HF 946

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to economic development; providing for an
international economic development zone; providing tax
incentives; requiring a report; appropriating money;
amending Minnesota Statutes 2004, sections 272.02, by
adding a subdivision; 290.01, subdivisions 19b, 29;
290.06, subdivision 2c, by adding a subdivision;
290.067, subdivision 1; 290.0671, subdivision 1;
290.091, subdivision 2; 290.0921, subdivision 3;
290.0922, subdivisions 2, 3; 297A.68, by adding a
subdivision; proposing coding for new law in Minnesota
Statutes, chapter 469.

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

Section 1.

Minnesota Statutes 2004, section 272.02, is
amended by adding a subdivision to read:

new text begin Subd. 68. new text end

new text begin International economic development zone
property. new text end

new text begin (a) Improvements to real property, and personal
property, classified under section 273.13, subdivision 24, and
located within the international economic development zone
designated under section 469.322, are exempt from ad valorem
taxes levied under chapter 275, if the improvements are:
new text end

new text begin (1) part of a regional distribution center as defined in
section 469.321; or
new text end

new text begin (2) occupied by a qualified business as defined in section
469.321, that uses the improvements primarily in freight
forwarding operations.
new text end

new text begin (b) The exemption applies beginning for the first
assessment year after designation of the international economic
development zone. The exemption applies to each assessment year
that begins during the duration of the international economic
development zone. To be exempt under paragraph (a), clause (2),
the property must be occupied by July 1 of the assessment year
by a qualified business that has signed the business subsidy
agreement by July 1 of the assessment year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for
property taxes payable in 2008.
new text end

Sec. 2.

Minnesota Statutes 2004, section 290.01,
subdivision 19b, is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

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

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

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

(3) the amount paid to others, less the amount used to
claim the credit allowed under section 290.0674, not to exceed
$1,625 for each qualifying child in grades kindergarten to 6 and
$2,500 for each qualifying child in grades 7 to 12, for tuition,
textbooks, and transportation of each qualifying child in
attending an elementary or secondary school situated in
Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin,
wherein a resident of this state may legally fulfill the state's
compulsory attendance laws, which is not operated for profit,
and which adheres to the provisions of the Civil Rights Act of
1964 and chapter 363A. For the purposes of this clause,
"tuition" includes fees or tuition as defined in section
290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and
equipment purchased or leased for use in elementary and
secondary schools in teaching only those subjects legally and
commonly taught in public elementary and secondary schools in
this state. Equipment expenses qualifying for deduction
includes expenses as defined and limited in section 290.0674,
subdivision 1, clause (3). "Textbooks" does not include
instructional books and materials used in the teaching of
religious tenets, doctrines, or worship, the purpose of which is
to instill such tenets, doctrines, or worship, nor does it
include books or materials for, or transportation to,
extracurricular activities including sporting events, musical or
dramatic events, speech activities, driver's education, or
similar programs. For purposes of the subtraction provided by
this clause, "qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

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

(6) to the extent included in federal taxable income,
postservice benefits for youth community service under section
124D.42 for volunteer service under United States Code, title
42, sections 12601 to 12604;

(7) to the extent not deducted in determining federal
taxable income by an individual who does not itemize deductions
for federal income tax purposes for the taxable year, an amount
equal to 50 percent of the excess of charitable contributions
allowable as a deduction for the taxable year under section
170(a) of the Internal Revenue Code over $500;

(8) 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;

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

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

(11) job opportunity building zone income as provided under
section 469.316 new text begin ; and
new text end

new text begin (12) international economic development zone income as
provided under section 469.325 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. 3.

Minnesota Statutes 2004, section 290.01,
subdivision 29, is amended to read:

Subd. 29.

Taxable income.

The term "taxable income"
means:

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

(2) for corporations, the taxable net income less

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

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

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

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

new text begin (v) the exemption for operating in an international
economic development zone under section 469.326 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. 4.

Minnesota Statutes 2004, section 290.06,
subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates,
and trusts.

(a) The income taxes imposed by this chapter upon
married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be
computed by applying to their taxable net income the following
schedule of rates:

(1) On the first $25,680, 5.35 percent;

(2) On all over $25,680, but not over $102,030, 7.05
percent;

(3) On all over $102,030, 7.85 percent.

Married individuals filing separate returns, estates, and
trusts must compute their income tax by applying the above rates
to their taxable income, except that the income brackets will be
one-half of the above amounts.

(b) The income taxes imposed by this chapter upon unmarried
individuals must be computed by applying to taxable net income
the following schedule of rates:

(1) On the first $17,570, 5.35 percent;

(2) On all over $17,570, but not over $57,710, 7.05
percent;

(3) On all over $57,710, 7.85 percent.

(c) The income taxes imposed by this chapter upon unmarried
individuals qualifying as a head of household as defined in
section 2(b) of the Internal Revenue Code must be computed by
applying to taxable net income the following schedule of rates:

(1) On the first $21,630, 5.35 percent;

(2) On all over $21,630, but not over $86,910, 7.05
percent;

(3) On all over $86,910, 7.85 percent.

(d) In lieu of a tax computed according to the rates set
forth in this subdivision, the tax of any individual taxpayer
whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in
accordance with tables prepared and issued by the commissioner
of revenue based on income brackets of not more than $100. The
amount of tax for each bracket shall be computed at the rates
set forth in this subdivision, provided that the commissioner
may disregard a fractional part of a dollar unless it amounts to
50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the
entire year must compute the individual's Minnesota income tax
as provided in this subdivision. After the application of the
nonrefundable credits provided in this chapter, the tax
liability must then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source
federal adjusted gross income as defined in section 62 of the
Internal Revenue Code and increased by the additions required
under section 290.01, subdivision 19a, clauses (1), (5), and
(6), and reduced by the subtraction under section 290.01,
subdivision 19b, deleted text begin clause deleted text end new text begin clauses new text end (11) new text begin and (12) new text end , and the Minnesota
assignable portion of the subtraction for United States
government interest under section 290.01, subdivision 19b,
clause (1), after applying the allocation and assignability
provisions of section 290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted
gross income as defined in section 62 of the Internal Revenue
Code of 1986, increased by the amounts specified in section
290.01, subdivision 19a, clauses (1), (5), and (6), and reduced
by the amounts specified in section 290.01, subdivision 19b,
clauses (1) deleted text begin and deleted text end new text begin , new text end (11) new text begin , and (12) 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. 5.

Minnesota Statutes 2004, section 290.06, is
amended by adding a subdivision to read:

new text begin Subd. 32. new text end

new text begin International economic development zone job
credit. new text end

new text begin A taxpayer that is a qualified business, as defined in
section 469.321, subdivision 6, is allowed a credit as
determined under section 469.327 against the tax imposed by this
chapter.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2004, section 290.067,
subdivision 1, is amended to read:

Subdivision 1.

Amount of credit.

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

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

(c) If a married couple:

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

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

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

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

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

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

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

In the case of a nonresident, part-year resident, or a
person who has earned income not subject to tax under this
chapter including earned income excluded pursuant to section
290.01, subdivision 19b, deleted text begin clause deleted text end new text begin clauses new text end (11) new text begin and (12) new text end , the
credit determined under section 21 of the Internal Revenue Code
must be allocated based on the ratio by which the earned income
of the claimant and the claimant's spouse from Minnesota sources
bears to the total earned income of the claimant and the
claimant's spouse.

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. 7.

Minnesota Statutes 2004, section 290.0671,
subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

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

(b) For individuals with no qualifying children, the credit
equals 1.9125 percent of the first $4,620 of earned income. The
credit is reduced by 1.9125 percent of earned income or modified
adjusted gross income, whichever is greater, in excess of
$5,770, but in no case is the credit less than zero.

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

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

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

(f) For a person who was a resident for the entire tax year
and has earned income not subject to tax under this chapter,
including income excluded under section 290.01, subdivision 19b,
clause (11) new text begin or (12) new text end , the credit must be allocated based on the
ratio of federal adjusted gross income reduced by the earned
income not subject to tax under this chapter over federal
adjusted gross income.

(g) For tax years beginning after December 31, 2001, and
before December 31, 2004, the $5,770 in paragraph (b), the
$15,080 in paragraph (c), and the $17,890 in paragraph (d),
after being adjusted for inflation under subdivision 7, are each
increased by $1,000 for married taxpayers filing joint returns.

(h) For tax years beginning after December 31, 2004, and
before December 31, 2007, the $5,770 in paragraph (b), the
$15,080 in paragraph (c), and the $17,890 in paragraph (d),
after being adjusted for inflation under subdivision 7, are each
increased by $2,000 for married taxpayers filing joint returns.

(i) For tax years beginning after December 31, 2007, and
before December 31, 2010, the $5,770 in paragraph (b), the
$15,080 in paragraph (c), and the $17,890 in paragraph (d),
after being adjusted for inflation under subdivision 7, are each
increased by $3,000 for married taxpayers filing joint returns.
For tax years beginning after December 31, 2008, the $3,000 is
adjusted annually for inflation under subdivision 7.

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2004, section 290.091,
subdivision 2, is amended to read:

Subd. 2.

Definitions.

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

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

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

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

(i) the charitable contribution deduction under section 170
of the Internal Revenue Code to the extent that the deduction
exceeds 1.0 percent of adjusted gross income, as defined in
section 62 of the Internal Revenue Code;

(ii) the medical expense deduction;

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

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

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

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

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

(6) the amount of addition required by section 290.01,
subdivision 19a, clause (7);

less the sum of the amounts determined under the following:

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

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

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

(4) amounts subtracted from federal taxable income as
provided by section 290.01, subdivision 19b, clauses (10) deleted text begin and deleted text end new text begin ,
new text end (11) new text begin , and (12) new text end .

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

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

(c) "Tentative minimum tax" equals 6.4 percent of
alternative minimum taxable income after subtracting the
exemption amount determined under subdivision 3.

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

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

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 2004, section 290.0921,
subdivision 3, is amended to read:

Subd. 3.

Alternative minimum taxable income.

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

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

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

(2) The portion of the depreciation deduction allowed for
federal income tax purposes under section 168(k) of the Internal
Revenue Code that is required as an addition under section
290.01, subdivision 19c, clause (16), is disallowed in
determining alternative minimum taxable income.

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

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

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

(6) The special rule for dividends from section 936
companies under section 56(g)(4)(C)(iii) does not apply.

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

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

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

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

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

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

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

(13) For purposes of determining the amount of adjusted
current earnings under section 56(g)(3) of the Internal Revenue
Code, no adjustment shall be made under section 56(g)(4) of the
Internal Revenue Code with respect to (i) the amount of foreign
dividend gross-up subtracted as provided in section 290.01,
subdivision 19d, clause (1), (ii) the amount of refunds of
income, excise, or franchise taxes subtracted as provided in
section 290.01, subdivision 19d, clause (10), or (iii) the
amount of royalties, fees or other like income subtracted as
provided in section 290.01, subdivision 19d, clause (11).

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

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

new text begin (16) Alternative minimum taxable income excludes the income
from operating in an international economic development zone as
provided under section 469.326.
new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2004, section 290.0922,
subdivision 2, is amended to read:

Subd. 2.

Exemptions.

The following entities are exempt
from the tax imposed by this section:

(1) corporations exempt from tax under section 290.05;

(2) real estate investment trusts;

(3) regulated investment companies or a fund thereof; and

(4) entities having a valid election in effect under
section 860D(b) of the Internal Revenue Code;

(5) town and farmers' mutual insurance companies;

(6) cooperatives organized under chapter 308A that provide
housing exclusively to persons age 55 and over and are
classified as homesteads under section 273.124, subdivision 3;
deleted text begin and
deleted text end

(7) an entity, if for the taxable year all of its property
is located in a job opportunity building zone designated under
section 469.314 and all of its payroll is a job opportunity
building zone payroll under section 469.310 new text begin ; and
new text end

new text begin (8) an entity, if for the taxable year all of its property
is located in an international economic development zone
designated under section 469.322, and all of its payroll is
international economic development zone payroll under section
469.321 new text end .

Entities not specifically exempted by this subdivision are
subject to tax under this section, notwithstanding section
290.05.

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. 11.

Minnesota Statutes 2004, section 290.0922,
subdivision 3, is amended to read:

Subd. 3.

Definitions.

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

(b) "Minnesota property" means total Minnesota tangible
property as provided in section 290.191, subdivisions 9 to 11,
any other tangible property located in Minnesota, but does not
include property located in a job opportunity building zone
designated under section 469.314 new text begin , new text end or property of a qualified
business located in a biotechnology and health sciences industry
zone designated under section 469.334 new text begin , or property of a
qualified business located in the international economic
development zone designated under section 469.322 new text end . Intangible
property shall not be included in Minnesota property for
purposes of this section. Taxpayers who do not utilize tangible
property to apportion income shall nevertheless include
Minnesota property for purposes of this section. On a return
for a short taxable year, the amount of Minnesota property
owned, as determined under section 290.191, shall be included in
Minnesota property based on a fraction in which the numerator is
the number of days in the short taxable year and the denominator
is 365.

(c) "Minnesota payrolls" means total Minnesota payrolls as
provided in section 290.191, subdivision 12, but does not
include job opportunity building zone payrolls under section
469.310, subdivision 8, or biotechnology and health sciences
industry zone deleted text begin payroll deleted text end new text begin payrolls new text end under section 469.330,
subdivision 8 new text begin , or international economic development zone
payrolls under section 469.321, subdivision 9 new text end . Taxpayers who do
not utilize payrolls to apportion income shall nevertheless
include Minnesota payrolls for purposes of this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2004, section 297A.68, is
amended by adding a subdivision to read:

new text begin Subd. 40. new text end

new text begin International economic development zones. new text end

new text begin (a)
Purchases of tangible personal property or taxable services by a
qualified business, as defined in section 469.321, are exempt if
the property or services are primarily used or consumed in the
international economic development zone designated under section
469.322.
new text end

new text begin (b) Purchase and use of construction materials, supplies,
and equipment incorporated into the construction of improvements
to real property in the international economic development zone
are exempt if the improvements after completion of construction
are to be used as a regional distribution center as defined in
section 469.321 or otherwise used in the conduct of freight
forwarding activities of a qualified business as defined in
section 469.321. This exemption applies regardless of whether
the purchases are made by the business or a contractor.
new text end

new text begin (c) The exemptions under this subdivision apply to a local
sales and use tax, regardless of whether the local tax is
imposed on sales taxable under this chapter or in another law,
ordinance, or charter provision.
new text end

new text begin (d) The exemption in paragraph (a) applies to sales during
the duration of the zone, if the purchase was made and delivery
received after the business signs the business subsidy agreement
required under chapter 469. The exemption in paragraph (b)
applies to sales made before the end of the duration of the
zone, if the purchase and delivery were made after June 30, 2006.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

new text begin [469.321] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 469.321
to 469.328, the following terms have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Foreign trade zone. new text end

new text begin "Foreign trade zone" means
a foreign trade zone designated pursuant to United States Code,
title 19, section 81a, for the right to use the powers provided
in United States Code, title 19, sections 81a to 81u, or a
subzone authorized by the foreign trade zone.
new text end

new text begin Subd. 3. new text end

new text begin Foreign trade zone authority. new text end

new text begin "Foreign trade
zone authority" means the Greater Metropolitan Foreign Trade
Zone Commission number 119, a joint powers authority created by
the county of Hennepin, the cities of Minneapolis and
Bloomington, and the Metropolitan Airports Commission, under the
authority of section 469.059, 469.101, or 471.59, which includes
any other political subdivisions that enter into the authority
after its creation.
new text end

new text begin Subd. 4. new text end

new text begin International economic development zone or
zone. new text end

new text begin An "international economic development zone" or "zone" is
a zone so designated under section 469.322.
new text end

new text begin Subd. 5. new text end

new text begin Person. new text end

new text begin "Person" includes an individual,
corporation, partnership, limited liability company,
association, or any other entity.
new text end

new text begin Subd. 6. new text end

new text begin Qualified business. new text end

new text begin "Qualified business" means
a person who has signed a business subsidy agreement as required
under sections 116J.993 to 116J.995 and 469.323, subdivision 4,
carrying on a trade or business at a place of business located
within the international economic development zone that is:
new text end

new text begin (1)(i) engaged in the furtherance of international export
or import of goods as a freight forwarder; and (ii) certified by
the foreign trade zone authority as a trade or business that
furthers the purpose of developing international distribution
capacity and capability; or
new text end

new text begin (2) the owner or operator of a regional distribution center.
new text end

new text begin Subd. 7. new text end

new text begin Regional distribution center. new text end

new text begin A "regional
distribution center" is a distribution center developed within a
foreign trade zone. The regional distribution center must have
as its primary purpose, the facilitation of the gathering of
freight for the purpose of centralizing the functions necessary
for the shipment of freight in international commerce,
including, but not limited to, security and customs functions.
new text end

new text begin Subd. 8. new text end

new text begin International economic development zone
percentage or zone percentage. new text end

new text begin "International economic
development zone percentage" or "zone percentage" means the
following fraction reduced to a percentage:
new text end

new text begin (1) the numerator of the fraction is:
new text end

new text begin (i) the ratio of the taxpayer's property factor under
section 290.191 located in the zone for the taxable year which
is land, buildings, machinery and equipment, inventories, and
other tangible personal property that is a regional distribution
center or is used in the furtherance of the taxpayer's freight
forwarding operations over the property factor numerator
determined under section 290.191, plus
new text end

new text begin (ii) the ratio of the taxpayer's international economic
development zone payroll factor under subdivision 9 over the
payroll factor numerator determined under section 290.191; and
new text end

new text begin (2) the denominator of the fraction is two.
new text end

new text begin When calculating the zone percentage for a business that is
part of a unitary business as defined under section 290.17,
subdivision 4, the denominator of the payroll and property
factors is the Minnesota payroll and property of the unitary
business as reported on the combined report under section
290.17, subdivision 4, paragraph (j).
new text end

new text begin Subd. 9. new text end

new text begin International economic development zone payroll
factor or international economic development zone payroll.
new text end

new text begin "International economic development zone payroll factor" or
"international economic development zone payroll" is that
portion of the payroll factor under section 290.191 used to
operate a regional distribution center, or used in the
furtherance of the taxpayer's freight forwarding operations that
represents:
new text end

new text begin (1) wages or salaries paid to an individual for services
performed in the international economic development zone; or
new text end

new text begin (2) wages or salaries paid to individuals working from
offices within the international economic development zone, if
their employment requires them to work outside the zone and the
work is incidental to the work performed by the individual
within the zone. However, in no case does zone payroll include
wages paid for work performed outside the zone of an employee
who performs more than ten percent of total services for the
employer outside the zone.
new text end

new text begin Subd. 10. new text end

new text begin Freight forwarder. new text end

new text begin "Freight forwarder" is a
business that, for compensation, ensures that goods produced or
sold by another business move from point of origin to point of
destination.
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.

new text begin [469.3215] APPLICATION FOR DESIGNATION.
new text end

new text begin Subdivision 1. new text end

new text begin Who may apply. new text end

new text begin One or more local
government units, or a joint powers board under section 471.59,
acting on behalf of two or more units, may apply for designation
of an area as an international economic development zone. All
or part of the area proposed for designation as a zone must be
located within the boundaries of each of the governmental
units. A local government unit may not submit or have submitted
on its behalf more than one application for designation of an
international economic development zone.
new text end

new text begin Subd. 2. new text end

new text begin Application content. new text end

new text begin (a) The application must
include:
new text end

new text begin (1) a resolution or ordinance adopted by each of the cities
or towns and the counties in which the zone is located, agreeing
to provide all of the local tax exemptions provided under
section 469.315;
new text end

new text begin (2) an agreement by the applicant to treat incentives
provided under the zone designation as business subsidies under
sections 116J.993 to 116J.995 and to comply with the
requirements of that law; and
new text end

new text begin (3) supporting evidence to allow the authority to evaluate
the application.
new text end

new text begin (b) Applications must be submitted to the authority no
later than December 31, 2005.
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. 15.

new text begin [469.322] DESIGNATION OF INTERNATIONAL ECONOMIC
DEVELOPMENT ZONE.
new text end

new text begin (a) An area designated as a foreign trade zone may be
designated by the foreign trade zone authority as an
international economic development zone if within the zone a
regional distribution center is being developed pursuant to
section 469.323. The zone must consist of contiguous area of
not less than 500 acres and not more than 1,000 acres. The
designation authority under this section is limited to one zone.
new text end

new text begin (b) In making the designation, the foreign trade zone
authority, in consultation with the Minnesota Department of
Transportation, the Minnesota Department of Employment and
Economic Development, the Minnesota Department of Revenue, and
the Metropolitan Council, shall consider access to major
transportation routes, consistency with current state
transportation and air cargo planning, adequacy of the size of
the site, access to airport facilities, present and future
capacity at the designated airport, the capability to meet
integrated present and future air cargo, security, and
inspection services, and access to other infrastructure and
financial incentives to maximize the security, efficiency, and
volume of Minnesota's export shipments. The border of the
international economic development zone must be no more than 60
miles distant or 90 minutes drive time from the border of the
Minneapolis-St. Paul International Airport.
new text end

new text begin (c) Prior to a final site designation, the foreign trade
zone authority, in consultation with the applicant, must conduct
a transportation impact study based on the regional model and
utilizing traffic forecasting and assignments. The results must
be used to evaluate the effects of the proposed use on the
transportation system and identify any needed improvements. If
the site is in the metropolitan area the study must also
evaluate the effect of the transportation impacts on the
Metropolitan Transportation System plan as well as the
comprehensive plans of the municipalities that would be
affected. The cost of the study must be paid by the applicant.
new text end

new text begin (d) Final zone designation must be made by June 30, 2006.
new text end

new text begin (e) Duration of the zone is a 12-year period beginning on
January 1, 2007.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

new text begin [469.323] FOREIGN TRADE ZONE AUTHORITY POWERS.
new text end

new text begin Subdivision 1. new text end

new text begin Development of regional distribution
center. new text end

new text begin The foreign trade zone authority shall be responsible
for creating a development plan for the regional distribution
center. The regional distribution center must be developed with
the purpose of expanding, on a regional basis, international
distribution capacity and capability. The foreign trade zone
authority shall consult only with municipalities that have
indicated to the authority an interest in locating the
international economic development zone within their boundaries,
as well as interested businesses, potential financiers, and
appropriate state and federal agencies.
new text end

new text begin Subd. 2. new text end

new text begin Business plan. new text end

new text begin Before designation of an
international economic development zone under section 469.322,
the governing body of the foreign trade zone authority shall
prepare a business plan. The plan must establish performance
goals for the zone. These goals must set out, at a minimum, the
amount of investment, the number of jobs, and the amount of
freight handled expected to be attained at the end of three-,
five-, and ten-year periods by the zone. The plan also must
include an analysis of the economic feasibility of the regional
distribution center once it becomes operational and of the
operations of freight forwarders and other businesses that
choose to locate within the boundaries of the zone. The
analysis must provide profitability models that:
new text end

new text begin (1) include the benefits of the incentives;
new text end

new text begin (2) estimate the amount of time needed to achieve
profitability; and
new text end

new text begin (3) analyze the length of time incentives will be necessary
to the economic viability of the regional distribution center.
new text end

new text begin If the governing body of the foreign trade authority
determines that the models do not establish the economic
feasibility of the project, the regional distribution center
does not meet the development requirements of this section and
section 469.322.
new text end

new text begin Subd. 3. new text end

new text begin Port authority powers. new text end

new text begin The governing body of
the foreign trade zone authority may establish a port authority
that has the same powers as a port authority established under
section 469.049. If the foreign trade zone authority
establishes a port authority, the governing body of the foreign
trade zone authority may exercise all powers granted to a city
by sections 469.048 to 469.068 or other law, except the power to
levy property taxes under section 469.053.
new text end

new text begin Subd. 4. new text end

new text begin Business subsidy law. new text end

new text begin Tax exemptions and job
credits provided under this section are business subsidies paid
by the affected local government for the purpose of sections
116J.871 and 116J.993 to 116J.995.
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.

new text begin [469.324] TAX INCENTIVES IN INTERNATIONAL
ECONOMIC DEVELOPMENT ZONE.
new text end

new text begin Subdivision 1. new text end

new text begin Availability. new text end

new text begin Qualified businesses that
operate in an international economic development zone,
individuals who invest in a regional distribution center or
qualified businesses that operate in an international economic
development zone, and property located in an international
economic development zone qualify for:
new text end

new text begin (1) exemption from individual income taxes as provided
under section 469.325;
new text end

new text begin (2) exemption from corporate franchise taxes as provided
under section 469.326;
new text end

new text begin (3) exemption from the state sales and use tax and any
local sales and use taxes on qualifying purchases as provided in
section 297A.68, subdivision 40;
new text end

new text begin (4) exemption from the property tax as provided in section
272.02, subdivision 68; and
new text end

new text begin (5) the jobs credit allowed under section 469.327.
new text end

Sec. 18.

new text begin [469.325] INDIVIDUAL INCOME TAX EXEMPTION.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin An individual, estate, or
trust operating a trade or business in the international
economic development zone, and an individual making a qualifying
investment in a qualified business operating in the
international economic development zone, qualifies for the
exemptions from taxes imposed under chapter 290, as provided in
this section. The exemptions provided under this section apply
only to the extent that the income otherwise would be taxable
under chapter 290. Subtractions under this section from federal
taxable income, alternative minimum taxable income, or any other
base subject to tax are limited to the amount that otherwise
would be included in the tax base absent the exemption under
this section. This section applies only to tax years beginning
during the duration of the zone.
new text end

new text begin Subd. 2. new text end

new text begin Rents. new text end

new text begin An individual, estate, or trust is
exempt from the taxes imposed under chapter 290 on net rents
derived from real or tangible personal property used by a
qualified business and located in the zone for the taxable year
in which the zone was designated an international economic
development zone. If tangible personal property was used both
within and outside of the zone by the qualified business, the
exemption amount for the net rental income must be multiplied by
a fraction, the numerator of which is the number of days the
property was used in the zone and the denominator of which is
the total days the property is rented by a qualified business.
new text end

new text begin Subd. 3. new text end

new text begin Business income. new text end

new text begin An individual, estate, or
trust is exempt from the taxes imposed under chapter 290 on net
income from the operation of a qualified business in the
international economic development zone. If the trade or
business is carried on within and outside of the zone and the
individual is not a resident of Minnesota, the exemption must be
apportioned based on the zone percentage for the taxable year.
If the trade or business is carried on within or outside of the
zone and the individual is a resident of Minnesota, the
exemption must be apportioned based on the zone percentage for
the taxable year, except the ratios under section 469.321,
subdivision 8, clause (1), items (i) and (ii), must use the
denominators of the property and payroll factors determined
under section 290.191. No subtraction is allowed under this
section in excess of 20 percent of the sum of the international
economic development zone payroll and the adjusted basis of the
property at the time that the property is first used in the
international economic development zone by the business.
new text end

new text begin Subd. 4. new text end

new text begin Capital gains. new text end

new text begin (a) An individual, estate, or
trust is exempt from the taxes imposed under chapter 290 on:
new text end

new text begin (1) net gain derived on a sale or exchange of real property
located in the international economic development zone and used
by a qualified business. If the property was held by the
individual, estate, or trust during a period when the zone was
not designated, the gain must be prorated based on the
percentage of time, measured in calendar days, that the real
property was held by the individual during the period the zone
designation was in effect to the total period of time the real
property was held by the individual;
new text end

new text begin (2) net gain derived on a sale or exchange of tangible
personal property used by a qualified business in the
international economic development zone. If the property was
held by the individual, estate, or trust during a period when
the zone was not designated, the gain must be prorated based on
the percentage of time, measured in calendar days, that the
property was held by the individual during the period the zone
designation was in effect to the total period of time the
property was held by the individual, estate, or trust. If the
tangible personal property was used outside of the zone during
the period of the zone's designation, the exemption must be
multiplied by a fraction, the numerator of which is the number
of days the property was used in the zone during the time of the
designation and the denominator of which is the total days the
property was held during the time of the designation; and
new text end

new text begin (3) net gain derived on a sale of an ownership interest in
a qualified business operating in the international economic
development zone, meeting the requirements of paragraph (b).
The exemption on the gain must be multiplied by the zone
percentage of the business for the taxable year prior to the
sale.
new text end

new text begin (b) A qualified business meets the requirements of
paragraph (a), clause (3), if it is a corporation, an S
corporation, or a partnership, and for the taxable year its
international economic development zone percentage exceeds 25
percent. For purposes of paragraph (a), clause (3), the zone
percentage must be calculated by modifying the ratios under
section 469.321, subdivision 8, clause (1), items (i) and (ii),
to use the denominators of the property and payroll factors
determined under section 290.191. Upon the request of an
individual, estate, or trust holding an ownership interest in
the entity, the entity must certify to the owner, in writing,
the international economic development zone percentage needed to
determine the exemption.
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. 19.

new text begin [469.326] CORPORATE FRANCHISE TAX EXEMPTION.
new text end

new text begin (a) A qualified business is exempt from taxation under
section 290.02, the alternative minimum tax under section
290.0921, and the minimum fee under section 290.0922, on the
portion of its income attributable to operations within the
international economic development zone. This exemption is
determined as follows:
new text end

new text begin (1) for purposes of the tax imposed under section 290.02,
by multiplying its taxable net income by its zone percentage and
subtracting the result in determining taxable income;
new text end

new text begin (2) for purposes of the alternative minimum tax under
section 290.0921, by multiplying its alternative minimum taxable
income by its zone percentage and reducing alternative minimum
taxable income by this amount; and
new text end

new text begin (3) for purposes of the minimum fee under section 290.0922,
by excluding property and payroll in the zone from the
computations of the fee or by exempting the entity under section
290.0922, subdivision 2, clause (8).
new text end

new text begin (b) No subtraction is allowed under this section in excess
of 20 percent of the sum of the corporation's international
economic development zone payroll and the adjusted basis of the
zone property at the time that the property is first used in the
international economic development zone by the corporation.
new text end

new text begin (c) This section applies only to tax years beginning during
the duration of the international economic development zone.
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. 20.

new text begin [469.327] JOBS CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin A qualified business is
allowed a credit against the taxes imposed under chapter 290.
The credit equals seven percent of the:
new text end

new text begin (1) lesser of:
new text end

new text begin (i) zone payroll for the taxable year, less the zone
payroll for the base year; or
new text end

new text begin (ii) total Minnesota payroll for the taxable year, less
total Minnesota payroll for the base year; minus
new text end

new text begin (2) $30,000 multiplied by the number of full-time
equivalent employees that the qualified business employs in the
international economic development zone for the taxable year,
minus the number of full-time equivalent employees the business
employed in the zone in the base year, but not less than zero.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

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

new text begin (b) "Base year" means the taxable year beginning during the
calendar year in which the zone designation was made under
section 469.322, paragraph (d).
new text end

new text begin (c) "Full-time equivalent employees" means the equivalent
of annualized expected hours of work equal to 2,080 hours.
new text end

new text begin (d) "Minnesota payroll" means the wages or salaries
attributed to Minnesota under section 290.191, subdivision 12,
for the qualified business or the unitary business of which the
qualified business is a part, whichever is greater.
new text end

new text begin (e) "Zone payroll" means wages or salaries used to
determine the zone payroll factor for the qualified business,
less the amount of compensation attributable to any employee
that exceeds $100,000.
new text end

new text begin Subd. 3. new text end

new text begin Inflation adjustment. new text end

new text begin For taxable years
beginning after December 31, 2004, the dollar amounts in
subdivisions 1, clause (2); and 2, paragraph (e), are annually
adjusted for inflation. The commissioner of revenue shall
adjust the amounts by the percentage determined under section
290.06, subdivision 2d, for the taxable year.
new text end

new text begin Subd. 4. new text end

new text begin Refundable. new text end

new text begin If the amount of the credit exceeds
the liability for tax under chapter 290, the commissioner of
revenue shall refund the excess to the qualified business.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

new text begin [469.328] REPAYMENT OF TAX BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Repayment obligation. new text end

new text begin A person must repay
the amount of the tax reduction received under section 469.324,
subdivision 1, clauses (1) to (5), or credit received under
section 469.327, during the two years immediately before it
ceased to operate in the zone as a qualified business, if the
person ceased to operate its facility located within the zone,
ceased to be in compliance with the terms of the business
subsidy agreement, or otherwise ceases to be or is not a
qualified business.
new text end

new text begin Subd. 2. new text end

new text begin Disposition of repayment. new text end

new text begin The repayment must be
paid to the state to the extent it represents a state tax
reduction and to the county to the extent it represents a
property tax reduction. Any amount repaid to the state must be
deposited in the general fund. Any amount repaid to the county
for the property tax exemption must be distributed to the local
governments with authority to levy taxes in the zone in the same
manner provided for distribution of payment of delinquent
property taxes. Any repayment of local sales or use taxes must
be repaid to the jurisdiction imposing the local sales or use
tax.
new text end

new text begin Subd. 3. new text end

new text begin Repayment procedures. new text end

new text begin (a) For the repayment of
taxes imposed under chapter 290 or 297A or local taxes collected
pursuant to section 297A.99, a person must file an amended
return with the commissioner of revenue and pay any taxes
required to be repaid within 30 days after ceasing to be a
qualified business. The amount required to be repaid is
determined by calculating the tax for the period for which
repayment is required without regard to the tax reductions and
credits allowed under section 469.324.
new text end

new text begin (b) For the repayment of property taxes, the county auditor
shall prepare a tax statement for the person, applying the
applicable tax extension rates for each payable year and provide
a copy to the business. The person must pay the taxes to the
county treasurer within 30 days after receipt of the tax
statement. The taxpayer may appeal the valuation and
determination of the property tax to the tax court within 30
days after receipt of the tax statement.
new text end

new text begin (c) The provisions of chapters 270 and 289A relating to the
commissioner of revenue's authority to audit, assess, and
collect the tax and to hear appeals are applicable to the
repayment required under paragraphs (a) and (b). The
commissioner may impose civil penalties as provided in chapter
289A, and the additional tax and penalties are subject to
interest at the rate provided in section 270.75, from 30 days
after ceasing to do business in the zone until the date the tax
is paid.
new text end

new text begin (d) If a property tax is not repaid under paragraph (c),
the county treasurer shall add the amount required to be repaid
to the property taxes assessed against the property for payment
in the year following the year in which the treasurer discovers
that the person ceased to operate in the international economic
development zone.
new text end

new text begin (e) For determining the tax required to be repaid, a tax
reduction is deemed to have been received on the date that the
tax would have been due if the person had not been entitled to
the tax reduction.
new text end

new text begin (f) The commissioner of revenue may assess the repayment of
taxes under paragraph (d) at any time within two years after the
person ceases to be a qualified business, or within any period
of limitations for the assessment of tax under section 289A.38,
whichever is later.
new text end

new text begin Subd. 4. new text end

new text begin Waiver authority. new text end

new text begin The commissioner of revenue
may waive all or part of a repayment, if, in consultation with
the foreign trade zone authority and appropriate officials from
the state and local government units, including the commissioner
of employment and economic development, determines that
requiring repayment of the tax is not in the best interest of
the state or local government and the business ceased operating
as a result of circumstances beyond its control, including, but
not limited to:
new text end

new text begin (1) a natural disaster;
new text end

new text begin (2) unforeseen industry trends; or
new text end

new text begin (3) loss of a major supplier or customer.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

new text begin [469.329] REPORTING REQUIREMENTS.
new text end

new text begin An applicant receiving designation of an international
economic development zone under section 469.322 must annually
report to the commissioner of employment and economic
development on its progress in meeting the zone performance
goals under the business plan for the zone and the applicant's
compliance with the business subsidy law under sections 116J.993
to 116J.995.
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