1.1                          A bill for an act 
  1.2             relating to taxation; reducing individual income tax 
  1.3             rates and adjusting income brackets; allowing a 
  1.4             corporate franchise tax election to treat all income 
  1.5             as business income; changing property tax class rates; 
  1.6             providing property tax reform; providing a property 
  1.7             tax credit for certain levies on agricultural 
  1.8             property; eliminating accelerated liability for sales, 
  1.9             cigarettes and tobacco, and liquor taxes; exempting 
  1.10            sales of items used in production of television 
  1.11            commercials from the sales and use tax; changing 
  1.12            administration of the sales tax exemption for capital 
  1.13            equipment; changing the automobile registration tax; 
  1.14            providing for funds transfers; providing for automatic 
  1.15            rebates; repealing MinnesotaCare taxes; amending 
  1.16            Minnesota Statutes 1998, sections 60A.15, subdivision 
  1.17            1; 62J.041, subdivision 1; 62Q.095, subdivision 6; 
  1.18            62R.24; 126C.13, subdivisions 1 and 2; 126C.17, 
  1.19            subdivision 6; 127A.48, subdivision 1; 168.013, 
  1.20            subdivision 1a; 214.16, subdivisions 2 and 3; 256L.02, 
  1.21            subdivision 3; 270B.01, subdivision 8; 270B.14, 
  1.22            subdivision 1; 273.13, subdivisions 22, 23, 24, 25, 
  1.23            and 31; 273.1382, subdivision 1; 289A.11, subdivision 
  1.24            1; 289A.18, subdivision 4; 289A.20, subdivision 4; 
  1.25            289A.56, subdivision 4; 290.06, subdivisions 2c and 
  1.26            2d; 290.091, subdivisions 1, 2, 3, and 6; 290.17, 
  1.27            subdivision 6; 297A.25, by adding a subdivision; and 
  1.28            297F.09, subdivisions 1 and 2; proposing coding for 
  1.29            new law in Minnesota Statutes, chapters 16A; 126C; 
  1.30            273; and 275; repealing Minnesota Statutes 1998, 
  1.31            sections 13.99, subdivision 86b; 16A.724; 16A.76; 
  1.32            62T.10; 144.1484, subdivision 2; 256L.02, subdivision 
  1.33            4; 273.127; 273.1382, subdivision 1a; 289A.60, 
  1.34            subdivision 15; 295.50; 295.51; 295.52; 295.53; 
  1.35            295.54; 295.55; 295.56; 295.57; 295.58; 295.581; 
  1.36            295.582; 295.59; 297A.15, subdivision 5; 297F.09, 
  1.37            subdivision 6; and 297G.09, subdivision 5. 
  1.38  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.39                             ARTICLE 1
  1.40                            INCOME TAXES
  1.41     Section 1.  Minnesota Statutes 1998, section 290.06, 
  2.1   subdivision 2c, is amended to read: 
  2.2      Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
  2.3   AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
  2.4   married individuals filing joint returns and surviving spouses 
  2.5   as defined in section 2(a) of the Internal Revenue Code must be 
  2.6   computed by applying to their taxable net income the following 
  2.7   schedule of rates: 
  2.8      (1) On the first ~~$19,910~~ $34,500, ~~6~~ 5.5 percent; 
  2.9      (2) On all over ~~$19,910~~ $34,500, but not 
  2.10  over ~~$79,120~~ $150,000, ~~8~~ 7.5 percent; 
  2.11     (3) On all over ~~$79,120~~ $150,000, ~~8.5~~ 8 percent. 
  2.12     Married individuals filing separate returns, estates, and 
  2.13  trusts must compute their income tax by applying the above rates 
  2.14  to their taxable income, except that the income brackets will be 
  2.15  one-half of the above amounts.  
  2.16     (b) The income taxes imposed by this chapter upon unmarried 
  2.17  individuals must be computed by applying to taxable net income 
  2.18  the following schedule of rates: 
  2.19     (1) On the first ~~$13,620~~ $17,250, ~~6~~ 5.5 percent; 
  2.20     (2) On all over ~~$13,620~~ $17,250, but not 
  2.21  over ~~$44,750~~ $75,000, ~~8~~ 7.5 percent; 
  2.22     (3) On all over ~~$44,750~~ $75,000, ~~8.5~~ 8 percent. 
  2.23     (c) The income taxes imposed by this chapter upon unmarried 
  2.24  individuals qualifying as a head of household as defined in 
  2.25  section 2(b) of the Internal Revenue Code must be computed by 
  2.26  applying to taxable net income the following schedule of rates: 
  2.27     (1) On the first ~~$16,770~~ $25,870, ~~6~~ 5.5 percent; 
  2.28     (2) On all over ~~$16,770~~ $25,870, but not 
  2.29  over ~~$67,390~~ $112,500, ~~8~~ 7.5 percent; 
  2.30     (3) On all over ~~$67,390~~ $112,500, ~~8.5~~ 8 percent. 
  2.31     (d) In lieu of a tax computed according to the rates set 
  2.32  forth in this subdivision, the tax of any individual taxpayer 
  2.33  whose taxable net income for the taxable year is less than an 
  2.34  amount determined by the commissioner must be computed in 
  2.35  accordance with tables prepared and issued by the commissioner 
  2.36  of revenue based on income brackets of not more than $100.  The 
  3.1   amount of tax for each bracket shall be computed at the rates 
  3.2   set forth in this subdivision, provided that the commissioner 
  3.3   may disregard a fractional part of a dollar unless it amounts to 
  3.4   50 cents or more, in which case it may be increased to $1. 
  3.5      (e) An individual who is not a Minnesota resident for the 
  3.6   entire year must compute the individual's Minnesota income tax 
  3.7   as provided in this subdivision.  After the application of the 
  3.8   nonrefundable credits provided in this chapter, the tax 
  3.9   liability must then be multiplied by a fraction in which:  
  3.10     (1) the numerator is the individual's Minnesota source 
  3.11  federal adjusted gross income as defined in section 62 of the 
  3.12  Internal Revenue Code disregarding income or loss flowing from a 
  3.13  corporation having a valid election for the taxable year under 
  3.14  section 1362 of the Internal Revenue Code but which is not an 
  3.15  "S" corporation under section 290.9725 and increased by the 
  3.16  additions required under section 290.01, subdivision 19a, 
  3.17  clauses (1) and (9), after applying the allocation and 
  3.18  assignability provisions of section 290.081, clause (a), or 
  3.19  290.17; and 
  3.20     (2) the denominator is the individual's federal adjusted 
  3.21  gross income as defined in section 62 of the Internal Revenue 
  3.22  Code of 1986, increased by the amounts specified in section 
  3.23  290.01, subdivision 19a, clauses (1), (5), (6), (7), and (9), 
  3.24  and reduced by the amounts specified in section 290.01, 
  3.25  subdivision 19b, clauses (1), (11), and (12). 
  3.26     Sec. 2.  Minnesota Statutes 1998, section 290.06, 
  3.27  subdivision 2d, is amended to read: 
  3.28     Subd. 2d.  [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 
  3.29  taxable years beginning after December 31, ~~1991~~ 1999, the 
  3.30  minimum and maximum dollar amounts for each rate bracket for 
  3.31  which a tax is imposed in subdivision 2c shall be adjusted for 
  3.32  inflation by the percentage determined under paragraph (b).  For 
  3.33  the purpose of making the adjustment as provided in this 
  3.34  subdivision all of the rate brackets provided in subdivision 2c 
  3.35  shall be the rate brackets as they existed for taxable years 
  3.36  beginning after December 31, ~~1990~~ 1998, and before January 
  4.1   1, ~~1992~~ 2000.  The rate applicable to any rate bracket must not 
  4.2   be changed.  The dollar amounts setting forth the tax shall be 
  4.3   adjusted to reflect the changes in the rate brackets.  The rate 
  4.4   brackets as adjusted must be rounded to the nearest $10 amount.  
  4.5   If the rate bracket ends in $5, it must be rounded up to the 
  4.6   nearest $10 amount.  
  4.7      (b) The commissioner shall adjust the rate brackets and by 
  4.8   the percentage determined pursuant to the provisions of section 
  4.9   1(f) of the Internal Revenue Code, except that in section 
  4.10  1(f)(3)(B) the word "~~1990~~ 1999" shall be substituted for the 
  4.11  word "~~1987~~ 1992."  For ~~1991~~ 2000, the commissioner shall then 
  4.12  determine the percent change from the 12 months ending on August 
  4.13  31, ~~1990~~ 1999, to the 12 months ending on August 31, ~~1991~~ 2000, 
  4.14  and in each subsequent year, from the 12 months ending on August 
  4.15  31, ~~1990~~ 1999, to the 12 months ending on August 31 of the year 
  4.16  preceding the taxable year.  The determination of the 
  4.17  commissioner pursuant to this subdivision shall not be 
  4.18  considered a "rule" and shall not be subject to the 
  4.19  Administrative Procedure Act contained in chapter 14.  
  4.20     No later than December 15 of each year, the commissioner 
  4.21  shall announce the specific percentage that will be used to 
  4.22  adjust the tax rate brackets. 
  4.23     Sec. 3.  Minnesota Statutes 1998, section 290.091, 
  4.24  subdivision 1, is amended to read: 
  4.25     Subdivision 1.  [IMPOSITION OF TAX.] In addition to all 
  4.26  other taxes imposed by this chapter a tax is imposed on 
  4.27  individuals, estates, and trusts equal to the excess (if any) of 
  4.28     (a) an amount equal to ~~seven~~ 6.8 percent of alternative 
  4.29  minimum taxable income after subtracting the exemption amount, 
  4.30  over 
  4.31     (b) the regular tax for the taxable year. 
  4.32     Sec. 4.  Minnesota Statutes 1998, section 290.091, 
  4.33  subdivision 2, is amended to read: 
  4.34     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
  4.35  this section, the following terms have the meanings given: 
  4.36     (a) "Alternative minimum taxable income" means the sum of 
  5.1   the following for the taxable year: 
  5.2      (1) the taxpayer's federal alternative minimum taxable 
  5.3   income as defined in section 55(b)(2) of the Internal Revenue 
  5.4   Code; 
  5.5      (2) the taxpayer's itemized deductions allowed in computing 
  5.6   federal alternative minimum taxable income, but excluding: 
  5.7      (i) the Minnesota charitable contribution deduction; 
  5.8      (ii) the medical expense deduction; 
  5.9      (iii) the casualty, theft, and disaster loss deduction; and 
  5.10     (iv) the impairment-related work expenses of a disabled 
  5.11  person; 
  5.12     (3) for depletion allowances computed under section 613A(c) 
  5.13  of the Internal Revenue Code, with respect to each property (as 
  5.14  defined in section 614 of the Internal Revenue Code), to the 
  5.15  extent not included in federal alternative minimum taxable 
  5.16  income, the excess of the deduction for depletion allowable 
  5.17  under section 611 of the Internal Revenue Code for the taxable 
  5.18  year over the adjusted basis of the property at the end of the 
  5.19  taxable year (determined without regard to the depletion 
  5.20  deduction for the taxable year); 
  5.21     (4) to the extent not included in federal alternative 
  5.22  minimum taxable income, the amount of the tax preference for 
  5.23  intangible drilling cost under section 57(a)(2) of the Internal 
  5.24  Revenue Code determined without regard to subparagraph (E); 
  5.25     (5) to the extent not included in federal alternative 
  5.26  minimum taxable income, the amount of interest income as 
  5.27  provided by section 290.01, subdivision 19a, clause (1); 
  5.28     (6) amounts added to federal taxable income as provided by 
  5.29  section 290.01, subdivision 19a, clauses (5), (6), and (7); 
  5.30     less the sum of the amounts determined under the following 
  5.31  clauses (1) to (4): 
  5.32     (1) interest income as defined in section 290.01, 
  5.33  subdivision 19b, clause (1); 
  5.34     (2) an overpayment of state income tax as provided by 
  5.35  section 290.01, subdivision 19b, clause (2), to the extent 
  5.36  included in federal alternative minimum taxable income; 
  6.1      (3) the amount of investment interest paid or accrued 
  6.2   within the taxable year on indebtedness to the extent that the 
  6.3   amount does not exceed net investment income, as defined in 
  6.4   section 163(d)(4) of the Internal Revenue Code.  Interest does 
  6.5   not include amounts deducted in computing federal adjusted gross 
  6.6   income; and 
  6.7      (4) amounts subtracted from federal taxable income as 
  6.8   provided by section 290.01, subdivision 19b, clauses (11) and 
  6.9   (12). 
  6.10     In the case of an estate or trust, alternative minimum 
  6.11  taxable income must be computed as provided in section 59(c) of 
  6.12  the Internal Revenue Code. 
  6.13     (b) "Investment interest" means investment interest as 
  6.14  defined in section 163(d)(3) of the Internal Revenue Code. 
  6.15     (c) "Tentative minimum tax" equals ~~seven~~ 6.8 percent of 
  6.16  alternative minimum taxable income after subtracting the 
  6.17  exemption amount determined under subdivision 3. 
  6.18     (d) "Regular tax" means the tax that would be imposed under 
  6.19  this chapter (without regard to this section and section 
  6.20  290.032), reduced by the sum of the nonrefundable credits 
  6.21  allowed under this chapter.  
  6.22     (e) "Net minimum tax" means the minimum tax imposed by this 
  6.23  section. 
  6.24     (f) "Minnesota charitable contribution deduction" means a 
  6.25  charitable contribution deduction under section 170 of the 
  6.26  Internal Revenue Code to or for the use of an entity described 
  6.27  in section 290.21, subdivision 3, clauses (a) to (e).  When the 
  6.28  federal deduction for charitable contributions is limited under 
  6.29  section 170(b) of the Internal Revenue Code, the allowable 
  6.30  contributions in the year of contribution are deemed to be first 
  6.31  contributions to entities described in section 290.21, 
  6.32  subdivision 3, clauses (a) to (e). 
  6.33     Sec. 5.  Minnesota Statutes 1998, section 290.091, 
  6.34  subdivision 3, is amended to read: 
  6.35     Subd. 3.  [EXEMPTION AMOUNT.] (a) For purposes of computing 
  6.36  the alternative minimum tax, the initial exemption amount ~~is the~~ 
  7.1   ~~exemption determined under section 55(d) of the Internal Revenue~~ 
  7.2   ~~Code, as amended through December 31, 1992, except that~~ 
  7.3   ~~alternative minimum taxable income as determined under this~~ 
  7.4   ~~section must be substituted in the computation of the phase out~~ 
  7.5   ~~under section 55(d)(3).~~ equals the following amounts: 
  7.6      (1) for an individual who is not a married individual and 
  7.7   is not a surviving spouse, $30,000; 
  7.8      (2) for a married individual filing a separate return or an 
  7.9   estate or a trust, one-half of the amount determined under 
  7.10  clause (3) for joint returns; 
  7.11     (3) for an individual filing a joint return or a surviving 
  7.12  spouse, $60,000. 
  7.13     (b) The exemption amount is determined by reducing the 
  7.14  initial exemption amount, as determined under paragraph (a), by 
  7.15  25 percent of the amount of alternative minimum taxable income 
  7.16  of the taxpayer that exceeds: 
  7.17     (1) for an individual who is not a married individual and 
  7.18  is not a surviving spouse, $112,500; 
  7.19     (2) for a married individual filing a separate return or an 
  7.20  estate or a trust, one-half of the amount determined under 
  7.21  clause (3); 
  7.22     (3) for an individual filing a joint return or a surviving 
  7.23  spouse, $225,000. 
  7.24     Sec. 6.  Minnesota Statutes 1998, section 290.091, 
  7.25  subdivision 6, is amended to read: 
  7.26     Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
  7.27  is allowed against the tax imposed by this chapter on 
  7.28  individuals, trusts, and estates equal to the minimum tax credit 
  7.29  for the taxable year.  The minimum tax credit equals the 
  7.30  adjusted net minimum tax for taxable years beginning after 
  7.31  December 31, 1988, reduced by the minimum tax credits allowed in 
  7.32  a prior taxable year.  The credit may not exceed the excess (if 
  7.33  any) for the taxable year of 
  7.34     (1) the regular tax, over 
  7.35     (2) the greater of (i) the tentative alternative minimum 
  7.36  tax, or (ii) zero. 
  8.1      (b) The adjusted net minimum tax for a taxable year equals 
  8.2   the lesser of the net minimum tax or the excess (if any) of 
  8.3      (1) the tentative minimum tax, over 
  8.4      (2) ~~seven~~ 6.8 percent of the sum of 
  8.5      (i) adjusted gross income as defined in section 62 of the 
  8.6   Internal Revenue Code, 
  8.7      (ii) interest income as defined in section 290.01, 
  8.8   subdivision 19a, clause (1), 
  8.9      (iii) the amount added to federal taxable income as 
  8.10  provided by section 290.01, subdivision 19a, clauses (5), (6), 
  8.11  and (7), 
  8.12     (iv) interest on specified private activity bonds, as 
  8.13  defined in section 57(a)(5) of the Internal Revenue Code, to the 
  8.14  extent not included under clause (ii), 
  8.15     (v) depletion as defined in section 57(a)(1), determined 
  8.16  without regard to the last sentence of paragraph (1), of the 
  8.17  Internal Revenue Code, less 
  8.18     (vi) the deductions allowed in computing alternative 
  8.19  minimum taxable income provided in subdivision 2, paragraph (a), 
  8.20  clause (2) of the first series of clauses and clauses (1), (2), 
  8.21  (3), and (4) of the second series of clauses, and 
  8.22     (vii) the exemption amount determined under subdivision 3. 
  8.23     In the case of an individual who is not a Minnesota 
  8.24  resident for the entire year, adjusted net minimum tax must be 
  8.25  multiplied by the fraction defined in section 290.06, 
  8.26  subdivision 2c, paragraph (e).  In the case of a trust or 
  8.27  estate, adjusted net minimum tax must be multiplied by the 
  8.28  fraction defined under subdivision 4, paragraph (b). 
  8.29     Sec. 7.  [EFFECTIVE DATE.] 
  8.30     Sections 1 to 6 are effective for taxable years beginning 
  8.31  after December 31, 1998. 
  8.32                             ARTICLE 2
  8.33                        PROPERTY TAX REFORM
  8.34     Section 1.  Minnesota Statutes 1998, section 126C.13, 
  8.35  subdivision 1, is amended to read: 
  8.36     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] (a) The 
  9.1   commissioner must establish the general education tax ~~rate~~ rates 
  9.2   by July 1 of each year for levies payable in the following year. 
  9.3      (b) The total dollar amount raised by the general education 
  9.4   levy is $1,387,100,000 for fiscal year 2001 and later.  The 
  9.5   general education net tax capacity rate must be a rate, rounded 
  9.6   up to the nearest hundredth of a percent, that, when applied to 
  9.7   the adjusted net tax capacity for all districts, raises ~~the~~ 
  9.8   ~~amount specified in this subdivision.  The general education tax~~ 
  9.9   ~~rate must be the rate that raises $1,385,500,000 for fiscal year~~ 
  9.10  ~~1999, $1,325,500,000 for fiscal year 2000, and~~ $1,387,100,000 
  9.11  for fiscal year 2001, and later fiscal years.  Any general 
  9.12  education levy amount in excess of $1,387,100,000 shall be 
  9.13  separately specified and levied against referendum market value. 
  9.14     (c) For fiscal year 2001 and later, the general education 
  9.15  referendum market value rate shall be a rate that, when applied 
  9.16  to the adjusted referendum market value for all districts, 
  9.17  raises a dollar amount equal to the difference between the total 
  9.18  general education levy and $1,387,100,000. 
  9.19     (d) The general education tax ~~rate~~ rates may not be changed 
  9.20  due to changes or corrections made to a district's adjusted net 
  9.21  tax capacity or adjusted referendum market value after the 
  9.22  tax ~~rate has~~ rates have been established.  If the levy target 
  9.23  for fiscal year 1999 or fiscal year 2000 is changed by another 
  9.24  law enacted during the 1997 or 1998 session, the commissioner 
  9.25  shall reduce the general education levy target in this section 
  9.26  by the amount of the reduction in the enacted law. 
  9.27     Sec. 2.  Minnesota Statutes 1998, section 126C.13, 
  9.28  subdivision 2, is amended to read: 
  9.29     Subd. 2.  [GENERAL EDUCATION LEVY.] To obtain general 
  9.30  education revenue, excluding transition revenue and supplemental 
  9.31  revenue, a district may levy an amount not to exceed the sum of 
  9.32  the general education tax rate times the adjusted net tax 
  9.33  capacity of the district for the preceding year and the general 
  9.34  education referendum market value tax rate times the adjusted 
  9.35  referendum market value of the district for the preceding year.  
  9.36  If the amount of the general education levy would exceed the 
 10.1   general education revenue, excluding supplemental revenue, the 
 10.2   general education levy must be determined according to 
 10.3   subdivision 3.  
 10.4      Sec. 3.  Minnesota Statutes 1998, section 126C.17, 
 10.5   subdivision 6, is amended to read: 
 10.6      Subd. 6.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
 10.7   year ~~1999~~ 2001 and thereafter, a district's referendum 
 10.8   equalization levy for a referendum levied against the referendum 
 10.9   market value of all taxable property as defined in section 
 10.10  126C.01, subdivision 3, equals the district's referendum 
 10.11  equalization revenue times the lesser of one or the ratio of the 
 10.12  district's adjusted referendum market value per resident pupil 
 10.13  unit to $476,000. 
 10.14     (b) For fiscal year 1999 and thereafter, a district's 
 10.15  referendum equalization levy for a referendum levied against the 
 10.16  net tax capacity of all taxable property equals the district's 
 10.17  referendum equalization revenue times the lesser of one or the 
 10.18  ratio of the district's adjusted net tax capacity per resident 
 10.19  pupil unit to $10,000. 
 10.20     Sec. 4.  [126C.173] [SCHOOL DISTRICT LEVIES.] 
 10.21     Subdivision 1.  [CATEGORICAL PROGRAM LEVY.] "Categorical 
 10.22  program levy" means a district's total levy less the sum of the 
 10.23  district's basic general education program levy under section 
 10.24  126C.13, subdivision 2, debt service levy under section 123B.55, 
 10.25  and operating referendum levy under section 126C.17. 
 10.26     Subd. 2.  [CATEGORICAL NET TAX CAPACITY LEVY.] For taxes 
 10.27  payable in 2000 and later, each school district's categorical 
 10.28  net tax capacity levy is equal to the lesser of its categorical 
 10.29  program levy for taxes payable in 1999, or its categorical 
 10.30  program levy for that year. 
 10.31     Subd. 3.  [CATEGORICAL MARKET VALUE LEVY.] For taxes 
 10.32  payable in 2000 and later, a district's categorical market value 
 10.33  levy is equal to the difference between its categorical program 
 10.34  levy under subdivision 1 and its categorical tax capacity levy 
 10.35  under subdivision 2. 
 10.36     Sec. 5.  [126C.423] [DEBT LEVY; MARKET VALUE.] 
 11.1      Except as otherwise provided in sections 126C.17 and 
 11.2   126C.18, a school district levy imposed to pay obligations 
 11.3   approved by the electors under section 475.58 after November 1, 
 11.4   1999, for taxes payable in 2000 or thereafter, must be levied 
 11.5   against the referendum market value of all taxable property as 
 11.6   defined in section 126C.01, subdivision 3.  A levy subject to 
 11.7   the requirements of this section must be separately certified to 
 11.8   the county auditor under section 275.07. 
 11.9      Sec. 6.  Minnesota Statutes 1998, section 127A.48, 
 11.10  subdivision 1, is amended to read: 
 11.11     Subdivision 1.  [COMPUTATION.] The department of revenue 
 11.12  must annually conduct an assessment/sales ratio study of the 
 11.13  taxable property in each school district in accordance with the 
 11.14  procedures in subdivisions 2 and 3.  Based upon the results of 
 11.15  this assessment/sales ratio study, the department of revenue 
 11.16  must determine an aggregate equalized net tax capacity for the 
 11.17  various classes of taxable property in each district, which tax 
 11.18  capacity shall be designated as the adjusted net tax 
 11.19  capacity.  The department shall also, based upon the results of 
 11.20  the assessment/sales ratio study, determine the equalized 
 11.21  referendum market value for each school district which shall be 
 11.22  designated as the adjusted referendum market value.  The 
 11.23  adjusted net tax capacities shall be determined using the net 
 11.24  tax capacity percentages in effect for the assessment year 
 11.25  following the assessment year of the study.  The department of 
 11.26  revenue must make whatever estimates are necessary to account 
 11.27  for changes in the classification system.  The department of 
 11.28  revenue may incur the expense necessary to make the 
 11.29  determinations.  The commissioner of revenue may reimburse any 
 11.30  county or governmental official for requested services performed 
 11.31  in ascertaining the adjusted net tax capacity.  On or before 
 11.32  March 15 annually, the department of revenue shall file with the 
 11.33  chair of the tax committee of the house of representatives and 
 11.34  the chair of the committee on taxes and tax laws of the senate a 
 11.35  report of adjusted net tax capacities.  On or before June 15 
 11.36  annually, the department of revenue shall file its final report 
 12.1   on the adjusted net tax capacities established by the previous 
 12.2   year's assessments and the current year's net tax capacity 
 12.3   percentages with the commissioner of children, families, and 
 12.4   learning and each county auditor for those districts for which 
 12.5   the auditor has the responsibility for determination of local 
 12.6   tax rates.  A copy of the report so filed shall be mailed to the 
 12.7   clerk of each district involved and to the county assessor or 
 12.8   supervisor of assessments of the county or counties in which 
 12.9   each district is located. 
 12.10     Sec. 7.  Minnesota Statutes 1998, section 273.13, 
 12.11  subdivision 22, is amended to read: 
 12.12     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
 12.13  23, real estate which is residential and used for homestead 
 12.14  purposes is class 1.  The market value of class 1a property must 
 12.15  be determined based upon the value of the house, garage, and 
 12.16  land.  
 12.17     The first $75,000 of market value of class 1a property has 
 12.18  a net class rate of one percent of its market value; and the 
 12.19  market value of class 1a property that exceeds $75,000 has a 
 12.20  class rate of ~~1.7~~ 1.5 percent of its market value.  
 12.21     (b) Class 1b property includes homestead real estate or 
 12.22  homestead manufactured homes used for the purposes of a 
 12.23  homestead by 
 12.24     (1) any blind person, or the blind person and the blind 
 12.25  person's spouse; or 
 12.26     (2) any person, hereinafter referred to as "veteran," who: 
 12.27     (i) served in the active military or naval service of the 
 12.28  United States; and 
 12.29     (ii) is entitled to compensation under the laws and 
 12.30  regulations of the United States for permanent and total 
 12.31  service-connected disability due to the loss, or loss of use, by 
 12.32  reason of amputation, ankylosis, progressive muscular 
 12.33  dystrophies, or paralysis, of both lower extremities, such as to 
 12.34  preclude motion without the aid of braces, crutches, canes, or a 
 12.35  wheelchair; and 
 12.36     (iii) has acquired a special housing unit with special 
 13.1   fixtures or movable facilities made necessary by the nature of 
 13.2   the veteran's disability, or the surviving spouse of the 
 13.3   deceased veteran for as long as the surviving spouse retains the 
 13.4   special housing unit as a homestead; or 
 13.5      (3) any person who: 
 13.6      (i) is permanently and totally disabled and 
 13.7      (ii) receives 90 percent or more of total income from 
 13.8      (A) aid from any state as a result of that disability; or 
 13.9      (B) supplemental security income for the disabled; or 
 13.10     (C) workers' compensation based on a finding of total and 
 13.11  permanent disability; or 
 13.12     (D) social security disability, including the amount of a 
 13.13  disability insurance benefit which is converted to an old age 
 13.14  insurance benefit and any subsequent cost of living increases; 
 13.15  or 
 13.16     (E) aid under the federal Railroad Retirement Act of 1937, 
 13.17  United States Code Annotated, title 45, section 228b(a)5; or 
 13.18     (F) a pension from any local government retirement fund 
 13.19  located in the state of Minnesota as a result of that 
 13.20  disability; or 
 13.21     (G) pension, annuity, or other income paid as a result of 
 13.22  that disability from a private pension or disability plan, 
 13.23  including employer, employee, union, and insurance plans and 
 13.24     (iii) has household income as defined in section 290A.03, 
 13.25  subdivision 5, of $50,000 or less; or 
 13.26     (4) any person who is permanently and totally disabled and 
 13.27  whose household income as defined in section 290A.03, 
 13.28  subdivision 5, is 275 percent or less of the federal poverty 
 13.29  level. 
 13.30     Property is classified and assessed under clause (4) only 
 13.31  if the government agency or income-providing source certifies, 
 13.32  upon the request of the homestead occupant, that the homestead 
 13.33  occupant satisfies the disability requirements of this paragraph.
 13.34     Property is classified and assessed pursuant to clause (1) 
 13.35  only if the commissioner of economic security certifies to the 
 13.36  assessor that the homestead occupant satisfies the requirements 
 14.1   of this paragraph.  
 14.2      Permanently and totally disabled for the purpose of this 
 14.3   subdivision means a condition which is permanent in nature and 
 14.4   totally incapacitates the person from working at an occupation 
 14.5   which brings the person an income.  The first $32,000 market 
 14.6   value of class 1b property has a net class rate of .45 percent 
 14.7   of its market value.  The remaining market value of class 1b 
 14.8   property has a net class rate using the rates for class 1 or 
 14.9   class 2a property, whichever is appropriate, of similar market 
 14.10  value.  
 14.11     (c) Class 1c property is commercial use real property that 
 14.12  abuts a lakeshore line and is devoted to temporary and seasonal 
 14.13  residential occupancy for recreational purposes but not devoted 
 14.14  to commercial purposes for more than 250 days in the year 
 14.15  preceding the year of assessment, and that includes a portion 
 14.16  used as a homestead by the owner, which includes a dwelling 
 14.17  occupied as a homestead by a shareholder of a corporation that 
 14.18  owns the resort or a partner in a partnership that owns the 
 14.19  resort, even if the title to the homestead is held by the 
 14.20  corporation or partnership.  For purposes of this clause, 
 14.21  property is devoted to a commercial purpose on a specific day if 
 14.22  any portion of the property, excluding the portion used 
 14.23  exclusively as a homestead, is used for residential occupancy 
 14.24  and a fee is charged for residential occupancy.  Class 1c 
 14.25  property has a class rate of one percent of total market value 
 14.26  with the following limitation:  the area of the property must 
 14.27  not exceed 100 feet of lakeshore footage for each cabin or 
 14.28  campsite located on the property up to a total of 800 feet and 
 14.29  500 feet in depth, measured away from the lakeshore.  If any 
 14.30  portion of the class 1c resort property is classified as class 
 14.31  4c under subdivision 25, the entire property must meet the 
 14.32  requirements of subdivision 25, paragraph (d), clause (1), to 
 14.33  qualify for class 1c treatment under this paragraph. 
 14.34     (d) Class 1d property includes structures that meet all of 
 14.35  the following criteria: 
 14.36     (1) the structure is located on property that is classified 
 15.1   as agricultural property under section 273.13, subdivision 23; 
 15.2      (2) the structure is occupied exclusively by seasonal farm 
 15.3   workers during the time when they work on that farm, and the 
 15.4   occupants are not charged rent for the privilege of occupying 
 15.5   the property, provided that use of the structure for storage of 
 15.6   farm equipment and produce does not disqualify the property from 
 15.7   classification under this paragraph; 
 15.8      (3) the structure meets all applicable health and safety 
 15.9   requirements for the appropriate season; and 
 15.10     (4) the structure is not salable as residential property 
 15.11  because it does not comply with local ordinances relating to 
 15.12  location in relation to streets or roads. 
 15.13     The market value of class 1d property has the same class 
 15.14  rates as class 1a property under paragraph (a). 
 15.15     Sec. 8.  Minnesota Statutes 1998, section 273.13, 
 15.16  subdivision 23, is amended to read: 
 15.17     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 15.18  land including any improvements that is homesteaded.  The market 
 15.19  value of the house and garage and immediately surrounding one 
 15.20  acre of land has the same class rates as class 1a property under 
 15.21  subdivision 22.  The value of the remaining land including 
 15.22  improvements up to $115,000 has a net class rate of ~~0.35~~ 0.3 
 15.23  percent of market value.  The remaining value of class 2a 
 15.24  property over $115,000 of market value that does not exceed 320 
 15.25  acres has a net class rate of ~~0.8~~ 0.7 percent of market value.  
 15.26  The remaining property over $115,000 market value in excess of 
 15.27  320 acres has a class rate of ~~1.25~~ one percent of market value. 
 15.28     (b) Class 2b property is (1) real estate, rural in 
 15.29  character and used exclusively for growing trees for timber, 
 15.30  lumber, and wood and wood products; (2) real estate that is not 
 15.31  improved with a structure and is used exclusively for growing 
 15.32  trees for timber, lumber, and wood and wood products, if the 
 15.33  owner has participated or is participating in a cost-sharing 
 15.34  program for afforestation, reforestation, or timber stand 
 15.35  improvement on that particular property, administered or 
 15.36  coordinated by the commissioner of natural resources; (3) real 
 16.1   estate that is nonhomestead agricultural land; or (4) a landing 
 16.2   area or public access area of a privately owned public use 
 16.3   airport.  Class 2b property has a net class rate of ~~1.25~~ one 
 16.4   percent of market value. 
 16.5      (c) Agricultural land as used in this section means 
 16.6   contiguous acreage of ten acres or more, used during the 
 16.7   preceding year for agricultural purposes.  "Agricultural 
 16.8   purposes" as used in this section means the raising or 
 16.9   cultivation of agricultural products or enrollment in the 
 16.10  Reinvest in Minnesota program under sections 103F.501 to 
 16.11  103F.535 or the federal Conservation Reserve Program as 
 16.12  contained in Public Law Number 99-198.  Contiguous acreage on 
 16.13  the same parcel, or contiguous acreage on an immediately 
 16.14  adjacent parcel under the same ownership, may also qualify as 
 16.15  agricultural land, but only if it is pasture, timber, waste, 
 16.16  unusable wild land, or land included in state or federal farm 
 16.17  programs.  Agricultural classification for property shall be 
 16.18  determined excluding the house, garage, and immediately 
 16.19  surrounding one acre of land, and shall not be based upon the 
 16.20  market value of any residential structures on the parcel or 
 16.21  contiguous parcels under the same ownership. 
 16.22     (d) Real estate, excluding the house, garage, and 
 16.23  immediately surrounding one acre of land, of less than ten acres 
 16.24  which is exclusively and intensively used for raising or 
 16.25  cultivating agricultural products, shall be considered as 
 16.26  agricultural land.  
 16.27     Land shall be classified as agricultural even if all or a 
 16.28  portion of the agricultural use of that property is the leasing 
 16.29  to, or use by another person for agricultural purposes. 
 16.30     Classification under this subdivision is not determinative 
 16.31  for qualifying under section 273.111. 
 16.32     The property classification under this section supersedes, 
 16.33  for property tax purposes only, any locally administered 
 16.34  agricultural policies or land use restrictions that define 
 16.35  minimum or maximum farm acreage. 
 16.36     (e) The term "agricultural products" as used in this 
 17.1   subdivision includes production for sale of:  
 17.2      (1) livestock, dairy animals, dairy products, poultry and 
 17.3   poultry products, fur-bearing animals, horticultural and nursery 
 17.4   stock described in sections 18.44 to 18.61, fruit of all kinds, 
 17.5   vegetables, forage, grains, bees, and apiary products by the 
 17.6   owner; 
 17.7      (2) fish bred for sale and consumption if the fish breeding 
 17.8   occurs on land zoned for agricultural use; 
 17.9      (3) the commercial boarding of horses if the boarding is 
 17.10  done in conjunction with raising or cultivating agricultural 
 17.11  products as defined in clause (1); 
 17.12     (4) property which is owned and operated by nonprofit 
 17.13  organizations used for equestrian activities, excluding racing; 
 17.14  and 
 17.15     (5) game birds and waterfowl bred and raised for use on a 
 17.16  shooting preserve licensed under section 97A.115.  
 17.17     (f) If a parcel used for agricultural purposes is also used 
 17.18  for commercial or industrial purposes, including but not limited 
 17.19  to:  
 17.20     (1) wholesale and retail sales; 
 17.21     (2) processing of raw agricultural products or other goods; 
 17.22     (3) warehousing or storage of processed goods; and 
 17.23     (4) office facilities for the support of the activities 
 17.24  enumerated in clauses (1), (2), and (3), 
 17.25  the assessor shall classify the part of the parcel used for 
 17.26  agricultural purposes as class 1b, 2a, or 2b, whichever is 
 17.27  appropriate, and the remainder in the class appropriate to its 
 17.28  use.  The grading, sorting, and packaging of raw agricultural 
 17.29  products for first sale is considered an agricultural purpose.  
 17.30  A greenhouse or other building where horticultural or nursery 
 17.31  products are grown that is also used for the conduct of retail 
 17.32  sales must be classified as agricultural if it is primarily used 
 17.33  for the growing of horticultural or nursery products from seed, 
 17.34  cuttings, or roots and occasionally as a showroom for the retail 
 17.35  sale of those products.  Use of a greenhouse or building only 
 17.36  for the display of already grown horticultural or nursery 
 18.1   products does not qualify as an agricultural purpose.  
 18.2      The assessor shall determine and list separately on the 
 18.3   records the market value of the homestead dwelling and the one 
 18.4   acre of land on which that dwelling is located.  If any farm 
 18.5   buildings or structures are located on this homesteaded acre of 
 18.6   land, their market value shall not be included in this separate 
 18.7   determination.  
 18.8      (g) To qualify for classification under paragraph (b), 
 18.9   clause (4), a privately owned public use airport must be 
 18.10  licensed as a public airport under section 360.018.  For 
 18.11  purposes of paragraph (b), clause (4), "landing area" means that 
 18.12  part of a privately owned public use airport properly cleared, 
 18.13  regularly maintained, and made available to the public for use 
 18.14  by aircraft and includes runways, taxiways, aprons, and sites 
 18.15  upon which are situated landing or navigational aids.  A landing 
 18.16  area also includes land underlying both the primary surface and 
 18.17  the approach surfaces that comply with all of the following:  
 18.18     (i) the land is properly cleared and regularly maintained 
 18.19  for the primary purposes of the landing, taking off, and taxiing 
 18.20  of aircraft; but that portion of the land that contains 
 18.21  facilities for servicing, repair, or maintenance of aircraft is 
 18.22  not included as a landing area; 
 18.23     (ii) the land is part of the airport property; and 
 18.24     (iii) the land is not used for commercial or residential 
 18.25  purposes. 
 18.26  The land contained in a landing area under paragraph (b), clause 
 18.27  (4), must be described and certified by the commissioner of 
 18.28  transportation.  The certification is effective until it is 
 18.29  modified, or until the airport or landing area no longer meets 
 18.30  the requirements of paragraph (b), clause (4).  For purposes of 
 18.31  paragraph (b), clause (4), "public access area" means property 
 18.32  used as an aircraft parking ramp, apron, or storage hangar, or 
 18.33  an arrival and departure building in connection with the airport.
 18.34     Sec. 9.  Minnesota Statutes 1998, section 273.13, 
 18.35  subdivision 24, is amended to read: 
 18.36     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 19.1   property and utility real and personal property, except class 5 
 19.2   property as identified in subdivision 31, clause (1), is class 
 19.3   3a.  Each parcel has a class rate of ~~2.45~~ two percent of the 
 19.4   first tier of market value, and ~~3.5~~ three percent of the 
 19.5   remaining market value, except that in the case of contiguous 
 19.6   parcels of commercial and industrial property owned by the same 
 19.7   person or entity, only the value equal to the first-tier value 
 19.8   of the contiguous parcels qualifies for the reduced class rate.  
 19.9   For the purposes of this subdivision, the first tier means the 
 19.10  first $150,000 of market value.  In the case of utility property 
 19.11  owned by one person or entity, only one parcel in each county 
 19.12  has a reduced class rate on the first tier of market value. 
 19.13     For purposes of this paragraph, parcels are considered to 
 19.14  be contiguous even if they are separated from each other by a 
 19.15  road, street, vacant lot, waterway, or other similar intervening 
 19.16  type of property. 
 19.17     (b) Employment property defined in section 469.166, during 
 19.18  the period provided in section 469.170, shall constitute class 
 19.19  3b and has ~~a~~ the class ~~rate of 2.3 percent of the first $50,000~~ 
 19.20  ~~of market value and 3.5 percent of the remainder, except that~~ 
 19.21  ~~for employment property located in a border city enterprise zone~~ 
 19.22  ~~designated pursuant to section 469.168, subdivision 4, paragraph~~ 
 19.23  ~~(c), the class rate of the first tier of market value and the~~ 
 19.24  ~~class rate of the remainder is~~ rates determined under paragraph 
 19.25  (a)~~, unless the governing body of the city designated as an~~ 
 19.26  ~~enterprise zone determines that a specific parcel shall be~~ 
 19.27  ~~assessed pursuant to the first clause of this sentence.  The~~ 
 19.28  ~~governing body may provide for assessment under the first clause~~ 
 19.29  ~~of the preceding sentence only for property which is located in~~ 
 19.30  ~~an area which has been designated by the governing body for the~~ 
 19.31  ~~receipt of tax reductions authorized by section 469.171,~~ 
 19.32  ~~subdivision 1~~. 
 19.33     (c) Structures which are (i) located on property classified 
 19.34  as class 3a, (ii) constructed under an initial building permit 
 19.35  issued after January 2, 1996, (iii) located in a transit zone as 
 19.36  defined under section 473.3915, subdivision 3, (iv) located 
 20.1   within the boundaries of a school district, and (v) not 
 20.2   primarily used for retail or transient lodging purposes, shall 
 20.3   have a class rate equal to 85 percent of the class rate of the 
 20.4   second tier of the commercial property rate under paragraph (a) 
 20.5   on any portion of the market value that does not qualify for the 
 20.6   first tier class rate under paragraph (a).  As used in item (v), 
 20.7   a structure is primarily used for retail or transient lodging 
 20.8   purposes if over 50 percent of its square footage is used for 
 20.9   those purposes.  A class rate equal to 85 percent of the class 
 20.10  rate of the second tier of the commercial property class rate 
 20.11  under paragraph (a) shall also apply to improvements to existing 
 20.12  structures that meet the requirements of items (i) to (v) if the 
 20.13  improvements are constructed under an initial building permit 
 20.14  issued after January 2, 1996, even if the remainder of the 
 20.15  structure was constructed prior to January 2, 1996.  For the 
 20.16  purposes of this paragraph, a structure shall be considered to 
 20.17  be located in a transit zone if any portion of the structure 
 20.18  lies within the zone.  If any property once eligible for 
 20.19  treatment under this paragraph ceases to remain eligible due to 
 20.20  revisions in transit zone boundaries, the property shall 
 20.21  continue to receive treatment under this paragraph for a period 
 20.22  of three years. 
 20.23     Sec. 10.  Minnesota Statutes 1998, section 273.13, 
 20.24  subdivision 25, is amended to read: 
 20.25     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 20.26  estate containing four or more units and used or held for use by 
 20.27  the owner or by the tenants or lessees of the owner as a 
 20.28  residence for rental periods of 30 days or more.  Class 4a also 
 20.29  includes hospitals licensed under sections 144.50 to 144.56, 
 20.30  other than hospitals exempt under section 272.02, and contiguous 
 20.31  property used for hospital purposes, without regard to whether 
 20.32  the property has been platted or subdivided.  Class 4a property 
 20.33  ~~in a city with a population of 5,000 or less, that is (1)~~ 
 20.34  ~~located outside of the metropolitan area, as defined in section~~ 
 20.35  ~~473.121, subdivision 2, or outside any county contiguous to the~~ 
 20.36  ~~metropolitan area, and (2) whose city boundary is at least 15~~ 
 21.1   ~~miles from the boundary of any city with a population greater~~ 
 21.2   ~~than 5,000 has a class rate of 2.15 percent of market value.~~  
 21.3   ~~All other class 4a property~~ has a class rate of ~~2.5~~ two percent 
 21.4   of market value.  ~~For purposes of this paragraph, population has~~ 
 21.5   ~~the same meaning given in section 477A.011, subdivision 3.~~ 
 21.6      (b) Class 4b includes: 
 21.7      (1) residential real estate containing less than four units 
 21.8   that does not qualify as class 4bb, other than seasonal 
 21.9   residential, and recreational; 
 21.10     (2) manufactured homes not classified under any other 
 21.11  provision; 
 21.12     (3) a dwelling, garage, and surrounding one acre of 
 21.13  property on a nonhomestead farm classified under subdivision 23, 
 21.14  paragraph (b) containing two or three units; 
 21.15     (4) unimproved property that is classified residential as 
 21.16  determined under subdivision 33.  
 21.17     Class 4b property has a class rate of ~~1.7~~ 1.5 percent of 
 21.18  market value.  
 21.19     (c) Class 4bb includes: 
 21.20     (1) nonhomestead residential real estate containing one 
 21.21  unit, other than seasonal residential, and recreational; and 
 21.22     (2) a single family dwelling, garage, and surrounding one 
 21.23  acre of property on a nonhomestead farm classified under 
 21.24  subdivision 23, paragraph (b). 
 21.25     Class 4bb has a class rate of ~~1.25~~ one percent on the first 
 21.26  $75,000 of market value and a class rate of ~~1.7~~ 1.5 percent of 
 21.27  its market value that exceeds $75,000. 
 21.28     Property that has been classified as seasonal recreational 
 21.29  residential property at any time during which it has been owned 
 21.30  by the current owner or spouse of the current owner does not 
 21.31  qualify for class 4bb. 
 21.32     (d) Class 4c property includes: 
 21.33     (1) except as provided in subdivision 22, paragraph (c), 
 21.34  real property devoted to temporary and seasonal residential 
 21.35  occupancy for recreation purposes, including real property 
 21.36  devoted to temporary and seasonal residential occupancy for 
 22.1   recreation purposes and not devoted to commercial purposes for 
 22.2   more than 250 days in the year preceding the year of 
 22.3   assessment.  For purposes of this clause, property is devoted to 
 22.4   a commercial purpose on a specific day if any portion of the 
 22.5   property is used for residential occupancy, and a fee is charged 
 22.6   for residential occupancy.  In order for a property to be 
 22.7   classified as class 4c, seasonal recreational residential for 
 22.8   commercial purposes, at least 40 percent of the annual gross 
 22.9   lodging receipts related to the property must be from business 
 22.10  conducted during 90 consecutive days and either (i) at least 60 
 22.11  percent of all paid bookings by lodging guests during the year 
 22.12  must be for periods of at least two consecutive nights; or (ii) 
 22.13  at least 20 percent of the annual gross receipts must be from 
 22.14  charges for rental of fish houses, boats and motors, 
 22.15  snowmobiles, downhill or cross-country ski equipment, or charges 
 22.16  for marina services, launch services, and guide services, or the 
 22.17  sale of bait and fishing tackle.  For purposes of this 
 22.18  determination, a paid booking of five or more nights shall be 
 22.19  counted as two bookings.  Class 4c also includes commercial use 
 22.20  real property used exclusively for recreational purposes in 
 22.21  conjunction with class 4c property devoted to temporary and 
 22.22  seasonal residential occupancy for recreational purposes, up to 
 22.23  a total of two acres, provided the property is not devoted to 
 22.24  commercial recreational use for more than 250 days in the year 
 22.25  preceding the year of assessment and is located within two miles 
 22.26  of the class 4c property with which it is used.  Class 4c 
 22.27  property classified in this clause also includes the remainder 
 22.28  of class 1c resorts provided that the entire property including 
 22.29  that portion of the property classified as class 1c also meets 
 22.30  the requirements for class 4c under this clause; otherwise the 
 22.31  entire property is classified as class 3.  Owners of real 
 22.32  property devoted to temporary and seasonal residential occupancy 
 22.33  for recreation purposes and all or a portion of which was 
 22.34  devoted to commercial purposes for not more than 250 days in the 
 22.35  year preceding the year of assessment desiring classification as 
 22.36  class 1c or 4c, must submit a declaration to the assessor 
 23.1   designating the cabins or units occupied for 250 days or less in 
 23.2   the year preceding the year of assessment by January 15 of the 
 23.3   assessment year.  Those cabins or units and a proportionate 
 23.4   share of the land on which they are located will be designated 
 23.5   class 1c or 4c as otherwise provided.  The remainder of the 
 23.6   cabins or units and a proportionate share of the land on which 
 23.7   they are located will be designated as class 3a.  The owner of 
 23.8   property desiring designation as class 1c or 4c property must 
 23.9   provide guest registers or other records demonstrating that the 
 23.10  units for which class 1c or 4c designation is sought were not 
 23.11  occupied for more than 250 days in the year preceding the 
 23.12  assessment if so requested.  The portion of a property operated 
 23.13  as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
 23.14  nonresidential facility operated on a commercial basis not 
 23.15  directly related to temporary and seasonal residential occupancy 
 23.16  for recreation purposes shall not qualify for class 1c or 4c; 
 23.17     (2) qualified property used as a golf course if: 
 23.18     (i) it is open to the public on a daily fee basis.  It may 
 23.19  charge membership fees or dues, but a membership fee may not be 
 23.20  required in order to use the property for golfing, and its green 
 23.21  fees for golfing must be comparable to green fees typically 
 23.22  charged by municipal courses; and 
 23.23     (ii) it meets the requirements of section 273.112, 
 23.24  subdivision 3, paragraph (d). 
 23.25     A structure used as a clubhouse, restaurant, or place of 
 23.26  refreshment in conjunction with the golf course is classified as 
 23.27  class 3a property. 
 23.28     (3) real property up to a maximum of one acre of land owned 
 23.29  by a nonprofit community service oriented organization; provided 
 23.30  that the property is not used for a revenue-producing activity 
 23.31  for more than six days in the calendar year preceding the year 
 23.32  of assessment and the property is not used for residential 
 23.33  purposes on either a temporary or permanent basis.  For purposes 
 23.34  of this clause, a "nonprofit community service oriented 
 23.35  organization" means any corporation, society, association, 
 23.36  foundation, or institution organized and operated exclusively 
 24.1   for charitable, religious, fraternal, civic, or educational 
 24.2   purposes, and which is exempt from federal income taxation 
 24.3   pursuant to section 501(c)(3), (10), or (19) of the Internal 
 24.4   Revenue Code of 1986, as amended through December 31, 1990.  For 
 24.5   purposes of this clause, "revenue-producing activities" shall 
 24.6   include but not be limited to property or that portion of the 
 24.7   property that is used as an on-sale intoxicating liquor or 3.2 
 24.8   percent malt liquor establishment licensed under chapter 340A, a 
 24.9   restaurant open to the public, bowling alley, a retail store, 
 24.10  gambling conducted by organizations licensed under chapter 349, 
 24.11  an insurance business, or office or other space leased or rented 
 24.12  to a lessee who conducts a for-profit enterprise on the 
 24.13  premises.  Any portion of the property which is used for 
 24.14  revenue-producing activities for more than six days in the 
 24.15  calendar year preceding the year of assessment shall be assessed 
 24.16  as class 3a.  The use of the property for social events open 
 24.17  exclusively to members and their guests for periods of less than 
 24.18  24 hours, when an admission is not charged nor any revenues are 
 24.19  received by the organization shall not be considered a 
 24.20  revenue-producing activity; 
 24.21     (4) post-secondary student housing of not more than one 
 24.22  acre of land that is owned by a nonprofit corporation organized 
 24.23  under chapter 317A and is used exclusively by a student 
 24.24  cooperative, sorority, or fraternity for on-campus housing or 
 24.25  housing located within two miles of the border of a college 
 24.26  campus; 
 24.27     (5) manufactured home parks as defined in section 327.14, 
 24.28  subdivision 3; and 
 24.29     (6) real property that is actively and exclusively devoted 
 24.30  to indoor fitness, health, social, recreational, and related 
 24.31  uses, is owned and operated by a not-for-profit corporation, and 
 24.32  is located within the metropolitan area as defined in section 
 24.33  473.121, subdivision 2. 
 24.34     Class 4c property has a class rate of ~~1.8~~ 1.5 percent of 
 24.35  market value, except that (i) for each parcel of seasonal 
 24.36  residential recreational property not used for commercial 
 25.1   purposes the first $75,000 of market value has a class rate 
 25.2   of ~~1.25~~ one percent, and the market value that exceeds $75,000 
 25.3   has a class rate of ~~2.2~~ 1.8 percent, (ii) manufactured home 
 25.4   parks assessed under clause (5) have a class rate of ~~two~~ 1.5 
 25.5   percent, and (iii) property described in paragraph (d), clause 
 25.6   (4), has the same class rate as the rate applicable to the first 
 25.7   tier of class 4bb nonhomestead residential real estate under 
 25.8   paragraph (c).  
 25.9      (e) Class 4d property is qualifying low-income rental 
 25.10  housing certified to the assessor by the housing finance agency 
 25.11  under sections 273.126 and 462A.071.  Class 4d includes land in 
 25.12  proportion to the total market value of the building that is 
 25.13  qualifying low-income rental housing.  For all properties 
 25.14  qualifying as class 4d, the market value determined by the 
 25.15  assessor must be based on the normal approach to value using 
 25.16  normal unrestricted rents. 
 25.17     Class 4d property has a class rate of one percent of market 
 25.18  value.  
 25.19     ~~(f) Class 4e property consists of the residential portion~~ 
 25.20  ~~of any structure located within a city that was converted from~~ 
 25.21  ~~nonresidential use to residential use, provided that:~~ 
 25.22     ~~(1) the structure had formerly been used as a warehouse;~~ 
 25.23     ~~(2) the structure was originally constructed prior to 1940;~~ 
 25.24     ~~(3) the conversion was done after December 31, 1995, but~~ 
 25.25  ~~before January 1, 2003; and~~ 
 25.26     ~~(4) the conversion involved an investment of at least~~ 
 25.27  ~~$25,000 per residential unit.~~ 
 25.28     ~~Class 4e property has a class rate of 2.3 percent, provided~~ 
 25.29  ~~that a structure is eligible for class 4e classification only in~~ 
 25.30  ~~the 12 assessment years immediately following the conversion.~~ 
 25.31     Sec. 11.  Minnesota Statutes 1998, section 273.13, 
 25.32  subdivision 31, is amended to read: 
 25.33     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 25.34     (1) tools, implements, and machinery of an electric 
 25.35  generating, transmission, or distribution system or a pipeline 
 25.36  system transporting or distributing water, gas, crude oil, or 
 26.1   petroleum products or mains and pipes used in the distribution 
 26.2   of steam or hot or chilled water for heating or cooling 
 26.3   buildings, which are fixtures; 
 26.4      (2) unmined iron ore and low-grade iron-bearing formations 
 26.5   as defined in section 273.14; and 
 26.6      (3) all other property not otherwise classified. 
 26.7      Class 5 property has a class rate of ~~3.5~~ three percent of 
 26.8   market value. 
 26.9      Sec. 12.  Minnesota Statutes 1998, section 273.1382, 
 26.10  subdivision 1, is amended to read: 
 26.11     Subdivision 1.  [EDUCATION HOMESTEAD CREDIT.] Each year, 
 26.12  the respective county auditors shall determine the initial tax 
 26.13  rate for each school district for the general education levy 
 26.14  certified under section 126C.13, subdivision 2 or 3.  That rate 
 26.15  plus the school district's education homestead credit tax rate 
 26.16  adjustment under section 275.08, subdivision 1e, shall be the 
 26.17  general education homestead credit local tax rate for the 
 26.18  district.  The auditor shall then determine a general education 
 26.19  homestead credit for each homestead within the county equal to 
 26.20  68 percent for taxes payable in 1999 and ~~69~~ 100 percent for 
 26.21  taxes payable in 2000 and thereafter of the general education 
 26.22  homestead credit local tax rate times the net tax capacity of 
 26.23  the homestead for the taxes payable year.  The amount of general 
 26.24  education homestead credit for a homestead may not exceed $320 
 26.25  for taxes payable in 1999 and ~~$335~~ $430 for taxes payable in 
 26.26  2000 and thereafter.  In the case of an agricultural homestead, 
 26.27  only the net tax capacity of the house, garage, and surrounding 
 26.28  one acre of land shall be used in determining the property's 
 26.29  education homestead credit. 
 26.30     Sec. 13.  [273.1384] [CREDIT FOR DEBT SERVICE AND 
 26.31  REFERENDUM LEVIES ON AGRICULTURAL PROPERTY.] 
 26.32     Subdivision 1.  [TAX REDUCTIONS.] The county auditor shall 
 26.33  reduce the tax for school purposes on qualified property by the 
 26.34  amount of the debt service tax levy determined under section 
 26.35  123B.55 and the school referendum tax levy determined under 
 26.36  section 126C.17 on the property.  As used in this section, 
 27.1   "qualified property" means homestead agricultural property 
 27.2   classified as class 2a under section 273.13, subdivision 23, 
 27.3   excluding the house, garage, and surrounding one acre of land, 
 27.4   and nonhomestead agricultural property classified as class 2b 
 27.5   under section 273.13, subdivision 23.  The amounts of the 
 27.6   reductions computed by the county auditor under this subdivision 
 27.7   must be submitted to the commissioner of revenue as part of the 
 27.8   abstracts of tax lists required to be filed with the 
 27.9   commissioner under section 275.29.  Any prior year adjustment 
 27.10  shall also be certified in the abstracts of tax lists.  The 
 27.11  commissioner of revenue shall review the certifications to 
 27.12  determine their accuracy and may make changes in the 
 27.13  certification as deemed necessary or return a certification to 
 27.14  the county auditor for corrections.  For purposes of computing 
 27.15  the credit pursuant to this subdivision, the "tax levy" shall be 
 27.16  the tax levy reduced by the credits provided by sections 
 27.17  273.123; 273.42, subdivision 2; and 473H.10. 
 27.18     Subd. 2.  [STATE AID.] The commissioner of children, 
 27.19  families, and learning shall make payments to each school 
 27.20  district of agricultural debt and referendum credit aid for each 
 27.21  school year, equal to the amount by which property taxes 
 27.22  certified in the district for collection in the calendar year 
 27.23  ending in that school year are reduced pursuant to subdivision 1.
 27.24     Subd. 3.  [APPROPRIATION.] There is annually appropriated 
 27.25  from the general fund in the state treasury to the commissioner 
 27.26  of children, families, and learning the amount necessary to make 
 27.27  these payments. 
 27.28     Sec. 14.  [275.071] [MARKET VALUE TAX.] 
 27.29     That portion of any county's, city's, town's, or special 
 27.30  taxing district's levy which exceeds the jurisdiction's levy for 
 27.31  taxes payable in 1999 shall be levied against the referendum 
 27.32  market value of the jurisdiction, as defined in section 126C.01, 
 27.33  subdivision 3.  When the jurisdiction reports its levy to the 
 27.34  county auditor under section 275.07, it must separately identify 
 27.35  the portion to be levied against net tax capacity and the 
 27.36  portion to be levied against market value. 
 28.1      Sec. 15.  [EDUCATION LEVY REDUCTION.] 
 28.2      In addition to any amount appropriated by other law, 
 28.3   $90,000,000 in fiscal year 2001 and $100,000,000 in fiscal year 
 28.4   2002 and subsequent years are appropriated from the general fund 
 28.5   to the commissioner of children, families, and learning to fund 
 28.6   a reduction in the statewide general education property tax levy.
 28.7      Sec. 16.  [REPEALER.] 
 28.8      Minnesota Statutes 1998, sections 273.127; and 273.1382, 
 28.9   subdivision 1a, are repealed. 
 28.10     Sec. 17.  [EFFECTIVE DATE.] 
 28.11     Sections 7 to 13 and 16 are effective for property taxes 
 28.12  payable in 2000 and subsequent years. 
 28.13                             ARTICLE 3
 28.14                       SALES AND EXCISE TAXES
 28.15     Section 1.  Minnesota Statutes 1998, section 289A.11, 
 28.16  subdivision 1, is amended to read: 
 28.17     Subdivision 1.  [RETURN REQUIRED.] ~~Except as provided in~~ 
 28.18  ~~section 289A.18, subdivision 4,~~ For the month in which taxes 
 28.19  imposed by chapter 297A are payable, or for which a return is 
 28.20  due, a return for the preceding reporting period must be filed 
 28.21  with the commissioner in the form and manner the commissioner 
 28.22  prescribes.  A person making sales at retail at two or more 
 28.23  places of business may file a consolidated return subject to 
 28.24  rules prescribed by the commissioner.  In computing the dollar 
 28.25  amount of items on the return, the amounts are rounded off to 
 28.26  the nearest whole dollar, disregarding amounts less than 50 
 28.27  cents and increasing amounts of 50 cents to 99 cents to the next 
 28.28  highest dollar. 
 28.29     Notwithstanding this subdivision, a person who is not 
 28.30  required to hold a sales tax permit under chapter 297A and who 
 28.31  makes annual purchases of less than $18,500 that are subject to 
 28.32  the use tax imposed by section 297A.14, may file an annual use 
 28.33  tax return on a form prescribed by the commissioner.  If a 
 28.34  person who qualifies for an annual use tax reporting period is 
 28.35  required to obtain a sales tax permit or makes use tax purchases 
 28.36  in excess of $18,500 during the calendar year, the reporting 
 29.1   period must be considered ended at the end of the month in which 
 29.2   the permit is applied for or the purchase in excess of $18,500 
 29.3   is made and a return must be filed for the preceding reporting 
 29.4   period. 
 29.5      Sec. 2.  Minnesota Statutes 1998, section 289A.18, 
 29.6   subdivision 4, is amended to read: 
 29.7      Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
 29.8   tax returns must be filed on or before the 20th day of the month 
 29.9   following the close of the preceding reporting period, except 
 29.10  that annual use tax returns provided for under section 289A.11, 
 29.11  subdivision 1, must be filed by April 15 following the close of 
 29.12  the calendar year, in the case of individuals.  Annual use tax 
 29.13  returns of businesses, including sole proprietorships, and 
 29.14  annual sales tax returns must be filed by February 5 following 
 29.15  the close of the calendar year.  
 29.16     (b) ~~Except for the return for the June reporting period,~~ 
 29.17  ~~which is due on the following August 25,~~ Returns filed by 
 29.18  retailers required to remit liabilities by means of funds 
 29.19  transfer under section 289A.20, subdivision 4, paragraph (d), 
 29.20  are due on or before the 25th day of the month following the 
 29.21  close of the preceding reporting period.  
 29.22     (c) If a retailer has an average sales and use tax 
 29.23  liability, including local sales and use taxes administered by 
 29.24  the commissioner, equal to or less than $500 per month in any 
 29.25  quarter of a calendar year, and has substantially complied with 
 29.26  the tax laws during the preceding four calendar quarters, the 
 29.27  retailer may request authorization to file and pay the taxes 
 29.28  quarterly in subsequent calendar quarters.  The authorization 
 29.29  remains in effect during the period in which the retailer's 
 29.30  quarterly returns reflect sales and use tax liabilities of less 
 29.31  than $1,500 and there is continued compliance with state tax 
 29.32  laws. 
 29.33     (d) If a retailer has an average sales and use tax 
 29.34  liability, including local sales and use taxes administered by 
 29.35  the commissioner, equal to or less than $100 per month during a 
 29.36  calendar year, and has substantially complied with the tax laws 
 30.1   during that period, the retailer may request authorization to 
 30.2   file and pay the taxes annually in subsequent years.  The 
 30.3   authorization remains in effect during the period in which the 
 30.4   retailer's annual returns reflect sales and use tax liabilities 
 30.5   of less than $1,200 and there is continued compliance with state 
 30.6   tax laws. 
 30.7      (e) The commissioner may also grant quarterly or annual 
 30.8   filing and payment authorizations to retailers if the 
 30.9   commissioner concludes that the retailers' future tax 
 30.10  liabilities will be less than the monthly totals identified in 
 30.11  paragraphs (c) and (d).  An authorization granted under this 
 30.12  paragraph is subject to the same conditions as an authorization 
 30.13  granted under paragraphs (c) and (d). 
 30.14     Sec. 3.  Minnesota Statutes 1998, section 289A.20, 
 30.15  subdivision 4, is amended to read: 
 30.16     Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
 30.17  chapter 297A are due and payable to the commissioner monthly on 
 30.18  or before the 20th day of the month following the month in which 
 30.19  the taxable event occurred or following another reporting period 
 30.20  as the commissioner prescribes, except that use taxes due on an 
 30.21  annual use tax return as provided under section 289A.11, 
 30.22  subdivision 1, are payable by April 15 following the close of 
 30.23  the calendar year. 
 30.24     (b) ~~A vendor having a liability of $120,000 or more during~~ 
 30.25  ~~a fiscal year ending June 30 must remit the June liability for~~ 
 30.26  ~~the next year in the following manner:~~ 
 30.27     ~~(1) Two business days before June 30 of the year, the~~ 
 30.28  ~~vendor must remit 75 percent of the estimated June liability to~~ 
 30.29  ~~the commissioner.~~  
 30.30     ~~(2) On or before August 14 of the year, the vendor must pay~~ 
 30.31  ~~any additional amount of tax not remitted in June.~~ 
 30.32     ~~(c)~~ A vendor having a liability of $120,000 or more during 
 30.33  a fiscal year ending June 30 must remit all liabilities in the 
 30.34  subsequent calendar year by means of a funds transfer as defined 
 30.35  in section 336.4A-104, paragraph (a).  The funds transfer 
 30.36  payment date, as defined in section 336.4A-401, must be on or 
 31.1   before the 14th day of the month following the month in which 
 31.2   the taxable event occurred~~, except for 75 percent of the~~ 
 31.3   ~~estimated June liability, which is due two business days before~~ 
 31.4   ~~June 30.  The remaining amount of the June liability is due on~~ 
 31.5   ~~August 14~~.  If the date the tax is due is not a funds transfer 
 31.6   business day, as defined in section 336.4A-105, paragraph (a), 
 31.7   clause (4), the payment date must be on or before the funds 
 31.8   transfer business day next following the date the tax is due. 
 31.9      ~~(d)~~ (c) If the vendor required to remit by electronic funds 
 31.10  transfer as provided in paragraph ~~(c)~~ (b) is unable due to 
 31.11  reasonable cause to determine the actual sales and use tax due 
 31.12  on or before the due date for payment, the vendor may remit an 
 31.13  estimate of the tax owed using one of the following options: 
 31.14     (1) 100 percent of the tax reported on the previous month's 
 31.15  sales and use tax return; 
 31.16     (2) 100 percent of the tax reported on the sales and use 
 31.17  tax return for the same month in the previous calendar year; or 
 31.18     (3) 95 percent of the actual tax due. 
 31.19     Any additional amount of tax that is not remitted on or 
 31.20  before the due date for payment, must be remitted with the 
 31.21  return.  If a vendor fails to remit the actual liability or does 
 31.22  not remit using one of the estimate options by the due date for 
 31.23  payment, the vendor must remit actual liability as provided in 
 31.24  paragraph ~~(c)~~ (b) in all subsequent periods.  ~~This paragraph~~ 
 31.25  ~~does not apply to the June sales and use tax liability.~~ 
 31.26     Sec. 4.  Minnesota Statutes 1998, section 289A.56, 
 31.27  subdivision 4, is amended to read: 
 31.28     Subd. 4.  [~~CAPITAL EQUIPMENT REFUNDS;~~ REFUNDS TO 
 31.29  PURCHASERS.] ~~Notwithstanding subdivision 3, for refunds payable~~ 
 31.30  ~~under section 297A.15, subdivision 5, interest is computed from~~ 
 31.31  ~~the date the refund claim is filed with the commissioner.~~  For 
 31.32  refunds payable under section 289A.50, subdivision 2a, interest 
 31.33  is computed from the 20th day of the month following the month 
 31.34  of the invoice date for the purchase which is the subject of the 
 31.35  refund. 
 31.36     Sec. 5.  Minnesota Statutes 1998, section 297A.25, is 
 32.1   amended by adding a subdivision to read: 
 32.2      Subd. 79.  [TELEVISION COMMERCIALS.] The gross receipts 
 32.3   from the sale of and storage, use, or consumption of tangible 
 32.4   personal property which is primarily used or consumed in the 
 32.5   preproduction, production, or postproduction of any television 
 32.6   commercial and any such commercial, regardless of the medium in 
 32.7   which it is transferred, are exempt.  "Preproduction" and 
 32.8   "production" include but are not limited to all activities 
 32.9   related to the preparation for shooting and the shooting of 
 32.10  television commercials, including film processing.  Equipment 
 32.11  rented for the preproduction and production activities is 
 32.12  exempt.  "Postproduction" includes but is not limited to all 
 32.13  activities related to the finishing and duplication of 
 32.14  television commercials.  This exemption does not apply to 
 32.15  tangible personal property used primarily in administration, 
 32.16  general management, or marketing.  Machinery and equipment 
 32.17  purchased for use in producing such commercials and fuel, 
 32.18  electricity, gas, or steam used for space heating or lighting 
 32.19  are not exempt under this subdivision. 
 32.20     Sec. 6.  Minnesota Statutes 1998, section 297F.09, 
 32.21  subdivision 1, is amended to read: 
 32.22     Subdivision 1.  [MONTHLY RETURN; CIGARETTE DISTRIBUTOR.] On 
 32.23  or before the 18th day of each calendar month, a distributor 
 32.24  with a place of business in this state shall file a return with 
 32.25  the commissioner showing the quantity of cigarettes manufactured 
 32.26  or brought in from outside the state or purchased during the 
 32.27  preceding calendar month and the quantity of cigarettes sold or 
 32.28  otherwise disposed of in this state and outside this state 
 32.29  during that month.  A licensed distributor outside this state 
 32.30  shall in like manner file a return showing the quantity of 
 32.31  cigarettes shipped or transported into this state during the 
 32.32  preceding calendar month.  Returns must be made in the form and 
 32.33  manner prescribed by the commissioner and must contain any other 
 32.34  information required by the commissioner.  The return must be 
 32.35  accompanied by a remittance for the full unpaid tax liability 
 32.36  shown by it.  ~~The return for the May liability and 75 percent of~~ 
 33.1   ~~the estimated June liability is due on the date payment of the~~ 
 33.2   ~~tax is due.~~ 
 33.3      Sec. 7.  Minnesota Statutes 1998, section 297F.09, 
 33.4   subdivision 2, is amended to read: 
 33.5      Subd. 2.  [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.] 
 33.6   On or before the 18th day of each calendar month, a distributor 
 33.7   with a place of business in this state shall file a return with 
 33.8   the commissioner showing the quantity and wholesale sales price 
 33.9   of each tobacco product: 
 33.10     (1) brought, or caused to be brought, into this state for 
 33.11  sale; and 
 33.12     (2) made, manufactured, or fabricated in this state for 
 33.13  sale in this state, during the preceding calendar month.  
 33.14  Every licensed distributor outside this state shall in like 
 33.15  manner file a return showing the quantity and wholesale sales 
 33.16  price of each tobacco product shipped or transported to 
 33.17  retailers in this state to be sold by those retailers, during 
 33.18  the preceding calendar month.  Returns must be made in the form 
 33.19  and manner prescribed by the commissioner and must contain any 
 33.20  other information required by the commissioner.  The return must 
 33.21  be accompanied by a remittance for the full tax liability shown, 
 33.22  less 1.5 percent of the liability as compensation to reimburse 
 33.23  the distributor for expenses incurred in the administration of 
 33.24  this chapter.  ~~The return for the May liability and 75 percent~~ 
 33.25  ~~of the estimated June liability is due on the date payment of~~ 
 33.26  ~~the tax is due.~~ 
 33.27     Sec. 8.  [REPEALER.] 
 33.28     (a) Minnesota Statutes 1998, section 297A.15, subdivision 
 33.29  5, is repealed. 
 33.30     (b) Minnesota Statutes 1998, sections 289A.60, subdivision 
 33.31  15; 297F.09, subdivision 6; and 297G.09, subdivision 5, are 
 33.32  repealed. 
 33.33     Sec. 9.  [EFFECTIVE DATE.] 
 33.34     Sections 1, 2, 3, 6, 7, 8, and 9, paragraph (b), are 
 33.35  effective for returns due after January 1, 2000. 
 33.36     Sections 4, 5, and 9, paragraph (a), are effective for 
 34.1   sales and purchases occurring on or after July 1, 1999. 
 34.2                              ARTICLE 4
 34.3                PASSENGER AUTOMOBILE REGISTRATION TAX
 34.4      Section 1.  Minnesota Statutes 1998, section 168.013, 
 34.5   subdivision 1a, is amended to read: 
 34.6      Subd. 1a.  [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger 
 34.7   automobiles as defined in section 168.011, subdivision 7, and 
 34.8   hearses, except as otherwise provided, the tax shall be $10 plus 
 34.9   an additional tax equal to 1.25 percent of the base value.  
 34.10     (b) Subject to the classification provisions herein, "base 
 34.11  value" means the manufacturer's suggested retail price of the 
 34.12  vehicle including destination charge using list price 
 34.13  information published by the manufacturer or determined by the 
 34.14  registrar if no suggested retail price exists, and shall not 
 34.15  include the cost of each accessory or item of optional equipment 
 34.16  separately added to the vehicle and the suggested retail price. 
 34.17     (c) If the manufacturer's list price information contains a 
 34.18  single vehicle identification number followed by various 
 34.19  descriptions and suggested retail prices, the registrar shall 
 34.20  select from those listings only the lowest price for determining 
 34.21  base value. 
 34.22     (d) If unable to determine the base value because the 
 34.23  vehicle is specially constructed, or for any other reason, the 
 34.24  registrar may establish such value upon the cost price to the 
 34.25  purchaser or owner as evidenced by a certificate of cost but not 
 34.26  including Minnesota sales or use tax or any local sales or other 
 34.27  local tax. 
 34.28     (e) The registrar shall classify every vehicle in its 
 34.29  proper base value class as follows: 
 34.30                        FROM                   TO
 34.31                        $  0                $199.99
 34.32                         200                 399.99
 34.33  and thereafter a series of classes successively set in brackets 
 34.34  having a spread of $200 consisting of such number of classes as 
 34.35  will permit classification of all vehicles. 
 34.36     (f) The base value for purposes of this section shall be 
 35.1   the middle point between the extremes of its class. 
 35.2      (g) The registrar shall establish the base value, when new, 
 35.3   of every passenger automobile and hearse registered prior to the 
 35.4   effective date of Extra Session Laws 1971, chapter 31, using 
 35.5   list price information published by the manufacturer or any 
 35.6   nationally recognized firm or association compiling such data 
 35.7   for the automotive industry.  If unable to ascertain the base 
 35.8   value of any registered vehicle in the foregoing manner, the 
 35.9   registrar may use any other available source or method.  The tax 
 35.10  on all previously registered vehicles shall be computed upon the 
 35.11  base value thus determined taking into account the depreciation 
 35.12  provisions of paragraph (h). 
 35.13     (h) Except as provided in paragraph (i), the annual 
 35.14  additional tax computed upon the base value as provided herein, 
 35.15  during the first and second years of vehicle life shall be 
 35.16  computed upon 100 percent of the base value; for the third and 
 35.17  fourth years, 90 percent of such value; for the fifth and sixth 
 35.18  years, 75 percent of such value; for the seventh year, 60 
 35.19  percent of such value; for the eighth year, 40 percent of such 
 35.20  value; for the ninth year, 30 percent of such value; for the 
 35.21  tenth year, ten percent of such value; for the 11th and each 
 35.22  succeeding year, the sum of $25.  
 35.23     In no event shall the annual additional tax be less than 
 35.24  $25.  
 35.25     For registration of passenger automobiles, other than the 
 35.26  initial registration of a new passenger automobile, the annual 
 35.27  additional tax shall not exceed $100. 
 35.28     (i) The annual additional tax under paragraph (h) on a 
 35.29  motor vehicle on which the first annual tax was paid before 
 35.30  January 1, 1990, must not exceed the tax that was paid on that 
 35.31  vehicle the year before. 
 35.32     Sec. 2.  [FUNDS TRANSFER.] 
 35.33     The commissioner shall include a minimum transfer of 
 35.34  $75,000,000 for fiscal year 2000 from the general fund to the 
 35.35  highway user tax distribution fund.  In fiscal year 2001 and 
 35.36  each fiscal year thereafter, the commissioner of revenue shall 
 36.1   include a minimum transfer of $150,000,000 from the general fund 
 36.2   to the highway user tax distribution fund. 
 36.3      Sec. 3.  [EFFECTIVE DATE.] 
 36.4      Section 1 is effective for motor vehicle taxes due on 
 36.5   registrations required to be made on or after January 1, 2000. 
 36.6                              ARTICLE 5
 36.7                       CORPORATE FRANCHISE TAX
 36.8      Section 1.  Minnesota Statutes 1998, section 290.17, 
 36.9   subdivision 6, is amended to read: 
 36.10     Subd. 6.  [NONBUSINESS INCOME.] (a) For a trade or business 
 36.11  for which allocation of income within and without this state is 
 36.12  required, if the taxpayer has any income not connected with the 
 36.13  trade or business carried on partly within and partly without 
 36.14  this state that income must be allocated under subdivision 2.  
 36.15  Intangible property is employed in a trade or business if the 
 36.16  owner of the property holds it as a means of furthering the 
 36.17  trade or business. 
 36.18     (b) A taxpayer may elect that all income, whether or not 
 36.19  connected with the trade or business carried on partly within 
 36.20  and partly without this state, is business income apportionable 
 36.21  under subdivision 3 and is not subject to paragraph (a) and 
 36.22  subdivision 2.  The election is effective and irrevocable for 
 36.23  the taxable year of the election and the following nine taxable 
 36.24  years.  The election is binding on all members of a unitary 
 36.25  business. 
 36.26     Sec. 2.  [APPORTIONMENT; PRE-1999 RETURNS.] 
 36.27     If a taxpayer that conducts a trade or business partly 
 36.28  within and partly without this state treats any item of income, 
 36.29  gain or loss, as apportionable under Minnesota Statutes, section 
 36.30  290.17, subdivision 3, on a return filed for a taxable year 
 36.31  beginning before January 1, 1999, the commissioner may not 
 36.32  challenge that treatment. 
 36.33     Sec. 3.  [EFFECTIVE DATE.] 
 36.34     Section 1 is effective for taxable years beginning after 
 36.35  December 31, 1998.  Section 2 is effective on the day following 
 36.36  final enactment and applies to any administrative or judicial 
 37.1   challenge pending on or arising after the effective date. 
 37.2                              ARTICLE 6
 37.3                  AUTOMATIC REBATE IN ENACTED BUDGET 
 37.4      Section 1.  [16A.1522] [STATEMENT OF PURPOSE.] 
 37.5      (a) The state of Minnesota derives revenues from a variety 
 37.6   of taxes, fees, and other sources. 
 37.7      (b) The general fund state budget is enacted for a two-year 
 37.8   period based on a forecast of state revenues and authorized 
 37.9   spending.  The two-year biennial budget period begins July 1 of 
 37.10  odd-numbered years and ends June 30 of odd-numbered years. 
 37.11     (c) Section 2 is intended to require that any positive 
 37.12  unrestricted budgetary general fund balance in excess of 
 37.13  one-half of one percent of total general fund biennial revenues 
 37.14  at the close of the biennium be returned to the taxpayers of 
 37.15  Minnesota in the form of a rebate, payable at the end of the 
 37.16  budget period. 
 37.17     Sec. 2.  [16A.1523] [REBATE REQUIREMENTS.] 
 37.18     (a) If, on the basis of a forecast of general fund revenues 
 37.19  and expenditures in November of an even-numbered year or 
 37.20  February of an odd-numbered year, the commissioner of finance 
 37.21  projects that there will be a positive unrestricted budgetary 
 37.22  general fund balance at the close of the biennium that exceeds 
 37.23  one-half of one percent of total general fund biennial revenues, 
 37.24  the commissioner of finance shall designate the entire balance 
 37.25  as available for rebate to the taxpayers of Minnesota. 
 37.26     (b) If the commissioner of finance designates an amount for 
 37.27  rebate in either forecast, then the governor shall present a 
 37.28  plan to the legislature for rebating that amount to the 
 37.29  taxpayers of Minnesota.  The plan must provide for payments to 
 37.30  begin no later than August 15 of the odd-numbered year.  The 
 37.31  legislature must adopt or modify any plan presented by the 
 37.32  governor by April 15 of each odd-numbered year. 
 37.33     (c) In any odd-numbered year in which the legislature has 
 37.34  not enacted legislation to distribute a positive unrestricted 
 37.35  budgetary general fund balance, but such a positive balance in 
 37.36  excess of one-half of one percent of the total general fund 
 38.1   biennial revenues exists on June 30 of an odd-numbered year, the 
 38.2   entire positive balance must be refunded to the taxpayers of 
 38.3   Minnesota in the same manner as the preceding rebate. 
 38.4      (d) By July 15 of each odd-numbered year, the commissioner 
 38.5   of finance shall certify to the commissioner of revenue the 
 38.6   amount of revenues available for rebate as determined by 
 38.7   preliminary June 30 end-of-year fiscal analysis. 
 38.8      (e) If the amount of a positive unrestricted budgetary 
 38.9   general fund balance existing on June 30 of an odd-numbered year 
 38.10  is less than one-half of one percent of the total general fund 
 38.11  biennial revenues, the total amount of the positive balance 
 38.12  shall be deposited into the tax relief account. 
 38.13     (f) Amounts certified for rebate by the commissioner of 
 38.14  finance are appropriated from the general fund to the 
 38.15  commissioner of revenue for the sole purpose of making the 
 38.16  payments required by this section. 
 38.17     Sec. 3.  [EFFECTIVE DATE.] 
 38.18     Sections 1 and 2 are effective September 1, 1999. 
 38.19                             ARTICLE 7
 38.20                   REPEAL OF MINNESOTACARE TAXES
 38.21     Section 1.  Minnesota Statutes 1998, section 60A.15, 
 38.22  subdivision 1, is amended to read: 
 38.23     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
 38.24  before April 1, June 1, and December 1 of each year, every 
 38.25  domestic and foreign company, including town and farmers' mutual 
 38.26  insurance companies, domestic mutual insurance companies, and 
 38.27  marine insurance companies, ~~health maintenance organizations,~~ 
 38.28  ~~community integrated service networks, and nonprofit health~~ 
 38.29  ~~service plan corporations,~~ shall pay to the commissioner of 
 38.30  revenue installments equal to one-third of the insurer's total 
 38.31  estimated tax for the current year.  Except as provided 
 38.32  in ~~paragraphs~~ paragraph (d), ~~(e), (h), and (i),~~ installments 
 38.33  must be based on a sum equal to two percent of the premiums 
 38.34  described in paragraph (b). 
 38.35     (b) Installments under paragraph (a)~~,~~ or (d)~~, or (e)~~ are 
 38.36  percentages of gross premiums less return premiums on all direct 
 39.1   business received by the insurer in this state, or by its agents 
 39.2   for it, in cash or otherwise, during such year, except that the 
 39.3   tax does not apply to premiums received for health plans as 
 39.4   defined in section 62A.011, subdivision 3, or to premiums 
 39.5   received for coverage described in section 62A.011, subdivision 
 39.6   3, clause (10). 
 39.7      (c) Failure of a company to make payments of at least 
 39.8   one-third of either (1) the total tax paid during the previous 
 39.9   calendar year or (2) 80 percent of the actual tax for the 
 39.10  current calendar year shall subject the company to the penalty 
 39.11  and interest provided in this section, unless the total tax for 
 39.12  the current tax year is $500 or less. 
 39.13     (d) ~~For health maintenance organizations, nonprofit health~~ 
 39.14  ~~service plan corporations, and community integrated service~~ 
 39.15  ~~networks, the installments must be based on an amount determined~~ 
 39.16  ~~under paragraph (h) or (i).~~ 
 39.17     ~~(e)~~ For purposes of computing installments for town and 
 39.18  farmers' mutual insurance companies and for mutual property 
 39.19  casualty companies with total assets on December 31, 1989, of 
 39.20  $1,600,000,000 or less, the following rates apply: 
 39.21     (1) for all life insurance, two percent; 
 39.22     (2) for town and farmers' mutual insurance companies and 
 39.23  for mutual property and casualty companies with total assets of 
 39.24  $5,000,000 or less, on all other coverages, one percent; and 
 39.25     (3) for mutual property and casualty companies with total 
 39.26  assets on December 31, 1989, of $1,600,000,000 or less, on all 
 39.27  other coverages, 1.26 percent. 
 39.28     ~~(f)~~ (e) If the aggregate amount of premium tax payments 
 39.29  under this section and the fire marshal tax payments under 
 39.30  section 299F.21 made during a calendar year is equal to or 
 39.31  exceeds $120,000, all tax payments in the subsequent calendar 
 39.32  year must be paid by means of a funds transfer as defined in 
 39.33  section 336.4A-104, paragraph (a).  The funds transfer payment 
 39.34  date, as defined in section 336.4A-401, must be on or before the 
 39.35  date the payment is due.  If the date the payment is due is not 
 39.36  a funds transfer business day, as defined in section 336.4A-105, 
 40.1   paragraph (a), clause (4), the payment date must be on or before 
 40.2   the funds transfer business day next following the date the 
 40.3   payment is due.  
 40.4      ~~(g)~~ (f) Premiums under medical assistance, general 
 40.5   assistance medical care, the MinnesotaCare program, and the 
 40.6   Minnesota comprehensive health insurance plan and all payments, 
 40.7   revenues, and reimbursements received from the federal 
 40.8   government for Medicare-related coverage as defined in section 
 40.9   62A.31, subdivision 3, paragraph (e), are not subject to tax 
 40.10  under this section. 
 40.11     ~~(h) For calendar years 1997, 1998, and 1999, the~~ 
 40.12  ~~installments for health maintenance organizations, community~~ 
 40.13  ~~integrated service networks, and nonprofit health service plan~~ 
 40.14  ~~corporations must be based on an amount equal to one percent of~~ 
 40.15  ~~premiums described under paragraph (b).  Health maintenance~~ 
 40.16  ~~organizations, community integrated service networks, and~~ 
 40.17  ~~nonprofit health service plan corporations that have met the~~ 
 40.18  ~~cost containment goals established under section 62J.04 in the~~ 
 40.19  ~~individual and small employer market for calendar year 1996 are~~ 
 40.20  ~~exempt from payment of the tax imposed under this section for~~ 
 40.21  ~~premiums paid after March 30, 1997, and before April 1, 1998.~~  
 40.22  ~~Health maintenance organizations, community integrated service~~ 
 40.23  ~~networks, and nonprofit health service plan corporations that~~ 
 40.24  ~~have met the cost containment goals established under section~~ 
 40.25  ~~62J.04 in the individual and small employer market for calendar~~ 
 40.26  ~~year 1997 are exempt from payment of the tax imposed under this~~ 
 40.27  ~~section for premiums paid after March 30, 1998, and before April~~ 
 40.28  ~~1, 1999.  Health maintenance organizations, community integrated~~ 
 40.29  ~~service networks, and nonprofit health service plan corporations~~ 
 40.30  ~~that have met the cost containment goals established under~~ 
 40.31  ~~section 62J.04 in the individual and small employer market for~~ 
 40.32  ~~calendar year 1998 are exempt from payment of the tax imposed~~ 
 40.33  ~~under this section for premiums paid after March 30, 1999, and~~ 
 40.34  ~~before January 1, 2000.~~  
 40.35     ~~(i) For calendar years after 1999, the commissioner of~~ 
 40.36  ~~finance shall determine the balance of the health care access~~ 
 41.1   ~~fund on September 1 of each year beginning September 1, 1999.~~  
 41.2   ~~If the commissioner determines that there is no structural~~ 
 41.3   ~~deficit for the next fiscal year, no tax shall be imposed under~~ 
 41.4   ~~paragraph (d) for the following calendar year.  If the~~ 
 41.5   ~~commissioner determines that there will be a structural deficit~~ 
 41.6   ~~in the fund for the following fiscal year, then the~~ 
 41.7   ~~commissioner, in consultation with the commissioner of revenue,~~ 
 41.8   ~~shall determine the amount needed to eliminate the structural~~ 
 41.9   ~~deficit and a tax shall be imposed under paragraph (d) for the~~ 
 41.10  ~~following calendar year.  The commissioner shall determine the~~ 
 41.11  ~~rate of the tax as either one-quarter of one percent, one-half~~ 
 41.12  ~~of one percent, three-quarters of one percent, or one percent of~~ 
 41.13  ~~premiums described in paragraph (b), whichever is the lowest of~~ 
 41.14  ~~those rates that the commissioner determines will produce~~ 
 41.15  ~~sufficient revenue to eliminate the projected structural~~ 
 41.16  ~~deficit.  The commissioner of finance shall publish in the State~~ 
 41.17  ~~Register by October 1 of each year the amount of tax to be~~ 
 41.18  ~~imposed for the following calendar year.  In determining the~~ 
 41.19  ~~structural balance of the health care access fund for fiscal~~ 
 41.20  ~~years 2000 and 2001, the commissioner shall disregard the~~ 
 41.21  ~~transfer amount from the health care access fund to the general~~ 
 41.22  ~~fund for expenditures associated with the services provided to~~ 
 41.23  ~~pregnant women and children under the age of two enrolled in the~~ 
 41.24  ~~MinnesotaCare program.~~  
 41.25     ~~(j) In approving the premium rates as required in sections~~ 
 41.26  ~~62L.08, subdivision 8, and 62A.65, subdivision 3, the~~ 
 41.27  ~~commissioners of health and commerce shall ensure that any~~ 
 41.28  ~~exemption from the tax as described in paragraphs (h) and (i) is~~ 
 41.29  ~~reflected in the premium rate.~~ 
 41.30     Sec. 2.  Minnesota Statutes 1998, section 62J.041, 
 41.31  subdivision 1, is amended to read: 
 41.32     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 41.33  section, the following definitions apply. 
 41.34     (b) "Health plan company" has the definition provided in 
 41.35  section 62Q.01. 
 41.36     (c) "Total expenditures" means incurred claims or 
 42.1   expenditures on health care services, administrative expenses, 
 42.2   charitable contributions, and all other payments made by health 
 42.3   plan companies out of premium revenues. 
 42.4      (d) "Net expenditures" means total expenditures minus 
 42.5   exempted taxes and assessments and payments or allocations made 
 42.6   to establish or maintain reserves.  
 42.7      (e) "Exempted taxes and assessments" means direct payments 
 42.8   for taxes to government agencies, contributions to the Minnesota 
 42.9   comprehensive health association, the medical assistance 
 42.10  provider's surcharge under section 256.9657, the MinnesotaCare 
 42.11  provider tax under Minnesota Statutes 1998, section 295.52, 
 42.12  assessments by the health coverage reinsurance association, 
 42.13  assessments by the Minnesota life and health insurance guaranty 
 42.14  association, assessments by the Minnesota risk adjustment 
 42.15  association, and any new assessments imposed by federal or state 
 42.16  law. 
 42.17     (f) "Consumer cost-sharing or subscriber liability" means 
 42.18  enrollee coinsurance, copayment, deductible payments, and 
 42.19  amounts in excess of benefit plan maximums. 
 42.20     Sec. 3.  Minnesota Statutes 1998, section 62Q.095, 
 42.21  subdivision 6, is amended to read: 
 42.22     Subd. 6.  [EXEMPTION.] A health plan company, to the extent 
 42.23  that it operates as a staff model health plan company ~~as defined~~ 
 42.24  ~~in section 295.50, subdivision 12b,~~ by employing allied 
 42.25  independent health care providers to deliver health care 
 42.26  services to enrollees, is exempt from this section.  For 
 42.27  purposes of this subdivision, "staff model health plan company" 
 42.28  means a health plan company as defined in section 62Q.01, 
 42.29  subdivision 4, which employs one or more types of health care 
 42.30  providers to deliver health care services to the health plan 
 42.31  company's enrollees. 
 42.32     Sec. 4.  Minnesota Statutes 1998, section 62R.24, is 
 42.33  amended to read: 
 42.34     62R.24 [TAXES AND ASSESSMENTS.] 
 42.35     Effective January 1, 1998, as a condition to entering a 
 42.36  contract described in section 62R.17, a self-insured employer 
 43.1   plan or the qualified employer must voluntarily pay ~~the one~~ 
 43.2   ~~percent premium tax imposed in section 60A.15, subdivision 1,~~ 
 43.3   ~~paragraph (d), and~~ assessments by the Minnesota Comprehensive 
 43.4   Health Association. 
 43.5      Sec. 5.  Minnesota Statutes 1998, section 214.16, 
 43.6   subdivision 2, is amended to read: 
 43.7      Subd. 2.  [BOARD COOPERATION REQUIRED.] The board shall 
 43.8   assist the commissioner of health in data collection activities 
 43.9   required under Laws 1992, chapter 549, article 7~~, and shall~~ 
 43.10  ~~assist the commissioner of revenue in activities related to~~ 
 43.11  ~~collection of the health care provider tax required under Laws~~ 
 43.12  ~~1992, chapter 549, article 9~~.  Upon the request of the 
 43.13  commissioner ~~or the commissioner of revenue~~, the board shall 
 43.14  make available names and addresses of current licensees and 
 43.15  provide other information or assistance as needed. 
 43.16     Sec. 6.  Minnesota Statutes 1998, section 214.16, 
 43.17  subdivision 3, is amended to read: 
 43.18     Subd. 3.  [GROUNDS FOR DISCIPLINARY ACTION.] The board 
 43.19  shall take disciplinary action, which may include license 
 43.20  revocation, against a regulated person for: 
 43.21     (1) intentional failure to provide the commissioner of 
 43.22  health with the data required under chapter 62J; 
 43.23     ~~(2) intentional failure to provide the commissioner of~~ 
 43.24  ~~revenue with data on gross revenue and other information~~ 
 43.25  ~~required for the commissioner to implement sections 295.50 to~~ 
 43.26  ~~295.58;~~ 
 43.27     ~~(3) intentional failure to pay the health care provider tax~~ 
 43.28  ~~required under section 295.52;~~ and 
 43.29     ~~(4)~~ (2) entering into a contract or arrangement that is 
 43.30  prohibited under sections 62J.70 to 62J.73. 
 43.31     Sec. 7.  Minnesota Statutes 1998, section 256L.02, 
 43.32  subdivision 3, is amended to read: 
 43.33     Subd. 3.  [FINANCIAL MANAGEMENT.] (a) ~~The commissioner~~ 
 43.34  ~~shall manage spending for the MinnesotaCare program in a manner~~ 
 43.35  ~~that maintains a minimum reserve in accordance with section~~ 
 43.36  ~~16A.76.~~  As part of each state revenue and expenditure forecast, 
 44.1   the commissioner must make an assessment of the expected 
 44.2   expenditures for the covered services for the remainder of the 
 44.3   current biennium and for the following biennium.  The estimated 
 44.4   expenditure~~, including the reserve requirements described in~~ 
 44.5   ~~section 16A.76,~~ shall be compared to ~~an estimate of the revenues~~ 
 44.6   ~~that will be available in the health care access fund~~ the 
 44.7   appropriations for the MinnesotaCare program.  In making the 
 44.8   comparison for the following biennium, the commissioner shall 
 44.9   assume that the appropriations for the current biennium will be 
 44.10  increased by the projected increase in the consumer price index. 
 44.11  Based on this comparison, and after consulting with the chairs 
 44.12  of the house ways and means committee and the senate finance 
 44.13  committee, and the legislative commission on health care access, 
 44.14  the commissioner shall, as necessary, make the adjustments 
 44.15  specified in paragraph (b) to ensure that expenditures remain 
 44.16  within the ~~limits of available revenues for the remainder of the~~ 
 44.17  ~~current biennium and for the following biennium~~ actual and 
 44.18  projected appropriations for the MinnesotaCare program.  The 
 44.19  commissioner shall not hire additional staff using 
 44.20  appropriations ~~from the health care access fund~~ for 
 44.21  MinnesotaCare until the commissioner of finance makes a 
 44.22  determination that the adjustments implemented under paragraph 
 44.23  (b) are sufficient to allow MinnesotaCare expenditures to remain 
 44.24  within the ~~limits of available revenues~~ actual and projected 
 44.25  appropriations for the remainder of the current biennium and for 
 44.26  the following biennium. 
 44.27     (b) The adjustments the commissioner shall use must be 
 44.28  implemented in this order:  first, stop enrollment of single 
 44.29  adults and households without children; second, upon 45 days' 
 44.30  notice, stop coverage of single adults and households without 
 44.31  children already enrolled in the MinnesotaCare program; third, 
 44.32  upon 90 days' notice, decrease the premium subsidy amounts by 
 44.33  ten percent for families with gross annual income above 200 
 44.34  percent of the federal poverty guidelines; fourth, upon 90 days' 
 44.35  notice, decrease the premium subsidy amounts by ten percent for 
 44.36  families with gross annual income at or below 200 percent; and 
 45.1   fifth, require applicants to be uninsured for at least six 
 45.2   months prior to eligibility in the MinnesotaCare program.  If 
 45.3   these measures are insufficient to limit the expenditures to the 
 45.4   estimated amount of revenue, the commissioner shall further 
 45.5   limit enrollment or decrease premium subsidies. 
 45.6      Sec. 8.  Minnesota Statutes 1998, section 270B.01, 
 45.7   subdivision 8, is amended to read: 
 45.8      Subd. 8.  [MINNESOTA TAX LAWS.] For purposes of this 
 45.9   chapter only, unless expressly stated otherwise, "Minnesota tax 
 45.10  laws" means the taxes, refunds, and fees administered by or paid 
 45.11  to the commissioner under chapters 115B (except taxes imposed 
 45.12  under sections 115B.21 to 115B.24), 289A (except taxes imposed 
 45.13  under sections 298.01, 298.015, and 298.24), 290, 290A, 291, 
 45.14  297A, and 297H ~~and sections 295.50 to 295.59~~, or any similar 
 45.15  Indian tribal tax administered by the commissioner pursuant to 
 45.16  any tax agreement between the state and the Indian tribal 
 45.17  government, and includes any laws for the assessment, 
 45.18  collection, and enforcement of those taxes, refunds, and fees. 
 45.19     Sec. 9.  Minnesota Statutes 1998, section 270B.14, 
 45.20  subdivision 1, is amended to read: 
 45.21     Subdivision 1.  [DISCLOSURE TO COMMISSIONER OF HUMAN 
 45.22  SERVICES.] (a) On the request of the commissioner of human 
 45.23  services, the commissioner shall disclose return information 
 45.24  regarding taxes imposed by chapter 290, and claims for refunds 
 45.25  under chapter 290A, to the extent provided in paragraph (b) and 
 45.26  for the purposes set forth in paragraph (c). 
 45.27     (b) Data that may be disclosed are limited to data relating 
 45.28  to the identity, whereabouts, employment, income, and property 
 45.29  of a person owing or alleged to be owing an obligation of child 
 45.30  support. 
 45.31     (c) The commissioner of human services may request data 
 45.32  only for the purposes of carrying out the child support 
 45.33  enforcement program and to assist in the location of parents who 
 45.34  have, or appear to have, deserted their children.  Data received 
 45.35  may be used only as set forth in section 256.978. 
 45.36     (d) The commissioner shall provide the records and 
 46.1   information necessary to administer the supplemental housing 
 46.2   allowance to the commissioner of human services.  
 46.3      (e) At the request of the commissioner of human services, 
 46.4   the commissioner of revenue shall electronically match the 
 46.5   social security numbers and names of participants in the 
 46.6   telephone assistance plan operated under sections 237.69 to 
 46.7   237.711, with those of property tax refund filers, and determine 
 46.8   whether each participant's household income is within the 
 46.9   eligibility standards for the telephone assistance plan. 
 46.10     (f) The commissioner may provide records and information 
 46.11  collected under Minnesota Statutes 1998, sections 295.50 to 
 46.12  295.59, to the commissioner of human services for purposes of 
 46.13  the Medicaid Voluntary Contribution and Provider-Specific Tax 
 46.14  Amendments of 1991, Public Law Number 102-234.  Upon the written 
 46.15  agreement by the United States Department of Health and Human 
 46.16  Services to maintain the confidentiality of the data, the 
 46.17  commissioner may provide records and information collected under 
 46.18  Minnesota Statutes 1998, sections 295.50 to 295.59, to the 
 46.19  Health Care Financing Administration section of the United 
 46.20  States Department of Health and Human Services for purposes of 
 46.21  meeting federal reporting requirements.  
 46.22     (g) The commissioner may provide records and information to 
 46.23  the commissioner of human services as necessary to administer 
 46.24  the early refund of refundable tax credits. 
 46.25     (h) The commissioner may disclose information to the 
 46.26  commissioner of human services necessary to verify income for 
 46.27  eligibility and premium payment under the MinnesotaCare program, 
 46.28  under section 256L.05, subdivision 2. 
 46.29     Sec. 10.  [REPEAL OF HEALTH CARE ACCESS FUND.] 
 46.30     Subdivision 1.  [TRANSFER TO GENERAL FUND.] Upon the repeal 
 46.31  of the health care access fund under section 11, the 
 46.32  commissioner of finance shall transfer any funds in the health 
 46.33  care access fund to the general fund and the health care access 
 46.34  fund is combined with and becomes part of the general fund. 
 46.35     Subd. 2.  [REVISOR'S INSTRUCTION.] In the next edition of 
 46.36  Minnesota Statutes, the revisor of statutes shall substitute 
 47.1   "general fund" for "health care access fund" each place health 
 47.2   care access fund appears. 
 47.3      Sec. 11.  [REPEALER.] 
 47.4      Minnesota Statutes 1998, sections 13.99, subdivision 86b; 
 47.5   16A.724; 16A.76; 62T.10; 144.1484, subdivision 2; 256L.02, 
 47.6   subdivision 4; 295.50; 295.51; 295.52; 295.53; 295.54; 295.55; 
 47.7   295.56; 295.57; 295.58; 295.581; 295.582; and 295.59, are 
 47.8   repealed. 
 47.9      Sec. 12.  [EFFECTIVE DATE.] 
 47.10     Sections 1 to 11 are effective July 1, 1999.