HF 2107

as introduced - 88th Legislature (2013 - 2014) Posted on 02/25/2014 03:08pm

A bill for an act
relating to taxation; eliminating obsolete provisions; making clarifying and minor
policy changes; amending Minnesota Statutes 2012, sections 84A.20, subdivision
2; 84A.31, subdivision 2; 127A.48, subdivision 8; 163.06, subdivision 1;
270B.14, subdivision 3; 272.027, subdivision 1; 272.029, subdivision 6; 279.03,
subdivisions 1, 1a, 2; 282.261, subdivision 2; 290.01, subdivisions 5, 29;
290.0922, subdivision 3; 290.191, subdivisions 2, 3; 297I.05, subdivision 14;
298.293; 298.75, subdivision 1, by adding a subdivision; 469.176, subdivisions
1b, 3; 473.665, subdivision 5; Minnesota Statutes 2013 Supplement, sections
273.032; 273.13, subdivision 23; 273.1398, subdivision 3; 275.70, subdivision 5;
279.37, subdivision 2; 290.0921, subdivision 3; 297A.75, subdivisions 1, 2, 3;
298.223, subdivision 1; 465.04; 469.1763, subdivision 2; repealing Minnesota
Statutes 2012, sections 127A.48, subdivision 7; 272.02, subdivisions 43, 48, 51,
53, 67, 72, 82; 272.027, subdivision 2; 273.075; 273.1115; 273.1383; 273.1386;
273.1398, subdivision 4b; 273.80; 275.77; 279.32; 281.328; 282.10; 282.23;
289A.56, subdivision 7; 290.06, subdivisions 27, 30, 31; 290.191, subdivision
4; 290C.06; 291.41; 291.42; 291.43; 291.44; 291.45; 291.46; 291.47; 297A.68,
subdivision 38; 297A.69, subdivision 7; 297A.70, subdivision 9; 297A.71,
subdivisions 4, 5, 7, 9, 10, 17, 18, 20, 32, 41; 298.2961, subdivision 7; 298.75,
subdivisions 9, 11; 469.174, subdivision 10c; 469.175, subdivision 2b; 469.176,
subdivision 1i; 469.1764; 469.177, subdivision 10; 469.330; 469.331; 469.332;
469.333; 469.334; 469.335; 469.336; 469.337; 469.338; 469.339; 469.340,
subdivisions 1, 2, 3, 5; 469.341; 477A.0124, subdivisions 1, 6; 505.173;
Minnesota Statutes 2013 Supplement, sections 273.1103; 298.2961, subdivision
5; Laws 1993, chapter 375, article 9, section 47.

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

Section 1.

Minnesota Statutes 2012, section 84A.20, subdivision 2, is amended to read:

Subd. 2.

County proposal to state.

deleted text begin Under certain conditions, deleted text end The board of county
commissioners of any county may by resolution propose to the state that one or more
areas in the county be taken over by the state for afforestation, reforestation, flood control
projects, or other state purposes. The projects are to be managed, controlled, and used for
the purposes in subdivision 1 on lands to be acquired by the state within the projects, as set
forth in sections 84A.20 to 84A.30. The county board may propose this if deleted text begin (1) deleted text end the county
contains lands suitable for the purposes in subdivision 1 deleted text begin , (2) on January 1, 1931, the taxes
on more than 35 percent of the taxable land in the county are delinquent, (3) on January 1,
1931, the county's bonded ditch indebtedness, including accrued interest, equals or exceeds
nine percent of the assessed valuation of the county, exclusive of money and credits deleted text end .

The area taken over must include lands that have been assessed for all or part of
the cost of the establishment and construction of public drainage ditches under state law,
and on which the assessments or installments are delinquent. A certified copy of the
county board's resolution must be filed with the department and considered and acted
upon by the department. If approved by the department, it must then be submitted to,
considered, and acted upon by the executive council. If approved by the Executive
Council, the proposition must be formally accepted by the governor. Acceptance must be
communicated in writing to and filed with the county auditor.

Sec. 2.

Minnesota Statutes 2012, section 84A.31, subdivision 2, is amended to read:

Subd. 2.

County proposal to state.

deleted text begin Under certain conditions, deleted text end The board of county
commissioners of any county may by resolution propose that the state take over part of the
tax-delinquent lands in the county deleted text begin . The board may propose this deleted text end new text begin , new text end if deleted text begin :
deleted text end

deleted text begin (1) deleted text end the county contains land suitable for the purposes in subdivision 1 deleted text begin ;
deleted text end

deleted text begin (2) on January 1, 1933, the taxes on more than 25 percent of the acreage of the lands
in a town in the county are delinquent, as shown by its tax books;
deleted text end

deleted text begin (3) on January 1, 1933, the taxes or ditch assessments on more than 50 percent of the
acreage of the lands to be taken over are delinquent, as shown by the county's tax books; and
deleted text end

deleted text begin (4) on January 1, 1933, the bonded ditch indebtedness of the county equals or
exceeds 15 percent of the assessed value of the county for 1932 as fixed by the Minnesota
Tax Commission, exclusive of money and credits deleted text end .

Sec. 3.

Minnesota Statutes 2012, section 127A.48, subdivision 8, is amended to read:

Subd. 8.

Decrease in iron ore net tax capacity.

If in any year the net tax capacity
of iron ore property, as defined in section 273.13, subdivision 31, in any district is less than
the net tax capacity of such property in the preceding year, the commissioner of revenue
shall redetermine for all purposes the adjusted net tax capacity of the preceding year
taking into account only the decrease in net tax capacity of iron ore property as defined in
section 273.13, subdivision 31. deleted text begin If subdivision 7, clause (1), is applicable to the district, the
decrease in iron ore property shall be applied to the adjusted net tax capacity as limited
therein. In all other respects, the provisions of clause (1) shall apply.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for taxes payable in 2015.
new text end

Sec. 4.

Minnesota Statutes 2012, section 163.06, subdivision 1, is amended to read:

Subdivision 1.

Levy.

The county board of any county in which there are unorganized
townships may levy a tax for road and bridge purposes upon all the real and personal
property in such unorganized townships deleted text begin , exclusive of money and credits taxed under the
provisions of chapter 285 deleted text end .

Sec. 5.

Minnesota Statutes 2012, section 270B.14, subdivision 3, is amended to read:

Subd. 3.

Administration of enterprise deleted text begin , deleted text end new text begin and new text end job opportunity deleted text begin , and biotechnology
and health sciences industry deleted text end zone programs.

The commissioner may disclose return
information relating to the taxes imposed by chapters 290 and 297A to the Department of
Employment and Economic Development or a municipality with a border city enterprise
zone as defined under section 469.166, but only as necessary to administer the funding
limitations under section 469.169, or to the Department of Employment and Economic
Development and appropriate officials from the local government units in which a
qualified business is located but only as necessary to enforce the job opportunity building
zone benefits under section 469.315 deleted text begin , or biotechnology and health sciences industry zone
benefits under section 469.336 deleted text end .

Sec. 6.

Minnesota Statutes 2012, section 272.027, subdivision 1, is amended to read:

Subdivision 1.

Electricity generated to produce goods and services.

Personal
property used to generate electric power is exempt from property taxation if the electric
power is used to manufacture or produce goods, products, or services, other than electric
power, by the owner of the electric generation plant. deleted text begin Except as provided in subdivisions 2
and 3, deleted text end The exemption does not apply to property used to produce electric power for sale
to others and does not apply to real property. In determining the value subject to tax,
a proportionate share of the value of the generating facilities, equal to the proportion
that the power sold to others bears to the total generation of the plant, is subject to the
general property tax in the same manner as other property. Power generated in such a
plant and exchanged for an equivalent amount of power that is used for the manufacture or
production of goods, products, or services other than electric power by the owner of the
generating plant is considered to be used by the owner of the plant.

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 2012, section 272.029, subdivision 6, is amended to read:

Subd. 6.

Distribution of revenues.

Revenues from the taxes imposed under
subdivision 5 must be part of the settlement between the county treasurer and the county
auditor under section 276.09. The revenue must be distributed by the county auditor or the
county treasurer to local taxing jurisdictions in which the wind energy conversion system
is located as follows: deleted text begin beginning with distributions in 2010, deleted text end 80 percent to counties deleted text begin ; deleted text end and 20
percent to cities and townships deleted text begin ; and for distributions occurring in 2006 to 2009, 80 percent
to counties; 14 percent to cities and townships; and six percent to school districts deleted text end .

Sec. 8.

Minnesota Statutes 2013 Supplement, section 273.032, is amended to read:

273.032 MARKET VALUE DEFINITION.

(a) Unless otherwise provided, for the purpose of determining any property tax
levy limitation based on market value or any limit on net debt, the issuance of bonds,
certificates of indebtedness, or capital notes based on market value, any qualification to
receive state aid based on market value, or any state aid amount based on market value,
the terms "market value," "estimated market value," and "market valuation," whether
equalized or unequalized, mean the estimated market value of taxable property within the
local unit of government before any of the following or similar adjustments for:

(1) the market value exclusions under:

(i) section 273.11, subdivisions 14a and 14c (vacant platted land);

(ii) section 273.11, subdivision 16 (certain improvements to homestead property);

(iii) section 273.11, subdivisions 19 and 20 (certain improvements to business
properties);

(iv) section 273.11, subdivision 21 (homestead property damaged by mold);

(v) section 273.11, subdivision 22 (qualifying lead hazardous reduction projects);

(vi) section 273.13, subdivision 34 (homestead of a disabled veteran or family
caregiver);

(vii) section 273.13, subdivision 35 (homestead market value exclusion); or

(2) the deferment of value under:

(i) the Minnesota Agricultural Property Tax Law, section 273.111;

deleted text begin (ii) the Aggregate Resource Preservation Law, section 273.1115;
deleted text end

deleted text begin (iii) deleted text end new text begin (ii) new text end the Minnesota Open Space Property Tax Law, section 273.112;

deleted text begin (iv) deleted text end new text begin (iii) new text end the rural preserves property tax program, section 273.114; or

deleted text begin (v) deleted text end new text begin (iv) new text end the Metropolitan Agricultural Preserves Act, section 473H.10; or

(3) the adjustments to tax capacity for:

(i) tax increment financing under sections 469.174 to 469.1794;

(ii) fiscal disparities under chapter 276A or 473F; or

(iii) powerline credit under section 273.425.

(b) Estimated market value under paragraph (a) also includes the market value
of tax-exempt property if the applicable law specifically provides that the limitation,
qualification, or aid calculation includes tax-exempt property.

(c) Unless otherwise provided, "market value," "estimated market value," and
"market valuation" for purposes of property tax levy limitations and calculation of state
aid, refer to the estimated market value for the previous assessment year and for purposes
of limits on net debt, the issuance of bonds, certificates of indebtedness, or capital notes
refer to the estimated market value as last finally equalized.

(d) For purposes of a provision of a home rule charter or of any special law that is not
codified in the statutes and that imposes a levy limitation based on market value or any limit
on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

Sec. 9.

Minnesota Statutes 2013 Supplement, 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 must also include any property that would otherwise be classified as 2b, but is
interspersed with class 2a property, including but not limited to sloughs, wooded wind
shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
and other similar land that is impractical for the assessor to value separately from the rest of
the property or that is unlikely to be able to be sold separately from the rest of the property.

An assessor may classify the part of a parcel described in this subdivision that is used
for agricultural purposes as class 2a and the remainder in the class appropriate to its use.

(c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
that are unplatted real estate, rural in character and not used for agricultural purposes,
including land used for growing trees for timber, lumber, and wood and wood products,
that is not improved with a structure. The presence of a minor, ancillary nonresidential
structure as defined by the commissioner of revenue does not disqualify the property from
classification under this paragraph. Any parcel of 20 acres or more improved with a
structure that is not a minor, ancillary nonresidential structure must be split-classified, and
ten acres must be assigned to the split parcel containing the structure. Class 2b property
has a 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 in order for the property to initially
qualify for the reduced rate and provide the information required by the assessor to verify
that the property qualifies for the reduced rate. If the assessor receives the application
and information before May 1 in an assessment year, the property qualifies beginning
with that assessment year. If the assessor receives the application and information after
April 30 in an assessment year, the property may not qualify until the next assessment
year. The commissioner of natural resources must concur that the land is qualified. The
commissioner of natural resources shall annually provide county assessors verification
information on a timely basis. The presence of a minor, ancillary nonresidential structure
as defined by the commissioner of revenue does not disqualify the property from
classification under this paragraph.

(e) Agricultural land as used in this section means:

(1) contiguous acreage of ten acres or more, used during the preceding year for
agricultural purposes; or

(2) contiguous acreage used during the preceding year for an intensive livestock or
poultry confinement operation, provided that land used only for pasturing or grazing
does not qualify under this clause.

"Agricultural purposes" as used in this section means the raising, cultivation, drying,
or storage of agricultural products for sale, or the storage of machinery or equipment
used in support of agricultural production by the same farm entity. For a property to be
classified as agricultural based only on the drying or storage of agricultural products,
the products being dried or stored must have been produced by the same farm entity as
the entity operating the drying or storage facility. "Agricultural purposes" also includes
enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535
or the federal Conservation Reserve Program as contained in Public Law 99-198 or a
similar state or federal conservation program if the property was classified as agricultural
(i) under this subdivision for taxes payable in 2003 because of its enrollment in a
qualifying program and the land remains enrolled or (ii) in the year prior to its enrollment.
Agricultural classification shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same ownership.

"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
of, a set of contiguous tax parcels under that section that are owned by the same person.

(f) Agricultural land under this section also includes:

(1) contiguous acreage that is less than ten acres in size and exclusively used in the
preceding year for raising or cultivating agricultural products; or

(2) contiguous acreage that contains a residence and is less than 11 acres in size, if
the contiguous acreage exclusive of the house, garage, and surrounding one acre of land
was used in the preceding year for one or more of the following three uses:

(i) for an intensive grain drying or storage operation, or for intensive machinery or
equipment storage activities used to support agricultural activities on other parcels of
property operated by the same farming entity;

(ii) as a nursery, provided that only those acres used intensively to produce nursery
stock are considered agricultural land; or

(iii) for intensive market farming; for purposes of this paragraph, "market farming"
means the cultivation of one or more fruits or vegetables or production of animal or other
agricultural products for sale to local markets by the farmer or an organization with which
the farmer is affiliated.

"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
described in section 272.193, or all of a set of contiguous tax parcels under that section
that are owned by the same person.

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

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

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

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

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

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

(3) the commercial boarding of horses, which may include related horse training and
riding instruction, if the boarding is done on property that is also used for raising pasture
to graze horses or raising or cultivating other agricultural products as defined in clause (1);

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

(5) game birds and waterfowl bred and raised (i) on a game farm licensed under
section 97A.105, provided that the annual licensing report to the Department of Natural
Resources, which must be submitted annually by March 30 to the assessor, indicates
that at least 500 birds were raised or used for breeding stock on the property during the
preceding year and that the owner provides a copy of the owner's most recent schedule F;
or (ii) for use on a shooting preserve licensed under section 97A.115;

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

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

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

(l) Class 2d airport landing area consists of a landing area or public access area of
a privately owned public use airport. It has a 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 (m) Class 2e consists of land with a commercial aggregate deposit that is not actively
being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
located in a county that has elected to opt-out of the aggregate preservation program as
provided in section 273.1115, subdivision 6. It has a 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:
deleted text end

deleted text begin (1) a legal description of the property;
deleted text end

deleted text begin (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;
deleted text end

deleted text begin (3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and
deleted text end

deleted text begin (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.
deleted text end

deleted text begin 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 end

deleted text begin (n) When any portion of the property under this subdivision or subdivision 22 begins
to be actively mined, the owner must file a supplemental affidavit within 60 days from
the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section 273.1115, if the
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.
deleted text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for taxes payable in 2015.
new text end

Sec. 10.

Minnesota Statutes 2013 Supplement, section 273.1398, subdivision 3,
is amended to read:

Subd. 3.

Disparity reduction aid.

The amount of disparity aid certified for each
taxing district within each unique taxing jurisdiction new text begin is the amount certified new text end for taxes
payable in the prior year deleted text begin shall be multiplied by the ratio of (1) the jurisdiction's tax
capacity using the class rates for taxes payable in the year for which aid is being computed,
to (2) its tax capacity using the class rates for taxes payable in the year prior to that for
which aid is being computed, both based upon taxable market values for taxes payable in
the year prior to that for which aid is being computed. If the commissioner determines
that insufficient information is available to reasonably and timely calculate the numerator
in this ratio for the first taxes payable year that a class rate change or new class rate is
effective, the commissioner shall omit the effects of that class rate change or new class
rate when calculating this ratio for aid payable in that taxes payable year. For aid payable
in the year following a year for which such omission was made, the commissioner shall
use in the denominator for the class that was changed or created, the tax capacity for taxes
payable two years prior to that in which the aid is payable, based on taxable market values
for taxes payable in the year prior to that for which aid is being computed deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for taxes payable in 2015.
new text end

Sec. 11.

Minnesota Statutes 2013 Supplement, 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, provided that nothing in this subdivision limits the
special levy authorized under section 475.755;

(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 which are levied against the referendum
market value 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;

deleted text begin (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;
deleted text end

deleted text begin (11) deleted text end new text begin (10) new text end 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;

deleted text begin (12) to pay for operation of a lake improvement district, as authorized under section
103B.555. 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
deleted text end deleted text begin current year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination;
deleted text end

deleted text begin (13) deleted text end new text begin (11) new text end 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 (12) new text end to fund a firefighters relief association as required under Laws 2013,
chapter 111, article 5, sections 31 to 42, to the extent that the required amount exceeds the
amount levied for this purpose in deleted text begin 2001 deleted text end new text begin the previous year new text end ;

deleted text begin (16) deleted text end new text begin (13) new text end for purposes of a storm sewer improvement district under section 444.20;

deleted text begin (17) to pay for the maintenance and support of a city or county society for the
prevention of cruelty to animals under section 343.11, but not to exceed in any year
$4,800 or the sum of $1 per capita based on the county's or city's population as of the most
recent federal census, whichever is greater. 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 end

deleted text begin (18) deleted text end new text begin (14) 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 (15) 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) 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 end

deleted text begin (21) deleted text end new text begin (16) 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;

deleted text begin (22) deleted text end new text begin (17) new text end an amount equal to any reductions in the certified aids or credit
reimbursements payable under sections 477A.011 to 477A.014, and section 273.1384,
due to unallotment under section 16A.152 or reductions under another provision of law.
The amount of the levy allowed under this clause for each year is limited to the amount
unallotted or reduced from the aids and credit reimbursements certified for payment in the
year following the calendar year in which the tax levy is certified unless the unallotment
or reduction amount is not known by September 1 of the levy certification year, and
the local government has not adjusted its levy under section 275.065, subdivision 6, or
275.07, subdivision 6, in which case that unallotment or reduction amount may be levied
in the following year;

deleted text begin (23) deleted text end new text begin (18) new text end to pay for the difference between one-half of the costs of confining sex
offenders undergoing the civil commitment process and any state payments for this
purpose pursuant to section 253D.12; new text begin and
new text end

deleted text begin (24) deleted text end new text begin (19) new text end for a county to pay the costs of the first year of maintaining and operating
a new facility or new expansion, either of which contains courts, corrections, dispatch,
criminal investigation labs, or other public safety facilities and for which all or a portion
of the funding for the site acquisition, building design, site preparation, construction, and
related equipment was issued or authorized prior to the imposition of levy limits deleted text begin in 2008 deleted text end .
The levy limit base shall then be increased by an amount equal to the new facility's first
full year's operating costs as described in this clause deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (25) for the estimated amount of reduction to market value credit reimbursements
under section 273.1384 for credits payable in the year in which the levy is payable.
deleted text end

Sec. 12.

Minnesota Statutes 2012, section 279.03, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Rate deleted text end new text begin Interest calculation new text end .

deleted text begin The rate of interest on delinquent
property taxes levied in 1979 and prior years is fixed at six percent per year until January
1, 1983. Thereafter interest is payable at the rate determined pursuant to section 549.09.
The rate of interest on delinquent property taxes levied in 1980 and subsequent years is
the rate determined pursuant to section 549.09. All provisions of law except section
549.09 providing for the calculation of interest at any different rate on delinquent taxes in
any notice or proceeding in connection with the payment, collection, sale, or assignment
of delinquent taxes, or redemption from such sale or assignment are hereby amended
to correspond herewith. deleted text end Section 549.09 deleted text begin shall continue in force deleted text end new text begin applies new text end with respect to
new text begin determining the interest on new text end judgments arising out of petitions for review filed pursuant to
chapter 278 deleted text begin irrespective of the levy year deleted text end .

deleted text begin For property taxes levied in 1980 and prior years, interest is to be calculated at
simple interest from the second Monday in May following the year in which the taxes
become due until the time that the taxes and penalties are paid, computed on the amount
of unpaid taxes, penalties and costs. For property taxes levied in 1981 and subsequent
years, deleted text end Interest shall commence on the first day of January following the year in which the
taxes become due, but the county treasurer need not calculate interest on unpaid taxes and
penalties on the tax list returned to the county auditor pursuant to section 279.01.

If interest is payable for a portion of a year, the interest is calculated only for the
months that the taxes or penalties remain unpaid, and for this purpose a portion of a month
is deemed to be a whole month.

Sec. 13.

Minnesota Statutes 2012, section 279.03, subdivision 1a, is amended to read:

Subd. 1a.

Rate deleted text begin after December 31, 1990 deleted text end .

(a) Except as provided in paragraph (b),
interest on delinquent property taxes, penalties, and costs unpaid deleted text begin on or after January 1,
1991, shall be deleted text end new text begin is new text end payable at the per annum rate determined in section 270C.40, subdivision
5. If the rate so determined is less than ten percent, the rate of interest deleted text begin shall be deleted text end new text begin is new text end ten
percent. The maximum per annum rate deleted text begin shall be deleted text end new text begin is new text end 14 percent if the rate specified under
section 270C.40, subdivision 5, exceeds 14 percent. The rate deleted text begin shall be deleted text end new text begin is new text end subject to change
on January 1 of each year.

(b) If a person is the owner of one or more parcels of property on which taxes are
delinquent, and the delinquent taxes are more than 25 percent of the prior year's school
district levy, interest on the delinquent property taxes, penalties, and costs unpaid deleted text begin after
January 1, 1992, shall be deleted text end new text begin is new text end payable at twice the rate determined under paragraph (a) for
the year.

Sec. 14.

Minnesota Statutes 2012, section 279.03, subdivision 2, is amended to read:

Subd. 2.

Composite judgment.

Amounts included in composite judgments
authorized by section 279.37, subdivision 1, and confessed deleted text begin on or after July 1, 1982, are
subject to interest at the rate determined pursuant to section 549.09. Amounts confessed
deleted text end under this authority deleted text begin after December 31, 1990, deleted text end are subject to interest at the rate calculated
under subdivision 1a. During each calendar year, interest deleted text begin shall accrue deleted text end new text begin accrues new text end on the
unpaid balance of the composite judgment from the time it is confessed until it is paid.
The rate of interest is subject to change each year in the same manner deleted text begin that section 549.09
or deleted text end new text begin as provided in new text end subdivision 1a deleted text begin , whichever is applicable, for rate changes. Interest on the
unpaid contract balance on judgments confessed before July 1, 1982, is payable at the rate
applicable to the judgment at the time that it was confessed deleted text end .

Sec. 15.

Minnesota Statutes 2013 Supplement, section 279.37, subdivision 2, is
amended to read:

Subd. 2.

Installment payments.

The owner of any such parcel, or any person to
whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
make and file with the county auditor of the county in which the parcel is located a written
offer to pay the current taxes each year before they become delinquent, or to contest the
taxes under deleted text begin Minnesota Statutes 1941, sections 278.01 to 278.13 deleted text end new text begin chapter 278 new text end , and agree
to confess judgment for the amount provided, as determined by the county auditor. By
filing the offer, the owner waives all irregularities in connection with the tax proceedings
affecting the parcel and any defense or objection which the owner may have to the
proceedings, and also waives the requirements of any notice of default in the payment of
any installment or interest to become due pursuant to the composite judgment to be so
entered. Unless the property is subject to subdivision 1a, with the offer, the owner shall (i)
tender one-tenth of the amount of the delinquent taxes, costs, penalty, and interest, and
(ii) tender all current year taxes and penalty due at the time the confession of judgment is
entered. In the offer, the owner shall agree to pay the balance in nine equal installments,
with interest as provided in section 279.03, payable annually on installments remaining
unpaid from time to time, on or before December 31 of each year following the year in
which judgment was confessed. The offer must be substantially as follows:

"To the court administrator of the district court of ........... county, I, .....................,
am the owner of the following described parcel of real estate located in ....................
county, Minnesota:

.............................. Upon that real estate there are delinquent taxes for the year ........., and
prior years, as follows: (here insert year of delinquency and the total amount of delinquent
taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in
the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and
any defense or objection which I may have to them, and direct judgment to be entered for
the amount stated above, minus the sum of $............, to be paid with this document, which
is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and interest stated above.
I agree to pay the balance of the judgment in nine or four equal, annual installments, with
interest as provided in section 279.03, payable annually, on the installments remaining
unpaid. I agree to pay the installments and interest on or before December 31 of each year
following the year in which this judgment is confessed and current taxes each year before
they become delinquent, or within 30 days after the entry of final judgment in proceedings
to contest the taxes under deleted text begin Minnesota Statutes, sections 278.01 to 278.13 deleted text end new text begin chapter 278 new text end .

Dated .............., ......."

Sec. 16.

Minnesota Statutes 2012, section 282.261, subdivision 2, is amended to read:

Subd. 2.

Interest rate.

The unpaid balance on any repurchase contract approved
by the county board deleted text begin on or after July 1, 1982, deleted text end is subject to interest at the rate determined
deleted text begin pursuant to section 549.09. Repurchase contracts approved after December 31, 1990, are
subject to interest at the rate determined deleted text end in section 279.03, subdivision 1a. The interest
rate is subject to change each year on the unpaid balance in the manner provided for rate
changes in section deleted text begin 549.09 or deleted text end 279.03, subdivision 1a deleted text begin , whichever is applicable. Interest on
the unpaid contract balance on repurchases approved before July 1, 1982, is payable at the
rate applicable to the repurchase contract at the time that it was approved deleted text end .

Sec. 17.

Minnesota Statutes 2012, section 290.01, subdivision 5, is amended to read:

Subd. 5.

Domestic corporation.

The term "domestic" when applied to a corporation
means a corporation:

(1) created or organized in the United States, or under the laws of the United
States or of any state, the District of Columbia, or any political subdivision of any of
the foregoing but not including the Commonwealth of Puerto Rico, or any possession
of the United States; new text begin or
new text end

(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
Code deleted text begin ; or deleted text end new text begin .
new text end

deleted text begin (3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 18.

Minnesota Statutes 2012, section 290.01, subdivision 29, is amended to read:

Subd. 29.

Taxable income.

The term "taxable income" means:

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

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095;

(ii) the dividends received deduction under section 290.21, subdivision 4; new text begin and
new text end

(iii) the exemption for operating in a job opportunity building zone under section
469.317 deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (iv) the exemption for operating in a biotechnology and health sciences industry
zone under section 469.337.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 19.

Minnesota Statutes 2013 Supplement, section 290.0921, subdivision 3,
is amended to read:

Subd. 3.

Alternative minimum taxable income.

"Alternative minimum taxable
income" is Minnesota net income as defined in section 290.01, subdivision 19, and
includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
Minnesota tax return, the minimum tax must be computed on a separate company basis.
If a corporation is part of a tax group filing a unitary return, the minimum tax must be
computed on a unitary basis. The following adjustments must be made.

(1) For purposes of the depreciation adjustments under section 56(a)(1) and
56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
income tax purposes, including any modification made in a taxable year under section
290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c).

For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
allowance in the first taxable year after December 31, 2000.

(2) The portion of the depreciation deduction allowed for federal income tax
purposes under section 168(k) of the Internal Revenue Code that is required as an
addition under section 290.01, subdivision 19c, clause (12), is disallowed in determining
alternative minimum taxable income.

(3) The subtraction for depreciation allowed under section 290.01, subdivision 19d,
clause (15), is allowed as a depreciation deduction in determining alternative minimum
taxable income.

(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
of the Internal Revenue Code does not apply.

(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
Revenue Code does not apply.

(6) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
Code does not apply.

(7) The tax preference for intangible drilling costs under section 57(a)(2) of the
Internal Revenue Code must be calculated without regard to subparagraph (E) and the
subtraction under section 290.01, subdivision 19d, clause (4).

(8) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
Revenue Code does not apply.

(9) The tax preference for charitable contributions of appreciated property under
section 57(a)(6) of the Internal Revenue Code does not apply.

(10) For purposes of calculating the tax preference for accelerated depreciation or
amortization on certain property placed in service before January 1, 1987, under section
57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
deduction allowed under section 290.01, subdivision 19e.

For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, not previously deducted is a
depreciation or amortization allowance in the first taxable year after December 31, 2004.

(11) For purposes of calculating the adjustment for adjusted current earnings in
section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
minimum taxable income as defined in this subdivision, determined without regard to the
adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.

(12) For purposes of determining the amount of adjusted current earnings under
section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), or (ii) the
amount of refunds of income, excise, or franchise taxes subtracted as provided in section
290.01, subdivision 19d, clause (9).

(13) Alternative minimum taxable income excludes the income from operating in a
job opportunity building zone as provided under section 469.317.

deleted text begin (14) Alternative minimum taxable income excludes the income from operating in a
biotechnology and health sciences industry zone as provided under section 469.337.
deleted text end

Items of tax preference must not be reduced below zero as a result of the
modifications in this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 20.

Minnesota Statutes 2012, section 290.0922, subdivision 3, is amended to read:

Subd. 3.

Definitions.

(a) "Minnesota sales or receipts" means the total sales
apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts
attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the
total sales or receipts apportioned or attributed to Minnesota pursuant to any other
apportionment formula applicable to the taxpayer.

(b) "Minnesota property" means total Minnesota tangible property as provided in
section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
but does not include deleted text begin : (1) deleted text end the property of a qualified business as defined under section
469.310, subdivision 11, that is located in a job opportunity building zone designated
under section 469.314 deleted text begin and (2) property of a qualified business located in a biotechnology
and health sciences industry zone designated under section 469.334 deleted text end . Intangible property
shall not be included in Minnesota property for purposes of this section. Taxpayers who
do not utilize tangible property to apportion income shall nevertheless include Minnesota
property for purposes of this section. On a return for a short taxable year, the amount of
Minnesota property owned, as determined under section 290.191, shall be included in
Minnesota property based on a fraction in which the numerator is the number of days in
the short taxable year and the denominator is 365.

(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
290.191, subdivision 12, but does not include deleted text begin : (1) deleted text end the job opportunity building zone payroll
under section 469.310, subdivision 8, of a qualified business as defined under section
469.310, subdivision 11 deleted text begin , and (2) biotechnology and health sciences industry zone payrolls
under section 469.330, subdivision 8 deleted text end . Taxpayers who do not utilize payrolls to apportion
income shall nevertheless include Minnesota payrolls for purposes of this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 21.

Minnesota Statutes 2012, section 290.191, subdivision 2, is amended to read:

Subd. 2.

Apportionment formula of general application.

deleted text begin (a) deleted text end Except for those
trades or businesses required to use a different formula under subdivision 3 or section
290.36, and for those trades or businesses that receive permission to use some other
method under section 290.20 or under subdivision 4, a trade or business required to
apportion its net income must apportion its income to this state on the basis of the
percentage deleted text begin obtained by taking the sum of:
deleted text end

deleted text begin (1) the percent for the sales factor under paragraph (b) of the percentage which
deleted text end new text begin that new text end the sales made within this state in connection with the trade or business during the
tax period are of the total sales wherever made in connection with the trade or business
during the tax period deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (2) the percent for the property factor under paragraph (b) of the percentage which
the total tangible property used by the taxpayer in this state in connection with the trade or
business during the tax period is of the total tangible property, wherever located, used by
the taxpayer in connection with the trade or business during the tax period; and
deleted text end

deleted text begin (3) the percent for the payroll factor under paragraph (b) of the percentage which the
taxpayer's total payrolls paid or incurred in this state or paid in respect to labor performed in
this state in connection with the trade or business during the tax period are of the taxpayer's
total payrolls paid or incurred in connection with the trade or business during the tax period.
deleted text end

deleted text begin (b) For purposes of paragraph (a) and subdivision 3, the following percentages apply
for the taxable years specified:
deleted text end

deleted text begin Taxable years beginning during calendar year deleted text end			deleted text begin Sales factor percent deleted text end			deleted text begin Property factor percent deleted text end		deleted text begin Payroll factor percent deleted text end
deleted text begin 2007 deleted text end			deleted text begin 78 deleted text end			deleted text begin 11 deleted text end		deleted text begin 11 deleted text end
deleted text begin 2008 deleted text end			deleted text begin 81 deleted text end			deleted text begin 9.5 deleted text end		deleted text begin 9.5 deleted text end
deleted text begin 2009 deleted text end			deleted text begin 84 deleted text end			deleted text begin 8 deleted text end		deleted text begin 8 deleted text end
deleted text begin 2010 deleted text end			deleted text begin 87 deleted text end			deleted text begin 6.5 deleted text end		deleted text begin 6.5 deleted text end
deleted text begin 2011 deleted text end			deleted text begin 90 deleted text end			deleted text begin 5 deleted text end		deleted text begin 5 deleted text end
deleted text begin 2012 deleted text end			deleted text begin 93 deleted text end			deleted text begin 3.5 deleted text end		deleted text begin 3.5 deleted text end
deleted text begin 2013 deleted text end			deleted text begin 96 deleted text end			deleted text begin 2 deleted text end		deleted text begin 2 deleted text end
deleted text begin 2014 and later calendar years deleted text end			deleted text begin 100 deleted text end			deleted text begin 0 deleted text end		deleted text begin 0 deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 22.

Minnesota Statutes 2012, section 290.191, subdivision 3, is amended to read:

Subd. 3.

Apportionment formula for financial institutions.

Except for an
investment company required to apportion its income under section 290.36, a financial
institution that is required to apportion its net income must apportion its net income to this
state on the basis of the percentage deleted text begin obtained by taking the sum of:
deleted text end

deleted text begin (1) the percent for the sales factor under subdivision 2, paragraph (b), of the
percentage which deleted text end new text begin that new text end the receipts from within this state in connection with the trade or
business during the tax period are of the total receipts in connection with the trade or
business during the tax period, from wherever derived deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (2) the percent for the property factor under subdivision 2, paragraph (b), of the
percentage which the sum of the total tangible property used by the taxpayer in this state
and the intangible property owned by the taxpayer and attributed to this state in connection
with the trade or business during the tax period is of the sum of the total tangible property,
wherever located, used by the taxpayer and the intangible property owned by the taxpayer
and attributed to all states in connection with the trade or business during the tax period; and
deleted text end

deleted text begin (3) the percent for the payroll factor under subdivision 2, paragraph (b), of the
percentage which the taxpayer's total payrolls paid or incurred in this state or paid in
respect to labor performed in this state in connection with the trade or business during
the tax period are of the taxpayer's total payrolls paid or incurred in connection with
the trade or business during the tax period.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 23.

Minnesota Statutes 2013 Supplement, section 297A.75, subdivision 1, is
amended to read:

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section
297A.71, subdivision 14;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

deleted text begin (6) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;
deleted text end

deleted text begin (7) deleted text end new text begin (6) new text end materials and supplies for qualified low-income housing under section
297A.71, subdivision 23;

deleted text begin (8) deleted text end new text begin (7) new text end materials, supplies, and equipment for municipal electric utility facilities
under section 297A.71, subdivision 35;

deleted text begin (9) deleted text end new text begin (8) new text end equipment and materials used for the generation, transmission, and
distribution of electrical energy and an aerial camera package exempt under section
297A.68, subdivision 37;

deleted text begin (10) deleted text end new text begin (9) new text end commuter rail vehicle and repair parts under section 297A.70, subdivision
3, paragraph (a), clause (10);

deleted text begin (11) deleted text end new text begin (10) new text end materials, supplies, and equipment for construction or improvement of
projects and facilities under section 297A.71, subdivision 40;

deleted text begin (12) materials, supplies, and equipment for construction or improvement of a meat
processing facility exempt under section 297A.71, subdivision 41;
deleted text end

deleted text begin (13) deleted text end new text begin (11) new text end materials, supplies, and equipment for construction, improvement, or
expansion of:

(i) an aerospace defense manufacturing facility exempt under section 297A.71,
subdivision 42;

(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71,
subdivision 45;

(iii) a research and development facility exempt under section 297A.71, subdivision
46; and

(iv) an industrial measurement manufacturing and controls facility exempt under
section 297A.71, subdivision 47;

deleted text begin (14) deleted text end new text begin (12) new text end enterprise information technology equipment and computer software for
use in a qualified data center exempt under section 297A.68, subdivision 42;

deleted text begin (15) deleted text end new text begin (13) new text end materials, supplies, and equipment for qualifying capital projects under
section 297A.71, subdivision 44;

deleted text begin (16) deleted text end new text begin (14) new text end items purchased for use in providing critical access dental services exempt
under section 297A.70, subdivision 7, paragraph (c); and

deleted text begin (17) deleted text end new text begin (15) new text end items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 44.

new text begin EFFECTIVE DATE. new text end

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

Sec. 24.

Minnesota Statutes 2013 Supplement, section 297A.75, subdivision 2, is
amended to read:

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1), (2), and deleted text begin (16) deleted text end new text begin (14) new text end , the applicant must be the
purchaser;

(2) for subdivision 1, deleted text begin clauses deleted text end new text begin clause new text end (3) deleted text begin and (6) deleted text end , the applicant must be the
governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause deleted text begin (7) deleted text end new text begin (6) new text end , the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause deleted text begin (8) deleted text end new text begin (7) new text end , the applicant must be a municipal electric utility
or a joint venture of municipal electric utilities;

(7) for subdivision 1, clauses deleted text begin (9), (12), (13), (14) deleted text end new text begin (8), (11), (12) new text end , and deleted text begin (17) deleted text end new text begin (15) new text end ,
the owner of the qualifying business; and

(8) for subdivision 1, clauses (10), (11), and (15), the applicant must be the
governmental entity that owns or contracts for the project or facility.

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2013 Supplement, section 297A.75, subdivision 3, is
amended to read:

Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clauses (3) to deleted text begin (15) deleted text end new text begin (13) new text end , or deleted text begin (17) deleted text end new text begin (15) new text end , the
contractor, subcontractor, or builder must furnish to the refund applicant a statement
including the cost of the exempt items and the taxes paid on the items unless otherwise
specifically provided by this subdivision. The provisions of sections 289A.40 and
289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

(c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
subdivision 40, must not be filed until after June 30, 2009.

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Minnesota Statutes 2012, section 297I.05, subdivision 14, is amended to read:

Subd. 14.

Life insurance.

A tax is imposed on life insurance. The rate of tax equals
deleted text begin a percentage deleted text end new text begin 1.5 percent new text end of gross premiums less return premiums on all direct business
received by the insurer or agents of the insurer in Minnesota for life insurance, in cash or
otherwise, during the year. deleted text begin For premiums received after December 31, 2005, but before
January 1, 2007, the rate of tax is 1.875 percent. For premiums received after December
31, 2006, but before January 1, 2008, the rate of tax is 1.75 percent. For premiums
received after December 31, 2007, but before January 1, 2009, the rate of tax is 1.625
percent. For premiums received after December 31, 2008, the rate of tax is 1.5 percent.
deleted text end

Sec. 27.

Minnesota Statutes 2013 Supplement, section 298.223, subdivision 1, is
amended to read:

Subdivision 1.

Creation; purposes.

A fund called the taconite environmental
protection fund is created for the purpose of reclaiming, restoring and enhancing those
areas of northeast Minnesota located within the taconite assistance area defined in section
273.1341, that are adversely affected by the environmentally damaging operations
involved in mining taconite and iron ore and producing iron ore concentrate and for the
purpose of promoting the economic development of northeast Minnesota. The taconite
environmental protection fund shall be used for the following purposes:

(1) to initiate investigations into matters the Iron Range Resources and Rehabilitation
Board determines are in need of study and which will determine the environmental
problems requiring remedial action;

(2) reclamation, restoration, or reforestation of mine lands not otherwise provided
for by state law;

(3) local economic development projects but only if those projects are approved by
the board, and public works, including construction of sewer and water systems located
within the taconite assistance area defined in section 273.1341;

(4) monitoring of mineral industry related health problems among mining
employees; new text begin and
new text end

(5) local public works projects under section 298.227, paragraph (c) deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (6) local public works projects as provided under this clause. The following amounts
shall be distributed in 2009 based upon the taxable tonnage of production in 2008:
deleted text end

deleted text begin (i) .4651 cent per ton to the city of Aurora for street repair and renovation;
deleted text end

deleted text begin (ii) .4264 cent per ton to the city of Biwabik for street and utility infrastructure
improvements to the south side industrial site;
deleted text end

deleted text begin (iii) .6460 cent per ton to the city of Buhl for street repair;
deleted text end

deleted text begin (iv) 1.0336 cents per ton to the city of Hoyt Lakes for public utility improvements;
deleted text end

deleted text begin (v) 1.1628 cents per ton to the city of Eveleth for water and sewer infrastructure
upgrades;
deleted text end

deleted text begin (vi) 1.0336 cents per ton to the city of Gilbert for water and sewer infrastructure
upgrades;
deleted text end

deleted text begin (vii) .7752 cent per ton to the city of Mountain Iron for water and sewer infrastructure;
deleted text end

deleted text begin (viii) 1.2920 cents per ton to the city of Virginia for utility upgrades and accessibility
modifications for the miners' memorial;
deleted text end

deleted text begin (ix) .6460 cent per ton to the town of White for Highway 135 road upgrades;
deleted text end

deleted text begin (x) 1.9380 cents per ton to the city of Hibbing for public infrastructure projects;
deleted text end

deleted text begin (xi) 1.1628 cents per ton to the city of Chisholm for water and sewer repair;
deleted text end

deleted text begin (xii) .6460 cent per ton to the town of Balkan for community center repairs;
deleted text end

deleted text begin (xiii) .9044 cent per ton to the city of Babbitt for city garage construction;
deleted text end

deleted text begin (xiv) .5168 cent per ton to the city of Cook for public infrastructure projects;
deleted text end

deleted text begin (xv) .5168 cent per ton to the city of Ely for reconstruction of 2nd Avenue West;
deleted text end

deleted text begin (xvi) .6460 cent per ton to the city of Tower for water infrastructure upgrades;
deleted text end

deleted text begin (xvii) .1292 cent per ton to the city of Orr for water infrastructure upgrades;
deleted text end

deleted text begin (xviii) .1292 cent per ton to the city of Silver Bay for emergency cleanup;
deleted text end

deleted text begin (xix) .3230 cent per ton to Lake County for trail construction;
deleted text end

deleted text begin (xx) .1292 cent per ton to Cook County for construction of tennis courts in Grand
Marais;
deleted text end

deleted text begin (xxi) .3101 cent per ton to the city of Two Harbors for water infrastructure
improvements;
deleted text end

deleted text begin (xxii) .1938 cent per ton for land acquisition for phase one of Cook Airport project;
deleted text end

deleted text begin (xxiii) 1.0336 cents per ton to the city of Coleraine for water and sewer
improvements along Gayley Avenue;
deleted text end

deleted text begin (xxiv) .3876 cent per ton to the city of Marble for construction of a city
administration facility;
deleted text end

deleted text begin (xxv) .1292 cent per ton to the city of Calumet for repairs at city hall and the
community center;
deleted text end

deleted text begin (xxvi) .6460 cent per ton to the city of Nashwauk for electrical infrastructure
upgrades;
deleted text end

deleted text begin (xxvii) 1.0336 cents per ton to the city of Keewatin for water and sewer upgrades
along Depot Street;
deleted text end

deleted text begin (xxviii) .2584 cent per ton to the city of Aitkin for water, sewer, street, and gutter
improvements;
deleted text end

deleted text begin (xxix) 1.1628 cents per ton to the city of Grand Rapids for water and sewer
infrastructure upgrades at Pokegema Golf Course and Park Place;
deleted text end

deleted text begin (xxx) .1809 cent per ton to the city of Grand Rapids for water and sewer upgrades
for 1st Avenue from River Road to 3rd Street SE; and
deleted text end

deleted text begin (xxxi) .9044 cent per ton to the city of Cohasset for upgrades to the railroad crossing
at Highway 2 and County Road 62.
deleted text end

Sec. 28.

Minnesota Statutes 2012, section 298.293, is amended to read:

298.293 EXPENDING FUNDS.

The funds provided by section 298.28, subdivision 11, relating to the Douglas J.
Johnson economic protection trust fund, except money expended pursuant to deleted text begin Laws 1982,
Second Special Session, chapter 2, sections 8 to 14 deleted text end new text begin sections 298.296 to 298.298 new text end , shall be
expended only in an amount that does not exceed the sum of the net interest, dividends,
and earnings arising from the investment of the trust for the preceding 12 calendar months
from the date of the authorization deleted text begin plus, for fiscal year 1983, $10,000,000 from the corpus
of the fund deleted text end . The funds may be spent only in or for the benefit of the taconite assistance
area as defined in section 273.1341. If during any year the taconite property tax account
under sections 273.134 to 273.136 does not contain sufficient funds to pay the property
tax relief specified in deleted text begin Laws 1977, chapter 423, article X, section 4 deleted text end new text begin section 273.135 new text end , there
is appropriated from this trust fund to the relief account sufficient funds to pay the relief
specified in deleted text begin Laws 1977, chapter 423, article X, section 4 deleted text end new text begin section 273.135 new text end .

Sec. 29.

Minnesota Statutes 2012, section 298.75, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

Except as may otherwise be provided, the following
words, when used in this section, shall have the meanings herein ascribed to them.

(a) "Aggregate material" means:

(1) nonmetallic natural mineral aggregate including, but not limited to sand, silica
sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is
transported on a public road, street, or highway, provided that nonmetallic aggregate
material does not include dimension stone and dimension granite; and

(2) taconite tailings, crushed rock, and architectural or dimension stone and dimension
granite removed from a taconite mine or the site of a previously operated taconite mine.

Aggregate material must be measured or weighed after it has been extracted from
the pit, quarry, or deposit.

(b) "Person" means any individual, firm, partnership, corporation, organization,
trustee, association, or other entity.

(c) "Operator" means any person engaged in the business of removing aggregate
material from the surface or subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a marketable product or service.

(d) "Extraction site" means a pit, quarry, or deposit containing aggregate material
and any contiguous property to the pit, quarry, or deposit which is used by the operator for
stockpiling the aggregate material.

(e) "Importer" means any person who buys aggregate material excavated from a
deleted text begin county not listed in paragraph (f) or another state deleted text end new text begin site on which the tax under this section is
not imposed new text end and causes the aggregate material to be imported into a county in this state
which imposes a tax on aggregate material.

(f) "County" means deleted text begin the counties of Pope, Stearns, Benton, Sherburne, Carver, Scott,
Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen,
Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley, Hennepin,
Washington, Chisago, and Ramsey. County also means deleted text end new text begin a county imposing the tax under
this section on December 31, 2014, or new text end any other county whose board has voted after a
public hearing to impose the tax under this section and has notified the commissioner of
revenue of the imposition of the tax.

(g) "Borrow" means granular borrow, consisting of durable particles of gravel and
sand, crushed quarry or mine rock, crushed gravel or stone, or any combination thereof,
the ratio of the portion passing the (#200) sieve divided by the portion passing the (1 inch)
sieve may not exceed 20 percent by mass.

new text begin EFFECTIVE DATE. new text end

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

Sec. 30.

Minnesota Statutes 2012, section 298.75, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Town authority. new text end

new text begin (a) A town located in a county in which a tax under
subdivision 2 is not imposed may impose the aggregate materials tax under this section.
new text end

new text begin (b) For purposes of exercising the powers contained in this section, the "town"
is deemed to be the "county" and all the provisions of this section apply to the town,
except that all proceeds of the tax must be retained by the town and used for the purposes
described in subdivision 7.
new text end

new text begin (c) A county in which a tax is imposed by a town under this subdivision may only
impose the tax under subdivision 2 after giving the clerk of each town imposing the tax
under this subdivision written notice at least 60 days prior to the effective date of the county
tax. If a county imposes an aggregate materials tax under this section, the tax imposed by
the town under this subdivision is repealed on the effective date of the county tax.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 31.

Minnesota Statutes 2013 Supplement, section 465.04, is amended to read:

465.04 ACCEPTANCE OF GIFTS.

deleted text begin Cities deleted text end new text begin A city new text end of the second, third, or fourth class deleted text begin , having at any time an estimated
market value of not more than $41,000,000, as officially equalized by the commissioner
of revenue deleted text end , either new text begin operating new text end under new text begin a new text end home rule charter or under the laws of this state, deleted text begin in
addition to all other powers possessed by them, hereby are authorized and empowered to
deleted text end new text begin may new text end receive and accept gifts and donations for the use and benefit of deleted text begin such cities and deleted text end the
new text begin city and its new text end inhabitants deleted text begin thereof deleted text end upon terms and conditions to be approved by the governing
deleted text begin bodies deleted text end new text begin body new text end of deleted text begin such cities; and such cities are authorized to comply with and perform such
deleted text end new text begin the city. The new text end terms and conditions deleted text begin , which deleted text end may include payment to the donor or donors of
interest on the value of the gift at not exceeding five percent per annum payable annually or
semiannually, during the remainder of the natural life or lives of deleted text begin such deleted text end new text begin the new text end donor or donors.

Sec. 32.

Minnesota Statutes 2012, section 469.176, subdivision 1b, is amended to read:

Subd. 1b.

Duration limits; terms.

(a) No tax increment shall in any event be
paid to the authority:

(1) after 15 years after receipt by the authority of the first increment for a renewal
and renovation district;

(2) after 20 years after receipt by the authority of the first increment for a soils
condition district;

(3) after eight years after receipt by the authority of the first increment for an
economic development district;

(4) for a housing district deleted text begin , a compact development district, deleted text end or a redevelopment
district, after 25 years from the date of receipt by the authority of the first increment.

(b) For purposes of determining a duration limit under this subdivision or subdivision
1e that is based on the receipt of an increment, any increments from taxes payable in the year
in which the district terminates shall be paid to the authority. This paragraph does not affect
a duration limit calculated from the date of approval of the tax increment financing plan or
based on the recovery of costs or to a duration limit under subdivision 1c. This paragraph
does not supersede the restrictions on payment of delinquent taxes in subdivision 1f.

(c) An action by the authority to waive or decline to accept an increment has no
effect for purposes of computing a duration limit based on the receipt of increment under
this subdivision or any other provision of law. The authority is deemed to have received an
increment for any year in which it waived or declined to accept an increment, regardless
of whether the increment was paid to the authority.

(d) Receipt by a hazardous substance subdistrict of an increment as a result of a
reduction in original net tax capacity under section 469.174, subdivision 7, paragraph
(b), does not constitute receipt of increment by the overlying district for the purpose of
calculating the duration limit under this section.

Sec. 33.

Minnesota Statutes 2012, section 469.176, subdivision 3, is amended to read:

Subd. 3.

Limitation on administrative expenses.

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

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

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

deleted text begin (d) deleted text end new text begin (c) new text end Increments used to pay the county's administrative expenses under
subdivision 4h are not subject to the percentage limits in this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification is made after June 30, 1982.
new text end

Sec. 34.

Minnesota Statutes 2013 Supplement, section 469.1763, subdivision 2,
is amended to read:

Subd. 2.

Expenditures outside district.

(a) For each tax increment financing
district, an amount equal to at least 75 percent of the total revenue derived from tax
increments paid by properties in the district must be expended on activities in the district
or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification
was made after June 30, 1995, the in-district percentage for purposes of the preceding
sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
increments paid by properties in the district may be expended, through a development fund
or otherwise, on activities outside of the district but within the defined geographic area of
the project except to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification was
made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
20 percent. The revenue derived from tax increments for the district that are expended on
costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before
calculating the percentages that must be expended within and without the district.

(b) In the case of a housing district, a housing project, as defined in section 469.174,
subdivision 11, is an activity in the district.

(c) All administrative expenses are for activities outside of the district, except that
if the only expenses for activities outside of the district under this subdivision are for
the purposes described in paragraph (d), administrative expenses will be considered as
expenditures for activities in the district.

(d) The authority may elect, in the tax increment financing plan for the district,
to increase by up to ten percentage points the permitted amount of expenditures for
activities located outside the geographic area of the district under paragraph (a). As
permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
expenditures under paragraph (a), need not be made within the geographic area of the
project. Expenditures that meet the requirements of this paragraph are legally permitted
expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
To qualify for the increase under this paragraph, the expenditures must:

(1) be used exclusively to assist housing that meets the requirement for a qualified
low-income building, as that term is used in section 42 of the Internal Revenue Code; and

(2) not exceed the qualified basis of the housing, as defined under section 42(c) of
the Internal Revenue Code, less the amount of any credit allowed under section 42 of
the Internal Revenue Code; and

(3) be used to:

(i) acquire and prepare the site of the housing;

(ii) acquire, construct, or rehabilitate the housing; or

(iii) make public improvements directly related to the housing; or

(4) be used to develop housing:

(i) if the market value of the housing does not exceed the lesser of:

(A) 150 percent of the average market value of single-family homes in that
municipality; or

(B) $200,000 for municipalities located in the metropolitan area, as defined in
section 473.121, or $125,000 for all other municipalities; and

(ii) if the expenditures are used to pay the cost of site acquisition, relocation,
demolition of existing structures, site preparation, and pollution abatement on one or
more parcels, if the parcel contains a residence containing one to four family dwelling
units that has been vacant for six or more months and is in foreclosure as defined in
section 325N.10, subdivision 7, but without regard to whether the residence is the owner's
principal residence, and only after the redemption period has expired.

(e) For a district created within a biotechnology and health sciences industry zone
as defined in section 469.330, subdivision 6, or for an existing district located within
such a zone, tax increment derived from such a district may be expended outside of the
district but within the zone only for expenditures required for the construction of public
infrastructure necessary to support the activities of the zone, land acquisition, and other
redevelopment costs as defined in section 469.176, subdivision 4j. These expenditures are
considered as expenditures for activities within the district. new text begin The authority provided by
this paragraph expires for expenditures made after the later of (1) December 31, 2015,
or (2) the end of the five-year period beginning on the date the district was certified,
provided that date was before January 1, 2016.
new text end

(f) The authority under paragraph (d), clause (4), expires on December 31, 2016.
Increments may continue to be expended under this authority after that date, if they are
used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
(a), if December 31, 2016, is considered to be the last date of the five-year period after
certification under that provision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to all districts, regardless of when the request for certification was made.
new text end

Sec. 35.

Minnesota Statutes 2012, section 473.665, subdivision 5, is amended to read:

Subd. 5.

Tax levy; surplus; reduction.

The corporation, upon issuing any bonds
under the provisions of this section, shall, before the issuance thereof, levy for each year,
until the principal and interest are paid in full, a direct annual tax on all the taxable property
of the cities in and for which the corporation has been created in an amount not less than
five percent in excess of the sum required to pay the principal and interest thereof, when
and as such principal and interest matures. After any of such bonds have been delivered to
purchasers, such tax shall be irrepealable until all such indebtedness is paid, and after the
issuance of such bonds no further action of the corporation shall be necessary to authorize
the extensions, assessments, and collection of such tax. The secretary of the corporation
shall forthwith furnish a certified copy of such levy to the county auditor or county
auditors of the county or counties in which the cities in and for which the corporation has
been created are located, together with full information regarding the bonds for which the
tax is levied, and such county auditor or such county auditors, as the case may be, shall
enter the same in the register provided for in section 475.62, or a similar register, and shall
extend and assess the tax so levied. If both cities are located wholly within one county, the
county auditor thereof shall annually extend and assess the amount of the tax so levied. If
the cities are located in different counties, the county auditor of each such county shall
annually extend and assess such portion of the tax levied as the net tax capacity of the
taxable property deleted text begin , not including moneys and credits, deleted text end located wholly within the city in such
county bears to the total net tax capacity of the taxable property deleted text begin , not including moneys and
credits, deleted text end within both cities. Any surplus resulting from the excess levy herein provided
for shall be transferred to a sinking fund after the principal and interest for which the tax
was levied and collected has been paid; provided, that the corporation may, on or before
October 15 in any year, by appropriate action, cause its secretary to certify to the county
auditor, or auditors, the amount on hand and available in its treasury from earnings, or
otherwise, including the amount in the sinking fund, which it will use to pay principal or
interest or both on each specified issue of its bonds, and the county auditor or auditors
shall reduce the levy for that year, herein provided for by that amount. The amount of
funds so certified shall be set aside by the corporation, and be used for no other purpose
than for the payment of the principal and interest of the bonds. All taxes hereunder shall
be collected and remitted to the corporation by the county treasurer or county treasurers,
in accordance with the provisions of law governing the collection of other taxes, and shall
be used solely for the payment of the bonds where due.

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

new text begin (a) new text end new text begin Minnesota Statutes 2012, sections 272.02, subdivisions 43, 48, 51, 53, 67, 72,
and 82; 272.027, subdivision 2; 273.075; 273.1383; 273.1386; 273.1398, subdivision
4b; 273.80; 275.77; 279.32; 281.328; 282.10; 282.23; 289A.56, subdivision 7; 290.06,
subdivisions 30 and 31; 290C.06; 291.41; 291.42; 291.43; 291.44; 291.45; 291.46;
291.47; 297A.68, subdivision 38; 297A.71, subdivisions 4, 5, 7, 9, 10, 17, 18, 20, 32,
and 41; 298.2961, subdivision 7; 469.174, subdivision 10c; 469.175, subdivision 2b;
469.176, subdivision 1i; 469.177, subdivision 10; 469.330; 469.331; 469.332; 469.333;
469.334; 469.335; 469.336; 469.337; 469.338; 469.339; 469.340, subdivisions 1, 2, 3,
and 5; 469.341; 477A.0124, subdivisions 1 and 6; and 505.173, new text end new text begin Minnesota Statutes 2013
Supplement, sections 273.1103; and 298.2961, subdivision 5, new text end new text begin and new text end new text begin Laws 1993, chapter
375, article 9, section 47, new text end new text begin are repealed.
new text end

new text begin (b) Minnesota Statutes 2012, section 469.1764, new text end new text begin is repealed.
new text end

new text begin (c) Minnesota Statutes 2012, sections 290.06, subdivision 27; and 290.191,
subdivision 4, new text end new text begin are repealed.
new text end

new text begin (d) Minnesota Statutes 2012, sections 127A.48, subdivision 7; and 273.1115, new text end new text begin are
repealed.
new text end

new text begin (e) Minnesota Statutes 2012, sections 297A.69, subdivision 7; and 297A.70,
subdivision 9, new text end new text begin are repealed.
new text end

new text begin (f) Minnesota Statutes 2012, section 298.75, subdivisions 9 and 11, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The provisions of paragraph (a) are effective the day
following final enactment.
new text end

new text begin The provisions of paragraph (b) are effective the day following final enactment and
any remaining unexpended tax increments from a district subject to Minnesota Statutes,
section 469.1764, must be distributed as excess increments to the city, county, and school
district under Minnesota Statutes, section 469.176, subdivision 2, paragraph (c), clause
(4), on or before December 31, 2014.
new text end

new text begin The provisions of paragraph (c) are effective for taxable years beginning after
December 31, 2013.
new text end

new text begin The provisions of paragraph (d) are effective beginning with property taxes payable
in 2015.
new text end

new text begin The provisions of paragraph (e) are effective for sales and purchases made after
June 30, 2014.
new text end

new text begin The provisions of paragraph (f) are effective January 1, 2015, except that the taxes
imposed by towns in St. Louis and Otter Tail Counties remain in effect under Minnesota
Statutes, section 298.75, subdivision 12.
new text end