Journal of the House - 59th Day - Monday, May 19, 2003

The bill was repassed, as amended by the Senate, and its title agreed to.

Speaker pro tempore Abrams called Seifert to the Chair.

FISCAL CALENDAR

Pursuant to rule 1.22, Abrams requested immediate consideration of S. F. No. 1505.

S. F. No. 1505 was reported to the House.

Abrams moved to amend S. F. No. 1505, the unofficial engrossment, as follows:

Page 2, after line 50, insert:

"Section 1. Minnesota Statutes 2002, section 168.27, subdivision 4a, is amended to read:

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Subd. 4a. [LIMITED USED VEHICLE LICENSE.] A limited used vehicle license shall be provided to a nonprofit charitable organization that qualifies for tax exemption under section 501(c)(3) of the Internal Revenue Code whose primary business in the transfer of vehicles is to raise funds for the corporation, who acquires vehicles for sale through donation, and who uses a licensed motor vehicle auctioneer to sell vehicles to retail customers. This license does not apply to educational institutions whose primary purpose is to train students in the repair, maintenance, and sale of motor vehicles. A limited used vehicle license allows the organization to accept assignment of vehicles without the requirement to transfer title as provided in section 168A.10 until sold to a retail customer or licensed motor vehicle dealer. Limited used vehicle license holders are not entitled to dealer plates, and shall report all vehicles held for resale to the department of public safety in a manner and time prescribed by the department.

[EFFECTIVE DATE.] This section is effective for sales made after June 30, 2003."

Page 3, after line 25, insert:

"Sec. 3. Minnesota Statutes 2002, section 289A.18, subdivision 4, is amended to read:

Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use tax returns must be filed on or before the 20th day of the month following the close of the preceding reporting period, except that annual use tax returns provided for under section 289A.11, subdivision 1, must be filed by April 15 following the close of the calendar year, in the case of individuals. Annual use tax returns of businesses, including sole proprietorships, and annual sales tax returns must be filed by February 5 following the close of the calendar year.

(b) Returns for the June reporting period filed by retailers required to remit their June liability under section 289A.20, subdivision 4, paragraph (b), are due on or before August 20.

(c) If a retailer has an average sales and use tax liability, including local sales and use taxes administered by the commissioner, equal to or less than $500 per month in any quarter of a calendar year, and has substantially complied with the tax laws during the preceding four calendar quarters, the retailer may request authorization to file and pay the taxes quarterly in subsequent calendar quarters. The authorization remains in effect during the period in which the retailer's quarterly returns reflect sales and use tax liabilities of less than $1,500 and there is continued compliance with state tax laws.

(d) If a retailer has an average sales and use tax liability, including local sales and use taxes administered by the commissioner, equal to or less than $100 per month during a calendar year, and has substantially complied with the tax laws during that period, the retailer may request authorization to file and pay the taxes annually in subsequent years. The authorization remains in effect during the period in which the retailer's annual returns reflect sales and use tax liabilities of less than $1,200 and there is continued compliance with state tax laws.

(e) The commissioner may also grant quarterly or annual filing and payment authorizations to retailers if the commissioner concludes that the retailers' future tax liabilities will be less than the monthly totals identified in paragraphs (c) and (d). An authorization granted under this paragraph is subject to the same conditions as an authorization granted under paragraphs (c) and (d).

(f) A taxpayer who is a materials supplier may report gross receipts either on:

(1) the cash basis as the consideration is received; or

(2) the accrual basis as sales are made.

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As used in this paragraph, "materials supplier" means a person who provides materials for the improvement of real property; who is primarily engaged in the sale of lumber and building materials-related products to owners, contractors, subcontractors, repairers, or consumers; who is authorized to file a mechanics lien upon real property and improvements under chapter 514; and who files with the commissioner an election to file sales and use tax returns on the basis of this paragraph.

(g) Notwithstanding paragraphs (a) to (f), a seller that is not a Model 1, 2, or 3 seller, as those terms are used in the Streamlined Sales and Use Tax Agreement, that does not have a legal requirement to register in Minnesota, and that is registered under the agreement, must file a return by February 5 following the close of the calendar year in which the seller initially registers, and must file subsequent returns on February 5 on an annual basis in succeeding years. Additionally, a return must be submitted on or before the 20th day of the month following any month by which sellers have accumulated state and local tax funds for the state in the amount of $1,000 or more.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 4. Minnesota Statutes 2002, section 289A.40, subdivision 2, is amended to read:

Subd. 2. [BAD DEBT LOSS.] If a claim relates to an overpayment because of a failure to deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered timely if filed within seven years from the date prescribed for the filing of the return. A claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2 years from the date prescribed for filing the return, plus any extensions granted for filing the return, but only if filed within the extended time~~, or within one year from the date the taxpayer's federal income tax return is timely filed claiming the bad debt deduction, whichever period expires later~~. The refund or credit is limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes of this subdivision, has the same meaning as that term is used in United States Code, title 26, section 166, except that the following are excluded from the calculation of bad debt: financing charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts on property that remain in the possession of the seller until the full purchase price is paid; expenses incurred in attempting to collect any debt; and repossessed property.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 5. Minnesota Statutes 2002, section 289A.50, is amended by adding a subdivision to read:

Subd. 2b. [CERTIFIED SERVICE PROVIDER; BAD DEBT CLAIM.] A certified service provider, as defined in section 297A.995, subdivision 2, may claim on behalf of a taxpayer that is its client any bad debt allowance provided by section 297A.81. The certified service provider must credit or refund to its client the full amount of any bad debt allowance or refund received.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 6. Minnesota Statutes 2002, section 289A.50, is amended by adding a subdivision to read:

Subd. 2c. [NOTICE FROM PURCHASER TO VENDOR REQUESTING REFUND.] (a) If a vendor has collected from a purchaser a tax on a transaction that is not subject to the tax imposed by chapter 297A, the purchaser may seek from the vendor a return of over-collected sales or use taxes as follows:

(1) the purchaser must provide written notice to the vendor;

(2) the notice to the vendor must contain the information necessary to determine the validity of the request; and

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(3) no cause of action against the vendor accrues until the vendor has had 60 days to respond to the written notice.

(b) In connection with a purchaser's request from a vendor of over-collected sales or use taxes, a vendor is presumed to have a reasonable business practice, if in the collection of such sales or use taxes, the vendor: (1) uses a certified service provider as defined in section 297A.995, a certified automated system, as defined in section 297A.995, or a proprietary system that is certified by the state; and (2) has remitted to the state all taxes collected less any deductions, credits, or collection allowances.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 7. Minnesota Statutes 2002, section 289A.56, subdivision 4, is amended to read:

Subd. 4. [CAPITAL EQUIPMENT AND CERTAIN BUILDING MATERIALS REFUNDS; REFUNDS TO PURCHASERS.] Notwithstanding subdivision 3, for refunds payable under ~~section~~ sections 297A.75, subdivision 1, ~~clauses (1), (2), (3), and (5), interest is computed from the date the refund claim is filed with the commissioner. For refunds payable under section~~ and 289A.50, subdivision 2a, interest is computed from the 20th day of the month following the month of the invoice date for the purchase which is the subject of the refund, if the refund claim includes a detailed schedule of purchases made during each of the periods in the claim. If the refund claim submitted does not contain a schedule reflecting purchases made in each period, interest is computed from the date the claim was filed 90 days after the refund claim is filed with the commissioner.

[EFFECTIVE DATE.] This section is effective for refund claims filed on or after April 1, 2003."

Page 4, line 21, after "of" insert "prewritten" and before the period, insert "whether delivered electronically, by load and leave, or otherwise"

Page 7, line 6, strike everything after "law" and insert a period

Page 7, strike lines 7 to 29

Page 8, line 3, after "section" insert ", paragraph (f), and the changes made to paragraph (i) are effective for sales and purchases made on or after January 1, 2004. This section, paragraph (k),"

Page 8, after line 4, insert:

"Sec. 9. Minnesota Statutes 2002, section 297A.61, subdivision 7, is amended to read:

Subd. 7. [SALES PRICE.] (a) "Sales price" means the measure subject to sales tax, and means the total amount of consideration, including cash, credit, personal property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:

(1) the seller's cost of the property sold;

(2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expenses of the seller;

(3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;

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(4) delivery charges;

(5) installation charges; and

(6) the value of exempt property given to the purchaser when taxable and exempt personal property have been bundled together and sold by the seller as a single product or piece of merchandise.

(b) Sales price does not include:

(1) discounts, including cash, terms, or coupons, that are not reimbursed by a third party and that are allowed by the seller and taken by a purchaser on a sale;

(2) interest, financing, and carrying charges from credit extended on the sale of personal property or services, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser; and

(3) any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale, or similar document given to the purchaser.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 10. Minnesota Statutes 2002, section 297A.61, subdivision 10, is amended to read:

Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible personal property" means ~~corporeal personal property of any kind, including property that is to become real property as a result of incorporation, attachment, or installation following its acquisition.~~

~~(b) Tangible personal property includes, but is not limited to:~~

~~(1) computer software, whether contained on tape, discs, cards, or other devices; and~~

~~(2) prepaid telephone calling cards.~~

~~(c)~~ personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. "Tangible personal property" includes, but is not limited to, electricity, water, gas, steam, prewritten computer software, and prepaid calling cards.

(b) Tangible personal property does not include:

(1) large ponderous machinery and equipment used in a business or production activity which at common law would be considered to be real property;

(2) property which is subject to an ad valorem property tax;

(3) property described in section 272.02, subdivision 9, clauses (a) to (d); and

(4) property described in section 272.03, subdivision 2, clauses (3) and (5).

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

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Sec. 11. Minnesota Statutes 2002, section 297A.61, is amended by adding a subdivision to read:

Subd. 14a. [LEASE OR RENTAL.] (a) "Lease or rental" means any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration. A lease or rental may include future options to purchase or extend.

(b) Lease or rental does not include:

(1) a transfer of possession or control of property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments;

(2) a transfer of possession or control of property under an agreement that requires the transfer of title upon completion of required payments and payment of an option price does not exceed the greater of $100 or one percent of the total required payments; or

(3) providing tangible personal property along with an operator for a fixed or indeterminate period of time. A condition of this exclusion is that the operator is necessary for the equipment to perform as designed. For the purpose of this subdivision, an operator must do more than maintain, inspect, or set up the tangible personal property.

(c) Lease or rental does include agreements covering motor vehicles and trailers where the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in United States Code, title 26, section 7701(h)(l).

(d) This definition must be used for sales and use tax purposes regardless if a transaction is characterized as a lease or rental under generally accepted accounting principles, the Internal Revenue Code, chapter 336, or other provisions of federal, state, or local law.

[EFFECTIVE DATE.] This section is effective for leases and rentals entered into on or after January 1, 2004.

Sec. 12. Minnesota Statutes 2002, section 297A.61, subdivision 17, is amended to read:

Subd. 17. [PREWRITTEN COMPUTER SOFTWARE.] "Prewritten computer software" means a computer program, either in the form of written procedures or contained on tapes, discs, cards, or another device, or any required documentation or manuals designed to facilitate the use of the computer program. computer software, including prewritten upgrades, that is not designed and developed by the author or other creator to the specifications of a specific purchaser. The combining of two or more "prewritten computer software" programs or prewritten portions of the programs does not cause the combination to be other than "prewritten computer software." "Prewritten computer software" includes software designed and developed by the author or other creator to the specifications of a specific purchaser when it is sold to a person other than the purchaser. If a person modifies or enhances computer software of which the person is not the author or creator, the person is deemed to be the author or creator only of such person's modifications or enhancements. "Prewritten computer software" or a prewritten portion of it that is modified or enhanced to any degree, if the modification or enhancement is designed and developed to the specifications of a specific purchaser, remains "prewritten computer software"; provided, however, that if there is a reasonable, separately stated charge or an invoice or other statement of the price given to the purchaser for such modification or enhancement, the modification or enhancement does not constitute "prewritten computer software." For purposes of this subdivision:

(1) "computer" ~~does not include tape-controlled automatic drilling, milling, or other manufacturing machinery or equipment~~ means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions; ~~and~~

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(2) "computer program" means information and directions that dictate the function performed by data processing equipment. It includes the complete plan for the solution of a problem, such as the complete sequence of automatic data processing equipment instructions necessary to solve a problem and includes both systems and application programs and subdivisions, such as assemblers, compilers, routines, generators, and utility programs. Computer program includes a "canned" or prewritten computer program that is held or existing for general or repeated sale or lease, even if the prewritten or "canned" program was initially developed on a custom basis or for in-house use. "electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities; and

(3) "computer software" means a set of coded instructions designed to cause a "computer" or automatic data processing equipment to perform a task.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 13. Minnesota Statutes 2002, section 297A.61, is amended by adding a subdivision to read:

Subd. 17a. [DELIVERED ELECTRONICALLY.] "Delivered electronically" means delivered to the purchaser by means other than tangible storage media.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 14. Minnesota Statutes 2002, section 297A.61, is amended by adding a subdivision to read:

Subd. 17b. [LOAD AND LEAVE.] "Load and leave" means delivered to the purchaser by use of a tangible storage media where the tangible storage media is not physically transferred to the purchaser.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 15. Minnesota Statutes 2002, section 297A.61, subdivision 30, is amended to read:

Subd. 30. [DELIVERY CHARGES.] "Delivery charges" means charges by the seller of personal property or services for preparation and delivery to a location designated by the purchaser of personal property or services including, but not limited to, transportation, shipping, postage, handling, crating, and packing.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004."

Page 8, after line 18, insert:

"Sec. 17. Minnesota Statutes 2002, section 297A.66, is amended by adding a subdivision to read:

Subd. 5. [WITHDRAWAL FROM STREAMLINED SALES AND USE TAX AGREEMENT.] If the state has withdrawn its membership or been expelled from the streamlined sales and use tax agreement, it shall not use a seller's registration with the central registration system and the collection of sales and use taxes in the state as a factor in determining whether the seller has nexus with that state for any tax at any time.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 18. [297A.666] [AMNESTY FOR REGISTRATION.]

Subdivision 1. [AMNESTY PROVISIONS.] Subject to the limitations of subdivision 2:

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(1) this state shall provide amnesty for uncollected or unpaid sales or use tax to a seller who registers to pay or to collect and remit applicable sales or use tax on sales made to purchasers in this state in accordance with the terms of the streamlined sales and use tax agreement, provided that the seller was not so registered in this state in the 12-month period preceding the effective date of the state's participation in the agreement; and

(2) the amnesty shall preclude assessment for uncollected or unpaid sales or use tax together with penalty or interest for sales made during the period the seller was not registered in this state, provided registration occurs within 12 months of the effective date of the state's participation in the agreement.

Subd. 2. [LIMITATIONS.] (a) The amnesty is not available to a seller with respect to any matter or matters for which the seller received notice of the commencement of an audit and the audit is not yet finally resolved, including any related administrative and judicial processes.

(b) The amnesty is not available for sales or use taxes already paid or remitted to this state or to taxes collected by the seller.

(c) The amnesty is fully effective, absent the seller's fraud or intentional misrepresentation of a material fact, as long as the seller continues registration and continues payment or collection and remittance of applicable sales or use taxes for a period of at least 36 months. The statute of limitations provisions of chapter 289A applicable to asserting a sales or use tax liability must be tolled during this 36-month period.

(d) The amnesty is applicable only to sales or use taxes due from a seller in its capacity as a seller and not to sales or use taxes due from a seller in its capacity as a buyer.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 19. Minnesota Statutes 2002, section 297A.668, is amended to read:

297A.668 [SOURCING OF SALE; SITUS IN THIS STATE.]

Subdivision 1. [~~SOURCING RULES~~ APPLICABILITY.] ~~(a)~~ The ~~following~~ provisions of this section apply regardless of the characterization of a product as tangible personal property, a digital good, or a service; but do not apply to telecommunications services, or the sales of motor vehicles, watercraft, aircraft, modular homes, manufactured homes, or mobile homes. These provisions only apply to determine a seller's obligation to pay or collect and remit a sales or use tax with respect to the seller's sale of a product. These provisions do not affect the obligation of a seller as purchaser to remit tax on the use of the product.

Subd. 2. [SOURCING RULES.] (a) The retail sale, excluding lease or rental, of a product shall be sourced as required in paragraphs (b) through (f).

(b) When the product is received by the purchaser at a business location of the seller, the sale is sourced to that business location.

(c) When the product is not received by the purchaser at a business location of the seller, the sale is sourced to the location where receipt by the purchaser or the donee designated by the purchaser occurs, including the location indicated by instructions for delivery to the purchasers or the purchaser's donee, known to the seller.

(d) When paragraphs (b) and (c) do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business, when use of this address does not constitute bad faith.

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(e) When paragraphs (b), (c), and (d) do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser's payment instrument if no other address is available, when use of this address does not constitute bad faith.

(f) When paragraphs (b), (c), (d), and (e) do not apply, including the circumstance where the seller is without sufficient information to apply the previous paragraphs, then the location is determined by the address from which tangible personal property was shipped, from which the digital good or the computer software delivered electronically was first available for transmission by the seller, or from which the service was provided. For purposes of this paragraph, the seller must disregard any location that merely provided the digital transfer of the product sold.

(g) For purposes of this subdivision, the terms "receive" and "receipt" mean taking possession of tangible personal property, making first use of services, or taking possession or making first use of digital goods or the computer software delivered electronically, whichever occurs first. The terms receive and receipt do not include possession by a carrier for hire on behalf of the purchaser.

Subd. 3. [LEASE OR RENTAL OF TANGIBLE PERSONAL PROPERTY.] The lease or rental of tangible personal property, other than property identified in subdivision 4 or 5, shall be sourced as required in paragraphs (a) to (c).

(a) For a lease or rental that requires recurring periodic payments, the first periodic payment is sourced the same as a retail sale in accordance with the provisions of subdivision 6. Periodic payments made subsequent to the first payment are sourced to the primary property location for each period covered by the payment. The primary property location must be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. The property location must not be altered by intermittent use at different locations, such as use of business property that accompanies employees on business trips and service calls.

(b) For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of subdivision 2.

(c) This subdivision does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.

Subd. 4. [LEASE OR RENTAL OF MOTOR VEHICLES, TRAILERS, SEMITRAILERS, OR AIRCRAFT THAT DO NOT QUALIFY AS TRANSPORTATION EQUIPMENT.] The lease or rental of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment, as defined in subdivision 5, shall be sourced as required in paragraphs (a) to (c).

(a) For a lease or rental that requires recurring periodic payments, each periodic payment is sourced to the primary property location. The primary property location must be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. This location must not be altered by intermittent use at different locations.

(b) For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of subdivision 2.

(c) This subdivision does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.

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Subd. 5. [TRANSPORTATION EQUIPMENT.] (a) The retail sale, including lease or rental, of transportation equipment shall be sourced the same as a retail sale in accordance with the provisions of subdivision 2, notwithstanding the exclusion of lease or rental in subdivision 2.

(b) "Transportation equipment" means any of the following:

(1) locomotives and railcars that are utilized for the carriage of persons or property in interstate commerce; and/or

(2) trucks and truck-tractors with a gross vehicle weight rating (GVWR) of 10,001 pounds or greater, trailers, semitrailers, or passenger buses that are:

(i) registered through the international registration plan; and

(ii) operated under authority of a carrier authorized and certified by the United States Department of Transportation or another federal authority to engage in the carriage of persons or property in interstate commerce.

Subd. 2. 6. [MULTIPLE POINTS OF USE.] (a) Notwithstanding the provisions of ~~subdivision 1~~ subdivisions 2 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the time of its purchase of a digital good, computer software delivered electronically, or a service that the digital good, computer software delivered electronically, or service will be concurrently available for use in more than one taxing jurisdiction shall deliver to the seller in conjunction with its purchase a multiple points of use exemption certificate disclosing this fact.

(b) Upon receipt of the multiple points of use exemption certificate, the seller is relieved of the obligation to collect, pay, or remit the applicable tax and the purchaser is obligated to collect, pay, or remit the applicable tax on a direct pay basis.

(c) A purchaser delivering the multiple points of use exemption certificate may use any reasonable, but consistent and uniform, method of apportionment that is supported by the purchaser's business records as they exist at the time of the consummation of the sale.

(d) The multiple points of use exemption certificate remains in effect for all future sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent sale's specific apportionment that is governed by the principle of paragraph (c) and the facts existing at the time of the sale.

(e) A holder of a direct pay permit is not required to deliver a multiple points or use exemption certificate to the seller. A direct pay permit holder shall follow the provisions of paragraph (c) in apportioning the tax due on a digital good, computer software delivered electronically, or a service that will be concurrently available for use in more than one taxing jurisdiction.

Subd. 3. [DEFINITION OF TERMS.] For purposes of this section, the terms "receive" and "receipt" mean taking possession of tangible personal property, making first use of services, or taking possession or making first use of digital goods, whichever occurs first. The terms receive and receipt do not include possession by a carrier for hire on behalf of the purchaser.

Subd. 7. [DIRECT MAIL.] (a) Notwithstanding other subdivisions of this section, a purchaser of direct mail that is not a holder of a direct pay permit shall provide to the seller, in conjunction with the purchase, either a direct mail form or information to show the jurisdictions to which the direct mail is delivered to recipients.

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(1) Upon receipt of the direct mail form, the seller is relieved of all obligations to collect, pay, or remit the applicable tax and the purchaser is obligated to pay or remit the applicable tax on a direct pay basis. A direct mail form remains in effect for all future sales of direct mail by the seller to the purchaser until it is revoked in writing.

(2) Upon receipt of information from the purchaser showing the jurisdictions to which the direct mail is delivered to recipients, the seller shall collect the tax according to the delivery information provided by the purchaser. In the absence of bad faith, the seller is relieved of any further obligation to collect tax on any transaction for which the seller has collected tax pursuant to the delivery information provided by the purchaser.

(b) If the purchaser of direct mail does not have a direct pay permit and does not provide the seller with either a direct mail form or delivery information, as required by paragraph (a), the seller shall collect the tax according to subdivision 2, paragraph (f). Nothing in this paragraph limits a purchaser's obligation for sales or use tax to any state to which the direct mail is delivered.

(c) If a purchaser of direct mail provides the seller with documentation of direct pay authority, the purchaser is not required to provide a direct mail form or delivery information to the seller.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 20. [297A.669] [TELECOMMUNICATION SOURCING.]

Subdivision 1. [CALL-BY-CALL BASIS SOURCING.] Except for the defined telecommunication services in subdivision 3, the sale of telecommunication service sold on a call-by-call basis shall be sourced to (1) each level of taxing jurisdiction where the call originates and terminates in that jurisdiction; or (2) each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.

Subd. 2. [OTHER THAN CALL-BY-CALL BASIS SOURCING.] Except for the defined telecommunication services in subdivision 3, a sale of telecommunications services sold on a basis other than a call-by-call basis is sourced to the customer's place of primary use.

Subd. 3. [DEFINED TELECOMMUNICATIONS SERVICES SOURCING.] The sale of the following telecommunication services shall be sourced to each level of taxing jurisdiction in paragraphs (a) to (d).

(a) A sale of mobile telecommunications services, other than air-to-ground radiotelephone service and prepaid calling service, is sourced to the customer's place of primary use as required by the Mobile Telecommunications Sourcing Act.

(b) A sale of postpaid calling service is sourced to the origination point of the telecommunications signal as first identified by either:

(1) the seller's telecommunications system; or

(2) information received by the seller from its service provider, where the system used to transport such signals is not that of the seller.

(c) A sale of prepaid calling service is sourced in accordance with section 297A.668, subdivision 2. However, in the case of a sale of mobile telecommunications service that is a prepaid telecommunications service, the rule provided in section 297A.668, subdivision 2, paragraph (f), shall include as an option the location associated with the mobile telephone number.

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(d) A sale of a private communication service is sourced as follows:

(1) service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which the customer channel termination point is located;

(2) service where all customer termination points are located entirely within one jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer channel termination points are located;

(3) service for segments of a channel between two customer channel termination points located in different jurisdictions and which segment of channel are separately charged is sourced 50 percent in each level of jurisdiction in which the customer channel termination points are located; and

(4) service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in the jurisdiction by the total number of customer channel termination points.

Subd. 4. [AIR-TO-GROUND RADIOTELEPHONE SERVICE.] "Air-to-ground radiotelephone service," for purposes of this section, means a radio service, as that term is defined in Code of Federal Regulations, title 47, section 22.99, in which common carriers are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft.

Subd. 5. [CALL-BY-CALL BASIS.] "Call-by-call basis," for purposes of this section, means any method of charging for telecommunications services where the price is measured by individual calls.

Subd. 6. [COMMUNICATIONS CHANNEL.] "Communications channel," for purposes of this section, means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.

Subd. 7. [CUSTOMER.] "Customer," for purposes of this section, means the person or entity that contracts with the seller of telecommunications services. If the end user of telecommunications services is not the contracting party, the end user of the telecommunications service is the customer of the telecommunication service, but this sentence applies only for the purpose of sourcing sales of telecommunications services under this section. Customer does not include a reseller of telecommunications service or for mobile telecommunications service of a serving carrier under an agreement to serve the customer outside the home service provider's licensed service area.

Subd. 8. [CUSTOMER CHANNEL TERMINATION POINT.] "Customer channel termination point," for purposes of this section, means the location where the customer either inputs or receives the communications.

Subd. 9. [END USER.] "End user," for purposes of this section, means the person who utilizes the telecommunication service. In the case of an entity, end user means the individual who utilizes the service on behalf of the entity.

Subd. 10. [HOME SERVICE PROVIDER.] "Home service provider," for purposes of this section, means the same as that term is defined in Section 124(5) of Public Law 106-252 (Mobile Telecommunications Sourcing Act).

Subd. 11. [MOBILE TELECOMMUNICATIONS SERVICE.] "Mobile telecommunications service," for purposes of this section, means the same as that term is defined in Section 124(1) of Public Law 106-252 (Mobile Telecommunications Sourcing Act).

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Subd. 12. [PLACE OF PRIMARY USE.] "Place of primary use," for purposes of this section, means the street address representative of where the customer's use of the telecommunications service primarily occurs, which must be the residential street address or the primary business street address of the customer. In the case of mobile telecommunications services, place of primary use must be within the licensed service area of the home service provider.

Subd. 13. [POSTPAID CALLING SERVICE.] "Postpaid calling service," for purposes of this section, means the telecommunications service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or by a charge made to a telephone number that is not associated with the origination or termination of the telecommunications service. A postpaid calling service includes a telecommunications service that would be a prepaid calling service except it is not exclusively a telecommunication service.

Subd. 14. [PREPAID CALLING SERVICE.] "Prepaid calling service," for purposes of this section, means the right to access exclusively telecommunications services, which must be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount.

Subd. 15. [PRIVATE COMMUNICATION SERVICES.] "Private communication services," for purposes of this section, means the same as that term is defined in section 297A.61, subdivision 26.

Subd. 16. [SERVICE ADDRESS.] "Service address," for purposes of this section, means:

(1) the location of the telecommunications equipment to which a customer's call is charged and from which the call originates or terminates, regardless of where the call is billed or paid;

(2) if the location in paragraph (a) is not known, service address means the origination point of the signal of the telecommunications services first identified by either the seller's telecommunications system or in information received by the seller from its service provider, where the system used to transport the signals is not that of the seller; or

(3) if the location in paragraphs (a) and (b) is not known, the service address means the location of the customer's place of primary use.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 21. Minnesota Statutes 2002, section 297A.67, subdivision 8, is amended to read:

Subd. 8. [CLOTHING.] (a) Clothing is exempt. For purposes of this subdivision, "clothing" means all human wearing apparel suitable for general use.

(b) Clothing includes, but is not limited to, aprons, household and shop; athletic supporters; baby receiving blankets; bathing suits and caps; beach capes and coats; belts and suspenders; boots; coats and jackets; costumes; children and adult diapers, including disposable; ear muffs; footlets; formal wear; garters and garter belts; girdles; gloves and mittens for general use; hats and caps; hosiery; insoles for shoes; lab coats; neckties; overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes and shoe laces; slippers; sneakers; socks and stockings; steel-toed boots; underwear; uniforms, athletic and nonathletic; and wedding apparel.

(1) belt buckles sold separately;

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(2) costume masks sold separately;

(3) patches and emblems sold separately;

(4) sewing equipment and supplies, including but not limited to, knitting needles, patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles;

(5) sewing materials that become part of clothing, including but not limited to, buttons, fabric, lace, thread, yarn, and zippers;

(6) clothing accessories or equipment;

(7) sports or recreational equipment; and

(8) protective equipment.

Clothing also does not include apparel made from fur if a uniform definition of "apparel made from fur" is developed by the member states of the Streamlined Sales and Use Tax Agreement.

For purposes of this subdivision, "clothing accessories or equipment" means incidental items worn on the person or in conjunction with clothing. Clothing accessories and equipment include, but are not limited to, briefcases; cosmetics; hair notions, including barrettes, hair bows, and hairnets; handbags; handkerchiefs; jewelry; nonprescription sunglasses; umbrellas; wallets; watches; and wigs and hairpieces. "Sports or recreational equipment" means items designed for human use and worn in conjunction with an athletic or recreational activity that are not suitable for general use. Sports and recreational equipment includes, but is not limited to, ballet and tap shoes; cleated or spiked athletic shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf gloves; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins. "Protective equipment" means items for human wear and designed as protection of the wearer against injury or disease or as protection against damage or injury of other persons or property but not suitable for general use. Protective equipment includes, but is not limited to, breathing masks; clean room apparel and equipment; ear and hearing protectors; face shields; finger guards; hard hats; helmets; paint or dust respirators; protective gloves; safety glasses and goggles; safety belts; tool belts; and welders gloves and masks.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004."

Page 8, after line 28, insert:

"Sec. 23. Minnesota Statutes 2002, section 297A.68, subdivision 2, is amended to read:

Subd. 2. [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] (a) Materials stored, used, or consumed in industrial production of personal property intended to be sold ultimately at retail are exempt, whether or not the item so used becomes an ingredient or constituent part of the property produced. Materials that qualify for this exemption include, but are not limited to, the following:

(1) chemicals, including chemicals used for cleaning food processing machinery and equipment;

(2) materials, including chemicals, fuels, and electricity purchased by persons engaged in industrial production to treat waste generated as a result of the production process;

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(3) fuels, electricity, gas, and steam used or consumed in the production process, except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt if (i) it is in excess of the average climate control or lighting for the production area, and (ii) it is necessary to produce that particular product;

(4) petroleum products and lubricants;

(5) packaging materials, including returnable containers used in packaging food and beverage products;

(6) accessory tools, equipment, and other items that are separate detachable units with an ordinary useful life of less than 12 months used in producing a direct effect upon the product; and

(7) the following materials, tools, and equipment used in metalcasting: crucibles, thermocouple protection sheaths and tubes, stalk tubes, refractory materials, molten metal filters and filter boxes, degassing lances, and base blocks.

(b) This exemption does not include:

(1) machinery, equipment, implements, tools, accessories, appliances, contrivances and furniture and fixtures, except those listed in paragraph (a), clause (6); and

(2) petroleum and special fuels used in producing or generating power for propelling ready-mixed concrete trucks on the public highways of this state.

(c) Industrial production includes, but is not limited to, research, development, design or production of any tangible personal property, manufacturing, processing (other than by restaurants and consumers) of agricultural products (whether vegetable or animal), commercial fishing, refining, smelting, reducing, brewing, distilling, printing, mining, quarrying, lumbering, generating electricity ~~and~~, the production of road building materials, and the research, development, design, or production of computer software. Industrial production does not include painting, cleaning, repairing or similar processing of property except as part of the original manufacturing process.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 24. Minnesota Statutes 2002, section 297A.68, subdivision 5, is amended to read:

Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is exempt. The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and then refunded in the manner provided in section 297A.75.

"Capital equipment" means machinery and equipment purchased or leased, and used in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, or refining tangible personal property to be sold ultimately at retail if the machinery and equipment are essential to the integrated production process of manufacturing, fabricating, mining, or refining. Capital equipment also includes machinery and equipment used to electronically transmit results retrieved by a customer of an online computerized data retrieval system.

(b) Capital equipment includes, but is not limited to:

(1) machinery and equipment used to operate, control, or regulate the production equipment;

(2) machinery and equipment used for research and development, design, quality control, and testing activities;

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(3) environmental control devices that are used to maintain conditions such as temperature, humidity, light, or air pressure when those conditions are essential to and are part of the production process;

(4) materials and supplies used to construct and install machinery or equipment;

(5) repair and replacement parts, including accessories, whether purchased as spare parts, repair parts, or as upgrades or modifications to machinery or equipment;

(6) materials used for foundations that support machinery or equipment;

(7) materials used to construct and install special purpose buildings used in the production process; ~~and~~

(8) ready-mixed concrete trucks in which the ready-mixed concrete is mixed as part of the delivery process; and

(9) machinery or equipment used for research, development, design, or production of computer software.

(1) motor vehicles taxed under chapter 297B;

(2) machinery or equipment used to receive or store raw materials;

(3) building materials, except for materials included in paragraph (b), clauses (6) and (7);

(4) machinery or equipment used for nonproduction purposes, including, but not limited to, the following: plant security, fire prevention, first aid, and hospital stations; support operations or administration; pollution control; and plant cleaning, disposal of scrap and waste, plant communications, space heating, cooling, lighting, or safety;

(5) farm machinery and aquaculture production equipment as defined by section 297A.61, subdivisions 12 and 13;

(6) machinery or equipment purchased and installed by a contractor as part of an improvement to real property; or

(7) any other item that is not essential to the integrated process of manufacturing, fabricating, mining, or refining.

(d) For purposes of this subdivision:

(1) "Equipment" means independent devices or tools separate from machinery but essential to an integrated production process, including computers and computer software, used in operating, controlling, or regulating machinery and equipment; and any subunit or assembly comprising a component of any machinery or accessory or attachment parts of machinery, such as tools, dies, jigs, patterns, and molds.

(2) "Fabricating" means to make, build, create, produce, or assemble components or property to work in a new or different manner.

(3) "Machinery" means mechanical, electronic, or electrical devices, including computers and computer software, that are purchased or constructed to be used for the activities set forth in paragraph (a), beginning with the removal of raw materials from inventory through completion of the product, including packaging of the product.

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(4) "Machinery and equipment used for pollution control" means machinery and equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity described in paragraph (a).

(5) "Manufacturing" means an operation or series of operations where raw materials are changed in form, composition, or condition by machinery and equipment and which results in the production of a new article of tangible personal property. For purposes of this subdivision, "manufacturing" includes the generation of electricity or steam to be sold at retail.

(6) "Mining" means the extraction of minerals, ores, stone, or peat.

(7) "Online data retrieval system" means a system whose cumulation of information is equally available and accessible to all its customers.

(8) "Primarily" means machinery and equipment used 50 percent or more of the time in an activity described in paragraph (a).

(9) "Refining" means the process of converting a natural resource to a product, including the treatment of water to be sold at retail.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004."

Page 9, after line 5, insert:

"Sec. 26. Minnesota Statutes 2002, section 297A.75, subdivision 4, is amended to read:

Subd. 4. [INTEREST.] Interest must be paid on the refund at the rate in section 270.76 from the date the refund claim is filed for taxes paid under subdivision 1, clauses (1) to (3), and (5), and from 60 days after the date the refund claim is filed with the commissioner for claims filed under subdivision 1, clauses (4), (6), (7), (8), and (9) 90 days after the refund claim is filed with the commissioner for taxes paid under subdivision 1.

[EFFECTIVE DATE.] This section is effective for refund claims filed on or after April 1, 2003.

Sec. 27. Minnesota Statutes 2002, section 297A.81, is amended to read:

297A.81 [UNCOLLECTIBLE DEBTS; OFFSET AGAINST OTHER TAXES.]

Subdivision 1. [GENERAL.] The taxpayer may offset against the taxes payable for any reporting period the amount of taxes imposed by this chapter previously paid as a result of any transaction the consideration for which became a debt owed to the taxpayer that became uncollectible during the reporting period, but only in proportion to the portion of the debt that became uncollectible. Section 289A.40, subdivision 2, applies to an offset under this section.

Subd. 2. [MANNER OF ALLOWING DEDUCTION FOR UNCOLLECTIBLE DEBT.] (a) Uncollectible debt is allowed as a deduction in the manner provided in this subdivision.

(b) If the uncollectible debt arose with respect to a sale required to be included in gross receipts, subject to a tax imposed under chapter 297A, the entire amount of the debt remaining uncollected is allowed as a deduction.

(c) If the uncollectible debt arose with respect to a sale partly subject to the tax imposed under chapter 297A and partly exempt, the amount of the uncollectible debt allowed as a deduction is the amount derived by multiplying the uncollectible debt by the percentage that the taxable sale bears to the total sales.

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(d) If the uncollectible debt arose with respect to two or more sales made at successive intervals, payments made before the date the debt became uncollectible must be applied first to the earliest sale upon which there is an unpaid balance, and to following sales in successive order.

(e) If the books and records of the taxpayer claiming the bad debt allowance support an allocation of the bad debts among the member states of the streamlined sales and use tax agreement, such an allocation shall be allowed.

Subd. 3. [CERTIFIED SERVICE PROVIDER.] A certified service provider, as defined in section 297A.995, subdivision 2, on behalf of a taxpayer who is its client, may offset against taxes as provided by this section.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 28. Minnesota Statutes 2002, section 297A.99, subdivision 5, is amended to read:

Subd. 5. [TAX RATE.] (a) The tax rate is as specified in the special law authorization and as imposed by the political subdivision.

(b) The full political subdivision rate applies to any sales that are taxed at a state rate ~~less than or more than the state general sales and use tax rate.~~, and the political subdivision must not have more than one local sales tax rate or more than one local use tax rate. This paragraph does not apply to sales or use taxes imposed on electricity, piped natural or artificial gas, or other heating fuels delivered by the seller, or the retail sale or transfer of motor vehicles, aircraft, watercraft, modular homes, manufactured homes, or mobile homes.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 29. Minnesota Statutes 2002, section 297A.99, subdivision 10, is amended to read:

Subd. 10. [USE OF ZIP CODE IN DETERMINING LOCATION OF SALE.] To determine whether to impose the local tax, the retailer may use zip codes if the zip code area is entirely within the political subdivision. When a zip code area is not entirely within a political subdivision, the retailer shall not collect the local tax if the purchaser notifies the retailer that the purchaser's delivery address is outside of the political subdivision, unless the retailer verifies that the delivery address is in the political subdivision using a means other than the zip code. The lowest combined tax rate imposed in the zip code area applies if the area includes more than one tax rate in any level of taxing jurisdictions. If a nine-digit zip code designation is not available for a street address or if a seller is unable to determine the nine-digit zip code designation of a purchaser after exercising due diligence to determine the designation, the seller may apply the rate for the five-digit zip code area. For the purposes of this subdivision, there is a rebuttable presumption that a seller has exercised due diligence if the seller has attempted to determine the nine-digit zip code designation by utilizing software approved by the governing board that makes this designation from the street address and the five-digit zip code of the purchaser. Notwithstanding subdivision 13, this subdivision applies to all local sales taxes without regard to the date of authorization. This subdivision does not apply when the purchased product is received by the purchaser at the business location of the seller.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 30. Minnesota Statutes 2002, section 297A.99, subdivision 12, is amended to read:

Subd. 12. [EFFECTIVE DATES; NOTIFICATION.] (a) A political subdivision may impose a tax under this section starting only on the first day of a calendar quarter. A political subdivision may repeal a tax under this section stopping only on the last day of a calendar quarter.

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(b) The political subdivision shall notify the commissioner of revenue at least 90 days before imposing, changing the rate of, or repealing a tax under this section.

(c) The political subdivision shall change the rate of tax imposed under this section starting only on the first day of a calendar quarter, and only after the commissioner has notified sellers at least 60 days prior to the change.

(d) The political subdivision shall apply the rate change for sales tax imposed under this section to purchases from printed catalogs, wherein the purchaser computed the tax based upon local tax rates published in the catalog, starting only on the first day of a calendar quarter, and only after the commissioner has notified sellers at least 120 days prior to the change.

(e) The political subdivision shall apply local jurisdiction boundary changes to taxes imposed under this section starting only on the first day of a calendar quarter, and only after the commissioner has notified sellers at least 60 days prior to the change.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004.

Sec. 31. Minnesota Statutes 2002, section 297A.995, is amended by adding a subdivision to read:

Subd. 10. [RELIEF FROM CERTAIN LIABILITY.] Notwithstanding subdivision 9, sellers and certified service providers are relieved from liability to the state for having charged and collected the incorrect amount of sales or use tax resulting from the seller or certified service provider (1) relying on erroneous data provided by this state on tax rates, boundaries, or taxing jurisdiction assignments, or (2) relying on erroneous data provided by the state in its taxability matrix concerning the taxability of products and services.

[EFFECTIVE DATE.] This section is effective for sales and purchases made on or after January 1, 2004."

Page 10, after line 6, insert:

"(a) Minnesota Statutes 2002, section 297A.61, subdivisions 14 and 15, are repealed effective for sales and purchases made on or after January 1, 2004.

(b) Minnesota Statutes 2002, section 297A.69, subdivision 5, is repealed effective January 1, 2006."

Page 10, line 7, before "Laws" insert "(c)"

Page 10, after line 11, insert:

"Section 1. [123A.455] [REALIGNING SPLIT RESIDENTIAL PARCELS.]

Subdivision 1. [DEFINITIONS.] "Split residential property parcel" means a parcel of real estate that is located within the boundaries of more than one school district and that is classified as residential property under:

(1) section 273.13, subdivision 22, paragraph (a) or (b);

(2) section 273.13, subdivision 25, paragraph (b), clause (1); or

(3) section 273.13, subdivision 25, paragraph (c), clause (1).

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Subd. 2. [PETITION.] The owner of a split residential property parcel may petition the auditor of the county where the split parcel is located to transfer that part into the adjoining school district so the entire property will be located in the same school district. The petition must contain:

(1) a correct description of the split parcel to be affected by the transfer including supporting data on location and title to the land;

(2) a list of the school districts in which the split parcels currently lie;

(3) the school district into which the petitioner desires to have the whole split parcel transferred; and

(4) the district of attendance of any students currently residing on the property.

Subd. 3. [AUDITOR'S ORDER.] Within 60 days of receipt of the petition, the auditor of the county in which the petition was filed under subdivision 2 shall issue an order to transfer the affected parcel to the district determined by the county board. Orders issued on or before July 1 will be effective for taxes payable in the following year. The auditor must notify the affected school districts and the commissioner of the change in school district boundaries.

Subd. 4. [COMMISSIONER.] The commissioner shall modify the records of school district boundaries to conform to the order.

Subd. 5. [TAXABLE PROPERTY.] Upon the effective date of the order, the whole split property parcel is transferred into a single school district. Beginning in the next subsequent taxes payable year, all taxable property in the whole split parcel is:

(1) relieved of all school district taxes from the district in which the parcel is no longer located; and

(2) subject to all school district taxes in the district in which the whole split parcel is now located.

[EFFECTIVE DATE.] This section is effective for petitions filed on or after the day following final enactment. Orders issued under subdivision 3 on or before September 15, 2003, are effective for taxes payable in 2004.

Sec. 2. Minnesota Statutes 2002, section 168A.05, subdivision 1a, is amended to read:

Subd. 1a. [MANUFACTURED HOME; STATEMENT OF PROPERTY TAX PAYMENT.] In the case of a manufactured home as defined in section 327.31, subdivision 6, the department shall not issue a certificate of title unless the application under section 168A.04 is accompanied with a statement from the county auditor or county treasurer where the manufactured home is presently located, stating that all manufactured home personal property taxes levied on the unit ~~that are due from~~ in the name of the current owner at the time of transfer ~~for which the application applies,~~ have been paid.

[EFFECTIVE DATE.] This section is effective for certificates of title issued by the department on or after July 1, 2003."

Page 17, after line 28, insert:

"Sec. 12. Minnesota Statutes 2002, section 273.124, subdivision 14, is amended to read:

Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] (a) Real estate of less than ten acres that is the homestead of its owner must be classified as class 2a under section 273.13, subdivision 23, paragraph (a), if:

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(1) the parcel on which the house is located is contiguous on at least two sides to (i) agricultural land, (ii) land owned or administered by the United States Fish and Wildlife Service, or (iii) land administered by the department of natural resources on which in lieu taxes are paid under sections 477A.11 to 477A.14;

(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20 acres;

(3) the noncontiguous land is located not farther than four townships or cities, or a combination of townships or cities from the homestead; and

(4) the agricultural use value of the noncontiguous land and farm buildings is equal to at least 50 percent of the market value of the house, garage, and one acre of land.

Homesteads initially classified as class 2a under the provisions of this paragraph shall remain classified as class 2a, irrespective of subsequent changes in the use of adjoining properties, as long as the homestead remains under the same ownership, the owner owns a noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use value qualifies under clause (4). Homestead classification under this paragraph is limited to property that qualified under this paragraph for the 1998 assessment.

(b)(i) Agricultural property consisting of at least 40 acres shall be classified as the owner's homestead, to the same extent as other agricultural homestead property, if all of the following criteria are met:

(1) the owner, the owner's spouse, or the son or daughter of the owner or owner's spouse, is actively farming the agricultural property, either on the person's own behalf as an individual or on behalf of a partnership operating a family farm, family farm corporation, joint family farm venture, or limited liability company of which the person is a partner, shareholder, or member;

(2) both the owner of the agricultural property and the person who is actively farming the agricultural property under clause (1), are Minnesota residents;

(3) neither the owner nor the spouse of the owner claims another agricultural homestead in Minnesota; and

(4) neither the owner nor the person actively farming the property lives farther than four townships or cities, or a combination of four townships or cities, from the agricultural property, except that if the owner or the owner's spouse is required to live in employer-provided housing, the owner or owner's spouse, whichever is actively farming the agricultural property, may live more than four townships or cities, or combination of four townships or cities from the agricultural property.

The relationship under this paragraph may be either by blood or marriage.

(ii) Real property held by a trustee under a trust is eligible for agricultural homestead classification under this paragraph if the qualifications in clause (i) are met, except that "owner" means the grantor of the trust.

(iii) Property containing the residence of an owner who owns qualified property under clause (i) shall be classified as part of the owner's agricultural homestead, if that property is also used for noncommercial storage or drying of agricultural crops.

(c) Noncontiguous land shall be included as part of a homestead under section 273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a and the detached land is located in the same township or city, or not farther than four townships or cities or combination thereof from the homestead. Any taxpayer of these noncontiguous lands must notify the county assessor that the noncontiguous land is part of the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer must also notify the assessor of the other county.

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(d) Agricultural land used for purposes of a homestead and actively farmed by a person holding a vested remainder interest in it must be classified as a homestead under section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, any other dwellings on the land used for purposes of a homestead by persons holding vested remainder interests who are actively engaged in farming the property, and up to one acre of the land surrounding each homestead and reasonably necessary for the use of the dwelling as a home, must also be assessed class 2a.

(e) Agricultural land and buildings that were class 2a homestead property under section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain classified as agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural homestead as a result of the April 1997 floods;

(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or Wilkin;

(3) the agricultural land and buildings remain under the same ownership for the current assessment year as existed for the 1997 assessment year and continue to be used for agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 1997 floods, and the owner furnishes the assessor any information deemed necessary by the assessor in verifying the change in dwelling. Further notifications to the assessor are not required if the property continues to meet all the requirements in this paragraph and any dwellings on the agricultural land remain uninhabited.

(f) Agricultural land and buildings that were class 2a homestead property under section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain classified agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural homestead as a result of damage caused by a March 29, 1998, tornado;

(2) the property is located in the county of Blue Earth, Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice;

(3) the agricultural land and buildings remain under the same ownership for the current assessment year as existed for the 1998 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to a March 29, 1998, tornado, and the owner furnishes the assessor any information deemed necessary by the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the owner must notify the assessor by December 1, 1998. Further notifications to the assessor are not required if the property continues to meet all the requirements in this paragraph and any dwellings on the agricultural land remain uninhabited.

(g) Agricultural property consisting of at least 40 acres of a family farm corporation, joint family farm venture, family farm limited liability company, or partnership operating a family farm as described under subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead property, if all of the following criteria are met:

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(1) a shareholder, member, or partner of that entity is actively farming the agricultural property;

(2) that shareholder, member, or partner who is actively farming the agricultural property is a Minnesota resident;

(3) neither that shareholder, member, or partner, nor the spouse of that shareholder, member, or partner claims another agricultural homestead in Minnesota; and

(4) that shareholder, member, or partner does not live farther than four townships or cities, or a combination of four townships or cities, from the agricultural property.

Homestead treatment applies under this paragraph for property leased to a family farm corporation, joint farm venture, limited liability company, or partnership operating a family farm if legal title to the property is in the name of an individual who is a member, shareholder, or partner in the entity.

(h) To be eligible for the special agricultural homestead under this subdivision, an initial full application must be submitted to the county assessor where the property is located. Owners and the persons who are actively farming the property shall be required to complete only a one-page abbreviated version of the application in each subsequent year provided that none of the following items have changed since the initial application:

(1) the day-to-day operation, administration, and financial risks remain the same;

(2) the owners and the persons actively farming the property continue to live within the four townships or city criteria and are Minnesota residents;

(3) the same operator of the agricultural property is listed with the farm service agency;

(4) a Schedule F or equivalent income tax form was filed for the most recent year;

(5) the property's acreage is unchanged; and

(6) none of the property's acres have been enrolled in a federal or state farm program since the initial application.

The owners and any persons who are actively farming the property must include the appropriate social security numbers, and sign and date the application. If any of the specified information has changed since the full application was filed, the owner must notify the assessor, and must complete a new application to determine if the property continues to qualify for the special agricultural homestead. The commissioner of revenue shall prepare a standard reapplication form for use by the assessors.

[EFFECTIVE DATE.] This section is effective for applications filed for the 2004 assessment and thereafter."

Page 17, delete section 10 and insert:

"Sec. 13. Minnesota Statutes 2002, section 273.13, subdivision 22, is amended to read:

Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 23 and in paragraphs (b) and (c), real estate which is residential and used for homestead purposes is class 1a. In the case of a duplex or triplex in which one of the units is used for homestead purposes, the entire property is deemed to be used for homestead purposes. The market value of class 1a property must be determined based upon the value of the house, garage, and land.

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The first $500,000 of market value of class 1a property has a net class rate of one percent of its market value; and the market value of class 1a property that exceeds $500,000 has a class rate of 1.25 percent of its market value.

(b) Class 1b property includes homestead real estate or homestead manufactured homes used for the purposes of a homestead by

(1) any ~~blind~~ person who is blind as defined in section 256D.35, or the blind person and the blind person's spouse; or

(2) any person, hereinafter referred to as "veteran," who:

(i) served in the active military or naval service of the United States; and

(ii) is entitled to compensation under the laws and regulations of the United States for permanent and total service-connected disability due to the loss, or loss of use, by reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or a wheelchair; and

(iii) has acquired a special housing unit with special fixtures or movable facilities made necessary by the nature of the veteran's disability, or the surviving spouse of the deceased veteran for as long as the surviving spouse retains the special housing unit as a homestead; or

(3) any person who:

~~(i)~~ is permanently and totally disabled ~~and~~

~~(ii) receives 90 percent or more of total household income, as defined in section 290A.03, subdivision 5, from~~

~~(A) aid from any state as a result of that disability; or~~

~~(B) supplemental security income for the disabled; or~~

~~(C) workers' compensation based on a finding of total and permanent disability; or~~

~~(D) social security disability, including the amount of a disability insurance benefit which is converted to an old age insurance benefit and any subsequent cost of living increases; or~~

~~(E) aid under the federal Railroad Retirement Act of 1937, United States Code Annotated, title 45, section 228b(a)5; or~~

~~(F) a pension from any local government retirement fund located in the state of Minnesota as a result of that disability; or~~

~~(G) pension, annuity, or other income paid as a result of that disability from a private pension or disability plan, including employer, employee, union, and insurance plans and~~

~~(iii) has household income as defined in section 290A.03, subdivision 5, of $50,000 or less; or~~

~~(4) any person who is permanently and totally disabled and whose household income as defined in section 290A.03, subdivision 5, is 275 percent or less of the federal poverty level~~.

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Property is classified and assessed under clause ~~(4)~~ (3) only if the government agency or income-providing source certifies, upon the request of the homestead occupant, that the homestead occupant satisfies the disability requirements of this paragraph.

Property is classified and assessed pursuant to clause (1) only if the commissioner of ~~economic security~~ revenue certifies to the assessor that the homestead occupant satisfies the requirements of this paragraph.

Permanently and totally disabled for the purpose of this subdivision means a condition which is permanent in nature and totally incapacitates the person from working at an occupation which brings the person an income. The first $32,000 market value of class 1b property has a net class rate of .45 percent of its market value. The remaining market value of class 1b property has a class rate using the rates for class 1a or class 2a property, whichever is appropriate, of similar market value.

(c) Class 1c property is commercial use real property that abuts a lakeshore line and is devoted to temporary and seasonal residential occupancy for recreational purposes but not devoted to commercial purposes for more than 250 days in the year preceding the year of assessment, and that includes a portion used as a homestead by the owner, which includes a dwelling occupied as a homestead by a shareholder of a corporation that owns the resort or, a partner in a partnership that owns the resort, or a member of a limited liability company that owns the resort even if the title to the homestead is held by the corporation or, partnership, or limited liability company. For purposes of this clause, property is devoted to a commercial purpose on a specific day if any portion of the property, excluding the portion used exclusively as a homestead, is used for residential occupancy and a fee is charged for residential occupancy. The first $500,000 of market value of class 1c property has a class rate of one percent, and the remaining market value of class 1c property has a class rate of one percent, with the following limitation: the area of the property must not exceed 100 feet of lakeshore footage for each cabin or campsite located on the property up to a total of 800 feet and 500 feet in depth, measured away from the lakeshore. If any portion of the class 1c resort property is classified as class 4c under subdivision 25, the entire property must meet the requirements of subdivision 25, paragraph (d), clause (1), to qualify for class 1c treatment under this paragraph.

(d) Class 1d property includes structures that meet all of the following criteria:

(1) the structure is located on property that is classified as agricultural property under section 273.13, subdivision 23;

(2) the structure is occupied exclusively by seasonal farm workers during the time when they work on that farm, and the occupants are not charged rent for the privilege of occupying the property, provided that use of the structure for storage of farm equipment and produce does not disqualify the property from classification under this paragraph;

(3) the structure meets all applicable health and safety requirements for the appropriate season; and

(4) the structure is not salable as residential property because it does not comply with local ordinances relating to location in relation to streets or roads.

The market value of class 1d property has the same class rates as class 1a property under paragraph (a).

[EFFECTIVE DATE.] This section is effective for property taxes levied in 2003, payable in 2004, and thereafter, except that the amendments to paragraph (b) are effective for taxes payable in 2005 and thereafter.

Sec. 14. Minnesota Statutes 2002, section 273.13, subdivision 23, is amended to read:

Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural land including any improvements that is homesteaded. The market value of the house and garage and immediately surrounding one acre of land has the same class rates as class 1a property under subdivision 22. The value of the remaining land including improvements up to and including $600,000 market value has a net class rate of 0.55 percent of market value. The remaining property over $600,000 market value has a class rate of one percent of market value.

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(b) Class 2b property is (1) real estate, rural in character and used exclusively for growing trees for timber, lumber, and wood and wood products; (2) real estate that is not improved with a structure and is used exclusively for growing trees for timber, lumber, and wood and wood products, if the owner has participated or is participating in a cost-sharing program for afforestation, reforestation, or timber stand improvement on that particular property, administered or coordinated by the commissioner of natural resources; (3) real estate that is nonhomestead agricultural land; or (4) a landing area or public access area of a privately owned public use airport. Class 2b property has a net class rate of one percent of market value.

(c) Agricultural land as used in this section means contiguous acreage of ten acres or more, used during the preceding year for agricultural purposes. "Agricultural purposes" as used in this section means the raising or cultivation of agricultural products. "Agricultural purposes" also includes or enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public Law ~~Number~~ 99-198 if the property was classified as agricultural (i) under this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage on the same parcel, or contiguous acreage on an immediately adjacent parcel under the same ownership, may also qualify as agricultural land, but only if it is pasture, timber, waste, unusable wild land, or land included in state or federal farm programs. Agricultural classification for property shall be determined excluding the house, garage, and immediately surrounding one acre of land, and shall not be based upon the market value of any residential structures on the parcel or contiguous parcels under the same ownership.

(d) Real estate, excluding the house, garage, and immediately surrounding one acre of land, of less than ten acres which is exclusively and intensively used for raising or cultivating agricultural products, shall be considered as agricultural land.

Land shall be classified as agricultural even if all or a portion of the agricultural use of that property is the leasing to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative for qualifying under section 273.111.

The property classification under this section supersedes, for property tax purposes only, any locally administered agricultural policies or land use restrictions that define minimum or maximum farm acreage.

(e) The term "agricultural products" as used in this subdivision includes production for sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing animals, horticultural and nursery stock described in sections 18.44 to 18.61, fruit of all kinds, vegetables, forage, grains, bees, and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned for agricultural use;

(3) the commercial boarding of horses if the boarding is done in conjunction with raising or cultivating agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood products; and

Journal of the House - 59th Day - Monday, May 19, 2003 - Top of Page 3921

(8) maple syrup taken from trees grown by a person licensed by the Minnesota department of agriculture under chapter 28A as a food processor.

(f) If a parcel used for agricultural purposes is also used for commercial or industrial purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2), and (3),

the assessor shall classify the part of the parcel used for agricultural purposes as class 1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its use. The grading, sorting, and packaging of raw agricultural products for first sale is considered an agricultural purpose. A greenhouse or other building where horticultural or nursery products are grown that is also used for the conduct of retail sales must be classified as agricultural if it is primarily used for the growing of horticultural or nursery products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of those products. Use of a greenhouse or building only for the display of already grown horticultural or nursery products does not qualify as an agricultural purpose.

The assessor shall determine and list separately on the records the market value of the homestead dwelling and the one acre of land on which that dwelling is located. If any farm buildings or structures are located on this homesteaded acre of land, their market value shall not be included in this separate determination.

(g) To qualify for classification under paragraph (b), clause (4), a privately owned public use airport must be licensed as a public airport under section 360.018. For purposes of paragraph (b), clause (4), "landing area" means that part of a privately owned public use airport properly cleared, regularly maintained, and made available to the public for use by aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. A landing area also includes land underlying both the primary surface and the approach surfaces that comply with all of the following:

(i) the land is properly cleared and regularly maintained for the primary purposes of the landing, taking off, and taxiing of aircraft; but that portion of the land that contains facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

The land contained in a landing area under paragraph (b), clause (4), must be described and certified by the commissioner of transportation. The certification is effective until it is modified, or until the airport or landing area no longer meets the requirements of paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area" means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival and departure building in connection with the airport.

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

Journal of the House - 59th Day - Monday, May 19, 2003 - Top of Page 3922

Sec. 15. Minnesota Statutes 2002, section 273.1315, is amended to read:

273.1315 [CERTIFICATION OF 1B PROPERTY.]

Any property owner seeking classification and assessment of the owner's homestead as class 1b property pursuant to section 273.13, subdivision 22, paragraph (b), ~~clause (2) or (3),~~ shall file with the commissioner of revenue ~~for each assessment year~~ a 1b homestead declaration, on a form prescribed by the commissioner. The declaration shall contain the following information:

(a) the information necessary to verify that the property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision 22, paragraph (b), ~~clause (2) or (3),~~ for 1b classification; and

(b) ~~the property owner's household income, as defined in section 290A.03, for the previous calendar year; and~~

~~(c)~~ any additional information prescribed by the commissioner.

The declaration ~~shall~~ must be filed on or before ~~March~~ October 1 ~~of each year~~ to be effective for property taxes payable during the succeeding calendar year. The declaration and any supplementary information received from the property owner pursuant to this section shall be subject to chapter 270B. If approved by the commissioner, the declaration remains in effect until the property no longer qualifies under section 273.13, subdivision 22, paragraph (b). Failure to notify the commissioner within 30 days that the property no longer qualifies under that paragraph because of a sale, change in occupancy, or change in the status or condition of an occupant shall result in the penalty provided in section 273.124, subdivision 13, computed on the basis of the class 1b benefits for the property, and the property shall lose its current class 1b classification.

The commissioner shall provide to the assessor on or before ~~April~~ November 1 a listing of the parcels of property qualifying for 1b classification.

[EFFECTIVE DATE.] This section is effective for taxes payable in 2005 and thereafter.

Sec. 16. [274.014] [LOCAL BOARDS; APPEALS AND EQUALIZATION COURSE AND MEETING REQUIREMENTS.]

Subdivision 1. [HANDBOOK FOR LOCAL BOARDS.] By no later than January 1, 2005, the commissioner of revenue must develop a handbook detailing procedures, responsibilities, and requirements for local boards of appeal and equalization. The handbook must include, but need not be limited to, the role of the local board in the assessment process, the legal and policy reasons for fair and impartial appeal and equalization hearings, local board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations, quorum requirements for local boards, and explanations of alternate methods of appeal.

Subd. 2. [APPEALS AND EQUALIZATION COURSE.] By no later than January 1, 2006, and each year thereafter, there must be at least one member at each meeting of a local board of appeal and equalization who has attended an appeals and equalization course developed or approved by the commissioner within the last four years, as certified by the commissioner. The course may be offered in conjunction with a meeting of the Minnesota League of Cities or the Minnesota Association of Townships. The course content must include, but need not be limited to, a review of the handbook developed by the commissioner under subdivision 1.

Subd. 3. [PROOF OF COMPLIANCE; TRANSFER OF DUTIES.] Any city or town that does not provide proof to the county assessor by December 1, 2006, and each year thereafter, that it is in compliance with the requirements of subdivision 2, and that it had a quorum at each meeting of the board of appeal and equalization in the prior year, is deemed to have transferred its board of appeal and equalization powers to the county under section 274.01, subdivision 3, for the following year's assessment.

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The county shall notify the taxpayers when the board of appeal and equalization for a city or town has been transferred to the county under this subdivision and, prior to the meeting time of the county board of equalization, the county shall make available to those taxpayers a procedure for a review of the assessments, including, but not limited to, open book meetings. This alternate review process shall take place in April and May.

A local board whose powers are transferred to the county under this subdivision may be reinstated by resolution of the governing body of the city or town and upon proof of compliance with the requirements of subdivision 2. The resolution and proofs must be provided to the county assessor by December 1 in order to be effective for the following year's assessment.

[EFFECTIVE DATE.] This section is effective the day following final enactment."

Page 21, delete section 11 and insert:

"Sec. 17. [275.75] [CHARTER EXEMPTION FOR AID LOSS.]

Notwithstanding any other provision of a municipal charter that limits ad valorem taxes to a lesser amount, or that would require voter approval for any increase, the governing body of a municipality may by resolution increase its levy for taxes payable in 2004 and 2005 only by an amount equal to the reduction in the amount of aid it is certified to receive under sections 477A.011 to 477A.03 for that same payable year compared to the amount certified for payment in 2003."

Page 22, after line 9, insert:

"Sec. 19. Minnesota Statutes 2002, section 278.05, subdivision 6, is amended to read:

Subd. 6. [DISMISSAL OF PETITION; EXCLUSION OF CERTAIN EVIDENCE.] (a) Information, including income and expense figures, verified net rentable areas, and anticipated income and expenses, for income-producing property must be provided to the county assessor ~~within 60 days after the petition has been filed under this chapter~~ no later than 60 days after the applicable filing deadline contained in section 278.01, subdivision 1 or 4. Failure to provide the information required in this paragraph shall result in the dismissal of the petition, unless (1) the failure to provide it was due to the unavailability of the evidence at ~~that~~ the time that the information was due, or (2) the petitioner was not aware of or informed of the requirement to provide the information.

If the petitioner proves that the requirements under clause (2) are met, the petitioner has an additional 30 days to provide the information from the time the petitioner became aware of or was informed of the requirement to provide the information, otherwise the petition shall be dismissed.

(b) Provided that the information as contained in paragraph (a) is timely submitted to the county assessor, the county assessor shall furnish the petitioner at least five days before the hearing under this chapter with the property's appraisal, if any, which will be presented to the court at the hearing. The petitioner shall furnish to the county assessor at least five days before the hearing under this chapter with the property's appraisal, if any, which will be presented to the court at the hearing. An appraisal of the petitioner's property done by or for the county shall not be admissible as evidence if the county assessor does not comply with the provisions in this paragraph. The petition shall be dismissed if the petitioner does not comply with the provisions in this paragraph.

[EFFECTIVE DATE.] This section is effective for petitions filed on or after July 1, 2003."

Journal of the House - 59th Day - Monday, May 19, 2003 - Top of Page 3924

Page 27, after line 29, insert:

"Sec. 6. Minnesota Statutes 2002, section 290.01, subdivision 19a, is amended to read:

Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For individuals, estates, and trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political or governmental subdivision, municipality, or governmental agency or instrumentality of any state other than Minnesota exempt from federal income taxes under the Internal Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code, except the portion of the exempt-interest dividends derived from interest income on obligations of the state of Minnesota or its political or governmental subdivisions, municipalities, governmental agencies or instrumentalities, but only if the portion of the exempt-interest dividends from such Minnesota sources paid to all shareholders represents 95 percent or more of the exempt-interest dividends that are paid by the regulated investment company as defined in section 851(a) of the Internal Revenue Code, or the fund of the regulated investment company as defined in section 851(g) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal government described in section 7871(c) of the Internal Revenue Code shall be treated as interest income on obligations of the state in which the tribe is located;

(2) the amount of income taxes paid or accrued within the taxable year under this chapter and income taxes paid to any other state or to any province or territory of Canada, to the extent allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not be more than the amount by which the itemized deductions as allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the disallowance of itemized deductions under section 68 of the Internal Revenue Code of 1986, income tax is the last itemized deduction disallowed;

(3) the capital gain amount of a lump sum distribution to which the special tax under section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law ~~Number~~ 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this chapter and income taxes paid to any other state or any province or territory of Canada, to the extent allowed as a deduction in determining federal adjusted gross income. For the purpose of this paragraph, income taxes do not include the taxes imposed by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10;

(6) the amount of a partner's pro rata share of net income which does not flow through to the partner because the partnership elected to pay the tax on the income under section 6242(a)(2) of the Internal Revenue Code; and

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that in the taxable year generates a deduction for depreciation under section 168(k) and the activity generates a loss for the taxable year that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is limited to excess of the depreciation claimed by the activity under section 168(k) over the amount of the loss from the activity that is not allowed in the taxable year. In succeeding taxable years when the losses not allowed in the taxable year are allowed, the depreciation under section 168(k) is allowed.

[EFFECTIVE DATE.] This section is effective for taxable years ending after September 10, 2001."

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Page 30, after line 28, insert:

"Sec. 8. Minnesota Statutes 2002, section 290.01, subdivision 19c, is amended to read:

Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE INCOME.] For corporations, there shall be added to federal taxable income:

(1) the amount of any deduction taken for federal income tax purposes for income, excise, or franchise taxes based on net income or related minimum taxes, including but not limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, another state, a political subdivision of another state, the District of Columbia, or any foreign country or possession of the United States;

(2) interest not subject to federal tax upon obligations of: the United States, its possessions, its agencies, or its instrumentalities; the state of Minnesota or any other state, any of its political or governmental subdivisions, any of its municipalities, or any of its governmental agencies or instrumentalities; the District of Columbia; or Indian tribal governments;

(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal Revenue Code;

(4) the amount of any net operating loss deduction taken for federal income tax purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss deduction under section 810 of the Internal Revenue Code;

(5) the amount of any special deductions taken for federal income tax purposes under sections 241 to 247 of the Internal Revenue Code;

(6) losses from the business of mining, as defined in section 290.05, subdivision 1, clause (a), that are not subject to Minnesota income tax;

(7) the amount of any capital losses deducted for federal income tax purposes under sections 1211 and 1212 of the Internal Revenue Code;

(8) the exempt foreign trade income of a foreign sales corporation under sections 921(a) and 291 of the Internal Revenue Code;

(9) the amount of percentage depletion deducted under sections 611 through 614 and 291 of the Internal Revenue Code;

(10) for certified pollution control facilities placed in service in a taxable year beginning before December 31, 1986, and for which amortization deductions were elected under section 169 of the Internal Revenue Code of 1954, as amended through December 31, 1985, the amount of the amortization deduction allowed in computing federal taxable income for those facilities;

(11) the amount of any deemed dividend from a foreign operating corporation determined pursuant to section 290.17, subdivision 4, paragraph (g);

(12) the amount of any environmental tax paid under section 59(a) of the Internal Revenue Code;

(13) the amount of a partner's pro rata share of net income which does not flow through to the partner because the partnership elected to pay the tax on the income under section 6242(a)(2) of the Internal Revenue Code;

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(14) the amount of net income excluded under section 114 of the Internal Revenue Code;

(15) any increase in subpart F income, as defined in section 952(a) of the Internal Revenue Code, for the taxable year when subpart F income is calculated without regard to the provisions of section 614 of Public Law Number 107-147; and

(16) 80 percent of the depreciation deduction allowed under section 168(k) of the Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that in the taxable year generates a deduction for depreciation under section 168(k) and the activity generates a loss for the taxable year that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is limited to excess of the depreciation claimed by the activity under section 168(k) over the amount of the loss from the activity that is not allowed in the taxable year. In succeeding taxable years when the losses not allowed in the taxable year are allowed, the depreciation under section 168(k) is allowed.

[EFFECTIVE DATE.] This section is effective for taxable years ending after September 10, 2001."

Page 102, after line 9, insert:

"Sec. 49. [PRE-1940 HOUSING PERCENTAGE.]

For the purposes of determining local government aid payment amounts for aids payable in 2003, the "pre-1940 housing percentage" factor shall be based upon the 1990 federal census, notwithstanding Minnesota Statutes 2002, section 477A.011, subdivision 30.

[EFFECTIVE DATE.] This section is effective for aids payable in 2003 only."

Page 103, after line 3, insert:

"Sec. 2. Minnesota Statutes 2002, section 289A.60, subdivision 15, is amended to read:

Subd. 15. [ACCELERATED PAYMENT OF JUNE SALES TAX LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is required by law to submit an estimation of June sales tax liabilities and 62 75 percent payment by a certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual June liability required to be paid in June less the amount remitted in June. The penalty must not be imposed, however, if the amount remitted in June equals the lesser of 62 75 percent of the preceding May's liability or 62 75 percent of the average monthly liability for the previous calendar year.

[EFFECTIVE DATE.] This section is effective for payments due after December 31, 2002."

Pages 137 to 172, delete article 9 and insert:

"ARTICLE 9

CENTRAL LAKES REGION SANITARY DISTRICT

Section 1. [DEFINITIONS.]

Subdivision 1. [APPLICATION.] The terms defined in this section shall have the meaning given them unless otherwise provided or indicated by the context.

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Subd. 2. [ACQUISITION AND BETTERMENT.] "Acquisition" and "betterment" shall have the meanings given them in Minnesota Statutes, section 475.51.

Subd. 3. [AGENCY.] "Agency" means the Minnesota pollution control agency created and established by Minnesota Statutes, chapter 116.

Subd. 4. [AGRICULTURAL PROPERTY.] "Agricultural property" means land as is classified agricultural land within the meaning of Minnesota Statutes, section 273.13, subdivision 23.

Subd. 5. [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND DEBT SERVICE.] "Current costs of acquisition, betterment, and debt service" means interest and principal estimated to be due during the budget year on bonds issued to finance the acquisition and betterment and all other costs of acquisition and betterment estimated to be paid during the budget year from funds other than bond proceeds and federal or state grants.

Subd. 6. [DISTRICT DISPOSAL SYSTEM.] "District disposal system" means any and all of the interceptors or treatment works owned, constructed, or operated by the board unless designated by the board as local sanitary sewer facilities.

Subd. 7. [CENTRAL LAKES REGION SANITARY DISTRICT AND DISTRICT.] "Central Lakes Region Sanitary District" and "district" mean the area over which the sanitary sewer board has jurisdiction, including those parts of the Douglas county townships of Carlos, Brandon, La Grand, Leaf Valley, Miltona, and Moe, as more particularly described by metes and bounds in the comprehensive plan adopted under section 4.

Subd. 8. [INTERCEPTOR.] "Interceptor" means any sewer and necessary appurtenances to it, including but not limited to, mains, pumping stations, and sewage flow regulating and measuring stations, that is designed for or used to conduct sewage originating in more than one local government unit, or that is designed or used to conduct all or substantially all the sewage originating in a single local government unit from a point of collection in that unit to an interceptor or treatment works outside that unit, or that is determined by the board to be a major collector of sewage used or designed to serve a substantial area in the district.

Subd. 9. [LOCAL GOVERNMENT UNIT OR GOVERNMENT UNIT.] "Local government unit" or "government unit" means any municipal or public corporation or governmental or political subdivision or agency located in whole or in part in the district, authorized by law to provide for the collection and disposal of sewage.

Subd. 10. [LOCAL SANITARY SEWER FACILITIES.] "Local sanitary sewer facilities" means all or any part of any disposal system in the district other than the district disposal system.

Subd. 11. [MUNICIPALITY.] "Municipality" means any statutory or home rule charter city or town located in whole or in part in the district.

Subd. 12. [PERSON.] "Person" means any individual, partnership, corporation, limited liability company, cooperative, or other organization or entity, public or private.

Subd. 13. [POLLUTION AND SEWER SYSTEM.] "Pollution" and "sewer system" have the meanings given them in Minnesota Statutes, section 115.01.

Subd. 14. [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer board" or "board" means the sanitary sewer board established for the Central Lakes Region Sanitary District as provided in section 2.

Subd. 15. [SEWAGE.] "Sewage" means all liquid or water-carried waste products from whatever sources derived, together with the groundwater infiltration and surface water that may be present.

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Subd. 16. [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of acquisition and betterment" and "costs of acquisition and betterment" mean all acquisition and betterment expenses that are permitted to be financed out of bond proceeds issued in accordance with section 12, subdivision 4, whether or not the expenses are in fact financed out of the bond proceeds.

Subd. 17. [TREATMENT WORKS AND DISPOSAL SYSTEM.] "Treatment works" and "disposal system" have the meanings given them in Minnesota Statutes, section 115.01.

Sec. 2. [SANITARY SEWER BOARD.]

Subdivision 1. [ESTABLISHMENT.] A sanitary sewer board with jurisdiction in the Central Lakes Region Sanitary District is established as a public corporation and political subdivision of the state with perpetual succession and all the rights, powers, privileges, immunities, and duties that may be validly granted to or imposed upon a municipal corporation, as provided in this article.

Subd. 2. [MEMBERS AND SELECTION.] The number of board members and method by which they are selected is as follows: The governing body of any municipality located in whole or part within the district must each separately select one member. Upon the board's ordering of a project to construct a sanitary sewer, the governing body of any municipality must appoint one additional member for each full 800 special assessments included in the ordered project to be levied against property located in the municipality. The term of each member is subject to the approval of the voting members of the city council or town board.

Subd. 3. [TIME LIMIT; ALTERNATIVE APPOINTMENT.] The initial board members must be selected as provided in subdivision 2 within 60 days after this article is effective. A successor must be selected at any time within 60 days before the expiration of the predecessor's term in the same manner as the predecessor was selected. Any vacancy on the board must be filled within 60 days after it occurs. If a selection is not made as provided within the time prescribed, the chief judge of the seventh judicial district of the Minnesota district court, on application by any interested person, shall appoint an eligible person to the board.

Subd. 4. [VACANCIES.] If the office of any board member becomes vacant, the vacancy shall be filled for the unexpired term in the manner as provided for selection of the member who vacated the office. The office shall be deemed vacant under the conditions specified in Minnesota Statutes, section 351.02.

Subd. 5. [TERMS OF OFFICE.] The terms of all board members shall be for one, two, three, or four calendar years to be determined in accordance with subdivision 2 by the governing body selecting such member. Terms shall expire on January 1 of a calendar year, except that each member shall serve until a successor has been duly selected and qualified.

Subd. 6. [REMOVAL.] A board member may be removed by the unanimous vote of the appointing governing body with or without cause.

Subd. 7. [QUALIFICATIONS.] Each board member may, but need not be a resident of the district and may, but need not be an elected public official.

Subd. 8. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A certificate of selection to a seat of every board member, stating the seat's term, must be made by the respective municipal clerk. The certificate, with the approval attached by other authority, if required, must be filed with the secretary of state. A copy must be furnished to the board member and the secretary of the board. Each member must qualify by taking and subscribing to the oath of office prescribed by the Minnesota Constitution, article V, section 6. The oath, duly certified by the official administering the same, must be filed with the secretary of state and the secretary of the board.

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Subd. 9. [COMPENSATION OF BOARD MEMBERS.] Each board member may be paid a per diem compensation to attend meetings and for other services in an amount as may be specifically authorized by the board from time to time. Per diem compensation must not exceed $4,000 for any member in any one year. All members of the board may be reimbursed for all reasonable expenses incurred in the performance of their duties as determined by the board.

Sec. 3. [GENERAL PROVISION FOR ORGANIZATION AND OPERATION OF BOARD.]

Subdivision 1. [OFFICERS MEETINGS; SEAL.] A majority of the members is a quorum at all meetings of the board, but a lesser number may meet and adjourn from time to time and compel the attendance of absent members. The board must meet regularly at the time and place as the board by resolution designates. Special meetings may be held at any time upon call of the chair or any two members, upon written notice sent by mail to each member at least three days before the meeting, or upon the notice as the board by resolution may provide, or without notice if each member is present or files with the secretary a written consent to the meeting either before or after the meeting. Except as otherwise provided in this article, any action within the authority of the board may be taken by the affirmative vote of a majority of the board at a regular or adjourned regular meeting or at a duly held special meeting, but in any case only if a quorum is present. All meetings of the board must be open to the public as provided in Minnesota Statutes, chapter 13D.

Subd. 2. [CHAIR.] The board must elect a chair from its membership. The term of the chair expires on January 1 of each year. The chair presides at all meetings of the board, if present, and must perform all other duties and functions usually incumbent upon the officer, and all administrative functions assigned to the chair by the board. The board must elect a vice-chair from its membership to act for the chair during a temporary absence or disability.

Subd. 3. [SECRETARY AND TREASURER.] The board must select one or more persons who may, but need not be a member of the board, to act as its secretary and treasurer. The secretary and treasurer hold office at the pleasure of the board, subject to the terms of any contract of employment that the board may enter into with the secretary or treasurer. The secretary must record the minutes of all meetings of the board, and is custodian of all books and records of the board except those the board entrusts to the custody of a designated employee. The board may appoint a deputy to perform any and all functions of either the secretary or the treasurer. A secretary or treasurer or a deputy of either who is not a member of the board shall not have any right to vote.

Subd. 4. [GENERAL MANAGER.] The board may appoint a general manager who shall be selected solely upon the basis of training, experience, and other qualifications. The general manager serves at the pleasure of the board and at a compensation to be determined by the board. The general manager need not be a resident of the district and may also be selected by the board to serve as either secretary or treasurer, or both, of the board. The general manager must attend all meetings of the board but must not vote. The general manager must:

(1) see that all resolutions, rules, regulations, or orders of the board are enforced;

(2) appoint and remove, upon the basis of merit and fitness, all subordinate officers and regular employees of the board except the secretary and the treasurer and their deputies;

(3) present to the board plans, studies, and other reports prepared for board purposes and recommend to the board for adoption such measures as the general manager considers necessary to enforce or carry out the powers and duties of the board, or for the efficient administration of the affairs of the board;

(4) keep the board fully advised as to its financial condition, and prepare and submit to the board, and to the governing bodies of the local government units, the board's annual budget and other financial information the board requests;

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(5) recommend to the board for adoption rules recommended as necessary for the efficient operation of a district disposal system and all local sanitary sewer facilities over which the board may assume responsibility as provided in section 17; and

(6) perform other duties as may be prescribed by the board.

Subd. 5. [PUBLIC EMPLOYEES.] The general manager and all persons employed by the general manager and public employees, and have all the rights and duties conferred on public employees under the Minnesota Public Employment Labor Relations Act. The compensation and conditions of employment of the employees is not governed by any rule applicable to state employees in the classified service or by Minnesota Statutes, chapter 15A, except as specifically authorized by law.

Subd. 6. [PROCEDURES.] The board must adopt resolutions or bylaws establishing procedures for board action, personnel administration, record keeping, investment policy, approving claims, authorizing or making disbursements, safekeeping funds, and audit of all financial operations of the board.

Subd. 7. [SURETY BONDS AND INSURANCE.] The board may procure surety bonds for its officers and employees in such amounts as are considered necessary to assure proper performance of their duties and proper accounting for funds in their custody. It may buy insurance against risks to property and liability of the board and its officers, agents, and employees for personal injuries or death and property damage and destruction in the amounts as it considers necessary or desirable, with the force and effect stated in Minnesota Statutes, chapter 466.

Sec. 4. [COMPREHENSIVE PLAN.]

Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall adopt a comprehensive plan for the collection, treatment, and disposal of sewage in the district for designated periods that the board considers proper and reasonable. The board must prepare and adopt subsequent comprehensive plans for the collection, treatment, and disposal of sewage in the district for each succeeding designated period as the board considers proper and reasonable. The plan must take into account the preservation and best and most economic use of water and other natural resources in the area; the preservation, use, and potential for use of lands adjoining waters of the state to be used for the disposal of sewage; and the impact such a disposal system will have on present and future land use in the affected area. The plans shall include the following:

(1) the exact legal description of the boundaries of the district;

(2) the general location of needed interceptors and treatment works;

(3) a description of the area that is to be served by the various interceptors and treatment works;

(4) a long-range capital improvements program; and

(5) such other details as the board deems appropriate.

In developing the plans, the board shall consult with persons designated by the governing bodies of any municipal or public corporation or governmental or political subdivision or agency within or without the district to represent such entities and shall consider the data, resources, and input offered to the board by such entities and any planning agency acting on behalf of one or more such entities. Each plan, when adopted, must be followed in the district and may be revised as often as the board considers necessary.

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Subd. 2. [REPORT TO DOUGLAS COUNTY.] Upon adoption of any comprehensive plan that establishes or reestablishes the boundaries of the district, the board must supply the appropriate Douglas county offices with the boundaries of the district.

Subd. 3. [COMPREHENSIVE PLANS; HEARING.] Before adopting any later comprehensive plan, the board must hold a public hearing on the proposed plan at the time and place in the district it determines. The hearing may be continued from time to time. Not less than 45 days before the hearing, the board must publish notice of it in a newspaper or newspapers having general circulation in the district stating the date, time, and place of the hearing, and the place where the proposed plan may be examined by any interested person. At the hearing, all interested persons must be permitted to present their views on the plan.

Subd. 4. [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH BOARD'S RESPONSIBILITIES.] Before undertaking the construction of new sewers or other disposal facilities or the substantial alteration or improvement of any existing sewers or other disposal facilities, each local government unit may, and must if the construction or alteration of any sewage disposal facilities is contemplated by the government unit, adopt a comprehensive plan and program for the collection, treatment, and disposal of sewage for which the local government unit is responsible, coordinated with the board's comprehensive plan, and may revise the plan as often as deemed necessary. Each local plan or revision must be submitted to the board for review and is subject to the approval of the board as to those features of the plan affecting the board's responsibilities as determined by the board. Any features disapproved by the board must be modified in accordance with the board's recommendations. No construction project involving those features may be undertaken by the local government unit unless its governing body first finds the project to be in accordance with the government unit's comprehensive plan and program as approved by the board. Before approval by the board of the comprehensive plan and program of any local government unit in the district, no construction project may be undertaken by the government unit unless approval of the project is first gotten from the board as to those features of the project affecting the board's responsibilities as determined by the board.

Sec. 5. [SEWER SERVICE FUNCTION.]

Subdivision 1. [DUTY OF BOARD; ACQUISITION OF EXISTING FACILITIES; NEW FACILITIES.] At any time after the board has become organized, it must assume ownership of all existing interceptors and treatment works that are needed to implement the board's comprehensive plan for the collection, treatment, and disposal of sewage in the district, in the manner and subject to the conditions prescribed in subdivision 2, and must design, acquire, construct, better, equip, operate, and maintain all additional interceptors and treatment works that will be needed for this purpose. The board must assume ownership of all treatment works owned by a local government unit if any part of those treatment works are so needed.

Subd. 2. [METHOD OF ACQUISITION; EXISTING DEBT.] The board may require any local government unit to transfer to the board all of its right, title, and interest in any interceptors or treatment works and all necessary appurtenances to them owned by the local government unit that will be needed for the purpose stated in subdivision 1. Appropriate instruments of conveyance for all the property must be executed and delivered to the board by the proper officers of each local government unit concerned. The board, upon assuming ownership of any of the interceptors or treatment works, is obligated to pay to the local government unit amounts sufficient to pay, when due, all remaining principal of and interest on bonds issued by the local government unit for the acquisition or betterment of the interceptors or treatment works. The board must also assume the same obligation with respect to any other existing disposal system owned by a local government unit that the board determines to have been replaced or rendered useless by the district disposal system. The amounts to be paid under this subdivision may be offset against any amount to be paid to the board by the local government unit as provided in section 8. The board is not obligated to pay the local government unit anything in addition to the assumption of debt provided for in this subdivision.

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Subd. 3. [EXISTING JOINT POWERS BOARD.] Effective December 31, 2004, or an earlier date as determined by the board, the corporate existence of the joint powers board created by agreement among local government units under Minnesota Statutes, section 471.59, to provide the financing, acquisition, construction, improvement, extension, operation, and maintenance of facilities for the collection, treatment, and disposal of sewage is terminated. All persons regularly employed by the joint powers board on that date become employees of the board, and may at their option become members of the retirement system applicable to persons employed directly by the board or may continue as members of a public retirement association under any other law, to which they belonged before that date, and retain all pension rights that they may have the other law and all other rights to which they are entitled by contract or law. The board must make the employer's contributions to pension funds of its employees. The employees must perform duties as may be prescribed by the board. On December 31, 2004, or the earlier date, all funds of the joint powers board and all later collections of taxes, special assessments, or service charges, or any other sums due the joint powers board, or levied or imposed by or for the joint powers board, must be transferred to or made payable to the sanitary sewer board and the county auditor must remit the sums to the board. The local government units otherwise entitled to the cash, taxes, assessments, or service charges must be credited with the amounts, and the credits must be offset against any amounts to be paid by them to the board as provided in section 8. On December 31, 2004, or the earlier chosen date, the board shall succeed to and become vested with all right, title, and interest in and to any property, real or personal, owned or operated by the joint powers board. Before that date, the proper officers of the joint powers board must execute and deliver to the sanitary sewer board all deeds, conveyances, bills of sale, and other documents or instruments required to vest in the board good and marketable title to all the real or personal property, but this article operates as the transfer and conveyance to the board of the real or personal property, if not transferred, as may be required under the law or under the circumstances. On December 31, 2004, or the earlier chosen date, the board is obligated to pay or assume all outstanding bonds or other debt and all contracts or obligations incurred by the joint powers board, and all bonds, obligations, or debts of the joint powers board outstanding on the date this article is effective, are validated.

Subd. 4. [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The board may terminate, upon 60 days' mailed notice to the contracting parties, any existing contract between or among local government units requiring payments by a local government unit to any other local government unit for the use of a disposal system, or as reimbursement of capital costs of a disposal system, all or part of which are needed to implement the board's comprehensive plan. All contracts between or among local government units for use of a disposal system entered into after the date on which this article becomes effective must be submitted to the board for approval as to those features affecting the board's responsibilities as determined by the board and are not effective until the approval is given.

Sec. 6. [SEWAGE COLLECTION AND DISPOSAL; POWERS.]

Subdivision 1. [POWERS.] In addition to all other powers conferred upon the board in this article, the board has the powers specified in this section.

Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may discharge the effluent from any treatment works operated by it into any waters of the state, subject to approval of the agency if required and in accordance with any effluent or water quality standards lawfully adopted by the agency, any interstate agency, or any federal agency having jurisdiction.

Subd. 3. [USE OF DISTRICT SYSTEM.] The board may require any person or local government unit to provide for the discharge of any sewage, directly or indirectly, into the district disposal system, or to connect any disposal system or a part of it with the district disposal system wherever reasonable opportunity is provided; may regulate the manner in which the connections are made; may require any person or local government unit discharging sewage into the disposal system to provide preliminary treatment for it; may prohibit the discharge into the district disposal system of any substance it determines will or may be harmful to the system or any persons operating it; may prohibit any extraneous flow into the system; and may require any local government unit to discontinue the acquisition, betterment, or operation of any facility for the unit's disposal system wherever and so far as adequate service is or will be provided by the district disposal system.

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Sec. 7. [BUDGET.]

Except as otherwise specifically provided in this article, the board is subject to Minnesota Statutes, section 275.065. The board shall prepare and adopt, on or before September 15 of each year, a budget showing for the following calendar year or other fiscal year determined by the board, sometimes referred to in this article as the budget year, estimated receipts of money from all sources, including but not limited to, payments by each local government unit, federal or state grants, taxes on property, and funds on hand at the beginning of the year, and estimated expenditures for:

(1) costs of operation, administration, and maintenance of the district disposal system;

(2) cost acquisition and betterment of the district disposal system; and

(3) debt service, including principal and interest, on general obligation bonds and certificates issued under section 12, obligations and debts assumed under section 5, subdivisions 2 and 3, and any money judgments entered by a court of competent jurisdiction. Expenditures within these general categories, and others that the board may from time to time determine, must be itemized in the detail the board prescribes. The board and its officers, agents, and employees must not spend money for any purpose other than debt service without having set forth the expense in the budget, nor may they spend in excess of the amount in the budget, and an excess expenditure or one for an unauthorized purpose is enforceable except as the obligation of the person incurring it; but the board may amend the budget at any time by transferring from one budgetary purpose to another any sums, except money for debt service and bond proceeds, or by increasing expenditures in any amount by which cash receipts during the budget year actually exceed the total amounts designated in the original budget. The creation of any obligation pursuant to section 12 or the receipts of any federal or state grant is a sufficient budget designation of the proceeds for the purpose for which it is authorized, and of the tax or other revenue pledged to pay the obligation and interest on it, whether or not specifically included in any annual budget.

Sec. 8. [ALLOCATION OF COSTS.]

Subdivision 1. [DEFINITION OF CURRENT COSTS.] The estimated cost of administration, operation, maintenance, and debt service of the district disposal system to be paid by the board in each fiscal year and the estimated costs of acquisition and betterment of the system that are to be paid during the year from funds other than state or federal grants and bond proceeds and all other previously unallocated payments made by the board under this article in the fiscal year are referred to as current costs.

Subd. 2. [COLLECTION OF CURRENT COSTS.] Current costs shall be collected as described in paragraphs (a) and (b).

(a) Current costs may be allocated to local government units in the district on an equitable basis as the board may from time to time determine by resolution to be fair and reasonable and in the best interests of the district. In making the allocation, the board may provide for the deferment of payment of all or part of current costs, the reallocation of deferred costs, and the reimbursement of reallocated deferred costs on an equitable basis as the board may from time to time determine by resolution to be fair and reasonable and in the best interests of the district. The adoption or revision of a method of allocation, deferment, reallocation, or reimbursement used by the board shall be made by the affirmative vote of at least two-thirds of the members of the board.

(b) Upon approval of at least two-thirds of the members of the board, the board may provide for direct collection of current costs by monthly or other periodic billing of sewer users.

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Sec. 9. [GOVERNMENT UNITS; PAYMENTS TO BOARD.]

Subdivision 1. [OBLIGATIONS OF GOVERNMENT UNITS TO THE BOARD.] Each government unit must pay to the board all sums charged to it as provided in section 8, at the times and in the manner determined by the board. The governing body of each government unit must take all action necessary to provide the funds required for the payments and to make the payments when due.

Subd. 2. [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges payable to the board by local government units may be made payable at the times during each year as the board determines, after it has taken into account the dates on which taxes, assessments, revenue collections, and other funds become available to the government unit required to pay such charges.

Subd. 3. [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX LEVIES.] To accomplish any duty imposed on it by the board, the governing body of every government unit may, in addition to the powers granted in this article and in any other law or charter, exercise the powers granted any municipality by Minnesota Statutes, chapters 117, 412, 429, and 475, and sections 115.46, 444.075, and 471.59, with respect to the area of the government unit located in the district. In addition, the governing body of every government unit located in whole or in part within the district may levy taxes upon all taxable property in that part of the government unit located in this district for all or a part of the amount payable to the board. If the levy is for only part of the amount payable to the board, the governing body of the government unit may levy additional taxes on the entire net tax capacity of all taxable property of the government unit for all or a part of the balance remaining payable. The taxes levied under this subdivision must be assessed and extended as a tax upon the taxable property by the county auditor for the next calendar year, free from any limit of rate or amount imposed by law or charter. The tax must be collected and remitted in the same manner as other general taxes of the government unit.

Subd. 4. [ALTERNATE LEVY.] Instead of levying taxes on all taxable property under subdivision 3, the governing body of the government unit may elect to levy taxes upon the net tax capacity of all taxable property, except agricultural property, and upon only 25 percent of the net tax capacity of all agricultural property, in that part of the government unit located in the district for all or a part of the amount payable to the board. If the levy is for only part of the amount payable to the board, the governing body may levy additional taxes on the entire net tax capacity of all the property, including agricultural property, for all or a part of the balance. The taxes must be assessed and extended as a tax upon the taxable property by the county auditor for the next calendar year, free from any limit of rate or amount imposed by law or charter, and must be collected and remitted in the same manner as other general taxes of the government unit. In computing the tax capacity under this subdivision, the county auditor must include only 25 percent of the net tax capacity of all taxable agricultural property and 100 percent of the net tax capacity of all other taxable property in that part of the government unit located within the district and, in spreading the levy, the auditor must apply the tax rate upon the same percentages of agricultural and nonagricultural taxable property. If the government unit elects to levy taxes under this subdivision and any of the taxable agricultural property is reclassified so as to no longer qualify as agricultural property, it is subject to additional taxes. The additional taxes must be in an amount which, together with any additional taxes previously levied and the estimated collection of additional taxes subsequently levied on any other reclassified property, is determined by the governing body of the government unit to be at least sufficient to reimburse each other government unit for any excess current costs reallocated to it as a result of the board deferring any current cost under section 8 on account of the difference between the amount of the current costs initially allocated to each government unit based on the total net tax capacity of all taxable property in the district and the amount of the current costs reallocated to each government unit based on 25 percent of the net tax capacity of agricultural property and 100 percent of the net tax capacity of all other taxable property in the district. Any reimbursement must be made on terms which the board determines to be just and reasonable. These additional taxes may be levied in any greater amount as the governing body of the government unit determines to be appropriate, but the total amount of the additional taxes must not exceed the difference between:

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(1) the total amount of taxes that would have been levied upon the reclassified property to help pay current costs charged in each year to the government unit by the board if that part of the costs, if any, initially allocated by the board solely on the basis of 100 percent of the net tax capacity of all taxable property in the district and then reallocated on the basis of inclusion of only 25 percent of the net tax capacity of agricultural property in the district was not reallocated and if the amount of taxes levied by the government unit each year under this subdivision to pay current costs had been based on the initial allocation and had been imposed upon 100 percent of the net tax capacity of all taxable property, including agricultural property, in that part of the government unit located in the district; and

(2) the amount of taxes levied each year under this subdivision upon reclassified property, plus interest on the cumulative amount of the difference accruing each year at the approximate average annual rate borne by bonds issued by the board and outstanding at the beginning of the year or, if no bonds are then outstanding, at a rate of interest which may be determined by the board, but not exceeding the maximum rate of interest that may then be paid on bonds issued by the board. The additional taxes are a lien upon the reclassified property assessed in the same manner and for the same duration as all other ad valorem taxes levied upon the property. The additional taxes must be extended against the reclassified property on the tax list for the current year and must be collected and remitted in the same manner as other general taxes of the government unit. No penalties or additional interest may be levied on the additional taxes if timely paid.

Subd. 5. [DEBT LIMIT.] Any ad valorem taxes levied under subdivision 3, by the governing body of a government unit to pay any sums charged to it by the board pursuant to this article are not subject to, or counted toward, any limit imposed by law on the levy of taxes upon taxable property within any governmental unit.

Subd. 6. [DEFICIENCY TAX LEVIES.] If the local government unit fails to make a payment to the board when due, the board may certify to the Douglas county auditor the amount required for payment, with interest at not more than the maximum rate per year authorized at that time on assessments under Minnesota Statutes, section 429.061, subdivision 2. The auditor must levy and extend the amount as a tax upon all taxable property in that part of the government unit located in the district, for the next calendar year, free from any limits imposed by law or charter. The tax must be collected in the same manner as other general taxes of the government unit, and the proceeds, when collected, shall be paid by the county treasurer to the treasurer of the board and credited to the government unit for which the tax was levied.

Sec. 10. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.]

Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC PROJECT.] Before the board orders any project involving the acquisition or betterment of any interceptor or treatment works, all or a part of the cost of which will be allocated to local government units under section 8 as current costs, the board must hold a public hearing on the proposed project following two publications in a newspaper or newspapers having general circulation in the district, stating the time and place of the hearing, the general nature and location of the project, the estimated total cost of acquisition and betterment, that portion of costs estimated to be paid out of federal and state grants, and that portion of costs estimated to be allocated to each local government unit affected. The two publications must be a week apart and the hearing must be at least three days after the last publication. Not less than 45 days before the hearing, notice must also be mailed to each clerk of all local government units in the district, but failure to give mailed notice of any defects in the notice does not invalidate the proceedings. The project may include all or part of one or more interceptors or treatment works. A hearing is not required with respect to a project, no part of the costs of which are to be allocated to local government units as the current cost of acquisition, betterment, and debt service.

Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the governing body of a local government unit in the district proposes to assess against benefited property within units, all or any part of the allocable costs of the project as provided in subdivision 5, the governing body must, not less than ten days before the hearing provided for in subdivision 1 mail a notice of the hearing to the owner of each parcel within the area proposed to be specially assessed and must also give one week's published notice of the hearing. The notice of hearing must contain the

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same information provided in the notice published by the board under subdivision 1, and in addition, a description of the area proposed to be assessed by the local government unit. To give mailed notice, owners must be those shown to be on the records of the county auditor or, in a county where tax statements are mailed by the county treasurer, on the records of the county treasurer; but other appropriate records may be used for this purpose. However, for properties that are tax exempt or subject to taxation on a gross earnings basis and are not listed on the records of the county auditor or the county treasurer, the owners may be ascertained by any practicable means and mailed notice must be given to them. Failure to give mailed notice or any defects in the notice does not invalidate the proceedings of the board or the local governing body.

Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before adoption of the resolution calling for the hearing, the board shall get from the district engineer, or other competent person of the board's selection, a preliminary report advising whether the proposed project is feasible, necessary, and cost-effective, and whether it should best be made as proposed or in connection with another project, and the estimated costs of the project as recommended. No error or omission in the report invalidates the proceeding. The board may also take steps before the hearing that will, in its judgment, provide helpful information in determining the desirability and feasibility of the project including, but not limited to, preparation of plans and specifications and advertisement for bids. The hearing may be adjourned from time to time and a resolution ordering the project may be adopted at any time within six months after the date of hearing. In ordering the project, the board may reduce but not increase the extent of the project as stated in the notice of hearing, unless another hearing is held, and must find that the project as ordered is in accordance with the comprehensive plan and program adopted by the board under section 4.

Subd. 4. [EMERGENCY ACTION.] If the board by resolution adopted by the affirmative vote of not less than two-thirds of its members determines that an emergency exists requiring the immediate purchase of materials or supplies or the making of emergency repairs, it may order the purchase of the supplies and materials and the making of the repairs before any hearing required under this section. But the board must set as early a date as practicable for that hearing at the time it declares the emergency. All other provisions of this section must be followed in giving notice of and conducting a hearing. This subdivision does not prevent the board or its agents from purchasing maintenance supplies or incurring maintenance costs without regard to the requirements of this section.

Subd. 5. [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A local government unit may specially assess all or part of the costs of acquisition and betterment of any project ordered by the board under this section. A special assessment must be levied in accordance with Minnesota Statutes, sections 429.051 to 429.081, except as otherwise provided in this subdivision. No other provisions of Minnesota Statutes, chapter 429, apply. For purposes of levying special assessments, the hearing on the project required in subdivision 1 must serve as the hearing on the making of the original improvement provided for by Minnesota Statutes, section 429.051. The area assessed may be less than but must not exceed the area proposed to be assessed as stated in the notice of hearing on the project provided for in subdivision 2. To determine the allocable cost of the project to the local government units, the government unit may adopt one of the procedures in paragraph (a) or (b).

(a) At any time after a contract is let for the project, the local government unit may get from the board a current written estimate, on the basis of historical and reasonably projected data, of that part of the total cost of acquisition and betterment of the project or of some part of the project that will be allocated to the local government unit and the number of years over which such costs will be allocated as current costs of acquisition, betterment, and debt service under section 8. The board is not bound by this estimate for allocating the costs of the project to local government units.

(b) The governing body may get from the board a written statement showing, for the prior period that the governing body designates, that part of the costs previously allocated to the local government unit as current costs of acquisition, betterment, and debt service only, of all or any part of the project designated by the governing body. In addition to the allocable costs, the local government unit may include in the total expense, as a basis for levying assessments, all other expenses incurred directly by the local government unit in connection with the project.

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Special assessments levied by the government unit with respect to previously allocated costs ascertained under this paragraph are payable in equal annual installments extending over a period not exceeding by more than one year the number of years that the costs have been allocated to the local government unit or the estimated useful life of the project, or part of the project, whichever number of years is the lesser. No limit is placed on the number of times the governing body of a local government unit may assess the previously allocated costs not previously assessed by the government unit. The power to specially assess provided for in this section is in addition and supplemental to all other powers of local government units to levy special assessments.

Sec. 11. [INITIAL COSTS.]

Subdivision 1. [CONTRIBUTIONS OR ADVANCES FROM LOCAL GOVERNMENT UNITS.] The board may, at the time it considers necessary and proper, request from a local government unit necessary money to defray the costs of any obligations assumed under section 5 and the costs of administration, operation, and maintenance. Before making a request, the board must, by formal resolution, determine the necessity for the money, setting forth the purposes for which the money is needed and the estimated amount for each purpose. Upon receiving a request, the governing body of each local government unit may provide for payment of the amount requested as it considers fair and reasonable. The money may be paid out of general revenue funds or any other available funds of any local government unit and its governing body thereof may levy taxes to provide funds, free from any existing limit imposed by law or charter. Money may be provided by government units with or without interest, but if interest is charged it must not exceed five percent per year. The board must credit the local government unit for the payments in allocating current costs under section 8, on the terms and at the times as are agreed to with the local government unit.

Subd. 2. [LIMITED TAX LEVY.] The board may levy ad valorem taxes on all taxable property in the district to defray any of the costs described in subdivision 1, provided the costs have not been defrayed by contribution under subdivision 1. Before certifying a levy to the county auditor, the board must determine the need for the money to be derived from the levy by formal resolution setting forth the purposes for which the tax money will be used and the amount proposed to be used for each purpose. In allocating current costs under section 8, the board must credit the government units for taxes collected under the levy made under this subdivision on the terms and at the time the board considers fair and reasonable and on terms consistent with section 8, subdivision 2.

Sec. 12. [BONDS CERTIFICATES AND OTHER OBLIGATIONS.]

Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF INDEBTEDNESS.] (a) Before adopting its annual budget and in anticipation of the collection of tax and other revenues estimated and set forth by the board in the budget, the board may by resolution, authorize the issuance, negotiation, and sale in accordance with subdivision 5 in such form and manner and upon such terms as it may determine of its negotiable general obligation certificates of indebtedness in aggregate principal amounts not exceeding 50 percent of the total amount of such tax collections and other revenues and maturing not later than three months after the close of the budget year in which issued. Revenues listed in clauses (1) to (3) must not be anticipated for this purpose:

(1) taxes already anticipated by the issuance of certificates under subdivision 2;

(2) deficiency taxes levied pursuant to this subdivision; and

(3) taxes levied for the payment of certificates issued pursuant to subdivision 3.

(b) The proceeds of the sale of the certificates must be used only for the purposes for which tax collections and other revenues are to be expended under the budget.

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(c) All tax collections and other revenues included in the budget for the budget year, after the expenditures of tax collections and other revenues in accordance with the budget, must be irrevocably pledged and appropriated to a special fund to pay the principal and interest on the certificates when due.

(d) If for any reason the tax collections and other revenues are insufficient to pay the certificates and interest when due, the board must levy a tax in the amount of the deficiency on all taxable property in the district and must appropriate this amount when received to the special fund.

Subd. 2. [TAX LEVY ANTICIPATION CERTIFICATES OF INDEBTEDNESS.] After a tax is levied by the board under section 11, subdivision 2, and certified to the county auditors in anticipation of the collection of the tax, if the tax has not been anticipated by the issuance of certificates under subdivision 1, the board may, by resolution, authorize the issuance, negotiation, and sale in accordance with subdivision 5 in the form and manner and on the terms and conditions as it determines its negotiable general obligation tax levy anticipation certificates of indebtedness in aggregate principal amounts not exceeding 50 percent of the uncollected tax for which no penalty for nonpayment or delinquency has been attached. The certificates must mature not later than April 1 in the year after the year in which the tax is collectible. The proceeds of the tax in anticipation of which the certificates were issued and other funds that may become available must be applied to the extent necessary to repay the certificates.

Subd. 3. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in any budget year the receipts of tax and other revenues for some unforeseen cause become insufficient to pay the board's current expenses, or if any calamity or other public emergency subjects it to the necessity of making extraordinary expenditures, the board may by resolution authorize the issuance, negotiation, and sale in accordance with subdivision 5 in the form and manner and on the terms and conditions as it may determine of its negotiable general obligation certificates of indebtedness in an amount sufficient to meet the deficiency, and the board must levy on all taxable property in the district a tax sufficient to pay the certificates and interest and shall appropriate all collections of the tax to a special fund created for the payment of the certificates and interest.

Subd. 4. [GENERAL OBLIGATION BONDS.] The board may by resolution authorize the issuance of general obligation bonds maturing serially in one or more annual or semiannual installments for the acquisition or betterment of any part of the district disposal system, including but not limited to, the payment of interest during construction and for a reasonable period thereafter, or for the refunding of outstanding bonds, certificates of indebtedness, or judgments. The board must pledge its full faith and credit and taxing power for the payment of the bonds and shall provide for the issuance and sale and for the security of the bonds in the manner provided in Minnesota Statutes, chapter 475, and must have the same powers and duties as a municipality issuing bonds under that law. An election is not required to authorize the issuance of bonds and the debt limit of Minnesota Statutes, chapter 475, do not apply to the bonds. The board may also pledge for the payment of the bonds and deduct from the amount of any tax levy required under Minnesota Statutes, section 475.61, subdivision 1, any sums receivable under section 9 or any state and federal grants anticipated by the board and may covenant to refund the bonds if and when and to the extent that for any reason the revenues, together with other funds properly available and appropriated for the purpose, are not sufficient to pay all principal and interest due or about to become due; if the revenues have not been anticipated by the issuance of certificates under subdivision 1. All bonds that have been or shall hereafter be issued and sold in conformity with the provisions of this subdivision, and otherwise in conformity with law, are hereby authorized, legalized, and validated.

Subd. 5. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] Certificates issued under subdivisions 1, 2, and 3 may be issued and sold by negotiation, without public sale, and may be sold at a price equal to the percentage of their par value, plus accrued interest, and bearing interest at the rate or rates as may be determined by the board. No election is required to authorize the issuance of certificates. Certificates must bear the same rate of interest after maturity as before and the full faith and credit and taxing power of the board must be pledged to the payment of the certificates.

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Sec. 13. [TAX LEVIES.]

The board may levy taxes to pay the bonds or other obligations assumed by the district under section 5 and for debt service of the district disposal system authorized in section 12 upon all taxable property within the district without limit of rate or amount and without affecting the amount or rate of taxes that may be levied by the board for other purposes or by any local government unit in the district. No other provision of law relating to debt limit shall restrict or in any way limit the power of the board to issue the bonds and certificates authorized in section 12. The board may also levy taxes as provided in sections 9 and 11. The county auditor must annually assess and extend upon the tax rolls the part of the taxes levied by the board in each year that is certified to the auditor by the board. The county treasurer must collect and make settlement of the taxes with the treasurer of the board.

Sec. 14. [DEPOSITORIES.]

The board must from time to time designate one or more national or state banks or trust companies authorized to do a banking business as official depositories for money of the board, and must require the treasurer to deposit all or a part of the money in those institutions. The designation must be in writing and must set forth all the terms and conditions on which the deposits are made, and must be signed by the chair and treasurer, and made a part of the minutes of the board. A designated bank or trust company must qualify as a depository by furnishing a corporate surety bond or collateral in the amount required by Minnesota Statutes, section 118A.03. But, no bond or collateral is required to secure any deposit insofar as it is insured under federal law.

Sec. 15. [MONEY; ACCOUNTS AND INVESTMENTS.]

Subdivision 1. [RECEIPT AND APPLICATION.] All money received by the board must be deposited or invested by the treasurer and disposed of as the board directs in accordance with its budget. But any money that has been pledged or dedicated by the board to the payment of obligations or interest on them or expenses incident to them, or for any other specific purpose authorized by law, must be paid by the treasurer into the fund to which they have been pledged.

Subd. 2. [FUNDS AND ACCOUNTS.] The board's treasurer must establish funds and accounts as necessary or convenient to handle the receipts and disbursements of the board in an orderly fashion.

Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in the board's funds and accounts may be deposited in the official depositories of the board or invested as provided in this subdivision. The amount not currently needed or required by law to be kept in cash on deposit may be invested in obligations authorized by law for the investment of municipal sinking funds. The money may also be held under certificates of deposit issued by any official depository of the board. All investments by the board must conform to an investment policy adopted by the board as amended from time to time.

Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds issued by the board for the acquisition and betterment of the district disposal system, and the use, other than investment, of all money on hand in any sinking fund or funds of the board must be governed by Minnesota Statutes, chapter 475, this article, and the resolutions authorizing the issuance of the bonds. The bond proceeds, when received, must be transferred to the treasurer of the board for safekeeping, investment, and payment of the costs for which they were issued.

Subd. 5. [AUDIT.] The board must provide for and pay the cost of an independent annual audit of its official books and records by the state auditor or a certified public accountant.

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Sec. 16. [GENERAL POWERS OF BOARD.]

Subdivision 1. [ALL NECESSARY OR CONVENIENT POWERS.] The board has powers necessary or convenient to discharge the duties imposed upon it by law. The powers include those specified in this article, but the express grant or enumeration of powers does not limit the generality or scope of the grant of power in this subdivision.

Subd. 2. [LAWSUITS.] The board may sue or be sued.

Subd. 3. [CONTRACTS.] The board may enter into any contract necessary or proper for the exercise of its powers or the accomplishment of its purposes.

Subd. 4. [RULES.] The board may adopt rules relating to the board's responsibilities and may provide penalties not exceeding the maximum penalty specified for a misdemeanor, and the cost of prosecution may be added to the penalties imposed. Any rule prescribing a penalty for violation must be published at least once in a newspaper having general circulation in the district. A violation may be prosecuted before any court in the district having jurisdiction of misdemeanor, and every court has jurisdiction of violations. A peace officer of any municipality in the district may make arrests for violations committed anywhere in the district in the manner and with the effect as for violations of municipal ordinances or for statutory misdemeanors. All fines collected must be deposited in the treasury of the board, or may be allocated between the board and the municipality in which the prosecution occurs on terms agreed to by the board and the municipality.

Subd. 5. [GIFTS; GRANTS.] The board may accept gifts, may apply for and accept grants or loans of money or other property from the United States, the state, or any person for any of its purposes, may enter into any agreement required to get the gift, grant, loan, or other property; and may hold, use, and dispose of money or property in accordance with the terms of the gift, grant, loan or agreement. With respect to any loans or grants of funds or real or personal property or other assistance from any state or federal government or any agency or instrumentality of the government, the board may contract to do and perform all acts and things required as a condition or consideration under state or federal law or rule or regulation, whether or not included among the powers expressly granted to the board in this article.

Subd. 6. [JOINT POWERS.] The board may act under Minnesota Statutes, section 471.59, or any other appropriate law providing for joint or cooperative action between government units.

Subd. 7. [RESEARCH; HEARINGS; INVESTIGATIONS; ADVISE.] The board may conduct research studies and programs, collect and analyze data, prepare reports, maps, charts, and tables, and conduct all necessary hearings and investigations in connection with the design, construction, and operation of the district disposal system, and may advise and assist other government units on system planning matters within the scope of its powers, duties, and objectives, and may provide at the request of any governmental unit other technical and administrative assistance as the board considers appropriate for the government unit to carry out the powers and duties vested in the government unit under this article or imposed on or by the board.

Subd. 8. [EMPLOYEES; CONTRACTORS; INSURANCE.] The board may employ on the terms it considers advisable, persons or firms performing engineering, legal, or other services of a professional nature; require any employee to get and file with it an individual bond or fidelity insurance policy; and procure insurance in the amounts it considers necessary against liability of the board or its officers or both, for personal injury or death and property damage or destruction, with the force and effect stated in Minnesota Statutes, chapter 466, and against risks of damage to or destruction of any of its facilities, equipment, or other property as it considers necessary.

Subd. 9. [PROPERTY.] The board may acquire by purchase, lease, condemnation, gift, or grant, real or personal property including positive and negative easements and water and air rights, and it may construct, enlarge, improve, replace, repair, maintain, and operate any interceptor, treatment works, or water facility determined to be necessary

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or convenient for the collection and disposal of sewage in the district. Any local government unit and the commissioners of transportation and natural resources may convey to or permit the use of these facilities owned or controlled by the board, subject to the rights of the holders of any bonds issued with respect to them with or without compensation and without an election or approval by any other government unit or agency. All powers conferred by this subdivision may be exercised both within or outside the district as may be necessary for the exercise by the board of its powers or the accomplishment of its purposes. The board may hold, lease, convey, or otherwise dispose of such property for its purposes, upon the terms and in the manner it deems advisable. Unless otherwise provided, the right to acquire lands and property rights by condemnation must be exercised in accordance with Minnesota Statutes, chapter 117, and must apply to any property or interest in property owned by any local government unit. Property devoted to an actual public use at the time, or held to be devoted to such use within a reasonable time, must not be so acquired unless a court of competent jurisdiction determines that the use proposed by the board is paramount. In case of property in actual public use, the board may take possession of any property of which condemnation proceedings have begun at any time after the issuance of a court order appointing commissioners for its condemnation.

Subd. 10. [RIGHTS-OF-WAY.] The board may construct or maintain its systems or facilities in, along, on, under, over, or through public waters, streets, bridges, viaducts, and other public right-of-way without first getting a franchise from any county or local government unit having jurisdiction over them. The facilities must be constructed and maintained in accordance with the ordinances and resolutions of the county or government unit relating to construction, installation, and maintenance of similar facilities on public properties and must not unnecessarily obstruct the public use of the rights-of-way.

Subd. 11. [DISPOSAL OF PROPERTY.] The board may sell, lease, or otherwise dispose of any real or personal property acquired by it that is no longer required to accomplish its purposes. The property may be sold in the manner provided by Minnesota Statutes, section 469.065, insofar as practical. The board may give notice of sale it considers appropriate. When the board determines that any property or any part of the district disposal system that has been acquired from a local government unit without compensation is no longer required, but is required as a local facility by the government unit from which is was acquired, the board may by resolution transfer it to the government unit.

Subd. 12. [JOINT OPERATIONS.] The board may contract with the United States or an agency of it, any state or agency of it, or any regional public planning body in the state with jurisdiction over any part of the district, or any other municipal or public corporation, or governmental subdivision in any state, for the joint use of any facility owned by the board or the entity, for the operation by the entity of any system or facility of the board, or for the performance on the board's behalf of any service including, but not limited to, planning, on the terms that may be agreed to by the contracting parties. Unless designated by the board as a local sanitary sewer facility, any treatment works or interceptor jointly used, or operated on behalf of the board, as provided in this subdivision, must be considered to be operated by the board to include the facilities in the district disposal system.

Sec. 17. [LOCAL FACILITIES.]

Subdivision 1. [SANITARY SEWER FACILITIES.] Except as otherwise provided in this article, local government units must retain responsibility for the planning, design, acquisition, betterment, operation, administration, and maintenance of all local sanitary sewer facilities as provided by law.

Subd. 2. [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY SEWER FACILITIES.] The board must upon request of any government unit assume, either alone or jointly with the local government unit, all or any part of the responsibility of the local government unit described in subdivision 1. Except as provided in subdivision 4 and to exercise the responsibility, the board has all the powers and duties elsewhere conferred in this article with the same force and effect as if the local sanitary sewer facilities were a part of the district disposal system.

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Subd. 3. [WATER AND STREET FACILITIES.] The board may, on request of any governmental unit, enter into an agreement under which the board may assume, either alone or jointly with such unit, the responsibility to get and construct water and street facilities in conjunction with any project for the acquisition or betterment of the district disposal system or any project undertaken by the board under subdivision 2. Except as provided in subdivision 4, and to exercise any responsibilities under this subdivision, the board has all the powers and duties elsewhere conferred in this article with the same force and effect as if the water or street facilities were a part of the district disposal system.

Subd. 4. [ALLOCATION OF CURRENT COSTS.] All current costs attributable to responsibilities assumed by the board over local sanitary sewer facilities and water and street facilities as provided in this section must be allocated solely to the local unit for or with whom the responsibilities are assumed on the terms and over a period as the board determines to be equitable and in the best interest of the district. If two or more government units form a region in accordance with this section all or part of the current costs attributable to the region must, at the request of its joint board, be allocated to the region and provided in the agreement establishing the region.

Subd. 5. [PART OF DISTRICT SYSTEM.] This section or any other part of this article does not prevent the board from including, where appropriate, treatment works or interceptors, previously designated or treated as local sanitary sewer facilities, as a part of the district disposal system.

Sec. 18. [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE DISTRICT.]

The board may contract with the United States or any agency of it, any state or any agency of it, or any municipal or public corporation, governmental subdivision or agency, or political subdivision in any state, outside the jurisdiction of the board, for furnishing to the entities any services which the board may furnish to local government units in the district under this article including, but not limited to, planning for and the acquisition, betterment, operation, administration, and maintenance of any or all interceptors, treatment works, and local sanitary sewer facilities; if the board may further include as one of the terms of the contract that the entity also pay to the board an amount as may be agreed upon as a reasonable estimate of the proportionate share properly allocable to the entity of costs of acquisition, betterment, and debt service previously allocated to local government units in the district. When the payments are made by the entities to the board, they must be applied in reduction of the total amount of costs allocated after that to each local government unit in the district, on the equitable basis the board considers to be in the best interest of the district. Any municipality in the state may enter into the contract and perform all acts and things required as a condition or consideration for it consistent with the purpose of this article, whether or not included among the powers otherwise granted to the municipality by law or charter.

Sec. 19. [CONSTRUCTION, MATERIALS, SUPPLIES, EQUIPMENT; CONTRACTS.]

Subdivision 1. [PLANS AND SPECIFICATIONS.] When the board orders a project involving the acquisition or betterment of a part of the district disposal system, it must cause plans and specifications of this project to be made, or if previously made, to be modified, if necessary, and to be approved by the agency if required, and after any required approval by the agency, one or more contracts for work and materials called for by the plans and specification may be awarded as provided in this section.

Subd. 2. [UNIFORM MUNICIPAL CONTRACTING LAW.] All contracts for work to be done or for purchases of materials, supplies, or equipment must be done in accordance with Minnesota Statutes, section 471.345.

Sec. 20. [ANNEXATION, WITHDRAWAL OF TERRITORY.]

Subdivision 1. [ANNEXATION.] Any municipality in Douglas county, upon resolution adopted by a four-fifths vote of its governing body, may petition the board for annexation to the district of the area then comprising the municipality or any part of it and, if accepted by the board, the area must be considered annexed to the district and

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subject to the jurisdiction of the board under the terms and provisions of this article. The territory so annexed is subject to taxation and assessment under this article and is subject to taxation by the board like other property in the district for the payment of principal and interest thereafter becoming due on general obligations of the board, whether authorized or issued before or after the annexation. The board may condition approval of the annexation upon the contribution, by or on behalf of the municipality petitioning for annexation, to the board of an amount as may be agreed upon as being a reasonable estimate of the proportionate share, properly allocable to the municipality, of cost or acquisition, betterment, and debt service previously allocated to local government units in the district, on the terms as may be agreed upon and in place of or in addition to further conditions as the board deems in the best interests of the district. Notwithstanding any other provisions of this article to the contrary, the conditions established for annexation may include the requirement that the annexed municipality pay for, contract for, and oversee the construction of local sanitary sewer facilities and interceptor sewers. To pay the contribution or satisfy any other condition established by the board, the municipality petitioning annexation may exercise the powers conferred in section 9. When the contributions are made by the municipality to the board, they must be applied to reduce the total amount of costs thereafter allocated to each local government unit in the district, on the equitable basis as the board considers to be in the best interests of the district, applying so far as practicable and appropriate the criteria set forth in section 8, subdivision 2. On annexation of the territory, the secretary of the board must certify to the auditor and treasurer of the county in which the municipality is located the fact of the annexation and a legal description of the territory annexed.

Subd. 2. [WITHDRAWALS.] A municipality may withdraw from the district by resolution of its governing body. The municipality must notify the board of the district of the withdrawal by providing a copy of the resolution at least two years in advance of the proposed withdrawal. Unless the district and the withdrawing member agree otherwise by action of their governing bodies, the taxable property of the withdrawing member is subject to its required property tax levies under this article for two taxes payable years following the notification of the withdrawal and the withdrawing member retains any rights, obligations, and liabilities obtained or incurred during its participation.

Sec. 21. [PROPERTY EXEMPT FROM TAXATION.]

Any properties, real or personal, owned, leased, controlled, used, or occupied by the sanitary sewer board for any purpose under this article are declared to be acquired, owned, leased, controlled, used, and occupied for public, governmental, and municipal purposes, and are exempt from taxation by the state or any political subdivision of the state; but the properties are subject to special assessments levied by a political subdivision for a local improvement in amounts proportionate to and not exceeding the special benefit received by the properties from the improvement. No possible use of any of the properties in any manner different from their use as part of the disposal system at the time may be considered in determining the special benefit received by the properties. All of the assessments are subject to final approval by the board, whose determination of the benefits is conclusive upon the political subdivision levying the assessment.

Sec. 22. [RELATION TO EXISTING LAWS.]

This article prevails over any law or charter inconsistent with it. The powers conferred on the board under this article do not diminish or supersede the powers conferred on the agency by Minnesota Statutes, chapters 115 and 116.

Sec. 23. [APPLICATION; EFFECTIVE DATE; LOCAL APPROVAL; OPT IN OR OUT.]

Subdivision 1. [APPLICATION.] This article applies to the townships of Brandon, Carlos, LaGrand, Leaf Valley, Miltona, and Moe, all in Douglas county.

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Subd. 2. [EFFECTIVE DATE; LOCAL APPROVAL.] This article is effective the day after a fourth township of the six listed in subdivision 1 has timely completed compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3. For any other township listed in subdivision 1, the article is effective the day after timely completing compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3. A township listed in subdivision 1 that fails to timely complete compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, may petition for annexation to the district at a later time, as provided in this article.

ARTICLE 10

TAX INCREMENT FINANCING

Section 1. Minnesota Statutes 2002, section 469.174, subdivision 3, is amended to read:

Subd. 3. [BONDS.] (a) "Bonds" means any bonds~~, including refunding bonds, notes, interim certificates, debentures, interfund loans or advances,~~ or other obligations issued:

(1) by an authority under section 469.178; or ~~which were issued~~

(2) in aid of a project under any other law, except revenue bonds issued pursuant to sections 469.152 to 469.165, prior to August 1, 1979.

(b) Bonds or other obligations include:

(1) refunding bonds;

(2) notes;

(3) interim certificates;

(4) debentures; and

(5) interfund loans or advances qualifying under section 469.178, subdivision 7.

[EFFECTIVE DATE.] This section is effective at the same time as provided by Laws 2001, First Special Session chapter 5, article 15, section 3.

Sec. 2. Minnesota Statutes 2002, section 469.174, subdivision 6, is amended to read:

Subd. 6. [MUNICIPALITY.] "Municipality" means ~~any~~ the city, however organized, ~~and with respect to~~ in which the district is located, with the following exceptions:

(1) for a project undertaken pursuant to sections 469.152 to 469.165, "municipality" has the meaning given in sections 469.152 to 469.165~~, and with respect to~~; and

(2) for a project undertaken pursuant to sections 469.142 to 469.151, or a county or multicounty project undertaken pursuant to sections 469.004 to 469.008, "municipality" ~~also includes any~~ means the county in which the district is located.

[EFFECTIVE DATE.] This section is effective for districts for which the request for certification was made after July 31, 1979.

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Sec. 3. Minnesota Statutes 2002, section 469.174, subdivision 10, is amended to read:

Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more of the following conditions, reasonably distributed throughout the district, exists:

(1) parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; or

(2) the property consists of vacant, unused, underused, inappropriately used, or infrequently used railyards, rail storage facilities, or excessive or vacated railroad rights-of-way; or

(3) tank facilities, or property whose immediately previous use was for tank facilities, as defined in section 115C.02, subdivision 15, if the tank facilities:

(i) have or had a capacity of more than 1,000,000 gallons;

(ii) are located adjacent to rail facilities; and

(iii) have been removed or are unused, underused, inappropriately used, or infrequently used.

(b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.

(c) A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard. Items of evidence that support such a conclusion include recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence. Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3, clause (1). Failure of a building to be disqualified under the provisions of this paragraph is a necessary, but not a sufficient, condition to determining that the building is substandard.

(d) A parcel is deemed to be occupied by a structurally substandard building for purposes of the finding under paragraph (a) if all of the following conditions are met:

(1) the parcel was occupied by a substandard building within three years of the filing of the request for certification of the parcel as part of the district with the county auditor;

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(2) the substandard building was demolished or removed by the authority or the demolition or removal was financed by the authority or was done by a developer under a development agreement with the authority;

(3) the authority found by resolution before the demolition or removal that the parcel was occupied by a structurally substandard building and that after demolition and clearance the authority intended to include the parcel within a district; and

(4) upon filing the request for certification of the tax capacity of the parcel as part of a district, the authority notifies the county auditor that the original tax capacity of the parcel must be adjusted as provided by section 469.177, subdivision 1, paragraph ~~(h)~~ (f).

(e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or other similar structures.

(f) For districts consisting of two or more noncontiguous areas, each area must qualify as a redevelopment district under paragraph (a) to be included in the district, and the entire area of the district must satisfy paragraph (a).

[EFFECTIVE DATE.] The amendment to Minnesota Statutes, section 469.174, subdivision 10, paragraph (c), confirms the intent of the legislature with regard to the original provisions of the language contained in Minnesota Statutes 2002, section 469.174, subdivision 10, paragraph (c), and is retroactive to the effective date of the original language. The amendment to Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), is effective for districts for which the request for certification was received by the county after June 30, 2002.

Sec. 4. Minnesota Statutes 2002, section 469.174, subdivision 25, is amended to read:

Subd. 25. [INCREMENT.] "Increment," "tax increment," "tax increment revenues," "revenues derived from tax increment," and other similar terms for a district include:

(1) taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under section 469.177;

(2) the proceeds from the sale or lease of property, tangible or intangible, purchased by the authority with tax increments;

(3) ~~repayments of~~ principal and interest received on loans or other advances made by the authority with tax increments; and

(4) interest or other investment earnings on or from tax increments.

[EFFECTIVE DATE.] This section is effective for districts for which the request for certification was made after June 30, 1982, and payments of principal and interest received on loans or other advances that were made after June 30, 1997.

Sec. 5. Minnesota Statutes 2002, section 469.174, is amended by adding a subdivision to read:

Subd. 29. [QUALIFIED HOUSING DISTRICT.] "Qualified housing district" means:

(1) a housing district for a residential rental project or projects in which the only properties receiving assistance from revenues derived from tax increments from the district meet the rent restriction requirements and the low-income occupancy test for a qualified low-income housing project under section 42(g) of the Internal Revenue Code of 1986, as amended through December 31, 2002, regardless of whether the project actually receives a low-income housing credit; or

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(2) a housing district for a single-family homeownership project or projects, if 95 percent or more of the homes receiving assistance from tax increments from the district are purchased by qualified purchasers. A qualified purchaser means the first purchaser of a home after the tax increment assistance is provided whose income is at or below 85 percent of the median gross income for a family of the same size as the purchaser. Median gross income is the greater of (i) area median gross income, or (ii) the statewide median gross income, as determined by the secretary of Housing and Urban Development.

[EFFECTIVE DATE.] This section applies to all districts for which the request for certification was made on or after January 1, 2002, and to all districts to which the definition of qualified housing districts under Minnesota Statutes 2000, section 273.1399, applied.

Sec. 6. Minnesota Statutes 2002, section 469.175, subdivision 1, is amended to read:

Subdivision 1. [TAX INCREMENT FINANCING PLAN.] A tax increment financing plan shall contain:

(1) a statement of objectives of an authority for the improvement of a project;

(2) a statement as to the development program for the project, including the property within the project, if any, that the authority intends to acquire;

(3) a list of any development activities that the plan proposes to take place within the project, for which contracts have been entered into at the time of the preparation of the plan, including the names of the parties to the contract, the activity governed by the contract, the cost stated in the contract, and the expected date of completion of that activity;

(4) identification or description of the type of any other specific development reasonably expected to take place within the project, and the date when the development is likely to occur;

(5) estimates of the following:

(i) cost of the project, including ~~administration~~ administrative expenses, except that if part of the cost of the project is paid or financed with increment from the tax increment financing district, the tax increment financing plan for the district must contain an estimate of the amount of the cost of the project, including administrative expenses, that will be paid or financed with tax increments from the district;

(ii) amount of bonded indebtedness to be incurred;

(iii) sources of revenue to finance or otherwise pay public costs;

(iv) the most recent net tax capacity of taxable real property within the tax increment financing district and within any subdistrict;

(v) the estimated captured net tax capacity of the tax increment financing district at completion; and

(vi) the duration of the tax increment financing district's and any subdistrict's existence;

(6) statements of the authority's alternate estimates of the impact of tax increment financing on the net tax capacities of all taxing jurisdictions in which the tax increment financing district is located in whole or in part. For purposes of one statement, the authority shall assume that the estimated captured net tax capacity would be available to the taxing jurisdictions without creation of the district, and for purposes of the second statement, the authority shall assume that none of the estimated captured net tax capacity would be available to the taxing jurisdictions without creation of the district or subdistrict;

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(7) identification and description of studies and analyses used to make the determination set forth in subdivision 3, clause (2); and

(8) identification of all parcels to be included in the district or any subdistrict.

[EFFECTIVE DATE.] This section applies to districts for which the request for certification was made after July 31, 1979, and is effective for tax increment financing plans and modifications approved after June 30, 2003.

Sec. 7. Minnesota Statutes 2002, section 469.175, subdivision 3, is amended to read:

Subd. 3. [MUNICIPALITY APPROVAL.] (a) A county auditor shall not certify the original net tax capacity of a tax increment financing district until the tax increment financing plan proposed for that district has been approved by the municipality in which the district is located. If an authority that proposes to establish a tax increment financing district and the municipality are not the same, the authority shall apply to the municipality in which the district is proposed to be located and shall obtain the approval of its tax increment financing plan by the municipality before the authority may use tax increment financing. The municipality shall approve the tax increment financing plan only after a public hearing thereon after published notice in a newspaper of general circulation in the municipality at least once not less than ten days nor more than 30 days prior to the date of the hearing. The published notice must include a map of the area of the district from which increments may be collected and, if the project area includes additional area, a map of the project area in which the increments may be expended. The hearing may be held before or after the approval or creation of the project or it may be held in conjunction with a hearing to approve the project.

(b) Before or at the time of approval of the tax increment financing plan, the municipality shall make the following findings, and shall set forth in writing the reasons and supporting facts for each determination:

(1) that the proposed tax increment financing district is a redevelopment district, a renewal or renovation district, a housing district, a soils condition district, or an economic development district; if the proposed district is a redevelopment district or a renewal or renovation district, the reasons and supporting facts for the determination that the district meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2), or subdivision 10a, must be documented in writing and retained and made available to the public by the authority until the district has been terminated;

(2) that ~~the proposed development or redevelopment~~, in the opinion of the municipality,:

(i) the proposed development or redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; and ~~that~~

(ii) the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the plan. The requirements of this ~~clause~~ item do not apply if the district is a qualified housing district~~, as defined in section 273.1399, subdivision 1~~;

(3) that the tax increment financing plan conforms to the general plan for the development or redevelopment of the municipality as a whole;

(4) that the tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise;

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(5) that the municipality elects the method of tax increment computation set forth in section 469.177, subdivision 3, clause (b), if applicable.

(c) When the municipality and the authority are not the same, the municipality shall approve or disapprove the tax increment financing plan within 60 days of submission by the authority. When the municipality and the authority are not the same, the municipality may not amend or modify a tax increment financing plan except as proposed by the authority pursuant to subdivision 4. Once approved, the determination of the authority to undertake the project through the use of tax increment financing and the resolution of the governing body shall be conclusive of the findings therein and of the public need for the financing.

(d) For a district that is subject to the requirements of paragraph (b), clause (2), item (ii), the municipality's statement of reasons and supporting facts must include all of the following:

(1) an estimate of the amount by which the market value of the site will increase without the use of tax increment financing;

(2) an estimate of the increase in the market value that will result from the development or redevelopment to be assisted with tax increment financing; and

(3) the present value of the projected tax increments for the maximum duration of the district permitted by the tax increment financing plan.

(e) For purposes of this subdivision, "site" means the parcels on which the development or redevelopment to be assisted with tax increment financing will be located.

[EFFECTIVE DATE.] This section is effective for determinations made after June 30, 2003, except the provisions of paragraph (e) apply to requests for certification of tax increment districts made after June 30, 1995.

Sec. 8. Minnesota Statutes 2002, section 469.175, subdivision 4, is amended to read:

Subd. 4. [MODIFICATION OF PLAN.] (a) A tax increment financing plan may be modified by an authority~~, provided that~~.

(b) The authority may make the following modifications only upon the notice and after the discussion, public hearing, and findings required for approval of the original plan:

(1) any reduction or enlargement of geographic area of the project or tax increment financing district, that does not meet the requirements of paragraph (e);

(2) increase in amount of bonded indebtedness to be incurred~~, including~~;

(3) a determination to capitalize interest on the debt if that determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized,;

(4) increase in the portion of the captured net tax capacity to be retained by the authority,;

(5) increase in ~~total estimated tax increment expenditures~~ the estimate of the cost of the project, including administrative expenses, that will be paid or financed with tax increment from the district; or

(6) designation of additional property to be acquired by the authority ~~shall be approved upon the notice and after the discussion, public hearing, and findings required for approval of the original plan; provided that~~.

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(c) If an authority changes the type of district ~~from housing, redevelopment, or economic development~~ to another type of district, this change ~~shall~~ is not ~~be considered~~ a modification but ~~shall require~~ requires the authority to follow the procedure set forth in sections 469.174 to 469.179 for adoption of a new plan, including certification of the net tax capacity of the district by the county auditor.

(d) If a redevelopment district or a renewal and renovation district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2), or subdivision 10a, must be documented.

(e) The requirements of ~~this~~ paragraph (b) do not apply if (1) the only modification is elimination of parcels from the project or district and (2)(A) the current net tax capacity of the parcels eliminated from the district equals or exceeds the net tax capacity of those parcels in the district's original net tax capacity or (B) the authority agrees that, notwithstanding section 469.177, subdivision 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated from the district. The authority must notify the county auditor of any modification that reduces or enlarges the geographic area of a district or a project area.

~~(b)~~ (f) The geographic area of a tax increment financing district may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor or after August 1, 1984, for tax increment financing districts authorized prior to August 1, 1979.

[EFFECTIVE DATE.] This section applies to districts for which the request for certification was made after June 30, 2003. The development authority may elect to have this section apply to a tax increment financing plan or modification that was approved before July 1, 2003, by adopting before January 1, 2004, a modification of the plan that states the amount of the cost of the project, including administrative expenses, that will be paid or financed with tax increments from the district. Section 469.175, subdivision 4, paragraph (b), does not apply to a modification adopted under this section if the modification is exclusively for the purpose of stating the amount of the cost of the project, including administrative expenses, that will be paid or financed with tax increment from the district. For districts for which the request for certification was made after July 31, 1979, and for which this section is not effective, the total estimated tax increment expenditures are determined by considering all of the information in the tax increment financing plan and exhibits to the plan about estimated sources and uses of funds.

For districts for which certification was requested after June 30, 1982, and before July 1, 2003, and for which the plan has not been amended after July 1, 2003, the limit on administrative expenses equals the greater of (1) nine percent of the increments for the district or (2) the amount determined under section 469.176, subdivision 3, and the tax increment financing plan.

Sec. 9. Minnesota Statutes 2002, section 469.175, subdivision 6, is amended to read:

Subd. 6. [ANNUAL FINANCIAL REPORTING.] (a) The state auditor shall develop a uniform system of accounting and financial reporting for tax increment financing districts. The system of accounting and financial reporting shall, as nearly as possible:

(1) provide for full disclosure of the sources and uses of public funds in the district;

(2) permit comparison and reconciliation with the affected local government's accounts and financial reports;

(3) permit auditing of the funds expended on behalf of a district, including a single district that is part of a multidistrict project or that is funded in part or whole through the use of a development account funded with tax increments from other districts or with other public money;

(4) be consistent with generally accepted accounting principles.

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(b) The authority must annually submit to the state auditor a financial report in compliance with paragraph (a). Copies of the report must also be provided to the county auditor and to the governing body of the municipality, if the authority is not the municipality. To the extent necessary to permit compliance with the requirement of financial reporting, the county and any other appropriate local government unit or private entity must provide the necessary records or information to the authority or the state auditor as provided by the system of accounting and financial reporting developed pursuant to paragraph (a). The authority must submit the annual report for a year on or before August 1 of the next year.

(1) the original net tax capacity of the district and any subdistrict under section 469.177, subdivision 1;

(2) the net tax capacity for the reporting period of the district and any subdistrict;

(3) the captured net tax capacity of the district;

(4) any fiscal disparity deduction from the captured net tax capacity under section 469.177, subdivision 3;

(5) the captured net tax capacity retained for tax increment financing under section 469.177, subdivision 2, paragraph (a), clause (1);

(6) any captured net tax capacity distributed among affected taxing districts under section 469.177, subdivision 2, paragraph (a), clause (2);

(7) the type of district;

(8) the date the municipality approved the tax increment financing plan and the date of approval of any modification of the tax increment financing plan, the approval of which requires notice, discussion, a public hearing, and findings under subdivision 4, paragraph (a);

(9) the date the authority first requested certification of the original net tax capacity of the district and the date of the request for certification regarding any parcel added to the district;

(10) the date the county auditor first certified the original net tax capacity of the district and the date of certification of the original net tax capacity of any parcel added to the district;

(11) the month and year in which the authority has received or anticipates it will receive the first increment from the district;

(12) the date the district must be decertified;

(13) for the reporting period and prior years of the district, the actual amount received from, at least, the following categories:

(i) tax increments paid by the captured net tax capacity retained for tax increment financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding any excess taxes;

(ii) tax increments that are interest or other investment earnings on or from tax increments;

(iii) tax increments that are proceeds from the sale or lease of property, tangible or intangible, purchased by the authority with tax increments;

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(iv) tax increments that are repayments of loans or other advances made by the authority with tax increments;

(v) bond or loan proceeds;

(vi) special assessments;

(vii) grants; and

(viii) transfers from funds not exclusively associated with the district;

(14) for the reporting period and for the prior years of the district, ~~the amount budgeted under the tax increment financing plan, and~~ the actual amount expended for, at least, the following categories:

(i) acquisition of land and buildings through condemnation or purchase;

(ii) site improvements or preparation costs;

(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or other similar public improvements;

(iv) administrative costs, including the allocated cost of the authority;

(v) public park facilities, facilities for social, recreational, or conference purposes, or other similar public improvements; and

(vi) transfers to funds not exclusively associated with the district;

(15) for properties sold to developers, the total cost of the property to the authority and the price paid by the developer;

(16) the amount of any payments and the value of any in-kind benefits, such as physical improvements and the use of building space, that are paid or financed with tax increments and are provided to another governmental unit other than the municipality during the reporting period;

(17) the amount of any payments for activities and improvements located outside of the district that are paid for or financed with tax increments;

(18) the amount of payments of principal and interest that are made during the reporting period on any nondefeased:

(i) general obligation tax increment financing bonds;

(ii) other tax increment financing bonds; and

(iii) notes and pay-as-you-go contracts;

(19) the principal amount, at the end of the reporting period, of any nondefeased:

(i) general obligation tax increment financing bonds;

(ii) other tax increment financing bonds; and

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(iii) notes and pay-as-you-go contracts;

(20) the amount of principal and interest payments that are due for the current calendar year on any nondefeased:

(i) general obligation tax increment financing bonds;

(ii) other tax increment financing bonds; and

(iii) notes and pay-as-you-go contracts;

(21) if the fiscal disparities contribution under chapter 276A or 473F for the district is computed under section 469.177, subdivision 3, paragraph (a), the amount of increased property taxes imposed on other properties in the municipality that approved the tax increment financing plan as a result of the fiscal disparities contribution;

(22) whether the tax increment financing plan or other governing document permits increment revenues to be expended:

(i) to pay bonds, the proceeds of which were or may be expended on activities outside of the district;

(ii) for deposit into a common bond fund from which money may be expended on activities located outside of the district; or

(iii) to otherwise finance activities located outside of the tax increment financing district; ~~and~~

(23) the estimate, if any, contained in the tax increment financing plan of the amount of the cost of the project, including administrative expenses, that will be paid or financed with tax increment; and

(24) any additional information the state auditor may require.

(d) The commissioner of revenue shall prescribe the method of calculating the increased property taxes under paragraph (c), clause (21), and the form of the statement disclosing this information on the annual statement under subdivision 5.

(e) The reporting requirements imposed by this subdivision apply to districts certified before, on, and after August 1, 1979.

[EFFECTIVE DATE.] This section is effective beginning with the reports due in calendar year 2004.

Sec. 10. Minnesota Statutes 2002, section 469.176, subdivision 1c, is amended to read:

Subd. 1c. [DURATION LIMITS; PRE-1979 DISTRICTS.] (a) For tax increment financing districts created prior to August 1, 1979, no tax increment shall be paid to the authority after April 1, 2001, or the term of a nondefeased bond or obligation outstanding on April 1, 1990, secured by increments from the district or project area, whichever time is greater, provided that in no case will a tax increment be paid to an authority after August 1, 2009, from such a district. If a district's termination date is extended beyond April 1, 2001, because bonds were outstanding on April 1, 1990, with maturities extending beyond April 1, 2001, the following restrictions apply. No increment collected from the district may be expended after April 1, 2001, except to pay or ~~defease (i)~~ repay:

(1) bonds issued before April 1, 1990~~, or (ii)~~;

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(2) bonds issued to refund the principal of the outstanding bonds and pay associated issuance costs~~, provided the average maturity of the refunding bonds does not exceed the bonds refunded~~;

(3) administrative expenses of the district required to be paid under section 469.176, subdivision 4h, paragraph (a);

(4) transfers of increment permitted under section 469.1763, subdivision 6; and

(5) any advance or payment made by the municipality or the authority after June 1, 2002, to pay any bonds listed in clause (1) or (2).

(b) Each year, any increments from a district subject to this subdivision must be first applied to pay obligations listed under paragraph (a), clauses (1) and (2), and administrative expenses under paragraph (a), clause (3). Any remaining increments may be used for transfers of increments permitted under section 469.1763, subdivision 6, and to make payments under paragraph (a), clause (5).

(c) When sufficient money has been received to pay in full or defease obligations under paragraph (a), clauses (1), (2), and (5), the tax increment project or district must be decertified.

[EFFECTIVE DATE.] This section is effective the day following final enactment and applies to tax increment financing districts for which the request for certification was made before August 1, 1979.

Sec. 11. Minnesota Statutes 2002, section 469.176, subdivision 2, is amended to read:

Subd. 2. [EXCESS ~~TAX~~ INCREMENTS.] In any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the tax increment financing plan, including the amount necessary to cancel any tax levy as provided in section 475.61, subdivision 3, (a) The authority shall annually determine the amount of excess increments for a district, if any. This determination must be based on the tax increment financing plan in effect on December 31 of the year and the increments and other revenues received as of December 31 of the year.

(b) For purposes of this subdivision, "excess increments" equals the excess of:

(1) total increments collected from the district since its certification, reduced by any excess increments paid under paragraph (c), clause (4), for a prior year, over

(2) the total costs authorized by the tax increment financing plan to be paid with increments from the district, reduced, but not below zero, by the sum of:

(i) the amounts of those authorized costs that have been paid from sources other than tax increments from the district;

(ii) revenues, other than tax increments from the district, that are dedicated for or otherwise required to be used to pay those authorized costs and that the authority has received and that are not included in item (i); and

(iii) the amount of principal and interest obligations due on outstanding bonds after December 31 of the year and not prepaid under paragraph (c) in a prior year.

(1) prepay any outstanding bonds,;

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(2) discharge the pledge of tax increment ~~therefor,~~ for any outstanding bonds;

(3) pay into an escrow account dedicated to the payment of ~~such bond,~~ any outstanding bonds; or

(4) return the excess amount to the county auditor who shall distribute the excess amount to the ~~municipality~~ city or town, county, and school district in which the tax increment financing district is located in direct proportion to their respective local tax rates.

(d) The county auditor must report to the commissioner of children, families, and learning the amount of any excess tax increment distributed to a school district within 30 days of the distribution.

[EFFECTIVE DATE.] This section is effective for all tax increment financing districts, regardless of whether the request for certification was made before, on, or after August 1, 1979, and applies after August 1, 2003, except the amendment to paragraph (c), clause (4), applies retroactively to August 1, 1979.

Sec. 12. Minnesota Statutes 2002, section 469.176, subdivision 3, is amended to read:

Subd. 3. [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For districts for which certification was requested before August 1, 1979, or after June 30, 1982 and before August 1, 2001, no tax increment shall be used to pay any administrative expenses for a project which exceed ten percent of the total estimated tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for the project, whichever is less.

(b) For districts for which certification was requested after July 31, 1979, and before July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the total tax increment expenditures authorized by the tax increment financing plan or the total estimated tax increment expenditures for the district, whichever is less.

(c) For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay any administrative expenses for a project which exceed ten percent of total estimated tax increment expenditures authorized by the tax increment financing plan or the total tax increments, as defined in section 469.174, subdivision 25, clause (1), from the district, whichever is less.

[EFFECTIVE DATE.] This section is effective for districts for which the request for certification was made before, on, or after August 1, 1979.

Sec. 13. Minnesota Statutes 2002, section 469.176, subdivision 7, is amended to read:

Subd. 7. [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The authority may request inclusion in a tax increment financing district and the county auditor may certify the original tax capacity of a parcel or a part of a parcel that qualified under the provisions of section 273.111 or 273.112 or chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification only for:

(1) a district in which 85 percent or more of the planned buildings and facilities (determined on the basis of square footage) are a qualified manufacturing facility or a qualified distribution facility or a combination of both; or

(2) a qualified housing district ~~as defined in section 273.1399, subdivision 1~~.

(b)(1) A distribution facility means buildings and other improvements to real property that are used to conduct activities in at least each of the following categories:

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(i) to store or warehouse tangible personal property;

(ii) to take orders for shipment, mailing, or delivery;

(iii) to prepare personal property for shipment, mailing, or delivery; and

(iv) to ship, mail, or deliver property.

(2) A manufacturing facility includes space used for manufacturing or producing tangible personal property, including processing resulting in the change in condition of the property, and space necessary for and related to the manufacturing activities.

(3) To be a qualified facility, the owner or operator of a manufacturing or distribution facility must agree to pay and pay 90 percent or more of the employees of the facility at a rate equal to or greater than 160 percent of the federal minimum wage for individuals over the age of 20.

Sec. 14. Minnesota Statutes 2002, section 469.1763, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) For purposes of this section, the following terms have the meanings given.

(b) "Activities" means acquisition of property, clearing of land, site preparation, soils correction, removal of hazardous waste or pollution, installation of utilities, construction of public or private improvements, and other similar activities, but only to the extent that tax increment revenues may be spent for such purposes under other law.

(c) "Third party" means an entity other than (1) the person receiving the benefit of assistance financed with tax increments, or (2) the municipality or the development authority or other person substantially under the control of the municipality.

(d) "Revenues derived from tax increments paid by properties in the district" means only tax increment as defined in section 469.174, subdivision 25, clause (1), and does not include tax increment as defined in section 469.174, subdivision 25, clauses (2), (3), and (4).

[EFFECTIVE DATE.] This section is effective for districts for which the request for certification was made after April 30, 1990.

Sec. 15. Minnesota Statutes 2002, section 469.1763, subdivision 3, is amended to read:

Subd. 3. [FIVE-YEAR RULE.] (a) Revenues derived from tax increments are considered to have been expended on an activity within the district under subdivision 2 only if one of the following occurs:

(1) before or within five years after certification of the district, the revenues are actually paid to a third party with respect to the activity;

(2) bonds, the proceeds of which must be used to finance the activity, are issued and sold to a third party before or within five years after certification, the revenues are spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, reasonably expected to be spent before the end of the later of (i) the five-year period, or (ii) a reasonable temporary period within the meaning of the use of that term under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund;

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(3) binding contracts with a third party are entered into for performance of the activity before or within five years after certification of the district and the revenues are spent under the contractual obligation; or

(4) costs with respect to the activity are paid before or within five years after certification of the district and the revenues are spent to reimburse a party for payment of the costs, including interest on unreimbursed costs; or

(5) expenditures are made for housing purposes as permitted by subdivision 2, paragraph (b).

(b) For purposes of this subdivision, bonds include subsequent refunding bonds if the original refunded bonds meet the requirements of paragraph (a), clause (2).

[EFFECTIVE DATE.] This section is effective for expenditures made after June 30, 2003.

Sec. 16. Minnesota Statutes 2002, section 469.1763, subdivision 6, is amended to read:

Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This subdivision applies only to districts for which the request for certification was made before August 1, 2001, and without regard to whether the request for certification was made prior to August 1, 1979.

(b) The municipality for the district may transfer available increments from another tax increment financing district located in the municipality, if the transfer is necessary to eliminate a deficit in the district to which the increments are transferred. A deficit in the district for purposes of this subdivision means the lesser of the following two amounts:

(1)(i) the amount due during the calendar year to pay preexisting obligations of the district; minus

(ii) the total increments collected or to be collected from properties located within the district that are available for the calendar year including amounts collected in prior years that are currently available; plus

(iii) total increments from properties located in other districts in the municipality including amounts collected in prior years that are available to be used to meet the district's obligations under this section, excluding this subdivision, or other provisions of law (but excluding a special tax under section 469.1791 and the grant program under Laws 1997, chapter 231, article 1, section 19, or Laws 2001, First Special Session chapter 5); or

(2) the reduction in increments collected from properties located in the district for the calendar year as a result of the changes in class rates in Laws 1997, chapter 231, article 1; Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, and Laws 2001, First Special Session chapter 5, or the elimination of the general education tax levy under Laws 2001, First Special Session chapter 5.

(1) bonds issued and sold before August 1, 2001, or bonds issued pursuant to a binding contract requiring the issuance of bonds entered into before July 1, 2001, and bonds issued to refund such bonds or to reimburse expenditures made in conjunction with a signed contractual agreement entered into before August 1, 2001, to the extent that the bonds are secured by a pledge of increments from the tax increment financing district; and

(2) binding contracts entered into before August 1, 2001, to the extent that the contracts require payments secured by a pledge of increments from the tax increment financing district.

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(d) The municipality may require a development authority, other than a seaway port authority, to transfer available increments including amounts collected in prior years that are currently available for any of its tax increment financing districts in the municipality to make up an insufficiency in another district in the municipality, regardless of whether the district was established by the development authority or another development authority. This authority applies notwithstanding any law to the contrary, but applies only to a development authority that:

(1) was established by the municipality; or

(2) the governing body of which is appointed, in whole or part, by the municipality or an officer of the municipality or which consists, in whole or part, of members of the governing body of the municipality. The municipality may use this authority only after it has first used all available increments of the receiving development authority to eliminate the insufficiency and exercised any permitted action under section 469.1792, subdivision 3, for preexisting districts of the receiving development authority to eliminate the insufficiency.

(e) The authority under this subdivision to spend tax increments outside of the area of the district from which the tax increments were collected:

(1) ~~may only be exercised after obtaining approval of the use of the increments, in writing, by the commissioner of revenue;~~

~~(2)~~ is an exception to the restrictions under section 469.176, subdivision 4i, and the other provisions of this section, and the percentage restrictions under subdivision 2 must be calculated after deducting increments spent under this subdivision from the total increments for the district; and

~~(3)~~ (2) applies notwithstanding the provisions of the Tax Increment Financing Act in effect for districts for which the request for certification was made before June 30, 1982, or any other law to the contrary.

(f) If a preexisting obligation requires the development authority to pay an amount that is limited to the increment from the district or a specific development within the district and if the obligation requires paying a higher amount to the extent that increments are available, the municipality may determine that the amount due under the preexisting obligation equals the higher amount and may authorize the transfer of increments under this subdivision to pay up to the higher amount. The existence of a guarantee of obligations by the individual or entity that would receive the payment under this paragraph is disregarded in the determination of eligibility to pool under this subdivision. The authority to transfer increments under this paragraph may only be used to the extent that the payment of all other preexisting obligations in the municipality due during the calendar year have been satisfied.

[EFFECTIVE DATE.] This section is effective retroactively to January 2, 2002, and thereafter.

Sec. 17. Minnesota Statutes 2002, section 469.177, subdivision 1, is amended to read:

Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or after adoption of a tax increment financing plan, the auditor of any county in which the district is situated shall, upon request of the authority, certify the original net tax capacity of the tax increment financing district and that portion of the district overlying any subdistrict as described in the tax increment financing plan and shall certify in each year thereafter the amount by which the original net tax capacity has increased or decreased as a result of a change in tax exempt status of property within the district and any subdistrict, reduction or enlargement of the district or changes pursuant to subdivision 4.

(b) ~~For districts approved under section 469.175, subdivision 3, or parcels added to existing districts after May 1, 1988,~~ If the classification under section 273.13 of property located in a district changes to a classification that has a different assessment ratio, the original net tax capacity of that property must be redetermined at the time when its use is changed as if the property had originally been classified in the same class in which it is classified after its use is changed.

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(c) The amount to be added to the original net tax capacity of the district as a result of previously tax exempt real property within the district becoming taxable equals the net tax capacity of the real property as most recently assessed pursuant to section 273.18 or, if that assessment was made more than one year prior to the date of title transfer rendering the property taxable, the net tax capacity assessed by the assessor at the time of the transfer. If improvements are made to tax exempt property after certification of the district and before the parcel becomes taxable, the assessor shall, at the request of the authority, separately assess the estimated market value of the improvements. If the property becomes taxable, the county auditor shall add to original net tax capacity, the net tax capacity of the parcel, excluding the separately assessed improvements. If substantial taxable improvements were made to a parcel after certification of the district and if the property later becomes tax exempt, in whole or part, as a result of the authority acquiring the property through foreclosure or exercise of remedies under a lease or other revenue agreement or as a result of tax forfeiture, the amount to be added to the original net tax capacity of the district as a result of the property again becoming taxable is the amount of the parcel's value that was included in original net tax capacity when the parcel was first certified. The amount to be added to the original net tax capacity of the district as a result of enlargements equals the net tax capacity of the added real property as most recently certified by the commissioner of revenue as of the date of modification of the tax increment financing plan pursuant to section 469.175, subdivision 4.

(d) ~~For districts approved under section 469.175, subdivision 3, or parcels added to existing districts after May 1, 1988,~~ If the net tax capacity of a property increases because the property no longer qualifies under the Minnesota Agricultural Property Tax Law, section 273.111; the Minnesota Open Space Property Tax Law, section 273.112; or the Metropolitan Agricultural Preserves Act, chapter 473H, or because platted, unimproved property is improved or three years pass after approval of the plat under section 273.11, subdivision 1, the increase in net tax capacity must be added to the original net tax capacity.

(e) The amount to be subtracted from the original net tax capacity of the district as a result of previously taxable real property within the district becoming tax exempt, or a reduction in the geographic area of the district, shall be the amount of original net tax capacity initially attributed to the property becoming tax exempt or being removed from the district. If the net tax capacity of property located within the tax increment financing district is reduced by reason of a court-ordered abatement, stipulation agreement, voluntary abatement made by the assessor or auditor or by order of the commissioner of revenue, the reduction shall be applied to the original net tax capacity of the district when the property upon which the abatement is made has not been improved since the date of certification of the district and to the captured net tax capacity of the district in each year thereafter when the abatement relates to improvements made after the date of certification. The county auditor may specify reasonable form and content of the request for certification of the authority and any modification thereof pursuant to section 469.175, subdivision 4.

(f) If a parcel of property contained a substandard building that was demolished or removed and if the authority elects to treat the parcel as occupied by a substandard building under section 469.174, subdivision 10, paragraph (b), the auditor shall certify the original net tax capacity of the parcel using the greater of (1) the current net tax capacity of the parcel, or (2) the estimated market value of the parcel for the year in which the building was demolished or removed, but applying the class rates for the current year.

[EFFECTIVE DATE.] This section applies to all districts, regardless of whether the request for certification was made before, on, or after August 1, 1979, beginning for taxes payable in 2004. This section requires adjustment of the original tax capacity under Minnesota Statutes, section 469.177, subdivision 7, of all parcels for class rate changes enacted after May 1, 1988, regardless of whether the classification of the property has changed after the certification of the district. This section requires adjustment of original tax capacity for changes in the classification of the property, only if the change in use occurs after December 31, 2002.

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Sec. 18. Minnesota Statutes 2002, section 469.177, subdivision 12, is amended to read:

Subd. 12. [DECERTIFICATION OF TAX INCREMENT FINANCING DISTRICT.] The county auditor shall decertify a tax increment financing district when the earliest of the following times is reached:

(1) the applicable maximum duration limit under section 469.176, subdivisions 1a to 1g;

(2) the maximum duration limit, if any, provided by the municipality pursuant to section 469.176, subdivision 1;

(3) the time of decertification specified in section 469.1761, subdivision 4, if the commissioner of revenue issues an order of noncompliance and the maximum duration limit for economic development districts has been exceeded;

(4) upon completion of the required actions to allow decertification under section 469.1763, subdivision 4; or

(5) upon the later of receipt by the county auditor of a written request for decertification from the authority that requested certification of the original net tax capacity of the district or its successor or the decertification date specified in the request.

[EFFECTIVE DATE.] This section is effective for all districts regardless of whether the request for certification was made before, on, or after August 1, 1979.

Sec. 19. Minnesota Statutes 2002, section 469.1771, subdivision 4, is amended to read:

Subd. 4. [LIMITATIONS.] (a) If the increments are pledged to repay bonds that were issued before the lawsuit was filed under this section, the damages under this section may not exceed the greater of (1) ten percent of the expenditures or revenues derived from increment, or (2) the amount of available revenues after paying debt services due on the bonds.

(b) The court may abate all or part of the amount if it determines the unauthorized action or failure to perform the required action was taken in good faith and the payment would work an undue hardship on the authority or municipality.

[EFFECTIVE DATE.] This section is effective for violations occurring after December 31, 1990.

Sec. 20. Minnesota Statutes 2002, section 469.1771, is amended by adding a subdivision to read:

Subd. 7. [LIMITATIONS ON ACTIONS.] An action under subdivision 1, paragraph (a), contesting the validity of a determination by an authority under section 469.175, subdivision 3, must be commenced within the later of:

(1) 180 days after the municipality's approval under section 469.175, subdivision 3; or

(2) 90 days after the request for certification of the district is filed with the county auditor under section 469.177, subdivision 1.

[EFFECTIVE DATE.] This section is effective for actions filed after the day following final enactment.

Sec. 21. Minnesota Statutes 2002, section 469.178, subdivision 7, is amended to read:

Subd. 7. [INTERFUND LOANS.] The authority or municipality may advance or loan money to finance expenditures under section 469.176, subdivision 4, from its general fund or any other fund under which it has legal authority to do so. The loan or advance must be ~~approved~~ authorized, by resolution of the governing body, before

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money is transferred, advanced, or spent, whichever is earliest. The resolution may generally grant to the authority the power to make interfund loans under one or more tax increment financing plans or for one or more districts. The terms and conditions for repayment of the loan must be provided in writing and include, at a minimum, the principal amount, the interest rate, and maximum term. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under section 270.75 or 549.09 as of the date or advance is made, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under section 270.75 or 549.09 are from time to time adjusted.

[EFFECTIVE DATE.] This section is effective for loans and advances made after July 31, 2001, and for districts for which the request for certification was made after July 31, 1979.

Sec. 22. Minnesota Statutes 2002, section 469.1791, subdivision 3, is amended to read:

Subd. 3. [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city may establish a special taxing district within a tax increment financing district under this section only if the conditions under paragraphs (b) and (c) are met or if the city elects to exercise the authority under paragraph (d).

(b) The city has determined that:

(1) total tax increments from the district, including unspent increments from previous years and increments transferred under paragraph (c), will be insufficient to pay the amounts due in a year on preexisting obligations; and

(2) this insufficiency of increments resulted from the reduction in property tax class rates enacted in the 1997 and 1998 legislative sessions.

(c) The city has agreed to transfer any available increments from other tax increment financing districts in the city to pay the preexisting obligations of the district under section 469.1763, subdivision 6. This requirement does not apply to any available increments of a qualified housing district~~, as defined in section 273.1399, subdivision 1~~.

(d) If a tax increment financing district does not qualify under paragraphs (b) and (c), the governing body may elect to establish a special taxing district under this section. If the city elects to exercise this authority, increments from the tax increment financing district and the proceeds of the tax imposed under this section may only be used to pay preexisting obligations and reasonable administrative expenses of the authority for the tax increment financing district. The tax increment financing district must be decertified when all preexisting obligations have been paid.

Sec. 23. Minnesota Statutes 2002, section 469.1792, subdivision 1, is amended to read:

Subdivision 1. [SCOPE.] This section applies only to an authority with a preexisting district for which:

(1) the increments from the district were insufficient to pay preexisting obligations as a result of the class rate changes or the elimination of the state-determined general education property tax levy under this act, or both; or

(2)(i) the development authority has a binding contract, entered into before August 1, 2001, with a person requiring the authority to pay to the person an amount that may not exceed the increment from the district or a specific development within the district; and

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(ii) the authority is unable to pay the full amount under the contract from the pledged increments or other increments from the district that would have been due if the class rate changes or elimination of the state-determined general education property tax levy or both had not been made under Laws 2001, First Special Session chapter 5.

[EFFECTIVE DATE.] This section is effective retroactively to the effective date of the original enactment of section 469.1792, subdivision 1, and applies to all districts for which the request for certification was made after July 1, 1979.

Sec. 24. Minnesota Statutes 2002, section 469.1792, subdivision 2, is amended to read:

Subd. 2. [DEFINITIONS.] (a) For purposes of this section, the following terms have the meanings given.

(b) "Preexisting district" means a tax increment financing district for which the request for certification was made before August 1, 2001.

(1)(i) was issued or approved before August 1, 2001, or was issued pursuant to a binding contract entered into before ~~August~~ July 1, 2001; or

(ii) was issued to refinance an obligation under item (i), if the refinancing does not increase the present value of the debt service; and

(2) is secured by increments from a preexisting district.

[EFFECTIVE DATE.] This section is effective the day following final enactment and applies to districts for which the request for certification was made on, before, or after August 1, 1979, and before August 1, 2001.

Sec. 25. Minnesota Statutes 2002, section 469.1792, subdivision 3, is amended to read:

Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a district qualifying under this section may take either or both of the following actions for any or all of its preexisting districts:

(1) the authority may elect that the original local tax rate under section 469.177, subdivision 1a, does not apply to the district; and

(2) the authority may elect the fiscal disparities contribution will be computed under section 469.177, subdivision 3, paragraph (a), regardless of the election that was made for the district or if the district is an economic development district for which the request for certification was made after June 30, 1997.

(b) The authority may take action under this subdivision only after the municipality approves the action, by resolution, after notice and public hearing in the manner provided under section 469.175, subdivision 2 3.

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Sec. 26. Minnesota Statutes 2002, section 469.1813, subdivision 8, is amended to read:

Subd. 8. [LIMITATION ON ABATEMENTS.] In any year, the total amount of property taxes abated by a political subdivision under this section may not exceed (1) five percent of the current levy, or (2) $100,000, whichever is greater. The limit under this subdivision does not apply to an uncollected abatement from a prior year that is added to the abatement levy.

[EFFECTIVE DATE.] This section is effective beginning with property taxes levied in 2003, payable in 2004.

Sec. 27. Minnesota Statutes 2002, section 469.1815, subdivision 1, is amended to read:

Subdivision 1. [INCLUSION IN PROPOSED AND FINAL LEVIES.] The political subdivision must add to its levy amount for the current year under sections 275.065 and 275.07 the total estimated amount of all current year abatements granted. If all or a portion of an abatement levy for a prior year was uncollected, the political subdivision may add the uncollected amount to its abatement levy for the current year. The tax amounts shown on the proposed notice under section 275.065, subdivision 3, and on the property tax statement under section 276.04, subdivision 2, are the total amounts before the reduction of any abatements that will be granted on the property.

[EFFECTIVE DATE.] This section is effective beginning with property taxes levied in 2003, payable in 2004.

Sec. 28. Laws 1997, chapter 231, article 10, section 25, is amended to read:

Sec. 25. [EFFECTIVE DATE.]

Sections 1, 3 to 6, 7, and 10, are effective for districts for which the requests for certification are made after June 30, 1997.

Section 2, ~~clauses~~ clause (1) ~~and~~ is effective for all districts, regardless of whether the request for certification was made before, on, or after August 1, 1979. Section 2, clause (4), ~~are~~ is effective for districts for which the requests for certification were made after July 31, 1979, and for payments and investment earnings received after July 1, 1997. Section 2, clauses (2) and (3), are effective for districts for which the request for certification was made after June 30, 1982, and proceeds from sales and leases of properties purchased by the authority after June 30, 1997, and repayments of advances and loans that were made after June 30, 1997.

Sections 8 and 9 apply to all tax increment districts, whenever certified, insofar as the underlying law applies to them, and any uses of tax increment expended prior to the date of enactment of this act which are in compliance with the provisions of those sections are deemed valid.

Sections 12 and 13 are effective on the day the chief clerical officer of the city of Columbia Heights complies with Minnesota Statutes, sections 645.021, subdivision 3.

Sections 17 to 20 are effective the day following final enactment and upon compliance by the governing body with Minnesota Statutes, section 645.021, subdivision 3.

Section 24 is effective the day following final enactment.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

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Sec. 29. Laws 2002, chapter 377, article 7, section 3, the effective date, is amended to read:

[EFFECTIVE DATE.] This section is effective for ~~increments payable in 2002~~ deficits occurring in calendar year 2000 and thereafter.

Sec. 30. Laws 2002, chapter 377, article 11, section 1, is amended to read:

Section 1. [CITY OF MOORHEAD; TAX LEVY AUTHORIZED.]

(a) Each year the city of Moorhead may impose a tax on all class 3a and class 3b property located in the city in an amount which the city determines is equal to the reduction in revenues from increment from all tax increment financing districts in the city resulting from the class rate changes and the elimination of the state-determined general education property levy under Laws 2001, First Special Session chapter 5. The proceeds of this tax and increments from the district may only be used to pay preexisting obligations as defined in Minnesota Statutes, section 469.1763, subdivision 6, whether general obligations or payable wholly from tax increments, and administrative expenses. The tax must be levied and collected in the same manner and as part of the property tax levied by the city and is subject to the same administrative, penalty, and enforcement provisions. A tax imposed under this section is a special levy and is not subject to levy limitations under Minnesota Statutes, section 275.71.

(b) This section expires December 31, ~~2005~~ 2010.

[EFFECTIVE DATE.] This section is effective upon approval by and compliance with Minnesota Statutes, section 645.021, subdivision 3, by the governing body of the city of Moorhead.

Sec. 31. [HOPKINS TAX INCREMENT FINANCING DISTRICT.]

Subdivision 1. [DISTRICT EXTENSION.] (a) The governing body of the city of Hopkins may elect to extend the duration of its redevelopment tax increment financing district 2-11 by up to four additional years.

(b) Notwithstanding any law to the contrary, effective upon approval of this subdivision, no increments may be spent on activities located outside of the area of the district, other than to pay administrative expenses.

Subd. 2. [FIVE-YEAR RULE.] The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that activities must be undertaken within a five-year period from the date of certification of tax increment financing district must be considered to be met for the city of Hopkins redevelopment tax increment district 2-11, if the activities are undertaken within nine years from the date of certification of the district.

[EFFECTIVE DATE.] Subdivision 1 is effective upon compliance with the provisions of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021. Subdivision 2 is effective upon compliance by the governing body of the city of Hopkins with the provisions of Minnesota Statutes, section 645.021.

ARTICLE 11

MINERALS TAXES

Section 1. Minnesota Statutes 2002, section 273.134, is amended to read:

273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA; DEFINITIONS.]

(a) For purposes of this section and ~~section~~ sections 273.135 and 273.1391, "municipality" means any city, however organized, or town, ~~and~~ which meets the following qualifications:

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(1) it is a municipality in which the assessed valuation of unmined iron ore on May 1, 1941, was not less than 40 percent of the assessed valuation of all real property; or

(2) it is a municipality in which, on January 1, 1977, or the applicable assessment date, there is a taconite concentrating plant or where taconite is mined or quarried or where there is located an electric generating plant which qualifies as a taconite facility.

"The applicable assessment date" is the date as of which property is listed and assessed for the tax in question.

(b) For the purposes of section 273.135, "tax relief area" means the geographic area contained within the boundaries of a school district ~~on January 2, 2000, which contains a municipality~~ which meets the following qualifications:

(1) it is a ~~municipality~~ school district in which the assessed valuation of unmined iron ore on May 1, 1941, was not less than 40 percent of the assessed valuation of all real property and whose boundaries are within 20 miles of a taconite mine or plant; or

(2) it is a ~~municipality~~ school district in which, on January 1, 1977 or the applicable assessment date, there is a taconite concentrating plant or where taconite is mined or quarried or where there is located an electric generating plant which qualifies as a taconite facility.

For purposes of this paragraph, a "tax relief area" does not include a school district whose boundaries are more than 20 miles from a taconite mine or plant or in which the assessed valuation of unmined iron ore on May 1, 1941, was less than 40 percent of the assessed valuation of all real property.

(b) For purposes of section 273.1391, subdivision 2, paragraph (c), and chapter 298, "tax relief area" means the geographic area contained within the boundaries of a school district which contains a municipality that meets the following qualifications:

~~(1) it is a municipality in which the assessed valuation of unmined iron ore on May 1, 1941, was not less than 40 percent of the assessed valuation of all real property; or~~

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

Sec. 2. [273.1341] [TACONITE ASSISTANCE AREA.]

A "taconite assistance area" means the geographic area that falls within the boundaries of a school district that contains a municipality in which the assessed valuation of unmined iron ore on May 1, 1941, was not less than 40 percent of the assessed valuation of all real property.

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

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Sec. 3. Minnesota Statutes 2002, section 273.135, subdivision 1, is amended to read:

Subdivision 1. The property tax to be paid in respect to property taxable within a tax relief area as defined in section 273.134, paragraph ~~(a)~~ (b), on homestead property, as otherwise determined by law and regardless of the market value of the property, for all purposes shall be reduced in the amount prescribed by subdivision 2, subject to the limitations contained therein.

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

Sec. 4. Minnesota Statutes 2002, section 273.135, subdivision 2, is amended to read:

Subd. 2. The amount of the reduction authorized by subdivision 1 shall be:

(a) In the case of property located within a ~~tax relief area~~ municipality as defined under section 273.134, paragraph (a), ~~that is within the boundaries of a municipality which meets the qualifications prescribed in section 273.134, paragraph (a),~~ 66 percent of the tax, provided that the reduction shall not exceed the maximum amounts specified in paragraph (c).

(b) In the case of property located within the boundaries of a school district which qualifies as a tax relief area under section 273.134, paragraph ~~(a)~~ (b), but which is outside the boundaries of a municipality which meets the qualifications prescribed in section 273.134, paragraph (a), 57 percent of the tax, provided that the reduction shall not exceed the maximum amounts specified in paragraph (c).

(c) The maximum reduction of the tax is $315.10 on property described in paragraph (a) and $289.80 on property described in paragraph (b).

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

Sec. 5. Minnesota Statutes 2002, section 273.1391, subdivision 2, is amended to read:

Subd. 2. The amount of the reduction authorized by subdivision 1 shall be:

(a) In the case of property located within a school district which does not meet the qualifications of section 273.134, paragraph (b), as a tax relief area, but which is located in a county with a population of less than 100,000 in which taconite is mined or quarried and wherein a school district is located which does meet the qualifications of a tax relief area, and provided that at least 90 percent of the area of the school district which does not meet the qualifications of section 273.134, paragraph (b), lies within such county, 57 percent of the tax on qualified property located in the school district that does not meet the qualifications of section 273.134, paragraph (b), provided that the amount of said reduction shall not exceed the maximum amounts specified in paragraph (d). The reduction provided by this paragraph shall only be applicable to property located within the boundaries of the county described therein.

(b) In the case of property located within a school district which does not meet the qualifications of section 273.134, paragraph (b), as a tax relief area, but which is located in a school district in a county containing a city of the first class and a ~~qualifying~~ municipality as defined in section 273.134, paragraph (a), but not in a school district containing a city of the first class or adjacent to a school district containing a city of the first class unless the school district so adjacent contains a ~~qualifying~~ municipality as defined in section 273.134, paragraph (a), 57 percent of the tax, but not to exceed the maximums specified in paragraph (d).

(c) In the case of property located within the boundaries of a municipality that meets the qualifications in section 273.134, paragraph ~~(b)~~ (a), but not the qualifications of a tax relief area in section 273.134, paragraph ~~(a)~~ (b), 66 percent of the tax, provided that the reduction shall not exceed $315.10. In the case of property located within the

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boundaries of a school district which qualifies as a ~~tax relief~~ taconite assistance area under section ~~273.134, paragraph (b)~~ 273.1341, but does not qualify as a tax relief area under section 273.134, paragraph ~~(a)~~ (b), but which is outside the boundaries of a municipality which meets the qualifications of the preceding sentence, 57 percent of the tax, provided that the reduction shall not exceed the maximum amounts specified in paragraph (d).

(d) Except as otherwise provided in this section, the maximum reduction of the tax is $289.80.

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

Sec. 6. Minnesota Statutes 2002, section 298.2211, subdivision 1, is amended to read:

Subdivision 1. [PURPOSE; GRANT OF AUTHORITY.] In order to accomplish the legislative purposes specified in sections 469.142 to 469.165 and chapter 462C, within tax relief areas as defined in section 273.134, the commissioner of iron range resources and rehabilitation may exercise the following powers: (1) all powers conferred upon a rural development financing authority under sections 469.142 to 469.149; (2) all powers conferred upon a city under chapter 462C; (3) all powers conferred upon a municipality or a redevelopment agency under sections 469.152 to 469.165; (4) all powers provided by sections 469.142 to 469.151 to further any of the purposes and objectives of chapter 462C and sections 469.152 to 469.165; ~~and~~ (5) apply for, borrow, receive, and expend grant and loan money made available from federal sources and from federally funded programs; and (6) all powers conferred upon a municipality or an authority under sections 469.174 to 469.177, 469.178, except subdivision 2 thereof, and 469.179, subject to compliance with the provisions of section 469.175, subdivisions 1, 2, and 3; provided that any tax increments derived by the commissioner from the exercise of this authority may be used only to finance or pay premiums or fees for insurance, letters of credit, or other contracts guaranteeing the payment when due of net rentals under a project lease or the payment of principal and interest due on or repurchase of bonds issued to finance a project or program, to accumulate and maintain reserves securing the payment when due on bonds issued to finance a project or program, or to provide an interest rate reduction program pursuant to section 469.012, subdivision 7. Tax increments and earnings thereon remaining in any bond reserve account after payment or discharge of any bonds secured thereby shall be used within one year thereafter in furtherance of this section or returned to the county auditor of the county in which the tax increment financing district is located. If returned to the county auditor, the county auditor shall immediately allocate the amount among all government units which would have shared therein had the amount been received as part of the other ad valorem taxes on property in the district most recently paid, in the same proportions as other taxes were distributed, and shall immediately distribute it to the government units in accordance with the allocation.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 7. Minnesota Statutes 2002, section 298.27, is amended to read:

298.27 [COLLECTION AND PAYMENT OF TAX.]

The taxes provided by section 298.24 shall be paid directly to each eligible county and the iron range resources and rehabilitation board. The commissioner of revenue shall notify each producer of the amount to be paid each recipient prior to February 15. Every person subject to taxes imposed by section 298.24 shall file a correct report covering the preceding year. The report must contain the information required by the commissioner. The report shall be filed by each producer on or before February 1. A remittance equal to 50 percent of the total tax required to be paid hereunder ~~in 2003 and 100 percent of the total tax required to be paid hereunder in 2004 and thereafter~~ shall be paid on or before February 24. A remittance equal to the remaining total tax required to be paid hereunder ~~in 2003~~ shall be paid on or before August 24. On or before February 25, and ~~in 2003,~~ August 25, the county auditor shall make distribution of the payments previously received by the county in the manner provided by section 298.28. Reports shall be made and hearings held upon the determination of the tax in accordance with procedures established by the commissioner of revenue. The commissioner of revenue shall have authority to make reasonable

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rules as to the form and manner of filing reports necessary for the determination of the tax hereunder, and by such rules may require the production of such information as may be reasonably necessary or convenient for the determination and apportionment of the tax. All the provisions of the occupation tax law with reference to the assessment and determination of the occupation tax, including all provisions for appeals from or review of the orders of the commissioner of revenue relative thereto, but not including provisions for refunds, are applicable to the taxes imposed by section 298.24 except in so far as inconsistent herewith. If any person subject to section 298.24 shall fail to make the report provided for in this section at the time and in the manner herein provided, the commissioner of revenue shall in such case, upon information possessed or obtained, ascertain the kind and amount of ore mined or produced and thereon find and determine the amount of the tax due from such person. There shall be added to the amount of tax due a penalty for failure to report on or before February 1, which penalty shall equal ten percent of the tax imposed and be treated as a part thereof.

If any person responsible for making a tax payment at the time and in the manner herein provided fails to do so, there shall be imposed a penalty equal to ten percent of the amount so due, which penalty shall be treated as part of the tax due.

In the case of any underpayment of the tax payment required herein, there may be added and be treated as part of the tax due a penalty equal to ten percent of the amount so underpaid.

A person having a liability of $120,000 or more during a calendar year must remit all liabilities by means of a funds transfer as defined in section 336.4A-104, paragraph (a). The funds transfer payment date, as defined in section 336.4A-401, must be on or before the date the tax is due. If the date the tax is due is not a funds transfer business day, as defined in section 336.4A-105, paragraph (a), clause (4), the payment date must be on or before the funds transfer business day next following the date the tax is due.

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

Sec. 8. Minnesota Statutes 2002, section 298.28, subdivision 4, is amended to read:

Subd. 4. [SCHOOL DISTRICTS.] (a) 17.15 cents per taxable ton plus the increase provided in paragraph (d) must be allocated to qualifying school districts to be distributed, based upon the certification of the commissioner of revenue, under paragraphs (b) and (c), except as otherwise provided in paragraph (f).

(b) 3.43 cents per taxable ton must be distributed to the school districts in which the lands from which taconite was mined or quarried were located or within which the concentrate was produced. The distribution must be based on the apportionment formula prescribed in subdivision 2.

(c)(i) 13.72 cents per taxable ton, less any amount distributed under paragraph (e), shall be distributed to a group of school districts comprised of those school districts in which ~~the taconite was mined or quarried or the concentrate produced~~ qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a qualifying municipality as defined by section 273.134, paragraph ~~(b)~~ (a), in direct proportion to school district indexes as follows: for each school district, its pupil units determined under section 126C.05 for the prior school year shall be multiplied by the ratio of the average adjusted net tax capacity per pupil unit for school districts receiving aid under this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. Each district shall receive that portion of the distribution which its index bears to the sum of the indices for all school districts that receive the distributions.

(ii) Notwithstanding clause (i), each school district that receives a distribution under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on severed mineral values after reduction for any portion distributed to cities and towns under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy reduction under

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section 126C.48, subdivision 8, for the second year prior to the year of the distribution shall receive a distribution equal to the difference; the amount necessary to make this payment shall be derived from proportionate reductions in the initial distribution to other school districts under clause (i).

(d) Any school district described in paragraph (c) where a levy increase pursuant to section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001, shall receive a distribution ~~from a fund that receives a distribution in 1998~~ of 21.3 cents per ton. On July 15 of 1999, and each year thereafter, the increase over the amount established for the prior year shall be determined according to the increase in the implicit price deflator as provided in section 298.24, subdivision 1. Each district shall receive $175 times the pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent times the district's taxable net tax capacity in the second previous year.

If the total amount provided by paragraph (d) is insufficient to make the payments herein required then the entitlement of $175 per pupil unit shall be reduced uniformly so as not to exceed the funds available. Any amounts received by a qualifying school district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general education aid which the district receives pursuant to section 126C.13 or the permissible levies of the district. Any amount remaining after the payments provided in this paragraph shall be paid to the commissioner of iron range resources and rehabilitation who shall deposit the same in the taconite environmental protection fund and the northeast Minnesota economic protection trust fund as provided in subdivision 11.

Each district receiving money according to this paragraph shall reserve $25 times the number of pupil units in the district. It may use the money for early childhood programs or for outcome-based learning programs that enhance the academic quality of the district's curriculum. The outcome-based learning programs must be approved by the commissioner of children, families, and learning.

(e) There shall be distributed to any school district the amount which the school district was entitled to receive under section 298.32 in 1975.

(f) Effective for the distribution in 2003 only, five percent of the distributions to school districts under paragraphs (b), (c), and (e); subdivision 6, paragraph (c); subdivision 11; and section 298.225, shall be distributed to the general fund. The remainder less any portion distributed to cities and towns under section 126C.48, subdivision 8, paragraph (5), shall be distributed to the northeast Minnesota economic protection trust fund created in section 298.292. Fifty percent of the amount distributed to the ~~northeast Minnesota~~ Douglas J. Johnson economic protection trust fund shall be made available for expenditure under section 298.293 as governed by section 298.296. Effective in 2003 only, 100 percent of the distributions to school districts under section 477A.15 less any portion distributed to cities and towns under section 126C.48, subdivision 8, paragraph (5), shall be distributed to the general fund.

[EFFECTIVE DATE.] This section is effective for distributions in 2004 and thereafter.

Sec. 9. Minnesota Statutes 2002, section 298.292, subdivision 2, is amended to read:

Subd. 2. [USE OF MONEY.] Money in the northeast Minnesota economic protection trust fund may be used for the following purposes:

(1) to provide loans, loan guarantees, interest buy-downs and other forms of participation with private sources of financing, but a loan to a private enterprise shall be for a principal amount not to exceed one-half of the cost of the project for which financing is sought, and the rate of interest on a loan to a private enterprise shall be no less than the lesser of eight percent or an interest rate three percentage points less than a full faith and credit obligation of the United States government of comparable maturity, at the time that the loan is approved;

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(2) to fund reserve accounts established to secure the payment when due of the principal of and interest on bonds issued pursuant to section 298.2211;

(3) to pay in periodic payments or in a lump sum payment any or all of the interest on bonds issued pursuant to chapter 474 for the purpose of constructing, converting, or retrofitting heating facilities in connection with district heating systems or systems utilizing alternative energy sources; and

(4) to invest in a venture capital fund or enterprise that will provide capital to other entities that are engaging in, or that will engage in, projects or programs that have the purposes set forth in subdivision 1. No investments may be made in a venture capital fund or enterprise unless at least two other unrelated investors make investments of at least $500,000 in the venture capital fund or enterprise, and the investment by the northeast Minnesota economic protection trust fund may not exceed the amount of the largest investment by an unrelated investor in the venture capital fund or enterprise. For purposes of this subdivision, an "unrelated investor" is a person or entity that is not related to the entity in which the investment is made or to any individual who owns more than 40 percent of the value of the entity, in any of the following relationships: spouse, parent, child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of the value of all interests in it. For purposes of determining the limitations under this clause, the amount of investments made by an investor other than the northeast Minnesota economic protection trust fund is the sum of all investments made in the venture capital fund or enterprise during the period beginning one year before the date of the investment by the northeast Minnesota economic protection trust fund.

Money from the trust fund shall be expended only in or for the benefit of the tax relief area defined in section 273.134, paragraph (b).

[EFFECTIVE DATE.] This section is effective for loans executed on or after the day following final enactment.

Sec. 10. Minnesota Statutes 2002, section 298.296, subdivision 4, is amended to read:

Subd. 4. [TEMPORARY LOAN AUTHORITY.] (a) The board may recommend that up to $7,500,000 from the corpus of the trust may be used for loans, loan guarantees, grants, or equity investments as provided in this subdivision. The money would be available for loans for construction and equipping of facilities constituting (1) a value added iron products plant, which may be either a new plant or a facility incorporated into an existing plant that produces iron upgraded to a minimum of 75 percent iron content or any iron alloy with a total minimum metallic content of 90 percent; or (2) a new mine or minerals processing plant for any mineral subject to the net proceeds tax imposed under section 298.015. A loan or loan guarantee under this paragraph may not exceed $5,000,000 for any facility.

(b) Additionally, the board must reserve the first $2,000,000 of the net interest, dividends, and earnings arising from the investment of the trust after June 30, 1996, to be used for ~~additional~~ grants, loans, loan guarantees, or equity investments for the purposes set forth in paragraph (a). This amount must be reserved until it is used ~~for the grants~~ as described in this subdivision.

(c) Additionally, the board may recommend that up to $5,500,000 from the corpus of the trust may be used for additional grants, loans, loan guarantees, or equity investments for the purposes set forth in paragraph (a).

(d) The board may require that it receive an equity percentage in any project to which it contributes under this section.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

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Sec. 11. Minnesota Statutes 2002, section 298.2961, is amended by adding a subdivision to read:

Subd. 3. [REDISTRIBUTION.] (a) If a taconite production facility is sold after operations at the facility had ceased, any money remaining in the taconite environmental fund for the former producer may be released to the purchaser of the facility on the terms otherwise applicable to the former producer under this section.

(b) Any portion of the taconite environmental fund that is not released by the commissioner within three years of its deposit in the taconite environmental fund shall be divided between the taconite environmental protection fund created in section 298.223 and the Douglas J. Johnson economic protection trust fund created in section 298.292 for placement in their respective special accounts. Two-thirds of the unreleased funds must be distributed to the taconite environmental protection fund and one-third to the Douglas J. Johnson economic protection trust fund.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 12. [REVISOR INSTRUCTION.]

The revisor of statutes shall change the phrase "Northeast Minnesota Economic Protection Trust Fund" or a similar phrase referring to the fund, to the "Douglas J. Johnson Economic Protection Trust Fund" wherever it appears in Minnesota Statutes.

Sec. 13. [REPEALER.]

Minnesota Statutes 2002, section 298.24, subdivision 3, is repealed effective for concentrates produced after January 1, 2003.

ARTICLE 12

PUBLIC FINANCE

Section 1. [37.31] [ISSUANCE OF BONDS.]

Subdivision 1. [BONDING AUTHORITY.] The society may issue negotiable bonds in a principal amount that the society determines necessary to provide sufficient money for achieving its purposes, including the payment of interest on bonds of the society, the establishment of reserves to secure its bonds, the payment of fees to a third party providing credit enhancement, and the payment of all other expenditures of the society incident to and necessary or convenient to carry out its corporate purposes and powers. Bonds of the society may be issued as bonds or notes or in any other form authorized by law. The principal amount of bonds issued and outstanding under this section at any time may not exceed $20,000,000, excluding bonds for which refunding bonds or crossover refunding bonds have been issued.

Subd. 2. [REFUNDING OF BONDS.] The society may issue bonds to refund outstanding bonds of the society, to pay any redemption premiums on those bonds, and to pay interest accrued or to accrue to the redemption date next succeeding the date of delivery of the refunding bonds. The society may apply the proceeds of any refunding bonds to the purchase or payment at maturity of the bonds to be refunded, or to the redemption of outstanding bonds on the redemption date next succeeding the date of delivery of the refunding bonds and may, pending the application, place the proceeds in escrow to be applied to the purchase, retirement, or redemption of the bonds. Pending use, escrowed proceeds may be invested and reinvested in obligations issued or guaranteed by the state or the United States or by any agency or instrumentality of the state or the United States, or in certificates of deposit or time deposits secured in a manner determined by the society, maturing at a time appropriate to assure the prompt payment of the principal and interest and redemption premiums, if any, on the bonds to be refunded. The income

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realized on any investment may also be applied to the payment of the bonds to be refunded. After the terms of the escrow have been fully satisfied, any balance of the proceeds and any investment income may be returned to the society for use by it in any lawful manner. All refunding bonds issued under this subdivision must be issued and secured in the manner provided by resolution of the society.

Subd. 3. [KIND OF BONDS.] Bonds issued under this section must be negotiable investment securities within the meaning and for all purposes of the Uniform Commercial Code, subject only to the provisions of the bonds for registration. The bonds issued must be limited obligations of the society not secured by its full faith and credit and payable solely from specified sources or assets.

Subd. 4. [RESOLUTION AND TERMS OF SALE.] The bonds of the society must be authorized by a resolution or resolutions adopted by the society. The bonds must bear the date or dates, mature at the time or times, bear interest at a fixed or variable rate, including a rate varying periodically at the time or times and on the terms determined by the society, or any combination of fixed and variable rates, be in the denominations, be in the form, carry the registration privileges, be executed in the manner, be payable in lawful money of the United States, at the place or places within or without the state, and be subject to the terms of redemption or purchase before maturity as the resolutions or certificates provide. If, for any reason existing at the date of issue of the bonds or existing at the date of making or purchasing any loan or securities from the proceeds or after that date, the interest on the bonds is or becomes subject to federal income taxation, this fact does not affect the validity or the provisions made for the security of the bonds. The society may make covenants and take or have taken actions that are in its judgment necessary or desirable to comply with conditions established by federal law or regulations for the exemption of interest on its obligations. The society may refrain from compliance with those conditions if in its judgment this would serve the purposes and policies set forth in this chapter with respect to any particular issue of bonds, unless this would violate covenants made by the society. The maximum maturity of a bond, whether or not issued for the purpose of refunding, must be 30 years from its date. The bonds of the society may be sold at public or private sale, at a price or prices determined by the society; provided that:

(1) the aggregate price at which an issue of bonds is initially offered by underwriters to investors, as stated in the authority's official statement with respect to the offering, must not exceed by more than three percent the aggregate price paid by the underwriters to the society at the time of delivery;

(2) the commission paid by the society to an underwriter for placing an issue of bonds with investors must not exceed three percent of the aggregate price at which the issue is offered to investors as stated in the society's offering statement; and

(3) the spread or commission must be an amount determined by the society to be reasonable in light of the risk assumed and the expenses of issuance, if any, required to be paid by the underwriters.

Subd. 5. [EXEMPTION.] The notes and bonds of the society are not subject to sections 16C.03, subdivision 4, and 16C.05.

Subd. 6. [RESERVES; FUNDS; ACCOUNTS.] The society may establish reserves, funds, or accounts necessary to carry out the purposes of the society or to comply with any agreement made by or any resolution passed by the society.

Subd. 7. [APPROVAL; COMMISSIONER OF FINANCE.] Before issuing bonds under this section, the society must obtain the approval, in writing, of the commissioner of finance.

Subd. 8. [EXPIRATION.] The authority to issue bonds, other than bonds to refund outstanding bonds, under this section expires July 1, 2009.

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Sec. 2. [37.32] [TENDER OPTION.]

An obligation may be issued giving its owner the right to tender or the society to demand tender of the obligation to the society or another person designated by it, for purchase at a specified time or times, if the society has first entered into an agreement with a suitable financial institution obligating the financial institution to provide funds on a timely basis for purchase of bonds tendered. The obligation is not considered to mature on any tender date and the purchase of a tendered obligation is not considered a payment or discharge of the obligation by the society. Obligations tendered for purchase may be remarketed by or on behalf of the society or another purchaser. The society may enter into agreements it considers appropriate to provide for the purchase and remarketing of tendered obligations, including:

(1) provisions under which undelivered obligations may be considered tendered for purchase and new obligations may be substituted for them;

(2) provisions for the payment of charges of tender agents, remarketing agents, and financial institutions extending lines of credit or letters of credit assuring repurchase; and

(3) provisions for reimbursement of advances under letters of credit that may be paid from the proceeds of the obligations or from tax and other revenues appropriated for the payment and security of the obligations and similar or related provisions.

Sec. 3. [37.33] [BOND FUND.]

Subdivision 1. [CREATION AND CONTENTS.] The society may establish a special fund or funds for the security of one or more or all series of its bonds. The funds must be known as debt service reserve funds. The society may pay into each debt service reserve fund:

(1) the proceeds of sale of bonds to the extent provided in the resolution or indenture authorizing the issuance of them;

(2) money directed to be transferred by the society to the debt service reserve fund; and

(3) other money made available to the society from any other source only for the purpose of the fund.

Subd. 2. [USE OF FUNDS.] Except as provided in this section, the money credited to each debt service reserve fund must be used only for the payment of the principal of bonds of the society as they mature, the purchase of the bonds, the payment of interest on them, or the payment of any premium required when the bonds are redeemed before maturity. Money in a debt service reserve fund must not be withdrawn at a time and in an amount that reduces the amount of the fund to less than the amount the society determines to be reasonably necessary for the purposes of the fund. However, money may be withdrawn to pay principal or interest due on bonds secured by the fund if other money of the society is not available.

Subd. 3. [INVESTMENT.] Money in a debt service reserve fund not required for immediate use may be invested in accordance with section 37.07.

Subd. 4. [MINIMUM AMOUNT OF RESERVE AT ISSUANCE.] If the society establishes a debt service reserve fund for the security of any series of bonds, it shall not issue additional bonds that are similarly secured if the amount of any of the debt service reserve funds at the time of issuance does not equal or exceed the minimum amount required by the resolution creating the fund, unless the society deposits in each fund at the time of issuance, from the proceeds of the bonds, or otherwise, an amount that when added together with the amount then in the fund will be at least the minimum amount required.

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Subd. 5. [TRANSFER OF EXCESS.] To the extent consistent with the resolutions and indentures securing outstanding bonds, the society may at the close of a fiscal year transfer to any other fund or account from any debt service reserve fund any excess in that reserve fund over the amount determined by the society to be reasonably necessary for the purpose of the reserve fund.

Sec. 4. [37.34] [MONEY OF THE SOCIETY.]

The society may contract with the holders of any of its bonds as to the custody, collection, securing, investment, and payment of money of the society or money held in trust or otherwise for the payment of bonds, and to carry out the contract. Money held in trust or otherwise for the payment of bonds or in any way to secure bonds and deposits of the money may be secured in the same manner as money of the society, and all banks and trust companies are authorized to give security for the deposits.

Sec. 5. [37.35] [NONLIABILITY.]

Subdivision 1. [NONLIABILITY OF INDIVIDUALS.] No member of the society or other person executing the bonds is liable personally on the bonds or is subject to any personal liability or accountability by reason of their issuance.

Subd. 2. [NONLIABILITY OF STATE.] The state is not liable on bonds of the society issued under section 37.31 and those bonds are not a debt of the state. The bonds must contain on their face a statement to that effect.

Sec. 6. [37.36] [PURCHASE AND CANCELLATION BY SOCIETY.]

Subject to agreements with bondholders that may then exist, the society may purchase out of money available for the purpose, bonds of the society which shall then be canceled, at a price not exceeding the following amounts:

(1) if the bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment date of the bonds; or

(2) if the bonds are not redeemable, the redemption price applicable on the first date after the purchase upon which the bonds become subject to redemption plus accrued interest to that date.

Sec. 7. [37.37] [STATE PLEDGE AGAINST IMPAIRMENT OF CONTRACTS.]

The state pledges and agrees with the holders of bonds issued under section 37.31 that the state will not limit or alter the rights vested in the society to fulfill the terms of any agreements made with the bondholders or in any way impair the rights and remedies of the holders until the bonds, together with interest on them, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the bondholders, are fully met and discharged. The society may include this pledge and agreement of the state in any agreement with the holders of bonds issued under section 37.31.

Sec. 8. Minnesota Statutes 2002, section 373.01, subdivision 3, is amended to read:

Subd. 3. [CAPITAL NOTES.] A county board may, by resolution and without referendum, issue capital notes subject to the county debt limit to purchase capital equipment useful for county purposes that has an expected useful life at least equal to the term of the notes. The notes shall be payable in not more than five years and shall be issued on terms and in a manner the board determines. A tax levy shall be made for payment of the principal and interest

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on the notes, in accordance with section 475.61, as in the case of bonds. For purposes of this subdivision, "capital equipment" means public safety, ambulance, road construction or maintenance, and medical~~, and data processing~~ equipment, and computer hardware and original operating system software. The authority to issue capital notes for original operating systems software expires on July 1, 2005.

Sec. 9. Minnesota Statutes 2002, section 373.45, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) As used in this section, the following terms have the meanings given.

(b) "Authority" means the Minnesota public facilities authority.

(d) "Debt obligation" means a general obligation bond issued by a county, or a bond payable from a county lease obligation under section 641.24, to provide funds for the construction of:

(1) jails;

(2) correctional facilities;

(3) law enforcement facilities;

(4) social services and human services facilities; or

(5) solid waste facilities.

Sec. 10. Minnesota Statutes 2002, section 373.47, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY TO INCUR DEBT.] ~~(a)~~ Subject to prior approval by the public safety radio system planning committee under section 473.907, the governing body of a county may finance the cost of designing, constructing, and acquiring public safety communication system infrastructure and equipment for use on the statewide, shared public safety radio system by issuing:

(1) capital improvement bonds under section 373.40, as if the infrastructure and equipment qualified as a "capital improvement" within the meaning of section 373.40, subdivision 1, paragraph (b); and

(2) capital notes under the provisions of section 373.01, subdivision 3, as if the equipment qualified as "capital equipment" within the meaning of section 373.01, subdivision 3.

(b) For purposes of this section, "county" means the following counties: Anoka, Benton, Carver, Chisago, Dakota, Dodge, Fillmore, Freeborn, Goodhue, Hennepin, Houston, Isanti, Mower, Olmsted, Ramsey, Rice, Scott, Sherburne, Steele, Wabasha, Washington, Wright, and Winona.

(c) The authority to incur debt under this section is not effective until July 1, 2003, for the following counties: Benton, Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower, Olmsted, Rice, Sherburne, Steele, Wabasha, Wright, and Winona.

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Sec. 11. Minnesota Statutes 2002, section 376.009, is amended to read:

376.009 [COUNTY HOSPITAL DEFINED; MAY HAVE MANY BUILDINGS, SITES.]

For the purposes of sections 376.01 to 376.06, "county hospital" means any hospital owned or operated by a county which may consist of any number of buildings at one location or any number of buildings at different locations within the county. The county board of any county that has not established a county hospital may by resolution authorize a statutory or home rule charter city in the county and its city council to exercise the powers of a county and the county board under sections 376.01 to 376.07, in which case references in sections 376.01 to 376.07 to "county" and "county board" refer to the city so designated and its governing body, respectively.

Sec. 12. Minnesota Statutes 2002, section 376.55, subdivision 3, is amended to read:

Subd. 3. [FINANCING.] The county board may transfer surplus funds from any fund except the road and bridge, sinking or drainage ditch funds for the purpose of establishing, acquiring, maintaining, enlarging, or adding to a county nursing home. When surplus funds are not available for transfer, a county board may issue bonds to pay the cost of establishing, acquiring, equipping, furnishing, enlarging, or adding to a county nursing home, subject to section 376.56.

Sec. 13. Minnesota Statutes 2002, section 376.55, is amended by adding a subdivision to read:

Subd. 7. [CITY POWERS.] The county board of any county that has not established a nursing home may by resolution authorize a statutory or home rule charter city within the county to exercise the powers of a county under sections 376.55 to 376.60. A city so designated may exercise within its boundaries all the powers of a county under sections 376.55 to 376.60.

Sec. 14. Minnesota Statutes 2002, section 376.56, subdivision 3, is amended to read:

Subd. 3. [CHAPTER 475 BONDS.] Bonds issued under section 376.55, subdivision 3, may be general obligations of the county and may be issued and sold, and taxes levied for their payment as provided under chapter 475. No election shall be required to authorize the bond issue for acquiring, improving, remodeling, or replacing an existing nursing home without increasing the total number of accommodations for residents in all nursing homes in the county. The revenues of the nursing home shall also be pledged for the payment of the bonds and for any interest and premium. Part of the proceeds may be deposited in the debt service fund for the issue, to capitalize interest and create a reserve to reduce or eliminate the tax otherwise required by section 475.61 to be levied before issuing the bonds. The remaining proceeds from the sale of the bonds and any surplus funds transferred under section 376.55, subdivision 3 must be credited to and deposited in the county nursing home building fund of the county in which the nursing home is located.

Sec. 15. Minnesota Statutes 2002, section 410.32, is amended to read:

410.32 [CITIES MAY ISSUE CAPITAL NOTES TO BUY CAPITAL EQUIPMENT.]

Notwithstanding any contrary provision of other law or charter, a home rule charter city may, by resolution and without public referendum, issue capital notes subject to the city debt limit to purchase public safety equipment, ambulance and other medical equipment, road construction and maintenance equipment, and other capital equipment ~~having~~ and computer hardware and original operating system software, provided the equipment or software has an expected useful life at least as long as the term of the notes. The authority to issue capital notes for original operating system software expires on July 1, 2005. The notes shall be payable in not more than five years and be issued on terms and in the manner the city determines. The total principal amount of the capital notes issued in a fiscal year shall not exceed 0.03 percent of the market value of taxable property in the city for that year. A tax levy

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shall be made for the payment of the principal and interest on the notes, in accordance with section 475.61, as in the case of bonds. Notes issued under this section shall require an affirmative vote of two-thirds of the governing body of the city. Notwithstanding a contrary provision of other law or charter, a home rule charter city may also issue capital notes subject to its debt limit in the manner and subject to the limitations applicable to statutory cities pursuant to section 412.301.

Sec. 16. [410.326] [CAPITAL IMPROVEMENT BONDS.]

Subdivision 1. [DEFINITIONS.] For purposes of this section, the following terms have the meanings given.

(a) "Bonds" mean an obligation defined under section 475.51.

(b) "Capital improvement" means acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, public safety facility, and public works facility. An improvement must have an expected useful life of five years or more to qualify. Capital improvement does not include light rail transit or any activity related to it, or a park, library, road, bridge, administrative building other than a city hall, or land for any of those facilities.

Subd. 2. [ELECTION REQUIREMENT.] (a) Bonds issued by a city to finance capital improvements under an approved capital improvements plan are not subject to the election requirements of section 475.58. The bonds are subject to the net debt limits under section 475.53. The bonds must be approved by an affirmative vote of three-fifths of the members of a five-member city council. In the case of a city council having more than five members, the bonds must be approved by a vote of at least two-thirds of the city council.

(b) Before the issuance of bonds qualifying under this section, the city must publish a notice of its intention to issue the bonds and the date and time of the hearing to obtain public comment on the matter. The notice must be published in the official newspaper of the city or in a newspaper of general circulation in the city. Additionally, the notice may be posted on the official Web site, if any, of the city. The notice must be published at least 14 but not more than 28 days before the date of the hearing.

(c) A city may issue the bonds only after obtaining the approval of a majority of the voters voting on the question of issuing the obligations, if a petition requesting a vote on the issuance is signed by voters equal to five percent of the votes cast in the city in the last general election and is filed with the city clerk within 30 days after the public hearing. The commissioner of revenue shall prepare a suggested form of the question to be presented at the election.

Subd. 3. [CAPITAL IMPROVEMENT PLAN.] (a) A city may adopt a capital improvement plan. The plan must cover at least a five-year period beginning with the date of its adoption. The plan must set forth the estimated schedule, timing, and details of specific capital improvements by year, together with the estimated cost, the need for the improvement, and sources of revenue to pay for the improvement. In preparing the capital improvement plan, the city council must consider for each project and for the overall plan:

(1) the condition of the city's existing infrastructure, including the projected need for repair or replacement;

(2) the likely demand for the improvement;

(3) the estimated cost of the improvement;

(4) the available public resources;

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(5) the level of overlapping debt in the city;

(6) the relative benefits and costs of alternative uses of the funds;

(7) operating costs of the proposed improvements; and

(8) alternatives for providing services most efficiently through shared facilities with other cities or local government units.

(b) The capital improvement plan and annual amendments to it must be approved by the city council after public hearing.

Subd. 4. [LIMITATIONS ON AMOUNT.] A city may not issue bonds under this section if the maximum amount of principal and interest to become due in any year on all the outstanding bonds issued under this section, including the bonds to be issued, will equal or exceed 0.05367 percent of taxable market value of property in the county. Calculation of the limit must be made using the taxable market value for the taxes payable year in which the obligations are issued and sold. This section does not limit the authority to issue bonds under any other special or general law.

Subd. 5. [APPLICATION OF CHAPTER 475.] Bonds to finance capital improvements qualifying under this section must be issued under the issuance authority in chapter 475 and the provisions of chapter 475 apply, except as otherwise specifically provided in this section.

Sec. 17. Minnesota Statutes 2002, section 412.301, is amended to read:

412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.]

The council may issue certificates of indebtedness or capital notes subject to the city debt limits to purchase public safety equipment, ambulance equipment, road construction or maintenance equipment, and other capital equipment ~~having~~ and computer hardware and original operating system software, provided the equipment or software has an expected useful life at least as long as the terms of the certificates or notes. The authority to issue capital notes for original operating system software expires on July 1, 2005. Such certificates or notes shall be payable in not more than five years and shall be issued on such terms and in such manner as the council may determine. If the amount of the certificates or notes to be issued to finance any such purchase exceeds 0.25 percent of the market value of taxable property in the city, they shall not be issued for at least ten days after publication in the official newspaper of a council resolution determining to issue them; and if before the end of that time, a petition asking for an election on the proposition signed by voters equal to ten percent of the number of voters at the last regular municipal election is filed with the clerk, such certificates or notes shall not be issued until the proposition of their issuance has been approved by a majority of the votes cast on the question at a regular or special election. A tax levy shall be made for the payment of the principal and interest on such certificates or notes, in accordance with section 475.61, as in the case of bonds.

Sec. 18. [469.0772] [KOOCHICHING COUNTY; PORT AUTHORITY.]

Subdivision 1. [AUTHORITY TO ESTABLISH.] The governing body of the county of Koochiching may establish a port authority that has the same powers as a port authority established under section 469.049. If the county establishes a port authority, the governing body of the county shall exercise all powers granted to a city by sections 469.048 to 469.068 or other law. Any city in Koochiching county may participate in the activities of the county port authority under terms jointly agreed to by the city and county.

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Subd. 2. [FOREIGN TRADE ZONE.] Koochiching county or any city, town, or other political subdivision located in Koochiching county may apply to the board defined in United States Code, title 19, section 81a, for the right to use the powers provided in United States Code, title 19, sections 81a and 81u. If the right is granted the city, town, or other political subdivision may use the powers within or outside of a port district. The county, a city, town, or other political subdivision may apply jointly with any other city, town, or political subdivision located in Koochiching county.

Sec. 19. Minnesota Statutes 2002, section 469.1813, subdivision 8, is amended to read:

Subd. 8. [LIMITATION ON ABATEMENTS.] In any year, the total amount of property taxes abated by a political subdivision under this section may not exceed (1) ~~five~~ ten percent of the current levy, or (2) ~~$100,000~~ $200,000, whichever is greater.

Sec. 20. Minnesota Statutes 2002, section 473.39, is amended by adding a subdivision to read:

Subd. 1j. [OBLIGATIONS.] After July 1, 2003, in addition to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, and 1i, the council may issue certificates of indebtedness, bonds, or other obligations under this section in an amount not exceeding $45,000,000 for capital expenditures as prescribed in the council's regional transit master plan and transit capital improvement program and for related costs, including the costs of issuance and sale of the obligations.

[APPLICATION.] This section applies to the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

Sec. 21. Minnesota Statutes 2002, section 473.898, subdivision 3, is amended to read:

Subd. 3. [LIMITATIONS.] (a) The principal amount of the bonds issued pursuant to subdivision 1, exclusive of any original issue discount, shall not exceed the amount of $10,000,000 plus the amount the council determines necessary to pay the costs of issuance, fund reserves, debt service, and pay for any bond insurance or other credit enhancement.

(b) In addition to the amount authorized under paragraph (a), the council may issue bonds under subdivision 1 in a principal amount of $3,306,300, plus the amount the council determines necessary to pay the cost of issuance, fund reserves, debt service, and any bond insurance or other credit enhancement. The proceeds of bonds issued under this paragraph may not be used to finance portable or subscriber radio sets.

(c) In addition to the amount authorized under paragraphs (a) and (b), the council may issue bonds under subdivision 1 in a principal amount of $12,000,000, plus the amount the council determines necessary to pay the costs of issuance, fund reserves, debt service, and any bond insurance or other credit enhancement. The proceeds of bonds issued under this paragraph must be used to pay up to 30 percent of the cost to a local government unit of building a subsystem and may not be used to finance portable or subscriber radio sets. The bond proceeds may be used to make improvements to an existing 800 MHz radio system that will interoperate with the regionwide public safety radio communication system, provided that the improvements conform to the board's plan and technical standards. The council must time the sale and issuance of the bonds so that the debt service on the bonds can be covered by the additional revenue that will become available in the fiscal year ending June 30, 2005, generated under section 403.11 and appropriated under section 473.901.

Sec. 22. Minnesota Statutes 2002, section 474A.061, subdivision 1, is amended to read:

Subdivision 1. [ALLOCATION APPLICATION.] (a) An issuer may apply for an allocation under this section by submitting to the department an application on forms provided by the department, accompanied by (1) a

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preliminary resolution, (2) a statement of bond counsel that the proposed issue of obligations requires an allocation under this chapter and the Internal Revenue Code, (3) the type of qualified bonds to be issued, (4) an application deposit in the amount of one percent of the requested allocation before the last Monday in July, or in the amount of two percent of the requested allocation on or after the last Monday in July, (5) a public purpose scoring worksheet for manufacturing project and enterprise zone facility project applications, and (6) for residential rental projects, a statement from the applicant or bond counsel as to whether the project preserves existing federally subsidized housing for residential rental project applications and whether the project is restricted to persons who are 55 years of age or older. The issuer must pay the application deposit by a check made payable to the department of finance. The Minnesota housing finance agency, the Minnesota rural finance authority, and the Minnesota higher education services office may apply for and receive an allocation under this section without submitting an application deposit.

(b) An entitlement issuer may not apply for an allocation from the ~~housing pool or from the~~ public facilities pool unless it has either permanently issued bonds equal to the amount of its entitlement allocation for the current year plus any amount of bonding authority carried forward from previous years or returned for reallocation all of its unused entitlement allocation. An entitlement issuer may not apply for an allocation from the housing pool unless it either has permanently issued bonds equal to any amount of bonding authority carried forward from a previous year or has returned for reallocation all of its unused entitlement allocation. For purposes of this subdivision, its entitlement allocation includes an amount obtained under section 474A.04, subdivision 6. This paragraph does not apply to an application from the Minnesota housing finance agency for an allocation under subdivision 2a for cities who choose to have the agency issue bonds on their behalf.

(c) If an application is rejected under this section, the commissioner must notify the applicant and return the application deposit to the applicant within 30 days unless the applicant requests in writing that the application be resubmitted. The granting of an allocation of bonding authority under this section must be evidenced by a certificate of allocation.

Sec. 23. Minnesota Statutes 2002, section 475.58, subdivision 3b, is amended to read:

Subd. 3b. [STREET RECONSTRUCTION.] (a) A municipality may, without regard to the election requirement under subdivision 1, issue and sell obligations for street reconstruction, if the following conditions are met:

(1) the streets are reconstructed under a street reconstruction plan that describes the streets to be reconstructed, the estimated costs, and any planned reconstruction of other streets in the municipality over the next five years, and the plan and issuance of the obligations has been approved by a vote of all of the members of the governing body following a public hearing for which notice has been published in the official newspaper at least ten days but not more than 28 days prior to the hearing; and

(2) if a petition requesting a vote on the issuance is signed by voters equal to five percent of the votes cast in the last municipal general election and is filed with the municipal clerk within 30 days of the public hearing, the municipality may issue the bonds only after obtaining the approval of a majority of the voters voting on the question of the issuance of the obligations.

(b) Obligations issued under this subdivision are subject to the debt limit of the municipality and are not excluded from net debt under section 475.51, subdivision 4.

For purposes of this subdivision, street reconstruction includes utility replacement and relocation and other activities incidental to the street reconstruction, but does not include the portion of project cost allocable to widening a street or adding curbs and gutters where none previously existed.

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Sec. 24. Laws 1967, chapter 558, section 1, subdivision 5, as amended by Laws 1979, chapter 135, section 1, and Laws 1985, chapter 98, section 2, is amended to read:

Subd. 5. Promotion of tourist, agricultural and industrial developments. The amount to be spent annually for the purposes of this subdivision shall not exceed ~~one dollar~~ five dollars per capita of the county's population.

[EFFECTIVE DATE; LOCAL APPROVAL.] This section is effective the day after the governing body of Beltrami county and its chief clerical officer timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 25. [BONDS ISSUANCE VALIDATED.]

The provisions of Minnesota Statutes, sections 373.47, subdivision 1, and 473.907, subdivision 3, requiring prior review and approval by the public radio safety planning committee do not apply to the general obligation bonds issued by Anoka county in a principal amount of $10,500,000 on November 20, 2002.

[EFFECTIVE DATE.] This section is effective upon compliance by the governing body of Anoka county with the provisions of Minnesota Statutes, section 645.021.

Sec. 26. [BUFFALO; CITY BONDS FOR HIGHWAY 55.]

The city of Buffalo may issue up to $1,300,000 of its general obligation bonds to pay for the city's share of costs of reconstruction and upgrading of that part of Minnesota trunk highway marked 55 that lies within the city of Buffalo.

The bonds must be issued and sold in accordance with Minnesota Statutes, chapter 475, except that the debt need not be included within any limit on net debt imposed by Minnesota Statutes, chapter 475, and no election is required to authorize the bond issue.

Notwithstanding any other law, including any law enacted during the 2003 legislative session whether enacted before or after the enactment of this act, the debt or debt service on bonds issued under this section is excluded from any levy or other taxing limits and is not spending or revenue for purposes of calculating local government aids or local government aids reductions.

[EFFECTIVE DATE.] This section is effective the day after the governing body of Buffalo and its chief clerical officer timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 27. [CORPORATE STATUS FOR CERTAIN FEDERAL TAX LAW.]

For purposes of section 1.103-1 of the federal income tax regulations, Lewis and Clark Rural Water System, Inc. is hereby recognized as a corporation authorized to act on behalf of its members, including its Minnesota member governmental units, to provide drinking water to their communities and to issue debt obligations in its own name on behalf of some or all of its members, provided that Minnesota member governmental units are not liable for the payment of principal of or interest on such obligations.

Sec. 28. [NURSING HOME BONDS AUTHORIZED.]

Itasca county may issue bonds under Minnesota Statutes, sections 376.55 and 376.56, to finance the construction of a 35-bed nursing home facility to replace an existing 35-bed private facility located in the county. The bonds issued under this section must be payable solely from revenues and may not be general obligations of the county.

[EFFECTIVE DATE.] This section is effective the day after the governing body of Itasca county and its chief clerical officer timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

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Sec. 29. [VALIDATION OF APPROVAL.]

Notwithstanding Minnesota Statutes, section 645.021, subdivision 3, Laws 1980, chapter 569, sections 2 through 8, approved by the board of directors of local government information systems by resolution adopted on July 30, 1980, are effective as of July 1, 1980, and apply to obligations issued by local government information systems after April 1, 2003.

Sec. 30. [KANDIYOHI COUNTY AND CITY OF WILLMAR.]

Subdivision 1. [POWERS.] Notwithstanding Minnesota Statutes, sections 469.090 and 469.1082, Kandiyohi county may exercise the powers of a city under Minnesota Statutes, sections 469.090 to 469.107. Kandiyohi county and the city of Willmar may enter into a joint powers agreement under Minnesota Statutes, section 471.59, to jointly or cooperatively exercise any of the powers common to both the county and the city under Minnesota Statutes, sections 469.090 to 469.107, in a manner to be determined by a majority of the Kandiyohi county board and the Willmar city council.

Subd. 2. [SPECIAL TAXING DISTRICT.] A joint powers entity created under subdivision 1 is a political subdivision of the state and a special taxing district as defined by Minnesota Statutes, section 275.066, clause (24), with the power to adopt and certify a property tax levy to the county auditor. The maximum allowable levy limit for this special taxing district is the same levy limit as provided under Minnesota Statutes, section 469.107, subdivision 1, and, to the extent levied, shall replace the levy authorized under subdivision 1 for Kandiyohi county and the city of Willmar.

Subd. 3. [EFFECTIVE DATE; NO LOCAL APPROVAL REQUIRED.] This section is effective the day after final enactment.

Sec. 31. [MINNEAPOLIS COMMUNITY PLANNING AND ECONOMIC DEVELOPMENT DEPARTMENT.]

Subdivision 1. Notwithstanding a contrary provision of law, the charter of the city of Minneapolis, or its civil service rules, the city council of the city of Minneapolis may, by ordinance:

(1) establish a department of the city to be designated as the community planning and economic development department, or another name as the city designates by ordinance. The term "the department" as used in sections 31 to 33 means the community planning and economic development department established under this subdivision;

(2) transfer to the department the community development and planning duties and functions of any other department or office of the city of Minneapolis, including the employees performing those duties and functions. If the duties and functions of the city planning department are transferred to the department, the department must perform the administrative duties that were formerly performed by the city's planning department on behalf of or at the request of the city's planning commission;

(3) transfer any positions of the Minneapolis community development agency to the city of Minneapolis. The ordinance may provide the process for establishing, classifying, and describing the duties for the transferred positions. Employees of the Minneapolis community development agency who are not in the classified service of the city of Minneapolis may be transferred to the city of Minneapolis, and the city council may transfer the employees into the classified service of the city of Minneapolis and into positions for which the employees are qualified, as determined by the city council;

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(4) establish the position of director of the department in the unclassified service of the city, and establish other unclassified positions as necessary. Unclassified positions, other than the director, must meet the following criteria:

(i) the person occupying the position must report to the director or a deputy director;

(ii) the person occupying the position must be part of the director's management team;

(iii) the duties of the position must involve significant discretion and substantial involvement in the development, interpretation, or implementation of city or department policy;

(iv) the duties of the position must not primarily require technical expertise where continuity in the position would be significant; and

(v) the person occupying the position must be accountable to, loyal to, and compatible with the mayor, the city council, and the director; and

(5) establish the terms and conditions of employment for employees of the department.

Subd. 2. The employees of the department are employees of the city of Minneapolis for the purposes of membership in the public employees retirement association. An employee transferred from the Minneapolis community development agency to the city of Minneapolis must elect within six months of the effective date of the transfer to either continue as a member of the retirement program in which the employee participated on the date of the employee's transfer to the city of Minneapolis or to become a member of the public employees retirement association. This election is irrevocable. An employee who was a member of the Minneapolis employees retirement fund on the date of the employee's transfer to the city of Minneapolis may continue as a member of that fund retaining all vested rights, constructive time, and employee and employer contributions made on the employee's behalf to that fund. The city of Minneapolis must make the required employer contributions to the elected retirement program. An employee electing to become a member of the public employees retirement association may enroll in the association with vested rights based upon the employee's current tenure as an employee of the Minneapolis community development agency, but that tenure does not constitute allowable service for purposes of determining benefits.

Subd. 3. The terms of a collective bargaining agreement that is in effect between the Minneapolis community development agency and its employees, some or all of whom may be transferred to the city of Minneapolis, are binding upon the city of Minneapolis and the employees for the term of the contract.

Subd. 4. An employee electing under subdivision 2 to become a member of the public employees retirement association may purchase allowable service credit from the association by paying to the association an amount calculated under Minnesota Statutes, section 356.55. The service credit that is purchasable is a period or periods of employment by the Minneapolis community development agency that would have been eligible service for coverage by the general employees retirement plan of the public employees retirement association if the service had been rendered after the effective date of this article. A person electing to purchase service credit under this subdivision must provide any documentation of prior service required by the executive director of the public employees retirement association. Notwithstanding any provision of Minnesota Statutes, section 356.55, to the contrary, the prior service credit purchase payment may be made in whole or in part on an institution-to-institution basis from a plan qualified under the federal Internal Revenue Code, section 401(a), 401(k), or 414(h), or from an annuity qualified under the federal Internal Revenue Code, section 403, or from a deferred compensation plan under the federal Internal Revenue Code, section 457, to the extent permitted by federal law. In no event may a prior service credit purchase transfer be paid directly to the person purchasing the service.

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Sec. 32. [AUTHORITY.]

Subdivision 1. Notwithstanding a contrary law or provision of the Minneapolis city charter, the city council may exercise the powers granted by Minnesota Statutes, sections 469.001 to 469.134, and 469.152 to 469.1799, and any other powers granted to a city of the first class, except for powers relating to public housing. In exercising the powers authorized by this section, the city of Minneapolis shall be the authority, agency, or redevelopment agency referred to in Minnesota Statutes, sections 469.001 to 469.134, and 469.152 to 469.1799, and the city council of the city of Minneapolis shall be the governing body or board of commissioners of the authority, agency, or redevelopment agency. The city council may exercise the powers authorized by this subdivision; by Laws 1980, chapter 595, as amended; by Laws 1990, chapter 604, article 7, section 29, as amended by Laws 1991, chapter 291, article 10, section 20; and may exercise any other development or redevelopment powers authorized by law, independently, or in conjunction with each other, as though all of the authorized powers had been granted to a single entity. But a program, project, or district authorized by the city under Minnesota Statutes, sections 469.001 to 469.134, and 469.152 to 469.l799, is subject to the limitations of the program, project, or district imposed by Minnesota Statutes, sections 469.001 to 469.134, and 469.152 to 469.1799.

Subd. 2. The city council may delegate to the department any of the powers granted to the city of Minneapolis under subdivision 1, except the power to tax and the power to issue bonds, notes, or other obligations of the city of Minneapolis.

Subd. 3. Notwithstanding a contrary law or provision of the Minneapolis city charter, money, investments, real property, personal property, assets, programs, projects, districts, developments, or obligations of the Minneapolis community development agency may be transferred by resolution of the city council to the city of Minneapolis and be made subject to the control, authority, and operation of the department. If a transfer is made, the city of Minneapolis is bound by the contractual obligations of the Minneapolis community development agency with respect to the money, investments, real estate, personal property, assets, programs, projects, districts, developments, or obligations, including the obligations of any bonds, notes, or other debt obligations of the Minneapolis community development agency. The pledge of the full faith and credit of the Minneapolis community development agency to any bonds, notes, or other debt obligations of the Minneapolis community development agency that are transferred to the city of Minneapolis shall not be secured by the full faith and credit of the city of Minneapolis and shall not be secured by the taxing powers of the city of Minneapolis but only by the assets pledged by the Minneapolis community development agency to the payment of the bonds, notes, or other debt obligations. The city council is granted the powers necessary to perform the contractual obligations transferred to the city of Minneapolis.

Subd. 4. The city council may pledge to the payment of bonds, notes, or other obligations of the city of Minneapolis revenues, assets, reserves, or other property transferred to the city of Minneapolis under this section.

Subd. 5. The city council may pledge to the payment of bonds, notes, or other obligations of the city of Minneapolis the full faith and credit of the city of Minneapolis, or the taxing power of the city of Minneapolis, to finance programs, projects, districts, developments, facilities, or activities undertaken by the department.

Subd. 6. Unless prohibited by other law or a contractual obligation including a pledge to the owners of bonds, notes, or other indebtedness, the money and investments of the Minneapolis community development agency transferred to the city of Minneapolis under this section may be deposited in any fund or account of the city of Minneapolis.

Subd. 7. If all money, investments, real property, personal property, assets, programs, projects, districts, developments, or obligations of the Minneapolis community development agency are transferred to the city of Minneapolis, the city council may, by resolution, dissolve the Minneapolis community development agency. Any rights, duties, claims, awards, grants, or liabilities that may arise after the dissolution of the Minneapolis community development agency shall constitute rights, duties, claims, awards, grants, or liabilities of the city of Minneapolis.

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The pledge of the full faith and credit of the Minneapolis community development agency to any bonds, notes, or other debt obligations of the Minneapolis community development agency that are transferred to the city of Minneapolis shall not be secured by the full faith and credit or the taxing powers of the city of Minneapolis but shall be secured only by the assets pledged by the Minneapolis community development agency to the payment of the bonds, notes, or other debt obligations.

Subd. 8. If the city of Minneapolis exercises its powers for industrial development or establishes industrial development districts under Minnesota Statutes, sections 469.048 to 469.068, the term "industrial," when used in relation to industrial development, includes economic and economic development and housing and housing development.

Sec. 33. [LIMITATIONS.]

Subdivision 1. Bonds, notes, or other obligations issued to finance or refinance a program, project, district, development, facility, or activity of the department must be issued by the city council, or, at the request of the city council, by the board of estimate and taxation of the city of Minneapolis. The limitations of this section must not be applied in a manner that impairs the security of bonds, notes, or other obligations issued before the imposition of the limitations.

Subd. 2. Unless otherwise provided in sections 31 to 33, all actions of the city council under sections 31 to 33 are actions within chapter 3, section 1, of the charter of the city of Minneapolis.

Sec. 34. [EFFECTIVE DATE; LOCAL APPROVAL.]

Sections 31 to 33 are effective the day after the governing body of the city of Minneapolis and its chief clerical officer timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 35. [DEFINITIONS.]

Subdivision 1. [DEFINITIONS.] For the purposes of sections 35 to 41, the terms defined in this section have the following meanings.

Subd. 2. [LAKES AREA ECONOMIC DEVELOPMENT AUTHORITY.] "Lakes area economic development authority" or "authority" means the lakes area economic authority established as provided in section 36.

Subd. 3. [PERSON.] "Person" means an individual, partnership, corporation, cooperative, or other organization or entity, public or private.

Subd. 4. [MEMBER.] "Member" means the city of Alexandria or Garfield or the township of Alexandria or La Grand, or any other municipality, the geographic area of which is included within the jurisdiction of the authority.

Subd. 5. [MUNICIPALITY.] "Municipality" means a statutory or home rule charter city or town located in Douglas county.

Sec. 36. [LAKES AREA ECONOMIC DEVELOPMENT AUTHORITY.]

Subdivision 1. [ESTABLISHMENT.] A lakes area economic development authority with jurisdiction over the geographic area of its members is established as a public corporation and political subdivision of the state with perpetual succession and all the rights, powers, privileges, immunities, and duties that may be validly granted to or imposed upon a municipal corporation, as provided in sections 35 to 41.

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Subd. 2. [BOARD OF COMMISSIONERS.] The authority is governed by a board of commissioners to be selected as follows: the mayor of each member city, and the chair of the town board of each member town shall appoint one commissioner, subject to the approval of the respective city council or town board. The terms of the commissioner are as provided in subdivision 5.

Subd. 3. [TIME LIMITS FOR SELECTION, ALTERNATIVE APPOINTMENT BY DISTRICT JUDGE.] The initial appointment of commissioners must be made no later than 60 days after sections 35 to 41 become effective. Subsequent appointments must be made within 60 days before the expiration of a term in the same manner as the predecessor was selected. A vacancy on the board must be filled within 60 days after it occurs. If a selection is not made within the prescribed time, the chief judge of the seventh judicial district of the Minnesota district court on application by an interested person shall appoint an eligible person to the board.

Subd. 4. [VACANCIES.] If a vacancy occurs in the office of commissioner, the vacancy must be filled for the unexpired term in a like manner as provided for selection of the commissioner who vacated the office. The office must be considered vacant under the conditions specified in Minnesota Statutes, section 351.02.

Subd. 5. [TERMS OF OFFICE.] The terms of the initial appointees to the board of commissioners are for three, four, five, and six years and must be established by lot among the initial four commissioners. The mayor or town board chair of any new member added under section 39 shall designate the term, not to exceed six years, of the first commissioner selected to represent the member. Succeeding terms of all commissioners are six years, except that each commissioner serves until a successor has been duly selected and qualified.

Subd. 6. [REMOVAL.] A commissioner may be removed by the unanimous vote of the appointing governing body, with or without cause.

Subd. 7. [QUALIFICATIONS.] A commissioner may, but need not, be a resident of the territory of the member appointing that commissioner.

Subd. 8. [COMPENSATION.] A commissioner must be paid a per diem compensation for attending a regular or special meeting in an amount determined by the board. A commissioner must be reimbursed for all reasonable expenses incurred in the performance of the commissioner's duties as determined by the board.

Sec. 37. [POWERS; APPLICATION OF EDA LAW.]

Subdivision 1. [USE OF EDA POWERS.] Except as otherwise provided in sections 35 to 41, the authority may exercise any of the powers of an economic development authority (EDA) provided by Minnesota Statutes, sections 469.090 to 469.1082, and for this purpose the term "city" means a member. Minnesota Statutes, sections 469.096 to 469.101, 469.103 to 469.106, and 469.108 to 469.1081, apply to the authority, except that the authority's fiscal year is the calendar year.

Subd. 2. [LAW THAT IS NOT APPLICABLE.] The provisions in:

(1) Minnesota Statutes, section 469.091, subdivision 1, expressly relating to:

(i) the adoption of an enabling resolution;

(ii) Minnesota Statutes, section 469.092; or

(iii) housing and redevelopment authorities; and

(2) Minnesota Statutes, sections 469.093, 469.095, 469.102, and 469.107;

do not apply to the authority.

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Sec. 38. [MEMBERS MUST LEVY TAXES FOR AUTHORITY.]

(a) A member shall, at the request of the authority, levy a tax in any year for the benefit of the authority. The tax is, for each member, a pro rata portion of the total amount of tax requested by the authority based on the taxable market value within a member's jurisdiction, but in no event may the tax in any year exceed 0.01813 percent of taxable market value. For purposes of this section, "taxable market value" has the meaning as given in Minnesota Statutes, section 273.032.

(b) The treasurer of each member city or town shall, within 15 days after receiving the property tax settlements from the county treasurer, pay to the treasurer of the authority the amount collected for this purpose. The money must be used by the authority for the purposes provided by sections 35 to 41.

Sec. 39. [ADDITION AND WITHDRAWAL OF MEMBERS.]

Subdivision 1. [ADDITIONS.] A municipality upon a resolution adopted by a four-fifths vote of all of its governing body may petition the authority to be included within the jurisdiction of the authority and, if approved by the authority, the geographic area of the municipality must be included within the jurisdiction of the authority and subject to the jurisdiction of the authority under sections 35 to 41.

Subd. 2. [WITHDRAWALS.] A municipality may withdraw from the authority by resolution of its governing body. The municipality must notify the board of commissioners of the authority of the withdrawal by providing a copy of the resolution at least two years in advance of the proposed withdrawal. Unless the authority and the withdrawing member agree otherwise by action of their governing bodies, the taxable property of the withdrawing member is subject to the property tax levy under section 38 for two taxes payable years following the notification of the withdrawal and the withdrawing member retains any rights, obligations, and liabilities obtained or incurred during its participation.

Sec. 40. [CONTRACTS WITH NONPROFIT CORPORATIONS.]

The authority may enter into contracts with one or more nonprofit corporations to make, from funds of and under guidelines set by the authority, loans or grants for projects the authority may undertake under sections 35 to 41. Minnesota Statutes, section 465.719, does not apply so long as the nonprofit corporation is not described in Minnesota Statutes, section 465.719, subdivision 1, paragraph (b), item (i), or (b), item (ii).

Sec. 41. [RELATION TO EXISTING LAWS.]

Sections 35 to 41 must be given full effect notwithstanding any law or charter that is inconsistent with them.

Sec. 42. [LOCAL APPROVAL; EFFECTIVE DATE.]

Sections 35 to 41 are only effective as to all affected governing bodies on the day after the last of the governing bodies or town boards of the cities of Alexandria and Garfield and the towns of Alexandria and La Grand in Douglas county and the chief clerical officer of each of them timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

ARTICLE 13

MOSQUITO CONTROL DISTRICT

Section 1. Minnesota Statutes 2002, section 18B.07, subdivision 2, is amended to read:

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Subd. 2. [PROHIBITED PESTICIDE USE.] (a) A person may not use, store, handle, distribute, or dispose of a pesticide, rinsate, pesticide container, or pesticide application equipment in a manner:

(1) that is inconsistent with a label or labeling as defined by FIFRA;

(2) that endangers humans, damages agricultural products, food, livestock, fish, or wildlife; or

(3) that will cause unreasonable adverse effects on the environment.

(b) A person may not direct a pesticide onto property beyond the boundaries of the target site. A person may not apply a pesticide resulting in damage to adjacent property.

(1) the pesticide is intended for use on a human;

(2) the pesticide application is for mosquito control operations ~~conducted before June 30, 2003, in compliance with paragraph (d), clauses (1) and (2)~~;

(3) the pesticide application is for control of gypsy moth, forest tent caterpillar, or other pest species, as determined by the commissioner, and the pesticide used is a biological agent; or

(4) the pesticide application is for a public health risk, as determined by the commissioner of health, and the commissioner of health, in consultation with the commissioner of agriculture, determines that the application is warranted based on the commissioner's balancing of the public health risk with the risk that the pesticide application poses to the health of the general population, with special attention to the health of children.

(d) For pesticide applications under paragraph (c), clause (2), the following conditions apply:

(1) no practicable and effective alternative method of control exists;

(2) the pesticide is among the least toxic available for control of the target pest; and

(3) notification to residents in the area to be treated is provided at least 24 hours before application through direct notification, posting daily on the treating organization's Web site, and by sending a broadcast e-mail to those persons who request notification of such, of those areas to be treated by adult mosquito control techniques during the next calendar day. For control operations related to human disease, notice under this paragraph may be given less than 24 hours in advance.

(e) For pesticide applications under paragraph (c), clauses (3) and (4), the following conditions apply:

(1) no practicable and effective alternative method of control exists;

(2) the pesticide is among the least toxic available for control of the target pest; and

(3) notification of residents in the area to be treated is provided by direct notification and through publication in a newspaper of general circulation within the affected area.

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~~(e)~~ (f) For purposes of this subdivision, "direct notification" may include mailings, public meetings, posted placards, neighborhood newsletters, or other means of contact designed to reach as many residents as possible.

~~(f)~~ (g) A person may not apply a pesticide in a manner so as to expose a worker in an immediately adjacent, open field.

Sec. 2. Minnesota Statutes 2002, section 473.702, is amended to read:

473.702 [ESTABLISHMENT OF DISTRICT; PURPOSE; AREA; GOVERNING BODY.]

A metropolitan mosquito control district is created to control mosquitoes, disease vectoring ticks, and black gnats (Simuliidae) in the metropolitan area. The area of the district is the metropolitan area defined in section 473.121. ~~The area of the district is the metropolitan area excluding the part of Carver county west of the west line of township 116N, range 24W, township 115N, range 24W, and township 114N, range 24W.~~ The metropolitan mosquito control commission is created as the governing body of the district, composed and exercising the powers as prescribed in sections 473.701 to 473.716.

Sec. 3. Minnesota Statutes 2002, section 473.703, subdivision 1, is amended to read:

Subdivision 1. [METRO COUNTY COMMISSIONERS.] The district shall be operated by a commission which shall consist of three members from Anoka county, ~~one member~~ two members from Carver county, three members from Dakota county, three members from Hennepin county, three members from Ramsey county, two members from Scott county, and two members from Washington county. Commissioners shall be members of the board of county commissioners of their respective counties, and shall be appointed by their respective boards of county commissioners.

Sec. 4. Minnesota Statutes 2002, section 473.704, subdivision 17, is amended to read:

Subd. 17. [ENTRY TO PROPERTY.] (a) Members of the commission, its officers, and employees, while on the business of the commission, may enter upon any property within or outside the district at reasonable times to determine the need for control programs. They may take all necessary and proper steps for the control programs on property within the district as the director of the commission may designate. Subject to the paramount control of the county and state authorities, commission members and officers and employees of the commission may enter upon any property and clean up any stagnant pool of water, the shores of lakes and streams, and other breeding places for mosquitoes within the district. The commission may apply insecticides approved by the director to any area within or outside the district that is found to be a breeding place for mosquitoes. The commission shall give reasonable notification to the governing body of the local unit of government prior to applying insecticides outside of the district on land located within the jurisdiction of the local unit of government. The commission shall not enter upon private property if the owner objects except to monitor for disease-bearing mosquitoes, ticks, or black gnats or for control of ~~disease bearing mosquito encephalitis outbreaks~~ mosquito species capable of carrying a human disease in the local area of a human disease outbreak regardless of whether there has been an occurrence of the disease in a human being.

(b) The commissioner of natural resources must approve mosquito control plans or make modifications as the commissioner of natural resources deems necessary for the protection of public water, wild animals, and natural resources before control operations are started on state lands administered by the commissioner of natural resources. Until July 1, 2002, approval may, if the commissioner of natural resources considers it necessary, be denied, modified, or revoked by the commissioner of natural resources at any time upon written notice to the commission.

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Sec. 5. Minnesota Statutes 2002, section 473.705, is amended to read:

473.705 [CONTRACTS FOR MATERIALS, SUPPLIES AND EQUIPMENT.]

~~No contract~~ Contracts for the purchase of materials, supplies, and equipment ~~costing more than $5,000 shall be made~~ must comply with and be governed by the Minnesota uniform municipal contracting law, section 471.345. A sealed bid solicitation must not be done by the commission without publishing the notice once in the official newspaper of each of the counties in the district that bids or proposals will be received. The notice shall be published at least ten days before bids are opened. Such notice shall state the nature of the work or purchase and the terms and conditions upon which the contract is to be awarded, naming therein a time and place where such bids will be received, opened, and read publicly. After such bids have been duly received, opened, read publicly, and recorded, the commission shall award such contract to the lowest responsible bidder or it may reject all bids. Each contract shall be duly executed in writing and the party to whom the contract is awarded may be required to give sufficient bond to the commission for the faithful performance of the contract. If no satisfactory bid is received the commission may readvertise. The commission shall have the right to set qualifications and specifications and to require bids to meet such qualifications and specifications before bids are accepted. If the commission by an affirmative vote of five-sixths of the voting power of the commission shall declare that an emergency exists requiring the immediate purchase of materials or supplies at a cost in excess of $5,000 but not to exceed $10,000 in amount, or in making emergency repairs, it shall not be necessary to advertise for bids, but such material, equipment, and supplies may be purchased in the open market at the lowest price available without securing formal competitive bids. An emergency as used in this section shall be an unforeseen circumstance or condition which results in placing life or property in jeopardy. All contracts involving employment of labor shall stipulate terms thereof and such conditions as the commission deems reasonable as to hours and wages.

Sec. 6. Minnesota Statutes 2002, section 473.711, subdivision 2a, is amended to read:

Subd. 2a. [TAX LEVY.] (a) The commission may levy a tax on all taxable property in the district as defined in section 473.702 to provide funds for the purposes of sections 473.701 to 473.716. The tax shall not exceed the property tax levy limitation determined in this subdivision. A participating county may agree to levy an additional tax to be used by the commission for the purposes of sections 473.701 to 473.716 but the sum of the county's and commission's taxes may not exceed the county's proportionate share of the property tax levy limitation determined under this subdivision based on the ratio of its total net tax capacity to the total net tax capacity of the entire district as adjusted by section 270.12, subdivision 3. The auditor of each county in the district shall add the amount of the levy made by the district to other taxes of the county for collection by the county treasurer with other taxes. When collected, the county treasurer shall make settlement of the tax with the district in the same manner as other taxes are distributed to political subdivisions. No county shall levy any tax for mosquito, disease vectoring tick, and black gnat (Simuliidae) control except under this section. The levy shall be in addition to other taxes authorized by law.

(b) The property tax levied by the metropolitan mosquito control commission shall not exceed ~~the following amount for the years specified:~~

(1) for taxes payable in 1996, the product of (i) the commission's property tax levy limitation for taxes payable in 1995 determined under this subdivision minus 50 percent of the amount actually levied for taxes payable in 1995, multiplied by (ii) an index for market valuation changes equal to the total market valuation of all taxable property located within the district for the current taxes payable year divided by the total market valuation of all taxable property located within the district for the previous taxes payable year;

~~(2) for taxes payable in 1997 and subsequent years,~~ the product of (i) the commission's property tax levy limitation for the previous year determined under this subdivision multiplied by (ii) an index for market valuation changes equal to the total market valuation of all taxable property for the current tax payable year located within the district ~~for the current taxes payable year~~ plus any area that has been added to the district since the previous year, divided by the total market valuation of all taxable property located within the district for the previous taxes payable year~~; and~~.

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~~(3)~~ (c) For the purpose of determining the commission's property tax levy limitation under this subdivision, "total market valuation" means the total market valuation of all taxable property within the district without valuation adjustments for fiscal disparities (chapter 473F), tax increment financing (sections 469.174 to 469.179), and high voltage transmission lines (section 273.425).

[EFFECTIVE DATE.] This section is effective for taxes payable in 2004 and thereafter.

Sec. 7. Minnesota Statutes 2002, section 473.714, subdivision 1, is amended to read:

Subdivision 1. [COMPENSATION.] ~~Except as provided in subdivision 2,~~ Each commissioner, including the officers of the commission ~~shall~~, may be reimbursed for actual and necessary expenses incurred in the performance of duties. The chair shall be paid a per diem for attending meetings, monthly, executive, and special, and each commissioner shall be paid a per diem for attending meetings, monthly, executive, and special, which per diem shall be established by the commission. A commissioner who receives a per diem from the commissioner's county shall not be paid a per diem for the same day by the commission for attending meetings of the commission. The annual budget of the commission shall provide as a separate account anticipated expenditures for ~~per diem,~~ travel and associated expenses for the chair and members, and compensation or reimbursement shall be made to the chair or members only when budgeted. No commissioner may be paid a per diem.

Sec. 8. [TRANSITIONAL AUTHORITY.]

The metropolitan mosquito control district and the Carver county board of commissioners may enter into an agreement for the district to provide its services to the part of Carver county added to the district by this article until the proceeds of the levy from that part of Carver county are available for those services. During this period the services may be provided on the terms and for fees that are mutually agreed to by the parties.

Sec. 9. [REPEALER.]

Minnesota Statutes 2002, sections 473.711, subdivision 2b, and 473.714, subdivision 2, are repealed.

Sec. 10. [EFFECTIVE DATE.]

Sections 1 to 9 are effective the day following final enactment."

Page 172, line 29, delete "10" and insert "14"

Pages 172 to 174, delete sections 1 and 2 and insert:

"Section 1. Minnesota Statutes 2002, section 8.30, is amended to read:

8.30 [COMPROMISE OF TAX AND FEE CLAIMS.]

Notwithstanding any other provisions of law to the contrary, the attorney general shall have authority to compromise taxes, fees, surcharges, assessments, penalties, and interest in ~~any case referred to the attorney general by the commissioner of revenue~~ all cases, whether reduced to judgment or not, where the debt is being reduced by an amount exceeding $50,000 and, in the attorney general's opinion, it shall be in the best interests of the state to do so. Such a compromise must be in a form prescribed by the attorney general and shall be in writing signed by the attorney general, the taxpayer or taxpayer's representative, and the commissioner of revenue. Compromises of such debts in cases where the debt is being reduced by an amount of $50,000 or less are governed by section 16D.15.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

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Sec. 2. Minnesota Statutes 2002, section 270.059, is amended to read:

270.059 [REVENUE DEPARTMENT SERVICE AND RECOVERY SPECIAL REVENUE FUND.]

A revenue department service and recovery special revenue fund is created for the purpose of recovering the costs of furnishing public government data and related services or products, as well as recovering costs associated with collecting local taxes on sales. All money collected under this section is deposited in the revenue department service and recovery special revenue fund. Money in the fund is appropriated to the commissioner of revenue to reimburse the department of revenue for the costs incurred in administering the tax law or providing the data, service, or product. Any monies paid to the department as a criminal fine for a tax law violation that are designated by the court to fund tax law enforcement are appropriated to this fund.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 3. Minnesota Statutes 2002, section 270.67, subdivision 4, is amended to read:

Subd. 4. [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT PROGRAM.] (a) In implementing the authority provided in subdivision 2 or in ~~section~~ sections 8.30 and 16D.15 to accept offers of installment payments or offers-in-compromise of tax liabilities, the commissioner of revenue shall prescribe guidelines for employees of the department of revenue to determine whether an offer-in-compromise or an offer to make installment payments is adequate and should be accepted to resolve a dispute. In prescribing the guidelines, the commissioner shall develop and publish schedules of national and local allowances designed to provide that taxpayers entering into a compromise or payment agreement have an adequate means to provide for basic living expenses. The guidelines must provide that the taxpayer's ownership interest in a motor vehicle, to the extent of the value allowed in section 550.37, will not be considered as an asset; in the case of an offer related to a joint tax liability of spouses, that value of two motor vehicles must be excluded. The guidelines must provide that employees of the department shall determine, on the basis of the facts and circumstances of each taxpayer, whether the use of the schedules is appropriate and that employees must not use the schedules to the extent the use would result in the taxpayer not having adequate means to provide for basic living expenses. The guidelines must provide that:

(1) an employee of the department shall not reject an offer-in-compromise or an offer to make installment payments from a low-income taxpayer solely on the basis of the amount of the offer; and

(2) in the case of an offer-in-compromise which relates only to issues of liability of the taxpayer:

(i) the offer must not be rejected solely because the commissioner is unable to locate the taxpayer's return or return information for verification of the liability; and

(ii) the taxpayer shall not be required to provide an audited, reviewed, or compiled financial statement.

(b) The commissioner shall establish procedures:

(1) that require presentation of a counteroffer or a written rejection of the offer by the commissioner if the amount offered by the taxpayer in an offer-in-compromise or an offer to make installment payments is not accepted by the commissioner;

(2) for an administrative review of any written rejection of a proposed offer-in-compromise or installment agreement made by a taxpayer under this section before the rejection is communicated to the taxpayer;

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(3) that allow a taxpayer to request reconsideration of any written rejection of the offer or agreement to the commissioner of revenue to determine whether the rejection is reasonable and appropriate under the circumstances; and

(4) that provide for notification to the taxpayer when an offer-in-compromise has been accepted, and issuance of certificates of release of any liens imposed under section 270.69 related to the liability which is the subject of the compromise.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 4. Minnesota Statutes 2002, section 290.06, subdivision 24, is amended to read:

Subd. 24. [CREDIT FOR JOB CREATION.] (a) A corporation that leases and operates a heavy maintenance base for aircraft that is owned by the state of Minnesota or one of its political subdivisions, or an engine repair facility described in section 116R.02, subdivision 6, or both, may take a credit against the tax due under this chapter.

(b) For the first taxable year when the facility has been in operation for at least three consecutive months, the credit is equal to $5,000 multiplied by the number of persons employed by the corporation on a full-time basis at the facility on the last day of the taxable year, not to exceed the number of persons employed by the corporation on a full-time basis at the facility on the date 90 days before the last day of the taxable year. For each of the succeeding four taxable years, the credit is equal to $5,000 multiplied by the number of persons employed by the corporation on a full-time basis at the facility on the last day of the taxable year, not to exceed the number of persons employed by the corporation on a full-time basis at the facility on the date 90 days before the last day of the taxable year.

(c) For the first taxable year in which the credit is allowed for the facility, the credit must not exceed 80 percent of the wages paid to or incurred for persons employed by the taxpayer at the facility during the taxable year. For the succeeding four taxable years, the credit must not exceed 20 percent of the wages paid to or incurred for persons employed by the taxpayer at the facility during the taxable year. For purposes of this section, "wages" has the meaning given under section 3121(b) of the Internal Revenue Code, except the limitation to the contribution and benefit base does not apply.

(d) If the credit provided under this subdivision exceeds the tax liability of the corporation for the taxable year, the excess amount of the credit may be carried over to each of the ~~ten~~ 20 taxable years succeeding the taxable year. The entire amount of the credit must be carried to the earliest taxable year to which the amount may be carried. The unused portion of the credit must be carried to the following taxable year. No credit may be carried to a taxable year more than ~~ten~~ 20 years after the taxable year in which the credit was earned.

(e) if an unused portion of the credit remains at the end of the carryover period under paragraph (d), the commissioner shall refund the unused portion to the taxpayer. The provisions of this paragraph do not apply if the corporation that earned the credit under this subdivision or a successor in interest to the corporation filed for bankruptcy protection.

[EFFECTIVE DATE.] This section is effective for taxable years beginning after December 31, 2003.

Sec. 5. Minnesota Statutes 2002, section 297F.05, subdivision 1, is amended to read:

Subdivision 1. [RATES; CIGARETTES.] A tax is imposed upon the sale of cigarettes in this state, upon having cigarettes in possession in this state with intent to sell, upon any person engaged in business as a distributor, and upon the use or storage by consumers, at the following rates~~, subject to the discount provided in this chapter~~:

(1) on cigarettes weighing not more than three pounds per thousand, 24 mills on each such cigarette; and

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(2) on cigarettes weighing more than three pounds per thousand, 48 mills on each such cigarette.

[EFFECTIVE DATE.] This section is effective for sales of stamps made after June 30, 2003.

Sec. 6. Minnesota Statutes 2002, section 297F.08, subdivision 7, is amended to read:

Subd. 7. [PRICE OF STAMPS.] The commissioner shall sell stamps to any person licensed as a distributor at a discount of 1.0 percent from the face amount of the stamps for the first $1,500,000 of such stamps purchased in any fiscal year; and at a discount of 0.6 percent on the remainder of such stamps purchased in any fiscal year. The commissioner shall not sell stamps to any other person. The commissioner may prescribe the method of shipment of the stamps to the distributor as well as the quantities of stamps purchased.

[EFFECTIVE DATE.] This section is effective for sales of stamps made after June 30, 2003.

Sec. 7. Minnesota Statutes 2002, section 297F.08, is amended by adding a subdivision to read:

Subd. 12. [CIGARETTES IN INTERSTATE COMMERCE.] (a) A person may not transport or cause to be transported from this state cigarettes for sale in another state without first affixing to the cigarettes the stamp required by the state in which the cigarettes are to be sold or paying any other excise tax on the cigarettes imposed by the state in which the cigarettes are to be sold.

(b) A person may not affix to cigarettes the stamp required by another state or pay any other excise tax on the cigarettes imposed by another state if the other state prohibits stamps from being affixed to the cigarettes, prohibits the payment of any other excise tax on the cigarettes, or prohibits the sale of the cigarettes.

(c) Not later than 15 days after the end of each calendar quarter, a person who transports or causes to be transported from this state cigarettes for sale in another state shall submit to the commissioner a report identifying the quantity and style of each brand of the cigarettes transported or caused to be transported in the preceding calendar quarter, and the name and address of each recipient of the cigarettes.

(d) For purposes of this section, "person" has the meaning given in section 297F.01, subdivision 12. Person does not include any common or contract carrier, or public warehouse that is not owned, in whole or in part, directly or indirectly by such person.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 8. Minnesota Statutes 2002, section 297F.09, subdivision 2, is amended to read:

Subd. 2. [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.] On or before the 18th day of each calendar month, a distributor with a place of business in this state shall file a return with the commissioner showing the quantity and wholesale sales price of each tobacco product:

(1) brought, or caused to be brought, into this state for sale; and

(2) made, manufactured, or fabricated in this state for sale in this state, during the preceding calendar month.

Every licensed distributor outside this state shall in like manner file a return showing the quantity and wholesale sales price of each tobacco product shipped or transported to retailers in this state to be sold by those retailers, during the preceding calendar month. Returns must be made in the form and manner prescribed by the

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commissioner and must contain any other information required by the commissioner. The return must be accompanied by a remittance for the full tax liability shown~~, less 1.5 percent of the liability as compensation to reimburse the distributor for expenses incurred in the administration of this chapter~~.

[EFFECTIVE DATE.] This section is effective for sales made after June 30, 2003.

Sec. 9. [297F.24] [FEE IN LIEU OF SETTLEMENT.]

Subdivision 1. [FEE IMPOSED.] (a) A fee is imposed upon the sale of nonsettlement cigarettes in this state, upon having nonsettlement cigarettes in possession in this state with intent to sell, upon any person engaged in business as a distributor, and upon the use or storage by consumers of nonsettlement cigarettes. The fee equals a rate of 1.75 cents per cigarette.

(b) The purpose of this fee is to:

(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that are comparable to costs attributable to the use of the cigarettes;

(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's policy of discouraging underage smoking by offering nonsettlement cigarettes at prices substantially below the cigarettes of other manufacturers; and

(3) fund such other purposes as the legislature determines appropriate.

Subd. 2. [NONSETTLEMENT CIGARETTES.] For purposes of this section, a "nonsettlement cigarette" means a cigarette manufactured by a person other than a manufacturer that:

(1) is making annual payments to the state of Minnesota under a settlement of the lawsuit styled as State v. Philip Morris Inc., No. C1-94-8565 (Minnesota District Court, Second Judicial District), if the style of cigarettes is included in computation of the payments under the agreement; or

(2) has voluntarily entered into an agreement with the state of Minnesota, approved by the attorney general, agreeing to terms similar to those contained in the settlement agreement, identified in clause (1) including making annual payments to the state, with respect to its national sales of the style of cigarettes, equal to at least 75 percent of the payments that would apply if the manufacturer was one of the four original parties to the settlement agreement required to make annual payments to the state.

Subd. 3. [COLLECTION AND ADMINISTRATION.] The commissioner shall administer the fee under this section in the same manner as the excise tax imposed under section 297F.05 and all of the provisions of this chapter apply as if the fee were a tax imposed under section 297F.05. The commissioner shall deposit the proceeds of the fee in the general fund.

[EFFECTIVE DATE.] This section is effective for sales of nonsettlement cigarettes made after June 30, 2003.

Sec. 10. Minnesota Statutes 2002, section 297H.06, subdivision 1, is amended to read:

Subdivision 1. [CERTAIN SURCHARGES OR FEES.] The amount of a surcharge, fee, or charge established pursuant to section 115A.919, 115A.921, 115A.923, 400.08, 473.811, or 473.843 is exempt from the solid waste management tax. The amount shown on a property tax statement as a county charge for solid waste management service or as a surcharge, fee, or charge established pursuant to section 400.08, subdivision 3, or section 473.811,

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~~subdivision 3a, is exempt from the solid waste management tax.~~ The exemption does not apply to the tax imposed on market price under section 297H.02, subdivision 1, paragraphs (b) and (c), or section 297H.03, subdivision 1, paragraphs (b) and (c).

[EFFECTIVE DATE.] This section is effective April 1, 2003.

Sec. 11. Minnesota Statutes 2002, section 298.75, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] Except as may otherwise be provided, the following words, when used in this section, shall have the meanings herein ascribed to them.

(1) "Aggregate material" shall mean nonmetallic natural mineral aggregate including, but not limited to sand, silica sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is transported on a public road, street, or highway. Aggregate material shall not include dimension stone and dimension granite. Aggregate material must be measured or weighed after it has been extracted from the pit, quarry, or deposit.

(2) "Person" shall mean any individual, firm, partnership, corporation, organization, trustee, association, or other entity.

(3) "Operator" shall mean any person engaged in the business of removing aggregate material from the surface or subsurface of the soil, for the purpose of sale, either directly or indirectly, through the use of the aggregate material in a marketable product or service.

(4) "Extraction site" shall mean a pit, quarry, or deposit containing aggregate material and any contiguous property to the pit, quarry, or deposit which is used by the operator for stockpiling the aggregate material.

(5) "Importer" shall mean any person who buys aggregate material produced from a county not listed in paragraph (6) or another state and causes the aggregate material to be imported into a county in this state which imposes a tax on aggregate material.

(6) "County" shall mean the counties of Pope, Stearns, Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley, Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose board has voted after a public hearing to impose the tax under this section and has notified the commissioner of revenue of the imposition of the tax.

(7) "Borrow" shall mean granular borrow, consisting of durable particles of gravel and sand, crushed quarry or mine rock, crushed gravel or stone, or any combination thereof, the ratio of the portion passing the (#200) sieve divided by the portion passing the (1 inch) sieve may not exceed 20 percent by mass.

[EFFECTIVE DATE.] This section is effective for borrow removed and transported on a public road, street, or highway on or after July 1, 2003."

Page 174, after line 15, insert:

"Sec. 13. Laws 2002, chapter 377, article 12, section 17, is amended to read:

Sec. 17. [APPROPRIATION.]

(a) $585,000 in fiscal year 2002 and $7,015,000 in fiscal year 2003 are appropriated to the commissioner of revenue from the general fund for tax compliance activities, including identification and collection of tax liabilities from individuals and businesses that currently do not pay all taxes owed, and audit and collection activity in the income tax, sales tax, lawful gambling, insurance, and corporate areas. The base funding for these activities in fiscal years 2004 and 2005 is increased by $4,750,000 each year.

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(b) The commissioner must include these tax compliance activities in the report required by Laws 2001, First Special Session chapter 10, article 1, section 16, subdivision 2, paragraph (c).

(c) Laws 2002, chapter 220, article 10, section 38, does not apply to the positions necessary to carry out the compliance activities identified in this section.

~~(d) If the legislative auditor determines that:~~

(1) actual revenue collections generated from tax compliance activities funded by Laws 2001, First Special Session chapter 10, article 1, section 16, subdivision 2, paragraphs (a) and (b), will not generate at least $52,000,000 in additional general fund revenue for the biennium ending June 30, 2003; or

(2) actual revenue collections generated from new tax compliance activities funded by the appropriation in this section will not generate at least $7,600,000 in additional general fund revenue for the biennium ending June 30, 2003;

then the commissioner of finance must cancel from the budget reserve account to the general fund the difference between the $52,000,000 or the $7,600,000 and the actual additional general fund revenue. The legislative auditor's determination under this paragraph must be made in the February 1, 2003, report to the legislature required by Laws 2001, First Special Session chapter 10, article 1, section 16.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 14. [ADVANCE COLLECTION PROGRAM.]

Subdivision 1. [PROGRAM ESTABLISHED.] The commissioner of revenue shall establish an advance collection program to collect tax, interest, and penalty obligations that otherwise would not be collected.

Subd. 2. [POLICIES.] The commissioner of revenue shall implement and operate the program in a manner that:

(1) minimizes the impact of the program on the incentive for taxpayers to comply with Minnesota taxes; and

(2) emphasizes collecting as large a portion of the department's account receivables that are unlikely otherwise to be collected.

Subd. 3. [AUTHORITY.] (a) The authority under this section applies only to obligations on the department of revenue's accounts receivable system for which the original debt was more than two years old on the date of enactment of this section. The commissioner of revenue shall select the debts on the accounts receivable system to which this program applies and may exclude any debt or debts as the commissioner deems appropriate, because inclusion, in the sole opinion of the commissioner, may:

(1) adversely affect tax compliance;

(2) reduce the amount the state likely will collect in the future;

(3) delay resolution of an issue of the meaning or application of the tax or other law;

(4) be inconsistent with tax administration and collection policies;

(5) not be justified because of the taxpayer's conduct or past actions; or

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(6) not be in the interest of the state for any reason the commissioner solely determines.

(b) To implement this program, the commissioner shall exercise authority under Minnesota Statutes, section 270.67, to accept as a partial or discounted payment of the obligation as full payment. The commissioner shall set the discount rate for each debt at the level the commissioner determines appropriate, given the provisions of this section. For obligations that are four or more years old on the date of enactment, the commissioner may offer a reduction or discount of up to 50 percent; for obligations that are more than two years old upon the date of enactment, the commissioner may offer a reduction or discount of up to 35 percent. The commissioner may apply the appropriate discount to all or part of an obligation, regardless of the age of the obligation, if the taxpayer has an obligation that meets the minimum age requirement on the date of enactment. The commissioner shall notify taxpayers or other debtors qualifying under the program established under this section in any way the commissioner determines appropriate.

Renumber the sections in sequence and correct the internal references

Delete the title and insert:

"A bill for an act relating to financing and operation of government in this state; making changes to income, corporate franchise, estate, property, sales and use, motor vehicle sales, gross earnings, hazardous waste generator, solid waste management, aggregate materials, insurance premiums, taconite production, and cigarette and tobacco taxes, and tax provisions; changing, providing, or abolishing tax exemptions and credits; changing property tax valuation, appraisal, homestead, assessment, classification, levy, notice, review, appeal, apportionment, distribution, and aid provisions; conforming to certain changes in the internal revenue code; modifying sales tax provisions to comply with Streamlined Sales Tax Project Agreement; providing for tax administration, collection, compromise, compliance, liens, liability, and enforcement; changing tax return, refund, interest, and payment provisions; changing or imposing certain requirements on assessors; changing provisions relating to property tax refunds, tax increment financing, border city development zones, tax-forfeited land sales, recording or registration of documents, revenue recapture, and sustainable forest management incentives; clarifying commissioner of revenue's rulemaking authority; changing taconite production tax distribution provisions; authorizing certain certificates of motor vehicle title; authorizing certain sales by limited use vehicle dealers; providing for public finance instrumentalities and instruments; authorizing, validating, expanding, limiting, and clarifying public financing and economic development structures, instruments, and procedures for local public entities; imposing certain requirements for cigarettes shipped for sale in another state; imposing a fee on cigarettes produced by certain manufacturers; authorizing a Central Lakes Region Sanitary District; changing provisions relating to Cook county hospital district; giving certain powers to the Iron Range Resources and Rehabilitation Agency; giving certain authority and powers to certain cities, towns, and counties; authorizing actions by the metropolitan mosquito control district; authorizing disclosure of data and requiring access to certain records; changing, clarifying, and imposing penalties; amending Minnesota Statutes 2002, sections 8.30; 18B.07, subdivision 2; 115B.24, subdivision 8; 168.27, subdivision 4a; 168A.03; 168A.05, subdivision 1a; 216B.2424, subdivision 5; 270.059; 270.06; 270.10, subdivision 1a; 270.67, subdivision 4; 270.69, by adding a subdivision; 270.701, subdivision 2, by adding a subdivision; 270.72, subdivision 2; 270A.03, subdivision 2; 270B.12, by adding a subdivision; 272.02, subdivisions 31, 47, 53, by adding subdivisions; 272.12; 273.01; 273.05, subdivision 1; 273.061, by adding subdivisions; 273.08; 273.11, subdivision 1a; 273.124, subdivisions 1, 14; 273.13, subdivisions 22, 23, 25; 273.1315; 273.134; 273.135, subdivisions 1, 2; 273.1391, subdivision 2; 273.1398, subdivisions 4b, 4d; 273.372; 273.42, subdivision 2; 274.01, subdivision 1; 274.13, subdivision 1; 275.025, subdivisions 1, 3, 4; 276.10; 276.11, subdivision 1; 277.20, subdivision 2; 278.01, subdivision 4; 278.05, subdivision 6; 279.06, subdivision 1; 281.17; 282.01, subdivision 7a; 282.08; 289A.02, subdivision 7; 289A.10, subdivision 1; 289A.18, subdivision 4; 289A.19, subdivision 4; 289A.31, subdivisions 3, 4, by adding a subdivision; 289A.36, subdivision 7, by adding subdivisions; 289A.40, subdivision 2; 289A.50, subdivision 2a, by adding subdivisions; 289A.56, subdivisions 3, 4; 289A.60, subdivisions 7, 15, by adding a

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subdivision; 290.01, subdivisions 19, 19a, 19b, 19c, 19d, 31; 290.06, subdivisions 2c, 24; 290.0671, subdivision 1; 290.0675, subdivisions 2, 3; 290.0679, subdivision 2; 290.0802, subdivision 1; 290A.03, subdivisions 8, 15; 290C.02, subdivisions 3, 7; 290C.03; 290C.07; 290C.09; 290C.10; 290C.11; 291.005, subdivision 1; 291.03, subdivision 1; 295.50, subdivision 9b; 295.53, subdivision 1; 297A.61, subdivisions 3, 7, 10, 12, 17, 30, 34, by adding subdivisions; 297A.66, by adding a subdivision; 297A.665; 297A.668; 297A.67, subdivisions 2, 8, by adding a subdivision; 297A.68, subdivisions 2, 5, 36, by adding a subdivision; 297A.69, subdivisions 2, 3, 4; 297A.75, subdivision 4; 297A.81; 297A.85; 297A.99, subdivisions 5, 10, 12; 297A.995, by adding a subdivision; 297B.025, subdivisions 1, 2; 297B.035, subdivision 1, by adding a subdivision; 297F.01, subdivisions 21a, 23; 297F.05, subdivision 1; 297F.06, subdivision 4; 297F.08, subdivision 7, by adding a subdivision; 297F.09, subdivision 2; 297F.20, subdivisions 1, 2, 3, 6, 9; 297H.06, subdivision 1; 297I.01, subdivision 9; 297I.20; 298.2211, subdivision 1; 298.27; 298.28, subdivision 4; 298.292, subdivision 2; 298.296, subdivision 4; 298.2961, by adding a subdivision; 298.75, subdivision 1; 352.15, subdivision 1; 353.15, subdivision 1; 354.10, subdivision 1; 354B.30; 354C.165; 373.01, subdivision 3; 373.45, subdivision 1; 373.47, subdivision 1; 376.009; 376.55, subdivision 3, by adding a subdivision; 376.56, subdivision 3; 410.32; 412.301; 469.1731, subdivision 3; 469.174, subdivisions 3, 6, 10, 25, by adding a subdivision; 469.175, subdivisions 1, 3, 4, 6; 469.176, subdivisions 1c, 2, 3, 7; 469.1763, subdivisions 1, 3, 6; 469.177, subdivisions 1, 12; 469.1771, subdivision 4, by adding a subdivision; 469.178, subdivision 7; 469.1791, subdivision 3; 469.1792, subdivisions 1, 2, 3; 469.1813, subdivision 8; 469.1815, subdivision 1; 473.39, by adding a subdivision; 473.702; 473.703, subdivision 1; 473.704, subdivision 17; 473.705; 473.711, subdivision 2a; 473.714, subdivision 1; 473.898, subdivision 3; 473F.07, subdivision 4; 474A.061, subdivision 1; 475.58, subdivision 3b; 515B.1-116; Laws 1967, chapter 558, section 1, subdivision 5, as amended; Laws 1989, chapter 211, section 8, subdivisions 2, as amended, 4, as amended; Laws 1997, chapter 231, article 10, section 25; Laws 2001, First Special Session chapter 5, article 3, section 61; Laws 2001, First Special Session chapter 5, article 3, section 63; Laws 2001, First Special Session chapter 5, article 9, section 12; Laws 2002, chapter 377, article 6, section 4; Laws 2002, chapter 377, article 7, section 3; Laws 2002, chapter 377, article 11, section 1; Laws 2002, chapter 377, article 12, section 17; proposing coding for new law in Minnesota Statutes, chapters 37; 123A; 270; 273; 274; 275; 276; 290C; 297A; 297F; 410; 469; repealing Minnesota Statutes 2002, sections 270.691, subdivision 8; 274.04; 290.0671, subdivision 3; 290.0675, subdivision 5; 294.01; 294.02; 294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 294.12; 297A.61, subdivisions 14, 15; 297A.69, subdivision 5; 297A.72, subdivision 1; 297A.97; 298.24, subdivision 3; 473.711, subdivision 2b; 473.714, subdivision 2; 477A.065; 645.021, subdivisions 2, 2, 3, 3; Laws 1984, chapter 652, section 2; Laws 2002, chapter 377, article 9, section 12; Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 8009.7200; 8009.7300; 8009.7400; 8092.1000; 8106.0100, subparts 11, 15, 16; 8106.0200; 8125.1000; 8125.1300, subpart 1; 8125.1400; 8130.0800, subparts 5, 12; 8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3, 4; 8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; 8130.8300."

The motion prevailed and the amendment was adopted.

S. F. No. 1505, A bill for an act relating to taxation; making changes to income, estate, franchise, sales and use, property, motor vehicle sales tax and registration, cigarette and tobacco, liquor, aggregate and minerals taxes; creating and modifying certain sales tax exemptions; extending sunset dates for certain sales and property tax exemptions; providing for the disposition of local sales taxes for the cities of Duluth, St. Paul, Hermantown, Rochester, Mankato, and Proctor; authorizing local sales taxes in the cities of Beaver Bay, Bemidji, Clearwater, Cloquet, Hopkins, Medford, and Park Rapids; authorizing lodging taxes in the city of Newport and Itasca county; providing property tax exemptions and exclusions from property valuations; modifying truth-in-taxation provisions; providing for the creation of housing districts; authorizing or modifying the authority of tax increment financing districts in Detroit Lakes, Duluth, Monticello, New Hope, Richfield, Roseville, and St. Michael; extending sunset date for a tax levy in the city of Moorhead; authorizing the creation of and modifying the authority of local districts and economic development authorities; granting bonding authority to the state agricultural society and other political subdivisions; allowing bonding for computer systems and other purposes; authorizing cities to establish a program

Journal of the House - 59th Day - Monday, May 19, 2003 - Top of Page 4000

for issuance of capital improvement bonds; limiting challenges to tax increment financing actions; establishing the corporate status of an entity; updating to federal provisions; modifying payment, penalty, interest, and enforcement provisions; distributing payments to counties; changing requirements for purchases of recycled materials; regulating tax preparers; making technical changes; imposing penalties; amending Minnesota Statutes 2002, sections 16B.121; 115B.24, subdivision 8; 168.012, subdivision 1; 168A.03; 216B.2424, subdivision 5; 270.06; 270.10, subdivision 1a; 270.60, subdivision 4; 270.69, by adding a subdivision; 270.701, subdivision 2, by adding a subdivision; 270.72, subdivision 2; 270A.03, subdivision 2; 270B.12, by adding a subdivision; 272.02, subdivisions 26, 31, 47, 53, by adding subdivisions; 272.12; 273.01; 273.05, subdivision 1; 273.061, by adding subdivisions; 273.08; 273.11, subdivision 1a, by adding subdivisions; 273.124, subdivision 1; 273.13, subdivisions 22, 25; 273.1315; 273.1398, subdivisions 4b, 4d; 273.372; 273.42, subdivision 2; 274.01, subdivision 1; 274.13, subdivision 1; 275.025, subdivisions 1, 3, 4; 275.065, subdivisions 1, 1a, 3; 276.04, subdivision 2; 276.10; 276.11, subdivision 1; 277.20, subdivision 2; 278.03, subdivision 1; 278.05, subdivision 6; 279.01, subdivision 1, by adding a subdivision; 279.06, subdivision 1; 281.17; 282.01, subdivisions 1b, 7a; 282.08; 287.12; 287.29, subdivision 1; 287.31, by adding a subdivision; 289A.02, subdivision 7; 289A.10, subdivision 1; 289A.19, subdivision 4; 289A.31, subdivisions 3, 4, by adding a subdivision; 289A.36, subdivision 7, by adding subdivisions; 289A.50, subdivision 2a; 289A.56, subdivision 3; 289A.60, subdivision 7, by adding a subdivision; 290.01, subdivisions 19, 19b, 19d, 31; 290.05, subdivision 1; 290.06, subdivision 2c; 290.0671, subdivision 1; 290.0675, subdivisions 2, 3; 290.0679, subdivision 2; 290.0802, subdivision 1; 290.17, subdivision 4; 290.191, subdivision 1; 290A.03, subdivisions 8, 15; 290C.02, subdivisions 3, 7; 290C.03; 290C.07; 290C.09; 290C.10; 290C.11; 291.005, subdivision 1; 291.03, subdivision 1; 295.50, subdivision 9b; 295.53, subdivision 1; 297A.61, subdivisions 3, 12, 34, by adding subdivisions; 297A.62, subdivision 3; 297A.665; 297A.67, subdivisions 2, 18, by adding subdivisions; 297A.68, subdivisions 4, 5, 36, by adding a subdivision; 297A.69, subdivisions 2, 3, 4; 297A.70, subdivisions 8, 16; 297A.71, subdivision 10, by adding subdivisions; 297A.85; 297B.025, subdivisions 1, 2; 297B.03; 297B.035, subdivision 1, by adding a subdivision; 297F.01, subdivisions 21a, 23; 297F.06, subdivision 4; 297F.08, by adding a subdivision; 297F.20, subdivisions 1, 2, 3, 6, 9; 297G.01, by adding a subdivision; 297G.03, subdivision 1; 297I.01, subdivision 9; 297I.20; 298.001, by adding a subdivision; 298.01, subdivisions 3, 3a; 298.015; 298.016, subdivisions 1, 2, 4; 298.018; 352.15, subdivision 1; 353.15, subdivision 1; 354.10, subdivision 1; 354B.30; 354C.165; 373.01, subdivision 3; 373.45, subdivision 1; 373.47, subdivision 1; 376.009; 376.55, subdivision 3, by adding a subdivision; 376.56, subdivision 3; 383B.77, subdivisions 1, 2; 410.32; 412.301; 469.169, by adding a subdivision; 469.1731, subdivision 3; 469.174, subdivision 10, by adding subdivisions; 469.175, subdivision 3, by adding a subdivision; 469.176, subdivision 7; 469.1761, by adding a subdivision; 469.1763, subdivision 2; 469.177, subdivision 1; 469.1792; 473.39, by adding a subdivision; 473F.07, subdivision 4; 473F.08, by adding a subdivision; 475.58, subdivision 3b; 477A.011, subdivision 30; 515B.1-116; Laws 1967, chapter 558, section 1, subdivision 5, as amended; Laws 1980, chapter 511, section 1, subdivision 2, as amended; Laws 1980, chapter 511, section 2, as amended; Laws 1989, chapter 211, section 8, subdivision 2, as amended; Laws 1989, chapter 211, section 8, subdivision 4, as amended; Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended; Laws 1991, chapter 291, article 8, section 27, subdivision 4; Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended; Laws 1996, chapter 471, article 2, section 29; Laws 1998, chapter 389, article 8, section 43, subdivision 3; Laws 1998, chapter 389, article 8, section 43, subdivision 4; Laws 1999, chapter 243, article 4, section 18, subdivision 1; Laws 1999, chapter 243, article 4, section 18, subdivision 3; Laws 1999, chapter 243, article 4, section 18, subdivision 4; Laws 1999, chapter 243, article 4, section 19, as amended; Laws 2001, First Special Session chapter 5, article 3, section 61, the effective date; Laws 2001 First Special Session chapter 5, article 3, section 63, the effective date; Laws 2001, First Special Session chapter 5, article 3, section 96; Laws 2001, First Special Session chapter 5, article 9, section 12, the effective date; Laws 2001, First Special Session chapter 5, article 12, section 67, the effective date; Laws 2002, chapter 377, article 3, section 15, the effective date; Laws 2002 chapter 377, article 6, section 4, the effective date; Laws 2002, chapter 377, article 11, section 1; proposing coding for new law in Minnesota Statutes, chapters 37; 270; 273; 275; 276; 290C; 298; 410; repealing Minnesota Statutes 2002, sections 270.691, subdivision 8; 274.04; 290.0671, subdivision 3; 290.0675, subdivision 5; 294.01; 294.02; 294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 294.12; 297A.72, subdivision 1; 297A.97; 298.01, subdivisions 3c, 3d; 298.017; 477A.065; Laws 1984,

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chapter 652, section 2; Laws 2002, chapter 377, article 9, section 12, the effective date; Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 8009.7200; 8009.7300; 8009.7400; 8092.1000; 8106.0100, subparts 11, 15, 16; 8106.0200; 8125.1000; 8125.1300, subpart 1; 8125.1400; 8130.0800, subparts 5, 12; 8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3, 4; 8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; 8130.8300.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 110 yeas and 19 nays as follows:

Those who voted in the affirmative were:

The bill was repassed, as amended by the Senate, and its title agreed to.

CALENDAR FOR THE DAY

S. F. No. 905 was reported to the House.

Swenson moved that the name of Ozment be added as chief author and that his name be shown as second author on H. F. No. 967, the companion to S. F. No. 905. The motion prevailed.

Ozment moved to amend S. F. No. 905 as follows:

Delete everything after the enacting clause and insert:

"ARTICLE 1

ENVIRONMENT AND NATURAL RESOURCES

Section 1. [ENVIRONMENT AND NATURAL RESOURCES APPROPRIATIONS.]

The sums shown in the columns marked "APPROPRIATIONS" are appropriated from the general fund, or another named fund, to the agencies and for the purposes specified in this act, to be available for the fiscal years indicated for each purpose. The figures "2004" and "2005," where used in this act, mean that the appropriation or appropriations listed under them are available for the year ending June 30, 2004, or June 30, 2005, respectively. The term "the first year" means the year ending June 30, 2004, and the term "the second year" means the year ending June 30, 2005.

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SUMMARY BY FUND

2004 2005 TOTAL

General $141,347,000 $141,116,000 $282,463,000

State Government Special Revenue 48,000 48,000 96,000

Environmental 38,806,000 38,806,000 77,612,000

Natural Resources 52,501,000 50,161,000 102,662,000

Game and Fish 82,350,000 82,292,000 164,642,000

Remediation 11,504,000 11,504,000 23,008,000

Land and Water

Conservation Account 2,000,000 -0- 2,000,000

Great Lakes Protection Account 56,000 -0- 56,000

Environment and Natural Resources Trust

Fund 15,050,000 15,050,000 30,100,000

Oil Overcharge 519,000 -0- 519,000

Total 344,181,000 338,977,000 683,158,000

APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Sec. 2. POLLUTION CONTROL AGENCY

Subdivision 1. Total Appropriation $52,979,000 $52,979,000

Summary by Fund

General 14,715,000 14,715,000

State Government

Special Revenue 48,000 48,000

Environmental 26,812,000 26,812,000

Remediation 11,404,000 11,404,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 2. Water 19,456,000 19,456,000

Summary by Fund

General 10,467,000 10,467,000

State Government

Special Revenue 48,000 48,000

Environmental 8,941,000 8,941,000

$2,348,000 the first year and $2,348,000 the second year are for the clean water partnership program. Any balance remaining in the first year does not cancel and is available for the second year of the biennium.

$2,324,000 the first year and $2,324,000 the second year are for grants for county administration of the feedlot permit program. Grants must be matched with a combination of local cash and/or in-kind contributions. Counties receiving these grants shall submit an annual report to the pollution control agency regarding activities conducted under the grant, expenditures made, and local match contributions. Funding shall be given to counties that have requested and received delegation from the pollution control agency for processing of animal feedlot permit applications under Minnesota Statutes, section 116.07, subdivision 7. The first year, delegated counties shall be eligible to receive an amount of either:

(1) $50 multiplied by the number of feedlots with greater than ten animal units as reported by the county in their annual report for registration data developed in accordance to Minnesota Rules, part 7020.0350, or Minnesota Statutes, section 116.072; or

(2) $80 multiplied by the number of feedlots with greater than ten animal units as reported by the county in their annual report and determined by a level 2 or level 3 feedlot inventory conducted in accordance with the "Feedlot Inventory Guidebook" published by the board of water and soil resources, dated June 1991.

The second year, delegated counties shall be eligible to receive an amount of either:

(1) $50 multiplied by the number of feedlots with greater than ten animal units as reported to the agency under the terms of aggregate reporting as defined in Minnesota Statutes, section 116.0712; or

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

(2) $80 multiplied by the number of feedlots with greater than ten animal units based on the agency's statewide database for registration in accordance with Minnesota Rules, part 7020.0350. By June 30, 2004, the agency, in consultation with delegated counties, shall develop a new funding formula incorporating the following criteria at a minimum:

(i) fee multiplier per feedlot as defined by the state registration program (greater than 50 animal units in nonshoreland areas, and ten to 50 animal units in shoreland areas);

(ii) use of the state database for determination of the feedlots in item (i); and

(iii) incentive-based payments for counties exceeding minimum program requirements based on program priorities.

To be eligible for a grant, a county must be delegated by December 31 of the year prior to the year in which awards are distributed. At a minimum, delegated counties are eligible to receive a grant of $7,500 per year. To receive the award, the county must receive approval by the pollution control agency of the county feedlot work plan and annual county feedlot officer report. Feedlots that have been inactive for five or more years may not be counted in determining the amount of the grant.

Any money remaining after the first year is available for the second year. Any money remaining in either year is available for distribution to all counties on a competitive basis through the challenge grant process for the development of delegated county feedlot programs or to enhance existing delegated county feedlot programs, information and education, or technical assistance efforts to reduce feedlot-related pollution hazards.

$335,000 the first year and $335,000 the second year are for community technical assistance and education, including grants and technical assistance to communities for local and basinwide water quality protection.

$405,000 the first year and $405,000 the second year are for individual sewage treatment system (ISTS) administration and/or grants. Of this amount, $86,000 in each year is for assistance to local units of government through competitive grant programs for ISTS program development. Any unexpended balance in the first year does not cancel but is available in the second year.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$480,000 the first year and $480,000 the second year are from the environmental fund to address the need for increased activity in the areas of new technology review, technical assistance for local governments, and enforcement under Minnesota Statutes, sections 115.55 to 115.58, and to complete the requirements of sections 164 and 165. Of this amount, $48,000 each year is for administration of individual septic tank fees, as provided in section 124.

By February 1, 2004, the commissioner shall report to the environment and natural resources finance committees of the house and senate on the status of discussions with stakeholders on strategies to implement the impaired waters program and any specific recommendations on funding options to address the needs documented in the agency's report to the legislature, "Minnesota's Impaired Waters," dated March 2003.

Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract on or before June 30, 2005, for clean water partnership, ISTS, Minnesota River, and local and basinwide water quality protection grants in this subdivision are available until June 30, 2007.

Subd. 3. Air 8,770,000 8,765,000

Summary by Fund

Environmental 8,770,000 8,765,000

Up to $150,000 the first year and $150,000 the second year may be transferred to the environmental fund for the small business environmental improvement loan program established in Minnesota Statutes, section 116.993.

$200,000 the first year and $200,000 the second year are from the environmental fund for a monitoring program under Minnesota Statutes, section 116.454.

$125,000 the first year and $125,000 the second year are from the environmental fund for monitoring ambient air for hazardous pollutants in the metropolitan area.

Subd. 4. Land 18,469,000 18,469,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Summary by Fund

Environmental 7,065,000 7,065,000

Remediation 11,404,000 11,404,000

All money for environmental response, compensation, and compliance in the remediation fund not otherwise appropriated is appropriated to the commissioners of the pollution control agency and the department of agriculture for purposes of Minnesota Statutes, section 115B.20, subdivision 2, clauses (1), (2), (3), (6), and (7). At the beginning of each fiscal year, the two commissioners shall jointly submit an annual spending plan to the commissioner of finance that maximizes the utilization of resources and appropriately allocates the money between the two agencies. This appropriation is available until June 30, 2005.

$574,000 the first year and $574,000 the second year are from the petroleum tank fund to be transferred to the remediation fund for purposes of the leaking underground storage tank program to protect the land.

$200,000 the first year and $200,000 the second year are from the remediation fund to be transferred to the department of health for private water supply monitoring and health assessment costs in areas contaminated by unpermitted mixed municipal solid waste disposal facilities.

Subd. 5. Multimedia

4,301,000 4,306,000

Summary by Fund

General 2,265,000 2,265,000

Environmental 2,036,000 2,041,000

Subd. 6. Administrative Support

1,983,000 1,983,000

Sec. 3. OFFICE OF ENVIRONMENTAL ASSISTANCE 23,754,000 23,754,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Summary by Fund

General 11,760,000 11,760,000

Environmental 11,994,000 11,994,000

$12,500,000 each year is for SCORE block grants to counties. Of that amount, $7,060,000 is from the general fund and $5,440,000 is from the environmental fund.

Any unencumbered grant and loan balances in the first year do not cancel but are available for grants and loans in the second year.

All money deposited in the environmental fund for the metropolitan solid waste landfill fee in accordance with Minnesota Statutes, section 473.843, and not otherwise appropriated, is appropriated to the office of environmental assistance for the purposes of Minnesota Statutes, section 473.844.

$119,000 the first year and $119,000 the second year are for environmental assistance grants or loans under Minnesota Statutes, section 115A.0716.

Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract on or before June 30, 2005, for environmental assistance grants awarded under Minnesota Statutes, section 115A.0716, and for technical and research assistance under Minnesota Statutes, section 115A.152, technical assistance under Minnesota Statutes, section 115A.52, and pollution prevention assistance under Minnesota Statutes, section 115D.04, are available until June 30, 2006.

$4,000,000 each year is from the environmental fund for mixed municipal solid waste processing payments under Minnesota Statutes, section 115A.545.

The office of environmental assistance shall, in consultation with stakeholders, develop and report to the legislative finance and policy committees with jurisdiction over the environment on an incentive-based distribution approach for SCORE funding to replace the allocation formula in Minnesota Statutes, section 115A.557, subdivision 2. The office must submit preliminary recommendations by January 15, 2004, and final recommendations by January 15, 2005.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Sec. 4. ZOOLOGICAL BOARD 6,681,000 6,681,000

Summary by Fund

General 6,557,000 6,557,000

Natural Resources 124,000 124,000

$124,000 the first year and $124,000 the second year are from the natural resources fund from the revenue deposited under Minnesota Statutes, section 297A.94, paragraph (e), clause (5). This is a onetime appropriation.

Sec. 5. NATURAL RESOURCES

Subdivision 1. Total Appropriation 226,120,000 223,492,000

Summary by Fund

General 91,783,000 91,553,000

Natural Resources 51,887,000 49,547,000

Game and Fish 82,350,000 82,292,000

Remediation 100,000 100,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Land and Mineral Resources Management

7,494,000 7,494,000

Summary by Fund

General 6,451,000 6,451,000

Natural Resources 156,000 156,000

Game and Fish 887,000 887,000

$275,000 the first year and $275,000 the second year are for iron ore cooperative research, of which $137,500 the first year and $137,500 the second year are available only as matched by $1 of

Journal of the House - 59th Day - Monday, May 19, 2003 - Top of Page 4094

APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

nonstate money for each $1 of state money. The match may be cash or in-kind. Any unencumbered balance remaining in the first year does not cancel but is available for the second year.

$172,000 the first year and $172,000 the second year are for mineral diversification.

$86,000 the first year and $86,000 the second year are for minerals cooperative environmental research, of which $43,000 the first year and $43,000 the second year are available only as matched by $1 of nonstate money for each $1 of state money. The match may be cash or in-kind. Any unencumbered balance remaining in the first year does not cancel but is available for the second year.

Subd. 3. Water Resources Management

11,446,000 10,736,000

Summary by Fund

General 11,186,000 10,456,000

Natural Resources 280,000 280,000

$108,000 the first year is for a grant to the Lewis and Clark joint powers board to acquire land for, and to predesign, design, construct, furnish, and equip a rural water system to serve southwestern Minnesota, and to pay additional project development costs that are approved for federal cost-share payment by the United States Bureau of Reclamation, and is available until spent. This appropriation is available when matched by $8 of federal money and $1 of local money for each $1 of state money.

$210,000 the first year and $210,000 the second year are for grants associated with the implementation of the Red River mediation agreement.

$50,000 the first year is for analysis of groundwater flows and aquifer recharge in the state in order to understand whether the appropriation of groundwater is sustainable.

$625,000 the first year is a onetime appropriation from the general fund for grants to local units of government in the area included in DR-1419 for the state share of flood hazard mitigation grants for

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

flood damage reduction studies, planning, engineering, and publicly owned capital improvements to prevent or alleviate flood damage under Minnesota Statutes, section 103F.161. This appropriation is available until expended.

$65,000 the first year and $65,000 the second year are for a grant to the Mississippi headwaters board for up to 50 percent of the cost of implementing the comprehensive plan for the upper Mississippi within areas under its jurisdiction.

$5,000 the first year and $5,000 the second year are for payment to the Leech Lake Band of Chippewa Indians to implement its portion of the comprehensive plan for the upper Mississippi.

$125,000 the first year and $125,000 the second year are for the construction of ring dikes under Minnesota Statutes, section 103F.161. The ring dikes may be publicly or privately owned. Any unencumbered balance does not cancel at the end of the first year and is available for the second year.

Subd. 4. Forest Management

33,066,000 33,066,000

Summary by Fund

General 32,824,000 32,824,000

Game and Fish 242,000 242,000

$7,650,000 the first year and $7,650,000 the second year are for prevention, presuppression, and suppression costs of emergency firefighting and other costs incurred under Minnesota Statutes, section 88.12. If the appropriation for either year is insufficient to cover all costs of presuppression and suppression, the amount necessary to pay for these costs during the biennium is appropriated from the general fund. By November 15 of each year, the commissioner of natural resources shall submit a report to the chairs of the house of representatives ways and means committee, the senate finance committee, the environment and agriculture budget division of the senate finance committee, and the house of representatives environment and natural resources finance committee, identifying all firefighting costs incurred and reimbursements received in the prior fiscal year. The report must be in a format agreed to by the house environment finance

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

committee chair, the senate environment budget division chair, the department, and the department of finance. These appropriations may not be transferred. Any reimbursement of firefighting expenditures made to the commissioner from any source other than federal mobilizations shall be deposited into the general fund.

$730,000 the first year and $730,000 the second year are for the forest resources council for implementation of the Sustainable Forest Resources Act.

$350,000 the first year and $350,000 the second year are for the FORIST timber management information system and for increased forestry management.

$242,000 the first year and $242,000 the second year are from the game and fish fund to implement ecological classification systems (ECS) standards on forested landscapes. This is a onetime appropriation from revenue deposited to the game and fish fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (1).

Subd. 5. Parks and Recreation Management

36,736,000 36,736,000

Summary by Fund

General 19,511,000 19,511,000

Natural Resources 17,225,000 17,225,000

$640,000 the first year and $640,000 the second year are from the water recreation account in the natural resources fund for state park development projects.

$3,300,000 the first year and $3,300,000 the second year are for a grant to the metropolitan council for metropolitan area regional parks maintenance and operations.

$3,462,000 the first year and $3,462,000 the second year are from the natural resources fund for state park and recreation area operations. This appropriation is from the revenue deposited to the natural resources fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (2).

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$4,152,000 the first year and $4,152,000 the second year are from the natural resources fund for a grant to the metropolitan council for metropolitan area regional parks and trails maintenance and operations. This appropriation is from the revenue deposited to the natural resources fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (3).

$8,971,000 the first year and $8,971,000 the second year are from the state parks account in the natural resources fund for state park and recreation area operations.

$25,000 the first year and $25,000 the second year are for a grant to the city of Taylors Falls for fire and rescue operations in support of Interstate state park.

Subd. 6. Trails and Waterways Management

24,060,000 21,173,000

Summary by Fund

General 1,234,000 1,234,000

Natural Resources 20,655,000 18,255,000

Game and Fish 2,171,000 1,684,000

$5,724,000 the first year and $5,724,000 the second year are from the snowmobile trails and enforcement account in the natural resources fund for snowmobile grants-in-aid.

$261,000 the first year and $261,000 the second year are from the water recreation account in the natural resources fund for a safe harbor program on Lake Superior.

$690,000 the first year and $690,000 the second year are from the natural resources fund for state trail operations. This appropriation is from the revenue deposited to the natural resources fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (2). This is a onetime appropriation.

$553,000 the first year and $553,000 the second year are from the natural resources fund for trail grants to local units of government on land to be maintained for at least 20 years for the purposes of the grant. This appropriation is from the revenue deposited to the natural resources fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (4). This is a onetime appropriation.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

The appropriation in Laws 2001, First Special Session chapter 2, section 5, subdivision 6, from the water recreation account in the natural resources fund for preconstruction, acquisition, and staffing needs for the Mississippi Whitewater trail authorized by Minnesota Statutes, section 85.0156, is available until June 30, 2005.

Upon a showing of need, the commissioner of natural resources may use up to 50 percent of a snowmobile maintenance and grooming grant under Minnesota Statutes, section 84.83, that was available as of December 31, 2002, to reimburse the intended recipient for expenses incurred in the purchase or lease of snowmobile trail grooming equipment to be used for grant-in-aid trails. The costs must be incurred between July 1, 2002, and June 30, 2003, and recipients must provide acceptable documentation of the costs to the commissioner. All applications for reimbursement under this section must be received no later than September 1, 2003.

$1,000,000 the first year and $600,000 the second year are from the natural resources fund for off-highway vehicle trail designation, development, maintenance, and repair. Of this amount, $600,000 the first year and $360,000 the second year are from the all-terrain vehicle account, $50,000 the first year and $30,000 the second year are from the off-highway motorcycle account, and $350,000 the first year and $210,000 the second year are from the off-road vehicle account.

$1,000,000 the first year is from the natural resources fund for the Iron Range off-highway vehicle recreation area. Of this amount, $600,000 is from the all-terrain vehicle account, $350,000 is from the off-road vehicle account, and $50,000 is from the off-highway motorcycle account. This appropriation is available until expended.

By August 1, 2003, the commissioner of finance shall transfer $475,000 from the all-terrain vehicle account, $20,000 from the off-highway motorcycle account, and $5,000 from the off-road vehicle account to the off-highway vehicle damage account in Minnesota Statutes, section 84.780.

$300,000 is from the snowmobile trails and enforcement account in the natural resources fund to acquire permanent easements for a snowmobile trail to connect the Willard Munger State Trail in Hermantown to the North Shore State Trail in Duluth. This is a onetime appropriation and is available until expended.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$700,000 the first year is from the water recreation account in the natural resources fund for a cooperative project with the U.S. Army Corps of Engineers to develop the Mississippi Whitewater Park. Of this amount, $525,000 is available to provide a match for $975,000 of federal funds, in a ratio of 65 percent federal to 35 percent state, for construction design development. $175,000 is available for use by the department for project management, including costs for the project review team, real estate acquisition, staff coordination of the project, and legal services.

Subd. 7. Fish Management

28,979,000 29,010,000

Summary by Fund

General 455,000 455,000

Natural Resources 197,000 197,000

Game and Fish 28,327,000 28,358,000

$402,000 the first year and $402,000 the second year are for resource population surveys in the 1837 treaty area. Of this amount, $260,000 the first year and $260,000 the second year are from the game and fish fund.

$177,000 the first year and $177,000 the second year are for the reinvest in Minnesota programs of game and fish, critical habitat, and wetlands established under Minnesota Statutes, section 84.95, subdivision 2.

$1,030,000 the first year and $1,030,000 the second year are from the trout and salmon management account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 3.

$136,000 the first year and $136,000 the second year are available for aquatic plant restoration.

$3,998,000 the first year and $3,998,000 the second year are from the heritage enhancement account in the game and fish fund for only the purposes specified in Minnesota Statutes, section 297A.94, paragraph (e), clause (1). This appropriation is from the revenue deposited to the game and fish fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (1).

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract on or before June 30, 2005, for aquatic restoration grants in this subdivision are available until June 30, 2006.

Subd. 8. Wildlife Management

23,865,000 24,180,000

Summary by Fund

General 1,416,000 1,416,000

Game and Fish 22,449,000 22,764,000

$565,000 the first year and $565,000 the second year are for the reinvest in Minnesota programs of game and fish, critical habitat, and wetlands established under Minnesota Statutes, section 84.95, subdivision 2.

$1,830,000 the first year and $2,030,000 the second year are from the wildlife acquisition surcharge account for only the purposes specified in Minnesota Statutes, section 97A.071, subdivision 2a.

$1,269,000 the first year and $1,269,000 the second year are from the deer habitat improvement account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 1, paragraph (b).

$148,000 the first year and $148,000 the second year are from the deer and bear management account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 1, paragraph (c).

$808,000 the first year and $808,000 the second year are from the waterfowl habitat improvement account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 2.

$546,000 the first year and $546,000 the second year are from the pheasant habitat improvement account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 4.

$120,000 the first year and $120,000 the second year are from the wild turkey management account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 5. Of this

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

amount, $8,000 the first year and $8,000 the second year are appropriated from the game and fish fund for transfer to the wild turkey management account for purposes specified in Minnesota Statutes, section 97A.075, subdivision 5.

$2,560,000 the first year and $2,560,000 the second year are from the heritage enhancement account in the game and fish fund for only the purposes specified in Minnesota Statutes, section 297A.94, paragraph (e), clause (1). If chronic wasting disease (CWD) is found in the wild deer herd, these appropriations may be used for wildlife health management costs related to fighting the spread of CWD. This appropriation is from the revenue deposited to the game and fish fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (1).

$13,000 the first year and $13,000 the second year are to publicize the critical habitat license plate match program.

Notwithstanding Minnesota Statutes, section 297A.94, this appropriation may be used for hunter recruitment and retention and public land user facilities.

Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract on or before June 30, 2005, for wildlife habitat grants in this subdivision are available until June 30, 2006.

Subd. 9. Ecological Services

8,677,000 8,745,000

Summary by Fund

General 3,085,000 3,085,000

Natural Resources 2,572,000 2,632,000

Game and Fish 3,020,000 3,028,000

$1,028,000 the first year and $1,028,000 the second year are from the nongame wildlife management account in the natural resources fund for the purpose of nongame wildlife management.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$224,000 the first year and $224,000 the second year are for population and habitat objectives of the nongame wildlife management program.

$477,000 the first year and $477,000 the second year are for the reinvest in Minnesota programs of game and fish, critical habitat, and wetlands established under Minnesota Statutes, section 84.95, subdivision 2.

$1,263,000 the first year and $1,263,000 the second year are from the heritage enhancement account in the game and fish fund for only the purposes specified in Minnesota Statutes, section 297A.94, paragraph (e), clause (1). This appropriation is from the revenue deposited to the game and fish fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (1).

Subd. 10. Enforcement

27,543,000 28,111,000

Summary by Fund

General 3,487,000 3,987,000

Natural Resources 6,786,000 6,786,000

Game and Fish 17,170,000 17,238,000

Remediation 100,000 100,000

$1,082,000 the first year and $1,082,000 the second year are from the water recreation account in the natural resources fund for grants to counties for boat and water safety.

$100,000 the first year and $100,000 the second year are from the remediation fund for solid waste enforcement activities under Minnesota Statutes, section 116.073.

$315,000 the first year and $315,000 the second year are from the snowmobile trails and enforcement account in the natural resources fund for grants to local law enforcement agencies for snowmobile enforcement activities.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$1,164,000 the first year and $1,164,000 the second year are from the heritage enhancement account in the game and fish fund for only the purposes specified in Minnesota Statutes, section 297A.94, paragraph (e), clause (1). This appropriation is from the revenue deposited to the game and fish fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (1).

Overtime shall be distributed to conservation officers at historical levels; however, a reasonable reduction or addition may be made to the officer's allocation, if justified, based on an individual officer's workload. If funding for enforcement is reduced because of an unallotment, the overtime bank may be reduced in proportion to reductions made in other areas of the budget.

$700,000 the first year and $700,000 the second year are from the natural resources fund for off-highway vehicle enforcement. Of this amount, $665,000 the first year and $665,000 the second year are from the all-terrain vehicle account, $28,000 the first year and $28,000 the second year are from the off-highway motorcycle account, and $7,000 the first year and $7,000 the second year are from the off-road vehicle account.

$130,000 the first year and $130,000 the second year are from the all-terrain vehicle account in the natural resources fund for administration of the all-terrain vehicle environmental and safety education and training program under Minnesota Statutes, section 84.925.

$225,000 the first year and $225,000 the second year are from the natural resources fund for grants to county law enforcement agencies for off-highway vehicle enforcement and public education activities based on off-highway vehicle use in the county. Of this amount, $213,000 each year is from the all-terrain vehicle account; $11,000 each year is from the off-highway motorcycle account; and $1,000 each year is from the off-road vehicle account. The county enforcement agencies may use money received under this appropriation to make grants to other local enforcement agencies within the county that have a high concentration of off-highway vehicle use. Of this appropriation, $25,000 each year is for administration of these grants.

Subd. 11. Operations Support

24,234,000 24,241,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Summary by Fund

General 12,134,000 12,134,000

Natural Resources 4,016,000 4,016,000

Game and Fish 8,084,000 8,091,000

$189,000 the first year and $189,000 the second year are for technical assistance and grants to assist local government units and organizations in the metropolitan area to acquire and develop natural areas and greenways.

$375,000 the first year and $375,000 the second year are for the community assistance program to provide for technical assistance and regional resource enhancement grants.

$246,000 the first year and $246,000 the second year are from the natural resources fund for grants to be divided equally between the city of St. Paul for the Como Zoo and Conservatory and the city of Duluth Zoo. This appropriation is from the revenue deposited to the natural resources fund under Minnesota Statutes, section 297A.94, paragraph (e), clause (5). This is a onetime appropriation.

The commissioner may allow payments to be made by credit or debit cards, at the customer's discretion, with a charge of a reasonable fee. Money received from the fees is appropriated to the commissioner to cover the costs of processing payments from credit and debit cards.

Any unencumbered balance for state project reimbursements received in fiscal year 2003 from the federal Land and Water Conservation Fund Act and deposited in the state land and water conservation account in the future resources fund shall be transferred to the account in the natural resources fund. This provision is effective the day following final enactment.

Sec. 6. MINNESOTA CONSERVATION CORPS 840,000 840,000

Summary by Fund

General 350,000 350,000

Natural Resources 490,000 490,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Sec. 7. BOARD OF WATER AND SOIL RESOURCES 15,432,000 15,431,000

$4,102,000 the first year and $4,102,000 the second year are for natural resources block grants to local governments.

The board may reduce the amount of the natural resources block grant to a county by an amount equal to any reduction in the county's general services allocation to a soil and water conservation district from the county's previous year allocation when the board determines that the reduction was disproportionate.

Grants must be matched with a combination of local cash or in-kind contributions. The base grant portion related to water planning must be matched by an amount that would be raised by a levy under Minnesota Statutes, section 103B.3369.

$3,566,000 the first year and $3,566,000 the second year are for grants to soil and water conservation districts for general purposes, nonpoint engineering, and implementation of the Reinvest in Minnesota conservation reserve program. Upon approval of the board, expenditures may be made from these appropriations for supplies and services benefiting soil and water conservation districts.

$3,285,000 the first year and $3,285,000 the second year are for grants to soil and water conservation districts for cost-sharing contracts for erosion control and water quality management. Of this amount, at least $1,500,000 the first year and $1,500,000 the second year are for grants for cost-sharing contracts for water quality management on feedlots.

Any unencumbered balance in the board's program of grants does not cancel at the end of the first year and is available for the second year for the same grant program. This appropriation is available until expended. If the appropriation in either year is insufficient, the appropriation in the other year is available for it.

$105,000 the first year and $105,000 the second year are for grants to watershed districts and other local units of government in the southern Minnesota River basin study area 2 for floodplain management. If the appropriation in either year is insufficient, the appropriation in the other year is available for it.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$100,000 the first year and $100,000 the second year are for a grant to the Red River basin commission to develop a Red River basin plan and to coordinate water management activities in the states and provinces bordering the Red River. The unencumbered balance in the first year does not cancel but is available for the second year.

Sec. 8. SCIENCE MUSEUM OF MINNESOTA 750,000 750,000

Sec. 9. MINNESOTA RESOURCES

Subdivision 1. Total Appropriation 17,625,000 15,050,000

Summary by Fund

State Land and Water

Conservation Account

(LAWCON) 2,000,000 -0-

Environment and Natural

Resources Trust

Fund 15,050,000 15,050,000

Oil Overcharge Money in the

Special Revenue

Fund 519,000 -0-

Great Lakes Protection

Account 56,000 -0-

Appropriations from the oil overcharge money in the special revenue fund and Great Lakes protection account are available for either year of the biennium.

For appropriations from the environment and natural resources trust fund, any unencumbered balance remaining in the first year does not cancel and is available for the second year of the biennium.

Unless otherwise provided, the amounts in this section are available until June 30, 2005, when projects must be completed and final products delivered.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 2. Definitions

(a) "State Land and Water Conservation Account (LAWCON)" means the state land and water conservation account in the natural resources fund.

(b) "Great Lakes protection account" means the Great Lakes protection account referred to in Minnesota Statutes, section 116Q.02, subdivision 1.

(c) "Trust fund" means the Minnesota environment and natural resources trust fund referred to in Minnesota Statutes, section 116P.02, subdivision 6.

(d) "Oil overcharge money" means the money referred to in Minnesota Statutes, section 4.071, subdivision 2.

Subd. 3. Administration 412,000 406,000

Summary by Fund

Trust Fund 412,000 406,000

(a) Legislative Commission on Minnesota Resources

$326,000 the first year and $346,000 the second year are from the trust fund for administration as provided in Minnesota Statutes, section 116P.09, subdivision 5.

(b) LCMR Study Commission on Park Systems

$26,000 the first year is from the trust fund to the legislative commission on Minnesota resources to evaluate the use of fees to assist the financial stability and the potential of fees to provide for self-sufficiency in Minnesota's park systems, including state parks metropolitan regional parks, and rural regional parks in greater Minnesota. The study commission will report to the chairs of the senate and house environment finance committees by February 16, 2004.

$60,000 the first year and $60,000 the second year are from the trust fund to the commissioner of natural resources for contract administration activities assigned to the commissioner in this section. This appropriation is available until June 30, 2006.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 4. Advisory Committee 23,000 22,000

$23,000 the first year and $22,000 the second year are from the trust fund to the legislative commission on Minnesota resources for expenses of the citizen advisory committee as provided in Minnesota Statutes, section 116P.06.

Subd. 5. Fish and Wildlife Habitat 6,223,000 6,223,000

Summary by Fund

Trust Fund 6,223,000 6,223,000

(a) Restoring Minnesota's Fish and Wildlife Habitat Corridors - Phase II

$2,425,000 the first year and $2,425,000 the second year are from the trust fund to the commissioner of natural resources for the second biennium for acceleration of agency programs and cooperative agreements with Minnesota Deer Hunters Association, Ducks Unlimited, Inc., National Wild Turkey Federation, Pheasants Forever, the Nature Conservancy, Minnesota Land Trust, the Trust for Public Land, Minnesota Valley National Wildlife Refuge Trust, Inc., U.S. Fish and Wildlife Service, U.S. Bureau of Indian Affairs, Red Lake Band of Chippewa, Leech Lake Band of Chippewa, Fond du Lac Band of Chippewa, USDA-Natural Resources Conservation Service, and the board of water and soil resources to plan, restore, and acquire fragmented landscape corridors that connect areas of quality habitat to sustain fish, wildlife, and plants. As part of the required work program, criteria and priorities for planned acquisition and restoration activities must be submitted to the legislative commission on Minnesota resources for review and approval before expenditure. Expenditures are limited to the 11 project areas as defined in the work program. Land acquired with this appropriation must be sufficiently improved to meet at least minimum habitat and facility management standards as determined by the commissioner of natural resources. This appropriation may not be used for the purchase of residential structures unless expressly approved in the work program. Any land acquired in fee title by the commissioner of natural resources with money from this appropriation must be designated: (1) as an outdoor recreation unit under Minnesota Statutes, section 86A.07; or (2) as provided in Minnesota Statutes, sections 89.018, subdivision 2, paragraph (a); 97A.101; 97A.125; 97C.001; and 97C.011. The commissioner may so designate any

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

lands acquired in less than fee title. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(b) Metropolitan Area Wildlife Corridors

$2,425,000 the first year and $2,425,000 the second year are from the trust fund to the commissioner of natural resources. $3,700,000 of this appropriation is for acceleration of agency programs and cooperative agreements with the Trust for Public Land, Ducks Unlimited, Inc., Friends of the Mississippi River, Great River Greening, Minnesota Land Trust, and Minnesota Valley National Wildlife Refuge Trust, Inc., for the purposes of planning, improving, and protecting important natural areas in the metropolitan region, as defined by Minnesota Statutes, section 473.121, subdivision 2, through grants, contracted services, conservation easements, and fee acquisition. $500,000 of this appropriation is for an agreement with the city of Ramsey for the Trott Brook Corridor acquisition. $800,000 of this appropriation is for an agreement with the Rice Creek Watershed District for Hardwood Creek acquisition and restoration. Land acquired with this appropriation must be sufficiently improved to meet at least minimum management standards as determined by the commissioner of natural resources. As part of the required work program, criteria and priorities for planned acquisition and restoration activities must be submitted to the legislative commission on Minnesota resources for review and approval before expenditure. Expenditures are limited to the identified project areas as defined in the work program. This appropriation may not be used for the purchase of residential structures unless expressly approved in the work program. Any land acquired in fee title by the commissioner of natural resources with money from this appropriation must be designated: (1) as an outdoor recreation unit under Minnesota Statutes, section 86A.07; or (2) as provided in Minnesota Statutes, sections 89.018, subdivision 2, paragraph (a); 97A.101; 97A.125; 97C.001; and 97C.011. The commissioner may so designate any lands acquired in less than fee title. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$200,000 the first year and $200,000 the second year are from the trust fund to the commissioner of natural resources for the RIM critical habitat matching program to acquire and enhance fish, wildlife, and native plant habitat. Land acquired with this appropriation must be sufficiently improved to meet at least minimum management standards as determined by the commissioner of natural resources. Up to $27,000 of this appropriation is for matching nongame program activities.

(d) Acquisition and Development of Scientific and Natural Areas

$240,000 the first year and $240,000 the second year are from the trust fund to the commissioner of natural resources to acquire and develop lands with natural features of state ecological or geological significance in accordance with the scientific and natural area program long-range plan. Land acquired with this appropriation must be sufficiently improved to meet at least minimum management standards as determined by the commissioner of natural resources.

(e) Forest and Prairie Stewardship of Public and Private Lands

$196,000 the first year and $196,000 the second year are from the trust fund to the commissioner of natural resources. $147,000 of this appropriation is to develop stewardship plans for private forested lands and implement stewardship plans on a cost-share basis. $245,000 of this appropriation is to develop stewardship plans on private prairie lands and implement prairie management on public and private lands. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(f) Local Initiative Grants-Conservation Partners and Environmental Partnerships

$256,000 the first year and $256,000 the second year are from the trust fund to the commissioner of natural resources for matching grants of up to $20,000 to local government and private organizations for enhancement, research, and education associated with natural habitat and environmental service projects. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

(g) Minnesota ReLeaf Community Forest Development and Protection

$257,000 the first year and $257,000 the second year are from the trust fund to the commissioner of natural resources for acceleration of the agency program and a cooperative agreement with Tree Trust to protect forest resources, develop inventory-based management plans, and provide matching grants to communities to plant native trees. At least $350,000 of this appropriation must be used for grants to communities. For the purposes of this paragraph, the match must be a nonstate contribution, but may be either cash or qualifying in-kind. This appropriation is available until June 30, 2006, at which time the project must be completed and final projects delivered, unless an earlier date is specified in the work program.

(h) Developing Pheromones for Use in Carp Control

$50,000 the first year and $50,000 the second year are from the trust fund to the University of Minnesota for research on new options for controlling carp. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(i) Biological Control of European Buckthorn and Spotted Knapweed

$99,000 the first year and $99,000 the second year are from the trust fund. Of this amount, $54,000 the first year and $55,000 the second year are to the commissioner of natural resources for research to evaluate potential insects for biological control of invasive European buckthorn species. $45,000 the first year and $44,000 the second year are to the commissioner of agriculture to assess the effectiveness of spotted knapweed biological control agents. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(j) Resources for Redevelopment of Brownfields to Greenspaces

$75,000 the first year and $75,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with Minnesota Environmental Initiatives to identify and assess redevelopment of brownfields for recreation, habitat, and natural resource reuse.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 6. Recreation 7,622,000 5,870,000

Summary by Fund

Trust Fund 5,622,000 5,870,000

State Land and

Conservation Account

(LAWCON) 2,000,000

(a) State Park and Recreation Area Land Acquisition

$750,000 the first year and $750,000 the second year are from the trust fund to the commissioner of natural resources to acquire in-holdings for state park and recreation areas. Land acquired with this appropriation must be sufficiently improved to meet at least minimum management standards as determined by the commissioner of natural resources. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(b) LAWCON Federal Reimbursements

$2,000,000 is from the state land and water conservation account (LAWCON) in the natural resources fund to the commissioner of natural resources for eligible state projects and administrative and planning activities consistent with Minnesota Statutes, section 116P.14, and the federal Land and Water Conservation Fund Act. This appropriation is contingent upon receipt of the federal obligation and remains available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

$1,290,000 the first year and $1,289,000 the second year are from the trust fund to the commissioner of natural resources for matching grants to local governments for acquisition and development of natural and scenic areas and local parks as provided in Minnesota Statutes, section 85.019, subdivisions 2 and 4a, and regional parks outside of the metropolitan area. Grants may provide up to 50 percent of the nonfederal share of the project cost, except nonmetropolitan regional park grants may provide up to 60 percent of the nonfederal share of the project cost. The

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

commission will monitor the grants for approximate balance over extended periods of time between the metropolitan area, under Minnesota Statutes, section 473.121, subdivision 2, and the nonmetropolitan area through work program oversight and periodic allocation decisions. For the purposes of this paragraph, the match must be a nonstate contribution, but may be either cash or qualifying in-kind. Recipients may receive funding for more than one project in any given grant period. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered.

(d) Metropolitan Regional Parks Acquisition, Rehabilitation, and Development

$1,670,000 the first year and $1,669,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with the metropolitan council for subgrants for the acquisition, development, and rehabilitation in the metropolitan regional park system, consistent with the metropolitan council regional recreation open space capital improvement plan. This appropriation may not be used for the purchase of residential structures. This appropriation may be used to reimburse implementing agencies for acquisition of nonresidential property as expressly approved in the work program. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program. In addition, if a project financed under this program receives a federal grant, the availability of the financing from this paragraph for that project is extended to equal the period of the federal grant.

(e) Local and Regional Trail Grant Initiative Program

$160,000 the first year and $160,000 the second year are from the trust fund to the commissioner of natural resources to provide matching grants to local units of government for the cost of acquisition, development, engineering services, and enhancement of existing and new trail facilities. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program. In addition, if a project financed under this program receives a federal grant, the availability of the financing from this paragraph for that project is extended to equal the period of the federal grant.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

(f) Gitchi-Gami State Trail

$650,000 the first year and $650,000 the second year are from the trust fund to the commissioner of natural resources, in cooperation with the Gitchi-Gami Trail Association, for the third biennium, to design and construct approximately five miles of Gitchi-Gami state trail segments. This appropriation must be matched by at least $400,000 of nonstate money. The availability of the financing from this paragraph is extended to equal the period of any federal money received.

(g) Water Recreation: Boat Access, Fishing Piers, and Shore-fishing

$450,000 the first year and $700,000 the second year are from the trust fund to the commissioner of natural resources to acquire and develop public water access sites statewide, construct shore-fishing and pier sites, and restore shorelands at public accesses. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(h) Mesabi Trail

$190,000 the first year and $190,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with St. Louis and Lake Counties Regional Rail Authority for the sixth biennium to acquire and develop segments of the Mesabi trail. If a federal grant is received, the availability of the financing from this paragraph is extended to equal the period of the federal grant.

(i) Linking Communities Design, Technology, and DNR Trail Resources

$92,000 the first year and $92,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with the University of Minnesota to provide designs for up to three state trails incorporating recreation, natural, and cultural features.

(j) Ft. Ridgley Historic Site Interpretive Trail

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$75,000 the first year and $75,000 the second year are from the trust fund to the Minnesota historical society to construct a trail through the original fort site and install interpretive markers. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(k) Development and Rehabilitation of Minnesota Shooting Ranges

$120,000 the first year and $120,000 the second year are from the trust fund to the commissioner of natural resources to provide technical assistance and matching cost-share grants to local recreational shooting and archery clubs for the purpose of developing or rehabilitating shooting and archery facilities for public use. Recipient facilities must be open to the general public at reasonable times and for a reasonable fee on a walk-in basis. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(l) Land Acquisition, Minnesota Landscape Arboretum

$175,000 the first year and $175,000 the second year are from the trust fund to the University of Minnesota for an agreement with the University of Minnesota Landscape Arboretum Foundation for the fifth biennium to acquire in-holdings within the arboretum's boundary. This appropriation must be matched by an equal amount of nonstate money. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

Subd. 7. Water Resources 1,198,000 899,000

Summary by Fund

Trust Fund 1,142,000 899,000

Great Lakes Protection

Account 56,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

(a) Local Water Planning Matching Challenge Grants

$222,000 the first year and $222,000 the second year are from the trust fund and $56,000 is from the Great Lakes protection account to the board of water and soil resources to accelerate the local water planning challenge grant program under Minnesota Statutes, sections 103B.3361 to 103B.3369, through matching grants to implement high-priority activities in comprehensive water management plans, plan development guidance, and regional resource assessments. For the purposes of this paragraph, the match must be a nonstate contribution, but may be either cash or qualifying in-kind. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

(b) Accelerating and Enhancing Surface Water Monitoring for Lakes and Streams

$370,000 the first year and $370,000 the second year are from the trust fund to the commissioner of the pollution control agency for acceleration of agency programs and cooperative agreements with the Minnesota Lakes Association, Rivers Council of Minnesota, the Minnesota Initiative Foundation, and the University of Minnesota to accelerate monitoring efforts through assessments, citizen training, and implementation grants. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

$62,000 the first year and $63,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with Washington county for groundwater monitoring, modeling, and implementation of management strategies.

(d) TAPwaters: Technical Assistance Program for Watersheds

$80,000 the first year and $80,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with the Science Museum of Minnesota to assess the St. Croix river and its tributaries to identify solutions to pollution threats. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

(e) Wastewater Phosphorus Control and Reduction Initiative

$392,000 the first year and $148,000 the second year are from the trust fund to the commissioner of the pollution control agency to study human causes of excess phosphorus and for cooperation and an agreement with the Minnesota environmental science and economic review board to assess phosphorus reduction techniques at wastewater treatment plants.

(f) Maintaining Zooplankton (Daphnia) for Water Quality: Square Lake

$16,000 the first year and $16,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with Marine On St. Croix water management organization to determine whether trout predation on Daphnia significantly affects Daphnia abundance and water quality of Square lake, Washington county. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

Subd. 8. Land Use and Natural Resource Information 691,000 691,000

Summary by Fund

Trust Fund 691,000 691,000

(a) Minnesota County Biological Survey

$450,000 the first year and $450,000 the second year are from the trust fund to the commissioner of natural resources for the ninth biennium to accelerate the survey that identifies significant natural areas and systematically collects and interprets data on the distribution and ecology of native plant communities, rare plants, and rare animals.

(b) Updating Outmoded Soil Survey

$118,000 the first year and $118,000 the second year are from the trust fund to the board of water and soil to continue updating and digitizing outmoded soil surveys in Fillmore, Goodhue, Dodge, and Wabasha counties in southeast Minnesota. Participating counties must provide a cost share as reflected in the work program. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$123,000 the first year and $123,000 the second year are from the trust fund. $58,000 the first year and $57,000 the second year of this appropriation are to the commissioner of natural resources to develop a database of hydrogeologic data across the Mesabi iron range. $65,000 the first year and $66,000 the second year are to the Minnesota geological survey at the University of Minnesota for geologic and hydrogeologic maps of the Mesabi iron range.

Subd. 9. Agriculture and Natural Resource Industries 311,000 311,000

Native Plants and Alternative Crops for Water Quality

$311,000 the first year and $311,000 the second year are from the trust fund to the board of water and soil resources for agreements with the Blue Earth river basin initiative and the University of Minnesota to accelerate the use of native plants and alternative crops through easements, demonstration, research, and education. This appropriation is available until June 30, 2006, at which time the project must be completed and final products delivered, unless an earlier date is specified in the work program.

Subd. 10. Energy 630,000 110,000

Summary by Fund

Trust Fund 111,000 110,000

Oil Overcharge 519,000 -0-

(a) Community Energy Development Program

$519,000 is from the oil overcharge money to the commissioner of administration for transfer to the commissioner of commerce to assist communities in identifying cost-effective energy projects and developing locally owned wind energy projects through local wind resource assessment and financial assistance.

(b) Advancing Utilization of Manure Methane Digester Electrical Generation

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$111,000 the first year and $110,000 the second year are from the trust fund to the commissioner of agriculture to maximize use of manure methane digesters by identifying compatible waste streams and the feasibility of microturbine and fuel cell technologies.

Subd. 11. Environmental Education 234,000 236,000

(a) Dodge Nature Center - Restoration Plan

$41,000 the first year and $42,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with Dodge Nature Center to restore up to 155 acres in Mendota Heights.

(b) Bucks and Buckthorn: Engaging Young Hunters in Restoration

$127,000 the first year and $128,000 the second year are from the trust fund to the commissioner of natural resources for agreements with Great River Greening, Minnesota Deer Hunters Association, and the St. Croix Watershed Research Station for a pilot program linking hunting and habitat restoration opportunities for youth.

$66,000 the first year and $66,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with Putting Green, Inc. to construct educational exhibits for up to nine putting green learning stations in New Ulm.

Subd. 12. Children's Environmental Health 281,000 282,000

(a) Healthy Schools: Indoor Air Quality and Asthma Management

$84,000 the first year and $84,000 the second year are from the trust fund to the commissioner of health to assist school districts with developing and implementing effective indoor air quality and asthma management plans.

(b) Economic-based Analysis of Children's Environmental Health Risks

$47,000 the first year and $48,000 the second year are from the trust fund to the commissioner of health to assess economic strategies for children's environmental health risks.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$150,000 the first year and $150,000 the second year are from the trust fund to the commissioner of natural resources for an agreement with Schulte Associates, LLC to provide continuous, real-time indoor air quality monitoring in at least six selected schools.

Subd. 13. Data Availability Requirements

(a) During the biennium ending June 30, 2005, data collected by the projects funded under this section that have value for planning and management of natural resource, emergency preparedness, and infrastructure investments must conform to the enterprise information architecture developed by the office of technology. Spatial data must conform to geographic information system guidelines and standards outlined in that architecture and adopted by the Minnesota geographic data clearinghouse at the land management information center. A description of these data must be made available on-line through the clearinghouse, and the data themselves must be accessible and free to the public unless made private under the Data Practices Act, Minnesota Statutes, chapter 13.

(b) To the extent practicable, summary data and results of projects funded under this section should be readily accessible on the Internet.

(c) As part of project expenditures, recipients of land acquisition appropriations must provide the information necessary to update public recreation information maps to the department of natural resources in the specified form.

Subd. 14. Project Requirements

It is a condition of acceptance of the appropriations in this section that any agency or entity receiving the appropriation must comply with Minnesota Statutes, chapter 116P, and vegetation planted must be native to Minnesota and preferably of the local ecotype unless the work program approved by the commission expressly allows the planting of species that are not native to Minnesota.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 15. Match Requirements

Unless specifically authorized, appropriations in this section that must be matched and for which the match has not been committed by December 31, 2003, are canceled, and in-kind contributions may not be counted as matching funds.

Subd. 16. Payment Conditions and Capital Equipment Expenditures

All agreements, grants, or contracts referred to in this section must be administered on a reimbursement basis. Notwithstanding Minnesota Statutes, section 16A.41, expenditures made on or after July 1, 2003, or the date the work program is approved, whichever is later, are eligible for reimbursement unless otherwise provided in this section. Payment must be made upon receiving documentation that project-eligible reimbursable amounts have been expended, except that reasonable amounts may be advanced to projects in order to accommodate cash flow needs. The advances must be approved as part of the work program. No expenditures for capital equipment are allowed unless expressly authorized in the project work program.

Subd. 17. Purchase of Recycled and Recyclable Materials

A political subdivision, public or private corporation, or other entity that receives an appropriation in this section must use the appropriation in compliance with Minnesota Statutes, sections 16B.121 and 16B.122, requiring the purchase of recycled, repairable, and durable materials; the purchase of uncoated paper stock; and the use of soy-based ink, the same as if it were a state agency.

Subd. 18. Energy Conservation

A recipient to whom an appropriation is made in this section for a capital improvement project shall ensure that the project complies with the applicable energy conservation standards contained in law, including Minnesota Statutes, sections 216C.19 and 216C.20, and rules adopted thereunder. The recipient may use the energy planning, advocacy, and state energy office units of the department of commerce to obtain information and technical assistance on energy conservation and alternative energy development relating to the planning and construction of the capital improvement project.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 19. Accessibility

Structural and nonstructural facilities must meet the design standards in the Americans with Disability Act (ADA) accessibility guidelines.

Subd. 20. Carryforward

(a) The availability of the appropriations for the following projects is extended to June 30, 2004: Laws 2001, First Special Session chapter 2, section 14, subdivision 4, paragraph (b), state fish hatchery rehabilitation, paragraph (c), enhancing Canada goose hunting and management; subdivision 5, paragraph (g), McQuade small craft harbor, paragraph (i), Gateway trail bridge, paragraph (p), state park and recreation area acquisition, paragraph (q), LAWCON; subdivision 6, paragraph (d), determination of fecal pollution sources in Minnesota; subdivision 7, paragraph (e), Lake Superior Lakewide Management Plan (LaMP); subdivision 8, paragraph (b), agricultural land preservation, paragraph (d), accelerated technology transfer for starch-based plastics; and subdivision 9, improving air quality by using biodiesel in generators.

(b) The availability of the appropriation from the trust fund for the following project is extended to June 30, 2004: Laws 2001, First Special Session chapter 2, section 14, subdivision 3, paragraph (a), legislative commission on Minnesota resources. During the 2004-2005 biennium the legislative commission on Minnesota resources is not subject to the limitation in uses of funds provided under Minnesota Statutes, section 16A.281.

(c) The availability of the appropriation for the following project is extended to June 30, 2005: Laws 2001, First Special Session chapter 2, section 14, subdivision 5, paragraph (k), Gitchi-Gami state trail; and subdivision 7, paragraph (a), hydraulic impacts of quarries and gravel pits.

Subd. 21. Future Resources Funds

Minnesota future resources fund appropriations remaining from appropriations in Laws 1999, chapter 231, section 16; and Laws 2001, First Special Session chapter 2, section 14, as amended in subdivision 19 are continued to the date of their availability in law.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Any projects with dollars appropriated from the Minnesota future resources fund prior to July 1, 2003, continue to be subject to the requirements of Minnesota Statutes, chapter 116P.

Sec. 10. [FUND TRANSFER.]

(a) By June 30, 2003, the commissioner of the pollution control agency shall transfer $11,000,000 from the unreserved balance of the solid waste fund to the commissioner of finance for cancellation to the general fund.

(b) The commissioner of the pollution control agency shall transfer $5,000,000 before July 30, 2003, and $5,000,000 before July 30, 2004, from the unreserved balance of the environmental fund to the commissioner of finance for cancellation to the general fund.

(c) By June 30, 2005, the commissioner of the pollution control agency shall transfer $1,370,000 from the environmental fund to the commissioner of finance for cancellation to the general fund.

(d) By June 30, 2007, the commissioner of the pollution control agency shall transfer $1,370,000 from the environmental fund to the commissioner of finance for cancellation to the general fund.

(e) By June 30, 2004, the commissioner of the pollution control agency shall transfer $9,905,000 from the metropolitan landfill contingency action trust fund to the commissioner of finance for cancellation to the general fund. This is a onetime transfer from the metropolitan landfill contingency action trust fund to the general fund. It is the intent of the legislature to restore these funds to the metropolitan landfill contingency action trust fund as revenues become available in the future to ensure the state meets future financial obligations under Minnesota Statutes, section 473.845.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 11. Minnesota Statutes 2002, section 17.4988, is amended to read:

17.4988 [LICENSE AND INSPECTION FEES.]

Subdivision 1. [REQUIREMENTS FOR ISSUANCE.] A permit or license must be issued by the commissioner if the requirements of law are met and the license and permit fees specified in this section are paid.

Subd. 2. [AQUATIC FARMING LICENSE.] (a) The annual fee for an aquatic farming license is ~~$70~~ $210.

(b) The aquatic farming license may contain endorsements for the rights and privileges of the following licenses under the game and fish laws. The endorsement must be made upon payment of the license fee prescribed in section 97A.475 for the following licenses:

(1) minnow dealer license;

(2) minnow retailer license for sale of minnows as bait;

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(3) minnow exporting license;

(4) aquatic farm vehicle endorsement, which includes a minnow dealer vehicle license, a minnow retailer vehicle license, an exporting minnow vehicle license, and a fish vendor license;

(5) sucker egg taking license; and

(6) game fish packers license.

Subd. 3. [INSPECTION FEES.] The fees for the following inspections are:

(1) initial inspection of each water to be licensed, $50;

(2) fish health inspection and certification, ~~$20~~ $60 plus ~~$100~~ $150 per lot thereafter; and

(3) initial inspection for containment and quarantine facility inspections, ~~$50~~ $100.

Subd. 4. [AQUARIUM FACILITY.] (a) A person operating a commercial aquarium facility must have a commercial aquarium facility license issued by the commissioner if the facility contains species of aquatic life that are for sale and that are present in waters of the state. The commissioner may require an aquarium facility license for aquarium facilities importing or holding species of aquatic life that are for sale and that are not present in Minnesota if those species can survive in waters of the state. The fee for an aquarium facility license is ~~$19~~ $90.

(b) Game fish transferred by an aquarium facility must be accompanied by a receipt containing the information required on a shipping document by section 17.4985, subdivision 3, paragraph (b).

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 12. Minnesota Statutes 2002, section 84.027, subdivision 13, is amended to read:

Subd. 13. [GAME AND FISH RULES.] (a) The commissioner of natural resources may adopt rules under sections 97A.0451 to 97A.0459 and this subdivision that are authorized under:

(1) chapters 97A, 97B, and 97C to set open seasons and areas, to close seasons and areas, to select hunters for areas, to provide for tagging and registration of game, to prohibit or allow taking of wild animals to protect a species, to prevent or control wildlife disease, and to prohibit or allow importation, transportation, or possession of a wild animal;

(2) sections 84.093, 84.15, and 84.152 to set seasons for harvesting wild ginseng roots and wild rice and to restrict or prohibit harvesting in designated areas; and

(3) section 84D.12 to designate prohibited exotic species, regulated exotic species, unregulated exotic species, and infested waters.

(b) If conditions exist that do not allow the commissioner to comply with sections 97A.0451 to 97A.0459, the commissioner may adopt a rule under this subdivision by submitting the rule to the attorney general for review under section 97A.0455, publishing a notice in the State Register and filing the rule with the secretary of state and the legislative coordinating commission, and complying with section 97A.0459, and including a statement of the emergency conditions and a copy of the rule in the notice. The notice may be published after it is received from the attorney general or five business days after it is submitted to the attorney general, whichever is earlier.

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(c) Rules adopted under paragraph (b) are effective upon publishing in the State Register and may be effective up to seven days before publishing and filing under paragraph (b), if:

(1) the commissioner of natural resources determines that an emergency exists;

(2) the attorney general approves the rule; and

(3) for a rule that affects more than three counties the commissioner publishes the rule once in a legal newspaper published in Minneapolis, St. Paul, and Duluth, or for a rule that affects three or fewer counties the commissioner publishes the rule once in a legal newspaper in each of the affected counties.

(d) Except as provided in paragraph (e), a rule published under paragraph (c), clause (3), may not be effective earlier than seven days after publication.

(e) A rule published under paragraph (c), clause (3), may be effective the day the rule is published if the commissioner gives notice and holds a public hearing on the rule within 15 days before publication.

(f) The commissioner shall attempt to notify persons or groups of persons affected by rules adopted under paragraphs (b) and (c) by public announcements, posting, and other appropriate means as determined by the commissioner.

(g) Notwithstanding section 97A.0458, a rule adopted under this subdivision is effective for the period stated in the notice but not longer than 18 months after the rule is adopted.

Sec. 13. Minnesota Statutes 2002, section 84.029, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT, DEVELOPMENT, MAINTENANCE AND OPERATION.] In addition to other lawful authority, the commissioner of natural resources may establish, develop, maintain, and operate recreational areas, including but not limited to trails and canoe routes, for the use and enjoyment of the public on any state-owned or leased land under the commissioner's jurisdiction. Each employee of the department of natural resources, while engaged in employment in connection with such recreational areas, has and possesses the authority and power of a peace officer when so designated by the commissioner The commissioner may employ and designate individuals according to section 85.04 to enforce laws governing the use of recreational areas.

Sec. 14. Minnesota Statutes 2002, section 84.085, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY.] (a) The commissioner of natural resources may accept for and on behalf of the state any gift, bequest, devise, or grants of lands or interest in lands or personal property of any kind or of money tendered to the state for any purpose pertaining to the activities of the department or any of its divisions. Any money so received is hereby appropriated and dedicated for the purpose for which it is granted. Lands and interests in lands so received may be sold or exchanged as provided in chapter 94.

(b) The commissioner of natural resources, on behalf of the state, may accept and use grants of money or property from the United States or other grantors for conservation purposes not inconsistent with the laws of this state. Any money or property so received is hereby appropriated and dedicated for the purposes for which it is granted, and shall be expended or used solely for such purposes in accordance with the federal laws and regulations pertaining thereto, subject to applicable state laws and rules as to manner of expenditure or use providing that the commissioner may make subgrants of any money received to other agencies, units of local government, private individuals, private organizations, and private nonprofit corporations. Appropriate funds and accounts shall be maintained by the commissioner of finance to secure compliance with this section.

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(c) The commissioner may accept for and on behalf of the permanent school fund a donation of lands, interest in lands, or improvements on lands. A donation so received shall become state property, be classified as school trust land as defined in section 92.025, and be managed consistent with section 127A.31.

Sec. 15. Minnesota Statutes 2002, section 84.091, subdivision 2, is amended to read:

Subd. 2. [LICENSE REQUIRED; EXCEPTION.] (a) Except as provided in paragraph (b), a person may not harvest, buy, sell, transport, or possess aquatic plants without a license required under this chapter. A license shall be issued in the same manner as provided under the game and fish laws.

(b) A resident under the age of 16 18 years may harvest wild rice without a license, if accompanied by a person with a wild rice license.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 16. Minnesota Statutes 2002, section 84.091, subdivision 3, is amended to read:

Subd. 3. [LICENSE FEES.] (a) The fees for the following licenses, to be issued to residents only, are:

(1) for harvesting wild rice~~, $12.50~~:

(i) for a season, $25; and

(ii) for one day, $15;

(2) for buying and selling wild ginseng, $5;

(3) for a wild rice dealer's license to buy and sell 50,000 pounds or less, $70; and

(4) for a wild rice dealer's license to buy and sell more than 50,000 pounds, $250.

(b) The fee for a nonresident one-day license to harvest wild rice is $30.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 17. Minnesota Statutes 2002, section 84.0911, is amended to read:

84.0911 [WILD RICE MANAGEMENT ACCOUNT.]

Subdivision 1. [~~ESTABLISHMENT~~ ACCOUNT ESTABLISHED.] The wild rice management account is established as an account in the ~~state treasury~~ game and fish fund.

Subd. 2. [RECEIPTS.] Money received from the sale of wild rice licenses issued by the commissioner under section 84.091, subdivision 3, paragraph (a), clauses (1) ~~and~~, (3), and (4), and subdivision 3, paragraph (b), shall be credited to the wild rice management account.

Subd. 3. [USE OF MONEY IN ACCOUNT.] ~~(a)~~ Money in the wild rice management account ~~shall be used by~~ is annually appropriated to the commissioner and shall be used for management of designated public waters to improve natural wild rice production.

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~~(b) Money that is not appropriated from the wild rice management account does not cancel but shall remain in the wild rice management account until appropriated.~~

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 18. [84.771] [OFF-HIGHWAY VEHICLE DEFINITION.]

For the purposes of sections 84.771 to 84.930, "off-highway vehicle" means an off-highway motorcycle, as defined under section 84.787, subdivision 7; an off-road vehicle, as defined under section 84.797, subdivision 7; or an all-terrain vehicle, as defined under section 84.92, subdivision 8.

Sec. 19. [84.773] [RESTRICTIONS ON OPERATION.]

A person may not intentionally operate an off-highway vehicle:

(1) on a trail on public land that is designated for nonmotorized use only;

(2) on restricted areas within public lands that are posted or where gates or other clearly visible structures are placed to prevent unauthorized motorized vehicle access; or

(3) except as specifically authorized by law or rule adopted by the commissioner, in: type 3, 4, 5, and 8 wetlands or unfrozen public waters, as defined in section 103G.005; in a state park; in a scientific and natural area; or in a wildlife management area.

Sec. 20. [84.775] [OFF-HIGHWAY VEHICLE CIVIL CITATIONS.]

Subdivision 1. [CIVIL CITATION; AUTHORITY TO ISSUE.] (a) A conservation officer or other licensed peace officer may issue a civil citation to a person who operates:

(1) an off-highway motorcycle in violation of sections 84.773; 84.777; 84.788 to 84.795; or 84.90;

(2) an off-road vehicle in violation of sections 84.773; 84.777; 84.798 to 84.804; or 84.90; or

(3) an all-terrain vehicle in violation of sections 84.773; 84.777; 84.90; or 84.922 to 84.928.

(b) A civil citation shall require restitution for public and private property damage and impose a penalty of no more than $100 for the first offense, no more than $200 for the second offense, and no more than $500 for third and subsequent offenses. If the peace officer determines that there is damage to property requiring restitution, the commissioner must send a written explanation of the extent of the damage and the cost of the repair by first class mail to the address provided by the person receiving the citation within 15 days of the date of the citation.

Subd. 2. [APPEALS.] Civil citations issued under subdivision 1 may be appealed according to section 116.072, if the recipient of the citation requests a hearing by notifying the commissioner in writing within 30 days after receipt of the citation or, if applicable, within 15 days after the date of mailing the explanation of restitution. For the purposes of this section, the terms "commissioner" and "agency" as used in section 116.072 mean the commissioner of natural resources. If a hearing is not requested within the 30-day period, the citation becomes a final order not subject to further review.

Subd. 3. [ENFORCEMENT.] Civil citations issued under subdivision 1 may be enforced under section 116.072, subdivision 9. Penalty amounts must be remitted within 30 days of issuance of the citation.

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Subd. 4. [ALLOCATION OF PENALTY AMOUNTS.] Penalty amounts collected from civil citations issued under this section must be paid to the treasury of the unit of government employing the officer that issued the civil citation. Penalties retained by the commissioner shall be credited as follows: to the off-highway motorcycle account under section 84.794 for citations involving off-highway motorcycles; to the off-road vehicle account under section 84.803 for citations involving off-road vehicles; or to the all-terrain vehicle account under section 84.927 for citations involving all-terrain vehicles. Penalty amounts credited under this subdivision are dedicated for the enforcement of off-highway vehicle laws.

Subd. 5. [SELECTION OF REMEDY.] A peace officer may not seek both civil and misdemeanor penalties for offenses listed in subdivision 1.

Sec. 21. [84.777] [OFF-HIGHWAY VEHICLE USE OF STATE LANDS RESTRICTED.]

(a) Except as otherwise allowed by law or rules adopted by the commissioner, effective June 1, 2003, notwithstanding sections 84.787 to 84.805 and 84.92 to 84.929, the use of off-highway vehicles is prohibited on state land administered by the commissioner of natural resources, and on county-administered forest land within the boundaries of a state forest, except on roads and trails specifically designated and posted by the commissioner for use by off-highway vehicles.

(b) Paragraph (a) does not apply to county-administered land within a state forest if the county board adopts a resolution that modifies restrictions on the use of off-highway vehicles on county-administered land within the forest.

Sec. 22. [84.780] [OFF-HIGHWAY VEHICLE DAMAGE ACCOUNT.]

(a) The off-highway vehicle damage account is created in the natural resources fund. Money in the off-highway vehicle damage account is appropriated to the commissioner of natural resources for the repair or restoration of property damaged by the operation of off-highway vehicles in an unpermitted area after August 1, 2003, and for the costs of administration for this section. Before the commissioner may make a payment from this account, the commissioner must determine whether the damage to the property was caused by the unpermitted use of off-highway vehicles, that the applicant has made reasonable efforts to identify the responsible individual and obtain payment from the individual, and that the applicant has made reasonable efforts to prevent reoccurrence. By June 30, 2005, the commissioner of finance must transfer the remaining balance in the account to the off-highway motorcycle account under section 84.794, the off-road vehicle account under section 84.803, and the all-terrain vehicle account under section 84.927. The amount transferred to each account must be proportionate to the amounts received in the damage account from the relevant off-highway vehicle accounts.

(b) This section expires July 1, 2005.

Sec. 23. Minnesota Statutes 2002, section 84.788, subdivision 2, is amended to read:

Subd. 2. [EXEMPTIONS.] Registration is not required for off-highway motorcycles:

(1) owned and used by the United States, the state, another state, or a political subdivision;

(2) registered in another state or country that have not been within this state for more than 30 consecutive days; or

(3) ~~used exclusively in organized track racing events;~~

~~(4) being used on private land with the permission of the landowner; or~~

~~(5)~~ registered under chapter 168, when operated on forest roads to gain access to a state forest campground.

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Sec. 24. Minnesota Statutes 2002, section 84.788, subdivision 3, is amended to read:

Subd. 3. [APPLICATION; ISSUANCE; REPORTS.] (a) Application for registration or continued registration must be made to the commissioner or an authorized deputy registrar of motor vehicles in a form prescribed by the commissioner. The form must state the name and address of every owner of the off-highway motorcycle.

(b) A person who purchases from a retail dealer an off-highway motorcycle ~~that is intended to be operated on public lands or waters~~ shall make application for registration to the dealer at the point of sale. The dealer shall issue a temporary ten-day registration permit to each purchaser who applies to the dealer for registration. The dealer shall submit the completed registration applications and fees to the deputy registrar at least once each week. No fee may be charged by a dealer to a purchaser for providing the temporary permit.

(c) Upon receipt of the application and the appropriate fee, the commissioner or deputy registrar shall issue to the applicant, or provide to the dealer, a 60-day temporary receipt and shall assign a registration number that must be affixed to the motorcycle in a manner prescribed by the commissioner. A dealer subject to paragraph (b) shall provide the registration materials and temporary receipt to the purchaser within the ten-day temporary permit period.

(d) The commissioner shall develop a registration system to register vehicles under this section. A deputy registrar of motor vehicles acting under section 168.33, is also a deputy registrar of off-highway motorcycles. The commissioner of natural resources in agreement with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to ensure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements.

(e) ~~A fee of $2~~ In addition to other fees prescribed by law, a filing fee of $4.50 is charged for each off-highway motorcycle registration renewal, duplicate or replacement registration card, and replacement decal and a filing fee of $7 is charged for each off-highway motorcycle ~~registered~~ registration and registration transfer issued by:

(1) a deputy registrar and must be deposited in the treasury of the jurisdiction where the deputy is appointed, or kept if the deputy is not a public official; or

(2) the commissioner and must be deposited in the state treasury and credited to the off-highway motorcycle account.

Sec. 25. Minnesota Statutes 2002, section 84.798, subdivision 3, is amended to read:

Subd. 3. [APPLICATION; ISSUANCE.] (a) Application for registration or continued registration must be made to the commissioner, or an authorized deputy registrar of motor vehicles in a form prescribed by the commissioner. The form must state the name and address of every owner of the off-road vehicle. Upon receipt of the application and the appropriate fee, the commissioner shall register the off-road vehicle and assign a registration number that must be affixed to the vehicle in accordance with subdivision 4.

(b) A deputy registrar of motor vehicles acting under section 168.33 is also a deputy registrar of off-road vehicles. The commissioner of natural resources in cooperation with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to ensure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements. ~~A fee of $2~~ In addition to other fees prescribed by law ~~must be~~, a filing fee of $4.50 is charged for each off-road vehicle registration renewal, duplicate or replacement registration card, and replacement decal and a filing fee of $7 is charged for each off-road vehicle ~~registered~~ registration and registration transfer issued by:

(1) a deputy registrar and must be deposited in the treasury of the jurisdiction where the deputy is appointed, or retained if the deputy is not a public official; or

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(2) the commissioner and must be deposited in the state treasury and credited to the off-road vehicle account.

Sec. 26. Minnesota Statutes 2002, section 84.803, subdivision 2, is amended to read:

Subd. 2. [PURPOSES.] Subject to appropriation by the legislature, money in the off-road vehicle account may only be spent for:

(1) administration, enforcement, and implementation of sections ~~84.797~~ 84.773 to 84.805 ~~and Laws 1993, chapter 311, article 2, section 18~~;

(2) acquisition, maintenance, and development of off-road vehicle trails and use areas;

(3) grant-in-aid programs to counties and municipalities to construct and maintain off-road vehicle trails and use areas; ~~and~~

(4) grants-in-aid to local safety programs; and

(5) enforcement and public education grants to local law enforcement agencies.

Sec. 27. [84.901] [OFF-HIGHWAY VEHICLE SAFETY AND CONSERVATION PROGRAM.]

Subdivision 1. [CREATION.] The commissioner of natural resources shall establish a program to promote the safe and responsible operation of off-highway vehicles in a manner that does not harm the environment. The commissioner shall coordinate the program through the regional offices of the department of natural resources.

Subd. 2. [PURPOSE.] The purpose of the program is to encourage off-highway vehicle clubs to assist, on a volunteer basis, in improving, maintaining, and monitoring of trails on state forest land and other public lands.

Subd. 3. [AGREEMENTS.] (a) The commissioner shall enter into informal agreements with off-highway vehicle clubs for volunteer services to maintain, make improvements to, and monitor trails on state forest land and other public lands. The off-highway vehicle clubs shall promote the operation of off-highway vehicles in a safe and responsible manner that complies with the laws and rules that relate to the operation of off-highway vehicles.

(b) The off-highway vehicle clubs may provide assistance to the department in locating, recruiting, and training instructors for off-highway vehicle training programs.

(c) The commissioner may provide assistance to enhance the comfort and safety of volunteers and to facilitate the implementation and administration of the safety and conservation program.

Subd. 4. [WORKER DISPLACEMENT PROHIBITED.] The commissioner may not enter into any agreement that has the purpose of or results in the displacement of public employees by volunteers participating in the off-highway safety and conservation program under this section. The commissioner must certify to the appropriate bargaining agent that the work performed by a volunteer will not result in the displacement of currently employed workers or workers on seasonal layoff or layoff from a substantially equivalent position, including partial displacement such as reduction in hours of nonovertime work, wages, or other employment benefits.

Sec. 28. Minnesota Statutes 2002, section 84.92, subdivision 8, is amended to read:

Subd. 8. [ALL-TERRAIN VEHICLE.] "All-terrain vehicle" or "vehicle" means a motorized flotation-tired vehicle of not less than three low pressure tires, but not more than six tires, that is limited in engine displacement of less than 800 cubic centimeters and total dry weight less than ~~800~~ 900 pounds.

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Sec. 29. Minnesota Statutes 2002, section 84.922, subdivision 2, is amended to read:

Subd. 2. [APPLICATION, ISSUANCE, REPORTS.] (a) Application for registration or continued registration shall be made to the commissioner of natural resources, the commissioner of public safety or an authorized deputy registrar of motor vehicles in a form prescribed by the commissioner. The form must state the name and address of every owner of the vehicle.

(b) A person who purchases an all-terrain vehicle from a retail dealer shall make application for registration to the dealer at the point of sale. The dealer shall issue a temporary ten-day registration permit to each purchaser who applies to the dealer for registration. The dealer shall submit the completed registration application and fees to the deputy registrar at least once each week. No fee may be charged by a dealer to a purchaser for providing the temporary permit.

(c) Upon receipt of the application and the appropriate fee, the commissioner or deputy registrar shall issue to the applicant, or provide to the dealer, a 60-day temporary receipt and shall assign a registration number that must be affixed to the vehicle in a manner prescribed by the commissioner. A dealer subject to paragraph (b) shall provide the registration materials and temporary receipt to the purchaser within the ten-day temporary permit period. The commissioner shall use the snowmobile registration system to register vehicles under this section.

(d) Each deputy registrar of motor vehicles acting under section 168.33, is also a deputy registrar of all-terrain vehicles. The commissioner of natural resources in agreement with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to assure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements.

(e) ~~A fee of $2~~ In addition to other fees prescribed by law ~~shall be~~, a filing fee of $4.50 is charged for each all-terrain vehicle registration renewal, duplicate or replacement registration card, and replacement decal and a filing fee of $7 is charged for each all-terrain vehicle ~~registered~~ registration and registration transfer issued by:

(1) a deputy registrar and shall be deposited in the treasury of the jurisdiction where the deputy is appointed, or retained if the deputy is not a public official; or

(2) the commissioner and shall be deposited to the state treasury and credited to the all-terrain vehicle account in the natural resources fund.

Sec. 30. Minnesota Statutes 2002, section 84.922, subdivision 5, is amended to read:

Subd. 5. [FEES FOR REGISTRATION.] (a) The fee for a three-year registration of an all-terrain vehicle under this section, other than those registered by a dealer or manufacturer under paragraph (b) or (c), is:

(1) for public use before January 1, 2005, ~~$18~~ $23;

(2) for public use on January 1, 2005, and after, $30;

(3) for private use, $6; and

~~(3)~~ (4) for a duplicate or transfer, $4.

(b) The total registration fee for all-terrain vehicles owned by a dealer and operated for demonstration or testing purposes is $50 per year. Dealer registrations are not transferable.

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(c) The total registration fee for all-terrain vehicles owned by a manufacturer and operated for research, testing, experimentation, or demonstration purposes is $150 per year. Manufacturer registrations are not transferable.

(d) The fees collected under this subdivision must be credited to the all-terrain vehicle account.

Sec. 31. Minnesota Statutes 2002, section 84.926, is amended to read:

84.926 [VEHICLE USE ALLOWED ON PUBLIC LANDS BY THE COMMISSIONER.]

Notwithstanding section 84.777, on a case by case basis, ~~after notice and public hearing,~~ the commissioner may ~~allow vehicles~~ issue a permit authorizing a person to operate an off-highway vehicle on individual public trails under the commissioner's jurisdiction during specified times and for specified purposes.

Sec. 32. Minnesota Statutes 2002, section 84.927, subdivision 2, is amended to read:

Subd. 2. [PURPOSES.] Subject to appropriation by the legislature, money in the all-terrain vehicle account may only be spent for:

(1) the education and training program under section 84.925;

(2) administration, enforcement, and implementation of sections ~~84.92~~ 84.773 to 84.929 ~~and Laws 1984, chapter 647, sections 9 and 10~~;

(3) acquisition, maintenance, and development of vehicle trails and use areas;

(4) grant-in-aid programs to counties and municipalities to construct and maintain all-terrain vehicle trails and use areas; ~~and~~

(5) grants-in-aid to local safety programs; and

(6) enforcement and public education grants to local law enforcement agencies.

The distribution of funds made available through grant-in-aid programs must be guided by the statewide comprehensive outdoor recreation plan.

Sec. 33. Minnesota Statutes 2002, section 84.928, subdivision 1, is amended to read:

Subdivision 1. [OPERATION ON ROADS AND RIGHTS-OF-WAY.] (a) Unless otherwise allowed in sections 84.92 to 84.929, a person shall not operate an all-terrain vehicle in this state along or on the roadway, shoulder, or inside bank or slope of a public road right-of-way of a trunk, county state-aid, or county highway other than in the ditch or the outside bank or slope of a trunk, county state-aid, or county highway ~~in this state unless otherwise allowed in sections 84.92 to 84.929~~ unless prohibited under paragraph (b).

(b) A road authority as defined under section 160.02, subdivision 25, may after a public hearing restrict the use of all-terrain vehicles in the ditch or outside bank or slope of a public road right-of-way under its jurisdiction.

(c) The commissioner may limit the use of a right-of-way for a period of time if the commissioner determines that use of the right-of-way causes:

(1) degradation of vegetation on adjacent public property;

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(2) siltation of waters of the state;

(3) impairment or enhancement to the act of taking game; or

(4) a threat to safety of the right-of-way users or to individuals on adjacent public property.

(d) The commissioner must notify the road authority as soon as it is known that a closure will be ordered. The notice must state the reasons and duration of the closure.

~~(b)~~ (e) A person may operate an all-terrain vehicle registered for private use and used for agricultural purposes on a public road right-of-way of a trunk, county state-aid, or county highway in this state if the all-terrain vehicle is operated on the extreme right-hand side of the road, and left turns may be made from any part of the road if it is safe to do so under the prevailing conditions.

~~(c)~~ (f) A person shall not operate an all-terrain vehicle within the public road right-of-way of a trunk, county state-aid, or county highway from April 1 to August 1 in the agricultural zone unless the vehicle is being used exclusively as transportation to and from work on agricultural lands. This paragraph does not apply to an agent or employee of a road authority, as defined in section 160.02, subdivision 25, or the department of natural resources when performing or exercising official duties or powers.

~~(d)~~ (g) A person shall not operate an all-terrain vehicle within the public road right-of-way of a trunk, county state-aid, or county highway between the hours of one-half hour after sunset to one-half hour before sunrise, except on the right-hand side of the right-of-way and in the same direction as the highway traffic on the nearest lane of the adjacent roadway.

~~(e)~~ (h) A person shall not operate an all-terrain vehicle at any time within the right-of-way of an interstate highway or freeway within this state.

Sec. 34. [84.930] [MOTORIZED TRAIL GRANTS-IN-AID.]

(a) This section applies to grants-in-aid for motorized trail construction and maintenance under sections 84.794, 84.803, 84.83, and 84.927.

(b) If the commissioner of natural resources determines that a grant-in-aid recipient has violated any federal or state law or any of the terms of the grant agreement with the commissioner, the commissioner may withhold all grant payments for any work occurring after the date the recipient was notified of the violation and seek restitution for any property damage caused by the violation.

(c) A grant-in-aid recipient may appeal the commissioner's decision under paragraph (b) in a contested case hearing under section 14.58.

Sec. 35. [84.991] [MINNESOTA CONSERVATION CORPS.]

Subdivision 1. [TRANSFER.] (a) The Minnesota conservation corps is moved to the friends of the Minnesota conservation corps, an existing nonprofit corporation under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, doing business as the Minnesota conservation corps under the supervision of a board of directors.

(b) The expenditure of state funds by the Minnesota conservation corps is subject to audit by the legislative auditor and regular annual report to the legislature in general and specifically to the house of representatives and senate committees with jurisdiction over environment and natural resources policy and finance.

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Subd. 2. [STAFF; CORPS MEMBERS.] (a) Staff employed by the Minnesota conservation corps are not state employees, but, at the option of the board of directors of the nonprofit corporation and at the expense of the corporation or its staff, employees who are in the employ of the Minnesota conservation corps on or before June 30, 2003, may continue to participate in state retirement and deferred compensation, that apply to state employees.

(b) Employment as a Minnesota conservation corps member is noncovered employment for purposes of eligibility for unemployment benefits under chapter 268.

(c) The Minnesota conservation corps is authorized to continue to have staff and corps members participate in the state of Minnesota workers' compensation program through the department of natural resources. Staff and corps members' claim and administrative costs must be allocated and set annually by the department of natural resources in a manner that is consistent with how these costs are allocated across that agency's operations. The friends of the Minnesota conservation corps shall establish and follow loss-control strategies that are consistent with loss-control activities of the department of natural resources. In the event that the friends of the Minnesota conservation corps becomes insolvent or cannot otherwise fund its claim and administrative costs, liability for these costs shall be assumed by the department of natural resources.

(d) The Minnesota conservation corps is a training and service program and exempt from Minnesota prevailing wage guidelines.

Subd. 3. [STATE AND OTHER AGENCY COLLABORATION.] The departments of natural resources, agriculture, public safety, transportation, and other appropriate state agencies must constructively collaborate with the Minnesota conservation corps.

Subd. 4. [EQUIPMENT AND SERVICE PURCHASES; STATE CONTRACTS.] The Minnesota conservation corps may purchase or lease equipment and services, including fleet, through state contracts administered by the commissioner of administration or the department of natural resources.

Subd. 5. [LIMITATIONS ON MINNESOTA CONSERVATION CORPS PROJECTS.] Each employing state or local agency must certify that the assignment of Minnesota conservation corps members will not result in the displacement of currently employed workers or workers on seasonal layoff, including partial displacement such as reduction in hours of nonovertime work, wages, or other employment benefits. Supervising agencies that participate in the program may not terminate, lay off, reduce the seasonal hours, or reduce the working hours of any employee for the purpose of using a corps member with available funds. The positions and job duties of corps members employed in projects shall be submitted to affected exclusive representatives prior to actual assignment.

Subd. 6. [JOINT POWERS.] Section 471.59 relating to joint exercise of powers applies to the Minnesota conservation corps.

Sec. 36. Minnesota Statutes 2002, section 84A.02, is amended to read:

84A.02 [DEPARTMENT TO MANAGE PRESERVE.]

(a) The department of natural resources shall manage and control the Red Lake game preserve. The department may adopt and enforce rules for the care, preservation, protection, breeding, propagation, and disposition of all species of wildlife in the preserve. The department may adopt and enforce rules for the regulation, issuance, sale, and revocation of special licenses or special permits for hunting, fishing, camping, and other uses of this area, consistent with sections 84A.01 to 84A.11. The department may by rule set the terms, conditions, and charges for these licenses and permits.

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(b) The rules may specify and control the terms under which wildlife may be taken, captured, or killed in the preserve, and under which fur-bearing animals, or animals and fish otherwise having commercial value, may be taken, captured, trapped, killed, sold, and removed from it. These rules may also provide for (1) the afforestation and reforestation of state lands in the preserve, (2) the sale of merchantable timber from these lands when, in the opinion of the department, it can be sold and removed without damage or injury to the further use and development of the land for wildlife and game in the preserve, and (3) the purposes for which the preserve is established by sections 84A.01 to 84A.11.

(c) The department may provide for the policing of the preserve as necessary for its proper development and use for the purposes specified. ~~Supervisors, guards, custodians, and caretakers assigned to duty in the preserve have the powers of peace officers while in their employment~~ The commissioner of natural resources may employ and designate individuals according to section 85.04 to enforce laws governing the use of the preserve.

(d) The department shall also adopt and enforce rules concerning the burning of grass, timber slashings, and other flammable matter, and the clearing, development, and use of lands in the preserve as necessary to prevent forest fires and grass fires that would injure the use and development of this area for wildlife preservation and propagation and to protect its forest and wooded areas.

(e) Lands within the preserve are subject to the rules, whether owned by the state or privately, consistent with the rights of the private owners and with applicable state law. The rules may establish areas and zones within the preserve where hunting, fishing, trapping, or camping is prohibited or specially regulated, to protect and propagate particular wildlife in the preserve.

(f) Rules adopted under sections 84A.01 to 84A.11 must be posted on the boundaries of the preserve.

Sec. 37. Minnesota Statutes 2002, section 84A.21, is amended to read:

84A.21 [DEPARTMENT TO MANAGE PROJECTS.]

(a) The department shall manage and control each project approved and accepted under section 84A.20. The department may adopt and enforce rules for the purposes in section 84A.20, subdivision 1, for the prevention of forest fires in the projects, and for the sale of merchantable timber from lands so acquired by the state when, in the opinion of the department, the timber may be sold and removed without damage to the project.

(b) These rules may relate to the care, preservation, protection, breeding, propagation, and disposition of any species of wildlife in the project and the regulation, issuance, sale, and revocation of special licenses or special permits for hunting, fishing, camping, and other uses of the areas consistent with applicable state law.

(c) The department may provide for the policing of each project as needed for the proper development, use, and protection of the project and its purposes. ~~Supervisors, guards, custodians, and caretakers assigned to duty in any project have the powers of peace officers while employed by the department~~ The commissioner of natural resources may employ and designate individuals according to section 85.04 to enforce laws governing the use of the projects.

(d) Lands within a project are subject to these rules, whether owned by the state or privately, consistent with the rights of the private owners or with applicable state law. The rules must be published once in one qualified newspaper in each county affected and take effect after publication. They must also be posted on the boundaries of each project affected.

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Sec. 38. Minnesota Statutes 2002, section 84A.32, subdivision 1, is amended to read:

Subdivision 1. [RULES.] (a) The department shall manage and control each project approved and accepted under section 84A.31. The department may adopt and enforce rules for the purposes in section 84A.31, subdivision 1, for the prevention of forest fires in the projects, and for the sale of merchantable timber from lands acquired by the state in the projects when, in the opinion of the department, the timber may be sold and removed without damage to the purposes of the projects. Rules must not interfere with, destroy, or damage any privately owned property without just compensation being made to the owner of the private property by purchase or in lawful condemnation proceedings. The rules may relate to the care, preservation, protection, breeding, propagation, and disposition of any species of wildlife in the projects and the regulation, issuance, sale, and revocation of special licenses or special permits for hunting, fishing, camping, or other uses of these areas consistent with applicable state law.

(b) The department may provide for the policing of each project as necessary for the proper development, use, and protection of the project, and of its purpose. ~~Supervisors, guards, custodians, and caretakers assigned to duty in a project have the powers of peace officers while employed by the department~~ The commissioner of natural resources may employ and designate individuals according to section 85.04 to enforce laws governing the use of the projects.

(c) Lands within the project are subject to these rules, whether owned by the state, or privately, consistent with the constitutional rights of the private owners or with applicable state law. The department may exclude from the operation of the rules any lands owned by private individuals upon which taxes are delinquent for three years or less. Rules must be published once in the official newspaper of each county affected and take effect 30 days after publication. They must also be posted on each of the four corners of each township of each project affected.

(d) In the management, operation, and control of areas taken for afforestation, reforestation, flood control projects, and wild game and fishing reserves, nothing shall be done that will in any manner obstruct or interfere with the operation of ditches or drainage systems existing within the areas, or damage or destroy existing roads or highways within these areas or projects, unless the ditches, drainage systems, roads, or highways are first taken under the right of eminent domain and compensation made to the property owners and municipalities affected and damaged. Each area or project shall contribute from the funds of the project, in proportion of the state land within the project, for the construction and maintenance of roads and highways necessary within the areas and projects to give the settlers and private owners within them access to their land. The department may construct and maintain roads and highways within the areas and projects as it considers necessary.

Sec. 39. Minnesota Statutes 2002, section 84A.55, subdivision 8, is amended to read:

Subd. 8. [POLICING.] The commissioner may police the game preserves, areas, and projects as necessary to carry out this section. ~~Persons assigned to the policing have the powers of police officers while so engaged~~ The commissioner may employ and designate individuals according to section 85.04 to enforce laws governing the use of the game preserves, areas, and projects.

Sec. 40. [84B.12] [CITIZENS COUNCIL ON VOYAGEURS NATIONAL PARK.]

(a) The governor may appoint, except for the legislative members, a citizens council on Voyageurs National Park, consisting of 17 members as follows:

(1) four residents of Koochiching county;

(2) four residents of St. Louis county;

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(3) five residents of the state, at large, from outside Koochiching and St. Louis counties;

(4) two members of the senate to be appointed by the committee on committees;

(5) two members of the house of representatives to be appointed by the speaker of the house.

(b) The governor shall designate one of the appointees to serve as chair and the committee may elect other officers that it considers necessary. Members shall be appointed so as to represent differing viewpoints and interest groups on the facilities included in and around the park. Legislative members shall serve for the term of the legislative office to which they were elected. The terms, compensation and removal of nonlegislative members of the council are as provided in section 15.059. The council expires June 30, 2007.

(c) The executive committee of the council consists of the legislative members and the chair. The executive committee shall act on matters of personnel, out-of-state trips by members of the council, and nonroutine monetary issues.

(d) The committee shall conduct meetings and research into all matters related to the establishment and operation of Voyageurs National Park, and shall make such recommendations to the United States National Park Service and other federal and state agencies concerned regarding operation of the park as the committee deems advisable. A copy of each recommendation shall be filed with the legislative reference library. Subject to the availability of legislative appropriation or other funding, the committee may employ staff and may contract for consulting services relating to matters within its authority.

(e) Money appropriated to provide the payments prescribed by this section is appropriated to the commissioner of administration.

Sec. 41. Minnesota Statutes 2002, section 84D.14, is amended to read:

84D.14 [EXEMPTIONS.]

This chapter does not apply to:

(1) pathogens and terrestrial arthropods ~~regulated under sections 18.44 to 18.61~~; or

(2) mammals and birds defined by statute as livestock.

Sec. 42. Minnesota Statutes 2002, section 85.04, is amended to read:

85.04 [ENFORCEMENT DIVISION EMPLOYEES ~~AS PEACE OFFICERS~~.]

Subdivision 1. [PEACE OFFICER EMPLOYMENT.] ~~All supervisors, guards, custodians, keepers, and caretakers~~ The commissioner of natural resources may employ peace officers as defined under section 626.84, subdivision 1, paragraph (c), to enforce laws governing the use of state parks, state monuments, state recreation areas, and state waysides ~~shall have and possess the authority and powers of peace officers while in their employment~~.

Subd. 2. [OTHER EMPLOYEES.] Until August 1, 2004, the commissioner of natural resources may designate certain employees to enforce laws governing the use of state parks, state monuments, state recreation areas, state waysides, and state forest subareas. The designation by the commissioner is not subject to rulemaking under Minnesota Statutes, chapter 14.

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Sec. 43. Minnesota Statutes 2002, section 85.052, subdivision 3, is amended to read:

Subd. 3. [FEE FOR CERTAIN PARKING AND CAMPSITE USE.] (a) An individual using spaces in state parks under subdivision 1, clause (2), shall be charged daily rates determined and set by the commissioner in a manner and amount consistent with the type of facility provided for the accommodation of guests in a particular park and with similar facilities offered for tourist camping and similar use in the area.

(b) The fee for special parking spurs, campgrounds for automobiles, sites for tent camping, and special auto trailer coach parking spaces is one-half of the fee set in paragraph (a) on Sunday through Thursday of each week for a physically handicapped person:

(1) ~~an individual age 65 or over who is a resident of the state and who furnishes satisfactory proof of age and residence;~~

~~(2) a physically handicapped person~~ with a motor vehicle that has special plates issued under section 168.021, subdivision 1; or

~~(3) a physically handicapped person~~ (2) who possesses a certificate issued under section 169.345, subdivision 3.

Sec. 44. Minnesota Statutes 2002, section 85.053, subdivision 1, is amended to read:

Subdivision 1. [FORM, ISSUANCE, VALIDITY.] (a) The commissioner shall prepare and provide state park permits for each calendar year that state a motor vehicle may enter and use state parks, state recreation areas, and state waysides over 50 acres in area. State park permits must be available and placed on sale by ~~October~~ January 1 of ~~the year preceding~~ the calendar year that the permit is valid. A separate motorcycle permit may be prepared and provided by the commissioner.

(b) An annual state park permit must be affixed when purchased and may be used from the time it is affixed for a 12-month period. State park permits in each category must be numbered consecutively for each year of issue.

(c) State park permits shall be issued by employees of the division of parks and recreation as designated by the commissioner. State park permits also may be consigned to and issued by agents designated by the commissioner who are not employees of the division of parks and recreation. All proceeds from the sale of permits and all unsold permits consigned to agents shall be returned to the commissioner at such times as the commissioner may direct, but no later than the end of the calendar year for which the permits are effective. No part of the permit fee may be retained by an agent. An additional charge or fee in an amount to be determined by the commissioner, but not to exceed four percent of the price of the permit, may be collected and retained by an agent for handling or selling the permits.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 45. Minnesota Statutes 2002, section 85.055, subdivision 1, is amended to read:

Subdivision 1. [FEES.] The fee for state park permits for:

(1) an annual use of state parks is ~~$20~~ $25;

(2) a second vehicle state park permit is ~~$15~~ $18;

(3) a state park permit valid for one day is $4 $7;

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(4) a daily vehicle state park permit for groups is $2 $5;

(5) an employee's state park permit is without charge; and

(6) a state park permit for handicapped persons under section 85.053, subdivision 7, clauses (1) and (2), is $12.

The fees specified in this subdivision include any sales tax required by state law.

Sec. 46. Minnesota Statutes 2002, section 85A.02, subdivision 17, is amended to read:

Subd. 17. [ADDITIONAL POWERS.] (a) The board may establish a schedule of charges for admission to or the use of the Minnesota zoological garden or any related facility. Notwithstanding section 16A.1283, legislative approval is not required for the board to establish a schedule of charges for admission or use of the Minnesota zoological garden or related facilities. The board shall have a policy admitting elementary school children at no a reduced charge when they are part of an organized school activity. The Minnesota zoological garden will offer free admission throughout the year to economically disadvantaged Minnesota citizens equal to ten percent of the average annual attendance. However, the zoo may charge at any time for parking, special services, and for admission to special facilities for the education, entertainment, or convenience of visitors.

(b) The board may provide for the purchase, reproduction, and sale of gifts, souvenirs, publications, informational materials, food and beverages, and grant concessions for the sale of these items. Notwithstanding subdivision 5b, section 16C.09 does not apply to activities authorized under this paragraph.

Sec. 47. Minnesota Statutes 2002, section 86B.415, subdivision 8, is amended to read:

Subd. 8. [REGISTRAR'S FEE.] In addition to ~~the license fee~~ other fees prescribed by law, a filing fee of $2 $4.50 shall be charged for a each watercraft license renewal, duplicate or replacement license, and replacement decal and a filing fee of $7 shall be charged for each watercraft license and license transfer issued by:

(1) ~~issued through~~ the registrar or a deputy registrar of motor vehicles and the additional fee shall be disposed of in the manner provided in section 168.33, subdivision 2; or

(2) ~~issued through~~ the commissioner and the additional fee shall be deposited in the state treasury and credited to the water recreation account.

Sec. 48. Minnesota Statutes 2002, section 86B.870, subdivision 1, is amended to read:

Subdivision 1. [FEES.] (a) The fee to be paid to the commissioner:

(1) for issuing an original certificate of title, including the concurrent notation of an assignment of the security interest and its subsequent release or satisfaction, is $15;

(2) for each security interest when first noted upon a certificate of title, including the concurrent notation of an assignment of the security interest and its subsequent release or satisfaction, is $10;

(3) for transferring the interest of an owner and issuing a new certificate of title, is $10;

(4) for each assignment of a security interest when first noted on a certificate of title, unless noted concurrently with the security interest, is $1; and

(5) for issuing a duplicate certificate of title, is $4.

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(b) In addition to other statutory fees and taxes, a filing fee of ~~$3.50~~ $7 is imposed on every watercraft title application. The filing fee must be shown as a separate item on title renewal notices sent by the commissioner.

Sec. 49. Minnesota Statutes 2002, section 97A.045, is amended by adding a subdivision to read:

Subd. 11. [POWER TO PREVENT OR CONTROL WILDLIFE DISEASE.] (a) If the commissioner determines that action is necessary to prevent or control a wildlife disease, the commissioner may prevent or control wildlife disease in a species of wild animal in addition to the protection provided by the game and fish laws by further limiting, closing, expanding, or opening seasons or areas of the state; by reducing or increasing limits in areas of the state; by establishing disease management zones; by authorizing free licenses; by allowing shooting from motor vehicles by persons designated by the commissioner; by issuing replacement licenses for sick animals; by requiring sample collection from hunter-harvested animals; by limiting wild animal possession, transportation, and disposition; and by restricting wildlife feeding.

(b) The commissioner may prevent or control wildlife disease in a species of wild animal in the state by emergency rule adopted under section 84.027, subdivision 13.

Sec. 50. Minnesota Statutes 2002, section 97A.071, subdivision 2, is amended to read:

Subd. 2. [REVENUE FROM THE SMALL GAME LICENSE SURCHARGE AND LIFETIME LICENSES.] Revenue from the small game surcharge and $4 $6.50 annually from the lifetime fish and wildlife trust fund, established in section 97A.4742, for each license issued under sections 97A.473, subdivisions 3 and 5, and 97A.474, subdivision 3, shall be credited to the wildlife acquisition account and the money in the account shall be used by the commissioner only for the purposes of this section, and acquisition and development of wildlife lands under section 97A.145 and maintenance of the lands, in accordance with appropriations made by the legislature.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 51. Minnesota Statutes 2002, section 97A.075, subdivision 1, is amended to read:

Subdivision 1. [DEER, BEAR, AND LIFETIME LICENSES.] (a) For purposes of this subdivision, "deer license" means a license issued under section 97A.475, subdivisions 2, clauses (4), (5), ~~and~~ (9), (11), (13), and (14), and 3, clauses (2), (3), and (7), and licenses issued under section 97B.301, subdivision 4.

(b) At least $2 from each annual deer license and $2 annually from the lifetime fish and wildlife trust fund, established in section 97A.4742, for each license issued under section 97A.473, subdivision 4, shall be used for deer habitat improvement or deer management programs.

(c) At least $1 from each annual deer license and each bear license and $1 annually from the lifetime fish and wildlife trust fund, established in section 97A.4742, for each license issued under section 97A.473, subdivision 4, shall be used for deer and bear management programs, including a computerized licensing system. Fifty cents from each deer license is appropriated for emergency deer feeding and wild cervidae health management ~~of chronic wasting disease~~. Money appropriated for emergency deer feeding and ~~management of chronic wasting disease~~ wild cervidae health management is available until expended. When the unencumbered balance in the appropriation for emergency deer feeding and ~~chronic wasting disease~~ wild cervidae health management at the end of a fiscal year exceeds ~~$1,500,000~~ $2,500,000 for the first time, $750,000 is canceled to the unappropriated balance of the game and fish fund. The commissioner must inform the legislative chairs of the natural resources finance committees every two years on how the money for ~~chronic wasting disease~~ emergency deer feeding and wild cervidae health management has been spent.

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Thereafter, when the unencumbered balance in the appropriation for emergency deer feeding and wild cervidae health management exceeds ~~$1,500,000~~ $2,500,000 at the end of a fiscal year, the unencumbered balance in excess of ~~$1,500,000~~ $2,500,000 is canceled and available for deer and bear management programs and computerized licensing.

Sec. 52. Minnesota Statutes 2002, section 97A.075, subdivision 2, is amended to read:

Subd. 2. [MINNESOTA MIGRATORY WATERFOWL STAMP.] (a) Ninety percent of the revenue from the Minnesota migratory waterfowl stamps must be credited to the waterfowl habitat improvement account. Money in the account may be used only for:

(1) development of wetlands and lakes in the state and designated waterfowl management lakes for maximum migratory waterfowl production including habitat evaluation, the construction of dikes, water control structures and impoundments, nest cover, rough fish barriers, acquisition of sites and facilities necessary for development and management of existing migratory waterfowl habitat and the designation of waters under section 97A.101;

(2) management of migratory waterfowl;

(3) development, restoration, maintenance, or preservation of migratory waterfowl habitat; ~~and~~

(4) acquisition of and access to structure sites; and

(5) the promotion of waterfowl habitat development and maintenance, including promotion and evaluation of government farm program benefits for waterfowl habitat.

(b) Money in the account may not be used for costs unless they are directly related to a specific parcel of land or body of water under paragraph (a), clause (1), (3), or (4), or (5), or to specific management activities under paragraph (a), clause (2).

Sec. 53. Minnesota Statutes 2002, section 97A.075, subdivision 4, is amended to read:

Subd. 4. [PHEASANT STAMP.] (a) Ninety percent of the revenue from pheasant stamps must be credited to the pheasant habitat improvement account. Money in the account may be used only for:

(1) the development, restoration, and maintenance of suitable habitat for ringnecked pheasants on public and private land including the establishment of nesting cover, winter cover, and reliable food sources;

(2) reimbursement of landowners for setting aside lands for pheasant habitat;

(3) reimbursement of expenditures to provide pheasant habitat on public and private land; ~~and~~

(4) the promotion of pheasant habitat development and maintenance, including promotion and evaluation of government farm program benefits for pheasant habitat; and

(5) the acquisition of lands suitable for pheasant habitat management and public hunting.

(b) Money in the account may not be used for:

(1) costs unless they are directly related to a specific parcel of land under paragraph (a), ~~clauses~~ clause (1) to, (3), or (5), or to specific promotional or evaluative activities under paragraph (a), clause (4); or

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(2) any personnel costs, except that prior to July 1, 2009, personnel may be hired to provide technical and promotional assistance for private landowners to implement conservation provisions of state and federal programs.

Sec. 54. Minnesota Statutes 2002, section 97A.105, subdivision 1, is amended to read:

Subdivision 1. [LICENSE REQUIREMENTS.] (a) A person may breed and propagate fur-bearing animals, game birds, bear, ~~moose, elk, caribou,~~ or mute swans~~, or deer~~ only on privately owned or leased land and after obtaining a license. Any of the permitted animals on a game farm may be sold to other licensed game farms. "Privately owned or leased land" includes waters that are shallow or marshy, are not actually navigable, and are not of substantial beneficial public use. Before an application for a license is considered, the applicant must enclose the area to sufficiently confine the animals to be raised in a manner approved by the commissioner. A license may be granted only if the commissioner finds the application is made in good faith with intention to actually carry on the business described in the application and the commissioner determines that the facilities are adequate for the business.

(b) A person may purchase live game birds or their eggs without a license if the birds or eggs, or birds hatched from the eggs, are released into the wild, consumed, or processed for consumption within one year after they were purchased or hatched. This paragraph does not apply to the purchase of migratory waterfowl or their eggs.

[EFFECTIVE DATE.] This section is effective January 1, 2004.

Sec. 55. Minnesota Statutes 2002, section 97A.401, subdivision 3, is amended to read:

Subd. 3. [TAKING, POSSESSING, AND TRANSPORTING WILD ANIMALS FOR CERTAIN PURPOSES.] (a) Except as provided in paragraph (b), special permits may be issued without a fee to take, possess, and transport wild animals as pets and for scientific, educational, rehabilitative, wildlife disease prevention and control, and exhibition purposes. The commissioner shall prescribe the conditions for taking, possessing, transporting, and disposing of the wild animals.

(b) A special permit may not be issued to take or possess wild or native deer for exhibition or, propagation, or as pets.

~~(c) The commissioner shall establish criteria for issuing special permits for persons to possess wild and native deer as pets.~~

Sec. 56. Minnesota Statutes 2002, section 97A.441, subdivision 7, is amended to read:

Subd. 7. [OWNERS OR TENANTS OF AGRICULTURAL LAND.] (a) The commissioner may issue, without a fee, a license to take an antlerless deer to a person who is an owner or tenant and is living and actively farming on at least 80 acres of agricultural land, as defined in section 97B.001, in deer permit areas that have deer archery licenses to take additional deer under section 97B.301, subdivision 4. A person may receive only one license per year under this subdivision. For properties with coowners or cotenants, only one coowner or cotenant may receive a license under this subdivision per year. The license issued under this subdivision is restricted to the land owned or leased by the holder of the license within the permit area where the qualifying land is located. The holder of the license may transfer the license to the holder's spouse or dependent. Notwithstanding sections 97A.415, subdivision 1, and 97B.301, subdivision 2, the holder of the license may purchase an additional license for taking deer and may take an additional deer under that license.

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(b) A person who obtains a license under paragraph (a) must allow public deer hunting on their land during that deer hunting season, with the exception of the first Saturday and Sunday during the deer hunting season applicable to the license issued under section 97A.475, subdivision 2, ~~clause~~ clauses (4) and (13).

Sec. 57. Minnesota Statutes 2002, section 97A.441, is amended by adding a subdivision to read:

Subd. 10. [TAKING WILD ANIMALS FOR WILDLIFE DISEASE PREVENTION AND CONTROL.] The commissioner may issue, without a fee, licenses to take wild animals for the purposes of wildlife disease prevention and control.

Sec. 58. Minnesota Statutes 2002, section 97A.475, subdivision 2, is amended to read:

Subd. 2. [RESIDENT HUNTING.] Fees for the following licenses, to be issued to residents only, are:

(1) for persons age 18 or over and under age 65 to take small game, ~~$12~~ $12.50;

(2) for persons ~~age~~ ages 16 and 17 and age 65 or over, $6 to take small game;

(3) to take turkey, $18;

(4) for persons age 16 or over to take deer with firearms, ~~$25~~ $26;

(5) for persons age 16 or over to take deer by archery, ~~$25~~ $26;

(6) to take moose, for a party of not more than six persons, $310;

(7) to take bear, $38;

(8) to take elk, for a party of not more than two persons, $250;

(9) to take antlered deer in more than one zone, ~~$50~~ $52;

(10) to take Canada geese during a special season, $4;

(11) to take two deer throughout the state in any open deer season, except as restricted under section 97B.305, ~~$75~~ $78; ~~and~~

(12) to take prairie chickens, $20;

(13) for persons at least age 12 and under age 16 to take deer with firearms, $13; and

(14) for persons at least age 12 and under age 16 to take deer by archery, $13.

[EFFECTIVE DATES.] Clauses (4), (5), (9), (11), (13), and (14), are effective August 1, 2003. Clauses (1) and (2) are effective March 1, 2004.

Sec. 59. Minnesota Statutes 2002, section 97A.475, subdivision 3, is amended to read:

Subd. 3. [NONRESIDENT HUNTING.] Fees for the following licenses, to be issued to nonresidents, are:

(1) to take small game, $73;

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(2) to take deer with firearms, ~~$125~~ $135;

(3) to take deer by archery, ~~$125~~ $135;

(4) to take bear, $195;

(5) to take turkey, $73;

(6) to take raccoon, bobcat, fox, coyote, or lynx, $155;

(7) to take antlered deer in more than one zone, ~~$250~~ $270; and

(8) to take Canada geese during a special season, $4.

[EFFECTIVE DATE.] This section is effective August 1, 2003.

Sec. 60. Minnesota Statutes 2002, section 97A.475, subdivision 4, is amended to read:

Subd. 4. [SMALL GAME SURCHARGE.] Fees for annual licenses to take small game must be increased by a surcharge of $4 $6.50. An additional commission may not be assessed on the surcharge and ~~this must be stated on the back of the license with~~ the following statement must be included in the annual small game hunting regulations: "This $4 $6.50 surcharge is being paid by hunters for the acquisition and development of wildlife lands."

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 61. Minnesota Statutes 2002, section 97A.475, subdivision 5, is amended to read:

Subd. 5. [HUNTING STAMPS.] Fees for the following stamps and stamp validations are:

(1) migratory waterfowl stamp, $5 $7.50;

(2) pheasant stamp, $5 $7.50; and

(3) turkey stamp validation, $5.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 62. Minnesota Statutes 2002, section 97A.475, subdivision 10, is amended to read:

Subd. 10. [TROUT AND SALMON STAMP VALIDATION.] The fee for a trout and salmon stamp validation is ~~$8.50~~ $10.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 63. Minnesota Statutes 2002, section 97A.475, subdivision 15, is amended to read:

Subd. 15. [FISHING GUIDES.] The fee for a license to operate a charter boat and guide anglers on Lake Superior or the St. Louis river estuary is:

(1) for a resident, ~~$35~~ $125;

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(2) for a nonresident, ~~$140~~ $400; or

(3) if another state charges a Minnesota resident a fee greater than ~~$140~~ $440 for a Lake Superior or St. Louis river estuary fishing guide license in that state, the nonresident fee for a resident of that state is that greater fee.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 64. Minnesota Statutes 2002, section 97A.475, subdivision 26, is amended to read:

Subd. 26. [MINNOW DEALERS.] The fees for the following licenses are:

(1) minnow dealer, ~~$100~~ $310;

(2) minnow dealer's vehicle, $15;

(3) exporting minnow dealer, ~~$350~~ $700; and

(4) exporting minnow dealer's vehicle, $15.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 65. Minnesota Statutes 2002, section 97A.475, subdivision 27, is amended to read:

Subd. 27. [MINNOW RETAILERS.] The fees for the following licenses, to be issued to residents and nonresidents, are:

(1) minnow retailer, ~~$15~~ $47; and

(2) minnow retailer's vehicle, $15.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 66. Minnesota Statutes 2002, section 97A.475, subdivision 28, is amended to read:

Subd. 28. [NONRESIDENT MINNOW HAULERS.] The fees for the following licenses, to be issued to nonresidents, are:

(1) exporting minnow hauler, ~~$675~~ $1,000; and

(2) exporting minnow hauler's vehicle, $15.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 67. Minnesota Statutes 2002, section 97A.475, subdivision 29, is amended to read:

Subd. 29. [PRIVATE FISH HATCHERIES.] The fees for the following licenses to be issued to residents and nonresidents are:

(1) for a private fish hatchery, with annual sales under $200, ~~$35~~ $70;

(2) for a private fish hatchery, with annual sales of $200 or more, ~~$70~~ $210; and

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(3) to take sucker eggs from public waters for a private fish hatchery, ~~$210~~ $400, plus $4 $6 for each quart in excess of 100 quarts.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 68. Minnesota Statutes 2002, section 97A.475, subdivision 30, is amended to read:

Subd. 30. [COMMERCIAL NETTING OF FISH.] The fees to take commercial fish are:

(1) commercial license fees:

(i) for residents and nonresidents seining and netting in inland waters, ~~$90~~ $120;

(ii) for residents netting in Lake Superior, ~~$50~~ $120;

(iii) for residents netting in Lake of the Woods, Rainy, Namakan, and Sand Point lakes, ~~$50~~ $120;

(iv) for residents seining in the Mississippi River from St. Anthony Falls to the St. Croix River junction, ~~$50~~ $120;

(v) for residents seining, netting, and set lining in Wisconsin boundary waters from Lake St. Croix to the Iowa border, ~~$50~~ $120; and

(vi) for a resident apprentice license, ~~$25~~ $55; and

(2) commercial gear fees:

(i) for each gill net in Lake Superior, Wisconsin boundary waters, and Namakan Lake, ~~$3.50~~ $5 per 100 feet of net;

(ii) for each seine in inland waters, on the Mississippi River as described in section 97C.801, subdivision 2, and in Wisconsin boundary waters, $7 $9 per 100 feet;

(iii) for each commercial hoop net in inland waters, ~~$1.25~~ $2;

(iv) for each submerged fyke, trap, and hoop net in Lake Superior, St. Louis Estuary, Lake of the Woods, and Rainy, Namakan, and Sand Point lakes, and for each pound net in Lake Superior, ~~$15~~ $20;

(v) for each stake and pound net in Lake of the Woods, ~~$60~~ $90; and

(vi) for each set line in the Wisconsin boundary waters, ~~$20~~ $45.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 69. Minnesota Statutes 2002, section 97A.475, subdivision 38, is amended to read:

Subd. 38. [FISH BUYERS.] The fees for licenses to buy fish from commercial fishing licensees to be issued residents and nonresidents are:

(1) for Lake Superior fish bought for sale to retailers, ~~$70~~ $150;

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(2) for Lake Superior fish bought for sale to consumers, ~~$15~~ $35;

(3) for Lake of the Woods, Namakan, Sand Point, and Rainy Lake fish bought for sale to retailers, ~~$140~~ $300; and

(4) for Lake of the Woods, Namakan, Sand Point, and Rainy Lake fish bought for shipment only on international boundary waters, ~~$15~~ $35.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 70. Minnesota Statutes 2002, section 97A.475, subdivision 39, is amended to read:

Subd. 39. [FISH PACKER.] The fee for a license to prepare dressed game fish for transportation or shipment is ~~$20~~ $40.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 71. Minnesota Statutes 2002, section 97A.475, subdivision 40, is amended to read:

Subd. 40. [FISH VENDORS.] The fee for a license to use a motor vehicle to sell fish is ~~$35~~ $70.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 72. Minnesota Statutes 2002, section 97A.475, subdivision 42, is amended to read:

Subd. 42. [FROG DEALERS.] The fee for the licenses to deal in frogs that are to be used for purposes other than bait are:

(1) for a resident to purchase, possess, and transport frogs, ~~$100~~ $220;

(2) for a nonresident to purchase, possess, and transport frogs, ~~$280~~ $550; and

(3) for a resident to take, possess, transport, and sell frogs, ~~$15~~ $35.

[EFFECTIVE DATE.] This section is effective March 1, 2004.

Sec. 73. Minnesota Statutes 2002, section 97A.475, is amended by adding a subdivision to read:

Subd. 45. [CAMP RIPLEY ARCHERY DEER HUNT.] The application fee for the Camp Ripley archery deer hunt is $8.

Sec. 74. Minnesota Statutes 2002, section 97A.485, subdivision 6, is amended to read:

Subd. 6. [LICENSES TO BE SOLD AND ISSUING FEES.] (a) Persons authorized to sell licenses under this section must ~~sell~~ issue the following licenses for the license fee and the following issuing fees:

(1) to take deer or bear with firearms and by archery, the issuing fee is $1;

(2) Minnesota sporting, the issuing fee is $1; and

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(3) to take small game, for a person under age 65 to take fish by angling or for a person of any age to take fish by spearing, and to trap fur-bearing animals, the issuing fee is $1;

(4) for a trout and salmon stamp that is not issued simultaneously with an angling or sporting license, an issuing fee of 50 cents may be charged at the discretion of the authorized seller; ~~and~~

(5) for stamps other than a trout and salmon stamp, and for a special season Canada goose license, there is no fee; and

(6) for licenses issued without a fee under section 97A.441, there is no fee.

(b) An issuing fee may not be collected for issuance of a trout and salmon stamp if a stamp validation is issued simultaneously with the related angling or sporting license. Only one issuing fee may be collected when selling more than one trout and salmon stamp in the same transaction after the end of the season for which the stamp was issued.

(d) The commissioner shall collect the issuing fee on licenses sold by the commissioner.

(e) A license, except stamps, must state the amount of the issuing fee and that the issuing fee is kept by the seller as a commission for selling the licenses.

(f) For duplicate licenses, the issuing fees are:

(1) for licenses to take big game, 75 cents; and

(2) for other licenses, 50 cents.

Sec. 75. Minnesota Statutes 2002, section 97A.505, is amended by adding a subdivision to read:

Subd. 8. [IMPORTATION OF HUNTER-HARVESTED CERVIDAE.] Importation into Minnesota of hunter-harvested cervidae carcasses is prohibited except for cut and wrapped meat, quarters or other portions of meat with no part of the spinal column or head attached, antlers, hides, teeth, finished taxidermy mounts, and antlers attached to skull caps that are cleaned of all brain tissue.

Sec. 76. Minnesota Statutes 2002, section 97A.505, is amended by adding a subdivision to read:

Subd. 9. [POSSESSION OF LIVE CERVIDAE.] A person may not possess live cervidae, except as authorized in sections 17.451 and 17.452 or 97A.401.

[EFFECTIVE DATE.] This section is effective January 1, 2004.

Sec. 77. Minnesota Statutes 2002, section 97B.311, is amended to read:

97B.311 [DEER SEASONS AND RESTRICTIONS.]

(a) The commissioner may, by rule, prescribe restrictions and designate areas where deer may be taken, including hunter selection criteria for special hunts established under section 97A.401, subdivision 4. The commissioner may, by rule, prescribe the open seasons for deer within the following periods:

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(1) taking with firearms, other than muzzle-loading firearms, between November 1 and December 15;

(2) taking with muzzle-loading firearms between September 1 and December 31; and

(3) taking by archery between September 1 and December 31.

(b) Notwithstanding paragraph (a), the commissioner may establish special seasons within designated areas ~~between September 1 and January 15~~ at any time of year.

Sec. 78. Minnesota Statutes 2002, section 103B.231, subdivision 3a, is amended to read:

Subd. 3a. [PRIORITY SCHEDULE.] (a) The board of water and soil resources in consultation with the state review agencies and the metropolitan council ~~shall~~ may develop a priority schedule for the revision of plans required under this chapter.

(b) The prioritization should be based on but not be limited to status of current plan, scheduled revision dates, anticipated growth and development, existing and potential problems, and regional water quality goals and priorities.

(c) The schedule will be used by the board of water and soil resources in consultation with the state review agencies and the metropolitan council to direct watershed management organizations of when they will be required to revise their plans.

(d) Upon notification from the board of water and soil resources that a revision of a plan is required, a watershed management organization shall have 24 months from the date of notification to revise and submit a plan for review.

~~(e)~~ In the event that a plan expires prior to notification from the board of water and soil resources under this section, the existing plan, authorities, and official controls of a watershed management organization shall remain in full force and effect until a revision is approved.

~~(f) A one-year extension to submit a revised plan may be granted by the board.~~

~~(g)~~ (e) Watershed management organizations submitting plans and draft plan amendments for review prior to the board's priority review schedule, may proceed to adopt and implement the plan revisions without formal board approval if the board fails to adjust its priority review schedule for plan review, and commence its statutory review process within 45 days of submittal of the plan revision or amendment.

Sec. 79. Minnesota Statutes 2002, section 103B.305, subdivision 3, is amended to read:

Sec. 80. Minnesota Statutes 2002, section 103B.305, is amended by adding a subdivision to read:

Subd. 7a. [PLAN AUTHORITY.] "Plan authority" means those local government units coordinating planning under sections 103B.301 to 103B.335.

Sec. 81. Minnesota Statutes 2002, section 103B.305, is amended by adding a subdivision to read:

Subd. 7b. [PRIORITY CONCERNS.] "Priority concerns" means issues, resources, subwatersheds, or demographic areas that are identified as a priority by the plan authority.

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Sec. 82. Minnesota Statutes 2002, section 103B.305, is amended by adding a subdivision to read:

Subd. 7c. [PRIORITY CONCERNS SCOPING DOCUMENT.] "Priority concerns scoping document" means the list of the chosen priority concerns and a detailed account of how those concerns were identified and chosen.

Sec. 83. Minnesota Statutes 2002, section 103B.305, is amended by adding a subdivision to read:

Subd. 8a. [STATE REVIEW AGENCIES.] "State review agencies" means the board of water and soil resources, the department of agriculture, the department of health, the department of natural resources, the pollution control agency, and other agencies granted state review status by a resolution of the board.

Sec. 84. Minnesota Statutes 2002, section 103B.311, subdivision 1, is amended to read:

Subdivision 1. [COUNTY DUTIES.] Each county is encouraged to develop and implement a ~~comprehensive~~ local water management plan. Each county that develops and implements a plan has the duty and authority to:

(1) prepare and adopt a ~~comprehensive~~ local water management plan that meets the requirements of this section and section 103B.315;

(2) review water and related land resources plans and official controls submitted by local units of government to assure consistency with the ~~comprehensive~~ local water management plan; and

(3) exercise any and all powers necessary to assure implementation of ~~comprehensive~~ local water management plans.

Sec. 85. Minnesota Statutes 2002, section 103B.311, subdivision 2, is amended to read:

Subd. 2. [DELEGATION.] The county is responsible for preparing, adopting, and assuring implementation of the ~~comprehensive~~ local water management plan, but may delegate all or part of the preparation of the plan to a local unit of government, a regional development commission, or a resource conservation and development committee. The county may not delegate authority for the exercise of eminent domain, taxation, or assessment to a local unit of government that does not possess those powers.

Sec. 86. Minnesota Statutes 2002, section 103B.311, subdivision 3, is amended to read:

Subd. 3. [COORDINATION.] (a) To assure the coordination of efforts of all local units of government within a county during the preparation and implementation of a ~~comprehensive~~ local water management plan, each county intending to adopt a plan shall conduct meetings with other local units of government and may execute agreements with other local units of government establishing the responsibilities of each unit during the preparation and implementation of the ~~comprehensive~~ local water management plan.

(b) Each county intending to adopt a plan shall coordinate its planning program with contiguous counties. Before meeting with local units of government, a county board shall notify the county boards of each county contiguous to it that the county is about to begin preparing its ~~comprehensive~~ local water management plan and is encouraged to request and hold a joint meeting with the contiguous county boards to consider the planning process.

Sec. 87. Minnesota Statutes 2002, section 103B.311, subdivision 4, is amended to read:

Subd. 4. [WATER PLAN REQUIREMENTS.] (a) A ~~comprehensive~~ local water management plan must:

(1) cover the entire area within a county;

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(2) address water problems in the context of watershed units and groundwater systems;

(3) be based upon principles of sound hydrologic management of water, effective environmental protection, and efficient management;

(4) be consistent with ~~comprehensive~~ local water management plans prepared by counties and watershed management organizations wholly or partially within a single watershed unit or groundwater system; and

(5) the ~~comprehensive~~ local water management plan must specify the period covered by the ~~comprehensive~~ local water management plan and must extend at least five years but no more than ten years from the date the board approves the ~~comprehensive~~ local water management plan. ~~Comprehensive~~ Local water management plans that contain revision dates inconsistent with this section must comply with that date, provided it is not more than ten years beyond the date of board approval. A two-year extension of the revision date of a ~~comprehensive~~ local water management plan may be granted by the board, provided no projects are ordered or commenced during the period of the extension.

(b) Existing water and related land resources plans, including plans related to agricultural land preservation programs developed pursuant to chapter 40A, must be fully utilized in preparing the ~~comprehensive~~ local water management plan. Duplication of the existing plans is not required.

Sec. 88. [103B.312] [IDENTIFYING PRIORITY CONCERNS.]

Each priority concerns scoping document must contain:

(1) the list of proposed priority concerns the plan will address; and

(2) a description of how and why the priority concerns were chosen, including:

(i) a list of all public and internal forums held to gather input regarding priority concerns, including the dates they were held, a list of participants and affiliated organizations, a summary of the proceedings, and supporting data;

(ii) the process used to locally coordinate and resolve differences between the plan's priority concerns and other state, local, and regional concerns; and

(iii) a list of issues identified by the stakeholders but not selected as priority concerns, why they were not included in the list of priority concerns, and a brief description of how the concerns may be addressed or delegated to other partnering entities.

Sec. 89. [103B.313] [PLAN DEVELOPMENT.]

Subdivision 1. [NOTICE OF PLAN REVISION.] The local water management plan authority shall send a notice to local government units partially or wholly within the planning jurisdiction, adjacent counties, and state review agencies of their intent to revise the local water management plan. The notice of a plan revision must include an invitation for all recipients to submit priority concerns they wish to see the plan address.

Subd. 2. [SUBMITTING PRIORITY CONCERNS TO PLANNING AUTHORITY.] Local governments and state review agencies must submit the priority concerns they want the plan to address to the plan authority within 45 days of receiving the notice defined in subdivision 1 or within an otherwise agreed-upon time frame.

Subd. 3. [PUBLIC INFORMATION MEETING.] Before submitting the priority concerns scoping document to the board, the plan authority shall publish a legal notice for and conduct a public information meeting.

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Subd. 4. [SUBMITTAL OF PRIORITY CONCERNS SCOPING DOCUMENT TO BOARD.] The plan authority shall send the scoping document to all state review agencies for review and comment. State review agencies shall provide comments on the plan outline to the board within 30 days of receipt.

Subd. 5. [BOARD REVIEW OF THE PRIORITY CONCERNS SCOPING DOCUMENT.] The board shall review the scoping document and the comments submitted in accordance with this subdivision. The board shall provide comments to the local plan authority within 60 days of receiving the scoping document, or after the next regularly scheduled board meeting, whichever is later. No local water management plan may be approved pursuant to section 103B.315 without addressing items communicated in the board comments to the plan authority. The plan authority may request that resolution of unresolved issues be addressed pursuant to board policy defined in section 103B.345.

Subd. 6. [REQUESTS FOR EXISTING AGENCY INFORMATION RELEVANT TO PRIORITY CONCERNS SCOPING DOCUMENT.] The state review agencies shall, upon request from the local government, provide existing plans, reports, and data analysis related to priority concerns to the plan author within 60 days from the date of the request or within an otherwise agreed upon time frame.

Sec. 90. [103B.314] [CONTENTS OF PLAN.]

Subdivision 1. [EXECUTIVE SUMMARY.] Each plan must have an executive summary, including:

(1) the purpose of the local water management plan;

(2) a description of the priority concerns to be addressed by the plan;

(3) a summary of goals and actions to be taken along with the projected total cost of the implementation program;

(4) a summary of the consistency of the plan with other pertinent local, state, and regional plans and controls, and where inconsistencies are noted; and

(5) a summary of recommended amendments to other plans and official controls to achieve consistency.

Subd. 2. [ASSESSMENT OF PRIORITY CONCERNS.] For each priority concern defined pursuant to section 103B.312, clause (1), the plan shall analyze relevant data, plans, and policies provided by agencies consistent with section 103B.313, subdivision 6, and describe the magnitude of the concern, including how the concern is impacting or changing the local land and water resources.

Subd. 3. [GOALS AND OBJECTIVES ADDRESSING PRIORITY CONCERNS.] Each plan must contain specific measurable goals and objectives relating to the priority concerns and other state, regional, or local concerns. The goals and objectives must coordinate and attempt to resolve conflict with city, county, regional, or state goals and policies.

Subd. 4. [IMPLEMENTATION PROGRAM FOR PRIORITY CONCERNS.] (a) For the measurable goals identified in subdivision 3, each plan must include an implementation program that includes the items described in paragraphs (b) to (e).

(b) An implementation program may include actions involving, but not limited to, data collection programs, educational programs, capital improvement projects, project feasibility studies, enforcement strategies, amendments to existing official controls, and adoption of new official controls. If the local government finds that no actions are necessary to address the goals and objectives identified in subdivision 3 it must explain why actions are not needed. Staff and financial resources available or needed to carry out the local water management plan must be stated.

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(c) The implementation schedule must state the time in which each of the actions contained in the implementation program will be taken.

(d) If a local government unit has made any agreement for the implementation of the plan or portions of a plan by another local unit of government, that local unit must be specified, the responsibility indicated, and a description included indicating how and when the implementation will happen.

(e) If capital improvement projects are proposed to implement the local water management plan, the projects must be described in the plan. The description of a proposed capital improvement project must include the following information:

(1) the physical components of the project, including their approximate size, configuration, and location;

(2) the purposes of the project and relationship to the objectives in the plan;

(3) the proposed schedule for project construction;

(4) the expected federal, state, and local costs;

(5) the types of financing proposed, such as special assessments, ad valorem taxes, and grants; and

(6) the sources of local financing proposed.

Subd. 5. [OTHER WATER MANAGEMENT RESPONSIBILITIES AND ACTIVITIES COORDINATED BY PLAN.] The plan must also describe the actions that will be taken to carry out the responsibilities or activities, identify the lead and supporting organizations or government units that will be involved in carrying out the action, and estimate the cost of each action.

Subd. 6. [AMENDMENTS.] The plan authority may initiate an amendment to the local water management plan by submitting a petition to the board and sending copies of the proposed amendment and the date of the public hearing to the following entities for review: local government units defined in section 103B.305, subdivision 5, that are within the plan's jurisdiction; and the state review agencies.

After the public hearing the board shall review the amendment pursuant to section 103B.315, subdivision 5, paragraphs (b) and (c). The amendment becomes part of the local water management plan after being approved by the board. The board must send the order and the approved amendment to the entities that received the proposed amendment and notice of the public hearing.

Sec. 91. Minnesota Statutes 2002, section 103B.315, subdivision 4, is amended to read:

Subd. 4. [PUBLIC HEARING.] The county board shall conduct a public hearing on the ~~comprehensive~~ local water management plan pursuant to section 375.51 ~~after the 60-day period for local review and comment is completed but before submitting it to the state for review~~.

Sec. 92. Minnesota Statutes 2002, section 103B.315, subdivision 5, is amended to read:

Subd. 5. [STATE REVIEW.] (a) After conducting the public hearing but before final adoption, the county board must submit its ~~comprehensive~~ local water management plan, all written comments received on the plan, a record of the public hearing under subdivision 4, and a summary of changes incorporated as a result of the review process to the board for review. The board shall complete the review within 90 days after receiving a ~~comprehensive~~ local water management plan and supporting documents. The board shall consult with the departments of agriculture, health, and natural resources; the pollution control agency; the environmental quality board; and other appropriate state agencies during the review.

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(b) The board may disapprove a ~~comprehensive~~ local water management plan if the board determines the plan is not consistent with state law. If a plan is disapproved, the board shall provide a written statement of its reasons for disapproval. A disapproved ~~comprehensive~~ local water management plan must be revised by the county board and resubmitted for approval by the board within 120 days after receiving notice of disapproval of the ~~comprehensive~~ local water management plan, unless the board extends the period for good cause. ~~The decision of the board to disapprove the plan may be appealed by the county to district court.~~

(c) If the local government unit disagrees with the board's decision to disapprove the plan, it may, within 60 days, initiate mediation through the board's informal dispute resolution process as established pursuant to section 103B.345, subdivision 1. A local government unit may appeal disapproval to the court of appeals. A decision of the board on appeal is subject to judicial review under sections 14.63 to 14.69.

Sec. 93. Minnesota Statutes 2002, section 103B.315, subdivision 6, is amended to read:

Subd. 6. [ADOPTION AND IMPLEMENTATION.] A county board shall adopt and begin implementation of its ~~comprehensive~~ local water management plan within 120 days after receiving notice of approval of the plan from the board.

Sec. 94. Minnesota Statutes 2002, section 103B.321, subdivision 1, is amended to read:

Subdivision 1. [GENERAL.] The board shall:

(1) develop guidelines for the contents of ~~comprehensive~~ local water management plans that provide for a flexible approach to meeting the different water and related land resources needs of counties and watersheds across the state;

(2) coordinate assistance of state agencies to counties and other local units of government involved in preparation of ~~comprehensive~~ local water management plans, including identification of pertinent data and studies available from the state and federal government;

(3) conduct an active program of information and education concerning the requirements and purposes of sections 103B.301 to 103B.355 in conjunction with the association of Minnesota counties;

(4) determine contested cases under section 103B.345;

(5) establish a process for review of ~~comprehensive~~ local water management plans that assures the plans are consistent with state law; and

(6) ~~report to the house of representatives and senate committees with jurisdiction over the environment, natural resources, and agriculture as required by section 103B.351; and~~

~~(7)~~ make grants to counties for ~~comprehensive~~ local water management planning, implementation of priority actions identified in approved plans, and sealing of abandoned wells.

Sec. 95. Minnesota Statutes 2002, section 103B.321, subdivision 2, is amended to read:

Subd. 2. [RULEMAKING.] The board ~~shall~~ may adopt rules to implement sections 103B.301 to 103B.355.

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Sec. 96. Minnesota Statutes 2002, section 103B.325, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENT.] Local units of government shall amend existing water and related land resources plans and official controls as necessary to conform them to the applicable, approved ~~comprehensive~~ local water management plan following the procedures in this section.

Sec. 97. Minnesota Statutes 2002, section 103B.325, subdivision 2, is amended to read:

Subd. 2. [PROCEDURE.] Within 90 days after local units of government are notified by the county board of the adoption of a ~~comprehensive~~ local water management plan or of adoption of an amendment to a comprehensive water plan, the local units of government exercising water and related land resources planning and regulatory responsibility for areas within the county must submit existing water and related land resources plans and official controls to the county board for review. The county board shall identify any inconsistency between the plans and controls and the ~~comprehensive~~ local water management plan and shall recommend the amendments necessary to bring local plans and official controls into conformance with the ~~comprehensive~~ local water management plan.

Sec. 98. Minnesota Statutes 2002, section 103B.331, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY.] When an approved ~~comprehensive~~ local water management plan is adopted the county has the authority specified in this section.

Sec. 99. Minnesota Statutes 2002, section 103B.331, subdivision 2, is amended to read:

Subd. 2. [REGULATION OF WATER AND LAND RESOURCES.] The county may regulate the use and development of water and related land resources within incorporated areas when one or more of the following conditions exists:

(1) the municipality does not have a local water and related land resources plan or official controls consistent with the ~~comprehensive~~ local water management plan;

(2) a municipal action granting a variance or conditional use would result in an action inconsistent with the ~~comprehensive~~ local water management plan;

(3) the municipality has authorized the county to require permits for the use and development of water and related land resources; or

(4) a state agency has delegated the administration of a state permit program to the county.

Sec. 100. Minnesota Statutes 2002, section 103B.331, subdivision 3, is amended to read:

Subd. 3. [ACQUISITION OF PROPERTY; ASSESSMENT OF COSTS.] A county may:

(1) acquire in the name of the county, by condemnation under chapter 117, real and personal property found by the county board to be necessary for the implementation of an approved ~~comprehensive~~ local water management plan;

(2) assess the costs of projects necessary to implement the ~~comprehensive~~ local water management plan undertaken under sections 103B.301 to 103B.355 upon the property benefited within the county in the manner provided for municipalities by chapter 429;

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(3) charge users for services provided by the county necessary to implement the ~~comprehensive~~ local water management plan; and

(4) establish one or more special taxing districts within the county and issue bonds for the purpose of financing capital improvements under sections 103B.301 to 103B.355.

Sec. 101. Minnesota Statutes 2002, section 103B.3363, subdivision 3, is amended to read:

Subd. 3. [COMPREHENSIVE LOCAL WATER MANAGEMENT PLAN.] "Comprehensive local water management plan," ~~means~~ "comprehensive water plan," "local water plan," and "local water management plan" mean a county water plan authorized under section 103B.311, a watershed management plan required under section 103B.231, a watershed management plan required under section 103D.401 or 103D.405, or a county groundwater plan authorized under section 103B.255.

Sec. 102. Minnesota Statutes 2002, section 103B.3369, subdivision 2, is amended to read:

Subd. 2. [ESTABLISHMENT.] A Local Water Resources Protection and Management Program is established. The board ~~shall~~ may provide financial assistance to ~~counties for~~ local units of government for activities that protect or manage water and related land quality. The activities include planning, zoning, official controls, and other activities to implement ~~comprehensive~~ local water management plans.

Sec. 103. Minnesota Statutes 2002, section 103B.3369, subdivision 4, is amended to read:

Subd. 4. [CONTRACTS ~~WITH LOCAL GOVERNMENTS~~.] A ~~county~~ local unit of government may contract ~~with other appropriate local units of government~~ to implement programs. An explanation of the program responsibilities proposed to be contracted ~~with other local units of government~~ must accompany grant requests. A ~~county~~ local unit of government that contracts ~~with other local units of government~~ is responsible for ensuring that state funds are properly expended and for providing an annual report to the board describing expenditures of funds and program accomplishments.

Sec. 104. Minnesota Statutes 2002, section 103B.3369, subdivision 5, is amended to read:

Subd. 5. [FINANCIAL ASSISTANCE.] The board may award grants to watershed management organizations in the seven-county metropolitan area or counties to carry out water resource protection and management programs identified as priorities in comprehensive local water plans. Grants may be used to employ persons and to obtain and use information necessary to:

(1) develop comprehensive local water plans under sections 103B.255 and 103B.311 that have not received state funding for water resources planning as provided for in Laws 1987, chapter 404, section 30, subdivision 5, clause (a);

~~(2) revise comprehensive local water plans under section 103B.201; and~~

~~(3) implement comprehensive local water plans.~~

A base grant ~~shall~~ may be awarded to a county that levies a water implementation tax at a rate, which shall be determined by the board. The minimum amount of the water implementation tax shall be a tax rate times the adjusted net tax capacity of the county for the preceding year. The rate shall be the rate, rounded to the nearest .001 of a percent, that, when applied to the adjusted net tax capacity for all counties, raises the amount of $1,500,000. The base grant will be in an amount equal to $37,500 less the amount raised by that levy. If the amount necessary to implement the local water plan for the county is less than $37,500, the amount of the base grant shall be the amount that, when added to the levy amount, equals the amount required to implement the plan. For counties where the tax rate generates an amount equal to or greater than $18,750, the base grant shall be in an amount equal to $18,750.

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Sec. 105. Minnesota Statutes 2002, section 103B.3369, subdivision 6, is amended to read:

Subd. 6. [LIMITATIONS.] (a) Grants provided to implement programs under this section must be reviewed by the state agency having statutory program authority to assure compliance with minimum state standards. At the request of the state agency commissioner, the board shall revoke the portion of a grant used to support a program not in compliance.

(b) Grants provided to develop or revise ~~comprehensive~~ local water management plans may not be awarded for a time longer than two years.

(c) A ~~county~~ local unit of government may not request or be awarded grants for project implementation unless a ~~comprehensive~~ local management water plan has been adopted.

Sec. 106. Minnesota Statutes 2002, section 103B.355, is amended to read:

103B.355 [APPLICATION.]

Sections 103B.301 to 103B.355 do not apply in areas subject to the requirements of sections 103B.201 to 103B.255 under section 103B.231, subdivision 1, and in areas covered by an agreement under section 103B.231, subdivision 2, except as otherwise provided in ~~sections~~ section 103B.311, subdivision 4, clause (4)~~; and 103B.315, subdivisions 1, clauses (3) and (4), and 2, clause (b)~~.

Sec. 107. Minnesota Statutes 2002, section 103D.341, subdivision 2, is amended to read:

Subd. 2. [PROCEDURE.] (a) Rules of the watershed district must be adopted or amended by a majority vote of the managers, after public notice and hearing. Rules must be signed by the secretary of the board of managers and recorded in the board of managers' official minute book.

(b) Prior to adoption, the proposed rule or amendment to the rule must be submitted to the board for review and comment. The board's review shall be considered advisory. The board shall have 45 days from receipt of the proposed rule or amendment to the rule to provide its comments in writing to the watershed district. Proposed rules or amendments to the rule shall also be noticed for review and comment to all public transportation authorities that have jurisdiction within the watershed district at least 45 days prior to adoption. The public transportation authorities have 45 days from receipt of the proposed rule or amendment to the rule to provide comments in writing to the watershed district.

(c) For each county affected by the watershed district, the managers must publish a notice of hearings and adopted rules in one or more legal newspapers published in the county and generally circulated in the watershed district. The managers must also provide written notice of adopted or amended rules to public transportation authorities that have jurisdiction within the watershed district. The managers must file adopted rules with the county recorder of each county affected by the watershed district and the board.

(d) The managers must mail a copy of the rules to the governing body of each municipality affected by the watershed district.

Sec. 108. Minnesota Statutes 2002, section 103D.345, is amended by adding a subdivision to read:

Subd. 6. [GENERAL PERMITS.] A watershed district may issue general permits for public transportation projects for work on existing roads.

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Sec. 109. Minnesota Statutes 2002, section 103D.405, subdivision 2, is amended to read:

Subd. 2. [REQUIRED TEN-YEAR REVISION.] (a) After ten years and six months from the date that the board approved a watershed management plan or the last revised watershed management plan, the managers must consider the requirements under subdivision 1 and adopt a revised watershed management plan outline and send a copy of the outline to the board.

(b) By 60 days after receiving a revised watershed management plan outline, the board must review it, adopt recommendations regarding the revised watershed management plan outline, and send the recommendations to the managers.

(c) ~~By 120 days~~ After receiving the board's recommendations regarding the revised watershed management plan outline, the managers must complete the revised watershed management plan.

Sec. 110. Minnesota Statutes 2002, section 103D.537, is amended to read:

103D.537 [APPEALS OF RULES, PERMIT DECISIONS, AND ORDERS ~~NOT INVOLVING PROJECTS~~.]

(a) Except as provided in section 103D.535, an interested party may appeal a permit decision or order made by the managers by a declaratory judgment action brought under chapter 555. An interested party may appeal a rule made by the managers by a declaratory judgment action brought under chapter 555 or by appeal to the board. The decision on appeal must be based on the record made in the proceeding before the managers. An appeal of a permit decision or order must be filed within 30 days of the managers' decision.

(b) In addition to the authorities identified in paragraph (a), a public transportation authority may appeal a watershed district permit decision to the board. The board shall, upon request of the public transportation authority, conduct an expedited appeal hearing within 30 days or less from the date of the appeal being accepted.

(c) By January 1, ~~1997~~ 2005, the board shall adopt rules governing appeals to the board under ~~paragraph~~ paragraphs (a) and (b). A decision of the board on appeal is subject to judicial review under sections 14.63 to 14.69. The rules authorized in this paragraph are exempt from the rulemaking provisions of chapter 14 except that section 14.386 applies and the proposed rules must be submitted to the members of senate and house environment and natural resource and transportation policy committees at least 30 days prior to being published in the State Register. The amended rules are effective for two years from the date of publication of the rules in the State Register unless they are superseded by permanent rules.

Sec. 111. Minnesota Statutes 2002, section 103G.005, subdivision 10e, is amended to read:

Subd. 10e. [LOCAL GOVERNMENT UNIT.] "Local government unit" means:

(1) outside of the seven-county metropolitan area, a city council or, county board of commissioners, or a soil and water conservation district or their delegate;

(2) in the seven-county metropolitan area, a city council, a town board under section 368.01, or a watershed management organization under section 103B.211, or a soil and water conservation district or their delegate; and

(3) on state land, the agency with administrative responsibility for the land.

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Sec. 112. Minnesota Statutes 2002, section 103G.222, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENTS.] (a) Wetlands must not be drained or filled, wholly or partially, unless replaced by restoring or creating wetland areas of at least equal public value under a replacement plan approved as provided in section 103G.2242, a replacement plan under a local governmental unit's comprehensive wetland protection and management plan approved by the board under section 103G.2243, or, if a permit to mine is required under section 93.481, under a mining reclamation plan approved by the commissioner under the permit to mine. Mining reclamation plans shall apply the same principles and standards for replacing wetlands by restoration or creation of wetland areas that are applicable to mitigation plans approved as provided in section 103G.2242. Public value must be determined in accordance with section 103B.3355 or a comprehensive wetland protection and management plan established under section 103G.2243. Sections 103G.221 to 103G.2372 also apply to excavation in permanently and semipermanently flooded areas of types 3, 4, and 5 wetlands.

(b) Replacement must be guided by the following principles in descending order of priority:

(1) avoiding the direct or indirect impact of the activity that may destroy or diminish the wetland;

(2) minimizing the impact by limiting the degree or magnitude of the wetland activity and its implementation;

(3) rectifying the impact by repairing, rehabilitating, or restoring the affected wetland environment;

(4) reducing or eliminating the impact over time by preservation and maintenance operations during the life of the activity;

(5) compensating for the impact by restoring a wetland; and

(6) compensating for the impact by replacing or providing substitute wetland resources or environments.

For a project involving the draining or filling of wetlands in an amount not exceeding 10,000 square feet more than the applicable amount in section 103G.2241, subdivision 9, paragraph (a), the local government unit may make an on-site sequencing determination without a written alternatives analysis from the applicant.

(c) If a wetland is located in a cultivated field, then replacement must be accomplished through restoration only without regard to the priority order in paragraph (b), provided that a deed restriction is placed on the altered wetland prohibiting nonagricultural use for at least ten years.

(d) Restoration and replacement of wetlands must be accomplished in accordance with the ecology of the landscape area affected.

(e) Except as provided in paragraph (f), for a wetland or public waters wetland located on nonagricultural land, replacement must be in the ratio of two acres of replaced wetland for each acre of drained or filled wetland.

(f) For a wetland or public waters wetland located on agricultural land or in a greater than 80 percent area, replacement must be in the ratio of one acre of replaced wetland for each acre of drained or filled wetland.

(g) Wetlands that are restored or created as a result of an approved replacement plan are subject to the provisions of this section for any subsequent drainage or filling.

(h) Except in a greater than 80 percent area, only wetlands that have been restored from previously drained or filled wetlands, wetlands created by excavation in nonwetlands, wetlands created by dikes or dams along public or private drainage ditches, or wetlands created by dikes or dams associated with the restoration of previously drained

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or filled wetlands may be used in a statewide banking program established in rules adopted under section 103G.2242, subdivision 1. Modification or conversion of nondegraded naturally occurring wetlands from one type to another are not eligible for enrollment in a statewide wetlands bank.

(i) The technical evaluation panel established under section 103G.2242, subdivision 2, shall ensure that sufficient time has occurred for the wetland to develop wetland characteristics of soils, vegetation, and hydrology before recommending that the wetland be deposited in the statewide wetland bank. If the technical evaluation panel has reason to believe that the wetland characteristics may change substantially, the panel shall postpone its recommendation until the wetland has stabilized.

(j) This section and sections 103G.223 to 103G.2242, 103G.2364, and 103G.2365 apply to the state and its departments and agencies.

(k) For projects involving draining or filling of wetlands associated with a new public transportation project ~~in a greater than 80 percent area~~, and for projects expanded solely for additional traffic capacity, public transportation authorities, other than the state department of transportation, may purchase credits from the state wetland bank established with proceeds from Laws 1994, chapter 643, section 26, subdivision 3, paragraph (c). Wetland banking credits may be purchased at the least of the following, but in no case shall the purchase price be less than $400 per acre: (1) the cost to the state to establish the credits; (2) the average estimated market value of agricultural land in the township where the road project is located, as determined by the commissioner of revenue; or (3) the average value of the land in the immediate vicinity of the road project as determined by the county assessor. Public transportation authorities in a less than 80 percent area may purchase credits from the ~~state~~ board at the cost to the ~~state~~ board to establish credits.

(l) A replacement plan for wetlands is not required for individual projects that result in the filling or draining of wetlands for the repair, rehabilitation, reconstruction, or replacement of a currently serviceable existing state, city, county, or town public road necessary, as determined by the public transportation authority, to meet state or federal design or safety standards or requirements, excluding new roads or roads expanded solely for additional traffic capacity lanes. This paragraph only applies to authorities for public transportation projects that:

(1) minimize the amount of wetland filling or draining associated with the project and consider mitigating important site-specific wetland functions on-site;

(2) except as provided in clause (3), submit project-specific reports to the board, the technical evaluation panel, the commissioner of natural resources, and members of the public requesting a copy at least 30 days prior to construction that indicate the location, amount, and type of wetlands to be filled or drained by the project or, alternatively, convene an annual meeting of the parties required to receive notice to review projects to be commenced during the upcoming year; and

(3) for minor and emergency maintenance work impacting less than 10,000 square feet, submit project-specific reports, within 30 days of commencing the activity, to the board that indicate the location, amount, and type of wetlands that have been filled or drained.

Those required to receive notice of public transportation projects may appeal minimization, delineation, and on-site mitigation decisions made by the public transportation authority to the board according to the provisions of section 103G.2242, subdivision 9. The technical evaluation panel shall review minimization and delineation decisions made by the public transportation authority and provide recommendations regarding on-site mitigation if requested to do so by the local government unit, a contiguous landowner, or a member of the technical evaluation panel.

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Except for state public transportation projects, for which the state department of transportation is responsible, the board must replace the wetlands, and wetland areas of public waters if authorized by the commissioner or a delegated authority, drained or filled by public transportation projects on existing roads.

Public transportation authorities at their discretion may deviate from federal and state design standards on existing road projects when practical and reasonable to avoid wetland filling or draining, provided that public safety is not unreasonably compromised. The local road authority and its officers and employees are exempt from liability for any tort claim for injury to persons or property arising from travel on the highway and related to the deviation from the design standards for construction or reconstruction under this paragraph. This paragraph does not preclude an action for damages arising from negligence in construction or maintenance on a highway.

(m) If a landowner seeks approval of a replacement plan after the proposed project has already affected the wetland, the local government unit may require the landowner to replace the affected wetland at a ratio not to exceed twice the replacement ratio otherwise required.

(n) A local government unit may request the board to reclassify a county or watershed on the basis of its percentage of presettlement wetlands remaining. After receipt of satisfactory documentation from the local government, the board shall change the classification of a county or watershed. If requested by the local government unit, the board must assist in developing the documentation. Within 30 days of its action to approve a change of wetland classifications, the board shall publish a notice of the change in the Environmental Quality Board Monitor.

(o) One hundred citizens who reside within the jurisdiction of the local government unit may request the local government unit to reclassify a county or watershed on the basis of its percentage of presettlement wetlands remaining. In support of their petition, the citizens shall provide satisfactory documentation to the local government unit. The local government unit shall consider the petition and forward the request to the board under paragraph (n) or provide a reason why the petition is denied.

Sec. 113. Minnesota Statutes 2002, section 103G.222, subdivision 3, is amended to read:

Subd. 3. [WETLAND REPLACEMENT SITING.] (a) Siting wetland replacement must follow this priority order:

(1) on site or in the same minor watershed as the affected wetland;

(2) in the same watershed as the affected wetland;

(3) in the same county as the affected wetland;

(4) in an adjacent watershed or county to the affected wetland; and

(5) statewide, only for wetlands affected in greater than 80 percent areas and for public transportation projects, except that wetlands affected in less than 50 percent areas must be replaced in less than 50 percent areas, and wetlands affected in the seven-county metropolitan area must be replaced at a ratio of two to one in: (i) the affected county or, ~~if no restoration opportunities exist in the county,~~ (ii) in another of the seven metropolitan counties, or (iii) in one of the major watersheds that are wholly or partially within the seven-county metropolitan area ~~county~~, but at least one to one must be replaced within the seven-county metropolitan area.

(b) The exception in paragraph (a), clause (5), does not apply to replacement completed using wetland banking credits established by a person who submitted a complete wetland banking application to a local government unit by April 1, 1996.

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(c) When reasonable, practicable, and environmentally beneficial replacement opportunities are not available in siting priorities listed in paragraph (a), the applicant may seek opportunities at the next level.

(d) For the purposes of this section, "reasonable, practicable, and environmentally beneficial replacement opportunities" are defined as opportunities that:

(1) take advantage of naturally occurring hydrogeomorphological conditions and require minimal landscape alteration;

(2) have a high likelihood of becoming a functional wetland that will continue in perpetuity;

(3) do not adversely affect other habitat types or ecological communities that are important in maintaining the overall biological diversity of the area; and

(4) are available and capable of being done after taking into consideration cost, existing technology, and logistics consistent with overall project purposes.

(e) Regulatory agencies, local government units, and other entities involved in wetland restoration shall collaborate to identify potential replacement opportunities within their jurisdictional areas.

Sec. 114. Minnesota Statutes 2002, section 103G.2242, is amended by adding a subdivision to read:

Subd. 14. [FEES ESTABLISHED.] Fees must be assessed for managing wetland bank accounts and transactions as follows:

(1) account maintenance annual fee: one percent of the value of credits not to exceed $500;

(2) account establishment, deposit, or transfer: 6.5 percent of the value of credits not to exceed $1,000 per establishment, deposit, or transfer; and

(3) withdrawal fee: 6.5 percent of the value of credits withdrawn.

Sec. 115. Minnesota Statutes 2002, section 103G.2242, is amended by adding a subdivision to read:

Subd. 15. [FEES PAID TO BOARD.] All fees established in subdivision 14 must be paid to the board of water and soil resources and credited to the general fund to be used for the purpose of administration of the wetland bank.

Sec. 116. Minnesota Statutes 2002, section 103G.271, subdivision 6, is amended to read:

Subd. 6. [WATER USE PERMIT PROCESSING FEE.] (a) Except as described in paragraphs (b) to (f), a water use permit processing fee must be prescribed by the commissioner in accordance with the ~~following~~ schedule of fees in this subdivision for each water use permit in force at any time during the year. The schedule is as follows, with the stated fee in each clause applied to the total amount appropriated:

(1) ~~0.05 cents per 1,000 gallons~~ $101 for ~~the first~~ amounts not exceeding 50,000,000 gallons per year;

(2) ~~0.10 cents~~ $3 per ~~1,000~~ 1,000,000 gallons for amounts greater than 50,000,000 gallons but less than 100,000,000 gallons per year;

(3) ~~0.15 cents~~ $3.50 per ~~1,000~~ 1,000,000 gallons for amounts greater than 100,000,000 gallons but less than 150,000,000 gallons per year;

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(4) ~~0.20 cents~~ $4 per ~~1,000~~ 1,000,000 gallons for amounts greater than 150,000,000 gallons but less than 200,000,000 gallons per year;

(5) ~~0.25 cents~~ $4.50 per ~~1,000~~ 1,000,000 gallons for amounts greater than 200,000,000 gallons but less than 250,000,000 gallons per year;

(6) ~~0.30 cents~~ $5 per ~~1,000~~ 1,000,000 gallons for amounts greater than 250,000,000 gallons but less than 300,000,000 gallons per year;

(7) ~~0.35 cents~~ $5.50 per ~~1,000~~ 1,000,000 gallons for amounts greater than 300,000,000 gallons but less than 350,000,000 gallons per year;

(8) ~~0.40 cents~~ $6 per ~~1,000~~ 1,000,000 gallons for amounts greater than 350,000,000 gallons but less than 400,000,000 gallons per year; ~~and~~

(9) ~~0.45 cents~~ $6.50 per ~~1,000~~ 1,000,000 gallons for amounts greater than 400,000,000 gallons but less than 450,000,000 gallons per year.;

(10) $7 per 1,000,000 gallons for amounts greater than 450,000,000 gallons but less than 500,000,000 gallons per year; and

(11) $7.50 per 1,000,000 gallons for amounts greater than 500,000,000 gallons per year.

(b) For once-through cooling systems, a water use processing fee must be prescribed by the commissioner in accordance with the following schedule of fees for each water use permit in force at any time during the year:

(1) for nonprofit corporations and school districts, ~~15.0 cents~~ $150 per ~~1,000~~ 1,000,000 gallons; and

(2) for all other users, ~~20 cents~~ $200 per ~~1,000~~ 1,000,000 gallons.

(c) The fee is payable based on the amount of water appropriated during the year and, except as provided in paragraph (f), the minimum fee is ~~$50~~ $100.

(d) For water use processing fees other than once-through cooling systems:

(1) the fee for a city of the first class may not exceed ~~$175,000~~ $250,000 per year;

(2) the fee for other entities for any permitted use may not exceed:

(i) ~~$35,000~~ $50,000 per year for an entity holding three or fewer permits;

(ii) ~~$50,000~~ $75,000 per year for an entity holding four or five permits;

(iii) ~~$175,000~~ $250,000 per year for an entity holding more than five permits;

(3) the fee for agricultural irrigation may not exceed $750 per year;

(4) the fee for a municipality that furnishes electric service and cogenerates steam for home heating may not exceed $10,000 for its permit for water use related to the cogeneration of electricity and steam; and

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(5) no fee is required for a project involving the appropriation of surface water to prevent flood damage or to remove flood waters during a period of flooding, as determined by the commissioner.

(e) Failure to pay the fee is sufficient cause for revoking a permit. A penalty of two percent per month calculated from the original due date must be imposed on the unpaid balance of fees remaining 30 days after the sending of a second notice of fees due. A fee may not be imposed on an agency, as defined in section 16B.01, subdivision 2, or federal governmental agency holding a water appropriation permit.

(f) The minimum water use processing fee for a permit issued for irrigation of agricultural land is ~~$10~~ $20 for years in which:

(1) there is no appropriation of water under the permit; or

(2) the permit is suspended for more than seven consecutive days between May 1 and October 1.

Sec. 117. Minnesota Statutes 2002, section 103G.271, subdivision 6a, is amended to read:

Subd. 6a. [PAYMENT OF FEES FOR PAST UNPERMITTED APPROPRIATIONS.] An entity that appropriates water without a required permit under subdivision 1 must pay the applicable water use permit processing fee specified in subdivision 6 for the period during which the unpermitted appropriation occurred. The fees for unpermitted appropriations are required for the previous seven calendar years after being notified of the need for a permit. This fee is in addition to any other fee or penalty assessed.

Sec. 118. Minnesota Statutes 2002, section 103G.611, subdivision 1, is amended to read:

Subdivision 1. [~~REQUIREMENT~~ REQUIREMENTS.] (a) The fee for a permit to operate an aeration system on public waters during periods of ice cover is $250. The commissioner may waive the fee for aeration systems that are assisting efforts to maintain angling opportunities through the prevention of winterkill. To be eligible for the fee waiver, the lake being aerated must have public access and aeration must be identified as a desirable management tool in a plan approved by the commissioner. Operation of the aeration system in a manner not consistent with the approved plan represents justification for rescinding the fee waiver. The fee may not be charged to the state or a federal governmental agency applying for a permit. The money received for permits under this subdivision must be deposited in the treasury and credited to the game and fish fund.

(b) A person operating an aeration system on public waters under a water aeration permit must comply with the sign posting requirements of this section and applicable rules of the commissioner.

Sec. 119. Minnesota Statutes 2002, section 103G.615, subdivision 2, is amended to read:

Subd. 2. [FEES.] (a) The commissioner shall establish a fee schedule for permits to harvest aquatic plants other than wild rice, by order, after holding a public hearing. The fees may not exceed ~~$200~~ $750 per permit based upon the cost of receiving, processing, analyzing, and issuing the permit, and additional costs incurred after the application to inspect and monitor the activities authorized by the permit, and enforce aquatic plant management rules and permit requirements.

(b) The fee for a permit for ~~chemical treatment~~ the destruction of rooted aquatic vegetation ~~may not exceed $20~~ is $35 for each contiguous parcel of shoreline owned by an owner. This fee may not be charged for permits issued in connection with lakewide Eurasian water milfoil control programs.

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(d) The money received for the permits under this subdivision shall be deposited in the treasury and credited to the game and fish fund.

Sec. 120. Minnesota Statutes 2002, section 115.03, is amended by adding a subdivision to read:

Subd. 5b. [STORM WATER PERMITS; COMPLIANCE WITH NONDEGRADATION AND MITIGATION REQUIREMENTS.] (a) During the period in which this subdivision is in effect, all point source storm water discharges that are subject to and in compliance with an individual or general storm water permit issued by the pollution control agency under the National Pollution Discharge Elimination System are considered to be in compliance with the nondegradation and mitigation requirements of agency water quality rules.

(b) This subdivision is repealed on the earlier of July 1, 2007, or the effective date of rules adopted by the pollution control agency that provide specific mechanisms or criteria to determine whether point source storm water discharges comply with the nondegradation and mitigation requirements of agency water quality rules.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 121. Minnesota Statutes 2002, section 115.03, is amended by adding a subdivision to read:

Subd. 5c. [REGULATION OF STORM WATER DISCHARGES.] (a) The agency may issue a general permit to any category or subcategory of point source storm water discharges that it deems administratively reasonable and efficient without making any findings under agency rules. Nothing in this subdivision precludes the agency from requiring an individual permit for a point source storm water discharge if the agency finds that it is appropriate under applicable legal or regulatory standards.

(b) Pursuant to this paragraph, the legislature authorizes the agency to adopt and enforce rules regulating point source storm water discharges. No further legislative approval is required under any other legal or statutory provision whether enacted before or after the enactment of this section.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 122. [115.42] [NONINGESTED SOURCE PHOSPHORUS REDUCTION GOAL.]

The state goal for reducing phosphorus from noningested sources entering municipal wastewater treatment systems is at least a 50 percent reduction based on the timeline for reduction developed by the commissioner under section 166, and a reasonable estimate of the amount of phosphorus from noningested sources entering municipal wastewater treatment systems in calendar year 2003.

Sec. 123. Minnesota Statutes 2002, section 115.55, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) The definitions in this subdivision apply to ~~this section and section~~ sections 115.55 to 115.56.

(b) "Advisory committee" means the advisory committee on individual sewage treatment systems established under the individual sewage treatment system rules. The advisory committee must be appointed to ensure geographic representation of the state and include elected public officials.

(1) local ordinances that comply with the individual sewage treatment system rules, as required in subdivision 2; or

(2) in areas not subject to the ordinances described in clause (1), the individual sewage treatment system rules.

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(d) "City" means a statutory or home rule charter city.

(e) "Commissioner" means the commissioner of the pollution control agency.

(f) "Dwelling" means a building or place used or intended to be used by human occupants as a single-family or two-family unit.

(g) "Individual sewage treatment system" or "system" means a sewage treatment system, or part thereof, serving a dwelling, other establishment, or group thereof, that uses subsurface soil treatment and disposal.

(h) "Individual sewage treatment system professional" means an inspector, installer, site evaluator or designer, or pumper.

(i) "Individual sewage treatment system rules" means rules adopted by the agency that establish minimum standards and criteria for the design, location, installation, use, and maintenance of individual sewage treatment systems.

(j) "Inspector" means a person who inspects individual sewage treatment systems for compliance with the applicable requirements.

(k) "Installer" means a person who constructs or repairs individual sewage treatment systems.

(l) "Local unit of government" means a township, city, or county.

(m) "Pumper" means a person who maintains components of individual sewage treatment systems including, but not limited to, septic, aerobic, and holding tanks.

(n) "Seasonal dwelling" means a dwelling that is occupied or used for less than 180 days per year and less than 120 consecutive days.

(o) "Septic system tank" means any covered receptacle designed, constructed, and installed as part of an individual sewage treatment system.

(p) "Site evaluator or designer" means a person who:

(1) investigates soils and site characteristics to determine suitability, limitations, and sizing requirements; and

(2) designs individual sewage treatment systems.

Sec. 124. [115.551] [TANK FEE.]

An installer shall pay a fee of $25 for each septic system tank installed in the previous calendar year. The fees required under this section must be paid to the commissioner by January 30 of each year. The revenue derived from the fee imposed under this section shall be deposited in the environmental fund and is exempt from section 16A.1285.

Sec. 125. Minnesota Statutes 2002, section 115A.54, is amended by adding a subdivision to read:

Subd. 4. [TERMINATION OF OBLIGATIONS; GOOD-FAITH EFFORT.] Notwithstanding the provisions of section 16A.695, the director may terminate the obligations of a grant or loan recipient under this section, if the director finds that the recipient has made a good-faith effort to exhaust all options in trying to comply with the terms

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and conditions of the grant or loan. In lieu of declaring a default on a grant or a loan under this section, the director may identify additional measures a recipient should take in order to meet the good-faith test required for terminating the recipient's obligations under this section. By December 15 of each year, the director shall report to the legislature the defaults and terminations the director has ordered in the previous year, if any. No decision on termination under this section is effective until the end of the legislative session following the director's report.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 126. Minnesota Statutes 2002, section 115A.545, subdivision 2, is amended to read:

Subd. 2. [PROCESSING PAYMENT.] (a) The director shall pay counties a processing payment for each ton of mixed municipal solid waste that is generated in the county and processed at a resource recovery facility. The processing payment shall be $5 for each ton of mixed municipal solid waste processed.

(b) ~~The director shall also pay a processing payment to a county that does not qualify under paragraph (a) that constructed a processing facility and that either:~~

~~(1) contracts for waste generated in the county to be received at a facility in that county; or~~

~~(2) has a comprehensive solid waste management plan approved by the director under section 115A.46 that demonstrates the intention of the county to make the processing facility operational.~~

~~The processing payment shall be $5 for each ton of mixed municipal waste generated in the county and delivered under contract with the county.~~

~~(c)~~ By the last day of October, January, April, and July, each county claiming the processing payment shall file a claim for payment with the director for the three previous months certifying the number of tons of mixed municipal solid waste that were generated in the county and processed at a resource recovery facility. The director shall pay the processing payments by November 15, February 15, May 15, and August 15 each year.

~~(d)~~ (c) If the total amount for which all counties are eligible in a quarter exceeds the amount available for payment, the director shall make the payments on a pro rata basis.

~~(e)~~ (d) All of the money received by a county under paragraph (a) must be used to lower the tipping fee for waste to be processed at a resource recovery facility.

~~(f) Amounts received by a county under:~~

(1) paragraph (b), clause (1), must be used to lower the tipping fee for waste received at a waste management facility within the county for waste received under contract with the county at a facility in the county; or

~~(2) paragraph (b), clause (2), must be used to assist in making the county's processing facility operational.~~

Sec. 127. Minnesota Statutes 2002, section 115A.908, subdivision 2, is amended to read:

Subd. 2. [DEPOSIT OF REVENUE.] (a) From July 1, 2003, through June 30, 2007, revenue collected shall be credited to the general fund.

(b) After June 30, 2007, revenue collected shall be credited to the ~~motor vehicle transfer account in the~~ environmental fund. As cash flow permits, the commissioner of finance must transfer (1) $3,200,000 each fiscal year from the motor vehicle transfer account to the environmental response, compensation, and compliance account established in section 115B.20; and (2) $1,200,000 each fiscal year from the motor vehicle transfer account to the general fund.

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Sec. 128. Minnesota Statutes 2002, section 115A.919, subdivision 1, is amended to read:

Subdivision 1. [FEE.] (a) A county may impose a fee, by cubic yard of waste or its equivalent, on operators of facilities for the disposal of mixed municipal solid waste or construction debris located within the county. The revenue from the fees shall be credited to the county general fund and shall be used only for landfill abatement purposes, or costs of closure, postclosure care, and response actions or for purposes of mitigating and compensating for the local risks, costs, and other adverse effects of facilities. The interest generated from fees imposed under this subdivision may be credited to the county general fund for use by a county for other purposes.

(b) Fees for construction debris facilities may not exceed 50 cents per cubic yard. Revenues from the fees must offset any financial assurances required by the county for a construction debris facility. The maximum revenue that may be collected for a construction debris facility must be determined by multiplying the total permitted capacity of the facility by 15 cents per cubic yard. Once the maximum revenue has been collected for a facility, the fee may no longer be imposed. The limitation on the fees in this paragraph and in section 115A.921, subdivision 2, are not intended to alter the liability of the facility operator or the authority of the agency to impose financial assurance requirements.

Sec. 129. [115A.9565] [CATHODE-RAY TUBE PROHIBITION.]

Effective July 1, 2005, a person may not place in mixed municipal solid waste an electronic product containing a cathode-ray tube.

Sec. 130. Minnesota Statutes 2002, section 115C.02, subdivision 14, is amended to read:

Subd. 14. [TANK.] "Tank" means any one or a combination of containers, vessels, and enclosures, including structures and appurtenances connected to them, that is, or has been, used to contain or, dispense, store, or transport petroleum.

"Tank" does not include:

(1) a mobile storage tank used to transport petroleum from one location to another, except a mobile storage tank with a capacity of 500 gallons or less used only to transport home heating fuel on private property; or

~~(2)~~ pipeline facilities, including gathering lines, regulated under the Natural Gas Pipeline Safety Act of 1968, United States Code, title 49, chapter 24, or the Hazardous Liquid Pipeline Safety Act of 1979, United States Code, title 49, chapter 29.

Sec. 131. Minnesota Statutes 2002, section 115C.08, subdivision 4, is amended to read:

Subd. 4. [EXPENDITURES.] (a) Money in the fund may only be spent:

(1) to administer the petroleum tank release cleanup program established in this chapter;

(2) for agency administrative costs under sections 116.46 to 116.50, sections 115C.03 to 115C.06, and costs of corrective action taken by the agency under section 115C.03, including investigations;

(3) for costs of recovering expenses of corrective actions under section 115C.04;

(4) for training, certification, and rulemaking under sections 116.46 to 116.50;

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(5) for agency administrative costs of enforcing rules governing the construction, installation, operation, and closure of aboveground and underground petroleum storage tanks;

(6) for reimbursement of the environmental response, compensation, and compliance account under subdivision 5 and section 115B.26, subdivision 4;

(7) for administrative and staff costs as set by the board to administer the petroleum tank release program established in this chapter;

(8) for corrective action performance audits under section 115C.093; ~~and~~

(9) for contamination cleanup grants, as provided in paragraph (c); and

(10) to assess and remove abandoned underground storage tanks under section 115C.094 and, if a release is discovered, to pay for the specific consultant and contractor services costs necessary to complete the tank removal project, including, but not limited to, excavation soil sampling, groundwater sampling, soil disposal, and completion of an excavation report.

(b) Except as provided in paragraph (c), money in the fund is appropriated to the board to make reimbursements or payments under this section.

(c) $6,200,000 is annually appropriated from the fund to the commissioner of trade and economic development for contamination cleanup grants under section 116J.554. Of this amount, the commissioner may spend up to $120,000 annually for administration of the contamination cleanup grant program. The appropriation does not cancel and is available until expended. The appropriation shall not be withdrawn from the fund nor the fund balance reduced until the funds are requested by the commissioner of trade and economic development. The commissioner shall schedule requests for withdrawals from the fund to minimize the necessity to impose the fee authorized by subdivision 2. Unless otherwise provided, the appropriation in this paragraph may be used for:

(1) project costs at a qualifying site if a portion of the cleanup costs are attributable to petroleum contamination; and

(2) the costs of performing contamination investigation if there is a reasonable basis to suspect the contamination is attributable to petroleum.

Sec. 132. Minnesota Statutes 2002, section 115C.09, subdivision 3, is amended to read:

Subd. 3. [REIMBURSEMENTS; SUBROGATION; APPROPRIATION.] (a) The board shall reimburse an eligible applicant from the fund for 90 percent of the total reimbursable costs incurred at the site, except that the board may reimburse an eligible applicant from the fund for greater than 90 percent of the total reimbursable costs, if the applicant previously qualified for a higher reimbursement rate. For costs associated with a release from a tank in transport, the board may reimburse 90 percent of costs over $10,000, with the maximum reimbursement not to exceed $100,000.

Not more than $1,000,000 may be reimbursed for costs associated with a single release, regardless of the number of persons eligible for reimbursement, and not more than $2,000,000 may be reimbursed for costs associated with a single tank facility.

(b) A reimbursement may not be made from the fund under this chapter until the board has determined that the costs for which reimbursement is requested were actually incurred and were reasonable.

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(c) When an applicant has obtained responsible competitive bids or proposals according to rules promulgated under this chapter prior to June 1, 1995, the eligible costs for the tasks, procedures, services, materials, equipment, and tests of the low bid or proposal are presumed to be reasonable by the board, unless the costs of the low bid or proposal are substantially in excess of the average costs charged for similar tasks, procedures, services, materials, equipment, and tests in the same geographical area during the same time period.

(d) When an applicant has obtained a minimum of two responsible competitive bids or proposals on forms prescribed by the board and where the rules promulgated under this chapter after June 1, 1995, designate maximum costs for specific tasks, procedures, services, materials, equipment and tests, the eligible costs of the low bid or proposal are deemed reasonable if the costs are at or below the maximums set forth in the rules.

(e) Costs incurred for change orders executed as prescribed in rules promulgated under this chapter after June 1, 1995, are presumed reasonable if the costs are at or below the maximums set forth in the rules, unless the costs in the change order are above those in the original bid or proposal or are unsubstantiated and inconsistent with the process and standards required by the rules.

(f) A reimbursement may not be made from the fund in response to either an initial or supplemental application for costs incurred after June 4, 1987, that are payable under an applicable insurance policy, except that if the board finds that the applicant has made reasonable efforts to collect from an insurer and failed, the board shall reimburse the applicant.

(g) If the board reimburses an applicant for costs for which the applicant has insurance coverage, the board is subrogated to the rights of the applicant with respect to that insurance coverage, to the extent of the reimbursement by the board. The board may request the attorney general to bring an action in district court against the insurer to enforce the board's subrogation rights. Acceptance by an applicant of reimbursement constitutes an assignment by the applicant to the board of any rights of the applicant with respect to any insurance coverage applicable to the costs that are reimbursed. Notwithstanding this paragraph, the board may instead request a return of the reimbursement under subdivision 5 and may employ against the applicant the remedies provided in that subdivision, except where the board has knowingly provided reimbursement because the applicant was denied coverage by the insurer.

(h) Money in the fund is appropriated to the board to make reimbursements under this chapter. A reimbursement to a state agency must be credited to the appropriation account or accounts from which the reimbursed costs were paid.

(i) The board may reduce the amount of reimbursement to be made under this chapter if it finds that the applicant has not complied with a provision of this chapter, a rule or order issued under this chapter, or one or more of the following requirements:

(1) the agency was given notice of the release as required by section 115.061;

(2) the applicant, to the extent possible, fully cooperated with the agency in responding to the release;

(3) the state rules applicable after December 22, 1993, to operating an underground storage tank and appurtenances without leak detection;

(4) the state rules applicable after December 22, 1998, to operating an underground storage tank and appurtenances without corrosion protection or spill and overfill protection; and

(5) the state rule applicable after November 1, 1998, to operating an aboveground tank without a dike or other structure that would contain a spill at the aboveground tank site.

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(j) The reimbursement may be reduced as much as 100 percent for failure by the applicant to comply with the requirements in paragraph (i), clauses (1) to (5). In determining the amount of the reimbursement reduction, the board shall consider:

(1) the reasonable determination by the agency that the noncompliance poses a threat to the environment;

(2) whether the noncompliance was negligent, knowing, or willful;

(3) the deterrent effect of the award reduction on other tank owners and operators;

(4) the amount of reimbursement reduction recommended by the commissioner; and

(5) the documentation of noncompliance provided by the commissioner.

(k) An applicant may ~~assign the right to receive reimbursement to~~ request that the board issue a multiparty check that includes each lender who advanced funds to pay the costs of the corrective action or to each contractor or consultant who provided corrective action services. ~~An assignment~~ This request must be made by filing with the board a document, in a form prescribed by the board, indicating the identity of the applicant, the identity of the ~~assignee~~ lender, contractor, or consultant, the dollar amount ~~of the assignment~~, and the location of the corrective action. An assignment signed by the applicant is valid unless terminated by filing a termination with the board, in a form prescribed by the board, which must include the written concurrence of the assignee. The board shall maintain an index of assignments filed under this paragraph. The board shall pay the reimbursement to the applicant and to one or more assignees by a multiparty check. The applicant must submit a request for the issuance of a multiparty check for each application submitted to the board. Payment under this paragraph does not constitute the assignment of the applicant's right to reimbursement to the consultant, contractor, or lender. The board has no liability to an applicant for a payment ~~under an assignment meeting~~ issued as a multiparty check that meets the requirements of this paragraph.

Sec. 133. Minnesota Statutes 2002, section 115C.09, is amended by adding a subdivision to read:

Subd. 3i. [REIMBURSEMENT; NATURAL DISASTER AREA.] (a) As used in this subdivision, "natural disaster area" means a geographical area that has been declared a disaster by the governor and President of the United States.

(b) Notwithstanding subdivision 3, paragraph (a), the board may reimburse:

(1) up to 50 percent of an applicant's prenatural-disaster estimated building market value as recorded by the county assessor; or

(2) if the applicant conveys title of the real estate to local or state government, up to 50 percent of the prenatural-disaster estimated total market value, not to exceed one acre, as recorded by the county assessor.

(1) the natural disaster area has been declared eligible for state or federal emergency aid;

(2) the building is declared uninhabitable by the commissioner because of damage caused by the release of petroleum from a petroleum storage tank; and

(3) the applicant has submitted a claim under any applicable insurance policies and has been denied benefits under those policies.

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(d) In determining the percentage for reimbursement, the board shall consider the applicant's eligibility to receive other state or federal financial assistance and determine a lesser reimbursement rate to the extent that the applicant is eligible to receive financial assistance that exceeds 50 percent of the applicant's prenatural-disaster estimated building market value or total market value.

Sec. 134. Minnesota Statutes 2002, section 115C.09, is amended by adding a subdivision to read:

Subd. 3j. [RETAIL LOCATIONS AND TRANSPORT VEHICLES.] (a) As used in this subdivision, "retail location" means a facility located in the metropolitan area as defined in section 473.121, subdivision 2, where gasoline is offered for sale to the general public for use in automobiles and trucks. "Transport vehicle" means a liquid fuel cargo tank used to deliver gasoline into underground storage tanks during 2002 at a retail location.

(b) Notwithstanding any other provision in this chapter, and any rules adopted under this chapter, the board shall reimburse 90 percent of an applicant's cost for retrofits of retail locations and transport vehicles completed between January 1, 2001, and January 1, 2006, to comply with section 116.49, subdivisions 3 and 4, provided that the board determines the costs were incurred and reasonable. The reimbursement may not exceed $3,000 per retail location and $3,000 per transport vehicle.

Sec. 135. [115C.094] [ABANDONED UNDERGROUND STORAGE TANKS.]

(a) As used in this section, an abandoned underground petroleum storage tank means an underground petroleum storage tank that was:

(1) taken out of service prior to December 22, 1988; or

(2) taken out of service on or after December 22, 1988, if the current property owner did not know of the existence of the underground petroleum storage tank and could not have reasonably been expected to have known of the tank's existence at the time the owner first acquired right, title, or interest in the tank.

(b) The board may contract for:

(1) a statewide assessment in order to determine the quantity, location, cost, and feasibility of removing abandoned underground petroleum storage tanks;

(2) the removal of an abandoned underground petroleum storage tank; and

(3) the removal and disposal of petroleum-contaminated soil if the removal is required by the commissioner at the time of tank removal.

(c) Before the board may contract for removal of an abandoned petroleum storage tank, the tank owner must provide the board with written access to the property and release the board from any potential liability for the work performed.

(d) Money in the fund is appropriated to the board for the purposes of this section.

Sec. 136. Minnesota Statutes 2002, section 115C.11, subdivision 1, is amended to read:

Subdivision 1. [REGISTRATION.] (a) All consultants and contractors who perform corrective action services must register with the board. In order to register, consultants must meet and demonstrate compliance with the following criteria:

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(1) provide a signed statement to the board verifying agreement to abide by this chapter and the rules adopted under it and to include a signed statement with each claim that all costs claimed by the consultant are a true and accurate account of services performed;

(2) provide a signed statement that the consultant shall make available for inspection any records requested by the board for field or financial audits under the scope of this chapter;

(3) certify knowledge of the requirements of this chapter and the rules adopted under it;

(4) obtain and maintain professional liability coverage, including pollution impairment liability; and

(5) agree to submit to the board a certificate or certificates verifying the existence of the required insurance coverage.

(b) The board must maintain a list of all registered consultants and a list of all registered contractors.

(d) Reimbursement for corrective action services performed by an unregistered consultant or contractor is subject to reduction under section 115C.09, subdivision 3, paragraph (i).

(e) Corrective action services performed by a consultant or contractor prior to being removed from the registration list may be reimbursed without reduction by the board.

(f) If the information in an application for registration becomes inaccurate or incomplete in any material respect, the registered consultant or contractor must promptly file a corrected application with the board.

(g) Registration is effective 30 days after a complete application is received by the board. The board may reimburse without reduction the cost of work performed by an unregistered contractor if the contractor performed the work within 60 days of the effective date of registration.

(h) Registration for consultants under this section remains in force until the expiration date of the professional liability coverage, including pollution impairment liability, required under paragraph (a), clause (4), or until voluntarily terminated by the registrant, or until suspended or revoked by the commissioner of commerce. Registration for contractors under this section expires each year on the anniversary of the effective date of the contractor's most recent registration and must be renewed on or before expiration. Prior to its annual expiration, a registration remains in force until voluntarily terminated by the registrant, or until suspended or revoked by the commissioner of commerce. All registrants must comply with registration criteria under this section.

(i) The board may deny a consultant or contractor registration or request for renewal under this section if the consultant or contractor:

(1) does not intend to or is not in good faith carrying on the business of an environmental consultant or contractor;

(2) has filed an application for registration that is incomplete in any material respect or contains any statement which, in light of the circumstances under which it is made, contains any misrepresentation, or is false, misleading, or fraudulent;

(3) has engaged in any fraudulent, coercive, deceptive, or dishonest act or practice whether or not the act or practice involves the business of environmental consulting or contracting;

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(4) has forged another's name to any document whether or not the document relates to a document approved by the board;

(5) has plead guilty, with or without explicitly admitting guilt; plead nolo contendere; or been convicted of a felony, gross misdemeanor, or misdemeanor involving moral turpitude, including, but not limited to, assault, harassment, or similar conduct;

(6) has been subject to disciplinary action in another state or jurisdiction; or

(7) has not paid subcontractors hired by the consultant or contractor after they have been paid in full by the applicant.

Sec. 137. Minnesota Statutes 2002, section 115C.13, is amended to read:

115C.13 [REPEALER.]

Sections 115C.01, 115C.02, 115C.021, 115C.03, 115C.04, 115C.045, 115C.05, 115C.06, 115C.065, 115C.07, 115C.08, 115C.09, 115C.093, 115C.094, 115C.10, 115C.11, 115C.111, 115C.112, 115C.113, 115C.12, and 115C.13, are repealed effective June 30, ~~2005~~ 2007.

Sec. 138. Minnesota Statutes 2002, section 116.073, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY TO ISSUE.] (a) Pollution control agency staff designated by the commissioner and department of natural resources conservation officers may issue citations to a person who:

(1) disposes of solid waste as defined in section 116.06, subdivision 22, at a location not authorized by law for the disposal of solid waste without permission of the owner of the property;

(2) fails to report or recover discharges as required under section 115.061; or

(3) fails to take discharge preventive or preparedness measures required under chapter 115E; or

(4) fails to install or use vapor recovery equipment during the transfer of gasoline from a transport delivery vehicle to an underground storage tank as required in section 116.49, subdivisions 3 and 4.

(b) In addition, pollution control agency staff designated by the commissioner may issue citations to owners and operators of facilities dispensing petroleum products who violate sections 116.46 to 116.50 and Minnesota Rules, chapters 7150 and 7151 and parts 7001.4200 to 7001.4300. A citation issued under this subdivision must include a requirement that the person cited remove and properly dispose of or otherwise manage the waste or discharged oil or hazardous substance, reimburse any government agency that has disposed of the waste or discharged oil or hazardous substance and contaminated debris for the reasonable costs of disposal, or correct any storage tank violations.

(c) Until June 1, 2004, citations for violation of sections 115E.045 and 116.46 to 116.50 and Minnesota Rules, chapters 7150 and 7151, may be issued only after the owners and operators have had a 90-day period to correct violations stated in writing by pollution control agency staff, unless there is a discharge associated with the violation or the violation is of Minnesota Rules, part 7151.6400, subpart 1, item B, or 7151.6500.

Sec. 139. Minnesota Statutes 2002, section 116.073, subdivision 2, is amended to read:

Subd. 2. [PENALTY AMOUNT.] The citation must impose the following penalty amounts:

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(1) $100 per major appliance, as defined in section 115A.03, subdivision 17a, up to a maximum of $2,000;

(2) $25 per waste tire, as defined in section 115A.90, subdivision 11, up to a maximum of $2,000;

(3) $25 per lead acid battery governed by section 115A.915, up to a maximum of $2,000;

(4) $1 per pound of other solid waste or $20 per cubic foot up to a maximum of $2,000;

(5) up to $200 for any amount of waste that escapes from a vehicle used for the transportation of solid waste if, after receiving actual notice that waste has escaped the vehicle, the person or company transporting the waste fails to immediately collect the waste;

(6) $50 per violation of rules adopted under section 116.49, relating to underground storage tank system design, construction, installation, and notification requirements, up to a maximum of $2,000;

(7) $250 per violation of rules adopted under section 116.49, relating to upgrading of existing underground storage tank systems, up to a maximum of $2,000;

(8) $100 per violation of rules adopted under section 116.49, relating to underground storage tank system general operating requirements, up to a maximum of $2,000;

(9) $250 per violation of rules adopted under section 116.49, relating to underground storage tank system release detection requirements, up to a maximum of $2,000;

(10) $50 per violation of rules adopted under section 116.49, relating to out-of-service underground storage tank systems and closure, up to a maximum of $2,000;

(11) $50 per violation of sections 116.48 to 116.491 relating to underground storage tank system notification, monitoring, environmental protection, and tank installers training and certification requirements, up to a maximum of $2,000;

(12) $25 per gallon of oil or hazardous substance discharged which is not reported or recovered under section 115.061, up to a maximum of $2,000;

(13) $1 per gallon of oil or hazardous substance being stored, transported, or otherwise handled without the prevention or preparedness measures required under chapter 115E, up to a maximum of $2,000; ~~and~~

(14) $250 per violation of Minnesota Rules, parts 7001.4200 to 7001.4300 or chapter 7151, related to aboveground storage tank systems, up to a maximum of $2,000; and

(15) $250 per delivery made in violation of section 116.49, subdivision 3 or 4, levied against:

(i) the retail location if vapor recovery equipment is not installed or maintained properly;

(ii) the carrier if the transport delivery vehicle is not equipped with vapor recovery equipment; or

(iii) the driver for failure to use supplied vapor recovery equipment.

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Sec. 140. Minnesota Statutes 2002, section 116.46, is amended by adding a subdivision to read:

Subd. 7a. [RETAIL LOCATION.] "Retail location" means a facility located in the metropolitan area as defined in section 473.121, subdivision 2, where gasoline is offered for sale to the general public for use in automobiles and trucks.

Sec. 141. Minnesota Statutes 2002, section 116.46, is amended by adding a subdivision to read:

Subd. 7b. [TRANSPORT DELIVERY VEHICLE.] "Transport delivery vehicle" means a liquid fuel cargo tank used to deliver gasoline into underground storage tanks.

Sec. 142. Minnesota Statutes 2002, section 116.46, is amended by adding a subdivision to read:

Subd. 9. [VAPOR RECOVERY SYSTEM.] "Vapor recovery system" means a system which transfers vapors from underground storage tanks during the filling operation to the storage compartment of the transport vehicle delivering gasoline.

Sec. 143. Minnesota Statutes 2002, section 116.49, is amended by adding a subdivision to read:

Subd. 3. [VAPOR RECOVERY SYSTEM.] Every underground gasoline storage tank at a retail location must be fitted with vapor recovery equipment by January 1, 2006. The equipment must be certified by the manufacturer as capable of collecting 95 percent of hydrocarbons emitted during gasoline transfers from a transport delivery vehicle to an underground storage tank. Product delivery and vapor recovery access points must be on the same side of the transport vehicle when the transport vehicle is positioned for delivery into the underground tank. After January 1, 2006, no gasoline may be delivered to a retail location that is not equipped with a vapor recovery system.

Sec. 144. Minnesota Statutes 2002, section 116.49, is amended by adding a subdivision to read:

Subd. 4. [VAPOR RECOVERY ON TRANSPORTS.] All transport delivery vehicles that deliver gasoline into underground storage tanks in the metropolitan area as defined in section 473.121, subdivision 2, must be fitted with vapor recovery equipment. The equipment must recover and manage 95 percent of hydrocarbons emitted during the transfer of gasoline from the underground storage tank and the transport delivery vehicle by January 1, 2006. After January 1, 2006, no gasoline may be delivered to a retail location by a transport vehicle that is not fitted with vapor recovery equipment.

Sec. 145. Minnesota Statutes 2002, section 116.50, is amended to read:

116.50 [PREEMPTION.]

Sections 116.46 to 116.49 preempt conflicting local and municipal rules or ordinances requiring notification or establishing environmental protection requirements for underground storage tanks. A state agency or local unit of government may not adopt rules or ordinances establishing or requiring vapor recovery for underground storage tanks.

Sec. 146. Minnesota Statutes 2002, section 116P.02, subdivision 1, is amended to read:

Subdivision 1. [APPLICABILITY.] The definitions in this section apply to ~~sections 116P.01 to 116P.13~~ this chapter.

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Sec. 147. Minnesota Statutes 2002, section 116P.05, subdivision 2, is amended to read:

Subd. 2. [DUTIES.] (a) The commission shall recommend a budget plan for expenditures from the environment and natural resources trust fund and shall adopt a strategic plan as provided in section 116P.08.

(b) The commission shall recommend expenditures to the legislature from the ~~Minnesota future resources fund under section 116P.13~~ state land and water conservation account in the natural resources fund.

(c) It is a condition of acceptance of the appropriations made from the ~~Minnesota future resources fund,~~ Minnesota environment and natural resources trust fund, and oil overcharge money under section 4.071, subdivision 2, that the agency or entity receiving the appropriation must submit a work program and semiannual progress reports in the form determined by the legislative commission on Minnesota resources. None of the money provided may be spent unless the commission has approved the pertinent work program.

(d) The peer review panel created under section 116P.08 must also review, comment, and report to the commission on research proposals applying for an appropriation from the ~~Minnesota resources fund and from~~ oil overcharge money under section 4.071, subdivision 2.

(e) The commission may adopt operating procedures to fulfill its duties under ~~sections 116P.01 to 116P.13~~ chapter 116P.

Sec. 148. Minnesota Statutes 2002, section 116P.09, subdivision 4, is amended to read:

Subd. 4. [PERSONNEL.] Persons who are employed by a state agency to work on a project and are paid by an appropriation from the trust fund ~~or Minnesota future resources fund~~ are in the unclassified civil service, and their continued employment is contingent upon the availability of money from the appropriation. When the appropriation has been spent, their positions must be canceled and the approved complement of the agency reduced accordingly. Part-time employment of persons for a project is authorized. The use of classified employees is authorized when approved as part of the work program required by section 116P.05, subdivision 2, paragraph (c).

Sec. 149. Minnesota Statutes 2002, section 116P.09, subdivision 5, is amended to read:

Subd. 5. [ADMINISTRATIVE EXPENSE.] The ~~administrative expenses of the commission shall be paid from the various funds administered by the commission as follows:~~

(1) Through June 30, 1993, the administrative expenses of the commission and the advisory committee shall be paid from the Minnesota future resources fund. After that time, the prorated expenses related to administration of the trust fund shall be paid from the earnings of the trust fund.

~~(2) After June 30, 1993, the~~ prorated expenses related to commission administration of the trust fund may not exceed an amount equal to four percent of the ~~projected earnings~~ amount available for appropriation of the trust fund for the biennium.

Sec. 150. Minnesota Statutes 2002, section 116P.09, subdivision 7, is amended to read:

Subd. 7. [REPORT REQUIRED.] The commission shall, by January 15 of each odd-numbered year, submit a report to the governor, the chairs of the house appropriations and senate finance committees, and the chairs of the house and senate committees on environment and natural resources. Copies of the report must be available to the public. The report must include:

(1) a copy of the current strategic plan;

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(2) a description of each project receiving money from the trust fund ~~and Minnesota future resources fund~~ during the preceding biennium;

(3) a summary of any research project completed in the preceding biennium;

(4) recommendations to implement successful projects and programs into a state agency's standard operations;

(5) to the extent known by the commission, descriptions of the projects anticipated to be supported by the trust fund ~~and Minnesota future resources account~~ during the next biennium;

(6) the source and amount of all revenues collected and distributed by the commission, including all administrative and other expenses;

(7) a description of the assets and liabilities of the trust fund ~~and the Minnesota future resources fund~~;

(8) any findings or recommendations that are deemed proper to assist the legislature in formulating legislation;

(9) a list of all gifts and donations with a value over $1,000;

(10) a comparison of the amounts spent by the state for environment and natural resources activities through the most recent fiscal year; and

(11) a copy of the most recent compliance audit.

Sec. 151. Minnesota Statutes 2002, section 116P.10, is amended to read:

116P.10 [ROYALTIES, COPYRIGHTS, PATENTS.]

This section applies to projects supported by the trust fund~~, the Minnesota future resources fund,~~ and the oil overcharge money referred to in section 4.071, subdivision 2, each of which is referred to in this section as a "fund." The fund owns and shall take title to the percentage of a royalty, copyright, or patent resulting from a project supported by the fund equal to the percentage of the project's total funding provided by the fund. Cash receipts resulting from a royalty, copyright, or patent, or the sale of the fund's rights to a royalty, copyright, or patent, must be credited immediately to the principal of the fund. Receipts from Minnesota future resources fund projects must be credited to the trust fund. Before a project is included in the budget plan, the commission may vote to relinquish the ownership or rights to a royalty, copyright, or patent resulting from a project supported by the fund to the project's proposer when the amount of the original grant or loan, plus interest, has been repaid to the fund.

Sec. 152. Minnesota Statutes 2002, section 116P.14, subdivision 1, is amended to read:

Subdivision 1. [DESIGNATED AGENCY.] The department of natural resources is designated as the state agency to apply for, accept, receive, and disburse federal reimbursement funds and private funds, which are granted to the state of Minnesota from section 6 of the federal Land and Water Conservation Fund Act.

Sec. 153. Minnesota Statutes 2002, section 116P.14, subdivision 2, is amended to read:

Subd. 2. [STATE LAND AND WATER CONSERVATION ACCOUNT; CREATION.] A state land and water conservation account is created in the ~~Minnesota future~~ natural resources fund. All of the money made available to the state from funds granted under subdivision 1 shall be deposited in the state land and water conservation account.

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Sec. 154. Minnesota Statutes 2002, section 297A.94, is amended to read:

297A.94 [DEPOSIT OF REVENUES.]

(a) Except as provided in this section, the commissioner shall deposit the revenues, including interest and penalties, derived from the taxes imposed by this chapter in the state treasury and credit them to the general fund.

(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic account in the special revenue fund if:

(1) the taxes are derived from sales and use of property and services purchased for the construction and operation of an agricultural resource project; and

(2) the purchase was made on or after the date on which a conditional commitment was made for a loan guaranty for the project under section 41A.04, subdivision 3.

The commissioner of finance shall certify to the commissioner the date on which the project received the conditional commitment. The amount deposited in the loan guaranty account must be reduced by any refunds and by the costs incurred by the department of revenue to administer and enforce the assessment and collection of the taxes.

(c) The commissioner shall deposit the revenues, including interest and penalties, derived from the taxes imposed on sales and purchases included in section 297A.61, subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them as follows:

(1) first to the general obligation special tax bond debt service account in each fiscal year the amount required by section 16A.661, subdivision 3, paragraph (b); and

(2) after the requirements of clause (1) have been met, the balance to the general fund.

(d) The commissioner shall deposit the revenues, including interest and penalties, collected under section 297A.64, subdivision 5, in the state treasury and credit them to the general fund. By July 15 of each year the commissioner shall transfer to the highway user tax distribution fund an amount equal to the excess fees collected under section 297A.64, subdivision 5, for the previous calendar year.

(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and for fiscal year 2004 and thereafter, ~~87.1~~ 72.43 percent of the revenues, including interest and penalties, transmitted to the commissioner under section 297A.65, must be deposited by the commissioner in the state treasury as follows:

(1) 50 percent of the receipts must be deposited in the heritage enhancement account in the game and fish fund, and may be spent only on activities that improve, enhance, or protect fish and wildlife resources, including conservation, restoration, and enhancement of land, water, and other natural resources of the state;

(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and may be spent only for state parks and trails;

(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and may be spent only on metropolitan park and trail grants;

(4) three percent of the receipts must be deposited in the natural resources fund, and may be spent only on local trail grants; and

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(5) two percent of the receipts must be deposited in the natural resources fund, and may be spent only for the Minnesota zoological garden, the Como park zoo and conservatory, and the Duluth zoo.

(f) The revenue dedicated under paragraph (e) may not be used as a substitute for traditional sources of funding for the purposes specified, but the dedicated revenue shall supplement traditional sources of funding for those purposes. Land acquired with money deposited in the game and fish fund under paragraph (e) must be open to public hunting and fishing during the open season, except that in aquatic management areas or on lands where angling easements have been acquired, fishing may be prohibited during certain times of the year and hunting may be prohibited. At least 87 percent of the money deposited in the game and fish fund for improvement, enhancement, or protection of fish and wildlife resources under paragraph (e) must be allocated for field operations.

Sec. 155. Minnesota Statutes 2002, section 297F.10, subdivision 1, is amended to read:

Subdivision 1. [TAX AND USE TAX ON CIGARETTES.] Revenue received from cigarette taxes, as well as related penalties, interest, license fees, and miscellaneous sources of revenue shall be deposited by the commissioner in the state treasury and credited as follows:

(a) first to the general obligation special tax bond debt service account in each fiscal year the amount required to increase the balance on hand in the account on each December 1 to an amount equal to the full amount of principal and interest to come due on all outstanding bonds whose debt service is payable primarily from the proceeds of the tax to and including the second following July 1; and

(b) after the requirements of paragraph (a) have been met:,

(1) the revenue produced by one mill of the tax on cigarettes weighing not more than three pounds a thousand and two mills of the tax on cigarettes weighing more than three pounds a thousand must be credited to the Minnesota future resources fund; and

~~(2)~~ the balance of the revenues derived from taxes, penalties, and interest (under this chapter) and from license fees and miscellaneous sources of revenue shall be credited to the general fund.

Sec. 156. [WATER QUALITY ASSESSMENT PROCESS.]

Subdivision 1. [RULEMAKING.] (a) By January 1, 2006, the pollution control agency shall adopt rules under Minnesota Statutes, chapter 14, relating to water quality assessment for the waters of the state. The adopted rules must, at a minimum, satisfy paragraphs (b) to (h).

(b) The rules must apply to the determination of impaired waters as required by Section 303(d) of the Clean Water Act of 1977, United States Code, title 33, chapter 26, section 1313(d).

(c) The rules must define the terms "altered materially," "material increase," "material manner," "seriously impaired," and "significant increase," contained in Minnesota Rules, part 7050.0150, subpart 3.

(d) The rules must define the terms "normal fishery" and "normally present," contained in Minnesota Rules, part 7050.0150, subpart 3.

(e) The rules must specify that for purposes of the determination of impaired waters, the agency will make an impairment determination based only on pollution of waters of the state that has resulted in degradation of the physical, chemical, or biological qualities of the water body to the extent that attainable or previously existing beneficial uses are actually or potentially lost.

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(f) The rules must provide that when a person presents information adequately demonstrating that a beneficial use for the water body does not exist and is not attainable due to the natural condition of the water body, the agency shall initiate an administrative process for reclassification of the water to remove the beneficial use.

(g) The rules must provide that the agency, in considering impairment due to nutrients and application of nutrient objectives and effluent limitations related to riverine systems or riverine impoundments, must consider temperature and detention time effects on algal populations when the discharge of nutrients is expected to cause or contribute to algal growth that impairs existing or attainable uses.

(h) The agency shall apply Minnesota Rules, part 7050.0150, consistent with paragraphs (e) and (g).

Subd. 2. [REPORT TO LEGISLATURE.] By February 1, 2004, and by February 1, 2005, the commissioner shall report to the environment and natural resources finance committees of the house and senate on the status of discussions with stakeholders and the development of the rules required under subdivision 1.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 157. [MODIFICATIONS TO STORM WATER PERMIT FEES.]

(a) The pollution control agency shall collect water quality permit applications and annual fees as provided in the rules of the agency and in Laws 2002, chapter 220, article 8, section 15, as amended by Laws 2002, chapter 374, article 6, section 8, with the following modifications:

(1) the application fee for general industrial storm water permits is reduced to zero, and the annual fee is increased to $400;

(2) the application fee for general construction storm water permits is increased to $400; and

(3) application and annual fees for other general permits do not apply to general municipal separate storm sewer system permits.

(b) Nothing in this section limits the authority of a county, city, town, watershed district, or other special purpose district or political subdivision, to impose fees or to levy taxes or assessments to pay the cost of regulating or controlling storm water discharges to waters of the state.

(c) The permit fee modifications provided in this section are effective July 1, 2003. The pollution control agency shall adopt amended water quality permit fee rules under Minnesota Statutes, section 14.389, that incorporate the fee modifications provided in this section. The agency shall begin collecting fees in accordance with the modifications in this section on July 1, 2003, regardless of the status of those rules. Notwithstanding Minnesota Statutes, section 14.18, subdivision 2, the permit fee modifications in this section and the rule amendments incorporating them do not require further legislative approval.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 158. [UTILITY LICENSES.]

(a) The fees in Minnesota Rules, parts 6135.0400 to 6135.0810, adopted under Minnesota Statutes, section 84.415, are to be amended as follows:

(1) effective July 1, 2003, the application fee for a license to construct a utility crossing over or under public lands or over or under public waters is $500; and

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(2) effective July 1, 2004, the fee schedules of Minnesota Rules, parts 6135.0510 to 6135.0810, are increased to an amount equal to the current schedules plus an increase due to inflation from 1990 through 2002. The basis of increase shall be the unadjusted producer price index for all commodities, and the index value used shall be the annual average as revised four months after publication.

(b) The commissioner of natural resources shall amend Minnesota Rules, parts 6135.0400 to 6135.0810, according to this section and under Minnesota Statutes, section 14.388, clause (3). Except as provided in Minnesota Statutes, section 14.388, Minnesota Statutes, section 14.386, does not apply.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 159. [TRANSFER OF ASSETS; MINNESOTA CONSERVATION CORPS.]

The state's ownership interest in all tools, computers, and other supplies and equipment acquired by the commissioner of natural resources for the purpose of the conservation corps created under Minnesota Statutes, section 84.98, is transferred to the friends of the Minnesota conservation corps.

Sec. 160. [TRANSFER OF FUNDS; MINNESOTA CONSERVATION CORPS.]

The remaining balances in the Minnesota conservation corps: cooperative agreement, youthworks, Americorps administration, education vouchers, and gift accounts on June 30, 2003, are canceled and reappropriated to the friends of the Minnesota conservation corps.

Sec. 161. [COUNTY PROCESSING GRANT OBLIGATIONS.]

The outstanding obligations arising from the following specified processing facility grants provided by the office of environmental assistance to the listed counties are terminated, notwithstanding the provisions of Minnesota Statutes, section 16A.695:

(1) Fillmore county, for demonstration program grants awarded March 1987 and June 1991;

(2) St. Louis county, for a capital assistance program grant awarded September 1989;

(3) Wright county, for a capital assistance program grant awarded April 1990;

(4) Isanti, Chisago, Pine, Mille Lacs, and Kanabec counties, together as the east central solid waste commission, for a capital assistance program grant awarded September 1990, and a facility optimization grant awarded February 1994; and

(5) Pennington county, for a capital assistance program grant awarded in February 1992.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 162. [ENFORCEMENT AUTHORITY REPORT.]

The commissioner of natural resources must report to the chairs of the house of representatives and senate environment and judiciary policy committees by February 1, 2004, on clarification of conservation officer authority and any law enforcement authority for other employees of the department.

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Sec. 163. [CONSOLIDATION AND STREAMLINING REPORT.]

(a) By September 1, 2003, the pollution control agency, department of natural resources, office of environmental assistance, and board of water and soil resources shall report to the chairs of the senate environment and natural resources committee, the senate environment, agriculture, and economic budget division, house environment and natural resources policy committee, and house environment and natural resources finance committee on all of their reporting requirements that apply to counties.

(b) By January 15, 2004, the pollution control agency, department of natural resources, office of environmental assistance, and board of water and soil resources shall present a joint report to the chairs of the senate environment and natural resources committee, the senate environment, agriculture, and economic budget division, house environment and natural resources policy committee, and house environment and natural resources finance committee providing recommendations on streamlining and coordinating county reporting requirements.

(c) In developing the list of reporting requirements and recommendations on streamlining and coordinating county reporting requirements, the agencies must:

(1) consult with the association of Minnesota counties and other county representatives;

(2) identify the minimum information needed to measure county compliance with state law and rules;

(3) identify how agencies can prepare one or more annual reports summarizing information reported by counties;

(4) consider how the Internet can be used to collect and organize county reported information; and

(5) identify the costs and savings of implementing the recommendations contained in this report.

Sec. 164. [INDIVIDUAL SEWAGE TREATMENT SYSTEM STUDY.]

The commissioner of the pollution control agency, with input from stakeholders, must develop and report back to the house and senate environment and natural resources policy and finance committees by February 1, 2004, a ten-year plan to:

(1) locate systems that are imminent threats to public health and safety, and those with less than two feet of soil separation;

(2) upgrade the systems identified in clause (1); and

(3) institute a system to oversee compliance with individual sewage treatment maintenance requirements of Minnesota Rules, part 7080.0175, by July 1, 2005.

The ten-year plan must include funding options for clauses (1), (2), and (3) and shall recommend enhanced funding mechanisms for low-interest loans to homeowners for system upgrades.

Sec. 165. [ISTS PILOT PROGRAM.]

The pollution control agency shall, in conjunction with the association of Minnesota counties, designate three cooperating counties with waterbodies listed as impaired by fecal coliform bacteria, and within designated counties shall:

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(1) by July 1, 2007, complete an inventory of properties with individual sewage treatment systems that are an imminent threat to public health or safety due to surface water discharges of untreated sewage, and the inventory of properties may be phased over the period of the pilot project; and

(2) require compliance under the applicable requirements of this section by May 1, 2008. The pollution control agency may utilize cooperative agreements with the three pilot counties to meet the requirements of clauses (1) and (2).

Sec. 166. [PHOSPHORUS STUDY.]

The commissioner of the pollution control agency must study the concept of lowering phosphorus in the wastewater stream and the effect on water quality in the receiving waters and how to best assist local units of government in removing phosphorus at public wastewater treatment plants, including the establishment of a timeline for meeting the goal in Minnesota Statutes, section 115.42. The commissioner must review the rules on nutrients in cleaning agents under Minnesota Statutes, sections 116.23 and 116.24, and report the results of the study and rule review to the house of representatives and senate environment and natural resources policy and finance committees and commerce committees by February 1, 2004.

Sec. 167. [FOREST LAND OFF-HIGHWAY VEHICLE USE RECLASSIFICATION.]

Subdivision 1. [FOREST CLASSIFICATION STATUS REVIEW.] (a) By December 31, 2006, the commissioner of natural resources shall complete a review of the forest classification status of all state forests classified as managed, all forest lands under the authority of the commissioner as defined in Minnesota Statutes, section 89.001, subdivision 13, and lands managed by the commissioner under Minnesota Statutes, section 282.011. The review must be conducted on a forest-by-forest and area-by-area basis in accordance with the process and criteria under Minnesota Rules, part 6100.1950. After each forest is reviewed, the commissioner must change its status to limited or closed, and must provide a similar status for each of the other areas subject to review under this section after each individual review is completed.

(b) If the commissioner determines on January 1, 2005, that the review required under this section cannot be completed by December 31, 2006, the completion date for the review shall be extended to December 31, 2008. By January 15, 2005, the commissioner shall report to the chairs of the legislative committees with jurisdiction over natural resources policy and finance regarding the status of the process required by this section.

(c) Until December 31, 2010, the state forests and areas subject to review under this section are exempt from Minnesota Statutes, section 84.777, unless an individual forest or area has been classified as limited or closed.

Subd. 2. [TEMPORARY SUSPENSION OF ENVIRONMENTAL REVIEW.] The requirements for environmental review under Minnesota Statutes, section 116D.04, and rules of the environmental quality board are temporarily suspended for each reclassification and trail designation made under subdivision 1 until the commissioner has met all requirements under subdivision 1, or December 31, 2008, if the commissioner has failed to complete those requirements as required by law.

Subd. 3. [RULEMAKING.] By January 1, 2005, the environmental quality board shall adopt rules providing for threshold levels for environmental review for recreational trails.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

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Sec. 168. [STUDY OF OFF-HIGHWAY VEHICLE TRAILS.]

By January 15, 2005, the commissioner of natural resources must submit a report to the chairs of the legislative committees with jurisdiction over natural resources policy and finance concerning the compatibility of multiple uses of the outdoor recreation system. The report must address the current and future availability of recreational opportunities for nonmotorized and motorized activities, and recommend legislative and policy changes to preserve natural resources and to assure the continued availability of outdoor recreation opportunities for all residents of this state. The report must also address cost of maintenance, operation, and enforcement for the current off-highway vehicle trails system, including, but not limited to, how many miles of trails the department's off-highway vehicle budget will support. The report must include:

(1) a detailed discussion of sources of revenue for trails;

(2) an analysis of recent and projected expenditures from the off-highway vehicle accounts;

(3) information regarding all other sources of revenue used for off-highway vehicle purposes; and

(4) a current inventory of all the state forest roads and access routes, including designated off-highway vehicle routes and all motorized and nonmotorized trails.

Sec. 169. [CONTINUOUS TRAIL DESIGNATION.]

(a) The commissioner of natural resources shall locate, plan, design, map, construct, designate, and sign a new trail for use by all-terrain vehicles and off-highway motorcycles of not less than 70 continuous miles in length on any land owned by the state or in cooperation with any county on land owned by that county or on a combination of any of these lands. This new trail shall be ready for use by April 1, 2007.

(b) All funding for this new trail shall come from the all-terrain vehicle dedicated account and is appropriated each year as needed.

(c) This new trail shall have at least two areas of access complete with appropriate parking for vehicles and trailers and enough room for loading and unloading all-terrain vehicles. Some existing trails, that are strictly all-terrain vehicle trails, and are not inventoried forest roads, may be incorporated into the design of this new all-terrain vehicle trail. This new trail may be of a continuous loop design and shall provide for spurs to other all-terrain vehicle trails as long as those spurs do not count toward the 70 continuous miles of this new all-terrain vehicle trail. Four rest areas shall be provided along the way.

Sec. 170. [WELL DISCLOSURE IN WASHINGTON COUNTY.]

Before signing an agreement to sell or transfer real property in Washington county that is not served by a municipal water system, the seller must state in writing to the buyer whether, to the seller's knowledge, the property is located within a special well construction area designated by the commissioner of health under Minnesota Rules, part 4725.3650. If the disclosure under Minnesota Statutes, section 103I.235, subdivision 1, paragraph (a), states that there is an unsealed well on the property, the disclosure required under this clause must be made regardless of whether the property is served by a municipal water system.

[EFFECTIVE DATE.] This section is effective the day after the governing body of Washington county and its chief clerical officer timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3. It applies to transactions for which purchase agreements are entered into after that date.

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Sec. 171. [EXPIRATION OF GAME AND FISH AGENT LICENSES.]

Electronic game and fish license agent agreements that are scheduled to expire in February 2004 must be extended by the commissioner of natural resources until June 30, 2004.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 172. [TEMPORARY PETROFUND FEE EXEMPTION FOR MINNESOTA COMMERCIAL AIRLINES.]

(a) A commercial airline providing regularly scheduled jet service and with its corporate headquarters in Minnesota is exempt from the fee established in Minnesota Statutes, section 115C.08, subdivision 3, until July 1, 2005, provided the airline develops a plan approved by the commissioner of commerce demonstrating that the savings from this exemption will go towards minimizing job losses in Minnesota, and to support the airline's efforts to avoid filing for federal bankruptcy protections.

(b) A commercial airline exempted from the fee is ineligible to receive reimbursement under Minnesota Statutes, chapter 115C, until July 1, 2005. A commercial airline that has a release during the fee exemption period is ineligible to receive reimbursement under Minnesota Statutes, chapter 115C, for the costs incurred in response to that release.

Sec. 173. [STATE AGENCY REIMBURSEMENT.]

State agencies that incurred reimbursable costs from 1990 to 2002 in responding to a petroleum tank release and have not submitted an application for reimbursement to the petroleum tank release compensation board as of the effective date of this section shall submit an application for reimbursement by January 1, 2005. State agencies that receive reimbursement from the board must deposit reimbursement received from the petroleum tank release cleanup fund in the general fund or other state fund from which the agency expended funds for this purpose.

Sec. 174. [USE OF MOTORIZED DEVICES ON STATE NONMOTORIZED TRAILS BY PHYSICALLY DISABLED INDIVIDUALS; REVIEW.]

By January 15, 2004, the commissioner of natural resources shall complete a review of the use of motorized devices on nonmotorized state trails by physically disabled individuals and report the results to the chairs of the legislative committees with jurisdiction over natural resources policy and finance.

Sec. 175. [REVISOR'S INSTRUCTION.]

The revisor of statutes shall change the reference in Minnesota Rules, part 8420.0740, subpart 1, item I, subitem (3), from "8420.0720, subpart 8a" to "8420.0720, subpart 8."

Sec. 176. [REPEALER.]

(a) Minnesota Statutes 2002, sections 1.31; 1.32; 84.0887; 84.98; 84.99; 103B.311, subdivisions 5, 6, and 7; 103B.315, subdivisions 1, 2, 3, and 7; 103B.321, subdivision 3; and 103B.3369, subdivision 3, are repealed.

(b) Minnesota Statutes 2002, section 97A.105, subdivisions 3a and 3b, are repealed on January 1, 2004.

(c) Minnesota Rules, parts 9300.0010; 9300.0020; 9300.0030; 9300.0040; 9300.0050; 9300.0060; 9300.0070; 9300.0080; 9300.0090; 9300.0100; 9300.0110; 9300.0120; 9300.0130; 9300.0140; 9300.0150; 9300.0160; 9300.0170; 9300.0180; 9300.0190; 9300.0200; and 9300.0210, are repealed.

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ARTICLE 2

ENVIRONMENTAL FUND CHANGES

Section 1. Minnesota Statutes 2002, section 16A.531, subdivision 1, is amended to read:

Subdivision 1. [ENVIRONMENTAL FUND.] There is created in the state treasury an environmental fund as a special revenue fund for deposit of receipts from environmentally related taxes, fees, and ~~activities conducted by the state~~ other sources as provided in subdivision 1a.

Sec. 2. Minnesota Statutes 2002, section 16A.531, is amended by adding a subdivision to read:

Subd. 1a. [REVENUES.] The following revenues must be deposited in the environmental fund:

(1) all revenue from the motor vehicle transfer fee imposed under section 115A.908;

(2) all fees collected under section 116.07, subdivision 4d;

(3) all money collected by the pollution control agency in enforcement matters as provided in section 115.073;

(4) all revenues from license fees for individual sewage treatment systems under section 115.56;

(5) all loan repayments deposited under section 115A.0716;

(6) all revenue from pollution prevention fees imposed under section 115D.12;

(7) all loan repayments deposited under section 116.994;

(8) all fees collected under section 116C.834;

(9) revenue collected from the solid waste management tax pursuant to chapter 297H;

(10) fees collected under section 473.844; and

(11) interest accrued on the fund.

Sec. 3. Minnesota Statutes 2002, section 115.073, is amended to read:

115.073 [ENFORCEMENT FUNDING.]

Except as provided in ~~sections 115B.20, subdivision 4, clause (2);~~ section 115C.05~~; and 473.845, subdivision 8~~, all money recovered by the state under this chapter and chapters 115A and 116, including civil penalties and money paid under an agreement, stipulation, or settlement, excluding money paid for past due fees or taxes, up to the amount appropriated for implementation of Laws 1991, chapter 347, must be deposited in the state treasury and credited to the environmental fund.

Sec. 4. Minnesota Statutes 2002, section 115.56, subdivision 4, is amended to read:

Subd. 4. [LICENSE FEE.] The fee for a license required under subdivision 2 is $100 per year. Revenue from the fees must be credited to the environmental fund and is exempt from section 16A.1285.

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Sec. 5. Minnesota Statutes 2002, section 115A.0716, subdivision 3, is amended to read:

Subd. 3. [REVOLVING ACCOUNT.] ~~An environmental assistance revolving account is established in the environmental fund.~~ All repayments of loans awarded under this subdivision, including principal and interest, must be ~~deposited into~~ credited to the ~~account~~ environmental fund. Money deposited in the ~~account~~ fund under this section is annually appropriated to the director for loans for purposes identified in subdivisions 1 and 2.

Sec. 6. Minnesota Statutes 2002, section 115A.9651, subdivision 6, is amended to read:

Subd. 6. [PRODUCT REVIEW REPORTS.] (a) Except as provided under subdivision 7, the manufacturer, or an association of manufacturers, of any specified product distributed for sale or use in this state that is not listed pursuant to subdivision 4 shall submit a product review report and fee as provided in paragraph (c) to the commissioner for each product by July 1, 1998. Each product review report shall contain at least the following:

(1) a policy statement articulating upper management support for eliminating or reducing intentional introduction of listed metals into its products;

(2) a description of the product and the amount of each listed metal distributed for use in this state;

(3) a description of past and ongoing efforts to eliminate or reduce the listed metal in the product;

(4) an assessment of options available to reduce or eliminate the intentional introduction of the listed metal including any alternatives to the specified product that do not contain the listed metal, perform the same technical function, are commercially available, and are economically practicable;

(5) a statement of objectives in numerical terms and a schedule for achieving the elimination of the listed metals and an environmental assessment of alternative products;

(6) a listing of options considered not to be technically or economically practicable; and

(7) certification attesting to the accuracy of the information in the report signed and dated by an official of the manufacturer or user.

If the manufacturer fails to submit a product review report, a user of a specified product may submit a report and fee which comply with this subdivision by August 15, 1998.

(b) By July 1, 1999, and annually thereafter until the commissioner takes action under subdivision 9, the manufacturer or user must submit a progress report and fee as provided in paragraph (c) updating the information presented under paragraph (a).

(c) The fee shall be $295 for each report. The fee shall be deposited in the state treasury and credited to the environmental fund. The fee is exempt from section 16A.1285.

(d) Where it cannot be determined from a progress report submitted by a person pursuant to Laws 1994, chapter 585, section 30, subdivision 2, paragraph (e), the number of products for which product review reports are due under this subdivision, the commissioner shall have the authority to determine, after consultation with that person, the number of products for which product review reports are required.

(e) The commissioner shall summarize, aggregate, and publish data reported under paragraphs (a) and (b) annually.

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(f) A product that is the subject of a recommendation by the Toxics in Packaging Clearinghouse, as administered by the Council of State Governments, is exempt from this section.

Sec. 7. Minnesota Statutes 2002, section 115B.17, subdivision 6, is amended to read:

Subd. 6. [RECOVERY OF EXPENSES.] Any reasonable and necessary expenses incurred by the agency or commissioner pursuant to this section, including all response costs, and administrative and legal expenses, may be recovered in a civil action brought by the attorney general against any person who may be liable under section 115B.04 or any other law. The agency's certification of expenses shall be prima facie evidence that the expenses are reasonable and necessary. Any expenses incurred pursuant to this section which are recovered by the attorney general pursuant to section 115B.04 or any other law, including any award of attorneys fees, shall be deposited in the remediation fund ~~and credited to a special account for additional response actions as provided in section 115B.20, subdivision 2, clause (2) or (4)~~.

Sec. 8. Minnesota Statutes 2002, section 115B.17, subdivision 7, is amended to read:

Subd. 7. [ACTIONS RELATING TO NATURAL RESOURCES.] For the purpose of this subdivision, the state is the trustee of the air, water and wildlife of the state. An action pursuant to section 115B.04 for damages with respect to air, water or wildlife may be brought by the attorney general in the name of the state as trustee for those natural resources. Any damages recovered by the attorney general pursuant to section 115B.04 or any other law for injury to, destruction of, or loss of natural resources resulting from the release of a hazardous substance, or a pollutant or contaminant, shall be deposited in the ~~account~~ remediation fund.

Sec. 9. Minnesota Statutes 2002, section 115B.17, subdivision 14, is amended to read:

Subd. 14. [REQUESTS FOR REVIEW, INVESTIGATION, AND OVERSIGHT.] (a) The commissioner may, upon request, assist a person in determining whether real property has been the site of a release or threatened release of a hazardous substance, pollutant, or contaminant. The commissioner may also assist in, or supervise, the development and implementation of reasonable and necessary response actions. Assistance may include review of agency records and files, and review and approval of a requester's investigation plans and reports and response action plans and implementation.

(b) Except as otherwise provided in this paragraph, the person requesting assistance under this subdivision shall pay the agency for the agency's cost, as determined by the commissioner, of providing assistance. A state agency, political subdivision, or other public entity is not required to pay for the agency's cost to review agency records and files. Money received by the agency for assistance under this section must be deposited in the ~~environmental response, compensation, and compliance~~ remediation fund and is exempt from section 16A.1285.

(c) When a person investigates a release or threatened release in accordance with an investigation plan approved by the commissioner under this subdivision, the investigation does not associate that person with the release or threatened release for the purpose of section 115B.03, subdivision 3, clause (4).

Sec. 10. Minnesota Statutes 2002, section 115B.17, subdivision 16, is amended to read:

Subd. 16. [DISPOSITION OF PROPERTY ACQUIRED FOR RESPONSE ACTION.] (a) If the commissioner determines that real or personal property acquired by the agency for response action is no longer needed for response action purposes, the commissioner may:

(1) transfer the property to the commissioner of administration to be disposed of in the manner required for other surplus property subject to conditions the commissioner determines necessary to protect the public health and welfare or the environment, or to comply with federal law;

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(2) transfer the property to another state agency, a political subdivision, or special purpose district as provided in paragraph (b); or

(3) if required by federal law, take actions and dispose of the property as required by federal law.

(b) If the commissioner determines that real or personal property acquired by the agency for response action must be operated, maintained, or monitored after completion of other phases of the response action, the commissioner may transfer ownership of the property to another state agency, a political subdivision, or special purpose district that agrees to accept the property. A state agency, political subdivision, or special purpose district is authorized to accept and implement the terms and conditions of a transfer under this paragraph. The commissioner may set terms and conditions for the transfer that the commissioner considers reasonable and necessary to ensure proper operation, maintenance, and monitoring of response actions, protect the public health and welfare and the environment, and comply with applicable federal and state laws and regulations. The state agency, political subdivision, or special purpose district to which the property is transferred is not liable under this chapter solely as a result of acquiring the property or acting in accordance with the terms and conditions of the transfer.

(c) If the agency acquires property under subdivision 15, the commissioner may lease or grant an easement in the property to a person during the implementation of response actions if the lease or easement is compatible with or necessary for response action implementation.

(d) The proceeds of a sale, lease, or other transfer of property under this subdivision by the commissioner or by the commissioner of administration shall be deposited in the ~~environmental response, compensation, and compliance account~~ remediation fund. Any share of the proceeds that the agency is required by federal law or regulation to reimburse to the federal government is appropriated from the account to the agency for that purpose. Except for section 94.16, subdivision 2, the provisions of section 94.16 do not apply to real property sold by the commissioner of administration which was acquired under subdivision 15.

Sec. 11. Minnesota Statutes 2002, section 115B.19, is amended to read:

115B.19 [~~PURPOSES OF ACCOUNT AND TAXES~~ PURPOSE OF FUND.]

In establishing the ~~environmental response, compensation and compliance account~~ remediation fund in section ~~115B.20 and imposing taxes in section 115B.22~~ 116.155 it is the purpose of the legislature to:

(1) encourage treatment and disposal of hazardous waste in a manner that adequately protects the public health or welfare or the environment;

(2) encourage responsible parties to provide the response actions necessary to protect the public and the environment from the effects of the release of hazardous substances;

(3) encourage the use of alternatives to land disposal of hazardous waste including resource recovery, recycling, neutralization, and reduction;

(4) provide state agencies with the financial resources needed to prepare and implement an effective and timely state response to the release of hazardous substances, including investigation, planning, removal and remedial action;

(5) compensate for increased governmental expenses and loss of revenue and to provide other appropriate assistance to mitigate any adverse impact on communities in which commercial hazardous waste processing or disposal facilities are located under the siting process provided in chapter 115A;

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(6) recognize the environmental and public health costs of land disposal of solid waste and of the use and disposal of hazardous substances and to place the burden of financing state hazardous waste management activities on those whose products and services contribute to hazardous waste management problems and increase the risks of harm to the public and the environment.

Sec. 12. Minnesota Statutes 2002, section 115B.20, is amended to read:

115B.20 [~~ENVIRONMENTAL RESPONSE, COMPENSATION, AND COMPLIANCE ACCOUNT~~ ACTIONS USING MONEY FROM REMEDIATION FUND.]

Subdivision 1. [ESTABLISHMENT.] (a) The environmental response, compensation, and compliance account is in the environmental fund in the state treasury and may be spent only for the purposes provided in subdivision 2.

(b) The commissioner of finance shall administer a response account for the agency and the commissioner of agriculture to take removal, response, and other actions authorized under subdivision 2, clauses (1) to (4) and (9) to (11). The commissioner of finance shall transfer money from the response account to the agency and the commissioner of agriculture to take actions required under subdivision 2, clauses (1) to (4) and (9) to (11).

(c) The commissioner of finance shall administer the account in a manner that allows the commissioner of agriculture and the agency to utilize the money in the account to implement their removal and remedial action duties as effectively as possible.

(d) Amounts appropriated to the commissioner of finance under this subdivision shall not be included in the department of finance budget but shall be included in the pollution control agency and department of agriculture budgets.

(e) All money recovered by the state under section 115B.04 or any other law for injury to, destruction of, or loss of natural resources resulting from the release of a hazardous substance, or a pollutant or contaminant, must be credited to the environmental response, compensation, and compliance account in the environmental fund and is appropriated to the commissioner of natural resources for purposes of subdivision 2, clause (5), consistent with any applicable term of judgments, consent decrees, consent orders, or other administrative actions requiring payments to the state for such purposes. Before making an expenditure of money appropriated under this paragraph, the commissioner of natural resources shall provide written notice of the proposed expenditure to the chairs of the senate committee on finance, the house of representatives committee on ways and means, the finance division of the senate committee on environment and natural resources, and the house of representatives committee on environment and natural resources finance.

Subd. 2. [PURPOSES FOR WHICH MONEY MAY BE SPENT.] ~~Subject to appropriation by the legislature the money in the account~~ Money appropriated from the remediation fund under section 116.155, subdivision 2, paragraph (a), clause (1), may be spent only for ~~any of~~ the following purposes:

(1) preparation by the agency and the commissioner of agriculture for taking removal or remedial action under section 115B.17, or under chapter 18D, including investigation, monitoring and testing activities, enforcement and compliance efforts relating to the release of hazardous substances, pollutants or contaminants under section 115B.17 or 115B.18, or chapter 18D;

(2) removal and remedial actions taken or authorized by the agency or the commissioner of the pollution control agency under section 115B.17, or taken or authorized by the commissioner of agriculture under chapter 18D including related enforcement and compliance efforts under section 115B.17 or 115B.18, or chapter 18D, and payment of the state share of the cost of remedial action which may be carried out under a cooperative agreement with the federal government pursuant to the federal Superfund Act, under United States Code, title 42, section 9604(c)(3) for actions related to facilities other than commercial hazardous waste facilities located under the siting authority of chapter 115A;

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(3) reimbursement to any private person for expenditures made before July 1, 1983, to provide alternative water supplies deemed necessary by the agency or the commissioner of agriculture and the department of health to protect the public health from contamination resulting from the release of a hazardous substance;

(4) removal and remedial actions taken or authorized by the agency or the commissioner of agriculture or the pollution control agency under section 115B.17, or chapter 18D, including related enforcement and compliance efforts under section 115B.17 or 115B.18, or chapter 18D, and payment of the state share of the cost of remedial action which may be carried out under a cooperative agreement with the federal government pursuant to the federal Superfund Act, under United States Code, title 42, section 9604(c)(3) for actions related to commercial hazardous waste facilities located under the siting authority of chapter 115A;

~~(5)~~ assessment and recovery of natural resource damages by the agency and the commissioners of natural resources and administration, and planning and implementation by the commissioner of natural resources of the rehabilitation, restoration, or acquisition of natural resources to remedy injuries or losses to natural resources resulting from the release of a hazardous substance; before implementing a project to rehabilitate, restore, or acquire natural resources under this clause, the commissioner of natural resources shall provide written notice of the proposed project to the chairs of the senate and house of representatives committees with jurisdiction over environment and natural resources finance;

(6) inspection, monitoring, and compliance efforts by the agency, or by political subdivisions with agency approval, of commercial hazardous waste facilities located under the siting authority of chapter 115A;

(7) grants by the agency or the office of environmental assistance to demonstrate alternatives to land disposal of hazardous waste including reduction, separation, pretreatment, processing and resource recovery, for education of persons involved in regulating and handling hazardous waste;

~~(8) grants by the agency to study the extent of contamination and feasibility of cleanup of hazardous substances and pollutants or contaminants in major waterways of the state;~~

~~(9)~~ (5) acquisition of a property interest under section 115B.17, subdivision 15;

~~(10)~~ (6) reimbursement, in an amount to be determined by the agency in each case, to a political subdivision that is not a responsible person under section 115B.03, for reasonable and necessary expenditures resulting from an emergency caused by a release or threatened release of a hazardous substance, pollutant, or contaminant; and

~~(11)~~ (7) reimbursement to a political subdivision for expenditures in excess of the liability limit under section 115B.04, subdivision 4.

Subd. 3. [LIMIT ON CERTAIN EXPENDITURES.] The commissioner of agriculture or the pollution control agency or the agency may not spend any money under subdivision 2, clause (2) ~~or (4)~~, for removal or remedial actions to the extent that the costs of those actions may be compensated from any fund established under the Federal Superfund Act, United States Code, title 42, section 9600 et seq. The commissioner of agriculture or the pollution control agency or the agency shall determine the extent to which any of the costs of those actions may be compensated under the federal act based on the likelihood that the compensation will be available in a timely fashion. In making this determination the commissioner of agriculture or the pollution control agency or the agency shall take into account:

(1) the urgency of the removal or remedial actions and the priority assigned under the Federal Superfund Act to the release which necessitates those actions;

(2) the availability of money in the funds established under the Federal Superfund Act; and

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(3) the consistency of any compensation for the cost of the proposed actions under the Federal Superfund Act with the national contingency plan, if such a plan has been adopted under that act.

~~Subd. 4. [REVENUE SOURCES.] Revenue from the following sources shall be deposited in the account:~~

~~(1) the proceeds of the taxes imposed pursuant to section 115B.22, including interest and penalties;~~

(2) all money recovered by the state under sections 115B.01 to 115B.18 or under any other statute or rule related to the regulation of hazardous waste or hazardous substances, including civil penalties and money paid under any agreement, stipulation or settlement but excluding fees imposed under section 116.12;

~~(3) all interest attributable to investment of money deposited in the account; and~~

~~(4) all money received in the form of gifts, grants, reimbursement or appropriation from any source for any of the purposes provided in subdivision 2, except federal grants.~~

~~Subd. 5. [RECOMMENDATION.] The commissioner of agriculture shall make recommendations to the standing legislative committees on finance and appropriations regarding appropriations from the account.~~

Subd. 6. [REPORT TO LEGISLATURE.] Each year, the commissioner of agriculture and the agency shall submit to the senate finance committee, the house ways and means committee, the environment and natural resources committees of the senate and house of representatives, the finance division of the senate committee on environment and natural resources, and the house of representatives committee on environment and natural resources finance, and the environmental quality board a report detailing the activities for which money ~~from the account~~ has been spent pursuant to this section during the previous fiscal year.

Sec. 13. Minnesota Statutes 2002, section 115B.22, subdivision 7, is amended to read:

Subd. 7. [DISPOSITION OF PROCEEDS.] After reimbursement to the department of revenue for costs incurred in administering sections 115B.22 and 115B.24, the proceeds of the taxes imposed under this section including any interest and penalties shall be deposited in the environmental ~~response, compensation, and compliance account~~ fund.

Sec. 14. Minnesota Statutes 2002, section 115B.25, subdivision 1a, is amended to read:

Subd. 1a. [~~ACCOUNT~~ FUND.] Except when another fund or account is specified, "~~account~~ fund" means the ~~environmental response, compensation, and compliance account~~ remediation fund established in section ~~115B.20~~ 116.155.

Sec. 15. Minnesota Statutes 2002, section 115B.25, subdivision 4, is amended to read:

Subd. 4. [ELIGIBLE PERSON.] "Eligible person" means a person who is eligible to file a claim with the ~~account~~ fund under section 115B.29.

Sec. 16. Minnesota Statutes 2002, section 115B.26, is amended to read:

115B.26 [~~ENVIRONMENTAL RESPONSE, COMPENSATION, AND COMPLIANCE ACCOUNT~~ PAYMENT OF CLAIMS.]

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Subd. 2. [APPROPRIATION.] The amount necessary to pay claims of compensation granted by the agency under sections 115B.25 to 115B.37 is must be directly appropriated to the agency from the ~~account~~ fund by the legislature. The agency shall submit claims for compensation to the legislature at the next legislative session.

Subd. 3. [PAYMENT OF CLAIMS WHEN ACCOUNT INSUFFICIENT.] If the amount of the claims granted exceeds the amount in the account, the agency shall request a transfer from the general contingent account to the environmental response, compensation, and compliance account as provided in section 3.30. If no transfer is approved, the agency shall pay the claims which have been granted in the order granted only to the extent of the money remaining in the account. The agency shall pay the remaining claims which have been granted after additional money is credited to the account.

Subd. 4. [~~ACCOUNT~~ TRANSFER REQUEST.] At the end of each fiscal year, the agency shall submit a request to the petroleum tank release compensation board for transfer to the ~~account~~ fund from the petroleum tank release cleanup fund under section 115C.08, subdivision 5, of an amount equal to the compensation granted by the agency for claims related to petroleum releases plus administrative costs related to determination of those claims.

Sec. 17. Minnesota Statutes 2002, section 115B.30, is amended to read:

115B.30 [ELIGIBLE INJURY AND DAMAGE.]

Subdivision 1. [ELIGIBLE PERSONAL INJURY.] (a) A personal injury which could reasonably have resulted from exposure to a harmful substance released from a facility where it was placed or came to be located is eligible for compensation from the ~~account~~ fund if:

(1) it is a medically verified chronic or progressive disease, illness, or disability such as cancer, organic nervous system disorders, or physical deformities, including malfunctions in reproduction, in humans or their offspring, or death; or

(2) it is a medically verified acute disease or condition that typically manifests itself rapidly after a single exposure or limited exposures and the persons responsible for the release of the harmful substance are unknown or cannot with reasonable diligence be determined or located or a judgment would not be satisfied in whole or in part against the persons determined to be responsible for the release of the harmful substance.

(b) A personal injury is not compensable from the account if:

(1) the injury is compensable under the workers' compensation law, chapter 176;

(2) the injury arises out of the claimant's use of a consumer product;

(3) the injury arises out of an exposure that occurred or is occurring outside the geographical boundaries of the state;

(4) the injury results from the release of a harmful substance for which the claimant is a responsible person; or

(5) the injury is an acute disease or condition other than one described in paragraph (a).

Subd. 2. [ELIGIBLE PROPERTY DAMAGE.] Damage to real property in Minnesota owned by the claimant is eligible for compensation from the ~~account~~ fund if the damage results from the presence in or on the property of a harmful substance released from a facility where it was placed or came to be located. Damage to property is not eligible for compensation from the ~~account~~ fund if it results from the release of a harmful substance for which the claimant is a responsible person.

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Subd. 3. [TIME FOR FILING CLAIM.] (a) A claim is not eligible for compensation from the ~~account~~ fund unless it is filed with the agency within the time provided in this subdivision.

(b) A claim for compensation for personal injury must be filed within two years after the injury and its connection to exposure to a harmful substance was or reasonably should have been discovered.

(c) A claim for compensation for property damage must be filed within two years after the full amount of compensable losses can be determined.

(d) Notwithstanding the provisions of this subdivision, claims for compensation that would otherwise be barred by any statute of limitations provided in sections 115B.25 to 115B.37 may be filed not later than January 1, 1992.

Sec. 18. Minnesota Statutes 2002, section 115B.31, subdivision 1, is amended to read:

Subdivision 1. [SUBSEQUENT ACTION OR CLAIM PROHIBITED IN CERTAIN CASES.] (a) A person who has settled a claim for an eligible injury or eligible property damage with a responsible person, either before or after bringing an action in court for that injury or damage, may not file a claim with the account for the same injury or damage. A person who has received a favorable judgment in a court action for an eligible injury or eligible property damage may not file a claim with the ~~account~~ fund for the same injury or damage, unless the judgment cannot be satisfied in whole or in part against the persons responsible for the release of the harmful substance. A person who has filed a claim with the agency or its predecessor, the harmful substance compensation board, may not file another claim with the agency for the same eligible injury or damage, unless the claim was inactivated by the agency or board as provided in section 115B.32, subdivision 1.

(b) A person who has filed a claim with the agency or board for an eligible injury or damage, and who has received and accepted an award from the agency or board, is precluded from bringing an action in court for the same eligible injury or damage.

(c) A person who files a claim with the agency for personal injury or property damage must include all known claims eligible for compensation in one proceeding before the agency.

Sec. 19. Minnesota Statutes 2002, section 115B.31, subdivision 3, is amended to read:

Subd. 3. [SUBROGATION BY STATE.] The state is subrogated to all the claimant's rights under statutory or common law to recover losses compensated from the ~~account~~ fund from other sources, including responsible persons as defined in section 115B.03. The state may bring a subrogation action in its own name or in the name of the claimant. The state may not bring a subrogation action against a person who was a party in a court action by the claimant for the same eligible injury or damage, unless the claimant dismissed the action prior to trial. Money recovered by the state under this subdivision must be deposited in the ~~account~~ fund. Nothing in sections 115B.25 to 115B.37 shall be construed to create a standard of recovery in a subrogation action.

Sec. 20. Minnesota Statutes 2002, section 115B.31, subdivision 4, is amended to read:

Subd. 4. [SIMULTANEOUS CLAIM AND COURT ACTION PROHIBITED.] A claimant may not commence a court action to recover for any injury or damage for which the claimant seeks compensation from the ~~account~~ fund during the time that a claim is pending before the agency. A person may not file a claim with the agency for compensation for any injury or damage for which the claimant seeks to recover in a pending court action. The time for filing a claim under section 115B.30 or the statute of limitations for any civil action is suspended during the period of time that a claimant is precluded from filing a claim or commencing an action under this subdivision.

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Sec. 21. Minnesota Statutes 2002, section 115B.32, subdivision 1, is amended to read:

Subdivision 1. [FORM.] A claim for compensation from the ~~account~~ fund must be filed with the agency in the form required by the agency. When a claim does not include all the information required by subdivision 2 and applicable agency rules, the agency staff shall notify the claimant of the absence of the required information within 14 days of the filing of the claim. All required information must be received by the agency not later than 60 days after the claimant received notice of its absence or the claim will be inactivated and may not be resubmitted for at least one year following the date of inactivation. The agency may decide not to inactivate a claim under this subdivision if it finds serious extenuating circumstances.

Sec. 22. Minnesota Statutes 2002, section 115B.33, subdivision 1, is amended to read:

Subdivision 1. [STANDARD FOR PERSONAL INJURY.] The agency shall grant compensation to a claimant who shows that it is more likely than not that:

(1) the claimant suffers a medically verified injury that is eligible for compensation from the ~~account~~ fund and that has resulted in a compensable loss;

(2) the claimant has been exposed to a harmful substance;

(3) the release of the harmful substance from a facility where the substance was placed or came to be located could reasonably have resulted in the claimant's exposure to the substance in the amount and duration experienced by the claimant; and

(4) the injury suffered by the claimant can be caused or significantly contributed to by exposure to the harmful substance in an amount and duration experienced by the claimant.

Sec. 23. Minnesota Statutes 2002, section 115B.34, is amended to read:

115B.34 [COMPENSABLE LOSSES.]

Subdivision 1. [PERSONAL INJURY LOSSES.] Losses compensable by the ~~account~~ fund for personal injury are limited to:

(1) medical expenses directly related to the claimant's injury;

(2) up to two-thirds of the claimant's lost wages not to exceed $2,000 per month or $24,000 per year;

(3) up to two-thirds of a self-employed claimant's lost income, not to exceed $2,000 per month or $24,000 per year;

(4) death benefits to dependents which the agency shall define by rule subject to the following conditions:

(i) the rule adopted by the agency must establish a schedule of benefits similar to that established by section 176.111 and must not provide for the payment of benefits to dependents other than those dependents defined in section 176.111;

(ii) the total benefits paid to all dependents of a claimant must not exceed $2,000 per month;

(iii) benefits paid to a spouse and all dependents other than children must not continue for a period longer than ten years;

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(iv) payment of benefits is subject to the limitations of section 115B.36; and

(5) the value of household labor lost due to the claimant's injury or disease, which must be determined in accordance with a schedule established by the board by rule, not to exceed $2,000 per month or $24,000 per year.

Subd. 2. [PROPERTY DAMAGE LOSSES.] (a) Losses compensable by the ~~account~~ fund for property damage are limited to the following losses caused by damage to the principal residence of the claimant:

(1) the reasonable cost of replacing or decontaminating the primary source of drinking water for the property not to exceed the amount actually expended by the claimant or assessed by a local taxing authority, if the department of health has confirmed that the remedy provides safe drinking water and advised that the water not be used for drinking or determined that the replacement or decontamination of the source of drinking water was necessary, up to a maximum of $25,000;

(2) losses incurred as a result of a bona fide sale of the property at less than the appraised market value under circumstances that constitute a hardship to the owner, limited to 75 percent of the difference between the appraised market value and the selling price, but not to exceed $25,000; and

(3) losses incurred as a result of the inability of an owner in hardship circumstances to sell the property due to the presence of harmful substances, limited to the increase in costs associated with the need to maintain two residences, but not to exceed $25,000.

(b) In computation of the loss under paragraph (a), clause (3), the agency shall offset the loss by the amount of any income received by the claimant from the rental of the property.

(1) "appraised market value" means an appraisal of the market value of the property disregarding any decrease in value caused by the presence of a harmful substance in or on the property; and

(2) "hardship" means an urgent need to sell the property based on a special circumstance of the owner including catastrophic medical expenses, inability of the owner to physically maintain the property due to a physical or mental condition, and change of employment of the owner or other member of the owner's household requiring the owner to move to a different location.

(d) Appraisals are subject to agency approval. The agency may adopt rules governing approval of appraisals, criteria for establishing a hardship, and other matters necessary to administer this subdivision.

Sec. 24. Minnesota Statutes 2002, section 115B.36, is amended to read:

115B.36 [AMOUNT AND FORM OF PAYMENT.]

If the agency decides to grant compensation, it shall determine the net uncompensated loss payable to the claimant by computing the total amount of compensable losses payable to the claimant and subtracting the total amount of any compensation received by the claimant for the same injury or damage from other sources including, but not limited to, all forms of insurance and social security and any emergency award made by the agency. The agency shall pay compensation in the amount of the net uncompensated loss, provided that no claimant may receive more than $250,000. In the case of a death, the total amount paid to all persons on behalf of the claimant may not exceed $250,000.

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Compensation from the ~~account~~ fund may be awarded in a lump sum or in installments at the discretion of the agency.

Sec. 25. Minnesota Statutes 2002, section 115B.40, subdivision 4, is amended to read:

Subd. 4. [QUALIFIED FACILITY NOT UNDER CLEANUP ORDER; DUTIES.] (a) The owner or operator of a qualified facility that is not subject to a cleanup order shall:

(1) complete closure activities at the facility, or enter into a binding agreement with the commissioner to do so, as provided in paragraph (e), within one year from the date the owner or operator is notified by the commissioner under subdivision 3 of the closure activities that are necessary to properly close the facility in compliance with facility's permit, closure orders, or enforcement agreement with the agency, and with the solid waste rules in effect at the time the facility stopped accepting waste;

(2) undertake or continue postclosure care at the facility until the date of notice of compliance under subdivision 7;

(3) in the case of qualified facilities defined in section 115B.39, subdivision 2, paragraph (l), clause (1), transfer to the commissioner of revenue for deposit in the ~~solid waste~~ remediation fund established in section ~~115B.42~~ 116.155 any funds required for proof of financial responsibility under section 116.07, subdivision 4h, that remain after facility closure and any postclosure care and response action undertaken by the owner or operator at the facility including, if proof of financial responsibility is provided through a letter of credit or other financial instrument or mechanism that does not accumulate money in an account, the amount that would have accumulated had the owner or operator utilized a trust fund, less any amount used for closure, postclosure care, and response action at the facility; and

(4) in the case of qualified facilities defined in section 115B.39, subdivision 2, paragraph (l), clause (2), transfer to the commissioner of revenue for deposit in the ~~solid waste~~ remediation fund established in section ~~115B.42~~ 116.155 an amount of cash that is equal to the sum of their approved current contingency action cost estimate and the present value of their approved estimated remaining postclosure care costs required for proof of financial responsibility under section 116.07, subdivision 4h.

(b) The owner or operator of a qualified facility that is not subject to a cleanup order shall:

(1) in the case of qualified facilities defined in section 115B.39, subdivision 2, paragraph (l), clause (1), provide the commissioner with a copy of all applicable comprehensive general liability insurance policies and other liability policies relating to property damage, certificates, or other evidence of insurance coverage held during the life of the facility; and

(2) enter into a binding agreement with the commissioner to:

(i) in the case of qualified facilities defined in section 115B.39, subdivision 2, paragraph (l), clause (1), take any actions necessary to preserve the owner or operator's rights to payment or defense under insurance policies included in clause (1); cooperate with the commissioner in asserting claims under the policies; and, within 60 days of a request by the commissioner, but no earlier than July 1, 1996, assign only those rights under the policies related to environmental response costs;

(ii) cooperate with the commissioner or other persons acting at the direction of the commissioner in taking additional environmental response actions necessary to address releases or threatened releases and to avoid any action that interferes with environmental response actions, including allowing entry to the property and to the facility's records and allowing entry and installation of equipment; and

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(iii) refrain from developing or altering the use of property described in any permit for the facility except after consultation with the commissioner and in conformance with any conditions established by the commissioner for that property, including use restrictions, to protect public health and welfare and the environment.

(c) The owner or operator of a qualified facility defined in section 115B.39, subdivision 2, paragraph (l), clause (1), that is a political subdivision may use a portion of any funds established for response at the facility, which are available directly or through a financial instrument or other financial arrangement, for closure or postclosure care at the facility if funds available for closure or postclosure care are inadequate and shall assign the rights to any remainder to the commissioner.

(d) The agreement required in paragraph (b), clause (2), must be in writing and must apply to and be binding upon the successors and assigns of the owner. The owner shall record the agreement, or a memorandum approved by the commissioner that summarizes the agreement, with the county recorder or registrar of titles of the county where the property is located.

(e) A binding agreement entered into under paragraph (a), clause (1), may include a provision that the owner or operator will reimburse the commissioner for the costs of closing the facility to the standard required in that clause.

Sec. 26. Minnesota Statutes 2002, section 115B.41, subdivision 1, is amended to read:

Subdivision 1. [ALLOCATION AND RECOVERY OF COSTS.] (a) A person who is subject to the requirements in section 115B.40, subdivision 4 or 5, paragraph (b), is responsible for all environmental response costs incurred by the commissioner at or related to the facility until the date of notice of compliance under section 115B.40, subdivision 7. The commissioner may use any funds available for closure, postclosure care, and response action established by the owner or operator. If those funds are insufficient or if the owner or operator fails to assign rights to them to the commissioner, the commissioner may seek recovery of environmental response costs against the owner or operator in the county of Ramsey or in the county where the facility is located or where the owner or operator resides.

(b) In an action brought under this subdivision in which the commissioner prevails, the court shall award the commissioner reasonable attorney fees and other litigation expenses incurred by the commissioner to bring the action. All costs, fees, and expenses recovered under this subdivision must be deposited in the ~~solid waste~~ remediation fund established in section ~~115B.42~~ 116.155.

Sec. 27. Minnesota Statutes 2002, section 115B.41, subdivision 2, is amended to read:

Subd. 2. [ENVIRONMENTAL RESPONSE COSTS; LIENS.] All environmental response costs, including administrative and legal expenses, incurred by the commissioner at a qualified facility before the date of notice of compliance under section 115B.40, subdivision 7, constitute a lien in favor of the state upon any real property located in the state, other than homestead property, owned by the owner or operator who is subject to the requirements of section 115B.40, subdivision 4 or 5. A lien under this subdivision attaches when the environmental response costs are first incurred and continues until the lien is satisfied or becomes unenforceable as for an environmental lien under section 514.672. Notice, filing, and release of the lien are governed by sections 514.671 to 514.676, except where those requirements specifically are related to only cleanup action expenses as defined in section 514.671. Relative priority of a lien under this subdivision is governed by section 514.672, except that a lien attached to property that was included in any permit for the solid waste disposal facility takes precedence over all other liens regardless of when the other liens were or are perfected. Amounts received to satisfy all or a part of a lien must be deposited in the ~~solid waste~~ remediation fund.

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Sec. 28. Minnesota Statutes 2002, section 115B.41, subdivision 3, is amended to read:

Subd. 3. [LOCAL GOVERNMENT AID; OFFSET.] If an owner or operator fails to comply with section 115B.40, subdivision 4, or 5, paragraph (b), fails to remit payment of environmental response costs incurred by the commissioner before the date of notice of compliance under section 115B.40, subdivision 7, and is a local government unit, the commissioner may seek payment of the costs from any state aid payments, except payments made under section 115A.557, subdivision 1, otherwise due the local government unit. The commissioner of revenue, after being notified by the commissioner that the local government unit has failed to pay the costs and the amount due, shall pay an annual proportionate amount of the state aid payment otherwise payable to the local government unit into the ~~solid waste~~ remediation fund that will, over a period of no more than five years, satisfy the liability of the local government unit for the costs.

Sec. 29. Minnesota Statutes 2002, section 115B.42, subdivision 2, is amended to read:

Subd. 2. [EXPENDITURES.] ~~Money in the fund may be spent by~~ The commissioner may spend money from the remediation fund under section 116.155, subdivision 2, paragraph (a), clause (2), to:

(1) inspect permitted mixed municipal solid waste disposal facilities to:

(i) evaluate the adequacy of final cover, slopes, vegetation, and erosion control;

(ii) determine the presence and concentration of hazardous substances, pollutants or contaminants, and decomposition gases; and

(iii) determine the boundaries of fill areas;

(2) monitor and take, or reimburse others for, environmental response actions, including emergency response actions, at qualified facilities;

(3) acquire and dispose of property under section 115B.412, subdivision 3;

(4) recover costs under section 115B.39;

(5) administer, including providing staff and administrative support for, sections 115B.39 to 115B.445;

(6) enforce sections 115B.39 to 115B.445;

(7) ~~subject to appropriation, administer the agency's groundwater and solid waste management programs;~~

~~(8)~~ pay for private water supply well monitoring and health assessment costs of the commissioner of health in areas affected by unpermitted mixed municipal solid waste disposal facilities;

~~(9)~~ (8) reimburse persons under section 115B.43;

~~(10)~~ (9) reimburse mediation expenses up to a total of $250,000 annually or defense costs up to a total of $250,000 annually for third-party claims for response costs under state or federal law as provided in section 115B.414; and

~~(11)~~ (10) perform environmental assessments, up to $1,000,000, at unpermitted mixed municipal solid waste disposal facilities.

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Sec. 30. Minnesota Statutes 2002, section 115B.421, is amended to read:

115B.421 [CLOSED LANDFILL INVESTMENT FUND.]

The closed landfill investment fund is established in the state treasury. The fund consists of money credited to the fund, and interest and other earnings on money in the fund. The commissioner of finance shall transfer an initial amount of $5,100,000 from the balance in the solid waste fund beginning in fiscal year 2000 and shall continue to transfer $5,100,000 for each following fiscal year, ceasing after 2003. Beginning July 1, 2003, funds must be deposited as described in section 115B.445. The fund shall be managed to maximize long-term gain through the state board of investment. Money in the fund may be spent by the commissioner after fiscal year 2020 in accordance with ~~section 115B.42, subdivision 2, clauses (1) to (6)~~ sections 115B.39 to 115B.444.

Sec. 31. Minnesota Statutes 2002, section 115B.445, is amended to read:

115B.445 [DEPOSIT OF PROCEEDS.]

All amounts paid to the state by an insurer pursuant to any settlement under section 115B.443 or judgment under section 115B.444 must be deposited in the state treasury and credited equally to the ~~solid waste~~ remediation fund and the closed landfill investment fund.

[EFFECTIVE DATE.] This section is effective for all proceeds paid after June 30, 2001.

Sec. 32. Minnesota Statutes 2002, section 115B.48, subdivision 2, is amended to read:

Subd. 2. [DRY CLEANER ENVIRONMENTAL RESPONSE AND REIMBURSEMENT ACCOUNT; ACCOUNT.] "Dry cleaner environmental response and reimbursement account" or "account" means the dry cleaner environmental response and reimbursement account in the remediation fund established in ~~section~~ sections 115B.49 and 116.155.

Sec. 33. Minnesota Statutes 2002, section 115B.49, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The dry cleaner environmental response and reimbursement account is established as an account in the ~~state treasury~~ remediation fund.

Sec. 34. Minnesota Statutes 2002, section 115B.49, subdivision 3, is amended to read:

Subd. 3. [EXPENDITURES.] (a) Money in the account may ~~only~~ be used:

(1) for environmental response costs incurred by the commissioner under section 115B.50, subdivision 1;

(2) for reimbursement of amounts spent by the commissioner from the ~~environmental response, compensation, and compliance account~~ remediation fund for expenses described in clause (1);

(3) for reimbursements under section 115B.50, subdivision 2; and

(4) for administrative costs of the commissioner of revenue.

(b) Money in the account is appropriated to the commissioner for the purposes of this subdivision. The commissioner shall transfer funds to the commissioner of revenue sufficient to cover administrative costs pursuant to paragraph (a), clause (4).

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Sec. 35. Minnesota Statutes 2002, section 115D.12, subdivision 2, is amended to read:

Subd. 2. [FEES.] (a) Persons required by United States Code, title 42, section 11023, to submit a toxic chemical release form to the commission, and owners or operators of facilities listed in section 299K.08, subdivision 3, shall pay a pollution prevention fee of $150 for each toxic pollutant reported released plus a fee based on the total pounds of toxic pollutants reported as released from each facility. Facilities reporting less than 25,000 pounds annually of toxic pollutants released per facility shall be assessed a fee of $500. Facilities reporting annual releases of toxic pollutants in excess of 25,000 pounds shall be assessed a graduated fee at the rate of two cents per pound of toxic pollutants reported.

(b) Persons who generate more than 1,000 kilograms of hazardous waste per month but who are not subject to the fee under paragraph (a) must pay a pollution prevention fee of $500 per facility. Hazardous waste as used in this paragraph has the meaning given it in section 116.06, subdivision 11, and Minnesota Rules, chapter 7045.

(c) Fees required under this subdivision must be paid to the director by January 1 of each year. The fees shall be deposited in the state treasury and credited to the environmental fund.

(d) The fees under this subdivision are exempt from section 16A.1285.

Sec. 36. Minnesota Statutes 2002, section 116.03, subdivision 2, is amended to read:

Subd. 2. [ORGANIZATION OF OFFICE.] The commissioner shall organize the agency and employ such assistants and other officers, employees and agents as the commissioner may deem necessary to discharge the functions of the commissioner's office, define the duties of such officers, employees and agents, and delegate to them any of the commissioner's powers, duties, and responsibilities, subject to the commissioner's control and under such conditions as the commissioner may prescribe. The commissioner may also contract with, and enter into grant agreements with, persons, firms, corporations, the federal government and any agency or instrumentality thereof, the water research center of the University of Minnesota or any other instrumentality of such university, for doing any of the work of the commissioner's office~~, and~~. None of the provisions of chapter 16C, relating to bids, shall apply to such contracts.

Sec. 37. Minnesota Statutes 2002, section 116.07, subdivision 4d, is amended to read:

Subd. 4d. [PERMIT FEES.] (a) The agency may collect permit fees in amounts not greater than those necessary to cover the reasonable costs of developing, reviewing, and acting upon applications for agency permits and implementing and enforcing the conditions of the permits pursuant to agency rules. Permit fees shall not include the costs of litigation. The fee schedule must reflect reasonable and routine direct and indirect costs associated with permitting, implementation, and enforcement ~~costs~~. The agency may impose an additional enforcement fee to be collected for a period of up to two years to cover the reasonable costs of implementing and enforcing the conditions of a permit under the rules of the agency. Any money collected under this paragraph shall be deposited in the environmental fund.

(b) Notwithstanding paragraph (a), ~~and section 16A.1285, subdivision 2,~~ the agency shall collect an annual fee from the owner or operator of all stationary sources, emission facilities, emissions units, air contaminant treatment facilities, treatment facilities, potential air contaminant storage facilities, or storage facilities subject to the requirement to obtain a permit under subchapter V of the federal Clean Air Act, United States Code, title 42, section 7401 et seq., or section 116.081. The annual fee shall be used to pay for all direct and indirect reasonable costs, including attorney general costs, required to develop and administer the permit program requirements of subchapter V of the federal Clean Air Act, United States Code, title 42, section 7401 et seq., and sections of this chapter and the rules adopted under this chapter related to air contamination and noise. Those costs include the

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reasonable costs of reviewing and acting upon an application for a permit; implementing and enforcing statutes, rules, and the terms and conditions of a permit; emissions, ambient, and deposition monitoring; preparing generally applicable regulations; responding to federal guidance; modeling, analyses, and demonstrations; preparing inventories and tracking emissions; and providing information to the public about these activities.

(1) will result in the collection, in the aggregate, from the sources listed in paragraph (b), of an amount not less than $25 per ton of each volatile organic compound; pollutant regulated under United States Code, title 42, section 7411 or 7412 (section 111 or 112 of the federal Clean Air Act); and each pollutant, except carbon monoxide, for which a national primary ambient air quality standard has been promulgated;

(2) may result in the collection, in the aggregate, from the sources listed in paragraph (b), of an amount not less than $25 per ton of each pollutant not listed in clause (1) that is regulated under this chapter or air quality rules adopted under this chapter; and

(3) shall collect, in the aggregate, from the sources listed in paragraph (b), the amount needed to match grant funds received by the state under United States Code, title 42, section 7405 (section 105 of the federal Clean Air Act).

The agency must not include in the calculation of the aggregate amount to be collected under clauses (1) and (2) any amount in excess of 4,000 tons per year of each air pollutant from a source. The increase in air permit fees to match federal grant funds shall be a surcharge on existing fees. The commissioner may not collect the surcharge after the grant funds become unavailable. In addition, the commissioner shall use nonfee funds to the extent practical to match the grant funds so that the fee surcharge is minimized.

(d) To cover the reasonable costs described in paragraph (b), the agency shall provide in the rules promulgated under paragraph (c) for an increase in the fee collected in each year by the percentage, if any, by which the Consumer Price Index for the most recent calendar year ending before the beginning of the year the fee is collected exceeds the Consumer Price Index for the calendar year 1989. For purposes of this paragraph the Consumer Price Index for any calendar year is the average of the Consumer Price Index for all-urban consumers published by the United States Department of Labor, as of the close of the 12-month period ending on August 31 of each calendar year. The revision of the Consumer Price Index that is most consistent with the Consumer Price Index for calendar year 1989 shall be used.

(e) Any money collected under paragraphs (b) to (d) must be deposited in ~~an air quality account in~~ the environmental fund and must be used solely for the activities listed in paragraph (b).

(f) Persons who wish to construct or expand a facility may offer to reimburse the agency for the costs of staff overtime or consultant services needed to expedite permit review. The reimbursement shall be in addition to fees imposed by law ~~or rule~~. When the agency determines that it needs additional resources to review the permit application in an expedited manner, and that expediting the review would not disrupt permitting program priorities, the agency may accept the reimbursement. Reimbursements accepted by the agency are appropriated to the agency for the purpose of reviewing the permit application. Reimbursement by a permit applicant shall precede and not be contingent upon issuance of a permit and shall not affect the agency's decision on whether to issue or deny a permit, what conditions are included in a permit, or the application of state and federal statutes and rules governing permit determinations.

(g) The fees under this subdivision are exempt from section 16A.1285.

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Sec. 38. Minnesota Statutes 2002, section 116.07, subdivision 4h, is amended to read:

Subd. 4h. [FINANCIAL RESPONSIBILITY RULES.] (a) The agency shall adopt rules requiring the operator or owner of a solid waste disposal facility to submit to the agency proof of the operator's or owner's financial capability to provide reasonable and necessary response during the operating life of the facility and for 30 years after closure for a mixed municipal solid waste disposal facility or for a minimum of 20 years after closure, as determined by agency rules, for any other solid waste disposal facility, and to provide for the closure of the facility and postclosure care required under agency rules. Proof of financial responsibility is required of the operator or owner of a facility receiving an original permit or a permit for expansion after adoption of the rules. Within 180 days of the effective date of the rules or by July 1, 1987, whichever is later, proof of financial responsibility is required of an operator or owner of a facility with a remaining capacity of more than five years or 500,000 cubic yards that is in operation at the time the rules are adopted. Compliance with the rules and the requirements of paragraph (b) is a condition of obtaining or retaining a permit to operate the facility.

(b) A municipality, as defined in section 475.51, subdivision 2, including a sanitary district, that owns or operates a solid waste disposal facility that was in operation on May 15, 1989, may meet its financial responsibility for all or a portion of the contingency action portion of the reasonable and necessary response costs at the facility by pledging its full faith and credit to meet its responsibility.

The pledge must be made in accordance with the requirements in chapter 475 for issuing bonds of the municipality, and the following additional requirements:

(1) The governing body of the municipality shall enact an ordinance that clearly accepts responsibility for the costs of contingency action at the facility and that reserves, during the operating life of the facility and for the time period required in paragraph (a) after closure, a portion of the debt limit of the municipality, as established under section 475.53 or other law, that is equal to the total contingency action costs.

(2) The municipality shall require that all collectors that haul to the facility implement a plan for reducing solid waste by using volume-based pricing, recycling incentives, or other means.

(3) When a municipality opts to meet a portion of its financial responsibility by relying on its authority to issue bonds, it shall also begin setting aside in a dedicated long-term care trust fund money that will cover a portion of the potential contingency action costs at the facility, the amount to be determined by the agency for each facility based on at least the amount of waste deposited in the disposal facility each year, and the likelihood and potential timing of conditions arising at the facility that will necessitate response action. The agency may not require a municipality to set aside more than five percent of the total cost in a single year.

(4) A municipality shall have and consistently maintain an investment grade bond rating as a condition of using bonding authority to meet financial responsibility under this section.

(5) The municipality shall file with the commissioner of revenue its consent to have the amount of its contingency action costs deducted from state aid payments otherwise due the municipality and paid instead to the ~~environmental response, compensation, and compliance account~~ remediation fund created in section ~~115B.20~~ 116.155, if the municipality fails to conduct the contingency action at the facility when ordered by the agency. If the agency notifies the commissioner that the municipality has failed to conduct contingency action when ordered by the agency, the commissioner shall deduct the amounts indicated by the agency from the state aids in accordance with the consent filed with the commissioner.

(6) The municipality shall file with the agency written proof that it has complied with the requirements of paragraph (b).

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(c) The method for proving financial responsibility under paragraph (b) may not be applied to a new solid waste disposal facility or to expansion of an existing facility, unless the expansion is a vertical expansion. Vertical expansions of qualifying existing facilities cannot be permitted for a duration of longer than three years.

Sec. 39. [116.155] [REMEDIATION FUND.]

Subdivision 1. [CREATION.] The remediation fund is created as a special revenue fund in the state treasury to provide a reliable source of public money for response and corrective actions to address releases of hazardous substances, pollutants or contaminants, agricultural chemicals, and petroleum, and for environmental response actions at qualified landfill facilities for which the agency has assumed such responsibility, including perpetual care of such facilities. The specific purposes for which the general portion of the fund may be spent are provided in subdivision 2. In addition to the general portion of the fund, the fund contains two accounts described in subdivisions 4 and 5.

Subd. 2. [APPROPRIATION.] (a) Money in the general portion of the remediation fund is appropriated to the agency and the commissioners of agriculture and natural resources for the following purposes:

(1) to take actions related to releases of hazardous substances, or pollutants or contaminants as provided in section 115B.20;

(2) to take actions related to releases of hazardous substances, or pollutants or contaminants, at and from qualified landfill facilities as provided in section 115B.42, subdivision 2;

(3) to provide technical and other assistance under sections 115B.17, subdivision 14, 115B.175 to 115B.179, and 115C.03, subdivision 9;

(4) for corrective actions to address incidents involving agricultural chemicals, including related administrative, enforcement, and cost recovery actions pursuant to chapter 18D; and

(5) together with any amount approved for transfer to the agency from the petroleum tank fund by the commissioner of finance, to take actions related to releases of petroleum as provided under section 115C.08.

(b) The commissioner of finance shall allocate the amounts available in any biennium to the agency, and the commissioners of agriculture and natural resources for the purposes provided in this subdivision based upon work plans submitted by the agency and the commissioners of agriculture and natural resources, and may adjust those allocations upon submittal of revised work plans. Copies of the work plans shall be submitted to the chairs of the environment and environment finance committees of the senate and house of representatives.

Subd. 3. [REVENUES.] The following revenues shall be deposited in the general portion of the remediation fund:

(1) response costs and natural resource damages related to releases of hazardous substances, or pollutants or contaminants, recovered under sections 115B.17, subdivisions 6 and 7, 115B.443, 115B.444, or any other law;

(2) money paid to the agency or the agriculture department by voluntary parties who have received technical or other assistance under sections 115B.17, subdivision 14, 115B.175 to 115B.179, and 115C.03, subdivision 9;

(3) money received in the form of gifts, grants, reimbursement, or appropriation from any source for any of the purposes provided in subdivision 2, except federal grants; and

(4) interest accrued on the fund.

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Subd. 4. [DRY CLEANER ENVIRONMENTAL RESPONSE AND REIMBURSEMENT ACCOUNT.] The dry cleaner environmental response and reimbursement account is as described in sections 115B.47 to 115B.51.

Subd. 5. [METROPOLITAN LANDFILL CONTINGENCY ACTION TRUST ACCOUNT.] The metropolitan landfill contingency action trust account is as described in section 473.845.

Subd. 6. [OTHER SOURCES OF THE FUND.] The remediation fund shall also be supported by transfers as may be authorized by the legislature from time to time from the environmental fund.

Sec. 40. Minnesota Statutes 2002, section 116.994, is amended to read:

116.994 [SMALL BUSINESS ENVIRONMENTAL IMPROVEMENT LOAN ~~ACCOUNT~~ ACCOUNTING.]

~~The small business environmental improvement loan account is established in the environmental fund.~~ Repayments of loans made under section 116.993 must be credited to ~~this account~~ the environmental fund. This account replaces the small business environmental loan account in Minnesota Statutes 1996, section 116.992, and the hazardous waste generator loan account in Minnesota Statutes 1996, section 115B.224. The account balances and pending repayments from the small business environmental loan account and the hazardous waste generator account will be credited to this new account. Money deposited in the ~~account~~ fund under section 116.993 is appropriated to the commissioner for loans under ~~this~~ section 116.993.

Sec. 41. Minnesota Statutes 2002, section 116C.834, subdivision 1, is amended to read:

Subdivision 1. [COSTS.] All costs incurred by the state to carry out its responsibilities under the compact and under sections 116C.833 to 116C.843 shall be paid by generators of low-level radioactive waste in this state through fees assessed by the pollution control agency. Fees may be reasonably assessed on the basis of volume or degree of hazard of the waste produced by a generator. Costs for which fees may be assessed include, but are not limited to:

(1) the state contribution required to join the compact;

(2) the expenses of the Commission member and state agency costs incurred to support the work of the Interstate Commission; and

(3) regulatory costs.

The fees are exempt from section 16A.1285.

Sec. 42. Minnesota Statutes 2002, section 297H.13, subdivision 1, is amended to read:

Subdivision 1. [DEPOSIT OF REVENUES.] The revenues derived from the taxes imposed on waste management services under this chapter~~, less the costs to the department of revenue for administering the tax under this chapter,~~ shall be deposited by the commissioner of revenue in the state treasury.

The amounts retained by the department of revenue shall be deposited in a separate revenue department fund which is hereby created. Money in this fund is hereby appropriated, up to a maximum annual amount of $200,000, to the commissioner of revenue for the costs incurred in administration of the solid waste management tax under this chapter.

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Sec. 43. Minnesota Statutes 2002, section 297H.13, subdivision 2, is amended to read:

Subd. 2. [ALLOCATION OF REVENUES.] (a) $22,000,000, or 50 percent, whichever is greater, of the amounts remitted under this chapter must be credited to the ~~solid waste~~ environmental fund established in section ~~115B.42~~ 16A.531, subdivision 1.

(b) The remainder must be deposited into the general fund.

Sec. 44. Minnesota Statutes 2002, section 325E.10, subdivision 1, is amended to read:

Subdivision 1. [SCOPE.] For the purposes of sections 325E.11 to ~~325E.113~~ 325E.112 and this section, the terms defined in this section have the meanings given them.

Sec. 45. Minnesota Statutes 2002, section 469.175, subdivision 7, is amended to read:

Subd. 7. [CREATION OF HAZARDOUS SUBSTANCE SUBDISTRICT; RESPONSE ACTIONS.] (a) An authority which is creating or has created a tax increment financing district may establish within the district a hazardous substance subdistrict upon the notice and after the discussion, public hearing, and findings required for approval of or modification to the original plan. The geographic area of the subdistrict is made up of any parcels in the district designated for inclusion by the municipality or authority that are designated hazardous substance sites, and any additional parcels in the district designated for inclusion that are contiguous to the hazardous substance sites, including parcels that are contiguous to the site except for the interposition of a right-of-way. Before or at the time of approval of the tax increment financing plan or plan modification providing for the creation of the hazardous substance subdistrict, the authority must make the findings under paragraphs (b) to (d), and set forth in writing the reasons and supporting facts for each.

(b) Development or redevelopment of the site, in the opinion of the authority, would not reasonably be expected to occur solely through private investment and tax increment otherwise available, and therefore the hazardous substance district is deemed necessary.

(c) Other parcels that are not designated hazardous substance sites are expected to be developed together with a designated hazardous substance site.

(d) The subdistrict is not larger than, and the period of time during which increments are elected to be received is not longer than, that which is necessary in the opinion of the authority to provide for the additional costs due to the designated hazardous substance site.

(e) Upon request by an authority that has incurred expenses for removal or remedial actions to implement a development response action plan, the attorney general may:

(1) bring a civil action on behalf of the authority to recover the expenses, including administrative costs and litigation expenses, under section 115B.04 or other law; or

(2) assist the authority in bringing an action as described in clause (1), by providing legal and technical advice, intervening in the action, or other appropriate assistance.

The decision to participate in any action to recover expenses is at the discretion of the attorney general.

(f) If the attorney general brings an action as provided in paragraph (e), clause (1), the authority shall certify its reasonable and necessary expenses incurred to implement the development response action plan and shall cooperate with the attorney general as required to effectively pursue the action. The certification by the authority is prima facie

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evidence that the expenses are reasonable and necessary. The attorney general may deduct litigation expenses incurred by the attorney general from any amounts recovered in an action brought under paragraph (e), clause (1). The authority shall reimburse the attorney general for litigation expenses not recovered in an action under paragraph (e), clause (1), but only from the additional tax increment required to be used as described in section 469.176, subdivision 4e. The authority must reimburse the attorney general for litigation expenses incurred to assist in bringing an action under paragraph (e), clause (2), but only from amounts recovered by the authority in an action or, if the amounts are insufficient, from the additional tax increment required to be used as described in section 469.176, subdivision 4e. All money recovered or paid to the attorney general for litigation expenses under this paragraph shall be paid to the general fund of the state for deposit to the account of the attorney general. For the purposes of this section, "litigation expenses" means attorney fees and costs of discovery and other preparation for litigation.

(g) The authority shall reimburse the pollution control agency for its administrative expenses incurred to review and approve a development action response plan. The authority must reimburse the pollution control agency for expenses incurred for any services rendered to the attorney general to support the attorney general in actions brought or assistance provided under paragraph (e), but only from amounts recovered by the authority in an action brought under paragraph (e) or from the additional tax increment required to be used as described in section 469.176, subdivision 4e. All money paid to the pollution control agency under this paragraph shall be deposited in the ~~environmental response, compensation and compliance~~ remediation fund.

(h) Actions taken by an authority consistent with a development response action plan are deemed to be authorized response actions for the purpose of section 115B.17, subdivision 12. An authority that takes actions consistent with a development response action plan qualifies for the defenses available under sections 115B.04, subdivision 11, and 115B.05, subdivision 9.

(i) All money recovered by an authority in an action brought under paragraph (e) in excess of the amounts paid to the attorney general and the pollution control agency must be treated as excess increments and be distributed as provided in section 469.176, subdivision 2, clause (4), to the extent the removal and remedial actions were initially financed with increment revenues.

Sec. 46. Minnesota Statutes 2002, section 473.843, subdivision 2, is amended to read:

Subd. 2. [DISPOSITION OF PROCEEDS.] ~~After reimbursement to the department of revenue for costs incurred in administering this section,~~ The proceeds of the fees imposed under this section, including interest and penalties, must be deposited as follows:

(1) three-fourths of the proceeds must be deposited in the environmental fund for metropolitan landfill abatement ~~account established~~ for the purposes described in section 473.844; and

(2) one-fourth of the proceeds must be deposited in the metropolitan landfill contingency action trust account in the remediation fund established in ~~section~~ sections 116.155 and 473.845.

Sec. 47. Minnesota Statutes 2002, section 473.844, subdivision 1, is amended to read:

Subdivision 1. [~~ESTABLISHMENT;~~ PURPOSES.] The ~~metropolitan landfill abatement account is~~ money in the environmental fund ~~in order~~ for landfill abatement must be used to reduce to the greatest extent feasible and prudent the need for and practice of land disposal of mixed municipal solid waste in the metropolitan area. ~~The account~~ This money consists of revenue deposited in the ~~account~~ environmental fund under section 473.843, subdivision 2, clause (1), and interest earned on investment of this money ~~in the account~~. All repayments to loans made under this section must be credited to the ~~account~~ environmental fund. The landfill abatement money in the ~~account~~ environmental fund may be spent only for purposes of metropolitan landfill abatement as provided in subdivision 1a and only upon appropriation by the legislature.

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Sec. 48. Minnesota Statutes 2002, section 473.845, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The metropolitan landfill contingency action trust ~~fund~~ account is an expendable trust ~~fund~~ account in the ~~state treasury~~ remediation fund. The ~~fund~~ account consists of revenue deposited in the fund under section 473.843, subdivision 2, clause (2); amounts recovered under subdivision 7; and interest earned on investment of money in the fund.

Sec. 49. Minnesota Statutes 2002, section 473.845, subdivision 3, is amended to read:

Subd. 3. [~~EXPENDITURES FROM THE FUND~~ CONTINGENCY ACTIONS AND REIMBURSEMENT.] Money in the ~~fund~~ account is appropriated to the agency for expenditure for any of the following:

(1) to take reasonable and necessary ~~expenses~~ actions for closure and postclosure care of a mixed municipal solid waste disposal facility in the metropolitan area for a 30-year period after closure, if the agency determines that the operator or owner will not take the necessary actions requested by the agency for closure and postclosure in the manner and within the time requested;

(2) to take reasonable and necessary response actions and postclosure ~~costs~~ care actions at a mixed municipal solid waste disposal facility in the metropolitan area that has been closed for 30 years in compliance with the closure and postclosure rules of the agency;

(3) ~~reimbursement~~ to reimburse a local government unit for costs incurred over $400,000 under a work plan approved by the commissioner of the agency to remediate methane at a closed disposal facility owned by the local government unit; or

(4) reasonable and necessary response costs at an unpermitted facility for mixed municipal solid waste disposal in the metropolitan area that was permitted by the agency for disposal of sludge ash from a wastewater treatment facility.

Sec. 50. Minnesota Statutes 2002, section 473.845, subdivision 7, is amended to read:

Subd. 7. [RECOVERY OF EXPENSES.] When the agency incurs expenses for response actions at a facility, the agency is subrogated to any right of action which the operator or owner of the facility may have against any other person for the recovery of the expenses. The attorney general may bring an action to recover amounts spent by the agency under this section from persons who may be liable for them. Amounts recovered, including money paid under any agreement, stipulation, or settlement must be deposited in the metropolitan landfill contingency action account in the remediation fund created under section 116.155.

Sec. 51. Minnesota Statutes 2002, section 473.845, subdivision 8, is amended to read:

Subd. 8. [CIVIL PENALTIES.] The civil penalties of sections 115.071 and 116.072 apply to any person in violation of this section. All money recovered by the state under any statute or rule related to the regulation of solid waste in the metropolitan area, including civil penalties and money paid under any agreement, stipulation, or settlement, shall be deposited in the fund.

Sec. 52. Minnesota Statutes 2002, section 473.846, is amended to read:

473.846 [REPORT TO LEGISLATURE.]

The agency and the director shall submit to the senate finance committee, the house ways and means committee, and the environment and natural resources committees of the senate and house of representatives, the finance division of the senate committee on environment and natural resources, and the house of representatives committee

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on environment and natural resources finance separate reports describing the activities for which money ~~from the~~ for landfill abatement ~~account and contingency action trust fund~~ has been spent under sections 473.844 and 473.845. The agency shall report by November 1 of each year on expenditures during its previous fiscal year. The director shall report on expenditures during the previous calendar year and must incorporate its report in the report required by section 115A.411, due July 1 of each odd-numbered year. The director shall make recommendations to the environment and natural resources committees of the senate and house of representatives, the finance division of the senate committee on environment and natural resources, and the house of representatives committee on environment and natural resources finance on the future management and use of the metropolitan landfill abatement account.

Sec. 53. [INCREASE TO WATER QUALITY PERMIT FEES.]

(a) The pollution control agency shall collect water quality permit fees that reflect the fees in Minnesota Rules, part 7002.0310, and Laws 2002, chapter 374, article 6, section 8, with the application fee in paragraph (b) increased from $240 to $350.

(b) The increased permit fee is effective July 1, 2003. The agency shall adopt amended water quality permit fee rules incorporating the permit fee increase in paragraph (a) under Minnesota Statutes, section 14.389. The pollution control agency shall begin collecting the increased permit fee on July 1, 2003, even if the rule adoption process has not been initiated or completed. Notwithstanding Minnesota Statutes, section 14.18, subdivision 2, the increased permit fee reflecting the permit fee increase in paragraph (a) and the rule amendments incorporating that permit fee increase do not require further legislative approval.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 54. [INCREASE TO HAZARDOUS WASTE FEES.]

(a) The pollution control agency shall collect hazardous waste fees that reflect the fee formula in Minnesota Rules, part 7046.0060, increased by an addition of $2,000,000 to the adjusted fiscal year target described in Step 2 of Minnesota Rules, part 7046.0060.

(b) The increased fees are effective January 1, 2004. The agency shall adopt an amended hazardous waste fee formula incorporating the increase in paragraph (a) under Minnesota Statutes, section 14.389. The pollution control agency shall begin collecting the increased permit fees on January 1, 2004, even if the rule adoption process has not been initiated or completed. Notwithstanding Minnesota Statutes, section 14.18, subdivision 2, the increased fees reflecting the fee increases in paragraph (a) and the rule amendments incorporating those permit fee increases do not require further legislative approval.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 55. [TRANSFER OF FUND BALANCES.]

Subdivision 1. [ENVIRONMENTAL RESPONSE, COMPENSATION, AND COMPLIANCE ACCOUNT.] All amounts remaining in the environmental response, compensation, and compliance account are transferred to the remediation fund created under Minnesota Statutes, section 116.155.

Subd. 2. [SOLID WASTE FUND.] $22,641,000 of the balance of the solid waste fund is transferred to the environmental fund created in Minnesota Statutes, section 16A.531, subdivision 1. Any remaining balance in the solid waste fund is transferred to the remediation fund created under Minnesota Statutes, section 116.155.

Subd. 3. [DRY CLEANER ENVIRONMENTAL RESPONSE AND REIMBURSEMENT ACCOUNT.] All amounts remaining in the dry cleaner environmental response and reimbursement account are transferred to the dry cleaner environmental response and reimbursement account in the remediation fund created under Minnesota Statutes, sections 115B.49 and 116.155.

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Subd. 4. [METROPOLITAN LANDFILL CONTINGENCY ACTION FUND.] All amounts remaining in the metropolitan landfill contingency action fund are transferred to the metropolitan landfill contingency action trust account in the remediation fund created under Minnesota Statutes, sections 116.155 and 473.845.

Sec. 56. [REPEALER.]

Minnesota Statutes 2002, sections 115B.02, subdivision 1a; 115B.42, subdivision 1; 297H.13, subdivisions 3 and 4; 325E.112, subdivision 3; 325E.113; and 473.845, subdivision 4, are repealed.

ARTICLE 3

AGRICULTURE AND RURAL DEVELOPMENT

Section 1. [AGRICULTURE AND RURAL DEVELOPMENT APPROPRIATIONS.]

SUMMARY BY FUND

2004 2005 TOTAL

General $46,231,000 $44,597,000 $90,828,000

Remediation 353,000 353,000 706,000

Agricultural 200,000 200,000 400,000

TOTAL $46,784,000 $45,150,000 $91,934,000

APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Sec. 2. DEPARTMENT OF AGRICULTURE

Subdivision 1. Total Appropriation 42,181,000 40,547,000

Summary by Fund

General 41,828,000 40,194,000

Remediation 353,000 353,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivision.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 2. Protection Services

9,138,000 9,138,000

Summary by Fund

General 8,785,000 8,785,000

Remediation 353,000 353,000

$353,000 the first year and $353,000 the second year are from the remediation fund for administrative funding for the voluntary cleanup program.

Subd. 3. Agricultural Marketing and Development

5,256,000 5,256,000

$71,000 the first year and $71,000 the second year are for transfer to the Minnesota grown matching account and may be used as grants for Minnesota grown promotion under Minnesota Statutes, section 17.109. Grants may be made for one year. Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract on or before June 30, 2005, for Minnesota grown grants in this subdivision are available until June 30, 2007.

$80,000 the first year and $80,000 the second year are for grants to farmers for demonstration projects involving sustainable agriculture as authorized in Minnesota Statutes, section 17.116. Of the amount for grants, up to $20,000 may be used for dissemination of information about the demonstration projects. Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract on or before June 30, 2005, for sustainable agriculture grants in this subdivision are available until June 30, 2007.

The commissioner shall continue the Ag in the Classroom program until the program is transferred to a new entity. The commissioner and the Minnesota Ag in the Classroom board of directors, in consultation with farm groups and individuals and organizations in the education community, shall identify an appropriate entity in the private sector or the public sector to sponsor, house, and carry on the staffing and function of the Ag in the Classroom program. Once an entity is identified and arrangements for the transfer finalized, the commissioner may release educational and program materials to the new entity.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

The commissioner may reduce appropriations for the administration of activities in this subdivision by up to $135,000 each year and transfer the amounts reduced to activities under subdivision 5.

Subd. 4. Value-Added Agricultural Products

22,962,000 21,428,000

$22,962,000 the first year and $21,428,000 the second year are for ethanol producer payments under Minnesota Statutes, section 41A.09. Payments for eligible ethanol production in fiscal years 2004 and 2005 shall be disbursed at the rate of $0.13 per gallon, and the base appropriation amounts for scheduled payments in fiscal years 2006 and 2007 must be calculated as the projected eligible production in those years times a payment rate of $0.13 per gallon. If the total amount for which all producers are eligible in a quarter exceeds the amount available for payments, the commissioner shall make payments on a pro rata basis. If the appropriation exceeds the total amount for which all producers are eligible in a fiscal year for scheduled payments and for deficiencies in payments during previous fiscal years, the balance in the appropriation is available to the commissioner for value-added agricultural programs including the value-added agricultural product processing and marketing grant program under Minnesota Statutes, section 17.101, subdivision 5. The appropriation remains available until spent.

Subd. 5. Administration and Financial Assistance

4,825,000 4,725,000

$1,005,000 the first year and $1,005,000 the second year are for continuation of the dairy development and profitability enhancement and dairy business planning grant programs established under Laws 1997, chapter 216, section 7, subdivision 2 and Laws 2001, First Special Session chapter 2, section 9, subdivision 2. The commissioner may allocate the available sums among permissible activities, including efforts to improve the quality of milk produced in the state, in the proportions which the commissioner deems most beneficial to Minnesota's dairy farmers. The commissioner must submit a work plan detailing plans for expenditures under this program to the chairs of the house and senate committees dealing with agricultural policy and budget on or before the start of each fiscal year. If significant changes are made to the plans in the course of the year, the commissioner must notify the chairs.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$50,000 the first year and $50,000 the second year are for the Northern Crops Institute. These appropriations may be spent to purchase equipment.

$19,000 the first year and $19,000 the second year are for a grant to the Minnesota livestock breeders association.

$2,000 the first year and $1,000 the second year are for family farm security interest payment adjustments. If the appropriation for either year is insufficient, the appropriation for the other year is available for it. No new loans may be approved in fiscal year 2004 or 2005.

$100,000 is for predesign and design of the agriculture and food sciences academy. The commissioner shall consult with the Minnesota Agriculture Education Leadership Council on the predesign and design of the Agriculture and Food Sciences Academy.

Beginning in fiscal year 2004, all aid payments to county and district agricultural societies and associations under Minnesota Statutes, section 38.02, subdivision 1, shall be disbursed not later than July 15. These payments are the amount of aid owed by the state for an annual fair held in the previous calendar year.

Sec. 3. BOARD OF ANIMAL HEALTH 2,803,000 2,803,000

$200,000 the first year and $200,000 the second year are for a program to control paratuberculosis ("Johne's disease") in domestic bovine herds. Money from this appropriation may be used to validate a molecular diagnostic test in cooperation with the Minnesota veterinary diagnostic laboratory.

$80,000 the first year and $80,000 the second year are for a program to investigate the avian pneumovirus disease and to identify the infected flocks. This appropriation must be matched on a dollar-for-dollar or in-kind basis with nonstate sources and is in addition to money currently designated for turkey disease research. Costs of blood sample collection, handling, and transportation, in addition to costs associated with early diagnosis tests and the expenses of vaccine research trials, may be credited to the match.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$400,000 the first year and $400,000 the second year are for the purposes of cervidae inspection as authorized in Minnesota Statutes, section 17.452.

Sec. 4. AGRICULTURAL UTILIZATION RESEARCH INSTITUTE 1,800,000 1,800,000

Summary by Fund

General 1,600,000 1,600,000

Agricultural 200,000 200,000

The board shall allocate at least 50 percent of the pesticide reduction options appropriation to field crop research.

Sec. 5. Minnesota Statutes 2002, section 17.451, is amended to read:

17.451 [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] The definitions in this section apply to this section and section 17.452.

Subd. 1a. [CERVIDAE.] "Cervidae" means animals that are members of the family Cervidae and includes, but is not limited to, white-tailed deer, mule deer, red deer, elk, moose, caribou, reindeer, and muntjac.

Subd. 2. [FARMED CERVIDAE.] "Farmed cervidae" means members of the Cervidae family that are:

(1) raised for ~~the~~ any purpose ~~of producing fiber, meat, or animal by-products, as pets, or as breeding stock~~; and

(2) registered in a manner approved by the board of animal health.

Subd. 3. [OWNER.] "Owner" means a person who owns or is responsible for the raising of farmed cervidae.

Subd. 4. [HERD.] "Herd" means:

(1) all cervidae maintained on common ground for any purpose; or

(2) all cervidae under common ownership or supervision, geographically separated, but that have an interchange or movement of animals without regard to whether the animals are infected with or exposed to diseases.

Sec. 6. Minnesota Statutes 2002, section 17.452, subdivision 8, is amended to read:

Subd. 8. [SLAUGHTER.] Farmed cervidae must be slaughtered and inspected in accordance with chapters 31 and 31A or the United States Department of Agriculture voluntary program for exotic animals, Code of Federal Regulations, title 9, part 352.

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Sec. 7. Minnesota Statutes 2002, section 17.452, subdivision 10, is amended to read:

Subd. 10. [FENCING.] ~~(a)~~ Farmed cervidae must be confined in a manner designed to prevent escape. Fencing must meet the requirements in this subdivision unless an alternative is specifically approved by the commissioner. The board of animal health shall follow the guidelines established by the United States Department of Agriculture in the program for eradication of bovine tuberculosis. Perimeter fencing must be of the following heights:

~~(1) for fences constructed before August 1, 1995, for farmed deer, at least 75 inches;~~

~~(2) for fences constructed before August 1, 1995, for farmed elk, at least 90 inches; and~~

~~(3) for fences constructed on or after August 1, 1995, for all farmed cervidae, at least 96 inches.~~

~~(b) The farmed cervidae advisory committee shall establish guidelines designed to prevent the escape of farmed cervidae and other appropriate management practices.~~ All perimeter fences for farmed cervidae must be at least 96 inches in height and be constructed and maintained in a way that prevents the escape of farmed cervidae or entry into the premises by free-roaming cervidae.

~~(c) The commissioner of agriculture in consultation with the commissioner of natural resources shall adopt rules prescribing fencing criteria for farmed cervidae.~~

[EFFECTIVE DATE.] This section is effective January 1, 2004.

Sec. 8. Minnesota Statutes 2002, section 17.452, subdivision 11, is amended to read:

Subd. 11. [DISEASE ~~INSPECTION~~ CONTROL PROGRAMS.] Farmed cervidae herds are subject to chapter 35 and the rules of the board of animal health in the same manner as livestock and domestic animals, including provisions relating to importation and transportation.

Sec. 9. Minnesota Statutes 2002, section 17.452, subdivision 12, is amended to read:

Subd. 12. [IDENTIFICATION.] (a) Farmed cervidae must be identified by ~~United States Department of Agriculture metal ear tags, electronic implants, or other~~ means ~~of identification~~ approved by the board of animal health ~~in consultation with the commissioner of natural resources~~. Beginning January 1, 2004, the identification must be visible to the naked eye during daylight under normal conditions at a distance of 50 yards. Newborn ~~or imported~~ animals ~~are required to~~ must be identified ~~by March 1 of each year~~ before December 31 of the year in which the animal is born or before movement from the premises, whichever occurs first. ~~The board shall authorize discrete permanent identification for farmed cervidae in public displays or other forums where visible identification is objectionable.~~

(b) ~~Identification of farmed cervidae is subject to sections 35.821 to 35.831.~~

~~(c)~~ The board of animal health shall register farmed cervidae ~~upon request of the owner~~. The owner must submit the registration request on forms provided by the board. The forms must include sales receipts or other documentation of the origin of the cervidae. The board shall provide copies of the registration information to the commissioner of natural resources upon request. The owner must keep written records of the acquisition and disposition of registered farmed cervidae.

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Sec. 10. Minnesota Statutes 2002, section 17.452, subdivision 13, is amended to read:

Subd. 13. [INSPECTION.] The commissioner of agriculture and the board of animal health may inspect farmed cervidae, farmed cervidae facilities, and farmed cervidae records. For each herd, the owner or owners must, on or before January 1, pay an annual inspection fee equal to $10 for each cervid in the herd as reflected in the most recent inventory submitted to the board of animal health up to a maximum fee of $100. The commissioner of natural resources may inspect farmed cervidae, farmed cervidae facilities, and farmed cervidae records with reasonable suspicion that laws protecting native wild animals have been violated. and must notify the owner ~~must be notified~~ in writing at the time of the inspection of the reason for the inspection and ~~informed~~ must inform the owner in writing after the inspection of whether (1) the cause of the inspection was unfounded; or (2) there will be an ongoing investigation or continuing evaluation.

Sec. 11. Minnesota Statutes 2002, section 17.452, is amended by adding a subdivision to read:

Subd. 13a. [CERVIDAE INSPECTION ACCOUNT.] A cervidae inspection account is established in the state treasury. The fees collected under subdivision 13 and interest attributable to money in the account must be deposited in the state treasury and credited to the cervidae inspection account in the special revenue fund. Money in the account, including interest earned, is appropriated to the board of animal health for the administration and enforcement of this section.

Sec. 12. Minnesota Statutes 2002, section 17.452, is amended by adding a subdivision to read:

Subd. 15. [MANDATORY REGISTRATION.] A person may not possess live cervidae in Minnesota unless the person is registered with the board of animal health and meets all the requirements for farmed cervidae under this section. Cervidae possessed in violation of this subdivision may be seized and destroyed by the commissioner of natural resources.

[EFFECTIVE DATE.] This section is effective January 1, 2004.

Sec. 13. Minnesota Statutes 2002, section 17.452, is amended by adding a subdivision to read:

Subd. 16. [MANDATORY SURVEILLANCE FOR CHRONIC WASTING DISEASE.] (a) An inventory for each farmed cervidae herd must be verified by an accredited veterinarian and filed with the board of animal health every 12 months.

(b) Movement of farmed cervidae from any premises to another location must be reported to the board of animal health within 14 days of such movement on forms approved by the board of animal health.

(c) All animals from farmed cervidae herds that are over 16 months of age that die or are slaughtered must be tested for chronic wasting disease.

[EFFECTIVE DATE.] This section is effective January 1, 2004.

Sec. 14. Minnesota Statutes 2002, section 18.78, is amended to read:

18.78 [CONTROL OR ERADICATION OF NOXIOUS WEEDS.]

Subdivision 1. [GENERALLY.] ~~Except as provided in section 18.85,~~ A person owning land, a person occupying land, or a person responsible for the maintenance of public land shall control or eradicate all noxious weeds on the land at a time and in a manner ordered by ~~the commissioner,~~ the county agricultural inspector, or a local weed inspector.

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Subd. 2. [CONTROL OF PURPLE LOOSESTRIFE.] An owner of nonfederal lands underlying public waters or wetlands designated under section 103G.201 is not required to control or eradicate purple loosestrife below the ordinary high water level of the public water or wetland. The commissioner of natural resources is responsible for control and eradication of purple loosestrife on public waters and wetlands designated under section 103G.201, except those located upon lands owned in fee title or managed by the United States. The officers, employees, agents, and contractors of the commissioner of natural resources may enter upon public waters and wetlands designated under section 103G.201 and, after providing notification to the occupant or owner of the land, may cross adjacent lands as necessary for the purpose of investigating purple loosestrife infestations, formulating methods of eradication, and implementing control and eradication of purple loosestrife. The commissioner~~, after consultation with the commissioner of agriculture,~~ of natural resources shall, by June 1 of each year, compile a priority list of purple loosestrife infestations to be controlled in designated public waters. The commissioner of ~~agriculture~~ natural resources must distribute the list to county agricultural inspectors, local weed inspectors, and their appointed agents. The commissioner of natural resources shall control listed purple loosestrife infestations in priority order within the limits of appropriations provided for that purpose. This procedure shall be the exclusive means for control of purple loosestrife on designated public waters by the commissioner of natural resources and shall supersede the other provisions for control of noxious weeds set forth elsewhere in this chapter. The responsibility of the commissioner of natural resources to control and eradicate purple loosestrife on public waters and wetlands located on private lands and the authority to enter upon private lands ends ten days after receipt by the commissioner of a written statement from the landowner that the landowner assumes all responsibility for control and eradication of purple loosestrife under sections 18.78 to 18.88. State officers, employees, agents, and contractors of the commissioner of natural resources are not liable in a civil action for trespass committed in the discharge of their duties under this section and are not liable to anyone for damages, except for damages arising from gross negligence.

Sec. 15. Minnesota Statutes 2002, section 18.79, subdivision 2, is amended to read:

Subd. 2. [AUTHORIZED AGENTS.] ~~The commissioner shall authorize department of agriculture personnel and may authorize, in writing,~~ County agricultural inspectors ~~to act as agents in the administration and enforcement of~~ may administer and enforce sections 18.76 to 18.88.

Sec. 16. Minnesota Statutes 2002, section 18.79, subdivision 3, is amended to read:

Subd. 3. [ENTRY UPON LAND.] To administer and enforce sections 18.76 to 18.88, ~~the commissioner, authorized agents of the commissioner,~~ county agricultural inspectors, and local weed inspectors may enter upon land without consent of the owner and without being subject to an action for trespass or any damages.

Sec. 17. Minnesota Statutes 2002, section 18.79, subdivision 5, is amended to read:

Subd. 5. [ORDER FOR CONTROL OR ERADICATION OF NOXIOUS WEEDS.] ~~The commissioner,~~ A county agricultural inspector, or a local weed inspector may order the control or eradication of noxious weeds on any land within the state.

Sec. 18. Minnesota Statutes 2002, section 18.79, subdivision 6, is amended to read:

Subd. 6. [~~EDUCATIONAL PROGRAMS~~ INITIAL TRAINING FOR CONTROL OR ERADICATION OF NOXIOUS WEEDS.] The commissioner shall conduct ~~education programs~~ initial training considered necessary for weed inspectors in the enforcement of the Noxious Weed Law. The director of the Minnesota extension service may conduct educational programs for the general public that will aid compliance with the noxious weed law.

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Sec. 19. Minnesota Statutes 2002, section 18.79, subdivision 9, is amended to read:

Subd. 9. [INJUNCTION.] If the ~~commissioner~~ county agricultural inspector applies to a court for a temporary or permanent injunction restraining a person from violating or continuing to violate sections 18.76 to 18.88, the injunction may be issued without requiring a bond.

Sec. 20. Minnesota Statutes 2002, section 18.79, subdivision 10, is amended to read:

Subd. 10. [PROSECUTION.] On finding that a person has violated sections 18.76 to 18.88, the ~~commissioner~~ county agricultural inspector may start court proceedings in the locality in which the violation occurred. The county attorney may prosecute actions under sections 18.76 to 18.88 within the county attorney's jurisdiction.

Sec. 21. Minnesota Statutes 2002, section 18.81, subdivision 2, is amended to read:

Subd. 2. [LOCAL WEED INSPECTORS.] Local weed inspectors shall:

(1) examine all lands, including highways, roads, alleys, and public ground in the territory over which their jurisdiction extends to ascertain if section 18.78 and related rules have been complied with;

(2) see that the control or eradication of noxious weeds is carried out in accordance with section 18.83 and related rules; and

(3) issue permits in accordance with section 18.82 and related rules for the transportation of materials or equipment infested with noxious weed propagating parts~~; and~~

~~(4) submit reports and attend meetings that the commissioner requires~~.

Sec. 22. Minnesota Statutes 2002, section 18.81, subdivision 3, is amended to read:

Subd. 3. [NONPERFORMANCE BY INSPECTORS; REIMBURSEMENT FOR EXPENSES.] ~~(a)~~ If local weed inspectors neglect or fail to do their duty as prescribed in this section, the ~~commissioner~~ county agricultural inspector shall issue a notice to the inspector providing instructions on how and when to do their duty. If, after the time allowed in the notice, the local weed inspector has not complied as directed, the county agricultural inspector may perform the duty for the local weed inspector. A claim for the expense of doing the local weed inspector's duty is a legal charge against the municipality in which the inspector has jurisdiction. The county agricultural inspector doing the work may file an itemized statement of costs with the clerk of the municipality in which the work was performed. The municipality shall immediately issue proper warrants to the county for the work performed. If the municipality fails to issue the warrants, the county auditor may include the amount contained in the itemized statement of costs as part of the next annual tax levy in the municipality and withhold that amount from the municipality in making its next apportionment.

(b) If a county agricultural inspector fails to perform the duties as prescribed in this section, the commissioner shall issue a notice to the inspector providing instructions on how and when to do that duty.

~~(c) The commissioner shall by rule establish procedures to carry out the enforcement actions for nonperformance required by this subdivision.~~

Sec. 23. Minnesota Statutes 2002, section 18.84, subdivision 3, is amended to read:

Subd. 3. [COURT APPEAL OF COSTS; PETITION.] (a) A landowner who has appealed the cost of noxious weed control measures under subdivision 2 may petition for judicial review. The petition must be filed within 30 days after the conclusion of the hearing before the county board. The petition must be filed with the court

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administrator in the county in which the land where the noxious weed control measures were undertaken is located, together with proof of service of a copy of the petition on ~~the commissioner and~~ the county auditor. No responsive pleadings may be required of ~~the commissioner or the~~ county, and no court fees may be charged for the appearance of ~~the commissioner or~~ the county in this matter.

(b) The petition must be captioned in the name of the person making the petition as petitioner and ~~the commissioner of agriculture and~~ respective county as respondents. The petition must include the petitioner's name, the legal description of the land involved, a copy of the notice to control noxious weeds, and the date or dates on which appealed control measures were undertaken.

(c) The petition must state with specificity the grounds upon which the petitioner seeks to avoid the imposition of a lien for the cost of noxious weed control measures.

Sec. 24. Minnesota Statutes 2002, section 18.86, is amended to read:

18.86 [UNLAWFUL ACTS.]

No person may:

(1) hinder or obstruct in any way the ~~commissioner, the commissioner's authorized agents,~~ county agricultural inspectors, or local weed inspectors in the performance of their duties as provided in sections 18.76 to 18.88 or related rules;

(2) neglect, fail, or refuse to comply with section 18.82 or related rules in the transportation and use of material or equipment infested with noxious weed propagating parts;

(3) sell material containing noxious weed propagating parts to a person who does not have a permit to transport that material or to a person who does not have a screenings permit issued in accordance with section 21.74; or

(4) neglect, fail, or refuse to comply with a general notice or an individual notice to control or eradicate noxious weeds.

Sec. 25. Minnesota Statutes 2002, section 18B.10, is amended to read:

18B.10 [ACTION TO PREVENT GROUND WATER CONTAMINATION.]

(a) The commissioner may, by rule, special order, or delegation through written regulatory agreement with officials of other approved agencies, take action necessary to prevent the contamination of ground water resulting from leaching of pesticides through the soil, from the backsiphoning or backflowing of pesticides through water wells, or from the direct flowage of pesticides to ground water.

(b) With owner consent, the commissioner may use private water wells throughout the state to monitor for the presence of agricultural pesticides and other industrial chemicals in ground water. The specific locations and land owners shall not be identifiable. The owner or user of a private water well sampled by the commissioner must be given access to test results.

Sec. 26. Minnesota Statutes 2002, section 18B.26, subdivision 3, is amended to read:

Subd. 3. [APPLICATION FEE.] (a) A registrant shall pay an annual application fee for each pesticide to be registered, and this fee is set at one-tenth of one percent for calendar year 1990, at one-fifth of one percent for calendar year 1991, and at two-fifths of one percent for calendar year 1992 and thereafter of annual gross sales

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within the state and annual gross sales of pesticides used in the state, with a minimum nonrefundable fee of $250. The registrant shall determine when and which pesticides are sold or used in this state. The registrant shall secure sufficient sales information of pesticides distributed into this state from distributors and dealers, regardless of distributor location, to make a determination. Sales of pesticides in this state and sales of pesticides for use in this state by out-of-state distributors are not exempt and must be included in the registrant's annual report, as required under paragraph (c), and fees shall be paid by the registrant based upon those reported sales. Sales of pesticides in the state for use outside of the state are exempt from the application fee in this paragraph if the registrant properly documents the sale location and distributors. A registrant paying more than the minimum fee shall pay the balance due by March 1 based on the gross sales of the pesticide by the registrant for the preceding calendar year. The fee for disinfectants and sanitizers shall be the minimum. The minimum fee is due by December 31 preceding the year for which the application for registration is made. ~~Of the amount collected after calendar year 1990, at least $600,000 per fiscal year must be credited to the waste pesticide account under section 18B.065, subdivision 5~~ The commissioner shall spend at least $300,000 per fiscal year from the pesticide regulatory account for the purposes of the waste pesticide collection program.

(b) An additional fee of $100 must be paid by the applicant for each pesticide to be registered if the application is a renewal application that is submitted after December 31.

(c) A registrant must annually report to the commissioner the amount and type of each registered pesticide sold, offered for sale, or otherwise distributed in the state. The report shall be filed by March 1 for the previous year's registration. The commissioner shall specify the form of the report and require additional information deemed necessary to determine the amount and type of pesticides annually distributed in the state. The information required shall include the brand name, amount, and formulation of each pesticide sold, offered for sale, or otherwise distributed in the state, but the information collected, if made public, shall be reported in a manner which does not identify a specific brand name in the report.

Sec. 27. Minnesota Statutes 2002, section 18B.37, is amended by adding a subdivision to read:

Subd. 6. [ACCESS TO PESTICIDE APPLICATION INFORMATION.] (a) A physician licensed to practice in Minnesota, or a Minnesota licensed veterinarian, may submit a request to the commissioner for access to available information on the application of pesticides by a commercial or noncommercial pesticide applicator related to a course of diagnosis, care, or treatment of a patient under the care of the physician or veterinarian.

(b) A request for pesticide application information under this subdivision must include available details as to the specific location of a known or suspected application that occurred on one or more specified dates and times. The request must also include information on symptoms displayed by the patient that prompted the physician or veterinarian to suspect pesticide exposure. The request must indicate that any information discovered will become part of the confidential patient record and will not be released publicly.

(c) Upon receipt of a request under paragraph (a), the commissioner, in consultation with the commissioner of health, shall promptly review the information contained in the request and determine if release of information held by the department may be beneficial for the medical diagnosis, care, and treatment of the patient.

(d) The commissioner may release to the requester available information on the pesticide. The commissioner shall withhold nonessential information such as total acres treated, the specific amount of pesticides applied, and the identity of the applicator or property owner.

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Sec. 28. Minnesota Statutes 2002, section 28A.08, subdivision 3, is amended to read:

Subd. 3. [FEES EFFECTIVE JULY 1, ~~1999~~ 2003.]

Penalties

Type of food handler License Late No

Fee Renewal License

Effective

July 1,

~~1999~~

2003

1. Retail food handler

(a) Having gross sales of only prepackaged

nonperishable food of less than $15,000 for

the immediately previous license or fiscal year

and filing a statement with the commissioner ~~$48~~ ~~$16~~ ~~$27~~

$50 $17 $33

(b) Having under $15,000 gross sales including

food preparation or having $15,000 to $50,000

gross sales for the immediately previous license

or fiscal year ~~$65~~ ~~$16~~ ~~$27~~

$77 $25 $51

immediately previous license or fiscal year ~~$126~~ ~~$37~~ ~~$80~~

$155 $51 $102

(d) Having ~~$250,000~~ $250,001 to $1,000,000 gross sales

for the immediately previous license or fiscal year ~~$216~~ ~~$54~~ ~~$107~~

$276 $91 $182

(e) Having ~~$1,000,000~~ $1,000,001 to $5,000,000 gross sales

for the immediately previous license or fiscal year ~~$601~~ ~~$107~~ ~~$187~~

$799 $264 $527

(f) Having ~~$5,000,000~~ $5,000,001 to $10,000,000 gross sales

for the immediately previous license or fiscal year ~~$842~~ ~~$161~~ ~~$321~~

$1,162 $383 $767

(g) Having ~~over $10,000,000~~ $10,000,001 to $15,000,000 gross

sales for the immediately previous license or fiscal year ~~$962~~ ~~$214~~ ~~$375~~

$1,376 $454 $908

(h) Having $15,000,001 to $20,000,000 gross sales for the

immediately previous license or fiscal year $1,607 $530 $1,061

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(i) Having $20,000,001 to $25,000,000 gross sales for the

immediately previous license or fiscal year $1,847 $610 $1,219

(j) Having over $25,000,001 gross sales for the immediately

previous license or fiscal year $2,001 $660 $1,321

2. Wholesale food handler

(a) Having gross sales or service of less than

$25,000 for the immediately previous license

or fiscal year ~~$54~~ ~~$16~~ ~~$16~~

$57 $19 $38

(b) Having ~~$25,000~~ $25,001 to $250,000 gross sales or

service for the immediately previous license or fiscal year ~~$241~~ ~~$54~~ ~~$107~~

$284 $94 $187

service from a mobile unit without a separate food facility

for the immediately previous license or fiscal year ~~$361~~ ~~$80~~ ~~$161~~

$444 $147 $293

(d) Having ~~$250,000~~ $250,001 to $1,000,000 gross sales or

service not covered under paragraph (c) for the

immediately previous license or fiscal year ~~$480~~ ~~$107~~ ~~$214~~

$590 $195 $389

(e) Having ~~$1,000,000~~ $1,000,001 to $5,000,000 gross sales or

service for the immediately previous license or fiscal year ~~$601~~ ~~$134~~ ~~$268~~

$769 $254 $508

(f) Having ~~over $5,000,000~~ $5,000,001 to $10,000,000 gross

sales for the immediately previous license or fiscal year ~~$692~~ ~~$161~~ ~~$321~~

$920 $304 $607

(g) Having $10,000,001 to $15,000,000 gross sales or service

for the immediately previous license or fiscal year $990 $327 $653

(h) Having $15,000,001 to $20,000,000 gross sales or

service for the immediately previous license or fiscal year $1,156 $381 $763

(i) Having $20,000,001 to $25,000,000 gross sales or

service for the immediately previous license or fiscal year $1,329 $439 $877

(j) Having over $25,000,001 or more gross sales or service for

the immediately previous license or fiscal year $1,502 $496 $991

3. Food broker ~~$120~~ ~~$32~~ ~~$54~~

$150 $50 $99

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4. Wholesale food processor or manufacturer

(a) Having gross sales of less than $125,000 for the

immediately previous license or fiscal year ~~$161~~ ~~$54~~ ~~$107~~

$169 $56 $112

(b) Having ~~$125,000~~ $125,001 to $250,000 gross sales for the

immediately previous license or fiscal year ~~$332~~ ~~$80~~ ~~$161~~

$392 $129 $259

immediately previous license or fiscal year ~~$480~~ ~~$107~~ ~~$214~~

$590 $195 $389

(d) Having $1,000,001 to 5,000,000 gross sales for the

immediately previous license or fiscal year ~~$601~~ ~~$134~~ ~~$268~~

$769 $254 $508

(e) Having $5,000,001 to $10,000,000 gross sales for

the immediately previous license or fiscal year ~~$692~~ ~~$161~~ ~~$321~~

$920 $304 $607

(f) Having ~~over $10,000,000~~ $10,000,001 to $15,000,000

gross sales for the immediately previous license or fiscal year ~~$963~~ ~~$214~~ ~~$375~~

$1,377 $454 $909

(g) Having $15,000,001 to $20,000,000 gross sales or

service for the immediately previous license or fiscal year $1,608 $531 $1,061

(h) Having $20,000,001 to $25,000,000 gross sales or

service for the immediately previous license or fiscal year $1,849 $610 $1,220

(i) Having $25,000,001 to $50,000,000 gross sales or

service for the immediately previous license or fiscal year $2,090 $690 $1,379

(j) Having $50,000,001 to $100,000,000 gross sales or

service for the immediately previous license or fiscal year $2,330 $7690 $1,538

(k) Having $100,000,000 or more gross sales or service

for the immediately previous license or fiscal year $2,571 $848 $1,697

5. Wholesale food processor of meat or poultry products

under supervision of the U. S. Department of Agriculture

(a) Having gross sales of less than $125,000 for the

immediately previous license or fiscal year ~~$107~~ ~~$27~~ ~~$54~~

$112 $37 $74

(b) Having ~~$125,000~~ $125,001 to $250,000 gross sales for the

immediately previous license or fiscal year ~~$181~~ ~~$54~~ ~~$80~~

$214 $71 $141

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immediately previous license or fiscal year ~~$271~~ ~~$80~~ ~~$134~~

$333 $110 $220

(d) Having $1,000,001 to $5,000,000 gross sales for the

immediately previous license or fiscal year ~~$332~~ ~~$80~~ ~~$161~~

$425 $140 $281

(e) Having $5,000,001 to $10,000,000 gross sales for

the immediately previous license or fiscal year ~~$392~~ ~~$107~~ ~~$187~~

$521 $172 $344

(f) Having over ~~$10,000,000~~ $10,000,001 gross sales for

the immediately previous license or fiscal year ~~$535~~ ~~$161~~ ~~$268~~

$765 $252 $505

(g) Having $15,000,001 to $20,000,000 gross sales for the

immediately previous license or fiscal year $893 $295 $589

(h) Having $20,000,001 to $25,000,000 gross sales for the

immediately previous license or fiscal year $1,027 $339 $678

(i) Having $25,000,001 to $50,000,000 gross sales for the

immediately previous license or fiscal year $1,161 $383 $766

(j) Having $50,000,001 to $100,000,000 gross sales for

the immediately previous license or fiscal year $1,295 $427 $855

(k) Having $100,000,001 or more gross sales for the

immediately previous license or fiscal year $1,428 $471 $942

6. Wholesale food processor or manufacturer operating only at

the state fair $125 $40 $50

7. Wholesale food manufacturer having the permission of the

commissioner to use the name Minnesota Farmstead cheese $30 $10 $15

8. Nonresident frozen dairy manufacturer $200 $50 $75

9. Wholesale food manufacturer processing less than 700,000

pounds per year of raw milk $30 $10 $15

10. A milk marketing organization without facilities for

processing or manufacturing that purchases milk from

milk producers for delivery to a licensed wholesale food

processor or manufacturer $50 $15 $25

Sec. 29. Minnesota Statutes 2002, section 28A.085, subdivision 1, is amended to read:

Subdivision 1. [VIOLATIONS; PROHIBITED ACTS.] The commissioner may charge a reinspection fee for each reinspection of a food handler that:

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(1) is found with a major violation of requirements in chapter 28, 29, 30, 31, 31A, 32, 33, or 34, or rules adopted under one of those chapters;

(2) is found with a violation of section 31.02, 31.161, or 31.165, and requires a follow-up inspection after an administrative meeting held pursuant to section 31.14; or

(3) fails to correct equipment and facility deficiencies as required in rules adopted under chapter 28, 29, 30, 31, 31A, 32, or 34. The first reinspection of a firm with gross food sales under $1,000,000 must be assessed at ~~$25~~ $75. The fee for a firm with gross food sales over $1,000,000 is ~~$50~~ $100. The fee for a subsequent reinspection of a firm for the same violation is 50 percent of their current license fee or $200, whichever is greater. The establishment must be issued written notice of violations with a reasonable date for compliance listed on the notice. An initial inspection relating to a complaint is not a reinspection.

Sec. 30. Minnesota Statutes 2002, section 28A.09, subdivision 1, is amended to read:

Subdivision 1. [ANNUAL FEE; EXCEPTIONS.] Every coin-operated food vending machine is subject to an annual state inspection fee of ~~$15~~ $25 for each nonexempt machine except nut vending machines which are subject to an annual state inspection fee of $5 $10 for each machine, provided that:

(a) Food vending machines may be inspected by either a home rule charter or statutory city, or a county, but not both, and if inspected by a home rule charter or statutory city, or a county they shall not be subject to the state inspection fee, but the home rule charter or statutory city, or the county may impose an inspection or license fee of no more than the state inspection fee. A home rule charter or statutory city or county that does not inspect food vending machines shall not impose a food vending machine inspection or license fee.

(b) Vending machines dispensing only gum balls, hard candy, unsorted candy, or ice manufactured and packaged by another shall be exempt from the state inspection fee, but may be inspected by the state. A home rule charter or statutory city may impose by ordinance an inspection or license fee of no more than the state inspection fee for nonexempt machines on the vending machines described in this paragraph. A county may impose by ordinance an inspection or license fee of no more than the state inspection fee for nonexempt machines on the vending machines described in this paragraph which are not located in a home rule charter or statutory city.

(c) Vending machines dispensing only bottled or canned soft drinks are exempt from the state, home rule charter or statutory city, and county inspection fees, but may be inspected by the commissioner or the commissioner's designee.

Sec. 31. Minnesota Statutes 2002, section 32.394, subdivision 8, is amended to read:

Subd. 8. [GRADE A INSPECTION FEES.] A processor or marketing organization of milk, milk products, sheep milk, or goat milk who wishes to market Grade A milk or use the Grade A label must apply for Grade A inspection service from the commissioner. A pasteurization plant requesting Grade A inspection service must hold a Grade A permit and pay an annual inspection fee of no more than $500. For Grade A farm inspection service, the fee must be no more than $50 per farm, paid annually by the processor or by the marketing organization on behalf of its patrons. For a farm requiring a reinspection in addition to the required biannual inspections, an additional fee of ~~no more than $25~~ $45 per reinspection must be paid by the processor or by the marketing organization on behalf of its patrons. The Grade A farm inspection fee must not exceed the lesser of (1) 40 percent of the department's actual average cost per farm inspection or reinspection; or (2) the dollar limits set in this subdivision. No fee increase may be implemented until after the commissioner has held three or more public hearings.

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Sec. 32. Minnesota Statutes 2002, section 32.394, subdivision 8b, is amended to read:

Subd. 8b. [MANUFACTURING GRADE FARM CERTIFICATION.] A processor or marketing organization of milk, milk products, sheep milk, or goat milk who wishes to market other than Grade A milk must apply for a manufacturing grade farm certification inspection from the commissioner. A manufacturing plant that pasteurizes milk or milk by-products must pay an annual fee based on the number of pasteurization units. This fee must not exceed $140 per unit. The fee for farm certification inspection must not be more than $25 per farm to be paid annually by the processor or by the marketing organization on behalf of its patrons. For a farm requiring more than the one inspection for certification, a reinspection fee of ~~no more than $25~~ $45 must be paid by the processor or by the marketing organization on behalf of its patrons. The fee must be set by the commissioner in an amount necessary to cover 40 percent of the department's actual cost of providing the annual inspection but must not exceed the limits in this subdivision. No fee increase may be implemented until after the commissioner has held three or more public hearings.

Sec. 33. Minnesota Statutes 2002, section 32.394, subdivision 8d, is amended to read:

Subd. 8d. [PROCESSOR ASSESSMENT.] (a) A manufacturer shall pay to the commissioner a fee for fluid milk processed and milk used in the manufacture of fluid milk products sold for retail sale in Minnesota~~. Beginning May 1, 1993, the fee is six cents per hundredweight. If the commissioner determines that a different fee,~~ in an amount not less than five cents and not more than nine cents per hundredweight, when combined with general fund appropriations and fees charged under sections 31.39 and 32.394, subdivision 8, is needed to provide adequate funding for the Grades A and B inspection programs and the administration and enforcement of Laws 1993, chapter 65, the commissioner may, by rule, change the fee on processors within the range provided within this subdivision as set by the commissioner's order except that beginning July 1, 2003, the fee is set at seven cents per hundredweight and thereafter no change within any 12-month period may be in excess of one cent per hundredweight.

(b) Processors must report quantities of milk processed under paragraph (a) on forms provided by the commissioner. Processor fees must be paid monthly. The commissioner may require the production of records as necessary to determine compliance with this subdivision.

(c) The commissioner may create within the department a dairy consulting program to provide assistance to dairy producers who are experiencing problems meeting the sanitation and quality requirements of the dairy laws and rules.

The commissioner may use money appropriated from the dairy services account created in subdivision 9 to pay for the program authorized in this paragraph.

Sec. 34. Minnesota Statutes 2002, section 35.155, is amended to read:

35.155 [CERVIDAE IMPORT RESTRICTIONS.]

~~(a)~~ A person must not import cervidae into the state from a herd that is infected or exposed to chronic wasting disease or from a known chronic wasting disease endemic area, as determined by the board. A person may import cervidae into the state only from a herd that is not in a known chronic wasting disease endemic area, as determined by the board, and the herd has been subject to a state or provincial approved chronic wasting disease monitoring program for at least three years. Cervidae imported in violation of this section may be seized and destroyed by the commissioner of natural resources.

~~(b) This section expires on June 1, 2003.~~

[EFFECTIVE DATE.] This section is effective the day following final enactment.

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Sec. 35. Minnesota Statutes 2002, section 38.02, subdivision 1, is amended to read:

Subdivision 1. [PRO RATA DISTRIBUTION; CONDITIONS.] ~~(1)~~ (a) Money appropriated to aid county and district agricultural societies and associations shall be distributed among all county and district agricultural societies or associations in the state pro rata, upon condition that each of them has complied with the conditions specified in ~~clause (2)~~ paragraph (b).

~~(2)~~ (b) To be eligible to participate in ~~such~~ the distribution of aid, each ~~such~~ agricultural society or association ~~(a)~~ shall have:

(1) held an annual fair for each of the three years last past, unless prevented from doing so because of a calamity or an epidemic declared by the board of health as defined in section 145A.02, subdivision 2, or the state commissioner of health to exist; ~~(b) shall have~~

(2) an annual membership of 25 or more; ~~(c) shall have~~

(3) paid out to exhibitors for premiums awarded at the last fair held a sum not less than the amount to be received from the state; ~~(d) shall have~~

(4) published and distributed not less than three weeks before the opening day of the fair a premium list, listing all items or articles on which premiums are offered and the amounts of such premiums and shall have paid premiums pursuant to the amount shown for each article or item to be exhibited; provided that premiums for school exhibits may be advertised in the published premium list by reference to a school premium list prepared and circulated during the preceding school year; and shall have collected all fees charged for entering an exhibit at the time the entry was made and in accordance with schedule of entry fees to be charged as published in the premium list; ~~(e) shall have~~

(5) paid not more than one premium on each article or item exhibited, excluding championship or sweepstake awards, and excluding the payment of open class premium awards to 4H Club exhibits which at this same fair had won a first prize award in regular 4H Club competition; ~~(f) shall have~~ and

(6) submitted its records and annual report to the commissioner of agriculture on a form provided by the commissioner of agriculture, on or before the first day of November of the ~~current~~ year in which the fair was held.

~~(3)~~ (c) All payments authorized under the provisions of this chapter shall be made only upon the presentation by the commissioner of agriculture with the commissioner of finance of a statement of premium allocations. As used herein the term premium shall mean the cash award paid to an exhibitor for the merit of an exhibit of livestock, livestock products, grains, fruits, flowers, vegetables, articles of domestic science, handicrafts, hobbies, fine arts, and articles made by school pupils, or the cash award paid to the merit winner of events such as 4H Club or Future Farmer Contest, Youth Group Contests, school spelling contests and school current events contests, the award corresponding to the amount offered in the advertised premium list referred to in schedule 2. Payments of awards for horse races, ball games, musical contests, talent contests, parades, and for amusement features for which admission is charged, are specifically excluded from consideration as premiums within the meaning of that term as used herein. Upon receipt of the statement by the commissioner of agriculture, ~~it shall be the duty of~~ the commissioner of finance to shall draw a voucher in favor of the agricultural society or association for the amount to which it is entitled under the provisions of this chapter~~, which~~. The amount shall be computed as follows: On the first $750 premiums paid by each society or association at the last fair held, ~~such~~ the society or association shall receive 100 percent reimbursement; on the second $750 premiums paid, 80 percent; on the third $750 premiums paid, 60 percent; and on any sum in excess of $2,250, 40 percent. The commissioner of finance shall make payments not later than July 15 of the year following the calendar year in which the annual fair was held.

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~~(4)~~ (d) If the total amount of state aid to which the agricultural societies and associations are entitled under the provisions of this chapter exceeds the amount of the appropriation therefor, the amounts to which the societies or associations are entitled shall be prorated so that the total payments by the state will not exceed the appropriation.

Sec. 36. Minnesota Statutes 2002, section 38.02, subdivision 3, is amended to read:

Subd. 3. [CERTIFICATION, COMMISSIONER OF AGRICULTURE.] Any county or district agricultural society which has held its second annual fair is entitled to share pro rata in the distribution. The commissioner of agriculture shall certify to the secretary of the state agricultural society, within 30 days after payments have been made, a list of all county or district agricultural societies that have complied with this chapter, and which are entitled to share in the appropriation. All payments shall be ~~made within three months after the agricultural societies submitted their~~ based on reports submitted by agricultural societies under subdivision 1, paragraph (b), clause ~~(2)(f)~~ (6).

Sec. 37. Minnesota Statutes 2002, section 41A.09, subdivision 2a, is amended to read:

Subd. 2a. [DEFINITIONS.] For the purposes of this section, the terms defined in this subdivision have the meanings given them.

(a) "Ethanol" means fermentation ethyl alcohol derived from agricultural products, including potatoes, cereal, grains, cheese whey, and sugar beets; forest products; or other renewable resources, including residue and waste generated from the production, processing, and marketing of agricultural products, forest products, and other renewable resources, that:

(1) meets all of the specifications in ASTM specification D 4806-88; and

(2) is denatured as specified in Code of Federal Regulations, title 27, parts 20 and 21.

(b) ~~"Wet alcohol" means agriculturally derived fermentation ethyl alcohol having a purity of at least 50 percent but less than 99 percent.~~

(c) "Anhydrous alcohol" means fermentation ethyl alcohol derived from agricultural products as described in paragraph (a), but that does not meet ASTM specifications or is not denatured and is shipped in bond for further processing.

~~(d)~~ "Ethanol plant" means a plant at which ethanol~~, anhydrous alcohol, or wet alcohol~~ is produced.

Sec. 38. Minnesota Statutes 2002, section 41A.09, subdivision 3a, is amended to read:

Subd. 3a. [ETHANOL PRODUCER PAYMENTS.] (a) The commissioner ~~of agriculture~~ shall make cash payments to producers of ethanol~~, anhydrous alcohol, and wet alcohol~~ located in the state~~. These payments shall apply only to ethanol, anhydrous alcohol, and wet alcohol fermented in the state and produced at plants~~ that have begun production by June 30, 2000. For the purpose of this subdivision, an entity that holds a controlling interest in more than one ethanol plant is considered a single producer. The amount of the payment for each producer's annual production, ~~is:~~

~~(1)~~ except as provided in paragraph ~~(b)~~ (c), is 20 cents per gallon for each gallon of ethanol ~~or anhydrous alcohol~~ produced on or before June 30, 2000, or ten years after the start of production, whichever is later~~, 19 cents per gallon; and~~

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(2) for each gallon produced of wet alcohol on or before June 30, 2000, or ten years after the start of production, whichever is later, a payment in cents per gallon calculated by the formula "alcohol purity in percent divided by five," and rounded to the nearest cent per gallon, but not less than 11 cents per gallon.

The producer payments for anhydrous alcohol and wet alcohol under this section may be paid to either the original producer of anhydrous alcohol or wet alcohol or the secondary processor, at the option of the original producer, but not to both. The first claim for production after June 30, 2003, must be accompanied by a disclosure statement on a form provided by the commissioner. The disclosure statement must include a detailed description of the organization of the business structure of the claimant listing the percentages of ownership by any person or other entity with an ownership interest of five percent or greater, the distribution of income received by the claimant, including operating income and payments under this subdivision. The disclosure statement must include information sufficient to demonstrate that a majority of the ultimate beneficial interest in the entity receiving payments under this section is owned by farmers or spouses of farmers, as defined in section 500.24, residing in Minnesota. Subsequent quarterly claims must report changes in ownership. Payments must not be made to a claimant that has less than a majority of Minnesota farmer control except that the commissioner may grant an exemption from the farmer majority ownership requirement to a claimant that, on the day following final enactment of this section, has demonstrated greater than 40 percent farmer ownership which, when combined with ownership interests of persons residing within 30 miles of the plant, exceeds 50 percent. In addition, a claimant located in a city of the first class which qualifies for payments in all other respects is not subject to this condition. Information provided under this paragraph is nonpublic data under section 13.02, subdivision 9.

(b) No payments shall be made for ethanol production that occurs after June 30, 2010.

~~(b)~~ (c) If the level of production at an ethanol plant increases due to an increase in the production capacity of the plant, the payment under paragraph (a)~~, clause (1),~~ applies to the additional increment of production until ten years after the increased production began. Once a plant's production capacity reaches 15,000,000 gallons per year, no additional increment will qualify for the payment.

(c) The commissioner shall make payments to producers of ethanol or wet alcohol in the amount of 1.5 cents for each kilowatt hour of electricity generated using closed-loop biomass in a cogeneration facility at an ethanol plant located in the state. Payments under this paragraph shall be made only for electricity generated at cogeneration facilities that begin operation by June 30, 2000. The payments apply to electricity generated on or before the date ten years after the producer first qualifies for payment under this paragraph. Total payments under this paragraph in any fiscal year may not exceed $750,000. For the purposes of this paragraph:

(1) "closed-loop biomass" means any organic material from a plant that is planted for the purpose of being used to generate electricity or for multiple purposes that include being used to generate electricity; and

~~(2) "cogeneration" means the combined generation of:~~

~~(i) electrical or mechanical power; and~~

~~(ii) steam or forms of useful energy, such as heat, that are used for industrial, commercial, heating, or cooling purposes.~~

~~(d) Payments under paragraphs (a) and (b) to all producers may not exceed $35,150,000 in a fiscal year.~~ (d) Total payments under paragraphs (a) and ~~(b)~~ (c) to a producer in a fiscal year may not exceed ~~$2,850,000~~ $3,000,000.

(e) By the last day of October, January, April, and July, each producer shall file a claim for payment for ethanol~~, anhydrous alcohol, and wet alcohol~~ production during the preceding three calendar months. ~~A producer with more than one plant shall file a separate claim for each plant.~~ A producer that files a claim under this subdivision shall

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include a statement of the producer's total ethanol~~, anhydrous alcohol, and wet alcohol~~ production in Minnesota during the quarter covered by the claim~~, including anhydrous alcohol and wet alcohol produced or received from an outside source~~. ~~A producer shall file a separate claim for any amount claimed under paragraph (c).~~ For each claim and statement of total ethanol~~, anhydrous alcohol, and wet alcohol~~ production filed under this subdivision, the volume of ethanol~~, anhydrous alcohol, and wet alcohol~~ production ~~or amounts of electricity generated using closed-loop biomass~~ must be examined by an independent certified public accountant in accordance with standards established by the American Institute of Certified Public Accountants.

(f) Payments shall be made November 15, February 15, May 15, and August 15. A separate payment shall be made for each claim filed. Except as provided in paragraph ~~(j)~~ (g), the total quarterly payment to a producer under this paragraph~~, excluding amounts paid under paragraph (c),~~ may not exceed $750,000.

(g) If the total amount for which all producers are eligible in a quarter under paragraph (c) exceeds the amount available for payments, the commissioner shall make payments in the order in which the plants covered by the claims began generating electricity using closed-loop biomass.

~~(h) After July 1, 1997, new production capacity is only eligible for payment under this subdivision if the commissioner receives:~~

~~(1) an application for approval of the new production capacity;~~

~~(2) an appropriate letter of long-term financial commitment for construction of the new production capacity; and~~

~~(3) copies of all necessary permits for construction of the new production capacity.~~

~~The commissioner may approve new production capacity based on the order in which the applications are received.~~

(i) The commissioner may not approve any new production capacity after July 1, 1998, except that a producer with an approved production capacity of at least 12,000,000 gallons per year but less than 15,000,000 gallons per year prior to July 1, 1998, is approved for 15,000,000 gallons of production capacity.

~~(j)~~ (g) Notwithstanding the quarterly payment limits of paragraph (f), the commissioner shall make an additional payment in the ~~eighth~~ fourth quarter of each fiscal ~~biennium~~ year to ethanol producers for the lesser of: (1) 19 20 cents per gallon of production in the ~~eighth~~ fourth quarter of the ~~biennium~~ year that is greater than 3,750,000 gallons; or (2) the total amount of payments lost during the first ~~seven~~ three quarters of the ~~biennium~~ fiscal year due to plant outages, repair, or major maintenance. Total payments to an ethanol producer in a fiscal ~~biennium~~ year, including any payment under this paragraph, must not exceed the total amount the producer is eligible to receive based on the producer's approved production capacity. The provisions of this paragraph apply only to production losses that occur in quarters beginning after December 31, 1999.

(k) For the purposes of this subdivision "new production capacity" means annual ethanol production capacity that was not allowed under a permit issued by the pollution control agency prior to July 1, 1997, or for which construction did not begin prior to July 1, 1997.

(h) The commissioner shall reimburse ethanol producers for any deficiency in payments during earlier quarters if the deficiency occurred because appropriated money was insufficient to make timely payments in the full amount provided in paragraph (a). Notwithstanding the quarterly or annual payment limitations in this subdivision, the commissioner shall begin making payments for earlier deficiencies in each fiscal year that appropriations for ethanol payments exceed the amount required to make eligible scheduled payments. Payments for earlier deficiencies must continue until the deficiencies for each producer are paid in full.

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Sec. 39. Minnesota Statutes 2002, section 116.07, subdivision 7a, is amended to read:

Subd. 7a. [NOTICE OF APPLICATION FOR LIVESTOCK FEEDLOT PERMIT.] (a) A person who applies to the pollution control agency or a county board for a permit to construct or expand a feedlot with a capacity of 500 animal units or more shall, not ~~later~~ less than ~~ten~~ 20 business days ~~after the application is submitted~~ before the date on which a permit is issued, provide notice to each resident and each owner of real property within 5,000 feet of the perimeter of the proposed feedlot. The notice may be delivered by first class mail, in person, or by the publication in a newspaper of general circulation within the affected area and must include information on the type of livestock and the proposed capacity of the feedlot. Notification under this subdivision is satisfied under an equal or greater notification requirement of a county conditional use permit.

(b) The agency or a county board must verify that notice was provided as required under paragraph (a) prior to issuing a permit.

Sec. 40. Minnesota Statutes 2002, section 116D.04, subdivision 2a, is amended to read:

Subd. 2a. Where there is potential for significant environmental effects resulting from any major governmental action, the action shall be preceded by a detailed environmental impact statement prepared by the responsible governmental unit. The environmental impact statement shall be an analytical rather than an encyclopedic document which describes the proposed action in detail, analyzes its significant environmental impacts, discusses appropriate alternatives to the proposed action and their impacts, and explores methods by which adverse environmental impacts of an action could be mitigated. The environmental impact statement shall also analyze those economic, employment and sociological effects that cannot be avoided should the action be implemented. To ensure its use in the decision making process, the environmental impact statement shall be prepared as early as practical in the formulation of an action.

(a) The board shall by rule establish categories of actions for which environmental impact statements and for which environmental assessment worksheets shall be prepared as well as categories of actions for which no environmental review is required under this section.

(b) The responsible governmental unit shall promptly publish notice of the completion of an environmental assessment worksheet in a manner to be determined by the board and shall provide copies of the environmental assessment worksheet to the board and its member agencies. Comments on the need for an environmental impact statement may be submitted to the responsible governmental unit during a 30 day period following publication of the notice that an environmental assessment worksheet has been completed. The responsible governmental unit's decision on the need for an environmental impact statement shall be based on the environmental assessment worksheet and the comments received during the comment period, and shall be made within 15 days after the close of the comment period. The board's chair may extend the 15 day period by not more than 15 additional days upon the request of the responsible governmental unit.

(c) An environmental assessment worksheet shall also be prepared for a proposed action whenever material evidence accompanying a petition by not less than 25 individuals, submitted before the proposed project has received final approval by the appropriate governmental units, demonstrates that, because of the nature or location of a proposed action, there may be potential for significant environmental effects. Petitions requesting the preparation of an environmental assessment worksheet shall be submitted to the board. The chair of the board shall determine the appropriate responsible governmental unit and forward the petition to it. A decision on the need for an environmental assessment worksheet shall be made by the responsible governmental unit within 15 days after the petition is received by the responsible governmental unit. The board's chair may extend the 15 day period by not more than 15 additional days upon request of the responsible governmental unit.

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(d) Except in an environmentally sensitive location where Minnesota Rules, part 4410.4300, subpart 29, item B, applies, the proposed action is exempt from environmental review under this chapter and rules of the board, if:

(1) the proposed action is:

(i) an animal feedlot facility with a capacity of less than 1,000 animal units; or

(ii) an expansion of an existing animal feedlot facility with a total cumulative capacity of less than 1,000 animal units;

(2) the application for the animal feedlot facility includes a written commitment by the proposer to design, construct, and operate the facility in full compliance with pollution control agency feedlot rules; and

(3) the county board holds a public meeting for citizen input at least ten business days prior to the pollution control agency or county issuing a feedlot permit for the animal feedlot facility unless another public meeting for citizen input has been held with regard to the feedlot facility to be permitted. The exemption in this paragraph is in addition to other exemptions provided under other law and rules of the board.

(e) The board may, prior to final approval of a proposed project, require preparation of an environmental assessment worksheet by a responsible governmental unit selected by the board for any action where environmental review under this section has not been specifically provided for by rule or otherwise initiated.

~~(e)~~ (f) An early and open process shall be utilized to limit the scope of the environmental impact statement to a discussion of those impacts, which, because of the nature or location of the project, have the potential for significant environmental effects. The same process shall be utilized to determine the form, content and level of detail of the statement as well as the alternatives which are appropriate for consideration in the statement. In addition, the permits which will be required for the proposed action shall be identified during the scoping process. Further, the process shall identify those permits for which information will be developed concurrently with the environmental impact statement. The board shall provide in its rules for the expeditious completion of the scoping process. The determinations reached in the process shall be incorporated into the order requiring the preparation of an environmental impact statement.

~~(f)~~ (g) Whenever practical, information needed by a governmental unit for making final decisions on permits or other actions required for a proposed project shall be developed in conjunction with the preparation of an environmental impact statement.

~~(g)~~ (h) An environmental impact statement shall be prepared and its adequacy determined within 280 days after notice of its preparation unless the time is extended by consent of the parties or by the governor for good cause. The responsible governmental unit shall determine the adequacy of an environmental impact statement, unless within 60 days after notice is published that an environmental impact statement will be prepared, the board chooses to determine the adequacy of an environmental impact statement. If an environmental impact statement is found to be inadequate, the responsible governmental unit shall have 60 days to prepare an adequate environmental impact statement.

Sec. 41. Minnesota Statutes 2002, section 116O.09, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The agricultural utilization research institute is established as a nonprofit corporation under section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The agricultural utilization research institute shall promote the establishment of new products and product uses and the expansion of existing markets for the state's agricultural commodities and products, including direct financial and technical assistance for Minnesota entrepreneurs. The institute ~~must be located near an existing agricultural research facility in the agricultural region of the state~~ must establish or maintain facilities and work with private and public entities to leverage the resources available to achieve maximum results for Minnesota agriculture.

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Sec. 42. Minnesota Statutes 2002, section 116O.09, subdivision 1a, is amended to read:

Subd. 1a. [BOARD OF DIRECTORS.] The board of directors of the agricultural utilization research institute is comprised of:

(1) the chairs of the senate and the house of representatives standing committees with jurisdiction over agriculture ~~policy~~ finance or the chair's designee;

(2) two representatives of statewide farm organizations appointed by the commissioner;

(3) two representatives of agribusiness~~, one of whom is a member of the Minnesota Technology, Inc. board representing agribusiness~~; and

(4) three representatives of the commodity promotion councils.

A member of the board of directors under clauses ~~(1)~~ (2) to (4), including a member serving on July 1, 2003, may ~~designate a permanent or temporary replacement member representing the same constituency~~ serve for a maximum of two three-year terms. The board's compensation is governed by section 15.0575, subdivision 3.

Sec. 43. Minnesota Statutes 2002, section 116O.09, subdivision 2, is amended to read:

Subd. 2. [DUTIES.] (a) In addition to the duties and powers assigned to the institutes in section 116O.08, the agricultural utilization research institute shall:

(1) identify ~~the various market segments characterized by Minnesota's agricultural industry, address each segment's individual needs, and identify~~ development opportunities ~~in each segment~~ for agricultural products;

(2) ~~develop and~~ implement a ~~utilization~~ program ~~for each segment~~ that ~~addresses its development needs and~~ identifies techniques to meet those ~~needs~~ opportunities;

(3) monitor and coordinate research among the public and private organizations and individuals specifically addressing procedures to transfer new technology to businesses, farmers, and individuals;

(4) provide research grants to public and private educational institutions and other organizations that are undertaking basic and applied research ~~that would~~ to promote the development of ~~the various~~ emerging agricultural industries; ~~and~~

(5) provide financial assistance including, but not limited to: (i) direct loans, guarantees, interest subsidy payments, and equity investments; and (ii) participation in loan participations. The board of directors shall establish the terms and conditions of the financial assistance. assist organizations and individuals with market analysis and product marketing implementations;

(6) to the extent possible earn and receive revenue from contracts, patents, licenses, royalties, grants, fees-for-service, and memberships;

(7) work with the department of agriculture, the United States Department of Agriculture, the department of trade and economic development, and other agencies to maximize marketing opportunities locally, nationally, and internationally; and

(8) leverage available funds from federal, state, and private sources to develop new markets and value added opportunities for Minnesota agricultural products.

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(b) The agricultural utilization research institute board of directors shall have the sole approval authority for establishing agricultural utilization research priorities, requests for proposals to meet those priorities, awarding of grants, hiring and direction of personnel, and other expenditures of funds consistent with the adopted and approved mission and goals of the agricultural utilization research institute. The actions and expenditures of the agricultural utilization research institute are subject to audit and regular annual report to the legislature in general and specifically the house of representatives agriculture committee, the senate agriculture and rural development committee, the house of representatives environment and natural resources finance committee, and the senate environment and agriculture budget division. The institute shall annually report by February 1 to the senate and house of representative standing committees with jurisdiction over agricultural policy and funding. The report must list projects initiated, progress on projects, and financial information relating to expenditures, income from other sources, and other information to allow the committees to evaluate the effectiveness of the institute's activities.

Sec. 44. Minnesota Statutes 2002, section 216C.41, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) The definitions in this subdivision apply to this section.

(b) "Qualified hydroelectric facility" means a hydroelectric generating facility in this state that:

(1) is located at the site of a dam, if the dam was in existence as of March 31, 1994; and

(2) begins generating electricity after July 1, 1994, or generates electricity after substantial refurbishing of a facility that begins after July 1, 2001.

(1) produces two megawatts or less of electricity as measured by nameplate rating and begins generating electricity after December 31, 1996, and before July 1, 1999;

(2) begins generating electricity after June 30, 1999, produces two megawatts or less of electricity as measured by nameplate rating, and is:

(i) ~~located within one county and owned by a natural person who owns the land where the facility is sited~~ owned by a resident of Minnesota or an entity that is organized under the laws of this state and is not prohibited from owning agricultural land under section 500.24;

(ii) owned by a Minnesota small business as defined in section 645.445;

(iii) owned by a nonprofit organization; or

(iv) owned by a tribal council if the facility is located within the boundaries of the reservation; or

(3) begins generating electricity after June 30, 1999, produces seven megawatts or less of electricity as measured by nameplate rating, and:

(i) is owned by a cooperative organized under chapter 308A; and

(ii) all shares and membership in the cooperative are held by natural persons or estates, at least 51 percent of whom reside in a county or contiguous to a county where the wind energy production facilities of the cooperative are located.

(d) "Qualified on-farm biogas recovery facility" means an anaerobic digester system that:

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(1) is located at the site of an agricultural operation;

(2) is owned by a natural person who owns or rents the land where the facility is located; and

(3) begins generating electricity after July 1, 2001.

(e) "Anaerobic digester system" means a system of components that processes animal waste based on the absence of oxygen and produces gas used to generate electricity.

Sec. 45. Minnesota Statutes 2002, section 273.13, subdivision 23, is amended to read:

(c) Agricultural land as used in this section means contiguous acreage of ten acres or more, used during the preceding year for agricultural purposes. "Agricultural purposes" as used in this section means the raising or cultivation of agricultural products or enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public Law Number 99-198. Contiguous acreage on the same parcel, or contiguous acreage on an immediately adjacent parcel under the same ownership, may also qualify as agricultural land, but only if it is pasture, timber, waste, unusable wild land, or land included in state or federal farm programs. Agricultural classification for property shall be determined excluding the house, garage, and immediately surrounding one acre of land, and shall not be based upon the market value of any residential structures on the parcel or contiguous parcels under the same ownership.

Land shall be classified as agricultural even if all or a portion of the agricultural use of that property is the leasing to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative for qualifying under section 273.111.

(e) The term "agricultural products" as used in this subdivision includes production for sale of:

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(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing animals, horticultural and nursery stock ~~described in sections 18.44 to 18.61~~, fruit of all kinds, vegetables, forage, grains, bees, and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned for agricultural use;

(3) the commercial boarding of horses if the boarding is done in conjunction with raising or cultivating agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood products; and

(8) maple syrup taken from trees grown by a person licensed by the Minnesota department of agriculture under chapter 28A as a food processor.

(f) If a parcel used for agricultural purposes is also used for commercial or industrial purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2), and (3),

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(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

Sec. 46. [FEEDLOT ENVIRONMENT REVIEW STUDY; REPORT.]

The environmental quality board shall conduct a study identifying and evaluating information pertaining to environmental review of feedlots of fewer than 1,000 animal units in Minnesota that must include:

(1) significant issues that have been raised during the environmental review process;

(2) avoidance, mitigation, and treatment that resulted from consideration of environmental impacts; and

(3) an assessment of the impact of Minnesota Statutes, section 116D.04, subdivision 2a, paragraph (d), on public participation.

The study shall also examine the process of public notifications, hearings, and opportunities for local residents and property owners to provide input under the pollution control agency's feedlot rules permitting process.

The board shall report by January 15, 2004, to the committees of the house of representatives and the senate with jurisdiction over agricultural, environmental, and judiciary policy, and agricultural finance on the results of the study.

Sec. 47. [REPEALER.]

Minnesota Statutes 2002, sections 17.110; 18B.05, subdivision 2; 37.26; 41A.09, subdivisions 1, 5a, 6, 7, and 8, are repealed.

ARTICLE 4

PLANT PROTECTION AND EXPORT CERTIFICATION

Section 1. [18G.01] [PLANT PROTECTION; POWERS OF COMMISSIONER OF AGRICULTURE.]

(a) This chapter authorizes the commissioner to abate, suppress, eradicate, prevent, or otherwise regulate the introduction or establishment of plant pests that threaten Minnesota's agricultural, forest, or horticultural interests or the general ecological quality of the state.

(b) The commissioner may employ entomologists, plant pathologists, and other qualified employees necessary to administer and enforce this chapter.

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Sec. 2. [18G.02] [DEFINITIONS.]

Subdivision 1. [SCOPE.] The definitions in this section apply to this chapter.

Subd. 2. [BIOLOGICAL CONTROL AGENT.] "Biological control agent" means a parasite, predator, pathogen, or competitive organism intentionally released by humans for the purpose of biological control with the intent of causing a reduction of a host or prey population.

Subd. 3. [CERTIFICATE.] "Certificate" means a document authorized or prepared by a federal or state regulatory official that affirms, declares, or verifies that an article, plant, product, shipment, or other officially regulated item meets phytosanitary, nursery inspection, pest freedom, plant registration or certification, or other legal requirements.

Subd. 4. [CERTIFICATION.] "Certification" means a regulatory official's act of affirming, declaring, or verifying compliance with phytosanitary, nursery inspection, pest freedom, plant registration or certification, or other legal requirements.

Subd. 5. [COMMISSIONER.] "Commissioner" means the commissioner of agriculture or the commissioner's designated employee, representative, or agent.

Subd. 6. [COMPLIANCE AGREEMENT.] "Compliance agreement" means a written agreement between a person and a regulatory agency to achieve compliance with regulatory requirements.

Subd. 7. [CONVEYANCE.] "Conveyance" is a means of transportation.

Subd. 8. [DEPARTMENT.] "Department" means the department of agriculture.

Subd. 9. [EMERGENCY REGULATION.] "Emergency regulation" means a regulation placed in effect by the commissioner without prior public notice in order to take necessary and immediate regulatory action.

Subd. 10. [ERADICATION.] "Eradication" means elimination of a pest from a defined geographic area.

Subd. 11. [EXOTIC SPECIES.] "Exotic species" means a species that is not native to the area. Exotic species also means a species occurring outside its natural range.

Subd. 12. [HARMFUL PLANT PEST.] "Harmful plant pest" means a plant pest that constitutes a significant threat to the agricultural, forest, or horticultural interests of Minnesota or the general environmental quality of the state.

Subd. 13. [INFECTED.] "Infected" means a plant that is:

(1) contaminated with pathogenic microorganisms;

(2) being parasitized;

(3) a host or carrier of an infectious, transmissible, or contagious pest; or

(4) so exposed to a plant listed in clause (1), (2), or (3) that one of those conditions can reasonably be expected to exist and the plant may also pose a risk of contamination to other plants or the environment.

Subd. 14. [INFESTED.] "Infested" means a plant has been overrun by plant pests, including weeds.

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Subd. 15. [INVASIVE SPECIES.] "Invasive species" means an exotic or nonnative species whose introduction and establishment causes, or may cause, economic or environmental harm or harm to human health.

Subd. 16. [MARK.] "Mark" means an official indicator affixed by the commissioner for purposes of identification or separation, to, on, around, or near, plants or plant material known or suspected to be infected with a plant pest. This includes, but is not limited to, paint, markers, tags, seals, stickers, tape, ribbons, signs, or placards.

Subd. 17. [NURSERY STOCK.] "Nursery stock" means a plant intended for planting or propagation, including, but not limited to, trees, shrubs, vines, perennials, biennials, grafts, cuttings, and buds that may be sold for propagation, whether cultivated or wild, and all viable parts of these plants. Nursery stock does not include:

(1) field and forage crops;

(2) the seeds of grasses, cereal grains, vegetable crops, and flowers;

(3) vegetable plants, bulbs, or tubers;

(4) cut flowers, unless stems or other portions are intended for propagation;

(5) annuals; or

(6) Christmas trees.

Subd. 18. [OWNER.] "Owner" includes, but is not limited to, the person with the legal right of possession, proprietorship of, or responsibility for the property or place where any of the articles regulated in this chapter are found, or the person who is in possession of, proprietorship of, or has responsibility for the regulated articles.

Subd. 19. [PERMIT.] "Permit" means a document issued by a regulatory official that allows the movement of any regulated item from one location to another in accordance with specified conditions or requirements and for a specified purpose.

Subd. 20. [PERSON.] "Person" means an individual, firm, corporation, partnership, association, trust, joint stock company, or unincorporated organization; the state; a state agency; or a political subdivision.

Subd. 21. [PEST.] "Pest" means any living agent capable of reproducing itself that causes or may potentially cause harm to plants or other biotic organisms.

Subd. 22. [PHYTOSANITARY CERTIFICATE OR EXPORT CERTIFICATE.] "Phytosanitary certificate" or "export certificate" means a document authorized or prepared by a duly authorized federal or state official that affirms, declares, or verifies that an article, nursery stock, plant, plant product, shipment, or any other officially regulated article meets applicable, legally established, plant pest regulations, including this chapter.

Subd. 23. [PLANT.] "Plant" means a plant, plant product, plant part, or reproductive or propagative part of a plant, plant product, or plant part, including all growing media, packing material, or containers associated with the plant, plant part, or plant product.

Subd. 24. [PLANT PEST.] "Plant pest" includes, but is not limited to, an invasive species or any pest of plants, agricultural commodities, horticultural products, nursery stock, or noncultivated plants by organisms such as insects, snails, nematodes, fungi, viruses, bacterium, microorganisms, mycoplasma-like organisms, weeds, plants, and parasitic plants.

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Subd. 25. [PRECLEARANCE.] "Preclearance" means an agreement between quarantine officials of exporting and importing states to pass plants, plant material, or other items through quarantine by allowing the exporting state to inspect the plants preshipment, rather than the importing state inspecting the shipment upon arrival.

Subd. 26. [PUBLIC NUISANCE.] "Public nuisance" means:

(1) a plant, appliance, conveyance, or article that is infested with plant pests that may cause significant damage or harm; or

(2) premises where a plant pest is found.

Subd. 27. [QUARANTINE.] "Quarantine" means an enforced isolation or restriction of free movement of plants, plant material, animals, animal products, or any article or material in order to treat, control, or eradicate a plant pest.

Subd. 28. [REGULATED ARTICLE.] "Regulated article" means any item, the movement of which is governed by quarantine or this chapter.

Subd. 29. [REGULATED NONQUARANTINE PEST.] "Regulated nonquarantine pest" means a plant pest that has not been quarantined by state or federal agencies and whose presence in plants or articles may pose an unacceptable risk to nursery stock, other plants, the environment, or human activities.

Subd. 30. [SIGNIFICANT DAMAGE OR HARM.] "Significant damage" or "harm" means a level of adverse impact that results in economic damage, injury, or loss that exceeds the cost of control for a particular crop.

Sec. 3. [18G.03] [POWERS AND DUTIES OF COMMISSIONER.]

Subdivision 1. [ENTRY AND INSPECTION.] (a) The commissioner may enter and inspect a public or private place that might harbor plant pests and may require that the owner destroy or treat plant pests, plants, or other material.

(b) If the owner fails to properly comply with a directive of the commissioner, the commissioner may have any necessary work done at the owner's expense. The commissioner shall notify the owner of the deadline for paying those expenses. If the owner does not reimburse the commissioner for an expense within a time specified by the commissioner, the expense is a charge upon the county as provided in subdivision 4.

(c) If a dangerous plant pest infestation or infection threatens plants of an area in the state, the commissioner may take any measures necessary to eliminate or alleviate the danger.

(d) The commissioner may collect fees required by this chapter.

(e) The commissioner may issue and enforce a written or printed "stop-sale" order to the owner or custodian of any plants or articles infested or infected with dangerously injurious plant pests.

Subd. 2. [RULES.] The commissioner may adopt rules to carry out the purposes of this chapter.

Subd. 3. [QUARANTINE.] The commissioner may impose a quarantine to restrict or prohibit the transportation or distribution of plants or other materials capable of carrying plant pests into or through any part of this state.

Subd. 4. [COLLECTION OF CHARGES FOR WORK DONE FOR OWNER.] If the commissioner incurs an expense in conjunction with carrying out subdivision 1 and is not reimbursed by the owner of the land, the expense is a legal charge against the land. After the expense is incurred, the commissioner shall file verified and itemized

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statements of the cost of all services rendered with the county auditor of the county in which the land is located. The county auditor shall place a lien in favor of the commissioner against the land involved, which must be certified by the county auditor and collected according to section 429.101.

Sec. 4. [18G.04] [ERADICATION, CONTROL, AND ABATEMENT OF NUISANCES; ISSUING CONTROL ORDERS.]

Subdivision 1. [PUBLIC NUISANCE.] Any premises, plant, appliance, conveyance, or article that is infected or infested with plant pests that may cause significant damage or harm and any premises where any plant pest is found is a public nuisance and must be prosecuted as a public nuisance in all actions and proceedings. All legal remedies for the prevention and abatement of a nuisance apply to a public nuisance under this section. It is unlawful for any person to maintain a public nuisance.

Subd. 2. [CONTROL ORDER.] In order to prevent the introduction or spread of harmful or dangerous plant pests, the commissioner may issue orders for necessary control measures. These orders may indicate the type of specific control to be used, the compound or material, the manner or the time of application, and who is responsible for carrying out the control order. Control orders may include directions to control or abate the plant pest to an acceptable level; eradicate the plant pest; restrict the movement of the plant pest or any material, article, appliance, plant, or means of conveyance suspected to be carrying the plant pest; or destroy plants or plant products infested or infected with a plant pest. Material suspected of being infested or infected with a plant pest may be confiscated by the commissioner.

Sec. 5. [18G.05] [DISCOVERY OF PLANT PESTS; OFFICIAL MARKING OF INFESTED OR INFECTED ARTICLES.]

Upon knowledge of the existence of a dangerous or injurious plant pest or invasive species within the state, the commissioner may conspicuously mark all plants, infested areas, materials, and articles known or suspected to be infected or infested with the plant pest or invasive species. Persons, owners, or tenants in possession of the premises or area in which the existence of the plant pest or invasive species is suspected must be notified by the commissioner with prescribed control measures. A person must comply with the commissioner's control order within the prescribed time. If the commissioner determines that satisfactory control or mitigation of the pest has been achieved, the order must be released.

Sec. 6. [18G.06] [ESTABLISHMENT OF QUARANTINE RESTRICTIONS.]

Subdivision 1. [SCOPE.] The commissioner may impose a quarantine restricting or regulating the production, movement, or existence of plants, plant products, agricultural commodities, crop seed, farm products, or other articles or materials in order that the introduction or spread of a plant pest may be prevented or limited or an existing plant pest may be controlled or eradicated.

Subd. 2. [QUARANTINE NOTICE.] (a) The commissioner may issue orders to take prompt regulatory action in plant pest emergencies on regulated articles. If continuing quarantine action is required, a formal quarantine may be imposed. Orders may be issued to retain necessary quarantine action on a few properties if eradication treatments have been applied and continuing quarantine action is no longer necessary for the majority of the regulated area.

(b) The commissioner may place an emergency regulation or quarantine in effect without prior public notice in order to take immediate regulatory action to prevent the introduction or establishment of a plant pest.

(c) The commissioner may enter into cooperative agreements with the United States Department of Agriculture and other federal, state, city, or county agencies to assist in the enforcement of federal quarantines. The commissioner may adopt a quarantine or regulation against a pest or an area not covered by a federal quarantine.

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The commissioner may seize, destroy, or require treatment of products moved from a federally regulated area if they were not moved in accordance with the federal quarantine regulations or, if certified, they were found to be infested with the pest organism.

(d) The commissioner may impose a quarantine against a plant pest that is not quarantined in other states to prevent the spread of the plant pest within this state. The commissioner may enact a quarantine against a plant pest of regional or national significance even when no federal domestic quarantine has been adopted. These quarantines regulate intrastate movement between quarantined and nonquarantined areas of this state. The commissioner may enact a parallel state quarantine if there is a federal quarantine applied to a portion of the state.

(e) The commissioner may impose a state exterior quarantine if the plant pest is not established in this state but is established in other states. State exterior quarantines may be enacted even if no federal domestic quarantine has been adopted. The commissioner may issue control orders at destinations necessary to prevent the introduction or spread of plant pests.

Subd. 3. [DESCRIPTION OF REGULATED AREAS.] (a) The regulated area to be described in a quarantine may involve the entire state, portions of the state, or certain names and locations of infested properties.

(b) Regulated quarantine areas may be subdivided into suppression areas and generally infested areas if it is desirable to control movement into suppression areas from generally infested areas.

(c) Quarantine provisions or areas regulated may be amended by the commissioner through publication of a notice to that effect in local newspapers or through direct written notice to affected property owners.

(d) If an infestation in a specific regulated area has been eliminated to the extent that movement of the regulated articles no longer present a pest risk, the quarantine in that area may be removed. The commissioner may also exempt areas from specified requirements until eradication has been achieved.

Subd. 4. [MOVEMENT OF REGULATED ARTICLES.] (a) A regulated article may be refused entry into this state if it is prohibited or is required to be certified and comes from an area regulated by a state or federal quarantine. The owner or carrier of regulated articles that are reportedly originating in nonregulated areas of a quarantined state must provide proof of origin of the regulated articles. An invoice, waybill, or other shipping document satisfactory to the receiving state regulatory official is acceptable as proof of origin.

(b) Certificates or permits are required for the movement of regulated articles from a regulated area to any point outside the regulated area. Certificates or permits are not required for a regulated article originating outside of a regulated area moving to another nonregulated area or moving through or reshipped from a regulated area when the point of origin of the article is clearly indicated on a waybill, bill of lading, shipper's invoice, or other similar document accompanying the shipment. Shipments moving through or being reshipped from a regulated area must be safeguarded against infestation while within the regulated area.

Subd. 5. [PUBLIC NOTIFICATION OF A STATE QUARANTINE OR EMERGENCY REGULATION.] (a) For pest threats of imminent concern, the commissioner may declare an emergency quarantine or enact emergency orders.

(b) If circumstances permit, public notice and a public hearing must be held to solicit comments regarding the proposed state quarantine. If a pest threat is of imminent concern and there is insufficient time to allow full public comment on the proposed quarantine, the commissioner may impose an emergency quarantine until a state quarantine can be implemented.

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(c) Upon establishment of a state quarantine, and upon institution of modifications or repeal, notices must be sent to the principal parties of interest, including federal and state authorities, and to organizations representing the public involved in the restrictive measures.

Subd. 6. [QUARANTINE REPEAL.] A quarantine may be repealed when its purpose has been accomplished. If a quarantine has attained its objective or if the progress of events has clearly proved that attainment is not possible by the restrictions adopted, a quarantine may be modified or repealed.

Sec. 7. [18G.07] [TREE CARE AND TREE TRIMMING COMPANY REGISTRY.]

Subdivision 1. [CREATION OF REGISTRY.] The commissioner shall maintain a list of all persons and companies that provide tree care or tree trimming services in Minnesota. All tree care providers, tree trimmers, and persons who remove trees, limbs, branches, brush, or shrubs for hire must provide the following information to the commissioner:

(1) accurate and up-to-date business name, address, and telephone number;

(2) a complete list of all Minnesota counties in which they work; and

(3) a complete list of persons in the business who are certified by the International Society of Arborists.

Subd. 2. [INFORMATION DISSEMINATION.] The commissioner shall provide registered tree care companies with information and data regarding any existing or potential regulated forest pest infestations within the state.

Sec. 8. [18G.09] [SHIPMENT OF PLANT PESTS AND BIOLOGICAL CONTROL AGENTS.]

Shipment, introduction into, or release in Minnesota of (1) a plant pest, noxious weed, or other organism that may directly or indirectly affect Minnesota's plant life as a harmful or dangerous pest, parasite, or predator of other organisms, or (2) an arthropod, is prohibited, except under permit issued by the commissioner.

No person may sell, offer for sale, move, convey, transport, deliver, ship, or offer for shipment any plant pest, or biological control agent without a permit from the United States Department of Agriculture, Animal and Plant Health Inspection Service or its state equivalent. A permit may be issued only after the commissioner determines that the proposed shipment or use will not create a hazard to the agricultural, forest, or horticultural interests of this state or the state's general environmental quality. For interstate movement, the permit must be affixed conspicuously to the exterior of each shipping container, box, package, or appliance; accompany each shipping container, box, package, or appliance; or comply with other directions of the commissioner. This section does not apply to intrastate shipments of federal or state approved biological control agents used in this state for control of plant pests. Shipping containers must be escape-proof and the commissioner shall specify labeling and shipping protocols.

Sec. 9. [18G.10] [EXPORT CERTIFICATION, INSPECTIONS, CERTIFICATES, PERMITS, AND FEES.]

Subdivision 1. [PURPOSE.] To ensure continued access to foreign and domestic markets, the commissioner shall provide inspection and certification services to ensure that appropriate phytosanitary restrictions or requirements are fully met.

Subd. 2. [DISPOSITION AND USE OF MONEY RECEIVED.] All fees and penalties collected under this chapter and interest attributable to the money in the account must be deposited in the state treasury and credited to the nursery and phytosanitary account in the agricultural fund. Money in the account, including interest earned, is appropriated to the commissioner for the administration and enforcement of this chapter.

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Subd. 3. [COOPERATIVE AGREEMENTS.] The commissioner may enter into cooperative agreements with federal and state agencies for administration of the export certification program. An exporter of plants or plant products desiring to originate shipments from Minnesota to a foreign country requiring a phytosanitary certificate or export certificate must submit an application to the commissioner.

Subd. 4. [PHYTOSANITARY AND EXPORT CERTIFICATES.] Application for phytosanitary certificates or export certificates must be made on forms provided or approved by the commissioner. The commissioner shall conduct inspections of plants, plant products, or facilities for persons that have applied for or intend to apply for a phytosanitary certificate or export certificate from the commissioner. Inspections must include one or more of the following as requested or required:

(1) an inspection of the plants or plant products intended for export under a phytosanitary certificate or export certificate;

(2) field inspections of growing plants to determine presence or absence of plant diseases, if necessary;

(3) laboratory diagnosis for presence or absence of plant diseases, if necessary;

(4) observation and evaluation of procedures and facilities utilized in handling plants and plant products, if necessary; and

(5) review of United States Department of Agriculture, Federal Grain Inspection Service Official Export Grain Inspection Certificate logs.

The commissioner may issue a phytosanitary certificate or export certificate if the plants or plant products satisfactorily meet the requirements of the importing foreign country and the United States Department of Agriculture requirements. The requirements of the destination countries must be met by the applicant.

Subd. 5. [CERTIFICATE FEES.] (a) The commissioner shall assess the fees in paragraphs (b) to (f) for the inspection, service, and work performed in carrying out the issuance of a phytosanitary certificate or export certificate. The inspection fee must be based on mileage and inspection time.

(b) Mileage charge: current United States Internal Revenue Service mileage rate.

(c) Inspection time: $50 per hour minimum or fee necessary to cover department costs. Inspection time includes the driving time to and from the location in addition to the time spent conducting the inspection.

(d) A fee must be charged for any certificate issued that requires laboratory analysis before issuance. The fee must be deposited into the laboratory account as authorized in section 17.85.

(e) Certificate fee for product value greater than $250: $75 for each phytosanitary or export certificate issued for any single shipment valued at more than $250 in addition to any mileage or inspection time charges that are assessed.

(f) Certificate fee for product value less than $250: $25 for each phytosanitary or export certificate issued for any single shipment valued at less than $250 in addition to any mileage or inspection time charges that are assessed.

Subd. 6. [CERTIFICATE DENIAL OR CANCELLATION.] The commissioner may deny or cancel the issuance of a phytosanitary or export certificate for any of the following reasons:

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(1) failure of the plants or plant products to meet quarantine, regulations, and requirements imposed by the country for which the phytosanitary or export certificate is being requested;

(2) failure to completely or accurately provide the information requested on the application form;

(3) failure to ship the exact plants or plant products which were inspected and approved; or

(4) failure to pay any fees or costs due the commissioner.

Subd. 7. [PLANT PROTECTION INSPECTIONS, CERTIFICATES, PERMITS, AND FEES.] (a) The commissioner may provide inspection, sampling, or certification services to ensure that Minnesota plant products or commodities meet import requirements of other states or countries.

(b) The state plant regulatory official may issue permits and certificates verifying that various Minnesota agricultural products or commodities meet specified phytosanitary requirements, treatment requirements, or pest absence assurances based on determinations by the commissioner. The commissioner may collect fees sufficient to recover costs for these permits or certificates. The fees must be deposited in the nursery and phytosanitary account.

Sec. 10. [18G.11] [COOPERATION WITH OTHER JURISDICTIONS.]

The commissioner may enter into cooperative agreements with organizations, persons, civic groups, governmental agencies, or other organizations to adopt and execute plans to detect and control areas infested or infected with harmful plant pests. The cooperative agreements may include provisions of joint funding of any control treatment.

If a harmful plant pest infestation or infection occurs and cannot be adequately controlled by individual persons, owners, tenants, or local units of government, the commissioner may conduct the necessary control measures independently or on a cooperative basis with federal or other units of government.

Sec. 11. [18G.12] [INVASIVE SPECIES MANAGEMENT AND INVESTIGATION.]

Subdivision 1. [PLANT PEST AND INVASIVE SPECIES RESEARCH.] The commissioner shall conduct research to prevent the introduction or spread of invasive species and plant pests into the state and to investigate the feasibility of their control or eradication.

Subd. 2. [STATEWIDE PROGRAM.] The commissioner shall establish a statewide program to prevent the introduction and the spread of harmful plant pest and terrestrial invasive species. To the extent possible, the program must provide coordination of efforts among governmental entities and private organizations.

Subd. 3. [INVASIVE SPECIES MANAGEMENT PLAN.] The commissioner shall prepare and maintain a long-term terrestrial invasive species management plan which may include specific plans for individual species. The plan must address:

(1) coordination strategies for detection and prevention of accidental introductions;

(2) methods to disseminate information about harmful invasive species to the general public and appropriate agricultural and resource management agencies or organizations;

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(3) coordination of control efforts for selected harmful terrestrial invasive species; and

(4) participation by local units of government and other state and federal agencies in the development and implementation of local management efforts.

Subd. 4. [REGIONAL COOPERATION.] The commissioner shall seek cooperation with other states and Canadian provinces for the purposes of management and control of harmful invasive species.

Subd. 5. [INVASIVE SPECIES ANNUAL REPORT.] By January 15 of each year, the commissioner shall submit a report on harmful terrestrial invasive species to the chairs of the legislative committees having jurisdiction over environmental and agricultural resource issues. The report must include:

(1) detailed information on expenditures for administration, education, management, inspections, surveys, and research;

(2) an overview of accomplishments achieved during the prior calendar year;

(3) an analysis of the effectiveness of management activities;

(4) information related to the participation of other state and local units of government;

(5) information about shade tree protection efforts and results;

(6) an assessment of future management needs; and

(7) proposed goals for the coming year.

Sec. 12. [18G.13] [LOCAL PEST CONTROL.]

Subdivision 1. [PURPOSE.] The purpose of this section is to authorize political subdivisions to establish and fund their own programs to control pests that are likely to cause economic or environmental harm or harm to human health.

Subd. 2. [CONTROL.] The governing body of a county, city, or town may appropriate money to control native or exotic pests.

Subd. 3. [COST.] The governing body of the political subdivision may levy a tax on the taxable property within the subdivision to defray the cost of the activities authorized under subdivision 2.

Subd. 4. [CERTIFICATES OF INDEBTEDNESS.] To provide funds for activities authorized in subdivision 2 in advance of collection of the tax under subdivision 3, the governing body may, after the tax has been levied and certified to the county auditor for collection, issue certificates of indebtedness in anticipation of the collection and payment of the tax. The total amount of the certificates, including principal and interest, must not exceed 90 percent of the amount of the levy and must be payable from the proceeds of the levy no later than two years from the date of issuance. They must be issued on terms and conditions determined by the governing body and must be sold as provided in section 475.60. If the governing body determines that an emergency exists, it may make appropriations from the proceeds of the certificates for authorized purposes without complying with statutory or charter provisions requiring that expenditures be based on a prior budget authorization or other budgeting requirements.

Subd. 5. [DEPOSIT OF PROCEEDS IN SEPARATE FUND.] The proceeds of a tax levied under subdivision 3 or an issue of certificates of indebtedness under subdivision 4 must be deposited in the municipal treasury in a separate fund and spent only for purposes authorized by this section. If no disbursement is made from the fund for a period of five years, any money remaining in the fund may be transferred to the general fund.

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Subd. 6. [PENALTY.] A person who prevents, obstructs, or interferes with the county authorities or their agents in carrying out subdivisions 2 to 5, or neglects to comply with the rules and regulations of the county commissioners adopted under authority of those subdivisions, is guilty of a misdemeanor.

Subd. 7. [REGULATIONS; SCOPE.] A city council, board of county commissioners, or town board may by resolution or ordinance adopt and enforce regulations to control and prevent the spread of plant pests and diseases. The regulations may authorize appropriate officers and employees to:

(1) enter and inspect any public or private place that might harbor plant pests;

(2) provide for the summary removal of diseased trees from public or private places if necessary to prevent the spread of the disease;

(3) require the owner to destroy or treat plant pests, diseased or invasive plants, or other infested material; and

(4) provide for the work at the expense of the owner.

The expense must be a lien upon the property and may be collected as a special assessment as provided by section 429.101 or by charter. In this subdivision, "private place" means every place except a private home.

Sec. 13. [18G.14] [MOSQUITO ABATEMENT.]

Subdivision 1. [DECLARATION OF POLICY.] The abatement or suppression of mosquitoes is advisable and necessary for the maintenance and improvement of the health, welfare, and prosperity of the people. Areas where mosquitoes incubate or hatch are declared to be public nuisances and may be abated under this section. Mosquito abatement may be undertaken under sections 18.041 to 18.161 anywhere in the state by any governmental unit.

Subd. 2. [ESTABLISHING LOCAL BOARD.] A governmental unit may engage in mosquito abatement and establish a mosquito abatement board upon adoption of a resolution to that effect by its governing body or upon adoption of a proposal to that effect by the voters of the governmental unit in the manner provided in subdivision 3.

Subd. 3. [PETITION; HEARING; ELECTION.] If a petition signed by five percent of the property owners or 250 owners, whichever is less, is presented to a governing body requesting the governmental unit to engage in mosquito abatement, a public hearing must be held on the petition by the governing body within 15 days of presentation of the petition. If the governing body does not, within 15 days after the hearing, adopt a resolution to undertake mosquito abatement, the governing body must order a vote to be taken at the next regular election or town meeting on the proposal to undertake mosquito abatement. The governing body must provide ballots to be used at the election or meeting. The ballot must bear the words "Shall the (governmental unit) of ....... engage in mosquito abatement?" If the majority of the votes are affirmative, the governing body must take appropriate action as soon as possible to carry on mosquito abatement. A proposal to undertake mosquito abatement that is rejected by the voters must not be resubmitted to the voters for two years.

Subd. 4. [DISCONTINUING PROGRAM.] If a governmental unit by action of its governing body or voters has chosen to engage in mosquito abatement, the abatement program may be discontinued in the following manner:

(1) if the mosquito abatement was originally undertaken by resolution of the governing body, then by the adoption of a resolution to that effect by the governing body, or by the adoption of a proposal to that effect by the voters of the governmental unit in the manner provided in this subdivision; and

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(2) if the mosquito abatement was originally undertaken by the adoption of a proposal to that effect by the voters of the governmental unit, then only by the adoption of a proposal to that effect by the voters of the governmental unit in the manner provided in subdivision 5.

Subd. 5. [PETITION; HEARING; AND ELECTION TO DISCONTINUE.] If a petition signed by five percent of the property owners or 250 owners, whichever is less, is presented to the governing body engaged in mosquito abatement requesting it to discontinue mosquito abatement, a public hearing must be held on the petition by the governing body within 15 days after presentation of the petition. If the governing body does not, within 15 days after the hearing, adopt a resolution to discontinue mosquito abatement, the governing body must order a vote to be taken at the next regular election or town meeting on the proposal to discontinue mosquito abatement. The governing body shall provide ballots to be used at the election or meeting. The ballot must bear the words "Shall the (governmental unit) of ....... discontinue mosquito abatement?" If a majority of the votes are affirmative, the governing body must take appropriate action as soon as possible to discontinue mosquito abatement. A proposal to discontinue mosquito abatement that is rejected by the voters must not be resubmitted to the voters for two years.

Subd. 6. [ABATEMENT BOARD.] A governing body that has decided, in the manner required by this section, to engage in mosquito abatement, shall appoint three persons to serve as members of a mosquito abatement board with powers specified in subdivision 8. Each member of the board holds office at the pleasure of the governing body and serves without compensation, except that board members may be reimbursed for actual expenses incurred in fulfilling board duties.

Subd. 7. [OFFICERS; MEETINGS.] Immediately after appointment of the board and at the first meeting in each succeeding calendar year, the board shall elect a chair, a secretary, a treasurer, and other necessary officers. The board shall provide for the time and place of holding regular meetings and may establish rules for proceedings. All meetings of the board are open to the public. Two members of the board constitute a quorum, but one member may adjourn from day to day. The board shall keep a written record of its proceedings and an itemized account of all expenditures and disbursements and that record and account must be open at all reasonable times for public inspection.

Subd. 8. [POWERS OF BOARD.] A mosquito abatement board and a joint board established under section 18.131 may, either by board action or through its members, officers, agents, or employees, as may be appropriate:

(1) enter any property within the governmental unit at reasonable times to determine whether mosquito breeding exists;

(2) take necessary and proper steps for the abatement of mosquitoes and other insects and arachnids, such as ticks, mites, and spiders, as the commissioner may designate;

(3) subject to the paramount control of county and state authorities, lagoon and clean up any stagnant pool of water and clean up shores of lakes and streams and other mosquito breeding places;

(4) spray with insecticides, approved by the commissioner, areas in the governmental unit found to be breeding places for mosquitoes or other insects or arachnids designated under clause (2);

(5) purchase supplies and equipment and employ persons necessary and proper for mosquito abatement;

(6) accept gifts of money or equipment to be used for mosquito abatement; and

(7) enter into contracts necessary to accomplish mosquito abatement.

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Subd. 9. [COOPERATE WITH STATE DEPARTMENTS.] Each mosquito abatement board and each governmental unit engaged in mosquito abatement shall cooperate with the University of Minnesota, the commissioners of agriculture, health, natural resources, and transportation, and the agricultural experiment station.

Subd. 10. [TAX LEVY.] An annual tax may be levied for mosquito abatement purposes on all taxable property in any governmental unit undertaking mosquito abatement under this section. The tax must be certified, levied, and collected in the same manner as other taxes levied by the governmental unit.

Subd. 11. [CERTIFICATES OF INDEBTEDNESS.] At any time after the annual tax levy has been certified to the county auditor, and not earlier than October 10 in any year, any governing body may, for the purpose of providing the necessary funds for mosquito abatement for the succeeding year, by resolution, issue and sell as many certificates of indebtedness as may be needed in anticipation of the collection of taxes levied under subdivision 10. Certificates must not be issued in excess of 50 percent of the amount of the tax levy, as spread by the county auditor, to be collected for mosquito abatement. No certificate may be issued to become due and payable later than December 31 of the year succeeding the year in which the tax levy was made. The certificates must not be sold for less than par and accrued interest, and must not bear a greater rate of interest than five percent per annum. Each certificate must state upon its face that the proceeds of the certificate must be used for the mosquito abatement fund, the total amount of the certificates issued, and the amount embraced in the tax levy for that particular purpose. The certificates must be numbered consecutively and be in denominations of $100 or multiples of $100, may have interest coupons attached, and must be otherwise of a form, on terms, and made payable at a place that will best aid in their negotiation. The proceeds of the tax assessed and collected on account of the mosquito abatement fund must be irrevocably pledged for the redemption of the certificates issued. The certificates must be paid solely from the money derived from the levy for the year against which the certificates were issued, or, if they are not sufficient for that purpose, from the levy for the mosquito abatement fund in the next succeeding year. The money derived from the sale of the certificates must be credited to the mosquito abatement fund for the calendar year immediately succeeding the levy and may not be used or spent until the succeeding year. No certificates for any year may be issued until all certificates for prior years have been paid. No certificates may be extended.

Subd. 12. [DEPOSIT AND USE OF FUNDS.] All money received for mosquito abatement purposes, either by way of tax collection or the sale of certificates of indebtedness, must be deposited in the treasury of the governmental unit to the credit of a special fund to be designated as the mosquito abatement fund, must not be used for any other purpose, and must be drawn upon by the proper officials upon the properly authenticated voucher of the mosquito abatement board. No money may be paid from the fund except on orders drawn upon the officer of the governmental unit having charge of the custody of the mosquito abatement fund and signed by the chair and the secretary of the mosquito abatement board. Each mosquito abatement board shall annually file an itemized statement of all receipts and disbursements with its governing body.

Subd. 13. [DUTIES OF COMMISSIONER.] The commissioner:

(1) may establish rules for the conduct of mosquito abatement operations of governmental units and boards engaged in mosquito abatement; and

(2) is an ex officio member of a mosquito abatement board. The commissioner may appoint representatives to act for the commissioner as ex officio members of boards.

Subd. 14. [NATURAL RESOURCES.] The commissioner of natural resources must approve mosquito abatement plans or order modifications the commissioner of natural resources considers necessary for the protection of public water, wild animals, and natural resources before control operations are started on state lands administered by the commissioner of natural resources or in public waters listed on the department of natural resources public waters inventory. The commissioner of natural resources may make necessary modifications in an approved plan or revoke approval of a plan at any time upon written notice to the governing body or mosquito abatement board.

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Subd. 15. [COOPERATION BETWEEN GOVERNMENTAL UNITS.] If two or more adjacent governmental units have authorized mosquito abatement and appointed the members of the mosquito abatement board, the governing bodies may, by written contract, arrange for pooling mosquito abatement funds, apportioning all costs, cooperating in the use of equipment and personnel, and engaging jointly in mosquito abatement upon terms and conditions and subject to mutually agreed upon rules. The immediate control and management of the joint project may, by the terms of the written contract, be entrusted to a joint committee composed of the chair of each of the boards or other board members.

Subd. 16. [UNORGANIZED TOWNS; POWERS OF COUNTY BOARD.] In any town that is unorganized politically, the county board of the county in which the town is situated has all the rights, powers, and duties conferred by this section upon the governing bodies of towns, including town boards, and the county board must act as though it were the governing body and town board of that town and may authorize and undertake mosquito abatement in the town and cause taxes to be levied for mosquito abatement the same as though the town were organized politically and the county board were the governing body and town board. The cost of mosquito abatement in such a town must be paid solely by a tax levy on the property within the town where mosquito abatement is undertaken and no part of the expense of mosquito abatement in that town may be a county expense or paid by the county.

Subd. 17. [COST OF STATE'S SERVICE; REFUNDS.] The actual cost to the state of any service rendered or expense incurred by the commissioner of agriculture or natural resources under this section for the benefit of a mosquito abatement board must be reimbursed by the appropriate governmental unit.

Sec. 14. [18G.16] [SHADE TREE PEST AND DISEASE CONTROL.]

Subdivision 1. [DEFINITIONS.] (a) The definitions in this subdivision apply to this section.

(b) "Metropolitan area" means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

(c) "Municipality" means a home rule charter or statutory city or a town located in the metropolitan area that exercises municipal powers under section 368.01 or any general or special law; a special park district organized under chapter 398; a special-purpose park and recreation board organized under the city charter of a city of the first class located in the metropolitan area; a county in the metropolitan area for the purposes of county-owned property or any portion of a county located outside the geographic boundaries of a city or a town exercising municipal powers; and a municipality or county located outside the metropolitan area with an approved disease control program.

(d) "Shade tree disease" means Dutch elm disease, oak wilt, or any disorder affecting the growth and life of shade trees.

(e) "Wood utilization or disposal system" means facilities, equipment, or systems used for the removal and disposal of diseased shade trees, including collection, transportation, processing, or storage of wood and assisting in the recovery of materials or energy from wood.

(f) "Approved disease control program" means a municipal plan approved by the commissioner to control shade tree disease.

(g) "Disease control area" means an area approved by the commissioner within which a municipality will conduct an approved disease control program.

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(h) "Sanitation" means the identification, inspection, disruption of a common root system, girdling, trimming, removal, and disposal of dead or diseased wood of shade trees, including subsidies for trees removed pursuant to subdivision 4, on public or private property within a disease control area.

(i) "Reforestation" means the replacement of shade trees removed from public property and the planting of a tree as part of a municipal disease control program. For purposes of this paragraph, "public property" includes private property within five feet of the boulevard or street terrace in a city that enacted an ordinance on or before January 1, 1977, that prohibits or requires a permit for the planting of trees in the public right-of-way.

Subd. 2. [COMMISSIONER TO ADOPT RULES.] The commissioner may adopt rules relating to shade tree pest and disease control in any municipality. The rules must prescribe control measures to be used to prevent the spread of shade tree pests and diseases and must include the following:

(1) a definition of shade tree;

(2) qualifications for tree inspectors;

(3) methods of identifying diseased or infested shade trees;

(4) procedures for giving reasonable notice of inspection of private real property;

(5) measures for the removal of any shade tree which may contribute to the spread of shade tree pests or disease and for reforestation of pest or disease control areas;

(6) approved methods of treatment of shade trees;

(7) criteria for priority designation areas in an approved pest or disease control program; and

(8) any other matters determined necessary by the commissioner to prevent the spread of shade tree pests or disease and enforce this section.

Subd. 3. [DIAGNOSTIC LABORATORY.] The commissioner shall operate a diagnostic laboratory for culturing diseased or infested trees for positive identification of diseased or infested shade trees.

Subd. 4. [COOPERATION BY UNIVERSITY.] The University of Minnesota College of Natural Resources shall cooperate with the department in control of shade tree disease, pests, and disorders and management of shade tree populations. The College of Natural Resources shall cooperate with the department to conduct tree inspector certification and recertification workshops for certified tree inspectors. The College of Natural Resources shall also conduct research into means for identifying diseased shade trees, develop and evaluate control measures, and develop means for disposing of and using diseased shade trees.

Subd. 5. [EXPERIMENTAL PROGRAMS.] The commissioner may establish experimental programs for sanitation or treatment of shade tree diseases and for research into tree varieties most suitable for municipal reforestation. The research must include considerations of disease resistance, energy conservation, and other factors considered appropriate. The commissioner may make grants to municipalities or enter into contracts with municipalities, nurseries, colleges, universities, or state or federal agencies in connection with experimental shade tree programs including research to assist municipalities in establishing priority designation areas for shade tree disease control and energy conservation.

Subd. 6. [REMOVAL OF DISEASED OR INFESTED TREES.] After reasonable notice of inspection, an owner of real property containing a shade tree that is diseased, infested, or may contribute to the spread of pests or disease, must remove or treat the tree within the period of time and in the manner established by the commissioner.

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Trees that are not removed in compliance with the commissioner's rules must be declared a public nuisance and removed or treated by approved methods by the municipality, which may assess all or part of the expense, limited to the lowest contract rates available that include wage levels which meet Minnesota minimum wage standards, to the property and the expense becomes a lien on the property. A municipality may assess not more than 50 percent of the expense of treating with an approved method or removing diseased shade trees located on street terraces or boulevards to the abutting properties and the assessment becomes a lien on the property.

Subd. 7. [RULES; APPLICABILITY TO MUNICIPALITIES.] The rules of the commissioner apply in a municipality unless the municipality adopts an ordinance determined by the commissioner to be more stringent than the rules of the commissioner. The rules of the commissioner or the municipality apply to all state agencies, special purpose districts, and metropolitan commissions as defined in section 473.121, subdivision 5a, that own or control land adjacent to or within a shade tree disease control area.

Subd. 8. [GRANTS TO MUNICIPALITIES.] (a) The commissioner may, in the name of the state and within the limit of appropriations provided, make a grant to a municipality with an approved disease control program for the partial funding of municipal sanitation and reforestation programs to replace trees lost to disease or natural disaster. The commissioner may make a grant to a home rule charter or statutory city, a special purpose park and recreation board organized under a charter of a city of the first class, a nonprofit corporation serving a city of the first class, or a county having an approved disease control program for the acquisition or implementation of a wood use or disposal system.

(b) The commissioner shall adopt rules for the administration of grants under this subdivision. The rules must contain:

(1) procedures for grant applications;

(2) conditions and procedures for the administration of grants;

(3) criteria of eligibility for grants including, but not limited to, those specified in this subdivision; and

(4) other matters the commissioner may find necessary to the proper administration of the grant program.

(c) Grants for wood utilization and disposal systems made by the commissioner under this subdivision must not exceed 50 percent of the total cost of the system. Grants for sanitation and reforestation must be combined into one grant program. Grants to a municipality for sanitation must not exceed 50 percent of sanitation costs approved by the commissioner including any amount of sanitation costs paid by special assessments, ad valorem taxes, federal grants, or other funds. A municipality must not specially assess a property owner an amount greater than the amount of the tree's sanitation cost minus the amount of the tree's sanitation cost reimbursed by the commissioner. Grants to municipalities for reforestation must not exceed 50 percent of the wholesale cost of the trees planted under the reforestation program; provided that a reforestation grant to a county may include 90 percent of the cost of the first 50 trees planted on public property in a town not included in the definition of municipality in subdivision 1 and with less than 1,000 population when the town applies to the county. Reforestation grants to towns and home rule charter or statutory cities of less than 4,000 population with an approved disease control program may include 90 percent of the cost of the first 50 trees planted on public property. The governing body of a municipality that receives a reforestation grant under this section must appoint up to seven residents of the municipality or designate an existing municipal board or committee to serve as a reforestation advisory committee to advise the governing body of the municipality in the administration of the reforestation program. For the purpose of this subdivision, "cost" does not include the value of a gift or dedication of trees required by a municipal ordinance but does include documented "in-kind" services or voluntary work for municipalities with a population of less than 1,000 according to the most recent federal census.

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(d) Based upon estimates submitted by the municipality to the commissioner, which state the estimated costs of sanitation and reforestation in the succeeding quarter under an approved program, the commissioner shall direct quarterly advance payments to be made by the state to the municipality commencing April 1. The commissioner shall direct adjustment of any overestimate in a succeeding quarter. A municipality may elect to receive the proceeds of its sanitation and reforestation grants on a periodic cost reimbursement basis.

(e) A home rule charter or statutory city, county outside the metropolitan area, or any municipality, as defined in subdivision 1, may submit an application for a grant authorized by this subdivision concurrently with its request for approval of a disease control program.

(f) The commissioner shall not make grants for sanitation and reforestation or wood utilization and disposal systems in excess of 67 percent of the amounts appropriated for those purposes to the municipalities located within the metropolitan area, as defined in subdivision 1.

Subd. 9. [SUBSIDIES TO CERTAIN OWNERS.] A municipality may provide subsidies to nonprofit organizations, to owners of private residential property of five acres or less, to owners of property used for a homestead of more than five acres but less than 20 acres, and to nonprofit cemeteries for the approved treatment or removal of diseased shade trees.

Notwithstanding any law to the contrary, an owner of property on which shade trees are located may contract with a municipality to provide protection against the cost of approved treatment or removal of diseased shade trees or shade trees that will contribute to the spread of shade tree diseases. Under the contract, the municipality must pay for the removal or approved treatment under terms and conditions determined by its governing body.

Subd. 10. [TREE INSPECTOR.] (a) The governing body of each municipality may appoint a qualified tree inspector. In accordance with section 471.59, two or more municipalities may jointly appoint a tree inspector for the purpose of administering the rules or ordinances in their communities. If a municipality has not appointed a tree inspector by January 1 in any year, the commissioner may assign a qualified employee of the department of agriculture to perform the duties of the tree inspector. The expense of a tree inspector appointed by the commissioner must be paid by the municipality. If an employee of the department of agriculture performs those duties, the expense must be billed to the municipality and paid into the state treasury and credited to the nursery and phytosanitary account.

(b) Upon a determination by the commissioner that a candidate for the position of tree inspector is qualified, the commissioner shall issue a certificate of qualification to the tree inspector. The certificate is valid for one year. A person certified as a tree inspector by the commissioner is authorized upon prior notification to enter and inspect any public or private property that might harbor diseased or infested shade trees.

(c) The commissioner may, upon notice and hearing, decertify a tree inspector if it appears that the tree inspector has failed to act competently or in the public interest in the performance of duties. Notice must be provided and a hearing conducted according to the provisions of chapter 14 governing contested case proceedings. Nothing in this paragraph limits or otherwise affects the authority of a municipality to dismiss or suspend a tree inspector in its discretion.

Subd. 11. [FINANCING.] (a) A municipality may collect the amount assessed against the property under subdivision 1 as a special assessment and may issue obligations as provided in section 429.101, subdivision 1. The municipality may, at its option, make any assessment levied payable with interest in installments not to exceed five years from the date of the assessment.

(b) After a contract for the sanitation or approved treatment of trees on private property has been approved or the work begun, the municipality may issue obligations to defray the expense of the work financed by special assessments imposed upon private property. Section 429.091 applies to those obligations with the following modifications:

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(1) the obligations must be payable not more than five years from the date of issuance; and

(2) no election is required.

The certificates must not be included in the net debt of the issuing municipality.

Subd. 12. [DEPOSIT OF PROCEEDS IN SEPARATE FUND.] Proceeds of taxes, assessments, and interest collected under this section, bonds or certificates of indebtedness issued under subdivision 10, and grants received under subdivision 7 must be deposited in the municipal treasury in a separate fund and spent only for the purposes authorized by this section.

Subd. 13. [WOOD USE.] The departments of agriculture and natural resources, after consultation with the Minnesota shade tree advisory committee, may investigate, evaluate, and make recommendations to the legislature concerning the potential uses of wood from community trees removed due to disease or other disorders. These recommendations shall include maximum resource recovery through recycling, use as an alternative energy source, or use in construction or the manufacture of new products.

Subd. 14. [MUNICIPAL OPTION TO PARTICIPATE IN PROGRAM.] The term "municipality" shall include only those municipalities which have informed the commissioner of their intent to continue an approved disease control program. Any municipality desiring to participate in the grants-in-aid for the partial funding of municipal sanitation and reforestation programs must notify the commissioner in writing before the beginning of the calendar year in which it wants to participate and must have an approved disease control program during any year in which it receives grants-in-aid. Notwithstanding the provisions of any law to the contrary, no municipality shall be required to have an approved disease control program after December 31, 1981.

Subd. 15. [CERTAIN SPECIES NOT SUBJECT TO CHAPTER 18G.] Chapter 18G does not apply to exotic aquatic plants and wild animal species regulated under chapter 84D.

ARTICLE 5

NURSERY LAW

Section 1. [18H.02] [DEFINITIONS.]

Subdivision 1. [SCOPE.] The definitions in this section apply to this chapter.

Subd. 2. [AGENT.] "Agent" means a person who, on behalf of another person, receives on consignment, contracts for, or solicits for sale on commission, a plant product from a producer of the product or negotiates the consignment or purchase of a plant product on behalf of another person.

Subd. 3. [ANNUAL.] "Annual" means a plant growing in Minnesota with a life cycle of less than one year.

Subd. 4. [CERTIFICATE.] "Certificate" means a document authorized or prepared by a federal or state regulatory official that affirms, declares, or verifies that a plant, product, shipment, or other officially regulated item meets phytosanitary, nursery inspection, pest freedom, plant registration or certification, or other legal requirements.

Subd. 5. [CERTIFICATION.] "Certification" means a regulatory official's act of affirming, declaring, or verifying compliance with phytosanitary, nursery inspection, pest freedom, plant registration or certification, or other legal requirements.

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Subd. 6. [CERTIFIED NURSERY STOCK.] "Certified nursery stock" means nursery stock which has been officially inspected by the commissioner and found apparently free of quarantine and regulated nonquarantine pests or significant dangerous or potentially damaging plant pests.

Subd. 7. [COMMISSIONER.] "Commissioner" means the commissioner of agriculture or the commissioner's designated employee, representative, or agent.

Subd. 8. [CONSIGNEE.] "Consignee" means a person to whom a plant, nursery stock, horticultural product, or plant product is shipped for handling, planting, sale, resale, or any other purpose.

Subd. 9. [CONSIGNOR.] "Consignor" means a person who ships or delivers to a consignee a plant, nursery stock, horticultural product, or plant product for handling, planting, sale, resale, or any other purpose.

Subd. 10. [CONTAINER-GROWN.] "Container-grown" means a plant that was produced from a liner or cutting in a container.

Subd. 11. [DEPARTMENT.] "Department" means the Minnesota department of agriculture.

Subd. 12. [DISTRIBUTE.] "Distribute" means offer for sale, sell, barter, ship, deliver for shipment, receive and deliver, offer to deliver, receive on consignment, contract for, solicit for sale on commission, or negotiate the consignment or purchase in this state.

Subd. 13. [INFECTED.] "Infected" means a plant that is:

(1) contaminated with pathogenic microorganisms;

(2) being parasitized;

(3) a host or carrier of an infectious, transmissible, or contagious pest; or

Subd. 14. [INFESTED.] "Infested" means a plant has been overrun by plant pests, including weeds.

Subd. 15. [LANDSCAPER.] "Landscaper" includes, but is not limited to, a nursery stock dealer or person who procures certified stock for immediate sale, distribution, or transplantation and who does not grow or care for nursery stock.

Subd. 16. [MARK.] "Mark" means an official indicator affixed by the commissioner for purposes of identification or separation to, on, around, or near plants or plant material known or suspected to be infected with a plant pest. This includes, but is not limited to, paint, markers, tags, seals, stickers, tape, ribbons, signs, or placards.

Subd. 17. [NURSERY.] "Nursery" means a place where nursery stock is grown, propagated, collected, or distributed, including, but not limited to, private property or property owned, leased, or managed by any agency of the United States, Minnesota or its political subdivisions, or any other state or its political subdivisions where nursery stock is fumigated, treated, packed, or stored.

Subd. 18. [NURSERY CERTIFICATE.] "Nursery certificate" means a document issued by the commissioner recognizing that a person is eligible to sell, offer for sale, or distribute certified nursery stock at a particular location under a specified business name.

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Subd. 19. [NURSERY HOBBYIST.] "Nursery hobbyist" means a person who grows, offers for sale, or distributes less than $2,000 worth of certified nursery stock annually.

Subd. 20. [NURSERY STOCK.] "Nursery stock" means a plant intended for planting or propagation, including, but not limited to, trees, shrubs, vines, perennials, biennials, grafts, cuttings, and buds that may be sold for propagation, whether cultivated or wild, and all viable parts of these plants. Nursery stock does not include:

(1) field and forage crops;

(2) the seeds of grasses, cereal grains, vegetable crops, and flowers;

(3) vegetable plants, bulbs, or tubers;

(4) cut flowers, unless stems or other portions are intended for propagation;

(5) annuals; or

(6) Christmas trees.

Subd. 21. [NURSERY STOCK BROKER.] "Nursery stock broker" means a nursery stock dealer engaged in the business of selling or reselling nursery stock as a business transaction without taking ownership or handling the nursery stock.

Subd. 22. [NURSERY STOCK DEALER.] "Nursery stock dealer" means a person involved in the acquisition and further distribution of nursery stock; the utilization of nursery stock for landscaping or purchase of nursery stock for other persons; or the distribution of nursery stock with a mechanical digger, commonly known as a tree spade, or by any other means. A person who purchases more than half of the nursery stock offered for sale at a sales location during the current certificate year is considered a nursery stock dealer rather than a nursery stock grower for the purposes of determining a proper fee schedule. Nursery stock brokers, landscapers, and tree spade operators are considered nursery stock dealers for purposes of determining proper certification.

Subd. 23. [NURSERY STOCK GROWER.] "Nursery stock grower" includes, but is not limited to, a person who raises, grows, or propagates nursery stock, outdoors or indoors. A person who grows more than half of the nursery stock offered for sale at a sales location during the current certificate year is considered a nursery stock grower for the purpose of determining a proper fee schedule.

Subd. 24. [OWNER.] "Owner" includes, but is not limited to, the person with the legal right of possession, proprietorship of, or responsibility for the property or place where any of the articles regulated in this chapter are found, or the person who is in possession of, proprietorship of, or has responsibility for the regulated articles.

Subd. 25. [PERSON.] "Person" means an individual, firm, corporation, partnership, association, trust, joint stock company, unincorporated organization, the state, a state agency, or a political subdivision.

Subd. 26. [PLACE OF ORIGIN.] "Place of origin" means the county and state where nursery stock was most recently certified or grown for at least one full growing season.

Subd. 27. [PLANT.] "Plant" means a plant, plant product, plant part, or reproductive or propagative part of a plant, plant product, or plant part, including all growing media, packing material, or containers associated with the plants, plant parts, or plant products.

Subd. 28. [PLANT PEST.] "Plant pest" means a biotic agent that causes or may cause harm to plants.

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Subd. 29. [PUBLIC NUISANCE.] "Public nuisance" means:

(1) a plant, appliance, conveyance, or article that is infested with plant pests that may cause significant damage or harm; or

(2) premises where a plant pest is found.

Subd. 30. [QUARANTINE.] "Quarantine" means an enforced isolation or restriction of free movement of plants, plant material, animals, animal products, or any article or material in order to treat, control, or eradicate a plant pest.

Subd. 31. [REGULATED NONQUARANTINE PEST.] "Regulated nonquarantine pest" means a plant pest that has not been quarantined by state or federal agencies and whose presence in plants or articles may pose an unacceptable risk to nursery stock, other plants, the environment, or human activities.

Subd. 32. [SALES LOCATION.] "Sales location" means a fixed location from which nursery stock is displayed or distributed.

Subd. 33. [TREE SPADE.] "Tree spade" means a mechanical device or machinery capable of removing nursery stock, root system, and soil from the planting in one operation.

Subd. 34. [TREE SPADE OPERATOR.] "Tree spade operator" means a nursery stock dealer who uses a tree spade to dig nursery stock and sells, offers for sale, distributes, and transports certified nursery stock.

Sec. 2. [18H.03] [POWERS AND DUTIES OF COMMISSIONER.]

Subdivision 1. [EMPLOYEES.] The commissioner may employ entomologists, plant pathologists, and other employees necessary to administer this chapter.

Subd. 2. [ENTRY AND INSPECTION; FEES.] (a) The commissioner may enter and inspect a public or private place that might harbor plant pests and may require that the owner destroy or treat plant pests, plants, or other material.

(b) If the owner fails to properly comply with a directive of the commissioner within a given period of time, the commissioner may have any necessary work done at the owner's expense. If the owner does not reimburse the commissioner for the expense within a time specified by the commissioner, the expense is a charge upon the county as provided in subdivision 4.

(c) If a dangerous plant pest infestation or infection threatens plants of an area in the state, the commissioner may take any measures necessary to eliminate or alleviate the danger.

(d) The commissioner may collect fees required by this chapter.

(e) The commissioner may issue and enforce a written or printed "stop-sale" order to the owner or custodian of any nursery stock if fees required by the nursery are not paid. The commissioner may not be held liable for the deterioration of nursery stock during the period for which it is held pursuant to a stop-sale order.

Subd. 3. [QUARANTINES.] The commissioner may impose a quarantine to restrict or prohibit the transportation of nursery stock, plants, or other materials capable of carrying plant pests into or through any part of the state.

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Subd. 4. [COLLECTION OF CHARGES FOR WORK DONE FOR OWNER.] If the commissioner incurs an expense in conjunction with carrying out subdivision 2 and is not reimbursed by the owner of the land, the expense is a legal charge against the land. After the expense is incurred, the commissioner shall file verified and itemized statements of the cost of all services rendered with the county auditor of the county in which the land is located. The county auditor shall place a lien in favor of the commissioner against the land involved, certified by the county auditor, and collected according to section 429.101.

Subd. 5. [DELEGATION AUTHORITY.] The commissioner may, by written agreements, delegate specific inspection, enforcement, and other regulatory duties of this chapter to officials of other agencies. This delegation may only be made to a state agency, a political subdivision, or a political subdivision's agency that has signed a joint powers agreement with the commissioner as provided in section 471.59.

Subd. 6. [DISSEMINATION OF INFORMATION.] The commissioner may disseminate information among growers relative to treatment of nursery stock in both prevention and elimination of attack by plant pests and diseases.

Subd. 7. [OTHER DUTIES OF SERVICE.] The commissioner may carry out other duties or responsibilities that are of service to the industry or that may be necessary for the protection of the industry.

Sec. 3. [18H.04] [ADOPTION OF RULES.]

The commissioner may adopt rules to carry out the purposes of this chapter. The rules may include, but are not limited to, rules in regard to labeling and the maintenance of viability and vigor of nursery stock. Rules of the commissioner that are in effect on July 1, 2003, relating to plant protection, nursery inspection, or the Plant Pest Act remain in effect until they are superseded by new rules.

Sec. 4. [18H.05] [NURSERY CERTIFICATE REQUIREMENTS.]

(a) No person may offer for sale or distribute nursery stock as a nursery stock grower or dealer without first obtaining the appropriate nursery stock certificate from the commissioner. Certificates are issued solely for these purposes and may not be used for other purposes.

(b) A certificate issued by the commissioner expires on December 31 of the year it is issued.

(c) A person required to be certified by this section must apply for a certificate or for renewal on a form furnished by the commissioner which must contain:

(1) the name and address of the applicant, the number of locations to be operated by the applicant and their addresses, and the assumed business name of the applicant;

(2) if other than an individual, a statement whether a person is a partnership, corporation, or other organization; and

(3) the type of business to be operated and, if the applicant is an agent, the principals the applicant represents.

(d) No person may:

(1) falsely claim to be a certified dealer, grower, broker, or agent; or

(2) make willful false statements when applying for a certificate.

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(e) Each application for a certificate must be accompanied by the appropriate certificate fee under section 18H.07.

(f) Certificates issued by the commissioner must be prominently displayed to the public in the place of business where nursery stock is sold or distributed.

(g) The commissioner may refuse to issue a certificate for cause.

(h) Each grower or dealer is entitled to one sales location under the certificate of the grower or dealer. Each additional sales location maintained by the person requires the payment of the full certificate fee for each additional sales outlet.

(i) A grower who is also a dealer is certified only as a grower for that specific site.

(j) A certificate is personal to the applicant and may not be transferred. A new certificate is necessary if the business entity is changed or if the membership of a partnership is changed, whether or not the business name is changed.

(k) The certificate issued to a dealer or grower applies to the particular premises named in the certificate. However, if prior approval is obtained from the commissioner, the place of business may be moved to the other premises or location without an additional certificate fee.

(l) A collector of nursery stock from the wild is required to obtain a dealer's certificate from the commissioner and is subject to all the requirements that apply to the inspection of nursery stock. All collected nursery stock must be labeled as "collected from the wild."

Sec. 5. [18H.06] [EXEMPT NURSERY SALES.]

Subdivision 1. [NOT-FOR-PROFIT SALES.] An organization or individual may offer for sale certified nursery stock and be exempt from the requirement to obtain a nursery stock dealer certificate if sales are conducted by a nonprofit charitable, educational, or religious organization that:

(1) conducts sales or distributions of certified nursery stock on 14 or fewer days in a calendar year; and

(2) uses the proceeds from its certified nursery stock sales or distribution for charitable, educational, or religious purposes.

Subd. 2. [NURSERY HOBBYIST SALES.] (a) An organization or individual may offer nursery stock for sale and be exempt from the requirement to obtain a nursery stock dealer certificate if:

(1) the gross sales of all nursery stock in a calendar year do not exceed $2,000;

(2) all nursery stock sold or distributed by the hobbyist is intended for planting in Minnesota; and

(3) all nursery stock purchased or procured for resale or distribution was grown in Minnesota and has been certified by the commissioner.

(b) The commissioner may prescribe the conditions of the exempt nursery sales under this subdivision and may conduct routine inspections of the nursery stock offered for sale.

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Sec. 6. [18H.07] [FEE SCHEDULE.]

Subdivision 1. [ESTABLISHMENT OF FEES.] The commissioner shall establish fees sufficient to allow for the administration and enforcement of this chapter and rules adopted under this chapter, including the portion of general support costs and statewide indirect costs of the agency attributable to that function, with a reserve sufficient for up to six months. The commissioner shall review the fee schedule annually in consultation with the Minnesota nursery and landscape advisory committee. For the certificate year beginning January 1, 2004, the fees are as described in this section.

Subd. 2. [NURSERY STOCK GROWER CERTIFICATE.] (a) A nursery stock grower must pay an annual fee based on the area of all acreage on which nursery stock is grown for certification as follows:

(1) less than one-half acre, $150;

(2) from one-half acre to two acres, $200;

(3) over two acres up to five acres, $300;

(4) over five acres up to ten acres, $350;

(5) over ten acres up to 20 acres, $500;

(6) over 20 acres up to 40 acres, $650;

(7) over 40 acres up to 50 acres, $800;

(8) over 50 acres up to 200 acres, $1,100;

(9) over 200 acres up to 500 acres, $1,500; and

(10) over 500 acres, $1,500 plus $2 for each additional acre.

(b) In addition to the fees in paragraph (a), a penalty of ten percent of the fee due must be charged for each month that the fee is delinquent for any application for renewal not received by January 1 of the year following expiration of a certificate.

Subd. 3. [NURSERY STOCK DEALER CERTIFICATE.] (a) A nursery stock dealer must pay an annual fee based on the dealer's gross sales of nursery stock per location during the preceding certificate year. A certificate applicant operating for the first time must pay the minimum fee. The fees per sales location are:

(1) gross sales up to $20,000, $150;

(2) gross sales over $20,000 up to $100,000, $175;

(3) gross sales over $100,000 up to $250,000, $300;

(4) gross sales over $250,000 up to $500,000, $425;

(5) gross sales over $500,000 up to $1,000,000, $550;

(6) gross sales over $1,000,000 up to $2,000,000, $675; and

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(7) gross sales over $2,000,000, $800.

Subd. 4. [REINSPECTION; ADDITIONAL OR OPTIONAL INSPECTION FEES.] If a reinspection is required or an additional inspection is needed or requested a fee must be assessed based on mileage and inspection time as follows:

(1) mileage must be charged at the current United States Internal Revenue Service reimbursement rate; and

(2) inspection time must be charged at the rate of $50 per hour, including the driving time to and from the location in addition to the time spent conducting the inspection.

Sec. 7. [18H.08] [LOCAL SALES AND MISCELLANEOUS.]

Subdivision 1. [SERVICES AND FEES.] The commissioner may make small lot inspections or perform other necessary services for which another charge is not specified. For these services the commissioner shall set a fee plus expenses that will recover the cost of performing this service. The commissioner may set an additional acreage fee for inspection of seed production fields for exporters in order to meet domestic and foreign plant quarantine requirements.

Subd. 2. [VIRUS DISEASE-FREE CERTIFICATION.] The commissioner may provide special services such as virus disease-free certification and other similar programs. Participation by nursery stock growers is voluntary. Plants offered for sale as certified virus-free must be grown according to certain procedures in a manner defined by the commissioner for the purpose of eliminating viruses and other injurious disease or insect pests. The commissioner shall collect reasonable fees from participating nursery stock growers for services and materials that are necessary to conduct this type of work.

Sec. 8. [18H.09] [NURSERY INSPECTIONS REQUIRED.]

(a) All nursery stock growing sites in Minnesota must have had an inspection by the commissioner during the previous 12 months and found apparently free from quarantine and regulated nonquarantine pests as well as significantly dangerous or potentially damaging plant pests. All nursery stock originating from out of state and offered for sale in Minnesota must have been inspected by the appropriate state or federal agency during the previous 12 months and found free from quarantine and regulated nonquarantine pests as well as significantly dangerous or potentially damaging plant pests. A nursery stock certificate is valid from January 1 to December 31.

(b) Nursery stock must be accessible to the commissioner for inspection during regular business hours. Weeds or other growth that hinder a proper inspection are grounds to suspend or withhold a certificate or require a reinspection.

(c) Inspection reports issued to growers must contain a list of the plant pests found at the time of inspection. Withdrawal-from-distribution orders are considered part of the inspection reports. A withdrawal-from-distribution order must contain a list of plants withdrawn from distribution and the location of the plants.

(d) The commissioner may post signs to delineate sections withdrawn from distribution. These signs must remain in place until the commissioner removes them or grants written permission to the grower to remove the signs.

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(e) Inspection reports issued to dealers must outline the violations involved and corrective actions to be taken including withdrawal-from-distribution orders which would specify nursery stock that could not be distributed from a certain area.

(f) Optional inspections of plants may be conducted by the commissioner upon request by any persons desiring an inspection. A fee as provided in section 18H.07 must be charged for such an inspection.

Sec. 9. [18H.10] [STORAGE OF NURSERY STOCK.]

All nursery stock must be kept and displayed under conditions of temperature, light, and moisture sufficient to maintain the viability and vigor of the nursery stock.

Sec. 10. [18H.11] [NURSERY STOCK STANDARDS.]

The American Standard for Nursery Stock, ANSI Z60.1, published by the Nursery and Landscape Association, must be used by the commissioner in determining standards and grades of nursery stock when not in conflict with this chapter.

Sec. 11. [18H.12] [DAMAGED, DISEASED, INFESTED, OR MISREPRESENTED STOCK.]

(a) No person may knowingly offer to distribute, advertise, or display nursery stock that is infested or infected with quarantine or regulated nonquarantine pests or significant dangerous or potentially damaging plant pests, including noxious weeds or nursery stock that is in a dying condition, desiccated, frozen or damaged by freezing, or materially damaged in any way.

(b) No person may knowingly offer to distribute, advertise, or display nursery stock that may result in the capacity and tendency or effect of deceiving any purchaser or prospective purchaser as to the quantity, size, grade, kind, species name, age, variety, maturity, condition, vigor, hardiness, number of times transplanted, growth ability, growth characteristics, rate of growth, time required before flowering or fruiting, price, origin, place where grown, or any other material respect.

(c) Upon discovery or notification of damaged, diseased, infested, or misrepresented stock, the commissioner may place a stop-sale and distribution order on the material. The order makes it an illegal action to distribute, give away, destroy, alter, or tamper with the plants.

(d) The commissioner may conspicuously mark all plants, materials, and articles known or suspected to be infected or infested with quarantine or regulated nonquarantine pests or significant dangerous or potentially damaging plant pests. The commissioner shall notify the persons, owners, or the tenants in possession of the premises or area in question of the existence of the plant pests.

(e) If the commissioner determines that this chapter has been violated, the commissioner may order that the nuisance, infestation, infection, or plant pest be abated by whatever means necessary, including, but not limited to, destruction, confiscation, treatment, return shipment, or quarantine.

(f) The plant owner is liable for all costs associated with a stop order or a quarantine, treatment, or destruction of plants. The commissioner is not liable for any actual or incidental costs incurred by a person due to authorized actions of the commissioner. The commissioner must be reimbursed by the owner of plants for actual expenses incurred by the commissioner in carrying out a stop order.

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Sec. 12. [18H.13] [SHIPMENT OF NURSERY STOCK INTO MINNESOTA.]

Subdivision 1. [LABELING.] Plants, plant materials, or nursery stock distributed into Minnesota must be conspicuously labeled on the exterior with the name of the consignor, the state of origin, and the name of the consignee and must be accompanied by certification documents to satisfy all applicable state and federal quarantines. Proof of valid nursery certification must also accompany the shipment. It is the shared responsibility of both the consignee and consignor to examine all shipments for the presence of current and applicable nursery stock certifications for all plant material from all sources of stock in each shipment.

Subd. 2. [RECIPROCITY.] A person residing outside the state may distribute nursery stock in Minnesota if:

(1) the person is duly certified under the nursery laws of the state where the nursery stock originates and the laws of that state are essentially equivalent to the laws of Minnesota as determined by the commissioner; and

(2) the person complies with this chapter and the rules governing nursery stock distributed in Minnesota.

Subd. 3. [RECIPROCAL AGREEMENTS.] The commissioner may cooperate with and enter into reciprocal agreements with other states regarding licensing and movement of nursery stock. Reciprocal agreements with other states do not prevent the commissioner from prohibiting the distribution in Minnesota of any nursery stock that fails to meet minimum criteria for nursery stock of Minnesota certified growers, dealers, or both. An official directory of certified nurseries and related nursery industry businesses from other states is acceptable in lieu of individual nursery certificates.

Subd. 4. [FOREIGN NURSERY STOCK.] A person receiving a shipment of nursery stock from a foreign country that has not been inspected and released by the United States Department of Agriculture at the port of entry must notify the commissioner of the arrival of the shipment, its contents, and the name of the consignor. The person must hold the shipment unopened until inspected or released by the commissioner.

Subd. 5. [TRANSPORTATION COMPANIES.] A person who acts as the representative of a transportation company, private carrier, commercial shipper, common carrier, express parcel carrier, or other transportation entity, and receives, ships, or otherwise distributes a carload, box, container, or any package of plants, plant materials, or nursery stock, that does not have all required certificates attached as required or fails to immediately notify the commissioner is in violation of this chapter.

Sec. 13. [18H.14] [LABELING AND ADVERTISING OF NURSERY STOCK.]

(a) Plants, plant materials, or nursery stock must not be labeled or advertised with false or misleading information including, but not limited to, scientific name, variety, place of origin, hardiness zone as defined by the United States Commissioner of Agriculture, and growth habit.

(b) A person may not offer for distribution plants, plant materials, or nursery stock, represented by some specific or special form of notation, including, but not limited to, "free from" or "grown free of," unless the plants are produced under a specific program approved by the commissioner to address the specific plant properties addressed in the special notation claim.

Sec. 14. [18H.15] [VIOLATIONS.]

(a) A person who offers to distribute nursery stock that is uncertified, uninspected, or falsely labeled or advertised possesses an illegal regulated commodity that is considered infested or infected with harmful plant pests and subject to regulatory action and control. If the commissioner determines that the provisions of this section have been violated, the commissioner may order the destruction of all of the plants unless the person:

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(1) provides proper phytosanitary preclearance, phytosanitary certification, or nursery stock certification;

(2) agrees to have the plants, plant materials, or nursery stock returned to the consignor; and

(3) provides proper documentation, certification, or compliance to support advertising claims.

(b) The plant owner is liable for all costs associated with a withdrawal-from-distribution order or the quarantine, treatment, or destruction of plants. The commissioner is not liable for actual or incidental costs incurred by a person due to the commissioner's actions. The commissioner must be reimbursed by the owner of the plants for the actual expenses incurred in carrying out a withdrawal-from-distribution order or the quarantine, treatment, or destruction of any plants.

(1) misrepresent, falsify, or knowingly distribute, sell, advertise, or display damaged, mislabeled, misrepresented, infested, or infected nursery stock;

(2) fail to obtain a nursery certificate as required by the commissioner;

(3) fail to renew a nursery certificate, but continue business operations;

(4) fail to display a nursery certificate;

(5) misrepresent or falsify a nursery certificate;

(6) refuse to submit to a nursery inspection;

(7) fail to provide the cooperation necessary to conduct a successful nursery inspection;

(8) offer for sale uncertified plants, plant materials, or nursery stock;

(9) possess an illegal regulated commodity;

(10) violate or disobey a commissioner's order;

(11) violate a quarantine issued by the commissioner;

(12) fail to obtain phytosanitary certification for plant material or nursery stock brought into Minnesota;

(13) deface, mutilate, or destroy a nursery stock certificate, phytosanitary certificate, or phytosanitary preclearance certificate, or other commissioner mark, permit, or certificate;

(14) fail to notify the commissioner of an uncertified shipment of plants, plant materials, or nursery stock; or

(15) transport uncertified plants, plant materials, or nursery stock in Minnesota.

Sec. 15. [18H.16] [POLITICAL SUBDIVISION ORDINANCES.]

A political subdivision must not enact an ordinance or resolution that conflicts with this chapter.

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Sec. 16. [18H.17] [NURSERY AND PHYTOSANITARY ACCOUNT.]

A nursery and phytosanitary account is established in the state treasury. The fees and penalties collected under this chapter and interest attributable to money in the account must be deposited in the state treasury and credited to the nursery and phytosanitary account in the agricultural fund. Money in the account, including interest earned, is annually appropriated to the commissioner for the administration and enforcement for this chapter.

Sec. 17. [18H.18] [CONSERVATION OF CERTAIN WILDFLOWERS.]

Subdivision 1. [RESTRICTIONS ON COLLECTING.] No person shall distribute the state flower (Cypripedium reginae), or any species of lady slipper (Cypripedieae), any member of the orchid family, any gentian (Gentiana), arbutus (epigaea repens), lilies (Lilium), coneflowers (Echinacea), bloodroot (Sanguinaria Canadensis), mayapple (Podophyllum peltatutum), any species of trillium, or lotus (Nelumbo lutea), which have been collected in any manner from any public or private property without the written permission of the property owner and written authorization from the commissioner.

Subd. 2. [COLLECTION WITHOUT SALE.] Wildflower collection from public or private land for the purpose of transplanting the plants to a person's private property and not offering for immediate sale, requires the written permission from the property owner of the land on which the wildflowers are growing.

Subd. 3. [COLLECTION WITH INTENT TO SELL OR DISTRIBUTE WILDFLOWERS.] (a) The wildflowers listed in this section may be offered for immediate sale only if the plants are to be used for scientific or herbarium purposes.

(b) The wildflowers listed in this section must not be collected and sold commercially unless the plants are:

(1) growing naturally, collected, and cultivated on the collector's property; or

(2) collected through the process described in subdivision 2 and transplanted and cultivated on the collector's property.

(c) The collector must obtain a written permit from the commissioner before the plants may be offered for commercial sale.

ARTICLE 6

INSPECTION AND ENFORCEMENT

Section 1. [18J.01] [DEFINITIONS.]

(a) The definitions in sections 18G.02 and 18H.02 apply to this chapter.

(b) For purposes of this chapter, "associated rules" means rules adopted under this chapter, chapter 18G or 18H, or sections 21.80 to 21.92.

Sec. 2. [18J.02] [DUTIES OF COMMISSIONER.]

The commissioner shall administer and enforce this chapter, chapters 18G and 18H, sections 21.80 to 21.92, and associated rules.

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Sec. 3. [18J.03] [CIVIL LIABILITY.]

A person regulated by this chapter, chapter 18G or 18H, or sections 21.80 to 21.92, is civilly liable for any violation of one of those statutes or associated rules by the person's employee or agent.

Sec. 4. [18J.04] [INSPECTION, SAMPLING, ANALYSIS.]

Subdivision 1. [ACCESS AND ENTRY.] The commissioner, upon presentation of official department credentials, must be granted immediate access at reasonable times to sites where a person manufactures, distributes, uses, handles, disposes of, stores, or transports seeds, plants, or other living or nonliving products or other objects regulated under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules.

Subd. 2. [PURPOSE OF ENTRY.] (a) The commissioner may enter sites for:

(1) inspection of inventory and equipment for the manufacture, storage, handling, distribution, disposal, or any other process regulated under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules;

(2) sampling of sites, seeds, plants, products, or other living or nonliving objects that are manufactured, stored, distributed, handled, or disposed of at those sites and regulated under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules;

(3) inspection of records related to the manufacture, distribution, storage, handling, or disposal of seeds, plants, products, or other living or nonliving objects regulated under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules;

(4) investigating compliance with chapter 18G or 18H, sections 21.80 to 21.92, or associated rules; or

(5) other purposes necessary to implement chapter 18G or 18H, sections 21.80 to 21.92, or associated rules.

(b) The commissioner may enter any public or private premises during or after regular business hours without notice of inspection when a suspected violation of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules may threaten public health or the environment.

Subd. 3. [NOTICE OF INSPECTION SAMPLES AND ANALYSES.] (a) The commissioner shall provide the owner, operator, or agent in charge with a receipt describing any samples obtained. If requested, the commissioner shall split any samples obtained and provide them to the owner, operator, or agent in charge. If an analysis is made of the samples, a copy of the results of the analysis must be furnished to the owner, operator, or agent in charge within 30 days after an analysis has been performed. If an analysis is not performed, the commissioner must notify the owner, operator, or agent in charge within 30 days of the decision not to perform the analysis.

(b) The sampling and analysis must be done according to methods provided for under applicable provisions of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules. In cases not covered by those sections and methods or in cases where methods are available in which improved applicability has been demonstrated the commissioner may adopt appropriate methods from other sources.

Subd. 4. [INSPECTION REQUESTS BY OTHERS.] (a) A person who believes that a violation of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules has occurred may request an inspection by giving notice to the commissioner of the violation. The notice must be in writing, state with reasonable particularity the grounds for the notice, and be signed by the person making the request.

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(b) If after receiving a notice of violation the commissioner reasonably believes that a violation has occurred, the commissioner shall make a special inspection in accordance with the provisions of this section as soon as practicable, to determine if a violation has occurred.

(c) An inspection conducted pursuant to a notice under this subdivision may cover an entire site and is not limited to the portion of the site specified in the notice. If the commissioner determines that reasonable grounds to believe that a violation occurred do not exist, the commissioner must notify the person making the request in writing of the determination.

Subd. 5. [ORDER TO ENTER AFTER REFUSAL.] After a refusal, or an anticipated refusal based on a prior refusal, to allow entrance on a prior occasion by an owner, operator, or agent in charge to allow entry as specified in this section, the commissioner may apply for an order in the district court in the county where a site is located, that compels a person with authority to allow the commissioner to enter and inspect the site.

Subd. 6. [VIOLATOR LIABLE FOR INSPECTION COSTS.] (a) The cost of reinspection and reinvestigation may be assessed by the commissioner if the person subject to an order of the commissioner does not comply with the order in a reasonable time as provided in the order.

(b) The commissioner may enter an order for recovery of the inspection and investigation costs.

Subd. 7. [INVESTIGATION AUTHORITY.] (a) In making inspections under this chapter, the commissioner may administer oaths, certify official acts, issue subpoenas to take and cause to be taken depositions of witnesses, and compel the attendance of witnesses and production of papers, books, documents, records, and testimony.

(b) If a person fails to comply with a subpoena, or a witness refuses to produce evidence or to testify to a matter about which the person may be lawfully questioned, the district court shall, on application of the commissioner, compel obedience proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued by the court or a refusal to testify in court.

Sec. 5. [18J.05] [ENFORCEMENT.]

Subdivision 1. [ENFORCEMENT REQUIRED.] (a) A violation of chapter 18G or 18H, sections 21.80 to 21.92, or an associated rule is a violation of this chapter.

(b) Upon the request of the commissioner, county attorneys, sheriffs, and other officers having authority in the enforcement of the general criminal laws must take action to the extent of their authority necessary or proper for the enforcement of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules or valid orders, standards, stipulations, and agreements of the commissioner.

Subd. 2. [COMMISSIONER'S DISCRETION.] If minor violations of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules occur or the commissioner believes the public interest will be best served by a suitable notice of warning in writing, this section does not require the commissioner to:

(1) report the violation for prosecution;

(2) institute seizure proceedings; or

(3) issue a withdrawal from distribution, stop-sale, or other order.

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Subd. 3. [CIVIL ACTIONS.] Civil judicial enforcement actions may be brought by the attorney general in the name of the state on behalf of the commissioner. A county attorney may bring a civil judicial enforcement action upon the request of the commissioner and agreement by the attorney general.

Subd. 4. [INJUNCTION.] The commissioner may apply to a court with jurisdiction for a temporary or permanent injunction to prevent, restrain, or enjoin violations of this chapter.

Subd. 5. [CRIMINAL ACTIONS.] For a criminal action, the county attorney from the county where a criminal violation occurred is responsible for prosecuting a violation of this chapter. If the county attorney refuses to prosecute, the attorney general on request of the commissioner may prosecute.

Subd. 6. [AGENT FOR SERVICE OF PROCESS.] All persons licensed, permitted, registered, or certified under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules must appoint the commissioner as the agent upon whom all legal process may be served and service upon the commissioner is deemed to be service on the licensee, permittee, registrant, or certified person.

Sec. 6. [18J.06] [FALSE STATEMENT OR RECORD.]

A person must not knowingly make or offer a false statement, record, or other information as part of:

(1) an application for registration, license, certification, or permit under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules;

(2) records or reports required under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules; or

(3) an investigation of a violation of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules.

Sec. 7. [18J.07] [ADMINISTRATIVE ACTION.]

Subdivision 1. [ADMINISTRATIVE REMEDIES.] The commissioner may seek to remedy violations by a written warning, administrative meeting, cease and desist, stop-use, stop-sale, removal, correction order, or an order, seizure, stipulation, or agreement, if the commissioner determines that the remedy is in the public interest.

Subd. 2. [REVOCATION AND SUSPENSION.] The commissioner may, after written notice and hearing, revoke, suspend, or refuse to grant or renew a registration, permit, license, or certification if a person violates this chapter or has a history within the last three years of violation of this chapter.

Subd. 3. [CANCELLATION OF REGISTRATION, PERMIT, LICENSE, CERTIFICATION.] The commissioner may cancel or revoke a registration, permit, license, or certification provided for under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules or refuse to register, permit, license, or certify under provisions of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules if the registrant, permittee, licensee, or certified person has used fraudulent or deceptive practices in the evasion or attempted evasion of a provision of chapter 18G or 18H, sections 21.80 to 21.92, or associated rules.

Subd. 4. [SERVICE OF ORDER OR NOTICE.] (a) If a person is not available for service of an order, the commissioner may attach the order to the facility, site, seed or seed container, plant or other living or nonliving object regulated under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules and notify the owner, custodian, other responsible party, or registrant.

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(b) The seed, seed container, plant, or other living or nonliving object regulated under chapter 18G or 18H, sections 21.80 to 21.92, or associated rules may not be sold, used, tampered with, or removed until released under conditions specified by the commissioner, by an administrative law judge, or by a court.

Subd. 5. [UNSATISFIED JUDGMENTS.] (a) An applicant for a license, permit, registration, or certification under provisions of this chapter, chapter 18G or 18H, sections 21.80 to 21.92, or associated rules may not allow a final judgment against the applicant for damages arising from a violation of those statutes or rules to remain unsatisfied for a period of more than 30 days.

(b) Failure to satisfy, within 30 days, a final judgment resulting from a violation of this chapter results in automatic suspension of the license, permit, registration, or certification.

Sec. 8. [18J.08] [APPEALS OF COMMISSIONER'S ORDERS.]

Subdivision 1. [NOTICE OF APPEAL.] (a) After service of an order, a person has 45 days from receipt of the order to notify the commissioner in writing that the person intends to contest the order.

(b) If the person fails to notify the commissioner that the person intends to contest the order, the order is a final order of the commissioner and not subject to further judicial or administrative review.

Subd. 2. [ADMINISTRATIVE REVIEW.] If a person notifies the commissioner that the person intends to contest an order issued under this section, the state office of administrative hearings must conduct a hearing in accordance with the applicable provisions of chapter 14 for hearings in contested cases.

Subd. 3. [JUDICIAL REVIEW.] Judicial review of a final decision in a contested case is available as provided in chapter 14.

Sec. 9. [18J.09] [CREDITING OF PENALTIES, FEES, AND COSTS.]

Penalties, cost reimbursements, fees, and other money collected under this chapter must be deposited into the state treasury and credited to the appropriate nursery and phytosanitary or seed account.

Sec. 10. [18J.10] [CIVIL PENALTIES.]

Subdivision 1. [GENERAL PENALTY.] Except as provided in subdivision 2, a person who violates this chapter or an order, standard, stipulation, agreement, or schedule of compliance of the commissioner is subject to a civil penalty of up to $7,500 per day of violation as determined by the court.

Subd. 2. [DEFENSE TO CIVIL REMEDIES AND DAMAGES.] As a defense to a civil penalty or claim for damages under subdivision 1, the defendant may prove that the violation was caused solely by an act of God, an act of war, or an act or failure to act that constitutes sabotage or vandalism, or any combination of these defenses.

Subd. 3. [ACTIONS TO COMPEL PERFORMANCE.] In an action to compel performance of an order of the commissioner to enforce a provision of this chapter, the court may require a defendant adjudged responsible to perform the acts within the person's power that are reasonably necessary to accomplish the purposes of the order.

Subd. 4. [RECOVERY OF PENALTIES BY CIVIL ACTION.] The civil penalties and payments provided for in this chapter may be recovered by a civil action brought by the county attorney or the attorney general in the name of the state.

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Sec. 11. [18J.11] [CRIMINAL PENALTIES.]

Subdivision 1. [GENERAL VIOLATION.] Except as provided in subdivisions 2 and 3, a person is guilty of a misdemeanor if the person violates this chapter or an order, standard, stipulation, agreement, or schedule of compliance of the commissioner.

Subd. 2. [VIOLATION ENDANGERING HUMANS.] A person is guilty of a gross misdemeanor if the person violates this chapter or an order, standard, stipulation, agreement, or schedule of compliance of the commissioner, and the violation endangers humans.

Subd. 3. [VIOLATION WITH KNOWLEDGE.] A person is guilty of a gross misdemeanor if the person knowingly violates this chapter or an order, standard, stipulation, agreement, or schedule of compliance of the commissioner.

ARTICLE 7

CONFORMING CHANGES

Section 1. [REPEALER.]

(a) Minnesota Statutes 2002, sections 17.23; 18.012; 18.021; 18.022; 18.0223; 18.0225; 18.0227; 18.0228; 18.0229; 18.023; 18.024; 18.041; 18.051; 18.061; 18.071; 18.081; 18.091; 18.101; 18.111; 18.121; 18.131; 18.141; 18.151; 18.161; 18.331; 18.332; 18.333; 18.334; 18.335; 18.44; 18.45; 18.46; 18.47; 18.48; 18.49; 18.50; 18.51; 18.52; 18.525; 18.53; 18.54; 18.55; 18.56; 18.57; 18.59; 18.60; 18.61; 18.85, are repealed.

(b) Minnesota Rules, part 1510.0281, is repealed.

ARTICLE 8

SEED LAW

Section 1. Minnesota Statutes 2002, section 21.81, is amended by adding a subdivision to read:

Subd. 7a. [DORMANT.] "Dormant" means viable seed, exclusive of hard seed, that fail to germinate under the specified germination conditions for the kind of seed.

Sec. 2. Minnesota Statutes 2002, section 21.81, subdivision 8, is amended to read:

Subd. 8. [FLOWER SEEDS.] "Flower seeds" includes seeds of herbaceous plants grown for their blooms, ornamental foliage, or other ornamental parts and commonly known and sold under the name of flower seeds in this state. This does not include native or introduced wildflowers.

Sec. 3. Minnesota Statutes 2002, section 21.81, is amended by adding a subdivision to read:

Subd. 10a. [HARD SEED.] "Hard seed" means seeds that remain hard at the end of the prescribed test period because they have not absorbed water due to an impermeable seed coat.

Sec. 4. Minnesota Statutes 2002, section 21.81, is amended by adding a subdivision to read:

Subd. 11a. [INERT MATTER.] "Inert matter" means all matter that is not seed, including broken seeds, sterile florets, chaff, fungus bodies, and stones as determined by methods defined by rule.

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Sec. 5. Minnesota Statutes 2002, section 21.81, is amended by adding a subdivision to read:

Subd. 16a. [NATIVE WILDFLOWER.] "Native wildflower" means a kind, type, or variety of wildflower derived from wildflowers that are indigenous to Minnesota and wildflowers that are defined or designated as native species under chapter 84D.

Sec. 6. Minnesota Statutes 2002, section 21.81, is amended by adding a subdivision to read:

Subd. 17b. [ORIGIN.] "Origin," for an indigenous stand of trees, means the area on which the trees are growing and, for a nonindigenous stand, the place from which the seed or plants were originally introduced. "Origin" for agricultural and vegetable seed is the area where the seed was produced, and for native grasses and forbs, it is the area where the original seed was harvested.

Sec. 7. Minnesota Statutes 2002, section 21.81, is amended by adding a subdivision to read:

Subd. 17c. [OTHER CROP SEED.] "Other crop seed" means seed of plants grown as crops, other than the variety included in the pure seed, as determined by methods defined by rule.

Sec. 8. Minnesota Statutes 2002, section 21.81, is amended by adding a subdivision to read:

Subd. 17d. [PERSON.] "Person" means an individual, firm, corporation, partnership, association, trust, joint stock company, or unincorporated organization; the state, a state agency, or a political subdivision.

Sec. 9. Minnesota Statutes 2002, section 21.82, is amended to read:

21.82 [LABEL REQUIREMENTS; AGRICULTURAL, VEGETABLE, OR FLOWER, OR WILDFLOWER SEEDS.]

Subdivision 1. [FORM.] Each container of agricultural, vegetable, or flower, or wildflower seed which is offered for sale for sowing purposes ~~shall~~ must bear or have attached in a conspicuous place a plainly written or printed label or tag in the English language giving the information required by this section. This statement ~~shall~~ must not be modified or denied in the labeling or on another label attached to the container.

Subd. 2. [CONTENT.] For agricultural, vegetable, or flower, or wildflower seeds offered for sale as agricultural seed, except as otherwise provided in subdivisions 4, 5, and 6, ~~7 and 8,~~ the label ~~shall~~ must contain:

(a) The name of the kind or kind and variety for each ~~agricultural or vegetable~~ seed component in excess of five percent of the whole and the percentage by weight of each in order of its predominance. The commissioner shall by rule designate the kinds that are required to be labeled as to variety. If the variety of those kinds generally labeled as to variety is not stated and it is not required to be stated, the label shall show the name of the kind and the words: "Variety not stated." The heading "pure seed" must be indicated on the seed label in close association with other required label information.

(1) The percentage that is hybrid shall be at least 95 percent of the percentage of pure seed shown unless the percentage of pure seed which is hybrid seed is shown separately. If two or more kinds or varieties are present in excess of five percent and are named on the label, each that is hybrid shall be designated as hybrid on the label. Any one kind or kind and variety that has pure seed which is less than 95 percent but more than 75 percent hybrid seed as a result of incompletely controlled pollination in a cross shall be labeled to show the percentage of pure seed that is hybrid seed or a statement such as "contains from 75 percent to 95 percent hybrid seed." No one kind or variety of seed shall be labeled as hybrid if the pure seed contains less than 75 percent hybrid seed. The word hybrid shall be shown on the label in conjunction with the kind.

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(2) Blends shall be listed on the label using the term "blend" in conjunction with the kind.

(3) Mixtures shall be listed on the label using the term "mixture," "mix," or "mixed."

(b) Lot number or other lot identification.

(d) Percentage by weight of all weed seeds present ~~in agricultural, vegetable, or flower seed~~. This percentage may not exceed one percent. ~~If weed seeds are not present in vegetable or flower seeds,~~ The heading "weed ~~seeds~~ seed" ~~may be omitted from the label~~ must be indicated on the seed label in close association with other required label information.

(e) Name and rate of occurrence per pound of each kind of restricted noxious weed seeds present. They ~~shall~~ must be listed under the heading "noxious weed seeds." ~~If noxious weed seeds are not present in vegetable or flower seeds, the heading "noxious weed seeds" may be omitted from the label~~ in close association with other required label information.

(f) Percentage by weight of ~~agricultural, vegetable, or flower~~ seeds other than those kinds and varieties required to be named on the label. They ~~shall~~ must be listed under the heading "other crop." ~~If "other crop" seeds are not present in vegetable or flower seeds, the heading "other crop" may be omitted from the label~~ in close association with other required label information.

(g) Percentage by weight of inert matter. The heading "inert matter" must be indicated on the seed label in close association with other required label information.

(h) Net weight of contents, to appear on either the container or the label, except that in the case of vegetable or flower seed containers with contents of 200 seeds or less, a statement indicating the number of seeds in the container may be listed along with or in lieu of the net weight of contents.

(i) For each named ~~agricultural or vegetable~~ kind or variety of seed:

(1) percentage of germination, exclusive of hard or dormant seed or both;

(2) percentage of hard or dormant seed or both, if present; and

(3) the calendar month and year the percentages were determined by test or the statement "sell by (month and year)" which may not be more than 12 months from the date of test, exclusive of the month of test.

The headings for "germination" and "hard seed or dormant seed" percentages must be stated separately on the seed label. A separate percentage derived from combining these percentages may also be stated on the seed label, but the heading for this percentage must be "total germination and hard seed or dormant seed when applicable." They must not be stated as "total live seed," "total germination," or in any other unauthorized manner.

(j) Name and address of the person who labeled the seed or who sells the seed within this state, or a code number which has been registered with the commissioner.

Subd. 3. [TREATED SEED.] For all named agricultural, vegetable, or flower, or wildflower seeds which are treated, for which a separate label may be used, the label ~~shall~~ must contain:

~~(a)~~ (1) a word or statement to indicate that the seed has been treated;

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~~(b)~~ (2) the commonly accepted, coined, chemical, or abbreviated generic chemical name of the applied substance;

~~(c)~~ (3) the caution statement "Do not use for food, feed, or oil purposes" if the substance in the amount present with the seed is harmful to human or other vertebrate animals;

~~(d)~~ (4) in the case of mercurials or similarly toxic substances, a poison statement and symbol;

~~(e)~~ (5) a word or statement describing the process used when the treatment is not of pesticide origin; and

~~(f)~~ (6) the date beyond which the inoculant is considered ineffective if the seed is treated with an inoculant. It ~~shall~~ must be listed on the label as "inoculant: expires (month and year)" or wording that conveys the same meaning.

Subd. 4. [HYBRID SEED CORN.] For hybrid seed corn purposes a label ~~shall~~ must contain:

~~(a)~~ (1) a statement indicating the number of seeds in the container may be listed along with or in lieu of the net weight of contents; and

~~(b)~~ (2) for each variety of hybrid seed field corn, the day classification as determined by the originator or owner. The day classification ~~shall~~ must approximate the number of days of growing season necessary from emergence of the corn plant above ground to relative maturity and ~~shall~~ must conform to the day classification established by the director of the Minnesota agricultural experiment station for the appropriate zone.

Subd. 5. [GRASS SEED.] For grass seed and mixtures of grass seeds intended for lawn and turf purposes, the requirements in ~~clauses~~ paragraphs (a) ~~to (c)~~ and (b) must be met.

(a) The label ~~shall~~ must contain the percentage by weight of inert matter, up to ten percent by weight except for those kinds specified by rule. The percentage by weight of foreign material not common to grass seed must be listed as a separate item in close association with the inert matter percentage statement "sell by (month and year listed here)" which may be no more than 15 months from the date of test, exclusive of the month of test.

(b) ~~If the seed contains no "other crop" seed, the following statement may be used and may be flagged: "contains no other crop seed."~~

~~(c)~~ When grass seeds are sold outside their original containers, the labeling requirements are met if the seed is weighed from a properly labeled container in the presence of the purchaser.

Subd. 6. [COATED AGRICULTURAL SEEDS.] For coated agricultural seeds the label ~~shall~~ must contain:

~~(a)~~ (1) percentage by weight of pure seeds with coating material removed;

~~(b)~~ (2) percentage by weight of coating material shown as a separate item in close association with the percentage of inert matter; and

~~(c)~~ (3) percentage of germination determined on 400 pellets with or without seeds.

Subd. 7. [VEGETABLE SEEDS.] For vegetable seeds prepared for use in home gardens or household plantings the requirements in ~~clauses~~ paragraphs (a) to ~~(d)~~ (p) apply. ~~The origin may be omitted from the label.~~ Vegetable seeds packed for sale in commercial quantities to farmers, conservation groups, and other similar entities are considered agricultural seeds and must be labeled accordingly.

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(a) The label ~~shall~~ must contain the ~~following:~~ name of the kind or kind and variety for each seed component in excess of five percent of the whole and the percentage by weight of each in order of its predominance. If the variety of those kinds generally labeled as to variety is not stated and it is not required to be stated, the label must show the name of the kind and the words "variety not stated."

(b) The percentage that is hybrid must be at least 95 percent of the percentage of pure seed shown unless the percentage of pure seed which is hybrid seed is shown separately. If two or more kinds of varieties are present in excess of five percent and are named on the label, each that is hybrid must be designated as hybrid on the label. Any one kind or kind and variety that has pure seed that is less than 95 percent but more than 75 percent hybrid seed as a result of incompletely controlled pollination in a cross must be labeled to show the percentage of pure seed that is hybrid seed or a statement such as "contains from 75 percent to 95 percent hybrid seed." No one kind or variety of seed may be labeled as hybrid if the pure seed contains less than 75 percent hybrid seed. The word "hybrid" must be shown on the label in conjunction with the kind.

(d) Mixtures shall be listed on the label using the term "mixture," "mix," or "mixed."

(e) The label must show a lot number or other lot identification.

(f) The origin may be omitted from the label.

~~(1)~~ (g) The label must show the year for which the seed was packed for sale listed as "packed for (year)," or for seed with a percentage of germination that exceeds the standard last established by the commissioner, the percentage of germination and the calendar month and year that the percentages were determined by test~~; and~~, or the calendar month and year the germination test was completed and the statement "sell by (month and year listed here)," which may be no more than 12 months from the date of test, exclusive of the month of test.

~~(2)~~ (h) For vegetable seeds which germinate less than the standard last established by the commissioner, the label must show:

~~(i)~~ (1) a percentage of germination, exclusive of hard or dormant seed or both;

~~(ii)~~ (2) a percentage of hard or dormant seed or both, if present; and

~~(iii)~~ (3) the words "below standard" in not less than eight point type and the month and year the percentages were determined by test.

(i) The net weight of the contents must appear on either the container or the label, except that for containers with contents of 200 seeds or less a statement indicating the number of seeds in the container may be listed along with or in lieu of the net weight of contents.

~~(b)~~ (j) The heading for and percentage by weight of pure seed may be omitted from a label if the total is more than 90 percent.

(k) The heading for and percentage by weight of weed seed may be omitted from a label if they are not present in the seed.

(l) The heading "noxious weed seeds" may be omitted from a label if they are not present in the seed.

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(m) The heading for and percentage by weight of other crop seed may be omitted from a label if it is less than five percent.

~~(c)~~ (n) The heading for and percentage by weight of inert matter may be omitted from a label if it is less than ten percent.

(o) The label must contain the name and address of the person who labeled the seed or who sells the seed in this state or a code number that has been registered with the commissioner.

~~(d)~~ (p) The labeling requirements for vegetable seeds prepared for use in home gardens or household plantings when sold outside their original containers are met if the seed is weighed from a properly labeled container in the presence of the purchaser.

Subd. 8. [FLOWER SEEDS.] ~~(a) All flower seed labels shall contain:~~ For flower and wildflower seeds prepared for use in home gardens or household plantings, the requirements in paragraphs (a) to (l) apply. Flower and wildflower seeds packed for sale in commercial quantities to farmers, conservation groups, and other similar entities are considered agricultural seeds and must be labeled accordingly.

~~(1)~~ (a) The label must contain the name of the kind and variety or a statement of type and performance characteristics as prescribed by ~~rules;~~ rule.

(d) Mixtures must be listed on the label using the term "mixture," "mix," or "mixed."

(e) The label must contain the lot number or other lot identification.

(f) The origin may be omitted from the label.

~~(2)~~ (g) The label must contain the year for which the seed was packed for sale listed as "packed for (year)," or for seed with a percentage of germination that exceeds the standard last established by the commissioner, the percentage of germination and the calendar month and year that the ~~percentage was~~ percentages were determined by test~~; and~~, or the calendar month and year the germination test was completed and the statement "sell by (month and year listed here)," which may be no more than 12 months from the date of test, exclusive of the month of test.

~~(3)~~ (h) For flower seeds which germinate less than the standard last established by the commissioner, the label must show:

~~(i) the~~ (1) percentage of germination exclusive of hard or dormant seed or both; ~~and~~

~~(ii)~~ (2) percentage of hard or dormant seed or both, if present; and

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(3) the words "below standard" in not less than eight point type and the month and year this percentage was determined by test.

~~(b) The origin may be omitted from the label.~~

(i) The label must show the net weight of contents on either the container or the label, except that for containers with contents of 200 seeds or less a statement indicating the number of seeds in the container may be listed along with or in lieu of the net weight of contents.

~~(c)~~ (j) The heading for and percentage by weight of pure seed may be omitted from a label if the total is more than 90 percent.

(k) The heading for and percentage by weight of weed seed may be omitted from a label if they are not present in the seed.

(l) The heading "noxious weed seeds" may be omitted from a label if they are not present in the seed.

(m) The heading for and percentage by weight of other crop seed may be omitted from a label if it is less than five percent.

~~(d)~~ (n) The heading for and percentage by weight of inert matter may be omitted from a label if it is less than ten percent.

(o) The label must show the name and address of the person who labeled the seed or who sells the seed within this state, or a code number which has been registered with the commissioner.

Sec. 10. Minnesota Statutes 2002, section 21.83, subdivision 2, is amended to read:

Subd. 2. [LABEL CONTENT.] For all tree or shrub seed subject to this section the label shall contain:

(a) the common name of the species, and the subspecies if appropriate;

(b) the scientific name of the genus and species, and the subspecies if appropriate;

(d) for seed collected from a predominantly indigenous stand, the area of collection given by latitude and longitude, or geographic description, or political subdivision such as state or county;

(e) for seed collected from a predominantly nonindigenous stand, the identity of the area of collection and the origin of the stand or the words "origin not indigenous";

(f) the elevation or the upper and lower limits of elevation within which the seed was collected;

(g) the percentage of pure seed by weight;

(h) for those kinds of seed for which standard testing procedures are prescribed:

(1) the percentage of germination exclusive of hard or dormant seed;

(2) the percentage of hard or dormant seed, if present; and

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(3) the calendar month and year the percentages were determined by test; or

(4) in lieu of the requirements of clauses (1) to (3), the seed may be labeled "test is in progress, results will be supplied upon request";

(i) for those species for which standard germination testing procedures have not been prescribed by the commissioner, the calendar year in which the seed was collected; and

(j) the name and address of the person who labeled the seed or who sells the seed within this state.

Sec. 11. Minnesota Statutes 2002, section 21.84, is amended to read:

21.84 [RECORDS.]

Each person whose name appears on the label of agricultural, vegetable, flower, wildflower, tree, or shrub seeds subject to section 21.82 or 21.83 shall keep for three years complete records of each lot of agricultural, vegetable, flower, wildflower, tree, or shrub seed sold in this state and shall keep for one year a file sample of each lot of seed after disposition of the lot. ~~In addition, the grower shall have as a part of the record a "genuine grower's declaration" or a "tree seed collector's declaration."~~

Sec. 12. Minnesota Statutes 2002, section 21.85, subdivision 11, is amended to read:

Subd. 11. [RULES.] The commissioner may ~~make necessary rules for the proper enforcement of sections 21.80 to 21.92~~ adopt rules under this chapter. ~~Existing rules shall remain in effect unless permanent rules are made that supersede them.~~ A violation of the rules is a violation of this chapter.

Sec. 13. Minnesota Statutes 2002, section 21.85, subdivision 13, is amended to read:

Subd. 13. [SAMPLING EXPORT SEED.] The commissioner may sample agricultural, vegetable, flower, wildflower, tree, or shrub seeds which are destined for export to other countries, and may establish and collect suitable fees from the exporter for this service.

Sec. 14. Minnesota Statutes 2002, section 21.86, is amended to read:

21.86 [UNLAWFUL ACTS.]

Subdivision 1. [PROHIBITIONS.] A person may not advertise or sell any agricultural, vegetable, flower, or wildflower, tree ~~and~~, or shrub seed if:

(a) ~~except as provided in clauses (1) to (3),~~ a test to determine the percentage of germination required by sections 21.82 and 21.83 has not been completed within a ~~nine-month~~ 12-month period, exclusive of the calendar month in which the test was completed. or it is offered for sale beyond the sell by date exclusive of the calendar month in which the seed was to have been sold, except that:

(1) when advertised or offered for sale as agricultural seed, native grass and forb (wildflowers) seeds must have been tested for percentage of germination as required by section 21.82 within a ~~14-month~~ 15-month period, exclusive of the calendar month in which the test was completed.;

(2) it is unlawful to offer cool season lawn and turf grasses including Kentucky bluegrass, red fescue, chewings fescue, hard fescue, tall fescue, perennial ryegrass, intermediate ryegrass, annual ryegrass, colonial bent grass, creeping bent grass, and mixtures or blends of those grasses, for sale beyond the sell by date exclusive of the calendar month in which the seed was to have been sold;

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(3) this prohibition does not apply to tree, shrub, agricultural, flower, wildflower, or vegetable seeds packaged in hermetically sealed containers. Seeds packaged in hermetically sealed containers under the conditions defined by rule may be offered for sale for a period of 36 months after the last day of the month that the seeds were tested for germination prior to packaging.; and

~~(3)~~ (4) if seeds in hermetically sealed containers are offered for sale more than 36 months after the last day of the month in which they were tested prior to packaging, they must be retested within a nine-month period, exclusive of the calendar month in which the retest was completed;

(b) it is not labeled in accordance with sections 21.82 and 21.83 or has false or misleading labeling;

(d) it contains prohibited noxious weed seeds;

(e) it consists of or contains restricted noxious weed seeds in excess of 25 seeds per pound or in excess of the number declared on the label attached to the container of the seed or associated with the seed;

(f) it contains more than one percent by weight of all weed seeds;

(g) it contains less than the stated net weight of contents;

(h) it contains less than the stated number of seeds in the container;

(i) it contains any labeling, advertising, or other representation subject to sections 21.82 and 21.83 representing the seed to be certified unless:

(1) it has been determined by a seed certifying agency that the seed conformed to standards of purity and identity as to kind, species, subspecies, or variety, and also that tree seed was found to be of the origin and elevation claimed, in compliance with the rules pertaining to the seed; and

(2) the seed bears an official label issued for it by a seed certifying agency stating that the seed is of a certified class and a specified kind, species, subspecies, or variety;

(j) it is labeled with a variety name but not certified by an official seed certifying agency when it is a variety for which a United States certificate of plant variety protection has been granted under United States Code, title 7, sections 2481 to 2486, specifying sale by variety name only as a class of certified seed. Seed from a certified lot may be labeled as to variety name when used in a blend or mixture by or with approval of the owner of the variety; or

(k) the person whose name appears on the label does not have complete records including a file sample of each lot of agricultural, vegetable, flower, tree or shrub seed sold in this state as required in section 21.84.

Subd. 2. [MISCELLANEOUS VIOLATIONS.] No person may:

(a) detach, alter, deface, or destroy any label required in sections 21.82 and 21.83 or, alter or substitute seed in a manner that may defeat the purposes of sections 21.82 and 21.83, or alter or falsify any seed tests, laboratory reports, records, or other documents to create a misleading impression as to kind, variety, history, quality, or origin of the seed;

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(b) hinder or obstruct in any way any authorized person in the performance of duties under sections 21.80 to 21.92;

(c) fail to comply with a "stop sale" order or to move or otherwise handle or dispose of any lot of seed held under a stop sale order or attached tags, except with express permission of the enforcing officer for the purpose specified;

(d) use the word "type" in any labeling in connection with the name of any agricultural seed variety;

(e) use the word "trace" as a substitute for any statement which is required; or

(f) plant any agricultural seed which the person knows contains weed seeds or noxious weed seeds in excess of the limits for that seed.

Sec. 15. Minnesota Statutes 2002, section 21.88, is amended to read:

21.88 [PENALTIES NOT TO APPLY.]

Subdivision 1. [MISDEMEANOR; GROSS MISDEMEANOR.] A violation of sections 21.80 to 21.92 or a rule adopted under section 21.85 is a misdemeanor. Each additional day of violation is a separate offense. A subsequent violation by a person is a gross misdemeanor.

Subd. 2. [UNLAWFUL PRACTICE.] In addition to other penalties provided by law, a person who violates a provision of sections 21.80 to 21.92 or a rule adopted under section 21.85 has committed an unlawful practice under sections 325F.68 and 325F.69 and is subject to the remedies provided in sections 8.31 and 325F.70.

~~Subd. 3. [PENALTIES NOT TO APPLY.]~~ A person is not subject to ~~the~~ penalties ~~in subdivision 1 or 2~~ for having sold seeds which were incorrectly labeled or represented as to kind, species, subspecies, if appropriate, variety, type, origin and year, elevation or place of collection if required, if the seeds cannot be identified by examination unless the person has failed to obtain an invoice or genuine grower's or tree seed collector's declaration or other labeling information and to take other reasonable precautions to ensure the identity is as stated.

Sec. 16. Minnesota Statutes 2002, section 21.89, subdivision 2, is amended to read:

Subd. 2. [PERMITS; ISSUANCE AND REVOCATION.] The commissioner shall issue a permit to the initial labeler of agricultural, vegetable, or flower, and wildflower seeds which are sold for use in Minnesota and which conform to and are labeled under sections 21.80 to 21.92. The categories of permits are as follows:

(1) for initial labelers who sell 50,000 pounds or less of agricultural seed each calendar year, an annual permit issued for a fee established in section 21.891, subdivision 2, paragraph (b);

(2) for initial labelers who sell vegetable, flower, and wildflower seed packed for use in home gardens or household plantings, an annual permit issued for a fee established in section 21.891, subdivision 2, paragraph (c), based upon the gross sales from the previous year; and

(3) for initial labelers who sell more than 50,000 pounds of agricultural seed each calendar year, a permanent permit issued for a fee established in section 21.891, subdivision 2, paragraph (d).

In addition, the person shall furnish to the commissioner an itemized statement of all seeds sold in Minnesota for the periods established by the commissioner. This statement shall be delivered, along with the payment of the fee, based upon the amount and type of seed sold, to the commissioner no later than 30 days after the end of each reporting period. Any person holding a permit shall show as part of the analysis labels or invoices on all agricultural, vegetable, flower, wildflower, tree, or shrub seeds all information the commissioner requires. The commissioner may revoke any permit in the event of failure to comply with applicable laws and rules.

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Sec. 17. Minnesota Statutes 2002, section 21.89, subdivision 4, is amended to read:

Subd. 4. [EXEMPTIONS.] An initial labeler who sells for use in Minnesota agricultural, vegetable, or flower seeds must have a seed fee permit unless:

(a) The person labels and sells less than 50,000 pounds of agricultural seed in Minnesota each calendar year. If more than 50,000 pounds are labeled and sold in Minnesota by any person, the person must have a seed fee permit and pay fees on all seed sold. A person who labels and sells grass seeds and mixtures of grass seeds intended for lawn or turf purposes is not exempted from having a permit and paying seed fees on all seeds in this category sold in Minnesota; or

~~(b)~~ the agricultural, vegetable, or flower seeds are of the breeder or foundation seed classes of varieties developed by publicly financed research agencies intended for the purpose of increasing the quantity of seed available.

Sec. 18. [21.891] [MINNESOTA SEED LAW FEES.]

Subdivision 1. [SAMPLING EXPORT SEED.] In accordance with section 21.85, subdivision 13, the commissioner may, if requested, sample seed destined for export to other countries. The fee for sampling export seed is an hourly rate published annually by the commissioner and it must be an amount sufficient to recover the actual costs of the service provided.

Subd. 2. [SEED FEE PERMITS.] (a) An initial labeler who wishes to sell seed in Minnesota must comply with section 21.89, subdivisions 1 and 2, and the procedures in this subdivision. Each initial labeler who wishes to sell seed in Minnesota must apply to the commissioner to obtain a permit. The application must contain the name and address of the applicant, the application date, and the name and title of the applicant's contact person.

(b) The application for a seed permit covered by section 21.89, subdivision 2, clause (1), must be accompanied by an application fee of $50.

(c) The application for a seed permit covered by section 21.89, subdivision 2, clause (2), must be accompanied by an application fee based on the level of annual gross sales as follows:

(1) for gross sales of $0 to $25,000, the annual permit fee is $50;

(2) for gross sales of $25,001 to $50,000, the annual permit fee is $100;

(3) for gross sales of $50,001 to $100,000, the annual permit fee is $200;

(4) for gross sales of $100,001 to $250,000, the annual permit fee is $500;

(5) for gross sales of $250,001 to $500,000, the annual permit fee is $1,000; and

(6) for gross sales of $500,001 and above, the annual permit fee is $2,000.

(d) The application for a seed permit covered by section 21.89, subdivision 2, clause (3), must be accompanied by an application fee of $50. Initial labelers holding seed fee permits covered under this paragraph need not apply for a new permit or pay the application fee. Under this permit category, the fees for the following kinds of agricultural seed sold either in bulk or containers are:

(1) oats, wheat, and barley, 6.3 cents per hundredweight;

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(2) rye, field beans, soybeans, buckwheat, and flax, 8.4 cents per hundredweight;

(3) field corn, 29.4 cents per hundredweight;

(4) forage, lawn and turf grasses, and legumes, 49 cents per hundredweight;

(5) sunflower, $1.40 per hundredweight;

(6) sugar beet, $3.29 per hundredweight; and

(7) for any agricultural seed not listed in clauses (1) to (6), the fee for the crop most closely resembling it in normal planting rate applies.

(e) If, for reasons beyond the control and knowledge of the initial labeler, seed is shipped into Minnesota by a person other than the initial labeler, the responsibility for the seed fees are transferred to the shipper. An application for a transfer of this responsibility must be made to the commissioner. Upon approval by the commissioner of the transfer, the shipper is responsible for payment of the seed permit fees.

(f) Seed permit fees may be included in the cost of the seed either as a hidden cost or as a line item cost on each invoice for seed sold. To identify the fee on an invoice, the words "Minnesota seed permit fees" must be used.

(g) All seed fee permit holders must file semiannual reports with the commissioner, even if no seed was sold during the reporting period. Each semiannual report must be submitted within 30 days of the end of each reporting period. The reporting periods are October 1 to March 31 and April 1 to September 30 of each year or July 1 to December 31 and January 1 to June 30 of each year. Permit holders may change their reporting periods with the approval of the commissioner.

(h) The holder of a seed fee permit must pay fees on all seed for which the permit holder is the initial labeler and which are covered by sections 21.80 to 21.92 and sold during the reporting period.

(i) If a seed fee permit holder fails to submit a semiannual report and pay the seed fee within 30 days after the end of each reporting period, the commissioner shall assess a penalty of $100 or eight percent, calculated on an annual basis, of the fee due, whichever is greater, but no more than $500 for each late semiannual report. A $15 penalty must be charged when the semiannual report is late, even if no fee is due for the reporting period. Seed fee permits may be revoked for failure to comply with the applicable provisions of this paragraph or the Minnesota seed law.

Subd. 3. [HYBRID SEED CORN VARIETY REGISTRATION FEE.] Until August 1, 2006, and in accordance with section 21.90, subdivision 2, the fee for the registration of each hybrid seed corn variety or blend is $50, which must be paid at the time of registration. New hybrid seed corn variety registrations received after March 1 and renewed registrations of older varieties received after August 1 of each year have an annual registration fee of $75 per variety.

Subd. 3a. [DISCONTINUATION OF REGISTRATION AND TESTING.] The commissioner, in consultation with the Minnesota agricultural experiment station, shall develop a standardized testing method for labelers to determine relative maturity for the hybrid seed corn sold in this state. Standards may be developed without regard to chapter 14 and without complying with section 14.386. After development of the standardized method, the registration and testing of hybrids sold in this state will no longer be required.

Subd. 4. [BRAND NAME REGISTRATION FEE.] The fee is $25 for each variety registered for sale by brand name.

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Sec. 19. Minnesota Statutes 2002, section 21.90, subdivision 2, is amended to read:

Subd. 2. [FEES.] A record of each new hybrid seed field corn variety to be sold in Minnesota shall be registered with the commissioner by ~~February~~ March 1 of each year by the originator or owner. Records of all other hybrid seed field corn varieties sold in Minnesota shall be registered with the commissioner by August 1 of each year by the originator or owner. The commissioner shall establish the annual fee for registration for each variety. The record shall include the permanent designation of the hybrid as well as the day classification and zone of adaptation, as determined under subdivision 1, which the originator or owner declares to be the zone in which the variety is adapted. In addition, at the time of the first registration of a hybrid seed field corn variety, the originator or owner shall include a sworn statement that the declaration of the zone of adaptation was based on actual field trials in that zone and that the field trials substantiate the declaration as to the day and zone classifications to which the variety is adapted. The name or number used to designate a hybrid seed field corn variety in the registration is the only name of all seed corn covered by or sold under that registration.

Sec. 20. Minnesota Statutes 2002, section 21.90, subdivision 3, is amended to read:

Subd. 3. [~~TESTS OF VARIETIES~~ TRANSFER OF MONEY.] If the commissioner needs to verify that a hybrid seed field corn variety is adapted to the corn growing zone declared by the originator or owner, it must, when grown in several official comparative trials by the director of the Minnesota agricultural experiment station in the declared zone of adaptation, have an average kernel moisture at normal harvest time which does not differ from the average kernel moisture content of three or more selected standard varieties adapted for grain production in that particular growing zone by more than four percentage points. If a new variety when tested has more than six percentage points of moisture over the standard variety, it must have the relative maturity increased by five days in the correct zone of adaptation before it can be sold the second year. If it does not exceed the standard varieties by more than five percentage points of moisture the second year tested, it can be sold the third year with the same relative maturity. If upon being tested the third year the moisture percentage points are found to be over the four percentage points allowed, the variety then must have the relative maturity increased by five days in the correct zone. The varieties to be used as standard varieties for determining adaptability to a zone shall be selected for each zone by the director of the Minnesota agricultural experiment station with the advice and consent of the commissioner of agriculture. Should a person, firm, originator, or owner of a hybrid seed field corn variety wish to offer hybrid seed for sale or distribution in this state, the person, firm, originator, or owner not having distributed any products in Minnesota during the past ten years, or not having any record of testing by an agency acceptable to the commissioner, then after registration of the variety the commissioner is required to have the variety tested for one year by the director of the Minnesota agricultural experiment station before it may be distributed in Minnesota. Should any person, firm, originator, or owner of a seed field corn variety be guilty of two successive violations with respect to the declaration of relative maturity date and zone number, then the violator must commence a program of pretesting for varieties as determined by the commissioner. The list of varieties to be used as standards in each growing zone shall be sent by the commissioner not later than February 1 of each year to each seed firm registering hybrid varieties with the commissioner as of the previous April 1. To assist in defraying the expenses of the Minnesota agricultural experiment station in carrying out the provisions of this section, there shall be transferred annually from the seed inspection account to the agricultural experiment station a sum which shall at least equal 80 60 percent of the total revenue from all hybrid seed field corn variety registrations.

Sec. 21. Minnesota Statutes 2002, section 21.901, is amended to read:

21.901 [BRAND NAME REGISTRATION.]

The owner or originator of a variety of nonhybrid seed that is to be sold in this state must annually register the variety with the commissioner if the variety is to be sold only under a brand name. The registration must include the brand name and the variety of seed. The brand name for a blend or mixture need not be registered.

~~The fee is $15 for each variety registered for sale by brand name.~~

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Sec. 22. [REPEALER.]

(a) Minnesota Statutes 2002, section 21.85, subdivisions 1, 3, 4, 5, 6, 7, 8, and 9, are repealed.

(b) Minnesota Statutes, sections 21.891, subdivisions 3 and 3a, as added by this article; and 21.90, are repealed August 1, 2006.

ARTICLE 9

CENTRAL IRON RANGE SANITARY SEWER DISTRICT

Section 1. Laws 2002, chapter 382, article 2, section 1, subdivision 2, is amended to read:

Subd. 2. [DISTRICT.] "Central iron range sanitary sewer district" and "district" mean the area over which the central iron range sanitary sewer board has jurisdiction, which includes the area within the cities of Hibbing, Chisholm, ~~and~~ Buhl, and Kinney; the townships of ~~Kinney,~~ Balkan, and Great Scott; and the territory occupied by Ironworld. The district shall precisely describe the area over which it has jurisdiction by a metes and bounds description in the comprehensive plan adopted pursuant to section 5.

Sec. 2. Laws 2002, chapter 382, article 2, section 1, subdivision 5, is amended to read:

Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental units" or "governmental units" means the iron range resources and rehabilitation board, the cities of Hibbing, Chisholm, ~~and~~ Buhl, and Kinney, and the townships of ~~Kinney,~~ Balkan, and Great Scott.

Sec. 3. Laws 2002, chapter 382, article 2, section 2, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] A sanitary sewer district is established in the cities of Hibbing, Chisholm, ~~and~~ Buhl, and Kinney; the townships of ~~Kinney,~~ Balkan, and Great Scott; and the territory occupied by Ironworld, to be known as the central iron range sanitary sewer district. The sewer district is under the control and management of the central iron range sanitary sewer board. The board is established as a public corporation and political subdivision of the state with perpetual succession and all the rights, powers, privileges, immunities, and duties granted to or imposed upon a municipal corporation, as provided in sections 1 to 19.

Sec. 4. Laws 2002, chapter 382, article 2, section 2, subdivision 2, is amended to read:

Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 13 members selected as provided in this subdivision. Each of the town boards of the townships shall meet to appoint one resident to the sewer board. Four members must be selected by the governing body of the city of Hibbing. Three members must be selected by the governing body of the city of Chisholm. Two members must be selected by the governing body of the city of Buhl. One member must be selected by the governing body of the city of Kinney. One member must be selected by the iron range resources and rehabilitation board on behalf of Ironworld. Each member has one vote. The first terms are as follows: four for one year, four for two years, and five for three years, fixed by lot at the district's first meeting. Thereafter, all terms are for three years.

Sec. 5. Laws 2002, chapter 382, article 2, section 3, subdivision 4, is amended to read:

Subd. 4. [PUBLIC EMPLOYEES.] The executive director, if any, and other persons, if any, employed by the district are public employees and have all the rights and duties conferred on public employees under Minnesota Statutes, sections 179A.01 to 179A.25. The board may elect to have employees become members of either the public employees retirement association or the Minnesota state retirement system. The compensation and conditions of employment of the employees must be governed by rules applicable to state employees in the classified service and to the provisions of Minnesota Statutes, chapter 15A.

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Sec. 6. Laws 2002, chapter 382, article 2, section 4, subdivision 6, is amended to read:

Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may conduct research studies and programs, collect and analyze data, prepare reports, maps, charts, and tables, and conduct all necessary hearings and investigations in connection with the need for, benefits of, design, construction, and operation of the district disposal system.

Sec. 7. Laws 2002, chapter 382, article 2, section 4, subdivision 8, is amended to read:

Subd. 8. [PROPERTY RIGHTS, POWERS.] By vote of at least 75 percent of the members of the board, the board may acquire by purchase, lease, condemnation, gift, or grant, any real or personal property including positive and negative easements and water and air rights, and it may construct, enlarge, improve, replace, repair, maintain, and operate any interceptor, treatment works, or water facility determined to be necessary or convenient for the collection and disposal of sewage in the district. Any local governmental unit and the commissioners of transportation and natural resources are authorized to convey to or permit the use of any of the above-mentioned facilities owned or controlled by it, ~~by the board,~~ subject to the rights of the holders of any bonds issued with respect to those facilities, with or without compensation, without an election or approval by any other governmental unit or agency. All powers conferred by this subdivision may be exercised both within or without the district as may be necessary for the exercise by the board of its powers or the accomplishment of its purposes. By vote of at least 75 percent of the members of the board, the board may hold, lease, convey, or otherwise dispose of the above-mentioned property for its purposes upon the terms and in the manner it deems advisable. Unless otherwise provided, the right to acquire lands and property rights by condemnation may be exercised only in accordance with Minnesota Statutes, sections 117.011 to 117.232, and applies to any property or interest in the property owned by any local governmental unit. Property devoted to an actual public use at the time, or held to be devoted to such a use within a reasonable time, must not be so acquired unless a court of competent jurisdiction determines that the use proposed by the board is paramount to the existing use. Except in the case of property in actual public use, the board may take possession of any property on which condemnation proceedings have been commenced at any time after the issuance of a court order appointing commissioners for its condemnation.

Sec. 8. Laws 2002, chapter 382, article 2, section 4, subdivision 10, is amended to read:

Subd. 10. [DISPOSAL OF PROPERTY.] By vote of at least 75 percent of the members of the board, the board may sell, lease, or otherwise dispose of any real or personal property acquired by it which is no longer required for accomplishment of its purposes. The property may be sold in the manner provided by Minnesota Statutes, section 469.065, insofar as practical. The board may give notice of sale as it deems appropriate. When the board determines that any property or any part of the district disposal system acquired from a local governmental unit without compensation is no longer required but is required as a local facility by the governmental unit from which it was acquired, the board may by resolution transfer it to that governmental unit.

Sec. 9. Laws 2002, chapter 382, article 2, section 5, subdivision 1, is amended to read:

Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall adopt a comprehensive plan for the collection, treatment, and disposal of sewage in the district for a designated period the board deems proper and reasonable. The board shall prepare and adopt subsequent comprehensive plans for the collection, treatment, and disposal of sewage in the district for each succeeding designated period as the board deems proper and reasonable. All comprehensive plans of the district shall be subject to the planning and zoning authority of St. Louis county and in conformance with all planning and zoning ordinances of St. Louis county. The first plan, as modified by the board, and any subsequent plan shall take into account the preservation and best and most economic use of water and other natural resources in the area; the preservation, use, and potential for use of lands adjoining waters of the state to be used for the disposal of sewage; and the impact the disposal system will have on present and future land use in the area affected. ~~In no case shall the comprehensive plan provide for more than 325 connections to the disposal system. All connections must be charged a full assessment. Connections made after the initial assessment~~

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period ends must be charged an amount equal to the initial assessment plus an adjustment for inflation and plus any other charges determined to be reasonable and necessary by the board. Deferred assessments may be permitted, as provided for in Minnesota Statutes, chapter 429. The plans shall include the general location of needed interceptors and treatment works, a description of the area that is to be served by the various interceptors and treatment works, a long-range capital improvements program, and any other details as the board deems appropriate. In developing the plans, the board shall consult with persons designated for the purpose by governing bodies of any governmental unit within the district to represent the entities and shall consider the data, resources, and input offered to the board by the entities and any planning agency acting on behalf of one or more of the entities. Each plan, when adopted, must be followed in the district and may be revised as often as the board deems necessary.

Sec. 10. Laws 2002, chapter 382, article 2, section 5, is amended by adding a subdivision to read:

Subd. 3. [REMOVAL OF AREA.] After adopting the first plan, any of the local governmental units can elect not to be included within the central iron range sanitary sewer district by delivering a written resolution of the governing body of the governmental unit to the central iron range sanitary sewer district within 60 days of adoption of the first comprehensive plan. The area of the local governmental unit shall then be removed from the district.

Sec. 11. Laws 2002, chapter 382, article 2, section 6, is amended to read:

Sec. 6. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL ASSESSMENTS.]

The central iron range sanitary sewer board, in order to implement the powers granted under sections 1 to 19 to establish, maintain, and administer the central iron range sanitary sewer district upon a vote of at least 75 percent of the members of the board, may issue obligations and impose special assessments against benefited property within the limits of the district benefited by facilities constructed under sections 1 to 19 in the manner provided for local governments by Minnesota Statutes, chapter 429.

Sec. 12. Laws 2002, chapter 382, article 2, section 8, subdivision 3, is amended to read:

Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] By vote of at least 75 percent of the members of the board, the board may require any person or local governmental unit to provide for the discharge of any sewage, directly or indirectly, into the district disposal system, or to connect any disposal system or a part of it with the district disposal system wherever reasonable opportunity for connection is provided; may regulate the manner in which the connections are made; may require any person or local governmental unit discharging sewage into the disposal system to provide preliminary treatment for it; may prohibit the discharge into the district disposal system of any substance that it determines will or may be harmful to the system or any persons operating it; and may require any local governmental unit to discontinue the acquisition, betterment, or operation of any facility for the unit's disposal system wherever and so far as adequate service is or will be provided by the district disposal system.

Sec. 13. Laws 2002, chapter 382, article 2, section 9, is amended to read:

Sec. 9. [BUDGET.]

(a) The board shall prepare and adopt, on or before October 1, ~~2002~~ 2003, and each year thereafter, a budget showing for the following calendar year or other fiscal year determined by the board, sometimes referred to in sections 1 to 19 as the budget year, estimated receipts of money from all sources, including but not limited to payments by each local governmental unit, federal or state grants, taxes on property, and funds on hand at the beginning of the year, and estimated expenditures for:

(1) costs of operation, administration, and maintenance of the district disposal system;

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(2) cost of acquisition and betterment of the district disposal system; and

(3) debt service, including principal and interest, on general obligation bonds and certificates issued pursuant to section 13, and any money judgments entered by a court of competent jurisdiction.

(b) Expenditures within these general categories, and any other categories as the board may from time to time determine, must be itemized in detail as the board prescribes. The board and its officers, agents, and employees must not spend money for any purpose other than debt service without having set forth the expense in the budget nor in excess of the amount set forth in the budget for it. No obligation to make an expenditure of the above-mentioned type is enforceable except as the obligation of the person or persons incurring it. The board may amend the budget at any time by transferring from one purpose to another any sums except money for debt service and bond proceeds or by increasing expenditures in any amount by which actual cash receipts during the budget year exceed the total amounts designated in the original budget. The creation of any obligation under section 13, or the receipt of any federal or state grant is a sufficient budget designation of the proceeds for the purpose for which it is authorized, and of the tax or other revenue pledged to pay the obligation and interest on it, whether or not specifically included in any annual budget.

Sec. 14. Laws 2002, chapter 382, article 2, section 10, subdivision 2, is amended to read:

Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current costs must be allocated in the district on an equitable basis as the board may determine by resolution to be in the best interests of the district. The adoption or revision of any method of allocation used by the board must be by the affirmative vote of at least ~~two-thirds~~ 75 percent of the members of the board.

Sec. 15. Laws 2002, chapter 382, article 2, section 11, is amended to read:

Sec. 11. [TAX LEVIES.]

To accomplish any duty imposed on it the board may, upon a vote of at least 75 percent of the members of the board, in addition to the powers granted in sections 1 to 19 and in any other law or charter, exercise the powers granted any municipality by Minnesota Statutes, chapters 117, 412, 429, 475, sections 115.46, 444.075, and 471.59, with respect to the area in the district. By vote of at least 75 percent of the members of the board, the board may levy taxes upon all taxable property in the district for all or a part of the amount payable to the board, pursuant to section 10, to be assessed and extended as a tax upon that taxable property by the county auditor for the next calendar year, free from any limit of rate or amount imposed by law or charter. The tax must be collected and remitted in the same manner as other general taxes.

Sec. 16. Laws 2002, chapter 382, article 2, section 12, subdivision 5, is amended to read:

Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The board may, upon a vote of at least 75 percent of the members of the board, specially assess all or any part of the costs of acquisition and betterment as provided in this subdivision, of any project ordered under this section. The special assessments must be levied in accordance with Minnesota Statutes, sections 429.051 to 429.081, except as otherwise provided in this subdivision. No other provisions of Minnesota Statutes, chapter 429, apply. For purposes of levying the special assessments, the hearing on the project required in subdivision 1 serves as the hearing on the making of the original improvement provided for by Minnesota Statutes, section 429.051. The area assessed may be less than but may not exceed the area proposed to be assessed as stated in the notice of hearing on the project provided for in subdivision 2.

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Sec. 17. Laws 2002, chapter 382, article 2, section 13, subdivision 3, is amended to read:

Subd. 3. [GENERAL OBLIGATION BONDS.] The board may, upon a vote of at least 75 percent of the members of the board, by resolution authorize the issuance of general obligation bonds for the acquisition or betterment of any part of the district disposal system, including but without limitation the payment of interest during construction and for a reasonable period thereafter, or for the refunding of outstanding bonds, certificates of indebtedness, or judgments. The board shall pledge its full faith and credit and taxing power for the payment of the bonds and shall provide for the issuance and sale and for the security of the bonds in the manner provided in Minnesota Statutes, chapter 475. The board has the same powers and duties as a municipality issuing bonds under that law, except that no election is required and the debt limitations of Minnesota Statutes, chapter 475, do not apply to the bonds. The board may also pledge for the payment of the bonds and deduct from the amount of any tax levy required under Minnesota Statutes, section 475.61, subdivision 1, and any revenues receivable under any state and federal grants anticipated by the board and may covenant to refund the bonds if and when and to the extent that for any reason the revenues, together with other funds available and appropriated for that purpose, are not sufficient to pay all principal and interest due or about to become due, provided that the revenues have not been anticipated by the issuance of certificates under subdivision 1.

Sec. 18. Laws 2002, chapter 382, article 2, section 16, is amended to read:

Sec. 16. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES OUTSIDE THE JURISDICTION OF THE BOARD.]

(a) The board may, upon a vote of at least 75 percent of the members of the board, contract with the United States or any agency of the federal government, any state or its agency, or any municipal or public corporation, governmental subdivision or agency or political subdivision in any state, outside the jurisdiction of the board, for furnishing services to those entities, including but not limited to planning for and the acquisition, betterment, operation, administration, and maintenance of any or all interceptors, treatment works, and local water and sanitary sewer facilities. The board may include as one of the terms of the contract that the entity must pay to the board an amount agreed upon as a reasonable estimate of the proportionate share properly allocable to the entity of costs of acquisition, betterment, and debt service previously allocated in the district. When payments are made by entities to the board, they must be applied in reduction of the total amount of costs thereafter allocated in the district, on an equitable basis as the board deems to be in the best interests of the district, applying so far as practicable and appropriate the criteria set forth in section 10, subdivision 2. A municipality in the state of Minnesota may enter into a contract and perform all acts and things required as a condition or consideration therefor consistent with the purposes of sections 1 to 19, whether or not included among the powers otherwise granted to the municipality by law or charter.

(b) The board shall contract with a qualified entity to make necessary inspections of the district facilities, and to otherwise process or assist in processing any of the work of the district.

Sec. 19. [LOCAL APPROVAL.]

This article takes effect the day after each of the governing bodies of each of the local governmental units has complied with Minnesota Statutes, section 645.021, subdivision 3.

ARTICLE 10

APPROPRIATIONS

ECONOMIC DEVELOPMENT

Section 1. [ECONOMIC DEVELOPMENT; APPROPRIATIONS.]

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appropriations listed under them are available for the year ending June 30, 2004, or June 30, 2005, respectively. The term "first year" means the fiscal year ending June 30, 2004, and the term "second year" means the fiscal year ending June 30, 2005. The term "DR-1419" as used in this act refers to the area included in Presidential Declaration of Major Disaster DR-1419, whether included in the original declaration or added later by federal government action.

SUMMARY BY FUND

2004 2005 TOTAL

General $134,620,000 $128,527,000 $263,147,000

Petroleum Tank Cleanup 750,000 -0- 750,000

Environmental Fund 700,000 700,000 1,400,000

Workers' Compensation 21,415,000 20,890,000 42,305,000

Workforce Development Fund 9,200,000 9,120,000 18,320,000

Special Revenue 240,000 240,000 480,000

TOTAL $166,925,000 $159,477,000 $326,402,000

APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Sec. 2. TRADE AND ECONOMIC DEVELOPMENT

Subdivision 1. Total Appropriation $67,659,000 $64,429,000

Summary by Fund

General 57,219,000 54,819,000

Petroleum Tank Cleanup 750,000 -0-

Environmental Fund 700,000 700,000

Workforce Development

Fund 8,750,000 8,670,000

Special Revenue 240,000 240,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Business and Community Development 10,489,000 7,734,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Summary by Fund

General 9,039,000 7,034,000

Petroleum Tank Cleanup 750,000 -0-

Environmental Fund 700,000 700,000

Of this amount, $35,000 the first year from funds available for small business assistance is for a onetime grant to Blue Earth county for the Rural Advanced Business Facilitation program. The grant shall be provided on the condition that the funds be matched on a one-to-one basis from nonstate sources. This appropriation is available until spent.

$1,203,000 the first year and $1,203,000 the second year are for Minnesota investment fund grants.

$150,000 the first year and $150,000 the second year are for grants to the rural policy and development center at Minnesota State University, Mankato. The grant shall be used for research and policy analysis on emerging economic and social issues in rural Minnesota, to serve as a policy resource center for rural Minnesota communities, to encourage collaboration across higher education institutions to provide interdisciplinary team approaches to research and problem solving in rural communities, and to administer overall operations of the center.

The grant shall be provided upon the condition that each state-appropriated dollar be matched with a nonstate dollar. Acceptable matching funds are nonstate contributions that the center has received and have not been used to match previous state grants. The funds not spent the first year are available the second.

$1,000,000 the first year and $1,000,000 the second year are onetime appropriations to encourage and facilitate a joint partnership with the University of Minnesota and the Mayo Foundation for research in biotechnology and medical genomics. This appropriation must be matched dollar for dollar by nonstate funds. Funds shall be made available on a reimbursement basis after certification to the commissioner of finance of the nonstate match.

In the first year, the appropriation funds operating costs of the collaboration, including salaries, but does not include capital expenditures. The University of Minnesota and the Mayo Foundation shall submit a business plan to the governor, the chair

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

of the house jobs and economic development committee, and the chair of the senate jobs, housing, and community development committee no later than October 1, 2003. The plan should identify specific disciplines for development and collaboration, data access and confidentiality policies; timelines, and include a discussion of the expected economic benefits of the partnership to the state of Minnesota.

After adoption of the business plan by the governing bodies of the University of Minnesota and the Mayo Foundation, the appropriation in the second year shall be made available on a reimbursement basis to begin implementation of the business plan. A preliminary report on the budgeted expenditure of these funds should be submitted no later than October 1, 2004. A final report on the expenditure of these funds should be submitted no later than July 31, 2005.

$2,000,000 the first year is to the Minnesota investment fund to make grants to local units of government for locally administered grants or loan programs, including buyouts, for businesses directly and adversely affected by flooding in the area included in DR-1419. Criteria and requirements must be locally established with the approval of the commissioner. For the purposes of this appropriation, Minnesota Statutes, sections 116J.8731, subdivisions 3, 4, 5, and 7; 116J.993; 116J.994; and 116J.995, are waived. Businesses that receive grants or loans from this appropriation must set goals for jobs retained and wages paid within the area included in DR-1419.

This is a onetime appropriation and is available until expended.

Notwithstanding Minnesota Statutes, section 115C.08, subdivision 4, $750,000 the first year is for grants to local units of government in the area included in DR-1419 to safely rehabilitate buildings if a portion of the rehabilitation costs is attributable to petroleum contamination or to buy out property substantially damaged by a petroleum tank release. This appropriation is not subject to the limitations of Minnesota Statutes, section 115C.09, subdivision 3i.

This is a onetime appropriation from the petroleum tank release cleanup fund and is available until expended.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 3. Minnesota Trade Office 2,187,000 2,187,000

Of this amount, $127,000 the first year is for a onetime transfer to the department of agriculture for the purposes of agricultural trade promotion.

Subd. 4. Workforce Development 7,385,000 7,385,000

Summary by Fund

General 7,285,000 7,285,000

Workforce Development

Fund 100,000 100,000

(a) $6,785,000 the first year and $6,785,000 the second year are for the job skills partnership and pathways programs. If the appropriation for either year is insufficient, the appropriation for the other year is available. This appropriation does not cancel.

(b) $100,000 the first year and $100,000 the second year are from the workforce development fund for onetime grants to Lifetrack Resources for its immigrant/refugee collaborative programs, including those related to job-seeking skills and workplace orientation, intensive job development, functional work English, and on-site job coaching.

(c) $250,000 the first year and $250,000 the second year are from the general fund for grants under Minnesota Statutes, section 116J.8747 to Twin Cities Rise to provide training to hard-to-train individuals. The commissioner must present information reported by grant recipients to the legislative committees with jurisdiction over economic development by February 15 of 2004 and 2005.

(d) $100,000 the first year and $100,000 the second year are for a grant to the Metropolitan Economic Development Association for continuing minority business development programs in the metropolitan area.

(e) $150,000 the first year and $150,000 the second year are for grants to WomenVenture for women's business development programs.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 5. Office of Tourism

8,066,000 8,059,000

To develop maximum private sector involvement in tourism, $3,500,000 the first year and $3,500,000 the second year of the amounts appropriated for marketing activities are contingent on receipt of an equal contribution from nonstate sources that have been certified by the commissioner. Up to one-half of the match may be given in in-kind contributions.

In order to maximize marketing grant benefits, the commissioner must give priority for joint venture marketing grants to organizations with year-round sustained tourism activities. For programs and projects submitted, the commissioner must give priority to those that encompass two or more areas or that attract nonresident travelers to the state.

If an appropriation for either year for grants is not sufficient, the appropriation for the other year is available for it.

The commissioner may use grant dollars or the value of in-kind services to provide the state contribution for the partnership program.

Any unexpended money from general fund appropriations made under this subdivision does not cancel but must be placed in a special advertising account for use by the office of tourism to purchase additional media.

Of this amount, $50,000 the first year is for a onetime grant to the Mississippi River parkway commission to support the increased promotion of tourism along the Great River Road. This appropriation is available until June 30, 2005.

Of this amount, $175,000 the first year and $175,000 the second year are for the Minnesota film board. The appropriation in each year is available only upon receipt by the board of $1 in matching contributions of money or in-kind from nonstate sources for every $3 provided by this appropriation.

Subd. 6. Administrative Support

4,992,000 4,604,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 7. Workforce Services 8,274,000 8,254,000

Summary by Fund

General 6,389,000 6,389,000

Workforce Development

Fund 1,645,000 1,625,000

Special Revenue 240,000 240,000

(a) $990,000 the first year and $990,000 the second year are for displaced homemaker programs under Minnesota Statutes, section 268.96. Of this amount, $750,000 each year is from the workforce development fund and $240,000 each year is from the special revenue fund. The commissioner of economic security shall report to the legislature by February 15, 2005, on the outcome of grants under this paragraph.

(b) $875,000 the first year and $875,000 the second year are from the workforce development fund for the Opportunities Industrialization Center programs.

(c) $1,257,000 the first year and $1,257,000 the second year are for youth intervention programs under Minnesota Statutes, section 268.30. One percent of this appropriation is for a grant to the Minnesota Youth Intervention Programs Association (YIPA) to provide collaborative training and technical assistance to community-based grantees of the program. The base funding in the fiscal year 2006-2007 biennium is $1,446,000 each year.

(d) $4,154,000 the first year and $4,154,000 the second year are for the Minnesota youth program. If the appropriation in either year is insufficient, the appropriation for the other year is available. Of the money appropriated for the summer youth program for the first year, $400,000 is immediately available. Any remaining balance of the immediately available money is available in the first year.

(e) $754,000 the first year and $754,000 the second year are for the Youthbuild program under Minnesota Statutes, sections 268.361 to 268.3661. A Minnesota Youthbuild program funded under this section as authorized in Minnesota Statutes, sections 268.361 to 268.3661, qualifies as an approved training program under Minnesota Rules, part 5200.0930, subpart 1.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

(f) $20,000 the first year is a onetime appropriation from the workforce development fund for a transfer to the University of Minnesota Duluth for the purpose of funding the continuation of workforce surveys in northeast Minnesota. The chancellor of the University of Minnesota Duluth is requested to direct the School of Business and Economics to conduct a survey of households and businesses with the goal of providing information on regional workforce demand and supply. The survey results must be organized and distributed as follows:

(1) information organized in the form of a development information sheet to be used in industrial recruiting;

(2) a formal report, similar to those produced by the School of Business and Economics previous surveys;

(3) appropriate oral presentations to a reasonable number of interested parties;

(4) a Web page, usable by economic developers and prospective industries, summarizing the data; and

(5) continuous updates to be presented to the legislature.

An advisory committee may be appointed to review and aid in the survey effort.

Subd. 8. Rehabilitation Services 21,818,000 21,758,000

Summary by Fund

General 14,813,000 14,813,000

Workforce Development

Fund 7,005,000 6,945,000

$11,737,000 the first year and $11,737,000 the second year are for extended employment services for persons with severe disabilities or related conditions under Minnesota Statutes, section 268A.15. Of this amount, $6,920,000 the first year and $6,920,000 the second year are from the workforce development fund.

$1,325,000 the first year and $1,325,000 the second year are for grants to fund the eight centers for independent living. The base funding in the fiscal year 2006-2007 biennium is $1,690,000 each year. Money not expended in the first year is available in the second year.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

$150,000 the first year and $150,000 the second year are for grants to the Minnesota employment center for people who are deaf or hard-of-hearing. Money not expended in the first year is available in the second year.

$1,000,000 the first year and $1,000,000 the second year are for grants for programs that provide employment support services to persons with mental illness under Minnesota Statutes, sections 268A.13 and 268A.14. Up to $70,000 each year may be used for administrative and salary expenses.

$60,000 the first year is a onetime appropriation from the workforce development fund for education for employers to support HIV/AIDS general education and awareness and to improve capacities to manage HIV/AIDS in the workplace. The commissioner may contract with a community-based organization for education and legal and technical assistance for employers and their employees. This appropriation is available until June 30, 2005.

Subd. 9. State Services for the Blind 4,448,000 4,448,000

The base funding restored by this subdivision is intended to be used to provide services to blind persons, and that restored funding should be used to hire staff that provide direct services, including accessible materials from the communication center, to blind persons.

Sec. 3. MINNESOTA TECHNOLOGY, INC. 3,000,000 -0-

$3,000,000 the first year is for transfer from the general fund to the Minnesota Technology, Inc. fund. This is a onetime appropriation and no base funding is provided for any future year.

Sec. 4. HOUSING FINANCE AGENCY

Subdivision 1. Total Appropriation 35,385,000 34,885,000

The amounts that may be spent from this appropriation for certain programs are specified in the following subdivisions.

This appropriation is for transfer to the housing development fund for the programs specified. Except as otherwise indicated, this transfer is part of the agency's permanent budget base.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 2. Roseau Flood Assistance

$500,000 the first year is for a onetime grant for the city of Roseau to buy out flood damaged residential properties as provided below. The agency is authorized to provide assistance for the city of Roseau to acquire properties within the area included in DR-1419 that meet the following criteria:

(1) the owner agrees to voluntarily sell the property;

(2) the property to be acquired was the principal residence of the owner prior to the flooding described in DR-1419; and

(3) the cost of restoring the property to its predamage condition would equal or exceed 50 percent of the market value of the structure before the damage occurred, or the property has been declared uninhabitable by a state or local official in accordance with current codes or ordinances.

Property owners may receive assistance from the city in amounts up to the preflood fair market value of their property. The city must reduce the assistance provided to a property owner by any duplication of benefits from other sources. If the property owner is selling the structure which served as the principal residence but not the real property on which the structure is located, the assistance must be reduced by the preflood fair market value of the real property. If the city sells the real property it has acquired with the assistance provided under this subdivision, it will repay to the agency any funds obtained from the sale of the real property.

Subd. 3. Affordable Rental Investment Fund

$9,273,000 the first year and $9,273,000 the second year are for the affordable rental investment fund program under Minnesota Statutes, section 462A.21, subdivision 8b.

This appropriation is to finance the acquisition, rehabilitation, and debt restructuring of federally assisted rental property and for making equity take-out loans under Minnesota Statutes, section 462A.05, subdivision 39. The owner of the federally assisted rental property must agree to participate in the applicable federally assisted housing program and to extend any existing low-income affordability restrictions on the housing for the maximum term permitted. The owner must also enter into an agreement that gives local units of government, housing and redevelopment

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

authorities, and nonprofit housing organizations the right of first refusal if the rental property is offered for sale. Priority must be given among comparable properties to properties with the longest remaining term under an agreement for federal rental assistance. Priority must also be given among comparable rental housing developments to developments that are or will be owned by local government units, a housing and redevelopment authority, or a nonprofit housing organization.

Subd. 4. Family Homeless Prevention

$3,715,000 the first year and $3,715,000 the second year are for family homeless prevention and assistance programs under Minnesota Statutes, section 462A.204. Any balance in the first year does not cancel but is available in the second year.

Subd. 5. Challenge Program

$9,622,000 the first year and $9,622,000 the second year are for the economic development and housing challenge program under Minnesota Statutes, section 462A.33.

Subd. 6. Rental Assistance for Mentally Ill

$1,638,000 the first year and $1,638,000 the second year are for a rental housing assistance program for persons with a mental illness or families with an adult member with a mental illness under Minnesota Statutes, section 462A.2097. The agency must not reduce the funding under this subdivision.

Subd. 7. Home Ownership Education, Counseling, and Training

$770,000 the first year and $770,000 the second year are for the home ownership education, counseling, and training program under Minnesota Statutes, section 462A.209.

Subd. 8. Housing Trust Fund

$4,305,000 the first year and $4,305,000 the second year are for the housing trust fund to be deposited in the housing trust fund account created under Minnesota Statutes, section 462A.201, and used for the purposes provided in that section.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 9. Urban Indian Housing Program

$180,000 the first year and $180,000 the second year are for the urban Indian housing program under Minnesota Statutes, section 462A.07, subdivision 15.

Subd. 10. Tribal Indian Housing Program

$1,105,000 the first year and $1,105,000 the second year are for the tribal Indian housing program under Minnesota Statutes, section 462A.07, subdivision 14.

Subd. 11. Capacity Building Grants

$305,000 the first year and $305,000 the second year are for nonprofit capacity building grants under Minnesota Statutes, section 462A.21, subdivision 3b.

Subd. 12. Housing Rehabilitation and Accessibility

$3,972,000 the first year and $3,972,000 the second year are for the housing rehabilitation and accessibility program under Minnesota Statutes, section 462A.05, subdivisions 14a and 15a.

Subd. 13. Home Ownership Assistance Fund

The budget base for the home ownership assistance fund shall be $885,000 in fiscal year 2006 and $885,000 in fiscal year 2007.

Sec. 5. LABOR AND INDUSTRY

Subdivision 1. Total Appropriation 23,152,000 22,561,000

Summary by Fund

General 2,905,000 2,839,000

Workers'

Compensation 19,797,000 19,272,000

Workforce Development

Fund 450,000 450,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 2. Workers' Compensation

10,566,000 10,346,000

This appropriation is from the workers' compensation fund.

$125,000 the first year and $125,000 the second year are for grants to the Vinland Center for rehabilitation service.

Subd. 3. Workplace Services

6,994,000 6,928,000

Summary by Fund

General 2,905,000 2,839,000

Workers'

Compensation 3,639,000 3,639,000

Workforce Development

Fund 450,000 450,000

$345,000 the first year and $345,000 the second year are for boiler inspections under Minnesota Statutes, section 183.38, subdivision 1. This is a onetime appropriation and is not added to the department's base.

$350,000 each year is from the workforce development fund for the apprenticeship program under Minnesota Statutes, chapter 178.

$100,000 the first year and $100,000 the second year are for labor education and advancement program grants. This appropriation is from the workforce development fund.

Subd. 4. General Support

5,592,000 5,287,000

This appropriation is from the workers' compensation fund.

Sec. 6. BUREAU OF MEDIATION SERVICES

Subdivision 1. Total Appropriation 1,773,000 1,773,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

Subd. 2. Mediation Services

1,673,000 1,673,000

Subd. 3. Labor Management Cooperation Grants

100,000 100,000

$100,000 each year is for grants to area labor-management committees. Grants may be awarded for a 12-month period beginning July 1 of each year. Any unencumbered balance remaining at the end of the first year does not cancel but is available for the second year.

Sec. 7. WORKERS' COMPENSATION COURT OF APPEALS 1,618,000 1,618,000

This appropriation is from the workers' compensation fund.

Sec. 8. MINNESOTA HISTORICAL SOCIETY

Subdivision 1. Total Appropriation 22,407,000 22,280,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

The historical society shall make its best possible efforts, including the use of volunteers, to avoid closing historic sites or substantially limiting public access to them. Before closing any site, the society must consult with, and fully consider proposals from, interested community groups or individuals who are willing to provide financial or in-kind support for site operations.

Subd. 2. Education and Outreach 12,381,000 12,381,000

Subd. 3. Preservation and Access 9,772,000 9,772,000

Subd. 4. Fiscal Agent 254,000 127,000

(a) Minnesota International Center

43,000 42,000

(b) Minnesota Air National Guard Museum

16,000 -0-

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

67,000 -0-

(d) Farmamerica

128,000 85,000

Notwithstanding any other law, this appropriation may be used for operations.

(e) Balances Forward

Any unencumbered balance remaining in this subdivision the first year does not cancel but is available for the second year of the biennium.

Subd. 5. Fund Transfer

The society may reallocate funds appropriated in and between subdivisions 2 and 3 for any program purposes.

Sec. 9. BOARD OF THE ARTS

Subdivision 1. Total Appropriation 8,593,000 8,593,000

If the appropriation for either year is insufficient, the appropriation for the other year is available.

Subd. 2. Operations and Services 404,000 404,000

Subd. 3. Grants Programs 5,767,000 5,767,000

Subd. 4. Regional Arts Councils 2,422,000 2,422,000

Sec. 10. CHILDREN, FAMILIES AND LEARNING

Subdivision 1. Total Appropriation 3,338,000 3,338,000

Subd. 2. Emergency Services

350,000 350,000

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APPROPRIATIONS

Available for the Year

Ending June 30

2004 2005

For emergency services grants under Laws 1997, chapter 162, article 3, section 7. Any balance in the first year does not cancel but is available in the second year.

Subd. 3. Transitional Housing 2,988,000 2,988,000

$2,988,000 the first year and $2,988,000 the second year are for transitional housing programs according to Minnesota Statutes, section 119A.43. Any balance in the first year does not cancel but is available in the second year.

Sec. 11. [CANCELLATIONS AND TRANSFERS.]

(a) The unexpended balance as of July 1, 2003, from all appropriations to the capital access program established under Minnesota Statutes, section 116J.8761, is canceled to the general fund.

(b) The unexpended balance as of July 1, 2003, in the nongame wildlife tourism program in the department of trade and economic development is canceled to the general fund.

(c) Of the appropriation made to the department of trade and economic development in Laws 1997, chapter 200, article 1, section 2, subdivision 2, $361,000 is canceled to the general fund.

(d) Of the appropriation made to the public facilities authority in Laws 2000, chapter 492, article 1, section 22, subdivision 3, $700,000 is canceled to the general fund.

(e) After July 1, 2003, but before September 30, 2003, the commissioner of finance shall transfer $800,000 of the unexpended balance in the tourism loan account established under Minnesota Statutes, section 116J.617, subdivision 5, to the general fund.

(f) Any repayments of principal and any interest earned on money previously in the tourism loan account shall be deposited in the general fund.

(g) On or before June 30 of each fiscal year, the commissioner of finance shall transfer $550,000 from the workforce development fund to the general fund.

Sec. 12. Laws 2002, chapter 220, article 13, section 9, subdivision 2, as amended by Laws 2002, chapter 374, article 8, section 6, is amended to read:

Subd. 2. [SPECIAL COMPENSATION FUND.] After June 1, 2003, but no later than June 30, 2003, the commissioner of finance shall transfer ~~$250,000,000~~ $265,000,000 in assets of the excess surplus account of the special compensation fund created under Minnesota Statutes, section 176.129, to the general fund.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

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Sec. 13. Laws 2002, chapter 331, section 19, is amended to read:

Sec. 19. [EFFECTIVE DATE.]

Sections 16 and 17 are effective July 1, ~~2003~~ 2004.

Sec. 14. [FEDERAL FUND APPROVAL.]

Requests to spend federal grants and aids as shown in the biennial budget document and its supplements for the departments of trade and economic development, economic security, and labor and industry; the Minnesota housing finance agency; and Minnesota Technology, Inc., for which further review was requested under Minnesota Statutes, section 3.3005, subdivision 2a, in January or February 2003, are approved and the amounts shown in the budget documents are appropriated for the purpose indicated in the request.

Sec. 15. [REPEALER.]

Minnesota Statutes 2002, section 138.91, is repealed.

ARTICLE 11

DEPARTMENT OF LABOR AND INDUSTRY

POLICY PROVISIONS

Section 1. Minnesota Statutes 2002, section 175.16, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHED.] The department of labor and industry shall consist of the following divisions: division of workers' compensation, division of boiler inspection, division of occupational safety and health, division of statistics, division of steamfitting standards, ~~division of voluntary apprenticeship,~~ division of labor standards and apprenticeship, and such other divisions as the commissioner of the department of labor and industry may deem necessary and establish. Each division of the department and persons in charge thereof shall be subject to the supervision of the commissioner of the department of labor and industry and, in addition to such duties as are or may be imposed on them by statute, shall perform such other duties as may be assigned to them by ~~said~~ the commissioner. Notwithstanding any other law to the contrary, the commissioner is the administrator and supervisor of all of the department's dispute resolution functions and personnel and may delegate authority to compensation judges and others to make determinations under sections 176.106, 176.238, and 176.239 and to approve settlement of claims under section 176.521.

Sec. 2. Minnesota Statutes 2002, section 177.26, subdivision 1, is amended to read:

Subdivision 1. [CREATION.] The division of labor standards and apprenticeship in the department of labor and industry is supervised and controlled by the commissioner of labor and industry.

Sec. 3. Minnesota Statutes 2002, section 177.26, subdivision 2, is amended to read:

Subd. 2. [POWERS AND DUTIES.] The powers, duties, and functions given to the department's division of women and children by this chapter, and other applicable laws relating to wages, hours, and working conditions, are transferred to the division of labor standards. The division of labor standards and apprenticeship shall administer ~~sections 177.21 to 177.35 and chapter~~ chapters 177, 178, 181, 181A, and 184. ~~The division shall perform duties under sections 181.9435 and 181.9436.~~

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Sec. 4. Minnesota Statutes 2002, section 178.01, is amended to read:

178.01 [PURPOSES.]

The purposes of this chapter are: to open to young people regardless of race, sex, creed, color or national origin, the opportunity to obtain training that will equip them for profitable employment and citizenship; to establish as a means to this end, a program of voluntary apprenticeship under approved apprentice agreements providing facilities for their training and guidance in the arts, skills, and crafts of industry and trade, with concurrent, supplementary instruction in related subjects; to promote employment opportunities under conditions providing adequate training and reasonable earnings; to relate the supply of skilled workers to employment demands; to establish standards for apprentice training; to establish an apprenticeship advisory council and apprenticeship committees to assist in effectuating the purposes of this chapter; to provide for a division of ~~voluntary~~ labor standards and apprenticeship within the department of labor and industry; to provide for reports to the legislature regarding the status of apprentice training in the state; to establish a procedure for the determination of apprentice agreement controversies; and to accomplish related ends.

Sec. 5. Minnesota Statutes 2002, section 178.03, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT OF DIVISION.] There is ~~hereby~~ established a division of ~~voluntary~~ labor standards and apprenticeship in the department of labor and industry. This division shall be administered by a director, and be under the supervision of the commissioner of labor and industry, hereinafter referred to as the commissioner.

Sec. 6. Minnesota Statutes 2002, section 178.03, subdivision 2, is amended to read:

Subd. 2. [DIRECTOR OF ~~VOLUNTARY~~ LABOR STANDARDS AND APPRENTICESHIP.] The commissioner shall appoint a director of the division of ~~voluntary~~ labor standards and apprenticeship, hereinafter referred to as the director, and may appoint and employ such clerical, technical, and professional help as is necessary to accomplish the purposes of this chapter. The director and division staff shall be appointed and shall serve in the classified service pursuant to civil service law and rules.

Sec. 7. [178.12] [REGISTRATION FEE.]

The apprenticeship registration account is established in the special revenue fund of the state treasury. An annual registration fee will be charged to each sponsor for each apprentice registered in the program. The fee is established at $30 per apprentice. Subsequent adjustments to this fee will be made pursuant to Minnesota Statutes, sections 16A.1283 and 16A.1285, subdivision 2. The fees collected and any interest earned are appropriated to the commissioner for purposes of this chapter.

Sec. 8. Minnesota Statutes 2002, section 181.9435, subdivision 1, is amended to read:

Subdivision 1. [INVESTIGATION.] The division of labor standards and apprenticeship shall receive complaints of employees against employers relating to sections 181.940 to 181.9436 and investigate informally whether an employer may be in violation of sections 181.940 to 181.9436. The division shall attempt to resolve employee complaints by informing employees and employers of the provisions of the law and directing employers to comply with the law.

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Sec. 9. Minnesota Statutes 2002, section 181.9436, is amended to read:

181.9436 [POSTING OF LAW.]

The division of labor standards and apprenticeship shall develop, with the assistance of interested business and community organizations, an educational poster stating employees' rights under sections 181.940 to 181.9436. The department shall make the poster available, upon request, to employers for posting on the employer's premises.

Sec. 10. Minnesota Statutes 2002, section 182.667, subdivision 2, is amended to read:

Subd. 2. Any employer who willfully or repeatedly violates the requirements of section 182.653, any safety and health standard promulgated under this chapter, any existing rule promulgated by the department, may be punished by a fine of not more than ~~$20,000~~ $70,000 or by imprisonment for not more than six months or by both; except, that if the conviction is for a violation committed after a first conviction of such person, punishment shall be a fine of not more than ~~$35,000~~ $100,000 or by imprisonment for not more than one year, or by both.

Sec. 11. [BOILER INSPECTION AND LICENSE FEE SURCHARGE.]

The commissioner of labor and industry shall impose a surcharge of $5 on each of the fees authorized under Minnesota Statutes, section 183.545, subdivisions 2, 3, and 4, for the period starting July 1, 2003, and ending June 30, 2005.

Sec. 12. [WORKERS' COMPENSATION WORKING GROUP.]

The commissioner of labor and industry shall convene a working group to study issues related to the medical cost drivers of the workers' compensation program. The group shall report its findings, along with any recommendations to the workers' compensation advisory council before January 9, 2004. The purpose of the study is to examine the medical cost drivers of the workers' compensation program in order to ensure costs are not excessive, while at the same time ensuring that injured workers have adequate access to health care providers under the workers' compensation system. The working group shall consist of an equal number of provider, employer, and labor representatives. The study shall examine:

(1) the growth in medical costs in the workers' compensation program compared to the growth in overall medical costs; and

(2) the costs that are unique to providing medical services to injured workers under the workers' compensation program.

The commissioner shall convene the study group no later than September 1, 2003. By February 15, 2004, the workers' compensation advisory council must report to the chairs of the legislative committees with jurisdiction over workers' compensation regarding the recommendations of the working group, including a description of action taken on the recommendations.

ARTICLE 12

DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT

POLICY PROVISIONS - PART ONE

Section 1. Minnesota Statutes 2002, section 248.10, is amended to read:

248.10 [REHABILITATION COUNCIL FOR THE BLIND.]

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(a) The commissioner shall establish a rehabilitation council for the blind consistent with the federal Rehabilitation Act of 1973, Public Law Number 93-112, as amended. Council members shall be compensated as provided in section 15.059, subdivision 3. The council shall advise the commissioner about programs of the division of state services for the blind.

(b) Notwithstanding section 13D.01, the rehabilitation council for the blind may conduct a meeting of its members by telephone or other electronic means so long as the following conditions are met:

(1) all members of the council participating in the meeting, wherever their physical location, can hear one another and can hear all discussion and testimony;

(2) members of the public present at the regular meeting location of the council can hear all discussion and testimony and all votes of members of the council;

(3) at least one member of the council is physically present at the regular meeting location; and

(4) all votes are conducted by roll call, so each member's vote on each issue can be identified and recorded.

(c) Each member of the council participating in a meeting by telephone or other electronic means is considered present at the meeting for purposes of determining a quorum and participating in all proceedings.

(d) If telephone or another electronic means is used to conduct a meeting, the council to the extent practical, shall allow a person to monitor the meeting electronically from a remote location. The council may require the person making such a connection to pay for documented marginal costs that the council incurs as a result of the additional connection.

(e) If telephone or another electronic means is used to conduct a regular, special, or emergency meeting, the council shall provide notice of the regular meeting location, of the fact that some members may participate by electronic means, and of the provisions of paragraph (d). The timing and method of providing notice is governed by section 13D.04.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2002, section 268A.02, is amended by adding a subdivision to read:

Subd. 3. [ELECTRONIC OR TELEPHONIC MEETINGS.] (a) Notwithstanding section 13D.01, the state rehabilitation council and the statewide independent living council may conduct a meeting of its members by telephone or other electronic means so long as the following conditions are met:

(1) all members of the council participating in the meeting, wherever their physical location, can hear one another and can hear all discussion and testimony;

(2) members of the public present at the regular meeting location of the council can hear all discussion and testimony and all votes of members of the council;

(3) at least one member of the council is physically present at the regular meeting location; and

(4) all votes are conducted by roll call, so each member's vote on each issue can be identified and recorded.

(b) Each member of the council participating in a meeting by telephone or other electronic means is considered present at the meeting for purposes of determining a quorum and participating in all proceedings.

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(c) If telephone or other electronic means is used to conduct a meeting, the council, to the extent practical, shall allow a person to monitor the meeting electronically from a remote location. The council may require the person making such a connection to pay for documented marginal costs that the council incurs as a result of the additional connection.

(d) If telephone or other electronic means is used to conduct a regular, special, or emergency meeting, the council shall provide notice of the regular meeting location, of the fact that some members may participate by telephone or other electronic means, and of the provisions of paragraph (c). The timing and method of providing notice is governed by section 13D.04.

[EFFECTIVE DATE.] This section is effective the day following final enactment.

Sec. 3. Minnesota Statutes 2002, section 517.08, subdivision 1b, is amended to read:

Subd. 1b. [TERM OF LICENSE; FEE; PREMARITAL EDUCATION.] (a) The court administrator shall examine upon oath the party applying for a license relative to the legality of the contemplated marriage. If at the expiration of a five-day period, on being satisfied that there is no legal impediment to it, including the restriction contained in section 259.13, the court administrator shall issue the license, containing the full names of the parties before and after marriage, and county and state of residence, with the district court seal attached, and make a record of the date of issuance. The license shall be valid for a period of six months. In case of emergency or extraordinary circumstances, a judge of the district court of the county in which the application is made, may authorize the license to be issued at any time before the expiration of the five days. Except as provided in paragraph (b), the court administrator shall collect from the applicant a fee of ~~$70~~ $80 for administering the oath, issuing, recording, and filing all papers required, and preparing and transmitting to the state registrar of vital statistics the reports of marriage required by this section. If the license should not be used within the period of six months due to illness or other extenuating circumstances, it may be surrendered to the court administrator for cancellation, and in that case a new license shall issue upon request of the parties of the original license without fee. A court administrator who knowingly issues or signs a marriage license in any manner other than as provided in this section shall pay to the parties aggrieved an amount not to exceed $1,000.

(b) The marriage license fee for parties who have completed at least 12 hours of premarital education is $20. In order to qualify for the reduced fee, the parties must submit a signed and dated statement from the person who provided the premarital education confirming that it was received. The premarital education must be provided by a licensed or ordained minister or the minister's designee, a person authorized to solemnize marriages under section 517.18, or a person authorized to practice marriage and family therapy under section 148B.33. The education must include the use of a premarital inventory and the teaching of communication and conflict management skills.

(c) The statement from the person who provided the premarital education under paragraph (b) must be in the following form:

"I, (name of educator), confirm that (names of both parties) received at least 12 hours of premarital education that included the use of a premarital inventory and the teaching of communication and conflict management skills. I am a licensed or ordained minister, a person authorized to solemnize marriages under Minnesota Statutes, section 517.18, or a person licensed to practice marriage and family therapy under Minnesota Statutes, section 148B.33."

The names of the parties in the educator's statement must be identical to the legal names of the parties as they appear in the marriage license application. Notwithstanding section 138.17, the educator's statement must be retained for seven years, after which time it may be destroyed.

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(d) If section 259.13 applies to the request for a marriage license, the court administrator shall grant the marriage license without the requested name change. Alternatively, the court administrator may delay the granting of the marriage license until the party with the conviction:

(1) certifies under oath that 30 days have passed since service of the notice for a name change upon the prosecuting authority and, if applicable, the attorney general and no objection has been filed under section 259.13; or

(2) provides a certified copy of the court order granting it. The parties seeking the marriage license shall have the right to choose to have the license granted without the name change or to delay its granting pending further action on the name change request.

Sec. 4. Minnesota Statutes 2002, section 517.08, subdivision 1c, is amended to read:

Subd. 1c. [DISPOSITION OF LICENSE FEE.] (a) Of the marriage license fee collected pursuant to subdivision 1b, paragraph (a), $15 must be retained by the county. The court administrator must pay ~~$55~~ $65 to the state treasurer to be deposited as follows:

(1) $50 in the general fund;

(2) $3 in the special revenue fund to be appropriated to the commissioner of children, families, and learning for parenting time centers under section 119A.37; ~~and~~

(3) $2 in the special revenue fund to be appropriated to the commissioner of health for developing and implementing the MN ENABL program under section 145.9255; and

(4) $10 in the special revenue fund to be appropriated to the commissioner of economic security for the displaced homemaker program under section 268.96.

(b) Of the $20 fee under subdivision 1b, paragraph (b), $15 must be retained by the county. The state court administrator must pay $5 to the state treasurer to be distributed as provided in paragraph (a), clauses (2) and (3).

Sec. 5. Laws 2001, First Special Session chapter 4, article 2, section 31, is amended to read:

Sec. 31. [WORKFORCE ENHANCEMENT FEE.]

Subdivision 1. [FEE.] Notwithstanding Minnesota Statutes, section 268.022, effective January 1, 2002, the special assessment under that section on taxable wages as defined in Minnesota Statutes, section 268.035, subdivision 24, is suspended until December 31, 2005. Effective January 1, 2002, there shall be assessed, in addition to unemployment taxes due under Minnesota Statutes, section 268.051, a workforce enhancement fee of ~~.09~~ .12 percent on taxable wages. If the commissioner of trade and economic development determines that the need for services under the dislocated worker program substantially exceeds the resources that will be available for that program, the commissioner may increase the fee to no more than .14 percent of taxable wages. This fee shall be due and be paid on the same schedule and in the same manner as unemployment taxes under Minnesota Statutes, section 268.051. Any amount past due under this section shall be subject to the same interest and collection provisions as unemployment taxes. This fee shall expire on December 31, 2005.

Subd. 2. [USE OF FUNDS COLLECTED.] ~~An amount equal to .07 percent on taxable wages shall be deposited in the workforce development fund provided for under Minnesota Statutes, section 268.022, subdivision 2.~~ An amount equal to .02 percent on taxable wages, less reimbursement for collection costs of the total amount of the fee,

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shall be deposited in the unemployment insurance technology initiative account provided for in section 32. The remaining funds collected under this section shall be deposited in the workforce development fund provided for under Minnesota Statutes, section 268.022, subdivision 2.

[EFFECTIVE DATE.] This section is effective January 1, 2004.

ARTICLE 13

DEPARTMENT OF TRADE AND ECONOMIC

DEVELOPMENT POLICY PROVISIONS - PART TWO

Section 1. Minnesota Statutes 2002, section 17.03, subdivision 6, is amended to read:

Subd. 6. [COOPERATION WITH MINNESOTA ~~TRADE DIVISION~~ DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT.] The commissioner of agriculture, and the commissioner of trade and economic development~~, and the director of the Minnesota trade division~~ shall cooperate with each other to promote the beneficial agricultural interests of the state. The commissioner of ~~trade and economic development and the director of the Minnesota trade division have~~ agriculture has primary responsibility for promoting state agricultural interests to international markets. The commissioner of ~~trade and economic development and the director of the Minnesota trade division are~~ agriculture is also responsible for the promotion of national trade programs related to international marketing. The commissioner of agriculture has primary responsibility for promoting the agriculture interests of producers, promoting state agricultural markets, and promoting agricultural interests of the state in cooperative production and marketing efforts with other states and the United States Department of Agriculture. The commissioner of agriculture is also responsible for promoting the national and international marketing of state agricultural products.

Sec. 2. Minnesota Statutes 2002, section 17.101, subdivision 1, is amended to read:

Subdivision 1. [DEPARTMENTAL DUTIES.] For the purposes of expanding, improving, and developing production and marketing of products of Minnesota agriculture, the commissioner shall encourage and promote the production and marketing of these products by means of:

(a) advertising Minnesota agricultural products;

(b) assisting state agricultural commodity organizations;

(c) developing methods to increase processing and marketing of agricultural commodities including commodities not being produced in Minnesota on a commercial scale, but which may have economic potential in national and international markets;

(d) investigating and identifying new marketing technology and methods to enhance the competitive position of Minnesota agricultural products;

(e) evaluating livestock marketing opportunities;

(f) assessing and developing national and international markets for Minnesota agricultural products;

(g) studying the conversion of raw agricultural products to manufactured products including ethanol;

(h) hosting the visits of foreign trade teams to Minnesota and defraying the teams' expenses;

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(i) assisting Minnesota agricultural businesses desiring to sell their products;

(j) conducting research to eliminate or reduce specific production or technological barriers to market development and trade; and

(k) other activities the commissioner deems appropriate to promote Minnesota agricultural products, provided that the activities do not duplicate programs or services provided by the Minnesota trade division ~~or the Minnesota world trade center~~.

Sec. 3. Minnesota Statutes 2002, section 41A.036, subdivision 2, is amended to read:

Subd. 2. [SMALL BUSINESS DEVELOPMENT LOANS; PREFERENCES.] The following eligible small businesses have preference among all business applicants for small business development loans:

(1) businesses located in rural areas of the state that are experiencing the most severe unemployment rates in the state;

(2) businesses that are likely to expand and provide additional permanent employment in rural areas of the state, or enhance the quality of existing jobs in those areas;

(3) businesses located in border communities that experience a competitive disadvantage due to location;

(4) businesses that have been unable to obtain traditional financial assistance due to a disadvantageous location, minority ownership, or other factors rather than due to the business having been considered a poor financial risk;

(5) businesses that utilize state resources and reduce state dependence on outside resources, and that produce products or services consistent with the long-term social and economic needs of the state; and

(6) businesses located in designated enterprise zones, as described in section 469.168.

Sec. 4. Minnesota Statutes 2002, section 115C.08, subdivision 4, is amended to read: