HF 885

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:42am

A bill for an act
relating to taxation; making policy, technical, administrative, and clarifying
changes to income, corporate franchise, estate, sales, use, minerals, mortgage,
property, gross receipts, gambling, cigarette, tobacco, liquor, insurance, and
various taxes and tax-related provisions; modifying local government aid and
tax data provision; appropriating money; amending Minnesota Statutes 2008,
sections 126C.21, subdivision 4; 126C.48, subdivision 8; 270B.14, subdivision
16; 270C.12, by adding a subdivision; 270C.446, subdivisions 2, 5; 270C.56,
subdivision 1; 273.11, subdivision 23; 273.111, subdivision 4; 273.1115,
subdivision 2; 273.113, subdivisions 1, 2; 273.1231, subdivision 8; 273.124,
subdivision 21; 273.13, subdivisions 23, 25, 33; 273.33, subdivision 2; 273.37,
subdivision 2; 274.13, subdivision 2; 274.135, subdivision 3; 274.14; 274.175;
275.70, subdivision 5; 275.71, subdivision 4; 287.04; 287.05, by adding a
subdivision; 287.22; 287.25; 289A.08, subdivision 3; 289A.12, by adding
a subdivision; 289A.18, subdivision 1; 289A.19, subdivision 4; 289A.38,
subdivision 7; 289A.41; 290.0671, subdivision 1; 290A.10; 290A.14; 290C.06;
290C.07; 295.56; 295.57, subdivision 5; 296A.21, subdivision 1; 297A.70,
subdivisions 2, 4; 297A.992, subdivision 2; 297A.993, subdivision 1; 297E.02,
subdivision 4; 297E.06, by adding a subdivision; 297E.11, subdivision 1;
297F.09, subdivision 7; 297G.09, subdivision 6; 297I.30, by adding a subdivision;
297I.35, subdivision 2; 298.28, subdivisions 4, 11; 423A.02, subdivisions 1b,
3, by adding a subdivision; 473.843, subdivision 3; 477A.011, subdivisions
34, 42; 477A.013, subdivision 8; repealing Minnesota Statutes 2008, sections
287.26; 287.27, subdivision 1; 297A.67, subdivision 24; 298.28, subdivisions
11a, 13; Minnesota Rules, parts 8115.0200; 8115.0300; 8115.0400; 8115.0500;
8115.0600; 8115.1000; 8115.1100; 8115.1200; 8115.1300; 8115.1400;
8115.1500; 8115.1600; 8115.1700; 8115.1800; 8115.1900; 8115.2000;
8115.2100; 8115.2200; 8115.2300; 8115.2400; 8115.2500; 8115.2600;
8115.2700; 8115.2800; 8115.2900; 8115.3000; 8115.4000; 8115.4100;
8115.4200; 8115.4300; 8115.4400; 8115.4500; 8115.4600; 8115.4700;
8115.4800; 8115.4900; 8115.5000; 8115.5100; 8115.5200; 8115.5300;
8115.5400; 8115.5500; 8115.5600; 8115.5700; 8115.5800; 8115.5900;
8115.6000; 8115.6100; 8115.6200; 8115.6300; 8115.6400; 8115.9900.

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

ARTICLE 1

INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

Section 1.

Minnesota Statutes 2008, section 289A.08, subdivision 3, is amended to
read:

Subd. 3.

Corporations.

new text begin (a) new text end A corporation that is subject to the state's jurisdiction to
tax under section 290.014, subdivision 5, must file a return, except that a foreign operating
corporation as defined in section 290.01, subdivision 6b, is not required to file a return.

new text begin (b) Members of a unitary business that are required to file a combined report on one
return must designate a member of the unitary business to be responsible for tax matters,
including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
taxes lawfully due. The designated member must be a member of the unitary business that
is filing the single combined report and either:
new text end

new text begin (1) a corporation that is subject to the taxes imposed by chapter 290; or
new text end

new text begin (2) a corporation that is not subject to the taxes imposed by chapter 290:
new text end

new text begin (i) Such corporation consents by filing the return as a designated member under this
clause to remit taxes, penalties, interest, or additions to tax due from the members of the
unitary business subject to tax, and receive refunds or other payments on behalf of other
members of the unitary business. The member designated under this clause is a "taxpayer"
for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
on the unitary business under this chapter and chapter 290.
new text end

new text begin (ii) If the state does not otherwise have the jurisdiction to tax the member designated
under this clause, consenting to be the designated member does not create the jurisdiction
to impose tax on the designated member, other than as described in item (i).
new text end

new text begin (iii) The member designated under this clause must apply for a business tax account
identification number.
new text end

new text begin (c) new text end The commissioner shall adopt rules for the filing of one return on behalf of the
members of an affiliated group of corporations that are required to file a combined report.
All members of an affiliated group that are required to file a combined report must file one
return on behalf of the members of the group under rules adopted by the commissioner.

new text begin (d) new text end If a corporation claims on a return that it has paid tax in excess of the amount of
taxes lawfully due, that corporation must include on that return information necessary for
payment of the tax in excess of the amount lawfully due by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

Sec. 2.

Minnesota Statutes 2008, section 289A.12, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Qualified intermediaries. new text end

new text begin The commissioner may by notice and demand
require a qualified intermediary to file a return relating to transactions for which the
intermediary acted to facilitate exchanges under section 1031 of the Internal Revenue
Code. The return must include the name, address, and state or federal tax identification
number or Social Security number of each of the parties to the exchange, information
relating to the property subject to the exchange, and any other information required by
the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, and applies to all
transactions whether facilitated on, before, or after that date.
new text end

Sec. 3.

Minnesota Statutes 2008, section 289A.18, subdivision 1, is amended to read:

Subdivision 1.

Individual income, fiduciary income, corporate franchise, and
entertainment taxes; partnership and S corporation returns; information returns;
mining company returns.

The returns required to be made under sections 289A.08 and
289A.12 must be filed at the following times:

(1) returns made on the basis of the calendar year must be filed on April 15 following
the close of the calendar year, except that returns of corporations must be filed on March
15 following the close of the calendar year;

(2) returns made on the basis of the fiscal year must be filed on the 15th day of the
fourth month following the close of the fiscal year, except that returns of corporations
must be filed on the 15th day of the third month following the close of the fiscal year;

(3) returns for a fractional part of a year must be filed on the 15th day of the fourth
month following the end of the month in which falls the last day of the period for which
the return is made, except that the returns of corporations must be filed on the 15th day of
the third month following the end of the tax year; or, in the case of a corporation which is
a member of a unitary group, the return of the corporation must be filed on the 15th day of
the third month following the end of the tax year of the unitary group in which falls the
last day of the period for which the return is made;

(4) in the case of a final return of a decedent for a fractional part of a year, the return
must be filed on the 15th day of the fourth month following the close of the 12-month
period that began with the first day of that fractional part of a year;

(5) in the case of the return of a cooperative association, returns must be filed on or
before the 15th day of the ninth month following the close of the taxable year;

(6) if a corporation has been divested from a unitary group and files a return for
a fractional part of a year in which it was a member of a unitary business that files a
combined report under section 290.17, subdivision 4, the divested corporation's return
must be filed on the 15th day of the third month following the close of the common
accounting period that includes the fractional year;

(7) returns of entertainment entities must be filed on April 15 following the close of
the calendar year;

(8) returns required to be filed under section 289A.08, subdivision 4, must be filed
on the 15th day of the fifth month following the close of the taxable year;

(9) returns of mining companies must be filed on May 1 following the close of the
calendar year; and

(10) returns required to be filed with the commissioner under section 289A.12,
subdivision 2 deleted text begin or deleted text end new text begin , new text end 4 to 10, new text begin or 16 new text end must be filed within 30 days after being demanded by
the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 4.

Minnesota Statutes 2008, section 289A.19, subdivision 4, is amended to read:

Subd. 4.

Estate tax returns.

deleted text begin When an extension to file the federal estate tax return
has been granted under section 6081 of the Internal Revenue Code, the time for filing
the estate tax return is extended for that period. If the estate requests an extension to
file an estate tax return within the time provided in section 289A.18, subdivision 3, the
commissioner shall extend the time for filing the estate tax return for six months. deleted text end new text begin The time
for filing an estate tax return shall be extended for either six months or the amount of
time granted under section 6081 of the Internal Revenue Code to file the federal estate
tax return, whichever is longer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after
December 31, 2008.
new text end

Sec. 5.

Minnesota Statutes 2008, section 289A.38, subdivision 7, is amended to read:

Subd. 7.

Federal tax changes.

If the amount of income, items of tax preference,
deductions, or credits for any year of a taxpayer new text begin , or the wages paid by a taxpayer for
any period, new text end as reported to the Internal Revenue Service is changed or corrected by the
commissioner of Internal Revenue or other officer of the United States or other competent
authority, or where a renegotiation of a contract or subcontract with the United States
results in a change in income, items of tax preference, deductions, credits, or withholding
tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the
taxpayer shall report the change or correction or renegotiation results in writing to the
commissioner. The report must be submitted within 180 days after the final determination
and must be in the form of either an amended Minnesota estate, withholding tax, corporate
franchise tax, or income tax return conceding the accuracy of the federal determination
or a letter detailing how the federal determination is incorrect or does not change the
Minnesota tax. An amended Minnesota income tax return must be accompanied by an
amended property tax refund return, if necessary. A taxpayer filing an amended federal
tax return must also file a copy of the amended return with the commissioner of revenue
within 180 days after filing the amended return.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 290.0671, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

(a) An individual 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 1.9125 percent of
the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
case is the credit less than zero.

(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
whichever is greater, in excess of $15,080, but in no case is the credit less than zero.

(d) For individuals with two or more qualifying children, the credit equals ten
percent of the first $9,720 of earned income and 20 percent of earned income over
$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income
or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is
the credit less than zero.

(e) For a nonresident or 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 (10) or (16), 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 (11) and (12),
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."

deleted text begin (g) For tax years beginning after December 31, 2001, and before December 31,
2004, 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 each increased by
$1,000 for married taxpayers filing joint returns.
deleted text end

deleted text begin (h) For tax years beginning after December 31, 2004, and before December 31,
2007, 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 each increased by
$2,000 for married taxpayers filing joint returns.
deleted text end

deleted text begin (i) deleted text end new text begin (g) new text end For tax years beginning after December 31, 2007, and before December
31, 2010, 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 each increased by
$3,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2008, the new text begin commissioner shall annually adjust the new text end $3,000 deleted text begin is adjusted annually for
inflation under subdivision 7. deleted text end new text begin 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.
new text end

deleted text begin (j) deleted text end new text begin (h) new text end 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, 2008.
new text end

Sec. 7.

Minnesota Statutes 2008, section 290A.10, is amended to read:

290A.10 PROOF OF TAXES PAID.

Every claimant who files a claim for relief for property taxes payable shall include
with the claim a property tax statement or a reproduction thereof in a form deemed
satisfactory by the commissioner of revenue indicating that there are no delinquent
property taxes on the homestead. Indication on the property tax statement from the county
treasurer that there are no delinquent taxes on the homestead shall be sufficient proof.
Taxes included in a confession of judgment under section new text begin 277.23 or new text end 279.37 shall not
constitute delinquent taxes as long as the claimant is current on the payments required to
be made under section new text begin 277.23 or new text end 279.37.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 290A.14, is amended to read:

290A.14 PROPERTY TAX STATEMENT.

The county treasurer shall prepare and send a sufficient number of copies of the
property tax statement to the owner, and to the owner's escrow agent if the taxes are
paid via an escrow account, to enable the owner to comply with the filing requirements
of this chapter and to retain one copy as a record. The property tax statement, in a form
prescribed by the commissioner, shall indicate the manner in which the claimant may
claim relief from the state under both this chapter and chapter 290B, and the amount of the
tax for which the applicant may claim relief. The statement shall also indicate if there
are delinquent property taxes on the property in the preceding year. Taxes included in a
confession of judgment under section new text begin 277.23 or new text end 279.37 shall not constitute delinquent
taxes as long as the claimant is current on the payments required to be made under section new text begin
277.23 or new text end 279.37.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 2

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2008, section 297A.70, subdivision 2, is amended to
read:

Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;

(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and

(6) sales to public libraries, public library systems, multicounty, multitype library
systems as defined in section 134.001, county law libraries under chapter 134A, state
agency libraries, the state library under section 480.09, and the Legislative Reference
Library.

(b) This exemption does not apply to the sales of the following products and services:

(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 which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
except for leases entered into by the United States or its agencies or instrumentalities; or

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, deleted text begin and deleted text end soft drinks, new text begin and alcoholic beverages as defined in
section 297A.67, subdivision 2, new text end except for lodging, prepared food, candy, deleted text begin and deleted text end soft
drinks new text begin , and alcoholic beverages new text end purchased directly by the United States or its agencies
or instrumentalities.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2009.
new text end

Sec. 2.

Minnesota Statutes 2008, section 297A.70, subdivision 4, is amended to read:

Subd. 4.

Sales to nonprofit groups.

(a) All sales, except those listed in paragraph
(b), to the following "nonprofit organizations" are exempt:

(1) 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

(2) any senior citizen group or association of groups that:

(i) in general limits membership to persons who are either age 55 or older, or
physically disabled; deleted text begin and
deleted text end

(ii) is organized and operated exclusively for pleasure, recreation, and other
nonprofit purposes, new text begin not including housing, new text end no part of the net earnings of which inures to
the benefit of any private shareholders deleted text begin . deleted text end new text begin ; and
new text end

new text begin (iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
new text end

For purposes of this subdivision, charitable purpose includes the maintenance of a
cemetery owned by a religious organization.

(b) 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; and

(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, deleted text begin and deleted text end soft drinks new text begin , and alcoholic beverages as defined in
section 297A.67, subdivision 2, except wine purchased by an established religious
organization for sacramental purposes new text end ; and

(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
as provided in paragraph (c).

(c) 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.

(d) 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, 2009, except that the amendment to paragraph (a) is effective the day following
final enactment.
new text end

Sec. 3.

Minnesota Statutes 2008, section 297A.992, subdivision 2, is amended to read:

Subd. 2.

Authorization; rates.

(a) Notwithstanding section 297A.99, subdivisions
1, 2, and 3, or 477A.016, or any other law, the board of a county participating in a
joint powers agreement as specified in this section shall impose by resolution (1) a
transportation sales and use tax at a rate of one-quarter of one percent on retail sales and
uses taxable under this chapter, and (2) an excise tax of $20 per motor vehicle new text begin , as defined
in section 297B.01, subdivision 11, new text end purchased or acquired from any person engaged in the
business of selling motor vehicles at retail, occurring within the jurisdiction of the taxing
authority. The taxes authorized are to fund transportation improvements as specified in
this section, including debt service on obligations issued to finance such improvements
pursuant to subdivision 7.

(b) The tax imposed under this section is not included in determining if the total tax
on lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986,
chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article
12, section 87, or in determining a tax that may be imposed under any other limitations.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2008, section 297A.993, subdivision 1, is amended to read:

Subdivision 1.

Authorization; rates.

Notwithstanding section 297A.99,
subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside
the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or
more than one county outside the metropolitan transportation area acting under a joint
powers agreement, may impose (1) a transportation sales tax at a rate of up to one-half of
one percent on retail sales and uses taxable under this chapter, and (2) an excise tax of $20
per motor vehicle new text begin , as defined in section 297B.01, subdivision 11, new text end purchased or acquired
from any person engaged in the business of selling motor vehicles at retail, occurring
within the jurisdiction of the taxing authority. The taxes imposed under this section are
subject to approval by a majority of the voters in each of the counties affected at a general
election who vote on the question to impose the taxes.

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 REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 297A.67, subdivision 24, 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 the day following final enactment.
new text end

ARTICLE 3

SPECIAL TAXES

Section 1.

Minnesota Statutes 2008, section 126C.21, subdivision 4, is amended to read:

Subd. 4.

Taconite deductions.

For districts that have revenue under sections
298.018; 298.225; 298.24 to 298.28, excluding 298.26 and 298.28, subdivision 4,
paragraph new text begin (b), item (ii), two cents per taxable ton under paragraphs (c), item (i), and new text end
(d); 298.34 to 298.39; 298.391 to 298.396; 298.405; and 477A.15, or any law imposing
a tax upon severed mineral values; the general education aid must be reduced in the
final adjustment payment by (1) the amount of the revenue recognized pursuant to those
sections for the fiscal year to which the final adjustment is attributable, less (2) the amount
that was calculated, pursuant to section 126C.48, subdivision 8, as a reduction of the levy
attributable to the fiscal year to which the final adjustment is attributable. If the final
adjustment of a district's general education aid for a fiscal year is a negative amount
because of this subdivision, the next fiscal year's general education aid to that district must
be reduced by this negative amount in the following manner: there must be withheld from
each scheduled general education aid payment due the district in such fiscal year, 15
percent of the total negative amount, until the total negative amount has been withheld.
The amount reduced from general education aid pursuant to this subdivision must reduce
revenue in the fiscal year to which the final adjustment payment is attributable.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2008, section 126C.48, subdivision 8, is amended to read:

Subd. 8.

Taconite payment and other reductions.

(1) Reductions in levies
pursuant to subdivision 1 must be made prior to the reductions in clause (2).

(2) Notwithstanding any other law to the contrary, districts that have revenue
pursuant to sections 298.018; 298.225; 298.24 to 298.28, except an amount distributed
under sections 298.26; 298.28, subdivision 4, new text begin paragraph (b), item (ii), two cents per
taxable ton under new text end paragraphs (c), deleted text begin clause deleted text end new text begin items (i) and new text end (ii), and (d); 298.34 to 298.39;
298.391 to 298.396; 298.405; 477A.15; and any law imposing a tax upon severed
mineral values must reduce the levies authorized by this chapter and chapters 120B,
122A, 123A, 123B, 124A, 124D, 125A, and 127A by 95 percent of the previous year's
revenue specified under this clause.

(3) The amount of any voter approved referendum, facilities down payment, and
debt levies shall not be reduced by more than 50 percent under this subdivision. In
administering this paragraph, the commissioner shall first reduce the nonvoter approved
levies of a district; then, if any payments, severed mineral value tax revenue or recognized
revenue under paragraph (2) remains, the commissioner shall reduce any voter approved
referendum levies authorized under section 126C.17; then, if any payments, severed
mineral value tax revenue or recognized revenue under paragraph (2) remains, the
commissioner shall reduce any voter approved facilities down payment levies authorized
under section 123B.63 and then, if any payments, severed mineral value tax revenue or
recognized revenue under paragraph (2) remains, the commissioner shall reduce any
voter approved debt levies.

(4) Before computing the reduction pursuant to this subdivision of the health and
safety levy authorized by sections 123B.57 and 126C.40, subdivision 5, the commissioner
shall ascertain from each affected school district the amount it proposes to levy under
each section or subdivision. The reduction shall be computed on the basis of the amount
so ascertained.

(5) To the extent the levy reduction calculated under paragraph (2) exceeds the
limitation in paragraph (3), an amount equal to the excess must be distributed from the
school district's distribution under sections 298.225, 298.28, and 477A.15 in the following
year to the cities and townships within the school district in the proportion that their
taxable net tax capacity within the school district bears to the taxable net tax capacity of
the school district for property taxes payable in the year prior to distribution. No city or
township shall receive a distribution greater than its levy for taxes payable in the year prior
to distribution. The commissioner of revenue shall certify the distributions of cities and
towns under this paragraph to the county auditor by September 30 of the year preceding
distribution. The county auditor shall reduce the proposed and final levies of cities and
towns receiving distributions by the amount of their distribution. Distributions to the cities
and towns shall be made at the times provided under section 298.27.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2008, section 287.04, is amended to read:

287.04 EXEMPTIONS.

The tax imposed by section 287.035 does not apply to:

(a) A decree of marriage dissolution or an instrument made pursuant to it.

(b) A mortgage given to correct a misdescription of the mortgaged property.

(c) A mortgage or other instrument that adds additional security for the same debt
for which mortgage registry tax has been paid.

(d) A contract for the conveyance of any interest in real property, including a
contract for deed.

(e) A mortgage secured by real property subject to the minerals production tax of
sections 298.24 to 298.28.

(f) The principal amount of a mortgage loan made under a low and moderate
income or other affordable housing program, if the mortgagee is a federal, state, or local
government agency.

(g) Mortgages granted by fraternal benefit societies subject to section 64B.24.

(h) A mortgage amendment or extension, as defined in section 287.01.

(i) An agricultural mortgage if the proceeds of the loan secured by the mortgage are
used to acquire or improve real property classified under section 273.13, subdivision 23,
paragraph (a) deleted text begin , deleted text end or (b) deleted text begin , clause (1), (2), or (3) deleted text end .

(j) A mortgage on an armory building as set forth in section 193.147.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2008, section 287.05, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Modification of mortgage. new text end

new text begin If a mortgage, or a document modifying a
mortgage, contains more than one statement that purports to limit: the enforcement of
the mortgage to a certain dollar amount; the tax imposed on the mortgage under this
chapter; or the effect of a modifying document, including but not limited to the statements
authorized in subdivisions 1, 1a, and 8, then the tax must be imposed based on the
combined effect, if any, of all the statements.
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.

Minnesota Statutes 2008, section 287.22, is amended to read:

287.22 EXEMPTIONS.

The tax imposed by section 287.21 does not apply to:

(1) an executory contract for the sale of real property under which the purchaser is
entitled to or does take possession of the real property, or any assignment or cancellation
of the contract;

(2) a mortgage or an amendment, assignment, extension, partial release, or
satisfaction of a mortgage;

(3) a will;

(4) a plat;

(5) a lease, amendment of lease, assignment of lease, or memorandum of lease;

(6) a deed, instrument, or writing in which the United States or any agency or
instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;

(7) a deed for a cemetery lot or lots;

(8) a deed of distribution by a personal representative;

(9) a deed to or from a co-owner partitioning their undivided interest in the same
piece of real property;

(10) a deed or other instrument of conveyance issued pursuant to a permanent school
fund land exchange under section 92.121 and related laws;

(11) a referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;

(12) a referee's, sheriff's, or certificate holder's certificate of redemption from a
mortgage or lien foreclosure sale issued under section 580.23 or other statute applicable to
redemption by an owner of real property;

(13) a deed, instrument, or writing which grants, creates, modifies, or terminates
an easement;

(14) a decree of marriage dissolution, as defined in section 287.01, subdivision 4,
or a deed or other instrument between the parties to the dissolution made pursuant to the
terms of the decree; and

(15) a transfer on death deed under section 507.071 new text begin , and any affidavit or other
document to the extent it references a transfer on death deed 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. 6.

Minnesota Statutes 2008, section 287.25, is amended to read:

287.25 PAYMENT OF TAX deleted text begin ; STAMPS deleted text end .

Except for documents filed electronically, deleted text begin the county board shall determine the
method for collection of the tax imposed by section 287.21:
deleted text end

deleted text begin (1) The tax imposed by section 287.21 may be paid by the affixing of a documentary
stamp or stamps in the amount of the tax to the document or instrument with respect to
which the tax is paid, provided that the county board may permit the payment of the
tax without the affixing of the documentary stamps and in such cases shall direct the
treasurer to endorse a receipt for such tax upon the face of the document or instrument.
Documents submitted electronically must have the deed tax data affixed electronically and
the tax paid as provided in section 287.08.
deleted text end

deleted text begin (2) deleted text end the tax imposed by section 287.21 deleted text begin may deleted text end new text begin must new text end be paid in the manner prescribed by
section 287.08 relating to payment of mortgage registration tax new text begin , and the treasurer must
endorse a receipt for the tax on the face of the document or instrument 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 2008, section 295.56, is amended to read:

295.56 TRANSFER OF ACCOUNTS RECEIVABLE.

When a hospital deleted text begin or deleted text end new text begin , surgical center, new text end health care provider new text begin , or wholesale drug
distributor new text end transfers, assigns, or sells accounts receivable to another person who is subject
to tax under this chapter, liability for the tax on the accounts receivable is imposed on the
transferee, assignee, or buyer of the accounts receivable. No liability for these accounts
receivable is imposed on the transferor, assignor, or seller of the accounts receivable.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 295.57, subdivision 5, is amended to read:

Subd. 5.

Exemption for amounts paid for legend drugs.

If a hospital new text begin , surgical
center, new text end or health care provider cannot determine the actual cost or reimbursement of
legend drugs under the exemption provided in section 295.53, subdivision 1, paragraph
(a), clause deleted text begin (6) deleted text end new text begin (5) new text end , the following method must be used:

A hospital new text begin , surgical center, new text end or health care provider must determine the amount paid
for legend drugs used during the month or quarter and multiply that amount by a ratio,
the numerator of which is the total amount received for taxable patient services, and the
denominator of which is the total amount received for all patient services, including
amounts exempt under section 295.53, subdivision 1. The result represents the allowable
exemption for the monthly or quarterly cost of drugs.

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 2008, section 296A.21, subdivision 1, is amended to read:

Subdivision 1.

General rules.

(a) The commissioner shall make determinations,
corrections, assessments, and refunds with respect to taxes and fees under this chapter,
including interest, additions to taxes, and assessable penalties. Except as otherwise
provided in this section, the amount of taxes assessable must be assessed within 3-1/2
years after the date the return is filed. new text begin For purposes of this section, a tax return filed before
the last day prescribed by law for filing is considered to be filed on the last day.
new text end

(b) A claim for a refund of an overpayment of state tax or fees must be filed within
3-1/2 years from the date prescribed for filing the return, plus any extension of time
granted for filing the return, but only if filed within the extended time; or the claim must
be filed within one year from the date of an order assessing tax or fees, or from the date of
a return filed by the commissioner, upon payment in full of the tax, fees, penalties, and
interest shown on the order or return, whichever period expires later.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 297E.02, subdivision 4, is amended to read:

Subd. 4.

Pull-tab and tipboard tax.

(a) A tax is imposed on the sale of each deal
of pull-tabs and tipboards sold by a distributor. The rate of the tax is 1.7 percent of the
ideal gross of the pull-tab or tipboard deal. The sales tax imposed by chapter 297A on the
sale of the pull-tabs and tipboards by the distributor is imposed on the retail sales price
less the tax imposed by this subdivision. The retail sale of pull-tabs or tipboards by the
organization is exempt from taxes imposed by chapter 297A and is exempt from all local
taxes and license fees except a fee authorized under section 349.16, subdivision 8.

(b) The liability for the tax imposed by this section is incurred when the pull-tabs
and tipboards are delivered by the distributor to the customer or to a common or contract
carrier for delivery to the customer, or when received by the customer's authorized
representative at the distributor's place of business, regardless of the distributor's method
of accounting or the terms of the sale.

The tax imposed by this subdivision is imposed on all sales of pull-tabs and
tipboards, except the following:

(1) sales to the governing body of an Indian tribal organization for use on an Indian
reservation;

(2) sales to distributors licensed under the laws of another state or of a province of
Canada, as long as all statutory and regulatory requirements are met in the other state or
province;

(3) sales of promotional tickets as defined in section 349.12; and

(4) pull-tabs and tipboards sold to an organization that sells pull-tabs and tipboards
under the exemption from licensing in section 349.166, subdivision 2. A distributor shall
require an organization conducting exempt gambling to show proof of its exempt status
before making a tax-exempt sale of pull-tabs or tipboards to the organization. A distributor
shall identify, on all reports submitted to the commissioner, all sales of pull-tabs and
tipboards that are exempt from tax under this subdivision.

(c) A distributor having a liability of deleted text begin $120,000 deleted text end new text begin $10,000 new text end or more during a fiscal year
ending June 30 must remit all liabilities in the subsequent calendar year by electronic
means.

(d) Any customer who purchases deals of pull-tabs or tipboards from a distributor
may file an annual claim for a refund or credit of taxes paid pursuant to this subdivision
for unsold pull-tab and tipboard tickets. The claim must be filed with the commissioner on
a form prescribed by the commissioner by March 20 of the year following the calendar
year for which the refund is claimed. The refund must be filed as part of the customer's
February monthly return. The refund or credit is equal to 1.7 percent of the face value
of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be 1.75
percent of the face value of the unsold pull-tab or tipboard tickets for claims for a refund
or credit of taxes filed on the February 2001 monthly return. The refund claimed will be
applied as a credit against tax owing under this chapter on the February monthly return. If
the refund claimed exceeds the tax owing on the February monthly return, that amount
will be refunded. The amount refunded will bear interest pursuant to section 270C.405
from 90 days after the claim is filed.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments due in calendar year
2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30,
2009, and in fiscal years thereafter.
new text end

Sec. 11.

Minnesota Statutes 2008, section 297E.06, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Required signatures. new text end

new text begin The gambling manager and the chief executive
officer of the organization, or their respective designees, and the person who completed
the tax return must sign the tax return. The organization shall inform the commissioner of
revenue in writing of the identity of the designees as soon as practicable in the form and
manner prescribed by the commissioner.
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. 12.

Minnesota Statutes 2008, section 297E.11, subdivision 1, is amended to read:

Subdivision 1.

General rule.

Except as otherwise provided in this chapter, the
amount of taxes assessable must be assessed within 3-1/2 years after the return is filed,
whether or not the return is filed on or after the date prescribed. A return must not be
treated as filed until it is in processible form. A return is in processible form if it is filed
on a permitted form and contains sufficient data to identify the taxpayer and permit the
mathematical verification of the tax liability shown on the return. new text begin For purposes of this
section, a tax return filed before the last day prescribed by law for filing is considered to
be filed on the last day.
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 2008, section 297F.09, subdivision 7, is amended to read:

Subd. 7.

Electronic payment.

A cigarette or tobacco products distributor having a
liability of deleted text begin $120,000 deleted text end new text begin $10,000 new text end or more during a fiscal year ending June 30 must remit all
liabilities in the subsequent calendar year by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments due in calendar year
2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30,
2009, and in fiscal years thereafter.
new text end

Sec. 14.

Minnesota Statutes 2008, section 297G.09, subdivision 6, is amended to read:

Subd. 6.

Electronic payments.

A licensed brewer, importer, or wholesaler having
an excise tax liability of deleted text begin $120,000 deleted text end new text begin $10,000 new text end or more during a fiscal year ending June 30
must remit all excise tax liabilities in the subsequent calendar year by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments due in calendar year
2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30,
2009, and in fiscal years thereafter.
new text end

Sec. 15.

Minnesota Statutes 2008, section 297I.30, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Extensions for filing returns. new text end

new text begin When, in the commissioner's judgment,
good cause exists, the commissioner may extend the time for filing returns for not more
than six months.
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. 16.

Minnesota Statutes 2008, section 297I.35, subdivision 2, is amended to read:

Subd. 2.

Electronic payments.

If the aggregate amount of tax and surcharges
due under this chapter during a calendar year is equal to or exceeds deleted text begin $120,000 deleted text end new text begin $10,000 new text end ,
or if the taxpayer is required to make payment of any other tax to the commissioner by
electronic means, then all tax and surcharge payments in the subsequent calendar year
must be paid by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments due in calendar year
2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30,
2009, and in fiscal years thereafter.
new text end

Sec. 17.

Minnesota Statutes 2008, section 298.28, subdivision 4, is amended to read:

Subd. 4.

School districts.

(a) 23.15 cents per taxable ton, plus the increase provided
in paragraph (d) must be allocated to qualifying school districts to be distributed, based
upon the certification of the commissioner of revenue, under paragraphs (b), (c), and (f).

(b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which
the lands from which taconite was mined or quarried were located or within which the
concentrate was produced. The distribution must be based on the apportionment formula
prescribed in subdivision 2.

(ii) Four cents per taxable ton from each taconite facility must be distributed to
each affected school district for deposit in a fund dedicated to building maintenance
and repairs, as follows:

(1) proceeds from Keewatin Taconite or its successor are distributed to Independent
School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
districts;

(2) proceeds from the Hibbing Taconite Company or its successor are distributed to
Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
districts;

(3) proceeds from the Mittal Steel Company and Minntac or their successors are
distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;

(4) proceeds from the Northshore Mining Company or its successor are distributed
to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
or their successor districts; and

(5) proceeds from United Taconite or its successor are distributed to Independent
School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
successor districts.

Revenues that are required to be distributed to more than one district shall be
apportioned according to the number of pupil units identified in section 126C.05,
subdivision 1, enrolled in the second previous year.

(c)(i) 15.72 cents per taxable ton, less any amount distributed under paragraph (e),
shall be distributed to a group of school districts comprised of those school districts which
qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a
qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
to school district indexes as follows: for each school district, its pupil units determined
under section 126C.05 for the prior school year shall be multiplied by the ratio of the
average adjusted net tax capacity per pupil unit for school districts receiving aid under
this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
Each district shall receive that portion of the distribution which its index bears to the sum
of the indices for all school districts that receive the distributions.

(ii) Notwithstanding clause (i), each school district that receives a distribution
under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
severed mineral values after reduction for any portion distributed to cities and towns under
section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy
reduction under section 126C.48, subdivision 8, for the second year prior to the year of the
distribution shall receive a distribution equal to the difference; the amount necessary to
make this payment shall be derived from proportionate reductions in the initial distribution
to other school districts under clause (i).

(d) Any school district described in paragraph (c) where a levy increase pursuant to
section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001,
shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous
year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
times the district's taxable net tax capacity in the second previous year.

If the total amount provided by paragraph (d) is insufficient to make the payments
herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
so as not to exceed the funds available. Any amounts received by a qualifying school
district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
education aid which the district receives pursuant to section 126C.13 or the permissible
levies of the district. Any amount remaining after the payments provided in this paragraph
shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
economic protection trust fund as provided in subdivision 11.

Each district receiving money according to this paragraph shall reserve the lesser of
the amount received under this paragraph or $25 times the number of pupil units served
in the district. It may use the money for early childhood programs or for outcome-based
learning programs that enhance the academic quality of the district's curriculum. The
outcome-based learning programs must be approved by the commissioner of education.

(e) There shall be distributed to any school district the amount which the school
district was entitled to receive under section 298.32 in 1975.

deleted text begin (f) Four cents per taxable ton must be distributed to qualifying school districts
according to the distribution specified in paragraph (b), clause (ii), and two cents per
taxable ton must be distributed according to the distribution specified in paragraph
(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48,
subdivision 8.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for distributions in 2009 and
thereafter.
new text end

Sec. 18.

Minnesota Statutes 2008, section 298.28, subdivision 11, is amended to read:

Subd. 11.

Remainder.

(a) The proceeds of the tax imposed by section 298.24
which remain after the distributions and payments in subdivisions 2 to 10a, as certified
by the commissioner of revenue, and paragraphs (b), (c), new text begin and new text end (d) deleted text begin , and (e) deleted text end have been
made, together with interest earned on all money distributed under this section prior to
distribution, shall be divided between the taconite environmental protection fund created
in section 298.223 and the Douglas J. Johnson economic protection trust fund created in
section 298.292 as follows: Two-thirds to the taconite environmental protection fund and
one-third to the Douglas J. Johnson economic protection trust fund. The proceeds shall be
placed in the respective special accounts.

(b) There shall be distributed to each city, town, and county the amount that it
received under section 294.26 in calendar year 1977; provided, however, that the amount
distributed in 1981 to the unorganized territory number 2 of Lake County and the town
of Beaver Bay based on the between-terminal trackage of Erie Mining Company will be
distributed in 1982 and subsequent years to the unorganized territory number 2 of Lake
County and the towns of Beaver Bay and Stony River based on the miles of track of Erie
Mining Company in each taxing district.

(c) There shall be distributed to the Iron Range Resources and Rehabilitation Board
the amounts it received in 1977 under section 298.22. The amount distributed under
this paragraph shall be expended within or for the benefit of the taconite assistance area
defined in section 273.1341.

(d) There shall be distributed to each school district 62 percent of the amount that it
received under section 294.26 in calendar year 1977.

deleted text begin (e) In 2003 only, $100,000 must be distributed to a township located in a taconite
tax relief area as defined in section 273.134, paragraph (a), that received $119,259 of
homestead and agricultural credit aid and $182,014 in local government aid in 2001.
deleted 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.

Minnesota Statutes 2008, section 473.843, subdivision 3, is amended to read:

Subd. 3.

Payment of fee.

On or before the 20th day of each month each operator
shall pay the fee due under this section for the previous month, using a form provided
by the commissioner of revenue.

An operator having a fee of deleted text begin $120,000 deleted text end new text begin $10,000 new text end or more during a fiscal year ending
June 30 must pay all fees in the subsequent calendar year by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments due in calendar year
2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30,
2009, and in fiscal years thereafter.
new text end

Sec. 20. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 287.26; 287.27, subdivision 1; and 298.28,
subdivisions 11a and 13, 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 4

PROPERTY TAXES AND AIDS

Section 1.

Minnesota Statutes 2008, section 273.11, subdivision 23, is amended to read:

Subd. 23.

First tier valuation limit; agricultural homestead property.

(a)
deleted text begin Beginning with assessment year 2006, deleted text end The commissioner of revenue shall annually certify
the first tier limit for agricultural homestead property deleted text begin as deleted text end new text begin . For assessment year 2010, the
limit is $1,100,000. Beginning with assessment year 2011, the limit is new text end the product of (i)
deleted text begin $600,000 deleted text end new text begin the first tier limit for the preceding assessment year new text end , and (ii) the ratio of the
statewide average taxable market value of agricultural property per acre of deeded farm
land in the preceding assessment year to the statewide average taxable market value of
agricultural property per acre of deeded farm land for new text begin the second preceding new text end assessment
year deleted text begin 2004 deleted text end . The limit shall be rounded to the nearest $10,000.

(b) For the purposes of this subdivision, "agricultural property" means all class
deleted text begin 2 deleted text end new text begin 2a new text end property under section 273.13, subdivision 23, except for deleted text begin (1) timberland, (2) a
landing area or public access area of a privately owned public use airport, and (3) deleted text end property
consisting of the house, garage, and immediately surrounding one acre of land of an
agricultural homestead.

(c) The commissioner shall certify the limit by January 2 of each assessment year deleted text begin ,
except that for assessment year 2006 the commissioner shall certify the limit by June
1, 2006 deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 2.

Minnesota Statutes 2008, section 273.111, subdivision 4, is amended to read:

Subd. 4.

Determination of value.

(a) The value of any real estate described
in subdivision 3 shall upon timely application by the owner, in the manner provided
in subdivision 8, be determined solely with reference to its appropriate agricultural
classification and value notwithstanding sections 272.03, subdivision 8, and 273.11.
Furthermore, the assessor shall not consider any added values resulting from
nonagricultural factors. In order to account for the presence of nonagricultural influences
that may affect the value of agricultural land, the commissioner of revenue shall develop a
fair and uniform method of determining agricultural values for each county in the state
that are consistent with this subdivision. The commissioner shall annually assign the
resulting values to each county, and these values shall be used as the basis for determining
the agricultural value for all properties in the county qualifying for tax deferment under
this section.

(b) In the case of property qualifying for tax deferment only under subdivision 3a,
the value shall be based on the value in effect for assessment year 2008, multiplied by
the ratio of the total taxable market value of all property in the county for the new text begin year prior
to the new text end current assessment year divided by the total taxable market value of all property
in the county for assessment year 2008.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 3.

Minnesota Statutes 2008, section 273.1115, subdivision 2, is amended to read:

Subd. 2.

Requirement.

Real estate is entitled to valuation under this section only if
all of the following requirements are met:

(1) the property is classified new text begin as class new text end 1a, 1b, 2a, or 2b property under section 273.13,
subdivisions 22 and 23 new text begin , or the property is classified as class 2e under section 273.13,
subdivision 23, and immediately before being classified as class 2e was classified as
class 1a or 1b new text end ;

(2) the property is at least ten contiguous acres, when the application is filed under
subdivision 3;

(3) the owner has filed a completed application for deferment as specified in
subdivision 3 with the county assessor in the county in which the property is located;

(4) there are no delinquent taxes on the property; and

(5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 4.

Minnesota Statutes 2008, section 273.113, subdivision 1, is amended to read:

Subdivision 1.

Definition.

For the purposes of this section, the following terms
have the meanings given to them:

(1) "proposed bovine tuberculosis modified accredited zone" means the modified
accredited zone proposed by the Board of Animal Health under section 35.244; deleted text begin and
deleted text end

(2) "located within" deleted text begin means deleted text end new text begin requires new text end that new text begin (i) new text end the herd deleted text begin is deleted text end new text begin was new text end kept deleted text begin in the area deleted text end new text begin on the
land new text end for at least a part of calendar year 2007 new text begin ; or (ii) the herd on the land was eradicated or
purchased by a state or federal governmental agency in 2006 for the purpose of controlling
the spread of bovine tuberculosis new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009.
new text end

Sec. 5.

Minnesota Statutes 2008, section 273.113, subdivision 2, is amended to read:

Subd. 2.

Eligibility; amount of credit.

Agricultural land classified under section
273.13, subdivision 23, located within a proposed bovine tuberculosis modified accredited
zone is eligible for a property tax credit equal to the property tax on the deleted text begin parcel deleted text end new text begin property new text end
where the herd had been located, excluding any tax attributable to residential structures.
To begin to qualify for the tax credit, the owner shall file an application with the county by
December 1 of the levy year. The credit must be given for each subsequent taxes payable
year until the credit terminates under subdivision 4. The assessor shall indicate the amount
of the property tax reduction on the property tax statement of each taxpayer receiving a
credit under this section. The credit paid pursuant to this section shall be deducted from
the tax due on the property as provided in section 273.1393.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009.
new text end

Sec. 6.

Minnesota Statutes 2008, section 273.1231, subdivision 8, is amended to read:

Subd. 8.

Utility property.

"Utility property" means property appraised and
classified for tax purposes by new text begin order of new text end the commissioner of revenue under sections 273.33
to 273.3711.

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 2008, section 273.124, subdivision 21, is amended to read:

Subd. 21.

Trust property; homestead.

Real new text begin or personal new text end property held by a trustee
under a trust is eligible for classification as homestead property if deleted text begin : deleted text end new text begin the property satisfies
the requirements of paragraph (a), (b), (c), or (d).
new text end

deleted text begin (1) deleted text end new text begin (a) new text end The grantor or surviving spouse of the grantor of the trust occupies and
uses the property as a homestead deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (2) deleted text end new text begin (b) new text end A relative or surviving relative of the grantor who meets the requirements
of subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1,
paragraph (d), in the case of agricultural property, occupies and uses the property as
a homestead deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (3) deleted text end new text begin (c) new text end A family farm corporation, joint farm venture, limited liability company, or
partnership operating a family farm in which the grantor or the grantor's surviving spouse
is a shareholder, member, or partner rents the property deleted text begin , deleted text end new text begin ; new text end and new text begin , either (1) new text end a shareholder,
member, or partner of the corporation, joint farm venture, limited liability company, or
partnership occupies and uses the property as a homestead deleted text begin , deleted text end new text begin ; new text end or deleted text begin is actively farming deleted text end new text begin , (2) the
property is new text end at least 40 acres, including undivided government lots and correctional 40's new text begin , and
a shareholder, member, or partner of the tenant-entity is actively farming new text end the property on
behalf of the corporation, joint farm venture, limited liability company, or partnership deleted text begin ; or deleted text end new text begin .
new text end

deleted text begin (4) deleted text end new text begin (d) new text end A person who has received homestead classification for property taxes
payable in 2000 on the basis of an unqualified legal right under the terms of the trust
agreement to occupy the property as that person's homestead and who continues to use the
property as a homestead new text begin ; new text end or new text begin , new text end a person who received the homestead classification for taxes
payable in 2005 under deleted text begin clause (3) deleted text end new text begin paragraph (c) new text end who does not qualify under deleted text begin clause (3) deleted text end
new text begin paragraph (c) new text end for taxes payable in 2006 or thereafter but who continues to qualify under
deleted text begin clause (3) deleted text end new text begin paragraph (c) new text end as it existed for taxes payable in 2005.

For purposes of this subdivision, "grantor" is defined as the person creating or
establishing a testamentary, inter Vivos, revocable or irrevocable trust by written
instrument or through the exercise of a power of appointment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, 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 class 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 net class rate
of 0.5 percent of market value. The remaining property over the first tier has a class 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 net class rate of one percent of
market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a
property may contain property that would otherwise be classified as 2b, including but not
limited to sloughs, wooded wind shelters, acreage abutting ditches, and other similar land
impractical for the assessor to value 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 net class 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 class rate of .65 percent, provided
that the owner of the property must apply to the assessor deleted text begin to receive the reduced class deleted text end new text begin in
order for the property to initially qualify for the reduced new text end rate and provide the information
required by the assessor to verify that the property qualifies for the reduced rate. new text begin 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. new text end 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. new text begin 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.
new text end

(e) Agricultural land as used in this section means contiguous acreage of ten
acres or more, used during the preceding year for agricultural purposes. "Agricultural
purposes" as used in this section means the raising, 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 the assessment year 2002 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.

(f) Real estate of less than ten acres, which is exclusively or intensively used for
raising or cultivating agricultural products, shall be considered as agricultural land. To
qualify under this paragraph, property that includes a residential structure must be used
intensively for one of the following purposes:

(i) for drying or storage of grain or storage of machinery or equipment 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 to produce nursery stock are
considered agricultural land;

(iii) for livestock or poultry confinement, provided that land that is used only for
pasturing and grazing does not qualify; or

(iv) for 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.

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

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

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

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

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

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

(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 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.

new text begin (k) new text end 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.

deleted text begin (k) deleted text end new text begin (l) new text end Class 2d airport landing area consists of a landing area or public access area
of a privately owned public use airport. It has a class 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.

deleted text begin (l) deleted text end new text begin (m) new text end 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 new text begin , 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 new text end . It has a class 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.

deleted text begin (m) deleted text end new text begin (n) new text end 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.

new text begin (o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
not rules, are exempt from the rulemaking provisions of chapter 14, and the provisions
in section 14.386 concerning exempt rules do not apply.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2008, 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 class 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 class rate of 1.25 percent.

(c) Class 4bb includes:

(1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property; and

(2) 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 class 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), deleted text begin or subdivision 23, paragraph
(b), clause (1), deleted text end real and personal property devoted to temporary and seasonal residential
occupancy for recreation purposes, including real and personal property devoted to
temporary and seasonal residential occupancy for recreation purposes and not devoted to
commercial purposes for 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 new text begin under this clause new text end 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. Class 4c property new text begin under this clause new text end must provide recreational
activities such as renting ice fishing houses, boats and motors, snowmobiles, downhill or
cross-country ski equipment; provide marina services, launch services, or guide services;
or sell bait and fishing tackle. A camping pad offered for rent by a property that otherwise
qualifies for class 4c new text begin under this clause new text end is also class 4c new text begin under this clause new text end 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 as class 4c, seasonal residential recreational
for commercial purposes under this clause, 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 (i) 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 (ii) at least 20 percent
of the annual gross receipts must be from charges for rental of fish houses, boats and
motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina
services, launch services, and guide services, or the sale of bait and fishing tackle. For
purposes of this determination, a paid booking of five or more nights shall be counted as
two bookings. Class 4c new text begin property classified under this clause new text end also includes commercial
use real property used exclusively for recreational purposes in conjunction with new text begin other
new text end class 4c property new text begin classified under this clause and new text end 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. Owners of real and personal property devoted to temporary and
seasonal residential occupancy for recreation purposes and all or a portion of which was
devoted to commercial purposes for not more than 250 days in the year preceding the
year of assessment desiring classification as class 4c, 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 new text begin under this clause new text end 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 new text begin under this clause new text end 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;

(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 deleted text begin that is deleted text end not used for residential
purposes on either a temporary or permanent basis, deleted text begin qualifies for class 4c deleted text end provided that
deleted text begin it meets either of the following deleted text end :

(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), new text begin (8), new text end (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 new text begin not new text end qualifying under new text begin either new text end item (i) deleted text begin which is used for
revenue-producing activities for more than six days in the calendar year preceding the
year of assessment shall be assessed as deleted text end new text begin or (ii) is new text end 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) manufactured home parks as defined in section 327.14, subdivision 3;

(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; and

(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: (A) is located on a lake
as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
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 subitem (B). 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.

Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) manufactured home parks assessed under
clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
residential recreational property has a class 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 class rate of one percent, (v) the market value of
property described in clauses (2), (6), and (10) has a class 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 class rate of 1.25 percent.

(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.

Class 4d property has a class rate of 0.75 percent.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 273.13, subdivision 33, is amended to read:

Subd. 33.

Classification of unimproved property.

(a) All real property that is not
improved with a structure must be classified according to its current use.

(b) Except as provided in subdivision 23, paragraph (c) new text begin or (d) new text end , real property that is
not improved with a structure and for which there is no identifiable current use must be
classified according to its highest and best use permitted under the local zoning ordinance.
If the ordinance permits more than one use, the land must be classified according to the
highest and best use permitted under the ordinance. If no such ordinance exists, the
assessor shall consider the most likely potential use of the unimproved land based upon
the use made of surrounding land or land in proximity to the unimproved land.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2008, section 273.33, subdivision 2, is amended to read:

Subd. 2.

Listing and assessment by commissioner.

The personal property,
consisting of the pipeline system of mains, pipes, and equipment attached thereto, of
pipeline companies and others engaged in the operations or business of transporting natural
gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed with and
assessed by the commissioner of revenue and the values provided to the city or county
assessor by order. This subdivision shall not apply to the assessment of the products
transported through the pipelines nor to the lines of local commercial gas companies
engaged primarily in the business of distributing gas to consumers at retail nor to pipelines
used by the owner thereof to supply natural gas or other petroleum products exclusively
for such owner's own consumption and not for resale to others. If more than 85 percent
of the natural gas or other petroleum products actually transported over the pipeline is
used for the owner's own consumption and not for resale to others, then this subdivision
shall not apply; provided, however, that in that event, the pipeline shall be assessed in
proportion to the percentage of gas actually transported over such pipeline that is not used
for the owner's own consumption. On or before deleted text begin June 30 deleted text end new text begin August 1 new text end , the commissioner shall
certify to the auditor of each county, the amount of such personal property assessment
against each company in each district in which such property is located.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 12.

Minnesota Statutes 2008, section 273.37, subdivision 2, is amended to read:

Subd. 2.

Listing and assessment by commissioner.

Transmission lines of less
than 69 kv, transmission lines of 69 kv and above located in an unorganized township,
and distribution lines, and equipment attached thereto, having a fixed situs outside the
corporate limits of cities except distribution lines taxed as provided in sections 273.40 and
273.41, shall be listed with and assessed by the commissioner of revenue in the county
where situated and the values provided to the city or county assessor by order. The
commissioner shall assess such property at the percentage of market value fixed by law;
and, on or before deleted text begin June 30 deleted text end new text begin August 1 new text end , shall certify to the auditor of each county in which
such property is located the amount of the assessment made against each company and
person owning such property.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 13.

Minnesota Statutes 2008, section 274.13, subdivision 2, is amended to read:

Subd. 2.

Special board; delegated duties.

The board of equalization for any
county may appoint a special board of equalization and may delegate to it the powers and
duties in subdivision 1. The special board of equalization shall serve at the direction and
discretion of the appointing county board, subject to the restrictions imposed by law on
the appointing board. The appointing board may determine the number of members to be
appointed to the special board, the compensation and expenses to be paid, and the term of
office of each member. At least one member of the special board of equalization must be
an appraiser, realtor, or other person familiar with property valuations in the county. The
county auditor is a nonvoting member and serves as the recorder for the special board. new text begin
The special board is subject to the quorum requirements for county boards and the training
requirements for county boards in section 274.135, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2008, section 274.135, subdivision 3, is amended to read:

Subd. 3.

Proof of compliance; transfer of duties.

(a) Any county that
conducts county boards of appeal and equalization meetings must provide proof to the
commissioner by December 1, 2009, and each year thereafter, that it is in compliance
with the requirements of subdivision 2. Beginning in 2009, this notice must also verify
that there was a quorum of voting members at each meeting of the board of appeal and
equalization in the current year. A county that does not comply with these requirements
is deemed to have transferred its board of appeal and equalization powers to the special
board of equalization appointed pursuant to section 274.13, subdivision 2, beginning
with the following year's assessment and continuing unless the powers are reinstated
under paragraph (c). A county that does not comply with the requirements of subdivision
2 and has not appointed a special board of equalization shall appoint a special board of
equalization before the following year's assessment.

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

(c) A county board whose powers are transferred to the special board of equalization
under this subdivision may be reinstated by resolution of the county board and upon proof
of compliance with the requirements of subdivision 2. The resolution and proofs must be
provided to the commissioner by December 1 in order to be effective for the following
year's assessment.

new text begin (d) If a person who was entitled to appeal to the county board of appeal and
equalization or to the county special board of equalization is not able to do so in a
particular year because the county board or special board did not meet the quorum and
training requirements in this section and section 274.13, or because the special board
was not appointed, that person may instead appeal to the commissioner of revenue,
provided that the appeal is received by the commissioner prior to August 1. The appeal
is not subject to either chapter 14 or section 270C.92. The commissioner must issue
an appropriate order to the county assessor in response to each timely appeal, either
upholding or changing the valuation or classification of the property. Prior to October 1 of
each year, the commissioner must charge and bill the county where the property is located
$500 for each tax parcel covered by an order issued under this paragraph in that year.
Amounts received by the commissioner under this paragraph must be deposited in the
state's general fund. If payment of a billed amount is not received by the commissioner
before December 1 of the year when billed, the commissioner must deduct that unpaid
amount from any state aid the commissioner would otherwise pay to the county under
chapter 477A in the next year. Late payments may either be returned to the county
uncashed and undeposited or may be accepted. If a late payment is accepted, the state aid
paid to the county under chapter 477A must be adjusted within 12 months to eliminate any
reduction that occurred because the payment was late. Amounts needed to make these
adjustments are included in the appropriation under section 477A.03, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 15.

Minnesota Statutes 2008, section 274.14, is amended to read:

274.14 LENGTH OF SESSION; RECORD.

The board deleted text begin may deleted text end new text begin must new text end meet deleted text begin on any deleted text end new text begin after the second Friday in June on at least one
meeting day and may meet for up to new text end ten consecutive meeting days deleted text begin in June, after the
second Friday in June deleted text end . The actual meeting dates must be contained on the valuation
notices mailed to each property owner in the county as provided in section 273.121. For
this purpose, "meeting days" is defined as any day of the week excluding Sunday. At
the board's discretion, "meeting days" may include Saturday. No action taken by the
county board of review after June 30 is valid, except for corrections permitted in sections
273.01 and 274.01. The county auditor shall keep an accurate record of the proceedings
and orders of the board. The record must be published like other proceedings of county
commissioners. A copy of the published record must be sent to the commissioner of
revenue, with the abstract of assessment required by section 274.16.

For counties that conduct either regular board of review meetings or open book
meetings, at least one of the meeting days must include a meeting that does not end
before 7:00 p.m. For counties that require taxpayer appointments for the board of review,
appointments must include some available times that extend until at least 7:00 p.m. The
county may have a Saturday meeting in lieu of, or in addition to, the extended meeting
times under this paragraph.

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2008, section 274.175, is amended to read:

274.175 VALUES FINALIZED.

The assessments recorded by the county assessor and the county auditor under
sections 273.124, subdivision 9; 274.16; 274.17; or other law for real and personal
property are final on July 1 of the assessment year, except for property added to the
assessment rolls under section 272.02, subdivision 38, new text begin and assessments certified to the
auditor under sections 273.33, subdivision 2, and 273.37, subdivision 2, new text end or deleted
because of tax forfeiture pursuant to chapter 281. No changes in value may be made
after July 1 of the assessment year, except for corrections permitted in sections 273.01
and 274.01 new text begin , or assessments certified to the auditor under sections 273.33, subdivision 2,
and 273.37, subdivision 2 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 17.

Minnesota Statutes 2008, section 275.70, subdivision 5, is amended to read:

Subd. 5.

Special levies.

"Special levies" means those portions of ad valorem taxes
levied by a local governmental unit for the following purposes or in the following manner:

(1) to pay the costs of the principal and interest on bonded indebtedness or to
reimburse for the amount of liquor store revenues used to pay the principal and interest
due on municipal liquor store bonds in the year preceding the year for which the levy
limit is calculated;

(2) to pay the costs of principal and interest on certificates of indebtedness issued for
any corporate purpose except for the following:

(i) tax anticipation or aid anticipation certificates of indebtedness;

(ii) certificates of indebtedness issued under sections 298.28 and 298.282;

(iii) certificates of indebtedness used to fund current expenses or to pay the costs of
extraordinary expenditures that result from a public emergency; or

(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or
an insufficiency in other revenue sources;

(3) to provide for the bonded indebtedness portion of payments made to another
political subdivision of the state of Minnesota;

(4) to fund payments made to the Minnesota State Armory Building Commission
under section 193.145, subdivision 2, to retire the principal and interest on armory
construction bonds;

(5) property taxes approved by voters deleted text begin which are levied against the referendum
market value deleted text end as provided under section 275.61;

(6) to fund matching requirements needed to qualify for federal or state grants or
programs to the extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
exist prior to 2002;

(7) to pay the expenses reasonably and necessarily incurred in preparing for or
repairing the effects of natural disaster including the occurrence or threat of widespread
or severe damage, injury, or loss of life or property resulting from natural causes, in
accordance with standards formulated by the Emergency Services Division of the state
Department of Public Safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2;

(8) pay amounts required to correct an error in the levy certified to the county
auditor by a city or county in a levy year, but only to the extent that when added to the
preceding year's levy it is not in excess of an applicable statutory, special law or charter
limitation, or the limitation imposed on the governmental subdivision by sections 275.70
to 275.74 in the preceding levy year;

(9) to pay an abatement under section 469.1815;

(10) to pay any costs attributable to increases in the employer contribution rates
under chapter 353, or locally administered pension plans, that are effective after June
30, 2001;

(11) to pay the operating or maintenance costs of a county jail as authorized in
section 641.01 or 641.262, or of a correctional facility as defined in section 241.021,
subdivision 1, paragraph (f), to the extent that the county can demonstrate to the
commissioner of revenue that the amount has been included in the county budget as
a direct result of a rule, minimum requirement, minimum standard, or directive of the
Department of Corrections, or to pay the operating or maintenance costs of a regional jail
as authorized in section 641.262. For purposes of this clause, a district court order is
not a rule, minimum requirement, minimum standard, or directive of the Department of
Corrections. If the county utilizes this special levy, except to pay operating or maintenance
costs of a new regional jail facility under sections 641.262 to 641.264 which will not
replace an existing jail facility, any amount levied by the county in the previous levy year
for the purposes specified under this clause and included in the county's previous year's
levy limitation computed under section 275.71, shall be deducted from the levy limit
base under section 275.71, subdivision 2, when determining the county's current year
levy limitation. The county shall provide the necessary information to the commissioner
of revenue for making this determination;

(12) to pay for operation of a lake improvement district, as authorized under section
103B.555 deleted text begin . If the county utilizes this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause and included in the county's
previous year's levy limitation computed under section 275.71 shall be deducted from
the levy limit base under section 275.71, subdivision 2, when determining the county's
current year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination deleted text end ;

(13) to repay a state or federal loan used to fund the direct or indirect required
spending by the local government due to a state or federal transportation project or other
state or federal capital project. This authority may only be used if the project is not a
local government initiative;

deleted text begin (14) to pay for court administration costs as required under section 273.1398,
subdivision 4b, less the (i) county's share of transferred fines and fees collected by the
district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
levied to pay for these costs in the year in which the court financing is transferred to the
state, the amount under this clause is limited to the amount of aid the county is certified to
receive under section 273.1398, subdivision 4a;
deleted text end

deleted text begin (15) deleted text end new text begin (14) new text end to fund a police or firefighters relief association as required under section
69.77 to the extent that the required amount exceeds the amount levied for this purpose
in 2001;

deleted text begin (16) deleted text end new text begin (15) new text end for purposes of a storm sewer improvement district under section 444.20;

deleted text begin (17) deleted text end new text begin (16) new text end to pay for the maintenance and support of a city or county society for the
prevention of cruelty to animals under section 343.11. If the city or county uses this
special levy, any amount levied by the city or county in the previous levy year for the
purposes specified in this clause and included in the city's or county's previous year's levy
limit computed under section 275.71, must be deducted from the levy limit base under
section 275.71, subdivision 2, in determining the city's or county's current year levy limit;

deleted text begin (18) deleted text end new text begin (17) new text end for counties, to pay for the increase in their share of health and human
service costs caused by reductions in federal health and human services grants effective
after September 30, 2007;

deleted text begin (19) deleted text end new text begin (18) new text end for a city, for the costs reasonably and necessarily incurred for securing,
maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by
the commissioner of revenue under section 275.74, subdivision 2. A city must have either
(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in
the city or in a zip code area of the city that is at least 50 percent higher than the average
foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2,
to use this special levy. For purposes of this paragraph, "foreclosure rate" means the
number of foreclosures, as indicated by sheriff sales records, divided by the number of
households in the city in 2007;

deleted text begin (20) deleted text end new text begin (19) new text end for a city, for the unreimbursed costs of redeployed traffic control agents
and lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as
certified to the Federal Highway Administration;

deleted text begin (21) deleted text end new text begin (20) new text end to pay costs attributable to wages and benefits for sheriff, police, and fire
personnel. If a local governmental unit did not use this special levy in the previous year its
levy limit base under section 275.71 shall be reduced by the amount equal to the amount it
levied for the purposes specified in this clause in the previous year; and

deleted text begin (22) deleted text end new text begin (21) new text end an amount equal to any reductions in the certified aids or credits payable
under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under
section 16A.152. The amount of the levy allowed under this clause is equal to the amount
unallotted in the calendar year in which the tax is levied unless the unallotment amount is
not known by September 1 of the levy year, in which case the unallotment amount may
be levied in the following year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 18.

Minnesota Statutes 2008, section 275.71, subdivision 4, is amended to read:

Subd. 4.

Adjusted levy limit base.

For taxes levied in 2008 through 2010, the
adjusted levy limit base is equal to the levy limit base computed under subdivision 2
or section 275.72, multiplied by:

(1) one plus the lesser of 3.9 percent or the percentage growth in the implicit price
deflator;

(2) one plus a percentage equal to 50 percent of the percentage increase in the number
of households, if any, for the most recent 12-month period for which data is available; and

(3) one plus a percentage equal to 50 percent of the percentage increase in the
taxable market value of the jurisdiction due to new construction of class 3 property, as
defined in section 273.13, subdivision deleted text begin 4 deleted text end new text begin 24 new text end , except for state-assessed utility and railroad
property, for the most recent year for which data is available.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 through
2011.
new text end

Sec. 19.

Minnesota Statutes 2008, section 290C.06, is amended to read:

290C.06 CALCULATION OF AVERAGE ESTIMATED MARKET VALUE;
deleted text begin TIMBERLAND deleted text end new text begin MANAGED FOREST LAND new text end .

The commissioner shall annually calculate a statewide average estimated market
value per acre for class deleted text begin 2b timberland deleted text end new text begin 2c managed forest land new text end under section 273.13,
subdivision 23 deleted text begin , paragraph (b) deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for calculations made in 2010 and
thereafter.
new text end

Sec. 20.

Minnesota Statutes 2008, section 290C.07, is amended to read:

290C.07 CALCULATION OF INCENTIVE PAYMENT.

An approved claimant under the sustainable forest incentive program is eligible to
receive an annual payment. The payment shall equal the greater of:

(1) the difference between the property tax that would be paid on the land using the
previous year's statewide average total township tax rate and deleted text begin the deleted text end new text begin a new text end class rate deleted text begin for class 2b
timberland under section 273.13, subdivision 23, paragraph (b) deleted text end new text begin of one percent new text end , if the land
were valued at (i) the average statewide deleted text begin timberland deleted text end new text begin managed forest land new text end market value per
acre calculated under section 290C.06, and (ii) the average statewide deleted text begin timberland deleted text end new text begin managed
forest land new text end current use value per acre calculated under section 290C.02, subdivision 5; or

(2) two-thirds of the property tax amount determined by using the previous
year's statewide average total township tax rate, the estimated market value per acre as
calculated in section 290C.06, and deleted text begin the deleted text end new text begin a new text end class rate deleted text begin for 2b timberland under section 273.13,
subdivision 23, paragraph (b) deleted text end new text begin of one percent new text end , provided that the payment shall be no less
than $7 per acre for each acre enrolled in the sustainable forest incentive program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for calculations made in 2010 and
thereafter.
new text end

Sec. 21.

Minnesota Statutes 2008, section 423A.02, subdivision 1b, is amended to read:

Subd. 1b.

Additional amortization state aid.

(a) Annually, on October 1, the
commissioner of revenue shall allocate the additional amortization state aid transferred
under section 69.021, subdivision 11, to:

(1) all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31;

(2) all local police or salaried firefighter consolidation accounts governed by chapter
353A that are certified by the executive director of the public employees retirement
association as having for the current fiscal year an additional municipal contribution
amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
of the consolidation preceded June 1, 1995; and

(3) the municipalities that are required to make an additional municipal contribution
under section 353.665, subdivision 8, for the duration of the required additional
contribution.

(b) The commissioner shall allocate the state aid on the basis of the proportional share
of the relief association or consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation accounts as of December 31,
1993, for relief associations, and as of June 30, 1994, for consolidation accounts.

(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in subdivision
4, on the following basis:

(1) 64.5 percent to the municipalities to which section 353.665, subdivision
8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
accordance with paragraph (b) and subject to the limitation in subdivision 4;

(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Fire Department Relief Association; and

(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia Fire Department Relief Association.

If there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as disclosed
in the most recent actuarial valuations for the relief associations prepared under sections
356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
in the most recent actuarial valuation for the relief association prepared under sections
356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. Upon the final
payment to municipalities required by section 353.665, subdivision 8, paragraph (b),
or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that 64.5
percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation proposed under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
associated with the police and firefighters pensions, and 40 percent as additional funding to
support minimum fire state aid for volunteer firefighters relief associations. The allocation
must be made by the commissioner at the same time and under the same procedures
as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
Association, annually, beginning on July 1, 2005, if the applicable teacher's association
five-year average time-weighted rate of investment return does not equal or exceed the
performance of a composite portfolio assumed passively managed (indexed) invested ten
percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
allocation to that retirement fund under this section ceases until the five-year annual rate
of investment return equals or exceeds the performance of that composite portfolio.

(d) The amounts required under this subdivision are new text begin the amounts new text end annually
appropriated to the commissioner of revenue new text begin under section 69.021, subdivision 11,
paragraph (e) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for fiscal year 2004, aid
payable in 2003, and thereafter.
new text end

Sec. 22.

Minnesota Statutes 2008, section 423A.02, subdivision 3, is amended to read:

Subd. 3.

Reallocation of amortization or supplementary amortization state
aid.

(a) Seventy percent of the difference between $5,720,000 and the current year
amortization aid deleted text begin or deleted text end new text begin and new text end supplemental amortization aid distributed under subdivisions 1
and 1a that is not distributed for any reason to a municipality for use by a local police
or salaried fire relief association must be distributed by the commissioner of revenue
according to this paragraph. The commissioner shall distribute 70 percent of the amounts
derived under this paragraph to the Teachers Retirement Association and 30 percent to the
St. Paul Teachers Retirement Fund Association to fund the unfunded actuarial accrued
liabilities of the respective funds. These payments shall be made on or before June 30
each fiscal year. deleted text begin The amount required under this paragraph is appropriated annually from
the general fund to the commissioner of revenue. deleted text end If the St. Paul Teachers Retirement Fund
Association becomes fully funded, its eligibility for this aid ceases. Amounts remaining
in the undistributed balance account at the end of the biennium if aid eligibility ceases
cancel to the general fund.

(b) In order to receive amortization and supplementary amortization aid under
paragraph (a), Independent School District No. 625, St. Paul, must make contributions
to the St. Paul Teachers Retirement Fund Association in accordance with the following
schedule:

	Fiscal Year		Amount
	1996	$	0
	1997	$	0
	1998	$	200,000
	1999	$	400,000
	2000	$	600,000
	2001 and thereafter	$	800,000

(c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
each make contributions to the Teachers Retirement Association in accordance with the
following schedule:

	Fiscal Year	City amount			School district amount
	1996	$	0		$	0
	1997	$	0		$	0
	1998	$	250,000		$	250,000
	1999	$	400,000		$	400,000
	2000	$	550,000		$	550,000
	2001	$	700,000		$	700,000
	2002	$	850,000		$	850,000
	2003 and thereafter	$	1,000,000		$	1,000,000

(d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
applicable, must be credited to a separate account in the applicable teachers retirement
fund and may not be used in determining any benefit increases. The separate account
terminates for a fund when the aid payments to the fund under paragraph (a) cease.

(e) Thirty percent of the difference between $5,720,000 and the current year
amortization aid deleted text begin or deleted text end new text begin and new text end supplemental amortization aid under subdivisions 1 and 1a that
is not distributed for any reason to a municipality for use by a local police or salaried
firefighter relief association must be distributed under section 69.021, subdivision 7,
paragraph (d), as additional funding to support a minimum fire state aid amount for
volunteer firefighter relief associations. deleted text begin The amount required under this paragraph is
appropriated annually to the commissioner of revenue. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for fiscal year 2004, aid
payable in 2003, and thereafter.
new text end

Sec. 23.

Minnesota Statutes 2008, section 423A.02, is amended by adding a
subdivision to read:

new text begin Subd. 3a. new text end

new text begin Appropriations for amortization aid, supplementary amortization
state aid, and amortization state aid and supplementary state aid reallocations.
new text end

new text begin $4,720,000 is annually appropriated from the general fund to the commissioner of revenue
for amortization state aid under subdivision 1 and for the reallocation of amortization aid
under subdivision 3. $1,000,000 is annually appropriated from the general fund to the
commissioner of revenue for supplementary amortization state aid under subdivision 1a
and for the reallocation of supplementary amortization state aid under subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for fiscal year 2004, aid
payable in 2003, and thereafter.
new text end

Sec. 24.

Minnesota Statutes 2008, section 477A.011, subdivision 34, is amended to
read:

Subd. 34.

City revenue need.

(a) For a city with a population equal to or greater
than 2,500, "city revenue need" is the new text begin greater of 285 or the new text end sum of (1) 5.0734098 times the
pre-1940 housing percentage; plus (2) 19.141678 times the population decline percentage;
plus (3) 2504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the
metropolitan area factor; minus (6) 49.10638 times the household size.

(b) For a city with a population less than 2,500, "city revenue need" is the sum of
(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
1.206 times the transformed population; minus (5) 62.772.

(c) For a city with a population of 2,500 or more and a population in one of the most
recently available five years that was less than 2,500, "city revenue need" is the sum of (1)
its city revenue need calculated under paragraph (a) multiplied by its transition factor;
plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied
by the difference between one and its transition factor. For purposes of this paragraph, a
city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's
population estimate has been 2,500 or more. This provision only applies for aids payable
in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It
applies to any city for aids payable in 2009 and thereafter. deleted text begin The city revenue need under
this paragraph may not be less than 285.
deleted text end

(d) The city revenue need cannot be less than zero.

(e) For calendar year 2005 and subsequent years, the city revenue need for a city,
as determined in paragraphs (a) to (d), is multiplied by the ratio of the annual implicit
price deflator for government consumption expenditures and gross investment for state
and local governments as prepared by the United States Department of Commerce, for
the most recently available year to the 2003 implicit price deflator for state and local
government purchases.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2009 and
thereafter.
new text end

Sec. 25.

Minnesota Statutes 2008, section 477A.011, subdivision 42, is amended to
read:

Subd. 42.

City jobs base.

(a) "City jobs base" for a city with a population of 5,000 or
more is equal to the product of (1) $25.20, (2) the number of jobs per capita in the city, and
(3) its population. For cities with a population less than 5,000, the city jobs base is equal
to zero. For a city receiving aid under subdivision 36, paragraph deleted text begin (l) deleted text end new text begin (k) new text end , its city jobs base
is reduced by the lesser of 36 percent of the amount of aid received under that paragraph
or $1,000,000. No city's city jobs base may exceed $4,725,000 under this paragraph.

(b) For calendar year 2010 and subsequent years, the city jobs base for a city, as
determined in paragraph (a), is multiplied by the ratio of the appropriation under section
477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under
that section for aids payable in 2009.

(c) For purposes of this subdivision, "jobs per capita in the city" means (1) the
average annual number of employees in the city based on the data from the Quarterly
Census of Employment and Wages, as reported by the Department of Employment and
Economic Development, for the most recent calendar year available as of May 1, 2008,
divided by (2) the city's population for the same calendar year as the employment data.
The commissioner of the Department of Employment and Economic Development shall
certify to the city the average annual number of employees for each city by June 1, 2008.
A city may challenge an estimate under this paragraph by filing its specific objection,
including the names of employers that it feels may have misreported data, in writing with
the commissioner by June 20, 2008. The commissioner shall make every reasonable effort
to address the specific objection and adjust the data as necessary. The commissioner shall
certify the estimates of the annual employment to the commissioner of revenue by July 15,
2008, including any estimates still under objection.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2009 and
thereafter.
new text end

Sec. 26.

Minnesota Statutes 2008, section 477A.013, subdivision 8, is amended to read:

Subd. 8.

City formula aid.

(a) In calendar year 2009, the formula aid for a city
is equal to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need
increase percentage multiplied by its unmet need.

(b) In calendar year 2010 and subsequent years, the formula aid for a city is equal
to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase
percentage multiplied by the average of its unmet need for the most recently available
two years.

No city may have a formula aid amount less than zero. The need increase percentage
must be the same for all cities.

The applicable need increase percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03. For aids payable in 2009 only, all data used in calculating
aid to cities under sections 477A.011 to 477A.013 will be based on the data available for
calculating aid to cities for aids payable in 2008. For aids payable in 2010 and thereafter,
data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be the
most recently available data as of January 1 in the year in which the aid is calculated new text begin
except for the levies used to calculate maximum increases and decreases under section
477A.013, subdivision 9, paragraphs (b), (c), and (d) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 27. new text begin REPEALER.
new text end

new text begin Minnesota Rules, parts 8115.0200; 8115.0300; 8115.0400; 8115.0500; 8115.0600;
8115.1000; 8115.1100; 8115.1200; 8115.1300; 8115.1400; 8115.1500; 8115.1600;
8115.1700; 8115.1800; 8115.1900; 8115.2000; 8115.2100; 8115.2200; 8115.2300;
8115.2400; 8115.2500; 8115.2600; 8115.2700; 8115.2800; 8115.2900; 8115.3000;
8115.4000; 8115.4100; 8115.4200; 8115.4300; 8115.4400; 8115.4500; 8115.4600;
8115.4700; 8115.4800; 8115.4900; 8115.5000; 8115.5100; 8115.5200; 8115.5300;
8115.5400; 8115.5500; 8115.5600; 8115.5700; 8115.5800; 8115.5900; 8115.6000;
8115.6100; 8115.6200; 8115.6300; 8115.6400; and 8115.9900; 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 5

MISCELLANEOUS

Section 1.

Minnesota Statutes 2008, section 270B.14, subdivision 16, is amended to
read:

Subd. 16.

Disclosure to law enforcement authorities.

Under circumstances
involving threat of death or physical injury to new text begin , or harassment of, new text end any individual, the
commissioner may disclose return information to the extent necessary to apprise
appropriate federal, state, or local law enforcement authorities of such circumstances.
new text begin For purposes of this subdivision, "harassment" is purposeful conduct directed at an
individual and causing an individual to feel frightened, threatened, oppressed, persecuted,
or intimidated. new text end Data disclosed under this subdivision are classified under section 13.82
once they are received by the law enforcement authority.

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 2008, section 270C.12, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Duration. new text end

new text begin Notwithstanding the provisions of any statutes to the contrary,
including section 15.059, the coordinating committee as established by this section to
oversee and coordinate preparation of the microdata samples of income tax returns and
other information does not expire.
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.

Minnesota Statutes 2008, section 270C.446, subdivision 2, is amended to read:

Subd. 2.

Required and excluded tax preparers.

(a) Subject to the limitations of
paragraph (b), the commissioner must publish lists of tax preparers as defined in section
289A.60, subdivision 13, paragraph (f), who have been convicted under section 289A.63
new text begin for returns or claims prepared as a tax preparer new text end or assessed penalties in excess of $1,000
under section 289A.60, subdivision 13, paragraph (a).

(b) For the purposes of this section, tax preparers are not subject to publication if:

(1) an administrative or court action contesting the penalty has been filed or served
and is unresolved at the time when notice would be given under subdivision 3;

(2) an appeal period to contest the penalty has not expired; or

(3) the commissioner has been notified that the tax preparer is deceased.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2008, section 270C.446, subdivision 5, is amended to read:

Subd. 5.

Removal from list.

The commissioner shall remove the name of a tax
preparer from the list of tax preparers published under this section:

(1) when the commissioner determines that the name was included on the list in error;

(2) within 90 days after the preparer has new text begin demonstrated to the commissioner that
the preparer new text end fully paid all fines imposed, served any suspension, new text begin satisfied any sentence
imposed, new text end and deleted text begin demonstrated to the satisfaction of the commissioner that the preparer has deleted text end
successfully completed any remedial actions required by the commissioner, the State
Board of Accountancy, or the Lawyers Board of Professional Responsibility; or

(3) when the commissioner has been notified that the tax preparer is deceased.

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.

Minnesota Statutes 2008, section 270C.56, subdivision 1, is amended to read:

Subdivision 1.

Liability imposed.

A person who, either singly or jointly with
others, has the control of, supervision of, or responsibility for filing returns or reports,
paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
person who is liable under any other law, is liable for the payment of taxes deleted text begin , penalties, and
interest deleted text end arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658,
290.92, and 297E.02, and deleted text begin , for the taxes listed in this subdivision, deleted text end the applicable penalties
deleted text begin for nonpayment under section 289A.60 deleted text end new text begin and interest on those taxes 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. 6.

Minnesota Statutes 2008, section 289A.41, is amended to read:

289A.41 BANKRUPTCY; SUSPENSION OF TIME.

The running of the period during which a tax must be assessed or collection
proceedings commenced is suspended during the period from the date of a filing of a
petition in bankruptcy until 30 days after either notice to the commissioner of revenue that
the bankruptcy proceedings have been closed or dismissed, or new text begin notice that new text end the automatic
stay has been terminated or has expired, whichever occurs first.

The suspension of the statute of limitations under this section applies to the person
the petition in bankruptcy is filed against and other persons who may also be wholly or
partially liable for the tax.

new text begin EFFECTIVE DATE. new text end

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