HF 496

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; making policy, technical, administrative, and clarifying
changes to various taxes and tax-related provisions; changing provisions
relating to revenue recapture, sustainable forest management incentive program,
publication of certain tax preparers, and certain firefighters' supplemental benefits
reimbursement applications; providing for training, licensing, and oversight of
assessors; changing airflight property tax penalties; amending Minnesota Statutes
2006, sections 62I.06, subdivision 6; 71A.04, subdivision 1; 270.071, subdivision
7; 270.072, subdivisions 2, 3, 6; 270.074, subdivision 3; 270.076, subdivision
1; 270.41, subdivisions 1, 2, 3, 5, by adding a subdivision; 270.44; 270.45;
270.46; 270.47; 270.48; 270.50; 270A.03, subdivision 5; 270C.306; 270C.34,
subdivision 1; 270C.446, subdivision 2; 272.02, subdivision 64; 272.115,
subdivision 1; 273.05, by adding a subdivision; 273.111, subdivision 3; 273.117;
273.121; 273.123, subdivisions 2, 3; 273.124, subdivisions 13, 21; 273.13,
subdivisions 22, 25; 273.1398, subdivision 4; 273.33, subdivision 2; 273.37,
subdivision 2; 273.371, subdivision 1; 274.01, subdivision 1; 274.13, subdivision
1; 275.065, subdivisions 3, 5a; 275.067; 276.04, by adding a subdivision; 277.01,
subdivision 2; 279.01, subdivision 1; 287.22; 287.2205; 289A.09, subdivision
2; 289A.12, subdivision 14; 289A.18, subdivision 1; 289A.40, subdivision 2;
289A.56, by adding a subdivision; 289A.60, subdivision 27; 290.01, subdivision
19d; 290.06, subdivision 33; 290.067, subdivision 2b; 290.0671, subdivision
7; 290.0677, subdivision 1; 290.091, subdivision 3; 290.191, subdivision 8;
290A.03, subdivision 7; 290C.02, subdivision 3; 290C.04; 290C.05; 290C.11;
291.215, subdivision 1; 295.52, subdivisions 4, 4a; 295.54, subdivision 2;
297A.61, subdivisions 3, 7, 10, 24, by adding subdivisions; 297A.665; 297A.669,
subdivisions 3, 13, 14, by adding subdivisions; 297A.67, subdivision 9; 297A.68,
subdivisions 11, 16, 35; 297A.70, subdivision 7, by adding a subdivision;
297A.72; 297A.90, subdivision 2; 297B.035, subdivision 1; 297F.25, by adding
a subdivision; 297I.06, subdivisions 1, 2; 297I.20, subdivision 2; 297I.40,
subdivision 5; 424A.10, subdivision 3; 469.1734, subdivision 6; proposing
coding for new law in Minnesota Statutes, chapters 270; 270C; 273; 274; 290C;
repealing Minnesota Statutes 2006, sections 270.073; 270.41, subdivision 4;
270.43; 270.51; 270.52; 270.53; 279.01, subdivision 2; 297A.61, subdivision 20;
297A.668, subdivision 6; 297A.67, subdivision 22.

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

ARTICLE 1

INCOME AND FRANCHISE TAXES

Section 1.

Minnesota Statutes 2006, section 270A.03, subdivision 5, is amended to
read:

Subd. 5.

Debt.

new text begin (a) new text end "Debt" means a legal obligation of a natural person to pay a fixed
and certain amount of money, which equals or exceeds $25 and which is due and payable
to a claimant agency. The term includes criminal fines imposed under section 609.10 or
609.125, fines imposed for petty misdemeanors as defined in section 609.02, subdivision
4a, and restitution. The term also includes the co-payment for the appointment of a district
public defender imposed under section 611.17, paragraph (c). A debt may arise under a
contractual or statutory obligation, a court order, or other legal obligation, but need not
have been reduced to judgment.

A debt includes any legal obligation of a current recipient of assistance which is
based on overpayment of an assistance grant where that payment is based on a client
waiver or an administrative or judicial finding of an intentional program violation;
or where the debt is owed to a program wherein the debtor is not a client at the time
notification is provided to initiate recovery under this chapter and the debtor is not a
current recipient of food support, transitional child care, or transitional medical assistance.

new text begin (b) new text end A debt does not include any legal obligation to pay a claimant agency for medical
care, including hospitalization if the income of the debtor at the time when the medical
care was rendered does not exceed the following amount:

(1) for an unmarried debtor, an income of $8,800 or less;

(2) for a debtor with one dependent, an income of $11,270 or less;

(3) for a debtor with two dependents, an income of $13,330 or less;

(4) for a debtor with three dependents, an income of $15,120 or less;

(5) for a debtor with four dependents, an income of $15,950 or less; and

(6) for a debtor with five or more dependents, an income of $16,630 or less.

deleted text begin The income amounts in this subdivision shall be adjusted for inflation for debts
incurred in calendar years 2001 and thereafter. The dollar amount of each income level
that applied to debts incurred in the prior year shall be increased in the same manner
as provided in section 1(f) of the Internal Revenue Code of 1986, as amended through
December 31, 2000, except that for the purposes of this subdivision the percentage
increase shall be determined from the year starting September 1, 1999, and ending August
31, 2000, as the base year for adjusting for inflation for debts incurred after December
31, 2000. deleted text end new text begin (c) The commissioner shall adjust the income amounts in paragraph (b) by the
percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word
"1992." For 2001, the commissioner shall then determine the percent change from the 12
months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in
each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months
ending on August 31 of the year preceding the taxable year. The determination of the
commissioner pursuant to this subdivision shall not be considered a "rule" and shall not
be subject to the Administrative Procedure Act contained in chapter 14. The income
amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in
$5, the amount is rounded up to the nearest $10 amount.
new text end

new text begin (d) new text end Debt also includes an agreement to pay a MinnesotaCare premium, regardless of
the dollar amount of the premium authorized under section 256L.15, subdivision 1a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for debts incurred after December
31, 2006.
new text end

Sec. 2.

Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:

Subd. 2.

Withholding statement to employee or payee and to commissioner.

(a)
A person required to deduct and withhold from an employee a tax under section 290.92,
subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to
deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required
to withhold tax under section 290.923, subdivision 2, determined without regard to
section 290.92, subdivision 19, if the employee or payee had claimed no more than one
withholding exemption, or who paid wages or made payments not subject to withholding
under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or
person receiving royalty payments in excess of $600, or who has entered into a voluntary
withholding agreement with a payee under section 290.92, subdivision 20, must give
every employee or person receiving royalty payments in respect to the remuneration paid
by the person to the employee or person receiving royalty payments during the calendar
year, on or before January 31 of the succeeding year, or, if employment is terminated
before the close of the calendar year, within 30 days after the date of receipt of a written
request from the employee if the 30-day period ends before January 31, a written statement
showing the following:

(1) name of the person;

(2) the name of the employee or payee and the employee's or payee's Social Security
account number;

(3) the total amount of wages as that term is defined in section 290.92, subdivision
1, paragraph (1); the total amount of remuneration subject to withholding under section
290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the
Internal Revenue Code; and the amount of royalties subject to withholding under section
290.923, subdivision 2; and

(4) the total amount deducted and withheld as tax under section 290.92, subdivision
2a or 3, or 290.923, subdivision 2.

(b) The statement required to be furnished by deleted text begin this deleted text end paragraph new text begin (a) new text end with respect to any
remuneration must be furnished at those times, must contain the information required, and
must be in the form the commissioner prescribes.

(c) The commissioner may prescribe rules providing for reasonable extensions of
time, not in excess of 30 days, to employers or payers required to give the statements to
their employees or payees under this subdivision.

(d) A duplicate of any statement made under this subdivision and in accordance
with rules prescribed by the commissioner, along with a reconciliation in the form the
commissioner prescribes of the statements for the calendar year, including a reconciliation
of the quarterly returns required to be filed under subdivision 1, must be filed with the
commissioner on or before February 28 of the year after the payments were made.

(e) If an employer cancels the employer's Minnesota withholding account number
required by section 290.92, subdivision 24, the information required by paragraph (d),
must be filed with the commissioner within 30 days of the end of the quarter in which
the employer cancels its account number.

(f) The employer must submit the statements required to be sent to the commissioner
deleted text begin on magnetic media, if the magnetic media was deleted text end new text begin in the same manner new text end required to satisfy the
federal reporting requirements of section 6011(e) of the Internal Revenue Code and the
regulations issued under it. new text begin For wages paid in calendar year 2007, an employer must
submit statements to the commissioner required by this section by electronic means if the
employer is required to send more than 100 statements to the commissioner, even though
the employer is not required to submit the returns federally by electronic means. For
calendar year 2008, the 100 statements threshold is reduced to 25, and for calendar year
2009 and thereafter, the threshold is reduced to ten.
new text end

(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph
(a), clause (2), must submit the returns required by this subdivision and subdivision 1,
paragraph (a), with the commissioner by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for wages paid after December 31,
2006.
new text end

Sec. 3.

Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read:

Subd. 14.

Regulated investment companies; reporting exempt-interest
dividends.

(a) A regulated investment company paying $10 or more in exempt-interest
dividends to an individual who is a resident of Minnesota must make a return indicating
the amount of the exempt-interest dividends, the name, address, and Social Security
number of the recipient, and any other information that the commissioner specifies. The
return must be provided to the shareholder no later than 30 days after the close of the
taxable year. The return provided to the shareholder must include a clear statement, in the
form prescribed by the commissioner, that the exempt-interest dividends must be included
in the computation of Minnesota taxable income. The deleted text begin commissioner may by notice and
demand require the deleted text end regulated investment company new text begin is required in a manner prescribed by
the commissioner new text end to file a copy of the return with the commissioner.

(b) This subdivision applies to regulated investment companies required to register
under chapter 80A.

(c) For purposes of this subdivision, the following definitions apply.

(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
exempt-interest dividends that are not required to be added to federal taxable income
under section 290.01, subdivision 19a, clause (1)(ii).

(2) "Regulated investment company" means regulated investment company as
defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
investment company as defined in section 851(g) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2006.
new text end

Sec. 4.

Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read:

Subdivision 1.

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

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

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

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

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

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

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

(6) if a corporation has been divested from a unitary group and files a return for
a fractional part of a year in which it was a member of a unitary business that files a
combined report under section 290.34, subdivision 2, the divested corporation's return
must be filed on the 15th day of the third month following the close of the common
accounting period that includes the fractional year;

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

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

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

(10) returns required to be filed with the commissioner under section 289A.12,
subdivision 2 deleted text begin , deleted text end new text begin or new text end 4 to 10, deleted text begin or 14, deleted text end must be filed within 30 days after being demanded by
the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2006.
new text end

Sec. 5.

Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read:

Subd. 27.

Reportable transaction understatement.

(a) If a taxpayer has a
reportable transaction understatement for any taxable year, an amount equal to 20 percent
of the amount of the reportable transaction understatement must be added to the tax.

(b)(1) For purposes of this subdivision, "reportable transaction understatement"
means the product of:

(i) the amount of the increase, if any, in taxable income that results from a difference
between the proper tax treatment of an item to which this section applies and the taxpayer's
treatment of that item as shown on the taxpayer's tax return; and

(ii) the highest rate of tax imposed on the taxpayer under section 290.06 determined
without regard to the understatement.

(2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed
for the taxable year over gross income for that year, and any reduction in the amount of
capital losses which would, without regard to section 1211 of the Internal Revenue Code,
be allowed for that year, must be treated as an increase in taxable income.

(c) This subdivision applies to any item that is attributable to:

(1) any listed transaction under section 289A.121; and

(2) any reportable transaction, other than a listed transaction, if a significant purpose
of that transaction is the avoidance or evasion of federal income tax liability.

(d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect
to the portion of any reportable transaction understatement with respect to which the
disclosure requirements of section 289A.121, subdivision 5, and section 6664(d)(2)(A)
of the Internal Revenue Code are not met.

(e)(1) No penalty applies under this subdivision with respect to any portion of a
reportable transaction understatement if the taxpayer shows that there was reasonable
cause for the portion and that the taxpayer acted in good faith with respect to the portion.
This paragraph applies only if:

(i) the relevant facts affecting the tax treatment of the item are adequately disclosed
as required under section 289A.121;

(ii) there is or was substantial authority for the treatment; and

(iii) the taxpayer reasonably believed that the treatment was more likely than not
the proper treatment.

(2) A taxpayer who did not adequately disclose under section 289A.121 meets
the requirements of clause (1)(i), if the commissioner abates the penalty new text begin imposed by
subdivision 26, paragraph (d), new text end under deleted text begin section 270C.34 deleted text end new text begin subdivision 26, paragraph (g) new text end .

(3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief
with respect to the tax treatment of an item only if the belief:

(i) is based on the facts and law that exist when the return of tax which includes the
tax treatment is filed; and

(ii) relates solely to the taxpayer's chances of success on the merits of the treatment
and does not take into account the possibility that a return will not be audited, the
treatment will not be raised on audit, or the treatment will be resolved through settlement
if it is raised.

(4) An opinion of a tax advisor may not be relied upon to establish the reasonable
belief of a taxpayer if:

(i) the tax advisor:

(A) is a material advisor, as defined in section 289A.121, and participates in the
organization, management, promotion, or sale of the transaction or is related (within the
meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person
who so participates;

(B) is compensated directly or indirectly by a material advisor with respect to the
transaction;

(C) has a fee arrangement with respect to the transaction which is contingent on all
or part of the intended tax benefits from the transaction being sustained; or

(D) has a disqualifying financial interest with respect to the transaction, as
determined under United States Treasury regulations prescribed to implement the
provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or

(ii) the opinion:

(A) is based on unreasonable factual or legal assumptions, including assumptions
as to future events;

(B) unreasonably relies on representations, statements, findings, or agreements of
the taxpayer or any other person;

(C) does not identify and consider all relevant facts; or

(D) fails to meet any other requirement as the Secretary of the Treasury may
prescribe under federal law.

(f) The penalty imposed by this subdivision applies in lieu of the penalty imposed
under subdivision 4.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:

Subd. 19d.

Corporations; modifications decreasing federal taxable income.

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

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

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

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

(4) amounts disallowed for intangible drilling costs due to differences between
this chapter and the Internal Revenue Code in taxable years beginning before January
1, 1987, as follows:

(i) to the extent the disallowed costs are represented by physical property, an amount
equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7, subject to the modifications contained in subdivision 19e; and

(ii) to the extent the disallowed costs are not represented by physical property, an
amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
290.09, subdivision 8;

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

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

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

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

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

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

(7) in the case of mines, oil and gas wells, other natural deposits, and timber for
which percentage depletion was disallowed pursuant to subdivision 19c, clause deleted text begin (11) deleted text end new text begin (9) new text end , a
reasonable allowance for depletion based on actual cost. In the case of leases the deduction
must be apportioned between the lessor and lessee in accordance with rules prescribed
by the commissioner. In the case of property held in trust, the allowable deduction must
be apportioned between the income beneficiaries and the trustee in accordance with the
pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
of the trust's income allocable to each;

(8) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
1986, section 290.09, subdivision 7;

(9) amounts included in federal taxable income that are due to refunds of income,
excise, or franchise taxes based on net income or related minimum taxes paid by the
corporation to Minnesota, another state, a political subdivision of another state, the
District of Columbia, or a foreign country or possession of the United States to the extent
that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
clause (1), in a prior taxable year;

(10) 80 percent of royalties, fees, or other like income accrued or received from a
foreign operating corporation or a foreign corporation which is part of the same unitary
business as the receiving corporation;

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

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

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

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

deleted text begin (15) the amount of any refund of environmental taxes paid under section 59A of the
Internal Revenue Code;
deleted text end

deleted text begin (16) deleted text end new text begin (15) new text end for taxable years beginning before January 1, 2008, the amount of the
federal small ethanol producer credit allowed under section 40(a)(3) of the Internal
Revenue Code which is included in gross income under section 87 of the Internal Revenue
Code;

deleted text begin (17) deleted text end new text begin (16) new text end for a corporation whose foreign sales corporation, as defined in section
922 of the Internal Revenue Code, constituted a foreign operating corporation during any
taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
claiming the deduction under section 290.21, subdivision 4, for income received from
the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
income excluded under section 114 of the Internal Revenue Code, provided the income is
not income of a foreign operating company;

deleted text begin (18) deleted text end new text begin (17) new text end any decrease in subpart F income, as defined in section 952(a) of the
Internal Revenue Code, for the taxable year when subpart F income is calculated without
regard to the provisions of section deleted text begin 614 deleted text end new text begin 103 new text end of Public Law deleted text begin 107-147 deleted text end new text begin 109-222 new text end ;

deleted text begin (19) deleted text end new text begin (18) new text end in each of the five tax years immediately following the tax year in which
an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
resulting delayed depreciation cannot be less than zero; and

deleted text begin (20) deleted text end new text begin (19) new text end in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the
amount of the addition.

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to clause (2) is effective the day following
final enactment. The rest of this section is effective for taxable years beginning after
December 31, 2006.
new text end

Sec. 7.

Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read:

Subd. 33.

Bovine testing credit.

(a) An owner of cattle in Minnesota may take a
credit against the tax due under this chapter for an amount equal to one-half the expenses
incurred during the taxable year to conduct tuberculosis testing on those cattle.

(b) If the amount of credit which the taxpayer is eligible to receive under this
subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
revenue shall refund the excess to the taxpayer.

(c) The amount necessary to pay claims for the refund provided in this subdivision is
appropriated from the general fund to the commissioner of revenue.

new text begin (d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in
Minnesota is not federally required are not allowed in claiming the credit under paragraph
(a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2007.
new text end

Sec. 8.

Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read:

Subd. 2b.

Inflation adjustment.

new text begin The commissioner shall adjust new text end the dollar amount
of the income threshold at which the maximum credit begins to be reduced under
subdivision 2 deleted text begin must be adjusted for inflation. The commissioner shall make the inflation
adjustments in accordance with section 1(f) of the Internal Revenue Code except that for
the purposes of this subdivision the percentage increase must be determined from the year
starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting
for inflation for the tax year beginning after December 31, 2000. The determination of
the commissioner under this subdivision is not a rule under the Administrative Procedure
Act. deleted text end new text begin by the percentage determined pursuant to the provisions of section 1(f) of the Internal
Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for
the word "1992." For 2001, the commissioner shall then determine the percent change
from the 12 months ending on August 31, 1999, to the 12 months ending on August 31,
2000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the
12 months ending on August 31 of the year preceding the taxable year. The determination
of the commissioner pursuant to this subdivision must not be considered a "rule" and is
not subject to the Administrative Procedure Act contained in chapter 14. The threshold
amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in
$5, the amount is rounded up to the nearest $10 amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2006.
new text end

Sec. 9.

Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read:

Subd. 7.

Inflation adjustment.

The earned income amounts used to calculate the
credit and the income thresholds at which the maximum credit begins to be reduced in
subdivision 1 must be adjusted for inflation. The commissioner shall deleted text begin make the inflation
adjustments in accordance with section 1(f) of the Internal Revenue Code except that for
the purposes of this subdivision the percentage increase shall be determined from the year
starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting for
inflation for the tax year beginning after December 31, 2000. deleted text end new text begin adjust by the percentage
determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For
2001, the commissioner shall then determine the percent change from the 12 months
ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each
subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending
on August 31 of the year preceding the taxable year. The earned income thresholds as
adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends
in $5, the amount is rounded up to the nearest $10 amount. new text end The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2006.
new text end

Sec. 10.

Minnesota Statutes 2006, section 290.0677, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

(a) An individual is allowed a credit against the tax
due under this chapter equal to $59 for each month or portion thereof that the individual
was in active military service in a designated area after September 11, 2001, while a
Minnesota domiciliary.

(b) For active service performed after September 11, 2001, and before December 31,
2006, the individual may claim the credit in the taxable year beginning after December 31,
2005, and before January 1, 2007.

(c) For active service performed after December 31, 2006, the individual may claim
the credit for the taxable year in which the active service was performed.

(d) If deleted text begin a Minnesota domiciliary is killed while performing active military service in a
designated area, the individual's surviving spouse or dependent child may take the credit
in the taxable year of the death. If a Minnesota domiciliary was killed while performing
active military service in a designated area between September 11, 2001, and December
31, 2006, the individual's surviving spouse or dependent child may claim this credit in
the taxable year beginning after December 31, 2005, and before January 1, 2007. deleted text end new text begin an
individual entitled to the credit died prior to January 1, 2006, the individual's estate or
heirs at law, if the individual's probate estate has closed or the estate was not probated,
may claim the credit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for tax years beginning
after December 31, 2005.
new text end

Sec. 11.

Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:

Subd. 3.

Exemption amount.

(a) For purposes of computing the alternative
minimum tax, the exemption amount is deleted text begin :
deleted text end

deleted text begin (1) for taxable years beginning before January 1, 2006, the exemption determined
under section 55(d) of the Internal Revenue Code, as amended through December 31,
1992; and
deleted text end

deleted text begin (2) deleted text end new text begin , new text end for taxable years beginning after December 31, 2005, $60,000 for married
couples filing joint returns, $30,000 for married individuals filing separate returns, estates,
and trusts, and $45,000 for unmarried individuals.

(b) The exemption amount determined under this subdivision is subject to the phase
out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum
taxable income as determined under this section must be substituted in the computation of
the phase out.

(c) For taxable years beginning after December 31, 2006, the exemption amount
under paragraph (a), clause (2), must be adjusted for inflation. deleted text begin The commissioner shall
make the inflation adjustments in accordance with section 1(f) of the Internal Revenue
Code except that for the purposes of this subdivision the percentage increase must be
determined from the year starting September 1, 2005, and ending August 31, 2006, as the
base year for adjusting for inflation for the tax year beginning after December 31, 2006. deleted text end
new text begin The commissioner shall adjust the exemption amount by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent
year, from the 12 months ending on August 31, 2005, to the 12 months ending on August
31 of the year preceding the taxable year. The exemption amount as adjusted must be
rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest
$10 amount. new text end The determination of the commissioner under this subdivision is not a rule
under the Administrative Procedure Act.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2006.
new text end

Sec. 12.

Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read:

Subd. 8.

Deposit; definition.

(a) "Deposit," as used in subdivision deleted text begin 7 deleted text end new text begin 6, paragraph
(n) new text end , has the meanings in this subdivision.

(b) "Deposit" means the unpaid balance of money or its equivalent received or
held by a financial institution in the usual course of business and for which it has given
or is obligated to give credit, either conditionally or unconditionally, to a commercial,
checking, savings, time, or thrift account whether or not advance notice is required to
withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift
certificate, investment certificate, or certificate of indebtedness, or other similar name, or a
check or draft drawn against a deposit account and certified by the financial institution,
or a letter of credit or a traveler's check on which the financial institution is primarily
liable. However, without limiting the generality of the term "money or its equivalent," any
such account or instrument must be regarded as evidencing the receipt of the equivalent
of money when credited or issued in exchange for checks or drafts or for a promissory
note upon which the person obtaining the credit or instrument is primarily or secondarily
liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other
instruments forwarded to the bank for collection.

(c) "Deposit" means trust funds received or held by the financial institution, whether
held in the trust department or held or deposited in any other department of the financial
institution.

(d) "Deposit" means money received or held by a financial institution, or the credit
given for money or its equivalent received or held by a financial institution, in the usual
course of business for a special or specific purpose, regardless of the legal relationship so
established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds,
funds held as security for an obligation due to the financial institution or others, including
funds held as dealers reserves, or for securities loaned by the financial institution, funds
deposited by a debtor to meet maturing obligations, funds deposited as advance payment
on subscriptions to United States government securities, funds held for distribution or
purchase of securities, funds held to meet its acceptances or letters of credit, and withheld
taxes. It does not include funds received by the financial institution for immediate
application to the reduction of an indebtedness to the receiving financial institution, or
under condition that the receipt of the funds immediately reduces or extinguishes the
indebtedness.

(e) "Deposit" means outstanding drafts, including advice or another such institution,
cashier's checks, money orders, or other officer's checks issued in the usual course
of business for any purpose, but not including those issued in payment for services,
dividends, or purchases or other costs or expenses of the financial institution itself.

(f) "Deposit" means money or its equivalent held as a credit balance by a financial
institution on behalf of its customer if the entity is engaged in soliciting and holding such
balances in the regular course of its business.

(g) Interinstitution fund transfers are not deposits.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2006, section 290A.03, subdivision 7, is amended to read:

Subd. 7.

Dependent.

"Dependent" means any person who is considered a
dependent under sections 151 and 152 of the Internal Revenue Code. deleted text begin In the case of a son,
stepson, daughter, or stepdaughter of the claimant, amounts received as a Minnesota
family investment program grant, allowance to or on behalf of the child, surplus food, or
other relief in kind supplied by a governmental agency must not be taken into account
in determining whether the child received more than half of the child's support from
the claimant.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property tax refunds based on
rents paid after December 31, 2006, and property taxes payable after December 31, 2007.
new text end

Sec. 14.

Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:

Subdivision 1.

Determination.

All property includable in the Minnesota gross
estate of a decedent shall be valued in accordance with the provisions of sections 2031 or
2032 and, if applicable, 2032A, of the Internal Revenue Code and any elections made in
valuing the federal gross estate shall be applicable in valuing the Minnesota gross estate.
deleted text begin Values for purposes of the estate tax on both probate and nonprobate assets shall be the
same as those finally determined for purposes of the federal estate tax on a decedent's
estate. deleted text end new text begin Except as otherwise provided in section 291.075, the value of all property
includable in the Minnesota gross estate of a decedent may be independently determined
under said sections for Minnesota estate tax purposes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for estates of decedents
dying after December 31, 2005.
new text end

ARTICLE 2

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to
read:

Subd. 2.

Bad debt loss.

If a claim relates to an overpayment because of a failure to
deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered
timely if filed within seven years from the date prescribed for the filing of the return. A
claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2
years from the date deleted text begin prescribed for filing the return, plus any extensions granted for filing
the return, but only if filed within the extended time deleted text end new text begin when the bad debt was (1) written off
as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted
for federal income tax purposes or would have been eligible for a bad debt deduction for
federal income tax purposes if the taxpayer were required to file a federal income tax
return, or within one year from the date the taxpayer's federal income tax return is timely
filed claiming the bad debt deduction, whichever period is later new text end . The refund or credit is
limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes
of this subdivision, has the same meaning as that term is used in United States Code,
title 26, section 166, except that for a claim relating to an overpayment of taxes under
chapter 297A the following are excluded from the calculation of bad debt: financing
charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts
on property that remain in the possession of the seller until the full purchase price is
paid; expenses incurred in attempting to collect any debt; and repossessed property. new text begin For
purposes of reporting a payment received on previously claimed bad debt under chapter
297A, any payments made on a debt or account are applied first proportionally to the
taxable price of the property or service and the sales tax on it, and secondly to interest,
service charges, and any other charges.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 289A.56, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Border city zone refunds. new text end

new text begin Notwithstanding subdivision 3, for refunds
payable under section 469.1734, subdivision 6, interest is computed from 90 days after the
refund claim is filed with the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refund claims filed on or after
July 1, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited
to, each of the transactions listed in this subdivision.

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration
in money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food.
Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy;

(4) dietary supplements; and

(5) all food sold through vending machines.

(e) A sale and a purchase includes the furnishing for a consideration of electricity,
gas, water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten
computer software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following
services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, and the making available of amusement devices, tanning facilities, reducing
salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp new text begin , including furnishing the guest of the facility with access to
telecommunication services, new text end and the granting of any similar license to use real property
in a specific facility, other than the renting or leasing of it for a continuous period of
30 days or more under an enforceable written agreement that may not be terminated
without prior notice;

(3) nonresidential parking services, whether on a contractual, hourly, or other
periodic basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its
members sports and athletic facilities, without regard to whether a separate charge is
assessed for use of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public
on the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership
dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
swimming pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials and concrete block by a third party if the delivery
would be subject to the sales tax if provided by the seller of the aggregate material or
concrete block; and

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services
provided by coin operated facilities operated by the customer, and rustproofing,
undercoating, and towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting new text begin services and
pest control new text end and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not
including services performed within the jurisdiction they serve by off-duty licensed peace
officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
organization for monitoring and electronic surveillance of persons placed on in-home
detention pursuant to court order or under the direction of the Minnesota Department
of Corrections;

(v) pet grooming services;

(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
public utility lines. Services performed under a construction contract for the installation of
shrubbery, plants, sod, trees, bushes, and similar items are not taxable;

(vii) massages, except when provided by a licensed health care facility or
professional or upon written referral from a licensed health care facility or professional for
treatment of illness, injury, or disease; and

(viii) the furnishing of lodging, board, and care services for animals in kennels and
other similar arrangements, but excluding veterinary and horse boarding services.

In applying the provisions of this chapter, the terms "tangible personal property"
and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
and the provision of these taxable services, unless specifically provided otherwise.
Services performed by an employee for an employer are not taxable. Services performed
by a partnership or association for another partnership or association are not taxable if
one of the entities owns or controls more than 80 percent of the voting power of the
equity interest in the other entity. Services performed between members of an affiliated
group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
group of corporations" means those entities that would be classified as members of an
affiliated group as defined under United States Code, title 26, section 1504, disregarding
the exclusions in section 1504(b).

(h) A sale and a purchase includes the furnishing for a consideration of tangible
personal property or taxable services by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
subdivisions.

(i) A sale and a purchase includes the furnishing for a consideration
of telecommunications services, deleted text begin including deleted text end new text begin ancillary services associated with
telecommunication services, new text end cable television services deleted text begin and deleted text end new text begin , new text end direct satellite services new text begin , and
ring tones new text end . deleted text begin Telecommunications deleted text end new text begin Telecommunication services include, but are not limited
to, the following services, as defined in section 297A.669: air-to-ground radiotelephone
service, mobile telecommunication service, postpaid calling service, prepaid calling
service, prepaid wireless calling service, and private communication services. The new text end
services new text begin in this paragraph new text end are taxed to the extent allowed under federal law.

(j) A sale and a purchase includes the furnishing for a consideration of installation if
the installation charges would be subject to the sales tax if the installation were provided
by the seller of the item being installed.

(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
65B.29, subdivision 1, clause (1).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read:

Subd. 7.

Sales price.

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

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

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

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

(4) delivery charges new text begin , except the percentage of the delivery charge allocated to
delivery of tax exempt property, when the delivery charge is allocated by using either (i) a
percentage based on the total sales price of the taxable property compared to the total sales
price of all property in the shipment, or (ii) a percentage based on the total weight of the
taxable property compared to the total weight of all property in the shipment new text end ; new text begin and
new text end

(5) installation charges; and

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

(b) Sales price does not include:

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

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

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

new text begin (c) Sales price includes consideration received by the seller from third parties if:
new text end

new text begin (1) the seller actually receives consideration from a party other than the purchaser
and the consideration is directly related to a price reduction or discount on the sale;
new text end

new text begin (2) the seller has an obligation to pass the price reduction or discount through to
the purchaser;
new text end

new text begin (3) the amount of the consideration attributable to the sale is fixed and determinable
by the seller at the time of the sale of the item to the purchaser; and
new text end

new text begin (4) one of the following criteria is met:
new text end

new text begin (i) the purchaser presents a coupon, certificate, or other documentation to the seller
to claim a price reduction or discount when the coupon, certificate, or documentation is
authorized, distributed, or granted by a third party with the understanding that the third
party will reimburse any seller to whom the coupon, certificate, or documentation is
presented;
new text end

new text begin (ii) the purchaser identifies himself or herself to the seller as a member of a group or
organization entitled to a price reduction or discount. A "preferred customer" card that is
available to any customer does not constitute membership in such a group; or
new text end

new text begin (iii) the price reduction or discount is identified as a third-party price reduction or
discount on the invoice received by the purchaser or on a coupon, certificate, or other
documentation presented by the purchaser.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on or
after January 1, 2008, except that the amendment to paragraph (a), clause (4), is effective
the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read:

Subd. 10.

Tangible personal property.

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

(b) Tangible personal property does not include:

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 6.

Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read:

Subd. 24.

Telecommunications services.

(a) "Telecommunications services" means
the new text begin electronic new text end transmission, conveyance, or routing of voice, data, audio, video, or any
other information or signals to a point, or between or among points deleted text begin , by or through any
electronic, satellite, optical, microwave, or other medium or method now in existence or
hereafter devised, regardless of the protocol used for such transmission, conveyance,
or routing deleted text end .

(b) Telecommunications services deleted text begin includes the furnishing for consideration of access
to telephone services by a hotel to its guests. deleted text end new text begin include transmission, conveyance, or routing
in which computer processing applications are used to act on the form, code, or protocol
of the content for purposes of transmission, conveyance, or routing, without regard to
whether the service is referred to as voice over Internet protocol services or is classified by
the Federal Communications Commission as enhanced or value added.
new text end

(c) Telecommunications services do not include:

deleted text begin (1) services purchased with a prepaid telephone calling card;
deleted text end

deleted text begin (2) private communication service purchased by an agent acting on behalf of the
State Lottery;
deleted text end

deleted text begin (3) information services; and
deleted text end

deleted text begin (4) purchases of telecommunications when the purchaser uses the purchased services
as a component part of or integrates such service into another telecommunications service
that is sold by the purchaser in the normal course of business.
deleted text end

deleted text begin (d) For purposes of this subdivision, "information services" means the offering of
the capability for generating, acquiring, storing, transforming, processing, retrieving,
utilizing, or making available information.
deleted text end

new text begin (1) data processing and information services that allow data to be generated,
acquired, stored, processed, or retrieved and delivered by an electronic transmission to
a purchaser when the purchaser's primary purpose for the underlying transaction is the
processed data or information;
new text end

new text begin (2) installation or maintenance of wiring or equipment on a customer's premises;
new text end

new text begin (3) tangible personal property;
new text end

new text begin (4) advertising, including, but not limited to, directory advertising;
new text end

new text begin (5) billing and collection services provided to third parties;
new text end

new text begin (6) Internet access service;
new text end

new text begin (7) radio and television audio and video programming services, regardless of the
medium, including the furnishing of transmission, conveyance, and routing of such
services by the programming service provider. Radio and television audio and video
programming services includes, but is not limited to, cable service as defined in United
States Code, title 47, section 522(6), and audio and video programming services delivered
by commercial mobile radio service providers, as defined in Code of Federal Regulations,
title 47, section 20.3;
new text end

new text begin (8) ancillary services; or
new text end

new text begin (9) digital products delivered electronically, including, but not limited to, software,
music, video, reading materials, or ring tones.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 7.

Minnesota Statutes 2006, section 297A.61, is amended by adding a subdivision
to read:

new text begin Subd. 39. new text end

new text begin Ancillary services. new text end

new text begin "Ancillary services" means services that are
associated with or incidental to the provision of telecommunications services, including,
but not limited to, conference bridging service, detailed telecommunications billing,
directory assistance, vertical service, and voice mail services.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 8.

Minnesota Statutes 2006, section 297A.61, is amended by adding a subdivision
to read:

new text begin Subd. 40. new text end

new text begin Conference bridging service. new text end

new text begin "Conference bridging service" means an
ancillary service that links two or more participants of an audio or video conference call
and may include the provision of a telephone number. Conference bridging service does
not include the telecommunications services used to reach the conference bridge.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 9.

Minnesota Statutes 2006, section 297A.61, is amended by adding a subdivision
to read:

new text begin Subd. 41. new text end

new text begin Detailed telecommunications billing service. new text end

new text begin "Detailed
telecommunications billing service" means an ancillary service of separately stating
information pertaining to individual calls on a customer's billing statement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 10.

Minnesota Statutes 2006, section 297A.61, is amended by adding a
subdivision to read:

new text begin Subd. 42. new text end

new text begin Directory assistance. new text end

new text begin "Directory assistance" means an ancillary service
of providing telephone number information or address information, or both.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 11.

Minnesota Statutes 2006, section 297A.61, is amended by adding a
subdivision to read:

new text begin Subd. 43. new text end

new text begin Vertical service. new text end

new text begin "Vertical service" means an ancillary service that is
offered in connection with one or more telecommunications services and which offers
advanced calling features that allow customers to identify callers and to manage multiple
calls and call connections, including conference bridging services.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 12.

Minnesota Statutes 2006, section 297A.61, is amended by adding a
subdivision to read:

new text begin Subd. 44. new text end

new text begin Voice mail service. new text end

new text begin "Voice mail service" means an ancillary service that
enables the customer to store, send, or receive recorded messages. Voice mail service
does not include any vertical services that the customer may be required to have in order
to utilize the voice mail service.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 13.

Minnesota Statutes 2006, section 297A.61, is amended by adding a
subdivision to read:

new text begin Subd. 45. new text end

new text begin Ring tone. new text end

new text begin "Ring tone" means a digitized sound file that is downloaded
onto a device and that may be used to alert the customer of a telecommunication service
with respect to a communication.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2006, section 297A.665, is amended to read:

297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.

(a) For the purpose of the proper administration of this chapter and to prevent
evasion of the tax, until the contrary is established, it is presumed that:

(1) all gross receipts are subject to the tax; and

(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
in Minnesota.

(b) The burden of proving that a sale is not a taxable retail sale is on the seller.
deleted text begin However, the seller may take from the purchaser at the time of the sale a fully completed
exemption certificate which conclusively relieves the seller from collecting and remitting
the tax. This deleted text end new text begin However, a seller is relieved of liability if:
new text end

new text begin (1) the seller obtains a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, at the time of the sale or within
90 days after the date of the sale; or
new text end

new text begin (2) if the seller has not obtained a fully completed exemption certificate or all the
relevant information required by section 297A.72, subdivision 2, within the time provided
in clause (1), within 120 days after a request for substantiation by the commissioner,
the seller either:
new text end

new text begin (i) obtains in good faith a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, from the purchaser; or
new text end

new text begin (ii) proves by other means that the transaction was not subject to tax.
new text end

new text begin (c) Notwithstanding paragraph (b), new text end relief from liability does not apply to a seller who new text begin : new text end

new text begin (1) new text end fraudulently fails to collect the tax new text begin ; new text end or

new text begin (2) new text end solicits purchasers to participate in the unlawful claim of an exemption. deleted text begin If a
seller claiming that certain sales are exempt is not in possession of the required exemption
certificates within 60 days after receiving written notice from the commissioner that the
certificates are required, deductions claimed by the seller that required delivery of the
certificates must be disallowed. If the certificates are delivered to the commissioner within
the 60-day period, the commissioner may verify the reason or basis for the exemption
claimed in the certificates before allowing any deductions. A deduction must not be
granted on the basis of certificates delivered to the commissioner after the 60-day period.
deleted text end

deleted text begin (c) deleted text end new text begin (d) new text end A purchaser of tangible personal property or any items listed in section
297A.63 that are shipped or brought to Minnesota by the purchaser has the burden
of proving that the property was not purchased from a retailer for storage, use, or
consumption in Minnesota.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 15.

Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read:

Subd. 3.

Defined telecommunications services sourcing.

The sale of the following
telecommunication services shall be sourced to each level of taxing jurisdiction in
paragraphs (a) to (d).

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

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

(1) the seller's telecommunications system; or

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 16.

Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to
read:

Subd. 13.

Postpaid calling service.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 17.

Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to
read:

Subd. 14.

Prepaid calling service.

"Prepaid calling service," for purposes of this
section, means new text begin a telecommunications service that:
new text end

new text begin (1) provides new text end the right to access exclusively telecommunications services deleted text begin , which deleted text end new text begin ; new text end

new text begin (2) new text end must be paid for in advance deleted text begin and which deleted text end new text begin ; new text end

new text begin (3) new text end enables the origination of calls using an access number or authorization code,
whether manually or electronically dialed deleted text begin , deleted text end new text begin ; new text end and deleted text begin that deleted text end

new text begin (4) new text end is sold in predetermined units or dollars of which the number declines with
use in a known amount.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2006, section 297A.669, is amended by adding a
subdivision to read:

new text begin Subd. 14a. new text end

new text begin Prepaid wireless calling service. new text end

new text begin "Prepaid wireless calling service," for
purposes of this section, means a telecommunications service that:
new text end

new text begin (1) provides the right to utilize mobile wireless service as well as other
nontelecommunications services, including the download of digital products delivered
electronically, content, and ancillary services;
new text end

new text begin (2) must be paid for in advance; and
new text end

new text begin (3) is sold in predetermined units or dollars of which the number declines with
use in a known amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 19.

Minnesota Statutes 2006, section 297A.669, is amended by adding a
subdivision to read:

new text begin Subd. 17. new text end

new text begin Ancillary service. new text end

new text begin The sale of an ancillary service is sourced to the
customer's place of primary use.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 20.

Minnesota Statutes 2006, section 297A.67, subdivision 9, is amended to read:

Subd. 9.

Baby products.

new text begin Breast pumps, new text end baby bottles and nipples, pacifiers, teething
rings, and infant syringes are exempt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on or
after the day following final enactment.
new text end

Sec. 21.

Minnesota Statutes 2006, section 297A.68, subdivision 11, is amended to read:

Subd. 11.

Advertising materials.

Materials designed to advertise and promote the
sale of merchandise or services are exempt if these materials are mailed or transferred to a
person outside the state for use solely outside the state. Mailing and reply envelopes and
cards new text begin and other shipping materials including, but not limited to, boxes, labels, containers,
and banding, new text end used exclusively in connection with these advertising and promotional
materials are included in this exemption. The exemption applies regardless of where the
mailing occurs. The storage of these materials in the state for the purpose of subsequently
shipping or otherwise transferring the material out of state is also exempt if the other
conditions in this subdivision are met. new text begin For purposes of this subdivision, materials that have
a primary purpose other than advertising, such as fulfilling a legal obligation or furnishing
nonadvertising information, are not materials designed to advertise and promote the sale
of merchandise or services even if they do include advertising content.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Minnesota Statutes 2006, section 297A.68, subdivision 16, is amended to read:

Subd. 16.

Packing materials.

Packing materials used to pack and ship household
goods new text begin and that are provided to and remain with the customer of a for-hire carrier new text end are
exempt if the ultimate destination of the goods is outside Minnesota and if the deleted text begin goods deleted text end
new text begin packing materials new text end are not later returned to a point within Minnesota, except in the course
of interstate commerce. new text begin This exemption does not apply to tools, equipment, pads, or
accessories owned or leased by the for-hire carrier.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2007.
new text end

Sec. 23.

Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read:

Subd. 35.

Telecommunications new text begin , cable television, and direct satellite new text end equipment.

(a) Telecommunications new text begin , cable television, or direct satellite new text end machinery and equipment
purchased or leased for use directly by a telecommunications new text begin , cable television, or
direct satellite new text end service provider primarily in the provision of telecommunications new text begin , cable
television, or direct satellite new text end services that are ultimately to be sold at retail are exempt,
regardless of whether purchased by the owner, a contractor, or a subcontractor.

(b) For purposes of this subdivision, "telecommunications new text begin , cable television, or direct
satellite new text end machinery and equipment" includes, but is not limited to:

(1) machinery, equipment, and fixtures utilized in receiving, initiating,
amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring
telecommunications new text begin , cable television, or direct satellite new text end services, such as computers,
transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items
performing comparable functions;

(2) machinery, equipment, and fixtures used in the transportation of
telecommunications new text begin , cable television, or direct satellite new text end services, radio transmitters and
receivers, satellite equipment, microwave equipment, and other transporting media, but
not wire, cable, fiber, poles, or conduit;

(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or
enable the machinery in clauses (1) and (2) to accomplish its intended function, such as
auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning
equipment necessary to the operation of the telecommunications new text begin , cable television, or direct
satellite new text end equipment; and software necessary to the operation of the telecommunications new text begin ,
cable television, or direct satellite new text end equipment; and

(4) repair and replacement parts, including accessories, whether purchased as spare
parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.

deleted text begin (c) For purposes of this subdivision, "telecommunications services" means
telecommunications services as defined in section deleted text begin 297A.61, subdivision 24 deleted text end , paragraphs
(a), (c), and (d).
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 24.

Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read:

Subd. 7.

Hospitals and outpatient surgical centers.

(a) Sales, except for those
listed in paragraph (c), to a hospital are exempt, if the items purchased are used in
providing hospital services. For purposes of this subdivision, "hospital" means a hospital
organized and operated for charitable purposes within the meaning of section 501(c)(3) of
the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction,
and "hospital services" are services authorized or required to be performed by a "hospital"
under chapter 144.

(b) Sales, except for those listed in paragraph (c), to an outpatient surgical center
are exempt, if the items purchased are used in providing outpatient surgical services. For
purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
center organized and operated for charitable purposes within the meaning of section
501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
(1) services authorized or required to be performed by an outpatient surgical center under
chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
health services furnished to a person whose medical condition is sufficiently acute to
require treatment unavailable through, or inappropriate to be provided by, a clinic or
physician's office, but not so acute as to require treatment in a hospital emergency room.

(c) This exemption does not apply to the following products and services:

(1) purchases made by a clinic, physician's office, or any other medical facility not
operating as a hospital or outpatient surgical center, even though the clinic, office, or
facility may be owned and operated by a hospital or outpatient surgical center;

(2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and
prepared food, candy, and soft drinks;

(3) building and construction materials used in constructing buildings or facilities
that will not be used principally by the hospital or outpatient surgical center;

(4) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a hospital or outpatient surgical center; or

(5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5.

(d) A limited liability company also qualifies for exemption under this subdivision if
(1) it consists of a sole member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.

new text begin (e) An entity that contains both a hospital and a nonprofit unit may claim this
exemption on purchases made for both the hospital and nonprofit unit provided that:
new text end

new text begin (1) the nonprofit unit would have qualified for exemption under subdivision 4; and
new text end

new text begin (2) the items purchased would have qualified for the exemption.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2006, section 297A.70, is amended by adding a
subdivision to read:

new text begin Subd. 17. new text end

new text begin Private communication service for State Lottery. new text end

new text begin Private
communication service, as defined in section 297A.61, subdivision 26, is exempt if the
service is purchased by an agent acting on behalf of the State Lottery.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2008.
new text end

Sec. 26.

Minnesota Statutes 2006, section 297A.72, is amended to read:

297A.72 EXEMPTION CERTIFICATES.

Subd. 2.

Content and form of exemption certificate.

An exemption certificate
must be substantially in the form prescribed by the commissioner deleted text begin and deleted text end new text begin . To be fully
completed, the exemption certificate must new text end :

(1) new text begin either new text end be signed by the purchaser new text begin if it is a paper form, new text end or meet the requirements
of section 270C.304 new text begin if in electronic form new text end ;

(2) bear the name and address of the purchaser; deleted text begin and
deleted text end

(3) indicate the deleted text begin sales tax account deleted text end new text begin identification new text end number deleted text begin , if any, deleted text end issued to the
purchaser deleted text begin . deleted text end new text begin as follows:
new text end

new text begin (i) the purchaser's Minnesota tax identification number;
new text end

new text begin (ii) if the purchaser does not have a Minnesota tax identification number, then the
purchaser's state tax identification number that is issued by a state other than Minnesota,
and the name of that state;
new text end

new text begin (iii) if the purchaser does not have an identification number described in either item
(i) or (ii), then the purchaser's federal Employer Identification Number; or
new text end

new text begin (iv) if the purchaser does not have an identification number described in item (i), (ii),
or (iii), then either the number of the purchaser's state-issued driver's license, if valid in
the state of issue, or if the purchaser does not have a driver's license, a valid state-issued
identification number, and the name of the state of issue;
new text end

new text begin (4) indicate the purchaser's type of business, using a business-type coding system
prescribed by the commissioner; and
new text end

new text begin (5) indicate the reason for the exemption, using an exemption reason coding system
prescribed by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Purchaser requirement. new text end

new text begin A blanket exemption certificate is an exemption
certificate used for continuing future purchases. A purchaser using a blanket exemption
certificate must update it as needed to accurately reflect the information that is required
under subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 27.

Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read:

Subd. 2.

Payment of tax.

(a) Persons who are registered as retailers may make
purchases in this state or import property into this state without payment of the sales or use
taxes imposed by this chapter at the time of purchase or importation, if the purchases or
importations come within the provisions of this section and are made in strict compliance
with the rules of the commissioner.

(b) A person described in subdivision 1 may elect to pay directly to the commissioner
any sales or use tax that may be due under this chapter for the acquisition of mobile
transportation equipment and parts and accessories attached or to be attached to such
equipment registered under section 168.187.

(c) The total cost of such equipment and parts and accessories attached or to be
attached to such equipment must be multiplied by a fraction. The numerator of the fraction
is the Minnesota mileage as reported on the current pro rata application provided for in
section 168.187 and the denominator of the fraction is the total mileage reported on the
current pro rata registration application. The amount so determined must be multiplied by
the tax rate to obtain the tax due.

In computing the tax under this section "sales price" does not include the amount of any
deleted text begin tax, except any manufacturer's or importer's excise tax, imposed by the United States
upon or with respect to retail sales, whether deleted text end new text begin taxes new text end imposed new text begin directly new text end on the deleted text begin retailer or the deleted text end
consumer new text begin that are separately stated on the invoice, bill of sale, or similar document given
to the purchaser new text end .

(d) A retailer covered by this section shall make a return and remit to the
commissioner the tax due for the preceding calendar month in accordance with sections
289A.11 and 289A.20, subdivision 4.

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read:

Subdivision 1.

Ordinary course of business.

Except as provided in this section,
motor vehicles purchased new text begin solely new text end for resale in the ordinary course of business by any motor
vehicle dealer, as defined in section 168.011, subdivision 21, who is licensed under section
168.27, subdivision 2 or 3, new text begin including vehicles new text end which bear dealer plates as authorized by
section 168.27, subdivision 16, shall be exempt from the provisions of this chapter.

new text begin EFFECTIVE DATE. new text end

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

Sec. 29.

Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read:

Subd. 6.

Sales tax exemption; equipment; construction materials.

(a) The gross
receipts from the sale of machinery and equipment and repair parts are exempt from
taxation under chapter 297A, if the machinery and equipment:

(1) are used in connection with a trade or business;

(2) are placed in service in a city that is authorized to designate a zone under section
469.1731, regardless of whether the machinery and equipment are used in a zone; and

(3) have a useful life of 12 months or more.

(b) The gross receipts from the sale of construction materials are exempt, if they are
used to construct:

(1) a facility for use in a trade or business located in a city that is authorized to
designate a zone under section 469.1731, regardless of whether the facility is located in a
zone; or

(2) housing that is located in a zone.

The exemptions under this paragraph apply regardless of whether the purchase is made by
the owner, the user, or a contractor.

(c) A purchaser may claim an exemption under this subdivision for tax on the
purchases up to, but not exceeding:

(1) the amount of the tax credit certificates received from the city, less

(2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and
section 469.1732, subdivision 2.

(d) The tax on sales of items exempted under this subdivision shall be imposed and
collected as if the applicable rate under section 297A.62 applied. Upon application by the
purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall
be paid to the purchaser. The application must include sufficient information to permit
the commissioner to verify the sales tax paid and the eligibility of the claimant to receive
the credit. No more than two applications for refunds may be filed under this subdivision
in a calendar year. The provisions of section 289A.40 apply to the refunds payable
under this subdivision. There is annually appropriated to the commissioner of revenue
the amount required to make the refunds, which must be deducted from the amount of
the city's allocation under section 469.169, subdivision 12, that remains available and its
limitation under section 469.1735.

new text begin (e) new text end The amount to be refunded shall bear interest at the rate in section 270C.405
from deleted text begin the date deleted text end new text begin 90 days after new text end the refund claim is filed with the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refund claims filed on or after
July 1, 2007.
new text end

Sec. 30. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2006, section 297A.61, subdivision 20, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2006, section 297A.668, subdivision 6, new text end new text begin is repealed.
new text end

new text begin (c) new text end new text begin Minnesota Statutes 2006, section 297A.67, subdivision 22, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (a) is effective for sales and purchases made on
or after January 1, 2008; and paragraphs (b) and (c) are effective the day following final
enactment.
new text end

ARTICLE 3

SPECIAL TAXES

Section 1.

Minnesota Statutes 2006, section 62I.06, subdivision 6, is amended to read:

Subd. 6.

deleted text begin Deficits deleted text end new text begin Deficit assessments new text end .

The association shall certify to the
commissioner the estimated amount of any deficit remaining after the stabilization reserve
fund has been exhausted and payment of the maximum final premium for all policyholders
of the association. Within 60 days after the certification, the commissioner shall authorize
the association to recover the members' respective shares of the deficit by assessing
all members an amount sufficient to fully fund the obligations of the association. The
assessment of each member shall be determined in the manner provided in section 62I.07.
An assessment made pursuant to this section shall be deductible by the member from deleted text begin past
or future deleted text end premium taxes due the state new text begin as provided in section 297I.20, subdivision 2 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax returns due on or after January
1, 2008.
new text end

Sec. 2.

Minnesota Statutes 2006, section 71A.04, subdivision 1, is amended to read:

Subdivision 1.

Premium tax.

The attorney-in-fact deleted text begin , in lieu of all taxes, state, county,
and municipal, deleted text end shall file with the commissioner of revenue all returns and pay to the
commissioner of revenue all amounts required under chapter 297I.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 287.22, is amended to read:

287.22 EXEMPTIONS.

The tax imposed by section 287.21 does not apply to:

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

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

(3) A will;

(4) A plat;

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

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

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

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

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

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

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

(12) A referee's, sheriff's, or certificate holder's certificate of redemption from a
mortgage or lien foreclosure sale issued to the redeeming mortgagor or deleted text begin lienee deleted text end new text begin to the
redeeming mortgagor's assignee, heir, personal representative, or successor new text end ;

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2006, section 287.2205, is amended to read:

287.2205 TAX-FORFEITED LAND.

Before a state deed for tax-forfeited land may be issued, the deed tax must be paid
by the purchaser of tax-forfeited land whether the purchase is the result of a public
auction or private sale or a repurchase of tax-forfeited land. State agencies and local
units of government that acquire tax-forfeited land by purchase or any other means are
subject to this section. new text begin The deed tax is $1.65 for a conveyance of tax-forfeited lands to a
governmental subdivision for an authorized public use under section 282.01, subdivision
1a, or for redevelopment purposes under section 282.01, subdivision 1b.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:

Subd. 4.

Use tax; prescription drugs.

(a) A person that receives prescription drugs
for resale or use in Minnesota, other than from a wholesale drug distributor that is subject
to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug
distributor multiplied by the tax percentage specified in this section. Liability for the tax is
incurred when prescription drugs are received or delivered in Minnesota by the person.

deleted text begin (b) A person that receives prescription drugs for use in Minnesota from a nonresident
pharmacy required to be registered under section is subject to a tax equal to
the price paid by the nonresident pharmacy to the wholesale drug distributor or the
price received by the nonresident pharmacy, whichever is lower, multiplied by the tax
percentage specified in this section. Liability for the tax is incurred when prescription
drugs are received in Minnesota by the person.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end A tax imposed under this subdivision does not apply to purchases by an
individual for personal consumption.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 295.52, subdivision 4a, is amended to read:

Subd. 4a.

Tax collection.

A wholesale drug distributor with nexus in Minnesota,
who is not subject to tax under subdivision 3, on all or a particular transaction deleted text begin or a
nonresident pharmacy with nexus in Minnesota, deleted text end is required to collect the tax imposed
under subdivision 4, from the purchaser of the drugs and give the purchaser a receipt
for the tax paid. The tax collected shall be remitted to the commissioner in the manner
prescribed by section 295.55, subdivision 3.

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 2006, section 295.54, subdivision 2, is amended to read:

Subd. 2.

Pharmacy refund.

A pharmacy may claim an annual refund against the
total amount of tax, if any, the pharmacy owes during that calendar year under section
295.52, subdivision 2. The refund shall equal the amount paid by the pharmacy to a
wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend
drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage
specified in section 295.52. If the amount of the refund exceeds the tax liability of the
pharmacy under section 295.52, subdivision deleted text begin 1b deleted text end new text begin 2 new text end , the commissioner shall provide the
pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply
for the refund on the annual return as provided under section 295.55, subdivision 5. The
refund must be claimed within one year of the due date of the return. Interest on refunds
paid under this subdivision will begin to accrue 60 days after the date a claim for refund is
filed. For purposes of this subdivision, the date a claim is filed is the due date of the return
or the date of the actual claim for refund, whichever is later.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2006, section 297F.25, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Consumer use tax; use tax return; cigarette consumer. new text end

new text begin (a) On or before
the 18th day of each calendar month, a consumer who, during the preceding calendar
month, has acquired title to or possession of cigarettes for use or storage in this state, upon
which the sales tax imposed by this section has not been paid, shall file a return with the
commissioner showing the quantity of cigarettes so acquired or possessed. The return
must be made in the form and manner prescribed by the commissioner, and must contain
any other information required by the commissioner. The return must be accompanied by
a remittance for the full unpaid sales tax liability shown by it.
new text end

new text begin (b) The tax imposed under paragraph (a) does not apply if (1) the consumer has
acquired title to or possession of cigarettes for use or storage in this state in quantities
of 200 or fewer in the month, and (2) the cigarettes were carried into this state by that
consumer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for cigarettes which a consumer has
acquired title to or possession of on or after July 1, 2007.
new text end

Sec. 9.

Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read:

Subdivision 1.

Insurance policies surcharge.

(a) Except as otherwise provided
in subdivision 2, each insurer engaged in writing policies of homeowner's insurance
authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or
commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the
gross premiums and assessments, less return premiums, on direct business received by
the company, or by its agents for it, for homeowner's insurance policies, commercial fire
policies, and commercial nonliability insurance policies in this state.

(b) The surcharge amount collected under paragraph (a) new text begin or subdivision 2, paragraph
(b), new text end may not be considered premium for any other purpose. The surcharge amount must be
separately stated on either a billing or policy declaration sent to an insured.

(c) Amounts collected by the commissioner under this section must be deposited in
the fire safety account established pursuant to subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007, and applies to policies
written or renewed on or after July 1, 2007.
new text end

Sec. 10.

Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read:

Subd. 2.

Exemptions.

(a) This section does not apply to a farmers' mutual fire
insurance company or township mutual fire insurance company in Minnesota organized
under chapter 67A.

(b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to
transact business in Minnesota shall elect to remit to the Department of Revenue for
deposit in the fire safety account either (1) the surcharge amount deleted text begin collected deleted text end new text begin imposed new text end under
deleted text begin this section deleted text end new text begin subdivision 1 on all premiums subject to that surcharge new text end , or (2) a surcharge of
one-half of one percent on the gross fire premiums and assessments, less return premiums,
on all direct business received by the insurer or agents of the insurer in Minnesota, in
cash or otherwise, during the year.

new text begin (c) The election must be made prior to July 1, 2007, for policies written or renewed
between July 1, 2007, and December 31, 2007, and by December 31 of each year for
insurance for policies written or renewed in the succeeding calendar year. An insurer
who elects to remit the one-half of one percent surcharge on gross fire premiums and
assessments must not charge the insured the surcharge imposed under subdivision 1.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end For purposes of this subdivision, "gross fire premiums and assessments"
includes premiums on policies covering fire risks only on automobiles, whether written or
under floater form or otherwise.

new text begin EFFECTIVE DATE. new text end

new text begin The requirement for certain insurers to make an election
before July 1, 2007, is effective the day following final enactment. The rest of this section
is effective July 1, 2007, and applies to insurance policies written or renewed on or after
that date.
new text end

Sec. 11.

Minnesota Statutes 2006, section 297I.20, subdivision 2, is amended to read:

Subd. 2.

Joint Underwriting Association offset.

An new text begin insurance company may offset
against its premium tax liability to this state any amount paid for an new text end assessment made
pursuant to section 62I.06, subdivision 6 deleted text begin , shall be deductible by the member from past
or future premium taxes due the state deleted text end . new text begin The offset against premium tax liability must be
claimed beginning with the taxable year that the assessment is paid. To the extent that the
allowable offset exceeds the tax liability, the remaining offset must be carried forward to
succeeding taxable years until the entire offset has been credited against the insurance
company's liability for premium tax under this chapter. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax returns due on or after January
1, 2008.
new text end

Sec. 12.

Minnesota Statutes 2006, section 297I.40, subdivision 5, is amended to read:

Subd. 5.

Definition of tax.

The term "tax" as used in this section means the tax
imposed by section 297I.05, subdivisions 1 to 6, new text begin 11, new text end and 12, paragraphs (a), clauses (1)
to (5), (b), and deleted text begin (e) deleted text end new text begin (d) new text end , deleted text begin without regard to the retaliatory provisions of section 297I.05,
subdivision 11, and the deleted text end new text begin less any new text end offset in section 297I.20.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax returns due on or after January
1, 2008.
new text end

ARTICLE 4

PROPERTY TAXES AND AIDS

Section 1.

Minnesota Statutes 2006, section 270.071, subdivision 7, is amended to read:

Subd. 7.

Flight property.

"Flight property" means all aircraft and flight equipment
used in connection therewith, including spare flight equipment. new text begin Flight property also
includes computers and computer software used in operating, controlling, or regulating
aircraft and flight equipment.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 270.072, subdivision 2, is amended to read:

Subd. 2.

Assessment of flight property.

deleted text begin The deleted text end Flight property deleted text begin of deleted text end new text begin that is owned by,
or is leased, loaned, or otherwise made available to new text end all airline companies operating in
Minnesota shall be assessed and appraised annually by the commissioner with reference
to its value on January 2 of the assessment year in the manner prescribed by sections
270.071 to 270.079. Aircraft with a gross weight of less than 30,000 pounds and used on
intermittent or irregularly timed flights shall be excluded from the provisions of sections
270.071 to 270.079.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read:

Subd. 3.

Report by airline company.

new text begin Each year, on or before July 1, new text end every airline
company engaged in air commerce in this state shall file with the commissioner deleted text begin on or
before the time fixed by the commissioner deleted text end a report under oath setting forth specifically
the information prescribed by the commissioner to enable the commissioner to make the
assessment required in sections 270.071 to 270.079, unless the commissioner determines
that the airline company or person should be excluded from filing because its activities do
not constitute air commerce as defined herein. deleted text begin A penalty of five percent of the tax being
assessed is imposed on a late filing of the annual report. If the report is not filed within
30 days, an additional penalty of five percent of the assessed tax is imposed for each
additional 30 days or fraction of 30 days until the return is filed. The penalty imposed
under this section must not exceed the lesser of $25,000 or 25 percent of the assessed tax. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning January 2, 2007, for taxes
payable in 2008 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read:

Subd. 6.

Airflight property tax lien.

The tax imposed under sections 270.071 to
270.079 is a lien on all real and personal property within this state of the airline company
in whose name the property is assessed. deleted text begin For purposes of sections 270C.62 and 270C.63,
the date of assessment for the tax imposed under sections 270.071 to 270.079 is deleted text end new text begin The lien
attaches on new text end January 2 of each year for the taxes payable in the following year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning January 2, 2007, for taxes
payable in 2008 and thereafter.
new text end

Sec. 5.

new text begin [270.0725] PENALTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Penalty for late filing. new text end

new text begin If an airline company does not file its annual
report by the date designated in section 270.072, subdivision 3, a penalty of five percent
of the tax being assessed is imposed on that company. On August 1, and on the first day
of each succeeding calendar month, an additional five percent penalty is imposed if the
report has not yet been filed. For each airline company, the penalties imposed under
this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of
the assessed tax.
new text end

new text begin Subd. 2. new text end

new text begin Penalty for repeated instances of late filing. new text end

new text begin If there is a pattern of
repeated failures by an airline company to timely file the report required by this section, a
penalty of ten percent of the tax being assessed is imposed on that company.
new text end

new text begin Subd. 3. new text end

new text begin Penalty for frivolous report. new text end

new text begin If an airline company files a frivolous annual
report, a penalty of 25 percent of the tax being assessed is imposed on that company. A
frivolous report under this section is a report that would fulfill the criteria for a frivolous
return under section 289A.60, subdivision 7, notwithstanding the restriction in section
289A.01. In a proceeding involving the issue of whether or not an airline company is
liable for this penalty, the burden of proof is on the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Penalty for fraudulent report. new text end

new text begin If an airline company files a false or
fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50
percent of the tax being assessed is imposed on that company.
new text end

new text begin Subd. 5. new text end

new text begin Penalties added to tax. new text end

new text begin Penalties imposed under this section are added to
the tax and collected as a part of it.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for annual reports due on or after
July 1, 2007.
new text end

Sec. 6.

new text begin [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS.
new text end

new text begin In addition to the powers granted to the commissioner in this chapter, and in order to
determine net tax capacities and issue notices of net tax capacity and tax under sections
270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and
270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes
an airline company.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning January 2, 2007, for taxes
payable in 2008 and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2006, section 270.074, subdivision 3, is amended to read:

Subd. 3.

Tax capacity.

(a) new text begin The net tax capacity of new text end the flight property of every airline
company deleted text begin shall have a tax capacity of deleted text end new text begin is new text end 70 percent of the value thereof apportioned to this
state under subdivision 1, except that new text begin the net tax capacity of new text end quiet aircraft deleted text begin shall have a
tax capacity of deleted text end new text begin is new text end 40 percent of the value determined under subdivision 1. deleted text begin Quiet aircraft
shall include deleted text end new text begin "Quiet aircraft" means new text end turboprops and aircraft defined as stage III new text begin or IV new text end by
the Federal Aeronautics Administration. If, in the opinion of the commissioner, other
aircraft may be qualified as quiet aircraft, the commissioner may adopt rules providing
additional qualifications.

(b) The flight property of an airline company that owns or leases aircraft the majority
of which are turboprops, and which provides, during six months or more of the year that
taxes are levied, scheduled passenger service to three or more airports inside or outside of
this state that serve small or medium sized communities, shall be assessed at 50 percent of
the assessment percentage otherwise set by paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning January 2, 2007, for taxes
payable in 2008 and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read:

Subdivision 1.

Appeal.

deleted text begin Any airline company against which a tax has been imposed
under sections 270.071 to 270.079 shall have the right to appeal within 60 days from the
date of notice of the levy of the tax deleted text end new text begin The notices of net tax capacity and of tax required
under section 270.075, subdivision 2, are orders of the commissioner. These orders must
be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject
to administrative review under section 270C.35. These orders may be appealed new text end to the Tax
Court in the manner provided deleted text begin by law deleted text end new text begin in section 271.06 for appealing official orders of
the commissioner that do not deal with valuation, assessment, or taxation for property
tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter
278 do not apply new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning January 2, 2007, for taxes
payable in 2008 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2006, section 270.41, subdivision 1, is amended to read:

Subdivision 1.

Creation; purpose; powers.

A Board of Assessors is created.
The board shall deleted text begin establish, conduct, deleted text end review, supervise, coordinate, and approve courses
in assessment practices, and establish criteria for determining assessor's qualifications.
The board shall also consider other matters relating to assessment administration brought
before it by the commissioner of revenue. The board may grant, renew, suspend, or revoke
an assessor's license.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2006, section 270.41, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Definition. new text end

new text begin For purposes of sections 270.41 to 270.50, "board" means
the Board of Assessors.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read:

Subd. 2.

Members.

The board shall consist of nine members, who shall be
appointed by the commissioner of revenue, in the manner provided herein. The members
shall include:

(1) two from the Department of Revenue;

(2) two county assessors;

(3) two assessors who are not county assessors, one of whom shall be a township
assessor;

(4) one from the private appraisal field holding a professional appraisal designation;
and

(5) two public members as defined by section 214.02.

The appointment provided in clauses (2) and (3) may be made from deleted text begin two lists deleted text end new text begin a list
new text end of not less than three names deleted text begin each, one deleted text end submitted to the commissioner of revenue by the
Minnesota Association of Assessing Officers or its successor organization containing
recommendations for the appointment of appointees described in deleted text begin clause deleted text end new text begin clauses new text end (2) deleted text begin ,
and one by the Minnesota Association of Assessors, Inc. or its successor organization
containing recommendations for the appointees described in clause (3) deleted text end new text begin and (3) new text end . The deleted text begin lists deleted text end
new text begin list new text end must be submitted 30 days before the commencement of the term. In the case of a
vacancy, a new list shall be furnished to the commissioner deleted text begin by the respective organization deleted text end
immediately. A member of the board who is no longer engaged in the capacity deleted text begin listed
above deleted text end new text begin that was the basis of appointment new text end is disqualified from membership in the board.

The board shall annually elect a chair and a deleted text begin secretary deleted text end new text begin vice-chair new text end of the board.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read:

Subd. 3.

Licenses; refusal or revocation.

The board may refuse to grant or renew,
or may suspend or revoke, a license of an applicant or licensee for any of the following
causes or acts:

(1) failure to complete required training;

(2) inefficiency or neglect of duty;

(3) deleted text begin "unprofessional conduct" which means knowingly neglecting to perform a duty
required by law, or violation of the laws of this state relating to the assessment of property
or unlawfully exempting property or knowingly and intentionally listing property on the
tax list at substantially less than its market value or the level required by law in order to
gain favor or benefit, or knowingly and intentionally misclassifying property in order to
gain favor or benefit deleted text end new text begin failure to comply with the Code of Conduct and Ethics for Licensed
Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session
chapter 3, article 1, section 38 new text end ;

(4) conviction of a crime involving moral turpitude; or

(5) any other cause or act that in the board's opinion warrants a refusal to issue
or suspension or revocation of a license.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read:

Subd. 5.

Prohibited activity.

deleted text begin An assessor, deputy assessor, assistant assessor,
appraiser, deleted text end new text begin A licensed assessor new text end or other person employed by an assessment jurisdiction
or contracting with an assessment jurisdiction for the purpose of valuing or classifying
property for property tax purposes is prohibited from making appraisals or analyses,
accepting an appraisal assignment, or preparing an appraisal report as defined in section
82B.02, subdivisions 2 to 5, on any property within the assessment jurisdiction where the
individual is employed or performing the duties of the assessor under contract. Violation
of this prohibition shall result in immediate revocation of the individual's license to assess
property for property tax purposes. This prohibition must not be construed to prohibit an
individual from carrying out any duties required for the proper assessment of property
for property tax purposes. If a formal resolution has been adopted by the governing body
of a governmental unit, which specifies the purposes for which such work will be done,
this prohibition does not apply to appraisal activities undertaken on behalf of and at the
request of the governmental unit that has employed or contracted with the individual.
The resolution may only allow appraisal activities which are related to condemnations,
right-of-way acquisitions, or special assessments.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2006, section 270.44, is amended to read:

270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.

The board shall charge the following fees:

(1) $105 for a senior accredited Minnesota assessor license;

(2) $80 for an accredited Minnesota assessor license;

(3) $65 for a certified Minnesota assessor specialist license;

(4) $55 for a certified Minnesota assessor license;

deleted text begin (5) $50 for a course challenge examination;
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end $35 for grading a form appraisal;

deleted text begin (7) deleted text end new text begin (6) new text end $60 for grading a narrative appraisal;

deleted text begin (8) deleted text end new text begin (7) new text end $30 for a reinstatement fee;

deleted text begin (9) deleted text end new text begin (8) new text end $25 for a record retention fee; new text begin and
new text end

deleted text begin (10) deleted text end new text begin (9) new text end $20 for an educational transcript deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (11) $30 for all retests of board-sponsored educational courses.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2006, section 270.45, is amended to read:

270.45 DISPOSITION OF FEES.

All fees so established and collected shall be paid to the commissioner of finance for
deposit in the general fund. The expenses of carrying out the provisions of sections 270.41
to 270.53 shall be paid from appropriations made to the board deleted text begin of Assessors deleted text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2006, section 270.46, is amended to read:

270.46 TRAINING COURSES, deleted text begin ESTABLISHMENT; OTHER COURSES, deleted text end
REGULATION.

The board shall deleted text begin establish deleted text end new text begin review and approve new text end training courses on assessment
practices deleted text begin and shall review and approve courses on assessment practices deleted text end new text begin , techniques of
assessment, and ethics new text end offered by schools, colleges deleted text begin and deleted text end new text begin , new text end universities deleted text begin as well as courses that
are offered by any units of government on techniques of assessment. Courses shall be
established in various places throughout the state and be offered on regular intervals deleted text end new text begin , units
of government, and other entities new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2006, section 270.47, is amended to read:

270.47 RULES.

The board shall deleted text begin establish the deleted text end new text begin adopt new text end rules necessary to accomplish the purpose of
deleted text begin section deleted text end new text begin sections new text end 270.41 new text begin to 270.51 new text end , and shall establish criteria required of assessing officials
in the state. Separate criteria may be established depending upon the responsibilities of the
assessor. deleted text begin The board shall prepare and give examinations from time to time to determine
whether assessing officials possess the necessary qualifications for performing the
functions of the office. Such tests shall be given immediately upon completion of courses
required by the board, or to persons who already possess the requisite qualifications under
the rules of the board. deleted text end new text begin An action of the board in refusing to grant or renew a license or in
suspending or revoking a license is subject to review in accordance with chapter 14. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2006, section 270.48, is amended to read:

270.48 LICENSURE OF QUALIFIED PERSONS.

The board deleted text begin shall deleted text end new text begin may new text end license persons as possessing the necessary qualifications of an
assessing official. Different levels of licensure may be established as to classes of property
which assessors may be certified to assess at the discretion of the board. Every person,
except a local or county assessor, regularly employed by the assessor to assist in making
decisions regarding valuing and classifying property for assessment purposes deleted text begin shall be
required to deleted text end new text begin must new text end become licensed within three years of the date of employment. Licensure
shall be required for local and county assessors as deleted text begin otherwise deleted text end provided in deleted text begin sections 270.41
to 270.53 deleted text end new text begin section 273.061 and rules adopted by the board new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2006, section 270.50, is amended to read:

270.50 EMPLOYMENT OF LICENSED ASSESSORS.

No assessor shall be employed who has not been licensed as qualified by the board,
provided the time to comply may be extended after application to the board upon a
showing that licensed assessors are not available for employment. The board may license
deleted text begin that deleted text end a county or local assessor who has not received the training, but possesses the
necessary qualifications for performing the functions of the office by the passage of an
approved examination or may waive the examination if such person has demonstrated
competence in performing the functions of the office for a period of time the board deems
reasonable. deleted text begin The county or local assessing district shall assume the cost of training of its
assessors in courses approved by the board for the purpose of obtaining the assessor's
license to the extent of course fees, mileage, meals and lodging, and recognized travel
expenses not paid by the state. If the governing body of any township or city fails to
employ an assessor as required by sections 270.41 to 270.53, the assessment shall be
made by the county assessor.
deleted text end

deleted text begin In the case of cities incorporated or townships organized after April 11, 1974, except
cities or towns located in Ramsey county or which have elected a county assessor system
in accordance with section 273.055, the board shall allow the city or town 90 days from
the date of incorporation or organization to employ a licensed assessor. deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2006, section 270C.306, is amended to read:

270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR
IDENTIFYING NUMBERS ON FORMS.

Notwithstanding the provisions of any other law new text begin except section 272.115 new text end , the
commissioner may require that a form required to be filed with the commissioner include
the Social Security number, federal employer identification number, or Minnesota
taxpayer identification number of the taxpayer or applicant.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 21.

Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read:

Subdivision 1.

Authority.

(a) The commissioner may abate, reduce, or refund any
penalty or interest that is imposed by a law administered by the commissioner as a result
of the late payment of tax or late filing of a return, if the failure to timely pay the tax or
failure to timely file the return is due to reasonable cause, or if the taxpayer is located
in a presidentially declared disaster area.

(b) The commissioner shall abate any part of a penalty or additional tax charge
under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous
advice given to the taxpayer in writing by an employee of the department acting in
an official capacity, if the advice:

(1) was reasonably relied on and was in response to a specific written request of the
taxpayer; and

(2) was not the result of failure by the taxpayer to provide adequate or accurate
information.

new text begin (c) The commissioner may abate a penalty imposed under section 270.0725,
subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline
company is located in a presidentially declared disaster area.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 22.

Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:

Subd. 64.

Job opportunity building zone property.

(a) Improvements to real
property, and personal property, classified under section 273.13, subdivision 24, and
located within a job opportunity building zone, designated under section 469.314, are
exempt from ad valorem taxes levied under chapter 275.

(b) Improvements to real property, and tangible personal property, of an agricultural
production facility located within an agricultural processing facility zone, designated
under section 469.314, is exempt from ad valorem taxes levied under chapter 275.

(c) For property to qualify for exemption under paragraph (a), the occupant must be
a qualified business, as defined in section 469.310.

(d) The exemption applies beginning for the first assessment year after designation
of the job opportunity building zone by the commissioner of employment and economic
development. The exemption applies to each assessment year that begins during the
duration of the job opportunity building zone. To be exempt, the property must be
occupied by July 1 of the assessment year by a qualified business that has signed the
business subsidy agreement and relocation agreement, if required, by July 1 of the
assessment year. This exemption does not apply to:

(1) the levy under section 475.61 or similar levy provisions under any other law to
pay general obligation bonds; or

(2) a levy under section 126C.17, if the levy was approved by the voters before the
designation of the job opportunity building zone.

new text begin (e) Except for property of a business that was exempt under this subdivision for
taxes payable in 2007, a business must notify the county assessor in writing of eligibility
under this subdivision by July 1 in order to begin receiving the exemption under this
subdivision for taxes payable in the following year. The business need not annually notify
the county assessor of its continued exemption under this subdivision, but must notify the
county assessor immediately if the exemption no longer applies.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

Except as otherwise provided in subdivision 5,
whenever any real estate is sold for a consideration in excess of $1,000, whether by
warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor,
grantee or the legal agent of either shall file a certificate of value with the county
auditor in the county in which the property is located when the deed or other document
is presented for recording. Contract for deeds are subject to recording under section
507.235, subdivision 1. Value shall, in the case of any deed not a gift, be the amount of
the full actual consideration thereof, paid or to be paid, including the amount of any lien
or liens assumed. The items and value of personal property transferred with the real
property must be listed and deducted from the sale price. The certificate of value shall
include the classification to which the property belongs for the purpose of determining
the fair market value of the property. The certificate shall include financing terms and
conditions of the sale which are necessary to determine the actual, present value of
the sale price for purposes of the sales ratio study. The commissioner of revenue shall
promulgate administrative rules specifying the financing terms and conditions which must
be included on the certificate. deleted text begin Pursuant to the authority of the commissioner of revenue in
section 270C.306, deleted text end The certificate of value must include the Social Security number or
the federal employer identification number of the grantors and grantees. new text begin However, a
married person who is not an owner of record and who is signing a conveyance instrument
along with the person's spouse solely because of the requirement in section 507.02 that
spouses of owners must sign certain conveyances is not a grantor for the purpose of the
preceding sentence. new text end The identification numbers of the grantors and grantees are private
data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12,
but, notwithstanding that section, the private or nonpublic data may be disclosed to the
commissioner of revenue for purposes of tax administration. The information required to
be shown on the certificate of value is limited to the information required as of the date of
the acknowledgment on the deed or other document to be recorded.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certificates of value filed on or
after July 1, 2007.
new text end

Sec. 24.

Minnesota Statutes 2006, section 273.05, is amended by adding a subdivision
to read:

new text begin Subd. 3. new text end

new text begin Cities and townships; employment of licensed assessor. new text end

new text begin In the case
of cities or townships, except cities or towns located in Ramsey County or which have
elected a county assessor system in accordance with section 273.055, the commissioner
shall allow the city or town 90 days from the date of incorporation or organization to
employ a licensed assessor.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

new text begin [273.0535] COUNTY OR LOCAL ASSESSING DISTRICT TO ASSUME
COST OF TRAINING.
new text end

new text begin The county or local assessing district must assume the cost of training its assessors
in courses approved by the board for the purpose of obtaining the assessor's license to
the extent of course fees, mileage, meals, and lodging, and recognized travel expenses
not paid by the state.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read:

Subd. 3.

Requirements.

(a) Real estate consisting of ten acres or more or a nursery
or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13,
shall be entitled to valuation and tax deferment under this section only if it is primarily
devoted to agricultural use, and meets the qualifications in subdivision 6, and either:

(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
owner or is real estate which is farmed with the real estate which contains the homestead
property; or

(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
or any combination thereof, for a period of at least seven years prior to application for
benefits under the provisions of this section, or is real estate which is farmed with the
real estate which qualifies under this clause and is within four townships or cities or
combination thereof from the qualifying real estate; or

(3) is the homestead of a shareholder in a family farm corporation as defined in
section 500.24, notwithstanding the fact that legal title to the real estate may be held in the
name of the family farm corporation; or

(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
partnership, or corporation which also owns the nursery or greenhouse operations on
the parcel or parcels.

(b) Valuation of real estate under this section is limited to parcels the ownership of
which is in noncorporate entities except for:

(1) family farm corporations organized pursuant to section 500.24; and

(2) corporations that derive 80 percent or more of their gross receipts from the
wholesale or retail sale of horticultural or nursery stock.

deleted text begin Corporate entities who previously qualified for tax deferment pursuant to this section
and who continue to otherwise qualify under subdivisions 3 and 6 for a period of at least
three years following the effective date of Laws 1983, chapter 222, section 8, will not be
required to make payment of the previously deferred taxes, notwithstanding the provisions
of subdivision 9. Special assessments are payable at the end of the three-year period
or at time of sale, whichever comes first.
deleted text end

(c) Land that previously qualified for tax deferment under this section and no longer
qualifies because it is not primarily used for agricultural purposes but would otherwise
qualify under subdivisions 3 and 6 for a period of at least three years will not be required
to make payment of the previously deferred taxes, notwithstanding the provisions of
subdivision 9. Sale of the land prior to the expiration of the three-year period requires
payment of deferred taxes as follows: sale in the year the land no longer qualifies requires
payment of the current year's deferred taxes plus payment of deferred taxes for the two
prior years; sale during the second year the land no longer qualifies requires payment of
the current year's deferred taxes plus payment of the deferred taxes for the prior year; and
sale during the third year the land no longer qualifies requires payment of the current
year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to
subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or
at the end of the three-year period, whichever comes first, all deferred special assessments
plus interest are payable in equal installments spread over the time remaining until the last
maturity date of the bonds issued to finance the improvement for which the assessments
were levied. If the bonds have matured, the deferred special assessments plus interest
are payable within 90 days. The provisions of section 429.061, subdivision 2, apply
to the collection of these installments. Penalties are not imposed on any such special
assessments if timely paid.

new text begin EFFECTIVE DATE. new text end

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

Sec. 27.

Minnesota Statutes 2006, section 273.117, is amended to read:

273.117 CONSERVATION PROPERTY TAX VALUATION.

Real property which is subject to a conservation restriction or easement deleted text begin shall deleted text end new text begin may new text end be
entitled to reduced valuation under this section if:

(a) The restriction or easement is for a conservation purpose as defined in section
84.64, subdivision 2, and is recorded on the property;

(b) The property is being used in accordance with the terms of the conservation
restriction or easement.

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2006, section 273.121, is amended to read:

273.121 VALUATION OF REAL PROPERTY, NOTICE.

Any county assessor or city assessor having the powers of a county assessor, valuing
or classifying taxable real property shall in each year notify those persons whose property
is to be included on the assessment roll that year if the person's address is known to the
assessor, otherwise the occupant of the property. The notice shall be in writing and shall be
sent by ordinary mail at least ten days before the meeting of the local board of appeal and
equalization under section 274.01 or the review process established under section 274.13,
subdivision 1c. new text begin Upon written request by the owner of the property, the assessor may send
the notice in electronic form or by electronic mail instead of on paper or by ordinary mail.
new text end It shall contain: (1) the market value for the current and prior assessment, (2) the limited
market value under section 273.11, subdivision 1a, for the current and prior assessment,
(3) the qualifying amount of any improvements under section 273.11, subdivision 16,
for the current assessment, (4) the market value subject to taxation after subtracting the
amount of any qualifying improvements for the current assessment, (5) the classification
of the property for the current and prior assessment, (6) a note that if the property is
homestead and at least 45 years old, improvements made to the property may be eligible
for a valuation exclusion under section 273.11, subdivision 16, (7) the assessor's office
address, and (8) the dates, places, and times set for the meetings of the local board of
appeal and equalization, the review process established under section 274.13, subdivision
1c, and the county board of appeal and equalization. The commissioner of revenue shall
specify the form of the notice. The assessor shall attach to the assessment roll a statement
that the notices required by this section have been mailed. Any assessor who is not
provided sufficient funds from the assessor's governing body to provide such notices,
may make application to the commissioner of revenue to finance such notices. The
commissioner of revenue shall conduct an investigation and, if satisfied that the assessor
does not have the necessary funds, issue a certification to the commissioner of finance
of the amount necessary to provide such notices. The commissioner of finance shall
issue a warrant for such amount and shall deduct such amount from any state payment
to such county or municipality. The necessary funds to make such payments are hereby
appropriated. Failure to receive the notice shall in no way affect the validity of the
assessment, the resulting tax, the procedures of any board of review or equalization, or
the enforcement of delinquent taxes by statutory means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for notices required in 2007 and
thereafter.
new text end

Sec. 29.

Minnesota Statutes 2006, section 273.123, subdivision 2, is amended to read:

Subd. 2.

Reassessment of homestead property.

The county assessor shall reassess
all homestead property located within a disaster or emergency area which is physically
damaged by the disaster or emergency and shall adjust the valuation for taxes payable the
following year to reflect the loss in market value caused by the damage as follows: Subtract
the market value of the property as reassessed from the market value of the property as
assessed new text begin under section 273.01 new text end for deleted text begin January 1 of deleted text end the year in which the disaster or emergency
occurred; multiply the remainder by a fraction, the numerator of which is the number of
full months remaining in the year on the date the disaster or emergency occurred, and the
denominator of which is 12; subtract the product of the calculation from the market value
of the property as assessed for deleted text begin January 1 of deleted text end the year in which the disaster or emergency
occurred; the remainder is the estimated market value to be used for taxes payable the
following year. The assessor shall report to the county auditor the net tax capacity based
on the assessment deleted text begin of January 1 of deleted text end new text begin for new text end the year in which the disaster or emergency occurred
and the net tax capacity based on the reassessment made pursuant to this subdivision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 30.

Minnesota Statutes 2006, section 273.123, subdivision 3, is amended to read:

Subd. 3.

Computation of local tax rates.

deleted text begin When computing deleted text end Local tax rates deleted text begin , deleted text end new text begin must
be computed by new text end the county auditor deleted text begin shall use deleted text end new text begin based upon new text end the valuation new text begin as of January 2 as
new text end reported by the assessor for the assessment deleted text begin made on January 1 of the deleted text end year in which the
disaster or emergency occurred new text begin , and as returned by the local, county, and state boards of
review and equalization and the commissioner of revenue new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 31.

Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:

Subd. 13.

Homestead application.

(a) A person who meets the homestead
requirements under subdivision 1 must file a homestead application with the county
assessor to initially obtain homestead classification.

(b) deleted text begin On or before January 2, 1993, each county assessor shall mail a homestead
application to the owner of each parcel of property within the county which was
classified as homestead for the 1992 assessment year. The format and contents of a
uniform homestead application shall be prescribed by the commissioner of revenue. The
commissioner shall consult with the chairs of the house and senate tax committees on the
contents of the homestead application form. The application must clearly inform the
taxpayer that this application must be signed by all owners who occupy the property or
by the qualifying relative and returned to the county assessor in order for the property
to continue receiving homestead treatment. The envelope containing the homestead
application shall clearly identify its contents and alert the taxpayer of its necessary
immediate response.
deleted text end

deleted text begin (c) deleted text end Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number of each occupant who is listed as an owner
of the property on the deed of record, the name and address of each owner who does not
occupy the property, and the name and Social Security number of each owner's spouse who
occupies the property. The application must be signed by each owner who occupies the
property and by each owner's spouse who occupies the property, or, in the case of property
that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not
claim another property as a homestead unless the property owner and the property owner's
spouse file with the assessor an affidavit or other proof required by the assessor stating that
the property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously
occupied with the other spouse, either of whom fail to include the other spouse's name
and Social Security number on the homestead application or provide the affidavits or
other proof requested, will be deemed to have elected to receive only partial homestead
treatment of their residence. The remainder of the residence will be classified as
nonhomestead residential. When an owner or spouse's name and Social Security number
appear on homestead applications for two separate residences and only one application is
signed, the owner or spouse will be deemed to have elected to homestead the residence for
which the application was signed.

The Social Security numbers or affidavits or other proofs of the property owners
and spouses are private data on individuals as defined by section 13.02, subdivision 12,
but, notwithstanding that section, the private data may be disclosed to the commissioner
of revenue, or, for purposes of proceeding under the Revenue Recapture Act to recover
personal property taxes owing, to the county treasurer.

deleted text begin (d) deleted text end new text begin (c) new text end If residential real estate is occupied and used for purposes of a homestead by
a relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
order for the property to receive homestead status, a homestead application must be filed
with the assessor. The Social Security number of each relative new text begin and spouse of a relative new text end
occupying the property deleted text begin and the Social Security number of each owner who is related to an
occupant of the property deleted text end shall be required on the homestead application filed under this
subdivision. If a different relative of the owner subsequently occupies the property, the
owner of the property must notify the assessor within 30 days of the change in occupancy.
The Social Security number of a relative new text begin or relative's spouse new text end occupying the property
is private data on individuals as defined by section 13.02, subdivision 12, but may be
disclosed to the commissioner of revenue new text begin , or, for the purposes of proceeding under the
Revenue Recapture Act to recover personal property taxes owing, to the county treasurer new text end .

deleted text begin (e) deleted text end new text begin (d) new text end The homestead application shall also notify the property owners that the
application filed under this section will not be mailed annually and that if the property
is granted homestead status for deleted text begin the 1993 assessment, or deleted text end any assessment year deleted text begin thereafter deleted text end ,
that same property shall remain classified as homestead until the property is sold or
transferred to another person, or the owners, the spouse of the owner, or the relatives no
longer use the property as their homestead. Upon the sale or transfer of the homestead
property, a certificate of value must be timely filed with the county auditor as provided
under section 272.115. Failure to notify the assessor within 30 days that the property has
been sold, transferred, or that the owner, the spouse of the owner, or the relative is no
longer occupying the property as a homestead, shall result in the penalty provided under
this subdivision and the property will lose its current homestead status.

deleted text begin (f) deleted text end new text begin (e) new text end If the homestead application is not returned within 30 days, the county
will send a second application to the present owners of record. The notice of proposed
property taxes prepared under section 275.065, subdivision 3, shall reflect the property's
classification. deleted text begin Beginning with assessment year 1993 for all properties, deleted text end If a homestead
application has not been filed with the county by December 15, the assessor shall classify
the property as nonhomestead for the current assessment year for taxes payable in
the following year, provided that the owner may be entitled to receive the homestead
classification by proper application under section 375.192.

deleted text begin (g) deleted text end new text begin (f) new text end At the request of the commissioner, each county must give the commissioner
a list that includes the name and Social Security number of each new text begin occupant of homestead
property who is the new text end property owner deleted text begin and the deleted text end new text begin , new text end property owner's spouse deleted text begin occupying the
property, or deleted text end new text begin , qualifying new text end relative of a property owner, deleted text begin applying for homestead classification
under this subdivision deleted text end new text begin or a spouse of a qualifying relative new text end . The commissioner shall use the
information provided on the lists as appropriate under the law, including for the detection
of improper claims by owners, or relatives of owners, under chapter 290A.

deleted text begin (h) deleted text end new text begin (g) new text end If the commissioner finds that a property owner may be claiming a
fraudulent homestead, the commissioner shall notify the appropriate counties. Within
90 days of the notification, the county assessor shall investigate to determine if the
homestead classification was properly claimed. If the property owner does not qualify,
the county assessor shall notify the county auditor who will determine the amount of
homestead benefits that had been improperly allowed. For the purpose of this section,
"homestead benefits" means the tax reduction resulting from the classification as a
homestead under section 273.13, the taconite homestead credit under section 273.135, the
residential homestead and agricultural homestead credits under section 273.1384, and the
supplemental homestead credit under section 273.1391.

The county auditor shall send a notice to the person who owned the affected property
at the time the homestead application related to the improper homestead was filed,
demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
of the homestead benefits. The person notified may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section
278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
Court within 60 days of the date of the notice from the county. Procedurally, the appeal
is governed by the provisions in chapter 271 which apply to the appeal of a property tax
assessment or levy, but without requiring any prepayment of the amount in controversy. If
the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
has been filed, the county auditor shall certify the amount of taxes and penalty to the county
treasurer. The county treasurer will add interest to the unpaid homestead benefits and
penalty amounts at the rate provided in section 279.03 for real property taxes becoming
delinquent in the calendar year during which the amount remains unpaid. Interest may be
assessed for the period beginning 60 days after demand for payment was made.

If the person notified is the current owner of the property, the treasurer may add the
total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
otherwise payable on the property by including the amounts on the property tax statements
under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
valorem taxes shall include interest accrued through December 31 of the year preceding
the taxes payable year for which the amounts are first added. These amounts, when added
to the property tax statement, become subject to all the laws for the enforcement of real or
personal property taxes for that year, and for any subsequent year.

If the person notified is not the current owner of the property, the treasurer may
collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
tax obligations of the person who owned the property at the time the application related
to the improperly allowed homestead was filed. The treasurer may relieve a prior owner
of personal liability for the homestead benefits, penalty, interest, and costs, and instead
extend those amounts on the tax lists against the property as provided in this paragraph
to the extent that the current owner agrees in writing. On all demands, billings, property
tax statements, and related correspondence, the county must list and state separately the
amounts of homestead benefits, penalty, interest and costs being demanded, billed or
assessed.

deleted text begin (i) deleted text end new text begin (h) new text end Any amount of homestead benefits recovered by the county from the property
owner shall be distributed to the county, city or town, and school district where the
property is located in the same proportion that each taxing district's levy was to the total
of the three taxing districts' levy for the current year. Any amount recovered attributable
to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
deposited in the taconite property tax relief account. Any amount recovered that is
attributable to supplemental homestead credit is to be transmitted to the commissioner of
revenue for deposit in the general fund of the state treasury. The total amount of penalty
collected must be deposited in the county general fund.

deleted text begin (j) deleted text end new text begin (i) new text end If a property owner has applied for more than one homestead and the county
assessors cannot determine which property should be classified as homestead, the county
assessors will refer the information to the commissioner. The commissioner shall make
the determination and notify the counties within 60 days.

deleted text begin (k) deleted text end new text begin (j) new text end In addition to lists of homestead properties, the commissioner may ask the
counties to furnish lists of all properties and the record owners. The Social Security
numbers and federal identification numbers that are maintained by a county or city
assessor for property tax administration purposes, and that may appear on the lists retain
their classification as private or nonpublic data; but may be viewed, accessed, and used by
the county auditor or treasurer of the same county for the limited purpose of assisting the
commissioner in the preparation of microdata samples under section 270C.12.

deleted text begin (l) deleted text end new text begin (k) new text end On or before April 30 each year beginning in 2007, each county must provide
the commissioner with the following data for each parcel of homestead property by
electronic means as defined in section 289A.02, subdivision 8:

(i) the property identification number assigned to the parcel for purposes of taxes
payable in the current year;

(ii) the name and Social Security number of each new text begin occupant of homestead property
who is the new text end property owner deleted text begin and deleted text end new text begin , new text end property owner's spouse, deleted text begin as shown on the tax rolls for the
current and the prior assessment year deleted text end new text begin qualifying relative of a property owner, or spouse
of a qualifying relative new text end ;

(iii) the classification of the property under section 273.13 for taxes payable in the
current year and in the prior year;

(iv) an indication of whether the property was classified as a homestead for taxes
payable in the current year deleted text begin or for taxes payable in the prior year deleted text end because of occupancy by
a relative of the owner or by a spouse of a relative;

(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the
current year and the prior year;

(vi) the market value of improvements to the property first assessed for tax purposes
for taxes payable in the current year;

(vii) the assessor's estimated market value assigned to the property for taxes payable
in the current year and the prior year;

(viii) the taxable market value assigned to the property for taxes payable in the
current year and the prior year;

(ix) whether there are delinquent property taxes owing on the homestead;

(x) the unique taxing district in which the property is located; and

(xi) such other information as the commissioner decides is necessary.

The commissioner shall use the information provided on the lists as appropriate
under the law, including for the detection of improper claims by owners, or relatives
of owners, under chapter 290A.

new text begin EFFECTIVE DATE. new text end

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

Sec. 32.

Minnesota Statutes 2006, section 273.124, subdivision 21, is amended to read:

Subd. 21.

Trust property; homestead.

Real property held by a trustee under a trust
is eligible for classification as homestead property if:

(1) the grantor or surviving spouse of the grantor of the trust occupies and uses the
property as a homestead;

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

(3) a family farm corporation, joint farm venture, limited liability company, or
partnership operating a family farm rents the property held by a trustee under a trust, and
the grantor, the spouse new text begin or surviving spouse new text end of the grantor, or the deleted text begin son deleted text end new text begin child new text end or deleted text begin daughter deleted text end
new text begin grandchild new text end of the grantor, who is also a shareholder, member, or partner of the corporation,
joint farm venture, limited liability company, or partnership occupies and uses the property
as a homestead, or is actively farming the property on behalf of the corporation, joint farm
venture, limited liability company, or partnership; or

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 33.

Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:

Subd. 22.

Class 1.

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

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

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

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

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

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

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

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

(3) any person who is permanently and totally disabled.

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

Property is classified and assessed pursuant to clause (1) only if the commissioner of
revenue certifies to the assessor that the homestead occupant satisfies the requirements
of this paragraph new text begin or the county assessor has approved the occupant's declaration under
section 273.1315 new text end .

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

(c) Class 1c property is commercial use real property that abuts a lakeshore line and
is devoted to temporary and seasonal residential occupancy for recreational purposes but
not devoted to commercial purposes for more than 250 days in the year preceding the
year of assessment, and that includes a portion used as a homestead by the owner, which
includes a dwelling occupied as a homestead by a shareholder of a corporation that owns
the resort, a partner in a partnership that owns the resort, or a member of a limited liability
company that owns the resort even if the title to the homestead is held by the corporation,
partnership, or limited liability company. For purposes of this clause, property is devoted
to a commercial purpose on a specific day if any portion of the property, excluding the
portion used exclusively as a homestead, is used for residential occupancy and a fee is
charged for residential occupancy. The portion of the property used as a homestead is class
1a property under paragraph (a). The remainder of the property is classified as follows:
the first $500,000 of market value is tier I, the next $1,700,000 of market value is tier II,
and any remaining market value is tier III. The class rates for class 1c are: tier I, 0.55
percent; tier II, 1.0 percent; and tier III, 1.25 percent. If a class 1c resort property has any
market value in tier III, the entire property must meet the requirements of subdivision 25,
paragraph (d), clause (1), to qualify for class 1c treatment under this paragraph.

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 34.

Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:

Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more
units and used or held for use by the owner or by the tenants or lessees of the owner
as a residence for rental periods of 30 days or more, excluding property qualifying for
class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
than hospitals exempt under section 272.02, and contiguous property used for hospital
purposes, without regard to whether the property has been platted or subdivided. The
market value of class 4a property has a class rate of 1.25 percent.

(b) Class 4b includes:

(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;

(2) manufactured homes not classified under any other provision;

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and

(4) unimproved property that is classified residential as determined under subdivision
33.

The market value of class 4b property has a class rate of 1.25 percent.

(c) Class 4bb includes:

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

(2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b).

Class 4bb property has the same class rates as class 1a property under subdivision 22.

Property that has been classified as seasonal residential recreational property at
any time during which it has been owned by the current owner or spouse of the current
owner does not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), real property devoted to
temporary and seasonal residential occupancy for recreation purposes, including real
property devoted to temporary and seasonal residential occupancy for recreation purposes
and not devoted to commercial purposes for more than 250 days in the year preceding
the year of assessment. For purposes of this clause, property is devoted to a commercial
purpose on a specific day if any portion of the property is used for residential occupancy,
and a fee is charged for residential occupancy. In order for a property to be classified as
class 4c, seasonal residential recreational for commercial purposes, at least 40 percent of
the annual gross lodging receipts related to the property must be from business conducted
during 90 consecutive days and either (i) at least 60 percent of all paid bookings by lodging
guests during the year must be for periods of at least two consecutive nights; or (ii) at least
20 percent of the annual gross receipts must be from charges for rental of fish houses,
boats and motors, snowmobiles, downhill or cross-country ski equipment, or charges for
marina services, launch services, and guide services, or the sale of bait and fishing tackle.
For purposes of this determination, a paid booking of five or more nights shall be counted
as two bookings. Class 4c also includes commercial use real property used exclusively
for recreational purposes in conjunction with class 4c property devoted to temporary
and seasonal residential occupancy for recreational purposes, up to a total of two acres,
provided the property is not devoted to commercial recreational use for more than 250
days in the year preceding the year of assessment and is located within two miles of the
class 4c property with which it is used. Owners of real property devoted to temporary and
seasonal residential occupancy for recreation purposes and all or a portion of which was
devoted to commercial purposes for not more than 250 days in the year preceding the year
of assessment desiring classification as class 1c or 4c, must submit a declaration to the
assessor designating the cabins or units occupied for 250 days or less in the year preceding
the year of assessment by January 15 of the assessment year. Those cabins or units and a
proportionate share of the land on which they are located will be designated class 1c or 4c
as otherwise provided. The remainder of the cabins or units and a proportionate share of
the land on which they are located will be designated as class 3a. The owner of property
desiring designation as class 1c or 4c property must provide guest registers or other
records demonstrating that the units for which class 1c or 4c designation is sought were
not occupied for more than 250 days in the year preceding the assessment if so requested.
The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, and (4) other
nonresidential facility operated on a commercial basis not directly related to temporary and
seasonal residential occupancy for recreation purposes shall not qualify for class 1c or 4c;

(2) qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;

(3) real property up to a maximum of one acre of land owned by a nonprofit
community service oriented organization; provided that the property is not used for a
revenue-producing activity for more than six days in the calendar year preceding the year
of assessment and the property is not used for residential purposes on either a temporary
or permanent basis. For purposes of this clause, a "nonprofit community service oriented
organization" means any corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious, fraternal, civic, or educational
purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3),
(10), or (19) of the Internal Revenue Code of 1986, as amended through December 31,
1990. For purposes of this clause, "revenue-producing activities" shall include but not be
limited to property or that portion of the property that is used as an on-sale intoxicating
liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant
open to the public, bowling alley, a retail store, gambling conducted by organizations
licensed under chapter 349, an insurance business, or office or other space leased or
rented to a lessee who conducts a for-profit enterprise on the premises. Any portion of
the property which is used for revenue-producing activities for more than six days in the
calendar year preceding the year of assessment shall be assessed as class 3a. The use of
the property for social events open exclusively to members and their guests for periods of
less than 24 hours, when an admission is not charged nor any revenues are received by the
organization shall not be considered a revenue-producing activity;

(4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;

(5) manufactured home parks as defined in section 327.14, subdivision 3;

(6) deleted text begin real property that is actively and exclusively devoted to indoor fitness, health,
social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
and is located within the metropolitan area as defined in section 473.121, subdivision 2;
deleted text end

deleted text begin (7) deleted text end a leased or privately owned noncommercial aircraft storage hangar not exempt
under section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the
leased premise, prohibits commercial activity performed at the hangar.

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale;

deleted text begin (8) deleted text end new text begin (7) new text end a privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the aircraft storage hangar provides the assessor with a signed
agreement restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and

deleted text begin (9) deleted text end new text begin (8) new text end residential real estate, a portion of which is used by the owner for homestead
purposes, and that is also a place of lodging, if all of the following criteria are met:

(i) rooms are provided for rent to transient guests that generally stay for periods
of 14 or fewer days;

(ii) meals are provided to persons who rent rooms, the cost of which is incorporated
in the basic room rate;

(iii) meals are not provided to the general public except for special events on fewer
than seven days in the calendar year preceding the year of the assessment; and

(iv) the owner is the operator of the property.

The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22.

Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) manufactured home parks assessed under
clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
residential recreational property has a class rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a class rate of one percent, (v) the market value
of property described in deleted text begin clauses deleted text end new text begin clause new text end (2) deleted text begin and (6) deleted text end has a class rate of 1.25 percent, and
(vi) that portion of the market value of property in clause deleted text begin (9) deleted text end new text begin (8) new text end qualifying for class 4c
property has a class rate of 1.25 percent.

(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
of the units in the building qualify as low-income rental housing units as certified under
section 273.128, subdivision 3, only the proportion of qualifying units to the total number
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2008 and
thereafter.
new text end

Sec. 35.

Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read:

Subd. 4.

Disparity reduction credit.

(a) Beginning with taxes payable in 1989,
class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1)
the property is located in a border city that has an enterprise zone designated pursuant
to section 469.168, subdivision 4; (2) the property is located in a city with a population
greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the
city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city
in another state; and (4) the adjacent city in the other state has a population of greater than
5,000 and less than 75,000 new text begin according to the 1980 decennial census new text end .

(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class
3b property to 2.3 percent of market value.

(c) The county auditor shall annually certify the costs of the credits to the
Department of Revenue. The department shall reimburse local governments for the
property taxes foregone as the result of the credits in proportion to their total levies.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxes payable in
2001 and thereafter.
new text end

Sec. 36.

Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read:

Subd. 2.

Listing and assessment by commissioner.

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 37.

Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read:

Subd. 2.

Listing and assessment by commissioner.

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 38.

Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read:

Subdivision 1.

Report required.

Every electric light, power, gas, water, express,
stage, and transportation company and pipeline doing business in Minnesota shall
annually file with the commissioner on or before March 31 a report under oath setting
forth the information prescribed by the commissioner to enable the commissioner to make
valuations, recommended valuations, and equalization required under sections 273.33,
273.35, 273.36, deleted text begin and deleted text end 273.37 new text begin , and 273.3711 new text end . If all the required information is not available
on March 31, the company or pipeline shall file the information that is available on or
before March 31, and the balance of the information as soon as it becomes available.

new text begin EFFECTIVE DATE. new text end

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

Sec. 39.

new text begin [273.3711] RECOMMENDED AND ORDERED VALUES.
new text end

new text begin For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372,
all values not required to be listed and assessed by the commissioner of revenue are
recommended values.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 40.

Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read:

Subdivision 1.

Ordinary board; meetings, deadlines, grievances.

(a) The town
board of a town, or the council or other governing body of a city, is the board of appeal
and equalization except (1) in cities whose charters provide for a board of equalization or
(2) in any city or town that has transferred its local board of review power and duties to
the county board as provided in subdivision 3. The county assessor shall fix a day and
time when the board or the board of equalization shall meet in the assessment districts
of the county. Notwithstanding any law or city charter to the contrary, a city board of
equalization shall be referred to as a board of appeal and equalization. On or before
February 15 of each year the assessor shall give written notice of the time to the city or
town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings
must be held between April 1 and May 31 each year. The clerk shall give published and
posted notice of the meeting at least ten days before the date of the meeting.

The board shall meet at the office of the clerk to review the assessment and
classification of property in the town or city. No changes in valuation or classification
which are intended to correct errors in judgment by the county assessor may be made by
the county assessor after the board has adjourned in those cities or towns that hold a
local board of review; however, corrections of errors that are merely clerical in nature or
changes that extend homestead treatment to property are permitted after adjournment until
the tax extension date for that assessment year. The changes must be fully documented and
maintained in the assessor's office and must be available for review by any person. A copy
of the changes made during this period in those cities or towns that hold a local board of
review must be sent to the county board no later than December 31 of the assessment year.

(b) The board shall determine whether the taxable property in the town or city has
been properly placed on the list and properly valued by the assessor. If real or personal
property has been omitted, the board shall place it on the list with its market value, and
correct the assessment so that each tract or lot of real property, and each article, parcel,
or class of personal property, is entered on the assessment list at its market value. No
assessment of the property of any person may be raised unless the person has been
duly notified of the intent of the board to do so. On application of any person feeling
aggrieved, the board shall review the assessment or classification, or both, and correct
it as appears just. The board may not make an individual market value adjustment or
classification change that would benefit the property if the owner or other person having
control over the property has refused the assessor access to inspect the property and the
interior of any buildings or structures as provided in section 273.20. new text begin A board member
shall not participate in any actions of the board which result in market value adjustments
or classification changes to property owned by the board member, the spouse, parent,
stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew,
or niece of a board member, or property in which a board member has a financial interest.
The relationship may be by blood or marriage.
new text end

(c) A local board may reduce assessments upon petition of the taxpayer but the total
reductions must not reduce the aggregate assessment made by the county assessor by more
than one percent. If the total reductions would lower the aggregate assessments made by
the county assessor by more than one percent, none of the adjustments may be made. The
assessor shall correct any clerical errors or double assessments discovered by the board
without regard to the one percent limitation.

(d) A local board does not have authority to grant an exemption or to order property
removed from the tax rolls.

(e) A majority of the members may act at the meeting, and adjourn from day to day
until they finish hearing the cases presented. The assessor shall attend, with the assessment
books and papers, and take part in the proceedings, but must not vote. The county assessor,
or an assistant delegated by the county assessor shall attend the meetings. The board shall
list separately, on a form appended to the assessment book, all omitted property added
to the list by the board and all items of property increased or decreased, with the market
value of each item of property, added or changed by the board, placed opposite the item.
The county assessor shall enter all changes made by the board in the assessment book.

(f) Except as provided in subdivision 3, if a person fails to appear in person, by
counsel, or by written communication before the board after being duly notified of the
board's intent to raise the assessment of the property, or if a person feeling aggrieved by an
assessment or classification fails to apply for a review of the assessment or classification,
the person may not appear before the county board of appeal and equalization for a review
of the assessment or classification. This paragraph does not apply if an assessment was
made after the local board meeting, as provided in section 273.01, or if the person can
establish not having received notice of market value at least five days before the local
board meeting.

(g) The local board must complete its work and adjourn within 20 days from the
time of convening stated in the notice of the clerk, unless a longer period is approved by
the commissioner of revenue. No action taken after that date is valid. All complaints
about an assessment or classification made after the meeting of the board must be heard
and determined by the county board of equalization. A nonresident may, at any time,
before the meeting of the board file written objections to an assessment or classification
with the county assessor. The objections must be presented to the board at its meeting by
the county assessor for its consideration.

new text begin EFFECTIVE DATE. new text end

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

Sec. 41.

Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read:

Subdivision 1.

Members; meetings; rules for equalizing assessments.

The county
commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be
present, the deputy county auditor, or, if there is no deputy, the court administrator of the
district court, shall form a board for the equalization of the assessment of the property
of the county, including the property of all cities whose charters provide for a board of
equalization. This board shall be referred to as the county board of appeal and equalization.
The board shall meet annually, on the date specified in section 274.14, at the office of the
auditor. Each member shall take an oath to fairly and impartially perform duties as a
member. new text begin Members shall not participate in any actions of the board which result in market
value adjustments or classification changes to property owned by the board member, the
spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle,
aunt, nephew, or niece of a board member, or property in which a board member has a
financial interest. The relationship may be by blood or marriage. new text end The board shall examine
and compare the returns of the assessment of property of the towns or districts, and
equalize them so that each tract or lot of real property and each article or class of personal
property is entered on the assessment list at its market value, subject to the following rules:

(1) The board shall raise the valuation of each tract or lot of real property which
in its opinion is returned below its market value to the sum believed to be its market
value. The board must first give notice of intention to raise the valuation to the person in
whose name it is assessed, if the person is a resident of the county. The notice must fix
a time and place for a hearing.

(2) The board shall reduce the valuation of each tract or lot which in its opinion is
returned above its market value to the sum believed to be its market value.

(3) The board shall raise the valuation of each class of personal property which
in its opinion is returned below its market value to the sum believed to be its market
value. It shall raise the aggregate value of the personal property of individuals, firms, or
corporations, when it believes that the aggregate valuation, as returned, is less than the
market value of the taxable personal property possessed by the individuals, firms, or
corporations, to the sum it believes to be the market value. The board must first give notice
to the persons of intention to do so. The notice must set a time and place for a hearing.

(4) The board shall reduce the valuation of each class of personal property that
is returned above its market value to the sum it believes to be its market value. Upon
complaint of a party aggrieved, the board shall reduce the aggregate valuation of the
individual's personal property, or of any class of personal property for which the individual
is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes
was the market value of the individual's personal property of that class.

(5) The board must not reduce the aggregate value of all the property of its county, as
submitted to the county board of equalization, with the additions made by the auditor under
this chapter, by more than one percent of its whole valuation. The board may raise the
aggregate valuation of real property, and of each class of personal property, of the county,
or of any town or district of the county, when it believes it is below the market value of the
property, or class of property, to the aggregate amount it believes to be its market value.

(6) The board shall change the classification of any property which in its opinion
is not properly classified.

(7) The board does not have the authority to grant an exemption or to order property
removed from the tax rolls.

new text begin EFFECTIVE DATE. new text end

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

Sec. 42.

new text begin [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION
COURSE AND MEETING REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Handbook for county boards. new text end

new text begin By no later than January 1, 2009, the
commissioner of revenue must develop a handbook detailing procedures, responsibilities,
and requirements for county boards of appeal and equalization. The handbook must
include, but need not be limited to, the role of the county board in the assessment process,
the legal and policy reasons for fair and impartial appeal and equalization hearings, county
board meeting procedures that foster fair and impartial assessment reviews and other best
practices recommendations, quorum requirements for county boards, and explanations
of alternate methods of appeal.
new text end

new text begin Subd. 2. new text end

new text begin Appeals and equalization course. new text end

new text begin Beginning in 2009, and each year
thereafter, there must be at least one member at each meeting of a county board of appeal
and equalization who has attended an appeals and equalization course developed or
approved by the commissioner within the last four years, as certified by the commissioner.
The course may be offered in conjunction with a meeting of the Minnesota Association
of Assessment Officers. The course content must include, but need not be limited to, a
review of the handbook developed by the commissioner under subdivision 1.
new text end

new text begin Subd. 3. new text end

new text begin Proof of compliance; transfer of duties. new text end

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 43.

Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

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

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

(c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the case
of a town, or in the case of the state general tax, the final tax amount will be its proposed
tax. In the case of taxing authorities required to hold a public meeting under subdivision 6,
the notice must clearly state that each taxing authority, including regional library districts
established under section 134.201, and including the metropolitan taxing districts as
defined in paragraph (i), but excluding all other special taxing districts and towns, will
hold a public meeting to receive public testimony on the proposed budget and proposed or
final property tax levy, or, in case of a school district, on the current budget and proposed
property tax levy. It must clearly state the time and place of each taxing authority's
meeting, a telephone number for the taxing authority that taxpayers may call if they have
questions related to the notice, and an address where comments will be received by mail.

(d) The notice must state for each parcel:

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

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

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

(ii) the proposed tax amount.

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

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

(3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.

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

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

(1) special assessments;

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

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

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

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

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

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

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

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

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

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

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

(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special
taxing districts" means the following taxing districts in the seven-county metropolitan area
that levy a property tax for any of the specified purposes listed below:

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

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

(3) Metropolitan Mosquito Control Commission under section 473.711.

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

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

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

(2) population growth and decline;

(3) state or federal government action; and

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for notices required in 2007 and
thereafter, for taxes payable in 2008 and thereafter.
new text end

Sec. 44.

Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read:

Subd. 5a.

Public advertisement.

(a) A city that has a population of more than
2,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph
(i), a regional library district established under section 134.201, or school district shall
advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or,
in the case of a school district, to review its current budget and proposed property taxes
payable in the following year, at a public hearing, if a public hearing is required under
subdivision 6. The notice must be published not less than two business days nor more
than six business days before the hearing.

The advertisement must be at least one-eighth page in size of a standard-size or a
tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper
where legal notices and classified advertisements appear. The advertisement must be
published in an official newspaper of general circulation in the taxing authority. The
newspaper selected must be one of general interest and readership in the community, and
not one of limited subject matter. The advertisement must appear in a newspaper that is
published at least once per week.

For purposes of this section, the metropolitan special taxing district's advertisement
must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer
Press.

In addition to other requirements, a county and a city having a population of
more than 2,500 must show in the public advertisement required under this subdivision
the current local tax rate, the proposed local tax rate if no property tax levy increase
is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this
subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by
the city's or county's taxable net tax capacity.

(b) new text begin Subject to the provisions of paragraph (g), new text end the advertisement for school districts,
metropolitan special taxing districts, and regional library districts must be in the following
form, except that the notice for a school district may include references to the current
budget in regard to proposed property taxes.

"NOTICE OF

PROPOSED PROPERTY TAXES

(School District/Metropolitan

Special Taxing District/Regional

Library District) of .........

The governing body of ........ will soon hold budget hearings and vote on the property
taxes for (metropolitan special taxing district/regional library district services that will be
provided in (year)/school district services that will be provided in (year) and (year)).

NOTICE OF PUBLIC HEARING:

All concerned citizens are invited to attend a public hearing and express their opinions
on the proposed (school district/metropolitan special taxing district/regional library
district) budget and property taxes, or in the case of a school district, its current budget
and proposed property taxes, payable in the following year. The hearing will be held on
(Month/Day/Year) at (Time) at (Location, Address)."

(c) new text begin Subject to the provisions of paragraph (g), new text end the advertisement for cities and
counties must be in the following form.

"NOTICE OF PROPOSED

TOTAL BUDGET AND PROPERTY TAXES

The (city/county) governing body or board of commissioners will hold a public hearing to
discuss the budget and to vote on the amount of property taxes to collect for services the
(city/county) will provide in (year).

SPENDING: The total budget amounts below compare (city's/county's) (year) total actual
budget with the amount the (city/county) proposes to spend in (year).

(Year) Total Actual Budget		Proposed (Year) Budget		Change from (Year)-(Year)
$...........		$...........		.....%

TAXES: The property tax amounts below compare that portion of the current budget
levied in property taxes in (city/county) for (year) with the property taxes the (city/county)
proposes to collect in (year).

(Year) Property Taxes		Proposed (Year) Property Taxes		Change from (Year)-(Year)
$...........		$...........		.....%

LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax
levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.

(Year) Tax Rate		(Year) Tax Rate if NO Levy Increase		(Year) Proposed Tax Rate
...........		...........		.....

ATTEND THE PUBLIC HEARING

All (city/county) residents are invited to attend the public hearing of the (city/county) to
express your opinions on the budget and the proposed amount of (year) property taxes.
The hearing will be held on:

(Month/Day/Year/Time)

(Location/Address)

If the discussion of the budget cannot be completed, a time and place for continuing the
discussion will be announced at the hearing. You are also invited to send your written
comments to:

(City/County)

(Location/Address)"

(d) For purposes of this subdivision, the budget amounts listed on the advertisement
mean:

(1) for cities, the total government fund expenditures, as defined by the state auditor
under section 471.6965, less any expenditures for improvements or services that are
specially assessed or charged under chapter 429, 430, 435, or the provisions of any other
law or charter; and

(2) for counties, the total government fund expenditures, as defined by the state
auditor under section 375.169, less any expenditures for direct payments to recipients or
providers for the human service aids listed below:

(i) Minnesota family investment program under chapters 256J and 256K;

(ii) medical assistance under sections 256B.041, subdivision 5, and 256B.19,
subdivision 1;

(iii) general assistance medical care under section 256D.03, subdivision 6;

(iv) general assistance under section 256D.03, subdivision 2;

(v) emergency assistance under section 256J.48;

(vi) Minnesota supplemental aid under section 256D.36, subdivision 1;

(vii) preadmission screening under section 256B.0911, and alternative care grants
under section 256B.0913;

(viii) general assistance medical care claims processing, medical transportation and
related costs under section 256D.03, subdivision 4;

(ix) medical transportation and related costs under section 256B.0625, subdivisions
17 to 18a;

(x) group residential housing under section 256I.05, subdivision 8, transferred from
programs in clauses (iv) and (vi); or

(xi) any successor programs to those listed in clauses (i) to (x).

(e) A city with a population of over 500 but not more than 2,500 that is required to
hold a public hearing under subdivision 6 must advertise by posted notice as defined in
section 645.12, subdivision 1. The advertisement must be posted at the time provided in
paragraph (a). It must be in the form required in paragraph (b).

(f) For purposes of this subdivision, the population of a city is the most recent
population as determined by the state demographer under section 4A.02.

(g) The commissioner of revenue deleted text begin , subject to the approval of the chairs of the house
and senate tax committees, deleted text end shall new text begin annually new text end prescribe the new text begin specific new text end form and format of the
advertisements required under this subdivision new text begin , including such details as font size and
style, and spacing for the required items. The commissioner may prescribe alternate and
additional language for the advertisement for a taxing authority or for groups of taxing
authorities. At least two weeks before November 29 each year, the commissioner shall
provide a copy of the prescribed advertisements to the chairs of the committees of the
house of representatives and the senate with jurisdiction over taxes new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for advertisements in 2007 and
thereafter, for proposed taxes payable in 2008 and thereafter.
new text end

Sec. 45.

Minnesota Statutes 2006, section 275.067, is amended to read:

275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE;
CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS.

Special taxing districts as defined in section 275.066 organized on or before July 1 in
deleted text begin a deleted text end new text begin the current new text end calendar year deleted text begin may deleted text end new text begin , and special taxing districts organized in a prior year that
have not previously certified a levy to the county auditor, are allowed to new text end certify a levy to
the county auditor in deleted text begin that same deleted text end new text begin the current new text end year for property taxes or special assessments
to be payable in the following calendar year to the extent that the special taxing district is
authorized by statute or special act to levy taxes or special assessments new text begin , but only if the
county auditor receives written notice from the district on or before July 1 of the current
year that the district may be certifying a levy in the current year, and the notice includes a
complete list or other description of the tax parcels in the district and a map showing the
boundaries of the district new text end . Special taxing districts organized after July 1 in a calendar year
may not certify a levy of property taxes or special assessments to the county auditor under
the powers granted to them by statute or special act new text begin and subject to the requirements of
this section new text end until the following calendar year. new text begin All special taxing districts must notify the
county auditor by July 1 in order for its boundaries for the levy to be certified that year
to be different than its boundaries for levies certified in prior years, and the notice must
include a complete list or other description of the tax parcels within the new boundaries
and a map showing the new boundaries of the district. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2008 and
thereafter.
new text end

Sec. 46.

Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Electronic tax statements. new text end

new text begin Upon written request by the owner of real
property located in the county, or by the owner's agent, a county may send tax statements
by electronic means instead of by mailing. For the purposes of the payment deadlines
specified in section 279.01, the postmark date on the envelope containing these property
tax statements is the date the statements were sent by electronic means.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax statements for taxes payable
in 2008 and thereafter.
new text end

Sec. 47.

Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read:

Subd. 2.

Partial payments.

The county treasurer may accept payments of more or
less than the exact amount of a tax installment due. new text begin Payments must be applied first to the
oldest installment that is due but which has not been fully paid. new text end If the accepted payment is
less than the amount due, deleted text begin payments must be deleted text end new text begin the payment is new text end applied first to the penalty
accrued for the year deleted text begin the payment is made deleted text end new text begin or the installment being paid new text end . Acceptance of
partial payment of tax does not constitute a waiver of the minimum payment required as a
condition for filing an appeal under section 278.03 or any other law, nor does it affect the
order of payment of delinquent taxes under section 280.39.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments made on or after the
day following final enactment.
new text end

Sec. 48.

Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read:

Subdivision 1.

Due dates; penalties.

Except as provided in subdivision 3 or 4, on
May 16 or 21 days after the postmark date on the envelope containing the property tax
statement, whichever is later, a penalty deleted text begin shall accrue deleted text end new text begin accrues new text end and thereafter deleted text begin be deleted text end new text begin is new text end charged
upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer.
The penalty deleted text begin shall be deleted text end new text begin is new text end at a rate of two percent on homestead property until May 31 and
four percent on June 1. The penalty on nonhomestead property deleted text begin shall be deleted text end new text begin is new text end at a rate of four
percent until May 31 and eight percent on June 1. This penalty deleted text begin shall deleted text end new text begin does new text end not accrue until
June 1 of each year, or 21 days after the postmark date on the envelope containing the
property tax statements, whichever is later, on commercial use real property used for
seasonal residential recreational purposes and classified as class 1c or 4c, and on other
commercial use real property classified as class 3a, provided that over 60 percent of the
gross income earned by the enterprise on the class 3a property is earned during the months
of May, June, July, and August. deleted text begin Any property owner of such class 3a property who pays deleted text end
new text begin In order for new text end the first half of the tax due on deleted text begin the deleted text end new text begin class 3a new text end property new text begin to be paid new text end after May 15
and before June 1, or 21 days after the postmark date on the envelope containing the
property tax statement, whichever is later, deleted text begin shall deleted text end new text begin without penalty, the owner of the property
must new text end attach an affidavit to the payment attesting to compliance with the income provision
of this subdivision. Thereafter, for both homestead and nonhomestead property, on the
first day of each month beginning July 1, up to and including October 1 following, an
additional penalty of one percent for each month deleted text begin shall accrue deleted text end new text begin accrues new text end and deleted text begin be deleted text end new text begin is new text end charged on
all such unpaid taxes provided that if the due date was extended beyond May 15 as the
result of any delay in mailing property tax statements no additional penalty shall accrue
if the tax is paid by the extended due date. If the tax is not paid by the extended due
date, then all penalties that would have accrued if the due date had been May 15 shall be
charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid
prior to May 16 or 21 days after the postmark date on the envelope containing the property
tax statement, whichever is later; and, if so paid, no penalty deleted text begin shall attach deleted text end new text begin attaches new text end ; the
remaining one-half deleted text begin shall deleted text end new text begin may new text end be paid at any time prior to October 16 following, without
penalty; but, if not so paid, then a penalty of two percent deleted text begin shall accrue deleted text end new text begin accrues new text end thereon for
homestead property and a penalty of four percent on nonhomestead property. Thereafter,
for homestead property, on the first day of November an additional penalty of four percent
deleted text begin shall accrue deleted text end new text begin accrues new text end and on the first day of December following, an additional penalty of
two percent deleted text begin shall accrue deleted text end new text begin accrues new text end and deleted text begin be deleted text end new text begin is new text end charged on all such unpaid taxes. Thereafter,
for nonhomestead property, on the first day of November and December following, an
additional penalty of four percent for each month deleted text begin shall accrue deleted text end new text begin accrues new text end and deleted text begin be deleted text end new text begin is new text end charged
on all such unpaid taxes. If one-half of such taxes deleted text begin shall deleted text end new text begin are new text end not deleted text begin be deleted text end paid prior to May 16 or
21 days after the postmark date on the envelope containing the property tax statement,
whichever is later, the same may be paid at any time prior to October 16, with accrued
penalties to the date of payment added, and thereupon no penalty deleted text begin shall attach deleted text end new text begin attaches new text end to
the remaining one-half until October 16 following.

This section applies to payment of personal property taxes assessed against
improvements to leased property, except as provided by section 277.01, subdivision 3.

A county may provide by resolution that in the case of a property owner that has
multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in
installments as provided in this subdivision.

The county treasurer may accept payments of more or less than the exact amount of
a tax installment due. new text begin Payments must be applied first to the oldest installment that is due
but which has not been fully paid. new text end If the accepted payment is less than the amount due,
payments must be applied first to the penalty accrued for the year deleted text begin the payment is made deleted text end new text begin
or the installment being paid new text end . Acceptance of partial payment of tax does not constitute
a waiver of the minimum payment required as a condition for filing an appeal under
section 278.03 or any other law, nor does it affect the order of payment of delinquent
taxes under section 280.39.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments made on or after the
day following final enactment.
new text end

Sec. 49.

Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read:

Subd. 3.

Claimant.

(a) "Claimant" means new text begin : new text end

new text begin (1) new text end a person, as that term is defined in section 290.01, subdivision 2, who owns
forest land in Minnesota and files an application authorized by the Sustainable Forest
Incentive Act deleted text begin . Claimant includes deleted text end new text begin ;
new text end

new text begin (2) new text end a purchaser or grantee if property enrolled in the program was sold or transferred
after the original application was filed and prior to the annual incentive payment being
made deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) an owner of land previously covered by an auxiliary forest contract that
automatically qualifies for inclusion in the Sustainable Forest Incentive Act program
pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
new text end

The purchaser or grantee must notify the commissioner in writing of the sale or
transfer of the property. new text begin Owners of land that qualifies for inclusion pursuant to section
88.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing
of the expiration of the auxiliary forest contract or land trade with a governmental unit and
submit an application to the commissioner by August 15 in order to be eligible to receive a
payment by October 1 of that same year. new text end For purposes of section 290C.11, claimant also
includes any person bound by the covenant required in section 290C.04.

(b) No more than one claimant is entitled to a payment under this chapter with
respect to any tract, parcel, or piece of land enrolled under this chapter that has been
assigned the same parcel identification number. When enrolled forest land is owned by
two or more persons, the owners must determine between them which person is eligible to
claim the payments provided under sections 290C.01 to 290C.11. In the case of property
sold or transferred, the former owner and the purchaser or grantee must determine between
them which person is eligible to claim the payments provided under sections 290C.01 to
290C.11. The owners, transferees, or grantees must notify the commissioner in writing
which person is eligible to claim the payments.

new text begin EFFECTIVE DATE. new text end

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

Sec. 50.

Minnesota Statutes 2006, section 290C.04, is amended to read:

290C.04 APPLICATIONS.

(a) A landowner may apply to enroll forest land for the sustainable forest incentive
program under this chapter. The claimant must complete, sign, and submit an application
to the commissioner by September 30 in order for the land to become eligible beginning
in the next year. The application shall be on a form prescribed by the commissioner and
must include the information the commissioner deems necessary. At a minimum, the
application must show the following information for the land and the claimant: (i) the
claimant's Social Security number or state or federal business tax registration number and
date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's
parcel identification numbers for the tax parcels that completely contain the claimant's
forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment
in the program, (vi) the approved plan writer's signature and identification number, and
(vii) proof, in a form specified by the commissioner, that the claimant has executed and
acknowledged in the manner required by law for a deed, and recorded, a covenant that the
land is not and shall not be developed in a manner inconsistent with the requirements and
conditions of this chapter. The covenant shall state in writing that the covenant is binding
on the claimant and the claimant's successor or assignee, and that it runs with the land
for a period of not less than eight years. The commissioner shall specify the form of the
covenant and provide copies upon request. The covenant must include a legal description
that encompasses all the forest land that the claimant wishes to enroll under this section or
the certificate of title number for that land if it is registered land.

(b) In all cases, the commissioner shall notify the claimant within 90 days after
receipt of a completed application that either the land has or has not been approved for
enrollment. A claimant whose application is denied may appeal the denial as provided in
section deleted text begin 290C.11, paragraph (a) deleted text end new text begin 290C.13 new text end .

(c) Within 90 days after the denial of an application, or within 90 days after the
final resolution of any appeal related to the denial, the commissioner shall execute and
acknowledge a document releasing the land from the covenant required under this chapter.
The document must be mailed to the claimant and is entitled to be recorded.

(d) The Social Security numbers collected from individuals under this section are
private data as provided in section 13.355. The federal business tax registration number
and date of birth data collected under this section are also private data on individuals or
nonpublic data, as defined in section 13.02, subdivisions 9 and 12, but may be shared
with county assessors for purposes of tax administration and with county treasurers for
purposes of the revenue recapture under chapter 270A.

new text begin EFFECTIVE DATE. new text end

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

Sec. 51.

Minnesota Statutes 2006, section 290C.05, is amended to read:

290C.05 ANNUAL CERTIFICATION.

On or before July 1 of each year, beginning with the year after the new text begin original new text end claimant
has received an approved application, the commissioner shall send each claimant enrolled
under the sustainable forest incentive program a certification form. new text begin For purposes of this
section, the original claimant is the person that filed the first application under section
290C.04 to enroll the land in the program. new text end The claimant must sign the certification,
attesting that the requirements and conditions for continued enrollment in the program are
currently being met, and must return the signed certification form to the commissioner by
August 15 of that same year. If the claimant does not return an annual certification form
by the due date, the provisions in section 290C.11 apply.

new text begin EFFECTIVE DATE. new text end

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

Sec. 52.

Minnesota Statutes 2006, section 290C.11, is amended to read:

290C.11 PENALTIES FOR REMOVAL.

(a) If the commissioner determines that land enrolled in the sustainable forest
incentive program is in violation of the conditions for enrollment as specified in section
290C.03, the commissioner shall notify the claimant of the intent to remove all enrolled
land from the sustainable forest incentive program. The claimant has 60 days to appeal
this determination new text begin under the provisions of section 290C.13 new text end . deleted text begin The appeal must be made
in writing to the commissioner, who shall, within 60 days, notify the claimant as to the
outcome of the appeal. Within 60 days after the commissioner denies an appeal, or within
120 days after the commissioner received a written appeal if the commissioner has not
made a determination in that time, the owner may appeal to Tax Court under chapter 271
as if the appeal is from an order of the commissioner. deleted text end

(b) If the commissioner determines the land is to be removed from the sustainable
forest incentive program, the claimant is liable for payment to the commissioner in the
amount equal to the payments received under this chapter for the previous four-year
period, plus interest. The claimant has 90 days to satisfy the payment for removal of land
from the sustainable forest incentive program under this section. If the penalty is not paid
within the 90-day period under this paragraph, the commissioner shall certify the amount
to the county auditor for collection as a part of the general ad valorem real property taxes
on the land in the following taxes payable year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 53.

new text begin [290C.13] APPEALS.
new text end

new text begin Subdivision 1. new text end

new text begin Claimant right to reconsideration. new text end

new text begin A claimant may obtain
reconsideration by the commissioner of a determination removing enrolled land from the
sustainable forest incentive program, a determination denying an application to enroll land
in the program, or a denial of part or all of an incentive payment by filing an administrative
appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if
the action taken by the commissioner is the outcome of an administrative appeal.
new text end

new text begin Subd. 2. new text end

new text begin Appeal by claimant. new text end

new text begin A claimant who wishes to seek administrative review
must follow the procedures in subdivision 4.
new text end

new text begin Subd. 3. new text end

new text begin Notice date. new text end

new text begin For purposes of this section, the term "notice date" means
the date of the determination removing enrolled land or the date of the notice denying an
application to enroll land or denying part or all of an incentive payment.
new text end

new text begin Subd. 4. new text end

new text begin Time and content for administrative appeal. new text end

new text begin Within 60 days after the
notice date, the claimant must file a written appeal with the commissioner. The appeal
need not be in any particular form but must contain the following information:
new text end

new text begin (1) name and address of the claimant;
new text end

new text begin (2) if a corporation, the state of incorporation of the claimant, and the principal
place of business of the corporation;
new text end

new text begin (3) the Minnesota or federal business identification number or Social Security
number of the claimant;
new text end

new text begin (4) the date;
new text end

new text begin (5) the periods involved and the amount of payment involved for each year or period;
new text end

new text begin (6) the findings in the notice that the claimant disputes;
new text end

new text begin (7) a summary statement that the claimant relies on for each exception; and
new text end

new text begin (8) the claimant's signature or signature of the claimant's duly authorized agent.
new text end

new text begin Subd. 5. new text end

new text begin Extensions. new text end

new text begin When requested in writing and within the time allowed for
filing an administrative appeal, the commissioner may extend the time for filing an appeal
for a period not more than 30 days from the expiration of the 60 days from the notice date.
new text end

new text begin Subd. 6. new text end

new text begin Determination of appeal. new text end

new text begin On the basis of applicable law and available
information, the commissioner shall determine the validity, if any, in whole or in part,
of the appeal and notify the claimant of the decision. This notice must be in writing
and contain the basis for the determination.
new text end

new text begin Subd. 7. new text end

new text begin Agreement determining issues under appeal. new text end

new text begin When it appears to be in
the best interests of the state, the commissioner may settle the amount of any incentive
payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties,
or interest that the commissioner has under consideration by virtue of an appeal filed
under this section. An agreement must be in writing and signed by the commissioner and
the claimant, or the claimant's representative authorized by the claimant to enter into an
agreement. The agreement is final and conclusive and, except upon a showing of fraud or
malfeasance, or misrepresentation of a material fact, the case must not be reopened as to
the matters agreed upon.
new text end

new text begin Subd. 8. new text end

new text begin Appeal to Tax Court. new text end

new text begin Within 60 days after the commissioner denies
an appeal, or within 120 days after the commissioner received a written appeal if the
commissioner has not made a determination in that time, the claimant may appeal to Tax
Court under chapter 271 as if the appeal is from an order of the commissioner.
new text end

new text begin Subd. 9. new text end

new text begin Exemption from Administrative Procedure Act. new text end

new text begin This section is not
subject to chapter 14.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 54. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2006, section 270.073, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52;
and 270.53, new text end new text begin are repealed.
new text end

new text begin (c) new text end new text begin Minnesota Statutes 2006, section 279.01, subdivision 2, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
except that paragraph (a) is effective beginning January 2, 2007, for taxes payable in
2008 and thereafter.
new text end

ARTICLE 5

MISCELLANEOUS

Section 1.

new text begin [270C.435] REFUNDS NOT SUBJECT TO ATTACHMENT OR
GARNISHMENT.
new text end

new text begin No amount of a tax refund or other payment payable by the commissioner to
a taxpayer is assignable or subject to execution, levy, attachment, garnishment, lien
foreclosure, or other legal process, except as specifically provided by law.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read:

Subd. 2.

Required and excluded tax preparers.

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for penalties on returns filed after
December 31, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read:

Subd. 3.

State reimbursement.

(a) deleted text begin By February 15 of each year, the treasurer of
the relief association shall apply to the commissioner of revenue deleted text end new text begin Each year, to be eligible
new text end for state reimbursement of the amount of supplemental benefits paid under subdivision 2
during the preceding calendar year new text begin , the relief association must apply to the commissioner
of revenue by February 15 new text end . By March 15 the commissioner shall reimburse the relief
association for the amount of the supplemental benefits paid to qualified recipients.

(b) The commissioner of revenue shall prescribe the form of and supporting
information that must be supplied as part of the application for state reimbursement. new text begin
The commissioner of revenue shall reimburse the relief association by paying the
reimbursement amount to the treasurer of the municipality where the association is located.
Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement
to the treasurer of the association if the association has filed a financial report with the
municipality. If the relief association has not filed a financial report with the municipality,
the municipal treasurer shall delay transmission of the reimbursement payment to the
association until the complete financial report is filed. If the association has dissolved or
has been removed as a trustee of state aid, the treasurer shall deposit the money in a
special account in the municipal treasury, and the money may be disbursed only for the
purposes and in the manner provided in section 424A.08. When paid to the association, new text end

deleted text begin (c) deleted text end the reimbursement payment must be deposited in the special fund of the relief
association.

deleted text begin (d) deleted text end new text begin (c) new text end A sum sufficient to make the payments is appropriated from the general fund
to the commissioner of revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2007, and thereafter.
new text end