HF 848

3rd Engrossment - 89th Legislature (2015 - 2016) Posted on 05/24/2016 07:58am

A bill for an act
relating to financing and operation of state and local government; making
changes to individual income, corporate franchise, property, sales and use,
excise, estate, mineral, tobacco, gambling, special, local, and other taxes and
tax-related provisions; providing for long-term care savings plans; modifying
business income tax credits; modifying income tax subtractions and additions;
modifying the definition of resident for income tax purposes; modifying
the dependent care credit, education credit, and research credit; providing
credits for MNsure premium payments, attaining a master's degree, student
loan payments, college savings plans, and job training centers; modifying
reciprocity provisions; providing an additional personal and dependent
exemption; allowing a reverse referendum for property tax levies under certain
circumstances; modifying dates for local referenda related to spending; changing
proposed levy certification dates for special taxing districts; modifying general
property tax provisions; providing for joint county and township assessment
agreements; modifying the definition of agricultural homestead; modifying
property classification definitions; permanently extending the market value
exclusion for surviving spouses of deceased service members and permanently
disabled veterans; modifying provisions for appeals and equalizations courses;
providing a tax credit for overvalued property; modifying and phasing out the
state general levy; modifying proposed levy provisions; modifying due dates
for property taxes; changing withdrawal procedures for the Sustainable Forest
Incentive Program; authorizing valuation exclusion for certain improvements
to homestead and commercial-industrial property; providing an increased estate
tax exemption amount and other estate tax provisions; providing for certain
economic development projects; providing for the Minnesota New Markets Jobs
Act; restricting expenditures and other powers related to certain rail projects;
providing for additional border city zone allocations; modifying general tax
increment financing provisions; modifying provisions for the Destination Medical
Center; modifying general and local sales and use tax provisions; modifying sales
tax definitions and refunds related to petroleum and special fuel, durable medical
equipment, instructional materials, propane tanks, bullion, capital equipment,
and nonprofit groups; providing for a vendor allowance; providing exemptions
for animal shelters, city celebrations, BMX tracks, and certain building and
construction materials; repealing the tax on digital products; providing a separate
rate for certain modular housing; modifying gambling taxes; providing a
definition and rate of tax for vapor products under the tobacco tax; modifying
cigarette stamp provisions; modifying rates for pull tabs sold at bingo halls;
modifying miscellaneous tax provisions; modifying sales tax deposits, accounts,
and provisions for transportation purposes; modifying local government aids
and credits; providing for a school building bond agricultural credit; modifying
assessor accreditation; accelerating the repeal of MinnesotaCare provider taxes;
creating a county program aid working group; establishing trust fund accounts;
providing trust fund payments to counties; modifying provisions related to
payments in lieu of taxes for natural resources land; repealing the political
contribution refund; making various conforming and technical changes; requiring
reports; appropriating money; amending Minnesota Statutes 2014, sections
16A.726; 40A.18, subdivision 2; 62V.05, subdivision 5; 97A.055, subdivision
2; 97A.056, subdivision 1a, by adding subdivisions; 116J.8737, subdivisions 5,
12; 116P.02, subdivision 1, by adding a subdivision; 123B.63, subdivision 3;
126C.17, subdivision 9; 205.10, subdivision 1; 205A.05, subdivision 1; 216B.46;
237.19; 270A.03, subdivision 7; 270B.14, subdivision 17; 270C.13, subdivision
1; 270C.9901; 273.061, subdivision 4; 273.072, by adding a subdivision;
273.124, subdivision 14; 273.13, subdivisions 23, 25, 34; 274.014, subdivision
2; 275.025; 275.065, subdivisions 1, 3; 275.07, subdivisions 1, 2; 275.08,
subdivision 1b; 275.60; 276.04, subdivisions 1, 2; 278.12; 279.01, subdivisions
1, 3; 279.37, subdivision 2; 282.01, subdivision 4; 282.261, subdivision 2;
289A.02, subdivision 7, as amended; 289A.10, subdivision 1; 289A.12, by
adding a subdivision; 289A.20, subdivision 4; 289A.50, subdivision 1; 290.01,
subdivisions 6, 7, 19, as amended, 19a, 19b, 19d, 29, 31, as amended; 290.06,
by adding subdivisions; 290.067, subdivision 1; 290.0671, subdivisions 1, 6a;
290.0672, subdivision 2; 290.0674, subdivisions 1, 2, by adding a subdivision;
290.0677, subdivision 2; 290.068, subdivisions 1, 3, 6a, by adding a subdivision;
290.081; 290.091, subdivision 2; 290.191, subdivision 5; 290A.03, subdivision
15, as amended; 290C.10; 291.005, subdivision 1, as amended; 291.016,
subdivision 3; 291.03, subdivisions 1, 1d; 296A.01, subdivision 12; 296A.08,
subdivision 2; 296A.16, subdivision 2; 297A.61, subdivisions 3, 4, 38; 297A.62,
subdivision 3; 297A.668, subdivisions 1, 2, 6a, 7; 297A.669, subdivision 14a;
297A.67, subdivisions 7a, 13a, by adding subdivisions; 297A.68, subdivisions
5, 19; 297A.70, subdivisions 4, 10, 14, by adding subdivisions; 297A.71, by
adding subdivisions; 297A.75, subdivisions 1, 2, 3; 297A.77, subdivision
3; 297A.815, subdivision 3; 297A.94; 297A.992, subdivisions 1, 6, 6a, by
adding a subdivision; 297A.994, subdivision 4; 297E.02, subdivisions 1, 6;
297F.01, subdivision 19, by adding subdivisions; 297F.05, subdivisions 1, 3, by
adding subdivisions; 297F.06, subdivisions 1, 4; 297F.08, subdivisions 5, 7, 8;
297F.09, subdivision 1; 297I.20, by adding a subdivision; 298.24, subdivision
1; 309.53, subdivision 3; 345.42, by adding a subdivision; 349.12, by adding a
subdivision; 412.221, subdivision 2; 412.301; 426.19, subdivision 2; 447.045,
subdivisions 2, 3, 4, 6, 7; 452.11; 455.24; 455.29; 459.06, subdivision 1;
469.053, subdivision 5; 469.0724; 469.107, subdivision 2; 469.169, by adding
a subdivision; 469.174, subdivisions 12, 14; 469.175, subdivision 3; 469.176,
subdivisions 4, 4c; 469.1761, by adding a subdivision; 469.1763, subdivisions 1,
2, 3; 469.178, subdivision 7; 469.190, subdivisions 1, 5; 469.40, subdivision 11,
as amended; 469.43, by adding a subdivision; 469.45, subdivisions 1, 2; 469.47,
subdivision 4, as amended; 471.57, subdivision 3; 471.571, subdivision 3;
471.572, subdivisions 2, 4; 473.13, by adding a subdivision; 473.39, by adding a
subdivision; 473.446, subdivision 1; 473H.09; 473H.17, subdivision 1a; 475.59;
477A.013, subdivision 10, by adding a subdivision; 477A.017, subdivision 2,
by adding a subdivision; 477A.03, subdivisions 2a, 2b; 477A.10; 477A.11, by
adding subdivisions; 609.5316, subdivision 3; 611.27, subdivisions 13, 15;
Laws 1980, chapter 511, sections 1, subdivision 2, as amended; 2, as amended;
Laws 1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4, as
amended, 5, 6; Laws 1996, chapter 471, article 3, section 51; Laws 1999, chapter
243, article 4, section 18, subdivision 1, as amended; Laws 2008, chapter 366,
article 7, section 20; Laws 2009, chapter 88, article 5, section 17, as amended;
Laws 2011, First Special Session chapter 9, article 6, section 97, subdivision
6; Laws 2014, chapter 308, article 6, section 7; proposing coding for new law
in Minnesota Statutes, chapters 11A; 16A; 16B; 116J; 116P; 117; 273; 274;
275; 290; 297A; 416; 459; 473; 477A; 609; proposing coding for new law as
Minnesota Statutes, chapter 116X; repealing Minnesota Statutes 2014, sections
10A.322, subdivision 4; 13.4967, subdivision 2; 205.10, subdivision 3; 290.06,
subdivision 23; 290.067, subdivisions 2, 2a, 2b; 297A.61, subdivisions 50, 51,
52, 53, 54, 55, 56; 297A.992, subdivision 12; 297F.05, subdivision 1a; 477A.017,
subdivision 3; 477A.085; 477A.19; Minnesota Rules, part 4503.1400, subpart 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

INCOME AND FRANCHISE TAXES

Section 1.

new text begin [16A.728] LONG-TERM CARE SAVINGS PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given.
new text end

new text begin (b) "Long-term care expense" means the cost of long-term care in a long-term care
facility and the cost of care provided in a person's home when the person receiving the
care is unable to perform multiple basic life functions independently.
new text end

new text begin (c) "Long-term care insurance premiums" means premiums paid for a long-term care
insurance policy, as defined in section 290.0672.
new text end

new text begin (d) "Participant" means an individual who has entered into a participation agreement
or established an account under the plan with a financial institution with which the
commissioner has an agreement under subdivision 2, paragraph (a).
new text end

new text begin (e) "Qualified individual" means a person who:
new text end

new text begin (1) incurred long-term care expenses during the taxable year; or
new text end

new text begin (2) turned 50 years of age or older during the taxable year and who made payments
for long-term care insurance premiums during the taxable year.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner duties; participation agreement. new text end

new text begin (a) The Minnesota
long-term care savings plan is created. The commissioner shall select the administrator of
the plan. If the commissioner receives no acceptable responses to a request for proposals
for an administrator for the plan by November 1, 2015, the commissioner may enter into
agreements with state chartered or federally chartered banks, savings banks, savings
associations, trust companies, or credit unions, or a subsidiary of such an entity, to
receive contributions in the form of account deposits. The commissioner may adopt and
promulgate rules and regulations to carry out the duties under this subdivision.
new text end

new text begin (b) If an administrator is selected, participants must enter into participation
agreements with the commissioner, and if an administrator is not selected, participants may
make contributions to an account with a financial institution with which the commissioner
has an agreement under paragraph (a). A lifetime maximum of $200,000 may be
contributed by a participant. The commissioner must adjust the dollar limitation annually
for inflation as provided in section 151 of the Internal Revenue Code of 1986, as amended.
new text end

new text begin (c) Each participation agreement must provide that the agreement may be canceled
or transferred to a spouse upon the terms and conditions set by the commissioner. If
the participation agreement is canceled or the Minnesota long-term care savings plan is
terminated, a participant may receive the principal amount of all contributions made
by the participant or on behalf of the participant plus the actual investment earnings on
the contributions, less any losses incurred on the contributions. A participant must not
receive more than the fair market value of the account under the participation agreement
on the applicable liquidation date.
new text end

new text begin (d) A participant retains ownership of all contributions up to the date of use.
new text end

new text begin (e) State income tax treatment of contributions and investment earnings is as
provided in section 290.01, subdivisions 19a and 19b.
new text end

new text begin Subd. 3. new text end

new text begin Long-term care savings plan trust. new text end

new text begin If an administrator for the Minnesota
long-term care savings plan is selected under subdivision 2, the Minnesota long-term
care savings plan trust is created. The commissioner is the trustee of the trust and is
responsible for the administration, operation, and maintenance of the plan and has all the
powers necessary to carry out and effectuate the purposes, objectives, and provisions
of the Minnesota long-term care savings plan for the administration, operation, and
maintenance of the trust, except that the investment officer has fiduciary responsibility
to make all decisions regarding the investment of the money in the trust, including the
selection of all investment options and the approval of all fees and other costs charged to
trust assets, except costs for administration, operation, and maintenance of the trust, under
the directions, guidelines, and policies established by the State Board of Investment. The
commissioner may adopt and promulgate rules for the efficient administration, operation,
and maintenance of the trust. The commissioner must not adopt and promulgate rules and
regulations that in any way interfere with the fiduciary responsibility of the state investment
officer to make all decisions regarding the investment of money in the trust. The State
Board of Investment may adopt and promulgate rules and regulations to provide for the
prudent investment of the assets of the trust. The State Board of Investment or its designee
may select and enter into agreements with individuals and entities to provide investment
advice and management of the assets held by the trust, establish investment guidelines,
objectives, and performance standards for the assets held by the trust, and approve any
fees, commissions, and expenses which directly or indirectly affect the return on assets.
new text end

new text begin Subd. 4. new text end

new text begin Authorized withdrawals. new text end

new text begin A qualified individual may make withdrawals
as a participant in the Minnesota long-term care savings plan to pay or reimburse
long-term care expenses or long-term care insurance premiums. Any participant who is
not a qualified individual or who makes a withdrawal for any reason other than a transfer
of funds to a spouse, payment of long-term care expenses or long-term care insurance
premiums, or the death of the participant is subject to a ten percent penalty on the amount
withdrawn. The commissioner shall collect the penalty.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2014, section 62V.05, subdivision 5, is amended to read:

Subd. 5.

Health carrier and health plan requirements; participation.

(a)
Beginning January 1, 2015, the board may establish certification requirements for health
carriers and health plans to be offered through MNsure that satisfy federal requirements
under section 1311(c)(1) of the Affordable Care Act, Public Law 111-148.

(b) Paragraph (a) does not apply if by June 1, 2013, the legislature enacts regulatory
requirements that:

(1) apply uniformly to all health carriers and health plans in the individual market;

(2) apply uniformly to all health carriers and health plans in the small group market;
and

(3) satisfy minimum federal certification requirements under section 1311(c)(1) of
the Affordable Care Act, Public Law 111-148.

(c) In accordance with section 1311(e) of the Affordable Care Act, Public Law
111-148, the board shall establish policies and procedures for certification and selection
of health plans to be offered as qualified health plans through MNsure. The board shall
certify and select a health plan as a qualified health plan to be offered through MNsure, if:

(1) the health plan meets the minimum certification requirements established in
paragraph (a) or the market regulatory requirements in paragraph (b);

(2) the board determines that making the health plan available through MNsure is in
the interest of qualified individuals and qualified employers;

(3) the health carrier applying to offer the health plan through MNsure also applies
to offer health plans at each actuarial value level and service area that the health carrier
currently offers in the individual and small group markets; and

(4) the health carrier does not apply to offer health plans in the individual and
small group markets through MNsure under a separate license of a parent organization
or holding company under section 60D.15, that is different from what the health carrier
offers in the individual and small group markets outside MNsure.

(d) In determining the interests of qualified individuals and employers under
paragraph (c), clause (2), the board may not exclude a health plan for any reason specified
under section 1311(e)(1)(B) of the Affordable Care Act, Public Law 111-148. The board
may consider:

(1) affordability;

(2) quality and value of health plans;

(3) promotion of prevention and wellness;

(4) promotion of initiatives to reduce health disparities;

(5) market stability and adverse selection;

(6) meaningful choices and access;

(7) alignment and coordination with state agency and private sector purchasing
strategies and payment reform efforts; and

(8) other criteria that the board determines appropriate.

(e) For qualified health plans offered through MNsure on or after January 1, 2015,
the board shall establish policies and procedures under paragraphs (c) and (d) for selection
of health plans to be offered as qualified health plans through MNsure by February 1
of each year, beginning February 1, 2014. The board shall consistently and uniformly
apply all policies and procedures and any requirements, standards, or criteria to all health
carriers and health plans. For any policies, procedures, requirements, standards, or criteria
that are defined as rules under section 14.02, subdivision 4, the board may use the process
described in subdivision 9.

(f) For 2014, the board shall not have the power to select health carriers and health
plans for participation in MNsure. The board shall permit all health plans that meet the
certification requirements under section 1311(c)(1) of the Affordable Care Act, Public
Law 111-148, to be offered through MNsure.

(g) Under this subdivision, the board shall have the power to verify that health
carriers and health plans are properly certified to be eligible for participation in MNsure.

(h) The board has the authority to decertify health carriers and health plans that
fail to maintain compliance with section 1311(c)(1) of the Affordable Care Act, Public
Law 111-148.

(i) For qualified health plans offered through MNsure beginning January 1, 2015,
health carriers must use the most current addendum for Indian health care providers
approved by the Centers for Medicare and Medicaid Services and the tribes as part of their
contracts with Indian health care providers. MNsure shall comply with all future changes
in federal law with regard to health coverage for the tribes.

new text begin (j) Health carriers offering coverage through MNsure shall provide a premium
advance to qualified individuals eligible for a state tax credit under section 290.0661,
equal to the amount of the tax credit calculated under that section. Individuals receiving
a premium advance under this paragraph must pay to the health carrier the full amount
of the premium advance by April 15 of the year following the coverage year for which
the premium advance was provided. The MNsure eligibility system must automatically
notify health carriers:
new text end

new text begin (1) if an enrollee is eligible for a state tax credit under section 290.0661; and
new text end

new text begin (2) the amount of the applicable state tax credit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 3.

Minnesota Statutes 2014, section 116J.8737, subdivision 5, is amended to read:

Subd. 5.

Credit allowed.

(a)(1) A qualified investor or qualified fund is eligible
for a credit equal to 25 percent of the qualified investment in a qualified small business.
Investments made by a pass-through entity qualify for a credit only if the entity is a
qualified fund. The commissioner must not allocate more than $15,000,000 in credits to
qualified investors or qualified funds for taxable years beginning after December 31,
2013, and before January 1, deleted text begin 2017 deleted text end new text begin 2015, and must not allocate more than $18,000,000 in
credits to qualified investors or qualified funds for taxable years beginning after December
31, 2014, and before January 1, 2019 new text end ; and

(2) for taxable years beginning after December 31, 2014, and before January 1, 2017,
deleted text begin $7,500,000 deleted text end new text begin 50 percent of the amount available for the taxable year new text end must be allocated to
credits for qualifying investments in qualified greater Minnesota businesses and minority-
or women-owned qualified small businesses in Minnesota. Any portion of a taxable year's
credits that is reserved for qualifying investments in greater Minnesota businesses and
minority- or women-owned qualified small businesses in Minnesota that is not allocated
by September 30 of the taxable year is available for allocation to other credit applications
beginning on October 1. Any portion of a taxable year's credits that is not allocated by
the commissioner does not cancel and may be carried forward to subsequent taxable
years until all credits have been allocated.

(b) The commissioner may not allocate more than a total maximum amount in credits
for a taxable year to a qualified investor for the investor's cumulative qualified investments
as an individual qualified investor and as an investor in a qualified fund; for married
couples filing joint returns the maximum is $250,000, and for all other filers the maximum
is $125,000. The commissioner may not allocate more than a total of $1,000,000 in credits
over all taxable years for qualified investments in any one qualified small business.

(c) The commissioner may not allocate a credit to a qualified investor either as
an individual qualified investor or as an investor in a qualified fund if, at the time the
investment is proposed:

(1) the investor is an officer or principal of the qualified small business; or

(2) the investor, either individually or in combination with one or more members of
the investor's family, owns, controls, or holds the power to vote 20 percent or more of
the outstanding securities of the qualified small business.

A member of the family of an individual disqualified by this paragraph is not eligible for a
credit under this section. For a married couple filing a joint return, the limitations in this
paragraph apply collectively to the investor and spouse. For purposes of determining the
ownership interest of an investor under this paragraph, the rules under section 267(c) and
267(e) of the Internal Revenue Code apply.

(d) Applications for tax credits for 2010 must be made available on the department's
Web site by September 1, 2010, and the department must begin accepting applications
by September 1, 2010. Applications for subsequent years must be made available by
November 1 of the preceding year.

(e) Qualified investors and qualified funds must apply to the commissioner for tax
credits. Tax credits must be allocated to qualified investors or qualified funds in the order
that the tax credit request applications are filed with the department. The commissioner
must approve or reject tax credit request applications within 15 days of receiving the
application. The investment specified in the application must be made within 60 days of
the allocation of the credits. If the investment is not made within 60 days, the credit
allocation is canceled and available for reallocation. A qualified investor or qualified fund
that fails to invest as specified in the application, within 60 days of allocation of the
credits, must notify the commissioner of the failure to invest within five business days of
the expiration of the 60-day investment period.

(f) All tax credit request applications filed with the department on the same day must
be treated as having been filed contemporaneously. If two or more qualified investors or
qualified funds file tax credit request applications on the same day, and the aggregate
amount of credit allocation claims exceeds the aggregate limit of credits under this section
or the lesser amount of credits that remain unallocated on that day, then the credits must
be allocated among the qualified investors or qualified funds who filed on that day on a
pro rata basis with respect to the amounts claimed. The pro rata allocation for any one
qualified investor or qualified fund is the product obtained by multiplying a fraction,
the numerator of which is the amount of the credit allocation claim filed on behalf of
a qualified investor and the denominator of which is the total of all credit allocation
claims filed on behalf of all applicants on that day, by the amount of credits that remain
unallocated on that day for the taxable year.

(g) A qualified investor or qualified fund, or a qualified small business acting on their
behalf, must notify the commissioner when an investment for which credits were allocated
has been made, and the taxable year in which the investment was made. A qualified fund
must also provide the commissioner with a statement indicating the amount invested by
each investor in the qualified fund based on each investor's share of the assets of the
qualified fund at the time of the qualified investment. After receiving notification that the
investment was made, the commissioner must issue credit certificates for the taxable year
in which the investment was made to the qualified investor or, for an investment made by
a qualified fund, to each qualified investor who is an investor in the fund. The certificate
must state that the credit is subject to revocation if the qualified investor or qualified
fund does not hold the investment in the qualified small business for at least three years,
consisting of the calendar year in which the investment was made and the two following
years. The three-year holding period does not apply if:

(1) the investment by the qualified investor or qualified fund becomes worthless
before the end of the three-year period;

(2) 80 percent or more of the assets of the qualified small business is sold before
the end of the three-year period;

(3) the qualified small business is sold before the end of the three-year period;

(4) the qualified small business's common stock begins trading on a public exchange
before the end of the three-year period; or

(5) the qualified investor dies before the end of the three-year period.

(h) The commissioner must notify the commissioner of revenue of credit certificates
issued under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
taxable years beginning after December 31, 2014.
new text end

Sec. 4.

Minnesota Statutes 2014, section 116J.8737, subdivision 12, is amended to read:

Subd. 12.

Sunset.

This section expires for taxable years beginning after December
31, deleted text begin 2016 deleted text end new text begin 2018 new text end , except that reporting requirements under subdivision 6 and revocation
of credits under subdivision 7 remain in effect through deleted text begin 2018 deleted text end new text begin 2020 new text end for qualified
investors and qualified funds, and through deleted text begin 2020 deleted text end new text begin 2022 new text end for qualified small businesses,
reporting requirements under subdivision 9 remain in effect through deleted text begin 2021 deleted text end new text begin 2023 new text end , and the
appropriation in subdivision 11 remains in effect through deleted text begin 2020 deleted text end new text begin 2022 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

new text begin [116J.8739] TECHNOLOGY CORPORATE TAX BENEFIT REFUND
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Program established. new text end

new text begin The commissioner shall establish a corporate
tax benefit refund program to allow new or expanding technology and biotechnology
companies in this state with unused net operating loss carryovers under section 290.095 to
surrender those tax benefits for refunds. The refunds must be used to assist in the funding
of costs incurred by the new or expanding technology and biotechnology company.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Biotechnology" means the continually expanding body of fundamental
knowledge about the functioning of biological systems from the macro level to the
molecular and subatomic levels, as well as novel products, services, technologies, and
subtechnologies developed as a result of insights gained from research advances that add
to that body of fundamental knowledge.
new text end

new text begin (c) "Biotechnology company" means an corporation that:
new text end

new text begin (1) has its headquarters or base of operations in this state;
new text end

new text begin (2) owns, has filed for, or has a valid license to use protected, proprietary intellectual
property; and
new text end

new text begin (3) is engaged in the research, development, production, or provision of
biotechnology to develop or provide products or processes for specific commercial or
public purposes including, but not limited to, medical, pharmaceutical, nutritional, and
other health-related purposes, agricultural purposes, and environmental purposes.
new text end

new text begin (d) "Full-time employee" means a person employed by a new or expanding
technology or biotechnology company for consideration for at least 35 hours per week, or
who renders any other standard of service generally accepted by custom or practice as
full-time employment and whose wages are subject to withholding under section 290.92;
or who is a partner of a new or expanding technology or biotechnology company who
works for the partnership for at least 35 hours per week, or who renders any other standard
of service generally accepted by custom or practice as full-time employment, and whose
distributive share of income, gain, loss, or deduction, or whose guaranteed payments, or
any combination of them, is subject to the payment of estimated taxes, under section
289A.25. To qualify as a full-time employee, an employee must also receive from the new
or expanding technology or biotechnology company group health benefits under a health
plan as defined under section 62A.011, subdivision 3, or under a self-insured employee
welfare benefit plan as defined in United States Code, title 29, section 1002. Full-time
employee excludes any person who works as an independent contractor or on a consulting
basis for the new or expanding technology or biotechnology company.
new text end

new text begin (e) "New or expanding" means a technology or biotechnology company that:
new text end

new text begin (1) on June 30 of the year in which the corporation files an application for surrender
of tax benefits under this section and on the date of the grant of the corporate tax benefit
certificate, has fewer than 250 employees in the United States;
new text end

new text begin (2) on June 30 of the year in which the corporation files the application, has at least
one full-time employee working in this state if the company has been incorporated for less
than three years, has at least five full-time employees working in this state if the company
has been incorporated for more than three years but fewer than five years, and has at least
ten full-time employees working in this state if the company has been incorporated for
more than five years; and
new text end

new text begin (3) on the date of the grant of the corporate tax benefit certificate, the corporation
has the number of full-time employees in this state required by clause (2).
new text end

new text begin (f) "Technology company" means a corporation that:
new text end

new text begin (1) has its headquarters or base of operations in this state;
new text end

new text begin (2) owns, has filed for, or has a valid license to use protected, proprietary intellectual
property; and
new text end

new text begin (3) employs some combination of the following: highly educated or trained
managers and workers, or both, employed in this state who use sophisticated scientific
research service or production equipment, processes, or knowledge to discover, develop,
test, transfer, or manufacture a product or service.
new text end

new text begin Subd. 3. new text end

new text begin Allocation of tax benefits; annual limit. new text end

new text begin (a) The commissioner, in
cooperation with the commissioner of revenue, shall review and approve applications by
new or expanding technology and biotechnology companies with unused but otherwise
allowable net operating loss carryovers under section 290.095 to surrender those tax
benefits for the grant of a refund. The amount of the qualifying tax benefit is the amount
of the net operating loss carryover multiplied by the new or expanding technology
or biotechnology company's anticipated apportionment percentage, as determined
under section 290.191, for the taxable year in which the benefit is surrendered and then
multiplied by the corporate franchise tax rate under section 290.06, subdivision 1.
new text end

new text begin (b) The commissioner must approve the grant of no more than $15,000,000 of
tax benefit refunds in each fiscal year. If the total amount of tax benefits requested
to be surrendered by approved applicants exceeds $15,000,000 for a fiscal year, the
commissioner, in cooperation with the commissioner of revenue, must not approve the
grant of more than $15,000,000 of tax benefits for that fiscal year and shall allocate the
grant of tax benefit refunds by approved corporations using the following method:
new text end

new text begin (1) an eligible applicant with $250,000 or less of qualifying tax benefits may
surrender the entire amount of its tax benefits;
new text end

new text begin (2) an eligible applicant with more than $250,000 of qualifying tax benefits may
surrender a minimum of $250,000 of its tax benefits; and
new text end

new text begin (3) an eligible applicant with more than $250,000 of qualifying tax benefits may
surrender additional tax benefits determined by multiplying the applicant's tax benefits,
less the minimum tax benefits that corporation is authorized to surrender under clause (2),
by a fraction, the numerator of which is the total amount of tax benefit grants that the
commissioner is authorized to approve less the total amount of tax benefits approved
under clauses (1) and (2), and the denominator of which is the total amount of tax benefits
requested to be surrendered by all eligible applicants less the total amount of tax benefit
grants approved under clauses (1) and (2).
new text end

new text begin (c) If the total amount of tax benefit grants that would be authorized using the
method under paragraph (b) exceeds $15,000,000 for a fiscal year, then the commissioner,
in cooperation with the commissioner of revenue, shall limit the total amount of tax benefit
grants authorized to $15,000,000 by applying the above method on an apportioned basis.
new text end

new text begin Subd. 4. new text end

new text begin Qualifying tax benefits and corporations. new text end

new text begin (a) For purposes of this
section, qualifying tax benefits include an eligible applicant's unused but otherwise
allowable carryover of net operating losses multiplied by the applicant's anticipated
allocation factor as determined under section 290.191 for the taxable year in which the
benefit is surrendered and subsequently multiplied by the corporation franchise tax rate
under section 290.06, subdivision 1. An eligible applicant's qualifying tax benefits are
limited to net operating losses that the applicant requests to surrender in its application to
the authority and must not, in total, exceed the maximum amount of tax benefits that the
applicant is eligible to surrender. No application for a corporate tax benefit certificate must
be approved in which the new or expanding technology or biotechnology company:
new text end

new text begin (1) has demonstrated positive net operating income in any of the two previous full
years of ongoing operations as determined on its financial statements issued according to
generally accepted accounting standards endorsed by the Financial Accounting Standards
Board; or
new text end

new text begin (2) is directly or indirectly at least 50 percent owned or controlled by another
corporation that has demonstrated positive net operating income in any of the two previous
full years of ongoing operations as determined on its financial statements issued according
to generally accepted accounting standards endorsed by the Financial Accounting
Standards Board or is part of a consolidated group of affiliated corporations, as filed for
federal income tax purposes, that in the aggregate has demonstrated positive net operating
income in any of the two previous full years of ongoing operations as determined on
its combined financial statements issued according to generally accepted accounting
standards endorsed by the Financial Accounting Standards Board.
new text end

new text begin (b) The maximum lifetime value of surrendered tax benefits that a corporation may
surrender under the program is $5,000,000.
new text end

new text begin Subd. 5. new text end

new text begin Recapture of tax benefits. new text end

new text begin The commissioner, in consultation with the
commissioner of revenue, shall establish procedures for the recapture of all of, or a portion
of, the amount of a grant of a corporate tax benefit certificate from the new or expanding
technology or biotechnology company receiving a grant for a refund of surrendered tax
benefits under this section if the taxpayer fails to use the refund as required by this section
or fails to maintain a headquarters or a base of operation in this state during the five years
following receipt of the refund, except if the failure to maintain a headquarters or a base
of operation in this state is due to the liquidation of the new or expanding technology or
biotechnology company.
new text end

new text begin Subd. 6. new text end

new text begin Approval of acquisition of tax benefits; purposes; required agreement.
new text end

new text begin (a) The commissioner must not issue a corporate tax benefit certificate unless the applicant
certifies that as of the date of the grant of the certificate that it is operating as a new or
expanding technology or biotechnology company in this state and does not intend to cease
operating as a new or expanding technology or biotechnology company in this state.
new text end

new text begin (b) The recipient of a grant under this section must use the refund to pay expenses
incurred for the operation of the new or expanding technology or biotechnology company
in this state including, but not limited to, the expenses of fixed assets, such as the
construction and acquisition and development of real estate, materials, start-up, tenant
fit-out, working capital, salaries, research and development expenditures, and any other
expenses determined by the commissioner to be necessary to carry out technology or
biotechnology company operations in this state.
new text end

new text begin (c) The commissioner shall enter into a written agreement with the new or expanding
technology or biotechnology company specifying the terms and conditions of the grant
of the certificate of tax benefits. The written agreement may require the maintenance by
the new or expanding technology or biotechnology company of a headquarters or a base
of operation in this state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to taxable years beginning after December 31, 2015.
new text end

Sec. 6.

Minnesota Statutes 2014, section 289A.02, subdivision 7, as amended by Laws
2015, chapter 1, section 1, is amended to read:

Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text begin December
31, 2014 deleted text end new text begin April 1, 2015 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2014, section 289A.12, is amended by adding a subdivision
to read:

new text begin Subd. 19. new text end

new text begin Charity health care services. new text end

new text begin (a) A medical professional, dentist, or
chiropractor claiming the subtraction under section 290.01, subdivision 19b, clause
(23), must file an informational report with the commissioner documenting the value
of charity health care services that the individual provided during the taxable year. A
business that employs a medical professional, dentist, or chiropractor may also file an
informational report with the commissioner documenting the value of charity health care
services its employees provided during the taxable year. The charity health care services
reported to the commissioner must be limited to those services covered under medical
assistance and for which a federal Medicaid match is available and must be calculated
at the reimbursement rates provided in section 256B.76.
new text end

new text begin (b) For purposes of this subdivision, the following terms have the meanings given:
new text end

new text begin (1) "chiropractor" means an individual licensed under chapter 148;
new text end

new text begin (2) "dentist" means an individual licensed under chapter 150A; and
new text end

new text begin (3) "medical professional" means an individual licensed under chapter 147, an
individual licensed under chapter 147B, and a mental health professional as defined under
section 245.462, subdivision 18, or section 245.4871, subdivision 27.
new text end

new text begin (c) The commissioner shall define charity health care services for purposes of this
subdivision. In developing this definition, the commissioner shall consider the criteria
specified in Minnesota Rules, part 4650.0115, subpart 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 8.

Minnesota Statutes 2014, section 290.01, subdivision 7, is amended to read:

Subd. 7.

Resident.

(a) The term "resident" means any individual domiciled
in Minnesota, except that an individual is not a "resident" for the period of time that
the individual is a "qualified individual" as defined in section 911(d)(1) of the Internal
Revenue Code, if the qualified individual notifies the county within three months of
moving out of the country that homestead status be revoked for the Minnesota residence
of the qualified individual, and the property is not classified as a homestead while the
individual remains a qualified individual.

(b) "Resident" also means any individual domiciled outside the state who maintains
a place of abode in the state and spends in the aggregate more than one-half of the tax
year in Minnesota, unless:

(1) the individual or the spouse of the individual is in the armed forces of the United
States; or

(2) the individual is covered under the reciprocity provisions in section 290.081.

For purposes of this subdivision, presence within the state for any part of a calendar
day constitutes a day spent in the state new text begin , except that a day spent in Minnesota for the
primary purpose of receiving medical treatment by the taxpayer, or the spouse, child, or
parent of the taxpayer, is not treated as a day spent in Minnesota. "Medical treatment"
means treatment as defined in section 213(d)(1)(A) of the Internal Revenue Code new text end .
Individuals shall keep adequate records to substantiate the days spent outside the state.

The term "abode" means a dwelling maintained by an individual, whether or not
owned by the individual and whether or not occupied by the individual, and includes a
dwelling place owned or leased by the individual's spouse.

(c) new text begin In determining where an individual is domiciled, new text end neither the commissioner nor
any court shall consider new text begin :
new text end

new text begin (1) new text end charitable contributions made by deleted text begin an deleted text end new text begin the new text end individual within or without the state deleted text begin in
determining if the individual is domiciled in Minnesota. deleted text end new text begin ;
new text end

new text begin (2) the location of the individual's attorney, certified public accountant, or financial
adviser; or
new text end

new text begin (3) the place of business of a financial institution at which the individual applies for
any new type of credit or at which the individual opens or maintains any type of account.
new text end

new text begin (d) For purposes of this subdivision, the following terms have the meanings given
them:
new text end

new text begin (1) "financial adviser" means a financial institution or an individual engaged in
business as a certified financial planner, registered investment adviser, licensed insurance
agent, or securities broker-dealer; and
new text end

new text begin (2) "financial institution" means a financial institution as defined in section 47.015,
subdivision 1; a state or nationally chartered credit union; or a registered broker-dealer
under the Securities and Exchange Act of 1934.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 9.

Minnesota Statutes 2014, section 290.01, subdivision 19, as amended by Laws
2015, chapter 1, section 2, is amended to read:

Subd. 19.

Net income.

The term "net income" means the federal taxable income,
as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
date named in this subdivision, incorporating the federal effective dates of changes to the
Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in subdivisions 19a to 19f.

In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
Revenue Code must be applied by allowing a deduction for capital gain dividends and
exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
Revenue Code; and

(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.

The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

The net income of a designated settlement fund as defined in section 468B(d) of
the Internal Revenue Code means the gross income as defined in section 468B(b) of the
Internal Revenue Code.

The Internal Revenue Code of 1986, as amended through deleted text begin December 31, 2014 deleted text end new text begin April
1, 2015 new text end , shall be in effect for taxable years beginning after December 31, 1996.

Except as otherwise provided, references to the Internal Revenue Code in
subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
the applicable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective retroactively at the same
time as the changes were effective for federal purposes.
new text end

Sec. 10.

Minnesota Statutes 2014, 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:

(A) the portion of the exempt-interest dividends exempt from state taxation under
the laws of the United States; and

(B) 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, including any dividends exempt
under subitem (A), 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, sales and use, motor vehicle sales, or excise taxes paid or
accrued within the taxable year under this chapter and the amount of taxes based on net
income paid, sales and use, motor vehicle sales, or excise 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 state itemized deduction exceeds the amount of the standard deduction as
defined in section 63(c) of the Internal Revenue Code, minus any addition that would have
been required under clause (17) if the taxpayer had claimed the standard deduction. For
the purpose of this clause, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed under clause (15);

(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 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income 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
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);

(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;

(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;

(8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(10) the amount of expenses disallowed under section 290.10, subdivision 2;

(11) for taxable years beginning before January 1, 2010, the amount deducted for
qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
the extent deducted from gross income;

(12) for taxable years beginning before January 1, 2010, the amount deducted for
certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
of the Internal Revenue Code, to the extent deducted from gross income;

(13) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code;

(14) changes to federal taxable income attributable to a net operating loss that the
taxpayer elected to carry back for more than two years for federal purposes but for which
the losses can be carried back for only two years under section 290.095, subdivision
11, paragraph (c);

(15) the amount of disallowed itemized deductions, but the amount of disallowed
itemized deductions plus the addition required under clause (2) 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, and reduced by any addition that would have been required
under clause (17) if the taxpayer had claimed the standard deduction:

(i) the amount of disallowed itemized deductions is equal to the lesser of:

(A) three percent of the excess of the taxpayer's federal adjusted gross income
over the applicable amount; or

(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
taxpayer under the Internal Revenue Code for the taxable year;

(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
married individual filing a separate return. Each dollar amount shall be increased by
an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;

(iii) the term "itemized deductions" does not include:

(A) the deduction for medical expenses under section 213 of the Internal Revenue
Code;

(B) any deduction for investment interest as defined in section 163(d) of the Internal
Revenue Code; and

(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
Code or for losses described in section 165(d) of the Internal Revenue Code;

(16) the amount of disallowed personal exemptions for taxpayers with federal
adjusted gross income over the threshold amount:

(i) the disallowed personal exemption amount is equal to the number of personal
exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied
by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the
Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal
Revenue Code, and by the applicable percentage;

(ii) "applicable percentage" means two percentage points for each $2,500 (or
fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
year exceeds the threshold amount. In the case of a married individual filing a separate
return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
no event shall the applicable percentage exceed 100 percent;

(iii) the term "threshold amount" means:

(A) $150,000 in the case of a joint return or a surviving spouse;

(B) $125,000 in the case of a head of a household;

(C) $100,000 in the case of an individual who is not married and who is not a
surviving spouse or head of a household; and

(D) $75,000 in the case of a married individual filing a separate return; and

(iv) the thresholds shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; deleted text begin and
deleted text end

(17) to the extent deducted in the computation of federal taxable income, for taxable
years beginning after December 31, 2010, and before January 1, 2014, the difference
between the standard deduction allowed under section 63(c) of the Internal Revenue Code
and the standard deduction allowed for 2011, 2012, and 2013 under the Internal Revenue
Code as amended through December 1, 2010 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (18) the amount withdrawn by a participant in the Minnesota long-term care savings
plan under section 16A.128 by a person who is not a qualified individual or for any
reason other than a transfer of funds to a spouse, payment of long-term care expenses or
long-term care insurance premiums, or the death of the participant, including withdrawals
made by reason of cancellation of the participation agreement or termination of the plan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 11.

Minnesota Statutes 2014, section 290.01, subdivision 19b, is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:

(1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;

(2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;

(3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, new text begin and amounts used to claim the credit under section 290.067, new text end not to
exceed deleted text begin $1,625 deleted text end new text begin $2,500 new text end for each qualifying child in deleted text begin grades deleted text end new text begin a prekindergarten educational
program or in new text end kindergarten deleted text begin to deleted text end new text begin through grade new text end 6 and deleted text begin $2,500 deleted text end new text begin $3,750 new text end for each qualifying child
in grades 7 deleted text begin to deleted text end new text begin through new text end 12, for deleted text begin tuition, textbooks, and transportation of each qualifying
child in attending an elementary or secondary school situated in Minnesota, North Dakota,
South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the
state's compulsory attendance laws, which is not operated for profit, and which adheres
to the provisions of the Civil Rights Act of 1964 and chapter 363A. For the purposes of
this clause, "tuition" includes fees or tuition as defined in section 290.0674, subdivision
1, clause (1). As used in this clause, "textbooks" includes books and other instructional
materials and equipment purchased or leased for use in elementary and secondary schools
in teaching only those subjects legally and commonly taught in public elementary and
secondary schools in this state. Equipment expenses qualifying for deduction includes
expenses as defined and limited in section 290.0674, subdivision 1, clause (3). "Textbooks"
does not include instructional books and materials used in the teaching of religious tenets,
doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship,
nor does it include books deleted text end deleted text begin or materials for, or transportation to, extracurricular activities
including sporting events, musical or dramatic events, speech activities, driver's education,
or similar programs. No deduction is permitted for any expense the taxpayer incurred in
using the taxpayer's or the qualifying child's vehicle to provide such transportation for a
qualifying child deleted text end new text begin education-related expenses, as defined in section 290.0674, subdivision 1 new text end .
For purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code; new text begin and "prekindergarten educational
program" has the meaning given in section 290.0674, subdivision 1. The maximum
amounts allowed for each qualifying child under this clause must be adjusted for inflation.
The commissioner shall adjust the maximum amount by the percentage determined
under the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B) the word "2014" is substituted for the word "1992." For 2016, the commissioner
shall then determine the percent change from the 12 months ending on August 31, 2014,
to the 12 months ending on August 31, 2015, and in each subsequent year, from the
12 months ending August 31, 2014, to the 12 months ending on August 31 of the year
preceding the taxable year. The amounts as adjusted for inflation must be rounded to the
nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest
$10 amount. The determination of the commissioner under this subdivision is not a rule
subject to the Administrative Procedure Act in chapter 14, including section 14.386;
new text end

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
under the provisions of Public Law 109-1 and Public Law 111-126;

(7) for individuals who are allowed a federal foreign tax credit for taxes that do not
qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
of subnational foreign taxes for the taxable year, but not to exceed the total subnational
foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
"federal foreign tax credit" means the credit allowed under section 27 of the Internal
Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
the extent they exceed the federal foreign tax credit;

(8) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
clause (12), in the case of a shareholder of an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. The resulting delayed depreciation cannot be less than zero;

(9) job opportunity building zone income as provided under section 469.316;

(10) to the extent included in federal taxable income, the amount of compensation
paid to members of the Minnesota National Guard or other reserve components of the
United States military for active service, including compensation for services performed
under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
5b, and "active service" includes service performed in accordance with section 190.08,
subdivision 3;

(11) to the extent included in federal taxable income, the amount of compensation
paid to Minnesota residents who are members of the armed forces of the United States
or United Nations for active duty performed under United States Code, title 10; or the
authority of the United Nations;

(12) an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;

(13) deleted text begin in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the
case of a shareholder of a corporation that is an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. If the net operating loss exceeds the addition for the tax year,
a subtraction is not allowed under this clause deleted text end new text begin the section 179 expensing subtraction as
provided under section 290.0803, subdivision 3 new text end ;

(14) to the extent included in the federal taxable income of a nonresident of
Minnesota, compensation paid to a service member as defined in United States Code, title
10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
Act, Public Law 108-189, section 101(2);

(15) to the extent included in federal taxable income, the amount of national service
educational awards received from the National Service Trust under United States Code,
title 42, sections 12601 to 12604, for service in an approved Americorps National Service
program;

(16) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under subdivision 19a, clause (13);

(17) the amount of the net operating loss allowed under section 290.095, subdivision
11, paragraph (c);

(18) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code;

(19) the amount of the limitation on itemized deductions under section 68(b) of the
Internal Revenue Code;

(20) the amount of the phaseout of personal exemptions under section 151(d) of
the Internal Revenue Code; deleted text begin and
deleted text end

(21) to the extent included in federal taxable income, the amount of qualified
transportation fringe benefits described in section 132(f)(1)(A) and (B) of the Internal
Revenue Code. The subtraction is limited to the lesser of the amount of qualified
transportation fringe benefits received in excess of the limitations under section
132(f)(2)(A) of the Internal Revenue Code for the year or the difference between the
maximum qualified parking benefits excludable under section 132(f)(2)(B) of the Internal
Revenue Code minus the amount of transit benefits excludable under section 132(f)(2)(A)
of the Internal Revenue Code deleted text begin . deleted text end new text begin ;
new text end

new text begin (22) to the extent included in federal taxable income, an amount not to exceed $40
per employee per calendar month, provided that:
new text end

new text begin (i) for an individual, the subtraction equals the value of the use of an on-premises
fitness facility provided by an employer to the individual, or the value of any fees, dues, or
membership expenses paid by an employer on behalf of the individual to a fitness facility;
new text end

new text begin (ii) for an S corporation, sole proprietor, or partnership, the subtraction equals the
value of any fees, dues, or membership expenses paid on behalf of its employees to a
fitness facility;
new text end

new text begin (iii) the subtraction under this clause applies only if the use of on-premises fitness
facilities or the payment of fees, dues, or membership expenses to a fitness facility are
available on substantially the same terms to each member of a group of employees defined
under a reasonable classification by the employer, but no classification may include only
highly compensated employees, as defined under section 414(q) of the Internal Revenue
Code, or any other group that includes only executives, directors, or other managerial
employees;
new text end

new text begin (iv) the subtraction under this clause is only allowed to employers and employees for
months in which the employee uses the fitness facility for the preservation, maintenance,
encouragement, or development of physical fitness on at least eight days; and
new text end

new text begin (v) for purposes of this clause, "fitness facility" means a facility located in the state:
new text end

new text begin (A) that provides instruction in a program of physical exercise; offers facilities for
the preservation, maintenance, encouragement, or development of physical fitness; or is
the site of such a program of a state or local government;
new text end

new text begin (B) that is not a private club owned and operated by its members;
new text end

new text begin (C) that does not offer golf, hunting, sailing, or horseback riding facilities;
new text end

new text begin (D) whose fitness facility is not incidental to its overall function and purpose; and
new text end

new text begin (E) that is compliant with antidiscrimination laws under chapter 363A and applicable
federal antidiscrimination laws;
new text end

new text begin (23) to the extent not deducted in computing federal taxable income, the value of
charity health care services provided by a medical professional as defined under section
289A.12, subdivision 19, paragraph (b), clause (3), a dentist licensed under chapter
150A, or a chiropractor licensed under chapter 148, and acting within the scope of the
individual's license. For the purposes of this clause, the value of charity health care
services must be calculated at the applicable reimbursement rate provided under section
256B.76 for the medical professional, dentist, or chiropractor for services for which a
federal Medicaid match is available;
new text end

new text begin (24) for an individual who does not claim the credit under section 290.0677,
subdivision 1a, and receives compensation from a pension or other retirement pay from
the federal government for service in the military, as computed under United States Code,
title 10, sections 1401 to 1414, 1447 to 1455, or 12732 to 12733, $1,000 for each year or
portion of a year of military service, up to a maximum of 20 years of military service and
a maximum subtraction of $20,000. In the case of a married couple filing jointly, each
spouse is eligible for this subtraction. The subtraction under this clause is not limited to
the amount of compensation received from a pension or other retirement pay;
new text end

new text begin (25) to the extent included in federal taxable income, a percentage of Social Security
benefits. For purposes of this clause, for the taxable year beginning after December 31,
2014, and before January 1, 2016, the percentage is 20 percent, and the percentage
increases by 20 percentage points in each taxable year thereafter until the percentage of
Social Security benefits allowed as a subtraction under this clause is 100 percent;
new text end

new text begin (26) the amount equal to the contributions made during the taxable year to a college
savings plan account qualifying under section 529 of the Internal Revenue Code, not
including amounts rolled over from other college savings plan accounts, and not to exceed
$3,000 for married couples filing joint returns and $1,500 for all other filers. The subtraction
must not include any amount used to claim the credit allowed under section 290.0684;
new text end

new text begin (27) to the extent not deducted in determining federal taxable income, an amount
equal to contributions made to the Minnesota long-term care savings plan under section
16A.728, up to a maximum of $2,000 for married individuals filing joint returns and
$1,000 for any other individual, and any investment earnings made as a participant in the
Minnesota long-term care savings plan; and
new text end

new text begin (28) for an individual who is a first responder, an amount equal to the sum of:
new text end

new text begin (i) $7.50 per day of deemed meal expenses for two days in each week during the
taxable year that the eligible individual was on call for fewer than 21 hours; plus
new text end

new text begin (ii) $7.50 per day of deemed meal expenses for four days in each week during the
taxable year that the eligible individual was on call for 21 or more hours.
new text end

new text begin For purposes of this clause, "first responder" means an individual who meets the definition
of:
new text end

new text begin (A) ambulance service personnel in section 144E.001, subdivision 3a;
new text end

new text begin (B) an emergency medical responder in section 144E.001, subdivision 6;
new text end

new text begin (C) a volunteer ambulance attendant in section 144E.001, subdivision 15;
new text end

new text begin (D) a full-time firefighter in section 299N.03, subdivision 5; or
new text end

new text begin (E) a volunteer firefighter in section 299N.03, subdivision 7.
new text end

new text begin For the purposes of this clause, "on call" means required to respond to requests for
emergency medical services or fire help within the geographic area served by the ambulance
service or fire department of which the first responder is an employee or volunteer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014, except that clause (23) is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 12.

Minnesota Statutes 2014, section 290.01, subdivision 19d, is amended to read:

Subd. 19d.

Corporations; modifications decreasing federal taxable income.

For
corporations, there shall be subtracted from federal taxable income after the increases
provided in subdivision 19c:

(1) the amount of foreign dividend gross-up added to gross income for federal
income tax purposes under section 78 of the Internal Revenue Code;

(2) the amount of salary expense not allowed for federal income tax purposes due to
claiming the work opportunity credit under section 51 of the Internal Revenue Code;

(3) any dividend (not including any distribution in liquidation) paid within the
taxable year by a national or state bank to the United States, or to any instrumentality of
the United States exempt from federal income taxes, on the preferred stock of the bank
owned by the United States or the instrumentality;

(4) the deduction for capital losses pursuant to sections 1211 and 1212 of the
Internal Revenue Code, except that:

(i) for capital losses incurred in taxable years beginning after December 31, 1986,
capital loss carrybacks shall not be allowed;

(ii) for capital losses incurred in taxable years beginning after December 31, 1986,
a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
allowed;

(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
capital loss carryback to each of the three taxable years preceding the loss year, subject to
the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and

(iv) for capital losses incurred in taxable years beginning before January 1, 1987,
a capital loss carryover to each of the five taxable years succeeding the loss year to the
extent such loss was not used in a prior taxable year and subject to the provisions of
Minnesota Statutes 1986, section 290.16, shall be allowed;

(5) an amount for interest and expenses relating to income not taxable for federal
income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
291 of the Internal Revenue Code in computing federal taxable income;

(6) in the case of mines, oil and gas wells, other natural deposits, and timber for
which percentage depletion was disallowed pursuant to subdivision 19c, clause (8), a
reasonable allowance for depletion based on actual cost. In the case of leases the deduction
must be apportioned between the lessor and lessee in accordance with rules prescribed
by the commissioner. In the case of property held in trust, the allowable deduction must
be apportioned between the income beneficiaries and the trustee in accordance with the
pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
of the trust's income allocable to each;

(7) 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, an amount equal to the allowance for depreciation under Minnesota Statutes
1986, section 290.09, subdivision 7;

(8) amounts included in federal taxable income that are due to refunds of income,
excise, or franchise taxes based on net income or related minimum taxes paid by the
corporation to Minnesota, another state, a political subdivision of another state, the
District of Columbia, or a foreign country or possession of the United States to the extent
that the taxes were added to federal taxable income under subdivision 19c, clause (1), in a
prior taxable year;

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

(10) the amount of disability access expenditures in the taxable year which are not
allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;

(11) the amount of qualified research expenses not allowed for federal income tax
purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
the amount exceeds the amount of the credit allowed under section 290.068;

(12) the amount of salary expenses not allowed for federal income tax purposes due to
claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;

(13) any decrease 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 Division C, title III, section 303(b) of Public Law 110-343;

(14) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (12), an amount equal to one-fifth of
the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
amount of the addition made by the taxpayer under subdivision 19c, clause (12). The
resulting delayed depreciation cannot be less than zero;

(15) deleted text begin in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (13), an amount equal to one-fifth
of the amount of the addition deleted text end new text begin the section 179 expensing subtraction as provided under
section 290.0803, subdivision 3 new text end ;

(16) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under subdivision 19c, clause (16); deleted text begin and
deleted text end

(17) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code deleted text begin . deleted text end new text begin ; and
new text end

new text begin (18) to the extent included in federal taxable income, an amount equal to any fees,
dues, or membership expenses paid by an employer on behalf of each employee to a
fitness facility, as defined in subdivision 19b, clause (22), item (v), provided that:
new text end

new text begin (i) the subtraction under this clause shall not exceed $40 per employee per calendar
month;
new text end

new text begin (ii) the subtraction under this clause is only allowed to employers for months
in which the employee uses the fitness facility for the preservation, maintenance,
encouragement, or development of physical fitness on at least eight days; and
new text end

new text begin (iii) the subtraction under this clause applies only if the payment of fees, dues, or
membership expenses to a fitness facility are available on substantially the same terms
to each member of a group of employees defined under a reasonable classification by
the employer, but no classification may include only highly compensated employees,
as defined under section 414(q) of the Internal Revenue Code, or any other group that
includes only executives, directors, or other managerial employees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 13.

Minnesota Statutes 2014, section 290.01, subdivision 29, is amended to read:

Subd. 29.

Taxable income.

The term "taxable income" means:

(1) for individuals, estates, and trusts, the same as taxable net income;

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095 new text begin , excluding any amount
surrendered under section 116J.8739 new text end ;

(ii) the dividends received deduction under section 290.21, subdivision 4; and

(iii) the exemption for operating in a job opportunity building zone under section
469.317.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 14.

Minnesota Statutes 2014, section 290.01, subdivision 31, as amended by Laws
2015, chapter 1, section 3, is amended to read:

Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text begin December
31, 2014 deleted text end new text begin April 1, 2015 new text end . Internal Revenue Code also includes any uncodified provision in
federal law that relates to provisions of the Internal Revenue Code that are incorporated
into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
amended through March 18, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective retroactively at the same
time the changes were effective for federal purposes.
new text end

Sec. 15.

Minnesota Statutes 2014, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 37. new text end

new text begin Refund; technology corporate tax benefits certificate; appropriation.
new text end

new text begin (a) A corporation is allowed a refund equal to the amount of the qualifying tax benefits
certified to the corporation for the taxable year by the commissioner of employment and
economic development under section 116J.8739.
new text end

new text begin (b) An amount sufficient to pay the refunds under this subdivision is appropriated to
the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015, provided that no refunds may be paid under this section before July
1, 2016.
new text end

Sec. 16.

new text begin [290.0661] STATE TAX CREDIT FOR MNSURE PREMIUM
PAYMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following definitions
apply.
new text end

new text begin (b) "MNsure" means the insurance exchange established under chapter 62V.
new text end

new text begin (c) "Federal poverty guidelines" means the federal poverty guidelines published by
the United States Department of Health and Human Services that apply to calculate the
individual's premium support credit under section 36B of the Internal Revenue Code
for the taxable year.
new text end

new text begin (d) "Qualified individual" means a resident individual applying for, or enrolled in,
qualified health plan coverage through MNsure with:
new text end

new text begin (1) an income greater than 133 percent but not exceeding 200 percent of the federal
poverty guidelines; or
new text end

new text begin (2) an income equal to or less than 133 percent of the federal poverty guidelines, if
the applicant or enrollee would have been eligible for MinnesotaCare coverage under the
eligibility criteria specified in Minnesota Statutes 2014, chapter 256L.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed; payment to health carrier. new text end

new text begin (a) A qualified individual is
allowed a credit against the tax due under this chapter equal to the amount determined
under subdivision 3.
new text end

new text begin (b) For a part-year resident, the credit must be allocated based on the percentage
calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin (c) A qualified individual receiving a premium advance under section 62V.05,
subdivision 5, paragraph (j), must pay to the health carrier the full amount of the premium
advance by April 15 of the year following the coverage year for which the premium
advance was provided.
new text end

new text begin Subd. 3. new text end

new text begin Calculation of credit amount. new text end

new text begin The commissioner, in consultation with the
commissioner of human services and the MNsure board, shall provide qualified individuals
with tax credits that reduce the cost of MNsure household premiums for qualified health
plans by specified dollar amounts. The dollar amount of the tax credit must equal the base
premium reduction amount, adjusted for household size. The commissioner shall establish
separate base premium reduction amounts, based on a sliding scale, for:
new text end

new text begin (1) households with incomes not exceeding 150 percent of the federal poverty
guidelines; and
new text end

new text begin (2) households with incomes greater than 150 percent but not exceeding 200 percent
of the federal poverty guidelines.
new text end

new text begin The commissioner, in developing the tax credit methodology and the base premium
reduction amounts, shall ensure that aggregate tax credits provided under this section do
not exceed $50,000,000 per taxable year.
new text end

new text begin Subd. 4. new text end

new text begin Credit refundable; appropriation. new text end

new text begin (a) If the credit allowed under this
section exceeds the individual's liability under this chapter, the commissioner shall refund
the excess to the taxpayer.
new text end

new text begin (b) An amount sufficient to pay the credits required by this section is appropriated
from the general fund to the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Payment in advance. new text end

new text begin The commissioner of human services shall seek
all federal approvals and waivers necessary to pay the tax credit established under this
section on a monthly basis, in advance, to the health carrier providing qualified health
plan coverage to the qualified individual without affecting the amount of the qualified
individual's federal premium support credit. If the necessary federal approvals and
waivers are obtained, the commissioner of human services shall submit to the legislature
any legislative changes necessary to implement advanced payment of tax credits, and
the MNsure board shall require health carriers to reduce premiums charged to qualified
individuals by the amount of the applicable tax credit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 17.

Minnesota Statutes 2014, section 290.067, subdivision 1, is amended to read:

Subdivision 1.

Amount of credit.

(a) A taxpayer may take as a credit against the
tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of
section 21 of the Internal Revenue Code deleted text begin subject to the limitations provided in subdivision
2 deleted text end except that in determining whether the child qualified as a dependent, income received
as a Minnesota family investment program grant or allowance to or on behalf of the child
must not be taken into account in determining whether the child received more than half
of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of
the Internal Revenue Code do not apply.

(b) If a child who has not attained the age of six years at the close of the taxable year
is cared for at a licensed family day care home operated by the child's parent, the taxpayer
is deemed to have paid employment-related expenses. If the child is 16 months old or
younger at the close of the taxable year, the amount of expenses deemed to have been paid
equals the maximum limit for one qualified individual under section 21(c) and (d) of the
Internal Revenue Code. If the child is older than 16 months of age but has not attained the
age of six years at the close of the taxable year, the amount of expenses deemed to have
been paid equals the amount the licensee would charge for the care of a child of the same
age for the same number of hours of care.

(c) If a married couple:

(1) has a child who has not attained the age of one year at the close of the taxable year;

(2) files a joint tax return for the taxable year; and

(3) does not participate in a dependent care assistance program as defined in section
129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
one qualified individual under section 21(c) and (d) of the Internal Revenue Code will
be deemed to be the employment related expense paid for that child. The earned income
limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any employment-related
expenses have been paid.

(d) If the taxpayer is not required and does not file a federal individual income tax
return for the tax year, no credit is allowed for any amount paid to any person unless:

(1) the name, address, and taxpayer identification number of the person are included
on the return claiming the credit; or

(2) if the person is an organization described in section 501(c)(3) of the Internal
Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code,
the name and address of the person are included on the return claiming the credit.

In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due
diligence in attempting to provide the information required.

(e) In the case of a nonresident, part-year resident, or a person who has earned
income not subject to tax under this chapter including earned income excluded pursuant to
section 290.01, subdivision 19b, clause (9), the credit determined under section 21 of the
Internal Revenue Code must be allocated based on the ratio by which the earned income
of the claimant and the claimant's spouse from Minnesota sources bears to the total earned
income of the claimant and the claimant's spouse.

(f) For residents of Minnesota, the subtractions for military pay under section
290.01, subdivision 19b, clauses (10) and (11), are not considered "earned income not
subject to tax under this chapter."

(g) For residents of Minnesota, the exclusion of combat pay under section 112 of
the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."

new text begin (h) For taxpayers with federal adjusted gross income in excess of $44,000, the credit
is equal to the lesser of the credit otherwise calculated under this subdivision or the amount
equal to $600 minus five percent of federal adjusted gross income in excess of $44,000 for
taxpayers with one qualified individual or $1,200 minus five percent of federal adjusted
gross income in excess of $44,000 for taxpayers with two or more qualified individuals,
but in no case is the credit less than zero. For purposes of this paragraph, "federal adjusted
gross income" has the meaning given in section 62 of the Internal Revenue Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 18.

Minnesota Statutes 2014, section 290.0671, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

(a) An individual new text begin who is a resident of Minnesota new text end is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code.

(b) For individuals with no qualifying children, the credit equals 2.10 percent of the
first $6,180 of earned income. The credit is reduced by 2.01 percent of earned income
or adjusted gross income, whichever is greater, in excess of $8,130, but in no case is
the credit less than zero.

(c) For individuals with one qualifying child, the credit equals 9.35 percent of the
first $11,120 of earned income. The credit is reduced by 6.02 percent of earned income
or adjusted gross income, whichever is greater, in excess of $21,190, but in no case is
the credit less than zero.

(d) For individuals with two or more qualifying children, the credit equals 11 percent
of the first $18,240 of earned income. The credit is reduced by 10.82 percent of earned
income or adjusted gross income, whichever is greater, in excess of $25,130, but in no
case is the credit less than zero.

(e) For a deleted text begin nonresident or deleted text end part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).

(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.01,
subdivision 19b, clause (9), the credit must be allocated based on the ratio of federal
adjusted gross income reduced by the earned income not subject to tax under this chapter
over federal adjusted gross income. For purposes of this paragraph, the subtractions
for military pay under section 290.01, subdivision 19b, clauses (10) and (11), are not
considered "earned income not subject to tax under this chapter."

For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."

(g) For tax years beginning after December 31, 2007, and before December 31,
2010, and for tax years beginning after December 31, 2017, the $8,130 in paragraph (b),
the $21,190 in paragraph (c), and the $25,130 in paragraph (d), after being adjusted for
inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint
returns. For tax years beginning after December 31, 2008, the commissioner shall annually
adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f)
of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be
substituted for the word "1992." For 2009, the commissioner shall then determine the
percent change from the 12 months ending on August 31, 2007, to the 12 months ending on
August 31, 2008, and in each subsequent year, from the 12 months ending on August 31,
2007, to the 12 months ending on August 31 of the year preceding the taxable year. The
earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.

(h)(1) For tax years beginning after December 31, 2012, and before January 1, 2014,
the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph (d),
after being adjusted for inflation under subdivision 7, are increased by $5,340 for married
taxpayers filing joint returns; and (2) for tax years beginning after December 31, 2013, and
before January 1, 2018, the $8,130 in paragraph (b), the $21,190 in paragraph (c), and the
$25,130 in paragraph (d), after being adjusted for inflation under subdivision 7, are each
increased by $5,000 for married taxpayers filing joint returns. For tax years beginning
after December 31, 2010, and before January 1, 2012, and for tax years beginning after
December 31, 2013, and before January 1, 2018, the commissioner shall annually adjust
the $5,000 by the percentage determined pursuant to the provisions of section 1(f) of
the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be
substituted for the word "1992." For 2011, the commissioner shall then determine the
percent change from the 12 months ending on August 31, 2008, to the 12 months ending on
August 31, 2010, and in each subsequent year, from the 12 months ending on August 31,
2008, to the 12 months ending on August 31 of the year preceding the taxable year. The
earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.

(i) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 19.

Minnesota Statutes 2014, section 290.0671, subdivision 6a, is amended to read:

Subd. 6a.

TANF appropriation for working family credit expansion.

(a) On
an annual basis the commissioner of revenue, with the assistance of the commissioner
of human services, shall calculate the value of the refundable portion of the Minnesota
Working Family Credit provided under this section that qualifies for payment with funds
from the federal Temporary Assistance for Needy Families (TANF) block grant. Of this
total amount, the commissioner of revenue shall estimate the portion entailed by the
expansion of the credit rates new text begin provided in Laws 2000, chapter 490, article 4, section 17,
new text end for individuals with qualifying children over the rates provided in Laws 1999, chapter
243, article 2, section 12.

(b) An amount sufficient to pay the refunds entailed by the expansion of the credit
rates new text begin provided in Laws 2000, chapter 490, article 4, section 17, new text end for individuals with
qualifying children over the rates provided in Laws 1999, chapter 243, article 2, section
12, as estimated in paragraph (a), is appropriated to the commissioner of human services
from the federal Temporary Assistance for Needy Families (TANF) block grant funds, for
transfer to the commissioner of revenue for deposit in the general fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for transfers in fiscal
year 2015 and thereafter.
new text end

Sec. 20.

Minnesota Statutes 2014, section 290.0672, subdivision 2, is amended to read:

Subd. 2.

Credit.

A taxpayer is allowed a credit against the tax imposed by this
chapter for long-term care insurance policy premiums paid during the tax year. The credit
for each policy equals deleted text begin 25 deleted text end new text begin 50 new text end percent of premiums paid to the extent not deducted in
determining federal taxable income. A taxpayer may claim a credit for only one policy for
each qualified beneficiary. A maximum of deleted text begin $100 deleted text end new text begin $150 new text end applies to each qualified beneficiary.
The maximum total credit allowed per year is deleted text begin $200 deleted text end new text begin $300 new text end for married couples filing joint
returns and deleted text begin $100 deleted text end new text begin $150 new text end for all other filers. For a nonresident or part-year resident, the credit
determined under this section must be allocated based on the percentage calculated under
section 290.06, subdivision 2c, paragraph (e).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 21.

Minnesota Statutes 2014, section 290.0674, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

An individual is allowed a credit against the
tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
education-related expenses for a qualifying child in new text begin a prekindergarten educational program
or in new text end kindergarten through grade 12. For purposes of this section, "education-related
expenses" means:

(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision
10, clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers
Association, and who is not a lineal ancestor or sibling of the dependent for instruction
outside the regular school day or school year, including tutoring, driver's education
offered as part of school curriculum, regardless of whether it is taken from a public or
private entity or summer camps, in grade or age appropriate curricula that supplement
curricula and instruction available during the regular school year, that assists a dependent
to improve knowledge of core curriculum areas or to expand knowledge and skills under
the required academic standards under section 120B.021, subdivision 1, and the elective
standard under section 120B.022, subdivision 1, clause (2), and that do not include the
teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship;

new text begin (2) fees for enrollment in a prekindergarten educational program to the extent not
used to claim the credit under section 290.067;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end expenses for textbooks, including books and other instructional materials and
equipment purchased or leased for use in elementary and secondary schools in teaching
only those subjects legally and commonly taught in public elementary and secondary
schools in this state. "Textbooks" does not include instructional books and materials
used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
to instill such tenets, doctrines, or worship, nor does it include books or materials for
extracurricular activities including sporting events, musical or dramatic events, speech
activities, driver's education, or similar programs;

deleted text begin (3) deleted text end new text begin (4) new text end a maximum expense of $200 per family for personal computer hardware,
excluding single purpose processors, and educational software that assists a dependent to
improve knowledge of core curriculum areas or to expand knowledge and skills under
the required academic standards under section 120B.021, subdivision 1, and the elective
standard under section 120B.022, subdivision 1, clause (2), purchased for use in the
taxpayer's home and not used in a trade or business regardless of whether the computer is
required by the dependent's school; and

deleted text begin (4) deleted text end new text begin (5) new text end the amount paid to others for new text begin tuition and new text end transportation of a qualifying child
attending an elementary or secondary school situated in Minnesota, North Dakota, South
Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's
compulsory attendance laws, which is not operated for profit, and which adheres to the
provisions of the Civil Rights Act of 1964 and chapter 363A. new text begin Amounts paid to others for
transportation do not include any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide transportation for a qualifying child.
new text end

For purposes of this section, "qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code.

new text begin As used in this section, "prekindergarten educational program" means:
new text end

new text begin (i) prekindergarten programs established by a school district under chapter 124D;
new text end

new text begin (ii) preschools, nursery schools, and early childhood development programs licensed
by the Department of Human Services and eligible for the provider rate differential for
accreditation under section 119B.13, subdivision 3a;
new text end

new text begin (iii) Montessori programs affiliated with or accredited by the American Montessori
Society or American Montessori International;
new text end

new text begin (iv) child care programs provided by family day care providers holding a current early
childhood development credential approved by the commissioner of human services; and
new text end

new text begin (v) a prekindergarten program that participates in the quality rating and improvement
system under section 124D.142.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 22.

Minnesota Statutes 2014, section 290.0674, subdivision 2, is amended to read:

Subd. 2.

Limitations.

(a) For claimants with income not greater than deleted text begin $33,500
deleted text end new text begin $47,500 new text end , the maximum credit allowed for a family is deleted text begin $1,000 deleted text end new text begin $1,500 new text end multiplied by the
number of qualifying children in deleted text begin kindergarten deleted text end new text begin a prekindergarten educational program
new text end through grade 12 in the family. The maximum credit for families with one qualifying
child in deleted text begin kindergarten deleted text end new text begin a prekindergarten educational program new text end through grade 12 is reduced
by $1 for each deleted text begin $4 deleted text end new text begin $6 new text end of household income over deleted text begin $33,500 deleted text end new text begin $47,500 new text end , and the maximum
credit for families with two or more qualifying children in deleted text begin kindergarten deleted text end new text begin a prekindergarten
educational program new text end through grade 12 is reduced by deleted text begin $2 deleted text end new text begin $1 new text end for each deleted text begin $4 deleted text end new text begin $3 new text end of household
income over deleted text begin $33,500 deleted text end new text begin $47,500 new text end , but in no case is the credit less than zero.

deleted text begin For purposes of this section "income" has the meaning given in section 290.067,
subdivision 2a. deleted text end In the case of a married claimant, a credit is not allowed unless a joint
income tax return is filed.

(b) For a nonresident or part-year resident, the credit determined under subdivision 1
and the maximum credit amount in paragraph (a) must be allocated using the percentage
calculated in section 290.06, subdivision 2c, paragraph (e).

new text begin (c) For purposes of this section, "income" means the sum of the following:
new text end

new text begin (1) federal adjusted gross income as defined in section 62 of the Internal Revenue
Code; and
new text end

new text begin (2) the sum of the following amounts to the extent not included in clause (1):
new text end

new text begin (i) all nontaxable income;
new text end

new text begin (ii) the amount of a passive activity loss that is not disallowed as a result of section
469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal Revenue Code;
new text end

new text begin (iii) an amount equal to the total of any discharge of qualified farm indebtedness
of a solvent individual excluded from gross income under section 108(g) of the Internal
Revenue Code;
new text end

new text begin (iv) cash public assistance and relief;
new text end

new text begin (v) any pension or annuity (including railroad retirement benefits, all payments
received under the federal Social Security Act, Supplemental Security Income, and
veterans benefits), which was not exclusively funded by the claimant or spouse, or which
was funded exclusively by the claimant or spouse and which funding payments were
excluded from federal adjusted gross income in the years when the payments were made;
new text end

new text begin (vi) interest received from the federal or a state government or any instrumentality
or political subdivision thereof;
new text end

new text begin (vii) workers' compensation;
new text end

new text begin (viii) nontaxable strike benefits;
new text end

new text begin (ix) the gross amounts of payments received in the nature of disability income or
sick pay as a result of accident, sickness, or other disability, whether funded through
insurance or otherwise;
new text end

new text begin (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;
new text end

new text begin (xi) contributions made by the claimant to an individual retirement account,
including a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
of the Internal Revenue Code; or deferred compensation plan under section 457 of the
Internal Revenue Code;
new text end

new text begin (xii) nontaxable scholarship or fellowship grants;
new text end

new text begin (xiii) the amount of deduction allowed under section 199 of the Internal Revenue
Code;
new text end

new text begin (xiv) the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code;
new text end

new text begin (xv) the amount deducted for tuition expenses under section 222 of the Internal
Revenue Code; and
new text end

new text begin (xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code.
new text end

new text begin In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" means federal adjusted gross income reflected in the
fiscal year ending in the next calendar year. Federal adjusted gross income may not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.
new text end

new text begin (d) "Income" does not include:
new text end

new text begin (1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
new text end

new text begin (2) amounts of any pension or annuity that were exclusively funded by the claimant
or spouse if the funding payments were not excluded from federal adjusted gross income
in the years when the payments were made;
new text end

new text begin (3) surplus food or other relief in kind supplied by a governmental agency;
new text end

new text begin (4) relief granted under chapter 290A;
new text end

new text begin (5) child support payments received under a temporary or final decree of dissolution
or legal separation; and
new text end

new text begin (6) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
2001, Public Law 107-16.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 23.

Minnesota Statutes 2014, section 290.0674, is amended by adding a
subdivision to read:

new text begin Subd. 6. new text end

new text begin Inflation adjustment. new text end

new text begin The credit amount and the income threshold at
which the maximum credit begins to be reduced in subdivision 2 must be adjusted for
inflation. The commissioner shall adjust the credit amount and income threshold by the
percentage determined under the provisions of section 1(f) of the Internal Revenue Code,
except that in section 1(f)(3)(B) the word "2014" is substituted for the word "1992." For
2016, the commissioner shall then determine the percent change from the 12 months
ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in each
subsequent year, from the 12 months ending August 31, 2014, to the 12 months ending on
August 31 of the year preceding the taxable year. The credit amount and income threshold,
as adjusted for inflation, must be rounded to the nearest $10 amount. If the amount ends
in $5, the amount is rounded up to the nearest $10 amount. The determination of the
commissioner under this subdivision is not a rule subject to the Administrative Procedure
Act in chapter 14, including section 14.386.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 24.

Minnesota Statutes 2014, section 290.0677, subdivision 2, is amended to read:

Subd. 2.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Designated area" means a:

(1) combat zone designated by Executive Order from the President of the United
States;

(2) qualified hazardous duty area, designated in Public Law; or

(3) location certified by the U. S. Department of Defense as eligible for combat zone
tax benefits due to the location's direct support of military operations.

(c) "Active military service" means active duty service in any of the United States
armed forces, the National Guard, or reserves.

(d) "Qualified individual" means an individual who has:

(1) met one of the following criteria:

(i) has served at least 20 years in the military;

(ii) has a service-connected disability rating of 100 percent for a total and permanent
disability; or

(iii) has been determined by the military to be eligible for compensation from a
pension or other retirement pay from the federal government for service in the military,
as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455,
or 12733; deleted text begin and
deleted text end

(2) separated from military service before the end of the taxable year new text begin ; and
new text end

new text begin (3) has not claimed the subtraction under section 290.01, subdivision 19b, clause (24) new text end .

(e) "Adjusted gross income" has the meaning given in section 61 of the Internal
Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 25.

Minnesota Statutes 2014, section 290.068, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

new text begin Subject to the requirements in subdivision 8, new text end a
corporation, deleted text begin partners in a partnership, or shareholders in a corporation treated as an "S"
corporation under section 290.9725 are deleted text end new text begin individual, trust, or estate is new text end allowed a credit
against the tax computed under this chapter for the taxable year equal to:

(a) ten percent of the first $2,000,000 of the excess (if any) of

(1) the qualified research expenses for the taxable year, over

(2) the base amount; and

(b) deleted text begin 2.5 deleted text end new text begin four new text end percent on all of such excess expenses over $2,000,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 26.

Minnesota Statutes 2014, section 290.068, subdivision 3, is amended to read:

Subd. 3.

Limitation; carryover.

(a) new text begin Except as provided in subdivision 6a,
paragraph (b), new text end the credit deleted text begin for a taxable year beginning before January 1, 2010, and after
December 31, 2012, deleted text end shall not exceed the liability for tax. "Liability for tax" for purposes
of this section means the sum of the tax imposed under section 290.06, subdivisions 1 and
2c, for the taxable year reduced by the sum of the nonrefundable credits allowed under
this chapter, on all of the entities required to be included on the combined report of the
unitary business. If the amount of the credit allowed exceeds the liability for tax of the
taxpayer, but is allowed as a result of the liability for tax of other members of the unitary
group for the taxable year, the taxpayer must allocate the excess as a research credit
to another member of the unitary group.

(b) In the case of a corporation which is a partner in a partnership, the credit allowed
for the taxable year shall not exceed the lesser of the amount determined under paragraph
(a) for the taxable year or an amount (separately computed with respect to the corporation's
interest in the trade or business or entity) equal to the amount of tax attributable to that
portion of taxable income which is allocable or apportionable to the corporation's interest
in the trade or business or entity.

(c) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under paragraph (a) or (b), including amounts new text begin allowed as a refund
under subdivision 6a, paragraph (b), or new text end allocated to other members of the unitary group,
the excess shall be a research credit carryover to each of the 15 succeeding taxable years.
The entire amount of the excess unused credit for the taxable year shall be carried first
to the earliest of the taxable years to which the credit may be carried and then to each
successive year to which the credit may be carried. The amount of the unused credit
which may be added under this clause shall not exceed the taxpayer's liability for tax
less the research credit for the taxable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 27.

Minnesota Statutes 2014, section 290.068, subdivision 6a, is amended to read:

Subd. 6a.

Credit to be refundable.

new text begin (a) new text end If the amount of credit allowed in this
section for qualified research expenses incurred in taxable years beginning after December
31, 2009, and before January 1, 2013, exceeds the taxpayer's deleted text begin tax deleted text end liability new text begin for tax new text end under this
chapter, the commissioner shall refund the excess amount. The credit allowed for qualified
research expenses incurred in taxable years beginning after December 31, 2009, and before
January 1, 2013, must be used before any research credit earned under subdivision 3.

new text begin (b) If the first $200,000 of the credit allowed in this section for qualified research
expenses incurred in taxable years beginning after December 31, 2014, exceeds the
taxpayer's liability for tax under this chapter, the commissioner shall refund the excess
amount. The $200,000 limit must be applied at the corporation, partnership, or other
entity level. The credit allowed for qualified research expenses incurred in taxable
years beginning before January 1, 2015, must be used before any research credit under
subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 28.

Minnesota Statutes 2014, section 290.068, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Applications; certification. new text end

new text begin (a) A taxpayer claiming a credit under this
section must apply to the commissioner of employment and economic development for
a determination that the expenses for which the credit is claimed are qualified research
expenses. The application must be submitted by September 15 of the calendar year
following the end of the taxable year in which the qualified research expenses were
incurred. The application must be in a form and manner prescribed by the commissioner
of employment and economic development, in consultation with the commissioner, and
must contain information sufficient to verify that the expenses for which the credit is
claimed under this section are qualified research expenses.
new text end

new text begin (b) The commissioner of employment and economic development must notify the
taxpayer of the determination of the application under paragraph (a) no later than 90 days
after the application is received.
new text end

new text begin (c) Upon approving an application for credit under paragraph (a), the commissioner
of employment and economic development must issue a credit certificate to the taxpayer
that verifies eligibility for the credit and states the amount of credit and the taxable year to
which the credit applies. The commissioner of employment and economic development
must notify the commissioner of the issuance of the credit certificate, the amount of the
credit, and the taxable year to which the credit applies.
new text end

new text begin (d) The taxpayer claiming the credit under this section must file an amended return
for the taxable year to which the credit applies. The return must contain a copy of the
credit certificate issued under paragraph (c).
new text end

new text begin (e) A credit must not be issued under this section unless the commissioner has
received the certification required under paragraph (c).
new text end

new text begin (f) For purposes of this subdivision, "taxpayer" excludes:
new text end

new text begin (1) a corporation subject to tax under section 290.06, subdivision 1; and
new text end

new text begin (2) an individual claiming a credit for qualified research expenditures of an S
corporation or partnership.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 29.

new text begin [290.0682] CREDIT FOR ATTAINING MASTER'S DEGREE IN
TEACHER'S LICENSURE FIELD.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following terms
have the meanings given them.
new text end

new text begin (b) "Master's degree program" means a graduate level program at an accredited
university leading to a master of arts or science degree in a core content area directly
related to a qualified teacher's licensure field. The master's degree program may not
include pedagogy or a pedagogy component. To be eligible under this credit, a licensed
elementary school teacher must pursue and complete a master's degree program in a core
content area in which the teacher provides direct classroom instruction.
new text end

new text begin (c) "Qualified teacher" means a K-12 teacher who:
new text end

new text begin (1) currently holds a continuing license granted by the Minnesota Board of Teaching;
new text end

new text begin (2) began a master's degree program after June 30, 2015; and
new text end

new text begin (3) completes the master's degree program during the taxable year.
new text end

new text begin (d) "Core content area" means the academic subject of reading, English or language
arts, mathematics, science, foreign languages, civics and government, economics, arts,
history, or geography.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual who is a qualified teacher is allowed a
credit against the tax imposed under this chapter. The credit equals $2,500.
new text end

new text begin (b) For a nonresident or a part-year resident, the credit under this subdivision
must be allocated based on the percentage calculated under section 290.06, subdivision
2c, paragraph (e).
new text end

new text begin (c) A qualified teacher may claim the credit in this section only one time for each
master's degree program completed in a core content area.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin (a) If the amount of the credit for which an individual
is eligible exceeds the individual's liability for tax under this chapter, the commissioner
shall refund the excess to the individual.
new text end

new text begin (b) The amount necessary to pay the refunds required by this section is appropriated
to the commissioner from the general fund.
new text end

new text begin Subd. 4. new text end

new text begin Delayed payment of 2015 and 2016 credits. new text end

new text begin For master's degree
programs completed in taxable years beginning after December 31, 2014, and before
January 1, 2017, the individual may claim the corresponding credit in the taxable year
beginning after December 31, 2016, and before January 1, 2018, but not earlier. Credits
claimed for taxable years beginning after December 31, 2014, and before January 1, 2017,
are in addition to any credit allowed for the taxable year beginning after December 31,
2016, and before January 1, 2018.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 30.

new text begin [290.0683] STUDENT LOAN CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given.
new text end

new text begin (b) "Adjusted gross income" means federal adjusted gross income as defined in
section 62 of the Internal Revenue Code.
new text end

new text begin (c) "Earned income" has the meaning given in section 32(c) of the Internal Revenue
Code.
new text end

new text begin (d) "Eligible individual" means a resident individual with one or more qualified
education loans related to an undergraduate or graduate degree program at a postsecondary
educational institution.
new text end

new text begin (e) "Eligible loan payments" means the amount the eligible individual paid during
the taxable year to pay principal and interest on qualified education loans.
new text end

new text begin (f) "Postsecondary educational institution" means a postsecondary institution eligible
for state student aid under section 136A.103 or, if the institution is not located in this state,
a postsecondary institution participating in the federal Pell Grant program under Title IV
of the Higher Education Act of 1965, Public Law 89-329, as amended.
new text end

new text begin (g) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual
or the eligible individual's spouse.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An eligible individual is allowed a credit against the
tax due under this chapter.
new text end

new text begin (b) The credit for an eligible individual equals the least of:
new text end

new text begin (1) eligible loan payments minus ten percent of an amount equal to adjusted gross
income in excess of $10,000, but in no case less than zero;
new text end

new text begin (2) the earned income for the taxable year of the eligible individual and spouse,
if any; or
new text end

new text begin (3) the sum of:
new text end

new text begin (i) the interest portion of eligible loan payments made during the taxable year; and
new text end

new text begin (ii) ten percent of the original loan amount of all qualified education loans of the
eligible individual and the eligible individual's spouse.
new text end

new text begin (c) For a part-year resident, the credit must be allocated based on the percentage
calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit that an individual is eligible
to receive under this section exceeds the individual's tax liability under this chapter, the
commissioner shall refund the excess to the individual.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 31.

new text begin [290.0684] SECTION 529 COLLEGE SAVINGS PLAN CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the term "federal adjusted
gross income" has the meaning given under section 62(a) of the Internal Revenue Code,
and "nonqualified distribution" means any distribution that is includible in gross income
under section 529 of the Internal Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) A credit of up to $500 is allowed to a resident individual
against the tax imposed by this chapter, subject to the limitations in paragraph (b).
new text end

new text begin (b) The credit allowed must be calculated by applying the following rates to the
amount contributed to a college savings plan account qualifying under section 529 of the
Internal Revenue Code, in a taxable year:
new text end

new text begin (1) 50 percent for individual filers and married couples filing a joint return who have
federal adjusted gross income of less than $80,000;
new text end

new text begin (2) 25 percent for married couples filing a joint return who have federal adjusted
gross income over $80,000, but not more than $100,000;
new text end

new text begin (3) ten percent for married couples filing a joint return who have federal adjusted
gross income over $100,000, but not more than $120,000; and
new text end

new text begin (4) five percent for married couples filing a joint return who have federal adjusted
gross income over $120,000, but not more than $160,000.
new text end

new text begin (c) The income thresholds in paragraph (b), clauses (1) to (4), used to calculate the
credit, must be adjusted for inflation. The commissioner shall adjust by the percentage
determined under the provisions of section 1(f) of the Internal Revenue Code, except that
in section 1(f)(3)(B) the word "2014" is substituted for the word "1992." For 2016, the
commissioner shall then determine the percent change from the 12 months ending on
August 31, 2014, to the 12 months ending on August 31, 2015, and in each subsequent
year, from the 12 months ending on August 31, 2014, to the 12 months ending on August
31 of the year preceding the taxable year. The income thresholds as adjusted for inflation
must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is
rounded up to the nearest $10 amount. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act including section 14.386.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit that an individual is eligible
to receive under this section exceeds the individual's tax liability under this chapter, the
commissioner shall refund the excess to the individual.
new text end

new text begin Subd. 4. new text end

new text begin Allocation. new text end

new text begin For a part-year resident, the credit must be allocated based on
the percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 5. new text end

new text begin Recapture of credit. new text end

new text begin In the case of a nonqualified distribution, the
taxpayer is liable to the commissioner for the lesser of: ten percent of the amount of the
nonqualified distribution, or the sum of credits received under this section for all years.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 32.

new text begin [290.0803] SECTION 179 EXPENSING SUBTRACTION.
new text end

new text begin Subdivision 1. new text end

new text begin Current year allowance. new text end

new text begin (a) In each of the five tax years
immediately following the tax year in which an addition is required under section 290.01,
subdivision 19a, clause (8), or 19c, clause (13), the current year allowance equals one-fifth
of the addition made by the taxpayer under section 290.01, subdivision 19a, clause (8),
or 19c, clause (13).
new text end

new text begin (b) In the case of a shareholder of a corporation that is an S corporation, the current
year allowance is reduced by the positive value of any net operating loss under section
172 of the Internal Revenue Code generated for the tax year of the addition and, if the net
operating loss exceeds the addition for the tax year, the current year allowance is zero.
new text end

new text begin Subd. 2. new text end

new text begin Section 179 expensing carryover. new text end

new text begin For purposes of this section, the current
year allowance determined under subdivision 1 is considered to be the last subtraction
allowed in determining taxable income. If the amount allowed under subdivision 1
exceeds taxable income, then the excess is a section 179 expensing carryover to each
of the ten succeeding taxable years. The entire amount of the section 179 expensing
carryover is carried first to the earliest taxable year to which the section 179 expensing
carryover may be carried and then to each successive year to which the section 179
expensing carryover may be carried.
new text end

new text begin Subd. 3. new text end

new text begin Section 179 expensing subtraction. new text end

new text begin A taxpayer is allowed a section 179
expensing subtraction from federal taxable income. The subtraction equals the sum of:
new text end

new text begin (1) the current year allowance determined under subdivision 1; and
new text end

new text begin (2) any section 179 expensing carryover from prior taxable years determined under
subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 33.

Minnesota Statutes 2014, section 290.081, is amended to read:

290.081 INCOME OF NONRESIDENTS, RECIPROCITY.

(a) The compensation received for the performance of personal or professional
services within this state by an individual whose residence, place of abode, and place
customarily returned to at least once a month is in another state, shall be excluded from
gross income to the extent such compensation is subject to an income tax imposed by the
state of residence; provided that such state allows a similar exclusion of compensation
received by residents of Minnesota for services performed therein.

(b) When it is deemed to be in the best interests of the people of this state, the
commissioner may determine that the provisions of paragraph (a) shall not apply. As long
as the provisions of paragraph (a) apply between Minnesota and Wisconsin, the provisions
of paragraph (a) shall apply to any individual who is domiciled in Wisconsin.

(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota
residents which would have been paid Wisconsin without paragraph (a) exceeds the
Minnesota tax on Wisconsin residents which would have been paid Minnesota without
paragraph (a), or vice versa, then the state with the net revenue loss resulting from
paragraph (a) shall receive from the other state the amount of such loss. This provision
shall be effective for all years beginning after December 31, 1972. The data used for
computing the loss to either state shall be determined on or before September 30 of the
year following the close of the previous calendar year.

(d)(1) Interest is payable on all amounts calculated under paragraph (c) relating
to taxable years beginning after December 31, 2000. Interest accrues from July 1 of
the taxable year.

(2) The commissioner of revenue is authorized to enter into agreements with the
state of Wisconsin specifying the reciprocity payment due dates, conditions constituting
delinquency, interest rates, and a method for computing interest due new text begin , if the taxing official
of the state of Wisconsin agrees to terms consistent with clause (3) new text end .

deleted text begin (3) For agreements entered into before October 1, 2014, the annual compensation
required under paragraph (c) must equal at least the net revenue loss minus $1,000,000
per fiscal year.
deleted text end

deleted text begin (4) For agreements entered into after September 30, 2014, deleted text end new text begin (3) new text end The annual
compensation required under paragraph (c) must equal the net revenue loss per fiscal year.

deleted text begin (5) deleted text end For the purposes of deleted text begin clauses (3) and (4) deleted text end new text begin this clause new text end , "net revenue loss" means
the difference between new text begin :
new text end

new text begin (i) new text end the amount of Minnesota income taxes Minnesota forgoes by not taxing
Wisconsin residents on income subject to reciprocity new text begin less the cost of providing refundable
credits in excess of liability under this chapter to Wisconsin residents; new text end and

new text begin (ii) new text end the deleted text begin credit Minnesota would have been required to give under section 290.06,
subdivision 22, to Minnesota residents working in Wisconsin had there not been
reciprocity deleted text end new text begin amount of Wisconsin income taxes Wisconsin forgoes by not taxing Minnesota
residents on income subject to reciprocity new text end .

(e) If an agreement cannot be reached as to the amount of the loss, the commissioner
of revenue and the taxing official of the state of Wisconsin shall each appoint a member
of a board of arbitration and these members shall appoint the third member of the board.
The board shall select one of its members as chair. Such board may administer oaths, take
testimony, subpoena witnesses, and require their attendance, require the production of
books, papers and documents, and hold hearings at such places as are deemed necessary.
The board shall then make a determination as to the amount to be paid the other state
which determination shall be final and conclusive.

(f) The commissioner may furnish copies of returns, reports, or other information to
the taxing official of the state of Wisconsin, a member of the board of arbitration, or a
consultant under joint contract with the states of Minnesota and Wisconsin for the purpose
of making a determination as to the amount to be paid the other state under the provisions
of this section. Prior to the release of any information under the provisions of this section,
the person to whom the information is to be released shall sign an agreement which
provides that the person will protect the confidentiality of the returns and information
revealed thereby to the extent that it is protected under the laws of the state of Minnesota.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
taxable years beginning after December 31, 2014.
new text end

Sec. 34.

Minnesota Statutes 2014, section 290.091, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given:

(a) "Alternative minimum taxable income" means the sum of the following for
the taxable year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative
minimum taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue
Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a disabled person;

(3) for depletion allowances computed under section 613A(c) of the Internal
Revenue Code, with respect to each property (as defined in section 614 of the Internal
Revenue Code), to the extent not included in federal alternative minimum taxable income,
the excess of the deduction for depletion allowable under section 611 of the Internal
Revenue Code for the taxable year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the
amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
Internal Revenue Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the
amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
to (9), and (11) to (14);

less the sum of the amounts determined under the following:

(1) interest income as defined in section 290.01, subdivision 19b, clause (1);

(2) an overpayment of state income tax as provided by section 290.01, subdivision
19b, clause (2), to the extent included in federal alternative minimum taxable income;

(3) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as
defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
amounts deducted in computing federal adjusted gross income;

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b, clauses (6), (8) to (14), (16), deleted text begin and deleted text end (21) new text begin , (23), (24), (25), and (27) new text end ; and

(5) the amount of the net operating loss allowed under section 290.095, subdivision
11, paragraph (c).

In the case of an estate or trust, alternative minimum taxable income must be
computed as provided in section 59(c) of the Internal Revenue Code.

(b) "Investment interest" means investment interest as defined in section 163(d)(3)
of the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without
regard to this section and section 290.032), reduced by the sum of the nonrefundable
credits allowed under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 35.

Minnesota Statutes 2014, section 290.191, subdivision 5, is amended to read:

Subd. 5.

Determination of sales factor.

For purposes of this section, the following
rules apply in determining the sales factor.

(a) The sales factor includes all sales, gross earnings, or receipts received in the
ordinary course of the business, except that the following types of income are not included
in the sales factor:

(1) interest;

(2) dividends;

(3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;

(4) sales of property used in the trade or business, except sales of leased property of
a type which is regularly sold as well as leased; and

(5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
Code or sales of stock.

(b) Sales of tangible personal property are made within this state if the property is
received by a purchaser at a point within this state, regardless of the f.o.b. point, other
conditions of the sale, or the ultimate destination of the property.

(c) Tangible personal property delivered to a common or contract carrier or foreign
vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
regardless of f.o.b. point or other conditions of the sale.

(d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
licensed by a state or political subdivision to resell this property only within the state of
ultimate destination, the sale is made in that state.

(e) Sales made by or through a corporation that is qualified as a domestic
international sales corporation under section 992 of the Internal Revenue Code are not
considered to have been made within this state.

(f) Sales, rents, royalties, and other income in connection with real property is
attributed to the state in which the property is located.

(g) Receipts from the lease or rental of tangible personal property, including finance
leases and true leases, must be attributed to this state if the property is located in this
state and to other states if the property is not located in this state. Receipts from the
lease or rental of moving property including, but not limited to, motor vehicles, rolling
stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
factor to the extent that the property is used in this state. The extent of the use of moving
property is determined as follows:

(1) A motor vehicle is used wholly in the state in which it is registered.

(2) The extent that rolling stock is used in this state is determined by multiplying
the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
which is the miles traveled within this state by the leased or rented rolling stock and the
denominator of which is the total miles traveled by the leased or rented rolling stock.

(3) The extent that an aircraft is used in this state is determined by multiplying the
receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
the number of landings of the aircraft in this state and the denominator of which is the
total number of landings of the aircraft.

(4) The extent that a vessel, mobile equipment, or other mobile property is used in
the state is determined by multiplying the receipts from the lease or rental of the property
by a fraction, the numerator of which is the number of days during the taxable year the
property was in this state and the denominator of which is the total days in the taxable year.

(h) Royalties and other income received for the use of or for the privilege of using
intangible property, including patents, know-how, formulas, designs, processes, patterns,
copyrights, trade names, service names, franchises, licenses, contracts, customer lists, or
similar items, must be attributed to the state in which the property is used by the purchaser.
If the property is used in more than one state, the royalties or other income must be
apportioned to this state pro rata according to the portion of use in this state. If the portion
of use in this state cannot be determined, the royalties or other income must be excluded
from both the numerator and the denominator. Intangible property is used in this state if
the purchaser uses the intangible property or the rights therein in the regular course of its
business operations in this state, regardless of the location of the purchaser's customers.

(i) Sales of intangible property are made within the state in which the property is
used by the purchaser. If the property is used in more than one state, the sales must be
apportioned to this state pro rata according to the portion of use in this state. If the
portion of use in this state cannot be determined, the sale must be excluded from both the
numerator and the denominator of the sales factor. Intangible property is used in this
state if the purchaser used the intangible property in the regular course of its business
operations in this state.

(j) Receipts from the performance of services must be attributed to the state where
the services are received. For the purposes of this section, receipts from the performance
of services provided to a corporation, partnership, or trust may only be attributed to a
state where it has a fixed place of doing business. If the state where the services are
received is not readily determinable or is a state where the corporation, partnership, or
trust receiving the service does not have a fixed place of doing business, the services
shall be deemed to be received at the location of the office of the customer from which
the services were ordered in the regular course of the customer's trade or business. If the
ordering office cannot be determined, the services shall be deemed to be received at the
office of the customer to which the services are billed. new text begin Receipts received as compensation
by a nonresident individual for the performance of services as a member of a board of
directors, or similar body, are attributed to Minnesota based on the ratio of the time spent
in Minnesota providing services as a member of that board divided by the time spent
everywhere providing services as a member of that board.
new text end

(k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
from management, distribution, or administrative services performed by a corporation
or trust for a fund of a corporation or trust regulated under United States Code, title 15,
sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
the fund resides. Under this paragraph, receipts for services attributed to shareholders are
determined on the basis of the ratio of: (1) the average of the outstanding shares in the
fund owned by shareholders residing within Minnesota at the beginning and end of each
year; and (2) the average of the total number of outstanding shares in the fund at the
beginning and end of each year. Residence of the shareholder, in the case of an individual,
is determined by the mailing address furnished by the shareholder to the fund. Residence
of the shareholder, when the shares are held by an insurance company as a depositor for
the insurance company policyholders, is the mailing address of the policyholders. In
the case of an insurance company holding the shares as a depositor for the insurance
company policyholders, if the mailing address of the policyholders cannot be determined
by the taxpayer, the receipts must be excluded from both the numerator and denominator.
Residence of other shareholders is the mailing address of the shareholder.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies retroactively to all open taxable years and returns.
new text end

Sec. 36.

Minnesota Statutes 2014, section 290A.03, subdivision 15, as amended by
Laws 2015, chapter 1, section 4, is amended to read:

Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through deleted text begin December 31, 2014 deleted text end new text begin April 1, 2015 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property tax refunds based on
property taxes payable after December 31, 2015, and rent paid after December 31, 2014.
new text end

Sec. 37. new text begin ADDITIONAL PERSONAL AND DEPENDENT EXEMPTION
AMOUNT FOR 2015 AND 2016.
new text end

new text begin (a) For taxable years beginning after December 31, 2014, and before January 1,
2017, an individual subject to tax under Minnesota Statutes, section 290.06, subdivision
2c, is allowed a subtraction from federal taxable income, in addition to the subtractions
under Minnesota Statutes, section 290.01, subdivision 19b, equal to the number of
personal exemptions allowed under sections 151(b) and (c) of the Internal Revenue Code,
multiplied by one-quarter of the dollar amount for personal exemptions under sections
151(d)(1) and (2) of the Internal Revenue Code, as adjusted for inflation by section
151(d)(4) of the Internal Revenue Code.
new text end

new text begin (b) For taxable years beginning after December 31, 2014, and before January 1,
2017, the additional exemption in paragraph (a) must be added to the disallowed personal
exemption amount under Minnesota Statutes, section 290.01, subdivision 19a, clause
(16), item (i).
new text end

new text begin (c) The additional exemption amount under this section is a modification to net
income under Minnesota Statutes, section 290.01, subdivision 19.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014, and before January 1, 2017.
new text end

Sec. 38. new text begin CREDIT FOR JOB TRAINING CENTER REHABILITATION.
new text end

new text begin (a) A taxpayer is allowed a credit against the tax due under Minnesota Statutes,
chapter 290, if the taxpayer rehabilitated and placed in service in calendar year 2015 a
certified historic structure that once served as a library and is located in a city of the
first class. The credit equals 20 percent of the qualified rehabilitation expenditures for
the project.
new text end

new text begin (b) The taxpayer must notify the commissioner within six months of when the
project is placed in service, and must provide documentation that the project meets the
requirements of this section, in the form and manner prescribed by the commissioner. The
commissioner must issue a credit certificate to the developer upon verifying that the
project has been placed in service and meets the requirements of this section.
new text end

new text begin (c) The recipient of a credit certificate may assign the certificate to another taxpayer,
including an insurance company, which is then allowed the credit under this section. An
assignment is not valid unless the assignee notifies the commissioner within 30 days of
the date the assignment is made. The commissioner shall prescribe the forms necessary
for notifying the commissioner of the assignment of a credit certificate and for claiming
a credit by assignment. In lieu of the credit under paragraph (a), an insurance company
that is assigned a credit under this paragraph may claim the credit against the insurance
premiums tax imposed under chapter 297I.
new text end

new text begin (d) Credits granted to a partnership, a limited liability company taxed as a
partnership, S corporation, or multiple owners of property are passed through to the
partners, members, shareholders, or owners, respectively, pro rata to each partner,
member, shareholder, or owner based on their share of the entity's assets or as specially
allocated in their organizational documents or any other executed agreement, as of the last
day of the taxable year.
new text end

new text begin (e) If the amount of credit that a taxpayer is eligible to receive under this section
exceeds the taxpayer's liability for tax under Minnesota Statutes, chapter 290, the
commissioner shall refund the excess to the taxpayer. If the amount of credit assigned to
an insurance company exceeds the liability for tax under chapter 297I, the commissioner
shall refund the excess to the insurance company. An amount sufficient to pay the refunds
authorized under this section is appropriated to the commissioner from the general fund.
new text end

new text begin (f) For purposes of this section, the following terms have the meanings given:
new text end

new text begin (1) "certified historic structure" has the meaning given in section 47(c)(3)(A) of the
Internal Revenue Code;
new text end

new text begin (2) "commissioner" means the commissioner of revenue;
new text end

new text begin (3) "qualified rehabilitation expenditures" means amounts chargeable to capital
accounts but does not include the cost of acquiring the structure or enlarging the structure;
and
new text end

new text begin (4) "project" means rehabilitation of a certified historic structure that is located
in Minnesota.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014, and before January 1, 2016, for projects placed in service in calendar
year 2015.
new text end

Sec. 39. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 290.067, subdivisions 2, 2a, and 2b, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

ARTICLE 2

PROPERTY TAXPAYER EMPOWERMENT

Section 1.

Minnesota Statutes 2014, section 123B.63, subdivision 3, is amended to read:

Subd. 3.

Capital project levy referendum.

(a) A district may levy the local tax
rate approved by a majority of the electors voting on the question to provide funds for
an approved project. The election must take place no more than five years before the
estimated date of commencement of the project. The referendum deleted text begin must deleted text end new text begin may new text end be deleted text begin held on
a date set by deleted text end new text begin called by new text end the board new text begin and, except as provided in paragraph (g), must be held
on the first Tuesday after the first Monday in November in either an even-numbered or
odd-numbered year new text end . A district must meet the requirements of section 123B.71 for projects
funded under this section. If a review and comment is required under section 123B.71,
subdivision 8, a referendum for a project not receiving a positive review and comment by
the commissioner must be approved by at least 60 percent of the voters at the election.

(b) deleted text begin The deleted text end new text begin A new text end referendum deleted text begin may be deleted text end called deleted text begin by the school board and deleted text end new text begin under this subdivision
new text end may be held:

(1) separately, before an election for the issuance of obligations for the project
under chapter 475; or

(2) in conjunction with an election for the issuance of obligations for the project
under chapter 475; or

(3) notwithstanding section 475.59, as a conjunctive question authorizing both the
capital project levy and the issuance of obligations for the project under chapter 475. Any
obligations authorized for a project may be issued within five years of the date of the
election.

(c) The ballot must provide a general description of the proposed project, state the
estimated total cost of the project, state whether the project has received a positive or
negative review and comment from the commissioner, state the maximum amount of the
capital project levy as a percentage of net tax capacity, state the amount that will be raised
by that local tax rate in the first year it is to be levied, and state the maximum number of
years that the levy authorization will apply.

The ballot must contain a textual portion with the information required in this
section and a question stating substantially the following:

"Shall the capital project levy proposed by the board of .......... School District
No. .......... be approved?"

If approved, the amount provided by the approved local tax rate applied to the net
tax capacity for the year preceding the year the levy is certified may be certified for the
number of years, not to exceed ten, approved.

(d) If the district proposes a new capital project to begin at the time the existing
capital project expires and at the same maximum tax rate, the general description on the
ballot may state that the capital project levy is being renewed and that the tax rate is not
being increased from the previous year's rate. An election to renew authority under this
paragraph may be called at any time that is otherwise authorized by this subdivision. The
ballot notice required under section 275.60 may be modified to read:

"BY VOTING YES ON THIS BALLOT QUESTION, YOU ARE VOTING
TO RENEW AN EXISTING CAPITAL PROJECTS REFERENDUM THAT IS
SCHEDULED TO EXPIRE."

(e) In the event a conjunctive question proposes to authorize both the capital project
levy and the issuance of obligations for the project, appropriate language authorizing the
issuance of obligations must also be included in the question.

(f) The district must notify the commissioner of the results of the referendum.

new text begin (g) Notwithstanding paragraph (a), a referendum to levy the amount needed to
finance a district's response to a disaster or emergency may be held on a date set by the
board. "Disaster" means a situation that creates an actual or imminent serious threat to
the health and safety of persons or a situation that has resulted or is likely to result in
catastrophic loss to property or the environment. "Emergency" means an unforeseen
combination of circumstances that calls for immediate action to prevent a disaster,
identified in the referendum, from developing or occurring.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2014, section 126C.17, subdivision 9, is amended to read:

Subd. 9.

Referendum revenue.

(a) The revenue authorized by section 126C.10,
subdivision 1, may be increased in the amount approved by the voters of the district
at a referendum called for the purpose. The referendum may be called by the board.
The referendum must be conducted one or two calendar years before the increased levy
authority, if approved, first becomes payable. Only one election to approve an increase
may be held in a calendar year. Unless the referendum is conducted by mail under
subdivision 11, paragraph (a), the referendum must be held on the first Tuesday after the
first Monday in November. The ballot must state the maximum amount of the increased
revenue per adjusted pupil unit. The ballot may state a schedule, determined by the board,
of increased revenue per adjusted pupil unit that differs from year to year over the number
of years for which the increased revenue is authorized or may state that the amount shall
increase annually by the rate of inflation. new text begin The ballot must state the cumulative amount per
pupil of any local optional revenue, board-approved referendum authority, and previous
voter-approved referendum authority, if any, that the board expects to certify for the
next school year. new text end For this purpose, the rate of inflation shall be the annual inflationary
increase calculated under subdivision 2, paragraph (b). The ballot may state that existing
referendum levy authority is expiring. In this case, the ballot may also compare the
proposed levy authority to the existing expiring levy authority, and express the proposed
increase as the amount, if any, over the expiring referendum levy authority. The ballot
must designate the specific number of years, not to exceed ten, for which the referendum
authorization applies. The ballot, including a ballot on the question to revoke or reduce the
increased revenue amount under paragraph (c), must abbreviate the term "per adjusted pupil
unit" as "per pupil." The notice required under section 275.60 may be modified to read, in
cases of renewing existing levies at the same amount per pupil as in the previous year:

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING
TO EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS
SCHEDULED TO EXPIRE."

The ballot may contain a textual portion with the information required in this
subdivision and a question stating substantially the following:

"Shall the increase in the revenue proposed by (petition to) the board of .........,
School District No. .., be approved?"

If approved, an amount equal to the approved revenue per adjusted pupil unit times
the adjusted pupil units for the school year beginning in the year after the levy is certified
shall be authorized for certification for the number of years approved, if applicable, or
until revoked or reduced by the voters of the district at a subsequent referendum.

(b) The board must prepare and deliver by first class mail at least 15 days but no more
than 30 days before the day of the referendum to each taxpayer a notice of the referendum
and the proposed revenue increase. The board need not mail more than one notice to any
taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be
those shown to be owners on the records of the county auditor or, in any county where
tax statements are mailed by the county treasurer, on the records of the county treasurer.
Every property owner whose name does not appear on the records of the county auditor
or the county treasurer is deemed to have waived this mailed notice unless the owner
has requested in writing that the county auditor or county treasurer, as the case may be,
include the name on the records for this purpose. The notice must project the anticipated
amount of tax increase in annual dollars for typical residential homesteads, agricultural
homesteads, apartments, and commercial-industrial property within the school district.

new text begin The notice must state the cumulative and individual amounts per pupil of any local
optional revenue, board-approved referendum authority, and voter-approved referendum
authority, if any, that the board expects to certify for the next school year.
new text end

The notice for a referendum may state that an existing referendum levy is expiring
and project the anticipated amount of increase over the existing referendum levy in
the first year, if any, in annual dollars for typical residential homesteads, agricultural
homesteads, apartments, and commercial-industrial property within the district.

The notice must include the following statement: "Passage of this referendum will
result in an increase in your property taxes." However, in cases of renewing existing levies,
the notice may include the following statement: "Passage of this referendum extends an
existing operating referendum at the same amount per pupil as in the previous year."

(c) A referendum on the question of revoking or reducing the increased revenue
amount authorized pursuant to paragraph (a) may be called by the board. A referendum to
revoke or reduce the revenue amount must state the amount per adjusted pupil unit by
which the authority is to be reduced. Revenue authority approved by the voters of the
district pursuant to paragraph (a) must be available to the school district at least once
before it is subject to a referendum on its revocation or reduction for subsequent years.
Only one revocation or reduction referendum may be held to revoke or reduce referendum
revenue for any specific year and for years thereafter.

(d) The approval of 50 percent plus one of those voting on the question is required to
pass a referendum authorized by this subdivision.

(e) At least 15 days before the day of the referendum, the district must submit a
copy of the notice required under paragraph (b) to the commissioner and to the county
auditor of each county in which the district is located. Within 15 days after the results
of the referendum have been certified by the board, or in the case of a recount, the
certification of the results of the recount by the canvassing board, the district must notify
the commissioner of the results of the referendum.

Sec. 3.

Minnesota Statutes 2014, section 205.10, subdivision 1, is amended to read:

Subdivision 1.

Questions.

Special elections may be held in a city or town on a
question on which the voters are authorized by law or charter to pass judgment. new text begin A special
election on a question may only be held on the first Tuesday after the first Monday in
November in either an even-numbered or odd-numbered year. new text end A special election may be
ordered by the governing body of the municipality on its own motion or, on a question
that has not been submitted to the voters in an election within the previous six months,
upon a petition signed by a number of voters equal to 20 percent of the votes cast at the
last municipal general election. A question is carried only with the majority in its favor
required by law or charter. The election officials for a special election shall be the same as
for the most recent municipal general election unless changed according to law. Otherwise
special elections shall be conducted and the returns made in the manner provided for
the municipal general election.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2014, section 205A.05, subdivision 1, is amended to read:

Subdivision 1.

Questions.

deleted text begin (a) deleted text end Special elections must be held for a school district
on a question on which the voters are authorized by law to pass judgment. new text begin The special
election on a question may only be held on the first Tuesday after the first Monday in
November of either an even-numbered or odd-numbered year. new text end The school board may on
its own motion call a special election to vote on any matter requiring approval of the voters
of a district. Upon petition filed with the school board of 50 or more voters of the school
district or five percent of the number of voters voting at the preceding school district
general election, whichever is greater, the school board shall by resolution call a special
election to vote on any matter requiring approval of the voters of a district. A question
is carried only with the majority in its favor required by law. The election officials for a
special election are the same as for the most recent school district general election unless
changed according to law. Otherwise, special elections must be conducted and the returns
made in the manner provided for the school district general election.

deleted text begin (b) A special election may not be held:
deleted text end

deleted text begin (1) during the 56 days before and the 56 days after a regularly scheduled primary or
general election conducted wholly or partially within the school district;
deleted text end

deleted text begin (2) on the date of a regularly scheduled town election in March conducted wholly
or partially within the school district; or
deleted text end

deleted text begin (3) during the 30 days before or the 30 days after a regularly scheduled town election
in March conducted wholly or partially within the school district.
deleted text end

deleted text begin (c) Notwithstanding any other law to the contrary, the time period in which a special
election must be conducted under any other law may be extended by the school board to
conform with the requirements of this subdivision.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 5.

Minnesota Statutes 2014, section 216B.46, is amended to read:

216B.46 MUNICIPAL ACQUISITION PROCEDURES; NOTICE;
ELECTION.

Any municipality which desires to acquire the property of a public utility as
authorized under the provisions of section 216B.45 may determine to do so by resolution of
the governing body of the municipality taken after a public hearing of which at least 30 days'
published notice shall be given as determined by the governing body. The determination
shall become effective when ratified by a majority of the qualified electors voting on the
question at a special election to be held for that purpose deleted text begin , not less than 60 nor more than
120 days after the resolution of the governing body of the municipality deleted text end new text begin on the first Tuesday
after the first Monday in November in either an even-numbered or odd-numbered year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 6.

Minnesota Statutes 2014, section 237.19, is amended to read:

237.19 MUNICIPAL TELECOMMUNICATIONS SERVICES.

Any municipality shall have the right to own and operate a telephone exchange
within its own borders, subject to the provisions of this chapter. It may construct such
plant, or purchase an existing plant by agreement with the owner, or where it cannot
agree with the owner on price, it may acquire an existing plant by condemnation, as
hereinafter provided, but in no case shall a municipality construct or purchase such a
plant or proceed to acquire an existing plant by condemnation until such action by it
is authorized by a majority of the electors voting upon the proposition at deleted text begin a general deleted text end new text begin an
new text end election deleted text begin or a special election called for that purpose deleted text end new text begin held on the first Tuesday after the
first Monday in November in either an even-numbered or odd-numbered year new text end , and if the
proposal is to construct a new exchange where an exchange already exists, it shall not
be authorized to do so unless 65 percent of those voting thereon vote in favor of the
undertaking. A municipality that owns and operates a telephone exchange may enter into
a joint venture as a partner or shareholder with a telecommunications organization to
provide telecommunications services within its service area.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 7.

Minnesota Statutes 2014, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare
and the county treasurer shall deliver after November 10 and on or before November 24
each year, by first class mail to each taxpayer at the address listed on the county's current
year's assessment roll, a notice of proposed property taxes. Upon written request by
the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
instead of on paper or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the case of
a town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, and metropolitan
taxing districts as defined in paragraph (i), the time and place of a meeting for each taxing
authority in which the budget and levy will be discussed and public input allowed, prior to
the final budget and levy determination. The taxing authorities must provide the county
auditor with the information to be included in the notice on or before the time it certifies
its proposed levy under subdivision 1. The public must be allowed to speak at that
meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
must provide a telephone number for the taxing authority that taxpayers may call if they
have questions related to the notice and an address where comments will be received by
mail, except that no notice required under this section shall be interpreted as requiring the
printing of a personal telephone number or address as the contact information for a taxing
authority. If a taxing authority does not maintain public offices where telephone calls can
be received by the authority, the authority may inform the county of the lack of a public
telephone number and the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used
for computing property taxes payable in the following year and for taxes payable in the
current year as each appears in the records of the county assessor on November 1 of the
current year; and, in the case of residential property, whether the property is classified as
homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
which the market values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state
general tax, agricultural homestead credit under section 273.1384, voter approved school
levy, other local school levy, and the sum of the special taxing districts, and as a total
of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts; deleted text begin and
deleted text end

(3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) a statement at the top of the notice stating the following: if a county or city's
proposed levy for next year is greater than its actual levy for the current year, the voters
may have the right to petition for a referendum on next year's levy certification, according
to section 275.80, provided that the final levy that the local government certifies in
December of this year is also greater than its levy for the current year.
new text end

For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include
the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value
reductions for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within
three days of receipt of the notice, whichever is later. A taxpayer may notify the county
treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
which the notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2016 and
thereafter.
new text end

Sec. 8.

Minnesota Statutes 2014, section 275.07, subdivision 1, is amended to read:

Subdivision 1.

Certification of levy.

(a) Except as provided under paragraph (b),
the taxes voted by cities, counties, school districts, and special districts shall be certified
by the proper authorities to the county auditor on or before five working days after
December 20 in each year. A town must certify the levy adopted by the town board to
the county auditor by September 15 each year. If the town board modifies the levy at a
special town meeting after September 15, the town board must recertify its levy to the
county auditor on or before five working days after December 20. new text begin If a city or county levy
is subject to a referendum under section 275.80 and the referendum was approved by the
voters, the maximum levy certified under this section is the proposed levy certified under
section 275.065. If the referendum was not approved, the maximum amount of levy that a
city or county may approve under this section is the maximum alternative levy allowed in
section 275.80, subdivision 2. The city or county may choose to certify a levy less than the
allowed maximum amount. new text end If a city, town, county, school district, or special district fails to
certify its levy by that date, its levy shall be the amount levied by it for the preceding year.

(b)(i) The taxes voted by counties under sections 103B.241, 103B.245, and 103B.251
shall be separately certified by the county to the county auditor on or before five working
days after December 20 in each year. The taxes certified shall not be reduced by the county
auditor by the aid received under section 273.1398, subdivision 3. If a county fails to
certify its levy by that date, its levy shall be the amount levied by it for the preceding year.

(ii) For purposes of the proposed property tax notice under section 275.065 and
the property tax statement under section 276.04, for the first year in which the county
implements the provisions of this paragraph, the county auditor shall reduce the county's
levy for the preceding year to reflect any amount levied for water management purposes
under clause (i) included in the county's levy.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2016 and
thereafter.
new text end

Sec. 9.

Minnesota Statutes 2014, section 275.60, is amended to read:

275.60 LEVY OR BOND REFERENDUM; BALLOT NOTICE.

(a) Notwithstanding any general or special law or any charter provisions, but subject
to section 126C.17, subdivision 9, any question submitted to the voters by any local
governmental subdivision at deleted text begin a general or special deleted text end new text begin an new text end election after deleted text begin June 8, 1995 deleted text end new text begin June 30,
2015 new text end , authorizing a property tax levy or tax rate increase, including the issuance of debt
obligations payable in whole or in part from property taxes, must include on the ballot the
following notice in boldface type:

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING FOR
A PROPERTY TAX INCREASE."

(b) For purposes of this section and section 275.61, "local governmental subdivision"
includes counties, home rule and statutory cities, towns, school districts, and all special
taxing districts. This statement is in addition to any general or special laws or any charter
provisions that govern the contents of a ballot question and, in the case of a question
on the issuance of debt obligations, may be supplemented by a description of revenues
pledged to payment of the obligations that are intended as the primary source of payment.

new text begin (c) An election under this section must be held on the first Tuesday after the first
Monday in November of either an even-numbered or odd-numbered year. This paragraph
does not apply to an election on levying a tax or issuing debt obligations to finance the
local government's response to a disaster or emergency. An election for these purposes
may be held on a date set by the governing body. "Disaster" means a situation that creates
an actual or imminent serious threat to the health and safety of persons or a situation that
has resulted or is likely to result in catastrophic loss to property or the environment.
"Emergency" means an unforeseen combination of circumstances that calls for immediate
action to prevent a disaster, identified in the referendum, from developing or occurring.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end This section does not apply to a school district bond election if the debt
service payments are to be made entirely from transfers of revenue from the capital fund
to the debt service fund.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 10.

new text begin [275.80] LEVY INCREASE; REVERSE REFERENDUM
AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Citation. new text end

new text begin This section shall be known as the "Property Tax Payers'
Empowerment Act."
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "General levy" means the total levy certified under section 275.07 by the local
governmental unit excluding any levy that was approved by the voters at a general or
special election.
new text end

new text begin (c) "Local governmental unit" means a county or a statutory or home rule charter
city with a population of 500 or greater.
new text end

new text begin (d) "Maximum alternative levy" for taxes levied in a current year by a local
governmental unit means the sum of (i) its nondebt levy certified two years previous to the
current year, and (ii) the amount of its proposed levy for the current year levied for the
purposes listed in section 275.70, subdivision 5, clauses (1) to (5).
new text end

new text begin (e) "Nondebt levy" means the total levy certified under section 275.07 by the local
governmental unit, minus any amount levied for the purposes listed in section 275.70,
subdivision 5, clauses (1) to (5).
new text end

new text begin Subd. 3. new text end

new text begin Levy increase; reverse referendum authority. new text end

new text begin If the certified general
levy exceeds the general levy in the previous year, the voters may petition for a
referendum on the levy to be certified for the following year. The county auditor must
publish information on the right to petition for a referendum as provided in section 276.04,
subdivisions 1 and 2. If by June 30, a petition signed by the voters equal in number to ten
percent of the votes cast in the last general election requesting a vote on the levy is filed
with the county auditor, a question on the levy to be certified for the current year must be
placed on the ballot at either the general election or at a special election held on the first
Tuesday after the first Monday in November of the current calendar year.
new text end

new text begin Subd. 4. new text end

new text begin Prohibition against new debt before the election. new text end

new text begin Notwithstanding any
other provision of law, ordinance, or local charter provision, a county or city must not issue
any new debt or obligation from the time the petition for referendum is filed with the county
auditor under subdivision 3 until the day after the referendum required under this section is
held, except as allowed in this subdivision. Refunding bonds and bonds that have already
received voter approval are exempt from the prohibition in this subdivision. For purposes
of this subdivision, "obligation" has the meaning given in section 475.51, subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Ballot question; consequence of the vote. new text end

new text begin (a) The question submitted to
the voters as required under subdivision 3 shall take the following form:
new text end

new text begin "The governing body of ..... has imposed the following property tax levy in the last
two years and is proposing the following maximum levy increase for the coming year:
new text end

new text begin (previous payable year) new text end	new text begin (current payable year) new text end	new text begin (coming payable year) new text end
new text begin Total levy new text end	new text begin Total levy new text end	new text begin Maximum proposed levy new text end
new text begin $....... new text end	new text begin $....... new text end	new text begin $....... new text end

new text begin Shall the governing body of ..... be allowed to impose the maximum proposed
levy listed above?
new text end

	new text begin Yes . new text end
	new text begin No . new text end

new text begin If the majority of votes cast are "no," its maximum allowed property tax levy for the
coming year will be reduced to its maximum alternative levy of ......."
new text end

new text begin (b) If a city is subject to this provision, it will provide the county auditor with
information on its proposed levy by September 30 necessary to calculate the maximum
alternative levy under subdivision 2.
new text end

new text begin (c) If the majority of votes cast on this question are in the affirmative, the levy
certified by the local governmental unit under section 275.07 must be less than or equal
to its proposed levy under section 275.065. If the question does not receive sufficient
affirmative votes, the levy amount that the local governmental unit certifies under section
275.07 in the current year must be less than or equal to its maximum alternative levy as
defined in subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2016 and
thereafter.
new text end

Sec. 11.

Minnesota Statutes 2014, section 276.04, subdivision 1, is amended to read:

Subdivision 1.

Auditor to publish rates.

On receiving the tax lists from the county
auditor, the county treasurer shall, if directed by the county board, give three weeks'
published notice in a newspaper specifying the rates of taxation for all general purposes
and the amounts raised for each specific purpose. new text begin If a city or county is subject to a petition
of the voters due to a general levy increase as provided in section 275.80, the published
notice must also include the general levy for the current year and the previous year for that
city or county along with the statement in the following form:
new text end

new text begin "Because the governing body of ...... increased its nonvoter approved levy in the
current year, the voters in that jurisdiction have the right to petition for a referendum under
section 275.80 on that jurisdiction's levy amount. To invoke the referendum, a petition
signed by voters equal to ten percent of the votes cast in the last general election must be
filed with the county auditor by June 30 of the current year."
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2016 and
thereafter.
new text end

Sec. 12.

Minnesota Statutes 2014, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing
of the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated.
The amounts due all other special taxing districts, if any, may be aggregated except that
any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate
line directly under the appropriate county's levy. If the county levy under this paragraph
includes an amount for a lake improvement district as defined under sections 103B.501
to 103B.581, the amount attributable for that purpose must be separately stated from the
remaining county levy amount. In the case of Ramsey County, if the county levy under this
paragraph includes an amount for public library service under section 134.07, the amount
attributable for that purpose may be separated from the remaining county levy amount.
The amount of the tax on homesteads qualifying under the senior citizens' property tax
deferral program under chapter 290B is the total amount of property tax before subtraction
of the deferred property tax amount. The amount of the tax on contamination value
imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar
amounts, including the dollar amount of any special assessments, may be rounded to the
nearest even whole dollar. For purposes of this section whole odd-numbered dollars may
be adjusted to the next higher even-numbered dollar. The amount of market value excluded
under section 273.11, subdivision 16, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13,
subdivision 35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for homestead agricultural properties, the credit under section 273.1384;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) new text begin If a city or county is subject to a petition of the voters due to a general levy
increase as provided in section 275.80, the tax statement must also include the general
levy for the current year and the previous year for that city or county along with the
following statement:
new text end

new text begin "Because the governing body of ....... increased its nonvoter approved levy in the
current year, the voters in that jurisdiction have the right to petition for a referendum on
that jurisdiction's levy amount under section 275.80. To invoke the referendum, a petition
signed by voters equal to ten percent of the votes cast in the last general election on this
issue must be filed with the county auditor by June 30 of the current year."
new text end

new text begin (e) new text end If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2016 and
thereafter.
new text end

Sec. 13.

Minnesota Statutes 2014, section 412.221, subdivision 2, is amended to read:

Subd. 2.

Contracts.

The council shall have power to make such contracts as may be
deemed necessary or desirable to make effective any power possessed by the council. The
city may purchase personal property through a conditional sales contract and real property
through a contract for deed under which contracts the seller is confined to the remedy of
recovery of the property in case of nonpayment of all or part of the purchase price, which
shall be payable over a period of not to exceed five years. When the contract price of
property to be purchased by contract for deed or conditional sales contract exceeds 0.24177
percent of the estimated market value of the city, the city may not enter into such a contract
for at least ten days after publication in the official newspaper of a council resolution
determining to purchase property by such a contract; 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 city election is filed with the clerk, the city may
not enter into such a contract until the proposition has been approved by a majority of the
votes cast on the question at deleted text begin a regular or special deleted text end new text begin an new text end election new text begin held on the first Tuesday after
the first Monday in November of either an even-numbered or odd-numbered year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 14.

Minnesota Statutes 2014, section 412.301, is amended to read:

412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.

(a) The council may issue certificates of indebtedness or capital notes subject to the
city debt limits to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road
construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled, together with application development services and training related to the
use of the computer hardware or software.

(c) The equipment or software must have an expected useful life at least as long as
the terms of the certificates or notes.

(d) Such certificates or notes shall be payable in not more than ten years and shall be
issued on such terms and in such manner as the council may determine.

(e) If the amount of the certificates or notes to be issued to finance any such purchase
exceeds 0.25 percent of the estimated 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 deleted text begin a regular or special deleted text end new text begin an new text end election new text begin held on the first Tuesday
after the first Monday in November of either an even-numbered or odd-numbered year new text end .

(f) 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.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 15.

new text begin [416.17] VOTER APPROVAL REQUIRED; LEASES OF PUBLIC
BUILDINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Reverse referendum; certain leases. new text end

new text begin (a) Before executing a
qualified lease, a municipality must publish notice of its intention to execute the lease and
the date and time of a hearing to obtain public comment on the matter. The notice must
be published in the official newspaper of the municipality or in a newspaper of general
circulation in the municipality, must be placed prominently on any official municipality
Web site, and must include a statement of the amount of the obligations to be issued by
the authority and the maximum amount of annual rent to be paid by the municipality
under the qualified lease. The notice must be published at least 14, but not more than 28,
days before the date of the hearing.
new text end

new text begin (b) A municipality may enter a lease subject to paragraph (a) only upon 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 municipality in the last general election and is filed with the county
auditor within 30 days after the public hearing.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Authority" includes any of the following governmental units, the boundaries of
which include all or part of the geographic area of the municipality:
new text end

new text begin (1) a housing and redevelopment authority, as defined in section 469.002;
new text end

new text begin (2) a port authority, as defined in section 469.048;
new text end

new text begin (3) an economic development authority, as defined in section 469.090; or
new text end

new text begin (4) an entity established or exercising powers under a special law with powers
similar to those of an entity described in clauses (1) to (3).
new text end

new text begin (c) "Municipality" means a statutory or home rule charter city, a county, or a
town described in section 368.01, but does not include a city of the first class, however
organized, as defined in section 410.01.
new text end

new text begin (d) "Qualified lease" means a lease for use of public land, all or part of a public
building, or other public facilities consisting of real property for a term of three or more
years as a lessee if the property to be leased to the municipality was acquired or improved
with the proceeds of obligations, as defined in section 475.51, subdivision 3, issued by an
authority.
new text end

Sec. 16.

Minnesota Statutes 2014, section 426.19, subdivision 2, is amended to read:

Subd. 2.

Referendum in certain cases.

Before the pledge of any such revenues to
the payment of any such bonds, warrants or certificates of indebtedness, except bonds,
warrants or certificates of indebtedness to construct, reconstruct, enlarge or equip a
municipal liquor store shall be made, the governing body shall submit to the voters of the
city the question of whether such revenues shall be so pledged and such pledge shall not
be binding on the city until it shall have been approved by a majority of the voters voting
on the question at deleted text begin either a general deleted text end new text begin an new text end election deleted text begin or special election called for that purpose
deleted text end new text begin held on the first Tuesday after the first Monday in November of either an even-numbered
or odd-numbered year new text end . No election shall be required for pledge of such revenues for
payment of bonds, warrants or certificates of indebtedness to construct, reconstruct,
enlarge or equip a municipal liquor store.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 17.

Minnesota Statutes 2014, section 447.045, subdivision 2, is amended to read:

Subd. 2.

Statutory city; on-sale and off-sale store.

If the voters of a statutory city
operating an on-sale and off-sale municipal liquor store, at deleted text begin a general or special deleted text end new text begin an new text end election
new text begin held on the first Tuesday after the first Monday in November of either an even-numbered
or odd-numbered year new text end , vote in favor of contributing from its liquor dispensary fund
toward the construction of a community hospital, the city council may appropriate not
more than $60,000 from the fund to any incorporated nonprofit hospital association to
build a community hospital in the statutory city. The hospital must be governed by a board
including two or more members of the statutory city council and be open to all residents of
the statutory city on equal terms. This appropriation must not exceed one-half the total
cost of construction of the hospital. The council must not appropriate the money unless
the average net earnings of the on-sale and off-sale municipal liquor store have been at
least $10,000 for the last five completed fiscal years before the date of the appropriation.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 18.

Minnesota Statutes 2014, section 447.045, subdivision 3, is amended to read:

Subd. 3.

Statutory city; off-sale or on- and off-sale store.

(a) If a statutory
city operates an off-sale, or an on- and off-sale municipal liquor store it may provide
for a vote at deleted text begin a general or special deleted text end new text begin an new text end election new text begin held on the first Tuesday after the first
Monday in November of either an even-numbered or odd-numbered year new text end on the question
of contributing from the city liquor dispensary fund to build, maintain, and operate a
community hospital. If the vote is in favor, the city council may appropriate money
from the fund to an incorporated hospital association for a period of four years. The
appropriation must be from the net profits or proceeds of the municipal liquor store. It
must not exceed $4,000 a year for hospital construction and maintenance or $1,000 a year
for operation. The hospital must be open to all residents of the community on equal terms.

(b) The council must not appropriate the money unless the average net earnings of
the off-sale, or on- and off-sale municipal liquor store have been at least $8,000 for the last
two completed years before the date of the appropriation.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 19.

Minnesota Statutes 2014, section 447.045, subdivision 4, is amended to read:

Subd. 4.

Fourth class city operating store.

If a city of the fourth class operates a
municipal liquor store, it may provide for a vote at deleted text begin a general or special deleted text end new text begin an new text end election new text begin held
on the first Tuesday after the first Monday in November of either an even-numbered
or odd-numbered year new text end on the question of contributing from the profit in the city liquor
dispensary fund to build, equip, and maintain a community hospital within the city
limits. If the vote is in favor, the city council may appropriate not more than $200,000
from profits in the fund for the purpose. The hospital must be open to all residents of
the city on equal terms.

The city may issue certificates of indebtedness in anticipation of and payable only
from profits from the operation of municipal liquor stores.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 20.

Minnesota Statutes 2014, section 447.045, subdivision 6, is amended to read:

Subd. 6.

Statutory city; fourth class.

If a fourth class statutory city operates a
municipal liquor store, it may provide for a vote at deleted text begin a general or special deleted text end new text begin an new text end election new text begin held
on the first Tuesday after the first Monday in November of either an even-numbered
or odd-numbered year new text end on the question of contributing from the city liquor dispensary
fund not more than $15,000 a year for five years to build and maintain a community
hospital. If the vote is in favor the council may appropriate the money from the fund to an
incorporated community hospital association in the city.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 21.

Minnesota Statutes 2014, section 447.045, subdivision 7, is amended to read:

Subd. 7.

Statutory city; any store.

If a statutory city operates a municipal liquor
store, it may provide for a vote at deleted text begin a general or special deleted text end new text begin an new text end election new text begin held on the first Tuesday
after the first Monday in November of either an even-numbered or odd-numbered year
new text end on the question of contributing from the statutory city liquor dispensary fund toward the
acquisition, construction, improvement, maintenance, and operation of a community
hospital. If the vote is in favor, the council may appropriate money from time to time out
of the net profits or proceeds of the municipal liquor store to an incorporated nonprofit
hospital association in the statutory city. The hospital association must be governed by a
board of directors elected by donors of $50 or more, who each have one vote. The hospital
must be open to all residents of the community on equal terms.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 22.

Minnesota Statutes 2014, section 452.11, is amended to read:

452.11 SUBMISSION TO VOTERS.

No city of the first class shall acquire or construct any public utility under the terms
of sections 452.08 to 452.13 unless the proposition to acquire or construct same has
first been submitted to the qualified electors of the city at a deleted text begin general deleted text end city election deleted text begin or at a
special election called for that purpose, deleted text end new text begin held on the first Tuesday after the first Monday in
November of either an even-numbered or odd-numbered year new text end and new text begin has new text end been approved by a
majority vote of all electors voting upon the proposition.

The question of issuing public utility certificates as provided in section 452.09
may, at the option of the council, be submitted at the same election as the question of the
acquisition or construction of the public utility.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 23.

Minnesota Statutes 2014, section 455.24, is amended to read:

455.24 SUBMISSION TO VOTERS.

Before incurring any expense under the powers conferred by section 455.23, the
approval of the voters of the city shall first be had at deleted text begin a general or special deleted text end new text begin an new text end election
held deleted text begin therein deleted text end new text begin on the first Tuesday after the first Monday in November of either an
even-numbered or odd-numbered year new text end . If a majority of the voters of the city participating
at the election shall vote in favor of the construction of the system of poles, wires and
cables herein authorized to be made, the council shall proceed with the construction.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 24.

Minnesota Statutes 2014, section 455.29, is amended to read:

455.29 MUNICIPALITIES MAY EXTEND ELECTRIC SERVICE.

Except as otherwise restricted by chapter 216B, the governing body, or the
commission or board charged with the operation of the public utilities, if one exists
therein, of any municipality in the state owning and operating an electric light and power
plant for the purpose of the manufacture and sale of electrical power or for the purchase
and redistribution of electrical power, may, upon a two-thirds vote of the governing
body, or the commission or board, in addition to all other powers now possessed by
such municipality, sell electricity to customers, singly or collectively, outside of such
municipality, within the state but not to exceed a distance of 30 miles from the corporate
limits of the municipality. Before any municipality shall have the power to extend its
lines and sell electricity outside of the municipality as provided by sections 455.29 and
455.30, the governing body shall first submit to the voters of the municipality, at deleted text begin a general
or special deleted text end new text begin an new text end election new text begin held on the first Tuesday after the first Monday in November of
either an even-numbered or odd-numbered year new text end , the general principle of going outside the
municipality and fixing the maximum amount of contemplated expenditures reasonably
expected to be made for any and all extensions then or thereafter contemplated. Three
weeks' published notice shall be given of such election as required by law, and if a
majority of those voting upon the proposition favors the same, then the municipality shall
thereafter be considered as having chosen to enter the general business of extending
its electric light and power facilities beyond the corporate limits of the municipality.
It shall not be necessary to submit to a vote of the people the question of any specific
enlargement, extension, or improvement of any outside lines; provided the voters of
the municipality have generally elected to exercise the privileges afforded by sections
455.29 and 455.30, and, provided, that each and any specific extension, enlargement, or
improvement project is within the limit of the maximum expenditure authorized at the
election. In cities operating under a home rule charter, where a vote of the people is not
now required in order to extend electric light and power lines, no election shall be required
under the provisions of any act. At any election held to determine the attitude of the
voters upon this principle, the question shall be simply stated upon the ballot provided
therefor, and shall be substantially in the following form: "Shall the city of .....................
undertake the general proposition of extending its electric light and power lines beyond
the limits of the municipality, and limit the maximum expenditures for any and all future
extensions to the sum of $....................?" For this purpose every municipality is authorized
and empowered to extend the lines, wires, and fixtures of its plant to such customers and
may issue certificates of indebtedness therefor in an amount not to exceed the actual cost
of the extensions and for a term not to exceed the reasonable life of the extensions. These
certificates of indebtedness shall in no case be made a charge against the municipality, but
shall be payable and paid out of current revenues of the plant other than taxes.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 25.

Minnesota Statutes 2014, section 459.06, subdivision 1, is amended to read:

Subdivision 1.

Accept donations.

Any county, city, or town may by resolution of
its governing body accept donations of land that the governing body deems to be better
adapted for the production of timber and wood than for any other purpose, for a forest, and
may manage it on forestry principles. The donor of not less than 100 acres of any such
land shall be entitled to have the land perpetually bear the donor's name. The governing
body of any city or town, when funds are available or have been levied therefor, may,
when authorized by a majority vote by ballot of the voters voting at any deleted text begin general or special
deleted text end city election new text begin held on the first Tuesday after the first Monday in November of either an
even-numbered or odd-numbered year new text end or new text begin the annual new text end town meeting where the question is
properly submitted, purchase or obtain by condemnation proceedings, and preferably at the
sources of streams, any tract of land for a forest which is better adapted for the production
of timber and wood than for any other purpose, and which is conveniently located for the
purpose, and manage it on forestry principles. The city or town may annually levy a tax
on all taxable property within its boundaries to procure and maintain such forests.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 26.

Minnesota Statutes 2014, section 469.053, subdivision 5, is amended to read:

Subd. 5.

Reverse referendum.

A city may increase its levy for port authority
purposes under subdivision 4 only as provided in this subdivision. Its city council must
first pass a resolution stating the proposed amount of levy increase. The city must then
publish the resolution together with a notice of public hearing on the resolution for
two successive weeks in its official newspaper or, if none exists, in a newspaper of
general circulation in the city. The hearing must be held two to four weeks after the
first publication. After the hearing, the city council may decide to take no action or may
adopt a resolution authorizing the proposed increase or a lesser increase. A resolution
authorizing an increase must be published in the city's official newspaper or, if none
exists, in a newspaper of general circulation in the city. The resolution is not effective if a
petition requesting a referendum on the resolution is filed with the city clerk within 30
days of publication of the resolution. The petition must be signed by voters equaling five
percent of the votes cast in the city in the last general election. The resolution is effective
if approved by a majority of those voting on the question. The commissioner of revenue
shall prepare a suggested form of referendum question. The referendum must be held at deleted text begin a
special or general deleted text end new text begin an new text end election deleted text begin before October 1 of the year for which the levy increase is
proposed deleted text end new text begin conducted on the first Tuesday after the first Monday in November of either an
even-numbered or odd-numbered year. If approved by the voters, the levy increase may
take effect no sooner than the next calendar year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 27.

Minnesota Statutes 2014, section 469.0724, is amended to read:

469.0724 GENERAL OBLIGATION BONDS.

The port authority of Cannon Falls or Redwood Falls must not proceed with the sale
of general obligation tax-supported bonds until the city council by resolution approves the
proposed issuance. The resolution must be published in the official newspaper. If, within
30 days after the publication, a petition signed by voters equal in number to ten percent of
the number of voters at the last regular city election is filed with the city clerk, the city
and port authority must not issue the general obligation tax-supported bonds until the
proposition has been approved by a majority of the votes cast on the question at deleted text begin a regular
or special deleted text end new text begin an new text end election new text begin held on the first Tuesday after the first Monday in November of
either an even-numbered or odd-numbered year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the city of Cannon Falls and the
city of Redwood Falls the day after the governing body and chief clerical officer of the
city timely comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

Sec. 28.

Minnesota Statutes 2014, section 469.107, subdivision 2, is amended to read:

Subd. 2.

Reverse referendum.

A city may increase its levy for economic
development authority purposes under subdivision 1 in the following way. Its city council
must first pass a resolution stating the proposed amount of levy increase. The city must
then publish the resolution together with a notice of public hearing on the resolution
for two successive weeks in its official newspaper or if none exists in a newspaper of
general circulation in the city. The hearing must be held two to four weeks after the
first publication. After the hearing, the city council may decide to take no action or may
adopt a resolution authorizing the proposed increase or a lesser increase. A resolution
authorizing an increase must be published in the city's official newspaper or if none exists
in a newspaper of general circulation in the city. The resolution is not effective if a petition
requesting a referendum on the resolution is filed with the city clerk within 30 days of
publication of the resolution. The petition must be signed by voters equaling five percent
of the votes cast in the city in the last general election. The election must be held at deleted text begin a
general or special deleted text end new text begin an new text end election new text begin held on the first Tuesday after the first Monday in November
of either an even-numbered or odd-numbered year new text end . Notice of the election must be given in
the manner required by law. The notice must state the purpose and amount of the levy.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 29.

Minnesota Statutes 2014, section 469.190, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

Notwithstanding section 477A.016 or any other law,
a statutory or home rule charter city may by ordinance, and a town may by the affirmative
vote of the electors at the annual town meeting, deleted text begin or at a special town meeting, deleted text end impose a
tax of up to three percent on the gross receipts from the furnishing for consideration of
lodging at a hotel, motel, rooming house, tourist court, or resort, other than the renting or
leasing of it for a continuous period of 30 days or more. A statutory or home rule charter
city may by ordinance impose the tax authorized under this subdivision on the camping
site receipts of a municipal campground.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 30.

Minnesota Statutes 2014, section 469.190, subdivision 5, is amended to read:

Subd. 5.

Reverse referendum.

If the county board passes a resolution under
subdivision 4 to impose the tax, the resolution must be published for two successive
weeks in a newspaper of general circulation within the unorganized territory, together with
a notice fixing a date for a public hearing on the proposed tax.

The hearing must be held not less than two weeks nor more than four weeks after the
first publication of the notice. After the public hearing, the county board may determine to
take no further action, or may adopt a resolution authorizing the tax as originally proposed
or approving a lesser rate of tax. The resolution must be published in a newspaper of
general circulation within the unorganized territory. The voters of the unorganized
territory may request a referendum on the proposed tax by filing a petition with the county
auditor within 30 days after the resolution is published. The petition must be signed by
voters who reside in the unorganized territory. The number of signatures must equal at
least five percent of the number of persons voting in the unorganized territory in the last
general election. If such a petition is timely filed, the resolution is not effective until it
has been submitted to the voters residing in the unorganized territory at deleted text begin a general or
special deleted text end new text begin an new text end election new text begin held on the first Tuesday after the first Monday in November of either
an even-numbered or odd-numbered year new text end and a majority of votes cast on the question of
approving the resolution are in the affirmative. The commissioner of revenue shall prepare
a suggested form of question to be presented at the referendum.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 31.

Minnesota Statutes 2014, section 471.57, subdivision 3, is amended to read:

Subd. 3.

May use fund for other purposes upon vote.

The council of any
municipality which has established a public works reserve fund by an ordinance
designating the specific improvement or type of capital improvement for which the
fund may be used may submit to the voters of the municipality at deleted text begin any regular or special
deleted text end new text begin an new text end election new text begin held on the first Tuesday after the first Monday in November of either an
even-numbered or odd-numbered year new text end the question of using the fund for some other
purpose. If a majority of the votes cast on the question are in favor of such diversion from
the original purpose of the fund, it may be used for any purpose so approved by the voters.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 32.

Minnesota Statutes 2014, section 471.571, subdivision 3, is amended to read:

Subd. 3.

Expenditure from fund, limitation.

No expenditure for any one project in
excess of 60 percent of one year's levy or $25,000, whichever is greater, may be made
from such permanent improvement or replacement fund in any year without first obtaining
the approval of a majority of the voters voting at a deleted text begin general or special deleted text end municipal election
new text begin held on the first Tuesday after the first Monday in November of either an even-numbered
or odd-numbered year new text end at which the question of making such expenditure has been
submitted. In submitting any proposal to the voters for approval, the amount proposed to
be spent and the purpose thereof shall be stated in the proposal submitted. The proceeds
of such levies may be pledged for the payment of any bonds issued pursuant to law for
any purposes authorized hereby and annual payments upon such bonds or interest may
be made without additional authorization.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 33.

Minnesota Statutes 2014, section 471.572, subdivision 2, is amended to read:

Subd. 2.

Tax levy.

The governing body of a city may establish, by a two-thirds vote
of all its members, by ordinance or resolution a reserve fund and may annually levy a
property tax for the support of the fund. The proceeds of taxes levied for its support must
be paid into the reserve fund. Any other revenue from a source not required by law to be
paid into another fund for purposes other than those provided for the use of the reserve
fund may be paid into the fund. Before a tax is levied under this section, the city must
publish in the official newspaper of the city an initial resolution authorizing the tax levy. If
within ten days after the publication a petition is filed with the city clerk requesting an
election on the tax levy signed by a number of qualified voters greater than ten percent of
the number who voted in the city at the last general election, the tax may not be levied
until the levy has been approved by a majority of the votes cast on it at deleted text begin a regular or special
deleted text end new text begin an new text end election new text begin held on the first Tuesday after the first Monday in November of either an
even-numbered or odd-numbered year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 34.

Minnesota Statutes 2014, section 471.572, subdivision 4, is amended to read:

Subd. 4.

Use of fund for a specific purpose.

If the city has established a reserve
fund, it may submit to the voters at deleted text begin a regular or special deleted text end new text begin an new text end election new text begin held on the first
Tuesday after the first Monday in November of either an even-numbered or odd-numbered
year new text end the question of whether use of the fund should be restricted to a specific improvement
or type of capital improvement. If a majority of the votes cast on the question are in
favor of the limitation on the use of the reserve fund, it may be used only for the purpose
approved by the voters.

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 35.

Minnesota Statutes 2014, section 475.59, is amended to read:

475.59 MANNER OF SUBMISSION; NOTICE.

new text begin Subdivision 1. new text end

new text begin Generally; notice. new text end

When the governing body of a municipality
resolves to issue bonds for any purpose requiring the approval of the electors, it shall
provide for submission of the proposition of their issuance at a general or special election
or town or school district meeting. Notice of such election or meeting shall be given in
the manner required by law and shall state the maximum amount and the purpose of
the proposed issue. In any school district, the school board or board of education may,
according to its judgment and discretion, submit as a single ballot question or as two
or more separate questions in the notice of election and ballots the proposition of their
issuance for any one or more of the following, stated conjunctively or in the alternative:
acquisition or enlargement of sites, acquisition, betterment, erection, furnishing,
equipping of one or more new schoolhouses, remodeling, repairing, improving, adding to,
betterment, furnishing, equipping of one or more existing schoolhouses. In any city, town,
or county, the governing body may, according to its judgment and discretion, submit as a
single ballot question or as two or more separate questions in the notice of election and
ballots the proposition of their issuance, stated conjunctively or in the alternative, for the
acquisition, construction, or improvement of any facilities at one or more locations.

new text begin Subd. 2. new text end

new text begin Election date. new text end

new text begin An election to approve issuance of bonds under this section
held by a municipality other than a town, must be held on the first Tuesday after the first
Monday in November of either an even-numbered or odd-numbered year. An election
under this section held by a town may be held on the same day as the annual town meeting
or on the first Tuesday after the first Monday in November of either an even-numbered or
odd-numbered year.
new text end

new text begin Subd. 3. new text end

new text begin Special laws. new text end

new text begin If a referendum on the issuance of bonds or other debt
obligations authorized in a special law is required, it must be held on a date as provided in
subdivision 2, notwithstanding any provision in the special law authorizing the referendum
to be held at any other time.
new text end

new text begin Subd. 4. new text end

new text begin Exception for disaster or emergency. new text end

new text begin Subdivisions 2 and 3, and any other
law requiring an election to approve issuance of bonds or other debt obligations to be held
on the first Tuesday after the first Monday in November of either an even-numbered or
odd-numbered year, do not apply to issuance of bonds or other debt obligations to finance
the municipality's response to an emergency or disaster. "Disaster" means a situation that
creates an actual or imminent serious threat to the health and safety of persons or a situation
that has resulted or is likely to result in catastrophic loss to property or the environment.
"Emergency" means an unforeseen combination of circumstances that calls for immediate
action to prevent a disaster identified in the referendum from developing or occurring.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

Sec. 36. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 205.10, subdivision 3, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Except as otherwise provided, this act is effective August 1,
2015, and applies to any referendum authorized on or after that date.
new text end

ARTICLE 3

PROPERTY TAXES

Section 1.

Minnesota Statutes 2014, section 40A.18, subdivision 2, is amended to read:

Subd. 2.

Allowed commercial and industrial operations.

Commercial and
industrial operations are not allowed on land within an agricultural preserve except:

(1) small on-farm commercial or industrial operations normally associated with and
important to farming in the agricultural preserve area;

(2) storage use of existing farm buildings that does not disrupt the integrity of the
agricultural preserve; deleted text begin and
deleted text end

(3) small commercial use of existing farm buildings for trades not disruptive to the
integrity of the agricultural preserve such as a carpentry shop, small scale mechanics shop,
and similar activities that a farm operator might conduct deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) wireless communication installments and related equipment and structure
capable of providing technology potentially beneficial to farming activities.
new text end

"Existing" in clauses (2) and (3) means existing on August 1, 1989.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following enactment.
new text end

Sec. 2.

Minnesota Statutes 2014, section 273.072, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Termination of local assessor's office by town vote. new text end

new text begin (a) A town or
township may elect at its annual meeting to enter into a joint assessment agreement with
the county in which the town or township is wholly or partially situated, for purposes of
providing assessments under this section. The county to which assessment duties have
thereto been transferred shall enter into an agreement with the electing town or township
under terms negotiated with the town or township, or, if such terms cannot be mutually
determined, on terms pursuant to the county's authority under this chapter.
new text end

new text begin (b) If after electing to enter into a joint assessment agreement under paragraph
(a), the town or township determines that the interests of the town or township may be
better served through valuation by local assessors, it may, at its annual meeting, revoke
the election. Revocation under this paragraph may not be made within four years after
the election in paragraph (a). A revocation under this paragraph is effective at the second
assessment date following the revocation. The office of the town or township assessor shall
be filled as provided by charter or law 90 days before the effective date of the revocation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 3.

Minnesota Statutes 2014, 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:

(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 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 agricultural property consists of at least 40 acres including undivided
government lots and correctional 40's;

(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the
owner or of the 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;

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

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

(5) neither the owner nor the person actively farming the agricultural 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) Agricultural 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.

(iv) As used in this paragraph, "agricultural property" means class 2a property and
any class 2b property that is contiguous to and under the same ownership as the class 2a
property.

new text begin (c) Agricultural property 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:
new text end

new text begin (1) the agricultural property consists of at least 40 acres, including undivided
government lots and correctional 40's;
new text end

new text begin (2) the owner or the owner's spouse actively farmed the agricultural property for
at least ten years, ending no more than four years before the owner of the property
first applies for qualification under this clause, either on the owner'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 owner is a partner,
shareholder, or member;
new text end

new text begin (3) the owner of the agricultural property is a Minnesota resident;
new text end

new text begin (4) neither the owner nor the spouse of the owner claims another agricultural
homestead in Minnesota; and
new text end

new text begin (5) the owner lives no 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 may
live more than four townships or cities, or combination of four townships or cities, from
the agricultural property.
new text end

new text begin The application for enrollment must provide the information required under clause
(i), except that no information regarding the operator of the farm is required, and the
owner must submit evidence that the ten-year requirement has been met.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end 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.

deleted text begin (d) deleted text end new text begin (e) new text end 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.

deleted text begin (e) deleted text end new text begin (f) new text end 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.

deleted text begin (f) deleted text end new text begin (g) new text end 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.

deleted text begin (g) deleted text end new text begin (h) new text end Agricultural property 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:

(1) the property consists of at least 40 acres including undivided government lots
and correctional 40's;

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

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

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

(5) 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.

deleted text begin (h) deleted text end new text begin (i) new text end 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.

deleted text begin (i) deleted text end new text begin (j) new text end Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2007 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 the August 2007 floods;

(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted,
Steele, Wabasha, or Winona;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2007 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 the August
2007 floods, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
owner must notify the assessor by December 1, 2008. 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.

deleted text begin (j) deleted text end new text begin (k) new text end Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2008 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 March 2009 floods;

(2) the property is located in the county of Marshall;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2008 assessment year and continue to be used
for agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota 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 the 2009
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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2016.
new text end

Sec. 4.

Minnesota Statutes 2014, section 273.13, subdivision 23, is amended to read:

Subd. 23.

Class 2.

(a) An agricultural homestead consists of class 2a agricultural
land that is homesteaded, along with any class 2b rural vacant land that is contiguous to
the class 2a land under the same ownership. The market value of the house and garage
and immediately surrounding one acre of land has the same classification rates as class
1a or 1b property under subdivision 22. The value of the remaining land including
improvements up to the first tier valuation limit of agricultural homestead property has a
classification rate of 0.5 percent of market value. The remaining property over the first tier
has a classification rate of one percent of market value. For purposes of this subdivision,
the "first tier valuation limit of agricultural homestead property" and "first tier" means
the limit certified under section 273.11, subdivision 23.

(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
are agricultural land and buildings. Class 2a property has a classification rate of one percent
of market value, unless it is part of an agricultural homestead under paragraph (a). Class
2a property must also include any property that would otherwise be classified as 2b, but is
interspersed with class 2a property, including but not limited to sloughs, wooded wind
shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
and other similar land that is impractical for the assessor to value separately from the rest of
the property or that is unlikely to be able to be sold separately from the rest of the property.

An assessor may classify the part of a parcel described in this subdivision that is used
for agricultural purposes as class 2a and the remainder in the class appropriate to its use.

(c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
that are unplatted real estate, rural in character and not used for agricultural purposes,
including land used for growing trees for timber, lumber, and wood and wood products,
that is not improved with a structure. The presence of a minor, ancillary nonresidential
structure as defined by the commissioner of revenue does not disqualify the property from
classification under this paragraph. Any parcel of 20 acres or more improved with a
structure that is not a minor, ancillary nonresidential structure must be split-classified, and
ten acres must be assigned to the split parcel containing the structure. Class 2b property
has a classification rate of one percent of market value unless it is part of an agricultural
homestead under paragraph (a), or qualifies as class 2c under paragraph (d).

(d) Class 2c managed forest land consists of no less than 20 and no more than
1,920 acres statewide per taxpayer that is being managed under a forest management
plan that meets the requirements of chapter 290C, but is not enrolled in the sustainable
forest resource management incentive program. It has a classification rate of .65 percent,
provided that the owner of the property must apply to the assessor in order for the
property to initially qualify for the reduced rate and provide the information required
by the assessor to verify that the property qualifies for the reduced rate. If the assessor
receives the application and information before May 1 in an assessment year, the property
qualifies beginning with that assessment year. If the assessor receives the application
and information after April 30 in an assessment year, the property may not qualify until
the next assessment year. The commissioner of natural resources must concur that the
land is qualified. The commissioner of natural resources shall annually provide county
assessors verification information on a timely basis. The presence of a minor, ancillary
nonresidential structure as defined by the commissioner of revenue does not disqualify the
property from classification under this paragraph.

(e) Agricultural land as used in this section means:

(1) contiguous acreage of ten acres or more, used during the preceding year for
agricultural purposes; or

(2) contiguous acreage used during the preceding year for an intensive livestock or
poultry confinement operation, provided that land used only for pasturing or grazing
does not qualify under this clause.

"Agricultural purposes" as used in this section means the raising, cultivation, drying,
or storage of agricultural products for sale, or the storage of machinery or equipment
used in support of agricultural production by the same farm entity. For a property to be
classified as agricultural based only on the drying or storage of agricultural products,
the products being dried or stored must have been produced by the same farm entity as
the entity operating the drying or storage facility. "Agricultural purposes" also includes
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 99-198 or a
similar state or federal conservation program if the property was classified as agricultural
(i) under this subdivision for taxes payable in 2003 because of its enrollment in a
qualifying program and the land remains enrolled or (ii) in the year prior to its enrollment.
Agricultural classification shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same ownership.

"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
of, a set of contiguous tax parcels under that section that are owned by the same person.

(f) Agricultural land under this section also includes:

(1) contiguous acreage that is less than ten acres in size and exclusively used in the
preceding year for raising or cultivating agricultural products; or

(2) contiguous acreage that contains a residence and is less than 11 acres in size, if
the contiguous acreage exclusive of the house, garage, and surrounding one acre of land
was used in the preceding year for one or more of the following three uses:

(i) for an intensive grain drying or storage operation, or for intensive machinery or
equipment storage activities used to support agricultural activities on other parcels of
property operated by the same farming entity;

(ii) as a nursery, provided that only those acres used intensively to produce nursery
stock are considered agricultural land; or

(iii) for intensive market farming; for purposes of this paragraph, "market farming"
means the cultivation of one or more fruits or vegetables or production of animal or other
agricultural products for sale to local markets by the farmer or an organization with which
the farmer is affiliated.

"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
described in section 272.193, or all of a set of contiguous tax parcels under that section
that are owned by the same person.

(g) 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.

(h) 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.

(i) 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, 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, which may include related horse training and
riding instruction, if the boarding is done on property that is also used for raising pasture
to graze horses or raising or cultivating other 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 (i) on a game farm licensed under
section 97A.105, provided that the annual licensing report to the Department of Natural
Resources, which must be submitted annually by March 30 to the assessor, indicates
that at least 500 birds were raised or used for breeding stock on the property during the
preceding year and that the owner provides a copy of the owner's most recent schedule F;
or (ii) 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, including short rotation woody crops, and not
sold for timber, lumber, wood, or wood products; deleted text begin and
deleted text end

(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor new text begin ; and
new text end

new text begin (9) wine produced by a farm winery licensed under section 340A.315 new text end .

(j) 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 new text begin , including
the bottling of wine produced by a farm winery, new text end 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.

(k) 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.

(l) Class 2d airport landing area consists of a landing area or public access area of a
privately owned public use airport. It has a classification rate of one percent of market
value. To qualify for classification under this paragraph, a privately owned public use
airport must be licensed as a public airport under section 360.018. For purposes of
this paragraph, "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 this paragraph 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 this paragraph.
For purposes of this paragraph, "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.

(m) Class 2e consists of land with a commercial aggregate deposit that is not actively
being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
located in a county that has elected to opt-out of the aggregate preservation program as
provided in section 273.1115, subdivision 6. It has a classification rate of one percent of
market value. To qualify for classification under this paragraph, the property must be at
least ten contiguous acres in size and the owner of the property must record with the
county recorder of the county in which the property is located an affidavit containing:

(1) a legal description of the property;

(2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;

(3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and

(4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.

For purposes of this section and section 273.1115, "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.

(n) When any portion of the property under this subdivision or subdivision 22 begins
to be actively mined, the owner must file a supplemental affidavit within 60 days from
the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section 273.1115, if the
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.

(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
in section 14.386 concerning exempt rules do not apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2017.
new text end

Sec. 5.

Minnesota Statutes 2014, section 273.13, subdivision 25, is amended to read:

Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more
units and used or held for use by the owner or by the tenants or lessees of the owner
as a residence for rental periods of 30 days or more, excluding property qualifying for
class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
than hospitals exempt under section 272.02, and contiguous property used for hospital
purposes, without regard to whether the property has been platted or subdivided. The
market value of class 4a property has a classification rate of 1.25 percent.

(b) Class 4b includes:

(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;

(2) manufactured homes not classified under any other provision;

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and

(4) unimproved property that is classified residential as determined under subdivision
33.

The market value of class 4b property has a classification rate of 1.25 percent.

(c) Class 4bb includes nonhomestead residential real estate containing one unit,
other than seasonal residential recreational property, and a single family dwelling, garage,
and surrounding one acre of property on a nonhomestead farm classified under subdivision
23, paragraph (b).

Class 4bb property has the same classification rates as class 1a property under
subdivision 22.

Property that has been classified as seasonal residential recreational property at
any time during which it has been owned by the current owner or spouse of the current
owner does not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), real and personal property
devoted to commercial temporary and seasonal residential occupancy for recreation
purposes, for not more than 250 days in the year preceding the year of assessment. For
purposes of this clause, property is devoted to a commercial purpose on a specific day
if any portion of the property is used for residential occupancy, and a fee is charged for
residential occupancy. Class 4c property under this clause must contain three or more
rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
or individual camping site equipped with water and electrical hookups for recreational
vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
4c under this clause is also class 4c under this clause regardless of the term of the rental
agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
property to be classified under this clause, either (i) the business located on the property
must provide recreational activities, at least 40 percent of the annual gross lodging receipts
related to the property must be from business conducted during 90 consecutive days,
and either (A) at least 60 percent of all paid bookings by lodging guests during the year
must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
annual gross receipts must be from charges for providing recreational activities, or (ii) the
business must contain 20 or fewer rental units, and must be located in a township or a city
with a population of 2,500 or less located outside the metropolitan area, as defined under
section 473.121, subdivision 2, that contains a portion of a state trail administered by the
Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
more nights shall be counted as two bookings. Class 4c property also includes commercial
use real property used exclusively for recreational purposes in conjunction with other class
4c property classified under this clause and devoted to temporary and seasonal residential
occupancy for recreational purposes, up to a total of two acres, provided the property is
not devoted to commercial recreational use for more than 250 days in the year preceding
the year of assessment and is located within two miles of the class 4c property with which
it is used. In order for a property to qualify for classification under this clause, the owner
must submit a declaration to the assessor designating the cabins or units occupied for 250
days or less in the year preceding the year of assessment by January 15 of the assessment
year. Those cabins or units and a proportionate share of the land on which they are located
must be designated class 4c under this clause as otherwise provided. The remainder of the
cabins or units and a proportionate share of the land on which they are located will be
designated as class 3a. The owner of property desiring designation as class 4c property
under this clause must provide guest registers or other records demonstrating that the units
for which class 4c designation is sought were not occupied for more than 250 days in the
year preceding the assessment if so requested. The portion of a property operated as a
(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
nonresidential facility operated on a commercial basis not directly related to temporary and
seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
marina services, launch services, or guide services; or selling bait and fishing tackle;

(2) qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;

(3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and not used for residential purposes
on either a temporary or permanent basis, provided that:

(i) the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or

(ii) the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be
used for public and community meetings or events for no charge, as appropriate to the
size of the facility.

For purposes of this clause:

(A) "charitable contributions and donations" has the same meaning as lawful
gambling purposes under section 349.12, subdivision 25, excluding those purposes
relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;

(B) "property taxes" excludes the state general tax;

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and

(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.

Any portion of the property not qualifying under either item (i) or (ii) is class 3a.
The use of the property for social events open exclusively to members and their guests
for periods of less than 24 hours, when an admission is not charged nor any revenues are
received by the organization shall not be considered a revenue-producing activity.

The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the
requirement under item (ii) must file an application by May 1 with the assessor for
eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;

(4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;

(5)(i) manufactured home parks as defined in section 327.14, subdivision 3,
excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
manufactured home parks as defined in section 327.14, subdivision 3, that are described in
section 273.124, subdivision 3a;

(6) real property that is actively and exclusively devoted to indoor fitness, health,
social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
and is located within the metropolitan area as defined in section 473.121, subdivision 2;

(7) a leased or privately owned noncommercial aircraft storage hangar not exempt
under section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the
leased premise, prohibits commercial activity performed at the hangar.

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale;

(8) a privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the aircraft storage hangar provides the assessor with a signed
agreement restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and

(9) residential real estate, a portion of which is used by the owner for homestead
purposes, and that is also a place of lodging, if all of the following criteria are met:

(i) rooms are provided for rent to transient guests that generally stay for periods
of 14 or fewer days;

(ii) meals are provided to persons who rent rooms, the cost of which is incorporated
in the basic room rate;

(iii) meals are not provided to the general public except for special events on fewer
than seven days in the calendar year preceding the year of the assessment; and

(iv) the owner is the operator of the property.

The market value subject to the 4c classification under this clause is limited to
five rental units. Any rental units on the property in excess of five, must be valued and
assessed as class 3a. The portion of the property used for purposes of a homestead by the
owner must be classified as class 1a property under subdivision 22;

(10) real property up to a maximum of three acres and operated as a restaurant
as defined under section 157.15, subdivision 12, provided it: (i) is located on a lake as
defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (ii) is either
devoted to commercial purposes for not more than 250 consecutive days, or receives
at least 60 percent of its annual gross receipts from business conducted during four
consecutive months. Gross receipts from the sale of alcoholic beverages must be included
in determining the property's qualification under item (ii). The property's primary business
must be as a restaurant and not as a bar. Gross receipts from gift shop sales located
on the premises must be excluded. Owners of real property desiring 4c classification
under this clause must submit an annual declaration to the assessor by February 1 of the
current assessment year, based on the property's relevant information for the preceding
assessment year;

(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to
the public and devoted to recreational use for marina services. The marina owner must
annually provide evidence to the assessor that it provides services, including lake or river
access to the public by means of an access ramp or other facility that is either located on
the property of the marina or at a publicly owned site that abuts the property of the marina.
No more than 800 feet of lakeshore may be included in this classification. Buildings used
in conjunction with a marina for marina services, including but not limited to buildings
used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
tackle, are classified as class 3a property; and

(12) real and personal property devoted to noncommercial temporary and seasonal
residential occupancy for recreation purposes.

Class 4c property has a classification rate of 1.5 percent of market value, except that
(i) each parcel of noncommercial seasonal residential recreational property under clause
(12) has the same classification rates as class 4bb property, (ii) manufactured home parks
assessed under clause (5), item (i), have the same classification rate as class 4b property,
and the market value of manufactured home parks assessed under clause (5), item (ii),
has a classification rate of 0.75 percent if more than 50 percent of the lots in the park are
occupied by shareholders in the cooperative corporation or association and a classification
rate of one percent if 50 percent or less of the lots are so occupied, (iii) commercial-use
seasonal residential recreational property and marina recreational land as described
in clause (11), has a classification rate of one percent for the first $500,000 of market
value, and 1.25 percent for the remaining market value, (iv) the market value of property
described in clause (4) has a classification rate of one percent, (v) the market value of
property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent,
and (vi) that portion of the market value of property in clause (9) qualifying for class 4c
property has a classification rate of 1.25 percent new text begin . For taxes payable in 2016 through 2025,
property qualifying for classification under clause (3) that is owned or operated by a
congressionally chartered veterans organization has a classification rate of one percent new text end .

(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
of the units in the building qualify as low-income rental housing units as certified under
section 273.128, subdivision 3, only the proportion of qualifying units to the total number
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.

(f) The first tier of market value of class 4d property has a classification rate of 0.75
percent. The remaining value of class 4d property has a classification rate of 0.25 percent.
For the purposes of this paragraph, the "first tier of market value of class 4d property"
means the market value of each housing unit up to the first tier limit. For the purposes of
this paragraph, all class 4d property value must be assigned to individual housing units.
The first tier limit is $100,000 for assessment year 2014. For subsequent years, the limit is
adjusted each year by the average statewide change in estimated market value of property
classified as class 4a and 4d under this section for the previous assessment year, excluding
valuation change due to new construction, rounded to the nearest $1,000, provided,
however, that the limit may never be less than $100,000. Beginning with assessment year
2015, the commissioner of revenue must certify the limit for each assessment year by
November 1 of the previous year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2017.
new text end

Sec. 6.

Minnesota Statutes 2014, section 273.13, subdivision 34, is amended to read:

Subd. 34.

Homestead of disabled veteran or family caregiver.

(a) All or a
portion of the market value of property owned by a veteran and serving as the veteran's
homestead under this section is excluded in determining the property's taxable market
value if the veteran has a service-connected disability of 70 percent or more as certified
by the United States Department of Veterans Affairs. To qualify for exclusion under this
subdivision, the veteran must have been honorably discharged from the United States
armed forces, as indicated by United States Government Form DD214 or other official
military discharge papers.

(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
excluded, except as provided in clause (2); and

(2) for a total (100 percent) and permanent disability, $300,000 of market value is
excluded.

(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
spouse holds the legal or beneficial title to the homestead and permanently resides there,
the exclusion shall carry over to the benefit of the veteran's spouse deleted text begin for the current taxes
payable year and for eight additional taxes payable years or deleted text end until such time as the spouse
remarries, or sells, transfers, or otherwise disposes of the property deleted text begin , whichever comes first deleted text end .
Qualification under this paragraph requires an annual application under paragraph (h).

(d) If the spouse of a member of any branch or unit of the United States armed
forces who dies due to a service-connected cause while serving honorably in active
service, as indicated on United States Government Form DD1300 or DD2064, holds
the legal or beneficial title to a homestead and permanently resides there, the spouse is
entitled to the benefit described in paragraph (b), clause (2), deleted text begin for eight taxes payable years,
or deleted text end until such time as the spouse remarries or sells, transfers, or otherwise disposes of the
property deleted text begin , whichever comes first deleted text end .

(e) If a veteran meets the disability criteria of paragraph (a) but does not own
property classified as homestead in the state of Minnesota, then the homestead of the
veteran's primary family caregiver, if any, is eligible for the exclusion that the veteran
would otherwise qualify for under paragraph (b).

(f) In the case of an agricultural homestead, only the portion of the property
consisting of the house and garage and immediately surrounding one acre of land qualifies
for the valuation exclusion under this subdivision.

(g) A property qualifying for a valuation exclusion under this subdivision is not
eligible for the market value exclusion under subdivision 35, or classification under
subdivision 22, paragraph (b).

(h) To qualify for a valuation exclusion under this subdivision a property owner
must apply to the assessor by July 1 of each assessment year, except that an annual
reapplication is not required once a property has been accepted for a valuation exclusion
under paragraph (a) and qualifies for the benefit described in paragraph (b), clause (2), and
the property continues to qualify until there is a change in ownership. For an application
received after July 1 of any calendar year, the exclusion shall become effective for the
following assessment year.

(i) A first-time application by a qualifying spouse for the market value exclusion under
paragraph (d) must be made any time within two years of the death of the service member.

(j) For purposes of this subdivision:

(1) "active service" has the meaning given in section 190.05;

(2) "own" means that the person's name is present as an owner on the property deed;

(3) "primary family caregiver" means a person who is approved by the secretary of
the United States Department of Veterans Affairs for assistance as the primary provider
of personal care services for an eligible veteran under the Program of Comprehensive
Assistance for Family Caregivers, codified as United States Code, title 38, section 1720G;
and

(4) "veteran" has the meaning given the term in section 197.447.

(k) The purpose of this provision of law providing a level of homestead property tax
relief for gravely disabled veterans, their primary family caregivers, and their surviving
spouses is to help ease the burdens of war for those among our state's citizens who bear
those burdens most heavily.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 7.

Minnesota Statutes 2014, section 274.014, subdivision 2, is amended to read:

Subd. 2.

Appeals and equalization course.

deleted text begin Beginning in 2006, and each year
thereafter, deleted text end new text begin (a) new text end 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.

new text begin (b) The requirement under paragraph (a) does not apply in any year in which the
commissioner does not offer in-person training, either:
new text end

new text begin (1) in conjunction with the Association of Minnesota Townships, reaching at least as
many local board members for which training was offered in 2014; or
new text end

new text begin (2) with at least as many registration openings for local board members for which
training was offered in 2014.
new text end

new text begin (c) The requirement for in-person training under paragraph (b) may be suspended
when the Office of Broadband Development certifies to the commissioner that broadband
service as defined in section 116J.39 exists in every jurisdiction subject to compliance
with this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 1, 2015.
new text end

Sec. 8.

new text begin [274.132] PROPERTY OVERVALUED.
new text end

new text begin Subdivision 1. new text end

new text begin Tax credit. new text end

new text begin Notwithstanding any other provision to the contrary,
when the value of a property is reduced by a local, special, or county board of appeal and
equalization, or an abatement to correct an error in valuation, a taxpayer shall receive a
tax credit in the manner prescribed under subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Reduced value tax balance. new text end

new text begin (a) When the value of a property is reduced as
referenced under subdivision 1, the auditor shall determine the amount of taxes payable for
the current year on that property and subtract from that amount the amount of taxes payable
for the current year under the property's reduced value to obtain the property's reduced
value tax balance, if any. The auditor shall credit the reduced value tax balance against a
taxpayer's succeeding year's property taxes due according to the following schedule:
new text end

new text begin (1) if the reduced value tax balance is less than 25 percent of the succeeding year's
total property taxes due, it shall be credited to the taxpayer in the succeeding year; or
new text end

new text begin (2) if the reduced value tax balance is 25 percent or more of the succeeding year's
total property taxes due, it shall be credited to the taxpayer at a rate of 25 percent of the
property taxes due per year until paid in full.
new text end

new text begin Subd. 3. new text end

new text begin Settlement. new text end

new text begin The reduced value tax balance credit calculated under
subdivision 2 shall reduce the tax payable to each jurisdiction in proportion to the total
taxes payable on the parcel.
new text end

new text begin Subd. 4. new text end

new text begin Property tax credit runs with the land. new text end

new text begin The reduced value tax balance
credit determined under subdivision 2 must be applied against taxes due on the property
without regard to a change in ownership of the property or a change in the person liable
for paying taxes on the property.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for appeals, orders, and abatements
in 2016 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2014, section 275.025, is amended to read:

275.025 STATE GENERAL TAX.

Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy deleted text begin base amount deleted text end new text begin for commercial-industrial property new text end is
deleted text begin $592,000,000 deleted text end new text begin $599,043,000 new text end for taxes payable in deleted text begin 2002 deleted text end new text begin 2016. The state general levy for
seasonal recreational property is $12,018,000 for taxes payable in 2016 new text end . For taxes payable
in subsequent years, the levy deleted text begin base amount is increased deleted text end new text begin amounts are reduced new text end each year
by deleted text begin multiplying the levy base amount for the prior year by the sum of one plus the rate of
increase, if any, in the implicit price deflator for government consumption expenditures
and gross investment for state and local governments prepared by the Bureau of Economic
Analysts of the United States Department of Commerce for the 12-month period ending
March 31 of the year prior to the year the taxes are payable deleted text end new text begin 16.7 percent of the payable
2016 amounts. The levy amounts are $0 for taxes payable in 2022 and thereafter new text end . The tax
under this section is not treated as a local tax rate under section 469.177 and is not the
levy of a governmental unit under chapters 276A and 473F.

The commissioner shall increase or decrease the preliminary or final deleted text begin rate deleted text end new text begin rates new text end for a
year as necessary to account for errors and tax base changes that affected a preliminary or
final rate for either of the two preceding years. Adjustments are allowed to the extent that
the necessary information is available to the commissioner at the time the rates for a year
must be certified, and for the following reasons:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under
section 275.29 that was not reported on the abstracts of assessment submitted under
section 270C.89 for the same year.

The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.

Subd. 2.

Commercial-industrial tax capacity.

For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property
classified as class 3 or class 5(1) under section 273.13, deleted text begin except for deleted text end new text begin excluding: (1) the first
$500,000 of market value of each parcel of commercial-industrial net tax capacity as
defined under section 273.13, subdivision 24, clauses (1) and (2), (2) new text end electric generation
attached machinery under class 3 new text begin , new text end and new text begin (3) new text end property described in section 473.625. County
commercial-industrial tax capacity amounts are not adjusted for the captured net tax
capacity of a tax increment financing district under section 469.177, subdivision 2, the
net tax capacity of transmission lines deducted from a local government's total net tax
capacity under section 273.425, or fiscal disparities contribution and distribution net tax
capacities under chapter 276A or 473F. new text begin For purposes of this subdivision, the procedures
for determining eligibility for tier 1 under section 273.13, subdivision 24, clause (1),
shall apply in determining the portion of a property eligible to be considered within the
first $500,000 of market value.
new text end

Subd. 3.

Seasonal residential recreational tax capacity.

For the purposes of this
section, "seasonal residential recreational tax capacity" means the tax capacity of tier III of
class 1c under section 273.13, subdivision 22, and all class 4c(1), 4c(3)(ii), and 4c(12)
property under section 273.13, subdivision 25, deleted text begin except that deleted text end new text begin excluding new text end the first deleted text begin $76,000
deleted text end new text begin $250,000 new text end of market value of each noncommercial class 4c(12) property deleted text begin has a tax capacity
for this purpose equal to 40 percent of its tax capacity under section 273.13 deleted text end .

Subd. 4.

Apportionment and levy of state general tax.

deleted text begin Ninety-five percent of deleted text end The
state general tax must be levied by applying a uniform rate to all commercial-industrial tax
capacity and deleted text begin five percent of the state general tax must be levied by applying deleted text end a uniform
rate to all seasonal residential recreational tax capacity. On or before October 1 each year,
the commissioner of revenue shall certify the preliminary state general levy rates to each
county auditor that must be used to prepare the notices of proposed property taxes for taxes
payable in the following year. By January 1 of each year, the commissioner shall certify the
final state general levy deleted text begin rate deleted text end new text begin rates new text end to each county auditor that shall be used in spreading taxes.

new text begin Subd. 5. new text end

new text begin Underserved municipalities distribution. new text end

new text begin (a) Any municipality that:
new text end

new text begin (1) lies wholly or partially within the metropolitan area as defined under section
473.121, subdivision 2, but outside the transit taxing district as defined under section
473.446, subdivision 2; and
new text end

new text begin (2) has a net fiscal disparities contribution equal to or greater than eight percent of
its total taxable net tax capacity,
new text end

new text begin is eligible for a distribution from the proceeds of the state general levy imposed on
taxpayers within the municipality.
new text end

new text begin (b) The distribution is equal to (1) the municipality's net tax capacity tax rate, times
(2) the municipality's net fiscal disparities contribution in excess of eight percent of its
total taxable net tax capacity; provided, however, that the distribution may not exceed the
tax under this section imposed on taxpayers within the municipality.
new text end

new text begin (c) The distribution under this subdivision must be paid to the qualifying
municipality at the same time taxes are settled under sections 276.09 to 276.111.
new text end

new text begin (d) For purposes of this subdivision, the following terms have the meanings given.
new text end

new text begin (1) "Municipality" means a home rule or statutory city, or a town, except that in the
case of a city that lies only partially within the metropolitan area, municipality means the
portion of the city lying within the metropolitan area.
new text end

new text begin (2) "Net fiscal disparities contribution" means a municipality's fiscal disparities
contribution tax capacity minus its distribution net tax capacity.
new text end

new text begin (3) "Total taxable net tax capacity" means the total net tax capacity of all properties
in the municipality under section 273.13 minus (i) the net fiscal disparities contribution,
and (ii) the municipality's tax increment captured net tax capacity.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 10.

Minnesota Statutes 2014, section 275.065, subdivision 1, is amended to read:

Subdivision 1.

Proposed levy.

(a) Notwithstanding any law or charter to the
contrary, on or before September 30, each county deleted text begin and each deleted text end new text begin , new text end home rule charter or statutory
city new text begin , and special taxing district, excluding the Metropolitan Council and the Metropolitan
Mosquito Control District, new text end shall certify to the county auditor the proposed property tax
levy for taxes payable in the following year. new text begin The proposed levy certification date for
the Metropolitan Council shall be as prescribed in sections 473.249 and 473.446. The
proposed levy certification date for the Metropolitan Mosquito Control District shall be
as prescribed in section 473.711.
new text end

(b) Notwithstanding any law or charter to the contrary, on or before September 15,
each town deleted text begin and each special taxing district deleted text end new text begin , the Metropolitan Council, and the Metropolitan
Mosquito Control District new text end shall adopt and certify to the county auditor a proposed property
tax levy for taxes payable in the following year. For towns, the final certified levy shall
also be considered the proposed levy.

(c) On or before September 30, each school district that has not mutually agreed
with its home county to extend this date shall certify to the county auditor the proposed
property tax levy for taxes payable in the following year. Each school district that has
agreed with its home county to delay the certification of its proposed property tax levy
must certify its proposed property tax levy for the following year no later than October
7. The school district shall certify the proposed levy as:

(1) a specific dollar amount by school district fund, broken down between
voter-approved and non-voter-approved levies and between referendum market value
and tax capacity levies; or

(2) the maximum levy limitation certified by the commissioner of education
according to section 126C.48, subdivision 1.

(d) If the board of estimate and taxation or any similar board that establishes
maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter to the county auditor by the
date specified in paragraph (a), the city shall be deemed to have certified its levies for
those taxing jurisdictions.

(e) For purposes of this section, "special taxing district" means a special taxing
district as defined in section 275.066. Intermediate school districts that levy a tax
under chapter 124 or 136D, joint powers boards established under sections 123A.44 to
123A.446, and Common School Districts No. 323, Franconia, and No. 815, Prinsburg, are
also special taxing districts for purposes of this section.

(f) At the meeting at which a taxing authority, other than a town, adopts its proposed
tax levy under this subdivision, the taxing authority shall announce the time and place
of its subsequent regularly scheduled meetings at which the budget and levy will be
discussed and at which the public will be allowed to speak. The time and place of those
meetings must be included in the proceedings or summary of proceedings published in the
official newspaper of the taxing authority under section 123B.09, 375.12, or 412.191.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with proposed levy
certifications for taxes payable in 2016.
new text end

Sec. 11.

Minnesota Statutes 2014, section 278.12, is amended to read:

278.12 REFUNDS OF OVERPAYMENT.

If upon final determination the petitioner has paid more than the amount so
determined to be due, judgment shall be entered in favor of the petitioner for such excess,
and upon filing a copy thereof with the county auditor the auditor shall forthwith draw a
warrant upon the county treasurer for the payment thereof; provided that, with the consent
of the petitioner, the county auditor may, in lieu of drawing such warrant, issue to the
petitioner a certificate stating the amount of such judgment, which amount may be used
to apply upon any taxes due or to become due new text begin over a prescribed period of years new text end for the
taxing district or districts whose taxes or assessments are reduced, or their successors in
the event of a reorganization or reincorporation of any such taxing district. In the event the
auditor shall issue a warrant for refund or certificates, the amount thereof shall be charged
to the state and other taxing districts in proportion to the amount of their respective taxes
included in the levy and deduct the same in the subsequent distribution of any tax proceeds
to the state or such taxing districts, and upon receiving any such certificate in payment of
other taxes, the amount thereof shall be distributed to the state and other taxing districts
in proportion to the amount of their respective taxes included in the levy; provided that
if in the judgment the levy of one or more of the districts be found to be illegal, to the
extent that the tax so levied is reduced on account of the illegal levies, the amount to be
charged back shall be charged to the districts and the amount thereof deducted from
any distributions thereafter made to them.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds for overpayment of taxes
payable in 2015 and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2014, section 279.01, subdivision 1, is amended to read:

Subdivision 1.

Due dates; penalties.

deleted text begin Except as provided in subdivisions 3 to 5,
on May 16 or 21 days after the postmark date on the envelope containing the property
tax statement, whichever is later, a penalty accrues and thereafter is charged upon all
unpaid taxes on real estate on the current lists in the hands of the county treasurer. The
deleted text end new text begin (a) When the taxes against any tract or lot exceed $100, one-half of the amount of tax
due must be paid prior to May 16, and the remaining one-half must be paid prior to the
following October 16. If either tax amount is unpaid as of its due date, a new text end penalty is
new text begin imposed new text end at a rate of two percent on homestead property deleted text begin until May 31 deleted text end and four new text begin percent
on nonhomestead property. If complete payment has not been made by the first day of
the month following either due date, an additional penalty of two new text end percent on deleted text begin June 1. The
penalty on nonhomestead property is at a rate of four percent until May 31 deleted text end new text begin homestead
property new text end and deleted text begin eight deleted text end new text begin four new text end percent on deleted text begin June 1. This penalty does not accrue until June 1 of
each year, or 21 days after the postmark date on the envelope containing the property
tax statements, whichever is later, on commercial use real property used for seasonal
residential recreational purposes and classified as class 1c or 4c, and on other commercial
use real property classified as class 3a, provided that over 60 percent of the gross income
earned by the enterprise on the class 3a property is earned during the months of May,
June, July, and August. In order for the first half of the tax due on class 3a property to be
paid after May 15 and before June 1, or 21 days after the postmark date on the envelope
containing the property tax statement, whichever is later, without penalty, the owner of
the property must attach an affidavit to the payment attesting to compliance with the
income provision of this subdivision deleted text end new text begin nonhomestead property is imposed new text end . Thereafter,
for both homestead and nonhomestead property, on the first day of each new text begin subsequent
new text end month deleted text begin beginning July 1, up to and including October 1 following deleted text end new text begin through December new text end , an
additional penalty of one percent for each month accrues and is charged on all such unpaid
taxes provided that deleted text begin if the due date was extended beyond May 15 as the result of any delay
in mailing property tax statements no additional penalty shall accrue if the tax is paid by
the extended due date. If the tax is not paid by the extended due date, then all penalties
that would have accrued if the due date had been May 15 shall be charged. When the taxes
against any tract or lot exceed $100, one-half thereof may be paid prior to May 16 or
21 days after the postmark date on the envelope containing the property tax statement,
whichever is later; and, if so paid, no penalty attaches; the remaining one-half may be
paid at any time prior to October 16 following, without penalty; but, if not so paid, then
a penalty of two percent accrues thereon for homestead property and a penalty of four
percent on nonhomestead property. Thereafter, for homestead property, on the first day of
November an additional penalty of four percent accrues and on the first day of December
following, an additional penalty of two percent accrues and is charged on all such unpaid
taxes. Thereafter, for nonhomestead property, on the first day of November and December
following, an additional penalty of four percent for each month accrues and is charged on
all such unpaid taxes. If one-half of such taxes are not paid prior to May 16 or 21 days
after the postmark date on the envelope containing the property tax statement, whichever
is later, the same may be paid at any time prior to October 16, with accrued penalties to the
date of payment added, and thereupon no penalty attaches to the remaining one-half until
October 16 following deleted text end new text begin the penalty must not exceed eight percent in the case of homestead
property, or 12 percent in the case of nonhomestead property new text end .

new text begin (b) If the property tax statement was not postmarked prior to April 25, the first
half payment due date in paragraph (a) shall be 21 days from the postmark date of the
property tax statement, and all penalties referenced in paragraph (a) shall be determined
with regard to the later due date.
new text end

new text begin (c) In the case of a tract or lot with taxes of $100 or less, the due date and penalties
as specified in paragraph (a) or (b) for the first half payment shall apply to the entire
amount of the tax due.
new text end

new text begin (d) For commercial use real property used for seasonal residential recreational
purposes and classified as class 1c or 4c, and on other commercial use real property
classified as class 3a, provided that over 60 percent of the gross income earned by the
enterprise on the class 3a property is earned during the months of May, June, July, and
August, penalty does not accrue until June 1 of each year. For a class 3a property to
qualify for the later due date, the owner of the property must attach an affidavit to the
payment attesting to compliance with the income requirements of this paragraph.
new text end

new text begin (e) new text end This section applies to payment of personal property taxes assessed against
improvements to leased property, except as provided by section 277.01, subdivision 3.

new text begin (f) new text end A county may provide by resolution that in the case of a property owner that has
multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
installments as provided in this subdivision.

new text begin (g) new text end The county treasurer may accept payments of more or less than the exact amount
of a tax installment due. Payments must be applied first to the oldest installment that is due
but which has not been fully paid. If the accepted payment is less than the amount due,
payments must be applied first to the penalty accrued for the year or the installment being
paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
payment required as a condition for filing an appeal under section 278.03 or any other law,
nor does it affect the order of payment of delinquent taxes under section 280.39.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 13.

Minnesota Statutes 2014, section 279.01, subdivision 3, is amended to read:

Subd. 3.

Agricultural property.

deleted text begin (a) deleted text end In the case of class 1b agricultural homestead,
class 2a agricultural homestead property, and class 2a agricultural nonhomestead property,
no penalties shall attach to the second one-half property tax payment as provided in this
section if paid by November 15. Thereafter deleted text begin for class 1b agricultural homestead and class
2a homestead property, on November 16 following, a penalty of six percent shall accrue
and be charged on all such unpaid taxes and on December 1 following, an additional two
percent shall be charged on all such unpaid taxes. Thereafter for class 2a agricultural
nonhomestead property, on November 16 following, a penalty of eight percent shall accrue
and be charged on all such unpaid taxes and on December 1 following, an additional four
percent shall be charged on all such unpaid taxes deleted text end new text begin , penalties shall attach as provided in
subdivision 1 new text end .

If the owner of class 1b agricultural homestead or class 2a agricultural property
receives a consolidated property tax statement that shows only an aggregate of the taxes
and special assessments due on that property and on other property not classified as class
1b agricultural homestead or class 2a agricultural property, the aggregate tax and special
assessments shown due on the property by the consolidated statement will be due on
November 15.

deleted text begin (b) Notwithstanding paragraph (a), for taxes payable in 2010 and 2011, for any class
2b property that was subject to a second-half due date of November 15 for taxes payable
in 2009, the county shall not impose, or if imposed, shall abate penalty amounts in excess
of those that would apply as if the second-half due date were November 15.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 14.

Minnesota Statutes 2014, section 279.37, subdivision 2, is amended to read:

Subd. 2.

Installment payments.

(a) The owner of any such parcel, or any person to
whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
make and file with the county auditor of the county in which the parcel is located a written
offer to pay the current taxes each year before they become delinquent, or to contest
the taxes under chapter 278 and agree to confess judgment for the amount provided, as
determined by the county auditor. By filing the offer, the owner waives all irregularities
in connection with the tax proceedings affecting the parcel and any defense or objection
which the owner may have to the proceedings, and also waives the requirements of any
notice of default in the payment of any installment or interest to become due pursuant to
the composite judgment to be so entered. Unless the property is subject to subdivision 1a,
with the offer, the owner shall (i) tender one-tenth of the amount of the delinquent taxes,
costs, penalty, and interest, and (ii) tender all current year taxes and penalty due at the
time the confession of judgment is entered. In the offer, the owner shall agree to pay the
balance in nine equal installments, with interest as provided in section 279.03, payable
annually on installments remaining unpaid from time to time, on or before December 31
of each year following the year in which judgment was confessed.

(b) For property which qualifies under section 279.03, subdivision 2, paragraph (b),
each year the commissioner shall set the interest rate for offers made under paragraph (a)
at the greater of five percent or two percent above the prime rate charged by banks during
the six-month period ending on September 30 of that year, rounded to the nearest full
percent, provided that the rate must not exceed the maximum annum rate specified under
section 279.03, subdivision 1a. The rate of interest becomes effective on January 1 of the
immediately succeeding year. The commissioner's determination under this subdivision is
not a rule subject to the Administrative Procedure Act in chapter 14, including section
14.386. If a default occurs in the payments under any confessed judgment entered under
this paragraph, the taxes and penalties due are subject to the interest rate specified in
section 279.03.

For the purposes of this subdivision:

(1) the term "prime rate charged by banks" means the average predominant prime
rate quoted by commercial banks to large businesses, as determined by the Board of
Governors of the Federal Reserve System; and

(2) "default" means the cancellation of the confession of judgment due to
nonpayment of the current year tax or failure to make any installment payment required by
this confessed judgment within 60 days from the date on which payment was due.

(c) The interest rate established at the time judgment is confessed is fixed for the
duration of the judgment. By October 15 of each year, the commissioner of revenue must
determine the rate of interest as provided under paragraph (b) and, by November 1 of each
year, must certify the rate to the county auditor.

(d) A qualified property owner eligible to enter into a second confession of judgment
may do so at the interest rate provided in paragraph (b).

deleted text begin (e) Repurchase agreements or contracts for repurchase for properties being
repurchased under section 282.261 are not eligible to receive the interest rate under
paragraph (b).
deleted text end

deleted text begin (f) deleted text end new text begin (e) new text end The offer must be substantially as follows:

"To the court administrator of the district court of ........... county, I, .....................,
am the owner of the following described parcel of real estate located in ....................
county, Minnesota:

.............................. Upon that real estate there are delinquent taxes for the year ........., and
prior years, as follows: (here insert year of delinquency and the total amount of delinquent
taxes, costs, interest, and penalty). By signing this document I offer to confess judgment
in the sum of $...... and waive all irregularities in the tax proceedings affecting these
taxes and any defense or objection which I may have to them, and direct judgment to be
entered for the amount stated above, minus the sum of $............, to be paid with this
document, which is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and
interest stated above. I agree to pay the balance of the judgment in nine or four equal,
annual installments, with interest as provided in section 279.03, payable annually, on the
installments remaining unpaid. I agree to pay the installments and interest on or before
December 31 of each year following the year in which this judgment is confessed and
current taxes each year before they become delinquent, or within 30 days after the entry of
final judgment in proceedings to contest the taxes under chapter 278.

Dated .............., ......."

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and repurchases occurring
after June 30, 2015.
new text end

Sec. 15.

Minnesota Statutes 2014, section 282.01, subdivision 4, is amended to read:

Subd. 4.

Sale: method, requirements, effects.

The sale authorized under
subdivision 3 must be conducted by the county auditor at the county seat of the county in
which the parcels lie, except that in St. Louis and Koochiching Counties, the sale may
be conducted in any county facility within the county. The sale must not be for less than
the appraised value except as provided in subdivision 7a. The parcels must be sold for
cash only, unless the county board of the county has adopted a resolution providing for
their sale on terms, in which event the resolution controls with respect to the sale. When
the sale is made on terms other than for cash only (1) a payment of at least ten percent
of the purchase price must be made at the time of purchase, and the balance must be
paid in no more than ten equal annual installments, or (2) the payments must be made
in accordance with county board policy, but in no event may the board require more
than 12 installments annually, and the contract term must not be for more than ten years.
Standing timber or timber products must not be removed from these lands until an amount
equal to the appraised value of all standing timber or timber products on the lands at the
time of purchase has been paid by the purchaser. If a parcel of land bearing standing
timber or timber products is sold at public auction for more than the appraised value, the
amount bid in excess of the appraised value must be allocated between the land and the
timber in proportion to their respective appraised values. In that case, standing timber or
timber products must not be removed from the land until the amount of the excess bid
allocated to timber or timber products has been paid in addition to the appraised value of
the land. The purchaser is entitled to immediate possession, subject to the provisions of
any existing valid lease made in behalf of the state.

deleted text begin For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price
is subject to interest at the rate determined pursuant to section 549.09. deleted text end The unpaid balance
of the purchase price deleted text begin for sales occurring after December 31, 1990, deleted text end is subject to interest
at the new text begin same new text end rate new text begin as installment payments on confession of judgment for delinquent taxes
new text end determined in section deleted text begin 279.03, subdivision 1a deleted text end new text begin 279.37, subdivision 2, paragraph (b) new text end . deleted text begin The
interest rate is subject to change each year on the unpaid balance in the manner provided
for rate changes in section 549.09 or 279.03, subdivision 1a, whichever, is applicable.
Interest on the unpaid contract balance on sales occurring before July 1, 1982, is payable
at the rate applicable to the sale at the time that the sale occurred.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales occurring after June 30, 2015.
new text end

Sec. 16.

Minnesota Statutes 2014, section 282.261, subdivision 2, is amended to read:

Subd. 2.

Interest rate.

The unpaid balance on any repurchase contract approved
by the county board is subject to interest at the new text begin same new text end rate new text begin as installment payments on
confession of judgment for delinquent taxes new text end determined in section deleted text begin 279.03, subdivision 1a
deleted text end new text begin 279.37, subdivision 2, paragraph (b) new text end . deleted text begin The interest rate is subject to change each year on the
unpaid balance in the manner provided for rate changes in section 279.03, subdivision 1a.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for repurchases occurring after June
30, 2015.
new text end

Sec. 17.

Minnesota Statutes 2014, section 290C.10, is amended to read:

290C.10 WITHDRAWAL PROCEDURES.

new text begin (a) new text end An approved claimant under the sustainable forest incentive program for a
minimum of four years may notify the commissioner of the intent to terminate enrollment.
Within 90 days of receipt of notice to terminate enrollment, the commissioner shall
inform the claimant in writing, acknowledging receipt of this notice and indicating the
effective date of termination from the sustainable forest incentive program. Termination
of enrollment in the sustainable forest incentive program occurs on January 1 of the fifth
calendar year that begins after receipt by the commissioner of the termination notice.
After the commissioner issues an effective date of termination, a claimant wishing to
continue the land's enrollment in the sustainable forest incentive program beyond the
termination date must apply for enrollment as prescribed in section 290C.04. A claimant
who withdraws a parcel of land from this program may not reenroll the parcel for a period
of three years. Within 90 days after the termination date, the commissioner shall execute
and acknowledge a document releasing the land from the covenant required under this
chapter. The document must be mailed to the claimant and is entitled to be recorded. The
commissioner may allow early withdrawal from the Sustainable Forest Incentive Act
without penalty when the state of Minnesota, any local government unit, or any other entity
which has the power of eminent domain acquires title or possession to the land for a public
purpose notwithstanding the provisions of this section. In the case of deleted text begin such deleted text end new text begin an eligible
new text end acquisition, the commissioner shall execute and acknowledge a document releasing the
land acquired by the state, local government unit, or other entity from the covenant.

new text begin (b) Notwithstanding paragraph (a), the commissioner shall allow early withdrawal
from the Sustainable Forest Incentive Act without penalty when the state acquires a
permanent conservation easement on the enrolled property and the conservation easement
is at least as restrictive as the covenant required under section 290C.04. In the case of
an eligible easement acquisition, the commissioner shall execute and acknowledge a
document releasing the land subject to the easement from the covenant. new text end All other enrolled
land must remain in the program.

new text begin (c) Notwithstanding paragraph (a), the commissioner shall allow early withdrawal
from the Sustainable Forest Incentive Act without penalty for land that is subject to fee
or easement acquisition or lease to the state of Minnesota or a political subdivision
of the state for the public purpose of a paved trail. In the case of an eligible fee or
easement acquisition or lease under this paragraph, the commissioner shall execute and
acknowledge a document releasing the land subject to fee or easement acquisition or lease
by the state or political subdivision of the state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 18.

Minnesota Statutes 2014, section 473.446, subdivision 1, is amended to read:

Subdivision 1.

Metropolitan area transit tax.

(a) For the purposes of sections
473.405 to 473.449 and the metropolitan transit system, except as otherwise provided in
this subdivision, the council shall levy each year upon all taxable property within the
metropolitan area, defined in section 473.121, subdivision 2, a transit tax consisting of:

(1) an amount necessary to provide full and timely payment of certificates of
indebtedness, bonds, including refunding bonds or other obligations issued or to be issued
under section 473.39 by the council for purposes of acquisition and betterment of property
and other improvements of a capital nature and to which the council has specifically
pledged tax levies under this clause; and

(2) an additional amount necessary to provide full and timely payment of certificates
of indebtedness issued by the council, after consultation with the commissioner of
management and budget, if revenues to the metropolitan area transit fund in the fiscal year
in which the indebtedness is issued increase over those revenues in the previous fiscal
year by a percentage less than the percentage increase for the same period in the revised
Consumer Price Index for all urban consumers for the St. Paul-Minneapolis metropolitan
area prepared by the United States Department of Labor.

(b) Indebtedness to which property taxes have been pledged under paragraph (a),
clause (2), that is incurred in any fiscal year may not exceed the amount necessary to make
up the difference between (1) the amount that the council received or expects to receive
in that fiscal year from the metropolitan area transit fund and (2) the amount the council
received from that fund in the previous fiscal year multiplied by the percentage increase
for the same period in the revised Consumer Price Index for all urban consumers for the St.
Paul-Minneapolis metropolitan area prepared by the United States Department of Labor.

new text begin (c) No levy is allowed for expenses related to the operation of transit or paratransit
services. This paragraph must not be construed as limiting the council's ability to levy
for debt obligations under paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 19.

Minnesota Statutes 2014, section 473H.09, is amended to read:

473H.09 EARLY TERMINATION.

new text begin Subdivision 1. new text end

new text begin Public emergency. new text end

Termination of an agricultural preserve earlier
than a date derived through application of section 473H.08 may be permitted deleted text begin only deleted text end in the
event of a public emergency upon petition from the owner or authority to the governor.
The determination of a public emergency shall be by the governor through executive order
pursuant to sections 4.035 and 12.01 to 12.46. The executive order shall identify the
preserve, the reasons requiring the action and the date of termination.

new text begin Subd. 2. new text end

new text begin Death of owner. new text end

new text begin (a) Within 180 days of the death of an owner, an owner's
spouse, or other qualifying person, the surviving owner may elect to terminate the
agricultural preserve and the covenant allowing the land to be enrolled as an agricultural
preserve by notifying the authority on a form provided by the commissioner of agriculture.
Termination of a covenant under this subdivision must be executed and acknowledged in
the manner required by law to execute and acknowledge a deed.
new text end

new text begin (b) For purposes of this subdivision, the following definitions apply:
new text end

new text begin (1) "qualifying person" includes a partner, shareholder, trustee for a trust that the
decedent was the settlor or a beneficiary of, or member of an entity permitted to own
agricultural land and engage in farming under section 500.24 that owned the agricultural
preserve; and
new text end

new text begin (2) "surviving owner" includes the executor of the estate of the decedent, the trustee
for a trust that the decedent was the settlor or a beneficiary of, or an entity permitted to
own farm land under section 500.24 of which the decedent was a partner, shareholder, or
member.
new text end

new text begin (c) When an agricultural preserve is terminated under this subdivision, the property
is subject to additional taxes in an amount equal to 50 percent of the taxes actually
levied against the property for the current taxes payable year. The additional taxes are
extended against the property on the tax list for taxes payable in the current year. The
additional taxes must be distributed among the jurisdictions levying taxes on the property
in proportion to the current year's taxes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 20.

Minnesota Statutes 2014, section 473H.17, subdivision 1a, is amended to read:

Subd. 1a.

Allowed commercial and industrial operations.

(a) Commercial and
industrial operations are not allowed on land within an agricultural preserve except:

(1) small on-farm commercial or industrial operations normally associated with and
important to farming in the agricultural preserve area;

(2) storage use of existing farm buildings that does not disrupt the integrity of the
agricultural preserve; deleted text begin and
deleted text end

(3) small commercial use of existing farm buildings for trades not disruptive to the
integrity of the agricultural preserve such as a carpentry shop, small scale mechanics shop,
and similar activities that a farm operator might conduct deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) wireless communication installments and related equipment and structure
capable of providing technology potentially beneficial to farming activities.
new text end

(b) "Existing" in paragraph (a), clauses (2) and (3), means existing on August 1, 1987.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following enactment.
new text end

Sec. 21.

Laws 1996, chapter 471, article 3, section 51, is amended to read:

Sec. 51. RECREATION LEVY FOR SAWYER BY CARLTON COUNTY.

deleted text begin Subdivision 1. deleted text end

deleted text begin Levy authorized. deleted text end

Notwithstanding other law to the contrary, the
Carlton county board of commissioners may levy in and for the unorganized township of
Sawyer an amount up to deleted text begin $1,500 deleted text end new text begin $2,000 new text end annually for recreational purposes deleted text begin , beginning with
taxes payable in 1997 and ending with taxes payable in 2006 deleted text end .

deleted text begin Subd. 2. deleted text end

deleted text begin Effective date. deleted text end

deleted text begin This section is effective June 1, 1996, without local
approval.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the Carlton County
Board of Commissioners and its chief clerical officer comply with section 645.021,
subdivisions 2 and 3, and applies to taxes payable in 2015.
new text end

ARTICLE 4

ESTATE TAXES

Section 1.

Minnesota Statutes 2014, section 289A.10, subdivision 1, is amended to read:

Subdivision 1.

Return required.

In the case of a decedent who has an interest in
property with a situs in Minnesota, the personal representative must submit a Minnesota
estate tax return to the commissioner, on a form prescribed by the commissioner, if:

(1) a federal estate tax return is required to be filed; or

(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in
section 2001(b) of the Internal Revenue Code, made within three years of the date of the
decedent's death exceeds $1,200,000 for estates of decedents dying in 2014; deleted text begin $1,400,000
deleted text end new text begin $2,000,000 new text end for estates of decedents dying in 2015; deleted text begin $1,600,000 deleted text end new text begin $3,000,000 new text end for estates of
decedents dying in 2016; deleted text begin $1,800,000 deleted text end new text begin $4,000,000 new text end for estates of decedents dying in 2017;
deleted text begin and $2,000,000 deleted text end new text begin $5,000,000 new text end for estates of decedents dying in 2018 deleted text begin and deleted text end new text begin ; and only if a
federal estate tax return is required to be filed new text end thereafter.

The return must contain a computation of the Minnesota estate tax due. The return
must be signed by the personal representative.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for estates of decedents
dying after December 31, 2014.
new text end

Sec. 2.

Minnesota Statutes 2014, section 291.005, subdivision 1, as amended by Laws
2015, chapter 1, section 5, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income
interest for life and for which an election was made under section 291.03, subdivision 1d,
for Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through December 31, 2014.

(4) "Minnesota gross estate" means the federal gross estate of a decedent after
(a) excluding therefrom any property included in the estate which has its situs outside
Minnesota, and (b) including any property omitted from the federal gross estate which
is includable in the estate, has its situs in Minnesota, and was not disclosed to federal
taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota. new text begin The provisions of section 290.01, subdivision 7, paragraphs (c) and
(d), apply to determinations of domicile under this chapter.
new text end

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept
or located at the time of the decedent's death or for a gift of tangible personal property
within three years of death, the state or country in which it was normally kept or located
when the gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was
domiciled at death or for a gift of intangible personal property within three years of death,
the state or country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent.
If the pass-through entity is owned by a person or persons in addition to the decedent,
ownership of the property is attributed to the decedent in proportion to the decedent's
capital ownership share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of
whether it is taxed as an association or is disregarded for federal income tax purposes
under Code of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includible in the decedent's federal gross
estate; but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under
section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for estates of decedents
dying after December 31, 2014.
new text end

Sec. 3.

Minnesota Statutes 2014, section 291.016, subdivision 3, is amended to read:

Subd. 3.

Subtraction.

new text begin (a) new text end The value of qualified small business property under
section 291.03, subdivision 9, and the value of qualified farm property under section
291.03, subdivision 10, or the result of $5,000,000 minus the amount for the year of death
listed in clauses (1) to deleted text begin (5) deleted text end new text begin (4) new text end , whichever is less, may be subtracted in computing the
Minnesota taxable estate but must not reduce the Minnesota taxable estate to less than zero:

(1) $1,200,000 for estates of decedents dying in 2014;

(2) deleted text begin $1,400,000 deleted text end new text begin $2,000,000 new text end for estates of decedents dying in 2015;

(3) deleted text begin $1,600,000 deleted text end new text begin $3,000,000 new text end for estates of decedents dying in 2016; new text begin and
new text end

(4) deleted text begin $1,800,000 deleted text end new text begin $4,000,000 new text end for estates of decedents dying in 2017 deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (5) $2,000,000 deleted text end new text begin (b) The subtraction under paragraph (a) does not apply new text end for estates
of decedents dying in 2018 and thereafter.

new text begin (c) For estates of decedents dying after December 31, 2018, the value of the federal
exclusion amount under section 2010 of the Internal Revenue Code may be subtracted
in computing the Minnesota taxable estate, but must not reduce the Minnesota taxable
estate to less than zero. For purposes of this subdivision, the federal exclusion amount
equals the sum of:
new text end

new text begin (1) the basic exclusion amount under section 2010(c)(3) for the year in which the
decedent died; and
new text end

new text begin (2) any deceased spouse unused exclusion amount that is allowed in computing
the federal estate tax of the estate.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for estates of decedents
dying after December 31, 2014.
new text end

Sec. 4.

Minnesota Statutes 2014, section 291.03, subdivision 1, is amended to read:

Subdivision 1.

Tax amount.

The tax imposed must be computed by applying to the
Minnesota taxable estate the following schedule of rates and then the resulting amount
multiplied by a fraction, not greater than one, the numerator of which is the value of the
Minnesota gross estate plus the value of gifts under section 291.016, subdivision 2, clause
(3), with a Minnesota situs, and the denominator of which is the federal gross estate plus
the value of gifts under section 291.016, subdivision 2, clause (3):

(a) For estates of decedents dying in 2014:

Amount of Minnesota Taxable Estate	Rate of Tax
Not over $1,200,000	None
Over $1,200,000 but not over $1,400,000	nine percent of the excess over $1,200,000
Over $1,400,000 but not over $3,600,000	$18,000 plus ten percent of the excess over $1,400,000
Over $3,600,000 but not over $4,100,000	$238,000 plus 10.4 percent of the excess over $3,600,000
Over $4,100,000 but not over $5,100,000	$290,000 plus 11.2 percent of the excess over $4,100,000
Over $5,100,000 but not over $6,100,000	$402,000 plus 12 percent of the excess over $5,100,000
Over $6,100,000 but not over $7,100,000	$522,000 plus 12.8 percent of the excess over $6,100,000
Over $7,100,000 but not over $8,100,000	$650,000 plus 13.6 percent of the excess over $7,100,000
Over $8,100,000 but not over $9,100,000	$786,000 plus 14.4 percent of the excess over $8,100,000
Over $9,100,000 but not over $10,100,000	$930,000 plus 15.2 percent of the excess over $9,100,000
Over $10,100,000	$1,082,000 plus 16 percent of the excess over $10,100,000

deleted text begin (b) For estates of decedents dying in 2015:
deleted text end

deleted text begin Amount of Minnesota Taxable Estate deleted text end	deleted text begin Rate of Tax deleted text end
deleted text begin Not over $1,400,000 deleted text end	deleted text begin None deleted text end
deleted text begin Over $1,400,000 but not over $3,600,000 deleted text end	deleted text begin ten percent of the excess over $1,400,000 deleted text end
deleted text begin Over $3,600,000 but not over $6,100,000 deleted text end	deleted text begin $220,000 plus 12 percent of the excess over $3,600,000 deleted text end
deleted text begin Over $6,100,000 but not over $7,100,000 deleted text end	deleted text begin $520,000 plus 12.8 percent of the excess over $6,100,000 deleted text end
deleted text begin Over $7,100,000 but not over $8,100,000 deleted text end	deleted text begin $648,000 plus 13.6 percent of the excess over $7,100,000 deleted text end
deleted text begin Over $8,100,000 but not over $9,100,000 deleted text end	deleted text begin $784,000 plus 14.4 percent of the excess over $8,100,000 deleted text end
deleted text begin Over $9,100,000 but not over $10,100,000 deleted text end	deleted text begin $928,000 plus 15.2 percent of the excess over $9,100,000 deleted text end
deleted text begin Over $10,100,000 deleted text end	deleted text begin $1,080,000 plus 16 percent of the excess over $10,100,000 deleted text end

deleted text begin (c) For estates of decedents dying in 2016:
deleted text end

deleted text begin Amount of Minnesota Taxable Estate deleted text end	deleted text begin Rate of Tax deleted text end
deleted text begin Not over $1,600,000 deleted text end	deleted text begin None deleted text end
deleted text begin Over $1,600,000 but not over $2,600,000 deleted text end	deleted text begin ten percent of the excess over $1,600,000 deleted text end
deleted text begin Over $2,600,000 but not over $6,100,000 deleted text end	deleted text begin $100,000 plus 12 percent of the excess over $2,600,000 deleted text end
deleted text begin Over $6,100,000 but not over $7,100,000 deleted text end	deleted text begin $520,000 plus 12.8 percent of the excess over $6,100,000 deleted text end
deleted text begin Over $7,100,000 but not over $8,100,000 deleted text end	deleted text begin $648,000 plus 13.6 percent of the excess over $7,100,000 deleted text end
deleted text begin Over $8,100,000 but not over $9,100,000 deleted text end	deleted text begin $784,000 plus 14.4 percent of the excess over $8,100,000 deleted text end
deleted text begin Over $9,100,000 but not over $10,100,000 deleted text end	deleted text begin $928,000 plus 15.2 percent of the excess over $9,100,000 deleted text end
deleted text begin Over $10,100,000 deleted text end	deleted text begin $1,080,000 plus 16 percent of the excess over $10,100,000 deleted text end

deleted text begin (d) For estates of decedents dying in 2017:
deleted text end

deleted text begin Amount of Minnesota Taxable Estate deleted text end	deleted text begin Rate of Tax deleted text end
deleted text begin Not over $1,800,000 deleted text end	deleted text begin None deleted text end
deleted text begin Over $1,800,000 but not over $2,100,000 deleted text end	deleted text begin ten percent of the excess over $1,800,000 deleted text end
deleted text begin Over $2,100,000 but not over $5,100,000 deleted text end	deleted text begin $30,000 plus 12 percent of the excess over $2,100,000 deleted text end
deleted text begin Over $5,100,000 but not over $7,100,000 deleted text end	deleted text begin $390,000 plus 12.8 percent of the excess over $5,100,000 deleted text end
deleted text begin Over $7,100,000 but not over $8,100,000 deleted text end	deleted text begin $646,000 plus 13.6 percent of the excess over $7,100,000 deleted text end
deleted text begin Over $8,100,000 but not over $9,100,000 deleted text end	deleted text begin $782,000 plus 14.4 percent of the excess over $8,100,000 deleted text end
deleted text begin Over $9,100,000 but not over $10,100,000 deleted text end	deleted text begin $926,000 plus 15.2 percent of the excess over $9,100,000 deleted text end
deleted text begin Over $10,100,000 deleted text end	deleted text begin $1,078,000 plus 16 percent of the excess over $10,100,000 deleted text end

deleted text begin (e) deleted text end new text begin (b) new text end For estates of decedents dying in deleted text begin 2018 and thereafter deleted text end new text begin 2015 new text end :

Amount of Minnesota Taxable Estate	Rate of Tax
Not over $2,000,000	None
Over $2,000,000 but not over $2,600,000	ten percent of the excess over $2,000,000
Over $2,600,000 but not over $7,100,000	$60,000 plus 13 percent of the excess over $2,600,000
Over $7,100,000 but not over $8,100,000	$645,000 plus 13.6 percent of the excess over $7,100,000
Over $8,100,000 but not over $9,100,000	$781,000 plus 14.4 percent of the excess over $8,100,000
Over $9,100,000 but not over $10,100,000	$925,000 plus 15.2 percent of the excess over $9,100,000
Over $10,100,000	$1,077,000 plus 16 percent of the excess over $10,100,000

new text begin (c) For estates of decedents dying in 2016:
new text end

new text begin Amount of Minnesota Taxable Estate new text end	new text begin Rate of Tax new text end
new text begin Not over $3,000,000 new text end	new text begin None new text end
new text begin Over $3,000,000 but not over $8,100,000 new text end	new text begin 14 percent of the excess over $3,000,000 new text end
new text begin Over $8,100,000 but not over $9,100,000 new text end	new text begin $714,000 plus 14.4 percent of the excess over $8,100,000 new text end
new text begin Over $9,100,000 but not over $10,100,000 new text end	new text begin $858,000 plus 15.2 percent of the excess over $9,100,000 new text end
new text begin Over $10,100,000 new text end	new text begin $1,010,000 plus 16 percent of the excess over $10,100,000 new text end

new text begin (d) For estates of decedents dying in 2017:
new text end

new text begin Amount of Minnesota Taxable Estate new text end	new text begin Rate of tax new text end
new text begin Not over $4,000,000 new text end	new text begin None new text end
new text begin Over $4,000,000 but not over $9,100,000 new text end	new text begin 15 percent of the excess over $4,000,000 new text end
new text begin Over $9,100,000 but not over $10,100,000 new text end	new text begin $765,000 plus 15.2 percent of the excess over $9,100,000 new text end
new text begin Over $10,100,000 new text end	new text begin $917,000 plus 16 percent of the excess over $10,100,000 new text end

new text begin (e) For estates of decedents dying in 2018:
new text end

new text begin Amount of Minnesota Taxable Estate new text end	new text begin Rate of Tax new text end
new text begin Not over $5,000,000 new text end	new text begin None new text end
new text begin Over $5,000,000 new text end	new text begin 16 percent of the excess over $5,000,000 new text end

new text begin (f) For estates of decedents dying in 2019 and thereafter, 16 percent of the amount
of the Minnesota taxable estate.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for estates of decedents
dying after December 31, 2014.
new text end

Sec. 5.

Minnesota Statutes 2014, section 291.03, subdivision 1d, is amended to read:

Subd. 1d.

Elections.

(a) For the purposes of this section, the value of the Minnesota
taxable estate is determined by taking into account the deduction available under section
2056(b) of the Internal Revenue Code. An election under section 2056(b) of the Internal
Revenue Code may be made for Minnesota estate tax purposes regardless of whether the
election is made for federal estate tax purposes. The value of the gross estate includes the
value of any property in which the decedent had a qualifying income interest for life for
which an election was made under this subdivision. new text begin The authority to make an election
under this paragraph is limited to estates of decedents dying before January 1, 2019.
new text end

(b) Except for an election made under section 2056(b) of the Internal Revenue Code,
no federal election is allowable in computing the tax under this chapter unless the estate is
required to file a federal estate tax return, the election is made on the federal estate tax
return, and the election is allowed under federal law.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after
December 31, 2015.
new text end

ARTICLE 5

ECONOMIC DEVELOPMENT

Section 1.

new text begin [16A.1246] NO SPENDING FOR CERTAIN RAIL PROJECTS.
new text end

new text begin (a) Except as provided in paragraph (b), no appropriation or other state money,
whether in the general or another fund, must be expended or used for any costs related
to studying the feasibility of, planning for, designing, engineering, acquiring property
or constructing facilities for or related to, or development or operation of intercity or
interregional passenger rail facilities or operations between the city of Rochester, or
locations in its metropolitan area, and any location in the metropolitan area, as defined in
section 473.121, subdivision 2.
new text end

new text begin (b) The restrictions under this section do not apply to funds obtained from
contributions, grants, or other voluntary payments made by nongovernmental entities
from private sources.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
except it does not apply to funds appropriated under Laws 2009, chapter 93, article 1,
section 11, subdivision 5.
new text end

Sec. 2.

new text begin [16B.2965] PROPERTY LEASED FOR RAIL PROJECTS.
new text end

new text begin If a state official leases, loans, or otherwise makes available state lands, air rights, or
any other state property for use in connection with passenger rail facilities, as described
in section 16A.1246, the lease or other agreement must include or be secured by a
security bond or equivalent guarantee that allows the state to recover any costs it incurs
in connection with the rail project from a responsible third party, or secure source of
capital, if the passenger rail facilities are not constructed, are abandoned, or do not go into
operation. These costs include restoring state property to its original condition.
new text end

new text begin (b) For purposes of this section, "state official" includes the commissioner, the
commissioner of transportation, or any other state official with authority to enter into a
lease or other agreement providing for use by a nonstate entity of state property.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [116X.01] TITLE.
new text end

new text begin This chapter is titled and may be cited as the "Minnesota New Markets Jobs Act."
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 4.

new text begin [116X.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of this chapter, the terms defined in this
section have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Affiliate. new text end

new text begin (a) For the purposes of subdivision 10, "affiliate" includes:
new text end

new text begin (1) any entity, without regard to whether the entity is a qualified community
development entity under subdivision 10, that is the initial holder, either directly or
through one or more special purpose entities, of a qualified equity investment in the
qualified community development entity; and
new text end

new text begin (2) any entity, without regard to whether the entity is a qualified community
development entity under subdivision 10, that provides insurance or any other form of
guaranty to the ultimate recipient of tax credits under section 116X.03 with respect to a
recapture or forfeiture of tax credits under section 116X.06, either directly or through the
guaranty of any other economic benefit that is paid in lieu of the tax credits allowable
under section 116X.03.
new text end

new text begin (b) The determination of whether an entity is an affiliate must be made by taking
into account all relevant facts and circumstances, including the description of the proposed
amount, structure, and initial purchaser of the qualified equity investment required by
section 116X.05, subdivision 1, clause (4), and the determination assumes that the
information provided under section 116X.05, subdivision 1, clause (4), is true and
complete as of the date an application is submitted under section 116X.05.
new text end

new text begin Subd. 3. new text end

new text begin Applicable percentage. new text end

new text begin "Applicable percentage" means zero percent
for the first two credit allowance dates, eight percent for the third through sixth credit
allowance dates, and seven percent for the seventh credit allowance date.
new text end

new text begin Subd. 4. new text end

new text begin Code. new text end

new text begin "Code" or "the code" means the Internal Revenue Code of 1986 as
amended through the date in section 290.01, subdivision 19.
new text end

new text begin Subd. 5. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of employment
and economic development.
new text end

new text begin Subd. 6. new text end

new text begin Credit allowance date. new text end

new text begin "Credit allowance date" means for a qualified
equity investment:
new text end

new text begin (1) the date on which the investment is initially made; and
new text end

new text begin (2) each of the six anniversary dates of that date thereafter.
new text end

new text begin Subd. 7. new text end

new text begin Long-term debt security. new text end

new text begin "Long-term debt security" means any debt
instrument issued by a qualified community development entity at par value with an
original maturity date of at least seven years from the date of its issuance, with no
acceleration of repayment, amortization, or prepayment features prior to its original
maturity date. The qualified community development entity that issues the debt instrument
must not make cash interest payments on the debt instrument during the period from the
date of issuance to the final credit allowance date in an amount that exceeds the cumulative
operating income, as defined by regulations adopted under section 45D of the code of
the qualified community development entity for that period prior to giving effect to the
expense of the cash interest payments. This subdivision does not limit the holder's ability
to accelerate payments on the debt instrument if the issuer has defaulted on covenants
designed to ensure compliance with this section or section 45D of the code.
new text end

new text begin Subd. 8. new text end

new text begin Purchase price. new text end

new text begin "Purchase price" means the amount paid to the issuer of a
qualified equity investment for the qualified equity investment.
new text end

new text begin Subd. 9. new text end

new text begin Qualified active low-income community business. new text end

new text begin (a) "Qualified
active low-income community business" means a business as defined in section 45D
of the code and Code of Federal Regulations, title 26, section 1.45D-1, and that is
engaged primarily in a qualified high-technology field, as defined in section 116J.8737,
subdivision 2, paragraph (g), clause (1), manufacturing, mining, or forestry. A business
is considered a qualified active low-income community business for the duration of the
qualified community development entity's investment in, or loan to, the business if the
entity reasonably expects, when it makes the investment or loan, that the business will
continue to satisfy the requirements for being a qualified active low-income community
business, throughout the entire period of the investment or loan.
new text end

new text begin (b) Qualified active low-income community business excludes any business that
derives or projects to derive 15 percent or more of its annual revenue from activities
described in section 116J.8737, subdivision 2, paragraph (c), clause (4).
new text end

new text begin Subd. 10. new text end

new text begin Qualified community development entity. new text end

new text begin (a) "Qualified community
development entity" has the meaning given in section 45D of the code, if the entity
has entered into, for the current year or a prior year, an allocation agreement with the
Community Development Financial Institutions Fund of the United States Department of
the Treasury for credits authorized by section 45D of the code that includes Minnesota
within the service area in the allocation agreement. The term includes subsidiary
community development entities or affiliates of any qualified community development
entity, all of which are a single applicant for purposes of section 116X.05.
new text end

new text begin (b) Qualified community development entity excludes any regulated financial
institution that is subject to the Community Reinvestment Act of 1977, United States
Code, title 12, chapter 30, or any subsidiary or affiliate of a regulated financial institution.
new text end

new text begin (c) Paragraph (b) does not apply to a regulated financial institution, or its subsidiary
or affiliate, if the regulated financial institution is chartered by, or has an office located
in, Minnesota and the regulated financial institution otherwise meets the requirements of
paragraph (a).
new text end

new text begin Subd. 11. new text end

new text begin Qualified equity investment. new text end

new text begin (a) "Qualified equity investment" means
any equity investment in, or long-term debt security issued by, a qualified community
development entity that:
new text end

new text begin (1) is acquired after December 31, 2016, at its original issuance solely in exchange
for cash;
new text end

new text begin (2) has at least 95 percent of its cash purchase price used by the issuer to make
qualified low-income community investments in qualified active low-income community
businesses located in this state by the first anniversary of the initial credit allowance
date; and
new text end

new text begin (3) is designated by the issuer as a qualified equity investment under this subdivision
and is certified by the department as not exceeding the limitation in section 116X.05,
subdivision 4.
new text end

new text begin (b) Notwithstanding the restrictions on transferability contained in section 116X.04,
this term includes any qualified equity investment that does not meet the provisions of
paragraph (a) if the investment:
new text end

new text begin (1) is transferred to a subsequent holder; and
new text end

new text begin (2) was a qualified equity investment in the hands of any prior holder.
new text end

new text begin (c) Qualified equity investment does not include:
new text end

new text begin (1) any investment that entitles the holder to claim tax credits under section 45D
of the code; or
new text end

new text begin (2) any investment, the proceeds of which are used to make debt or equity
investments in, directly or indirectly, any other qualified community development entity.
new text end

new text begin Subd. 12. new text end

new text begin Qualified low-income community investment. new text end

new text begin "Qualified low-income
community investment" means any capital or equity investment in, or loan to, any
qualified active low-income community business. For any one qualified active low-income
community business, the maximum amount of qualified low-income community
investments that may be made in the business, on a collective basis with all of its
affiliates, with the proceeds of qualified equity investments that have been certified under
section 116X.05, is $10,000,000 whether made by one or several qualified community
development entities.
new text end

new text begin Subd. 13. new text end

new text begin Tax liability. new text end

new text begin "Tax liability" means (1) the liability for tax under chapter
290, or (2) the liability for tax incurred by any entity under chapter 297I.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 5.

new text begin [116X.03] CREDIT ESTABLISHED.
new text end

new text begin (a) Any entity that makes a qualified equity investment earns a vested right to
credit against the entity's tax liability under this section that may be utilized as described
in paragraphs (b) to (e).
new text end

new text begin (b) On each credit allowance date of the qualified equity investment, the entity, or
a subsequent holder of the qualified equity investment, may use a portion of the credit
during the taxable year, including the credit allowance date.
new text end

new text begin (c) The credit amount equals the applicable percentage for the credit allowance date
multiplied by the purchase price paid to the issuer of the qualified equity investment.
new text end

new text begin (d) The amount of the credit claimed by an entity must not exceed the amount of the
entity's tax liability for the tax year for which the credit is claimed. Any amount of tax
credit that the entity is prohibited from claiming in a taxable year as a result of this chapter
may be carried forward for use in any subsequent taxable year.
new text end

new text begin (e) An entity claiming a credit under this chapter is not required to pay any additional
retaliatory tax levied under section 297I.05 as a result of claiming that credit. In addition,
it is the intent of this section that an entity claiming a credit under this chapter is not
required to pay any additional tax as a result of claiming that credit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 6.

new text begin [116X.04] TRANSFERABILITY.
new text end

new text begin No tax credit claimed under this chapter is refundable or saleable on the open
market. However, a participating investor may transfer credits to an affiliated insurance
company, if it notifies the commissioner in writing. Tax credits earned by a partnership,
limited liability company, S corporation, or other "pass-through" entity may be allocated
to the partners, members, or shareholders of the entity for their direct use under the
provisions of any agreement among those partners, members, or shareholders. Any
allocation of tax credits made to a partner, member, or shareholder under this section is
not a sale of the tax credits for purposes of this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 7.

new text begin [116X.05] CERTIFICATION OF QUALIFIED EQUITY INVESTMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin A qualified community development entity that seeks
to have an equity investment or long-term debt security designated as a qualified equity
investment and eligible for tax credits under this chapter may apply to the commissioner
on or after December 31, 2016. The application must include the following:
new text end

new text begin (1) evidence of the applicant's certification as a qualified community development
entity, including evidence of the service area of the entity that includes Minnesota;
new text end

new text begin (2) a copy of the allocation agreement executed by the applicant, or its controlling
entity, and the Community Development Financial Institutions Fund under section
116X.02, subdivision 10;
new text end

new text begin (3) a certificate executed by an executive officer of the applicant attesting that the
allocation agreement remains in effect and has not been revoked or canceled by the
Community Development Financial Institutions Fund;
new text end

new text begin (4) evidence that the applicant or its controlling entity has received more than one
allocation of qualified equity investment authority from the Community Development
Financial Institutions Fund, at least one of which must have been received on or after
January 1, 2013;
new text end

new text begin (5) evidence that the applicant, its controlling entity, and subsidiary qualified
community development entities of the controlling entity have collectively made at least
$25,000,000 in qualified low-income community investments under the federal new
markets tax credit program or under new markets tax credit programs in other states with a
maximum qualifying low-income community investment size of $5,000,000 per business;
new text end

new text begin (6) a description of the proposed amount, structure, and initial purchaser of the
qualified equity investment;
new text end

new text begin (7) the minimum amount of the qualified equity investment that the qualified
community development entity is willing to accept if the amount proposed to be certified
under clause (4) is less than the applicant's proposed amount of qualified equity investment;
new text end

new text begin (8) a plan describing the proposed investment of the proceeds of the qualified equity
investment, including the types of qualified active low-income community businesses in
which the applicant expects to invest. Applicants are not required to identify qualified
active low-income community businesses in which they will invest when submitting
an application; and
new text end

new text begin (9) a nonrefundable application fee of $5,000. This fee must be paid to the
commissioner and is required for each application submitted.
new text end

new text begin The requirements of clauses (4) and (5) do not apply to a qualified community
development entity incorporated or headquartered in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Consideration of application. new text end

new text begin Within 30 days after receipt of a completed
application containing the information in subdivision 1, including the payment of the
application fee, the commissioner shall grant or deny the application in full or in part. If
the commissioner denies any part of the application, the commissioner shall inform the
qualified community development entity of the grounds for the denial. If the qualified
community development entity provides any additional information required by the
commissioner or otherwise completes its application within 15 days of the notice of
denial, the application is considered completed as of the original date of submission. If
the qualified community development entity fails to provide the information or complete
its application within the 15-day period, the application remains denied and must be
resubmitted in full with a new submission date.
new text end

new text begin Subd. 3. new text end

new text begin Certification. new text end

new text begin If the application required under this section is complete,
the commissioner shall certify the proposed equity investment or long-term debt security
as a qualified equity investment that is eligible for tax credits under this chapter, subject
to the limitations in subdivision 4. The commissioner shall provide written notice
of the certification to the qualified community development entity. The notice must
include the name of the initial purchaser of the qualified equity investment and the credit
amount. Before any tax credits are claimed under this chapter, the qualified community
development entity shall provide written notice to the commissioner of the names of the
entities eligible to claim the credits as a result of holding a qualified equity investment. If
the names of the entities that are eligible to utilize the credits change due to a transfer of a
qualified equity investment or an allocation or affiliate transfer under section 116X.04, the
qualified community development entity shall notify the commissioner of the change.
new text end

new text begin Subd. 4. new text end

new text begin Amount certified. new text end

new text begin The commissioner shall certify $250,000,000 in
qualified equity investments. The commissioner shall certify qualified equity investments
in the order applications are received by the commissioner. Applications received on
the same day are deemed to have been received simultaneously. For applications that
are complete and received on the same day, the commissioner shall certify, consistent
with remaining qualified equity investment capacity, the qualified equity investments
in proportionate percentages based upon the ratio of the amount of qualified equity
investment requested in an application to the total amount of qualified equity investments
requested in all applications received on the same day. If any amount of qualified equity
investment that would be certified under this section is less than the acceptable minimum
amount specified in the application as required by subdivision 1, clause (5), the application
is deemed withdrawn and the amount of qualified equity investment is proportionately
allocated among the other applicants under this subdivision.
new text end

new text begin Subd. 5. new text end

new text begin Transfer of authority. new text end

new text begin An approved applicant may transfer all or a
portion of its certified qualified equity investment authority to its controlling entity or
any subsidiary qualified community development entity of the controlling entity, if the
applicant provides the information required in the application with respect to the transferee,
and the applicant notifies the commissioner of the transfer within 30 days of the transfer.
new text end

new text begin Subd. 6. new text end

new text begin Cash investment. new text end

new text begin Within two years of the applicant receiving notice
of certification, the qualified community development entity, or any transferee under
subdivision 5, shall issue the qualified equity investment and receive cash in the amount of
the certified amount. The qualified community development entity or transferee under
subdivision 5 must provide the commissioner with evidence of the receipt of the cash
investment within ten business days after receipt. If the qualified community development
entity or any transferee under subdivision 5 does not receive the cash investment and issue
the qualified equity investment within two years following receipt of the certification
notice, the certification lapses and the entity may not issue the qualified equity investment
without reapplying to the commissioner for certification. Lapsed certifications revert
back to the commissioner and must be reissued, first, pro rata to other applicants whose
qualified equity investment allocations were reduced under subdivision 4 and, thereafter,
in accordance with the application process.
new text end

new text begin Subd. 7. new text end

new text begin New markets tax credit account. new text end

new text begin The new markets tax credit account is
established in the special revenue fund. The commissioner shall deposit the nonrefundable
application fee in the account and amounts in the account are appropriated to the
commissioner for the cost of administering this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 8.

new text begin [116X.06] DISALLOWANCE OF TAX CREDITS AND PENALTIES.
new text end

new text begin (a) The commissioner shall disallow any tax credits earned as a result of holding a
qualified equity investment, but not yet claimed, if:
new text end

new text begin (1) the issuer redeems or makes principal repayment with respect to a qualified
equity investment prior to the seventh anniversary of the issuance of the qualified equity
investment. In this case, the commissioner's disallowance of unclaimed tax credits are
proportionate to the amount of the redemption or repayment of the qualified equity
investment; or
new text end

new text begin (2) the issuer fails to invest an amount equal to 100 percent of the purchase price
of the qualified equity investment in qualified low-income community investments
in Minnesota within 12 months of the issuance of the qualified equity investment
and maintain at least 100 percent of the level of investment in qualified low-income
community investments in Minnesota until the last credit allowance date for the qualified
equity investment. For purposes of this section, an investment is considered held by an
issuer even if the investment has been sold or repaid if the issuer reinvests an amount
equal to the capital returned to or recovered by the issuer from the original investment,
exclusive of any profits realized, in another qualified low-income community investment
within 12 months of the receipt of the capital. An issuer is not required to reinvest capital
returned from qualified low-income community investments after the sixth anniversary
of the issuance of the qualified equity investment, if proceeds were used to make the
qualified low-income community investment, and the qualified low-income community
investment is considered to be held by the issuer through the seventh anniversary of
the qualified equity investment's issuance.
new text end

new text begin (b) Notwithstanding any contrary provision, any tax credit already claimed under
this chapter is not subject to recapture under paragraph (a), clause (1) or (2).
new text end

new text begin (c) If the commissioner disallows tax credits under this section, the commissioner
may also impose penalties on the qualified community development entity that issued the
qualified equity investment for which tax credits are disallowed, not to exceed one-half
of one percent of the equity investment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 9.

new text begin [116X.07] NOTICE OF NONCOMPLIANCE.
new text end

new text begin Enforcement of each of the disallowance and penalty provisions is subject to a
six-month cure period. No disallowance or penalty may be imposed until six months after
the qualified community development entity has received notice of the noncompliance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 10.

new text begin [116X.09] PREAPPROVAL OF INVESTMENTS.
new text end

new text begin Before making a proposed qualified low-income community investment, a
qualified community development entity may request from the commissioner a written
determination as to whether the proposed qualified low-income community investment
satisfies all applicable provisions of this chapter. The commissioner must provide a
determination and an explanation for it to a qualified community development entity
within ten business days after receiving the request. Any determination made by the
commissioner under this section is binding.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 11.

new text begin [116X.10] MANAGEMENT OF QUALIFIED EQUITY INVESTMENT
BY ANOTHER CERTIFIED DEVELOPMENT ENTITY PROHIBITED.
new text end

new text begin A qualified community development entity, its controlling entity, and its affiliates
must not contract with or otherwise use any third party or its affiliates to manage, control
the direction of, or source qualified low-income community investments into qualified
low-income community businesses that are approved for qualified investment under this
chapter, if the third party is another qualified community development entity or otherwise
is performing those functions for another community development entity.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 12.

new text begin [117.028] CONDEMNATION FOR CERTAIN RAIL FACILITIES
PROHIBITED.
new text end

new text begin Notwithstanding section 222.27, or any other law to the contrary, no condemning
authority may take property for the development or construction of or for facilities related
to intercity or interregional passenger rail facilities or operations between the city of
Rochester, or locations in its metropolitan area, and any location in the metropolitan area,
as defined in section 473.121, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13.

new text begin [290.0693] NEW MARKETS TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section, "qualified equity
investment" has the meaning given in section 116X.01, subdivision 1.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer that makes a qualified equity investment is
allowed a credit against the tax imposed under this chapter equal to the amount provided
under section 116X.03.
new text end

new text begin Subd. 3. new text end

new text begin Audit powers. new text end

new text begin Notwithstanding any issuance of credit by the
commissioner of employment and economic development under section 116X.05, the
commissioner may utilize any audit and examination powers under chapter 270C or 289A
to the extent necessary to verify that the taxpayer is eligible for the credit and to assess for
the amount of any improperly claimed credit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 14.

Minnesota Statutes 2014, section 297I.20, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin New markets tax credit. new text end

new text begin (a) A credit is allowed against the tax imposed
under this chapter, including the retaliatory tax under section 297I.05, subdivision 11,
equal to the amount of the credit allowed under section 116X.03 for the taxable year.
new text end

new text begin (b) Notwithstanding any certification by the commissioner of employment and
economic development under section 116X.05 of a qualified equity investment, the
commissioner retains and may use any audit and examination powers to the extent
necessary to verify that the taxpayer is eligible for the credit and to assess for the amount
of any improperly claimed credit.
new text end

new text begin (c) The credit does not affect the calculation of police and fire aid under section
69.021.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to premium tax returns originally due on or after December 31, 2015.
new text end

Sec. 15.

new text begin [459.36] NO SPENDING OF PUBLIC MONEY FOR CERTAIN RAIL
PROJECTS.
new text end

new text begin (a) Except as provided in paragraph (b), no city, county, special taxing district,
or destination medical center entity may spend or use any money, for any costs related
to studying the feasibility of, planning for, designing, engineering, acquiring property
or constructing facilities for or related to, or development or operation of intercity or
interregional passenger rail facilities or operations between the city of Rochester, or
locations in its metropolitan area, and any location in the metropolitan area, as defined
in section 473.121, subdivision 2. The provisions of this section apply to the statutory
and home rule charter cities, special taxing districts, and counties located in development
regions 10 and 11, as designated under section 462.385, subdivision 1. Destination
medical center entity includes the Destination Medical Center Corporation and agency
as those terms are defined in section 469.40, and any successor or related entity. Special
taxing district has the meaning given in section 275.066.
new text end

new text begin (b) The restrictions under this section do not apply to:
new text end

new text begin (1) funds the city or county obtains from contributions, grants, or other voluntary
payments made by nongovernmental entities from private sources; and
new text end

new text begin (2) expenditures for costs of public infrastructure, including public utilities, parking
facilities, a multi-mode transit hub, or similar projects located within the area of the
development district, as defined under section 469.40, and reflected in the development
plan adopted before the enactment of this section, that are intended to serve, and that are
made following the completed construction and commencement of operation of, privately
financed and operated intercity or interregional passenger rail facilities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
without local approval under Minnesota Statutes, section 645.023, subdivision 1, clause (c).
new text end

Sec. 16.

Minnesota Statutes 2014, section 469.169, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Additional border city allocations. new text end

new text begin (a) In addition to the tax reductions
authorized in subdivisions 12 to 19, the commissioner shall annually allocate $1,000,000
for tax reductions to border city enterprise zones in cities located on the western border
of the state. The commissioner shall allocate these amounts among cities on a per capita
basis. Allocations made under this subdivision may be used for tax reductions under
sections 469.171, 469.1732, and 469.1734, or for other offsets of taxes imposed on
or remitted by businesses located in the enterprise zone, but only if the municipality
determines that the granting of the tax reduction or offset is necessary to retain a business
within or attract a business to the zone.
new text end

new text begin (b) The allocations under this subdivision do not cancel or expire, but remain
available until used by the city.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 17.

Minnesota Statutes 2014, section 469.174, subdivision 12, is amended to read:

Subd. 12.

Economic development district.

"Economic development district"
means a type of tax increment financing district which consists of any project, or portions
of a project, which the authority finds to be in the public interest because:

(1) it will discourage commerce, industry, or manufacturing from moving their
operations to another state or municipality; deleted text begin or
deleted text end

(2) it will result in increased employment in the state; deleted text begin or
deleted text end

(3) it will result in preservation and enhancement of the tax base of the state new text begin ; or
new text end

new text begin (4) it satisfies the requirements of a workforce housing project under section
469.176, subdivision 4c, paragraph (d) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification is made after June 30, 2015.
new text end

Sec. 18.

Minnesota Statutes 2014, section 469.174, subdivision 14, is amended to read:

Subd. 14.

Administrative expenses.

"Administrative expenses" means all
expenditures of an authority other than:

(1) amounts paid for the purchase of land;

(2) amounts paid to contractors or others providing materials and services, including
architectural and engineering services, directly connected with the physical development
of the real property in the project;

(3) relocation benefits paid to or services provided for persons residing or businesses
located in the project;

(4) amounts used to pay principal or interest on, fund a reserve for, or sell at a
discount bonds issued pursuant to section 469.178; deleted text begin or
deleted text end

(5) amounts used to pay other financial obligations to the extent those obligations
were used to finance costs described in clauses (1) to (3) deleted text begin . deleted text end new text begin ; or
new text end

new text begin (6) usual and customary maintenance costs necessary for the preservation of
property acquired or constructed with tax increments and owned by the authority or the
municipality, including, without limitation, amounts needed for ordinary and extraordinary
repairs and maintenance, and capital reserves in an amount not greater than ten percent of
the market value of the property.
new text end

For districts for which the requests for certifications were made before August 1,
1979, or after June 30, 1982, "administrative expenses" includes amounts paid for services
provided by bond counsel, fiscal consultants, and planning or economic development
consultants.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to all districts, regardless of when the request for certification was made.
new text end

Sec. 19.

Minnesota Statutes 2014, 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, 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

(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 item do not apply if the district is a housing district;

(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;

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

new text begin (f) Before or at the time of approval of the tax increment financing plan for a district
to be used to fund a workforce housing project under section 469.176, subdivision 4c,
paragraph (d), the municipality shall make the following findings and shall set forth in
writing the reasons and supporting facts for each determination:
new text end

new text begin (1) the city is located outside of the metropolitan area, as defined in section 473.121,
subdivision 2;
new text end

new text begin (2) the average vacancy rate for rental housing located in the municipality and in
any statutory or home rule charter city located within 15 miles or less of the boundaries
of the municipality has been three percent or less for at least the immediately preceding
two-year period;
new text end

new text begin (3) at least one business located in the municipality or within 15 miles of the
municipality that employ a minimum of 20 full-time equivalent employees in aggregate
has provided a written statement to the municipality indicating that the lack of available
rental housing has impeded their ability to recruit and hire employees; and
new text end

new text begin (4) the municipality and the development authority intend to use increments from
the district for the development of rental housing, new modular homes, new manufactured
homes, or new manufactured homes on leased land or in a manufactured home park to
serve employees of businesses located in the municipality or surrounding area.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification is made after June 30, 2015.
new text end

Sec. 20.

Minnesota Statutes 2014, section 469.176, subdivision 4, is amended to read:

Subd. 4.

Limitation on use of tax increment; general rule.

All revenues derived
from tax increment shall be used in accordance with the tax increment financing plan. The
revenues shall be used solely for the following purposes: (1) to pay the principal of and
interest on bonds issued to finance a project; (2) by a rural development financing authority
for the purposes stated in section 469.142, by a port authority or municipality exercising the
powers of a port authority to finance or otherwise pay the cost of redevelopment pursuant to
sections 469.048 to 469.068, by an economic development authority to finance or otherwise
pay the cost of redevelopment pursuant to sections 469.090 to 469.108, by a housing and
redevelopment authority or economic development authority to finance or otherwise pay
public redevelopment costs pursuant to sections 469.001 to 469.047, by a municipality or
economic development authority to finance or otherwise pay the capital and administration
costs of a development district pursuant to sections 469.124 to 469.133, by a municipality
or authority to finance or otherwise pay the costs of developing and implementing a
development action response plan, by a municipality or redevelopment agency to finance
or otherwise pay premiums for insurance or other security guaranteeing the payment when
due of principal of and interest on the bonds pursuant to chapter 462C, sections 469.152 to
469.165, or both, or to accumulate and maintain a reserve securing the payment when due
of the principal of and interest on the bonds pursuant to chapter 462C, sections 469.152 to
469.165, or both, which revenues in the reserve shall not exceed, subsequent to the fifth
anniversary of the date of issue of the first bond issue secured by the reserve, an amount
equal to 20 percent of the aggregate principal amount of the outstanding and nondefeased
bonds secured by the reserve deleted text begin . deleted text end new text begin ; and (3) to pay the costs listed in section 469.174, subdivision
14, but not in excess of the limitation on administrative expenses under subdivision 3.
Tax increment as defined in section 469.174, subdivision 25, clause (2), may be used to
pay usual and customary operation and maintenance costs, including, but not limited to,
amounts needed for capital reserves in an amount not greater than ten percent of the
market value of the property, and ordinary and extraordinary repairs and maintenance of
the property purchased by the authority or the municipality with tax increments.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to all districts, regardless of when the request for certification was made.
new text end

Sec. 21.

Minnesota Statutes 2014, section 469.176, subdivision 4c, is amended to read:

Subd. 4c.

Economic development districts.

(a) Revenue derived from tax increment
from an economic development district may not be used to provide improvements, loans,
subsidies, grants, interest rate subsidies, or assistance in any form to developments
consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
facilities (determined on the basis of square footage) are used for a purpose other than:

(1) the manufacturing or production of tangible personal property, including
processing resulting in the change in condition of the property;

(2) warehousing, storage, and distribution of tangible personal property, excluding
retail sales;

(3) research and development related to the activities listed in clause (1) or (2);

(4) telemarketing if that activity is the exclusive use of the property;

(5) tourism facilities; deleted text begin or
deleted text end

(6) space necessary for and related to the activities listed in clauses (1) to (5) new text begin ; or
new text end

new text begin (7) a workforce housing project that satisfies the requirements of paragraph (d) new text end .

(b) Notwithstanding the provisions of this subdivision, revenues derived from tax
increment from an economic development district may be used to provide improvements,
loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
square feet of any separately owned commercial facility located within the municipal
jurisdiction of a small city, if the revenues derived from increments are spent only to
assist the facility directly or for administrative expenses, the assistance is necessary to
develop the facility, and all of the increments, except those for administrative expenses,
are spent only for activities within the district.

(c) A city is a small city for purposes of this subdivision if the city was a small city
in the year in which the request for certification was made and applies for the rest of
the duration of the district, regardless of whether the city qualifies or ceases to qualify
as a small city.

new text begin (d) A project qualifies as a workforce housing project under this subdivision if
increments from the district are used exclusively to assist in the acquisition of property;
construction of improvements; and provision of loans or subsidies, grants, interest
rate subsidies, public infrastructure, and related financing costs for rental housing
developments in the municipality, and if the governing body of the municipality made the
findings for the project required by section 469.175, subdivision 3, paragraph (f).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification is made after June 30, 2015.
new text end

Sec. 22.

Minnesota Statutes 2014, section 469.1761, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Income limits; state grant and loan program projects. new text end

new text begin For a project
receiving a loan or grant from the Housing Finance Agency challenge program under
section 462A.33 or a grant from the Department of Employment and Economic
Development for workforce housing, the income limits under this section do not apply
and the project is deemed to be a housing project within the meaning of section 469.174,
subdivision 11.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification is made after June 30, 2015.
new text end

Sec. 23.

Minnesota Statutes 2014, 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) deleted text begin ,
(3), and (4) deleted text end new text begin to (5) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 24.

Minnesota Statutes 2014, section 469.1763, subdivision 2, is amended to read:

Subd. 2.

Expenditures outside district.

(a) For each tax increment financing
district, an amount equal to at least 75 percent of the total revenue derived from tax
increments paid by properties in the district must be expended on activities in the district
or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification
was made after June 30, 1995, the in-district percentage for purposes of the preceding
sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
increments paid by properties in the district may be expended, through a development fund
or otherwise, on activities outside of the district but within the defined geographic area of
the project except to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification was
made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
20 percent. The deleted text begin revenue deleted text end new text begin revenues new text end derived from tax increments deleted text begin for deleted text end new text begin paid by properties in
new text end the district that are expended on costs under section 469.176, subdivision 4h, paragraph
(b), may be deducted first before calculating the percentages that must be expended within
and without the district.

(b) In the case of a housing district, a housing project, as defined in section 469.174,
subdivision 11, is an activity in the district.

(c) All administrative expenses are for activities outside of the district, except that
if the only expenses for activities outside of the district under this subdivision are for
the purposes described in paragraph (d), administrative expenses will be considered as
expenditures for activities in the district.

(d) The authority may elect, in the tax increment financing plan for the district,
to increase by up to ten percentage points the permitted amount of expenditures for
activities located outside the geographic area of the district under paragraph (a). As
permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
expenditures under paragraph (a), need not be made within the geographic area of the
project. Expenditures that meet the requirements of this paragraph are legally permitted
expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
To qualify for the increase under this paragraph, the expenditures must:

(1) be used exclusively to assist housing that meets the requirement for a qualified
low-income building, as that term is used in section 42 of the Internal Revenue Code; and

(2) not exceed the qualified basis of the housing, as defined under section 42(c) of
the Internal Revenue Code, less the amount of any credit allowed under section 42 of
the Internal Revenue Code; and

(3) be used to:

(i) acquire and prepare the site of the housing;

(ii) acquire, construct, or rehabilitate the housing; or

(iii) make public improvements directly related to the housing; or

(4) be used to develop housing:

(i) if the market value of the housing does not exceed the lesser of:

(A) 150 percent of the average market value of single-family homes in that
municipality; or

(B) $200,000 for municipalities located in the metropolitan area, as defined in
section 473.121, or $125,000 for all other municipalities; and

(ii) if the expenditures are used to pay the cost of site acquisition, relocation,
demolition of existing structures, site preparation, and pollution abatement on one or
more parcels, if the parcel contains a residence containing one to four family dwelling
units that has been vacant for six or more months and is in foreclosure as defined in
section 325N.10, subdivision 7, but without regard to whether the residence is the owner's
principal residence, and only after the redemption period has expired.

(e) For a district created within a biotechnology and health sciences industry zone
as defined in Minnesota Statutes 2012, section 469.330, subdivision 6, or for an existing
district located within such a zone, tax increment derived from such a district may be
expended outside of the district but within the zone only for expenditures required for the
construction of public infrastructure necessary to support the activities of the zone, land
acquisition, and other redevelopment costs as defined in section 469.176, subdivision 4j.
These expenditures are considered as expenditures for activities within the district. The
authority provided by this paragraph expires for expenditures made after the later of (1)
December 31, 2015, or (2) the end of the five-year period beginning on the date the district
was certified, provided that date was before January 1, 2016.

(f) The authority under paragraph (d), clause (4), expires on December 31, 2016.
Increments may continue to be expended under this authority after that date, if they are
used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
(a), if December 31, 2016, is considered to be the last date of the five-year period after
certification under that provision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 25.

Minnesota Statutes 2014, section 469.1763, subdivision 3, is amended to read:

Subd. 3.

Five-year rule.

(a) Revenues derived from tax increments new text begin paid by
properties in the district new text end 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;

(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;

(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,
paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
by subdivision 2, paragraph (e).

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

(c) For a redevelopment district or a renewal and renovation district certified after
June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph (a)
are extended to ten years after certification of the district. For a redevelopment district
certified after April 20, 2009, and before June 30, 2012, the five-year periods described in
paragraph (a) are extended to eight years after certification of the district. This extension is
provided primarily to accommodate delays in development activities due to unanticipated
economic circumstances.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 26.

Minnesota Statutes 2014, section 469.178, subdivision 7, is amended to read:

Subd. 7.

Interfund loans.

new text begin (a) new text end 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.

new text begin (b) Not later than 60 days after money is transferred, advanced, or spent, whichever
is earliest, new text end the loan or advance must be authorized deleted text begin , deleted text end new text begin : (1) new text end by resolution of the governing
body or of the authority, whichever has jurisdiction over the fund from which the advance
or loan is authorized deleted text begin , before money is transferred, advanced, or spent, whichever is
earliest deleted text end new text begin ; or (2) in writing by an appropriate officer of the municipality or the authority to
whom the municipality or authority has delegated by resolution power to administer and
set the terms and conditions of the interfund loan new text end .

new text begin (c) new text end The resolution may generally grant to new text begin the municipality or new text end the authority new text begin or an
appropriate officer thereof new text end the power to make interfund loans under one or more tax
increment financing plans or for one or more districts. new text begin The resolution may be adopted
or the interfund loan may be otherwise documented before or after the adoption of the
tax increment financing plan or the creation of the tax increment financing district from
which the advance or loan is to be repaid.
new text end

new text begin (d) new text end The terms and conditions for repayment of the loan must be provided in writing
deleted text begin and deleted text end new text begin . The written terms and conditions may be in any form, but must new text end include, at a
minimum, the principal amount, the interest rate, and maximum term. new text begin Written terms may
be modified or amended in writing by the municipality or the authority, or an appropriate
officer thereof, before decertification of the tax increment financing district from which
the interfund loan will be paid. new text end The maximum rate of interest permitted to be charged is
limited to the greater of the rates specified under section 270C.40 or 549.09 as of the date
the loan or advance is authorized, unless the written agreement states that the maximum
interest rate will fluctuate as the interest rates specified under section 270C.40 or 549.09
are from time to time adjusted. new text begin Loans or advances may be structured as draw-down or
line-of-credit obligations of the lending fund.
new text end

new text begin (e) The authority shall report in the annual report submitted pursuant to section
469.175, subdivision 6:
new text end

new text begin (1) the amount of any interfund loan or advance made in a calendar year; and
new text end

new text begin (2) any amendment of an interfund loan or advance made in a calendar year.
new text end

new text begin (f) An interfund loan or advance made by a municipality or an authority for any (1)
administrative expenses, (2) planning, inspection, architectural, engineering, surveying,
soil testing, and similar costs that are incurred before establishing a tax increment
financing district, or (3) transfers made in anticipation of a negative cash balance in a fund
for a temporary period not exceeding 12 months, is authorized under paragraph (a) and
is not subject to any additional requirements under paragraphs (b) to (d). The authority
shall report any interfund loan or advance made under this paragraph in the annual report
submitted under section 469.175, subdivision 6.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to all districts, regardless of when the request for certification was made.
new text end

Sec. 27.

Minnesota Statutes 2014, section 469.40, subdivision 11, as amended by Laws
2015, chapter 1, section 6, is amended to read:

Subd. 11.

Public infrastructure project.

(a) "Public infrastructure project" means
a project financed in part or in whole with public money in order to support the medical
business entity's development plans, as identified in the DMCC development plan. A
public infrastructure project may:

(1) acquire real property and other assets associated with the real property;

(2) demolish, repair, or rehabilitate buildings;

(3) remediate land and buildings as required to prepare the property for acquisition
or development;

(4) install, construct, or reconstruct elements of public infrastructure required to
support the overall development of the destination medical center development district
including, but not limited to, streets, roadways, utilities systems and related facilities,
utility relocations and replacements, network and communication systems, streetscape
improvements, drainage systems, sewer and water systems, subgrade structures and
associated improvements, landscaping, façade construction and restoration, wayfinding
and signage, and other components of community infrastructure;

(5) acquire, construct or reconstruct, and equip parking facilities and other facilities
to encourage intermodal transportation and public transit;

(6) install, construct or reconstruct, furnish, and equip parks, cultural, and
recreational facilities, facilities to promote tourism and hospitality, conferencing and
conventions, and broadcast and related multimedia infrastructure;

(7) make related site improvements including, without limitation, excavation,
earth retention, soil stabilization and correction, and site improvements to support the
destination medical center development district;

(8) prepare land for private development and to sell or lease land;

(9) provide costs of relocation benefits to occupants of acquired properties; and

(10) construct and equip all or a portion of one or more suitable structures on land
owned by the city for sale or lease to private development; provided, however, that the
portion of any structure directly financed by the city as a public infrastructure project must
not be sold or leased to a medical business entity.

(b) A public infrastructure project is not a business subsidy under section 116J.993.

(c) Public infrastructure project includes the new text begin planning, new text end preparation new text begin , new text end and modification
of the development plan under section 469.43 deleted text begin , and deleted text end new text begin . new text end The cost of that new text begin planning, new text end preparation new text begin ,
new text end and any modification is a capital cost of the public infrastructure project.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
the laws that are amended.
new text end

Sec. 28.

Minnesota Statutes 2014, section 469.43, is amended by adding a subdivision
to read:

new text begin Subd. 6a. new text end

new text begin Restriction on city funds to support nonprofit economic development
agency. new text end

new text begin The nonprofit economic development agency shall not require the city to pay
any amounts to the nonprofit economic development agency that are unrelated to public
infrastructure project costs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and applies retroactively from June 22, 2013.
new text end

Sec. 29.

Minnesota Statutes 2014, section 469.45, subdivision 1, is amended to read:

Subdivision 1.

Rochester, other local taxes authorized.

(a) Notwithstanding
section 477A.016 or any other contrary provision of law, ordinance, or city charter, and in
addition to any taxes the city may impose on these transactions under another statute or
law, the city of Rochester may, by ordinance, impose at a rate or rates, determined by the
city, any of the following taxes:

(1) a tax on the gross receipts from the furnishing for consideration of lodging and
related services as defined in section 297A.61, subdivision 3, paragraph (g), clause (2); the
city may choose to impose a differential tax based on the number of rooms in the facility;

(2) a tax on the gross receipts of food and beverages sold primarily for consumption
on the premises by restaurants and places of refreshment that occur in the city of
Rochester; the city may elect to impose the tax in a defined district of the city; and

(3) a tax on the admission receipts to entertainment and recreational facilities, as
defined by ordinance, in the city of Rochester.

(b) The provisions of section 297A.99, subdivisions 4 to 13, govern the
administration, collection, and enforcement of any tax imposed by the city under
paragraph (a).

(c) The proceeds of any taxes imposed under this subdivision, less refunds and
costs of collection, must be used by the city only to meet its share of obligations for
public infrastructure projects contained in the development plan and approved by the
corporation, including any associated financing costs new text begin or to pay any other costs qualifying
as a local matching contribution under section 469.47, subdivision 4 new text end . Any tax imposed
under paragraph (a) expires at the earlier of December 31, 2049, or when the city council
determines that sufficient funds have been raised from the tax plus all other local funding
sources authorized in Laws 2013, chapter 143, article 10, to meet the city obligation for
financing public infrastructure projects contained in the development plan and approved
by the corporation, including any associated financing costs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
the laws that are amended.
new text end

Sec. 30.

Minnesota Statutes 2014, section 469.45, subdivision 2, is amended to read:

Subd. 2.

General sales tax authority.

The city may elect to extend the existing
local sales and use tax under Laws 2013, chapter 143, article 10, section 13, or to impose
an additional rate of up to one quarter of one percent tax on sales and use under Laws
2013, chapter 143, article 10, section 11. The proceeds of any extended or additional taxes
imposed under this subdivision, less refunds and costs of collection, must be used by the
city only to meet its share of obligations for public infrastructure projects contained in the
development plan and approved by the corporation, including all financing costs. Revenues
collected in any year to meet the obligations must be used for payment of obligations or
expenses for public infrastructure projects approved by the corporation new text begin or of any other
costs qualifying as a local matching contribution under section 469.47, subdivision 4 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
the laws that are amended.
new text end

Sec. 31.

Minnesota Statutes 2014, section 469.47, subdivision 4, as amended by Laws
2015, chapter 1, section 10, is amended to read:

Subd. 4.

General aid; local matching contribution.

In order to qualify for general
state infrastructure aid, the city must enter a written agreement with the commissioner
that requires the city to make a qualifying local matching contribution to pay for
$128,000,000 of the cost of public infrastructure projects approved by the corporation,
including financing costs, using funds other than state aid received under this section. The
deleted text begin $128,000,000 deleted text end required local matching contribution is reduced by deleted text begin one-half of the deleted text end new text begin any
new text end amounts the city pays deleted text begin for operating and administrative costs deleted text end new text begin out of funds other than state aid
received under this section for the support, administration, or operations new text end of the corporation
new text begin and the economic development agency new text end up to a maximum amount agreed to by the board
and the city. new text begin These amounts include any costs the city incurs in providing services,
goods, or other support to the corporation or agency. new text end The agreement must provide for the
manner, timing, and amounts of the city contributions, including the city's commitment
for each year. Notwithstanding any law to the contrary, the agreement may provide that
the city contributions for public infrastructure project principal costs may be made over a
20-year period at a rate not greater than $1 from the city for each $2.55 from the state.
The local match contribution may be provided by the city from any source identified in
section 469.45 and any other local tax proceeds or other funds from the city and may
include providing funds to prepare the development plan, to assist developers undertaking
projects in accordance with the development plan, or by the city directly undertaking
public infrastructure projects in accordance with the development plan, provided the
projects have been approved by the corporation. City contributions that are in excess of
this ratio carry forward and are credited toward subsequent years. The commissioner and
city may agree to amend the agreement at any time in light of new information or other
appropriate factors. The city may enter into arrangements with the county to pay for or
otherwise meet the local matching contribution requirement. Any public infrastructure
project within the area that will be in the destination medical center development district
whose implementation is started or funded by the city after June 22, 2013, but before the
development plan is adopted, as provided by section 469.43, subdivision 1, will be included
for the purposes of determining the amount the city has contributed as required by this
section and the agreement with the commissioner, subject to approval by the corporation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
the laws that are amended.
new text end

Sec. 32.

new text begin [473.1467] NO SPENDING FOR CERTAIN RAIL PROJECTS.
new text end

new text begin (a) Except as provided in paragraph (b), the council must not spend or use any money
for any costs related to studying the feasibility of, planning for, designing, engineering,
acquiring property or constructing facilities for or related to, or development or operation
of intercity or interregional passenger rail facilities or operations between the city of
Rochester, or locations in its metropolitan area, and any location in the metropolitan area.
new text end

new text begin (b) The restrictions under this section do not apply to funds the council obtains from
contributions, grants, or other voluntary payments made by nongovernmental entities
from private sources.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective the day following
final enactment and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
and Washington.
new text end

Sec. 33.

Laws 2009, chapter 88, article 5, section 17, as amended by Laws 2010,
chapter 382, section 84, is amended to read:

Sec. 17. SEAWAY PORT AUTHORITY OF DULUTH; TAX INCREMENT
FINANCING DISTRICT; SPECIAL RULES.

(a) If the Seaway Port Authority of Duluth adopts a tax increment financing plan and
the governing body of the city of Duluth approves the plan for the tax increment financing
district consisting of one or more parcels identified as: 010-2730-00010; 010-2730-00020;
010-2730-00040; 010-2730-00050; 010-2730-00070; 010-2730-00080; 010-2730-00090;
010-2730-00100; new text begin 010-02730-00120; 010-02730-00130; 010-02730-00140;
new text end 010-2730-00160; 010-2730-00180; 010-2730-00200; 010-2730-00300; new text begin 010-02730-00320;
new text end 010-2746-01250; 010-2746-1330; 010-2746-01340; 010-2746-01350; 010-2746-1440;
010-2746-1380; 010-2746-01490; 010-2746-01500; 010-2746-01510; 010-2746-01520;
010-2746-01530; 010-2746-01540; 010-2746-01550; 010-2746-01560; 010-2746-01570;
010-2746-01580; 010-2746-01590; 010-3300-4560; 010-3300-4565; 010-3300-04570;
010-3300-04580; 010-3300-04640; 010-3300-04645; and 010-3300-04650, the five-year
rule under Minnesota Statutes, section 469.1763, subdivision 3, that activities must be
undertaken within a five-year period from the date of certification of the tax increment
financing district, must be considered to be met if the activities are undertaken within five
years after the date all qualifying parcels are delisted from the Federal Superfund list.

(b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4,
beginning in the sixth year following certification of the district requirement, will begin
in the sixth year following the date all qualifying parcels are delisted from the Federal
Superfund list.

(c) The action required under Minnesota Statutes, section 469.176, subdivision 6,
are satisfied if the action is commenced within four years after the date all qualifying
parcels are delisted from the Federal Superfund list and evidence of the action required is
submitted to the county auditor by February 1 of the fifth year following the year in which
all qualifying parcels are delisted from the Federal Superfund list.

(d) For purposes of this section, "qualifying parcels" means United States Steel
parcels listed in paragraph (a) and shown by the Minnesota Pollution Control Agency as part
of the USS Site (USEPA OU 02) that are included in the tax increment financing district.

(e) In addition to the reporting requirements of Minnesota Statutes, section 469.175,
subdivision 5, the Seaway Port Authority of Duluth shall report the status of all parcels
listed in paragraph (a) and shown as part of the USS Site (USEPA OU 02). The status report
must show the parcel numbers, the listed or delisted status, and if delisted, the delisting date.

new text begin (f) Notwithstanding Minnesota Statutes, section 469.178, subdivision 7, or any other
law to the contrary, the Seaway Port Authority of Duluth may establish an interfund loan
program before approval of the tax increment financing plan for or the establishment of
the district authorized by this section. The authority may make loans under this program
and the proceeds of the loans may be used for any permitted use of increments under
this law or Minnesota Statutes, section 469.176, for the district, and may be repaid with
increments from the district established under this section. This subdivision applies to any
action authorized by the Seaway Port Authority of Duluth on or after March 25, 2010.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivision 3.
new text end

Sec. 34.

Laws 2014, chapter 308, article 6, section 7, is amended to read:

Sec. 7. CITY OF EAGAN; TAX INCREMENT FINANCING.

(a) Effective for taxes payable in 2015, the city of Eagan may elect to compute tax
increment for the Cedar Grove Tax Increment Financing District using the current local tax
rate, notwithstanding the provisions of Minnesota Statutes, section 469.177, subdivision 1a.

(b) 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 a tax increment financing district, is considered to be met for the Cedar Grove Tax
Increment Financing District in the city of Eagan if the activities are undertaken within 13
years from the date of certification of the district.

(c) Notwithstanding the provisions of Minnesota Statutes, section 469.176,
subdivision 1b, or any other law to the contrary, the city of Eagan may collect tax
increment from the Cedar Grove Tax Increment Financing District through December
31, 2032. new text begin Notwithstanding the provisions of Minnesota Statutes, section 469.1782,
subdivision 2, any extension under this paragraph takes effect with regard to any affected
local government unit, as that term is defined in section 469.1782, subdivision 2, that
approved the extension, subject to the provisions of paragraph (d).
new text end

new text begin (d) For purposes of any extension under paragraph (c), if the governing body of an
affected local government unit does not approve the extension, but the extension takes
effect because one or more other affected local government units approve, the following
rules apply:
new text end

new text begin (1) tax increments during the period of the extension that are attributable to levies
imposed by an affected local government unit that did not approve the extension must be
paid by the county to the affected local government unit that did not approve the extension;
new text end

new text begin (2) for increment paid to the school district during the period of the extension, the
school district must report the amounts to the commissioner of education, along with any
additional information required by the commissioner and at the times required by the
commissioner; and
new text end

new text begin (3) the commissioner of education shall deduct from state aid payable to the school
district the amount of the reported tax increment attributable to state equalized levies.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to paragraph (c) extending the duration of the
district to 2034 is effective after one or more of the governing bodies of the city of Eagan,
Dakota County, and Independent School District No. 191 comply with the requirements of
Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021, subdivision 3.
new text end

Sec. 35. new text begin CITY OF COON RAPIDS; TAX INCREMENT FINANCING.
new text end

new text begin Effective for taxes payable in 2016, the city of Coon Rapids may elect to compute tax
increment for District 6-1 Port Riverwalk using the current local tax rate notwithstanding
the provisions of Minnesota Statutes, section 469.177, subdivision 1a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Coon Rapids and its chief clerical officer comply with Minnesota Statutes,
section 645.021, subdivision 3.
new text end

Sec. 36. new text begin CITY OF COTTAGE GROVE; TAX INCREMENT FINANCING.
new text end

new text begin The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of a
tax increment financing district, are considered to be met for Tax Increment Financing
District No. 1-12 (Gateway North), administered by the Cottage Grove Economic
Development Authority, if the activities are undertaken prior to January 1, 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Cottage Grove and its chief clerical officer comply with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
new text end

Sec. 37. new text begin CITY OF RICHFIELD; EXTENSION OF DISTRICT.
new text end

new text begin Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, or any other
law to the contrary, the city of Richfield and the Housing and Redevelopment Authority in
and for the city of Richfield may elect to extend the duration limit of the redevelopment
tax increment financing district known as the Cedar Avenue Tax Increment Financing
District established by Laws 2005, chapter 152, article 2, section 25, by ten years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the city
of Richfield, Hennepin County, and Independent School District No. 280 with the
requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021,
subdivisions 2 and 3.
new text end

Sec. 38. new text begin CITY OF ST. PAUL; TIF AUTHORITY.
new text end

new text begin If the housing and redevelopment authority of the city of St. Paul authorizes the
creation of a redevelopment tax increment financing district under Minnesota Statutes,
section 469.174, subdivision 10, parcel numbers 17-28-23-31-0001 and 17-28-23-13-0002
are deemed to meet the requirements of Minnesota Statutes, section 469.174, subdivision
10, paragraph (d), notwithstanding any contrary provisions of that paragraph, if the
following conditions are met:
new text end

new text begin (1) buildings located on the parcels were demolished after the housing and
redevelopment authority of the city of St. Paul adopted a resolution under Minnesota
Statutes, section 469.174, subdivision 10, paragraph (d), clause (3);
new text end

new text begin (2) the buildings were removed either by the housing and redevelopment authority
of the city of St. Paul or by the owner of the property by entering into a development
agreement; and
new text end

new text begin (3) the request for certification of the parcels as part of a district is filed with the
county auditor by December 31, 2020.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing
body of the city of St. Paul and compliance with the requirements of Minnesota Statutes,
section 645.021.
new text end

Sec. 39. new text begin CITY OF TAYLORS FALLS; BORDER CITY DEVELOPMENT ZONE.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin The governing body of the city of Taylors Falls may
designate all or any part of the city as a border city development zone.
new text end

new text begin Subd. 2. new text end

new text begin Application of general law. new text end

new text begin (a) Minnesota Statutes, sections 469.1731 to
469.1735, apply to the border city development zones designated under this section. The
governing body of the city may exercise the powers granted under Minnesota Statutes,
sections 469.1731 to 469.1735, including powers that apply outside of the zones.
new text end

new text begin (b) The allocation under subdivision 3 for purposes of Minnesota Statutes, section
469.1735, subdivision 2, is appropriated to the commissioner of revenue.
new text end

new text begin Subd. 3. new text end

new text begin Allocation of state tax reductions. new text end

new text begin (a) The cumulative total amount of the
state portion of the tax reductions for all years of the program under Minnesota Statutes,
sections 469.1731 to 469.1735, for the city of Taylors Falls, is limited to $100,000.
new text end

new text begin (b) This allocation may be used for tax reductions provided in Minnesota Statutes,
section 469.1732 or 469.1734, or for reimbursements under Minnesota Statutes, section
469.1735, subdivision 3, but only if the governing body of the city of Taylors Falls
determines that the tax reduction or offset is necessary to enable a business to expand
within the city or to attract a business to the city.
new text end

new text begin (c) The commissioner of revenue may waive the limit under this subdivision using
the same rules and standards provided in Minnesota Statutes, section 469.169, subdivision
12, paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing
body of the city of Taylors Falls and upon timely compliance by the city with Minnesota
Statutes, section 645.021.
new text end

Sec. 40. new text begin CITY OF WAYZATA; TAX INCREMENT FINANCING.
new text end

new text begin 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 a
tax increment financing district, are considered to be met for Tax Increment Financing
District 3 (Widsten) in the city of Wayzata if the revenues derived from tax increments
from the district are expended for any project contemplated by the original tax increment
financing plan for the district, including, without limitation, a municipal parking ramp
within the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body
of the city of Wayzata and its chief clerical officer comply with the requirements of
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

ARTICLE 6

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2014, section 289A.20, subdivision 4, is amended to read:

Subd. 4.

Sales and use tax.

(a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.

(b) A vendor having a liability of $250,000 or more during a fiscal year ending June
30 must remit the June new text begin net new text end liability for the next year in the following manner:

(1) Two business days before June 30 of the year, the vendor must remit 81.4 percent
of the estimated June new text begin net new text end liability to the commissioner.

(2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.

(c) A vendor having a liability of:

(1) $10,000 or more, but less than $250,000 during a fiscal year ending June 30,
2013, and fiscal years thereafter, must remit by electronic means all new text begin net new text end liabilities on
returns due for periods beginning in all subsequent calendar years on or before the 20th
day of the month following the month in which the taxable event occurred, or on or before
the 20th day of the month following the month in which the sale is reported under section
289A.18, subdivision 4; or

(2) $250,000 or more, during a fiscal year ending June 30, 2013, and fiscal years
thereafter, must remit by electronic means all new text begin net new text end liabilities in the manner provided in
paragraph (a) on returns due for periods beginning in the subsequent calendar year, except
for 81.4 percent of the estimated June new text begin net new text end liability, which is due two business days before
June 30. The remaining amount of the June liability is due on August 20.

(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
religious beliefs from paying electronically shall be allowed to remit the payment by mail.
The filer must notify the commissioner of revenue of the intent to pay by mail before
doing so on a form prescribed by the commissioner. No extra fee may be charged to a
person making payment by mail under this paragraph. The payment must be postmarked
at least two business days before the due date for making the payment in order to be
considered paid on a timely basis.

new text begin (e) For purposes of this subdivision, "net liability" means the liability minus the
amount of vendor allowance authorized under section 297A.816.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales taxes remitted after June
30, 2016.
new text end

Sec. 2.

Minnesota Statutes 2014, section 296A.16, subdivision 2, is amended to read:

Subd. 2.

Fuel used in other vehicle; claim for refund.

Any person who buys and
uses gasoline for a qualifying purpose other than use in motor vehicles, snowmobiles
except as provided in clause (2), or motorboats, or special fuel for a qualifying purpose
other than use in licensed motor vehicles, and who paid the tax directly or indirectly
through the amount of the tax being included in the price of the gasoline or special fuel, or
otherwise, shall be reimbursed and repaid the amount of the tax paid upon filing with the
commissioner a claim for refund in the form and manner prescribed by the commissioner,
and containing the information the commissioner shall require. By signing any such claim
which is false or fraudulent, the applicant shall be subject to the penalties provided in this
chapter for knowingly making a false claim. The claim shall set forth the total amount
of the gasoline so purchased and used by the applicant other than in motor vehicles, or
special fuel purchased and used by the applicant other than in licensed motor vehicles,
and shall state when and for what purpose it was used. When a claim contains an error
in computation or preparation, the commissioner is authorized to adjust the claim in
accordance with the evidence shown on the claim or other information available to the
commissioner. The commissioner, on being satisfied that the claimant is entitled to the
payments, shall approve the claim and transmit it to the commissioner of management
and budget. The words "gasoline" or "special fuel" as used in this subdivision do not
include aviation gasoline or special fuel for aircraft. Gasoline or special fuel bought
and used for a "qualifying purpose" means:

(1) Gasoline or special fuel used in carrying on a trade or business, used on a farm
situated in Minnesota, and used for a farming purpose. "Farm" and "farming purpose"
have the meanings given them in section 6420(c)(2), (3), and (4) of the Internal Revenue
Code as defined in section 289A.02, subdivision 7.

(2) Gasoline or special fuel used for off-highway business use.

(i) "Off-highway business use" means any use off the public highway by a person in
that person's trade, business, or activity for the production of income.

(ii) Off-highway business use includes use of a passenger snowmobile off the public
highways as part of the operations of a resort as defined in section 157.15, subdivision 11;
and use of gasoline or special fuel to operate a power takeoff unit on a vehicle, but not
including fuel consumed during idling time.

(iii) Off-highway business use does not include use as a fuel in a motor vehicle
which, at the time of use, is registered or is required to be registered for highway use under
the laws of any state or foreign country; or use of a licensed motor vehicle fuel tank in lieu
of a separate storage tank for storing fuel to be used for a qualifying purpose, as defined in
this section. Fuel purchased to be used for a qualifying purpose cannot be placed in the
fuel tank of a licensed motor vehicle and must be stored in a separate supply tank.

(3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles,
manufactured in Minnesota, and shipped by interstate carrier to destinations in other
states or foreign countries.

new text begin (4) Special fuel used in one of the following:
new text end

new text begin (i) to power a refrigeration unit mounted on a licensed motor vehicle, provided
that the unit has an engine separate from the one used to propel the vehicle and the fuel
is used exclusively for the unit;
new text end

new text begin (ii) to power an unlicensed motor vehicle that is used solely or primarily to move
semitrailers within a cargo yard, warehouse facility, or intermodal facility; or
new text end

new text begin (iii) to operate a power take-off unit or auxiliary engine in or on a licensed motor
vehicle, whether or not the unit or engine is fueled from the same or a different fuel tank
as that from which the motor vehicle is fueled.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 3.

Minnesota Statutes 2014, section 297A.61, subdivision 3, is amended to read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited
to, each of the transactions listed in this subdivision. In applying the provisions of this
chapter, the terms "tangible personal property" and "retail sale" include the taxable
services listed in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision
of these taxable services, unless specifically provided otherwise. Services performed by
an employee for an employer are not taxable. Services performed by a partnership or
association for another partnership or association are not taxable if one of the entities owns
or controls more than 80 percent of the voting power of the equity interest in the other
entity. Services performed between members of an affiliated group of corporations are not
taxable. For purposes of the preceding sentence, "affiliated group of corporations" means
those entities that would be classified as members of an affiliated group as defined under
United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration
in money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food.
Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy;

(4) dietary supplements; and

(5) all food sold through vending machines.

(e) A sale and a purchase includes the furnishing for a consideration of electricity,
gas, water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten
computer software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following
services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, and the making available of amusement devices, tanning facilities, reducing
salons, steam baths, health clubs, and spas or athletic facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp, including furnishing the guest of the facility with access to
telecommunication services, and the granting of any similar license to use real property in
a specific facility, other than the renting or leasing of it for a continuous period of 30 days
or more under an enforceable written agreement that may not be terminated without prior
notice and including accommodations intermediary services provided in connection with
other services provided under this clause;

(3) nonresidential parking services, whether on a contractual, hourly, or other
periodic basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its
members sports and athletic facilities, without regard to whether a separate charge is
assessed for use of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public
on the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership
dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
swimming pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials by a third party, excluding delivery of aggregate
material used in road construction; and delivery of concrete block by a third party if the
delivery would be subject to the sales tax if provided by the seller of the concrete block.
For purposes of this clause, "road construction" means construction of:

(i) public roads;

(ii) cartways; and

(iii) private roads in townships located outside of the seven-county metropolitan area
up to the point of the emergency response location sign; and

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services
provided by coin operated facilities operated by the customer, and rustproofing,
undercoating, and towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting services and
pest control and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not
including services performed within the jurisdiction they serve by off-duty licensed peace
officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
organization or any organization at the direction of a county for monitoring and electronic
surveillance of persons placed on in-home detention pursuant to court order or under the
direction of the Minnesota Department of Corrections;

(v) pet grooming services;

(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
public utility lines. Services performed under a construction contract for the installation of
shrubbery, plants, sod, trees, bushes, and similar items are not taxable;

(vii) massages, except when provided by a licensed health care facility or
professional or upon written referral from a licensed health care facility or professional for
treatment of illness, injury, or disease; and

(viii) the furnishing of lodging, board, and care services for animals in kennels and
other similar arrangements, but excluding veterinary and horse boarding services.

(h) A sale and a purchase includes the furnishing for a consideration of tangible
personal property or taxable services by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
subdivisions.

(i) A sale and a purchase includes the furnishing for a consideration of
telecommunications services, ancillary services associated with telecommunication
services, and pay television services. Telecommunication services include, but are
not limited to, the following services, as defined in section 297A.669: air-to-ground
radiotelephone service, mobile telecommunication service, postpaid calling service,
prepaid calling service, prepaid wireless calling service, and private communication
services. The services in this paragraph are taxed to the extent allowed under federal law.

(j) A sale and a purchase includes the furnishing for a consideration of installation if
the installation charges would be subject to the sales tax if the installation were provided
by the seller of the item being installed.

(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
59B.02, subdivision 11.

deleted text begin (l) A sale and a purchase includes furnishing for a consideration of specified digital
products or other digital products or granting the right for a consideration to use specified
digital products or other digital products on a temporary or permanent basis and regardless
of whether the purchaser is required to make continued payments for such right. Wherever
the term "tangible personal property" is used in this chapter, other than in subdivisions 10
and 38, the provisions also apply to specified digital products, or other digital products,
unless specifically provided otherwise or the context indicates otherwise.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 4.

Minnesota Statutes 2014, section 297A.61, subdivision 4, is amended to read:

Subd. 4.

Retail sale.

(a) A "retail sale" means:

(1) any sale, lease, or rental of tangible personal property for any purpose, other than
resale, sublease, or subrent of items by the purchaser in the normal course of business
as defined in subdivision 21; and

(2) any sale of a service enumerated in subdivision 3, for any purpose other than
resale by the purchaser in the normal course of business as defined in subdivision 21.

(b) A sale of property used by the owner only by leasing it to others or by holding it
in an effort to lease it, and put to no use by the owner other than resale after the lease or
effort to lease, is a sale of property for resale.

(c) A sale of master computer software that is purchased and used to make copies for
sale or lease is a sale of property for resale.

(d) A sale of building materials, supplies, and equipment to owners, contractors,
subcontractors, or builders for the erection of buildings or the alteration, repair, or
improvement of real property is a retail sale in whatever quantity sold, whether the sale is
for purposes of resale in the form of real property or otherwise.

(e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
for installation of the floor covering is a retail sale and not a sale for resale since a sale of
floor covering which includes installation is a contract for the improvement of real property.

(f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
for installation of the items is a retail sale and not a sale for resale since a sale of
shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
the improvement of real property.

(g) A sale of tangible personal property that is awarded as prizes is a retail sale and
is not considered a sale of property for resale.

(h) A sale of tangible personal property utilized or employed in the furnishing or
providing of services under subdivision 3, paragraph (g), clause (1), including, but not
limited to, property given as promotional items, is a retail sale and is not considered a
sale of property for resale.

(i) A sale of tangible personal property used in conducting lawful gambling under
chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
given as promotional items, is a retail sale and is not considered a sale of property for resale.

(j) a sale of machines, equipment, or devices that are used to furnish, provide, or
dispense goods or services, including, but not limited to, coin-operated devices, is a retail
sale and is not considered a sale of property for resale.

(k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
payment becomes due under the terms of the agreement or the trade practices of the
lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01,
subdivision 11, but excluding vehicles with a manufacturer's gross vehicle weight rating
greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
the lease is executed.

(l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
title or possession of the tangible personal property.

(m) A sale of a bundled transaction in which one or more of the products included
in the bundle is a taxable product is a retail sale, except that if one of the products
is a telecommunication service, ancillary service, Internet access, or audio or video
programming service, and the seller has maintained books and records identifying through
reasonable and verifiable standards the portions of the price that are attributable to the
distinct and separately identifiable products, then the products are not considered part of a
bundled transaction. For purposes of this paragraph:

(1) the books and records maintained by the seller must be maintained in the regular
course of business, and do not include books and records created and maintained by the
seller primarily for tax purposes;

(2) books and records maintained in the regular course of business include, but are
not limited to, financial statements, general ledgers, invoicing and billing systems and
reports, and reports for regulatory tariffs and other regulatory matters; and

(3) books and records are maintained primarily for tax purposes when the books
and records identify taxable and nontaxable portions of the price, but the seller maintains
other books and records that identify different prices attributable to the distinct products
included in the same bundled transaction.

(n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
body shop business is a retail sale and the sales tax is imposed on the gross receipts from the
retail sale of the paint and materials. The motor vehicle repair or body shop that purchases
motor vehicle repair paint and motor vehicle repair materials for resale must either:

(1) separately state each item of paint and each item of materials, and the sales price
of each, on the invoice to the purchaser; or

(2) in order to calculate the sales price of the paint and materials, use a method
which estimates the amount and monetary value of the paint and materials used in
the repair of the motor vehicle by multiplying the number of labor hours by a rate of
consideration for the paint and materials used in the repair of the motor vehicle following
industry standard practices that fairly calculate the gross receipts from the retail sale of
the motor vehicle repair paint and motor vehicle repair materials. An industry standard
practice fairly calculates the gross receipts if the sales price of the paint and materials used
or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid
by the motor vehicle repair or body shop business. Under this clause, the invoice must
either separately state the "paint and materials" as a single taxable item, or separately state
"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to
wholesale transactions at an auto auction facility.

deleted text begin (o) A sale of specified digital products or other digital products to an end user with
or without rights of permanent use and regardless of whether rights of use are conditioned
upon payment by the purchaser is a retail sale. When a digital code has been purchased that
relates to specified digital products or other digital products, the subsequent receipt of or
access to the related specified digital products or other digital products is not a retail sale.
deleted text end

deleted text begin (p) deleted text end new text begin (o) new text end A payment made to a cooperative electric association or public utility as a
contribution in aid of construction is a contract for improvement to real property and
is not a retail sale.

new text begin (p) When either a manufacturer or a subcontractor of a manufacturer installs a
modular home, as defined in section 297A.668, subdivision 8, paragraph (b), on a
foundation, it is not a retail sale.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 5.

Minnesota Statutes 2014, section 297A.61, subdivision 38, is amended to read:

Subd. 38.

Bundled transaction.

(a) "Bundled transaction" means the retail sale
of two or more products when the products are otherwise distinct and identifiable, and
the products are sold for one nonitemized price. As used in this subdivision, "product"
includes tangible personal property, services, new text begin and new text end intangibles, deleted text begin and digital goods, including
specified digital products or other digital products, deleted text end but does not include real property or
services to real property. A bundled transaction does not include the sale of any products
in which the sales price varies, or is negotiable, based on the selection by the purchaser of
the products included in the transaction.

(b) For purposes of this subdivision, "distinct and identifiable" products does not
include:

(1) packaging and other materials, such as containers, boxes, sacks, bags, and
bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the
products and are incidental or immaterial to the retail sale. Examples of packaging that are
incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags,
and express delivery envelopes and boxes;

(2) a promotional product provided free of charge with the required purchase of
another product. A promotional product is provided free of charge if the sales price of
another product, which is required to be purchased in order to receive the promotional
product, does not vary depending on the inclusion of the promotional product; and

(3) items included in the definition of sales price.

(c) For purposes of this subdivision, the term "one nonitemized price" does not
include a price that is separately identified by product on binding sales or other supporting
sales-related documentation made available to the customer in paper or electronic form
including but not limited to an invoice, bill of sale, receipt, contract, service agreement,
lease agreement, periodic notice of rates and services, rate card, or price list.

(d) A transaction that otherwise meets the definition of a bundled transaction is
not a bundled transaction if it is:

(1) the retail sale of tangible personal property and a service and the tangible
personal property is essential to the use of the service, and is provided exclusively in
connection with the service, and the true object of the transaction is the service;

(2) the retail sale of services if one service is provided that is essential to the use or
receipt of a second service and the first service is provided exclusively in connection with
the second service and the true object of the transaction is the second service;

(3) a transaction that includes taxable products and nontaxable products and the
purchase price or sales price of the taxable products is de minimis; or

(4) the retail sale of exempt tangible personal property and taxable tangible personal
property if:

(i) the transaction includes food and food ingredients, drugs, durable medical
equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices,
or medical supplies; and

(ii) the seller's purchase price or sales price of the taxable tangible personal property is
50 percent or less of the total purchase price or sales price of the bundled tangible personal
property. Sellers must not use a combination of the purchase price and sales price of the
tangible personal property when making the 50 percent determination for a transaction.

(e) For purposes of this subdivision, "purchase price" means the measure subject to
use tax on purchases made by the seller, and "de minimis" means that the seller's purchase
price or sales price of the taxable products is ten percent or less of the total purchase
price or sales price of the bundled products. Sellers shall use either the purchase price
or the sales price of the products to determine if the taxable products are de minimis.
Sellers must not use a combination of the purchase price and sales price of the products
to determine if the taxable products are de minimis. Sellers shall use the full term of a
service contract to determine if the taxable products are de minimis.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 6.

Minnesota Statutes 2014, section 297A.62, subdivision 3, is amended to read:

Subd. 3.

Manufactured housing and park trailers new text begin ; modular housing new text end .

new text begin (a) new text end For
retail sales of manufactured homes as defined in section 327.31, subdivision 6, for
residential uses, the sales tax under subdivisions 1 and 1a is imposed on 65 percent of the
dealer's cost of the manufactured home. For retail sales of new or used park trailers, as
defined in section 168.002, subdivision 23, the sales tax under subdivisions 1 and 1a is
imposed on 65 percent of the sales price of the park trailer.

new text begin (b) For retail sales of a modular home, as defined in section 297A.668, subdivision
8, paragraph (b), for residential use, the sales tax under subdivisions 1 and 1a is imposed
on 65 percent of the invoice price of the modular home.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 7.

Minnesota Statutes 2014, section 297A.668, subdivision 1, is amended to read:

Subdivision 1.

Applicability.

The provisions of this section apply regardless of the
characterization of a product as tangible personal property deleted text begin , a digital good, deleted text end or a service;
but do not apply to telecommunications services or the sales of motor vehicles. 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 8.

Minnesota Statutes 2014, section 297A.668, subdivision 2, is amended to read:

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.

(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 deleted text begin the digital good or deleted text end the computer software delivered electronically
was first available for transmission by the seller, or from which the service was provided.
deleted text begin For purposes of this paragraph, the seller must disregard any location that merely provided
the digital transfer of the product sold.
deleted text end

(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 deleted text begin digital goods or deleted text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 9.

Minnesota Statutes 2014, section 297A.668, subdivision 6a, is amended to read:

Subd. 6a.

Multiple points of use.

(a) Notwithstanding the provisions of subdivisions
2 and 3, a business purchaser that has not received authorization to pay the tax directly to
the commissioner may use an exemption certificate indicating multiple points of use if:

(1) the purchaser knows at the time of its purchase of deleted text begin a digital good, deleted text end computer
software delivered electronically, or a service that the good or service will be concurrently
available for use in more than one taxing jurisdiction; and

(2) the purchaser delivers to the seller the exemption certificate indicating multiple
points of use at the time of purchase.

(b) Upon receipt of the fully completed exemption certificate indicating multiple
points of use, 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. The provisions of section 297A.665 apply to this paragraph.

(c) The purchaser delivering the exemption certificate indicating multiple points
of use 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 purchaser shall provide the exemption certificate indicating multiple points
of use to the seller at the time of purchase.

(e) A purchaser that has received authorization to pay the tax directly to the
commissioner is not required to deliver to the seller an exemption certificate indicating
multiple points of use. A purchaser that has received authorization to pay the tax directly
to the commissioner shall follow the provisions of paragraph (c) in apportioning the tax
due on deleted text begin a digital good, deleted text end computer software delivered electronically, or a service that will be
concurrently available for use in more than one taxing jurisdiction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 10.

Minnesota Statutes 2014, section 297A.668, subdivision 7, is amended to read:

Subd. 7.

Advertising and promotional direct mail.

(a) Notwithstanding other
subdivisions of this section, the provisions in paragraphs (b) to (e) apply to the sale of
advertising and promotional direct mail. "Advertising and promotional direct mail" means
printed material that is direct mail as defined in section 297A.61, subdivision 35, the
primary purpose of which is to attract public attention to a product, person, business, or
organization, or to attempt to sell, popularize, or secure financial support for a person,
business, organization, or product. "Product" includes tangible personal property deleted text begin , a digital
product transferred electronically, deleted text end or a service.

(b) A purchaser of advertising and promotional direct mail may provide the seller
with one of the following:

(1) a fully completed exemption certificate as described in section 297A.72
indicating that the purchaser is authorized to pay any sales or use tax due on purchases
made by the purchaser directly to the commissioner under section 297A.89;

(2) a fully completed exemption certificate claiming an exemption for direct mail; or

(3) information showing the jurisdictions to which the advertising and promotional
direct mail is to be delivered to recipients.

(c) In the absence of bad faith, if the purchaser provides one of the exemption
certificates indicated in paragraph (b), clauses (1) and (2), 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 tax on any transaction involving advertising and promotional direct mail to
which the certificate applies. The purchaser shall source the sale to the jurisdictions to
which the advertising and promotional direct mail is to be delivered to the recipients of
the mail, and shall report and pay any applicable tax due.

(d) If the purchaser provides the seller information showing the jurisdictions to
which the advertising and promotional direct mail is to be delivered to recipients, the seller
shall source the sale to the jurisdictions to which the advertising and promotional direct
mail is to be delivered and shall collect and remit the applicable tax. In the absence of
bad faith, the seller is relieved of any further obligation to collect any additional tax on
the sale of advertising and promotional direct mail where the seller has sourced the sale
according to the delivery information provided by the purchaser.

(e) If the purchaser does not provide the seller with any of the items listed in
paragraph (b), the sale shall be sourced under 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.

(f) This subdivision does not apply to printed materials that result from developing
billing information or providing any data processing service that is more than incidental
to producing the printed materials, regardless of whether advertising and promotional
direct mail is included in the same mailing.

(g) If a transaction is a bundled transaction that includes advertising and promotional
direct mail, this subdivision applies only if the primary purpose of the transaction is the sale
of products or services that meet the definition of advertising and promotional direct mail.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 11.

Minnesota Statutes 2014, section 297A.669, subdivision 14a, is amended to
read:

Subd. 14a.

Prepaid wireless calling service.

"Prepaid wireless calling service," for
purposes of this section, means a telecommunications service that:

(1) provides the right to utilize mobile wireless service as well as other
nontelecommunications services, including deleted text begin the download of digital products delivered
electronically, content, and deleted text end ancillary services;

(2) must be paid for in advance; and

(3) is sold in predetermined units or dollars of which the number declines with
use in a known amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 12.

Minnesota Statutes 2014, section 297A.67, subdivision 7a, is amended to read:

Subd. 7a.

Accessories and supplies.

Accessories and supplies required for the
effective use of durable medical equipment for home use only or purchased in a transaction
covered by Medicare deleted text begin or deleted text end new text begin , new text end Medicaid, new text begin or other health insurance plan, new text end that are not already
exempt under subdivision 7, are exempt. Accessories and supplies for the effective use
of a prosthetic device, that are not already exempt under subdivision 7, are exempt.
For purposes of this subdivision "durable medical equipment," "prosthetic device,"
"Medicare," and "Medicaid" have the definitions given in subdivision 7 deleted text begin . deleted text end new text begin , and "other health
insurance plan" means a health plan defined in section 62A.011, subdivision 3, or 62V.02,
subdivision 4, or a qualified health plan defined in section 62A.011, subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 13.

Minnesota Statutes 2014, section 297A.67, subdivision 13a, is amended to read:

Subd. 13a.

Instructional materials.

new text begin (a) new text end Instructional materials, other than
textbooks, that are prescribed for use in conjunction with a course of study in a
postsecondary school, college, university, or private career school to students who are
regularly enrolled at such institutions are exempt. For purposes of this subdivision,
"instructional materials" means materials required to be used directly in the completion of
the course of study, including, but not limited to deleted text begin , deleted text end new text begin : new text end

new text begin (1) new text end interactive CDs, tapes, digital audio works, digital audiovisual works, and
computer software deleted text begin . deleted text end new text begin ;
new text end

new text begin (2) charts and models used in the course of study; and
new text end

new text begin (3) specialty pens, pencils, inks, paint, paper, and other art supplies for art classes.
new text end

new text begin (b) Notwithstanding paragraph (c), if the course of study is necessary to obtaining a
degree or certification for a trade or career, any equipment, tools, and supplies required
during the course of study that are generally used directly in the practice of the career
or trade are also exempt.
new text end

new text begin (c) new text end Instructional materials do not include general reference works or other items
incidental to the instructional process such as pens, pencils, paper, folders, or computers
new text begin that are of general use outside of the course of study new text end .

new text begin (d) new text end For purposes of this subdivision, "school" and "private career school" have the
meanings given in subdivision 13.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 14.

Minnesota Statutes 2014, section 297A.67, is amended by adding a
subdivision to read:

new text begin Subd. 34. new text end

new text begin Propane tanks. new text end

new text begin (a) Propane tanks with a propane capacity of at least 100
gallons, and any valves and regulators necessary for use of the propane tank, are exempt
when purchased by the user of the tank. This exemption does not apply to the lease of a
propane tank from a propane supplier or dealer.
new text end

new text begin (b) This subdivision expires December 31, 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to sales and purchases made on or after that date.
new text end

Sec. 15.

Minnesota Statutes 2014, section 297A.67, is amended by adding a
subdivision to read:

new text begin Subd. 35. new text end

new text begin Precious metal bullion and bullion coin. new text end

new text begin (a) Precious metal bullion and
bullion coin is exempt. For purposes of this subdivision, "precious metal bullion" is
any product that is:
new text end

new text begin (1) at least 90 percent by actual weight of gold, silver, platinum, or palladium;
new text end

new text begin (2) bought and sold on a current spot market price, including a transaction fee, for
immediate payment and an agreed delivery date; and
new text end

new text begin (3) in the form of rounds, bars, or any other form that meets the requirements of
clauses (1) and (2).
new text end

new text begin (b) For purposes of this subdivision, "spot market price" means the current price of
the actual precious metal as set by a recognized commodities exchange.
new text end

new text begin (c) For purposes of this subdivision, "bullion coin" means any coin containing at
least 90 percent by weight of gold, silver, platinum, or palladium.
new text end

new text begin (d) The intent of this subdivision is to eliminate the difference in tax treatment
between the sale of precious metal bullion and the sale of stocks, bullion EFTs, bonds,
and other investment instruments.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 16.

Minnesota Statutes 2014, 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 primarily to electronically transmit results retrieved by a customer of an online
computerized data retrieval system new text begin and machinery and equipment used by restaurants in
the furnishing, preparing, or serving of prepared foods as defined in section 297A.61,
subdivision 31 new text end .

(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;

(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;

(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed
as part of the delivery process regardless if mounted on a chassis, repair parts for
ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and

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

(c) Capital equipment does not include the following:

(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;

(7) deleted text begin machinery and equipment used by restaurants in the furnishing, preparing, or
serving of prepared foods as defined in section 297A.61, subdivision 31;
deleted text end

deleted text begin (8) deleted text end machinery and equipment used to furnish the services listed in section 297A.61,
subdivision 3, paragraph (g), clause (6), items (i) to (vi) and (viii);

deleted text begin (9) deleted text end new text begin (8) new text end machinery or equipment used in the transportation, transmission, or
distribution of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through
pipes, lines, tanks, mains, or other means of transporting those products. This clause
does not apply to machinery or equipment used to blend petroleum or biodiesel fuel
as defined in section 239.77; or

deleted text begin (10) deleted text end new text begin (9) new text end 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) "Integrated production process" means a process or series of operations through
which tangible personal property is manufactured, fabricated, mined, or refined. For
purposes of this clause, (i) manufacturing begins with the removal of raw materials
from inventory and ends when the last process prior to loading for shipment has been
completed; (ii) fabricating begins with the removal from storage or inventory of the
property to be assembled, processed, altered, or modified and ends with the creation
or production of the new or changed product; (iii) mining begins with the removal of
overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and
ends when the last process before stockpiling is completed; and (iv) refining begins with
the removal from inventory or storage of a natural resource and ends with the conversion
of the item to its completed form.

(4) "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.

(5) "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).

(6) "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.

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

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

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

(10) "Refining" means the process of converting a natural resource to an intermediate
or finished product, including the treatment of water to be sold at retail.

(11) This subdivision does not apply to telecommunications equipment as provided
in subdivision 35a, and does not apply to wire, cable, fiber, poles, or conduit for
telecommunications services.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 17.

Minnesota Statutes 2014, section 297A.68, subdivision 19, is amended to read:

Subd. 19.

Petroleum products.

The following petroleum products are exempt:

(1) products upon which a tax has been imposed and paid under chapter 296A,
and for which no refund has been or will be allowed because the buyer used the fuel
for nonhighway use;

(2) products that are used in the improvement of agricultural land by constructing,
maintaining, and repairing drainage ditches, tile drainage systems, grass waterways, water
impoundment, and other erosion control structures;

(3) products purchased by a transit system receiving financial assistance under
section 174.24, 256B.0625, subdivision 17, or 473.384;

(4) products purchased by an ambulance service licensed under chapter 144E;

(5) products used in a passenger snowmobile, as defined in section 296A.01,
subdivision 39, for off-highway business use as part of the operations of a resort as
provided under section 296A.16, subdivision 2, clause (2);

(6) products purchased by a state or a political subdivision of a state for use in motor
vehicles exempt from registration under section 168.012, subdivision 1, paragraph (b);

(7) products purchased by providers of transportation to recipients of medical
assistance home and community-based services waivers enrolled in day programs,
including adult day care, family adult day care, day treatment and habilitation,
prevocational services, and structured day services; deleted text begin or
deleted text end

(8) products used in a motor vehicle used exclusively as a mobile medical unit
for the provision of medical or dental services by a federally qualified health center, as
defined under title 19 of the federal Social Security Act, as amended by Section 4161 of
the Omnibus Budget Reconciliation Act of 1990 new text begin ; or
new text end

new text begin (9) special fuels eligible for a motor fuel tax refund under section 296A.16,
subdivision 2, clause (4) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 18.

Minnesota Statutes 2014, section 297A.70, subdivision 4, is amended to read:

Subd. 4.

Sales to nonprofit groups.

(a) All sales, except those listed in paragraph
deleted text begin (b) deleted text end new text begin (c) new text end , to deleted text begin the following deleted text end "nonprofit organizations" are exempt new text begin if the item purchased is
used in the performance of their exempt function. The exemptions under this paragraph
do not apply to new text end :

(1) deleted text begin a corporation, society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational purposes if the item
purchased is used in the performance of charitable, religious, or educational functions;
and deleted text end new text begin veterans groups under subdivision 5;
new text end

(2) deleted text begin any senior citizen group or association of groups that: deleted text end new text begin hospitals, outpatient
surgical centers, and critical access dental providers under subdivision 7, paragraphs
(a), (b), (c), (e), and (f);
new text end

deleted text begin (i) in general limits membership to persons who are either age 55 or older, or
physically disabled;
deleted text end

deleted text begin (ii) is organized and operated exclusively for pleasure, recreation, and other
nonprofit purposes, not including housing, no part of the net earnings of which inures to
the benefit of any private shareholders; and
deleted text end

deleted text begin (iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
deleted text end

new text begin (3) products and services under subdivision 7, paragraph (d); or
new text end

new text begin (4) nursing homes and boarding care homes under subdivision 18.
new text end

new text begin (b) new text end For purposes of this subdivision, deleted text begin charitable purpose includes the maintenance of
a cemetery owned by a religious organization. deleted text end new text begin "nonprofit organization" means:
new text end

new text begin (1) an organization that has a current federal determination letter stating that the
nonprofit organization qualifies as an exempt organization under section 501(c)(3) of the
Internal Revenue Code and has obtained a Minnesota tax identification number from the
Department of Revenue under section 297A.83; or
new text end

new text begin (2) any senior citizen group or association of groups that:
new text end

new text begin (i) in general, limits membership to persons who are either age 55 or older or
physically disabled;
new text end

new text begin (ii) is not organized and operated exclusively for housing; and
new text end

new text begin (iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end This exemption does not apply to the following sales:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax-exempt entities or their contractors to
be used in constructing buildings or facilities that will not be used principally by the
tax-exempt entities;

(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
297A.67, subdivision 2, except wine purchased by an established religious organization
for sacramental purposes or as allowed under subdivision 9a; and

(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
as provided in paragraph deleted text begin (c) deleted text end new text begin (d) new text end .

deleted text begin (c) deleted text end new text begin (d) new text end This exemption applies to the leasing of a motor vehicle as defined in section
297B.01, subdivision 11, only if the vehicle is:

(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and
used for carrying more than nine persons including the driver; and

(2) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose.

deleted text begin (d) deleted text end new text begin (e) new text end A limited liability company also qualifies for exemption under this
subdivision if (1) it consists of a sole member that would qualify for the exemption, and
(2) the items purchased qualify for the exemption.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 19.

Minnesota Statutes 2014, section 297A.70, subdivision 10, is amended to read:

Subd. 10.

Nonprofit tickets or admissions.

(a) Tickets or admissions to an event
are exempt if all the gross receipts are recorded as such, in accordance with generally
accepted accounting principles, on the books of one or more organizations whose primary
mission is to provide an opportunity for citizens of the state to participate in the creation,
performance, or appreciation of the arts, and provided that each organization is:

(1) an organization described in section 501(c)(3) of the Internal Revenue Code in
which voluntary contributions make up at least five percent of the organization's annual
revenue in its most recently completed 12-month fiscal year, or in the current year if the
organization has not completed a 12-month fiscal year;

(2) a municipal board that promotes cultural and arts activities; or

(3) the University of Minnesota, a state college and university, or a private nonprofit
college or university provided that the event is held at a facility owned by the educational
institution holding the event.

The exemption only applies if the entire proceeds, after reasonable expenses, are used
solely to provide opportunities for citizens of the state to participate in the creation,
performance, or appreciation of the arts.

(b) Tickets or admissions to the premises of the Minnesota Zoological Garden are
exempt, provided that the exemption under this paragraph does not apply to tickets or
admissions to performances or events held on the premises unless the performance or
event is sponsored and conducted exclusively by the Minnesota Zoological Board or
employees of the Minnesota Zoological Garden.

new text begin (c) Tickets or admissions to a performance or event on the premises of a tax-exempt
organization under section 501(c)(3) of the Internal Revenue Code are exempt if:
new text end

new text begin (1) the nonprofit organization was established to preserve Minnesota's rural
agricultural heritage and focuses on educating the public about rural history and how
farms in Minnesota helped to provide food for the nation and the world;
new text end

new text begin (2) the premises of the nonprofit organization is at least 115 acres;
new text end

new text begin (3) the performance or event is sponsored and conducted exclusively by volunteers,
employees of the nonprofit organization, or members of the board of directors of the
nonprofit organization; and
new text end

new text begin (4) the performance or event is consistent with the nonprofit organization's purposes
under section 501(c)(3) of the Internal Revenue Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 20.

Minnesota Statutes 2014, section 297A.70, subdivision 14, is amended to read:

Subd. 14.

Fund-raising events sponsored by nonprofit groups.

(a) Sales of
tangible personal property or services at, and admission charges for fund-raising events
sponsored by, a nonprofit organization are exempt if:

(1) all gross receipts are recorded as such, in accordance with generally accepted
accounting practices, on the books of the nonprofit organization; and

(2) the entire proceeds, less the necessary expenses for the event, will be used solely
and exclusively for charitable, religious, or educational purposes. Exempt sales include
the sale of prepared food, candy, and soft drinks at the fund-raising event.

(b) This exemption is limited in the following manner:

(1) it does not apply to admission charges for events involving bingo or other
gambling activities or to charges for use of amusement devices involving bingo or other
gambling activities;

(2) all gross receipts are taxable if the profits are not used solely and exclusively for
charitable, religious, or educational purposes;

(3) it does not apply unless the organization keeps a separate accounting record,
including receipts and disbursements from each fund-raising event that documents all
deductions from gross receipts with receipts and other records;

(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
the active or passive agent of a person that is not a nonprofit corporation;

(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;

(6) it does not apply to fund-raising events conducted on premises leased for more
than deleted text begin five deleted text end new text begin ten new text end days but less than 30 days; and

(7) it does not apply if the risk of the event is not borne by the nonprofit organization
and the benefit to the nonprofit organization is less than the total amount of the state and
local tax revenues forgone by this exemption.

(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
government, corporation, society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
veterans' purposes, no part of the net earnings of which inures to the benefit of a private
individual.

(d) For purposes of this subdivision, "fund-raising events" means activities of
limited duration, not regularly carried out in the normal course of business, that attract
patrons for community, social, and entertainment purposes, such as auctions, bake sales,
ice cream socials, block parties, carnivals, competitions, concerts, concession stands,
craft sales, bazaars, dinners, dances, door-to-door sales of merchandise, fairs, fashion
shows, festivals, galas, special event workshops, sporting activities such as marathons and
tournaments, and similar events. Fund-raising events do not include the operation of a
regular place of business in which services are provided or sales are made during regular
hours such as bookstores, thrift stores, gift shops, restaurants, ongoing Internet sales,
regularly scheduled classes, or other activities carried out in the normal course of business.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 21.

Minnesota Statutes 2014, section 297A.70, is amended by adding a
subdivision to read:

new text begin Subd. 20. new text end

new text begin Animal shelters. new text end

new text begin (a) For purposes of this subdivision, the term "animal
shelter" means a nonprofit organization engaged in the business of rescuing, sheltering,
and finding homes for unwanted animals.
new text end

new text begin (b) Purchases made by an animal shelter are exempt if the purchases are used
directly in the activities of rescuing, sheltering, and finding homes for unwanted animals.
The exemption under this paragraph does not apply to the following purchases:
new text end

new text begin (1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;
new text end

new text begin (2) construction materials purchased by an animal shelter or their contractors to
be used in constructing buildings or facilities that will not be used principally by the
tax-exempt entities;
new text end

new text begin (3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
297A.67, subdivision 2; and
new text end

new text begin (4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11.
new text end

new text begin (c) The sale or adoption of unwanted animals by an animal shelter and the sale of
associated animal supplies and equipment by an animal shelter are exempt.
new text end

new text begin (d) Sales made by and events run by an animal shelter for fund-raising purposes
are exempt. Exempt sales include the sale of prepared food, candy, and soft drinks at a
fund-raising event. The exemption under this paragraph is subject to the following limits:
new text end

new text begin (1) gross receipts from all fund-raising sales are taxable if the total fund-raising by
the animal shelter exceeds 24 days per year;
new text end

new text begin (2) it does not apply to fund-raising events conducted on premises leased for more
than ten days but less than 30 days; and
new text end

new text begin (3) it does not apply to admission charges for events involving bingo or other
gambling activities or to charges for use of amusement devices involving bingo or other
gambling activities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 22.

Minnesota Statutes 2014, section 297A.70, is amended by adding a
subdivision to read:

new text begin Subd. 21. new text end

new text begin City celebrations. new text end

new text begin (a) Sales of tangible personal property or services and
admissions charges to a city-designated annual city celebration designed to promote
community spirit and cooperation are exempt. Exempt sales include the sale of prepared
food, candy, soft drinks, and malt liquor and wine as defined in section 340A.101,
subdivisions 16 and 19, at the event. The governing board of a statutory or home rule
charter city may designate one event in each calendar year as the annual city celebration
that qualifies for the exemption under this subdivision. For a celebration to qualify, it must
meet the following requirements:
new text end

new text begin (1) the home rule charter or statutory city must have a population of less than 10,000;
new text end

new text begin (2) the event must be held on consecutive days, not to exceed five days in total;
new text end

new text begin (3) the event must be run either by the city or by a nonprofit organization designated
by the city;
new text end

new text begin (4) all gross receipts of the event are recorded as such, in accordance with generally
accepted accounting practice on the books of the city or the designated nonprofit
organization; and
new text end

new text begin (5) the entire proceeds, less the necessary expenses, will be distributed to one or
more of the following for charitable, educational, civic, or governmental purposes:
new text end

new text begin (i) the city's general fund;
new text end

new text begin (ii) a nonprofit 501(c)(3) organization to promote its primary mission; or
new text end

new text begin (iii) a nonprofit 501(c)(4) organization to promote its primary mission, however, no
revenues from this event may be used by the organization for lobbying or political activities.
new text end

new text begin (b) This exemption is limited in the following manner:
new text end

new text begin (1) it does not apply to admission charges for events involving bingo or other
gambling activities or to charges for use of amusement devices involving bingo or other
gambling activities;
new text end

new text begin (2) all gross receipts are taxable if the profits are not used solely and exclusively for
charitable, educational, civic, or governmental purposes; and
new text end

new text begin (3) it does not apply unless the city or designated nonprofit organization keeps a
separate accounting record, including receipts and disbursements for all events included
in the celebration that documents all deductions from gross receipts with receipts and
other records.
new text end

new text begin (c) For purposes of this subdivision, "nonprofit organization" means any unit of
government, corporation, society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
veterans' purposes, no part of the net earnings of which inures to the benefit of a private
individual.
new text end

new text begin (d) For purposes of this subdivision, "city celebration" means any of the following
activities or combination of activities of limited duration, not regularly carried out in the
normal course of business, that attract patrons for community, social, and entertainment
purposes, such as parades, auctions, bake sales, ice cream socials, block parties, carnivals,
competitions, concerts, concession stands, craft sales, bazaars, dinners, dances, fairs,
fashion shows, festivals, galas, special event workshops, sporting activities such as
marathons and tournaments, and similar events. A city celebration does not include the
operation of a regular place of business in which services are provided or sales are made
during regular hours such as bookstores, thrift stores, gift shops, restaurants, ongoing
Internet sales, or regularly scheduled activities carried out in the normal course of business.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 23.

Minnesota Statutes 2014, section 297A.70, is amended by adding a
subdivision to read:

new text begin Subd. 22. new text end

new text begin Admissions; certain BMX tracks. new text end

new text begin Admissions to or charges for
access to a BMX track owned and operated by an exempt organization under section
501(c)(3) of the Internal Revenue Code are exempt. For purposes of this subdivision
"BMX track" means a track designed for bicycle motocross racing and includes related
training and riding areas as well as the actual racing track or tracks. In order to qualify for
the exemption under this subdivision, the BMX track must be sanctioned by a national
or regional governing body for bicycle motocross racing.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 24.

Minnesota Statutes 2014, section 297A.71, is amended by adding a
subdivision to read:

new text begin Subd. 49. new text end

new text begin Building materials; resorts and recreational camping areas. new text end

new text begin Materials
and supplies used or consumed in, and equipment incorporated into, the improvement of
an existing structure located at a resort, as defined in section 157.15, subdivision 11, or
recreational camping area, as defined in section 327.14, subdivision 8, are exempt. For
purposes of this subdivision, a structure means a cabin located on resort property and any
other structure available for use by guests of the resort or recreational camping area.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 25.

Minnesota Statutes 2014, section 297A.71, is amended by adding a
subdivision to read:

new text begin Subd. 50. new text end

new text begin Construction materials purchased by contractors; exemption for
certain entities. new text end

new text begin (a) Building, construction, or reconstruction materials, supplies used or
consumed in, and equipment incorporated into buildings or facilities used principally by
the following entities are exempt:
new text end

new text begin (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c);
new text end

new text begin (2) local governments, as defined under section 297A.70, subdivision 2, paragraph
(d);
new text end

new text begin (3) hospitals and nursing homes owned and operated by political subdivisions of the
state, as defined under section 297A.70, subdivision 2, paragraph (a), clause (3);
new text end

new text begin (4) public libraries; library systems; multicounty, multitype library systems, as
defined in section 134.001; and county law libraries under chapter 134A;
new text end

new text begin (5) nonprofit groups, as defined under section 297A.70, subdivision 4;
new text end

new text begin (6) hospitals, outpatient surgical centers, and critical access dental providers, as
defined under section 297A.70, subdivision 7; and
new text end

new text begin (7) nursing homes and boarding care homes, as defined under section 297A.70,
subdivision 18.
new text end

new text begin (b) Materials, supplies used in, and equipment incorporated into the construction,
reconstruction, repair, maintenance, or improvement of public infrastructure of any
kind including, but not limited to, roads, bridges, culverts, drinking water facilities, and
wastewater facilities purchased by a contractor or subcontractor of the following entities
are exempt:
new text end

new text begin (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c); or
new text end

new text begin (2) local governments, as defined under section 297A.70, subdivision 2, paragraph
(d).
new text end

new text begin (c) The tax on purchases made by a contractor, subcontractor, or builder, that are
exempt under this subdivision 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. Exempt items purchased directly by the owner of the building, facility, or
infrastructure are exempt from the tax at the time of purchase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 26.

Minnesota Statutes 2014, section 297A.75, subdivision 1, is amended to read:

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section
297A.71, subdivision 14;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

(6) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;

(7) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(8) equipment and materials used for the generation, transmission, and distribution
of electrical energy and an aerial camera package exempt under section 297A.68,
subdivision 37;

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3,
paragraph (a), clause (10);

(10) materials, supplies, and equipment for construction or improvement of projects
and facilities under section 297A.71, subdivision 40;

(11) materials, supplies, and equipment for construction, improvement, or expansion
of:

(i) an aerospace defense manufacturing facility exempt under section 297A.71,
subdivision 42;

(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71,
subdivision 45;

(iii) a research and development facility exempt under section 297A.71, subdivision
46; and

(iv) an industrial measurement manufacturing and controls facility exempt under
section 297A.71, subdivision 47;

(12) enterprise information technology equipment and computer software for use in
a qualified data center exempt under section 297A.68, subdivision 42;

(13) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44;

(14) items purchased for use in providing critical access dental services exempt
under section 297A.70, subdivision 7, paragraph (c); deleted text begin and
deleted text end

(15) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
44 new text begin ; and
new text end

new text begin (16) building construction or reconstruction materials, supplies, and equipment
purchased by an entity eligible under section 297A.71, subdivision 50 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 27.

Minnesota Statutes 2014, section 297A.75, subdivision 2, is amended to read:

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying
business; deleted text begin and
deleted text end

(8) for subdivision 1, clauses (9), (10), and (13), the applicant must be the
governmental entity that owns or contracts for the project or facility new text begin ; and
new text end

new text begin (9) for subdivision 1, clause (16), the applicant must be the entity eligible under
section 297A.71, subdivision 50 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 28.

Minnesota Statutes 2014, section 297A.75, subdivision 3, is amended to read:

Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clauses (3) to (13), deleted text begin or deleted text end (15), new text begin or (16), new text end the
contractor, subcontractor, or builder must furnish to the refund applicant a statement
including the cost of the exempt items and the taxes paid on the items unless otherwise
specifically provided by this subdivision. The provisions of sections 289A.40 and
289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 29.

Minnesota Statutes 2014, section 297A.77, subdivision 3, is amended to read:

Subd. 3.

Tax must be remitted.

The tax collected by a retailer under this section new text begin ,
except for the amount allowed to be retained by the seller under section 297A.816, new text end must
be remitted to the commissioner as provided in chapter 289A and this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales taxes remitted after June
30, 2016.
new text end

Sec. 30.

new text begin [297A.816] VENDOR ALLOWANCE.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin A retailer or seller may retain a portion of sales
tax collected as a vendor allowance in compensation for the costs of collecting and
administering the tax under this chapter. This section applies only if the tax minus the
vendor allowance is both reported and remitted to the commissioner in a timely fashion
as required under chapter 289A.
new text end

new text begin Subd. 2. new text end

new text begin Tax not eligible for allowance. new text end

new text begin Use taxes paid by the seller on the seller's
own purchases are not included in calculating the vendor allowance under this section.
new text end

new text begin Subd. 3. new text end

new text begin Calculation of allowance; maximum amounts. new text end

new text begin The amount of the
vendor allowance is equal to the sum of 0.30 percent of up to the first $10,000 in tax
remitted in the reporting period plus 0.15 percent of the tax remitted in excess of $10,000
in the reporting period.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales taxes remitted after June
30, 2016.
new text end

Sec. 31.

Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
chapter 291, article 8, section 22, Laws 1998, chapter 389, article 8, section 25, Laws
2003, First Special Session chapter 21, article 8, section 11, Laws 2008, chapter 154,
article 5, section 2, and Laws 2014, chapter 308, article 3, section 21, is amended to read:

Subd. 2.

(a) Notwithstanding Minnesota Statutes, section 477A.016, or any other
law, ordinance, or city charter provision to the contrary, the city of Duluth may, by
ordinance, impose an additional sales tax of up to one and three-quarter percent on sales
transactions which are described in Minnesota Statutes 2000, section 297A.01, subdivision
3, clause (c). The imposition of this tax shall not be subject to voter referendum under
either state law or city charter provisions. When the city council determines that the taxes
imposed under this paragraph at a rate of three-quarters of one percent and other sources
of revenue produce revenue sufficient to pay debt service on bonds in the principal amount
of $40,285,000 plus issuance and discount costs, issued for capital improvements at the
Duluth Entertainment and Convention Center, which include a new arena, the rate of tax
under this subdivision must be reduced by three-quarters of one percent.

(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half of
one percent on sales transactions which are described in Minnesota Statutes 2000, section
297A.01, subdivision 3, clause (c). This tax expires when the city council determines
that the tax imposed under this paragraph, along with the tax imposed under section
22, paragraph (b), has produced revenues sufficient to pay the debt service on bonds
in a principal amount of no more than $18,000,000, plus issuance and discount costs,
to finance capital improvements to public facilities to support tourism and recreational
activities in that portion of the city west of deleted text begin 34th deleted text end new text begin 14th new text end Avenue West new text begin and the area south of
and including Skyline Parkway new text end .

(c) The city of Duluth may sell and issue up to $18,000,000 in general obligation
bonds under Minnesota Statutes, chapter 475, plus an additional amount to pay for the
costs of issuance and any premiums. The proceeds may be used to finance capital
improvements to public facilities that support tourism and recreational activities in the
portion of the city west of deleted text begin 34th deleted text end new text begin 14th new text end Avenue West new text begin and the area south of and including
Skyline Parkway new text end , as described in paragraph (b). The issuance of the bonds is subject to the
provisions of Minnesota Statutes, chapter 475, except no election shall be required unless
required by the city charter. The bonds shall not be included in computing net debt. The
revenues from the taxes that the city of Duluth may impose under paragraph (b) and under
section 22, paragraph (b), may be pledged to pay principal of and interest on such bonds.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 32.

Laws 1980, chapter 511, section 2, as amended by Laws 1998, chapter 389,
article 8, section 26, Laws 2003, First Special Session chapter 21, article 8, section 12, and
Laws 2014, chapter 308, article 3, section 22, is amended to read:

Sec. 22. CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND
MOTELS.

(a) Notwithstanding Minnesota Statutes, section 477A.016, or any other law, or
ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
impose an additional tax of one percent upon the gross receipts from the sale of lodging
for periods of less than 30 days in hotels and motels located in the city. The tax shall be
collected in the same manner as the tax set forth in the Duluth city charter, section 54(d),
paragraph one. The imposition of this tax shall not be subject to voter referendum under
either state law or city charter provisions.

(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half
of one percent on the gross receipts from the sale of lodging for periods of less than
30 days in hotels and motels located in the city. This tax expires when the city council
first determines that the tax imposed under this paragraph, along with the tax imposed
under section 21, paragraph (b), has produced revenues sufficient to pay the debt
service on bonds in a principal amount of no more than $18,000,000, plus issuance and
discount costs, to finance capital improvements to public facilities to support tourism and
recreational activities in that portion of the city west of deleted text begin 34th deleted text end new text begin 14th new text end Avenue West new text begin and the
area south of and including Skyline Parkway new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 33.

Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by
Laws 1998, chapter 389, article 8, section 28, Laws 2008, chapter 366, article 7, section 9,
and Laws 2009, chapter 88, article 4, section 14, is amended to read:

Subd. 3.

Use of revenues.

new text begin (a) new text end Revenues received from taxes authorized by
subdivisions 1 and 2 shall be used by the city to pay the cost of collecting the tax and to
pay all or a portion of the expenses of constructing and improving facilities as part of an
urban revitalization project in downtown Mankato known as Riverfront 2000. Authorized
expenses include, but are not limited to, acquiring property and paying relocation expenses
related to the development of Riverfront 2000 and related facilities, and securing or paying
debt service on bonds or other obligations issued to finance the construction of Riverfront
2000 and related facilities. For purposes of this section, "Riverfront 2000 and related
facilities" means a civic-convention center, an arena, a riverfront park, a technology center
and related educational facilities, and all publicly owned real or personal property that
the governing body of the city determines will be necessary to facilitate the use of these
facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
landscaping. It also includes the performing arts theatre and the Southern Minnesota
Women's Hockey Exposition Center, for use by Minnesota State University, Mankato.

new text begin (b) Notwithstanding Minnesota Statutes, section 297A.99, subdivision 3, and subject
to voter approval at a general election held before December 31, 2016, the city may by
ordinance also use revenues from taxes authorized under subdivisions 1 and 2, up to
a maximum of $29,000,000, plus associated bond costs, to pay all or a portion of the
expenses of the following capital projects:
new text end

new text begin (1) improvements to regional recreational facilities including existing hockey and
curling rinks, a baseball park, youth athletic fields and facilities, and the municipal
swimming pool including improvements to make the pool compliant with the Americans
with Disabilities Act;
new text end

new text begin (2) improvements to flood control and the levee system;
new text end

new text begin (3) water quality improvement projects in Blue Earth and Nicollet Counties;
new text end

new text begin (4) expansion of the regional transit building and related multimodal transit
improvements;
new text end

new text begin (5) regional public safety and emergency communications improvements and
equipment; and
new text end

new text begin (6) matching funds for improvements to publicly owned regional facilities including
a historic museum, supportive housing, and a senior center.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 34.

Laws 1991, chapter 291, article 8, section 27, subdivision 4, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 25, and Laws 2008, chapter
366, article 7, section 10, is amended to read:

Subd. 4.

Expiration of taxing authority and expenditure limitation.

The
authority granted by subdivisions 1 and 2 to the city to impose a sales tax and an excise tax
shall expire deleted text begin on deleted text end new text begin at the earlier of when revenues are sufficient to pay off the bonds, including
interest and all other associated bond costs authorized under subdivision 5, or new text end December 31,
2022 new text begin , unless the additional uses under subdivision 3, paragraph (b) or (c), are authorized.
If the additional use allowed in subdivision 3, paragraph (b), is authorized, the taxes expire
at the earlier of when revenues are sufficient to pay off the bonds, including interest and
all other associated bond costs authorized under subdivision 5, or December 31, 2032 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.
new text end

Sec. 35.

Laws 1991, chapter 291, article 8, section 27, subdivision 5, is amended to read:

Subd. 5.

Bonds.

new text begin (a) new text end The city of Mankato may issue general obligation bonds of the
city in an amount not to exceed $25,000,000 for Riverfront 2000 and related facilities,
without election under Minnesota Statutes, chapter 475, on the question of issuance of the
bonds or a tax to pay them. The debt represented by bonds issued for Riverfront 2000
and related facilities shall not be included in computing any debt limitations applicable
to the city of Mankato, and the levy of taxes required by section 475.61 to pay principal
of and interest on the bonds shall not be subject to any levy limitation or be included in
computing or applying any levy limitation applicable to the city.

new text begin (b) The city of Mankato, subject to voter approval at the election required under
subdivision 3, paragraph (b), may issue general obligation bonds of the city in an amount
not to exceed $29,000,000 for the projects listed under subdivision 3, paragraph (b),
without election under Minnesota Statutes, chapter 475, on the question of issuance of the
bonds or a tax to pay them. The debt represented by bonds under this paragraph shall not be
included in computing any debt limitations applicable to the city of Mankato, and the levy
of taxes required by Minnesota Statutes, section 475.61, to pay principal of and interest on
the bonds, and shall not be subject to any levy limitation or be included in computing or
applying any levy limitation applicable to the city. The city may use tax revenue in excess
of one year's principal interest reserve for intended annual bond payments to pay all or a
portion of the cost of capital improvements authorized in subdivision 3,
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.
new text end

Sec. 36.

Laws 1991, chapter 291, article 8, section 27, subdivision 6, is amended to read:

Subd. 6.

Reverse referendum new text begin ; authorization of extension new text end .

new text begin (a) new text end If the Mankato city
council intends to exercise the authority provided by this section, it shall pass a resolution
stating the fact before July 1, 1991. The resolution must be published for two successive
weeks in the official newspaper of the city or, if there is no official newspaper, in a
newspaper of general circulation in the city, together with a notice fixing a date for a public
hearing on the matter. The hearing must be held at least two weeks but not more than four
weeks after the first publication of the resolution. Following the public hearing, the city
may determine to take no further action or adopt a resolution confirming its intention to
exercise the authority. That resolution must also be published in the official newspaper of
the city or, if there is no official newspaper, in a newspaper of general circulation in the
city. If within 30 days after publication of the resolution a petition signed by voters equal
in number to ten percent of the votes cast in the city in the last general election requesting
a vote on the proposed resolution is filed with the county auditor, the resolution is not
effective until it has been submitted to the voters at a general or special election and a
majority of votes cast on the question of approving the resolution are in the affirmative. The
commissioner of revenue shall prepare a suggested form of question to be presented at the
election. The referendum must be held at a special or general election before December 1,
1991. This subdivision applies notwithstanding any city charter provision to the contrary.

new text begin (b) If the Mankato city council wishes to extend the taxes authorized under
subdivisions 1 and 2 to fund any of the projects listed in subdivision 3, paragraph (b), the
city must pass a resolution extending the taxes before July 1, 2015. The tax may not be
imposed unless approved by the voters.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.
new text end

Sec. 37.

Laws 1999, chapter 243, article 4, section 18, subdivision 1, as amended by
Laws 2008, chapter 366, article 7, section 12, is amended to read:

Subdivision 1.

Sales and use tax.

new text begin (a) new text end Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, if approved by the city
voters at the first municipal general election held after the date of final enactment of this act
or at a special election held November 2, 1999, the city of Proctor may impose by ordinance
a sales and use tax of up to one-half of one percent for the purposes specified in subdivision
3. The provisions of Minnesota Statutes, section 297A.99, govern the imposition,
administration, collection, and enforcement of the tax authorized under this subdivision.

new text begin (b) Notwithstanding Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, the city of Proctor may impose by ordinance an additional
sales and use tax of up to one-half of one percent pursuant to approval by the voters at the
November 4, 2014, general election. The revenues received from the additional tax must
be used for the purposes specified in subdivision 3, paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Proctor and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, but only if the local approval requirement under section
10 is also met.
new text end

Sec. 38.

Laws 2008, chapter 366, article 7, section 20, is amended to read:

Sec. 20. CITY OF NORTH MANKATO; TAXES AUTHORIZED.

Subdivision 1.

Sales and use tax authorized.

Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
the approval of the voters on November 7, 2006, the city of North Mankato may impose
by ordinance a sales and use tax of one-half of one percent for the purposes specified
in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the
imposition, administration, collection, and enforcement of the taxes authorized under
this subdivision.

Subd. 2.

Use of revenues.

new text begin (a) new text end Revenues received from the tax authorized by
subdivision 1 must be used to pay all or part of the capital costs of the following projects:

(1) the local share of the Trunk Highway 14/County State-Aid Highway 41
interchange project;

(2) development of regional parks and hiking and biking trails;

(3) expansion of the North Mankato Taylor Library;

(4) riverfront redevelopment; and

(5) lake improvement projects.

The total amount of revenues from the tax in subdivision 1 that may be used to fund
these projects is $6,000,000 plus any associated bond costs.

new text begin (b) If the city extends the tax as authorized under subdivision 2a, the total amount that
may be used to fund these projects is increased by $9,000,000, plus associated bond costs.
new text end

new text begin Subd. 2a. new text end

new text begin Authorization to extend the tax. new text end

new text begin Notwithstanding Minnesota Statutes,
section 297A.99, subdivision 3, the North Mankato city council may, by resolution, extend
the tax authorized under subdivision 1 to cover an additional $9,000,000 in bonds, plus
associated bond costs, to fund the projects in subdivision 2, paragraph (a), if approved by
the voters at a general election held by December 31, 2016.
new text end

Subd. 3.

Bonds.

(a) The city of North Mankato, pursuant to the approval of the
voters at the November 7, 2006 referendum authorizing the imposition of the taxes in
this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
administrative expenses for the projects described in subdivision 2, new text begin paragraph (a), new text end in an
amount that does not exceed $6,000,000. A separate election to approve the bonds under
Minnesota Statutes, section 475.58, is not required.

new text begin (b) The city of North Mankato, subject to the referendum in subdivision 2a, allowing
for additional revenue to be spent for the projects in subdivision 2, may issue additional
bonds under Minnesota Statutes, chapter 475, to pay capital and administrative expenses
for those projects in an amount that does not exceed $9,000,000. A separate election to
approve the bonds under Minnesota Statutes, section 475.58, is not required.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end The debt represented by the bonds is not included in computing any debt
limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
475.61, to pay principal and interest on the bonds is not subject to any levy limitation.

Subd. 4.

Termination of taxes.

The tax imposed under subdivision 1 expires when
the city council determines that the amount of revenues received from the taxes to pay for
the projects under subdivision 2 new text begin , paragraph (a), new text end first equals or exceeds $6,000,000 plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
3, including interest on the bonds new text begin , unless the tax is extended as allowed in this section. If
the tax is extended as allowed under the referendum under subdivision 2a, the tax expires
at the earlier of December 31, 2038, or when revenues from the taxes first equal or exceed
$15,000,000 plus the additional amount needed to pay costs related to issuance of bonds
under subdivision 3, including interest new text end . Any funds remaining after completion of the
projects and retirement or redemption of the bonds shall be placed in a capital facilities
and equipment replacement fund of the city. The tax imposed under subdivision 1 may
expire at an earlier time if the city so determines by ordinance.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of North Mankato and its chief clerical officer comply with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
new text end

Sec. 39. new text begin CITY OF MARSHALL; VALIDATION OF PRIOR ACT.
new text end

new text begin (a) Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city
of Marshall may approve Laws 2011, First Special Session chapter 7, article 4, section 14,
and file its approval with the secretary of state by June 15, 2013. If approved as authorized
under this paragraph, actions undertaken by the city pursuant to the approval of the voters
on November 6, 2012, and otherwise in accordance with Laws 2011, First Special Session
chapter 7, article 4, section 14, are validated.
new text end

new text begin (b) Notwithstanding the time limit on the imposition of tax under Laws 2011, First
Special Session chapter 7, article 4, section 14, and subject to local approval under
paragraph (a), the city of Marshall may impose the tax on or before July 1, 2013.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 40. new text begin CITY OF PROCTOR; EFFECTIVE DATE; VALIDATION OF PRIOR
ACT.
new text end

new text begin Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city
of Proctor may approve Laws 2008, chapter 366, article 7, section 13, and Laws 2010,
chapter 389, article 5, sections 1 and 2, and file its approval with the secretary of state by
January 1, 2015. If approved under this paragraph, actions undertaken by the city pursuant
to the approval of the voters on November 2, 2010, and otherwise in accordance with
those laws are validated.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 41. new text begin CITY OF WALKER; LOCAL TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any ordinance, city charter, or other provision of law, pursuant to the
approval of the voters on November 6, 2012, the city of Walker may impose by ordinance
a sales and use tax of 1-1/2 percent for the purposes specified in subdivision 2. The
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the taxes authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from the tax authorized by
subdivision 1 must be used to pay all or part of the capital and administrative costs of
underground water and sewer improvements in the city of Walker as outlined in the 2012
capital improvement plan of the engineer of the city of Walker.
new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin The city of Walker, pursuant to the approval of the
voters at the November 6, 2012, referendum authorizing the imposition of the taxes in
this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
administrative expenses for the projects described in subdivision 2, in an amount that
does not exceed $20,000,000. A separate election to approve the bonds under Minnesota
Statutes, section 475.58, is not required.
new text end

new text begin Subd. 4. new text end

new text begin Termination of tax. new text end

new text begin The tax authorized under subdivision 1 terminates at
the earlier of:
new text end

new text begin (1) 20 years after the date of initial imposition of the tax; or
new text end

new text begin (2) when the city council determines that sufficient funds have been raised from
the tax to finance the capital and administrative costs of the improvements described in
subdivision 2, plus the additional amount needed to pay the costs related to issuance of
bonds under subdivision 3, including interest on the bonds.
new text end

new text begin Any funds remaining after completion of the projects specified in subdivision 2 and
retirement or redemption of bonds in subdivision 3 shall be placed in the general fund
of the city. The tax imposed under subdivision 1 may expire at an earlier time if the
city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Walker and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 42. new text begin CITY OF WINDOM; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, if approved
by the voters at a general election held by December 31, 2016, the city of Windom may
impose by ordinance a sales and use tax of up to one percent for the purposes specified in
subdivision 3. Except as provided in this section, the provisions of Minnesota Statutes,
section 297A.99, govern the imposition, administration, collection, and enforcement of
the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin The proceeds of the tax imposed under this section
must be used to pay for the cost of collecting the tax and to pay all or a portion of the
expenses of constructing and improving a fire hall and a public safety facility, including
any associated bond costs.
new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin The city of Windom, pursuant to the approval of the
voters at the referendum authorizing the imposition of tax in this section, may issue bonds
under Minnesota Statutes, chapter 475, to pay capital and administrative expenses for
the project described in subdivision 2. A separate election to approve the bonds under
Minnesota Statutes, section 475.58, is not required.
new text end

new text begin Subd. 4. new text end

new text begin Termination of tax. new text end

new text begin (a) The tax authorized under subdivision 1 terminates
at the earlier of:
new text end

new text begin (1) 15 years after the date of initial imposition of the tax; or
new text end

new text begin (2) when $3,500,000 has been collected.
new text end

new text begin (b) new text end new text begin Any funds remaining after completion of the projects specified in subdivision 2
may be placed in the general fund of the city. The tax imposed under subdivision 1 may
expire at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Windom and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 43. new text begin AMNESTY; CERTAIN LOCAL FESTIVALS.
new text end

new text begin A nonprofit organization that organized and ran a city celebration on behalf of
a group of nonprofit organizations, of which all of the net proceeds were distributed to
a combination of 501(c)(3) and 501(c)(4) nonprofit organizations that use the proceeds
primarily for charitable, educational, civic, or governmental purposes shall not be liable
for any state or local uncollected and unpaid sales and use tax, penalties, or interest
incurred in running the city celebration, for celebrations held before January 1, 2015. The
amnesty in this section does not apply to sales and use taxes already paid or remitted to the
state or to sales taxes already collected by the organization. The amnesty does apply to an
audit of an organization as long as the audit is not finally resolved.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 44. new text begin MUNICIPALLY OWNED WASTEWATER TREATMENT FACILITY;
CITY OF MORA.
new text end

new text begin Subdivision 1. new text end

new text begin Exemption. new text end

new text begin Materials and supplies used in and equipment
incorporated into a wastewater treatment facility owned and operated by the city of Mora,
regardless of whether purchased by the owner or a contractor, subcontractor, or builder,
are exempt from taxation under Minnesota Statutes, chapter 297A. All purchases for this
facility must be made after January 1, 2015, and before January 1, 2017.
new text end

new text begin Subd. 2. new text end

new text begin Refund. new text end

new text begin The tax on purchases exempt under subdivision 1 must be
imposed and collected as if the rate under Minnesota Statutes, section 297A.62 applied,
and then refunded in the manner provided in Minnesota Statutes, section 297A.75. The
applicant must be the governmental entity that owns or contracts for the project or facility.
If the tax was paid by a contractor, subcontractor, or builder, the contractor, subcontractor,
or builder must furnish to the refund applicant a statement including the cost of the exempt
items and the taxes paid on the items.
new text end

new text begin Subd. 3. new text end

new text begin Appropriation. new text end

new text begin The amount required to make the refunds under this
section is appropriated to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for purchases made
after January 1, 2015, and before January 1, 2017.
new text end

Sec. 45. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 297A.61, subdivisions 50, 51, 52, 53, 54, 55,
and 56, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

ARTICLE 7

SPECIAL TAXES

Section 1.

Minnesota Statutes 2014, section 296A.01, subdivision 12, is amended to
read:

Subd. 12.

Compressed natural gas or CNG.

"Compressed natural gas" or "CNG"
means natural gas, primarily methane, condensed under high pressure and stored in
specially designed storage tanks at between 2,000 and 3,600 pounds per square inch.
For purposes of this chapter, the energy content of CNG is considered to be deleted text begin 1,000 deleted text end new text begin 900
new text end BTUs per cubic foot.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 2.

Minnesota Statutes 2014, section 296A.08, subdivision 2, is amended to read:

Subd. 2.

Rate of tax.

The special fuel excise tax is imposed at the following rates:

(a) Liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon.

(b) Liquefied natural gas is taxed at the rate of 15 cents per gallon.

(c) Compressed natural gas is taxed at the rate of deleted text begin $2.174 deleted text end new text begin $1.974 new text end per thousand cubic
feet; or 25 cents per gasoline equivalent. For purposes of this paragraph, "gasoline
equivalent," as defined by the National Conference on Weights and Measures, is 5.66
pounds of natural gas new text begin or 126.67 cubic feet new text end .

(d) All other special fuel is taxed at the same rate as the gasoline excise tax as
specified in section 296A.07, subdivision 2. The tax is payable in the form and manner
prescribed by the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 3.

Minnesota Statutes 2014, section 297E.02, subdivision 1, is amended to read:

Subdivision 1.

Imposition.

new text begin (a) new text end A tax is imposed on all lawful gambling other than
(1) paper or electronic pull-tab deals or games; (2) tipboard deals or games; new text begin and new text end (3)
deleted text begin electronic linked bingo; and (4) deleted text end items listed in section 297E.01, subdivision 8, clauses
(4) and (5), at the rate of 8.5 percent on the gross receipts as defined in section 297E.01,
subdivision 8, less prizes actually paid.

new text begin (b) A tax is imposed on the conduct of paper pull-tabs, at the rate of nine percent of
the gross receipts, less prizes actually paid, of the pull-tab deal. However, the tax imposed
under this paragraph applies only to paper pull-tabs sold at a bingo hall as defined in
section 349.12, subdivision 4a.
new text end

new text begin (c) new text end The tax imposed by this subdivision is in lieu of the tax imposed by section
297A.62 and all local taxes and license fees except a fee authorized under section 349.16,
subdivision 8, or a tax authorized under subdivision 5.

new text begin (d) new text end The tax imposed under this subdivision is payable by the organization or party
conducting, directly or indirectly, the gambling.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for gross receipts received and sales
made on or after July 1, 2015.
new text end

Sec. 4.

Minnesota Statutes 2014, section 297E.02, subdivision 6, is amended to read:

Subd. 6.

Combined net receipts tax.

(a) In addition to the taxes imposed under
subdivision 1, a tax is imposed on the combined receipts of the organization. As used
in this section, "combined net receipts" is the sum of the organization's gross receipts
from lawful gambling less gross receipts directly derived from the conduct of paper
bingo, new text begin electronic linked bingo, new text end raffles, and paddlewheels, as defined in section 297E.01,
subdivision 8, and less the net prizes actually paid, other than prizes actually paid for
paper bingo, new text begin electronic linked bingo, new text end raffles, and paddlewheels, for the fiscal year. The
combined net receipts of an organization new text begin for the fiscal year new text end are subject to a tax computed
according to the following schedule new text begin of rates new text end :

	deleted text begin If the combined net receipts for the fiscal year are: deleted text end		deleted text begin The tax is: deleted text end
	deleted text begin Not over $87,500 deleted text end		deleted text begin nine percent deleted text end
	deleted text begin Over $87,500, but not over $122,500 deleted text end		deleted text begin $7,875 plus 18 percent of the amount over $87,500, but not over deleted text end deleted text begin $122,500 deleted text end
	deleted text begin Over $122,500, but not over $157,500 deleted text end		deleted text begin $14,175 plus 27 percent of the amount over deleted text end deleted text begin $122,500, but not over deleted text end deleted text begin $157,500 deleted text end
	deleted text begin Over $157,500 deleted text end		deleted text begin $23,625 plus 36 percent of the amount over deleted text end deleted text begin $157,500 deleted text end

new text begin (1) on the first $100,000, 9 percent;
new text end

new text begin (2) on all over $100,000 but not over $200,000, 18 percent;
new text end

new text begin (3) on all over $200,000 but not over $300,000, 27 percent; and
new text end

new text begin (4) on all over $300,000, 36 percent.
new text end

(b) On or before April 1, 2016, the commissioner shall estimate the total amount of
revenue, including interest and penalties, that will be collected for fiscal year 2016 from
taxes imposed under this chapter. If the amount estimated by the commissioner equals or
exceeds deleted text begin $94,800,000 deleted text end new text begin $72,000,000 new text end , the commissioner shall certify that effective July 1,
2016, the rates under this paragraph apply in lieu of the rates under paragraph (a) and shall
publish a notice to that effect in the State Register and notify each taxpayer by June 1,
2016. If the rates under this section apply, the combined net receipts of an organization new text begin for
the fiscal year new text end are subject to a tax computed according to the following schedule new text begin of rates new text end :

	deleted text begin If the combined net receipts for the fiscal year are: deleted text end		deleted text begin The tax is: deleted text end
	deleted text begin Not over $87,500 deleted text end		deleted text begin 8.5 percent deleted text end
	deleted text begin Over $87,500, but not over deleted text end deleted text begin $122,500 deleted text end		deleted text begin $7,438 plus 17 percent of the amount over $87,500, but not over deleted text end deleted text begin $122,500 deleted text end
	deleted text begin Over $122,500, but not over deleted text end deleted text begin $157,500 deleted text end		deleted text begin $13,388 plus 25.5 percent of the amount over deleted text end deleted text begin $122,500, but not over deleted text end deleted text begin $157,500 deleted text end
	deleted text begin Over $157,500 deleted text end		deleted text begin $22,313 plus 34 percent of the amount over deleted text end deleted text begin $157,500 deleted text end

new text begin (1) on the first $100,000, 8.5 percent;
new text end

new text begin (2) on all over $100,000 but not over $200,000, 17 percent;
new text end

new text begin (3) on all over $200,000 but not over $300,000, 25.5 percent; and
new text end

new text begin (4) on all over $300,000, 34 percent.
new text end

new text begin (c) The first $50,000 on which taxes would otherwise be due under this section
for a fiscal year is exempt from taxation.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end Gross receipts derived from sports-themed tipboards are exempt from taxation
under this section. For purposes of this paragraph, a sports-themed tipboard means a
sports-themed tipboard as defined in section 349.12, subdivision 34, under which the
winning numbers are determined by the numerical outcome of a professional sporting event.

new text begin (e) A bingo hall as defined in section 349.12, subdivision 4a, is exempt from taxation
under this subdivision with respect to receipts from paper pull-tabs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 5.

Minnesota Statutes 2014, section 297F.01, is amended by adding a subdivision
to read:

new text begin Subd. 6a. new text end

new text begin Consumable material. new text end

new text begin "Consumable material" means any liquid nicotine
solution or other material containing nicotine that is depleted as a vapor product is used.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 6.

Minnesota Statutes 2014, section 297F.01, subdivision 19, is amended to read:

Subd. 19.

Tobacco products.

(a) "Tobacco products" means any product
containing, made, or derived from tobacco that is intended for human consumption,
whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by
any other means, or any component, part, or accessory of a tobacco product, including,
but not limited to, cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut,
ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist
tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, cuttings and
sweepings of tobacco, new text begin vapor products, new text end and other kinds and forms of tobacco; but does
not include cigarettes as defined in this section. Tobacco products excludes any tobacco
product that has been approved by the United States Food and Drug Administration for
sale as a tobacco cessation product, as a tobacco dependence product, or for other medical
purposes, and is being marketed and sold solely for such an approved purpose.

(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4,
tobacco products includes a premium cigar, as defined in subdivision 13a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 7.

Minnesota Statutes 2014, section 297F.01, is amended by adding a subdivision
to read:

new text begin Subd. 24. new text end

new text begin Vapor products. new text end

new text begin "Vapor products" means any noncombustible product
that employs a heating element, power source, electronic circuit, or other electronic,
chemical, or mechanical means, regardless of shape or size, that can be used to produce
vapor from nicotine in a solution or other form. Vapor products include any electronic
cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device
and any vapor cartridge or other container of nicotine in a solution or other form that is
intended to be used with or in an electronic cigarette, electronic cigar, electronic cigarillo,
electronic pipe, or similar product or device. Vapor products do not include any product
regulated as a drug or device by the United States Food and Drug Administration.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 8.

Minnesota Statutes 2014, 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 rate
of deleted text begin 141.5 deleted text end new text begin 145 new text end mills, or deleted text begin 14.15 deleted text end new text begin 14.5 new text end cents, on each cigarette.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2014, section 297F.05, subdivision 3, is amended to read:

Subd. 3.

Rates; tobacco products.

(a) Except as provided in deleted text begin subdivision
deleted text end new text begin subdivisions new text end 3a new text begin and 3b new text end , a tax is imposed upon all tobacco products in this state and upon
any person engaged in business as a distributor, at the rate of 95 percent of the wholesale
sales price of the tobacco products. The tax is imposed at the time the distributor:

(1) brings, or causes to be brought, into this state from outside the state tobacco
products for sale;

(2) makes, manufactures, or fabricates tobacco products in this state for sale in
this state; or

(3) ships or transports tobacco products to retailers in this state, to be sold by those
retailers.

(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a
pack of 20 cigarettes weighing not more than three pounds per thousand, as established
under subdivision 1, is imposed on each container of moist snuff.

For purposes of this subdivision, a "container" means the smallest consumer-size can,
package, or other container that is marketed or packaged by the manufacturer, distributor,
or retailer for separate sale to a retail purchaser. When more than one container is
packaged together, each container is subject to tax.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made on or after July 1, 2015.
new text end

Sec. 10.

Minnesota Statutes 2014, section 297F.05, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Rates; vapor products. new text end

new text begin A tax is imposed upon all vapor products in this
state and upon any person engaged in business as a tobacco product distributor, at the rate
of 30 cents per milliliter of consumable material. The tax imposed under this subdivision
is imposed at the time the tobacco products distributor:
new text end

new text begin (1) brings, or causes to be brought into this state, vapor products for sale;
new text end

new text begin (2) makes, manufactures, or fabricates vapor products in this state for sale in this
state; or
new text end

new text begin (3) ships or transports vapor products to retailers in this state to be sold by those
retailers.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made on or after July 1, 2015.
new text end

Sec. 11.

Minnesota Statutes 2014, section 297F.05, is amended by adding a subdivision
to read:

new text begin Subd. 4b. new text end

new text begin Use tax; vapor products. new text end

new text begin A tax is imposed upon the use or storage by
consumers of all vapor products in this state, and upon such consumers, at the rate of 30
cents per milliliter of consumable material.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for use and storage of vapor products
on or after July 1, 2015.
new text end

Sec. 12.

Minnesota Statutes 2014, section 297F.06, subdivision 1, is amended to read:

Subdivision 1.

Federal laws.

The tax imposed by this section does not apply with
respect to any sale of cigarettes new text begin , vapor products, new text end or tobacco products which under the
Constitution and laws of the United States may not be subject to taxation by the state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made on or after July 1, 2015.
new text end

Sec. 13.

Minnesota Statutes 2014, section 297F.06, subdivision 4, is amended to read:

Subd. 4.

Tobacco products use tax.

The tobacco products use tax does not apply to
the possession, use, or storage of tobacco products if (1) the tobacco products have an
aggregate cost in any calendar month to the consumer of $50 or less, deleted text begin and deleted text end (2) new text begin for vapor
products the consumable material subject to the tax does not exceed in the aggregate 50
milliliters in any calendar month, and (3) new text end the tobacco products were carried into this state
by that consumer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for possession, use, or storage of
tobacco products on or after July 1, 2015.
new text end

Sec. 14.

Minnesota Statutes 2014, section 297F.08, subdivision 5, is amended to read:

Subd. 5.

Deposit of proceeds.

The commissioner shall use the amounts appropriated
by law to purchase stamps for resale. The commissioner shall charge the purchasers for the
deleted text begin costs of the stamps along with the deleted text end tax value new text begin of the stamps new text end plus shipping costs. The deleted text begin costs
recovered along with deleted text end shipping costs new text begin recovered new text end must be deposited into the general fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales of stamps made after June
30, 2015.
new text end

Sec. 15.

Minnesota Statutes 2014, 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 new text begin at a discount of 0.45 percent from the face amount of the stamps
purchased in any fiscal year, except that such discount shall not apply to that portion of the
face amount of the stamps representing the cigarette sales tax as imposed under section
297F.25 new text end . 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales of stamps made after June
30, 2015.
new text end

Sec. 16.

Minnesota Statutes 2014, section 297F.08, subdivision 8, is amended to read:

Subd. 8.

Sale of stamps.

The commissioner may sell stamps on a credit basis under
conditions prescribed by the commissioner. The commissioner shall sell the stamps at a
price which includes the tax after giving effect to the discount provided in subdivision
7. deleted text begin The commissioner shall recover the actual costs of the stamps from the distributor.
deleted text end The commissioner shall annually establish the maximum amount of stamps that may
be purchased each month.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales of stamps made after June
30, 2015.
new text end

Sec. 17.

Minnesota Statutes 2014, section 297F.09, subdivision 1, is amended to read:

Subdivision 1.

Monthly return; cigarette 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 of cigarettes manufactured or brought in
from outside the state or purchased during the preceding calendar month and the quantity
of cigarettes sold or otherwise disposed of in this state and outside this state during that
month. A licensed distributor outside this state shall in like manner file a return showing the
quantity of cigarettes shipped or transported into this state during the preceding calendar
month. Returns must be made in the form and manner prescribed by the commissioner
and must contain any other information required by the commissioner. The return must be
accompanied by a remittance for the full unpaid tax liability shown by it new text begin less 0.45 percent of
the liability on the face amount of the stamps purchased, excluding that portion of the face
amount of the stamps representing the cigarette sales tax as imposed under section 297F.25,
as compensation to reimburse the distributor for expenses incurred in the administration
of this chapter new text end . For distributors subject to the accelerated tax payment requirements in
subdivision 10, the return for the May liability is due two business days before June 30th
of the year and the return for the June liability is due on or before August 18th of the year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales of stamps made after June
30, 2015.
new text end

Sec. 18.

Minnesota Statutes 2014, section 309.53, subdivision 3, is amended to read:

Subd. 3.

Financial statement requirements.

The financial statement shall include
a balance sheet, statement of income and expense, and statement of functional expenses,
shall be consistent with forms furnished by the attorney general, and shall be prepared in
accordance with generally accepted accounting principles so as to make a full disclosure
of the following, including necessary allocations between each item and the basis of
such allocations:

(a) total receipts and total income from all sources;

(b) cost of management and general;

(c) program services;

(d) cost of fund-raising;

(e) cost of public education;

(f) funds or properties transferred out of state, with explanation as to recipient and
purpose;

(g) total net amount disbursed or dedicated within this state, broken down into total
amounts disbursed or dedicated for each major purpose, charitable or otherwise;

(h) names of professional fund-raisers used during the accounting year and the
financial compensation and profit resulting to each professional fund-raiser; and

(i) a list of the five highest paid directors, officers, and employees of the organization
and its related organizations, as that term is defined by section 317A.011, subdivision 18,
that receive total compensation of more than $100,000, together with the compensation paid
to each. For purposes of this subdivision, "compensation" is defined as the total amount
reported on Form W-2 (Box 5) or Form 1099-MISC (Box 7) issued by the organization
and its related organizations to the individual. The value of fringe benefits and deferred
compensation paid by the charitable organization and all related organizations as that term
is defined by section 317A.011, subdivision 18, shall also be reported as a separate item for
each person whose compensation is required to be reported pursuant to this subdivision.

Unless otherwise required by this subdivision, the financial statement need not be
certified.

A financial statement of a charitable organization which has received total revenue
in excess of $750,000 for the 12 months of operation covered by the statement shall be
accompanied by an audited financial statement prepared in accordance with generally
accepted accounting principles that has been examined by an independent certified public
accountant for the purpose of expressing an opinion. In preparing the audit the certified
public accountant shall take into consideration capital, endowment or other reserve funds,
if any, controlled by the charitable organization. For purposes of calculating the $750,000
total revenue threshold provided by this subdivision, the value of donated food to a
nonprofit food shelf may not be included if the food is donated for subsequent distribution
at no charge, and not for resale. new text begin Charitable organizations who conduct lawful gambling in
compliance with chapter 349 are not subject to the requirement for an audited financial
statement under this subdivision unless the organization's gross receipts, less prizes actually
paid, exceed $750,000 for the 12 months of operation covered by the financial statement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 19.

Minnesota Statutes 2014, section 349.12, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Bingo hall. new text end

new text begin "Bingo hall" means a premises where the primary business is
bingo conducted by a nonprofit organization licensed by the board.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 20.

Laws 2011, First Special Session chapter 9, article 6, section 97, subdivision
6, is amended to read:

Subd. 6.

MinnesotaCare provider taxes.

Minnesota Statutes 2010, sections
13.4967, subdivision 3; 295.50, subdivisions 1, 1a, 2, 2a, 3, 4, 6, 6a, 7, 9b, 9c, 10a, 10b,
12b, 13, 14, and 15; 295.51, subdivisions 1 and 1a; 295.52, subdivisions 1, 1a, 2, 3, 4,
4a, 5, 6, and 7; 295.53, subdivisions 1, 2, 3, and 4a; 295.54; 295.55; 295.56; 295.57;
295.58; 295.581; 295.582; and 295.59, are repealed effective for gross revenues received
after December 31, deleted text begin 2019 deleted text end new text begin 2018 new text end .

Sec. 21. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 297F.05, subdivision 1a, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

ARTICLE 8

TRANSPORTATION SALES TAX PROVISIONS

Section 1.

Minnesota Statutes 2014, section 97A.055, subdivision 2, is amended to read:

Subd. 2.

Receipts.

The commissioner of management and budget shall credit to the
game and fish fund all money received under the game and fish laws and all income from
state lands acquired by purchase or gift for game or fish purposes, including receipts from:

(1) licenses and permits issued;

(2) fines and forfeited bail;

(3) sales of contraband, wild animals, and other property under the control of the
division;

(4) fees from advanced education courses for hunters and trappers;

(5) reimbursements of expenditures by the division;

(6) contributions to the division; and

(7) revenue credited to the game and fish fund under section 297A.94, paragraph
deleted text begin (e) deleted text end new text begin (h) new text end , clause (1).

Sec. 2.

Minnesota Statutes 2014, section 297A.815, subdivision 3, is amended to read:

Subd. 3.

Motor vehicle lease sales tax revenue.

(a) deleted text begin For purposes of this subdivision,
"net revenue" means an amount equal to the revenues, including interest and penalties,
collected under this section, during the fiscal year; less $32,000,000 in each fiscal year.
deleted text end

deleted text begin (b) deleted text end On or before June 30 of each fiscal year, the commissioner of revenue shall
estimate the amount of the deleted text begin net revenue deleted text end new text begin revenues new text end for the current fiscal year new text begin , including
interest and penalties collected during the fiscal year under this section new text end .

deleted text begin (c) On or after July 1 deleted text end new text begin (b) By July 15 new text end of the subsequent fiscal year, the commissioner
of management and budget shall transfer the deleted text begin net revenue deleted text end new text begin revenues new text end as estimated in
paragraph deleted text begin (b) deleted text end new text begin (a) new text end from the general fund, as follows:

(1) deleted text begin $9,000,000 annually until January 1, 2015, and 50 percent annually thereafter to
the county state-aid highway fund. Notwithstanding any other law to the contrary, the
commissioner of transportation shall allocate the funds transferred under this clause to the
counties in the metropolitan area, as defined in section 473.121, subdivision 4, excluding
the counties of Hennepin and Ramsey, so that each county shall receive of such amount
the percentage that its population, as defined in section 477A.011, subdivision 3, estimated
or established by July 15 of the year prior to the current calendar year, bears to the total
population of the counties receiving funds under this clause deleted text end new text begin 50 percent to the county
highway allocation account in the transportation stability fund new text end ; and

(2) deleted text begin the remainder to the greater Minnesota transit account deleted text end new text begin 50 percent to the transit
allocation account in the transportation stability fund new text end .

new text begin (c) The revenues deposited under this subdivision do not include the revenues,
including interest and penalties, generated by the sales tax imposed under section
297A.62, subdivision 1a, which must be deposited as provided under the Minnesota
Constitution, article XI, section 15.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with the estimate that must
be completed on or before June 30, 2017, for a transfer that occurs on or after July 1, 2017,
except paragraph (c) is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2014, 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 management and budget 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) new text begin Beginning with sales taxes remitted after July 1, 2017, the commissioner shall
deposit in the state treasury the revenues collected under section 297A.64, subdivision
1, and credit them to the small cities assistance account under section 162.145 in the
transportation stability fund under section 16A.89.
new text end

new text begin (e) new text end 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.

new text begin (f) Beginning with sales taxes remitted after July 1, 2017, in conjunction with the
deposit of revenues under paragraph (d), the commissioner shall deposit into the state
treasury and credit to the metropolitan transit capital account in the transportation stability
fund under section 16A.89, an amount equal to the estimated revenues derived from the
tax rate imposed under section 297A.62, subdivision 1, on the lease or rental for not more
than 28 days of rental motor vehicles subject to section 297A.64. The commissioner shall
estimate the amount of sales tax revenues deposited under this paragraph based on the
amount of revenue deposited under paragraph (d).
new text end

new text begin (g) Starting after July 1, 2015, the commissioner shall deposit an amount of the
remittances monthly into the state treasury and credit them to the highway allocation
account in the transportation stability fund under section 16A.89, as a portion of the
estimated amount of taxes collected from the sales and purchase of motor vehicle repair
parts in that month. For the remittances between July 1, 2015, and June 30, 2016, the
monthly deposit amount is $12,500,000. For remittances in each subsequent fiscal year
period, the monthly deposit amount is one-twelfth of the product of (1) the estimated
percentage of sales tax attributable to the sale and purchase of motor vehicle parts
calculated under this paragraph, and (2) the total sales tax revenues for the calendar year
ending before the start of that fiscal year. By July 1, 2016, and June 30 of every second
year thereafter, the commissioner shall estimate the percent of total sales tax revenues
collected in the previous calendar year that is attributable to sales and purchases of motor
vehicle parts based on federal data and department consumption models. For purposes of
this paragraph, "motor vehicle" has the meaning given in section 297B.01, subdivision 11,
and "motor vehicle repair and replacement parts" includes (1) all parts, tires, accessories,
and equipment incorporated into or affixed to the motor vehicle as part of the motor
vehicle maintenance or repair, and (2) paint, oil, and other fluids that remain on or in the
motor vehicle as part of the motor vehicle maintenance or repair.
new text end

deleted text begin (e) deleted text end new text begin (h) new text end 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

(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.

deleted text begin (f) deleted text end new text begin (i) new text end The revenue dedicated under paragraph deleted text begin (e) deleted text end new text begin (h) new text end 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 deleted text begin (e) deleted text end new text begin (h) new text end 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 deleted text begin (e) deleted text end new text begin (h) new text end must be allocated for field operations.

deleted text begin (g) deleted text end new text begin (j) new text end The revenues deposited under paragraphs (a) to deleted text begin (f) deleted text end new text begin (i) new text end do not include the
revenues, including interest and penalties, generated by the sales tax imposed under
section 297A.62, subdivision 1a, which must be deposited as provided under the
Minnesota Constitution, article XI, section 15.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 4.

Minnesota Statutes 2014, section 297A.992, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section, the following terms have
the meanings given them:

(1) "metropolitan transportation area" means the counties participating in the joint
powers agreement under subdivision 3;

(2) "eligible county" means the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington;

(3) "committee" means the Grant Evaluation and Ranking System (GEARS)
Committee;

(4) "minimum guarantee county" means any metropolitan county or eligible county
that is participating in the joint powers agreement under subdivision 3, whose proportion
of the annual sales tax revenue under this section collected within that county is less
than or equal to three percent; deleted text begin and
deleted text end

(5) "population" means the population, as defined in section 477A.011, subdivision
3, estimated or established by July 15 of the year prior to the calendar year in which
the representatives will serve on the Grant Evaluation and Ranking System Committee
established under subdivision 5 new text begin ; and
new text end

new text begin (6) "transitway" means a guideway, as defined in section 174.93, subdivision 1, but
excluding intercity passenger rail new text end .

Sec. 5.

Minnesota Statutes 2014, section 297A.992, is amended by adding a
subdivision to read:

new text begin Subd. 2a. new text end

new text begin Tax base. new text end

new text begin Notwithstanding section 297A.99, subdivision 4, or any
requirements under the multistate agreement entered into under section 297A.995, the
tax under this section applies to all sales subject to the state sales tax under this chapter
that occur in the metropolitan transit area, except for sales and purchases of electricity
and natural gas.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2015.
new text end

Sec. 6.

Minnesota Statutes 2014, section 297A.992, subdivision 6, is amended to read:

Subd. 6.

deleted text begin Allocation of deleted text end Grant awards new text begin ; use and allocation requirements new text end .

(a) The
board must allocate grant awards only for the following transit purposes:

new text begin (1) assistance for transitways, which may consist of:
new text end

(i) capital improvements to transitways, including deleted text begin , deleted text end but not limited to deleted text begin , deleted text end commuter rail
rolling stock, light rail vehicles, and transitway buses;

(ii) capital costs for park-and-ride facilities, as defined in section 174.256,
subdivision 2;

(iii) feasibility studies, planning, alternatives analyses, environmental studies,
engineering, property acquisition for transitway purposes, and construction of transitways;
and

(iv) operating assistance for transitways new text begin ; or
new text end

new text begin (2) capital and operating assistance for transit systems, including but not limited to
bus operations and arterial bus rapid transit new text end .

(b) The joint powers board must annually award grants to each minimum guarantee
county in an amount no less than the amount of sales tax revenue collected within that
county.

(c) No more than 1.25 percent of the total awards may be annually allocated for
planning, studies, design, construction, maintenance, and operation of pedestrian programs
and bicycle programs and pathways.

Sec. 7.

Minnesota Statutes 2014, section 297A.992, subdivision 6a, is amended to read:

Subd. 6a.

Priority of fund uses.

new text begin (a) new text end The joint powers board shall allocate all
revenues from the taxes imposed under this section in conformance with the following
priority order:

(1) payment of debt service necessary for the fiscal year on bonds or other
obligations issued prior to January 1, 2011, under subdivision 7; deleted text begin and
deleted text end

(2) new text begin 100 percent of the net operating and capital maintenance costs for the fiscal year
for all transitways in which a grant award for capital or operating costs has previously
been provided under this section; and
new text end

new text begin (3) new text end as otherwise authorized under this section.

new text begin (b) The joint powers board must not award any grants to begin or continue work on
transit capital projects for which construction has not begun as of the effective date of this
section, unless the requirements under paragraph (a), clauses (1) and (2), are met.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies for grant awards made for calendar year 2016 and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2014, section 473.13, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Forecasted base appropriations. new text end

new text begin The base appropriation from the general
fund to the council for transit system operations under sections 473.371 to 473.449 in
fiscal year 2018 and thereafter is the greater of zero or:
new text end

new text begin (1) $76,626,000; less
new text end

new text begin (2) funds in the metropolitan area transit account in the transit assistance fund under
section 16A.88 in that fiscal year, attributable to motor vehicle sales tax revenue under
section 297B.09; less funds appropriated to the council from that account in fiscal year
2015, attributable to motor vehicle sales tax revenue; less
new text end

new text begin (3) the amount in grants to the council under section 297A.992, subdivision 6a, in
excess of 50 percent of the net operating costs of those guideways for which the grants
are provided.
new text end

new text begin APPLICATION. new text end

new text begin This section applies in the counties of Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, and Washington.
new text end

Sec. 9.

Minnesota Statutes 2014, section 473.39, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Limitations. new text end

new text begin The council may not issue certificates of indebtedness,
bonds, or other obligations secured in whole or in part by a pledge of motor vehicle sales
tax revenue received under sections 16A.88 and 297B.09, or by a pledge of any earnings
from the council's investment of motor vehicle sales tax revenues.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective the day following
final enactment and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
Scott, and Washington.
new text end

Sec. 10. new text begin SUPPLEMENTAL METROPOLITAN COUNCIL FUNDING.
new text end

new text begin The joint powers board under Minnesota Statutes, section 297A.992, shall allocate
$23,700,000 to the Metropolitan Council as part of calendar year 2015 grants. This is a
onetime amount and is in addition to other grant awards from the board
new text end

Sec. 11. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 297A.992, subdivision 12, new text end new text begin is repealed.
new text end

ARTICLE 9

AIDS AND CREDITS

Section 1.

Minnesota Statutes 2014, section 16A.726, is amended to read:

16A.726 SPORTS FACILITIES TRANSFERS; APPROPRIATIONS.

(a) If state appropriation bonds have not been issued under section 16A.965, amounts
not to exceed the increased revenues estimated by the commissioner of management and
budget under section 297E.021, subdivision 2, are appropriated from the general fund to
the commissioner of management and budget to make transfers to the Minnesota Sports
Facilities Authority for stadium costs as defined under section 473J.03, subdivision 9.

(b) The commissioner shall make transfers to the Minnesota Sports Facilities
Authority required to make the state payments under section 473J.13, subdivisions 2 and
4, and for the amount of Minneapolis taxes withheld under section 297A.994, subdivision
4, deleted text begin paragraph (a), clause deleted text end new text begin clauses new text end (5) new text begin and (6) new text end . Amounts sufficient to make the transfers are
appropriated to the commissioner from the general fund.

(c) $2,700,000 is annually appropriated from the general fund from fiscal year 2014
through fiscal year 2033 to the commissioner of management and budget for a grant to the
city of St. Paul for the operating or capital costs of new or existing sports facilities.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [273.1387] SCHOOL BUILDING BOND AGRICULTURAL CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin All class 2a, 2b, and 2c property under section 273.13,
subdivision 23, other than property consisting of the house, garage, and immediately
surrounding one acre of land of an agricultural homestead, is eligible to receive the credit
under this section.
new text end

new text begin Subd. 2. new text end

new text begin Credit amount. new text end

new text begin For each qualifying property, the school building bond
agricultural credit is equal to 50 percent of the property's eligible net tax capacity
multiplied by the school debt tax rate determined under section 275.08, subdivision 1b.
new text end

new text begin Subd. 3. new text end

new text begin Credit notification. new text end

new text begin The preliminary credit under this section must be
noted on the notice of proposed property taxes under section 275.065, subdivision 3. The
actual credit amount must be reported on the property tax statement under section 276.04,
subdivision 2. The credit may be claimed by the property owner as an income tax credit as
provided in section 290.06, subdivision 38.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 3.

Minnesota Statutes 2014, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare
and the county treasurer shall deliver after November 10 and on or before November 24
each year, by first class mail to each taxpayer at the address listed on the county's current
year's assessment roll, a notice of proposed property taxes. Upon written request by
the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
instead of on paper or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the case of
a town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, and metropolitan
taxing districts as defined in paragraph (i), the time and place of a meeting for each taxing
authority in which the budget and levy will be discussed and public input allowed, prior to
the final budget and levy determination. The taxing authorities must provide the county
auditor with the information to be included in the notice on or before the time it certifies
its proposed levy under subdivision 1. The public must be allowed to speak at that
meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
must provide a telephone number for the taxing authority that taxpayers may call if they
have questions related to the notice and an address where comments will be received by
mail, except that no notice required under this section shall be interpreted as requiring the
printing of a personal telephone number or address as the contact information for a taxing
authority. If a taxing authority does not maintain public offices where telephone calls can
be received by the authority, the authority may inform the county of the lack of a public
telephone number and the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used
for computing property taxes payable in the following year and for taxes payable in the
current year as each appears in the records of the county assessor on November 1 of the
current year; and, in the case of residential property, whether the property is classified as
homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
which the market values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state
general tax, agricultural homestead credit under section 273.1384, new text begin school building bond
agricultural credit under section 273.1387, new text end voter approved school levy, other local school
levy, and the sum of the special taxing districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts deleted text begin ; and deleted text end new text begin .
new text end

new text begin In the case of property allowed a school building bond agricultural credit under
section 273.1387, the notice must indicate that the property owner may claim the credit
under the income tax as provided in section 290.06, subdivision 38; and
new text end

(3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include
the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value
reductions for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within
three days of receipt of the notice, whichever is later. A taxpayer may notify the county
treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
which the notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 4.

Minnesota Statutes 2014, section 275.07, subdivision 2, is amended to read:

Subd. 2.

School district deleted text begin in more than one county deleted text end new text begin levies; special requirements new text end .

new text begin (a)
new text end In school districts lying in more than one county, the clerk shall certify the tax levied to the
auditor of the county in which the administrative offices of the school district are located.

new text begin (b) The district must identify the portion of the school district levy that is levied for
debt service at the time the levy is certified under this section. For the purposes of this
paragraph, "levied for debt service" means levies authorized under sections 123B.53,
123B.535, and 123B.55, as adjusted by sections 126C.46 and 126C.48, net of any debt
excess levy reductions under section 475.61, subdivision 4.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 5.

Minnesota Statutes 2014, section 275.08, subdivision 1b, is amended to read:

Subd. 1b.

Computation of tax rates.

new text begin (a) new text end The amounts certified to be levied against
net tax capacity under section 275.07 by an individual local government unit shall be
divided by the total net tax capacity of all taxable properties within the local government
unit's taxing jurisdiction. The resulting ratio, the local government's local tax rate,
multiplied by each property's net tax capacity shall be each property's net tax capacity tax
for that local government unit before reduction by any credits.

new text begin (b) The auditor must also determine the school debt tax rate for each school district
equal to the school debt service levy certified under section 275.07, divided by the total
net tax capacity of all taxable property within the district.
new text end

new text begin (c) new text end Any amount certified to the county auditor to be levied against market value shall
be divided by the total referendum market value of all taxable properties within the taxing
district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by
each property's referendum market value shall be each property's new referendum tax
before reduction by any credits. For the purposes of this subdivision, "referendum market
value" means the market value as defined in section 126C.01, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 6.

Minnesota Statutes 2014, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing
of the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated.
The amounts due all other special taxing districts, if any, may be aggregated except that
any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate
line directly under the appropriate county's levy. If the county levy under this paragraph
includes an amount for a lake improvement district as defined under sections 103B.501
to 103B.581, the amount attributable for that purpose must be separately stated from the
remaining county levy amount. In the case of Ramsey County, if the county levy under this
paragraph includes an amount for public library service under section 134.07, the amount
attributable for that purpose may be separated from the remaining county levy amount.
The amount of the tax on homesteads qualifying under the senior citizens' property tax
deferral program under chapter 290B is the total amount of property tax before subtraction
of the deferred property tax amount. The amount of the tax on contamination value
imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar
amounts, including the dollar amount of any special assessments, may be rounded to the
nearest even whole dollar. For purposes of this section whole odd-numbered dollars may
be adjusted to the next higher even-numbered dollar. The amount of market value excluded
under section 273.11, subdivision 16, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13,
subdivision 35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for homestead agricultural properties, the credit under section 273.1384;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; deleted text begin and
deleted text end

(7) the net tax payable in the manner required in paragraph (a) deleted text begin . deleted text end new text begin ; and
new text end

new text begin (8) the school building bond agricultural credit under section 273.1387, with a
statement indicating that the credit may be claimed as an income tax credit under section
290.06, subdivision 38.
new text end

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 7.

Minnesota Statutes 2014, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 38. new text end

new text begin School building bond agricultural credit. new text end

new text begin (a) A taxpayer is allowed
a credit against the tax imposed under subdivision 2c and section 290.091 equal to the
amount determined under section 273.1387 and reported to the taxpayer on the property tax
statement as provided in section 276.04, subdivision 2. The credit is allowed in the taxable
year for which the property taxes are payable. For a taxpayer who is allowed a credit under
section 273.1387 for more than one parcel, the credit under this section equals the sum of
the amounts allowed under section 273.1387 for all parcels. A credit allowed under section
273.1387 to a property with multiple owners must be allocated to the owners in the same
ratio that the owners are allowed to deduct the taxes on the property in the computation of
net income. The total amount claimed by all owners may not exceed the amount determined
under section 273.1387 and reported on the property tax statement for the property.
new text end

new text begin (b) If the amount of credit that the taxpayer is eligible to receive under this
subdivision exceeds the taxpayer's liability under this section and section 290.091, the
commissioner of revenue shall refund the excess to the taxpayer.
new text end

new text begin (c) The amount necessary to pay claims for refunds provided in this subdivision is
appropriated to the commissioner of revenue from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 8.

Minnesota Statutes 2014, section 297A.994, subdivision 4, is amended to read:

Subd. 4.

General fund allocations.

The commissioner must retain and deposit to
the general fund the following amounts, as required by subdivision 3, clause (3):

(1) for state bond debt service support beginning in calendar year 2021, and for each
calendar year thereafter through calendar year 2046, periodic amounts so that not later than
December 31, 2046, an aggregate amount equal to a present value of $150,000,000 has been
deposited in the general fund. To determine aggregate present value, the commissioner
must consult with the commissioner of management and budget regarding the present value
dates, discount rate or rates, and schedules of annual amounts. The present value date or
dates must be based on the date or dates bonds are sold under section 16A.965, or the date
or dates other state funds, if any, are deposited into the construction fund. The discount rate
or rates must be based on the true interest cost of the bonds issued under section 16A.965,
or an equivalent 30-year bond index, as determined by the commissioner of management
and budget. The schedule of annual amounts must be certified to the commissioner by the
commissioner of management and budget and the finance officer of the city;

(2) for the capital improvement reserve appropriation to the Minnesota Sports
Facilities Authority beginning in calendar year 2021, and for each calendar year thereafter
through calendar year 2046, an aggregate annual amount equal to the amount paid by the
state for this purpose in that calendar year under section 473J.13, subdivision 4;

(3) for the operating expense appropriation to the Minnesota Sports Facilities
Authority beginning in calendar year 2021, and for each calendar year thereafter through
calendar year 2046, an aggregate annual amount equal to the amount paid by the state for
this purpose in that calendar year under section 473J.13, subdivision 2;

(4) for recapture of state advances for capital improvements and operating expenses
for calendar years 2016 through 2020 beginning in calendar year 2021, and for each
calendar year thereafter until all amounts under this clause have been paid, proportionate
amounts periodically until an aggregate amount equal to the present value of all amounts
paid by the state have been deposited in the general fund. To determine the present
value of the amounts paid by the state to the authority and the present value of amounts
deposited to the general fund under this clause, the commissioner shall consult with the
commissioner of management and budget regarding the present value dates, discount rate
or rates, and schedule of annual amounts. The present value dates must be based on
the dates state funds are paid to the authority, or the dates the commissioner of revenue
deposits taxes for purposes of this clause to the general fund. The discount rates must be
based on the reasonably equivalent cost of state funds as determined by the commissioner
of management and budget. The schedule of annual amounts must be revised to reflect
amounts paid under section 473J.13, subdivision 2, paragraph (b), for 2016 to 2020,
and subdivision 4, paragraph (c), for 2016 to 2020, and taxes deposited to the general
fund from time to time under this clause, and the schedule and revised schedules must
be certified to the commissioner by the commissioner of management and budget and
the finance officer of the city, and are transferred as accrued from the general fund for
repayment of advances made by the state to the authority; deleted text begin and
deleted text end

(5) to capture increases in taxes imposed under the special law, for the benefit of
the Minnesota Sports Facilities Authority, beginning in calendar year 2013 and for each
calendar year thereafter through 2046, new text begin except as required under clause (6), new text end there shall be
deposited to the general fund in proportionate periodic payments in the following year, an
amount equal to the following:

(i) 50 percent of the difference, if any, by which the amount of the net annual taxes
for the previous year exceeds the sum of the net actual taxes in calendar year 2011 plus
$1,000,000, inflated at two percent per year since 2011, minus

(ii) 25 percent of the difference, if any, by which the amount of the net annual taxes
for the preceding year exceeds the sum of the net actual taxes in calendar year 2011 plus
$3,000,000, inflated at two percent per year since 2011 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (6) to offset the city aid loss in section 19, the amount deposited to the general fund
under clause (5) is reduced to zero for payments made between July 1, 2015, through June
30, 2017, until a maximum amount of $5,864,000 in total revenue has been forgone in
deposits to the general fund under that clause; with the additional revenue returned to the
city to be deposited in its general fund and used as required under section 19.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2014, section 477A.013, is amended by adding a
subdivision to read:

new text begin Subd. 9a. new text end

new text begin Maximum final aid payment to first class cities. new text end

new text begin A first class city may
not receive a total aid payment in any year under this section that exceeds an amount equal
to 112.5 percent of the average per capita amount for all cities, except first class cities,
under subdivision 9, multiplied by its population. Any aid calculated for these cities under
subdivision 9 in excess of the amount calculated under this subdivision shall be retained
in the general fund. For purposes of this subdivision, "first class city" has the meaning
given in section 410.01.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2016 and thereafter.
new text end

Sec. 10.

Minnesota Statutes 2014, section 477A.013, subdivision 10, is amended to
read:

Subd. 10.

Levy adjustments for aid decreases.

Notwithstanding any local
ordinance or charter provision, a city whose certified aid under deleted text begin subdivision deleted text end new text begin subdivisions new text end 9
new text begin and 9a new text end is less than the amount it received in the previous year under the same subdivision
may increase its levy payable in the same year as the certified aid is paid by an amount
equal to the aid decrease for that year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2016 and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2014, section 477A.017, subdivision 2, is amended to read:

Subd. 2.

State auditor's duties.

The state auditor shall prescribe uniform financial
accounting and reporting standards in conformity with national standards to be applicable
to cities and towns of more than 2,500 population and uniform reporting standards to be
applicable to cities new text begin and towns new text end of less than 2,500 population.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for reporting of financial information
for years ending on or after December 31, 2015.
new text end

Sec. 12.

Minnesota Statutes 2014, section 477A.017, is amended by adding a
subdivision to read:

new text begin Subd. 4. new text end

new text begin Noncompliance. new text end

new text begin (a) If a county, city, or town required to make financial
reports under this section does not file them in a timely fashion, the state auditor may
arrange to complete and file the financial reports on its behalf and charge the county, city,
or town for 105 percent of the cost of the service. The amount charged may not exceed
the amount of aid the county, city, or town receives under sections 477A.011 to 477A.03.
The state auditor may use staff from the state auditor's office or may contract with persons
from the private sector to complete the reports. The county, city, or town must provide
access to all public records necessary to filing the financial report to the state auditor or
state auditor's designee.
new text end

new text begin (b) The state auditor may delay the dates for filing required financial reports or
waive the filing of reports for any year upon petition of the chief clerical officer of a
county, city, or town in the case of a disaster or emergency. The county, city, or town must
provide any information requested by the state auditor needed to make the decision on
whether or not to delay or waive the filing requirements. The decision of the state auditor
under this paragraph is final.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13.

Minnesota Statutes 2014, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

deleted text begin For aids payable in 2014, the total aid paid under section
477A.013, subdivision 9, is $507,598,012. deleted text end The total aid paid under section 477A.013,
subdivision 9, is $516,898,012 for aids payable in 2015. For aids payable in 2016
and thereafter, the total aid deleted text begin paid deleted text end new text begin calculated new text end under section 477A.013, subdivision 9, is
$519,398,012. new text begin For aids payable in 2016 and thereafter, the total aids payable to cities under
section 477A.013 is the amount calculated under section 477A.013, subdivision 9, minus
the amount of aid retained in the general fund under section 477A.013, subdivision 9a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2016 and thereafter.
new text end

Sec. 14.

Minnesota Statutes 2014, section 477A.03, subdivision 2b, is amended to read:

Subd. 2b.

Counties.

(a) For aids payable in deleted text begin 2014 and thereafter deleted text end new text begin 2016 and
thereafter new text end , the total aid payable under section 477A.0124, subdivision 3, is deleted text begin $100,795,000
deleted text end new text begin $100,295,000 new text end . deleted text begin Each calendar year, $500,000 of this appropriation shall be retained by the
commissioner of revenue to make reimbursements to the commissioner of management and
budget for payments made under section 611.27. The reimbursements shall be to defray the
additional costs associated with court-ordered counsel under section 611.27. Any retained
amounts not used for reimbursement in a year shall be included in the next distribution
of county need aid that is certified to the county auditors for the purpose of property tax
reduction for the next taxes payable year. deleted text end new text begin Any amount retained from the 2015 allocation
for costs of court-ordered counsel under this subdivision and not used for reimbursement
shall be included in the distribution of county need aid for calendar year 2016.
new text end

(b) For aids payable in deleted text begin 2014 and thereafter deleted text end new text begin 2015 and thereafter new text end , the total aid under
section 477A.0124, subdivision 4, is deleted text begin $104,909,575 deleted text end new text begin $104,695,575 new text end . deleted text begin The commissioner
of revenue shall transfer to the commissioner of management and budget $207,000
annually for the cost of preparation of local impact notes as required by section 3.987,
and other local government activities. The commissioner of revenue shall transfer to the
commissioner of education $7,000 annually for the cost of preparation of local impact
notes for school districts as required by section 3.987. The commissioner of revenue shall
deduct the amounts transferred under this paragraph from the appropriation under this
paragraph. The amounts transferred are appropriated to the commissioner of management
and budget and the commissioner of education respectively.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to paragraph (a) is effective for aids payable
in 2016 and thereafter. The amendment to paragraph (b) is effective for aids payable in
2015 and thereafter.
new text end

Sec. 15.

Minnesota Statutes 2014, section 611.27, subdivision 13, is amended to read:

Subd. 13.

Public defense services; correctional facility inmates.

All billings
for services rendered and ordered under subdivision 7 shall require the approval of the
chief district public defender before being forwarded on a monthly basis to the state
public defender. In cases where adequate representation cannot be provided by the district
public defender and where counsel has been appointed under a court order, the state
public defender shall forward to the commissioner of management and budget all billings
for services rendered under the court order. deleted text begin The commissioner shall pay for services
from county program aid retained by the commissioner of revenue for that purpose under
section 477A.03, subdivision 2b, paragraph (a).
deleted text end

The costs of appointed counsel and associated services in cases arising from new
criminal charges brought against indigent inmates who are incarcerated in a Minnesota
state correctional facility are the responsibility of the state Board of Public Defense. In
such cases the state public defender may follow the procedures outlined in this section for
obtaining court-ordered counsel.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016.
new text end

Sec. 16.

Minnesota Statutes 2014, section 611.27, subdivision 15, is amended to read:

Subd. 15.

Costs of transcripts.

In appeal cases and postconviction cases where
the appellate public defender's office does not have sufficient funds to pay for transcripts
and other necessary expenses because it has spent or committed all of the transcript
funds in its annual budget, the state public defender may forward to the commissioner
of management and budget all billings for transcripts and other necessary expenses. deleted text begin The
commissioner shall pay for these transcripts and other necessary expenses from county
program aid retained by the commissioner of revenue for that purpose under section
477A.03, subdivision 2b, paragraph (a).
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016.
new text end

Sec. 17. new text begin 2013 CITY AID PENALTY FORGIVENESS; CITY OF OSLO.
new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the city of
Oslo shall receive the portion of its aid payment for calendar year 2013 under Minnesota
Statutes, section 477A.013, that was withheld under Minnesota Statutes, section
477A.017, subdivision 3, provided that the state auditor certifies to the commissioner
of revenue that it received audited financial statements from the city for calendar year
2012 by December 31, 2013. The commissioner of revenue shall make a payment of
$37,473.50 with the first payment of aids under Minnesota Statutes, section 477A.015.
$37,473.50 is appropriated from the general fund to the commissioner of revenue in fiscal
year 2016 to make this payment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 18. new text begin 2014 AID PENALTY FORGIVENESS.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, any city
that did not receive all or part of its calendar year 2014 aid payment for failing to meet
the requirements for filing calendar year 2013 financial reports with the state auditor, as
required under Minnesota Statutes, section 477A.017, subdivision 3, shall receive its aid
payment provided that the state auditor certifies to the commissioner of revenue that it
received audited financial statements from the city for calendar years 2013 and 2014 by
June 1, 2015.
new text end

new text begin (b) The commissioner of revenue shall make payment to each qualifying city no
later than June 30, 2015. Up to $101,570 of the fiscal year 2015 appropriation for local
government aid is available for the payment under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 19. new text begin CALENDAR YEAR 2015 EARLY PAYMENT TO CERTAIN CITIES.
new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.015, the commissioner of revenue
shall pay a percentage of the July 20, 2015, aid payments under Minnesota Statutes,
sections 477A.011 to 477A.013 to cities with a 2013 population of 80,000 or more, by
June 22, 2015. The percentage of the aid paid in June for each city will be equal and set to
the amount so that total June payments equal $18,750,000. The first payment to each city
on or after July 20, 2015, shall be reduced by the amount of its June payment amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 20. new text begin 2016 REDUCTION TO OFFSET ADDITIONAL GENERAL FUND USE
OF LOCAL SALES TAX REVENUE.
new text end

new text begin For the city of Minneapolis the aid payable under Minnesota Statutes, section
477A.013, subdivision 9, in 2016 only, is reduced by $5,864,000. The city may deposit in
its general fund the additional portion of its sales tax, retained under Minnesota Statutes,
section 297A.994, subdivision 4, clause (6), during fiscal year 2016 and fiscal year 2017,
up to $5,864,000 to fund any governmental purposes in calendar year 2016 that would
otherwise be funded with aid under Minnesota Statutes, section 477A.013, subdivision 9.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2016 only.
new text end

Sec. 21. new text begin COUNTY PROGRAM AID WORKING GROUP.
new text end

new text begin (a) A county program aid working group is established as provided in this section.
The goals of the working group are to recommend one or more alternative options for
distributing county program aid that promote:
new text end

new text begin (1) fairness, with regard to the wide range of populations, demographic profiles,
service needs, tax bases, economic conditions, and physical conditions of counties across
the state; and
new text end

new text begin (2) stability, to reduce major year-to-year fluctuations in aid distributions and allow
counties to predict the amount of aid that they will receive from year to year.
new text end

new text begin (b) The 11-member working group shall consist of the following members:
new text end

new text begin (1) two state representatives, both appointed by the chair of the house of
representatives Committee on Taxes, one from the majority party and one from the largest
minority party;
new text end

new text begin (2) two senators appointed by the senate Subcommittee on Committees of the
Committee on Rules and Administration, one from the majority party and one from the
largest minority party;
new text end

new text begin (3) two persons appointed by the governor; and
new text end

new text begin (4) five persons appointed by the Association of Minnesota Counties, provided that
they are county officials, and that no more than two persons are appointed from counties
in the metropolitan area as defined in Minnesota Statutes, section 473.121, subdivision 2.
new text end

new text begin (c) The state representative from the majority party shall chair the initial meeting,
and the working group shall elect a chair at that initial meeting. The working group
will meet at the call of the chair. Members of the working group shall serve without
compensation. Legislative staff must provide administrative support to the working group.
Chapter 13D does not apply to meetings of the working group. Meetings of the working
group must be open to the public and the working group must provide notice of a meeting
to potentially interested persons at least seven days before the meeting. A meeting of the
working group occurs when a quorum is present.
new text end

new text begin (d) The working group shall make its advisory recommendations to the chairs of the
house of representatives and senate committees with jurisdiction over taxes, in compliance
with Minnesota Statutes, sections 3.195 and 3.197, on or before February 1, 2016, at
which time the working group shall be finished and this section expires.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 22. new text begin STUDY ON IMPACT OF ADDITIONAL HEALTH-RELATED COSTS
INCURRED BY COUNTIES.
new text end

new text begin The commissioner of revenue shall collect information from each county and
compile a report on the total increase in county administrative costs due to lack of
functionality of the MNsure eligibility determination system for medical assistance
and MinnesotaCare in the 2014 calendar year compared to those costs had the MNsure
eligibility determination system been fully functional. The study should include
information on the number of additional staff hours and related salary costs, as well
as other associated expenses related to increased processing time for (1) determining
eligibility for medical assistance and MNsure applicants, and (2) processing renewals and
modifications for life change events of existing clients for medical assistance and MNsure.
The report on this information is due to the chairs of the house of representatives and
senate committees with jurisdiction over taxes, in compliance with Minnesota Statutes,
sections 3.195 and 3.197, by February 15, 2016.
new text end

Sec. 23. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, sections 477A.017, subdivision 3; 477A.085; and
477A.19, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 10

MISCELLANEOUS

Section 1.

new text begin [11A.237] ACCOUNT FOR COUNTY JOINT TRUST FUND
PAYMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The State Board of Investment, when requested by a
county as required under sections 97A.056, subdivision 1b, and 116P.045, subdivision 2,
shall invest the funds deposited by the commissioner of revenue, acting as an agent on its
behalf, under section 97A.056, subdivision 1b, or 116P.045, subdivision 2, in a special
account for that purpose in the combined investment funds established in section 11A.14,
subject to the policy and procedures of the State Board of Investment. Use of the funds is
restricted to payments to the commissioner of revenue, acting as an agent on behalf of
the counties, for distributions to counties under sections 97A.056, subdivision 1b, and
116P.045, subdivision 3.
new text end

new text begin Subd. 2. new text end

new text begin Account maintenance and investment. new text end

new text begin The commissioner of revenue
may deposit money into the account on behalf of the counties and may withdraw money
from the account for the purpose of making distributions to the counties under sections
97A.056, subdivision 1b, and 116P.045, subdivision 3, only. The commissioner of revenue
shall make one payment under each section each year for all counties eligible for a payment
in that year. The commissioner shall make one withdrawal annually at a time negotiated
with the executive director of the State Board of Investment, but no later than November
15 to cover distributions to counties under section 477A.30, up to the limit allowed under
that section. Such transactions shall be in a manner required by the executive director of
the State Board of Investment. Investment earnings must be credited to the account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning January 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2014, section 97A.056, subdivision 1a, is amended to read:

Subd. 1a.

Definitions.

deleted text begin For the purpose of deleted text end new text begin (a) The definitions in this subdivision
apply to this section and new text end appropriations from the outdoor heritage fund deleted text begin , deleted text end new text begin .
new text end

new text begin (b) "Land acquisition costs" means acquisition coordination costs, costs of
engineering services, appraisal fees, attorney fees, taxes, assessments required at the time
of purchase, onetime trust fund payments under subdivision 1b, and recording fees.
new text end

new text begin (c) new text end "Recipient" means the entity responsible for deliverables financed by the outdoor
heritage fund.

Sec. 3.

Minnesota Statutes 2014, section 97A.056, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Outdoor heritage trust fund account; trust fund payments. new text end

new text begin (a)
An outdoor heritage trust fund account is created in the special revenue fund. The
State Board of Investment must ensure the account is invested under section 11A.24.
The commissioner of management and budget must credit to the account all money
appropriated to the account and all money earned by the account. The principal of the
account and any unexpended earnings must be invested and reinvested by the State Board
of Investment. Nothing in this section limits the source of contributions to the account.
Money in the account must be used only for the purposes of this subdivision.
new text end

new text begin (b) State land acquired in fee in whole or in part with money appropriated from the
outdoor heritage fund is eligible for a onetime trust fund payment as provided under this
subdivision. For purposes of this subdivision, "acquired in part" means that at least 20
percent of the state payment for the parcel was from money from the outdoor heritage
fund. The trust payment is equal to 30 times the property taxes assessed in the year prior
to the year in which the land is acquired. If the land was acquired from a private party
that was exempt from paying property taxes, the payments must be based on 30 times the
property taxes assessed on comparable land in the year prior to the year in which the land
is acquired. By September 1 of each year, the county in which the land is acquired must
provide the commissioner of revenue with information necessary in a form determined
by the commissioner to make this determination for all lands acquired for the 12-month
period ending on June 30 of that year. The commissioner of revenue must make a trust
payment on behalf of each county on the same date as the first payment under section
273.1384, subdivision 4, each year for all land acquired in that county in the 12-month
period ending on June 30 of that year to the State Board of Investment as required under
paragraph (e). The money so deposited is money paid to the counties and may only be
withdrawn for the purposes allowed under section 477A.30. The commissioner of revenue
must inform each county by October 15 of each year the amount deposited on the county's
behalf with the State Board of Investment under this subdivision.
new text end

new text begin (c) If the land eligible for a trust fund payment under this subdivision is also eligible
for a trust fund payment under section 116P.045, the payment under this subdivision is
equal to the amount calculated under paragraph (b), multiplied by the ratio of (1) the
amount paid for the parcel with money from the outdoor heritage fund to (2) the sum
of the money paid for the parcel out of the outdoor heritage fund and the environment
and natural resources trust fund.
new text end

new text begin (d) The amount necessary to make the payments required under this subdivision is
annually appropriated from the outdoor heritage trust fund account to the commissioner of
revenue.
new text end

new text begin (e) In order to receive a trust fund payment under this subdivision, a county
board must enter into an agreement with the State Board of Investment to allow the
commissioner of revenue to make deposits and withdrawals on behalf of the county into
and out of the county joint trust fund account under section 1.
new text end

new text begin (f) Land receiving a trust fund payment under this subdivision is not eligible
for payments under sections 477A.11 to 477A.14, but is eligible for distribution of
withdrawals from the county joint trust fund account under section 477A.30.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016, and applies to land
acquired with funds appropriated on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2014, section 97A.056, is amended by adding a subdivision
to read:

new text begin Subd. 15b. new text end

new text begin State acquisition of land; restrictions. new text end

new text begin The state may not use funds
from the environment and natural resources fund to acquire in fee in whole or in part any
land currently subject to property taxes or any land owned by a nonprofit organization that
was subject to property taxes prior to the land's acquisition by the nonprofit organization if
(1) subdivision 1b is void, or (2) sufficient funds to cover the onetime trust fund payment
required under that subdivision have not been appropriated or are not available.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016, and applies to land
acquired with funds appropriated on or after that date.
new text end

Sec. 5.

Minnesota Statutes 2014, section 116P.02, subdivision 1, is amended to read:

Subdivision 1.

Applicability.

The definitions in this section apply to this chapter new text begin ,
except that the definition in subdivision 6 does not apply to section 116P.045 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016.
new text end

Sec. 6.

Minnesota Statutes 2014, section 116P.02, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Land acquisition costs. new text end

new text begin "Land acquisition costs" means acquisition
coordination costs, costs of engineering services, appraisal fees, attorney fees, taxes,
assessments required at the time of purchase, payments under section 116P.045, and
recording fees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016.
new text end

Sec. 7.

new text begin [116P.045] ENVIRONMENT AND NATURAL RESOURCES TRUST
FUND PAYMENT ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account created. new text end

new text begin An environment and natural resources trust fund
payment account is created in the special revenue fund. The State Board of Investment
must ensure the account is invested under section 11A.24. The commissioner of
management and budget must credit to the account all money appropriated to the account
and all money earned by the account. The principal of the account and any unexpended
earnings must be invested and reinvested by the State Board of Investment. Nothing in
this section limits the source of contributions to the account. Money in the account must
be used only for the purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin Trust fund payment; appropriation. new text end

new text begin (a) State land acquired in fee in
whole or in part with money appropriated from the environment and natural resources trust
fund is eligible for a onetime trust fund payment as provided under this subdivision. For
purposes of this subdivision, "acquired in part" means that at least 20 percent of the state
payment for the parcel was from money from the environment and natural resources trust
fund. The trust payment is equal to 30 times the property taxes assessed in the year prior
to the year in which the land is acquired. If the land was acquired from a private party
that was exempt from paying property taxes, the payments must be based on 30 times the
property taxes assessed on comparable land in the year prior to the year in which the land
is acquired. By September 1 of each year, the county in which the land is acquired must
provide the commissioner of revenue with information necessary in a form determined
by the commissioner to make this determination for all lands acquired for the 12-month
period ending on June 30 of that year. The commissioner of revenue must make a trust
payment on behalf of each county on the same date as the first payment under section
273.1384, subdivision 4, each year for all land acquired in that county in the 12-month
period ending on June 30 of that year to the State Board of Investment as required under
paragraph (e). The money so deposited is money paid to the counties and may only be
withdrawn for the purposes allowed under section 477A.30. The commissioner of revenue
must inform each county by October 15 of each year the amount deposited on the county's
behalf with the State Board of Investment under this subdivision.
new text end

new text begin (b) If the land eligible for a trust fund payment under this subdivision is also eligible
for a trust fund payment under section 97A.056, subdivision 1b, the payment under this
subdivision is equal to the amount calculated under paragraph (a), multiplied by the ratio
of (1) the amount paid for the parcel with money from the environment and natural
resources trust fund to (2) the sum of the money paid for the parcel out of the outdoor
heritage fund and the environment and natural resources trust fund.
new text end

new text begin (c) The amount necessary to make the payments required under this subdivision is
annually appropriated from the environment and natural resources trust fund payment
account to the commissioner of revenue.
new text end

new text begin Subd. 3. new text end

new text begin County requirements. new text end

new text begin In order to receive a trust fund payment under this
section, a county board must enter into an agreement with the State Board of Investment
to allow the commissioner of revenue to make deposits and withdrawals on behalf of the
county into and out of the county joint trust fund account under section 1.
new text end

new text begin Subd. 4. new text end

new text begin Ineligible for other payments. new text end

new text begin Land receiving a trust fund payment
under this section is not eligible for payments under sections 477A.11 to 477A.14, but
is eligible for distribution of withdrawals from the county joint trust fund account under
section 477A.30.
new text end

new text begin Subd. 5. new text end

new text begin State acquisition of land; restrictions. new text end

new text begin The state may not use funds from
the outdoor heritage fund to acquire in fee in whole or in part any land currently subject to
property taxes or any land owned by a nonprofit organization that was subject to property
taxes prior to the land's acquisition by the nonprofit organization if (1) subdivision 2 is
void, or (2) sufficient funds to cover the one time trust fund payment required under that
subdivision have not been appropriated or are not available.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016, and applies to land
acquired with funds appropriated on or after that date.
new text end

Sec. 8.

Minnesota Statutes 2014, section 270A.03, subdivision 7, is amended to read:

Subd. 7.

Refund.

"Refund" means an individual income tax refund deleted text begin or political
contribution refund deleted text end , pursuant to chapter 290, or a property tax credit or refund, pursuant to
chapter 290A, or a sustainable forest payment to a claimant under chapter 290C.

For purposes of this chapter, lottery prizes, as set forth in section 349A.08, subdivision
8, and amounts granted to persons by the legislature on the recommendation of the joint
senate-house of representatives Subcommittee on Claims shall be treated as refunds.

In the case of a joint property tax refund payable to spouses under chapter 290A,
the refund shall be considered as belonging to each spouse in the proportion of the total
refund that equals each spouse's proportion of the total income determined under section
290A.03, subdivision 3. In the case of a joint income tax refund under chapter 289A, the
refund shall be considered as belonging to each spouse in the proportion of the total
refund that equals each spouse's proportion of the total taxable income determined under
section 290.01, subdivision 29. The commissioner shall remit the entire refund to the
claimant agency, which shall, upon the request of the spouse who does not owe the debt,
determine the amount of the refund belonging to that spouse and refund the amount to
that spouse. For court fines, fees, and surcharges and court-ordered restitution under
section 611A.04, subdivision 2, the notice provided by the commissioner of revenue under
section 270A.07, subdivision 2, paragraph (b), serves as the appropriate legal notice
to the spouse who does not owe the debt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for political contribution refund
claims based on contributions made on or after July 1, 2015.
new text end

Sec. 9.

Minnesota Statutes 2014, section 270B.14, subdivision 17, is amended to read:

Subd. 17.

Disclosure to Department of Commerce.

The commissioner may
disclose to the commissioner of commerce information required to administer the Uniform
Disposition of Unclaimed Property Act in sections 345.31 to 345.60, including the Social
Security numbers of the taxpayers whose refunds are on the report of abandoned property
submitted by the commissioner to the commissioner of commerce under section 345.41.
Except for data published under section 345.42, the information received that is private or
nonpublic data retains its classification deleted text begin , and can be used by the commissioner of commerce
only for the purpose of verifying that the persons claiming the refunds are the owners deleted text end .
new text begin The commissioner shall coordinate with the commissioner of commerce to provide by
January 15 of each year the addresses of taxpayers whose names and Social Security
numbers indicate they are owners of abandoned property under the Uniform Disposition
of Unclaimed Property Act in sections 345.31 to 345.60.
new text end

Sec. 10.

Minnesota Statutes 2014, section 270C.13, subdivision 1, is amended to read:

Subdivision 1.

Biennial report.

The commissioner shall report to the legislature
by March 1 of each odd-numbered year on the overall incidence of the income tax,
sales and excise taxes, and property tax. The report shall present information on the
distribution of the tax burden as follows: (1) for the overall income distribution, using
a systemwide incidence measure such as the Suits index or other appropriate measures
of equality and inequality; (2) by income classes, including at a minimum deciles of the
income distribution; and (3) by other appropriate taxpayer characteristics. new text begin The report
must also include information on the distribution of the burden of federal taxes borne
by Minnesota residents.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 11.

Minnesota Statutes 2014, section 270C.9901, is amended to read:

270C.9901 ASSESSOR ACCREDITATION.

new text begin (a) new text end Every individual who appraises or physically inspects deleted text begin real deleted text end new text begin income-producing
new text end property new text begin as defined in section 273.11, subdivision 13, new text end for the purpose of determining its
valuation or classification for property tax purposes must obtain licensure as an accredited
Minnesota assessor from the State Board of Assessors by July 1, 2019, or within four years
of that person having become licensed as a certified Minnesota assessor, whichever is later.

new text begin (b) A county, home rule charter or statutory city, or town may employ an individual
who has obtained a license as a certified Minnesota assessor to appraise or physically
inspect real property, not including income-producing property as defined in section
273.11, subdivision 13, for the purposes of determining its valuation or classification
for property tax purposes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 12.

Minnesota Statutes 2014, section 273.061, subdivision 4, is amended to read:

Subd. 4.

Assistants.

new text begin (a) new text end With the approval of the board of county commissioners,
the county assessor may employ one or more assistants and sufficient clerical help to
perform the duties of the assessor's office.

new text begin (b) Subject to the requirements of section 270C.9901, or any other applicable
requirement, the qualifications and licensure of assistants to the assessor shall be
determined by the board of county commissioners in consultation with the assessor.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 13.

Minnesota Statutes 2014, section 289A.50, subdivision 1, is amended to read:

Subdivision 1.

General right to refund.

(a) Subject to the requirements of this
section and section 289A.40, a taxpayer who has paid a tax in excess of the taxes lawfully
due and who files a written claim for refund will be refunded or credited the overpayment
of the tax determined by the commissioner to be erroneously paid.

(b) The claim must specify the name of the taxpayer, the date when and the period
for which the tax was paid, the kind of tax paid, the amount of the tax that the taxpayer
claims was erroneously paid, the grounds on which a refund is claimed, and other
information relative to the payment and in the form required by the commissioner. An
income tax, estate tax, or corporate franchise tax return, or amended return claiming an
overpayment constitutes a claim for refund.

(c) When, in the course of an examination, and within the time for requesting a
refund, the commissioner determines that there has been an overpayment of tax, the
commissioner shall refund or credit the overpayment to the taxpayer and no demand
is necessary. If the overpayment exceeds $1, the amount of the overpayment must
be refunded to the taxpayer. If the amount of the overpayment is less than $1, the
commissioner is not required to refund. In these situations, the commissioner does not
have to make written findings or serve notice by mail to the taxpayer.

(d) If the amount allowable as a credit for withholding, estimated taxes, or dependent
care exceeds the tax against which the credit is allowable, the amount of the excess is
considered an overpayment. deleted text begin The refund allowed by section 290.06, subdivision 23, is also
considered an overpayment. deleted text end The requirements of section 270C.33 do not apply to the
refunding of such an overpayment shown on the original return filed by a taxpayer.

(e) If the entertainment tax withheld at the source exceeds by $1 or more the taxes,
penalties, and interest reported in the return of the entertainment entity or imposed by
section 290.9201, the excess must be refunded to the entertainment entity. If the excess is
less than $1, the commissioner need not refund that amount.

(f) If the surety deposit required for a construction contract exceeds the liability of
the out-of-state contractor, the commissioner shall refund the difference to the contractor.

(g) An action of the commissioner in refunding the amount of the overpayment does
not constitute a determination of the correctness of the return of the taxpayer.

(h) There is appropriated from the general fund to the commissioner of revenue the
amount necessary to pay refunds allowed under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for political contribution refund
claims based on contributions made on or after July 1, 2015.
new text end

Sec. 14.

Minnesota Statutes 2014, section 290.01, subdivision 6, is amended to read:

Subd. 6.

Taxpayer.

The term "taxpayer" means any person or corporation subject to
a tax imposed by this chapter. deleted text begin For purposes of section 290.06, subdivision 23, the term
"taxpayer" means an individual eligible to vote in Minnesota under section 201.014.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for political contribution refund
claims based on contributions made on or after July 1, 2015.
new text end

Sec. 15.

Minnesota Statutes 2014, section 298.24, subdivision 1, is amended to read:

Subdivision 1.

Imposed; calculation.

(a) For concentrate produced in 2013, there is
imposed upon taconite and iron sulphides, and upon the mining and quarrying thereof,
and upon the production of iron ore concentrate therefrom, and upon the concentrate so
produced, a tax of $2.56 per gross ton of merchantable iron ore concentrate produced
therefrom. The tax is also imposed upon other iron-bearing material.

(b) For concentrates produced in 2014 and subsequent years, the tax rate shall be
equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate
multiplied by the percentage increase in the implicit price deflator from the fourth quarter
of the second preceding year to the fourth quarter of the preceding year. "Implicit price
deflator" means the implicit price deflator for the gross domestic product prepared by the
Bureau of Economic Analysis of the United States Department of Commerce.

(c) An additional tax is imposed equal to three cents per gross ton of merchantable
iron ore concentrate for each one percent that the iron content of the product exceeds 72
percent, when dried at 212 degrees Fahrenheit.

(d) The tax on taconite and iron sulphides shall be imposed on the average of the
production for the current year and the previous two years. The rate of the tax imposed
will be the current year's tax rate. This clause shall not apply in the case of the closing
of a taconite facility if the property taxes on the facility would be higher if this clause
and section 298.25 were not applicable. The tax on other iron-bearing material shall be
imposed on the current year production.

(e) If the tax or any part of the tax imposed by this subdivision is held to be
unconstitutional, a tax of $2.56 per gross ton of merchantable iron ore concentrate
produced shall be imposed.

(f) Consistent with the intent of this subdivision to impose a tax based upon the
weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
determine the weight of merchantable iron ore concentrate included in fluxed pellets by
subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
flux additives included in the pellets from the weight of the pellets. For purposes of this
paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
No subtraction from the weight of the pellets shall be allowed for binders, mineral and
chemical additives other than basic flux additives, or moisture.

(g)(1) Notwithstanding any other provision of this subdivision, for the first two years
of a plant's commercial production of direct reduced ore from ore mined in this state, no
tax is imposed under this section. As used in this paragraph, "commercial production" is
production of more than 50,000 tons of direct reduced ore in the current year or in any prior
year, "noncommercial production" is production of 50,000 tons or less of direct reduced
ore in any year, and "direct reduced ore" is ore that results in a product that has an iron
content of at least deleted text begin 75 percent deleted text end new text begin 67 percent and silica plus alumina content of no greater than
three percent new text end . For the third year of a plant's commercial production of direct reduced ore,
the rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined
under this subdivision. For the fourth commercial production year, the rate is 50 percent of
the rate otherwise determined under this subdivision; for the fifth commercial production
year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for
all subsequent commercial production years, the full rate is imposed.

(2) Subject to clause (1), production of direct reduced ore in this state is subject to
the tax imposed by this section, but if that production is not produced by a producer of
taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron
sulfides, or other iron-bearing material, that is consumed in the production of direct
reduced iron in this state is not subject to the tax imposed by this section on taconite,
iron sulfides, or other iron-bearing material.

(3) Notwithstanding any other provision of this subdivision, no tax is imposed
on direct reduced ore under this section during the facility's noncommercial production
of direct reduced ore. deleted text begin The taconite or iron sulphides consumed in the noncommercial
deleted text end deleted text begin production of direct reduced ore is subject to the tax imposed by this section on taconite
deleted text end deleted text begin and iron sulphides. deleted text end Three-year average production of direct reduced ore does not
include production of direct reduced ore in any noncommercial year. Three-year average
production for a direct reduced ore facility that has noncommercial production is the
average of the commercial production of direct reduced ore for the current year and the
previous two commercial years.

deleted text begin (4) This paragraph applies only to plants for which all environmental permits have
been obtained and construction has begun before July 1, 2008.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes based on concentrate
produced in 2015 and thereafter.
new text end

Sec. 16.

Minnesota Statutes 2014, section 345.42, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Coordinate with Department of Revenue. new text end

new text begin The commissioner shall
coordinate with the commissioner of revenue to receive by January 15 of each year the
addresses of owners whose names and Social Security numbers indicate they are owners
of abandoned property. The commissioner shall annually mail notice to the owners. The
notice shall include a letter stating that the recipient may be the owner of abandoned
property, information concerning the process of filing a claim, and a claim form.
new text end

Sec. 17.

Minnesota Statutes 2014, section 477A.10, is amended to read:

477A.10 NATURAL RESOURCES LAND PAYMENTS IN LIEU; PURPOSE.

The purposes of sections 477A.11 to 477A.14 are:

(1) to compensate local units of government for the loss of tax base from state
ownership of land new text begin , except land acquired in whole or in part with money appropriated on
or after July 1, 2016, from the outdoor heritage fund or the environment and natural
resources trust fund, new text end and the need to provide services for state land;

(2) to address the disproportionate impact of state land ownership on local units of
government with a large proportion of state land; and

(3) to address the need to manage state lands held in trust for the local taxing districts.

Sec. 18.

Minnesota Statutes 2014, section 477A.11, is amended by adding a
subdivision to read:

new text begin Subd. 9. new text end

new text begin Environment and natural resources trust fund lands. new text end

new text begin Notwithstanding
any other provision of law to the contrary, natural resource land acquired in whole or in
part with money appropriated from the environment and natural resources trust fund after
July 1, 2016, is not included in the definitions of the lands described in subdivisions 3 to
7 and is excluded from payments under sections 477A.11 to 477A.14. For purposes of
this subdivision, "acquired in part" means that at least 20 percent of the state payment
for the acquisition of the parcel was from money from the environment and natural
resources trust fund.
new text end

Sec. 19.

Minnesota Statutes 2014, section 477A.11, is amended by adding a
subdivision to read:

new text begin Subd. 10. new text end

new text begin Outdoor heritage lands. new text end

new text begin Notwithstanding any other provision of law to
the contrary, natural resource land acquired in whole or in part with money appropriated
from the outdoor heritage fund on or after July 1, 2016, is not included in the definitions of
the lands described in subdivisions 3 to 7 and is excluded from payments under sections
477A.11 to 477A.14. For purposes of this subdivision, "acquired in part" means that at
least 20 percent of the state payment for the acquisition of the parcel was from money
from the outdoor heritage fund.
new text end

Sec. 20.

new text begin [477A.30] ANNUAL COUNTY JOINT TRUST FUND WITHDRAWALS
AND DISTRIBUTION FOR ENVIRONMENT AND NATURAL TRUST FUND
LANDS AND OUTDOOR HERITAGE LANDS.
new text end

new text begin Subdivision 1. new text end

new text begin Commissioner of revenue; withdrawals and payments. new text end

new text begin No later
than October 15 of each year, the commissioner of revenue shall make a withdrawal on
behalf of all eligible counties from the county joint trust fund account established under
section 11A.237 equal to the lesser of (1) the total amount of necessary withdrawals
certified by the counties under subdivision 2 for the year, or (2) 5-1/2 percent of the
amount in that account as of September 1 of that year as determined by the executive
director of the State Board of Investment. The commissioner shall distribute the certified
withdrawal amounts to each county by October 31. If the amount of the withdrawal is
less than the total certified withdrawal amounts under subdivision 2, the commissioner
shall reduce the distribution to each county proportionately.
new text end

new text begin Subd. 2. new text end

new text begin Certification of needed withdrawal, distribution of funds. new text end

new text begin (a) Beginning
in calendar year 2016, by September 1 of each year, a county for whom a trust fund
payment has been made on its behalf under sections 97A.056, subdivision 1b, or 116P.045,
subdivision 2, shall calculate and certify to the commissioner of revenue the amount of
trust fund withdrawals needed under this section. The amount of the withdrawal for each
parcel of land for which a county received a trust fund payment under either provision
is as follows:
new text end

new text begin (1) for the year in which a trust fund payment is made to a county for a parcel of
land, the withdrawal for that parcel is equal to:
new text end

new text begin (i) the remaining taxes owed to the local governments for taxes spread that year for a
parcel acquired between January 1 and June 30; or
new text end

new text begin (ii) the amount of taxes paid on the parcel in the previous year if the parcel was
acquired before January 1 of the current year. The county must distribute the amount by
December 15 to all local governments based on the location of the parcel and the local
governments' share of the total tax; and
new text end

new text begin (2) For all subsequent years, the withdrawal for a parcel is equal to the taxes that
would be owed based on the appraised value of the land and the taxes assessed on
comparable, privately owned adjacent land. For purposes of this subdivision, "appraised
value" is determined in the manner described in section 477A.12, subdivision 3. The county
treasurer must allocate the withdrawn funds among the county, the school district, the town
or home rule charter or statutory city, and special districts on the same basis as if the funds
were taxes on the land received in that year. The county treasurer must pay the allocation
to all eligible local governments by December 15 of the year in which the withdrawal is
made. The county's share of the payment must be deposited in the county general fund.
new text end

new text begin (b) If the distribution to a county under subdivision 1 is less than its total withdrawal
amounts certified under this subdivision, all distributions under paragraph (a) are reduced
proportionately.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2016, and applies to land
acquired with funds appropriated on or after July 1, 2015.
new text end

Sec. 21.

Minnesota Statutes 2014, section 609.5316, subdivision 3, is amended to read:

Subd. 3.

Weapons, telephone cloning paraphernalia, new text begin automated sales
suppression devices, new text end and bullet-resistant vests.

Weapons used are contraband and
must be summarily forfeited to the appropriate agency upon conviction of the weapon's
owner or possessor for a controlled substance crime; for any offense of this chapter
or chapter 624, or for a violation of an order for protection under section 518B.01,
subdivision 14. Bullet-resistant vests, as defined in section 609.486, worn or possessed
during the commission or attempted commission of a crime are contraband and must be
summarily forfeited to the appropriate agency upon conviction of the owner or possessor
for a controlled substance crime or for any offense of this chapter. Telephone cloning
paraphernalia used in a violation of section 609.894 new text begin , and automated sales suppression
devices, phantom-ware, and other devices containing an automated sales suppression or
phantom-ware device or software used in violation of section 609.858, new text end are contraband and
must be summarily forfeited to the appropriate agency upon a conviction.

Sec. 22.

new text begin [609.858] USE OF AUTOMATED SALES SUPPRESSION DEVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms
have the meanings given.
new text end

new text begin (b) "Automated sales suppression device" or "zapper" means a software program,
carried on any tangible medium, or accessed through any other means, that falsifies the
electronic records of electronic cash registers and other point-of-sale systems including,
but not limited to, transaction data and transaction reports.
new text end

new text begin (c) "Electronic cash register" means a device that keeps a register or supporting
documents through the means of an electronic device or computer system designed to
record transaction data for the purpose of computing, compiling, or processing retail
sales transaction data in whatever manner.
new text end

new text begin (d) "Phantom-ware" means hidden preinstalled, or later-installed programming
option embedded in the operating system of an electronic cash register or hardwired
into the electronic cash register that can be used to create a virtual second electronic
cash register or may eliminate or manipulate transaction records that may or may not be
preserved in digital formats to represent the true or manipulated record of transactions in
the electronic cash register.
new text end

new text begin (e) "Transaction data" includes items purchased by a customer, the price of each
item, the taxability determination for each item, a segregated tax amount for each of
the taxed items, the date and time of the purchase, the name, address and identification
number of the vendor, and the receipt or invoice number of the transaction.
new text end

new text begin (f) "Transaction report" means a report documenting, but not limited to, the sales,
taxes collected, media totals, and discount voids at an electronic cash register that is
printed on cash register tape at the end of a day or shift, or a report documenting every
action at an electronic cash register that is stored electronically.
new text end

new text begin Subd. 2. new text end

new text begin Felony. new text end

new text begin A person who sells, purchases, installs, transfers, possesses,
accesses, or uses an automated sales suppression device, zapper, phantom-ware, or similar
device knowing that the device or phantom-ware is capable of being used to commit tax
fraud or suppress sales is guilty of a felony and may be sentenced to imprisonment of not
more than five years or a payment of a fine of not more than $10,000, or both.
new text end

new text begin Subd. 3. new text end

new text begin Forfeiture. new text end

new text begin An automated sales suppression device, zapper, phantom-ware,
and any other device containing an automated sales suppression, zapper, or phantom-ware
device or software is contraband and subject to forfeiture under section 609.5316.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2015, and applies to crimes
committed on or after that date.
new text end

Sec. 23. new text begin BUDGET RESERVE INCREASE.
new text end

new text begin On July 1, 2015, the commissioner of management and budget shall transfer
$150,000,000 from the general fund to the budget reserve account in the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 24. new text begin NOTIFICATION OF POLITICAL CONTRIBUTION REFUND
REPEAL.
new text end

new text begin (a) The commissioner of revenue must take the following actions as soon as
practicable:
new text end

new text begin (1) annotate the link to 2015 Form PCR indicating that political contribution refunds
may only be claimed for contributions made before April 15, 2015, and that claims must
be filed by June 15, 2015; and
new text end

new text begin (2) send notifications to all appropriate electronic mailing lists that the commissioner
maintains announcing the repeal of the political contribution refund, including the
requirement that claims for refund of contributions made before April 15, 2015, must be
filed before June 15, 2015.
new text end

new text begin (b) The executive director of the campaign finance and public disclosure board must
take the following actions as soon as practicable:
new text end

new text begin (1) notify all registered political parties and all candidates who have registered
a principal campaign committee with the board and have filed a valid public subsidy
agreement that the political contribution refund has been repealed, that refunds may only
be claimed for contributions made before April 15, 2015, and that claims must be filed
by June 15, 2015;
new text end

new text begin (2) update its Web site to indicate that the political contribution refund program has
been repealed, and to indicate that political contribution refunds may only be claimed
for contributions made before April 15, 2015, and that claims must be filed by June 15,
2015; and
new text end

new text begin (3) stop issuing Form EP-3, the official receipt form for political contribution
refunds, to registered political parties and candidates.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 25. new text begin REPORT ON TAX CREDIT FOR EMPLOYERS WHO HIRE
VETERANS.
new text end

new text begin The commissioner of revenue, in consultation with the commissioner of veterans
affairs, must report to the legislature on allowing a corporate and individual income tax
credit for employers who hire military veterans. The report must be completed on or
before February 1, 2016, and provided to the chairs and ranking minority members
of the legislative committees with jurisdiction over taxes, and veterans affairs, in
compliance with Minnesota Statutes, sections 3.195 and 3.197. The purpose of the
report is to determine the credit structure most likely to result in increased employment
of unemployed military veterans in Minnesota, including unemployed military veterans
who are disabled. The report must include:
new text end

new text begin (1) data on the number of military veterans in Minnesota, including the number who
are disabled, and the share of disabled and nondisabled veterans who are employed;
new text end

new text begin (2) to the extent information is available from the United States Department of the
Treasury, data on usage in Minnesota of the federal work opportunity credit under section
51 of the Internal Revenue Code as it relates to the hiring of veterans and the effect of the
federal credit on employment of veterans in Minnesota;
new text end

new text begin (3) descriptions of and data related to the effectiveness of income tax credits allowed
in other states that are intended to encourage the hiring of military veterans;
new text end

new text begin (4) analysis of different possible credit structures, including but not limited to the
credit structure proposed in 2015 Minnesota House File No. 10; and
new text end

new text begin (5) draft legislation for an income tax credit for employers who hire military
veterans, to be effective for tax year 2016.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 26. new text begin PURPOSE STATEMENTS; TAX EXPENDITURES.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin This section is intended to fulfill the requirement under
Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax
expenditure provide a statement of the purpose for the tax expenditure and a standard or
goal against which its effectiveness may be measured.
new text end

new text begin Subd. 2. new text end

new text begin Small business investment credit. new text end

new text begin The provisions of article 1, section
3, are intended to support qualified small businesses in Minnesota through investments
qualifying for the credit, and to encourage job creation. The standard against which
effectiveness is to be measured is the number of businesses qualifying for investments, and
the number of jobs created in businesses that receive investments that qualify for the credit.
new text end

new text begin Subd. 3. new text end

new text begin Technology corporate tax benefit refund program. new text end

new text begin The provisions
of article 1, sections 5, 13, and 15, are intended to assist emerging biotechnology and
technology businesses in Minnesota to expand their operations in Minnesota. The standard
against which effectiveness is to be measured includes the increase in the number of
employees, amount of facilities used by, and sales made by companies that surrendered
their NOLs in return for tax refunds, compared to the increases by similar companies in
the comparable period before the availability of the refund.
new text end

new text begin Subd. 4. new text end

new text begin Federal update. new text end

new text begin The provisions of article 1, sections 6, 9, 14, and 36,
conforming Minnesota individual income, corporate franchise, and estate taxes to changes
in federal law, are intended to simplify compliance with and administration of those taxes.
The standard against which effectiveness is to be measured is the reduction in the number
of income tax forms and text in the instructions for taxpayers resulting from this provision.
new text end

new text begin Subd. 5. new text end

new text begin Income tax subtraction and credit for education expenses; inflation,
prekindergarten expenses, and nonpublic school tuition. new text end

new text begin The provisions of article 1,
section 11, clause (3), and sections 21, 22, and 23 are intended to restore availability of the
subtraction and credit to parents at income levels and amounts of expenses comparable
to those in effect when the dollar amounts were last increased, to acknowledge the
importance of early childhood education by extending to it the same tax preferences as
are allowed for K-12 education, and to increase opportunities for parents to choose K-12
educational programs most appropriate for their children by extending the K-12 education
credit to nonpublic school tuition. The standards against which effectiveness is to be
measured is through comparison of the number of claims and amount of claims for the
subtraction and credit for tax year 2015 relative to the year the credit was enacted and the
subtraction last increased, after adjusting for growth in the state's population, through the
change in the number of children enrolled in prekindergarten educational programs, and
through the change in the number of children enrolled in nonpublic schools.
new text end

new text begin Subd. 6. new text end

new text begin Income tax subtraction for charity care services. new text end

new text begin The provisions of article
1, section 7, and section 11, clause (23), are intended to encourage medical professionals
to provide charity care to uninsured and underinsured individuals. The standard
against which effectiveness is to be measured is the increase in the number of medical
professionals providing charity and the amount of charity care provided, compared with
the similar increases that occurred during the period before the subtraction was available.
new text end

new text begin Subd. 7. new text end

new text begin Income and corporate tax subtraction for fitness facility memberships.
new text end

new text begin The provisions of article 1, sections 11, clause (22), and 12, clause (18), are intended to
increase employees' access to and use of fitness facilities. The standard against which
effectiveness is to be measured is the change in the share of employees who have access to
employer-provided fitness facility membership benefits, and the share of employees who
use those benefits, as reported in surveys by human resource management associations.
new text end

new text begin Subd. 8. new text end

new text begin Income tax subtraction of military retirement pay. new text end

new text begin The provisions of
article 1, section 11, clause (24), are intended to attract to Minnesota military retirees and
to retain those already present, by allowing a subtraction from income tied to the number
of years of military service provided. The standard against which effectiveness is to be
measured is the change over time in the number of military retirees in Minnesota.
new text end

new text begin Subd. 9. new text end

new text begin Income tax subtraction of social security benefits. new text end

new text begin The provisions of
article 1, section 11, clause (25), are intended to attract to Minnesota recipients of Social
Security benefits and to retain those already present, by providing a phased-in subtraction
of social security benefits. The standard against which effectiveness is to be measured
is the change over time in the number of Social Security recipients in Minnesota, after
adjusting for demographic changes.
new text end

new text begin Subd. 10. new text end

new text begin Income tax subtraction and credit for section 529 plan contributions.
new text end

new text begin The provisions of article 1, sections 11, clause (26), and 31, are intended to increase
saving for higher education expenses. The standard against which effectiveness is to be
measured is the change over time in the estimated number of Minnesota residents making
contributions to the Minnesota College Savings Plan, and in the amount contributed, as
tracked by the Minnesota Office of Higher Education.
new text end

new text begin Subd. 11. new text end

new text begin Income tax subtraction for contributions to long-term care savings
plans and increase in long-term care credit. new text end

new text begin The provisions of article 1, sections 1,
11, clause (27), and 20, are intended to increase individual financing of long-term care
costs through direct payment or purchase of insurance. The standard against .which
effectiveness is to be measured is the change over time in the number of individuals
participating in the long-term care savings plan and the number claiming the credit for
long-term care insurance premiums.
new text end

new text begin Subd. 12. new text end

new text begin Income tax subtraction for meal expenses of first responders. new text end

new text begin The
provisions of article 1, section 11, clause (28), are intended to offset out-of-pocket expenses
of first responders related to being on-call for service and encourage individuals to continue
to work and volunteer as first responders. The standard against which effectiveness is to
be measured is the amount of meal expenses claimed as subtractions for first responders.
new text end

new text begin Subd. 13. new text end

new text begin Income tax credit for MNsure premium payments. new text end

new text begin The provisions of
article 1, sections 2 and 16, are intended to transition individuals enrolled in MinnesotaCare
to MNsure. The standard against which effectiveness is to be measured is the number of
MinnesotaCare enrollees who claim credits and purchase insurance through MNsure.
new text end

new text begin Subd. 14. new text end

new text begin Increase in dependent care credit and expansion of income eligibility.
new text end

new text begin The provisions of article 1, sections 17, 18, and 39, are intended to simplify the dependent
care credit by tying it more closely to the federal credit, and to recognize an increased
burden in dependent care expenses as a cost of workforce participation for parents. The
standard against which effectiveness is to be measured is the change in the error rate on
claims for dependent care credits and the change in the average credit amount claimed by
parents in the income range eligible for the credit under present law.
new text end

new text begin Subd. 15. new text end

new text begin Research credit increase, refundability, and extension to sole
proprietors. new text end

new text begin The provisions of article 1, sections 25, 26, 27, and 28, are intended to
provide equitable tax treatment for Minnesota businesses operated as sole proprietorships
by allowing sole proprietors to claim the research credit on the same basis as it is allowed
for businesses operated as C corporations or pass-through entities, to increase access to
the credit by making it refundable, and to encourage more research activities in Minnesota
by increasing the credit rate. The standard against which effectiveness is to be measured
is the number of sole proprietors claiming the credit, the number and amount of claims
for refund, and the change over time in the amount of Minnesota research expenditures
qualifying for the credit.
new text end

new text begin Subd. 16. new text end

new text begin Income tax credit for teachers who earn master's degrees. new text end

new text begin The
provisions of article 1, section 29, are intended to improve the quality of teaching in
Minnesota K-12 schools by encouraging teachers to obtain master's degrees in the subject
areas they teach. The standard against which effectiveness is to be measured is the change
over time in the number of K-12 classroom teachers with master's degrees in the subject
area that they teach.
new text end

new text begin Subd. 17. new text end

new text begin Income tax credit for student loan principal and interest payments.
new text end

new text begin The provisions of article 1, section 30, are intended to reduce the debt burden of recent
graduates of higher education programs and to reduce and potentially reverse the
current net demographic loss of young adults in Minnesota. The standard against which
effectiveness is to be measured is the change over time in the number of young adults
choosing to move to or remain in Minnesota, as measured by the state demographer.
new text end

new text begin Subd. 18. new text end

new text begin Credit for job training center rehabilitation. new text end

new text begin The provisions of article
1, section 38, are intended to encourage the viability of a rehabilitated historic structure in
Minnesota currently serving as a job training center and to increase access to job training
services. The standard against which the effectiveness of the credit is to be measured is
whether the rehabilitated structure remains in service as a job training center.
new text end

new text begin Subd. 19. new text end

new text begin Fuel use in other vehicles. new text end

new text begin The provisions of article 6, sections 2 and 17,
are intended to exclude fuels used for nonhighway purposes from supporting roads and
to reduce tax pyramiding on business inputs. The standard against which effectiveness
is to be measured is the increase in the number of fuel tax refunds for nonhighway use
after June 30, 2015.
new text end

new text begin Subd. 20. new text end

new text begin Sales tax exemption for digital goods. new text end

new text begin The provisions of article 6,
section 3, are intended to reduce the unfair advantage of sellers of digital goods located
outside the state compared to sellers with a presence in the state. The standard against
which effectiveness is to be measured is in the number of sellers of digital products located
within the state and the increase in their total sales after the exemption takes effect.
new text end

new text begin Subd. 21. new text end

new text begin Sales tax reduction for modular housing. new text end

new text begin The provisions of article 6,
sections 4 and 6, are intended to provide equitable tax treatment for various types of
housing. The standard against which effectiveness is to be measured is the increase in the
number of modular homes sold in the state after June 30, 2015.
new text end

new text begin Subd. 22. new text end

new text begin Sales tax exemption for medical accessories and supplies. new text end

new text begin The
provisions of article 6, section 12, are intended to remove an uncollectable tax on
purchases paid by medical insurance. The standard against which effectiveness is to be
measured is whether this finally puts the dispute over the taxability of these sales to rest.
new text end

new text begin Subd. 23. new text end

new text begin Sales tax exemption for instructional materials. new text end

new text begin The provisions of
article 6, section 13, are intended to provide equitable tax treatment and reduce costs
for educational inputs used in vocational as well as academic postsecondary education.
The standard against which effectiveness is to be measured is the number of students in
vocational postsecondary education and the change in average amount of student debt
for students in these programs.
new text end

new text begin Subd. 24. new text end

new text begin Propane tanks. new text end

new text begin The provisions of article 6, section 14, are intended to
encourage private ownership of propane tanks to encourage competition. The standard
against which effectiveness is to be measured is the decrease in the number of rented
tanks, as determined by a survey of propane suppliers.
new text end

new text begin Subd. 25. new text end

new text begin Sales tax exemption for metal bullion. new text end

new text begin The provisions of article
6, section 15, are intended to provide equitable tax treatment for different types of
investments. The standard against which effectiveness is to be measured is the increase in
precious metal bullion sold in the state and in number of coin and precious metal trade
shows held in the state.
new text end

new text begin Subd. 26. new text end

new text begin Expansion of the sales tax reduction for nonprofits. new text end

new text begin The provisions
of article 6, section 18, are intended to provide equitable tax treatment and reduce
administrative burdens for nonprofits. The standard against which effectiveness is to be
measured is a decrease in the number of audits of nonprofits resulting in tax judgments
and penalties.
new text end

new text begin Subd. 27. new text end

new text begin Sales tax expansion for admissions to a nonprofit farm education
organization. new text end

new text begin The provisions of article 6, section 19, are intended to increase the ability
of the nonprofit to provide opportunities for educating the public on the history of farming.
The standard against which effectiveness is to be measured is an increase in the percent of
the organizations budget being used for direct spending for its mission.
new text end

new text begin Subd. 28. new text end

new text begin Sales tax exemptions for animal shelters. new text end

new text begin The provisions of article 6,
section 21, are intended to help to provide adequate funding for animal shelters. The
standard against which effectiveness is to be measured is the number of animals served by
shelters in the state
new text end

new text begin Subd. 29. new text end

new text begin Sales tax exemption for city celebrations. new text end

new text begin The provisions of article 6,
section 22, are intended to help promote community spirit and to ease compliance burdens
on organizations sponsoring city celebrations. The standard against which effectiveness is
to be measured is the increase in contributions to benefiting organizations and a reduction
in the number of audits of nonprofit organizations.
new text end

new text begin Subd. 30. new text end

new text begin Sales tax exemption for admissions to BMX tracks. new text end

new text begin The provisions of
article 6, section 23, are intended to encourage participation in the sport of BMX racing.
The standard against which effectiveness is to be measured is the increase in the number
of admissions sold by sanctioned BMX tracks in the state.
new text end

new text begin Subd. 31. new text end

new text begin Sales tax exemption for contractor purchases for certain entities. new text end

new text begin The
provisions of article 6, section 25, are intended to reduce construction and administrative
costs for exempt nonprofit entities and local governments on their capital projects. The
standard against which effectiveness is to be measured is the number and dollar amount
of refunds under the provision.
new text end

new text begin Subd. 32. new text end

new text begin Sales tax exemption for a wastewater treatment facility; city of Mora.
new text end

new text begin The provisions of article 6, section 44, are intended to reduce the costs of providing sewer
services in the city of Mora. The standard against which effectiveness is to be measured
is the costs saved due to the refund under this provision.
new text end

new text begin Subd. 33. new text end

new text begin Income tax credit for school building bond levies. new text end

new text begin The provisions of
article 9, section 7, are intended to reduce the effect of school bond referenda on owners
of agricultural property. The standard against which the effectiveness of the credit is to be
measured is the amount of property tax reductions provided to owners of agricultural land.
new text end

new text begin Subd. 34. new text end

new text begin New markets tax credit. new text end

new text begin The new markets tax credit provided in
article 5, sections 3 to 11, is intended to increase investment in low-income Minnesota
communities by businesses that provide high-quality jobs, such as those in manufacturing,
technology, and similar fields. The standard against which the effectiveness of the credit
is to be measured is the incremental amount of investment in low-income communities
that is stimulated by the credit and the associated employment positions that are created,
especially for residents of those communities.
new text end

new text begin Subd. 35. new text end

new text begin Tax rate for pull-tabs sold at bingo halls. new text end

new text begin The provisions of article
7, section 3, paragraph (b), taxing pull-tabs sold by bingo halls at a flat rate of nine
percent, are intended to increase the viability of bingo halls in Minnesota so that they
continue making charitable expenditures. The standard against which effectiveness is to
be measured is the number of bingo halls in Minnesota before and after enactment or the
gross receipts of the bingo halls before and after enactment.
new text end

new text begin Subd. 36. new text end

new text begin Tax incentive for direct reduced ore. new text end

new text begin The provisions of article 10,
section 15, reinstating a tax incentive for producers of direct reduced ore, are intended
to encourage the production of direct reduced ore and the establishment of more
direct reduced ore production facilities in Minnesota. The standard against which this
effectiveness is to be measured is the amount of direct reduced ore produced and the
number of producers of direct reduced ore before and after enactment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 27. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, sections 10A.322, subdivision 4; 13.4967, subdivision 2;
and 290.06, subdivision 23, new text end new text begin and new text end new text begin Minnesota Rules, part 4503.1400, subpart 4, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for contributions made after April
15, 2015, and refund claims filed after June 15, 2015.
new text end