1.1 	A bill for an act
1.2 	relating to border city enterprise zones; amending
1.3 	Minnesota Statutes 2004, sections 272.0212,
1.4 	subdivisions 1, 2; 469.169, by adding a subdivision.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2004, section 272.0212,
1.7 	subdivision 1, is amended to read:
1.8 		Subdivision 1.Exemption.  All qualified property in a
1.9 	zone is exempt to the extent and for a period up to the duration
1.10 	provided by the zone designation and under sections 469.1731 to
1.11 	469.1735.
1.12 	
EFFECTIVE DATE. This section is effective for development
1.13 	agreements approved after the day following final enactment and
1.14 	beginning for property taxes payable in 2006.

1.15 	Sec. 2. Minnesota Statutes 2004, section 272.0212,
1.16 	subdivision 2, is amended to read:
1.17 		Subd. 2.Limits on exemption. (a) Property in a zone is
1.18 	not exempt under this section from the following:
1.19 	(1) special assessments;
1.20 	(2) ad valorem property taxes specifically levied for the
1.21 	payment of principal and interest on debt obligations; and
1.22 	(3) all taxes levied by a school district, except school
1.23 	referendum levies as defined in section 126C.17.
1.24 	(b) The city may limit the property tax exemption to a
1.25 	shorter period than the duration of the zone or to a percentage
2.1 	of the property taxes payable or both.
2.2 	
EFFECTIVE DATE. This section is effective for development
2.3 	agreements approved after the day following final enactment and
2.4 	beginning for property taxes payable in 2006.

2.5 	Sec. 3. Minnesota Statutes 2004, section 469.169, is
2.6 	amended by adding a subdivision to read:
2.7 		Subd. 17.Additional border city allocations. (a) In
2.8 	addition to tax reductions authorized in subdivisions 7 to 16,
2.9 	the commissioner shall allocate $750,000 for tax reductions to
2.10 	border city enterprise zones in cities located on the western
2.11 	border of the state.  The commissioner shall make allocations to
2.12 	zones in cities on the western border on a per capita basis.
2.13 	Allocations made under this subdivision may be used for tax
2.14 	reductions as provided in section 469.171, or for other offsets
2.15 	of taxes imposed on or remitted by businesses located in the
2.16 	enterprise zone, but only if the municipality determines that
2.17 	the granting of the tax reduction or offset is necessary in
2.18 	order to retain a business within or attract a business to the
2.19 	zone.  Any portion of the allocation provided in this paragraph
2.20 	may alternatively be used for tax reductions under section
2.21 	469.1732 or 469.1734.
2.22 	(b) The commissioner shall allocate $750,000 for tax
2.23 	reductions under section 469.1732 or 469.1734 to cities with
2.24 	border city enterprise zones located on the western border of
2.25 	the state.  The commissioner shall allocate this amount among
2.26 	the cities on a per capita basis.  Any portion of the allocation
2.27 	provided in this paragraph may alternatively be used for tax
2.28 	reductions as provided in section 469.171.
2.29 	
EFFECTIVE DATE. This section is effective the day
2.30 	following final enactment.