6 the judgment is entered. 239.7 [EFFECTIVE DATE.] This section is effective for violations 239.8 of court orders to enforce subpoenas issued on or after the day 239.9 following final enactment. 239.10 Sec. 12. Minnesota Statutes 2002, section 297A.85, is 239.11 amended to read: 239.12 297A.85 [CANCELLATION OF PERMITS.] 239.13 The commissioner may cancel a permit if one of the 239.14 following conditions occurs: 239.15 (1) the permit holder has not filed a sales or use tax 239.16 return for at least one year; 239.17 (2) the permit holder has not reported any sales or use tax 239.18 liability on the permit holder's returns for at least two years; 239.19or239.20 (3) the permit holder requests cancellation of the permit; 239.21 or 239.22 (4) the permit is subject to cancellation pursuant to 239.23 section 297A.86, subdivision 2, paragraph (a). 239.24 [EFFECTIVE DATE.] This section is effective for 239.25 cancellations of permits done on or after the day following 239.26 final enactment. 239.27 Sec. 13. [REPEALER.] 239.28 Minnesota Statutes 2002, section 270.691, subdivision 8, is 239.29 repealed effective the day following final enactment. 239.30 ARTICLE 12 239.31 MISCELLANEOUS 239.32 Section 1. Minnesota Statutes 2002, section 256.969, is 239.33 amended by adding a subdivision to read: 239.34 Subd. 9c. [COUNTY BILLING.] (a) Minnesota hospitals 239.35 located in the metropolitan area defined in section 473.121, 239.36 subdivision 2, that have a disproportionate population 240.1 adjustment greater than ten percent are eligible for a special 240.2 payment for uncompensated care. These hospitals may bill a 240.3 county for services provided to a resident of that county 240.4 provided that: 240.5 (1) the patient is a resident of a county other than the 240.6 county in which the hospital is located. For purposes of this 240.7 section, residence is defined in section 256G.02, subdivision 8; 240.8 and 240.9 (2) the patient was uninsured at the time of service and 240.10 has an income below 250 percent of the federal poverty 240.11 guidelines. 240.12 (b) Counties that are billed under this subdivision must 240.13 pay eligible hospitals at a rate equal to the cost of the care 240.14 provided. The cost of care shall be established using the 240.15 hospital's stated charges, adjusted to cost using the 240.16 cost-to-charge ratio established by the state. For purposes of 240.17 prompt payment, section 471.425, subdivisions 2 and 4, shall 240.18 apply. In the event of nonpayment, the hospital shall have a 240.19 cause of action against the county and shall be entitled to 240.20 collection expenses incurred, including attorney fees. 240.21 (c) The county of residence shall be the payer of last 240.22 resort. If third-party payments are received by a participating 240.23 hospital for services rendered after payment has been made by 240.24 the county of residence, the participating hospital shall 240.25 reimburse the county of residence for payments made to the 240.26 hospital for covered services, at the rates originally paid by 240.27 the county of residence. 240.28 Sec. 2. Minnesota Statutes 2002, section 270.60, 240.29 subdivision 4, is amended to read: 240.30 Subd. 4. [PAYMENTS TO COUNTIES.] (a) The commissioner 240.31 shall pay to a county in which an Indian gaming casino is 240.32 located: 240.33 (1) ten percent of the state share of all taxes generated 240.34 from activities on reservations and collected under a tax 240.35 agreement under this section with the tribal government for the 240.36 reservation located in the county; or 241.1 (2) five percent of excise taxes collected by the state 241.2 that are determined by the department of revenue to have been 241.3 generated from activities on a reservation located in the 241.4 county, the tribal government of which has not entered into a 241.5 tax agreement under this section. 241.6 If the tribe has casinos located in more than one county, 241.7 the payment must be divided equally among the counties in which 241.8 the casinos are located. 241.9 (b) The commissioner shall make the payments required under 241.10 this subdivision by February 28 of the year following the year 241.11 the taxes are collected. 241.12 (c) An amount sufficient to make the payments authorized by 241.13 this subdivision is annually appropriated from the general fund 241.14 to the commissioner. 241.15 [EFFECTIVE DATE.] This section is effective for taxes 241.16 collected after June 30, 2003. 241.17 Sec. 3. [280A.01] [DEFINITIONS.] 241.18 Subdivision 1. [APPLICATION.] For purposes of this 241.19 chapter, the following terms have the meanings given. 241.20 Subd. 2. [FACE AMOUNT.] The "face amount of the tax lien" 241.21 or "face amount" means the sum of the following amounts: 241.22 (1) the unpaid real property taxes and assessments; 241.23 (2) penalties; 241.24 (3) fees and costs, including the allocable costs of any 241.25 publications made and notices given by the joint powers agency 241.26 under section 280A.04, subdivision 2; and 241.27 (4) interest accrued on amounts listed in clauses (1) to 241.28 (3) at the applicable statutory rate through the date of sale of 241.29 the tax lien. 241.30 Subd. 3. [TAXING AUTHORITY.] "Taxing authority" is a 241.31 county or joint powers agency with a population of 500,000 or 241.32 more. 241.33 Subd. 4. [TREASURER.] "Treasurer" means the county 241.34 treasurer or the equivalent officer of another taxing authority 241.35 or a designee of the treasurer or other officer. 241.36 [EFFECTIVE DATE.] This section is effective the day 242.1 following final enactment and expires on June 30, 2005. 242.2 Sec. 4. [280A.02] [AUTHORITY TO SELL TAX LIENS.] 242.3 Subdivision 1. [GENERAL AUTHORITY.] (a) As provided in 242.4 this chapter, a taxing authority may sell its allocable portion 242.5 of tax liens securing delinquent real property taxes and 242.6 assessments or other charges that are made a lien on real 242.7 property for the benefit of the taxing authority. The allocable 242.8 portion of a tax lien is for all purposes itself a "tax lien" 242.9 for purposes of this chapter. A taxing authority may not sell 242.10 any tax lien for which the taxes secured by the tax lien are 242.11 subject to a proceeding under chapter 278 that has not been 242.12 dismissed or otherwise terminated. 242.13 Subd. 2. [COUNTY ACTION; EFFECT.] A county may sell the 242.14 tax liens of all of the taxing authorities having a tax lien on 242.15 a property. In such case, whenever this chapter requires or 242.16 permits a taxing authority to take action, the taking of that 242.17 action by the county is deemed to be the taking of that action 242.18 by and on behalf of each of the participating taxing authorities. 242.19 Subd. 3. [AMOUNT OF LIEN; PARTIAL PAYMENTS.] (a) The 242.20 amount of a tax lien sold under this chapter equals the face 242.21 amount of the tax lien. 242.22 (b) Any partial payments received on a tax lien are applied 242.23 first to accrued interest and then to the face amount of the tax 242.24 lien. 242.25 Subd. 4. [NOT A BORROWING.] A sale of a tax lien or tax 242.26 liens by a taxing authority under this chapter is a sale and is 242.27 not a borrowing by the taxing authority. 242.28 [EFFECTIVE DATE.] This section is effective the day 242.29 following final enactment and expires on June 30, 2005. 242.30 Sec. 5. [280A.03] [PROCEDURES FOR SALE OF TAX LIENS.] 242.31 Subdivision 1. [SALE TO JOINT POWER AGENCY.] A taxing 242.32 authority may, from time to time, sell all or a portion of its 242.33 then delinquent tax liens through a negotiated sale under the 242.34 procedures provided in this chapter to a joint powers agency 242.35 organized by two or more counties under section 471.59. A 242.36 taxing authority selling tax liens to a joint powers agency need 243.1 not be a member of the joint powers agency. A joint powers 243.2 agency formed to purchase and sell tax liens under this chapter 243.3 is deemed to be exercising common powers of its member counties 243.4 for purposes of section 471.59. 243.5 Subd. 2. [TERMS OF AGREEMENT.] A taxing authority may 243.6 enter into a purchase and sale agreement with a joint powers 243.7 agency for the sale of tax liens by the taxing authority to the 243.8 joint powers agency. The taxing authority may include in the 243.9 agreement the terms, provisions, conditions, representations, 243.10 and warranties that it determines are necessary or desirable and 243.11 are consistent with the provisions of this chapter. The 243.12 agreement must specify the purchase price of the tax liens to be 243.13 paid to the taxing authority and any other amounts that may be 243.14 made available to the taxing authority on a contingent basis 243.15 under the terms of the agreement. The purchase price may be 243.16 more or less than the face amount of the tax liens purchased by 243.17 the joint powers agency. 243.18 Subd. 3. [NOTICE OF SALE.] Ninety days before a taxing 243.19 authority sells a tax lien to a joint powers agency, the taxing 243.20 authority shall notify all owners of record of the property that 243.21 is subject to the lien, that the authority intends to sell the 243.22 lien. The notice must advise the property owner the amount of 243.23 the taxes, penalties, interest, and any other amounts owed on 243.24 the tax lien; how the property owner can pay the delinquent 243.25 taxes to the taxing authority; that the taxing authority intends 243.26 to sell the lien; the consequences to the property owner if the 243.27 lien is sold; and a statement of the rights, obligations, and 243.28 remedies of the property owner. 243.29 [EFFECTIVE DATE.] This section is effective the day 243.30 following final enactment and expires on June 30, 2005. 243.31 Sec. 6. [280A.04] [SALES OF TAX LIENS BY JOINT POWERS 243.32 AGENCY.] 243.33 Subdivision 1. [BULK SALE.] A joint powers agency 243.34 organized for the purposes of this chapter may sell tax liens in 243.35 bulk through a negotiated sale under the procedures provided in 243.36 this section. The joint powers agency shall establish the terms 244.1 and conditions of a sale of tax liens. No provision of law that 244.2 requires competitive bidding relating to the letting of 244.3 government contracts applies to the sale of tax liens by a joint 244.4 powers agency. 244.5 Subd. 2. [NOTICE OF SALE.] The joint powers agency shall 244.6 publish a notice of its intention to sell a tax lien or tax 244.7 liens through a negotiated sale. The notice must advise that a 244.8 request for statements of interest is available at the office of 244.9 the joint powers agency, and may require the submission of any 244.10 information or documents that the joint powers agency deems 244.11 appropriate. The notice must identify separately the tax liens 244.12 intended to be sold, the number and aggregate amount of the tax 244.13 liens and state that a copy of a list of the tax liens may be 244.14 obtained from the office of the joint powers agency upon 244.15 request. The notice must be published in a newspaper of general 244.16 circulation in the taxing authority not less than 30 days prior 244.17 to the date designated by the joint powers agency for the 244.18 receipt of statements of interest. 244.19 Subd. 3. [AWARD OF SALE.] Notwithstanding any other law to 244.20 the contrary, in order to determine whether or not to award a 244.21 sale of tax liens and to determine to whom to award a sale of 244.22 tax liens, the joint powers agency may consider all factors that 244.23 the governing body of the joint powers agency deems relevant to 244.24 the best interests of the taxing authorities from which the tax 244.25 liens are to be purchased, including but not limited to the 244.26 price at which the tax liens are offered to be purchased, as 244.27 well as the terms and conditions of the purchase and sale 244.28 agreements proposed by the prospective purchasers. The joint 244.29 powers agency may negotiate with one or more prospective 244.30 purchasers to determine the terms and conditions under which tax 244.31 liens are proposed to be purchased. 244.32 Subd. 4. [TERMS OF AGREEMENT.] The joint powers agency may 244.33 enter into one or more purchase and sale agreements for the sale 244.34 of tax liens by the joint powers agency. The agency may include 244.35 in the agreements the terms, provisions, conditions, 244.36 representations, and warranties it determines are necessary or 245.1 desirable and are consistent with the provisions of this 245.2 chapter. Each agreement must specify the purchase price to be 245.3 paid to the joint powers agency and any other amounts that may 245.4 be made available to the joint powers agency on a contingent 245.5 basis under the terms of the agreement. The purchase price may 245.6 be more or less than the face amount of the tax liens purchased 245.7 by the tax lien purchaser and may include noncash 245.8 consideration. In connection with the sale of the tax liens 245.9 under the agreement, the joint powers agency may assign to the 245.10 tax lien purchaser all of its right, title, and interest in and 245.11 to the purchase and sale agreement or agreements between the 245.12 joint powers agency and the counties from which the tax liens 245.13 were purchased by the joint powers agency. 245.14 Subd. 5. [AUTHORITY TO CANCEL.] The joint powers agency 245.15 may postpone or cancel any proposed sale of tax liens for which 245.16 notice has been published. The joint powers agency is not 245.17 liable for any damages as a result of cancellation or 245.18 postponement of a proposed sale of tax liens, nor does any cause 245.19 of action arise from a cancellation or postponement. 245.20 [EFFECTIVE DATE.] This section is effective the day 245.21 following final enactment and expires on June 30, 2005. 245.22 Sec. 7. [280A.05] [TAX LIEN CERTIFICATES.] 245.23 Subdivision 1. [OPERATION.] (a) Upon the sale by a taxing 245.24 authority of a tax lien to a joint powers agency, the county 245.25 auditor or the treasurer shall deliver to the joint powers 245.26 agency a tax lien certificate evidencing the sale and the 245.27 transfer of the tax lien by the taxing authority to the joint 245.28 powers agency. 245.29 (b) A tax lien certificate operates to transfer and assign 245.30 the tax lien upon the property described in the certificate for: 245.31 (1) the unpaid real property taxes and assessments; 245.32 (2) other fees and costs, including the costs of any 245.33 publications made and notices given under section 280A.04, 245.34 subdivision 2; 245.35 (3) all interest and penalties accrued on the tax lien 245.36 through the date of sale; and 246.1 (4) accrued interest on all unpaid amounts from the date of 246.2 sale to the date of payment. 246.3 (c) The county auditor or treasurer shall keep a record of 246.4 all tax liens transferred as provided by this section. 246.5 Subd. 2. [CONTENTS.] (a) A tax lien certificate must 246.6 contain: 246.7 (1) a transfer and assignment by the taxing authority of 246.8 the tax lien sold to the joint powers agency; 246.9 (2) the date of the sale; 246.10 (3) the aggregate amount of the tax lien transferred and 246.11 the items of unpaid real property taxes and assessments and 246.12 other charges; 246.13 (4) the costs of any publications made and notices given 246.14 under this chapter; 246.15 (5) all interest and penalties accrued on the tax lien 246.16 through the date of sale comprising the tax lien; 246.17 (6) a statement that the tax lien certificate will bear 246.18 interest at the rate specified in section 279.03, subdivision 246.19 1a; and 246.20 (7) a description of the property by block and lot or by 246.21 such other identification sufficient to identify the property 246.22 subject to the tax lien. 246.23 (b) The treasurer shall, by manual or facsimile signature: 246.24 (1) execute a tax lien certificate; and 246.25 (2) acknowledge the certificate in the manner in which a 246.26 deed must be acknowledged to be recorded. 246.27 (c) A tax lien certificate may evidence the transfer of 246.28 more than one tax lien on more than one property. 246.29 [EFFECTIVE DATE.] This section is effective the day 246.30 following final enactment and expires on June 30, 2005. 246.31 Sec. 8. [280A.06] [LOST TAX LIEN CERTIFICATE.] 246.32 If any tax lien certificate is lost, the treasurer may, 246.33 upon satisfactory proof of the loss, direct the execution and 246.34 delivery of a duplicate certificate to the person or persons who 246.35 appear entitled to the certificate. The treasurer may require a 246.36 bond of indemnity to the taxing authority as a condition of 247.1 executing a duplicate certificate. 247.2 [EFFECTIVE DATE.] This section is effective the day 247.3 following final enactment and expires on June 30, 2005. 247.4 Sec. 9. [280A.07] [RECORDING OF TAX LIEN CERTIFICATES.] 247.5 A tax lien certificate and any assignment or discharge of a 247.6 certificate, duly acknowledged, are deemed conveyances within 247.7 the meaning of section 507.01 and may be recorded (in the case 247.8 of unregistered real estate) in the office of the county 247.9 recorder of the county where the property is located or 247.10 registered (in the case of registered real estate) in the office 247.11 of the registrar of titles of the county where the property is 247.12 located under section 508.55. Tax lien certificates and all 247.13 assignments and discharges of certificates must be recorded by 247.14 the county recorder or registered by the registrar of titles in 247.15 the same manner as mortgages and assignments and discharges of 247.16 mortgages. Notwithstanding section 272.12, the county recorder 247.17 or the registrar of titles shall not refuse to receive or record 247.18 a tax lien certificate and any assignment or discharge of a 247.19 certificate because of any outstanding delinquent taxes due on 247.20 the related property. Notwithstanding section 507.34, neither 247.21 the tax lien nor the rights transferred or created by a tax lien 247.22 certificate is impaired by the failure of the county recorder or 247.23 registrar of titles to record or register a tax lien certificate 247.24 made by the county through the treasurer. 247.25 [EFFECTIVE DATE.] This section is effective the day 247.26 following final enactment and expires on June 30, 2005. 247.27 Sec. 10. [280A.08] [RIGHTS OF HOLDER OF TAX LIEN 247.28 CERTIFICATE; DISCHARGE OF TAX LIEN.] 247.29 Subdivision 1. [RIGHTS OF LIENHOLDER.] A holder of a tax 247.30 lien under a tax lien certificate has the right to receive all 247.31 amounts collected by the county or the taxing authority in 247.32 payment of amounts due on the tax lien, including all payments 247.33 of the unpaid real property taxes, assessments, penalties, and 247.34 costs, plus interest accrued on those amounts to the date of 247.35 payment of the tax lien in full. The treasurer of the county in 247.36 which any property encumbered by a tax lien transferred under 248.1 this chapter and recorded as provided in section 280A.07 shall 248.2 pay to the holder of the tax lien certificate or its designee 248.3 designated in writing promptly upon receipt any payments made on 248.4 a tax lien. Any person having a legal or beneficial interest in 248.5 the property affected by a tax lien certificate may satisfy it 248.6 at any time upon payment of the amounts then due, including all 248.7 accrued interest on the lien. Upon satisfaction of the tax 248.8 lien, the holder shall issue to the person that satisfied the 248.9 tax lien a certificate of discharge, certifying that the tax 248.10 lien has been paid or has been otherwise satisfied, in a 248.11 recordable or registrable form approved by the county recorder 248.12 of the county where the property is located. 248.13 Subd. 2. [DISCHARGE OF LIEN.] A tax lien sold under this 248.14 chapter may be discharged by presenting the certificate of 248.15 discharge issued by the holder of the tax lien under subdivision 248.16 1 to the county recorder or registrar of titles of the county 248.17 where the property is located. 248.18 [EFFECTIVE DATE.] This section is effective the day 248.19 following final enactment and expires on June 30, 2005. 248.20 Sec. 11. [280A.09] [EXEMPTION FROM TAXATION.] 248.21 Notwithstanding any other law to the contrary, tax liens 248.22 and tax lien certificates are exempt from taxation by the state 248.23 or any political subdivision of the state, including the 248.24 mortgage registry taxes imposed by chapter 287 but excluding the 248.25 recording fees imposed by chapter 357. This section does not 248.26 exempt the real property affected by any tax lien, or the 248.27 interest paid on the tax lien, from taxation. 248.28 [EFFECTIVE DATE.] This section is effective the day 248.29 following final enactment and expires on June 30, 2005. 248.30 Sec. 12. [280A.10] [FORECLOSURE OF TAX LIENS.] 248.31 (a) If the amount of any tax lien transferred by a tax lien 248.32 certificate is not paid by the later of the date of expiration 248.33 of the applicable redemption period specified in chapter 281 or 248.34 the expiration of a confession of judgment entered into under 248.35 section 279.37, the tax lien may be foreclosed by advertisement 248.36 in the same manner as a mortgage as provided in chapter 580, 249.1 except that the following rules apply: 249.2 (1) the property owner is deemed to be the mortgagor, the 249.3 tax lien certificate holder is deemed to be the mortgagee, and 249.4 the tax lien certificate is deemed to be the mortgage note and 249.5 mortgage; 249.6 (2) the tax lien certificate is deemed to contain a power 249.7 of sale and the failure of the property owner to redeem the tax 249.8 lien is deemed to be a default by which the power of sale has 249.9 become operative; and 249.10 (3) notwithstanding section 582.01 or any other law to the 249.11 contrary, the tax lien certificate holder may recover from the 249.12 proceeds of foreclosure reasonable attorney fees and 249.13 disbursements relating to the foreclosure, together with the 249.14 expenses of the sale. 249.15 (b) In any conflict between this chapter and any other law 249.16 relating to the foreclosure of mortgages, this chapter has 249.17 precedence over the other law. 249.18 [EFFECTIVE DATE.] This section is effective the day 249.19 following final enactment and expires on June 30, 2005. 249.20 Sec. 13. [280A.11] [REDEMPTION.] 249.21 Subdivision 1. [NOTICE OF EXPIRATION OF REDEMPTION 249.22 PERIOD.] The provisions of chapter 281 relating to the 249.23 redemption of tax liens sold under this chapter continue to 249.24 apply to tax liens sold under this chapter. The county auditor 249.25 shall give notice of the expiration of the applicable redemption 249.26 period of any tax lien sold under this chapter in the same 249.27 manner as provided for tax-forfeited property under chapter 281. 249.28 Subd. 2. [LIMITATIONS ON ADVERSE CLAIMS.] No cause of 249.29 action or defense claiming that any tax lien certificate or tax 249.30 lien is invalid may be asserted or maintained upon any claim 249.31 adverse to the holder of the tax lien certificate or the 249.32 holder's successors in interest, including but not limited to 249.33 any claim based upon any failure, omission, error, or defect 249.34 described in section 284.28, subdivision 1, unless the cause of 249.35 action or defense is asserted in an action commenced before the 249.36 expiration of the time for redemption, as provided by section 250.1 281.21, or by any other law hereafter enacted providing for 250.2 notice of expiration of time for redemption and the filing 250.3 thereof. 250.4 [EFFECTIVE DATE.] This section is effective the day 250.5 following final enactment and expires on June 30, 2005. 250.6 Sec. 14. [280A.12] [PRIORITY AND PAYMENT OF TAX LIENS; 250.7 EFFECT OF FORFEITURE TO STATE.] 250.8 Notwithstanding section 280.39 or any other law to the 250.9 contrary, if more than one tax lien is entitled to foreclosure 250.10 under this chapter on a parcel of real property, all the tax 250.11 liens rank on a parity. After the payment of all legal fees and 250.12 costs, allowances, and disbursements relating to the 250.13 foreclosure, the holders of all the tax liens must be paid from 250.14 the proceeds of the sale, so far as the proceeds suffice to pay 250.15 the same, the amounts of their respective tax liens in the ratio 250.16 to which the amount of the tax lien of each holder bears to the 250.17 aggregate of all the amounts. All tax liens foreclosed upon in 250.18 a foreclosure sale have priority over any other lien on the 250.19 property sold in foreclosure regardless as to when the other 250.20 lien became a lien on the property. 250.21 [EFFECTIVE DATE.] This section is effective the day 250.22 following final enactment and expires on June 30, 2005. 250.23 Sec. 15. Minnesota Statutes 2002, section 287.12, is 250.24 amended to read: 250.25 287.12 [TAXES, HOW APPORTIONED.] 250.26 (a) All taxes paid to the county treasurer under the 250.27 provisions of sections 287.01 to 287.12 must be apportioned, 97 250.28 percent to the general fund of the state, and three percent to 250.29 the county revenue fund. 250.30 (b) On or before the 20th day of each month the county 250.31 treasurer shall determine and pay to the commissioner of revenue 250.32 for deposit in the state treasury and credit to the general fund 250.33 the state's portion of the receipts from the mortgage registry 250.34 tax during the preceding month subject to the electronic payment 250.35 requirements of section 270.771. The county treasurer shall 250.36 provide any related reports requested by the commissioner of 251.1 revenue. 251.2 (c) Counties must remit 81 percent of the state's portion 251.3 of the June receipts collected through June 25 and the estimated 251.4 state's portion of the receipts to be collected during the 251.5 remainder of the month to the commissioner of revenue two 251.6 business days before June 30 of each year. The remaining amount 251.7 of the June receipts is due on August 20. 251.8 [EFFECTIVE DATE.] This section is effective January 1, 2004. 251.9 Sec. 16. Minnesota Statutes 2002, section 287.29, 251.10 subdivision 1, is amended to read: 251.11 Subdivision 1. [APPOINTMENT AND PAYMENT OF TAX PROCEEDS.] 251.12 (a) The proceeds of the taxes levied and collected under 251.13 sections 287.21 to 287.39 must be apportioned, 97 percent to the 251.14 general fund of the state, and three percent to the county 251.15 revenue fund. 251.16 (b) On or before the 20th day of each month, the county 251.17 treasurer shall determine and pay to the commissioner of revenue 251.18 for deposit in the state treasury and credit to the general fund 251.19 the state's portion of the receipts for deed tax from the 251.20 preceding month subject to the electronic transfer requirements 251.21 of section 270.771. The county treasurer shall provide any 251.22 related reports requested by the commissioner of revenue. 251.23 (c) Counties must remit 81 percent of the state's portion 251.24 of the June receipts collected through June 25 and the estimated 251.25 state's portion of the receipts to be collected during the 251.26 remainder of the month to the commissioner of revenue two 251.27 business days before June 30 of each year. The remaining amount 251.28 of the June receipts is due on August 20. 251.29 [EFFECTIVE DATE.] This section is effective January 1, 2004. 251.30 Sec. 17. Minnesota Statutes 2002, section 287.31, is 251.31 amended by adding a subdivision to read: 251.32 Subd. 3. [UNDERPAYMENTS OF ACCELERATED PAYMENT OF JUNE TAX 251.33 RECEIPTS.] If a county fails to timely remit the specified 251.34 percentage of the state portion of the actual June tax receipts 251.35 at the time required by section 287.12 or 287.29, the county 251.36 shall pay a penalty equal to ten percent of the state portion of 252.1 actual June receipts less the amount remitted to the 252.2 commissioner of revenue in June. The penalty must not be 252.3 imposed, however, if the amount remitted in June equals either: 252.4 (1) 75 percent of the state's portion of the preceding 252.5 May's receipts; or 252.6 (2) 75 percent of the average monthly amount of the state's 252.7 portion for the previous calendar year. 252.8 [EFFECTIVE DATE.] This section is effective January 1, 2004. 252.9 Sec. 18. Minnesota Statutes 2002, section 297F.08, is 252.10 amended by adding a subdivision to read: 252.11 Subd. 12. [CIGARETTES IN INTERSTATE COMMERCE.] (a) A 252.12 person may not transport or cause to be transported from this 252.13 state cigarettes for sale in another state without first 252.14 affixing to the cigarettes the stamp required by the state in 252.15 which the cigarettes are to be sold or paying any other excise 252.16 tax on the cigarettes imposed by the state in which the 252.17 cigarettes are to be sold. 252.18 (b) A person may not affix to cigarettes the stamp required 252.19 by another state or pay any other excise tax on the cigarettes 252.20 imposed by another state if the other state prohibits stamps 252.21 from being affixed to the cigarettes, prohibits the payment of 252.22 any other excise tax on the cigarettes, or prohibits the sale of 252.23 the cigarettes. 252.24 (c) Not later than 15 days after the end of each calendar 252.25 quarter, a person who transports or causes to be transported 252.26 from this state cigarettes for sale in another state shall 252.27 submit to the commissioner a report identifying the quantity and 252.28 style of each brand of the cigarettes transported or caused to 252.29 be transported in the preceding calendar quarter, and the name 252.30 and address of each recipient of the cigarettes. 252.31 [EFFECTIVE DATE.] This section is effective the day 252.32 following final enactment. 252.33 Sec. 19. Minnesota Statutes 2002, section 297G.01, is 252.34 amended by adding a subdivision to read: 252.35 Subd. 21. [LOW-ALCOHOL DAIRY COCKTAIL.] "Low-alcohol dairy 252.36 cocktail" means a premixed cocktail, or any other product except 253.1 liqueur-filled candy, that: 253.2 (1) consists primarily of milk products; 253.3 (2) contains distilled spirits; 253.4 (3) is drinkable as a beverage or is promoted as an 253.5 alcoholic product; and 253.6 (4) contains less than 3.2 percent alcohol by volume. 253.7 [EFFECTIVE DATE.] This section is effective for sales made 253.8 after June 30, 2003. 253.9 Sec. 20. Minnesota Statutes 2002, section 297G.03, 253.10 subdivision 1, is amended to read: 253.11 Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 253.12 The following excise tax is imposed on all distilled spirits and 253.13 wine manufactured, imported, sold, or possessed in this state: 253.14 Standard Metric 253.15 (a) Distilled spirits, $5.03 per gallon $1.33 per liter 253.16 liqueurs, cordials, 253.17 and specialties regardless 253.18 of alcohol content 253.19 (excluding ethyl alcohol) 253.20 (b) Wine containing $ .30 per gallon $ .08 per liter 253.21 14 percent or less 253.22 alcohol by volume 253.23 (except cider as defined 253.24 in section 297G.01, 253.25 subdivision 3a) 253.26 (c) Wine containing $ .95 per gallon $ .25 per liter 253.27 more than 14 percent 253.28 but not more than 21 253.29 percent alcohol by volume 253.30 (d) Wine containing more $1.82 per gallon $ .48 per liter 253.31 than 21 percent but not 253.32 more than 24 percent 253.33 alcohol by volume 253.34 (e) Wine containing more $3.52 per gallon $ .93 per liter 253.35 than 24 percent alcohol 253.36 by volume 254.1 (f) Natural and $1.82 per gallon $ .48 per liter 254.2 artificial sparkling wines 254.3 containing alcohol 254.4 (g) Cider as defined in $ .15 per gallon $ .04 per liter 254.5 section 297G.01, 254.6 subdivision 3a 254.7 (h) Low alcohol dairy $ .08 per gallon $ .02 per liter 254.8 cocktails 254.9 In computing the tax on a package of distilled spirits or 254.10 wine, a proportional tax at a like rate on all fractional parts 254.11 of a gallon or liter must be paid, except that the tax on a 254.12 fractional part of a gallon less than 1/16 of a gallon is the 254.13 same as for 1/16 of a gallon. 254.14 [EFFECTIVE DATE.] This section is effective for sales made 254.15 after June 30, 2003. 254.16 Sec. 21. Minnesota Statutes 2002, section 473F.08, is 254.17 amended by adding a subdivision to read: 254.18 Subd. 3c. [CHARITY CARE REIMBURSEMENT.] (a) As used in 254.19 this subdivision, the following terms have the meanings given in 254.20 this paragraph. 254.21 (1) "Charity care" means the amount that would have been 254.22 charged by a facility for rendering free or discounted care to 254.23 persons who cannot afford to pay and for which the facility did 254.24 not expect payment. Charity care does not include any amount 254.25 for which a hospital received a payment from a county under 254.26 section 256.969, subdivision 9c. 254.27 (2) A "qualifying hospital" means a hospital in the area 254.28 that is owned or operated by a local unit of government, or 254.29 formerly owned by a university, has a licensed bed capacity 254.30 greater than 400, and provides uncompensated care valued at more 254.31 than 1.8 percent of its gross charges as stated in the 254.32 Healthcare cost information system database, maintained by the 254.33 Minnesota hospital association for the Minnesota department of 254.34 health. 254.35 (b) A county that contains a qualifying hospital that 254.36 provides charity care to residents of the area is eligible for 255.1 reimbursement of the charity care amount that is above the 255.2 statewide average for hospitals for charity care, adjusted to 255.3 cost. By July 15, 2004, and each subsequent year, the county 255.4 shall notify its county auditor, as well as the administrative 255.5 auditor, of the amount of qualifying charity care provided, 255.6 adjusted to cost using the hospital's cost-to-charge ratio, 255.7 during the 12-month period ending on June 30 of the current year. 255.8 (c) The areawide levy of each governmental unit calculated 255.9 in subdivision 3, paragraph (a), must be reduced in an amount 255.10 equal to the reimbursement multiplied by the proportion of the 255.11 areawide levy of each governmental unit to the total areawide 255.12 levy of all governmental units. 255.13 (d) The administrative auditor shall pay one-half of the 255.14 reimbursement to the county auditor of the county that contains 255.15 the qualifying hospital on or before June 15 and the remaining 255.16 one-half of the reimbursement on or before November 15. The 255.17 county auditor receiving the payment shall disburse the 255.18 reimbursement to the qualifying hospital within 15 days of 255.19 receipt of the reimbursement. 255.20 (e) Prior to the reporting specified in paragraph (b) 255.21 above, all qualifying hospitals that participate in this program 255.22 shall agree upon and implement a common standard for reporting 255.23 charity care, and a common standard for determining eligibility 255.24 for charity care for all participating hospitals. 255.25 [EFFECTIVE DATE.] This section is effective for fiscal 255.26 disparities contribution and distribution tax capacities for 255.27 taxes payable in 2005 and subsequent years. 255.28 Sec. 22. [REPEALER.] 255.29 Laws 1984, chapter 652, section 2, is repealed. 255.30 [EFFECTIVE DATE.] This section is effective for Benton 255.31 county the day after the governing body of Benton county and its 255.32 chief clerical officer timely complete their compliance with 255.33 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 255.34 This section is effective for Stearns county the day after 255.35 the governing body of Stearns county and its chief clerical 255.36 officer timely complete their compliance with Minnesota 256.1 Statutes, section 645.021, subdivisions 2 and 3.