STATE OF MINNESOTA
EIGHTY-THIRD SESSION - 2003
_____________________
FIFTY-NINTH DAY
Saint Paul, Minnesota, Monday, May 19, 2003
The House of Representatives convened at 8:00 a.m. and was
called to order by Steve Sviggum, Speaker of the House.
Prayer was offered by the Reverend Lonnie E. Titus, House
Chaplain.
The members of the House gave the pledge of allegiance to the
flag of the United States of America.
The roll was called and the following members were present:
Abeler
Abrams
Adolphson
Anderson, I.
Anderson, J.
Atkins
Beard
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Buesgens
Carlson
Clark
Cornish
Cox
Davids
Davnie
DeLaForest
Demmer
Dempsey
Dill
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Erickson
Finstad
Fuller
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Kahn
Kelliher
Kielkucki
Klinzing
Knoblach
Koenen
Kohls
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Lipman
Magnus
Mahoney
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Nornes
Olsen, S.
Opatz
Osterman
Otremba
Otto
Paulsen
Paymar
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Tingelstad
Urdahl
Vandeveer
Wagenius
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
A quorum was present.
Bernardy was excused until 8:25 a.m. Juhnke and Thissen were excused until 8:35 a.m. Slawik was excused until 8:45 a.m. Olson, M., was excused until 9:00 a.m. Krinkie was excused until 9:25 a.m. Ozment was excused until 10:15 a.m. Mariani and Walker were excused until 10:40
a.m. Anderson, B., was excused until
3:45 p.m. Dorman was excused until 7:00
p.m.
The Chief Clerk proceeded to read the Journal of the
preceding day. Heidgerken moved that
further reading of the Journal be suspended and that the Journal be approved as
corrected by the Chief Clerk. The
motion prevailed.
REPORTS OF CHIEF CLERK
S. F. No. 343 and H. F. No. 134,
which had been referred to the Chief Clerk for comparison, were examined and
found to be identical with certain exceptions.
SUSPENSION
OF RULES
Sertich moved that the rules be so far suspended that
S. F. No. 343 be substituted for H. F. No. 134
and that the House File be indefinitely postponed. The motion prevailed.
S. F. No. 805 and H. F. No. 1396,
which had been referred to the Chief Clerk for comparison, were examined and
found to be identical with certain exceptions.
SUSPENSION
OF RULES
Smith moved that the rules be so far suspended that
S. F. No. 805 be substituted for H. F. No. 1396
and that the House File be indefinitely postponed. The motion prevailed.
S. F. No. 829 and H. F. No. 785,
which had been referred to the Chief Clerk for comparison, were examined and
found to be identical with certain exceptions.
SUSPENSION
OF RULES
Buesgens moved that the rules be so far suspended that
S. F. No. 829 be substituted for H. F. No. 785
and that the House File be indefinitely postponed. The motion prevailed.
SECOND READING OF SENATE BILLS
S. F. Nos. 343, 805 and 829 were read for the second time.
INTRODUCTION AND FIRST READING OF HOUSE BILLS
The following House Files were introduced:
Davids introduced:
H. F. No. 1633, A bill for an act relating to
telecommunications; modifying cable communications laws; making technical and
clarifying revisions; amending Minnesota Statutes 2002, sections 238.02,
subdivision 3; 238.03; 238.08, subdivisions 3, 4; 238.081; 238.083,
subdivisions 2, 4; 238.084, subdivision 1; 238.11, subdivision 2; 238.22,
subdivision 13; 238.23; 238.24, subdivisions 3, 4, 6, 9, 10; 238.242,
subdivisions 1, 3; 238.25, subdivisions 5, 10; 238.35, subdivisions 1, 4;
238.36, subdivision 2; 238.39; 238.40; 238.43, subdivision 1; repealing
Minnesota Statutes 2002, sections 238.01; 238.02, subdivisions 2, 17, 18, 19,
25; 238.082; 238.083, subdivisions 3, 5; 238.084, subdivisions 2, 3, 5; 238.12,
subdivision 1a; 238.15; 238.35, subdivisions 2, 3; 238.36, subdivision 1.
The bill was read for the first time and referred to the
Committee on Commerce, Jobs and Economic Development.
Eken, Peterson and Koenen introduced:
H. F. No. 1634, A bill for an act relating to taxation;
providing exemptions from property, individual income, corporate franchise,
sales, and motor vehicle sales taxation for qualifying family businesses;
amending Minnesota Statutes 2002, sections 272.02, by adding a subdivision;
290.01, subdivision 19b; 290.05, subdivision 1; 290.06, subdivision 2c;
290.067, subdivision 1; 290.0671, subdivision 1; 290.091, subdivision 2;
290.0922, subdivision 2; 297A.68, by adding a subdivision; 297B.03; proposing
coding for new law in Minnesota Statutes, chapters 116J; 477A.08.
The bill was read for the first time and referred to the
Committee on Taxes.
Thissen and Larson introduced:
H. F. No. 1635, A bill for an act relating to metropolitan
airports commission; requiring the commission to complete its 1996 sound
insulation program; amending Minnesota Statutes 2002, section 473.661, by
adding a subdivision.
The bill was read for the first time and referred to the
Committee on Governmental Operations and Veterans Affairs Policy.
Heidgerken; Marquart; Urdahl; Magnus; Blaine; Lieder; Eken;
Atkins; Nelson, M.; Swenson; Finstad and Lindgren introduced:
H. F. No. 1636, A bill for an act relating to taxes; providing
a credit for a taxpayer that installs equipment to dispense E85 motor vehicle
fuel at retail; amending Minnesota Statutes 2002, section 290.06, by adding a
subdivision.
The bill was read for the first time and referred to the
Committee on Taxes.
Kielkucki, Sviggum, Holberg, Smith, Knoblach, Buesgens, Walz,
Cornish, Kohls, Stang, Soderstrom, Penas, Pelowski, Heidgerken, Koenen, Blaine,
Kuisle, Vandeveer, Dill, Murphy, Howes, Eastlund, Lindgren, Beard, Bradley,
Borrell, Brod, Urdahl, DeLaForest, Boudreau, Marquart, Ozment, Klinzing,
Otremba and Finstad introduced:
H. F. No. 1637, A bill for an act proposing an amendment to the
Minnesota Constitution, by adding a section to article XIII; establishing the
same standard for the Minnesota Constitution and the United States Constitution
for issues relating to abortion.
The bill was read for the first time and referred to the
Committee on Civil Law.
Klinzing, Greiling, Slawik and Lipman
introduced:
H. F. No. 1638, A bill for an act relating to education
finance; providing for a grant to the east metro integration district;
authorizing bonds; appropriating money.
The bill was read for the first time and referred to the
Committee on Education Finance.
Anderson, I.; Abrams; Juhnke; Murphy and Abeler
introduced:
H. F. No. 1639, A bill for an act proposing an amendment to the
Minnesota Constitution, article IV, section 12; providing for extension of
regular sessions.
The bill was read for the first time and referred to the
Committee on Governmental Operations and Veterans Affairs Policy.
Kuisle and Davids introduced:
H. F. No. 1640, A bill for an act relating to natural
resources; appropriating money for state trail segment in Olmsted county.
The bill was read for the first time and referred to the
Committee on Environment and Natural Resources Finance.
Koenen introduced:
H. F. No. 1641, A bill for an act relating to state government;
requiring certain purchases of, or on behalf of, the department of corrections
to be made in the state; proposing coding for new law in Minnesota Statutes,
chapter 16C.
The bill was read for the first time and referred to the
Committee on Governmental Operations and Veterans Affairs Policy.
Koenen, Rukavina and Juhnke introduced:
H. F. No. 1642, A bill for an act relating to traffic
regulations; increasing maximum allowable length of recreational vehicle
combinations to 65 feet; amending Minnesota Statutes 2002, section 169.81,
subdivision 3c.
The bill was read for the first time and referred to the
Committee on Transportation Policy.
Olson, M., introduced:
H. F. No. 1643, A bill for an act relating to civil actions;
regulating actions involving fault; amending Minnesota Statutes 2002, section
604.01, subdivision 1.
The bill was read for the first time and referred to the
Committee on Civil Law.
The Speaker called Abrams to the
Chair.
MESSAGES FROM THE SENATE
The following messages were received from the Senate:
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:
H. F. No. 279, A bill for an act relating to health; modifying
provisions for certifying a physical disability; modifying provisions for
admitting a person for emergency care of mental illness or mental retardation;
amending Minnesota Statutes 2002, sections 147A.09,
subdivision 2; 169.345, subdivision 2a; 253B.05, subdivision 2.
Patrice Dworak, First Assistant Secretary of the Senate
CONCURRENCE
AND REPASSAGE
Abeler moved that the House concur in the Senate amendments to
H. F. No. 279 and that the bill be repassed as amended by the
Senate. The motion prevailed.
H. F. No. 279, A bill for an act relating
to health; expanding authority of physician assistants and advanced practice
registered nurses; amending Minnesota Statutes 2002, sections 147A.09,
subdivision 2; 169.345, subdivision 2a; 253B.05, subdivision 2.
The bill was read for the third time, as amended by the Senate,
and placed upon its repassage.
The question was taken on the repassage of the bill and the
roll was called. There were 109 yeas
and 0 nays as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Adolphson
Anderson, I.
Anderson, J.
Atkins
Beard
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Carlson
Clark
Cornish
Cox
Davids
DeLaForest
Demmer
Dempsey
Dill
Dorn
Eastlund
Eken
Ellison
Entenza
Finstad
Fuller
Goodwin
Greiling
Gunther
Haas
Harder
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Kahn
Kelliher
Kielkucki
Klinzing
Knoblach
Koenen
Kohls
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindner
Magnus
Mahoney
Mariani
Marquart
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Nornes
Olsen, S.
Opatz
Otto
Paulsen
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seifert
Sertich
Severson
Sieben
Simpson
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Tingelstad
Urdahl
Vandeveer
Wagenius
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
The bill was repassed, as amended by the Senate, and its title
agreed to.
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:
H. F. No. 673, A bill for an act relating to insurance;
permitting the comprehensive health association to offer policies with higher
annual deductibles; permitting extension of the writing carrier contract;
providing a new category of individuals eligible for coverage; clarifying the
effective date of coverage and other matters; amending Minnesota
Statutes 2002, sections 62E.08, subdivision 1; 62E.091; 62E.12;
62E.13, subdivision 2, by adding a subdivision; 62E.14; 62E.18.
Patrice Dworak, First Assistant Secretary of the Senate
CONCURRENCE
AND REPASSAGE
Haas moved that the House concur in the Senate amendments to
H. F. No. 673 and that the bill be repassed as amended by the
Senate. The motion prevailed.
H. F. No 673, A bill for an act relating to insurance; changing
certain loss ration standards; permitting the comprehensive health association
to offer policies with higher annual deductibles; permitting extension of the
writing carrier contract; providing a new category of individuals eligible for
coverage; clarifying the effective date of coverage and other matters; amending
Minnesota Statutes 2002, sections 62A.021, subdivision 1;
62E.08, subdivision 1; 62E.091; 62E.12; 62E.13, subdivision 2, by adding
a subdivision; 62E.14; 62E.18.
The bill was read for the third time, as amended by the Senate,
and placed upon its repassage.
The question was taken on the repassage of the bill and the
roll was called. There were 112 yeas
and 1 nay as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Adolphson
Anderson, I.
Anderson, J.
Atkins
Beard
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Carlson
Clark
Cornish
Cox
Davids
DeLaForest
Demmer
Dempsey
Dill
Dorn
Eastlund
Eken
Ellison
Entenza
Finstad
Fuller
Goodwin
Greiling
Gunther
Haas
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Kahn
Kelliher
Kielkucki
Klinzing
Knoblach
Koenen
Kohls
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindner
Magnus
Mahoney
Mariani
Marquart
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Nornes
Olsen, S.
Opatz
Otto
Paulsen
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Smith
Soderstrom
Stang
Strachan
Swenson
Sykora
Thao
Tingelstad
Urdahl
Vandeveer
Wagenius
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
Those who
voted in the negative were:
Solberg
The bill was repassed, as amended by the Senate, and its title
agreed to.
Paulsen moved that the House recess subject to the call of the
Chair. The motion prevailed.
RECESS
RECONVENED
The House reconvened and was called to order by Speaker pro
tempore Abrams.
Mahoney
was excused between the hours of 10:00 a.m. and 11:45 a.m.
MESSAGES FROM THE SENATE, Continued
The following messages were received from the Senate:
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:
H. F. No. 1244, A bill for an act relating to lawful gambling;
making various clarifying and technical changes; providing and modifying
definitions; permitting resale of certain gambling equipment; providing for
fees, prices, and prize limits; clarifying requirements for gambling managers
and employees, premises, records and reports; regulating linked bingo games;
clarifying conduct of high school raffles; amending Minnesota Statutes 2002,
sections 349.12, subdivisions 4, 18, 19, 25, by adding subdivisions;
349.151, subdivisions 4, 4b; 349.153; 349.155, subdivision 3;
349.161, subdivision 5; 349.163, subdivision 3; 349.166,
subdivisions 1, 2; 349.167, subdivisions 4, 6, 7; 349.168, subdivisions 1,
2, 6, by adding a subdivision; 349.169, subdivisions 1, 3; 349.17,
subdivisions 3, 6, 7, by adding a subdivision; 349.18, subdivision 1;
349.19, subdivision 3, by adding a subdivision; 349.191,
subdivisions 1, 1a; 349.211, subdivision 1, by adding a subdivision;
609.761, subdivision 5; proposing coding for new law in Minnesota
Statutes, chapter 349; repealing Minnesota Statutes 2002,
sections 349.168, subdivision 9.
Patrice Dworak, First Assistant Secretary of the Senate
CONCURRENCE AND REPASSAGE
Jacobson moved that the House concur in the Senate amendments
to H. F. No. 1244 and that the bill be repassed as amended by
the Senate. The motion prevailed.
H. F. No. 1244, A bill for an act relating to lawful gambling;
making various clarifying and technical changes; providing and modifying
definitions; providing for conduct of linked bingo games; permitting resale of
certain gambling equipment; providing for fees, prices, and prize limits;
clarifying requirements for gambling managers and employees, premises, records
and reports; clarifying conduct of high school raffles; amending Minnesota
Statutes 2002, sections 349.12, subdivisions 4, 18, 19, 25, by
adding subdivisions; 349.151, subdivisions 4, 4b; 349.153; 349.155, subdivision 3;
349.161, subdivision 5; 349.163, subdivision 3; 349.166,
subdivisions 1, 2; 349.167, subdivisions 4, 6, 7; 349.168,
subdivisions 1, 2, 6, by adding a subdivision; 349.169,
subdivisions 1, 3; 349.17, subdivisions 3, 6, 7, by adding a
subdivision; 349.18, subdivision 1; 349.19, subdivision 3, by adding
a subdivision; 349.191, subdivisions 1, 1a; 349.211, subdivision 1,
by adding a subdivision; 609.761, subdivision 5; proposing coding for new law in Minnesota Statutes, chapter 349;
repealing Minnesota Statutes 2002, section 349.168, subdivision 9.
The bill was read for the third time, as amended by the Senate,
and placed upon its repassage.
The question was taken on the repassage of the bill and the
roll was called. There were 112 yeas
and 15 nays as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Adolphson
Anderson, I.
Anderson, J.
Atkins
Beard
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Buesgens
Carlson
Cornish
Cox
Davids
DeLaForest
Demmer
Dempsey
Dill
Dorn
Eastlund
Eken
Entenza
Erhardt
Erickson
Finstad
Fuller
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Heidgerken
Hilstrom
Hilty
Hoppe
Huntley
Jacobson
Jaros
Johnson, J.
Juhnke
Kielkucki
Knoblach
Koenen
Kohls
Krinkie
Kuisle
Lanning
Larson
Latz
Lenczewski
Lieder
Lindgren
Lindner
Lipman
Magnus
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, P.
Nornes
Olsen, S.
Opatz
Osterman
Otremba
Otto
Paulsen
Paymar
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Tingelstad
Urdahl
Vandeveer
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
Those who
voted in the negative were:
Clark
Davnie
Hausman
Holberg
Hornstein
Howes
Johnson, S.
Kahn
Kelliher
Klinzing
Lesch
Nelson, M.
Olson, M.
Thissen
Wagenius
The bill was repassed, as amended by the Senate, and its title
agreed to.
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:
H. F. No. 1140, A bill for an act relating to health; modifying
requirements for an agreement to regulate nuclear materials; amending Minnesota
Statutes 2002, section 144.1202, subdivision 4.
Patrice Dworak, First Assistant Secretary of the Senate
CONCURRENCE
AND REPASSAGE
Soderstrom moved that the House concur in the Senate amendments
to H. F. No. 1140 and that the bill be repassed as amended by
the Senate. The motion prevailed.
H. F. No. 1140, A bill for an act relating to health; modifying
requirements for an agreement to regulate nuclear materials; regulating the
issuance of social work licenses and the payment of fees; amending Minnesota
Statutes 2002, sections 144.1202, subdivision 4; 148B.18,
subdivision 2a, by adding a subdivision; 148B.20, subdivision 3;
148B.21, subdivision 7; 148B.22, by adding a subdivision; 148B.26,
subdivision 1; 148B.27, subdivisions 1, 2; Laws 2001, chapter 90,
section 6; proposing coding for new law in Minnesota Statutes,
chapter 148B; repealing Minnesota Rules, parts 8740.0200, subpart 3, item
C; 8740.0222; 8740.0227; 8740.0290.
The bill was read for the third time, as amended by the Senate,
and placed upon its repassage.
The question was taken on the repassage of the bill and the
roll was called. There were 119 yeas
and 8 nays as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Anderson, I.
Anderson, J.
Atkins
Beard
Bernardy
Biernat
Blaine
Boudreau
Bradley
Brod
Carlson
Clark
Cornish
Cox
Davids
Davnie
DeLaForest
Demmer
Dempsey
Dill
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Finstad
Fuller
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Juhnke
Kahn
Kelliher
Klinzing
Knoblach
Koenen
Kohls
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Lipman
Magnus
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Nornes
Olsen, S.
Opatz
Osterman
Otremba
Otto
Paulsen
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Thissen
Tingelstad
Urdahl
Vandeveer
Wagenius
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
Those who voted in the negative were:
Adolphson
Borrell
Buesgens
Erickson
Holberg
Kielkucki
Krinkie
Olson, M.
The bill was repassed, as amended by the Senate, and its title
agreed to.
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:
H. F. No. 943, A bill for an act relating to state government;
modifying practices and procedures relating to state finance; transferring
state treasurer duties to the commissioner of finance; amending Minnesota
Statutes 2002, sections 7.26; 15.62, subdivisions 2, 3; 16A.10,
subdivisions 1, 2; 16A.11, subdivision 3; 16A.127,
subdivision 4; 16A.1285, subdivision 3; 16A.129, subdivision 3;
16A.133, subdivision 1; 16A.14, subdivision 3; 16A.17, by adding a
subdivision; 16A.27, subdivision 5; 16A.40; 16A.46; 16A.501; 16A.626;
16A.642, subdivision 1; 16D.09, subdivision 1; 16D.13,
subdivisions 1, 2; 35.08; 35.09, subdivision 3; 49.24,
subdivisions 13, 16; 84A.11; 84A.23, subdivision 4; 84A.33,
subdivision 4; 84A.40; 85A.05, subdivision 2; 94.53; 115A.58,
subdivision 2; 116.16, subdivision 4; 116.17, subdivision 2;
122A.21; 126C.72, subdivision 2; 127A.40; 161.05, subdivision 3;
161.07; 167.50, subdivision 2; 174.51, subdivision 2; 176.181,
subdivision 2; 176.581; 190.11; 241.08, subdivision 1; 241.10;
241.13, subdivision 1; 244.19, subdivision 7; 245.697,
subdivision 2a; 246.15, subdivision 1; 246.18, subdivision 1;
246.21; 276.11, subdivision 1; 280.29; 293.06; 299D.03,
subdivision 5; 352.05; 352B.03, subdivision 2; 354.06,
subdivision 3; 354.52, subdivision 5; 385.05; 475A.04; 475A.06,
subdivision 2; 481.01; 490.123,
subdivision 2; 525.161; 525.841; repealing Minnesota Statutes 2002, sections
7.21; 16A.06, subdivision 10; 16A.131, subdivision 1; 16D.03,
subdivision 3; 16D.09, subdivision 2.
Patrice Dworak, First Assistant Secretary of the Senate
CONCURRENCE
AND REPASSAGE
Rhodes moved that the House concur in the Senate amendments to
H. F. No. 943 and that the bill be repassed as amended by the
Senate. The motion prevailed.
H. F. No. 943, A bill for an act relating to state government;
modifying practices and procedures relating to state finance; transferring
state treasurer duties to the commissioner of finance; amending Minnesota
Statutes 2002, sections 7.26; 15.62, subdivisions 2, 3; 16A.10,
subdivisions 1, 2; 16A.127, subdivision 4; 16A.129,
subdivision 3; 16A.133, subdivision 1; 16A.14, subdivision 3;
16A.17, by adding a subdivision; 16A.27, subdivision 5; 16A.40; 16A.46;
16A.501; 16A.626; 16A.642, subdivision 1; 16D.09, subdivision 1;
16D.13, subdivisions 1, 2; 35.08; 35.09, subdivision 3; 49.24,
subdivisions 13, 16; 84A.11; 84A.23, subdivision 4; 84A.33,
subdivision 4; 84A.40; 85A.05, subdivision 2; 94.53; 115A.58,
subdivision 2; 116.16, subdivision 4; 116.17, subdivision 2;
122A.21; 126C.72, subdivision 2; 127A.40; 161.05, subdivision 3;
161.07; 167.50, subdivision 2; 174.51, subdivision 2; 176.181,
subdivision 2; 176.581; 190.11; 241.08, subdivision 1; 241.10;
241.13, subdivision 1; 244.19, subdivision 7; 245.697,
subdivision 2a; 246.15, subdivision 1; 246.18, subdivision 1;
246.21; 276.11, subdivision 1; 280.29; 293.06; 299D.03,
subdivision 5; 352.05; 352B.03, subdivision 2; 354.06,
subdivision 3; 354.52, subdivision 5; 385.05; 475A.04; 475A.06,
subdivision 2; 481.01; 490.123, subdivision 2; 525.161; 525.841;
repealing Minnesota Statutes 2002, sections 7.21; 16A.06,
subdivision 10; 16A.131, subdivision 1; 16D.03, subdivision 3;
16D.09, subdivision 2.
The bill was read for the third time, as amended by the Senate,
and placed upon its repassage.
The question was taken on the repassage of the bill and
the roll was called. There were 111
yeas and 16 nays as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Anderson, I.
Anderson, J.
Atkins
Beard
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Carlson
Clark
Cornish
Cox
Davids
Demmer
Dempsey
Dill
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Finstad
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Hilstrom
Hilty
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Juhnke
Kahn
Kelliher
Klinzing
Knoblach
Koenen
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Magnus
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Nornes
Olsen, S.
Opatz
Osterman
Otremba
Otto
Paulsen
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Thissen
Tingelstad
Urdahl
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
Those who
voted in the negative were:
Adolphson
Buesgens
Davnie
DeLaForest
Erickson
Heidgerken
Holberg
Hoppe
Kielkucki
Kohls
Krinkie
Lipman
Olson, M.
Paymar
Vandeveer
Wagenius
The bill was repassed, as amended by the Senate, and its title
agreed to.
Speaker pro tempore Abrams called Seifert to the Chair.
FISCAL CALENDAR
Pursuant to rule 1.22, Abrams requested immediate consideration
of S. F. No. 1505.
S. F. No. 1505 was reported to the House.
Abrams moved to amend S. F. No. 1505, the unofficial
engrossment, as follows:
Page 2, after line 50, insert:
"Section 1.
Minnesota Statutes 2002, section 168.27, subdivision 4a,
is amended to read:
Subd. 4a. [LIMITED USED VEHICLE LICENSE.] A limited used vehicle license shall
be provided to a nonprofit charitable organization that qualifies for tax
exemption under section 501(c)(3) of the Internal Revenue Code whose
primary business in the transfer of vehicles is to raise funds for the
corporation, who acquires vehicles for sale through donation, and who uses a
licensed motor vehicle auctioneer to sell vehicles to retail customers. This license does not apply to educational
institutions whose primary purpose is to train students in the repair,
maintenance, and sale of motor vehicles.
A limited used vehicle license allows the organization to accept
assignment of vehicles without the requirement to transfer title as provided in
section 168A.10 until sold to a retail customer or licensed motor
vehicle dealer. Limited used vehicle
license holders are not entitled to dealer plates, and shall report all
vehicles held for resale to the department of public safety in a manner and
time prescribed by the department.
[EFFECTIVE DATE.] This
section is effective for sales made after June 30, 2003."
Page 3, after line 25, insert:
"Sec. 3. Minnesota
Statutes 2002, section 289A.18, subdivision 4, is amended to
read:
Subd. 4. [SALES AND USE
TAX RETURNS.] (a) Sales and use tax returns must be filed on or before the 20th
day of the month following the close of the preceding reporting period, except
that annual use tax returns provided for under section 289A.11,
subdivision 1, must be filed by April 15 following the close of the
calendar year, in the case of individuals.
Annual use tax returns of businesses, including sole proprietorships,
and annual sales tax returns must be filed by February 5 following the close of
the calendar year.
(b) Returns for the June reporting period filed by retailers
required to remit their June liability under section 289A.20,
subdivision 4, paragraph (b), are due on or before August 20.
(c) If a retailer has an average sales and use tax liability,
including local sales and use taxes administered by the commissioner, equal to
or less than $500 per month in any quarter of a calendar year, and has
substantially complied with the tax laws during the preceding four calendar
quarters, the retailer may request authorization to file and pay the taxes
quarterly in subsequent calendar quarters.
The authorization remains in effect during the period in which the
retailer's quarterly returns reflect sales and use tax liabilities of less than
$1,500 and there is continued compliance with state tax laws.
(d) If a retailer has an average sales and use tax liability,
including local sales and use taxes administered by the commissioner, equal to
or less than $100 per month during a calendar year, and has substantially
complied with the tax laws during that period, the retailer may request
authorization to file and pay the taxes annually in subsequent years. The authorization remains in effect during
the period in which the retailer's annual returns reflect sales and use tax
liabilities of less than $1,200 and there is continued compliance with state
tax laws.
(e) The commissioner may also grant quarterly or annual filing
and payment authorizations to retailers if the commissioner concludes that the
retailers' future tax liabilities will be less than the monthly totals
identified in paragraphs (c) and (d). An
authorization granted under this paragraph is subject to the same conditions as
an authorization granted under paragraphs (c) and (d).
(f) A taxpayer who is a materials supplier may report gross
receipts either on:
(1) the cash basis as the consideration is received; or
(2) the accrual basis as sales are made.
As
used in this paragraph, "materials supplier" means a person who
provides materials for the improvement of real property; who is primarily
engaged in the sale of lumber and building materials-related products to
owners, contractors, subcontractors, repairers, or consumers; who is authorized
to file a mechanics lien upon real property and improvements under
chapter 514; and who files with the commissioner an election to file sales
and use tax returns on the basis of this paragraph.
(g) Notwithstanding paragraphs (a) to (f), a seller that is
not a Model 1, 2, or 3 seller, as those terms are used in the Streamlined Sales
and Use Tax Agreement, that does not have a legal requirement to register in
Minnesota, and that is registered under the agreement, must file a return by
February 5 following the close of the calendar year in which the seller
initially registers, and must file subsequent returns on February 5 on an
annual basis in succeeding years. Additionally, a return must be submitted on
or before the 20th day of the month following any month by which sellers have
accumulated state and local tax funds for the state in the amount of $1,000 or
more.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 4. Minnesota
Statutes 2002, section 289A.40, subdivision 2, is amended to
read:
Subd. 2. [BAD DEBT
LOSS.] If a claim relates to an overpayment because of a failure to deduct a loss
due to a bad debt or to a security becoming worthless, the claim is considered
timely if filed within seven years from the date prescribed for the filing of
the return. A claim relating to an
overpayment of taxes under chapter 297A must be filed within 3-1/2 years
from the date prescribed for filing the return, plus any extensions granted for
filing the return, but only if filed within the extended time, or within one
year from the date the taxpayer's federal income tax return is timely filed
claiming the bad debt deduction, whichever period expires later. The refund or credit is limited to the
amount of overpayment attributable to the loss. "Bad debt" for purposes of this subdivision, has the
same meaning as that term is used in United States Code, title 26,
section 166, except that the following are excluded from the calculation
of bad debt: financing charges or
interest; sales or use taxes charged on the purchase price; uncollectible
amounts on property that remain in the possession of the seller until the full
purchase price is paid; expenses incurred in attempting to collect any debt;
and repossessed property.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 5. Minnesota
Statutes 2002, section 289A.50, is amended by adding a subdivision to
read:
Subd. 2b.
[CERTIFIED SERVICE PROVIDER; BAD DEBT CLAIM.] A certified service
provider, as defined in section 297A.995, subdivision 2, may claim on
behalf of a taxpayer that is its client any bad debt allowance provided by
section 297A.81. The certified
service provider must credit or refund to its client the full amount of any bad
debt allowance or refund received.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 6. Minnesota
Statutes 2002, section 289A.50, is amended by adding a subdivision to
read:
Subd. 2c.
[NOTICE FROM PURCHASER TO VENDOR REQUESTING REFUND.] (a) If a vendor
has collected from a purchaser a tax on a transaction that is not subject to
the tax imposed by chapter 297A, the purchaser may seek from the vendor a
return of over-collected sales or use taxes as follows:
(1) the purchaser must provide written notice to the vendor;
(2) the notice to the vendor must contain the information
necessary to determine the validity of the request; and
(3) no cause of action against the
vendor accrues until the vendor has had 60 days to respond to the written
notice.
(b) In connection with a purchaser's request from a vendor
of over-collected sales or use taxes, a vendor is presumed to have a reasonable
business practice, if in the collection of such sales or use taxes, the
vendor: (1) uses a certified service
provider as defined in section 297A.995, a certified automated system, as
defined in section 297A.995, or a proprietary system that is certified by
the state; and (2) has remitted to the state all taxes collected less any
deductions, credits, or collection allowances.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 7. Minnesota
Statutes 2002, section 289A.56, subdivision 4, is amended to
read:
Subd. 4. [CAPITAL
EQUIPMENT AND CERTAIN BUILDING MATERIALS REFUNDS; REFUNDS TO PURCHASERS.]
Notwithstanding subdivision 3, for refunds payable under section sections
297A.75, subdivision 1, clauses (1), (2), (3), and (5), interest is
computed from the date the refund claim is filed with the commissioner. For refunds payable under section and
289A.50, subdivision 2a, interest is computed from the 20th day of the
month following the month of the invoice date for the purchase which is the
subject of the refund, if the refund claim includes a detailed schedule of
purchases made during each of the periods in the claim. If the refund claim submitted does not
contain a schedule reflecting purchases made in each period, interest is
computed from the date the claim was filed 90 days after the refund
claim is filed with the commissioner.
[EFFECTIVE DATE.] This
section is effective for refund claims filed on or after April 1, 2003."
Page 4, line 21, after "of" insert "prewritten"
and before the period, insert "whether delivered electronically, by
load and leave, or otherwise"
Page 7, line 6, strike everything after "law" and
insert a period
Page 7, strike lines 7 to 29
Page 8, line 3, after "section" insert ",
paragraph (f), and the changes made to paragraph (i) are effective for sales
and purchases made on or after January 1, 2004. This section, paragraph (k),"
Page 8, after line 4, insert:
"Sec. 9. Minnesota
Statutes 2002, section 297A.61, subdivision 7, is amended to
read:
Subd. 7. [SALES PRICE.]
(a) "Sales price" means the measure subject to sales tax, and means
the total amount of consideration, including cash, credit, personal
property, and services, for which personal property or services are sold,
leased, or rented, valued in money, whether received in money or otherwise,
without any deduction for the following:
(1) the seller's cost of the property sold;
(2) the cost of materials used, labor or service cost,
interest, losses, all costs of transportation to the seller, all taxes imposed
on the seller, and any other expenses of the seller;
(3) charges by the seller for any services necessary to
complete the sale, other than delivery and installation charges;
(4) delivery charges;
(5) installation charges; and
(6) the value of exempt property given to the purchaser when
taxable and exempt personal property have been bundled together and sold by the
seller as a single product or piece of merchandise.
(b) Sales price does not include:
(1) discounts, including cash, terms, or coupons, that
are not reimbursed by a third party and that are allowed by the seller and
taken by a purchaser on a sale;
(2) interest, financing, and carrying charges from credit
extended on the sale of personal property or services, if the amount is
separately stated on the invoice, bill of sale, or similar document given to
the purchaser; and
(3) any taxes legally imposed directly on the consumer that are
separately stated on the invoice, bill of sale, or similar document given to
the purchaser.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 10. Minnesota
Statutes 2002, section 297A.61, subdivision 10, is amended to
read:
Subd. 10. [TANGIBLE
PERSONAL PROPERTY.] (a) "Tangible personal property" means corporeal
personal property of any kind, including property that is to become real
property as a result of incorporation, attachment, or installation following
its acquisition.
(b) Tangible personal property includes, but is not limited
to:
(1) computer software, whether contained on tape, discs,
cards, or other devices; and
(2) prepaid telephone calling cards.
(c) personal property that can be seen, weighed,
measured, felt, or touched, or that is in any other manner perceptible to the
senses. "Tangible personal
property" includes, but is not limited to, electricity, water, gas, steam,
prewritten computer software, and prepaid calling cards.
(b) Tangible personal property does not include:
(1) large ponderous machinery and equipment used in a business
or production activity which at common law would be considered to be real
property;
(2) property which is subject to an ad valorem property tax;
(3) property described in section 272.02,
subdivision 9, clauses (a) to (d); and
(4) property described in section 272.03,
subdivision 2, clauses (3) and (5).
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 11. Minnesota
Statutes 2002, section 297A.61, is amended by adding a subdivision to
read:
Subd. 14a.
[LEASE OR RENTAL.] (a) "Lease or rental" means any transfer
of possession or control of tangible personal property for a fixed or
indeterminate term for consideration. A
lease or rental may include future options to purchase or extend.
(b) Lease or rental does not include:
(1) a transfer of possession or control of property under a
security agreement or deferred payment plan that requires the transfer of title
upon completion of the required payments;
(2) a transfer of possession or control of property under an
agreement that requires the transfer of title upon completion of required
payments and payment of an option price does not exceed the greater of $100 or
one percent of the total required payments; or
(3) providing tangible personal property along with an
operator for a fixed or indeterminate period of time. A condition of this exclusion is that the operator is necessary
for the equipment to perform as designed.
For the purpose of this subdivision, an operator must do more than
maintain, inspect, or set up the tangible personal property.
(c) Lease or rental does include agreements covering motor
vehicles and trailers where the amount of consideration may be increased or
decreased by reference to the amount realized upon sale or disposition of the
property as defined in United States Code, title 26, section 7701(h)(l).
(d) This definition must be used for sales and use tax
purposes regardless if a transaction is characterized as a lease or rental
under generally accepted accounting principles, the Internal Revenue Code,
chapter 336, or other provisions of federal, state, or local law.
[EFFECTIVE DATE.] This
section is effective for leases and rentals entered into on or after January 1,
2004.
Sec. 12. Minnesota
Statutes 2002, section 297A.61, subdivision 17, is amended to read:
Subd. 17. [PREWRITTEN
COMPUTER SOFTWARE.] "Prewritten computer software" means a
computer program, either in the form of written procedures or contained on
tapes, discs, cards, or another device, or any required documentation or
manuals designed to facilitate the use of the computer program. computer
software, including prewritten upgrades, that is not designed and developed by
the author or other creator to the specifications of a specific purchaser. The combining of two or more
"prewritten computer software" programs or prewritten portions of the
programs does not cause the combination to be other than "prewritten
computer software."
"Prewritten computer software" includes software designed and
developed by the author or other creator to the specifications of a specific
purchaser when it is sold to a person other than the purchaser. If a person modifies or enhances computer
software of which the person is not the author or creator, the person is deemed
to be the author or creator only of such person's modifications or
enhancements. "Prewritten computer
software" or a prewritten portion of it that is modified or enhanced to
any degree, if the modification or enhancement is designed and developed to the
specifications of a specific purchaser, remains "prewritten computer
software"; provided, however, that if there is a reasonable, separately
stated charge or an invoice or other statement of the price given to the
purchaser for such modification or enhancement, the modification or enhancement
does not constitute "prewritten computer software." For purposes of this subdivision:
(1) "computer" does not include tape-controlled
automatic drilling, milling, or other manufacturing machinery or equipment means
an electronic device that accepts information in digital or similar form and
manipulates it for a result based on a sequence of instructions; and
(2) "computer program" means information and
directions that dictate the function performed by data processing
equipment. It includes the complete plan
for the solution of a problem, such as the complete sequence of automatic data
processing equipment instructions necessary to solve a problem and includes
both systems and application programs and subdivisions, such as assemblers,
compilers, routines, generators, and utility programs. Computer program includes a
"canned" or prewritten computer program that is held or existing for
general or repeated sale or lease, even if the prewritten or "canned"
program was initially developed on a custom basis or for in-house use. "electronic"
means relating to technology having electrical, digital, magnetic, wireless,
optical, electromagnetic, or similar capabilities; and
(3) "computer software" means a set of coded
instructions designed to cause a "computer" or automatic data
processing equipment to perform a task.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 13. Minnesota
Statutes 2002, section 297A.61, is amended by adding a subdivision to
read:
Subd. 17a.
[DELIVERED ELECTRONICALLY.] "Delivered electronically"
means delivered to the purchaser by means other than tangible storage media.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 14. Minnesota
Statutes 2002, section 297A.61, is amended by adding a subdivision to
read:
Subd. 17b. [LOAD
AND LEAVE.] "Load and leave" means delivered to the purchaser by
use of a tangible storage media where the tangible storage media is not physically
transferred to the purchaser.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 15. Minnesota
Statutes 2002, section 297A.61, subdivision 30, is amended to
read:
Subd. 30. [DELIVERY
CHARGES.] "Delivery charges" means charges by the seller of
personal property or services for preparation and delivery to a location
designated by the purchaser of personal property or services including, but not
limited to, transportation, shipping, postage, handling, crating, and packing.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004."
Page 8, after line 18, insert:
"Sec. 17.
Minnesota Statutes 2002, section 297A.66, is amended by adding
a subdivision to read:
Subd. 5.
[WITHDRAWAL FROM STREAMLINED SALES AND USE TAX AGREEMENT.] If the
state has withdrawn its membership or been expelled from the streamlined sales
and use tax agreement, it shall not use a seller's registration with the central
registration system and the collection of sales and use taxes in the state as a
factor in determining whether the seller has nexus with that state for any tax
at any time.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 18. [297A.666]
[AMNESTY FOR REGISTRATION.]
Subdivision 1.
[AMNESTY PROVISIONS.] Subject to the limitations of
subdivision 2:
(1) this state shall provide amnesty for uncollected or
unpaid sales or use tax to a seller who registers to pay or to collect and
remit applicable sales or use tax on sales made to purchasers in this state in
accordance with the terms of the streamlined sales and use tax agreement,
provided that the seller was not so registered in this state in the 12-month
period preceding the effective date of the state's participation in the
agreement; and
(2) the amnesty shall preclude assessment for uncollected or
unpaid sales or use tax together with penalty or interest for sales made during
the period the seller was not registered in this state, provided registration
occurs within 12 months of the effective date of the state's participation in
the agreement.
Subd. 2.
[LIMITATIONS.] (a) The amnesty is not available to a seller with
respect to any matter or matters for which the seller received notice of the
commencement of an audit and the audit is not yet finally resolved, including
any related administrative and judicial processes.
(b) The amnesty is not available for sales or use taxes
already paid or remitted to this state or to taxes collected by the seller.
(c) The amnesty is fully effective, absent the seller's
fraud or intentional misrepresentation of a material fact, as long as the
seller continues registration and continues payment or collection and
remittance of applicable sales or use taxes for a period of at least 36
months. The statute of limitations
provisions of chapter 289A applicable to asserting a sales or use tax
liability must be tolled during this 36-month period.
(d) The amnesty is applicable only to sales or use taxes due
from a seller in its capacity as a seller and not to sales or use taxes due
from a seller in its capacity as a buyer.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 19. Minnesota
Statutes 2002, section 297A.668, is amended to read:
297A.668 [SOURCING OF SALE; SITUS IN THIS STATE.]
Subdivision 1. [SOURCING
RULES APPLICABILITY.] (a) The following provisions of
this section apply regardless of the characterization of a product as
tangible personal property, a digital good, or a service; but do not apply to
telecommunications services, or the sales of motor vehicles, watercraft,
aircraft, modular homes, manufactured homes, or mobile homes. These provisions only apply to determine a
seller's obligation to pay or collect and remit a sales or use tax with respect
to the seller's sale of a product.
These provisions do not affect the obligation of a seller as purchaser
to remit tax on the use of the product.
Subd. 2.
[SOURCING RULES.] (a) The retail sale, excluding lease or rental, of
a product shall be sourced as required in paragraphs (b) through (f).
(b) When the product is received by the purchaser at a business
location of the seller, the sale is sourced to that business location.
(c) When the product is not received by the purchaser at a
business location of the seller, the sale is sourced to the location where
receipt by the purchaser or the donee designated by the purchaser occurs,
including the location indicated by instructions for delivery to the purchasers
or the purchaser's donee, known to the seller.
(d) When paragraphs (b) and (c) do not apply, the sale is
sourced to the location indicated by an address for the purchaser that is
available from the business records of the seller that are maintained in the
ordinary course of the seller's business, when use of this address does not
constitute bad faith.
(e) When paragraphs (b), (c), and (d) do not apply, the
sale is sourced to the location indicated by an address for the purchaser
obtained during the consummation of the sale, including the address of a
purchaser's payment instrument if no other address is available, when use of
this address does not constitute bad faith.
(f) When paragraphs (b), (c), (d), and (e) do not apply,
including the circumstance where the seller is without sufficient information
to apply the previous paragraphs, then the location is determined by the
address from which tangible personal property was shipped, from which the
digital good or the computer software delivered electronically was first
available for transmission by the seller, or from which the service was
provided. For purposes of this
paragraph, the seller must disregard any location that merely provided the
digital transfer of the product sold.
(g) For purposes of this subdivision, the terms
"receive" and "receipt" mean taking possession of tangible
personal property, making first use of services, or taking possession or making
first use of digital goods or the computer software delivered electronically,
whichever occurs first. The terms
receive and receipt do not include possession by a carrier for hire on behalf
of the purchaser.
Subd. 3. [LEASE
OR RENTAL OF TANGIBLE PERSONAL PROPERTY.] The lease or rental of tangible
personal property, other than property identified in subdivision 4 or 5,
shall be sourced as required in paragraphs (a) to (c).
(a) For a lease or rental that requires recurring periodic
payments, the first periodic payment is sourced the same as a retail sale in
accordance with the provisions of subdivision 6. Periodic payments made
subsequent to the first payment are sourced to the primary property location
for each period covered by the payment.
The primary property location must be as indicated by an address for the
property provided by the lessee that is available to the lessor from its
records maintained in the ordinary course of business, when use of this address
does not constitute bad faith. The
property location must not be altered by intermittent use at different
locations, such as use of business property that accompanies employees on
business trips and service calls.
(b) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail sale in
accordance with the provisions of subdivision 2.
(c) This subdivision does not affect the imposition or
computation of sales or use tax on leases or rentals based on a lump sum or
accelerated basis, or on the acquisition of property for lease.
Subd. 4. [LEASE
OR RENTAL OF MOTOR VEHICLES, TRAILERS, SEMITRAILERS, OR AIRCRAFT THAT DO NOT
QUALIFY AS TRANSPORTATION EQUIPMENT.] The lease or rental of motor vehicles,
trailers, semitrailers, or aircraft that do not qualify as transportation
equipment, as defined in subdivision 5, shall be sourced as required in
paragraphs (a) to (c).
(a) For a lease or rental that requires recurring periodic
payments, each periodic payment is sourced to the primary property
location. The primary property location
must be as indicated by an address for the property provided by the lessee that
is available to the lessor from its records maintained in the ordinary course
of business, when use of this address does not constitute bad faith. This location must not be altered by
intermittent use at different locations.
(b) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail sale in
accordance with the provisions of subdivision 2.
(c) This subdivision does not affect the imposition or
computation of sales or use tax on leases or rentals based on a lump sum or
accelerated basis, or on the acquisition of property for lease.
Subd. 5.
[TRANSPORTATION EQUIPMENT.] (a) The retail sale, including lease or
rental, of transportation equipment shall be sourced the same as a retail sale
in accordance with the provisions of subdivision 2, notwithstanding the
exclusion of lease or rental in subdivision 2.
(b) "Transportation equipment" means any of the
following:
(1) locomotives and railcars that are utilized for the
carriage of persons or property in interstate commerce; and/or
(2) trucks and truck-tractors with a gross vehicle weight
rating (GVWR) of 10,001 pounds or greater, trailers, semitrailers, or passenger
buses that are:
(i) registered through the international registration plan;
and
(ii) operated under authority of a carrier authorized and
certified by the United States Department of Transportation or another federal
authority to engage in the carriage of persons or property in interstate
commerce.
Subd. 2. 6.
[MULTIPLE POINTS OF USE.] (a) Notwithstanding the provisions of subdivision 1
subdivisions 2 to 5, a business purchaser that is not a holder of a
direct pay permit that knows at the time of its purchase of a digital good,
computer software delivered electronically, or a service that the
digital good, computer software delivered electronically, or service
will be concurrently available for use in more than one taxing jurisdiction
shall deliver to the seller in conjunction with its purchase a multiple points
of use exemption certificate disclosing this fact.
(b) Upon receipt of the multiple points of use exemption
certificate, the seller is relieved of the obligation to collect, pay, or remit
the applicable tax and the purchaser is obligated to collect, pay, or remit the
applicable tax on a direct pay basis.
(c) A purchaser delivering the multiple points of use exemption
certificate may use any reasonable, but consistent and uniform, method of
apportionment that is supported by the purchaser's business records as they
exist at the time of the consummation of the sale.
(d) The multiple points of use exemption certificate remains in
effect for all future sales by the seller to the purchaser until it is revoked
in writing, except as to the subsequent sale's specific apportionment that
is governed by the principle of paragraph (c) and the facts existing at the
time of the sale.
(e) A holder of a direct pay permit is not required to deliver
a multiple points or use exemption certificate to the seller. A direct pay permit holder shall follow the
provisions of paragraph (c) in apportioning the tax due on a digital good,
computer software delivered electronically, or a service that will be
concurrently available for use in more than one taxing jurisdiction.
Subd. 3. [DEFINITION
OF TERMS.] For purposes of this section, the terms "receive" and
"receipt" mean taking possession of tangible personal property,
making first use of services, or taking possession or making first use of
digital goods, whichever occurs first.
The terms receive and receipt do not include possession by a carrier for
hire on behalf of the purchaser.
Subd. 7. [DIRECT
MAIL.] (a) Notwithstanding other subdivisions of this section, a purchaser
of direct mail that is not a holder of a direct pay permit shall provide to the
seller, in conjunction with the purchase, either a direct mail form or
information to show the jurisdictions to which the direct mail is delivered to
recipients.
(1) Upon receipt of the direct
mail form, the seller is relieved of all obligations to collect, pay, or remit
the applicable tax and the purchaser is obligated to pay or remit the
applicable tax on a direct pay basis. A
direct mail form remains in effect for all future sales of direct mail by the
seller to the purchaser until it is revoked in writing.
(2) Upon receipt of information from the purchaser showing
the jurisdictions to which the direct mail is delivered to recipients, the
seller shall collect the tax according to the delivery information provided by
the purchaser. In the absence of bad
faith, the seller is relieved of any further obligation to collect tax on any
transaction for which the seller has collected tax pursuant to the delivery
information provided by the purchaser.
(b) If the purchaser of direct mail does not have a direct
pay permit and does not provide the seller with either a direct mail form or
delivery information, as required by paragraph (a), the seller shall collect
the tax according to subdivision 2, paragraph (f). Nothing in this paragraph limits a
purchaser's obligation for sales or use tax to any state to which the direct
mail is delivered.
(c) If a purchaser of direct mail provides the seller with
documentation of direct pay authority, the purchaser is not required to provide
a direct mail form or delivery information to the seller.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 20. [297A.669]
[TELECOMMUNICATION SOURCING.]
Subdivision 1.
[CALL-BY-CALL BASIS SOURCING.] Except for the defined
telecommunication services in subdivision 3, the sale of telecommunication
service sold on a call-by-call basis shall be sourced to (1) each level of
taxing jurisdiction where the call originates and terminates in that
jurisdiction; or (2) each level of taxing jurisdiction where the call either
originates or terminates and in which the service address is also located.
Subd. 2. [OTHER
THAN CALL-BY-CALL BASIS SOURCING.] Except for the defined telecommunication
services in subdivision 3, a sale of telecommunications services sold on a
basis other than a call-by-call basis is sourced to the customer's place of
primary use.
Subd. 3.
[DEFINED TELECOMMUNICATIONS SERVICES SOURCING.] The sale of the
following telecommunication services shall be sourced to each level of taxing
jurisdiction in paragraphs (a) to (d).
(a) A sale of mobile telecommunications services, other than
air-to-ground radiotelephone service and prepaid calling service, is sourced to
the customer's place of primary use as required by the Mobile
Telecommunications Sourcing Act.
(b) A sale of postpaid calling service is sourced to the
origination point of the telecommunications signal as first identified by
either:
(1) the seller's telecommunications system; or
(2) information received by the seller from its service
provider, where the system used to transport such signals is not that of the
seller.
(c) A sale of prepaid calling service is sourced in
accordance with section 297A.668, subdivision 2. However, in the case of a sale of mobile
telecommunications service that is a prepaid telecommunications service, the
rule provided in section 297A.668, subdivision 2, paragraph (f),
shall include as an option the location associated with the mobile telephone
number.
(d) A sale of a private
communication service is sourced as follows:
(1) service for a separate charge related to a customer
channel termination point is sourced to each level of jurisdiction in which the
customer channel termination point is located;
(2) service where all customer termination points are
located entirely within one jurisdiction or levels of jurisdiction is sourced
in such jurisdiction in which the customer channel termination points are
located;
(3) service for segments of a channel between two customer
channel termination points located in different jurisdictions and which segment
of channel are separately charged is sourced 50 percent in each level of
jurisdiction in which the customer channel termination points are located; and
(4) service for segments of a channel located in more than
one jurisdiction or levels of jurisdiction and which segments are not
separately billed is sourced in each jurisdiction based on the percentage
determined by dividing the number of customer channel termination points in the
jurisdiction by the total number of customer channel termination points.
Subd. 4.
[AIR-TO-GROUND RADIOTELEPHONE SERVICE.] "Air-to-ground
radiotelephone service," for purposes of this section, means a radio
service, as that term is defined in Code of Federal Regulations, title 47,
section 22.99, in which common carriers are authorized to offer and
provide radio telecommunications service for hire to subscribers in aircraft.
Subd. 5.
[CALL-BY-CALL BASIS.] "Call-by-call basis," for purposes of
this section, means any method of charging for telecommunications services
where the price is measured by individual calls.
Subd. 6.
[COMMUNICATIONS CHANNEL.] "Communications channel," for
purposes of this section, means a physical or virtual path of communications
over which signals are transmitted between or among customer channel termination
points.
Subd. 7.
[CUSTOMER.] "Customer," for purposes of this section, means
the person or entity that contracts with the seller of telecommunications
services. If the end user of
telecommunications services is not the contracting party, the end user of the
telecommunications service is the customer of the telecommunication service,
but this sentence applies only for the purpose of sourcing sales of
telecommunications services under this section. Customer does not include a reseller of telecommunications
service or for mobile telecommunications service of a serving carrier under an
agreement to serve the customer outside the home service provider's licensed
service area.
Subd. 8.
[CUSTOMER CHANNEL TERMINATION POINT.] "Customer channel termination
point," for purposes of this section, means the location where the
customer either inputs or receives the communications.
Subd. 9. [END
USER.] "End user," for purposes of this section, means the person
who utilizes the telecommunication service.
In the case of an entity, end user means the individual who utilizes the
service on behalf of the entity.
Subd. 10. [HOME
SERVICE PROVIDER.] "Home service provider," for purposes of this
section, means the same as that term is defined in Section 124(5) of Public Law
106-252 (Mobile Telecommunications Sourcing Act).
Subd. 11.
[MOBILE TELECOMMUNICATIONS SERVICE.] "Mobile telecommunications
service," for purposes of this section, means the same as that term is
defined in Section 124(1) of Public Law 106-252 (Mobile Telecommunications
Sourcing Act).
Subd. 12. [PLACE OF PRIMARY USE.] "Place of
primary use," for purposes of this section, means the street address
representative of where the customer's use of the telecommunications service
primarily occurs, which must be the residential street address or the primary
business street address of the customer.
In the case of mobile telecommunications services, place of primary use
must be within the licensed service area of the home service provider.
Subd. 13.
[POSTPAID CALLING SERVICE.] "Postpaid calling service," for
purposes of this section, means the telecommunications service obtained by
making a payment on a call-by-call basis either through the use of a credit
card or payment mechanism such as a bank card, travel card, credit card, or
debit card, or by a charge made to a telephone number that is not associated
with the origination or termination of the telecommunications service. A postpaid calling service includes a
telecommunications service that would be a prepaid calling service except it is
not exclusively a telecommunication service.
Subd. 14.
[PREPAID CALLING SERVICE.] "Prepaid calling service," for
purposes of this section, means the right to access exclusively
telecommunications services, which must be paid for in advance and which
enables the origination of calls using an access number or authorization code,
whether manually or electronically dialed, and that is sold in predetermined
units or dollars of which the number declines with use in a known amount.
Subd. 15.
[PRIVATE COMMUNICATION SERVICES.] "Private communication
services," for purposes of this section, means the same as that term is
defined in section 297A.61, subdivision 26.
Subd. 16.
[SERVICE ADDRESS.] "Service address," for purposes of this
section, means:
(1) the location of the telecommunications equipment to
which a customer's call is charged and from which the call originates or
terminates, regardless of where the call is billed or paid;
(2) if the location in paragraph (a) is not known, service
address means the origination point of the signal of the telecommunications
services first identified by either the seller's telecommunications system or
in information received by the seller from its service provider, where the
system used to transport the signals is not that of the seller; or
(3) if the location in paragraphs (a) and (b) is not known,
the service address means the location of the customer's place of primary use.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 21. Minnesota
Statutes 2002, section 297A.67, subdivision 8, is amended to
read:
Subd. 8. [CLOTHING.]
(a) Clothing is exempt. For purposes of
this subdivision, "clothing" means all human wearing apparel suitable
for general use.
(b) Clothing includes, but is not limited to, aprons, household
and shop; athletic supporters; baby receiving blankets; bathing suits and caps;
beach capes and coats; belts and suspenders; boots; coats and jackets;
costumes; children and adult diapers, including disposable; ear muffs;
footlets; formal wear; garters and garter belts; girdles; gloves and mittens
for general use; hats and caps; hosiery; insoles for shoes; lab coats;
neckties; overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes
and shoe laces; slippers; sneakers; socks and stockings; steel-toed boots;
underwear; uniforms, athletic and nonathletic; and wedding apparel.
(c) Clothing does not include the following:
(1) belt buckles sold separately;
(2) costume masks sold separately;
(3) patches and emblems sold separately;
(4) sewing equipment and supplies, including but not limited
to, knitting needles, patterns, pins, scissors, sewing machines, sewing needles,
tape measures, and thimbles;
(5) sewing materials that become part of clothing, including
but not limited to, buttons, fabric, lace, thread, yarn, and zippers;
(6) clothing accessories or equipment;
(7) sports or recreational equipment; and
(8) protective equipment.
Clothing also does not
include apparel made from fur if a uniform definition of "apparel made
from fur" is developed by the member states of the Streamlined Sales and
Use Tax Agreement.
For purposes of this subdivision, "clothing accessories or
equipment" means incidental items worn on the person or in conjunction
with clothing. Clothing accessories and
equipment include, but are not limited to, briefcases; cosmetics; hair
notions, including barrettes, hair bows, and hairnets; handbags; handkerchiefs;
jewelry; nonprescription sunglasses; umbrellas; wallets; watches; and wigs and
hairpieces. "Sports or
recreational equipment" means items designed for human use and worn in
conjunction with an athletic or recreational activity that are not suitable for
general use. Sports and recreational
equipment includes, but is not limited to, ballet and tap shoes; cleated or
spiked athletic shoes; gloves, including, but not limited to, baseball,
bowling, boxing, hockey, and golf gloves; goggles; hand and elbow guards; life
preservers and vests; mouth guards; roller and ice skates; shin guards;
shoulder pads; ski boots; waders; and wetsuits and fins. "Protective equipment" means items
for human wear and designed as protection of the wearer against injury or
disease or as protection against damage or injury of other persons or property
but not suitable for general use.
Protective equipment includes, but is not limited to, breathing masks;
clean room apparel and equipment; ear and hearing protectors; face shields;
finger guards; hard hats; helmets; paint or dust respirators; protective
gloves; safety glasses and goggles; safety belts; tool belts; and welders
gloves and masks.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004."
Page 8, after line 28, insert:
"Sec. 23.
Minnesota Statutes 2002, section 297A.68, subdivision 2,
is amended to read:
Subd. 2. [MATERIALS
CONSUMED IN INDUSTRIAL PRODUCTION.] (a) Materials stored, used, or consumed in
industrial production of personal property intended to be sold ultimately at
retail are exempt, whether or not the item so used becomes an ingredient or
constituent part of the property produced. Materials that qualify for this
exemption include, but are not limited to, the following:
(1) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(2) materials, including chemicals, fuels, and electricity
purchased by persons engaged in industrial production to treat waste generated
as a result of the production process;
(3) fuels, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam used for space
heating, cooling, or lighting is exempt if (i) it is in excess of the average
climate control or lighting for the production area, and (ii) it is necessary
to produce that particular product;
(4) petroleum products and lubricants;
(5) packaging materials, including returnable containers used
in packaging food and beverage products;
(6) accessory tools, equipment, and other items that are
separate detachable units with an ordinary useful life of less than 12 months
used in producing a direct effect upon the product; and
(7) the following materials, tools, and equipment used in
metalcasting: crucibles, thermocouple
protection sheaths and tubes, stalk tubes, refractory materials, molten metal
filters and filter boxes, degassing lances, and base blocks.
(b) This exemption does not include:
(1) machinery, equipment, implements, tools, accessories,
appliances, contrivances and furniture and fixtures, except those listed in
paragraph (a), clause (6); and
(2) petroleum and special fuels used in producing or generating
power for propelling ready-mixed concrete trucks on the public highways of this
state.
(c) Industrial production includes, but is not limited to,
research, development, design or production of any tangible personal property,
manufacturing, processing (other than by restaurants and consumers) of
agricultural products (whether vegetable or animal), commercial fishing,
refining, smelting, reducing, brewing, distilling, printing, mining, quarrying,
lumbering, generating electricity and, the production of road
building materials, and the research, development, design, or production of
computer software. Industrial
production does not include painting, cleaning, repairing or similar processing
of property except as part of the original manufacturing process.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 24. Minnesota
Statutes 2002, section 297A.68, subdivision 5, is amended to
read:
Subd. 5. [CAPITAL
EQUIPMENT.] (a) Capital equipment is exempt.
The tax must be imposed and collected as if the rate under
section 297A.62, subdivision 1, applied, and then refunded in the
manner provided in section 297A.75.
"Capital equipment" means machinery and equipment
purchased or leased, and used in this state by the purchaser or lessee
primarily for manufacturing, fabricating, mining, or refining tangible personal
property to be sold ultimately at retail if the machinery and equipment are
essential to the integrated production process of manufacturing, fabricating,
mining, or refining. Capital equipment
also includes machinery and equipment used to electronically transmit results
retrieved by a customer of an online computerized data retrieval system.
(b) Capital equipment includes, but is not limited to:
(1) machinery and equipment used to operate, control, or
regulate the production equipment;
(2) machinery and equipment used for research and development,
design, quality control, and testing activities;
(3) environmental control devices that are used to
maintain conditions such as temperature, humidity, light, or air pressure when
those conditions are essential to and are part of the production process;
(4) materials and supplies used to construct and install
machinery or equipment;
(5) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades or modifications
to machinery or equipment;
(6) materials used for foundations that support machinery or
equipment;
(7) materials used to construct and install special purpose
buildings used in the production process; and
(8) ready-mixed concrete trucks in which the ready-mixed
concrete is mixed as part of the delivery process; and
(9) machinery or equipment used for research, development,
design, or production of computer software.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 297B;
(2) machinery or equipment used to receive or store raw
materials;
(3) building materials, except for materials included in paragraph
(b), clauses (6) and (7);
(4) machinery or equipment used for nonproduction purposes,
including, but not limited to, the following:
plant security, fire prevention, first aid, and hospital stations;
support operations or administration; pollution control; and plant cleaning,
disposal of scrap and waste, plant communications, space heating, cooling,
lighting, or safety;
(5) farm machinery and aquaculture production equipment as
defined by section 297A.61, subdivisions 12 and 13;
(6) machinery or equipment purchased and installed by a
contractor as part of an improvement to real property; or
(7) any other item that is not essential to the integrated
process of manufacturing, fabricating, mining, or refining.
(d) For purposes of this subdivision:
(1) "Equipment" means independent devices or tools
separate from machinery but essential to an integrated production process,
including computers and computer software, used in operating, controlling, or
regulating machinery and equipment; and any subunit or assembly comprising a
component of any machinery or accessory or attachment parts of machinery, such
as tools, dies, jigs, patterns, and molds.
(2) "Fabricating" means to make, build, create,
produce, or assemble components or property to work in a new or different
manner.
(3) "Machinery" means mechanical, electronic, or
electrical devices, including computers and computer software, that are
purchased or constructed to be used for the activities set forth in paragraph
(a), beginning with the removal of raw materials from inventory through
completion of the product, including packaging of the product.
(4) "Machinery and equipment used for pollution
control" means machinery and equipment used solely to eliminate, prevent,
or reduce pollution resulting from an activity described in paragraph (a).
(5) "Manufacturing" means an operation or series of
operations where raw materials are changed in form, composition, or condition
by machinery and equipment and which results in the production of a new article
of tangible personal property. For
purposes of this subdivision, "manufacturing" includes the generation
of electricity or steam to be sold at retail.
(6) "Mining" means the extraction of minerals, ores,
stone, or peat.
(7) "Online data retrieval system" means a system
whose cumulation of information is equally available and accessible to all its
customers.
(8) "Primarily" means machinery and equipment used 50
percent or more of the time in an activity described in paragraph (a).
(9) "Refining" means the process of converting a
natural resource to a product, including the treatment of water to be sold at
retail.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004."
Page 9, after line 5, insert:
"Sec. 26.
Minnesota Statutes 2002, section 297A.75, subdivision 4,
is amended to read:
Subd. 4. [INTEREST.]
Interest must be paid on the refund at the rate in section 270.76 from the
date the refund claim is filed for taxes paid under subdivision 1, clauses
(1) to (3), and (5), and from 60 days after the date the refund claim is filed
with the commissioner for claims filed under subdivision 1, clauses (4),
(6), (7), (8), and (9) 90 days after the refund claim is filed with the
commissioner for taxes paid under subdivision 1.
[EFFECTIVE DATE.] This
section is effective for refund claims filed on or after April 1, 2003.
Sec. 27. Minnesota
Statutes 2002, section 297A.81, is amended to read:
297A.81 [UNCOLLECTIBLE DEBTS; OFFSET AGAINST OTHER TAXES.]
Subdivision 1.
[GENERAL.] The taxpayer may offset against the taxes payable for any
reporting period the amount of taxes imposed by this chapter previously paid as
a result of any transaction the consideration for which became a debt owed to
the taxpayer that became uncollectible during the reporting period, but only in
proportion to the portion of the debt that became uncollectible. Section 289A.40, subdivision 2, applies
to an offset under this section.
Subd. 2. [MANNER
OF ALLOWING DEDUCTION FOR UNCOLLECTIBLE DEBT.] (a) Uncollectible debt is
allowed as a deduction in the manner provided in this subdivision.
(b) If the uncollectible debt arose with respect to a sale
required to be included in gross receipts, subject to a tax imposed under
chapter 297A, the entire amount of the debt remaining uncollected is
allowed as a deduction.
(c) If the uncollectible debt arose with respect to a sale
partly subject to the tax imposed under chapter 297A and partly exempt,
the amount of the uncollectible debt allowed as a deduction is the amount
derived by multiplying the uncollectible debt by the percentage that the
taxable sale bears to the total sales.
(d) If the uncollectible debt arose with respect to two
or more sales made at successive intervals, payments made before the date the
debt became uncollectible must be applied first to the earliest sale upon which
there is an unpaid balance, and to following sales in successive order.
(e) If the books and records of the taxpayer claiming the
bad debt allowance support an allocation of the bad debts among the member
states of the streamlined sales and use tax agreement, such an allocation shall
be allowed.
Subd. 3.
[CERTIFIED SERVICE PROVIDER.] A certified service provider, as
defined in section 297A.995, subdivision 2, on behalf of a taxpayer
who is its client, may offset against taxes as provided by this section.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 28. Minnesota
Statutes 2002, section 297A.99, subdivision 5, is amended to
read:
Subd. 5. [TAX RATE.]
(a) The tax rate is as specified in the special law authorization and as
imposed by the political subdivision.
(b) The full political subdivision rate applies to any sales
that are taxed at a state rate less than or more than the state general
sales and use tax rate., and the political subdivision must not have
more than one local sales tax rate or more than one local use tax rate. This paragraph does not apply to sales or
use taxes imposed on electricity, piped natural or artificial gas, or other
heating fuels delivered by the seller, or the retail sale or transfer of motor
vehicles, aircraft, watercraft, modular homes, manufactured homes, or mobile
homes.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 29. Minnesota
Statutes 2002, section 297A.99, subdivision 10, is amended to
read:
Subd. 10. [USE OF ZIP
CODE IN DETERMINING LOCATION OF SALE.] To determine whether to impose the
local tax, the retailer may use zip codes if the zip code area is entirely
within the political subdivision. When
a zip code area is not entirely within a political subdivision, the retailer
shall not collect the local tax if the purchaser notifies the retailer that the
purchaser's delivery address is outside of the political subdivision, unless
the retailer verifies that the delivery address is in the political subdivision
using a means other than the zip code.
The lowest combined tax rate imposed in the zip code area applies if
the area includes more than one tax rate in any level of taxing
jurisdictions. If a nine-digit zip code
designation is not available for a street address or if a seller is unable to
determine the nine-digit zip code designation of a purchaser after exercising
due diligence to determine the designation, the seller may apply the rate for
the five-digit zip code area. For the
purposes of this subdivision, there is a rebuttable presumption that a seller
has exercised due diligence if the seller has attempted to determine the
nine-digit zip code designation by utilizing software approved by the governing
board that makes this designation from the street address and the five-digit zip
code of the purchaser. Notwithstanding subdivision 13, this
subdivision applies to all local sales taxes without regard to the date of
authorization. This subdivision does
not apply when the purchased product is received by the purchaser at the
business location of the seller.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 30. Minnesota
Statutes 2002, section 297A.99, subdivision 12, is amended to
read:
Subd. 12. [EFFECTIVE
DATES; NOTIFICATION.] (a) A political subdivision may impose a tax under this
section starting only on the first day of a calendar quarter. A political subdivision may repeal a tax
under this section stopping only on the last day of a calendar quarter.
(b) The political subdivision shall notify the
commissioner of revenue at least 90 days before imposing, changing the rate
of, or repealing a tax under this section.
(c) The political subdivision shall change the rate of tax
imposed under this section starting only on the first day of a calendar
quarter, and only after the commissioner has notified sellers at least 60 days
prior to the change.
(d) The political subdivision shall apply the rate change
for sales tax imposed under this section to purchases from printed catalogs,
wherein the purchaser computed the tax based upon local tax rates published in
the catalog, starting only on the first day of a calendar quarter, and only
after the commissioner has notified sellers at least 120 days prior to the
change.
(e) The political subdivision shall apply local jurisdiction
boundary changes to taxes imposed under this section starting only on the first
day of a calendar quarter, and only after the commissioner has notified sellers
at least 60 days prior to the change.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 31. Minnesota
Statutes 2002, section 297A.995, is amended by adding a subdivision
to read:
Subd. 10.
[RELIEF FROM CERTAIN LIABILITY.] Notwithstanding subdivision 9,
sellers and certified service providers are relieved from liability to the
state for having charged and collected the incorrect amount of sales or use tax
resulting from the seller or certified service provider (1) relying on erroneous
data provided by this state on tax rates, boundaries, or taxing jurisdiction
assignments, or (2) relying on erroneous data provided by the state in its
taxability matrix concerning the taxability of products and services.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004."
Page 10, after line 6, insert:
"(a) Minnesota Statutes 2002,
section 297A.61, subdivisions 14 and 15, are repealed effective
for sales and purchases made on or after January 1, 2004.
(b) Minnesota Statutes 2002, section 297A.69,
subdivision 5, is repealed effective January 1, 2006."
Page 10, line 7, before "Laws" insert "(c)"
Page 10, after line 11, insert:
"Section 1.
[123A.455] [REALIGNING SPLIT RESIDENTIAL PARCELS.]
Subdivision 1.
[DEFINITIONS.] "Split residential property parcel" means a
parcel of real estate that is located within the boundaries of more than one
school district and that is classified as residential property under:
(1) section 273.13, subdivision 22, paragraph (a)
or (b);
(2) section 273.13, subdivision 25, paragraph (b),
clause (1); or
(3) section 273.13, subdivision 25, paragraph (c),
clause (1).
Subd. 2. [PETITION.] The owner of a split
residential property parcel may petition the auditor of the county where the
split parcel is located to transfer that part into the adjoining school
district so the entire property will be located in the same school
district. The petition must contain:
(1) a correct description of the split parcel to be affected
by the transfer including supporting data on location and title to the land;
(2) a list of the school districts in which the split
parcels currently lie;
(3) the school district into which the petitioner desires to
have the whole split parcel transferred; and
(4) the district of attendance of any students currently
residing on the property.
Subd. 3.
[AUDITOR'S ORDER.] Within 60 days of receipt of the petition, the
auditor of the county in which the petition was filed under subdivision 2
shall issue an order to transfer the affected parcel to the district determined
by the county board. Orders issued on
or before July 1 will be effective for taxes payable in the following year. The auditor must notify the affected school
districts and the commissioner of the change in school district boundaries.
Subd. 4.
[COMMISSIONER.] The commissioner shall modify the records of school
district boundaries to conform to the order.
Subd. 5.
[TAXABLE PROPERTY.] Upon the effective date of the order, the whole
split property parcel is transferred into a single school district. Beginning in the next subsequent taxes
payable year, all taxable property in the whole split parcel is:
(1) relieved of all school district taxes from the district
in which the parcel is no longer located; and
(2) subject to all school district taxes in the district in
which the whole split parcel is now located.
[EFFECTIVE DATE.] This
section is effective for petitions filed on or after the day following final
enactment. Orders issued under
subdivision 3 on or before September 15, 2003, are effective for taxes
payable in 2004.
Sec. 2. Minnesota
Statutes 2002, section 168A.05, subdivision 1a, is amended to
read:
Subd. 1a. [MANUFACTURED
HOME; STATEMENT OF PROPERTY TAX PAYMENT.] In the case of a manufactured home as
defined in section 327.31, subdivision 6, the department shall not
issue a certificate of title unless the application under section 168A.04
is accompanied with a statement from the county auditor or county treasurer
where the manufactured home is presently located, stating that all manufactured
home personal property taxes levied on the unit that are due from in
the name of the current owner at the time of transfer for which the application
applies, have been paid.
[EFFECTIVE DATE.] This
section is effective for certificates of title issued by the department on or
after July 1, 2003."
Page 17, after line 28, insert:
"Sec. 12.
Minnesota Statutes 2002, section 273.124, subdivision 14,
is amended to read:
Subd. 14. [AGRICULTURAL
HOMESTEADS; SPECIAL PROVISIONS.] (a) Real estate of less than ten
acres that is the homestead of its owner must be classified as class 2a
under section 273.13, subdivision 23, paragraph (a), if:
(1) the parcel on which the house is
located is contiguous on at least two sides to (i) agricultural land, (ii) land
owned or administered by the United States Fish and Wildlife Service, or (iii)
land administered by the department of natural resources on which in lieu taxes
are paid under sections 477A.11 to 477A.14;
(2) its owner also owns a noncontiguous parcel of agricultural
land that is at least 20 acres;
(3) the noncontiguous land is located not farther than four
townships or cities, or a combination of townships or cities from the
homestead; and
(4) the agricultural use value of the noncontiguous land and
farm buildings is equal to at least 50 percent of the market value of the
house, garage, and one acre of land.
Homesteads initially classified as class 2a under the
provisions of this paragraph shall remain classified as class 2a, irrespective
of subsequent changes in the use of adjoining properties, as long as the
homestead remains under the same ownership, the owner owns a noncontiguous parcel
of agricultural land that is at least 20 acres, and the agricultural use value
qualifies under clause (4). Homestead
classification under this paragraph is limited to property that qualified under
this paragraph for the 1998 assessment.
(b)(i) Agricultural property consisting of at least 40 acres
shall be classified as the owner's homestead, to the same extent as other
agricultural homestead property, if all of the following criteria are met:
(1) the owner, the owner's spouse, or the son or daughter of
the owner or owner's spouse, is actively farming the agricultural property,
either on the person's own behalf as an individual or on behalf of a
partnership operating a family farm, family farm corporation, joint family farm
venture, or limited liability company of which the person is a partner,
shareholder, or member;
(2) both the owner of the agricultural property and the person
who is actively farming the agricultural property under clause (1), are
Minnesota residents;
(3) neither the owner nor the spouse of the owner claims
another agricultural homestead in Minnesota; and
(4) neither the owner nor the person actively farming the
property lives farther than four townships or cities, or a combination of four
townships or cities, from the agricultural property, except that if the owner
or the owner's spouse is required to live in employer-provided housing, the
owner or owner's spouse, whichever is actively farming the agricultural
property, may live more than four townships or cities, or combination of four
townships or cities from the agricultural property.
The relationship under this paragraph may be either by blood or
marriage.
(ii) Real property held by a trustee under a trust is eligible
for agricultural homestead classification under this paragraph if the
qualifications in clause (i) are met, except that "owner" means the
grantor of the trust.
(iii) Property containing the residence of an owner who owns
qualified property under clause (i) shall be classified as part of the owner's
agricultural homestead, if that property is also used for noncommercial storage
or drying of agricultural crops.
(c) Noncontiguous land shall be included as part of a homestead
under section 273.13, subdivision 23, paragraph (a), only if the
homestead is classified as class 2a and the detached land is located in the
same township or city, or not farther than four townships or cities or
combination thereof from the homestead.
Any taxpayer of these noncontiguous lands must notify the county
assessor that the noncontiguous land is part of the taxpayer's homestead, and,
if the homestead is located in another county, the taxpayer must also notify
the assessor of the other county.
(d) Agricultural land used for
purposes of a homestead and actively farmed by a person holding a vested
remainder interest in it must be classified as a homestead under
section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a,
any other dwellings on the land used for purposes of a homestead by persons
holding vested remainder interests who are actively engaged in farming the
property, and up to one acre of the land surrounding each homestead and
reasonably necessary for the use of the dwelling as a home, must also be
assessed class 2a.
(e) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23, paragraph
(a), for the 1997 assessment shall remain classified as agricultural homesteads
for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling located
on the agricultural homestead as a result of the April 1997 floods;
(2) the property is located in the county of Polk, Clay,
Kittson, Marshall, Norman, or Wilkin;
(3) the agricultural land and buildings remain under the same
ownership for the current assessment year as existed for the 1997 assessment
year and continue to be used for agricultural purposes;
(4) the dwelling occupied by the owner is located in Minnesota
and is within 30 miles of one of the parcels of agricultural land that is owned
by the taxpayer; and
(5) the owner notifies the county assessor that the relocation
was due to the 1997 floods, and the owner furnishes the assessor any
information deemed necessary by the assessor in verifying the change in
dwelling. Further notifications to the
assessor are not required if the property continues to meet all the
requirements in this paragraph and any dwellings on the agricultural land
remain uninhabited.
(f) Agricultural land and buildings that were class 2a
homestead property under section 273.13, subdivision 23, paragraph
(a), for the 1998 assessment shall remain classified agricultural homesteads
for subsequent assessments if:
(1) the property owner abandoned the homestead dwelling located
on the agricultural homestead as a result of damage caused by a March 29, 1998,
tornado;
(2) the property is located in the county of Blue Earth, Brown,
Cottonwood, LeSueur, Nicollet, Nobles, or Rice;
(3) the agricultural land and buildings remain under the same
ownership for the current assessment year as existed for the 1998 assessment
year;
(4) the dwelling occupied by the owner is located in this state
and is within 50 miles of one of the parcels of agricultural land that is owned
by the taxpayer; and
(5) the owner notifies the county assessor that the relocation
was due to a March 29, 1998, tornado, and the owner furnishes the assessor any
information deemed necessary by the assessor in verifying the change in
homestead dwelling. For taxes payable
in 1999, the owner must notify the assessor by December 1, 1998. Further notifications to the assessor are
not required if the property continues to meet all the requirements in this
paragraph and any dwellings on the agricultural land remain uninhabited.
(g) Agricultural property consisting of at least 40 acres of a
family farm corporation, joint family farm venture, family farm limited
liability company, or partnership operating a family farm as described under
subdivision 8 shall be classified homestead, to the same extent as other
agricultural homestead property, if all of the following criteria are met:
(1) a shareholder, member, or partner
of that entity is actively farming the agricultural property;
(2) that shareholder, member, or partner who is actively
farming the agricultural property is a Minnesota resident;
(3) neither that shareholder, member, or partner, nor the
spouse of that shareholder, member, or partner claims another agricultural
homestead in Minnesota; and
(4) that shareholder, member, or partner does not live farther
than four townships or cities, or a combination of four townships or cities,
from the agricultural property.
Homestead treatment applies under this paragraph for property
leased to a family farm corporation, joint farm venture, limited liability
company, or partnership operating a family farm if legal title to the property
is in the name of an individual who is a member, shareholder, or partner in the
entity.
(h) To be eligible for the special agricultural homestead
under this subdivision, an initial full application must be submitted to the
county assessor where the property is located. Owners and the persons who are
actively farming the property shall be required to complete only a one-page
abbreviated version of the application in each subsequent year provided that
none of the following items have changed since the initial application:
(1) the day-to-day operation, administration, and financial
risks remain the same;
(2) the owners and the persons actively farming the property
continue to live within the four townships or city criteria and are Minnesota
residents;
(3) the same operator of the agricultural property is listed
with the farm service agency;
(4) a Schedule F or equivalent income tax form was filed for
the most recent year;
(5) the property's acreage is unchanged; and
(6) none of the property's acres have been enrolled in a
federal or state farm program since the initial application.
The owners and any persons who are actively farming the
property must include the appropriate social security numbers, and sign and
date the application. If any of the
specified information has changed since the full application was filed, the
owner must notify the assessor, and must complete a new application to
determine if the property continues to qualify for the special agricultural
homestead. The commissioner of revenue
shall prepare a standard reapplication form for use by the assessors.
[EFFECTIVE DATE.] This
section is effective for applications filed for the 2004 assessment and
thereafter."
Page 17, delete section 10 and insert:
"Sec. 13.
Minnesota Statutes 2002, section 273.13, subdivision 22,
is amended to read:
Subd. 22. [CLASS 1.]
(a) Except as provided in subdivision 23 and in paragraphs (b) and (c),
real estate which is residential and used for homestead purposes is class
1a. In the case of a duplex or triplex
in which one of the units is used for homestead purposes, the entire property
is deemed to be used for homestead purposes.
The market value of class 1a property must be determined based upon the
value of the house, garage, and land.
The first $500,000 of market value of class 1a property
has a net class rate of one percent of its market value; and the market value
of class 1a property that exceeds $500,000 has a class rate of 1.25 percent of
its market value.
(b) Class 1b property includes homestead real estate or
homestead manufactured homes used for the purposes of a homestead by
(1) any blind person who is blind as defined in
section 256D.35, or the blind person and the blind person's spouse; or
(2) any person, hereinafter referred to as "veteran,"
who:
(i) served in the active military or naval service of the
United States; and
(ii) is entitled to compensation under the laws and regulations
of the United States for permanent and total service-connected disability due
to the loss, or loss of use, by reason of amputation, ankylosis, progressive
muscular dystrophies, or paralysis, of both lower extremities, such as to
preclude motion without the aid of braces, crutches, canes, or a wheelchair;
and
(iii) has acquired a special housing unit with special fixtures
or movable facilities made necessary by the nature of the veteran's disability,
or the surviving spouse of the deceased veteran for as long as the surviving
spouse retains the special housing unit as a homestead; or
(3) any person who:
(i) is permanently and totally disabled and
(ii) receives 90 percent or more of total household income,
as defined in section 290A.03, subdivision 5, from
(A) aid from any state as a result of that disability; or
(B) supplemental security income for the disabled; or
(C) workers' compensation based on a finding of total and
permanent disability; or
(D) social security disability, including the amount of a
disability insurance benefit which is converted to an old age insurance benefit
and any subsequent cost of living increases; or
(E) aid under the federal Railroad Retirement Act of 1937,
United States Code Annotated, title 45, section 228b(a)5; or
(F) a pension from any local government retirement fund
located in the state of Minnesota as a result of that disability; or
(G) pension, annuity, or other income paid as a result of
that disability from a private pension or disability plan, including employer,
employee, union, and insurance plans and
(iii) has household income as defined in
section 290A.03, subdivision 5, of $50,000 or less; or
(4) any person who is permanently and totally disabled and
whose household income as defined in section 290A.03, subdivision 5,
is 275 percent or less of the federal poverty level.
Property is classified and assessed under clause (4)
(3) only if the government agency or income-providing source certifies,
upon the request of the homestead occupant, that the homestead occupant
satisfies the disability requirements of this paragraph.
Property is classified and assessed pursuant to clause (1) only
if the commissioner of economic security revenue certifies to the
assessor that the homestead occupant satisfies the requirements of this
paragraph.
Permanently and totally disabled for the purpose of this
subdivision means a condition which is permanent in nature and totally
incapacitates the person from working at an occupation which brings the person
an income. The first $32,000 market
value of class 1b property has a net class rate of .45 percent of its market
value. The remaining market value of
class 1b property has a class rate using the rates for class 1a or class 2a
property, whichever is appropriate, of similar market value.
(c) Class 1c property is commercial use real property that
abuts a lakeshore line and is devoted to temporary and seasonal residential
occupancy for recreational purposes but not devoted to commercial purposes for
more than 250 days in the year preceding the year of assessment, and that
includes a portion used as a homestead by the owner, which includes a dwelling
occupied as a homestead by a shareholder of a corporation that owns the resort or,
a partner in a partnership that owns the resort, or a member of a limited
liability company that owns the resort even if the title to the homestead
is held by the corporation or, partnership, or limited
liability company. For purposes of
this clause, property is devoted to a commercial purpose on a specific day if
any portion of the property, excluding the portion used exclusively as a
homestead, is used for residential occupancy and a fee is charged for
residential occupancy. The first
$500,000 of market value of class 1c property has a class rate of one percent,
and the remaining market value of class 1c property has a class rate of one
percent, with the following limitation:
the area of the property must not exceed 100 feet of lakeshore footage
for each cabin or campsite located on the property up to a total of 800 feet
and 500 feet in depth, measured away from the lakeshore. If any portion of
the class 1c resort property is classified as class 4c under subdivision 25,
the entire property must meet the requirements of subdivision 25,
paragraph (d), clause (1), to qualify for class 1c treatment under this
paragraph.
(d) Class 1d property includes structures that meet all of the
following criteria:
(1) the structure is located on property that is classified as
agricultural property under section 273.13, subdivision 23;
(2) the structure is occupied exclusively by seasonal farm
workers during the time when they work on that farm, and the occupants are not
charged rent for the privilege of occupying the property, provided that use of
the structure for storage of farm equipment and produce does not disqualify the
property from classification under this paragraph;
(3) the structure meets all applicable health and safety
requirements for the appropriate season; and
(4) the structure is not salable as residential property
because it does not comply with local ordinances relating to location in
relation to streets or roads.
The market value of class 1d property has the same class rates
as class 1a property under paragraph (a).
[EFFECTIVE DATE.] This
section is effective for property taxes levied in 2003, payable in 2004, and
thereafter, except that the amendments to paragraph (b) are effective for taxes
payable in 2005 and thereafter.
Sec. 14. Minnesota
Statutes 2002, section 273.13, subdivision 23, is amended to
read:
Subd. 23. [CLASS 2.]
(a) Class 2a property is agricultural land including any improvements that is
homesteaded. The market value of the
house and garage and immediately surrounding one acre of land has the same
class rates as class 1a property under subdivision 22. The value of the remaining land including
improvements up to and including $600,000 market value has a net class rate of
0.55 percent of market value. The
remaining property over $600,000 market value has a class rate of one percent
of market value.
(b) Class 2b property is (1) real estate, rural in
character and used exclusively for growing trees for timber, lumber, and wood
and wood products; (2) real estate that is not improved with a structure and is
used exclusively for growing trees for timber, lumber, and wood and wood
products, if the owner has participated or is participating in a cost-sharing
program for afforestation, reforestation, or timber stand improvement on that
particular property, administered or coordinated by the commissioner of natural
resources; (3) real estate that is nonhomestead agricultural land; or (4) a
landing area or public access area of a privately owned public use
airport. Class 2b property has a net
class rate of one percent of market value.
(c) Agricultural land as used in this section means contiguous
acreage of ten acres or more, used during the preceding year for agricultural
purposes. "Agricultural
purposes" as used in this section means the raising or cultivation of
agricultural products.
"Agricultural purposes" also includes or enrollment
in the Reinvest in Minnesota program under sections 103F.501 to 103F.535
or the federal Conservation Reserve Program as contained in Public Law Number
99-198 if the property was classified as agricultural (i) under this
subdivision for the assessment year 2002 or (ii) in the year prior to its
enrollment. Contiguous acreage on
the same parcel, or contiguous acreage on an immediately adjacent parcel under
the same ownership, may also qualify as agricultural land, but only if it is
pasture, timber, waste, unusable wild land, or land included in state or
federal farm programs. Agricultural
classification for property shall be determined excluding the house, garage,
and immediately surrounding one acre of land, and shall not be based upon the
market value of any residential structures on the parcel or contiguous parcels
under the same ownership.
(d) Real estate, excluding the house, garage, and immediately
surrounding one acre of land, of less than ten acres which is exclusively and
intensively used for raising or cultivating agricultural products, shall be
considered as agricultural land.
Land shall be classified as agricultural even if all or a
portion of the agricultural use of that property is the leasing to, or use by
another person for agricultural purposes.
Classification under this subdivision is not determinative for
qualifying under section 273.111.
The property classification under this section supersedes, for
property tax purposes only, any locally administered agricultural policies or
land use restrictions that define minimum or maximum farm acreage.
(e) The term "agricultural products" as used in this
subdivision includes production for sale of:
(1) livestock, dairy animals, dairy products, poultry and
poultry products, fur-bearing animals, horticultural and nursery stock
described in sections 18.44 to 18.61, fruit of all kinds, vegetables,
forage, grains, bees, and apiary products by the owner;
(2) fish bred for sale and consumption if the fish breeding
occurs on land zoned for agricultural use;
(3) the commercial boarding of horses if the boarding is done
in conjunction with raising or cultivating agricultural products as defined in
clause (1);
(4) property which is owned and operated by nonprofit
organizations used for equestrian activities, excluding racing;
(5) game birds and waterfowl bred and raised for use on a
shooting preserve licensed under section 97A.115;
(6) insects primarily bred to be used as food for animals;
(7) trees, grown for sale as a crop, and not sold for timber,
lumber, wood, or wood products; and
(8) maple syrup taken from trees grown by a person
licensed by the Minnesota department of agriculture under chapter 28A as a
food processor.
(f) If a parcel used for agricultural purposes is also used for
commercial or industrial purposes, including but not limited to:
(1) wholesale and retail sales;
(2) processing of raw agricultural products or other goods;
(3) warehousing or storage of processed goods; and
(4) office facilities for the support of the activities
enumerated in clauses (1), (2), and (3),
the assessor shall classify
the part of the parcel used for agricultural purposes as class 1b, 2a, or 2b,
whichever is appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and
packaging of raw agricultural products for first sale is considered an
agricultural purpose. A greenhouse or other building where horticultural or
nursery products are grown that is also used for the conduct of retail sales
must be classified as agricultural if it is primarily used for the growing of
horticultural or nursery products from seed, cuttings, or roots and
occasionally as a showroom for the retail sale of those products. Use of a greenhouse or building only for the
display of already grown horticultural or nursery products does not qualify as
an agricultural purpose.
The assessor shall determine and list separately on the records
the market value of the homestead dwelling and the one acre of land on which
that dwelling is located. If any farm
buildings or structures are located on this homesteaded acre of land, their
market value shall not be included in this separate determination.
(g) To qualify for classification under paragraph (b), clause
(4), a privately owned public use airport must be licensed as a public airport
under section 360.018. For purposes
of paragraph (b), clause (4), "landing area" means that part of a
privately owned public use airport properly cleared, regularly maintained, and
made available to the public for use by aircraft and includes runways,
taxiways, aprons, and sites upon which are situated landing or navigational
aids. A landing area also includes land
underlying both the primary surface and the approach surfaces that comply with
all of the following:
(i) the land is properly cleared and regularly maintained for
the primary purposes of the landing, taking off, and taxiing of aircraft; but
that portion of the land that contains facilities for servicing, repair, or
maintenance of aircraft is not included as a landing area;
(ii) the land is part of the airport property; and
(iii) the land is not used for commercial or residential
purposes.
The land contained in a
landing area under paragraph (b), clause (4), must be described and certified
by the commissioner of transportation.
The certification is effective until it is modified, or until the
airport or landing area no longer meets the requirements of paragraph (b),
clause (4). For purposes of paragraph
(b), clause (4), "public access area" means property used as an
aircraft parking ramp, apron, or storage hangar, or an arrival and departure
building in connection with the airport.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 15. Minnesota
Statutes 2002, section 273.1315, is amended to read:
273.1315 [CERTIFICATION OF 1B PROPERTY.]
Any property owner seeking classification and assessment of the
owner's homestead as class 1b property pursuant to section 273.13,
subdivision 22, paragraph (b), clause (2) or (3), shall file with
the commissioner of revenue for each assessment year a 1b homestead
declaration, on a form prescribed by the commissioner. The declaration shall contain the following
information:
(a) the information necessary to verify that the property owner
or the owner's spouse satisfies the requirements of section 273.13,
subdivision 22, paragraph (b), clause (2) or (3), for 1b
classification; and
(b) the property owner's household income, as defined in
section 290A.03, for the previous calendar year; and
(c) any additional information prescribed by the
commissioner.
The declaration shall must be filed on or before March
October 1 of each year to be effective for property taxes payable
during the succeeding calendar year.
The declaration and any supplementary information received from the property
owner pursuant to this section shall be subject to chapter 270B. If approved by the commissioner, the
declaration remains in effect until the property no longer qualifies under
section 273.13, subdivision 22, paragraph (b). Failure to notify the commissioner within 30
days that the property no longer qualifies under that paragraph because of a
sale, change in occupancy, or change in the status or condition of an occupant
shall result in the penalty provided in section 273.124, subdivision 13,
computed on the basis of the class 1b benefits for the property, and the
property shall lose its current class 1b classification.
The commissioner shall provide to the assessor on or before April
November 1 a listing of the parcels of property qualifying for 1b
classification.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2005 and thereafter.
Sec. 16. [274.014]
[LOCAL BOARDS; APPEALS AND EQUALIZATION COURSE AND MEETING REQUIREMENTS.]
Subdivision 1.
[HANDBOOK FOR LOCAL BOARDS.] By no later than January 1, 2005, the
commissioner of revenue must develop a handbook detailing procedures,
responsibilities, and requirements for local boards of appeal and
equalization. The handbook must
include, but need not be limited to, the role of the local board in the
assessment process, the legal and policy reasons for fair and impartial appeal
and equalization hearings, local board meeting procedures that foster fair and
impartial assessment reviews and other best practices recommendations, quorum
requirements for local boards, and explanations of alternate methods of appeal.
Subd. 2.
[APPEALS AND EQUALIZATION COURSE.] By no later than January 1, 2006,
and each year thereafter, there must be at least one member at each meeting of
a local board of appeal and equalization who has attended an appeals and
equalization course developed or approved by the commissioner within the last
four years, as certified by the commissioner.
The course may be offered in conjunction with a meeting of the Minnesota
League of Cities or the Minnesota Association of Townships. The course content must include, but need
not be limited to, a review of the handbook developed by the commissioner under
subdivision 1.
Subd. 3. [PROOF
OF COMPLIANCE; TRANSFER OF DUTIES.] Any city or town that does not provide
proof to the county assessor by December 1, 2006, and each year thereafter,
that it is in compliance with the requirements of subdivision 2, and that
it had a quorum at each meeting of the board of appeal and equalization in the
prior year, is deemed to have transferred its board of appeal and equalization
powers to the county under section 274.01, subdivision 3, for the
following year's assessment.
The county shall notify the
taxpayers when the board of appeal and equalization for a city or town has been
transferred to the county under this subdivision and, prior to the meeting time
of the county board of equalization, the county shall make available to those
taxpayers a procedure for a review of the assessments, including, but not
limited to, open book meetings. This alternate review process shall take place
in April and May.
A local board whose powers are transferred to the county
under this subdivision may be reinstated by resolution of the governing body of
the city or town and upon proof of compliance with the requirements of
subdivision 2. The resolution and
proofs must be provided to the county assessor by December 1 in order to be
effective for the following year's assessment.
[EFFECTIVE DATE.] This
section is effective the day following final enactment."
Page 21, delete section 11 and insert:
"Sec. 17. [275.75]
[CHARTER EXEMPTION FOR AID LOSS.]
Notwithstanding any other provision of a municipal charter
that limits ad valorem taxes to a lesser amount, or that would require voter
approval for any increase, the governing body of a municipality may by
resolution increase its levy for taxes payable in 2004 and 2005 only by an
amount equal to the reduction in the amount of aid it is certified to receive
under sections 477A.011 to 477A.03 for that same payable year compared to
the amount certified for payment in 2003."
Page 22, after line 9, insert:
"Sec. 19.
Minnesota Statutes 2002, section 278.05, subdivision 6,
is amended to read:
Subd. 6. [DISMISSAL OF
PETITION; EXCLUSION OF CERTAIN EVIDENCE.] (a) Information, including income and
expense figures, verified net rentable areas, and anticipated income and
expenses, for income-producing property must be provided to the county assessor
within 60 days after the petition has been filed under this chapter no
later than 60 days after the applicable filing deadline contained in
section 278.01, subdivision 1 or 4. Failure to provide the information required in this paragraph
shall result in the dismissal of the petition, unless (1) the failure to
provide it was due to the unavailability of the evidence at that the
time that the information was due, or (2) the petitioner was not aware of or
informed of the requirement to provide the information.
If the petitioner proves
that the requirements under clause (2) are met, the petitioner has an
additional 30 days to provide the information from the time the petitioner
became aware of or was informed of the requirement to provide the information,
otherwise the petition shall be dismissed.
(b) Provided that the information as contained in paragraph (a)
is timely submitted to the county assessor, the county assessor shall furnish
the petitioner at least five days before the hearing under this chapter with
the property's appraisal, if any, which will be presented to the court at the
hearing. The petitioner shall furnish
to the county assessor at least five days before the hearing under this chapter
with the property's appraisal, if any, which will be presented to the court at
the hearing. An appraisal of the
petitioner's property done by or for the county shall not be admissible as
evidence if the county assessor does not comply with the provisions in this
paragraph. The petition shall be dismissed if the petitioner does not comply
with the provisions in this paragraph.
[EFFECTIVE DATE.] This
section is effective for petitions filed on or after July 1, 2003."
Page 27, after line 29, insert:
"Sec. 6. Minnesota
Statutes 2002, section 290.01, subdivision 19a, is amended to
read:
Subd. 19a. [ADDITIONS
TO FEDERAL TAXABLE INCOME.] For individuals, estates, and trusts, there shall
be added to federal taxable income:
(1)(i) interest income on obligations of any state other than
Minnesota or a political or governmental subdivision, municipality, or
governmental agency or instrumentality of any state other than Minnesota exempt
from federal income taxes under the Internal Revenue Code or any other federal
statute; and
(ii) exempt-interest dividends as defined in
section 852(b)(5) of the Internal Revenue Code, except the portion of the
exempt-interest dividends derived from interest income on obligations of the
state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the
portion of the exempt-interest dividends from such Minnesota sources paid to
all shareholders represents 95 percent or more of the exempt-interest dividends
that are paid by the regulated investment company as defined in
section 851(a) of the Internal Revenue Code, or the fund of the regulated
investment company as defined in section 851(g) of the Internal Revenue
Code, making the payment; and
(iii) for the purposes of items (i) and (ii), interest on
obligations of an Indian tribal government described in section 7871(c) of
the Internal Revenue Code shall be treated as interest income on obligations of
the state in which the tribe is located;
(2) the amount of income taxes paid or accrued within the
taxable year under this chapter and income taxes paid to any other state or to
any province or territory of Canada, to the extent allowed as a deduction under
section 63(d) of the Internal Revenue Code, but the addition may not be
more than the amount by which the itemized deductions as allowed under
section 63(d) of the Internal Revenue Code exceeds the amount of the
standard deduction as defined in section 63(c) of the Internal Revenue
Code. For the purpose of this
paragraph, the disallowance of itemized deductions under section 68 of the
Internal Revenue Code of 1986, income tax is the last itemized deduction
disallowed;
(3) the capital gain amount of a lump sum distribution to which
the special tax under section 1122(h)(3)(B)(ii) of the Tax Reform Act of
1986, Public Law Number 99-514, applies;
(4) the amount of income taxes paid or accrued within the
taxable year under this chapter and income taxes paid to any other state or any
province or territory of Canada, to the extent allowed as a deduction in determining
federal adjusted gross income. For the
purpose of this paragraph, income taxes do not include the taxes imposed by
sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728,
and 290.9729;
(5) the amount of expense, interest, or taxes disallowed
pursuant to section 290.10;
(6) the amount of a partner's pro rata share of net income
which does not flow through to the partner because the partnership elected to
pay the tax on the income under section 6242(a)(2) of the Internal Revenue
Code; and
(7) 80 percent of the depreciation deduction allowed under
section 168(k) of the Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity
that in the taxable year generates a deduction for depreciation under
section 168(k) and the activity generates a loss for the taxable year that
the taxpayer is not allowed to claim for the taxable year, "the
depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under
section 168(k) over the amount of the loss from the activity that is not
allowed in the taxable year. In
succeeding taxable years when the losses not allowed in the taxable year are
allowed, the depreciation under section 168(k) is allowed.
[EFFECTIVE DATE.] This
section is effective for taxable years ending after September 10, 2001."
Page 30, after line 28, insert:
"Sec. 8. Minnesota
Statutes 2002, section 290.01, subdivision 19c, is amended to
read:
Subd. 19c.
[CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE INCOME.] For corporations,
there shall be added to federal taxable income:
(1) the amount of any deduction taken for federal income tax
purposes for income, excise, or franchise taxes based on net income or related
minimum taxes, including but not limited to the tax imposed under
section 290.0922, paid by the corporation to Minnesota, another state, a
political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;
(2) interest not subject to federal tax upon obligations
of: the United States, its possessions,
its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its
municipalities, or any of its governmental agencies or instrumentalities; the
District of Columbia; or Indian tribal governments;
(3) exempt-interest dividends received as defined in
section 852(b)(5) of the Internal Revenue Code;
(4) the amount of any net operating loss deduction taken for
federal income tax purposes under section 172 or 832(c)(10) of the
Internal Revenue Code or operations loss deduction under section 810 of
the Internal Revenue Code;
(5) the amount of any special deductions taken for federal income
tax purposes under sections 241 to 247 of the Internal Revenue Code;
(6) losses from the business of mining, as defined in
section 290.05, subdivision 1, clause (a), that are not subject to
Minnesota income tax;
(7) the amount of any capital losses deducted for federal
income tax purposes under sections 1211 and 1212 of the Internal
Revenue Code;
(8) the exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal Revenue
Code;
(9) the amount of percentage depletion
deducted under sections 611 through 614 and 291 of the Internal
Revenue Code;
(10) for certified pollution control facilities placed in
service in a taxable year beginning before December 31, 1986, and for which
amortization deductions were elected under section 169 of the Internal
Revenue Code of 1954, as amended through December 31, 1985, the amount of the
amortization deduction allowed in computing federal taxable income for those
facilities;
(11) the amount of any deemed dividend from a foreign operating
corporation determined pursuant to section 290.17, subdivision 4,
paragraph (g);
(12) the amount of any environmental tax paid under
section 59(a) of the Internal Revenue Code;
(13) the amount of a partner's pro rata share of net income
which does not flow through to the partner because the partnership elected to
pay the tax on the income under section 6242(a)(2) of the Internal Revenue
Code;
(14) the amount of net income
excluded under section 114 of the Internal Revenue Code;
(15) any increase in subpart F income, as defined in
section 952(a) of the Internal Revenue Code, for the taxable year when
subpart F income is calculated without regard to the provisions of
section 614 of Public Law Number 107-147; and
(16) 80 percent of the depreciation deduction allowed under
section 168(k) of the Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity
that in the taxable year generates a deduction for depreciation under
section 168(k) and the activity generates a loss for the taxable year that
the taxpayer is not allowed to claim for the taxable year, "the
depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under
section 168(k) over the amount of the loss from the activity that is not
allowed in the taxable year. In
succeeding taxable years when the losses not allowed in the taxable year are
allowed, the depreciation under section 168(k) is allowed.
[EFFECTIVE DATE.] This
section is effective for taxable years ending after September 10, 2001."
Page 102, after line 9, insert:
"Sec. 49.
[PRE-1940 HOUSING PERCENTAGE.]
For the purposes of determining local government aid payment
amounts for aids payable in 2003, the "pre-1940 housing percentage"
factor shall be based upon the 1990 federal census, notwithstanding Minnesota
Statutes 2002, section 477A.011, subdivision 30.
[EFFECTIVE DATE.] This
section is effective for aids payable in 2003 only."
Page 103, after line 3, insert:
"Sec. 2. Minnesota
Statutes 2002, section 289A.60, subdivision 15, is amended to
read:
Subd. 15. [ACCELERATED
PAYMENT OF JUNE SALES TAX LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is
required by law to submit an estimation of June sales tax liabilities and 62
75 percent payment by a certain date, the vendor shall pay a penalty
equal to ten percent of the amount of actual June liability required to be paid
in June less the amount remitted in June.
The penalty must not be imposed, however, if the amount remitted in June
equals the lesser of 62 75 percent of the preceding May's
liability or 62 75 percent of the average monthly liability for
the previous calendar year.
[EFFECTIVE DATE.] This
section is effective for payments due after December 31, 2002."
Pages 137 to 172, delete article 9 and insert:
"ARTICLE
9
CENTRAL
LAKES REGION SANITARY DISTRICT
Section 1.
[DEFINITIONS.]
Subdivision 1.
[APPLICATION.] The terms defined in this section shall have the
meaning given them unless otherwise provided or indicated by the context.
Subd. 2. [ACQUISITION AND BETTERMENT.] "Acquisition"
and "betterment" shall have the meanings given them in Minnesota
Statutes, section 475.51.
Subd. 3.
[AGENCY.] "Agency" means the Minnesota pollution control
agency created and established by Minnesota Statutes, chapter 116.
Subd. 4.
[AGRICULTURAL PROPERTY.] "Agricultural property" means land
as is classified agricultural land within the meaning of Minnesota Statutes,
section 273.13, subdivision 23.
Subd. 5.
[CURRENT COSTS OF ACQUISITION, BETTERMENT, AND DEBT SERVICE.] "Current
costs of acquisition, betterment, and debt service" means interest and
principal estimated to be due during the budget year on bonds issued to finance
the acquisition and betterment and all other costs of acquisition and
betterment estimated to be paid during the budget year from funds other than
bond proceeds and federal or state grants.
Subd. 6.
[DISTRICT DISPOSAL SYSTEM.] "District disposal system" means
any and all of the interceptors or treatment works owned, constructed, or
operated by the board unless designated by the board as local sanitary sewer
facilities.
Subd. 7.
[CENTRAL LAKES REGION SANITARY DISTRICT AND DISTRICT.] "Central
Lakes Region Sanitary District" and "district" mean the area
over which the sanitary sewer board has jurisdiction, including those parts of
the Douglas county townships of Carlos, Brandon, La Grand, Leaf Valley,
Miltona, and Moe, as more particularly described by metes and bounds in the
comprehensive plan adopted under section 4.
Subd. 8.
[INTERCEPTOR.] "Interceptor" means any sewer and necessary
appurtenances to it, including but not limited to, mains, pumping stations, and
sewage flow regulating and measuring stations, that is designed for or used to
conduct sewage originating in more than one local government unit, or that is
designed or used to conduct all or substantially all the sewage originating in
a single local government unit from a point of collection in that unit to an
interceptor or treatment works outside that unit, or that is determined by the
board to be a major collector of sewage used or designed to serve a substantial
area in the district.
Subd. 9. [LOCAL
GOVERNMENT UNIT OR GOVERNMENT UNIT.] "Local government unit" or
"government unit" means any municipal or public corporation or
governmental or political subdivision or agency located in whole or in part in
the district, authorized by law to provide for the collection and disposal of
sewage.
Subd. 10. [LOCAL
SANITARY SEWER FACILITIES.] "Local sanitary sewer facilities"
means all or any part of any disposal system in the district other than the
district disposal system.
Subd. 11.
[MUNICIPALITY.] "Municipality" means any statutory or home
rule charter city or town located in whole or in part in the district.
Subd. 12.
[PERSON.] "Person" means any individual, partnership,
corporation, limited liability company, cooperative, or other organization or
entity, public or private.
Subd. 13.
[POLLUTION AND SEWER SYSTEM.] "Pollution" and "sewer
system" have the meanings given them in Minnesota Statutes,
section 115.01.
Subd. 14.
[SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer board" or
"board" means the sanitary sewer board established for the Central
Lakes Region Sanitary District as provided in section 2.
Subd. 15.
[SEWAGE.] "Sewage" means all liquid or water-carried waste
products from whatever sources derived, together with the groundwater
infiltration and surface water that may be present.
Subd. 16.
[TOTAL COSTS OF ACQUISITION AND BETTERMENT AND COSTS OF ACQUISITION AND
BETTERMENT.] "Total costs of acquisition and betterment" and
"costs of acquisition and betterment" mean all acquisition and
betterment expenses that are permitted to be financed out of bond proceeds
issued in accordance with section 12, subdivision 4, whether or not
the expenses are in fact financed out of the bond proceeds.
Subd. 17.
[TREATMENT WORKS AND DISPOSAL SYSTEM.] "Treatment works"
and "disposal system" have the meanings given them in Minnesota
Statutes, section 115.01.
Sec. 2. [SANITARY SEWER
BOARD.]
Subdivision 1.
[ESTABLISHMENT.] A sanitary sewer board with jurisdiction in the
Central Lakes Region Sanitary District is established as a public corporation
and political subdivision of the state with perpetual succession and all the
rights, powers, privileges, immunities, and duties that may be validly granted
to or imposed upon a municipal corporation, as provided in this article.
Subd. 2. [MEMBERS AND SELECTION.] The number of board members and method
by which they are selected is as follows: The governing body of any
municipality located in whole or part within the district must each separately
select one member. Upon the board's ordering of a project to construct a
sanitary sewer, the governing body of any municipality must appoint one
additional member for each full 800 special assessments included in the ordered
project to be levied against property located in the municipality. The term of each member is subject to the
approval of the voting members of the city council or town board.
Subd. 3. [TIME
LIMIT; ALTERNATIVE APPOINTMENT.] The initial board members must be selected
as provided in subdivision 2 within 60 days after this article is
effective. A successor must be selected
at any time within 60 days before the expiration of the predecessor's term in
the same manner as the predecessor was selected. Any vacancy on the board must be filled within 60 days after it
occurs. If a selection is not made as
provided within the time prescribed, the chief judge of the seventh judicial
district of the Minnesota district court, on application by any interested
person, shall appoint an eligible person to the board.
Subd. 4.
[VACANCIES.] If the office of any board member becomes vacant, the
vacancy shall be filled for the unexpired term in the manner as provided for
selection of the member who vacated the office. The office shall be deemed vacant under the conditions specified
in Minnesota Statutes, section 351.02.
Subd. 5. [TERMS
OF OFFICE.] The terms of all board members shall be for one, two, three, or
four calendar years to be determined in accordance with subdivision 2 by
the governing body selecting such member.
Terms shall expire on January 1 of a calendar year, except that each
member shall serve until a successor has been duly selected and qualified.
Subd. 6.
[REMOVAL.] A board member may be removed by the unanimous vote of the
appointing governing body with or without cause.
Subd. 7.
[QUALIFICATIONS.] Each board member may, but need not be a resident
of the district and may, but need not be an elected public official.
Subd. 8.
[CERTIFICATES OF SELECTION; OATH OF OFFICE.] A certificate of
selection to a seat of every board member, stating the seat's term, must be
made by the respective municipal clerk.
The certificate, with the approval attached by other authority, if
required, must be filed with the secretary of state. A copy must be furnished to the board member and the secretary of
the board. Each member must qualify by
taking and subscribing to the oath of office prescribed by the Minnesota
Constitution, article V, section 6.
The oath, duly certified by the official administering the same, must be
filed with the secretary of state and the secretary of the board.
Subd. 9.
[COMPENSATION OF BOARD MEMBERS.] Each board member may be paid a per
diem compensation to attend meetings and for other services in an amount as may
be specifically authorized by the board from time to time. Per diem compensation must not exceed $4,000
for any member in any one year. All
members of the board may be reimbursed for all reasonable expenses incurred in
the performance of their duties as determined by the board.
Sec. 3. [GENERAL
PROVISION FOR ORGANIZATION AND OPERATION OF BOARD.]
Subdivision 1.
[OFFICERS MEETINGS; SEAL.] A majority of the members is a quorum at
all meetings of the board, but a lesser number may meet and adjourn from time
to time and compel the attendance of absent members. The board must meet regularly at the time and place as the board
by resolution designates. Special meetings may be held at any time upon call of
the chair or any two members, upon written notice sent by mail to each member
at least three days before the meeting, or upon the notice as the board by
resolution may provide, or without notice if each member is present or files
with the secretary a written consent to the meeting either before or after the
meeting. Except as otherwise provided in this article, any action within the
authority of the board may be taken by the affirmative vote of a majority of
the board at a regular or adjourned regular meeting or at a duly held special
meeting, but in any case only if a quorum is present. All meetings of the board must be open to the public as provided
in Minnesota Statutes, chapter 13D.
Subd. 2.
[CHAIR.] The board must elect a chair from its membership. The term of the chair expires on January 1
of each year. The chair presides at all
meetings of the board, if present, and must perform all other duties and
functions usually incumbent upon the officer, and all administrative functions
assigned to the chair by the board. The
board must elect a vice-chair from its membership to act for the chair during a
temporary absence or disability.
Subd. 3.
[SECRETARY AND TREASURER.] The board must select one or more persons
who may, but need not be a member of the board, to act as its secretary and
treasurer. The secretary and treasurer
hold office at the pleasure of the board, subject to the terms of any contract
of employment that the board may enter into with the secretary or
treasurer. The secretary must record
the minutes of all meetings of the board, and is custodian of all books and
records of the board except those the board entrusts to the custody of a
designated employee. The board may
appoint a deputy to perform any and all functions of either the secretary or
the treasurer. A secretary or treasurer
or a deputy of either who is not a member of the board shall not have any right
to vote.
Subd. 4.
[GENERAL MANAGER.] The board may appoint a general manager who shall
be selected solely upon the basis of training, experience, and other
qualifications. The general manager
serves at the pleasure of the board and at a compensation to be determined by
the board. The general manager need not
be a resident of the district and may also be selected by the board to serve as
either secretary or treasurer, or both, of the board. The general manager must attend all meetings of the board but
must not vote. The general manager
must:
(1) see that all resolutions, rules, regulations, or orders
of the board are enforced;
(2) appoint and remove, upon the basis of merit and fitness,
all subordinate officers and regular employees of the board except the
secretary and the treasurer and their deputies;
(3) present to the board plans, studies, and other reports
prepared for board purposes and recommend to the board for adoption such
measures as the general manager considers necessary to enforce or carry out the
powers and duties of the board, or for the efficient administration of the
affairs of the board;
(4) keep the board fully advised as to its financial
condition, and prepare and submit to the board, and to the governing bodies of
the local government units, the board's annual budget and other financial
information the board requests;
(5) recommend to the board for adoption rules
recommended as necessary for the efficient operation of a district disposal
system and all local sanitary sewer facilities over which the board may assume
responsibility as provided in section 17; and
(6) perform other duties as may be prescribed by the board.
Subd. 5. [PUBLIC
EMPLOYEES.] The general manager and all persons employed by the general
manager and public employees, and have all the rights and duties conferred on
public employees under the Minnesota Public Employment Labor Relations
Act. The compensation and conditions of
employment of the employees is not governed by any rule applicable to state
employees in the classified service or by Minnesota Statutes, chapter 15A,
except as specifically authorized by law.
Subd. 6.
[PROCEDURES.] The board must adopt resolutions or bylaws establishing
procedures for board action, personnel administration, record keeping,
investment policy, approving claims, authorizing or making disbursements,
safekeeping funds, and audit of all financial operations of the board.
Subd. 7. [SURETY
BONDS AND INSURANCE.] The board may procure surety bonds for its officers
and employees in such amounts as are considered necessary to assure proper
performance of their duties and proper accounting for funds in their custody.
It may buy insurance against risks to property and liability of the board and
its officers, agents, and employees for personal injuries or death and property
damage and destruction in the amounts as it considers necessary or desirable,
with the force and effect stated in Minnesota Statutes, chapter 466.
Sec. 4. [COMPREHENSIVE
PLAN.]
Subdivision 1.
[BOARD PLAN AND PROGRAM.] The board shall adopt a comprehensive plan
for the collection, treatment, and disposal of sewage in the district for
designated periods that the board considers proper and reasonable. The board must prepare and adopt subsequent
comprehensive plans for the collection, treatment, and disposal of sewage in
the district for each succeeding designated period as the board considers
proper and reasonable. The plan must
take into account the preservation and best and most economic use of water and
other natural resources in the area; the preservation, use, and potential for
use of lands adjoining waters of the state to be used for the disposal of
sewage; and the impact such a disposal system will have on present and future
land use in the affected area. The
plans shall include the following:
(1) the exact legal description of the boundaries of the
district;
(2) the general location of needed interceptors and
treatment works;
(3) a description of the area that is to be served by the
various interceptors and treatment works;
(4) a long-range capital improvements program; and
(5) such other details as the board deems appropriate.
In developing the plans, the
board shall consult with persons designated by the governing bodies of any
municipal or public corporation or governmental or political subdivision
or agency within or without the district to represent such entities and shall
consider the data, resources, and input offered to the board by such entities
and any planning agency acting on behalf of one or more such entities. Each plan, when adopted, must be followed in
the district and may be revised as often as the board considers necessary.
Subd. 2.
[REPORT TO DOUGLAS COUNTY.] Upon adoption of any comprehensive plan
that establishes or reestablishes the boundaries of the district, the board
must supply the appropriate Douglas county offices with the boundaries of the
district.
Subd. 3.
[COMPREHENSIVE PLANS; HEARING.] Before adopting any later
comprehensive plan, the board must hold a public hearing on the proposed plan
at the time and place in the district it determines. The hearing may be continued from time to time. Not less than 45 days before the hearing,
the board must publish notice of it in a newspaper or newspapers having general
circulation in the district stating the date, time, and place of the hearing,
and the place where the proposed plan may be examined by any interested
person. At the hearing, all interested
persons must be permitted to present their views on the plan.
Subd. 4.
[MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH BOARD'S
RESPONSIBILITIES.] Before undertaking the construction of new sewers or
other disposal facilities or the substantial alteration or improvement of any
existing sewers or other disposal facilities, each local government unit may,
and must if the construction or alteration of any sewage disposal facilities is
contemplated by the government unit, adopt a comprehensive plan and program for
the collection, treatment, and disposal of sewage for which the local
government unit is responsible, coordinated with the board's comprehensive
plan, and may revise the plan as often as deemed necessary. Each local plan or revision must be submitted
to the board for review and is subject to the approval of the board as to those
features of the plan affecting the board's responsibilities as determined by
the board. Any features disapproved by
the board must be modified in accordance with the board's recommendations. No construction project involving those
features may be undertaken by the local government unit unless its governing
body first finds the project to be in accordance with the government unit's comprehensive
plan and program as approved by the board.
Before approval by the board of the comprehensive plan and program of
any local government unit in the district, no construction project may be
undertaken by the government unit unless approval of the project is first
gotten from the board as to those features of the project affecting the board's
responsibilities as determined by the board.
Sec. 5. [SEWER SERVICE
FUNCTION.]
Subdivision 1.
[DUTY OF BOARD; ACQUISITION OF EXISTING FACILITIES; NEW FACILITIES.] At
any time after the board has become organized, it must assume ownership of all
existing interceptors and treatment works that are needed to implement the
board's comprehensive plan for the collection, treatment, and disposal of
sewage in the district, in the manner and subject to the conditions prescribed
in subdivision 2, and must design, acquire, construct, better, equip,
operate, and maintain all additional interceptors and treatment works that will
be needed for this purpose. The board
must assume ownership of all treatment works owned by a local government unit
if any part of those treatment works are so needed.
Subd. 2. [METHOD
OF ACQUISITION; EXISTING DEBT.] The board may require any local government
unit to transfer to the board all of its right, title, and interest in any
interceptors or treatment works and all necessary appurtenances to them owned
by the local government unit that will be needed for the purpose stated in
subdivision 1. Appropriate
instruments of conveyance for all the property must be executed and delivered
to the board by the proper officers of each local government unit concerned.
The board, upon assuming ownership of any of the interceptors or treatment
works, is obligated to pay to the local government unit amounts sufficient to
pay, when due, all remaining principal of and interest on bonds issued by the
local government unit for the acquisition or betterment of the interceptors or
treatment works. The board must also
assume the same obligation with respect to any other existing disposal system
owned by a local government unit that the board determines to have been
replaced or rendered useless by the district disposal system. The amounts to be paid under this
subdivision may be offset against any amount to be paid to the board by the
local government unit as provided in section 8. The board is not obligated
to pay the local government unit anything in addition to the assumption of debt
provided for in this subdivision.
Subd. 3. [EXISTING JOINT POWERS BOARD.] Effective
December 31, 2004, or an earlier date as determined by the board, the corporate
existence of the joint powers board created by agreement among local government
units under Minnesota Statutes, section 471.59, to provide the financing,
acquisition, construction, improvement, extension, operation, and maintenance
of facilities for the collection, treatment, and disposal of sewage is
terminated. All persons regularly
employed by the joint powers board on that date become employees of the board,
and may at their option become members of the retirement system applicable to
persons employed directly by the board or may continue as members of a public
retirement association under any other law, to which they belonged before that
date, and retain all pension rights that they may have the other law and all
other rights to which they are entitled by contract or law. The board must make the employer's
contributions to pension funds of its employees. The employees must perform duties as may be prescribed by the
board. On December 31, 2004, or the
earlier date, all funds of the joint powers board and all later collections of
taxes, special assessments, or service charges, or any other sums due the joint
powers board, or levied or imposed by or for the joint powers board, must be
transferred to or made payable to the sanitary sewer board and the county
auditor must remit the sums to the board.
The local government units otherwise entitled to the cash, taxes,
assessments, or service charges must be credited with the amounts, and the
credits must be offset against any amounts to be paid by them to the board as
provided in section 8. On December
31, 2004, or the earlier chosen date, the board shall succeed to and become
vested with all right, title, and interest in and to any property, real or
personal, owned or operated by the joint powers board. Before that date, the proper officers of the
joint powers board must execute and deliver to the sanitary sewer board all
deeds, conveyances, bills of sale, and other documents or instruments required
to vest in the board good and marketable title to all the real or personal
property, but this article operates as the transfer and conveyance to the board
of the real or personal property, if not transferred, as may be required under
the law or under the circumstances. On
December 31, 2004, or the earlier chosen date, the board is obligated to pay or
assume all outstanding bonds or other debt and all contracts or obligations
incurred by the joint powers board, and all bonds, obligations, or debts of the
joint powers board outstanding on the date this article is effective, are
validated.
Subd. 4.
[CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The board may terminate,
upon 60 days' mailed notice to the contracting parties, any existing contract
between or among local government units requiring payments by a local
government unit to any other local government unit for the use of a disposal
system, or as reimbursement of capital costs of a disposal system, all or part
of which are needed to implement the board's comprehensive plan. All contracts between or among local
government units for use of a disposal system entered into after the date on
which this article becomes effective must be submitted to the board for
approval as to those features affecting the board's responsibilities as
determined by the board and are not effective until the approval is given.
Sec. 6. [SEWAGE
COLLECTION AND DISPOSAL; POWERS.]
Subdivision 1.
[POWERS.] In addition to all other powers conferred upon the board in
this article, the board has the powers specified in this section.
Subd. 2.
[DISCHARGE OF TREATED SEWAGE.] The board may discharge the effluent
from any treatment works operated by it into any waters of the state, subject
to approval of the agency if required and in accordance with any effluent or
water quality standards lawfully adopted by the agency, any interstate agency,
or any federal agency having jurisdiction.
Subd. 3. [USE OF
DISTRICT SYSTEM.] The board may require any person or local government unit
to provide for the discharge of any sewage, directly or indirectly, into the
district disposal system, or to connect any disposal system or a part of it
with the district disposal system wherever reasonable opportunity is provided;
may regulate the manner in which the connections are made; may require any
person or local government unit discharging sewage into the disposal system to
provide preliminary treatment for it; may prohibit the discharge into the
district disposal system of any substance it determines will or may be harmful
to the system or any persons operating it; may prohibit any extraneous flow
into the system; and may require any local government unit to discontinue the
acquisition, betterment, or operation of any facility for the unit's disposal
system wherever and so far as adequate service is or will be provided by the
district disposal system.
Sec. 7. [BUDGET.]
Except as otherwise specifically provided in this article,
the board is subject to Minnesota Statutes, section 275.065. The board
shall prepare and adopt, on or before September 15 of each year, a budget
showing for the following calendar year or other fiscal year determined by the
board, sometimes referred to in this article as the budget year, estimated
receipts of money from all sources, including but not limited to, payments by
each local government unit, federal or state grants, taxes on property, and
funds on hand at the beginning of the year, and estimated expenditures for:
(1) costs of operation, administration, and maintenance of
the district disposal system;
(2) cost acquisition and betterment of the district disposal
system; and
(3) debt service, including principal and interest, on
general obligation bonds and certificates issued under section 12,
obligations and debts assumed under section 5, subdivisions 2
and 3, and any money judgments entered by a court of competent
jurisdiction. Expenditures within these
general categories, and others that the board may from time to time determine,
must be itemized in the detail the board prescribes. The board and its officers, agents, and employees must not spend
money for any purpose other than debt service without having set forth the
expense in the budget, nor may they spend in excess of the amount in the
budget, and an excess expenditure or one for an unauthorized purpose is
enforceable except as the obligation of the person incurring it; but the board
may amend the budget at any time by transferring from one budgetary purpose to
another any sums, except money for debt service and bond proceeds, or by
increasing expenditures in any amount by which cash receipts during the budget
year actually exceed the total amounts designated in the original budget. The creation of any obligation pursuant to
section 12 or the receipts of any federal or state grant is a sufficient
budget designation of the proceeds for the purpose for which it is authorized,
and of the tax or other revenue pledged to pay the obligation and interest on
it, whether or not specifically included in any annual budget.
Sec. 8. [ALLOCATION OF
COSTS.]
Subdivision 1.
[DEFINITION OF CURRENT COSTS.] The estimated cost of administration,
operation, maintenance, and debt service of the district disposal system to be
paid by the board in each fiscal year and the estimated costs of acquisition
and betterment of the system that are to be paid during the year from funds
other than state or federal grants and bond proceeds and all other previously
unallocated payments made by the board under this article in the fiscal year are
referred to as current costs.
Subd. 2.
[COLLECTION OF CURRENT COSTS.] Current costs shall be collected as
described in paragraphs (a) and (b).
(a) Current costs may be allocated to local government units
in the district on an equitable basis as the board may from time to time
determine by resolution to be fair and reasonable and in the best interests of
the district. In making the allocation,
the board may provide for the deferment of payment of all or part of current
costs, the reallocation of deferred costs, and the reimbursement of reallocated
deferred costs on an equitable basis as the board may from time to time
determine by resolution to be fair and reasonable and in the best interests of
the district. The adoption or revision
of a method of allocation, deferment, reallocation, or reimbursement used by
the board shall be made by the affirmative vote of at least two-thirds of the
members of the board.
(b) Upon approval of at least two-thirds of the members of
the board, the board may provide for direct collection of current costs by
monthly or other periodic billing of sewer users.
Sec. 9. [GOVERNMENT UNITS; PAYMENTS TO BOARD.]
Subdivision 1.
[OBLIGATIONS OF GOVERNMENT UNITS TO THE BOARD.] Each government unit
must pay to the board all sums charged to it as provided in section 8, at
the times and in the manner determined by the board. The governing body of each government unit must take all action
necessary to provide the funds required for the payments and to make the
payments when due.
Subd. 2.
[AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges payable to the board by
local government units may be made payable at the times during each year as the
board determines, after it has taken into account the dates on which taxes,
assessments, revenue collections, and other funds become available to the
government unit required to pay such charges.
Subd. 3.
[GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX LEVIES.] To accomplish
any duty imposed on it by the board, the governing body of every government
unit may, in addition to the powers granted in this article and in any other
law or charter, exercise the powers granted any municipality by Minnesota
Statutes, chapters 117, 412, 429, and 475, and sections 115.46,
444.075, and 471.59, with respect to the area of the government unit
located in the district. In addition,
the governing body of every government unit located in whole or in part within
the district may levy taxes upon all taxable property in that part of the
government unit located in this district for all or a part of the amount
payable to the board. If the levy is
for only part of the amount payable to the board, the governing body of the
government unit may levy additional taxes on the entire net tax capacity of all
taxable property of the government unit for all or a part of the balance
remaining payable. The taxes levied
under this subdivision must be assessed and extended as a tax upon the taxable
property by the county auditor for the next calendar year, free from any limit
of rate or amount imposed by law or charter.
The tax must be collected and remitted in the same manner as other
general taxes of the government unit.
Subd. 4.
[ALTERNATE LEVY.] Instead of levying taxes on all taxable property
under subdivision 3, the governing body of the government unit may elect
to levy taxes upon the net tax capacity of all taxable property, except
agricultural property, and upon only 25 percent of the net tax capacity of all
agricultural property, in that part of the government unit located in the
district for all or a part of the amount payable to the board. If the levy is for only part of the amount
payable to the board, the governing body may levy additional taxes on the
entire net tax capacity of all the property, including agricultural property,
for all or a part of the balance. The
taxes must be assessed and extended as a tax upon the taxable property by the
county auditor for the next calendar year, free from any limit of rate or
amount imposed by law or charter, and must be collected and remitted in the
same manner as other general taxes of the government unit. In computing the tax capacity under this
subdivision, the county auditor must include only 25 percent of the net tax
capacity of all taxable agricultural property and 100 percent of the net
tax capacity of all other taxable property in that part of the government unit
located within the district and, in spreading the levy, the auditor must apply
the tax rate upon the same percentages of agricultural and nonagricultural taxable
property. If the government unit elects
to levy taxes under this subdivision and any of the taxable agricultural
property is reclassified so as to no longer qualify as agricultural property,
it is subject to additional taxes. The
additional taxes must be in an amount which, together with any additional taxes
previously levied and the estimated collection of additional taxes subsequently
levied on any other reclassified property, is determined by the governing body
of the government unit to be at least sufficient to reimburse each other
government unit for any excess current costs reallocated to it as a result of
the board deferring any current cost under section 8 on account of the
difference between the amount of the current costs initially allocated to each
government unit based on the total net tax capacity of all taxable property in
the district and the amount of the current costs reallocated to each government
unit based on 25 percent of the net tax capacity of agricultural property
and 100 percent of the net tax capacity of all other taxable property in
the district. Any reimbursement must be
made on terms which the board determines to be just and reasonable. These additional taxes may be levied in any
greater amount as the governing body of the government unit determines to be
appropriate, but the total amount of the additional taxes must not exceed the
difference between:
(1) the total amount of taxes that
would have been levied upon the reclassified property to help pay current costs
charged in each year to the government unit by the board if that part of the
costs, if any, initially allocated by the board solely on the basis of 100
percent of the net tax capacity of all taxable property in the district and
then reallocated on the basis of inclusion of only 25 percent of the net tax
capacity of agricultural property in the district was not reallocated and if
the amount of taxes levied by the government unit each year under this
subdivision to pay current costs had been based on the initial allocation and
had been imposed upon 100 percent of the net tax capacity of all taxable
property, including agricultural property, in that part of the government unit
located in the district; and
(2) the amount of taxes levied each year under this subdivision
upon reclassified property, plus interest on the cumulative amount of the
difference accruing each year at the approximate average annual rate borne by
bonds issued by the board and outstanding at the beginning of the year or, if
no bonds are then outstanding, at a rate of interest which may be determined by
the board, but not exceeding the maximum rate of interest that may then be paid
on bonds issued by the board. The additional taxes are a lien upon the
reclassified property assessed in the same manner and for the same duration as
all other ad valorem taxes levied upon the property. The additional taxes must be extended against the reclassified
property on the tax list for the current year and must be collected and
remitted in the same manner as other general taxes of the government unit. No penalties or additional interest may be
levied on the additional taxes if timely paid.
Subd. 5. [DEBT
LIMIT.] Any ad valorem taxes levied under subdivision 3, by the
governing body of a government unit to pay any sums charged to it by the board
pursuant to this article are not subject to, or counted toward, any limit
imposed by law on the levy of taxes upon taxable property within any
governmental unit.
Subd. 6.
[DEFICIENCY TAX LEVIES.] If the local government unit fails to make a
payment to the board when due, the board may certify to the Douglas county
auditor the amount required for payment, with interest at not more than the
maximum rate per year authorized at that time on assessments under Minnesota Statutes,
section 429.061, subdivision 2.
The auditor must levy and extend the amount as a tax upon all taxable
property in that part of the government unit located in the district, for the
next calendar year, free from any limits imposed by law or charter. The tax must be collected in the same manner
as other general taxes of the government unit, and the proceeds, when
collected, shall be paid by the county treasurer to the treasurer of the board
and credited to the government unit for which the tax was levied.
Sec. 10. [PUBLIC
HEARING AND SPECIAL ASSESSMENTS.]
Subdivision 1.
[PUBLIC HEARING REQUIREMENT ON SPECIFIC PROJECT.] Before the board
orders any project involving the acquisition or betterment of any interceptor
or treatment works, all or a part of the cost of which will be allocated to
local government units under section 8 as current costs, the board must
hold a public hearing on the proposed project following two publications in a
newspaper or newspapers having general circulation in the district, stating the
time and place of the hearing, the general nature and location of the project,
the estimated total cost of acquisition and betterment, that portion of costs
estimated to be paid out of federal and state grants, and that portion of costs
estimated to be allocated to each local government unit affected. The two publications must be a week apart
and the hearing must be at least three days after the last publication. Not less than 45 days before the hearing,
notice must also be mailed to each clerk of all local government units in the
district, but failure to give mailed notice of any defects in the notice does
not invalidate the proceedings. The
project may include all or part of one or more interceptors or treatment
works. A hearing is not required with
respect to a project, no part of the costs of which are to be allocated to
local government units as the current cost of acquisition, betterment, and debt
service.
Subd. 2. [NOTICE
TO BENEFITED PROPERTY OWNERS.] If the governing body of a local government
unit in the district proposes to assess against benefited property within
units, all or any part of the allocable costs of the project as provided in
subdivision 5, the governing body must, not less than ten days before the
hearing provided for in subdivision 1 mail a notice of the hearing to the
owner of each parcel within the area proposed to be specially assessed and must
also give one week's published notice of the hearing. The notice of hearing must contain the same
information provided in the notice published by the board under
subdivision 1, and in addition, a description of the area proposed to be
assessed by the local government unit. To give mailed notice, owners must be
those shown to be on the records of the county auditor or, in a county where
tax statements are mailed by the county treasurer, on the records of the county
treasurer; but other appropriate records may be used for this purpose. However, for properties that are tax exempt
or subject to taxation on a gross earnings basis and are not listed on the
records of the county auditor or the county treasurer, the owners may be
ascertained by any practicable means and mailed notice must be given to
them. Failure to give mailed notice or
any defects in the notice does not invalidate the proceedings of the board or
the local governing body.
Subd. 3. [BOARD
PROCEEDINGS PERTAINING TO HEARING.] Before adoption of the resolution
calling for the hearing, the board shall get from the district engineer, or
other competent person of the board's selection, a preliminary report advising
whether the proposed project is feasible, necessary, and cost-effective, and
whether it should best be made as proposed or in connection with another
project, and the estimated costs of the project as recommended. No error or omission in the report
invalidates the proceeding. The board
may also take steps before the hearing that will, in its judgment, provide
helpful information in determining the desirability and feasibility of the
project including, but not limited to, preparation of plans and specifications
and advertisement for bids. The hearing
may be adjourned from time to time and a resolution ordering the project may be
adopted at any time within six months after the date of hearing. In ordering the project, the board may
reduce but not increase the extent of the project as stated in the notice of
hearing, unless another hearing is held, and must find that the project as
ordered is in accordance with the comprehensive plan and program adopted by the
board under section 4.
Subd. 4.
[EMERGENCY ACTION.] If the board by resolution adopted by the
affirmative vote of not less than two-thirds of its members determines that an
emergency exists requiring the immediate purchase of materials or supplies or
the making of emergency repairs, it may order the purchase of the supplies and
materials and the making of the repairs before any hearing required under this
section. But the board must set as
early a date as practicable for that hearing at the time it declares the
emergency. All other provisions of this
section must be followed in giving notice of and conducting a hearing. This subdivision does not prevent the board
or its agents from purchasing maintenance supplies or incurring maintenance costs
without regard to the requirements of this section.
Subd. 5. [POWER
OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A local government unit may
specially assess all or part of the costs of acquisition and betterment of any
project ordered by the board under this section. A special assessment must be levied in accordance with Minnesota
Statutes, sections 429.051 to 429.081, except as otherwise provided in
this subdivision. No other provisions of Minnesota Statutes, chapter 429,
apply. For purposes of levying special assessments, the hearing on the project
required in subdivision 1 must serve as the hearing on the making of the
original improvement provided for by Minnesota Statutes,
section 429.051. The area assessed
may be less than but must not exceed the area proposed to be assessed as stated
in the notice of hearing on the project provided for in
subdivision 2. To determine the
allocable cost of the project to the local government units, the government
unit may adopt one of the procedures in paragraph (a) or (b).
(a) At any time after a contract is let for the project, the
local government unit may get from the board a current written estimate, on the
basis of historical and reasonably projected data, of that part of the total
cost of acquisition and betterment of the project or of some part of the
project that will be allocated to the local government unit and the number of
years over which such costs will be allocated as current costs of acquisition,
betterment, and debt service under section 8. The board is not bound by this estimate for allocating the costs
of the project to local government units.
(b) The governing body may get from the board a written
statement showing, for the prior period that the governing body designates,
that part of the costs previously allocated to the local government unit as
current costs of acquisition, betterment, and debt service only, of all or any
part of the project designated by the governing body. In addition to the allocable costs, the local government unit may
include in the total expense, as a basis for levying assessments, all other
expenses incurred directly by the local government unit in connection with the
project. Special assessments levied by
the government unit with respect to previously allocated costs ascertained
under this paragraph are payable in equal annual installments extending over a
period not exceeding by more than one year the number of years that the costs
have been allocated to the local government unit or the estimated useful life
of the project, or part of the project, whichever number of years is the
lesser. No limit is placed on the
number of times the governing body of a local government unit may assess the
previously allocated costs not previously assessed by the government unit. The power to specially assess provided for in
this section is in addition and supplemental to all other powers of local
government units to levy special assessments.
Sec. 11. [INITIAL
COSTS.]
Subdivision 1.
[CONTRIBUTIONS OR ADVANCES FROM LOCAL GOVERNMENT UNITS.] The board
may, at the time it considers necessary and proper, request from a local
government unit necessary money to defray the costs of any obligations assumed
under section 5 and the costs of administration, operation, and
maintenance. Before making a request,
the board must, by formal resolution, determine the necessity for the money,
setting forth the purposes for which the money is needed and the estimated
amount for each purpose. Upon receiving
a request, the governing body of each local government unit may provide for
payment of the amount requested as it considers fair and reasonable. The money may be paid out of general revenue
funds or any other available funds of any local government unit and its
governing body thereof may levy taxes to provide funds, free from any existing
limit imposed by law or charter. Money
may be provided by government units with or without interest, but if interest
is charged it must not exceed five percent per year. The board must credit the
local government unit for the payments in allocating current costs under
section 8, on the terms and at the times as are agreed to with the local
government unit.
Subd. 2.
[LIMITED TAX LEVY.] The board may levy ad valorem taxes on all
taxable property in the district to defray any of the costs described in
subdivision 1, provided the costs have not been defrayed by contribution
under subdivision 1. Before
certifying a levy to the county auditor, the board must determine the need for
the money to be derived from the levy by formal resolution setting forth the
purposes for which the tax money will be used and the amount proposed to be
used for each purpose. In allocating
current costs under section 8, the board must credit the government units
for taxes collected under the levy made under this subdivision on the terms and
at the time the board considers fair and reasonable and on terms consistent
with section 8, subdivision 2.
Sec. 12. [BONDS
CERTIFICATES AND OTHER OBLIGATIONS.]
Subdivision 1.
[BUDGET ANTICIPATION CERTIFICATES OF INDEBTEDNESS.] (a) Before
adopting its annual budget and in anticipation of the collection of tax and
other revenues estimated and set forth by the board in the budget, the board
may by resolution, authorize the issuance, negotiation, and sale in accordance
with subdivision 5 in such form and manner and upon such terms as it may
determine of its negotiable general obligation certificates of indebtedness in
aggregate principal amounts not exceeding 50 percent of the total amount of such
tax collections and other revenues and maturing not later than three months
after the close of the budget year in which issued. Revenues listed in clauses
(1) to (3) must not be anticipated for this purpose:
(1) taxes already anticipated by the issuance of
certificates under subdivision 2;
(2) deficiency taxes levied pursuant to this subdivision;
and
(3) taxes levied for the payment of certificates issued
pursuant to subdivision 3.
(b) The proceeds of the sale of the certificates must be
used only for the purposes for which tax collections and other revenues are to
be expended under the budget.
(c) All tax collections and other revenues included in
the budget for the budget year, after the expenditures of tax collections and
other revenues in accordance with the budget, must be irrevocably pledged and
appropriated to a special fund to pay the principal and interest on the
certificates when due.
(d) If for any reason the tax collections and other revenues
are insufficient to pay the certificates and interest when due, the board must
levy a tax in the amount of the deficiency on all taxable property in the
district and must appropriate this amount when received to the special fund.
Subd. 2. [TAX
LEVY ANTICIPATION CERTIFICATES OF INDEBTEDNESS.] After a tax is levied by
the board under section 11, subdivision 2, and certified to the
county auditors in anticipation of the collection of the tax, if the tax has
not been anticipated by the issuance of certificates under subdivision 1,
the board may, by resolution, authorize the issuance, negotiation, and sale in
accordance with subdivision 5 in the form and manner and on the terms and
conditions as it determines its negotiable general obligation tax levy
anticipation certificates of indebtedness in aggregate principal amounts not
exceeding 50 percent of the uncollected tax for which no penalty for nonpayment
or delinquency has been attached. The
certificates must mature not later than April 1 in the year after the year in
which the tax is collectible. The
proceeds of the tax in anticipation of which the certificates were issued and
other funds that may become available must be applied to the extent necessary
to repay the certificates.
Subd. 3.
[EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in any budget year the
receipts of tax and other revenues for some unforeseen cause become
insufficient to pay the board's current expenses, or if any calamity or other
public emergency subjects it to the necessity of making extraordinary
expenditures, the board may by resolution authorize the issuance, negotiation,
and sale in accordance with subdivision 5 in the form and manner and on
the terms and conditions as it may determine of its negotiable general
obligation certificates of indebtedness in an amount sufficient to meet the
deficiency, and the board must levy on all taxable property in the district a
tax sufficient to pay the certificates and interest and shall appropriate all
collections of the tax to a special fund created for the payment of the certificates
and interest.
Subd. 4.
[GENERAL OBLIGATION BONDS.] The board may by resolution authorize the
issuance of general obligation bonds maturing serially in one or more annual or
semiannual installments for the acquisition or betterment of any part of the
district disposal system, including but not limited to, the payment of interest
during construction and for a reasonable period thereafter, or for the
refunding of outstanding bonds, certificates of indebtedness, or judgments. The board must pledge its full faith and
credit and taxing power for the payment of the bonds and shall provide for the
issuance and sale and for the security of the bonds in the manner provided in
Minnesota Statutes, chapter 475, and must have the same powers and duties
as a municipality issuing bonds under that law. An election is not required to authorize the issuance of bonds
and the debt limit of Minnesota Statutes, chapter 475, do not apply to the
bonds. The board may also pledge for
the payment of the bonds and deduct from the amount of any tax levy required
under Minnesota Statutes, section 475.61, subdivision 1, any sums
receivable under section 9 or any state and federal grants anticipated by
the board and may covenant to refund the bonds if and when and to the extent that
for any reason the revenues, together with other funds properly available and
appropriated for the purpose, are not sufficient to pay all principal and
interest due or about to become due; if the revenues have not been anticipated
by the issuance of certificates under subdivision 1. All bonds that have been or shall hereafter
be issued and sold in conformity with the provisions of this subdivision, and
otherwise in conformity with law, are hereby authorized, legalized, and
validated.
Subd. 5. [MANNER
OF SALE AND ISSUANCE OF CERTIFICATES.] Certificates issued under
subdivisions 1, 2, and 3 may be issued and sold by negotiation,
without public sale, and may be sold at a price equal to the percentage of
their par value, plus accrued interest, and bearing interest at the rate or
rates as may be determined by the board.
No election is required to authorize the issuance of certificates. Certificates must bear the same rate of
interest after maturity as before and the full faith and credit and taxing power
of the board must be pledged to the payment of the certificates.
Sec. 13. [TAX
LEVIES.]
The board may levy taxes to pay the bonds or other
obligations assumed by the district under section 5 and for debt service
of the district disposal system authorized in section 12 upon all taxable
property within the district without limit of rate or amount and without
affecting the amount or rate of taxes that may be levied by the board for other
purposes or by any local government unit in the district. No other provision of law relating to debt
limit shall restrict or in any way limit the power of the board to issue the
bonds and certificates authorized in section 12. The board may also levy taxes as provided in sections 9
and 11. The county auditor must
annually assess and extend upon the tax rolls the part of the taxes levied by
the board in each year that is certified to the auditor by the board. The county treasurer must collect and make
settlement of the taxes with the treasurer of the board.
Sec. 14.
[DEPOSITORIES.]
The board must from time to time designate one or more
national or state banks or trust companies authorized to do a banking business
as official depositories for money of the board, and must require the treasurer
to deposit all or a part of the money in those institutions. The designation must be in writing and must
set forth all the terms and conditions on which the deposits are made, and must
be signed by the chair and treasurer, and made a part of the minutes of the
board. A designated bank or trust
company must qualify as a depository by furnishing a corporate surety bond or
collateral in the amount required by Minnesota Statutes,
section 118A.03. But, no bond or
collateral is required to secure any deposit insofar as it is insured under
federal law.
Sec. 15. [MONEY;
ACCOUNTS AND INVESTMENTS.]
Subdivision 1.
[RECEIPT AND APPLICATION.] All money received by the board must be
deposited or invested by the treasurer and disposed of as the board directs in
accordance with its budget. But any
money that has been pledged or dedicated by the board to the payment of
obligations or interest on them or expenses incident to them, or for any other
specific purpose authorized by law, must be paid by the treasurer into the fund
to which they have been pledged.
Subd. 2. [FUNDS
AND ACCOUNTS.] The board's treasurer must establish funds and accounts as
necessary or convenient to handle the receipts and disbursements of the board
in an orderly fashion.
Subd. 3.
[DEPOSIT AND INVESTMENT.] The money on hand in the board's funds and
accounts may be deposited in the official depositories of the board or invested
as provided in this subdivision. The
amount not currently needed or required by law to be kept in cash on deposit
may be invested in obligations authorized by law for the investment of
municipal sinking funds. The money may
also be held under certificates of deposit issued by any official depository of
the board. All investments by the board
must conform to an investment policy adopted by the board as amended from time
to time.
Subd. 4. [BOND
PROCEEDS.] The use of proceeds of all bonds issued by the board for the
acquisition and betterment of the district disposal system, and the use, other
than investment, of all money on hand in any sinking fund or funds of the board
must be governed by Minnesota Statutes, chapter 475, this article, and the
resolutions authorizing the issuance of the bonds. The bond proceeds, when received, must be transferred to the
treasurer of the board for safekeeping, investment, and payment of the costs
for which they were issued.
Subd. 5.
[AUDIT.] The board must provide for and pay the cost of an
independent annual audit of its official books and records by the state auditor
or a certified public accountant.
Sec. 16. [GENERAL
POWERS OF BOARD.]
Subdivision 1.
[ALL NECESSARY OR CONVENIENT POWERS.] The board has powers necessary
or convenient to discharge the duties imposed upon it by law. The powers include those specified in this
article, but the express grant or enumeration of powers does not limit the
generality or scope of the grant of power in this subdivision.
Subd. 2.
[LAWSUITS.] The board may sue or be sued.
Subd. 3.
[CONTRACTS.] The board may enter into any contract necessary or
proper for the exercise of its powers or the accomplishment of its purposes.
Subd. 4.
[RULES.] The board may adopt rules relating to the board's
responsibilities and may provide penalties not exceeding the maximum penalty
specified for a misdemeanor, and the cost of prosecution may be added to the
penalties imposed. Any rule prescribing a penalty for violation must be
published at least once in a newspaper having general circulation in the
district. A violation may be prosecuted
before any court in the district having jurisdiction of misdemeanor, and every
court has jurisdiction of violations. A
peace officer of any municipality in the district may make arrests for
violations committed anywhere in the district in the manner and with the effect
as for violations of municipal ordinances or for statutory misdemeanors. All fines collected must be deposited in the
treasury of the board, or may be allocated between the board and the
municipality in which the prosecution occurs on terms agreed to by the board
and the municipality.
Subd. 5. [GIFTS;
GRANTS.] The board may accept gifts, may apply for and accept grants or
loans of money or other property from the United States, the state, or any
person for any of its purposes, may enter into any agreement required to get
the gift, grant, loan, or other property; and may hold, use, and dispose of
money or property in accordance with the terms of the gift, grant, loan or
agreement. With respect to any loans or
grants of funds or real or personal property or other assistance from any state
or federal government or any agency or instrumentality of the government, the
board may contract to do and perform all acts and things required as a
condition or consideration under state or federal law or rule or regulation, whether
or not included among the powers expressly granted to the board in this
article.
Subd. 6. [JOINT
POWERS.] The board may act under Minnesota Statutes, section 471.59, or
any other appropriate law providing for joint or cooperative action between government
units.
Subd. 7.
[RESEARCH; HEARINGS; INVESTIGATIONS; ADVISE.] The board may conduct
research studies and programs, collect and analyze data, prepare reports, maps,
charts, and tables, and conduct all necessary hearings and investigations in connection
with the design, construction, and operation of the district disposal system,
and may advise and assist other government units on system planning matters
within the scope of its powers, duties, and objectives, and may provide at the
request of any governmental unit other technical and administrative assistance
as the board considers appropriate for the government unit to carry out the
powers and duties vested in the government unit under this article or imposed
on or by the board.
Subd. 8. [EMPLOYEES;
CONTRACTORS; INSURANCE.] The board may employ on the terms it considers
advisable, persons or firms performing engineering, legal, or other services of
a professional nature; require any employee to get and file with it an
individual bond or fidelity insurance policy; and procure insurance in the
amounts it considers necessary against liability of the board or its officers
or both, for personal injury or death and property damage or destruction, with
the force and effect stated in Minnesota Statutes, chapter 466, and
against risks of damage to or destruction of any of its facilities, equipment,
or other property as it considers necessary.
Subd. 9.
[PROPERTY.] The board may acquire by purchase, lease, condemnation,
gift, or grant, real or personal property including positive and negative
easements and water and air rights, and it may construct, enlarge, improve,
replace, repair, maintain, and operate any interceptor, treatment works, or
water facility determined to be necessary or convenient for the
collection and disposal of sewage in the district. Any local government unit and the commissioners of transportation
and natural resources may convey to or permit the use of these facilities owned
or controlled by the board, subject to the rights of the holders of any bonds
issued with respect to them with or without compensation and without an
election or approval by any other government unit or agency. All powers conferred by this subdivision may
be exercised both within or outside the district as may be necessary for the
exercise by the board of its powers or the accomplishment of its purposes. The board may hold, lease, convey, or
otherwise dispose of such property for its purposes, upon the terms and in the
manner it deems advisable. Unless otherwise
provided, the right to acquire lands and property rights by condemnation must
be exercised in accordance with Minnesota Statutes, chapter 117, and must
apply to any property or interest in property owned by any local government
unit. Property devoted to an actual
public use at the time, or held to be devoted to such use within a reasonable
time, must not be so acquired unless a court of competent jurisdiction
determines that the use proposed by the board is paramount. In case of property in actual public use,
the board may take possession of any property of which condemnation proceedings
have begun at any time after the issuance of a court order appointing
commissioners for its condemnation.
Subd. 10.
[RIGHTS-OF-WAY.] The board may construct or maintain its systems or
facilities in, along, on, under, over, or through public waters, streets,
bridges, viaducts, and other public right-of-way without first getting a
franchise from any county or local government unit having jurisdiction over
them. The facilities must be constructed and maintained in accordance with the
ordinances and resolutions of the county or government unit relating to
construction, installation, and maintenance of similar facilities on public
properties and must not unnecessarily obstruct the public use of the
rights-of-way.
Subd. 11.
[DISPOSAL OF PROPERTY.] The board may sell, lease, or otherwise
dispose of any real or personal property acquired by it that is no longer
required to accomplish its purposes.
The property may be sold in the manner provided by Minnesota Statutes,
section 469.065, insofar as practical.
The board may give notice of sale it considers appropriate. When the board determines that any property
or any part of the district disposal system that has been acquired from a local
government unit without compensation is no longer required, but is required as
a local facility by the government unit from which is was acquired, the board
may by resolution transfer it to the government unit.
Subd. 12. [JOINT
OPERATIONS.] The board may contract with the United States or an agency of
it, any state or agency of it, or any regional public planning body in the
state with jurisdiction over any part of the district, or any other municipal
or public corporation, or governmental subdivision in any state, for the joint
use of any facility owned by the board or the entity, for the operation by the
entity of any system or facility of the board, or for the performance on the
board's behalf of any service including, but not limited to, planning, on the
terms that may be agreed to by the contracting parties. Unless designated by
the board as a local sanitary sewer facility, any treatment works or
interceptor jointly used, or operated on behalf of the board, as provided in
this subdivision, must be considered to be operated by the board to include the
facilities in the district disposal system.
Sec. 17. [LOCAL
FACILITIES.]
Subdivision 1.
[SANITARY SEWER FACILITIES.] Except as otherwise provided in this
article, local government units must retain responsibility for the planning,
design, acquisition, betterment, operation, administration, and maintenance of
all local sanitary sewer facilities as provided by law.
Subd. 2.
[ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY SEWER FACILITIES.] The
board must upon request of any government unit assume, either alone or jointly
with the local government unit, all or any part of the responsibility of the
local government unit described in subdivision 1. Except as provided in subdivision 4 and
to exercise the responsibility, the board has all the powers and duties
elsewhere conferred in this article with the same force and effect as if the
local sanitary sewer facilities were a part of the district disposal system.
Subd. 3. [WATER AND STREET FACILITIES.] The board
may, on request of any governmental unit, enter into an agreement under which
the board may assume, either alone or jointly with such unit, the
responsibility to get and construct water and street facilities in conjunction with
any project for the acquisition or betterment of the district disposal system
or any project undertaken by the board under subdivision 2. Except as provided in subdivision 4,
and to exercise any responsibilities under this subdivision, the board has all
the powers and duties elsewhere conferred in this article with the same force
and effect as if the water or street facilities were a part of the district
disposal system.
Subd. 4.
[ALLOCATION OF CURRENT COSTS.] All current costs attributable to responsibilities
assumed by the board over local sanitary sewer facilities and water and street
facilities as provided in this section must be allocated solely to the local
unit for or with whom the responsibilities are assumed on the terms and over a
period as the board determines to be equitable and in the best interest of the
district. If two or more government
units form a region in accordance with this section all or part of the current
costs attributable to the region must, at the request of its joint board, be
allocated to the region and provided in the agreement establishing the region.
Subd. 5. [PART
OF DISTRICT SYSTEM.] This section or any other part of this article does not
prevent the board from including, where appropriate, treatment works or interceptors,
previously designated or treated as local sanitary sewer facilities, as a part
of the district disposal system.
Sec. 18. [SERVICE
CONTRACTS WITH GOVERNMENTS OUTSIDE DISTRICT.]
The board may contract with the United States or any agency
of it, any state or any agency of it, or any municipal or public corporation,
governmental subdivision or agency, or political subdivision in any state,
outside the jurisdiction of the board, for furnishing to the entities any
services which the board may furnish to local government units in the district
under this article including, but not limited to, planning for and the
acquisition, betterment, operation, administration, and maintenance of any or
all interceptors, treatment works, and local sanitary sewer facilities; if the
board may further include as one of the terms of the contract that the entity
also pay to the board an amount as may be agreed upon as a reasonable estimate
of the proportionate share properly allocable to the entity of costs of acquisition,
betterment, and debt service previously allocated to local government units in
the district. When the payments are made by the entities to the board, they
must be applied in reduction of the total amount of costs allocated after that
to each local government unit in the district, on the equitable basis the board
considers to be in the best interest of the district. Any municipality in the state may enter into the contract and
perform all acts and things required as a condition or consideration for it
consistent with the purpose of this article, whether or not included among the
powers otherwise granted to the municipality by law or charter.
Sec. 19. [CONSTRUCTION,
MATERIALS, SUPPLIES, EQUIPMENT; CONTRACTS.]
Subdivision 1.
[PLANS AND SPECIFICATIONS.] When the board orders a project involving
the acquisition or betterment of a part of the district disposal system, it
must cause plans and specifications of this project to be made, or if
previously made, to be modified, if necessary, and to be approved by the agency
if required, and after any required approval by the agency, one or more
contracts for work and materials called for by the plans and specification may
be awarded as provided in this section.
Subd. 2.
[UNIFORM MUNICIPAL CONTRACTING LAW.] All contracts for work to be
done or for purchases of materials, supplies, or equipment must be done in
accordance with Minnesota Statutes, section 471.345.
Sec. 20. [ANNEXATION,
WITHDRAWAL OF TERRITORY.]
Subdivision 1.
[ANNEXATION.] Any municipality in Douglas county, upon resolution
adopted by a four-fifths vote of its governing body, may petition the board for
annexation to the district of the area then comprising the municipality or any
part of it and, if accepted by the board, the area must be considered annexed
to the district and subject
to the jurisdiction of the board under the terms and provisions of this
article. The territory so annexed is
subject to taxation and assessment under this article and is subject to
taxation by the board like other property in the district for the payment of
principal and interest thereafter becoming due on general obligations of the
board, whether authorized or issued before or after the annexation. The board may condition approval of the
annexation upon the contribution, by or on behalf of the municipality
petitioning for annexation, to the board of an amount as may be agreed upon as
being a reasonable estimate of the proportionate share, properly allocable to
the municipality, of cost or acquisition, betterment, and debt service
previously allocated to local government units in the district, on the terms as
may be agreed upon and in place of or in addition to further conditions as the
board deems in the best interests of the district. Notwithstanding any other provisions of this article to the
contrary, the conditions established for annexation may include the requirement
that the annexed municipality pay for, contract for, and oversee the
construction of local sanitary sewer facilities and interceptor sewers. To pay the contribution or satisfy any other
condition established by the board, the municipality petitioning annexation may
exercise the powers conferred in section 9. When the contributions are made by the municipality to the board,
they must be applied to reduce the total amount of costs thereafter allocated
to each local government unit in the district, on the equitable basis as the
board considers to be in the best interests of the district, applying so far as
practicable and appropriate the criteria set forth in section 8,
subdivision 2. On annexation of the territory, the secretary of the board
must certify to the auditor and treasurer of the county in which the
municipality is located the fact of the annexation and a legal description of the
territory annexed.
Subd. 2.
[WITHDRAWALS.] A municipality may withdraw from the district by
resolution of its governing body. The
municipality must notify the board of the district of the withdrawal by
providing a copy of the resolution at least two years in advance of the
proposed withdrawal. Unless the
district and the withdrawing member agree otherwise by action of their
governing bodies, the taxable property of the withdrawing member is subject to
its required property tax levies under this article for two taxes payable years
following the notification of the withdrawal and the withdrawing member retains
any rights, obligations, and liabilities obtained or incurred during its
participation.
Sec. 21. [PROPERTY
EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased, controlled,
used, or occupied by the sanitary sewer board for any purpose under this
article are declared to be acquired, owned, leased, controlled, used, and
occupied for public, governmental, and municipal purposes, and are exempt from
taxation by the state or any political subdivision of the state; but the
properties are subject to special assessments levied by a political subdivision
for a local improvement in amounts proportionate to and not exceeding the special
benefit received by the properties from the improvement. No possible use of any of the properties in
any manner different from their use as part of the disposal system at the time
may be considered in determining the special benefit received by the properties. All of the assessments are subject to final
approval by the board, whose determination of the benefits is conclusive upon
the political subdivision levying the assessment.
Sec. 22. [RELATION TO
EXISTING LAWS.]
This article prevails over any law or charter inconsistent
with it. The powers conferred on the
board under this article do not diminish or supersede the powers conferred on
the agency by Minnesota Statutes, chapters 115 and 116.
Sec. 23. [APPLICATION;
EFFECTIVE DATE; LOCAL APPROVAL; OPT IN OR OUT.]
Subdivision 1.
[APPLICATION.] This article applies to the townships of Brandon,
Carlos, LaGrand, Leaf Valley, Miltona, and Moe, all in Douglas county.
Subd. 2. [EFFECTIVE DATE; LOCAL APPROVAL.] This
article is effective the day after a fourth township of the six listed in
subdivision 1 has timely completed compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3. For any other township listed in subdivision 1, the article
is effective the day after timely completing compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3. A township listed in subdivision 1 that
fails to timely complete compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3, may petition for annexation to the district at
a later time, as provided in this article.
ARTICLE
10
TAX
INCREMENT FINANCING
Section 1. Minnesota
Statutes 2002, section 469.174, subdivision 3, is amended to
read:
Subd. 3. [BONDS.] (a)
"Bonds" means any bonds, including refunding bonds, notes, interim
certificates, debentures, interfund loans or advances, or other obligations
issued:
(1) by an authority under section 469.178;
or which were issued
(2) in aid of a project under any other law, except
revenue bonds issued pursuant to sections 469.152 to 469.165, prior to
August 1, 1979.
(b) Bonds or other obligations include:
(1) refunding bonds;
(2) notes;
(3) interim certificates;
(4) debentures; and
(5) interfund loans or advances qualifying under
section 469.178, subdivision 7.
[EFFECTIVE DATE.] This
section is effective at the same time as provided by Laws 2001, First Special
Session chapter 5, article 15, section 3.
Sec. 2. Minnesota
Statutes 2002, section 469.174, subdivision 6, is amended to
read:
Subd. 6.
[MUNICIPALITY.] "Municipality" means any the
city, however organized, and with respect to in which the district is
located, with the following exceptions:
(1) for a project undertaken pursuant to
sections 469.152 to 469.165, "municipality" has the meaning
given in sections 469.152 to 469.165, and with respect to; and
(2) for a project undertaken pursuant to
sections 469.142 to 469.151, or a county or multicounty project undertaken
pursuant to sections 469.004 to 469.008, "municipality" also
includes any means the county in which the district is located.
[EFFECTIVE DATE.] This
section is effective for districts for which the request for certification was
made after July 31, 1979.
Sec. 3. Minnesota Statutes 2002, section 469.174, subdivision 10,
is amended to read:
Subd. 10.
[REDEVELOPMENT DISTRICT.] (a) "Redevelopment district" means a
type of tax increment financing district consisting of a project, or portions
of a project, within which the authority finds by resolution that one or more
of the following conditions, reasonably distributed throughout the district,
exists:
(1) parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, paved or gravel parking
lots, or other similar structures and more than 50 percent of the buildings,
not including outbuildings, are structurally substandard to a degree requiring
substantial renovation or clearance; or
(2) the property consists of vacant, unused, underused,
inappropriately used, or infrequently used railyards, rail storage facilities,
or excessive or vacated railroad rights-of-way; or
(3) tank facilities, or property whose immediately previous use
was for tank facilities, as defined in section 115C.02,
subdivision 15, if the tank facilities:
(i) have or had a capacity of more than 1,000,000 gallons;
(ii) are located adjacent to rail facilities; and
(iii) have been removed or are unused, underused,
inappropriately used, or infrequently used.
(b) For purposes of this subdivision, "structurally
substandard" shall mean containing defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light and
ventilation, fire protection including adequate egress, layout and condition of
interior partitions, or similar factors, which defects or deficiencies are of
sufficient total significance to justify substantial renovation or clearance.
(c) A building is not structurally substandard if it is in
compliance with the building code applicable to new buildings or could be
modified to satisfy the building code at a cost of less than 15 percent of the
cost of constructing a new structure of the same square footage and type on the
site. The municipality may find that a
building is not disqualified as structurally substandard under the preceding
sentence on the basis of reasonably available evidence, such as the size, type,
and age of the building, the average cost of plumbing, electrical, or
structural repairs, or other similar reliable evidence. The municipality may not make such a
determination without an interior inspection of the property, but need not have
an independent, expert appraisal prepared of the cost of repair and
rehabilitation of the building. An
interior inspection of the property is not required, if the municipality finds
that (1) the municipality or authority is unable to gain access to the property
after using its best efforts to obtain permission from the party that owns or
controls the property; and (2) the evidence otherwise supports a reasonable
conclusion that the building is structurally substandard. Items of evidence that support such a
conclusion include recent fire or police inspections, on-site property tax
appraisals or housing inspections, exterior evidence of deterioration, or other
similar reliable evidence. Written
documentation of the findings and reasons why an interior inspection was not
conducted must be made and retained under section 469.175,
subdivision 3, clause (1). Failure
of a building to be disqualified under the provisions of this paragraph is a
necessary, but not a sufficient, condition to determining that the building is
substandard.
(d) A parcel is deemed to be occupied by a structurally
substandard building for purposes of the finding under paragraph (a) if all of
the following conditions are met:
(1) the parcel was occupied by a substandard building within
three years of the filing of the request for certification of the parcel as
part of the district with the county auditor;
(2) the substandard building was demolished or removed by
the authority or the demolition or removal was financed by the authority or was
done by a developer under a development agreement with the authority;
(3) the authority found by resolution before the demolition or
removal that the parcel was occupied by a structurally substandard building and
that after demolition and clearance the authority intended to include the
parcel within a district; and
(4) upon filing the request for certification of the tax capacity
of the parcel as part of a district, the authority notifies the county auditor
that the original tax capacity of the parcel must be adjusted as provided by
section 469.177, subdivision 1, paragraph (h) (f).
(e) For purposes of this subdivision, a parcel is not occupied
by buildings, streets, utilities, paved or gravel parking lots, or other
similar structures unless 15 percent of the area of the parcel contains
buildings, streets, utilities, paved or gravel parking lots, or other similar
structures.
(f) For districts consisting of two or more noncontiguous
areas, each area must qualify as a redevelopment district under paragraph (a)
to be included in the district, and the entire area of the district must
satisfy paragraph (a).
[EFFECTIVE DATE.] The
amendment to Minnesota Statutes, section 469.174, subdivision 10,
paragraph (c), confirms the intent of the legislature with regard to the
original provisions of the language contained in Minnesota Statutes 2002,
section 469.174, subdivision 10, paragraph (c), and is retroactive to
the effective date of the original language.
The amendment to Minnesota Statutes, section 469.174,
subdivision 10, paragraph (d), is effective for districts for which the request
for certification was received by the county after June 30, 2002.
Sec. 4. Minnesota
Statutes 2002, section 469.174, subdivision 25, is amended to
read:
Subd. 25. [INCREMENT.]
"Increment," "tax increment," "tax increment
revenues," "revenues derived from tax increment," and other
similar terms for a district include:
(1) taxes paid by the captured net tax capacity, but excluding
any excess taxes, as computed under section 469.177;
(2) the proceeds from the sale or lease of property, tangible
or intangible, purchased by the authority with tax increments;
(3) repayments of principal and interest received on
loans or other advances made by the authority with tax increments; and
(4) interest or other investment earnings on or from tax
increments.
[EFFECTIVE DATE.] This
section is effective for districts for which the request for certification was
made after June 30, 1982, and payments of principal and interest received on
loans or other advances that were made after June 30, 1997.
Sec. 5. Minnesota
Statutes 2002, section 469.174, is amended by adding a subdivision to
read:
Subd. 29.
[QUALIFIED HOUSING DISTRICT.] "Qualified housing district"
means:
(1) a housing district for a residential rental project or
projects in which the only properties receiving assistance from revenues
derived from tax increments from the district meet the rent restriction
requirements and the low-income occupancy test for a qualified low-income
housing project under section 42(g) of the Internal Revenue Code of 1986,
as amended through December 31, 2002, regardless of whether the project
actually receives a low-income housing credit; or
(2) a housing district for a single-family
homeownership project or projects, if 95 percent or more of the homes receiving
assistance from tax increments from the district are purchased by qualified
purchasers. A qualified purchaser means
the first purchaser of a home after the tax increment assistance is provided
whose income is at or below 85 percent of the median gross income for a family
of the same size as the purchaser. Median gross income is the greater of (i)
area median gross income, or (ii) the statewide median gross income, as
determined by the secretary of Housing and Urban Development.
[EFFECTIVE DATE.] This
section applies to all districts for which the request for certification was
made on or after January 1, 2002, and to all districts to which the definition
of qualified housing districts under Minnesota Statutes 2000,
section 273.1399, applied.
Sec. 6. Minnesota
Statutes 2002, section 469.175, subdivision 1, is amended to
read:
Subdivision 1. [TAX
INCREMENT FINANCING PLAN.] A tax increment financing plan shall contain:
(1) a statement of objectives of an authority for the
improvement of a project;
(2) a statement as to the development program for the project,
including the property within the project, if any, that the authority intends
to acquire;
(3) a list of any development activities that the plan proposes
to take place within the project, for which contracts have been entered into at
the time of the preparation of the plan, including the names of the parties to
the contract, the activity governed by the contract, the cost stated in the
contract, and the expected date of completion of that activity;
(4) identification or description of the type of any other
specific development reasonably expected to take place within the project, and
the date when the development is likely to occur;
(5) estimates of the following:
(i) cost of the project, including administration administrative
expenses, except that if part of the cost of the project is paid or financed
with increment from the tax increment financing district, the tax increment
financing plan for the district must contain an estimate of the amount of the
cost of the project, including administrative expenses, that will be paid or
financed with tax increments from the district;
(ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public
costs;
(iv) the most recent net tax capacity of taxable real property
within the tax increment financing district and within any subdistrict;
(v) the estimated captured net tax capacity of the tax
increment financing district at completion; and
(vi) the duration of the tax increment financing district's and
any subdistrict's existence;
(6) statements of the authority's alternate estimates of the
impact of tax increment financing on the net tax capacities of all taxing
jurisdictions in which the tax increment financing district is located in whole
or in part. For purposes of one
statement, the authority shall assume that the estimated captured net tax
capacity would be available to the taxing jurisdictions without creation of the
district, and for purposes of the second statement, the authority shall assume
that none of the estimated captured net tax capacity would be available to the
taxing jurisdictions without creation of the district or subdistrict;
(7) identification and description of studies and analyses
used to make the determination set forth in subdivision 3, clause (2); and
(8) identification of all parcels to be included in the
district or any subdistrict.
[EFFECTIVE DATE.] This
section applies to districts for which the request for certification was made
after July 31, 1979, and is effective for tax increment financing plans and
modifications approved after June 30, 2003.
Sec. 7. Minnesota
Statutes 2002, section 469.175, subdivision 3, is amended to
read:
Subd. 3. [MUNICIPALITY
APPROVAL.] (a) A county auditor shall not certify the original net tax
capacity of a tax increment financing district until the tax increment
financing plan proposed for that district has been approved by the municipality
in which the district is located. If an
authority that proposes to establish a tax increment financing district and the
municipality are not the same, the authority shall apply to the municipality in
which the district is proposed to be located and shall obtain the approval of
its tax increment financing plan by the municipality before the authority may
use tax increment financing. The
municipality shall approve the tax increment financing plan only after a public
hearing thereon after published notice in a newspaper of general circulation in
the municipality at least once not less than ten days nor more than 30 days
prior to the date of the hearing. The
published notice must include a map of the area of the district from which
increments may be collected and, if the project area includes additional area,
a map of the project area in which the increments may be expended. The hearing may be held before or after the
approval or creation of the project or it may be held in conjunction with a
hearing to approve the project.
(b) Before or at the time of approval of the tax
increment financing plan, the municipality shall make the following findings,
and shall set forth in writing the reasons and supporting facts for each
determination:
(1) that the proposed tax increment financing district is a
redevelopment district, a renewal or renovation district, a housing district, a
soils condition district, or an economic development district; if the proposed
district is a redevelopment district or a renewal or renovation district, the
reasons and supporting facts for the determination that the district meets the
criteria of section 469.174, subdivision 10, paragraph (a), clauses
(1) and (2), or subdivision 10a, must be documented in writing and
retained and made available to the public by the authority until the district has
been terminated;
(2) that the proposed development or redevelopment, in
the opinion of the municipality,:
(i) the proposed development or redevelopment would not
reasonably be expected to occur solely through private investment within the
reasonably foreseeable future; and that
(ii) the increased market value of the site that could
reasonably be expected to occur without the use of tax increment financing
would be less than the increase in the market value estimated to result from
the proposed development after subtracting the present value of the projected
tax increments for the maximum duration of the district permitted by the plan.
The requirements of this clause item do not apply if the district
is a qualified housing district, as defined in section 273.1399,
subdivision 1;
(3) that the tax increment financing plan conforms to the
general plan for the development or redevelopment of the municipality as a
whole;
(4) that the tax increment financing plan will afford maximum
opportunity, consistent with the sound needs of the municipality as a whole,
for the development or redevelopment of the project by private enterprise;
(5) that the municipality elects the method of tax
increment computation set forth in section 469.177, subdivision 3,
clause (b), if applicable.
(c) When the municipality and the authority are not the
same, the municipality shall approve or disapprove the tax increment financing
plan within 60 days of submission by the authority. When the municipality and the authority are not the same, the
municipality may not amend or modify a tax increment financing plan except as
proposed by the authority pursuant to subdivision 4. Once approved, the determination of the
authority to undertake the project through the use of tax increment financing
and the resolution of the governing body shall be conclusive of the findings
therein and of the public need for the financing.
(d) For a district that is subject to the requirements of
paragraph (b), clause (2), item (ii), the municipality's statement of reasons
and supporting facts must include all of the following:
(1) an estimate of the amount by which the market value of
the site will increase without the use of tax increment financing;
(2) an estimate of the increase in the market value that
will result from the development or redevelopment to be assisted with tax
increment financing; and
(3) the present value of the projected tax increments for
the maximum duration of the district permitted by the tax increment financing plan.
(e) For purposes of this subdivision, "site" means
the parcels on which the development or redevelopment to be assisted with tax
increment financing will be located.
[EFFECTIVE DATE.] This
section is effective for determinations made after June 30, 2003, except the
provisions of paragraph (e) apply to requests for certification of tax
increment districts made after June 30, 1995.
Sec. 8. Minnesota
Statutes 2002, section 469.175, subdivision 4, is amended to
read:
Subd. 4. [MODIFICATION
OF PLAN.] (a) A tax increment financing plan may be modified by an authority,
provided that.
(b) The authority may make the following modifications only
upon the notice and after the discussion, public hearing, and findings required
for approval of the original plan:
(1) any reduction or enlargement of geographic area of
the project or tax increment financing district, that does not meet
the requirements of paragraph (e);
(2) increase in amount of bonded indebtedness to be
incurred, including;
(3) a determination to capitalize interest on the debt
if that determination was not a part of the original plan, or to increase or
decrease the amount of interest on the debt to be capitalized,;
(4) increase in the portion of the captured net tax
capacity to be retained by the authority,;
(5) increase in total estimated tax increment
expenditures the estimate of the cost of the project, including
administrative expenses, that will be paid or financed with tax increment from
the district; or
(6) designation of additional property to be acquired by
the authority shall be approved upon the notice and after the discussion,
public hearing, and findings required for approval of the original plan;
provided that.
(c) If an authority changes the type of district from
housing, redevelopment, or economic development to another type of
district, this change shall is not be considered a
modification but shall require requires the authority to follow
the procedure set forth in sections 469.174 to 469.179 for adoption of a
new plan, including certification of the net tax capacity of the district by
the county auditor.
(d) If a redevelopment district or a renewal and
renovation district is enlarged, the reasons and supporting facts for the
determination that the addition to the district meets the criteria of
section 469.174, subdivision 10, paragraph (a), clauses (1) and (2),
or subdivision 10a, must be documented.
(e) The requirements of this paragraph (b)
do not apply if (1) the only modification is elimination of parcels from the
project or district and (2)(A) the current net tax capacity of the parcels
eliminated from the district equals or exceeds the net tax capacity of those
parcels in the district's original net tax capacity or (B) the authority agrees
that, notwithstanding section 469.177, subdivision 1, the original
net tax capacity will be reduced by no more than the current net tax capacity
of the parcels eliminated from the district.
The authority must notify the county auditor of any modification that
reduces or enlarges the geographic area of a district or a project area.
(b) (f) The geographic area of a tax increment
financing district may be reduced, but shall not be enlarged after five years
following the date of certification of the original net tax capacity by the
county auditor or after August 1, 1984, for tax increment financing
districts authorized prior to August 1, 1979.
[EFFECTIVE DATE.] This
section applies to districts for which the request for certification was made
after June 30, 2003. The development
authority may elect to have this section apply to a tax increment financing
plan or modification that was approved before July 1, 2003, by adopting before
January 1, 2004, a modification of the plan that states the amount of the cost
of the project, including administrative expenses, that will be paid or
financed with tax increments from the district. Section 469.175,
subdivision 4, paragraph (b), does not apply to a modification adopted
under this section if the modification is exclusively for the purpose of
stating the amount of the cost of the project, including administrative
expenses, that will be paid or financed with tax increment from the
district. For districts for which the
request for certification was made after July 31, 1979, and for which this
section is not effective, the total estimated tax increment expenditures are
determined by considering all of the information in the tax increment financing
plan and exhibits to the plan about estimated sources and uses of funds.
For districts for which certification was requested after
June 30, 1982, and before July 1, 2003, and for which the plan has not been
amended after July 1, 2003, the limit on administrative expenses equals the
greater of (1) nine percent of the increments for the district or (2) the
amount determined under section 469.176, subdivision 3, and the tax
increment financing plan.
Sec. 9. Minnesota
Statutes 2002, section 469.175, subdivision 6, is amended to
read:
Subd. 6. [ANNUAL
FINANCIAL REPORTING.] (a) The state auditor shall develop a uniform system of
accounting and financial reporting for tax increment financing districts. The system of accounting and financial
reporting shall, as nearly as possible:
(1) provide for full disclosure of the sources and uses of
public funds in the district;
(2) permit comparison and reconciliation with the affected
local government's accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a
district, including a single district that is part of a multidistrict project
or that is funded in part or whole through the use of a development account
funded with tax increments from other districts or with other public money;
(4) be consistent with generally accepted accounting principles.
(b) The authority must annually
submit to the state auditor a financial report in compliance with paragraph
(a). Copies of the report must also be
provided to the county auditor and to the governing body of the municipality,
if the authority is not the municipality.
To the extent necessary to permit compliance with the requirement of
financial reporting, the county and any other appropriate local government unit
or private entity must provide the necessary records or information to the
authority or the state auditor as provided by the system of accounting and
financial reporting developed pursuant to paragraph (a). The authority must submit the annual report
for a year on or before August 1 of the next year.
(c) The annual financial report must also include the following
items:
(1) the original net tax capacity of the district and any
subdistrict under section 469.177, subdivision 1;
(2) the net tax capacity for the reporting period of the
district and any subdistrict;
(3) the captured net tax capacity of the district;
(4) any fiscal disparity deduction from the captured net tax
capacity under section 469.177, subdivision 3;
(5) the captured net tax capacity retained for tax increment
financing under section 469.177, subdivision 2, paragraph (a), clause
(1);
(6) any captured net tax capacity
distributed among affected taxing districts under section 469.177,
subdivision 2, paragraph (a), clause (2);
(7) the type of district;
(8) the date the municipality approved the tax increment
financing plan and the date of approval of any modification of the tax
increment financing plan, the approval of which requires notice, discussion, a
public hearing, and findings under subdivision 4, paragraph (a);
(9) the date the authority first requested certification of the
original net tax capacity of the district and the date of the request for
certification regarding any parcel added to the district;
(10) the date the county auditor first certified the original
net tax capacity of the district and the date of certification of the original
net tax capacity of any parcel added to the district;
(11) the month and year in which the authority has received or
anticipates it will receive the first increment from the district;
(12) the date the district must be decertified;
(13) for the reporting period and prior years of the district,
the actual amount received from, at least, the following categories:
(i) tax increments paid by the captured net tax capacity
retained for tax increment financing under section 469.177,
subdivision 2, paragraph (a), clause (1), but excluding any excess taxes;
(ii) tax increments that are interest or other investment
earnings on or from tax increments;
(iii) tax increments that are proceeds from the sale or lease
of property, tangible or intangible, purchased by the authority with tax
increments;
(iv) tax increments that are
repayments of loans or other advances made by the authority with tax
increments;
(v) bond or loan proceeds;
(vi) special assessments;
(vii) grants; and
(viii) transfers from funds not exclusively associated with the
district;
(14) for the reporting period and for the prior years of the
district, the amount budgeted under the tax increment financing plan, and
the actual amount expended for, at least, the following categories:
(i) acquisition of land and buildings through condemnation or
purchase;
(ii) site improvements
or preparation costs;
(iii) installation of public utilities, parking facilities,
streets, roads, sidewalks, or other similar public improvements;
(iv) administrative costs, including the allocated cost of the
authority;
(v) public park facilities, facilities for social,
recreational, or conference purposes, or other similar public improvements; and
(vi) transfers to funds not exclusively associated with the
district;
(15) for properties sold to developers, the total cost of the
property to the authority and the price paid by the developer;
(16) the amount of any payments and the value of any in-kind
benefits, such as physical improvements and the use of building space, that are
paid or financed with tax increments and are provided to another governmental
unit other than the municipality during the reporting period;
(17) the amount of any payments for activities and improvements
located outside of the district that are paid for or financed with tax
increments;
(18) the amount of payments of principal and interest that are
made during the reporting period on any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(19) the principal amount, at the end of the reporting period,
of any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go
contracts;
(20) the amount of principal and interest payments that are due
for the current calendar year on any nondefeased:
(i) general obligation tax increment financing bonds;
(ii) other tax increment financing bonds; and
(iii) notes and pay-as-you-go contracts;
(21) if the fiscal disparities contribution under
chapter 276A or 473F for the district is computed under section 469.177,
subdivision 3, paragraph (a), the amount of increased property taxes
imposed on other properties in the municipality that approved the tax increment
financing plan as a result of the fiscal disparities contribution;
(22) whether the tax increment financing plan or other
governing document permits increment revenues to be expended:
(i) to pay bonds, the proceeds of which were or may be expended
on activities outside of the district;
(ii) for deposit into a common bond fund from which money may
be expended on activities located outside of the district; or
(iii) to otherwise finance activities located outside of the
tax increment financing district; and
(23) the estimate, if any, contained in the tax increment
financing plan of the amount of the cost of the project, including
administrative expenses, that will be paid or financed with tax increment; and
(24) any additional information the state auditor may
require.
(d) The commissioner of revenue shall prescribe the method of
calculating the increased property taxes under paragraph (c), clause (21), and
the form of the statement disclosing this information on the annual statement
under subdivision 5.
(e) The reporting requirements imposed by this subdivision
apply to districts certified before, on, and after August 1, 1979.
[EFFECTIVE DATE.] This
section is effective beginning with the reports due in calendar year 2004.
Sec. 10. Minnesota
Statutes 2002, section 469.176, subdivision 1c, is amended to
read:
Subd. 1c. [DURATION
LIMITS; PRE-1979 DISTRICTS.] (a) For tax increment financing districts
created prior to August 1, 1979, no tax increment shall be paid to the
authority after April 1, 2001, or the term of a nondefeased bond or obligation
outstanding on April 1, 1990, secured by increments from the district or
project area, whichever time is greater, provided that in no case will a tax
increment be paid to an authority after August 1, 2009, from such a
district. If a district's termination
date is extended beyond April 1, 2001, because bonds were outstanding on April
1, 1990, with maturities extending beyond April 1, 2001, the following
restrictions apply. No increment
collected from the district may be expended after April 1, 2001, except to pay
or defease (i) repay:
(1) bonds issued before April 1, 1990, or (ii);
(2) bonds issued to refund the
principal of the outstanding bonds and pay associated issuance costs,
provided the average maturity of the refunding bonds does not exceed the bonds
refunded;
(3) administrative expenses of the
district required to be paid under section 469.176, subdivision 4h,
paragraph (a);
(4) transfers of increment permitted under
section 469.1763, subdivision 6; and
(5) any advance or payment made by the municipality or the
authority after June 1, 2002, to pay any bonds listed in clause (1) or (2).
(b) Each year, any increments from a district subject to
this subdivision must be first applied to pay obligations listed under
paragraph (a), clauses (1) and (2), and administrative expenses under paragraph
(a), clause (3). Any remaining
increments may be used for transfers of increments permitted under
section 469.1763, subdivision 6, and to make payments under paragraph
(a), clause (5).
(c) When sufficient money has been received to pay in full
or defease obligations under paragraph (a), clauses (1), (2), and (5), the tax
increment project or district must be decertified.
[EFFECTIVE DATE.] This
section is effective the day following final enactment and applies to tax
increment financing districts for which the request for certification was made
before August 1, 1979.
Sec. 11. Minnesota
Statutes 2002, section 469.176, subdivision 2, is amended to
read:
Subd. 2. [EXCESS TAX
INCREMENTS.] In any year in which the tax increment exceeds the amount
necessary to pay the costs authorized by the tax increment financing plan,
including the amount necessary to cancel any tax levy as provided in
section 475.61, subdivision 3, (a) The authority shall
annually determine the amount of excess increments for a district, if any. This determination must be based on the tax
increment financing plan in effect on December 31 of the year and the
increments and other revenues received as of December 31 of the year.
(b) For purposes of this subdivision, "excess
increments" equals the excess of:
(1) total increments collected from the district since its
certification, reduced by any excess increments paid under paragraph (c),
clause (4), for a prior year, over
(2) the total costs authorized by the tax increment
financing plan to be paid with increments from the district, reduced, but not
below zero, by the sum of:
(i) the amounts of those authorized costs that have been
paid from sources other than tax increments from the district;
(ii) revenues, other than tax increments from the district,
that are dedicated for or otherwise required to be used to pay those authorized
costs and that the authority has received and that are not included in item
(i); and
(iii) the amount of principal and interest obligations due
on outstanding bonds after December 31 of the year and not prepaid under
paragraph (c) in a prior year.
(c) The authority shall use the excess amount to do
any of excess increment only to do one or more of the following:
(1) prepay any outstanding bonds,;
(2) discharge the pledge of tax increment therefor,
for any outstanding bonds;
(3) pay into an escrow account dedicated to the payment of such
bond, any outstanding bonds; or
(4) return the excess amount to the county auditor who shall
distribute the excess amount to the municipality city or town,
county, and school district in which the tax increment financing district is
located in direct proportion to their respective local tax rates.
(d) The county auditor must report to the commissioner
of children, families, and learning the amount of any excess tax increment
distributed to a school district within 30 days of the distribution.
[EFFECTIVE DATE.] This
section is effective for all tax increment financing districts, regardless of
whether the request for certification was made before, on, or after August 1,
1979, and applies after August 1, 2003, except the amendment to paragraph (c),
clause (4), applies retroactively to August 1, 1979.
Sec. 12. Minnesota
Statutes 2002, section 469.176, subdivision 3, is amended to
read:
Subd. 3. [LIMITATION ON
ADMINISTRATIVE EXPENSES.] (a) For districts for which certification was
requested before August 1, 1979, or after June 30, 1982 and before August 1,
2001, no tax increment shall be used to pay any administrative expenses for a
project which exceed ten percent of the total estimated tax increment
expenditures authorized by the tax increment financing plan or the total tax
increment expenditures for the project, whichever is less.
(b) For districts for which certification was requested after
July 31, 1979, and before July 1, 1982, no tax increment shall be used to pay
administrative expenses, as defined in Minnesota Statutes 1980,
section 273.73, for a district which exceeds five percent of the total tax
increment expenditures authorized by the tax increment financing plan or the
total estimated tax increment expenditures for the district, whichever
is less.
(c) For districts for which certification was requested after
July 31, 2001, no tax increment may be used to pay any administrative expenses
for a project which exceed ten percent of total estimated tax increment
expenditures authorized by the tax increment financing plan or the total tax
increments, as defined in section 469.174, subdivision 25, clause
(1), from the district, whichever is less.
[EFFECTIVE DATE.] This
section is effective for districts for which the request for certification was
made before, on, or after August 1, 1979.
Sec. 13. Minnesota
Statutes 2002, section 469.176, subdivision 7, is amended to
read:
Subd. 7. [PARCELS NOT
INCLUDABLE IN DISTRICTS.] (a) The authority may request inclusion in a tax
increment financing district and the county auditor may certify the original
tax capacity of a parcel or a part of a parcel that qualified under the
provisions of section 273.111 or 273.112 or chapter 473H for taxes
payable in any of the five calendar years before the filing of the request for
certification only for:
(1) a district in which 85 percent or more of the planned
buildings and facilities (determined on the basis of square footage) are a
qualified manufacturing facility or a qualified distribution facility or a
combination of both; or
(2) a qualified housing district as defined in
section 273.1399, subdivision 1.
(b)(1) A distribution facility means buildings and other
improvements to real property that are used to conduct activities in at least
each of the following categories:
(i) to store or warehouse tangible personal property;
(ii) to take orders for shipment, mailing, or delivery;
(iii) to prepare personal property for shipment, mailing, or
delivery; and
(iv) to ship, mail, or deliver property.
(2) A manufacturing facility includes space used for manufacturing
or producing tangible personal property, including processing resulting in the
change in condition of the property, and space necessary for and related to the
manufacturing activities.
(3) To be a qualified facility, the owner or operator of a
manufacturing or distribution facility must agree to pay and pay 90 percent or
more of the employees of the facility at a rate equal to or greater than 160
percent of the federal minimum wage for individuals over the age of 20.
[EFFECTIVE DATE.] This
section applies to all districts for which the request for certification was
made on or after January 1, 2002, and to all districts to which the definition
of qualified housing districts under Minnesota Statutes 2000,
section 273.1399, applied.
Sec. 14. Minnesota
Statutes 2002, section 469.1763, subdivision 1, is amended to
read:
Subdivision 1.
[DEFINITIONS.] (a) For purposes of this section, the following terms
have the meanings given.
(b) "Activities" means acquisition of property,
clearing of land, site preparation, soils correction, removal of hazardous
waste or pollution, installation of utilities, construction of public or
private improvements, and other similar activities, but only to the extent that
tax increment revenues may be spent for such purposes under other law.
(c) "Third party" means an entity other than (1) the
person receiving the benefit of assistance financed with tax increments, or (2)
the municipality or the development authority or other person substantially
under the control of the municipality.
(d) "Revenues derived from tax increments paid by
properties in the district" means only tax increment as defined in
section 469.174, subdivision 25, clause (1), and does not include tax
increment as defined in section 469.174, subdivision 25, clauses (2),
(3), and (4).
[EFFECTIVE DATE.] This
section is effective for districts for which the request for certification was
made after April 30, 1990.
Sec. 15. Minnesota
Statutes 2002, section 469.1763, subdivision 3, is amended to
read:
Subd. 3. [FIVE-YEAR
RULE.] (a) Revenues derived from tax increments are considered to have been
expended on an activity within the district under subdivision 2 only if
one of the following occurs:
(1) before or within five years after certification of the
district, the revenues are actually paid to a third party with respect to the
activity;
(2) bonds, the proceeds of which must be used to finance the
activity, are issued and sold to a third party before or within five years
after certification, the revenues are spent to repay the bonds, and the
proceeds of the bonds either are, on the date of issuance, reasonably expected
to be spent before the end of the later of (i) the five-year period, or (ii) a
reasonable temporary period within the meaning of the use of that term under
section 148(c)(1) of the Internal Revenue Code, or are deposited in a
reasonably required reserve or replacement fund;
(3) binding contracts with a third party are entered into
for performance of the activity before or within five years after certification
of the district and the revenues are spent under the contractual obligation; or
(4) costs with respect to the activity are paid before or
within five years after certification of the district and the revenues are
spent to reimburse a party for payment of the costs, including interest on
unreimbursed costs; or
(5) expenditures are made for housing purposes as permitted
by subdivision 2, paragraph (b).
(b) For purposes of this subdivision, bonds include subsequent
refunding bonds if the original refunded bonds meet the requirements of
paragraph (a), clause (2).
[EFFECTIVE DATE.] This
section is effective for expenditures made after June 30, 2003.
Sec. 16. Minnesota
Statutes 2002, section 469.1763, subdivision 6, is amended to
read:
Subd. 6. [POOLING
PERMITTED FOR DEFICITS.] (a) This subdivision applies only to districts for
which the request for certification was made before August 1, 2001, and without
regard to whether the request for certification was made prior to August 1,
1979.
(b) The municipality for the district may transfer available
increments from another tax increment financing district located in the
municipality, if the transfer is necessary to eliminate a deficit in the
district to which the increments are transferred. A deficit in the district for purposes of this subdivision means
the lesser of the following two amounts:
(1)(i) the amount due during the calendar year to pay
preexisting obligations of the district; minus
(ii) the total increments collected or to be collected from
properties located within the district that are available for the calendar year
including amounts collected in prior years that are currently available; plus
(iii) total increments from properties located in other
districts in the municipality including amounts collected in prior years that
are available to be used to meet the district's obligations under this section,
excluding this subdivision, or other provisions of law (but excluding a special
tax under section 469.1791 and the grant program under Laws 1997,
chapter 231, article 1, section 19, or Laws 2001, First Special
Session chapter 5); or
(2) the reduction in increments collected from properties
located in the district for the calendar year as a result of the changes in
class rates in Laws 1997, chapter 231, article 1; Laws 1998,
chapter 389, article 2; and Laws 1999, chapter 243, and Laws 2001,
First Special Session chapter 5, or the elimination of the general education
tax levy under Laws 2001, First Special Session chapter 5.
(c) A preexisting obligation means:
(1) bonds issued and sold before August 1, 2001, or bonds
issued pursuant to a binding contract requiring the issuance of bonds entered
into before July 1, 2001, and bonds issued to refund such bonds or to reimburse
expenditures made in conjunction with a signed contractual agreement entered
into before August 1, 2001, to the extent that the bonds are secured by a
pledge of increments from the tax increment financing district; and
(2) binding contracts entered into before August 1, 2001, to
the extent that the contracts require payments secured by a pledge of
increments from the tax increment financing district.
(d) The municipality may require a development authority,
other than a seaway port authority, to transfer available increments including
amounts collected in prior years that are currently available for any of its
tax increment financing districts in the municipality to make up an
insufficiency in another district in the municipality, regardless of whether
the district was established by the development authority or another
development authority. This authority
applies notwithstanding any law to the contrary, but applies only to a
development authority that:
(1) was established by the municipality; or
(2) the governing body of which is appointed, in whole or part,
by the municipality or an officer of the municipality or which consists, in
whole or part, of members of the governing body of the municipality. The municipality may use this authority only
after it has first used all available increments of the receiving development
authority to eliminate the insufficiency and exercised any permitted action
under section 469.1792, subdivision 3, for preexisting districts of
the receiving development authority to eliminate the insufficiency.
(e) The authority under this subdivision to spend tax
increments outside of the area of the district from which the tax increments
were collected:
(1) may only be exercised after obtaining approval of the
use of the increments, in writing, by the commissioner of revenue;
(2) is an exception to the restrictions under
section 469.176, subdivision 4i, and the other provisions of this
section, and the percentage restrictions under subdivision 2 must be
calculated after deducting increments spent under this subdivision from the
total increments for the district; and
(3) (2) applies notwithstanding the provisions of
the Tax Increment Financing Act in effect for districts for which the request
for certification was made before June 30, 1982, or any other law to the
contrary.
(f) If a preexisting obligation requires the development
authority to pay an amount that is limited to the increment from the district
or a specific development within the district and if the obligation requires
paying a higher amount to the extent that increments are available, the
municipality may determine that the amount due under the preexisting obligation
equals the higher amount and may authorize the transfer of increments under
this subdivision to pay up to the higher amount. The existence of a guarantee of obligations by the individual or
entity that would receive the payment under this paragraph is disregarded in
the determination of eligibility to pool under this subdivision. The authority to transfer increments under
this paragraph may only be used to the extent that the payment of all other
preexisting obligations in the municipality due during the calendar year have
been satisfied.
[EFFECTIVE DATE.] This
section is effective retroactively to January 2, 2002, and thereafter.
Sec. 17. Minnesota
Statutes 2002, section 469.177, subdivision 1, is amended to
read:
Subdivision 1.
[ORIGINAL NET TAX CAPACITY.] (a) Upon or after adoption of a tax
increment financing plan, the auditor of any county in which the district is
situated shall, upon request of the authority, certify the original net tax
capacity of the tax increment financing district and that portion of the
district overlying any subdistrict as described in the tax increment financing
plan and shall certify in each year thereafter the amount by which the original
net tax capacity has increased or decreased as a result of a change in tax
exempt status of property within the district and any subdistrict, reduction or
enlargement of the district or changes pursuant to subdivision 4.
(b) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May 1, 1988,
If the classification under section 273.13 of property located in a
district changes to a classification that has a different assessment ratio, the
original net tax capacity of that property must be redetermined at the time
when its use is changed as if the property had originally been classified in
the same class in which it is classified after its use is changed.
(c) The amount to be added to the original net tax
capacity of the district as a result of previously tax exempt real property
within the district becoming taxable equals the net tax capacity of the real
property as most recently assessed pursuant to section 273.18 or, if that
assessment was made more than one year prior to the date of title transfer
rendering the property taxable, the net tax capacity assessed by the assessor
at the time of the transfer. If
improvements are made to tax exempt property after certification of the
district and before the parcel becomes taxable, the assessor shall, at the
request of the authority, separately assess the estimated market value of the
improvements. If the property becomes
taxable, the county auditor shall add to original net tax capacity, the net tax
capacity of the parcel, excluding the separately assessed improvements. If substantial taxable improvements were
made to a parcel after certification of the district and if the property later
becomes tax exempt, in whole or part, as a result of the authority acquiring
the property through foreclosure or exercise of remedies under a lease or other
revenue agreement or as a result of tax forfeiture, the amount to be added to
the original net tax capacity of the district as a result of the property again
becoming taxable is the amount of the parcel's value that was included in
original net tax capacity when the parcel was first certified. The amount to be added to the original net
tax capacity of the district as a result of enlargements equals the net tax
capacity of the added real property as most recently certified by the
commissioner of revenue as of the date of modification of the tax increment
financing plan pursuant to section 469.175, subdivision 4.
(d) For districts approved under section 469.175,
subdivision 3, or parcels added to existing districts after May 1, 1988,
If the net tax capacity of a property increases because the property no longer
qualifies under the Minnesota Agricultural Property Tax Law,
section 273.111; the Minnesota Open Space Property Tax Law,
section 273.112; or the Metropolitan Agricultural Preserves Act,
chapter 473H, or because platted, unimproved property is improved or three
years pass after approval of the plat under section 273.11,
subdivision 1, the increase in net tax capacity must be added to the
original net tax capacity.
(e) The amount to be subtracted from the original net tax
capacity of the district as a result of previously taxable real property within
the district becoming tax exempt, or a reduction in the geographic area of the
district, shall be the amount of original net tax capacity initially attributed
to the property becoming tax exempt or being removed from the district. If the net tax capacity of property located
within the tax increment financing district is reduced by reason of a
court-ordered abatement, stipulation agreement, voluntary abatement made by the
assessor or auditor or by order of the commissioner of revenue, the reduction
shall be applied to the original net tax capacity of the district when the
property upon which the abatement is made has not been improved since the date
of certification of the district and to the captured net tax capacity of the
district in each year thereafter when the abatement relates to improvements
made after the date of certification.
The county auditor may specify reasonable form and content of the request
for certification of the authority and any modification thereof pursuant to
section 469.175, subdivision 4.
(f) If a parcel of property contained a substandard building
that was demolished or removed and if the authority elects to treat the parcel
as occupied by a substandard building under section 469.174,
subdivision 10, paragraph (b), the auditor shall certify the original net
tax capacity of the parcel using the greater of (1) the current net tax
capacity of the parcel, or (2) the estimated market value of the parcel for the
year in which the building was demolished or removed, but applying the class
rates for the current year.
[EFFECTIVE DATE.] This
section applies to all districts, regardless of whether the request for
certification was made before, on, or after August 1, 1979, beginning for taxes
payable in 2004. This section requires
adjustment of the original tax capacity under Minnesota Statutes,
section 469.177, subdivision 7, of all parcels for class rate changes
enacted after May 1, 1988, regardless of whether the classification of the
property has changed after the certification of the district. This section requires adjustment of original
tax capacity for changes in the classification of the property, only if the
change in use occurs after December 31, 2002.
Sec. 18. Minnesota Statutes 2002, section 469.177,
subdivision 12, is amended to read:
Subd. 12.
[DECERTIFICATION OF TAX INCREMENT FINANCING DISTRICT.] The county
auditor shall decertify a tax increment financing district when the earliest of
the following times is reached:
(1) the applicable maximum duration limit under
section 469.176, subdivisions 1a to 1g;
(2) the maximum duration limit, if any, provided by the
municipality pursuant to section 469.176, subdivision 1;
(3) the time of decertification specified in
section 469.1761, subdivision 4, if the commissioner of revenue
issues an order of noncompliance and the maximum duration limit for economic
development districts has been exceeded;
(4) upon completion of the required actions to allow decertification
under section 469.1763, subdivision 4; or
(5) upon the later of receipt by the county auditor of a
written request for decertification from the authority that requested
certification of the original net tax capacity of the district or its successor
or the decertification date specified in the request.
[EFFECTIVE DATE.] This
section is effective for all districts regardless of whether the request for
certification was made before, on, or after August 1, 1979.
Sec. 19. Minnesota
Statutes 2002, section 469.1771, subdivision 4, is amended to
read:
Subd. 4. [LIMITATIONS.]
(a) If the increments are pledged to repay bonds that were issued before the
lawsuit was filed under this section, the damages under this section may not
exceed the greater of (1) ten percent of the expenditures or revenues derived
from increment, or (2) the amount of available revenues after paying debt
services due on the bonds.
(b) The court may abate all or part of the amount if it
determines the unauthorized action or failure to perform the required
action was taken in good faith and the payment would work an undue
hardship on the authority or municipality.
[EFFECTIVE DATE.] This
section is effective for violations occurring after December 31, 1990.
Sec. 20. Minnesota
Statutes 2002, section 469.1771, is amended by adding a subdivision
to read:
Subd. 7.
[LIMITATIONS ON ACTIONS.] An action under subdivision 1,
paragraph (a), contesting the validity of a determination by an authority under
section 469.175, subdivision 3, must be commenced within the later
of:
(1) 180 days after the municipality's approval under
section 469.175, subdivision 3; or
(2) 90 days after the request for certification of the
district is filed with the county auditor under section 469.177,
subdivision 1.
[EFFECTIVE DATE.] This
section is effective for actions filed after the day following final enactment.
Sec. 21. Minnesota
Statutes 2002, section 469.178, subdivision 7, is amended to
read:
Subd. 7. [INTERFUND
LOANS.] The authority or municipality may advance or loan money to finance
expenditures under section 469.176, subdivision 4, from its general
fund or any other fund under which it has legal authority to do so. The loan or advance must be money
is transferred, advanced, or spent, whichever is earliest. The resolution may generally grant to the
authority the power to make interfund loans under one or more tax increment
financing plans or for one or more districts. The terms and conditions for repayment of the loan must be
provided in writing and include, at a minimum, the principal amount, the
interest rate, and maximum term. The
maximum rate of interest permitted to be charged is limited to the greater of
the rates specified under section 270.75 or 549.09 as of the date or
advance is made, unless the written agreement states that the maximum interest
rate will fluctuate as the interest rates specified under section 270.75
or 549.09 are from time to time adjusted. approved authorized,
by resolution of the governing body, before
[EFFECTIVE DATE.] This
section is effective for loans and advances made after July 31, 2001, and for
districts for which the request for certification was made after July 31, 1979.
Sec. 22. Minnesota
Statutes 2002, section 469.1791, subdivision 3, is amended to
read:
Subd. 3. [PRECONDITIONS
TO ESTABLISH DISTRICT.] (a) A city may establish a special taxing district
within a tax increment financing district under this section only if the
conditions under paragraphs (b) and (c) are met or if the city elects to
exercise the authority under paragraph (d).
(b) The city has determined that:
(1) total tax increments from the district, including unspent
increments from previous years and increments transferred under paragraph (c),
will be insufficient to pay the amounts due in a year on preexisting
obligations; and
(2) this insufficiency of increments resulted from the
reduction in property tax class rates enacted in the 1997 and 1998
legislative sessions.
(c) The city has agreed to transfer any available increments
from other tax increment financing districts in the city to pay the preexisting
obligations of the district under section 469.1763,
subdivision 6. This requirement
does not apply to any available increments of a qualified housing district,
as defined in section 273.1399, subdivision 1.
(d) If a tax increment financing district does not qualify
under paragraphs (b) and (c), the governing body may elect to establish a
special taxing district under this section.
If the city elects to exercise this authority, increments from the tax
increment financing district and the proceeds of the tax imposed under this
section may only be used to pay preexisting obligations and reasonable
administrative expenses of the authority for the tax increment financing
district. The tax increment financing
district must be decertified when all preexisting obligations have been paid.
[EFFECTIVE DATE.] This
section applies to all districts for which the request for certification was
made on or after January 1, 2002, and to all districts to which the definition
of qualified housing districts under Minnesota Statutes 2000,
section 273.1399, applied.
Sec. 23. Minnesota
Statutes 2002, section 469.1792, subdivision 1, is amended to
read:
Subdivision 1. [SCOPE.]
This section applies only to an authority with a preexisting district for
which:
(1) the increments from the district were insufficient to pay
preexisting obligations as a result of the class rate changes or the
elimination of the state-determined general education property tax levy under
this act, or both; or
(2)(i) the development authority has a binding contract,
entered into before August 1, 2001, with a person requiring the authority
to pay to the person an amount that may not exceed the increment from the
district or a specific development within the district; and
(ii) the authority is unable to pay
the full amount under the contract from the pledged increments or other
increments from the district that would have been due if the class rate changes
or elimination of the state-determined general education property tax levy or
both had not been made under Laws 2001, First Special Session chapter 5.
[EFFECTIVE DATE.] This
section is effective retroactively to the effective date of the original
enactment of section 469.1792, subdivision 1, and applies to all
districts for which the request for certification was made after July 1, 1979.
Sec. 24. Minnesota
Statutes 2002, section 469.1792, subdivision 2, is amended to
read:
Subd. 2. [DEFINITIONS.]
(a) For purposes of this section, the following terms have the meanings given.
(b) "Preexisting district" means a tax increment
financing district for which the request for certification was made before
August 1, 2001.
(c) "Preexisting obligation" means a bond or binding
contract that:
(1)(i) was issued or approved before August 1, 2001, or
was issued pursuant to a binding contract entered into before August July
1, 2001; or
(ii) was issued to refinance an obligation under item (i),
if the refinancing does not increase the present value of the debt service; and
(2) is secured by increments from a preexisting district.
[EFFECTIVE DATE.] This
section is effective the day following final enactment and applies to districts
for which the request for certification was made on, before, or after August 1,
1979, and before August 1, 2001.
Sec. 25. Minnesota
Statutes 2002, section 469.1792, subdivision 3, is amended to
read:
Subd. 3. [ACTIONS
AUTHORIZED.] (a) An authority with a district qualifying under this section may
take either or both of the following actions for any or all of its preexisting
districts:
(1) the authority may elect that the original local tax rate
under section 469.177, subdivision 1a, does not apply to the
district; and
(2) the authority may elect the fiscal disparities contribution
will be computed under section 469.177, subdivision 3, paragraph (a),
regardless of the election that was made for the district or if the district
is an economic development district for which the request for certification was
made after June 30, 1997.
(b) The authority may take action under this subdivision only
after the municipality approves the action, by resolution, after notice and
public hearing in the manner provided under section 469.175, subdivision 2
3.
[EFFECTIVE DATE.] This
section is effective the day following final enactment and applies to districts
for which the request for certification was made on, before, or after August 1,
1979, and before August 1, 2001.
Sec. 26. Minnesota Statutes 2002, section 469.1813,
subdivision 8, is amended to read:
Subd. 8. [LIMITATION ON
ABATEMENTS.] In any year, the total amount of property taxes abated by a
political subdivision under this section may not exceed (1) five percent of the
current levy, or (2) $100,000, whichever is greater. The limit under this subdivision does not apply to an
uncollected abatement from a prior year that is added to the abatement levy.
[EFFECTIVE DATE.] This
section is effective beginning with property taxes levied in 2003, payable in
2004.
Sec. 27. Minnesota
Statutes 2002, section 469.1815, subdivision 1, is amended to
read:
Subdivision 1.
[INCLUSION IN PROPOSED AND FINAL LEVIES.] The political subdivision must
add to its levy amount for the current year under sections 275.065
and 275.07 the total estimated amount of all current year abatements
granted. If all or a portion of an
abatement levy for a prior year was uncollected, the political subdivision may
add the uncollected amount to its abatement levy for the current year. The tax amounts shown on the proposed notice
under section 275.065, subdivision 3, and on the property tax
statement under section 276.04, subdivision 2, are the total amounts
before the reduction of any abatements that will be granted on the property.
[EFFECTIVE DATE.] This
section is effective beginning with property taxes levied in 2003, payable in
2004.
Sec. 28. Laws 1997,
chapter 231, article 10, section 25, is amended to read:
Sec. 25. [EFFECTIVE
DATE.]
Sections 1, 3 to 6, 7, and 10, are effective for districts
for which the requests for certification are made after June 30, 1997.
Section 2, clauses clause (1) and is
effective for all districts, regardless of whether the request for
certification was made before, on, or after August 1, 1979. Section 2, clause (4), are is
effective for districts for which the requests for certification were made
after July 31, 1979, and for payments and investment earnings received after July
1, 1997. Section 2, clauses (2) and
(3), are effective for districts for which the request for certification was
made after June 30, 1982, and proceeds from sales and leases of properties
purchased by the authority after June 30, 1997, and repayments of advances and
loans that were made after June 30, 1997.
Sections 8 and 9 apply to all tax increment districts,
whenever certified, insofar as the underlying law applies to them, and any uses
of tax increment expended prior to the date of enactment of this act which are
in compliance with the provisions of those sections are deemed valid.
Sections 12 and 13 are effective on the day the chief
clerical officer of the city of Columbia Heights complies with Minnesota
Statutes, sections 645.021, subdivision 3.
Sections 17 to 20 are effective the day following final
enactment and upon compliance by the governing body with Minnesota Statutes,
section 645.021, subdivision 3.
Section 24 is effective the day following final enactment.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 29. Laws
2002, chapter 377, article 7, section 3, the effective date, is
amended to read:
[EFFECTIVE DATE.] This section is effective for increments
payable in 2002 deficits occurring in calendar year 2000 and
thereafter.
Sec. 30. Laws 2002,
chapter 377, article 11, section 1, is amended to read:
Section 1. [CITY OF
MOORHEAD; TAX LEVY AUTHORIZED.]
(a) Each year the city of Moorhead may impose a tax on all
class 3a and class 3b property located in the city in an amount which the city
determines is equal to the reduction in revenues from increment from all tax
increment financing districts in the city resulting from the class rate changes
and the elimination of the state-determined general education property levy
under Laws 2001, First Special Session chapter 5. The proceeds of this tax and increments
from the district may only be used to pay preexisting obligations as
defined in Minnesota Statutes, section 469.1763, subdivision 6,
whether general obligations or payable wholly from tax increments, and
administrative expenses. The tax
must be levied and collected in the same manner and as part of the property tax
levied by the city and is subject to the same administrative, penalty, and
enforcement provisions. A tax imposed
under this section is a special levy and is not subject to levy limitations
under Minnesota Statutes, section 275.71.
(b) This section expires December 31, 2005 2010.
[EFFECTIVE DATE.] This
section is effective upon approval by and compliance with Minnesota Statutes,
section 645.021, subdivision 3, by the governing body of the city of
Moorhead.
Sec. 31. [HOPKINS TAX
INCREMENT FINANCING DISTRICT.]
Subdivision 1.
[DISTRICT EXTENSION.] (a) The governing body of the city of Hopkins
may elect to extend the duration of its redevelopment tax increment financing
district 2-11 by up to four additional years.
(b) Notwithstanding any law to the contrary, effective upon
approval of this subdivision, no increments may be spent on activities located
outside of the area of the district, other than to pay administrative expenses.
Subd. 2.
[FIVE-YEAR RULE.] The requirements of Minnesota Statutes,
section 469.1763, subdivision 3, that activities must be undertaken
within a five-year period from the date of certification of tax increment
financing district must be considered to be met for the city of Hopkins
redevelopment tax increment district 2-11, if the activities are undertaken
within nine years from the date of certification of the district.
[EFFECTIVE DATE.] Subdivision
1 is effective upon compliance with the provisions of Minnesota Statutes,
sections 469.1782, subdivision 2, and 645.021. Subdivision 2 is effective upon compliance
by the governing body of the city of Hopkins with the provisions of Minnesota
Statutes, section 645.021.
ARTICLE
11
MINERALS
TAXES
Section 1. Minnesota
Statutes 2002, section 273.134, is amended to read:
273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA; DEFINITIONS.]
(a) For purposes of this section and section sections
273.135 and 273.1391, "municipality" means any city, however
organized, or town, and which meets the following qualifications:
(1) it is a municipality in which the assessed
valuation of unmined iron ore on May 1, 1941, was not less than 40 percent of
the assessed valuation of all real property; or
(2) it is a municipality in which, on January 1, 1977, or
the applicable assessment date, there is a taconite concentrating plant or
where taconite is mined or quarried or where there is located an electric
generating plant which qualifies as a taconite facility.
"The applicable assessment date" is the
date as of which property is listed and assessed for the tax in question.
(b) For the purposes of section 273.135, "tax
relief area" means the geographic area contained within the boundaries of
a school district on January 2, 2000, which contains a municipality
which meets the following qualifications:
(1) it is a municipality school district in which
the assessed valuation of unmined iron ore on May 1, 1941, was not less than 40
percent of the assessed valuation of all real property and whose boundaries
are within 20 miles of a taconite mine or plant; or
(2) it is a municipality school district in
which, on January 1, 1977 or the applicable assessment date, there is a
taconite concentrating plant or where taconite is mined or quarried or where
there is located an electric generating plant which qualifies as a taconite
facility.
For purposes of this paragraph, a "tax relief
area" does not include a school district whose boundaries are more than 20
miles from a taconite mine or plant or in which the assessed valuation of
unmined iron ore on May 1, 1941, was less than 40 percent of the assessed
valuation of all real property.
(b) For purposes of section 273.1391,
subdivision 2, paragraph (c), and chapter 298, "tax relief
area" means the geographic area contained within the boundaries of a
school district which contains a municipality that meets the following
qualifications:
(1) it is a municipality in which the assessed valuation of
unmined iron ore on May 1, 1941, was not less than 40 percent of the assessed
valuation of all real property; or
(2) it is a municipality in which, on January 1, 1977, or
the applicable assessment date, there is a taconite concentrating plant or
where taconite is mined or quarried or where there is located an electric
generating plant which qualifies as a taconite facility.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 2. [273.1341]
[TACONITE ASSISTANCE AREA.]
A "taconite assistance area" means the geographic
area that falls within the boundaries of a school district that contains a
municipality in which the assessed valuation of unmined iron ore on May 1,
1941, was not less than 40 percent of the assessed valuation of all real
property.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 3. Minnesota
Statutes 2002, section 273.135, subdivision 1, is amended to
read:
Subdivision 1. The
property tax to be paid in respect to property taxable within a tax relief area
as defined in section 273.134, paragraph (a) (b), on
homestead property, as otherwise determined by law and regardless of the market
value of the property, for all purposes shall be reduced in the amount
prescribed by subdivision 2, subject to the limitations contained therein.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 4. Minnesota
Statutes 2002, section 273.135, subdivision 2, is amended to
read:
Subd. 2. The amount of
the reduction authorized by subdivision 1 shall be:
(a) In the case of property located within a tax relief area
municipality as defined under section 273.134, paragraph (a), that
is within the boundaries of a municipality which meets the qualifications
prescribed in section 273.134, paragraph (a), 66 percent of the tax,
provided that the reduction shall not exceed the maximum amounts specified in
paragraph (c).
(b) In the case of property located within the boundaries of a
school district which qualifies as a tax relief area under
section 273.134, paragraph (a) (b), but which is outside the
boundaries of a municipality which meets the qualifications prescribed in
section 273.134, paragraph (a), 57 percent of the tax, provided that the
reduction shall not exceed the maximum amounts specified in paragraph (c).
(c) The maximum reduction of the tax is $315.10 on property
described in paragraph (a) and $289.80 on property described in paragraph (b).
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 5. Minnesota
Statutes 2002, section 273.1391, subdivision 2, is amended to read:
Subd. 2. The amount of
the reduction authorized by subdivision 1 shall be:
(a) In the case of property located within a school district
which does not meet the qualifications of section 273.134, paragraph
(b), as a tax relief area, but which is located in a county with a
population of less than 100,000 in which taconite is mined or quarried and
wherein a school district is located which does meet the qualifications of a
tax relief area, and provided that at least 90 percent of the area of the school
district which does not meet the qualifications of section 273.134,
paragraph (b), lies within such county, 57 percent of the tax on qualified
property located in the school district that does not meet the qualifications
of section 273.134, paragraph (b), provided that the amount of said
reduction shall not exceed the maximum amounts specified in paragraph (d). The reduction provided by this paragraph
shall only be applicable to property located within the boundaries of the
county described therein.
(b) In the case of property located within a school district
which does not meet the qualifications of section 273.134, paragraph
(b), as a tax relief area, but which is located in a school district in a
county containing a city of the first class and a qualifying
municipality as defined in section 273.134, paragraph (a), but not
in a school district containing a city of the first class or adjacent to a
school district containing a city of the first class unless the school district
so adjacent contains a qualifying municipality as defined in
section 273.134, paragraph (a), 57 percent of the tax, but not to
exceed the maximums specified in paragraph (d).
(c) In the case of property located within the boundaries of a
municipality that meets the qualifications in section 273.134, paragraph boundaries of a school district
which qualifies as a (b)
(a), but not the qualifications of a tax relief area in
section 273.134, paragraph (a) (b), 66 percent of the tax,
provided that the reduction shall not exceed $315.10. In the case of property
located within the tax relief taconite assistance area under
section 273.134, paragraph (b) 273.1341, but does not qualify as
a tax relief area under section 273.134, paragraph (a) (b),
but which is outside the boundaries of a municipality which meets the
qualifications of the preceding sentence, 57 percent of the tax, provided that
the reduction shall not exceed the maximum amounts specified in paragraph (d).
(d) Except as otherwise provided in this section, the maximum
reduction of the tax is $289.80.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 6. Minnesota
Statutes 2002, section 298.2211, subdivision 1, is amended to
read:
Subdivision 1.
[PURPOSE; GRANT OF AUTHORITY.] In order to accomplish the legislative
purposes specified in sections 469.142 to 469.165 and chapter 462C,
within tax relief areas as defined in section 273.134, the commissioner of
iron range resources and rehabilitation may exercise the following powers: (1)
all powers conferred upon a rural development financing authority under
sections 469.142 to 469.149; (2) all powers conferred upon a city under
chapter 462C; (3) all powers conferred upon a municipality or a
redevelopment agency under sections 469.152 to 469.165; (4) all powers
provided by sections 469.142 to 469.151 to further any of the purposes and
objectives of chapter 462C and sections 469.152 to 469.165; and
(5) apply for, borrow, receive, and expend grant and loan money made
available from federal sources and from federally funded programs; and (6)
all powers conferred upon a municipality or an authority under
sections 469.174 to 469.177, 469.178, except subdivision 2 thereof,
and 469.179, subject to compliance with the provisions of section 469.175,
subdivisions 1, 2, and 3; provided that any tax increments derived by
the commissioner from the exercise of this authority may be used only to
finance or pay premiums or fees for insurance, letters of credit, or other
contracts guaranteeing the payment when due of net rentals under a project
lease or the payment of principal and interest due on or repurchase of bonds
issued to finance a project or program, to accumulate and maintain reserves
securing the payment when due on bonds issued to finance a project or program,
or to provide an interest rate reduction program pursuant to
section 469.012, subdivision 7.
Tax increments and earnings thereon remaining in any bond reserve
account after payment or discharge of any bonds secured thereby shall be used
within one year thereafter in furtherance of this section or returned to the
county auditor of the county in which the tax increment financing district is
located. If returned to the county
auditor, the county auditor shall immediately allocate the amount among all
government units which would have shared therein had the amount been received
as part of the other ad valorem taxes on property in the district most recently
paid, in the same proportions as other taxes were distributed, and shall
immediately distribute it to the government units in accordance with the
allocation.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 7. Minnesota
Statutes 2002, section 298.27, is amended to read:
298.27 [COLLECTION AND PAYMENT OF TAX.]
The taxes provided by section 298.24 shall be paid
directly to each eligible county and the iron range resources and
rehabilitation board. The commissioner
of revenue shall notify each producer of the amount to be paid each recipient
prior to February 15. Every person
subject to taxes imposed by section 298.24 shall file a correct report
covering the preceding year. The report must contain the information required
by the commissioner. The report shall
be filed by each producer on or before February 1. A remittance equal to 50 percent of the total tax required to be
paid hereunder rules as to the form and manner
of filing reports necessary for the determination of the tax hereunder, and by
such rules may require the production of such information as may be reasonably
necessary or convenient for the determination and apportionment of the tax. All the provisions of the occupation tax law
with reference to the assessment and determination of the occupation tax,
including all provisions for appeals from or review of the orders of the
commissioner of revenue relative thereto, but not including provisions for
refunds, are applicable to the taxes imposed by section 298.24 except in
so far as inconsistent herewith. If any
person subject to section 298.24 shall fail to make the report provided
for in this section at the time and in the manner herein provided, the
commissioner of revenue shall in such case, upon information possessed or
obtained, ascertain the kind and amount of ore mined or produced and thereon
find and determine the amount of the tax due from such person. There shall be added to the amount of tax
due a penalty for failure to report on or before February 1, which penalty
shall equal ten percent of the tax imposed and be treated as a part thereof. in 2003 and 100 percent of the total tax required to be
paid hereunder in 2004 and thereafter shall be paid on or before February
24. A remittance equal to the remaining
total tax required to be paid hereunder in 2003 shall be paid on or
before August 24. On or before February
25, and in 2003, August 25, the county auditor shall make
distribution of the payments previously received by the county in the manner provided
by section 298.28. Reports shall
be made and hearings held upon the determination of the tax in accordance with
procedures established by the commissioner of revenue. The commissioner of revenue shall have
authority to make reasonable
If any person responsible for making a tax payment at the time
and in the manner herein provided fails to do so, there shall be imposed a
penalty equal to ten percent of the amount so due, which penalty shall be
treated as part of the tax due.
In the case of any underpayment of the tax payment required
herein, there may be added and be treated as part of the tax due a penalty
equal to ten percent of the amount so underpaid.
A person having a liability of $120,000 or more during a
calendar year must remit all liabilities by means of a funds transfer as
defined in section 336.4A-104, paragraph (a). The funds transfer payment date, as defined in
section 336.4A-401, must be on or before the date the tax is due. If the date the tax is due is not a funds
transfer business day, as defined in section 336.4A-105, paragraph (a),
clause (4), the payment date must be on or before the funds transfer business
day next following the date the tax is due.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 8. Minnesota
Statutes 2002, section 298.28, subdivision 4, is amended to
read:
Subd. 4. [SCHOOL
DISTRICTS.] (a) 17.15 cents per taxable ton plus the increase provided in
paragraph (d) must be allocated to qualifying school districts to be
distributed, based upon the certification of the commissioner of revenue, under
paragraphs (b) and (c), except as otherwise provided in paragraph (f).
(b) 3.43 cents per taxable ton must be distributed to the
school districts in which the lands from which taconite was mined or quarried
were located or within which the concentrate was produced. The distribution must be based on the
apportionment formula prescribed in subdivision 2.
(c)(i) 13.72 cents per taxable ton, less any amount distributed
under paragraph (e), shall be distributed to a group of school districts
comprised of those school districts in which the taconite was mined
or quarried or the concentrate produced qualify as a tax relief area
under section 273.134, paragraph (b), or in which there is a
qualifying municipality as defined by section 273.134, paragraph (b)
(a), in direct proportion to school district indexes as follows: for each school district, its pupil units
determined under section 126C.05 for the prior school year shall be
multiplied by the ratio of the average adjusted net tax capacity per pupil unit
for school districts receiving aid under this clause as calculated pursuant to
chapters 122A, 126C, and 127A for the school year ending prior to
distribution to the adjusted net tax capacity per pupil unit of the district. Each district shall receive that portion of
the distribution which its index bears to the sum of the indices for all school
districts that receive the distributions.
(ii) Notwithstanding clause (i), each school district that
receives a distribution under sections 298.018; 298.23 to 298.28,
exclusive of any amount received under this clause; 298.34 to 298.39; 298.391
to 298.396; 298.405; or any law imposing a tax on severed mineral values after
reduction for any portion distributed to cities and towns under section 126C.48,
subdivision 8, paragraph (5), that is less than the amount of its levy
reduction under section 126C.48,
subdivision 8, for the second year prior to the year of the distribution
shall receive a distribution equal to the difference; the amount necessary to make
this payment shall be derived from proportionate reductions in the initial
distribution to other school districts under clause (i).
(d) Any school district described in paragraph (c) where a levy
increase pursuant to section 126C.17, subdivision 9, was authorized
by referendum for taxes payable in 2001, shall receive a distribution from a
fund that receives a distribution in 1998 of 21.3 cents per ton. On July 15 of 1999, and each year
thereafter, the increase over the amount established for the prior year shall
be determined according to the increase in the implicit price deflator as
provided in section 298.24, subdivision 1. Each district shall receive $175 times the
pupil units identified in section 126C.05, subdivision 1, enrolled in
the second previous year or the 1983-1984 school year, whichever is greater,
less the product of 1.8 percent times the district's taxable net tax capacity
in the second previous year.
If the total amount provided by paragraph (d) is insufficient
to make the payments herein required then the entitlement of $175 per pupil
unit shall be reduced uniformly so as not to exceed the funds available. Any amounts received by a qualifying school
district in any fiscal year pursuant to paragraph (d) shall not be applied to
reduce general education aid which the district receives pursuant to
section 126C.13 or the permissible levies of the district. Any amount remaining after the payments
provided in this paragraph shall be paid to the commissioner of iron range
resources and rehabilitation who shall deposit the same in the taconite
environmental protection fund and the northeast Minnesota economic protection
trust fund as provided in subdivision 11.
Each district receiving money according to this paragraph shall
reserve $25 times the number of pupil units in the district. It may use the money for early childhood
programs or for outcome-based learning programs that enhance the academic
quality of the district's curriculum.
The outcome-based learning programs must be approved by the commissioner
of children, families, and learning.
(e) There shall be distributed to any school district the
amount which the school district was entitled to receive under
section 298.32 in 1975.
(f) Effective for the distribution in 2003 only, five percent
of the distributions to school districts under paragraphs (b), (c), and (e);
subdivision 6, paragraph (c); subdivision 11; and
section 298.225, shall be distributed to the general fund. The remainder less any portion distributed
to cities and towns under section 126C.48, subdivision 8, paragraph
(5), shall be distributed to the northeast Minnesota economic protection trust
fund created in section 298.292.
Fifty percent of the amount distributed to the northeast Minnesota
Douglas J. Johnson economic protection trust fund shall be made
available for expenditure under section 298.293 as governed by
section 298.296. Effective in 2003
only, 100 percent of the distributions to school districts under
section 477A.15 less any portion distributed to cities and towns under
section 126C.48, subdivision 8, paragraph (5), shall be distributed
to the general fund.
[EFFECTIVE DATE.] This
section is effective for distributions in 2004 and thereafter.
Sec. 9. Minnesota
Statutes 2002, section 298.292, subdivision 2, is amended to
read:
Subd. 2. [USE OF
MONEY.] Money in the northeast Minnesota economic protection trust fund may be
used for the following purposes:
(1) to provide loans, loan guarantees, interest buy-downs and
other forms of participation with private sources of financing, but a loan to a
private enterprise shall be for a principal amount not to exceed one-half of
the cost of the project for which financing is sought, and the rate of interest
on a loan to a private enterprise shall be no less than the lesser of
eight percent or an interest rate three percentage points less than a full
faith and credit obligation of the United States government of comparable
maturity, at the time that the loan is approved;
(2) to fund reserve accounts
established to secure the payment when due of the principal of and interest on
bonds issued pursuant to section 298.2211;
(3) to pay in periodic payments or in a lump sum payment any or
all of the interest on bonds issued pursuant to chapter 474 for the
purpose of constructing, converting, or retrofitting heating facilities in
connection with district heating systems or systems utilizing alternative
energy sources; and
(4) to invest in a venture capital fund or enterprise that will
provide capital to other entities that are engaging in, or that will engage in,
projects or programs that have the purposes set forth in
subdivision 1. No investments may
be made in a venture capital fund or enterprise unless at least two other
unrelated investors make investments of at least $500,000 in the venture
capital fund or enterprise, and the investment by the northeast Minnesota
economic protection trust fund may not exceed the amount of the largest
investment by an unrelated investor in the venture capital fund or
enterprise. For purposes of this
subdivision, an "unrelated investor" is a person or entity that is
not related to the entity in which the investment is made or to any individual
who owns more than 40 percent of the value of the entity, in any of the following
relationships: spouse, parent, child,
sibling, employee, or owner of an interest in the entity that exceeds ten
percent of the value of all interests in it.
For purposes of determining the limitations under this clause, the
amount of investments made by an investor other than the northeast Minnesota
economic protection trust fund is the sum of all investments made in the
venture capital fund or enterprise during the period beginning one year before
the date of the investment by the northeast Minnesota economic protection trust
fund.
Money from the trust fund shall be expended only in or for the
benefit of the tax relief area defined in section 273.134, paragraph (b).
[EFFECTIVE DATE.] This
section is effective for loans executed on or after the day following final
enactment.
Sec. 10. Minnesota
Statutes 2002, section 298.296, subdivision 4, is amended to
read:
Subd. 4. [TEMPORARY
LOAN AUTHORITY.] (a) The board may recommend that up to $7,500,000 from the
corpus of the trust may be used for loans, loan guarantees, grants, or
equity investments as provided in this subdivision. The money would be available for loans for construction and
equipping of facilities constituting (1) a value added iron products plant,
which may be either a new plant or a facility incorporated into an existing
plant that produces iron upgraded to a minimum of 75 percent iron content or
any iron alloy with a total minimum metallic content of 90 percent; or (2) a
new mine or minerals processing plant for any mineral subject to the net
proceeds tax imposed under section 298.015. A loan or loan guarantee under this paragraph may not
exceed $5,000,000 for any facility.
(b) Additionally, the board must reserve the first $2,000,000
of the net interest, dividends, and earnings arising from the investment of the
trust after June 30, 1996, to be used for additional grants, loans,
loan guarantees, or equity investments for the purposes set forth in
paragraph (a). This amount must be
reserved until it is used for the grants as described in this
subdivision.
(c) Additionally, the board may recommend that up to $5,500,000
from the corpus of the trust may be used for additional grants, loans, loan
guarantees, or equity investments for the purposes set forth in paragraph
(a).
(d) The board may require that it receive an equity percentage
in any project to which it contributes under this section.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 11. Minnesota Statutes 2002, section 298.2961, is amended
by adding a subdivision to read:
Subd. 3.
[REDISTRIBUTION.] (a) If a taconite production facility is sold after
operations at the facility had ceased, any money remaining in the taconite
environmental fund for the former producer may be released to the purchaser of
the facility on the terms otherwise applicable to the former producer under
this section.
(b) Any portion of the taconite environmental fund that is
not released by the commissioner within three years of its deposit in the
taconite environmental fund shall be divided between the taconite environmental
protection fund created in section 298.223 and the Douglas J. Johnson
economic protection trust fund created in section 298.292 for placement in
their respective special accounts.
Two-thirds of the unreleased funds must be distributed to the taconite
environmental protection fund and one-third to the Douglas J. Johnson economic
protection trust fund.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 12. [REVISOR
INSTRUCTION.]
The revisor of statutes shall change the phrase
"Northeast Minnesota Economic Protection Trust Fund" or a similar
phrase referring to the fund, to the "Douglas J. Johnson Economic
Protection Trust Fund" wherever it appears in Minnesota Statutes.
Sec. 13. [REPEALER.]
Minnesota Statutes 2002, section 298.24,
subdivision 3, is repealed effective for concentrates produced after
January 1, 2003.
ARTICLE
12
PUBLIC
FINANCE
Section 1. [37.31]
[ISSUANCE OF BONDS.]
Subdivision 1.
[BONDING AUTHORITY.] The society may issue negotiable bonds in a
principal amount that the society determines necessary to provide sufficient
money for achieving its purposes, including the payment of interest on bonds of
the society, the establishment of reserves to secure its bonds, the payment of
fees to a third party providing credit enhancement, and the payment of all
other expenditures of the society incident to and necessary or convenient to
carry out its corporate purposes and powers.
Bonds of the society may be issued as bonds or notes or in any other
form authorized by law. The principal
amount of bonds issued and outstanding under this section at any time may not
exceed $20,000,000, excluding bonds for which refunding bonds or crossover
refunding bonds have been issued.
Subd. 2.
[REFUNDING OF BONDS.] The society may issue bonds to refund
outstanding bonds of the society, to pay any redemption premiums on those
bonds, and to pay interest accrued or to accrue to the redemption date next
succeeding the date of delivery of the refunding bonds. The society may apply the proceeds of any
refunding bonds to the purchase or payment at maturity of the bonds to be
refunded, or to the redemption of outstanding bonds on the redemption date next
succeeding the date of delivery of the refunding bonds and may, pending the
application, place the proceeds in escrow to be applied to the purchase,
retirement, or redemption of the bonds.
Pending use, escrowed proceeds may be invested and reinvested in
obligations issued or guaranteed by the state or the United States or by any
agency or instrumentality of the state or the United States, or in certificates
of deposit or time deposits secured in a manner determined by the society,
maturing at a time appropriate to assure the prompt payment of the principal
and interest and redemption premiums, if any, on the bonds to be refunded. The income realized
on any investment may also be applied to the payment of the bonds to be
refunded. After the terms of the escrow
have been fully satisfied, any balance of the proceeds and any investment
income may be returned to the society for use by it in any lawful manner. All refunding bonds issued under this subdivision
must be issued and secured in the manner provided by resolution of the society.
Subd. 3. [KIND
OF BONDS.] Bonds issued under this section must be negotiable investment
securities within the meaning and for all purposes of the Uniform Commercial
Code, subject only to the provisions of the bonds for registration. The bonds issued must be limited obligations
of the society not secured by its full faith and credit and payable solely from
specified sources or assets.
Subd. 4.
[RESOLUTION AND TERMS OF SALE.] The bonds of the society must be
authorized by a resolution or resolutions adopted by the society. The bonds must bear the date or dates,
mature at the time or times, bear interest at a fixed or variable rate,
including a rate varying periodically at the time or times and on the terms
determined by the society, or any combination of fixed and variable rates, be
in the denominations, be in the form, carry the registration privileges, be
executed in the manner, be payable in lawful money of the United States, at the
place or places within or without the state, and be subject to the terms of
redemption or purchase before maturity as the resolutions or certificates
provide. If, for any reason existing at
the date of issue of the bonds or existing at the date of making or purchasing
any loan or securities from the proceeds or after that date, the interest on
the bonds is or becomes subject to federal income taxation, this fact does not
affect the validity or the provisions made for the security of the bonds. The society may make covenants and take or
have taken actions that are in its judgment necessary or desirable to comply
with conditions established by federal law or regulations for the exemption of
interest on its obligations. The
society may refrain from compliance with those conditions if in its judgment
this would serve the purposes and policies set forth in this chapter with
respect to any particular issue of bonds, unless this would violate covenants
made by the society. The maximum maturity
of a bond, whether or not issued for the purpose of refunding, must be 30 years
from its date. The bonds of the society
may be sold at public or private sale, at a price or prices determined by the
society; provided that:
(1) the aggregate price at which an issue of bonds is
initially offered by underwriters to investors, as stated in the authority's
official statement with respect to the offering, must not exceed by more than
three percent the aggregate price paid by the underwriters to the society at
the time of delivery;
(2) the commission paid by the society to an underwriter for
placing an issue of bonds with investors must not exceed three percent of the
aggregate price at which the issue is offered to investors as stated in the
society's offering statement; and
(3) the spread or commission must be an amount determined by
the society to be reasonable in light of the risk assumed and the expenses of
issuance, if any, required to be paid by the underwriters.
Subd. 5.
[EXEMPTION.] The notes and bonds of the society are not subject to
sections 16C.03, subdivision 4, and 16C.05.
Subd. 6.
[RESERVES; FUNDS; ACCOUNTS.] The society may establish reserves,
funds, or accounts necessary to carry out the purposes of the society or to
comply with any agreement made by or any resolution passed by the society.
Subd. 7.
[APPROVAL; COMMISSIONER OF FINANCE.] Before issuing bonds under this
section, the society must obtain the approval, in writing, of the commissioner
of finance.
Subd. 8.
[EXPIRATION.] The authority to issue bonds, other than bonds to
refund outstanding bonds, under this section expires July 1, 2009.
Sec. 2. [37.32]
[TENDER OPTION.]
An obligation may be issued giving its owner the right to
tender or the society to demand tender of the obligation to the society or another
person designated by it, for purchase at a specified time or times, if the
society has first entered into an agreement with a suitable financial
institution obligating the financial institution to provide funds on a timely
basis for purchase of bonds tendered.
The obligation is not considered to mature on any tender date and the
purchase of a tendered obligation is not considered a payment or discharge of
the obligation by the society.
Obligations tendered for purchase may be remarketed by or on behalf of
the society or another purchaser. The
society may enter into agreements it considers appropriate to provide for the
purchase and remarketing of tendered obligations, including:
(1) provisions under which undelivered obligations may be
considered tendered for purchase and new obligations may be substituted for
them;
(2) provisions for the payment of charges of tender agents,
remarketing agents, and financial institutions extending lines of credit or
letters of credit assuring repurchase; and
(3) provisions for reimbursement of advances under letters
of credit that may be paid from the proceeds of the obligations or from tax and
other revenues appropriated for the payment and security of the obligations and
similar or related provisions.
Sec. 3. [37.33] [BOND
FUND.]
Subdivision 1.
[CREATION AND CONTENTS.] The society may establish a special fund or
funds for the security of one or more or all series of its bonds. The funds must be known as debt service
reserve funds. The society may pay into
each debt service reserve fund:
(1) the proceeds of sale of bonds to the extent provided in
the resolution or indenture authorizing the issuance of them;
(2) money directed to be transferred by the society to the
debt service reserve fund; and
(3) other money made available to the society from any other
source only for the purpose of the fund.
Subd. 2. [USE OF
FUNDS.] Except as provided in this section, the money credited to each debt
service reserve fund must be used only for the payment of the principal of
bonds of the society as they mature, the purchase of the bonds, the payment of
interest on them, or the payment of any premium required when the bonds are
redeemed before maturity. Money in a
debt service reserve fund must not be withdrawn at a time and in an amount that
reduces the amount of the fund to less than the amount the society determines
to be reasonably necessary for the purposes of the fund. However, money may be withdrawn to pay
principal or interest due on bonds secured by the fund if other money of the
society is not available.
Subd. 3.
[INVESTMENT.] Money in a debt service reserve fund not required for
immediate use may be invested in accordance with section 37.07.
Subd. 4.
[MINIMUM AMOUNT OF RESERVE AT ISSUANCE.] If the society establishes a
debt service reserve fund for the security of any series of bonds, it shall not
issue additional bonds that are similarly secured if the amount of any of the
debt service reserve funds at the time of issuance does not equal or exceed the
minimum amount required by the resolution creating the fund, unless the society
deposits in each fund at the time of issuance, from the proceeds of the bonds,
or otherwise, an amount that when added together with the amount then in the fund
will be at least the minimum amount required.
Subd. 5.
[TRANSFER OF EXCESS.] To the extent consistent with the resolutions
and indentures securing outstanding bonds, the society may at the close of a
fiscal year transfer to any other fund or account from any debt service reserve
fund any excess in that reserve fund over the amount determined by the society
to be reasonably necessary for the purpose of the reserve fund.
Sec. 4. [37.34] [MONEY
OF THE SOCIETY.]
The society may contract with the holders of any of its
bonds as to the custody, collection, securing, investment, and payment of money
of the society or money held in trust or otherwise for the payment of bonds,
and to carry out the contract. Money held
in trust or otherwise for the payment of bonds or in any way to secure bonds
and deposits of the money may be secured in the same manner as money of the
society, and all banks and trust companies are authorized to give security for
the deposits.
Sec. 5. [37.35]
[NONLIABILITY.]
Subdivision 1.
[NONLIABILITY OF INDIVIDUALS.] No member of the society or other
person executing the bonds is liable personally on the bonds or is subject to
any personal liability or accountability by reason of their issuance.
Subd. 2.
[NONLIABILITY OF STATE.] The state is not liable on bonds of the
society issued under section 37.31 and those bonds are not a debt of the
state. The bonds must contain on their
face a statement to that effect.
Sec. 6. [37.36]
[PURCHASE AND CANCELLATION BY SOCIETY.]
Subject to agreements with bondholders that may then exist,
the society may purchase out of money available for the purpose, bonds of the
society which shall then be canceled, at a price not exceeding the following
amounts:
(1) if the bonds are then redeemable, the redemption price
then applicable plus accrued interest to the next interest payment date of the
bonds; or
(2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase upon which the bonds become
subject to redemption plus accrued interest to that date.
Sec. 7. [37.37] [STATE
PLEDGE AGAINST IMPAIRMENT OF CONTRACTS.]
The state pledges and agrees with the holders of bonds
issued under section 37.31 that the state will not limit or alter the
rights vested in the society to fulfill the terms of any agreements made with
the bondholders or in any way impair the rights and remedies of the holders
until the bonds, together with interest on them, with interest on any unpaid
installments of interest, and all costs and expenses in connection with any
action or proceeding by or on behalf of the bondholders, are fully met and
discharged. The society may include
this pledge and agreement of the state in any agreement with the holders of
bonds issued under section 37.31.
Sec. 8. Minnesota
Statutes 2002, section 373.01, subdivision 3, is amended to
read:
Subd. 3. [CAPITAL NOTES.] A county board may, by resolution and without referendum, issue capital notes subject to the county debt limit to purchase capital equipment useful for county purposes that has an expected useful life at least equal to the term of the notes. The notes shall be payabl