1.1                          A bill for an act 
  1.2             relating to finance; providing for school funding; 
  1.3             changing property class rates; expanding the property 
  1.4             tax refund program; providing a property tax refund to 
  1.5             certain businesses; providing for truth in budgeting; 
  1.6             modifying aids to local governments; exempting sales 
  1.7             of certain construction materials; imposing a future 
  1.8             schools facilities fee; changing the calculation of 
  1.9             fiscal disparities; requiring a study; appropriating 
  1.10            money; amending Minnesota Statutes 1996, sections 
  1.11            16A.103, subdivisions 1 and 2; 122.247, subdivision 3; 
  1.12            122.45, subdivision 3a; 122.531, subdivisions 4a and 
  1.13            9; 122.533; 122.535, subdivision 6; 124.17, 
  1.14            subdivision 1d; 124.239, subdivision 5; 124.2601, 
  1.15            subdivisions 2 and 3; 124.2711, subdivisions 1 and 5; 
  1.16            124.2713, subdivision 1; 124.2714; 124.2715, 
  1.17            subdivision 1; 124.2716, subdivision 2; 124.2725, 
  1.18            subdivisions 2, 6, 13, and 14; 124.2726, subdivisions 
  1.19            1 and 3; 124.2727, subdivision 6a; 124.312, 
  1.20            subdivision 5; 124.313; 124.4945; 124.83, subdivision 
  1.21            3; 124.91, subdivisions 1, 2, 5, and 7; 124.912, 
  1.22            subdivisions 1, 3, 6, and 7; 124.914, subdivisions 1, 
  1.23            2, 3, and 4; 124.916, subdivisions 1, 2, 3, and 4; 
  1.24            124.918, subdivision 8; 124A.22, subdivision 1; 
  1.25            124A.23, subdivision 1; 124A.292, subdivision 2; 
  1.26            273.13, subdivisions 24, 25, and by adding a 
  1.27            subdivision; 273.1398, subdivisions 1, 2, 3, and 8; 
  1.28            275.065, subdivisions 3, 5a, 6, and by adding a 
  1.29            subdivision; 275.08, subdivision 1b; 276.04, 
  1.30            subdivision 2; 276A.04; 276A.05, subdivisions 1 and 5; 
  1.31            276A.06, subdivisions 2, 3, and 5; 290A.04, 
  1.32            subdivisions 2 and 6; 297A.15, by adding a 
  1.33            subdivision; 297A.25, by adding a subdivision; 298.28, 
  1.34            subdivision 5, and by adding subdivisions; 469.177, 
  1.35            subdivisions 1a and 3; 473F.06; 473F.07, subdivisions 
  1.36            1 and 5; 473F.08, subdivisions 2, 3, and 5; 477A.011, 
  1.37            subdivisions 20, 35, 37, and by adding subdivisions; 
  1.38            477A.013, subdivisions 1, 8, and 9; 477A.014, by 
  1.39            adding a subdivision; and 477A.03, subdivisions 2 and 
  1.40            3; proposing coding for new law in Minnesota Statutes, 
  1.41            chapters 281A; and 477A; proposing coding for new law 
  1.42            as Minnesota Statutes, chapter 290B; repealing 
  1.43            Minnesota Statutes 1996, sections 124.2134; 124.225, 
  1.44            subdivisions 1, 3a, 7a, 7b, 7d, 7e, 7f, 8a, 8k, 8l, 
  1.45            8m, 9, 10, 13, 14, 15, 16, and 17; 124.226; 124.2442; 
  1.46            124.2601, subdivisions 4, 5, and 6; 124.2711, 
  2.1             subdivisions 2a and 3; 124.2713, subdivisions 6, 6a, 
  2.2             6b, and 7; 124.2715, subdivisions 2 and 3; 124.2716, 
  2.3             subdivisions 3 and 4; 124.2725, subdivisions 3, 4, 5, 
  2.4             and 7; 124.2727, subdivisions 6b, 6c, and 9; 124.314, 
  2.5             subdivision 2; 124.321; 124.91, subdivision 4; 
  2.6             124.912, subdivision 2; 124A.22, subdivisions 4a, 4b, 
  2.7             8a, 8b, 13d, and 13e; 124A.23, subdivisions 2, 3, and 
  2.8             4; 124A.26, subdivisions 2 and 3; 124A.292, 
  2.9             subdivisions 3 and 4; 124A.697; 124A.698; 124A.70, 
  2.10            subdivisions 1, 2, 3a, and 5; 124A.71; 124A.711; 
  2.11            124A.72; 124A.73; 273.13, subdivision 32; 276A.06, 
  2.12            subdivision 9; 473F.08, subdivision 8a; 477A.014, 
  2.13            subdivision 5; and 477A.05; Laws 1992, chapter 499, 
  2.14            article 7, section 31. 
  2.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.16                             ARTICLE 1
  2.17                           SCHOOL FUNDING
  2.18     Section 1.  Minnesota Statutes 1996, section 122.247, 
  2.19  subdivision 3, is amended to read: 
  2.20     Subd. 3.  [TRANSITIONAL LEVY REVENUE.] The board of the 
  2.21  combined district, or the boards of combining districts that 
  2.22  have received voter approval for the combination under section 
  2.23  122.243, subdivision 2, may levy are eligible for state aid to 
  2.24  pay for the expenses of negotiation, administrative expenses 
  2.25  directly related to the transition from cooperation to 
  2.26  combination, and the cost of necessary new athletic and music 
  2.27  uniforms.  The board or boards may levy this amount over three 
  2.28  or fewer years.  All expenses must be approved by the 
  2.29  commissioner of children, families, and learning.  The 
  2.30  commissioner may pay this state aid to a district over three or 
  2.31  fewer years.  
  2.32     Sec. 2.  Minnesota Statutes 1996, section 122.45, 
  2.33  subdivision 3a, is amended to read: 
  2.34     Subd. 3a.  (a) Liabilities of a dissolved district existing 
  2.35  at the time of the attachment other than bonded debt within the 
  2.36  purview of subdivision 2 shall be obligations of the 
  2.37  consolidated district after attachment (in the amount and kind 
  2.38  determined by the commissioner according to subdivision 1, where 
  2.39  a dissolved district is divided), for the payment of which the 
  2.40  consolidated district has a right to reimbursement by special 
  2.41  levy or levies state aid.  The amount of reimbursement will be 
  2.42  equal to the liabilities of the dissolved district for which the 
  3.1   consolidated district is obligated less the aggregate of the 
  3.2   following which has been or will be received by the consolidated 
  3.3   district at or after the time of attachment from or as a result 
  3.4   of the dissolution and attachment of the dissolved district: 
  3.5      (1) all taxes inuring to the consolidating district upon 
  3.6   levies made by the dissolved district; 
  3.7      (2) all cash, bank accounts, investments, and other current 
  3.8   assets; 
  3.9      (3) earned state aids of the dissolved districts; 
  3.10     (4) returns from the sale of property of the dissolved 
  3.11  district. 
  3.12     (b) The amount of such special levy so computed shall be 
  3.13  certified to the county auditor with the other tax requirements 
  3.14  of the consolidated district but separately stated and 
  3.15  identified.  The auditor shall add the amount of special levy so 
  3.16  certified to the school rate for the territory in the 
  3.17  consolidated district which came from the dissolved district and 
  3.18  include it in the levy on the taxable property in that 
  3.19  territory; provided, the county auditor shall not spread more of 
  3.20  the amount certified for special levy in any year than will 
  3.21  amount to 20 percent of the school levy without the special 
  3.22  levy, leaving the remaining part of the certified amount for 
  3.23  levy in successive years without further certification.  Any 
  3.24  amount of reimbursement to which it is entitled omitted by the 
  3.25  consolidated district from its initial certification for special 
  3.26  levy may be certified in a subsequent year for levy in the same 
  3.27  manner as the levy upon initial certification. 
  3.28     The levy authorized by this subdivision shall be in 
  3.29  addition to those otherwise authorized for a school district. 
  3.30  state aid shall be calculated by the commissioner and may be 
  3.31  reduced at the commissioner's discretion for any liabilities 
  3.32  that the commissioner determines are inappropriate for 
  3.33  reimbursement. 
  3.34     Sec. 3.  Minnesota Statutes 1996, section 122.531, 
  3.35  subdivision 4a, is amended to read: 
  3.36     Subd. 4a.  [REORGANIZATION OPERATING DEBT LEVIES REVENUE.] 
  4.1   (a) A district that receives revenue under section 124.2725 for 
  4.2   cooperation or has combined according to sections 122.241 to 
  4.3   122.248 may levy is eligible for state aid to eliminate 
  4.4   reorganization operating debt as defined in section 121.915, 
  4.5   clause (1).  The amount of the debt must be certified over a 
  4.6   period of five years.  After the effective date of combination 
  4.7   according to sections 122.241 to 122.248, the levy may be 
  4.8   certified and spread either 
  4.9      (1) only on the property in the combined district that 
  4.10  would have been taxable in the preexisting district that 
  4.11  incurred the debt, or 
  4.12     (2) on all of the taxable property in the combined district.
  4.13     (b) A district that has reorganized according to section 
  4.14  122.22 or 122.23 may levy is eligible for state aid to eliminate 
  4.15  reorganization operating debt as defined in section 121.915, 
  4.16  clause (2).  The amount of debt must be certified over a period 
  4.17  not to exceed five years and may be spread either 
  4.18     (1) only on the property in the newly created or enlarged 
  4.19  district which was taxable in the preexisting district that 
  4.20  incurred the debt, or 
  4.21     (2) on all of the taxable property in the newly created or 
  4.22  enlarged district. 
  4.23     (c) The commissioner shall calculate the amount of 
  4.24  reorganization operating debt for each qualifying school 
  4.25  district.  At the commissioner's discretion, the amount of the 
  4.26  state aid may be reduced for any school district.  The 
  4.27  commissioner shall establish a schedule for the payment of state 
  4.28  aid.  The schedule may extend for up to five years. 
  4.29     Sec. 4.  Minnesota Statutes 1996, section 122.531, 
  4.30  subdivision 9, is amended to read: 
  4.31     Subd. 9.  [LEVY REVENUE FOR SEVERANCE PAY OR EARLY 
  4.32  RETIREMENT INCENTIVES.] The school board of a newly created or 
  4.33  enlarged district to which part or all of a dissolved district 
  4.34  was attached according to section 122.22 may levy for is 
  4.35  eligible for state aid payments for the cost of severance pay or 
  4.36  early retirement incentives for licensed and nonlicensed 
  5.1   employees who resign or retire early as a result of the 
  5.2   dissolution or consolidation, if the commissioner of children, 
  5.3   families, and learning approves the incentives and the amount to 
  5.4   be levied.  The amount may be levied over a period of up to five 
  5.5   years and shall be spread in whole or in part on the property of 
  5.6   a preexisting district or the newly created or enlarged 
  5.7   district, as determined by the school board of the newly created 
  5.8   or enlarged district of the incentives.  The commissioner shall 
  5.9   establish a schedule for the payment of state aid.  The schedule 
  5.10  may extend for up to five years. 
  5.11     Sec. 5.  Minnesota Statutes 1996, section 122.533, is 
  5.12  amended to read: 
  5.13     122.533 [EXPENSES OF TRANSITION.] 
  5.14     The board of a district to which a dissolved district is 
  5.15  attached pursuant to section 122.22, may, is eligible for state 
  5.16  aid for the purpose of paying the expenses of negotiations and 
  5.17  other administrative expenses relating to the transition,.  The 
  5.18  board of the district may enter into agreements with banks or 
  5.19  any person to take its orders at any rate of interest not to 
  5.20  exceed seven percent per annum.  These orders shall be paid by 
  5.21  the treasurer of the district from district funds after the 
  5.22  effective date of the dissolution and attachment.  
  5.23  Notwithstanding the provisions of sections 124.226, 124.2716, 
  5.24  124.91, 124.912, 124.914, 124.916, and 124.918, the district may 
  5.25  is, in the year the dissolution and attachment becomes 
  5.26  effective, levy eligible for state aid in an amount equal to the 
  5.27  amount of the orders issued pursuant to this subdivision and the 
  5.28  interest on these orders.  No district shall issue orders for 
  5.29  funds or make a levy pursuant according to this subdivision 
  5.30  without the commissioner's approval of the expenses to be paid 
  5.31  with the funds from the orders and levy state aid. 
  5.32     Sec. 6.  Minnesota Statutes 1996, section 122.535, 
  5.33  subdivision 6, is amended to read: 
  5.34     Subd. 6.  [SEVERANCE PAY.] A district shall pay severance 
  5.35  pay to a teacher who is placed on unrequested leave of absence 
  5.36  by the district as a result of the agreement.  A teacher is 
  6.1   eligible under this subdivision if the teacher: 
  6.2      (1) is a teacher, as defined in section 125.12, subdivision 
  6.3   1, but not a superintendent; 
  6.4      (2) has a continuing contract with the district according 
  6.5   to section 125.12, subdivision 4. 
  6.6      The amount of severance pay shall be equal to the teacher's 
  6.7   salary for the school year during which the teacher was placed 
  6.8   on unrequested leave of absence minus the gross amount the 
  6.9   teacher was paid during the 12 months following the teacher's 
  6.10  termination of salary, by an entity whose teachers by statute or 
  6.11  rule must possess a valid Minnesota teaching license, and minus 
  6.12  the amount a teacher receives as severance or other similar pay 
  6.13  according to a contract with the district or district policy.  
  6.14  These entities include, but are not limited to, the school 
  6.15  district that placed the teacher on unrequested leave of 
  6.16  absence, another school district in Minnesota, an education 
  6.17  district, an intermediate school district, a SC, a board formed 
  6.18  under section 471.59, a state residential academy, the Lola and 
  6.19  Rudy Perpich Minnesota center for arts education, a vocational 
  6.20  center, or a special education cooperative.  These entities do 
  6.21  not include a school district in another state, a Minnesota 
  6.22  public post-secondary institution, or a state agency.  Only 
  6.23  amounts earned by the teacher as a substitute teacher or in a 
  6.24  position requiring a valid Minnesota teaching license shall be 
  6.25  subtracted.  A teacher may decline any offer of employment as a 
  6.26  teacher without loss of rights to severance pay. 
  6.27     To determine the amount of severance pay that is due for 
  6.28  the first six months following termination of the teacher's 
  6.29  salary, the district may require the teacher to provide 
  6.30  documented evidence of the teacher's employers and gross 
  6.31  earnings during that period.  The district shall pay the teacher 
  6.32  the amount of severance pay it determines to be due from the 
  6.33  proceeds of the levy state aid for this purpose.  To determine 
  6.34  the amount of severance pay that is due for the second six 
  6.35  months of the 12 months following the termination of the 
  6.36  teacher's salary, the district may require the teacher to 
  7.1   provide documented evidence of the teacher's employers and gross 
  7.2   earnings during that period.  The district shall pay the teacher 
  7.3   the amount of severance pay it determines to be due from 
  7.4   the proceeds of the levy state aid for this purpose.  
  7.5      A teacher who receives severance pay under this subdivision 
  7.6   waives all further reinstatement rights under section 125.12, 
  7.7   subdivision 6a or 6b.  If the teacher receives severance pay, 
  7.8   the teacher shall not receive credit for any years of service in 
  7.9   the district paying severance pay prior to the year in which the 
  7.10  teacher becomes eligible to receive severance pay. 
  7.11     The severance pay is subject to section 465.72.  The 
  7.12  district may levy annually is eligible for state aid according 
  7.13  to section 124.912, subdivision 1, for the severance pay.  
  7.14     Sec. 7.  Minnesota Statutes 1996, section 124.17, 
  7.15  subdivision 1d, is amended to read: 
  7.16     Subd. 1d.  [AFDC PUPIL UNITS.] AFDC pupil units for fiscal 
  7.17  year 1993 2000 and thereafter must be computed according to this 
  7.18  subdivision.  
  7.19     (a) The AFDC concentration percentage for a district equals 
  7.20  the product of 100 times the ratio of:  
  7.21     (1) the number of pupils enrolled in the district from 
  7.22  families receiving aid to families with dependent children 
  7.23  according to subdivision 1e; to 
  7.24     (2) the number of pupils in average daily membership 
  7.25  according to subdivision 1e enrolled in the district. 
  7.26     (b) The AFDC pupil weighting factor for a district equals 
  7.27  the lesser of one or the quotient obtained by dividing the 
  7.28  district's AFDC concentration percentage by 11.5 12.9. 
  7.29     (c) The AFDC pupil units for a district for fiscal year 
  7.30  1993 2000 and thereafter equals the product of:  
  7.31     (1) the number of pupils enrolled in the district from 
  7.32  families receiving aid to families with dependent children 
  7.33  according to subdivision 1e; times 
  7.34     (2) the AFDC pupil weighting factor for the district; times 
  7.35     (3) .67 .75. 
  7.36     Sec. 8.  Minnesota Statutes 1996, section 124.239, 
  8.1   subdivision 5, is amended to read: 
  8.2      Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
  8.3   approval, may levy for costs related to an approved facility 
  8.4   plan as follows:  
  8.5      (a) if the district has indicated to the commissioner that 
  8.6   bonds will be issued, the district may levy for the principal 
  8.7   and interest payments on outstanding bonds issued according to 
  8.8   subdivision 3; or 
  8.9      (b) if the district has indicated to the commissioner that 
  8.10  the plan will be funded through levy, the district may levy 
  8.11  according to the schedule approved in the plan. 
  8.12     The authority to levy for costs related to an approved 
  8.13  facility plan under this section is limited to facilities plans 
  8.14  approved prior to July 1, 1997. 
  8.15     Sec. 9.  Minnesota Statutes 1996, section 124.2601, 
  8.16  subdivision 2, is amended to read: 
  8.17     Subd. 2.  [PROGRAMS FUNDED.] Adult basic education programs 
  8.18  established under section 124.26 and approved by the 
  8.19  commissioner are eligible for revenue aid under this section. 
  8.20     Sec. 10.  Minnesota Statutes 1996, section 124.2601, 
  8.21  subdivision 3, is amended to read: 
  8.22     Subd. 3.  [AID.] Adult basic education aid for each 
  8.23  approved program equals the sum of 65 percent of the general 
  8.24  education formula allowance times the number of full-time 
  8.25  equivalent students in its adult basic education program and an 
  8.26  amount equal to .12 percent times the district's adjusted net 
  8.27  tax capacity for assessment year 1996. 
  8.28     Sec. 11.  Minnesota Statutes 1996, section 124.2711, 
  8.29  subdivision 1, is amended to read: 
  8.30     Subdivision 1.  [REVENUE AID.] The revenue State aid for 
  8.31  early childhood family education programs for a school district 
  8.32  equals $101.25 for 1993 and later fiscal years times the greater 
  8.33  of: 
  8.34     (1) 150; or 
  8.35     (2) the number of people under five years of age residing 
  8.36  in the school district on October 1 of the previous school year. 
  9.1      Sec. 12.  Minnesota Statutes 1996, section 124.2711, 
  9.2   subdivision 5, is amended to read: 
  9.3      Subd. 5.  [HOME VISITING LEVY AID.] A school district that 
  9.4   enters into a collaborative agreement to provide education 
  9.5   services and social services to families with young children may 
  9.6   levy an amount is eligible for state aid equal to $1.60 times 
  9.7   the number of people under five years of age residing in the 
  9.8   district on September 1 of the last school year.  Levy revenue 
  9.9   under this subdivision shall not be included as revenue under 
  9.10  subdivision 1.  The revenue shall be used for home visiting 
  9.11  programs under section 121.882, subdivision 2b. 
  9.12     Sec. 13.  Minnesota Statutes 1996, section 124.2713, 
  9.13  subdivision 1, is amended to read: 
  9.14     Subdivision 1.  [TOTAL COMMUNITY EDUCATION REVENUE.] 
  9.15  Community education revenue equals the sum of a district's 
  9.16  general community education revenue and youth service program 
  9.17  revenue.  Community education revenue is provided entirely 
  9.18  through state aid. 
  9.19     Sec. 14.  Minnesota Statutes 1996, section 124.2714, is 
  9.20  amended to read: 
  9.21     124.2714 [ADDITIONAL COMMUNITY EDUCATION REVENUE.] 
  9.22     (a) A district that is eligible under section 124.2713, 
  9.23  subdivision 2, may levy an amount up is eligible for aid equal 
  9.24  to the amount of revenue authorized by Minnesota Statutes 1986, 
  9.25  section 275.125, subdivision 8, clause (2).  
  9.26     (b) Beginning with levies revenue for fiscal year 1995, 
  9.27  this levy revenue must be reduced each year by the amount of any 
  9.28  increase in the levying district's general community education 
  9.29  revenue under section 124.2713, subdivision 3, for that fiscal 
  9.30  year over the amount received by the district under section 
  9.31  124.2713, subdivision 3, for fiscal year 1994. 
  9.32     (c) The proceeds of the levy revenue may be used for the 
  9.33  purposes set forth in section 124.2713, subdivision 8. 
  9.34     Sec. 15.  Minnesota Statutes 1996, section 124.2715, 
  9.35  subdivision 1, is amended to read: 
  9.36     Subdivision 1.  [REVENUE AMOUNT.] A district that is 
 10.1   eligible according to section 124.2713, subdivision 2, may 
 10.2   receive revenue for a program for adults with disabilities.  
 10.3   Revenue for the program for adults with disabilities for a 
 10.4   district or a group of districts equals the lesser of:  
 10.5      (1) the actual expenditures for approved programs and 
 10.6   budgets; or 
 10.7      (2) $60,000.  
 10.8      Revenue is provided through state aid. 
 10.9      Sec. 16.  Minnesota Statutes 1996, section 124.2716, 
 10.10  subdivision 2, is amended to read: 
 10.11     Subd. 2.  [EXTENDED DAY REVENUE.] The extended day revenue 
 10.12  for an eligible school district equals the approved additional 
 10.13  cost of providing services to children with disabilities or 
 10.14  children experiencing family or related problems of a temporary 
 10.15  nature who participate in the extended day program.  Extended 
 10.16  day revenue is provided through state aid. 
 10.17     Sec. 17.  Minnesota Statutes 1996, section 124.2725, 
 10.18  subdivision 2, is amended to read: 
 10.19     Subd. 2.  [COOPERATION AND COMBINATION REVENUE.] 
 10.20  Cooperation and combination revenue equals $100 times the pupil 
 10.21  units served in the district.  For purposes of this section, 
 10.22  pupil units served means the number of resident and nonresident 
 10.23  pupil units in average daily membership receiving instruction in 
 10.24  the cooperating or combined district.  A district may not 
 10.25  receive revenue under this section if it levies receives revenue 
 10.26  under section 124.912, subdivision 4.  Cooperation and 
 10.27  combination revenue is provided through state aid. 
 10.28     Sec. 18.  Minnesota Statutes 1996, section 124.2725, 
 10.29  subdivision 6, is amended to read: 
 10.30     Subd. 6.  [ADDITIONAL AID.] In addition to the aid in 
 10.31  subdivision 5 2, districts shall receive aid according to the 
 10.32  following: 
 10.33     (1) for districts that did not enter into an agreement 
 10.34  under section 122.541 at least three years before the date of a 
 10.35  successful referendum held under section 122.243, subdivision 2, 
 10.36  and combine without cooperating, $100 times the pupil units 
 11.1   served in the district in the first year of combination; or 
 11.2      (2) for districts that combine after one or two years of 
 11.3   cooperation, $100 times the actual pupil units served in each 
 11.4   district for the first year of cooperation and $100 times the 
 11.5   actual pupil units served in the combined district for the first 
 11.6   year of combination; or 
 11.7      (3) for districts that entered into an agreement under 
 11.8   section 122.541 at least three years before the date of a 
 11.9   successful referendum held under section 122.243, subdivision 2, 
 11.10  and combine without cooperating, $100 times the pupil units 
 11.11  served in the combined district for the first two years of 
 11.12  combination. 
 11.13     Sec. 19.  Minnesota Statutes 1996, section 124.2725, 
 11.14  subdivision 13, is amended to read: 
 11.15     Subd. 13.  [FAILURE TO COMBINE.] A district has failed to 
 11.16  combine if the commissioner disapproves of the plan according to 
 11.17  section 122.243, subdivision 1, or if a third referendum fails 
 11.18  under section 122.243, subdivision 2, or if the commissioner of 
 11.19  children, families, and learning determines that the districts 
 11.20  involved are not making sufficient progress toward combination. 
 11.21     (a) If a district has failed to combine, cooperation and 
 11.22  combination aid under subdivisions 5 and 6 shall not be paid and 
 11.23  the authority to levy under subdivision 4 ceases.  The 
 11.24  commissioner shall reduce other aids due the district to recover 
 11.25  an amount equal to the aid paid under subdivision 6 plus the 
 11.26  difference between the aid paid under subdivision 5 and the aid 
 11.27  that would have been paid if the revenue had been $50 times the 
 11.28  pupil units served.  
 11.29     (b) If a district has failed to combine, the authority to 
 11.30  levy eligibility for revenue for reorganization operating debt 
 11.31  under section 122.531, subdivision 4a, and for severance pay or 
 11.32  early retirement incentives under subdivision 15 ceases. 
 11.33     Sec. 20.  Minnesota Statutes 1996, section 124.2725, 
 11.34  subdivision 14, is amended to read: 
 11.35     Subd. 14.  [CESSATION OF REVENUE.] At any time the 
 11.36  districts cease cooperating, aid shall not be paid and the 
 12.1   authority to levy ceases.  If a district ceases to cooperate for 
 12.2   all or a portion of a fiscal year for which a levy has been 
 12.3   certified under subdivision 3, the department of children, 
 12.4   families, and learning shall adjust the next levy certified by 
 12.5   the district by an amount in proportion to the part of the 
 12.6   fiscal year that the district did not cooperate. 
 12.7      Sec. 21.  Minnesota Statutes 1996, section 124.2726, 
 12.8   subdivision 1, is amended to read: 
 12.9      Subdivision 1.  [ELIGIBILITY AND USE.] A school district 
 12.10  that has been reorganized after June 30, 1994, under section 
 12.11  122.23 is eligible for consolidation transition revenue.  
 12.12  Revenue is equal to the sum of aid under subdivision 
 12.13  subdivisions 2 and levy under subdivision 3.  Consolidation 
 12.14  transition revenue may only be used according to this section.  
 12.15  Revenue must be used for the following purposes and may be 
 12.16  distributed among these purposes at the discretion of the 
 12.17  district: 
 12.18     (1) to offer early retirement incentives as provided by 
 12.19  section 122.23, subdivision 20; 
 12.20     (2) to reduce operating debt as defined in section 121.915; 
 12.21     (3) to enhance learning opportunities for students in the 
 12.22  reorganized district; and 
 12.23     (4) for other costs incurred in the reorganization. 
 12.24     Revenue received and utilized under clause (3) or (4) may 
 12.25  be expended for operating, facilities, and/or equipment.  
 12.26  Revenue received under this section shall not be included in the 
 12.27  determination of the reduction under section 124A.26, 
 12.28  subdivision 1.  
 12.29     Sec. 22.  Minnesota Statutes 1996, section 124.2726, 
 12.30  subdivision 3, is amended to read: 
 12.31     Subd. 3.  [LEVY ADDITIONAL AID.] If the aid available in 
 12.32  subdivision 2 is insufficient to cover the costs of the district 
 12.33  under section 122.23, subdivision 20, the district may levy 
 12.34  apply to the commissioner for state aid to cover the difference 
 12.35  over a period of time not to exceed.  The commissioner shall 
 12.36  evaluate the aid request and may award additional aid for a 
 13.1   period not to exceed three years.  
 13.2      Sec. 23.  Minnesota Statutes 1996, section 124.2727, 
 13.3   subdivision 6a, is amended to read: 
 13.4      Subd. 6a.  [DISTRICT COOPERATION REVENUE.] A district's 
 13.5   cooperation revenue is equal to the greater of $67 times the 
 13.6   actual pupil units or $25,000.  District cooperation revenue is 
 13.7   provided through state aid. 
 13.8      Sec. 24.  Minnesota Statutes 1996, section 124.312, 
 13.9   subdivision 5, is amended to read: 
 13.10     Subd. 5.  [INTEGRATION AID.] For fiscal year 1996 and later 
 13.11  fiscal years Integration revenue is provided through state aid 
 13.12  and equals the following amounts: 
 13.13     (1) for independent school district No. 709, Duluth, 
 13.14  $1,385,000 plus the sum of $660,000 and an amount equal to 2.0 
 13.15  percent times the district's adjusted net tax capacity for 
 13.16  assessment year 1994; 
 13.17     (2) for independent school district No. 625, St. Paul, 
 13.18  $8,090,700 plus the product of $197 and the district's actual 
 13.19  pupil units for that year; and 
 13.20     (3) for special school district No. 1, Minneapolis, 
 13.21  $9,368,300 plus the product of $197 and the district's actual 
 13.22  pupil units for that year. 
 13.23     Sec. 25.  Minnesota Statutes 1996, section 124.313, is 
 13.24  amended to read: 
 13.25     124.313 [TARGETED NEEDS REVENUE.] 
 13.26     For fiscal year 1996 and thereafter, a school district's 
 13.27  targeted needs revenue equals the sum of: 
 13.28     (1) assurance of mastery revenue according to section 
 13.29  124.311; plus 
 13.30     (2) the district's limited English proficiency revenue 
 13.31  computed according to section 124.273, subdivision 1d; plus 
 13.32     (3) integration revenue computed according to section 
 13.33  124.312, subdivision 4. 
 13.34     Sec. 26.  Minnesota Statutes 1996, section 124.4945, is 
 13.35  amended to read: 
 13.36     124.4945 [LEVY STATE AID FOR SEVERANCE PAY.] 
 14.1      A joint powers board established under section 124.494 may 
 14.2   make a levy is eligible to receive state aid to provide 
 14.3   severance pay and early retirement incentives under section 
 14.4   125.611, for any teacher as defined under section 125.12, 
 14.5   subdivision 1, who is placed on unrequested leave as a result of 
 14.6   the cooperative secondary facility agreement.  A joint powers 
 14.7   board making a levy shall certify to each participating district 
 14.8   tax levies sufficient to raise the amount necessary to provide 
 14.9   the district's portion of severance pay and early retirement 
 14.10  incentives.  The tax levy certified to each district must be 
 14.11  expressed as a local tax rate, that, when applied to the 
 14.12  adjusted net tax capacity of all of the participating districts 
 14.13  raises the amount necessary to provide severance pay and early 
 14.14  retirement incentives.  Each participating school district shall 
 14.15  include the levy in the next tax roll which it shall certify to 
 14.16  the county auditor, and shall remit the collections of the levy 
 14.17  to the joint powers board.  The commissioner shall approve any 
 14.18  severance pay agreements or early retirement incentives and 
 14.19  determine the amount of state aid for the districts. 
 14.20     Sec. 27.  Minnesota Statutes 1996, section 124.83, 
 14.21  subdivision 3, is amended to read: 
 14.22     Subd. 3.  [HEALTH AND SAFETY REVENUE.] A district's health 
 14.23  and safety revenue for a fiscal year equals: 
 14.24     (1) the sum of (a) the total approved cost of the 
 14.25  district's hazardous substance plan for fiscal years 1985 
 14.26  through 1989, plus (b) the total approved cost of the district's 
 14.27  health and safety program for fiscal year 1990 through the 
 14.28  fiscal year to which the levy is attributable, minus 
 14.29     (2) the sum of (a) the district's total hazardous substance 
 14.30  aid and levy for fiscal years 1985 through 1989 under sections 
 14.31  124.245 and 275.125, subdivision 11c, plus (b) the district's 
 14.32  health and safety revenue under this subdivision, for years 
 14.33  before the fiscal year to which the levy is attributable, plus 
 14.34  (c) the amount of other federal, state, or local receipts for 
 14.35  the district's hazardous substance or health and safety programs 
 14.36  for fiscal year 1985 through the fiscal year to which the levy 
 15.1   is attributable.  
 15.2      The commissioner shall not approve any new health and 
 15.3   safety revenue plans after July 1, 1997. 
 15.4      Sec. 28.  Minnesota Statutes 1996, section 124.91, 
 15.5   subdivision 1, is amended to read: 
 15.6      Subdivision 1.  [TO LEASE BUILDING OR LAND.] When a 
 15.7   district finds it economically advantageous to rent or lease a 
 15.8   building or land for any instructional purposes or for school 
 15.9   storage or furniture repair, and it determines that the capital 
 15.10  expenditure facilities revenues authorized under sections 
 15.11  124.243 and 124A.22, subdivision 10, are insufficient for this 
 15.12  purpose, it may apply to the commissioner for permission to make 
 15.13  an additional capital expenditure levy for this purpose.  The 
 15.14  commissioner shall not approve any levies under this section 
 15.15  after July 1, 1997.  A school district that has approved levy 
 15.16  authority under this section may continue to levy for the 
 15.17  remainder of the lease amounts.  An application for permission 
 15.18  to levy under this subdivision must contain financial 
 15.19  justification for the proposed levy, the terms and conditions of 
 15.20  the proposed lease, and a description of the space to be leased 
 15.21  and its proposed use.  The criteria for approval of applications 
 15.22  to levy under this subdivision must include:  the reasonableness 
 15.23  of the price, the appropriateness of the space to the proposed 
 15.24  activity, the feasibility of transporting pupils to the leased 
 15.25  building or land, conformity of the lease to the laws and rules 
 15.26  of the state of Minnesota, and the appropriateness of the 
 15.27  proposed lease to the space needs and the financial condition of 
 15.28  the district.  The commissioner must not authorize a levy under 
 15.29  this subdivision in an amount greater than the cost to the 
 15.30  district of renting or leasing a building or land for approved 
 15.31  purposes.  The proceeds of this levy must not be used for 
 15.32  custodial or other maintenance services.  A district may not 
 15.33  levy under this subdivision for the purpose of leasing or 
 15.34  renting a district-owned building to itself. 
 15.35     Sec. 29.  Minnesota Statutes 1996, section 124.91, 
 15.36  subdivision 2, is amended to read: 
 16.1      Subd. 2.  [PRE-JULY 1990 LEASE PURCHASE, INSTALLMENT BUYS.] 
 16.2   For taxes payable prior to 1998, a district may annually levy 
 16.3   the amount needed to make payments required by a lease purchase 
 16.4   agreement, installment purchase agreement, or other deferred 
 16.5   payment agreement authorized by Minnesota Statutes 1989 
 16.6   Supplement, section 465.71, if:  
 16.7      (1) the agreement was approved by the commissioner before 
 16.8   July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
 16.9   section 275.125, subdivision 11d; or 
 16.10     (2) the district levied in 1989 for the payments. 
 16.11     For fiscal years 1999 and later, the commissioner shall pay 
 16.12  state aid to each district in the amount needed to make the 
 16.13  payments authorized by this section. 
 16.14     Sec. 30.  Minnesota Statutes 1996, section 124.91, 
 16.15  subdivision 5, is amended to read: 
 16.16     Subd. 5.  [INTERACTIVE TELEVISION.] (a) A school district 
 16.17  with its central administrative office located within economic 
 16.18  development region one, two, three, four, five, six, seven, 
 16.19  eight, nine, and ten may apply to the commissioner of children, 
 16.20  families, and learning for ITV revenue up to the greater of .5 
 16.21  percent of the adjusted net tax capacity of the district or 
 16.22  $25,000 for the construction, maintenance, and lease costs of an 
 16.23  interactive television system for instructional purposes.  The 
 16.24  approval by the commissioner of children, families, and learning 
 16.25  and the application procedures set forth in subdivision 1 shall 
 16.26  apply to the revenue in this subdivision.  In granting the 
 16.27  approval, the commissioner must consider whether the district is 
 16.28  maximizing efficiency through peak use and off-peak use pricing 
 16.29  structures.  The commissioner may not approve any new projects 
 16.30  after July 1, 1997. 
 16.31     (b) To obtain ITV revenue, a district may levy an amount 
 16.32  not to exceed the district's ITV revenue times the lesser of one 
 16.33  or the ratio of: 
 16.34     (1) the quotient derived by dividing the adjusted net tax 
 16.35  capacity of the district for the year before the year the levy 
 16.36  is certified by the actual pupil units in the district for the 
 17.1   year to which the levy is attributable; to 
 17.2      (2) 100 percent of the equalizing factor as defined in 
 17.3   section 124A.02, subdivision 8, for the year to which the levy 
 17.4   is attributable. 
 17.5      (c) A district's ITV aid is the difference between its ITV 
 17.6   revenue and the ITV levy. 
 17.7      (d) The revenue in the first year after reorganization for 
 17.8   a district that has reorganized under section 122.22, 122.23, or 
 17.9   122.241 to 122.247 shall be the greater of: 
 17.10     (1) the revenue computed for the reorganized district under 
 17.11  paragraph (a), or 
 17.12     (2)(i) for two districts that reorganized, 75 percent of 
 17.13  the revenue computed as if the districts involved in the 
 17.14  reorganization were separate, or 
 17.15     (ii) for three or more districts that reorganized, 50 
 17.16  percent of the revenue computed as if the districts involved in 
 17.17  the reorganization were separate. 
 17.18     (e) The revenue in paragraph (d) is increased by the 
 17.19  difference between the initial revenue and ITV lease costs for 
 17.20  leases that had been entered into by the preexisting districts 
 17.21  on the effective date of the consolidation or combination and 
 17.22  with a term not exceeding ten years.  This increased revenue is 
 17.23  only available for the remaining term of the lease.  However, in 
 17.24  no case shall the revenue exceed the amount available had the 
 17.25  preexisting districts received revenue separately. 
 17.26     Sec. 31.  Minnesota Statutes 1996, section 124.91, 
 17.27  subdivision 7, is amended to read: 
 17.28     Subd. 7.  [LEASE PURCHASE, INSTALLMENT BUYS.] (a) Upon 
 17.29  application to, and approval by, the commissioner in accordance 
 17.30  with the procedures and limits in subdivision 1, a district, as 
 17.31  defined in this subdivision, may: 
 17.32     (1) purchase real or personal property under an installment 
 17.33  contract or may lease real or personal property with an option 
 17.34  to purchase under a lease purchase agreement, by which 
 17.35  installment contract or lease purchase agreement title is kept 
 17.36  by the seller or vendor or assigned to a third party as security 
 18.1   for the purchase price, including interest, if any; and 
 18.2      (2) annually levy receive state aid in the amounts 
 18.3   necessary to pay the district's obligations under the 
 18.4   installment contract or lease purchase agreement. 
 18.5      (b) The obligation created by the installment contract or 
 18.6   the lease purchase agreement must not be included in the 
 18.7   calculation of net debt for purposes of section 475.53, and does 
 18.8   not constitute debt under other law.  An election is not 
 18.9   required in connection with the execution of the installment 
 18.10  contract or the lease purchase agreement. 
 18.11     (c) The proceeds of the levy authorized by commissioner 
 18.12  shall not authorize state aid under this subdivision must not to 
 18.13  be used to acquire a facility to be primarily used for athletic 
 18.14  or school administration purposes. 
 18.15     (d) For the purposes of this subdivision, "district" means: 
 18.16     (1) a school district required to have a comprehensive plan 
 18.17  for the elimination of segregation whose plan has been 
 18.18  determined by the commissioner to be in compliance with the 
 18.19  state board of education rules relating to equality of 
 18.20  educational opportunity and school desegregation; or 
 18.21     (2) a school district that participates in a joint program 
 18.22  for interdistrict desegregation with a district defined in 
 18.23  clause (1) if the facility acquired under this subdivision is to 
 18.24  be primarily used for the joint program. 
 18.25     (e) Notwithstanding subdivision 1, the prohibition against 
 18.26  a levy by a district to lease or rent a district-owned building 
 18.27  to itself does not apply to levies otherwise authorized by this 
 18.28  subdivision. 
 18.29     (f) For the purposes of this subdivision, any references in 
 18.30  subdivision 1 to building or land shall include personal 
 18.31  property. 
 18.32     Sec. 32.  Minnesota Statutes 1996, section 124.912, 
 18.33  subdivision 1, is amended to read: 
 18.34     Subdivision 1.  [STATUTORY OBLIGATIONS.] (a) A school 
 18.35  district may levy the amount authorized for liabilities of 
 18.36  dissolved districts pursuant to section 122.45; the amounts 
 19.1   necessary to pay the district's obligations under section 
 19.2   268.06, subdivision 25; the amounts necessary to pay for job 
 19.3   placement services offered to employees who may become eligible 
 19.4   for benefits pursuant to section 268.08; the amounts necessary 
 19.5   to pay the district's obligations under section 127.05; the 
 19.6   amounts authorized by section 122.531; the amounts necessary to 
 19.7   pay the district's obligations under section 122.533; and for 
 19.8   severance pay required by sections 120.08, subdivision 3, and 
 19.9   122.535, subdivision 6. 
 19.10     (b) Each year, a member district of an education district 
 19.11  that levies under this subdivision must transfer the amount of 
 19.12  revenue certified under paragraph (b) to the education district 
 19.13  board according to this subdivision.  By June 20 and November 30 
 19.14  of each year, an amount must be transferred equal to: 
 19.15     (1) 50 percent times 
 19.16     (2) the amount certified in paragraph (b) minus homestead 
 19.17  and agricultural credit aid allocated for that levy according to 
 19.18  section 273.1398, subdivision 6.  A school district is eligible 
 19.19  for state aid for the following purposes: 
 19.20     (1) liabilities for dissolved districts under section 
 19.21  122.45; 
 19.22     (2) the amounts necessary to pay the district's obligations 
 19.23  under section 268.06, subdivision 25; 
 19.24     (3) the amounts necessary to pay for job placement services 
 19.25  offered to employees who may become eligible for benefits 
 19.26  pursuant to section 268.08; 
 19.27     (4) the amounts authorized by section 122.531; 
 19.28     (5) the amounts necessary to pay the district's obligations 
 19.29  under section 122.533; and 
 19.30     (6) for severance pay required by sections 120.08, 
 19.31  subdivision 3, and 122.535, subdivision 6.  
 19.32     The commissioner shall consider all requests for state aid 
 19.33  under this subdivision and shall, at the commissioner's 
 19.34  discretion, approve, modify, or disapprove aid amounts. 
 19.35     Sec. 33.  Minnesota Statutes 1996, section 124.912, 
 19.36  subdivision 3, is amended to read: 
 20.1      Subd. 3.  [RULE COMPLIANCE.] Each year a district that is 
 20.2   required to implement a plan according to the requirements of 
 20.3   Minnesota Rules, parts 3535.0200 to 3535.2200, may levy is 
 20.4   eligible for state aid in an amount not to exceed a net tax rate 
 20.5   of equal to 2.0 percent times the adjusted net tax capacity of 
 20.6   the district for taxes payable in 1991 and thereafter the 
 20.7   preceding year.  A district that levies receives integration 
 20.8   revenue according to subdivision 2 may not levy according 
 20.9   to section 124.312 is not eligible for state aid under this 
 20.10  subdivision.  Notwithstanding section 121.904, the entire amount 
 20.11  of this levy shall be recognized as revenue for the fiscal year 
 20.12  in which the levy is certified.  This levy shall not be 
 20.13  considered in computing the aid reduction under section 124.155. 
 20.14     Sec. 34.  Minnesota Statutes 1996, section 124.912, 
 20.15  subdivision 6, is amended to read: 
 20.16     Subd. 6.  [CRIME RELATED COSTS.] For taxes levied in 1991 
 20.17  and subsequent years, payable in 1992 and subsequent years, each 
 20.18  school district may make a levy on all taxable property located 
 20.19  within the school district for the purposes specified in this 
 20.20  subdivision.  The maximum amount which may be levied for all 
 20.21  costs under this subdivision shall be equal to State aid for 
 20.22  crime related costs equals $1 multiplied by the population of 
 20.23  the school district.  For purposes of this subdivision, 
 20.24  "population" of the school district means the same as contained 
 20.25  in section 275.14.  The proceeds of the levy state aid must be 
 20.26  used for reimbursing the cities and counties who contract with 
 20.27  the school district for the following purposes:  (1) to pay the 
 20.28  costs incurred for the salaries, benefits, and transportation 
 20.29  costs of peace officers and sheriffs for liaison services in the 
 20.30  district's middle and secondary schools; (2) to pay the costs 
 20.31  for a drug abuse prevention program as defined in Minnesota 
 20.32  Statutes 1991 Supplement, section 609.101, subdivision 3, 
 20.33  paragraph (f), in the elementary schools; or (3) to pay the 
 20.34  costs for a gang resistance education training curriculum in the 
 20.35  middle schools.  The school district must initially attempt to 
 20.36  contract for these services with the police department of each 
 21.1   city or the sheriff's department of the county within the school 
 21.2   district containing the school receiving the services.  If a 
 21.3   local police department or a county sheriff's department does 
 21.4   not wish to provide the necessary services, the district may 
 21.5   contract for these services with any other police or sheriff's 
 21.6   department located entirely or partially within the school 
 21.7   district's boundaries.  The levy authorized under this 
 21.8   subdivision is not included in determining the school district's 
 21.9   levy limitations. 
 21.10     Sec. 35.  Minnesota Statutes 1996, section 124.912, 
 21.11  subdivision 7, is amended to read: 
 21.12     Subd. 7.  [ICE ARENA LEVY AID.] (a) Each year, an 
 21.13  independent school district operating and maintaining an ice 
 21.14  arena, may levy is eligible for state aid for the net 
 21.15  operational costs of the ice arena.  The levy amount of state 
 21.16  aid may not exceed the net actual costs of operation of the 
 21.17  arena for the previous year.  Net actual costs are defined as 
 21.18  operating costs less any operating revenues. 
 21.19     (b) Any school district operating and maintaining an ice 
 21.20  arena must demonstrate to the satisfaction of the office of 
 21.21  monitoring in the department of children, families, and learning 
 21.22  that the district will offer equal sports opportunities for male 
 21.23  and female students to use its ice arena, particularly in areas 
 21.24  of access to prime practice time, team support, and providing 
 21.25  junior varsity and younger level teams for girls' ice sports and 
 21.26  ice sports offerings.  The commissioner shall consider all 
 21.27  requests for state aid under this subdivision and shall, at the 
 21.28  commissioner's discretion, approve, modify, or disapprove aid 
 21.29  amounts. 
 21.30     Sec. 36.  Minnesota Statutes 1996, section 124.914, 
 21.31  subdivision 1, is amended to read: 
 21.32     Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (1) In 
 21.33  each year in which so required by this subdivision, a district 
 21.34  shall make an additional levy is eligible for state aid to 
 21.35  eliminate its statutory operating debt, determined as of June 
 21.36  30, 1977, and certified and adjusted by the commissioner.  This 
 22.1   State aid payments for fiscal years 1999 and later and the 
 22.2   previous local levy shall not be made in more than 30 successive 
 22.3   years and each year before it is made, it must be approved by 
 22.4   the commissioner and the approval shall specify its 
 22.5   amount.  This levy shall be an amount which is equal to the 
 22.6   amount raised by a levy of a net tax rate of 1.66 percent times 
 22.7   the adjusted net tax capacity of the district for the preceding 
 22.8   year for taxes payable in 1991 and thereafter; provided that in 
 22.9   the last year in which the district is required to make this 
 22.10  levy, it shall levy an amount not to exceed the amount raised by 
 22.11  a levy of a net tax rate of 1.66 percent times the adjusted net 
 22.12  tax capacity of the district for the preceding year for taxes 
 22.13  payable in 1991 and thereafter The state aid for each district 
 22.14  equals the amount raised by the levy for this purpose for taxes 
 22.15  payable in 1997.  When the sum of the cumulative levies made 
 22.16  pursuant revenue received according to this subdivision and 
 22.17  transfers made according to section 121.912, subdivision 4, 
 22.18  equals an amount equal to the statutory operating debt of the 
 22.19  district, the levy state aid shall be discontinued. 
 22.20     (2) The district shall establish a special account in the 
 22.21  general fund which shall be designated "appropriated fund 
 22.22  balance reserve account for purposes of reducing statutory 
 22.23  operating debt" on its books and records.  This account shall 
 22.24  reflect the levy revenue authorized pursuant to this subdivision.
 22.25  The proceeds of this levy revenue shall be used only for cash 
 22.26  flow requirements and shall not be used to supplement district 
 22.27  revenues or income for the purposes of increasing the district's 
 22.28  expenditures or budgets. 
 22.29     (3) Any district which is required to levy pursuant to this 
 22.30  subdivision shall certify the maximum levy allowable under 
 22.31  section 124A.23, subdivision 2, in that same year. 
 22.32     (4) Each district shall make permanent fund balance 
 22.33  transfers so that the total statutory operating debt of the 
 22.34  district is reflected in the general fund as of June 30, 1977. 
 22.35     Sec. 37.  Minnesota Statutes 1996, section 124.914, 
 22.36  subdivision 2, is amended to read: 
 23.1      Subd. 2.  [1983 OPERATING DEBT.] (1) Each year, a 
 23.2   district may make an additional levy is eligible for state aid 
 23.3   to eliminate a deficit in the net unappropriated operating funds 
 23.4   of the district, determined as of June 30, 1983, and certified 
 23.5   and adjusted by the commissioner.  This levy may in each year be 
 23.6   an amount not to exceed the amount raised by a levy of a net tax 
 23.7   rate of 1.85 percent times the adjusted net tax capacity for 
 23.8   taxes payable in 1991 and thereafter of the district for the 
 23.9   preceding year as determined by the commissioner state aid for 
 23.10  each district equals the amount raised by the district's levy 
 23.11  for this purpose for taxes payable in 1997.  However, the total 
 23.12  amount of this levy revenue for all years it is made received 
 23.13  shall not exceed the lesser of (a) the amount of the deficit in 
 23.14  the net unappropriated operating funds of the district as of 
 23.15  June 30, 1983, or (b) the amount of the aid reduction, according 
 23.16  to Laws 1981, Third Special Session chapter 2, article 2, 
 23.17  section 2, but excluding clauses (l), (m), (n), (o), and (p), 
 23.18  and Laws 1982, Third Special Session chapter 1, article 3, 
 23.19  section 6, to the district in fiscal year 1983.  When the 
 23.20  cumulative levies made pursuant revenue received according to 
 23.21  this subdivision equal equals the total amount permitted by this 
 23.22  subdivision, the levy state aid shall be discontinued.  
 23.23     (2) The proceeds of this levy state aid shall be used only 
 23.24  for cash flow requirements and shall not be used to supplement 
 23.25  district revenues or income for the purposes of increasing the 
 23.26  district's expenditures or budgets.  
 23.27     (3) Any district that levies pursuant to this subdivision 
 23.28  shall certify the maximum levy allowable under section 124A.23, 
 23.29  subdivisions 2 and 2a, in that same year. 
 23.30     Sec. 38.  Minnesota Statutes 1996, section 124.914, 
 23.31  subdivision 3, is amended to read: 
 23.32     Subd. 3.  [1985 OPERATING DEBT.] (1) Each year, a 
 23.33  district may levy is eligible for state aid to eliminate a 
 23.34  deficit in the net unappropriated balance in the general fund of 
 23.35  the district, determined as of June 30, 1985, and certified and 
 23.36  adjusted by the commissioner.  Each year this levy may be an 
 24.1   amount not to exceed the amount raised by a levy of a net tax 
 24.2   rate of 1.85 percent times the adjusted net tax capacity for 
 24.3   taxes payable in 1991 and thereafter of the district for the 
 24.4   preceding year the state aid for each district equals the amount 
 24.5   raised by the district's levy for this purpose for taxes payable 
 24.6   in 1997.  However, the total amount of this levy revenue for all 
 24.7   years it is made received shall not exceed the amount of the 
 24.8   deficit in the net unappropriated balance in the general fund of 
 24.9   the district as of June 30, 1985.  When the cumulative levies 
 24.10  made pursuant to revenue received under this subdivision equal 
 24.11  equals the total amount permitted by this subdivision, the levy 
 24.12  state aid shall be discontinued.  
 24.13     (2) A district, if eligible, may levy receive revenue under 
 24.14  this subdivision or subdivision 2 but not both. 
 24.15     (3) The proceeds of this levy revenue shall be used only 
 24.16  for cash flow requirements and shall not be used to supplement 
 24.17  district revenues or income for the purposes of increasing the 
 24.18  district's expenditures or budgets.  
 24.19     (4) Any district that levies pursuant to this subdivision 
 24.20  shall certify the maximum levy allowable under section 124A.23, 
 24.21  subdivision 2, in that same year. 
 24.22     Sec. 39.  Minnesota Statutes 1996, section 124.914, 
 24.23  subdivision 4, is amended to read: 
 24.24     Subd. 4.  [1992 OPERATING DEBT.] (a) For taxes payable for 
 24.25  calendar year 2003 fiscal year 2004 and earlier, a district that 
 24.26  has filed a plan pursuant to section 121.917, subdivision 4, may 
 24.27  levy is eligible for state aid, with the approval of the 
 24.28  commissioner, to eliminate a deficit in the net unappropriated 
 24.29  balance in the operating funds of the district, determined as of 
 24.30  June 30, 1992, and certified and adjusted by the commissioner.  
 24.31  Each year this levy may be an amount not to state aid shall not 
 24.32  exceed the lesser of: 
 24.33     (1) an amount raised by a levy of a net tax rate of one 
 24.34  percent times the adjusted net tax capacity the district's levy 
 24.35  for this purpose for taxes payable in 1997; or 
 24.36     (2) $100,000. 
 25.1   This amount shall be reduced by referendum revenue authorized 
 25.2   under section 124A.03 pursuant to the plan filed under section 
 25.3   121.917.  However, the total amount of this levy revenue for all 
 25.4   years it is made received shall not exceed the amount of the 
 25.5   deficit in the net unappropriated balance in the operating funds 
 25.6   of the district as of June 30, 1992.  When the cumulative levies 
 25.7   made pursuant to revenue received under this subdivision equal 
 25.8   equals the total amount permitted by this subdivision, the levy 
 25.9   state aid shall be discontinued.  
 25.10     (b) A district, if eligible, may levy receive revenue under 
 25.11  this subdivision or subdivision 2 or 3, or under section 
 25.12  122.531, subdivision 4a, or Laws 1992, chapter 499, article 7, 
 25.13  sections 16 or 17, but not under more than one. 
 25.14     (c) The proceeds of this levy revenue shall be used only 
 25.15  for cash flow requirements and shall not be used to supplement 
 25.16  district revenues or income for the purposes of increasing the 
 25.17  district's expenditures or budgets.  
 25.18     (d) Any district that levies pursuant to this subdivision 
 25.19  shall certify the maximum levy allowable under section 124A.23, 
 25.20  subdivision 2, in that same year. 
 25.21     Sec. 40.  Minnesota Statutes 1996, section 124.916, 
 25.22  subdivision 1, is amended to read: 
 25.23     Subdivision 1.  [HEALTH INSURANCE.] (a) A school 
 25.24  district may levy is eligible for state aid in the amount 
 25.25  necessary to make employer contributions for insurance for 
 25.26  retired employees under this subdivision.  Notwithstanding 
 25.27  section 121.904, 50 percent of the amount levied shall be 
 25.28  recognized as revenue for the fiscal year in which the levy is 
 25.29  certified.  This levy shall not be considered in computing the 
 25.30  aid reduction under section 124.155. 
 25.31     (b) The school board of a joint vocational technical 
 25.32  district formed under sections 136C.60 to 136C.69 and the school 
 25.33  board of a school district may provide employer-paid hospital, 
 25.34  medical, and dental benefits to a person who: 
 25.35     (1) is eligible for employer-paid insurance under 
 25.36  collective bargaining agreements or personnel plans in effect on 
 26.1   June 30, 1992; 
 26.2      (2) has at least 25 years of service credit in the public 
 26.3   pension plan of which the person is a member on the day before 
 26.4   retirement or, in the case of a teacher, has a total of at least 
 26.5   25 years of service credit in the teachers retirement 
 26.6   association, a first-class city teacher retirement fund, or any 
 26.7   combination of these; 
 26.8      (3) upon retirement is immediately eligible for a 
 26.9   retirement annuity; 
 26.10     (4) is at least 55 and not yet 65 years of age; and 
 26.11     (5) retires on or after May 15, 1992, and before July 21, 
 26.12  1992. 
 26.13     A school board paying insurance under this subdivision may 
 26.14  not exclude any eligible employees. 
 26.15     (c) An employee who is eligible both for the health 
 26.16  insurance benefit under this subdivision and for an early 
 26.17  retirement incentive under a collective bargaining agreement or 
 26.18  personnel plan established by the employer must select either 
 26.19  the early retirement incentive provided under the collective 
 26.20  bargaining agreement personnel plan or the incentive provided 
 26.21  under this subdivision, but may not receive both.  For purposes 
 26.22  of this subdivision, a person retires when the person terminates 
 26.23  active employment and applies for retirement benefits.  The 
 26.24  retired employee is eligible for single and dependent coverages 
 26.25  and employer payments to which the person was entitled 
 26.26  immediately before retirement, subject to any changes in 
 26.27  coverage and employer and employee payments through collective 
 26.28  bargaining or personnel plans, for employees in positions 
 26.29  equivalent to the position from which the employee retired.  The 
 26.30  retired employee is not eligible for employer-paid life 
 26.31  insurance.  Eligibility ceases when the retired employee attains 
 26.32  the age of 65, or when the employee chooses not to receive the 
 26.33  retirement benefits for which the employee has applied, or when 
 26.34  the employee is eligible for employer-paid health insurance from 
 26.35  a new employer.  Coverages must be coordinated with relevant 
 26.36  health insurance benefits provided through the federally 
 27.1   sponsored Medicare program.  
 27.2      (d) Unilateral implementation of this section by a public 
 27.3   employer is not an unfair labor practice for purposes of chapter 
 27.4   179A.  The authority provided in this subdivision for an 
 27.5   employer to pay health insurance costs for certain retired 
 27.6   employees is not subject to the limits in section 179A.20, 
 27.7   subdivision 2a. 
 27.8      (e) If a school district levies receives revenue according 
 27.9   to this subdivision, it may not also levy receive revenue 
 27.10  according to section 122.531, subdivision 9, for eligible 
 27.11  employees. 
 27.12     Sec. 41.  Minnesota Statutes 1996, section 124.916, 
 27.13  subdivision 2, is amended to read: 
 27.14     Subd. 2.  [RETIRED EMPLOYEE HEALTH BENEFITS.] For taxes 
 27.15  payable in 1996, 1997, 1998, and 1999 fiscal year 2000 only, a 
 27.16  school district may levy is eligible for state aid in an amount 
 27.17  up to the amount the district is required by the collective 
 27.18  bargaining agreement in effect on March 30, 1992, to pay for 
 27.19  health insurance or unreimbursed medical expenses for licensed 
 27.20  and nonlicensed employees who have terminated services in the 
 27.21  employing district and withdrawn from active teaching service or 
 27.22  other active service, as applicable, before July 1, 1992.  The 
 27.23  total amount of the levy state aid for a district each year may 
 27.24  not exceed $300,000.  
 27.25     Notwithstanding section 121.904, 50 percent of the proceeds 
 27.26  of this levy shall be recognized in the fiscal year in which it 
 27.27  is certified. 
 27.28     Sec. 42.  Minnesota Statutes 1996, section 124.916, 
 27.29  subdivision 3, is amended to read: 
 27.30     Subd. 3.  [RETIREMENT LEVIES AID.] (1) In addition to the 
 27.31  excess levy authorized in 1976 any district within a city of the 
 27.32  first class which was authorized in 1975 to make a retirement 
 27.33  levy under Minnesota Statutes 1974, section 275.127 and chapter 
 27.34  422A may levy an amount per pupil unit which is equal to the 
 27.35  amount levied in 1975 payable 1976, under Minnesota Statutes 
 27.36  1974, section 275.127 and chapter 422A, divided by the number of 
 28.1   pupil units in the district in 1976-1977. 
 28.2      (2) In 1979 and each year thereafter, any district which 
 28.3   qualified in 1976 for an extra levy under paragraph (1) shall be 
 28.4   allowed to levy the same amount as levied for retirement in 1978 
 28.5   under this clause reduced each year by ten percent of the 
 28.6   difference between the amount levied for retirement in 1971 
 28.7   under Minnesota Statutes 1971, sections 275.127 and 422.01 to 
 28.8   422.54 and the amount levied for retirement in 1975 under 
 28.9   Minnesota Statutes 1974, section 275.127 and chapter 422A. 
 28.10     (3) In 1991 and each year thereafter, a district to which 
 28.11  this subdivision applies may levy an additional amount required 
 28.12  for contributions to the Minneapolis employees retirement fund 
 28.13  as a result of the maximum dollar amount limitation on state 
 28.14  contributions to the fund imposed under section 422A.101, 
 28.15  subdivision 3.  The additional levy shall not exceed the most 
 28.16  recent amount certified by the board of the Minneapolis 
 28.17  employees retirement fund as the district's share of the 
 28.18  contribution requirement in excess of the maximum state 
 28.19  contribution under section 422A.101, subdivision 3.  
 28.20     (4) For taxes payable in 1994 and thereafter, special 
 28.21  school district No. 1, Minneapolis, and independent school 
 28.22  district No. 625, St. Paul, may levy for the increase in the 
 28.23  employer retirement fund contributions, under Laws 1992, chapter 
 28.24  598, article 5, section 1.  Notwithstanding section 121.904, the 
 28.25  entire amount of this levy may be recognized as revenue for the 
 28.26  fiscal year in which the levy is certified.  This levy shall not 
 28.27  be considered in computing the aid reduction under section 
 28.28  124.155. 
 28.29     (1) For fiscal years 1999 and later, a district is eligible 
 28.30  for state aid equal to the amount of its retirement levies 
 28.31  certified under this subdivision for taxes payable in 1997. 
 28.32     (5) (2) If the employer retirement fund contributions under 
 28.33  section 354A.12, subdivision 2a, are increased for fiscal year 
 28.34  1994 or later fiscal years, special school district No. 1, 
 28.35  Minneapolis, and independent school district No. 625, St. Paul, 
 28.36  may levy in payable 1994 or later an amount are eligible for 
 29.1   state aid equal to the amount derived by applying the net 
 29.2   increase in the employer retirement fund contribution rate of 
 29.3   the respective teacher retirement fund association between 
 29.4   fiscal year 1993 and the fiscal year beginning in the year after 
 29.5   the levy is certified to the total covered payroll of the 
 29.6   applicable teacher retirement fund association.  Notwithstanding 
 29.7   section 121.904, the entire amount of this levy may be 
 29.8   recognized as revenue for the fiscal year in which the levy is 
 29.9   certified.  This levy shall not be considered in computing the 
 29.10  aid reduction under section 124.155.  If an applicable school 
 29.11  district levies under this paragraph, they may not levy under 
 29.12  paragraph (4). 
 29.13     (6) (3) In addition to the levy state aid authorized under 
 29.14  paragraph (5) (2), special school district No. 1, 
 29.15  Minneapolis, may also levy payable in 1997 or later is also 
 29.16  eligible for additional state aid in an amount equal to the 
 29.17  contributions under section sections 423A.02, subdivision 3, and 
 29.18  may also levy in payable 1994 or later an amount equal to the 
 29.19  state aid contribution under section 354A.12, subdivision 3b.  
 29.20  Independent school district No. 625, St. Paul, may levy payable 
 29.21  in 1997 or is eligible for additional state aid in fiscal years 
 29.22  1999 and later in an amount equal to the supplemental 
 29.23  contributions under section 423A.02, subdivision 
 29.24  3.  Notwithstanding section 121.904, the entire amount of these 
 29.25  levies may be recognized as revenue for the fiscal year in which 
 29.26  the levy is certified.  These levies shall not be considered in 
 29.27  computing the aid reduction under section 124.155. 
 29.28     Sec. 43.  Minnesota Statutes 1996, section 124.916, 
 29.29  subdivision 4, is amended to read: 
 29.30     Subd. 4.  [MINNEAPOLIS HEALTH INSURANCE SUBSIDY.] Each year 
 29.31  special school district No. 1, Minneapolis, may make an 
 29.32  additional levy not to exceed is eligible for state aid equal to 
 29.33  the amount raised by a net tax rate of .10 percent times the 
 29.34  adjusted net tax capacity for taxes payable in 1991 and 
 29.35  thereafter of the property in the district for the preceding 
 29.36  assessment year 1996.  The proceeds may be used only to 
 30.1   subsidize health insurance costs for eligible teachers as 
 30.2   provided in this section.  
 30.3      "Eligible teacher" means a retired teacher who was a basic 
 30.4   member of the Minneapolis teachers retirement fund association, 
 30.5   who retired before May 1, 1974, or who had 20 or more years of 
 30.6   basic member service in the Minneapolis teacher retirement fund 
 30.7   association and retired before June 30, 1983, and who is not 
 30.8   eligible to receive the hospital insurance benefits of the 
 30.9   federal Medicare program of the Social Security Act without 
 30.10  payment of a monthly premium.  The district shall notify 
 30.11  eligible teachers that a subsidy is available.  To obtain a 
 30.12  subsidy, an eligible teacher must submit to the school district 
 30.13  a copy of receipts for health insurance premiums paid.  The 
 30.14  school district shall disburse the health insurance premium 
 30.15  subsidy to each eligible teacher according to a schedule 
 30.16  determined by the district, but at least annually.  An eligible 
 30.17  teacher may receive a subsidy up to an amount equal to the 
 30.18  lesser of 90 percent of the cost of the eligible teacher's 
 30.19  health insurance or up to 90 percent of the cost of the number 
 30.20  two qualified plan of health coverage for individual policies 
 30.21  made available by the Minnesota comprehensive health association 
 30.22  under chapter 62E.  
 30.23     If funds remaining from the previous year's health 
 30.24  insurance subsidy levy revenue, minus the previous year's 
 30.25  required subsidy amount, are sufficient to pay the estimated 
 30.26  current year subsidy, the levy state aid must be discontinued 
 30.27  until the remaining funds are estimated by the school board to 
 30.28  be insufficient to pay the subsidy. 
 30.29     This subdivision does not extend benefits to teachers who 
 30.30  retire after June 30, 1983, and does not create a contractual 
 30.31  right or claim for altering the benefits in this subdivision.  
 30.32  This subdivision does not restrict the school district's right 
 30.33  to modify or terminate coverage under this subdivision. 
 30.34     Sec. 44.  Minnesota Statutes 1996, section 124.918, 
 30.35  subdivision 8, is amended to read: 
 30.36     Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
 31.1   Reductions in levies pursuant to section 124.918, subdivision 1, 
 31.2   and section 273.138, shall be made prior to the reductions in 
 31.3   clause (2). 
 31.4      (2) Notwithstanding any other law to the contrary, 
 31.5   districts which received payments pursuant to sections 298.018; 
 31.6   298.23 to 298.28, except an amount distributed under section 
 31.7   298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
 31.8   298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
 31.9   upon severed mineral values, or recognized revenue pursuant to 
 31.10  section 477A.15; shall not include a portion of these aids in 
 31.11  their permissible levies pursuant to those sections, but instead 
 31.12  shall reduce the permissible levies authorized by this chapter 
 31.13  and chapter 124A by the greater of the following: 
 31.14     (a) an amount equal to 50 percent of the total dollar 
 31.15  amount of the payments received pursuant to those sections or 
 31.16  revenue recognized pursuant to section 477A.15 in the previous 
 31.17  fiscal year; or 
 31.18     (b) an amount equal to the total dollar amount of the 
 31.19  payments received pursuant to those sections or revenue 
 31.20  recognized pursuant to section 477A.15 in the previous fiscal 
 31.21  year less the product of the same dollar amount of payments or 
 31.22  revenue times the ratio of the maximum levy allowed the district 
 31.23  under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
 31.24  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
 31.25  subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
 31.26  subdivision 5a, to the total levy allowed the district under 
 31.27  this section and Minnesota Statutes 1986, sections 124A.03, 
 31.28  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
 31.29  subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
 31.30  5a, and 124A.20, subdivision 2, for levies certified in 1986. 
 31.31     (3) No reduction pursuant to this subdivision shall reduce 
 31.32  the levy made by the district pursuant to section 124A.23, to an 
 31.33  amount less than the amount raised by a levy of a net tax rate 
 31.34  of 6.82 percent times the adjusted net tax capacity for taxes 
 31.35  payable in 1990 and thereafter of that district for the 
 31.36  preceding year as determined by the commissioner.  The amount of 
 32.1   any increased levy authorized by referendum pursuant to section 
 32.2   124A.03, subdivision 2, shall not be reduced pursuant to this 
 32.3   subdivision.  The amount of any levy authorized by 
 32.4   section 124.912, subdivision 1, 124.97 to make payments for 
 32.5   bonds issued and for interest thereon, shall not be reduced 
 32.6   pursuant to this subdivision.  
 32.7      (4) Before computing the reduction pursuant to this 
 32.8   subdivision of the capital expenditure facilities levy 
 32.9   authorized by section 124.243, the capital expenditure equipment 
 32.10  levy authorized by section 124.244, the health and safety levy 
 32.11  authorized by sections 124.83 and 124.91, subdivision 6, the 
 32.12  commissioner shall ascertain from each affected school district 
 32.13  the amount it proposes to levy under each section or 
 32.14  subdivision.  The reduction shall be computed on the basis of 
 32.15  the amount so ascertained. 
 32.16     (5) Notwithstanding any law to the contrary, any amounts 
 32.17  received by districts in any fiscal year pursuant to sections 
 32.18  298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 
 32.19  298.405; or any law imposing a tax on severed mineral values; 
 32.20  and not deducted from general education aid pursuant to section 
 32.21  124A.035, subdivision 5, clause (2), and not applied to reduce 
 32.22  levies pursuant to this subdivision shall be paid by the 
 32.23  district to the St. Louis county auditor in the following amount 
 32.24  by March 15 of each year, the amount required to be subtracted 
 32.25  from the previous fiscal year's general education aid pursuant 
 32.26  to section 124A.035, subdivision 5, which is in excess of the 
 32.27  general education aid earned for that fiscal year.  The county 
 32.28  auditor shall deposit any amounts received pursuant to this 
 32.29  clause in the St. Louis county treasury for purposes of paying 
 32.30  the taconite homestead credit as provided in section 273.135. 
 32.31     Sec. 45.  Minnesota Statutes 1996, section 124A.22, 
 32.32  subdivision 1, is amended to read: 
 32.33     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 32.34  year 1996, the general education revenue for each district 
 32.35  equals the sum of the district's basic revenue, compensatory 
 32.36  education revenue, training and experience revenue, secondary 
 33.1   sparsity revenue, elementary sparsity revenue, and supplemental 
 33.2   revenue. 
 33.3      (b) For fiscal year 1997 and thereafter, the general 
 33.4   education revenue for each district equals the sum of the 
 33.5   district's basic revenue, compensatory education revenue, 
 33.6   secondary sparsity revenue, elementary sparsity revenue, 
 33.7   transportation sparsity, total operating capital revenue, 
 33.8   transition revenue, and supplemental revenue.  For fiscal years 
 33.9   2000 and later, general education revenue is provided through 
 33.10  state aid. 
 33.11     Sec. 46.  Minnesota Statutes 1996, section 124A.23, 
 33.12  subdivision 1, is amended to read: 
 33.13     Subdivision 1.  [GENERAL EDUCATION STATEWIDE PROPERTY TAX 
 33.14  RATE.] The commissioner of revenue shall establish the general 
 33.15  education statewide property tax rate by July 1 of each year for 
 33.16  levies payable in the following year.  The general 
 33.17  education statewide property tax capacity rate shall be a rate, 
 33.18  rounded up to the nearest tenth of a percent, that, when applied 
 33.19  to the adjusted net tax capacity for all districts counties, 
 33.20  raises the amount specified in this subdivision.  The general 
 33.21  education statewide property tax rate shall be the rate that 
 33.22  raises $1,054,000,000 for fiscal year 1996 and 
 33.23  $1,359,000,000 $1,363,000,000 for fiscal year 1997 2000 and 
 33.24  later fiscal years.  The general education tax rate may not be 
 33.25  changed due to changes or corrections made to a district's 
 33.26  adjusted net tax capacity after the tax rate has been 
 33.27  established. The commissioner of revenue shall calculate the 
 33.28  amount that shall be raised in each county and certify that 
 33.29  amount to the county auditor.  The auditor shall extend the levy 
 33.30  against the net tax capacity in the county. 
 33.31     Sec. 47.  Minnesota Statutes 1996, section 124A.292, 
 33.32  subdivision 2, is amended to read: 
 33.33     Subd. 2.  [REVENUE.] Staff development incentive revenue is 
 33.34  equal to the number of teachers at the site times $25.  Staff 
 33.35  development incentive revenue is provided through state aid. 
 33.36     Sec. 48.  Minnesota Statutes 1996, section 275.08, 
 34.1   subdivision 1b, is amended to read: 
 34.2      Subd. 1b.  [COMPUTATION OF TAX RATES.] The amounts 
 34.3   certified to be levied against net tax capacity under section 
 34.4   275.07 by an individual local government unit shall be divided 
 34.5   by the total net tax capacity of all taxable properties within 
 34.6   the local government unit's taxing jurisdiction.  The resulting 
 34.7   ratio, the local government's local tax rate, multiplied by each 
 34.8   property's net tax capacity shall be each property's net tax 
 34.9   capacity tax for that local government unit before reduction by 
 34.10  any credits. 
 34.11     The general education statewide property tax levied within 
 34.12  each county under section 124A.23, subdivision 1, shall be 
 34.13  divided by the total net tax capacity of all taxable properties 
 34.14  within the county.  The resulting ratio, the county's general 
 34.15  education statewide property tax rate, multiplied by each 
 34.16  property's net tax capacity, shall be each property's general 
 34.17  education statewide property tax before reduction by any credits.
 34.18     Any amount certified to the county auditor to be levied 
 34.19  against market value shall be divided by the total referendum 
 34.20  market value of all taxable properties within the taxing 
 34.21  district.  The resulting ratio, the taxing district's new 
 34.22  referendum tax rate, multiplied by each property's referendum 
 34.23  market value shall be each property's new referendum tax before 
 34.24  reduction by any credits.  For the purposes of this subdivision, 
 34.25  "referendum market value" means the market value as defined in 
 34.26  section 124A.02, subdivision 3b. 
 34.27     Sec. 49.  Minnesota Statutes 1996, section 298.28, is 
 34.28  amended by adding a subdivision to read: 
 34.29     Subd. 4a.  [SCHOOL DISTRICT LEVY REDUCTION.] For taxes 
 34.30  payable in 1999 and later, a school district's levy reduction 
 34.31  under section 124.918, subdivision 8, is equal to the reduction 
 34.32  for taxes payable in 1998 times the ratio of the taxable tons in 
 34.33  the current year to the taxable tons in payable year 1998, but 
 34.34  not below zero. 
 34.35     Sec. 50.  Minnesota Statutes 1996, section 298.28, is 
 34.36  amended by adding a subdivision to read: 
 35.1      Subd. 4b.  [SCHOOL DISTRICT AID REDUCTION.] A school 
 35.2   district's taconite aid reduction to general education aid is 
 35.3   equal to one-third of its aid reduction for fiscal year 1999 
 35.4   times the ratio of the taxable tons in the current payable year 
 35.5   to the taxable tons in the payable year 1998. 
 35.6      Sec. 51.  Minnesota Statutes 1996, section 469.177, 
 35.7   subdivision 1a, is amended to read: 
 35.8      Subd. 1a.  [ORIGINAL LOCAL TAX RATE.] At the time of the 
 35.9   initial certification of the original net tax capacity for a tax 
 35.10  increment financing district or a subdistrict, the county 
 35.11  auditor shall certify the original local tax rate that applies 
 35.12  to the district or subdistrict.  The original local tax rate is 
 35.13  the sum of all the local tax rates and the state tax rate that 
 35.14  apply applies to a property in the district or subdistrict.  The 
 35.15  local tax rate to be certified is the rate in effect for the 
 35.16  same taxes payable year applicable to the tax capacity values 
 35.17  certified as the district's or subdistrict's original tax 
 35.18  capacity.  The resulting tax capacity rate is the original local 
 35.19  tax rate for the life of the district or subdistrict. 
 35.20     Sec. 52.  Minnesota Statutes 1996, section 469.177, 
 35.21  subdivision 3, is amended to read: 
 35.22     Subd. 3.  [TAX INCREMENT, RELATIONSHIP TO CHAPTERS 276A AND 
 35.23  473F.] (a) Unless the governing body elects pursuant to clause 
 35.24  (b) the following method of computation shall apply: 
 35.25     (1) The original net tax capacity and the current net tax 
 35.26  capacity shall be determined before the application of the 
 35.27  fiscal disparity provisions of chapter 276A or 473F.  Where the 
 35.28  original net tax capacity is equal to or greater than the 
 35.29  current net tax capacity, there is no captured net tax capacity 
 35.30  and no tax increment determination.  Where the original net tax 
 35.31  capacity is less than the current net tax capacity, the 
 35.32  difference between the original net tax capacity and the current 
 35.33  net tax capacity is the captured net tax capacity.  This amount 
 35.34  less any portion thereof which the authority has designated, in 
 35.35  its tax increment financing plan, to share with the local taxing 
 35.36  districts is the retained captured net tax capacity of the 
 36.1   authority.  
 36.2      (2) The county auditor shall exclude the retained captured 
 36.3   net tax capacity of the authority from the net tax capacity of 
 36.4   the state and local taxing districts in determining state and 
 36.5   local taxing district tax rates.  The state and local tax rates 
 36.6   so determined are to be extended against the retained captured 
 36.7   net tax capacity of the authority as well as the net tax 
 36.8   capacity of the local taxing districts.  The tax generated by 
 36.9   the extension of the lesser of (A) the sum of the state and 
 36.10  local taxing district tax rates or (B) the original local tax 
 36.11  rate to the retained captured net tax capacity of the authority 
 36.12  is the tax increment of the authority.  
 36.13     (b) The governing body may, by resolution approving the tax 
 36.14  increment financing plan pursuant to section 469.175, 
 36.15  subdivision 3, elect the following method of computation: 
 36.16     (1) The original net tax capacity shall be determined 
 36.17  before the application of the fiscal disparity provisions of 
 36.18  chapter 276A or 473F.  The current net tax capacity shall 
 36.19  exclude any fiscal disparity commercial-industrial net tax 
 36.20  capacity increase between the original year and the current year 
 36.21  multiplied by the fiscal disparity ratio determined pursuant to 
 36.22  section 276A.06, subdivision 7, or 473F.08, subdivision 6.  
 36.23  Where the original net tax capacity is equal to or greater than 
 36.24  the current net tax capacity, there is no captured net tax 
 36.25  capacity and no tax increment determination.  Where the original 
 36.26  net tax capacity is less than the current net tax capacity, the 
 36.27  difference between the original net tax capacity and the current 
 36.28  net tax capacity is the captured net tax capacity.  This amount 
 36.29  less any portion thereof which the authority has designated, in 
 36.30  its tax increment financing plan, to share with the local taxing 
 36.31  districts is the retained captured net tax capacity of the 
 36.32  authority.  
 36.33     (2) The county auditor shall exclude the retained captured 
 36.34  net tax capacity of the authority from the net tax capacity of 
 36.35  the state and local taxing districts in determining state and 
 36.36  local taxing district tax rates.  The state and local tax rates 
 37.1   so determined are to be extended against the retained captured 
 37.2   net tax capacity of the authority as well as the net tax 
 37.3   capacity of the local taxing districts.  The tax generated by 
 37.4   the extension of the lesser of (A) the state and local taxing 
 37.5   district tax rates or (B) the original local tax rate to the 
 37.6   retained captured net tax capacity of the authority is the tax 
 37.7   increment of the authority.  
 37.8      (3) An election by the governing body pursuant to paragraph 
 37.9   (b) shall be submitted to the county auditor by the authority at 
 37.10  the time of the request for certification pursuant to 
 37.11  subdivision 1. 
 37.12     (c) The method of computation of tax increment applied to a 
 37.13  district pursuant to paragraph (a) or (b) shall remain the same 
 37.14  for the duration of the district, except that the governing body 
 37.15  may elect to change its election from the method of computation 
 37.16  in paragraph (a) to the method in paragraph (b). 
 37.17     Sec. 53.  Minnesota Statutes 1996, section 473F.08, 
 37.18  subdivision 3, is amended to read: 
 37.19     Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
 37.20  apportion the levy of each governmental unit in the auditor's 
 37.21  county in the manner prescribed by this subdivision.  The 
 37.22  auditor shall: 
 37.23     (a) by August 20, determine the areawide portion of the 
 37.24  levy for each governmental unit by multiplying the local tax 
 37.25  rate of the governmental unit for the preceding levy year times 
 37.26  the distribution value set forth in subdivision 2, clause (b); 
 37.27  and 
 37.28     (b) by September 5, determine the local portion of the 
 37.29  current year's levy by subtracting the resulting amount from 
 37.30  clause (a) from the governmental unit's current year's levy. 
 37.31     For property taxes payable in 1999 only, a percentage of 
 37.32  the areawide portion of a school district's levy shall be 
 37.33  distributed to the state of Minnesota equal to the percentage 
 37.34  that the general education levy under section 124A.23 was the 
 37.35  school district's payable 1997 levy.  The commissioner of 
 37.36  children, families, and learning shall certify the general 
 38.1   education levy percentage of each district's payable 1997 levy 
 38.2   to the administrative auditor by July 1, 1998, using the 
 38.3   definition of equalized levies found in section 273.1398, 
 38.4   subdivision 1. 
 38.5      Sec. 54.  [REPEALER.] 
 38.6      Subdivision 1.  [FISCAL YEAR 2000.] Minnesota Statutes 
 38.7   1996, sections 124.2134; 124.225, subdivisions 1, 3a, 7a, 7b, 
 38.8   7d, 7e, 7f, 8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 16, and 17; 
 38.9   124.226; 124.2442; 124.2601, subdivisions 4, 5, and 6; 124.2711, 
 38.10  subdivisions 2a and 3; 124.2713, subdivisions 6, 6a, 6b, and 7; 
 38.11  124.2715, subdivisions 2 and 3; 124.2716, subdivisions 3 and 4; 
 38.12  124.2725, subdivisions 3, 4, 5, and 7; 124.2727, subdivisions 
 38.13  6b, 6c, and 9; 124.314, subdivision 2; 124.321; 124.91, 
 38.14  subdivision 4; 124.912, subdivision 2; 124A.22, subdivisions 4a, 
 38.15  4b, 8a, 8b, 13d, and 13e; 124A.23, subdivisions 2, 3, and 4; 
 38.16  124A.26, subdivisions 2 and 3; 124A.292, subdivisions 3 and 4; 
 38.17  124A.697; 124A.698; 124A.70, subdivisions 1, 2, 3a, and 5; 
 38.18  124A.71; 124A.711; 124A.72; and 124A.73, are repealed for 
 38.19  revenue for fiscal year 2000.  
 38.20     Subd. 2.  [JULY 1, 1997.] Laws 1992, chapter 499, article 
 38.21  7, section 31, is repealed. 
 38.22     Sec. 55.  [EFFECTIVE DATE.] 
 38.23     Sections 1 to 47, 50, and 54, subdivision 1, are effective 
 38.24  beginning fiscal year 2000.  Sections 48, 49, and 53 are 
 38.25  effective for property taxes payable in 1999 and thereafter.  
 38.26  Section 54, subdivision 2, is effective July 1, 1997. 
 38.27                             ARTICLE 2
 38.28                      PROPERTY TAX CLASS RATES
 38.29     Section 1.  Minnesota Statutes 1996, section 273.13, 
 38.30  subdivision 24, is amended to read: 
 38.31     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 38.32  property and utility real and personal property, except class 5 
 38.33  property as identified in subdivision 31, clause (1), is class 
 38.34  3a.  It has a class rate of three percent of the first $100,000 
 38.35  of market value for taxes payable in 1993 and thereafter, and 
 38.36  5.06 percent of the market value over $100,000 for taxes payable 
 39.1   in 1998 and 4.5 percent of the market value over $100,000 for 
 39.2   taxes payable in 1999 and thereafter.  In the case of 
 39.3   state-assessed commercial, industrial, and utility property 
 39.4   owned by one person or entity, only one parcel has a reduced 
 39.5   class rate on the first $100,000 of market value.  In the case 
 39.6   of other commercial, industrial, and utility property owned by 
 39.7   one person or entity, only one parcel in each county has a 
 39.8   reduced class rate on the first $100,000 of market value, except 
 39.9   that: 
 39.10     (1) if the market value of the parcel is less than 
 39.11  $100,000, and additional parcels are owned by the same person or 
 39.12  entity in the same city or town within that county, the reduced 
 39.13  class rate shall be applied up to a combined total market value 
 39.14  of $100,000 for all parcels owned by the same person or entity 
 39.15  in the same city or town within the county; 
 39.16     (2) in the case of grain, fertilizer, and feed elevator 
 39.17  facilities, as defined in section 18C.305, subdivision 1, or 
 39.18  232.21, subdivision 8, the limitation to one parcel per owner 
 39.19  per county for the reduced class rate shall not apply, but there 
 39.20  shall be a limit of $100,000 of preferential value per site of 
 39.21  contiguous parcels owned by the same person or entity.  Only the 
 39.22  value of the elevator portion of each parcel shall qualify for 
 39.23  treatment under this clause.  For purposes of this subdivision, 
 39.24  contiguous parcels include parcels separated only by a railroad 
 39.25  or public road right-of-way; and 
 39.26     (3) in the case of property owned by a nonprofit charitable 
 39.27  organization that qualifies for tax exemption under section 
 39.28  501(c)(3) of the Internal Revenue Code of 1986, as amended 
 39.29  through December 31, 1993, if the property is used as a business 
 39.30  incubator, the limitation to one parcel per owner per county for 
 39.31  the reduced class rate shall not apply, provided that the 
 39.32  reduced rate applies only to the first $100,000 of value per 
 39.33  parcel owned by the organization.  As used in this clause, a 
 39.34  "business incubator" is a facility used for the development of 
 39.35  nonretail businesses, offering access to equipment, space, 
 39.36  services, and advice to the tenant businesses, for the purpose 
 40.1   of encouraging economic development, diversification, and job 
 40.2   creation in the area served by the organization. 
 40.3      To receive the reduced class rate on additional parcels 
 40.4   under clause (1), (2), or (3), the taxpayer must notify the 
 40.5   county assessor that the taxpayer owns more than one parcel that 
 40.6   qualifies under clause (1), (2), or (3). 
 40.7      (b) Employment property defined in section 469.166, during 
 40.8   the period provided in section 469.170, shall constitute class 
 40.9   3b and has a class rate of 2.3 percent of the first $50,000 of 
 40.10  market value and 3.6 percent of the remainder, except that for 
 40.11  employment property located in a border city enterprise zone 
 40.12  designated pursuant to section 469.168, subdivision 4, paragraph 
 40.13  (c), the class rate of the first $100,000 of market value and 
 40.14  the class rate of the remainder is determined under paragraph 
 40.15  (a), unless the governing body of the city designated as an 
 40.16  enterprise zone determines that a specific parcel shall be 
 40.17  assessed pursuant to the first clause of this sentence.  The 
 40.18  governing body may provide for assessment under the first clause 
 40.19  of the preceding sentence only for property which is located in 
 40.20  an area which has been designated by the governing body for the 
 40.21  receipt of tax reductions authorized by section 469.171, 
 40.22  subdivision 1. 
 40.23     (c) Structures which are (i) located on property classified 
 40.24  as class 3a, (ii) constructed under an initial building permit 
 40.25  issued after January 2, 1996, (iii) located in a transit zone as 
 40.26  defined under section 473.3915, subdivision 3, (iv) located 
 40.27  within the boundaries of a school district, and (v) not 
 40.28  primarily used for retail or transient lodging purposes, shall 
 40.29  have a class rate of four percent on that portion of the market 
 40.30  value in excess of $100,000 and any market value under $100,000 
 40.31  that does not qualify for the three percent class rate under 
 40.32  paragraph (a).  As used in item (v), a structure is primarily 
 40.33  used for retail or transient lodging purposes if over 50 percent 
 40.34  of its square footage is used for those purposes.  The four 
 40.35  percent rate shall also apply to improvements to existing 
 40.36  structures that meet the requirements of items (i) to (v) if the 
 41.1   improvements are constructed under an initial building permit 
 41.2   issued after January 2, 1996, even if the remainder of the 
 41.3   structure was constructed prior to January 2, 1996.  For the 
 41.4   purposes of this paragraph, a structure shall be considered to 
 41.5   be located in a transit zone if any portion of the structure 
 41.6   lies within the zone.  If any property once eligible for 
 41.7   treatment under this paragraph ceases to remain eligible due to 
 41.8   revisions in transit zone boundaries, the property shall 
 41.9   continue to receive treatment under this paragraph for a period 
 41.10  of three years. 
 41.11     Sec. 2.  Minnesota Statutes 1996, section 273.13, 
 41.12  subdivision 25, is amended to read: 
 41.13     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 41.14  estate containing four or more units and used or held for use by 
 41.15  the owner or by the tenants or lessees of the owner as a 
 41.16  residence for rental periods of 30 days or more.  Class 4a also 
 41.17  includes hospitals licensed under sections 144.50 to 144.56, 
 41.18  other than hospitals exempt under section 272.02, and contiguous 
 41.19  property used for hospital purposes, without regard to whether 
 41.20  the property has been platted or subdivided.  Class 4a property 
 41.21  in a city with a population of 5,000 or less, that is (1) 
 41.22  located outside of the metropolitan area, as defined in section 
 41.23  473.121, subdivision 2, or outside any county contiguous to the 
 41.24  metropolitan area, and (2) whose city boundary is at least 15 
 41.25  miles from the boundary of any city with a population greater 
 41.26  than 5,000 has a class rate of 2.3 percent of market value for 
 41.27  taxes payable in 1996 and thereafter.  All other Class 4a 
 41.28  property has a class rate of 3.4 percent of market value for 
 41.29  taxes payable in 1996 1998 and 2.5 percent of market value for 
 41.30  taxes payable in 1999 and thereafter.  For purposes of this 
 41.31  paragraph, population has the same meaning given in section 
 41.32  477A.011, subdivision 3. 
 41.33     (b) Class 4b includes: 
 41.34     (1) residential real estate containing less than four 
 41.35  units, other than seasonal residential, and recreational; 
 41.36     (2) manufactured homes not classified under any other 
 42.1   provision; 
 42.2      (3) a dwelling, garage, and surrounding one acre of 
 42.3   property on a nonhomestead farm classified under subdivision 23, 
 42.4   paragraph (b).  
 42.5      Class 4b property has a class rate of 2.8 percent of market 
 42.6   value for taxes payable in 1992, 2.5 percent of market value for 
 42.7   taxes payable in 1993, and 2.3 percent of market value for taxes 
 42.8   payable in 1994 1998 and two percent of market value for taxes 
 42.9   payable in 1999 and thereafter. 
 42.10     (c) Class 4c property includes: 
 42.11     (1) a structure that is:  
 42.12     (i) situated on real property that is used for housing for 
 42.13  the elderly or for low- and moderate-income families as defined 
 42.14  in Title II, as amended through December 31, 1990, of the 
 42.15  National Housing Act or the Minnesota housing finance agency law 
 42.16  of 1971, as amended, or rules promulgated by the agency and 
 42.17  financed by a direct federal loan or federally insured loan made 
 42.18  pursuant to Title II of the Act; or 
 42.19     (ii) situated on real property that is used for housing the 
 42.20  elderly or for low- and moderate-income families as defined by 
 42.21  the Minnesota housing finance agency law of 1971, as amended, or 
 42.22  rules adopted by the agency pursuant thereto and financed by a 
 42.23  loan made by the Minnesota housing finance agency pursuant to 
 42.24  the provisions of the act.  
 42.25     This clause applies only to property of a nonprofit or 
 42.26  limited dividend entity.  Property is classified as class 4c 
 42.27  under this clause for 15 years from the date of the completion 
 42.28  of the original construction or substantial rehabilitation, or 
 42.29  for the original term of the loan.  
 42.30     (2) a structure that is: 
 42.31     (i) situated upon real property that is used for housing 
 42.32  lower income families or elderly or handicapped persons, as 
 42.33  defined in section 8 of the United States Housing Act of 1937, 
 42.34  as amended; and 
 42.35     (ii) owned by an entity which has entered into a housing 
 42.36  assistance payments contract under section 8 which provides 
 43.1   assistance for 100 percent of the dwelling units in the 
 43.2   structure, other than dwelling units intended for management or 
 43.3   maintenance personnel.  Property is classified as class 4c under 
 43.4   this clause for the term of the housing assistance payments 
 43.5   contract, including all renewals, or for the term of its 
 43.6   permanent financing, whichever is shorter; and 
 43.7      (3) a qualified low-income building as defined in section 
 43.8   42(c)(2) of the Internal Revenue Code of 1986, as amended 
 43.9   through December 31, 1990, that (i) receives a low-income 
 43.10  housing credit under section 42 of the Internal Revenue Code of 
 43.11  1986, as amended through December 31, 1990; or (ii) meets the 
 43.12  requirements of that section and receives public financing, 
 43.13  except financing provided under sections 469.174 to 469.179, 
 43.14  which contains terms restricting the rents; or (iii) meets the 
 43.15  requirements of section 273.1317.  Classification pursuant to 
 43.16  this clause is limited to a term of 15 years.  The public 
 43.17  financing received must be from at least one of the following 
 43.18  sources:  government issued bonds exempt from taxes under 
 43.19  section 103 of the Internal Revenue Code of 1986, as amended 
 43.20  through December 31, 1993, the proceeds of which are used for 
 43.21  the acquisition or rehabilitation of the building; programs 
 43.22  under section 221(d)(3), 202, or 236, of Title II of the 
 43.23  National Housing Act; rental housing program funds under Section 
 43.24  8 of the United States Housing Act of 1937 or the market rate 
 43.25  family graduated payment mortgage program funds administered by 
 43.26  the Minnesota housing finance agency that are used for the 
 43.27  acquisition or rehabilitation of the building; public financing 
 43.28  provided by a local government used for the acquisition or 
 43.29  rehabilitation of the building, including grants or loans from 
 43.30  federal community development block grants, HOME block grants, 
 43.31  or residential rental bonds issued under chapter 474A; or other 
 43.32  rental housing program funds provided by the Minnesota housing 
 43.33  finance agency for the acquisition or rehabilitation of the 
 43.34  building. 
 43.35     For all properties described in clauses (1), (2), and (3) 
 43.36  and in paragraph (d), the market value determined by the 
 44.1   assessor must be based on the normal approach to value using 
 44.2   normal unrestricted rents unless the owner of the property 
 44.3   elects to have the property assessed under Laws 1991, chapter 
 44.4   291, article 1, section 55.  If the owner of the property elects 
 44.5   to have the market value determined on the basis of the actual 
 44.6   restricted rents, as provided in Laws 1991, chapter 291, article 
 44.7   1, section 55, the property will be assessed at the rate 
 44.8   provided for class 4a or class 4b property, as appropriate.  
 44.9   Properties described in clauses (1)(ii), (3), and (4) may apply 
 44.10  to the assessor for valuation under Laws 1991, chapter 291, 
 44.11  article 1, section 55.  The land on which these structures are 
 44.12  situated has the class rate given in paragraph (b) if the 
 44.13  structure contains fewer than four units, and the class rate 
 44.14  given in paragraph (a) if the structure contains four or more 
 44.15  units.  This clause applies only to the property of a nonprofit 
 44.16  or limited dividend entity.  
 44.17     (4) a parcel of land, not to exceed one acre, and its 
 44.18  improvements or a parcel of unimproved land, not to exceed one 
 44.19  acre, if it is owned by a neighborhood real estate trust and at 
 44.20  least 60 percent of the dwelling units, if any, on all land 
 44.21  owned by the trust are leased to or occupied by lower income 
 44.22  families or individuals.  This clause does not apply to any 
 44.23  portion of the land or improvements used for nonresidential 
 44.24  purposes.  For purposes of this clause, a lower income family is 
 44.25  a family with an income that does not exceed 65 percent of the 
 44.26  median family income for the area, and a lower income individual 
 44.27  is an individual whose income does not exceed 65 percent of the 
 44.28  median individual income for the area, as determined by the 
 44.29  United States Secretary of Housing and Urban Development.  For 
 44.30  purposes of this clause, "neighborhood real estate trust" means 
 44.31  an entity which is certified by the governing body of the 
 44.32  municipality in which it is located to have the following 
 44.33  characteristics: 
 44.34     (a) it is a nonprofit corporation organized under chapter 
 44.35  317A; 
 44.36     (b) it has as its principal purpose providing housing for 
 45.1   lower income families in a specific geographic community 
 45.2   designated in its articles or bylaws; 
 45.3      (c) it limits membership with voting rights to residents of 
 45.4   the designated community; and 
 45.5      (d) it has a board of directors consisting of at least 
 45.6   seven directors, 60 percent of whom are members with voting 
 45.7   rights and, to the extent feasible, 25 percent of whom are 
 45.8   elected by resident members of buildings owned by the trust; and 
 45.9      (5) except as provided in subdivision 22, paragraph (c), 
 45.10  real property devoted to temporary and seasonal residential 
 45.11  occupancy for recreation purposes, including real property 
 45.12  devoted to temporary and seasonal residential occupancy for 
 45.13  recreation purposes and not devoted to commercial purposes for 
 45.14  more than 250 days in the year preceding the year of 
 45.15  assessment.  For purposes of this clause, property is devoted to 
 45.16  a commercial purpose on a specific day if any portion of the 
 45.17  property is used for residential occupancy, and a fee is charged 
 45.18  for residential occupancy.  Class 4c also includes commercial 
 45.19  use real property used exclusively for recreational purposes in 
 45.20  conjunction with class 4c property devoted to temporary and 
 45.21  seasonal residential occupancy for recreational purposes, up to 
 45.22  a total of two acres, provided the property is not devoted to 
 45.23  commercial recreational use for more than 250 days in the year 
 45.24  preceding the year of assessment and is located within two miles 
 45.25  of the class 4c property with which it is used.  Class 4c 
 45.26  property classified in this clause also includes the remainder 
 45.27  of class 1c resorts.  Owners of real property devoted to 
 45.28  temporary and seasonal residential occupancy for recreation 
 45.29  purposes and all or a portion of which was devoted to commercial 
 45.30  purposes for not more than 250 days in the year preceding the 
 45.31  year of assessment desiring classification as class 1c or 4c, 
 45.32  must submit a declaration to the assessor designating the cabins 
 45.33  or units occupied for 250 days or less in the year preceding the 
 45.34  year of assessment by January 15 of the assessment year.  Those 
 45.35  cabins or units and a proportionate share of the land on which 
 45.36  they are located will be designated class 1c or 4c as otherwise 
 46.1   provided.  The remainder of the cabins or units and a 
 46.2   proportionate share of the land on which they are located will 
 46.3   be designated as class 3a.  The first $100,000 of the market 
 46.4   value of the remainder of the cabins or units and a 
 46.5   proportionate share of the land on which they are located shall 
 46.6   have a class rate of three percent.  The owner of property 
 46.7   desiring designation as class 1c or 4c property must provide 
 46.8   guest registers or other records demonstrating that the units 
 46.9   for which class 1c or 4c designation is sought were not occupied 
 46.10  for more than 250 days in the year preceding the assessment if 
 46.11  so requested.  The portion of a property operated as a (1) 
 46.12  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 46.13  facility operated on a commercial basis not directly related to 
 46.14  temporary and seasonal residential occupancy for recreation 
 46.15  purposes shall not qualify for class 1c or 4c; 
 46.16     (6) real property up to a maximum of one acre of land owned 
 46.17  by a nonprofit community service oriented organization; provided 
 46.18  that the property is not used for a revenue-producing activity 
 46.19  for more than six days in the calendar year preceding the year 
 46.20  of assessment and the property is not used for residential 
 46.21  purposes on either a temporary or permanent basis.  For purposes 
 46.22  of this clause, a "nonprofit community service oriented 
 46.23  organization" means any corporation, society, association, 
 46.24  foundation, or institution organized and operated exclusively 
 46.25  for charitable, religious, fraternal, civic, or educational 
 46.26  purposes, and which is exempt from federal income taxation 
 46.27  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 46.28  Revenue Code of 1986, as amended through December 31, 1990.  For 
 46.29  purposes of this clause, "revenue-producing activities" shall 
 46.30  include but not be limited to property or that portion of the 
 46.31  property that is used as an on-sale intoxicating liquor or 3.2 
 46.32  percent malt liquor establishment licensed under chapter 340A, a 
 46.33  restaurant open to the public, bowling alley, a retail store, 
 46.34  gambling conducted by organizations licensed under chapter 349, 
 46.35  an insurance business, or office or other space leased or rented 
 46.36  to a lessee who conducts a for-profit enterprise on the 
 47.1   premises.  Any portion of the property which is used for 
 47.2   revenue-producing activities for more than six days in the 
 47.3   calendar year preceding the year of assessment shall be assessed 
 47.4   as class 3a.  The use of the property for social events open 
 47.5   exclusively to members and their guests for periods of less than 
 47.6   24 hours, when an admission is not charged nor any revenues are 
 47.7   received by the organization shall not be considered a 
 47.8   revenue-producing activity; 
 47.9      (7) post-secondary student housing of not more than one 
 47.10  acre of land that is owned by a nonprofit corporation organized 
 47.11  under chapter 317A and is used exclusively by a student 
 47.12  cooperative, sorority, or fraternity for on-campus housing or 
 47.13  housing located within two miles of the border of a college 
 47.14  campus; and 
 47.15     (8) manufactured home parks as defined in section 327.14, 
 47.16  subdivision 3. 
 47.17     Class 4c property has a class rate of 2.3 percent of market 
 47.18  value, except that (i) for each parcel of seasonal residential 
 47.19  recreational property not used for commercial purposes under 
 47.20  clause (5) the first $72,000 of market value on each parcel has 
 47.21  a class rate of 1.75 percent for taxes payable in 1997 and 1.5 
 47.22  percent for taxes payable in 1998 and thereafter, and the market 
 47.23  value of each parcel that exceeds $72,000 has a class rate of 
 47.24  2.5 percent, and (ii) manufactured home parks assessed under 
 47.25  clause (8) have a class rate of two percent for taxes payable in 
 47.26  1996, and thereafter.  
 47.27     (d) Class 4d property includes: 
 47.28     (1) a structure that is: 
 47.29     (i) situated on real property that is used for housing for 
 47.30  the elderly or for low and moderate income families as defined 
 47.31  by the Farmers Home Administration; 
 47.32     (ii) located in a municipality of less than 10,000 
 47.33  population; and 
 47.34     (iii) financed by a direct loan or insured loan from the 
 47.35  Farmers Home Administration.  Property is classified under this 
 47.36  clause for 15 years from the date of the completion of the 
 48.1   original construction or for the original term of the loan.  
 48.2      The class rates in paragraph (c), clauses (1), (2), and (3) 
 48.3   and this clause apply to the properties described in them, only 
 48.4   in proportion to occupancy of the structure by elderly or 
 48.5   handicapped persons or low and moderate income families as 
 48.6   defined in the applicable laws unless construction of the 
 48.7   structure had been commenced prior to January 1, 1984; or the 
 48.8   project had been approved by the governing body of the 
 48.9   municipality in which it is located prior to June 30, 1983; or 
 48.10  financing of the project had been approved by a federal or state 
 48.11  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 48.12  classification is available only for those units meeting the 
 48.13  requirements of section 273.1318. 
 48.14     Classification under this clause is only available to 
 48.15  property of a nonprofit or limited dividend entity. 
 48.16     In the case of a structure financed or refinanced under any 
 48.17  federal or state mortgage insurance or direct loan program 
 48.18  exclusively for housing for the elderly or for housing for the 
 48.19  handicapped, a unit shall be considered occupied so long as it 
 48.20  is actually occupied by an elderly or handicapped person or, if 
 48.21  vacant, is held for rental to an elderly or handicapped person. 
 48.22     (2) For taxes payable in 1992, 1993, and 1994, only, 
 48.23  buildings and appurtenances, together with the land upon which 
 48.24  they are located, leased by the occupant under the community 
 48.25  lending model lease-purchase mortgage loan program administered 
 48.26  by the Federal National Mortgage Association, provided the 
 48.27  occupant's income is no greater than 60 percent of the county or 
 48.28  area median income, adjusted for family size and the building 
 48.29  consists of existing single family or duplex housing.  The lease 
 48.30  agreement must provide for a portion of the lease payment to be 
 48.31  escrowed as a nonrefundable down payment on the housing.  To 
 48.32  qualify under this clause, the taxpayer must apply to the county 
 48.33  assessor by May 30 of each year.  The application must be 
 48.34  accompanied by an affidavit or other proof required by the 
 48.35  assessor to determine qualification under this clause. 
 48.36     (3) Qualifying buildings and appurtenances, together with 
 49.1   the land upon which they are located, leased for a period of up 
 49.2   to five years by the occupant under a lease-purchase program 
 49.3   administered by the Minnesota housing finance agency or a 
 49.4   housing and redevelopment authority authorized under sections 
 49.5   469.001 to 469.047, provided the occupant's income is no greater 
 49.6   than 80 percent of the county or area median income, adjusted 
 49.7   for family size, and the building consists of two or less 
 49.8   dwelling units.  The lease agreement must provide for a portion 
 49.9   of the lease payment to be escrowed as a nonrefundable down 
 49.10  payment on the housing.  The administering agency shall verify 
 49.11  the occupants income eligibility and certify to the county 
 49.12  assessor that the occupant meets the income criteria under this 
 49.13  paragraph.  To qualify under this clause, the taxpayer must 
 49.14  apply to the county assessor by May 30 of each year.  For 
 49.15  purposes of this section, "qualifying buildings and 
 49.16  appurtenances" shall be defined as one or two unit residential 
 49.17  buildings which are unoccupied and have been abandoned and 
 49.18  boarded for at least six months. 
 49.19     Class 4d property has a class rate of two percent of market 
 49.20  value except that property classified under clause (3), shall 
 49.21  have the same class rate as class 1a property. 
 49.22     (e) Residential rental property that would otherwise be 
 49.23  assessed as class 4 property under paragraph (a); paragraph (b), 
 49.24  clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 49.25  (4), is assessed at the class rate applicable to it under 
 49.26  Minnesota Statutes 1988, section 273.13, if it is found to be a 
 49.27  substandard building under section 273.1316.  Residential rental 
 49.28  property that would otherwise be assessed as class 4 property 
 49.29  under paragraph (d) is assessed at 2.3 percent of market value 
 49.30  if it is found to be a substandard building under section 
 49.31  273.1316. 
 49.32     (f) Class 4e property consists of the residential portion 
 49.33  of any structure located within a city that was converted from 
 49.34  nonresidential use to residential use, provided that: 
 49.35     (1) the structure had formerly been used as a warehouse; 
 49.36     (2) the structure was originally constructed prior to 1940; 
 50.1      (3) the conversion was done after December 31, 1995, but 
 50.2   before January 1, 2003; and 
 50.3      (4) the conversion involved an investment of at least 
 50.4   $25,000 per residential unit. 
 50.5      Class 4e property has a class rate of 2.3 percent, provided 
 50.6   that a structure is eligible for class 4e classification only in 
 50.7   the 12 assessment years immediately following the conversion. 
 50.8      Sec. 3.  Minnesota Statutes 1996, section 273.13, is 
 50.9   amended by adding a subdivision to read: 
 50.10     Subd. 34.  [INFLATION ADJUSTMENT.] Beginning for property 
 50.11  taxes assessed in 1999, payable in 2000, the commissioner shall 
 50.12  annually adjust the valuation limits specified in subdivisions 
 50.13  22 and 23 for inflation.  The commissioner shall make the 
 50.14  inflation adjustments in accordance with section 290.06, 
 50.15  subdivision 2d, except that for purposes of this subdivision the 
 50.16  percentage increase shall be determined from the year ending on 
 50.17  August 31, 1997, to the year ending on August 31 of the year 
 50.18  preceding the assessment year.  The commissioner shall round the 
 50.19  valuation limits to the nearest $1,000 value.  The commissioner 
 50.20  shall annually announce the adjusted valuation limits at the 
 50.21  same time provided under section 290.06.  The determination of 
 50.22  the commissioner under this subdivision is not a rule under the 
 50.23  Administrative Procedure Act. 
 50.24     Sec. 4.  [REPEALER.] 
 50.25     Minnesota Statutes 1996, section 273.13, subdivision 32, is 
 50.26  repealed. 
 50.27     Sec. 5.  [EFFECTIVE DATE.] 
 50.28     Sections 1 to 4 are effective for taxes levied in 1998, 
 50.29  payable in 1999, and thereafter. 
 50.30                             ARTICLE 3
 50.31                             STATE AIDS
 50.32     Section 1.  Minnesota Statutes 1996, section 273.1398, 
 50.33  subdivision 1, is amended to read: 
 50.34     Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
 50.35  terms defined in this subdivision have the meanings given them. 
 50.36     (b) "Unique taxing jurisdiction" means the geographic area 
 51.1   subject to the same set of local tax rates. 
 51.2      (c) "Previous net tax capacity" means the product of the 
 51.3   appropriate net class rates for the year previous to the year in 
 51.4   which the aid is payable, and estimated market values for the 
 51.5   assessment two years prior to that in which aid is payable.  
 51.6   "Total previous net tax capacity" means the previous net tax 
 51.7   capacities for all property within the unique taxing 
 51.8   jurisdiction.  The total previous net tax capacity shall be 
 51.9   reduced by the sum of (1) the unique taxing jurisdiction's 
 51.10  previous net tax capacity of commercial-industrial property as 
 51.11  defined in section 473F.02, subdivision 3, or 276A.02, 
 51.12  subdivision 3, multiplied by the ratio determined pursuant to 
 51.13  section 473F.08, subdivision 6, or 276A.06, subdivision 7, for 
 51.14  the municipality, as defined in section 473F.02, subdivision 8, 
 51.15  or 276A.06, subdivision 7, in which the unique taxing 
 51.16  jurisdiction is located, (2) the previous net tax capacity of 
 51.17  the captured value of tax increment financing districts as 
 51.18  defined in section 469.177, subdivision 2, and (3) the previous 
 51.19  net tax capacity of transmission lines deducted from a local 
 51.20  government's total net tax capacity under section 273.425.  
 51.21  Previous net tax capacity cannot be less than zero. 
 51.22     (d) "Equalized market values" are market values that have 
 51.23  been equalized by dividing the assessor's estimated market value 
 51.24  for the second year prior to that in which the aid is payable by 
 51.25  the assessment sales ratios determined by class in the 
 51.26  assessment sales ratio study conducted by the department of 
 51.27  revenue pursuant to section 124.2131 in the second year prior to 
 51.28  that in which the aid is payable.  The equalized market values 
 51.29  shall equal the unequalized market values divided by the 
 51.30  assessment sales ratio. 
 51.31     (e) "Equalized school levies" means the amounts levied for: 
 51.32     (1) general education under section 124A.23, subdivision 2; 
 51.33     (2) supplemental revenue under section 124A.22, subdivision 
 51.34  8a; 
 51.35     (3) transition revenue under section 124A.22, subdivision 
 51.36  13c; 
 52.1      (4) basic transportation under section 124.226, subdivision 
 52.2   1; and 
 52.3      (5) referendum revenue under section 124A.03. 
 52.4      (f) "Current local tax rate" means the quotient derived by 
 52.5   dividing the taxes levied within a unique taxing jurisdiction 
 52.6   for taxes payable in the year prior to that for which aids are 
 52.7   being calculated by the total previous net tax capacity of the 
 52.8   unique taxing jurisdiction.  
 52.9      (g) For purposes of calculating and allocating homestead 
 52.10  and agricultural credit aid authorized pursuant to subdivision 2 
 52.11  and the disparity reduction aid authorized in subdivision 3, 
 52.12  "gross taxes levied on all properties," "gross taxes," or "taxes 
 52.13  levied" means the total net tax capacity based taxes levied on 
 52.14  all properties except that levied on the captured value of tax 
 52.15  increment districts as defined in section 469.177, subdivision 
 52.16  2, and that levied on the portion of commercial industrial 
 52.17  properties' assessed value or gross tax capacity, as defined in 
 52.18  section 473F.02, subdivision 3, subject to the areawide tax as 
 52.19  provided in section 473F.08, subdivision 6, in a unique taxing 
 52.20  jurisdiction.  "Gross taxes" are before any reduction for 
 52.21  disparity reduction aid but "taxes levied" are after any 
 52.22  reduction for disparity reduction aid.  Gross taxes levied or 
 52.23  taxes levied cannot be less than zero.  
 52.24     "Taxes levied" excludes equalized school levies. 
 52.25     (h) "Household adjustment factor" means the number of 
 52.26  households for the second most recent year preceding that in 
 52.27  which the aids are payable divided by the number of households 
 52.28  for the third most recent year.  The household adjustment factor 
 52.29  cannot be less than one.  
 52.30     (i) "Growth adjustment factor" means the household 
 52.31  adjustment factor in the case of counties.  In the case of 
 52.32  cities, towns, school districts, and special taxing districts, 
 52.33  the growth adjustment factor equals one.  The growth adjustment 
 52.34  factor cannot be less than one.  "Homestead and agricultural aid 
 52.35  reduction percentage" means the ratio of (1) two-thirds of the 
 52.36  increase in the city local government aid appropriation under 
 53.1   section 477A.03, subdivision 2, over the appropriated amount in 
 53.2   1998 to (2) the amount of total city homestead and agricultural 
 53.3   credit aid paid in 1998.  
 53.4      (j) "Homestead and agricultural credit base" means the 
 53.5   previous year's certified homestead and agricultural credit aid 
 53.6   determined under subdivision 2 less any permanent aid reduction 
 53.7   in the previous year to homestead and agricultural credit aid.  
 53.8      (k) "Net tax capacity adjustment" means (1) the tax base 
 53.9   differential defined in subdivision 1a, multiplied by (2) the 
 53.10  unique taxing jurisdiction's current local tax rate.  The net 
 53.11  tax capacity adjustment cannot be less than zero. 
 53.12     (l) "Fiscal disparity adjustment" means a taxing 
 53.13  jurisdiction's fiscal disparity distribution levy under section 
 53.14  473F.08, subdivision 3, clause (a), or 276A.06, subdivision 3, 
 53.15  clause (a), for taxes payable in the year prior to that for 
 53.16  which aids are being calculated, multiplied by the ratio of the 
 53.17  tax base differential percent referenced in subdivision 1a for 
 53.18  the highest class rate for class 3 property for taxes payable in 
 53.19  the year prior to that for which aids are being calculated to 
 53.20  the highest class rate for class 3 property for taxes payable in 
 53.21  the second prior year to that for which aids are being 
 53.22  calculated.  In the case of school districts, the fiscal 
 53.23  disparity distribution levy shall exclude that part of the levy 
 53.24  attributable to equalized school levies. 
 53.25     Sec. 2.  Minnesota Statutes 1996, section 273.1398, 
 53.26  subdivision 2, is amended to read: 
 53.27     Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] (a) 
 53.28  Homestead and agricultural credit aid for each unique taxing 
 53.29  jurisdiction city equals the product of (1) the homestead and 
 53.30  agricultural credit aid base, and (2) the growth adjustment 
 53.31  factor, plus the net tax capacity adjustment and the fiscal 
 53.32  disparity adjustment the city's certified homestead and 
 53.33  agricultural credit aid under this subdivision for calendar year 
 53.34  1998 multiplied by one minus the city's homestead and 
 53.35  agricultural aid reduction percentage.  
 53.36     (b) Homestead and agricultural credit aid for each county 
 54.1   and special taxing district equals its homestead and 
 54.2   agricultural credit base less 12.5 percent of its 1998 certified 
 54.3   homestead and agricultural credit aid under this subdivision. 
 54.4      (c) Homestead and agricultural credit aid is not paid to 
 54.5   school districts and towns. 
 54.6      Sec. 3.  Minnesota Statutes 1996, section 273.1398, 
 54.7   subdivision 3, is amended to read: 
 54.8      Subd. 3.  [DISPARITY REDUCTION AID.] For taxes payable in 
 54.9   1995, and subsequent years, the amount of disparity aid 
 54.10  certified for each taxing district except school districts 
 54.11  within each unique taxing jurisdiction for taxes payable in the 
 54.12  prior year shall be multiplied by the ratio of (1) the 
 54.13  jurisdiction's tax capacity using the class rates for taxes 
 54.14  payable in the year for which aid is being computed, to (2) its 
 54.15  tax capacity using the class rates for taxes payable in the year 
 54.16  prior to that for which aid is being computed, both based upon 
 54.17  market values for taxes payable in the year prior to that for 
 54.18  which aid is being computed.  For the purposes of this aid 
 54.19  determination, disparity reduction aid certified for taxes 
 54.20  payable in the prior year for a taxing entity other than a town 
 54.21  or school district is deemed to be county government disparity 
 54.22  reduction aid.  For taxes payable in 1992 and subsequent years, 
 54.23  the amount of disparity aid certified to each taxing 
 54.24  jurisdiction shall be reduced by any reductions required in the 
 54.25  current year or permanent reductions required in previous years 
 54.26  under section 477A.0132.  Disparity reduction aid is not paid to 
 54.27  school districts. 
 54.28     Sec. 4.  Minnesota Statutes 1996, section 273.1398, 
 54.29  subdivision 8, is amended to read: 
 54.30     Subd. 8.  [APPROPRIATION.] An amount sufficient to pay the 
 54.31  aids and credits provided under this section for school 
 54.32  districts, intermediate school districts, or any group of school 
 54.33  districts levying as a single taxing entity, is annually 
 54.34  appropriated from the general fund to the commissioner of 
 54.35  children, families, and learning.  An amount sufficient to pay 
 54.36  the aids and credits provided under this section for counties, 
 55.1   cities, towns, and special taxing districts is annually 
 55.2   appropriated from the general fund to the commissioner of 
 55.4   revenue.  A jurisdiction's aid amount may be increased or 
 55.5   decreased based on any prior year adjustments for homestead 
 55.6   credit or other property tax credit or aid programs. 
 55.7      An amount equal to the difference between (1) the total 
 55.8   special taxing district homestead and agricultural credit aid 
 55.9   certified to be paid in 1998, and (2) the total special district 
 55.10  homestead and agricultural credit aid certified to be paid in 
 55.11  the current year is annually appropriated from the general fund 
 55.12  to the metropolitan council for metropolitan transit operations. 
 55.13     Sec. 5.  Minnesota Statutes 1996, section 298.28, 
 55.14  subdivision 5, is amended to read: 
 55.15     Subd. 5.  [COUNTIES.] (a) 16.5 33 cents per taxable ton is 
 55.16  allocated to counties to be distributed, based upon 
 55.17  certification by the commissioner of revenue, under paragraphs 
 55.18  (b) to (d). 
 55.19     (b) 13 26 cents per taxable ton shall be distributed to the 
 55.20  county in which the taconite is mined or quarried or in which 
 55.21  the concentrate is produced, less any amount which is to be 
 55.22  distributed pursuant to paragraph (c).  The apportionment 
 55.23  formula prescribed in subdivision 2 is the basis for the 
 55.24  distribution. 
 55.25     (c) If an electric power plant owned by and providing the 
 55.26  primary source of power for a taxpayer mining and concentrating 
 55.27  taconite is located in a county other than the county in which 
 55.28  the mining and the concentrating processes are conducted, one 
 55.29  cent 2 cents per taxable ton of the tax distributed to the 
 55.30  counties pursuant to paragraph (b) and imposed on and collected 
 55.31  from such taxpayer shall be paid to the county in which the 
 55.32  power plant is located. 
 55.33     (d) 3.5 7 cents per taxable ton shall be paid to the county 
 55.34  from which the taconite was mined, quarried or concentrated to 
 55.35  be deposited in the county road and bridge fund.  If the mining, 
 55.36  quarrying and concentrating, or separate steps in any of those 
 55.37  processes are carried on in more than one county, the 
 56.1   commissioner shall follow the apportionment formula prescribed 
 56.2   in subdivision 2. 
 56.3      Sec. 6.  Minnesota Statutes 1996, section 477A.011, is 
 56.4   amended by adding a subdivision to read: 
 56.5      Subd. 3b.  [SPRAWL POPULATION.] For a city with a 
 56.6   population of 5,000 or more which is located outside of the 
 56.7   metropolitan area, the "sprawl population" is equal to the total 
 56.8   population of all municipalities and unorganized townships that 
 56.9   have a geographic center closer to the geographic center of that 
 56.10  city than to the geographic center of any other city with a 
 56.11  population of 5,000 or more.  For a city with a population that 
 56.12  is less than 5,000 or a city located in the metropolitan area, 
 56.13  the sprawl population is zero. 
 56.14     Sec. 7.  Minnesota Statutes 1996, section 477A.011, is 
 56.15  amended by adding a subdivision to read: 
 56.16     Subd. 3c.  [ADJUSTED POPULATION.] "Adjusted population" is 
 56.17  the sum of a city's population plus five percent of the city's 
 56.18  sprawl population. 
 56.19     Sec. 8.  Minnesota Statutes 1996, section 477A.011, is 
 56.20  amended by adding a subdivision to read: 
 56.21     Subd. 3d.  [POVERTY ADJUSTED POPULATION.] "Poverty adjusted 
 56.22  population" means the sum of (1) the county's population, and 
 56.23  (2) three times the average unduplicated number of persons who 
 56.24  receive benefits per month under general assistance, medical 
 56.25  assistance, or AFDC, or its successor program, as determined 
 56.26  under section 256E.06. 
 56.27     Sec. 9.  Minnesota Statutes 1996, section 477A.011, 
 56.28  subdivision 20, is amended to read: 
 56.29     Subd. 20.  [CITY NET TAX CAPACITY.] "City Net tax capacity" 
 56.30  for a local taxing jurisdiction means (1) the net tax capacity 
 56.31  computed using the net tax capacity rates in section 273.13, and 
 56.32  the market values for taxes payable in the year prior to the aid 
 56.33  distribution plus (2) a city's jurisdiction's fiscal disparities 
 56.34  distribution tax capacity under section 276A.06, subdivision 2, 
 56.35  paragraph (b), or 473F.08, subdivision 2, paragraph (b), for 
 56.36  taxes payable in the year prior to that for which aids are being 
 57.1   calculated.  The market value utilized in computing city a 
 57.2   jurisdiction's net tax capacity shall be reduced by the sum of 
 57.3   (1) a city's the jurisdiction's market value of commercial 
 57.4   industrial property as defined in section 276A.01, subdivision 
 57.5   3, or 473F.02, subdivision 3, multiplied by the ratio determined 
 57.6   pursuant to section 276A.06, subdivision 2, paragraph (a), or 
 57.7   473F.08, subdivision 2, paragraph (a), (2) the market value of 
 57.8   the captured value of tax increment financing districts as 
 57.9   defined in section 469.177, subdivision 2, and (3) the market 
 57.10  value of transmission lines deducted from a city's the 
 57.11  jurisdiction's total net tax capacity under section 273.425.  
 57.12  The county or city net tax capacity will be computed using 
 57.13  equalized market values.  
 57.14     Sec. 10.  Minnesota Statutes 1996, section 477A.011, is 
 57.15  amended by adding a subdivision to read: 
 57.16     Subd. 34a.  [ADJUSTED CITY REVENUE NEED.] For metropolitan 
 57.17  cities that are: 
 57.18     (1) cities of the second, third, fourth, or fifth class; 
 57.19  and 
 57.20     (2) contiguous to a city of the first class or contiguous 
 57.21  to a city that is contiguous to a city of the first class; and 
 57.22     (3) have a median household income under $50,000 according 
 57.23  to the most recent census, 
 57.24  the adjusted city revenue need equals 1.2 times the city revenue 
 57.25  need.  For all other cities, the adjusted city revenue need 
 57.26  equals the city revenue need. 
 57.27     Sec. 11.  Minnesota Statutes 1996, section 477A.011, 
 57.28  subdivision 35, is amended to read: 
 57.29     Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" for a type 
 57.30  of taxing jurisdiction means the sum of the net levy for 
 57.31  all cities jurisdictions of that type divided by the sum of the 
 57.32  city net tax capacity for all cities jurisdictions of that type. 
 57.33  For purposes of this section, "net levy" means the city levy, 
 57.34  after all adjustments, used for calculating the local tax rate 
 57.35  under section 275.08 for taxes payable in the year prior to the 
 57.36  aid distribution.  The fiscal disparity distribution levy under 
 58.1   chapter 276A or 473F is included in net levy. 
 58.2      Sec. 12.  Minnesota Statutes 1996, section 477A.011, 
 58.3   subdivision 37, is amended to read: 
 58.4      Subd. 37.  [BASE REDUCTION PERCENTAGE.] "Base reduction 
 58.5   percentage" is a percentage equal to two-thirds of the product 
 58.6   of:  (1) the difference between the amount available for city 
 58.7   aid under section 477A.03 for the year for which aid is being 
 58.8   calculated and the amount available for city aid under section 
 58.9   477A.03 for calendar year 1994 1998, (2) divided by the sum of 
 58.10  the city aid base for all cities and (3) multiplied by 100.  The 
 58.11  reduction percentage for any year may not be less than the 
 58.12  reduction percentage from the previous year.  For aid paid in 
 58.13  calendar year 1994, the reduction percentage is zero.  The 
 58.14  reduction percentage may not be more than 100 percent. 
 58.15     Sec. 13.  Minnesota Statutes 1996, section 477A.011, is 
 58.16  amended by adding a subdivision to read: 
 58.17     Subd. 38.  [ACRES.] The number of acres in a county are the 
 58.18  number of acres of land in the jurisdiction, according to the 
 58.19  most recent federal census, adjusted for any annexations and 
 58.20  detachments as provided under section 477A.014, subdivision 1. 
 58.21     Sec. 14.  [477A.0125] [COUNTY AID DISTRIBUTIONS.] 
 58.22     Subdivision 1.  [FORMULA AMOUNT.] In calendar year 1999 and 
 58.23  subsequent years, each county shall receive an aid amount equal 
 58.24  to the product of (1) an aid percentage, and (2) the sum of (i) 
 58.25  its poverty weighted population multiplied by 145; and (ii) its 
 58.26  acres of land multiplied by .40; minus its net tax capacity 
 58.27  multiplied by 50 percent of the county tax effort rate.  The aid 
 58.28  percentage shall be calculated by the department of revenue so 
 58.29  that the total aid paid to counties under this section equals 
 58.30  the amount available for distribution under section 477A.03. 
 58.31     Sec. 15.  Minnesota Statutes 1996, section 477A.013, 
 58.32  subdivision 1, is amended to read: 
 58.33     Subdivision 1.  [TOWNS.] In 1994 each town that had levied 
 58.34  for taxes payable in the prior year a local tax rate of at least 
 58.35  .008 shall receive a distribution equal to the amount it 
 58.36  received in 1993 under this section before any nonpermanent 
 59.1   reductions made under section 477A.0132.  In 1995 each town that 
 59.2   had levied for taxes payable in 1993 a local tax rate of at 
 59.3   least .008 shall receive a distribution equal to 102 percent of 
 59.4   the amount it received in 1994 under this section before any 
 59.5   increases or reductions under sections 16A.711, subdivision 5, 
 59.6   and 477A.0132.  In 1996 and subsequent years each town that had 
 59.7   levied for taxes payable in 1993 a local tax rate of at least 
 59.8   .008 shall receive a distribution equal to the amount it 
 59.9   received in the previous year under this section, adjusted for 
 59.10  inflation as provided under section 477A.03, subdivision 3. In 
 59.11  calendar year 1999 and subsequent years, the amount of aid that 
 59.12  a town receives is equal to the sum of (1) its agricultural 
 59.13  homestead and agricultural credit aid under section 273.1398, 
 59.14  subdivision 2, for aid paid in calendar year 1998, and (2) the 
 59.15  amount it received in calendar year 1998 under this section. 
 59.16     Sec. 16.  Minnesota Statutes 1996, section 477A.013, 
 59.17  subdivision 8, is amended to read: 
 59.18     Subd. 8.  [CITY FORMULA AID.] In calendar year 1994 and 
 59.19  subsequent years, the formula aid for a city is equal to the 
 59.20  need increase percentage multiplied by the difference between 
 59.21  (1) the adjusted city's revenue need multiplied by its adjusted 
 59.22  population, and (2) the city's net tax capacity multiplied by 
 59.23  the tax effort rate.  No city may have a formula aid amount less 
 59.24  than zero.  The need increase percentage must be the same for 
 59.25  all cities.  
 59.26     Notwithstanding the prior sentence, in 1995 only, the need 
 59.27  increase percentage for a city shall be twice the need increase 
 59.28  percentage applicable to other cities if:  
 59.29     (1) the city, in 1992 or 1993, transferred an amount from 
 59.30  governmental funds to their sewer and water fund, and 
 59.31     (2) the amount transferred exceeded their net levy for 
 59.32  taxes payable in the year in which the transfer occurred. 
 59.33     The applicable need increase percentage or percentages must 
 59.34  be calculated by the department of revenue so that the total of 
 59.35  the aid under subdivision 9 equals the total amount available 
 59.36  for aid under section 477A.03.  
 60.1      Sec. 17.  Minnesota Statutes 1996, section 477A.013, 
 60.2   subdivision 9, is amended to read: 
 60.3      Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 60.4   1994 1999 and thereafter, each city shall receive an aid 
 60.5   distribution equal to the sum of (1) the city formula aid under 
 60.6   subdivision 8, and (2) its city aid base multiplied by a 
 60.7   percentage equal to 100 minus the base reduction percentage. 
 60.8      (b) The percentage increase for a first class city in 
 60.9   calendar year 1995 and thereafter shall not exceed the 
 60.10  percentage increase in the sum of the aid to all cities under 
 60.11  this section in the current calendar year compared to the sum of 
 60.12  the aid to all cities in the previous year. 
 60.13     (c) The total aid for any city, except a first class city, 
 60.14  shall not exceed the sum of (1) ten percent of the city's net 
 60.15  levy for the year prior to the aid distribution plus (2) its 
 60.16  total aid in the previous year before any increases or decreases 
 60.17  under sections 16A.711, subdivision 5, and 477A.0132. 
 60.18     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
 60.19  which in 1992 or 1993 transferred an amount from governmental 
 60.20  funds to their sewer and water fund in an amount greater than 
 60.21  their net levy for taxes payable in the year in which the 
 60.22  transfer occurred, the total aid shall not exceed the sum of (1) 
 60.23  20 percent of the city's net levy for the year prior to the aid 
 60.24  distribution plus (2) its total aid in the previous year before 
 60.25  any increases or decreases under sections 16A.711, subdivision 
 60.26  5, and 477A.0132. 
 60.27     Sec. 18.  Minnesota Statutes 1996, section 477A.014, is 
 60.28  amended by adding a subdivision to read: 
 60.29     Subd. 6.  [APPROPRIATION.] The amount necessary to pay the 
 60.30  amounts certified under subdivision 4 is annually appropriated 
 60.31  from the general fund to the commissioner of revenue. 
 60.32     Sec. 19.  Minnesota Statutes 1996, section 477A.03, 
 60.33  subdivision 2, is amended to read: 
 60.34     Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 60.35  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 60.36  annually appropriated from the general fund to the commissioner 
 61.1   of revenue.  For aids payable in 1996 1999 and thereafter, the 
 61.2   total aids paid under sections 477A.013, subdivision 9, 
 61.3   477A.0121 and 477A.0122 are the amounts certified to be paid in 
 61.4   the previous year, adjusted for inflation as provided under 
 61.5   subdivision 3.  For aid payable in 1999 and thereafter, aid 
 61.6   payments to counties under section 477A.0121 are limited to 
 61.7   $20,265,000 in 1996. 477A.0125 are limited to an amount equal to 
 61.8   the difference between (1) the total county homestead and 
 61.9   agricultural credit aid certified to be paid in 1998, adjusted 
 61.10  for inflation as provided in subdivision 3, and (2) the total 
 61.11  county homestead and agricultural credit aid certified to be 
 61.12  paid in the current year.  For aid payable in 2000 and 
 61.13  thereafter, aid payments to counties under section 477A.0125 are 
 61.14  limited to an amount equal to the difference between (1) the sum 
 61.15  of the total county homestead and agricultural credit aid 
 61.16  certified to be paid in the previous year and the aid under 
 61.17  section 477A.0125 certified to be paid under the previous year, 
 61.18  adjusted for inflation as provided under subdivision 3, and (2) 
 61.19  the total county homestead and agricultural credit aid certified 
 61.20  to be paid in the current year.  For aid payable in 1999, aid 
 61.21  payments to counties under section 477A.0121 are limited to 
 61.22  $27,571,625 in 1997.  For aid payable in 1998 and thereafter, 
 61.23  the total aids paid under section 477A.0121 are the amounts 
 61.24  certified to be paid in the previous year, adjusted for 
 61.25  inflation as provided under subdivision 3. cities under section 
 61.26  477A.013, subdivision 9, are limited to the amounts certified to 
 61.27  be paid the previous year, less the reduction under Minnesota 
 61.28  Statutes 1996, section 477A.014, subdivision 5, for the previous 
 61.29  year, multiplied by three times the adjustment for inflation 
 61.30  provided under subdivision 3.  For aid payable in 2000 and 
 61.31  thereafter, aid payments to cities are limited to the aid 
 61.32  amounts certified to be paid in the previous year, multiplied by 
 61.33  three times the adjustment for inflation provided under 
 61.34  subdivision 3, paragraph (b). 
 61.35     Sec. 20.  Minnesota Statutes 1996, section 477A.03, 
 61.36  subdivision 3, is amended to read: 
 62.1      Subd. 3.  [INFLATION ADJUSTMENT.] In 1996 and thereafter, 
 62.2   the amount paid under each section to be adjusted for inflation 
 62.3   shall be increased by an amount equal to: 
 62.4      (a) the amount certified to be paid under that section in 
 62.5   the previous year multiplied by 
 62.6      (b) one plus the percentage increase in the implicit price 
 62.7   deflator for state and local government purchases of goods and 
 62.8   services prepared by the Bureau of Economic Analysis of the 
 62.9   United States Department of Commerce for the 12-month period 
 62.10  ending March 31 of the previous year.  The percentage increase 
 62.11  used in this subdivision shall be no less than 2.5 percent and 
 62.12  no greater than 5.0 percent. 
 62.13     Sec. 21.  [REPEALER.] 
 62.14     Minnesota Statutes, sections 477A.014, subdivision 5; and 
 62.15  477A.05, are repealed. 
 62.16     Sec. 22.  [EFFECTIVE DATE.] 
 62.17     Sections 1 to 21 are effective for aids payable in 1999, 
 62.18  and thereafter. 
 62.19                             ARTICLE 4
 62.20                        PROPERTY TAX REFUNDS
 62.21     Section 1.  Minnesota Statutes 1996, section 290A.04, 
 62.22  subdivision 2, is amended to read: 
 62.23     Subd. 2.  [HOMEOWNERS.] A claimant whose property taxes 
 62.24  payable are in excess of the percentage of the household income 
 62.25  stated below shall pay an amount equal to the percent of income 
 62.26  shown for the appropriate household income level along with the 
 62.27  percent to be paid by the claimant of the remaining amount of 
 62.28  property taxes payable.  The state refund equals the amount of 
 62.29  property taxes payable that remain, up to the state refund 
 62.30  amount shown below.  
 62.31                        Percent           Percent    Maximum
 62.32  Household Income     of Income          Paid by     State
 62.33                                         Claimant    Refund
 62.34      $0 to 1,029     1.2 percent        18 percent   $440
 62.35   1,030 to 2,059     1.3 percent        18 percent   $440
 62.36   2,060 to 3,099     1.4 percent        20 percent   $440
 62.37   3,100 to 4,129     1.6 percent        20 percent   $440
 62.38   4,130 to 5,159     1.7 percent        20 percent   $440
 62.39   5,160 to 7,229     1.9 percent        25 percent   $440
 62.40   7,230 to 8,259     2.1 percent        25 percent   $440
 62.41   8,260 to 9,289     2.2 percent        25 percent   $440
 63.1    9,290 to 10,319    2.3 percent        30 percent   $440
 63.2   10,320 to 11,349    2.4 percent        30 percent   $440
 63.3   11,350 to 12,389    2.5 percent        30 percent   $440
 63.4   12,390 to 14,449    2.6 percent        30 percent   $440
 63.5   14,450 to 15,479    2.8 percent        35 percent   $440
 63.6   15,480 to 16,509    3.0 percent        35 percent   $440
 63.7   16,510 to 17,549    3.2 percent        40 percent   $440
 63.8   17,550 to 21,669    3.3 percent        40 percent   $440
 63.9   21,670 to 24,769    3.4 percent        45 percent   $440
 63.10  24,770 to 30,959    3.5 percent        45 percent   $440
 63.11  30,960 to 36,119    3.5 percent        45 percent   $440
 63.12  36,120 to 41,279    3.7 percent        50 percent   $440
 63.13  41,280 to 58,829    4.0 percent        50 percent   $440
 63.14  58,830 to 59,859    4.0 percent        50 percent   $310
 63.15  59,860 to 60,889    4.0 percent        50 percent   $210
 63.16  60,890 to 61,929    4.0 percent        50 percent   $100 
 63.17                        Percent           Percent    Maximum
 63.18  Household Income     of Income          Paid by     State
 63.19                                          Claimant    Refund
 63.20      $0 to  1,149    1.2 percent        18 percent   $750
 63.21   1,150 to  2,299    1.3 percent        18 percent   $750
 63.22   2,300 to  3,459    1.4 percent        20 percent   $750
 63.23   3,460 to  4,609    1.6 percent        20 percent   $750
 63.24   4,610 to  5,749    1.7 percent        20 percent   $750
 63.25   5,750 to  8,059    1.9 percent        25 percent   $750
 63.26   8,060 to  9,209    2.1 percent        25 percent   $750
 63.27   9,210 to 10,359    2.2 percent        25 percent   $750
 63.28  10,360 to 11,509    2.3 percent        30 percent   $750
 63.29  11,510 to 12,659    2.4 percent        30 percent   $750
 63.30  12,660 to 13,819    2.5 percent        30 percent   $750
 63.31  13,820 to 16,109    2.6 percent        30 percent   $750
 63.32  16,110 to 17,259    2.8 percent        35 percent   $750
 63.33  17,260 to 18,409    3.0 percent        35 percent   $750
 63.34  18,410 to 19,569    3.2 percent        40 percent   $750
 63.35  19,570 to 24,159    3.3 percent        40 percent   $750
 63.36  24,160 to 27,619    3.4 percent        45 percent   $750
 63.37  27,620 to 34,519    3.5 percent        45 percent   $750
 63.38  34,520 to 40,279    3.5 percent        45 percent   $750
 63.39  40,280 to 46,029    3.7 percent        50 percent   $750
 63.40  46,030 to 65,599    4.0 percent        50 percent   $750
 63.41  65,600 to 66,749    4.0 percent        50 percent   $450
 63.42  66,750 to 67,899    4.0 percent        50 percent   $300
 63.43  67,900 to 69,059    4.0 percent        50 percent   $150
 63.44     The payment made to a claimant shall be the amount of the 
 63.45  state refund calculated under this subdivision.  No payment is 
 63.46  allowed if the claimant's household income is $61,930 $69,060 or 
 63.47  more. 
 63.48     Sec. 2.  Minnesota Statutes 1996, section 290A.04, 
 63.49  subdivision 6, is amended to read: 
 63.50     Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
 63.51  tax refunds payable in calendar year 1996, the commissioner 
 63.52  shall annually adjust the dollar amounts of the income 
 63.53  thresholds and the maximum refunds under subdivisions 2 and 2a 
 63.54  for inflation.  The commissioner shall make the inflation 
 63.55  adjustments in accordance with section 290.06, subdivision 2d, 
 63.56  except that for purposes of this subdivision the percentage 
 64.1   increase shall be determined from the year ending on August 31, 
 64.2   1994, to the year ending on August 31 of the year preceding that 
 64.3   in which the refund is payable.  The commissioner shall not 
 64.4   adjust the dollar amounts under subdivision 2 for refunds that 
 64.5   are payable in calendar year 1999.  Beginning for refunds 
 64.6   payable in 2000, the base year for adjustments of the dollar 
 64.7   amounts in subdivision 2 is the year ending August 31, 1998.  
 64.8   The commissioner shall use the appropriate percentage increase 
 64.9   to annually adjust the income thresholds and maximum refunds 
 64.10  under subdivisions 2 and 2a for inflation without regard to 
 64.11  whether or not the income tax brackets are adjusted for 
 64.12  inflation in that year.  The commissioner shall round the 
 64.13  thresholds and the maximum amounts, as adjusted to the nearest 
 64.14  $10 amount.  If the amount ends in $5, the commissioner shall 
 64.15  round it up to the next $10 amount.  
 64.16     The commissioner shall annually announce the adjusted 
 64.17  refund schedule at the same time provided under section 290.06.  
 64.18  The determination of the commissioner under this subdivision is 
 64.19  not a rule under the administrative procedure act. 
 64.20     Sec. 3.  [290B.01] [CITATION.] 
 64.21     This chapter may be cited as the "State of Minnesota 
 64.22  Business Property Tax Refund Act." 
 64.23     Sec. 4.  [290B.02] [PURPOSE.] 
 64.24     The purpose of this chapter is to provide property tax 
 64.25  relief to certain businesses that own or rent their places of 
 64.26  business. 
 64.27     Sec. 5.  [290B.03] [DEFINITIONS.] 
 64.28     Subdivision 1.  [GENERALLY.] The following terms when used 
 64.29  in this chapter have the meanings given to them in this section, 
 64.30  except where the context indicates a different meaning. 
 64.31     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 64.32  commissioner of revenue of the state of Minnesota. 
 64.33     Subd. 3.  [EMPLOYMENT AND TRAINING SERVICES.] "Employment 
 64.34  and training services" means programs, activities, and services 
 64.35  that are designed to assist participants in obtaining and 
 64.36  retaining employment. 
 65.1      Subd. 4.  [EMPLOYMENT AND TRAINING SERVICE 
 65.2   PROVIDER.] "Employment and training service provider" means: 
 65.3      (1) a public, private, or nonprofit employment and training 
 65.4   agency certified by the commissioner of economic security under 
 65.5   sections 268.0122, subdivision 3, and 268.871, subdivision 1, or 
 65.6   approved under section 256J.51, if enacted, and included in the 
 65.7   county plan submitted under section 256J.50, subdivision 6, if 
 65.8   enacted; 
 65.9      (2) a public, private, or nonprofit agency that is not 
 65.10  certified by the commissioner under clause (1), but with which a 
 65.11  county has contracted to provide employment and training 
 65.12  services; or 
 65.13     (3) a county agency, if the county has opted to provide 
 65.14  employment and training services.  
 65.15     Notwithstanding section 268.871, an employment and training 
 65.16  services provider meeting this definition may deliver employment 
 65.17  and training services under this chapter. 
 65.18     Subd. 5.  [COUNTY AGENCY.] "County agency" means the agency 
 65.19  designated by the county board to implement financial assistance 
 65.20  for current programs and for MFIP-S and the agency responsible 
 65.21  for enforcement of child support collection, and a county or 
 65.22  multicounty agency that is authorized under sections 393.01, 
 65.23  subdivision 7, and 393.07, subdivision 2, to administer MFIP-S, 
 65.24  if enacted. 
 65.25     Subd. 6.  [MINNESOTA FAMILY INVESTMENT PROGRAM-STATEWIDE OR 
 65.26  MFIP-S.] "Minnesota family investment program-statewide" or 
 65.27  "MFIP-S" means the assistance program authorized in chapters 
 65.28  256J and 256K, if enacted. 
 65.29     Subd. 7.  [CLAIMANT.] (a) "Claimant" means a person or 
 65.30  business entity which filed a claim authorized by this chapter 
 65.31  during the calendar year. 
 65.32     (b) In the case of a claim relating to rent constituting 
 65.33  property taxes, the claimant must have conducted business in a 
 65.34  rented or leased unit on which ad valorem taxes or payments made 
 65.35  in lieu of ad valorem taxes, including payments of special 
 65.36  assessments imposed in lieu of ad valorem taxes, are payable at 
 66.1   some time during the calendar year covered by the claim. 
 66.2      Subd. 8.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
 66.3   constituting property taxes" means the amount of gross rent 
 66.4   actually paid in cash, or its equivalent, which is attributable 
 66.5   (1) to the property tax paid on the unit or (2) to the amount 
 66.6   paid in lieu of property taxes, in any calendar year by a 
 66.7   claimant for the right or occupancy of the claimant's Minnesota 
 66.8   place of business in the calendar year, and which rent 
 66.9   constitutes the basis, in the succeeding calendar year, of a 
 66.10  claim for relief under this chapter by the claimant.  The amount 
 66.11  of rent attributable to property taxes paid or payments in lieu 
 66.12  made on the unit is determined by multiplying the gross rent 
 66.13  paid by the claimant for the calendar year for the unit by a 
 66.14  fraction, the numerator of which is the net tax on the property 
 66.15  where the unit is located and the denominator of which is the 
 66.16  total scheduled rent.  In no case may the rent constituting 
 66.17  property taxes exceed 50 percent of the gross rent paid by the 
 66.18  claimant during that calendar year. 
 66.19     Subd. 9.  [GROSS RENT.] "Gross rent" means rental paid for 
 66.20  the right of occupancy, at arms-length, of a place of business, 
 66.21  exclusive of charges for any other services furnished by the 
 66.22  landlord as a part of the rental agreement, whether expressly 
 66.23  set out in the rental agreement or not.  If the landlord and 
 66.24  tenant have not dealt with each other at arms-length and the 
 66.25  commissioner determines that the gross rent charged was 
 66.26  excessive, the commissioner may adjust the gross rent to a 
 66.27  reasonable amount for purposes of this chapter. 
 66.28     Subd. 10.  [TOTAL SCHEDULED RENT.] "Total scheduled rent" 
 66.29  means the sum of the monthly rents assigned to the rental units 
 66.30  in the property multiplied by 12.  The assigned rents are the 
 66.31  rents effective on April 15.  The rents must be an arms-length 
 66.32  rental, but not including charges for other services furnished 
 66.33  by the landlord as a part of the rental agreement.  In 
 66.34  determining total scheduled rent, no deduction is allowed for 
 66.35  vacant units, uncollected rent, or reduced cash rents in units 
 66.36  occupied by employees or agents of the owner. 
 67.1      Subd. 11.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 67.2   payable" means the property tax exclusive of special 
 67.3   assessments, penalties, and interest payable on a claimant's 
 67.4   place of business after deductions for any state paid property 
 67.5   tax credits in any calendar year.  In the case of a claimant who 
 67.6   makes ground lease payments, property taxes payable includes the 
 67.7   amount of the payments directly attributable to the property 
 67.8   taxes assessed against the parcel on which the building is 
 67.9   located. 
 67.10     Subd. 12.  [NET TAX.] "Net tax" means: 
 67.11     (1) the property tax, exclusive of special assessments, 
 67.12  interest, and penalties, and after reduction for any state paid 
 67.13  property tax credits as required in subdivision 8; or 
 67.14     (2) the payments made in lieu of ad valorem taxes, 
 67.15  including payments of special assessments imposed in lieu of ad 
 67.16  valorem taxes, for the calendar year in which the rent was 
 67.17  paid.  If a portion of the property is occupied as a place of 
 67.18  business or is used for other than business purposes, the net 
 67.19  tax shall be the amount of tax reduced by the percentage that 
 67.20  the nonbusiness use comprises of the total square footage of the 
 67.21  building.  If a portion of the property is used for other than 
 67.22  business purposes, the county treasurer shall list on the 
 67.23  property tax statement the amount of net tax pertaining to the 
 67.24  business portion of the property.  The amount of the net tax 
 67.25  shall not be reduced by an abatement or a court-ordered 
 67.26  reduction in the property tax on the property made after the 
 67.27  certificate of rent constituting property tax has been provided 
 67.28  to the renter. 
 67.29     Sec. 6.  [290B.04] [REFUND ALLOWABLE.] 
 67.30     A refund shall be allowed to each claimant who: 
 67.31     (1) submits a certificate from the county agency of the 
 67.32  county where the property is located indicating that the 
 67.33  claimant has cooperated fully with the employment and training 
 67.34  service provider in providing employment and training 
 67.35  opportunities to MFIP-S participants; 
 67.36     (2) provides on-site day care services at no cost to 
 68.1   employees who work at the property for which the claim is made 
 68.2   under this section; or 
 68.3      (3) provides transportation assistance to employees who 
 68.4   work at the property in the form of employer-sponsored employee 
 68.5   van pools, or subsidized use of the local transit system. 
 68.6      For the purposes of clauses (1) to (3), a claimant 
 68.7   qualifies for a refund under this section, the amount of the 
 68.8   refund is equal to four percent of the net property tax or rent 
 68.9   constituting property tax payable on the property.  The maximum 
 68.10  refund allowable to any claimant under this section is $15,000. 
 68.11     On or before December 1, 1997, the commissioner shall 
 68.12  estimate the cost of making the payments provided by this 
 68.13  section for taxes payable in 1998.  If the estimated total 
 68.14  refund claims for taxes payable in 1996 exceed $......., the 
 68.15  commissioner shall first reduce the four percent refund rate 
 68.16  enough, but to no lower a rate than two percent, so that the 
 68.17  estimated total refund claims do not exceed the $....... 
 68.18  appropriation.  If the commissioner estimates that total claims 
 68.19  will exceed $....... at a two percent refund rate, the 
 68.20  commissioner shall also reduce the $15,000 maximum refund amount 
 68.21  by enough so that total estimated refund claims do not exceed 
 68.22  $........ 
 68.23     The determinations of the revised thresholds by the 
 68.24  commissioner are not rules subject to chapter 14. 
 68.25     Sec. 7.  [290B.05] [TIME FOR PAYMENT.] 
 68.26     Allowable claims filed according to the provisions of this 
 68.27  chapter shall be paid by the commissioner from the general fund 
 68.28  after September 15 and before September 30 or 60 days after 
 68.29  receipt of the application, whichever is later. 
 68.30     Sec. 8.  [290B.06] [PROOF OF CLAIM.] 
 68.31     Every claimant shall supply to the department of revenue, 
 68.32  in support of the claim, proof of eligibility under this 
 68.33  chapter, including, but not limited to, amount of rent paid or 
 68.34  property taxes accrued, name and address of owner or managing 
 68.35  agent of property rented, changes in place of business, size, 
 68.36  and nature of property claimed as a place of business. 
 69.1      Sec. 9.  [290B.07] [PROOF OF TAXES PAID.] 
 69.2      Every claimant who files a claim for relief for property 
 69.3   taxes payable shall include with the claim a property tax 
 69.4   statement or a reproduction of it in a form deemed satisfactory 
 69.5   by the commissioner indicating that there are no delinquent 
 69.6   property taxes on the place of business.  Indication on the 
 69.7   property tax statement from the county treasurer that there are 
 69.8   no delinquent taxes on the place of business shall be sufficient 
 69.9   proof.  Taxes included in a confession of judgment under section 
 69.10  279.37 shall not constitute delinquent taxes as long as the 
 69.11  claimant is current on the payments required to be made under 
 69.12  section 279.37. 
 69.13     Sec. 10.  [290B.08] [PROPERTY TAX STATEMENT.] 
 69.14     The county treasurer shall prepare and send a sufficient 
 69.15  number of copies of the property tax statement to the owner, and 
 69.16  to the owner's escrow agent if the taxes are paid via an escrow 
 69.17  account, to enable the owner to comply with the filing 
 69.18  requirements of this chapter and to retain one copy as a 
 69.19  record.  The property tax statement, in a form prescribed by the 
 69.20  commissioner, shall indicate the manner in which the claimant 
 69.21  may claim relief from the state and the amount of the tax for 
 69.22  which the applicant may claim relief.  The statement shall also 
 69.23  indicate if there are delinquent property taxes on the property 
 69.24  in the preceding year. 
 69.25     Sec. 11.  [290B.09] [CLAIM APPLIED AGAINST OUTSTANDING 
 69.26  LIABILITY.] 
 69.27     The amount of any claim otherwise payable under this 
 69.28  chapter may be applied by the commissioner against any 
 69.29  delinquent tax liability of the claimant payable to the 
 69.30  department of revenue.  
 69.31     Sec. 12.  [290B.10] [LAPSE OF RIGHT TO RECEIVE CREDIT.] 
 69.32     If the commissioner cannot locate the claimant within two 
 69.33  years from the date that the original warrant was issued, or if 
 69.34  a claimant to whom a warrant has been issued does not cash that 
 69.35  warrant within two years from the date the warrant was issued, 
 69.36  the right to the credit shall lapse, and the warrant shall be 
 70.1   deposited in the general fund. 
 70.2      Sec. 13.  [290B.11] [OWNER OR MANAGING AGENT TO FURNISH 
 70.3   RENT CERTIFICATE.] 
 70.4      Subdivision 1.  [DUTY TO FURNISH.] The owner or managing 
 70.5   agent of any property for which rent is paid for occupancy as a 
 70.6   place of business must furnish a certificate of rent 
 70.7   constituting property tax to the person or business entity on 
 70.8   December 31, in the form prescribed by the commissioner.  If the 
 70.9   business relocates before December 31, the owner or managing 
 70.10  agent may furnish the certificate to the business at the time of 
 70.11  moving, or mail the certificate to the forwarding address if an 
 70.12  address has been provided by the business.  The certificate must 
 70.13  be made available to the business before February 1 of the year 
 70.14  following the year in which the rent was paid.  The owner or 
 70.15  managing agent must retain a duplicate of each certificate or an 
 70.16  equivalent record showing the same information for a period of 
 70.17  three years.  The duplicate or other record must be made 
 70.18  available to the commissioner upon request. 
 70.19     Subd. 2.  [INFORMATION ON CERTIFICATE.] The certificate of 
 70.20  rent constituting property taxes must include the address of the 
 70.21  property, including the county, and the property tax parcel 
 70.22  identification number and any additional information that the 
 70.23  commissioner determines is appropriate. 
 70.24     Subd. 3.  [FAILURE TO PROVIDE.] If the owner or managing 
 70.25  agent fails to provide the business with a certificate of rent 
 70.26  constituting property taxes, the commissioner shall allocate the 
 70.27  net tax on the building to the unit on a square footage basis or 
 70.28  other appropriate basis as the commissioner determines.  The 
 70.29  business shall supply the commissioner with a statement from the 
 70.30  county treasurer that gives the amount of property tax on the 
 70.31  parcel, the address and property tax parcel identification 
 70.32  number of the property, and the number of units in the building. 
 70.33     Subd. 4.  [REPORT TO COMMISSIONER.] By January 31 of the 
 70.34  year following the year in which the rent was collected, each 
 70.35  owner or managing agent shall report to the commissioner on a 
 70.36  form prescribed by the commissioner the net tax pertaining to 
 71.1   the business part of the property, the total scheduled rent, and 
 71.2   the fraction computed under section 290B.03, subdivision 7.  A 
 71.3   copy of the property tax statement for taxes payable in that 
 71.4   year must be attached. 
 71.5      Sec. 14.  [290B.12] [RULES.] 
 71.6      The commissioner shall promulgate rules which the 
 71.7   commissioner deems appropriate for the administration of this 
 71.8   chapter and shall also make available forms with instructions 
 71.9   for claimants as the commissioner deems necessary for the proper 
 71.10  administration of this chapter.  The claim shall be in the form 
 71.11  the commissioner may prescribe. 
 71.12     Sec. 15.  [290B.13] [ROUNDING.] 
 71.13     In computing the dollar amount of items on the property tax 
 71.14  refund claim form and accompanying schedules, items may be 
 71.15  rounded off to the nearest whole dollar amount, disregarding 
 71.16  amounts of less than 50 cents and increasing amounts of 50 cents 
 71.17  to 99 cents to the next highest dollar. 
 71.18     Sec. 16.  [290B.14] [APPROPRIATION.] 
 71.19     $....... is appropriated from the general fund in the state 
 71.20  treasury to the commissioner of revenue to make the payments 
 71.21  required under section 290B.04. 
 71.22     Sec. 17.  [EFFECTIVE DATE.] 
 71.23     This article is effective for claims based on property 
 71.24  taxes payable in 1999 and thereafter, and rent constituting 
 71.25  property taxes paid in 1998 and thereafter. 
 71.26                             ARTICLE 5
 71.27                         TRUTH IN BUDGETING
 71.28     Section 1.  Minnesota Statutes 1996, section 16A.103, 
 71.29  subdivision 1, is amended to read: 
 71.30     Subdivision 1.  [STATE REVENUE AND EXPENDITURES.] In 
 71.31  February and November each year, the commissioner shall prepare 
 71.32  and deliver to the governor and legislature a forecast of state 
 71.33  revenue and expenditures.  The forecast must assume the 
 71.34  continuation of current laws and reasonable estimates of 
 71.35  projected growth in the national and state economies and 
 71.36  affected populations.  Revenue must be estimated for all sources 
 72.1   provided for in current law.  Expenditures must be estimated for 
 72.2   all obligations imposed by law and those projected to occur as a 
 72.3   result of inflation and variables outside the control of the 
 72.4   legislature.  In addition, the commissioner shall forecast 
 72.5   Minnesota personal income for each of the years covered by the 
 72.6   forecast and include these estimates in the forecast documents.  
 72.7   A forecast prepared during the first fiscal year of a biennium 
 72.8   must cover that biennium and the next biennium.  A forecast 
 72.9   prepared during the second fiscal year of a biennium must cover 
 72.10  that biennium and the next two bienniums. 
 72.11     In order to examine long-term trends in state government 
 72.12  revenues, the commissioner shall also consider in the forecast 
 72.13  and separately prepare and deliver to the governor and the 
 72.14  legislature, for each year beginning in 1990, a measure of the 
 72.15  inflation adjusted general fund revenue per capita. 
 72.16     Sec. 2.  Minnesota Statutes 1996, section 16A.103, 
 72.17  subdivision 2, is amended to read: 
 72.18     Subd. 2.  [LOCAL REVENUE.] In February and November of each 
 72.19  year, the commissioner of revenue shall prepare and deliver to 
 72.20  the governor and the legislature forecasts of revenue to be 
 72.21  received by school districts as a group, counties as a group, 
 72.22  and the group of cities and towns that have a population of more 
 72.23  than 2,500.  The forecasts must assume the continuation of 
 72.24  current laws, projections of valuation changes in real property, 
 72.25  and reasonable estimates of projected growth in the national and 
 72.26  state economies and affected populations.  Revenue must be 
 72.27  estimated for property taxes, state and federal aids, local 
 72.28  sales taxes, if any, and a single projection for all other 
 72.29  revenue for each group of affected local governmental units.  As 
 72.30  part of the February forecast, the commissioner of revenue shall 
 72.31  report to the governor and legislature on which groups of local 
 72.32  government units exceeded the revenue targets of the governor 
 72.33  and legislature in the most recent biennium. 
 72.34     In order to examine long-term trends in local government 
 72.35  revenues, the commissioner shall also consider in the forecast 
 72.36  and separately prepare and deliver to the governor and the 
 73.1   legislature, for each year beginning in 1990, for counties as a 
 73.2   group, and for the group of cities and towns that have a 
 73.3   population of more than 2,500, a measure of the inflation 
 73.4   adjusted revenue base per capita.  For cities, the inflation 
 73.5   adjusted revenue base must include an adjustment to account for 
 73.6   the need to replace tax increment revenue reductions due to 
 73.7   changes in the property tax system. 
 73.8      Sec. 3.  Minnesota Statutes 1996, section 275.065, 
 73.9   subdivision 3, is amended to read: 
 73.10     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 73.11  county auditor shall prepare and the county treasurer shall 
 73.12  deliver after November 10 and on or before November 24 each 
 73.13  year, by first class mail to each taxpayer at the address listed 
 73.14  on the county's current year's assessment roll, a notice of 
 73.15  proposed property taxes and, in the case of a town, final 
 73.16  property taxes.  
 73.17     (b) The commissioner of revenue shall prescribe the form of 
 73.18  the notice. 
 73.19     (c) The notice must inform taxpayers that it contains the 
 73.20  amount of property taxes each taxing authority other than a town 
 73.21  proposes to collect for taxes payable the following year and, 
 73.22  for a town, the amount of its final levy.  It must clearly state 
 73.23  that each taxing authority, including regional library districts 
 73.24  established under section 134.201, and including the 
 73.25  metropolitan taxing districts as defined in paragraph (i), but 
 73.26  excluding all other special taxing districts, school districts, 
 73.27  and towns, will hold a public meeting to receive public 
 73.28  testimony on the proposed budget and proposed or final property 
 73.29  tax levy, or, in case of a school district, on the current 
 73.30  budget and proposed property tax levy.  It must clearly state 
 73.31  the time and place of each taxing authority's meeting and an 
 73.32  address where comments will be received by mail.  
 73.33     (d) The notice must state for each parcel the following 
 73.34  items listed in this sequential order: 
 73.35     (1) the market value of the property as determined under 
 73.36  section 273.11, and used for computing property taxes payable in 
 74.1   the following year and for taxes payable in the current year; 
 74.2   and, in the case of residential property, whether the property 
 74.3   is classified as homestead or nonhomestead.  The notice must 
 74.4   clearly inform taxpayers of the years to which the market values 
 74.5   apply and that the values are final values; 
 74.6      (2) the property tax amount for the following year based on 
 74.7   each taxing authority's constant spending levy amount.  This 
 74.8   amount must be listed by county, city or town, school district, 
 74.9   the state education tax, the total of the special taxing 
 74.10  districts, the tax increment tax, if any, the fiscal disparities 
 74.11  tax, if any, and a total of all taxing authorities; 
 74.12     (3) the proposed property tax amount for the following year 
 74.13  by for the county, the city or town, the school district 
 74.14  excess referenda levy, remaining school district levy, regional 
 74.15  library district, if in existence, the total of the metropolitan 
 74.16  special taxing districts as defined in paragraph (i) and, the 
 74.17  state education tax, the sum of the remaining special taxing 
 74.18  districts, and as a total of all the taxing authorities, 
 74.19  including all special taxing districts, the proposed or, for.  
 74.20  For a town, the proposed amount is its final net tax on the 
 74.21  property for taxes payable the following year and the actual tax 
 74.22  for taxes payable the current year.  If a school district has 
 74.23  certified under section 124A.03, subdivision 2, that a 
 74.24  referendum will be held in the school district at the November 
 74.25  general election, the county auditor must note next to the 
 74.26  school district's proposed amount that a referendum is pending 
 74.27  and that, if approved by the voters, the tax amount may be 
 74.28  higher than shown on the notice.  For the purposes of this 
 74.29  subdivision, "school district excess referenda levy" means 
 74.30  school district taxes for operating purposes approved at 
 74.31  referendums, including those taxes based on net tax capacity as 
 74.32  well as those based on market value.  "School district excess 
 74.33  referenda levy" does not include school district taxes for 
 74.34  capital expenditures approved at referendums or school district 
 74.35  taxes to pay for the debt service on bonds approved at 
 74.36  referenda.  In the case of the city of Minneapolis, the levy for 
 75.1   the Minneapolis library board and the levy for Minneapolis park 
 75.2   and recreation shall be listed separately from the remaining 
 75.3   amount of the city's levy.  In the case of a parcel where tax 
 75.4   increment or the fiscal disparities areawide tax under chapter 
 75.5   276A or 473F applies, the proposed tax levy on the captured 
 75.6   value or the proposed tax levy on the tax capacity subject to 
 75.7   the areawide tax must each be stated separately and not included 
 75.8   in the sum of the special taxing districts; and 
 75.9      (3) (4) the increase or decrease in between the amounts in 
 75.10  clause clauses (2) from taxes payable in the current year to 
 75.11  proposed or, for a town, final taxes payable the following year, 
 75.12  and (3) expressed as a dollar amount and as a percentage; and 
 75.13     (5) the total actual taxes for the current year for all 
 75.14  taxing authorities for the parcel. 
 75.15     (e) The notice must clearly state that the proposed or 
 75.16  final taxes do not include the following: 
 75.17     (1) special assessments; 
 75.18     (2) levies approved by the voters after the date the 
 75.19  proposed taxes are certified, including bond referenda, school 
 75.20  district levy referenda, and levy limit increase referenda; 
 75.21     (3) amounts necessary to pay cleanup or other costs due to 
 75.22  a natural disaster occurring after the date the proposed taxes 
 75.23  are certified; 
 75.24     (4) amounts necessary to pay tort judgments against the 
 75.25  taxing authority that become final after the date the proposed 
 75.26  taxes are certified; and 
 75.27     (5) the contamination tax imposed on properties which 
 75.28  received market value reductions for contamination. 
 75.29     (f) Except as provided in subdivision 7, failure of the 
 75.30  county auditor to prepare or the county treasurer to deliver the 
 75.31  notice as required in this section does not invalidate the 
 75.32  proposed or final tax levy or the taxes payable pursuant to the 
 75.33  tax levy. 
 75.34     (g) If the notice the taxpayer receives under this section 
 75.35  lists the property as nonhomestead and the homeowner provides 
 75.36  satisfactory documentation to the county assessor that the 
 76.1   property is owned and used as the owner's homestead, the 
 76.2   assessor shall reclassify the property to homestead for taxes 
 76.3   payable in the following year. 
 76.4      (h) In the case of class 4 residential property used as a 
 76.5   residence for lease or rental periods of 30 days or more, the 
 76.6   taxpayer must either: 
 76.7      (1) mail or deliver a copy of the notice of proposed 
 76.8   property taxes to each tenant, renter, or lessee; or 
 76.9      (2) post a copy of the notice in a conspicuous place on the 
 76.10  premises of the property.  
 76.11     The notice must be mailed or posted by the taxpayer by 
 76.12  November 27 or within three days of receipt of the notice, 
 76.13  whichever is later.  A taxpayer may notify the county treasurer 
 76.14  of the address of the taxpayer, agent, caretaker, or manager of 
 76.15  the premises to which the notice must be mailed in order to 
 76.16  fulfill the requirements of this paragraph. 
 76.17     (i) For purposes of this subdivision, subdivisions 5a and 
 76.18  6, "metropolitan special taxing districts" means the following 
 76.19  taxing districts in the seven-county metropolitan area that levy 
 76.20  a property tax for any of the specified purposes listed below: 
 76.21     (1) metropolitan council under section 473.132, 473.167, 
 76.22  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 76.23     (2) metropolitan airports commission under section 473.667, 
 76.24  473.671, or 473.672; and 
 76.25     (3) metropolitan mosquito control commission under section 
 76.26  473.711. 
 76.27     For purposes of this section, any levies made by the 
 76.28  regional rail authorities in the county of Anoka, Carver, 
 76.29  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 76.30  398A shall be included with the appropriate county's levy and 
 76.31  shall be discussed at that county's public hearing. 
 76.32     (j) For taxes levied in 1996, payable in 1997 only, in the 
 76.33  case of a statutory or home rule charter city or town that 
 76.34  exercises the local levy option provided in section 473.388, 
 76.35  subdivision 7, the notice of its proposed taxes may include a 
 76.36  statement of the amount by which its proposed tax increase for 
 77.1   taxes payable in 1997 is attributable to its exercise of that 
 77.2   option, together with a statement that the levy of the 
 77.3   metropolitan council was decreased by a similar amount because 
 77.4   of the exercise of that option. 
 77.5      Sec. 4.  Minnesota Statutes 1996, section 275.065, is 
 77.6   amended by adding a subdivision to read: 
 77.7      Subd. 3a.  [CONSTANT SPENDING LEVY AMOUNT.] (a) For 
 77.8   purposes of this section, "constant spending levy amount" for 
 77.9   calendar year 1999 for a county, school district, city, town, or 
 77.10  special taxing district means the proposed property tax levy 
 77.11  that the taxing authority would need to levy so that the sum of 
 77.12  its levy, including its fiscal disparities distribution levy 
 77.13  under section 276A.06, subdivision 3, clause (a), or 473F.08, 
 77.14  subdivision 3, clause (a), plus its property tax aid amounts and 
 77.15  tax increment revenues would equal the product of: 
 77.16     (1) the 1998 property tax levy including its fiscal 
 77.17  disparities distribution levy under section 276A.06, subdivision 
 77.18  3, clause (a), or 473F.08, subdivision 3, clause (a), plus the 
 77.19  current property tax aids, plus current tax increment revenues; 
 77.20     (2) for a county, city, or town, its population growth 
 77.21  rate; and 
 77.22     (3) the implicit price deflator. 
 77.23     (b) For purposes of this section, "constant spending levy 
 77.24  amount" for calendar year 2000 and subsequent years for a 
 77.25  county, school district, city, town, or special taxing district 
 77.26  means the proposed property tax levy that the taxing authority 
 77.27  would need to levy so that the sum of its levy, including its 
 77.28  fiscal disparities distribution levy under section 276A.06, 
 77.29  subdivision 3, clause (a), or 473F.08, subdivision 3, clause 
 77.30  (a), plus its property tax aid amounts would equal the product 
 77.31  of: 
 77.32     (1) the current year property tax levy including its fiscal 
 77.33  disparities distribution levy under section 276A.06, subdivision 
 77.34  3, clause (a), or 473F.08, subdivision 3, clause (a), plus the 
 77.35  current property tax aids; 
 77.36     (2) for a county, city, or town, its population growth 
 78.1   rate; and 
 78.2      (3) the implicit price deflator. 
 78.3      (c) For the purposes of this subdivision: 
 78.4      (1) "property tax aids" includes homestead and agricultural 
 78.5   credit aid and disparity reduction aid under section 273.1398, 
 78.6   local government aid under sections 477A.012, 477A.0125, and 
 78.7   477A.013; county criminal justice aid under section 477A.0121; 
 78.8   family preservation aid under section 477A.0122, and taconite 
 78.9   aid; 
 78.10     (2) "tax increment revenues" means the product of the 
 78.11  taxing authority's tax rate for the current year and the total 
 78.12  tax increment captured net tax capacity; 
 78.13     (3) "population growth rate" means the greater of one or 
 78.14  the ratio of the city population for the most current 12-month 
 78.15  period available, divided by the city population for the 
 78.16  12-month period previous to the most current year available; and 
 78.17     (4) "implicit price deflator" means one plus the rate of 
 78.18  increase in the implicit price deflator for state and local 
 78.19  government purchases of goods and services prepared by the 
 78.20  Bureau of Economic Analysis of the United States Department of 
 78.21  Commerce for the most current 12-month period available. 
 78.22     (d) For purposes of the state education tax, "constant 
 78.23  spending levy amount" means the state education tax in the 
 78.24  current year. 
 78.25     Sec. 5.  Minnesota Statutes 1996, section 275.065, 
 78.26  subdivision 5a, is amended to read: 
 78.27     Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
 78.28  population of more than 2,500, county, a metropolitan special 
 78.29  taxing district as defined in subdivision 3, paragraph (i), or a 
 78.30  regional library district established under section 134.201, or 
 78.31  school district shall advertise in a newspaper a notice of its 
 78.32  intent to adopt a budget and property tax levy or, in the case 
 78.33  of a school district, to review its current budget and 
 78.34  proposed for property taxes payable in the following year, at a 
 78.35  public hearing.  The notice must be published not less than two 
 78.36  business days nor more than six business days before the hearing.
 79.1      The advertisement must be at least one-eighth page in size 
 79.2   of a standard-size or a tabloid-size newspaper.  The 
 79.3   advertisement must not be placed in the part of the newspaper 
 79.4   where legal notices and classified advertisements appear.  The 
 79.5   advertisement must be published in an official newspaper of 
 79.6   general circulation in the taxing authority.  The newspaper 
 79.7   selected must be one of general interest and readership in the 
 79.8   community, and not one of limited subject matter.  The 
 79.9   advertisement must appear in a newspaper that is published at 
 79.10  least once per week.  
 79.11     For purposes of this section, the metropolitan special 
 79.12  taxing district's advertisement must only be published in the 
 79.13  Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
 79.14     (b) The advertisement for metropolitan special taxing 
 79.15  districts and regional library districts must be in the 
 79.16  following form, except that the notice for a school district may 
 79.17  include references to the current budget in regard to proposed 
 79.18  property taxes. 
 79.19                             "NOTICE OF
 79.20                      PROPOSED PROPERTY TAXES
 79.21            (City/County/School District/Metropolitan
 79.22                  Special Taxing District/Regional
 79.23                   Library District) of .........
 79.24  The governing body of ........ will soon hold budget hearings 
 79.25  and vote on the property taxes for (city/county/metropolitan 
 79.26  special taxing district/regional library district services that 
 79.27  will be provided in 199_/school district services that will be 
 79.28  provided in 199_ and 199_ (year)). 
 79.29                     NOTICE OF PUBLIC HEARING:
 79.30  All concerned citizens are invited to attend a public hearing 
 79.31  and express their opinions on the proposed (city/county/school 
 79.32  district/metropolitan special taxing district/regional library 
 79.33  district) budget and property taxes, or in the case of a school 
 79.34  district, its current budget and proposed property taxes, 
 79.35  payable in the following year.  The hearing will be held on 
 79.36  (Month/Day/Year) at (Time) at (Location, Address)." 
 80.1      (c) The advertisement for cities and counties must be in 
 80.2   the following form. 
 80.3                        "NOTICE OF PROPOSED
 80.4                  TOTAL BUDGET AND PROPERTY TAXES
 80.5   The (city/county) governing body or board of commissioners will 
 80.6   hold a public hearing to discuss the budget and to vote on the 
 80.7   amount of property taxes to collect for services the 
 80.8   (city/county) will provide in (year). 
 80.9      
 80.10  SPENDING:  The total budget amounts below compare 
 80.11  (city's/county's) (year) total actual budget with the amount the 
 80.12  (city/county) proposes to spend in (year). 
 80.13     
 80.14  (Year) Total          Proposed (Year)          Change from
 80.15  Actual Budget             Budget               (Year)-(Year)
 80.16     
 80.17    $.......              $.......                ...%
 80.18     
 80.19  TAXES:  The property tax amounts below compare that portion of 
 80.20  the current budget levied in property taxes in (city/county) for 
 80.21  (year) with the property taxes the (city/county) proposes to 
 80.22  collect in (year). 
 80.23     
 80.24  (Year) Property       Proposed (Year)          Change from
 80.25      Taxes              Property Taxes         (Year)-(Year)
 80.26     
 80.27    $.......              $.......                ...% 
 80.28     
 80.29                    ATTEND THE PUBLIC HEARING
 80.30  All (city/county) residents are invited to attend the public 
 80.31  hearing of the (city/county) to express your opinions on the 
 80.32  budget and the proposed amount of (year) property taxes.  The 
 80.33  hearing will be held on: 
 80.34                      (Month/Day/Year/Time)
 80.35                        (Location/Address)
 80.36  If the discussion of the budget cannot be completed, a time and 
 81.1   place for continuing the discussion will be announced at the 
 81.2   hearing.  You are also invited to send your written comments to: 
 81.3                           (City/County)
 81.4                        (Location/Address)"
 81.5      (d) For purposes of this subdivision, the budget amounts 
 81.6   listed on the advertisement mean: 
 81.7      (1) for cities, the total government fund expenditures, as 
 81.8   defined by the state auditor under section 471.6965, less any 
 81.9   expenditures for improvements or services that are specially 
 81.10  assessed or charged under chapter 429, 430, 435, or the 
 81.11  provisions of any other law or charter; and 
 81.12     (2) for counties, the total government fund expenditures, 
 81.13  as defined by the state auditor under section 375.169, less any 
 81.14  expenditures for direct payments to recipients or providers for 
 81.15  the human service aids listed in section 273.1398, subdivision 
 81.16  1, paragraph (i). 
 81.17     (c) (e) A city with a population of over 500 but not more 
 81.18  than 2,500 must advertise by posted notice as defined in section 
 81.19  645.12, subdivision 1.  The advertisement must be posted at the 
 81.20  time provided in paragraph (a).  It must be in the form required 
 81.21  in paragraph (b). 
 81.22     (d) (f) For purposes of this subdivision, the population of 
 81.23  a city is the most recent population as determined by the state 
 81.24  demographer under section 4A.02. 
 81.25     (e) (g) The commissioner of revenue, subject to the 
 81.26  approval of the chairs of the house and senate tax committees, 
 81.27  shall prescribe the form and format of the advertisement. 
 81.28     (f) For calendar year 1993, each taxing authority required 
 81.29  to publish an advertisement must include on the advertisement a 
 81.30  statement that information on the increases or decreases of the 
 81.31  total budget, including employee and independent contractor 
 81.32  compensation in the prior year, current year, and proposed 
 81.33  budget year will be discussed at the hearing. 
 81.34     (g) Notwithstanding paragraph (f), for 1993, the 
 81.35  commissioner of revenue shall prescribe the form, format, and 
 81.36  content of an advertisement comparing current and proposed 
 82.1   expense budgets for the metropolitan council, the metropolitan 
 82.2   airports commission, and the metropolitan mosquito control 
 82.3   commission.  The expense budget must include occupancy, 
 82.4   personnel, contractual and capital improvement expenses.  The 
 82.5   form, format, and content of the advertisement must be approved 
 82.6   by the chairs of the house and senate tax committees prior to 
 82.7   publication. 
 82.8      Sec. 6.  Minnesota Statutes 1996, section 275.065, 
 82.9   subdivision 6, is amended to read: 
 82.10     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 82.11  Between November 29 and December 20, the governing bodies of a 
 82.12  city that has a population over 500, county, metropolitan 
 82.13  special taxing districts as defined in subdivision 3, paragraph 
 82.14  (i), and regional library districts shall each hold a public 
 82.15  hearing to discuss and seek public comment on its final budget 
 82.16  and property tax levy for taxes payable in the following year, 
 82.17  and the governing body of the school district shall hold a 
 82.18  public hearing to review its current budget and proposed 
 82.19  property tax levy for taxes payable in the following year.  The 
 82.20  metropolitan special taxing districts shall be required to hold 
 82.21  only a single joint public hearing, the location of which will 
 82.22  be determined by the affected metropolitan agencies. 
 82.23     At a subsequent hearing, each county, school district, 
 82.24  city, and metropolitan special taxing district may amend its 
 82.25  proposed property tax levy and must adopt a final property tax 
 82.26  levy.  Each county, city, and metropolitan special taxing 
 82.27  district may also amend its proposed budget and must adopt a 
 82.28  final budget at the subsequent hearing.  A school district is 
 82.29  not required to adopt its final budget at the subsequent 
 82.30  hearing.  The subsequent hearing of a taxing authority must be 
 82.31  held on a date subsequent to the date of the taxing authority's 
 82.32  initial public hearing, or subsequent to the date of its 
 82.33  continuation hearing if a continuation hearing is held.  The 
 82.34  subsequent hearing may be held at a regularly scheduled board or 
 82.35  council meeting or at a special meeting scheduled for the 
 82.36  purposes of the subsequent hearing.  The subsequent hearing of a 
 83.1   taxing authority does not have to be coordinated by the county 
 83.2   auditor to prevent a conflict with an initial hearing, a 
 83.3   continuation hearing, or a subsequent hearing of any other 
 83.4   taxing authority.  All subsequent hearings must be held prior to 
 83.5   five working days after December 20 of the levy year. 
 83.6      The time and place of the subsequent hearing must be 
 83.7   announced at the initial public hearing or at the continuation 
 83.8   hearing. 
 83.9      The property tax levy certified under section 275.07 by a 
 83.10  city, county, metropolitan special taxing district, regional 
 83.11  library district, or school district must not exceed the 
 83.12  proposed levy determined under subdivision 1, except by an 
 83.13  amount up to the sum of the following amounts: 
 83.14     (1) the amount of a school district levy whose voters 
 83.15  approved a referendum to increase taxes under section 124.82, 
 83.16  subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
 83.17  2, after the proposed levy was certified; 
 83.18     (2) the amount of a city or county levy approved by the 
 83.19  voters after the proposed levy was certified; 
 83.20     (3) the amount of a levy to pay principal and interest on 
 83.21  bonds approved by the voters under section 475.58 after the 
 83.22  proposed levy was certified; 
 83.23     (4) the amount of a levy to pay costs due to a natural 
 83.24  disaster occurring after the proposed levy was certified, if 
 83.25  that amount is approved by the commissioner of revenue under 
 83.26  subdivision 6a; 
 83.27     (5) the amount of a levy to pay tort judgments against a 
 83.28  taxing authority that become final after the proposed levy was 
 83.29  certified, if the amount is approved by the commissioner of 
 83.30  revenue under subdivision 6a; 
 83.31     (6) the amount of an increase in levy limits certified to 
 83.32  the taxing authority by the commissioner of children, families, 
 83.33  and learning or the commissioner of revenue after the proposed 
 83.34  levy was certified; and 
 83.35     (7) the amount required under section 124.755. 
 83.36     At the hearing under this subdivision, the percentage 
 84.1   increase in property taxes proposed by the taxing authority, if 
 84.2   any, and the specific purposes for which property tax revenues 
 84.3   are being increased must be discussed.  
 84.4      During the discussion, the governing body shall hear 
 84.5   comments regarding a proposed increase and explain the reasons 
 84.6   for the proposed increase.  The public shall be allowed to speak 
 84.7   and to ask questions.  At the subsequent hearing held as 
 84.8   provided in this subdivision, the governing body, other than the 
 84.9   governing body of a school district, shall adopt its final 
 84.10  property tax levy prior to adopting its final budget. 
 84.11     If the hearing is not completed on its scheduled date, the 
 84.12  taxing authority must announce, prior to adjournment of the 
 84.13  hearing, the date, time, and place for the continuation of the 
 84.14  hearing.  The continued hearing must be held at least five 
 84.15  business days but no more than 14 business days after the 
 84.16  original hearing. 
 84.17     The hearing must be held after 5:00 p.m. if scheduled on a 
 84.18  day other than Saturday.  No hearing may be held on a Sunday.  
 84.19  The governing body of a county shall hold a hearing on the 
 84.20  second Tuesday in December each year, and may hold additional 
 84.21  hearings on other dates before December 20 if necessary for the 
 84.22  convenience of county residents.  If the county needs a 
 84.23  continuation of its hearing, the continued hearing shall be held 
 84.24  on the third Tuesday in December.  If the third Tuesday in 
 84.25  December falls on December 21, the county's continuation hearing 
 84.26  shall be held on Monday, December 20.  The county auditor shall 
 84.27  provide for the coordination of hearing dates for all cities and 
 84.28  school districts within the county. 
 84.29     The metropolitan special taxing districts shall hold a 
 84.30  joint public hearing on the first Monday of December.  A 
 84.31  continuation hearing, if necessary, shall be held on the second 
 84.32  Monday of December. 
 84.33     By August 10, each school board and the board of the 
 84.34  regional library district shall certify to the county auditors 
 84.35  of the counties in which the school district or regional library 
 84.36  district is located the dates on which it elects to hold its 
 85.1   hearings and any continuations.  If a school board or regional 
 85.2   library district does not certify the dates by August 10, the 
 85.3   auditor will assign the hearing date.  The dates elected or 
 85.4   assigned must not conflict with the hearing dates of the county 
 85.5   or the metropolitan special taxing districts.  By August 20, the 
 85.6   county auditor shall notify the clerks of the cities within the 
 85.7   county of the dates on which school districts and regional 
 85.8   library districts have elected to hold their hearings.  At the 
 85.9   time a city certifies its proposed levy under subdivision 1 it 
 85.10  shall certify the dates on which it elects to hold its hearings 
 85.11  and any continuations.  For its initial hearing and for the 
 85.12  subsequent hearing at which the final property tax levy will be 
 85.13  adopted, the city must not select dates that conflict with the 
 85.14  county hearing dates, metropolitan special taxing district 
 85.15  dates, or with those elected by or assigned to the school 
 85.16  districts or regional library district in which the city is 
 85.17  located.  For continuation hearings, the city may select dates 
 85.18  that conflict with other taxing authorities' dates if the city 
 85.19  deems it necessary. 
 85.20     The county hearing dates and the city, metropolitan special 
 85.21  taxing district, and regional library district, and school 
 85.22  district hearing dates must be designated on the notices 
 85.23  required under subdivision 3.  The continuation dates need not 
 85.24  be stated on the notices.  
 85.25     This subdivision does not apply to towns, school districts, 
 85.26  and special taxing districts other than regional library 
 85.27  districts and metropolitan special taxing districts. 
 85.28     Notwithstanding the requirements of this section, the 
 85.29  employer is required to meet and negotiate over employee 
 85.30  compensation as provided for in chapter 179A.  
 85.31     Sec. 7.  Minnesota Statutes 1996, section 276.04, 
 85.32  subdivision 2, is amended to read: 
 85.33     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 85.34  shall provide for the printing of the tax statements.  The 
 85.35  commissioner of revenue shall prescribe the form of the property 
 85.36  tax statement and its contents.  The statement must contain a 
 86.1   tabulated statement of the dollar amount due to each taxing 
 86.2   authority and the state from the parcel of real property for 
 86.3   which a particular tax statement is prepared.  The dollar 
 86.4   amounts due the county, state general education tax, the school 
 86.5   district, township or municipality, the total of the 
 86.6   metropolitan special taxing districts as defined in section 
 86.7   275.065, subdivision 3, paragraph (i), school district excess 
 86.8   referenda levy, remaining school district levy, and the total of 
 86.9   other voter approved referenda levies based on market value 
 86.10  under section 275.61 must be separately stated.  The amounts due 
 86.11  all other special taxing districts, if any, may be 
 86.12  aggregated.  For the purposes of this subdivision, "school 
 86.13  district excess referenda levy" means school district taxes for 
 86.14  operating purposes approved at referenda, including those taxes 
 86.15  based on net tax capacity as well as those based on market 
 86.16  value. "School district excess referenda levy" does not include 
 86.17  school district taxes for capital expenditures approved at 
 86.18  referendums or school district taxes to pay for the debt service 
 86.19  on bonds approved at referenda.  The amount of the tax on 
 86.20  contamination value imposed under sections 270.91 to 270.98, if 
 86.21  any, must also be separately stated.  The dollar amounts, 
 86.22  including the dollar amount of any special assessments, may be 
 86.23  rounded to the nearest even whole dollar.  For purposes of this 
 86.24  section whole odd-numbered dollars may be adjusted to the next 
 86.25  higher even-numbered dollar.  The amount of market value 
 86.26  excluded under section 273.11, subdivision 16, if any, must also 
 86.27  be listed on the tax statement.  The statement shall include the 
 86.28  following sentence, printed in upper case letters in boldface 
 86.29  print:  "THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY 
 86.30  TAX REVENUES.  THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX 
 86.31  BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF 
 86.32  GOVERNMENT."  
 86.33     (b) The property tax statements for manufactured homes and 
 86.34  sectional structures taxed as personal property shall contain 
 86.35  the same information that is required on the tax statements for 
 86.36  real property.  
 87.1      (c) Real and personal property tax statements must contain 
 87.2   the following information in the order given in this paragraph.  
 87.3   The information must contain the current year tax information in 
 87.4   the right column with the corresponding information for the 
 87.5   previous year in a column on the left: 
 87.6      (1) the property's estimated market value under section 
 87.7   273.11, subdivision 1; 
 87.8      (2) the property's taxable market value after reductions 
 87.9   under section 273.11, subdivisions 1a and 16; 
 87.10     (3) the property's gross tax, calculated by multiplying the 
 87.11  property's gross tax capacity times the total local tax rate and 
 87.12  adding the property's total property tax to the result the sum 
 87.13  of the aids enumerated in clause (4); 
 87.14     (4) a total of the following aids: 
 87.15     (i) education aids payable under chapters 124 and 124A; 
 87.16     (ii) local government aids for cities, towns, and counties 
 87.17  under chapter 477A; and 
 87.18     (iii) disparity reduction aid under section 273.1398; 
 87.19     (5) for homestead residential and agricultural properties, 
 87.20  the homestead and agricultural credit aid apportioned to the 
 87.21  property.  This amount is obtained by multiplying the total 
 87.22  local tax rate by the difference between the property's gross 
 87.23  and net tax capacities under section 273.13.  This amount must 
 87.24  be separately stated and identified as "homestead and 
 87.25  agricultural credit."  For purposes of comparison with the 
 87.26  previous year's amount for the statement for taxes payable in 
 87.27  1990, the statement must show the homestead credit for taxes 
 87.28  payable in 1989 under section 273.13, and the agricultural 
 87.29  credit under section 273.132 for taxes payable in 1989; 
 87.30     (6) any credits received under sections 273.119; 273.123; 
 87.31  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 87.32  473H.10, except that the amount of credit received under section 
 87.33  273.135 must be separately stated and identified as "taconite 
 87.34  tax relief"; and 
 87.35     (7) the net tax payable in the manner required in paragraph 
 87.36  (a). 
 88.1      (d) If the county uses envelopes for mailing property tax 
 88.2   statements and if the county agrees, a taxing district may 
 88.3   include a notice with the property tax statement notifying 
 88.4   taxpayers when the taxing district will begin its budget 
 88.5   deliberations for the current year, and encouraging taxpayers to 
 88.6   attend the hearings.  If the county allows notices to be 
 88.7   included in the envelope containing the property tax statement, 
 88.8   and if more than one taxing district relative to a given 
 88.9   property decides to include a notice with the tax statement, the 
 88.10  county treasurer or auditor must coordinate the process and may 
 88.11  combine the information on a single announcement.  
 88.12     The commissioner of revenue shall certify to the county 
 88.13  auditor the actual or estimated aids enumerated in clauses (3) 
 88.14  and (4) that local governments will receive in the following 
 88.15  year.  In the case of a county containing a city of the first 
 88.16  class, for taxes levied in 1991, and for all counties for taxes 
 88.17  levied in 1992 and thereafter, The commissioner must certify 
 88.18  this amount by September 1 of each year.  
 88.19     Sec. 8.  [DEPARTMENT OF REVENUE; STATE BUDGET STUDY.] 
 88.20     The commissioner of revenue shall study the feasibility of 
 88.21  enacting "truth in budgeting" requirements for state 
 88.22  government.  The study shall consider ways to make the state 
 88.23  budget and state budget procedures more accessible and 
 88.24  understandable to state taxpayers.  The study shall also 
 88.25  consider ways to increase taxpayer participation in the state 
 88.26  budget process, including the feasibility of public budget 
 88.27  presentations and hearings in selected locations around the 
 88.28  state.  The commissioner shall report to the legislature on the 
 88.29  results of the study by January 15, 1998. 
 88.30     Sec. 9.  [EFFECTIVE DATE.] 
 88.31     Sections 3 and 4 are effective for notices prepared 
 88.32  beginning in 1998 for taxes payable in 1999, and thereafter. 
 88.33     Section 5 is effective for newspaper advertisements 
 88.34  prepared beginning in 1998 for taxes payable in 1999, and 
 88.35  thereafter.  
 88.36     Section 6 is effective for public hearings beginning in 
 89.1   1998, and thereafter. 
 89.2      Section 7 is effective for property tax statements prepared 
 89.3   in 1999, and thereafter. 
 89.4      Section 8 is effective the day following final enactment. 
 89.5                              ARTICLE 6
 89.6                              SALES TAX
 89.7      Section 1.  Minnesota Statutes 1996, section 297A.15, is 
 89.8   amended by adding a subdivision to read: 
 89.9      Subd. 8.  [REFUND; APPROPRIATION.] Notwithstanding the 
 89.10  provisions of section 297A.25, subdivision 62, the tax on sales 
 89.11  of construction materials and supplies, shall be imposed and 
 89.12  collected as if the rate under section 297A.02, subdivision 1, 
 89.13  applied.  Upon application by the purchaser, on forms prescribed 
 89.14  by the commissioner, a refund equal to the reduction in the tax 
 89.15  due as a result of the application of the exemption under 
 89.16  section 297A.25, subdivision 62, shall be paid to the 
 89.17  purchaser.  The application must include sufficient information 
 89.18  to permit the commissioner to verify the sales tax paid.  The 
 89.19  application shall include information necessary for the 
 89.20  commissioner initially to verify that the purchases qualified 
 89.21  for the exemption under section 297A.25, subdivision 62.  No 
 89.22  more than two applications for refunds may be filed under this 
 89.23  subdivision in a calendar year.  Unless otherwise specifically 
 89.24  provided by this subdivision, the provisions of section 289A.40 
 89.25  apply to the refunds payable under this subdivision.  There is 
 89.26  annually appropriated to the commissioner of revenue the amount 
 89.27  required to make the refunds. 
 89.28     The amount to be refunded shall bear interest at the rate 
 89.29  in section 270.76 from the date the refund claim is filed with 
 89.30  the commissioner. 
 89.31     Sec. 2.  Minnesota Statutes 1996, section 297A.25, is 
 89.32  amended by adding a subdivision to read: 
 89.33     Subd. 62.  [CONSTRUCTION MATERIALS; FIRST CLASS 
 89.34  CITIES.] Construction materials and supplies are exempt from the 
 89.35  tax imposed under this chapter, regardless of whether purchased 
 89.36  by the owner or a contractor, subcontractor, or builder, if the 
 90.1   materials and supplies are used or consumed in the construction 
 90.2   or physical expansion of structures or facilities classified as 
 90.3   class 3 property under section 273.13, subdivision 24, and 
 90.4   located within a city of the first class. 
 90.5      The tax on the gross receipts for construction materials 
 90.6   and supplies exempt under this section must be imposed and 
 90.7   collected as if the sale were taxable and then refunded to the 
 90.8   taxpayer as prescribed in section 297A.15, subdivision 8. 
 90.9      Sec. 3.  [EFFECTIVE DATE.] 
 90.10     Sections 1 and 2 are effective for sales of construction 
 90.11  materials and supplies after June 30, 1997. 
 90.12                             ARTICLE 7
 90.13                     SCHOOL FACILITIES CHARGES
 90.14     Section 1.  [281A.01] [SCHOOL FACILITY CHARGES.] 
 90.15     Subdivision 1.  [REVENUE DEPARTMENT.] The commissioner of 
 90.16  revenue shall administer the future school facilities fee 
 90.17  program. 
 90.18     Subd. 2.  [DEFINITIONS.] For purposes of this section the 
 90.19  following terms have the meanings given them.  "2020 MUSA" means 
 90.20  the 2020 metropolitan urban service area established in the 
 90.21  local comprehensive plans that are approved by the metropolitan 
 90.22  council.  "Qualifying area" means the land designated for urban 
 90.23  services in the 2020 MUSA but not that land included in the 
 90.24  metropolitan urban service area designated for urban services 
 90.25  contained in local comprehensive plans that were approved by the 
 90.26  metropolitan council on or before July 1, 1997. 
 90.27     Subd. 3.  [APPLICATION.] The future school facilities fee 
 90.28  applies to new residential construction in qualifying areas for 
 90.29  which residential zoning is approved after July 1, 1997. 
 90.30     Subd. 4.  [FUTURE SCHOOL FACILITY FEE AMOUNT.] A future 
 90.31  school facility fee of $1,000 per bedroom must be imposed 
 90.32  against each new residential unit constructed within the 
 90.33  qualifying area defined in subdivision 2.  The fee is payable to 
 90.34  the commissioner of revenue and shall be due within 60 days from 
 90.35  the date the construction is substantially completed.  
 90.36     Subd. 5.  [EXEMPTION.] The future school facilities fee 
 91.1   does not apply to construction projects providing low-or 
 91.2   moderate-income housing if the need for such housing has been 
 91.3   identified in the comprehensive plan of the municipality in 
 91.4   which the residential construction occurs. 
 91.5      Subd. 6.  [REVENUE RESERVED.] Fees collected by the 
 91.6   commissioner of revenue must be placed in a reserved account.  
 91.7   The commissioner may recover its costs associated with the 
 91.8   legal, administrative, and other expenses related to the future 
 91.9   school facilities fee.  The remainder must be placed in trust 
 91.10  and held for school facility construction projects that occur in 
 91.11  the attendance areas from which the fees were collected. 
 91.12     Subd. 7.  [DISTRIBUTION OF FEES TO SCHOOL DISTRICTS.] A 
 91.13  school district that is building a new school facility or making 
 91.14  capital improvements to a school building that is located within 
 91.15  the geographic region defined in subdivision 2 shall notify the 
 91.16  commissioner of revenue of its construction project.  The 
 91.17  commissioner shall transfer any revenue held in trust for a 
 91.18  school building project in that attendance area in the school 
 91.19  district to the school district. 
 91.20     Subd. 8.  [REVENUE USES.] Future school facilities fees 
 91.21  paid by the commissioner to a school district must be used only 
 91.22  for the costs associated with constructing a new school 
 91.23  facility, repaying the principal and interest on bonds issued 
 91.24  for the construction of a school facility, or capital 
 91.25  improvements to an existing school facility, located within that 
 91.26  attendance area. 
 91.27     Subd. 9.  [NOTICE; RECORDING.] A future school facility fee 
 91.28  constitutes a lien upon the property, and must be recorded, and 
 91.29  a purchaser of real property must be notified of any future 
 91.30  school facility fees due. 
 91.31     Sec. 2.  [EFFECTIVE DATE.] 
 91.32     Section 1 is effective July 1, 1997. 
 91.33                             ARTICLE 8
 91.34                         FISCAL DISPARITIES
 91.35     Section 1.  Minnesota Statutes 1996, section 276A.04, is 
 91.36  amended to read: 
 92.1      276A.04 [INCREASE IN NET TAX CAPACITY.] 
 92.2      By July August 15 of 1997 and each subsequent year, the 
 92.3   auditor of each county in the area shall determine the amount, 
 92.4   if any, by which the net tax capacity determined in the 
 92.5   preceding year pursuant to section 276A.03, of 
 92.6   commercial-industrial property subject to taxation within each 
 92.7   municipality in the county exceeds the net tax capacity in 1995 
 92.8   of commercial-industrial property subject to taxation within 
 92.9   that municipality.  If a municipality is located in two or more 
 92.10  counties within the area, the auditors of those counties shall 
 92.11  certify the data required by section 276A.03 to the county 
 92.12  auditor responsible for allocating the levies of that 
 92.13  municipality between or among the affected counties.  That 
 92.14  county auditor shall determine the amount of the net excess, if 
 92.15  any, for the municipality under this section, and certify that 
 92.16  amount under section 276A.05.  The increase in total net tax 
 92.17  capacity determined by this section must be reduced by the 
 92.18  amount of any decreases in the net tax capacity of 
 92.19  commercial-industrial property resulting from any court 
 92.20  decisions, court-related stipulation agreements, or abatements 
 92.21  for a prior year, and only in the amount of such decreases made 
 92.22  during the 12-month period ending on May 1 of the current 
 92.23  assessment year, where the decreases, if originally reflected in 
 92.24  the determination of a prior year's net tax capacity under 
 92.25  section 276A.03, would have resulted in a smaller contribution 
 92.26  from the municipality in that year.  An adjustment for the 
 92.27  decreases shall be made only if the municipality made a 
 92.28  contribution in a prior year based on the higher net tax 
 92.29  capacity of the commercial-industrial property. 
 92.30     Sec. 2.  Minnesota Statutes 1996, section 276A.05, 
 92.31  subdivision 1, is amended to read: 
 92.32     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
 92.33  auditor shall certify the determinations under sections 276A.03 
 92.34  and 276A.04 to the administrative auditor on or before August 1 
 92.35  15 of each year.  The administrative auditor shall determine an 
 92.36  amount equal to 40 percent of the sum of the amounts certified 
 93.1   pursuant to section 276A.04.  The resulting amount shall be 
 93.2   known as the "areawide net tax capacity for ........(year)."  
 93.3      Sec. 3.  Minnesota Statutes 1996, section 276A.05, 
 93.4   subdivision 5, is amended to read: 
 93.5      Subd. 5.  [CERTIFICATION.] The product of the procedure 
 93.6   prescribed by subdivision 4 shall be known as the "areawide net 
 93.7   tax capacity for ......(year) attributable to 
 93.8   ..........(municipality)."  The administrative auditor shall 
 93.9   certify the product to the auditor of the county in which the 
 93.10  municipality is located on or before August September 15. 
 93.11     Sec. 4.  Minnesota Statutes 1996, section 276A.06, 
 93.12  subdivision 2, is amended to read: 
 93.13     Subd. 2.  [DEFINITION.] The net tax capacity of a 
 93.14  governmental unit is its net tax capacity as determined in 
 93.15  accordance with other provisions of law including section 
 93.16  469.177, subdivision 3, subject to the following adjustments:  
 93.17     (a) There must be subtracted from its net tax capacity, in 
 93.18  each municipality in which the governmental unit exercises ad 
 93.19  valorem taxing jurisdiction, an amount that bears the same 
 93.20  proportion to 40 percent of the amount certified in that year 
 93.21  pursuant to sections 276A.04 and 276A.05 for the municipality as 
 93.22  the total preceding year's net tax capacity of 
 93.23  commercial-industrial property which is subject to the taxing 
 93.24  jurisdiction of the governmental unit within the municipality, 
 93.25  determined without regard to section 469.177, subdivision 3, 
 93.26  bears to the total preceding year's net tax capacity of 
 93.27  commercial-industrial property within the municipality, 
 93.28  determined without regard to section 469.177, subdivision 3.  
 93.29     (b) There must be added to its net tax capacity, in each 
 93.30  municipality in which the governmental unit exercises ad valorem 
 93.31  taxing jurisdiction, an amount which bears the same proportion 
 93.32  to the areawide net tax capacity for the year attributable to 
 93.33  that municipality as the total preceding year's net tax capacity 
 93.34  of residential property which is subject to the taxing 
 93.35  jurisdiction of the governmental unit within the municipality 
 93.36  bears to the total preceding year's net tax capacity of 
 94.1   residential property of the municipality.  
 94.2      Sec. 5.  Minnesota Statutes 1996, section 276A.06, 
 94.3   subdivision 3, is amended to read: 
 94.4      Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
 94.5   apportion the levy of each governmental unit in the county in 
 94.6   the manner prescribed by this subdivision.  The auditor shall: 
 94.7      (a) by August 20 of 1997 and each subsequent year, 
 94.8   determine the areawide portion of the levy for each governmental 
 94.9   unit by multiplying the local tax rate of the governmental unit 
 94.10  for the preceding current levy year times the distribution value 
 94.11  set forth in subdivision 2, clause (b); and 
 94.12     (b) by September 5 of 1997 and each subsequent year, 
 94.13  determine the local portion of the current year's levy by 
 94.14  subtracting the resulting amount from clause (a) from the 
 94.15  governmental unit's current year's levy. 
 94.16     Sec. 6.  Minnesota Statutes 1996, section 276A.06, 
 94.17  subdivision 5, is amended to read: 
 94.18     Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
 94.19  February 5 of 1997 and each subsequent year, the county auditor 
 94.20  shall certify to the administrative auditor that portion of the 
 94.21  levy of each governmental unit determined pursuant to 
 94.22  subdivision 3, clause (a).  The administrative auditor shall 
 94.23  then determine the areawide tax rate sufficient to yield an 
 94.24  amount equal to the sum of the levies from the areawide net tax 
 94.25  capacity.  
 94.26     (b) On or before September 1 February 10 of each year, the 
 94.27  administrative auditor shall certify the areawide tax rate to 
 94.28  each of the county auditors. 
 94.29     For the purposes of the notice required under section 
 94.30  275.065, the deadline for the certification under paragraph (a) 
 94.31  is October 10, and the deadline for certification under 
 94.32  paragraph (b) is October 15. 
 94.33     For any governmental unit for which the county auditor has 
 94.34  not yet determined the local tax rate by January 31, the county 
 94.35  auditor shall determine the areawide portion of the levy based 
 94.36  on an estimated tax rate.  In the following year, the 
 95.1   distribution levy of the unit must be adjusted to correct for 
 95.2   the difference between the distribution levy actually received 
 95.3   and the distribution levy that would have been received if the 
 95.4   actual tax rate had been used. 
 95.5      Sec. 7.  Minnesota Statutes 1996, section 473F.06, is 
 95.6   amended to read: 
 95.7      473F.06 [INCREASE IN NET TAX CAPACITY.] 
 95.8      On or before July August 15 of each year, the auditor of 
 95.9   each county in the area shall determine the amount, if any, by 
 95.10  which the net tax capacity determined in the preceding year 
 95.11  under section 473F.05, of commercial-industrial property subject 
 95.12  to taxation within each municipality in the auditor's county 
 95.13  exceeds the net tax capacity in 1971 of commercial-industrial 
 95.14  property subject to taxation within that municipality.  If a 
 95.15  municipality is located in two or more counties within the area, 
 95.16  the auditors of those counties shall certify the data required 
 95.17  by section 473F.05 to the county auditor who is responsible 
 95.18  under other provisions of law for allocating the levies of that 
 95.19  municipality between or among the affected counties.  That 
 95.20  county auditor shall determine the amount of the net excess, if 
 95.21  any, for the municipality under this section, and certify that 
 95.22  amount under section 473F.07.  Notwithstanding any other 
 95.23  provision of sections 473F.01 to 473F.13 to the contrary, in the 
 95.24  case of a municipality which is designated on July 24, 1971, as 
 95.25  a redevelopment area under section 401(a)(4) of the Public Works 
 95.26  and Economic Development Act of 1965, Public Law Number 89-136, 
 95.27  the increase in its net tax capacity of commercial-industrial 
 95.28  property for purposes of this section shall be determined in 
 95.29  each year by using as a base the net tax capacity of 
 95.30  commercial-industrial property in that municipality in the 1989 
 95.31  assessment year, rather than the net tax capacity of such 
 95.32  property in 1971.  The increase in total net tax capacity 
 95.33  determined by this section shall be reduced by the amount of any 
 95.34  decreases in net tax capacity of commercial-industrial property 
 95.35  resulting from any court decisions, court related stipulation 
 95.36  agreements, or abatements for a prior year, and only in the 
 96.1   amount of such decreases made during the 12-month period ending 
 96.2   on May 1 of the current assessment year, where such decreases, 
 96.3   if originally reflected in the determination of a prior year's 
 96.4   net tax capacity under section 473F.05, would have resulted in a 
 96.5   smaller contribution from the municipality in that year.  An 
 96.6   adjustment for such decreases shall be made only if the 
 96.7   municipality made a contribution in a prior year based on the 
 96.8   higher net tax capacity of the commercial-industrial property. 
 96.9      Sec. 8.  Minnesota Statutes 1996, section 473F.07, 
 96.10  subdivision 1, is amended to read: 
 96.11     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
 96.12  auditor shall certify the determinations under sections 473F.05 
 96.13  and 473F.06 to the administrative auditor on or before August 1 
 96.14  15 of each year.  
 96.15     The administrative auditor shall determine an amount equal 
 96.16  to 40 percent of the sum of the amounts certified under section 
 96.17  473F.06.  The resulting amount shall be known as the "areawide 
 96.18  net tax capacity for ........(year)." 
 96.19     Sec. 9.  Minnesota Statutes 1996, section 473F.07, 
 96.20  subdivision 5, is amended to read: 
 96.21     Subd. 5.  [CERTIFICATION TO COUNTY AUDITOR.] The result of 
 96.22  the procedure prescribed by subdivision 4 shall be known as the 
 96.23  "areawide net tax capacity for ........(year) attributable to 
 96.24  ..................(municipality)."  The administrative auditor 
 96.25  shall certify such product to the auditor of the county in which 
 96.26  the municipality is located on or before August September 15. 
 96.27     Sec. 10.  Minnesota Statutes 1996, section 473F.08, 
 96.28  subdivision 2, is amended to read: 
 96.29     Subd. 2.  [COMPUTATION OF NET TAX CAPACITY.] The net tax 
 96.30  capacity of a governmental unit is its net tax capacity, as 
 96.31  determined in accordance with other provisions of law including 
 96.32  section 469.177, subdivision 3, subject to the following 
 96.33  adjustments:  
 96.34     (a) There shall be subtracted from its net tax capacity, in 
 96.35  each municipality in which the governmental unit exercises ad 
 96.36  valorem taxing jurisdiction, an amount which bears the same 
 97.1   proportion to 40 percent of the amount certified in that year 
 97.2   under sections 473F.06 and 473F.07 for the municipality as the 
 97.3   total preceding year's net tax capacity of commercial-industrial 
 97.4   property which is subject to the taxing jurisdiction of the 
 97.5   governmental unit within the municipality, determined without 
 97.6   regard to section 469.177, subdivision 3, bears to the total 
 97.7   preceding year's net tax capacity of commercial-industrial 
 97.8   property within the municipality, determined without regard to 
 97.9   section 469.177, subdivision 3; 
 97.10     (b) There shall be added to its net tax capacity, in each 
 97.11  municipality in which the governmental unit exercises ad valorem 
 97.12  taxing jurisdiction, an amount which bears the same proportion 
 97.13  to the areawide net tax capacity for the year attributable to 
 97.14  that municipality as the total preceding year's net tax capacity 
 97.15  of residential property which is subject to the taxing 
 97.16  jurisdiction of the governmental unit within the municipality 
 97.17  bears to the total preceding year's net tax capacity of 
 97.18  residential property of the municipality.  
 97.19     Sec. 11.  Minnesota Statutes 1996, section 473F.08, 
 97.20  subdivision 3, is amended to read: 
 97.21     Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
 97.22  apportion the levy of each governmental unit in the auditor's 
 97.23  county in the manner prescribed by this subdivision.  The 
 97.24  auditor shall: 
 97.25     (a) by August 20, determine the areawide portion of the 
 97.26  levy for each governmental unit by multiplying the local tax 
 97.27  rate of the governmental unit for the preceding current levy 
 97.28  year times the distribution value set forth in subdivision 2, 
 97.29  clause (b); and 
 97.30     (b) by September 5, determine the local portion of the 
 97.31  current year's levy by subtracting the resulting amount from 
 97.32  clause (a) from the governmental unit's current year's levy. 
 97.33     Sec. 12.  Minnesota Statutes 1996, section 473F.08, 
 97.34  subdivision 5, is amended to read: 
 97.35     Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
 97.36  February 5 of each year, the county auditor shall certify to the 
 98.1   administrative auditor that portion of the levy of each 
 98.2   governmental unit determined under subdivisions 3, clause (a), 
 98.3   3a, and 3b.  The administrative auditor shall then determine the 
 98.4   areawide tax rate sufficient to yield an amount equal to the sum 
 98.5   of such levies from the areawide net tax capacity. 
 98.6      (b) On or before September 1 February 10 of each year, the 
 98.7   administrative auditor shall certify the areawide tax rate to 
 98.8   each of the county auditors. 
 98.9      For the purposes of the notice required under section 
 98.10  275.065, the deadline for the certification under paragraph (a) 
 98.11  is October 10, and the deadline for certification under 
 98.12  paragraph (b) is October 15. 
 98.13     For any governmental unit for which the county auditor has 
 98.14  not yet determined the local tax rate by January 31, the county 
 98.15  auditor shall determine the areawide portion of the levy based 
 98.16  on an estimated tax rate.  In the following year, the 
 98.17  distribution levy of the unit must be adjusted to correct for 
 98.18  the difference between the distribution levy actually received 
 98.19  and the distribution levy that would have been received if the 
 98.20  actual tax rate had been used. 
 98.21     Sec. 13.  [REPEALER.] 
 98.22     Minnesota Statutes 1996, sections 276A.06, subdivision 9; 
 98.23  and 473F.08, subdivision 8a, are repealed. 
 98.24     Sec. 14.  [EFFECTIVE DATE.] 
 98.25     Sections 1 to 13 are effective for taxes payable in 1999 
 98.26  and subsequent years.