Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1984, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1984
CHAPTER 502-H.F.No. 2016
An act relating to financing and operation of
government in this state; increasing the budget
reserve account; repealing the income tax surtax;
providing a tax amnesty; increasing the school
agricultural credit; providing for distribution of
proceeds from Minnesota breeders fund; changing notice
provisions and qualifying debts under the revenue
recapture capture act; clarifying the application of
the mortgage registry tax to revolving lines of
credit; changing refund procedure of motor fuels tax;
abolishing the excise tax on boxing; changing the
maximum property tax levy of Duluth port authority;
exempting hot water heating from St. Paul franchise
tax; giving certain powers to the Ramsey-Washington
metro watershed district; creating the Croft
Historical Park board; giving the city of Cloquet
power to contract and levy for public transportation;
providing for the conveyance of certain lands in St.
Louis County and Morrison County; authorizing levy
limit increases for the cities of Breezy Point and
Oakdale; abolishing rent capitalization and providing
for study by the department of revenue; imposing
requirements for disaster relief property tax credits;
changing certain assessment ratios; changing
eligibility for certain assessment ratios; changing
homestead classification treatment; changing property
tax statement requirements; delaying imposition of a
property tax penalty; providing for notice of sale of
certain tax forfeited lands; changing computation of
payments in lieu; requiring tax clearance prior to
issuance of certain licenses; restoring local
government aid payments for 1984; modifying the
computation formula for local government aids;
providing for a local government aids study
commission; changing designation and funding for
enterprise zones; changing procedures and eligibility
for certain business income tax credits; allowing or
increasing income tax deductions for certain dividends
and royalties; restricting tax exemptions for
redevelopment companies; providing grants for plant
expansions; adjusting the computation of taxes on
taconite and iron ore and authorizing certain refunds
and credits; modifying distributions from the proceeds
of the taconite tax; changing computation of
agricultural, homestead, and taconite homestead
credits; allowing taxing districts to levy for certain
purposes; changing the definition of political party
for purposes of the political contribution credit;
changing the income tax pension exclusion; altering
certain gross income modifications; increasing the
tuition deduction; providing for the adjustment of
income under the farm loss modification; providing for
the determination of sales within the state for income
tax purposes; changing or eliminating witholding on
parimutuel winnings and purses; reenacting rental
registration provisions; establishing an agricultural
resource loan guaranty program; regulating charitable
gambling; requiring prompt payment by state agencies;
providing that certain admission taxes are
discretionary with the metropolitan sports facilities
commission; changing certain transfers to the
education aids increase account; exempting sales of
candy by nonprofit youth organizations from the sales
tax; changing certain provisions relating to sales
ratios and property tax appeals; including logging
equipment in the definition of farm machinery;
providing a reduced sales tax rate on capital
equipment and special tooling; exempting hot water and
certain manufactured homes from the sales tax;
exempting certain vehicles used in interstate commerce;
providing that sales of certain leased vehicles are
not exempt; simplifying hydropower lease procedures;
clarifying certain exempt land; modifying the
definition of wetlands; extending availability of
confession of judgment procedures to certain
nonhomestead property; modifying and extending the
targeting credit for certain years; providing property
tax reimbursement for certain transit levies; changing
certain procedures for valuing railroad property;
providing certain refunds for railroad abatements;
appropriating money; amending Minnesota Statutes 1982,
sections 10A.31, subdivisions 3a and 5; 105.482,
subdivisions 8 and 9; 124.2131, subdivision 1; 270.04,
subdivision 2; 270.80, subdivision 4; 270.84,
subdivision 1; 270.86; 270.87; 270A.03, subdivision 5;
270A.08, subdivisions 1 and 2; 271.01, subdivision 5;
271.06, subdivision 6; 272.02, by adding a subdivision;
273.123, by adding subdivisions; 273.13, subdivision
19; 273.135, subdivisions 2 and 5; 273.1391,
subdivisions 2 and 4; 273.19, by adding a subdivision;
279.37, subdivisions 1 and 3; 287.05, by adding
subdivisions; 290.06, by adding a subdivision; 290.08,
by adding a subdivision; 290.19, subdivision 1a;
290.21, by adding a subdivision; 290.61; 290A.04, by
adding a subdivision; 295.44, subdivision 1; 296.18,
subdivisions 3 and 8; 297A.01, subdivision 15, and by
adding subdivisions; 297A.15, by adding a subdivision;
297A.44, subdivision 1; 297B.035, subdivision 3;
298.01; 298.02, subdivision 1; 298.031, subdivision 2;
298.225; 298.24, subdivision 1, and by adding a
subdivision; 298.40, by adding a subdivision; 299.012,
subdivision1; 341.05; 349.11; 349.12; 349.13; 349.14;
349.15; 349.16; 349.17; 349.18; 349.19; 349.20;
349.21; 349.22; 349.31, subdivision 1; 362A.01,
subdivision 1; 362A.05; 458.14; 462.651, subdivision
1, and by adding a subdivision; 473.595, subdivision
1; 477A.13; Minnesota Statutes 1983 Supplement,
sections 16A.15, subdivision 6; 124.2137, subdivision
1; 240.18; 272.02, subdivision 1; 273.11, subdivision
1; 273.13, subdivisions 6, 7, 9, 17, 17b, 17c, and 21;
273.1312, subdivision 4; 273.1314, subdivisions 6, 8,
and 15; 275.125, subdivisions 11a, 11b, and 12a;
276.04; 278.01, subdivision 1; 278.05, subdivision 4;
279.01, subdivision 1; 290.01, subdivisions 20a and
20b; 290.06, subdivision 11; 290.069, subdivisions 1,
2, 4, 5, and by adding subdivisions; 290.089,
subdivision 2; 290.09, subdivision 29; 290.18,
subdivision 2; 290.21, subdivision 4; 290.92,
subdivisions 27 and 28; 290A.04, subdivisions 2e and
2f; 296.14, subdivision 4; 296.18, subdivision 1;
297A.02, subdivision 2, and by adding a subdivision;
297A.14; 297A.25, subdivision 1; 297B.03; 298.28,
subdivision 1; 340.14, subdivision 2; 473.446,
subdivision 1; 477A.013, subdivisions 1 and 2;
477A.0131, subdivision 1; 609.75, subdivision 3;
609.761; amending Laws 1979, chapter 189, section 2;
Laws 1982, Second Special Session, chapter 2, sections
12, as amended, and 14, as amended; Laws 1983, chapter
342,article 1, section 44; 1984 Regular Session, H.F.
No. 1393, article 9, section 9; proposing new law
coded as Minnesota Statutes, chapter 41A; proposing
new law coded in Minnesota Statutes, chapters 16A; 270;
282; 349; 362A; 507; 508; repealing Minnesota Statutes
1982, sections 270.051; 290.06, subdivision 13;
295.44, subdivisions 2, 3, and 4; 349.26; 462.651,
subdivision 2; Minnesota Statutes 1983 Supplement,
sections 273.11, subdivision 7; 290.06, subdivision 2e;
462.651, subdivision 3; 477A.0131, subdivision 2; and
477A.03, subdivision 2; Laws 1983, chapter 342,
article 1, section 8.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
BUDGET RESERVE
Section 1. Minnesota Statutes 1983 Supplement, section
16A.15, subdivision 6, is amended to read:
Subd. 6. [BUDGET RESERVE ACCOUNT.] A budget reserve
account is created in the general fund in the state treasury.
The commissioner of finance on July 1, 1983, shall transfer
$250,000,000 to a the budget reserve account in the general fund
in the state treasury. The commissioner of finance on July 1,
1984, shall transfer an additional $125,000,000 to the budget
reserve account in the general fund. The amounts transferred
shall remain in the budget reserve account until expended under
subdivision 1.
ARTICLE 2
INCOME TAX
Section 1. Minnesota Statutes 1982, section 10A.31,
subdivision 3a, is amended to read:
Subd. 3a. A minor political party as defined in section
10A.01, subdivision 13 qualifies for inclusion on the income tax
form and property tax refund return as provided in subdivision
3, provided that
(1) (a) if a petition is filed, it is filed by June 1 of
the taxable year; or
(b) if the party ran a candidate for statewide office, that
office must have been the office of governor and lieutenant
governor, secretary of state, state auditor, state treasurer, or
attorney general; and
(2) the secretary of state certifies to the commissioner of
revenue by July 1, 1984, and by July 1 of every odd-numbered
year thereafter the parties which qualify as minor political
parties under this subdivision.
A minor party shall be certified only if the secretary of
state determines that the party satisfies the following
conditions:
(a) the party meets the requirements of section 10A.01,
subdivision 13, and in the last applicable election ran a
candidate for the statewide offices listed in clause (1)(b) of
this subdivision;
(b) it is a political party, not a principal campaign
committee;
(c) it has held a state convention in the last two years,
adopted a state constitution, and elected state officers; and
(d) an officer of the party has filed with the secretary of
state a certification that the party held a state convention in
the last two years, adopted a state constitution, and elected
state officers.
Sec. 2. Minnesota Statutes 1982, section 10A.31,
subdivision 5, is amended to read:
Subd. 5. In each calendar year the moneys in each party
account and the general account shall be allocated to candidates
as follows:
(1) 21 percent for the offices of governor and lieutenant
governor together;
(2) 3.6 percent for the office of attorney general;
(3) 1.8 percent each for the offices of secretary of state,
state auditor and state treasurer;
(4) In each calendar year during the period in which state
senators serve a four year term, 23-1/3 percent for the office
of state senator and 46-2/3 percent for the office of state
representative;
(5) In each calendar year during the period in which state
senators serve a two year term, 35 percent each for the offices
of state senator and state representative;
(6) To assure that moneys will be returned to the counties
from which they were collected, and to assure that the
distribution of those moneys rationally relates to the support
for particular parties or for particular candidates within
legislative districts, moneys from the party accounts for
legislative candidates shall be distributed as follows:
Each candidate for the state senate and state house of
representatives whose name is to appear on the ballot in the
general election shall receive moneys from his party account set
aside for candidates of the state senate or state house of
representatives, whichever applies, according to the following
formula;
For each county within his district the candidate's share
of the dollars allocated in that county to his party account and
set aside for that office shall be:
(a) The sum of the votes cast in the last general election
in that part of the county in his district for all candidates of
his party (i) whose names appeared on the ballot in each voting
precinct of the state and (ii) for the state senate and state
house of representatives, divided by
(b) The sum of the votes cast in that county in the last
general election for all candidates of his party (i) whose names
appeared on the ballot in each voting precinct in the state and
(ii) for the state senate and state house of representatives,
multiplied by
(c) The amount in his party account allocated in that
county and set aside for the candidates for the office for which
he is a candidate.
The sum of all the county shares calculated in the formula
above is the candidate's share of his party account.
In a year in which an election for the state senate occurs,
with respect to votes for candidates for the state senate only,
"last general election" means the last general election in which
an election for the state senate occurred.
For any party under whose name no candidate's name appeared
on the ballot in each voting precinct in the state in the last
general election, "last general election" means the last general
election in which the name of a candidate of that party appeared
on the ballot in each voting precinct in the state amounts in
the party's account shall be allocated based on (a) the number
of people voting in the last general election in that part of
the county in his district, divided by (b) the number of the
people voting in that county in the last general election,
multiplied by (c) the amount in his party account allocated in
that county and set aside for the candidates for the office for
which he is a candidate.
Sec. 3. Minnesota Statutes 1983 Supplement, section
290.01, subdivision 20a, is amended to read:
Subd. 20a. [MODIFICATIONS INCREASING FEDERAL ADJUSTED
GROSS INCOME.] There shall be added to federal adjusted gross
income:
(1) Interest income on obligations of any state other than
Minnesota or a political subdivision of any other state exempt
from federal income taxes under the Internal Revenue Code of
1954;
(2) Income taxes imposed by this state or any other taxing
jurisdiction, to the extent deductible in determining federal
adjusted gross income and not credited against federal income
tax;
(3) Interest on indebtedness incurred or continued to
purchase or carry securities the income from which is exempt
from tax under this chapter, to the extent deductible in
determining federal adjusted gross income;
(4) In the case of a change of residence from Minnesota to
another state or nation, the amount of moving expenses which
exceed total reimbursements and which were therefore deducted in
arriving at federal adjusted gross income;
(5) The amount of any increase in the taxpayer's federal
tax liability under section 47 of the Internal Revenue Code of
1954 to the extent of the credit under section 38 of the
Internal Revenue Code of 1954 that was previously allowed as a
deduction under Minnesota Statutes 1982, section 290.01,
subdivision 20b, clause (7);
(6) Expenses and losses arising from a farm which are not
allowable under section 290.09, subdivision 29;
(7) Expenses and depreciation attributable to substandard
buildings disallowed by section 290.101;
(8) The amount by which the gain determined pursuant to
section 41.59, subdivision 2 exceeds the amount of such gain
included in federal adjusted gross income;
(9) To the extent deducted in computing the taxpayer's
federal adjusted gross income for the taxable year, losses
recognized upon a transfer of property to the spouse or former
spouse of the taxpayer in exchange for the release of the
spouse's marital rights;
(10) Interest income from qualified scholarship funding
bonds as defined in section 103(e) of the Internal Revenue Code
of 1954, if the nonprofit corporation is domiciled outside of
Minnesota;
(11) Exempt-interest dividends, as defined in section
852(b)(5)(A) of the Internal Revenue Code of 1954, not included
in federal adjusted gross income pursuant to section
852(b)(5)(B) of the Internal Revenue Code of 1954, except for
that portion of exempt-interest dividends derived from interest
income on obligations of the state of Minnesota, any of its
political or governmental subdivisions, any of its
municipalities, or any of its governmental agencies or
instrumentalities;
(12) The amount of any excluded gain recognized by a trust
on the sale or exchange of property as defined in section
641(c)(1) of the Internal Revenue Code of 1954;
(13) To the extent not included in the taxpayer's federal
adjusted gross income, the amount of any gain, from the sale or
other disposition of property having a lower adjusted basis for
Minnesota income tax purposes than for federal income tax
purposes. This modification shall not exceed the difference in
basis. If the gain is considered a long term capital gain for
federal income tax purposes, the modification shall be limited
to 40 percent of the portion of the gain. This modification is
limited to property that qualified for the equity investment
credit contained in section 290.069, subdivision 4, and to
property acquired in exchange for the release of the taxpayer's
marital rights contained in section 290.14, clause (7);
(14) The amount of any loss from a source outside of
Minnesota which is not allowed under section 290.17 including
any capital loss or net operating loss carryforwards or
carrybacks resulting from the loss;
(15) To the extent deducted in computing the taxpayer's
federal adjusted gross income, interest, taxes and other
expenses which are not allowed under section 290.10, clause (9)
or (10);
(16) The deduction for two-earner married couples provided
in section 221 of the Internal Revenue Code of 1954;
(17) Losses from the business of mining as defined in
section 290.05, subdivision 1, clause (a) which is not subject
to the Minnesota income tax;
(18) Expenses and depreciation attributable to property
subject to Laws 1982, chapter 523, article 7, section 3 which
has not been registered;
(19) The amount of contributions to an individual
retirement account, including a qualified voluntary employee
contribution, simplified employee pension plan, or self-employed
retirement plan which is allowed under sections 311 and 312 of
Public Law Number 97-34, section 238 of Public Law Number
97-248, and section 103(d)(1)(B) of Public Law Number 97-448 to
the extent those contributions were not an allowable deduction
prior to the enactment of that law; provided that an individual
on whose behalf stock worth less than $300 is contributed during
the taxable year to a tax credit employee stock ownership plan
that satisfies the requirements of sections 44G and 409A of the
Internal Revenue Code of 1954 shall not be required, as a
consequence of that contribution, to include contributions to
another plan or account in gross income under this clause to the
extent the contributions do not exceed the difference between
the value of the stock contributed during the taxable year and
$1,500; and
(20) To the extent not included in the taxpayer's federal
adjusted gross income, the amount of any contributions to a
qualified pension plan, designated as employee contributions but
which the employing unit picks up and which are treated as
employer contributions pursuant to section 414(h)(2) of the
Internal Revenue Code of 1954, provided that employee
contributions to police and fire relief associations that
previously were not included within gross income as
contributions to organizations qualified under section 501(c)(4)
of the Internal Revenue Code of 1954 shall not be included in
gross income under this clause.
Sec. 4. Minnesota Statutes 1983 Supplement, section
290.01, subdivision 20b, is amended to read:
Subd. 20b. [MODIFICATIONS REDUCING FEDERAL ADJUSTED GROSS
INCOME.] There shall be subtracted from federal adjusted gross
income:
(1) Interest income on obligations of any authority,
commission or instrumentality of the United States to the extent
includible in gross income for federal income tax purposes but
exempt from state income tax under the laws of the United States;
(2) The portion of any gain, from the sale or other
disposition of property having a higher adjusted basis for
Minnesota income tax purposes than for federal income tax
purposes, that does not exceed such difference in basis; but if
such gain is considered a long-term capital gain for federal
income tax purposes, the modification shall be limited to 40 per
centum of the portion of the gain. This modification shall not
be applicable if the difference in basis is due to disallowance
of depreciation pursuant to section 290.101.
(3) Income from the performance of personal or professional
services which is subject to the reciprocity exclusion contained
in section 290.081, clause (a);
(4) Losses, not otherwise reducing federal adjusted gross
income assignable to Minnesota, arising from events or
transactions which are assignable to Minnesota under the
provisions of sections 290.17 to 290.20, including any capital
loss or net operating loss carryforwards or carrybacks or out of
state loss carryforwards resulting from the losses, and
including any farm loss carryforwards or carrybacks;
(5) If included in federal adjusted gross income, the
amount of any credit received, whether received as a refund or
credit to another taxable year's income tax liability, pursuant
to chapter 290A, and the amount of any overpayment of income tax
to Minnesota, or any other state, for any previous taxable year,
whether the amount is received as a refund or credited to
another taxable year's income tax liability;
(6) To the extent included in federal adjusted gross
income, or the amount reflected as the ordinary income portion
of a lump sum distribution under section 402(e) of the Internal
Revenue Code of 1954, notwithstanding any other law to the
contrary, the amount received by any person (i) from the United
States, its agencies or instrumentalities, the Federal Reserve
Bank or from the state of Minnesota or any of its political or
governmental subdivisions or from any other state or its
political or governmental subdivisions, or a Minnesota volunteer
firefighter's relief association, by way of payment as a
pension, public employee retirement benefit, or any combination
thereof, (ii) as a retirement or survivor's benefit made from a
plan qualifying under section 401, 403, 404, 405, 408, 409 or
409A of the Internal Revenue Code of 1954, or (iii) severance
pay distributed to an individual upon discontinuance of the
individual's employment due to termination of business
operations by the individual's employer, provided that the
termination is reasonably likely to be permanent, involves the
discharge of at least 75 percent of the employees at that site
within a one-year period, and the business is not acquired by
another person who continues operations at that site. The
maximum amount of this subtraction shall be $11,000 less the
amount by which the individual's federal adjusted gross income,
plus the ordinary income portion of a lump sum distribution as
defined in section 402(e) of the Internal Revenue Code of 1954,
exceeds $17,000. For purposes of this clause, "severance pay"
means an amount received for cancellation of an employment
contract or a collectively bargained termination payment made as
a substitute for income which would have been earned for
personal services to be rendered in the future. In the case of
a volunteer firefighter who receives an involuntary lump sum
distribution of his pension or retirement benefits, the maximum
amount of this subtraction shall be $11,000; this subtraction
shall not be reduced by the amount of the individual's federal
adjusted gross income in excess of $17,000 Pension income as
provided by section 7;
(7) To the extent included in the taxpayer's federal
adjusted gross income for the taxable year, gain recognized upon
a transfer of property to the spouse or former spouse of the
taxpayer in exchange for the release of the spouse's marital
rights;
(8) The amount of any distribution from a qualified pension
or profit sharing plan included in federal adjusted gross income
in the year of receipt to the extent of any contribution not
previously allowed as a deduction by reason of a change in
federal law which was not adopted by Minnesota law for a taxable
year beginning in 1974 or later;
(9) Interest, including payment adjustment to the extent
that it is applied to interest, earned by the seller of the
property on a family farm security loan executed before January
1, 1986 that is guaranteed by the commissioner of agriculture as
provided in sections 41.51 to 41.60;
(10) The first $3,000 of compensation for personal services
in the armed forces of the United States or the United Nations,
and the next $2,000 of compensation for personal services in the
armed forces of the United States or the United Nations wholly
performed outside the state of Minnesota. This modification
does not apply to compensation defined in subdivision 20b,
clause (6);
(11) The amount of any income earned for personal services
rendered outside of Minnesota prior to the date when the
taxpayer became a resident of Minnesota. This modification does
not apply to compensation defined in subdivision 20b, clause (6);
(12) In the case of wages or salaries paid or incurred on
or after January 1, 1977, the amount of any credit for
employment of certain new employees under sections 44B and 51 to
53 of the Internal Revenue Code of 1954 which is claimed as a
credit against the taxpayer's federal tax liability, but only to
the extent that the credit is connected with or allocable
against the production or receipt of income included in the
measure of the tax imposed by this chapter;
(13) In the case of work incentive program expenses paid or
incurred on or after January 1, 1979, the amount of any credit
for expenses of work incentive programs under sections 40, 50A
and 50B of the Internal Revenue Code of 1954 which is claimed as
a credit against the taxpayer's federal tax liability, but only
to the extent that the credit is connected with or allocable
against the production or receipt of income included in the
measure of the tax imposed by this chapter;
(14) Unemployment compensation to the extent includible in
gross income for federal income tax purposes under section 85 of
the Internal Revenue Code of 1954;
(15) The amount of any income or gain which is not
assignable to Minnesota under the provisions of section 290.17;
(16) Interest earned on a contract for deed entered into
for the sale of property for agricultural use if the rate of
interest set in the contract is no more than nine percent per
year for the duration of the term of the contract. This
exclusion shall be available only if (1) the purchaser is an
individual who, together with his spouse and dependents, has a
total net worth valued at less than $150,000 and (2) the
property sold under the contract is farm land as defined in
section 41.52, subdivision 6 of no more than 1,000 acres that
the purchaser intends to use for agricultural purposes.
Compliance with these requirements shall be stated in an
affidavit to be filed with the first income tax return on which
the taxpayer claims the exclusion provided in this clause. Upon
request accompanied by the information necessary to make the
determination, the commissioner shall determine whether interest
to be paid on a proposed transaction will qualify for this
exclusion; the determination shall be provided within 30 days of
receipt of the request, unless the commissioner finds it
necessary to obtain additional information, or verification of
the information provided, in which case the determination shall
be provided within 30 days of receipt of the final item of
information or verification. The exclusion provided in this
clause shall apply to interest earned on contracts for deed
entered into after December 31, 1981 and before July 1, 1983;
(17) Income from the business of mining as defined in
section 290.05, subdivision 1, clause (a) which is not subject
to the Minnesota income tax;
(18) To the extent included in federal adjusted gross
income, distributions from a qualified governmental pension plan
which represent a return of designated employee contributions to
the plan and which contributions were included in gross income
pursuant to subdivision 20a, clause (20); and
(19) To the extent included in federal adjusted gross
income, distributions from an individual retirement account
which represent a return of designated employee contributions if
the contributions were included in gross income pursuant to
subdivision 20a, clause (19). The distribution shall be
allocated first to return of contributions included in gross
income until the amount of the contributions has been exhausted.
Sec. 5. Minnesota Statutes 1983 Supplement, section
290.06, subdivision 11, is amended to read:
Subd. 11. [CONTRIBUTIONS TO POLITICAL PARTIES AND
CANDIDATES.] A taxpayer may take a credit against the tax due
under this chapter of 50 percent of his contributions to
candidates for elective state or federal public office and to
any political party. The maximum credit for an individual shall
not exceed $50 and, for a married couple filing jointly or
filing a combined return, shall not exceed $100. No credit
shall be allowed under this subdivision for a contribution to
any candidate, other than a candidate for elective judicial
office or federal office, who has not signed an agreement to
limit his campaign expenditures as provided in section 10A.32,
subdivision 3b. For purposes of this subdivision, a political
party means a major political party as defined in section
200.02, subdivision 7, or a minor political party qualifying for
inclusion on the income tax or property tax refund form under
section 10A.31, subdivision 3a. A major or minor party includes
the aggregate of the party organization within each house of the
legislature, the state party organization, and the party
organization within congressional districts, counties,
legislative districts, municipalities, and precincts. A
"federal office" means the office of the president or vice
president of the United States or the office of United States
senator or congressman from Minnesota.
This credit shall be allowed only if the contribution is
verified in the manner the commissioner of revenue shall
prescribe.
Sec. 6. Minnesota Statutes 1982, section 290.06, is
amended by adding a subdivision to read:
Subd. 19. [CONSERVATION TILLAGE FARM EQUIPMENT; CREDIT.]
(a) A credit is allowed against the tax imposed by this chapter
in an amount equal to ten percent of the net cost of
conservation tillage planters.
(b) The credit for a taxable year may not exceed the
liability for tax. "Liability for tax" means the tax imposed
under this chapter for the taxable year reduced by the sum of
any nonrefundable credits allowed under this chapter except the
credit provided in section 290.068. The amount of any unused
credit for a taxable year shall be a carryback to each of the
preceding three taxable years and a carryover to each of the
succeeding five taxable years. The entire amount of the credit
shall be carried to the earliest of the taxable years to which
it may be carried.
(c) For the purposes of sections 290.46 and 290.50, if the
claim for refund relates to an overpayment attributable to a
carryback under this subdivision, in lieu of the period of
limitation prescribed in sections 290.46 and 290.50, the period
of limitation shall be that period which ends with the
expiration of the 15th day of the 46th month, or the 45th month,
in the case of a corporation, following the end of the taxable
year in which the credit arises which results in the carryback.
With respect to any portion of a credit carryback from a taxable
year attributable to a loss carryback from a subsequent taxable
year, the period of limitations shall be that period which ends
with the expiration of the 15th day of the 46th month, or, in
the case of a corporation, the 45th month following the end of
the subsequent taxable year. In any case in which a taxpayer is
entitled to a refund in a carryback year due to the carryback,
interest shall be computed only from the end of the taxable year
in which the credit arises. With respect to any portion of a
credit carryback from a taxable year attributable to a loss
carryback from a subsequent taxable year, interest shall be
computed from the end of the subsequent taxable year.
(d) For purposes of this subdivision, the following terms
have the meanings given:
(1) "Conservation tillage planters" means planters or
planting attachments designed and configured in a manner to
plant row or small grain crops under a no-till, ridge-till, or
strip-till method of conservation tillage.
(2) "No-till" means a conservation tillage system in which
the soil is left undisturbed prior to planting and planting is
completed in a narrow seedbed approximately one to three inches
wide.
(3) "Ridge-till" means a conservation tillage system in
which the soil is left undisturbed prior to planting and
approximately one-third of the soil surface is tilled at
planting with sweeps or row cleaners. Planting is completed on
ridges several inches higher than the row middles.
(4) "Strip-till" means a conservation tillage system in
which the soil is left undisturbed prior to planting and
approximately one-third of the soil surface is tilled at
planting using a rototiller, inrow chisel, row cleaner, or other
similar conservation tillage equipment.
Sec. 7. Minnesota Statutes 1982, section 290.08, is
amended by adding a subdivision to read:
Subd. 26. [PENSION INCOME.] (a) [EXCLUSION.] Gross income
shall not include the taxpayer's pension income. The maximum
amount of this exclusion is the greater of the following two
amounts:
(1) $11,000 reduced by the amount of the taxpayer's federal
adjusted gross income in excess of $17,000; or
(2) $11,000 reduced by the sum of
(A) social security benefits,
(B) railroad retirement benefits, and
(C) the excess over $23,000 of federal adjusted gross
income, but excluding social security benefits and railroad
retirement benefits to the extent included in federal adjusted
gross income.
(3) Notwithstanding clauses (1) and (2), in the case of an
involuntary lump sum distribution of pension or retirement
benefits to volunteer firefighters, the maximum amount of the
exclusion is $11,000. This amount is not subject to reduction
for other income of the taxpayer.
(4) Pension income consisting of severance pay qualifies
only for the exclusion computed according to paragraph (a),
clause (1).
(b) [DEFINITIONS.] For purposes of this subdivision the
following terms have the meanings given:
(1) "Internal Revenue Code" means the Internal Revenue Code
of 1954, as amended through December 31, 1983.
(2) "Federal adjusted gross income" is the federal adjusted
gross income referred to in section 290.01, subdivision 20, for
the current taxable year, and includes the ordinary income
portion of a lump sum distribution as defined in section 402(e)
of the Internal Revenue Code.
(3) "Pension income" means to the extent included in the
taxpayer's federal adjusted gross income the amount received by
the taxpayer
(A) from the United States, its agencies or
instrumentalities, the Federal Reserve Bank or from the state of
Minnesota or any of its political or governmental subdivisions
or from any other state or its political or governmental
subdivisions, or a Minnesota volunteer firefighter's relief
association, by way of payment as a pension, public employee
retirement benefit, or any combination thereof,
(B) as a retirement or survivor's benefit made from a plan
qualifying under section 401, 403, 404, 405, 408, 409, or 409A
of the Internal Revenue Code, or
(C) severance pay distributed to an individual upon
discontinuance of the individual's employment due to termination
of business operations by the individual's employer, if the
termination is reasonably likely to be permanent, involves the
discharge of at least 75 percent of the employees at that site
within a one-year period, and the business is not acquired by
another person who continues operations at that site.
(4) "Severance pay" means an amount received for
cancellation of an employment contract or a collectively
bargained termination payment made as a substitute for income
which would have been earned for personal services to be
rendered in the future.
Sec. 8. Minnesota Statutes 1983 Supplement, section
290.089, subdivision 2, is amended to read:
Subd. 2. [ITEMIZED DEDUCTIONS.] Subject to the provisions
of section 290.18, subdivision 1, an amount equal to the amount
determined pursuant to section 63(f) of the Internal Revenue
Code is allowed with the following adjustments:
(a) Add the amount paid to others not to exceed $500 $650
for each dependent in grades K to 6 and $700 $1,000 for each
dependent in grades 7 to 12, for tuition, textbooks, and
transportation of each dependent in attending an elementary or
secondary school situated in Minnesota, North Dakota, South
Dakota, Iowa, or Wisconsin, wherein a resident of this state may
legally fulfill the state's compulsory attendance laws, which is
not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363. As used in this
clause, "textbooks" includes books and other instructional
materials and equipment used in elementary and secondary schools
in teaching only those subjects legally and commonly taught in
public elementary and secondary schools in this state.
"Textbooks" does not include instructional books and materials
used in the teaching of religious tenets, doctrines, or worship,
the purpose of which is to instill such tenets, doctrines, or
worship, nor does it include books or materials for, or
transportation to, extracurricular activities including sporting
events, musical or dramatic events, speech activities, driver's
education, or similar programs;
(b) Add the amount of Minnesota and other states' estate or
inheritance taxes which were allowed as a deduction under
section 290.077, subdivision 4, on income in respect of a
decedent;
(c) Add the amount by which the deduction for the taxable
year allowed pursuant to subdivision 4 exceeds the amount
determined pursuant to section 222 of the Internal Revenue Code;
(d) Subtract income taxes paid or accrued within the
taxable year under this chapter;
(e) Subtract income taxes paid to any other state or to any
province or territory of Canada if a credit is allowed for the
taxes under section 290.081;
(f) If the deduction computed under section 164 of the
Internal Revenue Code is not reduced by the amount of the credit
or refund allowed under chapter 290A, subtract that amount;
(g) Subtract the amount of interest on investment
indebtedness paid or accrued in a taxable year beginning before
January 1, 1981, which has been carried forward and is allowed
as a deduction in the taxable year under section 163(d) of the
Internal Revenue Code;
(h) Subtract the amount of charitable contributions
deducted under section 170 of the Internal Revenue Code that (i)
exceeds the following limitations: (A) an overall limit of 30
percent of the taxpayer's Minnesota gross income which, for
purposes of this paragraph, shall include the ordinary income
portion of a lump sum distribution as defined in section 402(e)
of the Internal Revenue Code; and (B) the aggregate of
contributions to organizations described in section 290.21,
subdivision 3, clause (c) shall not exceed 20 percent of the
taxpayer's Minnesota gross income; or (ii) was deducted as a
carryover under section 170(d) of the Internal Revenue Code.
Sec. 9. Minnesota Statutes 1983 Supplement, section
290.09, subdivision 29, is amended to read:
Subd. 29. [DEDUCTIONS ATTRIBUTABLE TO FARMING.] (a) [
DEFINITIONS.] For purposes of this subdivision, income and gains
and expenses and losses shall be considered as "arising from a
farm" if such items are received or incurred in connection with
cultivating the soil, or in connection with raising or
harvesting any agricultural or horticultural commodity,
including the raising, shearing, feeding, caring for, training,
and management of livestock, including horses for horse racing,
bees, poultry, and fur-bearing animals and wildlife, and all
operations incident thereto, including but not limited to the
common use of "hedging."
(b) [DEDUCTIONS LIMITED.] Except as provided in this
subdivision, expenses and losses, except for interest and taxes,
arising from a farm shall not be allowed as deductions in excess
of income and gains arising from a farm.
(c) [DEDUCTIONS ALLOWED; CARRYOVER DEDUCTIONS.] Expenses
and losses arising from a farm or farms shall be allowed as
deductions up to the amount of the income and gains arising from
a farm or farms in any taxable year, plus the first $30,000 of
nonfarm gross income, or nonfarm taxable net income in the case
of a corporation, provided however that in any case where
nonfarm income exceeds $30,000, the maximum allowable amount of
$30,000 shall be reduced by an amount equal to the nonfarm
income in excess of $30,000 multiplied by three. For this
purpose and for the purpose of applying the limitation in the
following paragraph regarding the application of any carryback
or carryforward, the term gross income shall include the
ordinary income portion of a lump sum distribution as defined in
section 402(e) of the Internal Revenue Code of 1954, as amended
through December 31, 1981, and no deduction shall be allowed for
two-earner married couples as provided in section 221 of the
Internal Revenue Code of 1954, as amended through December 31,
1981. Any remaining balance of the deductions shall be carried
back three years and carried forward five years, in
chronological order, provided, however, that in any case in
which any individual, estate or trust which elects a net
operating loss carryforward under section 172(b)(3)(C) of the
Internal Revenue Code of 1954, as amended through December 31,
1981, such losses shall not be carried back but shall only be
carried forward.
Current expenses and losses shall be utilized as deductions
in any taxable year, to the extent herein allowable, prior to
the application of any carryback or carryover deductions. In
any event, the combined amounts of such current expenses and
losses and carryback or carryover deductions shall be allowed as
deductions up to the amount of the income and gains arising from
a farm or farms in any taxable year, plus the first $30,000 of
nonfarm gross income, or nonfarm taxable net income in the case
of a corporation, provided however that in any case where
nonfarm income exceeds $30,000, the maximum allowable amount of
$30,000 shall be reduced by an amount equal to the nonfarm
income in excess of $30,000 multiplied by three. For taxable
years beginning after December 31, 1984, the $30,000 amount in
this subdivision shall be adjusted for inflation in the manner
provided in section 290.06, subdivision 2d. The commissioner
shall round that amount to the nearest hundred dollar amount.
When adjusting the amount for inflation, the commissioner shall
use the actual dollar amount of the maximum allowable amount of
nonfarm income prior to rounding. Carryback or carryover
deductions will be subject to the maximum amount in effect for
the year to which the deduction is carried.
(d) [SHAREHOLDERS SEPARATE ENTITIES.] For purposes of this
subdivision, individual shareholders of an S corporation shall
be considered separate entities.
(e) [SPECIAL PERIOD OF LIMITATION WITH RESPECT TO FARM LOSS
LIMITATION CARRYBACKS.] For the purposes of sections 290.46 and
290.50, if the claim for refund relates to an overpayment
attributable to a farm loss limitation carryback under this
subdivision, in lieu of the period of limitation prescribed in
sections 290.46 and 290.50, the period of limitation shall be
that period which ends with the expiration of the 15th day of
the 46th month (or the 45th month, in the case of a corporation)
following the end of the taxable year of the farm loss which
results in the carryback. During this extended period, married
individuals who elected to file separate returns or a combined
return may change their election and file a joint return.
(f) [INTEREST ON CLAIMS.] In any case in which a taxpayer
is entitled to a refund in a carryback year due to the carryback
of a farm loss, interest shall be computed only from the end of
the taxable year in which the loss occurs.
(g) [ORDER OF APPLICATION.] The application of this
subdivision shall be made after applying any limitation to out
of state losses contained in section 290.17.
Sec. 10. Minnesota Statutes 1983 Supplement, section
290.18, subdivision 2, is amended to read:
Subd. 2. [FEDERAL INCOME TAX PAYMENTS AND REFUNDS.] The
adjusted gross income shall be computed by deducting from the
gross income assignable to this state under section 290.17, the
deduction for allowable federal income taxes determined under
the provisions of sections 290.09, subdivision 4, 290.10 (8),
(9) or (10), and 290.18. For purposes of the preceding
sentence, federal income tax shall include the foreign tax
credit allowed under section 33 of the Internal Revenue Code of
1954, as amended through December 31, 1983.
This deduction shall be allowed to individuals, estates, or
trusts (i) for taxable years beginning after December 31, 1980
in the taxable year to which the liability applies. Such
liability includes the portion of self-employment tax allowed
under section 290.10, clause (8). The self-employment tax must
be deducted by the person who is deriving the income. When the
federal tax liability is joint and several under the computation
of a joint federal return of husband and wife, the federal tax
liability must be split between the spouses in the same ratio
that the federal adjusted gross income of that spouse bears to
the total federal adjusted gross income. For purposes of the
preceding sentence, "federal adjusted gross income" includes the
ordinary income portion of a lump sum distribution as defined in
section 402(e) of the Internal Revenue Code of 1954, as amended
through December 31, 1981.
(ii) Taxes paid for a taxable year beginning before January
1, 1981 shall be allowed as follows:
(1) Those taxes paid in a taxable year beginning before
January 1, 1981, shall be claimed in the year in which the
payment was made.
(2) Those paid in a taxable year beginning after December
31, 1980 but before January 1, 1983 shall be divided and
deducted in equal installments reflected by the yearly periods
beginning with the first day of the taxable year in which the
payment was made and ending December 31, 1986. For an amount
which remains to be deducted in a taxable year beginning after
December 31, 1982, where the federal tax liability for the year
in which the payment was made is joint and several under the
computation of a joint federal return of husband and wife, the
remaining amounts to be deducted shall be claimed by the same
spouse and in the same dollar amount as the deduction was
claimed in the first taxable year beginning after December 31,
1981.
(3) Those paid in a taxable year beginning after December
31, 1982 shall be claimed in the year in which the payment was
made. This amount shall be apportioned between spouses as
provided in clause (i) and shall be allocated for exempt income
under the provisions of section 290.10, clause (9) or (10) as
though the payment was part of the federal tax liability for the
year in which the payment was made.
(4) In the case of a person who was self employed during
all or a portion of the taxable year, the federal income tax
liability for purposes of this clause shall be increased by the
self-employment tax allowed under section 290.10, clause (8).
The self-employment tax shall be deducted in the year paid as
provided in paragraph (1), (2), or (3). The self-employment tax
must be deducted by the person who earned the income.
Self-employment tax paid in a taxable year beginning after
December 31, 1982 shall be allocated for exempt income as
provided in paragraph (3).
(iii) If a taxpayer's federal tax liability is eventually
not paid by reason of compromise, discharge, or court order, the
deduction allowed pursuant to this subdivision shall be
disallowed for the taxable year in which the liability was
accrued.
(iv) In the event a federal tax liability for a taxable
year commencing after December 31, 1980 is increased, decreased
or modified, and such increase, decrease or modification has
resulted in a change in the amount of Minnesota income tax in
the year to which such increase, decrease or modification is
attributable, the taxpayer's deduction under this subdivision
shall be modified for such year.
(v) If the readjustments required in (iii) or (iv) are for
taxes reflected in the transition rule described in (ii)(2), the
readjustment shall be made equally to the remaining installments
and if a reduction to such installments is required under this
readjustment which exceeds the total of all remaining
installments, the remaining installments will be reduced to zero
and the excess included in income as a federal income tax refund.
(vi) Refunds which are not involved with any readjustments
under the transition rule shall be included in income under
Minnesota Statutes 1982, section 290.01, subdivision 20a, clause
(6) if it is from a year beginning before January 1, 1981.
(vii) Refunds of taxes for years beginning after December
31, 1980, shall be used to adjust the deduction in the taxable
year of the liability unless that year is closed by statute and
no other adjustments are to be required or allowable in which
case such refund shall be reportable in the year received.
Sec. 11. Minnesota Statutes 1982, section 290.19,
subdivision 1a, is amended to read:
Subd. 1a. [DETERMINATION OF SALES MADE WITHIN THIS STATE.]
For purposes of this section the following rules shall apply in
determining whether or not sales are made within this state.
Sales of tangible personal property are made within this
state if the property is delivered or shipped to received by a
purchaser at a point within this state, and the taxpayer is
taxable in this state, regardless of the f.o.b. point or, other
conditions of the sale, or the ultimate destination of the
property. However, when intoxicating liquor, wine, fermented
malt beverages, cigarettes, or tobacco products are sold to a
purchaser who is licensed by a state or political subdivision to
resell this property only within the state of ultimate
destination, the sale is made in that state. Tangible personal
property delivered to a common or contract carrier or foreign
vessel for delivery to a purchaser in another state or nation is
a sale in that state or nation, regardless of f.o.b. point or
other conditions of the sale.
Sales made by or through a corporation which is qualified
as a domestic international sales corporation under section 992
of the Internal Revenue Code of 1954, as amended through
December 31, 1981, shall not be considered to have been made
within this state.
Sec. 12. Minnesota Statutes 1982, section 290.61, is
amended to read:
290.61 [PUBLICITY OF RETURNS, INFORMATION.]
It shall be unlawful for the commissioner or any other
public official or employee to divulge or otherwise make known
in any manner any particulars set forth or disclosed in any
report or return required by this chapter, or any information
concerning, the taxpayer's affairs acquired from his or its
records, officers, or employees while examining or auditing any
taxpayer's liability for taxes imposed hereunder, except in
connection with a proceeding involving taxes due under this
chapter from the taxpayer making such return or to comply with
the provisions of sections 290.612 and 302A.821. The
commissioner may furnish a copy of any taxpayer's return to any
official of the United States or of any state having duties to
perform in respect to the assessment or collection of any tax
imposed upon or measured by income, if such taxpayer is required
by the laws of the United States or of such state to make a
return therein. The commissioner may disclose information from
withholding tax returns received from the taxpayer to the
Minnesota department of economic security for purposes of
auditing unemployment tax. Prior to the release of any
information to any official of the United States or any other
state or the department of economic security under the
provisions of this section, the person to whom the information
is to be released shall sign an agreement which provides that he
will protect the confidentiality of the returns and information
revealed thereby to the extent that it is protected under the
laws of the state of Minnesota. The commissioner and all other
public officials and employees shall keep and maintain the same
secrecy in respect to any information furnished by any
department, commission, or official of the United States or of
any other state in respect to the income of any person as is
required by this section in respect to information concerning
the affairs of taxpayers under this chapter. Nothing herein
contained shall be construed to prohibit the commissioner from
publishing statistics so classified as not to disclose the
identity of particular returns or reports and the items
thereof. Upon request of a majority of the members of the
senate tax committee or of the house tax committee or the tax
study commission, the commissioner shall furnish abstracted
financial information to those committees for research purposes
from returns or reports filed pursuant to this chapter, provided
that he shall not disclose the name, address, social security
number, business identification number or any other item of
information associated with any return or report which the
commissioner believes is likely to identify the taxpayer. The
commissioner shall not furnish the actual return, or a portion
thereof, or a reproduction or copy of any return or portion
thereof. "Abstracted financial information" means only the
dollar amounts set forth on each line on the form including the
filing status.
Any person violating the provisions of this section shall
be guilty of a gross misdemeanor.
In order to locate the named payee on state warrants issued
pursuant to this chapter or chapter 290A and undeliverable by
the United States postal service, the commissioner may publish
in any English language newspaper of general circulation in this
state a list of the name and last known address of the payee as
shown on the reports or returns filed with the commissioner.
The commissioner may exclude the names of payees whose refunds
are in an amount which is less than a minimal amount to be
determined by the commissioner. The published list shall not
contain any particulars set forth on any report or return. The
publication shall include instructions on claiming the warrants.
An employee of the department of revenue may, in connection
with his official duties relating to any audit, collection
activity, or civil or criminal tax investigation or any other
offense under this chapter, disclose return information to the
extent that such disclosure is necessary in obtaining
information, which is not otherwise reasonably available, with
respect to the correct determination of tax, liability for tax,
or the amount to be collected or with respect to the enforcement
of any other provision of this chapter.
In order to facilitate processing of returns and payments
of taxes required by this chapter, the commissioner may contract
with outside vendors and may disclose private and nonpublic data
to the vendor. The data disclosed will be administered by the
vendor consistent with this section.
Information from a tax return required under this chapter
on a holder of a license issued by the Minnesota racing
commission or an owner of a horse may be provided by the
commissioner to the Minnesota racing commission.
Sec. 13. Minnesota Statutes 1983 Supplement, section
290.92, subdivision 27, is amended to read:
Subd. 27. Any holder of a class A, B, or D license issued
by the Minnesota horse racing commission, who makes a payment or
payments for winnings on a pari-mutuel betting ticket or tickets
in an amount of $200 or more to the same individual, shall
deduct from the payment or payments and withhold 11 ten percent
of the amount the payment of winnings which are subject to
withholding as Minnesota withholding tax. For purposes of this
subdivision, winnings from a pari-mutuel betting ticket must be
determined by reducing the amount received by the amount paid
for the ticket, and payments for winning on a pari-mutuel
betting ticket which are not money must be taken into account at
their fair market value the term "winnings which are subject to
withholding" has the meaning given in section 3402(q)(3) of the
Internal Revenue Code of 1954, as amended through December 31,
1983. For purposes of the provisions of this section, a payment
to any person of winnings which are subject to withholding must
be treated as if the payment was a wage paid by an employer to
an employee. Every individual who is to receive a payment of
winnings which are subject to withholding shall furnish the
license holder with a statement, made under the penalties of
perjury, containing the name, address, and social security
account number of the person receiving the payment and of each
person entitled to any portion of such payment. The license
holder is liable for the payment of the tax required to be
withheld under this subdivision and subdivision 28 but is not
liable to any person for the amount of the payment.
Sec. 14. Minnesota Statutes 1983 Supplement, section
290.92, subdivision 28, is amended to read:
Subd. 28. Any holder of a class A or B license issued by
the Minnesota horse racing commission who makes a payment to a
holder of a class C license issued by the commission, or who
pays except an amount paid as a purse, shall deduct from the
payment and withhold seven percent of the amount as Minnesota
withholding tax when the amount paid to that individual during
the calendar year exceeds $200 $600. For purposes of the
provisions of this section, a payment to any person which is
subject to withholding under this subdivision must be treated as
if the payment was a wage paid by an employer to an employee.
Every individual who is to receive a payment which is subject to
withholding under this subdivision shall furnish the license
holder with a statement, made under the penalties of perjury,
containing the name, address, and social security account number
of the person receiving the payment. No withholding is required
if the individual presents a signed certificate from his
employer which states that the individual is an employee of that
employer. A nonresident individual who holds a class C license
must be treated as an athlete for purposes of applying the
provisions of sections 290.17, subdivision 2(1)(b)(ii) and
290.92, subdivision 4a.
Sec. 15. [TRANSITION PROVISION; UNITARY NET OPERATING
LOSSES.]
(a) If for a taxable year a corporation is subject to the
provisions of Minnesota Statutes, section 290.095, subdivision
3, clause (d), the corporation may elect to take a net operating
loss carryback pursuant to this section. If the taxpayer elects
to be covered by the provisions of this section, the carryback
shall be subject to the provisions of Minnesota Statutes,
section 290.095, subdivision 3, but excluding clause (d).
(b) If the corporation elects to be covered by this
section, all members of the unitary group must file amended
returns for the year to which the loss is carried back. The
amended returns must reflect the income of the entire unitary
business as provided in Minnesota Statutes, section 290.34,
subdivision 2. The unitary group of corporations must calculate
the sum of the separate tax liabilities prior to the amended
returns and the sum of the tax liabilities after the amended
returns are filed. (1) If the sum of the separate tax
liabilities is more than the sum of the unitary tax liabilities
per amended returns, no refund is allowed from the filing of the
amended returns. (2) If the sum of the separate tax liabilities
is less than the sum of the unitary tax liabilities per amended
returns, the difference must be paid with the filing of the
amended returns.
(c) After filing the amended returns required by clause
(b), the corporation shall be allowed a net operating loss
carryback pursuant to section 290.095, subdivision 3. The net
operating loss carryback is allowable only to the extent of the
tax liability on the amended returns. The time limit on the
filing of the amended return allowed under this section shall be
the same as the time limit on the filing of the return for the
year from which the loss is carried back.
(d) This section is effective for taxable years beginning
after June 1981 and is repealed for taxable years beginning
after December 31, 1984.
If the taxpayer elects to be covered by this section, the
extension of net operating loss carryovers provided by the last
sentence of Minnesota Statutes, section 290.095, subdivision 3,
clause (d), does not apply to any year to which a loss is
carried back under this section.
Sec. 16. Laws 1983, chapter 342, article 1, section 44, is
amended to read:
Sec. 44. [REPEALER.]
Minnesota Statutes 1982, sections 290.01, subdivisions 23,
27, and 28; 290.032, subdivision 5; 290.06, subdivisions 9 and
9a; 290.077, subdivision 2; 290.08, subdivision 25; 290.09,
subdivisions 10, 15, 22, and 27; 290.21, subdivision 3a;
290.501; and 352C.07; and Laws 1982, chapter 523, article VII,
section 3, and Third Special Session chapter 1, article 5,
section 4, are repealed.
Sec. 17. [REPEALER.]
Minnesota Statutes 1983 Supplement, section 290.06,
subdivision 2e, and Laws 1983, chapter 342, article 1, section
8, are repealed.
Sec. 18. [EFFECTIVE DATE.]
Sections 1, 5, 10, 11, 17, and the amendment to clause (19)
in section 3 are effective for taxable years beginning after
December 31, 1983, and, to the extent applicable, for property
tax refund claims based on rent paid in 1984 and thereafter and
property taxes payable in 1985 and thereafter. Sections 2 and
12 to 14 are effective the day following final enactment.
Sections 4, 6, 7, and 8 are effective for taxable years
beginning after December 31, 1984. In section 16, Laws 1982,
chapter 523, article VII, section 3, is reenacted and effective
the day following final enactment of this act for taxable years
beginning after December 31, 1983. The amendment to clause (20)
in section 3 is effective for taxable years beginning after
December 31, 1982.
ARTICLE 3
PROPERTY TAX
Section 1. Minnesota Statutes 1982, section 105.482,
subdivision 8, is amended to read:
Subd. 8. [HYDROPOWER GENERATION POLICY; LEASING OF DAMS
AND DAM SITES.] Consistent with laws relating to dam
construction, reconstruction, repair, and maintenance, the
legislature finds that the public health, safety, and welfare of
the state is also promoted by the use of state waters to produce
hydroelectric or hydromechanical power. Further, the
legislature finds that the leasing of existing dams and
potential dam sites primarily for such power generation is a
valid public purpose. A local governmental unit, or the
commissioner of natural resources with the approval of the state
executive council, may provide pursuant to a lease or
development agreement for the development and operation of dams,
dam sites, and hydroelectric or hydromechanical power generation
plants owned by the respective government by an individual, a
corporation, an organization, or other legal entity upon such
terms and conditions as the local governmental unit or the
commissioner may negotiate for a period not to exceed 50 99
years. For installations of 15,000 kilowatts or less at a dam
site and reservoir that is not being used on January 1, 1984 in
connection with the production of hydroelectric or
hydromechanical power, the lease or development agreement
negotiated by the local governmental unit and the developer
shall constitute full payment by the lessee and may be in lieu
of all real or personal property taxes that might otherwise be
due to a local governmental unit. If the dam, dam site, or
power generation plant is located in or contiguous to a city or
town, other than the lessor governmental unit, the lease or
agreement shall not be effective unless it is approved by the
governing body of such the city or town. For purposes of this
subdivision, city means a statutory or home rule charter city.
Sec. 2. Minnesota Statutes 1982, section 105.482,
subdivision 9, is amended to read:
Subd. 9. [CONTENTS OF DEVELOPMENT AGREEMENT.] An agreement
for the development or redevelopment of a hydropower site may
contain, but need not be limited to, the following provisions:
(a) Length of the development agreement, subject to
negotiations between the parties but not more than 50 99 years,
and conditions for extension, modification, or termination;
(b) Provisions for a performance bond on the developer, or,
certification that the equipment and its installation have a
design life at least as long as the lease;
(c) Provisions to assure adequate maintenance and safety in
the impoundment structures, if any, and to assure access to
recreational sites, if any.
Sec. 3. Minnesota Statutes 1983 Supplement, section
124.2137, subdivision 1, is amended to read:
Subdivision 1. [TAX REDUCTIONS.] The county auditor shall
reduce the tax for school purposes on all property receiving the
homestead credit pursuant to section 273.13, subdivision 6, by
an amount equal to 29 33 percent of the tax levy imposed on up
to 320 acres of land including the buildings and structures
thereon but excluding the homestead dwelling and surrounding one
acre of land. The county auditor shall reduce the tax for
school purposes on the next 320 acres classified pursuant to
section 273.13, subdivision 6 by an amount equal to 13 15
percent of the tax levy imposed on the property. The tax on all
other agricultural lands classified pursuant to section 273.13,
subdivision 6 shall be reduced by an amount equal to ten percent
of the tax levy imposed on the property. The tax on the first
320 acres of agricultural land classified pursuant to section
273.13, subdivision 4 including buildings and structures thereon
but excluding all dwellings and an acre of land for each
dwelling and all real estate devoted to temporary and seasonal
residential occupancy for recreational purposes, but not devoted
to commercial purposes, shall be reduced by an amount equal to
13 15 percent of the tax imposed on the property. The tax on
timber land classified pursuant to section 273.13, subdivision
8a and agricultural land in excess of 320 acres classified
pursuant to section 273.13, subdivision 4 shall be reduced by an
amount equal to ten percent of the tax levy imposed on the
property. The amounts so computed by the county auditor shall
be submitted to the commissioner of revenue as part of the
abstracts of tax lists required to be filed with the
commissioner under the provisions of section 275.29. Any prior
year adjustments shall also be certified in the abstracts of tax
lists. The commissioner of revenue shall review the
certifications to determine their accuracy. He may make changes
in the certification as he may deem necessary or return a
certification to the county auditor for corrections. The amount
of the reduction provided under this subdivision which any
taxpayer can receive on all qualifying property which he owns
shall not exceed $2,000 $4,000 in the case of agricultural
property and shall not exceed $100 in the case of seasonal
residential recreational property. In the case of property
owned by more than one person, the maximum amount of the
reduction shall apply to the total of all the owners. For
purposes of computing the credit pursuant to this subdivision,
the "tax levy" shall be the tax levy reduced by the credits
provided by sections 273.115, 273.116, 273.123, 273.42,
subdivision 2, and 473H.10.
Sec. 4. Minnesota Statutes 1983 Supplement, section
272.02, subdivision 1, is amended to read:
Subdivision 1. Except as provided in other subdivisions of
this section or in section 272.025 or section 273.13,
subdivisions 17, 17b, 17c or 17d, all property described in this
section to the extent herein limited shall be exempt from
taxation:
(1) All public burying grounds;
(2) All public schoolhouses;
(3) All public hospitals;
(4) All academies, colleges, and universities, and all
seminaries of learning;
(5) All churches, church property, and houses of worship;
(6) Institutions of purely public charity except parcels of
property containing structures and the structures assessed
pursuant to section 273.13, subdivisions 17, 17b, 17c or 17d;
(7) All public property exclusively used for any public
purpose;
(8) (a) Class 2 property of every household of the value of
$100, maintained in the principal place of residence of the
owner thereof. The county auditor shall deduct the exemption
from the total valuation of the property as equalized by the
commissioner of revenue assessed to the household, and extend
the levy of taxes upon the remainder only. The term "household"
as used in this section is defined to be a domestic
establishment maintained either (1) by two or more persons
living together within the same house or place of abode,
subsisting in common and constituting a domestic or family
relationship, or (2) by one person.
(b) During the period of his active service and for six
months after his discharge therefrom, no member of the armed
forces of the United States shall lose status of a householder
under paragraph (a) which he had immediately prior to becoming a
member of the armed forces.
In case there is an assessment against more than one member
of a household the $100 exemption shall be divided among the
members assessed in the proportion that the assessed value of
the Class 2 property of each bears to the total assessed value
of the Class 2 property of all the members assessed. The Class
2 property of each household claimed to be exempt shall be
limited to property in one taxing district, except in cases
where a single domestic establishment is maintained in two or
more adjoining districts.
Bonds, certificates of indebtedness, or other obligations
issued by the state of Minnesota, or by any county or city of
the state, or any town, or any common or independent school
district of the state, or any governmental board of the state
are exempt from ad valorem property taxation; provided, that
this subdivision shall not exempt the obligations or their
interest from any excise or other tax levied on income, gross
earnings, estates, inheritance, bequests, gifts, transfers,
sales, or other transactions, other than an ad valorem property
tax.
(9) Farm machinery manufactured prior to 1930, which is
used only for display purposes as a collectors item;
(10) The taxpayer shall be exempted with respect to all
agricultural products, inventories, stocks of merchandise of all
sorts, all materials, parts and supplies, furniture and
equipment, manufacturers material, manufactured articles
including the inventories of manufacturers, wholesalers,
retailers and contractors; and the furnishings of a room or
apartment in a hotel, rooming house, tourist court, motel or
trailer camp, tools and machinery which by law are considered as
personal property, and the property described in section 272.03,
subdivision 1, clause (c), except personal property which is
part of an electric generating, transmission, or distribution
system or a pipeline system transporting or distributing water,
gas, or petroleum products or mains and pipes used in the
distribution of steam or hot or chilled water for heating or
cooling buildings and structures. Railroad docks and wharves
which are part of the operating property of a railroad company
as defined in section 270.80 are not exempt.
(11) Containers of a kind customarily in the possession of
the consumer during the consumption of commodities, the sale of
which are subject to tax under the provisions of the excise tax
imposed by chapter 297A;
(12) All livestock, poultry, all horses, mules and other
animals used exclusively for agricultural purposes;
(13) All agricultural tools, implements and machinery used
by the owners in any agricultural pursuit.
(14) Real and personal property used primarily for the
abatement and control of air, water, or land pollution to the
extent that it is so used, other than real property used
primarily as a solid waste disposal site.
Any taxpayer requesting exemption of all or a portion of
any equipment or device, or part thereof, operated primarily for
the control or abatement of air or water pollution shall file an
application with the commissioner of revenue. The equipment or
device shall meet standards, regulations or criteria prescribed
by the Minnesota Pollution Control Agency, and must be installed
or operated in accordance with a permit or order issued by that
agency. The Minnesota Pollution Control Agency shall upon
request of the commissioner furnish information or advice to the
commissioner. If the commissioner determines that property
qualifies for exemption, he shall issue an order exempting the
property from taxation. The equipment or device shall continue
to be exempt from taxation as long as the permit issued by the
Minnesota Pollution Control Agency remains in effect.
(15) Wetlands. For purposes of this subdivision,
"wetlands" means (1) land described in section 105.37,
subdivision 15, or (2) land which is mostly under water,
produces little if any income, and has no use except for
wildlife or water conservation purposes. "Wetlands" shall be
land, provided it is preserved in its natural condition, and
drainage of which it would be legal, feasible, and economically
practical for the production of livestock, dairy animals,
poultry, fruit, vegetables, forage and grains, except wild
rice. "Wetlands" shall include adjacent land which is not
suitable for agricultural purposes due to the presence of the
wetlands. "Wetlands" shall not include woody swamps containing
shrubs or trees, wet meadows, meandered water, streams, rivers,
and floodplains or river bottoms. Exemption of wetlands from
taxation pursuant to this section shall not grant the public any
additional or greater right of access to the wetlands or
diminish any right of ownership to the wetlands.
(16) Native prairie. The commissioner of the department of
natural resources shall determine lands in the state which are
native prairie and shall notify the county assessor of each
county in which the lands are located. Pasture land used for
livestock grazing purposes shall not be considered native
prairie for the purposes of this clause and section 273.116.
Upon receipt of an application for the exemption and credit
provided in this clause and section 273.116 for lands for which
the assessor has no determination from the commissioner of
natural resources, the assessor shall refer the application to
the commissioner of natural resources who shall determine within
30 days whether the land is native prairie and notify the county
assessor of his decision. Exemption of native prairie pursuant
to this clause shall not grant the public any additional or
greater right of access to the native prairie or diminish any
right of ownership to it.
(17) Property used in a continuous program to provide
emergency shelter for victims of domestic abuse, provided the
organization that owns and sponsors the shelter is exempt from
federal income taxation pursuant to section 501(c)(3) of the
Internal Revenue Code of 1954, as amended through December 31,
1982, notwithstanding the fact that the sponsoring organization
receives funding under section 8 of the United States Housing
Act of 1937, as amended.
(18) If approved by the governing body of the municipality
in which the property is located, property not exceeding one
acre which is owned and operated by any senior citizen group or
association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation, and other nonprofit
purposes, no part of the net earnings of which inures to the
benefit of any private shareholders; provided the property is
used primarily as a clubhouse, meeting facility or recreational
facility by the group or association and the property is not
used for residential purposes on either a temporary or permanent
basis.
(19) To the extent provided by section 295.44, real and
personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power on a site
owned by the state or a local governmental unit which is
developed and operated pursuant to the provisions of section
105.482, subdivisions 1, 8 and 9.
(20) If approved by the governing body of the municipality
in which the property is located, a direct satellite
broadcasting facility or fixed satellite regional or national
program service facility, construction of which is commenced
after June 30, 1983, for a period not to exceed five years.
When the facility no longer qualifies for exemption, it shall be
placed on the assessment rolls as provided in subdivision 4. As
used in this clause, a "direct satellite broadcasting facility"
is a facility operated by a corporation licensed by the federal
communications commission to provide direct satellite
broadcasting services using direct broadcast satellites
operating in the 12-ghz. band and a "fixed satellite regional or
national program service facility" is a facility operated by a
corporation licensed by the federal communications commission to
provide fixed satellite-transmitted regularly scheduled
broadcasting services using satellites operating in the 6-ghz.
band. Before approving a tax exemption pursuant to this
paragraph, the governing body of the municipality shall provide
an opportunity to the members of the county board of
commissioners of the county in which the facility is proposed to
be located and the members of the school board of the school
district in which the facility is proposed to be located to meet
with the governing body. The governing body shall present to
the members of those boards its estimate of the fiscal impact of
the proposed property tax exemption. The tax exemption shall
not be approved by the governing body until the county board of
commissioners has presented its written comment on the proposal
to the governing body, or 30 days has passed from the date of
the transmittal by the governing body to the board of the
information on the fiscal impact, whichever occurs first.
(21) If approved by the governing body of the municipality
in which the property is located, a facility construction of
which is commercial after June 30, 1983, at which a licensed
Minnesota manufacturer produces distilled spirituous liquors,
liqueurs, cordials, or liquors designated as specialties
regardless of alcoholic content, but not including ethyl
alcohol, distilled with a majority of the ingredients grown or
produced in Minnesota, for a period not to exceed five years.
When the facility no longer qualifies for exemption, it shall be
placed on the assessment rolls as provided in subdivision 4.
Before approving a tax exemption pursuant to this paragraph, the
governing body of the municipality shall provide an opportunity
to the members of the county board of commissioners of the
county in which the facility is proposed to be located and the
members of the school board of the school district in which the
facility is proposed to be located to meet with the governing
body. The governing body shall present to the members of those
boards its estimate of the fiscal impact of the proposed
property tax exemption. The tax exemption shall not be approved
by the governing body until the county board of commissioners
has presented its written comment on the proposal to the
governing body, or 30 days has passed from the date of the
transmittal by the governing body to the board of the
information on the fiscal impact, whichever occurs first.
Sec. 5. Minnesota Statutes 1982, section 272.02, is
amended by adding a subdivision to read:
Subd. 6. Notwithstanding the provisions of subdivision 5,
real and personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power and leased
from the state or a local governmental unit pursuant to section
105.482, subdivisions 1, 8, and 9 may be exempt from taxation or
payments in lieu of taxes.
The exemption from taxation or payments in lieu of taxes
provided by this subdivision does not apply to hydroelectric or
hydromechanical facilities operated at any time between January
1, 1980 and January 1, 1984.
Sec. 6. Minnesota Statutes 1983 Supplement, section
273.11, subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] Except as provided in
subdivisions 6, 7, 8, and 9 or section 273.17, subdivision 1,
all property shall be valued at its market value. The market
value as determined pursuant to this section shall be stated
such that any amount under $100 is rounded up to $100 and any
amount exceeding $100 shall be rounded to the nearest $100. In
estimating and determining such value, the assessor shall not
adopt a lower or different standard of value because the same is
to serve as a basis of taxation, nor shall he adopt as a
criterion of value the price for which such property would sell
at a forced sale, or in the aggregate with all the property in
the town or district; but he shall value each article or
description of property by itself, and at such sum or price as
he believes the same to be fairly worth in money. In assessing
any tract or lot of real property, the value of the land,
exclusive of structures and improvements, shall be determined,
and also the value of all structures and improvements thereon,
and the aggregate value of the property, including all
structures and improvements, excluding the value of crops
growing upon cultivated land. In valuing real property upon
which there is a mine or quarry, it shall be valued at such
price as such property, including the mine or quarry, would sell
for a fair, voluntary sale, for cash. In valuing real property
which is vacant, the fact that such property is platted shall
not be taken into account. An individual lot of such platted
property shall not be assessed in excess of the assessment of
the land as if it were unplatted until the lot is improved with
a permanent improvement all or a portion of which is located
upon the lot, or for a period of three years after final
approval of said plat whichever is shorter. When a lot is sold
or construction begun, the assessed value of that lot or any
single contiguous lot fronting on the same street shall be
eligible for reassessment. All property, or the use thereof,
which is taxable under sections 272.01, subdivision 2, or
273.19, shall be valued at the market value of such property and
not at the value of a leasehold estate in such property, or at
some lesser value than its market value.
Sec. 7. Minnesota Statutes 1982, section 273.123, is
amended by adding a subdivision to read:
Subd. 2a. [APPLICATION REQUIREMENTS.] A request for
property tax relief shall be considered by the executive council
only if the following requirements are met by the local unit of
government submitting the request:
(1) a completed disaster survey shall be included with the
request;
(2) the average dollar amount of damage for the homes which
are damaged and located within the geographic boundaries of the
applicant shall be $5,000 or more; and
(3) either (a) at least 25 homes located within the
geographic boundaries of the applicant must have been damaged or
destroyed; or (b) the total dollar amount of damage to all of
the damaged homes located within the geographic boundaries of
the applicant shall be equal to at least one percent of the
total market value of all homestead property located within the
geographic boundaries of the applicant.
Sec. 8. Minnesota Statutes 1982, section 273.123, is
amended by adding a subdivision to read:
Subd. 7. [LOCAL OPTION.] The owner of homestead property
not qualifying for an adjustment in valuation pursuant to
subdivisions 1 to 5 may receive a reduction in the amount of
taxes payable for the year in which the destruction occurs on
the homestead portion if:
(a) 50 percent or more of the homestead dwelling, as
established by the county assessor, is unintentionally or
accidentally destroyed and the homestead is uninhabitable;
(b) the owner of the property makes written application to
the county assessor as soon as practical after the damage has
occurred; and
(c) the owner of the property makes written application to
the county board, upon completion of the restoration of the
destroyed structure.
The county board may grant a reduction in the amount of
property tax which the owner must pay on the qualifying home in
the year of destruction. Any reduction in the amount of tax
payable which is authorized by county board action shall be
calculated based upon the number of months that the home is
uninhabitable. The amount of net tax due from the taxpayer
shall be multiplied by a fraction, the numerator of which is the
number of months the dwelling was occupied by that taxpayer and
the denominator of which is 12. For purposes of this
subdivision, if a structure is occupied for a fraction of a
month, it is considered a month. "Net tax" is defined as the
amount of tax after the subtraction of all of the state paid
property tax credits. If application is made following payment
of all property taxes due for the year of destruction, the
amount of the reduction granted by the county board shall be
refunded to the taxpayer by the county treasurer as soon as
practical.
Any reductions or refunds approved by the county board
shall not be subject to approval by the commissioner of revenue.
The county board may levy in the following year the amount
of tax dollars lost to the county government as a result of the
reductions granted pursuant to this subdivision. Any amount
levied for this purpose shall be exempt from the levy limit
provisions of sections 275.50 to 275.56.
Sec. 9. Minnesota Statutes 1983 Supplement, section
273.13, subdivision 9, is amended to read:
Subd. 9. [CLASS 4A, 4B, 4C, AND 4D.] (1) All property not
included in the preceding classes shall constitute class 4a and
shall be valued and assessed at 43 percent of the market value
thereof, except as otherwise provided in this subdivision.
(2) Real property which is not improved with a structure
and which is not utilized as part of a commercial or industrial
activity shall constitute class 4b and shall be valued and
assessed at 40 percent of market value.
(3) Commercial and industrial property, except as provided
in this subdivision, shall constitute class 4c and shall be
valued and assessed at 34 28 percent of the first $50,000
$60,000 of market value and 43 percent of the remainder,
provided that in the case of state-assessed commercial or
industrial property owned by one person or entity, only one
parcel shall qualify for the 34 28 percent assessment, and in
the case of other commercial or industrial property owned by one
person or entity, only one parcel in each county shall qualify
for the 34 28 percent assessment.
(4) Employment property defined in section 273.1313, during
the period provided in section 273.1313, shall constitute class
4d and shall be valued and assessed at 20 percent of the first
$50,000 of market value and 21.5 percent of the remainder,
except that for employment property located in an enterprise
zone designated pursuant to section 273.1312, subdivision 4,
paragraph (c), clause (3), the first $50,000 of market value
shall be valued and assessed at 31.5 percent and the remainder
shall be assessed and valued at 38.5 percent, unless the
governing body of the city designated as an enterprise zone
determines that a specific parcel shall be assessed pursuant to
the first clause of this sentence. The governing body may
provide for assessment under the first clause of the preceding
sentence only for property which is located in an area which has
been designated by the governing body for the receipt of tax
reductions authorized by section 273.1314, subdivision 9,
paragraph (a).
Sec. 10. Minnesota Statutes 1983 Supplement, section
273.13, subdivision 17, is amended to read:
Subd. 17. [TITLE II OR STATE HOUSING FINANCE AGENCY
PROPERTY USED FOR ELDERLY AND LOW AND MODERATE INCOME FAMILIES.]
(a) Except as provided in clause (b), a structure situated on
real property that is used for housing for the elderly or for
low and moderate income families as defined by Title II of the
National Housing Act or the Minnesota housing finance agency law
of 1971 or regulations promulgated by the agency pursuant
thereto and financed by a direct federal loan or federally
insured loan or a loan made by the Minnesota housing finance
agency pursuant to the provisions of either of those acts and
acts amendatory thereof shall, for 15 years from the date of the
completion of the original construction or substantial
rehabilitation, or for the original term of the loan, be
assessed at 20 percent of the market value thereof, provided
that the fair market value as determined by the assessor is
based on the normal approach to value using normal unrestricted
rents.
(b) In the case of a structure described in clause (a) with
respect to which construction or substantial rehabilitation had
not been commenced prior to January 1, 1984, the 20 percent
assessment ratio shall apply only to that portion of the
structure that is occupied by elderly persons or low and
moderate income families as defined above unless (1)
construction or substantial rehabilitation of the structure had
been commenced prior to January 1, 1984; or (2) the project had
been approved by the governing body of the municipality in which
it is located prior to June 30, 1983; or (3) financing of the
project had been approved by a federal or state agency prior to
June 30, 1983.
Sec. 11. Minnesota Statutes 1983 Supplement, section
273.13, subdivision 17b, is amended to read:
Subd. 17b. [VALUATION OF FARMERS HOME ADMINISTRATION
PROPERTY IN MUNICIPALITIES OF UNDER 10,000.] (a) Notwithstanding
any other provision of law, except as provided in clause (b),
any structure
(1) situated on real property that is used for housing for
the elderly or for low and moderate income families as defined
by the farmers home administration,
(2) located in a municipality of less than 10,000
population,
(3) financed by a direct loan or insured loan from the
farmers home administration, and
(4) which qualifies under subdivision 17a, shall, for 15
years from the date of the completion of the original
construction or for the original term of the loan, be assessed
at five percent of the market value thereof, provided that the
fair market value as determined by the assessor is based on the
normal approach to value using normal unrestricted rents.
(b) A structure described in clause (a) with respect to
which construction had not been commenced prior to January 1,
1984, shall be assessed at 20 percent of its market value, but
only in proportion to its occupancy by elderly persons or low
and moderate income families as defined above unless (1)
construction of the structure had been commenced prior to
January 1, 1984; or (2) the project had been approved by the
governing body of the municipality in which it is located prior
to June 30, 1983; or (3) financing of the project had been
approved by a federal or state agency prior to June 30, 1983.
Sec. 12. Minnesota Statutes 1983 Supplement, section
273.13, subdivision 17c, is amended to read:
Subd. 17c. [VALUATION OF LOWER INCOME HOUSING.] (a) Except
as provided in clause (b), a structure which is
(1) situated upon real property that is used for housing
lower income families or elderly or handicapped persons, as
defined in section 8 of the United States Housing Act of 1937,
as amended, and
(2) owned by an entity which has entered into a housing
assistance payments contract under section 8 which provides
assistance for 100 percent of the dwelling units in the
structure, other than dwelling units intended for management or
maintenance personnel, shall, for the term of the housing
assistance payments contract, including all renewals, or for the
term of its permanent financing, whichever is shorter, be
assessed at 20 percent of its market value. The market value
determined by the assessor shall be based on the normal approach
to value using normal unrestricted rents.
(b) In the case of a structure described in clause (a) with
respect to which construction had not been commenced prior to
January 1, 1984, the 20 percent assessment ratio shall apply
only to that portion of the structure that is occupied by lower
income families or elderly or handicapped persons as defined
above unless (1) construction of the structure had been
commenced prior to January 1, 1984; or (2) the project had been
approved by the governing body of the municipality in which it
is located prior to June 30, 1983; or (3) financing of the
project had been approved by a federal or state agency prior to
June 30, 1983.
Sec. 13. Minnesota Statutes 1982, section 273.13,
subdivision 19, is amended to read:
Subd. 19. [CLASS 3D, 3DD.] Residential real estate
containing four or more units, other than seasonal residential,
recreational and homesteads shall be classified as class 3d
property and shall have a taxable value equal to 36 percent of
market value for taxes levied in 1981 and 34 percent of market
value for taxes levied in 1982 and thereafter. Residential real
estate containing three or less units, other than seasonal
residential, recreational and homesteads, shall be classified as
class 3dd property and shall have a taxable value equal to 28
percent of market value.
Residential real estate as used in this subdivision means
real property used or held for use by the owner thereof, or by
his tenants or lessees as a residence for rental periods of 30
days or more, but shall not include homesteads, or real estate
devoted to temporary or seasonal residential occupancy for
recreational purposes. Where a portion of a parcel of property
qualified for class 3d or 3dd and a portion does not qualify for
class 3d or 3dd the valuation shall be apportioned according to
the respective uses.
Residential real estate containing less than three four
units when entitled to homestead classification for one or more
units shall be classed as 3b, 3c or 3cc according to the
provisions of subdivisions 6 and 7. A single rented or leased
dwelling unit located within or attached to a private garage or
similar structure owned by the owner of a homestead and located
on the premises of that homestead must be classified as 3b, 3c,
or 3cc as part of the owner's homestead according to the
provisions of subdivisions 6 and 7. If more than one dwelling
unit is attached to the structure, the units must be assessed as
class 3d or 3dd property.
Sec. 14. Minnesota Statutes 1983 Supplement, section
273.13, subdivision 21, is amended to read:
Subd. 21. [LIMITATION ON HOMESTEAD CLASSIFICATION.] If the
assessor has classified a property as both homestead and
nonhomestead, only the values greater of the value attributable
to the portion of the property classified as 3b, 3c, or 3cc or
the value of the first tier of assessment percentages provided
under those subdivisions shall be entitled to homestead
treatment, except as provided in subdivision 19 for buildings
containing fewer than four residential units and for a single
rented or leased dwelling unit located within or attached to a
private garage or similar structure owned by the owner of a
homestead and located on the premises of that homestead.
If the assessor has classified a property as both homestead
and nonhomestead, the homestead credit provided under
subdivisions 6 and 7 and the reductions in tax provided under
sections 273.135 and 273.1391, shall apply to the value of both
the homestead and the nonhomestead portions of the property.
Except for buildings containing fewer than three units
classified pursuant to section 273.13, subdivision 19, if the
portion of a building used as the owner's homestead is separate
from other dwelling units in the building, only the owner's
residence plus the land attributable to the residence is to
receive either the 3b, 3c, or 3cc classification.
Sec. 15. Minnesota Statutes 1982, section 273.19, is
amended by adding a subdivision to read:
Subd. 5. Notwithstanding the provisions of subdivision 4,
real and personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power and leased
from the state or a local governmental unit pursuant to section
105.482, subdivisions 1, 8, and 9 may be exempt from taxation or
payments in lieu of taxes.
The exemption from taxation or payments in lieu of taxes
provided by this subdivision does not apply to hydroelectric or
hydromechanical facilities operated at any time between January
1, 1980 and January 1, 1984.
Sec. 16. Minnesota Statutes 1983 Supplement, section
276.04, is amended to read:
276.04 [NOTICE OF RATES; PROPERTY TAX STATEMENTS.]
On receiving the tax lists from the county auditor, the
county treasurer shall, if directed by the county board, give
three weeks' published notice in a newspaper specifying the
rates of taxation for all general purposes and the amounts
raised for each specific purpose. He shall, whether or not
directed by the county board, cause to be printed on all tax
statements, or on an attachment, a tabulated statement of the
dollar amount due to each taxing authority and the amount to be
paid to the state of Minnesota from the parcel of real property
for which a particular tax statement is prepared. The dollar
amounts due the state, county, township or municipality and
school district shall be separately stated but the amounts due
other taxing districts, if any, may be aggregated. The dollar
amounts may be rounded to the nearest even whole dollar. For
purposes of this section whole odd-numbered dollars may be
adjusted to the next higher even-numbered dollar. The statement
shall include the following sentence, printed in upper case
letters in bold face print: "THE STATE OF MINNESOTA DOES NOT
RECEIVE ANY PROPERTY TAX REVENUES. THE STATE OF MINNESOTA
REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND REIMBURSEMENTS
TO LOCAL UNITS OF GOVERNMENT." The property tax statements for
class 2a property shall contain the same information that is
required on the tax statements for real property. The county
treasurer shall mail to taxpayers statements of their personal
property taxes due, such statements to be mailed not later than
February 15 (except in the case of Class 2a property),
statements of the real property taxes due shall be mailed not
later than January 31; provided, that the validity of the tax
shall not be affected by failure of the treasurer to mail such
statement. The taxpayer is defined as the owner who is
responsible for the payment of the tax. Such real and personal
property tax statements shall contain the market value, as
defined in section 272.03, subdivision 8, used in determining
the tax. The statement shall show the amount attributable to
section 124.2137 as "state paid agricultural credit" and the
amount attributable to section 273.13, subdivisions 6 and 7 as
"state paid homestead credit." The statement shall show the
reduction attributable to the aid given pursuant to section
273.139 and shall indicate that the reduction is paid by the
state of Minnesota. If so directed by the county board, the
treasurer shall visit places in the county as he deems expedient
for the purpose of receiving taxes and the county board is
authorized to pay the expenses of such visits and of preparing
duplicate tax lists. Failure to mail the tax statement shall
not be deemed a material defect to affect the validity of any
judgment and sale for delinquent taxes.
Sec. 17. Minnesota Statutes 1983 Supplement, section
279.01, subdivision 1, is amended to read:
Subdivision 1. On May 16, of each year, with respect to
property actually occupied and used as a homestead by the owner
of the property, a penalty of three percent shall accrue and
thereafter be charged upon all unpaid taxes on real estate on
the current lists in the hands of the county treasurer, and a
penalty of seven percent on nonhomestead property, except that
this penalty shall not accrue until June 1 of each year on
commercial use real property used for seasonal residential
recreational purposes and classified as class 3 or 3a, and on
other commercial use real property classified as class 4c,
provided that over 60 percent of the gross income earned by the
enterprise on the class 4c property is earned during the months
of May, June, July, and August. Any property owner of such
class 4c property who pays the first half of the tax due on the
property after May 15 and before June 1 shall attach an
affidavit to his payment attesting to compliance with the income
provision of this subdivision. Thereafter, for both homestead
and nonhomestead property, on the 16th day of each month, up to
and including October 16 following, an additional penalty of one
percent for each month shall accrue and be charged on all such
unpaid taxes. When the taxes against any tract or lot exceed
$10, one-half thereof may be paid prior to May 16; and, if so
paid, no penalty shall attach; the remaining one-half shall be
paid at any time prior to October 16 following, without penalty;
but, if not so paid, then a penalty of four percent shall accrue
thereon for homestead property and a penalty of four percent on
nonhomestead property. Thereafter, for homestead property, on
the 16th day of each month up to and including December 16
following, an additional penalty of two percent for each month
shall accrue and be charged on all such unpaid taxes.
Thereafter, for nonhomestead property, on the 16th day of each
month up to and including December 16 following, an additional
penalty of four percent for each month shall accrue and be
charged on all such unpaid taxes. If one-half of such taxes
shall not be paid prior to May 16, the same may be paid at any
time prior to October 16, with accrued penalties to the date of
payment added, and thereupon no penalty shall attach to the
remaining one-half until October 16 following; provided, also,
that the same may be paid in installments as follows:
One-fourth prior to March 16; one-fourth prior to May 16;
one-fourth prior to August 16; and the remaining one-fourth
prior to October 16, subject to the aforesaid penalties. Where
the taxes delinquent after October 16 against any tract or
parcel exceed $40, they may be paid in installments of not less
than 25 percent thereof, together with all accrued penalties and
costs, up to the next tax judgment sale, and after such payment,
penalties, interest, and costs shall accrue only on the sum
remaining unpaid. Any county treasurer who shall make out and
deliver or countersign any receipt for any such taxes without
including all of the foregoing penalties therein, shall be
liable to the county for the amount of such penalties.
Sec. 18. Minnesota Statutes 1982, section 279.37,
subdivision 1, is amended to read:
Subdivision 1. [COMPOSITION INTO ONE ITEM.] Delinquent
taxes upon any parcel of real estate which have been bid in for
and are held by the state and not assigned by it, may be
composed into one item or amount by confession of judgment at
any time prior to the forfeiture of such the parcel of land to
the state for taxes, for the aggregate amount of all such the
taxes, costs, penalties, and interest accrued against said the
parcel, as hereinafter provided; provided except that only taxes
upon property which, for the previous year's assessment, was
classified as homestead property pursuant to section 273.13,
subdivisions 6, 6a, 7, and 14a vacant land, mineral property,
employment property, or commercial or industrial property shall
not be eligible to be composed into any confession of judgment
pursuant to this section.
Sec. 19. Minnesota Statutes 1982, section 279.37,
subdivision 3, is amended to read:
Subd. 3. Upon the receipt of said the offer and payment of
the sums herein sum required, the said auditor shall notify the
county board of the offer. If the county board approves the
offer, the auditor shall note the same it upon his records and
shall forthwith file said the offer and confession of judgment
with the clerk of the district court of the county who is hereby
directed to enter judgment in accordance with said the offer.
If the county board does not approve the offer within 30 days of
its notification by the county auditor, confession of judgment
will not be allowed for the property, and the amount remitted
pursuant to subdivision 2 shall be returned to the payor.
Sec. 20. [282.021] [NOTIFICATION OF SALE.]
Thirty days before the sale of tax-forfeited land at public
auction, the county auditor shall publish in a newspaper of
general circulation the notice of sale and each parcel's
appraised value or market value, whichever is higher, as
determined by the county or local assessor who is responsible
for valuing the property. The county auditor shall also mail
notice to all owners of land adjoining each parcel to be sold
and to all owners of platted or unplatted land whose boundaries
are within 300 feet of the boundaries of each parcel to be sold.
Sec. 21. Minnesota Statutes 1983 Supplement, section
290A.04, subdivision 2e, is amended to read:
Subd. 2e. If the net property taxes payable on a homestead
increase more than 20 percent over the net property taxes
payable in the previous year on the same property, a claimant
who is a homeowner shall be allowed an additional refund equal
to 50 100 percent of the amount by which the increase exceeds 20
percent. This subdivision shall not apply to any increase in
the net property taxes payable attributable to improvements made
to the homestead. The refund shall not exceed $200. The
maximum refund shall be reduced by $20 for each $1,000 of the
claimant's household income in excess of $30,000. No refund
shall be allowed if the claimant's household income exceeds
$40,000. The refund shall be reduced by one-tenth for each
$1,000 of claimant's household income in excess of $40,000.
No refund pursuant to this subdivision shall be allowed if
the claimant's household income exceeds $50,000.
For purposes of this subdivision, "net property taxes
payable" means property taxes payable after reductions made
pursuant to sections 124.2137; 273.13, subdivisions 6, 7, and
14a; 273.115, subdivision 1; 273.116, subdivision 1; 273.135;
273.1391; and 273.42, subdivision 2, and any other state paid
property tax credits and after the deduction of tax refund
amounts for which the claimant qualifies pursuant to
subdivisions 2, 2a and 2b.
In addition to the other proofs required by this chapter,
each claimant under this subdivision shall file with the
property tax refund return a copy of the property tax statement
for taxes payable in the preceding year or other documents
required by the commissioner.
On or before December 1, 1983, the commissioner shall
estimate the cost of making the payments provided by this
section. Notwithstanding the open appropriation provision of
section 290A.23, if the estimated total refund claims exceed
$11,000,000, the commissioner shall adjust accordingly the
percentage increase in net property taxes payable over the
previous year which is required to qualify for the credit
provided in this subdivision.
This subdivision is repealed effective for property taxes
levied in 1984, payable in 1985.
Sec. 22. Minnesota Statutes 1983 Supplement, section
290A.04, subdivision 2f, is amended to read:
Subd. 2f. If the net property taxes payable in 1984 on a
homestead increases more than ten percent over the net property
taxes payable in 1983 on the same property, and if the effective
tax rate of property tax paid in 1983 on that homestead as
compared to the January 2, 1982, estimated market value exceeds
2.25 percent, an additional credit shall be paid by the
commissioner to the claimant. The additional credit shall be
equal to 50 percent of the amount by which the increase exceeds
ten percent but in no case shall the additional credit exceed
$200. This subdivision shall not apply to any increase in the
net property taxes payable attributable to improvements made to
the homestead.
For purposes of this subdivision, "effective tax rate"
means the net property tax paid by the claimant in 1983, divided
by the assessor's 1982 estimated market value times 100.
For purposes of this subdivision, "net property taxes"
means the gross tax less the homestead credit and any other
state paid credit and after the deduction of tax refund amounts
for which the claimant qualifies.
The city assessor, or the county assessor if the property
is located in a taxing district which does not have a city
assessor, shall notify all affected property owners of the
availability of this credit and furnish the forms which the
commissioner shall prescribe.
The additional refunds shall be paid at the same time as
the commissioner pays other property tax refund claims.
Sec. 23. Minnesota Statutes 1982, section 290A.04, is
amended by adding a subdivision to read:
Subd. 2g. If the net property taxes payable on a homestead
in 1985 increase more than 12.5 percent over the net property
taxes payable in 1984 on the same property, a claimant who is a
homeowner shall be allowed an additional refund equal to 50
percent of the amount by which the increase exceeds 12.5 percent.
This subdivision shall not apply to any increase in the net
property taxes payable attributable to improvements made to the
homestead. The refund shall not exceed $400.
For purposes of this subdivision, "net property taxes
payable" means property taxes payable after reductions made
pursuant to sections 124.2137; 273.13, subdivisions 6, 7, and
14a; 273.115, subdivision 1; 273.116, subdivision 1; 273.135;
273.1391; and 273.42, subdivision 2, and any other state paid
property tax credits and after the deduction of tax refund
amounts for which the claimant qualifies pursuant to
subdivisions 2, 2a, and 2b.
In addition to the other proofs required by this chapter,
each claimant under this subdivision shall file with the
property tax refund return a copy of the property tax statement
for taxes payable in the preceding year or other documents
required by the commissioner.
This subdivision is repealed effective for property taxes
levied in 1985, payable in 1986.
Sec. 24. Minnesota Statutes 1982, section 295.44,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION.] Notwithstanding the provisions
of sections 272.01, subdivision 2, 272.02, subdivision 5, and
273.19, subdivision 1, real or personal property used or to be
used primarily for the production of hydroelectric or
hydromechanical power on a site owned by the state or a local
governmental unit and developed and operated pursuant to section
105.482, subdivisions 1, 8 and 9 shall may be exempt from
property taxation for the five calendar years succeeding the
year in which the development agreement is executed all years
during which the site is developed and operated under the terms
of a lease or agreement authorized by section 105.482,
subdivisions 1, 8, and 9.
Sec. 25. Minnesota Statutes 1983 Supplement, section
473.446, subdivision 1, is amended to read:
Subdivision 1. [TAXATION WITHIN TRANSIT TAXING DISTRICT.]
For the purposes of sections 473.401 to 473.451 and the
metropolitan transit system, except as otherwise provided in
this subdivision the metropolitan transit commission shall levy
each year upon all taxable property within the metropolitan
transit taxing district, defined in subdivision 2, a transit tax
consisting of:
(a) An amount up to two mills times the assessed value of
all such property, based upon the level of transit service
provided for the property, the proceeds of which shall be used
for payment of the expenses of operating transit and paratransit
service;
(b) An additional amount, if any, as the commission
determines to be necessary to provide for the full and timely
payment of its certificates of indebtedness and other
obligations outstanding on July 1, 1977, to which property taxes
under this section have been pledged; and
(c) An additional amount necessary to provide full and
timely payment of certificates of indebtedness, bonds, or other
obligations issued or to be issued pursuant to section 473.436
for purposes of acquisition and betterment of property and other
improvements of a capital nature and to which the commission has
specifically pledged tax levies under this clause.
The county auditor shall reduce the tax levied pursuant to
this subdivision on all property within cities or towns that
receive full peak service and limited off-peak service by an
amount equal to the tax levy that would be produced by applying
a rate of 0.5 mills on the property. The county auditor shall
reduce the tax levied pursuant to this subdivision on all
property within cities or towns that receive limited peak
service by an amount equal to the tax levy that would be
produced by applying a rate of 0.75 mills on the property. The
amounts so computed by the county auditor shall be submitted to
the commissioner of revenue as part of the abstracts of tax
lists required to be filed with the commissioner under section
275.29. Any prior year adjustments shall also be certified in
the abstracts of tax lists. The commissioner shall review the
certifications to determine their accuracy. He may make changes
in the certification as he may deem necessary or return a
certification to the county auditor for corrections. The
commissioner shall pay to the regional transit board the amounts
certified by the county auditors on the dates provided in
section 273.13, subdivision 15a, clause (3). There is annually
appropriated from the general fund in the state treasury to the
department of revenue the amounts necessary to make these
payments in fiscal year 1985 and thereafter.
For the purposes of this subdivision, "full peak and
limited off-peak service" means peak period service plus weekday
midday service with a frequency of more than 60 minutes on the
route with the greatest frequency; and "limited peak period
service" means peak period service only.
Sec. 26. Minnesota Statutes 1982, section 477A.13, is
amended to read:
477A.13 [TIME OF PAYMENT, DEDUCTIONS.]
Payments to the counties shall be made from the general
fund during the month of July of the year next following
certification. There shall be deducted from amounts paid any
amounts paid to a county or township during the preceding year
pursuant to sections 84A.51, 89.036, 97.49, subdivision 3, and
272.68, subdivision 3 with respect to the lands certified
pursuant to section 477A.12.
Payments under section 477A.12 must also be reduced by the
following percentages of the amounts paid during the preceding
year under section 84A.51:
(1) for the payment made July 15, 1984, 75 percent;
(2) for the payment made July 15, 1985, 50 percent;
(3) for the payment made July 15, 1986, 25 percent; and
(4) for the payment made thereafter, 0 percent.
Sec. 27. [STATEMENT OF PURPOSE.]
The legislature finds that the method of valuing farm
property on the basis of sales of comparable properties
overstates the value of farm property. Further, the legislature
finds that methods of determining the production value of farm
property are not suitable as a basis for directly determining
the value of individual parcels of farm property. Therefore,
the legislature determines that market value should continue to
be used as the basis for taxation but that that market value
should be adjusted to reflect the production value of farm
property.
Sec. 28. [DETERMINATION OF RATIO.]
The commissioner of revenue shall consider alternative
methods of determining the production value of farm property and
shall make a recommendation to the legislature by January 15,
1985, as to the percentage of market value to be used in
determining the production value to be used for the 1985
assessment, taxes payable in 1986.
Sec. 29. [GUIDELINES TO COUNTY ASSESSORS.]
The department of revenue is directed by the legislature to
prepare and issue guidelines to all county assessors by October
1984, on the following two topics:
(a) the proper assessment methods which should be used when
valuing land which is irrigated or capable of being irrigated,
and
(b) the proper method for adjusting sales price for
financing terms and other conditions of a sale in determining
true market value.
The guidelines are not rules subject to the Administrative
Procedure Act of chapter 14.
Sec. 30. [COMPUTATION; REFUNDS.]
An additional credit shall be allowed to owners of all
property subject to the $2,000 agricultural aid credit maximum
imposed by Laws 1983, chapter 342, article 2, section 1. The
county auditor shall determine the amount of credit to be
allowed by recomputing the property tax for taxes payable in
1984 on this property, reducing the tax by the rates set by
Minnesota Statutes 1983 Supplement, section 124.2137,
subdivision 1. The difference so computed, not to exceed
$2,000, shall be allowed as an additional credit against the
property taxes payable in 1984. Amended statements shall be
mailed to the affected taxpayers by May 11, 1984. The
statements shall contain the information required in Minnesota
Statutes, section 276.04, except that a notice must be enclosed
stating that the statement is amended pursuant to this section.
The auditor shall certify the additional agricultural aid
amounts pursuant to this section to the commissioner of revenue
by the time and in the form determined by the commissioner. The
auditor shall also list the number of property tax statements
which were revised as a result of the change in the maximum
$4,000 agricultural aid limitation. The commissioner shall
reimburse the county $5 for each revised statement for the
administrative expenses incurred as a result of the
recomputations pursuant to this section. The commissioner of
revenue shall review the certifications to determine their
accuracy. He may make changes in the certification he deems
necessary or return a certification to the county auditor for
corrections.
If property taxes payable in 1984 have been paid in full
without the adjustments required by this section, the taxpayer
shall receive a refund equal to the difference between the taxes
paid and the tax as recomputed. The county treasurer or auditor
shall determine the amount of the refund and mail it to the
taxpayer as soon as practical.
If property taxes payable in 1984 have been partially paid
without the adjustments required by this section, the county
treasurer or auditor shall reduce the remaining taxes due by the
amount of the tax reduction required by this section, and refund
any excess. He shall notify the affected taxpayer of the
corrected tax.
Refunds paid under this section do not include interest.
If the county treasurer or auditor has settled and
distributed funds under Minnesota Statutes, section 276.10 with
respect to any amounts which have been refunded to taxpayers
under this section, the amounts of those refunds must be
deducted from the next settlement and distribution. Additional
credits payable under this section may be designated as state
school agriculture credit on the tax statements, but for
distribution purposes, the credit shall be distributed to all
taxing districts in the same manner and the same proportion as
taxes paid by the taxpayer for the property.
Sec. 31. [PAYMENT; PENALTIES.]
Section 30 does not excuse timely payment of taxes as
required in Minnesota Statutes, section 279.01. Penalties shall
accrue as provided in Minnesota Statutes, section 279.01 only on
the amount of the taxes as recomputed under section 30.
Sec. 32. [PROPERTY TAX REFUNDS.]
For purposes of Minnesota Statutes, section 290A.03,
subdivision 13, "property taxes payable" means property taxes as
recomputed under section 30. Taxpayers who filed property tax
refund returns utilizing the payable 1984 property taxes before
the recomputation must file an amended return and attach an
amended property tax statement to the amended return.
Sec. 33. [APPROPRIATION.]
There is appropriated from the general fund to the
commissioner of revenue the amount necessary to pay the county
the amount by which the property taxes payable in 1984 as
certified under section 30 are reduced and the fee for issuing
the revised tax statements. Payment must be made not later than
September 15, 1984.
Sec. 34. [HOMESTEAD CREDIT ADJUSTMENTS.]
The commissioner of revenue shall by May 1, 1984, advise
each county auditor to recompute the homestead credit to be
applied against each parcel of property assessed by the county
as both homestead and nonhomestead property. The homestead
credit shall be applied against the entire parcel. The county
auditor shall file an abatement with the county board listing
each affected parcel and the additional homestead credit. The
county board shall approve the abatement in the same manner as
provided in Minnesota Statutes, section 375.192 and forward it
to the commissioner. For purposes of this section, "homestead
credit" means reductions paid pursuant to Minnesota Statutes,
sections 273.13, subdivision 14a; 273.135; and 273.1391.
The county treasurer shall issue corrected property tax
statements showing the corrected taxes. The additional
homestead credit shall be a reduction against the second half
taxes unless the county treasurer issues the corrected
statements on or before May 11, 1984.
By July 1, 1984, each county auditor shall notify the
commissioner in writing about the procedures used in the county
to handle this process. The auditor shall also list the number
of property tax statements which were revised as a result of the
homestead credit adjustments. The commissioner shall reimburse
the county $5 for each revised statement for the administrative
expenses incurred as a result of the recomputations pursuant to
this section. There is appropriated from the general fund to
the commissioner of revenue the amount necessary to make these
payments to the county.
Sec. 35. [LEVY LIMIT ADJUSTMENT.]
If a governmental unit subject to the levy limitation
provisions of Minnesota Statutes, sections 275.50 to 275.56
realizes savings in the form of reduced employer contributions
to public pension funds resulting from the enactment of S.F. No.
147 at the 1984 regular session, its levy limit base is
permanently reduced, beginning with taxes payable in 1985, by
twice the amount of savings realized during the period from July
1, 1984, to December 31, 1984, but only to the extent that the
doubled amount exceeds the amount levied as a special levy
pursuant to section 275.50, subdivision 5, clause (o), for taxes
payable in 1984.
Sec. 36. [REPEALER.]
Minnesota Statutes 1982, section 295.44, subdivisions 2, 3,
and 4 and Minnesota Statutes 1983 Supplement, section 273.11,
subdivision 7, is repealed.
Sec. 37. [EFFECTIVE DATE.]
The increase in the agricultural aid maximum to $4,000 in
section 3 is effective for the 1983 assessment and thereafter,
taxes payable 1984 and thereafter. The remainder of section 3
and sections 4, 6 to 14 and the portion of section 36 relating
to Minnesota Statutes, section 273.11, subdivision 7, are
effective for the 1984 assessment and thereafter, taxes payable
in 1985 and thereafter. Sections 1, 2, 5, 15, 17 to 24, 26 to
34 and the portion of section 36 relating to Minnesota Statutes,
section 295.44, subdivisions 2, 3, and 4 are effective the day
after final enactment. Section 25 is effective in the counties
of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington for taxes levied in 1985, payable in 1986, and
thereafter, but is contingent upon the enactment of the
reorganization of metropolitan transit governance in H.F. 2317.
ARTICLE 4
LOCAL GOVERNMENT AIDS
Section 1. [LOCAL GOVERNMENT AID RESTORATION.]
Subdivision 1. [ELIGIBLE AMOUNT.] For each town, statutory
city, and home rule charter city in the state, the commissioner
of revenue shall certify a supplemental aid amount equal to the
difference, if any, between (a) its certified distribution for
1984 pursuant to Minnesota Statutes, sections 477A.011 to
477A.03, and (b) the amount that would have been certified had
not the limitations of Minnesota Statutes, sections 477A.0131,
subdivision 2, and 477A.03, subdivision 2, been in effect.
Subd. 2. [TIME OF PAYMENTS.] Aid amounts determined
pursuant to this section shall be distributed to affected cities
in calendar year 1984 according to the payment schedule provided
in Minnesota Statutes, section 477A.015. However, if a city is
subject to levy limitation pursuant to Minnesota Statutes,
sections 275.50 to 275.56, and the amount distributed to it
pursuant to this section exceeds the amount by which the city's
levy limitation for taxes payable in 1984 exceeds its levy
subject to limitation for taxes payable in 1984, the amount of
that excess distribution shall be used to reduce the city's levy
limitation for taxes payable in 1985 accordingly.
Subd. 3. [SUBSEQUENT YEARS.] For the purpose of aid
distributions pursuant to Minnesota Statutes, sections 477A.011
to 477A.03 for 1985 and subsequent calendar years, aid amounts
distributed according to the provisions of this section shall be
considered as included in the definition of aids received in
1984 pursuant to Minnesota Statutes, sections 477A.011 to
477A.03.
Sec. 2. [HIGH-GROWTH ADJUSTMENT.]
Subdivision 1. [ELIGIBLE AMOUNT.] For any statutory city
(a) which incorporated in 1974 or thereafter, and (b) whose
current population as determined for the calendar year 1979
local government aids distribution exceeded its 1970 census
population by a factor of two or more, the commissioner of
revenue shall determine the additional amount that the city
would have been allocated in the 1984 aid distribution, had the
full amount of its then current population been used in the
formula calculation for 1979 aids, with aids in the intervening
years recalculated using the 1979 adjusted figures.
Subd. 2. [ADJUSTMENTS.] For every qualifying city, the
amount determined pursuant to subdivision 1 shall be permanently
added to its adjusted local revenue base pursuant to Minnesota
Statutes, section 477A.011, subdivision 7a, and its maximum aid
amount pursuant to Minnesota Statutes, section 477A.011,
subdivision 10, for aids payable in 1984. 1984 aid
distributions for all affected cities shall be based upon
formula factors as amended by this section.
This amount shall also be a permanent adjustment to each
city's adjusted levy limit base for taxes payable in 1984,
pursuant to Minnesota Statutes, section 275.51, subdivision 3h.
Sec. 3. Minnesota Statutes 1983 Supplement, section
477A.013, subdivision 1, is amended to read:
Subdivision 1. [TOWNS.] In each (a) In 1984, each town
shall receive a distribution equal to 50 percent of the amount
received in 1983 pursuant to Minnesota Statutes 1982, sections
273.138, 273.139, and 477A.011 to 477A.03.
(b) In 1985 and each succeeding calendar year, each town
which has an average equalized mill rate of at least two mills
had levied for taxes payable in the previous year at least one
mill on the dollar of the assessed value of the town shall
receive a distribution equal to 50 percent of the amount
received in 1983 pursuant to Minnesota Statutes 1982, sections
273.138, 273.139, and 477A.011 to 477A.03.
Sec. 4. Minnesota Statutes 1983 Supplement, section
477A.013, subdivision 2, is amended to read:
Subd. 2. [CITIES AND TOWNS.] In each calendar year, each
statutory and home rule charter city shall receive a
distribution equal to the amount obtained by subtracting ten
mills multiplied by the municipality's equalized assessed value
from the adjusted local revenue base.
An aid amount shall be computed in the same manner for all
towns which have an average equalized mill rate of at least two
mills had levied for taxes payable in the previous year at least
one mill on the dollar of the assessed value of the town. A
town's final aid amount shall be determined by either the
subdivision 1 or the subdivision 2 calculation, whichever is
greater.
Sec. 5. Minnesota Statutes 1983 Supplement, section
477A.0131, subdivision 1, is amended to read:
Subdivision 1. (a) No home rule charter or statutory city
shall receive a distribution in any calendar year 1985 pursuant
to sections 477A.011 to 477A.03 that is less than the sum of the
amounts amount certified in the previous calendar year pursuant
to sections 477A.011 to 477A.03, section 273.139, and section
273.138, by more than an amount equal to three-fourths of one
mill times the unit's equalized assessed value.
(b) No home rule charter or statutory city shall receive a
distribution in calendar year 1986 or any subsequent calendar
year pursuant to sections 477A.011 to 477A.03 that is less than
the amount certified in the previous calendar year pursuant to
sections 477A.011 to 477A.03 by more than an amount equal to
three-fourths of one mill times the city's equalized assessed
value.
Sec. 6. [LOCAL GOVERNMENT AIDS STUDY COMMISSION.]
A local government aids study commission consisting of 18
members is created. Nine members of the commission shall be
members of the senate and appointed by the committee on
committees. Nine members of the commission shall be members of
the house of representatives and appointed by the speaker. The
study commission shall elect a chairman from among its members
and meetings of the commission will be held at the call of the
chairman.
The purpose of the commission is to study the current
funding and distribution of state aid to local units of
government including school districts. The commission may do
all things necessary and reasonable to conduct the study
including holding meetings and soliciting testimony and
information. The commission shall make specific recommendations
on changes in the present state aid formula and shall report to
the legislature and the governor its conclusions and
recommendations by January 15, 1985. The commission shall
expire on February 1, 1985. Expenses of the commission
including per diem and expenses of commission members will be
provided by the appointing authority.
Sec. 7. [APPROPRIATIONS.]
Subdivision 1. An amount sufficient to carry out the
provisions of sections 1 and 3 is appropriated from the general
fund to the commissioner of revenue.
Subd. 2. The sum of $120,000 is appropriated from the
general fund to the commissioner of revenue for the purpose of
providing increased local government aid distributions under
section 2. If this appropriation is not sufficient, aid amounts
determined pursuant to section 2 shall be proportionately
reduced.
Sec. 8. [REPEALER.]
Minnesota Statutes 1983 Supplement, sections 477A.0131,
subdivision 2, and 477A.03, subdivision 2, are repealed.
Sec. 9. [EFFECTIVE DATE.]
Sections 1 to 4 and 6 to 8 are effective the day following
final enactment. Section 5 is effective for distributions
beginning with calendar year 1985.
ARTICLE 5
ECONOMIC DEVELOPMENT
Section 1. Minnesota Statutes 1983 Supplement, section
273.1312, subdivision 4, as amended by H.F. No. 1877, is amended
to read:
Subd. 4. [ELIGIBILITY REQUIREMENTS.] An area is eligible
for designation if the following requirements are met:
(a) The boundary of the zone or each subdivision of the
zone is continuous and includes vacant or underutilized lands or
buildings.
(b) The area of the zone is less than 400 acres. The total
market value of the taxable property contained in the zone at
the time of application is less than $100,000 per acre or
$300,000 per acre for an area located wholly within a first
class city. A zone which is located in a city of the third or
fourth class may be divided into two to four separate
subdivisions which need not be contiguous with each other. Each
subdivision must contain not less than 100 acres. The
restrictions provided by this paragraph shall not apply to areas
designated pursuant to paragraph (c), clause (2) or (3).
(c) (1) The proposed zone is located within an economic
hardship area, as established by meeting two or more of the
following criteria:
(A) the number of residential housing units within the area
which are substandard is 15 percent or greater under criteria
prescribed by the commissioner using data collected by the
bureau of the census or data submitted by the municipality and
approved by the commissioner;
(B) the percentage of households within the area that fall
below the poverty level, as determined by the United States
census bureau, is 20 percent or greater;
(C) (i) the total market value of commercial and industrial
property in the area has declined over three of the preceding
five years, or (ii) the total market value of all property in
the area has declined or it has increased less than ten 10.5
percent over the preceding three-year period;
(D) for the last full year for which data is available, the
per capita income in the area was 90 percent or less of the per
capita income for the state, excluding standard metropolitan
stastistical areas, or for the standard metropolitan statistical
area if the area is located in a standard metropolitan
statistical area;
(E) (i) the current rate of unemployment in the area is 120
percent of the statewide average unemployment for the last
12-month period for which verifiable figures are available, or
(ii) the total number of employment positions has declined by
ten percent during the last 18 months; or
(2) The area is so designated under federal legislation
providing for federal tax benefits to investors, employers or
employees in enterprise zones; or
(3) The area consists of a statutory or home rule charter
city with a contiguous border with a city in another state or
with a contiguous border with a city in Minnesota which has a
contiguous border with a city in another state and the area is
determined by the commissioner to be economically or fiscally
distressed.
For purposes of this subdivision, an economic hardship area
must have a population under the most recent federal decennial
census of at least (i) 4,000 if any of the area is located
wholly or partly within a standard metropolitan statistical
area, or (ii) 2,500 for an area located outside of a standard
metropolitan statistical area, or (iii) no minimum in the case
of an area located in an Indian reservation; except that, in the
case of two or more cities seeking designation of an enterprise
zone under a joint exercise of power pursuant to section 471.59,
the minimum population required by this provision shall not
exceed the sum of the populations of those cities.
Sec. 2. Minnesota Statutes 1983 Supplement, section
273.1314, subdivision 6, is amended to read:
Subd. 6. [LOCAL CONTRIBUTION.] No area may be designated
as an enterprise zone unless the municipality agrees to make a
qualifying local contribution in the form of (a) a property tax
reduction for employment property as provided by section
273.1313 for any business qualifying for a state tax reduction
pursuant to this section, or (b) an equivalent local
contribution or investment out of other municipal funds, but
excluding any special federal grants or loans. In concluding
the agreement with the municipality the commissioner may require
that the local contribution will be made in a specified ratio to
the amount of the state credits authorized. If the local
contribution is to be used to fund additional reductions in
state taxes, the commissioner and the governing body of the
municipality shall enter an agreement for timely payment to the
state to reimburse the state for the amount of tax revenue
foregone as a result.
Sec. 3. Minnesota Statutes 1983 Supplement, section
273.1314, subdivision 8, is amended to read:
Subd. 8. [FUNDING LIMITATIONS.] The maximum amount of the
tax reductions which may be authorized pursuant to designations
of enterprise zones under section 273.1312 and this section is
limited to $32,000,000 $35,600,000. The maximum amount of this
total which may be authorized by the commissioner for tax
reductions pursuant to subdivision 9 that will reduce tax
revenues which otherwise would have been received during fiscal
years 1984 and 1985 is limited to $8,000,000 $9,000,000. Of the
total limitation and the 1984-1985 biennial limitation the
commissioner shall allocate to enterprise zones designated under
section 273.1312, subdivision 4, paragraph (c), clause (3), an
amount equal to $10,000,000 $16,610,940 and $4,000,000
$5,000,000 respectively. These funds shall be allocated among
such zones on a per capita basis except that the maximum
allocation to any one city is $6,610,940 and no city's
allocation shall exceed $210 on a per capita basis. An amount
sufficient to fund the state funded property tax credits
authorized pursuant to this section is appropriated to the
commissioner of revenue. Upon designation of an enterprise zone
the commissioner shall certify the total amount available for
tax reductions in the zone for its duration. The amount
certified shall reduce the amount available for tax reductions
in other enterprise zones. If subsequent estimates indicate or
actual experience shows that the approved tax reductions will
result in amounts of tax reductions in excess of the amount
certified, the commissioner shall implement a plan to reduce the
available tax reductions in the zone to an amount within the sum
certified. If subsequent estimates indicate or actual
experience shows that the approved tax reductions will result in
amounts of tax reductions below the amount certified, the
difference shall be available for certification in other zones
or used in connection with an amended plan of tax reductions for
the zone as the commissioner determines appropriate. If the tax
reductions authorized result in reduced revenues for a dedicated
fund, the commissioner of finance shall transfer equivalent
amounts to the dedicated fund from the general fund as necessary.
Sec. 4. Minnesota Statutes 1983 Supplement, section
273.1314, subdivision 15, is amended to read:
Subd. 15. [REPORTING.] The commissioner shall require
municipalities receiving enterprise zone designations pursuant
to section 273.1312, subdivision 4, to supply information or
otherwise report to the state regarding the economic activity
which has occurred in the zone following the designation. This
information shall include the number of jobs created in the
zone, the number of economically disadvantaged individuals hired
in the zone, the average wage level of the jobs created, and
descriptions of any affirmative action programs undertaken by
the municipality in connection with the zone. The amount of the
municipality's local contribution and the number of businesses
qualifying for or directly benefiting from the local
contribution must be reported annually to the commissioner.
Sec. 5. Minnesota Statutes 1983 Supplement, section
290.069, subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) "Small business
assistance office" means a nonprofit corporation which is formed
under chapter 317, is an exempt organization under section
501(c)(3) of the Internal Revenue Code, and satisfies the
following conditions:
(1) The primary purpose of the corporation is to aid in the
formation of new businesses which create jobs in the state by
training or providing other direct assistance to entrepreneurs,
managers, inventors, and other individuals in the development,
financing, and operation of qualified small businesses.
(2) The corporation provides audited financial statements
to all contributors and the commissioner of energy, planning,
and development within 90 days following the close of the
corporation's fiscal year.
(3) The corporation employs, at least, two full-time
professional employees or the equivalent. This clause is
satisfied if the corporation employs one full-time professional
employee and shares a professional employee with another
organization engaged in related activities, including but not
limited to providing development financing or other services to
businesses.
(4) The corporation is not engaged in providing financing
or primarily engaged in arranging financing for businesses.
(5) The commissioner of energy, planning and economic
development certifies that the corporation satisfies the
requirements of this paragraph for the calendar year.
(b) "Technology" means a proprietary process, formula,
pattern, device, or compilation of scientific or technical
information unless it
(1) is in the public domain; or
(2) cannot be accurately valued.
(c) "Controlled group of corporations" means the controlled
group of corporations as defined in section 1563 of the Internal
Revenue Code, and if the corporation is part of a unitary
business, includes the corporations or entities constituting the
unitary business which are not in the controlled group of
corporations as defined in section 1563.
(d) An "innovation center public corporation" is a
nonprofit public corporation located at a state university in
Minnesota that has the purpose of assisting, encouraging,
developing, and advancing the high technology small business
prosperity and economic welfare of the state.
(e) The "Internal Revenue Code" means the Internal Revenue
Code of 1954, as amended through January 15, 1983.
(f) "Qualified small business" means a business an entity,
whether organized as a corporation, partnership, or
proprietorship, organized for profit if the entity: that
satisfies the following conditions.
(1) Has The entity had 20 or fewer employees and has had
less than $1,000,000 in gross annual receipts; in each of its
three previous taxable years. The number of employees for
purposes of this clause and clause (2) shall be determined on an
annualized full-time equivalent basis.
(2) The entity is not a subsidiary or an affiliate of a
business an entity which employs more than 20 employees or has
which had total gross receipts for the previous year of more
than $1,000,000, computed by aggregating all of the employees
and gross receipts of the business entities affiliated with the
business;.
(3) The entity has its commercial domicile in this state;.
(4) Does The entity did not derive more than 20 percent of
its gross receipts from royalties, rents, dividends, interest,
annuities, and sales or exchanges of stock or securities; in one
or more of the three previous taxable years. Gross receipts
from the sale of stock or securities shall be taken into account
only to the extent of gains realized. If the business was not
in operation for an entire year at the time of application for
certification, this clause is not satisfied if the entity
engages in or intends to engage in a trade or business producing
or is likely to derive more than 20 percent of its gross
receipts from rents, royalties, dividends, interest, annuities,
and sales or exchanges of stock or securities. This clause does
not apply to the first taxable year of the entity if the total
amount of passive income for the year is less than $3,000 or to
a sole proprietor.
(5) The entity is not engaged in a trade or business, the
primary purpose of which is described in section 103(b)(6)(O) of
the Internal Revenue Code of 1954, as amended through January
15, 1983; and.
(6) Is certified by The commissioner of energy, planning
and economic development certifies that it the entity satisfies
the requirements of clauses (1) to (5). An income tax return
filed with the commissioner of energy and economic development
in order to obtain a certification is nonpublic data or private
data on individuals, whichever is applicable, as defined in
section 13.02.
A qualified small business does not include an entity
engaged primarily in providing licensed professional services.
Sec. 6. Minnesota Statutes 1983 Supplement, section
290.069, subdivision 2, is amended to read:
Subd. 2. [TECHNOLOGY TRANSFER CREDIT.] A credit may be
claimed against the taxes imposed by this chapter in an amount
equal to 30 percent of the net value of the technology
transferred to a qualified small business if the following
conditions are satisfied:
(a) The commissioner certifies that the technology has the
value claimed by the transferor taxpayer.
(b) The transferor taxpayer is the exclusive and undisputed
owner of the technology at the time the transfer is made.
(c) Except as provided in paragraph (h), the transferor
retains no proprietary or financial interest in the technology
subsequent to its transfer to the qualified small business and
no credit is claimed for the transfer of the technology in a
prior or subsequent taxable year, except pursuant to the
carryover provisions of subdivision 5.
(d) The credit shall apply only to the first $1,000,000 of
the net value of the technology transferred during the taxable
year. The value of the technology shall not exceed the total
qualified research expenses, as defined in section 290.068,
subdivision 2, expended by the transferor to create or develop
the technology. For purposes of this clause paragraph, "net
value" means the total value of the technology less any payments
received from the transferee and less the value of any equity
interest in the transferee received by the transferor in
exchange for the technology. For purposes of determining the
value of the equity interest, the total value of the transferee
shall be deemed to be not less than the value of the technology
transferred, less any cash payment made to the transferor.
(e) The taxpayer has not deducted the value of the
transferred property from income under any other provisions of
this chapter, except that the costs of developing the technology
may have been deducted as a business expense or depreciated or
included in the computation of the research and experimental
expenditure credit pursuant to section 290.068.
(f) The transferee business entity may not be a subsidiary
or affiliate of the transferor taxpayer.
(g) The transferee makes a substantial investment in
acquiring or developing the technology. The requirements of
this clause are satisfied if over a two-year period beginning
not later than the date of the transfer (1) the transferee pays
the transferor an amount equal to 20 percent of the value of the
technology in return for acquisition of the rights to the
technology, or if (2) the transferee expends an equivalent
amount for equipment, materials, wages, or other direct costs to
develop, produce, or otherwise use the technology. The
requirements of this paragraph may not be satisfied by granting
the transferor an equity interest as provided by paragraph (h).
(h) The transferor may receive in exchange for the transfer
of the technology an equity interest in the transferee, but this
interest may not exceed 25 percent of the capital interest, if
the transferee is a partnership, or 25 percent in value of the
outstanding stock, if the transferee is a corporation. The
transferor's basis in the equity interest shall be reduced by
the amount of the credits received pursuant to this
subdivision. The transferor may not deduct any loss realized on
the sale or exchange of the equity interest.
(i) The maximum credit which is allowed for technology
transferred during the taxable year is $300,000. The maximum
credit which is allowable for technology transferred during all
taxable years to an entity or a related person to the transferee
entity is $300,000. A person is a related person to the entity
if (i) the relationship would result in disallowance of losses
under section 267 or 707(b) of the Internal Revenue Code or (ii)
the person and the entity are members of the same controlled
group or corporation.
The commissioner may require that the taxpayer obtain an
appraisal of the value of the transferred technology by a
reliable, expert third party. The disclosure to a third party
appraiser of information necessary to make an appraisal shall
not be subject to the provisions of section 290.61. The
commissioner may promulgate administrative rules for appraising
the value of transferred technology.
Sec. 7. Minnesota Statutes 1983 Supplement, section
290.069, is amended by adding a subdivision to read:
Subd. 2a. [RECAPTURE; TECHNOLOGY TRANSFER CREDIT.] (a) A
corporation which receives a tax reduction pursuant to
subdivision 2 shall repay to the commissioner an amount of the
tax reduction as specified in paragraph (b) if any of the
following conditions occur within a three-year period after the
date of transfer of the technology.
(1) The transferee ceases operations in Minnesota.
(2) The transferee becomes a subsidiary or affiliate of the
transferor.
(3) The transferee sells, transfers, or otherwise disposes
of the rights to technology.
(4) The transferee fails to make the necessary payments or
expenditures required by subdivision 2, paragraph (g).
(5) The transferee grants an interest to the transferor in
violation of subdivision 2, paragraph (h).
(b) The amount of the repayment is determined pursuant to
the following schedule:
Occurrence of event causing recapture Repayment portion
Less than six months 100 percent
Six months or more but less than 12 months 83-1/3 percent
12 months or more but less than 18 months 66-2/3 percent
18 months or more but less than 24 months 50 percent
24 months or more but less than 30 months 33-1/3 percent
30 months or more but less than 36 months 16-2/3 percent
Sec. 8. Minnesota Statutes 1983 Supplement, section
290.069, subdivision 4, is amended to read:
Subd. 4. [EQUITY INVESTMENT CREDIT.] (a) A credit shall be
allowed against the tax imposed by this chapter for the taxable
year in an amount equal to 30 percent of the net investment in
excess of $25,000 in the equity stock of a qualified small
business, which is organized as a corporation. The maximum
amount of the credit for a taxable year may not exceed $75,000.
The credit for the taxable year is the least of
(1) $75,000, or
(2) 30 percent of the sum of the following, computed for
the investment in each qualified small business:
(A) The net investment made by the taxpayer during the
taxable year in the equity stock of the qualified small
business, less
(B) $25,000; or
(3) 75 percent of the taxpayer's tax liability computed
after subtraction of all nonrefundable credits.
(b) For purposes of this credit the following limitations
apply:
(1) Equity stock means common or preferred stock in the
qualified small business, and shall not include any security
which provides for fixed or variable interest payments which
would be treated as debt under section 385 of the Internal
Revenue Code.
(2) The taxpayer and any related persons may not own more
than 49 percent of the value of any class of stock. For
purposes of this paragraph clause, a person is a related person
to another person if (i) the relationship between the persons
would result in a disallowance of losses under section 267 or
707(b) of the Internal Revenue Code of 1954 or (ii) the persons
are members of the same controlled group of corporations. The
restrictions provided by this subdivision shall apply for a
three-year period beginning on the date the stock is purchased.
If the taxpayer or a related person acquires more than 49
percent of the value of any class of stock after the allowance
of a credit under this subdivision and prior to the end of the
three-year period, the taxpayer's tax for the taxable year in
which the credit was allowed shall be increased by the amount of
the credit previously claimed.
(3) The credit shall not exceed 75 percent of the
taxpayer's tax liability computed after the subtraction of all
credits, other than the credit provided in this subdivision.
"Net investment" is limited to cash or the fair market value of
marketable securities which are transferred to the qualified
small business in return for equity stock, less the value of any
other property or other consideration received by the taxpayer.
The amount of the net investment shall be reduced by any
payments made by the qualified small business to redeem shares
of its stock or to acquire the assets or stock of another
business during a 24-month period beginning one year prior to
the taxpayer's purchase of the stock in the qualified small
business. Marketable securities are limited to (A) obligations
of the United States government, (B) securities of a corporation
or other entity the stock or other securities of which are
listed by the New York or American Stock Exchange or by the
National Association of Securities Dealers Automated Quotation
System, or (C) state or local government obligations, other than
industrial development bonds as defined in section 103(b) of the
Internal Revenue Code. The transfer of the assets of an entity
engaged in a trade or business as a corporation, partnership,
association, or proprietorship to a corporation shall not
qualify as a net investment for purposes of the credit, if the
ownership of the transferee corporation is substantially the
same as that of the entity. For purposes of the preceding
sentence, any property owned by or used directly in the
business, pledged as collateral, or used as working capital
shall constitute assets of the business.
(b) (c) If the principal place of business of the qualified
small business is located in an enterprise zone designated
pursuant to section 273.1312, $10,000 shall be substituted for
$25,000 and $100,000 for $75,000 in paragraph (a).
(c) (d) The taxpayer's basis in the stock shall be reduced
by the amount of the credit.
(e) In the case of an investment made by a small business
corporation, having a valid election in effect under section
1362 of the Internal Revenue Code, or by a partnership, the
credit shall be allocated among the shareholders or partners on
a pro rata basis and the limitations contained in paragraphs (a)
and (c) shall apply to the small business corporation or
partnership. In no case shall a taxpayer be allowed a maximum
credit in excess of that permitted by paragraph (a) or (c).
Sec. 9. Minnesota Statutes 1983 Supplement, section
290.069, is amended by adding a subdivision to read:
Subd. 4a. [RECAPTURE; EQUITY INVESTMENT CREDIT.] (a) A
taxpayer who receives a tax reduction pursuant to subdivision 4
shall repay to the commissioner an amount of the tax reduction
as specified in paragraph (b) if any of the following conditions
occur within a four-year period after the date of the investment:
(1) The taxpayer transfers, sells, or otherwise disposes of
the stock other than transfer by the estate of a taxpayer who
died after acquiring the stock.
(2) The taxpayer or a related person acquires an interest
in the qualified small business in excess of that permitted by
subdivision 4, clause (b)(2).
(3) The transferee ceases operations in Minnesota.
(b) The amount of the repayment is determined pursuant to
the following schedule:
Occurrence of event causing recapture Repayment portion
Less than six months 100 percent
Six months or more but less than 12 months 87-1/2 percent
12 months or more but less than 18 months 75 percent
18 months or more but less than 24 months 62-1/2 percent
24 months or more but less than 30 months 50 percent
30 months or more but less than 36 months 37-1/2 percent
36 months or more but less than 42 months 25 percent
42 months or more but less than 48 months 12-1/2 percent
(c) If a credit was allowed for a qualified small business
whose principal place of business was located in an enterprise
zone and the business ceases operations in the zone within three
years after the investment is made, the taxpayer shall file an
amended return claiming the credit without regard to subdivision
4, paragraph (c).
Sec. 10. Minnesota Statutes 1983 Supplement, section
290.069, is amended by adding a subdivision to read:
Subd. 4b. [MULTISTATE BUSINESSES.] If a qualified small
business is engaged in a business partly within and partly
without the state, the credit allowable pursuant to subdivision
2 or 4 for technology transferred to or a net investment made in
the business must be apportioned. The credit determined
pursuant to subdivision 2 or 4 must be multiplied by the
arithmetical average of the qualified small business' property
and payrolls, determined as provided by section 290.19,
subdivision 1, clauses (2)(a)(2) and (2)(a)(3), using data from
the most recently available year. After the technology is
transferred or the investment made, the qualified small business
shall certify to the transferor taxpayer its factors under
section 290.19, subdivision 1, clauses (2)(a)(2) and (2)(a)(3)
for each of the succeeding two tax years. If the factors for
either of these years would result in at least a 25 percent
change in the allowable credit, the taxpayer shall file an
amended return repaying or claiming the difference in the
credit. The preceding sentence does not apply if the qualified
small business ceases operations in Minnesota and the recapture
provisions of subdivision 2a or 4a apply.
Sec. 11. Minnesota Statutes 1983 Supplement, section
290.069, subdivision 5, is amended to read:
Subd. 5. [LIMITATIONS CARRYOVER; OTHER CONDITIONS.] The
provisions of section 290.068, subdivisions 3, clause (a); 4;
and 5 shall apply to the sum of the credits which this section
allows, except that no carryback shall be allowed. The
carryover provisions of section 290.068, subdivision 3, clause
(b), shall apply to the sum of the credits allowed by this
section except that the term "research credit" or "research and
experimental expenditure credit" shall include the credits
authorized by subdivisions 2 and 3 of this section. If the
amount of the allowable credit pursuant to subdivision 2 or 3
for the taxable year exceeds the taxpayer's tax liability or if
the limitation contained in subdivision 4, clause (a)(3)
applies, the unused credit for the taxable year is a carryover
to each of the succeeding five taxable years. The entire amount
of the unused credit must be carried to the earliest of the
taxable years to which it may be carried. "Tax liability" means
the tax imposed by this chapter reduced by the sum of the
nonrefundable credits allowed under this chapter except the
credit allowed by section 290.068. The credits allowed by
subdivisions 2 and 3 shall only be available to corporations and
banks whose tax is computed pursuant to section 290.06,
subdivision 1.
The maximum limitations on the amount of credits pursuant
to subdivisions 2 and, 3, and 4 shall be determined by
aggregating together the credits of all the corporations in the
controlled group of corporations with the taxpayer. In order to
facilitate compliance with and enforcement of this provision the
commissioner may require the taxpayer to claim the credit on a
combined report of the unitary business or to file a copy of the
consolidated federal return with the state return or both.
Sec. 12. Minnesota Statutes 1983 Supplement, section
290.069, is amended by adding a subdivision to read:
Subd. 7. [COMMISSIONER'S POWER TO DISALLOW CREDIT.] The
commissioner may disallow a credit under subdivision 2 or 4 if
he determines that the transaction giving rise to the credit was
entered into by the parties primarily to reduce taxes and not
primarily for an independent business or commercial purpose
other than the reduction of taxes.
Sec. 13. [TRANSITION PROVISION; FARMS.]
An investment made on or before June 30, 1985, in a
corporation primarily engaged in the business of farming does
not qualify for the equity investment credit under Minnesota
Statutes, section 290.069. The business of farming includes the
activities enumerated in Minnesota Statutes, section 290.09,
subdivision 29, paragraph (a). The commissioner of energy and
economic development may not certify an entity primarily engaged
in farming as a qualified small business under Minnesota
Statutes, section 290.069, subdivision 1, prior to July 1, 1985.
Sec. 14. Minnesota Statutes 1983 Supplement, section
290.21, subdivision 4, is amended to read:
Subd. 4. (a) 85 percent of dividends received by a
corporation during the taxable year from another corporation,
when the corporate stock with respect to which dividends are
paid does not constitute the stock in trade of the taxpayer or
would not be included in the inventory of the taxpayer, or does
not constitute property held by the taxpayer primarily for sale
to customers in the ordinary course of his trade or business, or
when the trade or business of the taxpayer does not consist
principally of the holding of the stocks and the collection of
the income and gains therefrom. The remaining 15 percent shall
be allowed if the recipient owns 80 percent or more of all the
voting stock of such the other corporation, and the dividends
were paid from income arising out of business done in this state
by the corporation paying such dividends; but if the income out
of which the dividends are declared was derived from business
done within and without this state, then so much of the
remainder shall be allowed as a deduction as the amount of the
taxable net income of the corporation paying the dividends
assignable or allocable to this state bears to the entire net
income of the corporation, such rate being determined by the
returns under this chapter of the corporation paying such
dividends for the taxable year preceding the distribution
thereof; the burden shall be on the taxpayer of showing that the
amount of remainder claimed as a deduction has been received
from income arising out of business done in this state.
(b) If the trade or business of the taxpayer consists
principally of the holding of the stocks and the collection of
the income and gains therefrom, dividends received by a
corporation during the taxable year from another corporation, if
the recipient owns 80 percent or more of all the voting stock of
such the other corporation, from income arising out of business
done in this state by the corporation paying such dividends;
but, if the income out of which the dividends are declared was
derived from business done within and without this state, then
so much of the dividends shall be allowed as deduction as the
amount of the taxable net income of the corporation paying the
dividends assignable or allocable to this state bears to the
entire net income of the corporation, such rate being determined
by the returns under this chapter of the corporation paying such
dividends for the taxable year preceding the distribution
thereof. The burden shall be on the taxpayer of showing that
the amount of dividends claimed as a deduction has been received
from income arising out of business done in this state.
(c) The dividend deduction provided in this subdivision
shall be allowed only with respect to dividends that are
included in a corporation's Minnesota taxable net income for the
taxable year.
The dividend deduction provided in this subdivision does
not apply to a dividend from a corporation which, for the
taxable year of the corporation in which the distribution is
made or for the next preceding taxable year of the corporation,
is a corporation exempt from tax under section 501 of the
Internal Revenue Code of 1954, as amended through December 31,
1982.
The dividend deduction provided in this subdivision applies
to the amount of regulated investment company dividends only to
the extent determined under section 854(b) of the Internal
Revenue Code of 1954, as amended through December 31, 1982.
(d) If dividends received by a corporation that does not
have nexus with Minnesota under the provisions of Public Law
86-272 are included as income on the return of an affiliated
corporation permitted or required to file a combined report
under section 290.34, subdivision 2, then for purposes of this
subdivision the determination as to whether the trade or
business of the corporation consists principally of the holding
of stocks and the collection of income and gains therefrom shall
be made with reference to the trade or business of the
affiliated corporation having a nexus with Minnesota.
(e) Dividends received by a corporation from another
corporation which is organized under the laws of a foreign
country or a political subdivision of a foreign country, if the
dividends are paid from income arising from sources without the
United States, the commonwealth of Puerto Rico, and the
possessions of the United States. The deduction provided by
this clause does not apply if the corporate stock with respect
to which dividends are paid constitutes the stock in trade of
the taxpayer, or would be included in the inventory of the
taxpayer, or constitutes property held by the taxpayer primarily
for sale to customers in the ordinary course of the taxpayer's
trade or business, or if the trade or business of the taxpayer
consists principally of the holding of stocks and the collection
of the income or gains therefrom. No dividend may be deducted
under this clause if it is deducted under clause (a).
Sec. 15. Minnesota Statutes 1982, section 290.21, is
amended by adding a subdivision to read:
Subd. 8. [FOREIGN SOURCE ROYALTIES.] (a) Rentals, fees,
and royalties accrued or received from a foreign corporation for
the use of or for the privilege of using outside of the United
States patents, copyrights, secret processes and formulas, good
will, know-how, trademarks, trade brands, franchises, and other
like property. Rentals, fees, or royalties deducted under this
subdivision shall not be included in the taxpayer's
apportionment factors under section 290.19, subdivision 1,
clause (1)(a) or (2)(a)(1). The preceding sentence shall not be
construed to imply that nondeductible rentals, fees, and
royalties from such properties are or were included in or
excluded from the apportionment factors under any other
provision of law.
(b) A corporation is allowed the deduction provided by this
subdivision only if during the taxable year it received or
accrued at least 80 percent of its gross income from sources as
defined in clause (a) and from dividends received from foreign
corporations. The corporation's gross income for purposes of
this clause shall be computed without regard to the requirement
of section 290.34, subdivision 2, that a combined report be
filed reflecting the entire income of the unitary business.
(c) For purposes of this subdivision, a foreign corporation
is (i) a corporation organized under the laws of a foreign
country or the political subdivision of a foreign country or
(ii) a corporation which for the taxable year derives at least
80 percent of its gross income from sources without the United
States, the commonwealth of Puerto Rico, and the possessions of
the United States. A foreign corporation does not include a
DISC as defined in section 992(a) of the Internal Revenue Code
of 1954, as amended through December 31, 1983.
(d) The deduction provided in this subdivision is allowed
only with respect to rentals, fees, and royalties that are
included in a corporation's Minnesota taxable net income for the
taxable year.
Sec. 16. Minnesota Statutes 1982, section 462.651,
subdivision 1, is amended to read:
Subdivision 1. [GENERAL TAXES.] The governing body of a
municipality in which any project of a redevelopment company is
located may, by ordinance or resolution after the local approval
as provided in subdivision 5, exempt from all local taxes so
much up to 50 percent of the value of the property included in
that project as which represents an increase over the assessed
valuation of the property, both land and improvements, acquired
for the project at the time of its original acquisition for
redevelopment purposes. Should such a If the governing body
grant such a tax grants an exemption, the project shall, to the
extent of the municipal exemption and during the period thereof,
be exempt from any and all state, county, and school district ad
valorem property taxes. The tax exemption specified herein
shall not operate for a period of more than 25 ten years,
commencing in each instance from the date on which the benefits
of such exemption first become available and effective. There
shall be No exemption may be granted from payment of special
assessments or from the payment of inspection, supervision, and
auditing fees of the commissioner of energy, planning and
development or the authority.
Sec. 17. Minnesota Statutes 1982, section 462.651, is
amended by adding a subdivision to read:
Subd. 5. [COMMENT BY COUNTY BOARD.] Before approving a tax
exemption pursuant to this section, the governing body of the
municipality must provide an opportunity to the members of the
county board of commissioners of the county in which the project
is proposed to be located and the members of the school board of
the school district in which the project is proposed to be
located to meet with the governing body. The governing body
must present to the members of those boards its estimate of the
fiscal impact of the proposed property tax exemption. The tax
exemption may not be approved by the governing body until the
county board of commissioners has presented its written comment
on the proposal to the governing body, or 30 days have passed
from the date of the transmittal by the governing body to the
board of the information on the fiscal impact, whichever occurs
first.
Sec. 18. [ALLOCATION TO DULUTH.]
The city of Duluth is allocated $6,610,940 of the tax
reductions permitted by section 273.1314, subdivision 8,
pursuant to its designation under section 273.1312, subdivision
4, paragraph (c), clause (3).
Sec. 19. [PLANT CONSTRUCTION AND EXPANSION GRANTS.]
Subdivision 1. [APPROPRIATION.] The sum of $3,400,000 is
appropriated from the general fund to the commissioner of energy
and economic development for the purpose of providing grants to
industrial operations that are substantially renovating their
facilities, provided that the renovation enables the operation
to continue to provide a substantial portion of the industrial
employment of the community in which it is located. The grant
is intended to help meet the cost of property tax increases due
to plant expansion or renovation and the cost of sales tax or
equipment purchased to replace obsolete, inadequate, or
inefficient equipment in the plant.
Of the sum appropriated, up to $1,000,000 may be granted to
a meat processing and packing facility that, at the time when
renovation or expansion of the facility begins, provides over 20
percent of the industrial employment in the city. The entire
amount of this grant may be paid on or after July 1, 1984.
Up to $2,400,000 may be granted to a manufacturer of
internal combustion engines, generators, electrical generating
sets, and switchgear that, at the time when renovation or
expansion of the facility begins, provides over ten percent of
the industrial employment in the city. This grant is to be
disbursed as follows. The recipient must annually certify to
the commissioner the following amounts paid during the year: (a)
the additional property taxes paid as a result of the expansion
and (b) one-third of the sales tax paid on replacement capital
equipment that does not qualify for the four percent sales tax
rate under Minnesota Statutes, section 297A.02, subdivision 2.
The commissioner shall pay the lesser of the amount certified
for the year or $480,000. If in a year the amount certified is
less than $480,000, the excess shall carryforward and may be
paid in a succeeding year. The commissioner may not pay an
amount in excess of that certified. The appropriation for this
grant does not cancel.
An additional sum of $100,000 is appropriated to the
commissioner of energy and economic development to provide a
grant to a city which is selected as the site for a foreign
manufacturing development facility. This grant is not subject
to the limitations contained in the first paragraph of this
subdivision. A foreign manufacturing development project is a
production and office facility financed, in whole or part, by an
agency of a foreign government or a foreign corporation for the
purpose of testing and developing the expertise of foreign firms
in manufacturing products in the United States. The city may
use the grant moneys to provide assistance to the foreign
manufacturing development facility in the manner it determines
appropriate.
Designation of grant recipients is not subject to the
provisions of chapter 14.
Subd. 2. [RECAPTURE.] A business that receives a grant
pursuant to subdivision 1 shall repay to the commissioner of
energy and economic development a portion of the grant if,
within five years of the receipt of the grant, the commissioner
determines that (1) the recipient has failed to renovate or
expand its facility according to the schedule submitted pursuant
to subdivision 1 and that the recipient is unlikely to resume
the renovation or expansion activity according to a schedule
that is reasonably similar in result to the original schedule,
allowing for some extension of time, not to exceed 20 percent of
the time originally scheduled, for accomplishment of the
renovation or expansion, or (2) the recipient has ceased
operation of the facility.
The amount of the repayment is determined according to the
following schedule:
Occurrence of event causing recapture Repayment portion
Less than one year 100 percent
One year or more but less than two years 80 percent
Two years or more but less than three years 60 percent
Three years or more but less than four years 40 percent
Four years or more but less than five years 20 percent
Sec. 20. [REPEALER.]
Minnesota Statutes 1982, section 462.651, subdivision 2,
and Minnesota Statutes 1983 Supplement, section 462.651,
subdivision 3 are repealed.
Sec. 21. [EFFECTIVE DATE; APPROPRIATION.]
Sections 1 to 4 are effective the day following final
enactment. Sections 5 to 13 are effective for taxable years
beginning after December 31, 1983, except that they shall not
apply to qualified small businesses that were certified by the
commissioner of energy and economic development prior to April
10, 1984. Section 14 is effective for taxable years beginning
after June 30, 1985. Section 15 is effective for taxable years
beginning after December 31, 1984. Sections 16, 17, and 20 are
effective for exemptions approved after July 1, 1984. Section
18 is effective July 1, 1984.
ARTICLE 6
SALES
Section 1. Minnesota Statutes 1982, section 297A.01,
subdivision 15, is amended to read:
Subd. 15. "Farm machinery" means new or used machinery,
equipment, implements, accessories and contrivances used
directly and principally in the production for sale, but not
including the processing, of livestock, dairy animals, dairy
products, poultry and poultry products, fruits, vegetables,
forage, grains and bees and apiary products. "Farm machinery"
shall include machinery for the preparation, seeding or
cultivation of soil for growing agricultural crops, harvesting
and threshing of agricultural products, and certain machinery
for dairy, livestock and poultry farms, together with barn
cleaners, milking systems, grain dryers, automatic feeding
systems and similar installations. Irrigation equipment sold
for exclusively agricultural use, including pumps, pipe
fittings, valves, sprinklers and other equipment necessary to
the operation of an irrigation system when sold as part of an
irrigation system, except irrigation equipment which is situated
below ground and considered to be a part of the real property,
shall be included in the definition of farm machinery. Logging
equipment, except chain saws, shall be included in the
definition of farm machinery. Repair or replacement parts for
farm machinery shall not be included in the definition of farm
machinery.
Tools, shop equipment, grain bins, feed bunks, fencing
material, communication equipment and other farm supplies shall
not be considered to be farm machinery. "Farm machinery" does
not include motor vehicles taxed under chapter 297B,
snowmobiles, snow blowers, lawn mowers, garden-type tractors or
garden tillers and the repair and replacement parts for those
vehicles and machines.
Sec. 2. Minnesota Statutes 1982, section 297A.01, is
amended by adding a subdivision to read:
Subd. 16. [CAPITAL EQUIPMENT.] Capital equipment means
machinery and equipment and the materials and supplies necessary
to construct or install the machinery or equipment. To qualify
under this definition the capital equipment must be used by the
purchaser or lessee for manufacturing, fabricating, or refining
a product to be sold at retail and must be used for the
establishment of a new or the physical expansion of an existing
manufacturing, fabricating, or refining facility in the state.
Capital equipment does not include (1) machinery or equipment
purchased or leased to replace machinery or equipment performing
substantially the same function in an existing facility, (2)
repair or replacement parts, or (3) machinery or equipment used
to extract, receive, or store raw materials.
Sec. 3. Minnesota Statutes 1982, section 297A.01, is
amended by adding a subdivision to read:
Subd. 17. [SPECIAL TOOLING.] Special tooling means tools,
dies, jigs, patterns, gauges and other special tools which have
value and use only for the buyer and for the use for which it is
made. An item has use or value only to the buyer if the item is
not standard enough to be stocked or ordered from a catalog or
other sales literature, but must be produced in accordance with
special requirements peculiar to the buyer and not common to
someone else whose conditions for possible use of the material
are reasonably similar to the buyer's.
Sec. 4. Minnesota Statutes 1983 Supplement, section
297A.02, subdivision 2, is amended to read:
Subd. 2. [FARM MACHINERY AND EQUIPMENT.] Notwithstanding
the provisions of subdivision 1, the rate of the excise tax
imposed upon sales of farm machinery shall be, special tooling,
and capital equipment is four percent.
Sec. 5. Minnesota Statutes 1983 Supplement, section
297A.02, is amended by adding a subdivision to read:
Subd. 4. [MANUFACTURED HOUSING.] Notwithstanding the
provisions of subdivision 1, for sales at retail of manufactured
homes used for residential purposes the excise tax is imposed
upon 65 percent of the sales price of the home.
Sec. 6. Minnesota Statutes 1983 Supplement, section
297A.14, is amended to read:
297A.14 [USING, STORING OR CONSUMING TANGIBLE PERSONAL
PROPERTY; ADMISSIONS; UTILITIES.]
For the privilege of using, storing or consuming in
Minnesota tangible personal property, tickets or admissions to
places of amusement and athletic events, electricity, gas, and
local exchange telephone service purchased for use, storage or
consumption in this state, there a use tax is imposed on every
person in this state a use tax at the rate of six percent of the
sales price of sales at retail of any of the aforementioned
items unless the tax imposed by section 297A.02 was paid on the
sales price. Notwithstanding the provisions of this paragraph
the preceding sentence, the rate of the use tax imposed upon the
sales price of sales of farm machinery shall be, special
tooling, and capital equipment is four percent.
A motor vehicle subject to tax under this section shall be
taxed at its fair market value at the time of transport into
Minnesota if the motor vehicle was acquired more than three
months prior to its transport into this state.
Sec. 7. Minnesota Statutes 1982, section 297A.15, is
amended by adding a subdivision to read:
Subd. 5. [REFUND; APPROPRIATION.] Notwithstanding the
provisions of section 297A.02, subdivision 2, the tax on sales
of capital equipment shall be imposed and collected as if the
rate under section 297A.02, subdivision 1, applied. Upon
application by the purchaser, on forms prescribed by the
commissioner, a refund equal to the reduction in the tax due as
a result of the application of the rates under section 297A.02,
subdivision 2, shall be paid to the purchaser. The application
shall include information necessary for the commissioner
initially to verify that the purchases qualified as capital
equipment under section 297A.02, subdivision 2. No more than
two applications for refunds may be filed under this subdivision
in a calendar year. Unless otherwise specifically provided by
this subdivision, the provisions of section 297A.34 apply to the
refunds payable under this subdivision. There is annually
appropriated to the commissioner of revenue the amount required
to make the refunds.
Sec. 8. Minnesota Statutes 1983 Supplement, section
297A.25, subdivision 1, is amended to read:
Subdivision 1. The following are specifically exempted
from the taxes imposed by sections 297A.01 to 297A.44:
(a) The gross receipts from the sale of food products
including but not limited to cereal and cereal products, butter,
cheese, milk and milk products, oleomargarine, meat and meat
products, fish and fish products, eggs and egg products,
vegetables and vegetable products, fruit and fruit products,
spices and salt, sugar and sugar products, coffee and coffee
substitutes, tea, cocoa and cocoa products, and food products
which are not taxable pursuant to section 297A.01, subdivision
3, clause (c) and which are sold by a retailer, organized as a
nonprofit corporation or association, within a place located on
property owned by the state or an agency or instrumentality of
the state, the entrance to which is subject to an admission
charge. This exemption does not include the following:
(i) candy and candy products, except when sold for
fundraising purposes by a nonprofit organization that provides
educational and social activities for young people primarily
aged 18 and under;
(ii) carbonated beverages, beverages commonly referred to
as soft drinks containing less than 15 percent fruit juice, or
bottled water other than noncarbonated and noneffervescent
bottled water sold in individual containers of one-half gallon
or more in size;
(b) The gross receipts from the sale of prescribed drugs
and medicine intended for use, internal or external, in the
cure, mitigation, treatment or prevention of illness or disease
in human beings and products consumed by humans for the
preservation of health, including prescription glasses,
therapeutic and prosthetic devices, but not including cosmetics
or toilet articles notwithstanding the presence of medicinal
ingredients therein;
(c) The gross receipts from the sale of and the storage,
use or other consumption in Minnesota of tangible personal
property, tickets, or admissions, electricity, gas, or local
exchange telephone service, which under the Constitution or laws
of the United States or under the Constitution of Minnesota, the
state of Minnesota is prohibited from taxing;
(d) The gross receipts from the sale of tangible personal
property (i) which, without intermediate use, is shipped or
transported outside Minnesota by the purchaser and thereafter
used in a trade or business or is stored, processed, fabricated
or manufactured into, attached to or incorporated into other
tangible personal property transported or shipped outside
Minnesota and thereafter used in a trade or business outside
Minnesota, and which is not thereafter returned to a point
within Minnesota, except in the course of interstate commerce
(storage shall not constitute intermediate use); provided that
the property is not subject to tax in that state or country to
which it is transported for storage or use, or, if subject to
tax in that other state, that state allows a similar exemption
for property purchased therein and transported to Minnesota for
use in this state; except that sales of tangible personal
property that is shipped or transported for use outside
Minnesota shall be taxed at the rate of the use tax imposed by
the state to which the property is shipped or transported,
unless that state has no use tax, in which case the sale shall
be taxed at the rate generally imposed by this state; and
provided further that sales of tangible personal property to be
used in other states or countries as part of a maintenance
contract shall be specifically exempt; or (ii) which the seller
delivers to a common carrier for delivery outside Minnesota,
places in the United States mail or parcel post directed to the
purchaser outside Minnesota, or delivers to the purchaser
outside Minnesota by means of the seller's own delivery
vehicles, and which is not thereafter returned to a point within
Minnesota, except in the course of interstate commerce;
(e) The gross receipts from the sale of packing materials
used to pack and ship household goods, the ultimate destination
of which is outside the state of Minnesota and which are not
thereafter returned to a point within Minnesota, except in the
course of interstate commerce;
(f) The gross receipts from the sale of and storage, use or
consumption of petroleum products upon which a tax has been
imposed under the provisions of chapter 296, whether or not any
part of said tax may be subsequently refunded;
(g) The gross receipts from the sale of clothing and
wearing apparel except the following:
(i) all articles commonly or commercially known as jewelry,
whether real or imitation; pearls, precious and semi-precious
stones, and imitations thereof; articles made of, or ornamented,
mounted or fitted with precious metals or imitations thereof;
watches; clocks; cases and movements for watches and clocks;
gold, gold-plated, silver, or sterling flatware or hollow ware
and silver-plated hollow ware; opera glasses; lorgnettes; marine
glasses; field glasses and binoculars.
(ii) articles made of fur on the hide or pelt, and articles
of which such fur is the component material or chief value, but
only if such value is more than three times the value of the
next most valuable component material.
(iii) perfume, essences, extracts, toilet waters,
cosmetics, petroleum jellies, hair oils, pomades, hair
dressings, hair restoratives, hair dyes, aromatic cachous and
toilet powders. The tax imposed by this act shall not apply to
lotion, oil, powder, or other article intended to be used or
applied only in the case of babies.
(iv) trunks, valises, traveling bags, suitcases, satchels,
overnight bags, hat boxes for use by travelers, beach bags,
bathing suit bags, brief cases made of leather or imitation
leather, salesmen's sample and display cases, purses, handbags,
pocketbooks, wallets, billfolds, card, pass, and key cases and
toilet cases.
(h) The gross receipts from the sale of and the storage,
use, or consumption of all materials, including chemicals,
fuels, petroleum products, lubricants, packaging materials,
including returnable containers used in packaging food and
beverage products, feeds, seeds, fertilizers, electricity, gas
and steam, used or consumed in agricultural or industrial
production of personal property intended to be sold ultimately
at retail, whether or not the item so used becomes an ingredient
or constituent part of the property produced. Such production
shall include, 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. Such
production shall not include painting, cleaning, repairing or
similar processing of property except as part of the original
manufacturing process. Machinery, equipment, implements, tools,
accessories, appliances, contrivances, furniture and fixtures,
used in such production and fuel, electricity, gas or steam used
for space heating or lighting, are not included within this
exemption; however, accessory tools, equipment and other short
lived items, which are separate detachable units used in
producing a direct effect upon the product, where such items
have an ordinary useful life of less than 12 months, are
included within the exemption provided herein;
(i) The gross receipts from the sale of and storage, use or
other consumption in Minnesota of tangible personal property
(except as provided in section 297A.14) which is used or
consumed in producing any publication regularly issued at
average intervals not exceeding three months, and any such
publication. For purposes of this subsection, "publication" as
used herein shall include, without limiting the foregoing, a
legal newspaper as defined by Minnesota Statutes 1965, section
331.02, and any supplements or enclosures with or part of said
newspaper; and the gross receipts of any advertising contained
therein or therewith shall be exempt. For this purpose,
advertising in any such publication shall be deemed to be a
service and not tangible personal property, and persons or their
agents who publish or sell such newspapers shall be deemed to be
engaging in a service with respect to gross receipts realized
from such newsgathering or publishing activities by them,
including the sale of advertising. The term "publication" shall
not include magazines and periodicals sold over the counter.
Machinery, equipment, implements, tools, accessories,
appliances, contrivances, furniture and fixtures used in such
publication and fuel, electricity, gas or steam used for space
heating or lighting, are not exempt;
(j) The gross receipts from all sales, including sales in
which title is retained by a seller or a vendor or is assigned
to a third party under an installment sale or lease purchase
agreement under section 465.71, of tangible personal property
to, and all storage, use or consumption of such property by, the
United States and its agencies and instrumentalities or a state
and its agencies, instrumentalities and political subdivisions.
Sales exempted by this clause include sales pursuant to section
297A.01, subdivision 3, clauses (d) and (f). This exemption
shall not apply to building, construction or reconstruction
materials purchased by a contractor or a subcontractor as a part
of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for
use in the construction, alteration or repair of a building or
facility. This exemption does not apply to construction
materials purchased by tax exempt entities or their contractors
to be used in constructing buildings or facilities which will
not be used principally by the tax exempt entities;
(k) The gross receipts from the isolated or occasional sale
of tangible personal property in Minnesota not made in the
normal course of business of selling that kind of property, and
the storage, use, or consumption of property acquired as a
result of such a sale. For purposes of this clause, sales by a
nonprofit organization shall be deemed to be "isolated or
occasional" if they occur at sale events that have a duration of
three or fewer consecutive days. The granting of the privilege
of admission to places of amusement and the privilege of use of
amusement devices by a nonprofit organization at an isolated or
occasional event conducted on property owned or leased for a
continuous period of more than 30 days by the nonprofit
organization are also exempt. The exemption provided for
isolated sales of tangible personal property and of the granting
of admissions or the privilege of use of amusement devices by
nonprofit organizations pursuant to this clause shall be
available only if the sum of the days on which the organization
and any subsidiary nonprofit organization sponsored by it that
does not have a separate sales tax exemption permit conduct
sales of tangible personal property, plus the days with respect
to which the organization charges for the use of amusement
devices or admission to places of amusement, does not exceed
eight days in a calendar year. For purposes of this clause, a
"nonprofit organization" means any corporation, society,
association, foundation, or institution organized and operated
exclusively for charitable, religious, or educational purposes,
no part of the net earnings of which inures to the benefit of a
private individual;
(l) The gross receipts from sales of rolling stock and the
storage, use or other consumption of such property by railroads,
freight line companies, sleeping car companies and express
companies taxed on the gross earnings basis in lieu of ad
valorem taxes. For purposes of this clause "rolling stock" is
defined as the portable or moving apparatus and machinery of any
such company which moves on the road, and includes, but is not
limited to, engines, cars, tenders, coaches, sleeping cars and
parts necessary for the repair and maintenance of such rolling
stock.
(m) The gross receipts from sales of airflight equipment
and the storage, use or other consumption of such property by
airline companies taxed under the provisions of sections 270.071
to 270.079. For purposes of this clause, "airflight equipment"
includes airplanes and parts necessary for the repair and
maintenance of such airflight equipment, and flight simulators.
(n) The gross receipts from the sale of telephone central
office telephone equipment used in furnishing intrastate and
interstate telephone service to the public.
(o) The gross receipts from the sale of and the storage,
use or other consumption by persons taxed under the in lieu
provisions of chapter 298, of mill liners, grinding rods and
grinding balls which are substantially consumed in the
production of taconite, the material of which primarily is added
to and becomes a part of the material being processed.
(p) The gross receipts from the sale of tangible personal
property to, and the storage, use or other consumption of such
property by, any corporation, society, association, foundation,
or institution organized and operated exclusively for
charitable, religious or educational purposes if the property
purchased is to be used in the performance of charitable,
religious or educational functions, or any senior citizen group
or association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation and other nonprofit
purposes, no part of the net earnings of which inures to the
benefit of any private shareholders. Sales exempted by this
clause include sales pursuant to section 297A.01, subdivision 3,
clauses (d) and (f). This exemption shall not apply to
building, construction or reconstruction materials purchased by
a contractor or a subcontractor as a part of a lump-sum contract
or similar type of contract with a guaranteed maximum price
covering both labor and materials for use in the construction,
alteration or repair of a building or facility. This exemption
does not apply to construction materials purchased by tax exempt
entities or their contractors to be used in constructing
buildings or facilities which will not be used principally by
the tax exempt entities;
(q) The gross receipts from the sale of caskets and burial
vaults;
(r) The gross receipts from the sale of an automobile or
other conveyance if the purchaser is assisted by a grant from
the United States in accordance with 38 United States Code,
section 1901, as amended.
(s) The gross receipts from the sale to the licensed
aircraft dealer of an aircraft for which a commercial use permit
has been issued pursuant to section 360.654, if the aircraft is
resold while the permit is in effect.
(t) The gross receipts from the sale of building materials
to be used in the construction or remodeling of a residence when
the construction or remodeling is financed in whole or in part
by the United States in accordance with 38 United States Code,
sections 801 to 805, as amended. This exemption shall not be
effective at time of sale of the materials to contractors,
subcontractors, builders or owners, but shall be applicable only
upon a claim for refund to the commissioner of revenue filed by
recipients of the benefits provided in title 38 United States
Code, chapter 21, as amended. The commissioner shall provide by
regulation for the refund of taxes paid on sales exempt in
accordance with this paragraph.
(u) The gross receipts from the sale of textbooks which are
prescribed for use in conjunction with a course of study in a
public or private school, college, university and business or
trade school to students who are regularly enrolled at such
institutions. For purposes of this clause a "public school" is
defined as one that furnishes course of study, enrollment and
staff that meets standards of the state board of education and a
private school is one which under the standards of the state
board of education, provides an education substantially
equivalent to that furnished at a public school. Business and
trade schools shall mean such schools licensed pursuant to
section 141.25.
(v) The gross receipts from the sale of and the storage of
material designed to advertise and promote the sale of
merchandise or services, which material is purchased and stored
for the purpose of subsequently shipping or otherwise
transferring outside the state by the purchaser for use
thereafter solely outside the state of Minnesota.
(w) The gross receipt from the sale of residential heating
fuels in the following manner:
(i) all fuel oil, coal, wood, steam, hot water, propane
gas, and L.P. gas sold to residential customers for residential
use;
(ii) natural gas sold for residential use to customers who
are metered and billed as residential users and who use natural
gas for their primary source of residential heat, for the
billing months of November, December, January, February, March
and April;
(iii) electricity sold for residential use to customers who
are metered and billed as residential users and who use
electricity for their primary source of residential heat, for
the billing months of November, December, January, February,
March and April.
(x) The gross receipts from the sale or use of tickets or
admissions to the premises of or events sponsored by an
association, corporation or other group of persons which
provides an opportunity for citizens of the state to participate
in the creation, performance or appreciation of the arts and
which qualifies as a tax-exempt organization within the meaning
of Minnesota Statutes 1980, section 290.05, subdivision 1,
clause (i).
(y) The gross receipts from either the sales to or the
storage, use or consumption of tangible personal property by an
organization of military service veterans or an auxiliary unit
of an organization of military service veterans, provided that:
(i) the organization or auxiliary unit is organized within
the state of Minnesota and is exempt from federal taxation
pursuant to section 501(c), clause (19), of the Internal Revenue
Code as amended through December 31, 1982; and
(ii) the tangible personal property which is sold to or
stored, used or consumed by the organization or auxiliary unit
is for charitable, civic, educational, or nonprofit uses and not
for social, recreational, pleasure or profit uses.
(z) The gross receipts from the sale of sanitary napkins,
tampons, or similar items used for feminine hygiene.
(aa) The gross receipts from the sale of a manufactured
home, as defined in section 327.31, subdivision 6, to be used by
the purchaser for residential purposes, unless the sale is the
first retail sale of the manufactured home in this state.
Sec. 9. Minnesota Statutes 1983 Supplement, section
297B.03, is amended to read:
297B.03 [EXEMPTIONS.]
There is specifically exempted from the provisions of this
chapter and from computation of the amount of tax imposed by it
the following:
(1) Purchase or use, including use under a lease purchase
agreement or installment sales contract made pursuant to section
465.71, of any motor vehicle by any person described in and
subject to the conditions provided in section 297A.25,
subdivision 1, clauses (j), (p) and (r).
(2) Purchase or use of any motor vehicle by any person who
was a resident of another state at the time of the purchase and
who subsequently becomes a resident of Minnesota, provided the
purchase occurred more than 60 days prior to the date such
person moved his residence to the state of Minnesota.
(3) Purchase or use of any motor vehicle by any person
making a valid election to be taxed under the provisions of
section 297A.211.
(4) Purchase or use of any motor vehicle previously
registered in the state of Minnesota by any corporation or
partnership when such transfer constitutes a transfer within the
meaning of sections 351 or 721 of the Internal Revenue Code of
1954, as amended through December 31, 1974.
(5) Purchase or use of any vehicle owned by a resident of
another state and leased to a Minnesota based private or for
hire carrier for regular use in the transportation of persons or
property in interstate commerce provided the vehicle is titled
in the state of the owner or secured party, and that state does
not impose a sales or motor vehicle excise tax on motor vehicles
used in interstate commerce.
Sec. 10. Minnesota Statutes 1982, section 297B.035,
subdivision 3, is amended to read:
Subd. 3. Motor vehicles sold by a new motor vehicle dealer
in contravention of section 168.27, subdivision 10, clause
(1)(b) shall not be considered to have been acquired or
purchased for resale in the ordinary or regular course of
business for the purposes of this chapter, and the dealer shall
be required to pay the excise tax due on the purchase of those
vehicles. The sale by a lessor of a new motor vehicle under
lease within 120 days of the commencement of the lease is deemed
a sale in contravention of section 168.27, subdivision 10,
clause (1)(b) unless the lessor holds a valid contract or
franchise with the manufacturer or distributor of the vehicle.
Sec. 11. [EFFECTIVE DATE.]
Section 5 and the provision in section 8, clause (aa),
exempting certain sales of manufactured homes are effective
January 1, 1985. Section 1, the rest of section 8, and section
10 are effective for sales after June 30, 1984. Sections 2 to
4, 6, and 7 are effective for sales made after June 30, 1984,
and also apply to purchases of capital equipment and special
tooling made after May 1, 1984, but not placed in service until
after June 30, 1984.
ARTICLE 7
TACONITE
Section 1. Minnesota Statutes 1983 Supplement, section
273.13, subdivision 6, is amended to read:
Subd. 6. [CLASS 3B.] Agricultural land, except as provided
by class 1 hereof, and which is used for the purposes of a
homestead shall constitute class 3b and shall be valued and
assessed as follows: the first $60,000 of market value shall be
valued and assessed at 14 percent; the remaining market value
shall be valued and assessed at 19 percent. The maximum amount
of the market value of the homestead bracket subject to the 14
percent rate shall be adjusted by the commissioner of revenue as
provided in section 273.1311. The property tax to be paid on
class 3b property as otherwise determined by law less any
reduction received pursuant to sections 124.2137, 273.123,
273.135, and 473H.10 shall be reduced by 54 percent of the tax;
provided that the amount of the reduction shall not exceed $650.
Noncontiguous land shall constitute class 3b only if the
homestead is classified as class 3b and the detached land is
located in the same township or city or not farther than two
townships or cities or combination thereof from the homestead.
The first $12,000 market value of each tract of real estate
which is rural in character and devoted or adaptable to rural
but not necessarily agricultural use, used for the purpose of a
homestead shall be exempt from taxation for state purposes;
except as specifically provided otherwise by law.
Agricultural land as used herein, and in section 124.2137,
shall mean contiguous acreage of ten acres or more, primarily
used during the preceding year for agricultural purposes.
Agricultural use may include pasture, timber, waste, unusable
wild land and land included in federal farm programs.
Real estate of less than ten acres used principally for
raising poultry, livestock, fruit, vegetables or other
agricultural products, shall be considered as agricultural land,
if it is not used primarily for residential purposes.
The assessor shall determine and list separately on his
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.
Sec. 2. Minnesota Statutes 1983 Supplement, section
273.13, subdivision 7, is amended to read:
Subd. 7. [CLASS 3C, 3CC.] All other real estate and class
2a property, except as provided by classes 1 and 3cc, which is
used for the purposes of a homestead, shall constitute class 3c,
and shall be valued and assessed as follows: the first $30,000
of market value shall be valued and assessed at 17 percent; the
next $30,000 of market value shall be valued and assessed at 19
percent; and the remaining market value shall be valued and
assessed at 30 percent. The maximum amounts of the market value
of the homestead brackets subject to the 17 percent and 19
percent rates shall be adjusted by the commissioner of revenue
as provided in section 273.1311. The property tax to be paid on
class 3c property as otherwise determined by law, less any
reduction received pursuant to sections 273.123, 273.135, and
473H.10 shall be reduced by 54 percent of the tax imposed on the
first $67,000 of market value; provided that the amount of the
reduction shall not exceed $650. The first $12,000 market value
of each tract of such real estate used for the purposes of a
homestead shall be exempt from taxation for state purposes;
except as specifically provided otherwise by law.
Class 3cc property shall include real estate or
manufactured homes used for the purposes of a homestead by (a)
any blind person, if the blind person is the owner thereof or if
the blind person and his or her spouse are the sole owners
thereof; or (b) any person (hereinafter referred to as veteran)
who: (1) served in the active military or naval service of the
United States and (2) 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 (3) with assistance by the administration of
veterans affairs 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 his or her homestead; or (c) any
person who: (1) is permanently and totally disabled and (2)
receives 90 percent or more of his total income from (i) aid
from any state as a result of that disability, or (ii)
supplemental security income for the disabled, or (iii) workers'
compensation based on a finding of total and permanent
disability, or (iv) 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 (v) aid under the Federal Railroad Retirement Act
of 1937, 45 United States Code Annotated, Section 228b(a)5, or
(vi) a pension from any local government retirement fund located
in the state of Minnesota as a result of that disability.
Property shall be classified and assessed as class 3cc only if
the commissioner of revenue certifies to the assessor that the
owner of the property satisfies the requirements of this
subdivision. Class 3cc property shall be valued and assessed as
follows: in the case of agricultural land, including a
manufactured home, used for a homestead, the first $30,000 of
market value shall be valued and assessed at five percent, the
next $30,000 of market value shall be valued and assessed at 14
percent, and the remaining market value shall be valued and
assessed at 19 percent; and in the case of all other real estate
and manufactured homes, the first $30,000 of market value shall
be valued and assessed at five percent, the next $30,000 of
market value shall be valued and assessed at 19 percent, and the
remaining market value shall be valued and assessed at 30
percent. In the case of agricultural land including a
manufactured home used for purposes of a homestead, the
commissioner of revenue shall adjust, as provided in section
273.1311, the maximum amount of the market value of the
homestead brackets subject to the five percent and 14 percent
rates; and for all other real estate and manufactured homes, the
commissioner of revenue shall adjust, as provided in section
273.1311, the maximum amount of the market value of the
homestead brackets subject to the five percent and 19 percent
rates. 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 him an income. The property tax to be paid on
class 3cc property as otherwise determined by law, less any
reduction received pursuant to section 273.135 shall be reduced
by 54 percent of the tax imposed on the first $67,000 of market
value; provided that the amount of the reduction shall not
exceed $650.
For purposes of this subdivision, homestead property which
qualifies for the classification ratios and credits provided in
this subdivision shall include property which is used for
purposes of the homestead but is separated from the homestead by
a road, street, lot, waterway, or other similar intervening
property. The term "used for purposes of the homestead" shall
include but not be limited to uses for gardens, garages, or
other outbuildings commonly associated with a homestead, but
shall not include vacant land held primarily for future
development. In order to receive homestead treatment for the
noncontiguous property, the owner shall apply for it to the
assessor by July 1 of 1983 or the year when the treatment is
initially sought. After initial qualification for the homestead
treatment, additional applications for subsequent years are not
required.
Sec. 3. Minnesota Statutes 1982, 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 the boundaries
of a municipality which meets the qualifications prescribed in
section 273.134, 66 percent of the amount of such net tax up to
the taconite breakpoint plus a percentage equal to the homestead
credit equivalency percentage of the net tax in excess of the
taconite breakpoint, provided that the amount of said reduction
shall not exceed the maximum amount amounts specified in clause
(c).
(b) in the case of property located within the boundaries
of a school district which qualifies as a tax relief area but
which is outside the boundaries of a municipality which meets
the qualifications prescribed in section 273.134, 57 percent of
the amount of such net tax up to the taconite breakpoint plus a
percentage equal to the homestead credit equivalency percentage
of the net tax in excess of the taconite breakpoint, provided
that the amount of said reduction shall not exceed the maximum
amount amounts specified in clause (c).
(c) (1) The maximum reduction for of the net tax up to the
taconite breakpoint is $225.40 on property described in clause
(a) shall be $385 and for $200.10 on property described in
clause (b) $330, for taxes payable in 1978 1985. These maximum
amounts shall increase by $15 times the quantity one minus the
homestead credit equivalency percentage per year for taxes
payable in 1979 1986 and subsequent years.
(2) The total maximum reduction of the net tax on property
described in clause (a) is $490 for taxes payable in 1985. The
total maximum reduction for the net tax on property described in
clause (b) is $435 for taxes payable in 1985. These maximum
amounts shall increase by $15 per year for taxes payable in 1986
and thereafter.
For the purposes of this subdivision, "net tax" means the
tax on the property after deduction of any credit under section
273.13, subdivision 6, 7, or 14a, "taconite breakpoint" means
the lowest possible net tax for a homestead qualifying for the
maximum reduction pursuant to section 273.13, subdivision 7,
rounded to the nearest whole dollar, and "homestead credit
equivalency percentage" means a percentage equal to the
percentage reduction authorized in section 273.13, subdivision 7.
Sec. 4. Minnesota Statutes 1982, section 273.135,
subdivision 5, is amended to read:
Subd. 5. For the purposes of this section, the amount of
property tax to be paid shall be determined before after the
allowance of any reduction prescribed by section 273.13, and the
reduction prescribed by this section shall be in addition to
that prescribed by section 273.13.
Sec. 5. Minnesota Statutes 1982, 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 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 lies
within such county, 57 percent of the amount of the net tax up
to the taconite breakpoint plus a percentage equal to the
homestead credit equivalency percentage of the net tax in excess
of the taconite breakpoint on qualified property located in the
school district that does not meet the qualifications of section
273.134, provided that the amount of said reduction shall not
exceed the maximum amount amounts specified in clause (c). The
reduction provided by this clause 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 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, 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, 57 percent of
the amount of the net tax up to the taconite breakpoint plus a
percentage equal to the homestead credit equivalency percentage
of the net tax in excess of the taconite breakpoint, but not to
exceed the maximum maximums specified in clause (c).
(c) (1) The maximum reduction shall be $375 of the net tax
up to the taconite breakpoint is $200.10 for taxes payable in
1981 1985. These This maximum amounts amount shall increase
by $15 multiplied by the quantity one minus the homestead credit
equivalency percentage per year for taxes payable in 1982 1986
and subsequent years.
(2) The total maximum reduction of the net tax is $435 for
taxes payable in 1985. This total maximum amount shall increase
by $15 per year for taxes payable in 1986 and thereafter.
For the purposes of this subdivision, "net tax" means the
tax on the property after deduction of any credit under section
273.13, subdivision 6, 7, or 14a, "taconite breakpoint" means
the lowest possible net tax for a homestead qualifying for the
maximum reduction pursuant to section 273.13, subdivision 7,
rounded to the nearest whole dollar, and "homestead credit
equivalency percentage" means a percentage equal to the
percentage reduction authorized in section 273.13, subdivision 7.
Sec. 6. Minnesota Statutes 1982, section 273.1391,
subdivision 4, is amended to read:
Subd. 4. For the purposes of this section, the amount of
property tax to be paid shall be determined before after the
allowance of any reduction prescribed by section 273.13, and the
reduction prescribed by this section shall be in addition to
that prescribed by section 273.13.
Sec. 7. Minnesota Statutes 1983 Supplement, section
275.125, subdivision 11a, is amended to read:
Subd. 11a. [CAPITAL EXPENDITURE LEVY.] (a) Each year a
school district may levy an amount not to exceed the amount
equal to $90 per pupil unit, or $95 per pupil unit in districts
where the actual number of pupil units identified in section
124.17, subdivision 1, clauses (1) and (2), has increased from
the prior year. No levy under this clause shall exceed seven
mills times the adjusted assessed valuation of the taxable
property in the district for the preceding year.
(b) The proceeds of the tax may be used to acquire land, to
equip and re-equip buildings and permanent attached fixtures, to
rent or lease buildings for school purposes, to pay leasing fees
for computer systems hardware and related proprietary software,
and to pay leasing fees for photocopy machines and
telecommunications equipment. The proceeds of the tax may also
be used for capital improvement and repair of school sites,
buildings and permanent attached fixtures, energy assessments,
and for the payment of any special assessments levied against
the property of the district authorized pursuant to section
435.19 or any other law or charter provision authorizing
assessments against publicly owned property; provided that a
district may not levy amounts to pay assessments for service
charges, such as those described in section 429.101, whether
levied pursuant to that section or pursuant to any other law or
home rule provision. The proceeds of the tax may also be used
for capital expenditures to reduce or eliminate barriers to or
increase access to school facilities by handicapped
individuals. The proceeds of the tax may also be used to make
capital improvements to schoolhouses to be leased pursuant to
section 123.36, subdivision 10. The proceeds of the tax may
also be used to pay fees for capital outlay expenditures
assessed and certified to each participating school district by
the educational cooperative service unit board of directors.
The proceeds of the tax may also be used to pay principal and
interest on loans from the state authorized by section sections
116J.37 and 298.292 to 298.298.
(c) Subject to the commissioner's approval, the tax
proceeds may also be used to acquire or construct buildings.
The state board shall promulgate rules establishing the criteria
to be used by the commissioner in approving and disapproving
district applications requesting the use of capital expenditure
tax proceeds for the acquisition or construction of buildings.
The approval criteria for purposes of building acquisition and
construction shall include: the appropriateness of the proposal
for the district's long term needs; the availability of adequate
existing facilities; and the economic feasibility of bonding
because of the proposed building's size or cost.
(d) The board shall establish a fund in which the proceeds
of this tax shall be accumulated until expended.
(e) The proceeds of the tax shall not be used for custodial
or other maintenance services.
(f) Each year, subject to the seven mill limitation of
clause (a) of this subdivision, a school district which operates
an approved secondary vocational education program or an
approved senior secondary industrial arts program may levy an
additional amount equal to $5 per pupil unit for capital
expenditures for equipment for these programs.
(g) For purposes of computing allowable levies under this
subdivision and subdivisions 11b and 11c, pupil units shall
include those units identified in section 124.17, subdivision 1,
clauses (1) and (2), and 98.5 percent of the units identified in
Minnesota Statutes 1980, section 124.17, subdivision 1, clauses
(4) and (5) for 1980-1981.
Sec. 8. Minnesota Statutes 1983 Supplement, section
275.125, subdivision 11b, is amended to read:
Subd. 11b. [SPECIAL PURPOSE CAPITAL EXPENDITURE LEVY.] In
addition to the levy authorized in subdivision 11a, each year a
school district may levy an amount not to exceed the amount
equal to $25 per pupil unit. No levy under this clause shall
exceed two mills times the adjusted assessed valuation of the
property in the district for the preceding year. The proceeds
of the tax shall be placed in the district's capital expenditure
fund and may be used only for the following:
(a) for energy audits on district-owned buildings, and for
funding those energy conservation and renewable energy measures
which the energy audits indicate will reduce the use of
nonrenewable sources of energy to the extent that the projected
energy cost savings will amortize the cost of the conservation
measures within a period of ten years or less;
(b) for capital expenditures for the purpose of reducing or
eliminating barriers to or increasing access to school
facilities by handicapped persons;
(c) for capital expenditures to bring district facilities
into compliance with the uniform fire code adopted pursuant to
chapter 299F;
(d) for expenditures for the removal of asbestos from
school buildings or property or for asbestos encapsulation;
(e) for expenditures for the cleanup and disposal of
polychlorinated biphenyls; and
(f) to pay principal and interest on loans from the state
authorized by section sections 116J.37 and 298.292 to 298.298.
Sec. 9. Minnesota Statutes 1983 Supplement, section
275.125, subdivision 12a, is amended to read:
Subd. 12a. [ENERGY CONSERVATION LEVY.] The school district
may levy, without the approval of a majority of the voters in
the district, an amount equal to the actual costs of the energy
conservation investments for the purposes of repaying the
principal and interest of the law made pursuant to section
sections 116J.37 and 298.292 to 298.298.
Sec. 10. Minnesota Statutes 1982, section 298.01, is
amended to read:
298.01 [MINING OR PRODUCING ORES.]
Subdivision 1. Every person engaged in the business of
mining or producing iron ore or other ores in this state shall
pay to the state of Minnesota an occupation tax equal to 15.5
percent of the valuation of all ores except taconite,
semi-taconite and iron sulphides mined or produced after
December 31, 1971 and iron ores mined or produced after December
31, 1984. Said tax shall be in addition to all other taxes
provided for by law and shall be due and payable from such
person on or before June 15 of the year next succeeding the
calendar year covered by the report thereon to be filed as
hereinafter provided.
Subd. 2. Every person engaged in the business of producing
or mining taconite, semi-taconite and iron sulphides in this
state shall pay to the state an occupation tax equal to 15
percent of the valuation of all taconite, semi-taconite and iron
sulphides mined or produced after December 31, 1970 and of iron
ores mined or produced after December 31, 1984. The tax shall
be in addition to all other taxes provided for by law and shall
be due and payable from such person on or before June 15 of the
year next succeeding the calendar year covered by the report
thereon to be filed as hereinafter provided.
Sec. 11. Minnesota Statutes 1982, section 298.02,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT.] For the purpose of increasing
employment and the utilization of low-grade, underground, and
high labor cost ores any taxpayer on whom a tax is imposed by
reason of the provisions of section 298.01, subdivisions 1 and
2, shall be allowed a credit against the occupation tax as
computed in said subdivisions that section because of the mining
or production of ore from any mine, in an amount calculated as
follows:
(a) In the case of underground mines or that tonnage of
merchantable ore produced in open pit mines in the year in
question which tonnage has resulted from beneficiation at an ore
beneficiation plant within the state by jigging, heavy media,
spiral separation, cyclone process, roasting, drying by
artificial heat, sintering, magnetic separation, flotation,
agglomeration or any process requiring fine grinding or any
other iron ores mined after December 31, 1984, ten percent of
that part of the cost of labor employed by said the mine or in
the beneficiation of all ore mined or produced in said the
calendar year in excess of 70 cents and not in excess of 90
cents per ton of the merchantable ore produced during the year
at said that mine, and 15 percent of that part of the cost of
such labor in excess of 90 cents per ton; in the case of any
other tonnage produced at said mine or in the case of other
mines, ten percent of the amount by which the average cost per
ton of labor employed at said the mine, or in the beneficiation
of such the ore at or near the mine, exceeds 80 cents, but does
not exceed $1.05, plus 15 percent of the amount by which such
the average labor cost per ton exceeds $1.05, multiplied by the
number of tons of ore produced at said the mine, not exceeding
100,000 tons, but this 100,000 tons or less shall be first
reduced by any tonnage described in the first part of this
subparagraph; provided, however, that in no event shall the
credit allowed hereunder be in excess of three-fourths of eleven
percent, as applied to underground and taconite or,
semi-taconite or other iron ore operations, and six-tenths of
eleven percent as applied to all other operations, of the
valuation of the ore used in computing the tax under the
provisions of section 298.01. The expression term "merchantable
ore produced" as used herein means ores which as mined or as
mined and beneficiated, are ready for shipment as a merchantable
product. The provisions of this subparagraph (a) shall be
applicable to all ores mined or produced subsequent to December
31, 1956.
(b) The aggregate amount of all credits allowed under this
subdivision to all mines shall not exceed six and two-tenths
percent of the aggregate amount of occupation taxes imposed
under section 298.01, subdivision 1, assessed against all mines
in the state for said year prior to the deduction of such
credits, provided, that after December 31, 1954, labor credits
to underground mines or taconite or semi-taconite operations
shall not be subject to such percentage limitation and that,
after December 31, 1984, labor credits to other iron ore
operations shall not be subject to the percentage limitation and
both the occupation taxes of such underground mines or taconite
or, semi-taconite or other iron ore operations and the labor
credits allowed thereto, shall be excluded in calculating such
percentage limitations. At the time of his final determination
of occupation tax pursuant to section 298.09, subdivision 3, the
commissioner shall reduce the credit otherwise allowable to each
mine hereunder by such equal percentage as will bring the total
within such limitation. If an equal percentage reduction is
made in the labor credits of mines pursuant to this subparagraph
at the time of certification to the commissioner of finance
revenue as set forth in section 298.10, the same percentage will
be used where changes are made pursuant to section 298.09,
subdivision 4, subsequent to June 1. Also if no reduction is
made at the time of certification to by the commissioner of
finance revenue on or before June 1, pursuant to this
subdivision and section 298.10, no reduction will be made
subsequent to June 1, due to changes made pursuant to section
298.09, subdivision 4. This subparagraph shall apply to
occupation tax calculations in calendar years subsequent to
December 31, 1952.
Sec. 12. Minnesota Statutes 1982, section 298.031,
subdivision 2, is amended to read:
Subd. 2. [VALUE OF CERTAIN ORE; HOW ASCERTAINED.] (1) The
taxpayer shall be given a credit in each taxable year upon the
occupation tax assessed in such year under Minnesota Statutes
1957, Chapter 298, against a given mine after credit for labor
credits has been given, in an amount equal to the occupation tax
under said chapter 298 upon an amount produced by multiplying
the number of tons of ore sold at a discount by the amount of
such discount.
(2) The aggregate amount of all credits allowed under this
section to all mines shall not exceed one percent of the
aggregate amount of all occupation taxes imposed under section
298.01, subdivision 1, assessed against all mines in the state
for said year prior to the deduction of the credit allowed by
this section.
(3) The amount of the foregoing subtraction shall be
ascertained and determined by the commissioner.
(4) If ore stockpiled from previous years operations is
sold at a discount, the discount credit shall be allowed against
all ore currently being produced by the same company to the
extent that the discount credit is available. Any unused credit
may be carried forward and utilized with future years production
of ore from the stockpiled property or other properties operated
by the same company.
Sec. 13. Minnesota Statutes 1982, section 298.225, is
amended to read:
298.225 [APPROPRIATION.]
If a taconite producer ceases beneficiation operations,
either temporarily or permanently, and if For distribution of
taconite production tax in 1985 and thereafter with respect to
production in 1984 and thereafter, the recipients of the
taconite production tax as provided in section 298.28,
subdivision 1, clauses (1) to (4) and (5)(b) to, (7),
and (8)(a), would shall receive decreased distributions as a
result thereof, then the distribution to these recipients in
each of the two years immediately following the year in which
operations ceased shall be equal to the amount they received in
the last full year before operations ceased distributions equal
to the amount distributed to them pursuant to sections 298.225
and 298.28, subdivision 1, with respect to 1983 production if
the production for the year prior to the distribution year is no
less than 42,000,000 taxable tons. If the production is less
than 42,000,000 taxable tons, the amount of the distributions
shall be reduced by two percent for each 1,000,000 tons, or part
of 1,000,000 tons by which the production is less than
42,000,000 tons. There is hereby appropriated to the
commissioner of revenue from the taconite environmental
protection fund and the corpus of the northeast Minnesota
economic protection trust fund in equal proportions the amount
needed to make the above payments.
If a taconite producer ceases beneficiation operations
permanently and is required by a special law to make bond
payments for a school district, the northeast Minnesota economic
protection trust fund shall assume the payments of the taconite
producer if the producer ceases to make the needed payments.
There is hereby appropriated from the corpus of the northeast
Minnesota economic protection trust fund to the commissioner of
revenue the amounts needed to make these school bond payments.
Sec. 14. Minnesota Statutes 1982, section 298.24,
subdivision 1, is amended to read:
Subdivision 1. (a) There is hereby imposed upon taconite
and iron sulphides, and upon the mining and quarrying thereof,
and upon the production of iron ore concentrate therefrom, and
upon the concentrate so produced, a tax of $1.25 cents per gross
ton of merchantable iron ore concentrate produced therefrom.
The tax on concentrates produced in 1978 and subsequent years
prior to 1985 shall be equal to $1.25 multiplied by the steel
mill products index during the production year, divided by the
steel mill products index in 1977. The index stated in code
number 1013, or any subsequent equivalent, as published by the
United States Department of Labor, Bureau of Labor Statistics
Wholesale Prices and Price Indexes for the month of January of
the year in which the concentrate is produced shall be the index
used in calculating the tax imposed herein. In no event shall
the tax be less than $1.25 per gross ton of merchantable iron
ore concentrate. The tax on concentrates produced in 1985 and
1986 shall be at the rate determined for 1984 production. For
concentrates produced in 1987 and subsequent years, the tax
shall be equal to the preceding year's tax plus an amount equal
to the preceding year's tax multiplied by the percentage
increase in the implicit price deflator from the fourth quarter
of the second preceding year to the fourth quarter of the
preceding year. "Implicit price deflator" means the implicit
price deflator prepared by the bureau of economic analysis of
the United States department of commerce.
(b) On concentrates produced in 1984, an additional tax is
hereby imposed equal to 1.6 eight-tenths of one percent of the
total tax imposed by clause (a) per gross ton for each one
percent that the iron content of such product exceeds 62
percent, when dried at 212 degrees Fahrenheit.
(c) The tax imposed by this subdivision on concentrates
produced in 1984 shall be computed on the production for the
current year or. The tax on concentrates produced in 1985 shall
be computed on the average of the production for the current
year and the previous year. The tax on concentrates produced in
1986 and thereafter shall be the average of the production for
the current year and the previous two years, whichever is
higher. This clause shall not apply in the case of the closing
of a taconite facility if the property taxes on the facility
would be higher if this clause and section 298.25 were not
applicable.
(d) If the tax or any part of the tax imposed by this
subdivision is held to be unconstitutional, a tax of $1.25 per
gross ton of merchantable iron ore concentrate produced shall be
imposed.
Sec. 15. Minnesota Statutes 1982, section 298.24, is
amended by adding a subdivision to read:
Subd. 4. A credit shall be allowed against the tax imposed
by subdivision 1, in the amount of $250,000 per year to any
taconite producer that builds a water filtration and treatment
plant in 1984 at a cost in excess of $1,000,000 in order to
alleviate the contamination of water resulting from the disposal
of taconite tailings on land. This credit shall be available
against taxes paid in 1985, 1986, and 1987. The amount
sufficient to pay these credits is appropriated from the
taconite environmental protection fund created in section
298.223 to the commissioner of revenue.
Sec. 16. Minnesota Statutes 1983 Supplement, section
298.28, subdivision 1, is amended to read:
Subdivision 1. [DISTRIBUTION FROM GENERAL FUND.] The
proceeds of the taxes collected under section 298.24, except the
tax collected under section 298.24, subdivision 2, shall, upon
certificate of the commissioner of revenue to the general fund
of the state, be paid by the commissioner of revenue as follows:
(1) 2.5 cents per gross ton of merchantable iron ore
concentrate, hereinafter referred to as "taxable ton," to the
city or town in which the lands from which taconite was mined or
quarried were located or within which the concentrate was
produced. If the mining, quarrying, and concentration, or
different steps in either thereof are carried on in more than
one taxing district, the commissioner shall apportion equitably
the proceeds of the part of the tax going to cities and towns
among such subdivisions upon the basis of attributing 40 percent
of the proceeds of the tax to the operation of mining or
quarrying the taconite, and the remainder to the concentrating
plant and to the processes of concentration, and with respect to
each thereof giving due consideration to the relative extent of
such operations performed in each such taxing district. His
order making such apportionment shall be subject to review by
the tax court at the instance of any of the interested taxing
districts, in the same manner as other orders of the
commissioner.
(2) 12.5 cents per taxable ton, less any amount distributed
under clause (8), to the taconite municipal aid account in the
apportionment fund of the state treasury, to be distributed as
provided in section 298.282.
(3) 29 cents per taxable ton plus the increase provided in
paragraph (c) to qualifying school districts to be distributed
as follows:
(a) Six cents per taxable ton 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
commissioner shall follow the apportionment formula prescribed
in clause (1).
(b) 23 cents per taxable ton, less any amount distributed
under part (d), shall be distributed to a group of school
districts comprised of those school districts wherein the
taconite was mined or quarried or the concentrate produced or in
which there is a qualifying municipality as defined by section
273.134 in direct proportion to school district tax levies as
follows: each district shall receive that portion of the total
distribution which its certified levy for the prior year,
computed pursuant to section 275.125, comprises of the sum of
certified levies for the prior year for all qualifying
districts, computed pursuant to section 275.125. For purposes
of distributions pursuant to this part, certified levies for the
prior year computed pursuant to section 275.125 shall not
include the amount of any increased levy authorized by
referendum pursuant to section 275.125, subdivision 2d.
(c) On July 15, 1982 and on July 15 in subsequent years in
years prior to 1988, an amount equal to the increase derived by
increasing the amount determined by clause (3)(b) in the same
proportion as the increase in the steel mill products index over
the base year of 1977 as provided in section 298.24, subdivision
1, clause (a), shall be distributed to any school district
described in clause (3)(b) where a levy increase pursuant to
section 275.125, subdivision 2d, is authorized by referendum,
according to the following formula. On July 15, 1988 and
subsequent years, 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, paragraph (a). Each district shall receive the
product of:
(i) $150 times the pupil units identified in section
124.17, subdivision 1, clauses (1) and (2), enrolled in the
previous school year, less the product of two mills times the
district's taxable valuation in the second previous year; times
(ii) the lesser of:
(A) one, or
(B) the ratio of the amount certified pursuant to section
275.125, subdivision 2d, in the previous year, to the product of
two mills times the district's taxable valuation in the second
previous year.
If the total amount provided by clause (3)(c) is
insufficient to make the payments herein required then the
entitlement of $150 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 clause
(3)(c) shall not be applied to reduce foundation aids which the
district is entitled to receive pursuant to sections 124.2121 to
124.2128 or the permissible levies of the district. Any amount
remaining after the payments provided in this paragraph shall be
paid to the commissioner of finance who shall deposit the same
in the taconite environmental protection fund and the northeast
Minnesota economic protection trust fund as provided in section
298.28, subdivision 1, clause 10.
(d) There shall be distributed to any school district the
amount which the school district was entitled to receive under
section 298.32 in 1975.
(4) 19.5 cents per taxable ton to counties to be
distributed as follows:
(a) 15.5 cents per taxable ton shall be distributed to the
county in which the taconite is mined or quarried or in which
the concentrate is produced, less any amount which is to be
distributed pursuant to part (b). The commissioner shall follow
the apportionment formula prescribed in clause (1).
(b) If an electric power plant owned by and providing the
primary source of power for a taxpayer mining and concentrating
taconite is located in a county other than the county in which
the mining and the concentrating processes are conducted, one
cent per taxable ton of the tax distributed to the counties
pursuant to part (a) and imposed on and collected from such
taxpayer shall be distributed by the commissioner of revenue to
the county in which the power plant is located.
(c) Four cents per taxable ton shall be paid to the county
from which the taconite was mined, quarried or concentrated to
be deposited in the county road and bridge fund. If the mining,
quarrying and concentrating, or separate steps in any of those
processes are carried on in more than one county, the
commissioner shall follow the apportionment formula prescribed
in clause (1).
(5) (a) 25.75 17.75 cents per taxable ton, less any amount
required to be distributed under part (b), to the taconite
property tax relief account in the apportionment fund in the
state treasury, to be distributed as provided in sections
273.134 to 273.136.
(b) If an electric power plant owned by and providing the
primary source of power for a taxpayer mining and concentrating
taconite is located in a county other than the county in which
the mining and the concentrating processes are conducted, .75
cent per taxable ton of the tax imposed and collected from such
taxpayer shall be distributed by the commissioner of revenue to
the county and school district in which the power plant is
located as follows: 25 percent to the county and 75 percent to
the school district.
(6) One cent per taxable ton to the state for the cost of
administering the tax imposed by section 298.24.
(7) Three cents per taxable ton shall be deposited in the
state treasury to the credit of the iron range resources and
rehabilitation board account in the special revenue fund for the
purposes of section 298.22. The amount determined in this
clause shall be increased in 1981 and subsequent years prior to
1988 in the same proportion as the increase in the steel mill
products index as provided in section 298.24, subdivision 1 and
shall be increased in 1988 and subsequent years according to the
increase in the implicit price deflator as provided in section
298.24, subdivision 1. The amount distributed pursuant to this
clause shall be expended within or for the benefit of a tax
relief area defined in section 273.134. No part of the fund
provided in this clause may be used to provide loans for the
operation of private business unless the loan is approved by the
governor and the legislative advisory commission.
(8) (a) .20 cent per taxable ton shall be paid in 1979 and
each year thereafter, to the range association of municipalities
and schools, for the purpose of providing an area wide approach
to problems which demand coordinated and cooperative actions and
which are common to those areas of northeast Minnesota affected
by operations involved in mining iron ore and taconite and
producing concentrate therefrom, and for the purpose of
promoting the general welfare and economic development of the
cities, towns and school districts within the iron range area of
northeast Minnesota.
(b) 1.5 cents per taxable ton shall be paid to the
northeast Minnesota economic protection trust fund.
(9) the amounts determined under clauses (4)(a), (4)(c),
and (5), and (8)(b) shall be increased in 1979 and subsequent
years prior to 1988 in the same proportion as the increase in
the steel mill products index as provided in section 298.24,
subdivision 1. Those amounts shall be increased in 1988 and
subsequent years in the same proportion as the increase in the
implicit price deflator as provided in section 298.24,
subdivision 1.
(10) the proceeds of the tax imposed by section 298.24
which remain after the distributions in clauses (1) to (9) and
parts (a) and (b) of this clause have been made shall be divided
between the taconite environmental protection fund created in
section 298.223 and the northeast Minnesota economic protection
trust fund created in section 298.292 as follows: In 1981 and
each year thereafter, Two-thirds to the taconite environmental
protection fund and one-third to the northeast Minnesota
economic protection trust fund. The proceeds shall be placed in
the respective special accounts in the general fund.
(a) In 1978 and each year thereafter, There shall be
distributed to each city, town, school district, and county the
amount that they received under section 294.26 in calendar year
1977; provided, however, that the amount distributed in 1981 to
the unorganized territory number 2 of Lake County and the town
of Beaver Bay based on the between-terminal trackage of Erie
Mining Company will be distributed in 1982 and subsequent years
to the unorganized territory number 2 of Lake County and the
towns of Beaver Bay and Stony River based on the miles of track
of Erie Mining Company in each taxing district.
(b) In 1978 and each year thereafter, There shall be
distributed to the iron range resources and rehabilitation board
the amounts it received in 1977 under section 298.22.
On or before October 10 of each calendar year each producer
of taconite or iron sulphides subject to taxation under section
298.24 (hereinafter called "taxpayer") shall file with the
commissioner of revenue and with the county auditor of each
county in which such taxpayer operates, and with the chief
clerical officer of each school district, city or town which is
entitled to participate in the distribution of the tax, an
estimate of the amount of tax which would be payable by such
taxpayer under said law for such calendar year; provided such
estimate shall be in an amount not less than the amount due on
the mining and production of concentrates up to September 30 of
said year plus the amount becoming due because of probable
production between September 30 and December 31 of said year,
less any credit allowable as hereinafter provided. Such
estimate shall list the taxing districts entitled to participate
in the distribution of such tax, and the amount of the estimated
tax which would be distributable to each such district in the
next ensuing calendar year on the basis of the last percentage
distribution certified by the commissioner of revenue. If there
be no such prior certification, the taxpayer shall set forth its
estimate of the proper distribution of such tax under the law,
which estimate may be corrected by the commissioner if he deems
it improper, notice of such correction being given by him to the
taxpayer and the public officers receiving such estimate. The
officers with whom such report is so filed shall use the amount
so indicated as being distributable to each taxing district in
computing the permissible tax levy of such county, city or
school district in the year in which such estimate is made, and
payable in the next ensuing calendar year, except that in 1978
and 1979 two cents per taxable ton, and in 1980 and thereafter,
one cent per taxable ton of the amount distributed under clause
(4)(c) shall not be deducted in calculating the permissible
levy. Such taxpayer shall then pay, at the times payments are
required to be made pursuant to section 298.27, as the amount of
tax payable under section 298.24, the greater of (a) the amount
shown by such estimate, or (b) the amount due under said section
as finally determined by the commissioner of revenue pursuant to
law. If, as a result of the payment of the amount of such
estimate, the taxpayer has paid in any calendar year an amount
of tax in excess of the amount due in such year under section
298.24, after application of credits for any excess payments
made in previous years, all as determined by the commissioner of
revenue, the taxpayer shall be given credit for such excess
amount against any taxes which, under said section, may become
due from the taxpayer in subsequent years. In any calendar year
in which a general property tax levy subject to sections 275.125
or 275.50 to 275.59 has been made, if the taxes distributable to
any such county, city or school district are greater than the
amount estimated to be paid to any such county, city or school
district in such year, the excess of such distribution shall be
held in a special fund by the county, city or school district
and shall not be expended until the succeeding calendar year,
and shall be included in computing the permissible levies under
sections 275.125 or 275.50 to 275.59, of such county, city or
school district payable in such year. If the amounts
distributable to any such county, city or school district, after
final determination by the commissioner of revenue under this
section are less than the amounts indicated by such estimates,
such county, city or school district may issue certificates of
indebtedness in the amount of the shortage, and may include in
its next tax levy, in excess of the limitations of sections
275.125 or 275.50 to 275.59 an amount sufficient to pay such
certificates of indebtedness and interest thereon, or, if no
certificates were issued, an amount equal to such shortage.
There is hereby annually appropriated to such taxing
districts as are stated herein, to the taconite property tax
relief account and to the taconite municipal aid account in the
apportionment fund in the state treasury, to the department of
revenue, to the iron range resources and rehabilitation board,
to the range association of municipalities and schools, to the
taconite environmental protection fund, and to the northeast
Minnesota economic protection trust fund, from any fund or
account in the state treasury to which the money was credited,
an amount sufficient to make the payment or transfer. The
payment of the amount appropriated to such taxing districts
shall be made by the commissioner of revenue on or before May 15
annually.
Sec. 17. Minnesota Statutes 1982, section 298.40, is
amended by adding a subdivision to read:
Subd. 4. There is appropriated, effective July 1, 1985, to
the commissioner of revenue from the general fund an amount
equal to any credits due as a result of a recomputation of
occupation taxes for production year 1977 and previous years
based on the limitations prescribed in section 298.40,
subdivision 1, and established by the commissioner as an account
payable on or before March 25, 1984. The commissioner shall
refund to the taxpayers the amount of overpayment plus six
percent interest per annum from the date of the overpayment.
Sec. 18. Minnesota Statutes 1982, section 299.012,
subdivision 1, is amended to read:
Subdivision 1. For the purpose of increasing the
utilization of low grade, underground, and high labor cost ores
and taconites, the royalty tax levied by virtue of section
299.01, subdivisions 1 and 2, on royalty received because of the
production of ores in any calendar year from land forming part
of any mine which was in production during said year, shall be
reduced by a credit in an amount which will make the net
effective tax rate thereon equal to the net effective rate of
the occupation tax imposed pursuant to section 298.01, because
of the production of ores during such calendar year from the
mine of which such land forms a part, after the application of
the credits against such occupation tax allowed under section
298.02; provided, if such mine produced ore in such calendar
year, but the ore produced had no valuation for occupation tax
purposes because of the allowable deductions equaling or
exceeding the value of the ore produced, the credit allowed
hereunder shall be three-fourths of eleven percent, as applied
to underground, taconite, and semi-taconite and other iron ore
operations, and six-tenths of eleven percent as applied to all
other operations, of the royalty received. Any person making
payments of royalty taxes in advance of the final determination
of such taxes, may assume for the purposes of section 299.08,
that the net rate of the tax for the calendar year in question
shall be the last full year's net effective occupation tax rate
known at the time of the first payment of royalty tax during the
current calendar year.
Sec. 19. Laws 1982, Second Special Session, chapter 2,
section 12, as amended by Laws 1983, chapter 5, section 1, is
amended to read:
Sec. 12. [DISTRESSED AREA EMERGENCY JOBS AND RETRAINING
PROGRAM.]
Subdivision 1. [APPROPRIATION.] Notwithstanding the
provisions of Minnesota Statutes, sections 298.293 or 298.294,
or any other law, there is appropriated to the commissioner of
iron range resources and rehabilitation from the net interest,
dividends, and other earnings of the northeast Minnesota
economic protection trust fund the sum of $2,500,000. This
money shall be expended by the commissioner upon recommendation
of the iron range resources and rehabilitation board for the
creation of emergency jobs through public works projects
submitted to the commissioner by cities, towns, and school
districts that are tax relief areas as defined in Minnesota
Statutes, section 273.134, by counties in which a tax relief
area is located, or by state or federal agencies and for payment
of training allowances to individuals who meet the
qualifications established pursuant to subdivision 2 while they
are participating in an employment retraining program. The
money shall be expended only for projects or with respect to
employment retraining programs located within a tax relief
area. The projects shall be beneficial to the city, town,
school district, county, or the state and may include permanent
improvements or maintenance of public property, residential
weatherization programs, landscaping of public grounds or parks,
planting or trimming trees, improving open space areas,
playgrounds, and recreational facilities owned or operated by
the sponsoring unit of government, mineland reclamation and
reforestation. The sponsoring unit of government shall provide
the administration, supervision, and supplies and materials for
its project. All money appropriated for the projects under this
section and section 14 shall be expended for wages and benefits
and the cost of workers' compensation insurance for workers who
qualify for employment pursuant to subdivision 2 and who are
employed or who are being paid while participating in an
employment retraining program pursuant to this act except that
an amount not to exceed 3.5 percent of the amount expended under
this section and section 14 shall be available to reimburse the
department of economic security and iron range resources and
rehabilitation board for its actual cost of administering this
program. The appropriation under this section shall not lapse
but shall remain available until entirely disbursed the day
following final enactment of this act. Any funds which are
unexpended on the day following final enactment of this act are
transferred and deposited in the special revenue fund
established at section 298.28, subdivision 1, clause (7), for
the purposes of section 298.22.
Subd. 2. [QUALIFICATIONS FOR EMPLOYMENT.] The
appropriations made under this section and section 14 shall be
used only to employ needy unemployed persons who meet the
qualifications which shall be established by the commissioner of
iron range resources and rehabilitation and the commissioner of
economic security. The criteria for employment may be
established without compliance with any law or statutory
provision relating to the promulgation of rules by departments,
agencies or instrumentalities of the state.
Sec. 20. Laws 1982, Second Special Session, chapter 2,
section 14, as amended by Laws 1983, chapters 5, section 2, and
46, section 7, is amended to read:
Sec. 14. [SUPPLEMENTAL APPROPRIATION.]
Notwithstanding the provisions of Minnesota Statutes,
sections 298.293 or 298.294, or any other law there is
appropriated to the iron range resources and rehabilitation
board from the net interest, dividends, and other earnings of
the northeast Minnesota economic protection trust fund the sum
of $5,000,000 for the purpose of continuing the emergency public
works job and retraining program established in section 12.
Expenditure of this money, or any portion thereof, is contingent
upon approval by a majority of the members of the iron range
resources and rehabilitation board. The determination of the
board that money may be expended from this appropriation shall
be approved by the governor prior to the expenditure of any
money under this section, and the legislative advisory
commission shall make a recommendation on the expenditure. The
appropriation under this section shall not lapse but shall
remain available until entirely disbursed the day following
final enactment of this act. Any funds which are unexpended on
the day following final enactment of this act are transferred
and deposited in the special revenue fund established at section
298.28, subdivision 1, clause (7), for the purposes of section
298.22.
Sec. 21. [REFUNDS FROM PRODUCTION TAX CASE.]
Any refunds due to taconite producers under the decision of
the Minnesota Supreme Court in Erie Mining Co. v. Commissioner
of Revenue, filed January 6, 1984, shall be credited against the
production tax liability of each company in five equal annual
installments. The refunds shall be credited against the
distributions to the funds and accounts that received excessive
distributions pursuant to Minnesota Statutes, section 298.28,
subdivision 1, as a result of the improper computation of the
tax that was rectified in that decision.
Sec. 22. [EFFECTIVE DATE.]
Subdivision 1. Sections 1 to 6 are effective for taxes
levied in 1984, payable in 1985, and thereafter. Sections 7 to
9 and 12 are effective the day following final enactment.
Sections 10, 11, and 18 are effective for ores produced after
December 31, 1984. Except as otherwise provided, section 14 is
effective for concentrates produced in 1984 and thereafter.
Section 16 is effective for distributions in 1985 and
thereafter. Sections 19 and 20 are effective the day after
final enactment.
Subd. 2. Section 14 shall not become effective unless the
commissioner of revenue and all taconite producers with pending
taconite production tax litigation execute an agreement to
suspend the prosecution of currently pending taconite production
tax litigation under terms and conditions satisfactory to the
commissioner and the taconite producers before the governor
approves this act.
ARTICLE 8
TAX AMNESTY
Section 1. [TAX AMNESTY.]
The commissioner of revenue shall establish a tax amnesty
program. The amnesty program applies to taxes payable to the
commissioner other than taxes collected by the commissioner on
behalf of the cities of Minneapolis and Rochester and the
metropolitan sports facilities commission and is only available
to a taxpayer who either has an unpaid liability on the
department of revenue's accounts receivable system as of
February 1, 1984, or who has failed to file a return which, if
filed on February 1, 1984, would be considered a delinquent
return subject to penalty by law. For a taxpayer who has an
existing liability as of February 1, 1984, the commissioner
shall accept as full payment of the account a certified check,
cashier's check, or money order in the amount of 80 percent of
the balance due on February 1, 1984, plus any interest accruing
on that account since February 1, 1984, plus any additional
liabilities including tax, penalty, and interest established by
the commissioner after February 1, 1984. All payments credited
to a taxpayer's account after February 1, 1984, but prior to the
taxpayer's application for amnesty, shall reduce the February 1
balance prior to computation of the 80 percent requirement. In
no case may the reduction exceed $2,000. Tax amnesty is not
available to any taxpayer who has an account which includes a
civil fraud penalty imposed by the commissioner. The amount of
a penalty imposed pursuant to section 290.92, subdivision 15,
clause (9), shall be deducted from the balance due before
application of the 20 percent reduction. Payment must be
received by the commissioner on or after August 1, 1984, but
before November 1, 1984. For purposes of this section,
"received" means actual receipt by the commissioner either at
the St. Paul office or at any field office of the department of
revenue on or before the final date allowed for payment under
this program.
In the case of a taxpayer who has failed to file returns
which if filed on February 1, 1984, would be considered
delinquent returns, the commissioner shall accept the delinquent
returns along with payment of all tax and interest if payment is
made by certified check, cashier's check, or money order and
received by the commissioner on or after August 1, 1984, but
before November 1, 1984. For delinquent returns filed pursuant
to this program, the civil and criminal penalties imposed by law
are waived unless the commissioner later finds that the tax as
shown on any return was understated by 25 percent or more. In
that case the civil and criminal penalties are reinstated, and
the commissioner shall collect the civil penalties and may
pursue the criminal penalties.
There will not be another tax amnesty before October 1,
1994.
Sec. 2. [270.72] [TAX CLEARANCE; ISSUANCE OF LICENSES.]
Subdivision 1. [TAX CLEARANCE REQUIRED.] The state or a
political subdivision of the state may not issue or renew a
license for the conduct of a profession, trade, or business, if
the commissioner notifies the licensing authority that the
applicant owes the state delinquent taxes, penalties, or
interest. The commissioner may not notify the licensing
authority unless the applicant taxpayer owes $1,000 or more in
delinquent taxes. A licensing authority that has received a
notice from the commissioner may issue or renew the applicant's
license only if (a) the commissioner issues a tax clearance
certificate and (b) the commissioner or the applicant forwards a
copy of the clearance to the authority. The commissioner may
issue a clearance certificate only if the applicant does not owe
the state any uncontested delinquent taxes, penalties, or
interest.
Subd. 2. [DEFINITIONS.] For purposes of this section, the
following terms have the meanings given.
(a) "Taxes" are limited to withholding tax as provided in
section 290.92, sales and use tax as provided in chapter 297A,
and motor vehicle excise tax as provided in chapter 297B.
Penalties and interest are limited to penalties and interest due
on taxes included in this definition.
(b) "Delinquent taxes" do not include a tax liability if
(i) an administrative or court action which contests the amount
or validity of the liability has been filed or served, (ii) the
appeal period to contest the tax liability has not expired, or
(iii) the applicant has entered into a payment agreement and is
current with the payments.
(c) "Applicant" means an individual if the license is
issued to or in the name of an individual or the corporation or
partnership if the license is issued to or in the name of a
corporation or partnership.
Subd. 3. [NOTICE AND HEARING.] If the commissioner
notifies a licensing authority pursuant to subdivision 1, he
must send a copy of the notice to the applicant. In the case of
the renewal of a license if the applicant requests, in writing,
within 30 days of the receipt of the notice a hearing, a
contested case hearing must be held. The hearing must be held
within 45 days of the date the commissioner refers the case to
the office of administrative hearings. The hearing must be held
under the procedures provided by section 270A.09 and the
administrative rules promulgated under chapter 270A.
Subd. 4. [LICENSING AUTHORITY; DUTIES.] All licensing
authorities must require the applicant to provide his social
security number and Minnesota business identification number on
all license applications. Upon request of the commissioner, the
licensing authority must provide the commissioner with a list of
all applicants, including the name, address, business name and
address, social security number, and business identification
number of each applicant. The commissioner may request from a
licensing authority a list of the applicants no more than once
each calendar year.
Subd. 5. [REPEALER.] This section is repealed effective
December 1, 1986.
ARTICLE 9
RAILROADS
Section 1. Minnesota Statutes 1982, section 270.80,
subdivision 4, is amended to read:
Subd. 4. "Nonoperating property" means and includes all
property other than property defined in subdivision 3.
Nonoperating property shall include real property which is
leased or rented or available for lease or rent to any person
which is not a railroad company. Vacant land shall be presumed
to be available for lease or rent if it has not been used as
operating property for a period of one year preceding the
valuation date. Nonoperating property also includes land which
is not necessary and integral to the performance of railroad
transportation services and which is not used on a regular and
continual basis in the performance of these services.
Nonoperating property also includes that portion of a general
corporation office building and its proportionate share of land
which is not used for railway operation or purpose.
Sec. 2. Minnesota Statutes 1982, section 270.84,
subdivision 1, is amended to read:
Subdivision 1. The commissioner shall annually between
April 30 and July 31 make a determination of the fair market
value of the operating property of every railroad company doing
business in this state as of January 2 of the year in which the
valuation is made. In determining the fair market value of the
portion of operating property within this state, the
commissioner shall value the operating property as a unit,
taking into consideration the value of the operating property of
the entire system, and shall allocate to this state that part
thereof which is a fair and reasonable proportion of said entire
system valuation. If the commissioner uses original cost as a
factor in determining the unit value of operating property, no
depreciation or obsolescence allowance shall be permitted.
However, if the commissioner uses replacement cost as a factor
in determining the unit value of operating property, then a
reasonable depreciation and obsolescence allowance may be used
In making this determination, the commissioner shall employ
generally accepted appraisal principles and practices which may
include the unit method of determining value. The commissioner
may promulgate temporary rules adopting valuation procedures
under sections 14.29 to 14.36.
The commissioner shall give a report to the legislature in
February 1980 1985 and in February 1981 1986 on the formula
which he has used to determine the unit value of railroad
operating property pursuant to Laws 1979, Chapter 303 this
article. This report shall also contain the valuation for
payable 1980 1985 and 1981 1986 by company and the taxes payable
in 1980 1985 and 1981 1986 by company based upon the valuation
of operating property. The legislature may review the formula,
the valuation, and the resulting taxes and may make changes in
the formula that it deems necessary.
Sec. 3. Minnesota Statutes 1982, section 270.86, is
amended to read:
270.86 [APPORTIONMENT AND EQUALIZATION OF VALUATION.]
Subdivision 1. [APPORTIONMENT OF VALUE.] Upon
determination by the commissioner of the fair market value of
the operating property of each railroad company, he shall
apportion such value to the respective counties and to the
taxing districts therein in conformity with fair and reasonable
rules and standards to be established by the commissioner
pursuant to notice and hearing, except as provided in section
270.81. In establishing such rules and standards the
commissioner may consider (a) the physical situs of all station
houses, depots, docks, wharves, and other buildings and
structures with an original cost in excess of $10,000; (b) the
proportion that the length and type of all the tracks used by
the railroad in such county and taxing district bears to the
length and type of all the track used in the state; and (c)
other facts as will result in a fair and equitable apportionment
of value.
Subd. 2. [EQUALIZED VALUATION.] After making the
apportionment provided in subdivision 1, the commissioner shall
determine the equalized valuation of the operating property in
each county by applying to the apportioned value an estimated
current year median sales ratio for all commercial and
industrial property in that county. If the commissioner decides
there are insufficient sales to determine a median
commercial-industrial sales ratio, an estimated current year
countywide median sales ratio for all property shall be applied
to the apportioned value. No equalization shall be made to the
market value of the operating property if the median sales ratio
determined pursuant to this subdivision is within five percent
of the assessment ratio of the railroad operating property.
Sec. 4. Minnesota Statutes 1982, section 270.87, is
amended to read:
270.87 [CERTIFICATION TO COUNTY ASSESSORS.]
When the commissioner has made his annual determination of
the equalized fair market value of the operating property of
each company in each of the respective counties, and in the
taxing districts therein, he shall certify the equalized fair
market value to the county assessor, which shall constitute the
equalized fair market value of the operating property of the
railroad company in such county and the taxing districts therein
upon which taxes shall be levied and collected in the same
manner as on the commerical and industrial property of such
county and the taxing districts therein.
Sec. 5. [APPROPRIATION.]
There is appropriated from the general fund to the
commissioner of revenue the amounts necessary to make certain
refunds of property taxes to railroads for assessment years 1981
and 1982 as a result of a change in the assessed valuation of
railroad property. For purposes of this section, the term
"property taxes" includes any interest which is required to be
paid to the railroads.
The county auditor shall certify to the commissioner of
revenue the dollar amount of the refunds paid to the railroads
by the county and each city, town, school district, and special
taxing district or portion thereof which is located within the
county. The certification must be made on the forms and
completed by the date prescribed by the commissioner. The
commissioner of revenue shall review the certification and make
changes in the certification that he determines are necessary.
The amounts of the abatements for a taxing district which is
located in more than one county shall be aggregated. The
commissioner shall determine the amount to be paid to each
county, city, town, and special taxing district which shall be
equal to the amount of the abatement in excess of 20 cents per
capita for each county, city, town, and special taxing district.
The commissioner shall determine the amount to be paid to each
school district which shall be equal to the amount of the
abatement in excess of one dollar per pupil unit for the school
district. The 20 cents per capita and the one dollar per pupil
unit shall relate to the combined abatement amount for all
railroads for both 1981 and 1982 for each county, city, town,
school district, and special taxing district. The commissioner
shall pay each taxing district as soon as practicable after
certification, but not before January 1, 1985.
This appropriation is available the day after final
enactment until expended.
A county, city, town, school district, and special taxing
district may include an additional amount in its property tax
levy for taxes payable in 1985 equal to the difference between
the amount of tax and interest refunded to a railroad company
whose valuation was ordered reduced by the tax court and the
amount reimbursed to the taxing district by the state pursuant
to this section. Amounts levied for this purpose shall be
considered outside of any levy limitations applicable to the
taxing district. In the case of a school district, only the
amount of abatement not reimbursed under this section may be
considered in the computation of abatement aid under section
124.214, subdivision 2.
Sec. 6. [EFFECTIVE DATE.]
Section 5 is effective the day after final enactment. The
remaining sections in this article are effective for the 1984
assessment and subsequent years, for taxes payable in 1985 and
subsequent years.
ARTICLE 10
AGRIPROCESSING
Section 1. [41A.01] [PURPOSE.]
Sections 1 to 6 provide a framework for an agricultural
resource loan guaranty program, the purposes of which are to
further the development of the state's agricultural resources
and improve the market for its agricultural products. Public
debt is authorized by the constitution to be incurred for
developing agricultural resources by extending credit on real
estate security. The program contemplates the use of this power
not to finance projects of the kind described herein, but to
provide financial guaranties for a portion of the cost of viable
projects to the extent necessary to enable qualified developers
and operators to secure private financing which would not
otherwise be available. All credit advanced pursuant to loan
guaranty commitments is to be secured by subrogation of the
state to mortgage security and other security interests granted
to the private lender, in proportion to the amount advanced by
the state. A loan guaranty board is established to investigate
the feasibility of each project, its conformity to the above
policies and to environmental standards, the qualifications of
the owners, operators, and lenders, and the nature and extent of
the security, prior to commitment, and to secure maximum
financial participation by private persons, not supported by the
guaranty, to assure that in these respects each project
satisfies and will continue to satisfy criteria which are
adequate in the judgment of the board.
Sec. 2. [41A.02] [DEFINITIONS; ACTIONS BY THE STATE.]
Subdivision 1. [SCOPE.] The definition of each term given
in this section applies whenever the term is used in sections 1
to 7.
Subd. 2. [AGRICULTURAL RESOURCE.] "Agricultural resource"
means any organic matter which is available on a renewable basis
from agricultural processes, including agricultural crop,
animal, and wood production, waste, and residues.
Subd. 3. [AGRICULTURAL RESOURCE LOAN GUARANTY BOARD;
BOARD.] "Agricultural resource loan guaranty board" or "board"
means the commissioner of finance as chairman, the commissioner
of agriculture, the commissioner of commerce, the commissioner
of energy and economic development, and the director of the
pollution control agency.
Subd. 4. [AGRICULTURAL RESOURCE LOAN GUARANTY FUND;
GUARANTY FUND.] "Agricultural resource loan guaranty fund" or
"guaranty fund" means the fund created by section 5.
Subd. 5. [AGRICULTURAL RESOURCE LOAN GUARANTY PROGRAM;
PROGRAM.] "Agricultural resource loan guaranty program" or
"program" includes all projects and loan guaranties approved
pursuant to sections 3 and 4.
Subd. 6. [AGRICULTURAL RESOURCE PROJECT; PROJECT.]
"Agricultural resource project" or "project" means any facility,
or portion of a facility, located in the state which is operated
or to be operated primarily for the production from agricultural
resources of marketable products. A project includes a facility
or portion of a facility for mixing or producing substances to
be mixed with other substances for use as a fuel or as a
substitute for petroleum or petrochemical feedstocks.
Subd. 7. [APPLICANT.] "Applicant" means any rural
development finance authority organized, or any county
exercising the powers of such an authority, pursuant to chapter
362A, which applies to the state for approval of a guaranty of a
loan to a borrower for a project.
Subd. 8. [BORROWER.] "Borrower" means any applicant or any
private individual, company, cooperative, partnership,
corporation, association, consortium, or other entity organized
for a common business purpose, which is obligated or to be
obligated to pay a guaranteed loan.
Subd. 9. [CONSTRUCTION.] "Construction" means construction
of a new agricultural resource project, or conversion of a
facility to such a project, or expansion or improvement of a
project to increase its capacity or efficiency. "Construction"
includes acquisition of land, easements, buildings, structures,
improvements, and equipment and machinery for use in or at the
site of a project or on easements adjacent to the project site.
Subd. 10. [COST.] "Cost" of a project means the sum of all
obligations paid or to be paid or incurred by the borrower which
are reasonably required for the construction and completion of
the project, including but not limited to (i) surveys,
estimates, plans, specifications, supervision of construction,
and other engineering and architectural service; (ii) payments
under construction contracts and for payment and performance
bonds; (iii) purchase and installation of equipment and
machinery; (iv) recording, filing, permit, legal, financial,
underwriting, placement, commitment, publication, advertising,
and other charges, fees, and expenses incurred for establishing
title, mortgage liens, and security interests with respect to
the project, for securing permits for construction and approval
of the loan guaranty, for establishing the terms of the loan and
underlying security agreements, and for offering, selling, or
placing with investors and printing and delivering the
obligations evidencing the loan; and (v) interest, discount,
fees, and expenses accruing with respect to the loan, and taxes
and other government charges payable with respect to the
project, during construction.
Subd. 11. [LENDER.] "Lender" means any holder or holders
of bonds, notes, or other obligations evidencing a guaranteed
loan, any trustee representing those holders, and any investment
or commercial banking institution, savings and loan institution,
insurance company, investment company, or other financial
institution or institutional investor making, purchasing, or
participating in a loan or any part of a loan.
Subd. 12. [LOAN.] "Loan" means any obligation to repay
money borrowed to finance the construction of a project or to
refund or refinance such an obligation.
Subd. 13. [LOAN AGREEMENT.] "Loan agreement" means a
written agreement or agreements setting forth the terms and
conditions of the obligation of the borrower to the lender and
the pledges and covenants made and mortgage lien and other
security interests granted for the security of the obligations,
including a mortgage, note, indenture, or other agreement
however designated.
Subd. 14. [LOAN GUARANTY.] "Loan guaranty" means a written
agreement executed on behalf of the state that guarantees, in
accordance with the terms and conditions contained in the
agreement or in a loan agreement, the payment of sums of money
owing by a borrower to a lender.
Subd. 15. [STATE.] "State" actions contemplated in
sections 1 to 6 may be taken on behalf of the state by
resolutions of the agricultural resource loan guaranty board,
subject to approval by the governor if required by the governor,
or by a member of the board or another state officer in the
department headed by the member, pursuant to authority delegated
by resolution of the board. Resolutions of the board are
effective when approved by the vote of a majority of its members.
Sec. 3. [41A.03] [LOAN GUARANTIES.]
Subdivision 1. [AUTHORITY FOR AND LIMITATION OF GUARANTY.]
Subject to the provisions of sections 1 to 6 and subject to
section 16A.80 and upon determination that a loan will serve the
public purposes and satisfy the conditions set forth in sections
1 to 6, the state may guarantee and commit to guarantee against
loss an amount not exceeding 90 percent, with accrued interest,
of a loan for the construction of an agricultural resource
project (or the refunding or refinancing of a loan). The loan
must be secured by a first mortgage lien on and security
interest in all real and personal property comprising the
project and other collateral as provided in the loan agreement.
Subd. 2. [LIMITATION OF LOAN AMOUNT.] The total principal
amount of any guaranteed loan may not exceed 80 percent of the
total cost of the related project as estimated by the state at
the time the commitment to guarantee is made or, in the case of
a refunding or refinancing loan, 80 percent of the aggregate
amount of principal and interest refunded or refinanced. If the
actual cost exceeds the estimate the state may, upon request of
the borrower and the lender, consent to an increase of the loan
by a principal amount not greater than 80 percent of the excess
cost, and may increase the guaranteed amount by not more than 90
percent of the increase in the principal amount, and accrued
interest on that amount.
Subd. 3. [REQUIRED PROVISIONS.] A loan guaranty or loan
agreement pertaining to any loan guaranteed by the state must
provide that:
(a) Payments of principal and interest made by the borrower
under the loan shall be applied by the lender to reduce the
guaranteed and nonguaranteed portion of the loan on a
proportionate basis, and the nonguaranteed portion shall not in
any event receive preferential treatment over the guaranteed
portion.
(b) A period of grace shall be allowed of not less than 60
days from a date a principal or interest payment is due, prior
to the making of demand for payment pursuant to the loan
guaranty, to permit adequate time for a decision on behalf of
the state regarding principal and interest assistance in
accordance with subdivision 4. Payment as required by the loan
guaranty shall be made within 60 days after receipt by the state
of written demand complying with the terms and conditions of the
guaranty.
(c) The lender may not accelerate repayment of the loan or
exercise other remedies available to the lender if the borrower
defaults, unless (i) the borrower fails to pay a required
payment of principal or interest, or (ii) the state consents in
writing, or (iii) as otherwise permitted in the loan guaranty.
In the event of a default, the lender may not make demand for
payment pursuant to the guaranty unless the state agrees in
writing that such default has materially affected the rights or
security of the parties, and finds that the lender should be
entitled to receive payment pursuant to the loan guaranty.
(d) If a payment of principal or interest is made by the
state upon default of the borrower, the state shall be
subrogated to the rights of the lender with respect to the
payment.
(e) The borrower shall have promptly prepared and delivered
to the state annual audited financial statements of the project
prepared according to generally accepted accounting principles.
(f) Duly authorized representatives of the state shall have
access to the project site at reasonable times during
construction and operation of the project.
(g) The borrower shall maintain adequate records and
documents concerning the construction and operation of the
project in order that representatives of the state may determine
its technical and financial conditions and its compliance with
environmental requirements. The records shall include the
amounts of all sales and use taxes paid on personal property and
services purchased for the construction and operation of the
project, with tax receipts furnished by the sellers or other
supporting documentation determined by the board to be
satisfactory. The amounts of those taxes shall be reported to
the board in the manner and at the times required by the board.
(h) The borrower shall protect and preserve at all times
the project assets and other collateral securing the loan and
shall assist in liquidation of collateral to minimize loss in
the event of default.
(i) Orderly liquidation of assets of the project shall be
provided for in the event of default, with an option on the part
of the state to acquire from the lender the lender's interest in
the assets pursuant to the nonguaranteed portion of the loan.
(j) The state shall be paid at or prior to the closing of
the guaranteed loan a fee or fees for the loan guaranty or the
commitment to guarantee the loan. The aggregate fee may not
exceed one percent of the total principal amount of the
guaranteed portion of the loan.
(k) The lender shall perfect and maintain the mortgage lien
on the real estate and the security interest in personal
property and collateral granted as security for the loan, and
shall cause all other loan servicing functions to be performed
which are normally required or performed by a reasonable and
prudent lender with respect to a loan without a guaranty.
(l) The state shall be notified in writing without delay of
(i) the date and amount of and basis for each disbursement of
loan proceeds; (ii) any nonpayment of principal or interest due
(within ten days after the due date and with evidence of
notification to the borrower); (iii) any failure to honor a
commitment by any person of an intended source of capital for
the project; and (iv) any significant adverse changes from
original cash flow projections as evidenced by reports from the
borrower, or any other known evidence that the borrower might be
unable to meet a future scheduled payment of principal or
interest.
(m) The loan agreement shall require the borrower to
establish a reserve, from the proceeds of the loan or otherwise,
to be maintained with the lender or with a trustee for the
holders of the borrower's obligations in cash or securities of a
specified market value not less than the annual amount which
would be required to amortize the entire amount of the loan over
the term (or at the rate of yield resulting from the interest
rates) provided in the loan agreement.
Subd. 4. [PRINCIPAL AND INTEREST ASSISTANCE.] The state
may at any time enter into a written contract with the borrower
to pay the lender, on behalf of the borrower, an amount not
greater than the amount of principal and interest to become due
on one or more subsequent dates, without acceleration, if the
state determines that (i) the borrower is not in default in
payment of principal or interest due more than 60 days prior to
the date of the contract; (ii) the borrower is or may become
unable to meet in full principal or interest payments, or both,
which are due or to become due within a specified period; (iii)
it is in the public interest to permit the borrower to continue
to pursue the purposes of the project; (iv) the probable net
financial loss to the state will be less than that which would
result in the event of a default; (v) the borrower is obligated
by the contract to reimburse the state for all principal or
interest advanced, with interest on those amounts, upon terms
and conditions satisfactory to the state; and (vi) funds are
available for allocation to the account established for the
project in the guaranty fund, and are continuously allocated to
the account in accordance with the provisions of section 4,
subdivision 3, in an amount equal to the amount of interest on
the advances until actually reimbursed to the state by the
borrower. All sums so advanced and interest on those amounts
shall be secured by the mortgage lien and security interest
granted by the loan agreement, but none of the advances shall
thereafter be repaid to the state until and unless all principal
and interest currently due on the loan has been fully paid. In
the event of subsequent default by the borrower, acceleration by
the lender, and payment by the state of the full amount due
under the loan guaranty, the state shall be subrogated to the
rights of the lender with respect to the principal paid by it
under the contract. Upon payment of the loan in full, with
accrued interest, the remaining amount of the advances and
interest on the advances may be paid to the state.
Sec. 4. [41A.04] [APPLICATION AND APPROVAL.]
Subdivision 1. [REQUIREMENTS.] (a) Any rural development
finance authority, or county exercising the powers of such an
authority, may file a written application with the state
commissioner of finance, to be considered by the agricultural
resource loan guaranty board, for a guaranty by the state of a
portion of a loan for an agricultural resource project. In
general, the application must provide information similar to
that required by an investment banking or other financial
institution considering such a project for debt financing.
Specifically, each application must include in brief but precise
form the following information, as supplied by the applicant,
the borrower, or the lender:
(1) a description of the scope, nature, extent, and
location of the proposed project, including the identity of the
borrower and a preliminary or conceptual design of the project;
(2) a description of the technology to be used in the
project and the prior construction and operating experience of
the borrower with such projects;
(3) a detailed estimate of the items comprising the total
cost of the project, including escalation and contingencies,
with explanation of the assumptions underlying the estimate;
(4) a general description of the financial plan for the
project, including the mortgage and security interests to be
granted for the security of the guaranteed loan, and all sources
of equity, grants, or contributions or of borrowing the
repayment of which is not to be secured by the mortgage and
security interests, or, if so secured, is expressly subordinated
to the guaranteed loan;
(5) an environmental report analyzing potential
environmental effects of the project, any necessary or proposed
mitigation measures, and other relevant data available to the
applicant to enable the board to make an environmental
assessment;
(6) a list of applications to be filed and estimated dates
of approvals of permits required by federal, state, and local
government agencies as conditions for construction and
commencement of operation of the project;
(7) an estimated construction schedule;
(8) an analysis of the estimated cost of production of and
market for the product, including economic factors justifying
the analysis and proposed and actual marketing contracts,
letters of intent, and contracts for the supply of feedstock;
(9) a description of the management experience of the
borrower in organizing and undertaking similar projects;
(10) pro forma cash flow statements for the first five
years of project operation including income statements and
balance sheets;
(11) a description of the borrower's organization and,
where applicable, a copy of its articles of incorporation or
partnership agreement and bylaws;
(12) the estimated amount of the loan and percentage of
guaranty requested, the proposed repayment schedule, and other
terms and conditions and security provisions of the loan;
(13) an estimate of the amounts and times of receipt of
guaranty fees, sales and use taxes, property tax increments, and
any other governmental charges which may be available for the
support of the state guaranty fund as a result of the
construction of the project, with an analysis of the assumptions
on which the estimate is based;
(14) a copy of any lending commitment issued by a lender to
the borrower;
(15) a statement from the lender, if identified, as to its
general experience in financing and servicing debt incurred for
projects of the size and general type of the project, and its
proposed servicing and monitoring plan; and
(16) additional information required by the board.
(b) The applicant shall pay upon filing of the application
a fee equal to .25 percent of the amount of the loan guaranty
requested. The fee shall be paid to the commissioner of finance
and deposited in the general fund. If the board determines not
to issue a commitment for the project, the fee shall be refunded
to the applicant, less the board's cost of processing,
reviewing, and evaluating the application. If the board issues
a commitment for the project and the application fee exceeds the
board's cost of processing, reviewing, and evaluating the
application, the balance shall be transferred from the general
fund to the project account in the guaranty fund and credited
against the amount of the commitment fee required in section 3,
subdivision 3, clause (j). The county or rural development
finance authority may require the proposed borrower under the
project to pay the application fee.
Subd. 2. [ENVIRONMENTAL ASSESSMENT.] Notwithstanding any
other law or rule, no environmental impact statement must be
completed prior to the approval of an application and the
issuance of a conditional commitment for the guaranty of a loan
for an agricultural resource project, or the taking of any other
action permitted by sections 1 to 7, including the issuance of
bonds, which is considered necessary or desirable by the board
to prepare for a final commitment and to make it effective.
Environmental review, to the extent required by law, shall be
made in conjunction with the issuance by state agencies of
environmental permits for the project. Permits may be applied
for prior to the issuance of a conditional commitment. Action
shall be taken as expeditiously as possible on environmental
review and all permits required. Environmental review shall be
completed within 180 days after the initial filing of an
application to the pollution control agency for the first
permit. Final action shall be taken on permits within 90 days
after completion of environmental review or, as to any permit
requiring a public hearing, within 90 days after the receipt of
the hearing examiner's report.
Subd. 3. [COMMITMENT.] The board shall determine as to
each project for which an application is submitted whether it
appears in the board's judgment to conform to the purposes and
policies stated in section 1 to an extent measured by criteria
which in the board's judgment are satisfactory. In evaluating
applications the board shall consider the extent to which the
public subsidies sought by the applicant under the program would
provide the project with an unfair advantage in competing with
other products produced or processed in Minnesota. It may but
need not adopt rules setting forth criteria for evaluating
applications for loan guaranties. Upon determination by the
board that a project conforms to the purposes and policies in
section 1, it may by resolution make on behalf of the state a
conditional commitment to guarantee a portion of the proposed
loan as it shall determine, not exceeding the limitations set
forth in section 3. No action is allowable under section
116B.03, subdivision 1, with respect to acts of any person
authorized or required in order to execute the resolution. The
commitment is not binding upon the state until and unless the
following conditions are satisfied.
(1) the board has created a project account for the project
in the guaranty fund and has allocated to the account, from
funds previously appropriated by the legislature or from the
proceeds of bonds issued or to be issued for purposes of the
guaranty fund pursuant to authorization previously enacted by
the legislature, and not previously allocated to any other
project account, in an aggregate amount sufficient, with any
other amount then on hand in the project account, to pay the
entire guaranteed principal amount of the proposed loan, plus
interest on that amount for one year. The bonds authorized by
the legislature need not be issued until and unless the proceeds
allocated to a project account must be deposited in the account
to comply with clause (2) or (3).
(2) the board has deposited in the project account bond
proceeds or other funds in an amount not less than the annual
amount which would be required to amortize the guaranteed
portion of the principal of the loan over the term and at the
interest rate (or at the rate of yield resulting from the
interest rates) provided in the loan agreement.
(3) the board has executed on behalf of the state a final
loan guaranty instrument in conformity with section 3, which
binds the state to offer state bonds for sale at the times and
in the amounts required, with amounts on hand in the project
account, to pay all amounts to become due and payable under the
loan guaranty, within the authorization and allocation referred
to in clause (1), and when sold, to issue the bonds and apply
the proceeds to make these payments.
Subd. 4. [RULE MAKING AUTHORITY.] In order to effectuate
the purposes of sections 1 to 7, the board shall adopt rules
which are subject to the provisions of chapter 14. The board
may adopt temporary rules which may be effective until December
31, 1985.
Sec. 5. [41A.05] [MINNESOTA AGRICULTURAL RESOURCE LOAN
GUARANTY FUND AND BONDS.]
Subdivision 1. [ESTABLISHMENT OF FUND.] For the purpose of
developing the state's agricultural resources by extending
credit on real estate security, the agricultural resource loan
guaranty fund is established as a special and dedicated fund to
be held and invested separately from all other funds of the
state. All proceeds of state bonds authorized and issued for
the purposes of the fund, and all guaranty fees, retail sales
taxes, property tax increments, and other money from any source
which may be credited to the fund pursuant to law or pursuant to
the terms of grants, contributions, or contracts are
appropriated and shall remain available for the purposes of the
fund until those purposes have been fully accomplished. The
fund may be used only for paying amounts due under loan
guaranties and principal and interest assistance contracts
entered into by the state, pursuant to the agricultural resource
loan guaranty program.
Subd. 2. [ISSUANCE OF BONDS.] To provide money
appropriated to the agricultural resource loan guaranty fund for
the purposes of the program, when authorized by law and
requested by the board, the commissioner of finance shall issue
and sell bonds of the state. The state irrevocably pledges the
full faith, credit, and taxing powers of the state to the prompt
and full payment of these bonds. The proceeds of the bonds when
issued, except accrued interest and any premium received upon
sale, shall be credited to the guaranty fund. All the bonds
shall be sold and issued and shall be secured in the manner,
upon the terms, and with the effect prescribed for state
building bonds in chapter 16A, and with the security provisions
set forth in chapter 16A and in article XI, sections 4 to 7 of
the constitution.
Subd. 3. [COVENANT.] In fulfillment of the state's
covenant with the beneficiary of each loan guaranty executed by
the board on behalf of the state pursuant to the agricultural
resource loan guaranty program, in accordance with section 4,
subdivision 3, the state will not limit or alter the rights
vested in the board to comply with the terms of the loan
guaranties. The state agrees not to rescind or cancel any
authorization of an amount of bonds, or the appropriation of the
proceeds of bonds for the purposes of the program, which, with
the sum of the amounts then held in each project account in the
guaranty fund, would be required, in the event of an immediate
default on each guaranteed loan, to pay the balance of the
guaranteed portion of the principal of all guaranteed loans with
interest accrued and to accrue thereon for one year.
Subd. 4. [INCOME TAX EXEMPTION.] In the issuance of state
bonds and the making of loan guaranties for the purposes of the
program, the commissioner of finance and the board may and shall
make all provisions and do or cause to be done all acts and
things, consistent with sections 1 to 6, which are or may be
effective under federal laws and regulations to comply with
conditions for the exemption of interest on such bonds from
federal income taxation. However, if for any reason, whether
existing at the date of issue of any bonds or the date of
execution of any loan guaranty or thereafter, the interest on
any such bonds shall be or become subject to federal income
taxes, this shall not impair or affect the validity of the bonds
or of any loan guaranty or the provisions made for the security
thereof, and shall not impair or affect the covenant made by the
state in subdivision 3. Nothing herein affects the federal or
state income tax treatment of interest on obligations of a
borrower other than the state, whether or not guaranteed by the
state.
Sec. 6. [41A.06] [PROJECT TAXES AND OTHER CHARGES.]
Subdivision 1. [APPROPRIATION.] The payments, taxes, and
governmental charges described in this section which are
received as a consequence of the undertaking, completion, and
operation of each agricultural resource loan project for which a
loan guaranty is made by the state are appropriated to the loan
guaranty fund. This appropriation shall not lapse at the close
of any fiscal year under the provisions of section 16A.28, and
the receipts from the appropriation shall remain available as
provided in section 5, subdivision 1. The state is not
obligated, however, to continue the appropriation with respect
to charges not yet collected, except to the extent determined to
be necessary for compliance with the covenant contained in
section 5, subdivision 3.
Subd. 2. [ALLOCATION TO PROJECT ACCOUNTS.] Receipts of
charges related to a particular project shall be deposited and
recorded in its project account in the guaranty fund; but the
board may reallocate receipts in any project account which cause
the amount held in the account to exceed the minimum balance
established initially pursuant to section 4, subdivision 3,
clause (2). The reallocation may be made to another project
account for the purpose of maintaining the minimum balance in
the account.
Subd. 3. [PAYMENTS BY BORROWERS.] Guaranty and commitment
fees paid by borrowers pursuant to the loan guaranty provision
required by section 3, subdivision 3, clause (j), and repayments
by borrowers of amounts advanced by the state under contracts
referred to in section 3, subdivision 4, shall be deposited in
the project account for the borrower's project and shall not be
disbursed or transferred for any purpose other than the
fulfillment of the state's obligations under the loan guaranty
for that project. Funds may be transferred out of the account
if the minimum required balance in the project account is
maintained and exceeds the aggregate amount of fees and payments
previously received from the borrower plus interest received
from the investment thereof.
Subd. 4. [SALES AND USE TAXES.] All collections of the
excise taxes imposed by chapter 297A upon retail sales, and upon
the privilege of use, storage, or consumption in Minnesota, of
personal property and services purchased for the construction or
operation of any project for which a loan guaranty has been made
or conditionally committed, less any refunds required by law and
a proportionate share of the cost of administration and
enforcement of the assessment and collection of the taxes, are
appropriated and shall be deposited from the general fund into
the project account in the guaranty fund at least once each year
from and after the date of the conditional commitment. The
commissioner of finance shall secure from each borrower the
amount of taxes so imposed and from the commissioner of revenue
the amount of refunds or costs to be deducted from them.
Subd. 5. [PROPERTY TAX INCREMENTS.] The applicant for a
loan guaranty for any project, and the county in which the
project is situated, shall do all acts and things necessary for
the computation and segregation of property tax increments
resulting from the construction of the project in accordance
with the provisions of section 362A.05, and for the remittance
to the commissioner of finance, for deposit in the loan guaranty
fund, of all tax increments received from and after the date of
the conditional commitment for the loan guaranty. The board may
agree to accept a pledge of only a portion of the tax
increment. If the project account contains the minimum balance
required by section 4, subdivision 3, the board may annually
return the excess tax increment to be distributed as provided by
section 273.75, subdivision 2, clause (d), until the increment
has been discharged under the agreement or section 11.
Sec. 7. [41A.07] [ADVISORY COMMISSION.]
The board may appoint an advisory commission, consisting of
at least five members. The members of the commission shall
include individuals with expertise in agricultural processing,
commercial lending and financing of similar or related projects,
agricultural economics, and engineering, chemistry, and other
natural sciences related to the projects. The commission shall
advise the board on establishing a workable program pursuant to
sections 1 to 6 and may provide assistance in evaluating
applications for loan guarantees. The terms and compensation of
commission members shall be governed by section 15.059, except
that subdivision 5 shall not apply.
Sec. 8. Minnesota Statutes 1982, section 297A.44,
subdivision 1, is amended to read:
Subdivision 1. All revenues, including interest and
penalties, derived from the excise and use taxes imposed by
sections 297A.01 to 297A.44 shall be deposited by the
commissioner in the state treasury and credited to the general
fund. All excise and use taxes derived from sales and use of
property and services purchased for the construction and
operation of an agricultural resource project, from and after
the date on which a conditional commitment for a loan guaranty
for the project is made pursuant to section 4, subdivision 3,
shall be deposited in the agricultural resource loan guaranty
fund. The commissioner of finance shall certify to the
commissioner the date on which the project received the
conditional commitment. The amount deposited in the loan
guaranty fund shall be reduced by any refunds and by the costs
incurred by the department of revenue to administer and enforce
the assessment and collection of the taxes.
Sec. 9. Minnesota Statutes 1982, section 362A.01,
subdivision 1, is amended to read:
Subdivision 1. Any county or combination of counties by
resolution of the county board or boards may establish a rural
development financing authority as a public nonprofit
corporation with the same powers and duties as those conferred
and imposed on a private nonprofit corporation by chapter 317,
and all present and future laws amending or supplementing that
chapter, except as otherwise or additionally provided herein.
No such authority shall transact any business or exercise any
powers until a certified copy of the resolutions of each
participating county board has been submitted to the secretary
of state and a certificate of incorporation issued pursuant to
section 317.10. Alternatively, a county may determine by
resolution of the county board (without such filing) to exercise
the powers granted in this chapter to a rural development
finance authority.
Sec. 10. [362A.041] [APPLICATIONS FOR LOAN GUARANTIES.]
The authority, or a county exercising the powers of an
authority pursuant to section 362A.01, may undertake or
participate in undertaking a project deemed to further the
policies and purposes of the agricultural resource loan guaranty
program established and described in sections 1 to 6, by
applying to the agricultural resource loan guaranty board for a
guaranty by the state of a portion of a loan for the project to
be secured by the applicant, or by another eligible borrower.
For this purpose it may do all acts and things required of an
applicant or of a borrower under the provisions of sections 1 to
6, including but not limited to the computation, segregation,
and application of tax increments by deposit in the loan
guaranty fund under the terms of the loan guaranty.
Sec. 11. Minnesota Statutes 1982, section 362A.05, is
amended to read:
362A.05 [AGREEMENTS FOR RESERVATION OF TAX INCREMENTS.]
The authority may enter into an agreement with any county
in which a project is to be situated, or a county exercising the
powers of an authority may adopt a resolution, under which the
increment of taxable value of property to be created by the
constituting an agricultural resource project for which a
conditional commitment for a loan guaranty has been made by the
state as provided in section 4, subdivision 3, over and above
the taxable value of the project site as last finally determined
before the project was undertaken, may be excluded from the
taxable value of property on which the mill rate of taxes is
computed in every subsequent year, for so long as may be agreed
provided in the loan guaranty, but the aggregate mill rate of
taxes levied by the county and all other taxing districts on
other properties in each such year shall be spread also on the
incremental taxable value of the project, and the tax resulting
therefrom, when collected, shall be remitted to the authority,
and may be pledged, together with charges or special
assessments, to pay or guarantee the payment of its bonds, or
may be used by the authority for the purposes stated in section
362A.01, subdivision 2 or to the county, as the case may be, for
deposit and use in the loan guaranty fund of the state as
provided in sections 1 to 6. The tax increment for an
agricultural resource project shall be discharged when either of
the following occurs: (a) the loan obligation has been
satisfied; or (b) the amount in the project account equals the
amount of the guaranteed portion of the outstanding principal
and interest on the guaranteed loan. Every county shall have
the power by resolution of the county board to do all acts and
things necessary for the computation, segregation, and
application of tax increments under agreements made with the
authority the loan guaranty in accordance with this section.
This section shall not apply with respect to any project
established subsequent to August 1, 1979.
Sec. 12. [AUTHORIZATION OF BONDS.]
To provide money in the state agricultural resource loan
guaranty fund, for the purpose of the program for which this
fund is appropriated and dedicated under the provisions of
sections 1 to 6, the commissioner of finance may issue bonds of
the state in the aggregate amount of $12,000,000. Before the
issuance of any series of the bonds the loan guaranty board
shall determine by resolution that the amount to be issued will
be needed to make payments due under one or more guaranties
executed with respect to outstanding loans in the program, or is
needed to maintain within the guaranty fund a balance sufficient
in the judgment of the board to assure compliance by the state
with its covenant contained in section 5, subdivision 3. The
bonds shall be sold and issued in the manner, upon the terms,
and with the effect prescribed by sections 1 to 6 and by the
constitution, article XI, sections 4 to 7.
Sec. 13. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 11
SALES RATIOS
Section 1. Minnesota Statutes 1982, section 124.2131,
subdivision 1, is amended to read:
Subdivision 1. [ADJUSTED ASSESSED VALUE.] (a)
[COMPUTATION.] The equalization aid review committee, consisting
of the commissioner of education, the commissioner of
administration, the commissioner of agriculture, and the
commissioner of revenue, is hereby continued and permanently
established. The duty of this committee shall be to review the
assessed valuation of the districts of the state. When such
reviews disclose reasonable evidence that the assessed valuation
of any district furnished by any county auditor is not based
upon the market value of taxable property in such district, then
said committee shall call upon the department of revenue to
ascertain the market value of such property, and adjust such
values as required by law to determine the adjusted assessed
valuation The department of revenue shall annually conduct an
assessment/sales ratio study of the taxable property in each
school district in accordance with the procedures referenced in
paragraphs (b) and (c). Based upon the results of this
assessment/sales ratio study, the department of revenue shall
determine an aggregate equalized assessed value for the various
strata of taxable property in each school district, which value
shall be designated as the adjusted assessed value. The
department of revenue shall take such steps as are necessary in
the performance of that duty and may incur such expense as is
necessary therefor. The commissioner of revenue is authorized
to reimburse any county or governmental official for services
performed at his request in ascertaining such adjusted
valuation. On or before March 15, annually, the department of
revenue shall submit its report on the assessed values
established by the previous year's assessment to said committee
for approval or rejection and, if approved, such report shall be
filed not later than the following July 1 with the commissioner
of education and each county auditor for those school districts
for which he has the responsibility for determination of mill
rates. A copy of the adjusted assessed value so filed shall be
forthwith mailed to the clerk of each district involved and to
the county assessor or supervisor of assessments of the county
or counties in which such district is located.
(b) [METHODOLOGY.] In making its annual assessment/sales
ratio studies, the department of revenue shall use a methodology
consistent with the most recent Standard on Assessment Ratio
Studies published by the assessment standards committee of the
International Association of Assessing Officers. The
commissioner of revenue shall supplement this general
methodology with specific procedures necessary for proper
execution of the study in accordance with other Minnesota laws
impacting the assessment/sales ratio study. The commissioner
shall document these specific procedures in writing and shall
publish the procedures in the State Register, but these
procedures will not be considered "rules" pursuant to the
Minnesota Administrative Procedure Act. By January 15, 1985,
the commissioner shall report to the chairmen of the house tax
committee and the senate committee on taxes and tax laws the
results of a study which the commissioner shall prepare
comparing the 1983 sales ratio study based upon the original
1983 assessment/sales ratio study methodology with the new
methodology as provided in clause (b). The 1984 adjusted
assessed values which are certified to the commissioner of
education shall be computed using the 1983 assessment/sales
ratio study methodology unless the 1985 legislature directs
otherwise.
(c) [AGRICULTURAL LANDS.] For purposes of determining the
adjusted assessed value of agricultural lands for the
calculation of 1977 adjusted assessed values and thereafter, the
market value of agricultural lands shall be the arithmetic
average of (1) the price for which the property would sell in an
arms length transaction, and (2) the income which could be
derived from its free market gross rental rate capitalized at a
rate of nine percent.
Sec. 2. Minnesota Statutes 1982, section 271.01,
subdivision 5, is amended to read:
Subd. 5. [JURISDICTION.] The tax court shall have
statewide jurisdiction. Except for an appeal to the supreme
court or any other appeal allowed under this subdivision, the
tax court shall be the sole, exclusive, and final authority for
the hearing and determination of all questions of law and fact
arising under the tax laws of the state, as defined in this
subdivision, in those cases that have been appealed to the tax
court and in any case that has been transferred by the district
court to the tax court. The tax court shall have no
jurisdiction in any case that does not arise under the tax laws
of the state or in any criminal case or in any case determining
or granting title to real property or in any case that is under
the jurisdiction of the probate court. The small claims
division of the tax court shall have no jurisdiction in any case
dealing with property valuation or assessment for property tax
purposes until the taxpayer has appealed the valuation or
assessment to the town or city board of equalization and to the
county board of equalization, except for those taxpayers whose
original assessments are determined by the commissioner of
revenue. A property owner, other than a public utility, mining
company, or railroad company for which the original assessments
are determined by the commissioner of revenue, may not appear
before the tax court unless a timely appearance in person, by
counsel, or by written communication has been made before the
county board of equalization as provided in section 274.13, to
appeal the assessment of the property, or that he can establish
that he did not receive notice of his market value at least ten
days before the county board of review meeting. The tax court
shall have no jurisdiction in any case involving an order of the
state board of equalization unless a taxpayer contests the
valuation of his property. Only the taxes, aids and related
matters contained in chapters 60A, 124, 270, 272, 273, 274, 275,
276, 277, 278, 279, 285, 287, 288, 290, 290A, 291, 292, 293,
294, 295, 296, 297, 297A, 297B, 298, 299, 340, 473, 473F, and
477A shall be considered tax laws of this state subject to the
jurisdiction of the tax court. This subdivision shall not be
construed to prevent an appeal, as provided by law, to an
administrative agency, board of equalization, or to the
commissioner of revenue. Wherever used in chapter 271, the term
commissioner shall mean the commissioner of revenue, unless
otherwise specified.
Sec. 3. Minnesota Statutes 1982, section 271.06,
subdivision 6, is amended to read:
Subd. 6. [HEARINGS; DETERMINATION OF ISSUES; DEFAULT.] The
tax court shall hear, consider, and determine without a jury
every appeal de novo. A tax court judge may empanel an advisory
jury upon his motion. The tax court shall hold a public hearing
in every case. All such parties shall have an opportunity to
offer evidence and arguments at the hearing; provided, that the
order of the commissioner or the appropriate unit of government
in every case shall be prima facie valid. When an appeal to the
tax court has been taken from an order or determination of the
commissioner or from the appropriate unit of government, the
proceeding shall be an original proceeding in the nature of a
suit to set aside or modify the order or determination. In case
no appellant shall appear the tax court shall enter its order
affirming the order of the commissioner of revenue or the
appropriate unit of government from which the appeal was taken.
If the department of revenue's sales ratio study is introduced
in tax court as evidence, the sales ratio data from the study
shall be admissible as evidence only as provided in section
278.05, subdivision 4.
Sec. 4. Minnesota Statutes 1983 Supplement, section
278.01, subdivision 1, is amended to read:
Subdivision 1. [DETERMINATION OF VALIDITY.] Any person
having any estate, right, title, or interest in or lien upon any
parcel of land, who claims that such property has been
partially, unfairly, or unequally assessed in comparison with
other property in the city or county, or that the parcel has
been assessed at a valuation greater than its real or actual
value, or that the tax levied against the same is illegal, in
whole or in part, or has been paid, or that the property is
exempt from the tax so levied, may have the validity of his
claim, defense, or objection determined by the district court of
the county in which the tax is levied or by the tax court by
serving two copies of a petition for such determination upon the
county auditor and one copy each on the county treasurer and the
county attorney and filing the same, with proof of service, in
the office of the clerk of the district court before the 16th
day of May of the year in which the tax becomes payable. A
property owner, other than a public utility, mining company, or
the railroad company for which the original assessments are
determined by the commissioner of revenue, may not appear before
the district court or tax court unless a timely appearance in
person, by counsel, or by written communication has been made
before the county board of equalization as provided in section
274.13, to appeal the assessment of the property, or that he can
establish that he did not receive notice of his market value at
least ten days before the county board of review meeting. The
county auditor shall immediately forward one copy of the
petition to the appropriate governmental authority in a home
rule charter or statutory city or town in which the property is
located if that city or town employs its own certified
assessor. A copy of the petition shall also be sent to the
school board of the school district in which the property is
located. A petition for determination under this section may be
transferred by the district court to the tax court. An appeal
may also be taken to the tax court under chapter 271 at any time
following receipt of the valuation notice required by section
273.121 but prior to May 16 of the year in which the taxes are
payable.
Sec. 5. Minnesota Statutes 1983 Supplement, section
278.05, subdivision 4, is amended to read:
Subd. 4. [SALES RATIO STUDIES AS EVIDENCE.] The sales
ratio studies published by the department of revenue, or any
part of the studies, or any copy of the studies or records
accumulated to prepare the studies which is prepared by the
commissioner of revenue for the equalization aid review
committee for use in determining school aids shall be admissible
in evidence as a public record without the laying of a
foundation if the sales prices used in the study are adjusted
for the terms of the sale to reflect market value and are
adjusted to reflect the difference in the date of sale compared
to the assessment date. Additional evidence relevant to the
sales ratio study is also admissible. No sales ratio study
received into evidence shall be conclusive or binding on the
court and evidence of its reliability or unreliability may be
introduced by any party including, but not limited to, evidence
of inadequate adjustment of sale prices for terms of financing,
inadequate adjustment of sales prices to reflect the difference
in the date of sale compared to the assessment date, and
inadequate sample size.
No reduction in value on the grounds of discrimination
shall be granted on the basis of a sales ratio study published
by the department of revenue unless
(a) the sales prices are adjusted for the terms of the sale
to reflect market value,
(b) the sales prices are adjusted to reflect the difference
in the date of sale compared to the assessment date,
(c) there is an adequate sample size, and
(d) the median ratio of the class of property of the
subject property in the same county, city, or town of the
subject property is lower than the assessment ratio of the
subject property by at least ten percent.
If the above criteria are met and a reduction in value on
the grounds of discrimination is granted based upon the sales
ratio study, the reduction shall reflect only the difference
between the assessment/sales ratio of the subject property and
110 percent of the median ratio of the class of property of the
subject property.
Sec. 6. [EFFECTIVE DATE.]
Sections 2 and 4 are effective for the 1985 assessment and
thereafter, payable 1986 and thereafter. Sections 1, 3, and 5
are effective the day following final enactment.
ARTICLE 12
CHARITABLE GAMBLING
Section 1. Minnesota Statutes 1983 Supplement, section
340.14, subdivision 2, is amended to read:
Subd. 2. [RESTRICTIONS.] Every licensee shall be
responsible for the conduct of his place of business and for
conditions of sobriety and order therein. No licensee shall
keep, possess, or operate, or permit the keeping, possession, or
operation of, on the licensed premises, or in any room adjoining
the licensed premises, any slot machine, dice, or any gambling
device or apparatus, nor permit any gambling therein, nor permit
the licensed premises or any room in the same, or in any
adjoining building, directly or indirectly under its control to
be used as a resort for prostitutes or other disorderly persons,
except that gambling devices may be kept or operated and raffles
conducted on licensed premises and adjoining rooms when such
activities are licensed by the local unit of government pursuant
to section 349.26 charitable gambling control board under
sections 349.11 to 349.213. No person under 18 years of age
shall be employed in any rooms constituting the place in which
intoxicating liquors are sold at retail "on-sale," except that
persons under 18 years of age may be employed as musicians or to
perform the duties of a busboy or dishwashing services in places
defined as a restaurant or hotel or motel serving food in rooms
in which intoxicating liquors are sold at retail "on-sale."
Persons under 18 years of age may be employed as waiters or
waitresses in places defined as a restaurant, hotel or motel to
serve food in rooms in which only wine is sold on-sale, provided
they shall not be permitted to serve or sell wine.
Sec. 2. Minnesota Statutes 1982, section 349.11, is
amended to read:
349.11 [PURPOSE.]
The purpose of sections 349.11 to 349.23 349.22 is to
closely regulate and control the conduct of the game of bingo
and to prohibit commercialization of bingo legal forms of
gambling to prevent their commercialization, to insure integrity
of operations, and to provide for the use of net profits only
for lawful purposes.
Sec. 3. Minnesota Statutes 1982, section 349.12, is
amended to read:
349.12 [DEFINITIONS.]
Subdivision 1. As used in sections 349.11 to 349.23 349.22
the following terms have the meanings given them.
Subd. 2. "Lawful gambling" is the operation, conduct or
sale of bingo, raffles, paddlewheels, tipboards, and pull-tabs.
Subd. 3. "Active member" means a member who has paid all
his dues to the organization and has been a member of the
organization for at least six months.
Subd. 3 4. "Bingo" means a game where each player has a
card or board for which a consideration has been paid containing
five horizontal rows of spaces, with each row except the central
one containing five figures. The central row has four figures
with the word "free" marked in the center space thereof. Bingo
also includes games which are as described in this subdivision
except for the use of cards where the figures are not preprinted
but are filled in by the players. A player wins a game of bingo
by completing any a preannounced combination of spaces or, in
the absence of a preannouncement of a combination of spaces, any
combination of five spaces in a row, either vertical, horizontal
or diagonal.
Subd. 4 5. "Bingo occasion" means a single gathering or
session at which a series of one or more successive bingo games
is played.
Subd. 5 6. "Checker" means a person who records the number
of bingo cards purchased and played during each game and records
the prizes awarded to the recorded cards, but does not collect
the payment for the cards.
Subd. 7. "Paddlewheel" means a wheel marked off into
sections containing one or more numbers, and which, after being
turned or spun, uses a pointer or marker to indicate winning
chances.
Subd. 8. "Tipboard" means a board, placard or other device
marked off in a grid or columns, in which each section contains
a hidden number or numbers, or other symbol, which determines
the winning chances.
Subd. 9. "Raffle" means a game in which a participant buys
a ticket for a chance at a prize with the winner determined by a
random drawing to take place at a location and date printed upon
the ticket.
Subd. 10. "Pull-tab" means a single folded or banded
ticket or a card with a face covered to conceal one or more
numbers or symbols, where one or more of each set of tickets or
cards has been designated in advance as a winner. "Pull-tab"
also includes a ticket sold in a gambling device known as a
ticket jar.
Subd. 6 11. "Lawful purpose" means one or more of the
following: (a) benefiting persons by enhancing their
opportunity for religious or educational advancement, by
relieving or protecting them from disease, suffering or
distress, by contributing to their physical well-being, by
assisting them in establishing themselves in life as worthy and
useful citizens, or by increasing their comprehension of and
devotion to the principles upon which this nation was founded;
(b) initiating, performing, or fostering worthy public works or
enabling or furthering the erection or maintenance of public
structures; (c) lessening the burdens borne by government or
voluntarily supporting, augmenting or supplementing services
which government would normally render to the people; or (d) the
improving, expanding, maintaining or repairing real property
owned or leased by an organization.
"Lawful purpose" does not include the erection or
acquisition of any real property, unless the local unit of
government board specifically authorizes the expenditures after
finding that the property will be used exclusively for one or
more of the purposes specified in this clause.
Subd. 7. "Local unit of government" means the city or town
in which bingo is proposed to be played or is played or, if
there is no city or town, the county in which bingo is proposed
to be played or is played.
Subd. 8 12. "Organization" means any fraternal, religious,
veterans, or other nonprofit organization.
Subd. 9 13. "Profit" means the gross receipts collected
from one or more bingo occasions lawful gambling, less
reasonable sums necessarily and actually expended for bingo
gambling supplies and equipment, prizes, rent, and utilities
used during the bingo gambling occasions, bingo license fees
compensation paid to members for conducting gambling, taxes
related to bingo, and other expenses permitted by Laws 1976,
Chapter 261 imposed by this chapter, and maintenance of devices
used in lawful gambling.
Subd. 10. "Bingo manager" means a member who has paid all
his dues to the organization and has been a member of the
organization for at least two years and has been designated by
an organization to supervise bingo occasions conducted by it.
Subd. 14. "Gambling manager" means a person who has paid
all dues to an organization and has been a member of the
organization for at least two years and has been designated by
the organization to supervise lawful gambling conducted by it.
Subd. 15. "Gambling equipment" means: bingo cards and
devices for selecting bingo numbers, pull-tabs, ticket jars,
paddlewheels, and tipboards.
Subd. 16. "Board" is the charitable gambling control board.
Subd. 17. "Distributor" is a person who sells gambling
equipment he manufactures or purchases for resale.
Sec. 4. Minnesota Statutes 1982, section 349.13, is
amended to read:
349.13 [NOT GAMBLING IF ORGANIZATION CONDUCTS BINGO.]
Bingo shall Lawful gambling is not be construed as a
lottery or as gambling within the meaning of sections 609.75 to
609.76 if it is conducted by an organization in compliance with
Laws 1976, Chapter 261 under this chapter.
Sec. 5. Minnesota Statutes 1982, section 349.14, is
amended to read:
349.14 [ORGANIZATION MAY CONDUCT BINGO; LICENSE.]
An organization may conduct bingo occasions lawful gambling
if it has been in existence for at least three years, has at
least 15 active members, has a license to conduct bingo lawful
gambling from the local unit of government board and complies
with sections 349.15 to 349.21 this chapter.
Sec. 6. Minnesota Statutes 1982, section 349.15, is
amended to read:
349.15 [USE OF PROFITS.]
Profits from a bingo occasion shall lawful gambling may be
expended only for lawful purposes as authorized at a regular
meeting of the conducting organization.
Sec. 7. [349.151] [CHARITABLE GAMBLING CONTROL BOARD.]
Subdivision 1. [BOARD CREATED.] The charitable gambling
control board is created with the powers and duties established
by subdivision 4.
Subd. 2. [MEMBERSHIP.] The board consists of 13 members
appointed as follows:
(1) eleven persons appointed by the governor, at least four
of whom must reside outside of the seven-county metropolitan
area;
(2) the commissioner of public safety or his designee; and
(3) the attorney general or his designee.
A member serving on the board by appointment must have been
a resident of Minnesota for at least five years. Of the
appointees of the governor not more than six may belong to the
same political party. A member appointed to the board may be
removed at any time by the appointing authority. Vacancies on
the board are filled in the same manner as the original
appointment. Of the members appointed by the governor, three
are for terms expiring June 30, 1985, four are for terms
expiring June 30, 1986, and four are for terms expiring June 30,
1987. After the expiration of the initial terms, appointments
are for three years. The governor shall appoint the chairperson
from among his appointees.
Subd. 3. [COMPENSATION.] The compensation of board members
is $35 per day spent on commission activities, when authorized
by the board, plus expenses in the same manner and amount as
provided in the commissioner's plan adopted according to section
43A.18, subdivision 2.
Subd. 4. [POWERS AND DUTIES.] The board has the following
powers and duties:
(1) to issue, revoke, and suspend licenses to organizations
and suppliers under sections 349.16 and 349.161;
(2) to collect and deposit license fees and taxes due under
this chapter;
(3) to receive reports required by this chapter and inspect
the records, books, and other documents of organizations and
suppliers to insure compliance with all applicable laws and
rules;
(4) to make rules, including temporary rules, required by
this chapter;
(5) to register gambling equipment and issue registration
stamps under section 349.162;
(6) to provide by rule for the mandatory posting by
organizations conducting lawful gambling of rules of play and
the odds and/or house percentage on each form of lawful
gambling; and
(7) to report annually to the governor and legislature on
its activities and on recommended changes in the laws governing
charitable gambling.
Subd. 5. [EMPLOYEES.] The board shall employ an executive
secretary in the unclassified service and such other employees
in the classified service as are required to enable it to carry
out its functions. One or more of the employees must be bingo
inspectors.
Subd. 6. [ATTORNEY GENERAL.] The attorney general is the
attorney for the board.
Sec. 8. Minnesota Statutes 1982, section 349.16, is
amended to read:
349.16 [LOCAL REGULATION ORGANIZATION LICENSES.]
Subdivision 1. [ISSUANCE OF GAMBLING LICENSES.] Nothing in
sections 349.11 to 349.23 shall be construed to prohibit a local
unit of government from adopting ordinances, rules and
regulations concerning the conduct of bingo which are more
restrictive than state regulations, including an ordinance to
ban the conduct of bingo. Prior to promulgating bingo
regulations or issuing a bingo license, the local unit of
government shall consult with the local building inspector, if
any, and the fire and police authorities. A local unit of
government which permits bingo but has not adopted regulations
shall be deemed to have adopted the provisions of Laws 1976,
Chapter 261 as its regulations. A local unit of government may
amend its regulations.
Subd. 2. A local unit of government that permits bingo
shall establish a system for licensing organizations to conduct
bingo occasions, and shall act on a bingo license application
within 180 days from the date of application, but shall not
issue a license until at least 30 days after the date of
application. A license shall be valid for one year, and may be
suspended or revoked by the issuing authority for violation of
Laws 1976, Chapter 261 or of any local ordinance relating to
bingo.
Subd. 3. Each year the local unit of government shall
allocate an amount of money at least equal to the lesser of
$25,000 or 25 percent of the amount it collected and retained
from bingo fees, bingo licenses, and bingo taxes in the
preceding year for the supervision, regulation and inspection of
the conduct of bingo Licenses authorizing organizations to
conduct lawful gambling may be issued by the board to
organizations meeting the qualifications of section 349.14, if
the board determines that the license is consistent with the
purpose of sections 349.11 to 349.22. Licenses issued under
this section are valid for one year and may be suspended by the
board for a violation of law or board rule or revoked for what
the board determines to be a pattern of willful violations of
law or board rule. A revocation or suspension is a contested
case under sections 14.57 to 14.69 of the Administrative
Procedure Act.
Subd. 2. [APPLICATION.] All applications for a license
under this section must be on a form prescribed by the board.
The board may require the applying organization to submit a copy
of its articles of incorporation and other documents it deems
necessary.
Subd. 3. [FEES.] The board shall by rule establish a
schedule of fees for licenses under this section. The schedule
must establish three classes of license, authorizing all forms
of lawful gambling, all forms except bingo and bingo only.
Sec. 9. [349.161] [DISTRIBUTOR LICENSES.]
Subdivision 1. [PROHIBITED ACTS; LICENSES REQUIRED.] No
person may:
(1) sell, offer for sale, or furnish gambling equipment for
use within the state for gambling purposes, other than for bingo
exempt from licensing under section 340.19, except to an
organization licensed for lawful gambling; or
(2) sell, offer for sale, or furnish gambling equipment to
an organization licensed for lawful gambling without having
obtained a distributor license under this section.
No licensed organization may purchase gambling equipment
from any person not licensed as a distributor under this section.
Subd. 2. [LICENSE APPLICATION.] The board may issue
licenses for the sale of gambling equipment to persons who meet
the qualifications of this section if the board determines that
a license is consistent with the purpose of sections 349.11 to
349.22. Applications must be on a form the board prescribes.
Subd. 3. [QUALIFICATIONS.] A license may not be issued
under this section to a person, or to a corporation, firm, or
partnership which has as an officer, director, or other person
in a supervisory or management position a person, who:
(1) has been convicted of a felony in a state or federal
court within the past five years or who has a felony charge
pending;
(2) has ever been convicted in a state or federal court of
a gambling-related offense; or
(3) is or has ever been engaged in an illegal business.
Subd. 4. [FEES.] The annual fee for a suppliers license is
$1,500.
Subd. 5. [PROHIBITION.] No distributor may also be a
wholesale distributor of liquor or alcoholic beverages.
Subd. 6. [REVOCATION AND SUSPENSION.] A license under this
section may be suspended by the board for a violation of law or
board rule or for failure to meet the qualifications in
subdivision 3 at any time or revoked for what the board
determines to be a pattern of willful violations of law or board
rule. A revocation or suspension is a contested case under
sections 14.57 to 14.69 of the Administrative Procedure Act.
Subd. 7. [CRIMINAL HISTORY.] The board may request the
assistance of the bureau of criminal apprehension in
investigating the background of an applicant for a supplier's
license and may reimburse the bureau for the costs thereof. The
board has access to all criminal history data compiled by the
bureau on licensees and applicants.
Sec. 10. [349.162] [EQUIPMENT REGISTERED.]
Subdivision 1. [STAMP REQUIRED.] A distributor may not
sell to an organization and an organization may not purchase
from a distributor gambling equipment unless the equipment has
been registered with the board and has a registration stamp
affixed. The board may charge a fee of up to 25 cents for each
stamp. Each stamp must bear a registration number assigned by
the board.
Subd. 2. [RECORDS REQUIRED.] A distributor must maintain a
record of all gambling equipment which it sells to
organizations. The record must include:
(1) the identity of the person or firm from whom the
equipment was purchased;
(2) the registration number of the equipment;
(3) the name and address of the organization to which the
sale was made; and
(4) the date of the sale.
The record for each sale must be retained for at least
three years after the sale is completed. For purposes of this
section, a sale is completed when the gambling equipment is
physically delivered to the purchaser.
Each distributor must report monthly to the board, on a
form the board prescribes, its sales of each type of gambling
equipment. Employees of the board may inspect the books,
records, and other documents of a distributor at any reasonable
time without notice and without a search warrant.
Subd. 3. [SALES FROM FACILITIES.] All gambling equipment
purchased by a licensed distributor for resale in Minnesota must
prior to its resale be unloaded into a facility located in
Minnesota which the distributor owns or leases.
Sec. 11. Minnesota Statutes 1982, section 349.17, is
amended to read:
349.17 [CONDUCT OF BINGO.]
Subdivision 1. [BINGO OCCASIONS.] No compensation shall be
paid to any person in connection with a bingo occasion except an
active member of the organization, or its auxiliary, or the
spouse or surviving spouse of an active member, conducting the
bingo occasion nor shall any person not an active member of the
organization or its auxiliary or the spouse or surviving spouse
of an active member participate in the conduct of a bingo
occasion, except by resolution of a majority of the membership,
recorded in the official minutes of the organization,
non-management assistants who are not active members of the
organization, or its auxiliary, or the spouse or surviving
spouse of an active member, may be hired to assist members in
conducting a bingo occasion. Compensation shall not exceed $20
for a bingo occasion.
Subd. 2. No Not more than 104 bingo occasions each year or
two bingo occasions each week shall may be conducted by any an
organization, except that the local unit of government issuing
the license may permit additional bingo occasions to be
conducted by an organization, except as provided in this
subdivision. A bingo occasion shall may not continue for more
than four consecutive hours.
The board may permit an organization to conduct more than
two bingo occasions in a week and more than 104 bingo occasions
in a year if the board determines that the additional occasions
are consistent with the purpose of sections 349.11 to 349.22 and
if the following procedures are followed:
(1) the organization applies for the additional occasions,
stating the number of additional occasions applied for;
(2) the board notifies the governing body of the county or
home rule or statutory city in which the applicant is located;
and
(3) the governing body fails to adopt a resolution
disapproving the additional occasions within 30 days of the
notification.
Subd. 3 2. [BINGO ON LEASED PREMISES.] (1) Any A person or
corporation, other than an organization, which leases any
premises that it owns to two or more organizations for purposes
including the conduct of bingo occasions, shall may not allow
more than four bingo occasions to be conducted on the premises
in any week. The board may waive this restriction and permit a
person or corporation to allow a specified member of bingo
occasions on the premises in excess of four per week if it finds
that the waiver is consistent with the purpose of sections
349.11 to 349.22 and if the following procedures are followed:
(1) the person or corporation applies for the waiver,
stating the number of additional occasions sought per week;
(2) the board notifies the governing body of the county or
home rule or statutory city in which the premises are located;
and
(3) the governing body fails to adopt a resolution
disapproving the waiver within 30 days of the notification.
(2) Any organization which leases any premises to one or
more other organizations for purposes including the conduct of
bingo occasions shall use the proceeds of the rental, less
reasonable sums for maintenance, furnishings and other necessary
expenses, only for lawful purposes as defined in section
349.12. Not less than once each year the organization shall
report to the licensing authority the disposition of all
receipts which it has received during the reporting period from
the rental of its facilities to other organizations for purposes
including the conduct of bingo occasions.
(3) No organization shall conduct bingo on any leased
premises without a written lease for a term at least equal to
the remainder of the term of the bingo license of the
organization. Lease payments shall be at a fixed monthly rate,
or rate per bingo occasion, not subject to change during the
term of the lease. No such lease shall provide that rental
payments be based on a percentage of receipts or profits from
bingo occasions.
Subd. 4. Prizes for a single bingo game shall not exceed
$100 except prizes for a game of the type commonly known as a
"cover-all" game. "Cover-all" prizes may exceed $100 provided
that the aggregate value of such prizes for a bingo occasion
shall not exceed $500. The aggregate value of prizes for a
bingo occasion shall not exceed $2,500 except that in the case
of a bingo occasion during which a "cover-all" game is played
for a maximum prize of more than $100 but not more than $500,
the aggregate value of prizes for the bingo occasion shall not
exceed $3,000. Merchandise prizes shall be valued at fair
market retail value.
Subd. 5. No expense shall be incurred or amounts paid in
connection with the conduct of bingo, except those reasonably
expended for bingo supplies and equipment, prizes, rent, or
utilities used during the bingo occasion, bingo license fees,
taxes related to bingo, and compensation to active members who
conduct the game.
Subd. 6 3. Each bingo winner shall must be determined and
every prize shall be awarded and delivered the same day on which
the bingo occasion is conducted.
Subd. 7. All bingo occasions shall be under the
supervision of a bingo manager designated by the organization
who shall be responsible for gross receipts and profits from
bingo and for the conduct of the bingo occasion in compliance
with all applicable laws and ordinances. The bingo manager
shall give a fidelity bond in the sum of $10,000 in favor of the
organization conditioned on the faithful performance of his
duties. Terms of the bond shall provide that notice shall be
given in writing to the licensing authority not less than 30
days prior to its cancellation. The governing body of a local
unit of government may waive this bond requirement by including
a waiver provision in the bingo license issued to an
organization, provided that a license containing such a
provision shall be granted only by unanimous vote.
Subd. 8. No person shall act as a bingo manager for more
than one organization.
Subd. 4. [CHECKERS.] One or more checkers must be engaged
for each bingo occasion. The checker or checkers must record,
on a form the board provides, the number of cards played in each
game and the prizes awarded to recorded cards. The form must
provide for the inclusion of the registration number of each
card and must include a checker's certification that the figures
recorded are correct to the best of the checker's knowledge.
Sec. 12. Minnesota Statutes 1982, section 349.18, is
amended to read:
349.18 [RECORDS; PLAYERS, CARDS AND PRIZES PREMISES USED
FOR GAMBLING.]
One or more checkers shall be engaged for each bingo
occasion. The checker or checkers shall record the number of
cards played in each game prior to the completion of each game
and record the prizes awarded to the recorded cards. Each
checker shall certify all figures which he has recorded as
accurate and correct to the best of his knowledge. A local unit
of government may require the records to be on forms which it
provides
Subdivision 1. [LEASE OR OWNERSHIP REQUIRED.] An
organization may conduct lawful gambling only on premises it
owns or leases. Leases must be for a period of at least one
year and must be in writing. Copies of all leases must be made
available to employees of the board on request. A lease may not
provide for rental payments based on a percentage of receipts or
profits from lawful gambling.
Subd. 2. [EXCEPTIONS.] (a) A licensed organization may
conduct raffles on a premise it does not own or lease.
(b) A licensed organization may with the permission of the
board, conduct bingo on premises it does not own or lease for up
to six days in a calendar year, in connection with a county fair
or civil celebration.
Subd. 3. [PROCEEDS FROM RENTAL.] A licensed organization
which leases premises it owns to one or more other licensed
organizations for purposes including the conduct of lawful
gambling may expend the rental proceeds, less reasonable
deductions for maintenance, furnishings, and utilities, only for
lawful purposes. The rental proceeds must be recorded and
reported as proceeds from gambling under section 349.19.
Sec. 13. Minnesota Statutes 1982, section 349.19, is
amended to read:
349.19 [EXEMPTION RECORDS AND REPORTS.]
Bingo may be conducted without complying with the
requirements of sections 349.14 and 349.17, subdivisions 2 and
3, if conducted: (a) in connection with a county fair conducted
by a county agricultural society or association, the state fair
conducted by the state agricultural society or a civic
celebration recognized by resolution or other similar official
action of the local governing body provided that the bingo is
conducted for no more than 12 consecutive days in any one
calendar year; or, (b) by an organization that conducts less
than five bingo occasions in any calendar year
Subdivision 1. [REQUIRED RECORD OF RECEIPTS.] A licensed
organization must keep a record of each occasion on which it
conducts gambling, including each bingo occasion and each day on
which other forms of lawful gambling are conducted. The record
must include gross receipts, quantities of free plays if any,
expenses, and profits. The board may by rule provide for the
methods by which expenses are documented. In the case of bingo,
gross receipts must be compared to the checkers' records for the
occasion by a person who did not sell cards for the occasion.
Separate records must be kept for bingo and all other forms of
lawful gambling.
Subd. 2. [ACCOUNTS.] Gross receipts from lawful gambling
must be segregated from all other revenues of the conducting
organization and placed in a separate account. The person who
accounts for gambling gross receipts and profits may not be the
same person who accounts for other revenues of the organization.
Subd. 3. [EXPENDITURES.] All expenditures of bingo profits
must be itemized as to payee, purpose, amount, and date of
payment.
Subd. 4. [DISCREPANCIES.] If at a bingo occasion a
discrepancy of more than $20 is found between the gross receipts
as reported by the checkers and the gross receipts determined by
adding the cash receipts, the discrepancy must be reported to
the board within five days of the bingo occasion.
Subd. 5. [REPORTS.] A licensed organization must report to
the board and to its membership monthly on its gross receipts,
expenses, profits, and expenditure of profits from lawful
gambling. If the organization conducts both bingo and other
forms of lawful gambling, the figures for both must be reported
separately. In addition, a licensed organization must report to
the board monthly on its purchases of gambling equipment and
must include the type, quantity, and dollar amount from each
supplier separately. The reports must be on a form the board
prescribes.
Subd. 6. [PRESERVATION OF RECORDS.] Records required to be
kept by this section must be preserved for at least three years
and may be inspected by employees of the board at any reasonable
time without notice or a search warrant.
Subd. 7. [TAX RECORDS.] The board may by rule require each
licensed organization to provide copies of forms it files with
the United States department of the treasury which are required
for organizations exempt from income tax.
Sec. 14. Minnesota Statutes 1982, section 349.20, is
amended to read:
349.20 [RECORDS; RECEIPTS AND PROFITS MANAGERS.]
Each organization shall keep records of its gross receipts
and profits for each bingo occasion. Gross receipts shall be
compared to the checker's records for the bingo occasion by a
person who did not sell cards for the bingo occasion. All
deductions from gross receipts from a bingo occasion shall be
documented with receipts or other records. The distribution of
profits shall be itemized as to payee, amount and date of
payment.
Bingo gross receipts shall be segregated from other
revenues of an organization and placed in a separate account.
Each organization shall maintain separate records of its bingo
operations. The person who accounts for bingo gross receipts
and profits shall not be the same person who accounts for other
revenues of the organization. Records required by Laws 1976,
Chapter 261 shall be preserved for three years. The law
enforcement agency of the licensing authority shall have the
authority to investigate the bingo records of an organization at
any reasonable time. Organizations shall make available their
bingo records for investigation upon proper notice
All lawful gambling conducted by a licensed organization
must be under the supervision of one or more gambling managers.
A gambling manager designated by an organization to supervise a
gambling occasion is responsible for the gross receipts from the
occasion and for its conduct in compliance with all laws and
rules. An organization may designate a different person to act
as manager for each type of lawful gambling conducted. Each
person designated as a gambling manager must give a fidelity
bond in the sum of $10,000 in favor of the organization
conditioned on the faithful performance of the manager's duties,
and the terms of the bond must provide that notice be given to
the board in writing not less than 30 days before its
cancellation.
A person may not act as a gambling manager for more than
one organization.
Sec. 15. Minnesota Statutes 1982, section 349.21, is
amended to read:
349.21 [REPORTS; DISCREPANCIES, REPORTING AGENCIES
COMPENSATION.]
Subdivision 1. If any discrepancy is found between the
amount of gross receipts for a bingo occasion as determined by
the checker's records and the amount of gross receipts as
determined by totaling the cash receipts and the discrepancy
exceeds $20, the discrepancy shall be reported to and
investigated by the licensing authority of the place where the
bingo occasion was held.
Subd. 2. An organization shall report monthly to its
membership its gross receipts from bingo, its profits from bingo
and the distribution of those profits itemized as required by
section 349.20.
Subd. 3. At least 30 days prior to conducting its first
bingo occasion of the year and on an annual basis thereafter, an
organization shall file with the local government unit which
regulates its conduct copies of the following:
(a) Department of the treasury, internal revenue service,
"Return of Organization Exempt from Income Tax," Form 990, or a
comparable form if the organization is required to file the form
with the department of the treasury;
(b) Department of the treasury, internal revenue service,
"Exempt Organization Business Income Tax," Form 990-T, or a
comparable form if the organization is required to file the form
with the department of the treasury;
(c) A "Statement of Bingo Operations" in the form
prescribed by the local governmental unit. All information
contained in the statement shall be true, correct, and complete
to the best of the knowledge of the person or persons signing
the statement. Any person who shall knowingly make a false
statement or knowingly conceal a material fact in the statement
shall be subject to the penalties provided in section 349.22;
(d) Any lease agreements required by Laws 1976, Chapter
261, executed by the organization in regard to premises leased
for the conduct of bingo
Compensation to persons who participate in the conduct of
lawful gambling may be paid only to active members of the
conducting organization or its auxiliary, or the spouse or
surviving spouse of an active member, except that nonmanagement
assistants who are not active members or spouses may be hired to
assist in the conduct of lawful gambling in nonmanagement
positions if approved by a majority of the organization's
members.
The amounts of compensation which may be paid under this
section must be provided for in a schedule of compensation
adopted by the board by rule. In adopting the schedule the
board must consider the nature of the participation and the
types of lawful gambling participated in.
A licensed organization may pay a percentage of the gross
receipts from raffle ticket sales to a nonprofit organization
which sells tickets for the licensed organization.
Sec. 16. [349.211] [PRIZE LIMITS.]
Subdivision 1. [BINGO.] Prizes for a single bingo game may
not exceed $100 except prizes for a cover-all game, which may
exceed $100 if the aggregate value of all cover-all prizes in a
bingo occasion does not exceed $500. Total prizes awarded at a
bingo occasion may not exceed $2,500, unless a cover-all game is
played in which case the limit is $3,000. For purposes of this
subdivision, a cover-all game is one in which a player must
cover all spaces except a single free space to win.
Subd. 2. [BINGO CUMULATIVE PRIZES.] A prize of up to
$1,000 may be awarded for a single bingo game if the prize is an
accumulation of prizes not won in games in previous bingo
occasions. The total amount awarded in cumulative prizes in any
calendar year may not exceed $12,000. For bingo occasions in
which a cumulative prize is awarded the aggregate value of
prizes which may be awarded for the occasion is increased by the
amount of the cumulative prize so awarded less $100.
Subd. 3. [OTHER GAMBLING.] The board by rule shall
establish a schedule of prize limits for all other forms of
gambling consistent with the purposes set out in section
349.11. The schedule may include daily and annual prize limits
and prize limits for each game, raffle or operation of a
gambling device.
Subd. 4. [PRIZE VALUE.] Merchandise prizes must be valued
at their fair market value. For purposes of sections 349.11 to
349.22 "prizes" do not include free plays awarded.
Sec. 17. [349.212] [TAX IMPOSED.]
Subdivision 1. [RATE.] There is hereby imposed a tax on
all lawful gambling conducted by licensed organizations at the
rate specified in this subdivision. The tax imposed by this
section is in lieu of the tax imposed by section 297A.02 and of
all local taxes and license fees.
On all lawful gambling the tax is ten percent of the gross
receipts of a licensed organization from lawful gambling less
prizes actually paid out, payable by the organization.
Subd. 2. [COLLECTION; DISPOSITION.] The tax must be paid
to the board at times and in a manner the board prescribes by
rule. The proceeds, along with the revenue received from all
license fees and other fees under sections 349.11 to 349.21 and
sections 16, 17, and 18 of this article, must be paid to the
state treasurer for deposit in the general fund.
Subd. 3. [ANNUAL APPROPRIATION.] At the end of each fiscal
year, the commissioner of finance shall certify to the state
treasurer the total revenues collected by the board from taxes
and fees imposed by this article minus the amount appropriated
by law from the general fund to the board for its expenses and
operations. The net revenue so certified shall be expended by
legislative appropriation to the department of education for
expenditure, in consultation with the state arts board, as
grants for programs, construction, maintenance, and operation of
one or more schools for the arts located within the state, or
the purposes recommended by the Minnesota school for the arts
planning task force except that any part of the amount so
certified which is not appropriated for the purposes set forth
in this subdivision may be appropriated for any other purpose.
Sec. 18. [349.213] [LOCAL AUTHORITY.]
Subdivision 1. [LOCAL REGULATION.] A statutory or home
rule city or county has the authority to adopt more stringent
regulation of any form of lawful gambling within its
jurisdiction, including the prohibition of any form of lawful
gambling, and may require a permit for the conduct of gambling
exempt from licensing under section 349.214. The authority
granted by this subdivision does not include the authority to
require a license or permit to conduct gambling by organizations
licensed by the board.
Subd. 2. [LOCAL APPROVAL.] Before issuing or renewing an
organization license, the board must notify the city council of
the statutory or home rule city in which the organization's
premises are located or, if the premises are located outside a
city, by the county board of the county where the premises are
located. If the city council or county board adopts a
resolution disapproving the license and so informs the board
within 30 days of receiving notice of the license, the license
may not be issued or renewed.
Sec. 19. [349.214] [EXEMPTIONS.]
Subdivision 1. [BINGO.] Bingo may be conducted without a
license and without complying with sections 349.17, subdivision
1, and 349.18 if it is conducted:
(1) in connection with a county fair, the state fair, or a
civic celebration if it is not conducted for more than 12
consecutive days in a calendar year; or
(2) by an organization which conducts four or fewer bingo
occasions in a calendar year.
Subd. 2. [RAFFLES.] Raffles may be conducted by an
organization as defined in section 349.12, subdivision 13,
without complying with sections 349.11 to 349.213 if the value
of all raffle prizes awarded by the organization in a calendar
year does not exceed $750. Merchandise prizes must be valued at
their fair market value.
Subd. 3. [RAFFLES, CERTAIN ORGANIZATIONS.] The provisions
of sections 349.21 and 349.211, subdivision 3, and the
membership requirements of sections 349.14 and 349.20 do not
apply to raffles conducted by an organization which directly or
under contract to the state or a political subdivision delivers
health or social services and which is exempt from taxation
under section 501(c)(3) of the Internal Revenue Code of 1954, as
amended through December 31, 1983, if the prizes awarded in the
raffles are real or personal property donated by an individual,
firm, or other organization. The person who accounts for the
gross receipts, expenses, and profits of the raffles may be the
same person who accounts for other funds of the organization.
Sec. 20. Minnesota Statutes 1982, section 349.22, is
amended to read:
349.22 [PENALTY.]
Violation of any provision of Laws 1976, Chapter 261 is a
gross misdemeanor.
Subdivision 1. [GROSS MISDEMEANOR.] Any other violation of
sections 349.11 to 349.214 is a gross misdemeanor.
Subd. 2. [OTHER ACTION.] This section shall does not
preclude civil or criminal actions under other applicable law or
preclude any agency of government from investigating or
prosecuting violations of the provisions of Laws 1976, Chapter
261 sections 349.11 to 349.214. County attorneys have primary
responsibility for prosecuting violations of sections 349.11 to
349.214, but the attorney general may prosecute any violation of
those sections.
Sec. 21. Minnesota Statutes 1982, section 349.31,
subdivision 1, is amended to read:
Subdivision 1. [INTENTIONAL POSSESSION; WILFUL KEEPING.]
The intentional possession or wilful keeping of a gambling
device upon any on a licensed premises is cause for the
revocation of any license under which the licensed business is
carried on upon the premises where the gambling device is found,
provided that possession of gambling devices commonly known as
"paddlewheels" or "tipboards" or "pull-tabs" (or "ticket jars")
or apparatus used in conducting raffles on the premises of a
nonprofit organization and operated by organizations licensed
for such operation pursuant to section 349.26 equipment as
defined in section 349.12, subdivision 17, which is used for
gambling licensed by the charitable gambling control board and
the manufacture of gambling devices for use in jurisdictions
where use of the gambling device is legal as provided for by
section 349.40 shall not be cause for revocation of a license.
Sec. 22. Minnesota Statutes 1983 Supplement, section
609.75, subdivision 3, is amended to read:
Subd. 3. [WHAT ARE NOT BETS.] The following are not bets:
(1) A contract to insure, indemnify, guarantee or otherwise
compensate another for a harm or loss sustained, even though the
loss depends upon chance.
(2) A contract for the purchase or sale at a future date of
securities or other commodities.
(3) Offers of purses, prizes or premiums to the actual
contestants in any bona fide contest for the determination of
skill, speed, strength, endurance, or quality or to the bona
fide owners of animals or other property entered in such a
contest.
(4) The game of bingo when conducted in compliance with
sections 349.11 to 349.23.
(5) A private social bet not part of or incidental to
organized, commercialized, or systematic gambling.
(6) The operation of a gambling device equipment or the
conduct of a raffle as defined in section 349.26 under sections
349.11 to 349.22, by an organization licensed for such operation
by a local unit of government pursuant to section 349.26 by the
charitable gambling control board.
(7) Pari-mutuel betting on horse racing when the betting is
conducted under chapter 240.
Sec. 23. Minnesota Statutes 1983 Supplement, section
609.761, is amended to read:
609.761 [OPERATIONS PERMITTED.]
Notwithstanding sections 609.755 and 609.76, a fraternal,
religious, veterans or other nonprofit an organization may set
up or operate a gambling device or conduct a raffle conduct
lawful gambling as defined in section 349.26 349.12, if licensed
by the local unit of government charitable gambling control
board and conducted under section 349.26 sections 349.11 to
349.22, and a person may manufacture, sell or offer for sale a
gambling device to the organization, and pari-mutuel betting on
horse racing may be conducted under chapter 240.
Sec. 24. [APPROPRIATION.]
There is appropriated from the general fund to the
charitable gambling control board for the period beginning the
day following final enactment of this article and ending June
30, 1985, the sum of $556,000, or so much thereof as is
necessary to carry out the purposes of this article.
Sec. 25. [REPEALER.]
Minnesota Statutes 1982, section 349.26, is repealed.
Sec. 26. [EFFECTIVE DATE.]
Sections 7 and 24 are effective the day following final
enactment. All other sections of this article are effective
March 1, 1985. All licenses issued by local units of government
under Minnesota Statutes 1982, sections 349.16 and 349.26 expire
on February 28, 1985.
ARTICLE 13
LOCAL PROVISIONS
Section 1. Minnesota Statutes 1982, section 458.14, is
amended to read:
458.14 [RIGHT TO LEVY TAXES OR ASSESSMENTS FORBIDDEN.]
Subdivision 1. [TAX LEVY BY CITY.] The port authority
shall have no right or authority to levy any tax or special
assessment, nor to pledge the credit of the state, or any other
subdivision or municipal corporation thereof; nor to incur any
obligation enforceable upon any property, either within or
without the port district, other than property owned by the port
authority. Annually, at such time as may be fixed by charter,
resolution, or ordinance of the city in and for which any such
port authority is created, the port authority shall transmit to
the council of such city a detailed estimate, in writing, of the
amount of money which in its opinion will be required for the
business and proper conduct of its affairs during the next
ensuing fiscal year, in excess of any expected receipts from the
conduct of its business, or other sources, and any such city, in
addition to all other powers now possessed thereby, and in
addition to, and in excess of any limitation upon the amount it
is otherwise permitted by law to levy as taxes, is hereby
granted the power and authority, in its discretion, to shall, at
the request of the port authority, levy taxes for the benefit
of, and for expenditure by, such port authority, not exceeding
in any one year an amount equal to a tax of five one-hundredths
of one mill .75 mill upon the dollar of the assessed valuation
thereof, upon all the taxable property in such city, excluding
money and credits, and any amount so levied for such purposes
shall be paid over by the city treasurer to the treasurer of the
port authority, for expenditure by it, as above provided. The
fiscal year of such port authority shall be identical with the
fiscal year of such city; provided that any seaway port
authority may, by resolution, adopt a fiscal year based on the
international shipping season through the St. Lawrence Seaway,
independent of the fiscal year of the city in which the seaway
port authority is located. The board of county commissioners of
any county in which any such city is located, is also hereby
authorized to appropriate for the use of such port authority,
and to include therefor in its levy for general revenue
purposes, such amount as it may deem proper; provided, that the
total amount permitted by law to be levied by any county for
general revenue purposes shall not be deemed increased by this
provision; the board of county commissioners in any county
entitled to appoint members of a seaway port authority, may
annually, upon receipt of a budget as specified above from such
port authority, in its discretion levy a tax sufficient to
produce a sum not exceeding $50,000 for the benefit of and for
expenditure by such port authority to defray the costs of its
current operations in the next ensuing fiscal year which levy
shall not be included in computing the amount of levies subject
to tax limitations under chapter 275 or any other provision of
law. The appropriation to a port authority of moneys derived
from any of the county taxes herein authorized shall not be
subject to any budgetary law applicable to said county. Any
amounts so appropriated or levied by the county shall be paid
over by the county treasurer to the port authority for
expenditure by it as herein provided, at such times and in such
manner as the county board may provide. When any city entitled
to appoint members of a seaway port authority has secured the
approval of two-thirds of the members of the city council of
such city to issue its general obligation bonds, the proceeds of
which are to be appropriated to such seaway port authority, the
board of county commissioners of any county entitled to appoint
members of such seaway port authority may by five-sevenths vote
issue general obligation bonds of the county in an amount not to
exceed $4,000,000, and appropriate the proceeds thereof to be
used by such port authority for any or all of the purposes
specified in section 458.15, if the county board by resolution
determines that the conservation, development, reclamation,
protection and improvement of lands under the jurisdiction of
such port authority and the construction of port facilities
thereon will promote the public welfare of the county at large
and the economic well-being of its people, industries and
commerce, and is an essential governmental function of the
county, and can best be performed through the medium of such
port authority. Any such bonds shall be issued, sold and secured
as provided in sections 475.60 to 475.753; an election shall not
be necessary to the validity of such bonds.
Subd. 2. [REVERSE REFERENDUM.] If a city proposes to
increase the levy of the city for port authority purposes
pursuant to subdivision 1, it shall pass a resolution stating
the amount by which the levy limit base is proposed to be
increased. Thereafter, the resolution shall be published for
two successive weeks in the official newspaper of the city or if
there is no official newspaper, in a newspaper of general
circulation in the city, together with a notice fixing a date
for a public hearing on the proposed increase. The hearing
shall be held not less than two weeks nor more than four weeks
after the first publication of the resolution. Following the
public hearing, the city may determine to take no further action
or, in the alternative, adopt a resolution authorizing the
increase as originally proposed or approving an increase in the
lesser amount it determines. The resolution authorizing an
increase shall be published in the official newspaper of the
city if there is no official newspaper, in a newspaper of
general circulation in the city. If within 30 days thereafter a
petition signed by voters equal in number to five percent of the
votes cast in the city in the last general election requesting a
referendum on the proposed resolution is filed with the clerk
the resolution shall not be effective until it has been
submitted to the voters at a general or special election and a
majority of votes cast on the question of approving the
resolution are in the affirmative. The commissioner of revenue
shall prepare a suggested form of question to be presented at
the referendum. The referendum must be held at a special or
general election prior to October 1 of the year for which the
levy increase is proposed.
Sec. 2. Laws 1979, chapter 189, section 2, is amended to
read:
Sec. 2. For the purposes of this act, "residential
customer" means a customer classified by the public utility as a
residential heating or residential non-heating customer of the
public utility within the city of St. Paul and "gross operating
revenue" means all sums received by the public utility from the
sale of gas, hot water heating or electricity, excluding any
amounts received which result from a surcharge on the public
utility's rate schedule for the purpose of collecting the
franchise fee.
Sec. 3. [RAMSEY-WASHINGTON METRO WATERSHED DISTRICT; WATER
MAINTENANCE AND REPAIR FUND; CREATION OF FUNDS; TAX LEVY.]
The Ramsey-Washington metro watershed district may, in
addition to its other powers, establish a water maintenance and
repair fund which shall be kept distinct from all other funds of
the district. The fund shall be maintained by an annual ad
valorem tax levy on each dollar of assessed valuation of all
taxable property within the Ramsey-Washington metro watershed
district sufficient to raise not more than $30,000 in 1985, and
in subsequent years not more than $15,000. The board of
managers of the district shall adopt each year, by resolution,
the amount to be raised by mill levy for the fund for the
ensuing year, which shall be levied, collected, and distributed
to the district in accordance with Minnesota Statutes, section
112.611, in addition to any other money levied, collected, and
distributed to the district.
Sec. 4. [PURPOSE OF FUND.]
The water maintenance and repair fund may be used for any
maintenance, repair, restoration, upkeep, and rehabilitation of
any public ditch, drain, dams, sewer, river, stream,
watercourse, and waterbody, natural or artificial, lying wholly
or partly within the district. Works performed in accordance
with the purposes of sections 3 to 5 may include, but are not
limited to, stream and watercourse clean up and maintenance and
stream and watercourse bank and bed repair and stabilization.
Sec. 5. [WORKS; MUNICIPALITIES.]
Any works to be undertaken and paid for from the water
maintenance and repair fund shall be ordered by the board of
managers of the district. Before the commencement of any works
ordered, any affected municipality shall be notified in writing
by the district about the proposed works and estimated costs.
Within 30 days following receipt of the written notice, any
affected municipality may notify the district in writing that it
will perform the works ordered by the district. If the
municipality undertakes the works, it shall be paid as
previously prescribed by the district from the water maintenance
and repair fund. If any affected municipality fails to perform
any works ordered by the board of managers, the district may
have the works performed in any other manner authorized by law.
Sec. 6. [CROFT HISTORICAL PARK TAX.]
The Croft Historical Park Board, hereafter referred to in
sections 6 and 7 as the "board," is created. The Croft
Historical Park District, hereafter referred to in sections 6
and 7 as the "district", consists of the cities of Crosby,
Cuyuna, Deerwood, Ironton, Riverton, and Trommald and the towns
of Deerwood, Irondale, Rabbit Lake and Wolford. All of the
cities and towns are located in Crow Wing county. The board
shall consist of three members who are residents of the
district, each of whom shall be elected at large in the
district. The county board shall make arrangements for the
holding of a special election within the district. For the
initial election, the terms of the board members shall be as
follows: one two year term, one three year term and one four
year term. Thereafter, each board member shall be elected for a
four year term.
If approved by referendum as provided in section 7, the
board may levy a tax not to exceed 1.0 mills on the taxable
value of all real and personal property located within the
district. The amount of tax levied is in addition to all other
taxes on the property and must be disregarded in the calculation
of all other mill rate or per capita levy limitations imposed by
law or charter upon the cities or towns located within the
district. The tax shall be collected by the Crow Wing county
treasurer and paid directly to the board. The proceeds of the
tax levy shall be used by the board in conjunction with money
received from the Iron Range Resources and Rehabilitation Board
for operation of the Croft Historical Park.
Sec. 7. [REFERENDUM.]
The board shall make special arrangements with the Crow
Wing county auditor for a referendum. The board shall submit
the proposed levy to the eligible voters in the district at a
general or special election. The date of the referendum shall
be determined by the board. The question submitted shall read
substantially as follows:
"Shall the Croft Historical Park Board be allowed to impose
an annual levy of up to one mill upon all taxable property
located within the boundaries of the district?
Yes .......
No ........"
If a majority of those voting on the question approve the
proposed levy, the board may certify a levy to the Crow Wing
county auditor as soon as practical following the referendum and
in each subsequent year thereafter.
Sec. 8. [CLOQUET; PUBLIC TRANSPORTATION.]
Upon conditions mutually agreed, the city of Cloquet may
contract with a privately owned public transportation system to
provide transportation services to the people of the city. The
city may disburse money to discharge the terms of the contract.
The city may annually levy a property tax not to exceed one mill
for the purpose of discharging the contract obligations. The
amount of tax levied is in addition to all others permitted by
law and must be disregarded in the calculation of statutory or
other limitations on property tax levies.
Sec. 9. [ST. LOUIS COUNTY LAND CONVEYANCE.]
The state of Minnesota shall convey to Laila A. Furchner,
Box 161, Makinen, Minnesota 55763, land in St. Louis County
which forfeited for unpaid property taxes on February 4, 1980,
and which is identified by parcel code number 676-10-2220 and
legal description SE 1/4 or NW 1/4, Section 12, Township 56,
Range 16, (Government Lot 3). The attorney general shall
prepare an appropriate instrument of conveyance. The price for
the land shall be the same as that provided for a redemption
under Minnesota Statutes, section 281.02.
Sec. 10. [CITY OF BREEZY POINT; LEVY LIMIT INCREASE.]
Subdivision 1. [AUTHORIZATION.] The limitation imposed
upon the levy of the city of Breezy Point by Minnesota Statutes,
section 275.11, is increased by $125,000 for taxes levied in
1984 and thereafter.
Subd. 2. [REVERSE REFERENDUM.] If the Breezy Point city
council proposes to increase the levy limit base of the city
pursuant to subdivision 1, it shall pass a resolution stating
the amount by which the levy limit base is proposed to be
increased. Thereafter, the resolution shall be published for
two successive weeks in the official newspaper of the city or if
there is no official newspaper, in a newspaper of general
circulation in the city, together with a notice fixing a date
for a public hearing on the proposed increase. The hearing
shall be held not less than two weeks nor more than four weeks
after the first publication of the resolution. Following the
public hearing, the city may determine to take no further action
or, in the alternative, adopt a resolution authorizing the
increase as originally proposed or approving an increase in the
lesser amount it determines. The resolution authorizing an
increase shall be published in the official newspaper of the
city or if there is no official newspaper, in a newspaper of
general circulation in the city. If within 30 days thereafter a
petition signed by voters equal in number to five percent of the
votes cast in the city in the last general election requesting a
referendum on the proposed resolution is filed with the clerk
the resolution shall not be effective until it has been
submitted to the voters at a general or special election and a
majority of votes cast on the question of approving the
resolution are in the affirmative. The commissioner of revenue
shall prepare a suggested form of question to be presented at
the referendum. The referendum must be held at a special or
general election prior to October 1, 1984.
Sec. 11. [APPLICABILITY.]
On its effective date, section 10 applies to the city of
Breezy Point.
Sec. 12. [CITY OF OAKDALE; LEVY LIMIT INCREASE.]
The limitation imposed upon the levy of the city of Oakdale
by Minnesota Statutes, sections 275.50 to 275.56 is increased by
$100,000 for taxes levied in 1984, 1985, and 1986. This amount
is not subject to the penalty provisions of section 275.51,
subdivision 4. In computing the levy limit base for taxes
levied in 1987, $100,000 shall be subtracted from the adjusted
levy limit base for taxes levied in 1986.
Sec. 13. [REVERSE REFERENDUM.]
If the Oakdale city council proposes to increase the levy
limit base of the city pursuant to section 12, it shall pass a
resolution stating the amount by which the levy limit base is
proposed to be increased. Thereafter, the resolution shall be
published for two successive weeks in the official newspaper of
the city or if there is no official newspaper, in a newspaper of
general circulation in the city, together with a notice fixing a
date for a public hearing on the proposed increase. The hearing
shall be held not less than two weeks nor more than four weeks
after the first publication of the resolution. Following the
public hearing, the city may determine to take no further action
or, in the alternative, adopt a resolution authorizing the
increase as originally proposed or approving an increase in the
lesser amount it determines. The resolution authorizing an
increase shall be published in the official newspaper of the
city or if there is no official newspaper, in a newspaper of
general circulation in the city. If within 30 days thereafter a
petition signed by voters equal in number to ten percent of the
votes cast in the city in the last general election requesting a
referendum on the proposed resolution is filed with the clerk
the resolution shall not be effective until it has been
submitted to the voters at a general or special election and a
majority of votes cast on the question of approving the
resolution are in the affirmative. The commissioner of revenue
shall prepare a suggested form of question to be presented at
the referendum. The referendum must be held at a special or
general election prior to October 1, 1984.
Sec. 14. [APPLICABILITY.]
On its effective date, sections 12 and 13 apply to the city
of Oakdale.
Sec. 15. [MORRISON COUNTY LAND CONVEYANCE.]
The state of Minnesota shall convey to Richard T. Peterson,
Route #6, Little Falls, 56345, any land in Morrison County owned
by him in 1977 which became forfeited for unpaid property taxes
after 1977. The attorney general shall prepare appropriate
instruments of conveyance with a precise description of all land
subject to this section. The price for the land shall be the
same as that provided for a redemption under Minnesota Statutes,
section 281.02.
Sec. 16. [EFFECTIVE DATE.]
Section 2 is effective for sales after June 30, 1984.
Sections 3 to 5 are effective the day after compliance with
Minnesota Statutes, section 645.021, subdivision 3, by the board
of managers of the Ramsey-Washington metro watershed district.
Sections 6 and 7 are effective May 1, 1984. Section 8 is
effective upon the day after the filing of its approval by the
governing body of the city of Cloquet in accordance with
Minnesota Statutes, section 645.021, subdivision 3. Pursuant to
Minnesota Statutes, section 645.023, subdivision 1, clause (a),
sections 10 and 11 are effective without local approval the day
after final enactment. Pursuant to Minnesota Statutes, section
645.023, subdivision 1, clause (a), sections 12, 13, and 14 are
effective without local approval the day after final enactment.
ARTICLE 14
MISCELLANEOUS
Section 1. [16A.124] [PROMPT PAYMENT OF STATE AGENCY BILLS
REQUIRED.]
Subdivision 1. [DEFINITIONS.] For the purposes of section
1, the following terms have the meanings here given them.
(a) "Commissioner" means the commissioner of finance.
(b) "State agency" has the meaning assigned to it in
section 16.011.
Subd. 2. [COMMISSIONER SUPERVISION.] The commissioner
shall exercise constant supervision over state agencies to
insure the prompt payment of vendor obligations.
Subd. 3. [PAYMENT REQUIRED.] State agencies must pay each
valid vendor obligation so that the vendor receives payment
within the vendor's early payment discount period. If there is
no early payment discount period, the state agency must pay the
vendor within 30 days following the receipt of the invoice for
the completed delivery of the product or service.
Subd. 4. [INVOICE ERRORS.] If an invoice is incorrect,
defective, or otherwise improper, the agency must notify the
vendor within ten days of discovering the error. Upon receiving
a corrected invoice, the agency must pay the bill within the
time limitation contained in subdivision 3.
Subd. 5. [PAYMENT OF INTEREST ON LATE PAYMENTS REQUIRED.]
(a) A state agency shall pay interest to a vendor for undisputed
billings when the agency has not paid the billing within 30 days
following receipt of the invoice, merchandise, or service
whichever is later. A negotiated contract or agreement between
a vendor and a state agency which requires an audit by the state
agency prior to acceptance and payment of the vendor's invoice
shall not be considered past due until 30 days after the
completion of the audit by the state agency. Before any
interest payment is made, the vendor must invoice the state
agency for such interest.
(b) The rate of interest paid by the agency on undisputed
bills not paid within 30 days shall be one percent per month or
any part thereof.
(c) All interest penalties and collection costs must be
paid from the agency's current operating budget. No agency may
seek to increase its appropriation for the purpose of obtaining
funds to pay interest penalties or collection costs.
(d) Any vendor who prevails in a civil action to collect
interest penalties from a state agency shall be awarded its
costs and disbursements, including attorney's fees, incurred in
bringing the actions.
(e) No interest penalties may accrue against an agency that
delays payment of a bill due to a disagreement with the vendor;
provided, that the dispute must be settled within 30 days after
the bill became overdue. Upon the resolution of the dispute,
the agency must pay the vendor accrued interest on all proper
invoices for which payment was not received within the
applicable time limit contained in subdivision 3.
(f) The minimum monthly interest penalty payment that a
state agency shall pay a vendor for the unpaid balance for any
one overdue bill equal to or in excess of $100 is $10. For
unpaid balances of less than $100, the state agency shall pay
the actual penalty due to the vendor.
Subd. 6. [AUTHORITY TO REDUCE AGENCY ALLOTMENT.] The
commissioner shall have the authority to reduce the allotment of
any state agency by the amount of any vendor obligations that
are paid later than 30 days following the receipt of the invoice
for completed delivery of the products or services.
Subd. 7. [REPORT TO LEGISLATURE.] The commissioner shall
report to the legislature each year summarizing the state's
payment record for the preceding year. The report shall include
the number and dollar amount of late payments made by each
agency, the amount of interest penalties and collection costs
paid, and the specific steps being taken to reduce the incidence
of late payments in the future.
Subd. 8. [APPLICABILITY.] Subdivisions 1 to 7 apply to all
agency purchases, leases, rentals, and contracts for services,
including construction and remodeling contracts.
Sec. 2. Minnesota Statutes 1983 Supplement, section
240.18, is amended to read:
240.18 [BREEDERS FUND.]
The commission shall establish a Minnesota breeders fund
with the money paid to it under section 240.15, subdivision 1.
The commission, after paying the current costs of administering
the fund, shall distribute the available net proceeds as follows:
(1) Twenty percent of the remaining available money in the
fund must be expended as grants for equine research and related
education at public institutions of post-secondary learning
within the state.
(2) After deducting the amount for (1), the balance of the
fund available proceeds shall be apportioned into categories
corresponding with the various breeds of horses which raced are
racing at licensed Minnesota racetracks in the previous year, in
proportion to each category's contribution to the fund. The
available funds in each category may be expended by the
commission to:
(a) supplement purses for races held exclusively for
Minnesota-bred, Minnesota-foaled or Minnesota-owned horses until
January 1, 1986 1988, and for Minnesota-bred and
Minnesota-foaled horses after that date;
(b) pay breeders or owners awards to the breeders or owners
of Minnesota-bred horses which win money at licensed racetracks
in the state; and
(c) provide other financial incentives to encourage the
horse breeding industry in Minnesota.
The commission shall adopt rules governing the distribution
of the fund. The commission may establish advisory committees
to advise it on the distribution of money under this section,
provided that the members of an advisory committee shall serve
without compensation.
Sec. 3. Minnesota Statutes 1982, section 270A.03,
subdivision 5, is amended to read:
Subd. 5. "Debt" means a legal obligation of a natural
person to pay a fixed and certain amount of money, which equals
or exceeds $25 and which is due and payable to a claimant
agency. The term includes criminal fines imposed under section
609.10. A debt may arise under a contractual or statutory
obligation, a court order, or other legal obligation, but need
not have been reduced to judgment. A debt does not include (1)
any legal obligation of a current recipient of assistance which
is based on overpayment of an assistance grant, or (2) any legal
obligation to pay a claimant agency for medical care, including
hospitalization if the debtor qualified for a low income credit
equal to tax liability pursuant to section 290.06, subdivision
3d, clause (1), at the time when the medical care was rendered.
Sec. 4. Minnesota Statutes 1982, section 270A.04,
subdivision 2, is amended to read:
Subd. 2. Any debt owed to a claimant agency shall be
submitted by the agency for collection under the procedure
established by sections 270A.01 to 270A.12 unless (a) an
alternative means of collection is pending and believed to be
adequate, (b) the collection attempt would result in a loss of
federal funds, or (c) the agency is unable to supply the
department with the necessary identifying information required
by subdivision 3 or rules promulgated by the commissioner, or
(d) the debt is barred by section 541.05.
Sec. 5. Minnesota Statutes 1982, section 270A.08,
subdivision 1, is amended to read:
Subdivision 1. Not later than five days after the claimant
agency has sent notification to the department pursuant to
section 270A.07, subdivision 1, the claimant agency shall send a
written notification to the debtor asserting the right of the
claimant agency to the refund or any part thereof. If the
notice is returned to the claimant agency as undeliverable, or
the claimant agency has reason to believe the debtor did not
receive the notice, the claimant agency shall obtain the current
address of the debtor from the commissioner and resend the
corrected notice.
Sec. 6. Minnesota Statutes 1982, section 270A.08,
subdivision 2, is amended to read:
Subd. 2. (a) This written notice shall clearly and with
specificity set forth the basis for the claim to the refund
including the name of the benefit program involved if the debt
arises from a public assistance grant and the dates on which the
debt was incurred and, further, shall advise the debtor of the
claimant agency's intention to request set-off of the refund
against the debt.
(b) The notice will also advise the debtor of his right to
contest the validity of the claim at a hearing. The debtor must
assert this right by written request to the claimant agency,
which request the agency must receive within 45 days of the
mailing date of the original notice or of the corrected notice,
as required by subdivision 1. If the debtor has not received
the notice, the 45 days shall not commence until the debtor has
received actual notice. The debtor shall have the burden of
showing no notice and shall be entitled to a hearing on the
issue of notice as well as on the merits.
Sec. 7. Minnesota Statutes 1982, section 287.05, is
amended by adding a subdivision to read:
Subd. 3. When a mortgage secures a revolving line of
credit under which advances, payments, and readvances may be
made from time to time, the tax imposed under subdivision 1
shall be paid on the maximum amount of the line of credit which
may be secured at any one time, as expressed in the mortgage,
regardless of the time or amount of advances, payments, or
readvances.
Sec. 8. Minnesota Statutes 1982, section 287.05, is
amended by adding a subdivision to read:
Subd. 4. No tax under subdivision 1 shall be paid on the
indeterminate amount which may be advanced by the mortgagee in
protection of the mortgaged premises or the mortgage, including
taxes, assessments, charges, claims, fines, impositions,
insurance premiums, amounts due upon prior or superior mortgages
and other prior or superior liens, encumbrances and interests,
and legal expenses and attorneys' fees.
Sec. 9. Minnesota Statutes 1982, section 287.05, is
amended by adding a subdivision to read:
Subd. 5. When a mortgage secures an indeterminate amount
other than those described in subdivision 3 or 4, no tax shall
be paid at the time the mortgage is recorded or registered, but
the tax must be paid at the time of recording or filing an
affidavit stating the amount and time of the actual advance.
Sec. 10. Minnesota Statutes 1983 Supplement, section
296.14, subdivision 4, is amended to read:
Subd. 4. [PAYMENT AND TRANSFER OF TAX ON GASOLINE SOLD FOR
STORAGE IN ON-FARM BULK STORAGE AND ETHYL ALCOHOL FOR PERSONAL
USE.] Notwithstanding the provisions of this section, the
producer of ethyl alcohol which is produced for personal use and
not for sale in the usual course of business and a farmer who
uses gasoline on which a tax has not been paid shall report and
pay the tax on all ethyl alcohol or gasoline delivered into the
supply tank of a licensed motor vehicle during the preceding
calendar year. The tax shall be reported and paid together with
the income tax return of any refund claim filed by the taxpayer
under section 296.18. If no refund claim is filed, the tax
shall be reported and paid annually by March 15 or more
frequently, as the commissioner may prescribe. The commissioner
of revenue shall transfer the amount collected in each calendar
year to the highway user tax distribution fund by March 30 of
the following taxable year. Any producer, qualifying under this
subdivision, shall be exempt from the licensing requirements
contained in section 296.01, subdivision 1.
Sec. 11. Minnesota Statutes 1983 Supplement, section
296.18, subdivision 1, is amended to read:
Subdivision 1. [GASOLINE OR SPECIAL FUEL USED IN OTHER
THAN MOTOR VEHICLES.] Any person who shall buy and use gasoline
for any a qualifying purpose other than use in motor vehicles,
snowmobiles, or motorboats, or special fuel for any a qualifying
purpose other than use in licensed motor vehicles, and who shall
have paid the Minnesota excise tax directly or indirectly
through the amount of the tax being included in the price of the
gasoline or special fuel, or otherwise, shall be eligible to
receive the credit provided in section 290.06, subdivision 13,
in reimbursed and repaid the amount of the tax paid by him upon
filing with the commissioner a signed claim in writing in the
form and containing the information the commissioner shall
require and accompanied by the original invoice thereof. The
taxpayer claiming this credit shall include with his income tax
return information including By signing any such claim which is
false or fraudulent, the applicant shall be subject to the
penalties provided in this section for knowingly making a false
claim. The claim shall set forth the total amount of the
gasoline so purchased and used by him other than in motor
vehicles, or special fuel so purchased and used by him other
than in licensed motor vehicles, and shall state when and for
what purpose it was used. When a claim contains an error in
computation or preparation, the commissioner is authorized to
adjust the claim in accordance with the evidence shown on the
claim or other information available to him. If the
commissioner is satisfied that the claimant is entitled to the
payments, he shall approve the claim and transmit it to the
commissioner of finance. No repayment shall be made unless the
claim and invoice shall be filed with the commissioner within
one year from the date of the purchase. The postmark on the
envelope in which the claim is mailed shall determine the date
of filing. The words "gasoline" or "special fuel" as used in
this subdivision do not include aviation gasoline or special
fuel for aircraft. Gasoline or special fuel bought and used for
a "qualifying purpose" means:
(1) Gasoline or special fuel used in carrying on a trade or
business, used on a farm situated in Minnesota, and used for a
farming purpose. "Farm" and "farming purpose" have the meanings
given them in section 6420(c)(2), (3), and (4) of the Internal
Revenue Code of 1954, as amended through December 31, 1983.
(2) Gasoline or special fuel used for off-highway business
use. "Off-highway business use" means any use by a person in
that person's trade, business, or activity for the production of
income. "Off-highway business use" does not include use as a
fuel in a motor vehicle which, at the time of use, is registered
or is required to be registered for highway use under the laws
of any state or foreign country.
Sec. 12. Minnesota Statutes 1982, section 296.18,
subdivision 3, is amended to read:
Subd. 3. [PENALTIES FOR FILING FALSE CLAIMS.] Every person
who shall make any false statement in any claim or invoice filed
with the commissioner, or knowingly file with the commissioner
any claim or invoice containing any false statement or collect
or cause to be paid to him or to any other person a refund
without being entitled thereto, when acting pursuant to the
provisions of subdivision 1 or 2, clause 3, shall forfeit the
full amount of the claim and be guilty of a misdemeanor. Every
person who is convicted under the provisions of this subdivision
shall be prohibited from filing with the commissioner any claim
for refund upon gasoline purchased within six months after such
conviction.
Sec. 13. Minnesota Statutes 1982, section 296.18,
subdivision 8, is amended to read:
Subd. 8. [APPROPRIATION.] There is hereby appropriated to
the persons entitled to such refund under this section, from the
fund or account in the state treasury to which the money was
credited, an amount sufficient to make the refund and payment.
There is annually appropriated from the highway user tax
distribution fund to the general fund the amount required to
make the refunds required to be paid as income tax credits
pursuant to sections 290.06, subdivision 13 and 296.18,
subdivision 1.
Sec. 14. Minnesota Statutes 1982, section 341.05, is
amended to read:
341.05 [DUTIES.]
Subdivision 1. The board of boxing shall have charge and
supervision of all boxing and sparring exhibitions held in the
state and have power:
(1) To promulgate rules governing the conduct of boxing and
sparring exhibitions and the time and place thereof;
(2) To issue licenses to individuals or organizations
desiring to promote or conduct boxing or sparring exhibitions,
and to suspend or revoke the licenses at its pleasure; every
application for a license shall designate the territory in which
the individual or organization intends to operate, and the
license granted shall entitle the licensee to conduct the
exhibitions in that territory and in no other.
The commissioner of revenue shall collect five percent of
the gross receipts from admission to every boxing and sparring
exhibition other than an amateur boxing and sparring exhibition
held within the state, and five percent of the gross receipts
from the lease or sale of radio, motion picture and television
rights therein.
All complimentary tickets for a boxing and sparring
exhibition other than an amateur boxing and sparring exhibition
presented at any entrance gate shall likewise be assessed for
the tax herein provided five percent of the value thereof. All
moneys so collected shall be paid into the state treasury.
Subd. 2. The board of boxing shall issue a license to a
person or organization holding, showing, or exhibiting a
simultaneous telecast of any live, current, or spontaneous
boxing or sparring match, exhibition, or performance on a closed
circuit telecast or subscription television program viewed
within the state, whether originating in this state or
elsewhere, and for which a charge is made. Each such person or
organization shall apply for such a license in advance of each
showing and shall within 24 hours after the termination of such
showing furnish the commissioner of revenue a written report,
duly verified by an authorized person, showing the number of
tickets sold for such showing, the amount of the gross proceeds
thereof, and such other matters as the commissioner of revenue
may prescribe; and shall also, within 24 hours after the
termination of such showing, pay to the commissioner of revenue
five percent of the gross receipts from the sale of tickets of
admission or moneys received from subscription for the showing
or exhibiting of said boxing or sparring match, exhibition, or
performance. If the boxing or sparring match, exhibition, or
performance is wholly amateur no payment is due.
Whoever violates the provisions of this subdivision is
guilty of a misdemeanor and may be punished therefor as provided
by law. The penalty herein provided is in addition to any other
penalty for violation of this subdivision as may be otherwise
fixed in this chapter.
Sec. 15. Minnesota Statutes 1982, section 473.595,
subdivision 1, is amended to read:
Subdivision 1. [ADMISSION TAX.] Effective January 1, 1978,
the commission shall by resolution impose a three percent
admission tax upon the granting, sale, or distribution, by any
private or public person, association, or corporation, of the
privilege of admission to activities; except for those
activities sponsored at the indoor public assembly facility at
the metropolitan sports area known as the metropolitan sports
center. Commencing with the operation of sports facilities
constructed or remodeled by the commission pursuant to sections
473.551 to 473.595, the commission shall impose an additional
seven percent admission tax upon activities conducted at such
sports facilities. Effective January 1, 1978, no other tax,
except the taxes imposed by chapter 297A, may be levied by any
other unit of government upon any such sale or distribution.
The admission tax shall be stated and charged separately from
the sales price so far as practicable and shall be collected by
the grantor, seller, or distributor from the person admitted and
shall be a debt from that person to the grantor, seller, or
distributor, and the tax required to be collected shall
constitute a debt owed by the grantor, seller, or distributor to
the commission, which shall be recoverable at law in the same
manner as other debts. Every person granting, selling, or
distributing tickets for such admissions may be required, as
provided in resolutions of the commission, to secure a permit,
to file returns, to deposit security for the payment of the tax,
and to pay such penalties for nonpayment and interest on late
payments, as shall be deemed necessary or expedient to assure
the prompt and uniform collection of the tax.
Notwithstanding any other provisions of this subdivision,
the imposition of an admission tax upon a national superbowl
football game conducted at the commission's facilities is
discretionary with the commission.
Sec. 16. [507.325] [MORTGAGE SECURING REVOLVING LINE OF
CREDIT; NOTICE.]
A mortgage securing a revolving line of credit under which
advances, payments, and readvances may be made from time to
time, and which states the maximum amount of the line of credit
which may be secured at any one time, is effective as notice to
parties from the time the mortgage is recorded as to all
advances and readvances secured thereby, regardless of the time
or amount of advances, payments, or readvances and whether or
not the advances or readvances are obligatory.
Sec. 17. [508.555] [MORTGAGE SECURING REVOLVING LINE OF
CREDIT; NOTICE.]
A mortgage securing a revolving line of credit under which
advances, payments, and readvances may be made from time to
time, and which states the maximum amount of the line of credit
which may be secured at any one time, is effective as notice to
parties from the time the mortgage is filed and registered as to
all advances and readvances secured thereby, regardless of the
time or amount of advances, payments, or readvances and whether
or not the advances or readvances are obligatory.
Sec. 18. [APPROPRIATION.]
There is appropriated from the general fund to the finance
department for fiscal year 1985 the sum of $240,000 for the
operating expenses of the tax study commission. The approved
complement of the tax study commission for fiscal year 1985 is
seven. This appropriation is available until February 28, 1985.
Sec. 19. H.F. No. 1393, article 9, section 9, if enacted
during the 1984 regular session, is amended to read:
Sec. 9. [EDUCATION AIDS INCREASE ACCOUNT.]
Subdivision 1. [ESTABLISHMENT.] There is established an
education aids increase account in the general fund of the state
treasury for the deposit of funds to insure adequate funding for
increases in aids to school districts for the biennium beginning
July 1, 1985.
Subd. 2. [INITIAL TRANSFER.] The commissioner of finance
shall transfer $23,000,000 $21,700,000 to the education aids
increase account on July 1, 1984.
Subd. 3. [CONTINGENT TRANSFERS.] If forecasts of general
fund revenues and expenditures prepared by the commissioner of
finance pursuant to chapter 16A prior to December 1, 1984,
indicate a projected general fund balance for the biennium
ending June 30, 1985, the commissioner shall transfer the amount
of the balance to the education aids increase account; however,
in no case shall the cumulative total of all transfers according
to this subdivision exceed $27,000,000 $28,300,000. Transfers
to the education aids increase account shall remain in the
account until expended.
Subd. 4. [EXPIRATION OF ACCOUNT.] The education aids
increase account shall expire on June 30, 1987. Any unexpended
moneys in the education aids increase account on June 30, 1987,
shall be transferred to the general fund.
Sec. 20. [REPEALER.]
(a) Minnesota Statutes 1982, section 290.06, subdivision
13, is repealed.
(b) Minnesota Statutes 1982, section 270.051, is repealed.
Sec. 21. [EFFECTIVE DATE.]
Section 1 is effective July 1, 1984, and applies to all
payments due on or after that date. Section 3 is effective for
amounts remitted or transferred to a claimant agency after the
day of final enactment. Sections 10 to 13 and 20, paragraph
(a), are effective for taxable years beginning after December
31, 1984. Sections 14 and 20, paragraph (b), are effective July
1, 1984. Section 19 is effective the day after final enactment.
Approved April 25, 1984
Official Publication of the State of Minnesota
Revisor of Statutes